Legislature(2015 - 2016)ANCH LIO AUDITORIUM


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Audio Topic
10:03:04 AM Start
11:01:12 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Ratification of Charitable Events: TELECONFERENCED
- 24th Annual Coal Classic Golf Tournament
Contract Approvals:
- 2016 Annual IT Hardware Refresh
- 2017 Microsoft Enterprise Agreement Renewal
- Stoel Rives Contract Amendment
Other Committee Business:
- Update on Wells Fargo Building
- Update on 716 W. 4th Avenue Building
- Update on Patterson vs. Walker Litigation
                     ALASKA STATE LEGISLATURE                                                                                 
                       LEGISLATIVE COUNCIL                                                                                    
                         AUGUST 03, 2016                                                                                      
                             10:05 AM                                                                                         
     MEMBERS PRESENT                                                                                                          
     Senator Gary Stevens, Chair                                                                                                
     Senator Anna MacKinnon                                                                                                     
     Senator Cathy Giessel, alternate                                                                                           
     Representative Craig Johnson                                                                                               
     Representative Sam Kito                                                                                                    
     MEMBERS PRESENT ON TELECONFERENCE                                                                                        
     Senator John Coghill                                                                                                       
     Senator Lyman Hoffman                                                                                                      
     Senator Charlie Huggins                                                                                                    
     Senator Kevin Meyer                                                                                                        
     Senator Peter Micciche                                                                                                     
     Representative Mike Chenault                                                                                               
     Representative Charisse Millett                                                                                            
     Representative Steve Thompson, alternate                                                                                   
     MEMBERS ABSENT                                                                                                           
     Senator Liesel McGuire, alternate                                                                                          
     Representative Bob Herron, Vice Chair                                                                                      
     Representative Mike Hawker                                                                                                 
     Representative Mark Neuman                                                                                                 
     Representative Harriet Drummond, alternate                                                                                 
     APPROVAL OF AGENDA                                                                                                         
     APPROVAL OF MINUTES                                                                                                        
     RATIFICATION OF CHARITY EVENTS                                                                                             
     CONTRACT APPROVALS                                                                                                         
     OTHER COMMITTEE BUSINESS                                                                                                   
     SPEAKER REGISTER                                                                                                         
     Curtis Clothier, Information Services Manager, Legislative                                                                 
        Affairs Agency                                                                                                          
     Doug Gardner, Director of Legal Services, Legislative                                                                      
        Affairs Agency                                                                                                          
     Pam Varni, Executive Director, Legislative Affairs Agency                                                                  
      10:03:04 AM                                                                                                             
  I. CHAIR GARY STEVENS called the Legislative Council meeting                                                                
      to  order  at  10:05 a.m.  in  the  Anchorage  Legislative                                                                
      Information Office  Auditorium. Present at the  call were                                                                 
      Senators Stevens, MacKinnon, and Giessel, alternate member;                                                               
      Representatives  Johnson  and   Kito.  Participating  via                                                                 
      teleconference  were  Senators  Hoffman, Huggins,  Meyer,                                                                 
      Micciche;  Representatives  Chenault, Millett,  Thompson,                                                                 
      alternate member. Senator  McGuire, alternate member, and                                                                 
      Representatives Hawker and Neuman were absent.                                                                            
 II. APPROVAL OF AGENDA                                                                                                       
      10:04:12 AM                                                                                                             
      SPEAKER CHENAULT moved that Legislative Council approve the                                                               
      The agenda was approved without objection.                                                                                
III. APPROVAL OF MINUTES                                                                                                      
      a. December 19, 2015                                                                                                    
      b. February 11, 2016                                                                                                    
      c. March 31, 2016                                                                                                       
      d. April 14, 2016                                                                                                       
      10:04:33 AM                                                                                                             
      SPEAKER CHENAULT moved that Legislative Council approve the                                                               
      minutes of the December 19, 2015, February 11, 2016, March                                                                
      31, 2016 and April 14, 2016 meetings as presented.                                                                        
      The minutes were approved without objection.                                                                              
 IV. RATIFICATION OF CHARITABLE EVENT                                                                                         
      a. 24th Annual Coal Classic Golf Tournament                                                                             
      10:05:08 AM                                                                                                             
      SPEAKER CHENAULT moved that Legislative Council ratify the                                                                
      Chair's sanctioning of the following charitable event per                                                                 
      AS  24.60.080(a)(2)(B): 24th  Annual  Coal  Classic  Golf                                                                 
      The event was ratified without objection.                                                                                 
