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The Alaska Permanent Fund is no longer worth over $40 billion after a suffering a $3.1 billion decline in value for the first three months of the fiscal year.

Fund managers say investments returned a negative 8.3 percent for the first quarter of the fiscal year. That was largely attributed to slow growth, and political and economic difficulties around the world.

Most of the decline in the fund’s value because of the recent drop in stocks. August was a particularly rough month with equity markets plunging as much as 19 percent in just days.

Chief Executive Officer Michael Burns said when they reported more than a 20 percent return for the last fiscal year, he said his enthusiasm was tempered because bull markets don’t last forever.

Burns said in a written statement issued Wednesday that they don’t chase returns or take a reactive approach to investing. Instead, he said they build an all-weather portfolio that doesn’t change to reflect market conditions.

Stocks may have declined, but Burns said their real estate holdings remained essentially flat and they had modest returns on their bond holdings. Burns said that’s how such a portfolio is supposed to work.

The statutory net income for the quarter, used to calculate dividends, totaled about $468 million.

The Juneau Assembly has set its top ten goals and priorities for the next year.

The list includes gaining support for a new State Library Archives and Museum building in the Capital City. The state recently broke ground on the 124.5-million dollar project in the Willoughby District, though it’s not yet fully funded. Assemblywoman Karen Crane – a former state library director – says it’s important to keep pushing for the so-called SLAM building, which could spark public and private investment in Juneau.

“There now looks like there might be some support for it within the administration,” Crane says. “And if it doesn’t get funded within the next year or two, the project is not going to go forward.”

Deputy Mayor David Stone pushed for a financial transition plan to help the city adjust to an expected decline in state and federal assistance.

“I think we have a responsibility to future assemblies, as well as our citizens to have a good financial plan for how we’re going to weather this storm,” says Stone.

Perhaps the most controversial item on the list is a review of whether or not to promote development of the AJ Mine. Because the mine is so divisive, Crane says it’s important to decide how the matter will be resolved, and when.

“There’s a significant number of people in the community who are very nervous about this, and I think it would be helpful if we could lay out for them in some more detail how the process is going to go,” Crane says. “And for ourselves: What are going to be the issues that make this project either a project that moves forward or that we decide is not moving forward?”

The assembly goals list is finalized annually after the fall municipal election. This year’s version was narrowed down from about 60 goals discussed at an assembly retreat last month.

CBJ Assembly Top 10 Goals for 2011

• Support new state library, archives and museum (SLAM)
• Find ways to reach out not only to our neighboring Southeast communities, but all Alaska communities to enhance Juneau as the Capital City and an important regional economic and transportation hub
• Actively promote Juneau as a World Class Climate Research center
• Develop a CBJ financial transition plan for the potential future decline of state and federal assistance
• Continue to support fisheries development in Juneau through infrastructure development
• Complete review of the potential development of the AJ Mine for initial go/no go decision
• Successfully recruit and hire a new city manager
• Ensure that Juneau has a functioning local solid waste disposal option into the future
• Implement a long term solution for Juneau’s sewage solids
• Identify a route and begin permitting the extension of North Douglas Highway

The City and Borough of Juneau will file an annexation petition with the state’s Local Boundary Commission tomorrow (Wednesday), seeking to incorporate roughly 1,952 square miles of unorganized land south of the current CBJ boundary.

The assembly voted 7 to 1 last night (Monday) in favor of an ordinance authorizing the petition. The dissenting vote was cast by new member Jesse Kiehl, who questioned the timing of the move.

Juneau is filing its annexation petition in response to the City of Petersburg, which wants to form a borough that includes the area in question. CBJ officials say the land most appropriately belongs with Juneau, pointing to model borough boundaries developed by the state more than 20 years ago that identified it for annexation to the Capital City.

During discussion on the matter, Kiehl asked City Attorney John Hartle why the sudden rush to annex it now.

“I suppose it was the manager’s and the mayor’s political judgment that if Juneau didn’t do something, then the Local Boundary Commission would near by default place those lands into the proposed Petersburg borough,” said Hartle.

