Alaska Business Monthly-October 2014 by Alaska Business

TOP 49 ALASKA COMPANIES BASED ON GROSS REVENUE

October 2014

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October 2014 TAB LE

CONTENTS ABOUT THE COVER

DEPARTMENTS

Hashtag Top49ers (#Top49ers) Going Viral graces our cover this month, along with the Big Dipper and North Star from the Alaska flag, to embolden the impact social media has in conveying ideas and news. This year’s Top 49 Alaskan-owned companies generated more than $16.08 billion in gross revenue—certainly deserving of gold stars for the contributions made to the Alaska economy as well as to business and industry in the national and international arena. The special section begins on page 49.

From the Editor . . . . . . . . . . . . . . . . . 7 Right Moves . . . . . . . . . . . . . . . . . 182 Inside Alaska Business . . . . . . . . . . 184 Agenda . . . . . . . . . . . . . . . . . . . . . 187 Alaska This Month . . . . . . . . . . . . . 188 Events Calendar . . . . . . . . . . . . . . . 194 Marketsquares . . . . . . . . . . . . . . . 197 Alaska Trends . . . . . . . . . . . . . . . . 198 Ad Index . . . . . . . . . . . . . . . . . . . . 202

Cover design by David Geiger, Art Director

ARTICLES

Arctic Ideas

Energy

16 | Kotzebue Microgrid Local alternatives paying off By Julie Stricker

Financial Services 22 | Creative Options Financing startups in Alaska By Tracy Barbour

Entrepreneurs

26 | 49th State Angel Fund Connecting ideas and investment By Tasha Anderson

30 | Future Top 49ers at Lemonade Day Alaska Kids have fun while facing complex challenges of business ownership By Nolan Klouda, Kathryn Abbott, and Samuel Callen

Photo by Tasha Anderson

8 | Pull Up A Chair Alaskans now sit at the table within the Arctic Council By Tom Anderson

A field of crops at the VanderWeele Farm in the Mat-Su Valley.

32 | Franchising the Future Where Baby Boomers retire and Millennials launch careers By Terry Powell

Education

34 | Introduction to Alaska Native Business First class of new UAA minor offers unique training By Tasha Anderson

116

Agriculture

36 | Thriving, Varied, Mat-Su Farms Valley farmers feed Alaskans locally By Tasha Anderson

Energy & Construction

42 | Indigenous Building Techniques Cold Climate Housing Research Center goals—efficiency and sustainability By Will Swagel

Construction

116 | Bridge Building, Road Building Civil construction contractors stay busy By Margaret Sharpe 122 | Hangar Foam Drop Photo essay by Julie Stricker

Environmental Services 126 | Water & Wastewater: Seward By Rindi White

Photo by Judy Patrick

The Tanana Crossing at Salcha. 4

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October 2014 TAB LE

CONTENTS

special section Top 49ers

54 | 2014 Top 49ers 94 | Top 49ers by Industry Classification 96 | Top 49ers 5 Year Rank & Revenue

Featured 49ers

Cruz Construction employees secure a load for transport to Umiat across the company’s one hundred mile snow trail.

49 | Executive Summary By Tasha Anderson 52 | Top 49ers Gross Revenues & Alaska Jobs

106 | Sitnasuak Native Corporation Unprecedented growth for Nome village corporation By Nichelle Seely 112 | Aleut Corporation Navigating international commerce By Russ Slaten

Photo courtesy of The Aleut Corporation

Photo by Stephen Nowers/ Courtesy of Cruz Construction

98 | Cruz Construction Specialized skills, international scope By Julie Stricker

112

Aleut Corporation subsidiary worker applying fertilizer and weed and pest control to managed grounds.

ARTICLES

Legal Speak

130 | 2014 Employment Law Update for Federal Contractors By Renea I. Saade

Health & Medicine

131 | How Will the Legalization of Marijuana Affect Employers? By Vance O. Knapp 136 | Taking Steps in Advance of Marijuana Initiative Alaska companies advised to review drug and alcohol policies By Vanessa Orr

Telecom & Technology 138 | Cyber Security Critical issue impacts business By Tracy Barbour

Transportation

142 | More Western Alaska Ports Needed Cape Blossom and Port Clarence frontrunners for Arctic development By Julie Stricker

146 | Roads for Business and Industry Driving the intermodal transportation system By Lisa Maloney

Oil & Gas

150 | Alaska’s Exploration Licensing System An alternative to traditional leasing By Mike Bradner 156 | Arctic Iñupiat Offshore and Shell’s Historic Venture ASRC, North Slope Village Corporations, and Shell sign agreement 160 | LNG on a Small Scale Getting less expensive energy than oil and diesel By Mike Bradner

Alaska Native Corporations 172 | ANCSA Perspective From Alaska Native Corporation Leaders Maver Carey, Sophie Minich, Gail Schubert, and Sheri Buretta By Julie Stricker 176 | Marie Greene—NANA ‘Speaking with one voice’ By Julie Stricker

Arctic Ideas

178 | Providing Support for US Military Arctic Operations Critical infrastructure already in place at Deadhorse Aviation Center By Lori Davey

Community

196 | Anchorage Park Fix-It Brings Neighbors Together Source: Anchorage Park Foundation

166 | Ballot Proposition 1 Fails Alaskans will watch for more barrels from SB21 By Mike Bradner

Alaska Business Monthly | October 2014 www.akbizmag.com

FROM THE EDITOR Follow us on and

Volume 30, Number 10 Published by Alaska Business Publishing Co. Anchorage, Alaska Jim Martin, Publisher 1989~2014

EDITORIAL STAFF

Managing Editor Associate Editor Editorial Assistant Art Director Art Production Photo Consultant Photo Contributor

Susan Harrington Russ Slaten Tasha Anderson David Geiger Linda Shogren Chris Arend Judy Patrick

BUSINESS STAFF

President Billie Martin General Mgr. Jason Martin VP Sales & Mktg. Charles Bell Senior Account Mgr. Anne Campbell Account Mgr. Bill Morris Survey Administrator Tasha Anderson Accountant & Melinda Schwab Circulation 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 Advertising email: materials@akbizmag.com Pacific Northwest Advertising Sales 1-800-770-4373 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, ©2014, 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/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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e wondered what it would be like to go viral with Alaska Business Monthly’s Top 49ers, this year. We don’t want to crash our cloud; however, we would like a gazillion hits on our website. We want people to find out about this year’s Top 49ers and we wouldn’t mind having a million followers trending #Top49ers on our twitter feed. We’d like more friends, too. After all, who doesn’t need more friends? We are hoping to have a few thousand friends on our Facebook page liking this year’s Top 49ers announcement and congratulating all the Alaskan-owned companies that made the list. We’ll need your help to accomplish this lofty goal. So when you read this, please tweet #Top49ers and let the world know if your company is one of the Top 49ers, or if your company has ever been one of the Top 49ers, or if you’ve ever done business with any Top 49ers, or if your company aspires to be one of the Top 49ers. While you’re at it, be sure to follow us on twitter (twitter.com/AKBusinessMonth) and like us on Facebook (facebook.com/AKBusinessMonth). And, while you are advancing #Top49ers on social media, go ahead and add us to your circle on Google+ (plus.google.com/ +AlaskaBusinessMonthlyAnchorage/posts), pin it on Pinterest (not sure if we’re set up on that yet but if you are go for it), and connect and endorse us on LinkedIn. The mobility of information sharing is seemingly endless with all the social media avenues and apps. After the luncheon on the first of October we will activate the following link on our website: akbizmag.com/#Top49ers and that will be the announcement of the 2014 Alaska Business Monthly Top 49ers. Social media share it until it goes viral and add your hashtag. Make your business a part of this record-setting goal of generating the most hits ever. Speaking of records, we set one with the October 2014 issue at 204 pages. It is the largest magazine we’ve ever published and the team has done an exceptional job putting it together. Enjoy. —Susan Harrington, Managing Editor October 2014 | Alaska Business Monthly

ARCTIC IDEAS

Pull Up A Chair Alaskans now sit at the table within the Arctic Council By Tom Anderson

Aurora borealis, the Big Dipper, and Ursa Major over the Beaufort Sea, Arctic Ocean, looking north from Barter Island, Kaktovik, Alaska.

here remains a majestic, magnificent, and considerably virginal region on the Earth that swirls with weather patterns above the ice and bustles with organisms and sea life below. In this seemingly remote expanse of 14.5 million square miles, comparable to the dimensions of Antarctica, sustainable economic development and essential transportation routes are just upon the horizon. This remarkable and thriving place is known as the Arctic, a name derived from the Greek word “arktos,” which refers to bears, also tying in Ursa Major, a North Pole constellation. The state of Alaska, and by extension the United States, is inextricably linked to the region’s vibrant utility. Alaska is not only dependent on the Arctic for prospective commerce and international relations but is also protective of its rich resources, access, and borders.

Why the Arctic? There is no country or nation that “owns” the North Pole or the surround8

ing Arctic Ocean region. The nomenclature varies in legality when it comes to international property law, but it’s sufficient to say exclusive economic zones (EEZ) exist adjacent to bordering countries’ coastlines up to 200 nautical miles or 230 actual miles. There are five nations that surround the Arctic region: Canada, Denmark (via Greenland, which is an autonomous country within the Kingdom of Denmark), Norway, the Russian Federation, and the United States (via the state of Alaska). There are three others nation states, Finland, Iceland, and Sweden, with territory in the Arctic. These eight nations are considered the Arctic nations. Once past the 230-mile invisible demarcation, international waters are in play and ownership recognition disappears. One contentious facet to burgeoning Arctic policy is the recognition of ownership and access rights to the sea bottom and continental shelves beyond the 230-mile boundary. The United Nations

Convention on the Law of the Sea (UNCLOS) was enacted to allow Arctic nations to make claim on extended continental shelf exclusivity. In 1996 Norway accepted and ratified the UNCLOS; the next year in 1997 Russia followed, then Canada in 2003, and Denmark in 2004. The United States has signed but not ratified UNCLOS. Ratification of a treaty requires consent by two-thirds of the one hundredmember United States Senate so long as the treaty does not contravene the Constitution. In the case of the Law of the Sea Treaty, the anti-ratification side, many of whom are Alaskan policymakers and business leaders, argue that national sovereignty and navigational access are at risk, along with environmental concerns that other nations could harm the Arctic. De-militarization, taxation impacts, and economic apprehension, as nations inch their way into control of what were once international waters and neutral sea floors, are additional concerns.

Alaska Business Monthly | October 2014 www.akbizmag.com

Genesis of the Arctic Council Twenty-five years ago, through prodding from Finland, the eight Arctic countries met in Rovaniemi to discuss protection of the far north and cooperative ways to share data and research. Emissaries from the eight countries worked towards a ministerial designation (from each nation) to oversee and handle responsibility of circumpolar policy. A plan evolved called the Arctic Environmental Protection Strategy, and Canada, Denmark, Finland, Iceland, Norway, Sweden, the United States, and the Union of Soviet Socialist Republics participated. By 1991 the Arctic Environmental Protection Strategy was signed. Attention to the Arctic and momentum from interested countries heightened, and by 1996 the Declaration on the Establishment of the Arctic Council was signed and established by the eight Arctic countries in Ottawa, Canada. The Council members affirmed commitment to the well-being of the inhabitants of the Arctic with special recognition to the indigenous populations. The protection of the environment, including ecosystems, biodiversity, and conservation, were articulated. Economic development, and specific reference to sustainable use of natural resources, was also crafted into the Declaration. The eight nation members would thereafter be referred to as the Arctic States. The chairmanship of the Arctic Council rotates every two years. The Council convenes twice a year and typically meets within the chairing country’s borders. The first chair in 1996 was Canada (1996–1998), followed by the United States (1998–2000), Finland (2000–2002), Iceland (2002–2004), Russia (2004–2006), Norway (2006– 2009), Denmark (2009–2011), Sweden (2011–2013) and, at present, Canada. The United States will return as the Chair country from 2015–2017. Until 2013, the Arctic Council was comprised of six working groups: Arctic Contaminants Action Program, Arctic Monitoring and Assessment Programme, Conservation of Arctic Flora and Fauna, Emergency Prevention, Preparedness and Response, Protection of Arctic Marine Environment, and Sustainable Development Work. The Council also established task force 10

expert groups targeting black carbon and methane, circumpolar business, scientific cooperation, and marine oil pollution prevention. The majority of these groups and task forces were tethered to environmental protection and preservation. The missing link was a definitive group assigned to focus on economic sectors, development, implementation, and collaborative recognition of the vast potential in commerce within the Arctic that could benefit worldwide economies. Then in the beginning of the same year, Leona Aglukkaq, Canada’s minister for the Arctic Council, began entertaining input and formulation of the rules and process for a new economic forum.

Kiruna Declaration Creates Task Force Following discussions and contouring of a structure in which to further policies, in May 2013 at the eighth Arctic Council Ministerial Meeting, under Canadian chairmanship of the Council, the Kiruna Declaration was signed by the eight Arctic States. The Declaration affirmed that “Arctic economic endeavors are integral to sustainable development for peoples and communities in the region” and expressed intent to “promote dynamic and sustainable Arctic economies” through a new task force. The Task Force to Facilitate the Circumpolar Business Forum was thereby created. In December 2013 the Task Force proposed a new name for the forum, entitling it the “Arctic Economic Council.” The rename was approved in January 2014. Thereafter, the Arctic Council issued a document overviewing the aim, objectives, implementation, and procedures of the new Arctic Economic Council (AEC). The six objectives are to (1) strengthen the Arctic Council by enhancing regional economic cooperation; (2) inform, through the views of business, the work of the Arctic Council; (3) facilitate and foster business opportunities while advancing sustainable development of the Arctic; (4) contribute to a stable, predictable, and transparent business climate; (5) facilitate trade and investment in the Arctic; and (6) maximize the potential for Arctic economic activities to take into account environmental protection and

McGuire

to positively impact the communities, lives, and culture of Arctic indigenous peoples. The procedural section included the invitation to all member nations to recommend (within two months) approval of three representatives to attend the AEC’s founding meeting. The AEC’s creation was notable within the Arctic region’s spheres of influence considering the prize of resource and route access. Arctic State appointees would be critical to the direction of economic policy and direction, and Alaska wasted no time in grabbing hold of the appointment process so federal overreach or apathy didn’t take root. Led by State Senator Lesil McGuire and State Representative Bob Herron, co-chairs of the Alaska Arctic Policy Commission, along with the Alaska State Chamber of Commerce and its President and CEO Rachel Petro and the Board of Directors, a process was initiated to identify and select three Alaskan business leaders to attend the first AEC meeting. Petro explained that the AEC is meant to be independent from the Arctic Council, so its mission and measures would be formulated by the new members, which is “both a challenge and a significant opportunity” for Alaska. Petro said that forty Alaskans were identified through McGuire and Herron’s Alaska Arctic Policy Commission and from Governor Sean Parnell’s office, as well as from the Alaska Chamber of Commerce and Institute of the North. Candidates were asked to submit letters of interest that highlighted ability, desire, and authority to serve on the AEC. Petro explained that prospective members were asked to contemplate

Alaska Business Monthly | October 2014 www.akbizmag.com

their knowledge and understanding of business opportunities in the Arctic and the way in which international cooperation at the Arctic Council supports building economic activity in the region, ability to work with the state, Permanent Participants (indigenous representatives), business groups to establish the membership, governance, structure, and activities of the AEC to advance an investment agenda and foster trade and cross-border infrastructure. Knowledge and experience doing business in the Arctic and the ability to represent Alaska and the United States rather than personal or corporate interests were also integral components to the application. After a significant review and vetting process, three individuals were selected: Gail Schubert, President and CEO, Bering Straits Native Corporation; Lori Davey, General Manager, Fairweather, LLC; and Bruce Harland, Vice President Business Development, Crowley Marine Services, Inc.

Gail Schubert After the dust settled and appointees confirmed, Gail Schubert was ready to get to work. “I am particularly appreciative of my seat at the table because, in my capacity as president and CEO, I represent seventeen communities either on or immediately adjacent to the Bering Strait,” Schubert says. “All of our represented communities are subsis-

tence-based and will hopefully benefit from Arctic development.” An Iñupiat Eskimo, born and raised in Unalakleet, Schubert is proud of her Alaskan Native culture and the efforts in the Arctic to balance respect of the indigenous populations with responsible economic development. After graduating from Stanford University with a Bachelor’s Degree in Political Science, she continued at Cornell University earning a JD and MBA. She worked for eight years on Wall Street in New York, two years for the Federal Reserve Bank

of New York, and six years in law firms. She returned to Alaska in 1992 and opened her own law office, practicing for eleven years. In 2003 she joined Bering Straits Native Corporation as Executive Vice President and General Counsel, would later be appointed CEO in 2010, and thereafter President and CEO. Her civic board membership includes the Alaska Federation of Natives Board, Alaska Retirement Management Board, Alaska Native Justice Center, and Akeela, Inc. Schubert is a worker and a visionary.

