APPRENTICESHIPS | ECONOMIC OUTLOOK | EDUCATION | ENTREPRENEURS
January 2016
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Junior Achievement of Alaska
Alaska Business Hall of Fame
Laureate Jason Metrokin President and CEO Bristol Bay Native Corporation
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Januar y 2016 TAB LE
OF
CONTENTS ABOUT THE COVER
DEPARTMENTS
Jason Metrokin, President and CEO of Bristol Bay Native Corporation, is on the January cover with essential tools of financial literacy: ruler, pencil, and checkbook. He is one of the Junior Achievement of Alaska Laureates to be inducted into the Alaska Business Hall of Fame later this month. We have a Q&A with him in the annual Junior Achievement special section that begins on page 31. In the background are Nikiski Elementary School students at a recent JA In A Day event.
From the Editor . . . . . . . . . . . . . . . . . 7 Business Events . . . . . . . . . . . . . . . . 27 Inside Alaska Business . . . . . . . . . . . 83 Right Moves . . . . . . . . . . . . . . . . . . 86 Eat, Shop, Play, Stay . . . . . . . . . . . . 88 Events Calendar . . . . . . . . . . . . . . . . 93 Accolades . . . . . . . . . . . . . . . . . . . . 94 Alaska Trends . . . . . . . . . . . . . . . . . 95 Ad Index . . . . . . . . . . . . . . . . . . . . . 98
Cover Photos: © Judy Patrick Photography Cover Design: David Geiger
ARTICLES First National Bank Alaska South Center Branch with the attendance champion banner.
24
Courtesy of First National Bank Alaska
8 | Alaska’s Economy Historical trends and future outlook By Mouhcine Guettabi and Gunnar Knapp
HR Matters
18 | The Best Way to Handle Layoffs By Deeta Lonergan and Kevin M. Dee
DIGITAL EXCLUSIVE Financial Services Mt. McKinley Bank Celebrating 50 years in Fairbanks
Junior Achievement JA In A Day
Volunteers converge at Nikiski Elementary School Photo Essay by Judy Patrick
4
Telecom & Technology
20 | Effective email Management Techniques for busy business owners, executives, and managers By Tracy Barbour
54
Education
24 | Attendance Equals Success for School and Work Business partners promote benefits of showing up every day By Russ Slaten 28 | Next Generation Career Planning Job opportunities and job preparations for Alaska’s future workforce By Tasha Anderson
© Kiewit Companies
Economy
Entrepreneurs
52 | Launch : Alaska Accelerator Increasing the ‘deal-flow’ of startups By Gianna Foltz
Work on Glenn Highway Capacity Improvement project at Eagle River was completed by Kiewit in December 2015.
Alaska Business Monthly | January 2016 www.akbizmag.com
Januar y 2016 TAB LE special section
ARTICLES
Junior Achievement
60
32 | Alaska Business Hall of Fame Invitation from Junior Achievement
OF
CONTENTS
33 | Laureate Michael Burns By Russ Slaten Expanded in Digital Edition 34 | Laureate Lynn Johnson Q&A By Russ Slaten 35 | Financial Literacy 101 It’s not what you earn—it’s what you keep and how you spend it By Bradley Loncar and Aaron Hippler Expanded in Digital Edition 36 | Laureate Jason Metrokin Q&A By Russ Slaten 38 | Getting Ready for College A four-year checklist for high school students By Sarah Schupp 40 | The Next Decade of Career Opportunities Top twenty US jobs by growth and workers needed By Junior Achievement Alaska Staff 41 | JA CEO Academy Growing Alaska’s Future Business Leaders
Avery Ault and Jay Phillips welding filler pass on twenty-four inch pipe.
Construction
54 | Winter Projects in Alaska Keeping up with a growing population By Russ Slaten
Expanded in Digital Edition
Workforce Training
60 | Training Plumbers, Steamfitters, and Pipefitters Union apprenticeship programs invest in workforce By Rindi White
42 | Teen Entrepreneurs Alaska’s young adults start up the state’s future By Heather A. Resz
Energy
49 | Alaska Business Hall of Fame History & purpose
Economy
50 | Alaska Business Hall of Fame Past Laureates 50 | Statewide Board of Directors 2015-2016 51 | Junior Achievement Donors 6
© Local 375 JATC
64 | Interior Alaska Energy AIDEA banks on ‘bridge’ project By Julie Stricker 67 | The Curse of Natural Resources ‘More likely a resource drag’ By Alex James
Oil & Gas
68 | Alaska Oilfield Support via Advocacy ‘Efforts are broad and far reaching’ By Tom Anderson
Expanded in Digital Edition 72 | North Slope Leaseholders Winter in motion, or not By Tom Anderson
Transportation
76 | Fuel of the Future: LNG Shipping Innovations Alaska to benefit from conversions and vessels By J. Pennelope Goforth 78 | Pile Driving Underwater Noise Attenuation Port of Anchorage Modernization Project Adds to Body of Knowledge By Tasha Anderson
Correction In the November 2015 issue, NANA Development Corporation was named as the partner with Tech Resources Limited. NANA Regional Corporation is the partner with Tech at the Red Dog mine.
Alaska Business Monthly | January 2016 www.akbizmag.com
FROM THE EDITOR
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Volume 32, Number 1 Published by Alaska Business Publishing Co. Anchorage, Alaska
Imagining a Happy New Year
Jim Martin, Publisher 1989~2014
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Billie Martin Jason Martin Charles Bell Anne Tompkins Bill Morris Janis J. Plume Ana Lavagnino
501 W. Northern Lights Boulevard, Suite 100 Anchorage, Alaska 99503-2577 (907) 276-4373 Outside Anchorage: 1-800-770-4373 Fax: (907) 279-2900 www.akbizmag.com Editorial email: editor@akbizmag.com ALASKA BUSINESS PUBLISHING CO., INC. ALASKA BUSINESS MONTHLY (ISSN 8756-4092) is published monthly by Alaska Business Publishing Co., Inc., 501 W. Northern Lights Boulevard, Suite 100, Anchorage, Alaska 99503-2577; Telephone: (907) 276-4373; Fax: (907) 279-2900, ©2016, Alaska Business Publishing Co. All rights reserved. Subscription Rates: $39.95 a year. Single issues of the Power List are $15 each. Single issues of Alaska Business Monthly are $3.95 each; $4.95 for October, and back issues are $5 each. Send subscription orders and address changes to the Circulation Department, Alaska Business Monthly, PO Box 241288, Anchorage, AK 99524. Please supply both old and new addresses and allow six weeks for change, or update online at www.akbizmag.com. Manuscripts: Send query letter to the Editor. Alaska Business Monthly is not responsible for unsolicited materials. Photocopies: Where necessary, permission is granted by the copyright owner for libraries and others registered with Copyright Clearance Center to photocopy any article herein for $1.35 per copy. Send payments to CCC, 27 Congress Street, Salem, MA 01970. Copying done for other than personal or internal reference use without the expressed permission of Alaska Business Publishing Co., Inc. is prohibited. Address requests for specific permission to Managing Editor, Alaska Business Publishing. Online: Alaska Business Monthly is available at www.akbizmag.com/Digital-Archives, www.thefreelibrary.com/Alaska+Business+Monthly-p2643 and from Thomson Gale. Microfilm: Alaska Business Monthly is available on microfilm from University Microfilms International, 300 North Zeeb Rd., Ann Arbor, MI 48106.
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Reimagine new money coming into Alaska
W
elcome to 2016, another year of change for Alaska. At press time in early December 2015, the price of a barrel of Alaska North Slope crude oil destined for West Coast refineries was hovering around $40, and production was a bit over half a million barrels a day. It’s time to reimagine revenues for Alaska. Obviously, we can no longer depend solely on oil to propel the economy, create jobs, and bankroll state government services, spending, and other obligations. We’ve got to reimagine revenue sources—new money coming into Alaska. Marc Langland was in the office in late November filming an interview for the Junior Achievement Hall of Fame presentation taking place January 27. I had the pleasure of chatting briefly with him while he was here. After fifty years in the banking industry he was set to retire from Northrim at the end of 2015. He was looking forward to that and planning on enjoying his retirement. We also talked about the Alaska economy. He has a three-step plan: we’ve got to cut the state budget, cut and cap the Permanent Fund Dividend, and leverage the Permanent Fund earnings to help fund state government. He was adamant that it all has to be done in the right sequence: first cut the budget, then cut and cap the dividend checks, and then use Permanent Fund earnings. “There is enough [money] if it is done that way,” he said. With a multi-billion dollar deficit staring us in the face amid continuously faltering oil prices, the components of Langland’s plan have been touted by many, including ISER economists, the folks at Alaska Common Ground, and many others. It’s time to take action. Reimagine revenue sources—that should be the theme for 2016. Reimagine a way for new money to come into the Alaska economy. It’s not just state government that is going to need to tap a different source of money for survival. Businesses, organizations, and communities across the state are going to have to figure out new ways of growing local economies as well as financing city services—all of which will require new sources of revenue. Delta Western has worked diligently in this very direction. In December the company accepted the first marine shipment of methanol at its new facilities at the Port of Anchorage. The company broke ground last spring to build a Marine Methanol Terminal at the Port of Anchorage. It’s the first new construction at the Port in over four decades, and on December 6 a new commodity crossed the docks—methanol. Some forty thousand barrels of methanol was offloaded from a tanker into Delta Western’s new storage tank, ready to be trucked to the North Slope for use in oilfield operations. It’s a great example of reimagined revenue leading to business growth in Alaska. Delta Western now has twelve fuel terminals in the state and is positioned to generate increased revenues for themselves and for the Port of Anchorage, as well as saving money for its methanol customers by shortening the supply chain—a win for all involved. As is the January issue of Alaska Business Monthly! We’ve put together another really great magazine—enjoy! —Susan Harrington, Managing Editor January 2016 | Alaska Business Monthly
7
ECONOMY
Alaska’s Economy Historical Trends and Future Outlook By Mouhcine Guettabi and Gunnar Knapp
I
n this article we review recent trends in Alaska’s economy and the economic outlook for the near-term and longerterm future. We begin with a brief description of the structure of Alaska’s economy and key factors that drive it. Next we review historical trends in the economy. We then discuss factors likely to affect the economy in the near-term future, including the dramatic decline in oil prices and state oil revenues and the state’s response to the resulting very large deficits. Finally, we discuss the longer-term outlook for the Alaska economy, including the potential economic impacts of an LNG (liquefied natural gas) export project. Alaska’s economy is complicated. In this brief article we have to omit important details due to lack of space. In particular, we do not address regional variation in the economy, which is significant, or the significant changes occurring in many industries. Alaska’s future economic outlook is uncertain. We can’t predict with certainty
the combined effects of the many factors which may affect it. Our primary goal is to describe potential implications of factors which we know will affect it.
Alaska Economic Structure and Trends It is useful to group Alaska industries as “basic” or “support” and further into the four major “sectors” shown in the table below—which vary in what drives them, how they have changed in the past, how they are likely to change in the future, and in their relative importance for different regions of Alaska. Basic sectors and industries sell goods and services primarily to markets outside Alaska and thus bring money into the economy (the federal government is “basic” because federal spending in Alaska is paid for from outside Alaska). Support sectors and industries sell goods and services primarily to markets inside Alaska and thus recirculate money in the economy.
Major Alaska Economic Sectors Basic or Support Basic
Support
Major Industries
Selected Important Economic Drivers
Resource industries
Oil Seafood Mining
Federal government
Federal civilian Federal military
Federal politics
State and local government
State government State oil revenues Local government State investment revenues (including K-12 State politics education)
Sectors
Trade, service, transportation, and infrastructure industries*
Retail trade Wholesale trade Healthcare Services Transportation Construction
Oil prices Other resource prices Federal and state regulations Resource technology
Basic sectors’ output, employment and income Extent to which households and businesses spend money in Alaska State and local government spending Government transfer payments (including Permanent Fund dividends) Rate of and expectations for future economic growth
* Some of these industries are partially “basic” to the extent that they sell services outside Alaska. For example, the shares of the retail trade and accommodation and food service industries supported by sales to tourists are “basic.” However, in practice it is difficult to estimate the “basic” components of these industries.
8
There is no single measure which fully describes the structure of Alaska’s economy and the relative economic importance of different sectors and industries. Three useful measures are employment, wage and salary income, and contribution to gross domestic product. The relative significance of different sectors varies across these measures, reflecting the fact they measure different things. Employment measures how many people work in a sector, wages and salaries measure how much they earn, and GDP measures how much value they create. As shown in the graph below, in 2013 (the most recent year for which detailed GDP estimates are available) resource industries accounted for 31 percent of gross domestic product but only 11 percent of total employment. In contrast, trade, service, transportation, and infrastructure industries accounted for 51 percent of GDP but 66 percent of employment. State and local government accounted for 14 percent of employment but 18 percent of wages and salaries. The federal government accounted for 9 percent of employment but 13 percent of wages and salaries. Total Alaska employment in 2013, as estimated by the Bureau of Economic Analysis and including non-wage and salary employment, was 461,112. Employment for 2015, for which data are not yet avail-
Three Measures of the Structure of Alaska’s Economy, 2013
Trade, service, transportation & infrastructure industries State and local government Federal government Resource industries
100%
75%
50%
51%
10% 8%
25%
31%
55%
18% 13% 15%
0%
Gross Domestic Product
66%
Wages & Salaries
14% 9% 11% Employment
Alaska Business Monthly | January 2016 www.akbizmag.com
Alaska Employment by Industry and Sector, 2013 2,225
Utilities
Total 2013 employment was 461,112
3,338
Management of companies and enterprises
5,524
Educational services
7,165
Information
7,584
Wholesale trade
10,815
Arts, entertainment, and recreation
11,551
Finance and insurance
Trade, service, transportation & infrastructure industries (303,431)
15,491
Real estate, rental and leasing
17,297
Administrative and waste management services
20,803
Other services, except public administration
23,807
Transportation and warehousing Construction
24,637
Professional, scientific, and technical services
24,873 33,507
Accommodation and food services
44,123
Retail trade
50,691
Healthcare and social assistance 25,886
State government
38,187
Local government
27,457 11,305
Forestry, fishing, and related activities
22,559
Mining 0
10,000
able, would be slightly higher. A useful rule of thumb to remember is that 4,600 jobs would be about 1 percent of Alaska employment and 46,000 jobs would be about 10 percent of Alaska employment. The six largest Alaska industries in 2013, as measured by employment, were healthcare and social assistance, retail trade, local government, accommodation and food services, federal military, and state government. Long-time Alaskans may remember Alaska as a state with rapidly rising employment and population, characterized by periods of boom and bust such as the construction of the trans-Alaska oil pipeline in the mid-1970s, the recession following completion of the pipeline in the late 1970s, the government-spending and construction-driven boom of the early 1980s, and the oil price-crash-driven deep recession of
20,000
30,000
ernment employment—which accounts for 23 percent of Alaska employment and 31 percent of total wage and salary income— may end or reverse a long period of growth in Alaska employment.
Factors Affecting Alaska’s NearTerm Economic Outlook In the near term—over the next few years—three factors appear most likely to drive change in Alaska’s economy, all of which are uncertain and difficult to project. First, the decline in federal spending and employment of recent years appears likely to continue, although we don’t know what specific cuts may occur, and particularly whether or not significant reductions will occur to military units based in Alaska. National politics, including the outcomes of next year’s presidential and con-
2010
20%
350,000
5% 10% 15% Growth rates
300,000 200,000 250,000 150,000
0%
Wage and Salary Jobs
100,000 50,000
-5%
-2%
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Growth Rate
60,000
0
8% 2% 4% 6% Growth rates 0%
Population
200,000 300,000 400,000 500,000 600,000 700,000 100,000
Population
2000
50,000
Wage and salary jobs (1969-2013)
0
1990 year
40,000
the late 1980s. While true once—as shown in the graphs below—that picture is no longer true. For the past quarter-century, Alaska’s economy has been characterized by relatively slow and steady growth in population and employment—driven by growth across many sectors such as the federal government, mining, tourism, air cargo, healthcare, and retail trade, and with significant regional variation. More recent data suggest that this long period of gradual growth may be ending. From July 2013 through June 2015, yearover-year growth in monthly employment averaged 0.93 percent for private sector employment, 0.46 percent for total employment, 0.18 percent for state government, -0.79 percent for local government, and -3.64 percent for federal government employment. This suggests that declining gov-
Alaska Population (1969-2013)
1980
Resource industries (50,647)
16,783
Manufacturing
1970
Federal government (42,961)
15,504
Federal, civilian Federal, military
State & local government (64,073)
1970
1980
1990 year
Wage and Salary Jobs
2000
2010
Growth rates
January 2016 | Alaska Business Monthly
9
gressional elections, will likely influence how much money the federal government spends in Alaska and what it spends it on. A second important factor will be the response of Alaska’s oil industry to likely continued low oil prices and to potential reductions in state oil and gas tax credits. To date, Alaska has not yet experienced the dramatic decline in oil industry employment that has occurred in most other US oil-producing states. This reflects in part the larger scale of Alaska oil fields and investments and the increased difficulty of oil extraction from aged fields which requires more labor. However, Shell’s recent decision to stop further offshore oil exploration on its Chukchi Sea leases—in which low oil prices were almost certainly a contributing factor—was a reminder that oil prices affect profitability and investment in remote, high-cost areas such as Alaska. Moreover, the recent further slide in oil prices to below $40/barrel (as of early December) will further test the oil industry’s ability and willingness to invest in Alaska exploration and development. A third important factor—and likely the largest driver of near-term economic changes—will be how the state adjusts to dramatically lower oil revenues. After rising for many years, state revenues have fallen dramatically since 2012, the combined result of declining oil production, increasing tax-deductible costs of oil production, and a drastic fall in oil prices from more than $100/barrel in August 2014 to below $40/barrel in early December 2015. State spending has also fallen since 2013, but not as far or as fast as revenues, resulting in large deficits which the state has funded by drawing down savings reserves. Current deficit levels—likely to exceed $3.5 billion in FY16—cannot be sustained as they
Estimated Short-Run Economic Impacts of Selected Options for Reducing the Deficit by $100 Million
How the $100 million is cut Spending cut: state workers Spending cut: across the board Spending cut: capital projects Income tax Permanent Fund Dividend reallocation Spend other Permanent Fund earnings
Employment Impacts Income Impacts (full-time equivalent (millions of $ of income Impacts as % of Deficit jobs in Alaska) earned in Alaska) Alaska total reduction MultiMultiEmployper lost Direct plier Total Direct plier Total ment income job 962
715
1677
95.0
42.8
137.8
0.50%
0.81%
$59,622
505
755
1260
67.5
47.7
115.2
0.38%
0.67%
$79,346
506
425
931
41.7
22.3
63.9
0.28%
0.37%
$107,449
0
971
971
0.0
53.9
53.9
0.29%
0.32%
$103,033
0
727
727
0.0
43.3
43.3
0.22%
0.25%
$137,476
0
0
0
0.0
0.0
0.0
0.00%
0.00%
NA
Source: Preliminary calculations for an ongoing ISER study of economic impacts of state fiscal options, using IMPLAN economic impact model, December 2015. Note that economic impacts of fiscal options may vary substantially depending on what kinds of spending are cut (payments to workers of different income levels, utilities, contracts, capital spending, etc.) or how taxes are structured.
would drain available state savings in the state’s Constitutional Budget Reserve Fund (projected to be about $7.7 billion at the end of FY16) within a few years. Unless oil prices rise dramatically and unexpectedly, within a few years the state will have to reduce the deficit by either reducing spending or finding new ways to pay for spending. The only “fiscal options” which could significantly reduce the deficit are some combination of: Further cuts in state spending Broad-based taxes such as income or sales taxes
10000 12000
Surpluses Revenues
4000
6000
8000
Spending
Deficits
0
2000
Millions of dollars
State General Fund Revenues and Spending, FY15-FY16
2005
10
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Reallocating spending of Permanent Fund earnings from dividends to state government Spending other Permanent Fund earnings The Alaska Legislature faces difficult choices between these options, none of which are popular. The table above shows estimates of the potential short-run economic impacts of selected options for reducing the deficit by $100 million. The estimates are based on input-output analysis, which tracks how the “direct” impacts of a cut in state spending or a reduction in household income are “multiplied” in the economy. The short-run economic impacts of larger spending cuts or new revenues would be proportional: the impacts of cuts or new revenues of $1 billion would be ten times as large. The estimated employment and income impacts include both “direct” and “multiplier” employment and income. Direct impacts are changes in employment and income of employees of state government and state contractors. Multiplier impacts are changes in employment and income in other industries due to ripple effects in the rest of the economy as households, which lose income, and businesses, which lose sales, spend less. The estimated impacts are based on generic assumptions about how state spending cuts would be made and how income taxes or lower Permanent Fund Dividends would affect household spending. They
Alaska Business Monthly | January 2016 www.akbizmag.com
should be considered approximate estimates of the initial short-run impacts of these fiscal options, as well as indicators of how the relative economic impacts of fiscal options may differ. They do not show potentially important indirect or longer-term impacts of fiscal options, such as how they might affect state services on which the economy depends, economic confidence, investment, and real estate prices. They also don’t show how the relative effects of different options may vary by region, or their relative impacts on different income groups. (We are currently studying these other potential economic impacts.) Here are some approximate rules of thumb about potential short-run employment impacts of state fiscal options: Cutting state spending by $1 billion by cutting the state workforce could cause a loss of about 17,000 Alaska jobs, or about 5 percent of total employment: each lost job would reduce the deficit by about $60,000. Cutting state spending in other ways would have smaller employment and income impacts. For example, across the board cuts of $1 billion might cause a loss of about 13,000 jobs, or 4 percent of employment: each lost job would reduce the deficit by about $80,000. Reducing the deficit by collecting income taxes or reallocating Permanent Fund Dividend payments to pay for state government would have smaller total impacts on employment and income than cutting state government—because there would be no direct cuts to jobs or income of state employees or contractors. There would be “multiplier” impacts due to impacts on household disposable income and spending. Collecting $1 billion in income taxes or Permanent Fund Dividend reallocations could cause a loss of about 10,000 jobs or 7,000 jobs, respectively. Reducing the deficit by spending other Permanent Fund earnings would not have any short-run impacts on the economy: it would not reduce payments to state workers or contractors or reduce household disposable income. Note that the relative economic impacts of different fiscal options would vary significantly by region. The relative economic impacts of cutting the state workforce would be highest in regions where state government accounts for a relatively higher share of employment, such as Juneau and Fairbanks, and where state-funded local government (particularly K-12 education) accounts for a relatively high share of employment, such as rural western Alaska. In contrast, the relative economic impacts of an income tax would be highest in wealthier urban areas such as Anchorage. 12
State General Fund Budgets, FY07-FY16 ($Millions) 5,000 4,500 4,000
State agencies
3,500 Debt service & retirement
3,000 2,500
Special appropriations & fund capitalization
2,000 1,500
Capital budget
1,000 500 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Clearly the short-term economic impacts of significantly reducing the state deficit—which will exceed $3.5 billion this year—could be significant. How large they will be, and how and when they will be felt, will depend on how and when the state reduces the deficit. It will not be possible to avoid significant impacts: Permanent Fund earnings over and above those used to fund dividends are insufficient to close the deficit. While the economic impacts of different fiscal options will surely play a role in the political debate over how to close the deficit, significant economic impacts of the decline in state revenues since 2012 are already inevitable—because of the effects of budget cuts that have already been made but not yet reflected in lower state spending. Since 2013, the state budget has been cut by $2.7 billion, or by 34 percent. Of this cut, $1.9 billion, or 73 percent, was in cuts to the capital budget. Because capital projects take time—often several years—to plan and build, the full impacts of the large cuts that have already been made to the capital budget have not yet been felt as cuts to state spending. When they are felt, they will have significant economic impacts. If, for example, the impacts of $1 billion in capital spending cuts remain to be felt, the estimates shown in the table above suggest that they could cause a total loss of about 9,000 Alaska jobs, or about 3 percent of total employment. The state faces a difficult economic tradeoff in how rapidly it reduces the deficit. Clearly the impacts would be very large if the entire deficit of more than $3.5
billion were to be closed in one year—regardless of how it is closed. For this and other reasons, it is likely that the deficit will be reduced more gradually, spreading the economic impacts out over time. However, there are also significant potential negative economic consequences to delay in significantly reducing the deficit. Continued deficits of more than $3.5 billion could drain state savings in as little as two years—forcing major adjustments with major economic impacts all at once. Delay in reducing the deficit could harm business confidence, reducing business investment and availability of credit to home-buyers and businesses. It could also harm the state’s credit rating. In August, Standard & Poor’s Ratings Services affirmed its “AAA” rating for state bonds but revised its outlook from stable to negative, stating that “the negative outlook reflects that the large structural deficit in the state’s unrestricted general fund could render its overall fiscal position inconsistent with our ‘AAA’ rating. We expect that if lawmakers do not enact significant fiscal reforms to reduce the imbalance within the next year, the state’s rating could begin transitioning downward. The rating migration lower would likely persist and accelerate if lawmakers continued to fail to act as the state’s budget reserves (not including the Permanent Fund) approached depletion.”
Longer-Term Economic Outlook
Over the longer term, once the state has adjusted to significantly lower average oil revenues, the most important factor potentially driving change in Alaska’s economy would
Alaska Business Monthly | January 2016 www.akbizmag.com
Commercial Insurance Employee Benefits Personal Insurance Risk Management Surety
2%
Annual Percentage Change in Total Alaska Employment: Historical and Projected
1%
Annual Percentage Change in Total Alaska Employment:
0%
2005
2010
2015
HISTORICAL 2000
Actual Growth Rate
2020
2000
-2%
2000
-2%
-1%
-2%
-1%
0%
-1%
1%
1%
2%
0%
2%
Annual Percentage Change in Total Alaska Employment: Historical and Projected
2005
2025
2010
2015
PROJECTED HISTORICAL
2005
2010
HISTORICAL
2015 Actual 2020 Growth Rate Forecast with pipeline
2025
PROJECTED Forecast without pipeline
Forecast without pipeline
Forecast with pipeline
Actual Growth Rate
Forecast without pipeline
be the development of an Alaska LNG export project—combining a North Slope gas conditioning plant, a natural gas pipeline, and a Southcentral Alaska liquefaction plant. If built, these would be huge projects, with a combined total cost currently estimated at between $45 billion and $65 billion. If the project proceeds on the currently envisioned schedule, construction employment might peak in 2024 and 2025 at about 6,500 jobs. Subsequent revenues to the state from its project ownership share and LNG sales could approach $2 billion, further stimulating the economy over the longer term. However, whether or when an LNG project will be built remains far from certain. The project is still in the pre-front-end engineering and design (pre-FEED) phase, with the decision about whether to proceed to the much more expensive front-end engineering and design (FEED) phase still at least a year away. Many issues remain to be resolved between the state and the three multinational oil companies participating in the project, and many uncertainties remain about the project cost, markets, and 14
Alaska Business Monthly | January 2016 www.akbizmag.com
Fo
potential economic returns. Given the scale of the project, the fact that hundreds of millions of dollars have already been spent and are planned on pre-FEED studies does not necessarily mean that the project will be built as currently scheduled or built at all. Thus the LNG export project remains a very large economic opportunity, but also an uncertainty, over the coming decade. Beyond the potential LNG project, other important drivers of change in the Alaska economy will continue to be the federal government, the oil industry, the seafood and mining industries, the tourism industry, air cargo, and (over time) newer service industries such as engineering and environmental consulting. It is very difficult to predict how these industries will change over time, given their dependence on highly variable international market conditions as well as federal and state political and regulatory decisions. What is most certain is that there will be changes and surprises—but there is no obvious reason to expect either dramatic long-term growth or decline.
Conclusions
The graph at left shows historical annual growth rates of Alaska employment over the period 2000-2015 as well as our
Growth in total Alaska employment was positive but low and declining over most of the past decade, with a small decline in employment in 2009 during the great recession. We project a decline in total employment of about 2 percent during 2016 and 2017 as a result of cuts to the state capital budget which have already occurred but have not yet been reflected in actual capital spending. projections for 2016-2025. We calculated our projections using ISER’s econometric model of Alaska’s economy, population, and finances. The projections are based on two economic scenarios which consist of numerous assumptions about levels of future basic industry activity (both generic and project specific), national economic variables, and state fiscal policy variables. Both scenarios assume constant oil prices of $55/barrel. The difference between the scenarios is that one assumes that no LNG export project occurs, while the other assumes that a project occurs with the schedule and impacts described above. As discussed earlier, growth in total Alaska employment was positive but low and declining over most of the past decade,
with a small decline in employment in 2009 during the great recession. As shown in the graph, we project a decline in total employment of about 2 percent during 2016 and 2017 as a result of cuts to the state capital budget which have already occurred but have not yet been reflected in actual capital spending. What the graph does not show is the economic impacts of the inevitable further state adjustments to the budget deficit over the next few years, which will have to include some significant combination of spending cuts, new revenues, and/or reallocation of Permanent Fund dividends. These adjustments will make future employment declines either deeper or longerlasting than shown in the graph. However, when the deficit has been significantly re-
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duced, employment rates should rebound to continue the low but positive historical trend—with significantly higher growth rates if an LNG project occurs. Our projections are of course speculative. There are many reasons for which they could appear foolish within a few years or even months from now, in response to
events we cannot foresee, ranging from major oil discoveries to natural disasters to global economic or political crises which might drive prices for oil and other Alaska resources unexpectedly higher or lower. However, our goal is not to argue that the projections will necessarily come true. Rather our goal is to suggest a way of
Mouhcine Guettabi is an assistant professor of economics at the University of Alaska Anchorage Institute of Social and Economic Research (ISER). He holds a PhD in economics from Oklahoma State University, where he specialized in regional and urban economics, health economics, and applied microeconomics. Before coming to ISER in 2013, he was a research economist at the Center for Applied Economic Research (CAER) at Oklahoma State University where he conducted public policy analysis, regional economic development, and economic forecasting. At ISER he has undertaken a wide range of research including updating ISER’s economic forecasting model for Alaska, assessing needs of Alaska veterans, conducting a survey of employer provided health insurance, and studying economic costs to Alaska of higher fuel prices and the economic importance of the Bristol Bay salmon fishery.
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thinking about the factors that may drive Alaska’s near and longer-term economic future—which may be a useful starting point for thinking about the implications of alternative assumptions about these factors. R
Gunnar Knapp is director and professor of economics at the University of Alaska Anchorage Institute of Social and Economic Research (ISER), where he has worked since receiving his PhD in Economics from Yale University in 1981. For much of his career his research has focused on markets for and management of Alaska fisheries. Currently he is engaged in extensive research and outreach about Alaska’s fiscal situation and options. For many years he has taught a University of Alaska Anchorage course on the economy of Alaska.
