Alaska Business Monthly December 2016 by Alaska Business

CONSTRUCTION | TROPICAL ALASKANS | OIL & GAS | ENERGY EFFICIENCY

December 2016

Digital Edition

TOWERING TELECOM

Page 64

Top Business Stories of 2016

Compiled by ABM Staff

laska has had a tumultuous year in 2016 and Alaska Business Monthly has shared many of the top stories in its magazine and on its website throughout the year. We’ve compiled a sampling to share with our readers. Many of the stories are from the northernmost reaches of the state and are preludes to big changes coming to the last frontier. As of December 1, America’s northernmost community, previously known as Barrow, has a different name—residents voted 381 to 375 to change the name to Utqiaġvik, the Iñupiaq word meaning “a place for gathering wild roots.” On October 27, Lieutenant Governor Byron Mallot approved the change and made it official. For more than a thousand years, the community is said to have been known as Ukpiaġvik, the Iñupiaq word for “a place for hunting snowy owls.” The name change reflects the community’s desire to recoup and preserve its Alaska Native language, an action that may lead to more changes in 2017. In more news of the community, Arctic Slope Regional Corporation was named the No. 1 Top 49er by Alaska Business Monthly for the twenty-second time, this year on 2015 gross revenues of more than $2.5 billion. The company is headquartered in Utqiaġvik, as is the No. 9 Top 49er, Ukpeaġvik Iñupiat Corporation. See the October issue of Alaska Business Monthly for all of this year’s Top 49ers. Not too far away, more top stories emerged on the North Slope.

Caelus Confirms Large-Scale Discovery Caelus Energy Alaska, LLC announced that its subsidiary, Caelus Energy Alaska Smith Bay LLC, made a significant light oil discovery on its Smith Bay state leases on the North Slope of Alaska. Based on two wells drilled in early 2016 as well as 126 square miles of existing 3D seismic, Caelus estimates the oil in place under the current leasehold to be 6 billion barrels. Furthermore, the Smith Bay fan 6

complex may contain upwards of 10 billion barrels of oil in place when the adjoining acreage is included. The Smith Bay development has the potential to provide 200,000 barrels per day of light, highly mobile oil which would both increase Trans Alaska Pipeline System (TAPS) throughput volumes and reduce the average viscosity of oil in the pipeline, extending its long-term viability. Caelus is currently planning an appraisal program which will enable Caelus to confirm reservoir continuity, optimize future drilling locations, and ultimately increase reserves. caleusenergy.com

ConocoPhillips Sets Alaska Drilling Record ConocoPhillips Alaska Inc. announced September 29 that it achieved a drilling record for Alaska at drill site CD5 in the Colville River Unit (Alpine) on Alaska’s North Slope. CD5 is the first commercial oil development on Alaska Native lands within the boundaries of the National Petroleum Reserve-Alaska (NPR-A). Doyon Rig 19 drilled a horizontal injection well 26,196 feet, a record for overall measured length of a well for the state. The well was drilled to a true vertical depth of approximately 7,400 feet and had a horizontal leg of 17,228 feet. The well took twenty-four days to drill and encountered Alpine “A” sands. ConocoPhillips Alaska announced in April that funding had been approved for additional wells and associated onpad infrastructure at the CD5 drill site. The additional wells and infrastructure will bring CD5 to its full permitted well capacity. CD5 is exceeding its original production target of 16,000 BOPD gross and is currently producing approximately 20,000 BOPD gross average, year to date. alaska.conocophillips.com New Arctic Regs

The Bureau of Ocean Energy Management issued new rules for the Arctic in July. “A Regulatory Shellacking: BOEM finalizes rules for Arctic OCS operators” by R. Isaak

Hurst gives us an intelligent and informed perspective in the October issue of Alaska Business Monthly, page 46; it’s also online at akbizmag.com.

Ahtna’s Tolsona No. 1 Gas Exploration Well Rig Mobilizes to Drill Site Tolsona Oil & Gas Exploration LLC, an Ahtna, Inc. subsidiary, mobilized the Tolsona No.1 gas exploration well rig in mid-September. The 2 million pound drill rig, required materials, and rolling stock equipment was transported from the Kenai in over forty truckloads by Lynden Transport to the Tolsona four-acre drilling pad location north of Milepost 175 of the Glenn Highway and about 11.5 miles west of Glennallen. One exploratory well was to be drilled at depths between four thousand and five thousand feet during a thirty-six-day drilling program searching for natural gas. Drilling was scheduled to wrap up and demobilization of the rig was to take place near the end of October with test well results expected early this winter. ahtna-inc.com (See story in November issue of Alaska Business Monthly, page 104.) Big Three Pass on Alaska LNG Project Exxon Mobil Corporation has decided not to invest in the next stage of a proposed natural gas export terminal in Alaska and said it would work with its partners to sell its interest in the project to the state government. The company’s decision comes amid a global glut of natural gas that has depressed prices and follows the release of a Wood McKenzie report concluding the Alaska project “is one of the least competitive” of proposed LNG (liquefied natural gas) plants worldwide. Bill McMahon, a senior commercial adviser on the project, testified [to the Alaska Legislature’s Joint Resources Committee] that Exxon would no longer participate in the proposed LNG plant but is open to supplying gas from the North Slope if the state proceeds on its own. Those comments were

Alaska Business Monthly | December 2016 www.akbizmag.com

echoed by executives at BP and ConocoPhillipsin their testimony before the committee. (Excerpted from “Exxon Mobil Backs Out of Proposed Alaska LNG Project: Decision comes amid low prices for natural gas and follows Wood McKenzie report” by Chester Dawson, Wall Street Journal, August 26, 2016. wsj.com/articles/exxonmobil-backs-out-of-proposed-alaska-lngproject-1472263173)

AGDC

Governor Walker is pursuing state takeover of the Alaska LNG project through the Alaska Gasline Development Corporation,

a story we’ll be covering in 2017 as more details emerge.

Land into Trust

In August, Alaska Attorney General Jahna Lindemuth announced that the State of Alaska will not pursue further litigation in Akiachak Native Community v. U.S. Secretary of the Interior. That case affirmed the ability of the Secretary of Interior to take land into trust on behalf of Alaska Tribes and also acknowledged the rights of Alaska Tribes to be treated the same as all other federally recognized Tribes. The State’s decision to not seek Supreme Court review

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ends years of protracted litigation and ushers in a new era for Alaska Tribes. narf.org

Crowley

Crowley Maritime Corporation’s LNG services group has been awarded a contract to supply Alaska LNG from the Titan Pt. Mackenzie plant to Alaska Power & Telephone Company’s Tok power plant. The contract, executed through subsidiary Crowley LNG Alaska, includes both the product supply and technical services required to successfully leverage the benefits of LNG at the Tok power plant. Crowley will facilitate the transportation of LNG in a safe and reliable manner from liquefaction facilities in Alaska to the plant in tank trailers authorized by the US Department of Transportation. Once at the plant, the LNG will be re-gasified and piped to a dual fuel kit supplied by ECO/AFS for power consumption. Alaska Power & Telephone is a leading provider of local power, telephone, and communication services in forty rural Alaskan communities. At AP&T’s Tok plant, ECO/AFS will install its bi-fuel technology to support LNG usage in the rural Alaska community. crowley.com

Largest Commercial Fishery in USA Across the nation, US fishermen landed 9.7 billion pounds of fish and shellfish valued at $5.2 billion, a volume and value similar to recent years according to “Fisheries of the US: 2015” issued by NOAA in October. The highest value US commercial species were lobster ($679.2 million), crab ($678.7 million), shrimp ($488.4 million), salmon ($460.2 million), and Alaska (walleye) pollock ($441.7 million). By volume, the nation’s largest commercial fishery remains Alaska (walleye) pollock, which had landings of 3.3 billion pounds (up 4 percent from last year), trailed by Atlantic and Gulf menhaden, which accounted for 1.6 billion pounds (up 29 percent). The report shows that for the 19th consecutive year, the Alaska port of Dutch Harbor led the nation with the highest amount of seafood landed—787 million pounds, valued at $218 million. noaa.gov GCI Builds More Towers

GCI announced that it has completed tower construction in Buckland, Selawik, Noorvik, St. Michael, Golovin, Elim, and Koyuk, and expects to bring high-speed internet service to local clinics and schools in these communities in early 2017. GCI announced that residents in Mountain Village, St. Mary’s, Quinhagak, and Tununak will soon experience a faster and

Alaska Business Monthly | December 2016 www.akbizmag.com

improved mobile internet connection as they are upgraded to GCI’s 3G service. One year after bringing 4G LTE coverage to Ketchikan, GCI is expanding its coverage area by adding three new cell towers to the Ward Cove, Saw Mill, and Cranberry Road areas, which now completes a ten-site cellular coverage area. GCI and Teck Red Dog Operations announced an agreement that will bring high-speed broadband internet service to Red Dog Operations and the community of Noatak. gci.com (See also stories in Alaska Business Monthly: December, page 64; September, page 82; and July, page 30.)

industry is expected to bring even more visitors next year as Alaska continues to increase capacity. cliaalaska.org Overall, total visitors to Alaska via air, land, and sea is expected to exceed 2 million in 2016.

Alaska Airlines

Alaska Airlines made several announcements throughout the year including a merger between Alaska Air Group and Virgin America; launching flights to Havana, Cuba; and making history with the first commercial flight using the world’s first renewable, alternative jet fuel made from

forest residuals. newsroom.alaskaair.com Alaska Airlines is investing heavily in Alaska and broke ground in August with Kiewit and McCool Carlson Green on a new $40 million hangar in Anchorage with additional plans to spend $60 million on terminal upgrades in Alaska. Alaska Air will also convert three 737-700 passenger aircraft to cargo freighters. (Story in September issue, page 94.)

F-35 Fighters

The US Air Force announced that Eielson Air Force Base would serve as home to two F-35 Joint Strike Fighter squadrons, a move

Quintillion Lays Fiber Optic

Quintillion, an Anchorage-based telecommunications company, is building a highspeed terrestrial and subsea fiber-optic network that will connect Alaska’s Arctic communities with networks in the Pacific Northwest. This summer, Quintillion constructed the first phase of the project, which includes a subsea fiber-optic cable from Prudhoe Bay to Nome with spurs to Barrow, Wainwright, Point Hope, and Kotzebue. A new fiber-optic system from Prudhoe Bay south to Fairbanks will join existing networks in Anchorage and the Pacific Northwest. Eventually, Quintillion plans to link with subsea fiber-optic cables to both Europe and Asia. (Excerpted from the September issue, page 82; see also: October, page 20, and July, page 30.)

PenAir Invests in Rural Alaska PenAir invested $27 million in five Saab 2000 aircraft—bigger, faster aircraft— to expedite and increase passenger and freight loads to Unalaska and Dutch Harbor as well as the Pribilof Islands and Bristol Bay. PenAir is now flying more people on fewer flights with the Saab 2000 than on the Saab 340—from 1,600 flights last year to 900 flights in the coming year. Those fifty-five thousand people flying to Dutch Harbor every year will gain time; instead of flying three or four hours it’s a two-hour non-stop flight. (Excerpted from the July issue, page 8.) Alaska Welcomes 1 Millionth Cruise Ship Visitor For the first time in seven years, Alaska welcomed its 1 millionth cruise ship visitor. Wendy Yoisten from St. Albert, Alberta, Canada with her husband John, arrived on the Holland America Line MS Zaandam, which docked in Juneau September 22. Native dancers greeted the couple and Mrs. Yoisten received a medallion, plaque, and basket of gifts from Alaska businesses. The www.akbizmag.com

December 2016 | Alaska Business Monthly

that is expected to bring about half a billion dollars to the Interior over the next four years. alaskaf35s.com

Acquisitions

There were many mergers and acquisitions announced throughout the year and here is a partial list  Arctic Slope Regional Corporation acquired Builders Choice and Restoration Services, Inc.  Stantec acquired MWH Global  Matson Logistics acquired Span Alaska  Bristol Bay Native Corporation purchased Katmailand  Chugach Alaska Corporation acquired Rex Electric and Technologies  Northern Lights Media acquired Fairbanks television stations  Tyonek Services Group Inc. acquired Selex Galileo’s Avionics System Integration facility  Cooke Aquaculture acquired Icicle Seafoods, Inc.  Saltchuk acquired NANA Oilfield Services Inc.  Municipal Light & Power and Chugach Electric Association purchased ConocoPhillips’ one-third working interest in the Beluga River Unit natural gas field

 Avitius Group acquired Swan Employer Services last year and merged operations this year  Viad Corp acquired CIRI Alaska Tourism Corporation  Hub International Limited acquired Gwaltney & Associates  Ahtna, Inc. acquired AAA Valley Gravel  Philippine Red Cross acquired the Susitna Ferry from the Matanuska-Susitna Borough.

Eateries

Worth the wait? Smashburger has been packed since its August opening in south Anchorage and Krispy Kreme Doughnuts has frequent lines into the parking lot after its September opening in east Anchorage. Earlier in the summer, the 49th State Brewing Company opened downtown to a neverending crowd; the company was featured on the August cover of Alaska Business Monthly and won a coveted Best of Alaska Business Award in July in the Best New Alaska Startup category, along with Bambino’s Baby Food and Odd Man Rush Brewing, which also won in the Best Brewery category. See all of the Best of Alaska Business Awards categories and winners in the July issue and look for the 2017 BABA contest announcement in January.

Alaska Economy

Mouhcine Guettabi, an assistant professor of economics at ISER, wrote the first in a series of short papers that will examine economic and fiscal issues important to Alaska. “What’s Happened to the Alaska Economy Since Oil Prices Dropped?” was released in November. A combination of declining oil production and low oil prices has left the state budget billions of dollars in the red. But how has that big drop in oil prices affected the Alaska economy so far? Guettabi examines that question in Alaska Snapshot No. 1. In this paper, the author assesses economic changes by looking at changes in numbers of jobs from March 2014 through March 2016, the most recent time for which reliable employment figures are available. Among other things, he found: Alaska lost close to 1 percent of its wage and salary jobs—nearly 2,300 jobs—from March 2014 to March 2016. Those losses could reach 2 percent by the end of 2016. An estimated one-third of all local government revenues in recent years have been from the state—which raises questions about how vulnerable local governments are, as the state looks for ways to balance its budget. In some areas of the state, as many as half of all jobs are in local government. The full report is available online at iser.uaa.alaska.edu. R

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FINANCIAL SERVICES

Business Banking Options from Alaska Banks and Credit Unions Solutions for businesses of all sizes found in products and services By Tracy Barbour

flexibility. “We’re really excited about how well that’s been received,” Tsukada says. inancial institutions in Alaska offer a First National is also pleased to be able to plethora of commercial banking op- extend valuable educational opportunities tions, ranging from standard check- through its customized, locally-provided ing and savings accounts to online solu- fraud seminars. “We’re very proud of the tions to help businesses maximize their fact that we’re able to have Alaskans work resources. Here is a brief synopsis of the in- with Alaskans,” Tsukada says. novative, educational, and other practical Tuskada says First National is always lissolutions available from some of the banks tening to its customers’ needs. Since more and credit unions operating in Alaska. and more people want the flexibility to bank whenever and however they want, the First National Bank Alaska bank will be focusing on some of the more First National Bank Alaska offers a full mobile-based services in the near future, menu of products and services he says. for businesses of all sizes, from With thirty branches and a small mom-and-pop shops to nearly one hundred-year histolarge corporations. And, unlike ry, First National is fully vested what most other local banks proin Alaska, Tsukada says. “We vide, First National also offers a measure our success based the variety of escrow services. A success of our customers, both popular aspect of its escrow seron a business and consumer vices involves owner-financed level,” he says. “We’re always property, especially real estate, looking for ways to be able to according to Taka Tsukada, Vice Tsukada add value to our customer relaPresident Cash Management tionships.” and Anchorage Branch Administration Manager. KeyBank Whether the transaction entails a house, In addition to providing a comprehensive mobile home, vehicle or other property, the suite of services, such as checking, savings, bank’s escrow department can act as a pay- online banking, and business credit cards, ment-processing intermediary between the KeyBank offers Key Total Treasury. The rotwo parties. The department can also work bust online platform provides clients with closely with landlords and property man- various efficiencies through ACH transfers, agement firms to collect rent payments. wires, comprehensive reporting, and fraud “It’s convenient because it can be complex prevention tools. to track the receipt of funds and be able “We also have a lot to offer to pay those out,” says Tsukada. “It’s an our clients that is specific to the area that First National provides relatively healthcare industry, as we are unique to the market.” educated in the revenue cycle Over the years, First National has con- for faster collection and posting tinued to evolve its business banking op- of payments to patient accounttions to keep pace with new regulations, ing systems, A/P automation customer requirements, and the competi- as it relates to healthcare paytion. ONEPay, the bank’s recently-released, ments,” says Tracey Thomas, next-generation payment tool, is a prime commercial banking relation- Thomas example. It gives customers an intuitive, ship manager for KeyBank in easy-to-use interface for completing wire Alaska. “We are continuing to strive to and automated clearing house (ACH) trans- update and build on our existing services actions at their convenience. In addition, to accommodate the ever-changing healthcustomers can input transactions forty-five care marketplace to stay relevant to their days in advance, allowing for even greater particular needs specific to Alaska. We

can integrate with many accounting and healthcare portals in order to create efficiencies with their work flow and payment collection.” Another powerful product that KeyBank offers is Key2Purchase. A non-revolving, “one-card” commercial card solution, Key2Purchase allows clients to manage their traditional travel and entertainment card program, as well as their sophisticated accounts payables card program. The program is targeted toward clients who are looking to streamline their account payable process and convert vendors to accept card payments, according to Thomas. “Through the Key2Purchase portal, program managers can access and manage their entire commercial card program from anywhere, even their mobile device,” she explains. “Clients’ incentive rebates are based on total program spend while still allowing clients the ability to gain working-capital float on transactions.” Recently, KeyBank rolled out the Key2Business card, which is a non-revolving, commercial card program designed for clients who have both a distributed card and simple accounts payable needs. Key2Business provides customers the ability to have an unlimited amount of physical cards while giving program managers the ability to manage each cardholder’s account. Program managers can set cardholder limits, merchant category code restricts, run both standard and customized reporting, and order new cards, as well as access enhanced fraud reporting and countless other capabilities through the Key2Business online portal. “Key2Business provides clients an easy-to-implement commercial card program and a 1 percent rebate on all net standard spend [$50,000 minimum annual spend] with no annual or cardholder fees,” Thomas says. However, KeyBank offers more than products, Thomas emphasizes. “We spend a lot of time understanding how our clients do business, what is important to them, and what their goals are,” she says. “We

Alaska Business Monthly | December 2016 www.akbizmag.com

are truly partners with our clients and take those relationships very seriously.”

Northrim Bank

pany to ensure their needs are met, says Community and Public Relations Officer Katie Bender. “It’s easier for our customers if they can keep everything in the family,” Bender says.

ferent ways to repay the loan, a SBA product could be a better option.” Currently, the annual interest rate on a FastFlex loan ranges from 13.99 percent to 22.99 percent, based on the customer’s credit worthiness. Businesses can apply for a FastFlex loan online or at an in-branch location. They can use the money for repairs, equipment/ inventory purchases, or to meet other urgent needs. Essentially, FastFlex provides another source for quick funding, besides a credit line or credit card. “We want to make sure our customers have other options,” Foust says. Today, banking customers are showing a desire for more value beyond what products offer, Foust says. Small businesses, particularly, have numerous questions about how banking products work. Consequently, Wells Fargo recently added a Business Credit Center to its Wells Fargo Works website. And as an important development in Alaska, Wells Fargo now has a dedicated business payroll representative based in Anchorage. “Having someone available locally makes it easier for us to have that personal connection,” he says. Wells Fargo can provide a variety of payroll services, including processing traditional paper checks, establishing direct deposit,

Like many of Alaska’s financial institutions, Northrim Bank has a diversity of business solutions, ranging from checkWells Fargo ing/savings accounts to credit cards and At Wells Fargo, one of the latest offerings cash management services. A key service is the FastFlex Small Business Loan. The is Remote Deposit Capture, which lets cus- unique product—available only to current tomers electronically deposit checks on customers—gives borrowers an unsecured, the same day they receive them. small loan (up to $35,000), a “The Remote Deposit Capture short term (up to one year), and service allows customers to expedited approval. FastFlex make deposits at their desk, loans are internally-held and helping save time and money,” -underwritten, which reduces says Vice President, Commerthe loan documentation requirecial Cash Management Paula ments and makes it possible to Sanders-Grau. deliver funding sometimes the A more recent offering for next day. “It’s almost unheard of Northrim’s business customon the business side,” says Wells ers is the SurThrival survey and Sanders-Grau Fargo Alaska Small Business speaker series. With SurThrival, Segment Leader Andrew Foust. small business owners/managers can take FastFlex allows customers to move an online survey and instantly receive rel- quickly on business growth opportunities, evant information to help them. And based and it may be ideal for non-traditional boron their survey responses, an expert from rowers who cannot qualify for a standard Northrim will follow up by phone or in per- business loan. “If they need the money son to offer additional assistance. “We can quickly and time is of the essence, this is match them with a lender and refer them the right product,” Foust says. “If they are to someone in the bank to help them thrive looking for the lowest interest rate and difand grow,” Sanders-Grau says. With the SurThrival speaker series, select customers are invited to attend informative presentations to help their business. So far, SurThrival topics have included cyber security and financial first aid. “We YEARS have had positive feedback from customers,” Sanders-Grau says. “We have a lot of folks registering to come to the speaker series.” ANNIVERSARY Over the years, Northrim has offered 1987-2017 more electronic services to educate and assist customers. In 2017, the bank is planProud organizers of the following major events: ning further enhancements to its electronic banking system. Security, Sanders-Grau • Statewide Economic Forecast Luncheon says, is always a top priority. “We are continuously looking to make sure we stay • Arctic Ambitions Conference and Trade Show ahead to ensure our customers stay on top • Alaska Infrastructure Development Luncheon of security,” she says. Northrim Bank also facilitates access to • Alaska – China Business Conference additional services through its affiliated companies. For example, Northrim Ben• Japan Business Update and Outlook efits Group helps businesses with two to a thousand employees develop competitive employee health benefit programs. It also Connect Globally, Prosper Locally offers ancillary products like vision, dental, and long-term care plans. NBG Employer Services, a division of Northrim Benefits Group, provides customized solutions for businesses requiring additional support for their human resource needs. The bank strives to match customers To join us or to learn more visit www.wtcanc.org or call 907-278-7233 with the most appropriate affiliate com-

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Celebrating 30 years of service to Alaska’s business community

December 2016 | Alaska Business Monthly

and providing pay cards for employers with multiple locations. But the value of its payroll services extends beyond the uniqueness in the delivery vehicle, Foust says. Wells Fargo can remove all the stress and energy involved with calculating withholdings, cutting the pay, and all the other associated elements. “Our plat- Foust form does all that for them and makes it convenient for them to manage their payroll without having to use a lot of resources,” Foust says.

Alaska businesses,” he says. In the near future, Alaska USA will offer ACH debits to create an easy option for business members to deduct a payment directly from their customer’s account. This will give members another payment alternative to checks and debit/credit cards. Alaska USA is also developing additional online security features, such as notifications via e-mail. This will enable short message service (text) notifications and mobile approval actions. “These additional features will provide the Options from Credit Unions business owner more immediate transIncreasingly, credit unions are offering parency around high-dollar items to help more services to cater to their business manage their accounts,” Hamilton says. members. Alaska USA Federal Credit Hamilton adds that the ongoing develUnion, for instance, provides deposit ser- opment of new and improved financial vices that enable businesses to manage solutions and online tools remain a top finances with interest-earning checking, priority at Alaska USA. “By listening to and savings, and money market accounts, all addressing the needs of business owners,” of which can be accessed through the Ul- he says, “we strive to continue to provide trabranch® Business Edition online account the resources necessary to help their busimanagement platform. “This ronesses grow and succeed.” bust online system allows busiCredit Union 1 does not offer nesses the ability to manage products designated exclusively their accounts, including estabfor businesses; however, its exlishing levels of security for conisting offerings help fulfill a ducting wire transfers and ACH variety of small business finantransactions,” says Executive cial needs, according to Senior Director, Business and ComVice President of Communicamercial Services David Hamtions and Culture Chrissy Bell. ilton. “Limits for these types of “Credit Union 1 is happy to oftransactions can be assigned Hamilton fer checking, savings, and credit to key employees to allow busicards to small business owners, nesses the ability to conduct transactions in addition to cutting-edge e-Services such the way they choose and at times that are as its mobile app, remote check deposit, convenient for them.” and Bill Pay,” she says. Eligible business members can also To assist business members and its memmake deposits from anywhere at their con- bership as a whole, Credit Union venience with Remote Business Deposit. 1 is continually expanding the eThey can deposit checks using a personal Services that it offers members, computer and scanning device or with Bell says. “By providing services a mobile device and the Alaska USA app. that allow our members to manIn addition, businesses can make deposits age their finances from home using ATMs. “Alaska USA maintains sev- and on-the-go, we help simplify eral secure self-service ATM depositories and streamline a business ownfor convenient deposits any time, day or er’s financial picture,” she says. night,” Hamilton says. “Alaska USA proBell clarifies that, as a memvides businesses with free depository ac- ber-owned financial institution, Bell cess cards, depository bags, and custom- Credit Union 1 steers its prodized deposit tickets to make these deposits ucts and services development toward areas quickly and efficiently.” that are most widely utilized by its memberAlaska USA also provides financing op- ship as a whole. She says, “Although busitions for real estate, equipment, and oper- ness owners currently represent a smaller ating lines of credit. Hamilton says the phi- portion of our overall membership, we’re losophy of Alaska USA is to provide timely happy to assist them with their financial responses for loan requests, so businesses goals via a strong focus on excellent service can make decisions that are critical to their and value.” operation. “Lending decisions are made loDenali Federal Credit Union offers a robust cally with people who understand the Alas- online banking system that allows users to ka economy and are committed to assisting experience the same features, whether they’re 14

on a mobile device, tablet, or PC. Business members of the credit union can use ACH for various tasks like paying bills, withdrawing payments, direct deposit payroll, and Remote Deposit Capture. Denali’s Remote Deposit Capture allows members to deposit up to 150 check items in one scan without leaving their office, paying a courier service, or mailing the items. “Not only do we offer these services, the security features offered with our online banking system are superior,” says Senior Vice President Member Business Lending and Services Tara Tetzlaff. “A business Tetzlaff owner can assign access to employees and limit [or not] their access, transaction ability, monetary amounts, and more.” Denali also offers an assortment of business lending products, including a new business Visa. The product gives companies the ability to establish card holders, limits, and even control what items can be purchased. As a more inventive option, the credit union operates the Denali Business Center to support business owners looking for a place to interact with clients and host meetings. “For a daily or annual fee, business can use the center’s state-of-the-art video conferencing, board room, and copy/fax machine. The facility’s resident concierge is available to support business members who book a meeting room, including offering refreshment to their guests.” Tetzlaff says that businesses in Alaska are unique, and Denali’s business members all establish their accounts differently. Some use sub-accounts to manage cash, payroll, and operations. Others want a unique number or account. “Denali is flexible and can support a variety of needs,” she says. “Our Business Financial Services team will take time to get to know our members and offer the mix of products that best fits their business operations.” Denali maintains an “Everywhere 24/7” commitment to its members’ security and convenience, Tetzlaff says. “We will continue to give our members the business products, service, and convenience they demand for their financial success,” she says. R Freelance writer Tracy Barbour is a former Alaskan.

Alaska Business Monthly | December 2016 www.akbizmag.com

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CONSULTANT’S CORNER

Creating a Transferable Business (Part 4)

By Mel B. Bannon

n our last article (Part 3 of this series, September 2016) we spoke about the less dependent a business was on the owner for smooth and profitable operation, the more valuable (thus transferable) the business becomes. Executive development and delegation of responsibilities is a critical step in reducing dependency. In preparing for the ultimate transition, the process should begin well in advance of any business transfer. We introduced the Owner Dependence Index Survey as a tool to assist you in determining to what extent your business may be (too) dependent upon you, the business owner. The survey helps with identifying what areas of management you can address in order to improve the value, marketability, and transferability of your business. In a recent release of findings from an ongoing research effort being conducted by Pinnacle Equity Solutions, Inc., a national leader in the emerging field of business transition planning, it was revealed that business owners, on average, score 53 percent in terms of the level of dependency that a company has on their individual efforts. Generally speaking, the more dependent a business is on the efforts of the owner, the harder it will be for the company to transition to a new owner. We will discuss these findings here and provides insights for owners of privately-held businesses to learn how to begin planning for your own business transition or exit in the future by knowing more about how dependent your fellow owners’ companies are on their individual efforts.

A National Crisis of Owners Unprepared for Transition of Their Companies It is broadly realized that the United States has millions of baby boomers who own businesses and will be looking to transition their companies in the next number of years. In November 2015, Pinnacle Equity Solutions launched its latest innovative software survey tool called the Owner 16

Dependence Index™ (ODI), found at odireport.com/Survey/Register/D532A288_40. This seminal tool provides a system for owners and their professional advisors to assess how dependent a company is on the individual efforts of the owner(s) of that company. Pinnacle created this tool out of a recognition that the landscape of baby boomer business owners is full of those who would like to exit their businesses in the near future but do not currently have a plan or strategy to do so. Because the failure rate of business transitions is so high, Pinnacle sought to examine a key area, Owner Dependency, to better evaluate how to assist owners with protecting and transitioning their largest asset—their privately-held business.

ODI Assessment

A business owner’s ODI score is an indication of how dependent the company is on their individual efforts. For example, a business owner with a High ODI score, say 80 percent, is someone who is highly involved in their business. By contrast a Low ODI score reflects an owner who has hired and empowered others to oversee and manage significant portions of that owner’s business, amongst other factors. The ODI score is an overall indication of a business’s ability to transition successfully to a new owner. In other words, a low ODI score indicates that an owner has created a transferable business that someone else could own and run with the management team and systems in place today. The ten to fifteen minute ODI assessment includes forty questions that rank a company’s dependence on that owner. The data presented here indicate the initial results of a few months of the ODI tool being in the marketplace, surveying owners of operating companies who have completed this assessment. The results provide a view through which we all can better understand an owner’s attitude and preparedness for their future business exit.

