District court agreement amended and approved
By Grace Lovins
The Birmingham city commission voted to approve an amendment to the current 48th District Court funding agreement on Monday, January 23, providing a potential solution which could deter the city from opting out of the funding agreement at the end of the month.
Funding for the 48th District Court has been an ongoing struggle for the seven communities the court serves. With the funding agreement that has been in place for several years, the funding units – Birmingham, Bloomfield Township and West Bloomfield – are responsible for the bulk of the court’s costs while the political subdivisions are only responsible for a smaller portion of the court’s expenses.
Personnel from the three funding units and four political subdivisions met with court staff, the court administrator as well as judges Marc Barron and Diane D’Agostini on November 30, 2022, to discuss the court’s 2023 budget. According to assistant city manager Jana Ecker, during that meeting the political subdivisions conceptually agreed to enter into a new funding agreement that was more equitable for all communities.
Birmingham agreed to create a draft of the verbal agreement and, once that was okayed by the other communities, draft a full amendment to the current funding agreement. The draft was sent to the other communities on Monday, January 9, said Ecker.
Under the amended agreement, the political subdivisions – Bloomfield Hills, Keego Harbor, Sylvan Lake and Orchard Lake – would contribute any end-of-year distributions to offset the losses of the funding units in calendar years that the court revenues from all seven communities does not exceed the court’s expenses.
With the way the funding agreement was set up originally, if the court’s revenues exceeded its expenses, the political subdivisions could choose to keep the end-of-year distributions and that often resulted in extra money back in their budget. Though the funding units also receive a portion of what they pay the court, Birmingham was still at a cost deficit because, as a funding unit, they pay more of the court’s expenses.
Using the totals from the court’s 2021 audit, Ecker and finance director Mark Gerber were able to calculate the financial impact to Birmingham using the 1985 funding agreement that included four funding units, the 2021 agreement that included only three funding units, and the proposed addendum to the 2021 funding agreement. With four funding units, the city’s deficit was roughly $153,400; with three funding units the deficit grew to about $189,300; and with the proposed addendum factored in, the deficit would shrink to about $164,000.
Ecker explained that the agreement will need to be approved by each community's governing body, but the caveat is none of the communities are expected to vote on the agreement until after the deadline for Birmingham to pull out as a funding unit. The city has until the end of January to pull out of the funding agreement which, if it did, would take effect in 2024 – Birmingham would still be considered a funding unit for 2023.
Since the agreement has been sent out, Ecker said that management from all seven jurisdictions said they believed the agreement was going to be acceptable. Emails from the political subdivisions included in the commission packet indicate that the probability of all jurisdictions seems very likely, but Birmingham’s approval of the addendum is dependent on all political subdivisions approving the agreement. Without all signatures, the 2021 funding agreement remains in place and the commission will have another year to create a new agreement or decide to opt out of the funding agreement next January.
Commissioners voted 6-1 to approve the amended funding agreement. Commissioner Brad Host voted against the motion since Birmingham would still be losing roughly 24 percent of the funding given to the court.