Section 1: BILL SCHNEIDER: Okay. Today is December 1st, 2010. I'm Bill Schneider, Karen Brewster is here with me, and we have the pleasure of doing the second in a series of interviews with Jeff Jessee. And appreciate you taking the time to do this.
JEFF JESSEE: My pleasure.
BILL SCHNEIDER: And the last time we talked, we were looking at the history of the issues coming up to, leading up to the establishment of the Trust, and your role as appointed as executive director.

So let's pick up from there and move ahead with the development of the Trust and the successes and failures over the years.
JEFF JESSEE: Okay. Well, you recall the asset framework of the Trust was a million acres of land that the Department of Natural Resources was going to manage with a separate office called the Trust Land Office, and then the $200 million would be invested by the Permanent Fund Corporation, and like a mutual fund, it would be a portion of their portfolio and we would receive our share of the profits or loss and pay our share of the expenses.

So when the first original seven trustees met, their first task was to look at how this financial structure needed to be set up for the most effective use of these resources. And one thing they realized immediately is that if we simply took the annual income from the Permanent Fund and spent that, along with any income from the land, that we would experience wide fluctuations in available income.

And the reason for that is some years the Permanent Fund does really, really well, and on $200 million, you might have $30 million in a given year. On other years, the Permanent Fund doesn't do quite so well. We've certainly seen that recently, and in fact, could even lose money. And that kind of big swing in income was clearly not conducive to any kind of thoughtful, strategic, long‑term planning on the part of the trustees.

So one of the original trustees was Phil Younker, Jr., from Fairbanks, and Phil is an investment advisor, and he started working with the other trustees to develop a framework that would provide a more reliable, consistent, steady source of income for the trustees to use to improve the mental health program.

And what they decided to do was to develop what we call an endowment model. Most foundations are required by IRS rules to pay out at least a certain percentage of their asset value every year. It's called the payout. And that's what the trustees decided to do.

They decided that, well, rather than just spend whatever income came from the Permanent Fund every year, they would pay out a percentage of what that value was, and that income would be added to the land income, and that's what the trustees would have to spend.

Now, that part was good, except that the next issue they ran into is this is a perpetual trust. And so the trustees, unlike a normal foundation, the trustees cannot go into the principal, they can only spend the income.

So their next dilemma was if you are spending this payout every year, percentage of your asset value, if there's no income, in other words, if the Permanent Fund doesn't make a profit that year, then where is this payout coming from, given that it can't come from the principal.

So they realized they needed to have an income reserve that would allow them to make this payout in years where the Permanent Fund didn't generate any positive results.

Section 2: Now, so how much of a reserve do you need? Well, the trustees went and retained Callan & Associates, and Callan is an investment advisor firm that the Permanent Fund uses. And they asked Callan to advise them as to how large of a income reserve the trustees should create in order to be able to make the payout in a sustained negative return environment with the Permanent Fund.

We weren't planning for 1929, but we wanted to be able to make it through most reasonable down‑market scenarios. And in the end, Callan advised the trustees that about four times the annual payout would be a sufficient reserve to ensure that the trustees could continue to make the payout in a reasonably anticipated, sustained downturn in the market.

Well, okay. That's well and good, but now how do you create that income reserve given that, at the very beginning, you don't have any extra income, you just have what the Permanent Fund earned the first year that the $200 million was in their possession.

Well, this is where we got very fortunate because those very early years, '95, '96, '97, were very good years for the Permanent Fund, and so the trustees originally set the payout relatively low, at 3.25 percent. And the idea was that the income above that 3.25 percent would start to fill up this bucket of the income reserve.

The other reason that the trustees felt that was a good strategy is that at the very beginning, we hadn't had any time to really develop a strategy, or even a philosophy or guiding principles around how we were going to spend this money. So having a lot at the very beginning wasn't really a big advantage until we built some of this infrastructure for the Trust.

So those first several years, this reserve filled up relatively quickly to 400 percent of the payout. Well, then the trustees realized that, well, once the reserve is at 400 percent, then you can incrementally increase the payout. And so they raised the payout after, I believe, about three years, they raised the payout to 3.5 percent.