ODI Survey Results As mentioned previously, of the business owners who completed the ODI survey to

date, the average overall score is 53 percent. The lowest ODI score in the sample was 17 percent and the highest ODI recorded was 98 percent.

High Owner Dependency

The following attributes apply to owners who nationally scored above a 50 percent dependency level. As a group, they generally:  Are very involved in the day-to-day running of the business  They do a majority of the hiring, managing, and firing of employees  Plan for the company’s strategic direction by themselves, with little to no input from others  Do not share their company results with anyone except their accountant (and what they choose to tell the IRS)  They are involved in writing checks, running payroll, paying bills, handling accounting  Are personally liable for the debts of the business  Oversee the business performance with little delegation or empowerment to managers  Handle a large portion of the sales and after marketing  Influence the company’s culture in a material way These traits vary in degree amongst different owners who completed the ODI survey but are generally true for owners with a high ODI score.

Low Owner Dependency

Owners who score below the 50 percent ODI level generally are much better at empowering others to handle critical tasks within

Alaska Business Monthly | December 2016 www.akbizmag.com

the business and some of these owners have even assembled a functioning board of advisors who hold these owners accountable for certain activities in the business.

How Can You Apply These Survey Results to Your Transition Plans? As you review the list of traits in the preceding paragraph regarding owners with a high ODI score, you may see many that apply to you. If so, you may begin to consider your own ODI score and whether or not your company is truly transferable to someone else. The important message to all business owners who are desirous of one day successfully exiting their business is to learn about your own companyâ&#x20AC;&#x2122;s dependence on you, not only so that you can one day turn the business over to someone else at a higher value, but also so that you can, today, enjoy certain freedoms that come from empowering others to assist you in the running and managing of your privately-held business. These are important considerations and changes that you can control today so that you can plan for a successful and profitable transition of your company in the future. We hope this helps you understand what your peers are thinking and doing for their exit plans so you can better define your own. R Mel B. Bannon, CLU, ChFC, RFC is a registered representative of Lincoln Financial Advisors, a broker/dealer, member SIPC, and offers investment advisory service through Sagemark Consulting, a division of Lincoln Financial Advisors Corp., a registered investment advisor, 31111 Agoura Rd., Ste. 200, Westlake Village, CA 91361 (818) 540-6967 or 1500 W. 33rd Ave., Ste. 210 Anchorage, AK 99503 (907) 522-1194. Insurance offered through Lincoln affiliates and other fine companies. This information should not be construed as legal or tax advice. You may want to consult a tax advisor regarding this information as it relates to your personal circumstances. Exit Planning offered through unaffiliated third parties. AK Insurance License #19665 www.akbizmag.com

December 2016 | Alaska Business Monthly

SMALL BUSINESS

Photo by Lloyd Seybert/ Courtesy of Bill Satterberg

Danny Seybert, president of PenAir, attorney Bill Satterberg, Bernie Karl of Chena Hot Springs, and Governor Ralph Torres of the Commonwealth of the Northern Mariana Islands were recently in Anchorage exploring options for air transportation in the Pacific Islands.

Tropical Alaskans Going South Business owners find work in Pacific Territories By Sam Friedman

he Alaskans who fly to the tropics in January aren’t all headed to beach vacations. Some are going to work. An unusual number of Alaska businesses operate in both the 49th State and in farflung US territories in the Pacific Ocean. 18

They cite a handful of motivations for investing in these distant operations: an anticipated US military construction boom, difficult island logistics that Alaskans are well-suited for, and political ties that unite non-contiguous parts of the United States.

Mobile Law Firm

Even though he handles some of the most high-profile legal cases in Fairbanks, attorney Bill Satterberg doesn’t stay in Alaska much longer than necessary to qualify for the permanent fund dividend. For about a quarter of the year he’s “virtually” in Fairbanks, calling into court hearings

while he sits on his porch in the middle of the night, some 4,500 miles way at his other home in Saipan. Saipan, population forty-eight-thousand, is an island about an hour north of Guam that Satterberg first visited in 1978 on a scuba diving trip. It’s the largest island in the US Commonwealth of the Northern Mariana Islands. Satterberg got an attorney job with the local government while handing out resumes on that vacation and has practiced law off-and-on there ever since. Satterberg owns land on the island, and in the 1980s he and his wife adopted two daughters from the region.

Alaska Business Monthly | December 2016 www.akbizmag.com

“I don’t think I would ever leave Alaska permanently, although I’m a little frustrated with the direction this place is going,” he says. “That’s why I like Saipan. It’s the way Alaska was a number of years ago, during the pipeline days.” Other Alaskans like it too. Some of Satterberg’s first work in the 1980s was for Alaska construction firms that were moving to the area. He helped a more recent wave of Alaska businesses in the last ten years. A half dozen Alaska attorneys have also worked in Saipan, he says. A University of Alaska Fairbanks graduate owns Godfather’s, a bar on the island. “It’s the same type of mentality that we see in Alaska,” Satterberg says. “Kind of individualist, used to logistical issues, used to remoteness, maybe used to having wilted lettuce as opposed to all the commodities of home. It takes that sort of an adventuresome spirit.” There are practical reasons why Alaska business owners seek out this US Commonwealth as well. The commonwealth uses US currency and has US area telephone code, but the federal tax rate is lower in the commonwealth than in the states. Satterberg can use Skype to communicate with Alaska at two cents a minute. If he has issues with the federal government in Saipan, Satterberg calls the same offices he would in Alaska. Congress oversees US lands that aren’t US States or the District of Columbia through committees that are led by US Senator Lisa Murkowski and US Representative Don Young. Others have been drawn to Saipan’s unusual legal status as well. In the early 2000s the island was a textile factory hub for producers who wanted the “made in USA” label without paying normal US wages. Gambling is legal on the island, which has recently been attracting more gamblers from China.

Weathering Slow Times in Guam

Bill Vivlamore is part of a wave of Alaskans who chased a boom that was supposed to arrive in Guam about six years ago. He’s still waiting, but he’s getting by. Guam is the largest of the islands in Micronesia, the region that includes the Northern Mariana Islands, Wake Island, and several small independent nations. It is home to about 162,000 people. Vivlamore is president of Frontier Supply Company, a family construction equipment wholesaler with warehouses in Fairbanks, Anchorage, and now Guam. In July 2009, Vivlamore flew to Guam to investigate setting up a farthest-south branch of the office. Within a year he leased www.akbizmag.com

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December 2016 | Alaska Business Monthly

The Frontier Supply Company Guam branch is the Alaskaheadquartered company’s farthest south location. Photo by Taco Rowland, Adztech/ Courtesy of Frontier Supply Company

a warehouse the same size as the Anchorage location of Frontier Supply. Frontier wasn’t the only Fairbanks business that got interested in Guam in 2009. The US military had recently announced plans to move eight thousand troops to Guam from Okinawa, Japan, where the presence of the US troops is politically unpopular. Word traveled fast among Fairbanks construction businesses, including several of Vivlamore’s neighbors along Fairbanks’ Van Horn Road industrial road. “There was a group of Alaskan companies, kind of a buzz of what was going and probably that came from our local military,” he says. Alaska construction businesses that were looking at working in Guam included Samson Electric, regional Native corporation Chugach Alaska Corporation, and Lynden subsidiary Knik Construction, he says. The Alaska businesses were poised to expand to Guam in part because they had cash. The US economy had just crashed in 2008, but Alaska weathered the Great Recession better than the Lower 48. The remote logistics also suited Alaska businesses. “There are more similarities than you might expect with the two markets,” Vivlamore says. “Just like how everything [in Alaska] goes to Seattle, gets on a boat, and goes to Anchorage, it’s very similar there, it just has a longer boat ride.” So far the movement of troops from Japan to Guam hasn’t happened, or at least not at the speed or scale previously announced. In the fall of 2015 the Navy completed a final Environmental Impact Statement for a scaled-back version of the move that will bring 5,500 Marines to Guam starting in 2021. Congress has approved $8.725 billion for the move, military newspaper Stars and Stripes has reported. The Guam branch of Frontier Supply Company has gotten by with work in Guam’s tourism business. The island is a resort destination for Japanese and Korean 20

tourists because it’s closer to East Asia and less expensive than Hawaii. Vivlamore estimates the Guam business accounts for about a fourth of his sales volume, but he thinks it will overtake Anchorage and Fairbanks to be the top seller. “If I had to guess I would say it [Guam] could be my biggest branch in two or three years,” he says. It hasn’t turned into—volume-wise—what he expected, “but it’s a nice little branch.”

Remote Operations

In Fairbanks, the office of Samson Electric is eight blocks from Frontier Supply Company. The two businesses were also neighbors in Guam. Like Frontier, Samson had offices in Fairbanks and Anchorage and opened a third location in Guam after the Navy announced plans to move Marines to the island in 2009. The subsequent waiting game was costly and frustrating says business founder and CEO Mike Samson. “We were bidding like crazy, but the government wouldn’t award anything,” he says. “The government was trying to cut all these deals to do this work. But Congress wasn’t funding any of it.” Samson entered a five-year lease for its office on Guam which it eventually bought out of after sub-leasing for a few years. Samson has a standing agreement with Vivlamore to use some of Frontier’s office space to re-establish Samson Electric in Guam if the large military construction contracts ever start coming. Unlike Frontier, Samson Electric wasn’t able to sustain itself in Guam from tourism-related construction projects. Except for one manager, Frontier uses local workers at its Guam wholesale warehouse. Samson’s business uses Alaska electrical workers which are more skilled but also more expensive than local workers, Samson says. “We’ve got to send people over and house them and pay them $40 an hour. [Guamanian

competitors] are paying $12 to $15 an hour,” Samson says. “They can’t really do the same type of work that we do, but it doesn’t mean they won’t try. They just kind of muff it up.” Although Samson no longer has an office in Guam, the business continues to work more remote jobs in the Micronesian area. The remote jobs are better suited for the Alaska business because they require complex logistical work that local contractors can’t do. This fall Samson Electric was working on a military contract on Kwajalein atoll and was bidding on another on Wake Island. Samson says he estimates between 10 and 20 percent of his firm’s revenue comes from its Pacific island work. The business has been doing remote island work since before all the Guam buildup. In about 2003 the business subcontracted with Chugach Alaska to install generators and later runway lights on Midway Islands, a part of the Hawaii archipelago. As someone who has sent electricians into the Pacific for more than a decade, Samson says it’s not difficult to convince workers to do a job in the tropics when it’s forty below outside in Fairbanks. But it’s important to send the right person because working in paradise comes with its own problems including risk of heat exhaustion, monsoon rains, and most of all a remoteness that makes even rural Alaska seem densely populated. On Wake Island, one of the most remote places in the world, the main link to the outside word is a military plane that visits the island once every two weeks. “It’s a tough region to work in. If you’re not used to it, it will bury you,” Samson says. “We’ve heard it all, from ‘Dear John’ letters to just missing home too much. By the time you move and change [an employee on a remote site] you’ve spent $5,000 to $10,000 on just one person. Just to replace them.” R Sam Friedman is a freelance reporter. He lives in Fairbanks.

Alaska Business Monthly | December 2016 www.akbizmag.com

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Legal Speak

By Renea Saade

Don’t Let the Misclassifications of Workers Risk the Health of Your Business

he salary threshold for a worker to qualify as exempt from overtime pay under the federal law known as the Fair Labor Standards Act is currently scheduled to go from $455 per week ($23,660 per year) to $913 per week ($47,476 per year) effective December 1, 2016, unless one of the pending legal challenges to the new rule stops or postpones the increase. Given the significant change in the threshold amount, many employers that fall under the authority of the Fair Labor Standards Act are evaluating whether they should convert currently exempt employees to non-exempt or fill a position that would ordinarily be considered an employee position with an intern or independent contractor. However, reclassification of a worker or position is not always the right solution. Some employers are also under the misconception that as long as this new salary threshold is met, a worker is automatically exempt. This is not the case. To truly be exempt, the worker must also meet certain duties and responsibilities tests. For instance, many employers classify their management staff as exempt under the “Executive” classification. To meet the duties and responsibilities test under this classification, an employee must, among other things: (1) be assigned manage tasks as his/her primary duty; (2) supervise two or more full-time employees (or the equivalent of the same); and (3) have the ability to hire and fire (or at least have significant influence on such decisions).

care industry, which tends to have a higher rate of misclassification cases, should conduct a self-audit or evaluation of the current and, to the extent applicable, proposed classifications for their workforce. While a human resources or legal professional should often be consulted to ensure that a company, particularly a healthcare practice, has properly classified its workers, the following general information on commonly used classifications (in addition to the “Executive” classification referenced above) is provided to help conduct a preliminary evaluation:

Minimizing Risk

 Home Healthcare/Companion: Employee’s primary duty is the care, fellowship, and protection of another person in his/her private home who, because of advanced age or physical or mental infirmity, cannot care for him/ herself. Household work may be included in services performed as long as it does not exceed 20 percent of the total weekly hours worked by the companion.

Misclassification of workers can leave an employer legally vulnerable for agency audits and wage claims. Such vulnerability includes potential financial exposure for unpaid regular and/or overtime wages, interest on such wages, and statutory penalties or punitive damages. An employer may be required to pay attorneys’ fees and costs if required to consult with counsel to address an audit, agency investigation, or wage claim or be ordered to pay for the fees and costs incurred by an employee in pursuit of unpaid wages. To avoid, or at least minimize, this risk, employers, particularly those in the health22

 Administrative: Employee’s primary duty must be office or non-manual work directly related to the management or general business operations of employer or employer’s customers and exercise “discretion and independent judgment” with respect to “matters of significance.”  Professional: Employee’s primary duty must be work that is predominantly intellectual in character and requires advanced knowledge (in the field of science and customarily acquired through a prolonged course of specialized instruction) and consistent exercise of discretion and judgment. Registered nurses often fall under this exemption as long as they also meet the salary and/or fee basis pay requirements. Some certified nurse aides and home healthcare aides also fall under this exemption depending on the nature of their work.

 Live-in Domestic Worker: Employee’s primary duty is that of a companion, caregiver, nurse, or aide and he/she resides at employer’s premises (usually private home) “permanently” or for “extended

periods of time,” which is generally defined as five or more days a week.  Intern: To qualify as an internship, the following must be found: (1) arrangement is similar to training given in educational setting; (2) experience benefits intern; (3) intern does not replace regular employees but works under close supervision; (4) employer provides training and derives no immediate advantage from activities of intern; (5) intern is not necessarily entitled to job at conclusion of internship; and (6) both parties understand intern is not entitled to wages for time spent working.  Independent Contractor: This is the most difficult classification to establish and will depend on: (1) extent to which contractor is an “integral part” of business; (2) permanency of relationship; (3) amount of worker’s investment; (4) nature and degree of control company has over contractor; (5) contractor’s opportunities for profit/loss; and (6) level of skill required from contractor and amount of initiative, judgment, and foresight contractor exercises in open market competition with others. To learn more about these changes to the law or the topics discussed herein, go to US Department of Labor Wage & Hour’s website: https://www.dol.gov/whd/ and Alaska’s Wage & Hour Department’s website: http:// labor.state.ak.us/lss/whhome.htm. R

Renea Saade is a partner with the Anchorage office of Stoel Rives LLP. Saade regularly assists companies with their employment law and commercial business needs. She may be reached at renea.saade@stoel. com or 907.263.8412. This article is provided for educational purposes only. It is not a substitute for legal counsel.

Alaska Business Monthly | December 2016 www.akbizmag.com

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ENVIRONMENTAL SERVICES

Hazardous Materials Cleaning up and keeping clean By Tasha Anderson

Photo by ABM Staff

A helicopter prepares to lift debris from the bottom of the bluff at the Jodhpur Motorcross Park in Anchorage, the culmination of a nine-year cleanup project conducted by the Alaska Department of Fish and Game, Lands & Refuge. 24

n October 19 a nine-year cleanup effort came to conclusion at the Jodhpur Motorcross Park in Anchorage’s Kincaid Park. Joe Meehan, Lands & Refuge program coordinator for the Alaska Department of Fish and Game, says that over the course of the cleanup he estimates they’ve hauled out eighty to one hundred whole or partial cars; two thousand tires; and one hundred tons of other debris. He says, “That’s been everything from old motorcycles and four wheelers to refrigerators, ovens, freezers, and microwave ovens to porta potties and out houses. You name it, it’s been dumped.” Meehan explains that in the 60s the area where the motorcross is now located was a gravel pit; after the 1964 Alaska Earthquake, the pit was a city-sanctioned dumping ground for vehicles and other items damaged during the quake. “They were pushing the waste sand that they didn’t want over [the bluff] with the vehicles, so most of the vehicles are buried in the bluff and out of sight.” Meehan estimates that thousands of cars are still buried at the motorcross, and there they’ll remain. The focus of the cleanup was not to remove these buried vehicles but other dumped debris that was either exposed in the side of the bluff or had made their way into the marsh between the bluff and the Cook Inlet. “Our primary emphasis was first to get rid of everything in the marsh, all of the vehicles, all of the tires, because that’s the most important habitat,” he says. Legal dumping ended in the area in the 70s, but “it used to be the Wild West out here,” Meehan says, and illegal dumping, bonfires, and target practice had taken place in the area for years. He says the last illegal car dump was five or six years ago. He gives much of the credit for the change to the Municipality Parks and Recreation Department and the Anchorage Racing Lions, a local nonprofit that maintains the Jodphur Motorcross Park for off-road use April through September. “They’ve been

Alaska Business Monthly | December 2016 www.akbizmag.com

managing this area much better: they’ve put in gates and have restricted hours and actually manage it, so it stopped the lawlessness and illegal activity,” Meehan says. Meehan clarifies that he is actually responsible for maintaining the Anchorage Coastal Wildlife Refuge and wouldn’t normally perform a project in a municipal park, but the bottom of the bluff is in the refuge and “whatever erodes out of the park ends up in the refuge I manage.” He says the project was funded years ago by the Alaska Legislature, but he hasn’t actually needed to use all of the funds allocated due to the generosity of Anchorage businesses donating equipment and personnel. For instance, Granite Construction brought in a bulldozer, road grader, and excavator which, along with an 18-wheeler side dump truck, were driven out on the frozen marsh in the winter to perform some of the work. Meehan says Beek’s Contracting also donated heavy equipment and staff for the project. Work on the final day of cleanup was completed by a helicopter at the cost of $1,700, which Meehan says is the largest single expense the project has had in terms of actual cleanup. The cargo netting and cinch straps used on the final day were provided at a reduced price by Arctic Wire Rope and Supply. Owner Eric McCallum and his wife Robin were onsite to take pictures and ended up volunteering to unload some of the nets that were too heavily loaded. McCallum says providing support to a cleanup project such as this exemplifies the values of the company. “Instead of just talking about it, you try to do it.” Meehan says the bulk of the money for the project was spent to hire Shannon & Wilson, Inc. to do an engineering assessment of the landfill: “what’s in it and what’s the threat of this whole bluff just slumping down into the marsh” and what could be done to stabilize the landfill and bluff. “They’re pretty confident another big earthquake isn’t going to send the whole thing crashing down,” Meehan says. “But we do want to stabilize the gully and a couple of other points along the toe of the bluff.” He estimates that stabilization process will cost “something shy of $1 million.” Funding is not currently secure for the stabilization, so Meehan could not provide a timeline of when it may take place. “As far as the clean-up, this is it,” he says. He says it’s fortunate that most of the removed material is metal, as all of the metal debris is being recycled.

mental Engineering program manager for NORTECH, Inc. He says, “There’s a lot of different definitions of hazardous materials, and in a way we deal with all of them. Our approach is to say either we can deal with it or we know someone that can.” NORTECH, Inc. provides a range of engineering services from environmental assessments and investigations to energy audits and retro-commissioning buildings. Beardsley is based in the company’s home office in Fairbanks, and the company also has locations in Juneau and Anchorage. Beardsley says that when NORTECH is approached for a project, mostly com-

monly they encounter hazardous building materials, such as lead paint, PCBs and lights, asbestos, etc., which pose a threat to human health. “We’re sort of a specialty demolition design contractor, and a portion of our expertise is hazardous materials assessments.” But Beardsley raises the point that many hazardous materials are really only classified as hazardous the moment they become waste materials. “Even in our building there’s probably half a dozen things that, as they’re installed, aren’t hazardous.” He gives the example of asbestos shingles that can be used for exterior siding, which he

What is a hazardous material?

Rusting metal and automotive chemicals aren’t the only types of hazardous waste. Peter Beardsley, PE, CEA, is the Environwww.akbizmag.com

December 2016 | Alaska Business Monthly

says is probably the longest-lasting, most durable siding there is. “If it’s installed on your building, it’s not a hazard until you want to use different siding.” He says some materials become waste simply through time—for example gasoline. After thirty days of sitting, gasoline can be termed “old gas,” which can foul up an engine’s operation, such as in an outboard motor like those used in many rural communities statewide. If the gas is old and can’t be used, many residents have only two options: store a useless, flammable material or illegally dump it. “That’s an example of something you buy, you use it every day, and when you go to dispose of it in any way other than using it the way it was intended it becomes a problem,” Beardsley says. Refrigerants are another good example, though he says in the case of Freon the danger isn’t as much a human health risk as it’s hazardous to the ozone. “It’s more of an environmental hazard than a direct human health hazard,” he says. Another aspect of what is hazardous is the question, hazardous to whom? “DEC and their clean-up levels are such that one person in hundred thousand is going to have a negative impact,” Beardsley says, He gives an example of a client who had “multiple chemical sensitivity disorder,”

meaning she would have negative reactions to chemicals or smells that fall well within EPA or DEC standards of safety. Unfortunately, the DEC was unable to address her issue, essentially responding that although she was getting sick, the regulations had been met. The state of the hazardous material is also a factor. Beardsley says that wet paint is a hazardous waste material but dry paint, unless it has lead in it, can be disposed like any other benign material. “[Wet paint] is pretty expensive to get rid of—in the range of $800 to $1000 a drum. Or you can just take the paint and paint the same piece of plastic or wood of whatever you want until you’re out of paint and throw that away,” Beardsley says. “It’s not hazardous anymore.”

Hazardous Surprises

It can be difficult to accurately estimate the scope of a hazardous materials project. From January to July NORTECH worked in Wrangell on a state remediation project with NRC Alaska. “An automotive junkyard there back in the 60s, 70s, 80s, and into the 90s would recycle car batteries and boat batteries by smashing them, draining the acid out onto the ground, and then smelting the lead down in pits to make fish-

ing weights. You can imagine this was kind of an environmental disaster.” By 2000 the city had foreclosed on the property and most of the cars had been hauled out. While it was known that the land was contaminated with lead, “nobody knew the extent until we started digging,” Beardsley says. The project had anticipated removing four thousand cubic yards of contaminated material; the actual contaminated material was approximately eighteen thousand cubic yards. Beardsley says that original estimates for shipping the contaminated soil out of state for remediation was $3.5 million; the additional material would have raised the cost to $16 million, entirely outside of the project’s budget. The eventual solution? The contaminated soil was dug up, treated with a product that prevents lead from dispersing into water tables, and placed in a two-year stockpile. With the soil treated, it’s technically nonhazardous, and the state could apply to store it in a one-time use monofill, “which is like a landfill for just one thing,” Beardsley says. He says that Ahtna is currently designing the monofill. R Tasha Anderson is an Associate Editor for Alaska Business Monthly.

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With connections to every major hospital in Seattle, GCI’s ConnectMD Network is designed to take care of patients from Barrow to Washington state. We’ve seen firsthand what an impact access to specialty services can make for our customers in rural Alaska. Elders can receive care and recover in their own community surrounded by family and friends. Youth can receive counselling services that they might not otherwise have access to in their local communities. And veterans can receive the care they need without the extra stress of travelling to veterans hospitals in Anchorage or Nome.

—Pam Lloyd Vice President of Healthcare and Education, GCI MAP: GCI

GCI’s ConnectMD service has 85 percent of Alaska’s telemedicine market share. The red dots on the map show the locations of GCI ConnectMD network.

Telehealth Expands in Alaska 28

New law enables cyberhealth practices By Julie Stricker

iving in a community off Alaska’s road system has often meant long waits or expensive flights into a regional hub for medical care. But recent advances in telecom infrastructure have brought cutting-edge medicine to rural Alaska. In June, Governor Bill Walker signed a bill that expands the use of telemedicine in Alaska. Specifically, Senate Bill 74 (SB74) removes a requirement for a provider to

Alaska Business Monthly | December 2016 www.akbizmag.com

Range of Options

In the past decade, GCI has also greatly expanded broadband capacity to dozens of rural villages across the state via its TERRA project. That also provides those communities access to the company’s Connect MD Medical Network Solution, which has operated in Alaska and the Pacific Northwest for more than seventeen years. GCI’s ConnectMD Medical Network encompasses more than 250 clinics, hospitals, and healthcare organizations, which allows any member connected via a Point-of-Presence to communicate with other members. It’s a cost-effective way to exchange medical information, by voice or video, from Barrow to Portland. www.akbizmag.com

HEALTHCARE SPECIAL SECTION

be in-state in order to prescribe treatments. It also allows telemedicine to be used for clinical practices such as speech pathology, counseling, family therapists, social workers, and occupational therapists. Walker also signed House Bill 234, which requires insurance plans in Alaska to cover remote mental health services the same as an in-person visit without requiring an inperson visit first. The new laws are expected to save Alaska $31 million in Medicaid-related travel in fiscal year 2017 and as much as $114 million per year by 2022, according to the Alaska Department of Health and Social Services. But in order for communities to be able to access such services, they need to have high-speed, secure Internet. The state’s major telecommunications companies have been expanding broadband access to communities across the state, and healthrelated nonprofits are reaping the benefits. For instance, Alaska Communications has provided telehealth since 2010. In 2015, the company announced expanded partnerships with nonprofits in rural areas around the state that would give residents access to more high-speed, secure telemedicine options. Working with Chugachmiut in the Prince William Sound, Lower Cook Inlet, and Resurrection Bay region; Akeela, which serves rural villages across the state; and the Juneau Alliance for Mental Health Inc., which provides services for Alaskans with mental health and related problems in Juneau and nearby villages, Alaska Communications provides access to telehealth solutions in real time. “We work with each organization to understand their needs and then design, build, and maintain custom networks that allow them to provide more access to healthcare for more Alaskans,” Alaska Communications senior vice president for business markets Bill Bishop says via email.

For any community, the telecom infrastructure depends on the type of healthcare provided by the facility. For example, many rural healthcare providers use medical carts that allow doctors in villages to videoconference with doctors at the ANTHC (Alaska Native Tribal Health Consortium), Providence Hospital in Anchorage, Fairbanks Memorial Hospital, or Sitka Community Hospital, Bishop says. Healthcare options can range from primary and emergency care to behavioral and specialty care. “These medical carts are also helpful to patients who need access to specialists,” he says. “Carts can be equipped with specialized camera attachments and scopes, which allow dermatologists to look at a skin lesion; ear, nose and throat physicians to identify an ear infection; or for patients to receive therapy or alcohol and drug use counseling—all in real time.” The telehealth carts also allow healthcare providers in rural Alaska to share electronic health records, including X-rays, CAT scans, and MRIs, with doctors or specialists in real time over a secure network. For example, one tribal consortium recently launched a program using iPads to create instant access to emergency room physicians at ANTHC with the touch of a button, Bishop says. Networks can also support electronic ICUs for remote ICU support and eStroke, which allows for an immediate response to a patient suffering from a stroke.

Alaska Communications says its telehealth network is secure. “Our private medical networks never traverse over the public network, ensuring safe and reliable delivery of electronic protected health information,” Bishop says. The network is safe from hackers, viruses, and other intrusions. With the in-state access, wait times are reduced. In Sitka, providers can take Xrays, but they must be sent to Seattle doctors, who look at and interpret the images. That sometimes took hours. With access to a faster network, that wait time has been reduced to minutes, vastly improving patient wait times, he says. One of the biggest benefits to the expansion of telehealth is its cost savings. Flights out of rural communities are expensive and weather can delay travel, sometimes for days. “Improved access to healthcare leads to greater quality of life,” Bishop says. “When telehealth isn’t available, patients can incur steep costs traveling to receive healthcare or their conditions can worsen between doctor visits.” December 2016 | Alaska Business Monthly

HEALTHCARE SPECIAL SECTION

The expansion of telehealth options for Alaskans opens the door for other providers to offer services. All they need is a cell phone.

Doctor On Demand

When SB74 went into effect in late September, it opened the door for Alaskans to use Doctor On Demand, an app that allows patients to connect directly to board-certified physicians, says spokeswoman Christina Hwang Smith. “Even in 2016, many Americans still struggle to get the healthcare they need when they need it. The average wait time to see a physician in the United States is three weeks,” says Hill Ferguson, CEO of Doctor On Demand. “At Doctor On Demand, we believe that telemedicine can be a new front door to healthcare, providing affordable and high quality healthcare to those who need it. It is exciting to see state legislatures share that view and are expanding access to telemedicine to more people.” Doctor On Demand is based in San Francisco and has been in service for three years. It employs a network of board-certified physicians who are also trained to practice medicine via video. The network itself is “probably more secure than a bricks and mortar practice,” Smith says. It’s a video-based platform that allows for

a physical exam to be performed on each patient, Doctor On Demand’s chief medical officer, Dr. Ian Tong, says via email. Using Doctor on Demand is similar to using FaceTime, Smith says. “About 90 percent of our patients use our app on their phone,” she says. The app works on all devices and platforms, as long as they include a camera. It’s ideal for conditions that usually require a trip to a walk-in clinic such as colds and flu, rashes, sinus infections, and bronchitis, but physicians also deal with more serious issues. Wait times are about three minutes. “Our over two hundred telemedicine treatment guidelines and expertise in telemedicine physical examination has allowed us to translate the traditional brick and mortar visit to a focused medical visit,” Tong says. “The most challenging cases are emergencies, but our providers are trained to address and respond to emergencies, including problems as complex as suicidality. “We refer when appropriate and treat to the standard of care. If we cannot achieve that standard, we refer to in-person visits.” As an example, he says, if a patient reports a breast lump, the Doctor On Demand physician will assess it, provide the patient with information about the condi-

tion, and refer them to a brick-and-mortar practice. The most common treatment of a breast lump in a traditional brick and mortar practice is to refer that patient for imaging, Tong says. The expansion of the Medicaid reform bills and access to telehealth offers many benefits for Alaskans, who have some of the highest medical costs in the country. “They can literally calculate their savings based on data they already have about the kinds of things people go to the [emergency room] or urgent care for treatment,” Tong says. “In fact, Doctor on Demand can treat eighteen of the top twenty reasons people go to the ER.” The app is free and is available to all Alaskans for a flat fee of $49 per “visit.” While Doctor on Demand does partner with many insurance companies, none of them currently do business in Alaska. However, the fee structure is completely transparent, Smith says. “At most, it’s $49. No hidden fees. No subscription fees. No monthly fees. You know exactly what you’re going to get.” R

Julie Stricker is a journalist living near Fairbanks.

