Birmingham losses from district court increase
By Lisa Brody
Audited financial statements for fiscal year 2022 for the 48th District Court by UHY LLP Certified Accountants indicated the expenses were higher than anticipated and revenues returned to Birmingham, one of the three major funding units, were less than projected, leaving the city $395,739 in the hole.
Birmingham, Bloomfield Township and West Bloomfield are the major funding units for the 48th District Court. Bloomfield Hills, Keego Harbor, Orchard Lake Village and Sylvan Lake are minor funders, or political subdivisions, which submit their tickets and court cases, and in return, receive a portion back as revenue.
The audit noted, “The Court’s primary source of revenue is from the cities and townships in its jurisdiction. Revenue is distributed back to the funding units and political subdivisions based on their portion of total caseload from the distribution fund (custodial fund). All expenditures are funded by the three funding units of the Court. Any overage is refunded to the funding units based on their individual percentage of annual caseload pursuant to the annual audit.”
According to the audit, revenues for fiscal year 2022 were budgeted at $4.8 million, but came in at $4.2 million, slightly up from fiscal year 2021 at $4 million. Total expenditures for fiscal year 2022 were budgeted at $4.8 million, but were $7.3 million, a $3 million excess expenditure due to new accounting standards adopted, explained Birmingham Finance Director Mark Gerber.
“The court is in a long-term lease with Bloomfield Township and have to record a liability with the lease,” Gerber said.
The three funding communities provide revenue to the court on a quarterly basis to allow it to function, with local expenditures based on what each community expect their annual portion to be.
“We gave the court $1.26 million to fund the court (in 2022), and the actual expenditures of the court allocated to the city of Birmingham were $1.63 million,” Gerber said, which leaves the city with a loss of $259,000 to equal out the city's funding to the court. “That is the amount will have to give the court.”
Incoming city manager Jana Ecker said the way the 48th District Court does its accounting has nothing to do with court revenues or revenues that may be returned to the cities.
“$1.13 million is what we received from the court for revenues. In our mind we received $1.13 million in court revenues – but we allocated $1.63 million. That's our loss of $395,739,” Gerber said.