Now, when you raise the payout a little bit, you then have to raise the reserve by four times that. And so the trustees have been progressively increasing the payout to where it's now 4.25 percent, which is probably fairly close to the sustainable payout to preserve the corpus over time.

And the wisdom of this strategy and framework has been demonstrated two times. Once in the late '90s and early 2000s when the market had a decided low point, and our reserve actually went just below 200 percent.

And then recently, in the major recession that we've experienced where the Trust lost nearly a hundred million dollars in value at the Permanent Fund, we were still able to make the payout from this reserve.

So this framework is extremely robust and resilient, and has allowed the trustees to do long‑term planning based upon a reliable income stream coming from primarily the Permanent Fund, and then it's added to again by the income from the Land Office.

Section 3: I should mention also that the two other factors in the management of the assets, one is that revenue from the land comes in two forms. If we lease a piece of property for a power line or parking lot, that lease is counted as income and is added to the payout and is spent the following year.

If we sell a piece of Trust land, we're basically converting one form of principal into another form of principal. And so those proceeds go into the Permanent Fund and become part of the corpus or principal of the Trust.
And over the years, 16 or so years that the Land Office has been managing the land, they've actually contributed nearly $70 million in principal to our original 200 million.

In addition to that, the trustees inflation proof the principal in order to protect future beneficiaries, to ensure that the Trust principal continues to maintain its buying power over time, as we make sure that we are not shortchanging future beneficiaries by focusing too much on current beneficiaries.

So when all is said and done and you work the math, it means that in today, the Trust has a available income every year of about $25 million. At the time the trustees first started when the payout was lower and the Land Office wasn't even going full speed, even then they had about 15‑ or $16 million.

So the question for the trustees at the outset was if this Trust is going to generate $15 million or so every year, then how would you best try to influence the mental health program. Because remember, the mental health program covers people in mental illness, people in developmental disabilities, chronic alcoholics, people with senility, Alzheimer's disease related dementia.

If you looked at state government, and remember, we have a separate appropriation bill just for mental health, so if you looked at what the state spends in general funds for services for those populations, it comes to, back then, about $130 million in general funds. And today, it's probably in the range of $180 million a year.

Now, if you add Medicaid on top of that state general fund amount, then the mental health program quickly goes over $300 million. So if you have $20 million, 15, 20, $25 million, how do you use those funds to impact a $300 million program?

Well, obviously, one thing you would not want to do is simply go out and look at unmet need and say, well, there's not enough respite care, so let's give people grants to provide more respite care for seniors. The reason that would be a bad strategy is that that income going into ongoing direct services would then basically be stuck in those services in perpetuity.

It would be very difficult to start ratcheting back on those services.
Plus, even at 15 to $25 million, you're not going to make a huge dent in unmet need for that amount of money.

And if you needed a further rationale for not taking that approach, it would be that legislature would be likely to be tempted to simply reduce general fund appropriations in the same amount of the funds that the Trust put in, and so in the end, you not only would have trapped your money in these programs, but you would not have resulted in a net increase in services to the beneficiaries.

Section 4: So given that, the trustees developed a strategy that basically casts the Trust as a catalyst for change. And so the basic strategy is to use Trust income to improve the effectiveness and efficiency of the mental health program by leveraging our dollars in order to get systematic change that will create additional benefits to the beneficiaries over time.

So, well, what does that mean? How do you how do you do that? Let's take one of our very first projects. Even before the Trust had been created, recreated, various entities had been working on trying to eventually close the Harborview Developmental Center in Valdez.

If you remember, that was a institution that was actually bought originally, there was a motel in Valdez that was bought with the original cash that came from the Federal Government in the Enabling Act to build the original wing of API, Alaska Psychiatric Institute. And Governor Egan took a portion of that federal appropriation and bought a motel in Valdez and decided to put people with just developmental disabilities there from all over the state.

Now, why would you pick Valdez? Well, because Governor Eagan was from Valdez, and this was actually one of the very first pork‑barrel projects in Alaska's history as a state was using part of this earmark to buy this motel.

