Legislature(1997 - 1998)

02/03/1998 01:40 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE                                                        
February 3, 1998                                                               
1:40 P.M.                                                                      
TAPE HFC 98 - 14, Side 1.                                                      
TAPE HFC 98 - 14, Side 2.                                                      
TAPE HFC 98 - 15, Side 1.                                                      
TAPE HFC 98 - 15, Side 2.                                                      
TAPE HFC 98 - 16, Side 1.                                                      
CALL TO ORDER                                                                  
Co-Chair Therriault called the House Finance Committee                         
meeting to order at 1:40 P.M.                                                  
Co-Chair Hanley   Representative Kelly                                         
Co-Chair Therriault   Representative Kohring                                   
Representative J. Davies  Representative Grussendorf                           
Representative G. Davis  Representative Moses                                  
Representative Foster  Representative Mulder                                   
Representative Martin was not present for the meeting.                         
ALSO PRESENT                                                                   
Jeff Logan, Staff, Representative Joe Green; James Baldwin,                    
Assistant Attorney General, Civil Division, Department of                      
Law; Bill Parker, Deputy Commissioner, Department of                           
Corrections; Jim Carlstrom, President, Delta/Greely                            
Community Coalition, Delta Junction; Glen E. Wright, Mayor,                    
City of Delta Junction; Frank Pruitt, President, ALLVEST                       
Corporation, Anchorage; Robert LeResche, Private Financing                     
Counsel, ALLVEST Corporation, Juneau; Thomas Livingston,                       
Architect, Livingston & Sloan, Anchorage; Ed Schitler, BJSS                    
Architects, Corrections Architect, Olympia, Washington;                        
Janet Michaelson, Security Consultant, ALLVEST Corporation,                    
Anchorage; Leslie Kirk, Delta Junction; Gary Damron, Public                    
Safety Employee Association (PSEA), Eagle River.                               
(TESTIFIED VIA TELECONFERENCE)                                                 
Hugh Doogan; Frank Gold                                                        
Delta Junction                                                                 
Art Griswold; Michael McCowan; Donna Garden; Devin Kelly;                      
David Wright; Bill Johnson; Shellie Matthew's; Patrick                         
Schlichting; Patrick Dalton; Robert Bradley; Daniel Lucas;                     
Dan Beck; Dave Anderson; Loretta Schooley; San Dighton.                        
HB 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.                                                   
 HB 53 was HELD in Committee for further                                       
HJR 36 Proposing amendments to the Constitution of the                         
State of Alaska relating to redistricting of the                               
legislature, and repealing as obsolete language                                
in the article setting out the apportionment                                   
schedule used to elect the members of the first                                
state legislature.                                                             
  HJR 36 was HELD in Committee for further                                     
HOUSE JOINT RESOLUTION NO. 36                                                  
Proposing amendments to the Constitution of the State                          
of Alaska relating to redistricting of the                                     
legislature, and repealing as obsolete language in the                         
article setting out the apportionment schedule used to                         
elect the members of the first state legislature.                              
JEFF LOGAN, STAFF, REPRESENTATIVE JOE GREEN, explained that                    
HJR 36 proposes to amend Article 6 and Article 14 of the                       
Alaska Constitution.                                                           
Article 6 addresses legislative reapportionment.  Mr. Logan                    
proposed changes to reflect rulings by the U.S. and Alaska                     
Supreme Courts, and to enshrine single member legislative                      
districts in the constitution.  The U.S. Supreme Court                         
rulings, Baker v. Carr, 396 U.S. 267, issued in 1962, and                      
Renolds v. Sims, 377 U.S. 567, issued in 1964, established                     
the so-called "one person, one vote" apportionment rule.                       
The result of these decisions is that all state legislative                    
bodies in the United States are apportioned on the basis of                    
population.  The Alaska Constitution, as originally                            
written, bases senate districts partly on population, and                      
partly on geography.  The Alaska Supreme Court rulings,                        
Wade v. Nolan, Alaska 414 P.2nd 689, in 1966, Egan v.                          
