Prison finances bedevil Alaska lawmakers

Posted: Monday, March 21, 2011

JUNEAU — Alaska’s new medium-security Goose Creek Correctional Center, initially billed as a way to save the state money compared to shipping prisoners out of state, is in danger of being mothballed more than a year before it is scheduled to open.

Alaska lawmakers are raising concerns after being informed it will cost the state $71 million annually to operate the facility, 31/2 times the cost Alaska now pays to outsource its inmates to a private prison in Colorado.

“It wasn’t supposed to be a financial debacle,” said Sen. Hollis French, an Anchorage Democrat and member of the Senate corrections subcommittee.

The new facility has lawmakers in a dither, with some requesting an audit of the projected operations budget. Others say the prison, with a capacity of 1,536 inmates scheduled to open in June 2012, should be left vacant or turned over to the private sector.

Lawmakers have also raised questions about the cost of utilities and road improvement for the prison, including the construction of a water treatment plant solely for the prison, necessitated by the institution’s remote location.

Corrections officials argue that they have kept the Legislature informed of the prisons costs and operating fees as construction progressed, and that the prison is within its mandated budget.

At a February budget hearing, Senate Finance Committee co-chairman Bert Stedman raised the alarm about the prison’s costs.

“It’s a pretty heart-stopping budgetary impact” and an unexpected one at that, said Stedman, who has called for an audit on the facility to be completed by next January. “I don’t know if I would open the prison.”

The Senate corrections subcommittee last Thursday recommended that Corrections not receive $3.6 million in 2012 to begin preliminary operations of the prison, though the same committee in the House has allocated the money, leaving next year’s funding far from finalized.

The state has two other medium security prisons — one in Palmer and another near Kenai — but Goose Creek would be the state’s largest and is projected to create 347 jobs, Corrections Commissioner Joe Schmidt said.

“A dollar used here rotates through the economy seven times,” said Rep. Mark Neuman, whose Big Lake district is near the new prison. Neuman said he supports an audit of the facility, but did not find the prison’s costs troubling.

According to documents released by the corrections department, the prison’s per bed cost is under the limit mandated by the Legislature when it authorized the prison.

Though the prison’s predicted operating cost is not far off from the cost estimates when the prison was approved in 2004, French said the approved project was a much larger and more expensive 2,251 bed facility that was eventually downsized.

Schmidt said the per-bed cost for the prison is normal for an institution of Goose Creek’s size and level of security.

Even if the facility never houses a prisoner, it will still cost the state money — about $22.5 million to heat and secure the institution and cover lease payments, according to Leslie Houston, director of Administrative Services for the Department of Corrections. And the state also would have to continue paying the housing and transport costs of the prisoners in Colorado.

The prison’s costs include yearly $17.8 million payments on bond debt service, this for 22 years, according to Deven Mitchell, debt manager for the state.

Rep. Wes Keller, R-Wasilla, proposed a different approach for dealing with the prison: privatize it.

“We may not break even on those costs for a private operation but it will certainly be cheaper than $22.5-million for nothing,” Keller said in a statement.

Since no other prison in Alaska is privately run, Houston said it would be difficult to know for certain the cost savings of privatization, but estimated savings could be around $6.5 million.

If Goose Creek doesn’t open, the state would be left scrounging for space for prisoners, according to Carmen Gutierrez, deputy commissioner for prisoner rehabilitation and re-entry, which would include sending offenders to Colorado.

“Without Goose Creek, we literally do not have bed space for prisoners,” she said.

Furthermore, Gutierrez said, keeping the prisoners in Colorado would be detrimental to the goal of reducing the state’s recidivism rate, which hovers around 66 percent.

“People are going to be more successful upon release when they’re kept near their family. When you’ve got almost a third of your incarcerated population housed out of state, it makes it hard to secure housing, sober living and community reintegration.”

Initially, officials struggled in trying to find a location for the prison before settling on land that the Matanuska-Susitna Borough said it would donate.

The site remote Port Mackenzie came with its own problems. Tests showed the groundwater near the site was contaminated with arsenic and salt, and a $23 million water treatment plant had to be built to supply the building, Houston said.

In a letter to the finance committee, Schmidt said the remoteness of the prison means there are no other residences that would be served by the water treatment facility.

However, Schmidt wrote that expansions in the road and rail system in the area will hopefully lead to increased development and the eventual conversion of the treatment plant to a public utility.

Sen. Johnny Ellis, D-Anchorage, believes opening the prison is the most viable option, but advocates a shift in state focus away from prison construction and toward increased rehabilitation and substance abuse treatment programs.

“I think we can do a better job with mental health and substance abuse treatment,” Ellis said. “We cannot afford another Goose Creek.”

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