Legislature(2023 - 2024)SENATE FINANCE 532
02/01/2024 09:00 AM Senate FINANCE
Note: the audio ![]()
and video ![]()
recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.
| Audio | Topic |
|---|---|
| Start | |
| Presentation: Alaska Mental Health Trust Authority Update | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 188 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE BILL NO. 188
"An Act making appropriations for the operating and
capital expenses of the state's integrated
comprehensive mental health program; and providing for
an effective date."
^PRESENTATION: ALASKA MENTAL HEALTH TRUST AUTHORITY UPDATE
9:03:13 AM
ANITA HALTERMAN, CHAIR, BOARD OF TRUSTEES, ALASKA MENTAL
HEALTH TRUST AUTHORITY, introduced herself and relayed that
the Alaska Mental Health Trust Authority was a grant maker,
an advocate for vulnerable Alaskans, and a systems change
agent. She continued that by working with state and local
governments, tribes, non-profits, and providers, it
endeavored to build on a continuum of care and improve
outcomes for beneficiary. She hoped that the presentation
would illustrate that AMHTA managed its resources prudently
and effectively.
Ms. Halterman discussed a presentation entitled "Senate
Finance Committee February 1, 2024" (copy on file). He
turned to slide 2, "Trustees":
• Anita Halterman, Chair
• Brent Fisher, Vice Chair
• Agnes Moran, Secretary, Program & Planning Committee
Chair
• John Sturgeon, Resource Management Committee Chair
• Kevin Fimon, Audit & Risk Committee Chair
• John Morris, Finance Committee Chair
• Rhonda Boyles, Trustee
Ms. Halterman noted that the board of trustees was an
independent board that provided governance, fiduciary
oversight, and guidance to the organization to achieve the
mission of the trust. The trustees had five-year terms,
were appointed by the governor, and were confirmed by the
legislature.
9:05:02 AM
Ms. Halterman turned to slide 3, "Trust Beneficiaries":
Trust beneficiaries include Alaskans who experience:
• Mental illnesses
• Intellectual and/or developmental disabilities
• Alzheimer's disease and related dementia
• Traumatic brain injuries
• Substance use disorders
Ms. Halterman recognized that many AMHTA beneficiaries fell
into more than one of the categories on the slide. The
organization supported youth and adult beneficiaries, and
prioritized individuals that had behavioral health
conditions or developmental disabilities that placed them
at risk of institutionalization if there was not proper
support and services. She mentioned prevention as part of
the mission.
Ms. Halterman referenced slide 4, "Mission of the Trust":
• Administer the Mental Health Trust, a perpetual
trust
• Improve lives and circumstances of Trust
beneficiaries
• Protect and enhance value of Trust lands while
maximizing revenues from them over time
Ms. Halterman noted that AMHTA was a state corporation that
administered the trust. It operated much like a private
corporation and used its lands and cash assets to help
ensure that the state had a comprehensive suite of mental
health and disability services to meet the needs of
beneficiaries. The AMHTA Land Office was contracted
exclusively by the trust to manage approximately one
million acres of land and other non-cash assets in order to
generate revenue over time.
Co-Chair Hoffman asked if there were any trustees from
rural Alaska.
Ms. Halterman noted that Agnes Moran was from Ketchikan.
She noted that most of the trustees were based in the
Anchorage region.
Co-Chair Hoffman asked if the answer to his question was
no.
Ms. Halterman agreed that the answer was no.
Co-Chair Stedman expressed his appreciation for
representation from Southeast Alaska.
9:08:03 AM
STEVE WILLIAMS, CHIEF EXECUTIVE OFFICER, ALASKA MENTAL
HEALTH TRUST AUTHORITY, turned to slide 5, "Financial
Position," which showed a bar graph of trust invested
assets since its inception in 1997 through 2023. He pointed
out steady growth of the trust over time, with occasional
dips that reflected the national economic picture. He
observed growth over FY 22. He cited the total invested
assets of $818 million. He identified that the green bar
represented the corpus of the trust, which equated roughly
$538 million. The light blue showed budget reserves, which
represented roughly $218 million. The dark blue portion of
the bar represented AMHTA real estate equity, which totaled
$61 million. He recalled that the previous time he
presented in committee, AMHTAs total invested assets were
$809 million, and the growth from the previous year was
largely due to the way the assets had performed and other
revenue generated by the land office.