Hammond, Alaska, 502 p.2nd 856, in 1972, and Groh v. Egan,                     
Alaska 526 P.2d 863, 1974 establishes an equal basis for                       
both civilian and military population.                                         
He continued, Section 4 of HJR 36 would establish single                       
member legislative (House) districts.  The change                              
essentially "constitutionalizes" the status quo.  Single                       
member districts have proven to work well here in Alaska,                      
and in a number of other states.  Along with Alaska,                           
several other states have shifted from multi, to single                        
member districts.                                                              
Finally, Section 9 of HJR 36 repeals Article 14 of the                         
Alaska Constitution.  Article 14 sets out the original                         
reapportionment schedule, which is now obsolete.                               
Co-Chair Therriault explained that through a court case, a                     
determination was made that the census does account for                        
establishing the redistricting base population.  A resident                    
population is based on the census count and redistricting                      
is based on the population resident count.                                     
Co-Chair Therriault asked clarification of language used on                    
Page 1, Line 8, "Within each election".  Mr. Logan noted                       
that language was drafted to delineate between House and                       
Senate districts.  Co-Chair Hanley pointed out that                            
language was clarified in Section 4.                                           
Representative J. Davies asked if the census would count                       
people staying in hotel rooms.  He pointed out such action                     
could drastically affect places with a lot of tourism                          
traffic.  Representative Grussendorf indicated his concern                     
regarding the proliferation of constitutional amendments                       
coming before the Committee.  He stated that the proposed                      
legislation was not needed.  Representative Mulder                             
disagreed, pointing to problems with double member                             
districts.  He suggested that the legislation would clarify                    
the Alaska State Constitution and would eliminate                              
ambiguity.  Representative J. Davies pointed out that the                      
State, to date, does not have multi member's districts and                     
that there has been no problem.  He echoed concern with                        
need for the legislation.                                                      
Co-Chair Therriault stated that if members agree with the                      
single member concept, the proposed legislation would                          
guarantee it be available from this point forward.  Mr.                        
Logan pointed out that in 1972, the U.S. Supreme Court did                     
specify the single member preference.  In that federal                         
judiciary, if a reapportionment plan were written, there                       
would be preference for single member districts. There is a                    
state movement toward this practice.  The sponsor's intent                     
is to keep a reapportionment plan out of court.                                
Representative Grussendorf advised that every plan,                            
regardless, would need to come before the U.S. Department                      
of Justice.                                                                    
Co-Chair Therriault questioned Section 9 and the Articles                      
proposed for deletion.  Mr. Logan responded that Section 7                     
is obsolete resulting from a ruling by the U.S. Supreme                        
Court.  Section 5 addresses deviation between districts.                       
In 1987, the Supreme Court ruled that deviation up to 14.8%                    
would be permissible.  The drafter recommended that this                       
section be deleted.  Article 14 refers to the first                            
reapportionment, which is currently obsolete.                                  
Representative John Davies noted concern with deleting the                     
proposed sections.  He felt that those provisions had been                     
included to address unusual and rapid changes in                               
population.  He recommended amending the provisions rather                     
than deleting them.  Co-Chair Therriault believed that when                    
a census is taken every ten years that would be frequent                       
enough to address rapid growth concerns.                                       
DEPARTMENT OF LAW, commented on the proposed changes                           
contained in the resolution.  He advised that HJR 36 would                     
make substantial shifts from the way that things have been                     
done in the past, which will affect various regions within                     
the State.                                                                     
He understood that the intent proposed in the House                            
Judiciary Committee reference to Page 2, Line 7, was to                        
establish a provision that would prevent military voter                        
surveys, and would then determine what portion of those                        
were not residents and not participating in the electoral                      
process.  There would exist a system to address the non                        
participating military voters and their dependants.  He                        
believed that the legislation had become confused with that                    
which was put forth by Representative Green's staff and the                    
intent achieved in the previous committee hearing.                             
In the last reapportionment case, the Court stipulated that                    
the board had justified not using military surveys as a                        
part of the 1990 reapportionment, but that they had an                         
obligation to go through the exercise of establishing that.                    
