Legislature(1997 - 1998)

02/25/1998 01:35 PM CRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= 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                  
     - 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            
             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                
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               
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                        
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             
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                
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                    
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               
.    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              
.    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                   
.    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                 
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                   
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               
CHAIRMAN MACKIE commented that he fails to see where language                  
asking that a good faith effort be made is going to hold anything              
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.                                                 

Document Name Date/Time Subjects