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Other Budget Issues

Last Updated: 2/23/2010
Budget Issue: California Out-of-State Correctional Facility (COCF) program.
Program: Department of Corrections and Rehabilitation
Finding or Recommendation: Reduce Governor's General Fund budget request to expand the COCF program by $547,000 in 2009-10 and $2.1 million in 2010-11, in order to eliminate funding and positions that do not relate directly to the program expansion. Also, consider extending the statutory July 1, 2011 sunset date on involuntary inmate transfers, rather than eliminate the sunset date as proposed by the administration.
Further Detail


In October 2006, pursuant to the California Emergency Services Act, the Governor issued a State of Emergency Proclamation indicating that the level of overcrowding in the state prison system posed a substantial health and safety risk to both inmates and staff. At the time the proclamation was issued, the prison population totaled over 170,000 inmates, with about 15,000 inmates in so-called “temporary” housing in gymnasiums, day rooms, and other common spaces in prisons. In order to help alleviate this overcrowding problem in the short term, the Governor directed the California Department of Corrections and Rehabilitation (CDCR) to immediately contract with and transfer inmates to out-of-state correctional facilities.

In addition, the Governor’s proclamation suspended certain statutory provisions that would otherwise prohibit CDCR from transferring inmates out of state on an involuntary basis. Subsequently, in May 2007, the Legislature enacted Chapter 7, Statutes of 2007 (AB 900, Solorio), which, among other provisions, amended state law to permit the involuntary transfer of inmates out of state until July 1, 2011 or until CDCR replaced all temporary beds in the prison system (whichever occurs sooner). The proclamation also specified criteria for selecting inmates (such as prioritizing those inmates who are subject to deportation or are being placed on parole outside of California) and waived various state contract laws, including requirements for competitive bidding.

After the Governor’s proclamation was issued, CDCR established the California Out-of-State Correctional Facility (COCF) program. Currently, about 8,000 inmates are housed in five out-of-state facilities located in Arizona, Mississippi, and Oklahoma. Most of these inmates require medium to high levels of security and generally do not have any serious medical or mental health illnesses. Since the program began in 2006 all of the out-of-state facilities are operated under a series of contracts with the Corrections Corporation of America (CCA), a private, for-profit company, which were awarded under a “request for information” (RFI) process. (Under an RFI process, which is not based on competitive bidding, potential private vendors provide specific information requested by the department, such as price, bed space, and location.) The facilities offer certain rehabilitation programs, including education and substance abuse treatment. The department’s current contract with CCA is effective until June 30, 2011 and specifies that CDCR can house a total of 10,468 inmates in the out-of-state beds, contingent upon the Legislature providing funding in the annual state budget for these beds. The daily contract rate per bed ranges from $61 to $72.

Governor Proposes to Expand COCF Program

The Governor’s budget proposes to transfer an additional 2,336 inmates to out-of state correctional facilities beginning in early January 2010. This increase would allow CDCR to fully utilize the maximum number of beds authorized in its most recent contract with CCA. In order to account for the proposed expansion of the COCF program, the proposed budget reflects a total net increase of about $100,000 in 2009-10 and
$4.4 million in 2010-11. Specifically, the budget reflects the following adjustments to the General Fund budget of CDCR:

  • A $3.7 million increase in 2009-10, and a $50.3 million increase in 2010-11, for the COCF program to support (1) the increased contract costs for the additional beds, (2) an additional 37.5 CDCR staff positions to directly administer and monitor the program, and (3) correctional officer overtime to provide security coverage when these additional inmates are screened and transported to out-of-state facilities.
  • A $200,000 increase in 2009-10 for 2.6 new CDCR staff positions, and a
    $2.2 million increase in 2010-11 for 31.1 new positions, to support the expanded COCF program. These positions are “ratio-driven” positions, such as correctional counselors and case records technicians, that are budgeted based on changes in the inmate population.
  • A $3.8 million decrease in 2009-10, and a $48.1 million decrease in 2010-11, to reflect a reduction in the operational costs of state-run facilities, including an offsetting reduction in the ratio-driven positions for in-state inmates.

In addition, the administration indicates that it plans to seek legislation to eliminate the July 1, 2011 sunset date on involuntary inmate transfers. However, no such legislation has been introduced at this time.

Governor’s Proposal Raises Some Concerns

According to CDCR, as of February 2010, about 10,700 inmates were still placed in temporary housing in the prison system. Transferring more inmates out of state would allow CDCR to quickly reduce the number of inmates in these temporary beds, particularly in the short term as the various inmate population reduction measures enacted in the 2009-10 budget and the prison construction program authorized in AB 900 are implemented. Thus, we find that that the Governor’s budget proposal generally merits legislative consideration. However, we have identified some concerns with the proposal, including the proposed legislation to permanently allow the involuntary transfer of inmates to out-of-state correctional facilities, that we discuss below.

