Legislature(2003 - 2004)

02/20/2003 03:30 PM STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
             SB  65-CORRECTIONAL FACILITY EXPANSION                                                                         
CHAIR  TAYLOR  announced the  next  matter  of business  to  come                                                               
before the committee was SB 65  and noted a significant number of                                                               
people were waiting  to testify on the bill.  He informed members                                                               
that both the Departments of  Corrections (DOC) and Revenue (DOR)                                                               
prepared fiscal notes.                                                                                                          
SENATOR LYDA  GREEN, prime sponsor  of SB 65, gave  the following                                                               
introduction to SB 65:                                                                                                          
       The need for additional prison beds in Alaska has                                                                        
       been recognized by the Legislature for a number of                                                                       
     years.    Currently,  there   are  about  650  Alaskan                                                                     
     prisoners being held in  facilities outside of Alaska.                                                                     
     The money  that leaves Alaska  to pay for  the housing                                                                     
     of   these  prisoners   provides  jobs   and  economic                                                                     
     activity in Arizona instead of Alaska.                                                                                     
     Senate Bill 65  provides legislative authorization for                                                                     
     the expansion  of state prisons by  local governments.                                                                     
     Under the provisions of SB 65, local governments would                                                                     
     finance the construction of  new prison facilities and                                                                     
     additional beds  at facilities currently owned  by the                                                                     
     state.   The  State of  Alaska would  then enter  into                                                                     
     long-term leases and operate the facilities as part of                                                                     
     the   state   correctional  system.   This   financing                                                                     
     mechanism allows the state  to acquire facilities with                                                                     
     no upfront capital costs.   It benefits both the state                                                                     
     and local  economies with construction jobs  and long-                                                                     
     term jobs in the facilities.                                                                                               
     The  need  for additional  prison  beds  in Alaska  is                                                                     
     virtually  uncontested.    However,  the  location  of                                                                     
     facilities, the  method of financing  the construction                                                                     
     and  who will  operate  the new  facilities all  raise                                                                     
     issues.    In  1998, the  Legislature  authorized  the                                                                     
     construction of  a privately constructed  and operated                                                                     
     prison with a  minimum of 800 beds  in Delta Junction.                                                                     
     The prison  was not built.   In 2001,  the Legislature                                                                     
     passed HB  149, which  provided for construction  of a                                                                     
     minimum  of  800  private  prison beds  on  the  Kenai                                                                     
     Peninsula.    Again, the  prison  was  not built.    I                                                                     
     believe it is  time to go in a new  direction in order                                                                     
     to finally address this  chronic and increasing prison                                                                     
     bed space problem.                                                                                                         
     SB 65 provides a long-term solution to Alaska's prison                                                                     
     bed space problem. The proposed expansions to existing                                                                     
     facilities in Bethel, Fairbanks and Anchorage (federal                                                                     
     prisoner unit  expansion) will  provide relief  to the                                                                     
     most chronically  over-crowded regional hubs.  The new                                                                     
     1,200-bed  facility   will  provide  the   most  cost-                                                                     
     effective  in-state  solution   to  bringing  Alaska's                                                                     
     prisoners  home  from  Arizona, relieving  prison  bed                                                                     
     over-crowding issues in other regions of the state, as                                                                     
     well as providing additional bed space for the state's                                                                     
     projected prisoner population increases.                                                                                   
     I ask for your support and swift passage of SB 65.                                                                         
SENATOR GUESS noted letters of support from the Mat-Su area and                                                                 
asked where the communities of Anchorage, Fairbanks and Bethel                                                                  
stand on the legislation.                                                                                                       
SENATOR GREEN said information would  be forthcoming from Bethel.                                                               
She thought the issue is  still under discussion in the Fairbanks                                                               
community;  she  said  it is  her  understanding  that  Fairbanks                                                               
currently  supports  SB  65.  She   was  unable  to  say  whether                                                               
Anchorage would  be supporting  SB 65.  She explained  the prison                                                               
addition in Anchorage is different  in that it will house federal                                                               
prisoners  and  the  expansion  is  contingent  upon  receipt  of                                                               
federal money.                                                                                                                  
SENATOR HOFFMAN said  he spoke with the city  manager [of Bethel]                                                               
yesterday. He said correspondence from  the city in support of SB
65 would be forthcoming.                                                                                                        
SENATOR DYSON asked if the new  addition would be adjacent to the                                                               
existing facility in Sutton.                                                                                                    
SENATOR GREEN said that is correct.                                                                                             
SENATOR DYSON  asked if the  community of  Sutton is in  favor of                                                               
the expansion.                                                                                                                  
SENATOR  GREEN  told members  the  [Mat-Su]  Borough brought  the                                                               
proposal to  her. She said  she couldn't  answer yes or  no about                                                               
Sutton, as she  has not polled the community. She  added the road                                                               
that  leads back  into  the  prison is  inside  the community  of                                                               
Sutton. She estimated  the prison is two to three  miles from the                                                               
SENATOR DYSON  asked if the  expansion would take place  on state                                                               
owned land.                                                                                                                     
SENATOR GREEN said that is correct.                                                                                             
SENATOR DYSON noted  an earthquake fault zone runs  close to that                                                               
area and asked if it would present a problem.                                                                                   
SENATOR GREEN replied that earthquake  fault zones run throughout                                                               
all  of  Alaska  and  she  would assume  the  building  would  be                                                               
designed to be earthquake resistant.                                                                                            
CHAIR TAYLOR  asked if the  community would support  an identical                                                               
facility in the same spot if it were privately operated.                                                                        
SENATOR GREEN  said that  discussion occurred  about five  or six                                                               
years  ago when  a  former Senator  from  Kasilof recommended  an                                                               
experimental pilot project. She  recalled some opposition to that                                                               
project. She said she assumes the  answer is yes, but she was not                                                               
CHAIR TAYLOR  said it seems like  this issue always turns  into a                                                               
hotly debated  and emotional  issue in  every community  that has                                                               
addressed it.  He said the  debate doesn't seem to  have anything                                                               
to do  with the fact  that the project  is a prison  but instead,                                                               
whether the prison would be publicly or privately operated.                                                                     
SENATOR GREEN said  that is the only discussion  she could recall                                                               
since she's been involved and  there seemed to be some opposition                                                               
to it.                                                                                                                          
SENATOR  DYSON stated  that in  the two  previous iterations  the                                                               
Legislature has been through in  attempts to resolve the shortage                                                               
of prison space,  most people were primarily  concerned about the                                                               
number of prisoners  residing outside of the  state. For whatever                                                               
