Legislature(1995 - 1996)

01/18/1996 09:10 AM House FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                                                                               
                                                                               
                     HOUSE FINANCE COMMITTEE                                   
                        JANUARY 18, 1996                                       
                            9:10 A.M.                                          
                                                                               
  TAPE HFC 96 - 10, Side 1, #000 - end.                                        
  TAPE HFC 96 - 10, Side 2, #000 - #422.                                       
                                                                               
  CALL TO ORDER                                                                
                                                                               
  Co-Chair  Mark Hanley  called  the House  Finance  Committee                 
  meeting to order at 9:10 A.M.                                                
                                                                               
  PRESENT                                                                      
                                                                               
  Co-Chair Hanley               Representative Martin                          
  Co-Chair Foster               Representative Therriault                      
  Representative Kohring        Representative Navarre                         
  Representative Grussendorf    Representative Parnell                         
  Representative Kelly                                                         
                                                                               
  Representatives Brown and  Mulder were  not present for  the                 
  meeting.                                                                     
                                                                               
  ALSO PRESENT                                                                 
                                                                               
  Representative John  Davies; Nelson  Page,  Chair, Board  of                 
  Trustees,  Alaska  Mental  Health  Trust  Authority;  Evelyn                 
  Tucker,  Member,  Board  of Trustees,  Alaska  Mental Health                 
  Trust  Authority;  John  Pugh,  Member,  Board of  Trustees,                 
  Alaska Mental  Health Trust Authority; Kay  Burrows, Member,                 
  Board  of Trustees,  Alaska  Mental Health  Trust Authority;                 
  Phil Younker Jr.,  Member, Board of Trustees,  Alaska Mental                 
  Health  Trust  Authority;  Tom  Hawkins,  Member,  Board  of                 
  Trustees, Alaska Mental Health Trust Authority; John Malone,                 
  Member,  Board  of  Trustees,  Alaska  Mental  Health  Trust                 
  Authority; Steve Planchon, Director,  Lands Unit, Department                 
  of Natural Resources.                                                        
                                                                               
  SUMMARY                                                                      
                                                                               
       MENTAL HEALTH TRUST AUTHORITY BRIEFING                                  
                                                                               
  NELSON PAGE, CHAIR, BOARD OF  TRUSTEES, ALASKA MENTAL HEALTH                 
  TRUST AUTHORITY,  introduced Board members and  provided the                 
  Committee with  copies of  the "Alaska  Mental Health  Trust                 
  Authority Presentation  to the House Finance  Committee" and                 
  the "Reconstitution  of the  Mental  Health Trust  Statewide                 
  Index Map".  [Attachment #1 & #2].                                           
                                                                               
  Mr. Page  provided an  overview of  Attachment #1,  offering                 
  background information on the  extensive litigation process.                 
                                                                               
                                1                                              
                                                                               
                                                                               
  He pointed out  that settlement of  the land trust had  been                 
  passed nearly unanimously  by both Legislative Houses.   The                 
  settlement  ended  thirteen   years  of  litigation  dispute                 
  surrounding the Mental Health Trust Lands.                                   
                                                                               
  The litigation  process cost  millions of  dollars and  much                 
  revenue lost from development opportunities.   He added that                 
  the many years  in negotiation  had paralyzed and  fractured                 
  the mental health community.                                                 
                                                                               
  Mr. Page explained the key terms of the settlement.                          
                                                                               
       *    Mental Health Trust Lands and associated                           
            state lands released for development.                              
                                                                               
       *    Trust  Authority  free   to  use   Trust                           
            resources  to  act  as  a  catalyst  for                           
            change.                                                            
                                                                               
       *    Trust Authority  funding recommendations                           
            considered  in  a  single  appropriation                           
            bill.                                                              
                                                                               
       *    Trust Authority to aid  in comprehensive                           
            planning for mental health.                                        
                                                                               