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October 2014 | Alaska Business Monthly

She remains passionate about the Arctic States working together to responsibly develop the region while maintaining business-to-business opportunities and supporting Alaskan cultures. Crossborder relations and expansion of Alaska’s Arctic commerce networking are some of Schubert’s highest priorities. “I’m thankful the State Legislature and Administration had the foresight to be part of the new Arctic Economic Council,” adds Schubert. “The increased development and corridor traffic should positively impact the entire state.”

Lori Davey Lori Davey’s interest in participating as a US representative on the AEC was to help ensure Alaska and US economic and security interests in the Arctic are both realized and protected. Davey recognizes that Alaska has significant potential for economic enterprise opportunity in the Alaska Arctic region, but an effective plan is needed to encourage private investment. “I am a lifelong Alaskan and have operated Alaskan businesses for over twenty years,” says Davey. “My current role as general manager of Fairweather LLC has Davey

provided me an additional insight into the requirements of Alaska in developing its Arctic coast. Fairweather operates several Arctic operations and our parent company, Edison Chouest Offshore, brings worldwide offshore, Arctic, and Antarctic experience and capabilities.” When it comes to Arctic knowledge and connections, Fairweather fits the mark because it operates the Deadhorse Aviation Center at Prudhoe Bay. This is a multi-modal facility supporting both onshore and offshore oil development, military exercises, science research, and unmanned remote sensing operations. The company has a joint venture with Olgoonik Oilfield Services and is in its seventh year of operating a joint science program in the Chukchi Sea for oil companies. Fairweather operates remote medical operations all across the Alaska North Slope for oil development and production, as well as an independent medical clinic for urgent care occupational medicine and medevac evacuation at the Deadhorse Aviation Center. Fairweather also maintains strong Alaska Native joint venture partnerships with Olgoonik (Wainwright) and Kaktovik. Olgoonik is a partner in Tulugaq and Fairweather Science. Kaktovik is a partner in the Deadhorse Aviation Center and Tulugaq. Davey emphasizes that she values the company’s Alaska Native partners for their synergistic participation and commitment to responsible development. “Alaska is a uniquely small state where it is fairly easy to have relationships with local, state, and federal lawmakers. I work with the business community on the Alaska North Slope every day for oil and 12

Alaska Business Monthly | October 2014 www.akbizmag.com

gas development along with our Native joint venture partners. Our relationships have earned us long-term business opportunities through excellent support and the highest level of integrity,” Davey says. Davey notes that while Fairweather has vast Arctic interests, she’s committed to personally representing Alaska and US Arctic interests first. She contends that the ability to identify similar goals and work to resolve differences for the common good are key to making the right choices for Arctic States affected by Arctic Council’s purview and policy directives. “The Arctic is a fragile system, and the resources must be managed carefully to mitigate any negative impacts to the region. Private funding will be the ultimate key to success. I believe private investment and a stable investment environment will be necessary to developing the infrastructure necessary for Alaska’s Arctic. This Council will be the most important venue to bring investment and opportunities to Alaska’s Arctic region. AEC has the potential to create an economic environment that will allow for the future growth and success of the Alaska Arctic enterprise,” says Davey.

Bruce Harland Crowley Marine Services has a long history of working in the Arctic both in Alaska and Canada. Bruce Harland is the Vice President of Business Development for the company. In this capacity he is responsible for business activities in Alaska and the Canadian Arctic, which includes the new emphasis and opportunities provided by Outer Continental Shelf development. Harland has particularly focused on the Arctic since news has surfaced about diminishing ice and increased opportunities in the Arctic over the last five years. “I have been in a large number of the discussions around responsible development in the Arctic region with participation in many of the conferences and meetings focused on the emerging opportunities,” Harland says. “I have also participated in several working groups exploring the questions of what is sustainable development and how we foster responsible business practices in this important region.” Crowley was the first commercial company to operate in the Arctic in 1958 in support of the DEW line resupply operation. The company developed many of the techniques for Arctic operations and the 14

DEW line operation expansion into villages for re-supply and fuel deliveries. The first sealift in support of Prudhoe Bay development was in 1968, and to date Crowley has delivered 344 barges and more than 1.3 million tons of cargo to Prudhoe Bay. Its ice road and island building techniques, gravel island construction, hovercraft and hoverbarge operations, tundra vehicles, and many other innovative solutions for Arctic transportation have made the company a state-of-the-art Arctic development innovator. Harland sees his position at Crowley and knowledge of the environment as a plus when it comes to representing Alaska interests. “I am very interested in the development of the Arctic and improving the presence and position of the United States as an Arctic nation,” notes Harland. “It should be recognized that the United States is an Arctic nation because of Alaska, and Alaskan interests should be taken into consideration by US representatives to the Arctic Council.” Harland added that he is always amazed that people think the Arctic is just being discovered. “People have lived in the Arctic for ten thousand years, and companies have been successfully operating in the region for many decades. New opportunities are opening up with changes in technology, and we have a responsibility to ensure that responsible development practices are fostered to both protect the region and the people that call the Arctic home.”

Alaskan Leaders Forging Arctic Policy McGuire has been a notable champion of Arctic policy direction and development on behalf of Alaska and the United States for the last ten years. As former president of the Pacific Northwest Economic Region, former chair of the Council of State Governments-WEST, and current cochair of the Alaska Arctic Policy Commission that is made up of twenty-six commissioners and works to influence federal Arctic policy, her goal is to make sure the needs of Alaskans come first. “The Arctic is where the future of Alaska and our nation is for economy and innovation,” McGuire says. “Alaskans have lived, worked, and played in the Arctic for thousands of years, and it’s imperative we have as many Alaskans at the table guiding Arctic policy as possible.”

Harland

When it came to helping recommend Alaskans to the Arctic Economic Council, McGuire and Herron recommended Schubert, Davey, Harland, and alternate Chuck Greene, Vice President Community and Regional Affairs, NANA Development Corporation, because of their varied and diverse backgrounds. “Together they represent a perfect crosssection of Alaskans interested in and dependent on the Arctic,” McGuire says. McGuire says that Alaska could be in the driver’s seat soon, as her commission and the AEC include men, women, Alaska Native corporations, large and small businesses (from shipping to resource development and on-ground in region), responsive policymakers, and community leaders. “Representative Herron and I have been pushing for the United States to be integral in the Arctic Economic Council, and were particularly adamant the Obama Administration include Alaskans on the table,” says McGuire. “The US will chair the Arctic Council in 2015, so with dynamic Economic Council members like Gail, Lori, and Bruce, along with the capable and impressive leadership of former Lieutenant Governor Fran Ulmer as a special adviser to President Obama on Arctic science and policy and former US Coast Guard commandant Admiral Robert Papp as our Ambassador and Special Representative to the Arctic, Alaskans won’t just be seated at the table, but leading the world’s recognition and development of a blossoming Arctic region.” R Tom Anderson writes from across Alaska.

Alaska Business Monthly | October 2014 www.akbizmag.com

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ENERGY

Local alternatives paying off

By Julie Stricker

ver a ridge, just out of sight of the city of Kotzebue, nineteen towers rise hundreds of feet into the air like oversize cranes, arms rotating in a steady breeze off the Chukchi Sea. The turbines make up Alaska’s oldest commercial wind farm, supplying about 20 percent of the community’s electricity. Kotzebue, a mostly Iñupiat Eskimo community of 3,200, is a mixture of old and new: caribou antlers from subsistence hunts are piled next to brand-new satellite dishes; splintered dog sleds sit in yards next to new trucks

“Alaska is No. 1 globally when it comes to deployed microgrids incorporating renewables.”

—Gwen Holdmann Director, Alaska Center for Energy and Power

Photo courtesy of Kotzebue Electric Association

tats on the EWT Directwind 54 - 900kW Direct Drive Wind Turbines, built by Netherlands-based EWT:

n The turbine foundation is 8 feet high n 246 feet tall from the base of the tower to hub height n Generator is 20 feet in diameter n Blades are 88.5 feet long with a 177-foot diameter n Total overall height is 342.5 feet 16

and snowmachines. Solar panels are perched on the roofs of battered wood-frame homes. The community is perched on a spit at the tip of the Baldwin Peninsula thirty-three miles above the Arctic Circle, connected to the treeless mainland by a causeway and a two-lane bridge. The wind farm is four miles away. Even Kotzebue’s power system is a mix: a hybrid of diesel, wind, and solar created by the necessity of keeping the plant as cost- and fuel-efficient as possible, says Brad Reeve, general manager of Kotzebue Electric Association (KEA). “We try to use every ounce, every BTU out of a gallon [of diesel],” he says.

‘Snazzy’ Microgrids Kotzebue’s grid stands alone, like those of more than two hundred other villages in rural Alaska, says Gwen Holdmann, director of the Alaska Center for Energy and Power. Since the 1960s, diesel generators have been used to power most villages. Be-

Alaska Business Monthly | October 2014 www.akbizmag.com

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“The EWTs here are the first anywhere with black blades because of the effect of the sun in knocking off ice and keeping them icefree and frost-free. We were out there one day. It was about twenty below and the blades were on the ground on the ice and the snow had all melted off the blades. That’s pretty intense solar.”

—Brad Reeve, General Manager, Kotzebue Electric Association

A series of photos showing the installation of the EWT 900kW turbines in 2012, which more than doubled the power output of the wind farm four miles outside Kotzebue. Photos courtesy Kotzebue Electric Association

cause most of Alaska’s rural communities are so isolated, it doesn’t make sense to connect their grids, so most also stand alone, islands of light and heat in the vast wilderness. Over the past decade, Holdmann says, more villages have turned to renewable energy to help them achieve greater energy independence and cut costs. Today, about seventy village systems are powered in part by renewable energy, including small hydro, wind, geothermal, and solar. Kotzebue was one of the first. “They used to find other names for us: isolated islanded grids,” Reeve says. “But now it’s microgrids, which is the new snazzy word that came in after [Superstorm] Sandy went through and kind of changed people’s perceptions.” The 2012 hurricane blacked out much of the East Coast, but islands of light here and there from localized energy grids caught the attention of officials. Now, Holdmann says, microgrids are an emerging trend, and Alaska is at the forefront. “Alaska is number one globally when it comes to deployed microgrids incorporating renewables,” she says. “That is a big deal, considering it will likely become a $40 billion market.” Reeve fields inquiries from around the country about Kotzebue’s power grid. He has visited Russia and entertained Russian dignitaries in Kotzebue, all interested in KEA’s setup. The first three AOC 15/50 turbines went online in 1997. Another seven turbines were installed in 1999, with more

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added at intervals over the years. In 2012, a $10.8 million expansion added two EWT DirectWind 900 kilowatt turbines, which more than doubled the power output of the entire project for a total of 2.95 megawatts, according to the Alaska Energy Authority. A total of nineteen turbines make up the project to date. The wind farm, the first commercial system in Alaska, now supplies about 20 percent of the overall power supply, Reeve says. Diesel-fired units generate the rest. In the next few years, Reeve wants to supply a third of Kotzebue’s

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electricity through alternative generation, substantially trimming costs for the remote community. Last year, the community saved $839,000 due to the reduction in diesel fuel needed because of the turbines, dropping to 1.28 million gallons from 1.55 million, Reeve says. “It definitely helps,” he says. “It saves [households] about $33 a month, about $400 a year. It really helps on the commercial side, having a low fuel surcharge. They get a big bang because they don’t get any power cost equalization to help them.”

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Wind Technology Laboratory Kotzebue serves as a laboratory of sorts in advancing wind technology. “We’ve been learning all the little tricks over the years on how to handle higher penetrations of the wind,” he says. “That’s always been the hard part for some places, to try to keep the system stable while you’re accepting higher and higher levels of wind.” The average wind speed on the plain where the turbines are lined out is about 14 miles per hour, but it can blow much harder. “On an instantaneous basis we’ve gotten as high as 90 percent of wind, 10 percent diesel,” he says. In the past thirty years, wind technology has improved. In the 1980s, about 140 wind generators had been installed across Alaska, according to a KEA presentation. Most were out of commission within a year because the equipment could not stand up to Alaska weather conditions and because supporting infrastructure was lacking. Over the years, Reeve and KEA have worked with a variety of organizations such as the National Science Foundation and state agencies to test and report on how well the turbines and related technology function in a region that routinely sees temperatures of forty below zero and colder, not counting wind chill. For instance, using a grant from the Alaska Renewable Energy fund, Reeve ordered a zinc bromide flow battery that had performed well in tests and looked like a perfect fit for the utility’s needs. “The reason we liked that company was that it had real storage,” he says. “A lot of battery systems are kind of instantaneous, the power’s there for a short time.” The flow battery would allow KEA to “time-shift” the power generated at night by the wind turbine. “Instead of turning on a diesel in the morning when everyone’s getting up and the toasters are starting to come on and the coffee’s starting to percolate, you can keep a diesel off and run off this battery to make up for the peak difference,” Reeve says. “And that saves a lot of money. It saves a lot more diesel.” Unfortunately, Kotzebue’s extreme climate was too much for the battery system. “They had expansion and contraction issues with the piping they installed and

Alaska Business Monthly | October 2014 www.akbizmag.com

it was leaking too much,” he says. “They actually re-piped everything. Instead of going with PVC piping, they went to England and bought Teflon piping, brought it up, but they still had some places they couldn’t get at and they said, ‘We can’t do this.’ So we’re looking at other companies.” Reeve notes that he tries to fund new projects, such as the first wind turbines, with grants. “We’ve always taken the position that we don’t want to put a lot of risk on our customers,” he says. “Whenever we’ve done these projects, we’ve tried to eliminate as much on a research basis the effect on the community if it doesn’t work right. So far, we’ve made them work right and they’ve done well.” What works well in Kotzebue may also work in other communities. KEA is helping nearby communities Deering and Buckland install wind turbines. The utility is also testing a project that uses waste heat to generate electricity.

Options and Alternatives KEA’s power plant uses a General Electric Clean Cycle heat-to-power genera-

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tor that creates about 125 kilowatts of power from waste heat. “It’s got exhaust boilers on the stacks going up,” Reeve says. “It brings it through a liquid process, heats that up, turns it to gas. The gas goes through a turbine, spins very fast, and makes power.” KEA also sells jacket water heat to the City of Kotzebue, which warms the city’s water system up from thirty-eight degrees to about fifty degrees. That’s an optimum temperature if the city needs to add chemicals to the water, and it gives the city more time to respond to problems in the winter before the system or feeders freeze up. KEA also uses the jacket water to make ice, which is used during commercial fishery openings. Solar is another piece of Kotzebue’s energy puzzle. Reeve says when they ordered the two EWT turbines, they specified black blades, a request that puzzled the Danish manufacturers. “The EWTs here are the first anywhere with black blades because of the effect of the sun in knocking off ice and keeping them ice-free and frost-free,” he says, although the Danish installers had

to see it to believe it. “We were out there one day. It was about twenty below and the blades were on the ground on the ice and the snow had all melted off the blades. That’s pretty intense solar.” Despite its location above the Arctic Circle, solar power is another option for renewable energy in Kotzebue, Reeve says. Here, however, it’s the older solar technology that is better adapted to Arctic conditions. KEA received an Emerging Energy Grant to implement a solar energy project on six elders’ homes, Reeve says. They used two types of thermal panels: an evacuated tube type and a flat plate type, what Reeve calls “black paint in a box with tubes going through it that heats water.” The performance of the evacuated tube system was disappointing, he says. “Middle of the winter, these things were frosted up so bad they wouldn’t thaw out until 2 in the afternoon, and the black boxes were just humming along,” he says. “It really surprised us.” R Julie Stricker is a journalist living near Fairbanks.

October 2014 | Alaska Business Monthly

FINANCIAL SERVICES

Creative Options Financing startups in Alaska By Tracy Barbour Photo by Kyle Lavey/Courtesy of Putters Wild

Ninth hole pirates at Putters Wild.

few years ago, Fractal OnCall Solutions won some muchneeded start-up financing from an unlikely source: the Municipality of Anchorage’s 49th State Angel Fund. The competition was stiff, with about two dozen applicants vying for funding and only four receiving an investment recommendation. Fractal OnCall Solutions, doing business as CallDR, ultimately received $200,000 to support its innovative mobile medical software. CallDR is the brainchild of co-founders Kevin Halvorson, Dr. Carl Rosen, and Dr. Michael Levy. It enables emergency and on-call physicians and other health care professionals to collaborate securely on point-of-care consultations using an iPhone, iPad, or other device. They can connect with consulting specialists anywhere in the world to send/ save patient data, collaborate on treatment, and confirm a diagnosis. The 49th State Angel Fund is CallDR’s largest cash investor, providing credibility and visibility on a national level. “It was

“It was very helpful. It allowed us to get out into the marketplace. If we can get it right in Alaska, we can take it to companies in the Northwest and elsewhere.”