reason, Alaska Natives are  disproportionately represented in the                                                               
prison population,  so the Native community  activist groups have                                                               
enthusiastically supported  returning those prisoners  to Alaska.                                                               
He asked  if the local  Native community  in the Sutton  area has                                                               
expressed an interest in that location.                                                                                         
SENATOR GREEN said not to  her knowledge, but she thought members                                                               
would be pleased to see  the physical arrangement of the facility                                                               
proposed for  the Mat-Su  Borough because  it has  separate wings                                                               
that would  enable programs to  be tailored  to the needs  of the                                                               
inmate population.                                                                                                              
SENATOR DYSON  asked, "I assume,  if I may continue,  you haven't                                                               
heard from the Chickaloon people  and how they are really looking                                                               
forward to working with the facility?"                                                                                          
SENATOR GREEN said she has not.                                                                                                 
SENATOR  COWDERY  asked   if  Sutton  is  about   75  miles  from                                                               
SENATOR GREEN  said it is  about 20  miles from Palmer,  which is                                                               
about 42 miles from Anchorage.                                                                                                  
SENATOR COWDERY  said he  asked the  question because  during the                                                               
hearings  held on  building  a prison  in  Whittier, concern  was                                                               
expressed about  Whittier being too  far from  police protection,                                                               
hospitals, and other  services. He noted that  Whittier is closer                                                               
to Anchorage.                                                                                                                   
SENATOR GREEN felt one factor  that has evolved with the prisoner                                                               
and pre-trial  facility in Palmer  is that Palmer is  fairly well                                                               
adapted  and  ready to  serve  most  of  the  needs of  a  prison                                                               
expansion, whether those needs be supplies or hospital services.                                                                
CHAIR TAYLOR noted  Tom Boutin was available  to answer questions                                                               
on the fiscal note.                                                                                                             
MR.  TOM BOUTIN,  Department  of Revenue,  told  members that  he                                                               
prepared the analysis of the fiscal note.                                                                                       
CHAIR TAYLOR  asked if actual  title to the property  will remain                                                               
with  the municipality  that  builds the  prison  or whether  the                                                               
state would eventually own it.                                                                                                  
MR. BOUTIN said he would prefer  that question be directed to the                                                               
sponsor because,  from the way  the bill  was written, he  is not                                                               
sure.  He  said  he  presumed,  in  the  fiscal  note,  that  the                                                               
municipality  would own  the facility  at  the end  of the  lease                                                               
CHAIR TAYLOR said  the cost of building the  facility is actually                                                               
reflected  in the  lease to  the extent  that the  total cost  of                                                               
construction would be amortized over  the lease with some profit,                                                               
that profit being  the cost of the interest on  the bonds and the                                                               
handling of  those bonds. He said  he assumes the state  would be                                                               
responsible for maintenance of the facility as the lessee.                                                                      
MR.  BOUTIN   said  no   matter  who   owns  the   facility,  the                                                               
construction costs plus  the bond issuance costs  would equal the                                                               
net  present value  of the  lease payments  out to  the maturity.                                                               
That  is true  no matter  who the  owner will  be. Regarding  the                                                               
second question,  he said  he could  speak to  the debt,  but the                                                               
Department of  Corrections would have  to speak to  the operating                                                               
SENATOR  COWDERY asked  if any  federal funds  are available  for                                                               
this project.                                                                                                                   
MR.  BOUTIN said  he  does  not know  about  federal funding  and                                                               
deferred to the Department of Corrections.                                                                                      
CHAIR TAYLOR  asked if Mr.  Boutin could address  the fungibility                                                               
of  money, meaning  that  it  will cost  the  state  x number  of                                                               
dollars to  have the municipalities  finance this piece  of state                                                               
obligation. He noted  Mr. Boutin has estimated  $4.368 million as                                                               
the cost of issuing the bonds.                                                                                                  
MR. BOUTIN said that is correct and  the state has a lot of lease                                                               
debt, the  last being the  API building in Anchorage.  He pointed                                                               
out hardly  a year  goes by  in which the  state doesn't  have an                                                               
issue of  lease debt.  The issuance costs  are usually  about two                                                               
percent  of the  size. The  biggest portion  of the  cost is  the                                                               
underwriter.  The underwriter  might  charge as  much  as $8  per                                                               
bond,  the  bond  meaning  $1,000.  The  other  costs  include  a                                                               
financial advisor  - a bond  counsel that gives the  opinion that                                                               
the  debt is  tax  exempt,  the printing  costs  of the  official                                                               
statement and some significant advertising costs.                                                                               
CHAIR TAYLOR asked if this  instance would require four different                                                               
bond issues by four different municipalities.                                                                                   
MR. BOUTIN said  he is not sure, but when  doing the fiscal note,                                                               
he made that  assumption. The costs he listed are  fixed costs so                                                               
one issuance would reduce them.  The largest portion of the cost,                                                               
the underwriter, is  on a per bond  basis so there is  not "a lot                                                               
of juice" in doing all four issues at once.                                                                                     
CHAIR  TAYLOR  said that  is  why  he  asked the  question  about                                                               
ownership.  To  secure the  bonds,  the  taxing ability  of  that                                                               
municipality has to be pledged. He  asked if those bonds are also                                                               
being   secured  with   the  private   property   owned  by   the                                                               
municipality  that will  house the  building, similar  to a  home                                                               
mortgage arrangement.                                                                                                           
MR. BOUTIN  said, as he  stated in  the fiscal note,  he presumed                                                               
the  full faith  and  credit  of the  municipality  would not  be                                                               
pledged.  If that  were contemplated,  the financing  arrangement                                                               
would be entirely different.                                                                                                    
CHAIR TAYLOR  asked if they  would be [indisc.] bonds  as opposed                                                               
to municipal bonds.                                                                                                             
MR. BOUTIN said he assumed the  security would be the state lease                                                               
payments. If the  municipalities went to the voters  for the full                                                               
faith and  credit of the  municipality, which he  doesn't believe                                                               
would  be the  case, an  entirely  different kind  of bond  issue                                                               
would be created and the fiscal note would not apply.                                                                           
CHAIR TAYLOR asked if the  [fiscal note] applies to revenue bonds                                                               
for a municipality.                                                                                                             
MR.  BOUTIN  said   they  are  called  lease   revenue  bonds  or                                                               
certificates of  participation in the  lease, but all  fall under                                                               
the generic term "bonds."                                                                                                       
CHAIR TAYLOR  noted that the  generic term "bonds"  also includes                                                               
general obligation  bonds and he  was trying to  distinguish that                                                               
these would not  be general obligation bonds  of the municipality                                                               
but   would  be   either  revenue   bonds   or  certificates   of                                                               
participation paid for the state's lease.                                                                                       
MR.  BOUTIN  said  the  fiscal  note  makes  the  assumption  the                                                               
