Legislature(2023 - 2024)SENATE FINANCE 532
01/25/2023 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Presentation: Alaska Mental Health Trust Authority | |
| 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 25, 2023
9:02 a.m.
9:02:13 AM
CALL TO ORDER
Co-Chair Stedman called the Senate Finance Committee
meeting to order at 9:02 a.m.
MEMBERS PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Donny Olson, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Click Bishop
Senator Jesse Kiehl
Senator Kelly Merrick
Senator David Wilson
MEMBERS ABSENT
None
ALSO PRESENT
Steve Williams, Chief Executive Officer, Alaska Mental
Health Trust Authority; Anita Halterman, Board Chair,
Alaska Mental Health Trust Authority, Representative Julie
Coulombe.
SUMMARY
PRESENTATION: ALASKA MENTAL HEALTH TRUST AUTHORITY
Co-Chair Stedman discussed the agenda. He observed that the
chair of the Alaska Mental Health Trust Authority (AMHTA)
Board was in the gallery.
^PRESENTATION: ALASKA MENTAL HEALTH TRUST AUTHORITY
9:03:23 AM
STEVE WILLIAMS, CHIEF EXECUTIVE OFFICER, ALASKA MENTAL
HEALTH TRUST AUTHORITY, introduced himself and discussed
his background. He relayed that he had worked for the trust
for about 17 years and had held his current position for
one year.
9:04:06 AM
ANITA HALTERMAN, BOARD CHAIR, ALASKA MENTAL HEALTH TRUST
AUTHORITY, introduced herself and relayed that she had been
with the AMHTA board in a variety of different roles for
approximately four years. She had assumed the role of chair
one year previously. She asserted that AMHTA had a unique
place in state government as a funder that could also apply
its resources in a catalytic fashion to help improve
Alaskas system of care. She listed AMHTAs activities as
supporting partners, bringing on new lines of service,
supporting capacity building, working on workforce
development issues, capital projects, and policy planning
activities. She acknowledged that AMHTA was aware that the
trust was not meeting the needs of many of its
beneficiaries. She mentioned challenges such as waitlists
and increasing costs. She noted AMHTA was very engaged with
partners to support meaningful change and a robust
continuum of services and support for vulnerable Alaskans.
Ms. Halterman discussed a presentation entitled "Senate
Finance Committee, January 25, 2023" (copy on file).
Co-Chair Stedman suggested the board members identify
themselves when introduced.
Ms. Halterman looked at slide 2, "Trustees":
• Anita Halterman, Chair
• Rhonda Boyles, Vice Chair
• Brent Fisher, Secretary, Finance Committee Chair
• Verné Boerner, Program and Planning Committee Chair
• John Sturgeon, Resource Management Committee Chair
• Kevin Fimon, Audit and Risk Committee Chair
• Agnes Moran, Trustee
Ms. Halterman introduced the trustees listed on the slide
and noted that Ms. Moran would transition to the role of
Program and Planning Committee Chair. She described the
composition of the board. She explained that the board was
independent and provided governance and fiduciary oversight
and direction in achieving the mission of the trust.
Trustees were appointed by the governor and confirmed by
the legislature. She anticipated that the legislature would
be considering confirmation of two of the seven trustees in
the current year.
Ms. Halterman spoke 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 commented that many beneficiaries fell into
more than one category listed on the slide. She explained
that the trust supported both youth and adult beneficiaries
to prioritize individuals whose behavioral health
conditions and developmental disabilities placed them at
risk of institutionalization. The trust also considered
prevention of conditions (where possible) to be a part of
the trusts mandate.
Ms. Halterman referenced slide 4, "Mission of the Trust":
It is the duty of the Alaska Mental Health Trust
Authority to provide leadership in the advocacy,
planning, implementing and funding of services and
programs for Trust beneficiaries.
Ms. Halterman relayed that working closely with the state,
the trust supported the development of a five-year
comprehensive mental health plan. The trust also worked
continuously to manage its assets and preserve and grow the
trusts corpus. The trusts activities considered
perpetuity, while anticipating beneficiaries needs into
the future.
9:09:06 AM
Mr. Williams turned to slide 5, "Legislative Audit (2021)
Update":
Submitted status report in November 2022 to
Legislative Auditor
• Provided updates on recommendations in the 2021
Audit Report
• Commercial Real Estate
• No recommended action necessary
Mr. Williams discussed a status update of the 2021
legislative audit that had been requested of the trust,
which was a follow-up from an audit in 2018. At the time,
there had been interest and question regarding whether the
funding for the purchase of seven commercial real estate
properties was appropriate. He recounted that the trust had
followed through with the audit recommendations made in
2018, with a follow-up in 2021 to check in on the status of
the recommendations.