Co-Chair Stedman asked Mr. Williams to discuss the dip in
2008 and 2009 and to address what kind of payout was made
by the land office. He asked how the assets were managed to
be successful.
Mr. Williams identified that in 2008, 2009, and 2010, the
country had been going through a downturn in the economy.
He noted that the land office worked to mitigate the dips
and worked on continuing to make grants and fulfill its
commitments was through the budget reserve. The target for
the reserve was a 400 percent payout for four years, with
the goal of uninterrupted grant-making or operations.
Co-Chair Stedman asked if the trust had four years of
reserves set aside and a payout. He asked for greater
detail.
Mr. Williams noted that a subsequent slide would address
the question.
Co-Chair Hoffman recalled that the trust was managed by the
Alaska Permanent Fund Corporation (APFC).
Mr. Williams relayed that the trust's investments were at
the APFC as well as some assets at the Department of
Revenue Division of Treasury.
Senator Kiehl observed that there was no drop in the
trust's corpus value during the 2008 2009 market crash,
although the Permanent Fund had a drop in value during the
same period. He asked for more information.
Mr. Williams offered to provide a written answer at a later
time.
9:12:53 AM
Mr. Williams considered slide 6, "Commercial Real Estate":
• Occupancy rate for seven Trust-owned properties is
currently 98%
• Portfolio exceeding national performance benchmarks
• CRE investments are actively managed with a focus on
performance, risk, and ongoing hold/sell analyses
• Managed as 7 to 20-year investments
Mr. Williams recalled that the trust's real estate equity
was approximately $61 million. He listed commercial
properties in Anchorage, Washinton, and Texas. He noted
that the trusts commercial property occupancy was above
the national average of 80 to 81 percent. He explained that
the properties were exceeding national benchmarks, and he
attributed the occupancy by active management by the staff
at the trust land office (TLO). He highlighted the last
bullet and noted that the Resource Management Committee had
met at the beginning of the previous month and had charged
the TLO with continuing to manage the property, but bring
forward any people that had an opportunity for sale. The
trust was in the process of looking at properties to sell
when it was fiduciarily prudent.
Co-Chair Stedman asked Mr. Williams to provide a brief
history on the issue of property, which he thought had been
a point of contention for several years.
Mr. Williams cited that the history went back to the mid-
2000s, when the board of trustees at the time had used
trust principal to invest in commercial real estate. The
intent had been to generate a revenue stream to help ride
out any downturns in the trusts invest assets. The
properties had been purchased and actively managed, and
there had been questions about whether the trusts
principal could be used for the purchase of the properties.
The total amount invested across seven assets was roughly
$39 million. A few years previously the board of trustees
took trust income and transferred it into the corpus of the
trust to address the issue.
Co-Chair Stedman asked if 98 percent occupancy was
substantially higher than five years previously.
Mr. Williams was not aware of the occupancy five years
previously but knew the rate was higher than the previous
year.
Co-Chair Stedman asked Mr. Williams to get back to the
committee with the information, which he thought was
positive. He assumed cash flow from the properties had also
improved. He asked Mr. Williams to include the information.
Mr. Williams agreed to follow up with the information.
Senator Kiehl referenced the legislative audit of AMHTA,
and asked if the finding had indicated that the transfer of
the $39 million had resolved the question of how AMHTA
assets were managed under the law.
Mr. Williams relayed that the issue of transferring the $39
million into the corpus of the fund addressed the issue of
whether or not the principal should have been used to
purchase the assets at the time.
Co-Chair Stedman asked if Senator Kiehl wanted more detail.
Senator Kiehl thought there may be a pending request for a
follow-up audit.
Co-Chair Stedman suggested a request for an update.
Senator Kiehl clarified that he had not requested a follow-
up audit.
