LFC HEARING BRIEF
AGENCY: New Mexico
BACKGROUND INFORMATION
Corrections Department
New Mexico’s incarceration rate has steadily increased for
DATE: June 14, 2005
males and females alike. Driving While Intoxicated (DWI) laws,
sex offender laws, mandatory minimum sentences for certain
PURPOSE OF HEARING: crimes, and “truth-in-sentencing” laws that require serious
Inmate Growth,
offenders to serve 85 percent of their prison sentences have
Population Control
added to the increasing inmate population.
Strategies, Prison
Capacity and Possible
CAPACITY AND POPULATION GROWTH
Locations for New
Prison
JFA Associates, formerly of George Washington University,
projects the average annual inmate growth for the state of New
WITNESS: Joe Williams, Mexico. The FY06 forecast of inmate growth is down to 2.3
Secretary, New Mexico
percent. As of May 31, 2005, the inmate population was 6,576.
Corrections Department; A 2.3 percent increase in FY06 translates into an increase of
Erma Sedillo, Deputy
approximately 151 more inmates.
Secretary Operations,
New Mexico Corrections The New Mexico Corrections Department’s (NMCD) monthly
Department; Jolene
statistic report shows as of May 31, 2005, there were 21
Gonzales, Deputy
general population beds available. At the current growth rate,
Secretary
NMCD will need more capacity in three months or less. The
Administration, New
greatest need for additional capacity is for medium security
Mexico Corrections
Level 3 beds.
Department
Corrections Population Control Act. In 2002, the
PREPARED BY: Renada Corrections Population Control Act was enacted as a tool to
Peery, Fiscal Analyst
relieve overcrowding if the prison population was to go over
capacity. Section 33-2A-2 NMSA 1978 states the purpose of
EXPECTED OUTCOME:
the Corrections Population Control Act.
Inform committee of the
population growth,
The purpose of the Corrections Population Control Act [33capacity issues, and
2A-1 NMSA 1978] is to establish a corrections population
control commission that shall operate as an autonomous,
differences between
public and private
nonpartisan body. The commission shall develop and
prisons in regards to
implement mechanisms to prevent the inmate population
expanding prison beds.
from exceeding the rated capacity of correctional facilities
and shall take appropriate action when necessary to effect
the reduction of the inmate population.
The governor or the Corrections Population Control
Commission may order the commission to convene at any time
to consider the release of nonviolent offenders who are within
180 days of their projected release date. The Corrections

LFC Hearing Brief
Page 2
Population Control Commission will terminate on June 30,
2007. On July 1, 2007, the Secretary of Corrections will
assume the duties and responsibilities of the commission.
Population Control Strategy. NMCD has taken a proactive
approach to avoid utilizing the Corrections Population Control
Act, which would grant early release to nonviolent offender.
Population Control Strategy Committee. The department
has internally implemented law abiding strategies to reduce the
inmate population. In February 2004, NMCD formed a
Population Control Strategy Committee to address ways to
stabilize and lower the prison population. The committee has
developed the following initiatives to control inmate growth:
 Assist in-house parolees in finding suitable parole plans;
 Award good time to medical care cases;
 Ensure good time is awarded;
 Increase number of programs that give good time credit;
 Utilize new female inmate classification instrument;
 Assess feasibility of re-entry drug courts;
 Study the return rates of inmates; and
 Create a sanction parole violator program.
The majority of their initiatives deal with more efficient and
effective discharge of inmates from correctional facilities. Since
the creation of the committee, 624 in-house parolees have
been paroled out into the community.
STATUS OF PRIVATE PRISONS IN NEW MEXICO
Nationally, 6.5 percent of inmates are in correctional facilities
that are operated by the private sector. Currently, New Mexico
has 2,788 out of 6,576 inmates in private prisons. The state
has 42 percent of inmates in private prison facilities. The
following table shows the number of inmates per private prison
facility.
Facility
Number of Inmates
Lea County Correctional Facility
1257
Guadalupe County Correctional Facility
599

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Page 3
Santa Fe County Detention Center
101

Number of Inmates
in Private and Public
Prison Facilities
4,000

Torrance County Detention Center
210
NM Women's Correctional Facility
621
TOTAL
2788

