Okay, let's call the meeting to order please but the record all members the court are present purchasing Morning judge and commissioners morning. This is a short agenda. I've ever had Item three a see shorter. Okay. Consider and approve accepting the final preysl from our Geonison Associates Inc. for the Joe Corley detention facility, Department of Infrastructure. By the way, I asked Mark Casasult to be here today to give us an opinion or answer any questions, commissioners, if you'll have questions on this appraisal. I think we've all had problems with the income approach to value. In my opinion, it's, frankly, it's a joke. I think this appraisal will establish the fact that we're selling Joe Carly above an appraise value. And I think that's all that we have to prove to be of a sell, any kind of property in the county, that we're not selling it at a discount. We've established an appraisal with this one right right here and we need to accept it today. Are there any questions you all have for Mark on the Supraisals? Or do you want to make any comments, Mark? I'll ask a question and I'll come after. I second we accept the proposal. All right, it is motion is second. All in favor say aye. Motion passes. Thank you for coming Mark. Sorry. Interrupt your vacation. Item B, considering discuss and if appropriate, take action to approve the permission to advertise for the sale of the Jill Corley detention facility Department of Infrastructure. I move on three, I think we had a little discussion about whether we had to do a seal bid, whether we had to do a proposal and I think Mark's done a little. Yeah, what I'm getting is getting a 30-degree bill so we can do a proposal on this. I certainly recommend that in a standard street. How are we going to do all that? Commission, we talked about selling the property under section 263.007 local government code. To do so, the court has to adopt a procedure that requires publishing of notice consistent with that section and also the court must set a minimum bid amount based on the appraisal that the court just accepted. Okay. You don't have to set the minimum bid based on the appraisal as long as the appraisal are more. Right. Yeah. You're considering the appraisal in your deliberation at setting your minimum bid right well the minimum bid that that We feel is a fair bid for Joe Corley is $65 million and I would like to set that as a minimum of bid and if we can use a bid proposal Let me know you have some. I have a question. Dan, you just said you were 263 out of 7. What you're going to use is that authority. When we had talked before, what's that one word? It's that system that's able to provide written by SEALs is. It's not a or sealed proposal procedure. Okay, so you're going to choose the sealed proposal. That's my understanding. And we use the established proposal procedures that we have been placed in the purchasing. And I think that's all it needs to be stated here is that we establish purchasing procedures to advertise for the bed, however it may be, with a minimum of benefits of our meeting. We can use our established proposal procedures as long as they meet the requirements that are contained in the section. And do they? We can make sure that is. Okay. Before we go to the further, we have one citizen that is signed to speak John Bowman. Morning. Morning. Yeah. Sure, John. Morning. My name is John Bowman. I'm a resident of Woodlands My name is John Bauman. I'm a resident of Woodlands. And I'm the vice president of the Texas Patrist PAC, the Tea Party in the Woodlands area. I'm here to talk just in general about projects like the George Corley jail. It seems to me that the reason we're having this meeting today and the reason we're having this sale is because the county got into a project that should never have gotten into the first place. This is kind of an entrepreneurial effort on the part of the county to get a jail and get other people to pay for it. I don't know that anybody on the commission's court was elected because of their entrepreneurial skills. We took a lot of commercial risks in building this jail as a consequence of erroneous assumptions, representations, or having to face the sale of this jail. And whether or not we come out with a profit, I don't think that's relevant. I think the fact of the matter is these kinds of projects are not the kind of projects that taxpayers want to have the county get involved in. And so I hope that we will do a couple of things. First of all, I think accountability is very important in government. And I would like to find out who it was, what individual individuals it were that came up with the assumption that our sheriff's office would use 30% of a facility it didn't need. That our sheriff's office would put its prisoners into a jail that would be supervised by other people. And I have tremendous, tremendous respect for our sheriff. It's a very responsible, wonderful man. And I don't believe that the sheriff would be comfortable turning over prisoners that he was responsible for To be incarcerated by three parties. So I think the whole assumption for 30% Was wrong It was never realistic and I like to know where that came from and I think the individual or individuals that came up to that Should be held accountable Secondly, I'd like to see that should be held accountable. Secondly, I'd like to see procedures be put in place that would ensure that this kind of thing would never happen before. We have three different ventures, including the jail, that are like this. One is the one you're going to be talking about in the executive session right after this, which is mental health facility, and the other is the forensic center. All built with the idea that we can get through parties to help pay for the cost of these facilities they all have different arms and legs are different I'm not saying they're all in this exact same business plan but they're all commercial efforts that include county in one way or another in taking commercial risk to pay for them I'd like I don't think that's what we should be doing. I believe in limited government. And I don't believe this is an example of limited government. And I believe all of you are conservatives. I think all of you would describe, I believe you should describe to the idea of limited government. This doesn't fall within those