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41A District Court Financial Analysis

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

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  1. 41A District CourtFinancial Analysis Shelby Charter Township Board of Trustees Presentation March 5, 2013

  2. 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

  3. On a cash basis, Court has netted over $1.4M over the past seven years.

  4. 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

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

  6. 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)

  7. 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.

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

  9. 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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