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Alaska Business Monthly | December 2016 www.akbizmag.com

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SPECIAL SECTION

Healthcare

Health Insurance Options for Small Businesses in Alaska Despite high costs, ‘robust market of insurers’ exists By Joshua Weinstein

laska is different. We know that, and that’s why many of us choose to call this state home. The same goes for healthcare in our big state with a small population. Surprising to many, most Alaskans pay a small fraction of the total healthcare spent statewide out of their own pockets. Financing the bulk of the healthcare expenditure largely falls into the laps of both the public and private sectors. Governmental employers fund it for their active employees and many retirees. The public sector also pays for healthcare through programs such as Medicare, Denali KidCare, Medicaid, Indian Health Service, Veterans Administration, Tricare, and, to some extent, the new Marketplaces created under the Affordable Care Act (ACA) via federal subsidies in the form of tax credits and payments to insurers to reduce out-ofpocket costs for some consumers meeting household income guidelines.

Small Employer State

Most private sector employees, though, get their coverage through their employers, and Alaska is, by large and far, a small employer state. It’s also a very expensive state in which to buy health insurance, which is the predominant mechanism for the financing of our fragmented healthcare system. Alaska employers are struggling to find options that meet the needs of their employees at a palatable price point. Addi32

tionally, for the many Alaskans that can’t access public sector or employer-sponsored options, coverage options are extremely limited, with only one Marketplace carrier in 2017, and the premium chart alone is enough to cause cardiac arrest. These Alaskans are faring the worst following the ACA’s passage in 2010, with some families paying more than $3,000 a month for high deductible plans, others going uninsured, and some finding solace in ministry-based programs that aren’t insurance. Fortunately, the employer-sponsored market is somewhat competitive, with an abundance of options for employers of all sizes.

Fewer than Fifty

Small business health insurance policies are offered to employers that average fewer than fifty employees on their payroll. This segment represents the vast number of Alaska employers. Most of these employers do not have to offer coverage, unlike larger firms that need to offer coverage to full-time employees or pay a penalty to the IRS, but they do so to recruit, retain, and reward the employees that make their organizations successful. Nationally, 53 percent of these businesses offered health benefits to their employees in 2016, which is down from 66 percent prior to the ACA. For firms with more than one hundred workers, 96 percent offer coverage , and this rate has been largely unaffected by the sweeping healthcare reform legislation passed in 2010. Some of these small employers were able to “grandfather” their plans, plans before the highly regulated metallic plans (i.e., platinum, gold, silver, and bronze) were introduced in 2014, and many employers have held onto

them where it made financial sense to do so. Unfortunately for some, these non-metallic plans were not offered by all carriers, had limitations as to what an employer could do to preserve their status, and some will expire at the end of 2017.

Metallic Plans

The ACA metallic plans for small businesses offer comprehensive coverage based on a package of essential benefits. They are tightly regulated, include many consumer protections, and require preventive services to be paid at 100 percent without deductibles or copayments. So, in short, a metallic plan is a great plan unless it comes with high deductibles before most benefits begin. Bronze plans carry the lowest price tag on the menu but can have individual deductibles of up to $7,150 in 2017. In short, ACA plans are better from a coverage perspective than pre-ACA plans, but they generally cost more. Additionally, for employers in the small employer segment, rates for a given metallic plan are based only on the average age of the members on the plan and the location of the employer. Prior to the ACA, the past claims of an employer’s plan, the male/female ratio of members, the industry of the employer, and other “factors” were all heavily influential in the rate setting process for a policy. As a result, some small employers are exploring partially self-funded medical plans to escape some of the limitations of the ACA metallic market.

Complicated Market

Due to the high charges for healthcare in Alaska, which is an article for another day,

Alaska Business Monthly | December 2016 www.akbizmag.com

Joshua Weinstein is the President of Northrim Benefits Group, an affiliate of Northrim Bank. Weinstein works with employer groups to develop innovative, attractive, and affordable packages that help recruit, retain, and reward the employees that make their businesses and organizations successful. Additionally, he advises employers and individuals on how best to manage the implications of the Affordable Care Act and comply with other legal considerations under various state and federal statutes, with the goal of achieving manageable compliance within these complex and dynamic regulatory arenas. Contact him at 907-263-1401 or jweinstein@ northrimbenefits.com.

HEALTHCARE SPECIAL SECTION

employers are still facing increases annually with their policy renewals. Many are responding by moving to higher deductible plans and increasing the portion of the premiums employees pay via payroll deductions. On the West Coast, as a whole, the annual premiums to cover one family for small businesses rose from just under $6,000 in 1999 to nearly $16,000 in 2016. Alaska premiums are 30 percent higher than the West Coast, so employers are constantly contemplating the delicate decision of offering healthcare benefits, which plans to select, and what to charge. This dilemma plagues for-profit and nonprofit employers alike. On average, employers are funding 80 percent of the employee premiums and 57 percent of family premiums, but these employer contributions vary from employer to employer. Buying healthcare for employees can be complicated, and fortunately there is a robust market of insurers in the small employer segment in Alaska, including Premera Blue Cross Blue Shield of Alaska, United HealthCare, Moda Health, Aetna, and other self-funded options with stoploss insurance. Working with a local, experienced employee benefits consultant is a helpful avenue for becoming familiar with the options available to a given business, and fortunately, again, Alaska has many talented employee benefits professionals working to assist employers in creating the best benefits packages. R

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33 10/26/16 1:40 PM

By Pat Sidmore

Percentage of Alaskan Adults’ Adverse Childhood Experiences Compared to a Ten State and D.C. Sample 40%

Sources: 2013-2015 Alaska BRFSS, Section of Chronic Disease and Prevention, Alaska Division of Public Health, Centers for Disease Control and Prevention. Behavioral Risk Factor Surveillance System Survey ACE Module Data, 2010

Childhood Trauma Costs Alaska’s Workforce Millions laskans are having an increasingly expansive discussion about child35% hood trauma and the far-ranging impacts these events have on the economic, 30% health, and social outcomes of individuals ■ 10 State 25% as well as the larger issues facing the state. ■ Alaska Greater understanding of the biology of 20% trauma is helping expand the understand15% ing of the psychological impact of trauma. Dr. Christopher Blodgett, PhD is a na10% tional expert on childhood trauma and a 5% professor at Washington State University. 0% In November, a group of organizations e e e e e ss vorce er partnered to host Blodgett for a series of i Illne Abus Abus Abus olenc Abus emb onal Physical Sexual artner Vi bstance Mental tion or D ehold M i t o d forums in Anchorage, Juneau, and the s u Em ate P old S ousehol al Separa ted Hou H arent Intim Househ ra Mat-Su to highlight the impacts of childe c r a P Inc hood trauma on schools, communities, and health across the state. Four events Adverse Childhood Experience were held and all were to full rooms. The forum at the ZJ and Drug Abuse, it was estimatWhat Can Happen to Us if We Loussac library had 140 people ed that nearly $350 million of Are Traumatized as Children? in attendance, and more than current annual adult Medicaid “There are at least 650 scientific journal ar60 people watched the live weexpenses exist because of child- ticles showing links between ACEs and the binar. Blodgett’s expertise was hood trauma experienced by increase in likelihood of poor outcomes,” made available through the All Alaskan adults. Blodgett told a forum of state leaders, eduAlaska Pediatric Partnership Two out of three adults in cators, and mental health professionals in with support from the Alaska Alaska endured an Adverse Juneau who gathered to discuss the topic Mental Health Board, Advisory Childhood Experience. Some of of trauma-informed schools. He went on Board on Alcoholism and Drug Blodgett those adults lead healthy, pro- to say “This is well established science. Abuse, Alaska Children’s Trust, ductive lives; however, for some Toxic” levels of stress hormones released and thread, Inc. Alaskans, those experiences have led to by prolonged exposure to childhood trauchronic diseases, depression, and addic- mas have been linked to changes in the Child Trauma in Alaska tion. These problems translate directly structure—and therefore function—of the Is Common to challenges to a healthy workforce and developing brains of children and youth. Alaska has high rates of childhood trauma. cost employers and the state significant These changes hamper the ability of a child Using methodologies developed by the amounts of money. to learn and develop normally unless adCenter for Disease Control and Prevention, Several reasons exist for these different dressed effectively in multiple settings. the Alaska Division of Public Health asked outcomes. Approximately two out of three These brain changes can, if not addressed, more than ten thousand adults in 2013- Alaskans surveyed answered yes to at least lead to costly outcomes in later life.” 2015 if any of the following potentially one of the adverse childhood events listed The “costly outcomes” Blodgett named traumatic events happened to them before above. While no national rates of ACEs are include: their 18th birthday: emotional abuse, sex- currently available, the CDC has aggregatual abuse, physical abuse, alcohol or drug ed data from ten states (Hawaii, Maine, Ne- LOWER SOCIO-ECONOMIC STATUS abuse in the home, witnessing domestic vi- braska, Nevada, Ohio, Pennsylvania, Utah,  Lower income olence, mental illness in the home, parents Vermont, Washington, and the District of  Less homeownership separated or divorced, or parent or family Columbia) to create a research sample of  Lower levels of educational achievement member were incarcerated. fifty-three thousand adults. This sample is  Being unable to work In a recent report titled “Economic Costs currently the best estimate of national rates  Work absenteeism of Adverse Childhood Experiences in Alas- of ACEs. Alaska’s rates of childhood trauka,” released by the Alaska Mental Health ma are higher in every category, as seen in ADVERSE HEALTH Board and Advisory Board on Alcoholism Table 1 above.  Heart disease 34

5.7% 11.3%

22.8% 31.6%

16.3% 21.4%

25.1% 29.7%

14.9% 18.6%

10.9% 13.7%

15.9% 18.6%

35% 39.3%

Percentage

SPECIAL SECTION

Healthcare

Alaska Business Monthly | December 2016 www.akbizmag.com

What Can Be Done?

Understanding ACEs and their impacts on brain development is foundational to moving institutions toward more cost effective practices. Recent meetings with Blodgett also included discussion of specific changes to how we deliver education, healthcare, and community services to better support resiliency and recovery from trauma. In Juneau, Blodgett described how the Collaborative Learning for Educational Achievement and Resilience (CLEAR), an evidence-based trauma-informed schools model, has increased reading scores by 12 percent compared to schools not using this relatively low cost intervention. The CLEAR approach provides educators and other school staff training and tools to help children and youth get back on track, without extended periods out of instructional time. Increases in instruction time and improved educational achievement are clear goals central to schools’ missions. Blodgett said, “If we can’t show an improvement to your core mission of educating children, we don’t want to waste your time.” CLEAR is a relatively low-cost intervention, especially considering the millions childhood trauma costs Alaska every year. Communities can partner with CLEAR for three years, at a cost of $40,000 per year, to embed traumainformed practices in a school. Trauma-informed schools are not an entirely new concept in Alaska. Seeing the impact of trauma on students and schools, some school districts and individual principals have begun to address the consequences of ACEs in the classroom. Josh Arvidson, founder and director of the Alaska Child Trauma Center at Anchorage Community Mental Health Services, is a nationally recognized expert in childhood trauma. He echoes Blodgett’s message, describing how chronic stress turns a “learning brain into a surviving brain.” Arvidson explained to educators and counselors gathered in Juneau that children treated at the Alaska Child Trauma Center can and do heal from traumatic events with help from supportive adults. They get out of the state of fight, flight, or freeze (stress reaction) and are able to get back on track. Both Arvidson and Blodgett employ the ARC Framework (attachment, self-regulation, and competency) to help children and youth rebuild attachment to trusted adults,

build skills to stay calm and focused when stressed, and feel a sense of mastery and competency of their lives. This model was developed by Bessel Van der Kolk, arguably the premier trauma expert in the world, to help people (re)build core skills needed to navigate traumatic experiences. The outcomes possible through the use of this framework have a significant relationship to economic success. In Juneau, Kate Burkhart, executive director of the Alaska Mental Health Board and Advisory Board on Alcoholism and Drug Abuse, commented that Alaskan employers “want workers who can get along with coworkers, stay calm and focused when faced with difficult situations, and be effective and competent in their jobs.” She continued, “What Dr. Blodgett and Mr. Arvidson discussed today is how we can very intentionally support development of those skills while kids are still in school.” James Heckman, Ph.D., a Nobel Laureate in Economics from the University of Chicago, often writes about the economic effects of trauma in his blog titled Heckman Equation. He notes that adults who are successful have “soft skills” or “character skills” that allow them to function at high levels. These skills are often as important if not more important than a person’s IQ. Heckman says,

“this sounds very touchy-feely, but it’s not … we have a growing body of evidence that shows that these factors matter.” Heckman promotes early childhood programs for children exposed to hardships to help foster skills needed to succeed at school and later in the workplace. His research demonstrates the clear economic benefits of doing this when people are young. While change can happen at any age—it is more cost effective to instill these skills early. Alaskans experience childhood trauma at very high rates, which means that we see the impacts of that trauma in schools, workplaces, healthcare practices, and communities. Impaired academic success, chronic disease, addiction, and lost productivity at work all have economic consequences. Working together to embed trauma-informed interventions where they can be most effective—the classroom, the pediatrician’s office, the shop floor—can reduce the costs we pay every day. R Pat Sidmore is an H&SS Planner for the Alaska Department of Health and Social Services Alaska Mental Health Board. Contact him at 907465-3072 or patrick.sidmore@ alaska.gov.

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 Cancer  Depression  Diabetes  Smoking  Illegal drug use  Suicide attempts  Alcoholism

SPECIAL SECTION

Healthcare

The Spectrum of Physical Therapy

By Tasha Anderson

hysical therapy is an obvious step when one has suffered a traumatic physical event, especially having undergone any kind of surgery. In such cases, it’s generally known that it will be necessary to follow a treatment plan that ensures that healing tissues are exercised in a safe and appropriate way to promote strength and prevent re-injury.

North Pole Physical Therapy

But physical therapists provide many services. Tim Stevenson, DPT, of North Pole Physical Therapy, says that his clients are split pretty evenly between traumatic injury recovery and consistent pains that may or may not have a clear origin, including pain stemming from a small or forgotten injury or chronic pain related to repetitive movement. Stevenson says many factors contribute to how long a client may need physical therapy—the severity of the injury, age, how long the client has been experiencing pain, or other medical conditions such as cardiovascular disease or high blood pressure can all have an effect. “Something that’s been bothering someone for twenty years is going to take a lot more work than something that’s been going on for two weeks,” Stevenson says. He says a relatively new development in the field of physical therapy is that, “especially with chronic pain, the understanding of what pain is helps people help just as well as anything that we do for someone to heal the tissue.” He says this understanding has been growing for the last five or ten years, and he’s seen evidence of this in his own practice. “Just understanding why they’re 36

having pain and why this pain has lasted. Obviously that tissue does not take twenty years to heal, so why are they limping for twenty years?” He says that’s why a vital part of his treatment is education. Stevenson says that patients at North Pole Physical Therapy have forty-five minute sessions, and he’ll spend fifteen minutes just talking with his patients, “and it helps people understand better why they’re going through what they’re going through and how they can psychologically shut that cycle down a little bit.” Stevenson also uses education to benefit local athletes. He’ll film an athlete performing various athletic motions—jumping, landing, cutting—and then watch the film with the athlete, analyzing the film in slow motion the athlete’s biomechanics. “We are bio-mechanists, in essence, so we know exactly what we’re looking for,” Stevenson says. “Usually with an athlete it’s not so much a strength deficit or a weakness that’s predisposing them to injury, it’s actually their brain and their motor patterns not using the muscles at the correct time or not using them appropriately to move the joints correctly.” Stevenson says that for office workers, one of the best ways to avoid developing chronic pains is to get up and walk around, “especially if you’re a desk worker at a computer. It’s funny how our society has gotten to the point where we allow people to take smoke breaks every hour, but if you say you’re going to get up and walk around for five or ten minutes, people look at you like you’re wasting time—we should be replacing smoke breaks for a little walk break.”

Advanced Physical Therapy

Chad Ross, PT, DPT, COMT, of Advanced Physical Therapy (locations in Anchorage, Fairbanks, Seward, Soldotna, and Wasilla), says Advanced Physical Therapy provides a wide range of physical therapy services, including orthopedics with specialty treatment programs for sports, pelvic health, headaches, and hand therapy. In addition, Advanced Physical Therapy provides treatment for various neurological conditions, neurological conditions with orthopedic issues, edema management including manual lymphatic drainage techniques, and an occupational health program, which includes preemployment and return to work testing plus management of work competition injuries. There are two sides to return to work testing, Ross says. “With all of the industry jobs here in Alaska there’s lot of physically demanding jobs, and there are safety standards and a definite safety culture; it is our job to test employees according to the physical demands that are associated with a job description.” He continues, “There’s also a scenario where we test for individuals that may have had a non-related job injury or illness—and they’ve been off work—to determine if they can safely get back to work.” Ross says that his passion in physical therapy is in problem solving, first coming up with a specific diagnosis of the pain structure(s) and then analyzing movement patterns, whether that problem is helping an athlete improve performance, helping an elderly individual restore functional mobility, or evaluating physical demands of various jobs and how that impacts the human body. For example, if a fire fighter needs to

Alaska Business Monthly | December 2016 www.akbizmag.com

Alaska Is a Direct Access State

Fortunately, Stevenson explains, “Alaska is a direct-access state for physical therapy,” so a referral from another healthcare provider is not required and Alaskans can seek physical therapy services as they feel they’re necessary. “For the most part anyone can just walk in and we can get them started.” He continues that physical therapists are trained at a “doctoral-level education to screen for anything we couldn’t treat, such as a broken bone, cancer, or something that’s obviously not in our realm or scope of practice.” Chad Ross, PT, DPT, COMT, with Advanced Physical Therapy, further clarifies a referral may be required by an insurance provider to receive reimbursement, even if it isn’t a legal requirement through our state license. “Most government insurances and about half of the private industry insurances are going to require a prescription from a doctor,” Ross says. “Medicare, Medicaid, anything in the military, all those have to have a physician’s referral and some even require pre-authorization,” he says. R Tasha Anderson is an Associate Editor for Alaska Business Monthly.

TOGETHER WE CAN ACHIEVE HEALTHIER COMMUNITIES. Life is precious. So too is patient data. That’s why healthcare professionals rely on our network to provide Alaskans from Nome to Nanwalek, from Kenai to Ketchikan, with instant, digital access to medical records, doctors and specialists. All on a network that doesn’t take sick days. LEARN MORE AT ALASKACOMMUNICATIONS.COM

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December 2016 | Alaska Business Monthly

HEALTHCARE SPECIAL SECTION

step up to grab an overhead ladder and lower are tough, we work hard and play hard, it down: “What all does that include? Step- too. There are amazing people there that ping up [uses] lower extremity strength, are doing some amazing things, if it’s snow there’s core strength, strength in their arms machining x number of miles in rugged and flexibility overhead, and flexibility of the terrain, building a cabin by hand, climbing spine and shoulder to reach overhead, and mountains, or hunting and fishing—there’s being able to manage those loads in a con- not many things that slow Alaskans down. trolled manner to reduce injury.” With that comes some bumps and bruises, Ross uses the term “industrial athlete” to and we like to think that we can help.” He describe those in movement-intensive fields. says that for Advanced Physical Therapy, “It is a fascinating category, because they’re “our passion is getting people back to movperforming these athletic motions day in ing and doing what they enjoy doing.” and day out and they want to, and have to, keep their body strong and functioning well Physical Therapy Check-Up from the standpoint of making a living.” Both Stevenson and Ross feel that people Ross is invested in his work and has contin- would benefit from getting physical therapy ued to study human movement and the body’s “check-ups,” much like a regular visit to a ability to compensate, adapt, and perform de- dentist. “I feel like physical therapy should spite minor or even severe injuries. “We may also be a medical profession where you come change our movement patterns, but our bod- for maintenance,” Stevenson says. “You ies are going to adapt and continue moving come in, get a new exercise program or reforward—most of the time they’re going to examined or reevaluated on what new things find a way to perform a task. That’s a healthy you’re doing at work or in sports or in school, thing, but it can become a problem when and there may be different postures or difthose new adaptive patterns prevent us from ferent movements that we can train you on.” actually feeling well or performing at our Ross has a similar view: “I think that’s a highest potential.” And it is then Ross’s job to missing link in the message that physical ther“peel back the layers” of the problem and help apists have in the general public is that we are Date:11-1-2016 10:36 AM| Client:ACS| Studio Artist: Matt Torres / Production| Printed At: None all of his clients to move and feel better. good at giving people ‘tune-ups’ on a regular Job number: | AKCS2186_ABM_Half_Page_Health_Care_v2.indd He says that Alaska is a great place for the so their ‘car’175, is working rather T: 7” x 4.875”, L: None, B:None, Gutter: na, Bind: Perfect basis Bind, Linescreen: MD: 300%,optimally Color: None kind pdfx1a of work he’s bleed interested in. “Alaskans than ‘just when it’s broken, come see us.’” Notes: files\rnon

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Healthcare

Training Healthcare Workers in Alaska UAA works to keep up with demand By Rindi White

Highest Projected Growth Top 25 Occupations, 2014 to 2024 Occupation

Percent Growth

Dental Hygienists

21.6%

Dental Assistants

20.9%

Opticians, Dispensing

20.3%

Dentists, General

20.2%

Farmworkers/Laborers, Crop, Nursery, and Greenhouse

20.2%

Recreational Therapists

19.8%

Medical Assistants

19.4%

Nurse Practitioners

18.9%

Massage Therapists

18.7%

Umpires, Referees, and Other Sports Officials

17.7%

Mental Health and Substance Abuse Social Workers

17.3%

Personal Care Aides

17.0%

Substance Abuse and Behavioral Disorder Counselors

16.2%

Nonfarm Animal Caretakers

16.1%

Physician Assistants

16.1%

Medical and Clinical Laboratory Technicians

15.9%

Family and General Practitioners

15.6%

Physical Therapists

15.4%

Social and Human Service Assistants

15.0%

Inspectors, Testers, Sorters, Samplers, and Weighers

14.9%

Medical Secretaries

14.7%

Labor Relations Specialists

14.4%

Licensed Practical and Licensed Vocational Nurses

14.2%

Aircraft Cargo Handling Supervisors

13.8%

Psychiatric Technicians

13.4%

Note: This list only includes occupations with at least 50 workers; includes only those with growth of at least 20 jobs; and excludes residual occupations ending with “all other” and a small number with incomplete or unreliable data. Source: Alaska Department of Labor and Workforce Development, Research and Analysis Section “Alaska Occupational Forecast 2014 to 2024” by Paul Martz, Alaska Economic Trends, October 2016

obs in the healthcare industry have the highest projected growth. In October the Alaska Department of Labor and Workforce Development Research and Analysis Section in its October Alaska Economic Trends publication released ten-year industry and occupational forecasts by Paul Martz that showed healthcare will dominate both from 2014 through 2024 in terms of job growth. It is estimated that, in 2014, the state had 45,387 healthcare and social assistance jobs, both in the public and private sectors, and that by 2024 the number of jobs would grow to 52,563, a nearly 16 percent rate of growth. In addition to the projected 7,176 new healthcare and social assistance jobs, there will be thousands more openings for replacement workers. Physicians’ offices, outpatient care centers, and home healthcare services—the ambulatory health category—are expected to grow by 22.2 percent, or four thousand jobs, according to Martz. Another big area of growth, Martz states, is likely to be in the social assistance field, as more nursing care facilities and retirement communities pop up to accommodate the projected 68 percent growth in the senior population. Jobs in those fields are expected to grow by 38.3 percent, or a little more than six hundred jobs. In contrast, hospital jobs are only expected to grow by about 8 percent.

Demand for Workers Surpasses Training Slots It’s difficult for the state to produce and recruit enough workers to meet the demand for many of those jobs. The University of Alaska Anchorage (UAA) is the primary place Alaskans go for healthcare training, and its College of Health is working with industry in an attempt to train and provide enough workers. College of Health Dean Bill Hogan says the university’s philosophy is “Grow our own, close to home.” “The intent is to keep students here in Alaska,” he says. More than 4,800 health and behavioral health students are enrolled statewide each fall semester, and about 1,000 graduate from health programs each year, with about 350 more graduating from training programs. UAA offers about seventy programs, ranging from certifications to medical education programs in which the university partners with Outside schools to help students get medical training. “Nursing is our biggest program. We are graduating two hundred students a year, at all levels, from associate to bachelor’s

Alaska Business Monthly | December 2016 www.akbizmag.com

New Programs on the Horizon

Nursing isn’t the only field in demand. Hogan says a recent survey of health workforce employers showed a three-way tie for the most needed professions: psychiatric nurse practitioners, psychiatrists, and rehabilitation counselors. In response, he says, UA has a psychiatric nurse practitioner program in place. “We’ve heard from hospitals that we need well-trained and qualified surgical technicians and technologists,” Hogan says. “Our partners are willing to support and help us financially to help us get this going. That’s a big plus.” Hogan says he expects that twoyear degree program for surgical technicians and technologists to begin admitting students in fall 2017, starting with a class of fifteen.

The nurse manager program is also in development. Hogan says the university is in the final accreditation process for offering a doctorate in nursing practice. The first class—five students—have been admitted to the program, pending accreditation, and those students will be ready to graduate in two years.

Other Healthcare Workers also in Demand The UAA Allied Health program is another growth area for the university with more than 1,000 students enrolled annually and about 250 graduates per year. There, students can learn dental assisting, dental hygiene, phlebotomy, and medical assisting. They’re primarily certificate and associate degree programs, Hogan says. Medical assistants, for example, put patients in rooms, take their vitals, schedule follow-up appointments, and perform other duties. “That’s our fastest growing program,” Hogan says. The number of students has doubled since 2000, from about 140 to about 280, with the number of graduates soaring from 20 to 140 in that timeframe. University of Alaska President Jim Johnsen recently convened a Behavioral Health Summit to hold a conversation about how the university might expand the number of

behavioral health graduates. With alcohol and drugs a significant problem in Alaska, Hogan says, “it’s incumbent on us to try to expand what we have to meet that need.”

Partnering Expands University’s Teaching Options UA recently partnered with Idaho State University to allow students to become pharmacists while attending school and working in Alaska. Seven UA students are currently working through the pharmacy program, taking online classes from Idaho State, Hogan says. The university also partners with the University of Washington to allow Alaskan students to get a degree in medicine or become a physician assistant. Other partnerships include a doctorate of occupational therapy from Nebraska-based Creighton University, a master’s in speech-language pathology from North Carolina-based East Carolina University, and a second pharmacy program in partnership with Creighton. Alaska’s Only Family Medicine Residency Nursing is one of UAA’s most popular programs, but for those who want to become a doctor, attending an out-of-state college is necessary for at least part of the eight-year schooling process.

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December 2016 | Alaska Business Monthly

HEALTHCARE SPECIAL SECTION

and master’s. There is still a need for more [graduates],” Hogan says. UAA has nearly 1,300 pre-nursing majors—students who say they want to go into a healthcare-related profession. “We have this dilemma of having 1,300 people who want to get into the nursing program, but only 200 slots. There’s a real bottleneck,” Hogan says. “We’re guessing that even though we’re producing 200 [nursing graduates] a year, we’re at about 25 percent of market demand,” he adds.

HEALTHCARE SPECIAL SECTION

Enter Providence Alaska Medical Center and its Alaska Family Medicine Residency, the state’s only Alaska-based residency program. Dr. Anne Musser, DO, is the program director. She says the program is aimed at recruiting would-be family medicine physicians to Alaska and then helping them succeed here. “We have a phenomenal percentage of people who stay in Alaska and practice in rural areas. That has been very beneficial to the communities in Alaska. Normally we’d have to recruit physicians to go to those rural communities,” she says. Since it began in 1997, Musser says 173 doctors have gone through the program.

The program greets twelve new residents each year and has thirty-six residents training across the state. Musser says 76 percent of those who graduate from the program stay in the state, and 56 percent continue to practice in rural settings. “One of the things that makes our residency program so successful is we’ve got a wonderfully diverse population of patients,” Musser says. “Our residents see those patients with the supervision of the faculty, and it’s really challenging and rewarding and makes them want to practice in more diverse communities.” Fifty-one languages are spoken at the

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Providence Family Medicine Center, she says, and all those cultures look at healthcare differently. The Providence Family Medicine Center is co-located with the residency program and provides primary care services. Here’s how it works: Each year, hundreds of med students apply to be part of the Alaska Family Medicine Residency program. Musser and her team interview about one hundred of the applicants and rank them. Meanwhile, the students go through the interview process and rank which program they’d most like to join. An algorithm sorts through and determines which students best fit which residency programs. The twelve successful candidates join Alaska Family Medicine Residency and spend their first year almost exclusively at Providence Alaska Medical Center, where Musser says they get an introduction to various practices—pediatrics, emergency care, obstetrics, and more. During the second year, the residents go to Bethel or Dillingham and spend six weeks immersed in the culture and medical practice there, she says. In their third year, the residents have a choice of which rural communities they want to go to. The competition for the slots is huge, and it’s open to Outside residents as well as Alaskans, Musser says. Because graduate-level medical education is paid through Medicare, she says, the number of trainees is limited to what the government will pay for. In the 1990s, a cap of twenty-four residents at one time was placed on Providence. “It’s a dilemma that primary care physicians face across the United States,” Musser says. “The federal government will only pay for twenty-four. Providence pays for the extra twelve; the reason we do that is because of the success we have in keeping residents in Alaska.” Other Alaska hospitals have discussed doing a residency program, but so far no others have emerged. Required rotations in the program include the Providence Family Medicine Center and Providence Alaska Medical Center in Anchorage, the Yukon-Kuskokwim Delta Regional Hospital in Bethel, and Kanakanak Hospital in Dillingham. Elective rotations include Alaska Native Medical Center in Anchorage, Central Peninsula General Hospital in Soldotna, and the MatSu Regional Medical Center in Palmer. Providence also works with UAA to provide clinical training for other healthcare fields, including nursing graduates, behavioral health specialists, pharmacy students, social work students, and others. R Freelance journalist Rindi White lives in Palmer.

