Legislature(2001 - 2002)

03/05/2002 08:10 AM STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HB 498-WHITTIER PRIVATE PRISON                                                                                                
[Contains mention of HB 388, SB 231, SB 261, and SB 336]                                                                        
Number 0075                                                                                                                     
CHAIR COGHILL announced that the  committee would hear HOUSE BILL                                                               
NO.  498,   "An  Act  expressing  legislative   intent  regarding                                                               
privately  operated  correctional  facility space  and  services;                                                               
relating to  the development and financing  of privately operated                                                               
correctional  facility   space  and  services;   authorizing  the                                                               
Department  of Corrections  to enter  into an  agreement for  the                                                               
confinement  and   care  of   prisoners  in   privately  operated                                                               
correctional  facility  space;  and providing  for  an  effective                                                               
Number 0158                                                                                                                     
FRANK  PREWITT, Consultant,  Cornell Companies,  came forward  to                                                               
testify.    A  former  [commissioner]   with  the  Department  of                                                               
Corrections under  Governors Sheffield,  Cowper, and  Hickel, Mr.                                                               
Prewitt noted  that Marvin  Wiebe, the  senior vice  president of                                                               
Cornell  Companies,  was  available online  to  answer  questions                                                               
regarding  Cornell Companies  -  the contractor  in the  Whittier                                                               
prison  - and  about  the  "quality of  the  delivery of  private                                                               
correctional services."                                                                                                         
MR.  PREWITT   noted  that  he  himself   would  address  several                                                               
questions  asked at  the prior  hearing on  HB 498  [February 28,                                                               
2002].    The  first  was  a  question  by  Representative  Hayes                                                               
concerning procurement.   Mr. Prewitt noted that  under state law                                                               
there  are two  ways the  Department of  Corrections can  acquire                                                               
private correctional  services in  Alaska:  the  department could                                                               
issue an RFP [request for  proposals] under the state procurement                                                               
code  and,  through a  competitive  bid  process, secure  private                                                               
prison  services in  Alaska; in  the alternative,  the department                                                               
could,  without a  competitive  process,  purchase those  private                                                               
services directly  from another  entity of  government such  as a                                                               
city  entity,  a borough,  or  the  federal government,  if  that                                                               
government  entity  has  put forward  a  competitive  procurement                                                               
process  under its  own procurement  code.   Under  [HB 498],  he                                                               
noted,  private  prison services  would  be  delivered through  a                                                               
competitive process that is used at the local government level.                                                                 
Number 0336                                                                                                                     
MR. PREWITT explained that a  disadvantage to the state's putting                                                               
out an RFP to purchase those  services directly is with regard to                                                               
the state's power of eminent domain.  He clarified as follows:                                                                  
     The  state  can  build  a  prison  wherever  it  wants,                                                                    
     whenever  it wants,  and solicit  a private  company to                                                                    
     manage  it.    The   state  can  also  solicit  private                                                                    
     companies to find  [real estate] to build  a prison ...                                                                    
     and  then  buy the  service  from  the provider.    The                                                                    
     Arizona   prison  is   owned   and   operated  by   the                                                                    
     Corrections  Corporation of  America.   And while  it's                                                                    
     prudent  to  involve  the  local  community,  it's  not                                                                    
     required. ... All  it takes is suitable  zoning or [an]                                                                    
     unrestricted parcel of land.                                                                                               
     So, the  public process that Whittier  has gone through                                                                    
     is easily circumvented under the  scenario of the state                                                                    
     going directly out  to a competitive bid  for a prison.                                                                    
     All the  contractor has to  do is find  an unrestricted                                                                    
     parcel of  land or zoning  and -  bang! - you've  got a                                                                    
Number 0456                                                                                                                     
MR.  PREWITT noted  that as  Margot  Knuth had  testified at  the                                                               
previous hearing, the disadvantage to  the process used in Delta,                                                               
Kenai, and Whittier is that the  state does not control where the                                                               
prison is  built, who builds it,  or who operates it.   Under the                                                               
Kenai legislation  and the legislation  before the  committee, he                                                               
said, the state  doesn't have to contract for  the service unless                                                               
the  prison meets  the Department  of Corrections'  standards and                                                               
conditions well before construction.  He continued:                                                                             
     Through   the    intergovernmental   agreement   that's                                                                    
     effected between  the state and  between the  city, one                                                                    
     would  think   that  those  ...  conditions   that  the                                                                    
     department   has  -   in  terms   of  the   quality  of                                                                    
     construction  and  the  types   of  services  that  are                                                                    
     delivered  -  would  be  made,   or  the  state  simply                                                                    
     wouldn't go out and buy the service.                                                                                       
     Under this  process, which  I think is  ... a  bit more                                                                    
     advantageous process,  the clear advantage is  that the                                                                    
     local  community has  a  choice in  the  matter.   Most                                                                    
     communities don't have a choice  in the matter of where                                                                    
     a  prison is  located.   Kenai opted  not to  have one.                                                                    
     Whittier has  opted to have  one if that's the  wish of                                                                    
     the   legislature   to   provide  the   Department   of                                                                    
     Corrections that option.                                                                                                   
MR. PREWITT said he has been  coming to Juneau for several years,                                                               
representing  one  of  what  he   believes  are  two  "legitimate                                                               
approaches  to  the delivery  of  correctional  services in  this                                                               
state."    One is  cost-intensive,  whereas  the other  is  cost-                                                               
effective; both  satisfy correctional practices and  can meet the                                                               
highest standards of the industry.                                                                                              
Number 0625                                                                                                                     
MR. PREWITT noted that in  the prior week, the administration had                                                               
[proposed] a plan that he  believes represents the cost-intensive                                                               
approach to managing Alaska's prisons  and jails.  He referred to                                                               
a handout, which he highlighted page by page:                                                                                   
     As you  can see by the  first page of the  handout, the                                                                    
     administration   proposes   to    spread   1,269   beds                                                                    
     throughout the state,  at a total capital  cost of $239                                                                    
     million.  ... The  other ... interesting information on                                                                    
     this summary is  that there's a quote out  of that plan                                                                    
     that  says  the  state  now  has  an  overabundance  of                                                                    
     medium-custody inmates; I'll be addressing that later.                                                                     
     And on the next handout [page  2], you can see that the                                                                    
     Whittier prison  will add  the same  number of  beds in                                                                    
     one centralized  facility for a  total capital  cost of                                                                    
     $110  million -  $239  million  [versus] $110  million.                                                                    
     Both the  state and the  Whittier beds are  designed to                                                                    
     meet national and state standards.                                                                                         
     So what  accounts for the  difference?   The difference                                                                    
     can be summed up in  one sentence of the departments in                                                                    
     that  volume,  under the  Yukon-Kuskokwim  Correctional                                                                    
     Center [YKCC].  In the  plan that the state passed out,                                                                    
