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
+ teleconferenced
= bill was previously heard/scheduled
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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