Alaska Business Monthly | December 2016 www.akbizmag.com

SPECIAL SECTION

Healthcare

Massage thereapists Tai Trujillo, top left and above left, and Workplace Massage owner Yael Hickok, above right, delivering corporate massage therapy to clients at Pillar Financial in Anchorage. Photos by Elora Libal/Courtesy of Workplace Massage

Corporate Massage Therapy Booming industry boosts morale By Rindi White

t’s Tuesday afternoon and your upper back is already on fire with tense muscles. Scientists mostly agree that sitting at a desk for long periods of time is bad for our bodies, leading to strain on the upper body, shoulders, and arms. But with a mountain of work ahead, what’s a desk jockey to do?

Enter Alaska’s corporate massage therapists. They come periodically to a workplace and, in the course of a few hours, offer therapeutic and restorative massage to a few dozen employees. “Not only does it feel good, but it will relax tensing [muscles] and relieve anxiety and stress. It boosts the immune system so employees will be less likely to get sick. And if they have repetitive motion injuries, or we can prevent repetitive motion injuries, they are less likely to file workman’s compensation claims,” says Rose Brigmon. Brigmon is a licensed massage therapist and employee of Oriental Healing Arts Center. This spring, Brigmon embarked on a new business, Balance and Restore, providing therapeutic massage on location at several businesses. “We go on a regular basis to the Southcentral Foundation, and they have us set up several therapists whenever they do training,” Brigmon says. She says her crew also works with a few other corporations, including the US Department of the Interior,

which rewards its employees with massage for completing their end-of-year goals. “Our office management was looking for a way to reward our hard working team. We came up with the idea of providing massages in the office which led us to Balance and Restore,” writes Stu Hartford, transportation director for the Department of the Interior in a testimonial. “Thanks to Rose, this event brought positive energy into our workplace, improving morale, productivity, and camaraderie.” Yael Hickok, a licensed massage therapist and owner of Workplace Massage, also provides on-location chair massages around Anchorage. “We can do a lot in ten minutes or fifteen minutes, if we’re just focusing on one small area,” Hickok says. “It doesn’t replace the benefits of a full-body massage, but it keeps people at their workplace.” The therapy sessions are fairly quick, so employees can schedule a session without missing a lot of work. And, with a chair massage, there’s no need to change clothes.

Alaska Business Monthly | December 2016 www.akbizmag.com

Family Friendly

Prior to Brigmon’s opening Balance and Restore, Hickok was the primary provider for on-location massage therapy in Anchorage. With eighteen years of experience as a massage therapist, Hickock found that the hours for traditional therapy work— late afternoons and weekends—didn’t jibe with the demands of her young family. “I needed to find something that I could do while the kids were in school, with low overhead,” she says. “Nobody else was doing this at the time. There were other people doing chair massages at businesses, but they weren’t doing it as their primary business—they were doing it to bring people to their table-massage business.” Hickok got the business going and quickly found that there was a greater demand than she could meet on her own. She started contracting with licensed massage therapists to serve businesses around Anchorage and throughout the state. “They were happy to let me do the legwork,” she says. She uses an online signup system at her website, workplacemassage-ak.com, that works well and sends out reminders to clients prior to a scheduled visit to their workplace.

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Hickok says her team works with about a dozen Anchorage-area businesses. She has between five and ten licensed massage therapists on her team at any given time— some just work special events while others work about twenty-five hours a week. While chair massages are the most common, Hickok says she can also offer full table massages if the workplace is set up for it. Her client base extends beyond Anchorage, too—she and her team have traveled to events in Nome, Prudhoe Bay, and many places in between.

Increasing Demand Sparks New Business Brigmon says she started Balance and Restore after learning there was more demand for on-location chair massage than the number of therapists working in that field. She said she fell in love with the field. “Especially after seeing the need for healing and hearing the grateful feedback from the staff,” she says. “I knew it was the direction I wanted my career to take.” Brigmon plans to offer an online sign-up portal soon, but currently works with four corporate clients on a recurring basis and handles sign-ups by email and telephone. She contracts with other licensed massage therapists from Oriental Healing Arts to

provide massage when more than one pair of hands is needed. “Several of them are trained in Tui-Na, a type of therapeutic massage done in Chinese hospitals,” Brigmon says. That type of massage involves deep acupressure along the body’s meridian lines in the area of the pain. Brigmon says she experiences tendonitis in her elbow, for example, and a Tui-Na trained massage therapist who treats her begins at her shoulder and works toward the elbow. “It can be a little painful when you get it done,” she says, “but I just got it done yesterday and today I’m pain-free.” A study published in the April 2008 Journal of Alternative and Complementary Medicine showed people with carpal tunnel syndrome, another common repetitive movement injury, saw improved strength and function and decreased symptoms when they received twice-weekly massages for six weeks. A more recent study showed reduced pain and increased grip strength in adults who received weekly massage targeting hand pain over a four-week period. The patients also reported less anxiety and depressed mood and decreased sleep disturbances in that study, which was published in Complementary Therapies in Clinical Practice in March 2011.

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HEALTHCARE SPECIAL SECTION

Hickok says she doesn’t use oils, so clients’ skin doesn’t get greasy.

HEALTHCARE SPECIAL SECTION

Brigmon and her team offer a range of other clinical massage specialties, including Thai reflexology and Thai yoga massage. “We also incorporate a lot of manual lymph massage while we do chair massage. That helps with immunity,” she says. One of the problems with sitting at a desk for hours at a time, Brigmon says, is that the lymphatic system isn’t circulating, moving toxins through and out of the body. Massage can get those toxins moving again, she says. “If you get a massage every week or every other week, you’re going to be healthier than someone who doesn’t get one,” Brigmon says. Studies back her stance. A study in the October 2010 Journal of Alternative and Complementary Medicine showed that even a single session of massage therapy produces measurable biologic effects on the immune system, specifically looking at hypothalamic, pituitary, adrenal, and immune function. Brigmon says her team also brings other alternative therapies, such as cupping, essential oils, ultrasonic tuning forks, TENs units, Chinese pain topicals, and patches. “Our goal is not only to relax and rejuvenate our corporate clients but to balance the body and restore wellness,” Brigmon states on her website, BalanceRestore.org.

Morale Booster

Rosie Drew, a human resources generalist at Chugach Electric Association, says she encouraged Chugach to bring in Hickok and her therapists after seeing the popularity of the massage program at another employer. Therapists from Workplace Massage visit Chugach Electric every Wednesday from 10 a.m. to 2 p.m., offering ten- or twentyminute appointments. Drew says happier employees make for a happier workplace. Drew says she regularly schedules a twenty-minute massage with Hickok or one of the other massage therapists that come in. “It’s really good if you have a stressful kind of job and you tend to hunch your shoulders or tighten up a lot. Even though it’s a short-time massage, it really does relax your shoulders and arms,” Drew says. It’s a good stress reliever for those who elect to participate, she says. Chugach provides a conference room for the chairs to be set up, and Hickock also attends the electric cooperative’s September health fair and provides free five-minute massages. “For the general wellness of our employees, I think it’s a good thing,” Drew says. Brigmon says the corporations she works with provide massage for free to their employees, seeing an overriding healthcare benefit from the service. “A lot of studies have determined that people who get massage on a regular basis, 44

Photo by Chelsea Marie Photography/Courtesy of Balance & Restore

Massage therapists Balance & Restore owner Rose Brigmon, left, and Seraphim Stapleton delivering corporate massage therapy to clients at an Anchorage business.

because they’re not getting sick, have fewer sick days and less doctor visits. That, alone, can save a corporation thousands of dollars a year,” she says.

Booming Industry

Although Hickok and Brigmon are the only businesses in Anchorage focused solely on providing on-location massages, several other massage therapists do provide the service on an occasional basis. Kirk Wilson, operator of the Alaska Massage Institute and Medical Massage Alaska, says he works with a few businesses to provide on-location massages at people’s workplace and at special events like a DoTerra Essential Oils gathering or bridal shower. At Medical Massage Alaska, Wilson and his team provide craniosacral therapy (providing relief by focusing on certain areas of the skull) in addition to deep-tissue massage, myofacial release (using gentle, sustained pressure on the myofacial connective tissue) for injuries and rehabilitation, and therapeutic medical massage treatments, billable to insurance. “The client is determining whether this quality of touch, via chair massage, is what they would pay for, for an hour or ninety minutes on the table,” he says. Wilson formerly taught massage therapists at the Alaska Career College and worked

with the state to develop advanced certifications for massage therapy in the state. The state developed a Board of Massage Therapists in 2014, requiring all massage therapists to be licensed. Wilson says when he first started teaching in Alaska, about eight years ago, there were perhaps a few hundred working massage therapists. Now, the state shows more than nine hundred licensed therapists. If the popularity of on-location chair massage grows, Wilson says he may add a workshop to the Alaska Massage Institute curriculum, focusing on chair massage. “I had not ever received a chair massage when I was going to school,” Wilson says. “Typically, it’s part of the initial curriculum. However, I feel it doesn’t have enough time in the initial curriculum to [teach] all the things you can do. You can also turn them around and have them sit [in the chair] like in a La-Z-Boy.” Wilson says he envisions more businesses stepping forward to invite massage therapists into their workplace, as it’s a low-cost and easy way to make employees happier and boost retention. “It is such a great benefit for the business,” he says. R Freelance journalist Rindi White lives in Palmer.

Alaska Business Monthly | December 2016 www.akbizmag.com

Hope is Here

DeeDee Jonrowe, Ken Peltier, and Dr. Clare Bertucio at the Mat-Su Cancer Center's grand opening and community event.

nchorage Associates in Radiation Medicine is now open in our fourth Alaska location! We are honored to continue to bring state of the art Radiation Therapy to multiple areas throughout the state. With existing locations already servicing the Kenai Peninsula, Juneau, and Anchorage, we are delighted to have recently opened our doors in the Mat-Su Valley. Our stunning new multimillion dollar Center is located right near the Mat-Su Regional Medical Center, adjacent to Imaging Associates. Bringing Hope “home,” the new Mat-Su Valley Cancer Center is now providing the highest standard of radiation and cancer care to patients throughout Dr. Clare Bertucio the Valley region. HIGHEST QUALITY We have installed the most up-todate Varian True Beam Linear Accelerator to ensure the highest quality in radiation delivery for our patients in the Mat-Su Valley. This latest in technology allows submillimeter accuracy and provides for the utilization of real time imaging during the course of radiation delivery. Assuring pinpoint targeting accuracy allows us to provide

higher doses to diseased tissue with lower doses to the surrounding normal tissues. (Potential toxicity/side effects stem from doses to normal tissue.) Our staff of fully certified specialists is here to provide the best comprehensive cancer care available, including onsite cancer support groups. Given the rigor of driving to Anchorage on a daily basis or relocating out of state for treatment, we are thrilled to be able to offer these services at “home.” VESTED IN THE VALLEY At our grand opening in September, local celebrity cancer survivors Ken Peltier and DeeDee Jonrowe were on hand to sign autographs and provide entertainment. We also had Big Lake artist and woodworker Keith Simmons and his daughter Tara Wood working with community attendees to create a collective art piece entitled “Journey of Hope.” Now permanently installed in the Center, this collaborative piece is designed to remind patients and survivors alike that the journey through cancer need not be traveled alone. It is a beautiful and inspirational piece, which has truly become a focal point in our Center. We are absolutely vested in the Valley community as a whole and, as such, have employed mostly Valley residents in all of our positions and are –

Pai d

Adve r tis e me n t

–

displaying only Alaskan artists’ works in the Center. SUPERLATIVE CARE The Mat-Su Valley Cancer Center specializes in external beam Radiation Therapy for malignant and appropriate benign disease. While most solid tumors can be aptly treated with external beam radiation, some treatment plans may also require the addition of other forms of specialized radiation; because we are part of a larger group, we have seamless and direct access to the largest array of radiation delivery modalities in the state, including the only Cyberknife in Alaska! Patients can now stay “home” to receive gold standard cancer care! We couldn’t be more excited about our new home in the Valley, and we look forward to working closely in a team effort with the other providers in the area to bring superlative cancer care to Mat-Su residents. Please call us if you have a cancer concern.

Clare Bertucio, MD, Medical Director 2250 South Woodworth Loop, Suite 100 Palmer, Alaska 99645 P: 907.707.1333 F: 844.248.7515

MAT-SU VALLEY CANCER CENTER

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Healthcare

Data Storage & Backup for Healthcare Electronic health records designed to improve the quality of care and reduce costs By Tracy Barbour

ecently, the Alaska Center for Pediatrics began an innovative pilot project that remotely links school nurses to health information for students with complex healthcare needs. Now, nurses at five Anchorage elementary schools— Creekside, Fairview, Lake Otis, Tudor, and Tyson—can access the medical records of select students online. So far, the center has identified twenty-four students with complex healthcare needs at these schools. Eight of these students are enrolled in the pilot project. All of the students in the pilot project are established patients of the Alaska Center for Pediatrics, a practice of Pinnacle Integrated Medicine, which is managing the pilot with the Alaska Department of Health and Social Services (DHSS). So far, the project has generated quite a bit of excitement among the participating parents and school nurses, according to Dr. Thad Woodard of the Alaska Center for Pediatrics. “It’s pretty early, but we’re already having some interaction and interest by the nurses,” Woodard says. “So I would say it is off to a good start.” The federally-funded project allows nurses to access a care-management platform called Lightbeam through Pinnacle Integrated Medicine. Lightbeam lets them view “real-time” medical records data, including the students’ medicines, vaccines, specialists, and even follow-up appointments. “Overall, through this electronic medical records technology, it is a better way to interact and stay up to date,” says Woodard, a pediatrician with more than thirty years of practice experience. The project is among a variety of national initiatives designed to demonstrate bet46

Image courtesy of Alaska eHealth Network™

“This is just another of any number of efforts that physicians and healthcare providers are trying to make to improve communications with the idea this will help us control costs and improve quality.”

—Dr. Thad Woodard Alaska Center for Pediatrics

Alaska Business Monthly | December 2016 www.akbizmag.com

ter quality, cost, and outcomes in healthcare through the improved coordination of care. “This is just another of any number of efforts that physicians and healthcare providers are trying to make to improve communications with the idea this will help us control costs and improve quality,” Woodard says. Pinnacle is also working with the Breast and Cervical Health Check program on a pilot project to improve women’s breast and cervical cancer screening rates, according www.akbizmag.com

to a DHSS press release dated September 16. Primary care and OB/GYN practices will use Pinnacle’s technology to identify Pinnacle patients whose age and health status suggest they should be screened for breast or cervical cancer. The women who are identified will be mailed a reminder to get screened, and those who fail to make an appointment will be sent additional health information. “The Breast and Cervical Health Check program is excited to partner with Pin-

Benefits of Electronic Medical Records Pinnacle’s pilot projects are an example of how Alaska healthcare providers are progressing their efforts to use electronic medical records (EMR) to enhance the safety and quality of healthcare for patients. EMR help medical practitioners in the creation, storage, and organization of patient charts, prescriptions, lab orders, evaluations, and other information. The term EMR is often used interchangeably with electronic health records (EHR), but they are subtly different. EMR solutions allow patient information to be shared within a single healthcare organization, while EHR software enables health-related data to be transmitted across multiple organizations. In Alaska, some of the most widelyused EHR software solutions are Cerner, Allscripts, and Epic. EMR/EHR systems are vital components of Alaska’s health information exchange (HIE). Essentially, HIE is the secure, electronic process of sharing patients’ clinical information between authorized physicians and other healthcare providers to improve the quality of care and increase practice efficiencies. HIE offers a variety of benefits, including better access to information, higher-quality follow-up care, fewer errors, and increased safety for patients, as well as greater efficiency and reduced costs for physicians, hospitals, and the public. Despite these benefits, many doctors’ offices still rely on paper medical records, which can be problematic—especially in Alaska, where patients often must travel from rural communities to receive healthcare. They frequently arrive with no record of current medications or past history of illness, making it difficult for healthcare clinicians to provide effective treatment. The HIE system mitigates this problem. It ensures accurate information about the patient is immediately available and easily accessible to providers, hospitals, labs, pharmacies, insurance carriers, and government agencies. For example, if a pa-

December 2016 | Alaska Business Monthly

HEALTHCARE SPECIAL SECTION

nacle to engage multiple providers in this innovative quality improvement and outreach model,” Cheley Grigsby, Breast and Cervical Health Check Program Manager for DHSS, states in the press release. “This gives us the opportunity to identify rarely or never screened women who may be at risk for developing breast or cervical cancer, with the ultimate goal of reducing cancer mortality in Alaska.” Both pilot projects are on one-year contracts and will continue through August 2017, with an option to renew for an additional year if they are proving successful.

HEALTHCARE SPECIAL SECTION

tient visits a cardiologist, the primary care physician will electronically receive a care summary with details from the appointment, which helps to keep the patient’s file updated. This integrated approach gives the different healthcare professionals who treat a single patient the tools they need to make more accurate diagnoses and treatment decisions, according to DHSS.

Connecting Providers Statewide

DHSS has contracted Alaska eHealth Network (AeHN) to procure and manage the statewide health information exchange, which receives electronic data from a diversity of providers. Alaska’s HIE system allows their data to be employed by other eligible providers that may be using a different electronic health record solution. Providers must have the appropriate security role to access data through the exchange. Privacy is a key issue surrounding medical records—whether paper or electronic. Consequently, health information exchanges are keen on implementing measures to protect patients’ private information. Alaska’s health information exchange is developed to be stricter than the Health Insurance Portability and Accountability Act, according to State Health Information Technology Coordinator Beth Davidson, PMP. In addition, EHRs that connect to the exchange must be certified by the Office of the National Coordinator for Health Information Technology. “It’s about ensuring that patients have access to their data and providers are assigned the appropriate security role,” Davidson says. The bulk of Alaska’s healthcare providers have been implementing some form of an electronic health information system, Davidson says. “Most of them are certified

“It’s a very exciting field, and there are a lot of moving parts and pieces. At the end of the day, we are working to build a system of care that will have the technology that will support patients.”

—Beth Davidson, PMP State Health Information Technology Coordinator

“We take data, normalize it, and move it using the same data sets. For example, if your doctor calls it a blood sugar, the hospital would call it glucose. If those aren’t matched and normalized, you wouldn’t know it was the same test.”

—Rebecca Madison Executive Director and Privacy and Security Officer, AeHN

solutions to make sure they meet certain criteria, so they are interoperable and align with the vision that the federal govern has,” she says. “Our state has been ahead of the game compared to the rest of the nation.” In fact, in 2013, Alaska officials were recognized by the federal government as national leaders for their efforts to enhance the safety and quality of healthcare by embracing the use of health information technology. Alaska was one of twenty-two of fifty-six states and territories recognized for its early achievements in this area by the Office of the National Coordinator for Health Information Technology. Currently, there are twelve hospitals that are live and fully connected to Alaska’s HIE, and another ten hospitals are in the process of getting connected, Davidson says. All hospitals in Alaska should be connected by February 2017. That doesn’t include federal hospitals located on Alaska’s military installations. In addition, there are four hundred individual providers who are in their own practices that are already connected to the health information exchange. Premera Blue Cross Blue Shield of Alaska also has signed on and is working to provide data to the exchange. “We would like to reach out to the other payers as well, such as Medicaid, Moda Health, and Aetna,” Davidson says. DHSS is also working on linking behavioral health providers to Alaska’s HIE. Initially, the exchange’s focus was on primary health providers, but getting behavioral health providers on board will make the system even more valuable, Davidson says. “It’s a very exciting field, and there are a lot of moving parts and pieces,” she says. “At the end of the day, we are working to build a system of care that will have the technology that will support patients.”

Alaska eHealth Network

Some states have multiple HIEs, but Alaska’s health information exchange is handled by a single entity—AeHN. Basically, AeHN manages the electronic sharing of health-related information between different EHR systems for Alaska. AeHN fills a vital role because there are at least eighty-two different health-related

systems across the state, according to Rebecca Madison, the executive director and privacy and security officer of AeHN. All of these systems use different technologies and formatting when moving data around to various end users. AeHN fills in the gap by standardizing the data—using federal codes—and transferring it electronically from one system to another. “We take data, normalize it, and move it using the same data sets,” Madison explains. “For example, if your doctor calls it a blood sugar, the hospital would call it glucose. If those aren’t matched and normalized, you wouldn’t know it was the same test.” Alaska’s HIE is often used to transmit clinical data from one provider to another in cases of referrals, specialty consulting, and emergencies. The data that is transported is a subset of the electronic health record on file in the provider’s office or in the patient’s electronic hospital record. This data can include lab results, radiology reports, admission and discharge summaries, as well as insurance information. Typically, this type of information is sent to AeHN when a patient visits a doctor or receives treatment in the hospital. Eligible providers with certified EHR systems may join AeHN to make their digitized records available to be shared real-time across different healthcare settings whenever and wherever the patient’s information is needed. AeHN facilitates health information exchange for more than 20 hospitals and more than 450 different providers/organizations across the state. In addition, 4,000 people use the network to send direct secure messages. Participating providers must pay a $250 annual fee to use the network’s services. “Our systems ‘know’ [recognize] who the patients are in each EHR system,” Madison says. “So the right patient information doesn’t get sent to the wrong recipient.” While its principle use is for data transmission, AeHN also offers consulting services to provide clinicians, practices, and hospitals with technical assistance, implementation guidance, and “meaningful use” expertise. “We spend a lot of time working with providers on how they can get the data and what it means to them,” Madison says.

Alaska Business Monthly | December 2016 www.akbizmag.com

HEALTHCARE SPECIAL SECTION

Protecting Patients’ Health Records To keep patients’ medical information safe, AeHN employs secure, encrypted data exchange using standards developed specifically for healthcare. In more technical terms, AeHN uses secure cloud-based storage, virtual private networks, and secure sockets layer technology that protects private data during transmission online. It also safeguards data using various state and federal regulations, including HIPPA laws designed to protect information while it’s being shared. Madison says AeHN adheres to the most current set of security policies, including those of the National Institute of Standards and Technology—the gold standard for security. The network’s protocol includes background checks on employees and contractors; weekly staff training on security and privacy; and routine internal audits, external audits, and audit on the participants who use AeHN. Everyone is vulnerable to potential security attacks, Madison says. That’s why AeHN strives to stay on top of the latest standards and constantly monitors the environment for potential risks. “Every person who is storing and using protected health information needs to know the law, assess their risk, and take steps to protect the data they are entrusted with,” she says. “We recommend that every provider find a security expert to help them understand and manage their risk.” Madison adds: “Electronic medical records aren’t going to go away. We’re going to have to come up with the right answers to keep information private and secure. It really is an evolving industry.” Despite the potential risks, most patients are choosing to participate in Alaska’s health information exchange. “They are not opting out of sharing their medical records electronically,” Madison says. “They just want the doctor to have as much information as possible.” That’s a good thing, according to Madison. “As long as your doctor doesn’t have access to all the information, there is still room for medical errors,” she says. “The only way we’ll get there is by all of us working together, with patients sharing their information. Doctors need to get the kind of information they need out of it. Then we can really improve patient care and patient safety.” R

Freelance writer Tracy Barbour is a former Alaskan. www.akbizmag.com

December 2016 | Alaska Business Monthly

OIL & GAS A new ERD rig will enable ConocoPhillips to nearly double the reach from its existing infrastructure without building new roads, pads, or pipelines— minimizing footprint through technology. Image courtesy of ConocoPhillips

Doyon Building ERD Rig for ConocoPhillips 1

Oil giant’s investment ‘opens up a lot of opportunities’ By Julie Stricker

new drill rig commissioned by ConocoPhillips in October could open more opportunities for oil production on Alaska’s North Slope. 50

ConocoPhillips signed a contract with Doyon Drilling Inc. to build an ERD (Extended Reach Drilling) rig. The rig will enable ConocoPhillips to nearly double the reach from its existing infrastructure without building new roads, pads, or pipelines. Doyon Drilling, a subsidiary of Fairbanksbased Doyon, Limited, will build the rig in Canada, says Lisa Bruner, vice president of North Slope operations and development for ConocoPhillips Alaska. The contract was announced during a low-key press conference at Doyon’s Fairbanks headquarters. Doyon President and CEO Aaron Schutt says the project offers a lot of promise for share-

“We’re superexcited by this opportunity and appreciate the chance to fulfill this with ConocoPhillips.”

—Aaron Schutt President and CEO, Doyon

Alaska Business Monthly | December 2016 www.akbizmag.com

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holders and the Alaska oil industry in general. “We’re super-excited by this opportunity and appreciate the chance to fulfill this with ConocoPhillips,” says Schutt. “For us, we’ve operated drilling rigs since 1982. This is a bigger rig with [greater] capacity than any rig we have in our fleet and more than any rig that’s in Alaska, so it’ll have new technologies, new equipment. For us, it represents a long-term opportunity to employ more Alaskans and hopefully make a profit while we’re doing that.” It is expected to be completed and put into production on ConocoPhillips’ West Fiord field in early 2020. West Fiord is located northwest of ConocoPhillips’ Alpine field but isn’t connected by any roads or other infrastructure. “The great thing about this particular rig is it allows us to reach further without setting new gravel,” Bruner says. “So we can reach the Fiord West reservoir from our existing drill sites.”

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“The new ERD rig is good news for ConocoPhillips and for the state. Despite the current challenges facing our industry, we are planning for the future and pursuing new development opportunities. Adding the ERD rig to our rig fleet on the North Slope is a potential breakthrough event. It could enable increased oil production by reducing the cost of developing economically challenged or previously unreachable resources.”

—Joe Marushack President, ConocoPhillips Alaska

extended-reach rig will be able to access about 125 square miles without affecting the company’s environmental footprint above-ground. It can extend 33,000 feet, a third more than its current rigs. “So that’s the best part about it,” she says. “We don’t lay any new gravel to drill these wells because the reach is so much further than what we can do with the current rigs that we have out there. So it opens up a lot of opportunities for satellite development around our existing infrastructure and still minimizes our environmental footprint.” In addition, the rig is mobile and can be used in fields across the Slope. ConocoPhillips estimates it has enough reserves to keep the rig operating for at least a decade. “The new ERD rig is good news for ConocoPhillips and for the state. Despite the current challenges facing our industry, we are planning for the future and pursuing new development opportunities,” says Joe Marushack, president of ConocoPhillips Alaska. “Adding the ERD rig to our rig fleet on the North Slope is a potential breakthrough event. It could enable increased oil production by reducing the cost of developing economically challenged or previously unreachable resources.” ConocoPhillips is Alaska’s largest oil producer. In 2015, it produced the first oil on Alaska Native lands in the National Petroleum Reserve-Alaska and is expecting to begin production at Greater Mooses Tooth 1 in 2018. The new rig represents a significant investment in the future of Alaska, Bruner says. “We’ve had a good, stable fiscal regime. We’re committed to ongoing development in Alaska under the current fiscal regime.”

Welcome Investment

With about half of its rigs idled this year and only about 300 of its 450 work force currently on the job, Doyon Drilling welcomes the investment, Schutt says. The rig will create about 80 jobs for Doyon Drilling, plus another 70 to 80 support positions, says Schutt. 52

“As many people know shareholder employment is one of our two highest priorities—along with making money,” Schutt says. “Right now we’ve got about 50 percent Doyon shareholders on our rigs, so that’s forty jobs for Doyon shareholders that don’t exist currently.” Annual payroll for rig operations will be about $8 million, half of which would go to Doyon shareholders, he says. In addition, Doyon’s Alaska hiring percentage is above 90 percent. “It’s a huge employment benefit for us and for Alaskans as well,” he adds. “Every opportunity we can get in this state to put more production online is good for Alaskans,” he says. “Royalty payments, property taxes, severance taxes—those are all things that contribute to our economy along with the employment,” he says. “This rig will have the ability to reach out in the fields that otherwise wouldn’t be produced in the same time-frame—maybe not produced at all. So that’s production we wouldn’t oth-

‘Multiplier Effect’

“I applaud ConocoPhillips and Doyon for their work to spur production during fiscally challenging times. This is welcome news, as it fulfills lease terms for Fiord West, which is near Alpine in the Colville River Unit. As our oil pipeline sits three-quarters empty, construction of an extended reach drilling rig will have a much-needed multiplier effect for the state’s economy,” said Governor Bill Walker in an October 6 press release. ConocoPhillips has eight active oil rigs right now in the United States, Bruner says. Five of those are in Alaska on its Alpine and Kuparuk leases; the other three are in the Lower 48. “We’re still differentially investing in Alaska relative to some of our other regions around the world,” she says. The ERD rig is the third new drilling rig ConocoPhillips has had built since legislation that extended oil and gas credits for new production was passed in 2013. The bill, SB21, has spurred petroleum exploration efforts around the state but has been criticized by some who say the credits are too costly for Alaska as it reels from plummeting oil prices. Oil prices likely will rebound in the future, but when or how much is an open question, says Scott Jepsen, ConocoPhillips vice president of external affairs. In the meantime, the recent stability in Alaska’s fiscal regime has made it an attractive location for capital investment, compared with other regions around the globe. “We’re making these investments because of the fiscal framework we have today, but if that changes significantly, it’s obviously going to affect our investment

“When you look at their capital investment as a percentage of their overall worldwide capital investment, it’s gone up in the last few years. That shows we have mature infrastructure on the North Slope and over time we’ve driven some efficiencies in the industry that make us competitive in the world,”

—Aaron Schutt President and CEO, Doyon

erwise get, which again adds substantially to state coffers, to employees’ paychecks, and which, in general, benefits us.” It also shows ConocoPhillips’ confidence in Alaska, he says. “When you look at their capital investment as a percentage of their overall worldwide capital investment, it’s gone up in the last few years. That shows we have mature infrastructure on the North Slope and over time we’ve driven some efficiencies in the industry that make us competitive in the world,” Schutt says.

in the state,” Jepsen says. “[Alaska] has to compete with a lot of other places to invest capital. So that’s one of the big concerns out on the horizon. But at this point, we’re still encouraged that this rig provides us with a lot of opportunities that we’re not going to be able to realize otherwise.” R Julie Stricker is a journalist living near Fairbanks.

