Legislature(2001 - 2002)
03/21/2001 01:40 PM Senate JUD
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
Number 872
SB 142-LEASE-PURCHASE SPRING CREEK CORRECTIONAL
MS. MARY JACKSON, staff to Senator Torgerson, said SB 142
authorizes a lease purchase for a facility in Seward at the Spring
Creek Correctional Center. The purpose of the facility is to
construct educational space, vocational education space, housing
for up to 150 inmates, and site and utility improvements. The
target population is youth, which will conform to the Department of
Correction's (DOC) youth offender program and also to the pilot
project being conducted at Spring Creek for educating the youth
inmates. SB 142 allocates $15 million, which does not match the
backup materials provided. The information used when drafting SB
142 was incorrect, DOC has provided new information but the amount
is still not known. This will be resolved in the finance
committee.
MS. JACKSON said the city of Seward built the Spring Creek
Correctional Center, and endorses SB 142.
SENATOR COWDERY asked how much vocational training there would be
at the Spring Creek center.
MS. JACKSON said the Alaska Vocational Technical Center (AVTEC) is
located in Seward and is one of the best vocational facilities in
the state. One reason the cost increased was because the
vocational education space was added, which would facilitate the
rehabilitation of prisoners.
Number 1034
CHAIRMAN TAYLOR said that receiving vocational training while at
the center would be important for youth offenders after their
release. He asked why the bonding and funding were in this fashion
instead of the way harbors have been funded, where the communities
were required to bond up-front, build the facilities, repair them,
and then after paying for the bonds, the communities would then be
reimbursed.
MS. JACKSON said this is different because the state would own the
facility on completion.
CHAIRMAN TAYLOR asked if the city of Seward was offering to take
over the maintenance.
MS. JACKSON said the city stands ready to facilitate the
construction, do the bond work in conjunction with the state, and
provide the on site construction. DOC would then operate the
facility.
CHAIRMAN TAYLOR asked if the facility would be funded with general
obligation (GO) bonds.
MS. JACKSON said the bonds would be revenue bonds that the city
would sell with the state.
CHAIRMAN TAYLOR asked if the city would then own the facility.
MS. JACKSON replied no.
CHAIRMAN TAYLOR asked how bonds could be issued without first
having ownership.
MS. JACKSON said she did not know, but it was done when the
facility was built. She said she thought it was a lease purchase
to the city.
CHAIRMAN TAYLOR said the city would own the facility during the
period of time in which it makes the lease payments back to the
state, which pays off the city bonds, and then the facility becomes
state property when paid off.
CHAIRMAN TAYLOR noted that people in the audience were shaking
their heads no.
MS. JACKSON read from page 2, line 27, "(3) at the end of the term
of the lease-purchase agreement, the state shall own the
correctional facility."
Number 1213
MR. SCOTT JANKE, City of Seward, testifying via teleconference,
said the city of Seward passed a resolution in support of SB 142.
He said the city would sell a revenue bond to build the facility
having executed an agreement with the state to lease it back. The
pledged leases would pay the revenue bond off and at the end of the
term the state would own the facility.
MR. JANKE commented that a dollar amount was not included in the
resolution because the city was aware that the initial amount was a
preliminary number and would change over time.
CHAIRMAN TAYLOR asked if SB 142 expanded the amount of beds in the
facility.
MR. JANKE said 150 beds would be added as well as classroom space.
CHAIRMAN TAYLOR asked how this would impact Seward's bond capacity.
MR. JANKE said it does not impact the city in a negative way
because there is a pledge from the state to make the bond payments.
This does not affect the city's GO bonding capacity because this is
a revenue bond with an identified revenue source - revenue bonds
are usually identified to a specific revenue source.
CHAIRMAN TAYLOR asked if the revenue bond would affect the GO bond
capacity for other projects the city might want.
MR. JANKE said no, it would not affect other revenue bonds.
