McLennan County commissioners Tuesday opened proposals from two private corrections companies vying to operate the Jack Harwell Detention Center.
They also adopted a budget philosophy designed to put a tourniquet on a hemorrhaging reserve fund, caused in part by the overflowing county jail.
Commissioners and County Judge Scott Felton will meet again at 1:30 p.m. Wednesday and go into a closed, executive session to discuss a contract with Community Education Centers Inc., which operates the Harwell jail now, or its competitor, LaSalle Corrections.
New Jersey-based CEC has run the 816-bed jail since it opened in 2010, but the initial contract expires June 13.
Commissioners opened the proposals from each company Tuesday morning then immediately deferred the matter until county officials could break them down and have a chance to study them.
Felton said county officials will attempt to negotiate the best deal possible for the county after studying the proposals.
If commissioners aren’t ready to award the contract after Wednesday’s session, they have scheduled meetings, if necessary, for Thursday, Friday and Monday.
“If we don’t think the better deal is good enough, then we will try to negotiate a better one,” Felton said.
Representatives from both companies were at Tuesday’s meeting.
CEC operates in 18 states and Bermuda and provides a wide range of programs and operations, including management of jails, halfway houses, parole violator centers, work release programs, mental health programs and more.
LaSalle manages 11 facilities in Louisiana and Texas with a total inmate count of 7,500 and has offices in Ruston, La., and Dripping Springs, Texas. The Texas affiliate operates under the name LaSalle Southwest.
Commissioners closed the downtown jail in 2010 and transferred inmates to the $49 million Harwell center, built by the McLennan County Public Facility Corp.
The county formed the corporation to issue revenue bonds without creating a county debt liability.
Revenue from housing inmates at the Harwell center, including overflow inmates from the neighboring McLennan County Jail, helps to repay the bond debt.
County officials have said CEC relies too much on county inmates to fill beds at the Harwell center, especially after the county’s inmate count began to climb two years ago.
Projections have the county spending up to $6 million on overflow inmate housing this year, twice the amount budgeted.
In other action Tuesday, commissioners adopted a resolution that spells out a long-standing budget philosophy but one that never has been put in resolution form.
County Auditor Stan Chambers has warned commissioners that action needs to be taken about the county’s dwindling reserve fund, which has dropped from nearly $30 million in 2008 to $16 million last year.
The county is projected to end the budget year Sept. 30 with a $6 million deficit and will pay for it by dipping into the general fund reserves. That would cut the county’s reserve fund back to around $11 million, Chambers has warned.
Precinct 4 Commissioner Ben Perry made a motion to adopt an economic philosophy to budget fund reserves at 25 percent of projected expenditures and set a goal of three years to meet that target.
“Also, that we would agree to the definition of a balanced budget as presented by Stan Chambers,” Perry said.
Commissioners made budget cuts and raised the property tax rate by 2 cents to 48.4 cents per $100 valuation last year, but still adopted a budget with a $6.4 million deficit.
The county has had no policy on how much reserve to keep on hand, and state law doesn’t require one.
3 months of expenses
Chambers said the amount is up to commissioners, but a “rule of thumb,” and one recommended by the Texas Association of Counties, is the equivalent of three months’ operating expenses.
Currently, the projected fund balance at the end of this budget year would provide only one month and three weeks of operations.
A three-month standard would require adding $8 million to the fund balance account, not counting the $6 million deficit that must be bridged.
Commissioners have said they know that is not a realistic goal to accomplish in one year, choosing instead to make it a three-year projection.
Increasing the fund balance by 1 percent requires revenues to exceed expenditures by $759,463, according to Chambers.
Officials have said the biggest culprit in eroding the reserve fund balance is the cost of jail operations and other criminal justice-related matters.