Alaska Business Monthly | December 2016 www.akbizmag.com

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OIL & GAS

Alaskans’ Passion for Pipelines Positive symbols of pride and prosperity

The trans-Alaska oil pipeline, also known as TAPS (Trans Alaska Pipeline System), near Deadhorse, above, makes its way to Valdez through mountain passes and across tundra, as depicted by photos throughout this article.

By Julie Stricker

hen the first oil moved through the trans-Alaska oil pipeline on June 20, 1977, it made headlines around the world. The pipeline was heralded as an engineering marvel. The forty-eight-inch diameter pipe runs for eight hundred miles from Alaska’s North Slope to tidewater in Valdez, crossing three mountain ranges and thirty major rivers and running across hundreds of miles of permanently frozen ground. Recorded temperatures along that route span 175 degrees—from Fahrenheit 80 below zero to 95 above. It took a work force of seventy thousand people three years and two months to complete the project at a cost of $8 billion. It was the largest privately funded construction project at the time. Forty years later, the pipeline is still regarded as an iconic piece of Alaskana. Although its flow has diminished, the oil it carries, 17 billion barrels to date, still provides the lion’s share of the state’s income, as well as the anticipated dividend checks most Alaskan residents receive each 54

fall. But there’s more to it than just a massive conduit for oil, a sentiment that plays into the desire for another major pipeline to funnel Alaska’s vast deposits of natural gas to market. Alaskans have a passion for pipelines.

Positive Symbols

“Pipelines, to an Alaskan, are a symbol of success, independence, financial security, and apple pie,” says Larry Persily, who served as the federal coordinator for Alaska natural gas pipeline projects from 2010 to 2015. “We covet pipelines like a Yankees fan covets World Series titles. Or like Trump covets tax deductions.” Besides the trans-Alaska oil pipeline, a network of pipes serves the Cook Inlet and Kenai Peninsula oil and gas fields. A 312mile buried pipeline is planned to provide natural gas to the Donlin gold mine in southwest Alaska. Another LNG (liquefied natural gas) pipeline that would bring North Slope natural gas to market has been discussed for decades. Why pipelines? In a state with few roads and vast distances to cover, other transportation methods are

simply uneconomical. Not that building one in a land of ice, snow, and earthquakes is easy, but Alaskans did it. “It’s symbolic of the true grit and pride we have in living in Alaska,” says Bill Bailey, Fairbanks community and communications manager for Alyeska Pipeline Service Company. Alyeska President Tom Barrett, a former admiral, often expresses pride in TAPS (Trans Alaska Pipeline System) employees who “‘recognize that just because something is difficult doesn’t mean it won’t get done,’” he adds. “It’s the Alaskan way of life,” Bailey says. “We all have that grit to us. It’s a challenge to live here. There’s a lot of pride in those who choose to live in Alaska.” It may not be the largest pipeline in the world, but it’s certainly one of the most visible. Part of the reason is that it is indeed visible, running for miles above ground. Elsewhere, most pipelines are buried. “Most people here have a connection with it,” Bailey says. “Some of them worked on it. But we see it, we interact with it.” Aside from minor spills and corrosion, the trans-Alaska oil pipeline has served

Alaska Business Monthly | December 2016 www.akbizmag.com

the state well for nearly forty years. Bailey credits Alyeska’s proactive maintenance programs, including its Integrity Management Program, whose whole mission is to identify and evaluate where there may be risks to the physical structure. The program runs a smart pig through the pipe regularly. The pig is a piece of equipment that takes a variety of readings to judge the pipe’s integrity and looking for anomalies. Similar, but smaller robots are run through ancillary pipes. “It is an extremely robust program,” he says. The pipeline’s preventive maintenance schedule is “far more rigorous than what you would do on your car.”

Prosperity

A fundamental reason Alaskans like pipelines is because they provide well-paying jobs, says Persily, currently assistant to the mayor of the Kenai Peninsula Borough. “Alaskans have often measured the state’s economic health/economic success by construction jobs, be it pipelines or oil rigs or housing construction, commercial building construction, boat construction, or shipyard jobs in Ketchikan,” he says. “It matches the demographics and aspirations of Alaskans because it does pay well.” For instance, when people start looking at the possibility of an LNG (liquefied natural gas) pipeline, they’re looking at how many construction jobs and camps will be created and how many trucks, backhoes, and front-end loaders will be required, Persily says. That’s a way to judge the value of a project. “When there’s a construction job going on in your community, you see all these trucks with the company logos on them,” he says. “You see the workers out in the mornings and at lunch. It’s a very visible indication of success.” In a state the size of Alaska, with its vast, remote petroleum resources, building on a massive scale makes sense, he says. “We’re a young state,” Persily says. “I hate the word, it’s overused, but we lack infrastructure that a lot of other states have. So you know we’re going to have more road construction or port construction or pipeline construction than other states. And because of our geographic size, because of the size of the resources, those infrastructure projects are going to be big, whether it’s a gas pipeline or the railroad bridge over the Tanana River.” A natural gas pipeline would be another massive project, Persily says. And an expensive one, which likely would include a treatment plant to remove the carbon dioxide from the North Slope gas before it’s moved to a liquefaction plant. www.akbizmag.com

December 2016 | Alaska Business Monthly

in so many things: miles of coastline, tallest peak in North America. We do like superlatives here.” Bailey notes that the trans-Alaska oil pipeline is much more than a very long, highly engineered pipe. “It’s a system,” he says. That includes the operational central controls, testing labs, the Valdez facilities, and the shipping escorts. That infrastructure “basically sends a message that we’re open for business.” When the pipeline was designed, it was thought that twelve pump stations would be needed, but only eleven were built. Today, only four operate year-round. Three of them are north of the Brooks Range, necessary to push the oil over 4,738-foot Atigun Pass. The fourth, Pump Station 9 is near Delta Junction. Pump Station 7 near Fairbanks is used to generate heat in the winter. Despite the passage of time, the harsh environment, and the challenges in keeping such an extensive system operating around the clock, the trans-Alaska oil pipeline has a strong safety record, which Bailey attributes to a system-wide culture of safety. “It really is a remarkable safety culture,” he says. “You end up taking it home and driving all your friends nuts.”

Eventuality

“You need economies of scale to make anything even come close to penciling out,” he says. “So even though it would be a lot cheaper to build a twelve-inch line that moved one quarter the volume of the gas, the unit cost of moving that energy would be prohibitive. You have to make it big enough that you get the unit cost down so you get economies of scale. “Building it big means it’s going to be one of the largest, most expensive energy projects in the world, or certainly in North America.” 56

Pride

For Alaskans, big projects also bring a certain amount of pride, Persily says. “Alaskans, well not just Alaskans, everyone wants to think they have a worldclass pipeline, or a world-class liquefaction plant, or world-class football stadium,” he says. “It’s an adjective that brings local pride and we’re not different than anyone else—other than maybe we’re a little more fixated on it here because we’re the biggest

Considering the trans-Alaska oil pipeline’s nearly forty-year record of safety and success, why hasn’t a similar pipeline to transport natural gas from the Slope been built yet? The possibility of such a pipeline has been in the news for decades, but no dirt has been turned on a project yet, and none is coming in the next couple of years. Persily says he’s confident a natural gas pipeline will be built, someday, barring an unexpected global move into renewable energy sources instead of fossil fuels. “There’s a lot of gas there the companies would like to turn into money,” he says. “If there’s never a pipeline, they never get to turn it into money.”

Alaska Business Monthly | December 2016 www.akbizmag.com

From a reservoir standpoint, it only makes sense to pump the gas while the oil is still flowing because the oil is what pays for Prudhoe Bay and Point Thomson operations. Gas alone can’t cover those costs, he says. Producers would need both sources of income. In addition, stranded resources don’t add anything to a company’s balance sheet. “Reserves are expressed in barrels of oil equivalent and you can’t book oil and gas as a reserve unless you can show you can get them to market,” he says. “Just because you found it doesn’t mean it’s a bookable asset.” That means the 30 trillion cubic feet of gas estimated at Prudhoe and Point Thomson are not booked as reserves at Exxon, BP, and ConocoPhillips. “If they had a [pipeline] project, then they could book that stuff as reserves,” he says. “On an energy-equivalent basis, that’s more than 5 billion barrels of oil equivalent in that gas. That’s a lot of oil to put on your balance sheet.” Another issue is that the global LNG market is in turmoil. “It’s not the same LNG market that existed for the past fifty years,” Persily says. “It’s not just these companies on the North Slope; worldwide, companies are kind of waiting for the market to settle out before they make their next big investment decision.” Most important, however, is uncertainty at the state level. Persily says he has a friend who has worked as an oil and gas consultant for thirty years. “When you ask him when will the final investment decision be made to build an Alaskan North Slope gas project, his answer has always been ‘two years after Alaska gets its act together.’ And that’s probably still true.” R

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Freelance journalist Julie Stricker lives near Fairbanks. www.akbizmag.com

December 2016 | Alaska Business Monthly

ENERGY Adding extra insulation can reduce energy costs by 30 percent a year, though it will be more costeffective when energy prices are high. Photo courtesy of Cold Climate Housing Research Center

Is cheap energy the enemy of efficiency?

Comparison with other projections

consumers) than the West Texas Intermediate (WTI) crude oil price does. The WTI price has continued to trade at a discount relative to other world crude oil prices. In 2015, the WTI and North Sea Brent crude oil prices differed by $4 per barrel ($4/b). In the AEO2016 Reference case, the discount grows to $7/ b in 2040. Spot crude oil prices in the other outlooks used in the comparison are based on either Brent, WTI, or IRAC prices, except for prices from the IEA, which are based on the average of crude oil import prices paid by members of the Organization for Economic Cooperation and Development (OECD) and prices from the Organization of Petroleum Exporting Countries (OPEC), which reflect the average price of a basket of crude oil sold by OPEC member countries.

n 2008, the price of oil hit $140 a barrel, double what it had been just a year before. The impact was felt throughout the country, and especially in Alaska, where we rely on oil in so many ways. The state budgeted $300 million to help Alaskans make their homes more energy efficient. Across the state, many residents started retrofitting their homes and burning more wood to save money. Today we have a different problem. A barrel of oil is going for about $50. It’s been two years since prices crashed, and it’s starting to feel like $2-a-gallon heating oil is the new norm. In this environment, how does one make decisions about cars, heating appliances, and houses, decisions that will affect pocketbooks long into the future? In other words, does energy efficiency make sense in a time of cheap energy?

Life-Cycle Costs First of all, this is Alaska. Due to climate, remoteness, and a host of other factors, Alaskans spend more than twice as much on energy as the average American. For example, Minneapolis, one of the coldest cities in the Lower 48, has a heating demand simi58

lar to Ketchikan, one of the warmest cities We call this the life-cycle cost of a house. in Alaska. On top of that, more than half the It includes not just the cost of buying or homes Alaska wereconsumption built during the pipe- building a home, but also what one spends CP3.in Total energy Three other of organizations—ExxonMobil, BP, and IEA—provide consumption by sector. IHSGIthe provides line boom the 1970s and 1980s; today they projections heatingof energy and maintaining it over life aof of total primary energy consumption (but not consumption by sector) and projections of electricity sales, petroleum, areprojection aging, inefficient, and under-ventilated. the structure. and natural gas demand by end-use sector. To allow comparisons with the BP and IEA projections, AEO2016 Reference case projections residential and commercial been combined produce sectorwhat projection (Table CP3). Second,for wethehave no idea what thesectors futurehave will But tohow doa buildings we know energy costs The IEA projections have a base year of 2013. ExxonMobil did not provide data for a base year. The BP projection extends through hold. house last The sixty yearsReference or more. will be in the future? We don’t a crystal 2035,Awith a baseshould year of 2014. AEO2016 case includes an unspecified sector, which has beenhave combined with transportation for this investment comparison, in order to make it Such a long-term demands a comparable long- with ball,other butprojections. we can look at projections from the Both IEA and ExxonMobil account for electricity generation from renewable energy sources at a conversion rate of 3,412 British term view of all the costs associated with it. experts. thermal units (Btu) per kilowatthour (kWh) rather than a heat rate for displaced fossil fuel, as is used in the AEO2016 and other projections. As a result, their estimates for total energy consumption are lower. The BP projection appears to include the Clean Power Plan (CPP), with coal use for electricity generation showing the largest drop from 2020–25, as well as smaller declines in all other 5-year periods. The ExxonMobil projection does not include the CPP but assumes the implementation of unspecified environmental regulations related to carbon dioxide (CO2) emissions, which reduce demand for coal, particularly after 2030, whereas the CPP has a larger impact before 2030. Although the IEA New Policies Scenario includes the CPP, it is not included in

Comparisons of oil price projections, 2025, 2030, 2035, and 2040 (2015 dollars per barrel) Table CP2. Comparisons of oil price projections, 2025, 2030, 2035, and 2040 (2015 dollars per barrel) Projections

2015

2025

2030

2035

2040

WTI

Brent

WTI

Brent

WTI

Brent

WTI

Brent

WTI

Brent

AEO2016 (Reference case)

48.67

52.32

85.41

91.59

97.06

104.00

112.45

119.64

129.11

136.21

AEO2016 (Low Oil Price case)

48.67

52.32

36.57

43.09

42.38

48.94

53.02

59.23

67.00

72.99

AEO2016 (High Oil Price case)

48.67

52.32

180.49

187.69

197.83

206.75

211.77

220.71

222.27

229.91

AEO2015 (Reference case)

54.58

57.58

88.02

94.34

102.98

109.37

120.34

126.51

140.45

146.26

ArrowHead Economics

58.00

66.00

68.00

69.00

71.00

73.00

75.00

77.00

Strategic Energy & Economic Research (SEER)a

40.40

43.44

45.46

Energy Security Analysis (ESAI)

52.45

80.00

87.10

94.10

48.83

95.41

96.26

95.62

95.15

ICFa

75.61

75.76

Energy Ventures Analysis (EVA)a

64.59

65.84

67.09

IEA (Current Policies Scenario)c

130.00

150.00

OPEC Reference Basketd

88.41

95.00

IHS Global Insight (GI)b

-- = No data reported. a Inflated from 2014 to 2015 dollars using GDP chain-type price index from the AEO2016 Reference case. b Deflated from nominal dollars using IHS Global Insight deflator. c IEA mixed crude oil import prices are based on OECD member country reporting. d OPEC uses a basket of crudes reflecting the mix of the crude markers of its member exporting countries.

U.S. Energy Information Administration | Annual Energy Outlook 2016

CP-3

Alaska Business Monthly | December 2016 www.akbizmag.com

Table CP2 from US Energy Information Administration | Annual Energy Outlook 2016 | eia.gov/aeo

By Molly Rettig & Dustin Madden

The range of oil price projections in both the near term and the long term reflects current market conditions, including low prices due to crude oversupply in the near term and different assumptions about the future of the world economy. The wide range of the projections underscores the inherent uncertainty associated with future crude oil prices. With the exception of Strategic Energy & Economic Research (SEER)—which projects Brent prices remaining between $40/b and $45/b (2015 dollars)—the projections show crude oil prices rising over the entire projection period. On the other hand, the spread of the projections (again with the exception of SEER) is encompassed by the AEO2016 Low and High Oil Price cases, ranging from $49/b to $207/b for Brent in 2030 and from $73/b to $230/b in 2040. However, except for IEA (in 2030 and 2040) and IHSGI (in 2025), all the other projections in this comparison show lower crude oil prices than those in the AEO2016 Reference case for every year of the projection.

Increase Wall System R-Values How can one plan for such an unknown? Let’s look at a couple scenarios. For the sake of comparison, we’ll take a standard 2,000-square-foot house in Fairbanks with 2x6 stud walls insulated with fiberglass batts. This wall system has an Rvalue of 19 and is very common in Alaska. It also has a conventional oil boiler and an electric hot water heater. If heating oil is $2 a gallon, annual heating costs will be approximately $2,500. At $4 a gallon, the costs jump to $5,000. Now take the same house and retrofit it with an additional four inches of EPS foam on the outside of the walls. This wall system has an R-value of 35, nearly twice as much as the first wall. At $2-a-gallon heating oil, it will cost about $1,800 to heat the home each year. At $4 a gallon, it’s closer to $3,500. Either way, adding exterior foam insulation reduces energy costs by about 30 percent each year, though it makes a bigger difference when oil prices are high (saving twice as much each year). Keep in mind these numbers are Fairbanks-specific and would vary based on region, fuel type, ventilation, user behavior, and other factors. In the Anchorage area, for example, energy costs are significantly lower and more stable, so one wouldn’t see the dramatic swings among the different scenarios. Back to the example house—is it worth it to add the foam? Based on current prices, it would cost an estimated $15,000 to retrofit it by adding extra insulation to the walls (again, labor and material costs are specific to Fairbanks). How long will it take to recoup that in energy savings? It depends on the price of energy. If estimates are correct and heating oil returns to $4 a gallon, the payback period is about eleven years, not a bad return on investment for those planning to live in the house long term. But at $2 a gallon, it stretches to twenty-five years, too long for many homeowners. Either way, energy efficiency requires a long view and a careful calculation of costs and expected returns. Small Measures, Big Differences

Fortunately, there are other things homeowners can do to make their homes more efficient regardless of the price of oil. We recommend starting with small measures that can make a big difference without a huge investment. First, air sealing is almost always the best “bang for your buck.” People pay a lot to heat the indoor air: keep it from rushing outside through doors, windows, and cracks in the floor and ceiling. Air sealing includes caulking windows, weather stripping doors, and spray foaming any penetrations in the buildwww.akbizmag.com

It’s easier in many ways to build an efficient house than to retrofit an existing house. For example, building an extra efficient house in Fairbanks will pay back in six years, based on traditional mortgage terms and today’s energy prices. Photo courtesy of Cold Climate Housing Research Center

ing envelope—for example, where pipes and wires enter the house. Additionally, patch holes in ducts through unheated spaces (and make sure those ducts are well insulated). Keep in mind that tightening a house will most likely boost the moisture levels inside; so installing mechanical ventilation may be necessary if it’s not already present. Second, rather than insulating the entire house, focus on the attic or crawlspace. Because hot air rises, most heat is lost through the top of the house, so that’s a good place to start. For a cold roof with an attic, it’s relatively simple to add more insulation to the attic floor. Another option is to add foam to the crawlspace walls, either on the inside (cheaper, but placement is important to avoid moisture problems) or the outside (more expensive, but simpler from a building science perspective).

Consider New Construction

New construction is a different story. When buying everything for the first time, certain efficiency measures may be cost-effective that wouldn’t be for existing homes. For example, it’s less expensive to add extra insulation during construction than during a retrofit, since the walls don’t need to be taken apart. And the end product will likely be better because one can pay attention to details, like air sealing, that make the system perform better as a whole. Let’s say someone is building a house from scratch. An average sized house in Fairbanks built to a higher energy standard will cost an additional $13,000 compared to a conventional house built to the Alaska Housing Finance Corporation’s minimum energy standard. At today’s heating oil prices, that’s a savings of nearly $1,000 each year. While that may not seem cost-effective when paying out of pocket, the numbers change if one is borrowing money. Based on traditional mortgage terms (interest rates, tax deductions, etc.), the energy improvements will pay back in six years. Over thirty years, a homeowner will save almost twice what was invested in the extra insulation. In Anchorage, it would cost roughly

$8,700 more to build an extra-efficient house compared to one built to Alaska Housing Finance Corporation’s minimum energy standard. At today’s natural gas prices, it would not be economical. But remember, the state has poured more than $1 billion into subsidizing oil and gas production in Cook Inlet. Using unsubsidized energy prices (estimated by the Revenue Department to be 22 cents higher than current prices per hundred cubic feet), the extra efficiency measures would save $700 a year, which would save money in the long term. So again, lots of factors to consider. There are other options if investing in the walls isn’t feasible or desirable. For example, good windows are a great investment in a place like Fairbanks. Even at current oil prices, buying triple-pane instead of double-pane windows pays back in less than seven years. Over the life of the window, homeowners will make more than twice their money back in energy savings. In a place like Anchorage, however, it would take twenty-one years for the triplepane windows to pay off at current natural gas prices, which is roughly equal to the life of a window. There are other reasons to buy good windows—like comfort and performance—but the decision should not be driven by economics alone. While housing decisions should be based on economics and the best information at hand, remember—not everything can be measured by payback period alone. Efficiency equals stability. There is a great sense of security in knowing that, no matter what happens to prices in the future, only a small amount of fuel is needed to stay warm through the Alaska winter in an energy efficient home. R Molly Rettig is communications director for the Cold Climate Housing Research Center in Fairbanks. Dustin Madden is a policy researcher at CCHRC who strives to help Alaskans save money through energy efficiency.

December 2016 | Alaska Business Monthly

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Building Alaska

Kathleen Castle Champion of Alaska Construction Academies By Julie Stricker

few years ago, Kathleen Castle noticed a shortage of entry-level workers for residential construction. Castle, who had spent years working with the construction industry, realized that schools were shifting curriculum from classes such as welding to focus on technology. “What seemed to be happening at about that time was they were pulling classes out of schools and even often changing what might have been a welding lab or a carpentry lab, taking all that out and putting in computer labs because this technology was the big deal,” Castle says. Learning technology is important, but Castle was concerned that fewer high school students were being introduced to the idea of construction and associated trades as a career. In addition, many students may not have the means or desire to get a college degree, Castle says. She wanted to give them the opportunity to do something with their hands. You don’t need a college degree to drive a truck at Fort Knox gold mine, for instance. “That’s a very good job,” Castle says. “Our industry has lots of exciting careers that are also high paying. Many of them with good benefits, so you could easily support a family and have the toys that you want, snowmachines, Jet Skis, boats, whatever.”

Statewide Organization

A couple of concerned people in the industry traveled to Juneau and secured a state grant upon which Alaska Construction Academies was built with Castle as executive director. It is a statewide organization with branches in six cities that offer classes for high school students and adults. The academies work directly with such organizations as the Associated General Contractor of Alaska, Anchorage Home Builders Association, Alaska Department of Labor and Workforce Development, and Cook Inlet Tribal Council, among many others. According to labor market data, more 60

Photo courtesy of Fairbanks North Star Borough School District

The Fairbanks North Star Borough School District’s Partners in Education program recently recognized “superhero partners” at a ceremony in Fairbanks: from left, Chad Hutchison, Fairbanks Training Center; Wade Stark, Alaska Works Partnership; Kathleen Castle, Alaska Construction Academies; and Fairbanks North Star Borough School Board President Heidi Haas. Castle accepted an award from the school district recognizing the Alaska Construction Academies as the 2016 Outstanding Career and Technical Education Partner.

than one thousand construction workers are needed in Alaska annually to fill industry jobs and replace retiring workers. Over the past decade, hundreds of people have received training through the academies, giving them opportunities for wellpaying, skilled jobs in construction and related industries.

‘Tireless Advocate’

In early October, Castle was one of the people acknowledged by the Fairbanks North Star Borough School District at a ceremony in “recognition of superhero partners who have made significant investments in student success.” Daniel Domke, the Career and Technical Education Director for the Fairbanks school district, says Castle is deserving of the recognition. Through the Construction Education Foundation, Castle funded about $1.6 million to the Fairbanks school district for construction industry programs, Domke says. “We do after-school introduction to trade courses in conjunction with the three local, but really national, unions,” he says. “At the end of the day, she’s a tireless advocate for students who are moving into high wage, high skill, high-demand occupations so prevalent in the construction industry.” Castle has a foot in both worlds, Domke says. “She’s an incredible advocate for the construction industry in general in Alaska and she’d been involved in that industry for a long time.”

She is also very well connected at the national level with some of the national construction organizations, he says. “She’s very well-connected at the state level with many of the power players, if you will, in industry, in government. So that gives her a very broad spectrum and it gives her a lot of leverage to be able to create programs very rapidly in response to industry needs as well as student needs.”

Key Player

Castle has been a key player in the NCCER certification, an industry-driven program with multiple layers of certifications with students, instructors, and people employed in the trades, both hands-on and at the management level. The focus on the NCCER certification has aligned the district programs and activities to national construction industry standards so that when students come out of high school and go into an apprenticeship or entry-level occupation in the construction fields, they already have a lot of the background and training to make them successful, Domke says. “As new employees or students moving out of high school and into a new career, it adds great value for the employer because now they have kind of a work-ready work force that understands the industry and understands the safety aspects and a bunch of things that make that employee that much more valuable to them,” he says.

Alaska Business Monthly | December 2016 www.akbizmag.com

Adult Focus

Because of budget cuts, Castle says the academies have had to focus more on the adult

classes, which are easier to schedule and which can correlate directly with employer needs. “Ideally, yes, it’s looking at what the community needs are,” she says. “And then of course in Alaska, we’re looking at the community, the region, and the state needs. We know you can have a job on the Slope and still live in Fairbanks.” One popular program in Fairbanks is its welding academy, which is expanding to meet the demand. The district is also adding an introduction to electrical trades, conducted by the IBEW (International Brotherhood of Electrical Workers) and an introduction to the construction trade, which will be taught by the Carpenters Union, Domke says. The courses are held after school at the Fairbanks Pipeline Training Center and the students are trained under union instructions in conjunction with school district instructors. “There’s a very high level of expertise,” he says. “Some of the instructors in the welding academy are some of the most experienced pipeline people in the world. They have been on the ground floor of the pipeline when they were young and they’re recognized globally as industry experts. “That has morphed into a really strong program,” Domke adds. “It’s sought after.”

Last year, the school district had eleven students who went directly from the introduction to trades classes and were selected for the school to apprenticeship program, chosen by the union. They went right into union apprenticeships. “They are up at 6 a.m. and they’re on the job site five or six days a week and they’ve really jumped into the adult world of work with both feet,” he says. “The opportunity is very lucrative because those apprenticeships pay well and they combine continuing education along the apprenticeship journey.” Castle also keeps an ear out for longterm projects, such as a gas pipeline or major gold mine. “We’re going to be doing some training in Bethel because they’ve been awarded funds to build onto the hospital,” Castle says. “It’s going to be a five-year project and it looks like the training that we’re going to do is probably going to be related to the electrical trade. And our hope is that that will be a cohort of people that will get hired by Davis Constructors and then eventually by the hospital because you’re going to need maintenance.” R Journalist Julie Stricker lives near Fairbanks.

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December 2016 | Alaska Business Monthly

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Industry Simulators

Castle also was instrumental in getting eight heavy industry simulators for the Fairbanks school district. The equipment is like a flight simulator, only for heavy equipment. They can be tailored to a specific mine or urban area, depending on the task. “It’s basically like teaching a pilot on a flight simulator,” he says. “It’s very costefficient and it’s much safer and you can do scenarios that you could never replicate in real life. And it allows our high school students to virtually get behind the wheel of a Cat 966 front end loader. Kathleen was just an instrumental player in that.” In deciding which classes to offer in each community, Castle says the academies work with an advisory group made up of local employers, an adult training provider such as Alaska Works Partnership, the school district, and Native corporations. “So ideally, there’s a task force of people that have their fingers out in lots of different parts of the community and they’re going to know: ‘What are the workforce needs?’” Castle says. “Then they decide what is the training they’re going to provide.”

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Building Alaska

AGC of Alaska Awards Construction Industry Members

he Associated General Contractors of Alaska, the state’s largest construction organization, named its top construction contractors, projects, and safety awards winners and recognized individuals at the Association’s annual conference in Anchorage last month.

Hard Hat Award

 Dave Cruz, President of Cruz Companies Alaska, was presented the Hard Hat Award, given annually to an AGC member who has demonstrated exemplary service to the Association, the community, and the industry.

Sustainability in Construction

 Davis Constructors & Engineers, Inc.— Kings Landing at Ship Creek Phase 2

Excellence in Construction Meeting the Challenge of a Job Vertical Construction  Under $5 million: Ahtna Environmental Inc.—Cordova Housing Siding and Interior Renovations  Between $5 million and $15 million: Cornerstone General Contractors, Inc.— West High School/Romig Middle School CTE Renovation and Addition 62

 Over $15 million: UNIT COMPANY— Koliganek K-12 School Transportation, Marine, Heavy, Earthmoving  Under $5 million: QAP—Arctic Boulevard Improvements Phase III  Between $5 million and $15 million: Granite Construction Company—Seward Highway: MP 99-100 Improvements  Over $15 million: Turnagain Marine Construction Corporation—Hoonah Berthing Facility Specialty Contractor  Vertical Construction: Rain Proof Roofing—Shemya Hangar 6  Transportation, Marine, Heavy, Earthmoving: DAMA Industrial LLC— Village of Wainwright Emergency Tank Foundation Repair

Excellence in Safety

 Grand Prize: Kiewit Infrastructure West Co. (KIWC)  Building Division: Davis Constructors & Engineers  Heavy Division: Kiewit Infrastructure West Co. (KIWC)  Highway Division: Brice, Inc.  Specialty Division: Alcan Electrical & Engineering, Inc.  Individual: Sarah Dow, Colaska, Inc.  Individual: Ken Parmenter, Davis Constructors & Engineers

Stan Smith Volunteer of the Year

 Jack Grieco, Alaska USA Insurance Brokers

Associate of the Year

 Senco Alaska Inc.

agcak.org

Alaska Business Monthly | December 2016 www.akbizmag.com

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“Tutka has been doing business with BIA since 2008, they’ve helped us grow our bonding capacity to $7 million. Not only are they there when we need them to produce bid bonds on a short timeframe, they are educating us throughout the year on risk and financial management from a bonding and insurance perspective. The staff is always professional, knowledgeable and responsive ... They truly are a key player on our team and without them we would not have been as successful as we are today. I highly recommend BIA to any small, medium or large company in Alaska.” ~ Amie Sommer, Owner Tutka LLC.