  All members of the Trust Authority Board have been appointed                 
  by the  Governor since  the 1995  Legislative session.   Mr.                 
  Page  itemized   the  significant  accomplishments   of  the                 
  Authority to date.                                                           
                                                                               
       *    The Trust  Authority now  is in  running                           
            order.                                                             
                                                                               
       *    The  planning  functions of  that Agency                           
            have begun.                                                        
                                                                               
       *    An  active  management  of  the  Trust's                           
            natural resources is in order.                                     
                                                                               
       *    Budget proposals have been submitted.                              
                                                                               
       *    Management principles for the Trust Fund                           
            have been adopted.                                                 
                                                                               
  Mr. Page  emphasized the accomplishments  of the settlement,                 
  noting that at this time, the settlement is on appeal.   The                 
  final decision of approval lies with the Supreme Court.  Mr.                 
  Page outlined the present challenges for the Authority.                      
                                                                               
       *    To assure beneficiaries  that they  will                           
            get the benefit of their bargain.                                  
                                                                               
                                2                                              
                                                                               
                                                                               
       *    Work  with  Legislature   to  make   the                           
            process succeed.                                                   
                                                                               
       *    Encourage  innovation  and  improvements                           
            for Alaska's mental health system.                                 
                                                                               
       *    Avoid reinstating the litigation.                                  
                                                                               
  TOM HAWKINS, MEMBER, BOARD OF TRUSTEES, ALASKA MENTAL HEALTH                 
  TRUST AUTHORITY introduced members of the Board.                             
                                                                               
  STEVE PLANCHON,  DIRECTOR, MENTAL  HEALTH  TRUST LAND  UNIT,                 
  DEPARTMENT OF NATURAL  RESOURCES, explained  that the  Trust                 
  Land Unit  has existed for one year.   He spoke to the small                 
  and dedicated  staff,  noting that  temporary  and  contract                 
  employees are also hired as needed.                                          
                                                                               
  Mr. Planchon pointed  out the  focus of the  mission was  to                 
  generate  revenue for  mental health services,  maintain and                 
  improve  land  and  resource  assets of  the  Trust,  and to                 
  maintain  beneficiary  support of  land  management actions.                 
  Management has  been  established in  consultation with  the                 
  Trust  Authority  with  an emphasis  on  proactive  and cost                 
  effective action.                                                            
                                                                               
  He said currently, there  are a million acres of  land being                 
  managed  by  the Authority.    The Trust  Authority  and the                 
  Department of  Natural Resources  (DNR) have established  an                 
  excellent working relationship based on accountability and a                 
  shared commitment  to making the settlement work.   A smooth                 
  transition  has  been made  from  the entire  DNR Department                 
  management to  a management system  by one unit  within that                 
  Department.                                                                  
                                                                               
  Mr. Planchon continued  by highlighting the accomplishments:                 
  Land  sales,  oil and  gas  leasing, timber  sale,  sand and                 
  gravel sales,  coal development facilitation,  management of                 
  2,400 valid mining claims, management of over 160 commercial                 
  and real estate leases, land donation, and a special  effort                 
  to meet  with  local  government  representatives,  interest                 
  groups  and  individual  members  of   the  public  who  are                 
  interested in Trust Land activities.                                         
                                                                               
  The  final start-up tasks of the Board will include creating                 
  regulations  to  guide  future  management and  development,                 
  creating  a  long term  strategic  plan to  ensure long-term                 
  productivity  of the  trust, and development  and management                 
  with  the  key focus  for  effective management  of existing                 
  claims, leases and contracts.                                                
                                                                               
  Mr. Planchon concluded testimony  by summarizing the revenue                 
                                                                               
                                3                                              
                                                                               
                                                                               
  and cost projections associated with the project.                            
                                                                               
       1995 (six months)   Costs   at   $270,000/Revenue                       
  $380,000                                                                     
       1996                Costs  at  $700,000/Revenue  at  $1                 
  million                                                                      
       1997                Costs at  $700,000/Revenue at  $1.5                 
  million                                                                      
                                                                               