The intent of the previous committee was to remove that                        
obligation.  Mr. Baldwin proposed that in today's                              
realignment situation, there could exist an imbalance in                       
certain districts based on the number of non-resident                          
military voters that are counted in the population base in                     
the census.  The Legislature needs to take great care in                       
documenting intention when making these changes with the                       
understanding of legal consequences.                                           
He contended that, military voter's register to vote                           
because they want the Permanent Fund Dividend (PFD).  Mr.                      
Baldwin added, in the House Judiciary Committee, there was                     
language added to make the Senate district lines                               
contiguous.  Concern exists with this measure because some                     
districts are not contiguous lines but rather there are                        
bodies of water between them.  The Courts have recommended                     
that the standards of contiguousness are not so rigorous                       
that they must apply to Senate districts, an act, which                        
would create geographic problems within the State.  This                       
application can create serious districting problems in the                     
future and could mean a loss of a Senate seat for State                        
rural areas. That situation would create retrogression.                        
Mr. Baldwin stressed that the Finance Committee must                           
establish a strong defense record so when put to the test,                     
it will be workable to the Justice Department.  A feasible                     
record has not yet been established.                                           
Representative Grussendorf pointed out that the committee                      
substitute version creates twenty (20) Senate districts and                    
then divides them into two (2) House districts.  He                            
believed such action would create problems, and recommended                    
starting with House districts creating an economic                             
compactness, he felt would work more smoothly.                                 
Co-Chair Hanley stated that the way the current                                
constitution reads indicates that "reapportionment shall be                    
based upon civilian population with any election district                      
as reported by the census".  If the previous committee                         
intended to remove "civilian", we would be left with the                       
current constitutional language.                                               
Mr. Baldwin understood that the intent of the House                            
Judiciary Committee was to remove the ability to perform                       
the non-military surveys.  He suggested that the intent be                     
clarified and the correct meaning established.                                 
Co-Chair Hanley felt that including the word "resident"                        
would open up a constitutional bag of worms.  A survey                         
administered only on military bases and not including those                    
people who are not residents, and then trying to apply the                     
same types of restrictions to the rest of the population                       
becomes problematic. A census is what has been used in the                     
past.  Mr. Baldwin advised that concern had been addressed                     
in a Supreme Court case, at which time it was decided that                     
the State had a compelling interest to focus on the                            
military population.  Other populations tend to be more                        
migratory, not staying as long as the military.                                
Co-Chair Hanley reiterated that adding the word "resident"                     
creates a host of problems and that he would support                           
deleting that word.  Mr. Baldwin stated that it was not the                    
intention to exclude the non-resident military voters.  He                     
commented that if that was no longer possible, the                             
Department then would not have the concern.                                    
Co-Chair Therriault asked for further information regarding                    
the version submitted to the Finance Committee and that it                     
reflect action taken in the House Judiciary Committee.                         
HJR 36 was HELD in Committee for further consideration.                        
(Tape Change HFC 98- 14, Side 2).                                              
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 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."                           
Representative Mulder introduced the bill, noting that                         
prisons in Alaska are all overcrowded.  He acknowledged                        
that he had been approached by the Mayor of Delta Junction                     
in hopes of turning Fort Greely into a private prison                          
facility.  The City is under pressure to create a plan for                     
that facility by March 15th.                                                   
Representative J. Davies questioned why a bill would be                        
required to accomplish this intent.  Representative Mulder                     
responded that the statutes don't clearly stipulate whether                    
or not the legislation would be needed.  Hence, should the                     
Department of Corrections undertake such a contract, he                        
believed the State would be taken to Court.  Representative                    
J. Davies read from the current statute AS 33.30.031: "If                      
the Commissioner determines that suitable state correction                     
facilities are not available, the Commissioner may enter                       
into an agreement with a public or private agency to                           
provide necessary services."  He stressed that current                         
language is broad and straightforward, which could address                     
the recommended need.                                                          
Co-Chair Therriault advised that the language currently                        
before the Committee was permissive and that there would be                    
discussion on whether "may" should be replaced by "shall".                     
Additional language could be used to instruct the                              
Administration in a particular direction.                                      
