State in youth-lockup discussions; talks with Nevada firm center on managing 4 facilities

 The Jump unit, where the more serious offenders are kept at the Alexander Youth Services Center in Saline County, is seen in this March 2007 file photo.
The Jump unit, where the more serious offenders are kept at the Alexander Youth Services Center in Saline County, is seen in this March 2007 file photo.

The Division of Youth Services is in talks with a Nevada-based company to take over management of four of its youth lockups after the corporation running the facilities opted not to continue its contract, citing financial losses.

The division, an arm of the Arkansas Department of Human Services, houses more than 200 children in its residential facilities. It's negotiating with Rites of Passage, the Nevada-based firm that runs the 120-bed Arkansas Juvenile Assessment and Treatment Center in Alexander, according to documents obtained through public records requests.

Rite of Passage submitted a bid for the contract in 2019 but lost it after officials reviewed the firm's history of operating juvenile-offender jails in Colorado, including allegations that the company placed children in unsafe conditions with abusive guards.

The company has said it remains in good standing with Colorado. It still manages Ridge View Academy, a school and treatment center for juvenile offenders in Watkins, Colo.

Youth Opportunity Investments LLC, an Indiana-based company, started running facilities in Dermott, Harrisburg, Lewisville and Mansfield on July 1. The state had hoped to continue working with Youth Opportunity for seven years, but the firm said in February that it wouldn't renew its year-long contract.

The contract is worth more than $15 million annually.

It's set to end June 30.

Before Youth Opportunity took over, the state had managed the facilities since 2017.

Internal emails, many of which were exchanged in late February, reveal that the division is in talks with Rite of Passage to take over the four facilities.

"Could you guys draft another letter to YOI staff letting them know that we are negotiating with ROP and expect to have the details worked out very soon?" Youth Services Director Michael Crump wrote in a Feb. 21 email to Amy Webb, a department spokeswoman.

Webb confirmed by email Thursday that the division is in "active negotiations" with Rite of Passage. She added that the division hopes to have a final contract to present to the state Legislature soon.

"COVID has consumed much of our time but we are actively working on it [the contract]," Webb wrote.

Michael Cantrell, executive director for Rite of Passage, said in an interview Thursday that he's hopeful the contract will be finalized in the next seven to 10 days.

"I think we're getting pretty close," Cantrell said.

Rite of Passage plans to employ any Youth Opportunity workers who want to continue working at the four facilities.

Webb said that while the division expects the new contractor to "hire most if not all of the existing employees," the decision is up to the firm.

Youth Opportunity sent the state a letter Feb. 12, alerting officials of their plans not to renew the contract. They cited financial concerns caused by a decline in the number of incarcerated children.

"We came in, saw this need, we provided what we think was needed. ... We just can't continue to pay for it," Gary Sallee, a Youth Opportunity spokesman, said at the time.

Under its contract, the company is paid according to the number of beds filled.

In 2018, the state launched a juvenile justice overhaul that aims to decrease the length of kids' stays in lockups and to give them treatment at home if possible.

From July 2017 to February 2020, the number of children in lockups decreased by nearly a third -- from 327 to 235. In February, there were six children in county-run juvenile detention centers, compared with 47 in July 2017, state data show.

"We understand that having centers that are not at capacity has a financial impact on YOI," a state news release from Feb. 13 read. "However, DHS has prioritized having youth treated in their communities when it is safe to do so because it is the right thing to do."

Webb said in her Thursday email that while the department is talking with Rite of Passage about other business models, there will still be a daily bed rate in place for the facilities.

Cantrell said that while he's concerned that the financial issues Youth Opportunity encountered will recur with his company, his main priority is providing treatment for children.

"We're just trying to work with DYS to make sure that we have an agreement in place to make sure that all the resources and things are there so we can provide quality programs while executing the governor's goal to overhaul the juvenile justice system," he said.

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Youth detention facilities

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