     under the  YKCC ... ,  it says that "the  additional 96                                                                    
     beds   at  Bethel   will   allow  the   Yukon-Kuskokwim                                                                    
     Correctional Center  to function  as it  was originally                                                                    
     intended, to serve the needs  of the region's sentenced                                                                    
     The  administration's  plan  provides prison  and  jail                                                                    
     services under  one roof,  and it  intentionally avoids                                                                    
     economy of  scale by duplicating programs  and services                                                                    
     throughout  the state.   It's  an acceptable  practice.                                                                    
     It's an expensive practice.                                                                                                
     Jails are  meant to hold  prisoners, from  arrest until                                                                    
     sentencing - until  sentencing.  The mission  of a jail                                                                    
     is  "safe  and  secure  confinement" -  no  frills,  no                                                                    
     programs, just  confinement.  That's what  a jail does.                                                                    
     After  sentencing,   prisoners  in  other   states  are                                                                    
     transferred to  central prisons to meet  their security                                                                    
     and  their program  needs.   And that  can be  for many                                                                    
     Toward  the   end  of  that  sentence,   the  offenders                                                                    
     hopefully   will   be   returning   closer   to   their                                                                    
     communities, to ... pre-lease centers  in the last year                                                                    
     or   two   of   confinement,  to   prepare   them   for                                                                    
     reintegration back into  society.  It's not  the job of                                                                    
     a jail.   The job of a prison  is long-term confinement                                                                    
     for  sentenced  offenders.   So,  in  an  ivory-towered                                                                    
     world  where money  is  no  objective, there's  nothing                                                                    
     wrong  with the  administration's plan.  ... It  simply                                                                    
     swims  against  what  I  believe  is  conventional  and                                                                    
     affordable correctional practice.                                                                                          
Number 0803                                                                                                                     
MR.  PREWITT  offered  that  effective  prison  programs  require                                                               
access  to   mental  health,  adult   educational  opportunities,                                                               
vocational training,  and substance  abuse resources;  the latter                                                               
are  limited  in most  Alaskan  communities.   Duplicating  these                                                               
programs in regional facilities throughout  the state is not only                                                               
inefficient and cost-prohibitive, he  said, but frequently cannot                                                               
be done  at all  because quality  control and  program continuity                                                               
are difficult to  maintain in communities without  those types of                                                               
resources.   That, he explained,  is why a larger  facility makes                                                               
MR.  PREWITT  told  the  committee   it  is  more  efficient  and                                                               
effective  to  have  long-term   sentenced  prisoners  in  larger                                                               
centralized  prisons, near  communities  with liberal  resources.                                                               
He noted  that a  1,200-bed centralized  prison in  Alaska [would                                                               
be]  modest  by  national correctional  standards;  many  prisons                                                               
outside of Alaska  are two to three times that  size.  He pointed                                                               
out that Spring Creek [Correctional  Facility], which is small by                                                               
those standards,  has over 500  prisoners now - [less  than] half                                                               
the size.                                                                                                                       
Number 0910                                                                                                                     
MR. PREWITT noted  that over the past seven years  there has been                                                               
an impasse  created by this  "philosophical, but  very practical,                                                               
very  pragmatic difference  of opinion  by qualified  corrections                                                               
providers," which  has resulted in the  worst prison overcrowding                                                               
in the state's history.  He  drew attention to the third sheet of                                                               
the handout,  titled, "Instate Inmate  Count -  Alaska Department                                                               
of  Corrections -  February  2002,"  which he  said  is a  prison                                                               
count.   Every day of the  year, he explained, the  Department of                                                               
Corrections,  under "the  Cleary order,"  is required  to keep  a                                                             
prison  population  count.    He  noted that  the  state  has  an                                                               
emergency capacity and a maximum capacity.   He said, "The red is                                                               
every  day that  one  of  these facilities  -  there's 15  state-                                                               
operated  correctional  facilities  -  has  been  over  emergency                                                               
capacity."    He  added  that when  prisons  are  over  capacity,                                                               
inmates and staff get hurt, for example.                                                                                        
MR. PREWITT  noted that the  distinction [as shown in  the chart]                                                               
between  maximum  capacity  and emergency  capacity  "isn't  very                                                               
much."   The  numbers show  that  the system  is "maxed-out"  and                                                               
overflowing,  he  said.    The  state is  nearly  200  beds  over                                                               
emergency capacity,  not counting  the 750 prisoners  in Arizona.                                                               
He stated, "The question isn't whether  the beds are needed.  The                                                               
question is what kind of beds, and where."                                                                                      
Number 1060                                                                                                                     
MR.  PREWITT noted  that  the department's  plan  shows that  the                                                               
state   currently  has   an  overabundance   of  "medium-custody"                                                               
inmates,  and it  calls for  adding 217  medium-security beds  to                                                               
Palmer and  256 to Kenai.   He said, "When the  750 prisoners are                                                               
factored into that demand, the  state needs 1,223 medium-security                                                               
beds and  'high-medium' beds in  order to return  those prisoners                                                               
from Arizona."   This is the population targeted  by the Whittier                                                               
facility and  is classified  by the  department as  "its greatest                                                               
need," he said.   Mr. Prewitt told the committee  he believes the                                                               
department  does need  more beds  at other  facilities, in  other                                                               
regions  around the  state;  however, "until  jails  are used  as                                                               
jails and  prisons are  used as prisons,  it's very  difficult to                                                               
assess what regional need is."                                                                                                  
Number 1103                                                                                                                     
MR.  PREWITT  pointed  out  that   the  one  thing  that  can  be                                                               
determined  is cost.   He  said, "Under  the plan  that you  were                                                               
given last week, the state  will deliver 473 medium-security beds                                                               
in  Palmer  and Kenai  ...  at  a  total  capital cost  of  $94.5                                                               
million."   For roughly  the same money,  he noted,  the Whittier                                                               
plan  would  deliver  1,200  beds  - over  twice  as  many.    He                                                               
continued,  "The real  difference  is in  comparing the  combined                                                               
capital  and operating  daily costs  per bed  at a  state medium-                                                               
security facility versus a private medium-security facility."                                                                   
MR.  PREWITT pointed  to the  handout titled  "Difference Between                                                               
State and Whittier Daily Costs Per  Bed."  He noted that the beds                                                               
proposed  in Palmer  and Kenai,  when combined,  have an  average                                                               
daily  operating cost  of  $98  per day,  a  figure  that is  the                                                               
institutional average,  combined with "other line  items that are                                                               
centralized  in  the  department's  accounting  system  -  inmate                                                               
programs,  [administration] and  support, statewide  and direct."                                                               
He  said if  the  $94  million is  amortized  over  the 25  years                                                               
proposed  under  the  Whittier  legislation,  there  would  be  a                                                               
capital cost  per bed of $36.   The 473 state-proposed  beds will                                                               
cost the state  $134 a day, per bed, whereas  the Whittier prison                                                               
is  capped by  the  legislature at  an  $89- to-$91-dollar  rate,                                                               
which is the  combined operating and capital rate.   He continued                                                               
as follows:                                                                                                                     
     So  a medium-security  bed in  Southcentral Alaska,  at                                                                    
