Legislature(1997 - 1998)
02/25/1998 01:35 PM CRA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
\ 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.