  REPRESENTATIVE  JOHN  DAVIES asked  for  an overview  of the                 
  principle  costs  and  sources  of  revenue.   Mr.  Planchon                 
  advised that  the principle  costs include  a minimum  staff                 
  cost, start-up costs  of establishing  an office in  working                 
  order,  and  reports  combining organizational  information.                 
  Currently,  the  chief  sources   of  revenue  exists   from                 
  contracts  and  leases, adding  that  in the  future, timber                 
  resources will provide great revenues.                                       
                                                                               
  Representative Kelly questioned the extent of royalty growth                 
  resulting from  Fort Knox.   Mr.  Planchon advised  that the                 
  standard three percent (3%) royalty was being received.                      
                                                                               
  PHIL YOUNKER JR.,  MEMBER, BOARD OF TRUSTEES,  ALASKA MENTAL                 
  HEALTH TRUST AUTHORITY,  focused his testimony on  the Trust                 
  Corpus Account.  He  noted that the initial transfer  to the                 
  Department of  Revenue for  the Alaska  Mental Health  Trust                 
  Authority (AMHTA)  had been  $200 million dollars.   In  the                 
  first six months  of management,  the Alaska Permanent  Fund                 
  provided  consultation   for  management  of   those  funds.                 
  Inflation costs incurred required an additional  transfer of                 
  $3.5 million dollars.                                                        
                                                                               
  Mr.  Younker  provided an  explanation  of the  AMHTA Income                 
  Account.    That fund  is  comprised of  transfers  from the                 
  Alaska Permanent Fund income transaction account,  transfers                 
  from the DNR land income and interest earned from the Income                 
  Account.    The  funds  are  used  for  income  spending  on                 
  beneficiaries    operating    and    capital,    based    on                 
  recommendations  from   the  four  beneficiary   boards  and                 
  operating expenses for the Trust and DNR Lands Unit.                         
                                                                               
  Mr.  Younker  elaborated, during  the  past ten  months, the                 
  Board  has  focused on  establishing  a policy  in providing                 
  funds to the beneficiary groups.  The Trust Fund assumptions                 
  are:                                                                         
                                                                               
       *    Estimated payout over 10 years for Trust                           
            beneficiaries                                                      
            $71,487,403                                                        
                                                                               
       *    Value  of  principal  in  10  years                                
            $313,454,996                                                       
                                                                               
                                4                                              
                                                                               
                                                                               
       *    Inflation adjusted principal                                       
            $222,214,144                                                       
                                                                               
       *    Assumptions:                                                       
                                                                               
            -  Inflation                                                       
            3.5%                                                               
            -  Rate of return                       8.0%                       
            -  Payout rate                          3.0%                       
                                                                               
  JOHN PUGH, MEMBER,  BOARD OF TRUSTEES, ALASKA  MENTAL HEALTH                 
  TRUST AUTHORITY, addressed AMHTA's funding priorities:                       
                                                                               
       *    Close Harborview Developmental Center.                             
                                                                               
       *    Increasing service capacity.                                       
                                                                               
       *    Outcome-oriented programs.                                         
                                                                               
       *    Integrated data collection.                                        
                                                                               
  Mr. Pugh  explained  the differences  between the  requested                 
  AMHTA budget and that of the  Governor.  The Governor failed                 
  to fully fund the $4.9  million dollar AMHTA recommendation.                 
  The Governor's budget would provide for a salary maintenance                 
  of effort for state  employees, but not for providers.   The                 
  Governor's  budget  also includes  a  reduction  of $585,000                 
  dollars from Harborview  which would  not be transferred  to                 
  beneficiary services.                                                        
                                                                               
