Legislature(1997 - 1998)
03/18/1998 09:20 AM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 53
"An Act relating to the authority of the Department of
Corrections to contract for facilities for the
confinement and care of prisoners, and annulling a
regulation of the Department of Corrections that limits
the purposes for which an agreement with a private
agency may be entered into; authorizing an agreement by
which the Department of Corrections may, for the
benefit of the state, enter into one lease of, or
similar agreement to use, space within a correctional
facility that is operated by a private contractor, and
setting conditions on the operation of the correctional
facility affected by the lease or use agreement; and
giving notice of and approving a lease-purchase
agreement or similar use-purchase agreement for the
design, construction, and operation of a correctional
facility, and setting conditions and limitations on the
facility's design, construction, and operation."
CS FOR HOUSE BILL NO. 53(RLS)(title am)
"An Act expressing legislative intent without the force
of law concerning correctional facility space and the
Cleary v. Smith case; adding, as a general power of
municipalities, the power to provide for, and enter
into agreements concerning the confinement and care of
prisoners; relating to authorizing the Department of
Corrections to enter into agreements to lease
facilities for the confinement and care of prisoners
with the City of Delta Junction and with the
Municipality of Anchorage; and providing for an
effective date."
Representative Elder Mulder was invited to join the
committee. He read his sponsor statement into the record.
He said this bill would accomplish three things. First, in
the intent section, it gave the Court express Legislative
intent that they would work with the Commissioner of
Corrections to relieve overcrowding conditions. Second, the
department would be authorized to contract with the
communities of Delta Junction/Ft. Greely re-use authority
for the conversion of Ft. Greely to a private prison.
Third, the Commissioner of Corrections would be authorized
to contract with the Municipality of Anchorage for the
replacement of the Sixth Avenue Jail. Representative Mulder
noted several good reasons for this bill, including: jobs
for Alaskans, inmates would be held in Alaska and there were
no other reasonable proposals on the table at this time. He
specifically noted that by the end of FY '99, Alaska would
have over 850 inmates being held in a private prison in
Arizona, costing the State well in excess of $14 - $15
million. That kind of expenditure could be utilized to help
fund Alaska payroll to pay for Alaskans.
(Tape malfunction at this point.)
Representative Mulder told the committee that this bill
would go along way to ensure the security of the future of
Delta Junction and providing for a healthy re-use of the
facility and an expansion of the economy in Delta Junction.
Margaret Pugh, Commissioner, Department of Corrections was
invited to join the committee. She introduced Margot Knuth,
Assistant Attorney General, Department of Law. Ms. Knuth
said that creation of beds would not solve the overcrowding
in Alaska. (Further tape malfunction.) She noted that the
Bethel jail had been grossly overcrowded for years and that
in general, overcrowding in Alaska was at an intolerable
level. She drew the committee's attention to several other
proposals that could be considered regarding the
overcrowding issues, such as expansion of the Palmer
facility and ownership of the facility at Delta Junction.
She noted that the re-use proposal would be helpful to Delta
Junction. However, with reference to the expansion of the
Palmer facility, there would be little to no transportation
costs to keep the inmates in-State. However, all issues
must be clarified including the cost effectiveness of the
facility in Delta Junction and if services could be provided
reasonably elsewhere in the State. She explained a small
technical issue with the title of the bill. In response to
a question from Senator Adams regarding BRAC law she said
she could not explain it but would contact Department of
Community and Regional Affairs for him.
Senator Donley asked about the title change. Ms. Knuth said
it was necessary because Delta Junction was a second class
borough and Fort Greely was outside the city boundary. With
regards to sections two and three of the bill extra
territorial powers applied and if not included in the title
it would create a technical problem. Senator Donley said he
did not see any existing conflict, however. Ms. Knuth said
that a second-class city did not have the power to house
criminals, and therefore without the title change the
sections would not be effective.
(Tape #82, Side A switched to Side B at approximately 11:40
a.m.)
Senator Donley felt it was inclusive in the title where it
was provided in the title where it said "...enter into
agreements to lease facilities for the confinement and
care...". This could give notice they were included and was
all that was required. Ms. Knuth further stated that if the
title were amended it would probably avoid litigation at
some further point. This was a preventative suggestion.
Co-chair Sharp said he could only continue the hearing on
this matter until noon and did want to hear from the Delta
contingent that had travelled to Juneau to give testimony.
Further hearings on this bill could not be before 27 March.
In response to Senator Donley, Co-chair Sharp said the bill
would not be moved today. Co-chair Pearce had several
questions she wanted to ask and he wanted to give everyone a
chance to testify on this bill who wanted to. After short
discussion with Senator Donley regarding rescheduling of
this matter, Co-chair Sharp said he would try to work it in
earlier, including Saturday or Sunday hearings. He then
invited the Delta contingent to join the committee.
