Legislature(1997 - 1998)
02/25/1998 01:35 PM Senate CRA
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\ SENATE COMMUNITY & REGIONAL AFFAIRS COMMITTEE
February 25, 1998
1:35 p.m.
MEMBERS PRESENT
Senator Jerry Mackie, Chairman
Senator Gary Wilken , Vice Chairman
Senator Dave Donley
Senator Randy Phillips
Senator Lyman Hoffman
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE BILL NO. 308
"An Act relating to authorizing the Department of Corrections to
enter into an agreement to lease replacement facilities for the
Sixth Avenue Jail for the confinement and care of prisoners with
the Municipality of Anchorage; and providing for an effective
date."
- HEARD AND HELD
SENATE BILL NO. 190
"An Act relating to eminent domain and to negotiations to purchase
property before it is taken through eminent domain; and providing
for an effective date."
- MOVED CSSB 190(CRA) OUT OF COMMITTEE
PREVIOUS SENATE COMMITTEE ACTION
SB 308 - No previous action to record.
SB 190 - See Community & Regional Affairs minutes dated 2/18/98.
WITNESS REGISTER
Senator Jerry Ward
State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Prime Sponsor of SB 308
Craig Persson
Public Safety Employees Association
P.O. Box 60441
Fairbanks, AK 99706
POSITION STATEMENT: Testified in opposition to SB 308
Devon Mitchell
Department of Revenue
P.O. Box 110400
Juneau, AK 99811-0400
POSITION STATEMENT: Outlined department's concerns with SB 308
Ron Wilson
P.O. Box 773
Nome, AK 99762
POSITION STATEMENT: Testified in opposition to SB 308
Sherman Enouf
Municipality of Anchorage
P.O. Box 196650
Anchorage, AK 99519
POSITION STATEMENT: Testified in support of SB 308
Bill Parker, Deputy Commissioner
Department of Corrections
4500 Diplomacy DR, Suite 207
Anchorage, AK 99508-5918
POSITION STATEMENT: Spoke to statewide corrections problems
ACTION NARRATIVE
TAPE 98-6, SIDE A
Number 001
CHAIRMAN MACKIE called the Senate Community & Regional Affairs
Committee meeting to order at 1:35 p.m., and noted all members were
present.
SB 308 - LEASE-PURCHASE: ANCHORAGE JAIL
CHAIRMAN MACKIE introduced SB 308 as the first order of business.
SENATOR JERRY WARD, prime sponsor of SB 308, explained that the
Sixth Avenue Jail in Anchorage was built over 35 years ago. The
space in the facility is inadequate and the building has outlived
its usefulness. The Municipality of Anchorage has determined that
refurbishing the existing structure would be cost prohibitive.
SB 308 gives authorization to the Department of Corrections to
enter into an agreement with a private contractor to design, build
and operate a 200-bed facility. This will reduce the cost as
compared to the state of Alaska designing, building, and operating
a new facility. Senator Ward said this proposal is 100 percent
privatizing.
Senator Ward pointed out that the legislation provides the
capability of expanding the facility to 400 beds. He said he had
this provision added because as a jail he believes it should be
structured to where it would be multiple bunking to start with,
but also that it be able to be multiple bunking after that He
added this is not a long-term holding facility and it should be a
place where people get locked up for a short period of time.
In his closing comments, Senator Ward said Mayor Mystrom of
Anchorage has said this facility is the municpality's number one
priority, and the Anchorage Caucus has placed as it one of its
highest priorities as well.
Number 103
SENATOR HOFFMAN said he understands the need for additional beds in
the correctional institution for Anchorage, but there are needs
throughout the state of Alaska. One of the most crowded facilities
in the state is the Yukon-Kuskokwim correctional facility in his
district. He said Governor Knowles has introduced a package for
facilities throughout the state, but the Commissioner of
Corrections has said that even if that package was funded right now
by the Legislature, by the time the beds were built there would
already be a shortage of correctional beds throughout the state of
Alaska. He suggested the Legislature needs to be looking at the
problem of a lack of beds as a whole throughout the state of
Alaska, as well as financing mechanisms to address the problem. He
questioned if the Legislature should be addressing the total
problem or should it just be looking at Anchorage's problem.
Number 147
SENATOR WARD responded that he does not think Anchorage should
stand alone, and he agrees the state has a tremendous problem. He
believes there needs to be a statewide policy on corrections.
Although he is presenting the legislation as an "Anchorage alone
bill," he would like it to be part of a total fix.
Number 190
SENATOR WILKEN said he has toured the Sixth Avenue Jail in
Anchorage and agrees that it has problems, but he has concerns with
the bill and particularly the seven questions that have been laid
out by the Department of Revenue. He suggested the bill should be
held in committee until those questions are answered. He then
questioned what would happen to the jobs of current employees at
the jail if the new facility was privatized.
SENATOR WARD replied that some would probably be transferred to
other state facilities, some might opt for retirement, but there
are no guarantees for employment. He added that unfortunately the
Department of Corrections is one department where there will never
be a lack of growth, and he believes it is imperative to start
looking at the core causes of why the state's jails are filling up
or the state will never be able to resolve overcrowding in these
facilities.