  Mr. Pugh  responded  to  Representative  Martin's  questions                 
  regarding  the  short  term  plan  for  released  Harborview                 
  patients.  He  explained that some  of the "Sourdough"  unit                 
  patients would be  placed on a  waiting list for the  Alaska                 
  Pioneer Homes.  The  Board continues to work on  a discharge                 
  plan for  this coming  year.   The second consideration  and                 
  increment  would   be  for   the  developmentally   disabled                 
  population, placing them into less restrictive settings  and                 
  closer to  their family's  homes.   He  emphasized that  the                 
  costs for these services will not necessarily be less.                       
                                                                               
  (Tape Change, HFC 96-10, Side 2).                                            
                                                                               
  Co-Chair Hanley recommended that the Trust Authority consult                 
  the  Legislature as well as  the Governor when planning next                 
  year's budget.   Mr. Pugh  agreed and added  that a  primary                 
  goal of  the Board would be to attempt to accumulate a State                 
  matching fund and private matching funds.                                    
                                                                               
  KAY BURROWS, MEMBER, BOARD OF TRUSTEES, ALASKA MENTAL HEALTH                 
  TRUST  AUTHORITY,  noted  that the  Board  had  been working                 
                                                                               
                                5                                              
                                                                               
                                                                               
  closely  with  Commissioner  Perdue from  the  Department of                 
  Health and Social Services (DHSS) to produce a comprehensive                 
  integrated mental health  program.   The program would  help                 
  the four boards to work together to coordinate services  and                 
  fund parity.                                                                 
                                                                               
  Ms. Burrows stated that AMHTA has attempted to integrate the                 
  funding  process.    There  are  separate visions  for  each                 
  existing  Board  and  unique priorities  for  each  of them.                 
  Specific attention has  been placed on the  service delivery                 
  system and coordination for each  of the beneficiary groups.                 
                                                                               
                                                                               
  EVELYN  TUCKER,  MEMBER, BOARD  OF  TRUSTEES,  ALASKA MENTAL                 
  HEALTH TRUST  AUTHORITY, spoke about initiatives prepared by                 
  the Department.  She stressed that the Authority has adopted                 
  an outcome  oriented program.   The  main responsibility  of                 
  AMHTA is to find outcomes which are functional and that will                 
  benefit the client.                                                          
                                                                               
  Co-Chair  Hanley  voiced concern  with the  continuation and                 
  proposed budget  for the Alaska Psychiatric Institute (API).                 
  Mr. Pugh reported that there has been significant downsizing                 
  at API; in the Fall, 1995,  only sixty-seven beds were full,                 
  a  significant  shift from  the  previous two  hundred.   He                 
  emphasized  that some patients can not  be served in private                 
  hospitals.  Ms. Burrows added that $750 thousand dollars had                 
  been  set aside  to provide  an evaluation  of  treatment in                 
  rural areas  to those  hospitals which  would be  willing to                 
  take on the care of psychiatric patients.                                    
                                                                               
  Mr. Pugh added that the concern of closing API would require                 
  review  not only  by  the Department  of  Health and  Social                 
  Services, but also the  Department of Public Safety  and the                 
  Department  of  Corrections as  psychiatric patients  can be                 
  violent and a threat to public safety.                                       
                                                                               
  Representative Therriault questioned the differences between                 
  the  alcoholic and  psychological  treatments for  patients.                 
  Ms.  Burrows   explained  that   the  funding   streams  for                 
  treatments have in the past been separated.  Current funding                 
  encourages  agencies  to  co-locate  thus  creating  a  more                 
  comprehensive funding  plan.  She stressed that efficiencies                 
  will be built as  the four beneficiary groups begin  to work                 
  cooperatively.                                                               
                                                                               
  Mr. Pugh concurred suggesting the  use of trust income money                 
  to develop regulations for integrated funding service.  Thus                 
  concluded the presentation of the Alaska Mental Health Trust                 
  Authority.                                                                   
                                                                               
  ADJOURNMENT                                                                  
                                                                               
                                6                                              
                                                                               
                                                                               
  The meeting adjourned at 10:20 A.M.                                          
                                                                               
