Legislature(2017 - 2018)BARNES 124

08/17/2017 12:00 PM LEGISLATIVE COUNCIL

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Audio Topic
12:02:24 PM Start
02:19:02 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- NOTE: Location Change:
- From House Finance Room to Barnes 124 -
+ Ratification of Charitable Events: TELECONFERENCED
- Kenai Peninsula Boys & Girls Club Annual
Auction Gala
Contract Approvals:
- FY2018 Microsoft Software Renewal
- Wells Fargo Lease Amendment and Extension
EXECUTIVE SESSION
Other Business:
- Anchorage Legislative Office Building - Phase 1
Reconciliation
                       ALASKA STATE LEGISLATURE                                                                               
                         LEGISLATIVE COUNCIL                                                                                  
                           AUGUST 17, 2017                                                                                    
                               12:02 PM                                                                                       
                                                                                                                              
      MEMBERS PRESENT                                                                                                         
                                                                                                                              
      Representative Sam Kito, Chair                                                                                          
      Senator Bert Stedman, Vice Chair                                                                                        
      Representative Matt Claman                                                                                              
      Representative David Guttenberg                                                                                         
      Representative Charisse Millett                                                                                         
      Representative Dan Ortiz                                                                                                
      Representative Louise Stutes                                                                                            
      Representative Harriet Drummond, Majority Alternate                                                                     
      Representative David Eastman, Minority Alternate                                                                        
      Senator Pete Kelly                                                                                                      
      Senator Anna MacKinnon                                                                                                  
      Senator Kevin Meyer                                                                                                     
      Senator Peter Micciche                                                                                                  
      Senator Cathy Giessel                                                                                                   
                                                                                                                              
      MEMBERS ABSENT                                                                                                          
                                                                                                                              
      Representative Bryce Edgmon                                                                                             
      Senator Lyman Hoffman                                                                                                   
                                                                                                                              
      OTHER MEMBERS PRESENT                                                                                                   
                                                                                                                              
      Senators Egan and Olson                                                                                                 
                                                                                                                              
      AGENDA                                                                                                                  
                                                                                                                              
      APPROVAL OF AGENDA                                                                                                      
      RATIFICATION OF CHARITY EVENTS                                                                                          
      CONTRACT APPROVALS                                                                                                      
      EXECUTIVE SESSION                                                                                                       
      OTHER COMMITTEE BUSINESS                                                                                                
                                                                                                                              
      SPEAKER REGISTER                                                                                                        
                                                                                                                              
      Tim Banaszak, Information Technology Manager, Legislative                                                               
        Affairs Agency                                                                                                        
      Doug Gardner, Director, Legal and Research Services                                                                     
      Pam Varni, Executive Director, Legislative Affairs Agency                                                               
      Jeff Rader, VP Corporate Properties Group, Wells Fargo Bank                                                             
                                                                                                                              
       12:02:24 PM                                                                                                          
                                                                                                                              
  I. CHAIR SAM KITO called the Legislative Council meeting to                                                               
       order at  12:02  p.m.  in Room  519  (House Finance)  of  the                                                          
       State  Capitol. Present  at  the  call  were Representatives                                                           
       Millett  and   Kito;   and  Senator   Stedman.   Present   on                                                          
       teleconference  were   Representatives  Claman,   Guttenberg,                                                          
       Ortiz,  Stutes,  and   Drummond  (alternate);  and   Senators                                                          
       MacKinnon,  Giessel, Meyer,  and  Micciche.  Senator  Hoffman                                                          
       joined  after the  Charitable  Events  item. Representatives                                                           
       Edgmon, and  Eastman  (alternate),  and Senator  Kelly,  were                                                          
       absent.                                                                                                                
                                                                                                                              
       CHAIR KITO  noted for the  record that  because many  Council                                                          
       members were  participating via teleconference,  a roll  call                                                          
       vote would be taken for each motion.                                                                                   
                                                                                                                              
 II. APPROVAL OF AGENDA                                                                                                     
                                                                                                                              
       VICE CHAIR  STEDMAN moved  that Legislative  Council  approve                                                          
       the agenda.                                                                                                            
                                                                                                                              
       A roll call vote was taken.                                                                                            
                                                                                                                              
       YEAS:   Claman,   Guttenberg,    Millett,   Ortiz,    Stutes,                                                          
               Drummond, MacKinnon, Meyer, Micciche, Giessel,                                                                 
               Stedman, Kito                                                                                                  
                                                                                                                              
       NAYS: None                                                                                                             
                                                                                                                              
       The motion passed 12-0.                                                                                                
                                                                                                                              
