County’s advisors: Pay-go approach could delay start of jail expansion 9-14 years

Commissioners to look at bond options again Tuesday; other resolutions on agenda will unify fire district

Doug Gebhart, left, first vice president with Davenport & Company, financial advisors, and Roger Murray, at mic, attorney partner with Murray Barnes Finister LLP, bond counsel, deliver information on a proposed bond sale for jail construction to Bulloch County commissioners during the May 6, 2025 meeting. - photo by AL HACKLE/Staff

County says — Doug Gebhart, left, first vice president with Davenport & Company, financial advisors, and Roger Murray, at mic, attorney partner with Murray Barnes Finister LLP, bond counsel, deliver information on a proposed bond sale for jail construction to Bulloch County commissioners during the May 6, 2025 meeting. - photo by AL HACKLE/Staff

Next week the Bulloch County commissioners will consider again whether to borrow $60 million through a bond sale for the jail expansion at an interest cost of $20.8 million to $24.5 million over 12 to 20 years or consider instead take a “pay-go” approach that could delay the start of construction by nine to 14 years.

In either case, the funding source would be the 1% Special Purpose Local Option Sales Tax. An 85.8% majority of Bulloch County voters in a March 18 referendum election approved a six-year extension of the SPLOST. But – with a $51 million up-front share of the revenue earmarked for the jail and the remainder of the first $138 million dedicated to other projects of the county, Statesboro, Brooklet, Portal and Register – money from at least one further six-year SPLOST referendum would be needed to pay for the Phase 1 jail project.

Presented with the interest cost projections for issuance of 12- or 20-year bonds from financial advisor Davenport & Company, the county Board of Commissioners on May 6 voted 3-2, with one commissioner absent, to table a decision until the next meeting, which will be Tuesday, May 20, at 8:30 a.m.

“I know the citizens approved this, but it was also stated that it was going to cost about $61 million to build it, and I don’t know if the citizens would have approved it if they would have saw $78 million and $84½ million. …,” Commissioner Nick Newkirk commented during the May 20 meeting. “I don’t know if they would have voted for it if they had known there was going to be a bond attached to it.”

Jail Schematic — Courtesy of Bulloch County Public Safety / This conceptual layout by the Goodwyn Mills Cawood firm in the county facilities study blocks out Phase 1 of the Bulloch County Jail expansion as a single building containing a 160-bed men’s housing unit and a 128-bed women’s housing unit, plus an outdoor recreation area.

Pay-go costs

But a “cash funding analysis” prepared by Davenport & Company suggests that a pay-as-you-go approach could delay construction of the Phase 1 jail expansion until nine to 14 years from now and, depending on the rate of inflation in construction costs, could cost more than borrowing to build sooner.

According to a summary of that analysis in a memo attached to Tuesday’s agenda, Davenport looked at two scenarios. The first scenario assumes an annual construction cost inflation rate of 2.5%; the second scenario assumes annual construction inflation of 5%. Both scenarios assume that annual SPLOST collections of almost $8.5 million ($8,496,000, according to the memo) would continue to be directed to the jail project.

“Under the first scenario,” the memo states, “construction of the project would not begin for nine years, and the total cost would be $75,029,671. Under the second scenario, construction of the project would not begin for 14 years, and the total cost would be $116,118,925.”

Tuesday’s agenda packet contains two possible resolutions for bond financing, those being slightly updated versions of the 12-year and 20-year financing resolutions that were presented and tabled May 6. The commissioners are expected to approve one of those options, or neither option if they adopt a pay-go approach.

At the previous meeting, Doug Gebhart from Davenport & Company delivered a recommendation for bonds with a 20-year term and noted that the county would retain the right to pay these off early, after 12 years, to save some on interest.

Phase 1, to construct a new jail housing unit with 160 beds for male and 128 beds for female inmates, would cost almost $61.6 million, according to a recent estimate. Phases 2 and 3, to demolish the older, neighboring Bulloch County Correctional Institution facility and build replacement and expansion buildings for 160 and 136 inmates, are projected to cost almost $39.5 million and almost $66.4 million, respectively. But only Phase 1 is being considered for financing at this time.

Countywide Fire District

Commissioners are also expected to act during their May 20 meeting to formalize the end of the long-established “Statesboro Fire Tax District” in which the county had long collected a tax and paid for the Statesboro Fire Department’s service to areas outside the city limits within five miles of Statesboro’s two fire stations. It has been one of two county fire tax districts with separate millage rates, the other being the “Rural District” – the rest of the county – from which the fire tax revenue already went to support the Bulloch County Fire Department.

After the city government rejected the county’s January proposal for a one-year 50%, then full phaseout of the intergovernmental fire service agreement, the Bulloch County Fire Department is adding equipment and hiring more firefighters to take over service to the entire former five-mile district July 1.

So, proposed resolutions awaiting Board of Commissioners approval Tuesday will end the Statesboro Fire Tax District and in effect also the Rural Fire Tax District on June 30, replacing them with a single Bulloch County Fire Tax District as of July 1.

A key passage states: “(T)here shall be and is hereby established a special district within Bulloch County consisting of the entire unincorporated area of Bulloch County and those areas of Bulloch County within the municipal limits of Brooklet, Portal, and Register, said special district to be known as the ‘Bulloch County Fire Tax District.’”

In other words, only Statesboro is excluded from that district. Statesboro will continue to be served by the Statesboro Fire Department, supported by city tax and potentially by a fire service fee the city government is considering.