Stutsman: Tony Roetlin is with Springsted, who the County has contracted with to put some financial packaging together concerning the proposed jail.

Roetlin: There is a blue stapled packet that has been handed around.

Stutsman: Does anybody need another copy? I have an extra copy.

Roetlin: Financing Options for a County Jail is the title on the front. What I’d like to do is just prove the basic funding mechanisms for a county jail in Iowa. Then, talk about each one in some varying detail and then give you some impact or cost breakdowns at the end. So, it’s going to start sort of general without the use of numbers. Let me list those options right up front. We’re going to talk about partial cash financing, funds on hand. Borrowings from within the County’s current resources over the general fund, general obligation bonds that would not require a Countywide election, general obligation bonds which would require a County election. Local option sales tax, leasing, revenues from prisoner beds that are maybe not fully utilized right from the outset in year one and grants. At the top, on the first non-cover page is partial cash financing. In funds that are devoted from cash on hand to construction of the jail would have to come out of this County budget. The cost of a facility like this is, as we all heard recently, about $20 million. The statutes that govern the rates at which an Iowa county can extend property taxes do not contemplate a $20 million project coming from current revenues. There are things the County can do to use their current revenues. One example is something that happened, as I understand it, recently, I don’t know if it’s been formerly voted upon or not. But, as I understand it, recently a million dollars was allocated to the Jail for a capital project fund. That’s an example of partial cash financing. But, again, as you’ll see in the 4th bullet form in that section, you simply cannot budget for a facility this large from that revenue source.

Stutsman: Maybe we should clarify that. We reallocated those dollars that were already budgeted. I don’t want people to think that we all of a sudden came up with another additional million dollars. Those were dollars that were already in the capital project. We just basically are taking away from one project to put it towards a jail.

Roetlin: Thank you. There is also some, what I would term in my terms, legislative risk associated with funding an expensive facility with this mechanism. In the last legislative session, we saw an unsuccessful piece of legislation that would have not only rate limitations on the County extensions for property tax but some other additional measures that would further restrict the ability to fund projects from current revenues. The rest of the options I’ll talk until near the end have to do with borrowing in one form or another. When I talk about borrowing or bonds or a loan, at this point let’s consider them all to be basically the same thing. Any borrowing for this purpose would be tax exempt, meaning, the people, the companies, the investors that would loan money, would get to not include the interest income you’d pay when they pay their taxes. So, you’d receive a rate that is in the neighborhood historically of 2% lower than any other entity can borrow at. So, with that background, I’ll head into the general fund borrowing option. With only a hearing on the project and then a petition period of 30 days, the County could, at the end of that 30 days if a petition were not filed, enter into a loan agreement for this amount of $20 million. For essentially an almost unlimited amount of funds, to pay that loan off, the County would need to make room inside its budget to make the payments.

Jordahl: You say inside the current budget. Could that be done in the following Fiscal Year?

Roetlin: Where here is where I should explain some terminology. When I say current budget, I mean, not just this year’s budget. But, if you did a 20-year loan, for 20 years, there would need to be an allocation of somewhere for $20 million, in the neighborhood of $2 million. That would need to be taken away from the provision of other services that are currently being provided and allocated to pay principal interest on a loan. That’s the key to understanding this option. You have to clear room out of the current service offering and revenue and expenditure stream to repay the loan.

Jordahl: But that stream could be enhanced by raising taxes up to the limit of possible taxation.

Roetlin: It could. There are mechanisms where you can look at what amount of your current authority, for example, the $3.50 per $1,000 in the general basic fund that you could move things from that fund to a supplemental fund. You can do an analysis like that. It’s going to take frankly, just to give you an idea of magnitudes, and don’t everybody flip to the back as I’m doing at the moment. But, it’s when you take in the neighborhood of $.50-60 worth of clearing out to do that. I would wager that the County budget does not have that level of flexibility. There are mechanisms by vote, by use of a Countywide election, through which there can be additional levies, additional rate to be used. But, again, in the end analysis, that won’t be all that different in my mind from a voted general obligation bond issue.

Jordahl: Except that this one wouldn’t require a vote. Not that I seek to avoid a vote, mind you. But, you say there wouldn’t be a difference. That’s a pretty significant difference.

Roetlin: That’s a difference between general fund borrowing with no enhancements to the revenues in the County budget and doing a bond issue. But, were you to do a general fund borrowing, you would need to either cut services, stop spending on something else, or get a voted increase to the tax levy.

Jordahl: We can argue about that some, there are items that we could switch from the general fund to general supplemental to fairly substantial amount.

Roetlin: That is the reason I gave the $.50-60 per $1,000 magnitude. It would require about 1/7. If you imagine the general fund as a $3.50 revenue source and you need $.50 additional, you would have to literally take 1/7 of that budget, if I’m doing the math right in my head and do something else with it.

Thompson: But, if we decided to do that, the public could petition and election anyway.

Roetlin: Exactly.

Thompson: How many signatures on the petition?

Roetlin: I believe it is 1% of the last County general or gubernatorial election, whichever was the most recent, which in my mind, is not a lot in certain counties. In some counties it would not happen. In Cedar County it did not happen.

Stutsman: OK.

Jordahl: We have the Commissioner of Elections here to provide further detail if we’re curious about that.

Stutsman: In the spirit of time, I wonder if maybe we could forego some of these details and just hit the high points. I don’t want to cut discussion on some of these minute issues, but I think we need to keep moving.

Jordahl: I think the safest take on that would just be to say be probably be pretty darned likely that people would call for an election here.

Stutsman: Yes, good general statement.

Roetlin: I think the last bullet there catches the flavor of that a little bit. It just doesn’t seem to be the way to me, in my opinion the Johnson County Board’s operated in the past. In the way of either cutting services, or trying to avoid a vote.

Duffy: I agree with that.