Mr. Williams continued that most recently, the legislative
auditor had requested an update to include a status update
on the 2021 audit. There had been five recommendations in
the audit, and the trust provided a status report to the
legislative auditor and then the Legislative Budget and
Audit Committee in December 2022. The legislative auditor
had recommended no action at the time. He thought the work
with the auditor showed the trusts level of importance and
its ability to address and its operations overall.
Mr. Williams considered slide 6, "Financial Position,"
which showed a bar graph of trust-invested assets and a
table entitled 'Primary Trust Financial Assets (end of FY
22).' He noted that AMHTA had historically used the slide
in presentations to demonstrate the trusts financial
position of the total invested assets of the trust. The
graph represented up to year-end 2022. He focused on the
far right of the chart, where the green section of the bar
represented the corpus of the trust, managed by the Alaska
Permanent Fund Corporation (APFC). The green portion
represented about $531 million. The light blue portion of
the bar represented the budget reserves, which totaled
around $204 million. The smaller, darker portion of the bar
represented the equity of the real estate assets, which was
roughly $73 million. He cited a total of around $801
million in total invested assets of the trust.
Mr. Williams observed a slight dip in 2021 which was
reflective of the turbulent financial times, and then a
positive change.
9:13:11 AM
Co-Chair Hoffman asked Mr. Williams about the $71 million
of restricted reserves as part of the $204 million that
were in the trusts reserves.
Mr. Williams informed that the restricted reserves were
designated as part of how the trusts reserves were split.
Some of the reserves were unrestricted, and the
unrestricted were invested with APFC. The formula was part
of what was reviewed in the audit in 2020 to make sure the
trust was allocating and accounting for its reserves
properly.
Co-Chair Hoffman asked what the reserves were earmarked
for.
Mr. Williams relayed that the board set a target of 400
percent of spending for budget reserves. In the event that
there was significant downturn in the market, the reserves
would provide funding to maintain grantmaking and
operations without reductions.
Co-Chair Stedman relayed he had met with Mr. Williams the
previous day and had asked him to address the trusts
portfolio and its ability to handle dips, including the
smoothing mechanism.
Mr. Williams displayed slide 7, "Available Funding," which
showed two tables. The table on the left showed the trust's
estimated available funding for FY 24, which was calculated
through four different revenue streams. The top showed the
corpus, the second row was unexpended funds from prior year
grants, the third row down showed spendable income
generated by the trust land office, and the last row showed
interest earned on General Fund and Other Non-Segregated
Investments (GeFONSI) accounts. He explained that the trust
considered the previous four years for each category of
funding, after which the figures were averaged to determine
projected available spending for the upcoming fiscal year.
Mr. Williams continued that the trust looked at the average
earnings of the corpus over four years for a 4.25 percent
draw. He explained that the averaging or smoothing was done
in order to mitigate the highs and lows of the market. The
approach was to smooth out any volatility, so it had
minimal impact on the organization and its beneficiaries.
Mr. Williams addressed the chart on the right-hand side of
the slide, which showed available funding each fiscal year
since FY 19. He observed modest growth in available funding
of $1 million to $2 million per fiscal year. He noted that
looking at FY 23, there was a modest growth of a few
hundred thousand dollars because of the current market.
9:17:41 AM
Senator Wilson observed that the carry-forward of prior
year funds was a little more than 10 percent of the grants
that were funded. He asked if there was a reason that the
grants were not funded. He asked for more detail.
Mr. Williams did not have specific grants to identify but
spoke to why there was lapses in grant funding. He
explained that some projects did not start as expected.
Some work with agencies did not fully expend trust funds
due to a variety of delays, and some projects did not start
at all. He relayed that the trust tried to keep the carry-
forward amount below 10 percent, but recognized that in any
given fiscal year, there would be funds that were not
expended as hoped.
Senator Kiehl asked Mr. Williams to discuss land office
spendable income. He asked if the spendable income was
everything generated by the land office, or if it was a
portion.