Alaska Business Monthly | January 2016 www.akbizmag.com
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HR Matters
By Deeta Lonergan and Kevin M. Dee
The Best Way to Handle Layoffs O
ne of the hardest things anyone can go through and that any organization has to do is to let go of people. It is called many things: “downsizing,” “right-sizing,” “streamlining,” “layoffs,” and so on, but in every case someone loses their job. It has profound effects on those being laid off, those who deliver the news, and even those that survive the layoff. Studies have shown that job loss can be a significant emotional event. Only ranked higher on stress scales are death of a spouse or child, divorce, imprisonment, coping with serious illness, extraordinary debt, and homelessness. It is startling that despite such wide ranging negative impacts, many organizations do this difficult task in such a poor way that the remaining negative effects become exponentially worse. There are better ways to handle layoffs. According to the US Bureau of Labor Statistics, our most recent national recession has hit its peak. However, that does not mean that businesses, especially in Alaska, will begin to staff up. With our strong reliance on the oil and gas industry and low oil prices, cuts to related industries, education, and state and federal workforces are already being felt, and more reductions are on the way. It is crucial now, more than ever, for companies to create strategies to transition talent during down times, provide programs and opportunities for remaining employees to develop in order to retain them, and attract new talent when the economy rebounds. Most organizations have core values that state how important their employees are. More and more studies support the link between values-driven organizations and long-term profitability. Yet when tough times come calling, many organizations throw what they said about valuing people out the window and just hand out pink slips. Layoffs need to be strategic and done with compassion or your company will be seen as heartless and will have a difficult time recruiting when the economy does rebound. How you treat people in tough 18
times is the truest measure of what you really value.
Don’t Wait Until the Last Minute
Benefits, overall (63%) Compensation, pay overall (61%) Job security (59%)
Let’s face it—no one volunteers for the task of telling someone they are getting laid off. Managers often will postpone taking action because it’s unpleasant until they have no other choice. The attitude and approach of managers is, “I am sorry, there is nothing we can do.” The truth is usually that they saw it coming some time ago but avoided taking any action on it or preparing for it. Planning and preparing for layoffs so that affected employees can have a facilitated transition is the first step in reducing the pain of everyone involved. Severance packages and extended benefits go a long way to reducing the pain for all parties. Unless significant pre-planning occurs, exit packages seem to be trending to becoming a thing of the past. They also aren’t always fiscally possible in smaller companies. Still, much can be done with enough preplanning to soften the sting of losing a job.
Understand Job Loss Can Be a Significant Emotional Event The first forty-eight hours after being notified of job loss are critical. It feels like a death has occurred and support is critical. Early intervention makes a difference by encouraging employees to look forward to a new future, rather than looking backward angrily at their former employer. Outplacement support of a career coach or similar service enables employees to transition into new jobs more quickly and successfully. Companies that offer outplacement services to former employees reinforce their commitment to their workforce, even in the midst of financial loss, mergers, acquisitions, or management changes. Commitment has a big impact on employees who remain as they typically accept new responsibilities as members of a leaner team.
Demonstrate Respect and Compassion Negative reactions to termination can have a lasting effect on a company’s image for years. Employees who receive support and are treated fairly when terminated usually do not speak out publicly about how bad the company was to them. Using outplacement services reinforces a positive view of the company by employees and the community. The way separations are handled can impact productivity, recruitment, and retention. If handled poorly (without compassion), valuable remaining employees are more likely to look for opportunities outside your company. According to the Society for Human Resource Management’s 2015 report “Employee Job Satisfaction and Engagement,” the top five contributors to employee satisfaction and engagement in a 2014 study are:
Support Individuals during Changing Staffing Needs Employment downsizing is often implemented during economic downturns as a reactive, tactical action. However, the most successful organizations use downsizing more strategically as part of overall workforce strategy. When organizations decide to take the difficult step of letting people go, outplacement services reflect the organization’s ability to be strategic and commitment to their core values.
Respectful treatment of all employees (74%) Trust between employees and senior management (64%)
Invest in the Survivors
Layoffs also affect those left behind. A lot of the work is still there, but now there are fewer people to do it. Acknowledge the losses of friends and coworkers since the survivors will be experiencing grief on several levels. Supporting survivors means coaching and allowing creativity to come forward in order to keep things going. Investing in employee skill development is usually necessary as well. If you planned
Alaska Business Monthly | January 2016 www.akbizmag.com
well for layoffs then transitioning of job duties occurred before employees were let go.
History of Outplacement Outplacement as a business service was created in the mid-1960s to support senior executives. Through the 1970s and 1980s the services continued to expand with the 1990s experiencing a flourishing of the practice. In the past decade there have been significant changes across the global outplacement marketplace. Trends include lack of face-to-face meeting with individual coaches/consultants and primary delivery of services through web-based seminars. Technology can provide strong support for strategies but cannot substitute for personal contact and understanding.
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Conclusion
Anyone who has ever been laid off or terminated knows the pain that occurs with loss of income and job security. By planning in advance and supporting transitions there is much that can be done to ameliorate this already difficult situation. Done well it assists those affected in preparing for and achieving the next chapter in their success. R Deeta Lonergan, M.Ed., owner of Career Transitions, is a Master Career Counselor, trainer, and facilitator with twenty-five years of experience supporting and guiding individuals and organizations during change and transitions. She is an expert in designing and delivering outplacement programs and services. Contact her by phone 907274-4500, visit careertransitions.biz, or email deeta@alaska.net. Kevin M. Dee has a master’s degree from Vanderbilt University and is the president of KMD Services & Consulting. He has more than twentyeight years of experience providing leadership development, organizational development, and human resource services in Alaska and internationally. Contact him at mail@kmdconsulting.biz. www.akbizmag.com
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January 2016 | Alaska Business Monthly
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TELECOM & TECHNOLOGY
Effective email Management Techniques for busy business owners, executives, and managers By Tracy Barbour
E
mail use continues to explode throughout the corporate world. In 2015, the typical business email user handled more than 122 emails daily, receiving 88 emails and sending 34, according to technology market research firm Radicati Group. By the end of 2019, the average corporate email user will send and receive 126 messages a day. Email volumes can be even higher for busy company owners, executives, and managers who are bombarded with messages from all different directions. Some feel like they’re drowning in messages, viewing email as a major distraction and productivity killer. Others have mastered the art of effectively managing email, skillfully using it as a tool to advance their business goals. They’re capitalizing on the capabilities of their email program to create different filters that automatically delete spam, junk mail, and other unwanted incoming messages. They’re also setting up categorized folders, flagging messages, and marking emails as unread to better organize their inbox. Of course, not all email management techniques work for everyone. But here are some of the effective strategies Alaska’s corporate leaders are using to stay on top of their business email: Greg Schlabaugh, Senior Manager Commercial Sales and Marketing for General Communication, Inc. Greg Schlabaugh is constantly handling emails in his work with various com- Schlabaugh mercial applications for GCI. Over one eight-month period, he 20
sent 5,500 messages and received 25,000— which amounts to getting several hundred emails a day. “Over the years, as my position has evolved and I’ve moved up in the company, email volume has increased,” he says. Schlabaugh uses a combination of Microsoft Outlook rules and other tools to effectively manage his emails. Messages with certain addresses and subject lines automatically get filed away in a folder. This includes anything he doesn’t need to address immediately, but will want to reference later, such as newsletters. He also uses flags to highlight items to follow up on and marks important items as unread. Some people live by the “inbox zero” rule, constantly deleting and filing emails so their inbox is empty at the end of the day. That was kind of how Schlabaugh used to be. “I had to get comfortable with letting go and having a fairly full inbox,” he says.
“Instead of using folders to have a neat filing system, I archive things that I think I will need and then use the search feature in Outlook to find them later,” he says. In his approach to reviewing email, Schlabaugh applies triage concepts from his emergency medical background. He does a quick analysis to see who’s sending the email and what it’s about. “Who it’s from and what that subject line is can be the first point in the triage,” he explains. “Then, you can open up the email and look at the length of it and the first couple of lines.” If it’s a long email, he may decide to read it later and tag it as yellow in his triage system. The key to triaging, he says, is to learn what is important and what is not so important. “Learn what you can ignore,” he explains. It’s equally important to use effective techniques when sending email. Bad email
Alaska Business Monthly | January 2016 www.akbizmag.com
begets bad email, Schlabaugh says. It’s essential to communicate clearly, so the recipient doesn’t have to pose questions to clarify the email. “Take the time to properly construct your email,” he says. “Take a moment to proofread and you may find something that you can clarify.” Contrary to how some people use it, email is not a universal tool for collaboration and productivity. That’s why Schlabaugh often uses Microsoft Link’s instant messaging tool to facilitate internal communication. Instant messaging is real-time, collaborative, and great for getting quick answers. “I can share documents, share my desktop, and have a video chat to pull in other members throughout the company,” he says. Web-based solutions like Basecamp and Asana also provide an efficient way to collaborate with work teams. These allinclusive tools include everything needed to manage tasks, including to-do lists, files, projects, messages, schedules, and milestones. “The key is to use the right tool for the job,” Schlabaugh says. As a final strategy, Schlabaugh recommends giving up on trying to manage every email. “It sounds a bit odd, but it helps to recognize that I am not going to be able to control everything and read everything,” he explains.
day,” he says. “It really keeps me from getting behind.” When receiving email, Beedle is diligent about filing messages inside the dozens of folders he maintains for various external and internal issues. He can easily locate and retrieve the information using Outlook’s search tool. Beedle normally files emails when he’s tired and “brain-dead” at the end of the work day. “When I’m filing, it reminds me what I had going on last week, but what people I need to respond to this week,” he says. When drafting email, Beedle is careful to include the date and a descriptive subject
line. “If I’m writing to someone in the bank, I make sure my title is self-explanatory,” he says. “I don’t like generic subject lines like ‘hello’ or ‘touching bases.’” If he receives an email with a generic subject line, Beedle files it in a folder with the most appropriate category, so that it can easily be retrieved. He also reorganizes the most important messages in his sent folder. “I will file the ones with a message I might want to recall later,” he says. “I probably over save.” Many people complain about how much email they encounter, but email can be your friend, Beedle says. He uses email, along with Outlook’s calendar and contacts, as a
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Joe Beedle, CEO of Northrim Bank Joe Beedle deals with about one hundred emails a day as the most senior officer at Northrim Bank, which has fourteen locations statewide. Beedle That’s one hundred emails after he’s set up filters and unsubscribed to unwanted mail. Incidentally, Northrim’s email system processed more than 8.7 million externally-received emails and blocked 1.7 million spam messages from July 1, 2014, to June 30, 2015. Beedle uses Outlook to email through his computer, iPhone, and iPad, all of which are synced. This allows him to check and send email anywhere and anytime. He normally checks his email around 7 a.m. and finds about sixty emails waiting. He checks it again at mid-morning, midafternoon, at the end of the work day, and just before bedtime—in case there are critical issues that need his attention. He also does emailing on the road. “I find that when I’m traveling on business and on vacation, it works for me to look at my email twice a www.akbizmag.com
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General Tips for Managing Email Here are some email management strategies anyone can use to enhance their approach to electronic communication: Learn how to use the full capabilities of your email program. Understand the email retention policy of your company and industry. Not all email needs to be retained. When reading email on a smartphone, don’t forget to scroll below the fold or you may miss some critical information. Don’t be a slave to your inbox. Don’t attempt to respond to every email. Don’t try to use email for everything. personal planner, time management tool, and record keeping device. “I use email as the primary documentation for what came in and out that particular day,” Beedle says. “I utilize email as a tool to manage by—not for it to manage me.” Chris Howell, CEO of Northwest Data Solutions ChrisHowell,wholeads an Anchorage-based software and web app development firm, used to drown in emails before he began capitalizing on Google Howell corporate email’s tab features. The email program automatically redirects incoming email to Primary, Social, Promotions, and Update tabs that Howell can peruse with varying priority levels. These days, Howell fields about three hundred emails a day, mostly from worldwide customers and prospective customers seeking information about the company’s aviation software. He sends anywhere from thirty to sixty non marketing-related emails a day. While email can be a major distraction for some people, it’s a critical and welcomed part of the sales cycle for Howell. “If I’m not getting enough email, that means I’m not doing something right,” he says. Folders are not an effective email management tool for Howell. “I will lose something in a folder,” he explains. “I only see what is in front of me.” 22
So he prefers to add a star to important email messages in his inbox and come back to them later. He can use multiple types of stars to indicate different types of messages, such as a purple star for messages he wants to read again and a red exclamation mark for messages that require follow up. Howell may check his email as many as ten times an hour, starting first thing in the morning. (People in Asia and the Middle East are already working.) He does a final check just before bedtime to see if there are any fires that need to be extinguished. “If there’s nothing urgent, I’ll respond to the emails in the morning,” he says. Howell makes a conscious effort to respond promptly to emails, often replying in a few minutes or a few hours at most. “When you stay on top of the emails, you don’t drop the ball as often,” he says. “Being responsive is part of our corporate culture.” Brevity is also a key email management strategy for Howell. He keeps messages as short as possible, sometimes opting for a one-word reply. “Spit it out and move on with your life,” he says. “People aren’t going to read all of that fluff anyway.” Rosetta Alcantra, President of E3 Environmental Services As the head of a consulting firm for energy, engineering, and environmental clients throughout Alaska, Rosetta Al- Alcantra cantra is meticulous about managing email. Each day, she sends and receives about one hundred messages, with much of her emails coming from clients and E3 Environmental’s parent company, Calista Corporation. In addition to reading her own email, Alcantra reviews all outbound staff emails. “We’re conscious of what gets put out there,” she says. Alcantra, like many business emailers, relies on folders to organize the important messages that land in her Outlook email inbox. For example, she has a folder for every project. And if she responds to a client, she drops a copy of the email into the associated project folder. She also has folders for to-do lists, items to read later, and other reference materials. “I save everything,” she says. But when it comes to managing communication and documents between multiple team members, Alcantra employs SharePoint. “Document control can be really challenging with email,” she says. “Using
SharePoint adds another layer,” she says. “It’s kind of a pain, but at the end of day it’s well worth it.” Alcantra follows a “two-minute rule” for responding to email. “If I can get it done in two minutes or less, I will do it and get it off my plate,” she explains. “We are inundated with information continuously, so you want to get it out of your head as soon as possible.” However, if an email requires more than two minutes to read or research, Alcantra lets it sit in her inbox for a while. “You don’t need to feel like you have to respond immediately to every email,” she says. “Respond later. Don’t distract yourself with all this information flow.” Christine Watkins, General Manager of Personnel Plus Employment Agency Managing two staffing offices in Fairbanks and Anchorage, Christine Watkins uses telephone calls to mini- Watkins mize the seventy-five to one hundred daily emails being transmitted through her Outlook email program. She prefers to handle interactions with clients by telephone and then follows up with an email to confirm their conversation. “I try not to communicate with my clients by email as much as possible,” she says. A phone call accelerates communication, minimizes back-and-forth emails, and reduces the wait time between messages, according to Watkins. Plus, it adds a personal touch that traditional email lacks. “The phone is more personal, and it shows consideration for your client,” she says. To lessen email-related distraction, Watkins resists the urge to constantly check her email. Instead, she reviews and responds to incoming email once every hour. “We teach people how to treat us,” she says. “If we are on our email all the time, they expect us to respond right away.” Responding to a batch of emails not only saves time, but Watkins maintains her focus. “Every time you stop and answer an email, you’re taking your brain or thought process off one task and taking it to another,” she says. Personnel Plus receives numerous emails from companies selling staffing software. So Watkins hits the unsubscribe link as much as possible. She also uses filters to send lower-priority messages to categorized folders that she can review later. For
Alaska Business Monthly | January 2016 www.akbizmag.com
example, she uses the rules in Outlook to archive newsletters, so she can read them whenever she gets time. Jason Feeken, an Assistant Vice President at First National Bank Alaska Thanks to First National Bank Alaska’s effective spam filter, Jason Feeken handles about thirty emails a day in his Alcantra role as an assistant vice president and loan officer for the state’s largest locally-owned bank. His outgoing emails mainly pertain to customer-related loan processing, deposit, and service issues. His internal emails often involve policy updates, meetings, and scheduling. “I’m so light now [with emails] that it’s easier for me to manage,” he says. But that wasn’t always the case. In his previous job at a real estate brokerage firm, Re/Max of the Peninsula in Kenai, Feeken was flooded with up to four hundred emails a day. Over the years, he has learned to simplify his approach to managing email. “I tried to get more complex, but that became a bother,” he says. Now Feeken regards email management as a time management issue. In the past, when he would get really busy, he had tendency of not reading the entire message and missing some important information. So he’s learned not to get in a hurry when reviewing emails. Generally, he tries to address emails first thing in the morning, right after lunch, and before leaving for the day. Like many people, Feeken uses folders and rules to manage his Outlook email. He treats his main inbox like a desktop and transfers his initial “living list” of messages into folders for different topics, agencies, projects, and customers. This keeps important messages from getting lost and newsletters easily accessible to read later. When responding to email, Feeken also uses a simple approach. He makes his messages concise and to the point. “Keep it short, and make sure to address what you want people to respond to,” he says. “It’s the same as a conversation. You need to lead the conversation and stay focused.” R
Alaska’s Labor Employment AT TO R N E Y S BHBC has been proud to represent Alaskan employers for over 40 years, and welcomes the addition of attorney William Earnhart to its labor, employment, and benefits practice. Mr. Earnhart brings 20 years of experience in labor and employment to BHBC, joining members Jennifer Alexander and Amy Walters in providing exceptional services to our clients, including advising and counseling employers on hiring, retention, and discipline matters, drafting employment policies and contracts, benefits administration and compliance, and representing our clients in state and federal courts, administrative agencies, arbitrations, and labor negotiations. BHBC is the Alaskan full-service labor and employment firm.
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January 2016 | Alaska Business Monthly
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EDUCATION
Attendance Equals Success for School and Work
Cheri Spink, Anchorage School Business Partnership Executive Director (left); Lexie Mizeras, senior manager of sales and marketing at GCI (right); and Dimond High School ninth grader Elise Oelke (center) as she is recognized as the first quarter winner of 25,000 Alaska Airlines miles from GCI through the Drive for Perfect Attendance program.
Business partners promote benefits of showing up every day
Photo by Russ Slaten/Alaska Business Monthly
By Russ Slaten
T
o be a great employee, one must start with the basics. One of the most unmistakable traits of an ideal employee is near or perfect attendance. In school, the same principle applies. The Anchorage School District—with the help of United Way of Anchorage and many community and business partners—has the goal of reaching a 90 percent attendance rate for every student in the district by 2020. “Attendance is one of those key behavioral ingredients in making sure kids succeed in school—and ultimately in the workforce,” says June Sobocinski, vice president of Education Impact at United Way of Anchorage. “We’ve discovered through analysis of data and research with our many partners that if you can increase attendance rates, what follows is an increase in reading proficiency, math proficiency, and high school graduation rates, which sets up the right behaviors for workers.”
Attendance Figures
United Way of Anchorage and its partners— known as the 90% by 2020 Partnership—analyzed Anchorage School District data to assess the correlation between attendance and math proficiency. In the regression analysis sample, all students were proficient in math in the third grade with about 85 percent of the students attending school at least 90 percent of the time. In eighth grade, the students who were still proficient in math saw attendance rates with a little more than 80 percent of students going to school at least 90 percent of the time. For the eighth graders who were not proficient in math, only a little over 60 percent of students were attending school at least 90 percent of the time. The partnership further investigated An24
chorage School District data to find a correlation between attendance and graduation rates. In February 2014 the analysis discovered that of the 387 students in the 2013-14 graduating cohort who dropped out, only 23 percent had good attendance freshman year. Finally, a task force of the partnership focused on workforce readiness conducted the 2014 Workforce Readiness Survey to identify the skills and personal qualities necessary for the workplace and to gather perceptions from local businesses on recent high school graduates working entry-level positions. The Anchorage Chamber of Commerce administered the survey, which garnered responses from 213 human resource directors and business owners in Anchorage. The survey asked employers to rate recent high school graduate applicants and workers on their personal qualities, interpersonal and business skills, time management, and critical thinking and problem solving skills. The study concluded that businesses felt only 10 percent of their entry-level applicants and employees demonstrated skills or personal qualities at a base acceptable level, while 90 percent of their personal qualities and skills need improvement or are severely lacking. Only three out of twenty-nine surveyed skills met the base acceptable level—the willingness to learn, taking direction from supervisors, and helping others. The lowest rated skills were among interpersonal skills, separating business and personal time on mobile devices, and time management—especially managing absences appropriately per company policy. “Each employer that I’ve talked to has the same problems—the younger generation right now doesn’t have a good work ethic or discipline, they have expectations of entitle-
ment, and they are shocked when they come to work,” says Troy Jarvis, general manager of Lithia Chrysler Jeep Dodge of South Anchorage. “If we can teach these kids—while they’re in high school—what their expectations are and what kind of work ethic is expected of them, then they will have a better chance of keeping a job and being promoted, resulting in a better workforce and lower turnover.”
Drive for Perfect Attendance
One of the Anchorage School District’s first responses to answering the attendance issue was through the School Business Partnership program and Lithia Chrysler Jeep Dodge of South Anchorage. In its third year, the Drive for Perfect Attendance Recognition Program began in 2013 when Jarvis of Lithia Chrysler Jeep Dodge of South Anchorage offered to give away a car for one Anchorage high school student with perfect attendance, along with Alaska Airlines miles from GCI to four runner-ups and three quarterly winners. “The idea began from a discussion with the school board. They told me about the dramatic decrease in attendance and how bad Alaska’s average was compared to the national average, so I came up with an incentive to motivate the kids to come to school more often by giving away a free car,” Jarvis says. Since the inception of the program overall attendance for the Anchorage School District has improved at middle and high schools. In the first quarter of the 2015-16 school year 3,627 middle school students and 2,324 eleventh and twelfth graders had perfect attendance. As attendance has improved, the number of participating businesses has grown. Instead of yearly grand prizes only for high school students, the Drive for Perfect At-
Alaska Business Monthly | January 2016 www.akbizmag.com
tendance has eleven yearlong prizes: a Jeep Renegade from Lithia Chrysler Jeep Dodge of South Anchorage, four high school runner-up 50,000 Alaska Airlines miles from GCI, four Alaska Railroad tickets to Seward or Denali, and an Ultimate Field Day for the middle school winner’s school from For Fun Alaska. The elementary school winner with no unexcused absences all yearlong will win an all-encompassing trip to Disneyland for four from Alaska Airlines, Saltchuk, and the Anchorage School Business Partnership. Students are also incentivized to achieve quarterly perfect attendance before the end of the year with an iPad from GCI going to a winner on the middle school level and 25,000 Alaska Airlines miles from GCI to a high school student. Dimond High School ninth grader Elise Oelke was surprised on October 29 in her class as she was recognized as the first quarter winner of 25,000 Alaska Airlines miles from GCI during the 2015-16 school year. When asked how she felt about winning, she says, “I’m kind of shocked right now.” Oelke says attendance is just part of going to school, and her mother, Kristen Rubin, who was present along with Oelke’s younger sister when they presented the prize, says, “It’s a family expectation because she can’t learn if she’s not in her classroom. She
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loves to go to school and attendance has never been an issue for her, but giving the award—for other kids who don’t have that drive—gives them something to shoot for.” As Jarvis began the Drive for Perfect Attendance program, GCI was one of the early and strong supporters. The company sees its involvement as a way to show its support in the community, and with the quarterly airline miles giveaways it allows them to interact with students and their families. “GCI has over 2,300 employees across the state, with many of them right here in Anchorage. This program is a way to show our own kids, as well as our friends, neighbors, and customers’ kids, what a difference showing up to school every day can make,” says Lexie Mizeras, senior manager of sales and marketing at GCI. “As an employer, good attendance is expected. We appreciate the opportunity to recognize students who work hard during the year and truly value having excellent attendance.”
Monthly Attendance Champion
The 90% by 2020 Partnership’s workforce readiness taskforce is a collaboration between the private and public sectors with an interest in gaining the private sector perspective to improve workforce readiness in Anchorage youth. It includes representatives
from the Anchorage School District, United Way of Anchorage, Anchorage Chamber of Commerce, Anchorage Community Development Authority, Frontier Tutoring, Nine Star, Alaska SHRM State Council, First National Bank Alaska, CIRI, and GCI. United Way of Anchorage created a survey conducted by a third party, and in 2010 it asked members of the Anchorage community, “Who is responsible for ensuring that Anchorage students are successful and graduate high school—the children and their families, the school system, or the whole community?” 2010 survey results were 41 percent for the whole community, 44 percent for the children and their families, and 12 percent for the school system. That dynamic shifted in 2015 when the same survey resulted with 65 percent of responders saying the whole community is responsible for ensuring that students are successful and graduate high school; 28 percent said it was the children and their families’ responsibility, only 4 percent said it landed on the school system, and 3 percent were unsure. “As time has gone on, the perception of responsibility has shifted, and we’ve been able to build a higher recognition that the community really has a big role to play,” Sobocinski says. In order to capitalize on the willingness of Alaska’s business community to be involved
January 2016 | Alaska Business Monthly
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in encouraging students to build good attendance habits, the 90% by 2020 Workforce Readiness Taskforce helped create the Monthly Attendance Champion program. “An important piece to the equation is that it isn’t just teachers saying attendance is important, and it isn’t just the school district saying it, it’s actually the businesses saying it. And if kids, families, and parents hear it from multiple places, it’s more meaningful,” Sobocinski says. The Monthly Attendance Champion program gives Anchorage businesses the chance to take the lead in promoting good attendance habits which translate from school into the workforce. Businesses simply put on a marketing campaign of sorts to build awareness of the importance of good attendance practices. Through support from United Way of Anchorage, businesses post pop-up banners, target messages on social media, share materials with employees and customers, write blogs, and mention the program in company newsletters, among other means of communication. “Drive for Perfect Attendance is talking to the kids with all of the incentives, but the Monthly Attendance Champion program is different because it’s talking to the adults. It’s sending the message of how crucially important good attendance habits are, and the message is coming from the private sector, not from the schools—parents already hear that from the schools,” Sobocinski says. The program began in September with United Way of Anchorage as the first Monthly Attendance Champion, followed by Lithia Chrysler Jeep Dodge of South Anchorage, First National Bank Alaska, and GCI. January’s Monthly Attendance Champion is CIRI, and sponsors through May include BP, Alyeska Pipeline, the Municipality of Anchorage, Alaska Communications, and ConocoPhillips. Jarvis says it’s rewarding to see the results of all the attendance programs, and he wants to give opportunities when they’ve been earned. “I’ve seen the kids that have won the car and won the [airline] tickets and the impact that it has on them,” Jarvis says. “We’ve heard story after story about making a difference in their life and school and how good things have happened to them— because they’re coming to school more often—and it’s really heartfelt to see the smiles on their faces and make a difference in their lives. And for the kids who have had perfect attendance and really want to make a difference, we’ve hired [them] to come work for us.” R Russ Slaten is an Associate Editor at Alaska Business Monthly. 26
Alaska Business Monthly | January 2016 www.akbizmag.com
BUSINESS EVENTS January JAN
Meet Alaska Conference
Dena’ina Center, Anchorage: Hosted by the Alliance, this is the largest one-day energy conference in Alaska and includes educational forums and a tradeshow. alaskaalliance.com
8
JAN
22-23
ASCE Regions 8 & 9 Leadership Conference
Hilton Anchorage: The conference includes the Workshop for Section and Branch Leaders, the Western Region Younger Member Council, and the Workshop for Student Chapter Leaders. asce.org/Conferences
JAN
Alaska RTI Conference
Dena’ina Center, Anchorage: The theme this year is Integrating Behavior and Academics Into A Seamless MultiTiered System of Supports. Invited presenters included Dr. Louisa Moats, Nicole Frazier (Engaged Classrooms), Tom Hierck (Visible Learning for School Leaders), Karen Karp, Tricia Skyles, Anita Archer, and many others. asdn.org/2015-alaska-rti-conference
23-24
JAN
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
25-29 JAN
27-30
Anchorage AEYC Early Childhood Conference
Hilton Anchorage: “Our Children, Our Families, Our Community: Building Resiliency.” 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
28
Junior Achievement of Alaska Awards Banquet
Dena’ina 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
29-31
Alaska Peony Growers Association Winter Conference
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
February FEB
2-4
Health Summit
Hotel Captain Cook, Anchorage: The 2016 summit tracks will be policy and advocacy, social and economic determi-
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Compiled By Tasha Anderson nants of health, interdisciplinary and partnerships, research and evaluation, and health promotion/ communication/education. alaskapublichealth.org
FEB
6-12
Alaska Statewide Special Education Conference
Hilton Anchorage: The Alaska Statewide Special Education Conference is committed to providing high quality professional development relevant to the cultural, rural, and remote characteristics of our great state. 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
8-12
FEB
15-19 FEB
19-20
Hilton Anchorage: This is the 50th annual conference. aksmc.org
Alaska Dental Society Annual Meeting
ASTE Annual Conference
Hotel Captain Cook, Anchorage: This is the educational technology conference of the Alaska Society for Technology in Education. This year’s theme is “What if: It is Possible.” aste.org
Sustainable Agriculture Conference
The Lakefront Anchorage: 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
23-25
March MAR Alaska Anthropological Association Annual Meeting Sitka Fine Arts Camp, Sitka: 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
2-6
MAR Western Alaska Interdisciplinary Science Conference and Forum UAF Bristol Bay Campus, Dillingham: The theme of the 2016 Conference is “Adaptation: Tides of Change.”