Now, the motel was severely damaged during the earthquake, and so the state then rebuilt a concrete bunker‑like institution in Valdez for this population. And at its high watermark, close to 175 Alaskans were institutionalized there, many from rural Alaska, many from Anchorage, all over the state. That was how we served primarily people with developmental disabilities.

Now, over the years, as you got into the '70s and the '80s and there was a progressive movement towards deinstitutionalization, we started to develop community alternatives in the state, and we gradually whittled down the population of Harborview until by the time of the creation of the Trust, we had actually stopped admissions altogether, had a moratorium on admissions, and there were only about 80 residents left.

Now, the problem for the state was that at a population of 80, a census of 80, the fixed costs of the institution are so large that the cost per resident per year was in excess of $160,000.

And that's very expensive level of care, and in fact, a level of care that we no longer thought anybody with developmental disabilities had to have, that we believed that the state of technology, service technology in terms of home supports, foster homes, small group homes, that we could serve all of these people in the community.

Section 5: So the question was already being asked before the Trust was created, well, why doesn't the state just close Harborview? Now, one of the things in my prior life, when I worked for the Disability Law Center, I had gone back East and met with some of the lawyers that had conducted the early and major litigation on a national level around deinstitutionalization of people with developmental disabilities,

and I remember going into a huge high rise in New York City and went to the umpty‑umpth floor to this incredibly ornate law office, and met with one of the senior partners who had worked on those cases.

And he talked a little bit about the litigation, and then I asked him, well, where are those people now? I mean, you got them released from the institution, where are they? And he said, well, he didn't know where they were. I mean, his job was just to get them deinstitutionalized.

And I told him, I said, well, you know, I think I saw some of them on the way in, they are sleeping in a cardboard box on a heating grate in front of your office.
And that's when I realized that deinstitutionalization done poorly is no benefit to the residents that you're trying to help.

And so the key to closing Harborview was to figure out how to develop these community alternatives so that people from Harborview could transition into the community rather than transition onto the streets.

Now, the problem before the Trust for the legislature is if you want to close an institution that way, you have to essentially double fund for several years. You have to continue to pay for the institution and its fixed costs, while you also invest in community capacity, so that you can gradually move people from one to the other.

Well, in the short‑term funding horizon that generally grips the legislature, that was always a problem because it would require roughly $3 million a year for three years in extra funding in order to make this transition. And for probably five or six years before the founding of the Trust, the legislature was unwilling to make that investment.

And of course, there were other forces at play that were not supportive of closing Harborview. The employees that worked there were weren't interested in losing their jobs. This was a very significant employer in Valdez.

In addition, many of the parents of residents were concerned that their children had been living there for so long that removing them even into a setting that might be in some ways more normalizing could be very traumatic for them, and it was a very legitimate concern. And so all those factors had stalled this process of deinstitutionalization.

Well, how does the Trust participate in this? Well, first of all, we, again, because we're able to spend Trust income without a legislative appropriation, we were able to fund some research into exactly who the remaining residents were, what their needs were, and what types of services they would need in the community so that we actually knew what these alternative services needed to be in order to protect and enhance the welfare of the residents.

The next step was to go to the legislature and say, look, we want to assist you in closing this institution the right way. And it was an interesting initial revelation to not only legislators, but also to our beneficiaries and their families and advocates about how the Trust would operate because there was an immediate assumption that the Trust would want to invest in the state‑of‑the‑art, normalized services, like group homes and foster homes and home supports and all that.

Well, the trustees immediately realized, well, now, wait a minute, if we funded those services, then when the state closed the institution, they would just retain the savings and now we would be back to what we described before where the Trust income would be in these community services that we couldn't stop funding, and would just basically be lost to the trustees in future years to do other systematic work.

So what we offered the state was that the Trust would actually pay to run Harborview for three years on the condition that the state would take the general funds they were spending there and invest them in these community services, and then at the end of three years, they would have transitioned their funding into the community, we would close the institution, the Trust would no longer have to pay to operate it, and we would go on to the next project.

And from the state's perspective, this was great, because now they could make this transition correctly, programmatically, and it wouldn't cost them any more than they were already spending. And it worked.
Over three years, we were able to develop these services, and by the way, many of them were developed in Valdez because by then, for many of these residents, Valdez was their community of meaningful ties.

