Press "Enter" to skip to content

Nelson supervisors back financing for Charlottesville regional jail renovation

Renovations will come in the near future to the Albemarle-Charlottesville Regional Jail after the Nelson County Board of Supervisors passed a resolution during its November meeting.

The board was presented with a resolution to approve the Albemarle-Charlottesville Regional Jail Authority issuance for interim financing of the improvements in an amount not to exceed $4.5 million.

The current cost estimate for the entire project, provided by Moseley Architects, is about $49 million, as there was no change from the January and February presentation to other localities, according to Roland Kooch, senior vice president at Davenport Public Finance.

In terms of the debt service regarding the renovation, the regional jail authority will take it on, Superintendent Col. Martin Kumer explained.

The authority was adopted by the governing bodies of Albemarle County, the city of Charlottesville and Nelson County for the purpose of developing regional jail facilities, particularly the regional joint security complex located at 1600 Avon St.

Kooch said the commonwealth has awarded the authority 25% of the overall improvement costs.

According to the presentation, in the commonwealth of Virginia, regional jails are eligible for a 25% reimbursement of eligible costs for major capital projects.

The authority’s reimbursement request was approved by the board of local and regional jails and by the General Assembly in its 2023 session as a part of the delayed budget approval.

The interim financing agreement is set to provide an amount that would fund predevelopment costs such as architectural, engineering and other related costs in order to prepare the authority to bid the project.

For the overall financing plan of the project, Kooch mentioned two parts: interim financing and permanent financing or grant anticipation note.

The interim financing provides only what is necessary to complete preliminary design and engineering costs so the project can be put out to bid.

After bids are received and total project costs are known, the permanent financing is undertaken to fully fund project costs not eligible for the 25% reimbursement and permanently finance the interim financing, which is the second part.

Simultaneously, a grant anticipation note is undertaken to fund project costs eligible for the 25% reimbursement. It will be paid off prior to maturity with funds provided by the reimbursement once the project is complete, Kooch said.

The actual cost will not be known until the final design has been approved by the board authority and bids have been received, Kooch added.

The jail authority will take on the debt for the project.

Projected payments on new debt service are based on inmate days or usage of the jail, per the amended service agreement.

Nelson County is responsible to pay its percentage share based on a five-year average of its utilization, which is the county’s inmate days as a percentage of the total inmate days, County Administrator Candy McGarry said.

Over the life of the financing from 2024 to 2052, that percentage for the county is about 15%, which equates to an estimated $10.5 million, she added.

Additionally, the projected allocation based on fiscal year 2024 estimates for Albemarle County is about 45% and for Charlottesville about 40%.

The grant anticipation note would fund roughly 25% of eligible project costs, and one half of the interest costs eligible for reimbursement by the commonwealth.

Additionally, permanent bonds would fund remaining project costs and permanently finance the 2023 bond anticipation note:

A three-year term with a 4.5% planning interest rate, borrowing $14.4 million from the 2025 grant anticipation note.

And a 27-year term with a 5.5% planning interest rate with two years interest only and 25 years of level debt service, borrowing $34.6 million from the private bonds.

Moving forward, the authority plans to close on interim financing in December and initiate the design phase with community and stakeholder engagement starting in February for a year.

The authority board plans to approve the final design in March 2025 and advertise for construction bids.

The construction process is expected to begin in June 2025 with a planned completion in June 2027.

The Nelson board unanimously decided to enter into the interim financing agreement.


Be First to Comment

    Leave a Reply

    Your email address will not be published. Required fields are marked *