Fiscal Note

2015-2016 Legislative Session

HF3223 - 0 - "House Offenders in Nonpublicly Owned "

Chief Author:
Commitee:
Date Completed:
Agency:

Tim Miller
Public Safety and Crime Prevention Policy and Finance
03/31/2016
Corrections Dept

SPACE

SPACE

State Fiscal Impact

Yes

Expenditures

YES
X

No

Fee/Departmental
Earnings

NO
X

Tax Revenue

NO
X

Information Technology

YES
X

Local Fiscal Impact

YES
X

This table shows direct impact to state government only. Local government impact. if any, is discussed in the narrative.
Reductions shown in the parentheses.

State Cost (Savings)

Biennium

Biennium

FY2015

FY2016

FY2017

FY2018

FY2019

21,873

19,950

23,028

Total
Biennial Total

21,873
21,873

19,950

23,028
42,978

Dollars in Thousands

SpaceGeneral Fund

Full Time Equivalent Positions (FTE)

Space
SpaceGeneral Fund

FY2015
Total

Biennium
FY2016
FY2017
180

180

Biennium
FY2018
FY2019
204
228
204

Executive Budget Officer's Comment

I have reviewed this fiscal note for reasonableness of content and consistency with MMB's Fiscal Note policies.
EBO Signature: Jim King
---- Date: 3/31/2016 5:23:26 PM
Phone:
651 201-8033 ---- Email jim.king@state.mn.us

HF3223-0-House Offenders in Nonpublicly Owned

2015-2016 Legislative Session

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228

State Cost (Savings) Calculation Details

This table shows direct impact to state government only. Local government impact, if any, is discussed in the narrative.
Reductions are shown in parentheses.
*Transfers In/Out and Absorbed Costs are only displayed when reported.

State Cost (Savings) = 1-2

Biennium
FY2016

FY2017

FY2018

FY2019

21,873

19,950

23,028

Total
Biennial Total

21,873
21,873

19,950

23,028
42,978

21,873

19,950

SpaceGeneral Fund

1 - Expenditures, Absorbed Costs*, Transfers Out*

SpaceGeneral Fund

2 - Revenues, Transfers In*

SpaceGeneral Fund

Biennium

FY2015

Dollars in Thousands

Total
Biennial Total
Space
Space
-

Total
Biennial Total

23,028

21,873
19,950
23,028
21,873
42,978
Space
Space
Space
-

Bill Description

The proposed legislation would require the commissioner of the Department of Corrections (DOC) to enter into a contract
to lease and operate an existing prison facility with a capacity of at least 1,500 beds located in Appleton, Minnesota, in
order to address bed capacity shortfalls.

Assumptions

It is assumed this bill would require the DOC to lease and operate Prairie Correctional Facility (PCF), located in Appleton,
Minnesota, to address bed capacity shortfalls.
PCF has a bed capacity of 1,660 beds.
More time would be needed to conduct a thorough analysis of departmental needs and the space, condition and
configuration of PCF; and to develop a more accurate spending pattern and budget.
It is assumed the DOC would lease and operate PCF as a level 3 facility.
The adult operational per diem calculated by the DOC includes costs for three components: prison operations, health
services, and behavioral health.
The estimate for the prison operations component is based on the average per diem for that component for the three
current level 3 facilities (MCFs-Faribault, Lino Lakes and Moose Lake), as adjusted for management services, physical
plant and utilities. Estimates for management services are based on facilities of a similar size; utilities are based on similar
costs at the MCF-Rush City since it's physical plant is most comparable to that of PCF. It's assumed most physical plant
costs would be built into a negotiated lease price, so for the purposes of this fiscal note the estimated physical plant costs
are based on a percentage of the physical plant budget at the MCF-Rush City (20% - 30%).
The estimates for the health services and behavioral health components of the adult operational per diem are based on
the department-wide adult average per diem for those components.
The estimated adult operational per diem to operate PCF, excluding lease costs, would be $90.73 for 550 offenders;
$82.81 for 1,100 offenders; and $80.78 for 1,650 offenders.

