Increase would generate $1.9M to pay for share of regional facility
By Sally Voth -- email@example.com
WOODSTOCK -- A 5-cent increase in the real estate tax rate may be needed to pay Shenandoah County's share of a new regional jail.
That's the amount necessary to generate about $1.9 million annually, which is what Shenandoah County will need to pay as its share, starting in fiscal 2019.
Ted Cole, from Davenport and Co. LLC, presented estimated cost figures to the Board of Supervisors on Tuesday. Construction of the RSW Regional Jail, housing inmates from Rappahannock, Shenandoah and Warren counties, is expected to begin in July.
Inmates are expected to arrive two years later.
The regional jail authority has $6 million in interim financing from Wells Fargo.
Construction costs are estimated at $53.7 million, according to Cole's report, but with added costs related to connection fees, training, equipment, and a 60-day operating reserve, the regional jail's price goes up to about $71.9 million.
The state is expected to reimburse the localities for a little less than half of the construction costs, plus half of the land acquisition, water and sewer connections, architectural and engineering services, and some technology costs.
The counties are on their own when it comes to paying for about 55 percent of the total project costs, or around $39.2 million, according to Cole's report. Staff training is expected to cost $900,000, transition personnel $500,000, vehicles and a radio system $400,000 each, and IT equipment $185,000.
Each county will start paying a per diem fee in fiscal 2015, Cole said. Before then, the authority will have to make four debt service payments during construction. Cole said jurisdictions often capitalize the interest from their borrowing to make those payments.
The counties' costs will depend on their proportion of inmates at the jail. Warren County is expected to have 135 -- or 50 percent of the prisoners -- followed by Shenandoah County with 99 and Rappahannock County with 36.
With double bunking, around another 300 beds would be available for the authority to rent out.
"That's a very real possibility," Cole said.
Shenandoah County has budgeted $686,611 for local jail costs. That number would be expected to go up 3 percent each year due to inflation, the report says.
Starting in fiscal 2016, it's estimated Shenandoah County would have to pay about $2.4 million for the regional jail, going up to $2.6 million the next year, and about $2.8 million in fiscal 2020.
The latter figure is about $1.9 million above what it would be expected to pay toward costs of a local jail in fiscal 2020, and the report estimates that could be made up with a 5-cent real-estate tax hike. Each penny equates to about $375,000, Cole said.
Supervisors Chairman Conrad Helsley said construction bids are expected to go out Feb. 26.