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41A District Court Financial Analysis. Shelby Charter Township Board of Trustees Presentation March 5, 2013. Summary of District Court Finances. Using cash-based reporting, the Court appears to be providing revenue to the General Fund Expenditures include wages, benefits, operating costs

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41a district court financial analysis

41A District CourtFinancial Analysis

Shelby Charter Township

Board of Trustees Presentation

March 5, 2013

summary of district court finances
Summary of District Court Finances
  • Using cash-based reporting, the Court appears to be providing revenue to the General Fund
  • Expenditures include wages, benefits, operating costs
    • Current year retiree healthcare benefit costs are included
    • About an equal amount is set aside each year to partially fund future costs of current employees
    • Rent & administrative charges NOT included
true cost of district court
True Cost of District Court
  • Court expenditures are under-reported
  • $393,000 per year should be set aside to fund retiree healthcare benefit
    • Shelby currently sets aside about $110,000 per year
  • When considering the true cost of the Court, Shelby has subsidized operations by about $670,000 over the past seven years
slide5

The true cost of court operations requires a General Fund subsidy. Over past 7 years, subsidy amounts to over $670,000.

revenues received if court located elsewhere
Revenues Received if Court Located Elsewhere
  • Over past 7 years, Shelby would have received $200,000 - $300,000 per year from the Court, if the Township were not hosting the Court
  • Total payments would have amounted to over $1.7M
  • True cost of Court over same period results in $670,000 LOSS to the Township
  • Cash basis of Court finances over 7 years: $1.4M net revenues (with substantial unfunded liability on the balance sheet)
slide7

If Shelby did not have responsibility for Court operations, it would have realized $1.78M in cumulative revenues from the Court to the General Fund, over the past 7 years.

slide8

When viewed on an annual basis, Court revenues to Shelby would be most stable if Twp was not host

conclusions
Conclusions
  • District Court operating costs have not been fully accounted for
    • Significant accrued liability should be included in operating costs
    • When factored into the budget, Shelby’s General Fund is effectively subsidizing the Court
  • Shelby’s revenues from the Court are more stable if the Township is not hosting the Court
  • If Court leaves Shelby, Township will be required to pay for a portion of current employee benefits after retirement for many years
    • Shelby Court revenues expected to exceed OPEB costs
    • Liability would be capped and diminish over time
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