Wednesday, July 17, 2024

County votes to place jail renovation, expansion on November ballot

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The Hood County Commissioners Court unanimously voted to place a jail bond — which will include facility renovations and an expansion — on the November ballot during a regularly scheduled meeting June 11.

For years, Hood County has entertained the discussion about whether to add to the existing jail or construct a completely new building to combat the population growth.

During a meeting April 25, the court revived the discussion of possibly expanding the current jail by tacking on an additional 209 beds — creating a total of 401 beds in the jail.

The proposal, created by DRG Architects, would include general housing up to 150 inmates, flex cell housing for either males or females up to 28 inmates, and special housing up to 31 inmates.

The 30,606 square foot jail addition would also feature a new laundry facility space, an administrative segregation exercise area, general population exercise area, and multipurpose rooms at a total cost of $24,484,800.

Phase one of the 6,200 square foot sheriff’s office addition would also be included in the master planning budget, with a total cost of $2,480,000.

An additional contingency allowance at 10% of the construction costs would add $2,696,480 onto the total cost — meaning the 209-bed addition would cost a grand total of $32,357,760.

Once the county selected DRG Architects for the project, President Wayne Gondeck also outlined a fee proposal for the county Tuesday, totaling an additional $2,522,000.

The proposal is based on an assumed start date for Phase I services (pre-funding) of July 1, with a November bond election to be called in August.

Upon the passage of a successful bond election, Phase II services (design and construction administration) would commence in January 2025 with design completion set for June/July 2025 and construction commencement in late 2025. Construction completion could be expected in early 2027.

During the meeting June 11, the court started the discussion about accepting the DRG fee proposal and authorizing County Attorney Matt Mills to negotiate a final contract that will be brought back to court for signature.

Precinct 3 Commissioner Jack Wilson said he was concerned since building the 209-bed addition could take as long as 30 months.

“Even though we're adding 209 beds with 53 out-of-county today, the issue is once the new facility is built, then we move all of the current inmates into that one and then start the refurb on there,” Wilson said. “So, basically, we (won’t) see any real increase in bed capacity in about four to five years."

“The renovation portion of the project can be handled in multiple ways,” Gondeck said. “You could do it in phases where you could reduce or eliminate the number of inmates to house out-of-county. If you wanted to do it all at once and move all your inmates in there and vacate everything in the existing jail, then that would require you to continue to house out-of-county. If you want to do it in a portion, it may take longer, but you can keep more of the inmates in the county ... We do have the mindset of flexibility to address that program in multiple ways to come up with better solutions as to how you're going to operate the existing facility.”

Precinct 1 Commissioner Kevin Andrews asked for clarification about how, if the bond fails in November, Phase II of the fee services would not take place. Gondeck confirmed that is correct, but said eventually the county will have to find another solution to handle the growth.

Precinct 2 Commissioner Nannette Samuelson also asked Gondeck if they had enough material currently to go forward with the bond process without spending an additional $280,000 on the pre-funding. He responded that there is nothing keeping the court from calling an election, but told the court he has seen more success through DRG providing adequate information to the public.

"Right now, we have a real quick floor plan that we included for you before and this is a concept drawing. We want to develop that for a better presentation to do some more developments,” Gondeck said. “We want to participate in public meetings to be able to take all that information ... and present that to the public ... so that is where our services are really adding to this going forward."

Precinct 4 Commissioner Dave Eagle said it was premature to accept the fee proposal from DRG before voting on the funding for the jail — whether to announce a bond election or to issue a certificate of obligation.

"That $32 million is what y'all gave us for a 209-bed facility, so we got that number,” Eagle said. “But I've got documentation from a year-and-a-half ago that y'all did a special programming on renovating the old jail at $23 million. It seems to me like this conversation — if we're going to decide to go with a bond — we need to look at the whole package. Instead of piecemealing this out, we need to look at the addition, as well as the move out and the renovation, the cost of that, and now we're going to be talking $60 million, and that absolutely, in my opinion, should be a bond consideration."

Precinct 3 Commissioner Jack Wilson said the last needs analysis for Hood County was created May 24, which recommends constructing a facility of no less than 432 beds.

"Now, if memory serves me correct, 432 was what we looked at a little over a year ago, as a proposed process then,” he said. “We've got to look not only at the 209 that we're looking at now, but you know, the renovation of the 192 that we've got, and we're still below the 432. We've got to look at part of the picture, the fact of what you're proposing now, but we also need to look at the big picture as a total.”

Wilson then made a motion to table the discussion about the final contract until the court voted on whether to go through a bond election or a certificate of obligation. The motion passed unanimously.

The court then went on to the next agenda item, which involved choosing a funding method for the jail addition.

County Financial Advisor Jim Sabonis started out by saying that Hood County is currently in an excellent financial condition. He said the county’s credit rating is double A-plus, and there are only a couple of years left on its outstanding debt.

