Court to apply for jail loan

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By Calen McKinney

If the County comes up short on footing the bill for jail startup costs, it now has a way to come up with the money.

At last week's special Fiscal Court meeting, magistrates gave their approval to apply for a loan from the Kentucky Association of Counties to pay for jail startup costs.

At the Court's November meeting, Taylor County Judge/Executive Eddie Rogers told magistrates that they had been given a preliminary jail budget that estimates the County could face a shortfall of about $300,000.

He asked magistrates to look over the budget and come to the Court's December meeting with ideas as to how to combat that shortfall.

At that meeting, Magistrate Richard Phillips asked County Treasurer Melissa Williams to research loan options.

At last week's meeting, Magistrate James Jones made a motion to allow the Court to apply to the Governor's Office for Local Development to borrow $500,000 to $1 million, if necessary, to pay for jail startup costs.

County Attorney Craig Cox said loans of less than $500,000 do not have to be approved by the G.O.L.D. office.

Startup costs, Jones said, would include training and salary expenses and equipment and supplies to begin operating the Taylor County Detention Center.

The loan will be repaid with jail revenue or excess funds, he said.

Jones said his motion was to simply give approval to apply for a loan if one is needed. Actually approving a loan, he said, would come back to the Court for approval of interest rates and repayment schedules.

According to figures included in the magistrates' court meeting packet, monthly repayment of a $500,000 loan over a five-year period would cost the County about $9,500. A $750,000 loan over a five-year period would cost the County about $14,000 each month and a $1 million loan over the same period would cost more than $18,000 monthly.

Magistrate Ed Gorin asked how the loan would be repaid if the jail does not produce enough revenue.

Jones said the Committee and Taylor County Jailer Rick Benningfield are working on the jail's budget and he believes there will be enough money to pay for the loan, if it becomes necessary.

When building anything, Benningfield said, there are many unknown figures and calculating a budget can become difficult.

Benningfield said he is preparing the jail's budget with help from Casey County and Marion County's jailers and believes it will be fairly accurate.

Jones said the jail's first year will be the toughest and he thinks this loan will be enough to help the jail through the first year.

However, Jones said, the Committee can't be sure if the County will be short on startup funds, and if so, by how much.

"So you're really just taking a shot in the dark," Gorin said.

Jones said the Court has known from the beginning of the jail construction process that the jail's first year will be tough.

Benningfield said he believes enough prisoners to fill the jail are out there.

"We just have to bring them in," he said.

He said he has been talking with nearby counties to try and fill the jail.

"They've got to go somewhere," he said.

Jones said building the jail is comparable to building a house.

"You pray to God it will work."

Jones said the County does not have money to pay for jail startup costs.

"Whatever we do, we have to borrow the money," he said. "To get the doors open we're going to have to have money. This is the only way."

Gorin asked Jones if there's anything that can be cut in the jail's budget to lessen any potential shortfall.

Jones said the budget has not yet been approved and will come before the Court for approval. At that point, he said, magistrates can look at the budget and suggest cuts.

Gorin said there aren't many profitable jails. However, Benningfield said there may be four or five actually making money.

"Even Marion County isn't making a lot of money," Gorin said. "[The Court] really has to look at a lot of ways to save money and watch our budget."

Jones said he believes all of those involved with the jail are concerned about expenses and have been working diligently on the jai's finances.

Rogers said everyone involved has to be upfront with each other. Other than borrowing money, Rogers said, the County doesn't have any other way to bring in revenue.

Gorin seconded Jones' motion. Rogers then asked for a roll call vote. Magistrates Gorin, Jones, Phillips, Marshall Caulk and John Gaines voted "yes." Magistrate Milford Lowe cast the loan "no" vote.

Attempts to reach Lowe to comment were unsuccessful.

In October, the Law Enforcement and Detention Center Committee discussed two options to combat a potential shortfall in jail startup funds.

One way, Jones told the Committee, would be to implement a "sunset" tax.

County Attorney Craig Cox told the Committee that a sunset tax is used as a temporary way to earn money that can be earmarked for a certain purpose.

A sunset tax, Cox said, would be added to the current occupational tax as a way for the County to earn money. When enough extra money is collected to make up for any potential jail shortfall, the tax would be lifted.

Jones said another option would be to simply borrow $1 million. Rogers said that option doesn't make good business sense.

Rogers said in October that he doesn't know yet if there will be a shortfall in jail funds.

"We don't know where we are yet," he said. "We're going to work to not have a shortfall."

On Friday, Rogers said the decision to apply for the loan is up the Court.

"If that's what the Court wants to do, we'll have to work with it and see what happens."

1 Staff Writer Calen McKinney can be reached at 465-8111 Ext. 235 or by e-mail at reporter@cknj.com.