Legislature(1995 - 1996)
01/31/1996 01:30 PM JUD
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 428 - LEASE-PURCHASE CORRECTIONAL FACILITY HB 429 - CORRECTIONS: PRIVATE CONTRACT FACILITIES Number 1917 CHAIRMAN PORTER announced the committee would hear HB 428 and HB 429, which had been combined into a single CS. REPRESENTATIVE BUNDE made a motion to adopt the CSHB 428(JUD) which in effect combined HB 428 and HB 429 to read as follows: "An Act relating to the authority of the Department of Corrections to contract for facilities for the confinement and care of prisoners, and annulling a regulation of the Department of Corrections that limits the purpose for which an agreement with a private agency may be entered into; and giving notice of and approving a lease- purchase agreement for construction and operation of a correctional facility in the Third Judicial District, and setting conditions and limitations on the facility's construction and operation." Hearing no objection it was so moved. REPRESENTATIVE MULDER as sponsor came forward to present the premise to this legislation. He stated that it was no secret to anybody present or as chairman to the Corrections Budget SubCommittee that Alaska's prisons are bursting at the seams. The state is presently from 125 to 200 prisoners over capacity. He also made mention of the 205 Alaska prisoners down in Arizona presently. Representative Mulder stated that Alaska needs more prison beds. REPRESENTATIVE MULDER read the sponsor statement as follows: "HB 428, by the House Finance Committee, allows the Commissioner of the Department of Corrections to pursue the use of private facilities for any prisoner as long as security at the facility is consistent with the classification of the prisoners housed at the facility. It provides that the department may enter into a lease purchase agreement with a private party to construct and operate a prison in the Third Judicial District. A group of employees from the Department of Corrections could be the private contractor if they bid competitively for the construction and operation of the facility. Legislative Counsel advised us in an October 20, 1995 memorandum, 'while the statutory basis for authorizing use of private facilities for state prisoners is probably adequate, albeit barely, the regulations cited -- particularly 22 AAC 05.300(e) -- impose real obstacles to extensive use of privately-contracted facilities, whether in state or outside.'" REPRESENTATIVE MULDER pointed out that originally there were two bills HB 428 and HB 429 dealing with this legislation. The second bill 429 statutorily outlined that the Department of Corrections can contract with a private contractor. There seemed to be some confusion or conflict with current statute and code in relation to the state's ability to do this. He went on to note that this combination of HB 428 and HB 429 was instituted because otherwise the project would probably be debated in court, which could stall or delay indefinitely. "This bill makes clear the legal authority of the Department of Corrections to house any prisoners in private facilities for prisoners other than those in furlough status or in correctional restitution centers. This could be done by administrative action, but a statute will make legislative intent crystal clear. The facility authorized by this legislation will include a maximum of 1000 beds; be designed to allow expansion; include housing for female prisoners [a need which today is under met and which is recognized by the department as being very real]; not exceed construction costs of $100,000,000; be constructed under a project labor agreement [to ensure maximum Alaska hire]; be accredited if state facilities are accredited [that is to say currently state facilities aren't accredited, but if they were going to accredit state facilities, we would require that this private facility would be accredited as well]; will have correctional officers with the same training as state correctional officers." REPRESENTATIVE MULDER went on to note that the Department of Corrections reported it was clearly exceeding the maximum emergency capacity under the Cleary Agreement by over 100 prisoners every day. He again noted the Arizona prisoners and said this proposal would address both these needs at a lower cost to the state. Representative Mulder stated that the Arizona prisoners cost $59 a day and the average cost in the State of Alaska for a prisoner, per day is $107. He said that the need for beds can no longer be ignored and felt as though there were added costs accrued by shuffling prisoners around. REPRESENTATIVE MULDER pointed out that there had been no negative experiences with the private Arizona facility, since February 1995, with the 206 Alaskan prisoners housed there. The savings have been significant. He added that the figures cited previously for the Arizona prisoners includes debt amortization figures for construction costs of a private facility. The Alaskan numbers do not include this debt amortization. Number 2265 REPRESENTATIVE MULDER said that a new contractor can bring new ideas to the state of Alaska. He added that competition spurns new ideas and prompts state workers to think of new ways to deal with old problems, which includes doing so with a less cost amount consciousness. Representative Mulder reiterated that the private facility correction officers will be trained to the same standard as state correction officers and the facility would also become accredited