Kiehl also questioned City Manager Rod Swope about what affect annexing the largely undeveloped and unpopulated area would have on Juneau’s budget. Swope said right now it would be negligible.

“At this point in time costs are minimal to virtually nonexistent,” Swope said. “And until which time there is actually any kind of significant development in that area, there would not be costs to us.”

Kiehl said he voted no on the ordinance because he didn’t think Petersburg’s move to incorporate the land was sufficient reason to trigger annexation by Juneau.

“If we had a very strong interest in these lands, we would have done better to be the first to file for them before the boundary commission, rather than to do so in response to one of our neighbors,” said Kiehl.

Last week Juneau filed a responsive brief to Petersburg’s petition to form a borough with the Local Boundary Commission. The brief doesn’t argue against the proposed borough, but says the disputed area has more administrative ties to Juneau than Petersburg.

Both communities will be able to make more arguments before that matter is settled, both in writing and at hearings before the boundary commission.

Assemblyman Randy Wanamaker was recused from last night’s discussion and vote on the annexation petition due to a conflict of interest.

Wanamaker is on the board of directors for Juneau Native Corporation Goldbelt. The company owns 30-thousand acres at Hobart Bay, in the area being contested by Juneau and Petersburg.

Goldbelt Vice President Derek Duncan reiterated the company’s desire to have the land remain unincorporated for now. But he said it could make its borough preference known soon.

“We will take into consideration how a borough government will affect the development of our economic opportunities at Hobart Bay. We will also continue to weigh what borough option is best politically for Goldbelt in the future,” said Duncan.

Sealaska, the regional Native Corporation for Southeast Alaska, owns about 20-thousand acres of subsurface mining rights in the same area as Goldbelt’s Hobart Bay land. But Sealaska officials say they’ll follow Goldbelt’s lead on expressing a borough preference.

The entire contested area consists of everything from the southern CBJ boundary, as far south as Cape Fanshaw and east to the Canadian border.

The Juneau Assembly will undertake an expedited search for a new city manager to replace the retiring Rod Swope.

At its Committee of the Whole meeting last night (Monday), the assembly decided to only advertise the position in Alaska, and set the deadline for applications for December 1st – one month from today. The assembly will then take two weeks to narrow the list of applicants down to a top five. Interviews will take place in January, with the goal of offering the job to the chosen candidate on January 30th.

Mayor Bruce Botelho said the timeline should be manageable.

“I don’t think we’re going to be overwhelmed if we keep to our decision to recruit only within the state,” Botelho said.

The assembly also decided on a salary range of 135-thousand to 150-thousand dollars. That’s at the low end of what municipal managers typically make in Alaska.

Swope first retired almost three years ago. But when the initial search fizzled, the assembly asked him to come back on a two-year contract, which was due to end yesterday. Last month, Swope agreed to stay on through March 31st, when he says he’ll retire for good.

Deputy Manager Kim Kiefer has expressed interest in the position. She was interim manager during Swope’s sabbatical.

City Manager and City Attorney are the only positions hired by the assembly.

Southeast tribal officials are welcoming a decision by a state judge that’s based on their inherent right of self-governance. The latest opinion specifies that their jurisdiction includes the issuance of child support orders that the State of Alaska has, so far, refused to honor.

“I was just delighted,” said attorney Holly Handler who argued the case for the Central Council of Tlingit and Haida Indian Tribes of Alaska. CCTHITA is the sovereign tribal government for over 27,000 Tlingit and Haida Indians worldwide.

“The Tribe has been waiting for sometime to get a decision in this case,” said Handler.

Tribal court orders specifying the garnishment of income tax refunds, unemployment benefits, and Permanent Fund Dividends were ignored by the State of Alaska. Tribal courts had issued the orders for either child support, or for reimbursement of benefits paid out by the Temporary Assistance to Needy Families program, the tribe’s version of the Alaska Temporary Assistance Program.

