Selma will honor county jail contract
Published 12:00 am Wednesday, January 14, 2004
Note to Selma’s bondholders: the city will keep its financial promises.
The Selma City Council made that decision with a 6-to-3 vote at its Monday meeting after hearing from Michael Cochran, a SouthTrust Securities Corporation representative. The council chose to honor its jail contract with Dallas County, though it will continue attempts to renegotiate it. Council members Jean Martin, Nancy Sewell, Sam Randolph, Bennie Ruth Crenshaw, James Durry and Council President George Evans voted in favor. Council members Glenn Sexton, Rita Sims Franklin and B.L. Tucker opposed.
At the council’s Oct. 1 meeting Martin motioned that the city give notice it would terminate the jail contract and attempt renegotiations. Sexton, Franklin, Sewell and Tucker opposed the vote.
The contract lasts 20 years, but Selma has the option of terminating it if it gives one-year notice.
The council set its Oct. 1 decision aside with Monday’s vote after hearing counsel from Cochran. According to Cochran, if the council opted out of the jail contract, the city’s bondholders would take a second look at investing in the city in the future.
“If the city were to do that, there would be significant ramifications,” Cochran said. “I highly recommend you live up to your commitments to your bondholders.”
SouthTrust Securities Corporation is the underwriter for a $4,955,000 bond used to construct a portion of the Dallas County Jail. Cochran noted it was common for cities and counties to use the method to finance jails. While the chance to not renew exists, bondholders still expect to receive their monies over the 20-year period.
“The city and its attorneys signed numerous agreements,” Cochran said.
Sexton then motioned the city live up to its contract. Franklin seconded. Crenshaw, though, said the council shouldn’t act. “We don’t need a motion binding people that may come after us,” she said. “We should just leave it as is.”
Crenshaw referred to the council’s Oct. 1 vote, saying that the council voted to terminate the contract. However, if the council didn’t act on its vote, it would show Selmians that their representatives had made a good-faith effort.
Franklin responded by stating the motion needed to reach a vote. “It will send the message we’ll honor our obligations,” she said. “The message has already been sent that we wanted out. Our other vote is on the books, and we need to get rid of it.”
Mayor James Perkins Jr., who had remained silent up until this point, stepped up to the podium to address the council.
“When we tried to renegotiate with the county, they refused,” he said. “They’ve made it clear that they have no intentions of discussing it.”
At the council’s Dec. 16 meeting City Attorney Jimmy Nunn read a letter to the council from County Commission attorney John W. Kelly concerning the jail contract. “No member of the commission expressed any interest or desire to meet for the purpose of renegotiating the existing contract,” states Kelly’s letter.
“The (Oct. 1) vote occurred because the county refused to discuss the terms of the lease,” Perkins said on Monday. “That’s what was deliberated, and that’s what was voted on. If you reverse that decision, the county will never renegotiate the contract. I don’t think we have to take a position of weakness.”
Randolph said he believed $200,000 a year, the city’s payment for the jail, was unfair.
According to Randolph, Selma only receives 16 beds for its payment.
Cochran said that bondholders didn’t care if the city got a good or bad deal with the contract. “The market considers this your debt,” he said. “If you back up on a promise, bondholders can be very punitive.”
Sewell then amended Sexton’s motion to honor the contract until it could be renegotiated.
The motion passed 6 to 3.