3,000
2,000

Source: NMCD

1,000
0
Private
Prisons

Public
Prisons

The majority of private prison facilities are for male inmates
with the exception of the NM Women’s Correctional Facility.
The male private prisons house medium security, Level 3
inmates. The
women’s private prison deals with low to high security, Levels 1
to 6.
The Santa Fe County Detention Center houses individuals in
the Technical Parole Violator Program. Individuals in the
program are reincarcerated for 30, 60 or 90 days.
New Mexico is the highest state in the nation for percentage of
inmates housed in private prison facilities. The following table
ranks the top ten states for percent of inmates in private
prisons and includes the total number of inmates in private
facilities.
State
Percentage
Number
New Mexico
44.2%
2,751
Alaska
30.6%
1,386
Montana
29.3%
1,059

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Page 4

Oklahoma
26.4%
6,022
Wyoming
26.3%
493
Hawaii
25.4%
1,478
Idaho
21.5%
1,267
Tennessee
19.9%
5,049
Colorado
15.3%
3,013
Mississippi
14.9%
3,463
Source: U.S. Bureau of Justice
Statistics
CITY OF CLAYTON AND GEO PLANNING NEW PRISON
On May 16, 2005, Correction Department officials met with
representatives from Clayton, Union County, GEO, Economic
Development, Union County Community Development
Corporation and others to discuss the City of Clayton and
Union County’s proposal to build a prison to house state
prisoners. Prior to the meeting, the City of Clayton and Union
County officials approached Santa Rosa officials who
recommended GEO based upon their experience. The City of
Clayton and Union County plan to sell bonds to fund the
construction of the prison facility. Cost –Savings or CostShifting: The Fiscal Impact of Prison Privatization in Arizona
states private prison companies are increasingly dependent on

LFC Hearing Brief
Page 5
borrowing, and their lenders have actively discouraged them
from tying up capital in costly new facilities. This result is, as in
the situation with the City of Clayton and Union County, private
prison companies seek public financing for private prisons.
NMCD intends to contract for the construction and operation of
a 600 bed Level 3 prison in Clayton.
Average Cost Per
Prison Cell

Site Criteria for Construction. It is unclear what NMCD’s
methodology was in making the selection for Clayton as the
site for a new prison.

$100,000
$80,000
$60,000
$40,000
$20,000
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New Mexico Economic Development Partnership reports there
are 13 critical site selection factors.
1. Real Estate – size, requirements, cost, raw land;
2. Labor – skill set, training, education, number of projected
hires, transfers, wages, benefits, procurement,
unemployment, and underemployment;
3. Operating Costs – occupancy, wage rates, insurances,
comparison to other areas;
4. Access to Critical Places and Things – data, ease of
access is critical, energy;
5. Transportation Network – highways, personal, cargo;
6. Supplier Vendor Network – ability to access goods,
supplies, technology;
7. Utility Infrastructure – Electric, water, sewer, specialties,
cost/timing of development;
8. Business Appetite – anticipate requirements, zoning,
permitting, fees;
9. Educational Climate – quality of education, relation with
business community, scores, long-term potential/impacts;
10. Community Characteristics – size, culture, housing, quality
of life factors;
11. Tax Environment – state taxes, county, local (property,
sales);
12. Financing Infrastructure – availability of financing tools;
access to credit, cost of money, terms; and
13. Incentives – tax savings, job training, grants, and loans.
The Corrections Department should prepare and report an
evaluation of prison site alternatives addressing the sort of
criteria reported above with a particular emphasis on cost
differentials. The report might compare Hobbs, Santa Rosa,
Las Cruces, Clayton and perhaps Clovis, Tucumcari and
Grants. The following sections present LFC analysis on some
major site criteria.

LFC Hearing Brief
Page 6
Comparison of Cost in Building a New Prison. For the
purpose of making a comparison of the cost of building or
expanding a prison in New Mexico the following sites have
been selected: Clayton, Santa Rosa, Hobbs and Las Cruces.