 V. CONTRACT APPROVALS                                                                                                        
     a. 2016 Annual IT Hardware Refresh                                                                                       
     b. 2017 Microsoft Enterprise Agreement Renewal                                                                           
     c. Stoel Rives Contract Amendment                                                                                        
     a. 2016 Annual IT Hardware Refresh                                                                                       
     10:05:52 AM                                                                                                              
     SPEAKER CHENAULT moved that Legislative Council approve the                                                                
     solicitation, award and expenditures not to exceed $132,000                                                                
     for  computer upgrades  from  Legislative Council capital                                                                  
   CHAIR STEVENS objected for the purposes of discussion.                                                                       
     CURTIS   CLOTHIER,   Information  Services  Manager   for                                                                  
     Legislative    Affairs     Agency    participating    via                                                                  
     teleconference, said  that  the hardware  refresh happens                                                                  
     annually in order to  replace aging computers and printers                                                                 
     in  legislative offices. This year's request will replace                                                                  
     computers purchased in 2010 and laptops that were purchased                                                                
     in  2009, which  exceeds generally  acceptable refresh of                                                                  
     computer hardware. The IT Subcommittee met, discussed these                                                                
     items and agreed to make this recommendation to Legislative                                                                
     Council, based on the cost to  upgrade, keep the equipment                                                                 
     going,  and  the  performance, as  well  as  meeting  the                                                                  
     Legislature's 3-Year Technology Plan.                                                                                      
     SENATOR GIESSEL asked why the Legislature was continuing to                                                                
     invest  in huge  desktop computers  when laptops were  so                                                                  
     readily portable and wouldn't need to be shipped to Juneau                                                                 
     each  session, staff  and Legislators could  simply carry                                                                  
     MR. CLOTHIER said he personally agreed. The IT Subcommittee                                                                
     ordinarily does a survey of  all the offices to get their                                                                  
     preference for a replacement - either a laptop or a desktop                                                                
     computer. Consistently, it has  been approximately 66% in                                                                  
     favor of  desktop computers over laptops. The laptops cost                                                                 
     more than  the desktops, but he agreed that they are much                                                                  
     more  portable; however, even  for those offices  that do                                                                  
     choose laptops, they prefer to ship them, so there wouldn't                                                                
     be  much  savings on  shipping. The IT  Subcommittee does                                                                  
     encourage  offices  to  use  laptops,  but  the  standing                                                                  
     preference has been for desktops.                                                                                          
     SENATOR GIESSEL said she was concerned about continuing to                                                                 
     invest in something that wasn't affordable and not the best                                                                
     long-term option for the budget.                                                                                           
      CHAIR  STEVENS noted  for  members that  there is  an  IT                                                                 
      Subcommittee and refer this issue to them to study further.                                                               
      REPRESENTATIVE KITO said his  experience is that desktops                                                                 
      are  less  expensive  per  unit  and  the  challenge  the                                                                 
      Legislature has is moving them from location to location.                                                                 
      He said he had heard that it might be worth the investment                                                                
      to  have computers in both locations; although that meant                                                                 
      maintaining a much larger pool of computers. He offered to                                                                
      sit down  with the IT Subcommittee to figure out the most                                                                 
      efficient way to do the computer refresh.                                                                                 
      REPRESENTATIVE JOHNSON said  it appeared  that we  get an                                                                 
      extra year out of the laptops and asked if the longevity of                                                               
      the  laptop was  longer. He said  he agreed  with Senator                                                                 
      Giessel that it made more sense to make that move.                                                                        
      MR. CLOTHIER responded that he wasn't sure that laptops had                                                               
      more longevity and might be more a factor that laptop users                                                               
      always have their computers with them and resist replacing                                                                
      them  until absolutely necessary. He said  we haven't had                                                                 
      more problems with laptops despite the fact that they are                                                                 
      used while  traveling and probably get bumped more often,                                                                 
      left in cars, etc. He said there have been no issues that                                                                 
      laptops  are  more  fragile.  In  response to  Rep.  Kito                                                                 
      mentioning having computers in many  locations, it is not                                                                 
      economically feasible because  of the  licensing cost and                                                                 
      additional  hardware to  upkeep.  Laptops do  solve  that                                                                 
      problem  as  they  could travel  with  the  Legislator or                                                                 
      staffer. He said the IT Subcommittee would be a great place                                                               
   to address this issue, as suggested by Chair Stevens.                                                                        
      REPRESENTATIVE JOHNSON  said Legislative Council has  had                                                                 
      this discussion over the last six years and every time it                                                                 
      was suggested to take  it to the IT Subcommittee. He said                                                                 
      perhaps as  Chairman, some direction  from this committee                                                                 