if required. This legislation is also about jobs, since six million dollars is being spent a year employing Arizona citizens, this facility would help keep employment in Alaska. Number 2387 REPRESENTATIVE GREEN asked generally about what this proposal would cost per prisoner, would it be between $60 - $120 per prisoner. REPRESENTATIVE MULDER stated that without having the bid out to contractors, he was not totally sure, but said these figures were what's anticipated. He added that representatives from Corrections Corporation of America (CCA) and Wackenhut and others these figures would fall between current price paid in Arizona said $70. It was his understanding that this would include the amortization and the cost of operation. Number 2435 REPRESENTATIVE FINKELSTEIN agreed with Representative Mulder's point that more prison capacity is needed in the state of Alaska. He noted that whether the facility is private or public, the bottom line is that the administration usually comes up with plans to solve problems such as these. After a plan is proposed by the administration the legislature is responsible to fund it. He questioned the need to have these proposals before them today and said it seemed they weren't yet at this point. TAPE 96-10, SIDE B Number 000 REPRESENTATIVE MULDER stated that he liked to take problems on, deal with them, solve them and move on. The past administration and the present one have not dealt with this issue effectively. To ship prisoners out of state was supposed to be a short term stop- gap solution, in his opinion, but it doesn't create jobs for Alaskans. He noted that the budget to build a private facility would take up the entire capitol budget, as an argument to support privatization. JEFF SPOON, Vice-president of Development, Wackenhut Corrections Corporation, testified by teleconference from Florida. He stated that his company was one of the oldest companies involved in the privatization of prisons. The situation of privatizing prisons should not be seen as adversarial. He reminded those present that in the constitution it doesn't specify that the government is suppose to provide these types of services, but should govern the services. In recent years, especially the sun-belt states, privatization has proven to be very cost effective, not only from the construction standpoint, but more importantly with the on-going operations. He stated that this latter aspect can make up 90 percent of the daily cost of providing correctional services. MR. SPOON noted that the private correctional operations have demonstrated their ability to design, build and finance cost effectively towards a longer term period. Because these costs can be combined from the start, it is easier to track the increasing costs of operation by good design, close operation and by monitoring outgoing costs. He added that a good deal of individuals employed in private corporations were at one time employed in the public sector and learned the profession through the government sector. He noted the bureaucracy of government as a hinderance and felt as though private interests could bring services to the tax payers through private sector channels with cost savings and quality. Number 284 GEORGE VIKALIS, Operations Manager, Municipality of Anchorage, testified by teleconference from Anchorage. Mr. Vikalis announced that he was representing Mayor Myerstrom and reiterated that Anchorage was very concerned about the prison situation. He added that the municipality felt as though there was a great need for an additional facility in the Anchorage area. He noted that there is a shortage of space and this affects the way Anchorage does business. Mr. Vikalis stated that the municipality does not feel strongly one way or another in regards to the facility being private or public. Their main concern is to have a prison built there to take care of the needs of the city and the state. MR. VIKALIS expressed a willingness of Anchorage to work and partner with the state in order to make this project a possibility, including the role of a conduit for financing. They are also willing to aid in a location decision, as well as get the word of support out to the community. He stressed they would support the project which seemed more economically feasible, whether it be private or public. Number 360 JOHN CHRISTENSEN, Chairman, Chugach Alaska Corporation testified by teleconference from Anchorage. He outlined his points about HB 428 and HB 429 as follows: "At the table with me today is Roger Endell, a past Commissioner of Corrections for the State and now Education Services Manager at the Palmer Job Corps Center, which is managed by Chugach Development Corporation (CDC), Chugach Alaska's main operation subsidiary. We are here today to speak in support of HB 428 and HB 429. The Federal Government made the determination some years ago that in many areas, the private sector could provide the same quality of service as government agencies, but at lower cost. For example, Chugach has been awarded a number of federal contracts to provide Base Operations Support services at military establishments including King Salmon AFB, Adak NAS, and Wake Island Army Base. Recently we have been awarded the contract to provide Base Operations Support services at one of the Navy's largest facilities on the West Coast, Whidbey Island NAS. It is not just the military who look to the private sector for this type of service. We have contracts with the Department of Labor (for