Legislature(2001 - 2002)

02/20/2001 03:40 PM STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
            SB 93-ARCTIC WINTER GAMES TEAM ALASKA TRUST                                                                     
SENATOR  PHILLIPS, prime  sponsor of  SB 93, said  that he has  been                                                            
involved with the Arctic  Winter Games and Team Alaska for more than                                                            
15  years and  consistent  funding  has always  been  a problem.  He                                                            
explained  that the  games were  established  32 years  ago with  an                                                            
agreement  between  the  Premiers   from  the  Yukon  and  Northwest                                                            
Territories  and  then  Alaska  Governor,  Walter  Hickel  providing                                                            
winter  sporting  events  every  two  years.  There  are  over  2000                                                            
participants and  18 sporting events featured. The  competition will                                                            
be held  in Greenland  next year  with participation  from  Northern                                                            
Alberta, Northern  Quebec, Northwest Territories,  Yukon, Alaska and                                                            
Greenland and observers from two Russian provinces.                                                                             
This legislation  was introduced in an effort to provide  consistent                                                            
funding. It  is modeled after the  Alaska Children's Trust  Fund so,                                                            
if passed,  an endowment  would  be established.  The athletes  come                                                            
from all parts of the state  and are expected to pay about one third                                                            
of the associated  costs of participation,  which is in contrast  to                                                            
their  competitors  who  have  all  their  expenses  paid  by  their                                                            
SENATOR  PHILLIPS believes  that endowing  the games  will not  only                                                            
provide  consistent funding  it will  also send  a positive  message                                                            
that Alaska is  a bold and willing participant in  the Arctic Winter                                                            
Games. In 2006  it is Alaska's turn to host the games  and Kenai and                                                            
the Mat Su areas are competing for the bid.                                                                                     
CHAIRMAN  THERRIAULT asked  whether the current  board of  directors                                                            
would be used if the trust was established.                                                                                     
SENATOR PHILLIPS said the current board would be used.                                                                          
CHAIRMAN THERRIAULT  referred to page  2 line 5 and asked  if income                                                            
from the trust  would be put into the general fund  and then require                                                            
yearly legislative appropriation.                                                                                               
SENATOR PHILLIPS said that  it was set up that way and that a letter                                                            
from  Dan Sullivan  suggests  that  tobacco  settlement  money is  a                                                            
possible funding source.                                                                                                        
Number 434                                                                                                                      
CHAIRMAN  THERRIAULT asked  whether the interest  earnings  would be                                                            
general fund without yearly legislative appropriation.                                                                          
SENATOR PHILLIPS said his  intent is to keep the money with the fund                                                            
itself.  It's modeled  exactly  the same  as the  Alaska  Children's                                                            
Trust and it now  has about $9 million. He said that  the games need                                                            
about $200,000  every year because  the games cost between  $200,000                                                            
and $300,000 every two years and international dues are $25,000.                                                                
DAN SULLIVAN,  Development Director Arctic Winter  Games/Team Alaska                                                            
(AWGTA),  has been involved  with the  games for  over 30 years  and                                                            
strongly supports  SB 93. AWGTA is a non-profit corporation  that is                                                            
trying  to  develop  a  guaranteed  revenue  source  to  ensure  the                                                            
viability and longevity of the event.                                                                                           
Over 40 communities send  athletes to the games and all winter games                                                            
are  included.   There  are  many   well-known  Alaskans   who  have                                                            
participated in  the games. There is one paid employee  and numerous                                                            
volunteers  working for AWGTA  and it is a  very efficient  and cost                                                            
effective  entity.  Every   two  years  300  or  more  athletes  are                                                            
assembled, uniforms are  purchased, travel is arranged and the games                                                            
are conducted.                                                                                                                  
MR. SULLIVAN  went on to describe  AWGTA as more than a non-profit.                                                             
He said that  it is actually `an entity  of the State of  Alaska and                                                            
therefore  should have  a stable  funding  source. If  the trust  is                                                            
properly endowed,  it would generate sufficient revenues  to finance                                                            
the future costs of Team  Alaska and provide revenue for host cities                                                            
when  it is  Alaska's turn  to  stage the  games.  It costs  between                                                            
$800,000 and $1  million every decade to fund the  host city.  It is                                                            
modeled after  the Alaska  Children's Trust  with monies managed  by                                                            
the Department of Revenue.                                                                                                      
Number 951                                                                                                                      
CHAIRMAN  THERRIAULT   asked  if   the  games  were  referenced   or                                                            
established in statute.                                                                                                         
MR.  SULLIVAN said  he believes  so  because they  were established                                                             
through the  Governor's office  and the Lieutenant  Governor  is the                                                            
official representative to the international committee.                                                                         
CHAIRMAN THERRIAULT  said that there  would still have to  be annual                                                            
appropriations  of income back into  the trust so AWGTA would  still                                                            
need to come before the legislature every year.                                                                                 
MR. SULLIVAN  said yes, but  they would be  asking for the  earnings                                                            
from the trust and not a general fund appropriation.                                                                            
