OPINION: Prop. 11 would strengthen oversight of Anchorage’s $400 million trust fund

Anchorage voters recently received their municipal voter pamphlet from the League of Women Voters. Among the many propositions voters will decide on April 4, we have joined together to support Proposition 11. Prop. 11 is an important measure that will enhance the governance structure of the Municipality of Anchorage’s Trust Fund — the city’s long-term $400 million investment fund which paid a $17.1 million annual dividend in 2022. Voters can think of the trust as Anchorage’s version of the Permanent Fund.

Never heard of the trust before? It began 24 years ago when the trust received $118.6 million from the sale of the Anchorage Telephone Utility. The trust then grew significantly in 2020, when it received $229.6 million from the sale of Municipal Light & Power in October 2020. Since its inception, the trust has paid $189 million in dividends to the city, helping to offset property taxes dollar-for-dollar.

The trust is an investment gem for Anchorage, and it sets our city apart. What’s particularly notable is that Prop. 11 received unanimous support from the Municipal Assembly, mayor and citizen-based Investment Advisory Commission. The reason for this unanimous support is because we all agreed with the third-party recommendations put forward by the trust’s investment consultant.

The driving force behind Prop. 11 is to continue the trust’s growth and size of its dividends. Additionally, Prop. 11 recognizes the significant size of the trust, reviews how the trust originated and how it’s grown and evolved in complexity and ensures its governance structure is organized correctly to enable it to be successful in perpetuity.

How do we do accomplish these goals? By changing the trust from a sole fiduciary model of governance, where just the municipal treasurer bears all responsibility, to a new Board of Trustees with fiduciary duties. This board of trustees’ model is cited in the Uniform Prudent Investor Act, which governs major investment funds across the country, similar to the Alaska Permanent Fund’s governance structure and fiduciary duties. In a nutshell Prop. 11 amends municipal charter to institute best practices for the long-term viability of the trust.

Let’s all support Proposition 11 as a sound proposal on this year’s ballot. For more information about the trust and Prop. 11, please visit www.muni.org/moatrust.

Dave Bronson, elected in 2021, is the mayor of Anchorage. Julee Farley chairs the municipal Investment Advisory Commission.

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