SALT LAKE CITY — In the wake of reports that the costs of the new state prison in Salt Lake have been rising — and bed count falling — state leaders on Thursday explained the status of the project and its budget.
Lawmakers last week expressed concerns that the cost of the prison was "out of control" when provided with an update that the price tag has grown to more than $692 million, and may keep increasing depending on the market.
All the while, bed counts have been reduced from 4,000 to 3,600 to control the project's costs.
The governor's office and other legislative leaders held a news conference to clarify how the cost has risen over the past several years and how the budget compares to early estimates that pegged the price at up to $860 million, even though state leaders tasked administrators with completing the project within a $650 million budget.
State officials cited "confusion" over the numbers, and passed out a timeline of cost estimates for the project and reasons for their increases. State officials also explained the project's cost estimates have been difficult to project for multiple reasons, including a hot construction market and the uniqueness of the new prison.
In 2015, estimates ranged from $546 million to $683 million, depending on the prison's size, not including price of land and any needed site preparation. The Legislature then allocated $550 million ($470 in bonding and $80 million in cash) in advance of the site selection, state officials said.
In 2016, the state then contracted with an architect to create a design for the prison that met national standards, addressed future needs of population growth, and aligned with the state's criminal justice reform goals. The consultant then estimated the cost to be about $860 million, according to the state's timeline.
Then, in the summer and fall of 2016, the state's Department of Corrections and Division of Facilities Construction and Management worked with the consultants in an "exhaustive line-by-line review" of the estimate and reduced it to $700 million, the timeline states.
House Majority Leader Brad Wilson said the prison's costs have been difficult to estimate because Utah is building a facility unlike others in the nation, but he said had state leaders "anticipated inflation at the level" of construction prices today, "we would not have believed we could build this prison for $692 million."
"We're very impressed" with the work to keep the cost low, Wilson said.
In 2017, the Legislature authorized another $100 million in bonding to account for infrastructure needed to build a prison in the remote area west of Salt Lake City International Airport, bringing the cost estimate to $650 million.
In an effort to reduce costs, "overall off-site and on-site costs were reduced to right-size the space and meet the appropriation," the state's timeline states. The $692 million figure is a 19.5 percent reduction from the highest estimates, according to the timeline, and is only $9 million more than the upper range of the original 2015 estimate, even though it also includes infrastructure costs.
"None of this is justification for allowing continued misunderstanding about a complex process, nor is it pretext for unjustified cost overruns," noted Paul Edwards, deputy chief of staff for Gov. Gary Herbert.
"Our administration is committed to landing this project on time and on budget, and if we discover the need to revisit aspects of this project that affect either its timelines and its costs, we'll quickly communicate such adjustments," Edwards continued.41 comments on this story
Edwards added that the state isn't "just rebuilding the prison."
"We are rebuilding how we do corrections, and in the process, we are rebuilding lives," he said.
Edwards said the prison project is expected to bring perhaps "one of hte greatest returns we have ever seen from a state investment," noting that the relocation of the prison from Draper will open up hundreds of acres at the Point of the Mountain for development, and is bringing infrastructure to Salt Lake City's long undeveloped northwest quadrant.