Roetlin: The next item is GO or general obligation bonds, which are non-voted. There is provision in the Iowa Code, which allows in my mind token amounts of borrowing without an election. This kind of borrowing would be outside the budget in additional property tax levy, countywide levy to pay for the debt service. However, you can only borrow up to $800,000 with this option.

Jordahl: Per project however, it was discussed that maybe the Jail could be one project and the Sheriff’s Administration Building another, for example.

Roetlin: Could very well be. When you talk about issues like that, there is where it will be important to place a call to a bond council.

Stutsman: Every cell could be a separate project.

Jordahl: You could paint them different and then you could differentiate, yes.

Roetlin: Actually, people have gone to great lengths to try to exploit this provision and been very unsuccessful.

Jordahl: Parking lot, another one.

Thompson: I think that’s the key is that most of these haven’t been successful in the past. They’re kind of strict about this.

Jordahl: Just exploring the peripheries here. I think the answer is going to be pretty clear.

Thompson: Always know your boundaries, right.

Roetlin: On the next page I start by talking about general obligation bonds, which are subject to a Countywide election when done beyond an $800,000 type magnitude. The County would be required to receive 60% of the vote. Payments on those bonds would be, again, outside of the current County budget. They would be a separate debt service property tax levy, which would pay the principal in interest. This bonding mechanism offers most likely, the lowest interest rate available to the County on any type of borrowing, because the term general obligation means you’ll pay no matter what. There will be a levy, you’ll come in, you’ll pay the bonds. It’s that simple. One key element of this option goes to very specifically the ballot question. If this is the option that is selected, be very careful with the crafting of the ballot. It requires a statement of the amount of bonding authority the County is seeking and the total cost of the project. If the cost were $20 million, if there were $50,000 of additional expenditures that exceeded the $20 million number or a $20,282,000 number, the County couldn’t even take cash on hand from the capitol projects fund, from any other source borrowed or not to pay that. It is a project authority number. While reputable council has precluded clients from spending small amounts in excess of that higher ballot number, it is in my opinion a fairly onerous requirement, school and cities don’t face this in Iowa. I haven’t seen a jurisdiction that faces it anywhere, other than here. But, it is important to keep your eye on, if you select that option.

Jordahl: But, now as we talk about the cash buy down option though as you started out with, partial cash financing, it’s kind of elusive to me how that differs. I guess the difference is doing it up front versus paying that last nickel.

Roetlin: Timing is everything. If you have a planning process where you say, OK, we’re going to borrow $18 million. We’re going to use $2 million of cash on hand, capitol project allotment amounts. You imagine that you’ll have $2 million by the point where you need to borrow and to pay construction expenditures. Your ballot might say, shall the County be authorized to borrow $18 million through the use of general obligation bonds, to construct a facility with a total cost of $20 million. So, at the time of that vote, you’d lock in a total facility cost. Later, if it cost $20,500,000 you need to essentially go back to the voters for more authority, even if you have additional funds on hand. You’ve spent your 2, you’ve spent your 18.

Jordahl: It seems that a prudent approach would be to pump that $500,000 into the project as headroom out of those County funds before you start. You’d basically overestimate the project cost by whatever margin you want to be comfortable with.

Roetlin: Comfort is the key. I was happy to see the estimates before, including contingencies because that’s just very important in my experience. On the next option, local option sales tax, all the options so far have been property tax based funding mechanisms. Local options sales tax, as most people are probably aware, in the room, would be another penny or increment of a penny per dollar on sales within the County. You need a 50% simple majority vote Countywide to enact that. Jurisdictions are independently evaluated, except to the extent they’re contiguous. It could pass in the unincorporated but not in incorporated pieces of the County. It’s important if you want to, in my mind, this is a requirement that’s important for other reasons. But, if you want to borrow against that revenue stream, as you can do for something like a Jail, you need to be specific in your ballot language on the intent to do that. One key element of local option sales tax referendums is that you have an amount that’s coming in on the penny or the half a penny, or whatever the right increment is, and it’s then allocated to various jurisdictions, cities and the County. Many times in those elections, you end up with various plans for different governmental entities for spending the money. Those are not obviously within the County Board’s control, those other plans. You end up with a lot broader set of issues in an election such as that.

Stutsman: But, it’s not impossible for all the entities to work together on one project. Roetlin: That could be possible. That certainly could be.

Duffy: That’s what happened over at Cedar County. All of the cities and towns got together, 100% of the tax that they passed, $.01 sales tax will go to the jail. That’s in all the towns. I got them listed including Tipton.

Roetlin: I think your wording there is important there as well, because in the ballot you have to talk about what you’re going to use the funds for. If you don’t have the various cities saying we will use the funds for a jail project, we’ll contribute them, then my understanding is they would not obviously have to do that. They could do that. But, they are now obligated to do that before or after a successful vote.

Stutsman: You mean they could say one thing on the ballot and do something else after it was passed.

Roetlin: They have to do what they’re going to say on the ballot.

Stutsman: Right.

Jordahl: But, the ballot could say like any valid purpose.

Roetlin: Yes. If you’re not going to borrow against the revenue stream, you don’t need, legally, it’s probably a good idea, but you don’t need legally to state for what you will use the funds. So, if a municipality were not going to borrow against them but simply going to use them as they came in for some project and therefore, as I understand it, did not need to be specific in their language, they could say something publicly for an election and then do something else. Not to say that I believe anyone would do that in Johnson County. But again, to replicate the Cedar County model, you would need quite a few local governments to agree on the need and their contribution of funds.

Duffy: And the length of time after the jail is built and sales tax could be extra.

Roetlin: You can put a sunset provision on in the ballot.

Duffy: That’s important.

Lehman: Could say construction and maintenance would be ongoing. The sunset would dictate that.

