Title
Resolution Approving and Authorizing the Hampton Roads Regional Jail Authority Board’s Decision to Close and Sell the Hampton Roads Regional Jail and to Take All Necessary Actions to Execute the Sale and Closure Thereof
Purpose
PURPOSE/BACKGROUND:
The Hampton Roads Regional Jail (HRRJ) closed to inmates April 1, 2024, due to persistent staffing challenges. Over the last few years, the HRRJ member cities have explored different alternatives and the viable path forward was to close the facility.
Discussion:
HRRJ is no longer a viable alternative for housing Hampton's inmates. All member City Managers agreed that the facility should shut down. We have also reached agreement to sell the jail facility and all of its contents to the City of Portsmouth for $31.5 million and Hampton is expected to receive approximately $8.1 million from the sale. These proceeds will cover the cost of the City's $5.7 million "buy in" into the Western Tidewater Regional Jail Authority to house the City's inmates that can not be housed locally. All remaining HRRJ liabilities are projected to be covered with cash the Authority has on hand. All bonds have already been paid off. The Hampton Roads Regional Jail Authority will remain in place to respond to any lawsuits until the statute of limitations expire on March 31, 2026, with a small staff in place to close out the remaining authority obligations. The HRRJA Board will be restructured to be comprised of the City Manager's or their designees. The four other member cities of the HRRJ approved this closure resolution on Tuesday, Mary 14, 2024.
Impact:
Recommendation:
Approve the Resolution to close the Hampton Roads Regional Jail.
Body
WHEREAS, the HAMPTON ROADS REGIONAL JAIL AUTHORITY (“Authority”) was established on December 14, 1993, pursuant to Section 53.1-95.2 et seq., VA Code Ann., (1950), as amended; and
WHEREAS, the Authority is comprised of five municipal entities including, the City of Portsmouth, Virginia, the City of Norfolk, Virginia, the City of Hampton, Virginia, the City of Newport News, Virginia, and the City of Chesapeake, Virginia (individually, the “member city” or collectively as the “member cities”); and
WHEREAS, pursuant to the Amended and Restated Agreement for Creation of the Hampton Roads Regional Jail Authority, all decisions concerning membership, withdrawal of members, and the continued operation of the Hampton Roads Regional Jail (“Jail”) by the Authority must be unanimous, with resolutions adopted by each member city; and
WHEREAS, the member cities agree unanimously that they want to close the Jail (for the purpose of housing inmates) as of April 1, 2024, sell the facility and its contents to the City of Portsmouth, and wind down and dissolve the Authority as soon as possible thereafter; and
WHEREAS, the City Council of the City of Hampton has concluded that closing the Jail as of April 1, 2024, selling the facility and its contents to the City of Portsmouth, and winding down and dissolving the Authority as soon as possible thereafter is in the best interest of the Authority and the member cities; and
WHEREAS, in furtherance of the desire of the member cities to close the Jail, the Authority has advised that all outstanding debt under the Authority’s Master Indenture of Trust has been defeased and deemed paid as of March 28, 2024, now, therefore,
BE IT RESOLVED by the Council of the City of Hampton:
Section 1: The City Council of the City of Hampton is supportive of the Authority’s Board’s decision to close the Jail (for the purpose of housing inmates) as of April 1, 2024.
Section 2: The City Council the City of Hampton approves the sale of the Jail facility and its contents to the City of Portsmouth as outlined in the proposed Purchase Agreement between the Authority and the City of Portsmouth (attached hereto as an Exhibit) which will be executed as soon as all member jurisdictions have authorized the sale.
Section 3: The City Council of the City of Hampton authorizes the Authority to act and take all actions necessary, consistent with its current Fiscal Year 2024 operating and capital budgets, and future Fiscal Year budgets, as the Authority may amend and approve, including two years after inmate operations cease, to close the Jail, sell the facility and its contents, and wind down and dissolve the Authority as soon as practicable thereafter.
Section 4: The City Council of the City of Hampton authorizes the Authority, consistent with its current Fiscal Year 2024 operating and capital budgets, and future Fiscal Year budgets, as the Authority may amend and approve, including two years after inmate operations cease, to continue to pay a minimal number of staff until the Authority is dissolved. Nothing herein is intended to preclude the Authority from adopting budgets for subsequent Fiscal Years to the extent necessary to complete the disposition of assets and the winding down of the Authority’s corporate existence as contemplated by this Resolution.
Section 5: The City Council of the City of Hampton authorizes the Authority, consistent with the terms of such contracts, to cancel or terminate all contracts for goods, services, and utilities and pay any remaining balances owed. The Authority shall not cancel or terminate any such contract in a manner constituting a breach of that contract except by the affirmative vote of a majority of Board members. It is understood that the contracts for some services, such as legal services and staff, must remain in place for a period of time following the closure of the jail.
Section 6: The City Council of the City of Hampton authorizes the Authority, consistent with its current Fiscal Year 2024 operating and capital budgets, and future Fiscal Year budgets, as the Authority may amend and approve, including two years after inmate operations cease, to perform any other duties required to shut down the jail, and to preserve the jail real and personal property and other assets until sale of the facility and its contents are completed. To the extent the property and assets of the Authority exceed its liabilities and obligations, each member city shall receive an equity payout upon final dissolution of the Authority equally among the five-member jurisdictions.
Section 7: The City Council of the City of Hampton authorizes the Authority, consistent with its current Fiscal Year 2024 operating and capital budgets, and future Fiscal Year budgets, as the Authority may amend and approve, including two years after inmate operations cease, to draw funds from the Authority’s general fund reserves for the above purposes; however, notwithstanding the relevant provisions of the Authority Operating Agreement, as amended, the Authority shall retain in the general fund reserves an amount sufficient to effect the winding down and dissolution of the Authority subsequent to the closure of the Jail, including any and all legal and financial liabilities and obligations whether known or unknown at the time of closure. To the extent the Authority’s liabilities and obligations exceed its property and assets at the time of its final dissolution, each member city shall be responsible for a share of such liabilities and obligations equally among the five-member jurisdictions.
Section 8: The Authority shall maintain sufficient insurance coverage during the winding down and dissolution of the Authority and the closure of the Jail.
Section 9: The City Manager and designated representatives of the City Manager to the Authority, are hereby authorized and directed to do all things necessary, including the execution of documents subject to the approval of the City Attorney as to their form and correctness, casting of votes, and other actions necessary to effectuate the winding down and dissolution of the Authority.
Section 10: The City Council of Hampton authorizes the Authority to amend its bylaws, after the Jail is sold, to reduce the Board to five members, to include the City Manager of each member jurisdiction, or their designated representative, to conduct the business of the Authority during the wind down period. It also authorizes the Authority to meet every two months during the wind down period.