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2013-04-09 Joint Work Session CITY COUNCIL — BOROUGH ASSEMBLY JOINT WORK SESSION AGENDA Tuesday, April 9, 2013 Assembly Chambers 6:30 p.m. (Borough Chairing) Joint work sessions are informal meetings of the Borough Assembly and City Council where elected officials discuss issues that affect both Borough and City governments and residents. Although additional items not listed on the joint work session agenda are sometimes discussed when introduced by elected officials, staff, or members of the public, no formal action is taken at joint work sessions and items that require formal action are placed on a regular Borough Assembly and /or City Council meeting agenda. Public comments at work sessions are NOT considered part of the official record. Public comments intended for the "official record" should be made at a regular Borough Assembly or City Council meeting. Public Comments (limited to 3 minutes each) Agenda Items 1. Nonprofit Community Foundation Concept — Dennis McMillian, President and CEO, The Foraker Group 2. Fisheries Update 3. Military Facility Zones Assembly Joint Work Session Packet April 9, 2013 Page 3 of 31 ITEM #1 theforakergroup Report curalke Alaska Nonprofit Economy F giamaggiumov &Enna@ • , . AA" t l l J r • X81 4 _ Yt' �.�. _ lfr� °_ is _ ._ ✓` .; v A lt. SIM • I This report is the second in a series that describes the significant impact of the charitable nonprofit sector in Alaska's economy. The first was published in 2007. The reports are presented by The Foraker Group and compiled by the University of Alaska Anchorage Institute of Social and Economic Research. Assembly Joint Work Session Packet April 9, 2013 Page 4 of 31 S • fintroductiion $ '. 0 Alaskans a better place tb live becausetof'its nonprofit sector, whose organizationsipursue a broad range of missions contributing tothehealth and well being of everyone who lives, works and visits here. The significant impact of Alaska's nonprofit sector can be seen in all parts of Alaska's economy - in our local communities, across our diverse regions, throughout the state.. It is essential that Alaska's residents, policy makers, businessand community leaders understancfthe,nonprofit sector'sleconomic impact on the people who call Alaska Thome:' This report will assist with that understanding. - DENNIS G. MCMILLIAN President and CEO The Fora ker Group The full.version ofthis report is available at www.foraketgroup.org Assembly Joint Work Session Packet April 9, 2013 Page 5 of 31 aoapnfirra %ffl&OcutibilOtiv 3 033 Cermogkla, iamb cm have encouraged MOD nonprofits Q»)se iously onsider theirsustainabliity.G Il1BN (L'ETit ` o�iarnsTantlrse} ,r E3'J3b D cio Ole aim cza lltba D33t Q opportunity 93succeed. % - " Through car cecazi 7 mat C`$Ia non prof its, a GEM articulated (tt ( z (rte- ".Q ( : Lp important Oil ,( FOCUS, �� o sustainable organization. The Foraker / --' O O , p Group Nonprofit Susminnbility Model a depicted Q'rl( t % 'kO diagram= guides (PDCCD organizat'anaI behavior Cla ) tki" .. provides(CC'1TJ foundation CO our work C',$>);) t(>,'L9 sec tor. 41.0 �rdje SluaejStn e� %O Focus if:3t.Lb$Srd bill ty - knowing ega cal C'Lue totbaccez op critical (p long -term tIMEGGED, Without( 43310E1111 1310 disci pl ine 03(1111vaCita organizations GE1590 difficult IMMES1921±180tflimi ssions. at i3:818 Positive tithEligE4 C' MO et2GOD7 requires Foraker ODEIMs trong, nimble OE fR -t1143t7DOZMACIBCPD 03 supported tpaao " spokes" df unrestricted funds CAD practice dl sustainability. t219021ZeDGIZep others, balb income ad R !03Q9 Qro(Lb organization's (n, Mig Clan prescribe CID organization's Game tag l mission ;board /staff balance (jip board6321@E leaders tb$cilectlifl questions COl CID t(;'I7.A f�lFdA. power,( rQ respect; alp partnerships di= CAD journey. r ttDCaraf momentum organizations aECoI eEI , Mae sector grows, WilporganizationspitilifibalE433 continues, onalutado C73megaa' Tel Ct tom'BED(CJG spokes dB abbOtallieduaiS tfil balance, Q sustainable nonprofit esszpazamstrat e gic aid organizations organizations Qin proceed Crifi la journey co sustainability economically eitefilbGTOMMEablEGO3C8 Alaska aid Ba/,9C- 9 deliver programs end @mama communities and WEIJ advocates 9DHi;3(RDaftsza, Reviewing data eza fib model It mi nd, era found WO elements Cf sustainability t hat OR? out- of- balanc - -e human resources ({staff /board) acid unrestricted funds. &'b don t have enough people m lead, a a Cm organizations di po8 have enough unrestricted funds perform @l,� their mission. Assembly Joint Work Session Packet April 9, 2013 Page 6 of 31 m Kg i&ith The Alaska Nonprofit Economy Report: 201015 the second QoQ:$y findings support WO conclusion ccremeaity in a series of comprehensive examinations of the impact represents ® majarpp. p(7( jp state's economy: of the nonprofit sector on Alaska's economy. The first was published in 2007. Both studies were commissioned • Total nonprofit expenditures as reported here show an by The Foraker Group and developed with the Institute of increase from those reported in 2007, Social and Economic Research (ISER) at the University of Alaska Anchorage. • The percentage of the state's workforce employed by Alaska nonprofits also increased. This executive summary represents the highlights of our findings, which were analyzed by both Foraker and • Charitable giving grew. However, optimism over that ISER. The report focuses on the charitable portion of the growth needs to be tempered because data was nonprofit sector, as well as employment and economic gathered before the economic recession began in 2008. impact of the sector overall. embteit grodrst3 reportW e(120 nonprofit For the most part, the data for the current report is based aaE'L10B 0 significant Impact COM state's economy, on 2007 information, the most recent year for which A0B&SC ACF2 6 1=06Sg(i •(i07pCf7 complete statistics are available. The previous report, bp growing ( published in 2007, covered data from 2003 and 2004. Comparisons between the two reports are made when we The number of nonprofit organizations operating believe it is useful for readers. in Alaska has grown significantly since the 2007 report, placing a strain on the sector's already -taxed infrastructure to support all of them. • The sector's dependence on government grants has dropped. However, it remains high compared to the rest of the country. • Corporate and foundation giving continue to be disproportionately high compared to the national average, V6)2 nonprofit sector b® significant part CjjAtaska's economy. Assembly Joint Work Session Packet April 9, 2013 Page 7 of 31 I _ Alaska's Nonprofit Sector: Its Size and Composition The nonprofit sector in Alaska is comprised of non - governmental organizations commonly referred to as "sow" federally recognized nonprofit corporations. These entities are exempt from corporate income tax and enjoy a variety of other tax benefits. As was noted in the 2007 ISER report. Alaska's nonprofit sector remains large and diverse and continues to grow. Sector growth Sector composition The number of nonprofit organizations operating in In the current report. Alaska reached a total of 7,027 Alaska as reported in 2010 has grown by close to 17% in nonprofits operating in the state when three additional • just three years, now totaling 7,027 compared to 6,000 factors are considered: as reported in 2007. Using data from the 2010 Census, which sets Alaska's population at 710,000, one nonprofit 1. One hundred significantly large nonprofits are exists for every 100 Alaskans. That compares to the registered in other states, but operate in Alaska, They 2007 ISER study, which found one nonprofit for every 110 are represented in the total count. Alaskans. Looking at this from another perspective, one nonprofit exists for every 70 Alaska adults who are legally 2. Approximately 1,000 additional organizations are not able to serve on a nonprofit board. required to register with the IRS because they have annual revenues less than $25,000. They, too, are With such a large number of nonprofits in a state with included in the total count. a small and widely disbursed population, the obvious challenge is finding enough people who'are both 3. Another 600 of Alaska's approximately 1,200 religious interested and qualified to serve on boards and work as organizations are included - the other 600 have legally staff. This presents significant challenges to maintaining chosen not to register and are not part of this report. sustainable organizations. However, not all 7,027 organizations are part of the Registered charitable nonprofits operate in virtually every analyses included in these pages. Like the 2007 report, Alaska community. However, the vast majority of them this one focuses on the registered nonprofits operating - nearly 75% - are found in Alaska's urban centers of in Alaska, including those larger organizations registered Anchorage, Fairbanks, Juneau, Matanuska - Susitna Valley in other states but maintaining operations here like and the Kenai Peninsula. Within the urban areas, most Providence Hospital. The report excludes all religious organizations are located in Anchorage and Fairbanks, congregations, but not "faith- based" social service with many of those operating statewide. organizations like Catholic Social Services, It also excludes nonprofits that are too small to be registered The remaining 25% are located in Alaska's rural areas, with the IRS. with approximately 15% in remote rural areas. While the actual number of nonprofits in Alaska's remote rural • regions is small, they have a significant impact on local i economies, accounting for as much as 50% or more of spending and employment in their area. Assembly Joint Work Session Packet April 9, 2013 Page 8 of 31 c Number of Alaska nonprofits in 2010 - registered compared to other Registered 4,727 Other 2,300 religious congregations public charities (exempt) ,.zoo 3,009 3 civic leagues 553 private foundations 756 registered outside not registered with but operating in Alaska too IRS (small) 7.000 member serving 7,009 9mre: C :tin: of registered nonprofit: Juno Nntia Center lc Chadtobtt Statistics website. 9,h') /Id. Count of other animated by ISCCR. As an indication of the sector's growth, one only has to Urban Institute, the nation's nonprofit sector continues look at the increase in registered nonprofits in Alaska. In to grow faster than the business and government sectors. 2004, 4,765 Alaska organizations were registered with That is clearly the case in Alaska as well. the IRS compared to 5,327 in 2007 - that's an increase of 10% in three years. More notable, however, is the total Total employment for Alaska public charities was 32,000. number of nonprofits operating in Alaska - 7,027, or a Although small in number, health nonprofits employ the 33% increase. Alaska's nonprofit sector has grown along most people and have the highest expenditures. with the national nonprofit sector, which over the last ten years has increased from a little over 1.2 million to 1.5 million - more than a 35% increase. According to the Composition of Alaska public charities Number of organizations Employment Expenditures (i,76o) (32,710) (2.97 in billion) o, 42% 5% 29% 6% 3% 4% �. - social services - health - education l 61% 60% - civic - arts /culture Source: National Cortez jar chudtnble Smdsdc, data film. Assembly Joint Work Session Packet April 9, 2013 Page 9 of 31 7 Organizational expenditures and staffing The majority of Alaska public charities are small, with budgets of less than $1 million. Nearly half have budgets under $100,000. This breakdown has changed little since the 2007 report. The relationship between Alaska public charity staff and expenditures 0 100 200 300 400 500 I] no staff 25i00 Million ( i with staff $10-5100 Million - 51 -$70 Million 1111111111.1111111/ Sioo Thousand - si Million MEM ' 510 -5700 Thousand I it $ Y ?r St% of Alaska's pubikchnritfes have annual expend of less $1 -S10 Thousand 0 than Si million. <$1 Thousand t source: National Center/at Charitable Slansfl<s data filer. Number of organizations Expenditures in billions (1Jeo) organizations without staff sn without staff s.05 .