      might be appropriate. He said Legislative Council has sent                                                                
      it back to the IT Subcommittee two or three times.                                                                        
      CHAIR STEVENS asked Ms. Varni and Mr. Clothier to get the                                                                 
      IT  Subcommittee together and fully vet this issue before                                                                 
      the end of his time as Chair, and it would be nice to have                                                                
      it done before this calendar year.                                                                                        
      SENATOR  MICCICHE  asked  if  Legislators would  see  any                                                                 
      operational difference on their monitors between a desktop                                                                
      and a laptop.                                                                                                             
     MR.  CLOTHIER  confirmed that  performance is  quick  and                                                                  
     responsive; and there's no difference to the users between                                                                 
     a laptop and a desktop computer. Monitors can be used with                                                                 
     laptops to give users a better screen size to work with.                                                                   
     SENATOR COGHILL noted that he joined the meeting.                                                                          
     SENATOR MACKINNON asked  the Chair if he  was planning to                                                                  
     advance this  particular item for appropriation or set it                                                                  
     aside so that we have the urgency to the issue.                                                                            
     MR. CLOTHIER, in response to a question by Chair Stevens,                                                                  
     said that we'd like to move ahead with this as quickly as                                                                  
     possible.  It will  take  another 30-45  days  before the                                                                  
     equipment  arrives after  ordering  and  staff can  begin                                                                  
     upgrades to legislative computers prior to the session. If                                                                 
     it is  put off, it will put us behind schedule. Obviously,                                                                 
     with the  Capitol under construction and legislative moves                                                                 
     going  on,  it will  be  another item.  He  said, if  the                                                                  
     committee  would like,  we  can modify  this  proposal to                                                                  
     increase  the number  of laptops  as a  stop-gap measure,                                                                  
     encourage people to go with them. Laptops are a little more                                                                
     expensive, and  we could  decrease the number  of desktop                                                                  
     computers and  increase the price  of the  recommendation.                                                                 
     Short of that, he encouraged the committee to move forward                                                                 
     with  this and look  at getting more  laptops during next                                                                  
     year's cycle.                                                                                                              
     SENATOR MACKINNON said that  while she didn't know enough                                                                  
     about   this  issue,   and  addressing  her   comment  to                                                                  
     Representative Johnson since  he noted  this has  been an                                                                  
     ongoing issue that had not been resolved, she didn't want                                                                  
     to purchase more desktops that we would then have for the                                                                  
     next five or six years.                                                                                                    
     REPRESENTATIVE JOHNSON said  that he agreed this  was the                                                                  
     ideal time to make the transition.                                                                                         
     SENATOR MACKINNON asked how many computers the Legislature                                                                 
     owned, and if we were going to make this transition, did we                                                                
     want to make sure we had at least one good working computer                                                                
     in  every legislative  office so  that the  transition is                                                                  
     smooth  in  that regard.  She  asked about  the cycle  of                                                                  
     replacement; for instance if 75 was a third of the desktop                                                                 
     computers owned by the Legislature.                                                                                        
     MR.  CLOTHIER responded that they endeavor to replace one                                                                  
     quarter of the legislative computers ever year. It's a four                                                                
     year cycle, give or take a few years, depending on whether                                                                 
      the  computer is in a  remote location. In  response to a                                                                 
      follow-up question by Chair Stevens, Mr. Clothier said that                                                               
      when the IT Subcommittee conducts surveys, there's about a                                                                
      50 percent response rate and takes about two weeks. He said                                                               
      that  if Legislative Council wanted to  push folks toward                                                                 
      using laptops, he'd advocate, as a compromise between speed                                                               
      and accuracy, to make it a 50/50 split between desktops and                                                               
      laptops, and encourage people to go  the laptop route. He                                                                 
      said he  knows a lot of  offices are strongly in favor of                                                                 
      using desktops and some, in fact, don't use laptops at all.                                                               
      The  50/50  split would  begin the  transition of  moving                                                                 
      offices to laptops, even those that may not want them; and                                                                
      Information Services would still  have the opportunity to                                                                 
      get most of the new  equipment set up and installed before                                                                
      session starts.                                                                                                           
      In response to a  question by Representative Thompson, Mr.                                                                
      Clothier said laptops can support dual monitors.                                                                          
      10:25:01 AM                                                                                                             
      REPRESENTATIVE JOHNSON moved to amend the motion such that                                                                
      in the acquisition of computers, that we divide the laptops                                                               