     Whittier - which is no  further away than Wasilla, from                                                                    
     a  commuting  standpoint,  with  a  tunnel  that  gives                                                                    
     access, in the same region  as Palmer and Kenai - costs                                                                    
     us  roughly $90  a day  per bed,  combined capital  and                                                                    
     operating, versus $134.  Over  25 years, the savings is                                                                    
MR.  PREWITT noted  that  Mr.  Smith, who  had  testified at  the                                                               
previous hearing, called the Whittier  plan a "welfare plan."  He                                                               
told the committee that Mr. Smith  lives in Kansas, serves on the                                                               
executive  board  of the  retiree  chapter  of the  Alaska  State                                                               
Employees' Association, has  vigorously opposed privatization for                                                               
the  last five  years,  and  is entitled  to  his  opinion.   Mr.                                                               
Prewitt offered his own belief  that the Whittier prison plan "is                                                               
no welfare  plan for Whittier."   He  said the benefits  would be                                                               
extreme  for the  entire state,  and he  noted that  the handouts                                                               
show just some of the benefits to the state.                                                                                    
Number 1307                                                                                                                     
MR.  PREWITT offered  that  the Whittier  plan  would return  $18                                                               
million a  year to Alaska's economy.   He said, "If  you take the                                                               
multiplier  effect  of  that  $18 million,  it  benefits  all  of                                                               
Alaska."  He listed some  other benefits related to this proposed                                                               
project:  325 union jobs,  228 indirect construction-related jobs                                                               
that provide  services, and 225-275  permanent prison jobs.   Mr.                                                               
Prewitt referred  to criticism  about the  [pay] rates  [heard at                                                               
the previous  hearing].  He  suggested that Mr. Wiebe  could talk                                                               
about the  budget that  has been  prepared by  Cornell Companies.                                                               
He said, "These  are sound, private-sector wages.   These are not                                                               
halfway-house, $8-an-hour  jobs."   He also  said there  would be                                                               
200 permanent, indirect  jobs.  He mentioned  purchases of goods,                                                               
materials, and services over 25 years  from around the state.  He                                                               
suggested  it would  be  35  percent less  costly  to build  this                                                               
prison than  to have  "state-operated beds."   It  would mitigate                                                               
the state's liability for prison overcrowding, he added.                                                                        
MR. PREWITT told  the committee that the  department was released                                                               
from Cleary oversight - from court  oversight - about a year ago.                                                             
Before  that time,  he noted,  there were  sanctions accruing  at                                                               
roughly $2 million a year.  He continued as follows:                                                                            
     I don't  know what  the prisoners' attorneys  are doing                                                                    
     about the  situation that I  just showed you.   But you                                                                    
     can tell that  if this is worse than  the conditions of                                                                    
     while we  were under  Cleary oversight,  somebody's got                                                                  
     to be looking at this.   And I think the state is very,                                                                    
     very  close  to  being  ...   sued  once  again,  under                                                                    
     prisoners'  rights action,  for overcrowded  conditions                                                                    
     of confinement, not to say  the liability of a staff or                                                                    
     an offender being hurt under these conditions.                                                                             
     ... The  Whittier plan returns Alaska  prisoners closer                                                                    
     to rehabilitation  sources and to their  families.  No,                                                                    
     it  doesn't put  them back  next to  their families  if                                                                    
     they live  in Bethel and  Nome.  It's not  intended to.                                                                    
     Offenders  with long  sentences go  back to  their home                                                                    
     communities  for   pre-release  planning,   to  halfway                                                                    
     houses,  to pre-release  centers, where  for a  year or                                                                    
     two they're  involved in  community activities  so that                                                                    
     they  can transition.   You  don't open  the door  of a                                                                    
     prison and let  a person just go back  to the community                                                                    
     with $200 in their pocket.   It doesn't work.  They re-                                                                    
Number 1446                                                                                                                     
MR. PREWITT  said this is  the only plan  with a focus  on Alaska                                                               
Natives and that  talks about offering programs  "for Natives, by                                                               
Natives."   He noted that there  is a teaming agreement  with the                                                               
Alaska  Native Brotherhood  (ANB) and  said "we've"  been talking                                                               
with other  corporate entities.   He stated:  "There's  a sincere                                                               
commitment on  the part of the  City of Whittier and  on the part                                                               
of  Cornell  Companies  -  who operate  these  kind  of  programs                                                               
Outside -  to team  with the Alaska  Native communities  to break                                                               
this horrible cycle of recidivism."                                                                                             
MR. PREWITT noted that 37  percent of "our" prison population are                                                               
Alaska  Native  men, although  7  percent  of [Alaska's]  general                                                               
population  consists  of  Alaska  Native men;  he  called  [those                                                               
statistics] a  "travesty."  He  added, "And I don't  see anything                                                               
going  on that's  going  to try  to address  that  problem.   And                                                               
whether  it's successful  or  not, that's  another  story."   Mr.                                                               
Prewitt also offered  his belief that only 6 or  7 percent of the                                                               
Department   of  Corrections'   correctional  staff   are  Alaska                                                               
Natives.    He  asked  the  committee  [to  consider  what  these                                                               
statistics mean].                                                                                                               
Number 1540                                                                                                                     
MR. PREWITT  said this project  would add value to  a $90-million                                                               
tunnel that, when  opened, "did the opposite of what  the City of                                                               
Whittier expected it  to do."  He referred  to previous testimony                                                               
by Mr. Butler,  Mayor of Whittier, regarding  the skyrocketing of                                                               
sales taxes during  the first year of the  tunnel's operation and                                                               
the  nonuse of  the tunnel  the following  year when  a toll  was                                                               
charged.  He  said the community [of  Whittier] desperately needs                                                               
an "anchor  tenant" to  stimulate its economy.   He  added, "They                                                               
don't have  any other options,  if you've  ever been there."   He                                                               
said  [Whittier]   is  within   close  proximity   to  Anchorage;                                                               
therefore, the  real beneficiary  in terms  of employee  hire and                                                               
the purchase of  goods and services, for  example, would probably                                                               
be Anchorage  and "communities in  between."  He  reiterated that                                                               
this  project would  add value  to  the $90-million  tunnel.   He                                                               
suggested it would perhaps justify  more liberal access to Prince                                                               
William Sound.                                                                                                                  
Number 1600                                                                                                                     
CHAIR COGHILL  said [Mr. Prewitt's  testimony] gave a  balance to                                                               
some of  the testimony  previously heard  from the  Department of                                                               
Number 1616                                                                                                                     
REPRESENTATIVE CRAWFORD  asked how, if  the [prison] is  going to                                                               
be  built  [with union  labor],  the  large amount  of  projected                                                               
savings to the  state is achievable while still  getting a return                                                               
on investment.   He also  inquired about the [projected  rate of]                                                               
return on investment.                                                                                                           
MR. PREWITT deferred to Mr. Wiebe.                                                                                              
Number 1700                                                                                                                     
MARVIN   WIEBE,  Senior   Vice   President,  Cornell   Companies,                                                               
testifying via  teleconference, said  he was not  certain whether                                                               
Representative Crawford's  question referred to  the construction                                                               