the management of the Alaska Job Corps Center), the Patent Office, the Department of Energy, and the Department of Transportation. The concept of moving from government operated services to private sector operations is accepted and proven. In the field of corrections, it has been reported that the five new prisons being built by the Federal Bureau of Prison will be managed by the private companies. Chugach Alaska sees HB 428 and HB 429 as the first of many steps to be taken by the State of Alaska as we follow the lead of the Federal Government in reducing the cost of Government. During a time when the Administration is considering imposing new taxes on the people of Alaska, it is important that the State be seen to be exploring all possible ways of reducing cost. It is not just a new corrections facility that should be considered for privatization. The Administration and Legislature should examine the entire bureaucracy, to find areas or even whole departments that could be operated more efficiently by the private sector. The only question that has to be asked is 'Can the private sector provide the required standard of service at a lower cost?' To make this determination, all costs have to be considered, including capital and other costs that are often hidden. When all the information is available, we believe the citizens of Alaska will see, that in many cases, the private sector can provide equal or better services at lower cost. As you are well aware, it is not only cost that is important, but skills and dedication. Chugach recognized this, and has been working very closely with Correction Corporation of America (CCA) to develop a first class team to design, finance, construct and operate new corrections facilities. The two companies make a very strong team. CCA has extensive experience and skills in the corrections industry, while Chugach has considerable experience in managing complex facilities and providing education services. It is obvious that some State employees are not too happy with the concept of the private sector encroaching on their turf. I have read statements from state employees accusing the private sector of being anti-union, of sending profits out of state, of employing people who are unskilled and who lack the devotion to duty of the state employee. It is necessary for me to set the record straight as far as Chugach is concerned, and to correct these deliberate misstatements. First of all I would point out that Chugach is definitely not anti- union. Chugach has an excellent working relationship with the Laborers Union, with the Teamsters and with the Operating Engineers. All three unions have members working for Chugach subsidiaries, and they recognize, as do we, that to survive in this world, we all have to be competitive. Secondly, it has been claimed that a private prison operator will take Alaska's money Outside. All profits earned by Chugach go to a Corporation wholly owned by Alaskan Natives. Many Chugach employees are Chugach shareholders. Others have spend their whole lives in Alaska. The award of a contract to Chugach will result in more Alaskans being employed. As for dedication of service, it is hypocritical to suggest that people in the private sector do not have the same dedication as those in government service. The performance of Chugach employees working on federal contracts demonstrates the inaccuracies of those statements. The final charge levied against the private sector by some state employees is that private companies do not have the necessary skills. I challenge them to fault the qualifications of the Chugach/CCA team. As Roger Endell can tell you, the Job Corps Center in Palmer, was rated in the top five out of 111 Centers in the US. We are specialists in providing basic education and teaching work skills. We provide drug and substance abuse counseling, and we teach social and life skills to those who missed out on the normal educational opportunities. We also operate the medical and dental facilities at the center. Chugach has received commendations from the Navy and the Air Force for the quality of its work at bases around the world. This work consists of maintaining isolated bases in inhospitable environments. We will operate and maintain correction facilities in a similar professional manner. I will let our partners from CCA speak for themselves. However I do know that many CCA employees came into the private corrections industry after long careers in the public corrections industry. In conclusion, we believe all Alaskans will benefit if private companies are allowed to compete against State Agencies. The competitive market process will determine whether the private or public sector is best qualified to design, build and operate a new correction facility for Alaska. I urge you to support these bills." Number 692 RUSS CLEMENS, Labor Economist, Department of Research and Collective Bargaining Services, American Federation of State, County and Municipal Employees (AFSCME), which represents Alaska State Employee's Association (ASEA), Local 52 in Alaska was next to testify about HB 428(JUD). Mr. Clemens thanked the committee members on behalf of the over 1 million of AFSCME and the 75,000 state correctional officers which they represent for the opportunity to speak on this proposed legislation. "The issue of prison privatization as you may suspect is one that concerns us because of its implication for public policy. The appeal of prison privatization is an alluring, yet beguiling