9-12
MAR Arctic Science Summit Week University of Alaska Fairbanks: Arctic Science Summit Week is the annual gathering of international organizations involved in Arctic research. assw2016.org/about
12-18
MAR AFCCA Annual Child Care Conference BP Energy Center, Anchorage: The conference includes seven hours of training, and lunch is provided. alaskafcca.org
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APR ASRT Annual Meeting and Educational Conference Westmark Hotel, Fairbanks: This annual event offers a single location for companies as well as Imaging Specialists from all modalities to network with the largest captive audience in Alaska. aksrt.com
8-9
20-23 FEB
10-13
April
Alaska Surveying & Mapping Conference
Sheraton Hotel, Anchorage: The annual meeting of the Alaska Dental Society, which is “Committed to enhancing the dental profession and the health of all Alaskans.” akdental.org
FEB
MAR Alaska Library Association Annual Conference Westmark Hotel, Fairbanks: 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/fairbanks2016
APR AKMGMA Annual Conference This is the 30th anniversary of the Alaska Medical Group Management Association conference, and the theme for 2016 is “Rock Stars of Practice Management.” akmgma.org
14-16
APR Alaska Native Studies Conference University of Alaska Anchorage: This year’s theme is “Wellness & Healing: Indigenous Innovations & Alaska Native Research.” alaskanativestudies.org
15-16
APR AWWMA Annual Statewide Conference Anchorage: This is a venue to bring information, technology, expertise, curiosity, hunger, and thirst (for refreshment and knowledge) to the Water and Wastewater Industry Professionals in Alaska. awwma.org
18-21
APR NEA-Alaska Spring Conference NEA-Alaska, an affiliate of the National Education Association, is an organization with over twelve thousand members who work in Alaska’s public schools. neaalaska.org
22-24
APR Alaska Rural Energy Conference Westmark Hotel, Fairbanks: The Alaska Rural Energy Conference is a three day event offering a large variety of technical sessions covering new and ongoing energy projects in Alaska, as well as new technologies and needs for Alaska’s remote communities. alaskarenewableenergy.org
26-28
January 2016 | Alaska Business Monthly
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EDUCATION
Next Generation Career Planning Job opportunities and job preparations for Alaska’s future workforce By Tasha Anderson
F
or individuals planning to enter the workplace, it’s important to be aware of what’s going on in a business community. While some skills and work traits are universal and timeless—communication, critical thinking, punctuality—others come and go with changing business priorities, cultures, and technology. According to the Alaska Department of Labor and Workforce Development’s 20122022 Industry Forecast, the industry projected to have the highest growth in terms of percentage of new jobs is Healthcare and Social Assistance, Public and Private, with a projected 11,247 jobs being created in that ten-year period, a 25 percent change. According to the report, projections for all jobs for the ten-year period show some increase except for federal government jobs, expected to decrease by 9 percent, anywhere from 1 to 297 positions. Local government jobs show the lowest positive rate, projected at 0.2 percent, only forty-one new jobs by 2022. Other industries with high rates of projected growth, in terms of numbers of jobs, are Management of Companies and Enterprises at 19.9 percent, 510 jobs; Mining (including Oil and Gas) at 19.8 percent, 3,374 jobs; Professional, Scientific, and Technical Services at 16.3 percent, 2,458 jobs. The expected growth for all industries is 10.8 percent, or a total of 36,113 new jobs by 2022.
UAA
The University of Alaska Anchorage (UAA) campus is part of the U-Med district in Anchorage, which is comprised of UAA, Alaska Pacific University, Providence Alaska Medical Center, and the Alaska Native Medical Center. These two medical facilities are Alaska’s only Level II Trauma centers; Providence received this designation in March 2015. For those interested in pursuing a career in an industry which is currently experiencing shortages and only has high expectations of growth, UAA is smack in the middle of Alaska’s healthcare community. Last fall the School of Nursing 28
“It’s incredibly important for students to prepare early for their career.”
—Danica Bryant Workforce and Career Development Coordinator, Career Development Center, UAA
at UAA announced the start-up of its Post Masters Doctor of Nursing Practice program and had applied for candidacy status for the program to be accredited. Danica Bryant, workforce and career development coordinator at UAA’s Career Development Center, says that the Center is aware of the value of the proximity of these two hospitals, and works to connect students not only with these two centers but with Alaska Regional Hospital and other healthcare facilities and clinics, ensuring that students entering the healthcare field have access to job training and career opportunities. Of course the Career Development Center at UAA isn’t just focused on providing aid to students entering the healthcare industry. “It’s incredibly important for students to prepare early for their career,” Bryant says, adding that the Career Development Center encourages all students, from freshmen on their first day to seniors with one foot out the door, to take advantage of the Center’s myriad of services and programs. For example, in November 2015 UAA arranged an information session and on-campus interviews with the FBI for students that had recently graduated or those interested in internships. Throughout the academic year the Center organizes “Career Networking Nights,” which requires registration, and “Walk-By Wednesdays,” where any student or alumni can stop by a Career Development Center table located on campus for a quick, free resume review. UAA’s Career Development Center also
has a Job Shadowing program, which Bryant says gives students an opportunity to get real workplace experience, as well as some insight into the type of career they might want to pursue. She says that the involvement of the Anchorage business community in this program is invaluable, and adds that it’s not just students that receive a benefit: businesses gain an opportunity to network with the up-and-coming workforce. One relatively new service that the Center provides is its Professional Clothes Closet. Professional clothing in excellent condition can be donated to the Center, where staff organize the clothing items, which are then made available to students and alumni who can select up to five pieces per visit, with privacy so they can try them on, that they can then keep. “It’s a huge benefit for those who might not have the resources to purchase professional clothing for an interview,” Bryant says. “We make sure all of the clothes are in good condition, without any holes or stains or anything.” Bryant emphasizes that the Center is not just for current, full-time students. “We’re excited to help UAA Alumni in further developing their career, whether it’s reviewing a resume or going over second career options.” She says that any student that has ever attended UAA, even those who have only enrolled in a single course and aren’t pursuing a specific degree, are welcome to use UAA’s Career Development Center as a resource.
UAS
Career development can be seen through two lenses: finding a job and building the skills to succeed in a job. “They are unequivocally both important, but one— finding a job/career—is more resourcebased where the other—building skills to succeed in a job/career—is ongoing continuous development,” Deborah Rydman of the University of Alaska Southeast’s (UAS) Career Services says. Career Services addresses both sides of the coin. Rydman says
Alaska Business Monthly | January 2016 www.akbizmag.com
“Those who [prepare for a career early] will have the advantage over those who don’t, so it’s strategic to prepare early.”
—Deborah Rydman Career Services, University of Alaska Southeast
that a large part of finding employment “involves discussion around what type of job or company [students] are interested in exploring; teaching them how to effectively target/customize their resume and cover letter; preparing them for phone, Skype, or in-person interviews through both reviewing interviewing strategies and setting up mock interviews; and coaching them on how to prepare for starting a new job.” When it comes to continually building skills, “Career Services is in the process of developing a stronger alumni network connection with an added emphasis around strategies on how to be successful in the workplace,” she says. “Those who [prepare for a career early] will have the advantage over those who don’t, so it’s strategic to prepare early,” says Rydman. “I’m a strong proponent of students gaining experience through internships, part-time/seasonal employment, or volunteer opportunities that align with their degree program. Students who have
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acquired this experience during their undergraduate years have a significant advantage over those students who did not—it makes it challenging to market students to employers based on coursework relevancy alone.” Career Services at UAS also employs various methods to bring resources to students that will assist them in their career development. In the fall, Rydman says, Career Services has a session about finding a job on campus, including follow-up appointments to go over resumes, cover letters, and references. In October 2015 UAS co-hosted with the Student Alumni Association and the School of Management an Employer Panel and Networking event that was televised and recorded by the local station. Students had an opportunity to submit questions to four panelists before and during the event, which was followed by a networking opportunity. She says that in the spring of this year they will have an event in a similar format titled “Getting
Ready for Life after College: Social Media.” “Each year we offer an Employer Panel that features local employers from industries that align with each of our four schools [School of Management, Education, Career Education, and Arts and Sciences] which is available for students to participate in person or online,” she says. Career Services also provides job search workshops, including information on resumes and cover letters, interviewing strategies, and networking techniques, both in person and online “for our distance students,” Rydman says. It is important at UAS to connect students and the business community. Rydman says, “At UAS, our deans, directors, and faculty members foster strategic connections with professionals in our business community that result in direct placement of our students with research projects, internships, and workplace opportunities. Our Chancellor’s office is actively engaged with the Juneau Economic Development Council, Juneau Chamber of Commerce, and Rotary International, which provides additional connections for our students.”
Around Alaska
Throughout the state colleges and universities are preparing students to be effec-
January 2016 | Alaska Business Monthly
29
Invested in responsible development for Alaska’s future. For over 20 years Donlin Gold has been carefully preparing to ensure responsible development in Alaska. With our thoughtful planning and industry-leading technology, we are committed to a mining project that will contribute to a thriving Alaska economy. DonlinGold.com
tive in various industries. Career Services at the University of Alaska Fairbanks has various programs, such as a Law School Fair, Engineering Career Week, Accounting Recruitment Week, and a Job & Internship Fair. Career Services in Fairbanks is now utilizing College Central Network, which is an online resource that connects students with employers, as well as tutorial, webinars, and instructional videos. By appointment, Career Services offers counseling for resumes, cover letters, and mock interviews. The department also organizes on-campus recruiting. Alaska Pacific University’s Career Services assists with planning career choices, graduate school searches, or finding employment. APU provides access to a wide range of resources for its students, including assessments like the Myers-Briggs Type Indicator and Alaska Career Information Services; career counseling by appointment; and online resources such as job searches and online sites that help a student make informed career decisions. It also allows local businesses to post open positions on its website.
Looking Forward
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Entering a massive industry such as healthcare or oil and gas isn’t the only path to a satisfying career; there are often opportunities in smaller or growing industries. Paul Martz, Economist II with the Alaska Department of Labor and Workforce Development, says, “The low employment industries in Alaska tend to be relatively stable over time. The one small industry that has been growing quite extensively in the past few years is beverage manufacturing, mostly as a result of new breweries, although I’d still classify the industry as quite small.” An April 2014 Alaska Economic Trends article titled “Alaska is Big on Microbrews” by Neal Fried explores the growth of this industry, saying that Alaska ranked fourth in the nation for breweries per capita in 2012, behind Vermont, Oregon, and Montana. In 2002 there were four brewers open in Alaska, a number which grew to fourteen in 2013. Additionally, the 61 brewery jobs in 2002 grew to 290 by 2013, with total brewery payroll being approximately $7.6 million in 2012. In 2012 payroll for brewpubs was nearly $19 million. The industry is expected to continue to grow. There are a myriad of career paths; whether one is looking to take advantage of gaps in a massive, booming industry or build a new one from scratch, Alaska is full of next generation opportunities. R Tasha Anderson is an Associate Editor at Alaska Business Monthly.
Alaska Business Monthly | January 2016 www.akbizmag.com
JUNIOR ACHIEVEMENT SPECIAL SECTION
Volunteer of the Year
Janet Johnson Junior Achievement of Alaska Volunteer of the Year Janet Johnson at the 2nd Annual JA in a Day at the Nikiski School last month. Johnson is the Chair of the Kenai Area JA Committee, and under her leadership JA programs have increased 300 percent in Kenai area schools. She was nominated by her peers. Besides volunteering for JA, Johnson is the Credit Union Branch Manager at Denali Alaskan Federal Credit Union’s Kenai Branch. © Judy Patrick Photography
special section
Junior Achievement
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Junior Achievement special section
Laureate Michael Burns By Russ Slaten
M
ichael Burns, former Executive Director of the Alaska Permanent Fund Corporation, passed away last year in July at the age of sixty-eight, yet his legacy of dedication and commitment to Alaska still lives on in the state’s business community. “He was a very personable person. He liked people, enjoyed life, and was a good teacher. He had a mindset to be very organized and was a great communicator,” says Marc Langland, retired Northrim BanCorp chairman, who worked with Burns at Alaska Pacific Bank and was a personal friend. “I loved being around him when he was speaking to a group or just giving people advice, and I felt like Alaskans were so privileged that Mike and [his wife] Rebecca decided to spend most of their lives in Alaska with us,” says Mary K. Hughes, who served with him on the University of Alaska (UA) Board of Regents and UA Foundation Board of Trustees.
Financial Leadership
Burns retired from the corporation that oversees the Alaska Permanent Fund last June due to health concerns. Burns initially became head of the Alaska Permanent Fund Corporation in 2004 when total assets were $26 billion. He oversaw the Permanent Fund as assets rose to about $40 billion, slid back down to $26 billion in 2009 as a result of the 2008 financial crisis, and was valued at $52.8 billion at the end of fiscal year 2015 when he retired. Burns helped diversify the corporation’s assets through direct investments in private venture operations and invested in infrastructure around the world like airports, ports, and wind farms that provide a reliable return. “The Permanent Fund attracts attention from all over the world as a model for how to turn a non-renewable natural resource into a renewable financial resource. It is an important part of Alaska’s history and www.akbizmag.com
Michael Burns Courtesy of Alaska Permanent Fund Corporation
our state’s future, and I am honored to have been given the opportunity to contribute my efforts alongside those of the Board of Trustees and our staff,” Burns said in the Letter from the CEO published in the Alaska Permanent Fund Corporation 2015 Annual Report. Prior to working at the Alaska Permanent Fund Corporation, Burns began his career in the financial industry as president at Alaska Pacific Bank in 1985. In 1987 Alaska Pacific Bank and First National Bank of Fairbanks combined to form Key Bank of Alaska, and Burns became the president and CEO of the new bank. Burns directed the growth of Key Bank of Alaska from eight to more than twenty branches to become the third largest bank in the state; he retired in 2002.
Natural Community Leader
In addition to leaving a lasting impression in Alaska’s financial industry, Burns played a major role in numerous community and state organizations. “His involvement in the community is an important part of leading by example, and he worked with a lot of people,” Langland says. He served three terms as the chair of the UA Board of Regents and was a member of the UA Foundation Board of Trustees. “As chair [of the UA Board of Regents] you have to spend so much time, not only with the Legislature, the policymakers, and the governor but also with our students, the faculty, the administration, and the staff;
and he did it without being bothered. He did it with such ease and grace that it came so naturally to him,” Hughes says. Burns also served on the Nature Conservancy of Alaska Board of Trustees, Alaskan Command Civilian Advisory Board, Alaska Airlines Community Advisory Board, Alaska Community Foundation, and the United Way Trustee Council, among others.
Unique Person
“Mike mentored some of his employees and people on his various boards,” Hughes says. “He wanted to make sure that those people had every bit of advice and time—through his commitment—that was necessary to make them better, not only at their jobs but to be better individuals and human beings.” Burns earned a law degree from the University of Denver and his bachelor’s in political science from Knox College in Galesburg, Illinois. Burns and his wife Rebecca moved to Anchorage in 1985 where they raised three sons and one daughter. “It’s a very unique type of person that has what Michael had,” Hughes says. “Everything he did, he did with joy and an appreciation of living, and I think that family commitment and the love he showed for his family lifted him and allowed him as a person to be the best he can be as a banker, and also extend himself to the community.” R Russ Slaten is an Associate Editor at Alaska Business Monthly.
January 2016 | Alaska Business Monthly
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special section
Junior Achievement
Laureate Lynn Johnson Q&A By Russ Slaten Alaska Business Monthly: How did you get your start? Johnson: I grew up in California and came to Alaska the first time when I was fourteen years old working in my parents’ civilian helicopter business. I enjoyed that. That was a big deal, coming from central California Johnson in the late ‘60s. I got to know a lot of people and really liked coming to Alaska every summer. It was an annual pilgrimage, and in the course of doing that I met the gentleman [Ed Clinton] I ended up starting our company with, DowlandBach. First came to Alaska in 1968 and was presented with the concept of joining him and starting a business five years after he initially mentioned it. We started the business in May of 1975. Alaska Business Monthly: What was it like growing up in California? Johnson: I grew up in central California, San Joaquin Valley, very agriculturallyoriented. My grandparents emigrated there from Sweden. My parents were from a little place called Turlock, California, in the hot and dry San Joaquin Valley. I was fortunate that when I was a junior in high school— through a family situation—I came up to Alaska every summer throughout high school and college and ended up moving here permanently in 1974 and started our business [Dowland-Bach] a year later. Alaska Business Monthly: Did you have a role model growing up? Do you think young people benefit from role models? Johnson: What I have done is look at different people over the years and said, in this sector, I want to be like this person in regard to business and like this person in regard to personal relationships— many different people for many different reasons. A few of my role models were my stepfather, my dad, and Ed Clinton; he was fifteen years older than me. Somewhat as a joke and somewhat as a 34
compliment, I tell a lot of my peers, ‘I want to be just like you when I grow up.’ And again you don’t want to be exactly like somebody, because everyone has an Achilles heel or blemish. It’s not bad, but you do benefit from role models. Alaska Business Monthly: Did you have Junior Achievement in school? If so, what do you remember? Johnson: Junior Achievement wasn’t prevalent in my time, but I support the Junior Achievement’s values to educate younger people in business. Alaska Business Monthly: Do you believe there is value in educating young people about free enterprise? If so, why? Johnson: There is value in educating teens about free enterprise because there are certain risks to being an entrepreneur, and educating people to do something yourself, think outside the box, and come up with a new idea is important. If Steve Jobs hadn’t thought up a new computer that’s simpler to use, we wouldn’t have Apple. Generally anything that is revolutionary more often than not is generated in the private sector by some inventor or entrepreneur. So the education of business principles is a mainstay of entrepreneurship and Junior Achievement. Alaska Business Monthly: What can schools and parents do to ensure that young people don’t encounter financial pitfalls? Johnson: Not alerting a young person of the fact that not paying your bills on time will haunt you for the rest of your life can lead to a major financial pitfall. If you’re in high school with your first credit card and first checking account and you’re bouncing checks, you may think, ‘I’m a kid, it’s ok,’ but it will haunt you—particularly credit-worthiness. If you are haphazard in your early life about creditworthiness, it’s a trait that will carry forward, and that bad reputation could potentially
limit you if wanted to start a business and borrow money. Be conscious of your assets and conscious of your credit rating. That may sound a bit old school, but I think it’s important. Alaska Business Monthly: What can the business community offer to young people? Johnson: The business community can do many things. They can offer role models, early employment, technical training, networking capabilities, and a lifelong career. If you’re a young person working at a high-performing and well-respected business, it will enhance your personal reputation. A potential employer will think, ‘Oh, you work for a great company.’ That’s the best recommendation or reference that a young person can have. A younger person associating with a successful and highlyregarded business serves as a reference. Alaska Business Monthly: In your opinion, what can we do to prepare young people to succeed in a global economy? Johnson: I got a one word answer to that—travel. Travel internationally, travel throughout the states, just go there and see how the other half lives, see how they do business and recreate. Travel can open your eyes to what they need there and to what you can provide. What can I do to bring or cross pollenate from Alaska and make a success. If I had one answer to this, I would say to travel as much as you can. Alaska Business Monthly: What is one piece of career advice you have for Alaska’s youth? Johnson: Be open to change. Don’t feel that any job is beneath you, because you will always learn something from it. Become a plumber or auto mechanic and get an MBA—then you have the technical hands on and the business side of things. And be open to all opportunities; try not to have a closed mind. In the end of the day, it’s not what you have, it’s what you get to do. R
Alaska Business Monthly | January 2016 www.akbizmag.com
Junior Achievement special section
© Judy Patrick Photography
JA Our Families is a classroom-based Junior Achievement program that introduces students to entrepreneurship and how family members’ jobs and businesses contribute to the well-being of the family.
Financial Literacy 101
The guide below is a suggested budget from the Junior Achievement Economics for Success program for sixth graders. This is a suggestion that worked for our class; ultimately you decide what the most responsible decision is for you.
It’s not what you earn—it’s what you keep and how you spend it By Bradley Loncar and Aaron Hippler
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ven if you’re rich, you must plan your spending. Everyone has to stay within a budget. Whether you’re a movie star or sell popcorn at a movie theater, it’s simple: You will have financial problems if you spend more than your net income. Everyone should try to have a balanced budget. A balanced budget means spending appropriate amounts for your expenses, primarily food, clothing, shelter, transportation, savings, and charity. How do you know how much to spend in each category? It depends on you and what you value. Some people choose to spend a large portion of their monthly budget on www.akbizmag.com
food and entertainment and less on housing and transportation. The best part of a budget is that you can make decisions that match your lifestyle. R
Budget Suggested Category Percentage Savings 10% Charitable Giving 5% Housing 25% Transportation 15% Food 15% Entertainment 10% Clothing 5% Other (utilities, phone, insurance) 15%
Bradley Loncar (at left) and Aaron Hippler (right) are Northern Lights ABC Students in Anchorage. Photos courtesy of JA Alaska
January 2016 | Alaska Business Monthly
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special section
Junior Achievement
Laureate Jason Metrokin Q&A By Russ Slaten Alaska Business Monthly: How did you get your start?
and allowing them to learn about the creation of a business, the marketing of a business, Metrokin: Right out of budgeting, and the development undergraduate school, I moved and sale of products. Those basic back to Alaska, and my first fundamentals of business work job out of college was working whether you’re creating a small at National Bank of Alaska Junior Achievement company [acquired by Wells Fargo in or running a multi-billion 2000]. Looking back on it, there Metrokin dollar Native corporation. If are quite a number of business you don’t have strong financial leaders in our community that got their fundamentals, it’s difficult to find success. start with National Bank of Alaska. They had a very active and involved management training program, so I was working as a Alaska Business Monthly: Do you believe management trainee. I did that for about there is value in educating young people eight months, and my first assignment was about free enterprise? If so, why? to Ketchikan, so I got some exposure in living in other parts of Alaska—in this case Metrokin: There is definitely value in in Southeast where I had never lived before, teaching young kids about free enterprise. and it was a real eye-opener for me. Young people will eventually find success whether it’s personally or professionally by understanding global markets, trade, Alaska Business Monthly: Where did you and the value of the dollar. If young people grow up? understand what the value of cash is and how it can benefit them—including the use of Metrokin: I was born and raised in cash, the savings of cash, and the leveraging Anchorage. My father’s side of the family of cash—it really is a life-long lesson. comes from Bristol Bay and Kodiak, so he grew up in his early childhood in Naknek and later through high school lived in Alaska Business Monthly: What can Kodiak. My mother grew up on the East schools and parents do to ensure that young Coast, and her family moved to Kodiak people don’t encounter financial pitfalls? when she was just out of college, so my parents met in Kodiak and ultimately Metrokin: Young people need to understand moved to Anchorage where I was born. that over-leveraging themselves and getting into significant personal debt can be extremely challenging well into their future Alaska Business Monthly: Did you have as adults. And if young people understand Junior Achievement in school? If so, what early and often that being smart about their do you remember? finances—and really study and educate themselves on the importance of strong Metrokin: I did not, to my knowledge, financial sense—they’ll be so much better have a Junior Achievement program in off in their adult lives. my school; however, when I mentioned You also can’t start too early. My boys are my first assignment out of management seven and eleven, and we’re already teaching training with National Bank of Alaska was them about the importance of saving money, Ketchikan, there were Junior Achievement spending money—kids ‘want’ all the time— programs in Ketchikan. In fact, I and one but teaching them to buy things when they’re of my coworkers led a group of high school on sale, not at their peak value, or saving students in creating a product that they sold money, or just as important, making financial in the community. It was a fun experience contributions to charitable organizations. because I got to take the skillsets I was We’re teaching them now about the power of learning as a banker and apply them in a giving to others, especially those in need, and real-life situation working with young kids it’s not too early to start. 36
Alaska Business Monthly: Did you have a role model growing up? Do you think young people benefit from role models? Metrokin: Yes on both, I was very fortunate to have multiple role models in my life, and starting early on it has certainly been my father Dennis [Metrokin]. Similarly, I’ve been fortunate enough to have additional role models, Jeanie Leask, former president of [the Alaska Federation of Natives], [Now Lieutenant Governor] Byron Mallott my father-in-law, Marc Langland with Northrim Bank, has been a strong role model of mine for many years. I’ve been very blessed with a number of individuals who’ve been helpful to me. Alaska Business Monthly: In your opinion, what can we do to prepare young people to succeed in a global economy? Metrokin: a lot of young people are buried in their devices—people need to pick up their heads and actually have a social interaction, person-to-person, human-to-human. In a global society, it’s really important that young people understand that there’s a time to be connected to their technology, and there’s a time to get disconnected and interact personally with people. Alaska Business Monthly: What is one piece of career advice you have for Alaska’s youth? Metrokin: It would be to not be afraid to step out of your comfort zone. Sometimes that means getting out of your cubicle and interacting with people, networking, learning from others, and really being a civic-minded individual. Anchorage is one big small town, and the more that people can get out and interact with others, the better off they’ll be. They’re going to learn from others, they’re going to understand and respect others, and they’re going to develop a network of people that they can call on, whether it’s for advice, maybe they’re looking for a new career change, or they’re just looking for a different perspective on something that’s important to them. If young people can take the time—and sometimes it’s not easy—to step out of their comfort zone and interact with others from different backgrounds, different cultures, different perspectives, that is something that can take them a long a way. They can always fall back on the idea that “I’m willing to step out and learn from different people.” R
Alaska Business Monthly | January 2016 www.akbizmag.com
Congratulations to the 2016 Alaska Business Hall of Fame inductees, including our own President and CEO, Jason Metrokin (left). Your leadership strengthens Bristol Bay for everyone who calls this region home. And your vision will allow BBNC to further contribute to the Alaska economy for generations to come.
Congratulations Jason Metrokin
special section
Junior Achievement
Getting Ready for College A four-year checklist for high school students By Sarah Schupp
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ost of this checklist will be done by the student, but parents can encourage, proofread, and help the whole process stay on track.
Freshmen Plan
Create a free profile at jamyway.org to create a resume, explore career fields, budget for college, and receive tips to launch a business or startup. Take challenging classes in core academic courses. Work with a school counselor to create a yearly schedule for meeting graduation requirements. Talk to an advisor or school counselor about taking AP and honors courses. Get involved with community-based and leadership-oriented activities.
Sophomore Plan
Attend college and career events. Research funding opportunities for college including scholarships, grants, loans, etc. Reach out to mentors in fields of interest. Continue exploring college and career options. Consider taking a practice test to prepare for the PSAT.
Juniors—Fall Plan
Take the PSAT. Students must take the test in eleventh grade to qualify for National Merit scholarships and programs. Attend college-prep presentations. Register for college admission exams (SAT and ACT); take practice tests to prepare. Make a spreadsheet of target schools with deadlines for Early/Regular/Late/Rolling decision. Contact colleges to request information and applications.
Juniors—Spring Plan
Start college visits. Narrow down the colleges being considered. Make decisions regarding early decision or early action programs. Enter and/or update information in the FAFSA4caster. 38
Take a look at your social media presence and keep in mind that some colleges check social media when making decisions on whether or not to accept a student.
Seniors—Fall Plan
Register for and take (or retake) the SAT and/or ACT, if not already done. Complete and submit college applications prior to deadlines. Complete and submit scholarship applications prior to deadlines. Request transcripts and letters of recommendation. Register for a Federal Student Aid PIN. Meet with a counselor to verify that graduation requirements will be met on schedule. Work with parents to complete and submit the FAFSA. Consider including an arts/athletic supplement or resume with your application.
Seniors—Spring Plan
Follow up with colleges to make sure all applications materials were received. Have mid-year grade reports sent to all schools applied to. Decisions arrive in the mail and/or online in March. Compare financial aid awards and evaluate options. If wait-listed, express interest to the school. Explore late admission possibilities at other colleges. Send a deposit by May 1 to accept a spot at the college of your choice. Respond promptly to communications from college information about housing, orientation, course registrations, etc.
Connect with future classmates (and perhaps find a roommate) through the college’s official social media sites. Checkout more resources for students and parents at UniversityParent.com. R
Sarah Schupp is the CEO and founder of UniversityParent.com, the number one site for college parents to find everything they need to help their student succeed. Schupp founded UniversityParent.com from her experience at the University of Colorado. She is a Junior Achievement alumna.
Alaska Business Monthly | January 2016 www.akbizmag.com
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special section
Junior Achievement
The Next Decade of Career Opportunities Top twenty US jobs by growth and workers needed
Occupation Industrial-Organizational Psychologists Personal Care Aides Home Health Aides Insulation Workers, mechanical Interpreters and translators Diagnostic medical sonographers Helpers—brickmason, blockmasons, stonemasons, and tile and marble setters Occupational therapy assistants Genetic counselors Physical therapist assistants Physical therapist aides Skincare specialists Physicians assistants Segmental pavers Helpers - electricians Information security analysts Occupational therapy aides Health specialties teachers, postsecondary Medical secretaries Physical therapists
Growth Rate, 2012-22 53% 49% 48% 47% 46% 46%
2012 Median Pay $83,580 $19,910 $20,820 $39,170 $45,430 $65,860
43% 43% 41% 41% 40% 40% 38% 38% 37% 37% 36% 36% 36% 36%
$28,220 $53,240 $56,800 $52,160 $23,880 $28,640 $90,930 $33,720 $27,670 $86,170 $26,850 $81,140 $31,350 $79,860
Fastest Growing Occupations: Twenty occupations with the highest percent change of employment between 201222. Published January 2014 by the federal Bureau of Labor Statistics.
The Alaskan Skills Gap
The level of educational attainment is not keeping up with the number of skilled workers needed. Each year, eight thousand Alaskan students graduate from high school. Several thousand students leave school without a diploma. Additionally, of the students who go on to college, one in five stop attending by nineteen-years-old. These statistics indicate that students are leaving high school without a clear idea of what they want to do next, or they do not see a connection between school and their future. This helps explain why Alaska ranks fifth in the nation for teens not in school and not working. The number of Americans with a high school degree or less is predicted to increase and the number of jobs requiring postsecondary education is on the rise. According to the McKinsey Global Insti40
Occupation Personal Care Aides Registered Nurses Retail Salespersons Home Health Aides Food Preparation and servers Nursing Assistants Secretaries and Administrative Assistants Customer Service Representatives Janitors and Cleaners Construction Laborers General and Operations Managers Labors and freight, stock, and material movers Carpenters Bookkeeping, accounting, auditing clerks Heavy and tractor-trailer truck drivers Medical secretaries Office clerks Childcare workers Maids and housekeeping cleaners Licensed practical and vocational nurses
Number of New Jobs 580,800 526,800 434,700 424,200 421,900 312,200 307,800 298,700 280,000 259,800 244,100
2012 Median Pay $19,910 $65,470 $21,110 $20,820 $19,260 $24,420 $32,410 $30,580 $22,320 $29,990 $95,440
241,900 218,200 204,600 192,600 189,200 184,100 184,100 183,400 182,900
$23,890 $39,940 $35,170 $38,200 $31,350 $27,470 $19,510 $19,570 $41,540
Most New Jobs: Twenty occupations with the highest projected numeric change in employment between 2012-22. Published January 2014 by the federal Bureau of Labor Statistics.
tute, there will be 5.9 million more high school dropouts in 2020 than jobs available for workers with that level of education. As a result, many occupations are likely to see shortages including nutritionists, welders, nurse’s aides, computer specialists, and engineers.
