Women’s prison in financial trouble

Wednesday, Jan. 2, 2002 | 9:40 a.m.

CARSON CITY -- Financial trouble is brewing at the Southern Nevada Women's Correctional Facility, which is operated by a private company.

The state Department of Corrections has a three-year contract with Corrections Corporation of America, which now says it is losing a lot of money.

The prison in North Las Vegas houses more than 500 women, and the contract doesn't expire until 2004.

But the corrections department is preparing a "request for proposals" to learn whether another private company may want the contract.

"We would hate to wind up like Summit View," said Darrel J. Rexwinkel, chief of fiscal services for the Department of Corrections.

He was referring to the juvenile detention center in Las Vegas, which was run by Correctional Services Corp., another private company specializing in detention facilities. That company is pulling out and Summit View will be closed Jan. 31 until another private contractor is found.

In explaining the request for proposals, Rexwinkel said, "We're trying to cover our bases. If we get a good proposal, we would take a hard look at it."

But Renny Ashleman, a Las Vegas lawyer representing CCA, said the company has not given notice of termination. "We would not leave without having a replacement in place," he said.

Ashleman said CCA welcomes the state's move to look for additional operators, as it will probably confirm that it costs more to run the prison than the state is now paying. He said the state looked at the possibility of assuming control but found it would be too expensive. The state's cost "would have exceeded ours," he said.

This is not a hostile situation, Ashleman said. But he added, "We can't bear these losses any longer."

The current contract calls for the state to pay about $47 a day per inmate with an automatic 3 percent increase each year. The state's budget for this fiscal year to pay for operation of the prison is $10.8 million, and that increases to $11.6 million next fiscal year.

One report is that CCA lost about $1.5 million on medical treatment alone.

Ashleman said CCA, headquartered in Tennessee, is preparing a report on its local financial position. The report should be ready within 10 days. The prison was opened in September 1997, and CCA had a contract to build and operate it for 20 years.

The state had a lease-option to buy the prison after 20 years, but it purchased the center in August, paying CCA $24.1 million.

Because of Internal Revenue Service regulations, the contract between the state and CCA had to be trimmed from 20 years after the building purchase to three years, with an automatic renewal if both sides agree.

Rexwinkel said there have been "many discussions" between state and CCA officials over re-negotiating the contract. He said there is a possibility that the medical services could be contracted out separately, leaving CCA to operate the rest of the prison.

Ashleman said CCA would submit a bid when the request for proposal is ready. But it won't be at the current prices.

There is a dispute, Ashleman said, over medical costs for women inmates who are at state-operated prisons and are then transferred to CCA. There is no cap on the amount of money CCA has to spend for medical services. It provides its own medical staff, but Ashleman said there are outside costs, such as tests, drugs and other items.

In addition, he said, medical costs in Nevada "are extremely high."

If no agreement can be reached, both sides say the prison won't be closed.

When Correctional Services Inc. gave its notice of termination at Summit View, the state Department of Human Resources developed a plan for the state to run the juvenile prison.

But that was rejected on a split vote by the Legislative Interim Finance Committee, which told the division to find another private contractor to operate Summit View. When the center is closed, the juveniles will either be placed on probation or transferred to other programs.

Summit View is not expected to re-open until this summer.