phase  and  cost  of  the  facility  only,  or  whether  it  also                                                               
addressed  issues of  operation.   Specific  to the  construction                                                               
issue  and the  use  of  union labor,  he  answered that  private                                                               
operators look  at making  the prison  as efficient  as possible,                                                               
because every square foot costs money.                                                                                          
MR. WIEBE noted that he had  seen some projections from the State                                                               
of  Alaska  with  estimates  as  high  as  435  square  feet  per                                                               
prisoner, for example.  He remarked,  "In our world, which is the                                                               
world  of the  American  Correctional Association  [ACC] and  the                                                               
standards that are set by the  [ACC] at the national level, those                                                               
kinds  of  footages  are  higher  than we  need  to  operate  our                                                               
prisons."   He  said  it is  not atypical  for  [ACC] to  operate                                                               
medium-security beds in  a facility that has  footages of 220-250                                                               
square feet.   He  mentioned one of  [ACC's] facilities  that has                                                               
175  square  feet per  inmate  that,  while tight,  has  operated                                                               
efficiently for many years.  He  added that it was not a facility                                                               
that "we" designed and built.                                                                                                   
MR.  WIEBE said  there  are economies  of  scale associated  with                                                               
constructing  one  large facility  at  one  site, as  opposed  to                                                               
constructing several facilities to  achieve 1,200 beds across the                                                               
state.   He  also  said  there are  a  variety  of other  factors                                                               
regarding [cost efficiency] in construction techniques.                                                                         
Number 1830                                                                                                                     
MR. PREWITT  replied, "The short  answer, on the  operating side,                                                               
is there  is no intention  to pay starting  correctional officers                                                               
the wage and  benefits of starting correctional  officers for the                                                               
State of  Alaska, so  there are  cost savings  there."   He added                                                               
that it doesn't  mean substandard wages would be paid.   He asked                                                               
Mr. Wiebe  what the starting  hourly [wage] is for  a corrections                                                               
officer with academy training but no experience in the field.                                                                   
Number 1865                                                                                                                     
MR. WIEBE responded  that there are a variety of  wages for those                                                               
who   have  already   met  the   training  requirement.     Those                                                               
requirements are equivalent to those  for the State of Alaska and                                                               
are higher than  the national averages and  certainly higher than                                                               
the minimums  required by  the ACC.   With  respect to  wages, he                                                               
noted that  the pay  range, depending  upon experience,  would be                                                               
$13.50 to $16.34 an hour,  with an average estimated starting pay                                                               
of a little over $14.00 per hour.                                                                                               
Number 1930                                                                                                                     
REPRESENTATIVE CRAWFORD mentioned  health and retirement benefits                                                               
[for Cornell Companies].                                                                                                        
Number 1940                                                                                                                     
MR. WIEBE  explained that  the benefit  package is  "pretty much"                                                               
standardized, with  slight variations  from state  to state.   On                                                               
balance, he  said, [Cornell Companies']  benefits match  those of                                                               
the  private-sector industries  around the  country such  as IBM.                                                               
He noted  that [Cornell  Companies] provides  a very  good health                                                               
package for  its employees and  their families; the  portion paid                                                               
for by the  employee is a relatively small amount  per month, and                                                               
the portion  the employee  pays toward  family coverage  is "very                                                               
low," he said.   He indicated that a large  amount, close to $500                                                               
per  month, is  paid by  the company.   The  reason for  that, he                                                               
explained, is that the company  wants families of employees to be                                                               
insured with "those kinds of benefits."                                                                                         
MR. WIEBE said  the company has a different  holiday and vacation                                                               
package that  it "just rolled out."   The number of  days off per                                                               
year varies  with the employee's experience;  typically, however,                                                               
the employee  receives a minimum  of two weeks' vacation  for the                                                               
first year, as  well as 10 or 11 paid  holidays, depending on the                                                               
jurisdiction.  Mr.  Wiebe also said the company  provides a sick-                                                               
day  policy and  sick  leave, covers  pay  during unlimited  jury                                                               
duty, and a has a good  package for those with commitments to the                                                               
National Guard.                                                                                                                 
MR.  WIEBE noted  that typically  in the  private sector,  401(k)                                                               
plans  are  currently being  utilized;  employees  can enroll  in                                                               
those plans within  one year of employment, which  allows them to                                                               
defer part  of their  [monetary] compensation.   In  addition, he                                                               
said, there  is a company match  equivalent to 50 percent  of the                                                               
first  6   percent  of  contribution  on   an  employee's  wages.                                                               
Furthermore,  the  company  issues  stock  options  periodically,                                                               
based  on   performance  for   employees,  and   other  incentive                                                               
MR.  PRUITT  offered his  understanding  that  the value  of  the                                                               
package is 28 percent, on top of the wage.                                                                                      
MR. WIEBE concurred.                                                                                                            
Number 2082                                                                                                                     
REPRESENTATIVE  CRAWFORD reiterated  his  question regarding  the                                                               
expected return  on the  investment.  He  also mentioned  a story                                                               
that  Cornell [Companies]  had had  trouble  with its  accounting                                                               
practices,  similar to  those  experienced by  Enron.   He  asked                                                               
where [the State of Alaska] would be left in this process, if at                                                                
some point in the future Cornell Companies went out of business.                                                                
MR. WIEBE replied as follows:                                                                                                   
     Let me  make a  couple of comments  about the  issue of                                                                    
     the  accounting  discussion.     I'm  probably,  as  an                                                                    
     officer of  the company, not  at liberty to say  a lot,                                                                    
     because  there's   clearly  some   additional  auditing                                                                    
     that's going  on, and that  was asked for by  our board                                                                    
     of  directors just  to make  sure  that we  are on  ...                                                                    
     sound ground.                                                                                                              
     But,  clearly, these  were  audit  decisions that  were                                                                    
     made in concert with our  auditors at the time and with                                                                    
     reviews   by   the   SEC   [Securities   and   Exchange                                                                    
     Commission].  We've gone into  a climate in our country                                                                    
     - and  probably a  very healthy  climate -  where we're                                                                    
     looking at  - not just  with Cornell and not  just with                                                                    
     Enron, but really many, many  companies - ... a variety                                                                    
     of   accounting  transactions,   many  of   which  were                                                                    
     probably aggressive  - and I'm not  characterizing ours                                                                    
     in that way,  at all.  But they were  a function of the                                                                    
     time  and this  belief  that that  was [an]  acceptable                                                                    
     I  think, generally,  the standards  in accounting  are                                                                    
     going to  become more rigid, and  we're certainly going                                                                    
     to see  ... transactions  accounted for  differently in                                                                    
     the future.                                                                                                                
     We're  confident  that  we're   on  sound  ground  with                                                                    
     respect  to  the  accounting transaction  that's  being                                                                    
     reviewed right  now, and so we're  comfortable with the                                                                    