\\ w ith staff 803 organizations with staff $2.92 The lock of staff is a key factor threatening nonprofit sustainability. The vast majority of Alaska's smaller nonprofits have no staff - relying only on volunteers for momentum and institutional knowledge. Assembly Joint Work Session Packet April 9, 2013 Page 10 of 31 C Public charity composition by type and staff - social services - health 0. education - civic o arts /culture Number of organizations Employment II social services 42e.g social services 28% health 9% health 60% H education 13% F.:".44'ttik7.141 Civic 18% i �w education 3% arts /culture t6% l amont s civic 5% arts /culture 2% .zua^: Nacional Center jar Cha,itable statltrics data flies. Public charities operating with staff account for roughly The top ten largest public charities are hospitals and 98% of all expenditures. The four largest nonprofits comprehensive healthcare providers that serve primarily operating in Alaska (Providence Health arid Services Alaska, Alaska Native communities - 6 out of 10 are Alaska ' Alaska Native Health Consortium, Yukon - Kuskokwim Native health and human services nonprofits. Health Corporation and Banner Health /Fairbanks Memorial Hospital - Denali Center) account for over 37%b of total Taken together, Alaska's 501c3 public charities accounted nonprofit expenditures at close to $1.1 billion. for nearly $3 billion in annual expenditures (out of a total of $4.5 billion), though public charities without staff account for a very small share (2 %) of those expenditures. Viewing this data through a sustainability lens, it's notable that Alaska has a high number of arts and culture organizations with an extremely small number of staff, while we find a small number of health organizations with a large number of staff Assembly Joint Work Session Packet April 9, 2013 Page 11 of 31 i .' er I . Employment impact The nonprofit sector in Alaska is a major employer and the proportion of nonprofit employees as part of the total Alaska workforce remained relatively stable between the 2007 and 2010 reports. The 2007 report noted the dynamic and consistent growth of the sector, with a high percentage of Alaskans working in nonprofits compared to the rest of the country. That trend has not changed. Civilian employment in 2009 Alaska U.S. nonprofit 70.3% government 24.5% nonprofit s°Io government 7 4, s \ -\\::::) private, 65.2% private 77.2% Source: US Deportment of commerce. 4mennue community Survey 7009. Toole 84106. When viewed by regions - urban, rural, and remote rural Nonprofit workers are most prevalent in the health and - the percentage of workers in the sector climbs, reaching human services sub - sectors, with over 60°%o employed roughly 12% in remote rural Alaska and as high as 50% of by higher wage health organizations, and 30% in human all employment in some communities. services. The next sub - sectors in line are much smaller in both job numbers and payroll impacts. In 2007, public charities employed 32,110 workers, or close to 90% of total employment in the sector. The Member serving 501c3 and 501c4 organizations number was just over 27,000 in 2004. The biggest employed less than 10% of the total nonprofit workforce. ' growth took place within public charities, which overall saw a 14% growth. Within that category, each sub - sector The largest nonprofit organizations are among the largest performed quite differently. overall employers in the state, and that percentage is • Education organizations increased by 13 %. increasing. In 1994,14 public charities existed among the • Health related organizations increased by 20 %. 100 largest private employers - that number increased to • Arts /culture organizations increased by 15 %. 19 in 2005 and included two large utility cooperatives. In I • Civic organizations increased by 14 %. 2009, the number of nonprofits on the list of the top 100 • Human services organizations increased by 5%. employers had grown to 22. Assembly Joint Work Session Packet April 9, 2013 Page 12 of 31 to Alaska public charity growth - 2003 -2007 • number of organizations Overall, changes occurred between the 2007 and 2010 • staff expenditures reports in number of organizations, staff and expenditures: Hots of this growth can be auncuted w Civic organizations saw significant growth - 30% in • o0% ohponsion of the Anchorn,s Mwmum FowOntion. three years. 8o% - • Education organizations also increased - at just below 30% 60% - • Arts /culture and social services experienced the smallest growth in number of organizations -both at 40% . 20% IMO LI approximately 10 %. total health social civic education arts/ services culture Sauce: National Corner for Charitable Statisacs dorn tile:. roe: Number ofheabh org°nizotlau unaeailncte in the post sway. Alaska's civic leagues and social weltare organizations There were 207 reporting civic league and social welfare organizations in Alaska in 2007, with combined expenditures of $129 million. This compares to 2004 when there were 169 reporting organizations, with combined expenditures of nearly $103 million. Civic leagues and social welfare organizations - 501c4 - social services - health Revenues of civic league and social welfare nonprofits, - education such as Lions Clubs, Rotary, and Veterans of Foreign - civic Wars, are most likely to come from program services and - arts /culture government fees and contracts (55 %). Contributions, t00% >30% - 17% - 8% gifts and grants account for only 6% of revenue. 