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Consternation, compromise and consensus

By Chris Umscheid
Solon Economist
IOWA CITY– The Johnson County Board of Supervisors reached an unofficial agreement last Wednesday, March 7, to put a $46.8 million bond issue on the ballot in November to fund the construction of a new Johnson County justice center/jail.
The move– and a markedly civil tone– came in stark contrast to a series of contentious meetings in the days and week prior.
The center, discussed for over a decade, would replace the current outdated and undersized county jail, built in the 1970s and designed to house 46 inmates. The average population has increased to around 170, leading to overcrowding and necessitating housing prisoners in other counties’ jails.
The Johnson County supervisors looked at a bond issue in 2008, but several factors including record flooding, the Joint Emergency Communications Center (JECC) and the national economic downturn all combined to put the issue hold. Last year, the board began a preliminary design process utilizing land behind the existing courthouse between South Capitol and South Clinton streets in Iowa City for a five-level facility.
In March of last year, the project was estimated at $48.8 million and in August the board specified the total cost of phase one of the construction was not to exceed $39 million. The $39 million figure was originally deemed to be the maximum the board members wanted to bond for, and the most they felt voters would approve.
Since that time, the full cost of the complete project has risen to $53.19 million. Supervisor Terrence Neuzil said the board agreed to reduce the size and scope of the full cost to $48.12 million by eliminating some parts of the project.
“We were told, ‘if you want to do it right,’ it would be at least a $48 million project” he added.
Neuzil also said all five Board members agreed to consider using all of the County’s Reserves Fund, estimated at the time to be $5.2 million, to reduce the voter’s bond to $42.9 million.
Neuzil found himself in the spotlight and in direct opposition with his fellow supervisors as he argued for a lower bond amount.
“My goal was to put ‘more skin’ into the process in an effort to show to taxpayers that our Board would sacrifice and tighten our belt on future priorities, just as we are asking residents to tighten their belt in support of a bond referendum,” Neuzil said in a March 6 press release in response to Supervisor Rod Sullivan’s weekly newsletter criticizing Neuzil and accusing him of not being willing to compromise. Neuzil argued that while he wanted to stick to the original $39 million, he was willing to go to a $40.9 million bond while looking for other ways to put county dollars into the project.
Supervisor Janelle Rettig had previously stated she would not support a bond referendum unless the board was unanimous in its decision, but Neuzil, speaking before Wednesday’s meeting, disagreed, saying the board does not always have a 5-0 vote “and things still move forward.” He said it is a good thing when he and his fellow supervisors are in agreement, but felt it isn’t absolutely necessary.
Revised numbers from County Treasurer Tom Kriz at Wednesday’s meeting led to a different approach. Kriz reported the county only has $1.3 million in unassigned capital project funding available instead of the $5.2 million the supervisors thought they had.
It is possible the county may find additional money to apply to the project after the current fiscal year ends in June, depending on what funds individual departments have left in their budgets after tax revenues come in.
“I’m hoping it’s less than that ($46.8 million),” Neuzil said. “I think it can be.”
“This information is different than some of the numbers we were looking at the other night,” Sullivan said. Without the $5.2 million to work with, Sullivan conceded the board is forced to look at something lower.
If ultimately approved, the new facility would include six new courtrooms, a 243-bed jail, office space for the clerk of court, county attorney, and the sheriff’s department. Plans are to continue to use the current courthouse and possibly sell the existing jail. During Wednesday’s meeting, a proposal was made to put the proceeds from the sale directly into the Justice Center. The idea generated discussion of its own, with fears that putting language on the ballot calling for it would encumber a future board to do so, regardless of what economic situation they found themselves in.
Neuzil suggested the measure could be worded to reflect that “it is this Board’s intent” to put the sale of the current jail toward the Justice Center. He called it an attempt to ensure the dollars are spent that way.
Sullivan found a problem as the language is not binding.
Also at issue was dipping into the county’s cash reserves in an effort to keep the bond amount lower. Kriz wouldn’t make a recommendation, but reminded them of board policy requiring an on-hand reserve equal to 30 percent of the tax levy. Kriz also said using the reserves could jeopardize the county’s bond rating with entities such as Moody’s. The county improved from an “AA3” rating to “AAA” in part from putting the reserve policy into place. The board would have to vote to amend the policy in order to use the reserves, but if they did, $3 million of reserve cash would be available.
With the change in numbers came a change of heart, as Sullivan noted “we left things with a $48.1 million project. We were talking about spending $5.2 million we thought we had, and bonding for the rest. Now, that’s not an option.”
Rettig spoke against amending the reserve policy, saying the Finance Committee had spent much time working to improve the bond rating.
“It’s good, it’s not as high as it should be, but it’s still good,” she said. She looked back on a time when the county did not have such a policy and paid cash for everything. Rettig said having the reserves puts Johnson County in a better position for emergencies and future bond referendums.
Kriz reminded the board that he moves $1.3 million in payroll every two weeks. Despite when tax revenue rolls in from the state, payroll still has to be met, and having cash on hand helps ensure it.
Sullivan, looking at a capacity crowd in the board’s chamber, made an exception to work session policy and asked if there were any public comments. Connie Champion, a member of the Criminal Justice Coordinating Committee (CJCC) praised the board for coming to a decision to move forward, for not dipping into the reserve fund, and for her not having to quit. Champion had said earlier in the week she would resign from the committee overseeing the design process for the justice center due to the earlier impasse.
Dwight Dobberstein, a principal with the Neumann Monsen P.C. architectural firm told the board there is much work to do before bringing in a completed preliminary design, but was hopeful to have it in time for an April 4 meeting with the CJCC. Dobberstein recommended against a November ballot, but said he also did not want to see further delay on the project. He added the firm would strive to keep the cost at or below $48.1 million.