CCTHITA filed the suit in January 2010. Oral arguments were held last April. Superior Court Judge Philip Pallenberg of Juneau issued the 16-page opinion on Tuesday, October 25 which referred to the recent State v. Native Village of Tanana opinion and the pivotal John v. Baker opinion issued by the Alaska Supreme Court in 1999. Justices ruled then that tribes had the sovereign authority to adjudicate custody of tribal children in their own courts, but they did not specifically touch on the issue of child support. Judge Pallenberg, however, writes that child custody and support are naturally intertwined. In State courts, for example, both issues are considered at the same time. Pallenberg considers monetary support as an integral part of any custody determination and a paramount duty that any parent has to their children.

“It’s not charting any strange and bizarre territory,” said Handler. “It’s really a direct application of John v. Baker to child support cases.”

David Voluck, chief judge for the Sitka Tribe of Alaska and family law magistrate for the CCTHITA, calls it a strong and solid opinion that’s based on centuries of precedent, principles, and legal reasoning of federal Indian law.

“Every other facet of family law that impacts a child — it is agreed — can fall under the inherent sovereighty of a tribal court,” said Voluck. “So it really makes no sense to argue that the financial support (or) the child support, that’s different.”

Voluck says he hears as many as thirty cases a month. He says he can recall at least ten cases that he’s heard where a poor working relationship between the tribe and the State has affected support for the family.

Attorneys who defended the State did not respond to inquiries seeking comment. But — among their claims outlined in briefing documents — the Central Council has no jurisdiction under Alaska’s version of the Uniform Interstate Family Support Act, the law that allows recognition of support orders from different states.

Judge Pallenberg’s opinion notes an amendment by the Legislature two years ago that stemmed from federal welfare reform legislation; the Uniform Interstate Family Support Act included a ‘tribe’ as part of the definition of a ‘state.’

Jessie Archibald, a staff attorney for the Tribal Child Support Unit, says the tribe’s child support order should be processed just as any state child support case is processed. The Tribal Child Support Unit has handled about 500 cases since its inception four years ago.

“Initially, there was just a small number of cases,” said Archibald. “As we’ve grown, there are more and more cases.”

State of Alaska Child Support Division Director John Mallonee says they are still reviewing the opinion. He declined to immediately comment on it or any potential impacts on his division’s operations. He referred further questions to the State Department of Revenue’s Commissioner’s office.

Additional related claims still must be decided in the case before a final judgment is issued. Since state attorneys did not respond for comment, it’s unknown whether they plan to eventually appeal.

The Juneau School District has racked up more than 2-million dollars in energy savings since implementing a conservation program in 2007.

Energy Education Specialist Adrianne Schwartz tracks energy consumption for the district, and works with staff to reduce costs by following energy efficiency guidelines.

“And how I do that is I send out information letting everybody know what those guidelines are, and then I check buildings on a regular basis to make sure that those guidelines are being followed,” says Schwartz. “And the maintenance department actually plays a huge role in the program, because they’re dealing with all of our ventilation systems and heating equipment and all of those kinds of things behind the scenes.”

The guidelines were written with the help of Energy Education – a company that helps school districts, college campuses, and other institutions implement conservation measures.

In the four years since the district implemented them, Schwartz says Juneau schools have saved more than $2,063,000. That’s great news to school board President Sally Saddler.

“As you know we’ve been cutting our budget. We ended up cutting $4-million from our operating budget last year and we’re mostly likely looking at cuts again this year,” says Saddler. “So, you hear people say so often it’s time to work smarter, and I think this is a great example of the people in the school district who are working smarter.”

Schwartz, who took over the Energy Education Specialist job from Joyce Kitka this summer, says her goal for the future is to do more outreach to students.

“I started sending out a monthly newsletter, and I am including links to energy conservation curriculum. And I’ve had a few teachers ask me for information about that. I also had a high school group ask if I could come meet with them. So, I’m hoping that more and more of it gets into the classroom,” Schwartz says.

Energy Education, the company that helped implement the conservation plan, is no longer on contract. But it continues to offer free support to the district.