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Turnagain Marine Construction Corporation was awarded the Excellence in Construction Award for Meeting the Challenges of a Job in Transportation, Marine, Heavy, Earthmoving Over $15 million for its Hoonah Berthing Facility. Turnagain Marine Construction was selected via a best-value proposal to design, manage, and construct the Hoonah Berthing Facility in Hoonah. This designbuild project for Icy Strait Point and Huna Totem Corporation required Turnagain to provide a cruise ship berth to accommodate a large array of vessels including the 1,067-foot breakaway class. In partnership with Transpac Marinas, Moffatt & Nichol, and the remainder of the project team, Turnagain Marine Construction delivered this first-class facility on time and on budget. The facility construction included a floating pontoon, eight dolphin structures, 700 feet of pile-supported, vehicle-rated trestle and transfer span, and associated appurtenances.

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December 2016 | Alaska Business Monthly

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Building Alaska Telecommunications Infrastructure In 2016 Verizon spent approximately $1 million on renovating space in the Dimond Mall into their newest Alaska retail location. Photo courtesy of Verizon

Significant investments in vital Alaskan connections By Tasha Anderson

laska telecommunications companies invest significantly in building infrastructure statewide to ensure that Alaskans can communicate—those connections are vital, allowing Alaskans to manage emergencies, healthcare, businesses, and community ties.

Verizon

Verizon entered the Alaska market in 2010 with a survey to determine how best to approach business in the state, which was followed by the company’s initial build out in 2011 and 2012 with a data-only pre-launch in 2013. One year later Verizon completed their launch with eleven stores and ninety employees in Alaska. “Since then we’ve continued to grow,” Verizon’s VP Alaska Ian Yahya says. In 2016 alone Verizon has spent $15 million in acquiring network assets and network growth in Alaska, with plans to continue in64

vesting in the community. In 2015 Verizon has added two new stores and in 2016 converted their kiosk in the Dimond Mall into a flagship store, a renovation that cost more than $1 million, according to Yahya. In total, since Verizon’s entry in 2010, the company has invested $135 million instate. One of their significant investments was their switch building, which took approximately a year and a half to construct. The $35 million Anchorage switch was completed in November 2012. Verizon touts their reliability—Yahya says that in terms of reliability, the switch has two generators in place in case commercial power were to fail, each of which carries half the load of the building, though either is capable of doing so on its own. “We run multiple fiber runs to much of our equipment, so if there’s an incident we have redundancy built in, many times coming in from different physical locations,” he adds. Additionally, all of Verizon’s switch building have “sister switch” locations, so in the event that the building in Alaska were to fail entirely (despite the two generators that can run seven to ten days on approximately 7,200 gallons of fuel stored on sight and a bank of batteries which can run the switch for up to eighteen hours themselves) a Lower 48-based switch could continue to operate Verizon’s Alaska network.

“We built this facility with the highest security specs, and we do the same with our cell sites,” Yahya says. Verizon currently utilizes approximately 175 cell sites in Alaska. Senior Operations Manager Alaska Kyle Gruis says that of those 175 sites, 126 are owned and operated by Verizon and “about 50 more are owned and managed by partners of ours.” Yahya says that 98 percent of Verizon’s cell sites have generators on-site; “The 2 percent that don’t we just physically can’t put them there because they’re either on a rooftop or there’s another reason we can’t connect a generator.” For the 98 percent of sites, each has seven days of back up fuel to power them, “and we have national contracts for priority additional supply of gas if we need it,” Yahya says. All of Verizon’s generators, whether at a cell site or the switch, are tested once weekly to ensure everything works at it should in case of an emergency. Cell sites can be located anywhere from a rooftop to a gravel pit, Gruis says. “Our busiest sites have in excess of five hundred to six hundred customers on them at one time. We watch stuff like that pretty closely.” Verizon often does not own the real estate on which the cell sites are located, so it’s necessary to work closely with what-

Alaska Business Monthly | December 2016 www.akbizmag.com

Your business ceases without backup Internet

BUILDING ALASKA SPECIAL SECTION

ever organization does, which can range from private to state to military entities. The variation in locations and the necessity of working through different processes means that constructing cell sites can take one year or several and can cost anything from $300,000 to $1 million, Gruis says. What remains the same, no matter the facility, is the standard of construction, cleanliness, and organization. “If someone that built or is maintaining this facility becomes unavailable, anyone else in our network team can come in quickly and figure out what they need to do because we label everything to a certain specification,” Yahya says. Gruis adds, “Everybody knows there’s only one way to do it if you’re going to work [at Verizon], and that’s the right way.”

Your business continues with backup Internet

GCI

GCI has been operating in Alaska for more than thirty-five years and to date has thirtyeight retail stores across the state, serving more than two hundred communities. GCI has invested more than $3 billion statewide and in 2011 launched the Terrestrial for Every Rural Region in Alaska (TERRA) project, which provides seventy-two communities and more than forty-nine thousand residents in western Alaska and the Arctic with access to high speed broadband. In 2017 the TERRA project will reach a milestone with the closing of the TERRA ring, which provides a “communications loop” for the system that greatly increases service reliability. “Closing the TERRA ring is a significant project milestone,” says GCI TERRA Project Manager Mark Carlson. “If you have a ring of communication and there is some kind of outage or break in one section, communication can flow in the opposite direction and still reach its destination.” In addition to ringing the TERRA network to increase reliability, GCI provides redundancy to customers by purchasing additional backup communication service on satellites. Additional towers have been constructed this summer in several communities including Buckland, Selawik, St. Michael, Golovin, Elim, White Mountain, and Koyuk. Additionally, GCI is installing a fiber line from St. Michael to Stebbins that will provide high-speed internet to local clinics and schools in these communities in early 2017. According to TERRA Program Manager Rebecca Markley, the TERRA network uses line-of-sight technology with microwave sites located at intervals, usually no more than fifty miles apart. “The placement must be very specific,” says Markley. www.akbizmag.com

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December 2016 | Alaska Business Monthly

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Many of the cell sites GCI employs to provide high speed broadband to more than forty-nine thousand Alaskans are located on mountain tops, requiring helicopters for construction and maintenance activities. Photo courtesy of GCI

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“We often put TERRA sites on the tops of mountains so we can have the highest location to get the clearest line-of-sight to the next repeaters.” The requirements for the location of these cell sites mean that constructing and maintaining the sites is no simple task. Markley says the cost of the sites can vary greatly and includes more than just purchasing or installing equipment. “You can’t really base the cost of the site on the cost of the infrastructure and installation—the cost and effort to maintain these sites is significant,” she says. Transporting the infrastructure can require the use of barges, which are weather dependent. Additionally, there are no roads to the mountain peaks on which the sites are located, and the individual pieces are transported to the mountain top by helicopter. “That includes massive towers, generator shelters, diesel tanks for fuel, and then communication shelters which house the equipment,” Markley explains. And of course, once the site is installed it must be maintained. Helicopters are utilized to fly in fuel annually. “To ensure we have enough fuel to fill the nine thousand gallon tanks, we need to ensure fuel is available locally to the site at the time of refueling. Many communities don’t have the

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Alaska Business Monthly | December 2016 www.akbizmag.com

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A street view of the Alaska Communications Business Technology Center, which provides hightech meeting spaces for businesses and nonprofits at no charge. Photo courtesy of Alaska Communications

Additionally, “GCI is wrapping up Phase I of a two-part project to build a 250-mile fiber line between Coldfoot and Prudhoe. The project should be finished in 2017 and will provide higher connectivity availability and diversity customers. GCI expects to invest about $40 million in the project,” according to Bruce Rein, GCI’s director of long-haul networks.

Alaska Communications

Alaska Communications has invested in a unique structure to better serve the An-

chorage community. After seven months of remodeling what was once the company’s flagship wireless store, in June Alaska Communications opened its Business Technology Center. According to Alaska Communications Senior Vice President, Business Markets Bill Bishop, “The Business Technology Center was built in the spirit of partnership, community, and collaboration. We want to help local organizations realize their opportunities and overcome their challenges through the use of technology. This space is the first of its kind in Alaska

December 2016 | Alaska Business Monthly

BUILDING ALASKA SPECIAL SECTION

volume of fuel we need, so we usually barge it in in advance,” Markley says. Alaska’s notorious changes in daylight also play a factor in building and maintaining remote sites. Helicopters may not be able to fly at night and technicians cannot make complicated tower repairs in the dark. However, GCI is still ready to respond quickly in emergencies. “GCI has dozens of technicians stationed through rural Alaska who are ready to respond at a moment’s notice,” says Hugh Forbes, GCI’s director of rural operations and maintenance. “Pre-positioned crews and equipment in rural hubs makes sense for routine maintenance but also means we can dispatch our technicians quickly for any emergency repairs.” In September GCI announced that it had expanded its 4G LTE footprint into Ketchikan with the completion of three new towers in the Ward Cove, Saw Mill, and Cranberry Road areas, completing a ten-site cellular coverage area. A new cell tower in Anchorage was announced at the same time which will improve services in Kincaid Park. “Park users may notice the dramatically improved service but probably won’t notice the tower—it is designed to resemble an evergreen tree,” says Heather Handyside, GCI’s director of corporate communications.

BUILDING ALASKA SPECIAL SECTION

The Business Technology Center, owned and operated by Alaska Communications, houses five meeting rooms that can be utilized by the Alaska business and nonprofit community. Photos courtesy of Alaska Communications

and allows customers and the public to experience the latest technology and cloudbased solutions.” The center addresses an issue that many organizations face: a shortage of meeting space and lack of IT expertise. The center provides both at no charge to businesses and nonprofit groups through its five meeting rooms, all of which are equipped with voice over internet phones, Wi-Fi, LCD display screens, and connectivity for nearly every device. Bishop says, “The center can be used to collaborate with IT specialists, develop solutions, experience hands-on demonstrations, or conduct trainings, seminars, and private events.” Alaska Communications is also investing in infrastructure developments outside of Anchorage: “In 2015, we acquired a North Slope fiber network from ConocoPhillips in partnership with Quintillion Holdings. This investment means our state’s oil and gas industry can now have reliable, highspeed broadband, giving them access to the latest technology applications, enabling them to be more efficient, reduce operating costs, and increase safety,” Bishop says. R Tasha Anderson is an Associate Editor for Alaska Business Monthly.

Alaska Business Monthly | December 2016 www.akbizmag.com

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Building Alaska

Healthcare Facilities Grow in Alaska

Expansions, remodels, and new construction By Rindi White

undreds of millions of dollars in construction spending is being invested in healthcare facilities around the state, most of it in Anchorage and the Mat-Su, though a new dental facility was recently completed in Dillingham.

Dillingham Home to New Dental Facility Bristol Bay Area Health Corporation, or BBAHC, in September opened doors to a new, state-of-the-art dental health facility and administrative complex in Dillingham. The facility is located on the grounds of the Kanakanak Hospital and will serve the region. The dental clinic project can be attributed to BBAHC Chief Operating Officer Lecia Scotford, MD, as well as her talented projects department team. The project took two years from beginning to end. The business plan was created during the summer of 2014 and was approved that fall. The team broke ground in June 2015. The building was completed and operational in September 2016. The building design was a partnership between BBAHC, architectural firm Livingston 70

Hundreds gather outside the Bristol Bay Area Health Corporationâ&#x20AC;&#x2122;s new dental health facility in Dillingham to celebrate the opening of its doors, above. The new facility replaces the previous clinic, owned by the Indian Health Service and operated by BBAHC, which was split between Kanakanak Hospital and a small annex building on the same grounds, left. Photos by Brian Adams

Sloan, and its engineering consultant teams as well as initial assistance from the Alaska Department of Environmental Conservation. The 15,531-square-foot, two-story building meets the US Green Building Councilâ&#x20AC;&#x2122;s Leadership in Energy and Environmental Design standards, meaning it uses less water and energy in order to reduce greenhouse gas emissions. The building insulation exceeds design requirements for the area and is complete with energy efficient windows. The foundation is built to withstand a 9.2-magnitude earthquake with minimal damage. The first floor is entirely for dental services. The clinic is ultramodern, complete with hightech equipment and twelve brand new operatories, up from seven chairs that were previ-

ously divided between the dental annex and an extra room in the Kanakanak Hospital. The second floor is occupied by administrative support staff, including a business office, finance department, and an area for medical records.

Alaska Regional Hospital Renovation Alaska Regional Hospital in Anchorage got a $70 million capital grant from HCA, its parent company, in 2014. The money paid for a complete facelift for the seven-floor, nearly 330,000-square-foot building. Tina Miller, chief operating officer at Alaska Regional, says no beds were added to the facility during this upgrade, but the facility will feel refreshed, have more efficient features such as new boilers and generators, and has

Alaska Business Monthly | December 2016 www.akbizmag.com

Photo by Brian Adams

new equipment to better serve its customers. Much of the money went toward new boilers, air-handling units, three generators, and a twenty-thousand-gallon fuel tank, Miller says, “so we have redundancy in the case of an emergency or power outage.” Making infrastructure repairs to a busy hospital is a challenge, she says, but it was necessary both to be compatible with new industry standards for backup power and because some of the machinery was outdated and in need of replacement. “We often refer to it as making repairs on your car while it’s going down the road— and still maintaining the safety of those individuals riding in the vehicles,” she says. Power must be switched over to test generators, which is possibly the most difficult aspect of the construction job, considering many patients are on respirators or monitors that are connected to power. Miller says employees and administration pick a time of day that is well staffed and generally calm to test or connect the new equipment. In addition to the infrastructure, Alaska Regional made significant upgrades to its Women’s unit, which includes the labor and delivery, postpartum, and neonatal intensive care units. “We did all the nurse’s stations, flooring patient rooms, all the furniture, some of the equipment, and we added the kingsized Tempur-Pedic® beds [in the birthing recovery unit],” she says. The hospital completed the family birth center earlier this year and was preparing to open its newly renovated medical oncology unit in early November, with private rooms and updated hallways and waiting spaces. www.akbizmag.com

Now, the work is focused on the operating rooms, recovery area, and pre-operating area. “We have continued to invest in new equipment, including a replacement MRI and a replacement mammography machine,” Miller says. “We are also pending funding for reno-

vation for our fourth- and fifth-floor spaces.” Contractors who specialize in hospital equipment largely did the equipment and infrastructure upgrades, Miller says. National construction contractor Layton Construction Company completed the emergency

December 2016 | Alaska Business Monthly

BUILDING ALASKA SPECIAL SECTION

BBAHC President and CEO Robert Clark and board members surround board Chair H. Sally Smith and First Vice Chair Mark E. Angasan as they cut the ceremonial ribbon, signifying the official opening of the new dental health facility in Dillingham.

BUILDING ALASKA SPECIAL SECTION

Photos by Chris Arend/ Courtesy of Alaska Regional Hospital

Above, Alaska Regional Hospital’s Family Birth Center has been renovated and upgraded with king-sized beds in the postpartum rooms. Right, Alaska Regional Hospital’s newly renovated lobby area, with new digital signage for wayfinding.

unit and seventh-floor orthopedic and spine unit renovations, as well as the family birth center. Roger Hickel Contracting Inc. was the general contractor for the medical/oncology unit and the common area and hallway upgrades. Additional local contractors who worked on the hospital’s extensive renovation include KC Construction, Superior Plumbing & Heating, and Haakenson Electric.

Providence Alaska Medical Center Expansion Providence Alaska Medical Center is adding ten new pediatric emergency room beds and three general-use ER beds, part of a $13.9 million project aimed at decreasing emergency room wait times and matching the hospital’s capacity with volume and demand, says Richard Mandsager, MD, chief executive of Providence Alaska. Providence Alaska Medical Center currently has thirty-seven emergency rooms, and this project will bring the number to fifty. The project will enlarge the emergency department by 2,728 square feet. “On a busy evening, we may see 225 people in a twenty-four-hour time period. There will generally be seven people in hallway beds,” he says. Mandsager says the project should make the need for patients awaiting treatment an infrequent, instead of daily, event. “I would expect that it could still happen late in flu season, but on a regular night, it shouldn’t happen anymore,” he says. The renovations target children, and Mandsager says the goal is to have fewer children sitting in the waiting room. They’ll be taken to exam rooms more quickly, he 72

says, and the rooms will be geared toward children. “Having an emergency treatment area for children will help reduce anxiety for children and curtail stress parents feel when having to visit an emergency room,” Mandsager says in a press release about the renovations. The treatment area will include a fulltime child life specialist on staff, a move recommended by the American Society on Pediatrics. The specialist helps children and parents understand and cope with illnesses and injuries. The remaining three rooms are for general use in the department, says Robert Honeycutt. Two of the rooms will be trauma rooms, he says. The hospital currently has two trauma rooms, but one is usually unavailable for trauma use because of the overall volume of patients in the ER department. A trauma room is nearly double the size of the typical ER room, with enough room to accommodate five to ten adults and equipment to do more complex procedures. Standards for trauma centers require that a second room is always available for use, Honeycutt says. Providence Alaska Medical Center received its Certificate of Need to complete the expansion in May. Renovations are in progress and are expected to be complete in early 2018. Davis Constructors & Engineers Inc. is the general contractor on the project.

Four Projects on Alaska Native Health Campus Three new buildings and a significant renovation to Alaska Native Tribal Health Consortium’s critical care unit are either in

progress or soon will be. The projects include a 202-bed patient housing facility for Alaska Native Medical Center, or ANMC, patients who travel from rural Alaska to Anchorage for care. Sixty percent of the hospital’s patients make that trip, says Alaska Native Tribal Health Consortium (ANTHC) Public Relations Director Michelle Weston. The top floor will be the state’s first Ronald McDonald House in Alaska for pediatric patients and their families and patients with high-risk pregnancies, Weston says. The 105,000-square-foot facility will include a sky-bridge to ANMC. Neeser Construction is the general contractor on the project, which is scheduled to open this month. A 52,000-square-foot, three-story childcare and education center will get under way in 2017, with a projected opening in July 2018. The general contractor had not yet been selected at press time. RPKA/McCool Carlson Green is the architect/engineering team working on the building structure. The facility will house a child care center to support employees of ANTHC and will also serve as a training facility to support the ANTHC health training and education programs for the Community Health Aide program, the nationally recognized Dental Health Aide Therapist program, the statewide Behavioral Health Aide program, and nursing and medical continuing education. The third new building planned for the ANMC campus is a 112,400-square-foot, five-story Children’s Medical Building owned by Southcentral Foundation. The design process began in 2016 and the facility is expected to be open in winter 2018.

Alaska Business Monthly | December 2016 www.akbizmag.com

New Mat-Su Urgent Care Facility Long the growth center of Mat-Su, the Knik-Goose Bay Road and Settlers Bay area has grown exponentially in the past two decades. Residential and commercial construction company Spinell Homes built many of the houses in the Settlers Bay community and owns a few other commercial enterprises in the community.

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Photo by Chris Arend/ Courtesy of Alaska Regional Hospital

Alaska Regional Hospital’s recent renovation included creating an entire floor of the hospital for Orthopedic & Spine Center patients, including a teaching classroom for joint academy patients, all renovated rooms, and nursing unit stations.

Now, the community has its own urgent care facility, also built by Spinell Homes. Project manager Sam Brown says the 7,310-square-foot facility was completed in late October—ready to open in the winter. The clinic will be operated by Mat-Su Regional Medical Center.

Mat-Su Medical Offices a Booming Area of Construction Valley construction contractor Howdie Inc. has been the Valley’s go-to healthcare facility contractor for decades. President and Owner Todd Nugent says the company started focusing on medical in the 1980s.

December 2016 | Alaska Business Monthly

BUILDING ALASKA SPECIAL SECTION

Neeser is the builder on this design/ build project and Kumin Associates Inc. is the design firm. According to Kumin, the new facility will include thirty-two chairs for pediatric dental care, along with OB/ GYN, pediatric and neuro development, and behavioral health services. The building will also include dental teaching classrooms, conference rooms, and numerous support and administrative services. The project also includes a 259,000-squarefoot parking garage, connected to the clinic via a sky bridge, according to Kumin. The final project on the ANMC campus is the 4,752-square-foot addition to ANTHC’s Critical Care Unit. The project will ultimately add six new Critical Care Unit rooms and refresh remaining Critical Care Unit rooms. Construction is projected to start in January 2017 and be completed by March 2018.

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Today, Nugent is busy at a handful of medical office projects. Howdie Inc. is the contractor building a 11,000-square-foot medical office building housing an Urgent Care and Family Practice in downtown Palmer on Evergreen Avenue. Owned by Palmer Clinic LLC, the building will be leased to Mat-Su Regional Medical Center, Nugent says. A second building, just under 4,000 square feet, is being built on South Alaska Street. That building will house Palmer Family Medicine, a medical practice already operating in Palmer. Near Wasilla Lake off Seward Meridian Parkway in Meridian Park, several new buildings are going up, Nugent says. The land, developed and owned by N&S Investments—a company of which Howdie Inc. founder Howard Nugent is part-owner—is currently home to Pediatric Dentistry of Alaska, Capstone Urgent Care, Capstone Family Medicine, Capstone Eye Clinic, Algone Pain Clinic, Adonai Diabetes and Endocrinology, and Ptarmigan Pediatrics. “The concept was to make it a medical park and that is what it became,” Nugent says. More is on the way, he says. Nearly complete, the 38,500-square-foot Meridian Park Medical Office building will house Alaska Foot and Ankle and the relocated Algone Pain Clinic, as well as a new Capstone Pharmacy. The Surgery Center of Wasilla, an ambulatory surgery center, will also relocate to that building. Nugent says the building will be complete and ready to open in early 2017. Meridian Park Dental, a new 10,000-squarefoot building that will house an oral surgeon, an orthodontist, and a general dentist will also open in early 2017, he says. Meridian Park North, a two-story, 27,500-square-foot building that will house Generation’s Medical Center, medical practice specializing in obstetrics, gynecology, and family practice, will share that building with expanded pediatric services. The building is set to open in July 2017. Across Seward Meridian Parkway from the Meridian Park buildings is another group of medical offices. The Northern Edge Center, a 12,500-square-foot building, is being added there. Nugent says that building is anchored and owned by Northern Edge Physical Therapy, with the other half of the building currently up for lease. That building is expected to open in June 2017, he says. Howdie Inc. is the largest medical contractor in the Valley, Nugent says; medical work is currently about 65 percent of the company’s business, by value. The company primarily works between Eagle River and Talkeetna— it supports several healthcare organizations and constructed the new Providence Alaska medical buildings that were built in Eagle River and Mat-Su, he says. 74

Mike Doyle Photo/Courtesy of Southcentral Foundation

Southcentral Foundation Children’s Medical Building on the Alaska Native Health Campus in Anchorage as the framework was going up in October.

“Our experience allows us to stay one of the front-runners in the Mat-Su Valley,” he says. “We’re the go-to firm for medical office development and construction.” Building medical offices is a little different than typical commercial construction, Nugent says. “Medical has a lot more complexity than other types of construction,” he says. The basics—function, fit, and finish—have to be done precisely so delicate equipment can fit and function properly within the building. Working in that precise environment makes his company more skilled all around. “It forces you to have more attention to detail,” he says.

Senior Skilled Nursing Facilities Being Considered Two roughly $30 million projects are working their way through the state’s Certificate of Need process, the end result of which will ultimately be a greater number of skilled nursing beds for seniors in Mat-Su. Mat-Su will likely be home to at least one new skilled nursing facility by 2018 and could be home to as many as three. Depending on how the state Certificate of Need process works out, Howdie Inc. could be building two of the new facilities. Two companies, Maple Spring, a Utahbased skilled nursing care provider, and Idaho-based Spring Creek Enterprise, have both submitted Certificates of Need to provide more skilled nursing beds in Mat-Su. Currently, the Valley has no senior skilled

nursing beds for seniors who need rehabilitation after a hospital release or who may need other medically supervised services. Mat-Su, where many seniors live or have moved, has 245 assisted living beds and 26 beds geared toward dementia and Alzheimer’s patients, according to a 2011 report by the McDowell Group, prepared for a collaboration of groups including The Alaska Mental Health Trust Authority; the Denali Commission; the Mat-Su Health Foundation; the Rasmuson Foundation; and United Way of Mat-Su. The Valley has no hospice beds for patients going through the end of life and is behind in all senior service need projections at the time of the report. Maple Springs proposes building two skilled nursing facilities, one in Palmer and one in Wasilla, each with a 60-bed skilled nursing facility, 15 units for memory care, and assisted living beds in each (50 in Wasilla, 35 in Palmer). The Wasilla facility would also house a 10-bed Hospice House. If that project goes through, Howdie, Inc. will be the contractor. The two facilities would have a projected cost of around $36 million. Spring Creek proposes a skilled-nursing facility to be built near Mat-Su Regional Medical Center, called Mat-Su Colony. The nearly 95,000-square-foot facility would have 104 beds and the projected cost is about $20 million. R Freelance journalist Rindi White lives in Palmer.

Alaska Business Monthly | December 2016 www.akbizmag.com

SPECIAL SECTION

Building Alaska

Winter Construction Round-Up Contractors busy around the state Compiled by Susan Harrington

ereâ&#x20AC;&#x2122;s a sampling of construction projects around Alaska from Ketchikan to Deadhorse and back to Anchorage. Some were recently started or completed and many are ongoing.

Ketchikan

The $4.1 million Ketchikan North Tongass Highway Illumination Upgrades project will provide five miles of highway lighting in Ketchikan. The Alaska Department of Transportation & Public Facilities project started in October. This Highway Safety Improvement Project designed by Stantec will install 105 LED highway lights along five miles of the North Tongass Highway. A major challenge to be overcome is the placement of light pole foundations where bedrock is shallow and prevalent. Swanson General Contractors is handling the installation, which is scheduled for completion in August 2017.

Dutch Harbor Turnagain Marine Construction in November was completing the Light Cargo Dock Expansion in Dutch Harbor for the City of Unalaska. The $2.55 million project, started in August, consisted of a new dock utilizing an open cell design by PND Engineers. The new dock created roughly 300 feet of usable dock space. There were roughly 5,500 cubic yards of back fill and approximately 600 cubic yards of concrete poured. Turnagain Marine Construction completed the Light Cargo Dock Expansion project in Dutch Harbor for the City of Unalaska in November. Photo courtesy of Turnagain Marine Construction

Photo courtesy of Kiewit

Kiewit completed the St. Paul Breakwater Repair and Maintenance project in August.

Pilot Station

In October, Brice Incorporated, a subsidiary of Calista Corporation, completed the Pilot Station Power and Bulk Fuel Upgrades project for Alaska Village Electric Cooperative, City of Pilot Station, and Pilot Station Corporation. The project, started in July, consisted of the construction of three new gravel pads for AVEC, City, and Corporation tank farms to be installed. In August, Brice began work on the Pilot Station Airport Relocation for the Alaska Department of Transportation and Public Facilities. Construction of a brand new 4,600-foot runway, including 2.7 miles of ac-

cess road to reach the airportâ&#x20AC;&#x2122;s new location, is slated for completion in November 2017.

St. George

In the Pribilof Islands, Brice completed St. George Harbor Breakwater Repair for the City of St. George. The project repaired an approximately 250-foot section of breakwater damaged in December of 2015 with 4,800 tons of armor rock. The project was started August 1 and was completed September 4.

St. Paul

In August, Kiewit completed the $19.1 million St. Paul Breakwater Repair and Maintenance Dredging project for the US Army Corps of Engineers. The Corps was the designer on the project that including deconstruction and reconstruction of detached breakwater, extensive barging operations, and dredging of 100,000 cubic yards of material from three different locations in the small boat harbor at St. Paul. The dredging material removed from the project footprint was disposed of upland. Due to the remoteness of the project, materials and equipment had to be barged to St. Paul Island including mobilization and demobilization from Seattle, transport of 13,800 tons of armor stone from Anacortes, Washington, and 14,000 tons of armor stone and scour rock from Kodiak. Kiewit started the project May 20 and coordinated daily

Alaska Business Monthly | December 2016 www.akbizmag.com

BUILDING ALASKA SPECIAL SECTION

Defense Spending Set to Explode in 2017 $648.2 million slated for award in FY 2017-18

he US Army Corps of EngineersAlaska District has $538.2 million in ten projects slated for fiscal year 2017, which began October 1. The Corps is planning another ten projects worth more than $110 million for fiscal year 2018, which begins October 1, 2017. No projects have been awarded yet. The first project listed below is in source selection and is scheduled for award in January 2017.

SOURCE: US Army Corps of Engineers-Alaska District

Military Construction Fiscal Year 2017—Eight projects at $373.6 million  Unmanned Aircraft System hangar: $49 million, Fort Wainwright  F35A hangar propulsion MX dispatch: $44.9, Eielson Air Force Base  F35A ADAL Field Training Detachment: $22.1 million, Eielson Air Force Base  F35A 16-bay weather shelter squadron No. 1: $79.5, Eielson Air Force Base  F35A hangar/squadron operations/ Aircraft Maintenance Unit squadron No. 2: $42.7 million, Eielson Air Force Base  F35A missile maintenance facility: $12.8 million, Eielson Air Force Base  F35A earth covered magazines: $11.3 million, Eielson Air Force Base  F35A weather shelters squadron No. 2: $82.3 million, Eielson Air Force Base  ADAL Airborne Warning and Control System hangar: $29 million, Joint Base Elmendorf-Richardson Fiscal Year 2018—Ten projects at more than $110 million  Anticipating eight military construction projects and at least two operations and maintenance Air Force projects with a total of more than $110 million

Missile Defense Agency FY2017—Two projects at $164.6 million  In-Flight Interceptor Communications System Data Terminals switch gear: $9.6 million, Fort Greely  Missile Defense Agency long-range discrimination radar system complex: $155 million, Clear Air Force Station R www.akbizmag.com

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BUILDING ALASKA SPECIAL SECTION

Construction is ongoing at the new Kwethluk K-12 School.

with fishing boats coming in and out of the harbor to ensure impacts were minimal. In addition, St. Paul is home to the largest population of northern fur seal, and Kiewit employed two marine mammal monitors during all daylight hours of in-water work throughout the project and instructed truckers to watch carefully for seals as they would regularly appear on the roads in town.

Photo courtesy of Stantec

Kwethluk

Kwethluk’s new $32.8 million, 48,500-squarefoot Kwethluk K-12 School for the Lower Kuskokwim School District was started in fall 2015. Bethel Services Inc. continues construction on the new two-story K-12 school, which is scheduled to be ready in autumn 2017. Stantec provided full architectural and engineering design services on the replacement school, which sits on driven piles that put the first floor nearly 11 feet above ground and provide separation from potential flooding in the community.