      and  the tower computers  50/50; in that  it would  be 50                                                                 
      laptops and 50 tower computers.                                                                                           
      There was a roll call vote on the amendment.                                                                              
      YEAS:   Meyer,  Coghill,  Huggins,  MacKinnon,  Micciche,                                                                 
              Giessel, Chenault, Johnson, Kito, Millett, Thompson,                                                              
      NAYS: None                                                                                                                
      The amendment passed 12-0. NOTE: There was no response from                                                               
      Senator Hoffman.                                                                                                          
      CHAIR STEVENS asked if the amendment decision would impact                                                                
      that cost noted in the original motion.                                                                                   
      MR. CLOTHIER confirmed that was the case. As he mentioned                                                                 
      previously,  laptops are  more  expensive  than desktops;                                                                 
      approximately $300 more per unit. He recommended modifying                                                                
      the total estimated cost to $140,000. The Chair requested a                                                               
      second amendment to change the requested amount.                                                                          
      10:27:22 AM                                                                                                             
      REPRESENTATIVE  JOHNSON  moved  that  Legislative Council                                                                 
      increase from $131,207 for the computer refresh to $140,000                                                               
      to accommodate the transition to laptops.                                                                                 
     There was a roll call vote on the second amendment.                                                                        
     YEAS:   Meyer,  Coghill,  Huggins,  MacKinnon,  Micciche,                                                                  
             Giessel, Chenault, Johnson, Kito, Millett, Thompson,                                                               
     NAYS: None                                                                                                                 
     The amendment passed 12-0. NOTE: There was no response from                                                                
     Senator Hoffman.                                                                                                           
     CHAIR STEVENS reiterated for  members that there were two                                                                  
     amendments  approved  for  the  original motion:  (1)  to                                                                  
     purchase 50 desktops and  50 laptops; and (2) to increase                                                                  
     the requested amount to $140,000.                                                                                          
     SENATOR MACKINNON asked if  fax machines were included in                                                                  
     this request.                                                                                                              
     MR.  CLOTHIER said that the specific items in the request                                                                  
     were  listed in the  memo to Council members and  did not                                                                  
     include fax  machines. While fax machines  fall under the                                                                  
     purview of the Supply section, he said that the Agency is                                                                  
     well aware that many offices simply don't use fax machines                                                                 
     anymore.  The Executive  Branch has  been  considering an                                                                  
     initiative to  have faxes come through via  email and, in                                                                  
     working with that  group, he said he has been  encouraging                                                                 
     them to move forward with that proposal. Many offices want                                                                 
     to completely abandon fax machines and Information Services                                                                
     is supportive of that move.                                                                                                
     SENATOR MACKINNON  wanted to put  on the  record that she                                                                  
     hoped that in the legislative branch there wasn't going to                                                                 
     be  any money invested in purchasing fax machines as they                                                                  
     are an  obsolete piece of equipment. If there continues to                                                                 
     be a need, she recommended one fax machine per floor of the                                                                
     10:30:38 AM                                                                                                              
     A roll call vote was taken on the motion as amended.                                                                       
     YEAS:   Meyer,  Coghill,  Huggins,  MacKinnon,  Micciche,                                                                  
             Giessel, Chenault, Johnson, Kito, Millett, Thompson,                                                               
     NAYS: None                                                                                                                 
     The amendment passed 12-0.                                                                                                 
      b. 2017 Microsoft Enterprise Agreement Renewal                                                                          
      10:31:24 AM                                                                                                             
      SPEAKER CHENAULT moved that Legislative Council approve the                                                               
      expenditure of $123,301.49 to Software House International                                                                
      for  the  Legislature's portion of  the  annual Microsoft                                                                 
      Enterprise Agreement.                                                                                                     
      CHAIR STEVENS objected for purpose of discussion.                                                                         
      MR.  CLOTHIER said this was an  annual agreement that the                                                                 
      State of Alaska has entered into with Microsoft. The State                                                                
      has negotiated with Microsoft for an  Enterprise Agreement                                                                
      to  provide  Microsoft products to  all  State employees,                                                                 
      including  Windows 7,  operating systems, and  the office                                                                 
      suite  of Word,  Excel and  Outlook. It  also  covers the                                                                 
      network  software  -  the  exchange for  email;  the  SQL                                                                 
      databases, which is the information behind BASIS; websites;                                                               
      N drives; basically all the computer resources we use. This                                                               
      agreement  provides reduced  pricing,  enhanced technical                                                                 
      support, and the ability to do upgrades. For instance, one                                                                
