Dear Commissioners, August 31, 2014; with an Update to for "Dear Commissioners, August 28" | Eastern North Carolina Now

Commissioners:

    Last week, I sent you an estimate of the operation expense advantage that could be achieved by a remodeling the Washington courthouse as opposed to building in Chocowinity.

    My estimate was substantially overstated. If this decision is going to be properly considered, then accurate estimates need to be put forward. A correction needs to be made.

    I had calculated a net present value operational advantage to remodeling over developing a new jail at $13,626,000. In actuality the advantage to operating under the remodeling strategy I laid out would be $8,116,000. We need to have a smaller bonfire.

    Even under my corrected analysis, the SMCP stipend remains $18/inmate /day less than we will spend to earn it.

    We will be operating at a level nearly $600,000 more expensively than if we had simply remodeled our existing facility.

    Under the Chocowinity proposal we will be spending $20,000,000 to $22,000,000 (Al Klemm, radio interview August 2014) up front to build a wasting asset that generates no positive cash flow and operates at a $600,000 disadvantage to other alternatives.

    This is a grim prospect. Under the circumstances smaller is better.

    Please examine the attached spread sheet. If my assumptions and calculations are correct, then your proposal represents a terrible burden for the tax payers.

    There has been a legitimate objection raised to my hypothesis of a $7,000,000 remodeling budget: how do I know remodeling costs will not rise to $10,000,000?

    I don't know that it won't. Mr. Klemm's own estimates of our borrowing needs for Chocowinity have risen from $18,000,000 to $22,000,000 in just a few months. The problem with spending big money is that you get big cost over runs. Under the circumstances smaller is better.

Again, if you have better numbers and estimates please present them. My apologies for the initial error.

    Regards,

     Warren Smith
      Beaufort County, NC

poll#52