Legislature(2003 - 2004)
05/09/2004 11:13 AM House FIN
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
CS FOR SENATE BILL NO. 65(FIN) am
An Act relating to the qualifications of correctional
officers, parole officers, and probation officers;
authorizing the Department of Corrections to enter into
lease- purchase agreements with municipalities for new
or expanded public correctional facilities in the
Fairbanks North Star Borough, the Matanuska-Susitna
Borough, Bethel, the Municipality of Anchorage, and the
City of Seward; relating to the development and
financing of privately operated correctional facility
space and services; authorizing the Department of
Corrections to enter into a lease-purchase agreement
with the City of Whittier for the confinement and care
of prisoners in privately operated correctional
facility space if the state cannot provide the same
level of services required in state law or regulation
for the same or less cost; giving notice of and
approving, and authorizing the entry into and issuance
of certificates of participation for, the upgrade,
expansion, and replacement of certain jails in
Dillingham and Kodiak; and providing for an effective
date.
SENATOR LYDA GREEN, SPONSOR, explained that the State
suffers from overcrowding in statewide prison facilities and
that Alaska needs a responsible solution to address these
serious issues, which arise from the overcrowding,
deteriorating physical plants and anticipated growth in
prisoner populations. SB 65 is the resulting legislation
from numerous conversations, revealing a need for compromise
in order to pass a comprehensive, long-term correctional
facility plan that adequately addresses public safety. The
bill would:
· Ensure local involvement in the process and
guarantees open and fair competition;
· Creates a level playing field between the public and
private sectors; and
· Requires the use of the State procurement process, a
feasibility study, and approval of facility designs
by the Commissioner of the Department of
Corrections.
Senator Green believed that the end result would be
consistency in facility design and operation. The bill
additionally, allows the State of Alaska to bring prisoners
back from Arizona, directing that money into the State
economy.
Senator Green provided a sectional analysis of the bill.
Co-Chair Harris inquired if the fiscal note cost included
bringing prisoners back from Arizona. Senator Green
acknowledged that it did and requested her staff to address
the concern. She advised that the Department of Public
Safety would be transporting the prisoners across the State.
She added that there would be an increase as numbers
continue to rise with the current trend continuing.
Co-Chair Harris pointed out that the bill indicates a "cost
not to exceed" $14,600 dollars per year, per bed in the
Fairbanks and Mat-Su areas. He asked the current yearly
costs for incarcerating the Arizona prisoners.
TRACI CARPENTER, STAFF, SENATOR LYDA GREEN, stated that the
current total amount is $14.154 million dollars for out of
state contracts. Senator Green interjected that the
calculations could be "no more than" as included in the
note. The costs have been calculated over the past 15
years. Ms. Carpenter added that the language indicates 25
years, but for purposes of calculation, the fiscal note
allows for 15 years. Senator Green added that at the end of
the 15-year period, the bed space could not exceed $14.6
million dollars.
Co-Chair Harris understood that the bill would allow listed
communities such as Seward and Anchorage and a federal
issue, Bethel, Mat-Su, and Fairbanks North Star Borough to
agree to a bond based upon a State contact to house beds.
Senator Green clarified that it would not only house those
beds but also construct the facility.
Co-Chair Harris noted that the bill provided a maximum and
"not to exceed" capital costs of $135 thousand dollars for
urban areas and $155 thousand dollars in Bethel. Senator
Green affirmed that information.
Co-Chair Harris questioned Senator Green's intent for the
Whittier concern. Senator Green responded that following
passage of the bill, the City of Whittier could begin
discussions with the State about bonding and continuing
contract service costs with the State by housing the
prisoners with continued care. The bill requires that it be
an open and competitive process according to the State
procurement codes. She pointed out the need for the
feasibility study.
Co-Chair Harris asked if the feasibility study indicated
that private prison care would be cheaper, would there be
language included to indicate that other facilities should
contract out. Senator Green explained that the language
deals only with the Whittier concern. Co-Chair Harris asked
if there could be a "mandate" on the Department to contract
with the private sector when costs could be lowered.
Senator Green did not know.
Representative Hawker referenced the Whittier proposal
feasibility study, asking if it would be conducted
internally or by an independent third party. Senator Green
understood that there would be an independent contractor
hired.
