City returns $1 million to Corrections
It was tough to do, but last week, the city of Madras transferred $1 million back to the Oregon Department of Corrections' coffers -- at least temporarily.
The money was part of a $2.7 million payment the Department of Corrections made to the city of Madras in 2002, as a portion of the state's share of the costs of building the South Wastewater Treatment Facility.
"The $2.7 million was the system buy-in cost related to how much of the existing sewer system the Department of Corrections would utilize," said City Administrator Mike Morgan. It was a first payment on an $8.5 million sewer contract.
The DOC asked for the money back to use for continued work on the prison's design and engineering, according to Bobbi Burton, community development program manager for the DOC. "When we halted the process, it wasn't completed," she said on Monday.
The DOC has not yet received funding approval for the prison from the Oregon Legislature, and needs the $1 million to use until state funds can be released in July.
When the city received the $2.7 million, back in 2002, it turned around and spent $1.3 million to purchase 620 acres on the east side of Madras, near the Jefferson County Middle School, to use for future dispersal of treated effluent.
"We spent about $1.3 million on the actual purchase, and have encumbered, or otherwise obligated, an additional $400,000 on outstanding expenses for engineering, design work, and legal services that will go on between now and June 30," said Morgan.
Because of a statewide budget crisis, the prison project was postponed in late September of 2002, just a short time before the scheduled groundbreaking.
The first time the DOC asked the city to return the full $2.7 million, in February of 2003, the city refused, since a large portion of it had already been spent.
"This time, we're agreeing to loan them $1 million back so they can continue engineering on the project," said Mayor Rick Allen. "That engineering plays a key role in how we construct the new J Street, which will be going out to bid this spring."
The J Street extension project, from McTaggart to Grizzly, and from Grizzly to City View, needs to accommodate the infrastructure needed for the future prison, he explained, noting that after the road is complete, the city doesn't want to have to tear it up to put pipes under it.
By completing the engineering on schedule, Allen added, it allows the prison to start construction this summer, and helps the city with the J Street project.
The doubling of the proposed minimum security prison from 432 to 864 beds, along with the 1,240-bed medium security prison, increased the total size of the Madras facility from 1,672 beds to 2,104 beds.
"The facility is larger, and costs have gone up," said Morgan, who expects that the DOC's new cap for its share of the sewer treatment costs will be about $9.4 million, plus about $2.5 million for pretreatment costs.
"In addition to all of these costs, the Department of Corrections has to pay for the design and construction of a sewer main from the prison to the treatment plant," he said. "The DOC has been very willing to step up to the table and pay their share."
For the next biennium, from 2005 to 2007, he anticipates that the city will spend about $9.5 million on wastewater treatment.
Those costs include: wiring and infrastructure, putting in pumping lines, constructing holding ponds, and devising a method for taking the treated effluent out of the holding ponds to use for irrigation.
Currently, the South Wastewater Treatment Facility, on Grizzly Road, which was built for temporary storage, is being used to store treated effluent. That will change when new treatment facilities are built.
"Upon funding of the prison, but no later than Aug. 30, (the DOC) will return the $1 million, plus an additional sum equal to the increased impact of the prison. I would guess we'll get back between $1.3 and $1.5 million," Morgan estimated.
"The city negotiated a darn good deal in the past, and we're going to expand upon the principles of that," he said.
PAC meetingAt last week's prison advisory committee (PAC) meeting, Bobbi Burton reported that the Oregon Legislature is back in session as of Jan. 10.
The DOC must go before the Legislature to get approval to go ahead with its planned prison projects, including the Madras facility.
"The DOC has been identified to become the second agency to give a budget presentation," said Burton, who expects the presentation will take place in early February.
"When we do our budget presentation, we will request that they make an early decision on the funding for Madras, so that we can take advantage of the appropriate construction seasons and meet the department's needs for beds," she said.
Under current projections, the DOC will need to house an additional 800 inmates by the time the minimum security facility is completed in October of 2006.
"We do have 400 temporary and emergency beds in our existing system," Burton pointed out, "and we're using all of them and renting beds from counties."
The DOC's budget lists a total project cost of $193 million for the Madras facility. "Our budget includes full construction of the Madras prison -- both minimum and medium," she said.
Burton expects the DOC to have an answer from the Legislature soon. "Part of our request is -- to meet the schedule -- we need to do the excavation work in March or April," she said.
The next PAC meeting will be Tuesday, Feb. 15, at 7 p.m. in the County Commission's meeting room in the Jefferson County Courthouse Annex.