Certain Additional Positions Not Fully Justified. While expanding the COCF program would create increased workload, our analysis indicates that only 15.5 out of the 37.5 additional non-ratio positions requested are directly related to the expansion. For example, the Governor’s budget proposes an Executive Assistant position to provide secretarial support to the COCF Director. However, the information submitted by CDCR to justify the position does not demonstrate that there would be any significant increase in secretarial workload at the executive level resulting from the additional out-of-state beds. Moreover, some positions are being requested to form entirely new units within the COCF program (such as a gang investigation unit). The department has not provided any justification as to how adding contract beds requires the establishment of these new COCF units.

Additional Funding for Correctional Officer Overtime Not Justified. As discussed above, the budget requests increased funding for correctional officer overtime associated with the expansion of the COCF program ($547,000 in 2009-10 and $68,000 in 2010-11). According to the department, the overtime would result from having to provide security coverage at medical and mental health screenings for the additional inmates who would be transferred out of state, as well as for other inmate processing activities.

The department calculated the necessary overtime costs for 2010-11 using an average of $25 per inmate for institutional processing (which, for 2,336 inmates, would total $58,400), with an additional $9,600 allocated to provide security coverage during the medical screenings. It is unclear whether the department calculated these costs in the same manner for the 2009-10 augmentation it is now requesting. Moreover, it is uncertain whether this additional overtime funding is even necessary, since CDCR has not provided the detailed information on its use of overtime that the Legislature has requested in recent years.

Assumed Implementation Schedule Already Delayed.As previously mentioned, the Governor’s budget assumes that additional inmates would be transferred out of state beginning in early January 2010. However, as of the first week of February 2010, CDCR reports show that there has been no increase in out-of-state transfers. This means that the contract costs reflected in the proposed budget are likely overstated. Moreover, the proposal assumes that all non-ratio positions would begin July 1, 2010, even though the implementation schedule shows that the additional 2,336 beds would not be fully activated until January 2011. In response to our questions on these issues, the administration indicates that it plans to revise the staffing activation dates as part of the May Revision.

Elimination of Sunset Date on Involuntary Transfers Would Make COCF Program Ongoing. The administration’s stated intent to pursue legislation to eliminate the statutory July 1, 2011 “sunset date” on involuntary inmate transfers would effectively make a temporary solution to prison overcrowding a permanent solution. (Since most inmates are transferred out of state involuntarily, the program would likely cease to exist if CDCR could only transfer inmates on a voluntary basis.) Housing inmates in other states—especially states located thousands of miles away from California—raises a number of concerns regarding the ease of access to these institutions for inmates’ families and the public. Moreover, given the inmate population reduction measures recently adopted by the Legislature and the department’s plan to construct additional prison beds as authorized in AB 900, it is unclear at this time to what degree the COCF program will be necessary in the long term to address prison overcrowding.

Competitive Bidding Process Not Being Used. If the Legislature were to eliminate or extend the July 1, 2011 sunset date, it should also consider how CDCR should award future contracts for out-of-state beds. Specifically, the Legislature may wish to consider requiring that the department use a competitive bidding process, rather than the RFI process that was used to award the existing contracts with CCA. This is because competitive bidding generally allows the state to receive the best value for its money, while providing for the greatest degree of transparency. In addition, although the requirements of competitive bidding may have hindered the department’s ability to acquire bed space quickly when the COCF program was first established, it is unclear why the department cannot now plan far enough in advance to use competitive bidding in the future.

LAO Recommendations

 Given that the proposed expansion of the COCF program would help alleviate inmate overcrowding in the immediate future, we believe that the Governor’s proposal to increase the number of inmates transferred to out-of-state correctional facilities merits legislative approval. However, we recommend that the Legislature eliminate the requested funding to support additional correctional officer overtime and the 22 non-ratio positions that do not relate directly to the program expansion. This would reduce the budget request by $547,000 in 2009-10 and $2.1 million in 2010-11. Given that the administration intends to provide updated information regarding the implementation schedule for transferring inmates out of state, the Legislature should withhold final action on the proposal until the May Revision. This is because implementation delays would further reduce the amount of funding needed.

Moreover, rather than eliminate the statutory July 1, 2011 sunset date on involuntary inmate transfers as proposed by the administration, the Legislature should instead consider extending the sunset date for several years. This would provide the Legislature with the opportunity to reassess whether these beds are needed in the long term, given the implementation of legislative decisions to reduce the inmate population and to build additional state prison beds. We further recommend that the Legislature require that any future contracts for the out-of-state bed program be awarded through the competitive bidding process to ensure that the state procures these beds in the most efficient and transparent manner.