—Kevin Halvorson Vice President Sales and Product Development Fractal OnCall Solutions/CallDR

very helpful,” says Halvorson, vice president of sales and product development. “It allowed us to get out into the marketplace.” Consequently, CallDR has been selected as a telemedicine tool by Nashvillebased Hospital Corporation of America, which owns Alaska Regional Hospital. Hospital Corporation of America owns and operates approximately 165 hospitals and 115 freestanding surgery centers in twenty states and Great Britain. “If we can get it right in Alaska, we can take it to companies in the Northwest and elsewhere,” Halvorson says. The 49th State Angel Fund is just one of the resourceful ways budding entrepre-

neurs like Fractal OnCall Solutions are financing commercial endeavors in Alaska. Other viable options are the Path to Prosperity contest, traditional financial institutions, and creative financing solutions.

49th State Angel Fund The 49th State Angel Fund is made possible by a $13.2 million federal allocation from the State Small Business Credit Initiative (SSBCI). The program promotes entrepreneurship and innovation, creating jobs and economic benefit for Anchorage. Any high-growth business that shows significant economic potential for Anchorage is a prime candidate.

Alaska Business Monthly | October 2014 www.akbizmag.com

The fund seeks to support a diversity of businesses in Alaska, according to Program Manager Joe Morrison. “I feel like because we work in a challenging startup environment, we try not to be biased toward any particular industry,” he says. The 49th State Angel Fund provides investments by directly investing in businesses and by indirectly taking a partnership interest in locally-focused angel or venture capital funds. Direct investments can range from $30,000 to $3 million; indirect investments can fall between $100,000 and $5 million. Whether direct or indirect, angel fund investments require matching funds. So, for example, if an entrepreneur needs $100,000, he or she can only request $50,000 from the fund. The requirement for matching is stipulated by the SSBCI, plus it enhances the fund’s impact. So do indirect investments in funds. That’s why only fund-to-fund applications were accepted during Round 4 of applications. “Our committee decided that our greatest return on time and investment is to focus on building funds and letting those funds make those financing decisions,” Morrison says. “There’s a

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The Pacific course at Putters Wild. Photo by Kyle Lavey/ Courtesy of Putters Wild

larger multiplier in efficiency by partnering with the private sector with deploying capital for the benefit of everyone.” As of July, the 49th State Angel Fund had just over $5 million remaining unobligated and available to deploy in the community. The fund’s advisory committee met in August to evaluate new fund proposals and strategies for capital deployment.

Path to Prosperity The Path to Prosperity competition offers participants a unique opportunity to start, diversify, or expand a business in

Southeast Alaska. The contest gives two winners up to $40,000 in seed funding for consulting/technical assistance to develop their business concept, along with support in finding investor funding. Established in 2013, Path to Prosperity aims to launch companies that will increase local employment, have a positive social and economic impact on their communities, promote sustainable use of local resources, and increase entrepreneurial know-how and business leadership in Southeast Alaska. The contest is supported by Haa Aani LLC—a wholly-

October 2014 | Alaska Business Monthly

owned subsidiary of Sealaska Corporation—and the Nature Conservatory. This year, the contest received twentyseven applications. Twelve semifinalists were selected to work with the program to develop their business plan over several months to include an intensive boot camp weekend in Juneau with marketing specialists, attorneys, SBA advisors, and others experts. “We give them as much technical assistance as we can so that after they complete their business plan they are ready to hit the ground running,” says Alana Peterson, economic development coordinator for Haa Aani. However, the competition is designed to benefit all participants. Each of the initial twenty-seven applicants received the scores and comments from the three judges, which provided feedback to help strengthen their business concepts. “We wanted everyone to get the most out of it, no matter where they ended up,” Peterson says. “Each year, participants have been pleased with the amount of support they have received.” This year’s semifinalists include a tour business, a Haines distillery, a Sitka otter-fur sewing business, a Petersburg fish-processor, and a Juneau coffee shop. Their business plans will be due in December, and the two finalists will be announced in January. Last year’s winners were Raven Guitars of Wrangell and Hoonah and Icy Straits Lumber of Hoonah. Raven Guitars, incidentally, used some of its prize money to pay for guitar building classes in Portland. Path to Prosperity’s performance has exceeded its sponsors’ expectations, according to Russell Dick, Haa Aani’s president and chief executive officer. “I think it’s been absolutely incredible,” Dick says. “It’s showing that the region is heading in

“I think it’s been absolutely incredible. It’s showing that the region is heading in a new, different, and positive direction.”

—Russell Dick President and CEO, Haa Aani

“We give them as much technical assistance as we can so that after they complete their business plan they are ready to hit the ground running.”

—Alana Peterson Economic Development Coordinator Haa Aani

a new, different, and positive direction.” The program also demonstrates that economic sustainability doesn’t have to be accomplished by a single organization. “It’s about building collaborative partnerships,” Dick says.

Traditional Lenders First National Bank Alaska offers a full spectrum of commercial financing solutions, but lines of credit are a common product that it provides to startups. Credit lines give businesses access to short-term working capital to carry accounts receivable, purchase inventory, and meet other expenses. First National’s Business Manager program offers a unique solution. Business Manager is essentially a credit line that’s tied to invoices and accounts receivables. The program provides a higher advance rate than the bank typically offers (75 percent) on advance receivables, according to Chad Steadman, a vice president with First National. The bank also offers 100 percent financing for purchasing a medical practice. This rare type of business acquisition financing is secured with life insurance and is available for borrowers/ owners who will operate the practice. Steadman says all the usual requirements apply with start-up financing— credit, capital, character, collateral, and condition. “What we’re really looking for is someone who has a very strong history in that line of business,” he says. “For example, if someone wants to start a retail business and they’ve never been in retail before, that scares us.” Successful loan applicants are often individuals who have worked in an industry for many years and are now transitioning into being a business owner. However, many entrepreneurs face the challenge of not having enough money to put down or having a lack of collateral. “A lot of time what we use is other assets to secure the loan, such as their home,

rental property, or raw land,” Steadman says, describing a possible remedy. Having the business obtain a SBA-guaranteed loan can also help because it reduces the risk for the bank and allows for more creativity with financing solutions. Denali Alaskan Federal Credit Union also offers a full complement of business loans, including equipment financing, lines of credit, and commercial real estate loans. Its loan programs are generally driven by the collateral, which determines the terms and repayment options, according to Don Clary, vice president of Member Business Lending. For example, an equipment loan would be based on the item being purchased and would have a five- to seven-year term. A line of credit would be set for a twelve-month period. Then the line is reviewed and renewed—if it was appropriately used by the business. When reviewing loan proposals, Clary looks closely at the startup’s business plan. The plan, he says, must be strong enough to convince him that the borrower has the technical expertise, management experience, and financial resources to successfully operate the business. The amount of capital being invested is also a major factor. “As a minimum, we want to see 20 to 25 percent as an equity stake,” Clary says. “If the borrowers are not willing to or able to put some of their own capital into the project, that’s a weakness in the business plan.” If the borrower has difficulty qualifying for a traditional loan, the credit union may be able to work with SBA to provide funding. “We try and be creative and see if there’s a way to make things work,” Clary says. “I don’t like to out-and-out decline a loan until I’ve explored the various options that may be available.” That’s exactly what happened with Shawn and Chris Rogers, the owners of Putters Wild. The couple was repeatedly turned downed by lenders who said their idea for an indoor, black light miniature golf facility would never work. Then they

Alaska Business Monthly | October 2014 www.akbizmag.com

reached out to Denali Alaskan, which helped them get an SBA 7(a) Community Express loan. “Don was amazing because he actually saw what I was trying to do,” Shawn says. “He didn’t just say no.” Putters Wild officially opened in May 2011 and is now a full-service family entertainment center that offers “extreme” indoor miniature golf, air cannons, basketball trampoline, arcade games, and a party room. Shawn says the business has been well received and was able to repay its seven-year loan off in in just three years. “I knew Anchorage could use the entertainment value,” she says. Regarding the couple’s success, Clary says: “They did their homework with their business plan, and it made my job much easier.” Shawn didn’t initially consider the credit union as a potential source of commercial financing. That’s understandable, given that credit unions are generally thought of as member-driven organizations. But that’s changing, Clary says. “As credit unions have grown and the members’ needs for financing have also grown, we find our members need not only consumer-based loan products, but business-based loan products,” he says. “So we’ve morphed into a commercial lender as well.” Recently, Denali Alaskan added a new Business Services Department and extra staff to assist customers with business checking accounts, remote deposit capture, and other business-based solutions. “We’ve chosen to venture into the commercial realm because we felt our members wanted that, and we are happy to provide those services,” Clary says.

most cases,” says Barbara Gill, a Palmerbased senior loan officer with Evergreen Business Capital. “The SBA portion of the financing is a ten-year or twenty-year, fully-amortizing term with a below-market interest rate that is fixed for that full term.” Some startups may determine that leasing a location and/or buying a scaled back version of their equipment needs may be the first best step for them, Gill says. Then, once established, they may decide that owning a building and/or buying additional equipment is the next best step for their business. “Evergreen often has these

initial conversations with new business owners, guiding them and then stepping in to assist when they are ready to take their business to the next level,” she says. Other possible sources of startup financing include Alaska Growth Capital, the Juneau Economic Development Council’s Southeast Alaska Revolving Loan Fund, and the Alaska Division of Economic Development’s Small Business Economic Development Revolving Loan Fund and Rural Development Initiative Fund. R Tracy Barbour is a former Alaskan.

SBA and Other Resources SBA loan programs are much-needed options for entrepreneurs who are struggling to start or grow a business. The 7(a) program involves loans up to $5 million, a guaranty of up to 90 percent, and terms ranging from seven to twenty-fived years. SBA’s popular Certified Development Company/504 loan program provides long-term, fixed-rate financing for real estate and equipment. In Alaska, Evergreen Business Capital serves as an intermediary for 504 loans and works with the borrower’s choice of lender. “A start-up business can be eligible with as little as 15 percent down in www.akbizmag.com

October 2014 | Alaska Business Monthly

ENTREPRENEURS

49th State Angel Fund Connecting ideas and investment By Tasha Anderson

here are two key elements to any successful business: a good idea and capital. Flinging money at infrastructure and personnel without a strong idea and clear goals is just as ineffective as someone with a great idea stalled by a lack of workspace or the ability to hire support staff. In March of 2012 Mayor Dan Sullivan announced that the 49th State Angel Fund, created to bring entrepreneurs and

investors together, was open for business. The fund was started through an allocation from the US Department of Treasury’s State Small Business Credit Initiative to the tune of $13.2 million dollars, specifically earmarked to provide capital to Anchorage entrepreneurs and create a network of Angel investors. The second part of that statement isn’t a throwaway, as the Angel Resource Institute doesn’t focus singly

on providing money to startup businesses but also invests in investors, educating those with the means and interest in supporting small business and entrepreneurship responsibly.

The Angel Resource Institute The Angel Resource Institute is a 501(c) (3) nonprofit charitable organization founded in 2006 in order to encourage and support “angel” investing. It was

Alaska Business Monthly | October 2014 www.akbizmag.com

initially called the Angel Capital Education Foundation and focused on providing education, training, and information on best practices in the field of investing. A large part of any education is up-todate information, which today the Angel Resource Institute provides through the Halo Report, “a great, relatively new report that we’re doing on Angel investing,” says Susan Preston, general partner of the Clean Energy Angel Fund based in California. It’s a collection of research that highlights angel investment activity and trends in North America, published quarterly and available online to any interested party. The most recent Halo Report, Q1 2014, includes information on recent investment trends, the most active angel groups, regional statistics, and trends by industry sector. Additionally, the Angel Resource Institute has recognized that the collaborative process between angels and entrepreneurs is as valuable as the funds angels provide and is expanding its mission to include post investment activities such as governance and mentoring. Preston, who in addition to being the general partner of an angel fund is also an Angel Resource Institute Lead Instructor, came to Anchorage in July to present an all-day forum to further these education and training goals. The morning session focused on information for angel investors, while the afternoon session was a workshop geared toward preparing potential entrepreneurs to be successful in finding angel investors.

Alaska Angel Funds Alaska currently has four angel funds, which conveniently correlate with the four levels of investment categories as set out by the Angel Resource Institute: seed or startup, early stage, expansion, and later stage. The Alaska Accelerator Fund provides capital to seed or startup companies. These are generally less than eighteen months old, have some sort of proof of concept or prototype or are in the plan stage, and often have an incomplete business team. The investment range of the Alaska Accelerator Fund is $50,000 to $260,000. It is managed by Al Herman, Forrest Nabors, and Ky Holland, who are all professors in Alaska. www.akbizmag.com

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The 49th State Angel Fund was conceptualized at the next level, early stage. Early stage companies are roughly between one and three years old, have completed beta testing or pilot production, and have senior management in place. The 49th State Angel Fund specifically targets “small” businesses, meaning they have less than five hundred employees. In addition, it looks for businesses with an average equity position of $5 million or less and does not make investments of more than $20 million. This fund is required to achieve a 10:1 private capital leverage ratio; in other words, every one dollar invested will lead to ten dollars of new private lending. The 49th Fund, managed by Jamie Kenworth and Carol Howarth, is focused on companies in the third stage, expansion or growth. Target companies have been established for three to five years, are marketing their product or service, and are experiencing staff expansion and growth. This fund is specifically interested in funding manufacturing, technology, and import substitution

source Institute places such an emphasis on education. Angel funds, as evidenced by the four Alaska funds, can focus on any category of business or sector of industry; however, generally angel investors focus on early stage companies. One of the first major points for investors to keep in mind is that a whole portfolio approach is necessary for a fund to be successful. The reason for this is twofold: the performance of individual investments can vary from being wildly successful to going under in six months, and companies grow on different timelines. One company may provide a return on investment in five years while another may not achieve that in twenty. Preston presented data provided by angel investors concerning the outcomes of investments: of the reported 1,137 investments, more than half resulted in a negative return, one third produced expected returns (1x to 5x of the investment returned), and approximately 15 percent performed really well (5x to 30x investment returned). Preston summarized that, in a port-

strategy, specifies how and when an investor can expect to receive that return. Even if the plan doesn’t unfold exactly how it was planned, having one in place makes sure that everyone involved with the investment has an end goal in sight.

For Entrepreneurs One important question entrepreneurs need to ask themselves is, “Is the company fundable?” A fundable company meets the key criteria of having an ability to scale (to move into new locations or new markets), a clear path to exit for the investor, the best possible team (management level, mostly), and has shown progress against its business plan, Preston says. Angel investors are strongly encouraged to work with their companies through all phases; considering the reality of how many companies are looking for funding, companies that don’t meet those criteria mean extra work and present a higher risk of failure. In a survey of 539 investors, 35 percent of companies that angels invest in give absolutely no return; in fact, 75

Preston did examine some information that can give entrepreneurs an edge: many investors find companies to invest in through networking. It’s the people in this network that are considered valuable references; to an investor, the reference of a fellow investor is much more valuable than the reference of a website, for example. Networking can be vital for a small business to make those kinds of connections. companies, but will consider businesses in other sectors. Companies in this category are well enough established to have revenue. The lending range of this fund is $200,000 to $400,000. The fourth fund is the Anchorage Opportunity Fund, which is focused on funding expansion opportunities. Targeted businesses are preferably more than five years old, have products or services that are widely available, and are perhaps in second generation leadership. The Anchorage Opportunity Fund is managed by Mark Kroloff and Jonathan Rubini and has an investment range of $200,000 to $800,000.

