By Traci Chapman
Published on March 6, 2008

Voters will decide May 13 if a new Canadian County Jail is worth .35 of a cent increase in sales taxes after county officials finalized the financing plan Monday.

If approved, the county portion of the sales tax, which is currently .35 of a cent, would increase by .35 of a cent for 15 years — the life of the loan on the proposed $24.8 million project — and then drop to a permanent .25 of a cent increase.

That boost means an additional 35 cents in tax for every $100 worth of goods or services purchased in the county through 2023. After the loan on the facility is paid off, the tax would then be 25 cents for every $100 in purchases in the county.

If voters give the increase a green light, the tax rate would increase beginning Oct. 1. Construction on the jail would begin in 2009, with an anticipated opening date of January 2011.

Commissioners approved the proposed sales tax rate Monday after hearing options ranging from the sale of general obligation bonds to .25, .30 and .35 of a cent sales tax increases. After reviewing all of the options, commissioners opted for the higher sales tax option for a “longer-term benefit,” District 1 Commissioner Phil Carson said.

“Under this option, we will save $5 million in interest and can pay the loan off much faster,” he said.

District 2 Commissioner Don Young, who has said in recent months he believes the project is being “rushed,” restated that position Monday but ultimately voted with Carson and District 3 Commissioner Grant Hedrick to take the proposed increase to the May 13 vote. He said the higher (.35 of a cent) option was the “most responsible” for the county because the county could potentially save upwards of $5 million in interest on the life of the loan.

Financial adviser Rick Smith said interest would be reduced under the .35 of a cent option because the loan term is less — 15 years versus 20 years. Smith and bond counsel Allan Brooks also said the county would have the option to prepay the loan in less than 15 years. Depending on the bank financing that loan, the county could possibly pay the loan off in as little as eight years, Brooks said.

Commissioners shot down two lesser options and said they “would not even consider” using general obligation bonds to fund the project.

“It’s not right to put this on the backs of county homeowners only,” Young said.
The first, a .25 of a cent permanent increase, could not cover the new jail’s increased operating expenses, Smith said. The second, a .30 increase for 20 years, falling back to .25 of a cent in the 21st year, posed a similar problem, he said.

“The .30 of a cent option can pay for operations and maintenance at the new jail until 2018, assuming a 5.50-percent annual increase in expenses, which we think is conservative,” Smith said. “However, starting in 2018, that amount will not cover operations and expenses for the facility.

“Under the .35 of a cent scenario, the sales tax will more than pay for not only the construction of the facility, but the operations and maintenance as well,” he said.

Costs for operation and maintenance of the facility are expected to top $2.8 million per year. Operational expenses include personnel costs, maintenance and utilities.

Sheriff Lewis Hawkins estimated it costs about $700,000 annually to operate the current jail. That figure does not include utility costs, which are paid separately by county commissioners.

“Personnel is our biggest single cost by far,” Hawkins said. “With the new jail, the personnel we need will dramatically increase, which really pushes up our operating cost.”

Those costs will increase because the new 264-bed state-of-the-art facility will replace a 72-bed jail currently strained by overcrowding and plagued with maintenance issues, Hawkins said.

He said if the new jail is not built, the county is faced with major overhauls to the heating, air conditioning and plumbing systems at the jail that he said would cost more than $250,000. Hawkins said while that is a “big issue,” the largest problem associated with the current facility is its capacity.

“We have a 72-bed facility, and I’m routinely housing close to 100 prisoners a day,” he said. “That is bad enough, but you have to factor in that I have over 11,000 warrants I can’t serve right now because I just don’t have the space.”

Hawkins said almost half of those warrants — for individuals who haven’t paid court costs and fees, bogus check warrants, civil warrants and old traffic tickets — are “servable,” and if he had room in the jail, he could clear the warrants in a short period of time. Hawkins said none of those warrants are for violent crimes.

“It’s a full-time nightmare right now,” he said. “I have to use the wisdom of Solomon to decide who to incarcerate and who we can’t run down right now.”

Hawkins said another problem faced by county officials with the current jail is the “real possibility” of fines and other costs because the “jail just isn’t adequate.” He said the state jail inspector can fine the county, outsource some of the prisoners or even shut the jail down.

“I’ve seen him do that,” he said. “If we don’t keep making meaningful progress toward improving our situation, it could get very serious for the county.”

While the project architect, Bill Knowles, Smith and Brooks will not get paid if the measure is not approved by voters, that does not mean the county will not have to pay for the election.

County election board secretary Dorothy Riley said it will cost nearly $28,000 to hold the election. That total includes hiring officials and part-time help, polling place expenses, absentee boards and ballots. The cost of ballots alone would be more than $5,800.

“Ballots are going up all of the time,” she said. “That price is good now, but next week it could be a lot more. We just don’t know.”

Brooks and El Reno attorney Andy Bass will now turn their efforts toward drafting a resolution calling for the May 13 election. Commissioners must approve and submit the resolution to the county election board by March 13. Brooks and Bass will present a proposed resolution to commissioners Monday.

Commissioners must approve the resolution Monday or the project will be pushed off, most likely until next year, officials said. The county cannot call an election that will interfere with the upcoming primaries and elections already scheduled.
“I’m making a motion so we can give these guys time to work on it to present it to the people,” Carson said. “That gives it a fighting chance.”