                     HOUSE FINANCE COMMITTEE                                   
                        JANUARY 18, 1996                                       
                            9:10 A.M.                                          
                                                                               
  TAPE HFC 96 - 10, Side 1, #000 - end.                                        
  TAPE HFC 96 - 10, Side 2, #000 - #422.                                       
                                                                               
  CALL TO ORDER                                                                
                                                                               
  Co-Chair  Mark  Hanley called  the  House Finance  Committee                 
  meeting to order at 9:10 A.M.                                                
                                                                               
  PRESENT                                                                      
                                                                               
  Co-Chair Hanley               Representative Martin                          
  Co-Chair Foster               Representative Therriault                      
  Representative Kohring        Representative Navarre                         
  Representative Grussendorf    Representative Parnell                         
  Representative Kelly                                                         
                                                                               
  Representatives Brown and  Mulder were  not present for  the                 
  meeting.                                                                     
                                                                               
  ALSO PRESENT                                                                 
                                                                               
  Representative  John Davies;  Nelson Page,  Chair,  Board of                 
  Trustees,  Alaska  Mental  Health  Trust  Authority;  Evelyn                 
  Tucker,  Member, Board  of  Trustees,  Alaska Mental  Health                 
  Trust  Authority;  John  Pugh,  Member,  Board  of Trustees,                 
  Alaska Mental  Health Trust Authority; Kay  Burrows, Member,                 
  Board of  Trustees, Alaska  Mental  Health Trust  Authority;                 
  Phil Younker Jr.,  Member, Board of Trustees,  Alaska Mental                 
  Health  Trust  Authority;  Tom  Hawkins,  Member,  Board  of                 
  Trustees, Alaska Mental Health Trust Authority; John Malone,                 
  Member,  Board  of  Trustees,  Alaska  Mental  Health  Trust                 
  Authority; Steve Planchon,  Director, Lands Unit, Department                 
  of Natural Resources.                                                        
                                                                               
  SUMMARY                                                                      
                                                                               
       MENTAL HEALTH TRUST AUTHORITY BRIEFING                                  
                                                                               
  NELSON PAGE, CHAIR, BOARD OF  TRUSTEES, ALASKA MENTAL HEALTH                 
  TRUST AUTHORITY,  introduced Board members and  provided the                 
  Committee with  copies of  the "Alaska  Mental Health  Trust                 
  Authority Presentation to  the House Finance Committee"  and                 
  the  "Reconstitution of  the Mental  Health  Trust Statewide                 
  Index Map".  [Attachment #1 & #2].                                           
                                                                               
                                                                               
                                7                                              
                                                                               
                                                                               
  Mr. Page  provided an  overview of  Attachment #1,  offering                 
  background information on the extensive litigation  process.                 
  He pointed out  that settlement of  the land trust had  been                 
  passed nearly unanimously  by both Legislative Houses.   The                 
  settlement  ended  thirteen  years  of  litigation   dispute                 
  surrounding the Mental Health Trust Lands.                                   
                                                                               
  The litigation  process cost  millions of  dollars and  much                 
  revenue lost from development opportunities.   He added that                 
  the many years  in negotiation  had paralyzed and  fractured                 
  the mental health community.                                                 
                                                                               
  Mr. Page explained the key terms of the settlement.                          
                                                                               
       *    Mental Health Trust Lands and associated                           
            state lands released for development.                              
                                                                               
       *    Trust  Authority  free   to  use   Trust                           
            resources  to  act  as  a  catalyst  for                           
            change.                                                            
                                                                               
       *    Trust Authority funding  recommendations                           
            considered  in  a  single  appropriation                           
            bill.                                                              
                                                                               
       *    Trust Authority to aid  in comprehensive                           
            planning for mental health.                                        
                                                                               
  All members of the Trust Authority Board have been appointed                 
  by  the Governor since  the 1995  Legislative session.   Mr.                 
  Page  itemized  the   significant  accomplishments  of   the                 
  Authority to date.                                                           
                                                                               