parameters. So I'd like to see procedures put in place that this won't happen again. Thirdly, I'd like to see an audit that really tells the taxpayers gives transparencies what all these facilities have cost us and how well they've worked out. And I think that we deserve that as taxpayers. So that's all I have to say. I'd be happy to answer any questions. Then make one comment, John, on the Forensic Center that is clearly a function of county or city governments all over the nation. That is a function that we had to do the Harris County situation did not work out. We were having to transport bodies to Dallas, Texas. It's working out very, very well. And so I did disagree on the Frenzy Center for sure. Okay, I think you're entitled to disagree, but I think that the fact the matter is that we built the Fresno Center larger than we needed to so that we could get other counties to help us pay for it. And so we were taking a commercial risk that the assumptions that the other counties would do that would come through. So we're making really an entrepreneurial investment here to the extent we build something larger than what we need. Sometimes that's going to work for us, sometimes it isn't, but it's still going to, the risk is still there. And I don't believe that as a taxpayer and as a voter in this county, that's what I've hired this court to do. I don't think most taxpayers understand this as part of what the court is doing. I understand it in the context of building roads that we need for the future. I understand it in the context of building an airport, which is a different kind of infrastructure thing. This is a whole different area. And in this particular area, I think we need to have discussion about it, whether it's appropriate or not, but I personally don't believe it is. And I welcome the opportunity to have a wider discussion about the subject. John, first of all, thank you for coming today and expressing your concerns. And I think that the concerns that you've addressed are a concern to many and there's certainly a concern of mine. I was not on the court at the time when these decisions were made and there were a lot of counties, a lot of governments that got into building these prisons or these jails for various and different reasons. And looking back, I think it's hard to find true success stories. And some of the comments that you brought up are valid. And I too would like to see somebody address the 30% issue that's gotten us into the trouble that we are in. In my opinion, based on a lot of the research I've done, and I think I've read just about every article I can find pertaining to the Corley Unit and a lot of the procurement paperwork that exists around into projects, it would seem that with this, and especially the mental health facility that was built, there was a certain urgency to get these done quickly. And I want to make certain that we avoid the same urgency on the way out of either one of these two facilities. A question I think should be addressed is based on an article in the Eucon Chronicle April 20, 2009, because of the tax exempt status of these particular bonds over 20 years, it looks like the county would save around $5 million by utilizing these. And what I think we need to study carefully and miss Martin, perhaps you can add some light here. I believe the payoff on the Joe Corley facility somewhere around $38 million without a prepayment penalty that may or may not exist somewhere around $7 million. Are you prepared or do you have numbers with you today on what the payoff is? The payoff is a little over $38 million. It's close to $38.2. I'm aware of no prepayment penalty. I did check with our financial advisors on that. Does anyone have any knowledge to there be a prepayment penalty? Yes, there is. Absolutely. Of roughly $7 million. The payment, if you would have said, the lending sometime between now and May 15th 2011, you'll be required to defeat the debt. You can't pay it off. You must have been defeated because you have a holiday in there. You run the 2017. Your total amount to pay is $45.1 million. And so one of the things I think we need to strongly consider is if we're looking at $7 million for defesment and we are supposed to save about $5 million if this tax exempt status, have we done our due diligence to see what the effect would be if we were to just go to a taxable bond instead and could we hold on to this facility because Sheriff I believe that as our county grows and our population increases as much as we'd like to Just attract good guys. I think we'll attract some bad ones and Looking out over 20 years, I think that the facility that you currently run may not have the space that the next sheriff would need to incarcerate these citizens. So I don't want us to make another short-sighted decision to sell this if there's a way for us to one clearly prove that we are going to need this in the future and to demonstrate that this really our only option is to actually sell this facility. Mr. Bauman, I think if you were to put in a public information request for information on what we paid and what we owed, that that would be provided to you. I don't think that that would be an issue. And if anybody here today has any information on where this, who agreed to this 30% utilization rate, I think it'd be helpful for the public to know. The information that was used for the assumptions in order to determine whether or not the Montgomery County has backed a project that would be viable, came from a combination of places. One was a report that was sent out by the Commission on General Sanders with the feasibility study that was received by the council. The head of the new population was over a period of time. Any other information dated that was providing out of the Sheriff's Department on the trend related to the number of persons who were being incarcerated at what was the whole of that information from the youth. But did the sheriff or anyone actually say that they would agree to use 30% of this facility for county inmates? A great use at what point? Well, I believe within five years, we were supposed to move 30% of that facility. There was not an agreement necessary to do that. What were we looking at where it functioned about need? Would we need up to 30% within a certain period of time? That's what had to be proven to