ALASKA STATE LEGISLATURE  LEGISLATIVE COUNCIL  MARCH 28, 2017  7:31 AM    MEMBERS PRESENT    Representative Sam Kito, Chair  Senator Bert Stedman, Vice Chair  Representative Matt Claman  Representative Bryce Edgmon  Representative David Guttenberg  Representative Charisse Millett  Representative Dan Ortiz  Representative Louise Stutes  Representative Harriet Drummond, Majority Alternate  Representative David Eastman, Minority Alternate  Senator Lyman Hoffman  Senator Anna MacKinnon  Senator Kevin Meyer  Senator Peter Micciche  Senator Gary Stevens    MEMBERS ABSENT    Senator Pete Kelly  Senator Cathy Giessel, Alternate    OTHER MEMBERS PRESENT        AGENDA    APPROVAL OF AGENDA  APPROVAL OF MINUTES  RATIFICATION OF CHARITY EVENTS  CONTRACT APPROVALS  OTHER COMMITTEE BUSINESS    SPEAKER REGISTER  Tina Strong, Procurement Officer, Legislative Affairs  Agency  Doug Gardner, Director, Legal and Research Services  Theresa Bannister, Attorney, Legal and Research Services  Pam Varni, Executive Director, Legislative Affairs Agency  Jessica Geary, Finance Manager, Legislative Affairs Agency    7:31:06 AM    I. CHAIR SAM KITO called the Legislative Council meeting to  order at 7:31 a.m. in Room 519 (House Finance) of the State  Capitol. Present at the call were Representatives Claman,  Edgmon, Millett, Ortiz, Stutes, Eastman (alternate), and  Kito; Senators Kelly, MacKinnon, Meyer, Micciche, Stevens,  and Stedman. Representatives Drummond (alternate) and  Guttenberg, and Senator Hoffman joined the meeting after  the roll call. Senator Giessel (alternate) was absent.    II. APPROVAL OF AGENDA    VICE CHAIR STEDMAN moved that Legislative Council approve  the agenda.  The motion was approved without objection.    III. APPROVAL OF MINUTES    7:34:43 AM  VICE CHAIR STEDMAN moved that Legislative Council approve  the following minutes:  • December 20, 2016  • January 20, 2017  • February 9, 2017  • February 15, 2017    The motion was approved without objection.    IV. RATIFICATION OF CHARITABLE EVENTS    7:35:24 AM  VICE CHAIR STEDMAN moved that Legislative Council ratify  the Chair's sanctioning of the following charitable events  per AS 24.60.080(a)(2)(B):    Legislative Skits  Bowl for Kids' Sake  Kenai River Jr. Classic  Kenai River Classic  Kenai River Women's Classic    The motion was approved without objection.    V. CONTRACT APPROVALS  a. Ombudsman Lease Renewal  b. Stoel Rives Contract Amendment  c. Wells Fargo Resolution Recovery Plan Amendment    a. Ombudsman Lease Renewal    TINA STRONG, Procurement Officer for the Legislative  Affairs Agency, stated that the original lease between the  Legislative Affairs Agency and JRW Ventures, Windward Town  and Country Plaza, Inc., for the Ombudsman's Anchorage  office space was for three years beginning May 1, 2013, and  terminated April 30, 2016. There were three renewals of  lease available under the lease agreement: each for a one  year period.    She said we have exercised Renewal No. 1 that expires on  April 30, 2017. The Office of the Ombudsman would like to  proceed with Renewal No. 2 for the period May 1, 2017,  through April 30, 2018.    If Legislative Council approves Renewal No. 2, this will  leave one more renewal of lease available before we have to  go out to bid or do a lease extension.    This lease exceeds $35,000 in one fiscal year; therefore,  Legislative Council's approval is required. Ms. Strong said  she was available to answer any questions.    DISCUSSION FOLLOWED regarding support for consolidation of  legislative agencies in the new Anchorage Legislative  Office Building at 1500 W. Benson Boulevard as a way to  reduce lease costs. The Chair noted that this specific  renewal is for the period of one year only, so there will  be time to work on incorporating legislative offices in the  new building.    7:41:24 AM  VICE CHAIR STEDMAN moved that Legislative Council approve  Lease Renewal No. 2 with JRW Ventures, Windward Town and  Country Plaza, Inc. for the time period May 1, 2017 through  April 30, 2018 in the amount of $40,905.64.    The motion passed without objection.    b. Stoel Rives Contract Amendment    DOUG GARDNER, Legal Services Director, provided Council a  summary of the history of the continuing litigation, both  from a lawsuit and an appeal of a prior Legislative Council  Chair procurement decision, regarding the property at 716  W. Fourth Avenue, as well as his estimate of the funding  necessary to continue the ongoing defense needs.    DISCUSSION FOLLOWED about the difficulty of anticipating  expenses in any litigation, as well as the possibility of  an executive session at an upcoming meeting for a Council  briefing regarding risk analysis of the ongoing litigation.    7:48:09 AM  VICE CHAIR STEDMAN moved that Legislative Council approve  an amendment to the Stoel Rives Contract in the amount of  $150,000.    The motion passed without objection.    c. Wells Fargo Resolution Recovery Plan Approval    THERESA BANNISTER, Division of Legal and Research Services,  stated that Wells Fargo, a lessee of the Alaska Legislative  Office Building at 1500 W. Benson Boulevard, sent the  Legislative Affairs Agency a proposed change to the lease  to accommodate their need to comply with federal  requirements by the FDIC that large bank holding companies  and certain other financial institutions establish a  resolution plan on how affairs will be handled if they  should ever go into financial distress, such as bankruptcy.  In order to comply with a plan, Wells Fargo drafted and  sent a proposed amendment to the lease.    