III. RATIFICATION OF CHARITABLE EVENTS                                                                                      
       a. Boys & Girls Club of the Kenai Peninsula Annual Auction                                                           
          Gala                                                                                                                
                                                                                                                              
       SENATOR MICCICHE  stated for the  record that  he has been  a                                                          
       member of  the  Boys &  Girls  Club  of the  Kenai  Peninsula                                                          
       Board of Directors  for the  last 25 years  and requested  to                                                          
       abstain from  voting on  this item.  There  was an  objection                                                          
       and Senator Micciche was required to vote.                                                                             
                                                                                                                              
       VICE CHAIR  STEDMAN  moved that  Legislative  Council  ratify                                                          
       the Chair's  sanctioning of  the following  charitable  event                                                          
       per AS 24.60.080(a)(2)(B): Boys & Girls Club of the Kenai Peninsula Annual                                                                    
            Auction Gala                                                                                                      
                                                                                                                              
      A roll call vote was taken.                                                                                             
                                                                                                                              
      YEAS:   Claman,   Guttenberg,    Millett,   Ortiz,    Stutes,                                                           
              Drummond, MacKinnon, Meyer, Micciche, Giessel,                                                                  
              Stedman, Kito                                                                                                   
                                                                                                                              
      NAYS: None                                                                                                              
                                                                                                                              
      The motion passed 12-0.                                                                                                 
                                                                                                                              
IV. CONTRACT APPROVALS                                                                                                      
      a. FY18 Microsoft Software Renewal                                                                                    
      b. Wells Fargo Lease Amendment and Extension                                                                          
                                                                                                                              
      a. FY18 Microsoft Software Renewal                                                                                    
                                                                                                                              
      TIM BANASZAK,  Manager  for Information  Technology  for  the                                                           
      Legislative   Affairs  Agency,   stated   that   the   Alaska                                                           
      Legislature,   along  with   the   Executive   and   Judicial                                                           
      Branches, are  in the third  and final year  of a  three-year                                                           
      licensing  agreement with  Microsoft  for  software  products                                                           
      used by  the State  of Alaska. Software  House  International                                                           
      (SHI) is the  State's re-seller/provider  of these  products,                                                           
      which include Windows  10, Windows server operating  systems,                                                           
      and  the  Office  software   suite  (Word,  Excel,   Outlook,                                                           
      PowerPoint, etc.).  Other  important products  covered  under                                                           
      the Agreement  include  the  Legislature's  network  software                                                           
      and internet systems that  provide us with email  (Exchange),                                                           
      SQL  databases  (BASIS),  network  storage  (N  Drives),  web                                                           
      servers  (akleg.gov),  SharePoint  and  Skype  for   Business                                                           
      communication services,  as well as  increased email  storage                                                           
      capacity, software  licensing  and collaboration  for  mobile                                                           
      devices.                                                                                                                
                                                                                                                              
      He said  this  Agreement  provides the  benefits  of  reduced                                                           
      volume   pricing,   enhanced   technical   support,   regular                                                           
      software  upgrades  and   training  vouchers  for   technical                                                           
      staff.                                                                                                                  
                                                                                                                              
      The  Legislature's  portion of  the  renewal  for  FY2018  is                                                           
      $124,826.62,  which  is  budgeted  under  the Administrative                                                            
      Services  component  each  year,  and  requires   Legislative                                                           
      Council's approval.                                                                                                     
                                                                                                                              
      He advised members  that the Executive  Branch was  beginning                                                           
      its  negotiations   now  with  Microsoft   for  next   year's                                                           
      contract.                                                                                                               
                                                                                                                              
       In  response  to  a  question  by  the  Chair,  Mr.  Banaszak                                                          
       confirmed that  this Agreement  allowed  the Legislature  the                                                          
   ability to take part in the pilot program Office 365.                                                                      
                                                                                                                              
       REPRESENTATIVE    MILLETT   thanked    Mr.    Banaszak    and                                                          
       acknowledged  that  he and  his  staff  recently  received  a                                                          
       national  award   at  the   National   Conference  of   State                                                          
       Legislatures  annual meeting  for  the  Alaska  Legislature's                                                          
       website; she  added that Alaska  is on par  with much  larger                                                          
       states in  technological advancements,  and  thanked him  for                                                          
       all the hard work that he and his staff do.                                                                            
                                                                                                                              
       MR.  BANASZAK  responded  that  there  were  many  folks  who                                                          
       worked on  that project,  notably  the LIO's  Tim Powers,  in                                                          
       addition  to   his  staff.   He  said   he  appreciated   her                                                          
       acknowledgement.                                                                                                       
                                                                                                                              
