Officials react to GEO Group, Inc. not extending contract to North Lake Correctional Facility

LAKE COUNTY — The North Lake Correctional Facility being emptied of prisoners is nothing new to public officials in Lake County.

Officials are waiting to see what direction GEO Group, Inc., will take since recently announcing the decision to not extend the contract to keep housing Vermont prisoners at the correctional facility in Webber Township.

“We have notified the State of Vermont that we will not exercise our renewal option for the contract to house Vermont inmates at the North Lake facility in Michigan effective June 2017," Pablo E. Paez, vice president of corporate relations for GEO Group, Inc., said.

"Over the last year and a half, our partnership has allowed the State of Vermont to meet its need for safe, secure, and humane correctional management and rehabilitation services, and we look forward to working with the State of Vermont to ensure a smooth transition over the next six months," he said.

If the GEO Group, Inc., retains ownership of the building and property after the contract expires in June, revenues the prison generates into the county won't be affected too much, however, if the prison passes into state hands, the county will feel it, according to Lake County equalization director Al Enciso.

"If they do pull out, it will negatively affect revenues in not just Webber Township, but also schools in the district and county tax dollars during settlement time in February and March of every year. Still, the effect wouldn't show up on the tax rolls until 2018," Enciso explained.

"As of now, the prison still exists. They haven't pulled anything out of there yet. There will be a projected value decrease, but this will not affect the values in 2017 because everything was still in operation on tax day (Dec. 31, 2016) and this will be reflected on the tax rolls for 2017. In 2018, however, this will be taken off the roll," he said.

Superintendent of Baldwin Community Schools Stiles Simmons said if GEO Group, Inc., pulls out, it would affect the school's budget.

"We will see less revenue if GEO walks away of the prison is sold to Michigan State Department of corrections. If it just sits empty we will still collect revenue. It is not good news the contract is not being extended, but we just have to wait and see what happens," Simmons said.

"In the event GEO Group walks away and the Michigan Department of Corrections takes over, we could loose $540,000 annually," Simmons continued. "It will compel us to take action to offset the loss of revenue. It is a sizable chunk of our budget. We will continue to be good stewards of the taxpayers' dollars, but would have to be more frugal if we lose those funds."

Ernie Wogatzke, supervisor of Webber Township, said the township would feel the effects if the prison were to close, but the township does not rely solely on tax revenue from the prison.

"If it were to close, it will affect us a little, but we never based our budget on the prison," Wogatzke said. "It is nice to have an organization that employs people, but we don't put our eggs in one basket.

"If they close it will only hurt us if the state takes over, because our income is based on property taxes. We will feel it, but we won't go in the red. Even if the prison was bought by the state, we would be hurting a little because the township doesn't get revenue from state-owned land, but we get money by land tax from all the other properties in the township."

James Truxton, president of the Baldwin Village Council, said GEO Group,Inc., not extending the contract won't hurt the village too much, but it would put a damper on plans for upgrading the wastewater treatment plant, which GEO Group Inc., offered to help fund if the number of prisoners ever rose to more than 500.

"It isn't going to affect the village a great deal. We are treating 30,000 to 40,000 gallons of wastewater a day, and that will maybe cost us $100 more a day, but there won't be a direct economic fallout to the village," Truxton said.

He did note the drawbacks.

"There will be people without jobs. The presence of the prison helped the local economy. They bought their supplies locally.

"For the village, it won't have direct negative tax consequences, but if the prison is bought by the state, it could be a big deal for people. If GEO had up to 500 prisoners they were going to fund some upgrades with the wastewater treatment, so we will have to scale down on these plans or look at approaching it in different ways.

"There wasn't a huge impact last time it was empty, but GEO Group kept the system from going stagnant, like flushing toilets to help with the wastewater flow," he said.