Background
During its 1994 special session, the Legislature passed Senate Bill 2005 (now codified as MISS. CODE ANN. § 47-5-1201 et seq.) to address short- and long-term bed capacity within the state’s correctional system. The bill created the State Prison Emergency Construction and Management Board to expedite the contracting and construction of proposed public and private prison facilities authorized by the bill.
MISS. CODE ANN. § 47-5-1211 (1) (3) (a) states:
No contract for private incarceration shall be entered into unless the cost of the private operation, including the state’s cost for monitoring the private operation, offers a cost savings of at least ten percent (10%) to the Department of Corrections for at least the same level and quality of service offered by the Department of Corrections.
This section also requires PEER to contract annually with a certified public accounting firm to establish a state cost per inmate day for a comparable state facility. Originally, cost was to be established for medium security inmates only. In subsequent years, MDOC has planned the housing of different classifications of prisoners and PEER has provided cost estimates for those classifications as well.
The law further requires that the state cost per inmate day be certified annually and that the certified cost be used as the basis for verifying the ten percent savings required for private contractor costs.
Chapter 964, Laws of 1996 (Local and Private), established the East Mississippi Correctional Facility Authority. The bill authorized such authority to contract with MDOC for the private incarceration of up to 1,000 prisoners in compliance with the provisions of MISS. CODE ANN. Sections 47-5-1211 through 47-5-1227.
House Bill 1239 (Chapter 562, Laws of 1998) required the Department of Corrections to contract with the City of Walnut Grove or the Walnut Grove Correctional Authority for operation of a maximum security juvenile facility. The act also required that the contracting process conform to MISS. CODE ANN. Section 47-5-1211 and required the PEER Committee, acting through a CPA firm, to determine MDOC’s cost per day for comparable facilities. Presently the Department of Corrections has no juvenile facilities which may be used as comparables for a cost determination. Upon request, PEER could develop a general estimate of costs per day for a juvenile facility using data from the Department of Human Services’ Division of Youth Services and other states.
Cost Per Day Determination
Smith, Turner & Reeves, P.A., provided cost per inmate day determinations for all security levels of inmates combined (i.e., MDOC’s general cost per inmate day) and also on the basis of security classification (i.e., minimum, medium, or maximum) of inmates. Smith, Turner & Reeves also provided a cost per inmate day determination for a psychiatric correctional facility.
MDOC’s FY 1998 general cost per inmate day for a 1,000-bed facility totaled $45.28 and included the following components:
Direct Costs
Basic housing & visitation $27.05
Education & training 1.70
Food 1.48
Farming 0.37
Medical 4.69
Parole Board 0.14
Allocated Administrative Costs 2.28
Total Operating Costs $37.71
Annual Debt Service 7.57
Total Average Daily Costs $45.28
MDOC’s FY 1998 costs per inmate day for individual security classifications in a 1,000-bed facility were as follows: minimum security, $42.90; medium security, $38.99; and, maximum security, $56.19. MDOC’s FY 1998 costs per inmate day for security classifications in a 500-bed psychiatric correctional facility were $54.96 for medium security and $62.16 for maximum security.
FY 1997 and FY 1998 Cost Disparities
This report presents a cost determination. PEER does not express any opinion on the reasonableness of any expenditure reported herein. In response to the rapid increase in the cost per inmate day between FYs 1995 through 1997, the PEER Committee recommended in its FY 1997 cost per inmate day report that MDOC conduct an internal efficiency and economy review to reduce these costs. Although MDOC has not conducted such a review, FY 1998’s $45.28 cost per inmate day is lower than FY 1997’s cost of $46.81. One possible explanation of this reduction in overall cost is that the medium-security South Mississippi Correctional Institution became fully operational in FY 1998 and now has its proper complement of inmates while maintaining fixed operational costs. As a result, medium-security costs have dropped from the FY 1997 level of $46.58 per inmate day to $38.99 per inmate day in FY 1998.
In fact, FY 1998’s minimum security’s cost per inmate day ($42.90) is notably higher than medium-security’s cost per inmate day ($38.99). Traditionally within corrections, it is less expensive to house minimum security inmates than medium security inmates. FY 1998’s minimum-security cost per inmate day, which is based on Unit 25 at the Mississippi State Penitentiary at Parchman, could indicate inefficiencies in minimum costs at Parchman.