Franklin County sued after Lawrenceburg ended an agreement to share $500,000 in casino wagering tax revenue annually.
(Lawrenceburg, Ind.) – The City of Lawrenceburg was in the wrong when it canceled a casino revenue sharing agreement with Franklin County, a judge has ruled.
The lawsuit was filed by Franklin County Commissioners in 2015, two years after Lawrenceburg told the county it would stop sending the county $500,000 in gaming revenue annually under a 2006 special revenue sharing agreement between the two governments. The agreement was formed by the administration of former mayor Bill Cunningham.
The administration of Cunningham’s successor, former mayor Dennis Carr, made the decision to stop writing a check to Franklin County. The city cited a 30 percent decrease in gaming revenues since the agreement was first signed.
The city was also concerned that Franklin County was using the money for general fund expenses, and not for economic development, although the agreement did not place such restrictions on the money’s use.
Franklin County contended that the agreement, which contained no expiration date, stated that the city would write the $500,000 check each year as long as it receives at least that much in wagering tax revenue from the city’s local development agreement with Hollywood Casino Lawrenceburg. The city still receives millions annually from the riverboat tax.
“The contract simply said so long as they were receiving wagering tax revenue, they would pay Franklin County the $500,000. A mere decrease in that was not adequate,” says Grant Reeves, Franklin County’s attorney.
The lawsuit was originally filed in Franklin County court in 2015, but the city succeeded when the Indiana Court of Appeals agreed that the case should be transferred to an impartial judge. The case was subsequently transferred to Decatur County Superior Court in February 2017.
Last week, Decatur County Judge Matthew Bailey, the special judge assigned to oversee the case, ruled that Lawrenceburg breached the contract. He awarded Franklin County summary judgment.
“The Agreement has a sufficient term of duration. The duration of the Agreement is the period of time that Lawrenceburg continues to receive Wagering Tax revenue in an amount sufficient to make the agreed payment to Franklin County,” Bailey wrote in his order.
“The Agreement is a valid and enforceable contract.”
Bailey also shot down the city’s view that the contract is void because it requires payment of public funds beyond the amount appropriated at the time of the execution of the agreement. He called that argument “without merit.”
Damages could be decided at a November court hearing. Reeves says Franklin County is asking the judge to order Lawrenceburg to pay up the $2.5 million dollars owed since the city made its last payment in 2013. The county also wants the $500,000 payments reinstated going forward.
Lawrenceburg City Attorney Del Weldon says the city does plan to appeal the ruling.
“As you know, all of the events that led up to this case being filed occurred during prior administrations. That said, the City disagrees with the ruling as it is inconsistent with Indiana law, and we are appealing it,” he said.