municipality  will not  bring credit  to  the deal  and that  the                                                               
credit will be  the lease payments. He clarified in  Section 2 he                                                               
assumed the  municipalities would  bring no pledge  of additional                                                               
security to  the financings,  other than  the state's  credit and                                                               
the  bond sale  proceeds.  If  the full  faith  and  credit of  a                                                               
municipality  were  pledged,  there  would   be  no  need  for  a                                                               
Department of Revenue fiscal note.                                                                                              
SENATOR  GREEN told  members the  Department of  Corrections also                                                               
has  information   and  someone  from  the   Mat-Su  Borough  was                                                               
available to answer questions on that issue via teleconference.                                                                 
There  being no  further questions  of Mr.  Boutin, Chair  Taylor                                                               
thanked him and called Mr. Campbell to testify.                                                                                 
MR. CHARLES CAMPBELL, Director of  the Division of Corrections 24                                                               
years ago, said he believes that  SB 65 is an excellent bill from                                                               
the standpoint of corrections and  congratulated the sponsors. He                                                               
said he is  not aware of the bed space  projections, but he likes                                                               
the  idea of  Sutton as  a location.  He feels  it is  crucial to                                                               
bring   prisoners  back   to   Alaska   from  Arizona.   Alaska's                                                               
Constitution requires correctional administration  to be based on                                                               
principles of  reformation and on  the protection of  the public.                                                               
The  state  is not  abiding  by  that requirement.  Studies  have                                                               
concluded, unmistakably,  that reasonable  proximity to  home and                                                               
community  resources  is  very   important  to  provide  released                                                               
prisoners a  better chance.  He said  he does  not like  to think                                                               
about  the fact  that a  lot of  men, over  the years,  have been                                                               
released  back  into  the community  unprepared.  He  hopes  this                                                               
legislation moves forward.                                                                                                      
MR. CAMPBELL  said he  has testified in  the past  against prison                                                               
designs that  are large and monolithic.  However, although large,                                                               
the design  presented with  SB 65 would  be compatible  with unit                                                               
management.  It would  eliminate the  disadvantages of  an overly                                                               
large  prison  but  it  will  require  experienced  staff  to  be                                                               
successful. He favors  the Sutton location because SB  65 will be                                                               
part of  a prison complex;  Palmer camp  is located there.  It is                                                               
advantageous to  have staff  available and to  be in  a community                                                               
with  a lot  of people.  He believes  the very  best correctional                                                               
program  is one  made up  of  community volunteers.  He said  one                                                               
wouldn't  believe  the way  people  volunteer  to help  out  from                                                               
churches and civic clubs.                                                                                                       
SENATOR COWDERY asked Mr. Campbell  what the population of Sutton                                                               
MR. CAMPBELL said he did not  know but recalled that Helen Bierne                                                               
(ph), the  former commissioner  of the  Department of  Health and                                                               
Services, tried to  seek a site in Sutton about  20 years ago for                                                               
the prison that  ended up being built in Seward.  He noted Sutton                                                               
is a  rural community with  good resources, such as  churches and                                                               
organizations. Professionals, such  as clinical psychologists and                                                               
physicians,  reside within  a reasonable  distance.   He repeated                                                               
that the  potential for volunteerism  is excellent. He  asked the                                                               
Legislature to look  at that fact that the state  cannot skimp on                                                               
programs anymore.  Alaska's failure  to develop  strong treatment                                                               
programs  for alcohol  abuse  has been  very  destructive to  the                                                               
state. The  prodigious effect  of alcohol on  crime in  Alaska is                                                               
mind-boggling. He offered to answer questions.                                                                                  
CHAIR TAYLOR thanked  Mr. Campbell and asked  a representative of                                                               
the Department of Corrections to testify.                                                                                       
MR.  MARC  ANTRIM,  Commissioner-designee of  the  Department  of                                                               
Corrections,  told  members that  SB  65  is fully  supported  by                                                               
Governor Murkowski  and DOC. They  believe SB 65 will  fully meet                                                               
the needs of  DOC and this Administration's  commitment to public                                                               
safety.  He  then gave  a  power  point  presentation on  SB  65,                                                               
summarized as follows.                                                                                                          
DOC  currently  operates  facilities  all  over  Alaska.  If  the                                                               
Legislature authorizes  DOC to  construct a  prison, this  DOC is                                                               
committed to  a no-frills approach  to prison  construction (Page                                                               
DOC's projected  inmate population statistics show  an additional                                                               
1,000   prisoners   by   January   2007,   which   includes   the                                                               
approximately 650 prisoners in Arizona (Page 3).                                                                                
CHAIR TAYLOR asked how many beds would be needed.                                                                               
COMMISSIONER-DESIGNEE  ANTRIM  said  about 1600  additional  beds                                                               
would be needed in 2007.                                                                                                        
CHAIR TAYLOR asked if DOC would need new facilities beyond that.                                                                
COMMISSIONER-DESIGNEE  ANTRIM said  DOC would  also  tie in  some                                                               
alternative incarceration  programs, such as wellness  courts, to                                                               
take some of the pressure off on the lower custody prisoners.                                                                   
He  then  continued  his  presentation  by  showing  a  chart  of                                                               
institution  activity. He  noted the  chart  shows why  it is  so                                                               
difficult  to  compare  projects   (Page  7).  He  explained  the                                                               
facilities   operated  by   DOC   are  multi-functional.   30,000                                                               
prisoners move  in and  out of facilities  and, in  addition, DOC                                                               
has  a  lot of  transfers  from  booking facilities  to  sentence                                                               
facilities and halfway  houses, which is why the cost  of care is                                                               
so expensive. Booking  is a very expensive  component because DOC                                                               
must  medically  screen  prisoners, and  do  classifications  and                                                               
threat assessments.                                                                                                             
COMMISSIONER-DESIGNEE ANTRIM  explained the diagram on  page 5 is                                                               
a  conceptual  design  of  how  the facility  might  be  run  and                                                               
staffed, but it is not the final design.                                                                                        
The chart  of specifications on  page 6 shows the  facility would                                                               
hold  1200 prisoners  in four,  20-bed medium  security pods.  To                                                               
economize,  three prisoners  would be  housed in  each cell.  The                                                               
cells  would be  dry [without  plumbing]  and 80  percent of  the                                                               
prisoners would  be medium security prisoners.  Each housing unit                                                               
would  have  group shower  and  toilet  facilities. The  facility                                                               
would   meet   the   American  Correctional   Association   (ACA)                                                               
standards,  as well  as the  standards  of the  State of  Alaska,                                                               
regarding square  footage. Approximately 15 percent  of the cells                                                               
would be  double-bunked, close  custody cells  with a  toilet and                                                               
sink in each cell. Approximately  5 percent of the facility would                                                               
have maximum-security cells.                                                                                                    
COMMISSIONER-DESIGNEE  ANTRIM  pointed  out DOC  does  not  favor                                                               
large facilities because  they are hard to  manage. However, this                                                               
plan  must be  large to  attain  economy of  scale. DOC  proposes                                                               
breaking  the facility  into three  small  units, each  run as  a                                                               
