Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, April 2, 1994 TAG: 9404040173
SECTION: CURRENT PAGE: NRV-6 EDITION: NEW RIVER VALLEY
SOURCE: By PAUL DELLINGER STAFF WRITER
DATELINE: RADFORD LENGTH: Medium
The state Treasury Board met two weeks ago and came up with new guidelines on reimbursing regions that construct such jails.
Localities must now borrow 100 percent of the project cost, said Charles C. "Chip" Bassett, vice president of Craigie Inc., a Richmond investment banking firm being consulted by the regional jail committee. And the 50 percent state reimbursement would be over a period of years instead of all at once.
Bassett spoke to representatives of the city of Radford and counties of Pulaski, Floyd, Giles, Carroll and Grayson at a committee meeting Friday.
The localities have spent more than a year gearing up to meet state requirements for the 50 percent state funding, which may not be offered again. No sooner did they complete the planning requirements to get in line for it last year than the General Assembly passed new requirements for a more detailed planning study.
The six participating localities got that one done in time for the state deadline. Now the state has thrown something else into the mix.
The state, which pays a large part of jail costs already, wanted to encourage regional jails by offering half of the funding, Bassett said. Shared jails cost less because administrative and housing costs are spread over a wider area.
"As soon as they did that, a whole bunch of regional jail projects came into being," he said, which would have required the state to pay about $5 million on the various projects by the year 2000. "They decided they couldn't quite handle that."
The state will still pay half the construction costs, but the reimbursements will be spread out under the new procedures.
That means the localities must come up with all the money initially. The total cost of this regional jail is estimated at more than $32 million.
Bassett said the localities can hardly be expected to come up with that much cash. General obligation bonds are the lowest-cost method, he said, but those might not be approved in the necessary referendum. Lease financing is another possibility, but a cumbersome one, he said.
He recommended revenue bonds, which can be repaid by income from the operation of the jail.
Assistant Radford City Manager Bob Lloyd said he doubted that any of the six localities studying this project "would issue a nickel's worth of bonds" until the state commitment is made.
"They're famous for changing their minds," noted Floyd County Administrator Randy Arno.
"We all recognize that what we are doing is solving a state problem at local expense" in providing places for state prisoners when state facilities run short of space, Lloyd said. For that reason, he said, the localities should expect more help from the state.
"What happens if we don't do this? We start building local jails. We're much worse off," Grayson County Administrator Don Young said.
The state will reimburse only 25 percent of the construction costs for local jails, in the same manner as 50 percent for regional jails.
Bassett said it has been suggested that state participation on local jails may drop even further, or be eliminated altogether, but localities still will have to meet new standards being added for local jails.
"The operational costs for them on local jails is extremely high," he said.
Several jail committee members said they want more definite figures to take back to their governing bodies on what each locality will have to pay to make the project a reality. The 360-bed jail, if built, would open in 1998 on a site in Carroll County.
"What we want to do is look at some good hard numbers. Then we'll tell you if we're in our out," Arno said.
Bassett agreed to try to supply those numbers to the localities next week.
by CNB