First coronavirus-related lawsuit disclosed on EMMA
A prison facility in Florida was the first to disclose a lawsuit related to coronavirus, which could have an impact on its municipal bonds.
Glades Correctional Development Corporation, which owns a prison in Glades County, Florida disclosed that lawsuit on EMMA and it was included in a weekly report released by the Municipal Securities Rulemaking Board Wednesday.
The U.S. District Court for the Southern District of Florida issued an injunction against U.S. Immigration and Customs Enforcement, ordering a review of people detained by ICE for early release under ICE’s pandemic response in late April.
GCDC is not part of the injunction, however ICE currently detains people at its Glades County Detention Center. That center was refinanced with bond proceeds. Those bonds are $23,040,000 in corporation taxable first mortgage refunding revenue bonds Series 2017A and $12,312,000 in corporation taxable first mortgage refunding revenue bonds Series 2017B.
Revenues to pay those bonds include rentals, revenues and fees from the detention center.
“In response to the order and ICE’s PRR (pandemic response requirement), ICE has reduced the number of persons detained by ICE at the center, which may result in a decrease in fees paid by ICE to GCDC,” according to the filing. “The decrease in fees paid by ICE may have a material impact on the revenues available to GCDC.”
GCDC said it could not estimate the decrease in fees.
In response to the pandemic, Attorney General William Barr initially issued directions to the Bureau of Prisons urging it to identify and release all inmates eligible for home confinement, who no longer posed a threat to the public and were particularly vulnerable to the virus. Barr also issued a second direction expanding the group of federal inmates eligible for early release.
Petitioners in the case are 34 immigrant detainees being housed in three immigration detention centers in Florida. They are not convicted criminal prisoners. They say they are particularly vulnerable to COVID-19 with underlying chronic ailments and are at risk of getting the virus because of the overflow of detainees in the detention centers.
ICE was directed to evaluate those 34 detainees and inform the court on who can be released, perform an internal review, among other actions.
As a whole, other financial disclosures from state and local governments continued to increase week over week.
From Jan. 1 to the week ending May 24, there have been 6,385 disclosures, an increase of 868 from the prior week.
“We continue to see double digit percentage increases week over week,” said Mark Kim, MSRB chief operating officer. “So total disclosures that the MSRB has identified as referencing COVID-19 across both primary and continuing disclosures is in excess of 6,300.”
Over the past few weeks, disclosures have increased by at least 1,000 each week. Kim added the 800 increase this past week was still significant and said the trend of more disclosures is continuing.
Texas, California and Florida continue to have the most disclosures. Since Jan. 1, Texas has had 733 COVID-19-related disclosures, California with 614 and Florida with 393.
Last week, Fairfield, Alabama became the first city to file for bankruptcy since the beginnings of the pandemic. The city told AL.com that the city had financial problems before the pandemic began, but said the outbreak has taken a toll on the local economy.