Kulani Correctional Facility on the Big Island will close in October, the Lingle administration announced yesterday, which could save the state $2.8 million to help close a budget deficit.

The state Department of Public Safety said 123 male inmates at the minimum-security prison south of Hilo, including 75 in a sex offender treatment program, would be moved to other facilities such as the Halawa Correctional Facility and the federal prison on O'ahu. Clayton Frank, the department's director, said there are no plans to release any inmates early.

All 76 Kulani staff are on the Lingle administration's list of potential layoffs.

"This was not an easy decision," Frank said at a news conference at the state Capitol. "However, it is my duty and responsibility to find cost-savings and streamline our operations, especially during these tough economic times."

Frank said the prison closure is not a reflection of Kulani staff.

"We recognize this action will have a serious impact on our employees and their families," he said. "But the difficult decision was necessary because of the current downturn of the economy and the ensuing budgetary constraints upon the department."

Big Island Mayor Billy Kenoi and several state lawmakers said they are disappointed by the decision to close Kulani, which they said was made without consultation with the community.

"We know the governor is forced to make very tough decisions because of an incredibly unprecedented and challenging economic environment. We know it's her prerogative to close state facilities as she sees fit," Kenoi said. "But absent information, a lot of concern was being raised by a lot of people in the community. And we didn't have any answers to any of the questions."

The Lingle administration wants to use the 20-acre Kulani site as a second campus for the state Department of Defense's Youth Challenge Academy. The Hawai'i National Guard currently runs a 22-week program at Kalaeloa for at-risk students in danger of not obtaining their high-school diplomas.

Maj. Gen. Robert G.F. Lee said he hopes to start the first Youth Challenge Academy class at Kulani by January. Lee said the state may hire people and use some of the same vendors that now serve the prison, which could help lessen the economic impact of closing it.

Kenoi said he would welcome the new youth academy.

State Rep. Clifton Tsuji, D-3rd (S. Hilo, Puna, Kea'au), said he doubted closing Kulani is in the state's best interest and described the decision as "reactionary."

"The governor may consider this or Mr. Frank may consider this as maybe one of the tough decisions they have to make, but I say today's announcement, without further getting input from the community and even families and employees — at least letting us know that this was going to take place — this was really an economic and community disaster," he said.

Closing Kulani will reduce prison capacity in a system that is already overcrowded. With a lack of bed space and community opposition to new prisons, the state has shipped about half of its prisoners to the Mainland, where costs are cheaper.

Gov. Linda Lingle has resorted to considering layoffs after her furlough plans for state workers were blocked in court. Her administration is seeking to reduce labor costs in collective bargaining negotiations with public-sector unions, and the governor has said she prefers furloughs to layoffs to help close a $786 million deficit through June 2011.

State Sen. Will Espero, D-20th ('Ewa Beach, Waipahu), the chairman of the Senate Public Safety and Military Affairs Committee, said he is surprised that a prison would be among the first programs closed because of the deficit.

"I am surprised that the first group she would announce is public-safety workers," Espero said. "She talked about closing libraries, which I didn't think was right, now closing a prison? I hope it's not just being used as a bargaining chip."

Kulani, which opened as a work camp in 1946, provides vocational training to inmates who are approaching the end of their prison sentences and is also the primary location for the department's sex offender treatment program. The prison can house 160 inmates and costs the department $6 million annually.

Some of the Kulani staff identified for layoffs may have seniority and the ability to bump more junior colleagues at the department. The Hawai'i Government Employees Association said the administration has yet to provide all of the information needed to start the consultation process with unions. Kulani staff are represented by the HGEA and the United Public Workers.

"Gov. Lingle's decision to close Kulani Correctional Facility is of great concern to us," said Randy Perreira, HGEA's executive director. "The closure will have a huge impact not only on the employees who work there, but on the Big Island community as well. The programs provided at Kulani, including the sex offender treatment program, are vital to inmates' rehabilitation process."

The state Department of Public Safety's layoff list also includes the security details assigned to the Hawai'i State Hospital in Kane'ohe, the State Laboratories Division in Pearl City and the state Department of Defense at Diamond Head.