La Salle set to pay off detention center

La Salle County commissioners emerged from a 50-minute consultation with attorneys behind closed doors on Monday, February 26, to vote in favor of paying the remaining debt on the Regional Detention Center in Encinal, a facility that presently houses detainees of the US Marshals Service.

The decision came after Attorney Herb Bristow told elected officials that bond holders were making a discount offer on a payoff, meaning La Salle County will only be required to put forward a portion of the debt remaining on the 20-year-old detention center.

The facility has been operating at a financial loss to the county.

At the time of its construction in 2003, the detention center on Hwy 44 east of Encinal cost around $20 million and was to have earned revenues that would pay off the debt, but construction flaws and reduced occupancy levels have contributed to a checkered history.

A lawsuit filed by La Salle County against builder Hale Mills alleged that the detention center had been finished in a substandard manner, with roof leaks and equipment failures marring the facility’s profitable operation. Although the county collected a settlement from the builder, funds were continually required to make repairs to the detention center.

According to Attorney Keith Franklin, who was involved in consultations over the debt payoff this week, the county has benefited from a number of reductions in rates and dues from the bond holders. Franklin said on Monday that so-called discounts on the debt could total as much as $10 million so far, meaning La Salle County may ultimately have paid only half the original cost for the facility.

This week’s offer from the bond holders, according to Atty. Bristow at Monday’s meeting, represents a further reduction of $750,000 in the remaining debt.

As chief law enforcement officer for the county, Sheriff Anthony Zertuche is responsible for all detainees in La Salle, a position that puts him in charge of those being held at Encinal by the US Marshals. The correctional officers at the facility are La Salle County employees.

The sheriff confirmed earlier this year that many of the officers at Encinal no longer hold licenses under the Texas Commission on Law Enforcement, but added that such licensing is not required by the US Marshals Service.

Other federal agencies looking to house their inmates at county detention centers, however, may require the licensing.

The sheriff said in an interview Tuesday that he believes the buyout lifts a considerable burden from the county’s shoulders and that he hopes the commissioners’ decision marks the first step in a progressive course of profitability for the detention center.

The sheriff had granted a $5 hourly salary raise across the board for all of his staff at the facility more than a year ago, but withdrew the hike after 14 months in an attempt to stem financial losses.

The county had been making debt payments of more than $660,000 twice a year for the detention center, and revenues were lacking.

“We had to reduce expenditures,” Zertuche said on Tuesday. “We had to make a cut in pay.”

The detention facility’s staff had dropped from a high of over 120 employees to 82 now working at the site.

“Operating costs were going too high, and some months we were in the red,” the sheriff said. “This was due to the fact that the US Marshals Service was not keeping enough inmates at the detention center.”

In order to break even and meet its dues every six months, the regional detention center must hold at least 300 inmates.

La Salle County’s contract with the federal agency has been renegotiated, raising the daily rate from $65 to $85.

“It was doing outstandingly well for some time,” the sheriff said of the center’s operations and revenues. “But then the population dropped. It’s been below two hundred at times. It fluctuates daily.”

The occupancy count on Tuesday this week stood at 212 inmates.

“We had to take away the extra five dollars,” the sheriff said of his decision to reduce salaries, adding that he found it a painful move to make. “I appreciate that these employees are dedicated to La Salle County, that they have families to feed and bills to pay, but we had to do something drastic to avoid what could have been even worse. I believe we were running the risk of the facility not operating at all.”

The sheriff acknowledged this week that licensing all his correctional officers at Encinal through the Texas Commission on Law Enforcement will enable the county to open the facility to inmates from other agencies, including counties across South Texas.

Doing so, however, will require a complete separation of inmates, “sight and sound,” the sheriff said.

“Logistically, practically, that’s not easy to do in a 565-bed detention center,” Zertuche said. “Even if we have detainees from Immigration and Customs Enforcement, we would have to keep them entirely separate from US Marshals detainees.”

Atty. Franklin said he believes the buyout opportunity comes at a critical time for La Salle County.