9:17:56 AM
Mr. Williams displayed slide 7, "FY25 Available Funding,"
which showed two tables showing the trust's current and
historical available funding. He thought the slide might
address Co-Chair Stedman's earlier question. He explained
that when calculating available funds for appropriation,
the trust looked at four different revenue streams, each of
which considered a four-year average as a basis for
generating estimated available spending. He noted that the
payout percentage was 4.25 percent. The prior year funds
carry-forward were from unexpended grant funds. The lapse
came back to the trust for future expenditure. The four-
year average for FY 25 was $2.2 million.
Mr. Williams addressed TLO spendable income, which was
estimated to be $3.7 million. The last row showed interest
earnings of $189,500. He explained that the four-year
lookback was done in an endeavor to mitigate highs and lows
of any of the revenue categories to provide predictable
funding. He highlighted the chart on the right that showed
available spending the previous five years, indicating
growth since FY 20.
Co-Chair Stedman considered that the committee asked about
the lookback and payout every year as an exercise in
comparing and contrasting the trust with the Alaska
Permanent Fund. He thought some members felt that the five
percent payout was on the high side and could be
problematic in certain markets. He thought AMHTA had a more
conservative structure and payout while still being able to
serve beneficiaries without having to come to the
legislature for additional funds.
Mr. Williams added that the 4.25 percent was the current
payout percentage. The previous year Callan had done a
review of the percentage to determine if adjustments were
needed. He noted that the 4.25 percent had not been a
historical percentage of payout since the trusts
inception, but had grown over time. He noted that the third
party considered the payout percentage to ensure there was
funding for todays services and future beneficiaries.
Co-Chair Stedman asked for a synopsis of Mr. Williams
answer in writing.
Mr. Williams agreed.
Co-Chair Stedman relayed that the committee had been
reluctant to request entities like AMHTA, APFC, or the
retirement system to chase returns to increase the
payout. He thought the committee was cognizant of the
danger, and wanted to do what it could to ensure the
trusts success.
9:22:55 AM
Mr. Williams highlighted slide 8, "FY 25 Spending," which
used a pie chart to illustrate what s[ending the trustees
had approved for FY 25. The pie chart in the top right
quadrant showed agency budgets for the trust authority and
the TLO, which were housed in the Department of Revenue and
the Department of Natural Resources, respectively. He cited
amounts approved for agency budgets. There were 17 staff
that worked at the trust authority office, and there were
19 staff that worked at TLO. He cited Mental Health Trust
Authority Authorized Receipts (MHTAAR) grants and noted
that the funds were trust funds rather than state general
funds. The trustees had approved $10.2 million in grants
for 63 grants for FY 25. The next slide would address the
departments to which the funds were allocated.
Mr. Williams noted that the left-hand side of the pie chart
showed authority grants and totaled about $19.4 million.
The grants went directly from the trust to community
organizations, tribal health organizations, local
governments, and non-profits that would not go through the
state budget. The trust had the authority to award grants
and contracts to forward the comprehensive integrated
mental health program plan. He mentioned the mini-grant
program, which went directly to individual beneficiaries
and to items such as the Crisis Now initiative.
Senator Wilson referenced a conversation from the previous
year concerning mental health grants and lapsed funds. He
asked if Mr. Williams had a figure for percentage of lapsed
funding for FY 23.
Mr. Williams did not have the number at hand but relayed
that the trust's goal was to have no more than 10 percent
of awarded grants lapse.
Senator Wilson recalled that there had been more than 10
percent that had lapsed in FY 22 and wondered about the
total for FY 23.
Co-Chair Stedman asked for Mr. Williams to get back to the
committee with the information.
Mr. Williams agreed.
Mr. Williams looked at slide 9, "MHTAAR Grants, FY25,"
which showed a pie chart that addressed grant amounts going
to various state departments. He highlighted that the two
largest recipients of trust fund grants were the Department
of Health (DOH) and the Department of Family and Community
Services (DFCS). He cited that the amount for the two
agencies was almost half of the total grant amount.
Co-Chair Hoffman asked about the $1,620,000 to the Alaska
Housing Finance Corporation (AHFC).
Mr. Williams thought a later slide would address the
question.