Junior Achievement: A Solution to the Workforce Skills Gap Junior Achievement (JA) is uniquely positioned to serve as a partner in this endeavor by equipping students with the skills they need to be ready—for college and for a career. Relevance
JA programs help bridge the gap between what students are learning in the classroom and the application of this knowledge to the real world. More than nine out of ten teachers and volunteers (91 percent) agree or strongly agree that JA programs connect what is
learned in the classroom to the outside world.
Skill Development
JA answers with cutting-edge skill-building that enables young people to find meaningful, productive careers. JA alumni are 25 percent less likely to be unemployed than non-alumni. JA alumni earn 50 percent more than non-alumni.
Focus on Educational Attainment
JA reinforces the value of education and the importance of educational attainment. In longitudinal studies, JA students were significantly more likely than their peers to believe they would graduate from high school and graduate from college. Eight out of ten students report that JA programs helped reinforce the importance of staying in school. R
Alaska Business Monthly | January 2016 www.akbizmag.com
Source: bls.gov/ooh/fastest-growing.htm
Source: bls.gov/ooh/fastest-growing.htm
By Junior Achievement Alaska Staff
Junior Achievement special section
JA CEO Academy Growing Alaska’s Future Business Leaders
Courtesy of Rest in Fleece
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he Junior Achievement Company Program unlocks the innate ability in students to fill a need or solve a problem in their community by launching a business venture— unleashing their entrepreneurial spirit. This thirteen-week program enables students to build and manage their business, interact with experts from the business community, and examine business related topics and tools. Participating schools in Anchorage, Nome, Point Hope, Ketchikan, Sitka, and Juneau have successfully run student-led businesses in the past three years. Here is a spotlight on two different business ventures currently operating in Anchorage schools.
The Rest in Fleece company at the The Northern Lights ABC Middle School with their first customer and one of their handmade fleece blankets.
Romig Middle School: Java Jackets Led by JA Volunteer Cynthia Mejia–JANCO Commercial Cleaning, and School Business Partnership Teacher Chris Fliss, this group of students formed their company and came up with a product that complements their current classroom activities. Fliss’s class operates the school’s café, and after pitching four ideas to a group of Shark Tank investors, the choice was obvious—handmade java jackets to be sold at their coffee shop! These eco-friendly, reusable, handmade, limited edition java jackets will be coming soon to a coffee shop near you. Student Leadership: President Nicholas Nanthalaksa, VP Finance Billy Thomas, VP Marketing Paige Brown, VP Human Resources Zariya Whidbee. R www.akbizmag.com
Northern Lights ABC Middle School: Rest in Fleece Led by JA Volunteers Rick Whitbeck–Alaska Communications, Karen Smith–Bogard Logistics, and Northern Lights ABC Language Arts and Science teacher Carole McKee, this group of future CEOs meets twice a week from 7 a.m. to 8 a.m. to run their company. Students created a business plan to sell handmade fleece blankets for $25 each. Student Leadership: President Ashley Smith, VP Finance Aaron Hippler, VP Human Resources Maezelle Tacas, VP Public Relations Abigail Faulkner, VP Marketing Riley Cravens, VP Production Skyler Helgesen. R
January 2016 | Alaska Business Monthly
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special section
Junior Achievement
Photo credit here
Casey Conner (bottom left and above center) is the founder of 907Boards. Photos courtesy of Casey Conner
Teen Entrepreneurs Alaska’s young adults start up the state’s future By Heather A. Resz
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tarting businesses isn’t how most people spend their teenage years, but for some Alaskan teens, businesses they started in middle school and high school are continuing to grow and thrive. There’s Mike Dunckle who started Mike’s Music in Eagle River more than two decades ago when he was twelve. 42
Grayson Davey was inspired to launch a line of wearable survival gear after two friends nearly died of exposure following a boating accident. Kyra Hoenack was serving on the board of a local outreach group for homeless teens when her good idea blossomed into first one business, then two.
Alaska Business Monthly | January 2016 www.akbizmag.com
SimplySocial
Tyler Arnold used $400 from his sixteenth birthday to start “Tyler Systems” in 2008 during his junior year of high school. He launched SimplySocial in May 2012 with a pair of international partners and sold it in June 2015 to a Manhattan advertising agency. Arnold’s latest rollout is “Circa Victor,” which he describes as a software suite that helps political organizations make strategic
www.akbizmag.com
decisions about campaign expenditures. He said he will be working in the political arena through the 2016 election. He owes his success to his Alaska mentors, Arnold says—earlier investors like Allan Johnston, who was one of the first people to invest in Arnold’s first business, Tyler Systems. “I’m thankful for all the mentorship and support I received,” he says. “Without that, none of this would exist.” Johnston helped create the Municipality of Anchorage 49th State Angel Fund in 2012. He’s also the founder of a 501 (c)(3) nonprofit corporation called The Entrepreneurs and Mentors Network, Inc., which helps foster mentors and potential business Angels. “I don’t know anyone who is more committed to creating new entrepreneurs,” Arnold says. Arnold also is taking a business course at Columbia University to complement his active learning experiences. For now, his focus is on building business systems and finding individuals interested in changing the world, he says. “I’m very excited about the company I am working on now,” Arnold says. He says he would like to see Alaska become a player in the intellectual property world as a means to diversify its economy, adding, “We should be planting those seeds now.”
Courtesy of Tyler Arnold
Casey Conner founded 907Boards after building his first longboard in middle school shop class. And there’s Tyler Arnold, who at twentythree-years-old has already started two tech businesses, sold one, and is on track to roll out his third startup later this month. Davey attributes some of his success to lessons learned at the Anchorage Chamber’s “Young Entrepreneurs Academy.” He was one of five young entrepreneurs who graduated from the eight-month program this year. The program also paired him with a mentor from the University of Alaska Anchorage College of Business and Public Policy. More than 1,300 teens in grades seven through twelve have completed the Young Entrepreneurs Academy nationwide. “That really kicked it up a notch,” Davey says.
Alaska grown entrepreneur Tyler Arnold at the entrance to Columbia University in Upper Manhattan, New York City.
January 2016 | Alaska Business Monthly
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Alaska Survival Bracelet, packaged (left) and product components before assembly (above), is one of the products designed, manufactured, and sold by Grayson Davey’s business Alaska Paracord Designs. Courtesy of Grayson Davey
Meet your new protégé. Would you like to help build Alaska’s 21st century workforce? Contact us. apicc.org 907.770.5250 Our industry consortium is working to ensure the availability of highly trained Alaskans now and in the years to come. Learn more each week on Workforce Wednesday during DayBreak on KTVA Channel 11. THIS MESSAGE BROUGHT TO YOU IN PART BY:
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Alaska Paracord Designs
Like most kids his age, Grayson Davey, fourteen, struggles to manage his time. But what sets this South High School freshman apart is what devours his free time. Davey was eleven in February 2013 when he started Alaska Paracord Designs with $300 and a business idea aimed at saving lives. Now he has nine employees and is on track to make $40,000 this year from his parttime business, his dad, Trent Davey, says. “He could easily make it a full-time job,” Trent says. “We’re trying to find that balance between school and being an entrepreneur.” The fledgling enterprise designs, manufactures, and sells survival gear bracelets and key fobs with tools built in to start a fire in the wilderness, lash together a shelter, and catch a fish or two for dinner. It got its start three years ago when Grayson sold his Alaska Survival Bracelets online, at the Spenard Farmer’s Market, and at a three retail outlets. This year, he joined the Made In Alaska program and expanded to sell his items at retail outlets across Alaska and directly at several Anchorage craft shows. Grayson assembled each paracord design himself until March 2015 when he began hiring employees to help him with assembly in order to expand his market. Now he has a nine-person crew assembling the products using his custom materials. Each week, he picks up the finished items, pays the employee, and delivers more supplies, Grayson says. Grayson completes the final step in each piece and does a quality check at the same time, he says. He was already designing paracord bracelets before an accident a few years ago that stranded a friend and his daughter on a gravel bar on the Skwentna River. They waited for help for three days without food, shelter, or any means to start a fire after all of their survival gear was lost when their boat flipped in the river and sank, Grayson says. The accident gave Grayson the idea to modify his paracord bracelets to include a
Alaska Business Monthly | January 2016 www.akbizmag.com
few bits of essential survival gear—a firesteel, striker, and tinder. So Grayson, with advice from his dad, a former fighter pilot with extensive survival training—set out to create a new kind of wearable survival gear. In addition to the $35 survival bracelet, they also developed and sell the $25 “Fire Bug” keychain that includes a firesteel, knife-grade scraper, Mylar signal mirror, waxed jute, and an X-Acto blade. The newest addition to the line-up is the $45 Fish and Flame, which includes everything in the Fire Bug, plus an Alaska fishing kit including hand-tied flies and braided fishing line that can double as a snare—among other uses, Grayson’s father Trent Davey says. To use any of the three survival tools means untying the paracord to get at the items inside. That means after you use your Fire Bug or survival bracelet, you can use the components again, but it’s a one-time use tool. Grayson has a solution for that, too. Mail the kit’s components to Alaska Paracord Designs with the story of how you used it and they will send you a replacement. “These products are a great for anybody spending time in the outdoors,” Trent says. The idea is to carry a few items that could aid surviving for twenty-four to forty-eight hours, he says. Similar survival products don’t include tinder, Trent says, so the fa-
ther and son team designed a way to weave a wax coated length of jute into the designs that still burns even when wet or in sub-zero temperatures. As a test, they took the prototype bracelet Trent had worn for more than a year and submerged it in water for two days before taking it out and starting a fire with it, Trent says. “That’s a big deal if you are wet and cold. You need to be able to get a fire going now,” he says. “Everything that is in there, we know it works.” Thanks to his membership in the Made
In Alaska program, three of Grayson’s Fire Bugs also will be included as ornaments on the National Christmas Tree in Washington, D.C., this year.
Steamdriven Boutique
Kyra Hoenack, nineteen, took a circuitous route to become the founder and manager of Steamdriven Boutique, a Wasilla shop that upcycles clothing, hats, and jewelry and provides work opportunities to homeless teens. She was fourteen or fifteen and a student
Kyra Hoenack, founder and manager of Steamdriven Boutique in Wasilla. Courtesy of Kyra Hoenack
THE MOST IMPORTANT MEMBER OF YOUR TEAM – that’s not on the payroll. Alaska USA insurance brokers are your trusted business advisors. Call today to speak with a risk management consultant. alaskausa.org/insurance | (800) 478-1251 www.akbizmag.com
January 2016 | Alaska Business Monthly
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Some of the upcycled merchandise at Kyra Hoenack’s Steamdriven Boutique in Wasilla. Courtesy of Kyra Hoenack
at Burchell High School when she joined the board of MY House, a grassroots group formed to provide a hand up to homeless youth ages fourteen to twenty-four in the Mat-Su Borough. At Burchell about half of the student body is homeless. Districtwide, the Mat-Su Borough School District reports 850 of its students are homeless, though Hoenack estimates that number is likely higher closer to 1,200. At first, the MY House Board considered vetting interested community members with available rooms and connecting them with homeless teens. Teens would stay for a few nights, or a few weeks, before moving back to the streets, Hoenack says. That’s when Hoenack spoke up. She told the adult board members their novel housing model was doomed to fail. Teens don’t want to live in a stranger’s home, she says. “I wouldn’t like that,” Hoenack told the board. “It would make me uncomfortable to stay in someone else’s home. I would feel like I was invading someone else’s space.” So the board put together a new approach. It leased a building to house a drop-in center to connect teens with employment, healthcare, and case management services. A third of the building was leased to a car detailing company started by teenager Ben Beach, a third was the drop-in center, and the remaining third housed the Gathering Grounds Café, which is managed by Hoenack’s brother, Kurt, twenty-two. The café helps support the drop-in center financially and has trained thirty-seven teens during its first two years of operation, Hoenack says. Of those, thirty-six have moved on to better jobs and safe housing, Hoenack says. 46
Alaska Business Monthly | January 2016 www.akbizmag.com
“We are pretty proud of that,” she says. The MY House Board followed her lead again last year when she suggested the nonprofit could upcycle its excess donations and sell the items in a small steampunk boutique. “Steampunk” updates Victorianera fashions by melding it with modern goth and punk styles. Since that time Steamdriven Boutique has grown to employ four teens, including Hoenack, who manages the business. The idea is working as planned. The business is turning a profit and a couple of her staff members have already graduated to new opportunities, she says. In addition to job training, the boutique also provides clothing vouchers to clients and a revenue stream that also supports the outreach program, Hoenack says. An ongoing expansion will double the floor space in the shop and add an office for Hoenack and a classroom where teens can learn sewing, design, and other skills used in the upcycle process. The inventory is all donated, except for a few steampunk accessories, she says. Her leadership was honored this year as Spirit of Youth award winner, which included a $2,000 scholarship. For now, Hoenack says she is happy managing the shop and helping to steer the homeless youth outreach program as a voting board member. Though somewhere down the line, she says, she would like to earn a degree in social work or human services. “I haven’t found anything else I enjoy more than being here and part of a good working team,” Hoenack says.
video game series—than longboarding, Conner says. Both types of skateboarding are means of transport, but from there, the sports diverge, he says. Skateboarding is focused on tricks, while longboarding’s focus is speed. But people tend to paint all skaters with the same broad brush that assumes every kid with a deck tucked in their backpack is up to no good. When he walks around with his board, Conner says, he deals with those stereotypes, too. That’s partly what’s behind his Longboard4Change branding effort to remake the image of longboarders in Alaska and around the world.
At first Conner was designing decks and graphics, sending them outside to be pressed, and doing custom setups in his garage. When he took his boards around to local skate shops, only one guy would even talk to him and no shop would sell his boards for him, he says. That’s when his mom, Lisa Conner, suggested they open their own skate shop and specialize in longboards. “Our family is fortunate to be able to support Casey’s dreams while giving back to the community,” she says. “The business model is simple: provide first class products and customer service while providing a healthy environment for kids to spend time.”
907Boards
Alaskan entrepreneur Casey Conner started 907Boards two years ago when he was fourteen. This summer—with his family’s help—he opened a full-service shop in Anchorage offering skateboards, longboards, safety gear, apparel, training, and a community meeting space for science, business, and math class as well as youth groups and weekly Friday Pizza Nights. During the school year the sixteenyear-old divides his time between running 907Boards and his responsibilities as a sophomore in high school. “With the help of my parents, I wanted to share the love that I have for boarding while giving kids a safe place to do homework, play foosball, or just meet up,” Conner says. He’d never skated before when he made his first longboard in shop at Hanshew Middle School during his eighth grade year. He set up the board, learned to ride, and just kind of fell in love with it, Conner says. People are generally more familiar with skateboarding—the kind in the Tony Hawk www.akbizmag.com
January 2016 | Alaska Business Monthly
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Today his 907Boards with his custom graphics are available at his Anchorage shop. Or, Conner’s graphics are on some Omen Longboards, he says. “We are definitely the longboard store for Alaska,” Conner says. In the near-term, his goals include continuing to improve his longboard skills and learning as much as possible about business and the industry. Long-term goals include competing nationally, expanding his shop’s product lines, hiring employees, and, eventually, open more retail stores. Conner also offers longboarding lessons at his shop’s indoor training facility, which includes a half-pipe. Skaters use the ramps for practicing tricks, but Conner says the two gradual slopes on the pipe are perfect for introducing new students to the sport, like a bunny hill for beginning skiers. Conner is a student at an Anchorage charter school that also uses the Boardroom at 907Boards to host the science class, a math tutor, and various other student clubs and groups. “We always wanted to have that training facility and a place for meetings and groups and stuff,” Conner says. “We wanted to offer an inviting family-friendly place where people of all ages could learn about the sport.”
Mike’s Music
While it probably is not a good idea to buy a $10,000 musical instrument for most twelve-year-olds, that is the origin of Mike’s Music in Eagle River, now in its twenty-first year of business. Sharon Dunckle says her son, Mike, got his start by renting and selling new and used instruments his father helped him recondition. Gradually the store expanded to offer a full line of band and orchestra instruments and supplies. When the shop opened in 1994, it was the only place between Wasilla and Anchorage to buy a violin string, she says, recalling an instance where she’d driven Mike to Anchorage for a $2 string. For now, Mike lives in Seattle and has sold the business to his mother, Sharon. He still does training sessions at the shop when he is in town, but isn’t involved with day-to-day operations currently, she says. “I never ever expected to still be doing it,” Dunckle says. “I was just trying to help my kid out.” The shop wouldn’t have been possible without suppliers who gave him credit and an opportunity, she says. “They took a leap of faith with him,” Dunckle says. “And they have been our main supplier of violins for twenty years.”
Celebrate Junior Achievement’s Business Hall of Fame Laureates 2016 HONOREES Lynn Johnson – Dowland-Bach Jason Metrokin – Bristol Bay Native Corporation Mike Burns (Posthumously) – Alaska Permanent Fund Corporation
Adults need to listen and give credence to young people with big ideas, she says. “Any time you have a young person with that entrepreneurial spirit, we need to be supportive,” Dunckle says. “They won’t all succeed, but there is always that one out of a thousand or a hundred thousand. “It is important.” She’s not a musician herself, but she is a huge supporter of music for people of all ages and skill levels. It’s never too young to encourage music, she says. “When parents come into the store with little kids—some of these kids come in at four or five and are practically drooling over a guitar or violin—I really encourage them to let them try,” Dunckle says. “If you can afford it, let them try.” Mike was in sixth-grade when he told his mom he needed a violin that was better than he had; one he could grow into. Using the profits from his music business, he purchased a violin from luthier John Osnes in 1998. “We all have to do something for a living,” Dunkle says,“but art and music, that’s the stuff that makes us happy.” R Heather A. Resz lives in Wasilla. She’s told Alaska’s stories for nearly twenty years. Dena’ina Center Thursday, January 28, 2016 5:30 p.m. reception, dinner/ceremony 6:30 p.m. Call Flora Teo at 907-344-0101 to reserve a table at this prestigious event or go to alaska.ja.org for more information
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Alaska Business Monthly | January 2016 www.akbizmag.com
special section
Junior Achievement
Alaska Business
HALL OF FAME J
unior Achievement of Alaska’s mission is to educate and inspire young people to succeed in a global economy. Program materials are made available at no cost to teachers and schools and are presented by volunteers from the business community. Junior Achievement program materials are hands-on, activity based, and emphasize the pillars of Junior Achievement: Financial Literacy, Workforce Readiness, and Entpreneurship. Established in 1973, Junior Achievement of Alaska serves more than 9,204 K-12 students in fifty-three Alaska communities on an annual basis. An investment of $49 is all it takes to provide Junior Achievement to a student in Alaska. In 1987, Junior Achievement of Alaska began the Alaska Business Hall of Fame to honor outstanding individuals of Alaska business. Since then, the Hall of Fame has become one of the state’s most prestigious events, inducting new Laureates on an annual basis. Every year on the last Thursday in January, Junior Achievement welcomes local business leaders into the Alaska Business Hall of Fame. Individuals are nominated and selected based on their outstanding contributions to the Alaska economy and their demonstrated commitment toward Junior Achievement’s mission of educating and inspirwww.akbizmag.com
ing young people to succeed in a global economy. Junior Achievement of Alaska and Alaska Business Monthly are the Title sponsors of the Alaska Business Hall of Fame. Alaska Business Monthly features an interview and biography of each of the Laureates in the January issue each year, which is distributed at the event. This prestigious distinction recognizes individuals who have made important contributions to Alaska business. The Alaska Business Hall of Fame pays tribute to the past, present, and future of Alaska Business, honoring new inductees on an annual basis. Individuals are selected by a group of their peers and recognized for outstanding contributions to Alaska’s economy. Laureates of the Alaska Business Hall of Fame Class of 2016 join more than one hundred previously inducted business leaders in Alaska. This event is annually attended by about five hundred of Alaska’s top business representatives, and features presentations from Junior Achievement students, the induction of the new Laureates, the recognition of the Junior Achievement Educator and Volunteer of the Year, and celebrates free enterprise education in Alaska. In addition to honoring the Laureates, the Alaska Business Hall of Fame is a fundraiser for Junior Achievement of Alaska. R January 2016 | Alaska Business Monthly
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special section
Junior Achievement
Alaska Business Hall of Fame Past Laureates Don Abel Jr., 1996 Jacob Adams, 2002 Bill Allen, 1995 Bob & Betty Allen, 2001 Will Anderson, 2012 Eleanor Andrews, 2001 Robert Atwood, 1988 The Bailey Family, 2010 Bernard M. Behrends, 1987 Earl H. Beistline, 1998 Jim Binkley, 1989 Bill Bishop, 1994 Jim Bowles, 2011 Carl Brady, 1990 Carl F. Brady Jr., 2004 Alvin O. Bramstedt Sr., 1991 Charles H. Brewster, 1999 Brice Family, 2011 W. Brindle, 1993 Margie Brown, 2009 Edith Bullock, 1987 Jim Campbell, 2006 Larry Carr, 1988 Richard Cattanach, 2008 Frank Chapados, 1991 John B. “Jack” Coghill, 2006 Jack J. Conway, 1995 William A. Corbus, 1999 Ron Cosgrave, 2007 D. H. Cuddy, 1993 Bob Dindinger, 2012 Don Donatello, 1995 The Doyle Family, 2014
Ron Duncan, 2007 Oscar & Peggy Dyson, 1992 Ken Eichner, 1990 Andrew Eker, 2009 Mark Eliason, 2013 Carl Erickson, 1999 Arnold G. Espe, 2001 Al Fleetwood, 2005 Conrad Frank, 1999 Clyde Geraghty, 1999 Barnard J. Gottstein, 1989 The Green Family, 2012 Robert & Barbara Halcro, 2008 Ernie Hall, 2002 Lloyd Hames, 1998 Jana Hayenga, 2015 Carl Heflinger, 1999 The Helmericks Family, 2014 Michael Heney, 1995 Willie Hensley, 2009 Wally J. Hickel Jr., 2014 Walter Hickel Sr., 1988 August Hiebert, 1989 Roy Huhndorf, 1992 Robert Jacobsen, 2006 Jim Jansen, 2009 John Kelsey, 1991 Bruce Kennedy, 2007 Clarence Kramer, 2006 Herbert Lang, 1994 Marc Langland, 2001 Austin Lathrop, 1988
Betsy Lawer, 2007 Pete Leathard, 2003 Dale & Carol Ann Lindsey, 1997 Suzanne (Sue) Linford, 2002 Loren H. Lounsbury, 2002 Zachary Loussac, 1989 Richard Lowell, 2005 Byron Mallott, 2013 Harvey Marlin, 1999 Carl Marrs, 2005 Vern McCorkle, 2010 Harry McDonald, 2011 James A. Messer, 2000 Jo Michalski, 2015 The Miller Family, 2005 Robert Mitchell, 1999 William G. Moran Sr., 2004 William G. Moran Jr., 2004 Rick Mystrom, 2013 Les Nerland, 1987 Matthew Nicolai, 2010 Milt Odom, 1992 Odom Brothers (Bill, Jim, and John), 2015 Pam Oldow, 1990 Tennys Owens, 2005 E. Al Parrish, 2006 Raymond Petersen, 1988 Martin Pihl, 2014 Dana Pruhs, 2015 Quinn Brothers, 2011 Elmer Rasmuson, 1987
Edward Rasmuson, 2000 Frank M. Reed Sr., 2000 Robert Reeve, 1987 David Rose, 2003 Jim Sampson, 2008 Helvi Sandvik, 2006 Grace Berg Schaible, 2004 Leo & Agnes Schlotfeldt, 1993 Orin D Seybert, 2006 Governor Bill Sheffield, 2003 Merle (Mudhole) Smith, 1993 Charles Snedden, 1989 Sen. Ted Stevens, 2010 William G. Stroecker, 1997 Bill & Lilian Stolt, 1998 A. C. Swalling, 1987 Cliff Taro, 1992 Walter & Vivian Teeland, 1997 Morris Thompson, 2001 William J. Tobin, 2004 Joseph Usibelli Sr., 1988 Joseph Usibelli Jr., 2013 Chris von Imhof, 2014 Lowell Wakefield, 1990 Leo & Beverly Walsh, 1996 Pat Walsh, 2008 Chuck West, 1991 Noel Wien, 1989 Richard A. Wien, 2003 Lew Williams Jr., 1994 William Ransom Wood, 1996
Statewide Board of Directors 2015-2016
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Ken Hanley Heath Hilyard Diane Hoffbauer Kristen Lewis* Kurt Martens Mark Mathis*
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Mark Smith Angela Speight Beth Stuart Greg Stubbs Lynda Tarbath Derrell Webb
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Achievement Foundation Alaska Commercial Company Credit Union 1 GCI The Hartford Kendall Toyota Koch Companies Public Sector LLC Lynden Odom Corporation State Farm Insurance Totem Ocean Trailer Express, Inc. Gold Investors ($2,500+)
Alaska Airlines Alaska Industrial Development and Export Authority Alyeska Pipeline Service Co. Andrew Eker Bill Odom Elizabeth Stuart Enstar Natural Gas Co. Fred Meyer Foundation George A. Gates Katmailand, Inc. Kinross www.akbizmag.com
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3M Foundation, Inc. Able Body Shop ACHC Alaska Cruise Association Beacon Occupational Health and Safety Services, Inc. Betsy Lawer Calais Company, Inc. Chinook Printing Co. Daniel F. Pruhs David Markez Delta Constructors Derrell Webb George Porter Holland America Line, Inc. Janelle Welch Jeanine St. John Joe Everhart John C. Hughes Foundation Kristen Lewis Kodiak Lions Club KPMG LLP Leonard & Martens Investments LLC Linda Leary Lynn C. Johnson Mark Hylen Mark Smith Marsh USA, Inc. Old Harbor Native Corporation Olive Garden Parker, Smith & Feek, Inc. Petro Star, Inc. Rick Whitbeck Rock Hengen Sealaska Corporation Sherron Perry Sullivan Arena Taco Bell Talitha Birch Ted Quinn Tom Redmond
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Alaska Community Foundation Alaska Growth Capital BIDCO, Inc. Alaska Railroad Corporation Alaska Rubber & Supply, Inc. Alaska Tanker Company LLC All Alaska Tours Anchorage Economic Development Corporation Anne O. Courtwright ASRC Energy Services Avis Rent A Car Carl Marrs Cheryl L. Stine CMGRP, Inc. Craig Sundet Denali Alaskan Federal Credit Union Denali Alaskan Insurance Diane Hoffbauer Flora Teo George W. Hughes Hany McDonald Harbor Enterprises, Inc. Helvi K. Sandvik J. C. Osborne James R. Odom Jared Green Jim Odom John Odom Joseph Buskirk Joseph M. Schierhorn Karen Vezina KEEP Alaska Competitive Coalition Kodiak Area Native Association Kristen Lewis Kurt Martens Linda Eliason Lonny Rhude Major Marine Tours Mike Goolie
Nancy Ruehle Patty Hamilton Robert E. Allen Scott Jepsen Snow White, Inc. Stan Stephens Glacier & Wildlife Cruises Stephen Lauper Suzanne Linford Terry L. Bailey Tom Gimple Green Investors ($250+)
Abe Williams Arctic Roadrunner, Inc./Local Burgerman Automated Laundry Systems and Supply Calista Corporation Calvin Koshiyama Carl Propes Chena Hot Springs Resort LLC Chris Birch CIRI Alaska Tourism Corporation Copper Valley Electric Association, Inc. David Lenig Derrick Yi Diversified Tire, Inc. Douglas L. Chapados Dustin Cooper Eliason Holding Company LLC Febra C. Hensley Jana Hayenga Jo A. Michalski Kim Frensley Marilyn Romano Marina Cottini Mark Hamilton Mark Smith Mt. McKinley Bank P K M. Caleb Patrick K. McCaleb Randy Stevens Richard L. Whitbeck Jr. Rotary Club of Seward Terri Helms The Halcro Family Foundation The Shimizu Foundation Travis C. Frisk Valdez Gold Rush, Inc.
January 2016 | Alaska Business Monthly
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ENTREPRENEURS
Launch : Alaska Accelerator Increasing the ‘dealflow’ of startups
A
By Gianna Foltz
laskans have always had a knack for self-sufficiency, and that includes launching their own business ventures. Economists agree, however, that diversifying the state’s economy will be a heavy lift. New businesses with the potential to scale up quickly could be at least part of the solution, creating new jobs and spurring new industries in fields like energy and unmanned aircraft. The entrepreneurship cause in Alaska received a huge boost when the Municipality of Anchorage launched the 49th State Angel Fund (49SAF) in 2012 to invest in promising startups. This fund and its spinoffs have vastly increased the availability of risk capital in Alaska, but thought leaders in this space have identified the need to increase the “deal-flow” of startups that are good investment candidates with a likelihood of success. Enter Launch : Alaska.
What is Launch : Alaska?
Launch : Alaska (L:A) is a three-month, mentor-driven accelerator program that helps early-stage businesses grow into fundable, scalable ventures. Through comprehensive mentoring, a robust network, and seed capital, L:A’s mission is to help founders build great companies, raising the bar for entrepreneurship throughout Alaska. L:A is modeled after highly regarded accelerators in the Lower 48 such as Techstars in Boulder, Colorado, which has been instrumental in launching such high-profile successes as Uber, the ride-sharing service. Applicants will face a series of vetting rounds including a competitive application process and a pre-accelerator program before they will be admitted into the L:A cohort. The pilot kicks off this summer with a cohort of five startup teams, which will each receive $25,000 in exchange for a 6 percent equity in their company. Once accepted, ninety days of immersion, educational workshops, and co-located office space at The Boardroom in Downtown Anchorage will position startup teams for growth, culminating in Demo Day when graduating teams pitch their refined business plans to investors for follow-on investment. The L:A accelerator is not a business in52
cubator, although it offers physical workspace to its participants. The average length of an incubator program is one year and is focused on product development; however, L:A strongly prefers companies that have achieved a degree of customer validation or another form of traction such as contracts or strategic partnerships. The intense program will not allow for extensive research and development. L:A formed in late July 2015, and in August the US Small Business Administration’s Growth Accelerator Fund Competition awarded L:A $50,000 to fund operating expenses. To date, additional sponsorship has been received from the University of Alaska Center for Economic Development, which conducted the accelerator feasibility analysis and donated hundreds of in-kind staff hours. Finally, Alaska Small Business Development Center has also made a generous in-kind contribution by underwriting staff costs. L:A recruited Lance Ahern—founder of Internet Alaska, Alaska’s first Internet service provider—as managing director and joined the Global Accelerator Network, an invitation-only group, to leverage best practices. The board, which includes entrepreneurs and community stakeholders from the University of Alaska Anchorage, University of Alaska Fairbanks, and Alaska Pacific University, meets weekly to aggressively develop the program and mentor network.
