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What went wrong at the JDF?
by Carolyn Kahant for TaxpayersWatch
    
 
     On December 17, 2004, the Kerr County Commissioners voted 3-2 to purchase the County Juvenile Detention Facility (JDF) from the Hill Country Juvenile Facilities Corp.  for the sum of $1.9 million. The vote was 2-2, with Buster Baldwin and Dave Nicholson opposed; County Judge Pat Tinley broke the tie, voting in favor.
 
   This came after weeks of negotiations with the bondholders who had invested nearly $5 million in the facility. This article is an effort to understand how we got to this place. First, an historical outline. 

   The original 48-bed detention center was opened in 1994 by Recor, Inc. as a private institution. Recor ran into financial troubles in 1997. In response, the County created a non-profit corporation to buy the facility from Recor, and then leased and managed it. The Board of Directors of the corporation consisted, by state mandate, of Kerr County Juvenile Board members: District Judges Stephen Ables and Karl Prohl, and then-County Judge Fred Heneke. (In 2003, Pat Tinley became County Judge.)

 

   By 2002, the facility was running a financial surplus, and was said to have a good reputation and a waiting list of out-of-county juveniles. This seems to be the basis for the decision to increase the size by one-third. To raise the money for this expansion,  a new non-profit group,  named the Hill Country Juvenile Facilities Corporation (HCJF Corp.), was formed.

 

   At this point, it's important to understand that the detention facility never housed more than 10-12 Kerr County youths at any one time. It mainly catered to what seemed to be a growing demand by other county's law enforcement agencies.

 

   The new HCJF Corp. refinanced the existing debt and began building a 24-bed, $2.6 million wing with a $5.14 million bond issue. $1,947 of this amount was used to pay off the existing mortgage on the existing facility.

 

   However, during the course of  2003-04, things did not continue to go well. The corporation exhausted it's surplus, and in Sept. '04 failed to pay the $412,300 for the 2005 lease payment. 

 

   The Kerr County Commissioners also declined to pay up, saying the bond offering clearly stated the debt would not be the county's obligation. The eleven, mostly Texas-based bondholders were shocked, and a major Wall Street firm downgraded the county's bond rating to near-junk status. Unless something else was done, the facility was scheduled to close on December 31st.

 

     As stated above, in mid-December the Commissioners took over the facility for $1.9 million, and shortly thereafter the juvenile board registered their vote of approval. Since the beginning of this budget year, October 1, 2004 to May 31, Kerr County taxpayers have been billed $1,207,552 to operate the facility, above and beyond the purchase price

    

Questions that must be asked

 

  

     The questions have always been: What was happening at and with the Juvenile Facility that caused it's financial fortunes to change for the worse during 2003-04.  And why were the public and the bondholders, indeed even the County Commissioners, unaware of these facts and taken by surprise when the Juvenile Board announced it was unable to meet it's lease/bond payment?

 

  

     TaxpayersWatch studied the minutes of the Juvenile Board meetings of 2003-04. The following are excepts we believe tell some of the story. You may access the complete transcripts for yourself at the Clerk's Office in the Kerr County Courthouse.

  

April 1st, 2002 - County Auditor Tommy Tomlinson states, "Back when we first started, our mix was better. We had a lot of overflow; that situation has totally gone away. Some months we had $165,000. Now we're averaging $125,000 to $135,000."

   (We include this to show that in 2002, there was some warning of a downward turn in revenues. Ed.)

 

January 29, 2003 -  Judge Prohl said that although we have no building permit, we've already begun excavating. He also mentioned a floodplain problem. Architect Gondeck replied he had submitted plans to the city and applied for a building permit.

 

February 13 - several therapists and MHMR personnel employed by or associated with the Juvenile Facility attended the meeting, bringing complaints that were discussed in closed session.

   Kevin Stanton, Juvenile Probation Department chief, comparing the first six months of fiscal year 2003 to last year's, announced a deficit of $86,000, attributing it to having more kids that stayed longer; also "kids we're holding for other states that we have to pay for."(?!)  Tanna Brown, JDF Director, reported that everything was fine.

  (Only 15 days after being told there was still no building permit, and the excavation had only just begun, the board is confronted by employees with serious complaints about the management of the facility, in addition to negative financial news. Shauna Wickham, a licensed professional counselor employed by the JDF at the time, said in a 1-14-04 Kerrville Daily Times story that the therapists who attended juvenile board meetings were not allowed any time to voice concerns. "We never got to say a word." she said. TaxpayersWatch believes the board missed an opportunity here to put the building construction on hold while it looked more closely into institutional problems. Ed.)

