Legislature(1995 - 1996)
02/02/1996 01:00 PM House JUD
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE JUDICIARY STANDING COMMITTEE
February 2, 1996
1:00 P.M.
MEMBERS PRESENT
Representative Brian Porter, Chairman
Representative Joe Green, Vice Chairman
Representative Con Bunde
Representative Bettye Davis
Representative Cynthia Toohey
Representative David Finkelstein
MEMBERS ABSENT
Representative Al Vezey
COMMITTEE CALENDAR
HOUSE BILL 428
"An Act giving notice of and approving a lease-purchase agreement
for construction and operation of a correctional facility in the
Third Judicial District, and setting conditions and limitations on
the facility's construction and operation."
- CSHB 428(JUD) PASSED OUT OF COMMITTEE
HOUSE BILL 429
"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."
- HEARD AND HELD
HOUSE BILL 154
"An Act requiring the Department of Law to provide guidelines
regarding unconstitutional state and municipal takings of private
real property; relating to the taxation of private real property
taken unconstitutionally by state or municipal action; establishing
a time limit for bringing an action for an unconstitutional state
or municipal taking of private real property; and providing for an
effective date."
- SCHEDULED BUT NOT HEARD
PREVIOUS ACTION
BILL: HB 428
SHORT TITLE: LEASE-PURCHASE CORRECTIONAL
SPONSOR(S): FINANCE
JRN-DATE JRN-PG ACTION
01/17/96 2470 (H) READ THE FIRST TIME - REFERRAL(S)
01/17/96 2470 (H) JUDICIARY, FINANCE
01/26/96 (H) JUD AT 01:00 PM CAPITOL 120
01/26/96 (H) MINUTE(JUD)
01/31/96 (H) JUD AT 01:00 PM CAPITOL 120
02/02/96 (H) JUD AT 01:00 PM CAPITOL 120
BILL: HB 429
SHORT TITLE: CORRECTIONS: PRIVATE CONTRACT FACILITIES
SPONSOR(S): FINANCE
JRN-DATE JRN-PG ACTION
01/17/96 2470 (H) READ THE FIRST TIME - REFERRAL(S)
01/17/96 2471 (H) JUDICIARY, FINANCE
01/26/96 (H) JUD AT 01:00 PM CAPITOL 120
01/26/96 (H) MINUTE(JUD)
01/31/96 (H) JUD AT 01:00 PM CAPITOL 120
02/02/96 (H) JUD AT 01:00 PM CAPITOL 120
WITNESS REGISTER
JERRY SHRINER, Special Assistant
to Commissioner
Department of Corrections
240 Main Street, Suite 700
Juneau, Alaska 99801
Telephone: (907) 465-4646
POSITION STATEMENT: Provided information on CSHB 428(JUD)
RUSS KINNEY, Deputy Commissioner
Treasury Division, Department of Revenue
P.O. Box 110400
11th Floor State Office Building
Juneau, Alaska 99801
Telephone: (907) 465-4880
POSITION STATEMENT: Provided information on CSHB 428(JUD)
RITA ANDERSON
P.O. Box 1253
Nome, Alaska 99762
Telephone: (907) 443-2407
POSITION STATEMENT: Testified against CSHB 428(JUD)
JOAN BENNETT SCHRADER, State Vice President
Coalition of Labor Union Women
P.O. Box 1587
Kenai, Alaska 99611
Telephone: (907) 283-4359
POSITION STATEMENT: Testified on CSHB 428(JUD)
GLEN SCHRADER
P.O. Box 1264
Kenai, Alaska 99611
Telephone: (907) 283-4359
POSITION STATEMENT: Testified on CSHB 428(JUD)
ROSS DUNFEE, Vice President of Engineering
Arctic Slope Consulting Group, Inc.
310 Arctic Slope Avenue
Anchorage, Alaska 99518
Telephone: (907) 267-6268
POSITION STATEMENT: Testified in support of CSHB 428(JUD)
DANIEL RAY
2550 Snow Shoe Lane
Wasilla, Alaska 99654
Telephone: (907) 376-6150
POSITION STATEMENT: Testified against CSHB 428(JUD)
RICHARD TAYLOR
3020 David Road, D42
Fairbanks, Alaska 99709
Telephone: (907) 479-6344
POSITION STATEMENT: Testified against CSHB 428(JUD)
KEN BROWN
Department of Corrections
10 Chugach Avenue
Kenai, Alaska 99611
Telephone: (907) 283-4359
POSITION STATEMENT: Testified against CSHB 428(JUD)
CHUCK O'CONNELL
9851 Basher Drive
Anchorage, Alaska 99507
Telephone: (907) 337-6452
POSITION STATEMENT: Testified against CSHB 428(JUD)
GARY DAMRON, Officer III
Hiland Mountain Correctional Center
AFSCME Local 52, AFL-CIO
1510 Spenard Road, Suite 201
Anchorage, Alaska 99503
Telephone: (907) 277-5200
POSITION STATEMENT: Testified against CSHB 428(JUD)
STEVE LARSEN
American Federation of State & County
Municipal Employees
707 Barrow Street
Anchorage, Alaska 99501
Telephone: (907) 277-5200
POSITION STATEMENT: Testified against CSHB 428(JUD)
ARNOLD VILLEGAS
1802 Mark Alan
Juneau, Alaska 99801
Telephone: (907) 780-6573
POSITION STATEMENT: Testified against CSHB 428(JUD)
BILL BONN
P.O. Box 32725
Juneau, Alaska 99801
Telephone: (907) 790-2665
POSITION STATEMENT: Testified about CSHB 428(JUD)
PAM LABEAU, President
Alaska State Chamber of Commerce
217 Second Street
Juneau, Alaska 99801
Telephone: (907) 586-2323
POSITION STATEMENT: Testified in support of CSHB 428(JUD)
BILL PARKER
HC 1 Box 1418
Soldotna, Alaska 99669
Telephone: (907) 262-7677
POSITION STATEMENT: Testified against CSHB 428(JUD)
DENNY DEWITT, Aide
REPRESENTATIVE MULDER
716 W. 4th Avenue, Suite 310
Anchorage, Alaska 99501-2133
Telephone: (907) 465-2647
POSITION STATEMENT: Testified in support of CSHB 428(JUD)
REPRESENTATIVE MULDER
Alaska State Legislature
State Capitol, Room 411
Juneau, Alaska 99801-1182
Telephone: (907) 465-2647
POSITION STATEMENT: Testified in support of CSHB 428(JUD) as
sponsor
ACTION NARRATIVE
TAPE 96-12, SIDE A
Number 000
CHAIRMAN BRIAN PORTER called the House Judiciary committee meeting
to order at 1:00 P.M. Members present at the call to order were
Representatives Bunde, Toohey and Davis. Representatives Green and
Finkelstein arrived at 1:05 P.M. Representative Vezey was absent.
HB 428 - LEASE-PURCHASE CORRECTIONAL FACILITY
HB 429 - CORRECTIONS: PRIVATE CONTRACT FACILITIES
CHAIRMAN PORTER offered that a there would be a public hearing for
CSHB 428(JUD) and with time permitting, a public hearing as well
for HB 154.