Number 1375
MR. MALCOLM FLEMING, Principal, Seward Middle High School and
Spring Creek High School, testifying via teleconference, said he
supports SB 142. The current Youth Offender Program (YOP), which
includes Spring Creek High School, is housed in a single mod, which
is one large room. The room includes the inmate's cells, leisure
area, eating area, as well as the instructional class area for
three teachers. There are currently 40 students, with expansion
for 50 students. Currently, the school is being conducted in what
resembles a gymnasium - three classes are being taught
simultaneously in a single area, and the distractions are almost
insurmountable. The YOP is set up in phases and the classes are
set up by skill level. The current facility does not allow
students to be segregated for optimum programming. They are also
squeezed into the adult facility. This project would allow the
youth offenders to be segregated from the adult population, which
would enable the program to do something for the students. All of
the students were juvenile when they committed a crime and they
were sentenced as an adult. A large percent of the students would
be out of prison at age 25, effectively missing their educational
career.
Number 1495
SENATOR COWDERY asked for Mr. Fleming's opinion about the conduct
of the youths at Spring Creek.
MR. FLEMING noted that the student's conduct had been fairly good,
but there are some problems because there are 40 teenagers all
living in the same room and tempers do flare.
MR. WILLARD DUNHAM, testifying via teleconference, said he was
chairman of the first project to build Spring Creek. Mr. Dunham
said this was a simple way to do the expansion. He hoped the
legislature would give SB 142 serious consideration and then pass
the bill.
CHAIRMAN TAYLOR asked what the cost per day is for a prisoner at
Spring Creek.
MR. DUNHAM said he did not know the cost.
CHAIRMAN TAYLOR said his concern would be whether there would be a
cost benefit ratio in reducing the overall cost on a per prisoner
basis through the expansion. He said he was not sure 150 beds were
enough. He thought the facility should be completed as originally
designed so it could house some of Alaska's out-of-state prisoners.
MR. DUNHAM said the city had offered to do this but was snubbed by
the state.
MR. LOUIS A. BENCARDINO, speaking via teleconference, said
expanding Spring Creek Correctional Center was a smart move because
a lot of people were being sent out of state because Alaska does
not have adequate facilities to house them.
CHAIRMAN TAYLOR said 1,500 additional beds were needed within the
state, Alaska should be planning for the future.
MR. MALCOM FLEMING said there is an economy of scale for bringing
the students together in one place rather than trying to educate
them in a series of small schools across the state. There are
about 400 inmates that fit the criteria for the school and if these
students could be brought together the school would be more
economical to run.
CHAIRMAN TAYLOR said DOC could do this by reclassification.
Number 2057
MS. MARGOT KNUTH, Strategic Program Coordinator, Department of
Corrections (DOC), noted that several years ago Governor Knowles
set out a five-part test for consideration when looking at building
or expanding prisons and jails. The five parts are: 1) Public
safety protection, 2) Proposals needs to fit within statewide or
regional needs for correction space, 3) Best correctional practices
must be met, 4) Community participation achieved through
government-to-government transactions, and 5) Proposals must be
cost effective. Measured against these five standards, SB 142 is a
good piece of legislation. There is a need for education for the
growing population of youthful offenders. A large component of the
proposed education program is vocational, which DOC believes is the
right direction to go in.
MS. KNUTH said that Spring Creek is Alaska's only maximum-security
facility. Running a maximum-security facility costs more than
running a minimum-security facility. In terms of the most cost
effective manner for bringing on new beds for prison expansion, the
medium security facility at Palmer would be the most cost
effective. A maximum-security facility needs a higher staff ratio
and there are also higher construction costs involved. The prison
population needs to be put in a facility that matches its needs.
Spring Creek is the largest in-state facility and by having a
school there, further economies of scale would be created for the
cost of care.
MS. KNUTH said that DOC has had ambivalent feelings about Spring
Creek ever since the facility opened. Alaska needs the maximum-
security facility, and Seward has been enthusiastic about having
the facility, but Seward has been a difficult place to find housing
for the officers and support staff. It is also a difficult place
for secondary employment. But Seward is recognizing the importance
housing for DOC's needs and is trying to do more about affordable
housing for staff. This has made a significant impression on DOC
and is part of the reason DOC is in support of SB 142.
MS. KNUTH noted the cost for the Anchorage jail project is $56
million. The project will house a large number of people but it
will definitely function as a jail, which means it will house
short-term people. The Anchorage jail is the first place where
steps have been taken to meet DOC's statewide and regional needs.
There are pressing needs for the expansion of the Fairbanks and
Bethel jail. Inmates at Fairbanks and Bethel could not effectively
be transferred to places like Spring Creek and Arizona because of
the transportation costs. DOC needs more prison and regional beds
especially in Bethel and Fairbanks.
Number 2302
CHAIRMAN TAYLOR asked why the youths are being run through the only
recreational area of the top maximum-security prison in the state.
MS. KNUTH replied that the youthful population is a special needs
population. The under 25 population tops the list for needing a
secure facility. Teenagers who have been convicted of a felony
offense are very out of control. Therefore, correctional practices
say that when dealing with a youthful offender, a secure
environment is the best placement for them.
CHAIRMAN TAYLOR said he thought there was a vocational education
program in Palmer.
MS. KNUTH said Point McKenzie is the vocational farm. She did not
know how many youthful offenders were there but it is a minimum-
security placement. It is not listed as one of DOC's institutions
and it requires the best inmates rather than the most troubled.
Ms. Knuth said there are good vocational education programs in the
state but more are needed, especially for the under 25 age group.
SIDE B
CHAIRMAN TAYLOR said he was glad to hear that Alaska had a policy
on prisons. But it seemed odd to him that there would be a
vocational education program at Palmer and also at Spring Creek.
MS. KNUTH said there are 42 students in the program at Spring Creek
and there is capacity for 50. DOC has identified 400 inmates who
are 25 and under who have a sentence long enough to serve, making
it appropriate for them to go through the program. If SB 142
passed, not all of the 400 inmates would be qualified for the
vocational education program. Out of the 400, a 150 bed program
could be filled. Corrections is a developing growth industry in
Alaska and DOC is always looking at what is the most efficient
allocation of resources and Spring Creek seems to be an efficient
allocation.
CHAIRMAN TAYLOR asked if 150 youth offenders would be moved to
Spring Creek for the program.
MS. KNUTH said there are 150 there at any given moment.
CHAIRMAN TAYLOR noted that the fiscal note indicated the cost would
be $4.25 million per year. He asked if this was just the lease
cost.
MS. KNUTH said she thought the $4.25 million was for the new
operating expenses of the school, and the lease cost would be $23.2
million.
CHAIRMAN TAYLOR said the lease cost would be paid over a 20-year
period.
MS. KNUTH said that was correct.
CHAIRMAN TAYLOR asked if that was for the cost of running the
prison or for the educational program within the prison.
MS. KNUTH said it was for the number of new positions required - 31
new correctional officers, 2 probation officers, another nurse and
another kitchen staff would also be needed, and a mental health
clinician - this would be pro-rata growth for the number of new
beds. Funding for new teachers would come from the Department of
Education's Education Foundation Formula.
CHAIRMAN TAYLOR noted that a fiscal note from the Department of
Education was missing.
MS. KNUTH said DOC is planning on a 150 student enrollment. The 50
bed spaces that are now being devoted to this program would revert
back to the general population. The way education costs are borne
in the state is that the money follows the student and funding
would follow students to Spring Creek.
CHAIRMAN TAYLOR asked if the funding would follow a student to age
25.
MS. KNUTH said she did not know. She said there were several
restrictions and methods for structuring a program to access funds.
CHAIRMAN TAYLOR said he would like this information.
Number 2053
SENATOR COWDERY asked what is anticipated for class size.
MS. KNUTH said there would be three different pods - breakdown of
groups. There would be 50 youthful offenders in three separate
programs, but she was not sure how the programs would be broken
down into classroom sizes. She said she would furnish the
committee with this information.
SENATOR COWDERY asked her to include a little detail with this
information.
