MORRIS – More than a decade of dispute could come to a close next week as taxing bodies in Grundy County are scheduled to vote on a potential settlement with Midwest Generation.
“The monkey would be off our back, so to speak,” Grundy County Board Chairman Ron Severson said Friday.
That “monkey” was a $25 million liability for Grundy County, Morris school districts 101 and 54, the Morris Fire Protection and Ambulance District and several other local taxing bodies involved in Midwest Generation litigation.
In 2000, the company disputed the equalized assessed property value of the Collins Power Station – formerly located on a 2,000 acre plot in rural Morris – claiming the assessed value of the property was too high. The taxing bodies that received funds, based on that EAV, appealed Midwest Generation’s claim to avoid repaying nearly $25 million in tax dollars to the company.
“The school districts combined were facing close to a $19 million payback,” District 101 Superintendent Pat Halloran said. “School districts typically don’t have $19 million on hand, so a settlement has always been the desire of the taxing bodies.”
Morris school districts 54 and 101 are the two largest players in the settlement, with Grundy County a close third. Goose Lake Township, Morris fire department, Joliet Junior College and others account for the rest of taxing bodies involved.
While few details have been released, the tentative settlement stipulates that both parties – the taxing bodies and Midwest Generation – will drop any previous charges and walk away from the lawsuit. With the settlement, the taxing bodies would be free from paying back millions.
“Essentially, both parties would just walk away,” Severson said. “We wouldn’t receive any money, but we wouldn’t have to pay anything back either.”
Midwest Generation filed for bankruptcy in December 2012, which played a role in speeding up the settlement discussions, Halloran said.
The settlement could also mean more money for Morris school districts when the 2,000 acres of Grundy County land owned by Midwest Generation is redeveloped by new companies.
The Collins Power Plant, formerly on the plot, closed in 2005. The land has been used for agricultural purposes since, Severson said.
“The plan is to get some industry back in that area and get some revenue for the county and the schools,” Severson said.
Before closing, Collins accounted for 56 percent of District 54’s tax base and 35 percent of District 101’s base.
“In the course of two years, we lost over half of our local income – that’s huge,” District 54 Superindent Teri Shaw said. “It was absolutely devastating to the school district.”
The land lay undeveloped for the last nine years as litigation continued, and school districts were unable to recoup the the lost EAV as no new businesses could build on the land.
In previous settlement discussions, the county agreed to include the Collins plant property in an Economic Development Project Area. Now, Severson said he hopes the EDPA will entice new companies to build on the largely undeveloped land.
“District 54 has a big hope to get some industry back in that property,” Shaw said.
If the settlement goes forward, the taxing bodies will see immediate savings in legal fees. The two school districts have paid the bulk of those fees, which have added up over the last 13 years.
“That’s good for the taxpayers to no longer have those legal fees,” Halloran said.
He could not estimate the amount spent on legal fees through the years on this dispute.
District 101 is set to be the first tax body to vote on the settlement Monday with Grundy County to follow Tuesday.
“A lot of people have worked hard on this for a long time,” Halloran said.