County Commission moves forward with jail financing

Contractor Greer Lashlee of Lashlee-Rich, Inc., presented four options for building and improving the county jail.

“We received 90 bids on building the jail, but the total was more than the county could fund,” said Lashlee, “So we went back through the bids and started value engineering to reduce the cost.”

Value engineering is the process of combing through the bids and making cost reductions by changing manufacturers, materials, and/or equipment, said Lashlee.

The initial plan for the new jail, without any changes, was an estimated cost of $8,539,714. Based on an estimated loan given to the commission, at 2.5 percent over 30 years, this option would cost the county $412,507 in a yearly payment. The second option presented was priced at $7,844,714, with only minor changes of design and manufacturers. This option’s yearly payment was estimated at $379,317.

The first two options were quickly ruled out by the commissioners which left two options to be debated.

Option Three dropped the price tag down drastically to $6,793,559 by a long list of value engineering and reducing the renovations for the existing building. The yearly payment was an estimated $331,902. Option Four was the cheapest, priced at $6,468,559, but would cost the jail 22 beds and leave one addition shelled out, or completely empty. This option would cost the county $312,936 in a yearly payment.

After some debate, the commissioners decided that Option Three would be best long term as there were no beds sacrificed, included the entire new facility as well as brought the existing facility up to code.

The deciding factor was the Wheel and Sports Gambling Taxes. According to the Lewis County Trustee’s Office, the Lewis County Government received $1,083 from the Sports Gaming Tax in January, the first month the money was sent to county governments and is expected to grow. If it continues at its current rate, the tax is set to generate $13,000 in a year. The $30 Wheel Tax that was passed for Debt Services and Capital Projects is projected to bring in approximately $320,000 this fiscal year, according to the figures given out at the meeting. Together, if used for the jail, the projected revenue would be $333,000 which would cover both Option Three and Option Four.

Commissioner Austin Carroll pointed out the reason the commission had passed the Wheel Tax was to fund the new jail. “It’s a now or never kind of project,” Commissioner Carroll said.

“You guys hired us to get you the best numbers and give our advice because we do this every day,” agreed Lashlee, “If you decide you want to build a jail, now’s the time to do it because the cost of materials and interest rates will be exponentially higher [once the economy gets back on its feet].”

Commissioner Doug Jobbitt motioned to select Option Three, contingent on financing, and to bring the resolution to a vote. Commissioner Larry Pigg seconded the motion, and the resolution passed with Commissioners Timmie Hinson and Bill Dyer voting to abstain and Commissioner TJ Hinson voting no.

Next the Commissioners tackled financing for the jail and heard from Stephen Bates with Guardian Adivsors, LLC, and Marty Spears with Tennessee County Loans Services Program.

Stephen Bates presented first, as decided by a coin toss. He offered the county General Obligation Bonds for 7.225 million dollars over 30 years at 2.33 percent interest, which would be an annual payment of approximately $335,000, which is two thousand dollars over the projected revenue.

“I’ve never seen interest rates this low.. Ever,” said Bates. “Those rates will be fixed once the bonds are sold.”

If the county chose Guardian Advisors, LLC, and passed the resolution, the process would be to publish the resolution in the Lewis County Herald and have a 20 day protest period, then the county is allowed to enter into contracts. The interest rates would be due semi-annually and would be fixed for the full thirty years.

Marty Spears then presented before the commission, offering them a 25 year loan of 7 million dollars at fixed interest rate for 7-10 years. This would mean the county would have to renegotiate after 7-10 years, which could mean a higher or lower interest rate, and ultimately became the deciding factor.

After several minutes of debate, Commissioner Carroll motioned for the commission to go with Guardian Advisors, and the motion was seconded by Commissioner Pigg. The Resolution was put to a roll-call vote. Commissioners Timmie Hinson, Jim Grinder, Bill Dyer abstained. TJ Hinson voted no. The resolution passed.