SENATOR WILKEN commented that he appreciates what Senator Ward is
trying to do, but he thinks the plan needs to take the employees
into consideration.
Number 300
CRAIG PERSSON, representing the Public Safety Employees Association
(PSEA), which has a membership of approximately 700 correctional
officers, said the association supports the governor's proposal for
the expansion of the Sixth Avenue facility. He said they could
also go along with a proposal talked about by the municipality that
would be a lease back from the municipality; however, they have
serious concern with the privatization issues raised by SB 308.
Privatization would mean 35 members with good paying jobs are
displaced with people who make low wages and probably have no or
very little benefits. He said he doesn't see this as being of any
benefit to the Municipality of Anchorage.
Mr. Persson related that a 1996 U.S. General Accounting Office
study concluded that the overall average savings is approximately
one percent for private prisons versus public prisons, and for this
one percent savings, there is a much greater risk for states.
Mr. Persson pointed out that state correctional officers go through
approximately 200 hours of training and a six-month probationary
period of on-the-job training before they become full fledged
correctional officers. They must also meet Alaska Police Standards
Council (APSC) standards as set forth in statute. However, SB 308
is silent on training and APSC standards.
Mr. Persson voiced support for the governor's proposal to expand
the regional prisons. He said the bulk of bed space needed is for
short term and misdemeanant offenders along with pretrial
offenders, and these needs can only be met by expanding the
regional facilities.
In his closing remarks, Mr. Persson said the community of Anchorage
and the state of Alaska would be better served by using
professionally trained staff to accomplish their goals.
Number 350
DEVON MITCHELL, an assistant investment officer in the Debt
Management Section of the Department of Revenue, said the
department submitted a fiscal note on SB 308 in which no costs were
specified as there are no fiscal impacts projected at this time.
However, from a fiscal perspective the bill appears incomplete and
seriously flawed.
The Department of Revenue has the following concerns with SB 308:
1) No maximum annual or total term lease costs are specified in
the bill;
2) No maximum capital expenditures for the facility are
established;
3) No maximum lease term is specified;
4) There is no requirement that taxes on the financing be used for
the project;
5) There is no provision for state ownership of the facility after
the long-term debt has been retired by state rent payments;
6) There is no provision for refinancing the underlying debt from
time to time with a corresponding reduction of annual lease costs
to the state; and
7) There is no provision for state participation in structuring
the required long-term financing for the project. Private
contractor bankruptcy, malfeasance or default on the underlying
project financing which relies on the state's credit could have
adverse financial and legal consequences to the state agencies and
municipalities.
Mr. Mitchell said if it is decided to proceed with a privately
operated correctional facility in Anchorage, the Department of
Revenue recommends unbundling the financing from the agreement with
the private contractor to construct and operate the correctional
facility; that is, the state would arrange the financing through
certificates of participation and lease purchase financing.
Number 380
CHAIRMAN MACKIE commented that Senator Ward has indicated that he
is working with the Administration to not only work on a statewide
plan, but to address these issues as well.
Number 409
RON WILSON, a 15-year correctional officer for the state of Alaska
testifying via teleconference from Nome, said a private
corporation's motive is profit, and when profit becomes the motive,
then everything else becomes secondary. He said there are costs
that aren't included in the contract with the private company, and
the state may incur costs such as the cost of administering and
monitoring the contract, audits, legal fees, liability insurance,
medical costs, budgeting for emergencies, and transportation of
inmates.
Mr. Wilson said the legislation also provides for a bypass of the
competitive bid process and it voids statute language which states
the commissioner must not enter into an agreement with an agency
unable to provide the degree of custody, care, and disciplines
similar to that required by law. He added that he doesn't
understand, for any reason, the need to delete the requirement from
any bill addressing that issue.
Mr. Wilson noted that the Colorado State Legislature has introduced
legislation that would require for-profit facilities to have a
three-year license, and revoke that license with notification if
discrepancies aren't fixed. The state of Pennsylvania has passed
a bill prohibiting the Department of Corrections from privatizing
at all, stating protecting the public from criminals is a vital and
inescapable duty of the government for which the government, and
only the government, should take full responsibility.
Mr. Wilson stated that as a correctional officer in the state of
Alaska, he believes the state has the safest facilities in the
country, and the two main reasons for that are small facilities and
a well paid staff. The only reason the state is where it is at now
is because beds for the prisoners have not been provided.
Number 483
SHERMAN ERNOUF, representing the Municipality of Anchorage and the
Office of the Mayor, expressed appreciation for Senator Ward's
introduction of SB 308, because there is very little doubt that
there is a clear need for the new facility in Anchorage. He added
that there are a couple of issues with the bill, and they look
forward to working them through. One concern is the need for the
immediate capacity of 380 to 400 prisoners. Another concern is the
language in the bill which puts the municipality as kind of an
overseer to a contract with the third-party prison company. The
municipality prefers that the Department of Corrections administer
any sort of private arrangement because they feel that's their
business and not really the business of the Municipality of
Anchorage.
