Local budget upheaval for 48th District Court

By Lisa Brody and Kevin Elliott

The 48th District Court, located in Bloomfield Township, presented its 2022 budget to Bloomfield Township and Birmingham at local meetings on Monday, December 13, and while both communities unanimously approved the spending plan, there is disagreement among the municipalities about continuing to fund it, with Bloomfield Hills opting to discontinue its funding, and Birmingham planning to withdraw from the inter-local agreement by 2023.

The 48th District Court serves the communities of Birmingham, Bloomfield Township, Bloomfield Hills, West Bloomfield, Sylvan Lake, Keego Harbor and Orchard Lake. Of the seven communities, Birmingham, Bloomfield Township, Bloomfield Hills and West Bloomfield are considered “funding units,” as they provide funds to the court to operate. The inter-local agreement was put in place between Birmingham, Bloomfield Township, West Bloomfield and Bloomfield Hills in 1985. With the Bloomfield Hills withdrawal, Bloomfield Township, Birmingham and West Bloomfield remain as the three funding units for the court in 2022.

Keego Harbor, Sylvan Lake, Orchard Lake don’t provide budgetary monies to the court, instead receiving one-third of the revenue generated from court cases each year. Funding communities instead front the money to the court, then split the remaining revenues, minus expenditures. As a result, the amount provided to the court by funding units varies annually, with communities receiving as much as $50,000 or paying more than $100,000 other years.

Bloomfield Hills' opt out from the funding “was a shock,” said Bloomfield Township Supervisor Dani Walsh at the township board of trustees meeting, noting revenue shortfalls at the court were COVID-related.

“We tried to use old (pre-pandemic) numbers, rolling numbers, but it just became clear that Bloomfield Hills no longer wanted to participate… This is four decades of history. Most of us do not see why they did this,” Walsh said.”

Bloomfield Township trustees unanimously approved the $4.7 million budget for 2022 presented by court administrator Patrick Dunn, of which Bloomfield Township is expected to fund 43 percent, or just over $2 million. West Bloomfield is projected to fund 23 percent of the budget, or $1.1 million.

“We did open our doors on August 1 to the public,” Dunn said. “We are continuing a hybrid model where some things are still remote… There are two components to our budget. The pandemic has been driving everything. Our revenue has bounced back, it's not all the way, but it's better. We're 38 percent of our caseload. There were a number of cost cutting items we undertook in 2020, and now we're confronting things like staff shortages. We have lost a number of court staff to other courts. As for expenses and our operating costs, we have applied for a number of grants.”

Birmingham Finance Director Mark Gerber told commissioners at their meeting that the city paid about $828,620 to the court in 2021, and projects court revenue paid to the city to total about $695,542, a shortfall of about $133,000. The city projects contributions to the court in 2022 to total about $1,584,892.81.

Birmingham commissioners unanimously approved funding the 2022 48th District Court budget. However, as court expenditures are expected to rise, and revenues to trend down, commissioners expressed a strong desire to exit the agreement in the future.

“Diversionary programs may expand, and there may be more costs to the court and less fines, depending on the direction of the court,” Birmingham City Manager Tom Markus said.

“I think that’s true,” Birmingham Attorney Mary Kucharek said. “There will be some increase in costs unless there are grants in federal or state dollars that come along with that.”

Following the budget approval, commissioners approved a new inter-local agreement with Bloomfield Township and West Bloomfield to continue to act as funding communities to the court. Kucharek said the existing agreement would expire in January.

“If there isn’t a new agreement reached come January 1, we will automatically revert to the statutory guidelines and requirements,” she said, which she said provides that two-thirds of revenues of the court are returned to the municipality where the court is located.

Markus recommended the commission approve a new agreement among the three remaining funding communities, and consider announcing its intent to opt out in January 2022, with a withdrawal from the agreement at the end of 2022. However, commissioners Clinton Baller and Brad Host questioned whether it would be better to reject the new agreement and be done.

“I suggest we abandon this right now,” Baller suggested. “It’s a bad deal. It’s costing us a lot of money. It’s a sure thing that if we are not a funding community (we receive a portion of revenue).”

Kucharek said the agreement allows the city time to look at the matter, while still following the stipulations of the agreement, which requires communities opting out to provide notice to the member communities in January for removal the following year.

“Bloomfield Hills didn’t meet that stipulation,” Markus said. As such, he said he didn’t believe it was appropriate for Birmingham to withdraw from the agreement.

“Their attorney (Derk Bekerleg) disagrees with us, and their attorney also represents Bloomfield Township and West Bloomfield,” Markus noted. “It’s the same law firm, so it’s unlikely the other two jurisdictions would come to the same conclusion as us.”

Markus and Kucharek said the new agreement provides better returns to funding communities than the state’s law, which the court would be required to follow if another agreement isn’t in place.

“If we argue that Bloomfield Hills should have made a resolution last January, and we did make that argument, I don’t feel it’s honorable for me to jump in now and force the issue,” Markus said. “You rely on me to interact with these people.”

Bekerleg, speaking at the Bloomfield Township trustees meeting, said, “We've worked really hard. Birmingham almost opted out, but we all came to an agreement.”

Walsh said the three funding municipalities have agreed to have quarterly meetings with the court, coming together to have public meetings.

Kucharek said rejecting the agreement would likely put an end to the discussion and any advantages the city may see in the future.

“If we let it die, we will probably never achieve an agreement with other entities,” she said. “Also, Bloomfield Township did accept the agreement. We made changes to the agreement, and they accepted. It’s been going on and we’ve been discussing this for four to six months. Today was the first day they heard we were considering opting out.”

Birmingham city commissioners approved the inter-local agreement with the unwritten provision that it would provide notice of opting out in January, and likely leave the agreement at the end of the year.

Bloomfield Township trustees unanimously approved the inter-local agreement. “We're a community. I commend Birmingham and West Bloomfield for working with us,” said township treasurer Brian Kepes.