Business Az Usual

A gruesome death has cost Arizona's multimillion-dollar teen rehabilitation industry a bundle. But it's not because the state is determined to stop the abuse.

And the kids who were once a terror on the street are now feared on the field--Boys Ranch has become a powerhouse in high school sports, winning respect and several state championships. Former Arizona State University football coach Frank Kush is an administrator at Boys Ranch. He was hired by the program after losing his job at ASU for allegedly punching a player.

VisionQuest includes similar basic training but has many more programs. In addition to its own version of boot camp, VisionQuest offers a wagon train that has teens pack from state to state alongside highways; a Buffalo Soldiers program in which black youths reenact U.S. Cavalry traditions; and OceanQuest, a seagoing voyage where teens have to learn to sail and manage a boat. VisionQuest's frontier experiences are designed to teach the kids self-sufficiency and self-respect.

Currently, California has 888 kids in out-of-state placement (down from 1,012 at the end of March). Almost a third of them, 318, are at Boys Ranch and VisionQuest.

Dan McAllair, an analyst with the Center on Juvenile and Criminal Justice, says Boys Ranch and VisionQuest are so popular "because the publicly run alternatives are so dismal." California kids either end up in the California Youth Authority (CYA), the state's prison system for teen criminals, or "warehoused" in overcrowded county group homes.

"Judges are left with the least damaging alternative, and that's these programs," McAllair says.

VisionQuest and Boys Ranch claim lower recidivism rates for kids who get through their programs; though no really comprehensive industry-wide research has been done, both camps cite studies done on their own programs that seem to bear them out.

But much of what makes the Arizona camps attractive to California officials is purely financial.

Last year, CYA raised the fees it charges California counties to house young criminals. Instead of coughing up a possible $35,000 per year per kid for CYA housing, counties opted to send kids to out-of-state facilities like Boys Ranch and VisionQuest. When counties send kids out of state, the California Department of Social Services picks up two-thirds of the fee, using state and federal funds. That leaves the county's share at only about $1,000 a month. Any way you look at it, it was a bargain for the counties.

And serious money for the camps. Boys Ranch charges $3,600 a month, or $43,200 a year per kid. VisionQuest charges $3,583 a month, or $43,000 a year.

California counties also get state education funds to pay for the kids' schooling. San Joaquin County, for example, sends $2.3 million a year to Boys Ranch for schooling.

While both Arizona Boys Ranch and VisionQuest are nonprofit organizations under the law, they are still run like businesses, and they still have to make money to keep going, even if they don't call it profit.

Boys Ranch is a tax-exempt charitable organization, founded in 1949 by a group of Rotarians. Today, it's run by CEO Bob Thomas, who is appointed by a board of directors. Its operations now encompass six campuses in Arizona and three out-of-state offices.

Fueled mainly by California tax dollars, Boys Ranch has had steadily increasing revenues over the past several years, climbing from about $19.6 million in 1995 to $26.5 million at the end of its most recent fiscal year, according to financial statements filed with the state.

Almost all of that came from fees charged by Boys Ranch to the government agencies that send kids to the facility. Almost all of the kids at Boys Ranch were sent there by California probation officers. According to Boys Ranch's most recent financial statements, nearly 91 cents of every dollar it brought in came from the fees charged to California counties.

San Bernardino and San Diego counties accounted for $7.5 million of its income last year alone. When the California Department of Social Services announced it would no longer pick up the tab for Boys Ranch, it effectively lost its largest customers.

Since 1990, Boys Ranch has also received about $5.3 million in contributions and grants, according to reports filed with the IRS.

The CDSS decision turned what looked like Arizona Boys Ranch's best year into one of its worst, according to Thomas.

Before Nicholaus Contreraz's death, Boys Ranch was on track to bring in $22 million in revenue this year, according to Thomas' estimate.

That's since dropped to just $5 million, he says. If Boys Ranch were a publicly traded company, investors would be screaming.

Boys Ranch's loss has been VisionQuest's gain. Eleven kids from Boys Ranch have been transferred to VisionQuest's care, and more could be sent in the future.

That is, if VisionQuest has the room. It's done even better than Boys Ranch in the juvenile-justice business. Though the company's Cochise County camp holds only 190 teens, VisionQuest has programs for both boys and girls and deals with about 1,500 kids nationwide. That's added up to $36.6 million in revenue in 1995, growing to $42.3 million for the most recent fiscal year, according to reports filed with the state. VisionQuest's Arizona operations alone brought in $9.8 million in revenue last year, those reports state.

VisionQuest's corporate structure is different from Boys Ranch's. Founded by Bob Burton and Steve Rogers in 1973, it's a nonprofit corporation that also has a for-profit side and several for-profit subsidiaries. In addition to Arizona, the company has operations in Texas, Pennsylvania, New Jersey, Oklahoma and Florida.

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