       *    The Trust  Authority now  is in  running                           
            order.                                                             
                                                                               
       *    The  planning  functions of  that Agency                           
            have begun.                                                        
                                                                               
       *    An  active  management  of  the  Trust's                           
            natural resources is in order.                                     
                                                                               
       *    Budget proposals have been submitted.                              
                                                                               
       *    Management principles for the Trust Fund                           
            have been adopted.                                                 
                                                                               
  Mr. Page emphasized  the accomplishments of  the settlement,                 
  noting that at this  time, the settlement is on appeal.  The                 
  final decision of approval lies with the Supreme Court.  Mr.                 
  Page outlined the present challenges for the Authority.                      
                                                                               
                                                                               
                                8                                              
                                                                               
                                                                               
       *    To assure beneficiaries  that they  will                           
            get the benefit of their bargain.                                  
                                                                               
       *    Work  with  Legislature   to  make   the                           
            process succeed.                                                   
                                                                               
       *    Encourage  innovation  and  improvements                           
            for Alaska's mental health system.                                 
                                                                               
       *    Avoid reinstating the litigation.                                  
                                                                               
  TOM HAWKINS, MEMBER, BOARD OF TRUSTEES, ALASKA MENTAL HEALTH                 
  TRUST AUTHORITY introduced members of the Board.                             
                                                                               
  STEVE  PLANCHON, DIRECTOR,  MENTAL HEALTH  TRUST  LAND UNIT,                 
  DEPARTMENT  OF NATURAL RESOURCES,  explained that  the Trust                 
  Land Unit has existed for one  year.  He spoke to the  small                 
  and  dedicated staff,  noting  that temporary  and  contract                 
  employees are also hired as needed.                                          
                                                                               
  Mr. Planchon pointed  out the  focus of the  mission was  to                 
  generate revenue  for mental  health services, maintain  and                 
  improve  land  and  resource assets  of  the  Trust,  and to                 
  maintain  beneficiary support  of  land management  actions.                 
  Management  has been  established  in consultation  with the                 
  Trust  Authority  with  an emphasis  on  proactive  and cost                 
  effective action.                                                            
                                                                               
  He said currently, there  are a million acres of  land being                 
  managed by  the  Authority.   The  Trust Authority  and  the                 
  Department of  Natural Resources  (DNR) have  established an                 
  excellent working relationship based on accountability and a                 
  shared commitment to  making the settlement work.   A smooth                 
  transition  has  been made  from  the entire  DNR Department                 
  management to  a management system  by one unit  within that                 
  Department.                                                                  
                                                                               
  Mr. Planchon continued by highlighting the  accomplishments:                 
  Land sales,  oil  and gas  leasing,  timber sale,  sand  and                 
  gravel sales, coal  development facilitation, management  of                 
  2,400 valid mining claims, management of over 160 commercial                 
  and real estate leases, land  donation, and a special effort                 
  to  meet  with  local  government representatives,  interest                 
  groups  and  individual  members  of   the  public  who  are                 
  interested in Trust Land activities.                                         
                                                                               
  The final start-up tasks of  the Board will include creating                 
  regulations  to  guide  future management  and  development,                 
  creating  a  long term  strategic  plan to  ensure long-term                 
  productivity of  the trust,  and development and  management                 
  with  the  key focus  for  effective management  of existing                 
  claims, leases and contracts.                                                
                                                                               
                                9                                              
                                                                               
                                                                               
  Mr. Planchon concluded testimony by summarizing  the revenue                 
  and cost projections associated with the project.                            
                                                                               
       1995 (six months)   Costs   at   $270,000/Revenue                       
  $380,000                                                                     
       1996                Costs  at  $700,000/Revenue  at  $1                 
  million                                                                      
       1997                Costs at  $700,000/Revenue at  $1.5                 
  million                                                                      
                                                                               