Number 232
JERRY SHRINER, Special Assistant to the Commissioner, Department of
Corrections, was the first witness to testify on CSHB 428(JUD). He
stated there were two aspects about the bill which the department
finds of considerable interest. This legislation provides a clear
recognition that additional prison beds are needed in the state.
The department agrees with this. He noted the Cleary Final
Settlement Act which dictates that the Department of Corrections
send prisoners out of state because of over-crowding in Alaska's
prisons. The second thing the department finds particularly
attractive is the notion of a lease purchase financing for this
prison bed space.
MR. SHRINER stated that the department does not believe that they
have a problem with impediments to contracting out goods and
services. He believed that the department had an enviable record
in this regard. They have an approximately $142 million budget and
over $30 million of this budget is contracted out for goods and
services. This is more than 25 percent of their budget for
everything from groceries to pens and pencils, prisoner space, etc.
Number 428
MR. SHRINER cited that the system includes 4,045 people in some
form of secured custody, from minimum to maximum security and in
half-way houses in the state. The majority of this population
includes confined misdemeanants, restitution placements (under
prison sentence but, allowed to work and pay restitution), or as
furloughs from prison, which means they are technically
incarcerated, but on furlough usually for community re-entry at the
end of their sentence. This total in private facilities is about
650 people, or roughly 16 percent of their population which is in
secured custody. About 450 of these individuals are in the state
in Community Residential Centers (CRC's) and halfway houses.
There's been no study done, but in discussions with other states,
they believe that 16 percent of the secured population is greater
than the national average. Almost all states have these types of
people in placements. The department feels as though they are
doing well in this regard and don't feel as though they have a
problem.
Number 560
MR. SHRINER outlined the department's concerns regarding specific
sections of the legislation. Firstly, he referred to page two,
line six of the CS, which adds the language, "including the
standards of custody, care, and discipline that are required by
order of a court." The department is concerned about this
additional required standard, for example, if a facility did not
meet either the Cleary Order or any unforeseeable order this
pending legislation would require that the department bring these
people out of certain facilities which would have been originally
chosen based on these particular prisoner's needs.
MR. SHRINER shored up this point by using the Arizona facility as
an example. If for some reason this prison did not meet Cleary
standards, presently this situation would be dealt with the court
and the department would argue their position. This is not a
statutory requirement and the department is concerned that this
pending legislation would give prisoners more standing to oppose
conditions that they weren't happy with or to demand immediate
redress than they currently have under the court order.
Number 719
MR. SHRINER then moved to page two, Sections (B) "may provide for
the detention and confinement of all persons held by the
commissioner under authority of state law, whether charged with or
convicted of felonies or misdemeanors, without regard to the
custody classifications for prisoners as determined by the
commissioner, unless the security of the facility is inconsistent
with those custody classifications; and (C) may not be
administratively restricted or limited by the commissioner to use
only for prisoners involved in certain rehabilitative or treatment
programs authorized by law."
MR. SHRINER stated that the department is concerned that these
sections would possibly conflict with sections of the already
existing Alaska Statute 33.30 and add an unreasonable burden on the
Commissioner of Corrections. The department asked the committee to
take a closer look at these sections.
Number 795
MR. SHRINER urged the requirement of feasibility studies and
comprehensive cost benefit analysis before a decision is made with
regard to privatizing a facility. He pointed out that these
studies might be required anyway under existing labor contracts.
Mr. Shriner pointed out that some states are satisfied with their
private facilities and others are not. The majority of states seem
to be in the middle. Before this type of privatization project is
undertaken in Alaska, feasibility studies should be undertaken
while being mindful of Alaska conditions, costs, and the needs in
Alaska. He stressed that these aspects are very important and ones
which the department would like to stress.
Number 893
MR. SHRINER referred to the section of the bill regarding the
construction of a facility up to 1,000 beds in the third judicial
district. The department's main concern is whether or not it is
necessary to place these beds all in one location, in one facility.
The department would like these beds spread around the state. The
one facility, one location concept would make it difficult for the
department to move populations. This would be especially true for
pre-trial and pre-sentence populations, in order to have them in
the right location, at the right time, without undue costs to
support systems, judicial transportation officers and to the
department.
Number 1013
MR. SHRINER referred to page three, line nine which states, "(1)
the total construction and related costs of establishing the
correctional facility may not exceed $100,000,00." His impression
regarding the intent of this section was to have both construction
and operation for this facility combined in one Request for
Proposal (RFP) contract. If this is the case, the department has
additional costs that are related to establishing standards,
assisting the Department of Administration, the department of
revenue, site selection and setting standards for the design of the
facility and in the on-going supervision of whatever private
contractor who might operate the facility. There will be
additional operating costs through the construction phase and on an
on-going basis after this facility is in operation. He wondered if
the additional costs which the department might accrue would also
be included in the related costs description outlined in this
legislation.
Number 1102
MR. SHRINER stated that the department had concerns about what
population will be held in this proposed facility. There seemed to
be some conflict with this issue. He referred to the section
dealing with changing contracting of rules and regulations which
seemed to indicate that this facility would hold all prisoners
committed to the custody and care of the department. Other
sections of the bill seemed to indicate that this facility would
hold only prisoners classified except for maximum security
prisoners. The department's definition of classified are those
individuals who have been sentenced and classified as medium,
close, etc. The definition outlined in the legislation would
preclude pre-trial and pre-sentence individuals from being held in
this facility. He wondered what the intent of this section was.
He specified further that the department was confused as to whether
or not this facility would accommodate female prisoners and male
prisoners other than maximum or whether it would take female and
male, but not maximum of either one.
Number 1247
MR. SHRINER referenced the section where it discusses under what
conditions the department could assume the operation of this
facility. Their question was, would the state be precluded from
operating this facility if it was found that the state could
operate it at less cost, and it would it preclude the state from
operating this facility if for some other reason it was found to be
in the best interest of the state, for example, treatment programs
of whatever issues might come up. The limits of precluding the
state from operating this facility is important.
MR. SHRINER stated that finally under Section 3, the department is
not clear about the reference to corrections employees being able
to operate as contractor for the construction and operation of the
facility. While the department does not have objection to this
possibility, the way in which it is worded seems to indicate that
current employees could also be the contractor and operator of the
facility. This is certainly not acceptable since this could allow
Mr. Shriner for example to be a special assistant, as well as a
stockholder and an operator of the facility.
Number 1371
REPRESENTATIVE CON BUNDE commented on an economy of scale concept
in light of bigger prisons being cheaper, he asked Mr. Shriner if
southcentral Alaska would be capable of filling a 1000 bed prison,
which would aid in not needing to move people around as much.
MR. SHRINER stated that not entirely. He added up the 200
prisoners in Arizona, plus the roughly 200 prisoners over the
operating capacity Statewide which makes 400 and an additional 100
or so people in the 6th Avenue jail, if that were to be closed,
totalling about 500 people. He made the point that any of these
individuals could be spread out to different locations in Alaska,
other than the 6th Avenue prisoners. He added that there is severe
over-crowding in Matsu pretrial. If that facility doesn't expand
for example, and these people were held in an Anchorage facility,
they still need to go to court in the Matsu Valley, which means
transporting them back and forth. Mr. Shriner summed up his
comments by noting that after accounting for these 500 individuals,
there would still be 500 beds left over to be filled in this 1000
bed facility. This additional bed space would still need to be
paid for. He suggested incremental increases to the system to
avoid paying for something that's not being used.
