Willacy official questions contract

RAYMONDVILLE — Willacy County Commissioner Aurelio Guerra on Monday questioned a contract that could pay more than $27 million to the company that runs an illegal immigrant detention center here.

Wednesday, members of the Willacy County Local Government Corp., the non-profit organization that oversees the 2,000-bed detention center, will travel to Dallas to close a deal that’s expected to hire Management Training Corp. to run a 1,000-bed expansion.

The $111.5 million contract with the U.S. Immigration and Customs Enforcement would pay Utah-based MTC a “fixed annual fee” of $27.4 million when the detention center’s average monthly inmate count falls below 2,500, the contract states.

The government would pay MTC $27.4 million plus $4.42 a head for each illegal immigrant when the detention center’s average monthly inmate count exceeds the 2,500 mark, the contract states.

“It can be one inmate and we’re obligated to pay $27 million,” Guerra said. “In past agreements, there weren’t fixed fees.”

Under a current agreement, a federal contract pays MTC $27.75 a head for each illegal immigrant held in the 2,000-bed detention center that averages about 1,500 detainees a month.

But the contract does not bind the county to pay MTC $27.4 million a year, said Michael Harling of Municipal Capital Markets Group in Dallas.

The contract would not tap into the revenue that the county needs to repay its debt, Harling said.

First, the government’s money will go to pay the county’s debt, Harling said. Then it will go to pay the county, he said.

“To the extent there is enough money, they will pay MTC,” Harding said.

At MTC, spokesman Carl Stuart said the $27.4 million annual fee would pay the company about $30.13 a head when the detention center holds an average count of 2,500 inmates.

As part of the new contract, the government would pay the county $2.25 a head when the detention center’s average monthly inmate count falls below 2,000 inmates, Guerra said. The contract would pay the county $2.50 a head when the detention center’s average monthly inmate count exceeds 2,000 inmates, he said.

County commissioners on Aug. 21 approved the sale of $50.1 million in bonds to build a 1,000-bed building to expand the 2,000-bed detention center that some call Tent City.

As part of the deal, commissioners approved a plan to refinance the $60.6 million detention center that opened last summer.

The county will sell a total of $111.5 million worth of bonds to fund the project.

The county will repay $54.8 million by September 2010. It will repay $56.6 million by September 2028.

As part of the contract, the government will pay the county $48 per head to pay off its debt.