SKOWHEGAN — Can revenue from boarding federal prisoners be used to pay off debt on the construction of the Somerset County Jail, or is it “outside money” that cannot legally be used to reduce county taxes? And is jail debt considered a part of correctional services or not?

Those complex questions were at the heart of oral arguments Friday in a lawsuit brought by Somerset County against the state Board of Corrections for payment of more than $280,000 the county says it is owed for operations at the Somerset County Jail.

Friday’s hearing in Somerset County Superior Court was an appeal of the state board’s decision to deny payment to the county for the third quarter of the 2012-13 fiscal year.

At issue Friday for Maine Supreme Court Justice Donald Alexander is who has the control or authority to determine what happens to revenue from boarding federal prisoners.

Somerset County Sheriff Barry DeLong said in April that one of the Somerset County Jail’s four pods was closed for renovations and will not reopen until the matter of missing payments from the state is resolved. DeLong also stopped accepting out-of-county inmates last March, even though the jail is one of four flagship county jails statewide — intended to also house inmates from other counties — created under Maine’s 2008 Jail Consolidation Act.

DeLong held his ground Friday, saying he believes Alexander will rule in favor of the county.

“When is it a bad time to give taxpayers a break? That’s what we’re doing,” DeLong said outside the courtroom Friday. “If we lose this, there’s no purpose in accepting federal inmates. I have one pod still closed now, and depending on how this goes, I might have two closed — I might close the whole jail.”

DeLong said if the state takes over the county jails, as was suggested Thursday in a letter by corrections Commissioner Joseph Ponte, then there would no longer be an incentive for Somerset County to continue to maintain its jail.

The civil suit in court Friday contends that the Board of Corrections’ vote not to make the third quarter payment to Somerset County was an unlawful procedure done in the privacy of an executive session without input from county officials or the public. The board “failed to explain the factual or legal basis” for refusing to approve the payment, according to the court document.

Attorney Michael Hodgins, representing Somerset County, said state law does not specifically address the revenue question and therefore is it appropriate that the county use the money to help county taxpayers by paying down the debt on the jail. Somerset County borrowed $30 million to build the county jail in East Madison in 2008 and the annual debt bill is about $2.55 million. The bond is to be paid off over 20 years.

“Debt service for a jail falls under correctional services and should be allowed,” Hodgins told Alexander. “So if the Board of Corrections says Somerset County is doing something inappropriate or illegal, it is not correct.”

The state board does not have the authority to demand that federal revenues to Somerset County be used to offset money owed by the state under the unified jail system adopted in 2008, he said.

Assistant Attorney General Andrew Black, who represented the state board, disagreed with that reasoning, saying jail debt payments are not corrections services, which are daily jail operations, routine maintenance or capital expenditures.

“If they are using the revenue from federal boarders to pay down county debt, that’s against the law,” Black said. “Jail debt is not corrections services.”

The county is not allowed to use outside money to pay off its debt, he said.

Somerset County filed the civil suit against the state Board of Corrections in May, seeking to reverse a unanimous vote by the board a month earlier to withhold the county’s third-quarter payment as part of the state’s consolidated jail system.

The result of the withheld payment is that county residents paid the bills to run the jail in January, February and March of last year without the promised reimbursement from the state.

It is a matter of cash flow, county officials said. It’s money that’s owed to the county and if the money owed can’t be collected, that puts an extra burden on taxpayers.

County officials, including DeLong, have said that Somerset County operated the jail for the third quarter, paid the salaries, bought the meals, paid the light bill, and if the state doesn’t pay that money, then the county gets left paying for it all.

Board of Corrections members said in April that the payment was withheld because Somerset County kept the revenue from the boarding of federal inmates as part of its own jail budget and debt service on jail construction. The board contends that the money instead should have been sent to it to help defray the costs of the statewide jail system.

Hodgins disagreed, saying there is no basis in Maine law for withholding the money. He said the money was agreed upon in the 2013 jail budget, which was approved by the state Board of Corrections.

The jail budget calls for the state to pay $1.12 million to Somerset County for jail operations in the form of quarterly payments of $280,442. The rest of the jail’s expenses, about $4.8 million, is raised by county taxpayers and from “other sources of revenue … to offset the tax burden,” according to the civil suit.

One of those “other sources” of income is a contract with the U.S. Marshals Service for the boarding of federal pre-trial inmates.

The Board of Corrections insists that all of the federal revenue must be turned over to the state to be used to offset the state’s contribution to correctional services. The county receives about $475,000 per year for the boarding of federal inmates.

County commissioners voted 5-0 in January to take the $93 paid daily for each federal inmate and use $22 as the marginal cost of running the jail and $18 would go to a building capital reserve fund, and $53 will be used for debt service on the construction of the jail.

The county commissioners’ resolution in January is reasonable and equitable and consistent with state law, according to the county’s suit.

Alexander said he will take the information presented Friday under advisement and will issue a ruling soon.

Doug Harlow — 612-2367 [email protected] Twitter: @Doug_Harlow