Number 1565
REPRESENTATIVE DAVID FINKELSTEIN asked what in the existing law
keeps the department from considering this legislation as an
option. Is the department able to carry out what's outlined in
this legislation if they chose to? Does the department have the
discretion to most of this?
MR. SHRINER thought there were no impediments to considering most
of what's in this bill. The department in trying to develop a plan
which would involve building a new facility, they would have to
consider whether those facilities should be privatized or not. The
department doesn't think they have any legal impediments to doing
this.
Number 1646
ROSS KINNEY, Deputy Commissioner, Department of Revenue, stated
that his testimony would center around the credit and financing
issues related to the issuance of $100 million of debt. In this
case, if a private developer plans to sell certificates of
participation or any other debt obligations associated with this
stream of state lease payment. The developer would probably want
to receive a rating for the proposed financing and the state
ultimately looses control over their representation before the
rating agencies since the developer doesn't require the state's
participation. This could create serious coordination and
representation problems for the state, particularly at this point
in time when they're dealing with a long-range financial plan for
the state of Alaska.
MR. KINNY stated that even though this debt would be financed
through a private developer, it would still appear on the state's
debt statement and would part of the state's debt load as computed
by the rating agencies. The manner in which the rating agencies
consider this debt is very important for the state. A private
developer interfacing with rating agencies without the benefit of
the state's participation could possibly result with adverse debt
ratio ramifications.
MR. KINNEY added that the most important feature which needs to be
considered is the maturity structure. The state bond committee is
currently in negotiations with the rating agencies regarding the
length of the state's maturity schedule. The rating agencies have
historically viewed negatively any debt structure of the state that
extended approximately beyond the year 2003. However, because of
the extension with the Prudoe Bay curve, the rating agencies now
indicate the possibility that they would be willing to extend this
curve to possibly 2015 without adverse affect on the state's
ratings.
MR. KINNEY asked the committee to consider that these negotiations
are very sensitive and the state needs to be the primary liaison
with any credit issues related to matters of this nature. He
pointed out that advances to securing the state's own financing,
include the ability to refinance at any time favorable market
conditions might provide savings. Also, it would eliminate the
need to un-bundle the lease purchase from the construction and
operating contracts should any problem arise due to non-performance
on the part of the contractor or default in lease payments.
Because of the state's high credit standing and institutional
structure for the issuance of debt, it was Mr. Kinney's opinion
that the state can sell lease purchase obligations more efficiently
and at a lower cost than a private contractor.
MR. KINNEY stressed that Office of Management and Budget (OMB) is
in the process of preparing a six year capitol needs assessment in
order to develop an overall financing plan to deal with these
(indisc.) He added that concerns could be raised by the rating
agencies and investors when a piece meal approach is taken to the
capitol financing without realizing how the whole puzzle fits
together. This comprehensive financing plan is needed in order to
resolve the fiscal gap and finance capitol moods in a financially
responsible manner.
Number 1803
CHAIRMAN PORTER asked Mr. Kinny if there was a way to construct a
lease purchase agreement so that the state's rating not be
affected, minimized or negated.
MR. KINNEY responded that it would be possible to include language
in an agreement which required the state's participation and
negotiation as it relates to debt issuance. He thought that the
state's (indisc.) involved in the process to insure that there was
a coordinated effort, not only in relation to this project, but to
other projects which are currently on the table is important.
Number 1803
CHAIRMAN PORTER asked if there was anything in this bill which
would preclude this.
MR. KINNEY said he didn't know if there was any language in this
present legislation which would precludes this, but he felt there
was no language which ensured that the state was in this loop.
CHAIRMAN PORTER asked that Mr. Kinney propose language which would
address his concerns.
Number 1900
RITA ANDERSON, testified by teleconference from Nome against CSHB
428(JUD). Ms. Anderson stated that she has given members of the
public tours of the facility in which she works in Nome. She
argued that an adequate amount of people to work as correctional
officers at reduced wages would not be feasible. She noted the
high turnover rate of officers in private facilities and the
increased incidents of violence, etc. of the prisoner population in
private facilities.
Number 2043
JOAN BENNETT SCHRADER, testified by teleconference from Kenai on
CSHB 428(JUD). She pointed out that this was an extremely
important bill and that their chapter had requested that a public
hearing regarding this legislation be held on the peninsula. The
Wildwood facility would be deeply affected by this. The chapter
did not take a position good or bad about this bill, but asked that
they receive more information.
Number 2215
CHAIRMAN PORTER stated that the CS before the committee makes no
substantive change to the bill, it only rearranges two sections so
that they are isolated.
REPRESENTATIVE CYNTHIA TOOHEY made a motion to adopt the CS before
the committee. Hearing no objection, it was so moved.
Number 2153
GLEN SCHRADER testified by teleconference from Kenai on CSHB
428(JUD). He noted the figures for this project. He felt as
though this legislation created duplication. Instead of building
a new facility, he felt it would be economically more sound to add
onto already existing facilities. He said he was totally against
the privatization of this facility. Mr. Schrader also had his
doubts about the requirements of this private facility to supply
adequate meals to the prisoners, etc. because the word "similar"
used is so vague. (It was not entirely clear as to what section of
the legislation he referenced.)
Number 2277
ROSS DUNFEE, Vice President of Engineering, Arctic Slope Consulting
Group, Inc. (ASCG) testified by teleconference from Anchorage to
indicate their support for HB 428 and HB 429. He felt this
legislation would help decrease prison over-crowding and provide an
important economic opportunity for the state. Mr. Dunfee also felt
that privatization of such a facility would help to ease the
financial pressure of the state to fund such a project. He noted
the long and short term job opportunities created by this
legislation.
Number 2376
DANIEL RAY testified by teleconference from Wasilla in opposition
to CSHB 428(JUD). Mr. Ray works for the Department of Corrections.
He cited the weak reputation of private prisons in the other
states. He also pointed out the reduced wages and no benefit
packages for private correction officers. Mr. Ray thought that the
Matsu Valley correction officers could be put out of work by this
privatization concept. He urged the committee to be careful in
their consideration of this legislation.
Number 2468
REPRESENTATIVE BUNDE said that it was his understanding that this
legislation would not jeopardize the employment of any existing
state employee prison guards.
CHAIRMAN PORTER answered that this was his understanding too.
TAPE 96-12, SIDE B
000
REPRESENTATIVE JOE GREEN asked about the references in testimony
about closing the 6th Avenue jail in Anchorage and asked if this
were true.
CHAIRMAN PORTER understood that the usefulness of this facility has
come and gone, the facility itself, not the people running it.
Number 038
RICHARD TAYLOR, testified by teleconference from Fairbanks against
the privatization of prisons. He works for the Fairbanks
Correctional Center. He noted the increase in contraband which
would result from privatization, among other things. Mr. Taylor
said that a professional core of officers is needed, something a
private facility could not provide.
