More on Arkansas, from WCC
PR Newswire
February 15, 2001, Thursday 4:31 PM Eastern Time
SECTION: FINANCIAL NEWS
DISTRIBUTION: TO BUSINESS EDITOR
LENGTH: 746 words
HEADLINE: Wackenhut Corrections Declines Extension of Arkansas Contracts
DATELINE: PALM BEACH GARDENS, Fla., Feb. 15
BODY:
Wackenhut Corrections Corporation (NYSE: WHC) today reported that it has informed the Arkansas
Board of Correction and Community Punishment and the Arkansas Department of Correction that the
Company would not consider a third extension of its management service contract for the Grimes and
McPherson Correctional Facilities under the contracts' current terms and conditions. The existing WCC
contracts are set to expire on June 30, 2001.
Dr. George C. Zoley, Vice Chairman and Chief Executive Officer of Wackenhut Corrections, said,
"We value our four-year relationship with the Arkansas Board of Correction and Community Punishment
and the Arkansas Department of Correction. We continue however, to incur substantial financial losses
due to the unexpectedly high cost of women's medical care, and the current contracts do not allow
sufficient flexibility to adequately address these increased costs. Compounding the medical cost issue is
the fact that staffing costs have also significantly increased due to a tight labor market and wage increases
initiated by the State for its own correctional officers."
Dr. Zoley went on to say that the Company does not expect the expiration of the current management
contracts to have any impact on the Company's financial guidance for the fiscal year 2001. Both
Arkansas prisons are owned by the State.
"We are proud of our accomplishments, and we believe that the Grimes and McPherson Correctional
Facilities are operating in accordance with our contract requirements and in line with the State's
standards applicable to State-run facilities," Dr. Zoley said. "Over the last four months, we have made
substantial operating improvements in facility sanitation, staffing levels, employee morale, maintenance
and inmate programs/work details. Both facilities have attained re-accreditation status with the
American Correctional Association and the National Commission on Correctional Health Care."
Dr. Zoley noted, "Naturally, we hope that all of the employees who wish to continue their professional
careers at the Grimes and McPherson Correctional Facilities will be able to do so. We will ensure a
smooth transition of the facilities' operations to whichever organization is next selected to manage the
facilities."
In 1996, WCC was selected as the preferred contractor to design, construct and operate the Scott
Grimes Correctional Facility, a 600-bed young adult male offender facility, and the adjacent 685-bed
women's prison, Ronald McPherson Correctional Facility.