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Senate rejects competitive bid process for proposed Kenai Peninsula prison

Posted: Wednesday, May 02, 2001

JUNEAU (AP) -- State senators rejected an amendment Tuesday that would have required a proposed Kenai Peninsula Borough prison to be put out to competitive bid, but removed a provision for escalation of payments for prisoners tied to a cost-of-living index.

House Bill 149 authorizes the Department of Corrections to enter into a lease agreement with the Kenai Peninsula Borough for an 800-bed, medium security private prison on the Kenai Peninsula. The borough has entered into a partnership with Corrections Group North to build and operate the prison. Corrections Group North includes Cornell Corrections Group, the Kenai Natives Association, Livingston Slone Inc., Neeser/VECO as well as lobbyists Joe Hayes and Kent Dawson.

Since 1995, the state has been housing up to 800 prisoners at a private prison in Arizona at a cost of nearly $19 million a year. Supporters of the private prison say it is important to bring Alaska prisoners home so they can be closer to their families and improve their chances for rehabilitation.

The state estimates it will cost approximately $8 million more per year to house prisoners in the Kenai Peninsula private prison than in Arizona.

Sen. John Torgerson, R-Kasilof, objected to the lack of competitive bidding on the project. Torgerson acknowledged that the borough conducted a competitive bid process, but only to pick a sole-source contractor for design and construction of the prison.

Torgerson said the cost is tabbed at approximately $700 million, but only through weakly worded intent language in the bill.

''From my understanding, there has been no discussion of what the actual cost is,'' he said.

''I do support this prison, but only if it's a good business deal, and not for the operator, but for the state of Alaska,'' Torgerson said.

He said the state should not be overzealous to turn state jobs to the private sector.

''Let's not be driven to making bad decisions,'' Torgerson said. ''Let's set the terms of the contract and then allow the competitive bid process go forth.''

But Sen. Jerry Ward, R-Anchorage, said the project was no different than a new jail project approved for Anchorage last year.

''We need to defeat this amendment and bring those prisoners back, and it's as simple as that,'' Ward said.

Senators defeated Torgerson's amendment 13-7. Torgerson, Sens. Johnny Ellis, D-Anchorage, Kim Elton, D-Juneau, Donny Olson, D-Nome, Drue Pearce, R-Anchorage, Randy Phillips, R-Eagle River, and Gene Therriault, R-North Pole, voted yes.

An amendment by Ellis taking out the provision boosting payments to the prison based on a cost-of-living index was approved 12-8. Therriault said automatic escalators puts budget decisions ''on autopilot.''

''We're giving away our yearly job,'' he said.

A vote on the entire bill is scheduled for Wednesday.



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