the internal revenue. So whether or not the commissioners in the sheriff who obviously by statute controls the use of the facility, whether or not they could agree on a mechanism or procedure as to how the blend of the population had to be worked out among them. We were dealing with need on those assumptions. Sheriff, let me ask you this. How long will your existing jail take us in years? I don't know if your jail count is down now. What do we got? 1270 something beds. We're 900 and something. I think there was a couple of things that probably affected this growth pattern at the jail commission and Sheriff's Office came up with at that We only had 1,000 beds. Our growth at that time was approaching double digits every year. Nobody foresaw the downturn that we saw in growth from 2008 forward. Plus we've done some things to add a couple of hundred beds or 275, I think, to the existing jail, which those two things combined had an effect on whether we use Joe Carlier or not. And those were things that... Well, there's been a big effort, of course, to try to get people out of that jail as quickly as possible. There's been a lot of things affect the jail population. And, anyway, that's kind of where that came from. But. So I'm not opposed in theory for the county to look at alternatives for the Joe Corley facility. If we built a facility that we're not going to need, perhaps we should relinquish it. If we have a facility that we have already built and we are utilizing taxpayer dollars to pay for now, if we see a need for this facility in the future, I think it would be incumbent upon us to try to hold on to this facility for future needs. If it's going to be something that we're going to need, I was a little bit confused on the urgency is to act on this today. You know what I'm confused on? Because I've been there 15 years. I think our county is in greatest shape as anybody. And for the last year we've had all these people from the Tea Party come up here and tell us what kind of bad shape we're in. You know, And for the last year, we've had all these people from the Tea Party come up here and tell us what kind of bad shape we're in. You know, I think that if you'll look at it, we've lowered taxes. What, in the 14 years I've been here, probably two cents. Got more in this county than any other county I've asked. What I'm confused about is why we have done such a bad job starting the middle of last year. I don't think anybody- I don't think anybody said that anyone's done a bad job. I think that as elected officials, it's our duty to always make certain that we are representing our constituency in the most effective manner and doing so in a physically responsible way. And I just caution us to not rush to sell a facility that we may need. How we got here doesn't really matter. I wasn't here. There's an obvious slow down in the need for the jail. I think if we sell this facility and put it on the tax rolls, we use whatever income we receive as a profit and put it into a sinking fund. Thinking fund, we're prepared for future growth at that point. I think we've put ourselves in a great position. On the subject, we should not want to give consideration to two other factors. One being that back in July 2012 and your request, we did do financial estimates and projections that to what shape you would be in, if in fact you refinance that facility would tax the will there, you would begin to incur a negative cash flow from day one. Taxable refinancing as of July 2012 based on the makeup and the population and the trends in that particular facility was allowed you to go into a negative cash flow which means you have to dip in the contingency to actually pay the operations and finish paying the new debt. The second factor is that as a blind man, personally speaking, because the question everybody has on their mind, remember when you made your assumptions back to the national community, and that's actually that death. The assumption for based on certain time frame of needing that facility from a government county youth, we don't need that facility now from Montgomery County Youth. And right now we don't have the data available to say that we're going to need it in the near future. You were at five, August of 2012, by your General Counsel for this project, who is your tax counsel for this project. If you run the risk of having the internal revenue service, deny your tax exempt status on that bond, which in turn will cause a domino effect among your bond holder and among the general public. It can erode the credibility of your operation. It can also cause your bond holder on this facility, some legal recourse against you. Your tax council gave you that advice in August of 2012. We did the financial models that your tax council asked for. We came to the conclusion that if you're willing to put additional revenue out of the contingency fund into the operation of this facility, then you could refinance a taxable debt and hold on to it an alleviate IRS concerns that would crop up and they will crop up probably on the anniversary of the fifth year, which is August of 2013. So those are the factors that I think you need to keep at the front of your mind as you're considering whether or not the count is in time and whether or not there's a legitimate reason to say. How much is that facility cost us Linda? When you say cost us how much did it cost us to build? No how much has how we've taken out of the county taxpayers money? Nothing, nothing. We make money. We make money. What I thought. Oh, you have realized a little over a $2 million positive cash was in 15 months of operation. Okay, and Lizzie's element, I mean, this this, say this is a problem. We have a great jail we can either use or we can sell and make a 10 million dollar profit. I don't see that as a problem. I see that as a very, very positive aspect for the taxpayers of this county. I believe we have a motion in a second. that correct? Yes. My motion. Second. Any further discussion? On favor of the CEO? Ha ha. About your post. A post. Okay. Alrighty. We need to recess for exacting session under order order of 551.072. All right, let's bring the court back to order, please. There's no action necessary from the executive session. Any other discussion before we adjourn? A little later, adjourn. I'll have a favor to see out. Ah, ah.