Legislature(2013 - 2014)HOUSE FINANCE 519
03/28/2014 06:00 PM Senate LEGISLATIVE BUDGET & AUDIT
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| Start | |
| Approval of Minutes | |
| Executive Session | |
| Other Committee Business | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
ALASKA STATE LEGISLATURE
LEGISLATIVE BUDGET AND AUDIT COMMITTEE
March 28, 2014
6:02 p.m.
MEMBERS PRESENT
Senator Anna Fairclough, Chair
Senator Kevin Meyer
Senator Click Bishop
Senator Cathy Giessel
Senator Donald Olson
Representative Alan Austerman
Representative Bob Herron
Representative Andy Josephson
MEMBERS ABSENT
Representative Mike Hawker, Vice Chair
Representative Kurt Olson
Representative Scott Kawasaki (alternate)
Representative Bill Stoltze (alternate)
Senator Mike Dunleavy (alternate)
COMMITTEE CALENDAR
APPROVAL OF MINUTES
EXECUTIVE SESSION
OTHER COMMITTEE BUSINESS
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
LAURA PIERRE, Staff
Senator Anna Fairclough
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified during discussion regarding the
increase to the contract for Manley & Brautigam.
ACTION NARRATIVE
6:02:11 PM
CHAIR ANNA FAIRCLOUGH called the Legislative Budget and Audit
Committee meeting to order at 6:02 p.m. Senators Fairclough,
Olson, Giessel, Bishop, and Meyer, and Representatives
Austerman, Herron, and Josephson were present at the call to
order.
^Approval of Minutes
Approval of Minutes
6:03:03 PM
CHAIR FAIRCLOUGH announced that the first order of business
would be approval of the minutes.
SENATOR MEYER made a motion to approve the minutes of February
25, 2014. There being no objection, the minutes from the
meeting of February 25, 2014 were approved.
^Executive Session
Executive Session
6:03:18 PM
CHAIR FAIRCLOUGH announced that the committee would move into
Executive Session to discuss confidential audit reports.
6:03:34 PM
SENATOR MEYER made a motion to move to executive session for the
purpose of discussing confidential audit reports under AS
24.20.301 and contracts for legal assistance. There being no
objection, the committee went into executive session at 6:04
p.m.
6:24:10 PM
CHAIR FAIRCLOUGH brought the committee back to order at 6:24
p.m. Senators Fairclough, Olson, Giessel, Bishop, and Meyer,
and Representatives Josephson, Herron, and Austerman were
present at the call to order.
6:24:26 PM
SENATOR MEYER made a motion for the final audit for the
Statewide Single Audit for the Fiscal Year ended June 30, 2013
to be released to the public. There being no objection, it was
so ordered.
^Other Committee Business
Other Committee Business
6:24:49 PM
CHAIR FAIRCLOUGH announced that the next order of business would
be a request for an increase to the contract with the law firm
of Manley & Brautigam.
6:25:04 PM
LAURA PIERRE, Staff, Senator Anna Fairclough, Alaska State
Legislature, explained that this was a request for an increase
to a contract authorized on March 6, 2014 by Chair Fairclough of
the Legislative Budget and Audit Committee to the law firm for
legal counsel as it related to the Alaska liquid natural gas
(LNG) projects which the Alaska State Legislature was
considering, specifically mentioned in SB 138 and HB 277. She
explained that the original contract had been for $35,000, as
permitted for authorization by the Chair without committee
approval under the procurement rules. She reported that her
discussion earlier that morning with the law firm had revealed
that its initial analysis and consideration of the legislation
and documents had almost exhausted the original contract
funding. As staff for the committee chair, she asked for an
increase to the contract in order to provide further legal
analysis of the legislation.
REPRESENTATIVE JOSEPHSON stated his support for the hiring of
the law firm, but he questioned how the contract had been
determined as necessary. He asked why the Senate had not been
"privy to some of that analysis" and he requested more
information about the process.
MS. PIERRE explained that, as Chair Fairclough was a member of
various committees which listened to the aforementioned
legislation, there had been discussion regarding the need of
legal counsel for particular issues relating to anti-trust and
federal corporate tax. She relayed that Legislative Legal
Services had responded that it did not have legal expertise in
these areas, with a suggestion to pursue outside legal counsel.
She shared that a request for quotes had been issued in late
February and only one law firm had responded. As that law firm
had appeared qualified for these issues, a contract had been
offered.
REPRESENTATIVE HERRON offered his belief that the correct choice
had been made, and then asked why the Legislative Budget and
Audit Committee had not been notified.
MS. PIERRE explained that Chair Fairclough had sent an
announcement to each legislative office about a week and a half
earlier, notifying them that reports had been posted on the
Legislative Budget and Audit Committee website and encouraging
each office to monitor the website for updated reports. This
notification had also outlined specific reports from Roger Marks
and Mr. Harper, with notice that additional reports from the law
firm would be forthcoming. She reported that she had received
the reports from the law firm during the previous weekend, had
reviewed them, requested a revision, and then posted them on the
website on the previous Tuesday. She acknowledged that a
subsequent announcement stating that the reports were now posted
had not been sent.
