Legislature(2015 - 2016)Anch LIO AUDITORIUM

09/10/2015 09:00 AM LEGISLATIVE BUDGET & AUDIT

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Audio Topic
09:04:26 AM Start
09:05:56 AM Approval of Minutes
09:08:19 AM Executive Session
11:54:58 AM Release of Audits
11:56:09 AM Procurements
11:59:23 AM Enalytica Contract Novation
12:09:43 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
EXECUTIVE SESSION: Procurement
- Division of Legislative Audit Anchorage Lease
- IRIS Audit Solicitation
- Performance Review - Dept. of Education & Early
Development, Alaska Commission on Postsecondary
Education
- Medicaid Reform and Expansion Consultant
EXECUTIVE SESSION: Audits
Final Reports: Board of Parole (sunset)
Preliminary Reports:
- Alaska Pioneer Homes
- Alaska Agricultural & Fisheries Products
Preference
- Commercial Fisheries Entry Commission
- Citizens' Advisory Commission on Federal Areas
- Real Estate Commission (sunset)
+ PUBLIC SESSION: TELECONFERENCED
Enalytica Contract Novation
Other Committee Business
-- Testimony <Invitation Only> --
**Streamed live on AKL.tv**
**Streaming available in JNU in TS Bldg Rm 105**
                    ALASKA STATE LEGISLATURE                                                                                  
             LEGISLATIVE BUDGET AND AUDIT COMMITTEE                                                                           
                       Anchorage, Alaska                                                                                        
                       September 10, 2015                                                                                       
                           9:04 a.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Mike Hawker, Chair                                                                                               
Senator Anna MacKinnon, Vice Chair                                                                                              
Representative Kurt Olson                                                                                                       
Representative Lance Pruitt                                                                                                     
Representative Steve Thompson                                                                                                   
Representative Sam Kito                                                                                                         
Senator Lyman Hoffman                                                                                                           
Senator Cathy Giessel                                                                                                           
Senator Bert Stedman (via teleconference)                                                                                       
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Click Bishop                                                                                                            
Representative Mark Neuman (alternate)                                                                                          
Senator Pete Kelly (alternate)                                                                                                  
                                                                                                                                
OTHER LEGISLATORS PRESENT                                                                                                     
                                                                                                                                
Representative Louise Stutes                                                                                                    
Representative Geran Tarr (via teleconference)                                                                                  
Representative Andy Josephson                                                                                                   
Representative Liz Vazquez                                                                                                      
Representative Chris Tuck (via teleconference)                                                                                  
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
APPROVAL OF MINUTES                                                                                                             
EXECUTIVE SESSION                                                                                                               
RELEASE OF AUDITS                                                                                                               
PROCUREMENTS                                                                                                                    
ENALYTICA CONTRACT NOVATION                                                                                                     
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
RENA DELBRIDGE, Staff                                                                                                           
Representative Mike Hawker                                                                                                      
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  On behalf  of Representative Hawker as chair                                                             
of  the Legislative  Budget and  Audit  Committee, explained  the                                                               
proposed  Enalytica, Inc.,  contract novation,  and responded  to                                                               
questions.                                                                                                                      
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
9:04:26 AM                                                                                                                    
                                                                                                                                
CHAIR  MIKE  HAWKER  called  the  Legislative  Budget  and  Audit                                                             
Committee meeting to order at  9:04 a.m.  Representatives Hawker,                                                               
Kito,  Olson, and  Pruitt, and  Senators MacKinnon,  Stedman (via                                                               
teleconference), Giessel,  and Hoffman were  present at  the call                                                               
to order.  Representative Thompson  arrived as the meeting was in                                                               
progress.   Representatives  Stutes,  Tarr (via  teleconference),                                                               
Josephson, Vasquez,  and Tuck (via  teleconference) were  also in                                                               
attendance.                                                                                                                     
                                                                                                                                
^APPROVAL OF MINUTES                                                                                                            
                      APPROVAL OF MINUTES                                                                                   
                                                                                                                                
9:05:56 AM                                                                                                                    
                                                                                                                                
CHAIR HAWKER announced that the  first order of business would be                                                               
the approval of the minutes.                                                                                                    
                                                                                                                                
