ARIZONA DEPARTMENT OF CORRECTIONS CHARLES L. RYAN DIRECTOR December 2011

1. ARIZONA DEPARTMENT OF CORRECTIONS CHARLES L. RYAN DIRECTOR December 2011 ADC PRIVATIZATION ASCA PRESENTATION 1

2. ADC Privatization • ADC has approximately 600 contracts that are managed along with all other Department single requirement purchases. • ADC uses private contractors for many functions, although it is prohibited from using private contractors for functions as identified in Arizona state law (A.R.S. § 41-1609.P): • Calculating inmate release dates. • Awarding sentence credits. • Approving inmate work assignments, inmate work wages, and sentence credits given to inmates engaging in the work. • Granting, denying or revoking sentence credits. • Placing an inmate under less or more restrictive custody. • Taking any disciplinary actions.

3. ADC Privatization • The Department uses private contractors to provide a variety of services, including: • Privately operated prisons that house state inmates in Arizona • Inmate food service • Inmate telephone service • Inmate commissary services • Correctional Officer Training Academy foodservice • Inmate Career Training Education (vocational training provided through Arizona Community Colleges). • Many of these contracts represent contract relationships with the private sector going back decades.

4. ADC History of Privatization

5. 1986 to FY 2011 • 1986: Food Service: ADC began privatizing its food services in 1986 and completed a comprehensive RFP for the privatization of all institutional food services in 1997, which remains in place to date. • Food service contracts were $44,348,351 for FY 2011. • 1992: Prison Security System Maintenance: ADC first contracted for Prison Security System Maintenance in 1992. The current contract was effective on May 1, 2009, expiring 2011. • Prison Security contracts totaled $1,576,954 for FY 2011. • 1994: Private Prisons: ADC began contracting with private prisons in 1994. As of August 5, 2011, ADC had five (5) private prison contracts and 6,146 (15 percent) of its 40,168 inmates in private prisons, making ADC one of the highest consumers of private prison beds in the nation. • Private prison contracts totaled $112,356,100 for FY 2011.  

6. 1986 to FY 2011 • 1996: COTA Food Service: ADC Correctional Officer Training Academy (COTA) Food Service was privatized in 1996. The current contract was effective on December 13, 2009, for five consecutive years, expiring December 13, 2014. COTA food service contract totaled $450,000 for FY 2011. • 1999: Inmate Telephone Service: ADC Inmate phone servicewas privatized in 1999. The current contract awarded in 2007 expires October 18, 2014. ADC received commissions for the ADC Special Services Fund of $3,884,803 for FY 2011. • 2001: Career Training Education: ADC contracts with seven (7) Arizona Community Colleges to provide Career Training Education (CTE) programs designed to assist offenders in gaining marketable employment skills. CTE contracts totaled $2,942,007for FY 2011.

7. 1986 to FY 2011 • 2004: Inmate Commissary Service: ADC’s commissary services were privatized in 2004. ADC is currently in a new RFP process for commissary services for a 5-year term. ADC received commissions for the ADC Inmate Store Proceeds Fund of $3,977,320 for FY 2011. • 2006: Re-Entry/Transition Services: ADC contracts with five (5) vendors to provide inmate Re-Entry/Transition Services, including the Transition Program for Non-Violent Offenders (A.R.S. § 31-281 et. seq.); the Community Accountability Program (A.R.S. § 41-1609.05); the Residential Behavioral Modification Program; the Residential Substance Abuse Treatment; and the 2010 Prisoner Re-entry Initiative. Transition services contracts totaled $1,550,044for FY 2011. • 2007: Polygraph Services: ADC Polygraph Services were first contracted in 2007. The current contract was effective on March 17, 2009, expiring 2011. Polygraph service contracts totaled $8,750 for FY 2011.  

8. Oversight Authority • To ensure sound operational practices and maintain public safety, the Department has acted to ensure that contract oversight is as efficient and cost-effective as possible. • The Department, through written policy, requires that each contracted program be assigned a Department Program Administrator. • The Program Administrator is responsible for developing and managing contracted services. • Contract management is specific to the terms, conditions, and requirements of each contract, and is conducted in compliance with all applicable statutes, administrative rules, Department Orders, and Director’s Instructions.