Mr. Williams relayed that the purpose of the land office
was to maximize revenue on trust lands to the benefit of
beneficiaries and the trust. When the land office generated
revenue for the trust, it was broken into two categories
per statute and regulation. Some of the revenue generated
from trust lands was spendable income and did not have to
go into the corpus or principal, and some revenues had to
be deposited in the corpus of the trust per statute. He
cited that 85 percent of revenue generated from timber
activity on trust lands went into the principal of the
trust, and 15 percent was distributed to the trust as
spendable income. He noted that land office spendable
income was part of the table on slide 7 that showed the
trusts estimated available funding for FY 24.
9:20:29 AM
Mr. Williams highlighted slide 8, "FY 24 Spending":
Authority Grants
$19,723.5
Designated grants to community providers, nonprofits,
local governments and Tribal organizations
•Includes $1.9M in mini grants
Agency Budgets
Trust Authority: $4,624.4
Trust Land Office: $5,019.1
MHTAAR
$9,825.6
Designated grants to state agencies, requires receipt
authority
Mr. Williams discussed the pie chart on slide 8. He
explained that the trust authority office focused on
programs, services, grants, and policy making. He cited
that there were 17 full-time employees in the trust
authority office. The trust land office was operated within
the Department of Natural Resources, separate from the
trust authority office in the Department of Revenue. There
were 19 full time employees in the land office. The land
office monitored and developed the land so that it
maintained value and provided revenue generating
opportunities.
Mr. Williams discussed the yellow slice of the pie chart,
Mental Health Trust Authority Authorized Receipts (MHTAAR),
which were funds approved by the trustees for a specific
purpose within a state agency. He explained that the
legislature provided the receipt authority to use the funds
as approved by the trustees. He cited that in FY 24, there
was about $9.8 million going to a variety of state
agencies. The dark green half of the pie was indicative of
authority grants that went outside the state budget
process. The trust had the authority to make grants
directly to organizations.
Mr. Williams noted that the mini grants mentioned on the
slide went directly to beneficiaries for a variety of
reasons. He described that trustees could apply for mini-
grants of up to $2,500 for mental health and addiction-
related issues, for populations experiencing Alzheimer's
and dementia and other related disorders, and for those who
might experience an intellectual or developmental
disability.
Co-Chair Stedman asked Mr. Williams to avoid using
acronyms. He asked for an explanation of FTE.
Mr. Williams explained that FTE signified a full-time
equivalent position.
Mr. Williams looked at slide 9, "MHTAAR, FY24":
• Dept. of Health ($3,384.8)
• UAA ($2,092.5)
• AHFC ($1,520.0)
• Dept. of Family and Community Services ($772.0)
• Dept. of Corrections ($771.0)
• Dept. of Administration ($353.4)
• Alaska Court System ($304.4)
• Dept. of Transportation and Public Facilities
($300.0)
• Dept. of Public Safety ($160.0)
• Dept. of Education and Early Development ($120.0)
• Dept. of Labor and Workforce Development ($25.0)
Mr. Williams summarized that there was about $9.8 million
approved by the trustees and going through 11 state
agencies. The combined total for the Department of Health
and the Department of Family and Community Services was
about $4 million. There were also increments to the Alaska
Court System and AHFC.
9:25:13 AM
Mr. Williams addressed slide 10, "FY 24 GF/MH
Recommendations (and Associated MHTAAR)," which showed a
table comparing what had been approved with trustee
recommendations and what was in the governor's proposed FY
24 budget that had been released in December. He
highlighted that every year by statute AMHTAs board of
trustees had to made recommendations to the administration
and the legislature for how the state could spend state
General Fund dollars. The trust submitted a letter with the
approved budget by September 15. He referenced the table
and noted that the blue columns denoted what the trustees
recommended, and the yellow columns showed what was in the
governors proposed budget.
Mr. Williams continued to address slide 10. The top portion
of the table showed operating budget items and the bottom
portion showed capital budget items, which were included in
the mental health budget. He noted that the governor did
include several recommendations from the trustees for state
General Funding, but did not include all recommendations,
which was not uncommon. He noted that the recommendations
were the priorities of the trust to ensure there were
services and programs in the communities. He mentioned the
Crisis Now Continuum of Care grants, which were shown on
two lines of the table as recommendations by the trust in
the amounts of $1 million and $500,000. He described the
grants as critical for the trusts continued momentum and
implementation of the Crisis Now statewide effort, but
noted that the items had not been included in the
governors proposed budget.
