The IAH Secure Adult Detention Facility off FM 350 in Livingston operates under an agreement that Polk County Judge Sydney Murphy believes is unique in Texas – one that has created tax relief to county residents without drawing from taxpayer dollars.
The facility’s purpose is to house federal detainees, including those charged with federal crimes or held on immigration matters. It is operated under contract by Management & Training Corporation (MTC), a private company that handles day-to-day staffing and operations.
In 2004, Polk County created a Public Facilities Corporation (PFC) to finance construction of the facility through bonds. The county, through the PFC, owns the building.
The federal government — via the U.S. Marshals Service (USMS) and Immigration and Customs Enforcement (ICE) — pays a per diem for each detainee housed. That was used to repay bondholders, and a fraction of the payments, known as administrative fees, flow back to the county. Other counties have similar facilities, but in those cases, taxpayer dollars are attached.
Polk County’s proximity to the airport makes the facility a desirable target in housing detainees, but that hasn’t always been the case. When Murphy took office, the facility’s population had plummeted.
“That is actually what started the situation – when I first came into office – of the huge deficit, because all of that money had been included in the budget,” Murphy said.
Assistant to the Polk County Judge Kari Miller said funds for the operator, as well as the county, were in the budget and were not going to arrive.
“The county has historically gotten an administrative fee, and it’s $3 and change per resident per day that is out there,” Miller said. “When the population went to low double digits at one point, the operators out there were not getting paid. Obviously, the county was not getting its administrative fee, but that fee money was built into the budget. Over $1 million just dried up and didn’t come to the county’s coffers. So, that was what put the county in a rough situation upon Judge Murphy taking office.”
Murphy said with that amount of money going into the general fund, something had to be cut.
“In my case, I chose to try to do everything we could to hold on to employees, to hold on to the insurance – because that is one of the really great benefits of the county – and to hold on to retirement. So, what we did is we started out by cutting things like travel, contingency funds and training.”
The judge explained that there wasn’t a hiring freeze, but elected officials were told if they had an empty spot to leave it alone to keep those who were employed at the time.
“We would hate for you to hire someone, then three months later, fire them.”
There was no clear indication of what caused the drop in population, while higher operating expenses and little convenience at other locations continued to be utilized.
“It was ICE,” Murphy said. “And, they seemed unconcerned with our operating dilemmas, so you end up with these population swings that were occurring.”
Many times, the facility is a quick stop for those housed, and the swings could have 350 inmates one day, and within two weeks, may dwindle to just over 100.
“That’s when I got involved with the negotiations with our attorney,” Murphy said of needing an agreement the county could rely on. “When we were finally able to stabilize some of it, we did a guaranteed minimum. And so, we get paid for X-number of beds, no matter how many people are in there.”
Murphy and the attorney tried negotiating with ICE in Dallas. They were later notified the federal government was not going to honor a deal agreed upon at the local office. Therefore, the fight traveled to Washington D.C. It was there they received a minimum guarantee for beds – whether occupied or not. Then, there is a tiered rate for larger populations. IAH currently holds a maximum of 1,054 beds.
“That stabilizes the hiring,” Murphy said. “You can’t hire and un-hire guards. You can’t hire and un-hire administrative staff, cooks and maintenance. So, that made that facility very unstable. And furthermore, when they would then have a surge of 350 or 400 people in there, they couldn’t hire anybody. You were losing good ones, because they were like, ‘I can’t deal with this yo-yo.’”
A long-term contract was in place while John Thompson was Polk County judge, but it was never backed by a guaranteed minimum. Now carrying a minimum, IAH has remained around 80% full, which can change quickly, as many are there for a short stay.
The bonds were paid off in 2025, and the county now owns the building. The PFC continues to protect the facility and its financials.
The county hoped to finalize a long-term pact, but ICE agreed to a six-month extension.
“This is actually the third extension that they’ve now said, instead of doing a new five-year agreement, they’re just extending it six months for the agreement that we already had in place,” Miller said. “And because we don’t know what’s going to happen with that agreement with ICE, the county hasn’t been able to renegotiate the contract with the operating company, MTC. You don’t want to start pulling the money and start rearranging how that’s going to work, because we still don’t know how the agreements with ICE and MTC are going to play out.
“We don’t know how much longer ICE is going to continue kicking that can down the road, and we’ve got to have something stable in place with the operator, so we just have to move forward.”
The funds have limitations on how they can be used because of the PFC’s structure. While the county can continue to receive an administrative fee for budgeted operations, the main purpose of the PFC is to provide funding for maintenance and construction of county buildings, after ensuring sufficient operating and capital reserves for the IAH facility.
“The goal would be to have at least $1 million in administrative fees guaranteed, that we could work into our budget,” Miller said.
Since around 2017, the county has received anywhere between $900,000 and over $2.2 million in administrative fees each year. Though revenue went to zero in 2016, taxpayers have never had to put money into the facility.
ICE has inquired about certain improvements like an upgraded kitchen, HVAC system, additional office space and a gym. Sufficient capital reserves must be maintained to ensure ICE will continue working with the county to keep population levels that benefit Polk County.
“We would like an administrative fee that is flexible, that the county can allocate as commissioner’s court sees fit, that we could count on, that it’s not going to dry up,” Murphy said. “Then, we can have something that provides tax relief to the taxpayers, because that’s $1 million that you would not otherwise receive.”
Murphy pointed to the ongoing courthouse debate as an example of what a fully operational PFC could have provided.
“Had the public facility corporation already been fully operational, then some of the funds that they had gathered over the years could have been utilized at no expense to the taxpayers and no interest. So, it’s done on purpose, because otherwise, the taxpayers are somehow going to bear the burden. You’re going to have to go out for capital projections, which means you’re going to make a loan.
“And at that time, the county bond rating was not good. Most of their interest was on up there, compared to where it is now. Your bond rating makes a huge difference, in terms of capital projections.”