Roetlin: You set a date. You set a number of years after which the taxable sunset and then it goes away, regardless of what you would like to use it for. Obviously if you are borrowing against it, you would do a bond issue or a loan of no greater duration than the sunset. But, any operating needs that were beyond the sunset, you would have no protection on those. Again, this would be an incremental revenue stream outside the County’s budget. I want to be clear on that aspect of each alternative. On the next page we have leasing at the top. When I say a jail facility is an essential purpose facility at the top of that section, I mean it’s an important duty of the County and it’s Sheriff to do what is required under various laws to provide for prisoners. If you are leasing a facility and you get to the end of an operating type lease in whatever period, 10 years for example, the lessor has you a little bit over a barrel to make a decision quickly. There are various kinds of leases with differing levels of protections against situations like that. But, the ones that would not require a vote offer little to none in the way of protections against a situation like that. The solutions that offer you protection against that, such as a lease that culminates in ownership would likely require a vote. Again, this is a question we’d need some bond council and County Attorney opinions on because it does get into a few gray areas. In the end, leasing often tends to be more expensive over the long run. We heard discussion earlier of is this a 20, 50 or 100 year facility. If it really is designed to be a, frankly either of a 20, 50 or 100 year facility, leasing is probably not as appropriate as some other mechanisms. Some leases do require a 60% referendum or election to be instituted. The next option is revenues from renting out beds to prisoners from other jurisdictions. I think the important thing to recognize here is that, the Jail would not likely begin at capacity. There would be some flexibility over time to satisfy a need that frankly exists throughout Iowa and most of the mid-west for jail beds at some rental amount. Whatever the number is, $65, $85, we’ve heard those numbers come up in prior discussions. The potential marketplace for that would be counties, inside and out of Iowa, in my opinion, the State of Iowa, maybe even surrounding states. It’s not inconceivable that counties are shipping prisoners out of their own state. I know Polk County is shipping to another state, which I believe might be Missouri, at least in part. The key feature of a loan or bond issue or some type of borrowing would be that it would be pre-payable. Such that funds from this source of revenues, and again this source is not going to be enough to be used without some form of borrowing, but that borrowing could be prepaid or retired early from revenues generated through this partial alternative. The next option is local financial institutions. Anything you would do in the way of a loan or lease with a local bank or investor is indistinguishable in the Iowa Code, from doing a bond issue with Merrill Lynch or something that’s syndicated nation wide. There just isn’t that statutory differentiation. You’ll need the same authority mechanisms, votes or certain statutory provisions. However, when we get to the point where there is an authority, a vote of authority or otherwise and we’re thinking about what’s the best way to get the lowest interest rate or the most favorable terms for the County, that’s when we start exploring those avenues. I would imagine, in a community with the strength of banking network here, that those options will be available avenues. I would imagine that certain County officials may have had discussions over time, over the years, about the County’s needs and how financial institutions locally can fulfill those now and in the future. Grants, at the bottom of that page, is the last option I’ll talk about. Most of the grants that I’ve seen have more to do with technology and programmatic funding and a lot less to do with bricks and mortar. Some of them have to do with the planning phase of a new facility. I contacted the Department of Corrections here in Iowa, Senator Harkin’s Office, the Office of Criminal Justice Planning and the Governor’s Alliance on Substance Abuse, and finally the National Institute of Corrections. I did receive some information from Senator Harkin's Office in writing. He did, and I’ll offer this because I will forget to do it at later points more than likely, he offered through his people to write a letter of support for any grants that are explored. Again, these are marginal funding sources, just like the revenues from renting out beds, the partial cash financing. Grants is another at the margin thing that can be done to save taxpayer money, but it’s not a solution to the funding problem. I did forward that information I got from Senator Harkin’s Office to your Budget Coordinator. He’s going to follow up on a little more detail. On the next page, I would like to talk about the impact of a general obligation bond issue, a voted one on the taxpayers of the County. Again, this is the bulk. This financing option addresses the bulk need, as I’ll term it. The majority of the funding. You can again, at the margin, use some cash on hand, some revenues from renting cells to other jurisdictions and some grants. But, I didn’t consider those magnitudes when I ran the impact numbers. A general obligation bond issue for $20 million, just to talk about round numbers, would cost a $100,000 market value residence anywhere in the County, about $31 a year in additional property taxes. Again, that includes some assumptions about how the borrowing would be structured, how long it would be till it was repaid, what the interest rate would be. $31 is a nice solid estimate though. I’ve erred to the conservative side in estimating that. If, through these other various marginal funding mechanisms the G.O. bond issue was contemplated to be $15 million, that would have an impact of $23 on a $100,000 market value house in Johnson County. Again, as I say in the next paragraph, that as the County sets aside funds to the extent they’re available, in this and other budget years, that can help offset some of the borrowing that needs to happen and more taxpayer savings can be achieved. There are also ways to save taxpayer funds and County funds in structuring or borrowing after its been sized. Regardless of the size, the faster you pay it off, the higher the payments in the beginning, but the lower the total payments. So, for instance, I have assumed a 20-year repayment term, which by the way, on a facility with a life such as this, is not at all unreasonable. But, should the County choose to issue a loan that goes away in 10 years or 15 years, you could save a lot of interest. For example, if you shorten a $20 million financing by 5 years, from 20 to 15 at current interest rates, you’ll save about $4.7 million. For every million that is financed, outside of a bond issue, you’ll save about $1.9 million, recognizing those funds probably came from property tax payments anyway, but there is not the interest component on them. At today’s interest rates, basically for every million you don’t borrow you save $2, give or take. Another way is to simply have a loan that starts at high payments and declines to lower payments and I address that in that longest last paragraph leveled principal payments, which would shorten the life, would save about $2.25 million. On the next page I go into considerable detail about the impact of a $20 million and a $15 million financing. That’s the 2 columns you’ll see, repaid over 20 years with level payments, just like a mortgage again. Level payments of principal and interest, various classes of the various classes of properties. So, again, you’ll see a box drawn near the top around a $100,000 residence with the $31 and the $23 projections. Maybe I ought to go through the top dollar projections. A $20 million financing would require about $20.325 million of authority. That goes to some of the costs of borrowing that are in the estimates that have been provided by Neumann Monson and Venture. The County would need for those project cost items to have a ballot amount, at least the total cost number, if not the borrowed amount of $20,282,000. Given that the $20.325 million is very close to that number, these numbers are all going to be accurate for our purposes. Assuming a 20-year payment horizon, even payments, you end up with about $1,970,000 annual payment of principal interest. There is a 56.1, penny tax rate implication, which then factors into all the impact estimates that follow down that column. Again, this includes a lot of assumptions, 2 of which were the credit rating the County would achieve and I threw in 1% of cushion against current market interest rates. Just to be clear, these should be conservative estimates. The next item you’ll see is a black and white graph that is sideways. I’ll throw that up on the easel here. You’ve seen this graph before. Let’s hold it this way first. You should recognize it. It’s been presented to the Board and the public before. What you see there is the other side of an equation, what happens if nothing is done, but we simply operate the current facility as is. The bottom line you will see is the annual cost to ship prisoners on a projected basis to other surrounding counties. The line that ends up more vertical at the end, this is over 10 years by the way, is the cost on an accumulative basis. So, adding year one’s cost to year 2 to year 3, (inaudible) at year 10. So, you see at 10 years spending $15 million. What that doesn’t include is any transportation cost. Gas, deputies time, deputies benefits, all those kinds of factors. If you flip to the next page, you’ll see a graph with a red and a blue line. What we’ve done there is take the past, I’ll flippantly call them shipping costs, and projected them out on a slightly different basis and farther. Taking it out 20 years. It’s on a different scale. The red line is a $65, per prisoner, per day number, plus a $10 per prisoner per day transportation cost. This goes to some of Jonathan Jordahl’s questions in prior meetings about, we don’t know what that costs, but its got to be there somewhere. I didn’t make $10 up. We found an Iowa City University study done a couple of years ago that estimated the cost of transporting small numbers of prisoners. Remember, the average county jail in Iowa is not Johnson County’s jail. It doesn’t have that many prisoners, it doesn’t have that many that would likely be shipped. But, that study said $10 per prisoner per day to transport to neighboring counties, which again assumes capacity in neighboring counties, which is great if you are Dallas County, right next to Polk County, had they not an overcrowding problem. But, you are in Johnson County, next to Iowa, Cedar, Washington, counties that all are facing the same problem. Washington County basically now, as I understand it, ships all of their prisoners. There is obviously no capacity there. Again, it applies the basic inflation number to that housing cost over time, which I feel is again conservative because you’re not really dealing with an inflationary type number. You’re dealing with a number that is going to be driven by capacity. Capacity will happen in big chunks over time in places you can’t control. Shipping to Polk County again would be a lot more expensive than a nearby county. Another important thing about the red line is, as I say not on the pages in the packet, but on this graph, this cost continues to rise in the future. It doesn’t go away after 20 years. It keeps going up, presumably. The blue line below, that’s more horizontal is a cost that stops at 20 years or at 15, whenever the County pays off a bond issue or a borrowing of some type. It’s a flat linear cluster because I’ve made some assumptions. A 20-year, general obligation bond issue with even payments. For every $1 million or so, that isn’t borrowed, this blue line will sink downward. For every amount it sinks downward, this cross over point moves to the left. So, maybe this is obvious, but the less the County borrows, the earlier the cross over point occurs. As you see, it occurs fairly rapidly. Again, it could occur more rapidly, if housing costs are more than $65 per prisoner per day. I’m not an expert on housing costs for prisoners, but I’ve heard numbers in different forms, including this form, at the spectrum of which this is at the low end.