Mr. Williams mentioned the Comprehensive Integrative Mental
Health Program Plan, which was a plan that by statute was
developed every five years by the department in partnership
with the trust and others. The plan was approaching its
renewal period, and the increment shown in the second row
of the table reflected the associated position. He
emphasized that the increment shown in the second row was
critical for the trust to have a point of contact with the
department for developing and updating the plan.
Co-Chair Stedman wanted to wait to address the matter until
the administration submitted the supplemental budget and
amendments that were expected in the following week, before
a discussion to further understand concerns and
recommendations. He mentioned the Alaska Housing Assistance
Program and committee interest in concentrating on the
housing shortage and capacity issues. He was sure that the
capital budget chairman would be interested in the matter
and thought the committee would seek out discussions with
the administration and the trust to see about further
increasing housing availability. He mentioned problems
throughout the state, particularly in rural Alaska.
9:29:27 AM
Senator Wilson had a question about peer support
certification in the Department of Health. He asked if the
funds were for substance abuse peer support. He did not
think there was a requirement for peer support to be
certified. He asked if there was associated legislation or
if the trust was offering certification for those that
wanted it.
Mr. Williams relayed that there was a peer support
certification program developed by the department in
conjunction with the trust whereby programs could utilize
people with lived experience in the delivery of services in
the system of care. He offered to get back to the committee
with information on whether there was a certification
requirement. He added that peer certification was an entry
point and pathway to increased employment opportunities for
individuals who had lived experiences. He mentioned that
peer support was a key component of the delivery of
services in all the levels of the Crisis Now model of
continuum of care.
9:31:11 AM
Senator Wilson qualified that he supported peer
certification but did not know if it was required as part
of the different billable systems. He wanted to ensure
there were qualified individuals.
Mr. Williams agreed to follow up with the committee in
writing.
Co-Chair Stedman mentioned the topic of the budgets and the
fiscal position of mental health. He recounted conversation
from a few years previously about inflation-proofing the
trust. He asked Mr. Williams to address the topic.
Mr. Williams discussed inflation proofing and emphasized
protecting the purchasing power of the trust for future
beneficiaries. He shared that it was possible to transfer
income into the principal of the trust as a mechanism for
doing so, and in the past couple of years the trust had
done so with approximately $76 million. He reiterated that
the trust calculated available spending by ensuring it did
not overdraw and by using the average of the previous four
years of earnings with a 4.25 percent draw. He cited that
the trust had contracted with Callan the past spring to
look out the inflation-proofing approach. Callan had
concurred with the approach that the board was using to
protect and inflation-proof the corpus.
Co-Chair Stedman asked if the inflation-proofing was taking
place on more of a routine basis than previously.
Mr. Williams answered yes. He mentioned the 400 percent
target for budget reserves, after which the trustees could
take any excess for inflation-proofing or any critical
programing or anything related to the land office. The
revenue beyond the 400 percent triggered a conversation
with trustees as to how to deploy the funding.
Co-Chair Stedman asked Mr. Williams to discuss why the
trust was so protective of the fund and why the spending
amount was capped at 4.25 percent.
Mr. Williams mentioned the role of the trust and
beneficiaries and mentioned maintaining funding and
purchasing power to maintain equity between beneficiaries
today and beneficiaries in the future.
Co-Chair Stedman asked if it was critical in AMHTAs
mission to not overdraw the trust.
Mr. Williams answered "yes."
Co-Chair Stedman thought it would be helpful for
presentation in the other body, which had many new members,
to explain the philosophy behind the 4.25 percent draw.
Mr. Williams thanked Co-Chair Stedman for his suggestion.
He noted that Callan had reviewed the trust the previous
spring and concurred that the 4.25 percent draw was the
appropriate percentage to maintain the equity and
purchasing power for the future.
9:36:28 AM
Mr. Williams advanced to slide 11, "Trust Grant Impacts,"
which was a high-level demonstration of grant impact for FY
22. He referenced the AMHTA annual report, and an included
investment report which was distributed to members
offices. He noted that the investment report listed each
grant awarded by the trust in FY 22. The slide showed the
categories and types of grants and the total amounts of
funds approved for the different projects and purposes.
Co-Chair Stedman thought Senator Bishop would like to ask
about workforce development.
Senator Bishop asked what AMHTA was doing with workforce
development and training.
