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New Prison Contract Overdue
Hawaii Reporter
Friday, May 27th, 2011
Posted by Jim Dooley
BY JIM DOOLEY – Although Gov. Neil Abercrombie has said repeatedly he wants to halt out-of-state incarceration of Hawaii prison inmates, the state is finalizing the award of a new, three-year contract for Mainland imprisonment of up to 2,000 convicts.
The contractor selection was supposed to be made at the beginning of this week, but a public safety official said the issue was still being finalized.
A spokesman for Corrections Corporation of America (CCA), the company that owns a private Arizona prison where some 1,900 Hawaii medium security inmates have been held, said he could not comment because contractor selection is still underway.
Abercrombie and other officials say new prison space, owned by the state or a private partner, needs to be developed here.
The new Mainland prison contract award is being made against the backdrop of recent studies by the Hawaii Auditor and the Arizona Department of Corrections which question the true costs to taxpayers of privately-operated prisons.
CCA’s current agreement to house Hawaii inmates at Saguaro Correctional Center expires June 30.
The new contract is to take effect July 1 and last three years, with two possible annual extensions beyond that, according to the bid request published by the state earlier this year.
The state can cancel the contract with three months’ notice.
At present, the state is paying CCA $63.22 per day for each of the 1,900 or so inmates held at Saguaro, which is located in Eloy, Arizona, about halfway between Phoenix and Tucson.
The present contract has an automatic escalator clause in the per diem rate and the charge has risen between two and three per cent annually since 2007, when it was set at $57, according to a December 2010 report Prison Audit from the office of Hawaii Auditor Marion Higa.
Costs to Hawaii for Mainland incarcerations have more than tripled since 2001, rising from just under $20 million annually to more than $60 million, according to Higa’s audit.
In-state prison expenses were more than $167 million last year.
Higa’s study was harshly critical of the state Public Safety Department’s reports to the Legislature on prison costs, saying the department used different methods to calculate in-state and out-of-state expenses.
“Management chooses to report artificial cost figures derived from a calculation based on a flawed methodology, designed entirely on what is easiest for the department to report,” Higa said.
“Because funding is virtually guaranteed, management is indifferent to the needs of policymakers and the public for accurate and reliable cost information. As a result, true costs are unknown,” said the audit, which was prepared before the Abercrombie administration took office.
One of the audit’s complaints was that didn’t use exact inmate counts for its in-state expense numbers, instead basing its reporting on the total number of prisoners that could be held in state-owned prisons.
And some overhead and administrative costs assigned to in-state operations should have been counted as out-of-state costs, Higa found.
Each bookkeeping method increased the costs of in-state incarcerations and decreased out-of-state costs, Higa said.
A recently-released study by the Arizona Department of Corrections of that state’s contracts with private prisons reached some of the same conclusions.
The study did not include the Saguaro facility. No Arizona prisoners are held there.
Like Higa’s study, the Arizona the report found that per diem rates charged by private prisons did not include “inmate management” expenses which the state also had to pay for privately-incarcerated inmates.
“As a result, the ‘real’ costs for private contract beds are understated in comparison to the reported costs for state beds,” the report said.
And the report pointed out that private prisons are selective about the types of inmates they accept.
Prisoners with severe physical or mental health problems are either not accepted by the private contractors or their treatment expenses are billed separately to the state, the report said.
That’s the situation with Hawaii’s CCA contract, according to Higa’s report and language in the new contract bid.
One factor in deciding whether to ship a Hawaii prisoner to Arizona is that there are “no medical or mental health conditions that may affect an inmate’s ability to function within a normal range,” Higa reported.
The pending contract requires the vendor to pay the costs of routine “medical, mental health, and dental service.”
But some expenses must be paid by the state, including hospital physician reimbursements, surgeries and other “invasive procedures” and procedures involving anesthesiology, the contract language stipulates.
In those cases, the contractor must pay the first $2,000, but the state is responsible for the balance, according to the contract.
In a response to Higa’s audit, newly-appointed Public Safety Department director Jodie Maesaka-Hirata made it clear that no matter how the numbers are sliced and diced, private prisons are cheaper than Hawaii lock-ups.
Maesaka-Hirata is a leading advocate for bringing Hawaii inmates home to local prisons or to expanded community release programs.
She told Higa the price for 1,000 or so inmates now imprisoned at the Halawa Correctional Facility is double what it would be if they were held in Arizona (assuming the private prison would accept them).
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