HomeMy WebLinkAboutPS 2019-04-15 Item 2C - Update - SCORE JailCity of Tukwila
Allan Ekberg, Mayor
INFOR ATIONAL E ORANDU
TO: Finance Committee
FROM: Vicky Carisen, Finance Director
CC: Mayor Ekberg
DATE: April 10, 2019
SUBJECT: Update on SCORE Jail
ISSUE
Update the Finance Committee on the status of SCORE jail.
BACKGROUND
In September 2018, Federal Way gave notice of their intent to withdraw its membership and
terminate its participation in the SCORE ILA effective January 1, 2020. Federal Way is an owner
member city along with five other cities — Tukwila, Renton, Auburn, SeaTac and Burien. Des
Moines is also a member city but serves as the host city instead of an owner city.
A sub -committee was formed to examine opportunities to -
1. Reduce costs,
2. Increase revenues, and
3. Restructure the funding formula used to allocate costs among the seven member cities.
With the assistance of Berk Consulting, four sub -committee meetings were convened, and a
report was delivered to the SCORE Administrative Board on February 27, 2019.
DISCUSSION
The 52-page report presented to the SCORE Administrative Board included recommendations in
four major categories:
1. Revenue and cost control
2. Contract reform
3. Member formula reform
4. Recommended management practices
The recommendation pages have been excerpted from the report and are included with this
memorandum as an attachment. Two financially impactful recommendations concern increasing
bed rates for the Department of Corrections (DOC) inmates -- for premium services associated
with specialty housing and for base bed rates. DOC contracts with SCORE for housing services
and utilizes a large portion of available beds. In 2018, approximated half of inmates housed at
SCORE came from DOC under their contract with SCORE.
The SCORE Executive Director and others have been lobbying the legislature to include
increased funding for DOC in the State's budget. The results have been promising as reported
in the March 25 through March 31, 2019 Legislative Update by Foster Government Relations, as
follows.
47
INFORMATIONAL MEMO
Page 2
Law Enforcement
Conversations continue with legislators and staff to discuss the need for an additional $7 million
in funding for the South Correctional Entity (SCORE) Regional Jail. Funding of $3.88 million was
in included in the House budget that would allow the Department of Corrections to increase the
$85/day rate but does not mandate it. The Senate budget includes $7.869 million for increased
jail services although it does not provide a specific daily rate increase.
RECOMMENDATION
For information only.
ATTACHMENT
Federal Way Notification to Withdraw Membership, September 7, 2018
SCORE Sub -Committee Report, February 27, 2019 — Section IV, Recommendations
48
CITY OF
Executive Director Devon |Schrum
SCORE
208I717 1^Avenue South
Des Moines, \NA 98I98
Dear Executive Director Schrum,
MAYOR'S OFFICE
33325 8th Avenue South
Federal Way, WA 98003-6325
Jim Ferrell, Mayor
This letter serves as notice pursuant to Section 4 of the Amended and Restated SCORE Interlocal
Agreement (SCORE |LA),dated October 1,2UO9,that the City ofFederal VVayvviUmdthdrawhs
membership and terminate its participation in the SCORE ILA effective January 1, 2020. The City will
transfer all ufitprisoners out ofthe SCORE facility 6yDec 3l,2O1g.
The City acknowledges its continuing obligation to pay its portion of the debt service onthe Series ZOO9
Bonds issued to raise capital to construct the SCORE facility after it terminates participationinthe
SCORE ILA. During the one-year notice period required under Section 4 of the SCORE ILA, and until the
effective date of the City's withdrawal, the City will continue to participate in the various boards that
govern the 'affairs ofSCORE.
ayor Jim Ferrell
City ofFederal Way
CC: City of Federal Way City Council
49
50
Agenda
A. Continue to pursue better DOC
pharmaceutical reimbursements
✓B. Refinance debt for operational
savings
ontinue to pursue DOC medic
psych housing premiums
D. Continue to pursue DOC base
increases
Revenue and Cost Control
ant!
E. Revisit operations board requests for
field meets, custody transfers, and
felony rushes.
F. Investigate top resource consuming
activities from cost allocation exercise
for efficiencies
SCORE has an opportunity to pursue pharmaceutical reimbursements for DOC inmates that could result in an
additional $ 7 50,000 in revenue from this contract.
SCORE's credit rating improved in 2017 and now has an opportunity to refinance debt obligations. The
average annual savings increases the closer to the call date of January 1, 2020 SCORE refinances.
SCORE should continue to Pursue every advocacy
for Do's use of specialty housing.
e Separate from the premiums, SCORE, perhaps in coalition with other facilities contracted to house DOC
violators, should continue with legislative action to enact a new maximum base rate and escalation mechanism
(inflation) for these contracts. SCORE has proposed a base rate of up to $124 per bed -day and DOC has
proposed an increase to $89.25 (from $85). The DOC proposal would result in roughly $350k in additional
revenue. The SCORE proposal would result in over $3 million in additional revenue.