      of  the upgrades  we envision in  the  next 24  months is                                                                 
      transitioning to Windows 10. That will  be a free upgrade                                                                 
      under  this agreement.  Another benefit is  the  Home Use                                                                 
      Program - which provides practically free pricing for State                                                               
      employees to use these products at home. The State, and the                                                               
      Legislature, has been a  member of this agreement for the                                                                 
      past eight years and this year's portion is the same amount                                                               
      as last year.                                                                                                             
      There being no questions on this motion, a roll call vote                                                                 
      was taken.                                                                                                                
      YEAS:   Meyer,  Coghill,  Huggins,  MacKinnon,  Micciche,                                                                 
              Giessel, Johnson, Kito, Millett, Thompson, Stevens,                                                               
      NAYS: None                                                                                                                
      The motion passed 12-0.                                                                                                   
      Council took a brief at ease.                                                                                             
      CHAIR STEVENS said that the  "at ease" was to address the                                                                 
      issue  of alternate  members and  votes. He  said Council                                                                 
      needed to re-vote because the Senate had a full membership                                                                
      present with Senator  Hoffman on teleconference; therefore                                                                
      Senator Giessel would not be voting on this item.                                                                         
     A second roll call vote was taken.                                                                                         
     YEAS:   Meyer,  Coghill,   Hoffman,  Huggins,   MacKinnon,                                                                 
             Micciche, Chenault, Johnson, Kito, Millett, Stevens                                                                
     NAYS: None                                                                                                                 
     The  motion passed 11-0.  Representative Thompson did not                                                                  
     respond to the second roll call vote.                                                                                      
     c. Stoel Rives Contract Amendment                                                                                        
     10:36:42 AM                                                                                                              
     SPEAKER CHENAULT moved that Legislative Council approve an                                                                 
     amendment to the legal services contract with Stoel Rives                                                                  
     LLP, in the amount of $260,000 to represent the Legislature                                                                
     with any matters related to 716 W. 4th Avenue and 1500 W.                                                                  
     Benson Boulevard.                                                                                                          
     CHAIR STEVENS objected for purpose of discussion.                                                                          
     DOUG  GARDNER, Director of Legal Services,  said that the                                                                  
     last time he came before Council regarding the Stoel Rives                                                                 
     contract was  in April. Legislative Council approved some                                                                  
     additional  funding  for   Stoel  to  do   work  for  the                                                                  
     Legislature.  At  the  time,  what was  pending  was  the                                                                  
     Gottstein matter, we were in the process of discussing with                                                                
     the Legislature the possible purchase of 716 W 4th Avenue.                                                                 
     During  that  intervening period of  time,  the Gottstein                                                                  
     matter came to a final ruling on a summary judgment motion                                                                 
     declaring the lease void. At one point, Legal Services and                                                                 
     Stoel Rives were working on a  purchase and sale agreement                                                                 
     for 716 W 4th Avenue; and then Legislative Council made the                                                                
     decision  to  purchase  the  Benson  building, and  Legal                                                                  
     Services  and Stoel  Rives  shifted gears  and  begin the                                                                  
     process of  negotiating with Wells Fargo for the purchase                                                                  
     and  sale agreement to buy the Benson  building. It was a                                                                  
     complicated transaction in the sense that Wells Fargo was                                                                  
     going from being a landlord to a tenant; so a purchase and                                                                 
     sale   agreement and   a  simultaneous  lease  are  being                                                                  
     negotiated. The last item that has come in is a procurement                                                                
     claim  that 716  W 4th  Avenue has  filed, pending before                                                                  
     Senator  Stevens,  who  is  the  Procurement Officer  for                                                                  
     Legislative Council as Chair. He said that matter is being                                                                 
     evaluated and Senator Stevens will be advised in the next                                                                  
     couple of weeks on options on how to  proceed. Stoel Rives                                                                 
     has been involved and will continue to be involved unless                                                                  
     Legislative  Council directs  otherwise on  all of  those                                                                  
      Mr. Gardner said he wanted to note that much of this work                                                                 
      happened in April, May and June while the Legislature was                                                                 
      in session. There were times when Legal Services was able                                                                 
      to  do a lot  of work on  specialty items where they have                                                                 
      expertise  for  the  Legislature, constitutional matters,                                                                 
      etc., and then there were large pieces where Legal Services                                                               
      had no  expertise. For instance, the Legislature has never                                                                
      purchased a large office building, and Legal Services has                                                                 
      certainly never  done the  kind of  commercial lease that                                                                 
      involved with the Wells Fargo lease. He said we have quite                                                                
