The Board of Supervisors voted this week on the broad repayment terms of the county’s $7 million loan from Measure B.
In November, the board voted unanimously to borrow the money from the mental health tax fund to build the behavioral health wing of the new jail. Costs of the facility have far exceeded the original $25 million state grant, with projected costs now past $44 million. Sheriff Matt Kendall reported that construction began on the jail about ten days ago, and is scheduled to be complete by fall of 2025. The money the county borrowed from Measure B is currently in the state-regulated treasury pool, earning 2% interest.
They are the funds of last resort, meaning they will be used only as necessary, an arrangement Supervisor Glenn McGourty compared to being more like a line of credit than a loan.
The county does not have the money to repay Measure B at this time. But CEO Darcie Antle informed the board that the pension obligation bonds will be paid off in Fiscal Year 26/27, which would make $8 million a year available for other purposes.
Acting Auditor Controller Treasurer Tax Collector Sarah Pierce proposed paying off the loan in ten years, starting after the jail construction is complete, at 2.5% interest. Supervisor Ted Williams disputed the interest rate, saying he thought it would be appropriate to pay more to make Measure B whole. “What Measure B could accomplish today for $7 million, it will not be able to accomplish in ten years for $8 million,” he declared. “The loss of buying power over the length of this loan doesn’t leave Measure B whole even when we add the 2.5% interest.”
Supervisor Dan Gjerde responded with a burst of optimism about future building projects in the absence of Janelle Rau, the former head of the General Services Agency. “We have new people taking over that department,” he said. “It is possible that in a couple years they’ll be so much better at managing projects that projects will come in on budget and on schedule.”
Supervisor John Hachak was concerned about the million dollars in interest that the county would pay over ten years at the proposed rate, saying that the county doesn’t have the money to pay a higher rate. “If we tripled that number to three million dollars, where would we get that money?” he asked Williams. “You’ve talked about us going bankrupt at times. I don’t see us cutting more services to people who need them.”
Gjerde proposed the terms of the resolution describing the repayment plan, which the board will vote on when it comes before them in its fully fleshed-out form. The resolution should indicate that “It is the board’s intent to pay off the loan in full…once the pension obligation bonds are paid off, by redirecting general fund dollars…so it would only be a three-year loan.” The county cannot use non-general fund money to pay off the loan from Measure B.
The board voted 4-1, with WIlliams dissenting, to accept Gjerde’s proposal.