GLEN E. WRIGHT, MAYOR, CITY OF DELTA JUNCTION, stated that                     
in 1994, the downsizing of Ft. Greely, created a stressful                     
economic situation in that area.  At that time, the                            
community formed Delta/Greely Community Coalition.  With                       
the Governor's help, the Coalition became the entity                           
responsible for implementing a plan for Ft. Greely.                            
DELTA JUNCTION, stated that the coalition consisted of                         
twelve members from the community.  The work of the                            
coalition was to determine a replacement alternative for                       
Ft. Greely.  Until a proposal was received from ALLVEST,                       
there was no viable option to fill the bill.  Mr. Carlstrom                    
commented that the City Council, the school district and                       
most organizations in the community supported the proposal.                    
The plan was presented before the community in two                             
different scheduled events to educate them.  When the vote                     
occurred, 62% voted for the measure, recommending ALLVEST                      
continue forward.  He stressed that by March 15th, the reuse                   
plan must be submitted.                                                        
Representative J. Davies asked if the City of Delta                            
Junction has the authority to operate such a facility.                         
Mayor Wright replied that the City will be a "go-between"                      
the Department of Corrections and ALLVEST Corporation.  He                     
understood that the city of Delta Junction would have a                        
contract with ALLVEST and with the State Of Alaska.                            
Representative J. Davies asked if the city had police                          
powers.  Mayor Wright said that there was no need.                             
Representative J. Davies understood that those powers would                    
be required by ordinance because Ft. Greely is located five                    
miles from the city limits.                                                    
Co-Chair Therriault questioned the community's basic                           
understanding of the issues proposed.  Mr. Carlstrom stated                    
that open meetings for the community had taken place on                        
December 16th, January 8th and January 15th.  An election was                  
held on January 17th.  The initial letter of intent was                        
received from ALLVEST in December.  He felt that as a                          
coalition, the information had been dispersed efficiently                      
and the community was well informed.                                           
ARMY, MATSU, noted that in the redesigning of the military                     
base, economic resources can be made available to                              
facilitate recovery.  This option has been provided to the                     
Delta/Greely Community Coalition.  The Army is committed to                    
support the community in whatever reuse they determine                         
beneficial for that area.    There will be an impact based                     
on the current proposal, as realignment would begin one                        
year early.  He suggested such action would impact the                         
civilian employees.                                                            
Representative Mulder asked if the federal employees                           
supported the plan.  Lt. Col. Anderson replied that the                        
Federal Employees Union at Ft. Greely has endorsed a plan                      
to undertake realignment in the year 2000.  There are                          
concerns that it is now scheduled one year early.                              
Representative Mulder asked if $48 million dollars to clean                    
up the facility would be sufficient.  Lt. Col. Anderson                        
replied that currently, the program would cost $48 million                     
dollars for demolition of those facilities that the Army                       
will not retain.  There are 1.7 million square feet of                         
facilities; the Army will retain about 250 thousand square                     
feet of those facilities.  In the current proposal, almost                     
900 thousand square feet will be reused.                                       
against the proposed legislation.  He stressed that a                          
misunderstanding currently exists.   The Coalition consists                    
of a selective group of people who were chosen because of                      
their support of the proposal. Mayor Wright represents only                    
20% of the people in the Delta Junction area.                                  
Mr. Kirk advised that correspondence had been made with                        
three universities to consider the use of Ft Greely.  He                       
continued the "public" meetings referenced by the previous                     
speaker were not public participation meetings but instead                     
presentations by ALLVEST.  He noted that questions were                        
asked how the plan would be able to use the people of Delta                    
Junction.  ALLVEST was not able to give any guarantees for                     
those concerns.                                                                
Mr. Kirk continued, the vote taken was not legal.  In order                    
to have a legal vote, it must be noticed at least a twenty                     
(20) days prior the vote.  He reiterated that the vote was                     
not legal.  People were allowed to register to vote when                       
they showed up to vote.  According to Alaska law, there                        
must be a thirty-day waiting period after a person has                         
registered before they are allowed to vote.  The vote                          
allowed absentee and fax balloting which was done                              
Mr. Kirk advised that if the ALLVEST proposal is not                           
accepted and there is not another proposition available                        
immediately, Ft. Greely will not be demolished right away.                     
