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Nelson County backs revised ACRJ renovation after bids far exceed estimates; financing plan moves forward
Summary
After construction bids rose well above earlier estimates, the Albemarle-Charlottesville Regional Jail Authority reduced the renovation scope and the Nelson County Board approved a support agreement to help finance the $49 million project using VRA bonds and a grant-anticipation note; Nelson’s share of recurring debt service is estimated at roughly $430,000.
The Nelson County Board of Supervisors approved a support agreement July 8 enabling the Albemarle-Charlottesville Regional Jail Authority to proceed with a reduced-scope renovation and the financing needed to complete it.
Colonel Martin Kumer, Superintendent of the Albemarle-Charlottesville Regional Jail (ACRJ), told the Board that construction bids returned in late May were significantly higher than earlier estimates. “They were estimating that the actual construction costs would [be] approximately $39 million, while the design and engineering costs were an additional $10 million,” Kumer said, and the Authority’s lowest construction bid was $53 million.
To keep the overall project within its previously budgeted total, the Authority narrowed the scope: rather than renovating about 40,000 square feet of existing 1974-era space, the plan focuses on demolishing the outdated section and building an expansion of roughly 16,000 square feet with a second story. The revised scope includes a new public entrance, 12 visitation areas, three outdoor recreation areas, 65 single beds built to 2018 Board of Correctional Standards, dedicated mental-health housing (14 beds) and spaces for mental health providers and programming.
Senior Vice President Roland Kooch of Davenport & Company, the Authority’s financial advisor, described a two-part financing strategy that was presented to and accepted by the Board. The plan anticipates a grant-anticipation note (to front the Commonwealth’s expected reimbursement) of roughly $12 million and approximately $37 million in permanent bonds issued through the Virginia Resources Authority (VRA), yielding a total project fund in the neighborhood of $49 million. The General Assembly had previously authorized about $11.7 million in reimbursement; Davenport estimated that, with interest carry, that reimbursement would total about $12.25 million.
Kooch said the VRA structure was chosen to secure more favorable rates and to avoid the Authority and each member locality having to obtain separate public credit ratings. The proposed allocation of the local portion of debt service used the Authority’s FY2026 shares: Albemarle County 44%, the City of Charlottesville 39.5% and Nelson County 16.3%.
On the Board’s financial-analysis slide, Nelson County’s recurring share of the debt service was shown in planning estimates at about $430,000 annually. Kooch cautioned the Board the presentation used conservative planning assumptions (including planning interest rates near 5%) and that final terms could change when bids for the grant-anticipation note and the VRA pool are completed.
Supervisor J. David Parr moved to adopt Resolution R2025-51, authorizing the County to enter a support agreement with the Authority and permitting its portion of the bonds and notes to proceed; Dr. Jessica L. Ligon seconded. The Board voted unanimously (4–0) to approve the resolution.
Next steps outlined by Davenport and ACRJ staff include closing the grant-anticipation note and the VRA bond financing in late July–early August, after which construction funding would be available and the project would move toward an estimated 28-month construction schedule.