       12:14:01 PM                                                                                                          
       VICE CHAIR  STEDMAN moved  that Legislative  Council  approve                                                          
       the   expenditure   of   $124,826.62   to   Software    House                                                          
       International  (SHI) for  the  Legislature's portion  of  the                                                          
       annual Microsoft Enterprise Agreement.                                                                                 
                                                                                                                              
       A roll call vote was taken.                                                                                            
                                                                                                                              
       YEAS:   Claman, Millett, Ortiz, Stutes, Drummond,  MacKinnon,                                                          
               Meyer, Micciche, Giessel, Stedman, Kito, Hoffman*                                                              
                                                                                                                              
       NAYS: None                                                                                                             
                                                                                                                              
       The motion passed 12-0.                                                                                                
                                                                                                                              
       *It was noted that Senator Hoffman had joined the meeting.                                                             
                                                                                                                              
       b. Wells Fargo Lease Amendment and Extension                                                                         
                                                                                                                              
       DOUG  GARDNER,   Director  of   Legal   Services,  spoke   on                                                          
       teleconference  and noted  that,  while  Pam Varni  had  been                                                          
       directly  involved  in   the  lease  negotiations  and   this                                                          
       particular amendment,  he would  speak to  the legal  portion                                                          
       of this item. He said  that this lease extension would  allow                                                          
       Wells to continue  to extend their use  of one of the  floors                                                          
       in  the building  for  3.5  additional  months.  It  was  his                                                          
       understanding that  they were having  logistical issues  with                                                          
       a renovation of  the space  to which they  hope to move.  His                                                          
       understanding is that  the lease rate  would remain the  same                                                          
       for that  space and  this was  not harmful  or disruptive  to                                                          
       the Legislature.  He added that  another thing the  amendment                                                          
       does, was that  it responded to  Wells Fargo's request  under                                                          
      federal law  to try  and address  any resolution  event  that                                                           
      might occur  in the event  that Wells Fargo  enters into  the                                                           
      wonderful  world  of  resolution  and  their  assets,   or  a                                                           
      portion of their assets, are picked up by an affiliate.                                                                 
                                                                                                                              
      He said Emily  Nauman, Legal Services  Staff, put together  a                                                           
      memo to  Legislative  Council members  and,  on page  two  of                                                           
      that memo,  it pretty  much goes  through the  punch list  of                                                           
      what the highlights  of that are. He  said he would be  happy                                                           
      to speak to that as the Chair desires.                                                                                  
                                                                                                                              
      CHAIR KITO asked Ms. Varni  to speak to this item to  provide                                                           
      another perspective.                                                                                                    
                                                                                                                              
      PAM VARNI,  Executive  Director  of the  Legislative  Affairs                                                           
      Agency, noted  that Jeff  Rader of  Wells Fargo  was also  on                                                           
      teleconference and could  speak to the resolution issue.  She                                                           
      said presently  Wells Fargo  is leasing  the  third floor  in                                                           
      addition to the  branch space on the  ground floor. There  is                                                           
      a 10  year  lease  for  the branch  space;  Wells  Fargo  has                                                           
      vacated the  fourth floor;  their leased space  on the  third                                                           
      floor was due to terminate  on March 15, 2018, but there  was                                                           
      a delay  with the  renovations of  their new  space and  thus                                                           
      they requested  an additional three  months lease  extension.                                                           
      They are  presently  paying  $34,648.75  per month,  so  this                                                           
      would  be  an  additional  $121,270.63  of  revenue   to  the                                                           
      Legislature for the extra three months.                                                                                 
                                                                                                                              
      In response  to a  request for  clarification  by the  Chair,                                                           
      Ms. Varni  confirmed  that the  lease extension  was  through                                                           
      June 30, 2018.                                                                                                          
                                                                                                                              
      CHAIR KITO  asked  for  brief  testimony from  Mr.  Rader  of                                                           
      Wells Fargo  regarding  the  resolution  piece of  the  lease                                                           
      amendment.                                                                                                              
                                                                                                                              