Nightmute

Work started this spring on the $30 million, 30,000-square-foot Stantec-designed Nightmute K-12 Renovation/Addition in Nightmute for the Lower Kuskokwim School District. In early November, UIC Construction LLC was waiting for consis-

Front view of the Nightmute K-12 School Renovation/ Addition. Rendering courtesy of Stantec

tent freezing temperatures to begin the wintertime thermopile installation for the new school, which was designed by the multidiscipline team from Stantec. Work will be ongoing through completion in spring 2019.

Dalton Highway

Brice completed the Dalton Highway MP 401-414 Reconstruction project south of Deadhorse in August. The project, started in late April, consisted of reconstruction of a 14-mile section on the Dalton Highway with installation of new foam board for the Alaska Department of Transportation & Public Facilities.

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Exterior of the Fort Wainwright Warm Storage Hangar built by UNIT COMPANY in Fairbanks.

Fort Wainwright The Warm Storage Hangar was designed and is being constructed to support the new Aviation Task Force at Fort Wainwright while incorporating the historical architectural features of the Fort Wainwright Ladd Field National Historic Landmark District. UNIT COMPANY is the general contractor. The project site was developed for efficiency and to convey a sense of unity with the adjacent buildings and with the installation.

The 56,660-square-foot hangar includes a concrete foundation and column-free space for the capacity of seven rotary wing aircraft in a climate controlled, enclosed shelter. The structural system for the building consists of steel-framed, steel bowstring trusses spanning 212 feet, special concentric steel braced frames, and reinforced concrete foundations over deep dynamic compacted subgrade. Other building features include an energy monitoring

Photo courtesy of UNIT COMPANY

UNIT COMPANY used deep dynamic compaction to compact the soil sufficiently to hold the structure. The building footprint was excavated out and then a crane was used to drop a fifty-ton headache ball from a height of fifty feet in a ten-foot grid throughout the entire building footprint.

and control system, fire protection and alarm systems, and building information systems. Supporting facilities include utili-

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Photo courtesy of Davis Constructors & Engineers

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ties; electric service; exterior and security lighting; fire protection and alarm systems; security fencing and gates; water; gas; sewer; oil water separators; storm drainage and site improvements such as paving, walks, curbs, and gutters; and compliance with UFC 4-010-01 DoD Antiterrorism Force Protection Measures. The Warm Storage Hangar is a clearspan, high-bay open structure, featuring a high-performance thermal envelope for the Arctic environment that includes R-60 walls and R-90 roof insulation values. The historic character of Ladd Airfield is reinforced by the barrel vaulted roof form and symmetrical proportions. The helicopter storage areas are covered by an HEF fire suppression system. The hangar is equipped with a sliding panel hangar door on a heated in-floor rail system. In addition, the aircraft pavement floor is a heated slab that provides a comfortable interior environment during the cold arctic winters. This hangar is a durable fifty-plus year structure that requires minimal maintenance. The hangar is designed to facilitate light maintenance, refueling, and armament operations while mitigating the impacts of sub-Arctic weather on rotary aircraft, aircraft support equipment, and personnel.

The University of Alaska Fairbanks Power Plant is being constructed by Haskell Corporation/Davis Constructors JV.

Alaska Business Monthly | December 2016 www.akbizmag.com

Talkeetna

Near Talkeetna, Kiewit recently completed a $21.1 million Parks Highway Grade Separa-

Photo courtesy of Kiewit

Kiewit recently completed the Parks Highway Grade Separation project near Talkeetna.

tions project for the Alaska Department of Transportation & Public Facilities. The project, designed by PND Engineers, started in July 2015 and included the construction of two dual track capacity grade separations over the Alaska Railroad tracks as part of the Highway Safety Improvement Program. At-grade crossings were replaced with grade

separated crossings at Montana Creek Crossing (MP92), a 4,400-foot realignment, and Sunshine Crossing (MP100), a 3,700foot realignment. The single-bulb tee bridges raised the road about 30 feet above grade and the new mainline alignment for both crossings is adjacent to the existing highway. The project required 824,000 tons of borrow.

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Fairbanks

Davis Constructors & Engineers is the general contractor on the UAF Engineering Building in Fairbanks designed by ECI/Hyer Architects. The UAF Engineering Facility is a fourstory, 116,900-gross-square-foot building on the perimeter edge of Cornerstone Plaza. In response to the increase in enrollment and graduation of engineers, UAF began working on a new education and research facility. It will create cutting-edge laboratories and studio work spaces connected to informal collaboration space in an effort to spark dialogue and exchanges between students. The connecting lobby between Engineering, Bunnell, and Duckering is open as are new entrances to Schaible Auditorium. Due to additional bond funding, the Davis staff has re-mobilized. The project should be substantially complete in fall 2017 for spring 2018 occupancy by students. Davis Constructors is working on the UAF Power Plant as HaskellDavis JV. Design Alaska is the architect on the UA project. When complete in June 2018, two 140,000 pounds per hour circulating fluidized bed boilers and a 17 megawatt steam turbine will heat the UAF campus in Fairbanks.

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Around Anchorage

In May, Mass Excavation, Inc. started the $6.9 million Merrill Field Taxiway Q project for the Municipality of Anchorage. The dynamic compaction and new paved asphalt at Taxiway Quebec has been completed and the taxiway is back to full operation. Additional areas of dynamic compaction are ongoing and will continue in 2017. Paving will complete the project in June 2017. Completion of the Body Renew Alaska Tenant Improvement project at 7710 Grass Creek Road in Anchorage near the intersection of Muldoon Road and Debarr Road for owner Brian Horschel was scheduled for this month on the two-story, 14,000-square-foot project. The project was started in June. Stantec designed the new Body Renew Alaska East club, which includes locker rooms, cardio and weight rooms, four large group workout rooms, and space for child care. The general contractor is Alborn Construction, Inc. Davis Constructors continued work as the general contractor on the Alaska Gallery at the Anchorage Museum. McCool Carlson Green is the architect. The 12,000-square-foot Alaska exhibition will tell the story of Alaska thematically, representing the essential aspects of life Alaska, both today and throughout its history. The Anchorage Museum Association project is

expected to be completed in March 2017. Davis Constructors is the general contractor on the Anchorage Museum Expansion project; McCool Carlson Green is the architect. The Museum is constructing permanent galleries for the Art of the North exhibition. An approximately 25,000-square-foot wing is to be constructed over the existing first floor and basement at the north side of the Museum. Additional areas will be constructed at street level on the north and east sides of the Museum. In early November steel erection was finished; exterior finishes are ongoing. The project was started in February and is scheduled for completion in June 2017. Davis Constructors is the general contractor on the Anchorage School District’s $13 million Turnagain Elementary School Renewal. Nvision Architecture is the project architect. The project was started in May and completion is expected in August 2017. Turnagain Elementary School is currently a 54,940-square-foot school serving around 435 students. The existing building will be improved to serve for at least the next twenty years. The proposed plan is to increase the building size by approximately 1,240 square feet. The site will be corrected to provide pedestrian/vehicle separation as well as positive separation of bus traffic from parent traffic. The main entry of the school will be relo-

cated, bringing it up to current building code. Watterson Construction has a few projects underway in Anchorage this winter including Kendall—Audi, VW, Porsche at Dowling and Old Seward and the Diamond Animal Clinic on Tudor Road. In late October the company was working on the Kendall foundation and prepping the Diamond Animal Clinic site for an early spring 2017 start. Watterson is also working on a project for H & R Block on Huffman Road. Work began in November 2016 for the Municipality of Anchorage’s $3.2 million, three-quarter of a mile 100th Avenue Extension, Phase IIA – Minnesota Drive to C Street project. This initial phase of the 100th Avenue connection between Minnesota Drive and C Street will consist of a “surcharge” fill. Granite Construction will place large quantities of gravel material across the North Klatt Bog to start the peat consolidation process for the future road alignment. The surcharge process will take four to six months after the fill has been placed to the required elevation. Stantec continues to provide engineering services on the project that is slated for completion in June 2017. Chugach Electric Association expects the Hane Substation to be operational by the end of this year. The $10.9 million project on the Anchorage Hillside at O’Malley Road

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Photos courtesy of Chugach Electric Association

and Hane Street was started in June 2015. Alaska Line Builders was the prime contractor on the project that sits on just over two acres. More than 180,000 pounds of steel was used, more than 25,000 feet of cable was installed, and more than 25,000 tons of dirt was removed from the site to complete the substation. The construction phase is complete twenty-five years after system studies identified it in a plan to meet projected

load growth and improve reliability. Hane Substation is unique in that it is the second Chugach distribution substation fed directly from the 138kV transmission system. The area fed by the Hane Substation extends to Abbott Road on the north, Huffman Road on the south, west to the New Seward Highway, and east to Elmore Road. Approximately thirty commercial customers, including Hanshew Middle School, and

three thousand residential customers are to be fed by this substation while relieving heavily loaded substations in the vicinity. It is configured to supply 7MVA under winter peak loading while retaining 9MVA of winter reserve capacity that will enable it to back up portions of the surrounding substations should a transmission line or substation transformer trip out (MW values are typically 96 to 98 percent of the MVA values). R

Proudly providing highly skilled manpower to mechanical contractors and bringing projects in ahead of schedule and under budget, since 1938.

ÂŠKen Graham Photography

United Association Plumbers & Steamfitters Union Local 367 www.akbizmag.com

Learn more about UA Local 367 and the mechanical contractors we work with by visiting www.ualocal367.org and www.amcaanc.com December 2016 | Alaska Business Monthly

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Chugach Electric Associationâ&#x20AC;&#x2122;s Hane Substation ribbon cutting ceremony, from left: board members Sisi Cooper, Susan Reeves, and Harry Crawford; Chugach CEO Lee Thibert; board chair Janet Reiser; and Transmission & Substation Engineering Senior Manager Jon Sinclair.

RIGHT MOVES REAP

Colleen Fisk is REAP’s new Energy Education Director. She implements the AK EnergySmart and Wind for Schools curriculum. She graduated from University of Maryland, College Park in 2010 with a degree in Animal Science. Fisk She moved back to Alaska and earned her Master of Education in Secondary Education from the University of Alaska Fairbanks in 2012. Fisk worked as an educator in the Mat-Su School district for several years. Henry Hundt is an Energy Conser vation Fellow supporting REAP staff on a variety of projects while also completing a Sustainable Energy Occupation Endorsement from UAF Bristol Bay. Previous to REAP, Hundt spent Hundt a year working with local nonprofits in Anchorage studying mental health challenges that face young Alaskans and developing programming around the new information. Hundt has a BA in the Humanities from Cornell College, which led him to work in marketing and education, where he gained experience developing curriculum and creating collateral for a wide variety of products.

AGDC Board

Governor Bill Walker announced three appointments to the Alaska Gasline Development Corporation Board of Directors. David Wight resides in Anchorage and holds a BS in Petroleum Engineering from Texas Tech University. Wight served as president and CEO of the Alyeska Pipeline Service Company from Wight 2000 to 2006. Prior to that he was the president and chairman of BP Amoco Energy Company Trinidad and Tobago from 1992 to 2000, playing an integral role in the development and construction of an LNG facility in Trinidad. Warren Christian of North Pole is the current President of Doyon Associated LLC, which specializes in arctic pipeline construction and associated infrastructure. Previously the President and General Manager of ASRC Energy Services’

Houston Contracting Company, he brings more than thirty years of experience in the construction and oilfield services industries on the North Slope and across Alaska. Hugh Short was first appointed to the AGDC Board in February 2015. Christian Short has been the President and CEO of PT Capital since 2012. Prior to that, he served as President/CEO and VP of Alaska Growth Capital, and VP of the Yukon-Kuskokwim Health Corporation. Short previously served as Chairman of the AIDEA Board of Directors. He Short received a BA in Political Science from UAA in 1997 and an MS in Organizational Development from Pepperdine University in 2007.

Arctic Slope Telephone Association Cooperative

Jens Laipenieks, who joined ASTAC in 2010 as the manager of Sales and Business Development and was subsequently promoted to Director of Operations, has taken on the role of CEO. Laipenieks, fifty, has more than Laipenieks twenty-two years of Alaska telecommunications industry experience spanning from finance to product management and most recently has focused on streamlining ASTAC’s operations as well as expanding its business.

Katmai National Park

Mark Sturm, a career natural resource manager, will be the next Superintendent at Katmai National Park and Preserve. His prior work includes included oversight of resource management at Organ Sturm Pipe Cactus National Monument in Arizona, as well as work at Assateague Island National Seashore in Maryland, as a forestry consultant in upstate New York, and research assistant at Oregon State University and the Pacific States Marine Fisheries Commission in Oregon. Sturm earned a Master of Science degree in Wildlife Biology and Management from State University of New York, and Bachelor of Science degrees from Virginia Tech.

SEARHC

SouthEast Alaska Regional Health Consortium (SEARHC) Mt. Edgecumbe Hospital is pleased to welcome Speech Therapist, Suzan Hess, MS, CCC-SLP, and Occupational Therapist, Jamilee Adams, MS, OTR/L, as full-time providers. Hess provides speech and language services for SEARHC patients in both inpatient and outpatient settings. She provides therapy that includes help with feeding and swallowing, stroke rehabilitation, and other speech and language Hess disorders. Adams works with patients to improve or develop skills that allow day-today independence. For an adult, those skills include areas of self-care, taking care of one’s home, leisure, and work. For children, they may include playing, Adams hand washing, drawing, and using scissors.

First National Bank Alaska

First National Bank Alaska recently appointed two new loan officers and announced the arrival of a new mortgage loan originator and a transition resulting in a new branch manager at the Main Branch in downtown Anchorage. Mortgage Loan Originators Ryane Brougham and Amanda Herndon were appointed Loan Brougham Officers. Both bankers will continue to focus on meeting customers’ mortgage loan needs. Brougham works at the bank’s Wasilla Branch and offers more than thirteen years of banking experience to his customers. Herndon has lived in Homer Herndon almost her entire life and specializes in Kenai Peninsula mortgage lending. She joined First National’s team in 2011 and works out of the Homer Branch. Jeremy Gogain is the bank’s newest Mortgage Loan Originator. He’s worked in Gogain

Alaska Business Monthly | December 2016 www.akbizmag.com

Compiled by Tasha Anderson banking for more than six years and will concentrate on recommending the best mortgage loan options for his customers. After spending more than two years running the Northern Lights Branch, Kara Blake is now overseeing the Main Branch as its Branch Manager. She is responsible for business development, consumer loans, branch opera- Blake tions, and customer service.

Resource Data, Inc.

Resource Data, Inc. has hired Austin Thompson as a Programmer/ Analyst to their Anchorage Branch. Thompson has a BS in Computer Science from Colorado School of Mines. He is proficient in a number of technical tools such as Java, Thompson Cucumber, Eclipse, Tomcat, and Git. If he doesn’t know it (tech tools) he can selfteach it. Thompson is fairly recent in the job market with experience as an Associate Software Engineer and Software Engineer Intern. The company also hired Paul Carlton as a Programmer/Analyst to their Anchorage Branch. Carlton is a born and raised Alaskan who has more than ten years of professional experience in the field of information tech- Carlton nology and specializes in open source programming. He has extensive background in the full cycle software development process, including requirements, coding, testing, debugging, and maintenance.

Chenega Corporation

Doug Fuller has joined Chenega Corporation as Vice President, Government Relations & Corporate Development. Fuller was formerly a shareholder of the law firm Birch Horton Bittner and Cherot where he represented Chenega for nearly fifteen years. His areas of expertise are uniquely suited to this position, including natural resources law, government and agency relations, government contracting, small business development, legislative affairs, Native American tribal law, and, land exchanges and acquisitions. Fuller’s

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position also includes a corporate development component providing mergers and acquisitions support. He earned a Bachelor’s degree at the University of Nevada and his law degree at George Washington University School of Law.

Credit Union 1

Credit Union 1 is pleased to announce that Davina Napier has been promoted to the position of Senior Vice President of Lending. Napier, with more than twenty years of lending experience and a degree from the Wester Credit Napier Union National Association (CUNA) Management School, has held various positions at Credit Union 1. In her new position, Napier will be responsible for the daily operations of Credit Union 1’s Consumer Loans departments. Sara Swimeley has been promoted to the position of Branch Manager at Credit Union 1’s Downtown Branch where she will be responsible for daily operations. Swimeley was originally hired in 2010. Swimeley

Northrim Bank

Northrim Bank President and CEO Joe Schierhorn is proud to announce the promotion of Sean Christian, VP Strategic and Planning Manager; Seane English, AVP Credit Administration Officer; Bryann Hanks, AVP, Consumer Lender; Terry Lee, AVP Item Processing Assistant Manager; and Bessie Paraoan, AVP Special Credits Officer; and welcomes Jyah Gitomer, AVP Call Center Manager. Christian started at Northrim eleven years ago with sixteen years of experience working in accounting including jobs at Merrill Lynch, Best Western, and the Alaska Spine Institute. He holds an MBA from the University Christian of Alaska Anchorage. Christian is an active volunteer with the Boy Scouts of America and the Food Bank of Alaska. English joined Northrim in 2012 in the Commercial Loan Department before moving to Credit Administration. She has twenty-five years

of experience in Real Estate and Title Industries. English holds an AAS degree, Real Estate Licenses in California and Alaska, and a Commercial Lending diploma from the American Bankers Association. She first came to Alaska because of English the Iditarod and is the fundraising chairperson for the Lance Mackey Comeback Kennel. Hanks began her career at Northrim Bank in 2012 with more than thirteen years of experience in banking, much of that in consumer lending. She holds a Consumer Banking Diploma from the American Bankers Hanks Association and is completing her General Banking Diploma with the American Bankers Association this winter. Hanks volunteers with Junior Achievement and McKinnell House where she teaches financial literacy. Lee has been with Northrim Bank since 1995. She has more than twenty-seven years of banking experience, having worked at National Bank of Alaska prior to joining the Northrim team. Lee volunteers at Northrim’s School Lee Business Partnership School, Fairview Elementary School. Paraoan first worked at Northrim between 2002 and 2006. She returned in 2009 after working at MidFirst Bank and Midland Mortgage in Oklahoma City. Paraoan has been in the financial industry for twenty-two Paraoan years. She holds an AAS degree and is a volunteer for Fairview Elementary School and Northern Lights ABC School. She also volunteers with the Boys and Girls Club. Gitomer joins Nor thrim Bank from Dallas, Texas. She has worked for 7-Eleven for the past eighteen years in a variety of positions. Gitomer has her MBA from Texas A&M University, Commerce. She has volun- Gitomer teered for Habitat for Humanity, Operation Kindness, and Girl Scouts in Texas. R

December 2016 | Alaska Business Monthly

Inside

Alaska Business December 2016 PAINT A SCARF aint a Scarf is bringing silk scarf painting into local restaurants and bars with their new offering Paint a Scarf Pub. Paint a Scarf Pub is a quick, easy, and inexpensive night-out activity. Painters choose from four designs, watch a ten-minute training video on a tablet computer, stretch their silk on a painting rack, spray it down with water, and start painting. The training and painting process takes about an hour. While their scarf dries painters are encouraged to order food and drinks from the host establishment. Paint a Scarf Pub currently operates on Sundays at Williwaw and Tuesdays at 49th State Brewing—both in downtown Anchorage. They operate alternating Wednesday evenings at Evangelo’s in Wasilla and Turkey Red in Palmer. paintascarf.com/pub

GCI CI has unveiled a new look for its company logo—a logo that after thirty years is getting an update, but remains true to its origins as one of Alaska’s most recognized brands. The updated logo and accompanying branding campaign reflects GCI’s focus on remaining a leader in Alaska residential and commercial telecommunications services while expanding its business model to

Compiled by ABM Staff include customers in the Pacific Northwest and beyond. The updated GCI logo was designed with a focus on mobile and online environments in order to be responsive to the always-evolving digital world. Beginning Monday, October 24, customers began to see the new GCI logo on the company website and other properties throughout Alaska and the Pacific Northwest. GCI also announced that residents in Mountain Village, St. Mary’s, Quinhagak, and Tununak will soon experience a faster and improved mobile internet connection as they are upgraded to GCI’s 3G service. The network upgrade will connect residents in those communities to faster mobile data speeds and give customers faster video, web browsing, and streaming capabilities. gci.com ALASKA NATIONAL GUARD he 1st Battalion, 297th Infantry Regiment, Alaska Army National Guard, activated during an October 16 ceremony at the Alaska National Guard Armory in Anchorage. Lieutenant Colonel Jeffrey Roberts assumed command of the newly formed organization during the ceremony. The new battalion is tactically a subordinate unit to the 29th IBCT, though it also reports to the Alaska Army National Guard’s 38th Troop Command. The battalion comprises

a headquarters company, three rifle companies (A, B, and D), and a forward support company. A fourth rifle company, C Company, belongs to the Wyoming Army National Guard. ak.ng.mil ANCHORAGE FIRE DEPARTMENT prescription medication collection unit for the disposal of personal medications that are expired or no longer needed is now available at the Medical Arts Pharmacy in Providence Alaska Medical Center. The disposal unit is free for public use and available from 8:30 a.m. to 6 p.m., Monday through Friday, and 9 a.m. to 5 p.m. on Saturdays at the Medical Arts Pharmacy, located at 3300 Providence Drive, Suite 101 (B Tower – Entrance #4). Syringes, hydrogen peroxide, inhalers, aerosol cans, and medications from businesses or clinics are not permitted for disposal in the unit. Prescription medications can be deposited in the unit in its original container or by emptying medication into a plastic bag, then disposing of it in the unit. muni.org

AICS AND SEARHC laska Island Community Services (AICS) and SouthEast Alaska Regional Health Consortium (SEARHC) announced

Your Project, Our Responsibility. 24/7 Service Pacific Pile & Marine has a robust fleet of marine equipment including our recent addition of a 600-Ton 4600 Ringer.

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From critical lifts to platform support, PPM is sufficiently resourced to deliver a wide range of construction services. 620B East Whitney Road I Anchorage, AK 99501

Alaska Business Monthly | December 2016 www.akbizmag.com

they are formally affiliating to enhance access to quality care for Wrangell residents and patients. As part of the affiliation, AICS will retain its name, and both organizations will be guided by a shared set of principles. AICS will continue to have a strong local voice and presence in Wrangell, and a local advisory council comprised of community members will be established to receive feedback and information regarding the community’s healthcare needs for planning purposes. SEARHC will assume operational and management support roles while AICS continues operating out of all existing facilities and locations. The business transactions in support of the affiliation are expected to be completed by first quarter 2017. searhc.org | akics.org UAF he Anchorage office of the University of Alaska Fairbanks Cooperative Extension Service opened November 2 in the Chugachmiut Tribal Consortium Building at 1840 Bragaw Street, Suite 100, which is downstairs. The office will be open to the public from Noon to 4 p.m. Tuesdays through Thursdays and will also be open as needed during workshops and meetings. The office will be an outreach center with publications and limited staff, and there will be classroom space for distance-delivered classes and hands-on classes taught by agents from other districts and local experts. The office phone number will continue to be 907-786-6300. uaf.edu/ces/

CROWLEY rowley Maritime Corporation’s LNG (liquefied natural gas) services group has been awarded a contract to supply Alaska LNG from the Titan Point Mackenzie plant to Alaska Power & Telephone Company’s Tok power plant. The contract, executed through subsidiary Crowley LNG Alaska, includes both the product supply

and technical services required to successfully leverage the benefits of LNG at the Tok power plant. Crowley will facilitate the transportation of LNG in a safe and reliable manner from liquefaction facilities in Alaska to the plant in tank trailers authorized by the US Department of Transportation. Once at the plant, the LNG will be re-gasified and piped to a dual fuel kit supplied by ECO/ AFS for power consumption. crowley.com VICTORIA’S SECRET laskan shoppers will at last be able shop the state’s first Victoria’s Secret location at the Anchorage 5th Avenue Mall. The new Victoria’s Secret store opened October 28. The 10,962-square-foot store will feature a full assortment of the brand’s iconic lingerie collections, including Body by Victoria, Very Sexy, Dream Angels, Bombshell, and Cotton. Additionally, Victoria’s Secret will bring Victoria Sport and Victoria’s Secret PINK—the lifestyle brand celebrating college women and campus life. The PINK assortment includes sleepwear, loungewear, bras, and panties. victoriassecret.com

DEPARTMENT OF THE INTERIOR S Department of the Interior Secretary Jewell announced at the 50th Alaska Federation of Natives Conference in October the release of Secretarial Order No. 3342 requiring the Interior Department’s agencies to, where possible, include tribes in the management of federal lands and resources. The Interior Department’s agencies include the National Park Service, Bureau of Land Management, Fish and Wildlife Service, Bureau of Ocean Energy Management, and Bureau of Reclamation. The directive will help provide a framework for tribes to have an increased meaningful and substantive role in management of federal lands and waters and covers all 567 federally recognized tribes in the United States, not just those in Alaska. The di-

rective does not make tribes co-managers, but instead requires federal land managers to consult with tribes. BSNC he Bering Straits Native Corporation (BSNC) Board of Directors has declared a dividend of $3.50 per share to be issued in December. The average BSNC shareholder who owns one hundred shares of stock will receive $350. The total distribution will be approximately $2.2 million to BSNC’s shareholders of record. In addition, the BSNC Board of Directors voted to declare a one-time special Elder dividend of $500. This special dividend will be paid to original BSNC shareholders who were sixty-five years of age or older on November 10, the date of record. Checks will be mailed on or by December 31. beringstraits.com

ALASKA DEPARTMENT OF LAW n October 10 the State of Alaska received its first notice from the Bureau of Indian Affairs of an application to take certain tribal lands into trust in Alaska. The State has thirty days to comment on the application. The application, filed by the Craig Tribal Association, requests that a one acre lot within the City of Craig be placed into trust by Bureau of Indian Affairs. According to the notice received by the State, the lot contains the tribe’s administration building, which includes tribal offices, a tribal hall, a local head start program, commercial space, and a parking area for employees and guests. There are no plans to change the current uses of the property. law.alaska.gov

PENAIR enAir has signed an interline ticketing agreement with American Airlines. Effective October 26, PenAir and American Airlines have the ability to ticket on each other

Your Project, Our Responsibility. 24/7 Service

Pacific Pile & Marine has a robust fleet of marine equipment including our recent addition of a 600-Ton 4600 Ringer.

www.pacificpile.com I (907) 276-3878 276-3873 www.akbizmag.com

From critical lifts to platform support, PPM is sufficiently resourced to deliver a wide range of construction services. 620B East Whitney Road I Anchorage, AK 99501 December 2016 | Alaska Business Monthly

INSIDE ALASKA BUSINESS as well as provide boarding passes and the transferring of bags downline to passengers’ destinations. Prior to this neither airline could print boarding passes for connecting flights between the two airlines. They were also not able to transfer bags to one another, causing the customer to have to pick up their own bags at their connecting hub and recheck with the connecting carrier. penair.com SEALASKA ealaska directors approved a fall distribution to shareholders totaling $10.5 million. Total distributions in 2016 to Sealaska shareholders are $26.4 million. The record date is Friday, November 4, 2016. The distribution date is Wednesday, November 23, 2016. The distribution payment was to occur in late November, earlier than in years past. Sealaska’s short-term financial priority is to be profitable before investment and ANCSA Section 7(i) income, and as they approach accomplishing this priority, they are also driving strategic initiatives that will make Sealaska a stronger, more resilient company. sealaska.com

ALASKA HEART & VASCULAR INSTITUTE he Alaska Heart & Vascular Institute recently remodeled its Cardiac Cath Lab & Cardiovascular Surgery Center, adding new procedural equipment such as a custom designed equipment boom, surgical lighting, and a much larger image monitor. The new sixty-five-inch HDMI monitor can display up to eight different images at once providing a greater amount of information to the doctors while they work. The new equipment boom is self-contained with electrical resources and secure equipment shelving allows physicians to easily position necessary equipment exactly where they need it.