      a number of  months of accumulated services and that's the                                                                
      CHAIR STEVENS  said that during the  negotiations for the                                                                 
      Benson  building, he found  Stoel Rives just  crucial and                                                                 
      invaluable; assisting and understanding negotiating with a                                                                
      major  corporation like Wells  Fargo is  big time and  we                                                                 
      needed that advice and  that support from Stoel Rives. He                                                                 
      said he  can't speak highly enough of  the attorneys from                                                                 
      Stoel Rives that worked with us on these issues.                                                                          
      MR. GARDNER said, in response to the Chair's comments, that                                                               
      we did have Stoel Rives most experienced real estate lawyer                                                               
      take over for Serena Carlsen and handled the vast amount of                                                               
      the   work  with   an  associate  from   Anchorage  where                                                                 
      appropriate.  We have,  in  this  transaction, taken  the                                                                 
      approach  after having talked  with Council  members some                                                                 
      months ago in Juneau, to eliminate any risk of issues with                                                                
      this transaction, whether it's the lease, whether it's the                                                                
      purchase, whether it's seismic studies, whether it's mold                                                                 
      in  the walls, we have literally squeezed this project to                                                                 
      try  and wring  out of  it any  risk to  the  Legislature.                                                                
      Obviously,   this  building   has   been   a   complicated                                                                
      transaction, has been  in the media  a lot, and  they are                                                                 
      trying to  make sure that  they do all  the due diligence                                                                 
      that's  necessary for  a public  entity to  buy a  larger                                                                 
      building from a big corporation. The amount of negotiation                                                                
      that  was required was  unbelievable and it  was  a daily                                                                 
      project for Stoel Rives and, at times, for Legal Services.                                                                
      CHAIR  STEVENS noted  for members  that after  the action                                                                 
      items, there will be updates on the Wells Fargo building,                                                                 
      updates on  the 4th  Avenue building, and updates  on the                                                                 
      Patterson v. Walker litigation.                                                                                           
     10:43:20 AM                                                                                                              
     A roll call vote was taken.                                                                                                
     YEAS:   Meyer,  Coghill,   Hoffman,  Huggins,   MacKinnon,                                                                 
             Micciche,  Chenault,   Johnson,   Kito,  Millett,                                                                  
             Thompson, Stevens                                                                                                  
     NAYS: None                                                                                                                 
     The amendment passed 12-0.                                                                                                 
VI. OTHER COMMITTEE BUSINESS                                                                                                  
     a. Update on Wells Fargo Building                                                                                        
     b. Update on 716 W 4th Avenue Building                                                                                   
     c. Update on Patterson vs. Walker Litigation                                                                             
     a. Update on Wells Fargo Building                                                                                        
     PAM  VARNI, Executive Director of the Legislative Affairs                                                                  
     Agency,  said   that  an  attractive  purchase  price  of                                                                  
     $11,850,000 was  negotiated versus  the listing  price of                                                                  
     $12,500,000;  $650,000  below  the   listing  price.  The                                                                  
     Legislature  appropriated  $12.5  million.  The  purchase                                                                  
     agreement was signed on July 19, 2016, and the lease will                                                                  
     be signed with business terms before closing. There is a 45                                                                
     day  due diligence period and  $125,000 earnest money was                                                                  
     deposited. Closing date is  estimated to be September 15,                                                                  
     2016.  There is  also personal  property including office                                                                  
     furniture, fixtures,  and certain artwork that  will come                                                                  
     with  the  purchase  of  the  building, included  in  the                                                                  
     $11,850,000 purchase price. There is a 10-year lease with                                                                  
     Wells Fargo, renting a little less than half of the first                                                                  
     floor space for  their branch operations. It will be over                                                                  
     $2.4  million over the initial terms of the  lease and an                                                                  
     additional $623,000 for office space on the third floor for                                                                
     18 months, giving them time to relocate.                                                                                   
     In FY 17, we estimate that there will be more revenue than                                                                 
     expenses  (operating and maintenance) and  the  price per                                                                  
     square foot will be $-0.16, and it would probably be even                                                                  
     lower  under net present value. In  FY 18,  there will be                                                                  
     revenue of approximately $125,000, and about $-0.31/square                                                                 
     foot;  and in  FY  19, operating  expenses will  be about                                                                  
     $0.37/square foot. She said  that at the Atwood Building,                                                                  
     the  lease cost for  office and  parking was going  to be                                                                  
     $1.84/square foot, so the Wells Fargo building represents a                                                                
     substantial savings. Also, under the 10 year lease, there                                                                  
     are two five-year renewals for the branch space. There are                                                                 
     190  parking spaces and recent  upgrades in the building:                                                                  