9:06:08 AM                                                                                                                    
                                                                                                                                
SENATOR MACKINNON made  a motion to approve the  minutes from the                                                               
meeting of June 23, 2015.                                                                                                       
                                                                                                                                
CHAIR  HAWKER  objected; ascertained  that  there  were no  other                                                               
objections; and  announced that the  minutes from the  meeting of                                                               
June 23, 2015, were approved.                                                                                                   
                                                                                                                                
9:06:45 AM                                                                                                                    
                                                                                                                                
SENATOR MACKINNON made  a motion to approve the  minutes from the                                                               
meeting of July 22, 2015.                                                                                                       
                                                                                                                                
CHAIR HAWKER objected.                                                                                                          
                                                                                                                                
SENATOR MACKINNON  made a motion to  delete from page 5  the word                                                               
"of"  in  the first  line  of  text  following the  "9:53:10  AM"                                                               
timestamp [thereby  fixing a typographical  error]; and  to [fix]                                                               
on page 7 the quote in  the paragraph following the "10:00:13 AM"                                                               
timestamp to  more accurately reflect the  relationship indicated                                                               
by  the  speaker between  increases  in  certain populations  and                                                               
[decreases  in   assessment  performances].     There   being  no                                                               
objection, it was so ordered.                                                                                                   
                                                                                                                                
CHAIR HAWKER -  regarding the motion to approve  the minutes from                                                               
the meeting  of July, 22, 2015  - ascertained that there  were no                                                               
objections  to   approving  those   minutes  as   corrected,  and                                                               
announced therefore  that the corrected minutes  from the meeting                                                               
of July 22, 2015, were approved.                                                                                                
                                                                                                                                
^EXECUTIVE SESSION                                                                                                              
                       EXECUTIVE SESSION                                                                                    
                                                                                                                                
9:08:19 AM                                                                                                                    
                                                                                                                                
CHAIR  HAWKER announced  that the  committee would  next go  into                                                               
executive session.                                                                                                              
                                                                                                                                
9:08:37 AM                                                                                                                    
                                                                                                                                
SENATOR  MACKINNON made  a motion  to move  to executive  session                                                               
under  Uniform  Rules  22(b)(1)  and   (3)  for  the  purpose  of                                                               
discussing  matters  which  the   immediate  knowledge  of  would                                                               
adversely affect  the finances of  government unit,  [and matters                                                               
that may  by law  be required  to be  confidential]; and  for the                                                               
purpose   of   discussing   confidential  audit   reports   under                                                               
AS 24.20.301.  There being no  objection, the committee went into                                                               
executive session at 9:09 a.m.                                                                                                  
                                                                                                                                
CHAIR HAWKER  brought the committee  back to order at  11:54 a.m.                                                               
Present at  the call back  to order were  Representatives Hawker,                                                               
Kito, Olson,  and Thompson, and Senators  MacKinnon, Giessel, and                                                               
Hoffman.                                                                                                                        
                                                                                                                                
^RELEASE OF AUDITS                                                                                                              
                       RELEASE OF AUDITS                                                                                    
                                                                                                                                
11:54:58 AM                                                                                                                   
                                                                                                                                
CHAIR HAWKER announced  that the next order of  business would be                                                               
the release of audit reports.                                                                                                   
                                                                                                                                
11:55:07 AM                                                                                                                   
                                                                                                                                
SENATOR  MACKINNON  made a  motion  for  the final  audit  report                                                               
regarding the State Board of  Parole sunset review to be released                                                               
to the public.  There being no objection, it was so ordered.                                                                    
                                                                                                                                
11:55:30 AM                                                                                                                   
                                                                                                                                
SENATOR  MACKINNON  made  a  motion  for  the  preliminary  audit                                                               
reports  regarding  the Division  of  Alaska  Pioneer Homes;  the                                                               
Alaska  Agricultural and  Fisheries  Products  Preference Use  by                                                               
State  Entities;   the  Commercial  Fisheries   Entry  Commission                                                               
(CFEC); the  Citizen's Advisory Commission on  Federal Areas; and                                                               
the Real  Estate Commission sunset  review to be released  to the                                                               
appropriate agencies for response.   There being no objection, it                                                               
was so ordered.                                                                                                                 
                                                                                                                                