Co-Chair Harris asked if the referenced facility was the
Sutton Prison. Senator Green affirmed it is.
Representative Chenault noted that the indicated annual
lease costs shows the facility at the Anchorage Correctional
Center @ $1.76 million dollars and the Spring Creek Center @
$1.76 million dollars. Ms. Carpenter explained that those
numbers are based on actual best estimates of anticipated
costs and are less than what is allocated in the bill.
Representative Croft asked about the competitive bidding
process and if the RFP determined that the feasibility was
competitively bid. Senator Green responded that an RFP or
bid provides a feasibility study, first and intended that
any statewide contractors would be allowed to bid.
Representative Croft questioned if they "all" would be
competitive. Senator Green replied that in the process, a
competitive bid is required and that the language mirrors
that.
Representative Croft agreed that it was covered under the
feasibility study, however, pointed out language on Page 4,
Lines 11-12, indicating that the Department of Corrections
would be required to agree with the City of Whittier. There
is already an agreement between the City of Whittier with
companies wanting the work. He did not see any discretion
that after the study was done, it would be cheaper to do
anything but a predefined contract. Senator Green noted
language on Page 4, Line 23. Representative Croft
questioned the effect with the City of Whittier for design,
construction and operations of a facility. Senator Green
explained that the intent was for those projects only to
come and the others would be "grandfathered" in.
Representative Hawker mentioned that there were people
present who could testify on the bidding process the city
went through.
Representative Chenault asked if other municipalities had
been required to follow the State Procurement Code. Senator
Green affirmed, because they would be dealing directly with
the State on the design and approval of the facilities.
Representative Chenault reiterated concerns with the annual
lease costs. He pointed out that Fairbanks indicates
maximum-security costs while others mention only minimum-
security costs. Ms. Carpenter stated that under the bill,
the annual total lease cost for the City of Seward would be
$2.1 million dollars, however, the estimate is $1.76 million
dollars. She noted there is leeway for errors.
Representative Hawker referenced commentary in the fiscal
analysis, indicating no consideration of an independent
facility in Whittier and asked what that meant. Senator
Green did not know and requested that someone from the
Department respond.
Representative Fate asked where the projected numbers for
the Anchorage expansion originated. Senator Green explained
that was a separate federal issue and that those funds would
expand the Anchorage facility for the housing of federal
prisoners. That money would only be an authorization by the
State for use. She added that Governor Murkowski has
indicated that Alaska needs a large, central location
facility to house prisoners who stay from a medium to long
period of time. There needs to be an expansion in Bethel,
as during the process, the State currently transfers from
the overcrowded Bethel facility to the one in Anchorage.
The Fairbanks facility also has needs for additional beds
also, which could be balanced out by a large South-central
facility, designed for long-term use. It currently, houses
those prisoners being sent to Arizona, creating a ripple
effect without enough statewide prison beds.
Representative Joule noted that he was happy to see that
some of the contract jails had been included, however,
pointed out that the bill does not indicate "contract"
concerns. Senator Green responded that at present time,
there is ongoing litigation to address that concern.
Co-Chair Harris inquired if the bill covers the rural hub
areas. Senator Green responded that all areas with the
greatest needs are covered. She added that local government
must agree to accept the process of advocating and
willingness to assume the bonding burden on that there are
many communities not interested in doing that. SB 65 is
designed as a lease/purchase; the State will own the
facility and the community will be involved in design,
construction, maintenance and use of it. In response to Co-
Chair Harris, Senator Green added that is the same with the
Whittier facility and that the State would ultimately own
it.
JODY SIMPSON, MEMBER, MAT SU BOROUGH ASSEMBLY, voiced
support for SB 65. She noted that the Mat-Su Assembly
adopted a resolution supporting the concept of establishing
State-operated prisons for the following reasons:
· Pressing need to reduce overcrowding in Alaska
prisons;
· Bringing home prisoners currently housed out of
State;
· Providing needed construction and year-round jobs;
and that
· Maintaining prisoners in-state, allows them to be
closer to their families and culture, enhancing
rehabilitation.
Representative Stoltze mentioned the Valley Hospital and
other new triads. He asked their ability to provide secure
beds. Ms. Simpson did not understand the connection between
the two facilities.