The facilities would then be placed into the private sector                    
to bid for fair market value.  He believed that the complex                    
would be sold.                                                                 
(Tape Change HFC 98- 15, Side 1).                                              
Mr. Kirk reiterated that the City of Delta Junction is in                      
an uproar regarding this legislation.  ALLVEST provided the                    
Coalition a contract to be signed without reading the                          
document.  In that document, all building contents will be                     
given to ALLVEST; all the private property would be leased                     
to ALLVEST for $10 dollars a year and after 5 years they                       
would then own the equipment.  Mr. Kirk again stressed that                    
the people of Delta Junction want to have a legal vote                         
within the required time frame.  Mr. Kirk concluded                            
reiterating that there are three universities contemplating                    
use of the facilities.  He noted that the post was                             
perfectly geared for use as a college.   There has been a                      
proposition that it be used as a special junior college for                    
Native Alaskans as a step between the village and                              
noted that ALLVEST made the initial proposal to the local                      
reuse authority.  He advised that the proposal would return                    
dollars to Alaska since the State currently sends prisoners                    
out to Arizona.  He emphasized that the facility would be a                    
very good correctional facility.                                               
Alaska is unique in that we house both our misdemeanants                       
and long-term felons in the same facility.  There has not                      
been a comprehensive plan putting Alaska in that spot. This                    
has evolved, as we are a small state with remote criminal                      
justice infrastructures.  The issue is polarized between                       
having a centralized system and regional expansion.  Ft.                       
Greely would provide 800 long-term medium security beds for                    
incarceration of Alaskan offenders.  Space is needed in the                    
regional jails to accommodate this population.  He added                       
that he was not aware of any other state, which transferred                    
prisoners out.                                                                 
Currently, the Department of Corrections is operating over                     
emergency capacity with nearly 600 more prisoners than they                    
have legal beds.  When ALLVEST met at Ft. Greely, they                         
understood that the base was scheduled for realignment and                     
was going through a public process to find a developer to                      
provide the reutilization.  ALLVEST approached the                             
Coalition after most of their other ideas became                               
unfeasible.  ALLVEST encouraged the Coalition to educate                       
the public in placing a correctional facility in that area.                    
He added that ALLVEST is comfortable that Ft. Greely could                     
be turned into a secure facility.  Employees can be hired                      
and the facility can be built and operated at a competitive                    
price.  He recommended that the Legislature should                             
establish a "not to exceed figure" with the legislation.                       
ALLVEST proposes to augment the State of Alaska                                
correctional services through a private-public venture that                    
will provide high quality correctional services at a                           
competitive price.                                                             
Representative J. Davies reiterated his concern regarding                      
the need of the proposed statute.  Mr. Pruitt replied that                     
Bob LeResche would be better able to answer that query.                        
Title 33 was revised during the Hickel Administration to                       
enable private prisoner contracting out to Arizona.  Mr.                       
Pruitt believes that the Department of Corrections has the                     
authority and responsibility to private contract care of                       
stated that the proposal being offered is essentially an                       
18-acre site in the middle of Ft. Greely.  Over a dozen of                     
the current facilities would be renovated.  The concrete                       
frame construction would receive a 40% renovation.  There                      
exists over 320 units of housing to be utilized by staff at                    
the facility.  Capital costs associated with the process                       
are estimated to be $32 million dollars, amortized per bed                     
cost per day.  ALLVEST has invested over 1000 hours of                         
design time to date.  He concluded that the conversion of                      
Ft. Greely to a prison would be safe and also secure,                          
making economic sense.                                                         
ARCITECT, OLYMPIA, WASHINGTON, stated that his firm has                        
been in the practice of architecture for correction                            
facilities for over twenty-five years.  The proposed                           
facility is similar to one in Washington State, which his                      
firm has been upgrading for the last ten years. Initially,                     
the process creates a program to determine the needs of                        
everyone housed and working at the facility.  He emphasized                    
that the Ft. Greely facility would adhere well to the                          
proposed use.                                                                  
STATE, SECURITY CONSULTANT, ALLVEST, echoed that the                           
proposed plan is very viable.  It has all the elements in                      
place, both program and design. She thought that Ft. Greely                    
could be a first rate correctional operation, as the layout                    
lends itself well to the conversion.                                           
Representative Mulder asked if revenue bonds would be                          
needed to make the transition.                                                 
stated that there would be no cost to the State.  ALLVEST                      
would finance the $30 million dollar cost of the renovation                    
with private financing.  In order to do the financing at a                     
reasonable cost, it will be necessary to get the                               
Legislative permission.  Representative J. Davies asked if                     
a resolution from the Legislature would suffice.  Mr.                          