Ms. Bannister said that Legal Services tightened up the  language of Wells Fargo's proposal in the amendment  currently before Council; addressing the overly broad  language as well as reclaiming a few rights as the lessor,  while accommodating the needs of Wells Fargo to meet the  FDIC requirements. Wells Fargo accepted the amendment as  drafted by Legal Services. In short, Ms. Bannister said  that if Wells Fargo goes into financial distress, the  Legislature cannot automatically hold them in default; as  long as they make the lease payments and comply with the  rest of the lease terms, they can stay in the building.    Ms. Bannister said the amendment before Council  accomplishes what Wells Fargo needs to do while ensuring  our rights as the Lessor were also protected.    DISCUSSION FOLLOWED regarding specifics of language in the  lease; which party is responsible for addressing property  vandalism; whether the State is protected in the case of  Wells Fargo financial distress; that Legislative Council  does not have to take any action on this amendment and  there would be no consequence to the State; a concern over  the term "a reasonable amount of time" for ensuring lease  payments are made; State liability should Wells Fargo go  into financial distress.    MS. BANNISTER stressed that Legislative Council does not  have to take any action on the request for the amendment by  Wells Fargo.    DISCUSSION FOLLOWED regarding the suggestion that this  amendment could be a negotiating tool to change other  aspects of the existing lease; FDIC requirements and the  Dodd-Frank Act; a comment that the State will have bigger  problems than lease payments if Wells Fargo goes broke; a  repetition that the State is under no legal obligation to  do anything with this amendment; a concern that the Lessor  does not have any control over any potential successor; a  request for a white paper from Legal Services regarding the  lease in general and this amendment in particular;  confirmation that should Wells Fargo go into bankruptcy or  receivership, the Lessor has very little power at that  point, regardless of whether Council approves this  amendment.    CHAIR KITO, in response to a request by Senator Meyer,  tabled the item to allow time for Legal Services to prepare  additional information for Council's consideration. He then  asked Ms. Varni to address the issue Senator Stevens  brought up of graffiti on the "Benson Building" and whether  the Lessor or Lessee is responsible for dealing with it.    PAM VARNI, Executive Director of the Legislative Affairs  Agency, told members that she was made aware of graffiti  spray painted on the building, the sidewalk, and some Wells  Fargo signage at 1500 W. Benson Boulevard: "Oil Kills", "We  Kill", and "Divest". A police report was filed and the  property manager quickly addressed the graffiti, removing  the paint where they could and covering up in areas where  it was difficult to remove paint due to texture and  temperature. She has been in touch with Jeff Radar, Vice  President of Corporate Properties for Wells Fargo out of  San Francisco, and one of the principals for the lease with  Wells Fargo. She would get back to Council with the exact  cost of remedying the removal of the graffiti. In response  to a question by Senator Stevens, Ms. Varni confirmed that  the graffiti was directed at Wells Fargo and not the  Legislature. In response to a question by Chair Kito, Ms.  Varni said that the removal of the graffiti is being  addressed by LAA, but that she would be having a  conversation with Wells Fargo to look at them contributing  to the cost of that remediation. In response to a question  from Senator MacKinnon, Ms. Varni noted that there are  currently neither exterior nor interior cameras at this  building, although there is armed security; and that she  would check to see if another building in the area had  exterior cameras that might have recorded the culprits.    Council took no action with regard to this item.    VI. OTHER COMMITTEE BUSINESS  a. Late Per Diem Request from Representative LeDoux  b. Moving and Travel Subcommittee    a. Per Diem Request from Representative LeDoux    8:16:44 AM  VICE CHAIR STEDMAN moved that that Legislative Council  approve the Late Per Diem Claim for Rep. LeDoux in the  amount of $771.70.    The motion was approved without objection.    b. Moving and Travel Subcommittee    Jessica Geary, Finance Manager and Chair of the Moving and  Travel Subcommittee, stated that before members is a memo  highlighting the proposed recommended changes to the Moving  and Travel Policy, which she proceeded to summarize. She  said the first change was to clarify the appeal process; if  any member disagrees with a decision made denying certain  expenses turned into the Accounting Office, that member can  go to the Legislative Council Chair to request a review of  the full Council. With regard to the limit on weight for  shipping personal household goods and effects, which has  been a maximum of 10,000 pounds, she noted that during her  tenure in the Accounting Office, she has never seen any  shipment near that limit; the average weight shipped is  approximately 3,000 pounds. The proposed change is to  reduce the limit to a maximum of 3,000 pounds of allowable  household goods.    In response to a question from Vice Chair Stedman, Ms.  Geary said that even with new members shipping items for  the first time and establishing a household in Juneau, the  highest weight allotment was 2,900 pounds, and that was a  pretty large amount of furniture. In looking back over a  few sessions, the weight amounts ranged from 200 pounds to  1,500 pounds of household goods. The highest she had ever  processed was 4,400 pounds, which included some very heavy  items; she didn't think it was necessary to allow more than  3,000 pounds. She noted again that there was an exception  process if a Legislator needed to bring more than the  allowable weight.    