^PROCUREMENTS                                                                                                                   
                          PROCUREMENTS                                                                                      
                                                                                                                                
11:56:09 AM                                                                                                                   
                                                                                                                                
CHAIR HAWKER announced  that the next order of  business would be                                                               
procurements.                                                                                                                   
                                                                                                                                
11:56:15 AM                                                                                                                   
                                                                                                                                
SENATOR MACKINNON made a motion  that the committee authorize the                                                               
legislative  auditor  to  extend   the  Division  of  Legislative                                                               
Audit's Anchorage's  office-space lease under AS  36.30.080 for a                                                               
total lease extension  of up to 10 years in  the amount of $4,453                                                               
per month  for the  first year with  annual Consumer  Price Index                                                               
(CPI) adjustments each additional year beginning July 2017.                                                                     
                                                                                                                                
CHAIR  HAWKER  objected;  clarified that  the  correct  statutory                                                               
reference  for  that motion  is  AS  36.30.083; ascertained  that                                                               
there were  no other  objections; and  indicated that  the motion                                                               
[as corrected] passed.                                                                                                          
                                                                                                                                
11:57:15 AM                                                                                                                   
                                                                                                                                
SENATOR MACKINNON made a motion  that the committee authorize the                                                               
legislative  auditor  to  solicit  for  specialized  information-                                                               
technology  expertise  to  review   the  State  of  Alaska's  new                                                               
Integrated Resource Information System (IRIS).                                                                                  
                                                                                                                                
CHAIR  HAWKER objected;  explained that  [if passed,]  the motion                                                               
authorizes the  solicitation of [specialized expertise],  not the                                                               
awarding  of   [a  contract]  as  that   would  require  specific                                                               
committee  approval;   ascertained  that  there  were   no  other                                                               
objections; and announced that the motion passed.                                                                               
                                                                                                                                
11:58:00 AM                                                                                                                   
                                                                                                                                
SENATOR MACKINNON made a motion  that the committee authorize the                                                               
legislative  auditor  to solicit  and  award  a contract  for  an                                                               
amount not  to exceed  $215,000 for a  performance review  of the                                                               
Alaska  Commission  on  Postsecondary Education  and  the  Alaska                                                               
Student Loan  Corporation.  There  being no objection, it  was so                                                               
ordered.                                                                                                                        
                                                                                                                                
11:58:36 AM                                                                                                                   
                                                                                                                                
SENATOR MACKINNON made  a motion that the  Legislative Budget and                                                               
Audit Committee authorize the chair,  as the procurement officer,                                                               
to  enter into  a contract  with The  Menges Group,  the apparent                                                               
winner of  the Medicaid Reform and  Expansion Consultant [request                                                               
for  proposals  (RFP)], in  an  amount  not to  exceed  $350,000.                                                               
There being no objection, it was so ordered.                                                                                    
                                                                                                                                
^ENALYTICA CONTRACT NOVATION                                                                                                    
                  ENALYTICA CONTRACT NOVATION                                                                               
                                                                                                                                
11:59:23 AM                                                                                                                   
                                                                                                                                
CHAIR HAWKER announced that the  final order of business would be                                                               
a proposed contract novation involving Enalytica, Inc.                                                                          
                                                                                                                                