LeResche replied that a resolution would be worth "little                      
more than no action".  Bond market requires that the                           
statute specify "shall" rather than "may".                                     
Co-Chair Therriault reminded members that the State of                         
Alaska will not own the site.  Mr. LeResche agreed and                         
noted that everyone will take the risk; the bondholders                        
will assume security interest, although, and the greater                       
security interest will be held by a corporate guarantee.                       
The State will not be responsible for paying the rate if it                    
does not work.  Representative J. Davies commented that the                    
twenty-year lease would be subject to an annual                                
appropriation.  Mr. LeResche agreed.                                           
Representative G. Davis asked if the property title of Ft.                     
Greely would be transferred to the City of Delta Junction.                     
Mr. LeResche stated that the transfer of the property,                         
under the Federal Property Redevelopment Act, the federal                      
government would transfer the property to the local                            
redevelopment authority to help leverage economic                              
development in that area.  The City of Delta Junction would                    
be involved as the entity that contracts with the State to                     
provide both the facility and the operation.  Then the City                    
will contract ALLVEST to create the facility and execute                       
the operations.                                                                
TELECONFERENCE TESTIMONY WAS TAKEN:                                            
JUNCTION, testified in support of HB 53.  He thought that                      
citizens of Delta Junction had been given plenty of time to                    
vote and that they had been well educated surrounding the                      
issue.  He urged Committee members to move the bill from                       
(Tape Change HFC 98- 15, Side 2).                                              
SCHOOL TEACHER, DELTA JUNCTION, voiced support for the                         
proposed legislation.  He spoke against the "prison town"                      
syndrome and added that the ballot voting time frame had                       
been adequate.  Mr. McCowan urged Committee members to                         
support HB 53.                                                                 
FACULTY MEMBER, DELTA JUNCTION, encouraged the Legislature                     
to require the bid for the use of Ft. Greely to be placed                      
into a competitive bidding process to identify the best                        
value provider for professional services.  She voiced                          
concerned that ALLVEST has never operated a medium security                    
prison.  A competitive process would yield better value to                     
the State and the community.  Unless there are successful                      
negotiations with ALLVEST including the proper legal and                       
management approval, there will not be a contract.                             
voiced support for the proposed legislation.  He noted the                     
penalties that the State pays housing prisoners out of                         
Alaska due to overcrowding.  Privatization of the new                          
prison would be most beneficial and economical for the                         
State.  He addressed the loss of jobs happening in Delta                       
Junction due to the downsizing at Ft. Greely.  Mr. Kelly                       
urged Committee members to support passage of HB 53.                           
JUNCTION, acknowledged that drastic misinformation                             
disbursed about the ALLVEST proposal.  He pointed out that                     
a new facility would not be able to compete with the cost                      
of housing prisoners out of the State in Arizona.  He                          
agreed that a vote had been taken after two rushed meetings                    
at which the majority of the community were not present.                       
Many of the people who voted did so without being fully                        
educated regarding the issue.  ALLVEST has a questionable                      
JUNCTION, spoke against the proposed legislation.  He spoke                    
to the moral, legal and ethical questions regarding                            
privatizing prisons.  He foresaw the current proposal not                      
saving the taxpayer any money.  Mr. Johnson reiterated his                     
concern with the way that the process had been handled to                      
determine the best use of the Ft. Greely facility.                             