     outcome.    But,  nonetheless,   Cornell  is  a  strong                                                                    
     company.  Even  if we restated earnings  at some level,                                                                    
     currently we're sitting on, I  think, about $80 million                                                                    
     in cash  that we  are planning  to use  in investments,                                                                    
     such as  this facility  in its  operation, and  to have                                                                    
     reserves sufficient to take care of our business.                                                                          
Number 2190                                                                                                                     
     We're a  strong company with  a long history.   Many of                                                                    
     the elements of our company go  back as far as 1973 and                                                                    
     ...  shortly  thereafter.    This  is  a  company  with                                                                    
     programs that  have operated well for  many, many, many                                                                    
     years, and we expect that continuity to continue.                                                                          
     With respect  to the potential or  the possibility that                                                                    
     there  could be  a collapse  of any  company, for  that                                                                    
     matter, as a private  operator, there are provisions in                                                                    
     the  contracting agreement  with the  City of  Whittier                                                                    
     and Cornell  ... which  will be,  I'm sure,  dealt with                                                                    
     and  addressed   in  the  ...  agreement   between  the                                                                    
     Department  of Corrections  in Alaska  and the  City of                                                                    
     Whittier.   With  respect  to  bringing in  replacement                                                                    
     operators or,  in emergencies, perhaps even  having the                                                                    
     state  take  over  the  facility,   if  that  were  the                                                                    
     choosing or decision of the state to do that.                                                                              
     But, clearly, there are  many competitive operators out                                                                    
     there  who  are  able  to step  up  and  operate  these                                                                    
     facilities, and  so there's a  way for  these contracts                                                                    
     to be (indisc.) and others to  step in and operate if a                                                                    
     private operator  is preferred  to come in  and operate                                                                    
     the facility,  in the case  of a collapse.   That seems                                                                    
     unlikely,  given  the assets  of  the  company and  the                                                                    
     strength and history of the  company, but that would be                                                                    
     my response on that specific issue.                                                                                        
Number 2265                                                                                                                     
MR.  WIEBE   responded  to  Representative   Crawford's  question                                                               
regarding  the return  on investment  (ROI) by  saying he  didn't                                                               
know that.   He  said he  had worked  for years  on bids,  but no                                                               
longer does;  he added, "Our  ROIs were  estimated to be  about 3                                                               
percent."  He  said he is not currently looking  at those numbers                                                               
on the  project, partly because  the company is still  working on                                                               
the  numbers.    He  explained that  this  process  is  atypical,                                                               
although  not  unusual, in  that  it  begins  with  a cap  -  for                                                               
instance, the  company's $89-$91  cap -  and works  backward into                                                               
the  company's numbers  in order  to determine  feasibility.   He                                                               
said a variety of issues  are still being addressed; however, the                                                               
company would  not be moving ahead  on this project if  it didn't                                                               
think it was feasible.                                                                                                          
MR. WIEBE said it is difficult  to estimate what the margins will                                                               
be.    Referring  to  mention  that  quality  staff  may  not  be                                                               
attracted by wages  lower than those paid by the  state, he said,                                                               
"Our experience  has not  been that."   If,  hypothetically, that                                                               
were the case,  he said, [Cornell Companies] would  expect to pay                                                               
whatever wages  were needed to  ensure that the facility  was run                                                               
properly.  "That would be within  the $89-$91 cap," he added.  He                                                               
reiterated that  it is  difficult to  predict what  the company's                                                               
return will be.                                                                                                                 
Number 2383                                                                                                                     
VICTOR  WELLINGTON,  Sr.,  Mayor,  Metlakatla  Indian  Community,                                                               
testifying via  teleconference, pointed out that  Metlakatla also                                                               
is interested  in having  a prison  and is  working very  hard on                                                               
putting a  package together  to bring  to the  state.   He added,                                                               
"And the funding would be on our side."                                                                                         
Number 2450                                                                                                                     
ELSIE   HENDRIX,  Vice   President,  Kenai   Native  Association,                                                               
testified via  teleconference on  behalf of the  Whittier private                                                               
prison.   She  said her  prime interest  is in  bringing Alaska's                                                               
Native  people back  to their  state.   She opined  that Whittier                                                               
would be  a good location; because  it is close to  Anchorage, it                                                               
would cut  down on transportation  costs.  [The  prisoners] would                                                               
also be closer  to their families, and she suggested  it would be                                                               
a benefit in their treatment programs.                                                                                          
Number 2500                                                                                                                     
JAMES PRICE, testifying via teleconference  as a private citizen,                                                               
told  the committee  he was  formerly the  chairman of  Peninsula                                                               
Citizens Against  Private Prisons,  the organization  that fought                                                               
to bring the prison  issue in Kenai up for a  vote of the people.                                                               
He noted  that every time  a community  [in Alaska] has  voted on                                                               
having a private  prison, it has been soundly  defeated, by about                                                               
3-1.  Most of the time, he  said, when people have really taken a                                                               
look at a  privately operated public facility,  they have "chosen                                                               
not to desire this type of an arrangement."                                                                                     
MR. PRICE  said he  really feels that  having a  private operator                                                               
doing a  job traditionally done  by the state  is a mistake.   He                                                               
offered his belief  that "a lot of history" shows  that this type                                                               
of arrangement  is not beneficial  to the  people of Alaska.   He                                                               
encouraged the  committee to look  at what has happened  in other                                                               
communities and  what the public  sentiment is towards  this type                                                               
of an arrangement.  Mr.  Price clarified that he strongly opposes                                                               
any publicly funded private prison, anywhere in Alaska.                                                                         
Number 2596                                                                                                                     
VALERIE McCANDLESS,  testifying via  teleconference as  a private                                                               
citizen from Wrangell,  told members she would  prefer that there                                                               
not be private  prisons within the state.  She  said she believes                                                               
this  is an  arrangement that  will cost  the state  more in  its                                                               
resources  and, ultimately,  its  tax dollars.    She noted  that                                                               
[Wrangell's] Representative Peggy Wilson  has had public meetings                                                               
to  discuss  the shortfalls  of  the  state budget  and  possible                                                               
solutions  such   as  "dipping  into  the   permanent  fund"  and                                                               
establishing a  state income  tax.  The  latter, she  said, would                                                               
mean that  people throughout  the state  would be  supporting the                                                               
privately run [Whittier prison].                                                                                                
MS.  McCANDLESS noted  that the  community  of Wrangell  recently                                                               
held a special election regarding  the prison issue; it was voted                                                               
down by  over 70 percent.   She said this  was an issue  that the                                                               
city council had  almost moved forward on, without a  vote of the                                                               
people.  She referred to the  testimony of Mr. Prewitt that it is                                                               
prudent, but not  required, to involve the local  community.  She                                                               
said she  thinks it  is instructive  that when  other communities                                                               
