Jail bonds languish in Oklahoma County amid uncertainty about location

Oklahoma County was successful in getting voters to approve bonds to build a new jail to replace its troubled detention facility, but the question of where to locate it has stirred controversy and put debt issuance on hold.

The county aims to replace its 13-story detention center in Oklahoma City, which opened in 1991, with a new facility that would have room for medical and mental health treatment.

Its board of commissioners on Monday approved up to $5 million to buy land in Oklahoma City for the project in a 2-1 vote with expectations of initially building a mental health facility there funded with $50 million in soon-to-expire American Rescue Plan Act money.

Finding a site for the bond-financed replacement for the troubled Oklahoma County Detention Center in downtown Oklahoma City has delayed further issuance of $260 million of general obligation debt approved by voters in 2022 after an initial $45 million sale last year.

Oklahoma County Detention Center

Oklahoma City council members on May 21 overwhelmingly voted to deny a special permit allowing a jail on that site near neighboring Del City, with Mayor David Holt casting the sole vote in favor of the permit.

“That’s probably got to be sorted out in the courts if we decide to go with that site,” County Board Chair Brian Maughan told The Bond Buyer last week. “For now, at least we’re going forward to build a mental health facility.” 

Ahead of the county board vote, Del City Mayor Floyd Eason said residents have advocated for the jail to remain in downtown Oklahoma City.

“You’re not listening to the constituents,” he told the board.

Other speakers raised allegations of corruption, offered an alternative site, predicted litigation, or pushed for renovating the current jail. People’s Council for Justice Reform, which has been fighting the county’s jail plan, said in a May 30 statement it continues “to believe that the (Board of County Commissioners) has moved forward with no detailed, specified plan as to how much the jail will cost, where it will be built, who will have oversight of the mental health facility, and how much it will cost to fund operations of both the jail and mental health facility.”

The ultimate cost of the project, which had been projected at $316 million, will depend on where it is located and inflationary impacts, according to Maughan. 

“I would expect whatever we do we’re going to have to build in phases as we can afford it,” he said. 

Despite objections over the project’s cost and the need for more restorative justice measures instead of incarceration, the county commission placed $260 million of general obligation bonds on the June 28, 2022, ballot. The measure passed with 59.3% of the vote. 

The county of about 800,000 residents, Oklahoma’s largest, sold $45 million of the authorized debt in 2023 in a deal structured with serial maturities between 2025 and 2033.

Now the clock is ticking to spend 85% of the proceeds from that bond sale within three years, Maughan said, adding that some of it was used to pay for architectural work and site drilling. 

As for issuing the remainder of the voter-authorized bonds, Maughan said that will happen “whenever we find the site that we know we can for sure build on.”

Problems at the jail are also fueling the need to move forward with a new facility. 

“We’ve been under the gun with the Department of Justice for quite some time,” Maughan said. “The pressure is on for sure.”

Under a 2009 memorandum of understanding with the U.S. Department of Justice, the county agreed to take steps to improve conditions at the jail with the expectation that in four years the facility would be renovated, or efforts would begin to replace or expand it.

In 2008, the DOJ reported unsafe, overcrowded, and unsanitary conditions at the jail, as well as inadequate healthcare and mental healthcare services. The Oklahoma County Jail Trust took over management of the facility in 2020 and made some improvements.

A March 2023 report by an Oklahoma multicounty grand jury convened for an investigation into the jail’s operation recommended the trust’s Oklahoma County Correctional Justice Authority self-terminate with the governor’s approval and the facility’s supervision be returned to the county sheriff. It cited dozens of inmate deaths, as well as health and financial concerns.

The report, which did not recommend closing the jail, cited the passage of bonds for a new facility, noting that the grand jury believed “that some of the problems that the (detention center) has encountered are directly correlated to a poor jail design and a facility that has not served the community adequately throughout its attenuated life span.”

Local jails held 663,100 inmates at 2022’s midpoint, 4% more than during the same period in 2021, the U.S. Bureau of Justice Statistics reported in December. There were about 3,000 publicly run local jails as of 2019 with counties accounting for the lion’s share of the facilities.

Some 500 miles south of Oklahoma City, nearly $153 million of tax-exempt bonds are scheduled to price this week, 10 years after Chambers County, Texas, began pursuing a new jail and justice center.

An October report by the Vera Institute of Justice, which advocates for “fair for all” justice and immigration systems, examined the jail’s need and cost.

Bea Halbach-Singh, a senior research associate at the institute, said county officials took steps in 2016 and 2017 to hold GO bond elections for the project, but later backed away from seeking voter approval in the wake of some public opposition to the cost. 

Instead, the county of 46,000 east of Houston created the non-profit Chambers County Justice Center Public Facilities Corporation, which has no taxing power, to issue lease revenue bonds that will be repaid through county budget appropriations. County officials did not respond to emailed questions.

S&P Global Ratings said the AA-minus rating with a stable outlook for the debt is one notch below the county’s GO rating because the county’s lease rental payments to the corporation are subject to annual appropriation. 

The bonds in the deal led by Piper Sandler carry serial maturities from 2025 through 2055 along with a term bond, according to the preliminary official statement.

The proceeds will fund a $79 million,104,000-square foot, one-story jail that could house 336 inmates, as well as a justice center annex with four additional courtrooms, and a law enforcement center with a crime lab and expanded evidence processing and storage facilities, according to an online investor presentation about the deal. The entire project, slated to be built in the county seat of Anahuac, is estimated to cost $166 million, excluding financing costs. 

Vera analysts said they’ve seen structures using specially created non-profit issuers for jail financings in other places.

“In reality there’s a lot communities can do to reduce their jail populations and sort of not have to build a new facility,” Halbach-Singh said, pointing to options like incarcerating fewer people pretrial, addressing high bail amounts that are being set, or creating a formal pretrial release mechanism.

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