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Alaska natural gas board sees problems Members fear open meeting and competitive bid laws will hinder project Larry Persily Petroleum News Juneau Correspondent
Several Alaska Natural Gas Development Authority board members believe the state’s open meetings and purchasing laws will make it hard for them to do their job of building a gas pipeline across the state.
“To be burdened by the competitive bid process, I just don’t think that is going to work,” said board chairman Andy Warwick.
Planning and building a multibillion-dollar natural gas pipeline and negotiating gas purchase and sales contracts also will not work under the constraints of Alaska’s open meetings law, he said.
Warwick, a Fairbanks accountant who served in the Alaska House from 1971-1974 and later as Department of Administration commissioner under Gov. Jay Hammond, said he would prefer to argue for legislative approval to exempt the gas authority from the open meetings law rather than deal with its requirements every time the board wants to make a move.
“I think we will be subject to criticism by the press and the public,” Warwick said at the board’s Dec. 15 meeting. “I want to get out from that. … I’d just as soon get it over with now … and be exempt.”
The board will again consider the issue at its Jan. 12 meeting. Problems expected next year The laws are not so much of a problem this year, Warwick said, as the board isn’t negotiating or designing anything. The problems will start next year, when board members believe they will embark on designing a state-funded project to move North Slope gas to market.
“We’ll be sitting around, wasting time, burning holes in the chairs,” dealing with the public notices, open discussions, competitive bids and other requirements of the laws, Warwick said.
Board member Bob Favretto, a Kenai Peninsula car dealership owner, voiced the same fears as Warwick. “I’m not going to stay here handcuffed and not be able to do things.”
Board members discussed the issue at their Dec. 15 meeting with Leonard Herzog, assistant attorney general assigned to the state gas authority.
“I see the public meeting requirements as a burden that public agencies should try to live with,” Herzog said. He also pointed out to the board that state law allows for executive sessions for financial matters, negotiations and contracts. “We have adequate ways of dealing with it,” he said of board members’ concerns that they would have to negotiate big business deals in public.
As for the state procurement code, Herzog said, the board could ask the Department of Administration to grant the authority some additional latitude in selecting contractors up to a higher dollar amount, or the board could draft its own purchasing policies as long as they follow the intent of the law. Law’s intent is competitive bidding Even if a state agency adopts its own purchasing rules, it cannot avoid the intent of the law, which is competitive bidding and open procurement, Herzog said.
Steve Porter, deputy commissioner at the Department of Revenue and liaison to the gas authority, delivered the same assurances as Herzog that sensitive negotiations could be held confidential under the open meetings law.
Warwick was not convinced. “If we want to do a contract with Bechtel, I want to do it,” giving the international construction company as an example. “I want to be making decisions.”
The board asked at its November meeting for a report on the issue of possibly winning a legislative exemption from the open meeting and procurement laws.
Herzog told members Dec. 15 it’s better to deal with the open meetings law and its requirements, since the board probably could not win a legislative exemption. “No other organization in the state has sought or gotten that relief.” Constitutional problems possible And even if the Legislature wanted to exempt the state gas authority from some of the requirements of the open meetings law, he said, “We could never be totally exempt and have private meetings. There would be constitutional problems.”
Alaska voters created the gas authority by approving a citizens’ initiative on the November 2002 ballot. The authority, with $350,000 in state funds this year, is supposed to present a project plan to the Legislature by June 2004 for construction and operation of a state-owned pipeline to carry North Slope gas to Valdez, where it would be liquefied and shipped to potential buyers in the Far East or U.S. West Coast.
The open meetings act requires reasonable public notice of meetings, public access to meetings, and limits the reasons that state and municipal boards may move into executive session. The governor appointed the seven-member gas authority board in June.
Board member Dan Sullivan, a member of the Anchorage municipal assembly, was the only gas authority member to speak up against pushing for an exemption from the open meetings law. “It’s not as burdensome as it sounds,” he said. More discussion Jan. 12 Herzog said he would research the issue and present more information at the board’s Jan. 12 meeting, though he doesn’t expect the Department of Law would change its advice that the open meetings law allows enough leeway for the gas authority to do its job.
“My advice is to focus on the procurement code,” he said, suggesting the authority draft a set of policies and procedures that are appropriate for the size of the gas pipeline project while still meeting the intent of the state law.
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