For Angel Investors Both groups and individuals are eligible to become angel investors. Other than that, anyone with the interest and the funds can become an angel, regardless of experience, which is why the Angel Re28

folio approach, only companies that can be anticipated to have a 10x return should be selected. Those that succeed will do so well enough to make up for those that are unsuccessful. Preston’s presentation also included information concerning the extreme importance of performing due diligence. Investors must carefully consider the company’s financial status, legal status, stage of technology, current market environment, and the company’s value. She said due diligence practices are evolving, and recent trends include using standardized checklists, electronic deal rooms, and background check services. Preston emphasized throughout the morning session the importance of having a plan for an “exit” strategy. In simple terms, angel investors are investing, not providing grants; money invested comes with the expectation that it will grow and be returned. An exit plan, or exit

percent of returns came from only 7 percent of the companies that received money, according to Preston’s presentation. Investors must be selective, which mean entrepreneurs must make sure they have eliminated problems and solved the issues that might immediately remove them from consideration. Preston did examine some information that can give entrepreneurs an edge: many investors find companies to invest in through networking. It’s the people in this network that are considered valuable references; to an investor, the reference of a fellow investor is much more valuable than the reference of a website, for example. Networking can be vital for a small business to make those kinds of connections. Practice an effective “elevator pitch.” The term comes from the idea that an entrepreneur is on an elevator with an investor and has two minutes, or until the

Alaska Business Monthly | October 2014 www.akbizmag.com

elevator stops, to sell the idea of investing in the company. While this actual scenario is fanciful, the ability to describe a company, be specific about capital needs, and assure an audience of the return on the investment, is a skill that can be employed in spare moments while attending a business lunch, tradeshow, or industry related workshop. Additionally, the exercise of paring down the complexities of a business into two concise minutes forces entrepreneurs to carefully consider every aspect of the company, which will aid them in growing their company regardless of investment. It is essential to have written documentation that attracts investors. In brief, the executive summary should be no more than two pages and should be submitted as a PDF to avoid formatting or version issues; it should not propose deal terms. A business plan should be roughly twenty to twenty-five pages, in general, and should include supporting documentation such as graphs, charts, management resumes, a financial model summary, and other related items. Live presentations should be accompanied by a slide presentation. Presentations for investments at this level generally last thirty-five to fifty minutes; the first half of the presentation is for information, the second half should be left for a question and answer session. Practice for the presentation. Do not read the slides. Do not have paragraphs of text on the slides. Do spend time doing research into effective PowerPoint presentations. Finally, Preston says that, in general, entrepreneurs are not expected to pay any fees during the process of seeking funding. If there are any fees, they should be small ($200 or less) and would only cover meeting costs such as refreshments or equipment. Investors charging thousands of dollars in fees just for a meeting should be avoided. The presentation ended with a panel of investors and successful entrepreneurs, who, in summary, said: Know your company; know your company’s needs; prepare for every question; and, when it comes to funding, it never hurts to ask. R Tasha Anderson is the Editorial Assistant at Alaska Business Monthly. www.akbizmag.com

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October 2014 | Alaska Business Monthly

ENTREUPRENEURS

Future Top 49ers at Lemonade Day Alaska Kids have fun while facing complex challenges of business ownership By Nolan Klouda, Kathryn Abbott, and Samuel Callen

oung entrepreneurs Ryan and Taylor are experts at differentiating their business from the competition. Veteran lemonade stand proprietors, each year brings a new theme to their operation. Their first year witnessed an Alaska theme with fry bread as a featured dish; a taste of the islands followed with a Hawaiian theme complete with tropical flavored beverages. Most recently in 2014, they unveiled a Disney motif to raise money for a family trip to Disneyland. They market their stand by sending out tweets and Facebook updates through their parents’ social media accounts. Through their strategically positioned stand in the same location each year (a busy grocery store in the Mountainview neighborhood of Anchorage) they are able to drum up both new and repeat business. Despite their changes every year, they have found one product to hold consistent: homemade whoopee pies. The boys’ grandmother travels up from the Kenai Peninsula every year to help them make their signature product, which always sells out first. Like many successful business owners, they face the complex challenges of financial management, marketing, product differentiation, and customer service. And they have fun doing it. That is the purpose of Lemonade Day Alaska.

Looking back at Lemonade Day Alaska’s History Lemonade Day is the brainchild of technology entrepreneur and philanthropist Michael Holthouse, who launched the first Lemonade Day in Houston, Texas, in 2007. The idea came to him when his daughter Lissa, wanting a pet turtle, started her own lemonade stand to show that she could raise the money needed for her pet. The lessons she learned about finance, risk-taking, and leadership along the way—far beyond what she could learn in a classroom—impressed Holthouse. Little did they know at the time, but this insight would start a nationwide movement to empower youth through entrepreneurship. What started as a city-wide event in Houston with 2,700 kids has now spread across thirty-five cities in the United States and Canada, with more than 200,000 kids participating. Seeing the success of the program in 30

other communities, the University of Alaska Center for Economic Development, in partnership with the University of Alaska Anchorage College of Business and Public Policy, decided to bring the program to Alaska in 2011. Lemonade Day appeared to be an excellent solution to a long-recognized problem: how to teach youth about entrepreneurship in a fun way. “Alaska has historically lacked a strong entrepreneurial culture. Research shows that people who grow up around business and entrepreneurship are much more likely to become entrepreneurs themselves, so we wanted to provide that outlet for youth who wouldn’t otherwise have the opportunity,” Associate Vice Provost Christi Bell says. In 2011, as a city-wide event in Anchorage, the program had 1,000 participating youth. Since that time the program has grown considerably. In the most recent Lemonade Day, held June 14, 3,003 youth participated in 42 Alaska communities, running the gamut from urban to rural. The program owes a large part of its success to the support of its sponsors, which include Wells Fargo, the UAA College of Business and Public Policy, Fred Meyer, Exxon Mobil, Hilcorp, and Microcom, among others. This support from the business community has helped the program continue to grow and reach additional youth each year.

Values and Principles

Much more than simply an entrepreneurship program, Lemonade Day Alaska instills life skills that have far-reaching impacts on youth who choose to participate. While entrepreneurship is a cornerstone of the program, kids also learn about leadership and being good community stewards. One prominent focus of the program is its encouragement of kids to give back to their communities. While the kids are allowed to keep all of the money that they make, they are encouraged to “spend a little, save a little, and share a little” with their community, as the program’s promotional materials state. Over the years, the youth have taken this lesson to heart. In 2014, 56 percent chose to donate a portion of their earnings to charity, with an average donation amount of ninetyseven dollars. Part of the enjoyment for kids

taking part is finding a particular charity about which they are passionate. Animal shelters, school fundraisers, Girl Scouts, and Boy Scouts are popular choices. Another key concept that the program reinforces is financial literacy, or “saving a little.” Throughout the months leading up to Lemonade Day Alaska, kids have a chance to participate in financial literacy workshops, hosted by Lemonade Day Alaska’s leading sponsor, Wells Fargo. Wells Fargo employees lead the workshops and teach kids the importance of saving money and of exercising prudent financial management. Kids learn how to price their lemonade, pay back their investors, and save money for the future. In 2014, 38 percent of participants deposited money into a savings account, showing that kids are learning the lessons of the program. Kids who participate in the program are given a chance to learn much more than financial literacy skills and community engagement, however. For many kids, Lemonade Day Alaska is their first opportunity to truly take on a leadership role as they “manage” younger siblings and friends. They learn about customer service, with even the shyest participants learning to interact with customers by the end of the day. For many participants, Lemonade Day Alaska is an empowering activity, one that shows them how to mobilize resources to achieve goals.

Profiles of Future Top 49ers

As the case of Ryan and Taylor illustrate, the youth learn these lessons in imaginative ways. A central challenge remains for all participants: how do you make your lemonade stand out when thousands of kids across the state are selling essentially the same product on the same day? Here are some kid entrepreneurs with innovative ideas that prove they are on their way to becoming future Alaska Top 49ers. Bobby Johnson’s Lemonade Stand, named after its owner Gage’s pet lizard, sets up shop each year in Anchorage. Gage serves cherry lemonade as his stand-out product, with a maraschino cherry for every customer and customized cups featuring his stand name. He also has a picture of his lizard with a tip jar to collect donations for a lizard rescue charity. While the lemonade is an obvious selling point,

Alaska Business Monthly | October 2014 www.akbizmag.com

A sampler of Lemonade Day across Alaska, from left: An ad for a Nome stand, C&H Lemonheads, Ashley’s Cup of Sunshine, Water Wagon, Lemon Paws, and Treasures of the Sea in Unalakleet. Photos courtesy of Lemonade Day Alaska the real secret to success is the atmosphere. There are tables and chairs so customers can stay and enjoy their treat, as well as fun, upbeat music blaring from his mother’s car. Some customers have even been spotted dancing along on the side of the road. Gage makes sure his lemonade is as fun to drink as it is delicious. Entrepreneurs Tory, Melody, and Haley of the Papa Murphy Girls stand in Nome have participated in Lemonade Day two years in a row. Their first year, the girls donated all of their proceeds to the community of Galena, which suffered severe flood damage in 2013. Not only did they put their lemonade profits towards this cause, they were able to solicit silent auction items to help raise money for relief. This year, the

girls bought all supplies on their own and paid cab fare roundtrip to their location (with a cab owner providing a one dollar discount on the fare). They earned enough in profits to buy gas to go on beach picnics and to scout the rivers for fish. When they last spoke to Lemonade Day staff, they reported plans to each buy a new pair of rubber boots, since their old ones expired while catching cigar fish for elders. The girls succeeded by getting their community invested in their success. In each case, these young entrepreneurs show promise in helping to grow Alaska’s economy with their appetite for risk and willingness to give back to their community. Look for them on a Top 49er list in the future. R

Nolan Klouda is the Executive Director at the University of Alaska Center for Economic Development (CED). Born and raised in Anchorage, Klouda has been involved with CED since 2010. Samuel Callen is a management consultant at CED. In addition to this role, for the last two years he has served as the development coordinator for Lemonade Day Alaska. Kathryn “Katie” Abbott serves as the Outreach and Training Manager for CED, where among other responsibilities she acts as primary coordinator for Lemonade Day Alaska.

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October 2014 | Alaska Business Monthly

ENTREUPRENEURS

Franchising the Future Where Baby Boomers retire and Millennials launch careers By Terry Powell

t isn’t typical to compare launching a career with retirement, but when it comes to the entrepreneurial tendencies of two contrasting generations—Baby Boomers and their Millennial children—The Entrepreneur’s Source, a leading career and franchise business coaching network, says one can draw those types of parallels. While the Woodstock generation is retiring, their children are entering the workforce, and the employment landscape looks vastly different than it has in previous decades. 32

Alaska Business Monthly | October 2014 www.akbizmag.com

Later Retirement The economy has forced many Baby Boomers to continue working: some members of this active generation welcome the stimulation of remaining in the workforce and others are left with the task of supporting their Millennial adult children. Recent studies indicate that more than 80 percent of Baby Boomers in the United States and 50 percent in Canada are not confident they will possess adequate funds for a comfortable retirement and anticipate the need to work beyond today’s traditional retirement ages of sixty-two to sixty-five. These factors and others have drawn the Baby Boomer generation to seek a “second act” career—and franchising, with its inherent benefits of independence and structure, is a road that increasing numbers of Baby Boomers are taking.

from mobile events to home-based businesses to your typical brick and mortar locations—franchise opportunities run the gamut of business models in both niche and mainstream indus-

tries. The key is to find a franchise that meets your desired income, lifestyle, wealth, and equity goals. Franchise ownership may be your best next career move. R

Terry Powell is the founder of The Entrepreneur’s Source, one of North America’s leading career and franchise business coaching companies. The Entrepreneur’s Source has more than two hundred franchisees throughout the United States and Canada. Contact Powell at tpowell@ franchisesource.com or visit entrepreneurssource.com. The Entrepreneur’s Source is a trademark of TES Franchising, LLC. All rights reserved.

Millennial Innovation For the Millennial generation, the economy also took a toll on the traditional job market, leaving many unemployed or underemployed and underpaid. A generation driven by innovation, Millennials have a natural entrepreneurial disposition. With limited job opportunities and natural independent drive, Millennials find entrepreneurship and the stability of franchising to be an appealing career path. According to a 2011 Kauffman Foundation survey, more than half of Millennials (54 percent) either would like to pursue entrepreneurship as a career or already are. While Baby Boomers are known for being goal-oriented and independent, their Millennial counterparts have become known for their innovation and drive. What we’ve seen in recent years is these two generations complementing each other’s skillsets in business partnerships through franchising. Franchising Opportunities For both generations, one of the greatest deterrents is a misconception about the cost of entry into franchising and an assumption that franchise business models are limited. In reality there are thousands of different franchising options in vastly diverse industries, some with a cost of entry starting as low as $10,000. There’s no cookie cutter “model” for franchising. With so many options— www.akbizmag.com

October 2014 | Alaska Business Monthly

EDUCATION

First class of new UAA minor offers unique training By Tasha Anderson

he University of Alaska Anchorage (UAA) has implemented a new minor starting this fall: Alaska Native Business Management. The eighteen-credit minor has five required courses totaling thirteen credits and five elective credits that are focused on Alaska Native topics. One mandatory class required by the minor is Introduction to Alaska Native Business, a one-credit course that takes place over the course of two Fridays. It’s being offered this fall on November 14 and 21. UAA College of Business and Public Policy Assistant Professor Sharon Lind co-organized the minor and has spent a great deal of time planning this particular course with a team of faculty and outside industry advisors, which, she stresses, has been designed not only for college students but could also be a great college start for high school juniors and seniors as well. “For high school students, what I love about this class, is that they’re getting their feet wet with a college credit,” Lind says. Introduction to Alaska Native Business has actually been a course for two years; this fall will be its third iteration. The primary drive of the course is to introduce students to business in general and Native Alaskan nonprofit and for-profit organizations specifically. “It’s definitely giving them the big picture: What’s out there; what does it look like; and what do you need to know,” Lind says.

Day 1 Session In the morning session of Day 1, students are given an introduction and overview of Alaska Native Corporations, including information about business practices unique to Alaska Native Corporations such as the Alaska Native Claims Settlement Act, or ANCSA, sections 7(i) and 7(j) resource sharing 34

provisions. Lind is the speaker for part of this introduction session, but guest speakers from the industry are invited as well. Last year, Cook Inlet Region, Inc. Vice President and General Counsel Bruce Anders gave students a better understanding of the unique Alaska Native Corporation governance structure. The Day 1 afternoon session involves a trip to the Cook Inlet Tribal Council (CITC) office, which CITC volunteered for the first time last year. Once there, students are provided lunch in an on-site meeting room, after which they will be given a tour of the CITC building. Last year’s tour included a look at KNBA, a Koahnic Broadcast Corporation radio station. After the tour, students have the opportunity to learn from a Leadership Panel with distinguished leaders of various Alaska Native Corporations.

Day 2 Session Because of the week-long break between classes, Day 2 begins with an overview of what was learned the previous Friday. Following the review in the morning session, students will hear from Jeff Kinneeveauk, president and CEO of ASRC Energy Services, who also spoke last year. “He was amazing,” Lind says. “What was so amazing about him is that he was so relatable. The students could relate to him immediately. He talked about his challenges in childhood and the students in the class all had similar stories. It was powerful.” The morning session will end with an overview of general business etiquette and communication skills. Lind says, “Daniel Mitchell [KPMG LLP] educates the students on proper etiquette: What do you do at a business lunch? What fork do you use? What lapel do you put your nametag on?” After the lecture, students will have the opportunity to practice their newfound skills. They are taken to an on-campus restaurant. “It was great to see the stu-

“The goal is: when they go out in the Anchorage business community, they have an understanding of Alaska Native organizations.”

—Sharon Lind Assistant Professor, UAA College of Business and Public Policy

dents apply their new skills, like waiting until everyone was served before eating,” Lind says. “Every student that I talked to after this function said they had never experienced fine dining before in their life.” Last year’s lunch was paid for by the Aleut Corporation, which will sponsor it again this year. After the lunch, the afternoon session of Day 2 focuses on mentoring, primarily through a Speed Mentoring activity. Lind says that this activity is done in partnership with the Alaska Native Professional Association, a 501(c)(3) nonprofit organization with the mission to “build relationships, leadership, and community involvement among Alaska Native professionals and organizations.” Last year, seventeen volunteers from the Association, including an attorney and a CEO, came to participate. “The kids spend five minutes with each mentor, and then they have to switch,” Lind says, and the process continues until every student has met with every mentor. During those five minutes, students have an opportunity oneon-one to ask questions, get feedback, and be face-to-face with current members of Alaska’s business community. “It gives them a flavor of what’s out there,” Lind says, “and it’s so important for these students to hear from professionals first-hand.” The Alaska Native Professional Association will partici-

Alaska Business Monthly | October 2014 www.akbizmag.com

pate again in this year’s Speed Mentoring exercise. The Day 2 afternoon session will end with a talk and reception. Lind says this specific course was proposed by Daniel Mitchell and KPMG, a US audit, tax, and advisory services firm. The goal from the beginning had been to reach out to high school students, but the logistics of doing so made that impractical. So, UAA developed this one credit course. “The one-credit course turned into a required introductory class for the new minor,” Lind says. “ Early on we realized how powerful this class is and will now use it to introduce students to this area of study.”

