The Town of Normal is ratcheting up its rhetoric on the shared sales tax agreement the town and City of Bloomington have with McLean County government. And the county is pushing back hard.
An Aug. 22 letter sent by Normal Mayor Chris Koos to County Board Chair Elizabeth Johnston contains phrases that accuse the county of “stockpiling” sales tax revenue rather than spending it on purposes approved under a decade old intergovernmental agreement (IGA). The letter, obtained by WGLT through a Freedom of Information Act request, called the $20 million fund balance “excessive.” And it objected to county leadership's refusal to have its full board consider the town and city request to pause sales tax sharing during negotiations.
“Your decision to withhold any County Board public discussion presents grave concern about the county’s ability and willingness to negotiate in good faith,” wrote Koos. “The county must be held accountable for their decision to unilaterally ignore their obligation.”
Koos said the lack of action on the amendment to the agreement “only enhances the county’s already excessive fund balances.”
Johnston’s reply on Aug. 27 is equally bare-knuckled.
“The town has engaged in an aggressive and disappointing effort to substantially erode its commitment and the strong communal partnership with gave rise to the IGA,” said Johnston.
She said in the letter the town’s “manner of communication more closely resembles coercion and intimidation, not good faith negotiations.”
Question about spending
Koos has previously voiced concerns about how interest on the accumulated funds was allocated and accounted for. The town contends interest money should be considered part of the intergovernmental agreement and spent only on approved purposes. That is one of the issues Koos said an agreed-on audit could resolve.
In her interview, Johnston said the intergovernmental agreement does not have anything specific in it about interest money and investments.
“At this point, I'm not aware that the money was invested to gain any interest. I'm not sure there's any interest to be sequestered or moved anywhere else,” said Johnston.
It’s common for institutions to make short-term investments of funds that are allocated but not yet disbursed, especially if the project will take some time to come to fruition. Johnston referred questions whether that has or has not happened in this case to the county treasurer.
In his letter, Koos goes further in questioning expenditures.
“We believe McLean County has allocated sales taxes to ineligible expenses,” wrote Koos.
In her letter, Johnston called a foul on use of that phrase and said it’s the first time it was raised in the many months of talks about the agreement. She called it "concerning" and said there are provisions within the agreement on a process to resolve such a possibility.
“This latest accusation is made frivolously, as it contains no specificity. Thus, there is no opportunity to cure any alleged default,” wrote Johnston.
In a WGLT interview, Koos enlarged on the question and said the concern refers to 10 workers at the McLean County jail. He said it is unclear whether all of their job duties as correctional officers bear on mental health programming at the jail or just a portion of them. He said the town does not know how much of the jailors’ compensation should be apportioned to the shared sales tax and how much is borne by the county alone, and the county has not clarified that.
Johnston responded during her WGLT conversation.
“We revamped [the jail] for the mental health pods. One of the requirements was to have additional staff. The base staff for operations in each of the pods is covered by the county. The additional staff to bring it up to code for mental health care in those pods, those additional staff members, are covered by the shared sales tax. They are not allocated to any other portion of the jail. They function within those pods,” said Johnston.
They said, they said
Both the county and town allege the other has changed the terms in the middle of negotiations
“I’ve observed long-standing protocols between County, City, and Town chief elected officials be ignored as you’ve unilaterally chosen to dismiss our many months of discussion and take your own path,” wrote Koos.
Koos said the town and city have compromised. The municipalities originally requested a three-year pause in sales tax collection. Koos mentioned a late February meeting at which mayors and the county board chair jointly agreed on a two-year pause. He said the county later reneged on the agreed period.
He said another meeting at the end of June that included the mayors, county board chair, city managers, and the county administrator resulted in the proposal that eventually became public: a minimum 12-month pause in sales tax collection while negotiations on the agreement continued. Koos said the state’s attorney drafted that proposal, and then the county executive committee did not consider it.
Johnston’s take on the course of the negotiations was different. She said there was no agreed-on pause and there could not be because the county leadership does not have the power to enter into an agreement without full board cooperation.
“All that was agreed to was that the proposed amendments would be brought before the County Board for consideration — and that occurred,” said Johnston.
The full board did not vote on the proposal for a pause.
“Your lack of action in addressing Amendment #1 generates significant concern among the Normal Town Council,” wrote Koos.
Johnston said she only promised to take the potential agreement to the board, and bringing it to the Executive Committee fulfills that commitment.
It is standard for community leaders who have reached a draft proposal to advocate for it to their home board. Johnston did not do that.