80% 1% sa °ra ° In Alaska, nonprofit jobs continue - - - - -- to grow - from 7% of the total QO ° 59% 80% " 90% workforce in 1990 to more than r 7% 7% f ' - ' — - 2% 10% in 2009. Number of organizations Staff Expenditures (207) (760 (1294 in million) source: Nouonol Center for Chnntchle• Statiaics data fifes. Assembly Joint Work Session Packet April 9, 2013 Page 13 of 31 n Member serving nonprofits Number of organizations Employment Expenditures S labor, agriculture labor, agriculture f organizations l organizations 5 12% Rs 35% voluntary 6 r 68 % employee's I / beneficiary mutual companies, business lea ues, societies business leagues, leagues, mutual companies, chambers of commerce co -ups chambers,of commerce co -ops ® 12 Title- holding companies, 5 staff, $3•1m in expenditures I I 7o6 Labor, agriculture organizations, 653 staff, syo.nm in expenditures 184 Business leagues, chambers of commerce, 559 staff $88.8m in expenditures 33 Social and recreational clubs, 32 staff, ssm in expenditures 36 Fraternal beneficiary societies, 42 staff, $8.5m in expenditures NE 78 Voluntary employee's beneficiary societies. 27 staff, St93.4m in expenditures ® 26 Domestic fraternal beneficiary societies, no staff. $2.5m in expenditures - 32 Mutual companies, co -ops. goo staff, $86o.7m in expenditures ni t i i Cemetery company, 8 staff, s.5m in expenditures - r State - chartered credit union, 309 staff. $36.7m in expenditures - n Supplemental unemployment benefit trusts, o staff, s.nm in expenditures I 140 Post or organizations of War veterans. 45 staff $7.im in expenditures Member - serving nonprofits generated expenditures of $1.3 billion in 2007 in the sector- representing the second largest category of expenditures. These organizations fall into a number of different categories. The largest - utility cooperatives (electric and telephone) - account for more than $850 million of the total. This is a significant increase (nearly 40 %) over 2004 expenditures of $516 million. Assembly Joint Work Session Packet April 9, 2013 Page 14 of 31 F n Nonprofit Finances and Economic Impact 17 Nonprofit revenue The nonprofit sector has a notable impact on Alaska's economy as demonstrated by overall nonprofit expenditures including payroll and assets. Public charity revenues index of growth 1991 =1 — Alaska U.S. 9 93 95 97 99 07 03 05 07 sower: Na GOmJ Len: e, IC; char acbL• Sr rcis:is wel•Oe Jo/20 The trend toward the growth of nonprofit revenue Of that number, public charities accounted for most of it, continued in Alaska between the 2007 and 2010 studies. at just more than $3.1 billion. That compares to $2.5 billion Revenues for Alaska's service - providing nonprofits in 2004 - a 20% increase. (excluding revenues of foundations and ether funding intermediaries which flow through to service providers) Of the $3.1 billion in revenue for public charities in 2007, were slightly over $4.6 billion in 2007, an increase of the vast majority comes from three sources, listed by their close to 25% over the $3.5 billion in revenue reported in proportion of the total: the 2007 study. 1. Earned income, including fees, contracts and charges for services 2. Government grants 3. Individual, corporate and foundation contributions • Assembly Joint Work Session Packet April 9, 2013 Page 15 of 31 ,_ lOm,t., All', • .Ili I . 13 Public charity composition of revenues The breakdown for all sources of revenue is shown in these graphs - with a comparison between Alaska and the U.S. Alaska U.S. government contributions r3% �� governm x t grants 4 > >3 grants 9 ` other10.% government contributions 12 fees 20% other pro " e V 6 g fees ly% private fees 22;6 private fees 48%4 Suw:r. National runts for r :orimb:e S:atisz rs c u:. fa- 5. Gllti= lice 20?. m4 na;n:9toe. 2! qil e.: ofJ lizr. lial. C .U:itGIYL::Ln[:itiam1i4i:11L� ➢e Nil No.^,n [9:.urJll. Ent;,: I SEa rstIritr Alaska public charities depend much more heavily on Alaska is on par with the U.S. in generating contributed federal government funding than charities in the rest revenue for nonprofits. However, this is only because of the nation. Of the total federal support for Alaska Alaska nonprofits receive an overly large proportion nonprofits, the 43% that comes from grants will prove from corporate gifts, masking our deficiency in raising most challenging. Grant funding is not reliable, which is individual charitable income. especially troubling for the sector when one considers the lower level of revenue Alaska nonprofits generate from earned sources compared to the rest of the country. Revenues of Alaska's public charities were just over $3.7 billion in 2007 - a 20% increase from 2004. Assembly Joint Work Session Packet April 9, 2013 Page 16 of 31 14 Alaska public charities composition of revenues 2003 2007 government grants 33°e government grants 43% ' t -t y ° spa t . government government : - iees,a ^e contributions ,2 / other fees 77% contributions 70% f other 2% / private fees iprio special even private fees 22nb special events -..% . investment income 2% Investment income i% ;cur: t4n1i5nct C.nte•p∎r chn,irtdle 3mti,tc ; :cm files, u,ba^ msun,ta. Entass.,, CCmu:b_loacb,lsua_raa—qcLOrv. ad Nciy°:nit • egL +_f llne ISFA a•thnute Comparing the Alaska findings from 2007 to 2010, public charities have improved the percentage of revenue they derive from sustainable sources: • Contributed income went from 10% to 12%. • Government fees, such as Medicaid, grew from 14% Philanthropic giving grew - but to 17 %. if adjusted for one -time capital • Private fees (non-government fee-for-service) grew campaigns, it grew less than from 19% to 22%. 