A constant refrain in the debate on the local prison project is about the county's liability. The proponents keep telling us "Building this prison won't affect the county's bond rating." Hard to believe.
The county will have to do the contract with CCI for the prisoners. If New York, for example, wants to use the Habilitation house, they have to contract with the county and the county then sub contracts the care to CCI. The requirements for contracting with CCI are spelled out in the Local Government code starting at 351.101. This is not very interesting reading until you get to 351.103 paragraph (6) which says
" (6) if the contract includes operation or management of the facility by the private vendor, provide for a plan for the purchase and assumption of operations by the county in the event of the bankruptcy of the private vendor;"
So if the private vendor, CCI in this case, goes bankrupt then the county must have as part of it's contract a plan to purchase and assume operation of the facility.
Lets see. We have a company with a new, untested, plan and no track record running a prison. The company managing the records and prison industry is "not in good standing" with the comptroller. What is the likelyhood for failure?
They expect us to believe that lenders won't look at these risks when rating the county. How can they be so positive that operating this prison will not affect the counties bond rating?