Number 106
KEN BROWN, testified by teleconference from Kenai against
privatization of prisons. He has worked for the Department of
Corrections for more than 24 years. He has been a member of the
American Correctional Association since 1982 and is a certified
auditor for this same organization.
MR. BROWN noted that Alaska has one of the safest correctional
systems in the country. There has never been an officer or an
inmate killed in prison. The number of escapes is small compared
to other states, as well as prison violence. The few hostage
situations that have taken place ended without injury.
MR. BROWN said the Department of Corrections has developed a
professional work force. If the state builds a 1000 bed facility
and this turns out to be a mistake, it will be a mistake which
would be hard to correct. He noted that to institute the concept
of privatization would be a radical change. This should not be
taken lightly.
MR. BROWN pointed out that the state should consider what they
would do if they were required to take over the administration of
a private institution. He noted that a 1000 bed facility would
make up almost 30 percent of the already existing prison
population. He also questioned whether or not the state needed a
facility of this size. If the state was required to take over this
facility they would have a hard time mustering the required staff
numbers.
MR. BROWN noted that this facility would not accommodate maximum
security inmates, hence it would probably not be intended for pre-
trial inmates. He added that pre-trial space is sorely needed.
Mr. Brown also questioned the feasibility of the financial funding
of this project, which also called for the state to eventually buy
this facility. He suggested that the state ask the department what
they could do with this money instead and cited some studies which
had been done in years past that addressed these projects.
MR. BROWN also wondered why it wasn't a requirement of this
privatization system to come under budget of what it would take the
state to build the same facility. He said that if this were the
case, personnel costs would be cut first. He outlined what each
correctional officers pay levels presently are. Mr. Brown felt
that no correctional officer presently is overpaid.
Number 490
CHUCK O'CONNELL testified by teleconference from Anchorage against
privatization of prisons. He noted that he has been a labor
relations advocate for the past 23 years and said that he was
involved with the public employment act when it was passed in 1972.
During this time lots of consideration was given to public safety,
especially as it relates to people in 24 hour facilities. He added
that employees working at facilities now are restricted from
striking by law. He wondered how privatization would affect this
concept and believed that the workers at this slated facility could
be organized, but wouldn't come under the same statutes not to
strike which affect current employees now. If these employees were
able to strike, the liability would be unimaginable.
Number 645
OFFICER GARY DAMRON testified by teleconference from Anchorage
against the privatization of prisons.
"I am currently a Correctional Officer III at Hiland Mountain
Correctional Center. I am the shift supervisor there. I have ten
years with the Department of Corrections, and today I am here on
behalf of the 800 members of Alaska State Employee's Association
(ASEA), and nearly 75,000 Correctional Officers of American,
Federal State, county and Municipal Employees (AFSCME) in AFSCME
Corrections United.
If you will indulge me for a few minutes, I would like to give the
committee a brief history lesson on privatization in the
corrections arena. It has a long history of failure. And as
someone spoke on Wednesday, we either have to remember history or
we are doomed to repeat it.
In 1780 the Walnut Street Jail in Philadelphia was opened by the
Church of Pennsylvania. Then about 1810 it had to be taken over by
the city because of abuses against prisoners.
Louisiana was the first state in the mid-1800s to privatize a
prison. It is now known as Angola and, as you know, it is run by
the State of Louisiana.
New York's most prominent prisons, both Auburn and Sing-Sing were
once private facilities run by companies. In the late 1880s
private prisons were so popular, they were the norm, not the
exception. But around 1900, due to the abuse complaints from the
private sector, both business and labor, the states were forced to
accept responsibility from the private companies to manage and
operate these facilities. That's our history lesson; we know that.
We also know that we're thinking about doing it again.
Some of the things about privatization that I would like to point
out is (1) there is a very substantial conflict of interest for a
private company to run a public prison. The first is that the
state is charged by the Alaska Constitution with the reformation of
the offender and deterrence. The private companies want to keep
the cells full, to keep profits up. What incentive is there for
them to run quality rehabilitation programs? Well, there's not.
Because, if you reform, the offender, he or she becomes a
productive member of society and you lose your revenue. The other
thing is, rehabilitation programs are very expensive.
Another conflict of interest comes to disciplinary problems inside
of prisons. One of our best management tools that we have today is
the forfeiture of statutory good time. If I were running a private
prison and I thought I could take a few days or a few months away
from a prisoner and keep him in my jail, I would jump on it in a
heartbeat. It means more money.
I would like to talk to you a little bit, too, about the two
companies that seem to be at the forefront of Alaska's
privatization efforts, Wackenhut and Corrections Corporation of
America (CCA).
Wackenhut runs the Savannah River and Rock Flats Nuclear Test
Facilities. The employees there have been used to repress peaceful
demonstrations and gather intelligence, quote/unquote, on U.S.
citizens. And we all know about their reputation in Alaska.
Unlicensed investigators in Alaska were used to quiet Alyeska
Pipeline Service Company critics. They broke the law in three
states, and they even went so far to investigate a U.S.
Congressman.
CCA, on the other hand, while not doing this kind of activity, was
linked to possible corruption over its relationship to state and
local officials in its home state of Tennessee. A U.S. Attorney in
Nashville is currently investigating charges of a bribery kick-back
surrounding a $1 million contract to CCA to operate the
Southcentral Correctional Center in Pipeville, Tennessee."
OFFICER DAMRON summed up his comments by stating that privatization
was a public policy shift for the state of Alaska and privatization
is not in the interest of public safety. Officer Damron submitted
the remainder of his testimony in writing, which can be found in
the appropriate bill packet.
Number 840
STEVE LARSEN, AFSCME stated that he represented over 8,000 Alaska
state employees for the American Federation of State and County
Municipal Employees, including over 1000 correctional officers and
staff. He cited the high level of professionalism and skill
obtained by the Department of Correction employees, as well as a
strong level of public safety. He felt this legislation would not
ease overcrowding, first of all this a statewide problem. Adding
1000 beds in Anchorage is not only unnecessary, but does nothing to
deal with overcrowding around the state.
MR. LARSEN stated that privatization does not save money, it merely
shifts costs. Once a private company has set up a facility, the
state has no choice but to pay the asking price. They will
initially low-ball the project, then raise the numbers when the
costs are more accurately reflected as the project develops.
MR. LARSEN noted that there was only one area where a private
prison can save money. This area is employee wages and benefit, as
well as staffing levels. He added that employees determine how
successful a program is. He noted the low escape rates, low
employee turn over rates, and a zero corruption rate in Alaska
prisons. Mr. Larson asked the committee to consider expansion of
already existing facilities.
Number 1123
CHAIRMAN PORTER asked Mr. Larsen if his organization would have an
opportunity to bid on this project.
MR. LARSEN said he was not familiar with any mechanism which would
allow them to do this.
Number 1153
ARNOLD VILLEGAS, Correctional Officer, III, Department of
Corrections made the argument that prisoners have the right while
in incarceration to be safe. The privatization of prisons would
compromise this safety. He also noted the exemplary safety record
of the department.
