Johnson County joins the fray over UI-Coralville tax deal

Board wants to understand work county does for local governments, UI

Gregg Hennigan
Published: April 2 2014 | 3:30 pm - Updated: 7 April 2014 | 3:06 pm in

Johnson County’s supervisors want to review the services the county provides the University of Iowa and cities in light of the recent revelation of a tax deal between the UI and Coralville.

The supervisors, meeting in a work session Wednesday, said local governments and the UI seem to be looking out for themselves and their own bottom lines, and the county needs to better understand what work it does for them for which it is not fully reimbursed.

“It’s an unfortunate road that every government seems to be going down these days,” Board of Supervisors Chairman Terrence Neuzil said. “Again, Johnson County cannot continue to subsidize services for all of government if other governments are going to hold onto all of the tax base and not share it with us.”

He asked county departments to determine what services they provide area cities and the UI, and the cost, and for more information on payments made of lieu in taxes.

The discussion occurred in part because of a Gazette story last month detailing a payment in lieu of taxes, or PILOT, agreement between the UI and Coralville for a medical clinic in the city-run Iowa River landing district.

The UI does not have to pay property taxes, but it gives Coralville more than $1 million a year in lieu of taxes for the UI Health Care clinic.

The deal is based on a formula that includes not just Coralville’s tax rate but also the county’s and the Iowa City Community School District’s. Coralville, however, keeps the full amount.

If the payment was distributed like a normal property tax, Johnson County would get more than $190,000 this year for its share.

The $1 million payment for the 150,000-square-foot medical clinic is high compared with other PILOT agreements in the United States, The Gazette reported.

The Board of Supervisors’ interest in the issue comes just a few days after the City Council in Iowa City asked for more information on the UI-Coralville PILOT.

The UI’s only similar deal with Iowa City is for fire service – the city received $1.76 million in fiscal 2013 for covering 16.8 million square feet of campus.

Supervisor Janelle Rettig said with Iowa City inquiring about the fairness of the PILOT, Johnson County needs to be at the table asking questions too.

“And then at the end everybody will see how stupid this is and they’ll knock it off,” she said.

The supervisors’ displeasure is not just over the UI-Coralville PILOT. It also stems from frustrations in recent years over the use of tax increment financing by cities, with Iowa City on cost-sharing for the city’s animal shelter and with Iowa City, Coralville and North Liberty over the paratransit bus service called SEATS.

Ambulance service was another one mentioned as the supervisors received an update Wednesday on the UI switching from Johnson County Ambulance Service to another provider for mobile critical care services. Since 1998, the ambulance service has provided staff to assist UI Hospitals and Clinics in transporting critically ill infants from other hospitals to UIHC.

Johnson County recently lost that contract to a lower bidder, said Steve Spenler, director of Johnson County Ambulance Service. He said he wasn't surprised because of what his agency pays its staff but that he was disappointed the 17-year relationship between the two organizations was not a factor and that the county learned of the change only a few days before its contract expired.

Rettig said area legislators were upset, contacted hospital administrators and she spoke yesterday with hospital CEO Ken Kates.

UI spokesman Tom Moore said Kates apologized to Rettig for how the process was handled but did not express regret for bidding out the contract. He also said no state lawmakers contacted UI or hospital officials about the matter.

Moore said the UI would discuss any concerns representatives of Johnson County or Iowa City have with the PILOT agreement directly with those officials.

The supervisors tied the ambulance contract to the PILOT discussion by noting the ambulance service does not receive full payment for its work, with county taxpayers subsidizing it with several hundred thousand dollars every year. County ambulances respond to UI facilities about 300 times a year, Spenler said

“If the university is going to determine our relationships in dollars and cents, we can’t possibly compete,” Rettig said.

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