Legislature(2019 - 2020)SENATE FINANCE 532
01/31/2019 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Presentation: Alaska Mental Health Trust Authority (amhta) | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
SENATE FINANCE COMMITTEE
January 31, 2019
9:02 a.m.
9:02:22 AM
CALL TO ORDER
Co-Chair Stedman called the Senate Finance Committee
meeting to order at 9:02 a.m.
MEMBERS PRESENT
Senator Natasha von Imhof, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Click Bishop
Senator Donny Olson
Senator Mike Shower
Senator Bill Wielechowski
Senator Peter Micciche
MEMBERS ABSENT
Senator Lyman Hoffman
Senator David Wilson
ALSO PRESENT
Mike Abbott, Chief Executive Officer, Alaska Mental Health
Trust Authority; Mary Jane Michael, Chair, Alaska Mental
Health Trust Authority; Representative Andy Josephson;
Senator Cathy Giessel.
PRESENT VIA TELECONFERENCE
Kris Curtis, Legislative Auditor, Alaska Division of
Legislative Audit.
SUMMARY
^PRESENTATION: ALASKA MENTAL HEALTH TRUST AUTHORITY (AMHTA)
9:05:12 AM
KRIS CURTIS, LEGISLATIVE AUDITOR, ALASKA DIVISION OF
LEGISLATIVE AUDIT (via teleconference), referred to, "A
Performance Review of the Department of Revenue, Alaska
Mental Health Trust Authority Asset Management and Other
Select Issues" (copy on file).
9:34:49 AM
Co-Chair Stedman stated that the process was underway for a
long time, and the audit was requested by Legislative
Budget and Audit. He remarked that the audit was presented,
because of its significance and the interest that the
legislature does not go into endless litigation. He felt
that it was beneficial that the audit be summarized, and
then commented by Mr. Abbott.
9:37:06 AM
MIKE ABBOTT, CHIEF EXECUTIVE OFFICER, ALASKA MENTAL HEALTH
TRUST AUTHORITY, introduced himself. He provided comments
on the audit. He thanked the executive director of the
Permanent Fund Corporation, Angela Rodell.
9:49:45 AM
Co-Chair Stedman queried the personnel changes and the
number of new Board members.
Mr. Abbott replied that the Board chair would introduce the
trustees. He stated that he was a new CEO in the current
year. He remarked that the Land Director was also new in
the current year. He also noted that there was a new CFO,
who came from the North Slope.
Senator Bishop wondered what was done to protect the
trustees through trustee training.
Mr. Abbott replied that the trust had taken advantage of
the resources available through the Department of Law
(LAW).
9:54:20 AM
Senator Bishop encouraged annual trustee training for
fiduciary responsibility, and wondered whether a policy
could be purchased to hold the trustees harmless.
Mr. Abbott replied that most of that protection was
provided through the state's risk management program.
Senator Olson noted that audits were unpleasant. He felt
that the most troubling thing was on page 41, which showed
that multiple trustees were intentionally avoiding
discussions. He wondered whether any Board members had
resigned because of the situation.
Mr. Abbott replied in the affirmative. He stated that the
Board Chair resigned during the time that the poor behavior
was occurring. There was also significant changeover on the
Board.
Senator Olson wondered whether corrective action had
occurred by the personnel and Board.
Ms. Curtis stated that she could not comment on that issue.
9:59:52 AM
Mr. Abbott discussed, "Legislative Presentation, Senate
Finance Committee" (copy on file).
10:00:22 AM
MARY JANE MICHAEL, CHAIR, ALASKA MENTAL HEALTH TRUST
AUTHORITY, briefly highlighted her background.
Ms. Michael highlighted slide 2, "Trustees":
?Mary Jane Michael, chair
?Jerome Selby, vice chair
?Carlton Smith, secretary
?Vern? Boerner
?Christopher Cooke
?Laraine Derr
?Paula Easley
Mr. Abbott highlighted slide 3, "Trust Beneficiaries":
Beneficiaries include Alaskans who experience:
?Mental illnesses
?Developmental disabilities
?Alzheimer's disease and related dementias
?Traumatic brain injuries
?Substance abuse disorders
The Trust also works in prevention and early
intervention services for individuals at risk of
becoming beneficiaries.
Mr. Abbott addressed slide 4, "Grant Impacts, Grants
Awarded in FY18":
ousing
?Medicaid 1115 Behavioral Health Waiver
?Alaska Psychiatric Institute (API)
?Crisis Stabilization
?Early Childhood Prevention/Early Intervention
?Reentry
Mr. Abbott looked at slide 5, "FY20 Anticipated Available
Funding."
Mr. Abbott highlighted slide 6, "Trust Land Office Annual
Revenue."
Mr. Abbott addressed slide 7, "Trust Land Office Principal
and Revenue."
10:11:03 AM
Co-Chair von Imhof looked at slide 5, and queried the total
portfolio at the Permanent Fund.
Mr. Abbott responded that the Trust had approximately $550
million of current invested assets. She stressed that they
were primarily managed by the Alaska Permanent Fund, with
some managed by the Department of Revenue (DOR), through a
slightly different management process. He stated that the
$550 million was a combination of the Mental Health Trust
Fund, was the balance and reserves.
