NORCOR audit finds steep deficits; consultants say $1.7 million needed next year without changes

NORCOR, the regional corrections facility serving Wasco and neighboring counties, faces an acute budget shortfall under current operations, consultants told the Wasco County Board of Commissioners on Feb. 18.

"To remain solvent under the status quo, NORCOR would require an additional $1.7 million in the next fiscal year alone," Monica Morris, the facility’s financial consultant, told the board during a detailed audit presentation. The team analyzed multiple scenarios and said projected deficits could rise in subsequent years unless revenues or operations change.

The audit and cross‑functional review examined the facility’s roughly $13 million budget and found personnel costs are the largest single driver, accounting for about 68% of expenses in the baseline model. Morris and NORCOR Business Manager Nichole Biechler outlined four scenarios: maintaining current operations (Scenario 1), removing juvenile services (Scenario 2), a variant that assumes juvenile funding would not carry over to the adult side (Scenario 2.5), and outsourcing many shared services (Scenario 3). Each model produced sharply different funding needs and operational implications.

Under the status‑quo model, consultants assumed partner counties would maintain current contributions with a 5% annual increase; even so, the model shows a $1.7 million gap in year one and a growing multi‑year deficit without new revenue or structural changes. ‘‘If total operating requirements reach approximately $12.6 million while total resources remain at only $10.7 million, the facility faces a massive $1.95 million gap that requires entirely new funding,’’ Morris said.

Board members pressed presenters on assumptions embedded in the forecasts. Tyler Stone, Wasco County’s administrative officer, described the trajectory as "unsustainable growth," questioning whether budgeted—but historically unfilled—positions should be included in solvency models. Consultants responded that planning on full staffing provides a realistic view of what operations will cost if vacancies are filled.

Scenario 2 considered closing juvenile detention services. While that change reduces some costs, the team cautioned it would not solve the overall problem because much of the adult operation is currently subsidized by juvenile funding. The report’s Scenario 2.5 modeled the effect of removing juvenile services and the roughly $1.2 million in county funds currently allocated to that department; in that scenario the adult side remained severely insolvent, suggesting closing juvenile services alone would not produce long‑term solvency.

Outsourcing shared services such as finance, IT and medical care (Scenario 3) produced mixed results. While outsourcing could reduce some direct personnel costs, the consultants warned it would increase recurring vendor costs—medical services in particular could rise by more than $500,000 annually if fully contracted—and eliminate some local control and flexibility.

The audit also flagged other structural concerns: the current capital reserve (about $100,000) is inadequate for aging infrastructure; assumptions about partner county contributions are not guaranteed; and projections are sensitive to PERS (Public Employees Retirement System) cost cycles.

Next steps identified by the cross‑functional team include exploring additional revenue models (such as increased partner funding or new taxing measures), refining cost allocations for shared services, seeking public input, and developing implementation timelines. The consultants asked county leaders to take the report back to their home counties and return recommendations to the regional committee.

The board did not take immediate formal action on the NORCOR recommendations but directed staff and board members to report back with options for revenue models and policy choices that could be considered by the partner counties.

What’s next: the cross‑functional team will continue work with partner counties to develop concrete proposals and timelines; the board indicated it expects further analysis and public engagement before any changes or funding requests are finalized.