Legislature(2015 - 2016)SENATE FINANCE 532
02/11/2016 05:00 PM House LEGISLATIVE COUNCIL
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ALASKA STATE LEGISLATURE
LEGISLATIVE COUNCIL
FEBRUARY 11, 2016
5:07 PM
Approved August 3, 2016
MEMBERS PRESENT
Senator Gary Stevens, Chair
Representative Bob Herron, Vice Chair
Senator John Coghill
Senator Lyman Hoffman
Senator Charlie Huggins
Senator Anna MacKinnon
Senator Kevin Meyer
Senator Peter Micciche
Representative Mike Chenault
Representative Craig Johnson
Representative Sam Kito
Representative Charisse Millett
Representative Mark Neuman
Representative Steve Thompson, alternate
MEMBERS ABSENT
Representative Mike Hawker
OTHER MEMBERS PRESENT
Senator Dennis Egan
AGENDA
APPROVAL OF AGENDA
RATIFICATION OF CHARITY EVENTS
OTHER COMMITTEE BUSINESS
SPEAKER REGISTER
Pam Varni, Executive Director, Legislative Affairs Agency
5:07:05 PM
I. CHAIR GARY STEVENS called the Legislative Council meeting
to order at 5:07 p.m. in Room 532 (Senate Finance) of the
State Capitol. Present at the call were Senators Stevens,
Meyer, Coghill, Hoffman, Huggins, MacKinnon, and Micciche;
Representatives Herron, Chenault, Johnson, Kito, Millett,
Neuman, and Thompson, alternate member. Representative
Hawker was absent.
II. APPROVAL OF AGENDA
VICE CHAIR HERRON moved that Legislative Council approve
the agenda.
The motion was approved without objection.
III. RATIFICATION OF CHARITABLE EVENTS
VICE CHAIR HERRON moved that Legislative Council ratify the
Chair's sanctioning of the following charitable events per
AS 24.60.080(a)(2)(B):
· "Best of" Skits
· Girl Scouts of Alaska Annual Auction
· Kenai Peninsula Fair Annual Fundraiser
· Kenai River Jr. Classic/Kenai River Classic/Kenai River
Women's Classic
· 27th Annual Fahrenkamp-Kelly Classic Charity Putting
Tournament
· 2016 Sham Jam
· 16th Annual Thanksgiving in March
· "Juneau's Got Talent"
CHAIR STEVENS said he sanctioned the list of events, all of
which had been confirmed as 501(c)(3) organizations.
The motion was approved without objection.
IV. OTHER COMMITTEE BUSINESS
a. FY 17 Legislature Budget
b. Anchorage LIO Project
a. FY 17 Legislature Budget
VICE CHAIR HERRON moved that Legislative Council per AS
24.20.130 approve the FY 17 Legislative Council Proposed
Budget and transmit it to the House and Senate Finance
Committees for their review and action.
CHAIR STEVENS objected for purposes of discussion and asked
Pam Varni to speak to the item.
PAM VARNI, Executive Director of the Legislative Affairs
Agency, said that before members is the Legislative Council
Proposed FY 17 Budget. In the entire Legislature budget,
there are 15 separate budget components and four separate
appropriations. The Legislative Council has 15 of these
components and three appropriations and that's what she
will be covering.
Ms. Varni said that the entire Legislature's FY 17 request
is a 1.5% reduction from FY 16 Management Plan and 0.5%
reduction from FY 17 Governor's Figures, which are
preliminary figures. The main difference was in the
Legislature's budget from FY 16 to FY 17 request, which was
a decrease of over $1.1 million by backing out the 2.5%
cost of living increase and absorbing those costs in the
budget. The Legislative Council request is an overall
increase of $378,500 from the FY 17 Governor's Figures. Ms.
Varni went component by component to explain.
For the Legislators Salary and Allowances component, which
pays for Legislator salaries, per diem and annual
allowances, there was no change. There was no increase in
FY 16 or FY 17.
