SUBJECT: Status Report on Reduced Inmate Telephone Call Rates

Transcription

1 County of Santa Clara Department of Correction DATE: January 14, 2016 TO: FROM: Finance and Government Operations Committee John Hirokawa, Chief of Correction SUBJECT: Status Report on Reduced Inmate Telephone Call Rates RECOMMENDED ACTION Receive report from the Department of Correction relating to reduced inmate telephone calling rates in the Santa Clara County jails. (Referral from May 5, 2015 Board of Supervisors' meeting, Item No. 21) FISCAL IMPLICATIONS No impact to the County General Fund will result from the activities described in this informational report, however there will be an impact to the Inmate Welfare Fund (IWF). Preliminary budget projections based on the 3 month pilot show an annual reduction of approximately $150,000 in revenue to the IWF for FY The IWF s FY 2016 fund balance can absorb the current year impact. In FY 2017, as a result of further rate reductions by the FCC (Federal Communications Commission) which are described in more detail below, preliminary budget projections indicate an annual loss of approximately $825,000 in revenue. The IWF Committee will address solutions to this projected shortfall at its March 23, 2016 meeting. CONTRACT HISTORY Prior to current Agreement for telephone services for inmates, the DOC contracted with: Securus Technologies, Inc. (formerly Evercom Systems, Inc.) from August 1, 2003 through November 18, Pacific Bell beginning in 1987 to 2003, under three separate agreements. In 1997, Southwestern Bell Corporation (SBC) acquired Pacific Bell, and SBC continued to do business in Santa Clara County as Pacific Bell. In June 2001, the DOC hired Public Communications Services (PCS) to manage the SBC contract. PCS was able to secure upgrades to the telephone equipment at Elmwood, installation of call monitoring systems, improvement of inmate telephone maintenance and repair services, and improvement of the accountability of SBC for inmate call revenues. Board of Supervisors: Mike Wasserman, Cindy Chavez, Dave Cortese, Ken Yeager, S. Joseph Simitian Page 1 of 6

2 Most recently, the Department of Correction (DOC) issued a Request for Proposals and eventually selected Global Tel-Link (GTL) as the supplier inmate telephone services. The contract with GTL was initially set to run from November 19, 2010 to November 30, The contract has now been amended to run for two additional years, through November 15, REASONS FOR RECOMMENDATION At the direction of the Public Safety and Justice Committee and the County Board of Supervisors, a management audit was performed of the Inmate Welfare Fund. The focus of the audit was to examine the administration and operations of the IWF and identify opportunities to increase IWF efficiency, effectiveness, and economy. One recommendation was: Implement a pilot program for a period of three months (September to November 2015) by amending its [DOC s] contract with Global Tel-Link to reduce intrastate calling rates to match San Francisco s intrastate rates. On May 5, 2015, the Board directed the Department to implement a pilot program for a 3 month period for intra-lata and local calls for inmate calling sevices using criteria set forth for the intra-lata calls [equal to the rates charged in San Francisco County jails] and delegated authority to Administration to negotiate similar reductions for the local calls. Subsequently, the Board s intent to included changing all per-minute call rates, with the objective of reducing the costs to families and friends. This report includes information on the negotiated rate reduction for inmate telephone calls, and reduced cost to families and friends as a result of 3 month pilot. Also in collaboration with County Counsel, an analysis is included of the recently adopted FCC (Federal Communications Commission) regulations, which will result in significant further reductions to the cost of jail calls if they are implemented. As a result of the August 1, 2015 negotiated rate reduction, the number of average calls per inmate per month has increased from 16.9 to 20.3, an increase of 20%. The pilot is described in detail below, but it should be noted that because of the positive impact of the pilot, the Department is continuing the pilot indefinitely (or until further reductions by the FCC). CHILD IMPACT The recommended action will have no/neutral impact on children and youth. SENIOR IMPACT The recommended action will have no/neutral impact on seniors. SUSTAINABILITY IMPLICATIONS The recommended action will have no/neutral sustainability implications. BACKGROUND Negotiated Rate Reduction for Inmate Telephone Calls In order to implement the audit recommendation to reduce the rate to match San Francisco s rates and implement a 3 month pilot, staff needed to negotiate an amendment to the existing agreement with GTL. On May 5, 2015, the Board approved a delegation of authority for the Chief to negotiate an amendment that would help the department to implement the Board of Supervisors: Mike Wasserman, Cindy Chavez, Dave Cortese, Ken Yeager, S. Joseph Simitian Page 2 of 6

3 recommendations. Other changes were also made in the amendment that reduced costs to family and friends and increased the number of available services. An important component besides the per minute charge reduction is the reduction and elimination of certain administrative fees charged to families/friends for account setup and closeout. Also, two new payment solutions were added so that family and friends have more options depending on their needs: PIN Debit allows the inmate to purchase debit minutes from their commissary, and Advance Pay is a prepaid collect call option. Advance Pay costs less than a standard collect call, and is meant for families/friends who want to use the system once in a while and do not need to set up an account with GTL. This amendment was signed on August 17, 2015, but the rate reduction was put into effect on August 1, 2015 so that family and friends would have the benefit of a rate reduction sooner. The table below summarizes the changes in the amendment with GTL. Charge for local to match San Francisco rates Charge for local extended to match San Francisco rates Fee for families to deposit $25 into account Fee for families to deposit $50 into account Old Rate $2.95 first minute 7 to 15 first minute 6 to 8 addt l minute $2.95 first minute 7 to 25 first minute 6 to 20 addt l minute New Rate $1.35 first minute 10 each addt l minute $1.67 first minute 17 each addt l minute $4.75 $2.50 $9.50 $2.50 Account Closeout Fee $5.00 Free Commission Percentage 61% 71% PIN Debit Calling Not Available Available Advance Pay Not Available Available Voice Messaging Not Available Available 500 Mobile Tablets * Not Available Available * Tablets can be used for phone calls, , games, and music. DOC staff is developing a plan and timeline to test and pilot the devices before distribution to the facilities. After the testing and implementation phase, DOC plans to work with the vendor on additional content, such as streaming movies and providing electronic educational material. Board of Supervisors: Mike Wasserman, Cindy Chavez, Dave Cortese, Ken Yeager, S. Joseph Simitian Page 3 of 6