separate facility.                                                                                                              
SENATOR  COWDERY asked  Commissioner-designee Antrim  to describe                                                               
the open space in the middle.                                                                                                   
COMMISSIONER-DESIGNEE ANTRIM  said that would be  the preparation                                                               
SENATOR COWDERY asked how they would deal with snow removal.                                                                    
COMMISSIONER-DESIGNEE  ANTRIM  said  snow   would  be  blown  out                                                               
through  the break  points. He  then reestablished  the schematic                                                               
was designed  for the purpose  of getting  a handle on  the costs                                                               
and preparing a fiscal note; it is not a final design.                                                                          
CHAIR  TAYLOR  said,  given the  transition  in  administrations,                                                               
members  appreciate the  fact the  proposal  is hypothetical.  He                                                               
advised  members he  visited the  facility  in Florence,  Arizona                                                               
just  after  Alaska's  first  prisoners  arrived.  He  asked  the                                                               
Commissioner  how this  hypothetical facility  compares with  the                                                               
physical  structure of  the facility  that 700  Alaskan prisoners                                                               
are currently being housed in.                                                                                                  
COMMISSIONER-DESIGNEE ANTRIM said he has  not had the opportunity                                                               
to travel to Florence. However, it  should be similar in that the                                                               
Florence facility tries  to maximize the lines of  sight from the                                                               
central control points.                                                                                                         
TAPE 03-3, SIDE B                                                                                                               
4:30 pm                                                                                                                         
COMMISSIONER-DESIGNEE ANTRIM  said that's key to  saving money in                                                               
new  design features.  One person  can  run the  entire unit.  If                                                               
someone gets out of line, they  can call for backup from staff on                                                               
standby. This  is a big  point for putting the  proposed facility                                                               
on the Palmer campsite. In the  event of an emergency, they could                                                               
make use of  the Palmer minimum and medium facility  staff at the                                                               
higher security facility.                                                                                                       
CHAIR  TAYLOR commented  both the  women's prison  and the  men's                                                               
prison in  Florence, Arizona, are  similar in design to  the star                                                               
configuration with  the central  control in  the middle,  but the                                                               
Corrections  Corporation facility  is different.  He asked  for a                                                               
more thorough comparison at the next hearing.                                                                                   
COMMISSIONER-DESIGNEE  ANTRIM agreed  to do  so.  The diagram  on                                                               
page 8 contained a closer view  of a conceptual housing unit. The                                                               
security  post is  in the  middle of  a three  wing star  with 20                                                               
cells per wing.  Economy is built into the concept  plan in terms                                                               
of security features for the  medium security facility. There are                                                               
no automated locking  doors on the cells. This is  similar to the                                                               
Wildwood Correctional  Facility where prisoners are  free to come                                                               
and go  from their cells.  Cells at  the Lemon Creek  facility in                                                               
Juneau have  motorized security doors,  which is  very expensive.                                                               
The only  motorized door  in the conceptual  plan is  between the                                                               
security post and the three wing block.                                                                                         
He referred to page 9 to  show a conceptual unit wing. Telephones                                                               
are  located  in  the  main  area of  the  dayroom;  showers  and                                                               
restrooms are on one end of the  wing and the security post is at                                                               
the other.  It's less expensive to  have the plumbing at  one end                                                               
rather than in every cell.                                                                                                      
SENATOR COWDERY asked what would happen  in the case of a riot in                                                               
a facility  in which  prisoners are  able to move  in and  out of                                                               
their cells at will.                                                                                                            
COMMISSIONER-DESIGNEE  ANTRIM  replied   several  facilities  are                                                               
currently  of  this  design  and  emphasized  this  is  a  medium                                                               
security facility. An  assessment system is designed  to weed out                                                               
problems. The beauty of the proposal  is that, at any given time,                                                               
they would deal with no more  than 60 prisoners while the rest of                                                               
the  facility  is  secured.  They   would  make  use  of  current                                                               
technology like pepper spray to control the population.                                                                         
SENATOR DYSON  asked him  to point to  where the  security people                                                               
would be located.                                                                                                               
COMMISSIONER-DESIGNEE  ANTRIM  pointed  out  a  security  control                                                               
SENATOR DYSON asked how security  people would know if a prisoner                                                               
was being  assaulted in one  of the  rooms and wasn't  making any                                                               
COMMISSIONER  DESIGNEE  ANTRIM  responded  DOC  policies  require                                                               
hourly checks throughout  each of the housing  units. Staff would                                                               
be  in  and  out  all  the time.  When  DOC  assesses  prisoners,                                                               
security factors are taken into account.                                                                                        
SENATOR DYSON asked what prisoner-to-guard ratios were used.                                                                    
COMMISSIONER-DESIGNEE ANTRIM replied the  prisoner to staff ratio                                                               
would be 6 to 1.                                                                                                                
SENATOR DYSON figured  there would be 10 staff for  60 people and                                                               
asked if they would be spread over three shifts.                                                                                
COMMISSIONER-DESIGNEE  ANTRIM  responded   that  is  an  accepted                                                               
industry  standard, but  it is  deceptive. The  1 to  6 ratio  is                                                               
determined  by the  total number  of prisoners  versus the  total                                                               
number of  staff. He pointed  out, "It  is deceiving in  that the                                                               
actual  number of  staff  at any  given time  is  much less  than                                                               
SENATOR DYSON asked if there would be two or three shifts.                                                                      
COMMISSIONER-DESIGNEE  ANTRIM   replied  that  he   envisioned  a                                                               
standard shift pattern of four 12-hour shifts.                                                                                  
SENATOR DYSON asked  if there would be two people  on duty at any                                                               
one time.                                                                                                                       
COMMISSIONER-DESIGNEE  ANTRIM  replied  that one  unit  would  be                                                               
staffed by one  person with roving security patrols  to cover the                                                               
entire facility. Each  unit would house 240 prisoners  in the six                                                               
SENATOR DYSON asked how many rovers there would be.                                                                             
COMMISSIONER-DESIGNEE ANTRIM  replied there would  be a  total of                                                               
288  staff (100  support staff  and 188  correction officers)  at                                                               
that facility of  which 49 or 50 correction officers  would be on                                                               
at  any one  time.  He stressed  that this  is  a medium  custody                                                               
SENATOR COWDERY asked the square footage of the cells.                                                                          
COMMISSIONER-DESIGNEE  ANTRIM replied  a three-person  layout has                                                               
approximately 180  sq. ft. The  prisoners work around  the prison                                                               
and aren't  sitting in their cells  all the time. He  pointed out                                                               
the specialized areas in the layout.                                                                                            
CHAIR TAYLOR  asked if the facilities  were going to be  owned by                                                               
the communities, who would decide on the design.                                                                                
COMMISSIONER-DESIGNEE  ANTRIM replied  the department  would hire                                                               
the architects and do the design.  They are shopping around for a                                                               
"cookie-cutter design" - something that's already established.                                                                  
CHAIR  TAYLOR asked  if the  plans would  be bid  to the  private                                                               