“During all of the negotiations, I expressed discomfort in rushing any kind of proposed cutting or pausing, particularly as we have been working very hard the last year to shift our responsiveness for the mental health, particularly the Community Mental Health arm of it. As we were moving forward, we were looking at, given the money that was there, that we could be more aspirational with it, that we could be more engaged in the community and providing services, especially at a time as we're starting to see kind of a hammering of funding initiatives, like from the state and from federal levels,” said Johnston.
She said unknown costs related to a replacement record management system used by all parties also shaped her response since a study on the need for a new system came out after the sides reached a tentative proposal.
Johnston also said she does not “dictate” to her board and “their will was not to take the item up.”
Johnston said the town changed the game in March when the county learned the intent was not to pause the sharing of revenue but instead to change a 20-year commitment to an 18-year commitment. She said the town and city upped the ante in June with a (then) new demand for an audit.
In the WGLT interview, Johnston said the town’s terminology of a sales tax “pause” is inaccurate. She called it a cut because the money during the pause would not eventually flow to the county for use under the agreement.
Johnston suggested in the letter that if the town thinks the county is getting too much money, it could reduce its tax levy so the county (and town) would get less.
“Attempts to influence this matter through public pressure, instead of negotiating directly with the county, do not align with the principles of good faith negotiations,” said Johnston.
The audit
Johnston said the county approval of the audit was a showing of good faith despite concerns that it does not represent an effective use of public funds.
“As it appears intended to remedy the Town’s own ignorance relating to the expenditures of the Pledged Revenues despite the town having representatives on both the BHCC [Behavioral Health Coordinating Council] and FAC [Fund Advisory Council],” wrote Johnston.
In the WGLT interview, Koos said the county rejected the town’s first suggestion for the scope of the audit. The county has formed a committee to study what the audit should look like — two county board people, a representative from the town and city councils, and a disinterested party.
“We were told that the mayors of Bloomington and Normal could not choose who represents our communities,” said Koos. “I know Mayor Brady had someone in mind. I had someone in mind, and I was told it’s not my choice.”
He said that also indicated a lack of a good faith bargaining process.
Johnston said it is her prerogative to name members of a special work group under county regulations, and she did so. When WGLT asked whether it would have shown collegiality to have the mayors pick their own municipal representatives, Johnston replied:
“I'm not sure we were in a position of collegiality at that point, and my goal was to bring people in that I thought would be beneficial and would be able to remain focused on the task at hand, which is the audit specifically,” said Johnston.
Language precision
At least one of the disagreements between the two letters appeared cosmetic rather than substantive. It is, perhaps, another indication of how contentious the issues have become.
Koos’ letter cited three agreed-on purposes for the sales tax money “(i) debt service relating to the jail expansion and renovation (ii) criminal justice services related to the expanded detention facility operations for behavioral health services, and (iii) certain community behavioral health initiatives, services, and programs.”
Johnston’s reply corrected Koos, citing a fourth purpose, “provisions for an electronic integrated case management system to be used by the town and city public safety agencies.”
The text of both letters follows the wording of the intergovernmental agreement up to item three, which the town appeared to give in shortened form. Johnston gave the phrase from the agreement in its entirety. The actual agreement does contain three listed purposes as the town asserted. Johnston’s fourth purpose is a part of purpose three. The Koos letter referring to "services" and "programs" could be interpreted to include Johnston’s text.
What now?
Koos asserted he remains hopeful the town can rely on the county to immediately comply with the IGA, to pause the sharing of sales taxes and eliminate any delays for a thorough and expeditious audit. Johnston wrote at this time the county has no intention of reintroducing an amendment to suspend the remittance of “Pledged Revenues.”
“Ongoing uncertainties surrounding the RMS (Record Management System) replacement project also create a likelihood of increased financial needs. Demands to materially alter the IGA prior to gaining this information are unreasonable,” wrote Johnston.
In the interview, Koos said the town is not ready to talk about what happens next. He said he wants to see what the audit committee comes up with for the scope of work, though he has concerns about that as well.
Johnston said she believes a mediator would help the parties reduce tensions.
“When we're getting pretty intense language, letters swapping back and forth at this point, I feel like a mediator is probably our best bet to heal things and move forward,” said Johnston.
She said one of the mayors told her he did not think that was necessary.
“Which really kind of puts a damper on moving forward to have conversations. I do think it would be beneficial,” said Johnston.
The special task group on the audit will meet later this month to generate an assessment that will be sent out to council and county board members. Answers can be anonymous. Johnston said that will help the group create the request for proposal for the audit.