CHAIRMAN THERRIAULT asked  for the reasoning for having this done in                                                            
state statute  rather than using a private lending  institution with                                                            
administration from the board of directors.                                                                                     
MR. SULLIVAN  said they wanted to  maintain the connection  with the                                                            
state  and  that  management  by  the  Department   of  Revenue  and                                                            
oversight by the legislature is advantageous.                                                                                   
SENATOR  PHILLIPS   said  that  the   governments  from   the  other                                                            
jurisdictions  are directly  involved in  supporting their  athletes                                                            
and AWGTA feels it is important  for the State of Alaska to show its                                                            
support as well.                                                                                                                
MR. SULLIVAN said that  in most of the Canadian provinces there is a                                                            
minister  of  sport  whose full  function  is  to  provide  athletic                                                            
opportunities  to  youths  in their  province  or  territory.  AWGTA                                                            
serves this function for the State of Alaska.                                                                                   
CHAIRMAN THERRIAULT  asked whether economic models  have been run to                                                            
ensure that a $5 million  endowment would provide sufficient revenue                                                            
for not  only annual expenses  but also a  periodic 20 percent  draw                                                            
for the years that Alaska hosts the games.                                                                                      
MR. SULLIVAN  said they had. In a  given year they would  draw about                                                            
$150,000 for team purposes  so in an 8-year period there would be an                                                            
additional  $100,000 per year to go  into the account to  cover host                                                            
city expenses.                                                                                                                  
CHAIRMAN THERRIAULT asked how they had accounted for inflation.                                                                 
MR. SULLIVAN  said that all  estimates in  their economic model  are                                                            
conservative  and that  account earnings  will  probably be  greater                                                            
than  5  percent.  If  the  trust  doesn't  have  sufficient   funds                                                            
available without  tapping principle  then it is the responsibility                                                             
of the host community to come up with the additional funds.                                                                     
SENATOR DAVIS  asked about host city local government  participation                                                            
every ten years.                                                                                                                
MR. SULLIVAN  said local governments  make a contribution  when they                                                            
host  the  games.   When  Anchorage  last  hosted   the  games,  the                                                            
municipality  gave  AWGTA  a $150,000  grant  and those  funds  were                                                            
returned to the municipality in full.                                                                                           
SENATOR PEARCE arrived.                                                                                                         
SENATOR DAVIS asked where international funds come from.                                                                        
MR.  SULLIVAN  said   John  Rodda,  Alaska  representative   to  the                                                            
international committee, could answer that type of question.                                                                    
GARY  MATHEWS,  board member  for  AWGTA,  said that  the  financial                                                            
issues facing  the non-profit are critical. This is  a very well run                                                            
organization  and he  urged the  committee to  move the legislation                                                             
Number 1463                                                                                                                     
JOHN RODDA has been involved  with the games for 27 years in various                                                            
capacities. Specifically,  Alaska is the only jurisdiction that must                                                            
look  for funding  on  a yearly  basis.  All  others have  full  and                                                            
ongoing government support.                                                                                                     
CHAIRMAN  THERRIAULT asked  whether  Mr. Rodda  understood that  the                                                            
legislation sets  up the trust but does not fund the  trust. He also                                                            
said that he doesn't believe  that Alaskan residents expect the same                                                            
level of support as that provided by the Canadian provinces.                                                                    
MR. RODDA  said  perhaps not,  but that  this is  an opportunity  to                                                            
support young  Alaskans. It's  a long-term  investment that  is well                                                            
intended and worthwhile.                                                                                                        
Number 652                                                                                                                      
CHAIRMAN  THERRIAULT  asked  whether  corporate   contributions  are                                                            
anticipated to fund the trust.                                                                                                  
MR. RODDA said  they have been involved  with corporations  for many                                                            
years and they will continue to solicit contributions.                                                                          
Number 1744                                                                                                                     
WENDELL  SHIFFLER,  northern  region international  member  for  the                                                            
Arctic  Winter  Games,  said  these  games  "provide   an  exciting,                                                            
international sporting  event and a lifetime learning experience for                                                            
residents north  of the 60th parallel." Participation  has increased                                                            
from three to nine jurisdictions,  from 600 to over 2000 members and                                                            
the games are now televised across the Arctic.                                                                                  
SB 93 will bring consistency  of support to the games that is needed                                                            
on an ongoing  basis. It will neither  take the place of  efforts to                                                            
gain private  financial  support nor  end the  practice of  athletes                                                            
contributing a  portion of the costs from their own  pocket. It will                                                            
however,  "establish a basis  of continuing  monetary commitment  by                                                            
the State of Alaska to support our youth in a positive way."                                                                    
PHYLLIS TATE,  AWGTA director, has been involved with  the games for                                                            
30 years as a parent, an  official and now as director. She strongly                                                            