9:27:54 AM
Mr. Williams addressed slide 10, "FY 25 GF/MH
Recommendations (and Associated MHTAAR Grants)," which
showed a table of trustee's GFMH recommendations as to how
the state should be spending general fund dollars on a
comprehensive integrated mental health program plan. The
table did not include all of the MHTAAR funds, but if there
was a recommendation it was included. He highlighted the
column in red that indicated differences between the
recommendations and the governor's proposed budget. He
pointed out the trustee approved recommendations on the
left compared with the governors proposed budget. The GF
recommendations included in the governors proposed budget
were about 36 percent of the trusts recommendations. The
trust recognized that GF recommendations made by the board
of trustees did not always get included in the budget.
Mr. Williams made note of the column on the far right,
which showed items in blue that denoted increments of trust
funds that were included in the proposed budget that were
not included by the board of trustees in its
recommendation. He noted that by statute, the board of
trustees was the only entity that could approve the
expenditure of trust funds. He continued that AMHTA made
recommendations for expenditures and the legislature
provided receipt authority for the departments, to use the
trust funds as approved by trustees. He mentioned a lawsuit
settled in 1994 which established that the board of
trustees had the authority to expend the trust funds to
forward the CMHTP. He noted that there was $750,000 of
unapproved trust funds included in the proposed operating
budget. The next slide would show the comparison of the
capital budget.
Mr. Williams advanced to slide 11, "FY 25 GF/MH
Recommendations (and Associated MHTAAR Grants)," which
showed a table of capital items. He referenced Co-Chair
Hoffman and AHFC funds, which were in the second and third
row. There was a little over a $1 million in trust funds
going to AHFC, and there were other projects for AHFC not
listed and without an associated GF match. He highlighted
the differences between trustee recommendations and the
governor's budget proposals for the Special Needs Housing
Grant and Homeless Assistance Program. The proposed budget
did not include any of the trustee recommendations in the
two categories. He pointed out that there was a $50,000
increment of trust funds for Coordinated Community
Transportation that was not included in the boards final
and approved FY 25 budget.
9:32:48 AM
Co-Chair Hoffman asked what percentage of the funds were
for grants or spending in rural Alaska.
Mr. Williams did not have specific information but noted
that there were rural housing coordinators (funded by the
trust through AHFC) based in Kotzebue and in Nome.
Co-Chair Hoffman noted that the housing coordinators were
operating budget items. He asked about capital funds being
spent in rural Alaska. He mentioned Special Needs Housing
Grants, Homeless Assistance Programs, and Home Modification
programs. He asked if any of the construction funds were
being spent in rural Alaska.
Mr. Williams agreed to work with AHFC and provide a list of
the items from the previous year.
Co-Chair Stedman asked if the slide was the final slide
depicting the differences in budgets.
Mr. Williams answered affirmatively.
Co-Chair Stedman mentioned the separation of powers. He
affirmed that the committee would work with AMHTA and the
Office of Management and Budget (OMB) to come to a mutual
agreement through the budget process.
Mr. Williams commented that AMHTA was also engaged with OMB
to try and address the issue.
Mr. Williams looked at slide 12, "Trust Grant Impacts," to
illustrate the FY 23 grants that were awarded statewide. He
identified that there had been over 90 grants awarded in 14
areas. He noted that some of the grants awarded had a
statewide impact.
9:36:08 AM
Senator Wilson calculated that there was about a 15 percent
difference in grants budgeted compared to what was
allocated. He wondered what had happened to the GF funds
that were unused.
Mr. Williams noted that any unused trust funds intended for
grants came back to the trust. He noted that the funds went
into the four-year rolling average that calculated
potential spending.
Co-Chair Hoffman asked Mr. Williams to provide a breakdown
of the $22.2 million and the 14 grantees listed on the
slide.
Co-Chair Stedman suggested Mr. Williams provide a couple of
years worth of data.
Mr. Williams agreed to provide the information. He noted
that the trust's annual report had been recently released,
along with a FY 23 investment report that listed all the
grants awarded. The report provided grantee names,
communities, and amounts of grants. He thought all
legislators should have received the information. He noted
that the information was also available on the trusts
website.
Co-Chair Stedman asked Mr. Williams to include the
information with his response to Co-Chair Hoffman's
question. He commented on the number of reports received by
legislators.
