Tuolumne County leaders approved a plan on Tuesday to issue $24 million in lease-revenue bonds to finance technology upgrades and construction of a new jail, despite facing a projected budget deficit of about $4.2 million in the 2018-19 fiscal year.

The bonds would be paid back over 30 years through leasing four county-owned buildings that collectively have an insured value of about $23.6 million. The county would continue to have full use of the facilities by paying rent in an amount equal to the debt service on the bonds, which would be about $1.3 million next year.

Bond experts and county officials gave a presentation to the county Board of Supervisors on Tuesday before it voted 4-0 to approve the plan, with District 1 Supervisor Sherri Brennan absent.

Facilities that would be leased under the plan are the County Administration Building at 2 S. Green St., the A.N. Francisco Building at 48 W. Yaney Ave., the Tuolumne County Library Main Branch at 480 Greenley Road, and the Historic Courthouse at 41 W. Yaney Ave.

“This is one of these things that we’re going to have to leave it up to the experts…. We have faith in you doing that job,” said District 4 Supervisor John Gray, who serves as board chairman.

The underwriter on the bonds would be Raymond James and Associates Inc., a subsidiary of the Florida-based financial services and bank holding company Raymond James Financial Inc., which reported revenue of $6.3 billion last year.

Rob Larkins, managing director of California public finance for Raymond James, said they estimate the interest rates on the bonds would be less than 4 percent.

Multi-year budget forecasts have long projected the need for borrowing to cover the county’s share of the new jail’s $40 million price tag. Two state grants will cover $33 million of the total construction costs.

Planning for a new jail began in the early 2000s.

The board awarded the $39 million construction contract to the Fresno-based Harris Construction in November. A groundbreaking was held with local dignitaries at the site on Feb. 6, with official work slated to begin next month.

Ken Valenta, of Columbia, urged the board to reconsider its plans.

“Let’s improve the facilities we have and our services to keep people out of jail,” Valenta said. “That’s what I’m asking the county to do, instead of plunging this community into debt.”

District 3 Supervisor Evan Royce said not building the jail at this point isn’t an option.

Royce said changes in state law over the past decade have made the county responsible for housing a higher degree of offender than in the past. He added that has also kept the current 147-bed jail at full capacity and resulted in more offenders being released for offenses like burglary.

The new 230-bed jail will also have space for programs intended to help reduce the recidivism rate, he added.

“You don’t have those down here (the current jail), you just lock them up and leave them in a cage,” Royce said, adding that he will likely be helping to pay for the facility as a taxpayer long into the future. “There’s no doubt in my mind that we need this facility.”

Earlier in the meeting, Valenta also made suggestions to the board for ways of boosting revenue that’s consistently not keeping up with rising costs.

County officials said that the projected $4.2 million budget deficit is due to expenses outpacing revenue gains. The deficit represents roughly 5.6 percent of the county’s General Fund, which pays for most core services such as law enforcement and employee salaries and benefits.

Valenta suggested attracting more tech companies from the Silicon Valley to do more business in the county by opening up more land for development of commercial warehouses and manufacturing.

“These minimum wage jobs aren’t helping,” he said.

Auditor-Controller and County Clerk Debi Bautista, who serves as the county’s chief financial officer, told the board that she wasn’t so much worried about balancing the budget as she is long-term commitments and outside forces that will keep costs on the rise.

Bautista said the 5 to 8 percent cuts to almost all county departments that the board implemented in this year’s budget to help balance a nearly $6 million budget deficit weren’t enough.

The across-the-board cuts helped prevent the board from making significant reductions in services provided by the county Recreation Department and libraries, an issue that generated controversy during the budgeting process last year.

Contact Alex MacLean at amaclean@uniondemocrat.com or (209) 588-4530.





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