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Posted June 22, 2012 | comments 14 Comments

Regional jail cost figures less than planning model

By Sally Voth -- svoth@nvdaily.com

Debt service for the RSW Regional Jail will be $26 million less than a planning model predicted earlier this year, the jail's authority was told this week.

Ted Cole, of Davenport and Co. LLC, gave an update on financing to the authority, which consists of three representatives each from Rappahannock, Shenandoah and Warren counties, on Thursday.

The final total net debt service figure is $79 million, $26.1 million less than the $105.1 million estimate from Feb. 7. The gross debt service will drop from $153.8 million to $122.7 million.

Cole explained the discrepancy was due to a 5-percent interest rate being used in the planning model, although planners knew that figure was above the market rate. He said they wanted to have some cushion.

"We're about $950,000 less in annual debt service than what we had been planning over the last several months," Cole said.

That annual number would have been about $1 million had there not been a delay in the sale of jail bonds, he added.

When jail bonds were sold by the Virginia Resources Authority earlier this month, the interest rate was about 4 percent, up from the 3.9 percent rate in the May bonds sale where the VRA initially placed the jail bonds.

The lower debt service amount means the impact on the real estate tax rate in each jurisdiction is less than that used in the planning model.

The planning model predicted the tax impact would be an additional 5.1 cents for $100 of assessed value in Shenandoah and Rappahannock counties by 2021. The final figures show the increase instead at about 4.2 cents in Shenandoah County, and around 4.4 cents in Rappahannock County.

Warren County's tax impact is 6.9 cents by 2021, rather than the 8.2 cents predicted in the planning model.

14 Comments | Leave a comment

    Methinks somebody is jiggering the numbers.

    Early financial planning used a 5% interest rate to compute the interest on financing.

    The bond sale had a rate of 3.9%

    Ultimately, the actual interest rate obtained turned out to be 4%.

    So, the finance savings dropped from $26 million to $25 million?

    Well, now the jail authority can spend that $25 million savings to offset the state funding shortfall that pays only 45% of the construction costs instead of the planned 50%.

    Doesn't that mean the original real estate tax increase projections are now valid and the tax rate savings mentioned in the article are now imaginary savings possibly now gobbled up to pay the missing payments from the state?

    ... one step forward, two steps back....

    Boo Bird, do you really think that any of our local elected SERVANTS would ever mislead us? Wasn't it wise for the jail planners to estimate 5% even though interest rates had not been that high for a long time? Didn't they save the taxpayers a lot of money by estimating high? Wait...I'm getting confused. Was that part of the plan? The Jail Authority is using so much smoke and so many mirrors that even their financial and legal advisors can't keep up.

    I remember when Sharon Baroncelli was running for election and she told attendees in Fort Valley that taxes would not need to be raised to fund the regional jail. Then I read this article, and its made to look like the Board of Supervisors has done us a favor. They will be raising our taxes again, just not as much. What do they want a big THANK YOU! Everyone needs to wake up, our taxes were already increased this year to pay for shortfalls and we haven’t even started to fund the regional jail boondoggle. Its bad enough the amount of $$$ needed to build it, but the jail authority only has a rough idea what the operating costs are going to be to maintain it. Us tax payers will be funding this for years. Once built, the regional jail will become the Shenandoah County Alcatraz.

    If the planners had used a 6% figure in their planning model they could have saved even more. Then this "extra" savings could have been used to get drones and other surveillance equipment so those pesky jail opponents could be tracked.

    Since several on the Jail Authority have not read the 1st. amendment, you know they didn't read further down the list to the 4th.

    LOL...if you believe this I have some nice ocean front property to sell you in Oklahoma! since when has ANYTHING the government undertaken come in under the estimated cost! LMBO!!!! hahahahahahaha!

    I think it's time for Mrs. Voth to do some homework instead of printing what she is given by the government. You could have covered all of the cost overruns that have transpired yet you failed to. She seems to be a mouthpiece of the Government....or could that be her boss. Not sure who's in bed with who? Unbiased informative reporting is what we should be receiving, instead of surface noise by reporting this shortly after releasing the article about the attack of the Regional Jail Authority on the Citizen Protesters. A little background information; Several years ago she didn't report the Morris scandal and that failure perplexed me when the Free Press blew that one out of the water and reported on it for months. What most people don't know is that I gave her all of the information first and she failed to report a story during the two week interim before I gave it to the free press who actually ran with it. Just thought people should know the truth.

    At what point do we remove these officials? They only serve themselves not the tax payers. All three counties are going to be hosed while this jail authority and ajoining boards of supervisors, thumb thier noses at us and raise our taxes to fill there wishes and promises they have made to there friends.

    I met with Sheandoah County Administrator Doug Walker June 5, 2012 regarding the RSW Regional Jail and the escalating cost. Here is part of the conversation:

    I asked Doug Walker if he was comfortable voting on the SunTrust resolution, short-term note funding the RSW Regional Jail that was handed out May 31, 2012 at the authority meeting, without reading it first. Walker said “yes”. When I asked the question again to clarify his answer Walker said “yes, because the attorney had read it”. I asked one more time, because I couldn’t believe the answer and Walker stated “Now I feel trapped”. To which I replied “now you know how the taxpayers feel.”

    Now, on June 21, 2012, I wanted to ask the rest of Authority members, with the exception of Sheriff Carter, who voted no to the resolution, “how can you vote yes and commit your county to yet another contract between the authority and a financial Institution without reading and discussing the wording with the other county board members and citizens of those counties?”