COMMISSIONER-DESIGNEE ANTRIM  replied the state would  go through                                                               
the contract process and award it to the lowest bidder.                                                                         
CHAIR TAYLOR asked  what happens to the state  under this process                                                               
if DOC designs it as opposed to hiring a private architect.                                                                     
COMMISSIONER-DESIGNEE   ANTRIM  replied   DOC  hired   a  private                                                               
architect. DOC has  a facilities management team  that is charged                                                               
with  facilities maintenance  and  has heavy  involvement in  any                                                               
constructions from the first day of the design process.                                                                         
CHAIR TAYLOR said it is good  the state has that oversight and he                                                               
just wanted to be clear on  procedures. He asked if they could do                                                               
design-build as a concept.                                                                                                      
COMMISSIONER-DESIGNEE  ANTRIM  replied  DOC  might  do  that  and                                                               
reemphasized the diagram is for demonstration and discussion.                                                                   
SENATOR COWDERY asked how soon a facility could be complete.                                                                    
COMMISSIONER-DESIGNEE ANTRIM replied the  normal timeline for one                                                               
of these projects is about 4.5 to  5 years from the time the bill                                                               
is passed. They would like to have it open in four years.                                                                       
SENATOR COWDERY  asked how long it  would take to sell  the bonds                                                               
to do this.                                                                                                                     
COMMISSIONER-DESIGNEE   ANTRIM  replied   he   didn't  know.   He                                                               
explained they extrapolated some of  the costs so they could have                                                               
a comprehensive fiscal note.                                                                                                    
SENATOR COWDERY asked  if he considered moving  the facility away                                                               
from the earthquake fault area in which it is currently planned.                                                                
COMMISSIONER-DESIGNEE  ANTRIM  replied  the  facility  management                                                               
people  in the  two existing  facilities contacted  the geologist                                                               
who wrote  the article  and received  some good  news. Apparently                                                               
the real  problem with the  fault lies closer to  Houston several                                                               
miles away.  The geologist assured  him the fault is  about three                                                               
miles below the surface at Sutton.                                                                                              
SENATOR COWDERY said his concern was  that it costs more to build                                                               
in an earthquake fault zone.                                                                                                    
COMMISSIONER-DESIGNEE ANTRIM said the  Seward facility took three                                                               
years from beginning  of design to opening the  door. That's what                                                               
DOC is planning. He thought that  includes time to sell the bonds                                                               
and do the design.                                                                                                              
CHAIR  TAYLOR commented  it took  nine months  from the  time the                                                               
contractor at the  Arizona prison applied for  the first building                                                               
permit until the first prisoner  moved in. He added, "That's what                                                               
the private sector did."                                                                                                        
COMMISSIONER-DESIGNEE  ANTRIM  showed  an overview  of  what  the                                                               
facility might  look like on  page 14.  It has a  perimeter road,                                                               
double  fencing,  and  has the  recreation  facility  within  the                                                               
building structure.  Additionally, he noted the  maximum security                                                               
or  close  custody  housing.  He   pointed  out  the  area  where                                                               
prisoners could  work, the maintenance area,  and industry areas,                                                               
which are common features in most state facilities.                                                                             
He said there were  two floors of cells in each  of the wings and                                                               
it would  be possible to  have culturally relevant housing  and a                                                               
faith-based  program  in  another   area,  as  examples.  Another                                                               
feature of  this plan is if  there was a sudden  down-turn in the                                                               
economy or a disaster, and  assuming something could be done with                                                               
the  prisoners, one  or two  of  the buildings  could be  closed,                                                               
staff  could be  put  in  layoff and  the  other  two could  keep                                                               
working.  He explained, "It's much  more flexible than if you had                                                               
a contract of some sort."                                                                                                       
COMMISSIONER-DESIGNEE  ANTRIM  said  the problem  with  comparing                                                               
facilities is  they have a group  of facilities that do  a number                                                               
of different  functions, which results  in different  prices. For                                                               
example,  Palmer Correctional  Center  is  medium/minimum and  it                                                               
costs about $57.17 per day versus  Lemon Creek, which is a multi-                                                               
function booking facility.  Because of that and because  it is in                                                               
Juneau, its costs are higher.  The Anchorage jail just opened and                                                               
runs about $157.26 per day per  person. Page 16 compares costs in                                                               
SB  65 of  $74.14 to  the costs  in HB  55 of  $91.00. The  SB 65                                                               
figure includes $46.51 in operating  costs and $27.63 for capital                                                               
HB 55 says  the alternative facility would be operating  at a per                                                               
day rate  of $91-$94. He  chose the lower  of the two  figures to                                                               
give the  benefit of a doubt.  He was not clear  what the capital                                                               
costs  would be  for  that facility.  Both  facilities are  doing                                                               
exactly the  same mission and assume  a 25-year term on  the debt                                                               
COMMISSIONER-DESIGNEE ANTRIM  said any corrections  project would                                                               
have  some  program costs  and  those  are specifically  excluded                                                               
under HB 55.  There is quite a bit of  variation in the operating                                                               
costs. The  costs for inmate  programs, health care,  Division of                                                               
Administration and support costs,  and statewide direct costs are                                                               
fixed at  $36.25. The  total averages out  to be  $113.31 system-                                                               
wide. He  explained there are  facilities that do a  wide variety                                                               
of missions  and are  also in expensive  areas across  the state.                                                               
All of those  combined give them the average cost  per prison per                                                               
day. But,  in the  Palmer Correctional  Center, a  medium custody                                                               
facility, they start  with an institution cost of  $57.17 and end                                                               
up with  a total cost  of $93.42. There's  a lot of  variation in                                                               
     So when  we talk  about a  comparison cost  of $113.31,                                                                    
     it's problematic,  which is why  comparing SB 65  to HB
     55 is a much more honest way  to assess - or to do this                                                                    
     comparison rather  than comparing what  we're operating                                                                    
     in the  state now - because  they do a wide  variety of                                                                    
     missions  as   opposed  to  the  facilities   that  are                                                                    
     proposed under both these bills.                                                                                           
CHAIR TAYLOR asked him to explain the tents.                                                                                    
COMMISSIONER-DESIGNEE  ANTRIM replied  tents are  used seasonally                                                               
at a number  of facilities for overflow. Lemon Creek  is the only                                                               
facility that leaves one up year-round.                                                                                         
CHAIR TAYLOR  said they  could disregard  those because  they are                                                               
COMMISSIONER-DESIGNEE ANTRIM said that was correct.                                                                             
CHAIR TAYLOR said instead of  taking the least expensive facility                                                               
cost statewide of  $93.42 (Palmer), he asked what  the costs were                                                               
at the facilities like Bethel.                                                                                                  
COMMISSIONER-DESIGNEE  ANTRIM responded  Bethel is  known as  the                                                               
Yukon-Kuskokwim Correctional Center and  has costs of $145.63 per                                                               
CHAIR TAYLOR asked how many prisoners would be added in Bethel.                                                                 
COMMISSIONER-DESIGNEE ANTRIM  replied, "There  would be  120 beds                                                               
in Bethel."                                                                                                                     