Better-Equipped Workforce KPMG’s goal from the beginning was to have students enter the workforce that were better equipped for their daily workload by having a foundational understanding of the types of companies they would be working with. For students with plans to work in any sector of the Anchorage business community, this one credit course gives valuable insight into the Alaska Native corporate structure and culture of some of the largest players in the Anchorage—and Alaska—economy. “The goal is: when they go out in the Anchorage business community, they have an understanding of Alaska Native organizations—a clear understanding of why they’re here, how they work together, and how it affects Alaska,” Lind says. “This is going to attract a large Native Alaskan population, but we have also already seen many non-Alaska Native students that are very interested as well. I think the mix makes the classroom experience that much richer.” Lind firmly believes in the positive impact this class, and the minor, can have on preparing students for the Alaska business sector. “It’s a lot of work putting these two days together; but when you watch it play out, it’s worth every minute of planning,” she says. Students can enroll in the class online at uaa.alaska.edu any time before it takes place. Attendance is required all day for both days, and the cost is $174. R Tasha Anderson is the Assistant Editor at Alaska Business Monthly. www.akbizmag.com

PreParing today’s alaska Business student for the future! UAA’s College of Business and Public Policy is developing curriculum that is relevant to a new generation of students. • A minor in Alaska Native Business Management can now be declared. • Alaska Policy Frontiers, taught by Visiting Distinguished Professor Willie Hensley, is available again Spring 2015.

Sharon Lind 907-786-4166 | sglind@uaa.alaska.edu www.uaa.alaska.edu/cbpp

Student Advising Centrer 907-786-4100 | sac@uaa.alaska.edu UAA is an EO/AA employer and educational institution.

October 2014 | Alaska Business Monthly

AGRICULTURE

Thriving, Varied, Mat-Su Farms Valley farmers feed Alaskans locally By Tasha Anderson

Above: Harvesting head lettuce at the VanderWeele farm. Left: Ben VanderWeele (right) describing agriculture in the Mat-Su Valley.

riving through downtown Wasilla or Palmer, it’s sometimes easy to forget that the Matanuska-Susitna Valley began in many ways as an agricultural colony. But, just a few steps off the main road, there are many farms producing fresh meat, dairy, and produce for hungry Alaskans.

VanderWeele Farm VanderWeele Farm is currently operated by Ben and Suus VanderWeele; the family farm also employs all three of their children. It produces potatoes, carrots, broccoli, cauliflower, Brussels sprouts, red and green cabbage, various lettuce varieties, kale, onions, beets, and other vegetables. The majority of VanderWeele vegetables are grown from transplants, which are started in a green house. After thirty-three days, they’re transplanted outside. The exceptions are carrots and radishes, which are grown from seed sown directly in the ground. Many have the misconception that farmers plant once, wait a while, and then harvest once, but VanderWeele, like other farms in the Mat-Su, plants and harvests continually throughout the season. “We seed every week and we plant every week,” Ben VanderWeele says. “Once we start selling, grocery stores do not want any lapses, you have to have [produce] all the time.” The first planting on the VanderWeele farm usually goes in about 36

Photos by Tasha Anderson

the May 1, which is necessary for multiple harvests but risky in Alaska weather. For example, in 2013 the VanderWeeles planted their potatoes in early May only for the weather to dump four inches of snow on the ground May 18. “You couldn’t see a single plant,” VanderWeele says. “We thought we’d lost the works, but it did ok.” Despite the challenges, VanderWeele is successful in getting produce out of the ground and ready to sell. CarrsSafeway, Fred Meyer, Wal-Mart, and Three Bears all stock VanderWeele produce, in addition to a few other wholesalers and restaurants. VanderWeele does have one unique buyer, and that’s the Alaska Chip Company, owned by Ralph and Darcy Carney. Ralph Carney approached VanderWeele about getting potatoes for the company, and VanderWeele provided him with a half a dozen varieties to

choose from. Carney settled on one, which VanderWeele Farm now produces exclusively for the Alaska Chip Company, one of the few agriculture processing plants located in Alaska. VanderWeele states easily that the produce coming from his farm is not certified organic. “The only reason we are not organic is that we use commercial fertilizer,” he says. All of the produce on his farm is pesticide free, a boon of the Alaska environment, which has few insects and is isolated from many agricultural diseases. He says that in years where the fields are arranged in such a way that there are trees nearby, they use an organic spray for aphids. “I am not organic, but I think this is some of the cleanest produce you can buy,” VanderWeele says.

Havemeister Dairy Havemeister Dairy was established in 1935 as part of the Colony project by Ar-

Alaska Business Monthly | October 2014 www.akbizmag.com

nold and Emma Havemeister. The dairy and farm is currently owned by Bob, one of their children, who still operates the property with his wife Jean, their family, and a few employees. In 2012, the Havemeisters decided to stop selling raw milk and instead sell it processed and packaged under the Havemeister name. Currently Havemeister Dairy has a herd of approximately 150 cows. Of those, eighty are milked twice a day. The cows’ diet consists of hay and about ten pounds of grain daily. The hay is grown on the four hundred acres of farmland worked by the Havemeisters. Because it’s necessary for the Havemeisters to use industrial fertilizer on the hay fields, technically the milk from the dairy cannot be certified organic. Weather wise, 2013 was a difficult year for hay, and the Havemeisters ended up needing to purchase $100,000 worth of hay to make up for a poor harvest. In order to sell packaged milk, it was necessary for the Havemeisters to build a milk processing plant on-site. Space specifications were sent to a company in the Lower 48 that assembled the plant entirely in a warehouse, took it apart, and shipped it north. Ty Havemeister,

Each cow on the Havemeister Dairy Farm has a number and a name. Photos by Tasha Anderson

Bob and Jean’s son, who runs the processing plant, put it together. According to Havemeister, the plant processes about 530 gallons of milk an hour. It produces three different milk products: 2 percent, nonfat, and whole milk, all of which are homogenized Grade A milk. The milk is packaged in jugs at a rate of about 900 gallons per hour using a nine-valve filler. The Havemeister Dairy currently only packages in one-gallon jugs—producing half-gallon jugs is too expensive.

One of the great advantages to having a dairy in the Valley is how quickly the milk appears on shelves after it’s been processed. “Best case scenario, milk from [Outside] is twelve days old,” Havemeister says. Milk that Havemeister Dairy produces is milked on Monday and on the shelves in stores by the end of the week. Cream is a byproduct of the milk processing; the dairy doesn’t sell the cream to general customers, but they do sell

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Photos by Tasha Anderson

Seen above are the milking station (top left), milk bottling machinery (top right), and milk processing tanks (right). The cows are first brought into the milking station, twice daily, at 3:30 a.m. and 3:30 p.m. The milk is moved through and underground tube to the processing plant, where it is pasteurized and processed to remove the milk fat. Ty Havemeister then mixes the fat and processed milk to get skim, 2%, or whole milk, which is bottled on-site in gallon jugs.

Bushes Bunches Bushes Bunches has been in operation at one location or another since 1954. In 1988, the business was split into two branches, Bushes Bunches Gardens which sells flowers, shrubs, and berry plants, and Bushes Bunches Vegetable Stand, located on the Old Glenn Highway, which sells table vegetables: mostly potatoes and squash. The current owner, Bruce Bush, who runs the Bushes Bunches Vegetable Stand, has been “on the farm” since he was six years old. Bush says that through the sixties, before the business was split, the vegetable stand was selfservice because the Bushs couldn’t afford to pay someone to man it. “It was on the honor system, and we never got ripped off. We’d find notes saying, ‘I owe you two dollars,’ or, ‘You owe me three dollars.’ People kept track of their own lines of credit.” The vegetable stand has moved lo38

cations throughout the years. At one point it was on the Parks Highway, and it has been located on both sides of the Old Glenn Highway. Many of Bush’s customers can and process the food they buy. Bushes Bunches is planning to set up canning, freezing, and preparation classes at the vegetable stand during the winter months. One of Bushes Bunches specialties is the peanut potato, which Bush developed and named. He also farms blue potatoes, which he sells to wholesalers, in addition to eight other varieties of potatoes. Bushes Bunches also sells summer

squash, green zucchini, yellow zucchini, crookneck squash, onions, carrots, kale, collards, Swiss chard, celery, pickling and English cucumbers, golden and red beets, radishes, dill, broccoli, cauliflower, Brussels sprouts, spinach, arugula, romaine lettuce, red leaf and green leaf lettuce, and red and green tomatoes. Produce is available at their stand seasonally and is also sold to grocery stores and high-end restaurants in Alaska.

Little Pitchfork Ranch Todd Pettit is the owner of Little Pitchfork Ranch, which is a six hundred acre

Photo by Tasha Anderson

it to Evangelo’s Restaurant, an Italian dining restaurant located in Wasilla. Havemeister milk is also used throughout the state in local coffee shops and it is used to make local Alaska ice cream. Havemeister Dairy milk is available at Three Bears, Fred Meyer, CarrsSafeway, Steve’s Food Boy, and Cubby’s Marketplace.

Bushes Bunches Stand, located on the Old Glenn Highway, owned by the Bush family.

Alaska Business Monthly | October 2014 www.akbizmag.com

Photos by Tasha Anderson

ranch, and is a third generation farmer and rancher. His family has been farming in the Mat-Su Valley since the 1940s. “My grandparents raised cattle up here for about thirty-four years,” he says. “They used to lease up on Lazy Mountain; there’s a bowl that cuts up in there and our cattle would graze there all summer long.” Pettit lived in Anchorage and spent his summers on the ranch as a child; he moved to Alaska permanantly two years after graduating from high school. The ranch was actually phasing out the cattle at that time, “but I wasn’t done with animals,” Pettit says. He decided that instead of cattle, he’d have buffalo, and in 1998 he started his buffalo herd with four ten-month old heifers and a bull calf he got from the Edmonton area in Canada. “I grew up with those calves; I learned from them and they learned from me.” At its peak, Pettit’s buffalo herd got up to about one hundred buffalo, though in recent years he generally kept the herd limited to about eighty. He says that a herd of eighty produces roughly twenty-five calves a year. “I got to the point that, however many calves I got,

Fresh produce available at Bushes Bunches Stand, sold by the pound.

that’s how many I’d butcher each year at two years of age,” after pulling out the best females to continue breeding. Pettit also has a small elk herd that started as a bull and two female calves. Fifteen years later, the bull is still around and going on eighteen years old. Pettit has historically kept his elk heard in the range of twelve to twentyfive head. His were not the first elk in the state, he says, as those came in the late eighties. The Department of Natural

Resources required Pettit to build an eight-foot game fence as part of the licensing process to farm the elk because elk can survive in Alaska on their own and have, in fact, been successfully transplanted to Afognak and other Southeast islands. Last year was also disappointing for Little Pitchfork Ranch in terms of hay production. Pettit says the main market in Alaska is hay for horses. For the horses to be able to consume the hay, the moisture content must be at least down

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Todd Pettit, owner of the Little Pitchfork Ranch, with a following of buffalo.

to 12 to 18 percent, which can be difficult with uncooperative, wet weather— the exact problem encountered last year. Because of losses, Pettit culled down his buffalo herd, which is now comprised of a little more than forty buffalo; the elk herd he is currently maintaining at eleven or twelve. Pettit does sell the butchered animals, either by the side or as a whole animal.

There’s a nationwide movement to eat responsibly, eat locally, and eat fresh. Fortunately for Alaskans, eating produce fresh out of the ground is an option due to our thriving agriculture industry in the Mat-Su Valley. While Alaska may be known far and wide for its horsesized pumpkins, local Alaskans should all be aware that kitchen sized, quality vegetables are available any day. R Tasha Anderson is the Editorial Assistant at Alaska Business Monthly.

Photos by Tasha Anderson

Pyrah’s Pioneer Peak U-Pick Farm While the Pyrah’s Pioneer Peak U-Pick Farm property was one of the original homesteads of the Colony Project, the Pyrahs are not the original family. They have been there for the last thirty-five years. Janet Dinwiddie, a member of the Pyrah family, says that the Pyrahs did originate the U-Pick experience on the property. “The benefits are on both sides: it means that you not only save money but the food is much fresher.” Dinwiddie says that the farm generally tries to set their prices at about half the

price of local stores. The farm grows thirty to thirty-five varieties of vegetables, including corn when the weather cooperates. “The only two that we have failed successfully at time and time again are eggplant and sweet potato,” Dinwiddie says. Alaskan summers, while full of sun, aren’t hot enough long enough to support them. People who come out to the farm are allowed to pick by the truckload or pick a salad for dinner. For the most part, produce is sold by the pound. The Pyrah family feels strongly about the value of education. All of the grown children that currently work the farm left the state to get degrees before returning, Dinwiddie says. This focus on education extends to the community, and the U-Pick farm happily arranges and conducts school tours in the fall and camp tours in the summer. “It helps to show kids where their food comes from… Then the kids get to pick their own bag of veggies to take home.” Beyond that, the Pyrahs have devel-

oped signs that are placed at the end of each row of vegetables, describing how to grow it, how to pick it, how to store it, and why it’s good to eat. One innovation Pyrah’s Pioneer Peak U-Pick farm is utilizing is hydroponics, specifically for strawberries. The system used at this farm is vertical, allowing seven thousand plants, which would normally take up acres of space, to be housed in an area the size of a large barn. Because the space is so much smaller, it can be fenced in, solving the problem of moose grazing on the sweet berries. “Moose would come in like it’s a salad bar—they take one bite out of the top of everything,” Dinwiddie says. The hydroponics also helps control weeds, pests, and birds. The fruit produced is clean and ready to eat. The farm did try to utilize the system for lettuce greens to form a salad mix, but it worked too well. “It was supposed to turn around every three to four weeks, but it grew back every six days, and we couldn’t keep up with it,” Dinwiddie says.

Above left: An example of one of the vegetable information signs, with a storage building and the hydroponic facility in the background. Above right: Hay and storage barn at Pyrah’s Pioneer Peak Farm. Right: Janet Dinwiddie, a member of the Pyrah family, explains a little about the UPick farm, the benefits of growing locally, and the innovations in place to combat the challenges of farming in Alaska during the Mat-Su Farm Bureau tour in July. 40

Alaska Business Monthly | October 2014 www.akbizmag.com

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ENERGY & CONSTRUCTION

Indigenous Building Techniques Cold Climate Housing Research Center goals—efficiency and sustainability By Will Swagel

laska has the toughest winter weather in the United States; and Fairbanks “enjoys” one of the more unforgiving climates in the state. Temperatures there can drop below minus fifty degrees in winter and soar above one hundred degrees in the summer. For home builders, Fairbanks provides an excellent place to test the efficiency of housing designs and building techniques in an exceptionally rigorous climate. And that’s just what they do at the Cold Climate Housing Research Center (CCHRC), located in Alaska’s second-biggest city. CCHRC was the brainchild of a group of members of the Alaska State 42

Home Building Association who recognized that Alaska needed building techniques that matched the realities of life in the state. “CCHRC was an idea that was shared among several of us in the building industry that we really needed to do research in Alaska and not just borrow technologies from Canada and the Lower 48,” says Jack Hébert, CCHRC’s president, CEO, and founding chairman. CCHRC receives strong support from the Alaska Housing Finance Corporation and from Alaska Native Corporations and regional nonprofits. Now fifteen years old, CCHRC staffers work on a dizzyingly wide range of

projects—testing home designs, building materials, construction methods, and heating and ventilation systems. Along with research in Fairbanks, CCHRC conducts projects across Alaska, from North Slope villages to the rain-soaked towns of the Panhandle.

