The dispute between the City of Bloomington, Town of Normal, and McLean County over shared sales tax money for mental health and public safety has escalated again.
In late August, Normal Mayor Chris Koos and County Board Chair Elizabeth Johnston exchanged tart letters on the subject.
Now, according to documents WGLT obtained under the Freedom of Information Act, the town and city have formally accused the county of defaulting on the decade-old intergovernmental agreement on use of the shared revenue.
PDF: Read the Notice of Default letter
“Given the historical lack of transparency and critical concerns, which are only exacerbated by recent reports and information now coming to light, the City and Town have exhausted efforts to address these concerns. The Town and City have a strong interest in ensuring the Pledged Revenue is used effectively and appropriately as intended by the IGA and therefore must insist the County cure these defaults without further delay,” wrote Bloomington City Managers Jeff Jurgens and Normal City Manager Pam Reece on Sept. 11 in the notice of default.
The town and city said if the county doesn’t cure the issues, the other entities reserve the right to pursue all remedies. According to the IGA, those remedies include “at law or in equity.”
The city and town said in the notice they are willing to talk with the county about the “necessary steps to restore the collaborative partnership envisioned by the IGA.” The grounds of the alleged default are several.
WGLT reached out to McLean County officials for comment on Friday and is awaiting a response.
Failure to maintain a separate fund
The city and town said the agreement calls for the county to maintain a separate fund but allege it has not done so. The city and town claim the county’s 2023 audited financial reports showed the county has a Mental Health and Public Safety Fund [MHPSF] “account within its general fund” instead.
The dispute over what counts as “separate” is key to another element of the alleged default, what has happened to interest income generated by the more than $20 million in unspent revenue the county has accumulated over the last decade.
Interest income
County Treasurer Rebecca McNeil has told WGLT that since the agreement does not mention interest the county cannot put money generated from investing the sales tax money into the Mental Health and Safety Fund.
“The County's current position — that it can commingle these funds within its General Fund, thereby preventing the MHPSF from earning and retaining its own interest in accordance with its duties under the Illinois Public Funds Investment Act — is untenable and contrary to the original intent of the agreement,” said the town and city notice of default.
The city and town estimated in the notice that the interest generated by the accumulation of unspent money is nearly $1 million per year.
County Treasurer Rebecca McNeil told WGLT her office is “unable to accurately and specifically calculate how much interest the Pledged Revenues held in the MHPSF may have generated.”
“The County consolidates the cash of 59 separate funds. The balance by fund changes daily. Interest is generated on a collective basis from various investment types. For this reason, it is not possible to accurately attribute the portion of collectively generated interest specifically to the MHPSF. Interest revenue to the General Fund on the consolidated treasury balance has ranged from $40K in 2020/2021 to $3.7M in 2024 largely due to interest rates,” said McNeil.
Jail guards
Another point of contention in the notice of default is salary used to pay the salary and benefits of 10 probation officers and two intake specialists at the McLean County jail.
“These are general staff positions, not dedicated to providing the 'behavioral health services' required by Section 3-2(b) of the IGA. County documents and statements confirm these positions are not for behavioral-health operations, making the expenditures unauthorized,” said the city and town.
During the course of an interview with WGLT about a number of issues that took place before the notice of default was filed, McLean County Sheriff Matt Lane said about half the jail population is in need of some sort of mental health treatment. Lane said the current census of the jail was about 235 people. He has 60 some correctional officers.
“That [the 10-12 people at issue] is a fraction of what is actually being spent on mental health patients,” said Lane.
He made a proportional argument comparing half the jail population needing treatment to half his staff or 30-plus people. He contended it is difficult to apportion budget line items in the way the town and city are now demanding.
“Those are not specific people. Those are positions. We rotate on responsibilities and areas in the jail. We don’t have specific mental health corrections officers. That doesn’t exist,” said Lane. “But we spend a great deal of time collectively with the mental health issues in the jail."
The intergovernmental agreement authorizes use of the sales tax money on behavioral health programs and services.
Lane said a lot of mental health activity goes on in the jail at all times, from escorting treatment teams at various hours for extended periods to lengthy distributions of medication to hundreds of inmates.
“I am confident we are using every dollar that we get, for the benefit of mental health,” said Lane.
Technology spending
The town and city also appear to be making an argument of proportionality in contrast to Lane’s framing of the jail guard issue. The city and town contend $12 million in planned technology system spending should not come from sales tax money. The county is moving ahead with a new record management system for law enforcement. Other stakeholders are expected to use the system, and some will need their own software.
“The planned expenditures for systems primarily serving the County's internal operations (e.g., for the jail, courts, probation, state's attorney, and public defender) do not meet these criteria. Expenses for any system beyond the shared Caliber RMS violate the agreement,” said the city and town notice to the county.
Mental health funding
One of the big selling points of the pact at the dawn of the agreement was the desire to increase mental health services in the community. The city and town are now alleging the county violated a provision of the agreement concerning that funding.
“Section 3-3 of the IGA requires the County to 'seek the advice' of the McLean County Behavioral Health Coordinating Council [MCBHCC] during the budgeting process for the Pledged Revenue. The County has failed to adhere to this required consultative process, violating a key oversight provision of the IGA,” said the notice.
It’s not clear from the context whether that alleged failure to consult the coordinating council happened before or because of former County Board Chair Catherine Metsker’s decision to revamp the allocation process last year and removing the coordinating council from funding decisions in April 2024. More recently, the McLean County Board voted a week ago to honor funding recommendations from the body Metsker formed to replace the coordinating council — the Mental Health and Public Safety Fund Advisory Council.
Jail debt
The notice by the city and town does not attack county use of shared sales tax money to pay debt from an expansion and renovation of the jail.
The notice opens a 45-day window for the county to respond.
