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Revenue to pay for jail greater than expected
Bourbon County Sheriff Bill Martin said Tuesday there is no truth to a rumor he has heard in the community regarding the Bourbon County Law Enforcement Center project running out of money.
Martin met with the Bourbon County Commission during their regular meeting to address the rumor, which he said he heard several months ago. He brought Greg Vahrenberg, a consultant with the Piper Jaffray firm, to the meeting to show data from an analysis of sales tax projections for the jail project.
“It was brought to my attention that some of the public were under the impression that the delay of the jail was due to the fact the jail project was broke, that we ran out of money,” Martin said.
Martin said he “reached out” to Vahrenberg, who did the initial analysis of projected sales tax revenue for the jail project. Martin said he heard the .4 percent retail sales tax voters approved in 2015 to repay the bonds used to construct the jail has caused financial difficulties for the project.
“We’re still at the .4 sales tax,” Martin said. “We’re collecting more in sales tax than what was expected … used as revenue to pay for this jail.”
Vahrenberg said it was originally predicted there would be $1,690,939 in sales tax collected in the county from 2015 to 2017, however, sales tax revenues during those years generated more than projected. He said in 2017, there was $211,743 more in sales tax generated than was projected.
An analysis provided by Vahrenberg showed overall sales and use tax collections in Bourbon County since 2006.
He said prior to 2013, when a severe hail storm struck Bourbon County, the county averaged about $1.6 million in sales tax collected over a six-year period. The aftermath of the hail storm brought about a spike in sales tax revenue. From 2013 to 2015, the county “stayed at the $1.8 to $1.9 million level, generating additional sales tax,” he said.
Law Enforcement Center is open
A news release issued Friday by the Bourbon County Sheriff’s Office said the Southeast Kansas Regional Correctional Center is no longer in operation. All inmates that were housed at the old jail have been transferred to the new Bourbon County Law Enforcement Center located at 293 E. 20th St. Inmates that have been housed or assigned in other counties are in the process of being moved to the new facility in the coming days, the release said.
Any business pertaining to inmates will now be handled at the new facility, the release said.
The release said as of Friday, once all inmates have returned and reassigned to the new facility, it will be running at 85 percent capacity. The daily inmate status report from the BCSO said Friday there are a total of 61 inmates, with 51 inmates at the Bourbon County Law Enforcement Center, eight inmates in the Wilson County Jail and two inmates at Larned State Hospital.
The county collected about $2.6 million in sales and use tax in 2016 and 2017, a growth of 39 percent from 2015, according to the analysis.
Vahrenberg said the .4 percent retail sales tax voters approved to repay the bonds used to construct the jail commenced Oct. 1, 2015. The process included the sale of general obligation bonds and applying for a bond rating. Final interest rate on the bonds was 3.06 percent.
“The bonds are payable from the sales tax collections,” he said. “If we were selling the bonds today, there would be more interest expense.”
Martin said when the .4 percent sales tax was approved by voters, there were three options where the excess revenue from sales tax collections could be used; to pay the jail off early, operations of the new jail, and remodeling of the old jail facility.
Vahrenberg said there has always been a plan for money to be set aside for these three options. He said the excess revenue was an “important component” in the campaign for the jail project. He also said the interest rates were “favorable.”
The Piper Jaffray data shows a sales and use tax cash flow analysis for Bourbon County between 2014 and 20135. The analysis, dated July 27, 2015, shows $9.5 million in Series 2015 debt service, $4 million in annual operating expenses, $13.5 million in total debt service and expenses, and $14.5 million in sales and use tax revenue at the .4 percent rate. An updated analysis, dated Feb. 5, 2018, shows the same figures, except the sales and use tax revenue jumps to about $16 million.
The 2018 analysis also shows about $1.6 million in excess revenues from sales and use tax between 2016 and 2035.
Commission Chairman Lynne Oharah told the Tribune said commissioners were not aware of a rumor about money being an issue with completion of the jail.
“We were surprised there were concerns about no funding for the new jail,” Oharah said. “We work very closely with the county treasurer and county clerk to track sales tax revenue and expenses, and we know at any given time how much money we have in those accounts and where we are on our surplus.
“The tax revenue we collect on a daily basis has been consistent over the last three years,” he said. “It’s hard to determine what the surplus is now until the project is completed.”
Commissioners Jeff Fischer said it was “not my perception” the delay for the jail was due to funding.
Martin said he simply wants to “put these fake myths to bed that the jail project is broke.” He also said one goal has been to “get the jail paid off quicker.”
“The delay is not due to no money. That is false,” he said. “We are good. We have been good … otherwise I would have never gone forward with this project.”
During the meeting, Martin discussed some of the options that were removed from the original jail project, such as a building that would have been used for processing vehicles and grass seed for the lawn outside the facility. He said he and commissioners “need to sit down” and get a “better understanding” in order to make a decision on what to do with funds generated from the sales tax.
Martin said the delay in completion of the new facility has not been due to funding, but additional concerns such as some construction delays, improper wiring, a recent water leak at the facility April 30, as well as “waiting on furniture” and various systems inside the facility to be ready. Much of the work for the move didn’t begin until the first part of 2018. Martin said Tuesday the facility would have been occupied in early May if the water leak had not occurred.
The move to the new facility comes three years after voters approved 1,031 to 1,015 a .4 percent retail sales tax increase to repay a $6.85 million bond to construct the jail. The site for the new jail was chosen in November 2015 and paperwork was signed in June 2016, with a groundbreaking ceremony held later that month.
In September 2016, commissioners approved a guaranteed maximum price of $6.9 million for the project, which did not include cells, professional expenses or the land acquisition. Actual construction began in November 2016. A dedication ceremony took place in October, when the public was allowed to tour the facility.