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Jail privatization update

Grits, from about two weeks ago:

In a conference call last week with investors (see the transcript), Corrections Corporation of America said it expects to find out by next spring whether they will receive a contract to operate the Harris County Jail. Said President and CEO David Hininger:

The final update I wanted to give on the new business opportunities is here in Harris County. And just as a reminder, this is the opportunity to take over the entire jail system within Harris County. This is metropolitan Houston. This would be an opportunity to take over a system that has about 9,000 prisoners on any given day. We submitted our best and final for this procurement back in August of this year, and again we think probably later this year, probably early next year is when the county will make a decision on this requirement.

An institutional investor asked Hininger, “Could you describe – give us a little bit more color on Harris County? I kind of had thought that perhaps something might have – a decision might have been made in the fall, and wondering what, if anything, may have changed there?” He replied:

Yeah, good question, I would kind of relate it back to my earlier comment. We just have gotten a sense from our either existing partners or new partners that either opportunities, pending procurements, maybe decisions where they need to move forward on a requirement, a lot of those are just being deferred, either past the election or past the 1st of the year. There was obviously a lot of – everybody in the country was most focused on the national election, but there was a lot of elections going on at the state and local level.

And so, our sense is that we just had a period of time where a lot of decision-makers were sitting on their hands. So I would [say] Harris is probably in that category. And we think we’ve put forth a very compelling and comprehensive and competitive proposal to them, but our sense is probably now that we’re on the other side of the election, either later [this] year or early next year, we’ll see an action being taken by them.

Were Harris County Commissioners waiting for the elections to pass before moving forward on privatization? We’ll soon see. For those interested in (much) more detail, here’s the RFP to which CCA and its competitors are responding. Notably, most of the information the public has been getting on this back-room process has not come from county government but from corporate investor conference calls. That’s never a good sign.

See here and here for the background. I think we can all agree that any discussion about this needs to be held in the open, for all to hear and for all with a stake in the outcome – which is to say, all Harris County taxpayers – to be able to have their say about it. Towards that end, I made a few inquiries about this. County Judge Ed Emmett said this was the first he’d heard about this particular item in many months (the last update I have is from December of 2011, so that certainly tracks for me). He said that right now the RFP that Corrections Corporation of America and any other bidders submitted is being reviewed by the purchasing department, which will when ready present its findings for the Court to consider. At that time, they may or may not take any action, but Judge Emmett assured me that if there was to be anything further on it, that would all be done during open Court meetings as official agenda items.

I also spoke to Commissioner Radack, who characterized this as a very complex process and that the main thing he hoped to get out of it was some lessons about possible ways to be more efficient and save money. I suggested his description sounded somewhat like an audit to me, and he thought that was a reasonable analogy. He stressed that any review of corrections is multifaceted and can take a lot of time – he reminded me that the original proposal of a joint city/county jail facility was made when Bob Lanier was still Mayor – and that his primary goal was the learning opportunity. I did not get the impression he was seeking anything transformational. In fact, I’m reminded as I review the history of all this that the origin was in late 2010 when Radack and Jerry Eversole were complaining about the cost of outsourcing inmates to Louisiana. That was when Radack made his request for a study of ways to reduce costs at the jail, which turned into a formal RFP when then-Budget Director Dick Raycraft came back and said it was the only way to answer the question. And so here we are today, in an environment where inmates are no longer being outsourced and jail costs overall are already lower, awaiting that answer.

Finally, Sheriff Adrian Garcia sent me the following statement via email:

“The county purchasing and budget offices are still working on the request from Commissioners Court in the spring of 2011 to determine if allowing a private company to run the Harris County Jail would be cost-effective for the county and the taxpayers. The study continues.

“In the meantime, I will continue to build on the success that we have had over the last four years in which my staff and I have saved the taxpayers more than $60 million in the operation of the jail and other functions of the Sheriff’s Office, turning a gaping budget deficit into a surplus without degrading public safety or laying off employees. This accomplishment included using a combination of civilian staff and detention officers rather than deputies in some jail functions. Under my administration, the jail has been in full compliance with state standards and inmate deaths have declined. This is a true example of the taxpayers getting the best deal with the sheriff as the direct administrator of the jail.

“I am also mindful of Judge Emmett’s comment that no private detention company has run a jail system as big as ours, and of then-Texas Commission on Jail Standards Executive Director Adan Munoz’s comment that privatization of the jail is not advisable. Their comments also mirror those of sheriffs in other parts of the country who have seen how privatization experiments at county jails have actually cost communities more than when they were run by the sheriff.”

So there you have it. Obviously, this bears watching, and I will be very interested to see what report the purchasing and budget departments eventually make to the Court. In the meantime, I hope this helps shed a little light on what’s going on.

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