Value to Entrepreneurs
Admittance into the L:A program brings tremendous value to entrepreneurs. After ninety days, startups will exit the accelerator better equipped to enter markets and receive additional investment. L:A provides business acceleration, network connections, mentors, capital, and services as described below: Acceleration : Focus, Resources, and Industry Knowledge | During the L:A accelerator program, speed to market is improved by limiting distractions and committing full-time focus to the startup. Educational workshops help each team streamline information gathering. Mentor advisement, usually for several hours per week, aids in critical decision-making such as finalizing product market fit. Accelerators are designed to shorten the learning curve and reduce the risk of startup failure.
Community and Connections | L:A immediately introduces startups to a robust network of stakeholders and industry experts. As in other accelerators nationwide, camaraderie develops between teams in the cohort and alumni teams, which facilitates information sharing and speeds introductions to investors, partners, customers, and employees. Throughout the program the managing director and staff will also work to align each team to appropriate strategic connections. Mentorship | Mentors include subject matter experts, innovative industry leaders, and seasoned entrepreneurs with track records of success. L:A leverages the expertise of its mentor network to guide startups through business milestones with greater ease. Mentors appreciate the disciplined approach to working with teams in a structured system that respects their time and is impactful for all parties. While L:A has established a roster of mentors and subject matter experts to assist the first cohort, the team welcomes additional community involvement from those with an interest and ability to assist fledgling entrepreneurs. Capital and Services | A host of discounted services are packaged for each team to utilize, including legal guidance, accounting, branding and marketing, and technical support. Each team receives $25,000 in seed funding to invest in their venture. L:A will streamline follow-on fundraising by organizing connections with potential investors, such as 49SAF and its partner funds; guiding startups through the funding process; and generating exposure and excitement during Demo Day. Additionally, the vetting process of admittance and program completion generates credibility among investors. About 30 percent of Global Accelerator Network startups raise a second round, and $1.9 million was the average second round raised in 2014.
L:A and 49SAF
The purpose of 49SAF is to increase the availability of risk capital for promising startups, while L:A seeks to grow the capabilities of these same companies. As such, they form complementary pieces of a startup-friendly ecosystem here in Alaska. Leveraging dollars
Alaska Business Monthly | January 2016 www.akbizmag.com
from the US Department of Treasury, 49SAF and four partner funds have emerged which match 49SAF money with private investment. These include the Alaska Accelerator Fund, 49th Fund, Anchorage Opportunity Fund, and Anchorage Equity Partners. L:A will also have its own small pool of capital to make the $25,000 investment in each startup, and the partner funds may invest in L:A’s fund. However, the main value of a relationship between the angel investors and L:A is the opportunity for follow-on investment once startups emerge from the accelerator with expanded competencies.
Why in Alaska?
While more than three hundred accelerator programs exist in the United States, Alaska has never housed one prior to L:A. The project team strongly believes an accelerator will help make Alaska a more nurturing environment for high-growth companies by taking a systematic approach to growing the most promising startups. Alaskans recognize the need for a more resilient economy; L:A is one small step toward diversification. While there is great social impact from the creation of new jobs and innovations, investors demand more than altruism. Companies that emerge from accelerators raise more equity financing, have a higher likelihood of survival, and experience improved outcomes. Seventy-nine percent of startups that have completed a Global Accelerator Network member accelerator program are still in business today, and on average, 6.7 jobs were created and $789,000 was raised per Global Accelerator Network startup in 2014, which all together means L:A can have a real impact on Alaska’s economy. A better economic future is our responsibility. In the words of Joe Morrison, “Have a bias for progress. Build your Alaska.” It will take ubiquitous community buy-in to make L:A a well-oiled mechanism that helps startups grow. R Gianna Foltz is the Entrepreneurship Specialist for UA Center for Economic Development. She has founded two companies, was a Kauffman Entrepreneurship Fellow, and worked in entrepreneurial programming at Syracuse University. She serves as the Mentorship Coordinator for Launch : Alaska accelerator. Contact her at gianna@launchalaska.com. www.akbizmag.com
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CONSTRUCTION
Photo by Russ Slaten/ Alaska Business Monthly
Southcentral Foundation Nuka Wellness and Learning Center on the Alaska Native Health Campus in Anchorage.
Winter Projects in Alaska Keeping up with a growing population By Russ Slaten
A
s Alaska’s population grows, so does the need for infrastructure; as infrastructure ages, the needs of the population changes. Alaska’s population has seen major growth over the last four years from 710,231 people in 2010 to 735,601 people in 2014, according to the US Census Bureau and the Alaska Department of Labor and Workforce Development, Research and Analysis Section. That’s an increase of 25,370 people over the last four years. Many regions of the state are still trying to keep up with the population growth and aging infrastructure with new and improved schools, roads, bridges, and facilities to fit the needs of Alaska. 54
In and Near Anchorage
The $42.5 million ADOT&PF (Alaska Department of Transportation & Public Facilities) Glenn Highway Capacity Improvement project at Eagle River was completed in December. Kiewit Infrastructure West Co. began the three-mile segment of northbound Glenn Highway from the Hiland interchange to Artillery Road interchange in July 2014, with fifty-six workers at peak construction. The improvement project was designed by Hanson Alaska Professional Services, Inc. The $34 million Blood Bank of Alaska building located at 1215 Airport Heights in Anchorage was completed at the end of 2015 by Neeser Construction. The owners
will be moving into the two-story, 56,000 -square-foot building next month. The building was designed and engineered by Livingston Slone, AMC Engineers, BBFM Structural Engineers, and CRW Engineers. The $24 million Rasmuson Wing/East Wing Expansion at the Anchorage Museum is expected to begin in February. Davis Constructors expects to complete the 25,000-square-foot project by September 2017. The Anchorage Museum and Municipality of Anchorage project is designed by McCool Carlson Green. The $4 million Federal Express Aircraft Maintenance Facility Refurbishment at Ted Stevens Anchorage International Airport
Alaska Business Monthly | January 2016 www.akbizmag.com
began in August. The AIDEA-owned (Alaska Industrial Development and Export Authority), 747,338-square-foot maintenance hangar with a 4,600-square-foot fire suppression building will see the rebuilding of pump drives for the fire diesel engines. Arcadis, the onsite project manager, expects the project to be complete in July, with ten workers on site at peak construction. The $1.9 million Children’s Lunchbox Kitchen and Bean’s Café Food Storage Warehouse and Administrative Offices at 1020 East 4th Avenue began construction in November. After extensive environmental remediation, the interior of the newly purchased two-story, 8,590-square-foot building will be renovated with new mechanical, electrical, and plumbing systems. KPB Architects designed the renewal and Commercial Kitchen Solutions designed the 1,186-squarefoot kitchen space for the Children’s Lunchbox. An estimated 3,109-square-foot food storage area will be added to the first floor, and the second floor will house all Bean’s Café administrative functions, with a new exterior façade to complete the project. Expected completion is this fall with no general contractor selected at press time.
South Anchorage
The new $1.6 million Stanton Optical build-
ing at 8300 Homer Drive near the New Seward Highway overpass at Dimond Boulevard was set to be completed in December. Stanton Optical is a national designer eyewear store based in Palm Springs, Florida. The 4,400-square-foot building is owned by Homer Holding LLC. H. Watt & Scott, Inc. began the project in July, with fifteen workers at peak construction. Faulkenberry & Associates, Inc. designed the project with engineering services provided by Anderson Engineering, Schneider Structural, RBA Engineers, and Northern Geotechnical Engineering. The new $1.5 million Mattress Firm building at 305 West Dimond Boulevard near C Street was completed in November. The 3,000-square-foot building, owned by Furniture Enterprises Alaska, was designed by Kumin Associates, Inc. with civil, structural, mechanical/electrical, and landscape engineering provided by Enterprise Engineering, ReidMiddleton, AMC Engineers, and DOWL. Neeser Construction began the project last June, with twelve workers at peak construction.
U-Med District
Neeser Construction began work in August 2014 on the $15.3 million University of Alaska Anchorage (UAA) Parking Garage,
including modifications to Mallard Lane and construction of a skybridge to the Existing Engineering Building. The four-story, 471-stall parking garage project is about 75 percent complete at press time and will be available for occupancy in July. The UAA project is designed and engineered by Livingston Slone, Reid Middleton, AMC Engineers, DOWL, CRW Engineers, and Corvus Design. The $19.2 million UAA Existing Engineering Building Renewal began last April and is expected to be complete in July. General contractor Neeser Construction, at press time, is about 35 percent complete with the 40,000-square-foot building and has completed new roofing and the exterior envelope to continue interior renovations throughout the winter. Livingston Slone designed the UAA project, with engineering services provided by AMC Engineers, Reid Middleton, RFD, Sextant Group, and Ayres Saint Gross. The $25 million Nuka Wellness and Learning Center in Anchorage on the Alaska Native Health Campus is still on target for an end of January completion, according to Southcentral Foundation. Watterson Construction began the fifty-four-room, 58,866-square-foot health facility in April 2014, with sixty-five workers at peak con-
Special Olympics Alaska Training Facility www.akbizmag.com
January 2016 | Alaska Business Monthly
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struction. The Southcentral Foundation project was designed by Spark Design and structural engineering services were provided by Reid Middleton. The audio-visual contractor was on site for installation at press time. The new four-story, 24,000-square-foot Mint Dental Building at 2665 East Tudor Road in Anchorage was completed in mid-November. Owner Jonathan McNeil of Mint Annex LLC contracted Carol Stockard to design the exterior building; Kumin Associates, Inc. to design interior improvements; and hired John Emmi and Jason DeBaugh as general contractors, with fifty workers at peak construction. The last remaining work on the building were level two tenant improvements—1,150-squarefoot Mint Dental lab, 2,600-square-foot leased chiropractic lab, and 3,180 square feet of unleased space—expected to have been completed by the end of December.
Mat-Su Valley
The new $17.3 million Iditarod Elementary School facility at 455 East Carpenter Circle in Wasilla saw construction begin in May. McCool Carlson Green designed the twostory, 50,607-square-foot building owned by the Matanuska-Susitna Borough. Collins Construction, with fifty to seventy-five
workers on-site at the project’s peak, expects to complete the project in July—ready for occupancy by the 2016 school year. The new $15.6 million Dena’ina Elementary School project near Mile 10.5 on KnikGoose Bay Road in Wasilla began in May. Bettisworth North designed the two-story, 44,200-square-foot school owned by the Matanuska-Susitna Borough. F-E Contracting expects to complete the project in July, with fifty to seventy-five workers at peak construction. Construction of the new $7.2 million Fronteras Spanish Immersion Charter School located at 2315 North Seward Meridian Parkway in Wasilla began in August. The 31,289-square-foot, single-story school is owned by the Matanuska-Susitna Borough and was designed by Burkhart Croft Architects. Howdie, Inc. expects to complete the project in July, with thirty workers at peak employment. The $12 million Wasilla Public Library project in the Matanuska-Susitna Borough began last April. Cornerstone General Contractors expects to complete the single-story, 24,500-square-foot library by summer. The City of Wasilla project, designed by ECI/Hyer with mechanical and electrical engineering provided by AMC Engineers, replaces the existing library that does not
adequately support the needs of the community. The $5 million Chickaloon health and wellness center is known as the Ahtnahwt’aene’ Nay’dini’aa den Gathering Place, which translates to “Ahtna People, Chickaloon Place” in the Ahtna Athabascan language. The 8,100-square-foot, twenty-seven room project is a joint partnership between the Chickaloon Village Traditional Council and Southcentral Foundation. F-E Contracting began construction of the two-story full-range clinic last April and it was completed in December, with twentysix workers at peak construction. Bezek Durst Seiser, Inc. designed the project.
Southcentral Alaska
The $12 million Kodiak Pier 1 Ferry Terminal Replacement project in Kodiak will be under construction this winter, and general contractor Pacific Pile and Marine expects to complete it in May. The 19,000-square-foot ferry terminal project owned by the City of Kodiak in cooperation with ADOT&PF began in October 2014. R&M Consultants, Inc. is the engineer of record. The $30 million Alaska Aerospace Corporation Launch Facility Reconstruction project at Narrow Cape on Kodiak Island
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began in September. Davis Constructors expects to complete the multi-building Alaska Aerospace Corporation project by the summer, with about sixty workers at peak employment. BRPH Architects designed the project, with AMC Engineers providing mechanical and electrical engineering services. The $24 million Valdez Navigation Improvements project in Valdez began November 2014. The City of Valdez project consists of the construction of a 3,160-foot rubble-mound breakwater to protect a mooring basin with an entrance channel of about fourteen acres in size, according to the US Army Corps of Engineers, Alaska District. The basin will see dredging and disposal of about 346,000 cubic yards of material. Western Marine Construction expects to complete the project in December 2017. The more than $80 million BlueCrest Energy Cosmopolitan Production Facility project north of Anchor Point on the Kenai Peninsula began in July. The BlueCrest Energy, Inc. oil production facility, designed by M&H Energy Services, will support the BlueCrest development of the Cosmopolitan oil and gas lease blocks in southern Cook Inlet. BlueCrest expects the facility to be completed by April, with one hundred
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workers at peak construction. The $2.4 million Homer Ferry Terminal Improvements began in November. The City of Homer-owned project received federal funds through ADOT&PF to refurbish five existing dock fender panels, install four new dock fender panels, and improve other mooring structure systems. Turnagain Marine Construction expects to complete the project this summer. The $16 million Seward Marine Industrial Center Harbor Improvements began in September. The City of Seward project, designed by R&M Consultants, consists of a 1,000-foot breakwater, 112,000 cubic yards of dredging, and other harbor improvements. Hamilton Construction LLC expects to complete the improvements in April 2017. The $5.45 million Seward Harbor BCS Float Replacement and $550,000 Seward Harbor Fish Cleaning Station projects both began in July 2015. The two City of Seward projects, designed by R&M Consultants, are expected to be completed in mid-April. The BCS Float Replacement project will see Turnagain Marine replacing 28,000 square feet of new floats along the harbor’s southwest side. Harmon Construction is replacing the 840-square-foot fish cleaning station.
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Northern and Western Alaska
The $12 million Richard Foster Building in Nome will house the Carrie M. McLain Memorial Museum, Kegoayah Kozga Library, and the Kawerak, Inc. Center of Culture and Science. The new 118,500-squarefoot building, designed by ECI/Hyer with mechanical and electrical engineering provided by AMC Engineers, replaces the 3,600-square-foot space in the Centennial Building that houses the museum and the library. ASRC SKW Eskimos, Inc. began the City of Nome project in June 2014 and expects it to be completed in February. The $32.8 million Kwethluk K-12 School project in the Bethel region began last fall. Bethel Services, Inc., a subsidiary of Bethel Native Corporation, expects the two-story,
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The Interior
Construction of the more than $20 million Petro Star Asphalt Production Unit, located at the Petro Star Refinery in North Pole, began last spring. ASRC Energy Services-Houston Contracting Company, Inc., an Arctic Slope Regional Corporation subsidiary, expects to complete the facility this spring, with forty workers at peak construction. The Asphalt Production Unit is owned by Petro Star, Inc., also a subsidiary of Arctic Slope Regional Corporation.
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48,500-square foot school on driven piles to be completed in the fall of 2017 and expects employment to range from fifteen to sixty workers. The Lower Kuskokwim School District project was designed and engineered by Stantec. The $10 million Dental Clinic and Administrative Offices project on the Kanakanak Hospital campus in Dillingham began last May and is about 50 percent complete, according to architect Livingston Slone. Roger Hickel Contracting expects to complete the two-story, 15,800-square-foot project in the fall. The Bristol Bay Area Health Corporation project was enclosed before winter and saw interior work progress through December. BESC provided civil, PND provided structural, and RBA provided mechanical and electrical engineering for the project.
Southeast Alaska
The $127 million State Library, Archives and Museum project in Juneau began in March 2014. PCL Construction expects to complete the 118,000-square-foot project by May. The Alaska Department of Public Safety project, designed by ECI/Hyer with mechanical and electrical engineering provided by AMC Engineers, joins the unique and competing indoor environmental re-
quirements of a library, archive, and museum under one roof. The $54 million Juneau Cruise Ship Berths in Downtown Juneau consists of two new floating pontoons, a 50 foot by 400 foot south berth, a 50 foot by 300 foot north berth, and other necessary infrastructure in support of tourism activities. The Juneau Docks and Harbors project, originally designed by PND Engineers, Inc. in 2010, expects Phase I to be completed by summer 2016 and Phase II by summer 2017. General contractor Seattle-based Manson Construction Company expects forty-five workers at peak construction. The $2.1 million Glacier Highway MultiUse Separated Path to University of Alaska Southeast project in Juneau began in October. The ADOT&PF project includes the construction of a new multi-use pathway along the north side of Glacier Highway at Engineers Cutoff Road to the University of Alaska Southeast, along with paving the Auke Lake Wayside parking lot and building two water quality treatment basins with associated drainage improvements. Secon, owned by Coalaska, Inc., expects to complete the project this spring. The $1.5 million Juneau Auke Bay Ferry Terminal Improvements began in October. The ADOT&PF project consists of replac-
ing existing mooring structure E4 at the EastBerth, refurbished access catwalk and floating fender, electrical utility modifications, and installation of cathodic protection anodes on all offshore structures. Mason Construction expects to complete the project this summer. The $20 million to $25 million Water Street Viaduct in Ketchikan will see the construction of a 1000-foot hybrid bridge structure. The ADOT&PF project, designed by R&M Consultants and Shearer Design, is expected to begin in March and be completed by December 2017. ADOT&PF had not yet selected a general contractor at press time. The $3.2 million Kake Ferry Terminal Improvements began in September. The ADOT&PF project consists of replacing the transfer bridge, bridge float, float restoration dolphins, and concrete abutment; restoring the riprap slope; installing new anodes on pile supported mooring structures; and electrical improvements. Tamico, Inc. expects to complete the project this spring. R
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WORKFORCE TRAINING
Training Plumbers, Steamfitters, and Pipefitters Union apprenticeship programs invest in workforce By Rindi White
N
early 23 percent of people who work in Alaska are part of a union, according to the federal Bureau of Labor Statistics. Alaska has the second-highest percentage of union workers in the nation, behind only New York. Several reasons are behind that number, from a higher than average per capita percentage of unionized government workers to a prevalence of union employees in the construction industry, which is strong in Alaska. Michael Luhrs welding hot pass. Š Local 375 JATC
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Alaska Business Monthly | January 2016 www.akbizmag.com
Around the state, union apprenticeship programs are in place to keep turning out a skilled workforce and keep the percentage of overall union workers higher than national averages. In the coming months Alaska Business Monthly will explore the state’s more than twenty apprenticeship programs and their regional training opportunities. Union apprenticeship programs constitute the largest private industry sector training industry in the state, says Mike Andrews, director of the state Department of Labor and Workforce Development’s Alaska Workforce Development Enterprise. “It’s really fundamental that Alaska continues to do what it does well, and that’s having a homegrown workforce,” he says. “Because the union apprenticeship programs and joint apprenticeship training committees have been around for so long,
those members actively working during the construction season. It has ninety apprentices going through its five-year apprentice program, plus an eighteen-week accelerated pipe welding class held each fall. Welding and field work takes place at the UA Local 375’s welding facility that is part of the Fairbanks Pipeline Training Center. “If they want to weld the pipeline, I suggest they come in and apply to our [apprenticeship] program,” Plutt says. The apprenticeship program gives potential pipeline welders a well-rounded base of knowledge for their eventual career. “If they want to do more of a focus on welding, they can do that as well,” Plutt says. This year’s accelerated pipe welding class had fourteen members, the largest class so far, he says. The class size could readily accommodate more students with additional instructors, he says.
cants, the training committee may make an extra space for her because the union wants to diversify its membership. Legacy candidates-applicants whose parents or family members are union members-don’t automatically get selected, McGuire says, although the longevity of the union involvement does factor into the final decision whether to select an applicant or not. “It might impact the score because you can see there’s longevity in that, but the theory behind it is that everyone has an opportunity [to get in]. It’s not a country club,” he says. Applicants brought in during the spring go through a one-week orientation where they learn about safety in the workplace and other important items; then they’re sent out to job sites as a “40-percent apprentice,” or an apprentice making 40 percent of the wages of a journeyman.
“When you look at the different training programs, instructors, equipment, and other things they have in place, that’s the largest investment from the private sector in any industry in the state.”
—Mike Andrews Director, Department of Labor and Workforce Development, Alaska Workforce Development Enterprise
it’s a very mature system,” Andrews says. “When you look at the different training programs, instructors, equipment, and other things they have in place, that’s the largest investment from the private sector in any industry in the state.” That’s why it works, he says. And it’s likely why wages in Alaska are higher than average and tend to stay that way.
Training Pipeline Workers
John Plutt, president and training director of Fairbanks’ United Association Plumbers and Steamfitters Union Local 375, says his site is the natural training ground for future pipeline welders, should the state proceed with the Alaska LNG project. The project would include a gas treatment plant on the North Slope, an eight-hundred-mile pipeline to Southcentral Alaska, and a liquefaction plant where the gas would be prepared for efficient transport to export markets. According to the Alaska LNG Project, a partnership between the state and potential developers, the project has a price tag of between $45 billion and $65 billion, making it the largest single investment project in the state’s history. It would also require between nine thousand and fifteen thousand jobs during construction. Many of those jobs will be in the construction field, including plumbers, pipeline welders, and pipefitters. Plutt says UA Local 375 is about four hundred members strong, with most of www.akbizmag.com
More Training Makes Better Workers Apprenticeship has a large role in the future of the union, says Anchorage-based UA Local 367 union organizer Brandon McGuire—but figuring out how to train future employees while balancing trainees with available jobs is tricky. “We look at the projected manpower needs. We don’t want to have a baby boomer event going on again. That’s what we’re looking at now. The baby boomers are going away and we’re going to have a big chunk of the knowledge leaving,” McGuire says. The Joint Apprenticeship Training Committee, a group set up with each union apprenticeship program, is an eight-member team with half the members made up of union employees and the other half employers in the plumbing, steam fitting, pipe fitting, and welding fields, decides twice each year how many apprentices to take on. If someone wants to become a plumber through UA Local 367, they fill out an application requesting to join the apprenticeship program, McGuire says. The union generally has openings for around twenty apprentices each year at its West Potter Drive location. The applicants go through interviews with the Joint Apprenticeship Training Committee members and the top applicants are selected. There are a few caveats, McGuire says—if a female applies and isn’t among the group of top appli-
On the job, first-year apprentices mostly get the low-skilled jobs, like getting materials where they need to be, and do some side-by-side training with journeymen. In the winter, the first-year apprentices have a six-week training period where they go to school from 7 a.m. to 3:30 p.m. weekdays. There’s no cost to applicants for the training, as it’s part of their “fringe benefit” package through the union. The cost for training is paid for by working union members. The apprentices typically aren’t able to work during the training window. McGuire says they may be able to collect unemployment, however. “It’s only six weeks long. They can plan accordingly,” he says. Following the training period, apprentices can go back out to work until the training period the following year. The apprentices are required to complete roughly 2,000 hours of work each year or to have five years and 10,000 hours logged by the time the apprenticeship is complete. About 1,200 of those logged hours are in the classroom as part of the training, McGuire says. “So, roughly 8,800 hours is on-the-job training, where the individual is getting training and getting paid a decent, livable wage,” he says. Trainees start at the 40-percent mark, he says, but for every six months and one thousand hours the apprentices work, they get a 5 percent bump in wages. Beginning apprentice wages are about $24 an hour,
January 2016 | Alaska Business Monthly
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plus benefits, he says. Applicants will be making a living wage from the start. That’s more than many entry-level workers are able to make and more than nonunion plumbers that might be working on the same job, he says. After they’ve completed the five years and ten thousand hours of training, McGuire says apprentices take the state and municipal plumbing examination. State requirements for a journeyman plumber’s license are lower—four years and eight thousand hours, he says, but the union program is geared to be more stringent to produce high-quality results. “Our guys are more qualified, they’re better trained. They should be able to go to a job site and knock the work out cleaner, more efficiently, and better all the way around,” McGuire says.
Building Blocks of Learning
As with any school program, the apprentices learn various skills that build on each other over the course of the five-year program. Byron Flippin, the UA Local 367 training coordinator, says apprentices enter the program with a range of experience—some have no experience whatsoever and might not be able to read a tape measure accurately, while others have some knowledge of the field.
What They Learn
The apprenticeship is not easy work: apprentices must learn a wealth of information in a brief window of time. Here’s a brief synopsis of what they learn each year: Year One Read a tape measure Basic use and care of tools Valves port and fasteners Using a grinder Pipe joining methods Setting up an oxygen-acetylene torch Year Two Proper pipe joining techniques Soldering and brazing techniques for larger-diameter pipe Crane usage Proper knots used for lifting and transferring pipe on a job site Year Three How to set up boiler control systems Pump alignment Refrigerants Refrigeration piping Plumbing theory “Green Awareness” week, learning about the Leadership in Energy and Environmental Design, or LEED program
Year Four (Typically seven weeks instead of six) Two weeks spent learning to use a crane to pick, match, and fit pipe Understanding codes When to use different flanges and valves Fabrication and welding Year Five Brazing copper pipe for use in hospitals and dentist’s offices Occupational Safety and Health Administration rules Preparing for state and municipal plumbing exams Every apprentice, even if he or she wants to be a pipeline welder or pipefitter, is required to obtain a plumber’s license from the state and the Municipality of Anchorage. “A lot of the work in Anchorage is plumbing,” Flippin says. “A lot of the guys need to have plumbing licenses because a lot of our contractors require it … and plumbing guys work all year. The more skills you have, the more work you’re going to do.” UA Local 367 has about 750 active members, about half of which are working in the building trades in the Anchorage region and half are in the metal trades, working for Anchorage Water and Wastewater Util-
Proudly providing highly skilled manpower to mechanical contractors and bringing projects in ahead of schedule and under budget, since 1938.
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Learn more about UA Local 367 and the mechanical contractors we work with by visiting www.ualocal367.org and www.amcaanc.com
Alaska Business Monthly | January 2016 www.akbizmag.com
ity, ENSTAR Natural Gas, or the Municipality of Anchorage. A handful more work with other unions or in the Lower 48. The UA Local 262 in Juneau is a much smaller group, with about 80 total members and 13 apprentices currently going through training, says training coordinator and apprentice instructor Brad Austin.
Training Trainers to Train
Flippin works with two full-time and three part-time instructors. The apprenticeship classes run consecutively, beginning with the fifth-year training in September and ending with the first-year classes in April or May. Training all five skill levels takes most of the year. The trainers also attend yearly training sessions held at the national United Association University at Washtenaw Community College in Ann Arbor, Michigan. “It’s only one week—I really wish it were longer,” Flippin says. “None of us are professional instructors. We enjoy the training.” UA Local 367 business agent Aaron Plikat says Flippin and the other instructors were carefully selected for the job of training apprentices. “They are experts in our industry and they were leaders in our field before coming in (the training program). They really showed an extreme knowledge of our industry,” he says. Flippin says during the one-week training event in Michigan, he takes classes on everything from dealing with troubled apprentices to fiduciary classes that clarify how budgetary reports should be handled.
From a Dead-End Job to a Career Path Zack Talbert, a fifth-year apprentice with UA Local 367, says he was working “a deadend job in a warehouse” in Anchorage when a cousin going through the UA Local 367 apprenticeship program encouraged him to apply. “My family has been in it since I was a kid,” Talbert says of the union. His uncle and his cousin are union employees and his father, Larry Talbert, is the union’s business manager. “It’s much, much better than the warehouse. It’s guaranteed wages and I feel like I’m actually accomplishing something, rather than just moving boxes around,” he says. Talbert says being in the apprenticeship program and on a path to a lifelong career has meant economic stability for him. Instead of living paycheck-to-paycheck and wondering how he was going to pay his bills, he’s been able to pay for basics along with saving money. “I bought my first house, I’m driving a brand new car, I’m able to eat good food,” he says. “I’m not struggling with my bills anymore. It’s nice to have some security.” www.akbizmag.com
Talbert says there have been a few periods where he’s been laid off-normally just for a week or two, although once it was for a month. “I saved up accordingly and it worked out. It does happen, you just prepare for it,” he says. The first couple years of low-skilled work were a challenge, but Talbert says he was mentally prepared to be the “gopher” and, with time, he’s moved to more skilled tasks. “It wasn’t grueling labor or anything. Slowly, they give you more and more responsibilities here and there. Now they’ll give me a task, and, if it’s not something I’ve done before, they’ll pair me with a journeyman. But I can do pretty much all of it,” he says. Apprentices are required to take whatever job is available to them, whether it’s working new construction or doing residential repair work. Once he makes journeyman, Talbert will have the option to turn down jobs he’s not interested in. But for now, he says, he likes taking the luck of the draw. “I might be at the same job site for a couple of months,” he says. “It helps with the monotony.” Now, he says he’s working for Superior Plumbing on a remodeling project at Alaska Regional Hospital. After he gets his journeyman’s license, Talbert says he might choose the new construction jobs and let other apprentices tackle the remodeling work. Overall, Talbert says he’s proud to be part of the apprentice program and have an opportunity to make a good career for himself. It’s not a path many of his friends are on, he says, but he’s trying to encourage them to change. “They’re mostly still working in jobs that don’t have forward progression,” he says. “I recommend [the apprenticeship program] as often as I can.”