20% over three years. Corporate and foundation giving continue to be disproportionately high compared to the national average. Assembly Joint Work Session Packet April 9, 2013 Page 17 of 31 15 Federal grants Direct federal grants to the sector are large and significant. However, the trend is down in recent years - broken only by an increase attributable to federal stimulus funds in 2009. Federal involvement excludes payments for services such as Medicaid, The graph below describes the relationship between federal dollars going to both the nonprofit sector and Alaska tribal organizations. Federal grants to nonprofits in Alaska $800 shoo tribe /\----"M\N" NOnpront Lr 00 5300 • 96 98 00 02 04 06 08 The spfkei 20o be attributed • _ n....: :'s ,)[v olfm..;. I • 0tors „sie::.e. Pede:.:l.,s,i.ze,:ry Dot]5;';ron. ; t o o o -time infusion of stimulus i j(unds and should not be considered I on upward trend. The number of federal dollars coming to Alaska nonprofits is significant, exceeding the amount per capita to other states. However, this trend has created a sector that lacks sufficient diversity in its streams of income. Emerging trends in the country's political make -up, with an emphasis on budget cutting, likely foretell reduced federal support in the future. As a result, nonprofits must broaden their base of support - cultivating more diverse and sustainable sources of revenue. While Alaska nonprofits rely less on government grants - shifting from 53% of total revenue in 2003 to 43% in 2007 - this is still disproportionately out of line compared to the rest of the country. • Assembly Joint Work Session Packet April 9, 2013 Page 18 of 31 )6 Nonprofit expenditures Overall, nonprofit expenditures were $4.5 billion in 2007, compared to $3.4 billion in 2004 - an increase of almost 25 %. The $4.5 billion figure is roughly in line with total revenues of $4.8 billion. Expenditures of nonprofits operating in Alaska in 2007 (in millions) member - serving nonprofits $1.277 m=,w + (co -ops representing 67 °,o of member � t∎ a , ; ^� serving nonprofits) civic leagues $129 public charities $2.970 �7 (health and human services foundation &funding representing 86% of public charities) intermediaries $144 So: t e: [::'r,' :u, cenr.r f„ ci:n,z ! 3:CUS46 core 5ier.. The close to $3 billion spent by public charities in 2007 compares to $2.4 billion in 2004 - almost a 20% increase in three years. Below is a breakdown of the increases by sub - sector: • Health - 24% • Social services - 20% • Civic organizations - 25% Education -30% Total expenditures for all the • • Arts /culture -87% state's Sow organizations grew to $4.5 billion - a 25% increase - making the sector a significant contributor to the state's economy. Assembly Joint Work Session Packet April 9, 2013 Page 19 of 31 :`: JP, J't i,t i:l ti .'l . - • , .. Foundation and funding intermediaries - 501c3 funding In 2004, total expenditures by foundations and other intermediary foundations total _ funding intermediaries were nearly $60 million. In 2007, number of that figure was $144 million. As in 2004, Rasmuson organizations 142 102 244 assets $766 $800 $1,566 Foundation is the largest in contributions at $22 million, contributions $82 $37 $119 given primarily to Alaska nonprofits. total revenues $133 $122 $255 expenditures $102 g42 $144 While this study did not determine whether all foundation staff 280 256 536 and funding intermediary expenditures remained in :il'I.C_: 6:vlo.rot cortex t:r cnoraa!�!: svom:o-: are tlrn= Alaska, the mission for each of these organizations is to support Alaska organizations. Nonprofit assets Number of organizations 4.r . Nonprofit assets increased from $6.1 billion in 2004 member serving 490 :r._ ` to $8.6 billion in 2007 - most held by 501c3 charitable nonprofits. With almost SO more funding intermediaries reporting in 2007 compared to 2004, the assets represented civic leagues and I by these organizations grew substantially. Reporting social welfare 207 ' funders include family foundations such as the Rasmuson Foundation, corporate foundations such as the CIRI funding intermediaries 244 , Foundation and federated funders such as United Way. public serving i,iso Total assets for funding intermediaries grew from $535 million in 2004 to $1,566 million in 2007. The largest - Rasmuson Foundation - reported assets in 2007 of more Assets at the end of year (in millions) than $600 million. member serving $3.048.2 i civic leagues and/ social welfare 5444 -2 funding intermediaries $1,566.2 public serving $3.580.6 Assembly Joint Work Session Packet April 9, 2013 Page 20 of 31 • • a Directions for the Future IIII rA The data that-emerges from this report, coupled with Thothird trend is a need to "restructure" howweldo Foraker'siwork imthe sector, help torsurface three business. Because of the firsttwo trends, as weil.as inter-related trends•for Alaska's nonprofits - each of other societal and technological changes, nonprofit these present serious the sector. organizations will need to•find.more adaptable business models. Merger, consolidation, integration and The first trendiis the "funding - crisis:" The current cooperation are no longer nice thoughts. Enlightened funding mix for Alaska nonprofits :is-not sustainable. leaders will seize-this opportunity and begin discussions We must transform revenue streams - and fast! Alaska on what structure could workifor them in the 21st nonprofits must grow individual philanthropy and learn Century. Others with a wait - and -see attitude will how to income. We have too little time to do each find they have few choices. Most will eithergo out well, but we must try. of business or find themselves merged into another nonprofit, not of theirchoosing. The second trend'is,the "crash of the herd." We have too many-nonprofits for our "eco- system" orpopulation. These trends comprise our best guess at the future. For While the funding crisisicould exacerbate this trend, the organizations to survive them, they must start planning real culprit is a scarcity of the right people to serve on now - for their long -term sustainability. -We function in a the boards and staffsof all 7,000 organizations. Even if, new reality. No one knows what the future will hold, but we can adjust to the funding crisis, we can little to those who are willing to take risks -and prepare for the avert the scarcity of people. inevitable changes will find comfort in knowing thattthey did all they could to