No firm decision has yet been made by the Clay County Commission.
It appears, however, that it likely will need to pursue an opt-out of the state property tax freeze to the tune of approximately $600,000 annually to cover anticipated cost overruns for housing Clay County inmates in other area county jails.
Clay County Sheriff Andy Howe told commissioners at a Thursday, June 10 meeting that he planned to begin operating the Clay County Jail as a holding facility in which inmates would be housed for no more than 72 hours.
Prisoners that have to be in custody longer than that will be transported to area jails, such as the Union County Jail in Elk Point, the Yankton County Jail in Yankton, the Minnehaha County Jail in Sioux Falls and nearby county jails in Nebraska.
Howe’s news last week came two days after Clay County voters overwhelmingly rejected a $41 million bond issue sought by the county to finance the construction of a new jail, a new courthouse and a new public safety center at a site away from the current, century-old Clay County Courthouse.
This week, the sheriff provided commissioners with a better idea of how housing inmates out of county will affect the budget for operating the local jail.
“In 2022, especially if we average 20 inmates per day, which is realistic because that’s about where we were in 2019, if I figure $85 per day which is about halfway between a Union County hold and a Minnehaha County hold, that would be $620,500. That’s what it would cost us,” Howe said at the commissioners Tuesday, June 15 meeting. “I hope that Union County can continue to take our inmates. That’s a $20 per day per inmate savings. If we can hold all 20 at a time in Union County, we’d be at $474,500.”
The sheriff suggested the county brace for cost overruns ranging from roughly $500,000 to $600,000.
“That’s presuming that we’re going to hold that daily average population,” Howe said. “I think we have 11 boarded out right now with three in our jail waiting for a determination of where they’re going to go. I think it’s definitely reasonable that we’re going to be in that 15 to 20 range (of number of inmates daily) even by the end of this year, so I think we should plan for an average daily population of 20 for the next year.
That means, he said, the county should look at increasing the inmate budget portion of its 2022 budget by $620,500.
Howe budgeted $70,000 for boarding prisoners in 2021 and $40,000 of that still remains.
“That will be gone by August,” he said.
Clay County Commission Chairman Travis Mockler asked him how much boarding will cost for the remainder of this year, now the operation of the local jail has changed.
“For the rest of this year, I’m speculating, and this is based on an average daily population of 15 held in Union County at their rate, that I will run short to the amount of $138,000,” Howe said. “I’m estimating our cost for the rest of this year, holding 15 inmates per day in Union County, to be about $177,900 and we have $40,000 left in that line as we sit here right now, so that’s going to leave me short $137,792 … so $138,000 is what I expect to be short in 2021.”
Commissioner Mike Manning asked the sheriff if the county will be experiencing any savings in its housing budget since it will be housing inmates in the Clay County Jail for a shorter amount of time.
Howe said he budgets $57,000 annually for prisoner meals and he hasn’t quite spent half of that amount.
“We have $39,000 left in that right now. I haven’t paid May’s meals yet … I’m going to say that we’ll probably be spending hundreds of dollars per month feeding inmates as opposed to thousands,” he said. “I would speculate we’ll be able to provide $25,000 to $30,000 of that to this cost (of the 2021 housing budget) so then we’re looking at $118,000 or maybe $110,000 for this year and I would adjust that line in next year’s budget, as well.”
Clay County in recent years has received meal bids from Hy-Vee and Pizza Ranch. Should the smaller amount that the county will be spending on meals discourage bidders in the future, Howe said they county likely will purchase frozen dinners to feed prisoners.
The sheriff said he is making sure there are eight sets of restraints for the van the county uses to transport prisoners. That will likely cost approximately $1,000, a one-time expense that Howe said he should be able to meet in his current budget.
“It looks to me like if we’re going to opt out, we better plan on opting out for $600,000, just to be safe,” Commissioner Manning said. He added that he wouldn’t mind looking at trimming the county’s budget for non-essential items in the coming year to help meet the upcoming costs for prison transport and housing.
Opting out is a decision the commissioners, at best, would make by July 1 when it adopts its next fiscal year budget.
“I think these numbers are defensible and I think they also give us an idea of where we’re going,” Howe said. “In the long term, we should be expecting $1 million a year to be going out of county. I’m not talking 30 years. Long before that, I think we’ll be sending $1 million per year out of county if we don’t get a jail built.”
Turner County doesn’t have a jail and doesn’t plan to construct one. Should Clay County build a new jail, the sheriff believes it can count on housing Turner County inmates to help offset the costs of the new facility.
“That isn’t to say that we’re building it for that purpose, but I don’t feel too uncomfortable, based on the long-term relationship we’ve had with Turner County, to continue to serve Turner County and help us out in the process,” Howe said. “I think that we can definitely project some revenue there and I can give you some numbers when that time comes.”
“We have a lot to think about in the next … couple weeks,” Chairman Mockler said.
Manning thanked Auditor Carri Crum for budget and opt out information she provided commissioners at Tuesday’s meeting.
“That at least gives you some ideas for the different routes you can take,” she told commissioners. “I think definitely the opt out is the cleanest route.”
Commissioner Betty Smith made some rough calculations during Tuesday’s meeting.
“Without counting on any other revenue or cutting anything else, it looks like the mill rate increase, if we were to add a total of $600,000 to the budget, would be like about .54,” she said.
“That sounds about right, “Crum said.
“This is a rough, back of the envelope calculation,” Smith said, “and if we can cut other places, or raise revenue other places, then we might be able to get that down to half a mil.”
To “opt out” means a taxing entity needs more monies from property taxes than it is allowed by the tax limitations, according to the South Dakota Department of Revenue. The limitation allows for taxes to increase over taxes payable in the preceding year by the CPI and growth. The CPI for taxes payable in 2022 has been set at 1.2 percent.
Therefore, total increase allowed through the limitation would be 1.2 percent plus percent increase due to growth. (example: If growth is 3.1 percent…. then 1.2 percent (CPI) + 3.1 percent (growth) would allow a maximum increase of 4.3 percent to the previous year’s taxes received).
Official growth numbers are not available from the County Auditor until AFTER the Department of Revenue certifies values, which is at the end of August, according to the state Department of Revenue. Regardless of the percent increase allowed or opt out amount, taxing entities (except school general fund) CANNOT exceed statute levy limitations.
South Dakota state law allows opt out decisions made by a governing body to be referred to a vote of the public by either a resolution of the governing body of the taxing district or by a petition signed by at least five percent of the registered voters in the taxing district and filed with the respective governing body within 20 days of the first publication of the decision.
Should the county opt out and should citizens refer that decision to a public vote, the referendum election shall be held on or before Oct. 1 preceding the year the taxes are payable.