And in fact, Valdez had been a very friendly environment and community for the residents, and so it didn't really make sense to have everybody leave Valdez, and that, of course, helped in terms of the employees realizing that they actually still could be employed, many of them, in serving this population.

At the time, we became the second state in the nation with no institution for the developmentally disabled, and we did it the right way. So that was really our first experience with the power of the Trust, and how it could utilize its resources to assist the state in making systematic change and improvement in the state's mental health program.

Section 6: Let me give you another example. About the same time, we had started to get a lot of feedback from the Alaska Mental Health Board about the condition of women with serious mental illnesses in Corrections. And it was deplorable. Many of these women were so symptomatic that they were unable to be in the general population, and so they were segregated in 23‑hour segregation cells.

And many of them were water intoxicators. And water intoxication happens when you drink a lot of water, first it flushes out your electrolytes, and you get high, and if you keep doing it, you can die. In fact, just a couple of years ago, a woman died of water intoxication as part of a radio contest.

And the Department of Corrections had a solution for water intoxication, and that was to cut off the water to their cells. And this was the Department of Corrections's approach to dealing with seriously mentally ill women in their facilities. And obviously, many people were quite disturbed by this.

So we approached the co‑chair of the House Finance Committee at the time, Eldon Mulder, who was also the subcommittee budget chair for the Department of Corrections. And we asked Representative Mulder if he would tour some of these facilities and see for himself what was happening with these inmates.

And again, we had worked on this for about a year and a half before we approached Representative Mulder.
And he did, very graciously agreed to go look. And then Nelson Page, the chair of the board and I, went to meet with Representative Mulder. And we asked him what his impressions were after having looked at these conditions, and he was quite genuinely shocked at what he saw.

He said, you know, I had no idea that we had inmates in such desperate conditions, and in such need of services. But gee, you know, what are we going to do here, because at the time, the House majority had committed to cutting $250 million out of the operating budget over several years, and so every department had a cap on what the subcommittee chairs could, you know, appropriate for their departments.

And so Representative Mulder said, look, you know, this is a challenge here, plus, you know, I have to say, the Governor is Tony Knowles, a democrat, and a well‑known profligate spender. And it's just not going to happen that the legislature is going to turn over some arbitrary amount of money to the Knowles Administration for this problem.

He says, you know, we don't even know the scope of the problem. You know, we know it's there, but we don't know its dimensions, its scope, and Nelson reached in his briefcase and he pulled out a document he said, well, Representative Mulder, about a year and a half ago, the first thing we did is we commissioned a snapshot study of these women with chronic mental illnesses in Corrections to see just exactly what the scope of this problem was. And handed it to the representative.

And again, the ability to do that comes from the ability of the trustees to spend Trust income without a legislative appropriation. The chances of the Department of Corrections ever getting money to do that kind of a study would be remote.
And Representative Mulder looked through the study, and he says, well, yeah, this is good, good information. This does tell us how many of them there are, and, you know, where they are and what their needs are.

He says, but you know, we don't have a plan. If we just give Governor Knowles a bunch of money, we don't know what he's going to do with that money. You know, we don't even have a plan.

And Nelson reached in his briefcase and pulled out another document and said, well, Representative Mulder, the next thing we did a year ago is we hired a planner, Mara Rabinowitz, by the way, former Chief Justice Rabinowitz's daughter who did an excellent job, and she worked with the Department of Corrections for a year to develop a good, solid plan for treating and housing these women in Corrections. And here it is.

And Representative Mulder looked through the plan and he said, well, yeah, this looks pretty good, you know, we'll have a ‑‑ you know, a reorganized unit, we'll have some clinicians, we'll have a psychiatrist that can provide services, he says, yeah, this is ‑‑ this is good. And he gets to the end, and he hits himself on the forehead and he says $600,000 a year, $600,000 a year.

I have a cap on my budget and I'm the co‑chair of finance, if I break my cap, then all the other subcommittee chairs will feel free to break their caps, and our ability to meet our targets for the budget is out the window. I want to do something here, but I ‑‑ I don't see how this works.