have  studied the  issue and  had  the opportunity  to vote,  the                                                               
people  have overwhelmingly  voted against  this.   She suggested                                                               
there should  be "an educational  opportunity" and  a feasibility                                                               
study before any decision is made.                                                                                              
Number 2689                                                                                                                     
SHARI  MIETHE,   testifying  via  teleconference  as   a  private                                                               
citizen, told the  committee she is opposed  to the privatization                                                               
of prisons in  Alaska.  She asked permission to  read her written                                                               
testimony, which she estimated to be 2.5 minutes in length.                                                                     
CHAIR COGHILL  asked Ms.  Miethe to  summarize her  testimony and                                                               
fax the full text to the committee.                                                                                             
MS. MIETHE presented her testimony as follows:                                                                                  
     The process generated from a  private prison located in                                                                    
     Whittier will primarily go  to the Houston, Texas-based                                                                    
     prison  corporation,  Cornell,  and  its  stockholders.                                                                    
     Taxpayers in the  State of Alaska will have  to fund it                                                                    
     to the tune  of a minimum of $40 million  per year, for                                                                    
     25 years, according to HB 498.                                                                                             
     Representative  Peggy Wilson  reported in  the Wrangell                                                                  
     Sentinel  of  February  28, 2002,  that  the  State  of                                                                  
     Alaska has "three  pots of money or  accounts" that the                                                                    
     state draws from to pay  its bills:  the constitutional                                                                    
     budget reserve [CBR], which serves  as a shock absorber                                                                    
     for the  state general  fund, and the  earnings reserve                                                                    
     account [ERA],  where the permanent fund  [dividend] is                                                                    
     located.  And  she stated that the CBR  only has enough                                                                    
     funds  in it  for another  two  years, and  that if  we                                                                    
     don't close the  fiscal gap, the ERA  or permanent fund                                                                    
     account will be the next pot that's dipped into.                                                                           
     [Representative   Wilson]  had   further  stated   that                                                                    
     Alaskans  have only  three choices  to  choose from  in                                                                    
     resolving our  fiscal problem or  gap.  And  one choice                                                                    
     would be to  cut programs statewide.   And I'm quoting:                                                                    
     "It seems  to me a greater  fiscal responsibility would                                                                    
     be gained by not initiating  projects that will incur a                                                                    
     minimum yearly cost of $40 million."                                                                                       
     And  it seems  that if  we're  so eager  to spend  this                                                                    
     additional $40 million a year,  I'd like to see us look                                                                    
     to  the  needs  of  Alaskan communities  and  keep  the                                                                    
     revenue in  our state -  like senior health  care, port                                                                    
     expansion,   fisheries   enhancement,   job   placement                                                                    
     services, et cetera, et cetera.  The list is endless.                                                                      
     My  question  is this:    How  does the  state  justify                                                                    
     legislating  another multimillion-dollar  project while                                                                    
     we're  seeking ways  to save  money, generate  revenue,                                                                    
     and close the fiscal gap?                                                                                                  
MS. MIETHE mentioned  SB 336, which she said would  allow for the                                                               
expansion  of existing  public prison  facilities and  would make                                                               
the private prison investment a [moot]  point.  She said she does                                                               
not want the  legislature to enact further  legislation that will                                                               
incur long-range  expense and export  millions of dollars  out of                                                               
state, while becoming another case  of poor fiscal budgeting that                                                               
will  ultimately  cost  Alaskan  citizens  their  permanent  fund                                                               
[dividend] revenues, "and much more."                                                                                           
Number 2840                                                                                                                     
KEVIN WYATT, testifying via teleconference  as a private citizen,                                                               
told the  committee that  "the private-versus-public  debate" was                                                               
hashed out extensively  on the Kenai Peninsula,  and "once again,                                                               
when the  people voted,  ... I  think it  was a  3-1 thing."   He                                                               
offered his  belief that  it is  a fundamental  responsibility of                                                               
state  government  to  incarcerate and  rehabilitate  people  who                                                               
break the law.  He  spoke against shirking this responsibility by                                                               
including   third-party  [contractors]   in   carrying  out   the                                                               
MR.  WYATT,  in  regard  to  [HB  498],  suggested  deleting  the                                                               
language "third-party operator[s]".  He explained:                                                                              
     I just think  it has no place in the  ... debate of the                                                                    
     good of the public. ...  I appreciate the work you guys                                                                    
     do,  and I  also  support both  the administration  and                                                                    
       both House bills coming out that have a very cost-                                                                       
          effective plan to just add to existing state                                                                          
Number 2916                                                                                                                     
MIKE YOURKOWSKI,  City Council Member, City  of Homer, testifying                                                               
via  teleconference,  mentioned  making   certain  that  all  the                                                               
state's  costs are  included, among  them  the transportation  of                                                               
prisoners,  medical costs,  and court-ordered  programs.   Having                                                               
looked briefly at  the fiscal note, Mr. Yourkowski  said he hopes                                                               
there will  be a  more competent  analysis.   He opined  that "we                                                               
should be throwing our weight behind  SB 261 or HB 388," which he                                                               
believes  would do  a much  better  job of  keeping prisoners  in                                                               
their communities.  He suggested  that rehabilitation should come                                                               
first, and profits should not  be a consideration when looking at                                                               
the welfare of [Alaska's] prisoners.                                                                                            
CHAIR  COGHILL   responded  that   the  fiscal  notes   would  be                                                               
Number 2990                                                                                                                     
GEORGE AVILA,  testifying via teleconference, told  the committee                                                               
that although  he was a  correctional officer for  the Department                                                               
of Corrections, he was speaking as a private citizen.                                                                           
TAPE 02-22, SIDE B                                                                                                              
Number 2990                                                                                                                     
MR.  AVILA   noted  that  currently   there  is  a   shortage  of                                                               
correctional officers,  and he indicated that  a 350-bed facility                                                               
is  being  opened  in  Anchorage,  which  [the  department]  must                                                               
endeavor to staff along with  its existing facilities.  He stated                                                               
that  it would  be an  incredible stretch  for the  Department of                                                               
Corrections  to take  over a  1,200-bed facility  now, or  in the                                                               
future, without pre-planning  and hiring [in] stages.   Mr. Avila                                                               
said he doesn't think it is  sound resource management to build a                                                               
facility  in  Whittier and  expect  that  people from  Fairbanks,                                                               
which  is  on  the  road  system,  would  go  there  [for  family                                                               
MR. AVILA  mentioned SB  231 and the  governor's bill,  [SB] 336.                                                               
He noted  that both  would allow  expansion of  facilities around                                                               
the state,  which would  allow families  "better access  to their                                                               
... prisoners when they come back."                                                                                             
Number 2932                                                                                                                     
JIM  LECROWE, Retired  Corrections  Sergeant;  Retired Air  Force                                                               
Pilot and  Parachutist, testifying  via teleconference,  told the                                                               
committee  he has  spent  much  of his  life  planning ahead  for                                                               
emergencies.  He  expressed concern that if there  were a tsunami                                                               