thrive. • • • At Foraker, we see three major trends facing the sector. If these trends aren't recognized, they will devastate some nonprofits and will most certainly touch all organizations. - DENNIS G. MCMILLIAN President and CEO TheiForaker Group Assembly Joint Work Session Packet April 9, 2013 Page 21 of 31 I I r I 2 , theforakergrou.p 1 �My f [ fi 1 ctiz w t y�n� .' f �y���, kW teem Nonpro • Anchorage, 4Nj 99508 (01907-743-1200 C01-877-834-5003 www.torakergroup.org 1 e ^o fmtWee o rces : mac..._. " 1 Bud Cassidy From: Pierre, McHugh (MVA) <mchugh.pierre ©alaska.gov> Sent: Monday, March 25, 2013 10:03 AM To: Bud Cassidy Subject: RE: Military Facility Zones HB 316am S Bud, I apologize for the delay in my email. We are currently working with the Department of Law to finalize regulations so we can issue MFZs. As a jump -start to the process, you can state working with your Mayor and borough assembly to craft a resolution that answers all of the questions in the law. Our intent is to approve any reasonable request, and this law was drafted with Kodiak in mind. As soon as the regs are final, I will send you a copy. Thank you for your interest. McHugh Pierre Deputy Commissioner Department of Military and Veterans Affairs 907 - 465 -5645 — Juneau office From: Bud Cassidy [mailto:bcassidy@kodiakak.us] Sent: Wednesday, March 20, 2013 4:37 PM To: Pierre, McHugh (MVA) Subject: Military Facility Zones HB 316am S Deputy Commission McHugh Good Afternoon. The Kodiak Island Borough Mayor and Members of the Borough Assembly met with Admiral Ostebo of the U.S. Coast Guard while in Juneau. We had a great discussion about the future of the Coast Guard in Kodiak and about its growth in the state and specifically the Arctic. Though the recent focus is the Arctic, Kodiak with its existing USGC infrastructure has strong growth potential. In discussing this growth, we were made aware of some the short comings of the community. One of those items is affordable housing. The Admiral, the Borough Mayor and Assembly discussed how that could be resolved through the newly enacted legislation that creates the Military Facility Zone Act came up. I am trying to find out more information about this law and its implementation and if it in fact it has any bearing on our desire to keep a strong Coast Guard presence on Kodiak. Any help is appreciated. I can be contacted at 486 -9302. Thanks, Bud Cassidy Borough Manager 1 LAWS OF ALASKA ' 2012 Source Chapter No. H13 316 am S AN ACT Relating to military facility zones in the state; relating to the development of housing in military facility zones; relating to the financing of projects in military facility zones; and providing for an effective date. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: THE ACT FOLLOWS ON PAGE I Enrolled H13 316 AN ACT 1 Relating to military facility zones in the state; relating to the development of housing in 2 military facility zones; relating to the financing of projects in military facility zones; and 3 providing for an effective date. 4 5 * Section 1. AS 26 is amended by adding a new chapter to read: 6 Chapter 30. Military Facility Zones. • 7 Sec. 26.30.005. Military facility zones. The Department of Military and 8 Veterans' Affairs may establish military facility zones in this state in accordance with 9 this chapter. 10 Sec. 26.30.010. Application for a military facility zone. (a) The adjutant II general may accept applications for designation of a military facility zone or 12 expansion of a military facility zone. The adjutant general shall by regulation specify 13 the content of, and submission requirements for, the application. 14 (b) The chief executive officer or governing body ofa municipality may apply Enrolled H13 316 I for an area to be designated as a military facility zone or for expansion of an existing 2 military facility zone as follows: 3 (I) a municipality may apply for an area within its boundaries; 4 (2) a borough may apply on behalf of a city located in the borough, for 5 an area within the boundaries of the city only with the prior consent of the city; 6 (3) two or more municipalities may jointly apply for an area within the 7 common boundaries of the municipalities. 8 (c) The application must contain the information and be submitted in the form 9 and manner required by the adjutant general and must provide 10 (I) a statement that the applicant has examined the feasibility of II creating industry, development, and educational or training opportunities for 12 employers and employees of business entities located or to be located in the proposed 13 military facility zone; and 14 (2) approval of the application by ordinance of the governing body of 15 the applicant, except that, for an area in the unorganized borough that is not in a 16 municipality, the approval must be by law. 17 (d) On receiving an application under this section or an application for 18 expansion under AS 26.30.040, the adjutant general shall give notice of the application 19 to the following: 20 (1) the legislature; 21 (2) the commissioner of commerce, community, and economic 22 development; 23 (3) the executive director of the Alaska Industrial Development and 24 Export Authority; 25 (4) the executive director of the Alaska Housing Finance Corporation; 26 (5) the public; the notice under this paragraph shall be made by posting 27 on the Alaska Online Public Notice System (AS 44.62.175). 28 (e) The adjutant general shall solicit comments on the application. Notice of 29 the solicitation shall be placed on the Alaska Online Public Notice System 30 (AS 44.62.175). 31 Sec. 26.30.020. Criteria for designation as a military facility zone; priority Enrolled HB 316 - considerations. (a) The adjutant general may designate an area as a military facility 2 zone only if the area in the state 3 (1) is in close proximity to a facility; 4 (2) directly supports the military application ofa facility; 5 (3) is zoned for industrial or economic development, residential use, 6 and workforce training or education beneficial to the facility; and 7 (4) is in an area with inadequate infrastructure to support the continued 8 or expanded operations of the facility. 