The Board of Supervisor’s finance committee on April 18 faced an unusual dilemma: how to go about closing a regional jail, and what happens to those employees’ retirement plan obligations.
The Peumansend Creek Regional Jail Authority was created in 1996 to house inmates from Arlington County, Caroline, Loudoun, Prince William counties and the cities of Richmond and Alexandria. It is 336-bed facility on U.S. Army base Fort AP Hill in Caroline County, between Fredericksburg and Richmond. Although it is rated as medium-security facility, at the insistence of Caroline County, only minimum-security, nonviolent inmates were housed there.
Loudoun reserved 40 beds there and is about to finish paying off its $2,489,379 share to help set it up. The county also contributes to the cost of running the facility. In total, the county budgeted $506,296 for the jail in fiscal year 2017.
According to county administration and the Loudoun County Sheriff’s Office, the jail provided much-needed space for years. Since 1996, however, Loudoun built and then expanded its new Adult Detention Center in Leesburg. Now it has 472 beds, and Loudoun’s need is expected to stay in the low 400s until 2021. Between the adequate space here in Loudoun and Peumansend Creek’s restrictive policy allowing only non-violent inmates, Loudoun leaders have decided to leave the regional authority—as has every other jurisdiction except Caroline County.
By the terms of the agreement that created the regional jail authority, any locality can pull out once their share of its cost has been paid off, which Loudoun will do as of June 1. Supervisors had decided last summer to end the agreement and the regional jail has been winding down for months. As of the beginning of April, all of the inmates and most of the staff are gone. On June 30, the jail will shut down completely.
With all the inmates back in their home jurisdictions and the last few employees closing down the facility, the participating jurisdictions must decide what to do with the jail’s leftover assets and the employees’ retirement plans. Nothing in the agreement that created the jail specified a process for closing it, and Loudoun County staff members say they have found no precedent for disbanding a regional jail in Virginia. Others that have closed have been state jails, for which the state government is responsible, rather than a collection of localities.
The employees of the jail were enrolled in the Virginia Retirement System, and the member jurisdictions now face three options for dealing with the remaining funds: split up the cost of their retirement packages proportionately among the participating localities, designate a single successor to take on all the funds and all the liability, or close out the retirement plan and distribute the assets to the employees.
The board’s finance committee recommended the first option.
“The employees who worked at the jail had a fair and reasonable assumption that their pensions were going to be there when their employment ended,” said committee Chairman Matthew F. Letourneau (R-Dulles). “I believe that we should treat these employees the same way that we would treat Loudoun County employees in a similar situation.”
Letourneau added he “might feel differently if this was going to be an enormous financial burden on Loudoun County.” The retirement plan’s assets exceed its liabilities, meaning it is overfunded. That means the county would get a small bump to its own Virginia Retirement System plans. Specifically, to start off, Loudoun would be liable for $1,326,395, and have a $1,653,161 in assets, for a surplus of more than $300,000.
Board Vice Chairman Ralph M. Buona (R-Ashburn) disagreed, but voted along with the committee anyway.
“I believe this is not different than somebody leaving a company, and what should happen is that all of the assets in the plan, including the surplus, should be distributed to the participants,” Buona said.
The full Board of Supervisors must now weigh in on the retirement question. All other participating jurisdictions must also agree to the same plan for it to go into effect. So far, none have expressed any interest in taking on full responsibility for the regional jail’s complete retirement program.