|  July 29, 2014  |  
Fair   70.0F  |  Forecast »
Bookmark and Share Email this page Email Print this page Print Feed Feed

Alaska Mental Health Trust

The Fort Knox gold mine pays royalties for gold it extracts from Alaska Mental Health Trust land.

The Fort Knox gold mine pays royalties for gold it extracts from Alaska Mental Health Trust land.

PHOTO: Courtesy of the Alaska Mental Health Trust

Putting resources back into the community

 

Catelyn Schnell’s life hasn’t been an easy one. Incidents of abuse scarred her childhood from the age of 8, but no one seemed to notice, no one offered help. Her own mother didn’t believe her.

Schnell, at 13, found solace in a drink of Jack Daniel’s whiskey someone offered her, and drank alcohol or used drugs just about every day of the following 22 years.

“I found it took my sadness away,” she said. “I self-medicated the emotional pain I was suffering through. I believe I was born with this disease. It was on full-force from the moment I took my first drink. I would drink until I blacked out and it didn’t stop until I went to treatment.”

Alcohol, crystal meth and cocaine propelled Schnell’s life. She desperately wanted help but thought she couldn’t afford it.

The Alaska Mental Health Trust Authority provided the lifeline Schnell needed, funding programs that helped her build a life free of alcohol and drugs.

“Back then I didn’t know it was Trust money, didn’t know where the money came from,” Schnell said. I would have gone to treatment sooner. I didn’t know there was money allotted for people like me.”

The Alaska Mental Health Trust is a perpetual trust originally formed in 1956, before Alaska became a state, when the United States Congress set aside 1 million acres of land with the purpose of using income from it to pay for mental health services.

About 65 percent of the land ended up in the hands of municipalities and individuals until the mid 1990s, when a 1982 lawsuit reconstituted the 1 million acres and created the Alaska Mental Health Trust Authority, a state corporation that has since administered and used income from the land.

Income from the land is only a portion of Trust income. The greatest portion comes from the Trust’s investments in the Alaska Permanent Fund. The seed money for this fund was $200 million in cash from the settlement of the 1982 lawsuit. Since inception, the Trust fund at the permanent fund has grown to about $450 million, including deposits from the Trust’s land management efforts.

Private Foundation

Similar to private foundations, the Trust uses a payout system based on prior years’ income that determines how much is available to spend each year. Annually, the Trust’s operating budget is approximately $26 million to financially infuse programs helping people who are mentally ill, homeless or addicted to alcohol and other drugs.

Trust funding also supports people with developmental disabilities, Alzheimer’s disease and related dementia, and traumatic brain injury.

The Trust operates like a private foundation: The governor appoints members of the Trust’s board of trustees to five-year terms and the Trust Land Office, a unit within the Alaska Department of Natural Resources, manages the Alaska Mental Health Trust Authority’s land and natural resources.

“If we weren’t here, then those expenses would fall to the State of Alaska,” says Vivian Hamilton, spokeswoman for the Trust.

Jeff Jessee, chief executive officer for the Trust, says it concentrates funding on five program areas, with the intention of making long-term improvements in services for beneficiaries.

Bring the Kids Home

Bring the Kids Home began in 2004 in an effort to bring home Alaska youth who were being treated in out-of-state residential psychiatric treatment centers, where they were separated from their families, cultures and communities. From FY04 to FY11, the number of youth admitted to RPTC decreased from 749 to 96 adolescents. The decrease in children going Outside for more costly residential treatment was possible because the Trust helped fund the buildup of home and community-based services throughout Alaska. Home- and community-based grants served 1,463 youths in FY11. The recidivism rate within a year of leaving a residential psychiatric treatment center dropped from 20 percent in FY04 to 7 percent for FY11.

Affordable Appropriate Housing

Affordable Appropriate Housing grows housing options for Trust beneficiaries. Approximately 6,460 Alaska residents reported being homeless in the Alaska Housing Finance Corp.’s January 2011 Alaska Total Homeless Count. The number of homeless families with children rose from 822 households in 2010 to 1,223 households in 2011. The program aims to put funding into the AHFC’s homeless assistance program, as well as the special-needs housing program, Department of Corrections discharge incentive grants, Bridge Home project expansion, assisted living home staff training and long-term care strategic planning.

“Our poster child project is the Bridge Home project,” Jessee says. “It takes people who are coming out of Corrections or (Alaska Psychiatric Institute) and works with them to get them supported housing.”

Thanks to supported housing, Jessee says, the number of “admits” from DOC fell from about 20 a year to about 13. API admits fell from 27 to 16.

“These are folks who tend to cycle through the system on a regular basis, “Jessee says. “They tend to get caught up regularly in low-level misdemeanor offenses, get let out and cycle right back through. This is to stop that cycle, get them into a more stable environment.”

Karluk Manor is a housing endeavor aimed at helping chronic inebriates and reducing the cost of their care.

“They get their health care at the ER, which is our most expensive type of service,” Jessee says. “They have compromised health, so they use the ER a lot. Every time 911 is called for a person down, the police and fire department respond, all of these costs add up. It’s obviously not a good quality of life for these folks. It makes way more sense to house them than keep chasing them around.”

