Oklahoma County eyes phased-in construction and bond sale for jail

Oklahoma County officials are exploring a phased-in approach for a jail replacement project while they seek to supplement voter-approved bond funding that falls far short of current costs.

The county's Citizens Bond Oversight Advisory Board last week instructed the project's contractors to produce a detailed plan for phased-in construction using existing funding sources.

County voters approved $260 million of general obligation bonds in June 2022 for what was then a $316 million jail. The latest price tag of around $700 million, which will expire in September, is expected to rise further.

In 2023, the county sold $45 million of the bonds in a deal structured with serial maturities between 2025 and 2033.

Oklahoma County Engineer Stacey Trumbo said $35 million of the proceeds have been encumbered or spent, with the remaining $10 million expected to be tapped by June.

"Selling the remaining bonds is being discussed by the (county) commissioners and could be determined in the next 60 days," he said in an email, adding that a sales tax increase, which would need voter approval, is also under consideration.

A public-private partnership request for proposals the county launched last year to help finance the jail was closed with no selection made, according to Trumbo. He added that a new RFP will be issued "when activity begins again."

Raymond James, Morgan Stanley (MS), and Jefferies responded to the RFP, which listed two lease-purchase financing options ? $450 million for the jail in its entirety or $41 million for the jail's mechanical and electrical equipment. The terms called for an up to 30-year commitment and the issuance of tax-exempt and taxable fixed-rate bonds backed by the county's annual appropriation of lease rental payments.

The county aims to replace its 13-story detention center in downtown Oklahoma City ? which opened in 1991 and has been under state and federal scrutiny for health, safety, and other concerns ? with a jail that would have room for medical and mental health treatment.

Construction is underway on a mental health facility the county is funding with American Rescue Plan Act money.

The jail project faced delays when Oklahoma City last year denied a special use permit for a jail site on the city's outskirts, leading the county to file a lawsuit.

The dispute was settled by a legal opinion issued by Oklahoma Attorney General Gentner Drummond on Dec. 30. The opinion stated that while the county is not "a superior sovereign" to Oklahoma City, it has immunity from the city's zoning power over the jail site.