The Operations Board should consider whether these costs are in line with the SCORE vision of "premium
service" or perks for being a member and worth retaining. This may be considered an acceptable additional
expense for providing member value.
to secure these funds to cover the full cost of service
The cost of service analysis generated data on SCORE activities and cost pools as well as the cost of products
and services. SCORE staff can use these data to investigate activities that appear to consume a large amount
of staff time and resources for potential efficiencies and develop recommendations for the Operations Board.
* ' Completed actions, not yet included in scenario outputs
Impact
150k
—$300k
$1.9m
-$350k-$3
--$0-300k
(total of three
services)
TBD
Agenda 2: Contract Reform
The Admin Board should direct staff and a subcommittee to undertake a comprehensive contract reform effort. The effort
would include understanding the market and designing standard contracts that maximize value to customers, align with true
costs of service, and promote future flexibility. The same group would consider whether a path to membership is a viable
opportunity.
Recommendation
A. Set the stage for contract reform in the
short-term
B. Longer term comprehensive contracts reform
C. Consider articulating the path to
membership for interested cities.
SCORE should increase rates in new contracts using the current structure, and begin the process of gathering
input from customers to understand the perceived value of SCORE to various market segments and to signal
to customers that a new contract structure is in process. Short-term contract options to explore include
charging medical and psych premiums to contract cities comparable to other full -service jails, a nominal
booking fee to discourage booking and transfers, and extending contract termination times (from 30 days) to
provide more stability in revenue.
A new contracting structure can take a strategic and segmented view of the market for services. Some cities
may prefer a streamlined, all-inclusive contract, with high levels of customer service. Others prefer to pay only
what they use and need additional detail on itemized costs. There may be other segments to consider. SCORE
should use contracting relationships to gather information on cities' needs, priorities, and the services SCORE
offers that are the most valuable to them. For each segment, SCORE should develop pricing tiers that match
with levels of service and are able to recover costs of that service.
All funding alternatives analyzed in this study resulted in better outcomes for individual SCORE member cities
when there are more members to share costs. The interlocal agreement does consider the possibility of
additional members but does not go into detail. Other cities may be willing to opt -into membership of the
value was clearly articulated and the staff were to manage toward specific targets for that value.
Agenda 3: Member Formula Reform
Examined alternatives considered criteria of stability, predictability, true reflection of use, and administrative feasibility. No
alternative is optimal according to all criteria. No alternative creates "winners" of all member cities. The Subcommittee
recommends the Admin Board establish clear priorities among these criteria for a formula reform. The Finance Committee
will then develop a new formula under the following guidelines that will be part of a revised/updated ILA.
Recommendation
A. Revise member formula to consider
total costs of owning and operating
as a whole
B. Adjust member funding formula to
use new data
C. Establish a forward update cycle
D. Consider non -formula strategies to
increase stability
Description
We find the current method using two allocation methods (2007 ADP and Last Years ADP) is cumbersome
and can obscure true/full costs of ownership.
The new formula should use recent actual use data (ADP or Value of services
SCORE should also establish a forward update cycle to take advantage of most recent data, but on a
cycle that gives individual cities some predictability.
Strategies may include multi -year budgeting, stability reserve policies, and/or less conservative policies for
budgeting contract revenue.
Agenda 4: Recommended Management Practices
The Subcommittee recommends proactive practices and targets to manage toward maximizing value to member cities.
Recommendation
A. Policy monitoring
B. Marketing research
and strategy
C. Research and
maximize non -contract,
non-member revenue
D. Leverage operating
and financial data
E. Articulate and set
targets for the value of
membership in SCORE
Description
SCORE should proactively monitor developments at the state and local level for potential opportunities and impacts. These may relate to mental health,
substance use, and public health, in addition to public safety. HB 1388 is a current example of reform in behavioral health that can impact SCORE.
SCORE should continually segment markets and develop strategies based on city priorities (reducing recidivism, lowest casts, reducing emergency health
care expenses) which may evolve with time and different administrations. For example, current research on how city budgets being impacted by the opiate
crisis and the return -on -investment for recidivism outcomes can help SCORE develop tailored value propositions to customers.
SCORE should maintain up-to-date understating of federal, state, and county grants that may be related to services they provide. Current trends may create
funding opportunities in chemical dependency (opiates), public health, drug control, and mental health. A few examples of funds that SCORE may consider
pursuing or working with partners to pursue include King County MIDD funds, BJA Residential Substance Abuse Treatment (RSAT), ONDCP).
Defining and monitoring some key metrics from these data will put SCORE in a stronger position to advocate for itself, proactively understand if they are
off track for goals related to member value, and strategically manage the contract side of the business. Some examples of interesting analyses include:
-Track whether (and for which cities) full sentences from contract cities are served at SCORE.
-Track entries to SCORE that were previously turned away from other jails. SCORE may Consider charges for "jailer of last resort" or ways to structure
preferential pricing around "primary jailer" status. This data could also drive advocacy for state and other public funding for psych/high-medical needs
population services
-Inmate mix at the contract level to understand profitability or subsidy at a per jurisdiction basis.
Develop metrics and targets for member value for staff to manage towards. These goals may include a $ per ADP goal (relative to contracts),
timeliness/service goals, a total value of services relative to member contribution goal, a member contribution stability goal.
.1 I