Legislature(2003 - 2004)

03/13/2003 03:50 PM Senate STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                 SB  99-CORRECTIONAL FACILITIES                                                                             
CHAIR GARY STEVENS  announced this was the second  hearing for SB
99.  He  asked  Mr.  Wiebe  to  come  forward  and  continue  his                                                               
testimony from the previous hearing.                                                                                            
MR.  MARVIN  WIEBE,  Senior  Vice  President  Cornell  Companies,                                                               
recapped the company history in Alaska.                                                                                         
He addressed the following issues:                                                                                              
    · How a private company saves money for the state                                                                           
    · What the timing is for the project and what that means                                                                    
    · Level and quality of service                                                                                              
Cornell  Companies' wages  and benefits  are  competitive in  the                                                               
private sector, but less than  the government might pay. He said,                                                               
"Our programs  for our  employees, our health  care plans  and so                                                               
forth, match up extremely well  with what most Americans have for                                                               
their retirement programs, for their  health care benefits and so                                                               
forth." Government  benefit levels  are frequently  higher, which                                                               
provides an associated private sector savings.                                                                                  
Cornell  Companies would  train their  employees to  Alaska State                                                               
Standards   and   the   national  standards   of   the   American                                                               
Correctional  Association.  Employees   would  be  motivated  and                                                               
perform  to standard  or  they would  be  released from  service.                                                               
Sometimes  this is  criticized as  high turn  over, but  actually                                                               
their turn  over rate has  leveled off to  the point that  it's a                                                               
factor of weeding out unproductive  workers. The company does not                                                               
want  overtime and  they manage  their facilities  so they  don't                                                               
have  incidents  that require  overtime.  It  isn't part  of  the                                                               
compensation  package, which  brings  efficiency  to the  private                                                               
They   have  considerable   flexibility   in  construction   with                                                               
streamlined  methods   of  procurement.  Quite   simply,  private                                                               
operators put  up quality facilities  faster than  the government                                                               
and  speed   saves  money.  Cornell   Companies  expects   to  be                                                               
operational in Whittier in late  2005, which is rapid compared to                                                               
government projections.                                                                                                         
Government actually saves money  using the private sector because                                                               
the state  is indemnified against  any lawsuits that  result from                                                               
inmate staff  interaction. Also,  Cornell Companies  wouldn't ask                                                               
for a change in per diem  during the contract period whether they                                                               
were  operating  profitably  or  not.  Expenses  associated  with                                                               
escapes  are the  company's obligation  and they  would pay  even                                                               
though they don't budget for the same.                                                                                          
Cornell Companies is mature and  has few quality related problems                                                               
compared to  its early  years. The July  2002 Harvard  Law Review                                                               
Study is  an endorsement of  the potential of  private operators.                                                               
In addition to  saving money, the study finds  the private sector                                                               
is  able to  use  imagination and  creativity  to provide  better                                                               
service  and  to work  to  reduce  recidivism. Cornell  Companies                                                               
makes  that  commitment, which  is  why  they are  interested  in                                                               
teaming with Alaska Native groups.                                                                                              
He  cited  studies  that  indicated  there  are  savings  through                                                               
private operation. In the twenty  some years he has been involved                                                               
with private prisons  the industry has made great  strides to put                                                               
credibility  issues behind  them. They  are doing  an outstanding                                                               
job and will continue to do so for Alaska.                                                                                      
SENATOR LYMAN HOFFMAN asked how  many years Cornell Companies had                                                               
operated the Tundra Center.                                                                                                     
MR. WIEBE replied his company  has operated the Tundra Center for                                                               
5 years.                                                                                                                        
SENATOR  HOFFMAN asked  what the  inmates would  say about  their                                                               
MR. WIEBE admitted  he had not visited the Tundra  Center, but he                                                               
understands  the  Department  of Corrections  is  satisfied  with                                                               
their services, which is an improvement over previous service.                                                                  
SENATOR HOFFMAN  asked what Cornell Companies  had done regarding                                                               
alternative programming at the Tundra Center.                                                                                   
MR. WIEBE repeated he wasn't familiar with the Tundra Center.                                                                   
SENATOR HOFFMAN  asked why  the company  wasn't teaming  with the                                                               
Native community  at the Tundra Center  if they plan to  do so in                                                               
the proposed contract.                                                                                                          
MR. WIEBE wasn't able to answer the question.                                                                                   
SENATOR  HOFFMAN  asked  if  they  were  concerned  about  Native                                                               
programming because they hadn't secured the contract.                                                                           
MR. WIEBE repeated  he didn't know whether they were  or were not                                                               
