KENTUCKY FIRM, 2 OTHERS BID TO PRIVATELY RUN IOWA PRISONS

DES MOINES, Iowa -- Companies from Florida, Kentucky and Tennessee have
submitted proposals to Iowa Department of Corrections officials to
privately run the state's future prison sites.

Corrections officials are trying to decide whether it is cheaper and more
efficient to privatize future prisons or keep them under state control.

Department Director W.L. "Kip" Kautzky told board members yesterday he was
staying neutral but added, "We ought to look at it."

Kautzky was ready to present a final assessment of the bids submitted by
Florida-based Wackenhut, Corrections Corp. of America of Nashville, and
U.S. Corrections Corp. of Louisville, Ky.

However, two of the seven board members were absent, delaying his report
until next month's meeting in Fort Dodge, where a new 750-bed facility is
set to open April 15.

According to reports submitted to the state, nine communities are proposed
as potential sites.

"The private provider would make the decision on the site, whatever makes
business sense to them," Kautzky said.

U.S. Corrections has proposed the cities of Charles City, Marshalltown and
Ottumwa. Corrections Corp. listed Forest City, while Wackenhut cited
Spencer, Osceola, Sioux City, Fort Madison and Eldora as its possible
locations.

Should the board eventually decide to privatize, legislative approval would
be needed.

Rep. Teresa Garman, R-Ames, and co-chairwoman of a budget subcommittee that
controls spending for the prison system, said she would oppose
privatization and predicted her colleagues on the committee would, too.

Kautzky, meanwhile, declined to rank the bids.

"There are clear and distinguishing variables in each," he said.

For instance, U.S. Corrections, which operates eight prisons around the
country, proposed a staff of 188 people to run its prison.

"Can you legitimately manage a 750-bed facility with that?" Kautzky said.

Corrections Corp. proposed a staff of 226 people, while Wackenhut proposed
hiring 203 people.

Per diem costs, or the average cost to house one inmate per day, also were
broken down, as were other factors, such as support costs, number of
counselors, lease terms, inmate programs and start-up costs.

The proposed per diem cost was $42.19 for U.S. Corrections, $42.75 for
Corrections Corp. and $46.90 for Wackenhut. That compares to Iowa's average
per diem cost of $47.

Corrections Corp. of America is the largest of the three companies. It runs
49 prisons, oversees a total prison population of 38,000 and is a $281
million company.

Wackenhut, which operates 27 prisons in the United States, is worth $88
million, while U.S. Corrections Corp. had a net worth of only $6.3 million
at the end of 1996.

Kautzky said 15 states have hired private companies to run prisons. He said
it appears privatization "has the potential to be more cost effective" than
Iowa's state-run system, although a consultant's report to Iowa corrections
officials straddled the issue.

"The best of the available evidence certainly indicates that privatization
initiatives elsewhere in the United States have proven to be a
cost-effective part of the solution for many of the troublesome problems,"
it said. "However, privatization is not a panacea and it does not come with
guarantees.

"Whether Iowa would have a satisfactory experience with privatization
cannot be determined," it said.