Legislature(2017 - 2018)BARNES 124
08/17/2017 12:00 PM House LEGISLATIVE COUNCIL
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| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
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 |