Idea of Privately Built Jails Not Promising, County Officials Say

Orange County administrators said Wednesday that they have talked with several finance companies recently about “privatizing” the construction of jails, but that so far it does not appear to be a feasible option.

Under privatization, a company would finance and build the jail facilities, then lease them back to the county. It’s a mechanism that was used in Texas where, as in Orange County, a federal judge ordered corrections officials to relieve overcrowded jail conditions.

In a memo to the supervisors earlier this week, County Administrative Officer Larry Parrish said that, in the long run, the arrangement would be more expensive than if the county built the jails itself.

“The reason Texas chose this option was due to the fact that it was the most expedient way to build a facility, not because it was the most economical,” Parrish wrote.

Suggested by Stanton

The county has estimated that it will cost at least $700 million to build the 6,000-bed jail it has planned for Gypsum Canyon near Anaheim. The construction has been delayed at least a year while the county searches for money.

Even if a private company paid for the construction, Parrish said, the county still would have to find money to repay the builder under a lease-purchase agreement. And because the builder would be making a profit, that arrangement would cost more than the county would pay if it built the facility alone, he said.

The privatization plan was suggested by Supervisor Roger R. Stanton. Stanton did not return phone calls Wednesday.

For several months, the county administrative office has been researching mechanisms for financing the jail construction. The most appealing so far has been a countywide half-cent sales tax. The tax would have to be approved by voters in an election sometime next year.

The county is also looking at a special tax that might be applied to property values. That mechanism would also require approval from voters.

County officials are as uncertain how to pay for operating new jail facilities as how to build them. Costs of operating the proposed Gypsum Canyon jail have been estimated at $90 million a year. The county, meanwhile, is so short of money that it considered layoffs to balance its budget last year.

Parrish said in his letter that the county will also look at the possibility of turning over the operation of the jail to a private company. Under that arrangement, a company would employ the security, food and transportation workers and the county would pay a certain fee for each prisoner.