Glen Wright, Mayor of Delta Junction testified before the
committee. He said this bill would help the community help
itself by bringing about three hundred jobs and allowing a
quality of life for the area.
Doris Fales, Delta Junction Coalition testified before the
committee. She said this bill would help create jobs. She
said the Coalition had worked with the community in order to
promote economic growth.
Ray Woodruff, Executive Director, Delta Junction Coalition
testified before the committee. He told the committee that
turning the post into a prison was one of the first and only
major proposals received. Letters were written to
approximately 118 Federal and State agencies asking for any
interest in Ft. Greely. No interest or answer was received
from them. The Army also went through the same procedure,
receiving no interest. The community had an interest,
however and brought the matter to a vote. He said the vote
on this proposal brought out the most voters in two years.
The majority of the community supported the bill.
Co. Dave Anderson, Post Commander, Ft. Greely testified
before the committee. He described the BRAC process and
realignment program as currently planned for the committee.
He noted that the Army had supported the community of Delta
Junction and its re-use efforts. These efforts included the
surplusing of approximately 1-1/2 million square feet of
facilities on the installation and 18 hundred acres
property. The Army would retain all training areas and
ranges for continuing training and testing missions in
Alaska as used by the Army and Air Force throughout the
year. The approved realignment plan was to reduce fifty
percent of employees in FY 2000 and fifty percent in FY
2001. Re-use of the facility would negate all requirements
for demolition of the property currently programmed at
approximately $48 million. He voiced his concern with the
process, including taking care of the employees of Ft.
Greely during the transition.
Senator Phillips asked about the city election in mid-
January. Mr. Woodruff said the election was conducted as
close to a complete election as possible. It was an opinion
poll and no one was turned away who was a registered voter
or had registered to vote. This was conducted on an area-
wide basis rather than just the City. Senator Phillips
asked if it was a special election. Mr. Woodruff indicated
that it was not an official, special election.
Senator Adams asked for an explanation of the BRAC law. It
was his understanding the Governor set up the coalition to
finding re-use of the facility. He also asked for an
explanation on the conveyance organization agreement which
had to take place and asked where it was in the process with
the Governor.
Mr. Woodruff said a letter had been provided the Governor
requesting the final stages of the process be implemented
through the LRA. It has not been responded to as of yet and
the Department of Community and Regional Affairs has been
contacted. He noted for the committee that this was a
change in the way the Federal government did business. It
only went into effect last year, and they became aware of it
sometime in December last year.
Senator Adams asked that if there is no signature on the
conveyance what would happen? Colonel Anderson said he did
not fully understand the question. Senator Adams further
explained that due to costs, what would happen if the
Governor did not sign the conveyance. Colonel Anderson said
the local Re-use Authority had been recognized by both the
Governor and the Federal government. Ft. Greely reservation
qualifies for rural economic development conveyance with no
cost to a community. He felt this was the main drive since
the property could be obtained at no cost by the local Re-
use Authority.
Senator Torgerson asked if this was for a particular plan.
His understanding was that Delta would take ownership of the
facility. Colonel Anderson concurred. Senator Torgerson
voiced further concern that the Governor may not sign the
conveyance if he found that prison beds could be supplied
cheaper at another location. Colonel Anderson said if that
happened the facility would be open for bid again or
demolition.
In further response to Senator Torgerson's question
regarding an agreement, Mr. Wright explained that the only
agreement made was between the Re-use Authority and all
this. The City does not enter into any agreement until the
bill is passed and the Governor signs it. The City will
work with the Department of Corrections. Senator Torgerson
said it was his understanding there were provisions in the
bill that said it should be competitively bid, however, it
looked like that had been ignored and an agreement signed
anyway. Mr. Woodruff explained the lease document that was
worked out. This was in order to get started on the lease
request. There was no intention to shortcut any provision
of AS 36.30. He said even by pushing everything hard it
would take approximately fourteen months to complete the
project. Therefore, a lease document was signed. However
it would not be valid if the Legislature did not pass the
bill, the Governor did not sign it, if the Department of
Corrections refused to get a contract with Delta Junction,
or if Delta Junction did not get their proper contract the
lease would then be invalid. He said ample exclusionary
clauses had been included also.
Co-chair Sharp thanked the Delta contingent and continued
the taking of testimony.