teaming with the Native community at the Tundra Center.                                                                         
SENATOR HOFFMAN  asked, "If you  aren't doing that,  why wouldn't                                                               
you be doing  it if the corporation is concerned  as portrayed at                                                               
the last meeting?"                                                                                                              
CHAIR  GARY STEVENS  advised  anything that  is  in the  contract                                                               
could be  expected and it would  be interesting to find  out what                                                               
was in the Tundra Center contract.                                                                                              
SENATOR HOFFMAN  pointed out the previous  testimony indicated it                                                               
didn't matter whether it was put  in the contract or not, Cornell                                                               
Companies intended to  team with the Native  community to develop                                                               
appropriate programs.  He said they weren't  talking about adding                                                               
it to a contract. He asked, "Why aren't they doing it now?"                                                                     
CHAIR GARY STEVENS agreed that was their testimony.                                                                             
MR.  WIEBE  replied  he  understands   his  company  is  offering                                                               
Department of  Corrections funded, culturally  relevant, programs                                                               
at both  the Bethel and  Nome facilities. He  clearly understands                                                               
why  culturally relevant  programming  would be  included in  the                                                               
Whittier  proposal  because nearly  40  percent  of the  offender                                                               
population is  Alaska Native. In fact,  Alaska Natives approached                                                               
the  company  because  they  felt  their  access  to  the  public                                                               
facilities was  limited. This is  why the requirement  to provide                                                               
the services is written into the legislation.                                                                                   
SENATOR HOFFMAN asked which Native  groups he was working with in                                                               
MR.  WIEBE  said he  was  referring  to  the proposed  1,200  bed                                                               
project  in Whittier  where  they were  working  with the  Alaska                                                               
Native  Brotherhood  and  had spoken  with  Cook  Inlet  Regional                                                               
Corporation. They  also worked with the  Kenai Native Association                                                               
on a similar project on the Kenai Peninsula.                                                                                    
SENATOR HOFFMAN  said he understood  that, but he  was interested                                                               
in  reviewing  programs  the company  was  already  providing  to                                                               
determine how  the proposed  programs might  work. He  advised he                                                               
would be checking with inmates at the Bethel facility.                                                                          
MR. WIEBE  said he  would make  a point of  finding out  what his                                                               
company was doing in Bethel.                                                                                                    
SENATOR  HOFFMAN said  he could  judge the  projected program  by                                                               
reviewing past efforts.                                                                                                         
MR. WIEBE replied the point was  well taken, but he openly admits                                                               
they don't have  all the answers for programming.  There are lots                                                               
of programs that  work for certain offenders,  but they're always                                                               
looking  for programs  that might  work better.  Repeat offenders                                                               
are  admittedly  a source  of  frustration  and with  respect  to                                                               
alcoholism the  answer has yet  to been found.   Alcohol problems                                                               
are  not unusual  in the  Alaska Native  population and  it is  a                                                               
difficult  issue  to address.  Although  they  may not  have  the                                                               
answer, the  company has  made a commitment  to work  with Native                                                               
groups and move forward to make a difference.                                                                                   
SENATOR  HOFFMAN  repeated  his  need  to  know  more  about  the                                                               
commitment  made and  whether  it  has been  kept  at the  Tundra                                                               
MR. WIEBE replied  he was sure his company  started with whatever                                                               
existed in  the contract  when they  purchased the  facility from                                                               
the previous operator.                                                                                                          
SENATOR HOFFMAN noted that was five years ago.                                                                                  
MR.  WIEBE agreed  and said  they  have moved  forward from  that                                                               
point. Funding  for culturally  relevant programming  is provided                                                               
and  finding out  how  it's  being used  is  worthwhile for  both                                                               
CHAIR GARY STEVENS advised it's  a question for the Department of                                                               
Corrections as well.                                                                                                            
SENATOR DYSON  asked if testimony on  both SB 99 and  SB 65 would                                                               
be taken that day.                                                                                                              
CHAIR GARY  STEVENS replied the  bills would be  heard separately                                                               
and he  intended to move both  bills on to the  Finance Committee                                                               
that day if the committee  agreed. Some of the previous testimony                                                               
overlapped  and he  would try  to  give individuals  who had  not                                                               
testified at all the first opportunity to express their views.                                                                  
SENATOR  DYSON asked  about Native  support  regarding the  Kenai                                                               
prison proposal.                                                                                                                
MR.  WIEBE replied  they  had  lots of  Native  support for  that                                                               
SENATOR DYSON  remembered part of  their enthusiasm  stemmed from                                                               
the agreement  regarding culturally relevant programming  to help                                                               
the inmates make a successful transition back into society.                                                                     
MR. WIEBE agreed.                                                                                                               
