Vigo County will construct a new jail.
The Vigo County Council on Tuesday took action to pledge income taxes for construction and bond payments for a new jail; approved funding to purchase 22.21 acres for the new jail; and approved a lease between the county and a building corporation.
All three actions passed with an identical vote of 5-2, each with Council members David Thompson, Vicki Weger, Mike Morris, Jim Mann and Aaron Loudermilk voting in favor and Council members Lisa Spence-Bunnett and Chris Switzer opposing.
“This will get us out of all the lawsuits that we are in because of an unconstitutional jail,” Brad Anderson, president of the Vigo County Board of Commissioners, said after the council vote. Since October 2016, the county has been involved in a federal class-action lawsuit for jail overcrowding.
Anderson said the county has been in discussions for a new jail since October 2015 when a study recommended a new jail. “I appreciate the County Council finally letting this thing go [to construction] and get done what needs to be done for the county,” he said.
“We can now get the property purchased and start building a roadway into the property. We think can get the bonds purchased in late October,” then break ground for a new jail in November, Anderson said.
Prior to voting, Spence-Bunnett urged the Council to table all actions involving the jail to get a better financial analysis of why other jails with similar capacities are less expensive.
She suggested the county put a budget limit of between $40 million to $50 million on the jail project, instead of the current estimated $63.5 million, saying two economists - from Indiana State University and Rose-Hulman Institute of Technology - stated that would be maximum Vigo County taxpayers could support for a jail, while at the same time considering new high schools.
A lease agreement between the county and the Vigo County Building Corp. which will own the jail until it is paid off, includes an annual lease payment of $7 million, issuing bonds not to exceed $80 million.
Spence-Bunnett advocated for reducing the maximum annual lease payment to $3.9 million, down from the maximum of $7 million, citing that at $7 million, a $75 million to $80 million jail project could be done. Approving a maximum of $7 million would remove the County Council’s ability to manage costs of the project, she said.
The councilwoman suggested a timeline that shows a redesigned jail project could be finalized in January or February, 2020. A redesign could reduce the jail’s size by 20,000 square feet or more. Spence-Bunnett said the county could work with a federal judge stating the county is working to reduce financial impacts to county residents.
David P. Friedrich, attorney for the county in the federal class action lawsuit, said the county is making monthly status updates to Chief District Judge Jane Magnus-Stinson.
Friedrich said the judge has already stated concern over correctional officer staffing levels at the current jail.
“Over the last three to four months, we have gotten close to the court’s requirements for full-time and part-time correctional officers, but unfortunately with this particular position there is a large amount of turnover,” he said.
The county had been near 70 officers in July, but dropped to 60 or 62 at the end of August, he said.
“My concern from being in litigation with this matter since 2017, is a delay of this matter to the first of the year would not be acceptable to Judge Magnus-Stinson,” Friedrich said. “I think she has been very clear in her marginal notes when these (status) reports are filed and wants us to keep moving forward. The fact this litigation is reaching three years will not bode well for her if we go into 2020 and still don’t have funding for this particular jail established,” he said, adding any additional setback “will not be looked upon favorably by the court.”
Financing may lower annual costs
Tim Berry, director of government consulting for Crowe LLP, a public accounting, consulting, and technology firm, told the County Council that using a cash balance of $4 million already collected from two special income taxes for the jail, as well as using $10 million expected to be generated from income taxes during a two-year construction of a new jail, will allow the county to reduce its annual debt service and annual lease payment.
By applying that $14 million, the county would see an annual bond payment of about $5.5 million, Berry said, however that is a conservative estimate as it based on a bond interest rate of 5 percent, adding the bond market interest rate is currently much lower at about 2 percent and the final annual lease payment could be lower.
Berry said the jail project is based on a 19-year bond issue, with the final payment made in year 20.
Part of the county’s 0.75 percent increase in the local income tax includes two components that would sunset after the new jail is paid off. Those components are a 0.25 percent in a special purpose tax and a 0.20 rate for new correctional and rehabilitative facilities tax.
Berry said the 0.25 percent would sunset once the jail bonds are paid. The 0.20 rate will continue for 22 years, unless the County Council takes action to eliminate that tax sooner. That rate is to be used for maintenance of the jail.
In its approval of the purchase of land, a mix up in publication on the amount left a $450 shortfall.
While County Attorney Michael Wright submitted a request for $510,830, the number published for the council meeting was $510,380. Council Administrator Kylissa Miller suggested the $450 could come from the county’s Economic Development Income Tax.
“The $450 can be funded,” Wright said.
The funding, with the small shortfall, was approved to purchase 22.21 acres from Culp Ventures LLC for the new county jail, near the city of Terre Haute’s wastewater treatment plant.