      roof replaced in  2013; the HVAC system upgraded in 2014;                                                                 
      two  elevators upgraded in  2015; and boiler  upgrades in                                                                 
      2014. The plan is for the Agency to slowly do renovations,                                                                
      we  will move in as-is, and  look at remodeling the third                                                                 
      floor  after the 18  month rental period by  Wells Fargo.                                                                 
      Also, the plan is to have a property manager like we did at                                                               
      716 W 4th Avenue.                                                                                                         
      In  response to questions by Senator MacKinnon, Ms. Varni                                                                 
      said that notice was given to the 716 W 4th Avenue landlord                                                               
      for a move-out date of October 16, 2016; also, moving costs                                                               
      are  estimated to  be in  the $20,000  range. It  will be                                                                 
      temporary quarters initially; cubicles for staff and some                                                                 
      private  offices that  Senator  Stevens'  office will  be                                                                 
      assigning to  the Anchorage Legislators. Renovations will                                                                 
      occur slowly and generally during session when members are                                                                
      in Juneau.                                                                                                                
      CHAIR  STEVENS said he  wanted to  mention the comparison                                                                 
      between the Atwood Building and the Wells Fargo building.                                                                 
      At  one time, we were seriously talking about moving into                                                                 
      the Atwood Building and there were many objections to and                                                                 
      concerns about that proposal. He wanted to go step-by-step                                                                
      through those issues so that members would understand and                                                                 
      be able to defend the choice.                                                                                             
      Chair Stevens,  referring to a  one page comparison sheet                                                                 
      before  members, said  that  the Atwood  Building offered                                                                 
      34,102 square feet of space at a cost of $1.84/square foot.                                                               
      Our  full service lease with Department of  Administration                                                                
      would be $752,972/year. The Governor's Office, Tanci Mintz,                                                               
      the Commissioner of Administration have all been very good                                                                
      to work with and he said he appreciated that. In the end,                                                                 
      it  was  a better  decision to  move to  the  Wells Fargo                                                                 
      building. He  said, additionally, the Atwood Building was                                                                 
      not  move-in ready. Tenant improvements would have  to be                                                                 
      completed before we could move into the building in 2018;                                                                 
      some space would be  available prior to that, but not all                                                                 
      that was needed. Tenant improvements were estimated to be                                                                 
      $3.5  million.  It  would  have  involved  relocation  to                                                                 
      temporary space until Atwood was ready; and we'd be sharing                                                               
      space with the Executive Branch and parking as well as with                                                               
      the  public (although  some underground parking  would be                                                                 
      reserved for the Legislature).                                                                                            
      In the Wells Fargo building, there is 52,214 square feet of                                                               
      rentable space; of which  we'll be leasing to Wells Fargo                                                                 
      5,889 square feet for their bank space on the ground floor                                                                
      for 10 years. We'll also be leasing to Wells Fargo 13,075                                                                 
     square  feet of office  space on  the third floor  for 18                                                                  
     months. We've negotiated a  purchase price lower than the                                                                  
     original offering.  We estimate that  our maintenance and                                                                  
     operating costs are about $575,000 annually. To offset the                                                                 
     operating  and  maintenance  costs,  we'll  receive  over                                                                  
     $214,000 a year ($3.035/sq ft) for the bank space, with a                                                                  
     2.5% increase annually, as well as $623,677 for the next 18                                                                
     months that Wells  Fargo will be leasing the third floor.                                                                  
     Additionally, we'll receive over $18,000 a  year from GCI                                                                  
     for the  rooftop antennas and there are built-in increases                                                                 
     in  that agreement as well. Once  Wells Fargo vacates the                                                                  
     third floor and once  renovations are completed, it's been                                                                 
     discussed that Eagle River Legislators could be moved into                                                                 
     the Benson building, for a savings of over $75,000 a year.                                                                 
     Legislative Audit Anchorage employees could also be moved                                                                  
     into  the  Benson building  for further  savings of  over                                                                  
     $53,000 a year.                                                                                                            
     Chair Stevens said the building is ready to move-in as is,                                                                 
     with some minimal tenant improvements and costs; with long-                                                                
     term improvements being completed in phases over time and                                                                  
     if  and  as we  want  to. Wells  Fargo would  be our  own                                                                  
     building,  it would  be autonomous,  not shared  with the                                                                  
     Governor's Office; there are 190 parking spaces, much more                                                                 
     than we have today.                                                                                                        
     REPRESENTATIVE KITO said one of the things that needs to be                                                                
     considered as we're already moving down this path, is that                                                                 
