Prison feasibility study faces delay

Posted: Sunday, July 29, 2001

Hopes of gathering some hard data about the proposed 800- to 1,000-bed medium-security private prison hit a major snag last week.

Only one timely response -- submitted by Sikorski Consulting -- was received after the borough advertised a request for proposals to conduct a study of the prison's social, economic and financial impacts. However, that response was determined to be "deficient in a number of areas" by a five-member review committee.

"I can't really talk about the specifics because the solicitation is still open," said Jeff Sinz, borough finance director and a member of the review team. "I'm not at liberty to discuss the specifics until the contract is awarded."

Others on the team included borough attorney Colette Thompson, former Kenai City Manager Rick Ross, Soldotna City Manager Tom Boedeker and Jeanne Camp, a financial analyst for the borough.

Like Sinz, Merrill Sikorski, of Sikorski Consulting, chose not to comment on the review committee's decision.

According to Sinz, it is expected that the RFP will be advertised again the first part of August, with responses due between Aug. 15 and Aug. 29. Prior to re-advertising, the borough will ask the Institute for Social and Economic Research at the University of Alaska Anchorage to review the RFP.

"I think we're comfortable that the RFP is fine, but we just think as a precautionary measure we're going to request ISER take a look at the RFP and see if they have any suggestions about content," Sinz said.

In fact, he said, the borough had asked ISER if it would consider doing the study.

"When we first made the decision to do the feasibility study, they indicated some interest if it could be scheduled at a time that would work for them, considering their work load," he said. "Subsequent to that, we talked to them to see if they would consider doing it and indicated that we could be somewhat flexible in working with their flexibility, and they had thought it over and decided not to. I really couldn't tell you why, other than it just didn't fit into their work schedule. If there was anything more to it than that from their perspective, they didn't say."

ISER did, however, indicate that it would provide assistance in evaluating the RFP and the responses, Sinz said.

He said the borough also would be surveying plan holders that had chosen not to respond.

"We want to do everything we can to ensure that we get multiple competitive proposals," Sinz said.

Completion of a feasibility study is a requirement of the contract between the borough and Cornell Companies Inc., the team lead on Phase I -- planning and promotion -- of the proposed private prison project. According to the contract, approval and authorization to proceed beyond that point can come only after a feasibility study is "completed by an independent third party, selected and paid for by the borough."

As outlined in the RFP, the study should:

Test the prison's benefits for the borough;

Identify and quantify the project's positive and negative social and economic impacts; and

Assess the financial feasibility of the prison.

Bill Popp, borough assembly member from Kenai, expressed disappointment at the delay in identifying a party to complete the study prior to the Oct. 2 election, when borough voters will be faced with determining whether the borough should proceed with the project.

"It's a little frustrating to me that we won't be able to get at least some of the information that we were hoping to glean from the feasibility to the public," Popp said. He added that now voters "were left to the opposing points of view to get out their information as best they can."

Grace Merkes, borough assembly member from Sterling, has been a strong proponent of the feasibility study.

"I guess this is kind of a new thing for the borough, and I can see where we probably would have some problem on the request for proposal because we really haven't done this thing that I'm too aware of in recent years," Merkes said. "It's too bad that it's going out this late and that we're having problems with it, so that we don't have any report back at this time ... especially before the election. That's kind of a tough situation for everybody."

Pete Sprague, of Soldotna, was the single assembly vote against the contract with Cornell. He has consistently raised concerns about the prison project.

"I'm really disappointed," Sprague said. "I would have liked to see some information from the feasibility study prior to the municipal election in early October. It would have been very helpful for myself and the general public."

Borough Mayor Dale Bagley referred to Cornell and its subcontractors having "performed preliminary feasibility studies regarding the design, construction, and operation of an 800-bed medium security prison that meets industry and state Department of Corrections standards," in an April 10 letter to Sen. John Torgerson, R-Kasilof, and Reps. Ken Lancaster, R-Soldotna, and Drew Scalzi, R-Homer. The letter was in response to concerns about the project expressed by the three peninsula legislators.

"To further protect the borough, the assembly ... has required an independent feasibility study be conducted before the start of Phase II contract negotiations," Bagley assured the legislators.

On Saturday, Bagley said he had help writing the letter and didn't know what studies it was referring to.

However, Bagley said he assumed the studies it referenced were some done during an unsuccessful attempt to build the state's first private prison in the Delta Junction and Fort Greely area.

Mike Gilliland, Cornell's business development southwest coordinator who is currently working in the Kenai area, said Cornell has not conducted any feasibility studies relating to the prison that is proposed for the Kenai Peninsula.

"The one that the borough's going to do is the one scheduled to be done," Gilliland said.

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