spoke against the proposed legislation.  He provided a                         
brief history of the Ft. Greely site noting that a nuclear                     
power plant had been built there and that it had been                          
closed in 1972.  He understood that there is nuclear waste                     
buried at Ft. Greely and capped with cement.  Buying this                      
piece of land would be a huge liability for the State of                       
Alaska and the people of Delta Junction.  He suggested that                    
putting a prison at Ft. Greely will take the U.S. Army "off                    
the hook".                                                                     
JUNCTION. voiced concern with the rapidity with which the                      
proposal was pushed on the people of Delta Junction.  She                      
urged the Committee to reconsider passage of the proposed                      
CIVILIAN EMPLOYEE, FT. GREELY, DELTA JUNCTION, spoke                           
against the proposed legislation, noting that the civilian                     
employees at Ft. Greely are not in support of any proposal                     
which expedites the Brag time line.  Mr. Schlichting also                      
challenged the proposed $48 million dollar cost associated                     
with demolition.  He requested a cost break down of that                       
figure.  Mr. Schlichting urged Committee members to proceed                    
with caution.                                                                  
JUNCTION, questioned if ALLVEST would transport prisoners                      
from other states to the new Alaska prison.  Co-Chair                          
Therriault advised that concern would be addressed in the                      
Mr. Dalton spoke against the voting procedure, which                           
occurred in Delta Junction concerning the use of Ft.                           
Greely.  He questioned if private prisons would be good for                    
the State Of Alaska.  Mr. Dalton warned that wherever there                    
is profit, there is a potential for corruption.  The                           
responsibility for criminal justice rests in the hands of                      
government, not the private sector.                                            
JUNCTION, stated that he initially voted yes for                               
privatization of the prison, although, now he agreed that a                    
revote should be taken in the community when they have been                    
adequately informed regarding the long-range plan.                             
JUNCTION, commented that the Commissioner of the Department                    
of Corrections has the responsibility to get the                               
competitive bidding process undertaken.  He questioned why                     
ALLVEST was requesting a 20-year lease rather than a trial                     
lease period.  He added that Delta Junction lacks the                          
infrastructure needed to sign a contract with any major                        
company.  He recommended that the Commissioner of DOC take                     
control of the situation.                                                      
DELTA SCHOOL DISTRICT, DELTA JUNCTION, voiced concern with                     
the quality of programs offered in the current school                          
system given the down-sizing at Ft. Greely.  All                               
possibilities being considered except that for the prison                      
will not keep the schools at their present status.  He                         
urged the Committee to pass the proposed legislation.                          
Co-Chair Therriault asked if the teacher's union had taken                     
a stance on the proposal.  Mr. Beck was not aware of action                    
NEWSPAPER EDITOR, DELTA JUNCTION, spoke in support of the                      
proposed legislation.  She commented that membership of the                    
Coalition adequately represented the Delta Junction                            
community and that the vote represented a fair and                             
widespread indication of the entire community.                                 
spoke against building a prison in Delta Junction as it                        
posed a possible threat to the children of that community.                     
He recommended that the facility be used for some sort of                      
tourist business or elderly care center.  He urged                             
Committee members not to make Delta Junction a "prison                         
noted that he disagreed that this proposal came before the                     
community of Delta Junction as it is proposed before the                       
Finance Committee.  He asked the reason for creating a                         
monopoly in one area.  If requirements are the same of                         
those for the Department of Correction (DOC) employees, the                    
proposal evades the State Employee Union and the salary                        
requirements.  It would permit a private agency to cut                         
costs without paying the appropriate wages.                                    
He asked why the State should support a profit agency over                     
a non-profit, if they are to have control over what is                         
occurring. This proposal creates that scenario. The State                      
would not have any control over the budget or the profit.                      
He stressed that Delta Junction should keep ownership of                       
Ft. Greely and lease the facility out.  Mr. Gold emphasized                    
that the facility should not be given away.  He concluded                      
testimony pointing out that there are many agencies                            
throughout the United States willing to undertake business                     
at Ft. Greely.                                                                 
EAGLE RIVER, suggested that it is time that the people of                      
the State Of Alaska look at the economics of what we                           
undertake as a State.  State dollars are getting fewer and                     
further between.  He spoke against privatization of prisons                    
quoting reports from East Coast private prisons.  Those                        
prisons have proven not to be cost effective, they                             
jeopardize public safety and do not treat their employees                      
well.  Prisoners in their care are not treated in the same                     
manner as those in State facilities with regard too                            
educational or rehabilitation programming.                                     