Mr. Williams relayed that the trust was engaged in several
different areas related to workforce development. He
referenced Senator Wilson's question about peer support
certification, which was an area the trust was engaged in
to build up the workforce for providers. He mentioned the
Support for Service to Health Care Practitioners (SHARP)
Program, which was a loan repayment program that had
generated hundreds of jobs included nurses, behavioral
health clinicians and behavioral health aids. The program
had been tapped into by the Department of Corrections, the
Alaska Psychiatric Association, the Office of Childrens
Services, as well as community partners.
Senator Bishop asked whether Alzheimer's patients fell
under the purview of the trust. He had seen a need to
expand training in the care of Alzheimers patients. He
thought the state might be behind the curve in having
services in the community.
Mr. Williams affirmed that adults experiencing Alzheimer's,
dementia, or other related illnesses were beneficiaries of
the trust. The trust did its work to address workforce
issues and solutions in partnership with the Alaska
Commission on Aging, which was one of trusts advisory
boards. He offered to provide further information regarding
any potential grants over time with targeted workforce
related to the population mentioned by Senator Bishop.
Senator Wilson asked for clarification of the state's
utilization of state programs using the SHARP Program, and
whether it was SHARP I, II, or III.
Mr. Williams agreed to get back to the committee with the
information.
Co-Chair Stedman asked Senator Wilson to restate the
question.
Senator Wilson defined the SHARP acronym.
Mr. Willams explained that over the course of several years
the SHARP program had gone through evolutions of
improvement and different programs related to workforce
issues. He offered to provide detailed information at a
later time.
9:41:04 AM
Mr. Williams looked at slide 12:
The Trust develops its budget and engages in
grantmaking, advocacy, and system improvement efforts
around the following areas:
Established Focus Areas
Disability Justice
Mental Health & Addiction Intervention
Beneficiary Employment & Engagement
Housing and Home & Community Based Services
Additional Priorities
Workforce Development
Early Childhood Intervention & Prevention
Mr. Williams explained that when staff presented budget
recommendations to the AMHTA Board of Trustees, there was
direction by the trustees to do so in a targeted fashion.
He discussed the focus areas listed on the slide and noted
that the strategies and goals within the focus areas had
changed over time. The focus areas were issues that
impacted beneficiaries and required long-term and constant
improvement. He expressed that the value of the trust to
the state was that it used its funds to help the system
continue to evolve over time so as to not become stagnant
in quality or efficiency. He explained that the trust
looked at areas within each of the focus areas listed.
Mr. Williams showed slide 13, "Policy/Advocacy":
•Community-Based Services
•Housing and homelessness
•Workforce Development
•Medicaid
•Transforming behavioral health crisis response
Mr. Williams noted that in addition to the focus areas, the
trust was engaged in policy and advocacy work in
partnership with its four statutory advisors: the Alaska
Commission on Aging, the Alaska Mental Health Board, the
Advisory Board on Alcoholism and Drug Abuse, as well as the
Governors Council on Special Education and Disabilities.
He noted that although the areas were broad, they were
critical to the way the trusts system provided services to
its beneficiaries and families across the state. He
emphasized that having access to families as close to the
home as possible was the most cost effective and effective
way of meeting the needs of the beneficiaries.
Mr. Williams continued discussing AMHTAs focus areas of
policy and advocacy. He mentioned that workforce
development was critical to the trusts organizations and
mentioned the struggle with workforce across all sectors.
He highlighted that healthcare was one of the largest cost
drivers in the state. He cited that trust beneficiaries
were largely insured through the Medicaid Program, and the
trusts organizations used Medicaid to bill for services
while ensuring the billed services were commensurate with
the cost of delivery. The organizations also maintained the
relevance to inflation over time. He noted that the last
bullet referenced the trusts work with the department and
others in the community on the Crisis Now system of care.
Mr. Williams referenced slide 14, "Behavioral Health Crisis
Response: Timeline," which showed a flow chart depicting a
timeline to show the work with the department and other
partners in transforming how the state responded to people
having a behavioral health crisis. He mentioned a lawsuit
against the state in 2018 or 2019, which was the energy
behind the department and the trust considering how to
transform the system.