Compiled by ABM Staff Additionally, the Institute’s physicians integrated state-of-the-art 3D cardiac mapping software into the Cath Lab. This revolutionary technology, combined with the upgraded equipment, makes it possible to offer patients sophisticated electrophysiology studies and cardiac ablations in an outpatient setting. alaskaheart.com ADF&G ees for Alaska sport fishing, hunting, and trapping licenses and tags will increase beginning January 1, 2017. The Alaska State Legislature raised the fees last session through the passage of House Bill 137, which received broad support from user groups. The new rates mark the first time in twenty-four years that hunting license and tag fees have increased, while sport fishing licenses last increased about ten years ago. Changes under the new law are not limited to fee increases. Alaska residents under the age of eighteen will not be required to purchase hunting or fishing licenses or state waterfowl or king salmon stamps. The requirements for nonresident anglers over the age of sixteen remain unchanged, and those individuals must purchase fishing licenses and stamps. Nonresident hunters and trappers of all ages must purchase appropriate licenses, tags, and stamps. adfg.gov

AIDEA he Alaska Industrial Development and Export Authority (AIDEA) Board in October approved two loan participations for projects located in Anchorage. The first participation, to Spur Development, LLC is for $3.6 million (90 percent) of a $4 million loan brought to AIDEA by Northrim Bank. Northrim originated the loan and is participating with $400,000. The purpose of this loan is for refinancing of the 19,951-square-foot Fresenius Renal

Care Building located at 3950 Laurel Street in Anchorage. This AIDEA loan participation produces economic benefit to the borrower by providing a fifteen year term at a fixed rate of 4.31 percent. The borrower also benefits by reducing the monthly payment and extending the maturity. The second participation, to Eklutna 5th Avenue Properties, LLC, is for $2.34 million (90 percent) of a $2.6 million loan also brought to AIDEA by Northrim Bank. Northrim originated the loan and is participating with $260,000. The purpose of this loan is for refinancing of the 25,935-square-foot FBI Annex Building located at 100 E. 5th Avenue in Anchorage. The borrower benefits by lowering annual debt service by approximately $63,900, stabilizing future debt servicing, and extending repayment terms. aidea.org HABITAT FOR HUMANITY abitat for Humanity completed house twenty-three and finished Neighbor Drive in Anchorage in September. In 2011, Habitat Anchorage acquired land to build twenty-three safe, affordable, and energy efficient houses to local families who were affected by Anchorage’s housing crisis. This subdivision is now home to a multi-cultural community of 126 children and adults. Habitat for Humanity believes that everyone deserves a decent place to live. To that end, Habitat for Humanity Anchorage completed its first home in 1993. Success to date includes completion of ninety-three new construction houses and “rehabbing” an additional twelve—providing permanent, affordable housing to more than five hundred children and adults. More than 82 percent of Habitat home buyers are still living in their Habitat houses and using affordable home ownership to improve their lives. habitatanchorage.org R

• General Contracting • Marine Infrastructure • Design Build

Dutch Harbor - Unalaska, Alaska

www.pacificpile.com I (907) 276-3873 88

620B East Whitney Road I Anchorage, AK 99501

Alaska Business Monthly | December 2016 www.akbizmag.com

Business Events DECEMBER

DEC

ALASBO Annual Conference

DEC

ASGA Conference

4-7

Anchorage: Annual conference of the Alaska Association of School Business Officials. alasbo.org

BP Energy Center, Anchorage: The annual conference of the Alaska Shellfish Growers Association includes technology transfer sessions, shellfish gear demonstrations, a general membership meeting, regulator updates, and panel discussion. alaskashellfish.org

9-10

JANUARY 2017

JAN

Meet Alaska Conference

The Sheraton Anchorage Hotel, Anchorage: The Alaska Support Industry Alliance hosts the largest one-day energy conference in Alaska. Meet Alaska includes educational forums and a tradeshow. alaskaalliance.com

JAN

17-19 JAN

Health Summit

Hotel Captain Cook, Anchorage: The 2017 theme is “The Changing Landscapes of Public Health.” alaskapublichealth.org

Alaska Marine Science Symposium

Hotel Captain Cook, Anchorage: Scientists, researchers, and students from Alaska, the Pacific Northwest, and beyond come to communicate research activities in the marine regions off Alaska. amss.nprb.org

23-27 JAN

25-28

Anchorage AEYC Early Childhood Conference

Hilton Anchorage Hotel: “Best Practices in the Face of Change.” Join other early childhood community members to learn new strategies, hear about the latest research, try out a few practical techniques, and discover new tools and resources to help face any challenge. anchorageaeyc.org

JAN

Junior Achievement of Alaska Awards Banquet

Dena’ina Civic & Convention Center, Anchorage: Four new Alaskans will be inducted and recognized with this prestigious award. Attended by over four hundred business representations, the program consists of a networking reception, dinner, and awards ceremony. juniorachievement.org

JAN

26-29

Alaska Peony Growers Association Winter Conference

Westmark Hotel Fairbanks: The Alaska Peony Growers Association is a membership organization comprised of commercial peony growers as well as those interested in the emerging peony industry in Alaska. alaskapeonies.org

www.akbizmag.com

Compiled by Tasha Anderson JAN

28-29

Alaska RTI/Effective Instruction Conference

Dena’ina Center, Anchorage: A small and rural schools preconference will take place Friday, January 27. asdn.org/school-year-conferences-and-institutes

FEBRUARY

FEB

4-10

Alaska Statewide Special Education Conference

Hilton Anchorage Hotel: The Alaska Statewide Special Education Conference (ASSEC) is committed to providing high quality professional development relevant to the cultural, rural, and remote characteristics of Alaska. assec.org

FEB

Alaska Forum on the Environment

Dena’ina Center, Anchorage: The Alaska Forum on the Environment is Alaska’s largest statewide gathering of environmental professionals from government agencies, non-profit and for-profit businesses, community leaders, Alaskan youth, conservationists, biologists, and community elders. akforum.com

6-10

FEB

13-17

Alaska Surveying & Mapping Conference

Hilton Anchorage Hotel, Anchorage: This is the 51st annual conference. The theme for this year is “Centuries Charting Change,” celebrating the sesquicentennial purchase of Alaska from Russia in 1867 and one hundred years of the Alaska Railroad. aksmc.org

FEB

ASTE Annual Conference

Hotel Captain Cook, Anchorage: This is the educational technology conference of the Alaska Society for Technology in Education. This years’ theme is “Explore, Capture, Connect, Reflect.” aste.org

18-21 FEB

AML Winter Legislative Meeting

Juneau: The Alaska Municipal League is a voluntary, nonprofit, nonpartisan, statewide organization of 162 cities, boroughs, and unified municipalities, representing over 97 percent of Alaska’s residents. akml.org

21-23 FEB

Sustainable Agriculture Conference

Fairbanks: This conference is held every year and brings together farmers, ranchers, researchers, Extension agents, and members of the agriculture support industry to learn from one another and to find ways to improve the agriculture industry in Alaska. uaf.edu/ces/ah/sare/conference

22-24

FEB

23-26

Alaska Library Association Annual Conference

Ted Ferry Civic Center and Cap Fox Lodge: AkLA is a nonprofit professional organization for the employees, volunteers, and advocates at academic, public, school, and

special libraries of all sizes in Alaska, as well as library products and services vendors. akla.org/ ketchikan2017

Anthropological Association FEB-MAR Alaska Annual Meeting

27-2

Westmark Fairbanks Hotel and Conference Center: The annual meeting includes workshops, an evening reception for information and registration, paper presentations, and an awards banquet, business meeting, and the Belzoni meeting. alaskaanthropology.org

MARCH

MAR

Anchorage ATHENA Society

Dena’ina Center, Anchorage: Sponsored by the Anchorage Chamber of Commerce, this annual luncheon begins at Noon and honors the contributions of women in the Anchorage Business Community. athenaanchorage.org

APRIL

APR

4-6

TWS Alaska Chapter Annual Meeting

UAF Campus: This is the annual meeting of the Alaska Chapter of The Wildlife Society and brings together wildlife researchers, managers, educators, students, and administrators. twsalaskameeting.com

APR

AKHIMA Annual Meeting

BP Energy Center: The Alaska Health Information Management Association (AKHIMA) is a state organization affiliated with the national organization American Health Information Management Association, an association of health information management professionals worldwide. akhima.org

13-14

APR

14-15

AFCCA Annual Child Care Conference

Anchorage: The conference includes seven hours of training, and lunch is provided. alaskafcca.org

MAY

ADS Annual Meeting

Kodiak: The annual meeting of the Alaska Dental Society, which is “Committed to enhancing the dental profession and the health of all Alaskans.” akdental.org

27-28

JUNE

JUN

IRWA Education Conference

Dena’ina Center, Anchorage: This is the International Right of Way Association’s 63rd Annual International Education Conference which provide educational and learning opportunities as well as networking events. irwaonline.org R

11-14

December 2016 | Alaska Business Monthly

CORPORATE GIFT GIVING

EAT

SHOP ď&#x192;§

By Tasha Anderson

PLAY

ne significant key to success in business is maintaining relationships. The winter holidays are a great time for managers, employees, and business owners to show clients and contacts their deep appreciation for all the hard work that goes into healthy business operations. Below are just a few ideas for your corporate gift giving this year.

STAY

The Levelheaded Paperweight combines two vital principles of life: selfcontrol and access to a level.

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The surprisingly heavy Forge Solid KILO is made of aerospace-grade tungsten, a fitting gift for a metallurgist or science enthusiast. thinkgeek.com/product/ionn/?pfm=Search&t=kilo

For the environmentally conscious, this set of reusable sandwich and snack bags are easy to open and clean and are certified food safe. amazon.com/dp/B0175XZF36/ ref=strm_fn_ 79_nad_ 26_2

More down-to-earth than a Magic 8-ball, the Decision Paperweight has an easy answer for every decision.

uncommongoods.com/ product/decision-paperweight

This modern take on a retro clock has flip-down minute and hour displays.

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For those who just like to fidget, the Jumbo Noah Fidget Toy is perfect to slip into a pocket or desk drawer. thinkgeek.com/product/ jlik/?pfm=Search&t=noah%20 fidget%20toy

Alaska Business Monthly | December 2016 www.akbizmag.com

A unique and personalized gift, this leather keychain features the recipient’s initials and customizable coordinates.

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etsy.com/ listing/166424185/mens-personalized-leather-keychain?utm_ campaign=shopping_us_MavenMetalsInc_sfc_osa&utm_medium=cpc&utm_ source=google&utm_custom1=0&utm_ content=6196526&gclid=CMmSpMraiNACFY dufgodQbYBgA

In honor of Alaska’s aviation industry, the Helicopter Mechanical Paperweight is attractive and multi-functional.

uncommongoods.com/product/helicopter-mechanicalpaperweight

The Pit & Pendulum combines aspects of pendulum physics and a Zen state of mind.

Desktop Golf is a quick solution to Alaska’s ice and snow covered golf courses.

uncommongoods.com/ product/desktop-golf

thinkgeek.com/product/ hulq/?pfm=Search&t=pit%20 and%20pendulum

A variation of the classic stress ball, the Playable Art Ball will appeal to any vibrant personality.

uncommongoods.com/product/ playable-art-ball

www.akbizmag.com

December 2016 | Alaska Business Monthly

CORPORATE GIFT GIVING

The Digger Mechanical Paperweight is an elegant and functional desktop solution that speaks to Alaska’s construction industry.

CORPORATE GIFT GIVING

Good health is important for good business, and the Omron 10 Series upper arm blood pressure monitor is a great step in monitoring heart health.

The glass Dino Pet is filled with thousands of non-toxic dinoflagellates which will emit a natural blue light at night when shaken in the dark.

amazon.com/dp/B01DTD20PM/ref=strm_fn_nad_32_2

amazon.com/Omron-WirelessPressure-Bluetooth-Connectivity/dp/B00KW4PO82/ref=lp_725 8612011_1_8?s=electronics&ie= UTF8&qid=1478041598&sr=1-8

Sleek and elegant, the Umbra Hammered Head bottle opener features a bottle opener and corkscrew.

amazon.com/dp/B00EV5HXCS/ ref=strm_fn_79_nad_63_1

No one has ever had too many tools, and the Black+Decker LCX120PK 20 Volt MAX Lithium drill and project kit is a great start, or addition, to any tool collection. amazon.com/BLACKDECKER-LDX120PK20-Volt-Lithium-Ion/dp/ B00C625KVE/ref=sr_1_36?s= electronics&ie=UTF8&qid=147 8041879&sr=1-36

Bose QuietComfort 35 noisecancelling headphones are convenient whether traveling or working courteously at a desk.

Natureâ&#x20AC;&#x2122;s Blossom Sow & Grow kit allows anyone to grow their own bonsai tree.

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STELLAR-DESIGNS.COM Holiday Checklist

The

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py HWay to Sa olida y ys

ition Employee Recogn iation Customer Apprec de Supplier Gratitu New Year Gifts

Alaska Business Monthly | December 2016 www.akbizmag.com

CORPORATE GIFT GIVING

A reusable Brown Paper Bag lunch bag mixes the nostalgia and tradition of packing a lunch with environmental sensibilities.

Organization and traveling go hand in hand, and this set of Flight 001 Go Clean bags are a boon to any traveler. amazon.com/dp/B009XIGR16/ref=strm_fn_201_ nad_61_2

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A set of Bormioli Rocco Murano nine ounce cobalt blue beverage glasses are beautiful and functional. amazon.com/dp/B000P4D5ZI/ref=strm_fn_79_ nad_55_2

Succulents are an easycare gift and this collection of unique succulents can be given as a group or handed out individually. amazon.com/Ceramic-PatternSucuulent-Container-Planter/dp/ B01J3O3YCO/ref=sr_1_18?ie=U TF8&qid=1478044071&sr=8-18spons&keywords=succulent&psc=1

The Sphero Star Wars BB-9 Droid recognizes and reacts to voice commands and has a sixty minute battery life. amazon.com/SpheroStar-Wars-BB-8-Droid/ dp/B0107H5FJ6/ref=sr _1_64?s=electronics &ie=UTF8&qid=1478 041942&sr=1-64

The Alessi Fior dâ&#x20AC;&#x2122;olio olive oil bottle is a clever gift for the cooking enthusiast or casual home chef. amazon.com/dp/ B00J5BLIM4/ref=strm_ fn_79_nad_31_4

Hydration is vital, and the KOR ONE copolyester watter bottle is BPA free.

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AVISALASKA.COM/VIP

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December 2016 | Alaska Business Monthly

EVENTS CALENDAR DECEMBER 2016

EAT

PLAY 

SHOP

Anchorage DEC

2-11

Anchorage International Film Festival

With the tagline “Films worth freezing for,” this annual film festival offers film enthusiasts an opportunity to view a variety of international and independent films including documentaries, animation, shorts, and Made in Alaska films. anchoragefilmfestival.org DEC

2-18

DEC

Christmas Village

Christmas Village is a perfect opportunity to buy all of those last-minute gifts. Christmas Village, which is located at the Dena’ina Center and will be open from 10 a.m. to 6 p.m., allows both Alaskan-made and imported items to be sold at the show. anchoragemarkets.com

New Year’s Eve Celebration

Anchorage’s New Year’s Eve celebration is a fun, family friendly, free event. The night will feature musicians, street performers, food vendors, and fireworks, all in Anchorage’s Town Square from 5 p.m. to 8 p.m. anchoragedowntown.org

Fairbanks DEC

A Christmas Story

off the family favorite 2-18 Based movie, this stage production by Jean Shepherd is the story of nine-year-old Ralphie Parker on his quests to get a Red Ryder BB gun for Christmas. The delightful comedic plot elements include the family’s temperamental exploding furnace, Scut the school bully, experiments with a wet tongue on a cold lamppost, and Ralphie’s father winning a lamp shaped like a woman’s leg in a net stocking. fairbanksdrama.org

Sitka DEC

DEC

Design Alaska Holiday Concert

The Design Alaska Holiday Concert, which sells out every year, features Eduard Zilberkant conducting the Fairbanks Symphony Orchestra, the Fairbanks Symphony Chorus, and the Fairbanks Symphony Children’s Chorus and will treat guests with traditional holiday favorites at the UAF Davis Concert Hall beginning at 4 p.m. fairbankssymphony.org DEC

Sitka Artisans Market & Holiday Craft Party

2-4 This seasonal celebration combines two long standing events, the artisans market (a juried market of approximately thirty-five vendors) and the craft party where all ages can make fish prints, holiday cards and ornaments, gingerbread houses, and more. All the fun takes place on the historic Sheldon Jackson Campus; the Artisan Market is in Allen Hall and the Craft Party in the Yaw Building. This year’s Craft Party will also feature dance demonstrations by Sitka Studio of Dance. thinkartthinksitka.com Skagway

Mushing Madness

Starting at 10:30 a.m. and sponsored by the Junior Dog Mushers of Interior Alaska, Mushing Madness takes place at the Jeff Studdert Race Ground and is a less formal opportunity for young mushers ages two through eighteen to enjoy dog mushing without the pressure of racing. juniordogmushers.com

Juneau DEC

Holiday Pops

off your holiday season 17-18 Kick with friends and family at the 8th Annual Holiday Pops Concert. Bring the whole family to enjoy an evening of favorite holidays songs performed by friends, family, and neighbors at the UAS Egan Library on December 17 at 7 p.m. and at the Juneau Arts & Culture Center at 4 p.m. on December 18. jahc.org

Palmer DEC

Colony Christmas

Colony Christmas is an old-fashioned country Christmas celebration with craft fairs, horse-drawn and reindeer sleigh rides, pictures with Santa, fireworks, and a parade, all in Downtown Palmer. palmerchamber.org

9-11

Petersburg DEC

Julebukking

The streets of downtown Petersburg fill with bundled customers looking for last minute gifts for friends and family. According to Norwegian tradition, local merchants offer customers amazing seafood

21-24

STAY

delights, familiar Norwegian pastries, and warming spirits in appreciation of their business during the past year. No one remembers when this tradition started, it just has always been part of the charm of the season. petersburg.org

Anchorage

Every Christmas Story Ever Told (And Then Some)

Back by popular demand with new jokes and holiday stories, instead of performing Charles Dickens’ beloved holiday classic for the umpteenth time, three actors decide to perform every Christmas story ever told—plus Christmas traditions from around the world, seasonal icons from ancient times to topical pop-culture and every carol ever sung. cyranos.org DEC

Compiled by Tasha Anderson

Yuletide

DEC

The Yuletide celebration kicks off with the Tree Lighting at 5th and Broadway on December 1 and continues with the free Santa Train on December 10 and the Yuletide Ball on December 17. Other activities include open houses at many downtown businesses, the Kids Carnival, and the craft bazaar. skagway.com

1-17

Wasilla DEC

8-10

The Alaskan Nutcracker

This holiday classic, brought to you by Sonja’s Studio of Dance, takes on a truly Alaskan twist. Performances held at the Glenn Massay Theater. glennmassaytheater.com DEC

Mat-Su Concert Band Holiday Concert

16 The Mat-Su Concert Band is the largest and oldest musical organization in the Mat-Su Borough and provides adult musicians from across the Valley and surrounding areas in Alaska the opportunity for musical expression and enjoyment beyond high school and college. Concert held at the Glenn Massay Theater. glennmassaytheater.com R

Alaska Business Monthly | December 2016 www.akbizmag.com

ALASKA TRENDS

By Khristian Viray

Alaska Will Need More Assisted Living Homes Senior population expected to boom through 2014

ccording to Alaska Economic Trends October 2016 report, Alaska’s senior citizen population is projected to rapidly grow through 2024. In particular, the sixty-five-year-old and above population is expected to boom by 67.7 percent during that time period. This is a major driver of employment growth in the healthcare field overall, which will expand by nearly 16 percent; home healthcare services are expected to grow even more, by 22.2 percent. The cost of assisted living points to an opportunity for competition in the marketplace. The 2015 Genworth Financial cost of care survey estimated that Alaska’s average cost of assisted living for one elderly person is $5,703 per month, a figure well above the national average of $3,600 per month. The Alaska Department of Health and Social Services currently has 653 licensed assisted living homes in Alaska as of October 2016. Assisted living homes are divided into three categories based on the type of their residents:  SS—Adults Age 18 and older who have a physical disability, are elderly, who suffer from dementia, but who are not chronically mentally ill. 231 homes 2,076 residents  DU—Adults age 18 and older who have a physical disability, are elderly, who suffer from dementia, who have a developmental or mental health disability. 41 homes 412 residents

 DD/MH—Adults age 18 and older who have a developmental or mental health disability. 381 homes 1,388 residents The SS and DU categories are the two that are associated with elderly care. Current numbers show that the two categories are housing 2,488 residents. Approximately 58.5 percent of those residents reside in the Municipality of Anchorage, 13 percent in the Mat-Su Borough, 10 percent in the Gulf Coast Region, 8.5 in the Southeast Region, and 8.4 in the Interior Region. The average number of residents in a SS home is about nine, if larger homes such as the Pioneers Home in Anchorage and Providence Horizon House are included; in DU homes the average is ten, but in both cases the most common is about five residents in a home. The City of Anchorage has the most homes with 168 SS homes and 32 DU homes. In July 2014, the Alaska Department of Labor and Workforce Development estimated that the sixty-five and older population is 71,240 . If the projected increase of 67.7 percent comes to fruition, senior citizens will increase approximately to 119,470 by 2024. In order to keep up with the potential demand, Alaska will need many more assisted living homes in the next decade. R Alaska Trends, an outline of significant statewide statistics, is provided by the University of Alaska Center for Economic Development.

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ALASKA TRENDS

Indicator

GENERAL Per Capita Personal Income—Alaska Per Capita Personal Income—US Consumer Prices—Anchorage Consumer Prices—US Bankruptcies Alaska Total Anchorage Total Fairbanks Total Labor Force in Alaska Unemployment Rate Alaska United States Employment Alaska Anchorage/Mat-Su Region Anchorage, Municipality Interior Region Fairbanks North Star Borough Southeast Juneau, City and Borough Northern Region Gulf Coast Southwest Region Sectorial Distribution—Alaska Total Nonfarm Goods-Producing Mining and Logging Mining Oil & Gas Construction Manufacturing Seafood Processing Service-Providing Trade, Transportation, Utilities Wholesale Trade Retail Trade Food & Beverage Stores General Merchandise Stores Trans/Warehouse/Utilities Air Transportation Information Telecommunications Financial Activities Professional & Business Svcs Educational & Health Services Health Care Leisure & Hospitality Accommodation Food Svcs & Drinking Places Other Services Government Federal Government State Government State Education Local Government Local Education Tribal Government PETROLEUM/MINING Crude Oil Production—Alaska 96

Latest Report Period

Previous Report Period (revised)

Year Ago Period

Year Over Year Change

Units

Period

US $ US $ 1982-1984 = 100 1982-1984 = 100

2ndQ16 2ndQ16 1stH16 1stH16

56,346.0 49,142.0 216.9 238.8

56,164.0 48,732.0 216.7 237.7

56,251 47,983 217.1 236.3

0.2% 2.4% -0.1% 1.1%

Number Filed Number Filed Number Filed Thousands

September September September September

34.0 28.0 3.0 360.5

32.0 26.0 5.0 366.1

46 38 5 363.8

-26.1% -26.3% -40.0% -0.9%

Percent Percent

September September

6.4 5.0

5.9 4.9

5.8 5.1

10.3% -2.0%

Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands

September September September September September September September September September September

337.5 187.8 147.3 49.9 43.9 36.4 16.4 9.3 36.2 55.6

344.5 188.7 147.9 50.5 44.2 38.2 17.0 9.3 37.7 18.8

338.7 190.1 149.1 50.5 44.3 37.0 16.7 10.4 36.9 17.8

-0.4% -1.2% -1.2% -1.1% -1.0% -1.5% -1.5% -10.7% -1.7% 212.0%

Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands

September September September September September September September September September September September September September September September September September September September September September September September September September September September September September September September September September

348.4 49.3 15.2 14.9 12.0 18.8 15.3 11.3 299.1 68.6 6.4 38.3 6.0 11.2 23.9 6.2 6.1 4.1 12.5 28.1 49.9 36.8 39.5 10.6 23.2 11.4 83.0 16.2 24.4 7.3 42.4 23.6 4.1

360.2 56.6 15.5 15.5 12.2 19.6 21.5 17.2 303.6 71.8 6.7 39.8 6.2 11.4 25.3 6.5 6.1 4.1 12.7 29.3 49.2 36.8 44.3 12.9 24.9 11.6 78.6 16.4 23.4 5.9 38.8 19.1 4.1

351.8 52.9 17.5 17.2 14.0 19.5 15.9 11.9 298.9 69.0 6.6 38.6 6.0 11.0 23.8 6.4 6.3 4.3 12.3 30.7 47.0 34.3 39.2 11.0 22.8 11.6 82.8 15.5 25.9 7.8 41.4 22.9 3.9

2.4% 7.0% -11.4% -9.9% -12.9% 0.5% 35.2% 44.5% 1.6% 4.1% 1.5% 3.1% 3.3% 3.6% 6.3% 1.6% -3.2% -4.7% 3.3% -4.6% 4.7% 7.3% 13.0% 17.3% 9.2% 0.0% -5.1% 5.8% -9.7% -24.4% -6.3% -16.6% 5.1%

Millions of Barrels

August

14.2

13.6

12.6

12.7%

Alaska Business Monthly | December 2016 www.akbizmag.com

By Nolan Klouda

Latest Report Period

Previous Report Period (revised)

Year Ago Period

Year Over Year Change

Indicator

Units

Period

Natural Gas Field Production—Alaska ANS West Coast Average Spot Price Hughes Rig Count Alaska United States Gold Prices Silver Prices Zinc Prices

Billions of Cubic Ft. $ per Barrel

August September

6.5 44.5

6.6 44.2

8.3 48.8

-21.4% -8.8%

Active Rigs Active Rigs $ Per Troy Oz. $ Per Troy Oz. $ Per tonn

October October September September September

10.0 553.0 1,325.2 19.4 2,292.3

7.0 522.0 1,341.0 19.6 2,279.1

13.0 775.0 1118.25 14.6 1,720.2

-23.1% -28.6% 18.5% 32.5% 33.3%

Millions of $ Millions of $ Millions of $ Millions of $

September September September September

42.6 11.4 29.2 2.0

33.0 10.6 20.4 2.0

31.6 10.4 17.3 4.0

34.6% 9.7% 69.4% -50.5%

Dollars Dollars Dollars

2ndQ16 2ndQ16 2ndQ16

294,513.0 193,878.0 560,935.0

290,179.0 184,481.0 572,364.0

287,989.0 184,829.0 481,798.0

2.3% 4.9% 16.4%

Dollars Dollars

2ndQ16 2ndQ16

236,829.0 159,641.0

228,377.0 160,394.0

233,442.0 163,474.0

1.5% -2.3%

Units Units Units

2ndQ16 2ndQ16 2ndQ16

185.0 75.0 237.0

89.0 4.0 43.0

228.0 67.0 118.0

-18.9% 11.9% 100.8%

Thousands Thousands

August August

678.4 125.1

709 120.4

674.77 124.09

0.5% 0.8%

REAL ESTATE Anchorage Building Permit Valuations Total Residential Commercial Government Statewide Average Housing Market Loan Single-Family Condominium Multi-Family Refinance Average Loan Statewide Single-Family Condominium New Housing Built Statewide Single-Family Mobile Home Multi-Family VISITOR INDUSTRY Total Air Passenger Traffic—Anchorage Total Air Passenger Traffic—Fairbanks

ALASKA PERMANENT FUND Equity Millions of $ September Assets Millions of $ September Net Income Millions of $ September Net Income—Year to Date Millions of $ September Marketable Debt Securities Millions of $ September Real Estate Investments Millions of $ September Preferred and Common Stock Millions of $ September

54,778.5 54,420.8 50,546.2 55,621.0 55,091.2 51,373.9 587.8 143.5 95.7 1,935.2 1,589.2 (2,348.0) -10.6 -9.6 2.7 -34.8 -13.5 13.0 182.8 94.6 (758.4)

BANKING (excludes interstate branches) Total Bank Assets—Alaska Cash & Balances Due Securities Net Loans and Leases Other Real Estate Owned Total Liabilities Total Bank Deposits—Alaska Noninterest-bearing deposits Interest- bearing deposits

Millions of $ Millions of $ Millions of $ Millions of $ Millions of $ Millions of $ Millions of $ Millions of $ Millions of $

2ndQ16 2ndQ16 2ndQ16 2ndQ16 2ndQ16 2ndQ16 2ndQ16 2ndQ16 2ndQ16

6,323.0 305.6 141.3 3,048.2 21.0 5,466.3 4,729.4 2,040.1 2,689.2

6,281.1 323.6 146.6 3,014.6 21.0 5,439.0 4,701.6 2,014.1 2,687.4

5,973.90 275.40 147.67 2,926.22 17.90 5,166.50 4,448.14 1,893.39 2,554.75

5.8% 11.0% -4.3% 4.2% 17.3% 5.8% 6.3% 7.7% 5.3%

FOREIGN TRADE Value of the Dollar In Japanese Yen In Canadian Dollars In British Pounds In European Monetary Unit In Chinese Yuan

Yen Canadian $ Pounds Euro Yuan

September September September September September

100.8 1.3 0.8 0.9 6.7

102.9 1.3 0.8 0.9 6.7

119.9 1.32 0.65 0.89 6.35

-15.9% -0.8% 18.5% 0.0% 4.9%

8.4% 8.3% 514.2% 182.4% -492.6% -367.7% 124.1%

Notes: 1. Banking data has been updated to include Alaska State Banks and Alaska’s sole federally chartered, Alaska-based bank, First National Bank Alaska. 2. Information oh housing is retrieved from AHFC website. www.akbizmag.com

December 2016 | Alaska Business Monthly

ADVERTISERS INDEX 49th State Brewing Company....................................................91 Advanced Physical Therapy of Alaska..................................29 Alaska Air Cargo - Alaska Airlines............................................11 Alaska Center For Dermatology..............................................30 Alaska Communications....................................................37, 66 Alaska Directional LLC................................................................. 55 Alaska Mergers & Acquisition LLC...........................................81 Alaska PTAC......................................................................................49 Alaska Rubber...................................................................................51 Alaska USA Federal Credit Union.............................................10 Alaska USA Insurance Brokers...................................................61 American Marine / Penco...........................................................95 Arctic Office Products.................................................................80 AT&T.......................................................................................................21 Avis Rent-A-Car...............................................................................93 Balance & Restore..........................................................................43 BP ...........................................................................................................57 Business Insurance Associates Inc.........................................63 C & R Pipe and Steel Inc...............................................................19 Calista Corporation...........................................................................8 Carlile Transportation Systems..........................................3, 69 CH2M........................................................................................................7

Construction Machinery Industrial............................................2 Cornerstone Advisors....................................................................31 Craig Taylor Equipment...............................................................68 Fairbanks Memorial Hospital....................................................39 GCI.............................................................................................51, 100 Great Originals Inc.........................................................................81 Hall, Render, Killian, Heath, & Lyman PC............................ 33 Historic Anchorage Hotel...........................................................94 Judy Patrick Photography.........................................................98 Junior Achievement of Alaska.................................................82 Landye Bennett Blumstein LLP.................................................19 Lynden Inc......................................................................................... 27 Mat-Su Valley Cancer Center....................................................45 Micrcom..............................................................................................65 N C Machinery..................................................................................75 New Horizons Telecom Inc...........................................................9 Nortech Environmental & Engineering................................26 North Star Behavioral Health....................................................35 Northern Air Cargo..............................................................84, 85 Pacific Pile & Marine..................................................86, 87, 88 Paragon Interior Construction.................................................65 Parker Smith & Feek......................................................................99

PenAir..................................................................................................79 Personnel Plus.................................................................................92 Petrotechnical Resources Alaska PRA.................................. 53 Quality Asphalt Paving................................................................63 Ravn Alaska........................................................................................17 RSA Engineering Inc......................................................................77 Seawolf Sports Properties................................................ 41, 90 Stellar Designs Inc.........................................................................92 T. Rowe Price....................................................................................23 The Pacific Northwest Regional Council of Carpenters........................................71 The Plans Room...............................................................................77 Think Office......................................................................................49 UA Local 367 Plumbers & Steamfitters.................................83 UIC Commercial Services........................................................... 73 UIC Foundation............................................................................... 78 United Way of Anchorage..........................................................40 Washington Crane & Hoist......................................................... 67 Waste Management.......................................................................25 Wells Fargo Bank Alaska...............................................................15 World Trade Center Anchorage................................................13

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