Co-Chair Stedman wondered how long the modified endowment
structure been in place.
Mr. Abbott replied that it was much lower in the early days
of the trust at a 2 percent draw, and had grown over time
as the trust assets had grown and stabilized. He remarked
that the 4.25 percent draw had been in place for more than
ten years.
Co-Chair von Imhof looked at slide 6. She pointed out that
while the portfolio was managed by the Permanent Fund, the
asset mix was a little different than other endowments due
to the million acres of land with different resources. She
wondered how the resources were considered with regard to
cash flow.
10:15:22 AM
Mr. Abbott discussed the highlights of the Trust Land
Office.
10:21:04 AM
Senator Wielechowski looked at slide 5. He surmised that
the million acres was generating $4.2 million.
Mr. Abbott replied that the million acres was likely
generating closer to $12 million. The $4.8 million was what
was expendable on an annual basis. The balance was invested
permanently.
Senator Wielechowski wondered whether $10 to $20 per acre
was a reasonable return, and queried the historic return of
the $550 million invested by the Permanent Fund.
Mr. Abbott replied that the Trust assets that were managed
by the Permanent Fund were comingled asset with the Alaska
Permanent Fund. He stated that roughly one percent of the
corporation's fund under management were trust funds. He
stated that the Trust was a small participant in the
corporation's activity. He noted that historic returns have
swung in good or bad directions.
Senator Micciche requested details on what the lands were
producing. He queried the high value of minerals and
materials in FY 13 versus the other years.
Mr. Abbott agreed to follow up with detail. He stated that
one of the Trust's greatest producing assets was the Fort
Knox Gold Mine, because it was the landowner for most of
the state lands associated with that mine.
10:25:09 AM
Senator Micciche surmised that the green section was the
earnings income that can be spent, and the principal was
the earnings for the year that were deposited into the
permanent investment.
Mr. Abbott replied in the affirmative.
Senator Wielechowski wondered if the total value of the
million acres was known.
Mr. Abbott replied in the negative. The processing of
appraising the acres would be extremely expensive, and was
not otherwise required by auditing processes.
Co-Chair von Imhof requested the balance of the principal.
Co-Chair Stedman remarked that there should be a review of
the payout and the averaging, and what is good and bad
about that issue.
Senator Wielechowski stressed that he was interested in the
revenue generated from that million acres, and would like a
rough estimate. He wondered whether the trust had ever
considered selling that land, and investing that money with
a 8 to 10 percent return.
Mr. Abbott replied in the affirmative, and stated that they
were an active land seller.
10:30:32 AM
Co-Chair Stedman added that enhancing waterfront property
should not have a setback.
Mr. Abbott discussed slide 8, "Trust Investment Payout
History."
Mr. Abbott highlighted slide 9, "FY 20 Trust Grant
Allocations":
Authority Grants
$12,336.7
Designated grants to community providers, nonprofits,
local governments and Tribal organizations.
Includes $1.7 M in mini grants.
MHTAAR
$10,735.7 Designated grants to state agencies, require
receipt authority
Mr. Abbott addressed slide 10, "Administrative Budgets":
Trust Authority
?Trustees approved: $4,135.3
?Governor's proposed budget: $TBD
Trust Land Office
?Trustees approved: $4,568.4
?Governor's proposed budget: $TBD
Same administrative spending levels as FY19
Mr. Abbott looked at slide 11, "Trust Priorities":
?Medicaid Reform
?Criminal Justice Reform
Established Focus Areas
?Disability Justice
?Substance Abuse Prevention and Treatment
?Beneficiary Employment and Engagement
?Housing and Long-term Services and Supports
Mr. Abbott discussed slide 12, "Mental Health Budget Bill":
?Trustees approved $10.7M in Mental HealthTrust
Authority Authorized Receipts (MHTAAR) to SOA
departments for beneficiary related programs and
projects
?Trustees also made recommendations of $5.5Min GF/MH
funds to the Governor and Legislature
10:35:48 AM
Mr. Abbott looked at slide 13, "FY20 GF/MH
Recommendations."
Mr. Abbott displayed slide 14, "Advocacy":
Promote understanding of our beneficiaries and the
services needed to support them in the community
?Focus on programs and laws that will impact Trust
beneficiaries
?Work with state departments, lawmakers and others to
advise on funding and policies
Co-Chair von Imhof noted that the income was described in
slide 5 as $31.7 million. She noted the spending as
outlined throughout the slide deck. She requested a slide
that showed income and all expenses in the future. She
noted that the money was the mental health trust money from
the GF, because it was DGF.
Mr. Abbott agreed.
Co-Chair Stedman stated that Co-Chair von Imhof would be
the subcommittee chair for the Department of Health and
Social Services.
ADJOURNMENT
10:40:49 AM
The meeting was adjourned at 10:40 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 013119 AMHT response to Audit.pdf |
SFIN 1/31/2019 9:00:00 AM |
AMHTA |
| 013119 AMHTA-Final-Audit.pdf |
SFIN 1/31/2019 9:00:00 AM |
AMHTA |
| 013119 Legislative Presentation 1.29.19 - S FIN.pdf |
SFIN 1/31/2019 9:00:00 AM |
AMHTA |