Stutsman: Bob, I had a question about housing prisoners out of County. What happens when they want to visit with their attorneys? Who pays those costs for an attorney to go to Des Moines?

Carpenter: I certainly would think that the attorney (inaudible), but in this day and age and in Johnson County I wouldn’t be surprised if we had to go take them up and everything. We’ve never faced that yet. I’m not sure.

Stutsman: I’m thinking court appointed attorneys, where the taxpayer pays the cost of the attorney. If you had your own private council, then of course… But, I’m wondering if that’s another cost that we haven’t factored into.

Carpenter: One of the things Sally that you are going to find out is that most of the departments and jails that house prisoners from outside will not take any other inmates, other than those that are already sentenced.

Stutsman: OK, that’s not an issue, then.

Carpenter: It may not be an issue, however, betting on how many years down the road we go before we try to do something about it, it could be an issue down the road.

Hayek: Doesn’t the State fund though, the Public Defenders Office and also the court appointed lawyers. It might be an extra cost. I’m not sure it’d be an extra direct County cost. I haven’t done that kind of work for a couple of decades.

Stutsman: I don’t know either how that works.

Carpenter: One of the things Sally, that kind of fits into this, I did some calling around yesterday to see what was available because I think Tony was talking about the next door neighbor jails. The only neighbor next to us that had anything available yesterday was Muscatine County. They had 6 beds available.

Stutsman: OK.

Carpenter: For $65.90 and those had to be sentenced prisoners. The next closest was Hardin County, which is Eldora. They had 25 beds that particular day and those would include 13 for medium security and 8 minimum security. Which means, they are very selective on types of inmates they are going to be taking. We’re going to be taking the cream off the top here, so there’s no question about it.

Stutsman: Another thing that we don’t talk about, too, is being in the community and close to family and friends. If my son were in jail, I’d want to be able to have the option to go visit him without… Many times these are the very people who can’t afford to drive to Des Moines to visit a relative or wherever they go and that’s something we don’t consider, but that’s a hardship I think that plays into it, too.

