Kansas agency, firm bolster lawmaker support for prison plan
By JOHN HANNA
Dec. 22, 2017
TOPEKA, Kan. (AP) — Kansas corrections officials and the company picked to build a new state prison have bolstered support for their plan among top Republican legislators, making it more likely their project will get the final go-ahead.
Three key Republican legislators said after a briefing this week that they're more comfortable with a state Department of Corrections plan to have the nation's largest private prison operator, CoreCivic Inc., build the new prison for 2,432 inmates in Lansing, in the Kansas City area. It would replace the state's oldest and largest prison there.
CoreCivic, based in Nashville, Tennessee, would oversee construction and lease the new prison to the state for the facility's first 20 years. The company would handle upkeep during those 20 years, but the state would staff the prison and control day-to-day operations.
A state audit this summer suggested a lease-purchase deal would prove more expensive than having the state issue bonds to finance the project. The department and CoreCivic disagree and have been working for weeks to convince top legislators a lease-purchase deal is better.
"A lot of questions have been answered," said House Speaker Ron Ryckman Jr., a Kansas City-area Republican. "I'm much more comfortable."
The GOP-controlled Legislature authorized the new prison earlier this year, allowing either financing option. Parts of the existing prison date to the 1860s, and there's bipartisan agreement it is aging badly. Many lawmakers believe that a new, modern prison could be staffed safely with fewer employees.
But lawmakers were wary enough about the project to give a second and final say to the governor and eight legislative leaders, the nine of them collectively known as the State Finance Council. Six of the legislators are Republicans, including Ryckman.
The governor and five lawmakers must say yes for the project to move forward. GOP Gov. Sam Brownback's administration is confident enough to have tentatively set a meeting for Jan. 4 — four days before the full Legislature opens its next annual session.
The outlook did not look as good two weeks ago.
Another legislative committee that reviews building projects recommended that the department delay the prison project to solicit new bids with bond financing.
Before Wednesday's budget panel briefing, four of the Finance Council's six Republicans, including Ryckman, were undecided. The two Democrats were openly skeptical.
This summer's audit said a lease-purchase agreement could cost up to 16 percent more than financing the prison with bonds.
When The Associated Press filed an open records request earlier this month for any completed studies or reports countering the audit, the department said it had none, largely because CoreCivic and a second, unsuccessful bidder submitted proposals only for a lease-purchase deal.
CoreCivic CEO Damon Hininger told legislators this week that the company believes auditors' methods were sound but key assumptions "were not completely fleshed out."
Auditors assumed Kansas would issue $155 million in bonds — the amount lawmakers authorized. CoreCivic expects its costs to run between $160 million and $165 million.
Hininger said bonds would be more expensive partly because Kansas would get all of its funds at once and start paying back the bonds immediately. He said CoreCivic can tap its funds from private investors as bills come in, lessening debt payments over time.
He said if auditors did another review, "We are confident that our proposal would be the most cost-effective solution."
The lease-purchase deal still faces criticism from the Kansas Organization for State Employees, which called it a "scheme." Senate Minority Leader Anthony Hensley, of Topeka, and House Minority Leader Jim Ward, of Wichita, still are not sold on the project ahead of the final vote.
"It's being rushed," Hensley said, adding that the state should reopen bidding to get proposals to finance the new prison with bonds.
Yet even after saying she would remain "open" ahead of the final vote, Senate Ways and Means Committee Chairwoman Carolyn McGinn, a Wichita-area Republican, said, "I do feel more comfortable about it after getting more information."
Another previously undecided leader, House Appropriations Committee Chairman Troy Waymaster, a western Kansas Republican, was even firmer.
"They put a lot of questions to rest," Waymaster said.
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