      JEFF  RADER,   Wells  Fargo,  said   Mr.  Gardner   correctly                                                           
      captured the  resolution  recovery  plan. This  was  language                                                           
      that the federal  government was having  all banks secure  in                                                           
      all of  their leases  across the  country in  the event  that                                                           
      there is  a resolution  or an  insolvency.  It provides  that                                                           
      the  bank branch  would  be  maintained  and  operated  by  a                                                           
      receiver, and there would  be no change in the rent  payment.                                                           
      It allows  for  affiliates or  the  receivership to  run  the                                                           
      operation  during  the  insolvency.   He  said  it  was   his                                                           
      understanding that  most of  this was  current statutory  law                                                           
      anyway. It does go a  little bit farther in its allowance  of                                                           
      affiliates than what  the statute has.  He said we have  some                                                           
      5,000 of these  across the country  and are asking  landlords                                                           
       to accommodate  that  request to  have  the language  in  the                                                          
       leases.                                                                                                                
                                                                                                                              
       REPRESENTATIVE CLAMAN  asked if  the Wells  Fargo lease  rate                                                          
       was a competitive market rate.                                                                                         
                                                                                                                              
       MS.  VARNI  confirmed  that   was  correct.  There  are   two                                                          
       different rates:  one for the  branch and  one for the  third                                                          
       floor corporate  office. She  said  she could  get the  exact                                                          
       figures to  Rep. Claman,  but that  it was  her  recollection                                                          
       that one of the  rates was in the  $3.00 range and the  other                                                          
       was $2.65 per square foot.                                                                                             
                                                                                                                              
       REPRESENTATIVE  GUTTENBERG  said  that  while  it  may  be  a                                                          
       statutory  requirement   for   Wells  Fargo,   it  wasn't   a                                                          
       statutory  requirement  for the  Legislature.  He  wanted  to                                                          
       know what protections the  Legislature would be given  as the                                                          
       landlord.                                                                                                              
                                                                                                                              
       MR. GARDNER  responded  that the  FDIC  could wield  a  heavy                                                          
       hand and  probably would  have a  lot of  influence,  perhaps                                                          
       even chart  their own  course to  some extent  on the  lease;                                                          
       however,  if there  is  a  resolution event,  he  wanted  the                                                          
       Legislature to  be in  a position  to  at least  talk to  the                                                          
       affiliate, to Wells Fargo,  and to the federal government  on                                                          
       some of  these provisions.  Having  something in  the  lease,                                                          
       where we have  attempted to  comply with  federal law and  we                                                          
       at least  have  some  protections  and some  bookends  on  it                                                          
       would be  helpful. He said,  for example,  the lease  doesn't                                                          
       require the  Legislature  to continue  to  extend it  to  the                                                          
       affiliate beyond  the period of  the lease,  but it might  be                                                          
       in  negotiations  that   we've  done  our  best  to   protect                                                          
       ourselves  and  it  might  be  that  the  affiliate  and  the                                                          
       federal government  really try  to follow the  lease; it  was                                                          
       his experience that  people generally  do. He summarized  his                                                          
       comments was  that  having some  provisions that  protect  us                                                          
       the best that we can  under these circumstances, having  some                                                          
       language  that we  can  fall  back  on in  dealing  with  the                                                          
       lessee and any potential affiliate was good.                                                                           
                                                                                                                              
       Mr. Gardner went  on to say that  at the March 2018  meeting,                                                          
       the over-arching  issue seemed  to be  should we  do this  at                                                          
       all if the  federal government  was just  going to pave  over                                                          
       us anyway. His  response is that (1)  we control our  destiny                                                          
       as much as  possible; and  (2) we are  in this together  with                                                          
       Wells Fargo,  they  are partners  with us  in terms  of  this                                                          
       lease and  we should  do what  we can  to try  and amend  the                                                          
       lease in a  way that was mutually  beneficial to comply  with                                                          
       federal law.                                                                                                           
      DISCUSSION FOLLOWED  on the  original lease  language  versus                                                           
      the amendment regarding  a resolution recovery;  requirements                                                           
      for banks to  pass a "living  will test,   part of the  Dodd-                                                           
      Frank Act;  the lease  extension versus  the language  change                                                           
      request to comply  with federal law;  and that extending  the                                                           
      lease does  not impact  plans to  renovate  the third  floor.                                                           
      There was a  comment of  support in extending  the lease  for                                                           
      additional revenue.                                                                                                     
                                                                                                                              
      Representative Eastman  joined the  meeting at approximately                                                            
      12:30 p.m.                                                                                                              
                                                                                                                              
      12:34:49 PM                                                                                                           
      VICE CHAIR  STEDMAN moved  that Legislative  Council  approve                                                           
      the  Wells   Fargo  Resolution   Recovery   Plan  and   Lease                                                           
      Extension which requires  an amendment to  our lease at  1500                                                           
      W. Benson Blvd. with Wells Fargo.                                                                                       
                                                                                                                              
      A roll call vote was taken.                                                                                             
                                                                                                                              
      YEAS:   Claman,   Guttenberg,    Millett,   Ortiz,    Stutes,                                                           
              Drummond, Hoffman, MacKinnon, Meyer, Micciche,                                                                  
              Giessel, Stedman, Kito                                                                                          
                                                                                                                              
      NAYS: None                                                                                                              
                                                                                                                              
      The motion passed 13-0.                                                                                                 
                                                                                                                              
 V. EXECUTIVE SESSION                                                                                                       
                                                                                                                              
      12:36:33 PM                                                                                                           
      VICE CHAIR  STEDMAN moved  that Legislative  Council go  into                                                           
      Executive Session  per Uniform  Rule 22(b)(2)  discussion  of                                                           
      subjects  that   tend  to   prejudice   the  reputation   and                                                           
      character of a  person. He said staff  to the Chair and  Vice                                                           
      Chair  could  remain  in  the  room  and  everyone  else  was                                                           
      excused.                                                                                                                
                                                                                                                              
      CHAIR KITO asked if any  Council members were concerned  with                                                           
      staff remaining on teleconference or in the room.                                                                       
                                                                                                                              
      SENATOR MACKINNON  responded  that it  depended  on what  was                                                           
      being said.  She  said  the issue  had  come up  before  with                                                           
      folks  in the  room  with  cell phones  and  that  the  fewer                                                           
      people in the room, the better.                                                                                         
                                                                                                                              
      CHAIR   KITO  said   that   his   recommendation   was   that                                                           
      Legislative Affairs  staff  would remain,  legislative  staff                                                           
      remain, and of  course any Legislators  as well. He  reminded                                                           
       all  participants  that  items  discussed  during   executive                                                          
       session  are  confidential   and  cannot  be  spoken   of  or                                                          
       released outside  the  meeting.  Legislative staff  would  be                                                          
       barred from future meetings  if any information was  released                                                          
       outside of executive session.                                                                                          
                                                                                                                              
       SENATOR MICCICHE said that  he believed it would impede  open                                                          
       discussion  if staff  were  allowed to  remain  in  executive                                                          
       session.                                                                                                               
                                                                                                                              
       SENATOR  GIESSEL concurred  with  Senator  Micciche  and  had                                                          
       concerns with staff being in executive session.                                                                        
                                                                                                                              
       CHAIR KITO said  he acknowledged  those concerns. He  amended                                                          
       his recommendation  to  say that  Legislators may  remain  on                                                          
       teleconference or in the  room; legislative staff aside  from                                                          
       Ms. Koeneman,  staff  to  Chair Kito  who  helps to  run  the                                                          
       meeting and  Senator Stedman's  staff Randy  Ruaro, will  not                                                          
       be included in executive  session. Legislative Affairs  staff                                                          
       allowed to  remain in  executive session  included  Executive                                                          
       Director Pam  Varni,  Finance  Manager Jessica  Geary,  Legal                                                          
       Services   Director   Doug   Gardner   (on  teleconference),                                                           
       Recorder  Molly Kiesel,  and  Moderator  Danea  Burns.  Chair                                                          
       Kito added  legislative staff  Jim Puckett  to those  allowed                                                          
       to remain in executive session.                                                                                        
                                                                                                                              
       12:40:50 PM                                                                                                          
       Legislative Council went into executive session.                                                                       
                                                                                                                              
       2:17:59 PM                                                                                                           
       Legislative Council came out of executive session.                                                                     
                                                                                                                              
       CHAIR KITO postponed  the final  item, Anchorage  Legislative                                                          
       Office Building -  Phase I Reconciliation;  he further  noted                                                          
       that   Council   would   continue   the   executive   session                                                          
       discussion at a future meeting.                                                                                        
                                                                                                                              
       There  being  no  further  business  before  the   committee,                                                          
       Legislative Council adjourned at 2:20 p.m.                                                                             
                                                                                                                              
       2:19:02 PM                                                                                                           

Document Name Date/Time Subjects
170801 LAA Phase 1 Reconciliation.pdf JLEC 8/17/2017 12:00:00 PM
170807 Wells Fargo Lease Extension and Amendment.pdf JLEC 8/17/2017 12:00:00 PM
170817 Agenda Revised.pdf JLEC 8/17/2017 12:00:00 PM
170726 - Boys & Girls Club of Kenai Peninsula.pdf JLEC 8/17/2017 12:00:00 PM
170727 Microsoft Software Renewal Request.pdf JLEC 8/17/2017 12:00:00 PM