McHenry County’s contract with ICE may not be nearly as profitable as was previously thought

In a Thursday discussion of the McHenry County Jail’s contract with the U.S. Immigration Customs and Enforcement agency, County Board members reviewed financial documents that suggest the county is not making nearly as much of a profit from housing immigrant detainees as was previously thought, now that the detainee population has dropped considerably.

During the meeting, board member Kelli Wegener said she was concerned by the lack of transparency into the expenses associated with the ICE contract.

“Because we can’t specifically identify the expenses associated with ICE, we don’t know how much profit, if any, the county is making on the contract,” Wegener said Thursday. “No company would run a project or a division without knowing if it was benefiting the company.”

In a Thursday Finance and Audit Committee meeting, Wegener and fellow board member Michael Vijuk spoke on behalf of a recent push to end the county’s intergovernmental agreement with ICE, in which the county is paid $95 a day for each immigrant detainee housed in the jail.

A resolution to end the contract was set to be brought before the County Board for a vote in August, but was tabled because board member Carlos Acosta thought the board needed more information on the jail’s finances before voting and requested a report from staff.

County Administrator Peter Austin has said that the ICE contract brought in an average of $6.8 million a year in revenue over the past three years. In August, Acosta pointed out that the board should consider the contract’s expenses as well as its revenue to get a clear determination of whether it is fiscally responsible.

“The frustrating part is we haven’t been able to really grapple with what [the jail’s fixed costs] are,” he said then. “What’s the break-even point, and at what point do we start losing money?”

The jail’s detainee population had been declining even before the COVID-19 pandemic and is now dropping even more, Wegener said Thursday. At the end of 2017, the jail was housing an average of 280 detainees. As of August of this year, that number was down to 154, she said.

Based on her analysis of the financial reports provided by the McHenry County Sheriff’s Office, Wegener said that if that lower number held steady, the county would make an estimated $1.8 million annually, considerably less than previous years.

The report from the sheriff’s office said that the county would need to maintain a detainee population of at least 27 people to break even, but Wegener said that calculation failed to factor in the jail’s fixed costs, which add up to an estimated $617,579 each year.

Wegener said her estimates rely on the information available, which do not clearly delineate the amount of the jail’s expenses that can be attributed to the ICE detention program.

“So with all of this information or lack of it, do we want to risk possible lawsuits to justify $1.8 million of annual income?” Wegener asked the group.

Wegener and Vijuk said that the detainee population will likely continue to decline as the federal government has shifted its focus to the pandemic. A number of initiatives have been introduced in the U.S. Congress that are designed to reduce the country’s immigrant detainee population, Vijuk said.

Board member and chair of the committee, Michael Skala, pointed out that those federal initiatives are being discussed in the U.S. House of Representatives, where there is a Democratic majority, and are relatively unlikely to make it through the predominately Republican Senate.

A few other counties in the region, including Winnebago and Kankakee, are thinking about opening or expanding ICE detention facilities, which Vijuk said could reduce the demand for use of the McHenry County Jail and, therefore, lead to a further decline in the detainee population.

Financially, “I see a downward trend,” Vijuk said. “The profit is a matter of concern ... If we anticipate a 132% increase in detainees, well, then we’re going to be making a lot of money. I don’t see us getting to 255 [detainees] anytime soon.”

Apart from the question of whether to discontinue the ICE contract, the decline in revenue is a concern in balancing the sheriff’s office’s budget for the next fiscal year, Skala said.

“Let’s just say that we keep the contract but we see a loss in revenue, where are we making that up?” he asked county staff members in the room. “If that revenue stream goes away, by whatever means, I don’t think that we want to be caught flat-footed ... we’re talking about millions of dollars.”

As a next step, Skala called upon the staff of the sheriff’s office and the financial department to come up with a list of ways to trim the budget to prepare for a decrease in revenue – whether it be because of a cancellation of the contract or a continued decline in detainees.

Wegener suggested that staff look into other potential uses for the detention center space as an added source of revenue if the contract is eliminated.

Skala concluded that the committee would revisit the issue in a month’s time.

With the help of county staff, Skala said he thinks board members are getting closer to understanding the “full picture” of the ramifications of continuing or discontinuing the jail’s contract with ICE.

“I’m not here to discuss the ethical side of this,” Skala said. “I want to get the financial side of it – what our committee is supposed to be doing – and provide that to the full board so that they have a financial picture so that they can make the best decision that they can make.”