Number 508
BILL PARKER, Deputy Commissioner, Department of Corrections, said
that in the short term, the department is under court order to get
the capacity for Anchorage jails down to 2,691 capacity by May 1,
1998; however, they are currently approximately 560 over that
number. The department must submit a plan by March 9 on how they
would get down to the court ordered capacity. He said the only way
to do that is to put more sentenced felons outside the state and to
put unsentenced felons and misdemeanants in some other alternative
housing in the state.
Mr. Parker directed attention to charts which he reviewed for the
committee's information:
. Projections show that the system is growing by a little more
than 200 prisoners a year, which is between seven and eight
percent.
. The state is under court order to decrease overcrowding, it
assesses fines for overcrowding, but for three sessions in a
row the Legislature has failed to provide any new beds.
. In 1995, the department sent 206 prisoners to a Florence,
Arizona facility, and that number has increased to 280.
. In 1996, the governor introduced a bond bill to bill those
beds and pay for them with g.o. bonds, but the bill did not
pass. The focus then went to the private prison in Anchorage,
and an initiative was put on the ballot in Anchorage to stop
that.
. In 1997, a criminal justice cabinet asked the Legislature to
work with them and discuss the issues, however, they came up
with no legislation. That same year the ballot measure
passed.
. In 1998, the governor introduced a new piece of legislation to
provide additional beds. That legislation is currently in the
Senate State Affairs Committee.
Mr. Parker said in the short term, in order to get down to the
2,691 court-ordered capacity, the department can use more half-way
house beds for low risk offenders; they can send more dangerous
prisoners out of state; and they can place non-dangerous
misdemeanants in tents or other temporary structures on prison
grounds.
Long-term solutions could be the expansion of the Spring Creek,
Palmer and Yukon-Kuskokwim facilties, replacement of the Sixth
Avenue jail, and the modification of Fort Greely as a prison
facility.
In his closing remarks, Mr. Parker emphasized the need for 400 beds
in Anchorage rather than the 200 provided for in SB 308.
TAPE 98-6, SIDE B
Number 585
CHAIRMAN MACKIE related that he and Senator Ward discussed holding
SB 308 in committee to see if the state can come up with a plan
that is satisfactory, and if the state fails to do so, the bill
can be brought back before the committee as an optional plan.
Number 575
SENATOR WILKEN asked how what the proposed capacity for Fort Greely
would be, and MR. PARKER responded that the legislation proposes a
capacity of 800 and expands to 1,200.
Number 566
CHAIRMAN MACKIE stated SB 308 would be held in committee.
SB 190- ATTEMPT TO PURCHASE BEFORE EMINENT DOMAIN
CHAIRMAN MACKIE brought SB 190 back before the committee and
directed attention to a proposed committee substitute addressing
concerns raised at the previous hearing on the legislation. He
outlined the following changes in the committee substitute:
On page 1, line 8 the word "property" was inserted to clarify the
phrase "interest to be taken."
On page 1, line 13 and page 2, line 17, the phrase "reasonable and
diligent" was removed and replaced with the language "a good faith
effort at negotiation." Chairman Mackie said he thinks the
language still meets the spirit of what he wants to accomplish and
that is that a good faith is made to try to work out the details
with a person before having to condemn their property and force
them into a litigation situation.
Number 550
SENATOR DONLEY suggested he would like to see language clarifying
that the burden is on the person opposing the condemnation to prove
that there was no good faith effort, which he thought would be a
step towards a middle ground between the Chair's goals and concern
expressed by committee members. CHAIRMAN MACKIE responded that the
next committee of referral for the bill is the Judiciary Committee
and he thought that particular language could be considered there.
Number 533
SENATOR PHILLIPS reiterated that when there have been projects in
his district, the experience between DOT and the property owners
has been real good. He is concerned that by making these changes,
one person could delay a project that 99.9 percent of the people
support.
CHAIRMAN MACKIE commented that he fails to see where language
asking that a good faith effort be made is going to hold anything
up.
SENATOR DONLEY said he agreed that a good faith effort should be
made, but like Senator Phillips , he is concerned that the bill
creates a new legal criteria, a new requirement that an
obstructionist can base litigation on.
After brief discussion it was agreed to add Senator Donley's
suggested language to the proposed committee substitute.
SENATOR DONLEY moved a conceptual amendment to the end of line 1 on
page 2, which adds a new sentence to read: "In a proceeding to
oppose condemnation, the burden of proof shall be on the party
opposing the condemnation to prove that the state failed to use a
good faith effort." Hearing no objection, the Chairman stated the
conceptual amendment was adopted.
Number 425
CHAIRMAN MACKIE requested a motion to adopt the proposed committee
substitute with the new language included.
SENATOR WILKEN moved the adoption of CSSB 190(CRA). Hearing no
objection, it was so ordered.
SENATOR WILKEN moved CSSB 190(CRA) and the accompanying zero fiscal
note be passed out of committee with individual recommendations.
Hearing no objection, it was so ordered.
There being no further business to come before the committee, the
meeting adjourned at 2:25 p.m.
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