Marion County Jail and Public Safety and Government & Economic Development

Sheriff contemplating jail privatization

August 7, 2006

In the overcrowded Marion County Jail, early release of dangerous inmates has become an unpleasant fact of life. To slow the tide, Sheriff Frank Anderson is considering a radical new solution: full privatization.

"A lot of people have a visceral reaction, one way or another, to privatization," said Anderson's attorney, Kevin Murray. "In his view, if it makes sense, it makes sense."

The Marion County Sheriff's Department already outsources some jail management. Now Anderson is quietly exploring hiring a private contractor to operate the entire system. Murray said the sheriff's decision will depend on whether bids from outside vendors show real savings.

Some government observers believe a private firm could manage inmates more efficiently than the Sheriff's Department while maintaining safety standards. Research by the Marion County Auditor's Office has indicated privatization might save up to $6 million a year--generating a windfall of resources that could be used to solve the problem. Exactly how those dollars might be applied is unclear.

But fresh ideas have become increasingly necessary to solve jail overcrowding, which has dogged Marion County for decades. If the jail's population soars too high, a court-ordered cap forces the sheriff to release inmates early. Some of those inmates have gone on to commit new crimes.

In the first half of 2006 alone, 2,168 inmates were released early due to lack of space. That's 373 more early releases than the same period last year, a 21-percent increase. And it's 1,080 more early releases than were necessary for the first half of 2004, nearly a 100 percent increase.

Marion County is on course to release more inmates in 2006 than any year except 2002. Confronting that reality, local officials last week struck a $1.5 million deal with Nashville, Tenn.-based Corrections Corporation of America to squeeze in another 200 beds at Jail II, a medium-security facility at 730 E. Washington St., and manage them until CCA's contract expires at the end of the year.

CCA already manages 992 beds at Jail II. They supplement the 1,135 Anderson's department administers directly in the maximum-security Jail I at 40 S. Alabama St. The sheriff also has access to several other small public and private jail facilities.

Local officials and CCA agree the new beds are only a temporary fix.

With the help of the City Controller's Office, the Sheriff's Department is drawing up a request for proposals from private jail firms who could compete for the next Jail II contract, Murray said. He said CCA has expressed interest in extending its scope to also include management of Jail I.

"Competition is a good thing, because you're going to get a better work product," Murray said.

It's difficult to estimate potential savings because the Sheriff's Department hasn't recently studied the question. The last attempt was in 2003, when the department hired Merrillville-based consultant PTW & Co. to compare costs between Jail I and II.

That study showed Anderson's department actually had slightly lower jail management costs than CCA. But Murray said the analysis didn't include the higher costs the Sheriff's Department now incurs because of changes to inmate services, such as improved food and medical care.

PTW & Co. couldn't be reached for further questions about its study. A recording said its telephone number had been disconnected.

Advocates of full privatization say it might yield incredible savings. Later this month, the Greater Indianapolis Chamber of Commerce plans to release a report called "Invest in Indianapolis Phase II" that lists financial challenges facing the city and county and possible solutions. An advance summary obtained by IBJ says full jail privatization might yield $6 million in annual savings.

The chamber declined to comment about the origin of that figure, deferring to its consultant, Katz Sapper & Miller LLP, which in turn pointed to Marion County Auditor Marty Womacks.

In the spring of 2005, Womacks said, before the city absorbed most of the county auditor's budgetary responsibility, her office began an independent investigation of jail privatization's potential savings.

She said early results indicated Jail I's costs might fall by as much as $6 million annually under a private contractor. Womacks said her staff's calculations were based on prices suggested by CCA, which were then compared with the sheriff's expenses.

"I think it's worthy of investigation," Womacks said." I think we could save significant dollars."

The potential benefit is nearly as much as the $8.8 million in estimated annual savings that drove consolidation of the Sheriff's Department with the Indianapolis Police Department.

Still, city Controller Bob Clifford said it's difficult to make an apples-to-apples comparison between costs for the two jails, and not just because of their different levels of security. For example, because CCA simply contracts to operate Jail II, it doesn't bear the cost of maintaining the building.

Clifford said he's doubtful increased privatization would yield savings, given the findings of the PTW study. But considering local government's cash-strapped situation, he's keeping an open mind.

"I'm certainly willing to look at it. If they could get $6 million in savings over there, I'd be jumping for joy. But I'd be a little bit skeptical to start," Clifford said. "If there were $1 million, I'd be a huge proponent. If there were $500,000, I'd probably still be a proponent."

CCA likely would jump at the chance to take Marion County's jail problem off the sheriff's hands. In addition to the 200 temporary beds it has already promised at Jail II, CCA has floated plans to add hundreds of permanent beds. It could retrofit empty floors for 228 more beds at Jail II and another 600 at the Arrestee Processing Center across the street--neither of which are subject to the 1,135-inmate Jail I cap imposed by U.S. District Judge Sarah Evans Barker in 2003.

With a stock market value of $2.3 billion and 2005 profit of $50 million, CCA is flush with resources. In exchange for a long-term jail contract, CCA said at a recent public meeting it could pay the upfront capital cost of adding the permanent beds.

Barnes & Thornburg LLP Partner Bill Moreau, who represents CCA locally, said the company would respond to any other privatization request Anderson might make.

"Anything that the sheriff would want CCA to do, CCA would certainly try to accommodate his wishes," Moreau said.

But local officials on the Marion County Criminal Justice Planning Council worry about shifting the focus back to buying jail beds.

By consensus, they've concentrated in recent years on speeding up the courts. Improving the trial process reduces the need for early release, because guilty inmates would move on to state prisons, while the innocent would return to their homes.

The MCCJPC fears hiring a private contractor to increase jail capacity will set back their efficiency efforts. Soon the new beds would be full, but the courts would be as backlogged as ever.

"The pressure is to keep warehousing people, to keep putting Band-Aids on the cancer, rather than dealing with the cancer," Murray said. "Job one ought to be to open up the bottleneck and get people to prison quicker."

Whether to further privatize jail operations will be up to Anderson, who has constitutional authority for jail operations.

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