REPRESENTATIVE HERRON requested that, in the future, Legislative
Budget and Audit Committee members be notified when an important
announcement was released.
SENATOR MEYER asked why there had only been one response to the
initial request for a quote.
MS. PIERRE explained that the initial request had been sent to
four law firms, and only one firm had responded. She relayed
that an earlier request for a different quote had been sent to
six organizations, and there had been three responses. She
reported that this request had included that the firm be
available to fly to Juneau to meet with legislators and present
to committees during the legislative session, and she opined
that the other law firms may have had too large an existing
workload.
SENATOR MEYER asked how the request process had been narrowed to
only include four law firms.
MS. PIERRE, in response to Senator Meyer, said that they had
consulted for recommendations to law firms throughout the United
States with this expertise. She said that the firm they had
contracted with was based in Anchorage.
6:31:35 PM
CHAIR FAIRCLOUGH shared that they had asked Legislative Legal
Services and the Legislative Auditor for advice and for the
structure of the request proposal.
MS. PIERRE expressed her agreement that she had worked with Kris
Curtis, Legislative Auditor, to formulate the request for
quotes.
REPRESENTATIVE AUSTERMAN requested that this be placed on his
agenda at an earlier time, as he was a bit nervous about
spending $40,000 without advanced warning. He acknowledged the
authority of the chair to "ask questions and hire attorneys to
do what question answering you want to do."
CHAIR FAIRCLOUGH expressed her agreement, and pointed out that
she had been notified just prior to this meeting that the limit
of the contract had been reached.
MS. PIERRE reiterated that she had also just found out today,
and, in response to Representative Austerman, said that a
contract extension had been scheduled on the committee calendar
in order to not exceed the contract amount. As the committee
was meeting today and there was not another committee meeting
currently scheduled during the remainder of the legislative
session, it seemed to be the proper time for discussion.
REPRESENTATIVE JOSEPHSON asked why the Attorney General's office
would not take this role, although he realized that committees
would be asking all the time.
CHAIR FAIRCLOUGH explained that her concern was two-fold, as,
along with the anti-trust issues, the Senate was discussing a
restructure for the governor's proposed idea. As the Senate had
considered a different structure, she opined that it was
necessary to move quickly, and that the law firm needed
appropriate time to draft the document. She relayed that, as
questions for the taxing issue had also arisen, it was necessary
"to provide the legislature... the tools to be able to go
forward as this discussion continued at the house." She noted
that the law firm had not been able to get the report completed
in time for the Senate.
MS. PIERRE relayed that she had also approached the Department
of Law and received the same response for not being able to
provide "that sort of expertise to us."
REPRESENTATIVE AUSTERMAN asked to review a hard copy of the
contract and the reports. He reiterated his concern for
spending $40,000 without any review.
MS. PIERRE offered him a copy of the contract for his perusal,
although she noted that she did not have a copy of the report.
She pointed out that the contract had been on-line since it was
signed on March 6, and that this had been announced in an e-mail
to all the members from Chair Fairclough at that time.
CHAIR FAIRCLOUGH acknowledged her surprise for the contract
extension and stated that she did not like to "handle business
on the spur of the moment, either." She posed that the proposed
legislation necessitated that reports be presented to
committees.
MS. PIERRE, in response to Chair Fairclough, said that the law
firm would make a presentation to the House Resources Standing
Committee (HRES) during the following week.
CHAIR FAIRCLOUGH explained that preparation for this
presentation had triggered the necessity to exceed the original
contract amount, hence the immediacy of this current request to
the committee. She offered to postpone presentation of the
report to HRES if the Legislative Budget and Audit Committee
wanted more time to review that contract and approve this
expenditure.
REPRESENTATIVE AUSTERMAN expressed his comfort to "put it back
on us, that's fine."
CHAIR FAIRCLOUGH replied that she was "not trying to put it on
anyone." She reiterated that she had only been made aware of
the issue in the last hour and a half.
6:38:17 PM
SENATOR GIESSEL relayed that questions about anti-trust, tax
sheltering, and taxation had been raised during discussion for
the Senate version of the proposed legislation. She reported
that the committee had trusted the assertion by the
administration that this issue "had been thoroughly vetted
during the negotiations," although the committee had never
verified this. She applauded that there was an independent
consultant to definitively answer these questions for the Alaska
State Legislature.
6:39:08 PM
The committee took an at-ease from 6:39 p.m. to 6:41 p.m.
6:41:25 PM
CHAIR FAIRCLOUGH brought the committee back to order at 6:41
p.m.
MS. PIERRE added that the money would only be spent if the Chair
requested information.
6:41:56 PM
SENATOR MEYER made a motion to authorize the chair, as
procurement officer, to amend the contract amount with Manley &
Brautigam to an amount not to exceed $75,000 and approve the
exemption from solicitation requirements under AS 020(1)(3).
There being no objection, it was so ordered.
6:42:51 PM
ADJOURNMENT
There being no further business before the committee, the
Legislative Budget and Audit Committee meeting was adjourned at
6:42 p.m.
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