Financial maneuvers could let Douglas County use bonds for jail improvements, officials say
photo by: Mike Yoder
With some financial maneuvering, Douglas County could use bonds to finance improvements at the county jail, Assistant County Administrator Sarah Plinsky told Douglas County commissioners Wednesday.
In the 2019 budget, the Douglas County Commission has allocated $2.9 million from the general fund for jail improvements. However, Plinsky said, general fund dollars can’t be used to retire debt without approval from county voters, so there’s a significant hurdle to issuing bonds for jail improvements and using that $2.9 million to retire the debt. In May, voters rejected a proposed half-cent sales tax that would have funded an expanded jail and a slate of mental health initiatives.
The proposal that Plinsky presented to the commission along with Dave MacGillivray, of the county’s financial advisory firm Springsted Inc., would solve that problem by swapping those dollars with money from another source: a countywide 1-cent sales tax that has already been used since 1994 to make $2.34 million in yearly bond payments for the jail and several other county facilities.
Plinsky and MacGillivray emphasized that their proposal had nothing to do with the quarter-cent sales tax that voters approved Nov. 6., which is to be used specifically for mental health projects.
Each year, the County Commission puts half of the revenue from the 1-cent sales tax into the general fund to pay for overall operations, and it transfers the other half into a capital improvement fund to make the bond payments and build a contingency reserve, Plinsky said. The county received $7.17 million from the tax in 2017.
Plinsky and MacGillivray proposed that the county could transfer up to another $2.9 million from the sales tax into that capital improvement fund, then allocate the $2.9 million that was originally set aside for jail improvements back toward the county’s overall operations instead. In effect, they said, this would trade one funding source for another — and, since the sales tax money can be used to retire debt on jail projects, this maneuver would allow the county to issue bonds to fund jail improvements. The county could then repeat the process each year to pay down the debt, they said.
No action was taken on the new financing option at Wednesday’s meeting.
Last month, the County Commission instructed Plinsky and Undersheriff Gary Bunting to develop what Commissioner Mike Gaughan said would be more modest improvements at the county jail than the $44 million plan voters rejected in May. Plinksy told commissioners that initial plans for added cells would be shared with the commission at its Dec. 5 or Dec. 12 meeting.