     if  we did not purchase the Wells Fargo building, we'd be                                                                  
     moving into the Atwood Building. The Atwood Building is not                                                                
     estimated to cost us $11.8 million to move in, so the $11.8                                                                
     million should actually be incorporated into some of that                                                                  
     calculation as an  amortized cost as opposed to something                                                                  
     that  is  not costing  the State.  We are  spending $11.8                                                                  
     million to realize this savings, so it's not an apples-to-                                                                 
     apples comparison.                                                                                                         
     There was no action needed on this item.                                                                                   
     b. Update on 716 W 4th Avenue Building                                                                                   
     10:56:11 AM                                                                                                              
     DOUG GARDNER, Director of Legal Services, said that during                                                                 
     the course of this conversation, we've actually touched on                                                                 
     the  points of discussion: the notice that was given; the                                                                  
     timeline to move out  of the building; and that the lease                                                                  
     was declared void, which was  old news. He said he didn't                                                                  
     have  more to  add, but  if  Council wanted to  get in  a                                                                  
      discussion about legal issues, he'd be happy to do so in an                                                               
      executive session.                                                                                                        
      There was no discussion and no action needed on this item.                                                                
      c. Update on Patterson v. Walker Litigation                                                                             
      MR. GARDNER remained on record and  said that it has been                                                                 
      his practice to  let Council know when Legal Services has                                                                 
      been  authorized to  litigate  on  behalf  of  Legislative                                                                
      Council, the Legislature, or a former Legislator. He said                                                                 
      the outcome on this issue is in the packet, and that it was                                                               
      a good decision, a well-written decision by Judge Menendez.                                                               
      Basically, the  decision stands for  the proposition that                                                                 
      when Legislators as elected officials are involved in the                                                                 
      passage of  bills or the  consideration of matters at the                                                                 
      committee  level, that they  have absolute  immunity. Mr.                                                                 
      Patterson was upset about his conviction and the passage of                                                               
      some criminal laws that he felt affected him unfairly. The                                                                
      reality is that while some people may agree with laws and                                                                 
      some people may not, but when Legislators are passing laws,                                                               
      we will vigorously defend them. Understanding the immunity                                                                
      issue, the case was dismissed. As you all know, if you are                                                                
      sued after you leave office for a matter that you undertook                                                               
      in your official duties as a  Legislator, we will continue                                                                
      to  defend you just as  we have over the  years for other                                                                 
      members that are no longer active.                                                                                        
      In  response to a question by  Chair Stevens, Mr. Gardner                                                                 
      said that the Legislature and former Senator Hollis French                                                                
      were dismissed from the case. He went on to say that named                                                                
      in  the  lawsuit were others,  such as  the  governor and                                                                 
      possibly other officials. The case continues to go forward,                                                               
      but  the   Legislature and  former  Senator  French  were                                                                 
      dismissed  out  of  it.  In  essence, Mr.  Patterson  was                                                                 
      convicted of a sex offense and he felt that the laws that                                                                 
      had been passed affected him unfairly. The salient point is                                                               
      that, regardless of the merits of the law, someone has to                                                                 
      make the decision and when a person is in that mode, like                                                                 
      you are here in  this committee meeting, you have absolute                                                                
      immunity for the decisions you make. The theory is that if                                                                
      you didn't  have that, how could you  ever go forward and                                                                 
      take  the steps that  you need  to, so  that's the policy                                                                 
      underlying it and it's a constitutional power.                                                                            
      CHAIR  STEVENS summed it  up  to say  that the  point for                                                                 
      Council was that legislative immunity has been upheld, the                                                                
      former Legislator has been  dismissed from that case, and                                                                 
     while there are others still involved in that case, the                                                                    
     Legislature is no longer a part of it.                                                                                     
     There being no further business before the committee, the                                                                  
  Legislative Council meeting was adjourned at 11:00 a.m.                                                                       
     11:01:12 AM                                                                                                              

Document Name Date/Time Subjects
8.3.16 Leg. Council Agenda.docx JLEC 8/3/2016 10:00:00 AM
8.3.16 Leg. Council Packet
12.19.15 LC Meeting Minutes.pdf JLEC 8/3/2016 10:00:00 AM
8.3.16 Leg. Council Packet
2.11.16 LC Meeting Minutes.pdf JLEC 8/3/2016 10:00:00 AM
8.3.16 Leg. Council Packet
3.31.16 LC Meeting Minutes.pdf JLEC 8/3/2016 10:00:00 AM
8.3.16 Leg. Council Packet
4.14.16 LC Meeting Minutes.pdf JLEC 8/3/2016 10:00:00 AM
8.3.16 Leg. Council Packet
24th Annual Coal Classic Golf Tournament.pdf JLEC 8/3/2016 10:00:00 AM
8.3.16 Leg. Council Packet
2016 Annual IT Hardware Refresh.pdf JLEC 8/3/2016 10:00:00 AM
8.3.16 Leg. Council Packet
2017 Microsoft Enterprise Agreement Renewal.pdf JLEC 8/3/2016 10:00:00 AM
8.3.16 Leg. Council Packet
Patterson vs. Walker.pdf JLEC 8/3/2016 10:00:00 AM
8.3.16 Leg. Council Packet