Number
Unemployed

G
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La ada
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C r up e
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SA
Le
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7000
6000
5000
4000
3000
2000
1000
0

Total Private Sector
Employment by
County: September
2004
50,000
40,000
30,000
20,000
10,000

Construction Costs of a Prison Facility. The 2002
Corrections Yearbook reports the average cost per bed as of
January 1, 2002 for a maximum-security cell is $92,560,
medium-security cell is $62,444, and minimum-security cell is
$39,089. Based on this information to construct a 600 bed
medium-security prison would cost approximately $37.5 million.
The cost could increase based on the additional cost of
construction in a rural area. R.S. Means Facility Construction
Cost Data (2004) reported that in New Mexico construction cost
was the lowest in Las Cruces with a weighted average of 83.9
and the highest in Carrizozo with a weighted average of 89.9.
In addition, a construction manager for a state agency states
that construction in a rural area can increase cost by 10 to 15
percent with the lower figure applicable to construction of a
large prison. The information indicates construction costs
would run high in Clayton, medium range in Santa Rosa and
Hobbs, and low in Las Cruces.
Per Diem estimates. Cost savings are often passed on to
states to the extent that the contracted per diems for the private
facilities are less than the states’ per diems. The per diem
encompasses the private prison’s operational cost to house the
inmate (correctional officer’s salaries, medical, food, clothing,
etc.) and the cost associated with owning or leasing a facility.
The following table displays the average cost per inmate for
FY03 for the Southern NM Correctional Facility; and actual
FY06 per diem rates for Lea County Correctional Facility and
Guadalupe County Correctional Facility.

D
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A
G
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Le
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on
C
o

0

Per Diem/Average Cost
Proposed Clayton Prison
NA
Lea County Correctional Facility
$55.28
Guadalupe County Correctional Facility
$58.04

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Page 7
Vacant Housing Units

Southern NM Correctional Facility
$90.78

3000
2500

Source: NMCD

2000

The higher average cost at the Las Cruces facility is due in part
to the housing of minimum, medium and high security Levels 2,
3, 4 and 6.

1500
1000
500

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The economies-of-scale creates a lower per diem rate or
average daily cost if expansion takes place at an already
existing prison facility. Such a facility would have an increase
in efficiency from the increase in the number of inmates. The
Southern NM Correctional Facility, Lea County Correctional
Facility and Guadalupe County Correctional Facility already
have established medical, food, education programs,
therapeutic communities, and trained staff. Operating costs
become more efficient decreasing the cost per inmate housed
in an expanded facility.
LFC staff received an indication that per diem cost for Clayton
compared to Hobbs would be approximately $8/day higher
which represents $1.75 million per year more for 600 inmates.
Presumably, this reflects significant economies of scale in
prison costs (one superintendent, one infirmary, kitchen, etc.).
Labor Supply for Construction and Operation. A key factor
in selecting a new prison site is the labor supply in the local
area. In March 2005, the Department of Labor reported the
unemployment rate was 9.8 percent for Guadalupe County, 7.0
percent for Las Cruces Metropolitan Statistical Area (MSA), 4.9
percent for Lea County, and 3.9 percent for Union County. The
following tables show the current labor force by county for
construction and health care/social assistance.

Number Employed in Construction in Sept. 2004
Dona Ana County
3,904
Guadalupe County
165
Lea County

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Page 8
1,781
Union County
39

Number Employed in Health Care & Social Assistance in Sept.
2004
Dona Ana County
8,245
Guadalupe County
68
Lea County
2,808
Union County
188
Source: Labor Information Quarterly Census of
Employment 2004
NMCD estimates that 600 medium-security Level 3 beds would
require approximately 200 correctional officers. It is critical that
a new or expanded prison is able to recruit and retain
correctional officers. An article in Governing magazine
Contract Lens reports the annual turnover rate for state
correctional officers nationally is about 15 percent while private
facilities have an annual turnover rate of more than 40 percent.
Studies on privatization often report private prison savings are
realized by offering employees lower salaries and fewer
benefits than the state entity.
Availability of housing is an issue in recruiting personnel to
work and live in the community. The following table displays
the availability of housing in Clayton, Hobbs, Las Cruces and
Santa Rosa.