SENATOR DYSON  asked how Cornell  Companies was doing  in hiring,                                                               
training and retaining local staff  at the Tundra Center. He knew                                                               
a  bidding  system  exists  at   some  state  run  facilities  so                                                               
employees with seniority get first  choice on job selection. This                                                               
sometimes means they  get higher paying jobs  in remote locations                                                               
thereby imposing a barrier to local hire.                                                                                       
MR. WIEBE said he would get that information.                                                                                   
There were no further questions for Mr. Wiebe.                                                                                  
MS.  DEE  HUBBARD,  Sterling,   Alaska  resident,  testified  via                                                               
teleconference and  advised she has been  working against private                                                               
prisons for the  last two years. She did not  support a privately                                                               
run prison at Whittier because:                                                                                                 
  · No Alaska Statutes govern the operation of private prisons                                                                  
   · No feasibility study is being done and she questions the                                                                   
     $94/inmate/day figure                                                                                                      
   · Lobbying costs would be paid for from the bond proceeds                                                                    
   · Beds must be paid for whether used or not                                                                                  
   · Training costs would be high with a 54 percent staff                                                                       
     turnover rate                                                                                                              
  · Required permits aren't discussed. Are they in the budget?                                                                  
   · More beds are planned than are discussed                                                                                   
She  asked why  the State  of Alaska  should build  a prison  for                                                               
Cornell Companies to operate.                                                                                                   
CHAIR GARY STEVENS thanked her for following the issue.                                                                         
MAKO  HAGGERTY,   private  citizen  from  Homer,   testified  via                                                               
teleconference  in opposition  to  SB 99.  A  private prison  was                                                               
voted down three to one on  the Kenai Peninsula. He believes it's                                                               
a state  obligation to incarcerate prisoners  and advised against                                                               
importing a failed system into Alaska.                                                                                          
SENATOR  DYSON  asked what  percentage  voted  against a  private                                                               
prison  as compared  to  the percentage  that  voted against  any                                                               
MR.  HAGGERTY  estimated 50  percent  of  the people  that  voted                                                               
against  the prison  probably voted  that way  because they  were                                                               
opposed to any prison.                                                                                                          
MR.  DAVID   KATZEEK  of  the  Thunderbird   Tribe  from  Klukwan                                                               
testified in support of SB  99 because it provides an opportunity                                                               
for his  people to use an  approach used for thousands  of years.                                                               
They  didn't have  prisons then  because they  were able  to work                                                               
things out as a people.                                                                                                         
He understands and agrees that  the State has a responsibility to                                                               
protect  its citizens  from offenders,  but at  the same  time it                                                               
must be able  to operate in a cost effective  manner. However, he                                                               
hasn't heard any discussion about  solving the very large problem                                                               
of recidivism. Within three years  time, sixty six percent of the                                                               
people released from prison return  to jail. This means something                                                               
is  wrong  and  Native  organizations and  communities  have  the                                                               
opportunity to work together to  solve the problem. "I believe we                                                               
as Native people have  a way to be able to  turn that around. And                                                               
I'll  finish  by saying  this.  I've  contributed  my time  to  a                                                               
program   that's  called   JEPP   [Juneau  Effective   Prevention                                                               
Project], which  deals with young  people that have  trouble with                                                             
alcohol  and drugs,  suggesting some  of our  traditional customs                                                               
and approach. I've  also worked with the University  of Alaska in                                                               
the same ways on  how do you interact with people.  To this day I                                                               
have not received  any kind of invitation from  the Department of                                                               
Corrections anywhere saying, 'Could we  sit down and talk and see                                                               
how we can resolve some of our problems?'"                                                                                      
There were no questions for Mr. Katzeek.                                                                                        
JIM LECRONE,  a retired Corrections  officer, testified  that the                                                               
first  priority in  a prison  is security.  All police  officers,                                                               
correctional  officers, and  probation officers  meet the  Alaska                                                               
Police  Standards, which  is expensive  and is  figured into  the                                                               
cost per day amount. If SB  99 is passed, he urged legislators to                                                               
require  Cornell Companies  to meet  those standards  modified to                                                               
fit the  private sector.  He fully  supports programs  that cater                                                               
specifically  to   the  Native   population,  but   said  Cornell                                                               
Companies  is not  the  only one  offering  such programming.  He                                                               
recalled several  state run programs of  that type when he  was a                                                               
corrections officer.                                                                                                            
SENATOR DYSON asked  if it was true that senior  officers bid for                                                               
and  get  remote jobs  thereby  precluding  local hire  in  small                                                               
