Jail Financing Impact | Eastern North Carolina Now

    The political propaganda that surrounds the new jail has not helped to inform either the public or the county commissioners. In particular, Commissioner Klemm's estimates of incarceration rates and reimbursement fees for inmate housing extending out to 2025 and beyond are entirely subjective and have been given too wide a range to be of any use in long term capital budgeting.

    The jail is another amateur effort by Mr. Klemm, et al., at portraying make-believe venture capitalists. The commissioners have actually worked backwards in their planning process. They first decided to build the jail, and then they created a story line for how the project could be profitable. In the real world finding profit opportunities comes before implementing project approval.

    What is conspicuously missing from the discussion is any year- by-year, category-by-category schedule of cash flows that have been discounted back to present values. No private business would even consider undertaking a project that would impact thirty years of earnings without laying out a full list of researched estimates for what the project would cost and how those costs would be paid for. No private bank would ever finance such an ill planned effort.

    Lack of candor has resulted in the public's attention being drawn away from understanding how the jail actually sets the stage for substantially more than $20,000,000 in debt.

    The jail is initially expected to cost $20,000,000 and it will accommodate 176 inmates. However, the facility's core infrastructure will be built to twice the scale initially needed, with the clear intention of eventually expanding inmate capacity to 350 beds around the enlarged core.

    Putting this into perspective, the first phase of the project will incur a cost of $113,636 per inmate: the price of a three bedroom, two-bath home in a good neighborhood. It also nearly doubles the number of cells available in Beaufort County and leaves taxpayers with a long-term wager on the prospect of renting excess cell space to neighboring counties. When the first phase is completed, county commissioners will have spent millions to build-out the extra infrastructure required to expand the jail to 350 beds. If the expansion does not occur, then that money was wasted. If the expansion does not occur soon, then the infrastructure will eventually become outdated.

    If taxpayers were being fully and properly informed, then we would have been specifically told to anticipate funding an additional $15,000,000 in expansion costs somewhere in the near future. We should, by now, understand that since we were denied any vote on the first $20,000,000, we have no hope of voting on the following $15,000,000.

    The county board's expansion plan obviously envisions a community of 12,000 families carrying $35,000,000 in debt over several generations, to fund a prison complex that is four times larger than anything we have ever required. Meanwhile, trailers serve as classrooms and the commissioners sold an entire hospital at less than cost because they felt that it was too expensive to run.

    Taxpayers should also realize how $35,000,000 in debt is going affect the local economy. Every dollar borrowed will be sourced from lenders outside of Beaufort County. Therefore, the entire loan, plus interest, represents a transfer of wealth from local families to out-of-state creditors. The loan's $2,000,000 in yearly debt service will require a 4-cent hike in property taxes. Over the next thirty years, property owners will pay higher taxes, while local employers will see higher costs and employment will suffer. In effect, we will be draining money from our county so that commissioners can roll the dice on a ridiculous concept, i.e., creating a government run, yet commercially viable, rent-a-jail. Understandably, the board's truly miserable record for project selection and cost control has inspired no one's confidence.

    Our county commissioners will be spending more money to build housing for their hoped-for 350 prisoners than they spent to build schools for our children or hospitals for our sick. Yet, they refuse to give Beaufort County a vote on the plan.

    We actually elected these guys. No wonder they don't trust our judgment.

    Regards,

    Warren Smith
     Beaufort County, NC

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