Total Housing Units
Vacant Housing Units
Clayton

LFC Hearing Brief
Page 9
Some Additional
Operating Costs in
FY07 Budget (in
millions)

Hobbs
11,968
1,928
Las Cruces
31,682
2,498
Santa Rosa
1,024
126

SF

De
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Pr
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$6.0
$5.0
$4.0
$3.0
$2.0
$1.0
$0.0

1,289
210

Source: US Census Bureau –
Census 2000
Other Site Criteria. The City of Clayton reportedly has
insufficient electrical transmission; however, the city has a
request in for an additional line. Also, real estate may be
favorable in Clayton due to the city owning the large site east of
town.
NMCD’s Authority to Contract with Private Sector. The law
seems clear that NMCD does not have the legal authority to
pursue sole source procurement. Section 33-1-17 NMSA 1978
addresses private prison contracts. The statute states that the
Corrections Department will solicit proposals and award any
contract under this section in accordance with the provisions of
the Procurement Code [Section 13-1-28 NMSA 1978]. The
department is required to develop a contract to include terms
and conditions required after consultation with the General
Services Department. The statute states any contract awarded
pursuant to this section may include terms to provide for the
renovation of the facility or for the construction of new
buildings.
The statute gives the Corrections Department the authority to
contract for the operation or housing of adult female inmates in
a private facility. Also, the statute gives the department the
authority to contract with a person or entity in the business of
providing correctional or jail services to a government entity for:
 A correctional facility in Guadalupe County of not less than
550 and not more than 2,200 beds;
 A correctional facility in Lea, Chaves or Santa Fe County of

LFC Hearing Brief
Page 10
not less than 1,200 and not more than 2,200 beds;
 Design and construction of support services building, a
laundry and an infirmary at Penitentiary of NM in Santa Fe;
or
 Construction of a public facility to house a special
incarceration alternative program for adult male or female
felony offenders.
The statute has not been updated since 1995 and does not
include Torrance County in the language.
Best Practices of Other States with Private Prison
Contracts. The Department of Corrections Privatization
Feasibility Study, conducted by the Legislative Budget
Committee of the State of Washington, reports cost savings
depend on the care that is taken in estimating the state’s costs,
and in designing an RFP, choosing a contractor, and executing
and monitoring the contract. Many states have passed
legislation to ensure cost savings from private prison contracts.
Private Prisons: Quality Corrections at a Lower Cost states
Texas and Mississippi both require contract with private prisons
to cost at least 10 percent less than using the state system.
Florida requires 7 percent savings, and Tennessee requires
payments to private firms to be less than government facility
costs.
Internationally, governments are developing private prison
contracts that have a performance-based structure of payment.
Private Prisons: Quality Corrections at a Lower Cost reports the
Australian state of Victoria bases its payments on such a
structure.
 Accommodation-services fee – pays for housing the
prisoners; offsets the private debt incurred in constructing
the facility.
 Correction-services fee – covers specific services, such as
correctional officers, health care, food, education, and
rehabilitation programs.
 Performance-linked fee – fee is tied to a set of performance
indicators, including escapes, deaths in custody, assaults
on inmates, and assaults on staff. As long as the company
meets the standards, based on averages from the
government prisons, the full fee is paid.
Effect on Other Corrections Costs. The Corrections
Department will incur higher cost to transport inmates to
Clayton. Higher per diem costs could also stem from

LFC Hearing Brief
Page 11
recruitment of medical and educational personnel to Clayton.
BUDGET OUTLOOK
Supplemental for FY06. NMCD reports that they will need a
supplemental request estimated to be between $6 and $8
million in the 2007 legislative session. The need for the
supplemental stems from being under-funded for private prison
beds, and additional cost of leasing 200 inmate beds from
Santa Fe County for population growth. The FY06
appropriation reflects the executive recommendation of
$235,677.2, which a 2 percent increases over the FY05
operating budget. The 200 additional beds available at the
Santa Fe County Detention Center will take care or male
inmate growth for approximately 18 months.
Funding for Camino Nuevo. The department is undecided at
this point on whether the supplemental will include the
operational cost to run Camino Nuevo as a minimum security
Level 1 to 2 facility for female inmates. The operational cost for
Camino Nuevo is estimated at $5 million. The Camino Nuevo
facility has the capacity for 192 beds. These additional beds
will take care of the female inmate population growth for the
next eight years.
Additional Costs. NMCD plans to request in their FY07
budget the operational cost of Camino Nuevo at $5 million, the
per diem cost of 200 additional inmates at Santa Fe County
Detention Center at $4.2 million, and the per diem cost of the
Clayton facility for 5 months (estimated based on the Santa
Rosa and Hobb’s facility per diems) at $5.1 million .
QUARTERLY PERFORMANCE REPORT
The New Mexico Corrections Department (NMCD) has
developed well diversified key quarterly measures that address
the following agency key goals:
 a balanced system approach,
 population control,
 comprehensive approach for female offenders, and
 enhancement of public relations and education efforts.
The key quarterly measures do not address the department
goals of lower cost and reduced exposure to litigation. The
quarterly report contains the department’s mission statement,
vision statement, and summary of key strategic plan initiatives