9:46:00 AM
Mr. Williams turned to slide 15, "Crisis Now Implementation
-At a Glance":
System Implementation
•House Bill 172 signed into law in July 2022
•988 implemented nationwide in July 2022
•Medicaid 1115 waiver implementation ongoing
•Statewide Hospital ERs Learning Collaborative
established in December 2022
Statewide
• Crisis Now Project Management Contract
• Careline Crisis Line
Mat-Su
•Crisis Community Coordinator
•Mobile Crisis Response + Withdrawal Management
•Crisis Community Collaborative
Anchorage
•Crisis Community Coordinator
•Crisis Stabilization Planning Grants: Southcentral
Foundation, Providence Alaska
•Crisis Community Collaborative
Fairbanks
•Crisis Community Coordinator
•Mobile Crisis Response
•Crisis Community Collaborative
Juneau
•Bartlett Regional Crisis Stabilization
•Mobile Integrated Behavioral Health Response
•Crisis Community Collaborative
Ketchikan
•Crisis Community Coordinator
Early Planning Efforts
•Kotzebue
•Copper Center
•Unalaska
Mr. Williams thanked the members for their support for HB
172 [legislation passed in 2022 that dealt with changes to
involuntary commitment] the previous year, which was a
strong and required underpinning for the Crisis Now model
implementation would be successful. He cited focus on
Anchorage, Fairbanks, and the Matanuska-Susitna (Mat-Su)
Valley; but noted that the map indicated work in other
communities including Kotzebue, Copper Center, Unalaska,
Juneau, and Ketchikan.
Senator Wilson recalled that the previous year's capital
budget had provided $8 million to Providence Medical Center
to help with the Crisis Now model and remodel of the Alaska
Psychiatric Institute (API). Since that time, he thought
Providence had switched the chief executive officer and
made other changes and was rumored to not be engaged in the
project as planned. He asked if Mr. Williams had any
concerns about the project staying on track, or whether the
funds needed to be redirected to other facilities in the
state that could be converted to crisis stabilization
centers.
Mr. Williams affirmed that the matter had been discussed in
conversations immediately after the transition had
happened. The trust did not have any concerns about the
project going forward. The old API building was intended to
be a crisis stabilization center. The building would not
only provide crisis stabilization services, but also crisis
residential services and an urgent care component. There
had been no indications that the plan would not go forward,
and the trust had recently viewed a presentation by
Providence on the current project with a request for
additional funds to continue. He recounted that the
trustees only yesterday had approved roughly $1.5 million
for Providence to continue the work on the project.
Senator Bishop asked for more information on who the trust
was working with for providers in the Copper Valley area of
his district.
Mr. Williams agreed to provide the information at a later
time.
9:49:44 AM
Mr. Williams considered slide 16, "Trust Land Office":
Highlights
•Land sales
•Revenues from USFS Land Exchange parcels
•Icy Cape development
•Easement program
Mr. Williams noted that the executive director of the land
office, along with 18 positions, helped to generate revenue
off of lands for the trust. He highlighted the table on the
right-hand side of the slide, which showed the asset
classes of trust lands. The items showed some of the ways
the trust land office generated revenue. He mentioned
mineral development, timber, leases, land sales, and the
sale of materials such as gravel. He pointed out
anticipated revenue of $11.8 million for FY 23. He
highlighted land sales. He noted that each fall the trust
office had a land sale, where individual Alaskans could
place bids for identified parcels of land. The most recent
land sale had generated $2.7 million of revenue, and based
on the amount he thought the trust would meet or exceed its
goals for the current fiscal year.
Mr. Williams continued to discuss the trust land office. In
addition to revenues from the land exchange and parcels the
trust continued to have timber activity. He mentioned
locations in Naukati, Prince of Wales Island, and Shelter
Cove. The timber activity generated income for the trust.
He added that the activity maintained a workforce in an
area of the state. He discussed the Icy Cape development, a
parcel of land which was near Yakutat, where there was a
possibility of generating revenue from minerals. The
project was working towards a pre-feasibility study of the
parcel. He described that the trust was looking at possible
revenue generation from utility easements.
9:53:02 AM
Co-Chair Stedman corrected that Icy Cape was north of
Yakutat. He mentioned that the Naukati area was on Prince
of Wales Island, and Shelter Cove was in Ketchikan.
Senator Wilson referenced discussions by the administration
regarding carbon sequestration and wondered if the trust
land office had started looking at the issue since it
engaged in timber sales.
Mr. Williams affirmed that the topic was a subject of
conversation that the trust land office was looking into,
with consideration of how it could play into the trusts
work and lands.
Senator Bishop asked how many acres the trust land office
had sold to generate $2.7 million. He asked if the Icy Cape
development was a placer deposit.