The Administrative Services component pays for the
operation of the Division of Administrative Services, which
is the main support division for the Legislature along with
the Division of Legal and Research Services. In FY 16, this
component was reduced by 16 positions and an overall 7.5%
reduction; in addition, the Information and Teleconference
Section was moved to its own component and appropriation.
Under Administrative Services, there's an increase of
$35,500 to fully fund the Legislature's dues to legislative
organizations. The Legislature cut legislative dues in FY
16, and full funding is being requested in FY 17; if full
funding does not occur, dues will be paid with the amounts
in the Adjusted Base. The other increase is $30,500 in
order to fully pay interagency services - for central mail
services, risk management insurance premiums, and financial
services of AKPAY and IRIS, the payroll and accounting
systems in the State. The total increase requested is
$66,000.
The Legislature State Facilities Rent component shows an
increase of $312,500. This component pays for space rentals
and some operating expenses associated with space rented by
the Legislature statewide. There are increases of $24,900
for CPI rent adjustments in various locations; $45,000 for
Anchorage LIO security; and $242,600 for lease payments
from FY 15 and FY 16 that were not received in prior budget
requests; the increases total $312,500.
Ms. Varni explained that there were no changes from the FY
16 budget request to the FY 17 budget request in the
components of Council and Subcommittees, Legal and Research
Services, Select Committee on Ethics, Office of Victims'
Rights, Office of the Ombudsman, Information and
Teleconference, Legislative Operating Budget, Session
Expenses and Special Session Contingency.
REPRESENTATIVE KITO asked if the budget request reflected
the removal of the lease costs for the Anchorage LIO in FY
17, noting that in December 2015, Legislative Council
recommended the removal of that appropriation if certain
conditions were not met, which they were not.
CHAIR STEVENS said that there will be an amendment offered
at this meeting that would zero out the appropriation;
however, members need to understand that Ms. Varni, under
the contract, can do nothing more than present the budget
with the full appropriation figure.
MS. VARNI added that in the request before Council is
$4,032,000 for the Anchorage LIO lease, which includes $3.3
million to the landlord, $652,000 for operating expenses,
and $45,000 for security. Under the contract, the lease
clearly states that the Executive Director presents to
Legislative Council an annual request for appropriation for
the lease. If there is a non-appropriation by the
Legislature, that would be taken up by Legislative Council
or the Finance Committees.
SENATE PRESIDENT MEYER said that it appeared that the only
area that had significant increases was for the various
LIOs throughout the state; if that was so, are any of the
leases set to expire and could the rental rate be re-
negotiated or offices perhaps even closed if they weren't
being used very much.
MS. VARNI said that there weren't big increases in the CPI;
for instance, in Homer, there was a decrease of $14,200;
Cordova went up $100; Delta Junction went up $1,400. The
main increase in this request was for increases needed in
FY 15 and FY 16 which were not funded. The only reason this
component was not over-expended in those fiscal years was
because the Anchorage space expenses during the renovation
were not as high as had been budgeted, and were used to
cover other leases that were not fully funded. The FY 17
request before Council is to cover all of the contractual
lease payments.
SENATE PRESIDENT MEYER followed up to ask if the $45,000
for Anchorage security was also included.
MS. VARNI confirmed that was correct; although the funding
was removed in FY 16, the direction she had received was to
include it in the FY 17 budget request. If it is not the
desire of Legislative Council for these increases, then
they can be removed.
DISCUSSION FOLLOWED regarding some confusion over the
actual amount of the increase for AKPAY and IRIS payroll
and accounting systems.
SENATOR MICCICHE asked if Ms. Varni's view was that the
Finance Committees would work for some reductions in this
budget or if she was essentially putting forth a status quo
budget.
MS. VARNI said that the Agency always tries to do a
maintenance level budget. She noted for members that in FY
14, a total of $1,700 was lapsed; in FY 15, it was $40,700;
there was not extra money in the budget request. She said
she was trying to present to Council what it looks like the
real operating expenses and needs will be.
SENATOR MICCICHE followed up to ask that if the $4,032,000
lease fee is removed from this budget, did Ms. Varni know
what the reduction would be at $69,345,000.