supports  SB 93 because  sports  enhance self-esteem  and status  of                                                            
young  people  who may  not  otherwise have  enough  to  do to  keep                                                            
themselves productively  involved. She encouraged members to support                                                            
SB 93 thus establishing  an endowment trust for Arctic  Winter Games                                                            
Team Alaska.                                                                                                                    
Number 2017                                                                                                                     
SENATOR PHILLIPS showed framed medals from previous games.                                                                      
Number 2065                                                                                                                     
JIM POWELL, AWGTA board  member, said he would be brief because much                                                            
that he could  say had already been  covered in previous  testimony.                                                            
He said that  an economic report from  the 2000 Arctic Winter  Games                                                            
showed  that  host  city,  Whitehorse,  netted  5  million  Canadian                                                            
dollars from  the games. In 2006 when  Alaska hosts the games  there                                                            
is the same opportunity for a similar economic boost.                                                                           
He  emphasized that  the  cost of  the games  isn't  born solely  by                                                            
public  monies.  Rather,  it  is  a  three-way  participation   with                                                            
corporations,  the  State and  the athletes  all  contributing.  The                                                            
athletes  contribute one third  of the monies.  The original  vision                                                            
and intent of  the games was to bring Arctic regions  together for a                                                            
cultural  and sporting  exchange.  To  maintain this  vision,  there                                                            
needs to be more stability in financing.                                                                                        
His  final point  was  that many  communities  are affected  by  the                                                            
games. This  includes small communities,  statewide, that  would not                                                            
otherwise have  an opportunity "to  participate in such a  wonderful                                                            
cultural  and athletic event."  He wanted  members to remember  this                                                            
when making their decisions.                                                                                                    
CHAIRMAN THERRIAULT said  that, as a general rule, there is a desire                                                            
to separate from state  government and its bureaucracy. With this in                                                            
mind,  he  wondered  why  AWGTA  wants  the  trust  set  into  state                                                            
MR. RODDA said that actually  it is the state that is the member and                                                            
that AWGTA  is the non-profit entity  that does the work.  The State                                                            
of Alaska  is a  founding member  and in  endowing  the trust  it is                                                            
saying that they are committed to the continuation of the games.                                                                
GARY MATHEWS said  that in attending the opening ceremonies  and the                                                            
games themselves,  it is  clear that the  athletes are representing                                                             
their  governments.   Lieutenant  Governor  Ulmer   was  present  in                                                            
Whitehorse, as  were Canadian premiers and other officials,  lending                                                            
a definite governmental presence.                                                                                               
Number 2336                                                                                                                     
SENATOR DAVIS  asked if anyone  could give  her the total amount  of                                                            
money given to AWGTA since inception.                                                                                           
SENATOR PHILLIPS thought it was about $225,000 every two years.                                                                 
MR.  RODDA  said that  was  a  close  estimate but  he  hasn't  ever                                                            
tabulated those figures.                                                                                                        
SENATOR  PHILLIPS  said  he thought  that  $100,000  per  year is  a                                                            
defensible average.                                                                                                             
SENATOR DAVIS  said that  it's a wonderful  program but she  doesn't                                                            
understand  why there's an  urgency to put  this into state  statute                                                            
when the non-profit  has been doing so well over the  30 plus years.                                                            
AWGTA is estimating  that the trust would need about  $5 million and                                                            
is modeled  after the Children's  Trust but  she remembers  when the                                                            
Children's Trust  was started and lay dormant for  years due to lack                                                            
of funding.  She thinks  that pulling  $5 million  from the  general                                                            
fund to fund the trust  will short other worthwhile programs such as                                                            
SENATOR PHILLIPS  said that one suggestion  to fund the trust  is to                                                            
use  the tobacco  settlement  monies and  another  is for  corporate                                                            
participation. It isn't  strictly state dollars but a consistent and                                                            
stable funding  source is  necessary for the  State to maintain  its                                                            
presence. The State of Alaska is viewed as a standard bearer.                                                                   
Number 2236                                                                                                                     
SENATOR DAVIS  said she's not against  the Arctic Winter  Games, she                                                            
believes   it's   a  wonderful   program   and   she   supports   it                                                            
wholeheartedly. Nonetheless,  she thinks it's unusual that AWGTA has                                                            
chosen this method rather that private funding.                                                                                 
CHAIRMAN  THERRIAULT asked  for additional  testimony and there  was                                                            
none. He  said that the  fiscal note says  zero but the explanation                                                             
points  out that  the referral  to finance  is needed.  As a  former                                                            
member of the  finance committee,  he suggested that projections  of                                                            
fund earnings, inflation and draws be provided to the committee.                                                                
He asked for the will of the committee.                                                                                         
SENATOR  HALFORD made  a motion to  move the  bill and accompanying                                                             
fiscal note from committee with individual recommendations.                                                                     
There were no objections so SB 93 was moved from committee.                                                                     

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