Building a Workforce, a Balancing Act It’s no simple thing to get into a union apprenticeship program. They’re competitive, says Andrews. There’s a reason: the Joint Apprenticeship Training Committee doesn’t want to create more workers than it has jobs to fill. “There’s nothing worse than a young man or woman ready to get into a trade and wanting to make a bunch of money, but there’s no work,” Flippin says. “We’ve all been laid off a number of times. There’s no crystal ball, so you really can’t tell for sure [what the job market will be like]. We just try to put our heads together.” Balancing job seekers with jobs hasn’t always worked. In the ‘80s, when trans-Alaska oil pipeline construction ended, there was a glut of workers and no jobs. As industry officials talk about and plan for a liquefied natural gas, or LNG, pipeline being pos-
sibly built in the near future, that balance is being scrutinized from every angle. “The whole thing with industry is, if you don’t have the work, you can’t train the workforce,” Andrews says. “We kind of have to know ahead of time so we can prepare the workforce,” Plutt says. “If we knew now that in five years we’re going to need [workers] we could definitely ramp up. But we need some time ahead to do that.” UA Local 375 is part of an effort to build a pipeline-construction workforce. In addition to training apprentices and holding accelerated pipeline welding classes, the union participates in a yearly pipeline construction training event held at the Fairbanks Pipeline Training Center. It’s a joint training event with members from the pipefitters, teamsters, operators, and laborers unions. The training event allows the trades to practice working together in a mock pipeline construction event. The state Department of Transportation and Public Facilities and the Associated General Contractors of Alaska have discussed project spacing-staggering project dates to avoid overloading the job market and to allow more trained workers to be prepared for potential pipeline development. “They want to stage it so it doesn’t become some overblown thing that requires Outside workers. We’ve gone through this before when we crashed in the ‘80s. They’re very cautious about that these days,” Andrews says. That’s in part why Governor Bill Walker issued an administrative order November 9, 2015, requiring at least 15 percent of project hours on state projects to be completed by registered apprentices and setting a target of 15 percent registered apprentices working on future oil and mineral development projects on state lands. “Registered apprenticeships expand our supply of highly trained workers and give Alaskans the training they need to earn good middle-class wages,” Walker says. “This is truly a win-win for the state and for working families.” Andrews says using registered apprentices won’t replace journeymen on the jobs, but it might replace out-of-state workers who travel to Alaska for employment on larger projects. He added that, in addition to building a strong workforce for a potential pipeline, it connects to Alaska’s future. “Energy efficiency and renewable energy-we’re going to need folks who can put in that equipment,” he says, noting that those jobs take similar skills to those needed for pipeline construction. R Freelancer Rindi White writes from Palmer.
January 2016 | Alaska Business Monthly
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ENERGY
Courtesy of Interior Gas Utility
The Interior Energy Project held a groundbreaking ceremony in North Pole on June 5, 2015, which was attended by about one hundred people, including Governor Bill Walker (center).
Interior Alaska Energy AIDEA banks on ‘bridge’ project By Julie Stricker
T
he year was 1976. The United States celebrated its Bicentennial. The twodollar bill was introduced. Jimmy Carter was elected president. Gasoline cost fifty-nine cents per gallon and Congress passed the Alaska Natural Gas Transportation Act, an effort to build a natural gas pipeline from the Prudhoe Bay to the Lower 48. Over the next four decades, various efforts would be made to build the pipeline, closely watched by the residents of Alaska’s second-largest city. Fairbanks sits at the center of a perfect storm for high energy prices: the community of thirty thousand endures long, dark, brutally cold winters; residents rely on high-priced fuel oil; it is hundreds of miles from oil and natural 64
gas deposits and has limited transportation options; and its location in a closed valley helps pool pollution, leading to some of the worst air quality in the nation. The pollution is exacerbated as many residents turn to wood in an effort to lower their heating costs. Burning wood results in PM2.5 particulate pollution, which leaves a smoky haze over many neighborhoods and puts air quality well below EPA standards. For decades, state and local leaders have touted a gas pipeline through or near Fairbanks as a solution to the community’s high costs and air quality problems. But with the construction of a pipeline now estimated to cost $50 billion and still no plan or timeframe in sight, leaders are looking to smallerscale “bridge” projects to bring energy relief.
Project Creation
In 2013, the Alaska Legislature created the Interior Energy Project. It is an Alaska Industrial Development and Export Authority (AIDEA) vehicle to bring affordable, clean energy to as many Fairbanks-area residents as soon as is feasible. The project is a joint project between AIDEA; the Alaska Energy Authority; the Alaska Department of Commerce, Community, and Economic Development; the Alaska Department of Revenue; and the Alaska Department of Natural Resources. “AIDEA is really kind of like our banker,” says Mindy O’Neall, communications manager for the Interior Gas Utility (IGU), a natural gas distributor in Fairbanks and North
Alaska Business Monthly | January 2016 www.akbizmag.com
Source: Interior Energy Project
Construction map of the Interior Energy Project.
Pole and a wholly-owned subsidiary of the Fairbanks North Star Borough. “In some ways, we’re a partner with them in that they allocate the dollars that we have to use for the project. They say yeah or nay to the expenses that we have. They set the rules and authorize us moving forward with the next phases of the project,” O’Neall says. Through the Interior Energy Project, AIDEA is working with a wide variety of public and private organizations to accomplish five major points: 1. Develop the supply chain. AIDEA is working with the utilities in Interior Alaska (Golden Valley Electric Association, Fairbanks Natural Gas, and IGU) to build and coordinate the transportation, storage, regasification, and distribution of natural gas in the region. 2. Negotiate purchase terms. AIDEA is negotiating purchase terms with natural gas suppliers on behalf of the utilities. 3. Finance a liquefaction capacity. AIDEA plans to work with a private entity to www.akbizmag.com
develop LNG (liquefied natural gas) capacity. 4. LNG transportation options. The logistics and costs of transportation is a key part of AIDEA’s project plan. It is evaluating railroad and road transportation options. 5. Finance a natural gas distribution network in Interior Alaska. AIDEA authorized $37.5 million to develop the IGU distribution plus another $15 million to expand the Fairbanks Natural Gas distribution system. That’s a lot of moving parts, but in 2015 the effort started to gain traction, and AIDEA is hoping to have major supply, transportation, and distribution plans in place in the coming months.
Plans Change
Early on, the project focused on a plan to truck liquefied gas from the North Slope to Fairbanks. But in late 2014, skyrocketing costs shuttered those plans. Instead, AIDEA
has expanded its scope to look at Cook Inlet energy sources, as well as Prudhoe Bay. It also sought proposals to supply natural gas to the project. AIDEA is looking for long-term commercial prospects and hopes to be able to get gas delivered to Fairbanks for about $15 per thousand cubic feet, about half the current cost. Of the thirteen it received, AIDEA chose five finalists, said AIDEA external affairs officer Karsten Rodvik. “We expect to make a partner recommendation to our board in early 2016,” he said in an email. “By the end of the first quarter in 2016, we anticipate having commercial terms in place and authorization for our partner to move the project forward.” AIDEA says it anticipates increased demand for gas in Fairbanks as more residents switch to the cleaner fuel. Initially, AIDEA estimates demand will triple over the next decade, from about 3.44 bcf (billion cubic feet) per year in 2017 to 9.25 bcf in 2016. Of that, 2.6 bcf will come from Golden Valley Electric Association for power generation. North Pole residents noticed activity in summer 2015, as the IGU worked to build
January 2016 | Alaska Business Monthly
65
Stockpiled natural gas pipe for the Interior Energy Project. Courtesy of Interior Gas Utility
out infrastructure to the community. The utility received a $29.8 million construction loan from AIDEA, which enabled it to move ahead on the first three phases of construction, says IGU’s O’Neall. “We installed about seventy-three miles of pipe this summer [2015] in about one hundred days,” she says. “We had about seventy-five thousand man hours in the field this year [2015] to do that. One of our big milestones is we didn’t have any losttime incidents in our first major field season. That’s a pretty big milestone.”
AIDEA’s Pentex Purchase
In June, AIDEA bought Pentex, the parent company of Fairbanks Natural Gas, the natural gas distributor for Fairbanks. The $52.5 million sale also included a gas processing facility in Point MacKenzie and two trucks used to transport the fuel to Fairbanks. Fairbanks Natural Gas had a base of about one thousand customers, and AIDEA says the sale will likely bring about a 13 percent reduction in their fuel bills this winter. It says its ownership is short-term and AIDEA is in talks to transfer ownership to another utility or municipality. In the meantime, IGU’s O’Neall says the utility is taking another look at how a potential integration with Fairbanks Natural Gas may change its service area. While lower fuel prices may have reduced the economic urgency of the Interior Energy Project’s goals, air quality is equally important, she says. “The cost of heating a home in such an extreme atmosphere is one thing,” she says. “There are the air quality issues. We’ve already had a week of air advisories and we’re at the very beginning of winter. That’s a component of why this is such an important project for Interior Alaska.” Despite the summer construction ef66
forts, O’Neal says the project was in an “evaluation phase” in mid-November 2015 as the utility waits to hear which company AIDEA chooses on the supply and transportation side. Storage options are still being worked out. Many questions remain. “When can we expect natural gas for real to be delivered to the community?” she asks. “How much empty pipe do we put in the ground? We want to make sure we’re doing this in a method that is safe for the community and is strategic so we can get as many people as possible onto natural gas.”
Transporting LNG by Rail
On the transportation end, the Alaska Railroad received approval to move LNG by rail, making it the first railroad in the nation to do so. The railroad started working on the process a couple of years ago while AIDEA was focused on a North Slope option, says Bill O’Leary, Alaska Railroad president and CEO. “We wanted to make them aware that we were out there,” O’Leary says. “When it became clear that AIDEA was going to go back out and take a look at what the other options were from the original project, we wanted to make sure we were ready. We’d been working with a number of other prospective suppliers of LNG and wanted to make sure we had all of our ducks in a row on this.” The railroad started looking at what the supply chain would be from its perspective and on getting the necessary permits from its regulatory agency, the Federal Railroad Administration. The railroad put in its application to move LNG in February and worked with the Federal Railroad Administration over the ensuing months, which culminated in the railroad getting unprecedented approval in October. However, the initial amounts approved were too low to meet AIDEA’s
projections for Fairbanks demand, so the Alaska Railroad went back to the Federal Railroad Administration and was successful in getting the letter revised to provide commercial quantities. “The new letter allows us to move larger numbers and it’s graduated and allows us to move up as demand increases,” O’Leary says. In addition, if something changes, such as higher demand, the railroad can go back to the Federal Railroad Administration to ask for further adjustments. O’Leary doesn’t anticipate any capital outlay to ship the LNG as the shippers would likely own the ISO tanks. Depending on which supplier is chosen, shippers may access the railroad at various sites, such as Seward or Anchorage, although they may have to truck the LNG short distances as the project gets underway. He says the railroad can start shipping as soon as the shippers are ready and once the storage and distribution networks in Fairbanks are set up. LNG will help fill a hole in the railroad’s operations created when the Flint Hills refinery shut down in 2014 and Usibelli Coal Mine exports declined. “It’s a good start,” O’Leary says. “We think LNG fits into the railroads model very nicely. As I like to say, it ticks a couple of boxes. We certainly have the capacity and we certainly have the need to move more freight products and it also really meets a big part of our statute, our mission statement: that’s just really to help with the economic development of Alaska. “So a big part of that is we can be a part of lowering energy costs to the Interior. That’s a huge deal. So it’s good for us and good for the state; hey, what’s not to love.” R Julie Stricker is a journalist living near Fairbanks.
Alaska Business Monthly | January 2016 www.akbizmag.com
ECONOMY
The Curse of Natural Resources ‘More likely a resource drag’ By Alex James
T
he idea that natural resources—like timber, agriculture, coal, and oil— are harmful for economic growth runs counter to our conventional wisdom, perhaps especially so in a place like Alaska where oil revenue finances so much of our state budget and accounts for about onethird of employment statewide. But a significant number of economists and political scientists believe that natural resources are capable of stunting economic growth, leading to a so-called “resource curse.” The idea that natural resource-rich economies tend to, on average, grow slowly is well understood and generally accepted among researchers that work in this area. What is less understood is the cause of this negative relationship.
‘Dutch Disease’
One commonly referenced (potential) explanation of a resource curse is named after the Dutch experience and is aptly named the “Dutch Disease.” In short, during a resource bonanza, the natural resource sector offers relatively high wages and this pulls labor out of an existing manufacturing sector and pushes it into the resource and service sectors. An economy that is “suffering” from Dutch Disease is likely characterized by a large service sector, a small manufacturing sector, and high wages. A common misconception is that a Dutch Disease is in-and-of itself a bad outcome. In fact, such labor market responses to a resource boom reflect optimal economic behavior. A Dutch Disease only becomes a “disease” if once the resource boom has subsided, the economy is unable, for some reason, to return to its optimal, pre-boom allocation of labor.
Political Corruption
Other research has shown that resourcewww.akbizmag.com
rich economies suffer from political corruption—and the policies that corrupt governments implement. There are a couple of reasons to think an oil-rich government may be susceptible to corruption. The first is that taxation may actually be necessary for representation. A constituency that is not taxed may become acquiescent and fail to provide the government with adequate oversight. Natural resource sectors also generate rents that can be embezzled by public elites. Some of my ongoing research tests whether this relationship between oil wealth and political corruption holds true across the United States. Some of my preliminary results suggest so, but more work ultimately needs to be done. And there are meaningful consequences of political corruption. Among other things, the economics literature has linked corruption to greater income inequality, lower state bond ratings, less stringent environmental regulations, and importantly, slower economic growth.
‘Resource Drag’
In a recent article titled “The Resource Curse: A Statistical Mirage?” I argue that the observed slow growth of resource-rich economies is more likely due to something called a “resource drag” than a resource curse. A resource drag exists when a natural resource sector grows more slowly than the rest of the economy (due to say, decreasing natural resource prices). In such a case, the existence of a natural resource sector simultaneously slows aggregate growth while elevating income levels. It turns out that this idea explains away much of the observed slow growth of oil-rich countries. And it’s quite likely that Alaska residents experienced a resource drag as oil prices dropped precipitously from 1985 to 2000.
Over that sample period, per capita income in Alaska stagnated while that for the country grew around 2 percent annually. But for each year of the period, income per capita in Alaska exceeded that for the nation (on average it was 14 percent higher). Does this imply that Alaska has not suffered from a resource curse? No. To answer that question, we have to be able to estimate what Alaska would look like today had oil never been discovered here—and this is a challenging task. Such an exercise is nonetheless worthwhile and could help to define the causal relationship between natural resources and economic development, yielding both local and global policy implications. Future research in the economics department at UAA will attempt to answer this important question. R
Alex James is currently an Assistant Professor of Economics at the University of Alaska Anchorage. He received his PhD in economics from the University of Wyoming in 2012 and completed a two-year post-doctoral research fellowship at the Oxford Center for the Analysis of Resource Rich Economies (OxCarre). His research interests broadly include natural resource and development economics with a particular focus on the social and economic impacts of resource production. Contact him at ajames27@uaa.alaska.edu.
January 2016 | Alaska Business Monthly
67
OIL & GAS
Alaska Oilfield Support via Advocacy By Tom Anderson
W
tics, and industry subject matter including links to pertinent articles and a “Fact Check” section to counter local media and stories that may show inaccuracies. The blog features posts on different topics pertinent to resource development in Alaska including a “Mega Projects” overview to help Alaskans understand the AKLNG project from a different perspective. “The time to support resource development industries in Alaska is not when a crisis occurs; the time is now,” says Logan. “We want to keep Alaskans informed every day so when a crisis occurs, and it threatens the industry and our state, Alaskans are ahead of the game.”
hen it comes to commerce in Alaska, it doesn’t get any larger than oil and gas sector development. In concert, billions of dollars in expenses, thousands of employees, and myriad infrastructure equate to a thriving industry comprising a huge chunk of Alaska’s state and municipal budgets. Oil and gas are the lifeblood of the state’s economy. Outside of each petroleum company’s communications and public affairs division, a collective of trade association advocacies carry the information torch to the public and policymakers. These nonprofit organizations operate because of the resource development industry’s financial support and member contributions. Absent these few and effective associations, the engines of exploration, extraction, and delivery may not churn quite as easy. Undoubtedly, if it weren’t for such advocacies the public would likely not understand the critical importance of development, and legislative support could be compromised.
At the federal level, the Alliance focuses its efforts on educating the agencies that have oversight of Alaska’s resource development like the Environmental Protection Agency and the Department of the Interior. Logan, her directors, and members of the organization intermittently spend time with congressional members from states that benefit from active resource development in Alaska. One example is Rhode Island, where an Alliance contractor spends nearly $1 million annually to purchase equipment to support an Alaska project. In 2015 members briefed presidential candidates and their campaigns on the role Alaska can play in solving some of the nation’s problems, including energy security, defense, employment, and revenue generation. The Alliance’s annual conferences, digital messaging, and website content also supplement both national and statewide outreach efforts. At the state level, in recent years SB21 (tax reform) and SB138 (enabling legislation for AKLNG) were two critical pieces of legislation that the Alliance as a whole advocated
Alaska Support Industry Alliance
“The time to support resource development industries in Alaska is not when a crisis occurs; the time is now. We want to keep Alaskans informed every day so when a crisis occurs, and it threatens the industry and our state, Alaskans are ahead of the game.”
The mission of the Alaska Support Industry Alliance is to “promote responsible exploration, development, and production of oil, gas, and mineral resources for the benefit of all Alaskans.” Executive Director Rebecca Logan and her board of directors accomplish the advocacy’s mission through a strong government relations program at both the state and federal level. The organization also implements educational campaigns meant to improve public awareness of the relationship between political decisions, industry activity, and Alaska’s economic health. “We actively participate in each legislative session in Juneau—monitoring any activity that pertains to the oil, gas, and mining industries,” says Logan. “We frequently support or oppose bills based on their impact on the resource industries and the support industry. We also have an Independent Expenditure ‘We Are Alaska’ that we utilize in elections—either supporting or opposing candidates, or supporting or opposing ballot measures,” she adds. 68
Alaska Oil & Gas Association
As the professional trade association for the oil and gas industry in Alaska, the Alaska Oil & Gas Association (AOGA) is the voice of industry. “On matters of public policy, AOGA is able to provide policymakers with consensus viewpoints on subjects ranging from taxes, environmental regulations, permitting, and litigation,” says Kara Moriarty, president and CEO. “Our efforts support industry by providing consistent feedback to
—Rebecca Logan Executive Director, Alaska Support Industry Alliance
for and supported. In addition, defeating the referendum to repeal SB21 was significant victory, and members actively participated in the effort through the “We Are Alaska” campaign. The Alliance is part of State Senator Cathy Giessel’s Oil and Gas Tax Credit Working Group and will be working through that group to develop a reasonable approach for a future oil and gas tax credit system. AK HEADLAMP is a new project the Alliance has launched to bypass the mainstream media and directly message Alaskans. The blog features a daily recap of the previous day’s news on Alaska energy, poli-
decision makers on issues that impact the industry as a whole, not just one particular company. When AOGA publicly supports or opposes an issue related to oil and gas, it is safe to say the majority of oil and gas producers, explorers, refiners, transporters, and marketers agree with that position.” Moriarty notes that AOGA is active at all levels of government, including in the Alaska capital of Juneau, Washington, D.C., and in statewide communities if an issue impacts oil and gas operations. “Often, because AOGA is considered a ‘one stop shop’ by many legislators and
Alaska Business Monthly | January 2016 www.akbizmag.com
© Dave Harbour
‘Efforts are broad and far reaching’
“Often, because AOGA is considered a ‘one stop shop’ by many legislators and policymakers, our organization is asked to provide the industrywide view on proposed laws, regulations, and policies that could impact the industry.”
—Kara Moriarty President and CEO, Alaska Oil & Gas Association
policymakers, our organization is asked to provide the industry-wide view on proposed laws, regulations, and policies that could impact the industry,” she adds. “The efficiency afforded with speaking with one voice gives decision makers at all levels confidence that the industry’s view is being represented in a comprehensive manner.” Moriarty, External Affairs Manager Sar-
www.akbizmag.com
ah Erkmann, and the entire AOGA management team are very active on social media platforms, including Facebook, Twitter, and Instagram. The organization uses multiple online digital tools to inform the public about various aspects of the industry, as well as solicit feedback and answer questions from Alaskans. “AOGA maintains its website with current industry information, and staff members are often out in the community doing informational presentations to groups like Rotary, chambers of commerce, policy groups, students, or whomever wants to learn more about the oil and gas industry in Alaska,” says Moriarty. AOGA has been successful in spearheading efforts to defeat anti-industry ballot initiatives like the contentious oil tax referendum in 2014, as well as building public support for industry operations in Alaska. Moriarty notes that on the national level, AOGA and its partners have been successful in fighting ill-conceived government regulations, as well as through the judicial process on matters affecting the industry. “AOGA is consistently working a variety of issues to ensure that any restrictions placed on industry are done so only if the best possible science has been applied and not in such a way as to jeopardize industry’s ability to operate in Alaska,” adds Moriarty.
Resource Development Council for Alaska The Resource Development Council for Alaska, Inc. (RDC) is a statewide, nonprofit, membership-funded organization comprised of individuals and companies from Alaska’s oil and gas, mining, timber, tourism, and fishing industries. Led by Executive Director Marleanna Hall, RDC’s membership includes all twelve land-owning Alaska Native regional corporations, local communities, organized labor, and industry support firms. “Our purpose is to link these diverse industries together to encourage a strong, diversified private sector and grow Alaska through responsible resource development,” says Hall. RDC’s robust advocacy strength comes from diversity in its membership. “With the broad interests we represent, RDC is able to link a diverse network to help advocate for a strong private sector economy through responsible resource development,” says Hall. “RDC tackles many issues these industries face through our involvement with the legislature and with state and federal agencies. RDC rallies its members to public hearings to support projects that will create new jobs, result in new opportunities for Alaskan businesses, and expand our economy.” Hall notes that the nonprofit’s efforts are
January 2016 | Alaska Business Monthly
69
“RDC tackles many issues these industries face through our involvement with the legislature and with state and federal agencies. RDC rallies its members to public hearings to support projects that will create new jobs, result in new opportunities for Alaskan businesses, and expand our economy.” —Marleanna Hall Executive Director, Resource Development Council for Alaska, Inc. broad and far reaching in the state and nationally, including support for oil and gas exploration and development in the Arctic, advancement of the Alaska LNG Project, support for access to and development of new
mineral prospects, support of economic timber sales for the forest products industry, and measures that will grow tourism and sustain our fishing industry. Similar to other Alaska oil and gas in-
dustry support organizations, the RDC hosts annual events, conferences, forums, and venues of exposure to share news and information with the public and policymakers. The synergy between print, email, digital, and direct messaging has proven effective in educating recipients on the value of responsible development in Alaska. A major priority in 2016 is the implementation of a sustainable long-range fiscal plan for Alaska and encouragement of new industry investments to grow the economy over the long term. In complement to the RDC’s outreach to members and community, a vibrant online newsletter and annual report archive afford prospective investors in the industry and citizens the opportunity to research and acquaint themselves with demographics, data, and statistics.
Solidarity and Effective Communications Compared to other states, Alaska may very well have the most cohesive natural resource development trade and industry associations in the nation. The Alliance, AOGA, and RDC have their roles and implementation down. Whether a letter to Congress, an email to association members, Facebook branding, or support of candidates and policies via a newsletter and visit to a state or federal capitol, they’re making a difference independently, collectively, and in unison with resource company communications divisions. These organizations epitomize results-based teamwork, and with the metrics to show success based on decades of blossoming oil and gas development. The advocacy task is formidable, considering the size of the state. Layers of federal, state, borough, and local bureaucracy further complicate the simple one-on-one conversation of the past. Yet through websites, social media, annual conferences and research reports, and the strategized outreach to Alaskans and elected officials, Alaska’s resource industry advocacies are effective and making a huge difference in the state’s commerce. R
Tom Anderson writes from across Alaska. 70
Alaska Business Monthly | January 2016 www.akbizmag.com
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ConocoPhillips, Alaska Inc.
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Only six tracts (shown in red) were bid on the federal NPR-A lease sale.
North Slope Leaseholders Winter in motion, or not By Tom Anderson
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very year the state of Alaska holds two annual competitive oil and gas lease sales, one in the spring and one in the fall. In November, three area lease sales occur in the North Slope, North Slope Foothills, and Beaufort Sea exploration regions. The Division of Oil and Gas oversees this process under the Alaska Department of Natural Resources, and in 2015 the November 18 bid lease sale encompassed 7,727,986 acres. At the same time, the US Department of the Interior held a bid opening for leases it offered in the National Petroleum Reserve-Alaska.
Preliminary Findings
On November 18, 2015, the Division of Oil and Gas released its “Record of Winning Bids” for the North Slope Areawide region and indicated the bidding method was a cash bonus bid and fixed royalty. Accumu72
late Energy Alaska, Inc. (77.5 percent ownership) and Burgundy Xploration LLC (22.5 percent ownership), both based in Houston, bid on 121 tracts; Denver-based 70 & 148 LLC bid on 10 tracts; and ConocoPhillips Alaska, Inc. bid on 3 tracts. The total number of valid bids was 134, with 131 tracts leased. The sum of the winning bids totaled $9,510,956.80 with 186,400 acres awarded. ConocoPhillips was outbid by 70 & 148, LLC. No bids were received for the Beaufort Sea or North Slope Foothills tracts, and all but three North Slope tracts were for shale areas. The federal lease sale was for 143 tracts totaling about 1.4 million acres in the National Petroleum Reserve-Alaska. That sale was successful for ConocoPhillips. The company was the sole bidder and placed bids on six tracts for a total of 28,589 acres in the amount of $788,680, which the state of Alaska receives 50 percent—$388,340.
ConocoPhillips
Also in mid-November 2015, ConocoPhillips announced approval of funding for the Greater Mooses Tooth #1 (GMT1) development in the National Petroleum ReserveAlaska, with production beginning near the end of 2018. Peak production is estimated at approximately thirty thousand barrels of oil per day. The company noted development includes gravel pad, facilities, pipeline, a 7.7 mile road, and nine starting wells, with a capacity ceiling of thirty-three wells. The construction will take place over the 2016 and 2017 winter seasons, employing as many as seven hundred workers. “GMT1 is expected to cost approximately $900 million gross and follows our recent successful completion of the CD5 project,” said Joe Marushack, president of ConocoPhillips Alaska, in the company’s November 18, 2015, press release. “We are pleased to have
Alaska Business Monthly | January 2016 www.akbizmag.com
been able to work through key permitting issues with the Corps of Engineers and BLM [Bureau of Land Management] that now allows us to move into the development phase.” GMT1 is in the boundaries of the National Petroleum Reserve-Alaska. The project will produce from lands owned by Kuukpik Corporation, Arctic Slope Regional Corporation, and the Bureau of Land Managment. GMT1 will be operated by ConocoPhillips Alaska, which holds a 78 percent leasehold interest. Anadarko holds the remaining 22 percent interest. In October 2015 ConocoPhillips brought its Alpine CD5 and Kuparuk 2S drill sites online. The company announced in March 2015 that approval for viscous oil development at Drill Site 1H North East West Sak (1H NEWS) in the Kuparuk River Unit was expected in 2017. Permits for Greater Mooses Tooth #2 were filed in August 2015. The CD5, GMT1, Kuparuk Drill Site 2S, and 1H NEWS developments represent nearly $3 billion in new North Slope projects and an estimated forty thousand to fifty thousand barrels of oil per day. Passage of tax reform in 2013 by the Alaska State Legislature was a significant factor in ConocoPhillips’ Alaska investment decisions, noted Marushack.
Repsol/Armstrong
In mid-October 2015, Repsol and Denverbased privately held Armstrong Oil & Gas, Inc. reached an agreement to re-align working interests, operatorship, and majority ownership from Repsol to Armstrong in their collective Alaska North Slope exploration and development venture, and as a result the planned drilling for this winter is deferred. The Armstrong and Repsol early stage development of new discoveries are in the Colville River Delta area located between the 3.5 billion barrel Kuparuk River Field and the 700 million-plus barrel Alpine Field, with permitting for a three-pad development submitted in June by Repsol. The production rates are estimated to be 120,000 barrels of oil per day. In the October 2015 press release announcing the re-alignment it was noted by Armstrong’s President Bill Armstrong that “Armstrong and Repsol’s North Slope project is representative of the new movement in Alaska where smaller independents work and operate in areas previously dominated by major oil companies.” He added, “As an example, the two most recent developments on the North Slope are operated by independents: Oooguruk Field developed by Pioneer Natural Resources and the Nikaitchuq Field developed by Eni. Both fields were originally generated and assembled by Armstrong Oil & Gas, Inc. With oil flowing through the trans-Alaska oil pipeline at about 25 percent of capacity, www.akbizmag.com
January 2016 | Alaska Business Monthly
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Alaska is working hard to attract new oil and gas companies to the state. A new competitive tax regime is now in place along with a pro-development mindset.”
Independents Making Mark
The resource development process in Alaska starts with companies leasing land to explore and then submitting plans for development and operations. The process is layered, and complicated, but always begins with exploration and new development. For years it was the larger producers like ConocoPhillips and BP that applied for and pursued major exploration activities. In recent years small to mid-sized oil and gas companies like Caelus Energy Alaska, Hilcorp Alaska, and Great Bear Petroleum have made great strides in investment and exploration in the state after successful bids in the state’s lease sales. The latest lease sale was not completely without interest from companies and investors seeking bid securement for North Slope oil and gas sales. Corri Feige, the Division’s director, stated in a November 18, 2015, press release that the lease sale results showed “continued interest in exploring the North Slope’s shale oil resources.” She added that the sales “indicate that industry realizes the vast energy potential held in this region.
These results are very encouraging in light of the current low oil prices.” For winter 2016 oil and gas exploration activity, the November 2015 Department of Natural Resources map is the most current for details. Among other ongoing activity, Caelus installed a pad and access road at Nuna Drill Site 1 and Hilcorp is planning to drill three development wells and three services wells at Milne Point, as well as develop the Liberty Unit including construction of a manmade gravel island five miles from the coast. Great Bear is considering testing its Alkaid 1 well in addition to a 3D seismic survey for leases south of Prudhoe and Kuparuk. Accumulate Energy Alaska is drilling the Ice Wine 1 exploration well from its Franklin Bluffs pad, while SAExploration is also conducting an Ice Wine 3D seismic survey south of Deadhorse, near Franklin Bluffs and Dalton Highway, and is also planning a 2016-2017 Akluq 3D seismic survey.
Unfortunate Departures
One measurable difference in Alaska’s 2016 resource development horizon is the departure of Shell, Repsol, and Statoil. After $7 billion expended on offshore oil exploration in the Chukchi Sea, Royal Dutch Shell is departing Alaska citing the enormous costs
and less-than predictable regulatory climate faced by all petroleum companies in the state. Also, the Repsol and Armstrong restructure could mean the loss of five hundred North Slope oilfield contractor jobs this winter due to deferring the planned 2015-2016 winter drilling program. On November 17, 2015, Statoil announced its exit from Alaska operations. With more than forty years of experience in the oil and gas industry on the Norwegian Continental shelf, blossoming to operations in thirty-seven countries globally, the company’s unexpected closure sends ripple effects throughout the industry. “Since 2008 we have worked to progress our options in Alaska. Solid work has been carried out, but given the current outlook we could not support continued efforts to mature these opportunities,” said Tim Dodson, Statoil executive vice president for exploration. Statoil was the operator of sixteen leases in the Chukchi Sea and had a stake in fifty leases where ConocoPhillips was the operator—all awarded in the 2008 federal OCS lease sale. R Tom Anderson writes from across Alaska.