Number 1252
BILL BONN, as a correctional officer, stated from the gallery that
he felt as though his concerns had already been addressed and made
himself available to answer any questions.
Number 1272
PAM LABEAU, President, Alaska State Chamber of Commerce thanked the
committee for the opportunity to testify. She stated that the
chamber represents approximately 700 business members statewide.
As the voice of business their mission is to create a climate in
the state which is conducive to a strong private sector. Ms.
LaBeau said she was present to support this legislation because it
represents a reasonable and logical action by state government
which will save money for the state, while at the same time enhance
business opportunities in the private sector.
MS. LABEAU stated that the top priority of the state chamber is to
help the state find ways to close the fiscal gap. A second
priority is to help the state finds ways to privatize those
government services that could affordably and efficiently be
provided by the private sector. This bill does so.
MS. LABEAU noted the Arizona private prison as an example, that the
private sector can provide for the confinement and care of
prisoners as satisfactorily and at a lesser cost than that
experienced within the Alaska system. The missing element within
a government operation is competition. The private sector must do
things more efficiently and at a lesser cost in order to be the
successful bidder among their competitors.
MS. LABEAU said that the chamber does not accept the thinking that
only government employees can do things well. It was private
individuals who made this country and set up the government. This
bill does require that the correctional officers would have the
same training as the government employees. Ms. LaBeau said they
felt the contract and lease purchase of a prison makes a great deal
of sense.
MS. LABEAU said in all the chamber sees no down side to this
legislation. It makes good business sense and they urged the
committee to support this bill. The chamber offered their
assistance to work through the elements of this legislation.
Number 1497
BILL PARKER testified by teleconference from Soldotna. He pointed
out that private prisons are in business to make money for the
shareholders. This takes money out of the state. He cited private
prison track records and problems some of these prisons had in
other states. Mr. Parker made the suggestion to expand on already
existing facilities.
Number 1782
REPRESENTATIVE MULDER as sponsor came to the table to respond to
some of the presented testimony. He thought it was ironic how the
concerns of the Department of Corrections never found their way to
his desk in order that he could respond to them or work out some of
the problems raised.
REPRESENTATIVE MULDER referenced the statutory court order as
expressed on page two, line six of the CS, which reads "including
the standards of custody, care and discipline that are required by
order of a court." REPRESENTATIVE MULDER pointed out that this
section refers to the Cleary Settlement, ensuring that this prison
meets this standard.
Number 1989
REPRESENTATIVE MULDER then referred to the language outlined on
page two, subsections (B) and (C) which Mr. Shriner thought could
conflict with existing statutes, but REPRESENTATIVE MULDER pointed
out that both these subsections begin with the word "may." These
are not requirements imposed upon the department, but allow the
department flexibility.
REPRESENTATIVE MULDER then referenced language on page three, line
nine and ten which reads, "the total construction and related costs
of establishing the correctional facility may not exceed
$100,000,000." REPRESENTATIVE MULDER felt as though this language
was clear and it provided security for the state, that the
construction and related costs would not exceed this amount. He
pointed out that if the words "related costs" were deleted the
state could be hit with charge backs. This total amount for
building this facility would include everything.
Number 1970
CHAIRMAN PORTER pointed out for clarification that this amount is
in relation to the successful bidder, not other attendant costs of
the Department of Corrections.
REPRESENTATIVE BETTYE DAVIS asked that if this related cost number
reflects construction costs, then there is a concern about what the
added cost to the department would be.
Number 2022
REPRESENTATIVE MULDER stated that he felt the added expenses were
already outlined in the fiscal note. The fiscal note is a part of
his frustration because he's not necessarily arguing about the
price, but it denotes that the department does not intend to do any
work on this project until FY 98.
REPRESENTATIVE MULDER then moved to the next concern as outlined by
the Department of Corrections. He referred to page three, line 19
which reads, "must be designed and constructed so as to house, in
separate housing, (A) female prisoners; and (B) male prisoners..."
REPRESENTATIVE MULDER said he didn't understand the confusion about
classified prisoners and where this came from. He suggested it
might be an attempt to confuse the issue.
Number 2140
CHAIRMAN PORTER asked for clarification whether this facility would
preclude pre-trial people from being housed there.
REPRESENTATIVE MULDER said he didn't believe that it did, male or
female pre-trial people would be housed at this facility. In
response to the department's concern about whether it was found to
be in the best interest that this legislation would somehow
preclude the state from operating this facility, REPRESENTATIVE
MULDER said that this assumption was absolutely, 100 percent right.
This legislation directs the private sector to build and operate
this facility. In regards to the concern about the facility being
built and operated by the same entity REPRESENTATIVE MULDER noted
an example of this which actually took place in Indianapolis.
REPRESENTATIVE MULDER said he was willing to accept the figure of
$77 per day, per prisoner at Lemon Creek. He noted that if this
were the case, this adds up to $2.9 million in savings. The true,
direct cost figure is $91.90 per day, per prisoner and if direct
and indirect costs are combined, this figure changes to $119.20 per
day, per prisoner at Lemon Creek. He noted a hand out as reference
to additional similar figures from around the state.
REPRESENTATIVE MULDER generally presented a figure of $106 per day,
per prisoner without referencing a particular facility. He noted
that if they were able to reduce by $1.00 per prisoner, per day, it
would result in a $1 million a year savings.
TAPE 96-13, SIDE A
Number 000
REPRESENTATIVE MULDER then cited present correctional officer's
salaries. He stated that public employees continue to suggest that
the private sector employees with the same training somehow can not
be as responsible as someone receiving a check from the state
government. He said that the integrity of the private sector has
been impugned here. After all, it's the profit that generates
taxes to pay public employee wages.
REPRESENTATIVE MULDER in response to testimony concerning insurance
of private facilities, he cited Wackenhut as a company that's
insured by AIG, the largest and one of the oldest in the world.
The former Commissioner, Roger Endell, disagrees with the concept
that existing facilities can be expanded. REPRESENTATIVE MULDER
quoted a section of a memorandum included in the committee packet
from Mr. Endell as follows:
"Unfortunately perhaps, the expansion of existing state
correctional centers would be a very expensive proposition. In
fact, most of the infrastructures of existing facilities will not
support expansion.
Simply adding on to existing correctional centers by adding a wing
here or there is neither wise from a correctional management
perspective, nor from an intrastructural perspective. Sewer,
heating, ventilation, food service, library, classroom, shop and
all other spaces have to be sized to handle expansion. For
example, the sewer treatment plant at the Hiland Mountain/Meadow
Creek complex near Eagle River is at maximum capacity; the Juneau,
Cook Inlet Pretrial (Anchorage), Hiland Mountain, Palmer and
Fairbanks correctional centers have already been previously
expanded, Juneau and Fairbanks a couple of times. Further
expansions at these sites will likely require totally new 'stand
alone' facilities in order to function safely."
REPRESENTATIVE MULDER pointed out that the concept of expanding
onto existing facilities is not viable. This option is expensive
and inefficient.
