County hears new financing option for jail
City Councilman Dan Marvin, a good-with-numbers guy, has come up with another option for paying for Lancaster County’s new $65 million jail.
Under the plan the city would no longer pay the county $1.4 million a year to house its inmates. As well as picking up that tab, the county would assume the risk for higher operating costs at a larger jail.
In exchange the city would lend the county its authority to levy up to 5 cents per $100 valuation.
The taxing authority, known as a Joint Public Agency Agreement, virtually takes the jail off the city’s budgeting plate.
That may be more palatable to the City Council, which has so far been reticent on the county’s proposed jail financing option.
But it’s not such a bad deal for the county either.
The new option would create a separate line item on taxpayers’ bills for the jail construction. This tax would not be part of the county budget — or need to be included under its tax levy lid.
It also would allow the county more than its legally allotted 10 years to pay off the project.
The carrot for the taxpayers?
Marvin’s option would provide taxpayers with a clear number on their bill for the jail’s cost, as well as allowing them to pay for the jail over 20 years.
More time would lower initial annual bond payments, as well as spread the jail’s cost over more population as the county grows.
The county anticipates adding 2.8 cents per $100 property valuation to build the jail.
But whether Marvin’s option is even available, legally speaking, was still unclear after he and bond experts spoke at Thursday’s county board staff meeting.
“The statute is a little ambiguous. It doesn’t address the questions we’ve been talking about,” said attorney Lauren Wismer, the county’s bond counsel.
After the briefing, the county directed its jail finance committee — made up of city and county officials and bond experts — to further research the option while still working full speed ahead on its prior plan.
After voters rejected a jail bond issue in May, the county board came up with a plan to lease a new jail through the Public Building Commission. In that bond payment plan — which also stretches over 20 years — the “rent” is the variable debt payment.
The city now pays an average $1.4 million per year to house its inmates at the county jail. Under the Public Building Commission option, that money would go toward the jail debt. The county also would raise its taxes, within its levy, to pay off the debt.
Because the Public Building Commission option requires participation by two entities, the city would need to sign a 20-year deal.
Whether the city would agree to do that is a murky unknown.
Marvin said he had concerns about the Public Building Commission deal:
* If operating costs skyrocket, the city could be asked to chip in more each year to cover jail costs.
* If the city jails fewer people, by using house arrest or ankle bracelets, the money it contributes might not reach the expected $1.4 million contribution toward the debt — leaving the county in the lurch.
Marvin said those concerns could be resolved.
“Would you be so excited about using the JPA agreement if the $1.4 million was not going to be transferred onto the county's ledger?,” County Board Chairman Bob Workman asked Marvin.
How does this plan benefit the taxpayer, Workman wanted to know.
Marvin said the JPA plan would eliminate a possibly messy system of debits and credits between the city, county and Public Building Commission.
Board members expressed concern that while they discuss how to pay for the new jail, the cost of building materials is going up.
“I think there may be advantages to this approach, but I want to make sure this is a legally available option,” Commissioner Ray Stevens said.
The county tentatively built a $5 million bond payment into its new budget year for the jail.
After the meeting Workman said he’s open to the newest idea, but needs to know more about the legality.
Switching the $1.4 million tab from the city to the county is not unfair, he said, because about 85 percent of jail inmates are city prisoners, and city residents pay 85 percent of the county budget.
Commissioner Deb Schorr, also speaking after the meeting, said the JPA tax showing up as a separate item on bills was a good thing, though she acknowledged its place outside the levy lid might concern taxpayers.
“We need to be very transparent in how we communicate this to the taxpayer.”
Reach Kendra Waltke at 473-7303 or kwaltke@journalstar.com.
Under the plan the city would no longer pay the county $1.4 million a year to house its inmates. As well as picking up that tab, the county would assume the risk for higher operating costs at a larger jail.
In exchange the city would lend the county its authority to levy up to 5 cents per $100 valuation.
The taxing authority, known as a Joint Public Agency Agreement, virtually takes the jail off the city’s budgeting plate.
That may be more palatable to the City Council, which has so far been reticent on the county’s proposed jail financing option.
But it’s not such a bad deal for the county either.
The new option would create a separate line item on taxpayers’ bills for the jail construction. This tax would not be part of the county budget — or need to be included under its tax levy lid.
It also would allow the county more than its legally allotted 10 years to pay off the project.
The carrot for the taxpayers?
Marvin’s option would provide taxpayers with a clear number on their bill for the jail’s cost, as well as allowing them to pay for the jail over 20 years.
More time would lower initial annual bond payments, as well as spread the jail’s cost over more population as the county grows.
The county anticipates adding 2.8 cents per $100 property valuation to build the jail.
But whether Marvin’s option is even available, legally speaking, was still unclear after he and bond experts spoke at Thursday’s county board staff meeting.
“The statute is a little ambiguous. It doesn’t address the questions we’ve been talking about,” said attorney Lauren Wismer, the county’s bond counsel.
After the briefing, the county directed its jail finance committee — made up of city and county officials and bond experts — to further research the option while still working full speed ahead on its prior plan.
After voters rejected a jail bond issue in May, the county board came up with a plan to lease a new jail through the Public Building Commission. In that bond payment plan — which also stretches over 20 years — the “rent” is the variable debt payment.
The city now pays an average $1.4 million per year to house its inmates at the county jail. Under the Public Building Commission option, that money would go toward the jail debt. The county also would raise its taxes, within its levy, to pay off the debt.
Because the Public Building Commission option requires participation by two entities, the city would need to sign a 20-year deal.
Whether the city would agree to do that is a murky unknown.
Marvin said he had concerns about the Public Building Commission deal:
* If operating costs skyrocket, the city could be asked to chip in more each year to cover jail costs.
* If the city jails fewer people, by using house arrest or ankle bracelets, the money it contributes might not reach the expected $1.4 million contribution toward the debt — leaving the county in the lurch.
Marvin said those concerns could be resolved.
“Would you be so excited about using the JPA agreement if the $1.4 million was not going to be transferred onto the county's ledger?,” County Board Chairman Bob Workman asked Marvin.
How does this plan benefit the taxpayer, Workman wanted to know.
Marvin said the JPA plan would eliminate a possibly messy system of debits and credits between the city, county and Public Building Commission.
Board members expressed concern that while they discuss how to pay for the new jail, the cost of building materials is going up.
“I think there may be advantages to this approach, but I want to make sure this is a legally available option,” Commissioner Ray Stevens said.
The county tentatively built a $5 million bond payment into its new budget year for the jail.
After the meeting Workman said he’s open to the newest idea, but needs to know more about the legality.
Switching the $1.4 million tab from the city to the county is not unfair, he said, because about 85 percent of jail inmates are city prisoners, and city residents pay 85 percent of the county budget.
Commissioner Deb Schorr, also speaking after the meeting, said the JPA tax showing up as a separate item on bills was a good thing, though she acknowledged its place outside the levy lid might concern taxpayers.
“We need to be very transparent in how we communicate this to the taxpayer.”
Reach Kendra Waltke at 473-7303 or kwaltke@journalstar.com.
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