Installment financing contract for Haywood jail approved
Haywood County’s jail has been running at or near capacity for years. File photo
Haywood County commissioners have taken the final financial step in the long process toward approving a jail expansion, all but assuring the project will move forward after years of delay and doubt.
On Feb. 5, commissioners held a public hearing where minor opposition to the project was heard. At the next meeting on Feb. 19, commissioners approved a non-binding set of initial findings for presentation to the Local Government Commission, which oversees local government borrowing.
Those findings included that the jail was in fact needed, and that it would be in the county’s best interest to finance the project.
Then came a special Feb. 26 workshop where commissioners pored over every detail of the project and its price tag.
During the board’s regular meeting on March 4, commissioners approved an installment contract with the Haywood County Financing Corporation, a component of county government, to finance an expansion of approximately 155 new jail beds and an integrated security system using the property as security.
In return, the corporation will execute and deliver limited obligation bonds in an amount not to exceed $28.5 million.
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On March 5, the LGC approved the county’s request to issue the bonds. Chaired by State Treasurer Dale Folwell, the LGC said in a statement that the county’s population had grown from 59,000 to 63,000 over the past 13 years.
“The need for more jail space followed, with the facility having operated at capacity for years,” it reads.
On March 13, the county will solicit bids for the financing, based on a 20-year level principal payment. In calculating the cost, County Manager Bryant Morehead said that he’d used an estimated 5% interest rate.
“I think based on the information I shared you last week, that we’re probably in good shape with our estimates based on our AA rating for these limited obligation bonds,” Morehead said. “If this was a GO [general obligation] debt, we would be AA+, which is fantastic news considering the loss of the mill. But our economy’s strong, and I think S&P [Standard & Poor, a global credit rating agency] looked favorably on that.”
According to a March 4 press release by the county, Michael Parker, an S&P credit analyst said that the rating “reflects our view of the county’s growing and diverse economy, wise management practices, long history of positive operating results, and manageable long-term liabilities that we expect will persist.”
The true interest rate won’t be known until March 13 or 14. Although the step taken on March 4 directing staff to move forward with the sale was “more formal” according to Morehead, there’s still a way to back out if the interest rate comes back as something excessive or outrageous.
If all goes well, the county will use fund balance to cover interest-only payments during the first year of the loan. The expense would be included in the upcoming fiscal year budget, which would run from July 1 through June 30, 2025.
Commissioner Terry Ramey asked Morehead about a small property tax increase to help pay for the new jail. Morehead told Ramey — who didn’t pay his own property taxes for nearly 15 years, made false statements about his taxes and still owes the county nearly $2,000 as of late February — that if an increase was to be made, it wouldn’t come until the next fiscal year’s budget, effective July 1, 2026.
Ramey was the only commissioner to vote against the public safety expenditure.
