THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Saturday, August 26, 1995 TAG: 9508260381
SECTION: LOCAL PAGE: B1 EDITION: FINAL
SOURCE: BY DAVID M. POOLE, STAFF WRITER
DATELINE: RICHMOND LENGTH: Long : 128 lines
Tennessee officials envisioned big savings a few years ago when they hired a private company to manage a medium-security prison.
A study released earlier this year, however, found little difference between the cost of the privately run prison and two state-run facilities.
Tennessee's experience has done little to dampen Virginia Gov. George F. Allen's enthusiasm for entrusting a portion of the state's $2 billion prison initiative to the private sector.
On Friday, the Allen administration announced the five finalists for the contract to build and operate the state's first private prison - a 1,500-bed, medium-security prison. By year's end, Virginia is expected to have 3,800 private prison beds under contract.
Allen administration officials, confident that Virginia can do a better job than Tennessee, say arrangements with for-profit companies will hasten prison construction and save money.
Jerry Kilgore, Allen's public safety secretary, said the state expects to shave about 10 percent from the cost of keeping prisoners under lock and key. Initial cost estimates should be available by mid-October, when the Virginia Department of Corrections is expected to award the medium-security contract.
Two of the five finalists have had past dealings with the Virginia Department of Corrections:
The Austin, Texas-based Bobby Ross Group operates the Texas prison where more than 700 Virginia inmates are being held.
Corrections Partner's Inc. of Kansas City has provided consulting services to the Virginia corrections department and legislative branches. The company is headed by Robert Buchanan, who - like Allen - played football at the University of Virginia. The company recently was acquired by the nation's largest private prison provider, Corrections Corp. of America.
The three remaining finalists are U.S. Corrections Corp. of Louisville; Wackenhut Corrections of Coral Gables, Fla.; and ESMOR Correctional Services of Sarasota, Fla.
All finalists have selected sites clustered in two regions: Southside Virginia and far southwest Virginia.
Residents in those hard-pressed regions increasingly view prisons - considered a curse in suburban areas - as a blessing that will provide recession-proof jobs to replace opportunities lost in declining industries, such as manufacturing and coal mining.
In Southside Virginia, the leaders of Brunswick County have embraced the Missouri company's bid to build a private, medium-security prison on a tract next to a state-run prison.
``Since Governor Allen has decided to turn Virginia into a prison colony, we in Brunswick County might as well get our share,'' George R. ``Billy'' Smith of Lawrenceville told a local newspaper earlier this year.
Not every community is so eager. A resolution of support for a private prison by the Wythe County Board of Supervisors created widespread public outcry and cost two supervisors the nomination of their political parties in this fall's elections.
In the coal fields, Tazewell County is seeking a prison but only if it is a state facility with a set wage scale. County officials there are concerned that the county's abundance of unemployed workers could enable private companies to drive wages down.
Tazewell County supervisors ``feel the private prison wouldn't help the employment at all,'' County Administrator Dick Farthing said.
State guidelines say the winning bidder can put all 1,500 beds in one facility, or build two 750-bed prisons.
Virginia has been slow to pursue private prisons since a General Assembly panel five years ago recommended a pilot prison.
``Virginia has been flirting with privatization for a number of years,'' Kilgore said.
The flirtation grew into a full-fledged courtship after Allen's election in November 1993. Allen, a firm believer in privatization, needs as many new prison beds as possible after fulfilling a campaign promise to abolish parole for violent offenders.
Earlier this year, however, the Allen administration lost an attempt to contract for a 500-bed pre-release center. Corrections Partners Inc. claim it had a ``handshake'' deal to build a facility in Brunswick County, but the Allen administration canceled the deal over cost concerns.
``It wasn't going to result in any cost savings,'' Kilgore said.
With the corrections question developing into a major issue in General Assembly elections this fall, the Allen administration is eager to demonstrate the importance of private prisons.
The Department of Corrections has put the medium-security prison on the fast track, with a contract announcement expected by Oct. 10. That will be followed by a 1,000-bed minimum security contract and two pre-release center contracts for up to 1,300 inmates.
State law requires that private prison contracts must save money.
The Tennessee study, conducted by the state's Fiscal Review Committee, compared similar correctional facilities: one private and two state prisons.
The analysis showed that daily cost for the state facility was $35.76 per inmate, compared with $35.38 for the private prison - a difference of little more than 1 percent.
The Fiscal Review Committee also found no difference in levels of security and other services.
A 1992 Kentucky analysis of three minimum-security prisons showed savings of up to 7 percent in per-inmate costs for privately run prisons. But the one public prison used in the study was built in the late 19th century, meaning it lacked many modern design features that allow a relatively few guards to look after many inmates.
``We'll be happy for any savings,'' said Kilgore, who has not read the Tennessee study. ``Any savings will mean savings for the taxpayers - even if it is 1 percent.'' ILLUSTRATION: Graphic
THE BIDDERS
Here is a list of five finalists for a contract to build and
manage a 1,500-bed, medium-security prison:
THE BOBBY ROSS GROUP of Austin, Texas.
Proposed Location: Wise County.
Region: Southwest.
CORRECTIONS PARTNER'S INC. of Kansas City.
Proposed Locations: Wythe County, Lunenburg County and Brunswick
County.
Region: Southwest or Southside.
U.S. CORRECTIONS CORP. of Louisville.
Proposed Location: Lunenburg County.
Region: Southside.
WACKENHUT CORRECTIONS of Coral Gables, Fla.
Proposed Location: Mecklenburg County.
Region: Southside.
ESMOR CORRECTIONAL SERVICES of Sarasota, Fla.
Proposed Location: Lee County.
Region: Southwest.
Source: Virginia Department of Corrections and local economic
development officials.
KEYWORDS: PRIVATIZATION PRIVATE JAILS by CNB