Monday, August 27, 2012

The elephant in the room no one wants to talk about

Jail was $2 million over budget last year
Anatomy of a sweetheart deal
Waco - It's called economic development, and though you can make it sound awfully complicated, it's not really.

A corporate entity is formed to obtain underwriting of tax-free municipal bonds issued to finance building a public project – in this case, a jail.

These are revenue bonds, and they are issued under the authority of the governing body – in this case, the McLennan County Commissioners Court. No general obligation bond election is required for their approval.

The public project in question is a jail built to be operated by a private corporation – CEC, Inc. - to produce a revenue stream that will pay the debt service on the bond issue.

Why would this be necessary?

The Texas Commission on Jail Standards has stringent requirements as to the amount of space each inmate is given in which to live in three dimensions – both square and cubic footage. They must also be separated by gender by sight and sound, their safety guaranteed by automatic smoke and fire detection equipment. There is a minimum staff to inmate ratio, and it's expensive.

If you don't have enough space that comes up to those standards, you are required to send those inmates to another facility that does comply – at a hefty per diem price. The choice: hire more corrections officers, or build a jail for a private corporation to operate.


But the for-profit jail built to take care of prisoner overflow for other counties, the federal government and other states is nearly empty, and that is even more expensive. Suddenly, the project that would cost taxpayers nothing is very, very expensive.

Taxpayers are still liable to pay for the debt service on the nearly $50 million bond issue.

But CEC, Inc., has a contract to operate the old jail adjacent to the Courthouse. They had a number of federal prisoners, which they boarded there.

What to do?

They moved them to the new Jack Harwell Detention Center and closed their operation at the old jail downtown.

Everyone who is responsible says that no one knew this would all become so expensive.

The problem wouldn't be so expensive if only the Commissioners Court knew what it will take to re-open the downtown jail, which is still going through a renovation program that cost $1.1 million.

In fact, this is such a mystery that most members of the Court thought the project had been mandated by an order of the Texas Commission on Jail Standards.

But it's still shut down, and it's even more mysterious than the reasons for its remodeling.

CEC, Inc., is responsible, and they aren't communicating.

So, how much will it cost to free up more space to cut down on the budget for “outside care?”

There is a “best estimate” from Building Supervisor Sammy Sykora of “between $100,000 and $200,000.”

That's only a $100,000 variable – plus or minus – but which is it?

Here's an audio of the resulting discussion from last week.

Today's budget workshop and tomorrow's Commissioner Court meeting is decision time on what to do.

Raise taxes by 6 percent, or cut spending and find a surplus? Pick one.

The guiding principle: broaden the employment base to expand the tax base through “investment” of tax dollars.

That's how they put it when the Chamber of Commerce is driving the deal.

When a consumer goes through debt counseling mandated by a bankruptcy judge, the smart money says you can't borrow your way out of debt.

Now, there's one for you.

Here's what the Tea Party is saying:

There is a “fluff” factor in the County budget of 16.5 percent. Those are figures that are budgeted, but not spent. On top of that, property appraisals are up 9.5 percent, and the Court wants to go up on the tax rate by 6 percent.

Said Waco Tea Party co-founder Michael Simon in public comments last week, “Your first obligation is to the taxpayers, not to the Chamber of Commerce.”

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