Kansas Private Prison Plan Locked Up For At Least Two Weeks

Jan 4, 2018

CoreCivic CEO Damon Hininger talking about a plan that would have the state lease a new Lansing prison from his company.
Credit Jim McLean / Kansas News Service

A deal to farm out the next new prison in Kansas to a private firm -- one that would replace the outdated facility in Lansing and lease it to the state -- hit a delay Thursday.

The State Finance Council, which would have to sign off lease-to-buy contract, said it needs two weeks to further study the details of a plan to pay CoreCivic Inc. $362 million over 20 years.

Several members of the council said they didn’t want to approve the deal until the state and the company finalized their contract negotiations.

“I don’t want something inserted tomorrow after we sign off today,” said Senate Majority Leader Jim Denning, an Overland Park Republican.

The concerns of some council members go beyond the contract. House Minority Leader Jim Ward, a Wichita Democrat running for governor, said he didn’t consider CoreCivic a “reliable partner.”

“They have a history of not telling the truth,” Ward said, citing a report issued in 2016 by the U.S. Department of Justice inspector general that was critical of the company’s security record and a lawsuit filed by CoreCivic shareholders contending that the company’s leadership had failed to disclose information about risks to its government contracts.

Damon Hininger, CEO of Nashville, Tenn.,-based CoreCivic, said the vast majority of its government clients renew their contracts.

“If we’re not doing a good job, if we’re not making the mark on quality, if we’re not being cost effective,” he said, “they’re going to cancel our contracts.”

A new prison would lower the cost of housing inmates in Lansing and that the lease agreement would protect the state from cost overruns and spiraling maintenance costs, Kansas Corrections Secretary Joe Norwood told the council.

In September, corrections officials said they wanted to sign an agreement by the end of 2017.

A state audit completed in the summer of 2017 challenged prison officials’ argument that a lease-purchase deal would prove cheaper than a state-built facility financed with bonds. But Norwood said the auditors used faulty assumptions to reach that conclusion, noting that their calculations mistakenly included a balloon payment at the end of the lease.

The new Lansing facility, located on the outskirts of Kansas City, would hold about 2,400 inmates, about 100 more prisoners than the existing compound.

Norwood said most of the construction dollars would stay in the state, listing Kansas City’s J.E. Dunn as the general contractor and a handful of companies from Johnson County and Topeka as the architects, plumbers, electricians and concrete specialists.

The new facility would cut the labor needed to man the prison roughly in half to a little over to about 370 staff.

“Our estimated staff savings is a little more than $17 million per year,” Norwood said.

Ditching the deal, he said, would burden the state with the cost of urgently needed renovations at the state’s 155-year-old prison.

Republican Gov. Sam Brownback didn’t object to the delay but said the state badly needs a new prison, noting that the existing facility “predates Abraham Lincoln.”

“It desperately needs help,” Brownback said. “It smells. It needs a lot of work.”

The Republican-controlled Legislature approved a new Lansing prison last year, but before the Finance Council scrutinized any contract. In December, top GOP lawmakers said they were on board with a lease with CoreCivic.

Members of the Finance Council are Brownback, and eight legislative leaders, six Republicans and two Democrats.

The buy-or-lease decision comes as the state’s prison system appears increasingly beleaguered. It’s overcrowded and some inmates were moved from Lansing to El Dorado Correctional Facility, which then saw an hours-long uprising in June.

Jim McLean is managing director of the Kansas News Service, a collaboration of KCUR, Kansas Public Radio, KMUW and High Plains Public Radio covering health, education and politics. You can reach him on Twitter @jmcleanks.