RAY GILLESPIE, LOBBYIST, MAT SU BOROUGH, explained that
there had been extensive discussions with Triad regarding
the need for bed security in the event that the prison is
built. It is understood that it would be provided by the
Valley Hospital.
MARC ANTRIM, COMMISSIONER, DEPARTMENT OF CORRECTIONS,
indicated that the Department and the Governor support SB
65, allowing the Department of Corrections to address
longstanding capacity issues. At any given time, the
Department is at 100% capacity with 750+ out of State
prisoners. SB 65 provides a vehicle for the Administration
to address these concerns. The bill has a bonding component
built into it, so that the State can only fund projects,
which will not negatively affect credit rating.
Representative Stoltze inquired about the status of the
Correction Corporation from Florence. Commissioner Antrim
responded that the Department currently has an RFP for out-
of-state contract beds and that the Corrections Corporation
of America is the contractor that the Department is
currently working with.
Representative Stoltze asked if the Department anticipates a
large savings during the next round of RFP's. Mr. Antrim
advised the Department is attempting to determine that
through negotiations.
JERRY BURNETT, DIRECTOR, ADMINISTRATIVE SERVICES DIVISION,
DEPARTMENT OF CORRECTIONS, noted "worse fear" scenarios. He
thought it would be surprising if future prices were lower.
The State is currently in active negotiations on price.
Representative Hawker spoke to concerns of the long-term,
down-range costs. No one has challenged the need for the
facilities but he questioned the long-term deferred
maintenance costs. He inquired if the option had been
considered for the City of Whittier to cover the debt for
operations of the facility. Mr. Burnett said there has been
no cost analysis of that issue and that without one, he
would not know the answer. Commissioner Antrim interjected
that in either case, the State will see costs associated
with the facility.
RICK HOHNBAUM, (TESTIFIED VIA TELECONFERENCE), CITY MANAGER,
CITY OF WHITTIER, reaffirmed Whittier's interest and desire
to establish a city-owned and contractually operated private
prison. The economic benefits would be significant for that
small community. The community and the City Council have
continually supported the project. He noted that he had
been encouraged by the City to make sure that every
opportunity was taken to guarantee success. He spoke of the
bidding process and the selection of the firm partnership,
providing:
· Economic benefit to the City of Whittier,
· Financial benefit of cost savings for a private
prison for the State, and
· Social benefit of housing prisoners in the same
State as family with cultural connections for the
long-term benefit of prisoners and families of
prisoners.
TAPE HFC 04 - 110, Side B
Mr. Hohnbaum offered to answer further questions of the
Committee.
DEE HUBBARD, CITIZEN ACTIVIST (TESTIFIED VIA
TELECONFERENCE), STERLING, noted that she supports SB 65 as
it came over from the Senate, especially the inclusion of
the training requirements. She pointed out Representative
Croft's Amendment #3, which would delete Section 5. She
questioned Representative Hawker's Amendment #1, to Line 9,
and asked about a feasibility study extending over a 25-year
period. Ms. Hubbard asked why the Office of Management and
Budget (OMB) had been selected instead of the Department of
Corrections and the Department of Administration to fulfill
the contract. Ms. Hubbard continued addressing concerns of
the amendments. (Copies of All Amendments on File).
Ms. Hubbard identified concerns regarding use for the State
procurement code. She recommended that an audit for
contract monitoring compliance be placed in statute. She
added that there should be a use of fines for non-payment
and a specific list of "powers and non powers" granted to
contractors.
Representative Stoltze recommended that the State
procurement officer address Ms. Hubbard's questions.
Representative Hawker MOVED to ADOPT Amendment #1, #23-
LS0392\NA.8, Luckhaupt, 5/8/04. (Copy on File). Co-Chair
Williams OBJECTED for discussions purposes.
Representative Hawker explained that Amendment #1 clarifies
the Whittier component:
· The first section, Page 4, Line 4, mirrors language
for authorization of other municipal facilities with
intent to relieve overcrowding for the statewide
correctional facilities.
· Page 4, Line 9, language clarifies that when the
contract is signed, there should be a cost analysis
study defined before the State moves forward. An
outside study would be mandated.
· Page 4, Line 10 specifies that the study shall be
contracted in an out-source basis.
· Page 4, Line 12, language defines what the
feasibility study should determine and that it be
completed by October 1, 2004. Representative Hawker
requested to amend that section by changing the date
to January 1, 2005. There being NO OBJECTION, the
date was changed.
