Will We Enjoy A $1.78 Mill Annual Savings for New Public Safety Center (PSC) As Lincoln County Projects? Or More Likely Zero Savings And $2.65 Million Increased Cost As We Reveal Below?
Yes, That Is A $4,439,000 Annual Difference Between The Two Positions! Read On To See Our Evidence!
The pitch on the $50,000,000 Public Safety Center is that our jail will generate $2.1 million of revenue from the US Marshals Service. These projections are found Here and were generated by the Wisconsin architect firm, Venture Architects, (see .PDF page #1 of attachment) while working with County Sheriff Steve Swenson. Venture would be in the running for a contract including $3.9 million architect/engineering and design contingency fees (.PDF page #7) if voters would approve this proposal. They may not be too objective according to this statement by a Duluth, MN civil engineer. Note: All future page references, below, (until we cite the US Marshals Service report) are to the study linked above.
The CPA’s contribution to the financial projections (Note A, .PDF page 17), were qualified with this statement, “The forecast is based on, to the best of management’s knowledge and belief, the County’s expected results of operations if the County operated a jail facility,” as of September 19, 2019.
In other words, these jail financial projections encompassed the knowledge and many of the beliefs about the cost of jail operations from our new Sheriff, Steve Swenson, as of a year ago. Have his beliefs about these jail costs changed any in the last year? We don’t see where the county hired an accounting firm to test these financial projections compared to similar sized jails or reasonable intergovernmental expectations.
Economic Development Gone Sideways?
Keep in mind that Economic Development advocates, nationwide, have taken up rural jail building to try to ‘sustain’ rural community’s economic base. It rarely pans out. In Wabasha County, MN, they built a 72-bed jail in 2009 with promises from the local Sheriff that revenue from housing ‘out of county’ prisoners would keep it 80% full and pay for the jail. Deb Roschen, a former Wabasha County Commissioner (elected after the previous Commissioners voted in their disaster in) reported to us that they average around 17.5 daily prison population (or 25% occupancy) and the day in April of this year when their Commissioners considered a vote to now close their new jail, they had 6 prisoners….with 66 beds sitting empty. It would have saved them $1.3 million annually, but the county employees raised such a campaign fuss that on a 3-2 vote the Wabasha County Commissioners chose to keep sticking it to local taxpayers.
Honest Operating Costs
In the jail study of August 2019, Venture Architects projected 38 total full-time employees (Note C on .PDF page 18) to staff the jail at total payroll (salaries, OT and all benefits) of $2,285,000. (.PDF page 15) This would be an average of $60,131 per employee. This is a major underestimate. We are confident that an average additional total payroll costs of $30,000 per employee is in order. This raises it to a more realistic cost of $90,131. Ask anyone in HR. This would increase annual operating costs of $1,140,000 ($30,000 x 38 new employees) Lincoln County taxpayers would have to cover. We will use this figure below in our updated costs analysis.
Let’s Get Real About The Prisoner Count
Sheriff Swenson believes the jail operating budget (again, linked above) includes $2,064,000 (.PDF page 15) of additional revenue to house federal prisoners based on 65 ADP (Average Daily Prison) count from the feds. This amount equals 76.8% (.PDF page 15) of his total projected revenue for this proposed jail, so this is important!
Swenson’s projections were for 65 federal prisoners at $87 per day (Note B, .PDF page 17) x 365 days totaling $2,064,000 of revenue he believes will come in.
But Yankton County Sheriff Jim Vlahakis recently reported to us that they housed an average daily prisoner count of 44.0 prisoners from the US Marshals Service (USMS) in FY2019. Their county jail is a few blocks from the only federal prison in the states of North Dakota, South Dakota, Nebraska and Iowa.
Minnehaha County Sheriff Mike Milstead told us they have 35 federal prisoners being detained in their new jail (as of 9/14/2020) and he “expects that number to hold fairly steady in the future.” Now this is the jail that is but a few blocks down the street from the Sioux Falls Federal courthouse. Now consider the actual prisoner counts of these two counties versus Sheriff Swenson’s “projection”!
The USMS’s Annual Report found Here shows their national numbers of prisoners detained had been going down from 2011 thru 2018 and turned around in the last two years. They are projected this year to be right near where they were nine years ago (.PDF page 7 of this USMS Annual Report). But the report also said, “The USMS projects it will receive 233,898 total prisoners during FY 2020, a decrease of approximately 2% from the 237,363 prisoners projected for FY 2019.” (.PDF page 5) The prisoners being handled by the USMS are starting to decline again. This does not support such bold projections by Lincoln County.
Chief US Marshal of Sioux Falls, Steve Houghtaling, recently told the Lincoln County Commissioners that they will make no promises as to prisoner counts. As well, Houghtaling told us that, “Our game [housing prisoners] is dependent on factors we don’t control. Everything on our end is decided by judges….and [by] the number of cases the U.S. Attorneys prosecute.” “Nationally, the USMS confirmed this, stating in their report that “other influences (frequently established outside of the budget process) can also have substantial influence on detention needs, such as special law enforcement and prosecutorial initiatives.” (.PDF page 6)
There is no way the US Marshals Service can commit to housing 65 prisoners daily in Sheriff Swenson’s proposed new jail, when the Minnehaha County Sheriff forecasts they will only need 35 beds in their new jail.