J. Frank Prewitt, President and Chief Executive Officer of
Allvest, Inc. was invited to join the committee. He
explained the site photography and site plan for the
committee. He said that the reutilization of Fort Greely
was good public policy in terms of returning dollars to the
State of Alaska and helping out Delta Junction. He noted
that the Greely proposal was the best in the past eight
years. He said the issue of centralization and
regionalization was not an either-or proposition. Each
State needs long-term felon sentence beds that have
sufficient economies of scale to accommodate those offenders
through the period of their incarceration. Jail space is
also needed. Therefore, use of the Greely proposal would
alleviate overcrowding in a cost-effective fashion. He felt
the argument was a philosophical disagreement between
privatization and a government delivery of correctional
services. The private sector has filled in to accommodate
the void left by the government's inability to respond
quickly enough to overcrowding concerns or by the cost of
government delivery of correctional services, which in some
states such as Alaska is extreme. Many alternatives to
incarceration have been explored. As an example he said
that during the Hickel administration the Department of
Corrections did nothing more than sort through their
offender population moving low-risk offenders out into less
costly alternative facilities, such as halfway houses and
treatment programs. He felt this was a correct process as
these low-risk offenders needed to be moved out of long-
term, costly hard beds. He referred to the Bethel facility
and said alternatives were available to the overcrowding at
that facility. Further, he said that they believed the
Greely proposal provided relief in a cost-effective fashion
and said both the debt service and the operating cost of the
facility on a daily bed rate would be under $70/day/inmate
as compared to the State's present costs. Services at
Greely were also anticipated to meet the highest standards
of the industry, both structurally, operating and hiring and
training standards. The direct impact of the Greely
proposal would be relief in the present prison population.
There would be no loss of State jobs, an augmentation of
correctional services, State-operated facilities to be safer
because over-crowding would be relieved, cost containment
for the Department of Corrections and economic development
for Delta Junction.
Mr. Chilters, Delta Junction was invited to join the
committee. He referred to an aerial photograph which was
passed out to committee members only of the Ft. Greely site.
He noted that the facility must meet all ACA, ADA and codes
for re-use. He explained the reutilization of the existing
facility included revitalization of the facility's
infrastructure, security, access for the handicapped,
medical, secured entrances and it's relationship with the
community.
Mr. LaResche, Delta Junction was invited to join the
committee. He explained to the committee how the contract
would work and how it complied traditionally with states
using this method. He said it was a fairly simple chain of
contracts and financing whereby the State would contract
with the City of Delta Junction to provide prison beds, the
facilities and operations for twenty years. Then, Delta
Junction would contract with the lessee/owner of the
facilities to provide the capital facilities themselves. He
said that this lessee/owner policy and procurement process
went out with competitive solicitation. Allvest won the
procurement process. The facility owner who would be
leasing the facility to the City renovates the buildings for
use as a prison and finances the whole thing with private
financing. At this point, he noted that the State was used
to financing and owning things with State money, i.e. the
Anchorage facility. In this case, however, financing and
security would be for Allvest. If Allvest were to default
on the bond or the prison to fall or not meet its criteria,
the State would not be liable for paying for it. Delta
Junction, again, would contract with someone else to operate
the facility. As stated in the bill, the Department of
Corrections may require that Delta Junction use a process
similar to the procurement code to pick the private
operator. He believed this process was simple and highly
effective and would allow the State to procure complete
services for under $70. For the record, Mr. LaResche noted
that the State previously had three years to respond to an
RFP in order to own the facility and they showed no interest
whatsoever.
Co-chair Sharp thanked the testifiers for appearing before
the committee.
Senator Donley notified the co-chair that he could cancel
his 4:30 p.m. meeting on the Aleyeska Central School so the
Senate Finance Committee could meet earlier on this matter.
He noted the Anchorage Chief of Police and others from out
of town were present and wanted to testify.
Co-chair Sharp said it would be a possibility for those who
were in town. However, the committee could not get
teleconference participation for those out of town. Also,
the co-chair and Senator Torgerson had a Senate Resources
Committee meeting from 3:30 p.m. to 5:00 p.m.
There proceeded discussion amongst committee members as to
possible times to continue the hearing to.
(Tape #81, Side B switched to Tape #82, Side A.)
Co-chair Sharp said the committee would further consider a
possible time for continuation of this matter and he would
make an announcement from the Senate Floor. He appreciated
the offers from Senator Donley and also from Senator
Phillips who is vice-chair and could run the meeting,
however, the committee room and teleconference were not
available. He said advised those on teleconference and
present at the meeting he would get word back as soon as
possible as to when this bill would be rescheduled for
public hearing to include public testimony.
ADJOURNMENT
Co-chair Sharp adjourned the committee at approximately
12:40 p.m. until tomorrow at 10:00 a.m.
SFC-98 -21- 3/18/98
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