9. ADC State-Run and Private Prisons

10. ADC Facilities by Security Level/Mission DUI = DUI GP = General Population M = Medical MH = Mental Health PS = Protective Segregation R = Reception Physical Security Levels: 5 = Highest (maximum) 4 = High (close) 3 = Moderate (medium) 2 = Low (minimum) MTC GP 3 2 Winslow GP 4 3 2 Geo DUI 2 Phoenix R, MH 5 4 3 2 Perryville All 5 4 3 2 Lewis PS 4 3 2 Florence/Eyman GP 5 4 3 2 MTC GP 2 Yuma GP 4 3 2 Geo (2) GP 3 2 Safford GP 3 2 ADC Owned & Operated Prison Tucson M, MH 5 4 3 2 Douglas GP 3 2 ADC Contracted Private Prison 10

12. Prison Operating Capacity • October 31, 2011 total ADC Prison System Operating Capacity (Rated Beds plus Temporary Beds): 42,393 • ADC State-Run Prison Operating Capacity: 35,855 (85%) • Private Prison Operating Capacity: 6,538 (15%) • The 6,538 current private beds consist of: • 3,750 minimum custody beds (22% of all minimum custody prison system beds): • 1,250 DUI/Substance Abuse/Return To Custody • 2,500 General Population • 2,788 medium custody beds (17% of all medium custody prison system beds): • 1,280 Sex Offenders • 1,508 General Population

13. Prison Population Distribution • On October 31, 2011, the Department had jurisdiction over a total of 45,925 inmates and offenders: • 33,659 inmates incarcerated in Department prisons, including 3,609 females and 96 minors. • 6,444 inmates incarcerated in contracted private prisons. • 5,822 offenders on community supervision (inmates who have been paroled or statutorily released from prison before their entire sentence has been served.) 

15. Private Prisons • ASP-Central Arizona Correctional Facility/CACF (GEO): • Medium Custody/1,280 Beds • Current Sex Offense/Conviction/Sex Offender Treatment • Moderate Medical/Mental Health Needs • ASP-Phoenix West (GEO): • Minimum Custody/500 Beds • DUI Offenders/DUI Offender Treatment • Health Care Cost Limit Per Inmate ($10,000 Cap) • ModerateMedical/Mental Health Needs • ASP-Florence West (GEO): • Minimum Custody/750 Beds • DUI Offenders/DUI Offender Treatment • Return to Custody Inmates • Moderate Medical/Mental Health Needs

16. Private Prisons • ASP-Kingman Hualapai Unit (MTC): • Medium Custody/1,508 Beds • Restricted General Population (Lower Risk Inmates; No Life Sentences, No Murder, No Escape History, No Sentences over 20 Years) • Moderate Medical/Mental Health Needs • ASP-Kingman Cerbat Unit (MTC): • Minimum Custody/2,000 Beds • Restricted General Population (Lower Risk Inmates; No murder, No Escape History) • Moderate Medical/Mental Health Needs • ASP-Marana (MTC): • Minimum Custody/500 Beds • Lower Risk Drug & DUI Offenders/Substance Abuse Treatment • Health Care Cost Limit Per Inmate ($10,000 Cap) • Low Medical/Mental Health Needs

18. Significant Events Affecting Privatization FY 2010 - FY 2012

19. FY 2010 • Privatization: Arizona Laws 2009 mandated major correctional privatization Initiatives: • Lease-purchase agreements for the privatization of state-run ADC prisons (Concession Agreement). • 5,000 new minimum/medium private prison beds. • Privatization of all correctional health services provided in state-run ADC prisons. • Escape: July 30, 2010 Private Prison Escape at MTC Prison in Kingman Arizona.

20. Concession Agreement

21. Concession Agreement • The law originally sought to privatize the operations of nine (9) ADC state-run prison complexes through a Concession Agreement. This included prisons housing Maximum, Close, Medium, and Minimum custody inmates • ADC was successful in working with the legislature to exclude any complex that housed maximum or close custody beds, finally reducing the number of complexes that could be considered for privatization to two (2) rural prisons that housed only Medium and Minimum custody inmates (ASPC-Douglas and ASPC-Safford/Ft. Grant).

22. Concession Agreement • On February 1, 2010, ADC released a Request for Information (RFI) to gauge interest from private companies in these two (2) rural state-run prison complexes. Based upon the responses to the RFI, ADC concluded that privatization was not feasible. • On June 15, 2010, the law was repealed and the privatization effort was abandoned.

23. 5,000 Private Prison Beds

24. 5,000 Private Beds • The law required ADC to issue a Request for Proposal for 5,000 new minimum/medium private prison beds. • On February 23, 2010, ADC released the RFP. • On May 28, 2010, four (4) bidders responded: • Emerald Management Corporation • Corrections Corporation of America (CCA) • Management & Training Corporation (MTC) • The GEO Group, Inc. • On September 1, 2010, in response to the ASP-Kingman escape and given the priority of public safety, ADC cancelled the RFP in order to revise and strengthen the RFP.