one. In theory, it is a relatively simple proposition--fill cells, cut costs, and pass the savings on to government. The reality, however, belies the simplicity of the theory. The twin imperatives of cutting costs and filling cells translates most often into cutting corners in the operation of prisons both of which have severe consequences that have manifested themselves in several ways which ought to be of concern to you as members of this committee and as a legislature as a whole. Problems with security and escapes have characterized privately- operated prisons from the beginning. AFSCME has not been the only one questioning the consequences for prison security of introducing the profit motive into the management and operation of prisons. After five men, including one charged with stabbing a woman to death, escaped from the privately-operated Bay County, Florida Jail, the editors of the St. Petersburg Times raised these questions about privately-operated prisons: 'Will a private company supply adequate staff to maintain institutional security? Will it have enough manpower to prevent escapes?' Others have expressed concern about the wisdom of privately- operated prisons, especially when it comes to security. In fact, a much awaited audit of the privately-operated South Central Tennessee Correctional Center (SCCC) comparing it with two state- operated prisons found that 214 incidents of injuries occurred at SCCC during a 15 month period whereas 72 such incidents occurred at the two state operated facilities combined. Actually, security problems characterized this prison from its beginning. Between March, 1992 and April 1992 eight escapes occurred at the prison, which also had other security problems ranging from finding an inmate with a handgun during a routine search to inmates being inebriated in their cells. These experiences prompted the Memphis Commercial Appeal to comment as follows: 'Tennessee's experiment with a privately operated medium security prison looked lean and clean when reporters and officials toured the new South Central Corrections Center. ..The problems arrived with the prisoners.' In view of the imperatives driving prison privatization, these problems ought to come as no surprise since among the costs that private corporations seek to cut are staffing, which accounts for approximately 60% of the operating costs of a prison. The Corrections Corporation of America slashed staffing by 17% at the Hernando County, Florida Jail when it assumed control of the facility. Inmate escapes in 1990 prompted the County Commission to request an inspection by the National Institute of Corrections (NIC), an agency within the United States Department of Justice. The NIC identified under staffing as a major problem at the jail and commended that additional correctional officers be hired. However, the comments of the company's jail administrator, which is comparable to a warden or superintendent, offer a valuable insight into a corporation's perspective regarding staffing a prison. 'The county can agree with (adding the guards) if they want to,' the administrator asserted, 'but that means the price of poker goes up as far as you're concerned.' Viewed from that perspective, it ought not to be surprising when one of the players folds and walks away from the game. Shortly after Wackenhut Corrections Corporation assumed control of the Monroe County, Florida jail in 1990, the county and a state inspector informed the corporation that the state had previously ordered 11 security posts staffed. Served with a deficiency notice, the company increased its manpower, but to a level that remained below state requirements. The company then billed the county for an extra $780,000 and demanded it to pay an additional $2.6 million over the four-year term of its contract. The county refused, insisting that the corporation should have know about the state's staffing requirements. Wackenhut then terminated the contract. Loss of control is a danger when any public service is privatized. With a function as essential to public safety as the corrections system, the consequences are potentially ominous. Yet the drive to fill cells, which is the other imperative by which private corporations make money, can have such consequences. A few years after having been awarded a contract to manage and operate the Hamilton County, Tennessee penal farm, the Corrections Corporation of America notified county officials that, because of overcrowding at the facility, it would no longer indemnify (or insure) the county against lawsuits. 'We must speculate,' the County Attorney responded, 'that your action is a ploy to coerce Hamilton County officials into constructing additional facilities for the housing of the overflowing state prison population so that CCA may continue to reap monies for housing these prisoners. If this position of the company is not reversed or clarified without exception, we will have no recourse but to consider this an act of default and consider remedies, including contract termination.' Neither the Santa Fe County Commission nor the County Sheriff were notified when the corporation operating the county jail imported 54 inmates from the State of Oregon to fill cells at the facility. As things turned out, their backgrounds were not what the community had been led to believe. None of the inmates were supposed to have been convicted of a crime more serious than armed robbery. In reality, the group included 11 murderers, 17 rapists, and 2 