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TRANSPORTATION
Fuel of the Future: LNG Shipping Innovations Alaska to benefit from conversions and vessels
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By J. Pennelope Goforth
he acronym LNG rolls off the tongue smooth and sweet like H2O or PFD and engenders the same comforting feelings of something good. The developing technological advances that have grown up around the use of LNG (liquefied natural gas), touted as clean and green, are poised to move Alaska into a new era in shipping. Three of Alaska’s major shippers—TOTE, Crowley Maritime, and Matson—are following through with new LNG-powered vessels which are designed to ship LNG as well. LNG is poised to forever alter Alaska’s energy economy much the same as salmon did in the nineteenth century and crude oil did in the twentieth. As the up and coming decarbonized fuel of choice, LNG recently changed the “skyline” of the Port of Anchorage with a threestory high art deco looking round storage tank. Over the last decade LNG has quietly usurped crude oil as the cleaner burning fossil fuel of the future, not only for local Alaska use but also for export to Asian markets. So much so that Port MacKenzie is in active negotiations with a Japanese company to build an LNG processing plant. LNG is cheaper, lighter, and cleaner burning than current heavy diesel fuel. More prosaically, soon it will be a required fuel for ships built beginning in 2016 whose owners want to berth ships in European and North American ports and for vessels transiting Arctic waters. The Center for Liquefied Natural Gas describes LNG as “natural gas that is cooled to -260 degrees Fahrenheit until it becomes a liquid and then stored at essentially atmospheric pressure. Converting natural gas to LNG, a process that reduces its volume by about six hundred times, allows it to be transported. Once delivered to its destination, the LNG is warmed back into its original gaseous state so that it can be used just like existing natural gas supplies.” It is this quality that makes it so attractive to the transportation industry’s bottom line. But it can be used everywhere. The Center 76
for Liquefied Natural Gas goes on to say, “When returned to its gaseous state, LNG is used across the residential, commercial, and industrial sectors for purposes as diverse as heating and cooling homes, cooking, generating electricity, and manufacturing paper, metal, glass, and other materials.” Add to this the fact that LNG is not explosive. When it does escape into the air it simply evaporates, leaving no residue on water or soil.
Polar Code
A new regulatory regime based on the cleaner burning fuel is driving some of the innovations in shipping propulsion. In the planning stages for over a decade, these new regimes are now being implemented. The International Maritime Organization recently released the Polar Code, a body of regulations designed to reduce vessel fuel emissions in critical “control areas” like ports where people live and the Arctic and Antarctic, where other mammals live. The code includes limitations on operational discharges, such as zero discharge of oil and oily mixtures, sewage, trash, and other noxious liquid substances. The requirements reduce nitrogen-oxide engine emissions by approximately 76 percent in comparison to a contemporary Tier II engine. The Polar Code, which takes effect in 2017, mandates that vessels—cargo container ships, cruise vessels, tankers, tugs, and other commercial craft—in Arctic waters also have to meet certain ice classifications and have on board specially trained ice navigators. In Alaska, the Polar Code applies to vessels north of 60 degrees latitude. The International Energy Agency recently reported that “where it replaces more carbon-intensive fuels or backs up the integration of renewables, natural gas is a good fit for a gradually decarbonizing energy system: a consumption increase of almost 50 percent makes it the fastest-growing of the fossil fuels.” This outlook bodes well for the energy needs of practically every na-
tion on earth. And it is especially good for Alaska which has the potential to capitalize on this abundant natural resource for decades to come. The condensed nature of the gas makes it a viable commodity on the global market. More ships are being built to accommodate the need. In the wake of the Fukushima nuclear power plant failure in 2011, Japan led the charge for a safer fuel choice. In fact the global market for ships that can transport LNG grew by 30 percent as 119 orders for new LNG vessels swamped shipyards from Finland to South Korea. Plus, approximately sixty tankers that have been in service for more than thirty years are slated to be sent to the breakers’ yard in the face of growing demand for new vessels which meet the changing requirements.
Alaska Conversions
This is all good news for Alaska, especially Western Alaska where people in these communities pay the highest prices in the United States for fuel and all other goods. Highly condensed fuel that can be expanded to six hundred times its volume means transportation costs will drop significantly, which could in turn lower prices for nearly all goods and commodities shipped in as well. In addition, vessel emissions of sulfur and nitrogen oxides, carbon dioxide, and related particulate matter that turn exhaust smoke black and yellow will be greatly reduced if not eliminated from vessels fueled by LNG. Three of the major shipping companies in the Alaska trade—Crowley, TOTE, and Matson—are moving toward changing their fleets over to LNG-fueled vessels as well as purchasing or upgrading vessels specifically designed to transport LNG. Matson, Inc., which acquired Horizon Lines’ Alaska operations in 2015, is committing tens of millions of dollars updating the Alaska operations portion of its fleet. Like Crowley in 2013, Matson embraced the coming LNG era, ordering two vessels
Alaska Business Monthly | January 2016 www.akbizmag.com
with dual fueling capacity. Headquartered in Hawaii, Matson vessels serve Alaska out of Tacoma with regularly scheduled sailings to Anchorage, Kodiak, and Dutch Harbor. TOTE, a Saltchuk company and another Jones Act shipper in the Alaska trade, announced plans to upgrade two of their current cargo container ships by converting them to LNG propulsion. TOTE is the first company in North America to convert their existing cargo container vessels to duel-fueled systems. Based in Federal Way in Washington, TOTE Maritime Alaska supplies approximately one-third of all commodities shipped to Alaska. Following the conversions now planned for next year, the 2003-built Midnight Sun and the North Star are expected to be “green ships.” Citing the cost saving and cleanliness of LNG as a marine fuel, TOTE has also ordered two new LNG-powered container ships. However, following the tragic October 2015 loss of TOTE Maritime Puerto Rico’s cargo container vessel El Faro in Hurricane Joaquin in the Caribbean, TOTE has delayed the upgrades to the Alaska carriers for a year.
Crowley at Forefront
In 2013, Crowley Maritime Corporation’s
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petroleum services group acquired Carib Energy LLC, which held an LNG export license from the US Department of Energy for LNG transportation from the United States into Free Trade Agreement countries. The company then began providing small-scale containerized transportation and delivery to customers in Puerto Rico and the Caribbean, in addition to offering bulk transportation and delivery; vessel design and construction; engineering; consulting; and project management services to diverse customers in need of LNG solutions. By November 2015, the company had succeeded in two additional LNG efforts: they received a two-year license to import LNG from Canada for the Alaska and Pacific Northwest markets, and they christened their first LNG-ready tanker, the Ohio. Capable of taking on a little over 14 million gallons of gas product, the six-hundred-foot tanker not only conforms to the latest regulatory changes regarding carrying LNG, it is also one of the first Jones Act vessels (built in the United States) built as a kind of hybrid: it can run on traditional fuel with a view to switching engines over to LNG for propulsion. Three more are on order. While Alaskans work out the logistics and funding of pipeline projects, Crowley’s
petroleum distribution group has taken the lead. Its licenses allow the company to import up to 2.12 billion cubic feet of Canadian sourced LNG, providing cost-effective and environmentally friendly energy services for their Alaska customers. The import/export license is the result of several years of effort by Crowley, the National Energy Board of Canada, and the US Department of Energy. Crowley, which has operated in Alaska waters for more than sixty years, envisions a smooth seamless LNG supply chain for their Alaska operations, which includes twenty-two fuel terminals in Western Alaska and the Railbelt. Crowley’s marine solutions group provides engineering and project management services for upstream energy companies drilling for and extracting LNG. Most recently, the team completed the Furie Kitchen Lights project in Cook Inlet, which included a natural gas topside and subsea pipe installation. Crowley’s Seattle-based Jensen Maritime is currently working on designs for the use of LNG in the towing sector, including an LNG-powered icebreaking tug. R Alaskan author J. Pennelope Goforth is home ported in Anchorage.
January 2016 | Alaska Business Monthly
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TRANSPORTATION
PILE DRIVING Underwater Noise Attenuation Port of Anchorage Modernization Project Adds to Body of Knowledge By Tasha Anderson
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he 2015 Alaska Association of Harbormasters and Port Administrators Conference took place in October at the Hotel Captain Cook in Anchorage. One of the presentations on the second day of the conference was about the Port of Anchorage Modernization Project, given by Lon Elledge, Program Manager for the CH2M Project Management Consultant team. The project will include replacing petroleum terminals 1 and 2; replacing cargo terminals 1 and 2; improving the seismic resilience of the port; incorporating more modern technology; and enhancing operational efficiencies. Elledge stated that the estimated cost, “for everything,” is an anticipated $485 million, with a timeline of nine years, five to six of which would be construction. According to the Project’s website, some construction is anticipated in 2016. 78
The AdBm Technologies prototype system in the tank at the University of Texas Applied Research Laboratory in Austin, where the system was designed, built, and initially tested before going to the North Sea for a test in the summer of 2014. Photos by James N. Piper, ARL, University of Texas at Austin
Alaska Business Monthly | January 2016 www.akbizmag.com
Port of Anchorage Modernization The Port of Anchorage’s annual throughput averages 3.2 million to 3.5 million tons. For Southcentral, which holds the majority of Alaska’s population, about 74 percent of incoming freight and upwards of 90 percent of imported refined petroleum is waterborne, Steve Ribuffo, Port of Anchorage director, reported at the conference. The Port of Anchorage is a vital part of the state’s transportation infrastructure, and while the project is expensive, it’s also necessary. “The oldest terminals were built in the 1960s, and the newest container terminal is still forty years old; seismically, they’re not current and suffer from severe corrosion,” Elledge said. “We also want to add backup power for the cranes in case there’s a power outage [so] during that time we can still handle cargo.” Several aspects of the project are being designed specifically with longevity in mind. For instance, the Port’s container clearings currently in use are thirty-eight foot gauge; with the modernization, the Port plans to install “at least fifty-foot gauge cranes, which will give us a container range of fourteen containers across,” Elledge said; however, plans allow for future installation of one-hundredfoot gauge cranes without having to rebuild the wharf. Plans also call for a composite pile design, which have a seventy-five-year life.
One of the earliest aspects of the project is looking at pile driving technology. At the time of the conference, the Port was in the process of receiving permitting for a test pile program. The goal of this program is to gather site-specific data about the effectiveness of underwater noise mitigation methods.
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Keeping Sea Life Safe
Why all the concern about underwater noise? Often when people think of “noise pollution” related to construction, it’s to make sure that human communities and persons aren’t unduly harassed or harmed. However, with pile driving, the concern is the potential that underwater noise has to harm various forms of sea life. NOAA Fisheries has published “Interim Sound Threshold Guidance” for underwater noise creation, excluding tactical sonar and explosives. This guidance is “interim” since NOAA is still developing comprehensive guidance as to appropriate underwater sound levels. For now, there are two levels of underwater acoustic thresholds: Level A, underwater sound levels which may potentially injure an animal, and Level B, which may lead to “behavioral disruption.” For pinnipeds (seals, walruses, sea lions) the current Level A threshold is 190 decibels and for cetaceans (whales, dolphins) the Level A threshold is 180
PHA/LOPA Studies Cybersecurity Gap Assessment Hardware Design & Panel Fabrication Alarm Philosophy & Alarm Management Consultation Fire & Gas Controllers Burner Management System Design
decibels. Level B for both groups is 160 decibels for impulsive noise, such as with impact pile driving, or 120 decibels for non-pulse noise, such as vibratory pile driving or drilling. These are the levels of “harassment permitted under the Marine Mammal Protection Act,” according to the NOAA Fisheries’ website. The noise created by underwater pile driving often exceeds these levels. This means that if sea life is spotted within the construction site area, construction activities may grind to a halt as crews wait for the animals to move away, leading to inflated costs and schedule delays.
Pile Breakthrough
It was timely that, during the same conference, there was a presentation on new pile technology titled “Breakthrough in Mitigating Underwater Noise from Steel Piles” given by two members of Marine Construction Technologies, a public benefit corporation based in Washington state: Julie Hampden, environmental director, and Tim Dardis, a PhD candidate and one of the company’s co-founders. Hampden explained a little of the corporation’s beginning: “The Washington Department of Transportation was coming up against these permitting bottlenecks, time and time again, for any pile driving work that they were doing in the water. It was becoming such a time constraint on many of their projects that they actually issued a competition and requested that engineers somehow figure out how to fix this problem and address the issue of underwater noise… Over the last six years it has been an ongoing effort to try to fix the problem from the ground up.” The breakthrough, Dardis explained, is that current methods of underwater noise attenuation address noise in the water column, but don’t address noise that propagates through seafloor sediment. Even using other methods of mitigation under perfect conditions, Dardis says, “you get significant energy coming from the pile in the sediment… How do we block the sound in the dirt? The solution that we came up with is we need some kind of barrier that covers the entire pile.” Instead of installing equipment around the pile, they created a new type of pile. Two pipes are mounted concentrically, one inside the other, and joined at the pile toe with flexible connections. When driving the pile, only the inner pipe is struck, and the connection at the toe drags down the outer pipe with the inner. Since the outer pipe itself isn’t being struck, the space between the two pipes (approximately two to three inches) and the outer pipe itself disrupt the ability of noise to spread, reducing noise along the entire length of the pile. Dardis emphasized that throughout the development phase they consulted with construction companies, and they focused on ensuring that this new pile could be
Alaska Business Monthly | January 2016 www.akbizmag.com
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Courtesy of AdBm Technologies
AdBm Technologies Resonators production units made of injection molded HDPE plastic. For the Alaska project at the Port of Anchorage, AdBm will be using their green and white models, the yellow one shown is for projects in deeper waters. The parts have a specific gravity of less than one, so in the unexpected event any of them are broken or come loose from the system, the parts will float to the surface.
driven with standard industry equipment. At the time of the conference, the corporation has performed one test, which took place in Puget Sound in October 2014. The first test involved three piles: a steel pile tested with and without a bubble curtain, one double wall pile, and one mandrel driven double wall pile. In the case of the mandrel driven double wall pile, the inner pipe, or mandrel, can be extracted after the driving process and reused as the inner pipe of other piles, reducing costs. The piles were thirtyinch OD pile, eighty feet long. Their goal was to achieve noise reduction of twenty decibels, which they met. Overall the piles saw reduction of twenty-one to twenty-three decibels.
Applications in Anchorage
The Port’s test pile project’s object is to gather data, using underwater microphones, from three different tests, one base-line noise test and two methods of sound mitigation: bubble curtains and a resonator panel system that had recently been deployed in the North Sea. As promising as the double-wall pile technology is, Port Engineer Tod Cowles of the Port of Anchorage says it will not be utilized in the test pile project taking place in March. There are a few reasons, he says, why the double-walled pile won’t be part of the test. “We looked into them, but we don’t believe the double-wall system is constructible due to the diameter and length of the piles required on our project.” Additionally, the doublewall construction of the pile, essentially two pipes in one, increases the costs of the pile. Even considering the mandrel double-wall pile, where the inner pole can be removed and reused, Cowles says the pile doesn’t financially make sense when considering the scope of the Port of Anchorage project. In the test conducted in Puget Sound, the piles were eighty feet; the piles being driven for the Port of Anchorage Modernization project will be two hundred feet long, and excluding the ten 82
pile driven during the pile test, about a thousand pile will need to be driven; extracting an inner pipe from each doesn’t pencil in. At press time, permits for the test had still not be finalized, but they were expected to be granted by the end of 2015, allowing Kiewit Infrastructure West Co., the general contractor for the test, to perform the work in March. Bubble curtains are almost exactly what one would expect them to be. There are various ways to engineer and deploy them, but all use a system whereby air bubbles are created underwater to surround a pile as it is being driven. Because of the difference in density between air and water, the bubble curtain is an effective barrier to sound propagating through water. Cowles says the Port is particularly excited to see results from the resonator panel system: “It looks kind of like a venetian blind,” he says. Essentially, the system is a series of small cavities, or cells, with both rigid and elastic wall members. These cells have a single open end which faces down into the water, so air remains trapped inside. The result of this design is that energy is removed from a passing sound wave, attenuating the acoustic wave. One of the benefits of this design is that it is a rigid structure. Ocean currents can reduce the effectiveness of a bubble curtain, but do not have the same negative impact on a resonator panel system. As the Port project moves forward, it will be invaluable to know which system provides the most effective noise attenuation. Quieter pile driving not only reduces potential harm to sea life, but it reduces the size of the area which must be monitored during construction. A smaller monitored area can mean fewer vessels with fewer marine mammal observers, which can be a huge benefit to project timelines and costs. R Tasha is an Associate Editor at Alaska Business Monthly.
Alaska Business Monthly | January 2016 www.akbizmag.com
Inside
Alaska Business JANUARY 2016
ARCTIC DOMAIN AWARENESS CENTER The Department of Homeland Security launched its Arctic Domain Awareness Center at the University of Alaska Anchorage. The Arctic Domain Awareness Center is led by the University of Alaska Anchorage and resides in its ConocoPhillips Integrated Sciences Building. The center is a new effort that enhances the Department of Homeland Security and US Coast Guard’s capacity to respond to and prepare for emergencies and to better understand the Arctic environment and its challenges. Gathering critical Arctic data—weather, ship traffic, search and rescue capability, and subsistence activity—can be integrated through a system that allows decision makers to anticipate a range of scenarios that they will inevitably face. arcticdomainawarenesscenter.com BRILLIANT MEDIA STRATEGIES Alaska’s oldest advertising firm, Bradley Reid + Associates, is now Brilliant Media Strategies. In July 2008, the firm’s contemporary co-owners Debbie Reinwand and John Tracy purchased the agency from Connie Reid. In addition to rebranding with a new name and logo, the agency has expanded its footprint, now occupying the entire first floor of its home in downtown Anchorage at the corner
of 5th Avenue and I Street. Brilliant opened a branch in Denver, Colorado, earlier this year built upon their success with campaigns for the Denver Post. The first new client under the Brilliant branding umbrella is Alyeska Resort. brilliantak.com ALASKA COACH TOURS Juneau tour company Alaska Coach Tours tested a fully electric powered motorcoach during the Alaska Tourism Industry Association Conference in October. Alaska Coach Tours and battery powered bus manufacturer Build Your Dreams shipped the motorcoach to Juneau to allow tour operators and local transit authorities to inspect the demo motorcoach. Alaska Coach Tours hopes to operate an electric-powered motorcoach with trips to the Mendenhall Glacier in future years. The overall cost of the electric bus compared to a standard coach operating in Southeast Alaska is an additional nearly $500,000. Alaska Coach Tours is working with the Juneau Economic Development Corporation on ways to offset costs for the program. alaskacoachtours.com ALASKA SUPPORT INDUSTRY ALLIANCE The Alaska Support Industry Alliance launched the Alaska Headlamp, an educa-
Compiled by Russ Slaten tion and informational online portal designed to provide real-time news updates, in-depth analysis, and a fresh perspective on the critical issues and events unfolding in Alaska. The site, akheadlamp.com, features a news section that will incorporate Alaskan responses to current events, as well as original editorial content and guest commentary. Alaska Headlamp will put critical context to and provide analysis of the major issues of the day for the alliance’s more than six hundred businesses and individual member base who provide products and services to the oil, gas, and mining industries. alaskaalliance.com NOVACOPPER, INC. Alaska Governor Bill Walker clarified to AIDEA (Alaska Industrial Development and Export Authority) the intent behind Administrative Order 271, the memo that halted all new spending on six mega projects, including the Ambler Road project. After reviewing the project, Walker permitted AIDEA to spend up to $3.6 million, which had already been appropriated, to begin the environmental impact statement process. The Ambler Road project evaluates the potential to build an industrial road into the Ambler mining district in northwest Alaska, which is rich in copper, zinc, lead, and gold resources. NovaCopper has an agreement with NANA Regional Cor-
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 January 2016 | Alaska Business Monthly
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INSIDE ALASKA BUSINESS poration that provides a framework for the exploration and potential development of the Ambler mining district in cooperation with local communities. novacopper.com NORTHRIM BANK Northrim Bank’s newly opened branch, the Ketchikan Financial Center, located at 2491 Tongass Avenue, will provide local, personalized service and financial education for its customers and the community. Northrim’s newest facility is designed with a more efficient footprint featuring personalized service and access to digital banking products. The customer-focused branch has integrated traditional banking services as well as financial education and new technology. northrim.com LOCKHEED MARTIN The Missile Defense Agency, under the US Department of Defense, awarded a team led by Lockheed Martin a contract to develop, build, and test the Long Range Discrimination Radar. The nine-year contract, with options, will have the potential contract value of approximately $784 million. Work on the contract will be primarily performed in New Jersey, Alaska, Alabama, Florida, and New York. Lockheed Martin’s proposed LRDR system will be built on an aggressive timeline ready for operational testing in Clear Air Force Station in central Alaska by 2020. Lockheed Martin has developed a team of corporate partners to meet the challenges of the LRDR program, including ASRC Federal from Barrow and others. lockheedmartin.com COOK INLET REGION, INC. CIRI has become one of the major investors in a large natural gas-fired, combined cycle power plant in Ohio that has been under development for several years and has
now reached financial close. The plant will serve the largest wholesale power market in the world known as the PJM Interconnection encompassing thirteen states in the upper Midwest. Through its wholly-owned subsidiary, CIRI Energy, CIRI joins Capital Dynamics and Guggenheim Partners as an equity sponsor in the Middletown Energy Center. The plant, based in Middletown, Ohio, is expected to cost around $500 million to build, with construction to be completed in 2018. ciri.com ALASKA AEROSPACE CORPORATION Rocket Lab selected Alaska Aerospace Corporation to provide range safety support for their upcoming Electron launches in 2016 at the Pacific Spaceport Complex–Alaska on Kodiak Island. Alaska Aerospace Corporation is partnering with Rocket Lab in the initial operational phase of the Electron rocket and development of an Autonomous Flight Termination System. Alaska Aerospace Corporation will also provide support to Rocket Lab in the development of their Range Safety Data Package and working with the US Federal Aviation Administration, Office of Commercial Space Transportation in securing Rocket Lab’s US Launch Operators License. akaerospace.com USDA-RURAL DEVELOPMENT US Department of Agriculture-Rural Development is awarding a total of $730,021 in grants and a loan guarantee through its Rural Energy for America Program that will help ten rural small businesses and agricultural producers reduce energy usage and costs in their operations. David Sczawinski, doing business as Pristine Products, received a $3,735 grant for a solar project. Haines Brewing Compa-
ny, Inc. received a $4,677 grant for its solar project. The Nome Nugget received $6,696 for energy efficiency upgrades. Alpine Holdings, Inc. received a $8,381 grant for its solar project. Fireweed Mountain Lodge received a $15,406 grant for a solar project. Copper Valley Telephone Cooperative, Inc. received a $44,916 grant for a wind project. The Black Rapids Lodge received a $15,513 grant and $31,127 loan guarantee for its solar project. Tonsina River Lodge received a $49,695 grant for a solar project. Young’s Timber, Inc. received a $49,875 grant for a solid fuel production project. Finally, Upper Tanana Energy LLC received the largest grant at $500,000 for its hydroelectric project. rd.usda.gov/ak ALASKA GOLD COMPANY Alaska Gold Company, a subsidiary of Bering Straits Native Corporation, has completed reclamation activities at the Rock Creek Mine. The majority of the work this past season involved removing water diversion infrastructure and roads, re-contouring the mine site to reestablish natural waterflow and drainage, and reseeding reclaimed areas. While the Rock Creek project was not successful as a producing mine, the reclamation made use of local labor and businesses which provided economic benefit to the region and Bering Straits shareholders. Tumet Industries LLC, a construction firm owned by Kawerak, Inc., was contracted to fulfill the reclamation plan and worked with Alaska Gold Company staff. beringstraits.com ALASKAN BREWING COMPANY The limited edition 2015 vintage of Alaskan Brewing Company’s Alaskan Smoked Porter was released on draft and in twenty-twoounce bottles throughout the seventeen states where Alaskan Brewing beer is sold.
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 | January 2016 www.akbizmag.com
Compiled by Russ Slaten The first release of this now vintage-dated beer was a hearty winter seasonal brewed as a nod to the malting and brewing practices of the turn-of-the-century brewers in Alaska who had to malt their own barley using local alder wood for direct-fired heat. alaskanbeer.com AT&T AT&T redesigned its Wasilla store, located at 1865 E Parks Highway in the Cottonwood Creek Mall, to allow customers to explore and interact with the latest technology. The store is designed with solutions, devices, and accessories displayed across the connected experience, community, and explore zones. The AT&T company store will have a mobile shopping experience with round café-style tables allowing customers to chat with retail consultants. att.com KUAC FM/TV KUAC has made two additions to its weekday news lineup on KUAC 89.9 FM and KUAC HD. The station again began airing Alaska News Nightly at 6 p.m., returning after a four-month hiatus due to budget constraints. KUAC negotiated with Alaska Public Media to bring back Alaska News Nightly through June 30. KUAC hopes to work with the company to negotiate an affordable long-term plan, but noted that the state and university budget are expected to be tight next year as well. KUAC also recently formed a partnership with the Fairbanks Daily News-Miner to provide a five-minute local news segment every weekday. kuac.org ALASKA STRUCTURES, INC. Soldiers from the US Army’s 7th Mission Support Command at Panzer Kaserne in Germany are replacing their DRASH military tents with rapidly deployable tactical com-
mand posts from Alaska Structures, Inc. The star-shaped, six-thousand-square-foot Alaska Structures military shelter platform is modular, highly portable, easily expandable, and can be quickly assembled to provide a brigade-sized tactical operations center with workspace for up to two hundred people. The new tactical command center package includes twin 250 kilowatt-hour generators that supply electricity for lighting, ventilation, and heating and air conditioning modules. The entire system can be assembled and expanded with minimal tool use. alaskastructures.com ALASKA OIL AND GAS CONSERVATION COMMISSION The Alaska Oil and Gas Conservation Commission made the decision on October 15 to allow natural gas to be taken from the North Slope and exported to global markets for the first time. In August 2015, BP and ExxonMobil filed a joint request to increase the amount of gas allowed off of the North Slope from both the Prudhoe Bay and Point Thomson fields. The commission approved the increase to a level that is critical to the success of the Alaska LNG project. It was the first approved increase since the limit was placed on the Prudhoe Bay field in 1977. doa.alaska.gov/ogc CROWLEY MARITIME CORPORATION Crowley Maritime Corporation’s petroleum distribution group was granted approval by the Department of Energy and the National Energy Board–Canada to import Canadiansourced liquefied natural gas (LNG) for supply, transportation, and distribution throughout the Pacific Northwest and Alaska. The renewable, two-year import and export licenses now allow the company to im-
port up to 2.12 billion cubic feet of LNG via truck in 10,700-gallon ISO tanks or in bulk via ocean-going vessels. Transportation of LNG will be managed by Crowley’s logistics experts, coordinating over-the-road transportation and shipping via barge to Alaska. From there, Crowley’s Alaska distribution team will deliver LNG directly to customers’ facilities. crowleyalaska.com ALASKA GASLINE DEVELOPMENT CORPORATION The US Army Corps of Engineers Alaska District accepted and expended funds contributed by the Alaska Gasline Development Corporation to expedite processing of the Alaska Stand Alone Pipeline project Department of the Army permit application. agdc.us PENAIR PenAir welcomed its first of five Saab 2000s, a new aircraft type to its fleet made up of all Saab 340s. The Saab 2000 is a fifty-four-seat aircraft that will be modified for flying in Alaska to forty-five seats. The new aircraft will initially be utilized on daily flights between Anchorage and Dutch Harbor/Unalaska, which PenAir currently operates on behalf of Alaska Airlines through a Capacity Purchase Agreement. The Saab 2000 will fly at speeds of 375 knots/430 mph, taking nearly forty-five minutes less to fly from Anchorage to Dutch Harbor/Unalaska than the Saab 340. PenAir expected the remaining four Saab 2000s to be delivered between early December and mid-May of 2016. penair.com R
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RIGHT MOVES Cardno
Dr. Jack Colonell is retained as Senior Consultant in Cardno’s Anchorage Office. Colonell has nearly four decades’ experience as a consultant, during which time he has provided environmental Colonell and engineering support to virtually every Alaska North Slope hydrocarbon development, as well as to several mining and major infrastructure projects. Colonell holds BS, MS, and PhD degrees in civil engineering and is currently licensed as a Professional Civil Engineer in states of Alaska and Washington. C ardno app oint s L aura Noland as Senior Consultant. Noland has more than twentyfive years of experience as an environmental scientist, principal scientist, and program, business, and district manager Noland in Alaska. She was a program and project manager with the Alaska Department of Environmental Conservation for ten years. Noland holds a BS in Natural Resource Management from the University of Alaska Fairbanks.
SouthEast Alaska Regional Health Consortium
Suzan Hess joins SouthEast Alaska Regional Health Consortium at the Mt. Edgecumbe Hospital on an as-needed basis for speech and language services including help with feeding and swallowing issues, stroke rehabilitation, and Hess other speech and language disorders. Hess and has worked as a speech and language pathologist in the Sitka area since 2000. She earned a BS and MS in Speech and Language Pathology from Fort Hays State University.
YWCA Alaska
Nancy Martinez is the new dedicated staff member for the Alaska Veterans Organization for Women program at YWCA Alaska. She is an Operation Enduring Freedom and Operation Iraqi Martinez
Freedom veteran who served in the US Army. Martinez is a master’s level Clinical Counselor.
STEELFAB
Ron Doshier joins STEELFAB as the Strategic Business Development Manager. He brings almost forty years of experience in the oil and gas sector, specializing in fieldintervention operations for BP Doshier Alaska and Orbis Engineering. Doshier served in the Field, District, and US Operations and Business Development divisions with Baker Hughes previously.
Alaska Army National Guard
Chief Warrant Officer 4 Pamela Vitt was appointed as the Command Chief Warrant Officer for the Alaska Army National Guard, bringing with her vast experience and twenty-five years of military service. Vitt served as Vitt both company and battalion aviation safety officer deployed to Kosovo in 2003 and 2008 supporting peace keeping and peace enforcement missions. Vitt commissioned as a 2nd lieutenant in 1990 after graduating from Colorado State University with a BS in natural resource management.
