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Texas Towns with Private Prisons Experience Job Losses

by Matthew Clarke

Over a decade ago, with the promise of cost savings as well as stable jobs for the community, local governments in Texas agreed to issue bonds to finance the construction of prisons and jails operated by for-profit companies. But when state and federal authorities stopped sending enough prisoners for the facilities to break even, the companies pulled out of their deals, leaving cities and counties with empty jails and debt payments on the bonds sold to finance them.

In 2007, Burnett County, Texas issued $40 million in municipal bonds to build a new jail. A private operator, Louisiana-based LaSalle Southwest Corrections, was awarded a contract to operate the facility for the Texas Department of Criminal Justice (TDCJ), which used it to house prisoners enrolled in a drug treatment program. LaSalle also signed a deal with the U.S. Marshals Service to hold some of its prisoners.

But the company lost $4 million on the deal. LaSalle had also been cited for failure to provide adequate healthcare in 2009, and for failing a security review in 2014. It pulled out in 2014, just five years after the facility opened, and the TDCJ sent its prisoners elsewhere. But the county still owed its bondholders

Fortunately for local taxpayers, the U.S. Marshals Service continued to house prisoners at the jail. The TDCJ was also in need of more space for female prisoners, so the Burnett County facility now holds some of them. The county reserves another 120 beds for its sheriff’s department, but a majority of the jail’s 587 beds remain empty. In 2016, the county agreed to buy the facility for $14 million, costing bondholders over 60 percent of their investment.

Despite housing the female TDCJ prisoners, which helps keep the Burnett County afloat, TDCJ spokesman Jason Clarke said the state’s total prisoner population is in decline, falling from 156,000 in 2010 to 146,000 in 2017. That year the state closed four prisons.

One of the most recent closures, announced in May 2017, was the Eden Detention Center – formerly the largest employer in the City of Eden, which had just 2,881 residents in 2016. The facility’s 270 employees who worked for CoreCivic, formerly Corrections Corporation of America, lost their jobs.

“It’s devastated our community economically,” said Mayor Eddie Markham. “It’s kind of our rock to us. We’ve depended on it.”

Markham and other local officials worry about not only the loss of salaries for residents who worked at the prison, but also the loss of about $40,000 a month in water and sewer service fees. The facility accounted for 40 percent of the water funds in the semiarid West Texas city.

It also experienced prisoner uprisings and protests over inhumane conditions. The state chapter of the ACLU issued a scathing report on the Eden Detention Center in June 2014.

Mayor James Grant of Bartlett, where the TDCJ closed another 1,000-bed facility, said the revenue his city lost was “a pretty sizable amount.”

“You’re talking about $800,000 annually,” he declared.

Most of that reflects lost utilities revenue, Grant added. But though he would like to see the city repurpose the site – “most likely [as] an industrial complex” – the TDCJ has instead decided to keep the prison empty and on reserve status.

“If for some reason our population numbers go back up and there’s a need for that facility, we would be able to ramp that back up,” explained TDCJ spokesman Clarke.

In 2017, CoreCivic also lost its contracts to operate state facilities in Jack, Rusk and Willacy Counties, resulting in lay-offs of another 518 employees – 192 at the Bradshaw State Jail, 169 from the Lindsey State Jail and 157 at the Willacy County State Jail near Raymondsville. [See: PLN, May 2018, p.32].

LaSalle will take over operation of the Willacy facility, while Utah-based Management & Training Corporation (MTC) was awarded the Lindsey State Jail and Bradshaw State Jail contracts. MTC said it will hire staff to operate those facilities, but emphasized CoreCivic’s former employees did not have a right of first refusal for their old jobs. CoreCivic announced it would be offering opportunities for some of its laid-off employees to transfer to other facilities operated by the company.

The Willacy County State Jail sits next to the site of the former Willacy County Correctional Center, which MTC operated for the federal Bureau of Prisons (BOP) to house undocumented immigrants convicted of crimes. In 2015, a riot and resulting fire destroyed much of the facility and it was closed. [See: PLN, Dec. 2016, p.20].

Consisting of 10 large tent-like domes made of Kevlar, the prison had originally been erected by the county in 2006 to house detainees for Immigration and Customs Enforcement (ICE), which pulled out in 2011 after failing to fill enough of its 3,000 beds. Losing the BOP prisoners when the facility closed cost the county 400 jobs and $8.1 million in annual revenue.

“The jobs are needed and Willacy County remains in need of improving the local economy,” County Judge Aurelio Guerra, who chairs the county commission, said in 2017.

As a result, the Willacy County Regional Detention Center opened in 2018 on the same location, where ICE detainees will once again be housed – this time in a new 1,000-bed facility owned by MTC. Raymondsville Mayor Gilbert Gonzales said he expected the company to hire 50 to 75 workers.

The county had sold the 53-acre prison site to MTC for just over $2 million plus an agreement that released it from the $68 million it still owed to bondholders. As a condition of the sale, MTC agreed to pay $3 per detainee per day to the county going forward. The Kevlar tents have been removed, and prisoners will be held in concrete housing units.

The re-activation of the Willacy facility is a silver lining in the cloud that was cast over the county and local residents following the 2015 riot, when it looked like bondholders and the community would be stuck with an enormous loss.

Other jurisdictions in Texas, such as the City of Eden and Burnett County, have not been as fortunate. 



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