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juvenile center contract

May 12, 2008

Lease may cost $1.3M extra a year

County needs $6.9M a year to run facility, but most it could get from new state rates is $5.6M, if every bed is full.

By Jennifer Learn-Andes jandes@timesleader.com
Luzerne County Reporter
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Luzerne County stands to lose at least $1.3 million per year if commissioners can’t get out of the Pittston Township juvenile detention center lease, according to an analysis of the state’s new reimbursement rates.

The county needs $6.9 million per year to cover its costs – a lease payment to building owner PA Child Care and a management contract with Mid-Atlantic Youth Services to staff and run the facility.

However, the most revenue the county could receive under the new rates is $5.6 million, and that’s a best-case scenario assuming that every bed is full every day of the year.

Here’s why:

Revenue comes from two sources: state reimbursement and payments from other counties that send juvenile offenders to the facility.

The facility has 12 detention beds and 48 for treatment.

The state says the county may charge $232.37 per day for detention, or up to $1 million per year. The county typically uses all the detention beds, and the state picks up half the tab.

That leaves the county with a maximum state revenue stream of $508,890 for detention.

On the treatment side, the facility has 36 regular treatment beds and 12 fire setter/sex offender treatment beds. The state set daily rates at $287.37 for regular treatment and $303.85 for fire setter/sex offender treatment.

The county would make the most by renting out the beds because other counties must pay the county the full daily rate. The county only receives 60 percent to 70 percent of state reimbursement when its own youth are lodged at the facility for treatment.

By renting out all beds, the most the county would receive is $3.77 million for the regular treatment and $1.3 million for the fire setter/sex offender treatment.

The state Department of Public Welfare instituted the new rates after expressing concerns that PA Child Care was receiving too much profit.

The state said the new rates took effect May 1.

However, Commissioner Chairwoman Maryanne Petrilla said the county is trying to seek an extension while it tries to work out an agreement with PA Child Care to end the lease.

Commissioners voted in February to end the lease, but PA Child Care owners Robert Powell and Gregory Zappala have not signed the necessary termination agreement, in part because they are not satisfied with the new rates.

The lease, which does not expire until 2024, was negotiated and approved by Commissioner Greg Skrepenak and former Commissioner Todd Vonderheid.

Ending the lease is a top priority, Petrilla said.

“I’m doing everything I can to get out of the lease. I feel personally that the negotiations are going well, and I’d hope to make an announcement real soon,” Petrilla said.

Minority Commissioner Stephen A. Urban said Skrepenak and others involved in the lease negotiations will owe the public an explanation if the county can’t get out of the lease, which totals $58 million over 20 years, in addition to cost-of-living increases.

“Who were the players in the room, and how did they arrive at that $58 million? I think the people who were in that room need to come clean,” Urban said.

Skrepenak said he and others negotiated the $58 million based on the assumption that the state’s old reimbursement rates would remain in effect, and he believes PA Child Care has an obligation to terminate the lease based on the rate change.

However, the lease contract signed by Skrepenak and Vonderheid does not contain an out-clause in the event of state rate changes.

Jennifer Learn-Andes, a Times Leader staff writer, may be reached at 831-7333.

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