And Nelson said, well, Representative Mulder, we realize that you're facing these financial issues, and so here's our proposal. The Trust will pay 100 percent of these costs the first year. We'll pay two‑thirds of those costs the second year, and we'll pay one‑third of the costs in the third year. It's what I called the no money down, three easy payments, order before midnight tonight.

And Representative Mulder had a napkin on his desk, and he says, well, wait a minute. He says, so over three years, that's $1.8 million in services, and you're going to pay 1.2 of that, and I don't have to put any money in this year at all, and I can plan to put three $200,000 increments in over the next three years in order to get this to happen. And Nelson looked at him and said, that's why you have the Mental Health Trust.

And Representative Mulder sat there for a minute and he said, this is great. Deal. I mean, this is ‑‑ this is terrific. I get credit for doing this right away to solve this problem, I don't have to put any money in the budget in the short run, and I can be planful in how I readjust the department's budget over a number of years in order to fund this.

And Representative Mulder was good to his word and, over the next four years, he put in each of those increments.
Now, as Nelson and I left Representative Mulder's office, Nelson looked at me and said, and gee, over 10 years, that's $6 million in services and we paid 1.2.

Section 7: So the leveraging of the Trust's long‑term horizon against the legislature's relatively short‑term thinking has enabled the Trust to make a number of major systemic improvements in the state's mental health program by assisting the legislature in getting from point A to point B.

BILL SCHNEIDER: And did they pick up the full funding after the three years?
JEFF JESSEE: Absolutely. Absolutely. And again, realized that because the trustees control their income, once that service was in place, if when we reduced our funding by 200,000, expecting the legislature to pick it up, if they didn't pick it up, then the services would go away.

And so they'd be back to the problem that they were trying to solve.
Now, the beauty of this is that this works even when they see it coming. And I'll give you one more example.
One of the things that the trustees pioneered fairly early are what we call therapeutic courts.

One of the challenges for beneficiaries, particularly those with mental health issues, is that if they don't have the supports they need in the community, they often end up in a cyclical process of coming in and out of the criminal justice system, usually for relatively petty misdemeanors.

Can be trespassing, defrauding an innkeeper, you know, eating a meal at a restaurant and walking out, going into a store and getting food off the shelf and walking out. And generally, the way the criminal justice system handles that is they would arrest the beneficiary, they would take them to jail, they would be there maybe a few days, maybe a month, they would end up in front of the judge. The judge would find them guilty and sentence them to time served, and they'd be released.

Well, there are so many negative consequences of this. I mean, just being in jail is not a good place for our beneficiaries. In addition, those that had housing often lost their housing while they were in the Department of Corrections because if they were, say, on SSI, once they got into jail for 30 days, their SSI is cut off.

KAREN BREWSTER: What's SSI.
JEFF JESSEE: Supplemental Security Income, which is basically a Social Security disability payment, which for many of these people, that was their ‑‑ basically, their only source of income.

And so now when they are released, they are often in much worse shape than they were in when they got arrested the first time. And they start the cycle back over. And there was this tremendous churning of beneficiaries coming in and out of the criminal justice system with even the criminal justice participants, whether it's the DA, the judge, the Public Defender, Corrections, all of them recognizing that this makes no sense to just have these people coming through for these petty misdemeanors.

So nationally, in Florida, a new movement had just started called Mental Health Courts. And the way they operate is that instead of going through the normal criminal justice system, if you're one of these people with, you know, misdemeanors that's coming back and over and over, and it's apparent that the cause is not inherently criminal behavior thinking, it's the mental health issues, that you would go into a court with a judge who was trained and familiar with these issues;

that there would be a court coordinator that would be able to connect the defendant to community services; and over time, then we would get the beneficiary settled in the community in terms of housing, treatment, you know, integration activities in the community so they had something to do during the day, and get them stabilized in the community so they wouldn't have to come back over and over for these misdemeanors.

And it was very effective in Florida. And in fact, a judge in Anchorage, Stephanie Rhodes, had really started a Mental Health Court without any resources, just because of her personal commitment to trying to do better by these beneficiaries.