4 Federal Communications Commission (FCC) - Further Notice and Rule Making County Counsel has provided the following analysis of the new FCC regulations: On October 22, 2015, the FCC proposed new regulations that, if implemented, would limit the amount that can be charged for inmate calls. Those new regulations were published in the Federal Register on December 18, Caps on the rates that inmates may be charged for telephone calls become effective on June 20, Caps on per-minute charges to jail inmates are tiered based on inmate population. The first tier includes jails with an average daily population of fewer than 349 inmates. The second tier includes jails with an average daily population between 350 and 999 inmates. The third tier includes jails with an average daily population of more than 1000 inmates. Santa Clara County falls into this third tier. Cap on prepaid calling rates: For prepaid or debit calling, the cap on per-minute charges for Santa Clara County inmates will be $0.14 per minute. Cap on collect call rates (not prepaid): For collect calls, the cap will be phased in over three years. Beginning June 20, 2016, the cap will be $0.49 per minute. Beginning July 1, 2017, the cap will be $0.32 per minute. On July 1, 2018 the cap will be $0.14 per minute. Limits on ancillary service charges: The regulations also limit ancillary service charges. The only ancillary telephone service fees that may be charged are for: 1) automated payment fees, 2) for single call and related services, 3) for the use of a live operator, 4) for a paper billing statement, and 5) for thirdparty financial transactions. The FCC regulations cap automated payment fees at $3.00 per use. The current fee of $2.50 per transaction charged to County inmates is already in compliance with this cap. Other ancillary fees are not addressed in the County s current contract with GTL. Legal challenges to the FCC regulations: Several service providers, including GTL, have sued to block implementation of the new rate caps. County Counsel is monitoring those lawsuits, and will update the Board if there is any change to the regulations or their implementation date based on the litigation. Reduced Cost to Families and Friends As a result of the negotiated rate reduction above that made Santa Clara County rates match San Francisco rates, per-minute call rates have decreased which decreases costs to families/friends. Pending the implementation of the FCC Notice and Rule Making in June 2016, costs to families/friends will be reduced even further. Board of Supervisors: Mike Wasserman, Cindy Chavez, Dave Cortese, Ken Yeager, S. Joseph Simitian Page 4 of 6

5 Call Type Effective Per-Minute Inmate Call Rates (Prepaid Calls) Before GTL Phone Contract Amendment 8/1/2015 After GTL Phone Contract Amendment on 8/1/15 FCC Mandate Effective 6/20/16 Local - Overall Average $0.304 $0.190 $0.140 Interlata $0.897 $0.281 $0.140 Interstate $0.210 $0.210 $0.140 International Mexico $1.200 $1.970 No change Other International $1.500 $1.970 No change For ease of comparison, note that because there is a 1 st Minute Sur-Charge for all calls prior to the pending FCC mandate, the per-minute rate is the calculated per-minute rate for a 15 minute call. Inmate Telephone Call Revenue In the first months following the negotiated rate changes on August 1, 2105, the average monthly revenue and commissions paid to the Inmate Welfare Fund (IWF) have also decreased. However, effective with the August 1, 2015 contract amendment, GTL pays telephone commissions to the IWF at the rate of 71% (up from 61%) of gross inmate telephone call revenue (except revenue for interstate calls, in compliance with a February 2014 FCC mandate). This increase in commission percentage has softened the impact of rate reductions on IWF revenue. In summary, following the August 1, 2015 negotiated rate reduction, inmates are making more phone calls, the calls are lasting longer, and costs to families/friends are significantly reduced. This pattern of more frequent and longer phone calls is consistent with the Department s observations of the impact of reductions in the interstate calls as a result of the 2014 FCC mandate. As a result of the August 1, 2015 negotiated rate reduction, the number of average calls per inmate per month has increased from 16.9 to 20.3, an increase of 20%. Preliminary budget projections based on the 3 month pilot show an annual reduction of approximately $150,000 in revenue to the IWF for FY The IWF s FY 2016 budget can absorb the current year impact. In FY 2017, with the May 2016 FCC rate reduction, preliminary budget projections indicate an annual loss of approximately $825,000 in revenue. The IWF Committee will address this projected shortfall at its March 23, 2016 meeting, but in the meantime the 3 month pilot has been extended indefinitely. The IWF Committee would need to review whether or not commission payments to the Santa Clara County Inmate Welfare Fund would continue or be reduced if the pending FCC mandate is implemented. CONSEQUENCES OF NEGATIVE ACTION Board of Supervisors: Mike Wasserman, Cindy Chavez, Dave Cortese, Ken Yeager, S. Joseph Simitian Page 5 of 6

6 The Board would not receive information on negotiated rate reduction for inmate telephone calls, the recent FCC (Federal Communications Commission) ruling, and reduced cost to families and friends using the inmate telephone system. STEPS FOLLOWING APPROVAL No further action is required. LINKS: Linked To: : Board of Supervisors: Mike Wasserman, Cindy Chavez, Dave Cortese, Ken Yeager, S. Joseph Simitian Page 6 of 6