 

April 21 - Tanna Brown described some minor difficulties involving construction of the new wing, and also a problem with a 25 year old detention guard, whom she teminated, winning the approval of Board members. After a closed session which included Stanton, but not Brown, Judge Tinley said he was very concerned and would keep what was brought up an item of consideration at every board meeting.

 

   (All meetings from here on had a closed session dealing with personnel matters.)

 

June 18 - Meeting focused on moving money around to pay bills and details and problems with the building contractor.

 

July 2-   Tanna Brown reports that the facility no longer has the drug and alcohol program in place as of June 23.The grant of $84,000 that funded the program was terminated because the facility was out of compliance with the rules. Though the facility had already received $40,000 to $50,000 of it, Auditor Tomlinson is insecure and thinks the Texas Commission of Alcohol and Drug Abuse may ask for that to be returned. The possible involvement of "criminal justice" comes up several times.

 

   Before the closed session, which includes possible pending litigation this time, JDF Therapeutic Program Director Peter Steeghs asks to speak. He says he was fired yesterday by Tanna Brown and told he may be subject to a criminal investigation. Reason given: Brown claimed her name had been forged on Texas Commission of Alcohol and Drug Abuse documents.

 

   Mr. Sadler, author of the Substance Abuse Treatment Program, said he was also threatened. He had filed a grievance and wanted to attend the closed meeting, based on the Texas Open Meetings Act. That was not allowed, but he expressed  satisfaction after being assured his situation would be addressed.

 

   Following the closed session, the Board referred matters to the oversight agency of the JDF, which is the Texas Juvenile Probation Commission.

 

   (This is a major disruption at the facility, yet the board doesn't show much concern for the blinking red lights. When the TJPC investigated, they found no evidence to back up Brown's claims of forgery. Yet the substance abuse program was not reinstituted and no explanation has ever been given to the public. 

   Glenda Taylor wrote in a 1-14-04 Kerrville Daily Times story, "Most of these therapists lost their jobs at the facility when a substance abuse grant was terminated by Brown -- a move which has been questioned." Questioned by onlookers and the people terminated, perhaps, but not by the juvenile board or any other county authority. Ed.)

 

August 12 - County Auditor Tomlinson reports that he's short $70,000 for three months at the Juvenile Facility and some old bills, plus $9,000 for court-appointed attorneys. The judges look at county reserves. Tinley says, "The ship is taking on water fast." They vote unanimously to request $75,000 from Kerr County. Then, since they were short this year, they vote to increase next year's budget request by $75,000.

 

   (During all the above meetings, Brown reports that everything at the juvenile facility, apart from the construction which takes up much of her attention, is going well. The board accepts her reports without question, at least in open session. Ed.)

 

October 1 - Tanna Brown introduces the idea of instituting a charter school at the facility, as a way to overcome the financial problems. The Texas Educational Agency will pay $24,750 for each of the facility's special ed students. "We're looking at a possible million dollar budget!" she said, "Actually one million, 200 thousand. Plus grant opportunities that come along with it, outside of TEA and ADA." She explained that 80% of the money has to be spent in the campus education department; the other 20% could go to administrative costs.

 

   Auditor Tomlinson says, "It's a no-lose thing. If our budget is even close to what we project, then 20% for us for administrative cost is not small change."

 

   Judge Prohl: "I'll tell you, this just ... Tanna and I have talked about this for a couple of years. I think ... and in reviewing Dr. Troxel's (KISD Superindendent) comments to the paper, it seems it would be timely for us. I think we should move forward immediately to try to lay the basis to go with a charter school."

 

  Judge Tinley makes the point that education benefits to the children is his primary concern, but admits it looks profitable.

 

   Brown reports about residents breaking the sprinkler system. This leads Tinley to mention that the Hondo juvenile facility is shutting down and we should get some "diversions" from there. Prohl declares, "We're fortunate to have wonderful administration in our facility!" Ables replies to Tinley, "Hondo struggled. The guys that were running it tried to make too much money." There follows an off-the-record discussion.

 

October 10 - Judge Prohl reports on his visit to the Hays County charter school and moves to authorize Brown to proceed in implementing a school here. It passes unanimously.

 

Oct. 23, Nov. 20, Dec. 4 meetings were mostly closed session. Open session discussion centered around the building construction progress, with the Lift Station for sewer and septic being a continuing problem.

 

   (An 11-20-03 news story in the Kerrville Daily Times reports that Advocacy, Inc. was seeking formal permission to visit the juvenile facility in response to complaints of abuse and neglect. The board said the complaints were unfounded.)

 

December 23the grand opening for the new wing, scheduled for Christmastime, is pushed forward to February. Brown says, "Our septic stuff haunts us."

 

   (Throughout all these meetings, Judges Ables and Prohl expressed their belief that they should not get too involved in what was going on at the building site because it was the architect's responsibility, and liability. If something turned out badly in the end, he would have to get the builder to fix it ... they had fulfilled their responsibility when they hired the architect. Ed.)

 

January 9, 2004 finds them still having septic problems. The Lift Station is described as "not  a high quality deal, but it should be sufficient". The Charter School should start in August.

 

   (On Jan. 14, there is a major news story in the Kerrville Daily Times, by Glenda Taylor, enumerating complaints of serious abuse and neglect taking place at the JDF. Taylor writes that more than 20 former employees have been speaking to her for the past three months. The article quotes Judge Stephen Ables saying, "The six allegations ... never made it to the juvenile board." Yet, almost a year earlier, on Feb. 13, 2003, JDF therapists and MHMR personnel came in person to the juvenile board meeting with "complaints" and said they were not heard. Ed.) 

 

January 15 - Emergency meeting. After a closed session, the board votes unanimously to authorize the County Attorney, with counsel in Austin, to prepare a revised draft from the TJPC Executive Director of the Kerr County Juvenile Board, and submit it to Advocacy, Inc. and the Texas Juvenile Probation Commission.

 

   (Two months after Advocacy Inc. requested to visit the facility,  permission was still being denied by the JDF and the juvenile board. On January 19, Advocacy Inc. finally entered the facility after at least $27,000 in taxpayer's money had been spent to keep them out. Ed.)

 

March 19 - Brown reports, "We're getting a lot of calls saying Advocacy Inc. is calling kid's parents and telling them about what happened." The attitude is that Advocacy, Inc. are acting as troublemakers. Discussion centers around billing of $18,000 from Allison Bass & Assoc. for legal services regarding Advocacy Inc. Board votes to pay the bill. As money troubles mount up, interest is keen on starting the Charter School.

 

April 21 - Tanna Brown tenders her resignation, as of May 1st. Her stated reason is that "she wants to have a family life." All three judges praise her performance and dedication. They decide to immediately look for a new director.

 

May 19 and July 6- meetings are taken up with interviewing and hiring Becky Harris as new Director of the JDF, and the changes she is making. Auditor Tomlinson has another bill from Allison Bass for $6,000.

 

July 20 - the new wing is completed. There is some reference to abuse and neglect investigations by Texas Juvenile Probation Commission.

 

August 30 - A letter from Pat Tinley, Chairman, Kerr County Juvenile Board was sent to the Kerr County Courthouse advising that the Juvenile Board failed to appropriate funds in an amount sufficient to pay lease payments, including debt payments, for FY2004-05, beginning Oct. 1, 2004.

 

September 8 - Board filed a notice of non-appropriation: On 9-7-04, the Juvenile Board adopts a budget which did not include funds to make lease payments.

 

September 30Special emergency meeting. The Board passes a temporary continuation of lease agreement between the Hill Country Juvenile Facility Corporation and Kerr County until November 2004.

 

Oct. 28 and Dec. 2 - Two more emergency meetings for the purpose of having Kerr County keep paying the bills.

    

Then, as stated above, in Kerr County Commissioners Court...

 

December 17, 2004 - Commissioners voted to purchase the facility from the HCJF Corporation bondholders, thus getting the Juvenile Board off the hook. Judge Pat Tinley cast the deciding vote by joining Bill Williams and Jonathan Letz for a 3-2 majority. The agreement to purchase was dependent on the Kerr County Juvenile Board and the Kerr County Commissioners being guaranteed total immunity from liability from the bondholders.

 

   (In the following 6 months, no one in government has tried to explain what went wrong except to place blame on the Texas Juvenile Probation Commission and Advocacy, Inc. But no accountability has been accepted by anyone. On May 9th, 2005, Commissioners Court addressed the problem of how to explain what happened in their Management Discussion Summary for the '03-'04 Audit of the county budget. For this story, please see "What do we tell the taxpayers?".)

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