Price Of 54 Acres

On Hal Henard Rd.

Cut To $1.3 Million

ByTOMYANCEY

StaffWriter

Threecommitteesworking to make sure the Greene County Detention Center stays certified were told Wednesday that the price of land for a new county detention center and justice center has been negotiated downward.

The county committees are working to come up with a plan for reducing inmate overcrowding by a Sept. 12 deadline imposed by the Tennessee Correctional Institute, which inspects jails.

Sheriff Steve Burns told the Budget Committee, the Law Enforcement Committee, and the Courthouse/Workhouse Committee that it appears unlikely that the deadline can be met.

However, Burns said he thinks he can make a case to state officials in Nashville that Greene County officials are making "a good faith effort" to move forward, in light of what has been accomplished since last fall.

The committees have met regularly, at least monthly, with architects and jail consultants, and ruled out expanding the existing Detention Center next to the Greene County Courthouse, and ruled out renovating an existing factory or warehouse.

Instead, they are focusing on proposals to construct a new detention center and justice center on a new site.

Focus On Financing

Tuesday's meeting focused on financing, with Rick Dulaney of Morgan Keegan & Co., Nashville, making a presentation.

"If this is not a good faith effort, then nobody has ever made one," Burns said.

The sheriff said he met last Friday, along with County Mayor Alan Broyles and County Attorney Roger Woolsey, with the Hartman family, which owns the 54-acre tract at the intersection of U.S. Highway 11E and Hal Henard Road.

Burns said the Hartman family has reduced the price from $1.5 million to $1.3 million, which works out to $23,655 per acre.

Last week, the committees were told that the land had been appraised by Bailey & Co., of Kingsport, at $1,154,000.

Burns said the appraiser had based that estimate on three "comparable" properties, one at exit 23 and two others on 11E east of Greene Valley Developmental Center.

The sheriff said the appraiser did not factor in the terms the family is willing to offer, or consider the suitability of the site for other uses, compared to sites farther from the center of town.

Burns said the family is willing to allow the county to pay 20 percent down, with 5 percent payable when an option is signed, and the rest at closing. The family is willing to finance the balance for 10 years at 5 percent interest.

Two or three acres that adjoins the Hartman land is owned by another person, but has been offered to the county at whatever the per-acre price turns out to be for the Hartman tract, Burns said. This land needs to be purchased to square up the site, and for access purposes, he said.

The committee was told that it can have core borings done at the site for $14,000, and a first-phase environmental study for another $5,000.

Committee Consensus

The consensus of the nine committee members present at the end of the meeting was to go ahead and authorize the study. However, Budget Director David Lawing said no appropriation of this type can be made until the budget for the current fiscal year has been passed.

County government is currently operating under a "continuing resolution" that allows only ordinary operational expenditures.

The new budget is on the agenda for Monday's county commission meeting. Commissioner Jerry Weems said that if the budget passes, as expected, then a motion from the floor can be made to authorize the study.

Weems, who chaired the three-committee meeting, noted Wednesday that the consensus of the three committees that has emerged so far is that a new detention center and justice center on a new site, probably the Hartman land, is preferable to adding to the current downtown detention center or trying to convert a factory or warehouse.

Weems also said most commissioners believe that it is a good idea to pursue building a new detention center, if it can be done without a tax increase, by using revenues generated from housing larger numbers of federal and state inmates.

"That's the opinion of everybody," he said.

The possibility of being able to build a new detention center without a tax increase is "the key thing," Weems said.

However, Commissioner Alex Edens, took exception to what seemed to be the consensus view, saying it makes no sense to him not to expand the current detention center, which is paid for, using land the county already owns.

Edens said he had talked to "every judge" in the courthouse and said judges are "happy with the facilities," have adequate room, and are happy with increased security measures.

Sheriff Burns said the judges have offices, but their clerks, who have no place to store huge amounts of records, are less happy.

Edens also said this is a bad time to be building a $40 million detention center, noting that the county commission voted not long ago rejected a proposal for a new high school projected to cost $27 million.

Weems said that the high school would have clearly required a property tax increase, while Sheriff Burns thinks that a new detention center with 500 beds or more can generate enough income paying for federal prisoners to cover the cost of the bonds it will require, and in the long run will generate revenues that can be used for other purposes.

"If we could build a new school with no property tax increase, there would be no argument," Weems said.

Commissioner Clark Justis, who is chairman of the commission's Democratic caucus but not a member of the three committees, also said he is opposed to the detention center plan.

Projected Reimbursements

Sheriff Burns said that if the county had enough beds to add 100 additional federal inmates, at the current reimbursement rate of $48 per day, that would generate $1,752,000 per year. Housing 100 additional state inmates at $38.50 would generate $1,277,500, he said, for a total of more than $3 million annually.

Burns said it costs about $150,000 per year to feed 200 inmates. More inmates also would use more water and laundry, he said, but most other costs, especially staffing, would remain fixed, and some efficiencies in staffing might be achieved in a new jail designed to make it possible for fewer guards to watch inmates.

Lawing Not Convinced

County Budget Director David Lawing said he is not convinced that a detention center and justice center can be built entirely with new revenue generated by housing additional numbers of federal and state inmates.

Lawing said the county government will be fortunate if 65 percent of the cost can be covered by that method. But Lawing agreed that, in the long term, a new detention center is in the county's interest, though he also said that the rising cost of jailing repeat misdemeanor offenders, and probation violators, needs to be addressed.

Bond Advisor Speaks

Rick Dulaney, of Morgan Keegan, who has handled nearly all of the county's bonds since 1990, spoke to the committees after being introduced by County Mayor Alan Broyles.

Dulaney gave the commissioners a table showing the cost of issuing bonds for either $40 million or $32 million, over periods of 20 years, 25 years and 30 years.

The highest average annual cost shown was about $3.1 million for servicing the debt on $40 million for 20 years, based on a rate of 4.9 percent.

The total cost of issuing that bond would be $62.8 million, according to the table.

Most of the discussion centered on building a 332-bed jail, four courtrooms and offices for judges, the sheriff and sheriff's department administration, plus two "shell buildings" capable of housing another 110 prisoners each, if completed later at a cost of about $6 million each.

The cost of this was estimated last week by architect Dave Wright to be $34 million last week.

Sheriff Burns described this configuration as "ideal."

Tax Implications

Dulaney was asked about the tax consequences to the county of using revenue from federal inmates to fund the jail.

He said he had had a brief conversation with a bond attorney on this subject, and been told that federal tax law treats the federal government much as it would treat a "private person," when dealing with other governmental units, and thus the federal government "cannot be the beneficiary of tax-exempt bonds."

He said he had been told that a contract between the county and the federal government "could cause problems" by causing the county to have to pay a higher interest rate on detention center bonds.

Dulaney noted that he is not a tax attorney, but said it is his understanding that the county government can receive revenues from housing federal inmates into its general fund, but there cannot be "direct linkage" of that revenue to detention center construction.

He said this would prevent the county from using a contract with the federal government as security for the bonds.

Burns said the next step needs to be moving toward acquiring the needed land for new detention and justice centers.