warning in the  Whittier area, for example,  either 1,200 inmates                                                               
would have  to be moved  or the decision  not to move  them would                                                               
have  to  be  made.   Moving  1,200  inmates  without  transport-                                                               
qualified  staff  is  impossible,  he said;  the  endeavor  would                                                               
require  thirty 40-person  buses,  1,200 sets  of handcuffs,  and                                                               
1,200  sets  of  leg  irons,  for example.    He  said  it  isn't                                                               
MR.  LECROWE indicated  an opportunity  in "the  other bills"  to                                                               
impact  numerous  regions and  communities,  not  just one.    He                                                               
referred  to  the  testimony  of   Mr.  Prewitt  with  regard  to                                                               
generating  $18 million  a  year  for the  Alaskan  economy.   He                                                               
pointed  out that  it would  be generated  regardless of  whether                                                               
[the prison] is built in Whittier or somewhere else.                                                                            
MR.  LECROWE offered  that it  is a  fallacy to  consider Alaskan                                                               
inmates to  be closer to home  in Whittier than they  would be in                                                               
many other localities.  He  concluded by saying, "I'm against it.                                                               
And,  at   the  very   least,  you   should  look   at  increased                                                               
construction  costs in  Whittier  to withstand  an avalanche  and                                                               
Number 2852                                                                                                                     
LEONARD JONES,  Director of Public Facilities,  City of Whittier,                                                               
testifying  via teleconference,  referred  to  a two-page  letter                                                               
he'd faxed to  the committee; he offered a synopsis.   An Alaskan                                                               
resident  for 33  years,  Mr.  Jones said  he  was a  corrections                                                               
professional for the  Department of Corrections for  28 years; he                                                               
was a  contract administrator,  at the  executive level,  for the                                                               
ten  community residential  centers  or  halfway houses  operated                                                               
throughout  the state.    He'd resigned  on  November 16  [2001],                                                               
however, and had gone to work for the City of Whittier.                                                                         
MR.  JONES  told  members  he  has  seen  a  need  for  effective                                                               
programming and  Native cultural programs for  offenders, and has                                                               
helped to develop  those programs in Nome,  Barrow, and Southeast                                                               
[Alaska].    He  mentioned  the  vision  for  the  Department  of                                                               
Corrections and  read from his  written testimony,  which stated:                                                               
"To be  partners with the public  in the delivery of  a continuum                                                               
of  correctional  services with  integrity  and  a commitment  to                                                               
excellence."   He said  he wouldn't  read the  mission statement,                                                               
but has learned over the last  90 days that "the City of Whittier                                                               
is  prepared  to  work  with the  Department  of  Corrections  to                                                               
develop  fully  and  completely  this  same  mission  and  vision                                                               
concerning ...  the return  of prisoners to  Alaska."   He stated                                                               
his  full support  of this  concept and  said he  believes it  is                                                               
important to  bring [Alaska's]  prisoners home,  somewhere within                                                               
the state.                                                                                                                      
Number 2769                                                                                                                     
MR.  JONES  referred  to  testimony  the  previous  week  from  a                                                               
gentleman from Homer who suggested  that "family [members], loved                                                               
ones, and  others who  may visit  this prison  site are  'not the                                                               
kind of people you want in  your community.'"  Mr. Jones recalled                                                               
that the  testifier had  spoken of  increased crime  and negative                                                               
ideations that  would be caused  by having these  people visiting                                                               
prisoners.  Mr. Jones emphasized  that he disagreed, because each                                                               
prisoner incarcerated, whether in  Arizona or Alaska, "is someday                                                               
going  to be  released and  is  going to  come back  and be  your                                                               
neighbor."    He  mentioned  effective  programming  and  Cornell                                                               
[Companies], suggesting  that with some oversight  from the city,                                                               
the needs of the state and all Alaskan citizens can be met.                                                                     
Number 2665                                                                                                                     
DAVID  KATZEEK, Juneau  Alaska Native  Brotherhood (ANB)  Camp 2,                                                               
began  his  testimony  [interspersing short  segments  spoken  in                                                               
Tlingit] as follows:                                                                                                            
     My Tlingit  name is "King-gees-teh"  (ph).  ...  I want                                                                    
     to  express   my  appreciation   for  giving   me  this                                                                    
     opportunity to present to you  our position.  Noble and                                                                    
     honorable people of the land -  ... this is the way the                                                                    
     Tlingit culture  has always been regarding  our people,                                                                    
     or any  people, that we  look at them as  noble people.                                                                    
     We  don't  classify  them  as   criminals.    We  don't                                                                    
     classify them as  bad people.  We look at  them for who                                                                    
     they are,  and we work with  them in a way  that brings                                                                    
     back  an   individual  who   may  have   violated  some                                                                    
     boundaries and things of that nature.                                                                                      
     And to me,  when you're talking finances  and so forth,                                                                    
     I think  you're rightly talking about  the right thing.                                                                    
     But ...  how much can you  put on a child  who sees his                                                                    
     dad  come out  of prison  and is  rehabilitated and  is                                                                    
     restored, and comes back into  the community when, one,                                                                    
     the public  is safe;  two, ...  the recidivism  rate is                                                                    
     reduced;  and three,  that individual  is rehabilitated                                                                    
     and is contributing to the community.                                                                                      
     We look  at it as  an opportunity  - from me,  from the                                                                    
     Alaska Native  Brotherhood, Camp  II - that  there's an                                                                    
     opportunity in  private prisons  to be  able to  do the                                                                    
     kind of things that would  help restore our people.  It                                                                    
     isn't whether you're spending  millions and millions of                                                                    
     dollars,  but  it's  saving  money  if  you  develop  a                                                                    
     program, ... whether it's a  state prison or within the                                                                    
     ... structure  of a private  prison.  And we  favor the                                                                    
     private  prison,  because  we understand  some  of  the                                                                    
     types  of  things:    there  are  special-interest-type                                                                    
     groups  that are  happening here.    And we're  talking                                                                    
     But I want  to bring to your attention that  we need to                                                                    
     address  the issue  with respect  to  broken homes  and                                                                    
     broken hearts and  broken spirits.  How  much money can                                                                    
     you put  on that?   And so, I just  say to you  that we                                                                    
     support bringing back our families  together - not from                                                                    
     down [in]  Arizona, but from Juneau,  from Hoonah, from                                                                    
     Yakutat,  from Metlakatla,  and Sitka  - to  bring them                                                                    
     together back as  a family.  ... That's the  way it was                                                                    
     always,  with your  families and  our families,  across                                                                    
     this world.                                                                                                                
MR. KATZEEK  concluded by  saying 96  percent of  individuals who                                                               
re-offend use alcohol.  Many  are incarcerated in Arizona, which,                                                               
he  opined,  is  no  different from  the  [detention,  after  the                                                               
terrorist  attacks on  September 11,  2001, of  purported members                                                               
of] Al  Qaeda at Guantanamo  Bay.   He urged the  committee, when                                                               
thinking  about  money,  to  include other  values  that  have  a                                                               
positive impact "for all of us, as a people."                                                                                   
Number 2470                                                                                                                     
DON  ETHERIDGE,  Lobbyist  for AFL-CIO  [American  Federation  of                                                               
