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Posted July 2, 2012 | 11 Comments
Regional jail foe files suit to stop project
By Alex Bridges -- email@example.com
A vocal opponent of the regional jail filed a lawsuit in Shenandoah County Circuit Court seeking to stop the multi-million dollar project under way in Warren County.
The complaint filed Monday and provided to the Daily late the same night by the plaintiff, Mark W. Prince, names as defendants Suntrust Bank, the Virginia Resource Authority, the Rappahannock-Shenandoah-Warren Regional Jail Authority and the Shenandoah County Board of Supervisors. Prince, of Toms Brook, filed the motion for declaratory judgments, noting in the document "he is a taxpayer representing himself and all other simularly situated."
In an e-mail Prince states Shenandoah County would have saved $34 million on the project had the board of supervisors put the matter of borrowing money for the project on the ballot as a bond referendum.
The complaint includes motions to declare null and void the RSW Regional Jail Authority service agreement; the bonds issued by the jail authority and guaranteed by the board of supervisors; the bonds issued by the Virginia Resources Authority to buy the jail bonds; and the jail authority note in favor of Suntrust bank.
Prince claims the Virginia state code stipulates that Shenandoah County's participation in a regional jail must last a minimum of 30 years. The complaint also states that in order for the county to comply with code, the state constitution must have been complied with and agreements in excess of one year must be "approved by a vote of the citizens of the County of Shenandoah."
As Prince claims, the supervisors entered into the service agreement, which contains contractual obligations to make payments over a period of more than one year to the jail authority, "without approval by a majority vote of the qualified voters voting in an election of the question of contracting such debt."
Prince and other Shenandoah County residents have spoken out against the RSW Regional Jail over concerns about the final price of the project, ongoing operational costs to run the facility and have even questioned the legality of the jail authority's actions to acquire the funding through bond sales. Meanwhile the early stages of construction continue at the site on Winchester Road in Warren County.
As to the jail bonds, Prince "prays that this Honorable Court declare the RSW Regional Jail Authority bonds to not be a valid debt of the taxpayers of Shenandoah County nor the RSW Regional Jail Authority, and that payments on such bonds be enjoined as set forth in the aforesaid Virginia Supreme Court and United States Supreme Court rulings."
Prince states in his complaint that the court should render the bonds null and void, noting the Virginia Resources Authority "bought the bonds after Moody's Rating Service and Standard and Poor's Rating Service apparently chose not to allow their ratings, if any, to be used for sale of such bonds to the general public."
Prince claims Moody's chose not to stand behind such rating issued in March. Virginia Resources Authority pulled the jail bonds from the sale set for May 22. Before the regional jail authority held another meeting, the Virginia Resources Authority sold the bonds in June and "used those proceeds to purchase the dubious RSW Regional Jail Authority Bonds."
Prince claims the Virginia Resources Authority failed to comply with state code in selling the bonds.
The jail authority approved a note in favor of Suntrust on May 31 which matures more than one year from the date of issue. However, as Prince claims, state code requires such a certificate of indebtedness be approved by a majority vote of qualified voters which did not happen.