Mr. Williams acknowledged that he was not an expert in
mining terminology but thought the term placer indicated
the use of water to wash out minerals from the area, and
indicated yes.
Co-Chair Stedman thought there would be a project visit the
following summer and thought there was a substantial amount
of mineralization that could be lucrative for the trust. He
thought the potential project was a promising area for
revenue and jobs.
9:55:21 AM
Senator Kiehl asked how much interest the board had in the
land office's approach. He opined the trust should be the
most popular entity in the state but thought in many places
the trust was deeply disliked due to its approach to the
land offices activities. He asked if the board was engaged
with the matter.
Ms. Halterman was aware of conflicts with the trust's
resource development projects and feedback from the public.
She did not know if the trusts approach had been as
meaningful as it could be with regard to the trusts land
development. She specified that the trust needed to engage
partners more frequently and in a meaningful way. She
relayed that the board did the best it could, learned from
mistakes as it presented development projects, and engaged
with feedback. She emphasized that the board was very
engaged with the trusts resource development and
emphasized the associated income and jobs creation. She
relayed that the trust wanted the communities to support
the projects, and that the trust needed to ensure that
resource development projects were the right fit.
Mr. Williams added that he had been charged with doing
community outreach and education related to the trust's
role and resources, and how the money that was generated
benefitted communities and individuals. He thought that by-
in-large individuals did not understand the complexity of
the trust nor the difference between state and trust lands
and the trust mission.
Ms. Halterman added that the trust could and would do a
better job of educating beneficiaries about the role of
resource development for programs. She thought there was a
disconnect for beneficiaries that did not understand how
trust land was different from other lands in the state. She
affirmed that the board and the CEO and staff were aware of
the need to engage beneficiaries to understand the
connection to resource development. She cited that the
efforts were started when trust land office was present at
the Improving Lives Conference. She summarized that the
board was well aware of the disconnect and was actively
working to improve the situation.
9:58:44 AM
Senator Kiehl apologized if he had suggested that the trust
should not develop resources, which was not his intention.
He mentioned concepts such as social license. He thought it
was important that when communities learned about a high-
impact development when the work was already underway, the
opportunity to work with the community was lost. He
referenced a roughly 25-year history of a bad neighbor
approach. He thought the trust had every opportunity to do
all the resource development it did without making enemies.
Ms. Halterman thought Senator Kiehl's point was well made.
Co-Chair Stedman relayed that there was a lot of trust land
in his district, and the trust had responded well to
communities while trying to work the issue if there was
visual or view-shed impact through land exchanges. He
discussed monetizing trust lands, which was the trusts
mission. He recognized that trust land development caused
great concern, especially to those that lived next to trust
land. He thought the trust had been responsive to
communities and cited that the trust had harvested timber
and followed up with subdivisions to increase housing. He
recognized there was always ongoing conflict, particularly
regarding timber harvest. He thought the trust was in
difficult position as a land developer.
10:01:31 AM
Senator Wilson echoed Co-Chair Stedman's comments and
referenced a trust project in his district that had
experienced conflict. He thought the matter had been
resolved and thanked the trust, who he thought had handled
the issue responsibly.
Co-Chair Stedman relayed that there was potentially huge
view shed impacts in Ketchikan, in an area where the
Russians had logged up Mount Verstovia. He mentioned the
old second-growth after Russian logging and shipbuilding in
Sitka. He relayed that the issue had been worked out over a
long period of time and worked on a land exchange. He was
sure there were other areas of concern. He mentioned Haines
and Whale Pass.
Co-Chair Stedman asked for more detail regarding real
estate holdings that were subject to the legislative audit
in 2018. He asked about a target holding period and cash
positions of the assets. He wondered about the time frame
of when the projects would be gone.
Mr. Williams agreed to provide an update.
Mr. Williams displayed slide 17, "Thank You."
Mr. Williams appreciated the committees interest and
dialogue and looked forward to a continued partnership.
Co-Chair Stedman looked forward to a presentation on the
Icy Cape development the following year. He suggested that
the next presentation could provide information on income
and job creation potential.
Co-Chair Stedman discussed the agenda for the following
day.
ADJOURNMENT
10:06:17 AM
The meeting was adjourned at 10:06 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 012523 AMHTA SFC Presentation.pdf |
SFIN 1/25/2023 9:00:00 AM |
|
| 012523 Trust Responses to S FIN Committee Questions 1.31.23.pdf |
SFIN 1/25/2023 9:00:00 AM |