The Alaska Department of Corrections is the finest                             
correctional system in the United States.  There are                           
excellent programs in alcohol treatment, sex and drug                          
treatment, mental health treatment and in education.  All                      
of these programs are cost effective and reduce the repeat                     
offender populations that other states must contend with.                      
The State Of Alaska also has the safest system in the                          
United States.                                                                 
(Tape Change HFC 98- 16, Side 1).                                              
Mr. Damron reiterated, studies have determined that the                        
costs for a bed and meals per day would be 1% less than in                     
a private facility.  All factors considered, a public                          
facility is cheaper and safer.  Private facility interests                     
lay not in public safety but in profit margin.  One way                        
they cut costs is by cutting staff.                                            
Mr. Damron elaborated that Governor Knowles has released a                     
comprehensive plan to expand regional facilities.  He                          
agreed that costs would be expensive, as housing prisoners                     
is expensive.  DOC can do it cheaper than that of a private                    
firm.  He contended that the Department should be able to                      
bid on the facility.                                                           
Co-Chair Therriault asked if cost quotes had included the                      
debt reimbursement.  Mr. Damron replied that the debt load                     
of both facilities had been counted into the surveys.  The                     
overall savings of bed and meals will be 1%.  Co-Chair                         
Therriault asked if a private firm did open in Delta                           
Junction, would PSEA try to organize those workers.  Mr.                       
Damron noted most certainly.                                                   
Co-Chair Therriault requested the Department of Corrections                    
position on the proposed legislation.                                          
CORRECTIONS, responded that the Governor has proposed HB
368, legislation which is the Department's proposal to                         
expand; an expansion which does not include beds in Delta                      
Junction.  Co-Chair Therriault asked if HB 53 passed, what                     
would the Department recommend to the Governor.  Mr. Parker                    
stated that the Department would recommend that the best                       
use of State resources would not be to build those beds.                       
That undertaking would be more expensive at Delta Junction.                    
Mr. Parker noted that HB 53 highlights the need that the                       
State has to expand the system.  He pointed out that the                       
State is currently 1200 beds short and 500 beds over the                       
Court established cap.  The need clearly exists.  The                          
criteria the Department used to address the prison crisis                      
1. The facilities are safe.                                                    
2. The facilities meet the statewide comprehensive                             
3. The facilities employee the best correctional                               
4. The community named must want the prison.                                   
5. The facility will be cost effective.                                        
Ft. Greely does not meet two of those standards.  That                         
facility would not fit with the statewide plan and would                       
not be the most cost effective bed space.                                      
Representative Mulder asked if Mr. Parker would recommend                      
that the Governor veto the bill.  Mr. Parker noted that it                     
would not be his place to recommend a veto on any proposed                     
legislation.  It is safe to say that the Department has                        
considered other ways to expand and has chosen another                         
Representative Mulder asked what the Courts option would be                    
if the Legislature passed the bill and the Governor vetoed                     
it.  Mr. Parker agreed that would place all parties in a                       
In response to Representative Kelly, Mr. Parker stated that                    
the per diem cost for inmates is just over $100 per day                        
statewide.  Overcrowding makes the daily cost go down.                         
Representative Kelly asked if there were any facilities                        
that approached the per day cost in Arizona.  Mr. Parker                       
acknowledged that Arizona had the cheapest beds, although,                     
transportation and medical costs must be added to that                         
price.  Representative Mulder noted that with all costs                        
included, the daily price per bed in Arizona was $77                           
dollars.  Mr. Parker concluded, noting that the total                          
Governor's proposed budget would be $88 million dollars.                       
He emphasized that adding wings to an already existing                         
facility is cheaper than building a new facility.                              
Co-Chair Therriault pointed out that the attraction of the                     
proposal is that the facility would not be built from                          
scratch and that a structure already exists.                                   
HB 53 was HELD in Committee for further consideration.                         
The meeting adjourned at 4:40 p.m.                                             
H.F.C. 18 2/03/98                                                              

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