CHAIR TAYLOR asked if that was an increase of 120.                                                                              
COMMISSIONER-DESIGNEE ANTRIM replied that was an increase.                                                                      
CHAIR  TAYLOR  asked  if  they projected  any  cost  savings  for                                                               
COMMISSIONER-DESIGNEE ANTRIM  replied there  would be  economy of                                                               
scale  in  Bethel,   but  the  savings  would   come  in  reduced                                                               
transportation. Bethel  currently has a  capacity of 90  and they                                                               
are  over-capacity  all  the  time.   About  90  percent  of  the                                                               
population  is  pre-trial and  they  have  to get  the  prisoners                                                               
awaiting  trial  out.  Cost  savings   would  come  from  reduced                                                               
transports to and from other facilities, namely Anchorage.                                                                      
CHAIR TAYLOR  asked what the  costs were in the  other facilities                                                               
that would be expanded.                                                                                                         
COMMISSIONER-DESIGNEE ANTRIM  replied the  Fairbanks Correctional                                                               
Center has a cost of $126.17.                                                                                                   
MR.   JERRY  BURNETT,   Director   of  Administrative   Services,                                                               
Department of Corrections, explained  the additional cost per day                                                               
for new prisoners in Bethel was $93 per day.                                                                                    
COMMISSIONER-DESIGNEE  ANTRIM   added  that  figure   would  drop                                                               
substantially from  $145. Page 18  shows what the  two facilities                                                               
would cost with  the fixed costs added in. The  facility in SB 65                                                               
would run $110.39  (including $27.63 - capital  costs) per person                                                               
per day  and the  proposed facility  in HB  55 would  run $127.25                                                               
(capital costs not specified) per day.                                                                                          
CHAIR  TAYLOR asked,  if the  fixed  and other  direct costs  are                                                               
going to exist  in the future as well as  now, what the prisoners                                                               
in Arizona cost. He questioned,  "Is that included in the Arizona                                                               
cost right now - the $36.25?"                                                                                                   
COMMISSIONER-DESIGNEE  ANTRIM replied  the state's  contract with                                                               
the Arizona facility assumes a  number of services and excludes a                                                               
number as well. "It's a different calculation," he noted.                                                                       
CHAIR TAYLOR  asked if there  is a  total figure for  health care                                                               
and each of the things listed as fixed in the Arizona contract.                                                                 
COMMISSIONER-DESIGNEE  ANTRIM replied  the cost  is about  $66.10                                                               
per day per person in Arizona.                                                                                                  
CHAIR TAYLOR  asked if  that includes almost  all of  those fixed                                                               
COMMISSIONER-DESIGNEE ANTRIM  said they were looking  at $135,000                                                               
per bed x  $1,200 and that totals $162,000,000.  They are looking                                                               
at an annual lease  factor of $10,083 per bed at  25 years at 5.5                                                               
percent interest.                                                                                                               
SENATOR DYSON said the fiscal note says $14,600 per bed.                                                                        
COMMISSIONER-DESIGNEE ANTRIM replied the bill  says up to $14,600                                                               
per bed, but he thought the fiscal note actually said $10,000.                                                                  
CHAIR TAYLOR said at one point  they were paying $135,000 per bed                                                               
and even  at $10,000 per  bed x 25 years,  that's a quarter  of a                                                               
million dollar cost  per bed in actual costs "...by  the time you                                                               
factor in  paying off the bonds  and the interest and  paying the                                                               
lease payment  to someone else to  either own, build or  have the                                                               
facility for us."                                                                                                               
COMMISSIONER-DESIGNEE ANTRIM said that was correct.                                                                             
CHAIR TAYLOR recapped the actual cost  to the state if it goes as                                                               
high as $14,000 per year is  going to be $350,000 to $400,000 per                                                               
COMMISSIONER-DESIGNEE ANTRIM  explained SB 65 contains  more than                                                               
just one facility.  It provides for a prison  expansion in Bethel                                                               
of 120  beds. This is critical  as Bethel is a  regional hub with                                                               
approximately  60,000 people  in  the  area. It  is  served by  a                                                               
superior  court, which  generates  a lot  of pre-trial  activity.                                                               
Again, the  facility is at capacity  or over about 95  percent of                                                               
the time. They  anticipate staffing of 11 for  the facility; that                                                               
would include two  security posts at any given  time, providing a                                                               
ratio of 1 to 5.5-5.8.                                                                                                          
CHAIR  TAYLOR  asked  why  the state  should  build  a  full-time                                                               
facility for medium  security prisoners with a  certain number of                                                               
beds  when the  state obviously  needs a  pre-trial facility.  He                                                               
said  it is  obvious the  need for  long term  prisoners is  very                                                               
small compared to the pre-trial  requirements. He pointed out the                                                               
number could run as high as 25,000 to 30,000.                                                                                   
COMMISSIONER-DESIGNEE ANTRIM  said that is essentially  what this                                                               
facility  expansion is.  It is  designed to  meet that  pre-trial                                                               
population need. He explained DOC's  original proposal was for an                                                               
80-bed  expansion but,  after speaking  with Senator  Hoffman and                                                               
DOC's transportation staff,  the number was increased  to 120. He                                                               
noted the 80 beds would make  a difference but DOC would still be                                                               
doing transports on a daily basis.                                                                                              
COMMISSIONER-DESIGNEE  ANTRIM described  the expansion  plans and                                                               
the  staffing requirements  for the  Fairbanks facility.  He told                                                               
members the  final piece of  SB 65  involves an expansion  of the                                                               
Anchorage  jail. That  proposal was  brought to  DOC by  the U.S.                                                               
Marshall's Service,  which currently contracts with  DOC to house                                                               
federal  retainees for  the  U.S. Marshall's  and  the INS.  That                                                               
contract is  met or  exceeded at all  times. The  U.S. Marshall's                                                               
Service  has announced  that it  will be  expanding its  presence                                                               
primarily in Anchorage  and Juneau over the next  few years. That                                                               
expansion  will increase  law enforcement  activity in  the state                                                               
and will  necessitate more bed  space. SB 65  encompasses receipt                                                               
authority  in  the   amount  of  $30  million   and,  should  the                                                               
Legislature appropriate  that money, DOC would  see the expansion                                                               
for a 200  bed project. Staffing would be paid  through the added                                                               
receipts  generated   by  the  client  billing   to  the  federal                                                               
CHAIR TAYLOR  asked if  the U.S.  Marshall's Office  operates any                                                               
prisons or whether it always contracts out for services.                                                                        
COMMISSIONER-DESIGNEE  ANTRIM   said  it  does  operate   an  INS                                                               
facility  outside of  the Seattle  airport. He  said most  of its                                                               
work is done under contract to states.                                                                                          
CHAIR  TAYLOR  asked  if  the   State  of  Alaska  would  act  as                                                               
contractor to the U.S. Marshall's Office.                                                                                       
COMMISSIONER-DESIGNEE ANTRIM  said DOC  already does;  this would                                                               
expand that  to meet the increased  federal need by 200  beds. He                                                               
then pointed out the location (on  page 25) for that expansion is                                                               
the Anchorage jail on 3rd Ave.                                                                                                  
CHAIR TAYLOR thought  the Legislature just paid a  huge amount of                                                               
money to expand that jail.                                                                                                      
COMMISSIONER-DESIGNEE ANTRIM agreed and said  it was actually new                                                               
construction. He  noted the  addition would be  made up  of three                                                               
