The Real Cost of Prisons Weblog

The plan for a so-called Correctional Alternative Placement Program
facility was hatched in the 2006 Legislature, as lawmakers sought to
provide an alternative so those convicted of drug- and alcohol-
related crimes could avoid time in a traditional prison and get
treatment instead. Since then, however, it's been delayed by
ambiguity in the state's competitive bidding process that provoked
complaints from companies vying to build and run the facility.

That's finally been worked out. Late last year, Management & Training
Corp., based in Centerville, Utah, won the contract to build and
operate the prison. Now, lawmakers need to sign off on the details of
the lease-purchase pact.

"It's going to be a key component in slowing the flow" of drug
offenders into Idaho prisons, Department of Correction Director Brent
Reinke told the Senate panel. "I think we're going to see some
incredible returns on it."

This prison is just part of Reinke's agency's push to add beds to
manage a population of 7,400 offenders incarcerated largely due to
drug offenses in a prison system so crowded that it's sent 500
inmates to Texas and Oklahoma.

Separately, Gov. C.L. "Butch" Otter this week began efforts to
convince lawmakers of the merits of his plan to let a private company
construct and own a new $250 million, 2,100-bed private prison.

Lawmakers last year had set aside about $4 million to run the new
drug prison, on the expectation it would be completed. Since it's
not, that money will revert to Idaho's general fund and lawmakers
will have to approve an additional appropriation in the 2009
Legislature for operation.

At the new drug prison, Management & Training Corp. plans to offer
programs to help addicted inmates re-enter society. Its operations
contract is for 10 years, but the state could renew for two five-year
periods, Reinke said.

Some senators were concerned that Idaho might be locked into
contracting with the Utah private prison company for the duration of
the 20 years it takes to complete the lease-purchase transaction.

"How do you address an inadequate operator that owns your building?"
asked Sen. Bart Davis, R-Idaho Falls.

Rod Leonard, who led the bidding development team for Idaho, said the
contract includes provisions for the state to cancel its relationship
at any time if there is failure to live up to state expectations.

Leonard said the state opted for the lease-purchase agreement,
instead of letting the Utah company own the facility, because it
allows for about $8.7 million worth of federal tax benefits over the
next 20 years. Management & Training has agreed to pass that benefit
on to Idaho in the form of reduced annual payments.

The facility will include 100 beds for offenders sentenced to drug-
or alcohol-treatment programs that must be completed in order for
them to avoid longer prison terms.

Other beds will be filled by offenders who run afoul of terms of
their parole or probation, but get sent to this facility for
treatment, in lieu of a judge returning them to one of Idaho's
penitentiaries.

"We're going to be using it for tuneups," Reinke said. "We'll run
them through it, get them tuned up."

Otter selling private prison plan; skeptics fear loss of control

By JOHN MILLER
Wednesday, January 23, 2008 http://www.magicvalley.com/articles/2008/01/23/ap-state-id/d8ubujv80.txt

BOISE, Idaho - Gov. C.L. "Butch" Otter Wednesday began selling a plan
to lawmakers to let prison companies own and operate for-profit
lockups in Idaho, arguing it's better for corporations to pay upfront
costs of housing a growing inmate population than it is for the state
to sell bonds for such projects, like it's done in the past.

Currently, Idaho law prevents corporations from building for-profit
prisons here.

For instance, although Corrections Corporation of America, based in
Tennessee, built the Idaho Correctional Center south of Boise in 2000
and now runs it, the state owns the facility.

Under Otter's proposal, companies could own their own facilities,
although only after the state issues a permit for a new facility.
Inmates from elsewhere could be brought here, but Idaho prisoners
would have priority and could "bump" inmates from other states to
make room for them.

And while sex offenders would likely be allowed, violent sexual
predators would be forbidden.

The Department of Correction predicts Idaho will have nearly 9,400
inmates in its system by 2012, up from about 7,400 now. The agency
has prison beds for just 6,300 inmates, so it's shipped about 500 to
Texas and Oklahoma, with others housed in county jails across Idaho.

Otter, a former businessman who touts free-market solutions, aims to
let firms like Corrections Corporation of America and Florida's The
GEO Group, build a $250 million, 2,100-bed prison, starting as soon
as possible. The companies are building tens of thousands of private
prison beds across America.

"The governor thinks there is a huge benefit to having a private
entity fund the construction of the facility and then operate the
facility," said David Hensley, Otter's staff attorney, adding Idaho
still owes $71 million in bond payments for its last prison. "The
governor is concerned taking on another $250 million in bond payments
is quite an undertaking."

Senate President Pro Tem Robert Geddes, R-Soda Springs, agreed Idaho
needs a new prison.

Still, the system where ownership has remained in state hands has
worked well, he said. If things change, Geddes raised concerns about
repeating problems in Texas, where one Idaho inmate killed himself in
March and where prisoners have been moved several times after alleged
abuse by guards.

"If you allow a private prison to develop...they're obviously looking
to maximize their profits," Geddes said. "Does that mean we're going
to become what we have utilized Texas for?"

In addition, members of the majority GOP are raising questions over
financial estimates Otter aides are using to tout cost advantages of
a privately owned prison.

In documents obtained by The Associated Press, officials estimated
that a state-owned prison built in 2012 would initially be more
expensive than a privately owned prison. But the state-owned option
would become cheaper by year 2019 due to projected rising payments
Idaho would have to make to a company to cover its costs of building
the privately owned prison, according to the documents.

But Otter and members of his administration were dissatisfied with
those figures, and demanded revisions.

New estimates emerged Tuesday, concluding this time that a privately
owned prison would actually be less expensive than a state-owned
prison until at least 2042. The big difference: The new estimates
assume a private company won't ever demand that Idaho increase its
annual payments to cover construction costs.

Hensley acknowledges there are no guarantees, but that Idaho could
request such a freeze in an eventual contract.

However, Sen. Dean Cameron, R-Rupert and co-chairman of the Joint
Finance-Appropriations Committee, said it's unlikely an investor-
owned company like GEO or Corrections Corporation of America would be
satisfied with leaving payments to cover construction static for
decades.

"What the analysis fails to take into account are potential increases
in the cost of money over time," Cameron said.

Meanwhile, Rep. Maxine Bell, R-Jerome and the other co-chairwoman of
the budget-writing panel, said allowing a private company to own such
a facility could leave Idaho without adequate control.

She cites an example in which Corrections Corporation of America
earlier this month asked Colorado to approve a 5 percent payment hike
in each of the next five years _ or else it would move Colorado
inmates out of one of its private prisons and bring in prisoners from
California. A Colorado prison spokeswoman confirmed to the AP such a
request had been made.

"We have a good relationship with Corrections Corporation of America
at the Idaho Correctional Center for the simple reason that we own
the facility," Bell said

Hensley countered Otter's legislation will include the appropriate
"sideboards" to avoid the situation Colorado now faces.

"We have the huge benefit that we can learn from lessons of Colorado
and other states," he said.

Both Corrections Corporation of America and GEO have hired lobbyists
in Idaho to push for Otter's changes.

In addition, the companies have given at least $40,000 in campaign
contributions to Idaho lawmakers in recent elections, including at
least $15,000 to Otter's 2006 gubernatorial race.

Few lawmakers have seen details of Otter's plan, but at least some
are warming to it.

"I tend to think there are very few things that government can
provide more efficiently than the private sector," said Rep. Mark
Snodgrass, R-Meridian.