9:39:00 AM
Mr. Williams showed slide 13, "Trust Focus Areas":
Established Focus Areas
• Disability Justice
• Mental Health & Addiction Intervention
-Includes Behavioral Health Crisis Response
• Beneficiary Employment & Engagement
• Housing and Home & Community Based Services
Additional Priorities
• Workforce Development
• Early Childhood Intervention & Prevention
Mr. Williams noted that the established focus areas were an
umbrella under which there were many issues, programs, and
services. He pondered prevention and engagement of the
trust in the focus areas.
Mr. Williams referenced slide 14, "Policy/Advocacy":
• Community-Based Services
• Youth and early childhood mental health
• Medicaid and provider reimbursement rates
• Dementia care
• Reentry supports
Mr. Williams discussed community-based services, which
allowed beneficiaries to thrive, improve, and contribute in
communities. He mentioned the impacts of the Covid-19
pandemic. He noted that DOH was releasing a request for
proposals (RFP) to look at Medicaid and provider
reimbursement rates, which was important for the community-
based system. He mentioned the growth in the population of
elders that were experiencing dementia and related
conditions. He discussed appropriate discharge planning as
an important reentry support to increase public safety.
9:43:10 AM
Mr. Williams turned to slide 15, which showed an innovation
timeline of Alaska's Crisis Now model. He wanted the
committee to have a picture of the work DOH, DFCS, and the
trust had done since 2018. He mentioned a lawsuit filed
against the state in 2018, which had been a tipping point
for the trust to consider how to transform the system. He
identified the passage of HB 172 in 2022, which was a major
piece of legislation which helped to ensure the system
could respond to individuals in an involuntary or voluntary
status.
Co-Chair Hoffman thought it was good to see that at least
one part of rural Alaska addressed in six years. He
implored the board to look beyond the Railbelt. He
emphasized that there were issues in rural areas and
thought the board would have a broader vision for all of
the state. He challenged the board to try address the
issue.
Mr. Williams considered slide 16, "Rural Outreach Trip,
2023":
• Yukon Kuskokwim Region
• Representatives from the Trust, Departments, and
Legislature
• Close engagement with regional partners
Mr. Williams discussed the rural outreach trip to the
Yukon-Kuskowkim (YK) Delta. He mentioned the Yukon-
Kuskokwim Health Corporation, the Association of Village
Council Presidents (AVCP), and the AVCP Rural Housing
Authority, which had hosted the trust and were helpful in
accessing different areas to see how services and programs
as well as gaps in services. He mentioned that legislators
and staff as well as other state officials had joined the
trip. He mentioned that the trust had taken such trips
historically every few years. He explained that the trips
benefited the trust and leadership.
9:47:02 AM
Mr. Williams displayed slide 17, "Trust Land Office":
• Maximizes long-term revenue & productivity from
Trust land
• Encourages diverse revenue producing uses of Trust
land
• Manages Trust land prudently, efficiently & with
accountability to the Trust & its beneficiaries
Mr. Williams reiterated that the executive director of TLO
oversaw a staff of 19. He noted that the settlement that
created the trust in 1994 stipulated that the trust shall
contract with DNR to manage the million acres of land for
the trust. The sole purpose of the management of the land
was to maximize revenues from the land to be used for the
purposes of improving the lives of the beneficiaries. He
cited that the table on the right illustrated what would be
generated by the seven land classes. In FY 24 the estimated
revenue was $12.6 million. He noted that the revenue was
split into two different categories for the trust. Half the
revenue would be deposited into the corpus of the trust,
and the other half was spendable income.
Mr. Williams highlighted slide 18, "Trust Land Office
Highlights
Land Sale Program
• Fall Land Sale
• Over-the-Counter Land Sales Forestry
• Shelter Cove timber harvest, Ketchikan
• Naukati timber harvest, Prince of Wales
• Forest Fuels Mitigation, Tok
• Renewable Energy Leasing
• Subdivision Development
Mr. Williams noted that the TLO fall land sale had recently
generated a little over $2 million. He discussed the
projects listed on the slide. He mentioned wind energy that
tied into Chugach Electric. He noted that many trust land
parcels were large and had opportunities for subdivision to
use for housing or other development.
Co-Chair Stedman commented that over the last 15 years the
committee had been diligently working on the roads in
Shelter Cove in Ketchikan. The work had allowed for the
trust to access some of its timber lands to create revenue.