Labor  and Congress  of Industrial  Organizations], testified  on                                                               
behalf of the  public employees sector of the AFL-CIO.   He said,                                                               
"We oppose it  for many, many of the reasons  you already heard."                                                               
He  stated support  for expansion  of existing  facilities, which                                                               
would allow [prisoners] far away from  home to be closer to where                                                               
they came  from.  Referring  to testimony during a  prior hearing                                                               
on HB  498, when a testifier  commented that "it wasn't  heard in                                                               
Juneau," Mr. Etheridge  said "it" has been heard  in Juneau, just                                                               
not in the capitol.  He  noted that the local assembly had passed                                                               
a  resolution  in  support  of  the  expansion  of  the  existing                                                               
Number 2400                                                                                                                     
CHARLES CAMPBELL came forward to  testify.  A resident of Juneau,                                                               
he told  the committee  that he  came to Juneau  22 years  ago as                                                               
"Director  of Corrections  in Alaska."   He  indicated he'd  also                                                               
served for  two and one half  years as [a monitor]  for Cleary [a                                                             
legal  case  that  had  been  settled  pertaining  to  prisoners'                                                               
rights].  Beginning in 1950, he  said, he'd filled a wide variety                                                               
of roles and worked in seven different federal prisons.                                                                         
MR. CAMPBELL said  he loves [Alaska] and wants the  state to have                                                               
a good  corrections program.   He assured the committee  that the                                                               
proposal in  [HB 498] is  not a tenable  one; it would  not allow                                                               
Alaska to continue to have  its currently good correction system.                                                               
He noted  that [Alaska] is one  of the few states  that continues                                                               
to have "a reasonably good  correctional program, despite ... its                                                               
...  limited   resources."    He  remarked,   "Frank  Prewitt  is                                                               
certainly right in  saying that there are states  down south that                                                               
have  prisons with  three  and four  times as  many  beds as  ...                                                               
anticipated  in this  plan.   They've  had to  throw  ... in  the                                                               
MR. CAMPBELL  offered that a  1,200-bed prison in  Whittier would                                                               
not  be much  of an  improvement over  [the facility  located in]                                                               
Florence,  Arizona,  as  far  as  accessibility  to  families  is                                                               
concerned.   The  only  way  a 1,200-bed  prison  could work,  he                                                               
opined, is by way of a  unit system whereby the prison is divided                                                               
into  perhaps  four or  five  separate  units, each  individually                                                               
staffed and  programmed.  He  suggested that would  be impossible                                                               
for   Cornell  Companies   to  do,   however,  because   of  cost                                                               
considerations.   With 1,200  beds, he  said, prisoners  begin to                                                               
have more influence than staff over what happens at the prison.                                                                 
MR.  CAMPBELL  referred  to  previous  comments  by  Mr.  Prewitt                                                               
regarding  community   resources.    He  stated   that  community                                                               
resources are  enormously important  to a good  prison.   He told                                                               
the committee  that it is  important to remember that  the Alaska                                                               
State Constitution  requires that correctional  administration be                                                               
based on  principles of  reformation.   Whittier, he  said, would                                                               
not be  able to  provide, even remotely,  the types  of community                                                               
resources  that  are  needed.    He clarified  that  he  was  not                                                               
referring to  contractual resources  and said, "a  good volunteer                                                               
cadre is essential to a good program."                                                                                          
MR.  CAMPBELL said  he  sees  no possibility  of  [a facility  in                                                               
Whittier] being staffed; there is  still a deficit of officers at                                                               
Spring  Creek [Correctional  Center] who  don't have  to commute.                                                               
Cornell  proposes  to  pay  less money,  with  a  less  favorable                                                               
package, he said,  adding that the leadership of  the facility is                                                               
in  question   because  it  has   "an  inescapable   conflict  of                                                               
interest."   Calling [HB 498]  an "atrocious bill,"  Mr. Campbell                                                               
concluded by expressing confidence that  the prison will never be                                                               
built but  that the bill  will be  moved forward, causing  a long                                                               
delay in addressing  the serious problem of  having 800 prisoners                                                               
in Arizona.                                                                                                                     
Number 2119                                                                                                                     
CHAIR COGHILL closed  public testimony.  He  indicated there were                                                               
many  questions regarding  the bill  - philosophical,  practical,                                                               
legal, contractual, and economical.   He offered his intention of                                                               
letting the House Finance Committee  address economic issues.  He                                                               
indicated  the current  committee needed  to consider  the policy                                                               
decision regarding  a city's asking  [the legislature] to  do "an                                                               
authorization for contracts on private corrections."                                                                            
Number 2062                                                                                                                     
REPRESENTATIVE   JAMES  commented   on  the   sincerity  of   the                                                               
testifiers,  but indicated  she didn't  share the  concerns.   In                                                               
regard to Mr.  Campbell's last comment, she said,  "We don't make                                                               
it happen;  we only allow  it."   She mentioned the  proposal for                                                               
Kenai and the  Alaska Native participation.  She  said she thinks                                                               
it is  worth the  chance to  go ahead with  this.   She concluded                                                               
that she was happy with the legislation and would support it.                                                                   
Number 1998                                                                                                                     
REPRESENTATIVE FATE  noted that other communities  are interested                                                               
in  [a prison  as  well].   In  addition,  while [Mr.  Katzeek's]                                                               
testimony cited  the Tlingit culture, people  from other cultures                                                               
are  in prisons  across the  state.   He  questioned whether  the                                                               
Alaska  Native  Brotherhood  [members] would  take  up  permanent                                                               
residence [in  Whittier] or would  have to  commute.  He  said he                                                               
was concerned about  visitation to such a remote  area because it                                                               
is a  major factor in  rehabilitation "for friends  and relatives                                                               
to come and reinforce those  inmates," especially in the "medium"                                                               
facilities.  He noted that he has seen this firsthand.                                                                          
REPRESENTATIVE  FATE said  he  was questioning  the  choice of  a                                                               
private prison  when the state  did not  come out with  a request                                                               
for  proposals  to  find  out   if  any  other  communities  were                                                               
interested in the prison or  to see what private contractors were                                                               
available.   He  said he  needed answers  to questions  before he                                                               
would vote for a city that  he wasn't sure had the infrastructure                                                               
to provide the type of facility that "we" want.                                                                                 
Number 1845                                                                                                                     
REPRESENTATIVE  CRAWFORD voiced  concern that  1,200 beds  is two                                                               
and one  half times [the size]  of any facility currently  in the                                                               
state.   He said he  believed [building this prison  in Whittier]                                                               
would "preclude us from constructing  any other facilities in the                                                               
state  over  the  next  25  years."   He  explained  that  he  is                                                               
concerned about  having "one  monolithic structure"  in Whittier,                                                               
when there  are needs and concerns  all over the state.   He said                                                               
he favors  a regional  approach to this,  and although  there are                                                               
some  economies of  scale, [the  committee]  should be  concerned                                                               
with  rehabilitating   [prisoners]  to  re-enter  society.     He                                                               
concluded that this [legislation] would be a bad idea.                                                                          
Number 1765                                                                                                                     
CHAIR COGHILL announced that HB 498 would be held over.                                                                         

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