Roetlin: One other thing that isn’t factored into that red line frankly, is the additional time and staff that I am going to assume would be necessary to juggle. That whole coordinated, getting prisoners here and there, just even people that are in the Sheriff’s Office, calling, finding space. I don’t know what the rules are in terms of if you have somebody in Muscatine County and they all of a sudden need that bed, and that person is forced back upon you. That’s not exactly my area of expertise, but I know there are issues there that are not in the red line.

Stutsman: Well, that’s what we dealt with, with the juvenile detention. In the middle of the night, Bob will get a call saying come get your juvenile.

Carpenter: I think probably when these jails like Muscatine County, they do leave a little leeway for their own people and I certainly would too if I was in the process and was able to do that. However, nobody’s sentence runs out at the same time, which means, I'm not going (inaudible) facility and bring back a whole truck load at one time because everybody’s sentence is done. Everybody’s got a different day. They’re not going to want to sit around until the next person leaves.

Stutsman: Exactly. Logistic nightmare.

Lehman: Also, you may have to lock in a certain number of beds like we do juvenile. Say, I want to reserve 6 beds, maybe only use 4. There’s a cost that you don’t really need, but you’re obligated to. That may be a scenario you’ll get into also.

Carpenter: See, I don’t perceive where a person can get a bus or a van or something being able to transport back and forth, because I think you’re going to be going in different directions for the needs that we’re going to have. I don’t see that one vehicle is going to take the place of several.

DeProsse: May I ask you a question please?

Stutsman: Sure.

DeProsse: I’m sorry, I haven’t been to previous discussions of this. So this may have been or I maybe missed a point today, but the red line does that represent, for example, Bob Carpenter made the statement that outside jails often times would accept only prisoners who had been sentenced to jail. That’s only some percentage of the jail population at any given point in time. People who are in for their 2-day OWI or another percentage of the jail population who are in over night or another percentage of the jail population at any given point in time. Does the red line represent the maximum capacity of the new jail? How many prisoners and people are represented in that red line as being transported out at whatever costs you are estimating per person to be shipped out of the County?

Roetlin: What we’ve done is take the estimates. I’m not sure what the firm name is but I think it’s Bill Garnos, had done some of the early work for the County in projecting inmate populations, regardless of keeping a current facility or building a new one, just what they might be. He had done a projection that ended up with sort of a slower projection, a faster one and one in the middle, based on different trends in the historic data for the inmate population in Johnson County. We took the mid-point, which has consistently I think been discussed in prior meetings as a reasonable estimate. We subtracted from that the amount of beds the State of Iowa would likely allow the Sheriff to use for his prisoners in the current facility, which I understand is somewhere in the neighborhood of 70. The difference between those 2 numbers is the number of prisoners I’ve assumed are shipped, again to use probably not the best term for it. An uncaring term. For each data point on that red line, that presumes flexibility in terms of there is enough sentenced prisoners to be shipped. In my mind, that makes it a conservative projection, because whatever you have to do with those others that cannot be shipped. Let’s imagine for a moment there aren’t enough. You need to ship 30 prisoners and there aren’t 30 sentenced prisoners in the jail. It’s not as if you’re not going to incur a 30-prisoner cost. You have to find some way of dealing with the problem and I think it’s fair to assume that any other mechanism is going to be yet more expensive.

DeProsse: I’m not sure that I totally understand what you’re saying at the moment. That’s fine, but for me to begin to understand it, if I go to the Garnos report, I think that must be available in the jail study committee stuff I picked up probably. So, if I look at the Garnos study and I look at the projections that he’s making for the inmate population over the next X period of years, 10 or 15, whatever it is, 20 or whatever his projections were. Subtract from that the various things that we will identify in that report, that’s to leave an X number that’s supposed to represent a point on a line of the graph that’s going, the red line that’s going up. Is that correct?

Roetlin: Exactly.

DeProsse: But, that does not deal with the issue then of whether or not there are beds available in other outlying counties for our prisoners to go to or our jailees. Or whether or not they would accept other than those who have been sentenced out.

Roetlin: Everything you’ve said is correct.

DeProsse: OK. Thank you very much.

Thompson: This page that Bob passed out earlier.

Carpenter: Not everybody has it. I will pass this out.

Thompson: This shows 102 prisoners.

Carpenter: This is just for days of population count. Carol, you’ve got a copy, you got 3 copies just like this a couple of weeks ago, with different dates. This was yesterday’s count. Yesterday was 101. Today was 104. But, that’s a Wednesday and a Thursday count. We look at the weekends as being more. Also what this does, it tells the type of charges that they are in there for. Everybody has the imagination that everybody is in jail because of a simple intox or an alcohol related charge. But, basically what this does is indicates to you, the public, the seriousness of the charges that they are in there for. This isn’t just a dry out facility that we have in that prison to represent the population.

Hayek: One quick comment. I know we’re dragging this out. But, also intoxicated related charges, people who are incarcerated for those, often there are associated more serious charges as well. You say 40% of the prisoners have alcohol related charges against them. They may also have assault. They may also have all sorts of other more serious kinds of things associated with that as well.

Stutsman: Good point. Thank you.

Thompson: Does a Y on the sentencing column indicate they are sentenced?

Carpenter: Yes. That they have been sentenced, they have gone to court. They are sentenced in there and the other ones they have not gone to court yet, have not gone to trial.

Thompson: I counted 23 sentenced, so we’d be a little short on that day.

Carpenter: But, not all agencies require that. But, what it does do is create an extra problem for us for the fact that they haven’t been to court yet. I have to go and transport them back for every hearing that they have before the court, which there is multiple hearings. We’re probably going to have to make them more accessible to their attorneys at that point in time.

Stutsman: What does this mean this hold for Scott County, hold for Minnesota?

Carpenter: That’s for when we’re done with our charges, Scott County has charges on them also.

Stutsman: But, that doesn’t mean we’re just keeping them while Scott County picks them up.

Carpenter: No.

Stutsman: OK.

Carpenter: These charges are not past charges. They are charges that they are charged with right now and are being held for in our County.