LFC Hearing Brief
Page 12
which contains goals and objectives.
NMCD Focus And Format. The department’s key measures
primarily focus on the Inmate Management and Control
program. The key measures are:
 serious inmate to inmate assaults in private and public
facilities,
 serious inmate to staff assaults in private and public
facilities,
 inmates placed into the Sanctioned Parole Violator
Program,
 inmates testing positive in monthly drug tests,
 turnover of correctional officers,
 inmates returned to facilities within 12 months after release,
and
 inmates returned to facilities within 24 months after release.
Key measures also include inmates enrolled in Adult Basic
Education, regular caseload of probation and parole officers,
and profit/loss margin of the Corrections Industries program.
The action plan states specific strategies to obtaining the target
measure. NMCD sources where the data is collected from. An
explanation is provided if the department is under or over their
target, and a corrective action plan is provided. Historical data
is given for the actual FY04 amount; cumulative actual for the
1st, 2nd, 3 rd and 4th quarters of FY05; and the annual target for
FY05.
It is unknown whether the department utilizes the performance
data to “manage for results”. For example, the department
includes with the quarterly report the Adult Facility Daily Inmate
Count for the end of the quarter. This report gives a
breakdown by facility and security level the design capacity,
total inmate population, and general population beds available.
This report is imperative in planning for the need of additional
inmate beds. As of March 31, 2005, there were 32 general
population beds available. NMCD is just now starting the
process of leasing additional inmate beds.
Some of the key measure may need to be reevaluated in
regards to how realistic are the targets. For example, the
measure for “percent of inmates testing positive in monthly
drug tests” has a target of <=5%. The FY05 data is 1.76
percent and the FY04 baseline was 1.34 percent. The target is
unrealistically high based on current and baseline data.

LFC Hearing Brief
Page 13

Key Findings From the Quarterly Report. NMCD has done a
great job in developing key performance measures as
indicators for the conditions in the prison facilities. The
department will exceed its target in FY05 for serious inmate to
inmate assaults. Also, the measure on inmates testing positive
or refusing drug testing is below target, but is on an upward
trend. These measures could be indicating worsening
conditions possibly due to overcrowding. Analysis of the
upcoming 4th quarter key measures may provide insight as to
whether there are issues that need to be addressed by the
department.
QUESTIONS
 Has the Population Control Strategy Committee exhausted
all the law abiding internal options available to reduce the
inmate population?
 What is NMCD’s legal authority to pursue a sole
procurement with the City of Clayton and Union County?
 Has NMCD used site selection criteria, such as the one
developed by the NM Economic Development Partnership,
to develop a list of possible sites for a new or expanded
prison facility?
 Does NMCD have an estimate of how much more it would
cost to construct in a rural area?
 Does the City of Clayton have adequate electrical
transmission capabilities to sustain a new prison facility?
 Does the City of Clayton have an adequate labor force to
construct and operate a new prison facility?
 Has NMCD received any estimates from GEO regarding per
diem for 600 medium-security inmate beds in Clayton
including comparisons to other locations?
 Has NMCD conducted a cost benefit analysis regarding
building versus expanding a prison facility that considers the
economies-of-scale?
 Does NMCD plan to include in their FY06 supplemental

LFC Hearing Brief
Page 14
request of $6-8 million operation of Camino Nuevo at $5
million?
 What is NMCD’s long-term plan to address the population
growth of male inmates?