But of course, to sustain that does require resources. You need funding for the case management, funding for the housing supports, all of those sorts of things, in addition to the fact that these courts do consume more court resources because now you may have weekly, biweekly, or monthly hearings on everyone's case where the beneficiary comes in and has to explain to the judge how they are doing.

And so now you've got a Public Defender time, and you've got prosecutor time, and they are already very busy, and they weren't all that excited about these therapeutic courts, initially.

So when the Trust ‑‑ when ‑‑ when Judge Rhodes came to the Trust and said hey, this is something we need to do, I can't keep sustaining this just on my willpower alone, you know, we need some help. And so we started providing funding for this first Mental Health Court to make it sustainable.

Section 8: The other thing that we started doing with that is a rigorous evaluation of the results, which is also, by the way, one of the key initial guiding principles that the trustees set from the very beginning, which was we were going to be a results‑driven, data‑oriented foundation.

In fact, I'll ‑‑ I'll tell you this brief story. Probably the very first meeting of the trustees, Phil Younker, Jr., who I just talked about, asked people in general in the room, well, okay, so we're going to spend the beneficiary's money. How are we going to know what we're getting for those investments? And I remember several providers in the room stood up and said, oh, we've got all kinds of data. We can tell you how many people we served, we can tell you how many units of service we delivered, and we can even tell you the cost per unit of service.

And Phil thought about that and he says, you know, all that tells me is that you spent all the money. I know you're going to spend all the money. What I want to know is if it's an employment program, how many people got jobs and still had those jobs six months later or a year later? If it's a housing program, how many people got housing and kept that housing? If it's a treatment program, how many people's symptoms got better?

And so taking that guidance from the trustees, in ‑‑ in all of our efforts, we rigorously evaluate the results. In fact, even in the Harborview example, we then commissioned a follow‑up study after deinstitutionalization, and went and found all of these 80 people that had been placed in the community and evaluated their quality of life.

And we found two very interesting things. One is it was true, for some medically challenged residents, it had been a traumatic experience. But what we also found is that for many others, they started to function at a level that no one ever believed could be possible by putting them in a supportive, naturalized environment.

People started cooking, people started doing their laundry, doing more of their self‑help skills, and these were profoundly impaired individuals.
We did the same thing with Mental Health Court. And were able to document the effectiveness of this approach to serving beneficiaries in a way different from the normal Corrections approach.

In fact, I always encourage people to go and actually watch the Mental Health Court in action. It is a totally different type of environment. The first thing you notice is that the judge primarily doesn't talk to the lawyers, which is how a normal courtroom works.

The judge talks directly to the client and the clients stand up and they tell the judge how they are doing. Now, their case manager is there, so there's sort of a check and balance on this, the case manager may provide some additional information and clarify what's going on, but the main dialogue is between the judge and the client.

And the goal isn't to punish the person, it's to encourage them and give positive reinforcement to the efforts that they are making to get their lives together, to the extent that most of the Mental Health Court judges, if somebody's doing well, they will give them a round of applause, and everyone in the courtroom will give them a standing ovation.

Judges have been known to come off the bench and give people hugs to congratulate them for what they've been able to do.
And the epitome of that is I was in the Mental Health Court one day, and this woman came in who had been homeless and in and out of Corrections and API for many, many years, she was very well known.

And she was now eight months into this process, and she had a stable apartment, she had a part‑time job, and she was getting treatment, staying on her meds, and she looked great. I mean, she just looked great.

And Judge Rhodes told her, you know, you are just doing so well, you know, I don't think I need to see you next month. You know, I think we can wait two months, you know, and have you come back. And this woman was crestfallen. And she said, well ‑‑ well, judge, are you sure I can't come back next month? I mean, that's how powerful this different type of relationship can be for these beneficiaries.

Section 9: So we worked on, again, developing that model, getting the data for it, and then we started to share it with legislators. And one of the legislators that went to see the Mental Health Court was Senator Lyda Green from the Mat‑Su Valley.