Stutsman: Just going through this list, I think they are exactly where they should be when I look at some of these charges.

Carpenter: Sally, the funny thing is I haven’t had anybody call me and say I’ve got an extra bedroom, let’s bring somebody out.

Stutsman: This is good information because Bob that’s what comes up. A question that comes to me continuously is who is in the Jail and what are they in there for.

Carpenter: If you look down on the left-hand column right at the start it tells you the length of time they’ve been in there and when they actually came in. For instance, number 1, he was brought in December 15, 1999.

Stutsman: Where does it say that? Oh I see. Those last numbers.

Carpenter: He’s been in there since last December. The next one is January 20 of this year. We just recently, I think there’s one that’s been in there for almost 400 days or 500 days. We can only keep sentenced people for a year, but if they’re pending trial, it depends on how long it takes for them to go to trial.

DeProsse: So, then may I just then ask a quick question to clarify that statement that Bob just made and that Sally was making comments on that you 2 were talking about. That where there is an N on your sentence, it means that that person has been charged with a crime, but has not been proved guilty of that crime or crimes under whether there is one or more charges listed. So, he or she is being held pending trial to determine guilt. Is that correct?

Carpenter: Where there is an N?

De Prosse: N, right. That means that person is being held pending trial to determine guilt.

Carpenter: Yes.

De Prosse: So, in fact, we don’t know whether we have innocent people in jail or guilty people in jail. We have people in jail who have been charged with a crime. Just yes or no. I’m not trying to argue or make a philosophical right now because I want to get to something else, is that true or not. Peter is kind of nodding yes.

Carpenter: I guess my important thing is that if it’s that close to yes or no that most attorneys have their clients out.

De Prosse: The point is many people in jail who get out, they get out on plea bargains and they get out on…

Hayek: Carol, I think what you’re saying is if there’s an N that person has not been convicted, I assume, convicted as well as sentenced.

Carpenter: It doesn’t mean he’s guilty or not. Carol, I’m not in the position to answer to that. The courts and the charges that are filed, I’m responsible for taking these people no matter whether they’re guilty or not. OK?

De Prosse: That, I told you I agree with the day I came down.

Carpenter: The question you have is you have to take that to the Legislator’s. I don’t have control in that office.

DeProsse: I’ve been to the County Attorney’s Office and some different law enforcement agencies. But that’s not the point to debate today, but it is a point to debate.

Carpenter: The problem is, I’ve got a problem with 120 people whether they’re sentenced or not, I’ve got to deal with them.

De Prosse: Your problem may be different than mine than as a tax payer of Johnson County and my desire to spend 20 million dollars to keep you happy.

Carpenter: No really, you do have a problem. Cause it’s your responsibility to make sure that I can take care of those people that are brought in to me.

De Prosse: That’s true.

Stutsman: If there’s an N there then why aren’t they out on the streets. Why are they in jail?

Hayek: Haven’t been able to make bond.

Stutsman: OK.

Thompson: Weren’t given bond.

Carpenter: In some cases there is no bond.

Stutsman: OK, and that’s the discretion of the judge. Am I correct in that?

Carpenter: See Sally, within 24 hours of when we actually take someone into custody, or some agency brings them to us, they are before a magistrate or a judge and the judge determines whether they’re kept in jail, with a bond or without bond. They determine the amount of bond. We don’t have anything to do with that. In some cases the law’s set out what the bond’s going to be. In other cases it’s up to the judge, but we have no control over that.

Stutsman: Any other questions or comments about the financing? Carol, what is the process here now? Pat White had sent a memo about the Bonding Council, where are we at as far as that decision and things?

Thompson: Tom Kriz and Tom Slockett are contacting a bond attorney and they will check with Pat White to make sure that’s the person we want to use. We have to decide how to put that on the agenda. Do we have to write a contract with that person? I’m not quite sure how you retain a bond attorney so we have to look that up.

Stutsman: That’s details to be worked out yet.

Thompson: They’ll find out when they talk to him.

Stutsman: Today, this is strictly just more information for the Board and the community and helping to make this decision. Tony were you going to say something?

Roetlin: I was going to offer that, should the Board have any questions on any of these options or want to explore further any combination of them, I would be happy to present additional material. If anyone on the Board has thoughts along those lines at the moment feel free to offer them to me.

Thompson: We don’t have a meeting next week and at the 24th, which is the following week, we need to be prepared to vote. What do you folks think? Do we need more discussion on this? Have we got enough information here to make an informed decision?

Stutsman: What are you talking about voting on?

Thompson: Which form of financing and what the ballot language would say.

Jordahl: I think we can visit with Tony if we have more questions rather than get together as a group.

Thompson: One of things that was mentioned earlier was places that we could cut the project in order to make the project cost lower. If we were going to do that we’d have to know that before the 24th.

Roetlin: You would have to know what 2 numbers you’ll put on the ballot. For instance, for a General Obligation Bond Issue, one of which is the amount to be authorized to borrow, and one of which is the total cost of the project including any other cost funded through any other sources.

Hayek: Does this require an underwriter?

Roetlin: An underwriter in the strict sense of the word, as I use it, in the Securities Market, a dealer of securities, like a Merrill Lynch or an A.G. Edwards would be involved in a national sort of public offering. I referenced local financial institutions early on. If that was the route that was gone on part or all of it, then you wouldn’t have an underwriter. You wouldn’t have securities dealer involved but you would still have somebody that buys the bonds and either holds them or resells them. There are costs associated with that.

Grimm: That’s what I was going to ask. Is there going to be an underwriter’s fee?

Roetlin: I was sort of anticipating that question. No matter what route you go there will be some borrowing related fees including a likely an underwriter’s fee and that has been factored into the…

Grimm: So 350,000 dollars?

Roetlin: Yes. That’s an estimate and it pays a few people’s fees. It’s not just an underwriter.