REPRESENTATIVE EASTMAN asked why we would want Legislators  to have to go through an exception process simply for  having a large families.    MS. GEARY said there is enough flexibility to handle things  on a case-by-case basis, but that she honestly feels that,  after looking over past bills, 3,000 pounds was a  reasonable limit, and that it would be difficult to ship  in-excess of 3,000 pounds. In response to a question by  Senator Stevens, Ms. Geary explained that the exception  process is such that a Legislator contacts the Agency to  explain their specific situation, and the Chair of  Legislative Council or designee has authority to approve  that request with a simple signature.    CHAIR KITO clarified that if an exception is denied by the  Executive Director, as well as the Legislative Council  Chair, the Legislator could appeal to the full Legislative  Council for final consideration. While not explicitly  written in the policy, that is the intent of the exception  process.    SENATOR MICCICHE, noting his household is a "family of six  including a dog and a cat", said that limiting shipments to  3,000 pounds was reasonable, and with the ability to appeal  in certain circumstances, also appropriate. He said the  policy discouraged excessive garage sale purchasing on this  end that was probably not needed and not part of the  legislative process. He had a question regarding the office  move change in policy and agreed to wait until Ms. Geary  reached that part of her presentation before addressing it.    MS. GEARY continued her presentation. She highlighted that  interim storage was available to members and clarified that  the intent of interim storage is to reduce the cost of  shipping those stored items back to district each  adjournment. She stated that another change is to eliminate  in-district storage during session, which is allowed under  the current policy; to her knowledge there hasn't been a  situation where that was necessary, so the provision will  be deleted. Another clarification in language and intent  was to bold the word "only" and change "home" to "primary  residence" in the section defining the conditions under  which a moving company can pick up a Legislator's household  goods. In response to a question by Vice Chair Stedman, she  said that there are a few Legislators who may have  developed a relationship with a particular moving company  and who have requested multiple stops, for which the Agency  was unaware but was then billed in addition to the normal  shipping rate; this change in policy prevents that from  happening. In response to a follow-up question by  Representative Guttenberg, Ms. Geary said that she did not  feel it appropriate to comment whether there had been abuse  in the past, but rather highlighted that the potential for  abuse was there and the recommended change was to address  that possibility and tighten up the language.    CHAIR KITO interrupted to say that the IT Subcommittee item  would be postponed until Council's next meeting, noting  that the room was needed for a House Finance meeting.    MS. GEARY continued her testimony, and moved to the  consolidated office move portion of the policy. She said  the section was confusing and was redefined to clarify the  language. In discussions with both IT and Supply, both  sections tasked with organizing and operating the  consolidated office move, it was determined that 20 was a  reasonable number of office boxes for the annual office  move between district and session offices. This number was  determined by averaging the number of boxes shipped in the  last few consolidated moves, which fell between 15 and 20  boxes per office. In response to a question by Senator  Meyer, Ms. Geary confirmed that the Print Shop can scan  office files, making electronic copies available and  limiting the need to ship as many hard copy files.    Lastly, Ms. Geary stated that language was added to clarify  intent with regard to what items are not allowed to be  included in a household good shipment expense. For  instance, extra car parts are only allowable if a  Legislator has a vehicle in Juneau, and snow mobiles are no  longer accepted as a Legislator's "vehicle". The section on  prohibited materials was expanded for clarity, specifically  adding the language that articles must be necessary in  order to conduct legislative business, as well as a  statement specifically addressing the exclusion of items  purchased after adjournment and/or items that are not used  in the capital city during a legislative session.    SENATOR STEVENS thanked Ms. Geary for putting together the  proposal; he said that the idea behind the proposal was  cost reduction and while we might not know exactly how much  money was saved through these changes, adopting this  proposal will have a substantial impact on the bottom line.    SENATOR MICCICHE said he that wanted the public to  understand the difference between household goods and  office items; with the latter being essential to the  operation of a legislative office, and why it's important  to have flexibility with what's allowable. He commented  that when the Cross Gulf ferry isn't available for  transportation to and/or from Juneau, it was more  challenging for larger families to move their household  goods as the car carrier did not allow for shipping items  inside a Legislator's personal vehicle; and he wanted LAA  to be aware of that issue.    8:34:24 AM  VICE CHAIR STEDMAN moved that Legislative Council approve  the recommended changes to the Legislative Council Moving  and Travel Policy.    The motion passed without objection.    There being no further business before the committee,  Legislative Council adjourned at 8:34 a.m.    8:34:53 AM