    This is yet another example of what is wrong with this process, this authority, and the leaders leaping into a decision that will cripple Shenandoah County’s economy for years to come.

    To quote Thomas Jefferson, “It is incumbent on every generation to pay its own debts as it goes. I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the PRETENSE of taking care of them. To compel a man to subsidize with his taxes the spread of ideas which he disbelieves and detests is sinful and ruling unjustly.”

    Retired Captian Shenandoah County Jail,
    Cindy Bailey

    I wish Mark Prince and Cindy Baily could run for town counsil in Strasburg. Then we would have someone to vote for.

    Concerned Citizens:
    Stand up for free speech and be heard:
    Are we going to let the RSW Regional Jail Authority run our county? Disrespect our citizens and threaten lawsuits for speaking out against unnecessary building projects, or any decision that our leaders make?

    Tuesday, JUNE 26, 7 pm, speak out, stand up or just show up to support free speech at the Board of Supervisors meeting, Shenandoah County Government Center in Woodstock.

    Stop our county debt from increasing let your voice be heard. No more Capital Improvement projects. Encourage business growth in our county.


    January 22, 2008, Shenandoah County Board of Supervisor's meeting, part of the minutes below:

    Item E. Discussion regarding the General District and Juvenile Domestic Relations Court.
    Supervisor Baroncelli said I would like to move that we build a new General District and Juvenile and Domestic Relations Courthouse behind the County Government Center. I further move that after relocating these Courts out of the Historic Courthouse, that the Historic Courthouse and Courtroom be restored for the continued use by the Courts for Judicial Court purposes and the remainder of the building be renovated for adaptive governmental uses that generate effective, ongoing use of the facility, that ensures an economic stimulus for downtown.
    Supervisor Helsley seconded the motion.
    Supervisor Baroncelli - Aye Supervisor Morris - Aye
    Supervisor Helsley - Aye Supervisor Neese - Aye
    Supervisor Baker - Aye Supervisor Ferguson (no vote shown here or correction in Feb 13th minutes)

    GOOD NEWS next year shenandoah counties tax only goes up a minimum of 4.2 cents per hundred, Rapahannock the same, but the suckers in Warren County well its 6.9 cents per hundred. Wait a minute I smell something....
    I remember The BOS of Shenandoah County stated the jail would not cause or create THE NEED FOR A TAX INCREASE. Has anybody seen my lost Skunk?

    This article is like going out and buying a new car that you dont need and telling everyone: how much money you saved on the purchase.
    Shame on The NV Dailey for its slanted view.
    I guess this would be a progressive view newpaper.

    The decision of the Virginia Resources Authority to sell bonds for the RSW Regional Jail is an historic moment for the Shenandoah County Taxpayers. We will exercise our rights regarding repayment of this unconstitutional debt. There has never been a challenge such as this, and "we the people" have rights.
    Our supervisors choose to borrow and spend hoping the economy will get better and there will be revenue to pay this debt.

    Over the past three years, supervisors repeatedly have told citizens that they had no choice but to build a new courthouse because they had been ordered to do so by the courts. That was not the truth. Although three lower court judges petitioned the circuit court for adequate court facilities (not a new courthouse), no court order was ever issued. Many options were available to meet the facilities needs of those lower courts, but supervisors, not surprisingly, chose the most costly among them.
    Until now this board has been re-elected on promises not to raise taxes even though they are building unnecessarily during the worst recession in 80 years. The county's supervisors have once again broken their promise to the citizens of Shenandoah County and had to raise taxes this year. They will have to raise taxes every year for the rest of our lives and many generations to come. You know what happens to politicians who promise "no new taxes" and the turn around and raise taxes.

    The Old Edinburg School project, which they are advertising as a school for special needs children, with a cost of more than $4 million tax dollars, is also being planned as a Community Center. I have talked with parents who see this project as segregation. Many of the children referred to as special needs are currently in a public school in this county getting the help they need and no one is questioning "why are they there?"

    County Administrator Douglas C. Walker asked for an 8 cent tax hike; the board approved 4 cents. This tax increase does not include paying the following: jail project, Edinburg school, renovating Old Court House to name a few. Please explain how putting disabled children in a community center where adults off the street will have continued access to these children through other programs offered at the school/community center is safer and more secure than the public schools?
    Any reasonable person would determine that this project does not have the best interest of these special students in mind. If anything, these special children potentially will be exposed to a more serious threat due to the community center in the same building. This project has been promoted by Board of Supervisor David Ferguson as a revenue producing program. Is the public getting all the information? There seems to have been a lot of talk behind the scenes regarding this project. A community center/school for the disabled does not sound like an appropriate and safe environment for our most vulnerable citizens in Shenandoah County. We need to make room at Peter Muhlenberg Middle School, utilizing the space initially set aside for 5th graders and/or building onto this school using the land purchased around that school to accommodate these special children, while keeping them close to their classmates.

    Fearing that declining real estate values would force them to increase the tax rate, Shenandoah County supervisors decided to discontinue the practice of reassessing property every four years. The county administrator told the commissioner of revenue that supervisors had discussed the impending reassessment. If supervisors have held such a discussion, it was not done at a meeting open to the public.
    Local government, including schools, depends heavily on real estate taxes for funding. Supervisors would have no choice but to increase the tax rate significantly to collect enough money to finance the cost of government that continues to grow in spite of a poor economy. Did you know you cannot be taxed for more than the fair market value of your property?
    Cindy Bailey

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