· Page 4, Line 15, provides language to guarantee that
comparisons are equal.
Senator Green agreed to most of the amendment except for the
feasibility completion date. She admitted that there are
many steps that need to be addressed before the completion
date; not knowing when the request will move forward would
make that difficult.
Representative Hawker asked if it would relieve Senator
Green's concerns to add language that it be complete within
six months of the proposed receipt from the city. Senator
Green replied that if everything was complete by 2006 that
would be the end date. She did not know how long it would
take and requested that the Department address that.
Co-Chair Harris asked if there had been a required timeframe
for the feasibility study related to other facilities.
Senator Green stated that none had been required and that
the requirement did address contracts and labor force
development. A feasibility study would be required if the
intent were to use anything by the State labor force in
order to build a facility. A method for outsourcing and
privatization could be provided. Therefore, that would make
a feasibility study a requirement. She admitted that she
did not know time constraints associated on the feasibility
studies.
Co-Chair Williams recommended that each community establish
the date. Representative Hawker mentioned concern with
providing a date certain. If the Department of Corrections
had everything in place by a certain time, they would have
to enter into a lease agreement. He thought that there
needed to be protection for communities and that the
completion date or the date certain could be eliminated. He
stressed that the community deserves certainty that there is
a level playing field.
Senator Green replied that there is "no certainty" in any of
the bill. Any city or group that comes to the commissioner
and indicates that their city was willing to go into debt,
there still would be no assurance that they would be given
permission. She stressed that there was no intent in the
bill to provide assurance. The bill is permissive with in-
dates for private & other facilities around the State.
Co-Chair Williams asked Representative Hawker if it would be
okay to make the appropriate changes in that area of the
amendment. Representative Hawker requested that the
Department of Corrections testify regarding any change.
Recess: 12:25 P.M.
Reconvene: 12:40 P.M.
Representative Hawker MOVED to change Amendment #1 by
deleting language on Lines 14 & 15: "The feasibility study
shall be completed by October 1, 2004". Additionally, it
would need to include changing the date on Page 4, Line 5,
from July 1, 2006 to July 1, 2007. Representative Croft
OBJECTED for further clarification. Following the
Department providing that information, Representative Croft
WITHDREW his OBJECTION. There being NO further OBJECTION,
Amendment #1 as amended was adopted.
Representative Hawker MOVED to WITHDRAW Amendment #2, #23-
LS0392\N.A.10, Luckhaupt, 5/8/04. (Copy on File). He noted
that #2 would be replaced by Amendment #5. There being NO
OBJECTION, Amendment #2 was withdrawn.
Representative Croft MOVED to ADOPT Amendment #3. (Copy on
File). Co-Chair Williams OBJECTED.
Representative Croft explained the amendment. He emphasized
that the privatization of the prison system bill has been
around for many years. He recounted the numerous
communities who have attempted to get that proposal and how
devastating it was to each of them. Representative Croft
objected to the litany of "sole source projects". There has
never been a clean proposal presented to the Committee. The
proposals are always sole source, with heavy money deals
directed to one contractor. It is always prearranged and
never clean. He believed that the legislation would result
in sole sourcing being prearranged with political pressure
through construction and continued operations.
Representative Croft warned that the State would see someone
indicted and likely sent to prison over the proposed series.
He stressed that he "hates" this type of proposal because of
what it does to the integrity of the Legislature. He
disliked the "high money and motives money and the
legislators". These proposals historically have left a
trail of damaged communities. Representative Croft warned
that Whittier would regret it at some point.
Senator Green interjected that the amendment language would
return the legislation to the original bill. She pointed
out that the Whittier language had been added with great
deliberation. All the language is "futuristic" and will
result in a lease-purchase owned by the State. She
acknowledged it would be a policy call.
Representative Stoltze commented that Amendment #3 is
important and requested an analysis. He inquired if there
had been an overview of the contract between the City of
Whittier and that contracting group.
VERN JONES, CHIEF PROCUREMENT OFFICER, DEPARTMENT OF
ADMINISTRATION, indicated that the Department had not read
the contract, but had read the City of Whittier's RFP. The
procurement process for the City of Whittier did not comply
with the State's contract process. Whittier would be
subjected to their own ordinances. Without Amendment #3,
the bill requires the City of Whittier procurement process
to comply with the State's. He offered to provide
technicalities regarding negotiation costs.