9 (b) The adjutant general may give priority consideration to an area for 10 designation as a military facility zone if the area is of strategic importance to the 11 economic development interests of the municipality. 12 (c) The adjutant general shall consider the following factors before 13 designating an area as a military facility zone: 14 (1) whether the proposed military facility zone designation is 15 consistent with the comprehensive plan of the municipality; 16 (2) whether it is feasible to develop sites within the proposed zone for 17 purposes of industrial or economic development, residential use, and workforce 18 training or education beneficial to the facility; 19 (3) whether the municipality has targeted the area for revitalization in a 20 plan or ordinance; 21 (4) the relationship between the area and a military facility subject to 22 realignment or closure under 10 U.S.C. 2687, as amended, or a successor statute or the 23 effect of the realignment or closure on the area; 24 (5) the availability, cost, and condition of existing business and 25 educational facilities to support the military facility or facility ofa civilian agency; 26 (6) the difference between the median annual income of residents of 27 the area and the median annual income of residents of the state and region, and the 28 number of residents who receive public assistance; 29 (7) the number of residents of the area who receive unemployment, 30 and the ability of the municipality to improve social and economic conditions of the 31 area; -3- Enrolled HB 316 1 (8) the need for financing for small businesses that would improve 2 social and economic conditions in the area; 3 (9) any plans or financial commitments of municipalities to improve 4 the area; 5 (10) any plans or financial commitments of private entities to improve 6 the area; 7 (Il) the municipality's participation in economic development 8 activities, including proposals for public or private development; 9 (12) support from community or business organizations in the area; 10 (13) the availability of workforce readiness programs, including l l workforce recruiting and training support or educational research and curriculum 12 support in the area; 13 (14) the availability or plans for the creation of workforce housing 14 options for residents of the area; and I5 (15) the fiscal effect on the state if the area were to be designated a 16 military facility zone. 17 Sec. 26.30.030. Designation of military facility zones. (a) Within 60 days 18 after receiving an application under AS 26.30.010 submitted in compliance with this 19 chapter, after considering comments under AS 26.30.010(e), the adjutant general may 20 designate a military facility zone. The adjutant general shall specify the location and 21 boundaries of the military facility zone. 22 (b) The designation of an area as a military facility zone is effective for 20 23 years, beginning on the date the adjutant general designates the area as a military 24 facility zone. 25 (c) Unless the area of the municipality exceeds 500 square miles, only two 26 military facility zones may be in effect in a municipality at one time. 27 (d) The decision of the adjutant general on an application to designate a 28 military facility zone is a final administrative order subject to appeal to the superior 29 court for review in the manner provided under AS 44.62.560. 30 See. 26.30.040. Expansion of a military facility zone. (a) Within 60 days 31 after receiving an application for expansion of a zone submitted by a municipality in Enrolled HB 316 -4- 1 compliance with AS 26.30.010, the adjutant general may expand the zone, if the 2 applicant demonstrates that the expanded area meets the requirements of 3 AS 26.30.020. 4 (b) The adjutant general may grant up to two applications for expansion of a 5 military facility zone in each calendar year for an area that 6 (I) meets the requirements of AS 26.30.020; and 7 (2) has strategic importance to the economic development of the 8 municipality. 9 (c) The limit in AS 26.30.030(c) does not apply to an expansion of a military 10 facility zone that does not exceed 50 percent of the area of the existing zone or to an I I expansion of a zone under (b) of this section. 12 Sec. 26.30.050. Military facility zone authorities. (a) If a military facility 13 zone is within the boundaries of only one municipality, the municipality may create a 14 military facility zone authority for the zone. 15 (b) If a military facility zone includes areas within the boundaries of more 16 than one municipality, the municipalities may, by agreement, create a military facility 17 zone authority for the zone. 18 Sec. 26.30.060. Benefits in military facility zones. (a) A municipality in 19 which a military facility zone is located or a military facility zone authority for a 20 military facility zone may receive 21 (I) financing for one or more projects in the military facility zone from 22 the Alaska Industrial Development and Export Authority or the Alaska Housing 23 Finance Corporation; 24 (2) funding for one or more projects from any other available source of 25 federal, state, or local public or private funding, credit, or guarantee programs. 26 (b) A municipality in which a military facility zone is located, a military 27 facility zone authority for a military facility zone, or a business entity located in a zone 28 may receive priority consideration for financial assistance for projects or operations in 29 the zone from the Department of Military and Veterans' Affairs and from any other 30 appropriate state program, if available under the law establishing the program. 