MS.VARNI said that it would be a 7.5% reduction from the
entire Legislature's budget.
There was no further discussion.
CHAIR STEVENS requested the amendment.
5:13:07 PM
VICE CHAIR HERRON that Legislative Council, having received
and reviewed the Legislative Council FY 17 Proposed Budget
prepared by the Executive Director, which includes an
annual appropriation of funds for the Legislature's
obligation as Lessee for the 716 W. 4th Avenue, LLC
Anchorage LIO Building per Section 43 of the Lease executed
on September 19, 2015, direct that the budget be amended to
remove the appropriation for the Anchorage LIO Building for
FY 17 from the Legislature's budget and once amended as is
customary have the Chair transmit the amended Legislative
Council budget to the House and Senate Finance Committee's
for their review and action.
CHAIR STEVENS said that the reason for this amendment was
to bring the budget into compliance with the motion passed
by Legislative Council on December 19, 2015, giving 45 days
for a competitive cost on a per square foot of usable space
basis.
There being no discussion on the amendment, Chair Stevens
asked for a roll call vote.
YEAS: Stevens, Herron, Meyer, Coghill, Hoffman, Huggins,
MacKinnon, Micciche, Chenault, Johnson, Kito,
Millett, Neuman, Thompson
NAYS: None
The motion for the amendment passed 14-0.
There being no discussion on the motion as amended, a roll
call vote was taken.
YEAS: Stevens, Herron, Meyer, Coghill, Hoffman, Huggins,
MacKinnon, Micciche, Chenault, Johnson, Kito,
Millett, Neuman, Thompson
NAYS: None
The amended motion passed 14-0.
b. Anchorage LIO Project
CHAIR STEVENS reminded members that on December 19, 2015,
Legislative Council passed the following motion:
"…that Legislative Council advises the Legislature not to
appropriate for the 716 W 4th Avenue lease pending the
outcome of the currently pending litigation or unless
negotiations between Council and the Legislature and a
state entity within the next 45 days results in a
competitive cost on a per square foot of usable space
basis."
Chair Stevens said that after reviewing the information
submitted by the owner, there did not appear to be a
proposal that would result in a competitive cost on a per
square foot basis. In addition, there seems to be some
confusion and some unanswered questions from the various
proposals that have been presented to Council. He said he
was therefore going to engage an independent finance expert
to look at all the options and make a sound fiscal
recommendation to the Council. He said that person would be
hired as soon as possible and would get a recommendation to
Council in an expedited manner. He realized that time was
of the essence due to the tight timeline of the budget
process and that a final decision needs to be made before
adjournment of the legislative session. Serena Carlsen,
Council's attorney from Stoel Rives, made some
recommendations on who might be engaged as an independent
finance expert and there will be more to come; he said he
would share that information with everyone on Council and
would make sure that the person chosen would be beyond
reproach and have no connection with anybody in the state
of Alaska; and certainly no connection with anybody on
Council or the owners of the building. Sound financial
advice had been requested by just about everybody on
Council; up to this point, much of the information has been
political and legal advice, and what Council really needs
is financial advice.
There being no further business before the committee, the
Legislative Council meeting was adjourned at 5:26 p.m.
5:26:08 PM
| Document Name | Date/Time | Subjects |
|---|---|---|
| 2-11 Leg Council Agenda.pdf |
JLEC 2/11/2016 5:00:00 PM |
LEG. COUNCIL MEETING 2.11.16 |
| Sanctioned Charity Events 2.11.16.pdf |
JLEC 2/11/2016 5:00:00 PM |
Leg. Council Meeting 2.11.16 |
| 716 W Fourth Avenue LLC Proposal 1.29.16.pdf |
JLEC 2/11/2016 5:00:00 PM |
Leg. Council Meeting 2.11.16 |
| LAA Analysis of 716 W Fourth Ave Proposal 2.5.16.pdf |
JLEC 2/11/2016 5:00:00 PM |
Leg. Council Meeting 2.11.16 |