When Sheriff Swenson’s ‘belief’ that $2,064,000 of federal revenue later does not materialize, based on his exaggerated speculation as to the federal prisoner count, then it will be Lincoln County property taxpayers who are on the hook. Not his department.
Commissioner Joel Arends Tried to Warn the Majority Commissioners of This Revenue Risk, Prior to Them Voting 3 to 2 to Pass The Jail Lease
Arends stated during the February 28, 2020 meeting (Time Stamp 50:21 on the county’s recording) found Here,
“My understanding is the feds won’t give you a guarantee ahead of time but this whole plan hinges on the federal government taking….most of their prisoners out of Yankton and putting them in our jail. But we have no guarantee of that and so we’re supposed to take a leap of faith, $50 million, based on or it’s hinged upon… And I believe the Sheriff has had good conversations with the Federal Marshal. I don’t doubt that. But I haven’t seen anything from the federal government yet saying, ‘Yup, we’ll do it.’ and I don’t even know how that process works, you know. I don’t know if it’s a competitive process. I don’t know [even] if the US Marshal who’s been nominated and confirmed here to South Dakota has unilateral authority to do that….But this whole plan is based on having federal prisoners in the estimates of the dollar amount. That’s $2 million a year in federal money so I think we should probably have the federal vote [sic. first]. I need more assurances from the federal government on this issue or at least understand how that’s going to work.”
Poppens’ Condescension
Commissioner Michael Poppens then responded (Time Stamp 52:35), “Thank you, Commissioner Arends. Let me comment first, please Commissioners. Commissioner Arends, I look at you and I see a lot of myself when I served on the Commission for the first time. There’s a lot of things I would love to have every detail clear and precise and so I’m confident of my vote.”
Why is Commissioner Poppens condescending to Commissioner Arends’ concern by observing that the critical issue of some assurance of $2,064,000 in federal revenue, which Arends’ raised, is a mere ‘detail’?
Poppens continued, “I don’t know that we’ve been presented anything today that we haven’t had for a period of time. Some things are presented in a little different format since this bond request scenario. But I’ve been here, and I’ve seen these numbers and so I’m confident of them, but this has been part of our discussion.”
Clearly those past discussions have not produced some commitment from the federal prison system that they will be funding $2,064,000 into this each year. Why is Poppens ignoring this fact?
Poppens continued, “We’ve had the evaluation of our need for years and have been working on that. We’ve got a cost analysis of what it costs to operate a jail, which includes part of maybe housing other prisoners. But the analysis of it will also say that it’s pretty evident that the best option is for us to house our own prisoners. Even if we didn’t house anybody else’s prisoners, based on the amount of cost and the continuity of services….”
“Even if we didn’t house anybody’s else’s prisoners…” – along with their bogus cost analysis – is, taken together, what motivated Poppens to vote to approve the $50,000,000 Jail/Lease? This is insane!
This is all “pretty evident” to only Poppens, Schmidt, Landeen and Sheriff Swenson. But this is amazing disregard for Lincoln County taxpayers!
To Summarize: The Report Which The Lincoln County’s Majority Commissioners Are Spinning Has The Audacity To Call It A Taxpayer Savings!
Lincoln County’s Estimated Taxpayer “Savings”
Page 6 & 7 from their report
$2,689,100 Their Projected Total Revenue On Proposed Jail
–$3,319,000 Minus Their Projected Total Expenses On Proposed New Jail
–($629,900) Net Projected Costs Of Jail Operations
–($629,900) Net Projected Costs Of Jail Operations
+$2,416,000 Add Back Eliminated Payment to Minnehaha Cty. (68 inmate days x $97.34 p/day)
=$1,786,100 Lincoln County’s Estimated “Savings” To Taxpayers
Consider Our Far More Likely ANNUAL Cost Estimates to Lincoln County Taxpayers. It’s NO Savings!
-$ (629,900) County’s Projected Net Costs of Proposed Public Safety Center
-$(1,140,000) Additional (More Realistic) Payroll Costs (cited above)
-$(1,032,000) More Reasonable Estimate in Federal Prisoner Revenue ($2,064,000 x 50%, netting only 50% of the ADP Sheriff Swenson is projecting)
-$(2,267,400) FY 2021 Payment of (P&I) on $50 mill. Bond by Dougherty
______________
–$(5,069,300) Total More Realistic Taxpayer Costs For Public Safety Center!
+$2,416,000 Eliminate Projected Payment to Minnehaha County going forward
$(2,653,300) Net Annual Increased Property Taxpayer Expense Over Cost of Housing With Minnehaha County
Thank you,
David Tuntland
Founding Director LCCRP Committee