Number 265
REPRESENTATIVE FINKELSTEIN pointed out that these are complicated
decisions to be made, whether to add onto existing facilities or to
build an entirely new prison. He stressed that no matter what
option is chosen, it's going to be expensive. REPRESENTATIVE
FINKELSTEIN asked REPRESENTATIVE MULDER if he had reached the
conclusion that it's more efficient to build the facility as
outlined in the legislation.
REPRESENTATIVE MULDER answered that he found it to be far more
preferable to look for alternatives to the existing standard,
business as usual, within the Department of Corrections. He stated
he believed this legislation provided an alternative.
REPRESENTATIVE MULDER stressed that the state is under court order,
incurring fines in the range of $750,000. Every day the state of
Alaska is being fined by the court for being in violation with
Cleary.
REPRESENTATIVE FINKELSTEIN said that REPRESENTATIVE MULDER had not
responded to his question. He again asked REPRESENTATIVE MULDER if
he could assure him that he has some basis that this is a less
expensive alternative than expansion of one or two of the already
existing facilities. REPRESENTATIVE FINKELSTEIN asked how they
should decide as a committee that REPRESENTATIVE MULDER'S
suggestions have more basis than the professional managers hired
who happen to be heading in a different direction.
Number 485
REPRESENTATIVE MULDER challenged the Department of Corrections to
oppose this alternative by finding a cheaper proposal, but cited
that they have expressed no interest or desire to come up with a
long term, concrete plan and present it to the subcommittee.
Number 547
REPRESENTATIVE GREEN referred to the financing of the facility. He
wondered about the concept of the project not exceeding $2 million
and after doing the math he came up with the figure of $55 per
prison, per day to meet the pay out cost of the facility. This was
a concern to him since this would be almost equivalent to what the
state pays now for the prisoners in Arizona. This per day figure
would increase too, once the cost of the facility is factored in to
anywhere from $125 to $150.
DENNY DEWITT, Aide to REPRESENTATIVE MULDER spoke to these
concerns. He stated that when the numbers in the bill are used,
which are the top side numbers this would be true. It is their
judgment that the numbers put in the original legislation are high,
but they could be adjusted down through the legislative process.
If a full 1000 bed facility was constructed, which he said they
doubted would be the case, although there are numbers to persuade
them to suggest this would be appropriate, then the ability to
proceed with this legislation is economically viable. The
importance of noting that this a private sector proposal is that
this project is required to be economically viable in a private
sector setting. This is not an inhibition within the private
sector. Mr. Dewitt seriously doubted that a private sector
contractor would be required to meet a $55 rate debt service per
day, in addition to the operating costs of a facility.
Number 827
REPRESENTATIVE MULDER noted that a prison he visited in Texas
operated by Wackenhut was charging the state $35 per day, $28 per
diem, $7 debt retire. He pointed out that the real operative
question here is the lease purchase agreement. REPRESENTATIVE
MULDER said he was not necessarily wetted to a lease purchase.
This facility could stay in the private sector as a property tax
paying operation.
REPRESENTATIVE FINKELSTEIN asked REPRESENTATIVE MULDER if he would
be open to the idea of mending this approach, by amending the bill
language to say facility or facilities and broaden it beyond the
3rd judicial district.
REPRESENTATIVE MULDER stated that his direction is pointed towards
a facility that creates an efficiency of scale. He added that he
is sincere in reining in cost.
REPRESENTATIVE FINKELSTEIN stated with REPRESENTATIVE MULDER's
expanse of rhetoric aside, he pointed out that REPRESENTATIVE
MULDER had stated that one of the facilities was prone to
expansion, which could very well be a cheaper alternative. He
asked why REPRESENTATIVE MULDER would want to preclude this if his
goal is cost cutting.
Number 997
REPRESENTATIVE MULDER stated that he was looking for a change of
direction.
REPRESENTATIVE FINKELSTEIN responded that he was afraid that when
someone attempts to insert their own particular view points as if
that's the only wisdom that exists, this is a much bigger issue.
REPRESENTATIVE FINKELSTEIN said he missed the point when
REPRESENTATIVE MULDER outlined the correctional officer salaries.
He asked if there was a point behind this outline of salaries.
REPRESENTATIVE MULDER stated that he provided REPRESENTATIVE TOOHEY
with this information since she had asked for it.
Number 1074
REPRESENTATIVE DAVIS asked what the time line to this project would
be as versus a 1998 projection by the Department of Correction for
their alternative. She felt as though the project might not be
feasible absent any studies being undertaken to research this
facility as an alternative.
REPRESENTATIVE MULDER stated that the difference is that if this
bill was passed, they had been given an indication by contractors
that they could be up and running within 18 months. This would be
the same timetable that the department has said they would begin
looking at the problem and address it.
REPRESENTATIVE DAVIS responded that she understood the department
might be working on plans presently. She wondered if
REPRESENTATIVE MULDER had actually met with the department to
discuss their suggestions.
Number 1181
REPRESENTATIVE MULDER said their door is open. He stated that they
have bi-weekly finance subcommittee meetings and they talk to the
department several times a week. He said that if the department
has a plan, then they're all ears.
REPRESENTATIVE DAVIS noted that when she introduces bills the first
thing she does is meet with the affected department to make sure
they understand what it is she is trying to do and to get an idea
of what they need. She wanted to know if this is how
REPRESENTATIVE MULDER handled this bill.
REPRESENTATIVE MULDER noted for the record that the department was
involved with hearings this summer, even the Commissioner was
present and listened to the testimony. She and REPRESENTATIVE
MULDER spoke in length about these hearings. He put her on notice
about how he was going to proceed. This is not a new concept. He
also pointed out that he was not the prime sponsor on this bill,
but the finance committee. This legislation has been supported by
the majority of it's members.
Number 1278
REPRESENTATIVE DAVIS asked about copies of the minutes from these
finance subcommittee meeting.
REPRESENTATIVE MULDER pointed out that because this is a
subcommittee they were not appointed a secretary, but said there
were tapes available.
Number 1311
REPRESENTATIVE FINKELSTEIN noted that all the amendments to be
presented were drafted according to the previous CS. Before
outlining his first amendment REPRESENTATIVE FINKELSTEIN stated
that he does not disagree with the basic premise of this proposal,
more specifically that privatization must be considered. He also
felt as though the department was sincere on considering this.
This bill affects directly the issue of building a new facility or
adding on to already existing facilities.
REPRESENTATIVE FINKELSTEIN also pointed out the issue of location
of the new facility is very different issue than the privatization
issue. The size of the facility is also a consideration, as well
as the lease purchase versus private sector run facility. The
middle ground would be to ask the department to consider this
alternative, that the approach has been clearly laid out and a
credible case can be made. REPRESENTATIVE FINKELSTEIN thought this
legislation was a bit premature and rather than pushing it through
the system, they should first let the department come up with a
solution. If this solution is not satisfactory, then the
legislature can institute some of these concepts as options.
REPRESENTATIVE FINKELSTEIN then moved amendment number one which
would affect the language on page one, line one following "Act"
through page four, line 30. REPRESENTATIVE FINKELSTEIN proposed to
delete all this material language and insert the following:
"requiring the Department of Corrections to consider a lease-
purchase option for the construction and operation of a
correctional facility." The clause as rewritten would read as
follows:
"BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:
Section 1. The Department of Corrections shall consider a lease-
purchase option for the construction and operation of a new
correctional facility in order to relieve overcrowding of existing
correctional facilities."
