OZARK -- Franklin County is limited in the sales tax that officials can ask voters to approve to build a new county jail, leaving the officials to consider whether the tax would be enough to do the job.
The Quorum Court met Thursday night and heard presentations from a jail construction company with a plan for a new 92-bed county jail estimated to cost up to $8.8 million. It also heard presentations from a bond attorney and bond company representative on how to finance the project.
Bond attorney Ryan Bowman, with Friday, Eldredge & Clark of Little Rock, told the Quorum Court that state law limits the county to levying a sales tax totaling no more than 0.5 percent.
"You're one of the few counties in Arkansas that have a very unique situation," Bowman told the Quorum Court members.
The Quorum Court has been working for months to replace the county's 42-year-old jail, which the judicial district's Criminal Detention Facilities Review Committee says violates state jail regulations and is overcrowded and understaffed. The committee threatened to close the jail if improvements are not made, and that would force the county to pay another county to jail its prisoners.
Bowman said that under Arkansas Code Annotated 26-74-414, counties that passed sales taxes under that statute could not levy sales taxes totaling more than 2 percent at any one time. Franklin County has two sales taxes, totaling 1.5 percent, that were passed under that statute.
The statute says that if the county already was levying a tax under the statute and subsequently added another tax, the county would have to share the revenue from that additional tax with the cities in the county according to population.
But Bowman pointed to another statute, 14-164-327, that says the county could avoid sharing the tax revenue with its cities if the tax was used solely for debt service, such as paying off jail construction bonds.
The bond representative, Kevin Faught with Stephens Inc., proposed two options for the county.
Franklin County could ask voters to pass the entire 0.5 percent sales tax to pay for jail construction, and nothing would go to operations and maintenance. The 0.5 percent sales tax would generate $865,000 a year, Faught estimated.
Or, Faught said, the county could try for a three-eighths percent sales tax for debt service and a one-eighth percent tax for operations and maintenance. The two taxes would have to be voted on separately.
Since it would not be used for debt service, 42 percent of revenue from the one-eighth percent tax would have to go to the cities in the county, leaving about $125,000 a year for the county for jail operations and maintenance expenses, Faught said.
County officials had hoped to use a sales tax to cover the anticipated cost increase in operating and maintaining the new, larger jail, which is not debt service. The county this year is paying about $630,000 for jail operations and maintenance, County Judge Rickey Bowman said.
He said Thursday that the new jail is designed to minimize staff, so the county may not have to add more jail staff, which stands at nine full-time employees. And the new jail will have efficiencies that could help keep costs down.
It was unclear at Thursday's meeting whether an additional $125,000 a year from a one-eighth percent sales tax would be enough to cover the increased cost of running the new jail.
The county judge said he would organize a committee to look for other sources of money for operations and maintenance, possibly through a millage increase or other sales tax money that goes into the general fund.
"I've thought about it a lot, trying to figure this out, and I feel that we can" find money elsewhere, he said.
Ryan Bowman also told the Quorum Court members that they could seek to change the law in the next legislative session to raise the 2 percent sales tax cap. Rickey Bowman said the legislation would have to allow raising the cap and exempting the county from sharing the tax collections with its cities.
Franklin County officials are considering building a 20,000-square-foot jail on five acres of land that the county owns off Airport Road near Interstate 40 in north Ozark. It would consist of 68 beds for men, 22 for women and two isolation cells.
The building would accommodate the sheriff's office and the 911 communications center. It also would have an arraignment room, commercial kitchen, a laundry, medical treatment room and a secure sally port.
The construction manager would be SouthBuild of Collierville, Tenn., which has also overseen construction of the new Crawford County jail and has been hired to manage the construction of a new jail for Logan County. Company officials said the work on the Franklin County jail would be bid for locally.
The jail would be designed with two inmate sections that could be supervised from a central location, minimizing the need for staff. Two more sections could be added as needed to increase capacity to 200 beds.
The presentation by SouthBuild's Jim Langford also included a suggested schedule with the sales tax election scheduled for October 2017. Considering all the laws governing elections, Bowman said, the earliest the county could hold an election would be February.
If it passed in October 2017, according to the SouthBuild schedule, plans and designs would proceed and the construction contract would be awarded in June 2018 with the start of construction in July 2018. The new jail would be finished in late 2019 or early 2020.
State Desk on 10/17/2016