Both Twin City mayors think the intergovernmental agreement at the center of a two-year dispute between them and McLean County needs to be revisited.
The nearly two-year-old dispute is over sales tax money sent by the town and city to the county, which is dedicated to behavioral health programs, jail expansion bond debt and public safety information systems.
Speaking on WGLT's Sound Ideas, Bloomington Mayor Dan Brady said the agreement that created the Mental Health Public Safety Fund [MHPSF] should be remade.
The fund was established in 2016 through a 20-year intergovernmental agreement with the Town of Normal, the City of Bloomington and McLean County. Under the agreement, Bloomington and Normal share a portion of their sales tax with the county for the fund.
Much of the dispute has centered around the fund's $20 million balance.
Brady said there have been changes to sales tax law in the decade since the agreement went into effect.
“Look at the money that has accrued in interest. Look at the money that has been there in e-commerce that wasn’t figured and wasn’t a part of the equation when it was first considered. Bring it up to speed and then see where we’re at,” he said.
In late September, WGLT obtained a letter from an outside law firm hired by the city, which accused the county of violating the intergovernmental agreement.
“The County’s wrongful conduct has deprived — and continues to deprive — the City and the Town of the basic benefit of their bargain,” said Hart Passman, an attorney with Elrod Friedman LLP, in the Sept. 1 letter.
The letter called on the county to respond by mid-October. Normal City Manager Pam Reece confirmed Wednesday that talks are happening between attorneys. Asked about the fund at the county's Oct. 15 meeting, McLean County Board Chair Elizabeth Johnston declined to comment.
Koos expressed desire for all three parties to "work this out," but shared Brady's sentiment for revisiting the language of the agreement.
"No one expected the county to get the amount of money they're getting out of the shared sales tax agreement," Koos said. "Because there wasn't internet sales tax at that time, so the dollar amounts coming into it are larger than anybody projected 10 years ago."
Brady said negotiations are ongoing.
“It is my hope that negotiations and discussions continue to move us forward in a way that we don’t have litigation,” he said. “But on the other hand, we have to protect our taxpayers in the City of Bloomington.”
Audit did not resolve the dispute
The underlying issue is the city and town believe the county is getting too much sales tax money — more than the city and town thought they would ever pay. The county has maintained it is spending the revenue according to the decade old intergovernmental agreement. The city and town disagree with the county on the amount and nature of some of the spending.
The disagreement also centers on what happens to interest accrued by the fund over the past decade. The county contends it is legally bound to keep that money within county government.
Brady said he would like to sit down with Koos and Johnston to hash out the details and settle the dispute.
Koos said the three parties had not sat down to discuss the issue in "probably six, seven months."
In March, all three parties agreed on a memorandum of understanding for an audit of expenditures from the Mental Health and Public Safety Fund and approved a good-faith gesture to temporarily suspend transfers of new shared revenue to county control. That memorandum came eight months after the initial agreement to do an audit.
The audit determined the $20 million fund balance is not a surplus, but rather money that is earmarked for use down the line.
Brady said it left him with more questions than answers.
“I think it’s always open to interpretation,” he said. “When the city or the town is putting in a larger amount of tax revenue, maybe what we expect is different from the county.”
WGLT's Eric Stock and Jim Stahly contributed reporting.