Number 1506
REPRESENTATIVE BUNDE objected.
REPRESENTATIVE MULDER stated that this language littered the bill
and is akin to adding intent language in the budget. The
legislature is suppose to send a policy directive to the
administrative, which is what this bill is.
REPRESENTATIVE FINKELSTEIN agreed with this statement, but stated
this legislation is more than a policy directive as he's already
explained. He again stated that the issue is more about
privatization and the policy directive can be achieved by the
language proposed in this amendment. This legislation is a mandate
which will impact the entire correctional system in the state.
REPRESENTATIVE GREEN stated he was not sure that he followed the
amendment.
REPRESENTATIVE FINKELSTEIN responded that it was the title which is
amended in the first place. This language amended version (O) of
the CS instead of version (R).
Number 1810
CHAIRMAN PORTER recognized that the objection to this amendment
still stood. A roll call was taken. Representative Finkelstein
voted in favor of the amendment. Representatives Davis, Green,
Bunde, Toohey and Porter voted against the amendment. Amendment
number one failed.
Number 1831
REPRESENTATIVE FINKELSTEIN referenced amendment number two and said
that this language referred to existing statute which says, Alaska
will keep their prisoners in state. He felt as though this
language was consistent with the testimony given.
REPRESENTATIVE FINKELSTEIN's change was in regards to page two,
line nine to delete "or in another state" from this clause. The
language after this change would read as follows:
"CORRECTIONAL facilities provided through agreement with a public
agency for the detention and confinement of persons held under
authority of state law may be in this state."
Number 1871
REPRESENTATIVE TOOHEY objected to the motion to move amendment
number two.
REPRESENTATIVE MULDER pointed out that this amendment sought to
change the existing statute. This would preclude the department
from even considering alternatives.
CHAIRMAN PORTER said he would speak against the amendment. If this
legislation were to pass they would have a few years with the
Alaskan construction of an institution to determine whether this is
a viable option for Alaska or not. This is the intent of this
legislation, but not to take away other options.
Number 1974
REPRESENTATIVE FINKELSTEIN agreed with these comments, as well as
the sponsor. The reason why it was offered was because of the
testimony in support of this facility since that would allow Alaska
to bring prisoners back into the state. If the building of this
facility will effectuate this move, then it should be stated in
this legislation.
CHAIRMAN PORTER requested a roll call vote. Representatives Davis
and Finkelstein voted in favor of amendment number two.
Representatives Green, Toohey and Porter voted against amendment
number two. Amendment number two failed.
Number 2013
REPRESENTATIVE FINKELSTEIN stated that he might not need to offer
amendment number three if he was able to get some clarification.
He referred to language which dealt with maximum security prisoners
on page two, line 22, which seemed to contradict language in
another section which referenced classification of prisoners to be
determined by the commissioner. In the one section it seems that
prisoners will be housed without regard to the custody
classification and he was confused as to how these sections related
to each other.
MR. DEWITT responded that the section which REPRESENTATIVE
FINKELSTEIN proposed to amend is one that would generally allow the
commissioner with more clarity to place prisoners in private
facilities. The second section REPRESENTATIVE FINKELSTEIN
referenced would put a limitation on the Anchorage facility in
deference to the fact that services are already provided for in
Spring Creek. The first addresses some concern in the authorizing
statute, the other section is under codified law.
Number 2083
REPRESENTATIVE FINKELSTEIN said this explanation helped to explain
his concerns, but he was still unclear why there was a need to
establish policy that this new facility cannot house maximum
security prisoners, but other private facilities can.
MR. DEWITT responded that is was a judgment as to what they ought
to be doing in the construction of a new facility. The judgment
was that Spring Creek fully satisfies the needs today of maximum
security male prisoners and to duplicate this would not make any
sense.
Number 2145
REPRESENTATIVE FINKELSTEIN withdrew amendments number three and
number four. He then offered amendment number five.
REPRESENTATIVE FINKELSTEIN said this amendment deletes the
provision on page four, line 28, which reads, "(1) a no-strike and
no-slowdown pledge by the union or unions." He understood that
this only applied to construction and, in this context, he didn't
understand why they would want to insist on this no-strike issue.
REPRESENTATIVE MULDER said that REPRESENTATIVE FINKELSTEIN was
absolutely right to the extent that the no-strike provision is a
trade-off for the project labor agreement. If the carpenter's
union does not have a problem with this section, then why should
this language be stricken.
Number 2247
REPRESENTATIVE GREEN wanted to make sure that this did not conflict
with any antitrust laws.
REPRESENTATIVE FINKELSTEIN noted, for the record, that this is a
mandatory clause which tries to micro-manage the construction of
the facility. He pointed out that this ought to be a consideration
negotiated at a later time during the construction phase between
the department and the labor pool.
REPRESENTATIVE TOOHEY objected to the motion to move amendment
number five. A roll call vote was taken. Representatives
Finkelstein, Bunde and Davis voted in favor of the amendment.
Representatives Green, Toohey and Porter voted against the
amendment. Amendment number five failed.
Number 2328
REPRESENTATIVE FINKELSTEIN referred to amendment number six and
said that the change he proposed was located on page three, line 27
following the word, "except." He wished to delete the word,
"temporarily." This clause as amended would read, "(3) may not be
operated by the state except when..."
REPRESENTATIVE TOOHEY objected.
REPRESENTATIVE FINKELSTEIN understood this provision dealt with
those situations when the state would take over the operation of
this facility. He pointed out that the word "temporarily" was not
defined anywhere in the legislation. REPRESENTATIVE FINKELSTEIN
worried that if this term was not defined then this takeover could
last for an indefinite period of time.
REPRESENTATIVE MULDER added that temporarily meant that under
unforeseen circumstances, if the state was required to take over
the facility until they were able to put out an RFP and find a new
private contractor, the state would not permanently take over this
facility.
REPRESENTATIVE FINKELSTEIN pointed out that they agree on the
disagreement. This was his perception as well, there's no
definition of temporarily. This seems to be a relatively
meaningless term other than intent, which the sponsor just
described.
CHAIRMAN PORTER recognized that the objection still stood and
requested a roll call vote. A roll call vote was taken.
Representatives Green, Davis and Finkelstein voted in favor of the
amendment. Representatives Bunde, Toohey and Porter voted against
the amendment. Amendment number six failed.
TAPE 96-13, SIDE B
Number 000
REPRESENTATIVE FINKELSTEIN offered amendment number seven for
consideration by the committee. The proposed changes would take
place on page three, line 30, the word "or" would be deleted and on
page three, line 31, after the word "contractor" the word "or" and
"(C) the state is able to operate the correctional facility at less
cost than a third-party contractor," would be inserted. This
section would read in it's entirety as follows: "(A) the private
third-party contractor with whom the state has entered into an
agreement to operate defaults in performance under the contract and
state operation is reasonably necessary to ensure the facility's
continued operation; (B) the state is unable to contract with a
private third-party contractor; or (C) the state is able to operate
the correctional facility at less cost than a third-party
contractor."