housing  pods that  would hold  an additional  200 prisoners.  He                                                               
told members some Senators expressed  concern that facilities are                                                               
not being built in their areas.  He said it is important to think                                                               
about DOC as  a corrections system. The benefit,  for example, to                                                               
the   residents  of   Juneau,   will  come   directly  from   the                                                               
construction of a 1200 bed facility  in the Mat-Su. Right now, at                                                               
any given  time, 30 to 50  percent of the Lemon  Creek population                                                               
is  from the  Anchorage  area. DOC  envisions  the population  of                                                               
prisoners  will shift  around to  make room  for local  residents                                                               
once the  new facility  opens. The  additional capacity  will put                                                               
the corrections  system back on  track regarding  the specialized                                                               
missions  of many  of the  facilities, for  example the  Wildwood                                                               
Correctional Center was envisioned  as a medium security facility                                                               
with prison industries programs. At  this point, the system is so                                                               
overcrowded those  missions have gone  by the wayside.  Right now                                                               
prisoners aren't kept in prison  industries or treatment programs                                                               
because they  have to be  transferred around just to  balance out                                                               
bed counts.                                                                                                                     
SENATOR  GUESS  asked if  the  fiscal  note  is  for all  of  the                                                               
facilities  or  just Palmer  and  how  the Commissioner  foresees                                                               
phasing in the expansions and the Palmer facility.                                                                              
COMMISSIONER-DESIGNEE  ANTRIM  said 4.5  years  is  a worse  case                                                               
scenario. If  this project is  authorized, DOC plans to  put this                                                               
on a fast track and will  do everything possible to get the bonds                                                               
issued quickly and begin construction.                                                                                          
SENATOR GUESS said  she didn't know if the plan  was to start all                                                               
projects at once or whether it was to do the new facility first.                                                                
COMMISSIONER-DESIGNEE ANTRIM  said the  fiscal notes  assumed the                                                               
projects would all be done at once.                                                                                             
SENATOR GUESS  then asked if the  $41 million on the  fiscal note                                                               
takes  into account  the  cost savings  of  housing prisoners  in                                                               
SENATOR GUESS then indicated the  $25 million would be taken away                                                               
from  the  $41  million  leaving an  additional  $16  million  in                                                               
operating costs.                                                                                                                
COMMISSIONER-DESIGNEE  ANTRIM said  the  Arizona operating  costs                                                               
would be rolled into the new facility.                                                                                          
SENATOR GUESS said the fiscal note assumes no savings.                                                                          
MR. BURNETT said it doesn't show the savings from Arizona.                                                                      
SENATOR HOFFMAN pointed out the  fiscal note does not reflect the                                                               
savings from a fewer number  of transfers once the new facilities                                                               
are built.                                                                                                                      
MR. BURNETT agreed it does not.                                                                                                 
SENATOR HOFFMAN  said the transportation costs  amount to between                                                               
$2  and  $3 million  so  savings  would  be achieved  in  lowered                                                               
transportation expenses.                                                                                                        
COMMISSIONER-DESIGNEE ANTRIM said that is correct.                                                                              
5:15 p.m.                                                                                                                       
SENATOR DYSON asked  if he thought public  policy should override                                                               
the economic concerns.                                                                                                          
COMMISSIONER-DESIGNEE ANTRIM answered he didn't think it should.                                                                
SENATOR  DYSON asked  if the  reason Arizona  prisoners are  in a                                                               
publicly run facility is because it's cheaper.                                                                                  
COMMISSIONER-DESIGNEE ANTRIM replied they  are in Arizona because                                                               
there simply isn't capacity  anywhere else. Prior administrations                                                               
attempted to deal with that, but there were no alternatives.                                                                    
SENATOR  DYSON   asked  if  there  were   any  publicly  operated                                                               
facilities in the country where  Alaska prisoners could have been                                                               
COMMISSIONER-DESIGNEE   ANTRIM   replied  industry   publications                                                               
indicate that Minnesota  has space at times, but  the decision to                                                               
go to Arizona was probably based on cost.                                                                                       
SENATOR DYSON  asked if he would  elect not to use  a private in-                                                               
state  facility that  was significantly  cheaper  because of  the                                                               
superior service and  public policy call of having it  run in the                                                               
public sector.                                                                                                                  
COMMISSIONER-DESIGNEE  ANTRIM  replied   he  wouldn't  make  that                                                               
statement; the Legislature would  have to consider that question.                                                               
SB  65  is a  solution  that  meets  his concerns  and  citizen's                                                               
concerns in terms of economy.                                                                                                   
SENATOR DYSON  remarked the state  could "hold their feet  to the                                                               
fire" on  a contract and  could see  if someone else  "could beat                                                               
COMMISSIONER-DESIGNEE  ANTRIM replied  a  private facility  would                                                               
have the  same problems  as evidenced  by recent  negotiations at                                                               
the Nome facility. The State  of Alaska doesn't have shareholders                                                               
to answer to.                                                                                                                   
SENATOR DYSON  asked if this Administration  would look favorably                                                               
on a project that could be operated at a reduced rate.                                                                          
COMMISSIONER-DESIGNEE  ANTRIM  said  that  was   his  goal  as  a                                                               
5:30 p.m.                                                                                                                       
SENATOR COWDERY  asked if he  would give  favorable consideration                                                               
to an  owner/operator who could build  and run a facility  to his                                                               
specifications and at a lower cost.                                                                                             
COMMISSIONER-DESIGNEE  ANTRIM  replied  the  Governor  ran  on  a                                                               
public  prison  platform  and  has  made  a  commitment  to  this                                                               
project.  He   supports  SB  65,   as  does  the   Department  of                                                               
Corrections, but a state manager  must consider costs. He thought                                                               
the reality  of such a  situation would  be tough because  of the                                                               
profit margin that has to be  built into a private operation. The                                                               
department  is talking  about  changing the  entire  way they  do                                                               
business since  current facilities are  old and ill  designed and                                                               
require  more staff  to run.  He  opined state  employees who  go                                                               
through  the  academies  are  the  highest  trained  correctional                                                               
officers in  the Northwest. He  stated, "We provide a  product of                                                               
the   state   that   keeps   our    citizens   safer   than   any                                                               
He added  there is a  lot of room  in the facilities  for private                                                               
contracting. The basic security and  probation staff for the good                                                               
of public safety has got to be state employees.                                                                                 
SENATOR  COWDERY asked  if he  had any  safety statistics  on the                                                               
private facility in Arizona.                                                                                                    
COMMISSIONER-DESIGNEE  ANTRIM  replied   he  could  provide  more                                                               
material than he'd want on the subject.                                                                                         
SENATOR  COWDERY  asked  if  public  facilities  are  safer  than                                                               
private facilities.                                                                                                             
COMMISSIONER-DESIGNEE ANTRIM replied a number  of studies lead to                                                               