CHAIRMAN TAYLOR said most vocational education requires a higher
level of teacher participation because of the smaller class size.
CHAIRMAN TAYLOR said he was curious about the costs and whether the
legislature should be making SB 142 more than a policy call as to
where in the state prisoners should be focused. He asked why there
are not more than 40 youthful offenders at Spring Creek.
MS. KNUTH said there are space constraints and Spring Creek is a
maximum-security facility. DOC is trying to balance the desire to
have youthful offenders in one place but there are only a finite
number of maximum-security beds available. The Spring Creek
expansion would help meet these needs.
CHAIRMAN TAYLOR said that still leaves the state with 650 to 700
offenders in Arizona.
Number 1948
MS. KNUTH replied yes. Prisoners are a growth industry for Alaska,
gaining in population of 100 to 150 each year and the state has not
been building capacity to keep up with that.
CHAIRMAN TAYLOR said a prison could not be built in Alaska without
it being operated by DOC. In other states some prisons are
privately operated, and "the big problems are one of unions." "The
administration will not allow the expansion of any of Alaska's
facilities without a union running it."
MS. KNUTH said Spring Creek is a state facility. Most of the
program providers are private, their services are procured through
contract but the correctional officers are part of DOC. HB 53,
which passed in 1998, authorized the state to negotiate for a
private prison in Delta Junction and the state has been working
toward that, but there have been a number of obstacles to prevent
this from happening. Governor Knowles's signed HB 53 and DOC has
been trying to make it a reality.
CHAIRMAN TAYLOR asked if the Delta Junction facility might be
built.
MS. KNUTH said a cost effective study has been completed on this.
HB 53 required that the prison be built on the Fort Greely base,
using the existing facilities. DOC believes this would not be cost
effective. It would be cheaper to build a new facility off base
than to use the existing facilities. The facilities at Fort Greely
have asbestos and the barracks' are rectangular. The latest
thinking in prison development is to use circular structures, which
gives the greatest line of sight for staffing, reduces staff
numbers, and is more efficient. Also, the federal government has
not ruled out using this base for a missile defense program.
Number 1767
MR. DEVEN MITCHELL, Department of Revenue (DOR), said he had
listened to the people from Seward testifying and he would like to
talk with them about the prospective financing. He envisioned this
being structured similar to the original financing that built the
Spring Creek Correctional Facility, which was a state sold
certificate of participation with the city of Seward's involvement
in facilitating the lease.
CHAIRMAN TAYLOR asked if SB 142 was different from HB 53 with
regards to financing.
MR. MITCHELL said he thinks the legislation allows the same
structure - it is similar HB 53. It is a matter of how DOR works
with the city in enacting it. Either way, the credit of the state
would be on the line. The city does not want to incur liability,
and due to the outstanding obligations of the Spring Creek
facility, an investor could not be given the facility if the state
quit making the lease payments. The lease payments of the state
are the security.
CHAIRMAN TAYLOR asked if the only constraint on the lease purchase
was legislative approval.
MR. MITCHELL said yes. For real property there is a $1 million
limit on the ability to get a lease purchase without legislative
authority.
SENATOR COWDERY asked a question but the tape malfunctioned and the
question was not recorded.
MR. MITCHEL said, "and that was after a particular facility was
financed with a combination of lease purchases, where the limit was
$5 million and they had two financings. One to acquire property,
one to provide improvements, just under $5 million."
CHAIRMAN TAYLOR said, "They became very creative in not having to
come to the legislature to do it. This would not impact because it
is revenue bonds backed by the state. This would not impact the
overall bonding capacity of the community of Seward."
MR. MITCHELL said it would impact the state of Alaska rather than
Seward.
CHAIRMAN TAYLOR said any community could do the same thing as long
as they had bonding capacity. He said as long as they were revenue
bonds, backed by the state, there would be no impact on Ketchikan,
Thorn Bay, or Wrangell, who have been lobbying for a prison.
CHAIRMAN TAYLOR said he would hold SB 142 in committee until the
Department of Education furnished the committee with the requested
information.
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