City Paper: Documents raise questions about cost of new prison

Published: 12/05/2013

The state Department of Corrections is constructing a $400 million, two-prison complex to replace the aging State Correctional Institution at Graterford, but newly released cost analyses fail to show the projected savings that Gov. Tom Corbett’s administration has claimed.

The administration, under fire for allocating money for prisons while public school districts struggle under severe financial pressures, has insisted that the new SCI-Phoenix prisons will save money in the long run, thanks to $33 million in operational efficiencies and the avoidance of between $50 to $60 million in repairs to Graterford once it is closed.

But two documents recently released by the Department of Corrections (DOC) indicate that the projected savings are based on an analysis, purportedly using data from 2007, that is superficial, unclearly sourced and woefully out of date.

The DOC maintains that these two documents, spreadsheets labeled “construction analysis,” were the only cost-benefit studies of the project ever performed. They include more than $33 million in annual savings — not from operational costs as previously stated, but mostly from the closure of a second state prison, SCI-Greensburg, and the rehousing of its prisoners at SCI-Phoenix. 

However, SCI-Greensburg was closed earlier this year and its prisoners were relocated elsewhere. Bensinger now says that there must be additional “facility reductions” — presumably the closing of a second state prison alongside Graterford, but the DOC declined to elaborate — to make up for the cost of the Phoenix construction. 

But most of Phoenix’s beds will likely be occupied by the inmates moved out of Graterford, since that prison’s population stands at 4,017 — an increase of 33 percent since January 2007. The two new Phoenix prisons, being built near Graterford, have a projected capacity of 4,100 inmates.

Members of Decarcerate PA, the prison-reform group that obtained the documents through a Right to Know request, alleges the DOC has misled the public.

“They’re definitely misleading people about the costs of this prison expansion,” says Decarcerate member Owen Lyman-Schmidt. “We have to ask: If they’re not building these prisons to save us money, as they claim, why are they building them?”

Graterford was built in 1929 in western Montgomery County, where suburban sprawl in recent years has devoured the farmland around Skippack Township.

The Phoenix prison construction was approved in 2008 under Gov. Ed Rendell’s administration and, according to the DOC, the documents were prepared by the department’s Bureau of Administration and shared with Rendell’s Secretary of Corrections and the Budget Office. Ground was broken under Corbett. Corrections Secretary John Wetzel, appointed with a mandate to cut costs, told the Inquirer in June that his “first instinct was to pull the plug. … My assumption was we were not going to build this.”

Indeed, Wetzel has cancelled the construction of one prison and closed two others, and says that he shares Decarcerate’s goal of downsizing the state’s bloated prison population. 

But Wetzel says that cost savings convinced him to stick with the Phoenix project.

Some savings would come from avoiding $50 to $60 million in repairs to Graterford. But while the DOC says that all capital projects at the old prison have been put on hold, the current capital budget reflects $7 million in renovations to Graterford.

Indeed, Decarcerate questions whether Graterford will actually be “replaced”: The DOC has not decided whether to demolish the prison or mothball it for potential reuse. 

In June, the DOC told City Paper that mothballing the prison would cost $5 million annually, but spokesperson Bensinger now says it “will not remotely cost” as much “since we have local staff to maintain security and emergency maintenance.” 

The DOC also has made contradictory statements about whether the cost of maintaining Graterford was included in their cost-benefit analysis. The DOC earlier told City Paper that spending $5 million a year to mothball Graterford “was taken into consideration” as part of the projected $33 million in annual operational savings; the agency now says that “any utility cost for Graterford is not included in the cost analysis.”

Some of Phoenix’s projected savings appear to derive from reduced projected staff-to-prisoner ratios at the new prisons, ranging between 32 and 34 percent below those at Graterford. But the DOC has also said that the new prisons will operate with a similar ratio of staff and inmates. 

There are other aspects of the analyses that appear to be unreliable.

The cost of Graterford and projected cost of the new prison (the latter purportedly based on the combined cost, adjusted for some personnel and utility differences, of two other prisons) do not match DOC records. And the DOC tells City Paper that it cannot explain how, or from what source, the figures were derived.

The cost of borrowing money to pay for the project is also unclear — the DOC declined to disclose the interest rate secured.

In February, Wetzel told the state House Judiciary Committee’s Subcommittee on Crime and Corrections, “We can provide you with the cost-benefit analysis. … The numbers will speak for themselves.” 

But that analysis was not made public, despite activists’ repeated requests. And when the documents were finally released, they did not provide a source for the monetary figures they contained.

In August, the DOC denied a Right to Know request from Decarcerate PA, saying that documents were privileged. But the agency released the documents in September, after Decarcerate appealed to the state Office of Open Records. The documents, however, did not provide a source for the monetary figures. 

Decarcerate is calling for legislative hearings to determine whether the DOC misled the legislature and the public. 

“In a funny way, by giving us these documents and certifying that this is all they have, they’re basically asserting the inadequacy of their own study,” says Lyman-Schmidt. “They represent both a failure of transparency, and also a more functional failure of government. And it needs to be investigated by the government.”