Sustainable Northern Communities Hébert spent his early years wintering in the mountains of northwestern Arctic Alaska and his summers in the “old” Denali Park. His mentors were Alaska Natives and Alaskan pioneers, people with deep connections to the land. Hébert has spent nearly forty

Alaska Business Monthly | October 2014 www.akbizmag.com

Far left: Atmautluak prototype house built with easily shipped materials, without using any heavy equipment, and with local workers, shown framing the house with pre-made integrated walls and trusses. Left: Training a local workforce is a key factor in the sustainability of CCHRC’s work; here they are setting the sills on an adjustable foundation so the buildings can be leveled in the shifting soils. Photos courtesy of CCHRC

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years building homes in Interior Alaska, through his companies Taiga Woodcraft and Hébert Homes LLC, and still does. Even though he runs a research center, he describes himself as “someone who is happiest with the tool belt on.” In 2008, CCHRC began a program that merged the two sides of Hébert’s life. The Sustainable Northern Communities program was charged with working to provide affordable, energyefficient, healthy, and economically sustainable housing for both rural and urban Alaska. Since then, CCHRC has helped more than twenty Alaska villages combine traditional knowledge with twenty-first century techniques and www.akbizmag.com

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northrim.com October 2014 | Alaska Business Monthly

Photos courtesy of CCHRC

Workers installing coiling (left) for the ground source heat pump (above), which is installed in a CCHRC building in Fairbanks. Since last summer, it has been heating a part of the facility.

replaced with state-of-the-art waterless toilets. The building is super-insulated and equipped with a heat-recovery ventilation system to control humidity and air quality. CCHRC’s research sets the average energy use for a home in this region at about 1,000 gallons of heating fuel annually. The prototype houses use only 150 to 200 gallons per year. A short video on the Atmautluak project can be seen at CCHRC.org, the Center’s newly re-vamped website. Credit here

technologies to design and build homes for residents. In the southwest Alaska village of Atmautluak, for example, CCHRC worked with community members to design and build two prototype houses. Homeowners in the Yup’ik community of 277 are challenged by wet, unstable soils and high energy costs. Prior to building, CCHRC staffers consulted with village residents to include local knowledge in their planning. CCHRC states that “partnerships with local people are the key to the program’s success.” Hébert says that the local knowledge “can be as varied as the knowledge of the 44

change in climate and wind direction that people are observing in the area or the kinds of soils that appear to be more stable to seasonal flooding in their region. By doing enough [scientific] research, you might be able to find these out. “But by listening to people,” he says, “you can learn much more quickly.” The Atmautluak homes used premanufactured integrated trusses to make erecting the frame easier, needing only a small work crew and no heavy equipment. Each home has an adjustable foundation built on steel pilings to allow residents to keep the house level despite shifting soils. Honey buckets have been

A few other of CCHRC’s many projects: n Designing energy efficient homes in Galena to replace those damaged and destroyed by flood. This is part of a larger collaboration with FEMA and the state Department of Homeland Security and Emergency Management to design simple-toconstruct permanent emergency replacement housing that can be erected by local people or volunteers, use little energy, and are healthy for occupants. n Working with the Association of Village Council Presidents to build

Alaska Business Monthly | October 2014 www.akbizmag.com

two duplexes to house flight school students in Bethel. This could lead to a manufacturing plant in Bethel, making building components, such as integrated trusses, for homes to be assembled by local workers in Kuskokwim River villages. A supply network for building materials could be another part of the plan. “You start to create synergy in a region, where the activities that are needed for the housing industry all stay in that region,” Hébert says. n Working with the Tagiugiullu Nunamiullu Housing Authority to design homes in six North Slope villages with innovative foundation systems for the permafrost conditions in the high Arctic that are also extremely energy efficient. Hébert stresses that sustainability includes economic questions as well as building issues. Simply put, CCHRC seeks to build and maintain homes using local materials, when possible, and to train a local workforce in order to keep economic activity in the village. This trained crew can then be called upon

CCHRC’s President, CEO, and Founding Chairman Jack Hébert (center) is with two local workers at a project in Buckland. Photo courtesy of CCHRC

to construct or retrofit other energy efficient homes in the village or region. “Housing, nationwide, is one of the biggest engines of employment,” Hébert says. “We want to keep as much money [in the village] as possible.”

Cold Climate Sweet Home At CCHRC’s five-acre campus, built and designed by CCHRC on leased land from the University of Alaska in Fairbanks, staffers approach building en-

ergy-efficient homes from many directions. CCHRC’s research facility (LEED Platinum) is considered to be the most energy efficient building of its kind in the Circumpolar North. It’s easy to think of insulating a house, but what is the best way to do it? If too much warm air has direct contact with cold air, condensation and mildew are threats. Sealing all leaks in windows and walls saves heat, but the quality of the inside air can suffer. Heat leaking from a building

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October 2014 | Alaska Business Monthly

Photo courtesy of CCHRC

Workers install a raft foundation at the University of Alaska Sustainable Village. It is designed to keep heat from the house melting the permafrost beneath. Anchorage: 907.771.1300 Prudhoe Bay: 907.659.9056 www.deltaleasing.com

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can melt the permafrost beneath and cause the foundation to fail. Much of the work done at CCHRC involves testing different kinds of wall and floor designs. Hébert says one foundation design being tested involves the use of a foam “raft.” Home designs minimize heat loss to local winds and maximize solar gain. “Like any science or technology, building science is evolving and maturing,” Hébert says. Technological advances in mechanical systems are offering all sorts of new potential. Super insulated homes require a mechanical system to keep air fresh and of the right humidity. Newer units recover much of the heat from air being exhausted. Heat pumps are offering all sorts of new possibilities for home efficiency. Working like refrigerators in reverse, heat pumps use refrigerants in coils to pull heat from the outside air, ground, or water. These pumps can work with air or ground temperatures near freezing. CCHRC is studying a variety of heat pump configurations, says Research Engineer Robbin Garber-Slaght. Right now, there are about fifty ground source

www.akbizmag.com

heat pumps being used in the Fairbanks area, many by tapping into moving underground water. In the more moderate climes of Southeast Alaska, CCHRC is studying air source heat pumps that pull enough warmth from “cold” outside air to fully heat a home. Ground source heat pump systems are expensive—$20,000 and up for a home—says Garber-Slaght, but tax subsidies are available that can shave off about a third of the cost, and fuel savings can pay much of the rest of the cost over time. More versatile drilling techniques being perfected are also expected to significantly lower the cost of placing the transfer coils into the ground. With several towns in Southeast Alaska reaching the generating capacity of their power plants, CCHRC is studying the efficiency of air source heat pumps installed in Alaska to help inform utility managers so they can decide on matters of capital investments or further subsidies to customers.

houses has been considerable. A home in Anaktuvuk Pass uses 240 gallons of fuel per winter, instead of 1,000 gallons. A home in Quinhagak uses 180 gallons instead of more than 800. “Our belief is that the low-hanging fruit and the easiest to pick is energy efficiency,” Hébert says. “The higher your energy costs, the more of a driver it is. Then look at renewable sources of energy which are available all over the state—wind, sun, in-stream hydro, or biomass. And then look at fossil fuels and see how you can reduce their use. When you get a four-bedroom home down to 150 gallons of fuel oil a year, your footprint is pretty darn light. “We’re trying to get buildings, and homes in particular, to the point where they literally produce as much energy as they use,” he concludes. “The pieces and parts of those technologies are developing and maturing. We believe that even in Alaska’s harsh climate, we can demonstrate that that is possible.” R

Efficiency First Even without the use of heat pumps, the savings in CCHRC’s prototype

Alaskan author and journalist Will Swagel writes from Sitka.

October 2014 | Alaska Business Monthly

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ALASKA BUSINESS MONTHLY’S 2014 TOP 49ERS: TRENDING NOW

By Tasha Anderson

n 140 characters or less—Alaska Business Monthly’s Top 49ers have outdone themselves again. These Alaska businesses have met two important criteria to make Alaska Business Monthly’s Top 49ers list: they are at least 51 percent Alaskan-owned and they make a lot of money. The Top 49ers may trend in October, but they’re working year-round. Businesses that are owned and operated by Alaskans naturally provide jobs and an economic boon

www.akbizmag.com

here, which is why Alaska Business Monthly honors them year after year and will continue doing so as long as there are businesses to honor. Alaska Business Monthly’s Top 49ers are certainly going viral, spreading to economies not only in the Lower 48 but throughout the world—and bringing the benefits back home. The 2014 Top 49ers reported a collective total of $15.25 billion in gross revenues in 2013. They employ 25,951 people in October 2014 | Alaska Business Monthly

ALASKA’S TOP 49ERS 2014 | EXECUTIVE SUMMARY

Alaska and 73,556 worldwide through US and international operations. The number of Alaska employees has increased by 1.5 percent, and worldwide employee count has gone up by 1.8 percent. All in all, Alaska’s top companies continue moving forward.

Alaska Native Corporations And leading the march forward is Arctic Slope Regional Corporation (ASRC): it isn’t exactly trending this year as much as it has been trending for two decades, placing as the number one Top 49er for the twentieth year in 2014. Led by President and CEO Rex Rock Sr., this Alaska Native Corporation reported gross revenues of more than $2.5 billion, contributing 15 percent to the total gross revenues reported by the collective Top 49er body of companies. Revenue for the company is slightly down from last year’s $2.6 billion, but ASRC remains a leader of Alaskan-owned companies. ASRC is joined this year by eighteen Alaska Native Corporations, including the eleven other Alaska-based regional corporations and seven village corporations. Total revenue for the group is $10.97 billion. These organizations provide approximately seventeen thousand jobs to Alaskans and more than sixty thousand jobs worldwide. In accordance with the Alaska Native Claims Settlement Act, these economic drivers continue to meet their twofold mission of preserving Native Alaskan culture and providing economic opportunity for their Alaska Native shareholders. They have become an integral part of the Anchorage and Alaska economy, and are now even the subject of a University of Alaska system minor to study their unique corporate structures and business practices. While Alaska Native Corporations are considered a business sector, their reach touches every other industry represented by the top 49ers through subsidiaries and partnerships. Transportation and F.I.R.E. Alaska is a massive state with many rural communities, so it isn’t surprising that the second largest sector in the Top 49ers is Transportation. Transportation companies reported gross revenues of $1.25 billion for 2013, lower than the 2012 figure of $1.32 billion figure. The number of companies has remained consistent, but our 2014 list does include newcomer Vitus 50

Energy LLC, which reported $89.6 million in gross revenue, ranking at 37 this year. Vitus Energy manages the delivery of fuel from international and domestic sources to a variety of Alaska customers. This years’ list also has a new name, though it belongs to a familiar company—Ravn Alaska, formerly known as Era, is back again at number 22, reporting $160 million. The transportation sector employs a total of 4,339 people, with 2,533 located in Alaska, slightly lower than 2012’s 4,754 and 2,898, respectively. After transportation, the next Top 49ers category in terms of revenue is Finance, Insurance, and Real Estate, comprised of four companies. This sector employs a total of 2,782, of which 2,377 are located in Alaska. Employee numbers have gone up this year from reported 2013 numbers of 2,466 worldwide and 2,060 Alaskan employees. This workforce produced a reported collective revenue of $788 million for 2013, a $52 million increase from 2012 numbers. This is the first time in five years that Credit Union 1 is represented in this category, reporting $52 million and ranking at number 48. Credit Union 1 increased its 2013 revenue from $50 million reported for 2012.

Industrial Services, Utilities, and Construction The Industrial Services sector reported a 2013 revenue figure of $635 million, a huge increase from last years’ $515 million. This increase in revenue was accompanied by an increase in Alaska and worldwide employees, rising from 1,169 to 1,540 and 1,505 to 1,856, respectively. The rising revenue and employee figures were accomplished by the same five companies that were in the category last year, with each company holding the same or going up in the Top 49ers rankings. Following industrial services is Utilities, which has three companies reporting $502 million in 2013 gross revenues. While the number of employees between last year and this year has gone down, from 660 to 626, revenue has increased by $38 million. This sector is proudly Alaskan, with all employees located in-state. All three of these utilities, Matanuska Electric Association, Chugach Electric Association, and Homer Electric Association, are consistent Top 49er participants, appearing every year since before 2009. The next largest industry sector is Con-

struction. With four companies qualifying, the industry reported $410 million in 2013 revenues, $13 million more than 2012. New to this years’ construction section is Cornerstone General Contractors, which reported revenues of $50 million to Alaska Business Monthly for 2012. This ranked them just below the Top 49ers cutoff for 2013, but for 2014 they have shot past the cutoff at 49 to 38 with a reported $89 million in gross revenue, nearly 20 percent of reported construction sector gross revenue. The companies that comprise the construction sector are just one employee off from having a 100 percent Alaskan workforce of three hundred. Watterson Construction Company has one employee located Outside.

Retail and Wholesale Trade and Mining Retail and Wholesale Trade businesses account for $289 million of reported revenues. The three companies represented here remain consistent with last year and include two vehicle dealerships and one retail chain. The three companies’ workforce is mostly Alaskan, with 606 employees located in the state and 45 Outside, a total of 651. These numbers have increased since last year, up from 546 Alaska employees and 594 employees out-of-state. Revenue has also increased, coming up $6 million from 2012 revenues of $283 million. Usibelli Coal Mine, Inc. is once again the lone representative of the Mining industry in Alaska Business Monthly’s Top 49ers, reporting $103 million in revenue, which is slightly lower than last years’ revenue of $112 million. The company employs a total of 210 with 175 located in Alaska. Employee numbers have decreased over the year by approximately 20. Telecommunications and Manufacturing The Telecommunications sector is represented by MTA, Inc., which has an allAlaskan workforce of 297, which is 10 more employees than reported last year. MTA had a 2013 gross revenue total of $99 million, $3 million more than 2012. Builder’s Choice once again fills out the Manufacturing sector; its second appearance in the Top 49ers. Last years’ reported revenues were $58 million and Builder’s Choice was ranked at 45; the company

Alaska Business Monthly | October 2014 www.akbizmag.com

ALASKA’S TOP 49ERS 2014 | EXECUTIVE SUMMARY

has moved up to 41 this year with $73 million in revenue, an increase of approximately 26 percent. Builder’s Choice now employs 285, and of those 210 employees are in Alaska. Their overall workforce is up from last year when the company had 255 total employees, 185 in Alaska.

Engineering and Healthcare Following manufacturing is Engineering, again with one qualifying company this year: DOWL HKM, an Alaska Business Monthly’s Top 49ers regular. DOWL reported 2013 gross revenues of approximately $62 million, a $3 million increase over 2012’s $59 million. The company has also increased its Alaska and worldwide employees from 149 to 175 and 360 to 415, respectively. The final Alaska Business Monthly’s Top 49ers business sector is Healthcare, a new sector for the 2014 list. Geneva Woods provides healthcare services in homes and assisted living facilities, including pharmacy services, medical equipment, specialty rehab, home infusion, and respiratory services. This new sector reported a 2013 gross revenue of $60 million and reported to Alaska Business Monthly 2012 revenues of $39 million, demonstrating Geneva Woods’ significant one-year growth. It employs 250 people worldwide with 190 in Alaska. Geneva Woods ranks 45 its first year on the Top 49ers list. Trending Top 49ers Alaska Business Monthly would like to congratulate all of our returning businesses and send an especially enthusiastic welcome to those Top 49ers absent from last year’s list that are included this year— either making it as a Top 49er for the first time or returning—we’re sure that we’ll see you again. Those companies are Cornerstone General Contractors, Inc., Credit Union 1, Cruz Companies, Geneva Woods, Roger Hickel Contracting, Inc., Sitnasuak Native Corporation, and Vitus Energy LLC. Alaskan-owned businesses are moving forward every year with more employees, higher revenue, and new opportunities. While #Top49ers may trend up and down, these Alaska businesses are only rising to new heights. R Tasha Anderson is the Editorial Assistant at Alaska Business Monthly. www.akbizmag.com

October 2014 | Alaska Business Monthly

ALASKA’S TOP 49ERS 2014 | GROSS REVENUES & ALASKA JOBS

2013 Gross Revenue in Millions $15,266 Total ■ Alaska Native Corporations: $10,968 Million—71.85% ■ Transportation: $1,254 Million—8.22% ■ Finance, Insurance, Real Estate: $788 Million—5.16% ■ Industrial Services: $655 Million—4.29% ■ Utilities: $502 Million—3.29% ■ Construction: $411 Million—2.69% ■ Retail & Wholesale Trade: $290 Million—1.90% ■ Mining: $103 Million—0.67% ■ Telecommunications: $99 Million—0.65% ■ Manufacturing: $73 Million—0.48% ■ Engineering: $62 Million—0.41% ■ Healthcare: $60 Million—0.39%

■ Alaska Native Corporations—16,922 ■ Transportation—2,533 ■ Finance, Insurance, Real Estate—2,377 ■ Industrial Services—1,540 ■ Utilities—626 ■ Construction—300 ■ Retail & Wholesale Trade—606 ■ Mining—175 ■ Telecommunications—297 ■ Manufacturing—210 ■ Engineering—175 ■ Healthcare—190

2013 Alaska Jobs 25,951 Total

2012 Gross Revenue in Millions $16,072 Total ■ Alaska Native Corporations: $11,838 Million—73.67% ■ Transportation: $1,323 Million—8.23% ■ Finance, Insurance, Real Estate: $737 Million—4.59% ■ Industrial Services: $516 Million—3.21% ■ Utilities: $464 Million—2.89% ■ Construction: $397 Million—2.47% ■ Retail & Wholesale Trade: $283 Million—1.76% ■ Travel & Tourism: $187 Million—1.16% ■ Mining: $112 Million—0.70% ■ Telecommunications: $96 Million—0.60% ■ Engineering: $59 Million—0.37% ■ Manufacturing: $58 Million—0.36%

2012 Alaska Jobs 25,792 Total

■ Alaska Native Corporations—17,105 ■ Transportation—2,898 ■ Finance, Insurance, Real Estate—2,060 ■ Industrial Services—1,169 ■ Utilities—660 ■ Construction—452 ■ Retail & Wholesale Trade—546 ■ Travel & Tourism—86 ■ Mining—195 ■ Telecommunications—287 ■ Engineering—149 ■ Manufacturing—185

Alaska Business Monthly | October 2014 www.akbizmag.com

ALASKA BUSINESS MONTHLYâ&#x20AC;&#x2122;S

TOP 49ERS DIRECTORY

Arctic Slope Regional Corporation Classification: Alaska Native Corporation Principal Activities: ASRC has six major business segments; petroleum refining and marketing, energy support services, construction, government services, industrial services and resource development.