kidnappers. County officials asked that the inmates be returned to Oregon, but only when threatened with the loss of its contract did the company operating the prison agree do so. I would be remiss in my responsibilities as a representative of AFSCME if I did not address the impact of prison privatization upon employees. Available information indicates that corporations pay wages that are 6%-19% lower and provide fewer benefits to correctional officers than public jurisdictions. But isn't this a good idea you may wonder, since it means lower costs and thus savings for taxpayers? Not necessarily, for at least a few reasons. John Donahue, who has been a professor of public policy at Harvard University notes in Prisons for Profit: Public Justice, Private Interests that low wages compromise the quality of the correctional officer labor force: 'Public (correctional officers) Donahue writes, are more likely to be high school graduates, to work full-time and year-round at their jobs, and to be of prime working age. Employers who hire the private-guard labor pool pay less mostly because they get less; lower labor costs mean a lower quality workforce.' A study by the Urban Institute comparing a privately-operated and publicly-operated prison in the State of Kentucky confirms that staff of the state-directed institution were significantly older, better educated, had worked at the facility longer, and had wider correctional experience than the personnel at the privately-managed prison. Staff qualifications, the report concluded, '...favor better performance from the publicly managed facility.' And perhaps you might wish to consider this. Public employees are also citizens and taxpayers. We spend our earnings in the communities where we work: we purchase homes there, we bank there providing a pool of money with which to lend to others; we buy our cars there; and we support the numerous small businesses that constitute the fabric of community life throughout Alaska. Put another way, our money stays in the community. It doesn't go out of state to contribute toward the profits of others. Secondly, after all is said and done, after corners have been cut, staff reduced, accountability jeopardized, and paying lower wages and fewer benefits, has prison privatization really saved money for public jurisdictions? After reviewing the literature on the issue, the U.S. Government General Accounting Office (GAO), an independent agency that analyzes federal programs for Congress, found that the evidence is inconclusive--hardly a resounding endorsement. In fact, the 1995 Tennessee audit comparing the privately-operated medium security prison with two of the state's publicly-operated prisons found negligible savings. Impartial observers have begun to question whether privately-operated prisons actually save money. 'It's not easy to make a profit in that business, so they've got to cut corners any way they can,' writes Dennis Palumbo, a criminal justice professor at Arizona State University. 'Private prisons may well cost more in the long run, not only in terms of taxpayer money, but also in the health and safety of prison staff and other law enforcement officers.' At the very least, the serious doubts regarding the efficacy of privately-operated prisons ought to be of sufficient concern to require a feasibility study pertaining to the applicability of this idea to Alaska. Such a study, it seems, would be essential before a policy decision is made to privatize a prison. Yet, the proposed legislature that you have before you contains no provision for such a study. The failure to privatize does not necessarily preclude the state from addressing its problems regarding overcrowding. The construction of a mega-facility as proposed in the bill may not necessarily meet the needs of the entire state in this regard. As some of our members will probably tell you, when they have the opportunities to speak before you this afternoon, in view of a system that has been developed around the idea of regionalization, it may make more sense to consider the expansion of existing facilities, which may also prove less expensive." Number 1205 REPRESENTATIVE TOOHEY asked Mr. Clemens if he had a choice, would he send prisoners out of state due to overcrowding or build a private prison, supposing these are the only two issues. MR. CLEMENS said there are some possible alternatives between either of the extremes Representative Toohey outlined, one of which would be to add on to already existing facilities. REPRESENTATIVE TOOHEY responded that this was not what she had asked. Mr. Clemens said he knew that, but could not accept the two extremes by which she stated her question. Number 1245 REPRESENTATIVE GREEN asked about Mr. Clemen's comments regarding expanding already existing facilities in light of Alaska's prisoners costing so much because of economy of scale. He thought that what Mr. Clemen's was suggesting would be in opposition to this concept of expansion. MR. CLEMENS said that this could possibly be in opposition, but they would be willing to work with the committee on the numbers. Number 1300 REPRESENTATIVE DAVIS asked Mr. Clemens that when he is required to testify on this subject before other bodies of government and such, does he testify on existing legislation that's pending or is it in the context of helping states decide whether to privatize or not. She asked about a time line for negotiating such issues. MR. CLEMENS offered that he is usually asked to testify on