"We probably can fund this at a 20-year amortization, without impacting our current very low (interest and sinking fund) tax rate at a 2.4 success,” he said. “It would cost slightly under 4% in today's market. Our expectation is that this sale can be done relatively at a very cost-efficient basis."

Sabonis explained that as a county, there are three main ways of funding: vote for general obligation bonds, go through a public notice process, or issue a certificate of obligation. He said in his experience, he’s used both a GO bond and a CO.

Local GO bonds must be approved by two-thirds of the voters, while COs essentially allow local governments to fund public works without voter approval — unless 5% of registered voters sign a petition to create an election.

"Five percent of the people that voted in the last general election could force the item to an actual bond election which would be May,” Sabonis said. “In my entire career, being involved in 2,500 bond programs, I only received two petitions for very controversial projects. At the same time, most of the debt that's issued by entities in the state of Texas are certificates of obligations.”

He encouraged the court to consider two things when making its decision regarding funding: the benefit to the county and the tax rate impact on the citizens.

Eagle reiterated his comment from the previous agenda item regarding the cost estimate provided to the court a year-and-a-half ago about the jail renovations.

"If I remember correctly, it was around $23 million, somewhere in that neighborhood. This was back in January of 2023,” he said. “If you're looking at the $32-and-a-half million that you've looked at that was proposed on the 209 bed new addition, when you add the $23 million to that we got a year-and-a-half ago, and then we add a factor in there to cover just in case, even if it's 10%, or 15%, we should have a pretty good idea of a bond number to get the whole project done. Otherwise, we build a new space and move all the prisoners over there, and then we got to come back to the taxpayers and hit them for another bond (for renovations) ... Looking at the big picture, we (need to) have the funds together to do the whole project. Is that unreasonable?”

“Sure, I haven't modeled it out, but it makes sense to me,” Sabonis said. “I think it's important to understand not just what this year's need is, but over the course of the next couple of years."

Wilson said that in the study last year planning for 432 beds, the number came out to $66 million. He argued that with the renovations and new addition costing about $60 million, it would only be about $6 million more to build a new facility.

Andrews pointed out that the renovation quote included work that will likely not be needed, as the $23 million was “way overinflated.” He said he believes the renovations would cost between $10-$15 million.

“I agree with both Commissioner Eagle and Commissioner Wilson that going to the voters — if that's what we intend to do with the entire package — is better than piecemeal,” Samuelson said. “We need to give them all the information, not come back in four or five years and say, ‘Oh, well, now we need to renovate the existing jail,’ so I think we do need a better estimate for the existing jail renovations so that we can put the total package together and put it in front of the voters. We need to have town halls or sessions at night where people that work can come and listen to what the need is and educate the public on what the need is before we even go out to bond."

Wilson asked Sabonis what his professional opinion is on doing a certificate of obligation or bond package for the jail. Sabonis said he can give financial advice, but that he would defer to Judge Ron Massingill and the commissioners as “you know your community better than I do.”

“On the certificate of obligation, it only requires 5% of the registered voters (to petition for an election); that's 2,500 people,” Samuelson said. “I think anybody can look at some recent elections and realize that there's a high probability of getting 2,500 people that will ask us to do an election. This is a lot of money; I think the voters need to weigh in on it.”

"A bond lets the taxpayers opt in, and a CO forces them to opt out, and that's why you've only seen a couple of elections where that's happened in all your years of experience because it's really almost a done deal,” Eagle said, addressing Sabonis. “That's one of the criticisms currently of the certificates of obligation by local governments is that if they issue them, they're not going to get challenged. In my opinion, let them opt in, and if they go with it, then we're doing the will of the people.”

Wilson added that this fiscal year, the county budgeted $800,000 for out-of-county housing. He said Hood County has already spent over $600,000 of that amount, with a third of the fiscal year remaining.

"We will have to be moving money probably the first quarter in July to cover out-of-county housing bills; that's how serious this issue is,” Wilson said. “We budgeted $800,000, and we're probably going to be about $1.2, maybe even $1.3 by the end of this fiscal year, which ends Sept. 30, so everybody needs to be aware of where we're at and how much money is being expended. We could be making bond payments or certificate of obligations payments.”

Wilson made a motion to authorize County Auditor Stephanie Matlock to pursue funding for a certificate of obligation bond for the 209-bed jail facility and the renovation with a cap of $56 million. With a second from Massingill, the board took a vote, with Samuelson, Andrews and Eagle voting against the motion.

After Wilson’s motion failed, Eagle made a motion to have Matlock and Sabonis formalize a plan for a general obligation bond to include the jail renovations and the expansion not to exceed $50 million. Andrews seconded the motion and it passed unanimously.

Sabonis added he will work with county staff and his counsel to come up with a presentation in the coming weeks regarding different pricing options and the proposed agenda language for the election.