Birch Horton Bittner & Cherot
Birch Horton Bittner & Cherot welcomed new attorneys to its Anchorage office. Kathryn Davies’s practice primarily focuses on Alaska municipal government. Davies was a trial attorney at the Anchorage District Attorney’s Office and received her JD and Davies master’s in Environmental Law and Policy from Vermont Law School. William Earnhart’s practice will focus on labor and employment law, commercial litigation and appeals, and municipal law. Earnhart has over twenty years Earnhart of trial experience in state and
federal Courts. He received his JD from the University of Washington School of Law. Leila Kimbrell’s practice will focus on municipal governments. Kimbrell was a policy advisor to US Senator Lisa Murkowski and Kimbrell received her JD from Willamette University College of Law.
Alaska Heart & Vascular Institute
Dr. Jonathan R. McDonagh joins the team of cardiovascular physicians at the Alaska Heart & Vascular Institute. He comes to the Alaska Heart & Vascular Institute after completing two fellowships with the University McDonagh of Michigan’s Medical Center. McDonagh received his undergraduate degree in chemistry and biochemistry from Middlebury College, earned his Doctor of Medicine from the University of Vermont College of Medicine, and completed his residency at the University of Washington.
AECOM
Delta Fettes joined AECOM’s Anchorage office as a Project Management Specialist to support financial and contractual project requirements. She has sixteen years of experience in project Fettes accounting and coordination. Fettes previously performed project accounting and coordination for an Alaska Native corporation.
Denali Media Holdings
John Tracy joins KTVA 11 News to produce a weekly segment, “Reality Check with John Tracy,” airing on KTVA’s Sunday night newscast. Tracy was a multi-Emmy award-winning journalist during Tracy his twenty-three-year tenure at KTUU. His documentary on the Exxon Valdez oil spill won the first of several national Edward R. Murrow Awards for the station. He left KTUU in 2008 to become co-owner of Brilliant Media Strategies.
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Compiled by Russ Slaten Alaska Permanent Fund Corporation
Angela Rodell was selected by the Alaska Permanent Fund Board of Trustees as the new Executive Director of the Alaska Permanent Fund Corporation. She brings Rodell vast experience in finance and knowledge of Alaska. Rodell is the first female in the corporation’s history to be appointed to the position of Executive Director.
Healing Hand Foundation
Kristin McTague joins the Healing Hand Foundation as its new Executive Director. She will work closely with the foundation’s board of directors to increase Alaskan Natives’ access to unfunded healthcare services McTague in Southeast Alaska.
Alaskan Dream Cruises
Michelle Glass joins Alaskan Dream Cruises as its new Vice President of Sales. She brings with her twenty-four years of Alaska tourism industry experience, including several years spent as the executive director Glass of the Haines Convention & Visitor’s Bureau and the Kenai Convention & Visitor’s Bureau. Glass was the senior Alaska sales account manager at Entrée Alaska. She earned a BA in geography and secondary education from Western Washington University.
Municipal Light & Power
Mollie Morrison was appointed as the new CFO of Municipal Light & Power, replacing former ML&P CFO Mark A. Johnston, who was appointed general manager. Morrison has twelve years of experience in finance and Morrison accounting positions. She was the senior manager at BDO USA LLP and worked as an auditor at Mikunda, Cottrell & Co. Morrison earned
a BBA from the University of Alaska Anchorage and has been a CPA in Alaska since 2006.
KPMG LLP
Daniel Mitchell was promoted to Managing Director of the KPMG LLP Anchorage office. Mitchell specializes in providing audit and accounting services to Alaska Native Corporations and financial institutions. He Mitchell graduated from the University of Alaska Anchorage and leads KPMG’s Anchorage office recruiting efforts and works extensively with the University of Alaska’s Schools of Business and Management and career offices.
Northrim BanCorp, Inc.
Marc Langland retired from the Board of Directors of both Northrim BanCorp, Inc. and Northrim Bank. Joe Beedle, President, CEO, and a director, will assume the duties of Chairman of the Board for both Langland the BanCorp and Northrim Bank. Joe Schierhorn, Chief Operating Officer and Northrim Bank’s President, will be appointed to fill Langland’s seat on both the BanCorp and Northrim Bank’s boards and will become the CEO of Northrim Bank. Beedle After starting in banking in Iowa and Colorado, Langland began his Alaska banking career in 1965 in Anchorage. In 1977 he became president and CEO of First National Bank of Fairbanks. In 1985 he served as chairman and CEO of KeyBank of Alaska, Schierhorn and co-founded Northrim Bank in 1990. Langland has served in a number of leadership roles and board positions in business, community, and statewide organizations.
PND Engineers, Inc.
Wade Lundberg, PE, was selected to be a principal of PND Engineers, Inc. He has fifteen years of pro-
fessional engineering experience, joining PND’s Anchorage office in 2000 and transitioning to its Seattle office. Lundberg has been involved in multiple infrastructure projects in both Alaska and the Lower 48 for resource devel- Lundberg opment and aviation facilities, with particular expertise in design of facilities on permafrost in Arctic Alaska.
Petroleum Club of Anchorage
Petroleum Club of Anchorage elected a slate of new officers at its annual meeting. Joe Mathis wit h NANA became the Board President for 2015-2016. Michael Faust with ConocoPhillips Alaska was elected as Vice President; Jeremy Albright with Welltec was elected as Treasurer; and Deidre Gross of Mathis Global Marine became Secretary. The membership elected six directors to the board. For two year terms: Paul Mazzolini of Hilcorp, Eric Wieman of Peak Oilfield Service Co., and Lennie Dees of the Alaska Department of Revenue. One year terms Faust were given to Eileen Simmons of Arctic Catering, Tom Hendrix of Carlile, and Tom Redmond of SolstenXP.
Michael Baker International
Michael Baker International added key experts to its Anchorage office. Sue Ban joined the firm as an Environmental Manager. She was a third party environmental impact statement contractor for oil and gas development and pipeline projects. Ban earned a BS in Biology from Pennsylvania State University and an MS in Oceanography from the Florida Institute of Technology. Brianna Hammes joined the firm as a Technical Writer. She was a technical writer/editor and project coordinator at NANA WorleyParsons. Hammes earned a BS in Journalism from the University of Alaska Anchorage. R
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OCEANS BOUNTY
EAT
by Tasha Anderson
SHOP
PLAY
STAY
sushi
© Lilcrazyfuzzy | Dreamstime.com
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any of us think that the term “sushi” and raw fish are synonymous, and many sushi dishes do include a fish component; however, in order for a dish to be considered sushi it must contain cooked “vinegared” rice, which is the one ingredient all sushi dishes have in common. Outside of rice, sushi often contains raw or cooked fish, other seafood, nori (toasted seaweed), vegetables, and tropical fruits or other proteins.
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A raw fish preparation that does not contain rice is called sashimi. Fortunately for those living in or visiting Alaska, the state is known for its seafood industry, specifically the quality of Alaska’s wild salmon. Alaska is home to many Japanese restaurants and sushi bars, most of which serve a combination of sushi, sashimi, and other traditional Japanese foods and have immediate, daily access to some of the world’s most sought after fish. R
Alaska Business Monthly | January 2016 www.akbizmag.com
SUPPORTING OUR LOCAL ECONOMY
EAT
SHOP
By Tasha Anderson
PLAY
STAY
Shop till you drop
B
uy Alaska, a collaborative program between the University of Alaska and the Alaska Small Business Development Center, encourages everyone, when shopping for goods or services, to look to businesses in Alaska first. A business physically located in Alaska, even if it is part of a national chain or franchise, contributes to building Alaska jobs and the Alaska economy.
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Alaska Business Monthly | January 2016 www.akbizmag.com
SHOP
PLAY
By Tasha Anderson
© K ar amor a
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am | D re
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SNOWSPORTS
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om
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hile the amount of snow around Alaska varies—from an average annual snowfall of 74.5 inches in Anchorage to 326.3 in Valdez—there are opportunities for snow sports statewide, ranging from crosscountry skiing on groomed trails to heli-skiing or heli-snowboarding on pristine, untouched, remote slopes. Snowboarder carving turns in powder snow on an isolated peak in the Chugach Mountains near Valdez, the hub for heli-snowboarding and heli-skiing in Alaska.
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THE GOLDEN HEART CITY
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By Tasha Anderson
Fairbanks Š Gary Schultz / AlaskaStock.com
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airbanks is an excellent Alaska winter destination: visitors have access to dog mushing tours, outdoor winter sports, flightseeing, and Alaska Native arts, history, and culture.
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Fairbanks is a particularly fantastic destination for those looking to view the Aurora Borealis, with many hotels offering Northern Lights wake-up calls.
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Anchorage JAN
11
ASO Stained Glass Concert
Presented by the Anchorage Symphony Orchestra, this is an evening of chamber music featuring a piano, harp, and voice trio. First Covenant Church, 7:30 p.m. anchoragesymphony.org JAN-FEB
14-7
Happy Birthday, Wanda June
Kurt Vonnegut’s only play, written in the 1970s, is hilarious, surreal, and thought-provoking. Cyrano’s, Thursdays and Fridays 7 p.m.; Saturday 3 p.m. cyranos.org JAN
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PLAY
SHOP
Anchorage Wedding Fair
gala event includes a four-course meal, a carafe of scotch at each table, Highland Pipers, and dancing. Sheraton Anchorage, 6:55 p.m. tarbas.org
JAN
JAN
JAN
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Fairbanks
Haggis Basher’s Ball and Burns Supper
This supper is in honor of Scottish poet Robert Burns. The
Anchorage
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The festival features more than two hundred beers and barley wines from more than fifty regional brewers. Admission ticket includes a six-ounce commemorative testing cup, thirty samples, an ID band, and an official program. Egan Center, 6 p.m. to 10 p.m. auroraproductions.net www.akbizmag.com
WorldQuest 2016
WorldQuest is the largest fundraiser for the Juneau World Affairs Council. The event includes an international trivia contest, an international buffet with no-host bar, a silent auction of goods and experiences, and a silent dessert auction. Centennial Hall, 6 p.m. jwac.org/worldquest2016.html
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JAN JAN
C Note Poker Tournament
30 Players get their names entered into the prize drawing pot with their initial buy in and with each “double your chips” or regular buy back in. Play and prizes continue throughout the evening. Final table players will be eligible for Alaska Airlines travel vouchers and more. Proceeds support the Fairbanks Symphony Orchestra. Pikes Waterfront Lodge. fairbankssymphony.org
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Great Alaska Beer & Barley Wine Festival
race from the US/Canadian border to Dezadeash Lake and back on the Haines Highway; it includes the Calcutta Auction at Fogcutter Bar and an awards banquet at the American Legion Hall. 10 a.m. alcan200.org
JAN
JAN
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JAN
30
Winter Animal Track Walk
Enjoy a guided walk on the refuge trail at Creamer’s Field to find tracks and learn about Interior Alaska’s winter animals. Creamer’s Field, 1 p.m. creamersfield.org
Haines JAN
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Wildlife Wednesdays: Sitka Black-Tailed Deer
Karin McCoy, Alaska Department of Fish and Game wildlife biologist, will talk about Sitka black-tailed deer. Thunder Mountain High School, 7 p.m. to 8 p.m. adfg.alaska.gov JAN
Platypus-Con
The Juneau community comes together to play new and old board and card games. Demonstrations, organized games, miniature painting, and a huge lending library for open tables will be provided. Juneau Arts and Culture Center, Friday 6 p.m.; Saturday and Sunday 10 a.m. platypusgaming.org
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Wasilla JAN
In Football We Trust
This is an insightful and moving documentary feature film exploring in rich detail the remarkable story behind the Polynesian Pipeline to the NFL. With unprecedented access and shot over a four-year time period, the film intimately portrays four young Polynesian men striving to overcome gang violence and near poverty through the promise of American football. Free admission. Glenn Massay Theater, 7 p.m. glennmassaytheater.com
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JAN
The Hallelujah Girls
Hilarity abounds when the feisty females of Eden Falls, Georgia, decide to shake up their lives. The action in this rollicking comedy takes place in SPA-DEE-DAH!, the abandoned church-turned-day-spa where this group of friends gathers every Friday afternoon. After the loss of a dear friend, the women realize time is precious, and if they’re going to change their lives and achieve their dreams, they have to get on it now. Machetanz Theater, Fridays and Saturdays 7 p.m.; Sundays 2 p.m. valleyperformingarts.org R
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University of Alaska Museum of the North Open House
This is a free, behind-the-scenes look at the labs where discoveries are made in the science, culture, health, and environment of Alaska. Museum of the North, Noon. uaf.edu/museum
Seward Polar Bear Jump
Individuals and teams dress in wacky costumes and then jump into Resurrection Bay. Jumpers are required to find sponsors, raising money for the Alaska Division of the American Cancer Society. Seward Small Boat Harbor, 12:30 p.m. seward.com
Juneau
Anchorage Folk Festival
Performers fill stages at several locations in the city, including the main stage at Wendy Williamson Auditorium on the University of Alaska Anchorage campus. The festival includes shows, contests, classes, dances, educational workshops, and open jams. anchoragefolkfestival.org
JAN
Clue: The Musical
Based on the board game Clue, the plot of this play concerns a murder at a mansion, occupied by several suspects, that is solved by a detective; the ending is determined by cards drawn by audience members that select the murderer, murder weapon, and location of the murder. Salisbury Theater, Fridays and Saturdays 7 p.m.; Sundays 4 p.m. flot.org
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STAY Seward
Fairbanks
This fair is a one-stop solution for wedding arrangements, including gown collections, catering samples, information on venues, music, cosmetics, flowers, and more. Dena’ina Center, 11:30 a.m. to 5 p.m. alaskabride.com
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Compiled by Tasha Anderson
Fairbanks JAN
22
Souper Soup Off for Stone Soup Café
This is an opportunity to taste soups from twenty of Fairbanks’ finest dining establishments, wines from K & L Distributors, beers from HooDoo Brewery, and coffee from Diving Duck Coffee. Additionally there’s a live outcry auction, a silent auction, and a desert auction, as well as a chance to win two Alaska Airlines tickets. Westmark Hotel and Conference Center, 6 p.m. stonesoupcafe.org
Alcan 200
The Alcan 200 is an International snow machine January 2016 | Alaska Business Monthly
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EVENTS CALENDAR JANUARY 2016
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ACCOLADES
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elcome to Accolades, Alaska Business Monthly’s newest monthly fixture where readers can see who’s been honored, awarded, and recognized.
At its 6th annual awards celebration, Anchorage’s Alaska Bed & Breakfast Association member B&B owners recognized local businesses for helping make tourists’ trips memorable by presenting the following awards: Best Alaska Experience: Alaska Native Heritage Center; Best Tour Experience: Phillips Cruises and Tours, Kenai Fjords Tours, Talkeetna Air Taxi, and Salmon Berry Tours; Best Dining Experience: Glacier Brewhouse, Haute Quarter Grill, and Orso Restaurant; Best Customer Service: Anchorage City Trolley Tours, Alaska Wildlife Conservation Center, Major Marine Tours, Phillips Cruises and Tours; Innovative Approach to Making Guests Feel Special: Kenai Fjord Tours, Orso Restaurant; Best Business to Business Service in Support of Tourism: The Alaska App, Sam Wasson Photography; Rookie of the Year, New Member: South Restaurant & Coffeehouse; and Advocacy for Bed & Breakfasts in Tourism: Visit Anchorage. alaskabba.com
2 diabetes. The Foundation also awarded $5,000 to Camp Fire of Alaska to help support their Youth Development Programs, which serve more than five thousand youth annually. alaskausafoundation.org A team of Stantec’s Anchorage architects, engineers, and design industry professionals pitched in to help improve safety at the Hampstead Heath affordable housing complex. Teaming with NeighborWorks Alaska, thirty Stantec employees helped prepare the grounds for winter. Hampstead Heath is home to nearly 90 families, including more than 150 children. stantec.com | nwalaska.org In a demonstration of its continued investment in the knowledge and skill of its bankers, First National Bank Alaska announced vice presidents Luke Fanning and Stacy Tomuro as two of the mostrecent graduates of the Pacific Coast Banking School. Fanning is based in Juneau as First National’s Southeast Regional Manager. Tomuro works at Anchorage’s Dimond Branch. He’s a team leader in the bank’s Corporate Lending Division. fnbalaska.com
Kiera O’Brien of Ketchikan was awarded a $3,000 college scholarship at the 2015 National Foundation for Women Legislators Annual Conference. O’Brien was selected as one of six national winners of the 18th Annual Bill of Rights Essay Scholarship Contest. womenlegislators.org
As part of the five-year anniversary of the Summer of Heroes program, which supports programs that help Alaska youth reach their full potential, Alaska Communications donated $15,000 to Boys & Girls Clubs–Alaska during the organization’s 33rd Annual Auction Gala. alaskacommunications.com
Kirsten and Mandy Dixon, the mother-daughter chef duo from Within The Wild Alaskan Adventure Lodges, represented Alaska and the United States at the USA Pavilion at Expo Milan 2015 at the World’s Fair in Milan, Italy. The Dixons created a five-course prix-fixe dinner, showcasing Alaska seafood and Alaska grown ingredients. They conceptualized a menu to feature the five regions of Alaska by using foods representative of each area. withinthewild.com
The W3 Awards, an international competition for online creative and marketing, awarded Gere Donovan Creative two Silver W3 awards for their design of the Anchorage Concert Association and Alaska Physical Therapy Specialists websites. Both websites also received Aurora Awards for Best Website Design by the Alaska Chapter of PRSA. geredonovan.com
The Anchorage Chamber of Commerce celebrated the accomplishments of local businesses, individuals, and organizations at its 58th annual Gold Pan Awards gala and announced the following winners: Distinguished Community Service by an Individual, Organization, or Small Business—Ryan Cropper (Able Body Shop); Distinguished Community Service by a Large Business or Organization—CRW Engineering; Business Excellence—DOWL; Entrepreneurial Excellence—Katie Inman (Anchorage Yoga); and Volunteer of the Year—Lennel White. anchoragechamber.org Walsh Sheppard and the Alaska Department of Natural Resources Office of Boating Safety were named a two-time Bronze winner in the 36th Annual Telly Awards for two television public service announcements: “Pledge to Live” and “Hypothermia.” Both spots were developed and directed by Walsh Sheppard with the help of the Alaska Channel, photographer Judy Patrick, and various volunteers. walshsheppard.com | alaskaboatingsafety.org The Alaska USA Foundation donated $7,500 to the American Diabetes Association of Alaska. The donation will help to expand services to children in Alaska living with Type 1 and Type
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Compiled by Tasha Anderson
Effective January 1, Anchorage joins an elite group of fire districts throughout the United States by having earned an ISO Class 1 rating, the highest rating in the Insurance Service Organization’s Public Protection Classification, after an exhaustive analysis of Anchorage’s fire suppression capabilities. ISO rates approximately 48,000 cities and communities nationwide and of those, only 132 were ranked as Class 1. muni.org Bear Valley Elementary was recognized as a 2015 National Blue Ribbon School by US Secretary of Education Arne Duncan at a November ceremony in Washington, DC. It is among 335 schools selected last year based on overall academic excellence or progress in closing achievement gaps among student subgroups. asdk12.org/schools/bearvalley/pages/Bear_Valley_Website/Welcome.html Visit Anchorage was awarded the 2015 Gold Service Award by Meetings & Conventions magazine subscribers for excelling in professionalism and dedication in service to meeting planner professionals. This is the 22nd time that Visit Anchorage has won the award. Winners were featured in Meetings & Conventions’ Gold Awards issue published in November. anchorage.net R
Alaska Business Monthly | January 2016 www.akbizmag.com
ALASKA TRENDS
By Iuliia Chepurko
Local Education Employment Varies Depends on population density in different regions
O
ne aspect of government that impacts the bottom line is education provided locally in communities across Alaska, because the state provides a large portion of funding to school districts. In general, local government is one of the largest employers in Alaska, and in many communities a significant portion of this sector is composed of persons employed in local education. However, the number of education employees per student varies significantly depending on the region. We analyzed statewide data on the local education portion of local government employment using US Census Data available through IMPLAN software. We calculated the number of local government education employees per school age person (5 to 19 years old) for each region and compared those numbers to the statewide average of 0.2 education employees per school age person. According to this
analysis, the Northern (0.33) and Southwest (0.32) regions have more employees per student than anywhere else in the state; Anchorage (0.04) and Mat-Su (0.9) have the least. One of the reasons Anchorage and the Mat-Su have lower ratios of education employees to school age youth is because of larger classroom sizes and the shared overhead of a large district supporting many schools. For example, according to data from the Alaska Department of Education and Early Development “School Enrollment by Grade as of October 1, 2014, FY2015,” in Anchorage and Mat-Su the average number of students per school is about 463 (PreK-12 only is taken into account), while in Northern Southwest regions there are 152 and 112 students per school respectively. Statewide there are 18,729 employed in local government education and 153,424 school age persons, according to the Alaska Department of
Labor and Workforce Development. While there are more education employees per student than the statewide average in the Northern and Southwest regions, the populations in these communities, outside of the hubs with a few thousand people, generally number in the hundreds. The higher ratio of education employees per student is because it would be impractical for fewer staff to guide children of all ages through the broad variety of coursework that needs to be learned during K-12 studies as well as provide administrative and operational support to the individual schools and districts in the regions. 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
By Iuliia Chepurko
Units
GENERAL Per Capita Personal Income—Alaska US $ Per Capita Personal Income—United States US $ Consumer Prices—Anchorage 1982-1984 = 100 Consumer Prices—United States 1982-1984 = 100 Bankruptcies Alaska Total Number Filed Anchorage Total Number Filed Fairbanks Total Number Filed
Period
Latest Report Period
Previous Report Period (revised)
Year Ago Period
Year Over Year Change
2ndQ15 2ndQ15 1stH15 1stH15
56,155.0 47,369.0 217.1 236.3
56,905.0 47,005.0 217.1 236.3
53,926.0 45,844.0 214.8 236.4
4.1% 3.3% 1.1% -0.0%
October October October
69.0 64.0 4.0
46.0 38.0 5.0
35.0 26.0 7.0
97.1% 146.2% -42.9%
EMPLOYMENT Labor Force—Alaska 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 Healthcare Leisure & Hospitality Accommodation Food Svcs & Drinking Places Other Services Government Federal Government State Government State Education Local Government Local Education Tribal Government
Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands Thousands
October October October October October October October October October October October
360.7 338.8 192.8 152.1 49.9 44.3 33.4 15.9 10.1 35.9 16.8
368.5 342.1 190.0 149.9 50.6 44.5 36.8 16.7 10.2 37.3 17.2
363.9 341.4 192.7 151.9 50.4 44.7 34.0 16.0 10.8 36.4 17.2
-0.9% -0.8% 0.1% 0.1% -1.1% -0.9% -1.7% -0.8% -6.8% -1.4% -2.4%
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
October October October October October October October October October October October October October October October October October October October October October October October October October October October October October October October October October
333.3 46.5 17.4 17.1 14.4 18.9 10.2 6.3 286.8 67.0 6.6 38.1 6.3 10.3 22.3 5.9 6.3 4.5 12.1 29.0 47.5 33.8 30.8 8.1 18.3 12.2 81.9 14.3 25.5 8.1 42.1 23.6 3.7
349.4 54.4 18.0 17.7 14.9 21.4 15.0 11.2 295.0 68.9 6.5 38.6 6.3 10.2 23.8 6.3 6.2 4.3 12.2 29.4 47.2 33.8 37.1 10.7 21.0 12.0 82.0 15.4 25.6 7.8 41.0 22.6 3.9
331.0 46.7 18.0 17.8 14.9 18.3 10.4 6.3 284.3 64.0 6.4 36.9 6.0 10.1 20.7 5.8 6.2 4.2 12.1 29.3 46.3 33.4 31.4 8.0 19.1 11.8 83.2 14.5 26.9 8.6 41.8 23.6 3.7
0.7% -0.4% -3.3% -3.9% -3.4% 3.3% -1.9% 0.0% 0.9% 4.7% 3.1% 3.3% 5.0% 2.0% 7.7% 1.7% 1.6% 7.1% 0.0% -1.0% 2.6% 1.2% -1.9% 1.2% -4.2% 3.4% -1.6% -1.4% -5.2% -5.8% 0.7% 0.0% 0.0%
UNEMPLOYMENT RATE Alaska United States
Percent Percent
October October
6.4 5.0
6.4 5.1
6.7 5.7
-4.5% -12.3%
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Alaska Business Monthly | January 2016 www.akbizmag.com
ALASKA TRENDS
By Iuliia Chepurko Latest Report Period
Previous Report Period (revised)
Year Ago Period
Year Over Year Change
Units
Period
ALASKA PERMANENT FUND Equity Assets Net Income Net Income—Year to Date Marketable Debt Securities Real Estate Investments Preferred and Common Stock
Millions of $ Millions of $ Millions of $ Millions of $ Millions of $ Millions of $ Millions of $
September September September September September September September
50,546.2 51,373.9 95.7 -600.2 2.7 -671.3 -758.4
51,128.1 52,303.8 161.4 -1,791.1 -70.1 -46.5 -1,487.4
51,110.5 51,824.3 167.6 332.7 74.8 102.4 135.4
-1.1% -0.9% -42.9% -280.4% -96.4% -755.6% -660.1%
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 $
2ndQ15 2ndQ15 2ndQ15 2ndQ15 2ndQ15 2ndQ15 2ndQ15 2ndQ15 2ndQ15
5,913.9 222.6 151.3 2,866.2 20.0 5,109.6 4,334.4 1,779.2 2,555.2
5,913.9 222.6 151.3 2,866.2 20.0 5,109.6 4,334.4 1,779.2 2,555.2
5,589.8 309.8 145.3 2,703.5 18.7 4,814.6 4,188.5 1,702.7 2,485.9
5.8% -28.2% 4.1% 6.0% 6.5% 6.1% 3.5% 4.5% 2.8%
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
October October October October October
120.1 1.3 0.7 0.9 6.4
123.3 1.3 0.6 0.9 6.3
108.0 1.1 0.6 0.8 6.1
11.2% 17.1% 4.9% 12.8% 3.4%
Millions of Barrels Billions of Cubic Ft. $ per Barrel
September September September
14.2 8.3 48.8
12.6 8.3 48.3
14.3 8.9 96.1
-1.1% -6.9% -49.2%
Active Rigs Active Rigs $ Per Troy Oz. $ Per Troy Oz. $ Per tonn
October October October October October
12.0 791.0 1,158.2 15.7 1,727.7
12.0 883.0 1,117.5 14.9 1,809.3
8.0 1,925.0 1,223.0 17.2 2,330.0
50.0% -58.9% -5.3% -8.6% -25.8%
Millions of $ Millions of $ Millions of $ Millions of $
2ndQ15 2ndQ15 2ndQ15 2ndQ15
36.6 17.2 18.8 0.6
53.2 15.7 36.6 0.9
37.6 16.2 20.6 0.8
-2.7% 5.8% -8.9%
Dollars Dollars Dollars
2ndQ15 2ndQ15 2ndQ15
287,989.0 184,829.0 481,798.0
281,494.0 180,214.0 442,343.0
279,020.0 188,530.0 424,776.0
3.2% -2.0% 13.4%
Units Units Units
2ndQ15 2ndQ15 2ndQ15
228.0 67.0 120.0
105.0 1.0 192.0
232.0 87.0 274.0
-1.7% -23.0% -56.2%
Thousands Thousands
October October
389.7 78.4
451.6 90.8
382.3 76.1
1.9% 3.1%
Indicator
PETROLEUM/MINING Crude Oil Production—Alaska Natural Gas Field Production—Alaska ANS West Coast Average Spot Price Hughes Rig Count Alaska United States Gold Prices Silver Prices Zinc Prices REAL ESTATE Anchorage Building Permit Valuations Total Residential Commercial Government Average Loan in Housing Market Statewide Single-Family Condominium Multi-Family New Housing Built Statewide Single-Family Mobile Home Multi-Family VISITOR INDUSTRY Total Air Passenger Traffic—Anchorage Total Air Passenger Traffic—Fairbanks
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 on housing is retrieved from Alaska Housing Finance Corporation website.
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January 2016 | Alaska Business Monthly
97
ADVERTISERS INDEX AE Solutions Alaska LLC...............................80 Alaska Process Industry Career Consortium.................................... 44 Alaska Forum....................................................26 Alaska Rubber.................................................. 57 Alaska Traffic Company................................. 77 Alaska USA Federal Credit Union................15 Alaska USA Insurance Brokers.....................45 American Fast Freight.................................... 79 American Marine / Penco.............................95 Anchorage Opera............................................ 91 Arctic Office Products...................................29 Avis Rent-A-Car............................................... 91 Birch Horton Bittner & Cherot....................23 Bristol Bay Native Corp................................. 37 C & R Pipe and Steel Inc................................ 53 California Coast University.......................... 30 Calista Corp...................................................... 21 Carlile Transportation Systems....................99
Ch2m.................................................................. 75 Construction Machinery Industrial...............2 Cruz Construction Inc....................................69 Diamond Airport Parking..............................26 Donlin Gold...................................................... 30 Dowland-Bach Corp.......................................46 Doyon Limited.....................................................3 EDC Inc..............................................................56 Environmental Management Inc..................58 First National Bank Alaska...............................5 GCI............................................................73, 100 Judy Patrick Photography.............................98 Junior Achievement of Alaska..................... 48 Lynden Inc..........................................................71 Matson Inc.........................................................17 Medical Park Family Care Inc....................... 14 N C Machinery................................................. 59 Nalco Energy Services................................... 73 NCB..................................................................... 16
Northern Air Cargo................................. 86, 87 Pacific Pile & Marine........................ 83, 84, 85 Parker Smith & Feek........................................13 PenAir................................................................. 77 Personnel Plus..................................................92 Ravn Alaska....................................................... 19 Span Alaska Transportation Inc...................81 Stellar Designs Inc..........................................90 T. Rowe Price.................................................... 39 The Medallion Foundation Inc..................... 53 The Odom Corp...............................................43 TOTE Maritime Alaska....................................11 UA Local 367 Plumbers & Steamfitters.....62 UIC Oil & Gas Services.................................. 74 United Way of Alaska.....................................47 Usibelli Coal Mine............................................23 Washington Crane & Hoist...........................25 Waste Management....................................... 70 Watterson Construction................................ 55
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Alaska Business Monthly | January 2016 www.akbizmag.com
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