MR. LECRONE  said there  is "a  contractual clause  that requires                                                               
first  consideration be  given  in transfers  to  the three  most                                                               
senior people." It  doesn't preclude new hires and  anyone from a                                                               
remote community who applies and is qualified would be eligible.                                                                
SENATOR DYSON asked  why the department had the week  on week off                                                               
MR. LECRONE opined it's cheaper for  the State to have an 84 hour                                                               
There were no further questions for Mr. Lecrone.                                                                                
MR. FRANK  SMITH said he has  32 years experience working  in the                                                               
criminal justice field. He advised  this is a $1 billion contract                                                               
and  in his  opinion the  community support  comes from  the idea                                                               
that  building the  prison would  result in  the Whittier  Tunnel                                                               
being  open   full  time  with   no  toll  charge.  This   was  a                                                               
misrepresentation and  now there is increasing  opposition to the                                                               
He said  there should  be a  fiscal note  for keeping  the tunnel                                                               
open the  projected number of  hours. Also,  consideration should                                                               
be given  regarding how  it would be  possible to  move prisoners                                                               
and staff in the event of  a tsunami warning. He asked members to                                                               
reexamine  the  bid  process  and  also  the  lawsuits  involving                                                               
private prisons. He thinks private  prisons are "a bad idea whose                                                               
time has passed."                                                                                                               
CHAIR GARY  STEVENS advised the  bill has fiscal notes  from both                                                               
the   Department   of   Corrections   and   the   Department   of                                                               
MR.  WILLIAM   DUNHAM,  Seward   resident  and   council  member,                                                               
testified  in  opposition to  SB  99.  Spring Creek  Correctional                                                               
Facility was  built by  the City  of Seward,  but they  were only                                                               
authorized  to   build  half  the   facility.  They   were  never                                                               
authorized to  build the second half  and the facility is  now 55                                                               
percent  over  capacity. Finishing  this  prison  has to  be  the                                                               
cheapest alternative and he would like to hear it discussed.                                                                    
GEORGE WRIGHT,  Juneau resident,  testified in  support of  SB 99                                                               
because "the  original concept  was to  keep Alaska  inmates from                                                               
going to Arizona."  At the Arizona facility the water  is bad and                                                               
Alaska  inmates  are  housed  with  and  preyed  upon  by  career                                                               
Under current regulations special  consideration must be received                                                               
to  allow  anyone  to visit  a  prison  if  he  or she  has  been                                                               
convicted of  a felony.  Because of alcohol  and or  drug related                                                               
issues,  this regulation  affects  visiting  opportunities for  a                                                               
great  number of  Natives. Private  prisons don't  have the  same                                                               
restrictions.  "Cornell  runs  half  way  houses  and  almost  50                                                               
percent of  their clients are  our people. And  they realized....                                                               
that we had to do something  to stop the revolving door." This is                                                               
a  five-year contract  with Cornell.  If they  don't perform  the                                                               
State doesn't have to renegotiate the contract.                                                                                 
4:45 pm                                                                                                                         
CHAIR GARY  STEVENS asked the  record to reflect  Senator Cowdery                                                               
joined the meeting.                                                                                                             
SENATOR  COWDERY apologized  for arriving  late and  said he  was                                                               
with the Governor.                                                                                                              
MR. BEN BUTLER, Whittier Council  member, testified in support of                                                               
SB 99  saying over 80  percent of  the town supports  the private                                                               
MR. LEONARD JONES  testified via teleconference in  support of SB
99. He  works in Whittier  and is a retired  corrections officer.                                                               
Alaska would benefit  from having its inmates back  in Alaska and                                                               
Whittier would like the economic benefit.                                                                                       
MR. BRAD WILSON,  Department of Public Safety  employee, made the                                                               
following points based on previous testimony:                                                                                   
   · 84 hours for corrections officers is straight time they                                                                    
     aren't paid overtime                                                                                                       
  · Sutton probably wouldn't vote in favor of a private prison                                                                  
   · A private, secret election in Whittier regarding the prison                                                                
     would be more definitive than petitions                                                                                    
   · Anchorage voted against a private prison but the Anchorage                                                                 
     Jail wasn't opposed                                                                                                        
   · Communities believe private prisons would save money, but                                                                  
     they still want professional corrections officers                                                                          
There was no further testimony on SB 99.                                                                                        
CHAIR  GARY STEVENS  announced  the matter  was  back before  the                                                               
committee  and  he  would  like  a motion  to  move  SB  99  from                                                               
SENATOR COWDERY made  a motion to move SB 99  from committee with                                                               
individual recommendations and attached fiscal notes.                                                                           
There being no objection, it was so ordered.                                                                                    

Document Name Date/Time Subjects