31 Sec. 26.30.070. Regulations. The adjutant general may adopt regulations -5- Enrolled 1 -lB 316 1 under AS 44.62 to carry out the provisions of this chapter, including specifying criteria 2 and procedures for applications, approvals, and the monitoring of eligibility under this 3 chapter. 4 Sec. 26.30.900. Definitions. In this chapter, unless the context otherwise 5 requires, 6 (I) "adjutant general" means the principal executive officer of the 7 Department of Military and Veterans' Affairs appointed under AS 26.05.160; 8 (2) "area" means a geographic area described by a closed perimeter 9 boundary within one or more municipalities in the state; 10 (3) "facility" means a facility of 11 (A) an Alaska military or civilian agency serving a subdivision 12 of the Alaska National Guard, the United States Army, the United States Navy, 13 the United States Marine Corps, the United States Air Force. or the United 14 States Coast Guard, including reserve units of those entities; 15 (B) the National Aeronautics and Space Administration; or 16 (C) a public corporation within the Department of Military and 17 Veterans' Affairs; 18 (4) "military facility zone" means an area that 19 (A) meets the requirements of AS 26.30.020; and 20 (B) is designated as a military facility zone by the adjutant 21 general under AS 26.30.030; 22 (5) "military facility zone authority" means a public corporation 23 established by one or more municipalities to administer a military facility zone located 24 in the municipalities in the state; 25 (6) "zone" means a military facility zone. 26 * Sec. 2. AS 44.62.175(a) is amended to read: 27 (a) The lieutenant governor shall develop and supervise the Alaska Online 28 Public Notice System, to be maintained on the state's site on the Internet. The 29 lieutenant governor shall prescribe the form of notices posted on the system by state 30 agencies. The Alaska Online Public Notice System must include 31 (1) notices of proposed actions given under AS 44.62.190(a); Enrolled HB 316 -6- 1 (2) notices of state agency meetings required under AS 44.62.310(e), 2 even if the meeting has been held; 3 (3) notices of solicitations to bid issued under AS 36.30.130; 4 (4) notices of state agency requests for proposals issued under 5 AS 18.55.255, 18.55.320; AS 36.30.210; AS 37.05.316; AS 38.05.120; and 6 AS 43.40.010; 7 (5) executive orders and administrative orders issued by the governor; 8 (6) written delegations of authority made by the governor or the head 9 of a principal department under AS 44.17.010; 10 (7) the text or a summary of the text of a regulation or order of repeal 11 of a regulation for which notice is given under AS 44.62.190(a), including an 12 emergency regulation or repeal regardless of whether it has taken effect; 13 (8) notices required by AS 44.62.245(b) regarding an amended version 14 of a document or other material incorporated by reference in a regulation; 15 (9) a summary of the text of recently issued formal opinions and 16 memoranda of advice of the attorney general; 17 (10) a list of vacancies on boards, commissions, and other bodies 18 whose members are appointed by the governor; [AND] 19 (11) in accordance with AS 39.52.240(h), advisory opinions of the 20 attorney general; and 21 (12) notices required by AS 26.30.010(d) and (c) regarding 22 applications for military facility zones. 23 * Sec. 3. AS 44.88.900(9) is amended to read: 24 (9) "project" means 25 (A) a plant or facility used or intended for use in connection 26 with making, processing, preparing, transporting, or producing in any manner, 27 goods, products, or substances of any kind or nature or in connection with 28 developing or utilizing a natural resource, or extracting, smelting, transporting, 29 converting, assembling, or producing in any manner, minerals, raw materials, 30 chemicals, compounds, alloys, fibers commodities and materials, products, or 31 substances of any kind or nature; -7- Enrolled HB 316 1 (B) a plant or facility used or intended for use in connection 2 with a business enterprise; 3 (C) commercial activity by a business enterprise; 4 (D) a plant or facility demonstrating technological advances of 5 new methods and procedures and prototype commercial applications for the 6 exploration, development, production, transportation, conversion, and use of 7 energy resources; 8 (E) infrastructure for a new tourism destination facility or for 9 the expansion of a tourism destination facility; in this subparagraph, "tourism 10 destination facility" does not include a hotel or other overnight lodging facility; 11 (F) a plant or facility, other than a plant or facility described in 12 (D) of this paragraph, for the generation, transmission, development, 13 transportation, conversion, or use of energy resources; 14 (G) a plant or facility that enhances, provides for, or promotes 15 economic development with respect to transportation, communications, 16 community public purposes, technical innovations, prototype commercial 17 applications of intellectual property, or research; 18 (H) a plant or facility used or intended for use as a federal 19 facility, including a United States military, national guard, or coast guard 20 facility; 21 (1) infrastructure for an area that is designated as a 22 military facility zone under AS 26.30; 23 * Sec. 4. The uncodified law of the State of Alaska is amended by adding a new section to 24 read: 25 TRANSITION: REGULATIONS. The Department of Military and Veterans' Affairs 26 may immediately adopt regulations necessary to implement the changes made by this Act. 27 The regulations take effect under AS 44.62 (Administrative Procedure Act), but not before 28 July 1, 2012. 29 * Sec. 5. Section 4 of this Act takes effect immediately under AS 01.10.070(c). 30 * Sec. 6. Except as provided in sec. 5 of this Act, this Act takes effect July 1. 2012. Enrolled HB 316 -8- KODIAK ISLAND BOROUGH REGI EETINf J JC NT U3 i2K 5i0 NI Regular- Meeting of: Air: I 9,‘,01S sec Please PRINT your name Please PRINT your name n UU ri � \\\/ Sl Phvl Uv c\N\ �(N i l \U U �� /,