The Alaska Mental Health Trust Authority is trying to change the laws that govern how it uses its principal funds. Some board members hope the legislation will pass soon enough that the organization does not have to undergo a special legislative audit.
The Trust was created to fund mental health programming around the state. It came under scrutiny last year because the Board of Trustees was investing the Trust’s principal on their own instead of having it managed by the Permanent Fund. Some of the people who helped create the current Trust in the mid-90s said that violates the state statutes put in place to safeguard the Trust into perpetuity. A special legislative audit was ordered in December.
Trust Interim CEO Greg Jones said Sen. Anna MacKinnon requested the Board submit legislation for consideration. He said the proposed laws would give the Board and the Trust Land Office the legal authority to do what they’re already doing with the principal.
“For years we’ve used it for a variety of things – stewardship of our land, increasing the value of our resources, diversifying our income,” he said. “We believe those are all appropriate things for the Trust to do, but they aren’t addressed in current statue and current laws.”
The current statue was crafted over 20 years ago and said the principal shall be invested by the Permanent Fund, not by the Board of Trustees. Jones said it’s time for an update. He is working with lawyers and the Attorney General’s office to draft the new legislation, which will include limits on what the Trust can invest in and will tie the expenditures to the mission of the Trust.
During a special board meeting on Tuesday, some members of the board, including Vice-Chair Mary Jane Michael, expressed frustration that the legislation was not ready to present yet. She said until new legislation is passed, the Board can no longer invest in income-generating commercial real estate.
“It’s costing us ultimately millions of dollars. We’re losing our connections to the Outside investing world. You know, it’s impacting us,” she said.
She and Board Chair Russ Webb said passing new legislation could make the legislative audit unnecessary.
“There’s nothing more important we could do right now than to get legislation going,” Michael told the board. “Cause it will save us a lot of work in the long run if we don’t have to have the audit, and we don’t have to a lot of these other things because we’ve dealt with what we need to deal with.”
Jones reported to the board that the audit is scheduled to start in May and could take about a year to complete.
Some of the Trust’s advisory boards wrote letters last year supporting the completion of the audit because of concerns about the Trust’s “lack of transparency and meaningful public process related to land management and property acquisition.”
Jones said the Trust will also be undergoing an organizational review that might overhaul its structure and bylaws.