(1) If it is proposed by law to consolidate a district of the third class into or with a district of the second class, that consolidation shall not take effect unless each district control unit in the district of the second class, and each district control unit in the district of the third class that contributes to the maintaining, financing, and operating of the district court in the district of the third class, by resolution adopted by the governing body of each of those district control units, approves the consolidation and unless the clerk of each district control unit adopting the resolution files a copy of the resolution with the state court administrator. The consolidation shall take effect upon a date agreed to by all district control units adopting the resolution but not less than 60 days after the last affected district control unit adopted its resolution. The state court administrator shall immediately notify the elections division of the department of state when a consolidation has been approved under this section and the date on which the consolidation will take effect. This subsection shall apply whether the consolidated district remains a district of the second class or the consolidation results in a district of the first class.

    (2) By proposing or authorizing a consolidation of a district of the third class into or with a district of the second class, the legislature is not creating a new obligation for any affected district control unit. If a district control unit, acting through its governing body, approves the consolidation, then the approval constitutes an exercise of the district control unit’s option to increase the level of activity and service offered in that district control unit beyond that required by existing law, as the elements of that option are defined by Act No. 101 of the Public Acts of 1979, being section 21.231 to 21.244 of the Michigan Compiled Laws, and a voluntary acceptance by that district control unit of all expenses and capital improvements which may result from the consolidation of the districts. However, the exercise of the option does not affect the state’s obligation to pay the same portion of each judge’s salary which is paid by the state to other district judges as provided by law, or to appropriate and disburse funds to the district control unit for the necessary costs of state requirements established by a state law which becomes effective on or after December 23, 1978.

    (3) All full-time employees of the district court in the district of the third class shall be transferred to the district court in the consolidated district on the effective date of the consolidation. Except as provided in any agreement of consolidation by the affected district control units, salary, seniority rights, annual leave, sick leave, and retirement benefits of transferred employees shall be preserved and continued in their positions in the consolidated district in a manner not inferior to their prior status.

    (4) On the effective date of the consolidation, each incumbent district judge in both districts shall serve as a district judge in the consolidated district. If an election division is created with the same boundaries as a district before consolidation, each judge from the former district shall be considered an incumbent in the new election division.