Rent-a-Cell Trend at Jails Not Always Key to Revenue

It will have more beds than the Hilton and El Dorado Hotel combined. The kitchen will be top-notch, ground transportation provided. You won’t need to bring a toothbrush or even a change of underwear, but what you will need is a criminal record.

It appears there will be plenty of room at the inn--in this case, the Santa Fe County Adult Correctional Facility, scheduled to open next month. The likelihood of unoccupied beds in a jail might be viewed as manna for many communities, but not here.

By building a facility significantly larger than what is required to serve its needs, the county is hoping to cash in on crowded jail conditions in other parts of the state and country. In a tactic being used elsewhere in the nation, officials hope to rent out bed space as a means of paying for the $22-million facility.

The problem is, there have been no takers. Corrections officials in almost every county in New Mexico as well as the states of Hawaii, Oregon and Delaware have been approached, but no contracts have been signed.

Further complicating matters is that the going rate for inmate per diems, estimated at $70 in 1995, has dropped to an average closer to $50. As government and private operators have gone on a prison building spree and as they vie for bodies to fill them, the price has plummeted.

At one point, there was hope that the jail would generate enough revenue to not only pay off the bonds that financed the project, but also to cover payments to the private firm operating the facility. Now, says County Manager David Wolf, “We are just hoping to break even.”

Adding to the county’s concern is that it still doesn’t know who’s going to run the facility. The old jail is operated privately by Cornell Corrections Inc., based in Houston. Cornell and the county have been unable to agree on a new contract, and while negotiations continue, the county is approaching other private operators. If all else fails, County Commissioner Javier Gonzales says, the county will operate the jail itself, something it hasn’t done for more than a decade.

The old jail, which opened in 1981, has a capacity of 244. It now houses about 340 men, women and children, some of them sleeping on borrowed cots. The new facility, for adults only, will have 648 beds. Rios says the old jail likely will be used solely for juveniles.

Knowing that the old jail did not allow for adequate expansion, the county realized it had to build a new one. The question became how big, followed by the inevitable concern of how to pay for it.

“I think the idea of building the extra beds, one, was to be able to grow into it,” Gonzales says. “Then the idea came through communication with people across the country, to private vendors, that we can establish a public/private partnership where we can lease the beds and subsidize costs. But in my mind, first and foremost, was building a facility we could grow into.”

In planning the facility just outside the city, the county relied heavily on two 1995 studies, both of which underestimated the rate of growth in the county’s own inmate population, says Wolf, resulting in fewer available beds to rent out.

One of their biggest competitors is Texas. There was a time in Texas when local jails were crammed with prisoners who were awaiting space in the equally jammed state prison system. As the state nearly doubled its capacity, inmates were moved, and beds opened up at the local level.

Local and private jails in Texas now bring in prisoners from Oklahoma, Wisconsin, Hawaii, Massachusetts, Idaho, Wyoming and New Mexico. The state, already in need of more space, also is once again renting from local jurisdictions. In total, there are 2,675 out-of-state inmates and 2,111 state inmates being housed in local and private Texas jails. The going rate, says Lynn Weatherby of the Texas Commission on Jail Standards, is about $40 per person, per day.

For tiny Dickens County, Texas, building its own jail has been a “godsend,” says County Judge Woodie McArthur, who also serves as county administrator.

“Our intent when we built the facility in 1990 was to create jobs for the community,” McArthur says. “We had lost over 25% of our population in 10 years, and we had to do something.”

The jail created more than 100 jobs in the community of 2,500 people. When McArthur took office in 1988, he had to borrow $10,000 just to make payroll. Two weeks ago, they sold the jail for $9.2 million to a private operator and banked more than $6 million. “That’s a lot of money for a little bitty broke community,” the judge says.

Since 1990, the Albany County Correctional Facility in New York has brought in about $30 million by renting empty cells. This year alone, the jail is expected to bring in $4 million.

Such stories fan the hopes of Santa Fe County. But the fact that neither operator nor boarders have been established also fans the ire of critics. Some oppose the whole concept of privatization in corrections, and others oppose building such a large facility.

“Any time you build a facility that is significantly larger than the needs of the county, the tendency is to fill it up,” says criminal attorney Dan Cron. “I believe what will happen is that people who have been convicted of offenses who ordinarily would not be sentenced to incarceration now will be because there is space available.”

Cron also says that corrections should remain within the domain of government and that it is not good policy for private business to profit when there already is a shortage of funds for jail programs and measures addressed at reducing crime.

Ken Kerle, managing editor of American Jails magazine, a publication of the American Jail Assn., says building correctional facilities as a means of generating revenue is part of a scenario that could lead to “correctional bankruptcy.”

“It’s an irrational policy when crime rates are going down,” Kerle says. “What happens when the bodies stop coming?”

County spokesman Juan Rios says that its 12-year history with privatization has shown that it works in the best interest of the county and that he is hopeful that once the facility is completed, there will be both an operator under contract and other jurisdictions ready to rent beds.

“The reality is that we need to protect the financial interests of the citizens of the county,” Rios says. “If that means that we have to use the additional beds to generate revenues, to minimize the costs, we’ll do it because we don’t want to go out there raising property taxes or taxes at all.”