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McLennan County One Step Closer to Private Jail?

A split-decision has allowed McLennan County to float revenue bonds to pay for a new CEC/CiviGenics prison, according to an article by Waco Tribune writer Regina Dennis. The article ("McLennan County approves sale of $49 million in bonds for new county jail," January 13) states,

McLennnan County officials approved the sale of $49 million in project revenue bonds Monday to finance a new jail on State Highway 6.

The bonds are being sold at a coupon rate of 6.625 percent. Investment banking firm Municipal Capital Markets Inc., which is handling the sale, will buy the bonds and resell them to other investors, said Executive Vice President Michael Harling.

Texas Prison Bid'ness readers may recognize Municipal Capital Markets' Harling from our July story on Willacy County's push to be home to a new family detention center. In that story, Harling, a prison-pusher whose fingers have been in many controversial private prison deals throughout the state, was defending ICE's controversial family detention policy.

In this case, according to the Waco Trib, the bond issue did not have unanimous support on the committee,

The sale was approved by a 2-to-1 vote by a three-member pricing committee appointed by the commissioners court in November to ensure that the bond rate did not exceed 6.98 percent. County Judge Jim Lewis and commissioner Ray Meadows voted for the sale. County Treasurer Bill Helton dissented, insisting that the county should not accept the first offer and that waiting 60 more days would be in the county’s favor.

Helton also took issue with the amount of bonds being sold. Originally, the bond package was for $46 million.

Harling said he did not know why the sale amount changed but said it likely was because the original price assumed a coupon rate of 6.3 percent.

The 816-bed jail will be built and operated by Community Education Centers of New Jersey. The company also is responsible for repaying the interest on the bonds using revenue generated from housing federal and state prisoners in the facility.

We'll keep you posted on developments from McLennan County. See our previous coverage of the jail issue: