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Jeffrey D. Allred, Deseret News

Lawmakers say $100M prison bond for infrastructure was expected

By Lisa Riley Roche | Posted - Mar. 7, 2017 at 7:14 p.m.


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SALT LAKE CITY — Backers of a $100 million bond for the new Utah State Prison being built west of Salt Lake City International Airport scrambled Tuesday to explain why the price tag for the project is $650 million, not $550 million.

A bill expanding the amount of bonding available for the project was pushed through the House on Monday night without having had a hearing, raising concern about the actual cost of the facility that will replace the state prison at Point of the Mountain.

Rep. Gage Froerer, R-Huntsville, the sponsor of the bonding bill, HB460, and others spoke at a news conference Tuesday to answer questions about the need for more money for the prison expected to be completed in 2020.

"There has been some confusion and some questions about whether this was a cost overrun on the prison itself," Froerer said. "Let me be clear that this is not related to any cost overruns. This has entirely to do with infrastructure to that site."

The $550 million cost for the prison was for the 4,000-bed facility itself, he said, and did not cover some 8 miles of roads, water, sewer and other infrastructure needs that will be partially paid for by Salt Lake City and area businesses.

In December, the Legislature's Prison Development Commission was told the infrastructure needs would add $100 million to the $550 million project, and about $35 million would be repaid by those benefiting from the improvements.

Gov. Gary Herbert included a recommendation for bonding for the $100 million in his proposed budget released later that month, calling the infrastructure "a key factor in spurring the economic development of Salt Lake's northwest quadrant."

The governor said Tuesday during his weekly media access that reporters "haven't all got this right when it comes to state prison," and that the cost was always estimated to be $650 million.

"The extra $100 million, well, it's not extra. It is just bonding in advance" and part of his budget, Herbert said. "So this has not been rushed through. It has not been hidden. It has been open and ascertainable to anybody who reads the budget."

Marliee Richins, spokeswoman for the Utah Department of Administrative Services, said at the news conference it should have always been clear that infrastructure needs would add to the brick and mortar cost.

"It wasn't that that snuck up on us it, it's that that was dependent on the site that was chosen," she said, noting infrastructure expenses were taken into account in the selection process.

Richins said the Salt Lake site "is the most economical when you think of operational expenses long term. But we always knew that site was going to be expensive when you consider the initial investment into infrastructure."

The reason is that the 350-acre site, located amid wetlands, is "so remote and there's environmental challenges out there," she said. Those challenges will require extensive site preparation, including landfill.

Utah Division of Facilities Construction and Management's Jim Russell discusses the $100 million prison bond proposal during a press conference at the Capitol in Salt Lake City on Tuesday, March 7, 2017. (Photo: Jeffrey D. Allred, Deseret News)
Utah Division of Facilities Construction and Management's Jim Russell discusses the $100 million prison bond proposal during a press conference at the Capitol in Salt Lake City on Tuesday, March 7, 2017. (Photo: Jeffrey D. Allred, Deseret News)

Salt Lake City officials fought being selected as the site for the prison relocation for those reasons but are now hoping to take advantage of the new infrastructure to develop the 4,000-acre area.

Jim Russell, assistant director of the state Division of Facilities Construction Management, who is overseeing the project, said about $10 million more than expected has been spent to deal with the soil conditions on the site.

Russell said construction cost overruns, already impacting the airport expansion, are "a big concern to us. We've been tracking that very closely." He said contracts are being locked down to help curb escalating labor expenses.

Democrats in the House and Senate raised concerns about the bond.

When the bill came before the Senate on Tuesday, Assistant Minority Whip Luz Escamilla, D-Salt Lake City, said lawmakers "chose the most expensive site" in terms of construction costs even though other locations might have been better suited for the project.

"Now we're paying the consequences," Escamilla said.

HB460 passed the Senate 23-4. Because it was amended in the Senate, the bill returned to the House.

The Senate sponsor of the bond bill, Sen. Wayne Harper, R-Taylorsville, said backers "ran out of time" to hold a legislative hearing because the bill got a late start. He said lawmakers had hoped to pay for the infrastructure costs without a bond.

Senate Budget Chairman Jerry Stevenson, R-Layton, co-chairman of the Prison Development Commission, said lawmakers could have waited to bond for the $100 million by using existing bonding authority.

"I would much rather do it the way we're doing it than spring a $100 million bond out two years or three years from now because that would look like we had a shortfall," Stevenson said. "I think that's a pretty bad optic."

Contributing: Amy Joi O'Donoghue

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Lisa Riley Roche

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