REPRESENTATIVE FINKELSTEIN noted that these changes would allow the
Administration to regain control and under the circumstances that
when after all the obligations have been made and all the contracts
conditions met, if the state could operate this facility cheaper
than a third-party contractor, then they should be to take it over.
Number 023
REPRESENTATIVE MULDER pointed out that this would allow the
department to construct another state facility if it is so
determined that this was in their best interest. If in fact, it
was determined that a private contractor would not be used to build
this facility, the intent would require that the department come
back before the legislature to explain why and ask for the
legislature's permission to construct the facility.
REPRESENTATIVE BUNDE asked for clarification that if the state
could build a facility for less money, that the intent of this
legislation would allow them to do so.
REPRESENTATIVE MULDER responded that the legislature would
certainly want to review their numbers. He pointed out that the
proposed amendment would allow the department to build the facility
without further review from the legislature.
REPRESENTATIVE FINKELSTEIN thought that this noted section dealt
with when the state would take over the facility temporarily. This
section does not answer to the long-term goal of turning these
facilities over to private concerns. There may be circumstances
which occur where it's in the state's financial interest to operate
this facility for whatever reason. He noted that it's hard to
anticipate under what circumstances this would happen. This
language should not be construed as meaning to give authority to
build state facilities.
Number 105
CHAIRMAN PORTER cautioned that there was no way to determine what
is the less cost when assessing who should build or maintain this
facility. Would it be a portion of a total of the department's
costs. In this present legislation there is no attempt made to
define what the determination of costs would be. Although he
didn't disagree with the theory, CHAIRMAN PORTER wouldn't want the
people in this facility to think they wouldn't have a job because
the cost definition could not be agreed upon.
REPRESENTATIVE FINKELSTEIN pointed out that the problem remains
that someone will have to make these calculations. He questioned
whether or not the state would have any recourse available to
manage prisons in some circumstance not necessarily anticipated at
this time. What happens when the state is faced with taking over
a facility and this cost criteria has not been met.
REPRESENTATIVE MULDER stated that when this time comes that the
state can prove they can run it at a cheaper rate, then they can
come before the legislature to obtain a blessing.
REPRESENTATIVE FINKELSTEIN thought this process was analogous with
a court proceeding since so many entities, including the governor
have to agree upon these numbers.
Number 230
REPRESENTATIVE BUNDE asked if there were provisions to renegotiate
the contract.
MR. DEWITT answered that they received assistance from the Internal
Revenue regarding this issue and currently their regulations limit
contracts with operation of the facility to five years. It would
be a minimum of every five years, that re-negotiations would take
place. He explained in greater detail the provisions of this
renegotiation process.
REPRESENTATIVE FINKELSTEIN added that there may be situations where
negotiations are needed beyond and excluding this five year
interim.
CHAIRMAN PORTER asked for a roll call vote. Representatives Davis
and Finkelstein voted in favor of the amendment. Representatives
Green, Bunde, Toohey and Porter voted against the amendment.
Amendment number seven failed.
Number 405
REPRESENTATIVE FINKELSTEIN withdrew amendments eight and nine, but
offered amendment number ten.
REPRESENTATIVE TOOHEY objected to amendment number ten.
REPRESENTATIVE FINKELSTEIN outlined the location of this amendment
on page four, line 14, and it would require the deletion of "not
more stringent than" and insert instead the phrase, "equal to."
The amendment clause would then read, "Accreditation under this
subsection shall be under standards of accreditation applicable to
correctional facilities that are not more stringent than those
applicable to state correctional facilities operated by the
Department of Corrections."
REPRESENTATIVE FINKELSTEIN pointed out that this language addresses
the standards required of the organization who has jurisdiction
over the facility. He stressed that this standard should be at
least the same as what the state would be required to perform.
Number 486
MR. DEWITT suggested that were several ways to assure quality, one
would be through licensure or accreditation, or by a standard set
by the department through policy consideration. The intent of this
legislation makes the requirements to be met by a private
contractor no greater than those required by the state.
REPRESENTATIVE MULDER added that currently there are no facilities
in Alaska which are accredited, except a private halfway house
contractor.
REPRESENTATIVE FINKELSTEIN said he didn't argue with this intent,
but to say that they must be lower or can never exceed it, the
middle ground is approximately the same. He felt that this was
also the intent of some of the testimony heard on this issue.
It seems that if there is an accreditation standard on the public
facilities in general, this standard should apply to the private
facility as well. He pointed out that there is no bottom limit on
this scale. This was not what was represented to the committee as
the intent of this legislation.
Number 822
CHAIRMAN PORTER made reference to the fact that because the Alaskan
facilities are not accredited is not a negative reflection on these
institutions. There are other reasons why this accreditation has
not been done, mainly because it costs so much money for the
national accreditation organization to travel to Alaska.
REPRESENTATIVE GREEN offered that they could amend the language to
read "as stringent as those applicable to state..." He understood
REPRESENTATIVE FINKELSTEIN's concern about a zero qualification and
down grade.
REPRESENTATIVE FINKELSTEIN asked to amend this amendment with this
suggested language.
Number 890
REPRESENTATIVE MULDER pointed out that their legal counsel who
drafts these clauses does so for a living and had suggested this
wording with this discussion in mind. These were the words the
drafter came up with and REPRESENTATIVE MULDER felt as though he
would be remise if he didn't stay with this phrasing. Their
attorney felt as though this was the way it was best expressed.
REPRESENTATIVE FINKELSTEIN said these changes were straight forward
English. He questioned that the instructions to the bill drafter
could have been as detailed as to the context of the discussion
which just took place.
Number 1033
CHAIRMAN PORTER interpreted this language to ensure that there
won't be any unfair conditions placed on the private contractor.
He thought it was appropriate to set guidelines for these
standards.
REPRESENTATIVE GREEN felt as though this language stacked the deck
in favor of the private institution.
CHAIRMAN PORTER responded that the only way this could take place
is if the department agrees to it.
Number 1094
REPRESENTATIVE FINKELSTEIN noted that the private contractor
couldn't make artificially high standards because they already have
to be met by the state institutions. If the state institutions are
meeting them, then probably they are realistic. If no
accreditation is required, then there should be none for either, if
there is some level of accreditation, then they should be made the
same.
CHAIRMAN PORTER requested a roll call on amendment number ten.
Representatives Finkelstein, Green and Davis voted in favor of
amendment number ten. Representatives Bunde, Toohey and Porter
voted against amendment number ten. Amendment number ten failed.
Number 1172
REPRESENTATIVE TOOHEY made a motion to move CSHB 428(JUD), version
(R), out of the Judiciary Committee with the attached fiscal notes
and individuals recommendations. CHAIRMAN PORTER noted an
objection to this motion and requested a roll call vote.
Representatives Davis and Finkelstein voted against the motion.
Representatives Green, Bunde, Toohey and Porter voted in favor of
the motion. CSHB 428(JUD) was so moved from the committee.
ADJOURNMENT
CHAIRMAN PORTER adjourned the meeting at 4:00 p.m.
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