Damon Hininger: Yes. Thank you for the question, Joe. I would tell you, probably in the last 90, 120 days, we’ve been seeing a lot of interest, I’ve noted in my script, not just with counties, but also with the state. So we’ve got a lot of lines in the water, talking to different partners, both existing and potentially new partners. So kind of stay tuned on that front. And again, going back to the Hinds County, that’s a new partner for us. Looking forward to working with them. And I guess, I’ll just remind to all of our investors, especially some of our new investors, I mean, many of our agreements over the last 40 years start with a pretty small contract, where we show our capabilities, we develop a solution for them. They see kind of how the program goes.
We want to often be able to demonstrate very positive outcomes. And then it’s an opportunity where we could potentially grow the partnership based on that performance. So we’re excited about starting this with Hinds County and, pitch a couple other counties that are looking for some solutions. And again, on the state side, seeing a lot of activity. We talked about Idaho in last quarter. I said in my script, we’ve been given the intent to award with Montana for capacity at our Saguaro facility now out in Arizona. And we’ve got active discussions with a couple other states. So, yes, stay tuned. We’ve seen a lot of interest and activity, both with federal, state, and local partners.
Operator: Our next question comes from Kirk Ludtke with Imperial Capital.
Kirk Ludtke: The RFI that you mentioned, which I guess could be an RFP at some point, would that be in parallel with ISAP or would that somehow replace ISAP?
Damon Hininger: It’s hard to say at the moment. Again, I think ICE, as Dave alluded to, with this RFI, I think they’re trying to figure out, one, what the mission would be, what the outcomes they’re looking for a program like this. And so when they put this out the market, they’re looking from us and others to see what the capabilities are. And not only just our technical expertise and staffing, the leadership, and locations where we can perform, but also maybe anything innovative that we can bring that helps them mostly with the mission of that program. So, the short answer is, I think it’s too early to tell, but it’s clearly there. They’re doing a lot of homework on their side. They’re getting a lot of feedback and information from the market on capabilities and innovative solutions.
And again, we think we’ve brought a lot to the table that gives them some things to kind of consider and ponder as they think about what the program looks like going forward? If I get anything you want to add to that, Dave?
David Gutierrez: Not really. I mean, timing is not definitive either. I think they’ll take the RFI information back. If it turns into an RFP, it’s probably middle part of next year to late 2024. So, more of a ’25 opportunity.
Damon Hininger: I guess, I will also say, and add to this delta, Dave, I guess I’ll also say, I mean, the size that they’re looking potentially for this program, I think gives us a feeling that they’re probably looking at multiple, contractors provide that. I think the need and the ability to scale, my guess would be, as I’d probably look at it, okay, we’ll probably need to look at multiple participants in this program to help support the overall need of the program itself.
Kirk Ludtke: There’s more than I guess, monitoring could be defined a lot of different ways, but it requires quite a bit of infrastructure I would think to do this. Like other than you and your primary competitor, who would be qualified to do this?
Damon Hininger: Well, we’re not privy to who’s what submitted, who submitted on the RFI? So I don’t know if I can give you a very good answer on that front. But I’d say it’s probably kind of the range of, not only organizations like this, publicly traded companies, there may be some out there that are maybe in the defense industry world that maybe have some technology or capabilities that are similar to this requirement or these requirements, I should say. And I’m sure there’s probably either some privately held or nonprofit also that are participating. So, probably all those probably show some interest.
David Garfinkle: There’s a lot of different services too that could be included. So, it certainly makes sense that it could be multiple vendors providing the ultimate services.
Kirk Ludtke: And then, one other topic mentioned that you’re in discussions with a number of states. Can you share how many beds are in play?
Damon Hininger: It’d probably be hard to give a definitive number, but it’s meaningful. I mean, we’ve got — again, we’ve talked about, Montana. We talked about Idaho, those were a couple of 100 beds each, the Hinds County couple of 100 beds. So I’d say that’s probably a good estimate. Probably, when we start a conversation bed with a new partner, it’s usually in the range of 200 to 400 beds. Again, we feel like that’s good way to kind of get the relationship started get some time together, show some positive outcomes, and then based on kind of their long-term goals, see if we can grow the partnership.
Operator: Our next question comes from M. Marin with Zacks.
M. Marin : So you have really moved along in this debt reduction strategy, capital allocation policies and just generally strengthening the balance sheet. When you first announced, this strategy, I think one component was to include asset sales in order to increase the cash you had to repay debt, and you were able to sell a good number of assets. So now when you look through your real estate portfolio and you see some of the perhaps older facilities or those that are underutilized. Are there any specific assets that you look at now that you think might be right for divestiture at this point?
Damon Hininger: And the short answer is that maybe 5, 10 years ago, that wasn’t necessarily a thought, for each individual asset, especially ones that are underutilized. But we really think about that for every asset that we’ve got in the portfolio that are partially or underutilized or currently vacant. And then with that, we do a market assessment on potentially, what would the market bear relative to transaction. So nothing, near-term to really kind of point to or indicate that we’re close on a transaction. But I guess the short answer is any facility that we’ve got kind of underutilized, especially if it’s been long-term, we’re considering that. But I guess, anything you could add to that, Dave?
David Garfinkle: Yes. In the short-term, I guess there are some residential reentry centers, both in our property segment as well as in our community segment. They’re not large assets. They’re several million dollars per asset. The larger prison facilities, those are longer conversations. Obviously, more complex with larger dollars associated with the government coming up with the dollars to purchase those facilities. So those are much longer conversations. I wouldn’t say — I’d never say never, but, those are lower likelihood. But I’d say, certainly, in the community and properties portfolio, we’ve got residential reentry centers. We could sell, one or more of those assets. But again, those would not be significant proceeds.
Operator: Our next question comes from the line of Brian Violino with Wedbush Securities.
Brian Violino: Just wanted to clarify in the guidance, you mentioned sustained higher federal and state populations being an underlying assumption, does that — for ICE, I guess, for ICE specifically, does that assume that they’re sustained at the higher levels, like the average level seen in 3Q? Or are you assuming an incremental increase in the average ICE occupancy in the fourth quarter?
David Garfinkle: I would say, modest. I mean, the average population during Q3, we would say, the — guidance would be slightly higher than the average in Q3. So, higher toward the end of the Q3 was, as you looked at sequential months throughout Q3, they continued to increase. And as Damon mentioned, they continued to increase post September 30th as well into the fourth quarter. So our guidance reflects — it’s a range, but it does reflect an increase in the average daily population from Q3.