 Disability Justice

Disability Justice aims to keep Trust beneficiaries out of the criminal-justice system or keep them from re-offending. Incarcerated beneficiaries usually are mentally ill, developmentally disabled or suffering from alcoholism or other substance-abuse problems. They spend a disproportionate amount of time in custody. Hundreds are incarcerated each year because detoxification services are not available, and beneficiaries can be vulnerable prey for people who want to victimize them financially or physically. The program hopes to grow its capacity for offender-reentry programs, expand therapeutic courts to targeted communities, increase Corrections’ mental health clinical capacity, and increase community treatment options statewide for therapeutic court participants.

Beneficiary Projects Initiative

Beneficiary Projects Initiative supports grassroots, peer-to-peer programs for beneficiaries. “Peer-based service models of care are based on the principle of mutual support, have been tested in multiple environments and are grounded in the values of community and relationship,” according to the Trust.

Workforce Development

Workforce Development creates an available, competent work force for beneficiaries and social service providers. The health-care industry is growing rapidly in Alaska, according to the Alaska Department of Labor and Workforce Development, but job vacancies in this field remain a critical issue. Alaska has one of the lowest health services jobs-to-population ratios in the U.S., ranking 45 out of 50 states and Puerto Rico, a strong indicator of a shortage of health care services in the state.

Principal or Spendable

Trust land generates two types of revenue. The Trust Land Office reinvests royalties it takes in from resources such as oil, gold, coal and timber, and other assets that are not replaceable and it invests in real estate projects that generate income that can be spent on programs for the Mental Health Trust. Revenue-generating uses of Trust land include land leasing and sales; real estate investment and development; commercial timber sales; mineral exploration and production; coal, oil and gas exploration and development; sand, gravel and rock sales, and other general land uses.

Rents, fees and 15 percent of timber revenue from Trust land uses are considered “spendable income” and are available to the Trust for use in the following fiscal year.

The Trust Land Office is also involved in commercial real estate. In Anchorage, it owns a Midtown office building and is developing a medical office in the University Medical District, also known as U-Med.

“It grows the asset base and also generates income,” said Greg Jones, executive director of the Trust Land Office. “Our target is to generate an 8-percent-range income. If we invest $20 million in real estate, our goal would be to generate $1.5 million to $2 million a year to go into The Trust.”

Land sale revenue, hydrocarbon and mineral royalties, and 85 percent of timber revenue are considered “principal” and are deposited in the Trust corpus, which is held and managed by the Alaska Permanent Fund Corp.

“We’re busy on all fronts,” Jones said. “We’ve ramped up activities on virtually all activities we manage.”

The Fort Knox gold mine pays royalties for gold it extracts from Trust land it leases. It has produced 6 million ounces of gold and an estimated 2 million ounces of gold in the ground awaits recovery. The Trust also leases 22,000 acres to International Tower Hill for its prospective Livengood gold mine.

“They’re estimating 13 to 15 million ounces of recoverable gold are there,” Jones says. “They’ve drilled (more than 600) holes in the process of trying to find the edges of the resource.”

The Trust has also leased 230 acres in Salcha to placer miners who, with the current high price of gold, are using modern techniques to try to pull gold from tailings mined in the past.

The Chuitna coal resource is located on Trust land and there is also coal in the ground on Trust land in the Chickaloon area, Jones says.

Natural gas is yet another resource that promises royalty income for the Trust. Buccaneer hit one well last summer near Wal-Mart in Kenai and is producing gas from that well. Seismic work was under way earlier this year by Buccaneer to determine the size and shape of the field. Apache is also seeking oil and gas in Trust acreage in the Cook Inlet region.

In Southeast, Alcan Timber Inc. is wrapping up a five-year timber harvest on 5,000 Trust acres east of Ketchikan at Leask Lake.

“Timber provided most of (the Trust’s) revenue since the late ‘90s--almost $40 million total,” Jones says. “Since the settlement, it’s averaged $2.5 million a year. It’s by far the single largest source of principal revenue of all of our resources. The bulk of the timber has gone to Asia. It’s been very profitable for the Trust.”

The Leask Lake timber is the last Trust source of so-called “noncontroversial” timber, Jones says. It has 20,000 acres of remaining timber-bearing land situated in places like Douglas Island, Ketchikan, Meyers Chuck, Haines, Sitka, Petersburg and Wrangell. The Trust is working toward a 20,000-acre Prince of Wales Island land trade, because, “In most cases, most of those communities don’t want us to harvest that timber because it’s the viewshed of their community. They hunt, they fish, they hike on Trust land. It’s beautiful old-growth forest.”

Jones says after the Trust was reconstituted in the mid 1990s, it spent 10 years generating income from “low-hanging fruit.”

“We logged the easy timber, went after the stuff that was easy to get to,” he says. “Now there’s no more low-hanging fruit. Some of our current projects are controversial, technically harder to get out of the ground—underground coal gasification—there are regulatory challenges. But the value of Trust assets is huge. It’s billions of dollars. We’re focusing on developing information on resources, working closer with oil and gas, mining, forestry industries. We’re open for business.”

This story originally appeared in the April 2012 print edition of Alaska Business Monthly magazine.

Add your comment:
Advertisement
Advertisement
Advertisement
Advertisement
Advertisement