Officials of three counties to meet to consider regional jail costs, put at $78.4 million by financial analysts
By James P. Gannon
Officials of Rappahannock, Warren and Shenandoah counties will meet this week to hear a report by financial analysts that pegs the cost of a new, 460-bed regional jail at $78.4 million, to be shared by the three counties in proportion to their usage of the facility.
The three-county meeting will be held Wednesday in Front Royal at 7 p.m. in the Warren County government center. The three counties will hear a presentation on the costs of the proposed regional jail by consultants from Davenport & Co., a Richmond-based stock brokerage, which has built a “financial model” outlining the costs, revenues and financing of the project.
The counties have not yet committed to the project but have been studying it for months. Page County, which originally was part of the coalition studying the regional jail concept, has opted out of the process, leaving the other three to decide if the project is feasible for them.
Rappahannock County is considering joining the regional jail project because the county operates Virginia’s oldest jail, whose operating costs per prisoner are considered excessively high. Virginia’s Department of Corrections officials have put pressure on counties with old, high-cost jails to join together in regional facilities that can be operated more efficiently.
The Davenport & Co. report states that of the $78.4 million total estimated cost of building and equipping the facility, the Commonwealth of Virginia would reimburse the counties $33.7 million. The counties would bear a shared cost of $44.7 million.
The project would be funded with two different debt issues by the three counties: $35.3 million of short-term notes–a temporary debt of the three counties–that would be paid off when the state reimburses the county for its share, and $55.7 million in long-term Jail Revenue Bonds.
As the smallest of the three counties, Rappahannock would bear 6.9% of the costs of the project, while larger Shenandoah and Warren counties would carry 32.7% and 60.4%, respectively. The project thus has much heavier fiscal impact on those two counties than it does on Rappahhock.
Operation of Rappahannock County’s pre-Civil War jail costs the taxpayers here more than $1 million annually in salaries, inmate care, and other operating expenses. Elimination of the local jail and its employees would offset much of the cost of the regional jail to the county–but whether the old jail would be closed or used for other purposes is one of many decisions that would have to be made if the county joins the regional jail project.
The Davenport financial model of the impact to Rappahannock County forecasts relatively modest net costs (after projected savings from old jail costs) for the first few years of the regional jail, projected to start in 2012. The forecast says that net costs would be just $6,324 in 2013, rising gradually to 73,336 in 2016 and $166,785 in 2020.
All of the projected costs in the financial model are based on a complex series of assumptions about jail occupancy, growth of expenses, financing costs and other variables, and changes in any of these could affect the total costs over time. Additionally, the study does not assume that the regional jail would take in inmates from other jurisdictions who would pay to house their prisoners there, which would be another way to bring in revenue to offset operating costs.
At this point, no site for the proposed regional jail has been selected, though the study is assuming, for planning purposes, a location in Warren County. Besides the financial challenges involved for the counties, the site selection could prove politically difficult and disagreement could yet kill the project.
-- James P. Gannon
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