By Alex Bridges
As construction of the regional jail moves forward, the counties are examining their share of funding the facility after it opens.
Warren County started saving for the expense in 2010 -- two years before the Rappahannock-Shenandoah-Warren Regional Jail Authority signed off on the project's financing.
Shenandoah County has not set money aside for the foreseen expenses that, according to a report provided to the authority by Davenport & Company LLC in June, could equate to tax increases. But the counties may find other ways besides tax increases to cover the costs to run the jail and to pay off the project debt.
Shenandoah County Budget Manager Garland Miller said he believes county finances have stayed tight in the past several years, making it difficult for the county to set aside money for its share of the jail costs.
For Miller, County Administrator Douglas Walker's budget presentations and other information presented to the Board of Supervisors "have reminded the board that that is coming, that [the county] will have an additional expense in those years."
"Any chance we have we will remind the board this is coming," Miller said.
Warren County will pay the largest portion of the costs to run the jail each year, given its current inmate population and projected numbers. Regional jail agencies base local cost shares on the number of inmates each jurisdiction provides. The entity running the jail calculates shares using a three-year average.
Warren County began to set aside funds for the jail costs in fiscal year 2010. As of July 1, 2012, the county had $986,223 earmarked for jail costs, according to County Administrator Douglas Stanley. The current budget includes $250,000 toward the local share. Stanley has recommended a county budget for fiscal year 2014 that includes setting aside another $350,000 toward jail costs.
The report shows how much the counties would need to pay each year toward the debt service and to cover the local share of the operational costs. The jail can expect to receive some state and federal funding for operations.
The counties that do not set funds aside before the jail opens and the authority begins billing likely would need to raise taxes by the amounts estimated in the report in order to meet the expected cost of the facility, Stanley said.
Warren County may choose to offset the local impact of the jail costs by using some of the funds received from the Dominion power plant project, according to Stanley. But county officials have not yet decided to move forward with that option.
But as Walker stated during in an email, the information does not mean the counties would raise taxes to cover the cost. Walker explained that the tax-rate impact data shown in the report represents merely the amount of funds required and does not give its origin.
Citing the Davenport report, Rappahannock County administrator John McCarthy said he believes the counties can expect to save money by closing their local jails.
"It likewise assumes that only very modest sums will be realized from the closure of the local jails involved," McCarthy stated by email, in response to comments by Stanley.
"Rappahannock's projections were very conservative and I expect that we at least will realize more savings than assumed in the model," McCarthy said.
The Davenport report showed how much each county likely would need to spend to cover its share of the debt payments and how those expenses equated to local real estate tax rates.
For instance, assuming counties have not saved money ahead of time to help cover the costs, Rappahannock County's share in fiscal 2015 equates to an increase in the real estate tax rate of 1.65 cents. Shenandoah County would need to raise the levy by 0.91 cents and Warren County by 2.06 cents. However, counties would see their debt service payments jump in 2016, and then fall. From fiscal 2015-2021, Shenandoah and Rappahannock counties would pay the equivalent of a 5.1-cent increase in the tax rate; Warren County, 8.2 cents
"It is certainly true that the vast majority of our local revenue comes from property taxes, and so tax-rate 'impact' or 'equivalent' are often used to illustrate an order of magnitude," Walker stated.
Each cent of Shenandoah County's current real estate tax rate of 51 cents per $100 of assessed value generates approximately $450,000 in revenue, according to Walker.
After the jail opens, the authority will begin billing counties. The Davenport report assumes Shenandoah County would cover 36.7 percent of the local share of the costs. Rappahannock County would pay 13.3 percent while Warren County would cover the remaining 50 percent of the local share.
Under that assumption, Shenandoah County would pay approximately $1.09 million of the $2.97 million identified as the local share of the jail's operating budget for fiscal 2015. This figure does not include the amount each locality must pay to the authority to cover the loan payment for the year.
Shenandoah County Sheriff Timothy C. Carter has indicated that the Davenport report does not include what it might cost his agency and the county to run a lock-up facility in the local jail and extra expenses incurred by Sheriff's Office deputies transporting prisoners to the jail in Warren County.
Carter estimates the county will spend $743,426 in local funds to operate the county jail in the current fiscal year. The local cost to run the county jail in fiscal year 2014 is estimated at $709,816, the sheriff said. Carter noted the estimates fall in line with numbers provided by Davenport.
Contact staff writer Alex Bridges at 540-465-5137 ext. 125, or firstname.lastname@example.org