Monday, November 1, 2010

Ralph Cooper Calls Jim Lewis A Liar On Jail Finance Bonds

Incumbent's characterization of structure of the deal a patent falsehood, oft repeated

“There is a difference between a falsehood and a lie,” said Dr. Ralph Cooper, Democratic candidate for McLennan County Judge.

He was speaking of the official propagation to the media of the untruthful statement that the taxpayers of McLennan County are not obligated to pay the $3.9 million per year debt service on municipal bonds issued to finance a $49 million price tag on building the Jack Harwell Detention Center.

A falsehood is something that is untrue, he explained. A lie is an untruth that is repeated over and over again when a person knows, or has reason to believe, that it is not true.

That is the case of the official misrepresentation of the structure of the deal with CEC to build the detention center, Dr. Cooper explained.

He accused County Judge Jim Lewis of propagating this lie to the editorial staff of the Waco “Tribune-Herald” not once, but “four or five times. He also remarked the misapprehension of the true nature of the bond issue by a subsidiary corporation of McLennan County on the part of KWTX NewsTalk 1230 radio host Shane Warner.

His remarks, published earlier today on his website, are reprinted below with permission.
The Lies Continue
by Ralph Cooper

The article in today’s Waco Trib continues a falsehood about the jail and the bond obligation. It says that CEC, the jail operation contractor, is obligated to pay the bond debt on the new jail County

Judge Jim Lewis pushed through the Commissioners’ Court in 2008.

The bonds were issued by the Public Facility Corporation (PFC), a subsidiary of the COUNTY. The bonds specifically are guaranteed by the COUNTY or they would not be tax-exempt (“muni”) bonds.

The PFC was created to avoid an election to approve the bond obligation. Thus the County bonding capacity could be used to build the new jail without the delay of an election and the risk the voters would disapprove. It also enabled proceeding while Mr. Crunk was still on the Commissioners’ Court; it was highly unlikely that his replacement would have joined Mr. Lewis and Mr. Meadows in taking the County into this risky venture.


There is a trustee under the contract and the bond indenture, a legal contract of sorts between the bondholders and the COUNTY, through the PFC. Money received from McLennan County for our prisoners there ($45.50 per day per prisoner) and money from other counties and the federal and state agencies that may have prisoners there – all of that money goes to the trustee who then sets aside and pays the $3.997 million annual bond debt service.

AFTER the debt service is paid, other expenses of the facility get paid, including the expenses and fee of the trustee, the $2 per prisoner per day to the County, and CEC’s $36.00 per prisoner per day for operation of the jail.


Since the revenue from the current population there is too small, CEC is not receiving its full payment, and a backlog of what they are not receiving is building up. They are therefore operating at a loss.
If there were insufficient money to pay the debt service, the COUNTY is obligated to pay, OR the bondholders have the right to foreclose on the jail, take it over, sell it, etc. The COUNTY bond rating would be reduced, complicating all future financing by the County.

Bondholders may choose to sue the County for failing to pay a debt guaranteed by the County.

Please forgive the emphases in the above, but this is a continuing and repeated misrepresentation that has been foisted on the public (electorate) by Mr. Lewis with the assistance of the local media, and it needs to stop. It also needs to be corrected by the media. NOW.

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