proposed legislation and in the process of doing this, he suggests alternatives rather than privatization. He suggested that privatization is often a knee-jerk reaction. Mr. Clemens said there is an entire range of alternatives, including that if the decision is made to build an additional facility they should try to keep it public. He pointed out that efficiency and cost-savings are the sole prerogative of the private sector, public management can be just as innovative and creative. Number 1419 MARK ANTRIM, a Correction Officer III, a Sergeant at Lemon Creek Correctional Center and also a member of ASFCME testified that the correctional officers across the state applaud the efforts of the legislature in passing stronger laws with stiffer sentences. Generally, the correction officers see HB 428 and HB 429 as a mistake. MR. ANTRIM stated that this bill encapsulates a collision of two basic values in society, these being private enterprise and public safety. He noted that the most prominent value in the private sector is the bottom line. Unfortunately, when looking at public safety, the bottom line is very hard to determine. MR. ANTRIM agreed with Representative Mulder's number of $107 per day, per prisoner in Alaska. He noted that the facility outlined in HB 428(JUD) will only hold classified male and female prisoners. He further stated that this is what the state of Alaska will not get for their $100 million the cost outlined in the pending legislation: the prison won't be a booking facility, something Anchorage is screaming for and also a facility such as this one has a lot of hidden costs, such as fingerprinting, drug addicted prisoners, diseases and fighting. These types of things affect the bottom line in a very big way. The private contractors, CCA or Wackenhut will not want to accommodate these types of special needs. MR. ANTRIM offered that this new prison will not remotely deal with pre-trial operations, such as Cook Inlet for example. Pre-trial people are breaking into the system and need special services. They need more visiting time with attorneys and families. After such visits the prisoner needs to be strip searched, which is a very work intense procedure. Again, he noted that the private contractors will not be able or willing to accommodate these types of needs because it affects the bottom line. MR. ANTRIM stated that the facility outlined in the legislation would not house maximum security prisoners. He said this was probably because maximum security prisoners break a lot of things and are dangerous to be around. Normally these prisoners are housed in a separate cell. He also noted a wing at the Cook Inlet facility that accommodates mentally ill prisoners. This is another service which will not be provided in a private facility because of expense. Mr. Antrim was skeptical that the private facility would be able to house female offenders as specified. Number 1700 MR. ANTRIM pointed out that some of the prisoners housed in Arizona had to be shipped back to Alaska because they became unmanageable and the state had to pick up the travel costs. How would the prisoner transports say, to and from a hospital be affected. These types of costs would need to be absorbed and in the context of a 1000 bed facility, this would appear to cause problems. Comparatively, with a facility this large, they would probably have to transport any where from 50 to 100 prisoners per day. He guessed that all these services as listed previously would eventually be absorbed by the public sector, since eventually the private companies would not be able to deliver. This would also affect the price per day, per prisoner figure. MR. ANTRIM stated that the correction officers propose instead of a 1000 bed facility, smaller capitol construction projects slated for already existing facilities around the state. This way the beds would be in locations where they're needed, which would cut down on prisoner transport costs. He also noted the benefits to adding onto existing facilities, such as kitchens and other in- house services already established. MR. ANTRIM said that the facilities are really secondary to a good staff. A good staff working inside prisons keep things from getting out of hand and prevent escapes. Mr. Antrim was skeptical about how private security guards would meet the same standards as correction officers. He made mention of present correction officer positions which can't be filled, due to the fact that a work force doesn't exist. It's not because they don't want to fill these positions. MR. ANTRIM outlined for the committee, the various stages that prospective correction officers must complete. He used as an example 150 recruits signing up in an academy. Out of this number maybe 25 qualified people graduate. The same standards which apply to a police officer also apply to a corrections officer. They must submit to extensive background checks, mental health screening, an interview, and then an enrollment in the academy. After six weeks of academy training, they are sent to a prison facility and while there complete a three month field training officers program. After this, they endure a one year probationary period. MR. ANTRIM stressed that states assumes all the liability of these private prison facilities. After some initial research Mr. Antrim found out that these facilities are not currently underwritten by a major insurance company. They're all self-insured using their own assets or the government entity of the state assumes