Napa County’s financing plan for a proposed $128 million, 304-bed replacement jail along Highway 221 near Syar quarry no longer requires a multi-million-dollar loan.
The county in 2017 contemplated taking out a $50 million loan as part of a patchwork of funding sources. This potential loan amount shrank to $20 million in 2018 and $10 million in April. Now it’s disappeared.
The Board of Supervisors last week reviewed the progress of the jail replacement project. That included reviewing potential financing sources.
“We’re in a privileged position to be able to get to this point without mortgaging the future,” Supervisor Alfredo Pedroza said.
Supervisor Brad Wagenknecht agreed.
“That was the part that was scary to me and scary to other folks, because it had interest, (which is) more than just a lost-opportunity cost,” Wagenkencht said.
Still, Pedroza noted that the county is putting $43 million in general fund money toward the jail. That’s money that the county could otherwise spend on programs for residents.
Other funding sources include a $23 million state grant, $5.3 million from the sale of the county’s Water Street property in the Oxbow district, a $3.1 million Kaiser donation and $8.8 million in tobacco master settlement agreement funds.
One reason the county can erase the loan is a continued increase in anticipated excess Educational Revenue Augmentation Fund (ERAF) money. The county could get $46 million over several years from this source for the jail.
ERAF is a complicated move made by the state during the early 1990s economic downturn that shifted partial funding of schools to local governments. Shrinking enrollment at the Napa Valley Unified School District is one factor that means more ERAF property tax money for Napa County.
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Ramos said the county’s gain through the loss of student enrollment “is as bittersweet news as could possibly be.”
The county might gain further jail funding flexibility. The planned sales of its Old Sonoma County Road property for $7.5 million and Calistoga fairgrounds for $7.1 million could provide money to replace other funding sources, if the Board of Supervisors so chooses. Both sales are in the 120-day due diligence phase.
“The money is not in the bank yet,” Pedroza cautioned.
One possible jail financing change that supervisors want to avoid is ballooning costs. Anticipated construction costs a few months ago were $8 million more than budgeted. That’s shrunk to $1 million after design development.
The county is looking for additional value engineering opportunities to close the remaining gap, Deputy Public Works Director Juan Arias said.
Napa County plans to build the new jail to replace the downtown Napa jail. Construction is to begin next year and the new jail is to open in 2022, a county report said.
The county’s jail financing picture has changed dramatically since 2016. That year, the county tried to pass the Measure Y quarter-cent sales tax to help pay for a jail. Voters rejected it.
Measure Y called for a smaller jail than the county is now building — a $103 million, 256-bed version. The downtown jail would have still been needed to provide at least some additional space.
The rise in excess ERAF property tax money since then is one reason the county is about to build a bigger, $128-million, 304-bed jail with a 28-bed health unit. It is doing so without a higher sales tax — and, as things appear now, without a loan.