Top 49er Rank in 2013: 1 Change in Rank from 2013: Same Change in Revenue from 2012: Down 3.93%

Gross Revenue

2013 $2,525,615,000 2012 $2,628,929,000 2011 $2,549,993,000 2010 $2,331,681,000 2009 $1,945,058,000

Subsidiaries: ASRC Energy Services Inc.; ASRC Federal Holding Company, LLC; ASRC Construction Holding Company; Eskimos, Inc.; Tundra Tours, Inc.; Petro Star, Inc.; Alaska Growth Capital; Little Red Services Inc.; Petrochem Inc.

Recent Newsworthy Events: Petrochem, originally a subsidiary of ASRC Energy Services became a stand-alone subsidiary of ASRC as of January 1st, 2014. On May 21st, 2014 ASRC announced the acquisition of Little Red Services, Alaska Employees: $3,000,000,000 4,175 Inc. to join the ASRC family of $2,500,000,000 companies. Worldwide Employees:

Rex A. Rock Sr. Pres./CEO

10,082

41% Alaskan Workforce

$2,000,000,000 $1,500,000,000 $1,000,000,000

Established 1972 $500,000,000 $0

2009

2010

2011

2012

2013

PO Box 129, Barrow AK 99723 Phone: 907-852-8633 Fax: 907-852-5733 asrc.com

Alaska Business Monthly | October 2014 www.akbizmag.com

“When you study something you love, you never know where it’s going to take you. I’m proud to job train with BBNC, where building careers is as important as developing Alaska’s natural resources in a sustainable way.” — Sarah Smith, BBNC Shareholder and Job Shadow Participant at Bristol Alliance of Companies

Building Careers

ALASKAâ&#x20AC;&#x2122;S TOP 49ERS 2014 | TOP 49ERS DIRECTORY

Bristol Bay Native Corporation Classification: Alaska Native Corporation Principal Activities: Diversified holding company; construction; government services; oilfield and industrial services; petroleum distribution; and tourism. Find us on Facebook at: facebook.com/pages/Bristol-Bay-NativeCorporation

Jason Metrokin Pres./CEO

Top 49er Rank in 2013: 2 Change in Rank from 2013: Same Change in Revenue from 2012: Down 6.42%

Gross Revenue

2013 $1,835,894,000 2012 $1,961,780,000 2011 $1,965,507,000 2010 $1,667,200,000 2009 $1,391,571,000

Subsidiaries: Eagle Group; STS-Glacier Group; SpecPro Group; Vista Group; Business Resource Solutions, LLC; Bristol Alliance; CCI Alliance; SES Group; Bristol Bay Resource Solutions, LLC; Kakivik Asset Management, LLC; CCI Industrial Services, LLC; Peak Oilfield Service Company LLC; PetroCard, Inc.; Bristol Bay Mission Lodge, LLC

Recent Newsworthy Events: Named one of the Top 50 STEM Workplaces by the American Indian Science and Engineering Societyâ&#x20AC;&#x2122;s Winds of Change Magazine Alaska Employees: $2,000,000,000 for the second year in a row. 1,503 Worldwide Employees: 3,800

40% Alaskan Workforce

$1,500,000,000

$1,000,000,000

Established 1972 $500,000,000

2009

2010

2011

2012

2013

111 W. 16th Ave., Suite 400 Anchorage AK 99501 Phone: 907-278-3602 Fax: 907-276-3924 info@bbnc.net bbnc.net

Alaska Business Monthly | October 2014 www.akbizmag.com

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ALASKA’S TOP 49ERS 2014 | TOP 49ERS DIRECTORY

NANA Regional Corporation Inc. Classification: Alaska Native Corporation Principal Activities: Resource development; land management; engineering and construction; information technology and telecommunications; facilities management and logistics; real estate and hotel development.

Top 49er Rank in 2013: 3 Change in Rank from 2013: Same Change in Revenue from 2012: Down 5.56%

Subsidiaries: NANA Development Corporation

Marie N. Greene Pres./CEO

Recent Newsworthy Events: 25 years of the Red Dog Mine in Alaska. NANA has received $1 billion in revenues since mining began and distributed $608 million of that to other regions via the 7(i) sharing provisions of ANCSA. Since 1989, NANA shareholders working at the mine have earned $392.2 million in collective wages

Alaska Employees: 5,049 Worldwide Employees: 15,476

33% Alaskan Workforce

Gross Revenue

2013 $1,700,000,000 2012 $1,800,000,000 2011 $1,500,000,000 2010 $1,600,000,000 2009 $1,260,000,000

$2,000,000,000

$1,500,000,000

$1,000,000,000

Established 1972

$500,000,000

2009

2010

2011

2012

2013

PO Box 49, Kotzebue AK 99503 Phone: 907-442-3301 Fax: 907- 442-4161 news@nana.com nana.com/regional

Fort Knox Stewardship in Action

The way we see things, stewardship extends well beyond protecting land and water.

It’s also about taking care of our people. That’s why we invest in advanced training, safety, and modern mining technology. The return? We have the best people in the industry working for us. Fort Knox places high value in community stewardship. We buy locally, hire locally and we’re active in charitable giving, and our people volunteer in many civic and community groups. And, as far as protecting the land and water, our record stands on its own. At Fort Knox, responsible stewardship is part of how we do business every day.

Fairbanks Gold Mining Inc. A Kinross company

kinross.com 58

Alaska Business Monthly | October 2014 www.akbizmag.com

ALASKAâ&#x20AC;&#x2122;S TOP 49ERS 2014 | TOP 49ERS DIRECTORY

Chenega Corporation Classification: Alaska Native Corporation Principal Activities: Professional services contracting for federal government, including information technology, security services, logistics, training, intel and military ops, telecommunications, environmental services, healthcare solutions and light manufacturing. Commercial services include tourism and electrical contracting.

Charles W. Totemoff Pres./CEO

Gross Revenue

2013 $1,044,000,000 2012 $1,100,000,000 2011 $1,100,000,000 2010 $1,100,000,000 2009 $1,077,000,000

Recent Newsworthy Events: During March 2014 Chenega was featured prominently in several events commemorating the 50th anniversary of the 1964 earthquake when 26 of the Chenega people, over one-third of the community, lost their lives as the island Village of Chenega was destroyed by tsunamis generated by the 9.2 magnitude quake

Alaska Employees: 440 Worldwide Employees: 5,360

$1,200,000,000 $1,000,000,000 $800,000,000 $600,000,000

Established 1974

$400,000,000 $200,000,000

Alaskan Workforce

Top 49er Rank in 2013: 4 Change in Rank from 2013: Same Change in Revenue from 2012: Down 5.09%

2009

2010

2011

2012

2013

3000 C St., Suite 301 Anchorage AK 99503-3975 Phone: 907-277-5706 Fax: 907-277-5700 info@chenega.com chenega.com

Lynden Inc. Classification: Transportation Principal Activities: Lynden capabilities include truckload, less-than-truckload, scheduled and chartered barges, air freighters, domestic and international forwarding, remote site construction, bulk commodities hauling, hovercraft and multi-modal logistics.

Top 49er Rank in 2013: 5 Change in Rank from 2013: Down 1 Change in Revenue from 2012: Down 1.13%

Gross Revenue

2013 $875,000,000 2012 $885,000,000 2011 $850,000,000 2010 $720,000,000 2009 $680,000,000

Subsidiaries: Alaska Marine Lines; Alaska West Express; Bering Marine; Lynden Air Cargo; Lynden International; Lynden Logistics; Knik Construction Co. Inc.; Lynden Transport Inc.

Recent Newsworthy Events: The Lynden family of companies is pleased to welcome Northland Services, a marine transportation company providing shipping between Seattle, Alaska and Hawaii.

Jim Jansen Chairman

Alaska Employees: 788 Worldwide Employees: 2,540

$1,000,000,000 $800,000,000 $600,000,000

Alaskan Workforce

$400,000,000

Established 1906

$200,000,000 $0

2009

2010

2011

2012

2013

6641 S. Airpark Pl., Anchorage AK 99502 Phone: 907-245-1544 Fax: 907-245-1744 information@lynden.com lynden.com

Alaska Business Monthly | October 2014 www.akbizmag.com

ALASKAâ&#x20AC;&#x2122;S TOP 49ERS 2014 | TOP 49ERS DIRECTORY

Chugach Alaska Corporation Classification: Alaska Native Corporation

Top 49er Rank in 2013: 6 Change in Rank from 2013: Down 1 Change in Revenue from 2012: Down 14.10%

Principal Activities: Wide-ranging services for federal and commercial clients including facilities management and maintenance, construction, technical and IT, oil and gas and education services.

Gabriel Kompkoff CEO

Gross Revenue

Subsidiaries: Chugach Alaska Services, Inc.; Chugach Federal 2013 $609,000,000 Solutions, Inc.; Chugach Government Services, Inc.; Chugach 2012 $709,000,000 2011 $766,000,000 Industries, Inc.; Chugach Information Technology, Inc.; Chugach 2010 $936,975,000 McKinley, Inc.; Chugach Management Services, Inc.; Chugach 2009 $1,105,265,000 Support Services, Inc.; Chugach World Services, Inc.; Defense Base Services, Inc.; Falcon International, LLC; Wolf Creek Federal Services, Inc.; Chugach Education Services, Inc.; Heide and Cook, LLC; Chugach Systems Integration, LLC; Chugach Commercial Holdings, Inc.; Chugach Construction Services, LLC; Chugach Government Solutions, LLC; Chugach Training and Educational Solutions, LLC

Recent Newsworthy Events: Held annual Nuuciq Spirit Camp in July with shareholder Elders and youth. The camp is designed to raise awareness of the origin and history of the people in the Prince William Sound and to heighten Alaska Employees: $1,200,000,000 awareness of their history and culture.

500 Worldwide Employees: 4,600

$800,000,000 $600,000,000

Established 1972

$400,000,000 $200,000,000

Alaskan Workforce

$1,000,000,000

2009

2010

2011

2012

2013

3800 Centerpoint Dr., Suite 1200 Anchorage AK 99503-4396 Phone: 907-563-8866 Fax: 907-563-8402 communications@chugach.com chugach.com

Afognak Native Corp./Alutiiq Classification: Alaska Native Corporation

Top 49er Rank in 2013: 7 Change in Rank from 2013: Down 1 Change in Revenue from 2012: Down 1.61%

Principal Activities: Government contractingConstruction, logistics support services, security/law enforcement, operations/maintenance services, youth training services, IT/technical support services, oilfield services, leasing and bio-renewable energy.

Gross Revenue

Subsidiaries: Community Power Corporation; Afognak Leasing, LLC; Afognak Oilfield Services LLC; Alutiiq Oilfield Solutions LLC

2013 $526,000,000 2012 $534,610,000 2011 $711,080,000 2010 $783,000,000 2009 $766,000,000

Recent Newsworthy Events: 57 Scholarships awarded to Shareholder youth totaling $272,212. Completed construction of new 11,000 sq. ft. headquarter building in Kodiak on Near Island, self-performed project with wholly owned Alaska Employees: $800,000,000 186 construction subsidiary

Greg Hambright Pres./CEO

Worldwide Employees: 4,500

$700,000,000

$600,000,000 $500,000,000

$400,000,000

Alaskan Workforce

$100,000,000

4 62

$300,000,000

Established 1977

$200,000,000

2009

2010

2011

2012

2013

215 Mission Rd., Suite 212 Kodiak AK 99503 Phone: 907-762-9457 Fax: 907-486-2514 info@alutiiq.com afognak.com

Alaska Business Monthly | October 2014 www.akbizmag.com

We work hard here ...

so we can thrive here

The Ahtna Region

Remote camp on Mt. Akwe, near Yakutat, AK

Ahtna Traditional Second Chief Fred Ewan

As the business holding company of Ahtna, Inc., an Alaska Native Regional Corporation based in Glennallen, Alaska, Ahtna Netiye’ is strongly committed to ensuring the prosperity of our Ahtna shareholders through the revenues and profits we acquire from our business operations. Not only are we working hard to help our clients achieve success in their business ventures, no matter how far or remote those ventures may be, we are also bringing benefits and economic opportunities back home to our people and region.

That’s just how we do business.

Ahtna Heritage Dancers

Netiye’, Inc.

Our Values Unite Us; Our Customers Sustain Us; Our Companies are Prosperous.

110 W 38th Street, Suite 100B | Anchorage, AK 99503 PH: (907) 868-8250 | FAX: (907) 868-8285

Learn more about doing business with Ahtna at www.ahtna-inc.com

Caribou near Cantwell, AK

ALASKA’S TOP 49ERS 2014 | TOP 49ERS DIRECTORY

Calista Corporation Classification: Alaska Native Corporation Principal Activities: Defense contracting; full IT-telecom technical services; remote/camp services; environmental remediation-consulting; construction; advertising/ marketing; heavy equipment; drilling services; rock quarry material; tug-barge.

Top 49er Rank in 2013: 8 Change in Rank from 2013: Down 1 Change in Revenue from 2012: Down 8.74%

Gross Revenue

2013 $368,914,000 2012 $404,231,000 2011 $300,498,000 2010 $230,574,000 2009 $203,023,390

Subsidiaries: Ookichista Drilling Services, Inc; Yulista Aviation, Inc.; Yulista Management Services, Inc.; Y-Tech Services, Inc.; Chiulista Services, Inc.; Brice Incorporated; Tunista, Inc.; Tunista Construction, LLC; Tunista Services, LLC; Yukon Equipment, Inc.; Futaris (Fomerly Alaska Telecom, Inc.); Solstice Advertising; Sequestered Solutions; Brice Construction; Brice Marine; Brice Equipment; Calista Heritage Foundation; Calista Real Estate; STG Incorporated; Aulukista, LLC; Yulista Tactical Services, LLC; E3 Environmental, LLC; Qagan Lands, LLC

Andrew Guy Pres./CEO

Alaska Employees: 450 Worldwide Employees: 1,600

Recent Newsworthy Events: 2013 pretax net income up. Investment in international fiber optic project. Acquired STG Incorporated.

$500,000,000 $400,000,000 $300,000,000

Established 1972

$100,000,000

Alaskan Workforce

$200,000,000

2009

2010

2011

2012

2013

301 Calista Ct., Suite A Anchorage AK 99518-3028 Phone: 907-279-5516 Fax: 907-272-5060 calista@calistacorp.com calistacorp.com

Alaska USA Federal Credit Union Classification: Finance, Insurance, Real Estate Principal Activities: Financial services for consumers and businesses, including: savings, checking and loans; deposits; investments; mortgage and real estate; title and escrow; and insurance, personal and business. Subsidiaries: Alaska USA Mortgage Co.; Alaska USA Insurance Brokers LLC; Alaska USA Title Agency

William Eckhardt Pres.