And Senator Green is a fairly conservative legislator, not prone to be extremely supportive of a lot of additional social service funding, and ‑‑ but when she saw the Mental Health Court and heard from people in her district about how these folks in her district with mental illness were being cycled through the criminal justice system and the courts and the jails and recognized the cost to the state of all of that,

she called us in and said, I want a Mental Health Court in my district. Now, how much money in general funds do I need ‑‑ because I know you guys you are running the ‑‑ paying for the Anchorage court, how much do I put in the budget to create a Mental Health Court in my district.

And I said, well, Senator Green, we'd love to help you with this, but here's the deal. We're paying about $250,000 for the Anchorage Mental Health Court, but in the start-up years, it's actually more expensive because there are additional sort of one‑time costs in terms of sending people out for training and, you know, some of these other things that you have to pay for. And so it would probably cost about 325‑ to $350,000 to start a new court for the first few years.

And so why don't we ‑‑ and there's another thing here. And that is that these therapeutic courts require a lot of people in the system to get onboard. You've got the DA, of course, has to be willing to have these charges handled this way, you need a judge, the Public Defender has to be good with this, the probation officers have to be good with it, you have to get the community providers that are supposed to provide these supports onboard, and that's not always easy to do.

And so you need someone who is holding the money and can negotiate the partnership by telling, say, the District Attorney's Office, all right, all right, yes, there are a lot more hearings in a Mental Health Court, what do you need, a halftime attorney? Okay. Here's $50,000. You know. Okay. You know, Public Defender. You know, you're going to need a halftime attorney, here's your $50,000. And ‑‑ and negotiate people into this partnership.

And so I said, so here's the thing, Senator, if you will just put general funds into the Anchorage court at $250,000, we will take $350,000 of Trust money and I will send my program officer, Steve Williams, out to the Valley and have him put this thing together for you. And it will save you money, and it will make it more likely to happen.

And you know, I got along really well with Senator Green, and she smiled and she said, “Jeff, I wasn't born yesterday, I know exactly what you're going to do. You're going to be back in here in three years asking me to put money into the Palmer Mental Health Court, because you're going to try and take your Trust money out.”

And I said, “Absolutely. Absolutely I'm going to come back in three years. But I'll tell you the difference. When I come back in three years, I will have the data on how well that court works, and then you, as a legislator, can decide if those results are worth that amount of money.

If you don't think it is, then you shouldn't fund it. But if you do, then now, instead of investing money on a hope that something will work, you can invest in something that you know is working.” And it worked.
And so we're gradually leapfrogging these Mental Health Courts all around the state.

BILL SCHNEIDER: Using the same strategy?
JEFF JESSEE: Using the same strategy. And helping to ‑‑ to get the critical mass of folks in the communities that are interested in this model familiar with it and comfortable with it and understanding how to do it, and then providing that upfront funding that allows them to actually get the service working.

Section 10: Now, of course, the trustees initially ‑‑ these are somewhat unconnected projects, you can kind of see that, you know. There's one over here with developmental disabilities, and well, here's something with Corrections, and here's the court system, and you know, there's several others that we could talk about.

And the trustees started to think after about four or five years that this shotgun approach was probably not the most thoughtful and strategic; that it worked initially as we were sort of figuring out how this worked, and getting the infrastructure set up, and getting experience with the legislature and the executive branch, but in the long run, we probably needed to focus our efforts in some specific arenas and try to make major systemic change over time.

And so they ‑‑ with the help of our advisory boards, they went through a process of ident ‑‑ identifying focus areas. And they came up with five focus areas. One was disability justice, which you've already seen a couple of examples in that arena. Another was what we call beneficiary projects. This is a very fascinating area.

In the mental health system, the traditional mental health providers have not seen peer support as necessarily a key component of a system of care, which is different than, say, in substance abuse where peer support is basically one of our primary ways of working on substance abuse problems.

AA is basically a peer support system of care, but mental health came up and developed through the medical model. And so they tended towards treatment by a professional, medication, that sort of approach, not really seeing the value of peer support.

And yet, springing up all over Alaska were small pockets of people who experienced mental illness that were banding together to support each other, often somewhat at odds with the established mental health system because they found value in mutual support and understanding. But they were just people meeting.

They had no organizational structure, they had no financial support, they were just doing this out of the goodness of their heart, and it was a constant struggle.
Now, nationally, again, there were examples where clubhouses, drop‑in centers were being developed in different areas.