He mentioned the benefits of additional jobs and access. He
mentioned Naukati Bay on Prince of Wales Island, which he
considered essential in keeping the timber industry alive
on Prince of Wales Island.
9:52:35 AM
Co-Chair Hoffman asked Mr. Williams to provide more detail
on subdivision development endeavors in the state.
Mr. Williams looked at slide 19, "Icy Cape Project":
• Large volume placer gold
• Encouraging assay results
• On-target (budget & mineral estimate)
Mr. Williams noted that the committee had requested more
detail on the Icy Cape Project the previous year. He
highlighted that the bottom portion of the slide showed
trust lands, where there were roughly 200 acres of the
parcel on which the trust was doing exploration work to
determine mineral values. The project had started as a
heavy minerals project but had turned into more of a gold
project. The project would be a placer project rather than
a hard rock mining project. There had been over 60 core
samplings in the section that were being analyzed for
mineral content. The trust hoped to have a completed pre-
feasibility study by 2025 to determine how to move forward.
Co-Chair Stedman apologized to the trust for not being able
to visit the project the previous fall, and thought there
was a unique opportunity to generate new jobs.
9:54:59 AM
Mr. Williams continued to address the Icy Cape Project and
highlighted the photo on the top right of the slide, which
showed the onsite sample processing facility. He commented
that TLO chief geologist was working to keep the project on
a strict timeline.
Mr. Williams addressed slide 20, "Opportunity at Icy Cape":
• Cost recovery methodology
• $100-150M in revenue generation
• Grinder Prospect
• Economic activity
• Markets support gold from Icy Cape
Mr. Williams pointed out the aerial photograph of the
project at Icy Cape. He thought the estimated revenue
generation had possibly increased since the first estimate.
He noted that AHMTA had engaged with the community of
Yakutat at the beginning of the exploration.
Senator Wilson asked to discuss how the project would be
managed and who might be partners.
Mr. Williams explained that there was currently exploratory
work being done, after which an outside operator would come
in to construct and operate the mine.
Senator Kiehl asked Mr. Williams to discuss the risk
tolerance on the project. He referenced other state
corporations acting as developers and state losses. He
noted that the old project model was to contract with the
private sector. He asked about the risk profile.
Mr. Williams relayed that the trust was working to
determine the risk profile as it assessed the resource. He
offered to get back to the committee with more information.
9:58:22 AM
Mr. Williams advanced to slide 21, "Looking Ahead
• Continued grantmaking
• Trust Improving Lives Conference, Fall 2024
• Coordinating with the Departments of Health and
Family and Community Services on the next 5-year
Comprehensive, Integrated Mental Health Program Plan
• 2024 Fall Land Sale
Mr. Williams explained that the trust endeavored to hold
the conference listed on the slide every couple of years.
The current plan was coming to the end of its five-year
life, and he looked forward to an update over the upcoming
summer.
Co-Chair Hoffman thanked the board for all its work, and
for its visit to the YK Delta. He noted that the YKHC and
AVCP encompassed an area larger than the state of
Washington, served nearly 60 communities, and was the most
populated of any area in rural Alaska. He emphasized that
the area was only part of his district, which included the
Alaska Peninsula, the Aleutian Islands, and the Pribilof
Islands. He had been in the legislature when the lawsuit
was filed and had worked on the legislation that was
adopted in 1994. He noted that he had questions at the time
and emphasized that the trust needed to serve all of
Alaska. He thought it was difficult to provide services
fair and equitably. He implored the board to take a long
hard look at rural Alaska and keep it in mind.
Co-Chair Olson wondered how many grant applications the
trust received from rural areas of the state.
Mr. Williams did not have the information.
Co-Chair Olson pondered the percentage of applications from
rural versus urban areas.
Mr. Williams relayed that generally there were more
applications from urban areas than rural areas.
Co-Chair Stedman asked Mr. Williams to get back to the
committee with the information.
Mr. Williams thanked the committee for its time.
Co-Chair Stedman discussed the agenda for the following
day.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 020124 AMHTA SFC Presentation.pdf |
SFIN 2/1/2024 9:00:00 AM |
AMHTA Presentation |