HF3223-0-House Offenders in Nonpublicly Owned

2015-2016 Legislative Session

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There would be additional costs for centralized services that are not part of a correctional facility's operating budget,
including offender transportation, office of special investigations, offender records, staff training, information technology,
legal services, human resources and financial services. Those costs are estimated based on a per diem cost of $10.33, as
determined by the most recent offender population forecast adjustment calculation.
The estimated annual cost to operate the PCF, excluding lease costs, would be $20.288 million for 550 offenders; $37.397
million for 1,100 offenders; and $54.874 million for 1,650 offenders.
It is unknown how much an annual lease cost would be. For the purposes of this fiscal note an annual lease cost of $6
million is assumed, which would increase the total annual cost for each scenario.
Opening a facility that has not been operational for several years and preparing it for immediate occupancy of
approximately 500 offenders would require a significant investment in startup costs, including but not limited to:
infrastructure needs related to information technology, security systems, cameras, communication equipment, etc.;
repair and betterment projects, and space modifications that may not be negotiated into a lease agreement;
clothing, mattresses, linens, storage bins and other furnishings and supplies for offenders;
telephones, kiosks and other equipment for use by offenders in living units and common areas;
housekeeping/maintenance supplies and paper products;
medical supplies, equipment and furniture;
food service supplies, equipment and furniture;
staff uniforms, radios and security equipment;
perimeter and fleet vehicles;
office supplies, equipment and furniture.
The amount needed for startup costs is difficult to determine without further review. A conservative estimate of $5 million is
assumed for the purposes of this fiscal note, and would be needed in the first year.
Total costs would be offset by savings the DOC is currently paying to house offenders in county jails. The year-to-date
average of the number of offenders in county jails for FY2016 is 469. Assuming a rental per diem of $55, savings are
estimated to be approximately $9.415 million.
Based on the most recent population projections, and based on current law, it is assumed the DOC would operate the PCF
at a capacity of 550 offenders in the first year, and the capacity would increase each subsequent year. For the purposes of
this fiscal note an increase of 100 offenders per year is assumed, with estimated costs calculated in the same manner as
identified above.
If the DOC were to lease and operate PCF, offenders may be relocated to alleviate security concerns at other correctional
facilities. That cost is not included in the estimates provided.
A greater emphasis on behavioral health services (i.e. chemical dependency treatment, sex offender treatement) would
increase the total cost.
Without a comprehensive staffing analysis, a staffing pattern cannot be completed with total accuracy. For the purposes of
this fiscal note an increase of 180 full-time equivalent positions (FTEs) is estimated for 550 offenders, 300 FTEs for 1,100
offenders, and 420 FTEs for 1,650 offenders.
An effective date is not specified, but it is assumed this bill would be effective July 1, 2016.

Expenditure and/or Revenue Formula

HF3223-0-House Offenders in Nonpublicly Owned

2015-2016 Legislative Session

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Estimated Annual Costs for Prison Beds by Capacity - Prairie Correctional Facility Lease
($ in 000s)
Capacity
Prison Costs
Centralized Costs
SUBTOTAL
Add: Lease Costs

550 beds

1,100 beds

1,650 beds

18,214

33,249

48,653

2,074

4,148

6,221

20,288

37,397

54,874

6,000

6,000

6,000

GROSS Expenditures

26,288

43,397

60,874

Less: Bed Rental Savings

(9,415)

(9,415)

(9,415)

NET Costs

16,873

33,982

51,459

Estimated Costs for Prison Beds by Fiscal Year - Prairie Correctional Facility Lease
($ in 000s)
Fiscal Year

2016

2017

2018

Number of Prison Beds

550

650

2019
750

Cost of Prison Beds

20,288

23,365

26,443

Add: Lease Costs

6,000

6,000

6,000

Add: Startup Costs

5,000

Less: Bed Rental Savings

(9,415)

(9,415)

(9,415)

NET Cost of Prison Beds

21,873

19,950

23,028

FTEs

180.0

204.0

228.0

Long-Term Fiscal Considerations

Costs would continue into subsequent years. In the long-term, prison bed increases would be funded via the biennial
forecast adjustment based on projected changes in the adult offender prison population.
Local Fiscal Impact
Under this bill the DOC would no longer have a need to rent jail beds, except in certain situations. The year-to-date
average of jail bed rentals in FY2016 is 469 beds. Counties would lose approximately $9 million in revenue statewide
each year.
References/Sources
Department of Corrections staff
Agency Contact: Karen Juneski 651-361-7259
Agency Fiscal Note Coordinator Signature: Chris Dodge

Date: 3/22/2016 2:39:39 PM

Phone: 651 361-7264

Email: Chris.Dodge@state.mn.us

HF3223-0-House Offenders in Nonpublicly Owned

2015-2016 Legislative Session

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