Representative Hawker acknowledged that the bill could
resolve concerns raised by Representative Croft. He said he
opposed Amendment #3.
A roll call vote was taken on the motion.
IN FAVOR: Croft, Stoltze
OPPOSED: Fate, Foster, Hawker, Joule, Meyer, Moses,
Chenalut, Williams, Harris
The MOTION FAILED (2-9).
Representative Stoltze MOVED to ADOPT Amendment #4, #23-
LS0392\NA.4, Luckhaupt, 5/4/04. (Copy on File). Co-Chair
Williams OBJECTED.
Representative Stoltze advised that the sponsor submitted
the amendment in order to provide clean up language.
Senator Green said it was obvious that a provision,
addressing the qualification concerns of the correctional
officers, needed language for all the hard beds. The
amendment would add new language highlighting the intent.
Co-Chair Williams WITHDREW his OBJECTION. There being No
further OBJECTION, Amendment #4 was adopted.
Representative Hawker WITHDREW Amendment #5, #23-
LS0392\NA.11, Luckhaupt, 5/09/04. (Copy on File).
Representative Croft MOVED to ADOPT Amendment #6, #23-
LSO392,NA.6, Luckhaupt, 5/07/04. (Copy on File). Co-Chair
Williams OBJECTED.
Representative Croft explained that the amendment would add
a "small amount of competitive nature" to the proposal. He
reiterated his concerns regarding sole sourcing
"privatization", creating a combination for the worst
aspects of government and business.
Senator Green noted that she did not object to the
amendment. Co-Chair Williams WITHDREW his OBJECTION.
Representative Fate questioned the powers of the
Department's commissioner to select the facility site.
Representative Croft responded that language was included in
the section about the Whittier proposal and intended to be a
contemplated site. He stated that the key aspect was that
it be open for bid on a non-preferential basis and that it
was included in the authorization list with the City of
Whittier.
Representative Stoltze asked if the proposed amendment would
improve the Department's "comfort level with the process".
Mr. Jones responded that the language of the amendment
requires the competitive process and that made him more
comfortable.
TAPE HFC 04 - 111, Side A
Representative Hawker thought the bill delineated a "forward
looking process" and provides an alignment with State
statute. He added that the amendment serves no function.
Co-Chair Harris pointed out that the language of the
amendment provides a mandatory "shall". He commented that
the Department of Corrections commissioner had no business
selecting the site. The determination should be left to the
party given the proposal.
Representative Hawker advised that there is language in the
bill that the commissioner "shall" approve the design of the
facility.
Representative Stoltze maintained that the commissioner, the
Department and the State should have interest in the site
selection process. The placement of prisons and the manner
in which they interface with those communities is relevant.
The amendment would provide good benefit.
Co-Chair Harris took issue with the possibility of there
being opposition between the State and the public regarding
the chosen area. He believed that the language should not
be included, as the public should determine that policy.
A roll call vote was taken on the motion to adopt the
amendment.
IN FAVOR: Stoltze, Croft
OPPOSED: Fate, Foster, Hawker, Joule, Meyer, Moses,
Chenalut, Harris, Williams
The MOTION FAILED (2-9).
Representative Foster MOVED to report HCS CS SB 65 (FIN) out
of Committee with individual recommendations and with the
accompanying fiscal note.
Representative Croft OBJECTED.
Representative Croft referred to all previous statewide
lawsuits resulting from such a choice.
Co-Chair Harris objected to comments voiced by
Representative Croft. He claimed that the bill as currently
written makes it difficult for any Administration to move
forward. He added that most of the bill is good.
Representative Hawker agreed that the bill was good,
suggesting that most concerns had been thoughtfully
advocated throughout the bill.
A roll call vote was taken on the motion to move the bill
from Committee.
IN FAVOR: Foster, Hawker, Joule, Meyer, Stoltze,
Chenault, Fate, Williams, Harris
OPPOSED: Moses, Croft
The MOTION PASSED (9-2).
HCS CS SB 65 (FIN) was reported out of Committee with
"individual" recommendations and with fiscal note #2 by the
Department of Corrections.
| Document Name | Date/Time | Subjects |
|---|