liability. He pointed out that if you pay less, you get less. Would these security guards be willing to prevent fights or escapes? Would they be willing to shoot someone going over the fence? Would they be willing to do this for eight bucks an hour, or ten bucks an hour? MR. ANTRIM appealed to the committee that they research this privatization concept further. He asked that they look through periodical indices of towns where these private CCA and Wackenhut facilities exist. Generally his impression is that these towns are concerned about the staffing at these facilities and about escapes. Number 2145 REPRESENTATIVE BUNDE asked if he understood that Mr. Antrim working as a state employee within a state facility which didn't book for pre-trial or accommodate female prisoners, that the overall cost would come down. MR. ANTRIM responded by saying absolutely, because the $107 figure as noted is an average of what the cost is for all Alaskan facilities, including medical costs, transportation, etc., but he pointed out that these numbers are static. The $59 spent in Arizona does not cover these costs. Number 2237 REPRESENTATIVE BUNDE asked what amount of wage would the department need to offer in order to fill correction officer positions. MR. ANTRIM answered that the offer would have to be enough to attract people of caliber. He said he'd have to look to the people they turn down to fill the positions open now. He pointed out that if the public prisons are such white elephants and the employees are grossly over-paid, he asked why there are so many open positions for correctional officers. Mr. Antrim stressed that these jobs should be filled by competent people. Number 2354 REPRESENTATIVE BUNDE asked again how much of a wage increase would be necessary to fill the gap. MR. ANTRIM answered he did not know. Number 2388 REPRESENTATIVE TOOHEY asked what a level entry correction officer would make at Lemon Creek after training. MR. ANTRIM answered that it was a range 13, based on an 84 hour work week, maybe 13 or 14 dollars an hour. Mr. Antrim said he would provide the committee with this exact information. TAPE 96-11, SIDE A Number 000 REPRESENTATIVE GREEN referred to the information presented by Mr. Antrim concerning the difference of incarceration costs of out-of- state prisoners now, including medical and transportation costs. He asked what a rational number would be for the cost of such a prisoner. MR. ANTRIM said he would get this information for the committee. Number 184 BRUCE MASSEY, Food Service Manager, Lemon Creek Correctional Facility, was next to testify. Initially, Mr. Massey said he had doubts about this legislation. The State of Alaska stands alone in regards to zero incidences of staff members or inmate killed by another inmate. The department has accomplished this because they employ professional people. He pointed out that Lemon Creek is a hostile environment. Mr. Massey takes a great deal of pride in his work as a professional chef. MR. MASSEY stated that when he changed over from the private to the public sector he was astounded at the tethers which were placed on him when he tried coming up with work related innovate ideas. He's been given a lot more leigh way lately in being able to cut their price per meal from $2.17 in FY 91 to $1.37 which is the current average. This translates to a savings of $170 per month and an annual savings of $163,500. MR. MASSEY wondered where the real savings was going to take place with a private prison facility. He cited the job experience he and his staff bring to Lemon Creek. He also noted that 90 percentage of disturbances in prison facilities revolve around the food and the kitchen staff create the peace by feeding the population good meals. Mr. Massey asked that the committee require sound accountability for the private corporation's numbers, especially when it comes to their food service. MR. MASSEY noted that the participants all wouldn't be present at this meeting if the legislature thought the department of corrections was providing an adequate service, but he also noted again how his hands are tied when trying to institute progressive changes in policy. He cited specific examples of prices for goods which were over-priced and of deficient quality, in relation to the lack of a level playing field when it comes to the food service industry. He noted that the public sector is more tied to buying particular goods because of contract relationships, rather than the private sector which has more freedom to be flexible. Number 578 REPRESENTATIVE DAVIS said she enjoyed Mr. Massey's testimony and realized there were conditions which kept him from doing his job, regulations which need to be done away with or statutes that need to be changed. She said she didn't want to necessarily speak for the sponsor, but said she didn't believe this bill was introduced to point out that state workers weren't doing their jobs properly or that someone can do their job better. There is no evidence or studies which say this. REPRESENTATIVE DAVIS also noted that there are more than likely hidden costs in the dollar amount for the prisoners housed in Arizona. Number 737 PHIL THINGSTAD, Business Agent, Carpenter's Union, initially testified that he represented the majority of the Western Alaska building trades in support of HB 428 and HB 429 given the following conditions: firstly, that under a level playing field, if the state can truly save money, then they support this legislation. Secondly, that