On Monday October 10th, Dilley voted to adopt a property tax rate of $.802301 per $100 on approximately $158 million dollars of appraised property tax value. For the past year, however, city attorney Bobby Maldonado has argued that the total appraised value should be far higher due to an alleged $60 million dollar under-valuation of CoreCivic’s South Texas Family Residential Center.
A story in three council meetings…
PART II – December 2016
RISKS OF DEPARTURE
By December 13, 2016, according to the minutes of the Frio County Appraisal Board- which includes representatives from the cities of Dilley and Pearsall, as well as Frio County- the issue of the appraisal of Correction Corporation of America’s South Texas Family Residential Center in Dilley had not been addressed, four months since the topic was initially discussed.
In the meantime, the end of 2016 was a difficult time for CCA and the future of STFRC, making it a precarious time for confrontation. The country’s largest for-profit prison corporation changed their name to CoreCivic in an attempted makeover after multiple controversies. The contract for STFRC was renegotiated between the Department of Homeland Security and CoreCivic, resulting in a decrease in annual government compensation from about $250 million to $156 million. STFRC employees took 33% pay cuts. In an unprecedented move, the Department of Justice announced they would end the use of private prisons. CCA’s stock tumbled 60% in a four-month period. A judge ruled that STFRC would not be licensed as a childcare facility, damaging the planned revenue model for the facility.
Furthermore, even Immigration and Custom Enforcement’s environmental assessment report instills little confidence in a long-term future. “The jobs that are likely to result from the construction and operation of the STFRC are unlikely to be long-term because of the temporary and indefinite nature of the facility,” the document reads.
Private prison companies have a well-documented record of abandoning their facilities. Locally, look no further than the Frio County jail formerly operated by The Geo Group, or the La Salle County Detention Center, built with government bonds for use by Emerald Corrections.
Dilley would be particularly vulnerable after a CoreCivic exit. After a wave of employee turnover, hiring of Dilley residents finally started to see an increase. STFRC also currently represents nearly one-third of Dilley’s total property value. A sudden departure by CoreCivic would be potentially devastating to the community, a possibility the city of Dilley has not considered in any council meetings.
DECEMBER 13th, 2016 DILLEY CITY COUNCIL MEETING
Four months after the original meeting about STFRC’s alleged $60 million under-appraisal, the city of Dilley revisited the topic.
This time around, city council agenda language was now vague enough to limit media attention (especially after a San Antonio Express journalist visited the previous meeting that addressed the facility), and did not mention CoreCivic by name:
“Discuss/consider & act on A Resolution of the City to Reappraise certain improvements in Dilley, TX.”
Those “certain improvements,” of course, referred to CoreCivic’s South Texas Family Residential Center.
Mayor Pro-Tem Ray Aranda, who also represents the city of Dilley on the Frio County Appraisal District board of directors, updated the council. “The Appraisal District has not met in three or four months. Last week I asked them that the city of Dilley wanted and was requesting in the appraisal of the CCA facility and it’s on for Thursday.”
The plan was to hire a firm called Pritchard & Abbott, the same company contracted by the Frio County Appraisal District, to perform an independent appraisal of the CCA property at a cost of $1,800, hopefully arriving at a valuation of $100 million instead of the Appraisal District’s $40 million figure. According to Aranda, the Appraisal District would probably foot the bill.
Aranda offered that one reason the original appraisal was low, is because the property was surveyed using aerial satellite photos. The new appraisers would actually go into the facility. Still, City Councilwoman Esmeralda Cano, also the deputy clerk for Frio County, expressed concern about contracting the same company the Appraisal District uses.
“Do you feel comfortable with Pritchard & Abbott?” Cano asked. “They’ve just been with the Appraisal District for so many years, as we all well know, sometimes we all get a little too comfortable. So we just tend to move right along and so that’s my concern.”
“From my position it’s whoever will conduct the appraisal that will accurately reflect what the value is.” Dilley’s city attorney Bobby Maldonado answered. “CCA has indicated, in writing, that the facility is open to an appraisal, the appraisal has just not occurred- a complete appraisal. It should have been done a long time ago…”
TABLED AT THE TAX APPRAISAL BOARD
As promised, STFRC was brought up at the Frio County Appraisal District board meeting, two days after Dilley’s December city council meeting. The minutes indicate a discussion, but ultimately, all items related to Dilley and CoreCivic were tabled by a unanimous vote. At this point, if the city of Dilley were to order an independent appraisal of the South Texas Residential Center, the council would have to take action themselves.
EMBEDDED
As the city of Dilley wrestled with the issue of STFRC’s property appraisal, associates of CoreCivic would show up elsewhere in Dilley business.
Late in 2016, the city of Dilley passed an ordinance authorizing a certificates of obligation loan in the amount of $2.5 million dollars. The original pitch for this loan from the city’s financial consultants was to “get the ball rolling to lock in those low rates.”
Meanwhile, CoreCivic was in court attempting to win the right to operate as a child care center, a move against legal precedent. The law firm representing CoreCivic: Winstead PC.
The firms representing the City of Dilley as co-bond counsel to secure the $2.5 million dollar loan: Winstead PC and the law firm of Dilley’s own city attorney, Bobby Maldonado.
For the sake of comparison, Dilley’s neighbor to the north, Pearsall, issued certificates of obligation in 2015. For their $8.5 million dollar loan, Pearsall needed only one firm to act as bond counsel, and it was not their city attorney.
CERTIFICATES LOAN BLOCKED
As a postscript to the certificates story, the 2016 loans were rescinded when it was discovered that the city incorrectly advertised the council meeting time. As a result, when one resident intended to protest the loans and arrived at council chambers at 6:30pm, he was too late- the ordinance had already passed. It was the responsibility of the bond counsel to craft and reserve the newspaper ad.
To be continued…
Previous – Part I
–written by Jose Asuncion.
Jose received an MFA from University of Southern California in 2008, a BA from the University of Illinois at Chicago in 2003, and currently lives in Dilley, TX, home of his grandparents.