25. Private Prison RFP & Contract Changes • Future requests for proposals (RFPs) and contracts for private prisons, including the 5,000 Private Prison Bed contract, will contain new or expanded provisions: • Expanded and better defined RFP evaluation criteria. • More comprehensive information regarding a contractor’s past performance and past occurrences. • Annual re-certification of all security systems. • Staff mechanisms to report problems. • Private prison coverage of costs incurred by federal and other jurisdictions. • Enhanced contract performance auditing guidelines, required performance outcomes and measures, and reporting requirements. • Contract monitoring general requirements. • Additional monetary offsets and sanctions that can be when exigent circumstances occur.

26. 5,000 Private Beds • On January 24, 2011, ADC released the revised RFP • On February 24, 2011, five (5) bidders responded: • Corrections Corporation of America (CCA) • Emerald Management Corporation • The GEO Group, Inc. • LaSalle Correctional Management • Management & Training Corporation (MTC)

27. ADC Facilities by Security Level/Mission DUI = DUI GP = General Population M = Medical MH = Mental Health PS = Protective Segregation R = Reception Physical Security Levels: 5 = Highest (maximum) 4 = High (close) 3 = Moderate (medium) 2 = Low (minimum) MTC GP 3 2 Winslow, 2 3 1,000 Beds Winslow GP 4 3 2 Perryville, 2 3 2,000 to 5,000 Beds Geo DUI 2 Phoenix R, MH 5 4 3 2 Perryville All 5 4 3 2 Coolidge, 2 3 3,000 to 5,000 Beds Florence/Eyman GP 5 4 3 2 Lewis PS 4 3 2 MTC GP 2 Yuma GP 4 3 2 Geo (2) GP 3 2 Safford GP 3 2 Eloy, 2 3 1,500 to 4,500 Beds Yuma, 2 3 2,000 to 3,000 Beds ADC Owned & Operated Prison Tucson M, MH 5 4 3 2 ADC Contracted Private Prison Douglas GP 3 2 Proposed Private Prison Site (RFP) 27

28. 5,000 Private Beds • ADC evaluated the proposals between March – August 2011. As a result of the evaluation, ADC identified various bed combinations, selected the proposals for site hearings, and made notifications as required by A.R.S. § 41-1609.02. • Five (5) Site Hearings were held between August 9 and August 18, 2011: • CCA: Eloy, Arizona • GEO: ASPC-Perryville, Goodyear, Arizona • LaSalle: Winslow, Arizona • GEO and MTC: ASPC-Yuma, Yuma, Arizona • MTC: Coolidge, Arizona • ADC is currently completing the evaluation process necessary to make a final site(s) determination(s) for the private incarceration facility(ies).

29. A.R.S § 41-1609.01 • ADC is in the process of conducting the first Arizona comprehensive biennial comparison of “private versus public provision of services,” required by Arizona state law. • A.R.S. § 41-1609.01(K) requires that for executed private prison contracts, the Department Director conduct a biennial comparison of the private contractor’s provision of services to the state’s provision of services for a similar facility. The purpose of the comparison is to determine if the contractor is providing the same quality of services as the state at a lower cost or services superior in quality to those provided by the state at essentially the same cost.

30. A.R.S § 41-1609.01 • A.R.S. § 41-1609.01(K) identifies ten (10) service areas that the Department Director shall consider when conducting the biennial comparison. They include nine (9) required service areas and allow for additional discretionary services areas as determined by the Department Director: • Security • Inmate Management and Control • Inmate Programs and Services • Facility Safety and Sanitation • Administration • Food Service • Personnel Practices and Training • Inmate Health Services • Inmate Discipline • Other matters relating to services as determined by the Department Director

31. A.R.S § 41-1609.01 • Pursuant to A.R.S. § 41-1609.01(M), the service comparison is limited to contractors who exclusively contract with the Department. In addition, the Department is required to submit to the Joint Legislative Budget Committee (JLBC) for its review each completed service comparison. • The first comparison report will be completed on or before January 2012.

32. Privatization of Inmate Health Services

33. Health Services Privatization • On February 19, 2010, ADC issued a Request for Proposal (RFP) to privatize all correctional health services, in all state owned and operated ADC facilities, at a cost below the FY 2008 costs for these services. • On May 24, 2010, six (6) susceptible proposals submitted. • On June 2010, the ADC FY 2010 actual health care cost of $122,171,259 was $15.2 million less than the FY 2008 actual health care cost of $137,375,452. • On December 14, 2010, ADC presented its findings to the Arizona Joint legislative Budget Committee in Executive Session. • On March 25, 2011, prior to award, ADC cancelled the RFP in anticipation of new legislation related to privatization of Correctional Health Services. • On April 27, 2011, a new law was passed that required a new Correctional Health Services Request for Information (RFI) and Request for Proposal (RFP) process and removed the original requirement requiring ADC to award a Contract at a cost below the ADC FY 2007-2008 total cost.