11:59:45 AM                                                                                                                   
                                                                                                                                
RENA DELBRIDGE,  Staff, Representative Mike Hawker,  Alaska State                                                               
Legislature, on behalf  of Representative Hawker as  chair of the                                                               
Legislative  Budget and  Audit  Committee,  explained that  Janak                                                               
Mayer  and Nikolaos  Tsafos -  who  individually hold  consulting                                                               
contracts  with   the  Alaska   State  Legislature   through  the                                                               
Legislative  Budget and  Audit Committee  to provide  information                                                               
about oil and gas taxation/fiscal  issues and a liquefied natural                                                               
gas (LNG) project - have  formed the company Enalytica, Inc., and                                                               
are therefore seeking novation of  their two individual contracts                                                               
such that  their new  company would stand  as the  single obligor                                                               
under a  single contract.   All  rights and  responsibilities set                                                               
forth  in the  two individual  contracts would  shift to  the new                                                               
company,  with  the only  material  changes  being that  the  new                                                               
single contract would  reference the one company  rather than the                                                               
two  individuals;  there  would  be  only  one  maximum  contract                                                               
amount, payable to the company,  rather than two separate maximum                                                               
amounts payable to the individuals,  and that single amount would                                                               
not exceed the  two individual amounts combined; and  the name of                                                               
Laura Pierre  [as project  manager] would be  changed to  that of                                                               
Rena Delbridge.  If the  proposed contract novation is agreed to,                                                               
Mr. Mayer and  Mr. Tsafos would still be performing  all the work                                                               
they individually agreed to perform,  and for the same price, but                                                               
they would be performing it under the name of the new company.                                                                  
                                                                                                                                
MS. DELBRIDGE,  in response to questions  and comments, confirmed                                                               
that there  would be  no change  in what was  referred to  as the                                                               
"economic  substance of  the contract,  the relationship  between                                                               
the [State of  Alaska] and these contractors";  that the contract                                                               
novation   would  result   in  Enalytica,   Inc.,  becoming   the                                                               
contracting  party  in   place  of  Mr.  Mayer   and  Mr.  Tsafos                                                               
individually;  that legal  counsel  has been  engaged to  address                                                               
details of the  proposed contract novation; that  under the terms                                                               
of  the new  contract Mr.  Mayer and  Mr. Tsafos  would still  be                                                               
contractually bound to perform all  the work promised under their                                                               
individual contracts; and  that the new contract  would expire on                                                               
the  same   date  as  those  individual   contracts,  that  being                                                               
January 31, 2016.                                                                                                               
                                                                                                                                
12:06:07 PM                                                                                                                   
                                                                                                                                
SENATOR MACKINNON  [made a  motion that]  the committee  agree to                                                               
the  novation  [of] and  related  amendments  [to] the  contracts                                                               
between  the Legislative  Budget  and Audit  Committee and  Janak                                                               
Mayer,  and between  the Legislative  Budget and  Audit Committee                                                               
and Nikolaos Tsafos,  both dated January 19,  2015; and authorize                                                               
the chair of the Legislative  Budget and Audit Committee to enter                                                               
into  a novation  agreement between  the  Legislative Budget  and                                                               
Audit    Committee,   Janak    Mayer,   Nikolaos    Tsafos,   and                                                               
Enalytica, Inc.                                                                                                                 
                                                                                                                                
SENATOR MACKINNON added that the  novation is considered to be in                                                               
the best interest  of the Legislative Budget  and Audit Committee                                                               
and  will be  in accordance  with  Section 160(b)  of the  Alaska                                                               
Legislative Procurement Procedures.                                                                                             
                                                                                                                                
CHAIR HAWKER  ascertained that there  were no objections  to [the                                                               
motion], and indicated that [the motion] passed.                                                                                
                                                                                                                                
12:07:13 PM                                                                                                                   
                                                                                                                                
CHAIR HAWKER - prior to adjourning  the meeting - relayed that at                                                               
some point  the committee would be  addressing performance-review                                                               
reports regarding  the Department  of Health and  Social Services                                                               
(DHSS), and  reports from the  Department of Education  and Early                                                               
Development  (EED) and  the  Department  of Administration  (DOA)                                                               
required    under   the    28th   Alaska    State   Legislature's                                                               
House Bill 278; that  on September 25, 2015,  the committee would                                                               
be  [hosting]  an all-day  seminar  regarding  gasline issues  in                                                               
anticipation  of a  possible upcoming  special session;  and that                                                               
Enalytica, Inc., would be presenting at that seminar.                                                                           
                                                                                                                                
12:09:43 PM                                                                                                                   
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There  being  no  further  business  before  the  committee,  the                                                               
Legislative Budget  and Audit Committee meeting  was adjourned at                                                               
12:09 p.m.                                                                                                                      

Document Name Date/Time Subjects
Agenda_LBA_10Sept15_updated.pdf JBUD 9/10/2015 9:00:00 AM