that conclusion.                                                                                                                
SENATOR GUESS asked  why he didn't think  Southeast Alaska needed                                                               
COMMISSIONER-DESIGNEE  ANTRIM  explained   any  increase  in  the                                                               
system would  have the  effect of moving  people back  where they                                                               
belong.  In Juneau,  more than  30 percent  of the  population is                                                               
from somewhere other than Juneau, primarily Anchorage.                                                                          
SENATOR GUESS  asked if  that meant there  are no  prisoners from                                                               
Southeast Alaska in other facilities.                                                                                           
COMMISSIONER-DESIGNEE   ANTRIM  said   he   wouldn't  make   that                                                               
assumption. Because of transport  pressures, the department moves                                                               
prisoners all  over. Some prisoners  that are from Juneau  are at                                                               
program  facilities  outside  the  Juneau  area.  Some  long-term                                                               
prisoners are  in Anchorage and  some are moved to  Arizona. This                                                               
added capacity would  provide the ability to  return prisoners to                                                               
Juneau  or  wherever  they  are  from  when  their  release  date                                                               
The goal is to move prisoners closer  to home at the end of their                                                               
sentence because all  prisoners must be released at  the place of                                                               
arrest.  If the  prisoner isn't  returned prior  to release,  the                                                               
state must buy  the prisoner a return ticket to  the community of                                                               
arrest upon their release.                                                                                                      
CHAIR  TAYLOR  thanked  him for  the  presentation  and  in-depth                                                               
answers.  He  asked  if  the   fiscal  note  analysis  for  1,000                                                               
prisoners at $70 per day x 365  days is a 2008 projection for the                                                               
Arizona facility.                                                                                                               
COMMISSIONER-DESIGNEE  ANTRIM   replied  that  would   cover  the                                                               
expansion they  are anticipating in  their system in  addition to                                                               
the current  number.   The contract  in Arizona  is now  $54 plus                                                               
built-in costs  bringing the  total to about  $66 per  day. There                                                               
are 650 prisoners there now.                                                                                                    
CHAIR  TAYLOR calculated  the actual  dollar  savings, if  things                                                               
were to  stay constant, would be  $14 to $15 million  rather than                                                               
the projected $41 million.                                                                                                      
There  being  no   further  questions  for  Commissioner-designee                                                               
Antrim, Chair Taylor asked Mr. Pruitt to give his testimony.                                                                    
MR.  FRANK  PRUITT described  himself  as  former legal  counsel,                                                               
Deputy  Commissioner  and  Commissioner   of  the  Department  of                                                               
Corrections under  Governors Sheffield,  Cowper and Hickel  and a                                                               
former state trooper.  He spent 20 years in the  public arena and                                                               
is now in  private sector. He did  not come to testify  on SB 65,                                                               
but wanted  to respond  to some inaccuracies  with respect  to HB
55.  Per  diem of  $91  per  day  per  bed includes  capital  and                                                               
operating  costs; it  excludes major  medical and  transportation                                                               
costs. HB  55 is about the  Whittier proposal, which is  close to                                                               
the population  center. He estimated  transportation costs  to be                                                               
50 cents per day.                                                                                                               
Major medical, however, is another  matter. Inmate health care is                                                               
about $16.  The private  contractor anticipates  providing health                                                               
care  to the  exclusion of  major medical.  In the  Department of                                                               
Correction operating  budget, the  total annual health  care cost                                                               
is about $17 million. About half  of the $17 million is personnel                                                               
costs and half  of that, or about $4 million,  is contract costs.                                                               
He thought  major medical was buried  in the $2 to  $4 million of                                                               
contractual services  for dental and medical  services. Under any                                                               
circumstances,  the daily  cost  of care  for  prisoners per  day                                                               
would be under $95, not $120.                                                                                                   
The preliminary  design of  the Whittier  facility is  based upon                                                               
current Department  of Corrections  standards, which has  a four-                                                               
prisoner to  one correction officer  ratio. The  private facility                                                               
is designed  on a 1  to 4.5 ratio.  He thought this  dialogue was                                                               
very healthy  because of the  assertions that the  private sector                                                               
can deliver comparable quality at less cost.                                                                                    
He explained  he negotiated  the Arizona contract  as one  of the                                                               
last acts of the Hickel  Administration. This was negotiated as a                                                               
stopgap  measure for  the incoming  administration because  there                                                               
were  no beds  left in  this state  or any  state. Three  private                                                               
companies  had  beds  and   Corrections  Corporation  of  America                                                               
[Florence, Arizona] was selected.                                                                                               
CHAIR TAYLOR  expressed hope the  Legislature would  move forward                                                               
on the  issue this session one  way or the other.  He didn't know                                                               
if the  solution would  be beneficial  to the  state in  terms of                                                               
saving money  and beneficial  to the  public sector  concerns for                                                               
security and housing Alaska prisoners in state.                                                                                 
MR.  PRUITT agreed  and  said he  thought  the Arizona  contract,                                                               
after  eight   years,  was  a  model   government/private  sector                                                               
partnership. The security there has  been no better or worse than                                                               
comparable state  systems as  indicated by  a recent  Harvard Law                                                               
Review.  He   is  convinced  the   private  sector   can  deliver                                                               
comparable  state  services  at  roughly  15  percent  less  than                                                               
comparable  state operated  services in  the state,  but it  will                                                               
take a cooperative effort.                                                                                                      
SENATOR DYSON asked  if his bid included major  medical while the                                                               
plan received from the department did not.                                                                                      
MR. PRUITT replied  the presentation from the  department set out                                                               
the per diem  rate in HB 55  at $91 and added $36.25  for a total                                                               
HB 55  rate. HB 55  anticipates capital and operating  costs will                                                               
be  included  along  with health  care  programs,  administrative                                                               
overhead, etc., but it excludes  the major medical portion of the                                                               
total health  cost, which he  calculated to  be about $2  per day                                                               
per inmate.  If you  add $2  to $91 you  get $93  and if  you add                                                               
another $1  for administration and  transportation, it's  $94. HB
55  probably  should  have  been  drafted  so  that  the  private                                                               
contract  was guaranteeing  costs  at a  percentage  of the  more                                                               
costly state services.                                                                                                          
SENATOR DYSON pointed out costs  were based on different staff to                                                               
inmate  ratios.  He  asked  what the  15  percent  difference  in                                                               
staffing means in total costs.                                                                                                  
MR. PRUITT replied he could get that information for him.                                                                       
SENATOR  DYSON asked  if  he  was using  adjoining  cells in  his                                                               
MR. PRUITT  replied he  initially used  staffing ratios  that the                                                               
state uses, but  it would  be easy to take the department's model                                                               
and estimate what it would cost the private sector to build.                                                                    
CHAIR TAYLOR said  there were about 30 more  witnesses to testify                                                               
and they would continue to work on this issue.                                                                                  
SB 65 was held in committee.                                                                                                    

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