34. Health Services Privatization • On May 27, 2011, the new RFI was released. • On June 27, 2011, responses were received from ten (10) vendors. • On July 22, 2011, an ADC evaluation team met and evaluated the responses to the RFI. • On July 28, 2011, in JLBC Executive Session, ADC presented the RFI responses. JLBC gave the matter a favorable review, allowing ADC to proceed with the RFP. • On October 25, 2011, ADC issued the RFP with responses due December 21, 2011. • ADC intends the new Contract to be fully operational and all services fully transitioned by June 30, 2012.

35. ASP-Kingman Escape And ADC Response

37. ASP-Kingman EscapeJuly 30, 2010 • 2045 – 2115 hours (8:45-9:15 PM): Inmates McCluskey, Province, and Renwick, with the help of accomplice Welch, escaped; exiting the perimeter of the prison complex on the East side and walking to the North and East of the prison. • 2230 hours (10:30 PM): MTC notified Mohave County Sheriff’s Office. This and all subsequent notifications were later than appropriate. • 2337 hours (11:37 PM): ADC was officially notified of the escape 2 hours after MTC positively identified the inmates had escaped. ADC initiated immediate response action and notified Arizona Governor. • 2337-2350 hours (11:37-11:50 PM): ADC dispatched K9 teams, activated ADC Central Office Emergency Operations Center, and assumed Incident Command. • 0254 hours (2:54 AM): ADC sent out media advisory of the escape. • 0800 hours (8:00 AM): ADC staffarrived on scene in Kingman and took over as on-scene commander. Kingman was directed to immediately enhance perimeter patrols. • 1400 hours (2:00 PM): ADC accepted offer from US Marshal’s Service to assist in the man hunt.

38. ASP-Kingman Escapees Captured August 2010 • August 1, 2010: Inmate Renwick was captured in Rifle, Colorado. • August 8, 2010: Inmate Province was captured in Wyoming, near Yellowstone National Park. • August 19, 2010: Inmate McCluskey and accomplice Welch were captured at a campground near Sunrise Ski Resort, in Arizona, by a tactical-response team of Apache County, Arizona sheriff's deputies, with the help of the Arizona Department of Public Safety and United States Forest Service.

39. ADC Response and Action • July 30, 2010: Movement ceased by ADC Director Ryan. ASP-Kingman population the day after the escapes (July 31, 2010) was 3,390. • August 2010 – February 2011: • ADC conducted a series of targeted Kingman on-site inspections, assessments, and audits. Over 170 serious deficiencies were identified, which required corrective action. • ADC also initiated the most aggressive and comprehensive security reform measures in the history of the Department, conducting state-wide reviews of both private and state-run prisons using a new comprehensive inspection program (GAR/Audit). • September 21, 2010:ADC imposed new inmate restrictions, prohibiting inmates with current or prior convictions for murder, inmates serving life sentences, and inmates with a history of escape, and transferred 238 inmates from ASP-Kingman to other medium custody and minimum custody state prisons. • March 14-17, 2011: MTC was deemed to have substantially cured all deficiencies. Loading of inmates resumed.

40. Work Ahead

41. Work Ahead • ADC is committed to improving performance and efficiency through responsible and viable initiatives that reduce costs, cut bureaucracy, eliminate duplication, and improve customer service. • ADC believes this includes the fiscally responsible use of private partners and continues to explore additional privatization, including: • Statewide ADC Radio Communication System: Privatization of ADC radio services. • Structured Release Programs: Use of day reporting services and/or residential work centers (half-way houses) for released offenders. • Inmate Banking System: Privatization of all or part of the Inmate Trust Account System, bank reconciliation, which accounts for and distributes monies collected from inmates for state and federal filing fees and court ordered restitution. • Employee Background Investigations: Contracting with a service to conduct employee screenings and background checks. • Storage of Criminal Investigation Evidence: Contracting with an evidence depository to maintain chain of possession of evidentiary materials. • Medical Records Management/Imaging Medical Records: Contracting some of the current medical records functions performed by ADC staff. • Occupational Health Services: Partial privatization of occupational health services, specifically TB testing and Hepatitis B immunizations. • Collection of Inmate Fees: Contracting for the collection of fees owed by or accrued by released offenders.

42. Questions? 1601 West Jefferson Street Phoenix, Arizona 85007 602-542-5225 http://www.azcorrections.gov 42