Stutsman: Do we have enough information then to come up with those 2 numbers? Do we have any other questions for Tony? Do we need to have another meeting? I know I’m going to be gone next week, are you going to be gone too?

Thompson: Yes, part of the week at least.

Stutsman: There’s always the first part of the following week.

Thompson: I guess from my money I’m convinced that we’re overcrowded in the Jail. The Sheriff has told us, the Jail Inspector has told us. We appointed a Citizen’s Committee who’ve told us. We hired experts who’ve told us. Nothing has come to my attention that would lead me not to believe that we have to address this problem. The problem I’m having is that 20 million dollars is the number and there is no other number. Could we save a million? I can kind of project we could save up to lower the amount that we would have to bond for. He said it wasn’t a Cadillac, but I’d still like to feel comfortable that I wasn’t asking the tax payers for any more than we have to. I don’t know if I feel confident about that. The 20 million number. How do the rest of you feel?

Stutsman: Is there anything that we could cut off? Over there.

Carpenter: Let me just say this. I really have no vested interest in building a Cadillac. I’m not going to be there for very long after it’s built anyway. It’s not going to be any feather in my hat. This building is essential. I don’t care who’s in there for Sheriff. There’s no extra frills and stuff in it. It’s stuff that’s needed. We’ve been working in a building for the last 15 years that was not large enough to start with. You can cut down size all you want, but you’re going to pay for it in another 7 or 8 years to add on if you build it. My understanding (inaudible) additional costs. I’m a Sheriff and there’s not very many Sheriff’s driving 6 year old cars. I’m pretty prudent when it comes down to trying to save money. I think we can show that through how our department operates and it costs our budget. I can honestly say this is not fancy. I think it’s well needed and I think that the people need to try to purchase it for themselves.

Maupin: If I could just add to that. I took a trip up to the jail in Rhinelander which was designed by these people. It’s just a white bread, run of the mill kind of building. There’s nothing fancy about it. The vast bulk of the expense of building this is in the area where the prisoners are held and I can tell you that’s no picnic ground. It’s just absolutely bare bones. If you look at the amount of money that’s in the money that is for things not directly related to the actual bricks and mortar in building of the building, the number comes up to less than 5%. Things like telephone systems and things like that. It looks to me like there’s very little leeway in this number that they’ve come up with that you could cut out or try to back away significantly in that 20 million dollars. I’m very comfortable with myself, having seen the numbers and having seen the kind of facility that it represents. We can pull ourselves through knotholes and turn curlicues all we want, but I don’t think we’re going to be able to get far away from the 20 million dollar, no. And I’m going to be paying part of the bill, so nobody wants it down more than I do.

Carpenter: One of the other things I found is that when we were going through the Space Needs for the different departments, my office isn’t any bigger than anybody else’s in the department.

Thompson: I hope it’s bigger than your current office.

Carpenter: As a matter of fact, I don’t think it is. There’s not a need. I don’t need to have a party in my office, but I do need to have space available so my people can function without worrying about getting hurt or anything like that. We certainly, how many times have we had meetings down in our office with all the storage and the boxes and stuff in there that we get, move around on. I will say that there is storage in this new building and it’s well needed. But, other than that, there’s nothing fancy.

Thompson: John, could I ask you, when you designed the size of these pods for 100 prisoners, is that because 100 is the maximum number that that number of staff can supervise? If we lowered it we would still have the same staff costs for less prisoners?

Cain: 100 is a good rule of thumb for that control center with inmates and the number of doors that have to be controlled. That’s an ideal number. Any more, you’re talking about adding more staff to that control center.

Thompson: OK. But any less and you still have the staff costs.

Cain: The same staff would still be there.

Stutsman: Carol, I want to thank you for pointing out that I made a gross generalization about the people in the Jail. I guess we are all learning through this process and I just made the assumption that anybody that was in jail was guilty of what is outlined here and I apologize for making that assumption.

DeProsse: I appreciate you saying that because I think there is also a question in my mind as to, and Bob is correct, it does involve other effort here, in the legislature included, who passes the laws, but also the way the County Attorneys intakes and prosecutes cases that are brought to it by the various arresting agencies in the County. It’s also a question of whether the people who are serving time in jail, who are not yet sentenced, because they have not yet been proved guilty of a crime are necessarily serious threats to the rest of us that they need to be in jail in the first place. I’ve looked at lots of these sheets now, many of them, and I’m sure if I looked at hundreds of them I could produce interesting statistics that suit my argument that you might not like and someone else could use them another way. I’m just not certain, as a taxpaying citizen of the County, that all of the greater issues involved in the building a new jail have been adequately addressed by the Board of Supervisors and by the public. I grant you that you did have a Jail Study Committee, and I have read some, but not all of their reports. I have visited the Jail and the Jail was in an overcrowded situation when I was there. Bob and I talked for several hours in a very frank discussion back and forth that I much appreciated. But, I still think that the broader question, or questions actually, that have not been adequately addressed by the people who are to vote on this. I think your statement before, too, about friends and families visiting and that they’re often the ones that don’t have the money to pay to get there. I have gone down to Gerrard’s, what I call a circus, several times now, where he processes all of the people that are brought in by the various law enforcement agencies and listened to him give out the citations. This, this, this. $155 plus court costs, $185. This, that and other things, $225. I sure tell you that some of these people wind up in jail because they can’t post bond and some are recurring fines and costs that they’re having a great deal of trouble paying. Then they have to do their community service and then they can’t do that because they are trying to work and then they get probation violations and then they wind up in jail for that. I think there are many serious social issues related to building a new jail that touch at people who recognize the need for jail and incarceration in certain situations. But, to me it’s a very serious matter as a taxpaying citizen as to whether or not I want to assess myself money for what I consider to be erroneous incarceration practices at the moment as well as thoughts that I consider are unjust. How might we address those broader issues to get to a more realistic estimate of having the jail we need and how long a period of time.

Stutsman: There are lots of factors.

