Legislature(2003 - 2004)
05/01/2003 03:35 PM Senate STA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 195-CERTIFICATES OF PARTICIPATION FOR JAILS CHAIR GARY STEVENS announced there was a proposed committee substitute (CS) before the committee. SENATOR JOHN COWDERY made a motion to adopt CSSB 195 \D version as the working document. There was no objection. CHAIR GARY STEVENS explained the bill would provide certificates of participation (COP) for the upgrade and expansion of certain jails that are in need of expansion or replacement. There are 15 community jails throughout rural Alaska and four of them are at the top of the needs list. The community jails in Dillingham and Kotzebue are top priority due to the high demand for their services while the North Slope Borough Community Jail needs more beds and has no room to expand. The Kodiak Community Jail needs to be replaced because it is old and in poor condition. The bill would provide COPs to be issued and each of the four municipalities would receive $4,000,000 provided they agreed to match the funds. JERRY BURNETT, Director of Administrative Services for the Department of Corrections, agreed that the four community jails were of top priority. He pointed out that community jails are an integral pre-trial component of the state correctional system and that the need for expansion is critical. The department requested federal funds for all four through both OMB (Office of Management and Budget) and the Alaska Congressional Delegation. They took no position as to whether COPs were the appropriate financing method. SENATOR GRETCHEN GUESS asked whether federal funds would be available in the next year. MR. BURNETT said they didn't know. SENATOR COWDERY asked if the maintenance appropriations were for the entire jail or just the additions. MR. BURNETT replied the annual 3.3 million additional funding would be for the additional capacity. The department currently has about $4.8 million for community jails in the operating budget and they currently operate 153 beds. SENATOR COWDERY asked if they would try to standardize the size and design of the facilities. MR. BURNETT replied he was unaware of any standardized design. Although they wouldn't oppose it, some of the jails were already designed. SENATOR COWDERY asked if there was a benefit to constructing larger facilities initially. MR. BURNETT said he couldn't speak to that, but this would alleviate some of the overcrowding in the state facilities in Bethel and Nome that are currently operating at over 100 percent capacity. SENATOR COWDERY asked if these were all pre-trial facilities. MR. BURNETT said the primary use of community jails is for pretrial or short sentences. The four community jails under discussion are all in communities that have a superior court so the people housed in those jails must appear in court in that community. SENATOR COWDERY asked if need is tied to population growth. MR. BURNETT said the number of people in the state facilities has increased at a higher rate than the population growth, but there is a strong correlation. SENATOR GRETCHEN GUESS asked if fewer inmate transfers would result in a savings. MR. BURNETT said there are bi-weekly transfers between community jails and the facilities in Bethel and Nome and sometimes there are more frequent transports due to overcapacity. Expanding the jails would reduce transfer costs, but actual savings are difficult to define. SENATOR COWDERY asked for the average length of stay. MR. BURNETT didn't have that data with him. CHAIR GARY STEVENS said the Kodiak City Manager probably had the information. DEVIN MITCHELL, Debt Manager for the Department of Revenue, explained the bill authorizes the issue of up to four COPs. They are leased back securities of the State of Alaska that are subject to appropriation for repayment. They are A-rated and garner low interest rates. They have a 15-year term and, with the current low interest rates, they would probably return about 4.5 percent interest on the borrowed money. In the bill, this correlates to about $1.6 million annually. The community would have a trustee act on its behalf to take a title-interest in the jail. In the event the state failed to appropriate, the trustee would take the facility and attempt to make bondholders whole. Also at issue is additional State of Alaska debt as it correlates to its bond ratings. The state recently issued $461 million in general obligation debt and although it's unlikely that SB 195 would rise to the level that it would impact state ratings, if much more money were involved the department would probably ask that ongoing revenues match ongoing expenditures. CHAIR GARY STEVENS noted the total payments for the full term of the COPs are estimated to be $24,000,000 rather than $30,000,000 as in previous years due to the change in interest rates. MR. MITCHELL agreed then pointed out that the numbers in the bill were estimated higher than the current rate. Because today's interest rates are extraordinarily low, the department cushioned the figures to avoid an underestimate. SENATOR COWDERY asked if privatization would save the state money. MR. MITCHELL replied he know nothing about prison operations. LINDA FREED, Kodiak City Manager, testified via teleconference in strong support of SB 195. On behalf of the state, the City of Kodiak operates a community jail for the entire region. Under the current contract, the city is liable for any activity that occurs in the jail and although they have a cooperative working relationship with the Department of Corrections, the city's liability is rising as the building ages. Increasing the number of beds to 20 would provide expansion capability into the future. They hope to be able to house prisoners for up to 30 days in the new facility instead of just 10 days. The city would be able to house special needs prisoners and operate more efficiently. The city is unable to underwrite the entire cost of a jail for the state, but they are happy to work through SB 195 and pay a cost share. They are committing the land, the design and engineering and they are willing to bond under their local capacity as long as they have some commitment from the state to pay back the debt service on the portion of the building that is committed to the jail. 5:05 pm SENATOR COWDERY asked if the current building is unsafe. MS. FREED replied the building isn't unsafe, but the roof needs to be replaced and there are problems with the foundation. The city has determined it would be more cost efficient to replace this and several other old city buildings rather than continuing to make repairs. TAPE 03-25, SIDE A SENATOR COWDERY asked about prisoner escapes. MS. FREED reported they have had no problems with escapes. SENATOR FRED DYSON made a motion to move CSSB 195(STA)\D and the attached fiscal notes from committee with individual recommendations. There being no objection, it was so ordered.
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