if the individuals involved with the construction and management of the facility are Alaskan hires, then they could support the project as well. If these two things can be guaranteed, as well as there being no displacement of the current correctional employees, then they could support HB 428(JUD). Number 835 REPRESENTATIVE FINKELSTEIN asked about the suggestion of adding on to existing facilities. Would the building trades support this. MR. THINGSTAD said they were not against any other alternatives to be explored, however, he pointed out how not too long ago the legislature was going to look for a stable 300 million capital budget and as the operating budget continues to grow, the capital budget continues to shrink. He pointed out how when the infrastructure grows, this prompts new business into the private sector. If the capital budget grows too much, there will be no private sector construction companies left. Number 955 REPRESENTATIVE FINKELSTEIN pointed out how the situation with corrections is different than other items of the capital budget, number one is that it's very prone to bonding and secondly, the legislature is under court order to budget the necessary money for operations. Number 1017 GARY SAMPSON, Corrections Representative, Alaska State Employees Association testified by teleconference from Seward. He stated that the introduction of this legislation has caused great alarm to the association. He cited that there are no quick, cheap fixes to the corrections problem. The desire to cut costs should not be the primary concern of corrections. The quality of service, safety and security must be of primary concern. MR. SAMPSON stated that after his travels around the country he is confident that the quality of service provided by the Alaska Department of Corrections is the best in the country. They operate a safe, secure prison system which is free of corruption and treats prisoners humanely. He said it was doubtful that this standard could be matched by any private company. He said it was necessary to look at private facility incidences beyond the "pie in the sky" sales pitches of private corporations. Mr. Sampson said the facts need to be observed. MR. SAMPSON noted the private run facilities are frequently compromised on security in order to maximize profits, since 60 percent of the operational costs of a facility is made up of labor, reducing staff and limiting training seems to be a vital part of the strategy instituted by private corporations which operate prisons. He cited the increased incidences of assaults and escapes in privately run facilities. In an effort to reduce costs inmate services are cut, often in violation of their contracts which have been made with the state. These programs are often essential for the reclamation of prisoners. MR. SAMPSON broadly pointed out that there is little evidence that a privately run facility saves any money over a publicly run facility. Numerous studies by the National Institute of Justice, the National Institute of Corrections, the General Accounting Office, among others, have concluded there were no significant savings with the private facilities. In fact, many private facilities in the long run may actually cost more fiscally, as well as compromising the health and safety of prison staff and other law enforcement officers. MR. SAMPSON summed up his comments by stating that the primary purpose of corrections is to provide a public service and provide for the public security. The primary purpose of a private company is to make a profit and these two purposes are contradictory. The one has served our citizens well, the other will put our society in jeopardy. He indicated Alaska State Employees Association (ASEA) and AFSCME would be happy to work with the committee to come up with viable alternatives to the solution of this problem, rather than support the ushering in of private prison facilities. Number 1242 DON VALESCO, Business Manager, Public Employees, Local 71 AFL-CIO, testified by teleconference from Homer on behalf of the cooks, building maintenance people and the warehouse people in the correctional facilities of Alaska. He noted that these public employees are concerned about providing the best service for the least cost. Mr. Valesco's main concern about this legislation is that it's a major policy change for Alaska. He asked that the legislature take their time to review this proposition and talk with their constituents. He stated that many people question the concept of privatization. MR. VALESCO referred to publications which have dealt with this concept of privatization and the problems with it. He asked the committee members to read and research these periodicals. He questioned the whole concept of turning corrections over to private companies in order that they make money off of the tax payers. He noted other methods which are much more cost effective, one being the expansion of existing facilities. With the exception of the Ketchikan facility, all of the prisons around the state can accommodate expansion at a much lesser cost than building a new facility, which no less, would need to be staffed and furnished as well. MR. VALESCO used the example of Spring Creek as a facility which could actually be doubled in size. He agreed that more beds are needed, but not necessarily in one location only. Number 11628 CHAIRMAN PORTER stated that the committee would continue the public hearing related to HB 428(JUD) until 1:00 p.m. on Friday, February 2, 1996.