  REPRESENTATIVE  JOHN  DAVIES asked  for  an overview  of the                 
  principle  costs  and  sources  of  revenue.   Mr.  Planchon                 
  advised that  the principle  costs include  a minimum  staff                 
  cost, start-up costs  of establishing  an office in  working                 
  order,  and  reports  combining organizational  information.                 
  Currently,  the   chief  sources  of  revenue   exists  from                 
  contracts  and  leases, adding  that  in the  future, timber                 
  resources will provide great revenues.                                       
                                                                               
  Representative Kelly questioned the extent of royalty growth                 
  resulting  from Fort  Knox.  Mr.  Planchon advised  that the                 
  standard three percent (3%) royalty was being received.                      
                                                                               
  PHIL YOUNKER JR.,  MEMBER, BOARD OF TRUSTEES,  ALASKA MENTAL                 
  HEALTH TRUST AUTHORITY,  focused his testimony on  the Trust                 
  Corpus Account.  He  noted that the initial transfer  to the                 
  Department of  Revenue for  the Alaska  Mental Health  Trust                 
  Authority (AMHTA)  had been  $200 million  dollars.   In the                 
  first six months  of management,  the Alaska Permanent  Fund                 
  provided  consultation  for   management  of  those   funds.                 
  Inflation costs incurred required an additional transfer  of                 
  $3.5 million dollars.                                                        
                                                                               
  Mr.  Younker  provided an  explanation  of the  AMHTA Income                 
  Account.   That  fund is  comprised  of transfers  from  the                 
  Alaska Permanent Fund income  transaction account, transfers                 
  from the DNR land income and interest earned from the Income                 
  Account.    The  funds  are  used  for  income  spending  on                 
  beneficiaries    operating    and    capital,    based    on                 
  recommendations  from   the  four  beneficiary   boards  and                 
  operating expenses for the Trust and DNR Lands Unit.                         
                                                                               
  Mr.  Younker  elaborated, during  the  past ten  months, the                 
  Board  has  focused on  establishing  a policy  in providing                 
  funds to the beneficiary groups.  The Trust Fund assumptions                 
  are:                                                                         
                                                                               
       *    Estimated payout over 10 years for Trust                           
            beneficiaries                                                      
            $71,487,403                                                        
                                                                               
                                                                               
                               10                                              
                                                                               
                                                                               
       *    Value  of   principal  in  10  years                               
            $313,454,996                                                       
                                                                               
       *    Inflation adjusted principal                                       
            $222,214,144                                                       
                                                                               
       *    Assumptions:                                                       
                                                                               
            -  Inflation                                                       
            3.5%                                                               
            -  Rate of return                       8.0%                       
            -  Payout rate                          3.0%                       
                                                                               
  JOHN PUGH, MEMBER,  BOARD OF TRUSTEES, ALASKA  MENTAL HEALTH                 
  TRUST AUTHORITY, addressed AMHTA's funding priorities:                       
                                                                               
       *    Close Harborview Developmental Center.                             
                                                                               
       *    Increasing service capacity.                                       
                                                                               
       *    Outcome-oriented programs.                                         
                                                                               
       *    Integrated data collection.                                        
                                                                               
  Mr.  Pugh explained  the  differences between  the requested                 
  AMHTA budget and that of the  Governor.  The Governor failed                 
  to fully fund the $4.9  million dollar AMHTA recommendation.                 
  The Governor's budget would provide for a salary maintenance                 
  of effort for state  employees, but not for providers.   The                 
  Governor's budget  also  includes a  reduction  of  $585,000                 
  dollars from Harborview  which would  not be transferred  to                 
  beneficiary services.                                                        
                                                                               