“Did we accidentally shoot ourselves in the foot by saving money in not licensing those correctional officers and then not being able to attract contracts from other agencies? You might say that,” Franklin said on Monday. “The county made decisions related to keeping the facility open and keeping its staff employed, but ultimately it was going to cost us dearly.”

According to La Salle County Judge Leodoro Martinez III, an apparent failure by a previous county administration to secure a guarantee of occupancy at the Encinal facility has meant the county is not always assured enough revenue to pay its debt on the building. Additional funds to make up any shortfall, he said, have come from the county’s reserves.

The site of the facility in southern La Salle County was a key factor in attracting a contract with the US Marshals Service, which is required to hold its detainees at a facility within fifty miles of a federal courtroom. In Encinal’s case, the detention center is within acceptable range of courtrooms in Laredo, Webb County, where many of the detainees’ cases are heard.

Both the county judge and sheriff indicated during the past two months that the US Marshals Service has not filled the minimum 300 beds. Martinez said last week that he believes the county should have sought an occupancy contract that would have guaranteed a minimum payment equal to or greater than the equivalent of 300 inmates.

Sheriff Zertuche was quick to say on Tuesday, however, that he does not believe relations between the county and the US Marshals are strained.

“I hear people say that we are in a troubled relationship, but that’s not the case,” the sheriff said. “We work well together, and we value that relationship. There have been no issues between us. It’s just the reduced population that has been difficult.”

Martinez has indicated that he believes other counties have signed contracts with the US Marshals Service that include a minimum occupancy or payment guarantee.

The county judge joined Atty. Bristow on Monday in prompting commissioners to agree to the debt payoff.

“Some of us have been through the struggle of it for many years,” Atty. Bristow said at this week’s meeting. “The attempt was to make it self-supporting.

“It has been a tortuous history of operators,” the attorney said of those who have been contracted at the regional detention center in the past. “We have come to a point in the road where we can negotiate substantial discounts and respond to a final request to extinguish the debt.

“This puts the county in the enviable position of owning its detention center outright,” Bristow said.

Sheriff Zertuche said on Tuesday that he has advocated for such a buyout in the past.

“Looking at the numbers, it makes sense for the county to take this step,” the sheriff said. “This is the right move, and I have said before that we should look into this opportunity. When we own the facility, we can use its revenues for our own benefit.”

Now in its final two years of bond payments, La Salle County will cut ties with its debtors by paying $3.1 million, although approximately half of that payment will come from a bond reserve fund into which a portion of the facility’s revenues have been paid while the detention center was operating profitably.

“The balance of the purchase price, approximately $1.3 million, will be borrowed from the county’s general fund, to be repaid by future revenues from operations at the detention center,” Judge Martinez wrote in a prepared statement Monday night. “This way, not one penny of taxpayer funds will have ever been spent on the detention center, and instead, the county will have funded the entire purchase with operating revenues generated by the facility itself.”

The total payoff fee is less than the $3.8 million listed as remaining debt. La Salle County has until the end of this week to sign the discount offer.

“This releases the facility to the county and satisfies all the bond holders,” Atty. Bristow said, adding that he believes the agreement represents “an opportunity for the county to use past revenue to pay off the debt.”

Attys. Bristow and Franklin both conceded that the regional detention center’s low inmate occupancy has resulted in “negative cash flow” that seriously affected the county’s fund reserves.

“We are here now,” Bristow added. “It’s a happy day when a county can take over a facility without bond payments every six months.”

The March 1 deadline for accepting the offer will be followed by a June 1 payment due date.

Ratification of the payoff agreement came not only from county commissioners on Monday but also from the Public Facilities Corporation, the group responsible for issuing the original bonds and for financial decisions related to the detention center. The corporation’s board members are the current county judge and commissioners.

Both entities agreed on signing the deal unanimously after motions made by Comm. Raul Ayala, seconded by Comm. Jack Alba.

“I hope that today’s action puts to rest any concerns that the county was considering closing or selling the facility,” the judge wrote Monday. “The public can now feel reassured of our intention to see that the detention center become a revenue-generating venture that benefits the county once again.

“We have a lot of work to do to reach that goal,” Martinez added, “but I am confident that working together we will be successful.”