Carpenter: I just want to address it for one second on this. The problem is, this isn’t something new. (Inaudible) you feel is the laws aren’t (inaudible) at this point in time, why have they waited so long now to start forward and try to change the laws when we now have the problem. I’ve been talking about the problem for several years. As a matter of fact, 10 years ago I came to the Board and said, we’re overcrowded. I have not seen any move by any folks in this County changing legislative actions to get the laws changed. Or you talk to the County Attorney about getting things changed there. Why hasn’t this been done in the last 10 years? Now that we’re to the point where we have to start shipping, now all of a sudden…

De Prosse: I know you told me that you think laws can’t be changed and you may be right, but I’m saying that things don’t start that way. They start as a little thing and they grow. And actually, a lot of the entire question of why we imprison so many people today is related directly to the War on Drugs. But, it doesn’t mean that as soon as those laws get passed that the population rises up and starts to oppose those laws. It takes a number of people all across the Country, for their friends, for their relatives, to get locked up for what they consider to be unjust laws. Then, you get enough people mad and that’s when you begin to get a groundswell. That’s why I’m sorry that perhaps it’s coming to this point of conflict with what you see. But, that’s the way these things happen. Nothing just starts from ground zero and takes off like a bomb over Nagasaki. It builds more like a wave crashing upon the shore over time.

Carpenter: Carol, you give examples, but the examples you give are narcotics charges here and those types of charges. But, I see some serious injury charges and this type of thing.

DeProsse: I see some serious ones, too, but when you jump to the back it starts getting a little less serious.

Carpenter: Well, the last phase, but those are normally the ones that have been there the less time, too.

DeProsse: Right. I know that.

Stutsman: It’s an interesting discussion and more will be had for sure because this is a very important issue for the whole County. We do have another meeting and I think the Board needs a break between meetings. Are there any other questions or clarifications that we need?

County Auditor Tom Slockett: I’d like to briefly explain the handout that I gave.

Stutsman: Oh. OK. Thank you. Is that this one, Tom?

Slockett: Yes. OK. One of the things that hasn’t been discussed I think is very important for the taxpayers to know about and that is what is going to be the cost of operating this facility. There has been no discussion of that at all. I want to talk also about what the implication is for our limited tax levy. One of the things that we aren’t familiar with in Johnson County is that we have a tax limitation. One of the things that we aren’t familiar with in Johnson County is that we have a tax limitation and we have never hit it before. But, what this graph shows is that 5 years ago we had $2.5 million of additional taxing authority for the general fund. In the current budget year, it is down to $653,403 of additional taxing authority that we could have taxed that didn’t. What that shows is that we are very quickly going to hit the limits in our general fund tax levy. When that happens, you then, for special circumstances, can publish additional information in your budget publication and that has to include what the maximum levy is and what you are levying over that. What the major costs are for that additional levy, after which 1/4 of 1% of the people who voted in the last general election can sign a petition, which 100 people in Johnson County to appeal the budget. The 2nd thing you can do is have a vote of the people. They require 50% to exceed those levy maximums. For example, Woodbury County put this proposition to a vote and it lost 90% to 10%. There is the possibility of not having the additional tax authority to pay for these costs or the cost that Bob predicts will get us anyway for transporting prisoners. These are very serious implications for the Board to be considering. For example, I would just like to mention some of the other funding that is provided for in the general fund. Board of Health, $2.3 million, SEATS, $1.1 million, United Way Agencies and Block Grants, $1.4 million, Human Services, $1.4 million. If we hit those maximum, those are the areas that funds are going to have to come from in order to pay these costs and it is something that is relevant to this decision. Then, one more thing that I wanted to say, regarding Carol’s point about is there any place to cut costs. I know there was considerable discussion about whether this building would last 20 years or whether it would last 100 years and value was given to making it last for a long time. But, I just wanted to point out that that depends on the future Board of Supervisors 20 years from now, continuing to invest in the same site if it has to expand. In fact, what this Board is talking about doing is setting an example. Not waiting 20 years, but after only 18 years, abandoning the site chosen by the previous Board of Supervisors and moving to a completely different site. As it was discussed, this is a site of very expensive land. This is in a growing County, 20 years from now, you could be just as well developed out there on the Interstate. So, if you think that future Board is going to make the same decision you have, abandoning the site and going elsewhere, then you don’t need to build it to last 100 years. Maybe you could save us cost there.

Stutsman: But, I think this Board would be very interested in expanding at the current site if that was feasible. But, from what we heard today it’s just not practical. We’re hoping by maybe going out to this site that there is enough availability of County owned land for future expansion that a Board won’t have to be faced with the same decisions we’re having to be faced with today, future Boards.

Lehman: I agree. They will not be painted into a corner.

Stutsman: Yes.

Lehman: As this Board was unknowingly by a Board 20 years ago.

Duffy: I don’t know if I agree with that. We could have sold that land.

Stutsman: What land?

Duffy: County farm. We turned down anyone that wanted to buy that. Developers and everybody else. So, I think they did look into the future. I won’t be around after the 1st of January, but I don’t think we should sell it now for development. I don’t know what we’re going to do with it.

Lehman: It will hopefully… My intent is to have it available for a Board to do something with for County use. I’m not going to be here then either I would assume to make that decision but I don’t want to… I want to leave those options open for future Boards.

Stutsman: Let’s not paint this doom and gloom about who is going to be around and who isn’t.

Duffy: I just don’t like to hear the Supervisors in the past. Sally, I get tired of saying they didn’t do their job in the past.

Stutsman: Yes. I know.

Duffy: Remember this big (inaudible) we got from Mental Health. We didn’t have it then, we got the job done that way.

Stutsman: Well, I wish we had that crystal ball. Our jobs would be a lot easier. Any other comments? If not, we will adjourn and see you back at 5:30.

Adjourned at 4:02 p.m.

Attest: Tom Slockett, Auditor

By Casie Parkins, Recording Secretary