  Mr.  Pugh  responded  to  Representative Martin's  questions                 
  regarding  the  short  term  plan  for  released  Harborview                 
  patients.   He explained  that some of  the "Sourdough" unit                 
  patients would be  placed on a  waiting list for the  Alaska                 
  Pioneer Homes.  The  Board continues to work on  a discharge                 
  plan  for this coming  year.   The second  consideration and                 
  increment  would   be  for   the  developmentally   disabled                 
  population,  placing them into less restrictive settings and                 
  closer  to their  family's homes.   He  emphasized that  the                 
  costs for these services will not necessarily be less.                       
                                                                               
  (Tape Change, HFC 96-10, Side 2).                                            
                                                                               
  Co-Chair Hanley recommended that the Trust Authority consult                 
  the Legislature as well as  the Governor when planning  next                 
  year's budget.   Mr. Pugh  agreed and added  that a  primary                 
  goal of the Board would be  to attempt to accumulate a State                 
  matching fund and private matching funds.                                    
                                                                               
                                                                               
                               11                                              
                                                                               
                                                                               
  KAY BURROWS, MEMBER, BOARD OF TRUSTEES, ALASKA MENTAL HEALTH                 
  TRUST  AUTHORITY,  noted  that the  Board  had  been working                 
  closely  with Commissioner  Perdue  from  the Department  of                 
  Health and Social Services (DHSS) to produce a comprehensive                 
  integrated mental health  program.   The program would  help                 
  the four boards to work  together to coordinate services and                 
  fund parity.                                                                 
                                                                               
  Ms. Burrows stated that AMHTA has attempted to integrate the                 
  funding  process.    There  are  separate visions  for  each                 
  existing  Board  and  unique priorities  for  each  of them.                 
  Specific attention has  been placed on the  service delivery                 
  system and coordination for each  of the beneficiary groups.                 
                                                                               
                                                                               
  EVELYN TUCKER,  MEMBER,  BOARD OF  TRUSTEES,  ALASKA  MENTAL                 
  HEALTH TRUST AUTHORITY, spoke  about initiatives prepared by                 
  the Department.  She stressed that the Authority has adopted                 
  an outcome  oriented program.   The  main responsibility  of                 
  AMHTA is to find outcomes which are functional and that will                 
  benefit the client.                                                          
                                                                               
  Co-Chair Hanley  voiced  concern with  the continuation  and                 
  proposed budget for the  Alaska Psychiatric Institute (API).                 
  Mr. Pugh reported that there has been significant downsizing                 
  at API; in the Fall, 1995,  only sixty-seven beds were full,                 
  a significant  shift  from the  previous  two hundred.    He                 
  emphasized  that some patients can  not be served in private                 
  hospitals.  Ms. Burrows added that $750 thousand dollars had                 
  been set  aside  to provide  an evaluation  of treatment  in                 
  rural  areas to  those hospitals which  would be  willing to                 
  take on the care of psychiatric patients.                                    
                                                                               
  Mr. Pugh added that the concern of closing API would require                 
  review  not only  by  the Department  of  Health and  Social                 
  Services, but also  the Department of Public Safety  and the                 
  Department of  Corrections  as psychiatric  patients can  be                 
  violent and a threat to public safety.                                       
                                                                               
  Representative Therriault questioned the differences between                 
  the  alcoholic and  psychological  treatments for  patients.                 
  Ms.  Burrows  explained   that  the   funding  streams   for                 
  treatments have in the past been separated.  Current funding                 
  encourages  agencies  to  co-locate  thus  creating  a  more                 
  comprehensive funding plan.   She stressed that efficiencies                 
  will be built as  the four beneficiary groups begin  to work                 
  cooperatively.                                                               
                                                                               
  Mr. Pugh concurred suggesting the use of trust income  money                 
  to develop regulations for integrated funding service.  Thus                 
  concluded the presentation of the Alaska Mental Health Trust                 
  Authority.                                                                   
                                                                               
                               12                                              
                                                                               
                                                                               
  ADJOURNMENT                                                                  
                                                                               
  The meeting adjourned at 10:20 A.M.                                          
                                                                               
                                                                               
                               13                                              

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