And so the trustees wanted to work in that area, and what can we do to support these beneficiaries that want to help each other rather than have them just be dependent upon the traditional mental health service system.

And so we started engaging those groups, and it was tough going for a while because the initial thought was, well, if they are going to get structured and have a sustainable situation, then, gee, are they all going to have to become 501(c)(3)s and become a nonprofit? Well, a lot of stuff comes with being a 501(c)(3).

You know, you've got to have a board of directors, you've got to have bylaws, and you know, you have to manage your finances, you've got to file IRS forms. Gee, these people don't necessarily want to spend their time running a nonprofit, they are just trying to help each other. And yet, if you want to go to light speed, if you want to get funding, whether it's from the Trust or from the government or from private donations, you've got to have something for people to give it to.

And so when we first started, and the trustees allocated about a million dollars for supporting these organizations, about 15 of them around the state, we spent another half a million just on technical assistance. I mean, that was the ratio we needed to have because these groups were so embryonic in terms of their ability to function as an organization.

And then we also developed what we called kind of a menu approach, which is, well, if you want to become a 501(c)(3), which some of them did, and some of them could, with support, that's fine, but maybe others of you could fit under the umbrella of another organization, and share their resources in terms of financial accounting and, you know, that sort of thing. And so we started to give them a lot of choices in terms of just how organized they wanted to be.

And now, we have evolved to the point where instead of 50 percent of the amount of grants that we give, technical support is a little less than 20 percent because they've made a tremendous amount of progress in terms of becoming structured and organized and, you know, really able to hold their own, even to the extent now that we are training and certifying beneficiaries as peer support specialists, and they will be able to bill Medicaid for the value of their services.

And now they are being employed by mental health centers in order for the centers to be able now to provide this additional type of service to beneficiaries in their catchment area.

So this is a huge advancement in terms of empowering beneficiaries to do their, you know ‑‑ to manage their own recovery and not feel like they are totally dependent upon the professional mental health system for all of their recovery needs.

Section 11: BILL SCHNEIDER: What do those centers look like?
JEFF JESSEE: They are ‑‑
BILL SCHNEIDER: Not physically, but in terms of how they function.
JEFF JESSEE: Well, they have board of directors that are made up primarily of consumers, but the boards, part of the technical assistance is helping them understand that, well, that's well and good, we want you to ‑‑ want to support you in being consumer driven, but you need somebody that understands finances on there, so getting a banker on would be good.

Having a lawyer would be a good idea. And so now other members of the community are on those boards, and ‑‑ and they operate like a ‑‑ many of them like a 501(c)(3), they are a 501(c)(3). And they not only receive Trust funds, but now they have the ability to go out and seek other grants. Some of them have partnered with their local behavioral health center and they are actually an arm of the center.

BILL SCHNEIDER: What do they actually do? Do they do counseling or do they have events, or ‑‑
JEFF JESSEE: They ‑‑ well, let me give you an example. In Anchorage there's a Consumer Web. And the Consumer Web is a sort of a clubhouse model, and it's got a location, a building, and if you're a mental health consumer and you walk in the door, you're greeted by now I think three or four paid employees who are themselves consumers in recovery.

There's always a coffee pot on the stove, they have a bank of computer terminals, you can go online and surf the net, do a Facebook page. They have consumers that volunteer to do carving classes, drawing classes.

I mean, many of our beneficiaries are incredibly talented, and so they share those talents with the other people that come to the clubhouse. They read books, they hang out, they chat, you know, it's a place, a safe place to go and have access to these other sorts of things. It's not a treatment program.

Now, many of the clubhouses like the Consumer Web have peer support specialists onboard that could help consumers access services if somebody comes in and ‑‑ and, you know, the peer support specialist says, well, how are you doing, you know, gee, you know, do you have a place to live? Are you homeless? Well, yeah, I'm homeless. Well, do you know how to get on SSI? No.

Well, here, let me help you figure that out. You know. Here's a housing agency that we can call with you. You know, here's how you might get employment training. You know, and help connect them to services. But again, it's not a treatment program.
BILL SCHNEIDER: Let's stop and change tape.