Top 49er Rank in 2013: 10 Change in Rank from 2013: Same Change in Revenue from 2012: Down 0.24%

Gross Revenue

2013 $337,200,000 2012 $338,000,000 2011 $311,000,000 2010 $302,000,000 2009 $312,000,000

Recent Newsworthy Events: 2013: Small Business Administration SBA/504 AK Community Lender of the Year; Anchorage Daily News - Best FI; Anchorage Press â€“ Best FI; Juneau Empire Best CU; Fairbanks Daily News Miner- 3rd in Best Bank/Credit Union 2014: Fairbanks Daily News Miner - 2nd in Best CU; Anchorage Press â€“ Best FI

Alaska Employees: 1,340 Worldwide Employees: 1,739

$350,000,000 $300,000,000 $250,000,000 $200,000,000

Alaskan Workforce

$150,000,000

Established 1948

$100,000,000 $50,000,000 $0

2009

2010

2011

2012

2013

PO Box 196613 Anchorage AK 99519-6613 Phone: 907-563-4567 Fax: 907-929-6593 facebook.com/alaskausafcu alaskausa.org

Alaska Business Monthly | October 2014 www.akbizmag.com

ALASKA’S TOP 49ERS 2014 | TOP 49ERS DIRECTORY

Ukpeaġvik Iñupiat Corporation (UIC) Classification: Alaska Native Corporation Principal Activities: Architecture, engineering, surveying, construction, regulatory consulting, marine operations, information technology, maintenance and manufacturing, logistics, arctic science support, car rental, and auto repair.

Anthony Edwardsen Pres./CEO

Top 49er Rank in 2013: 11 Change in Rank from 2013: Same Change in Revenue from 2012: Up 2.67%

Gross Revenue Subsidiaries: Bowhead Manufacturing Company; Bowhead Support 2013 $320,716,000 Group; Bowhead Transport Company; C-Port Marine Services; SIKU 2012 $312,380,000 Construction; UIC Construction; UIC Foundation Inc.; UIC Real Estate Management; UIC Science; Bowhead Information Technology Service; 2011 $278,890,000 Bowhead Systems Management; Bowhead Science and Technology; 2010 $270,612,000 Bowhead Logistics Solutions; Bowhead Communications Services; 2009 $292,317,000 Bowhead Professional Solutions; UIC Iglu Services; Kautaq Construction Services; Ukpik; Bowhead Manufacturing Technologies; Bowhead Communication Services; Bowhead Total Enterprise Solutions; Bowhead Technical Solutions; Bowhead Innovative Products and Solutions; UIC Business Enterprises; UIC Arctic Response Services; UIC First Nations Construction Services; Rockford Corporation; Qayaq Marine Transportation Company; Bowhead Operations and Maintenance Solutions; Bowhead Integrated Support Services; Bowhead Mission Solutions

Recent Newsworthy Events: UIC saw a 41% increase in net income after taxes and 12% in stockholder equity in 2013. They distributed $8.5 million in Employees: $350,000,000 shareholder dividends in under 4 years and paid over $9.7 million in wages and benefits $300,000,000 to shareholders in 2013.

Alaska 588 Worldwide Employees: 3,340

$250,000,000 $200,000,000

$100,000,000

Established 1973

$50,000,000

Alaskan Workforce

$150,000,000

2009

2010

2011

2012

2013

PO Box 890, Barrow AK 99723 Phone: 907-852-4460 Fax: 907-852-4459 info@uicalaska.com uicalaska.com

Doyon, Limited Classification: Alaska Native Corporation Top 49er Rank in 2013: 9 Change in Rank from 2013: Down 3 Principal Activities: Oilfield services; drilling and Change in Revenue pipeline infrastructure construction; government from 2012: Down 5.83% services; security; utility management; natural Gross Revenue resource development; facility and food services; 2013 $318,552,461 remote site support; engineering; construction. 2012 $338,276,000 2011 $468,000,000 Subsidiaries: Doyon Transitional, Inc.; Doyon Oil Field 2010 $459,000,000 Services, Inc.; Doyon Government Contracting, Inc.; 2009 $416,000,000 Doyon Natural Resources Development Corporation Recent Newsworthy Events: Doyon awarded a dividend to shareholders in 2013 for the 27th year in a row; Doyon Emerald and Alaska Anvil created Doyon Anvil in December; and Doyon has over 19,000 shareholders from 9,061 original shareholders; Doyon.

Aaron Schutt Pres./CEO

Alaska Employees: 1,348 Worldwide Employees: 2,238

$500,000,000 $400,000,000 $300,000,000

Alaskan Workforce

Established 1972

$200,000,000 $100,000,000 $0

2009

2010

2011

2012

2013

1 Doyon Pl., Suite 300 Fairbanks AK 99701-2941 Phone: 907-459-2000 Fax: 907-459-2060 info@doyon.com doyon.com Facebook, Twitter, LinkedIn

Alaska Business Monthly | October 2014 www.akbizmag.com

ALASKAâ&#x20AC;&#x2122;S TOP 49ERS 2014 | TOP 49ERS DIRECTORY

Chugach Electric Association, Inc. Classification: Utility Principal Activities: Through superior service, safely provide reliable and competitively priced energy. Recent Newsworthy Events: Completed Southcentral Power Projects.

Top 49er Rank in 2013: 13 Change in Rank from 2013: Same Change in Revenue from 2012: Up 14.36%

Gross Revenue

2013 $305,308,427 2012 $266,971,468 2011 $283,618,369 2010 $258,300,000 2009 $290,200,000

Bradley Evans CEO Alaska Employees: 300 Worldwide Employees: 300

$350,000,000 $300,000,000 $250,000,000 $200,000,000

100

Established 1948

$100,000,000 $50,000,000

Alaskan Workforce

$150,000,000

2009

2010

2011

2012

2013

5601 Electron Dr., Anchorage AK 99518 Phone: 907-563-7494 Fax: 907-562-0027 info@chugachelectric.com chugachelectric.com

The Wilson Agency LLC Classification: Finance, Insurance, Real Estate Principal Activities: We are strategic employee benefit consultants, offering advice on group health, life, disability, ADandD, key man insurance, ancillary or fringe benefits, retirement options and more. We take the time to understand your goals and then apply innovative solutions to help you achieve them.

Gross Revenue

2013 $267,195,622 2012 $254,273,068 2011 $244,694,207 2010 $205,440,336 2009 $205,826,042

Recent Newsworthy Events: For the fourteenth year, the Leading Producers Round Table of the National Association of Health Underwriters awarded The Wilson Agency the associationâ&#x20AC;&#x2122;s prestigious Soaring Eagle Award for achieving the greatest success in demonstrating exceptional professional knowledge and outstanding client service.

Lon Wilson Pres./CEO

Alaska Employees: 20 Worldwide Employees: 22

Alaskan Workforce

Top 49er Rank in 2013: 14 Change in Rank from 2013: Same Change in Revenue from 2012: Up 5.08%

$300,000,000 $250,000,000 $200,000,000 $150,000,000

Established 1964 $100,000,000 $50,000,000 $0

2009

2010

2011

2012

2013

3000 A St., Suite 400 Anchorage AK 99503 Phone: 907-277-1616 Fax: 907-274-7011 info@thewilsonagency.com thewilsonagency.com

Alaska Business Monthly | October 2014 www.akbizmag.com

ALASKAâ&#x20AC;&#x2122;S TOP 49ERS 2014 | TOP 49ERS DIRECTORY

Bering Straits Native Corporation Classification: Alaska Native Corporation Principal Activities: Government contracting, logistics, base operations support services, aircraft and airfield services, special training and security, management and consulting services, IT services, construction and renovation, communications.

Top 49er Rank in 2013: 17 Change in Rank from 2013: Up 2 Change in Revenue from 2012: Up 13.62%

Gross Revenue

2013 $242,000,000 2012 $213,000,000 2011 $206,000,000 2010 $190,336,771 2009 $162,300,000

Subsidiaries: Inuit Services Inc.; Bering Straits Aerospace Services LLC; Bering Straits Logistics Services LLC; Bering Straits Information Technology LLC; Bering Straits Technical Services LLC; Bering Straits Aki LLC; Eagle Eye Electric LLC; Ayak LLC; Global Support Services LLC; Global Management Services LLC; Iyabak Construction LLC; Global Asset Technologies LLC; Global Precision Systems LLC; Bering Straits Development Co.; Global Technical Services LLC; Golden Glacier, Inc.; 4600 Debarr LLC

Gail R. Schubert Pres./CEO

Recent Newsworthy Events: Distributes record dividend, forms Arctic Development Committee, completes Port Clarence economic feasibility study, acquires Arcticom.

Alaska Employees: 207 Worldwide Employees: 1,237

$250,000,000 $200,000,000 $150,000,000

Alaskan Workforce

Established 1972

$100,000,000

4600 DeBarr Rd., Suite 200 Anchorage AK 99508 Phone: 907-563-3788 Fax: 907-563-2742 media@beringstraits.com beringstraits.com

$50,000,000 $0

2009

2010

2011

2012

2013

Olgoonik Corporation Classification: Alaska Native Corporation Principal Activities: Specializing in construction, logistics and operations, security, environmental, and oilfield support services. Subsidiaries: Olgoonik Oilfield Services; Olgoonik Specialty Contractors; Olgoonik Machinery and Equipment; Kuk Construction; Olgoonik Logistics; O.E.S.; Olgoonik Management Services; Olgoonik Technical Services; Olgoonik Global Security; Olgoonik Diversified Services; Olgoonik Aerospace Services; Olgoonik Development; Olgoonik Solutions

Top 49er Rank in 2013: 18 Change in Rank from 2013: Up 2 Change in Revenue from 2012: Up 8.36%

Gross Revenue

2013 $215,200,000 2012 $198,600,000 2011 $178,400,000 2010 $133,000,000 2009 $135,000,000

Recent Newsworthy Events: Olgoonik Corp. and its subsidiaries support community activities, promote continuing education and provide shareholder jobs and scholarships. The recent construction of Wainwrightâ&#x20AC;&#x2122;s new Community Playground was a meaningful company project. Alaska Employees: $250,000,000 133 Worldwide Employees: $200,000,000 986

Hugh Patkotak Sr. Chairman and CEO

$150,000,000

Alaskan Workforce

$100,000,000

Established 1973

$50,000,000 $0

2009

2010

2011

2012

2013

3201 C St., Suite 700 Anchorage AK 99503 Phone: 907-562-8728 Fax: 907-562-8751 info@olgoonik.com olgoonik.com

Alaska Business Monthly | October 2014 www.akbizmag.com

Cook Inlet Region Inc. Classification: Alaska Native Corporation Principal Activities: Real Estate, Oilfield and Construction Services, Land and Resources, Energy Development, Environmental Services, Tourism and Hospitality, Government Contracting, and Private Equity and Venture Capital Investments.

Top 49er Rank in 2013: 15 Change in Rank from 2013: Down 2 Change in Revenue from 2012: Down 9.64%

Gross Revenue

2013 $214,930,000 2012 $237,849,000 2011 $200,800,000 2010 $188,300,000 2009 $79,893,000

Subsidiaries: Alaska Interstate Construction LLC; CIRI Alaska Tourism Corp. (CATC); CIRI Land Development Co. (CLDC); North Wind Group; Fire Island Wind LLC; Stone Horn Ridge Investors LLC; Cruz Energy Services LLC; Cruz Marine LLC; Weldin Construction LLC; Silver Mountain Construction LLC; CIRI Services Corporation Recent Newsworthy Events: Cook Inlet Region, Inc. began development of the first office tower in what will become the Fireweed Business Center. The 8.35-acre site at the corner of Fireweed Lane and the New Seward Highway will soon be home to CIRI’s corporate offices and upscale, commercial office space available for lease. Alaska Employees: $250,000,000

Sophie Minich Pres./CEO

1,319 Worldwide Employees: 1,909

$200,000,000 $150,000,000

Alaskan Workforce

$100,000,000

Established 1972

$50,000,000 $0

2009

2010

2011

2012

2013

PO Box 93330 Anchorage AK 99509-3330 Phone: 907-274-8638 Fax: 907-263-5183 info@ciri.com ciri.com

Get what your business needs with local equipment financing.

alaskausa.org/biz Better for business. www.akbizmag.com

October 2014 | Alaska Business Monthly

ALASKA’S TOP 49ERS 2014 | TOP 49ERS DIRECTORY

Koniag, Inc. Classification: Alaska Native Corporation Principal Activities: Koniag’s principal lines of business include commercial real estate investments; ANCSA natural resource management; and investments in various operating companies.

Top 49er Rank in 2013: 30 Change in Rank from 2013: UP 12 Change in Revenue from 2012: Up 56.42%

Gross Revenue 2013 $202,142,000 Subsidiaries: Angeles Composite Technologies, 2012 $129,234,000 Inc; Angayak Construction Enterprises, Inc.; Clarus 2011 $128,228,000 Technologies, LLC; Digitized Schematic Solutions, LLC; 2010 $149,550,000 Frontier Systems Integrator, LLC; Koniag Development 2009 $115,569,000 Corporation; Koniag Services, Inc.; Professional Computing Resources, Inc.; XMCO, Inc.; Dowland-Bach Corporation; Koniag Information Security Services, LLC; Granite Cove Quarry, LLC; Koniag Technology Solutions, Inc.; Nunat Holdings, LLC; Anderson Construction Company, LLC; Near Island Building, LLC; Karluk Elizabeth Perry Wilderness Adventures, Inc. dba Kodiak Brown Bear Center and dba Karluk River Cabins; Ph.D., CEO PacArctic, LLC; Open Systems Technology, DE, LLC; PacArctic Logistics, LLC; 2320 Post Road, LLC Alaska Employees: $250,000,000 Recent Newsworthy Events: Hired 57 new CEO Elizabeth Perry, Ph.D. Worldwide Employees: $200,000,000

615

$150,000,000

$100,000,000

Established 1972

$50,000,000

Alaskan Workforce

2009

2010

2011

2012

2013

194 Alimaq Drive, Kodiak AK 99615 Phone: 907-486-2530 Fax: 907-486-3325 facebook.com/KoniagInc koniag.com

Ahtna, Inc. Classification: Alaska Native Corporation Principal Activities: Ahtna companies are involved in construction and remediation activities; facilities management and support services; food service contractors; forestry and gravel sales; government contracting; janitorial, healthcare and medical records services; as well as oil and gas pipeline services.

Top 49er Rank in 2013: 19 Change in Rank from 2013: Same Change in Revenue from 2012: Up 5.26%

Gross Revenue

2013 $200,000,000 2012 $190,000,000 2011 $200,000,000 2010 $243,000,000 2009 $231,000,000

Subsidiaries: Ahtna Engineering Services LLC; Ahtna Development Corp.; Ahtna Facility Services, Inc.; Ahtna Enterprises Corp.; Ahtna Contractors LLC; Koht’aene Enterprises Co. LLC; Ahtna Support and Training Services LLC; Ahtna Technical Services, Inc.; Ahtna Government Services Corp.; Ahtna Construction and Primary Product; Ahtna Design Build, Inc.; Ahtna Professional Services, Inc.; Ahtna Environmental, Inc.; Ahtna Technologies, Inc.

Michelle Anderson Pres.

Recent Newsworthy Events: At Ahtna’s Annual Meeting, Ahtna shareholders voted in favor of establishing the Ahtna Hwt’aene (People’s) Trust as an ANCSA Settlement Trust, making Ahtna part of a small group of Native corporations with a shareholder Trust. The Trust Alaska Employees: $250,000,000 is intended to provide a number of 375 benefits to shareholders.

Worldwide Employees: 1,715

$200,000,000

$150,000,000

Alaskan Workforce

$100,000,000

Established 1972

$50,000,000 $0

2009

2010

2011

2012

2013

PO Box 649, Glennallen AK 99588 Phone: 907-822-3476 Fax: 907-822-3495 news@ahtna.net ahtna-inc.com

Alaska Business Monthly | October 2014 www.akbizmag.com

ALASKAâ&#x20AC;&#x2122;S TOP 49ERS 2014 | TOP 49ERS DIRECTORY

Udelhoven Oilfield System Services Classification: Industrial Services Principal Activities: Oilfield services, mechanical and electrical inspection, functional check-out, quality assurance/quality control, plumbing, welding, modular fabrication, industrial and commercial construction.

Top 49er Rank in 2013: 25 Change in Rank from 2013: Up 5 Change in Revenue from 2012: Up 12.19%

Gross Revenue

2013 $166,229,644 2012 $148,165,163 2011 $201,631,889 2010 $133,582,856 2009 $132,131,000

Subsidiaries: Udelhoven Inc., Houston; and Udelhoven International Inc., Houston. Jim Udelhoven CEO Alaska Employees: 695 Worldwide Employees: 780

$250,000,000 $200,000,000 $150,000,000

Alaskan Workforce

Established 1970

$100,000,000 $50,000,000 $0

2009

2010

2011

2012

2013

184 E. 53rd Ave. Anchorage AK 99518-1222 Phone: 907-344-1577 Fax: 907-344-5817 rfrontdesk@udelhoven.com udelhoven.com

Protect what your business has with business insurance solutions.

alaskausa.org/biz Better for business. www.akbizmag.com

October 2014 | Alaska Business Monthly

ALASKAâ&#x20AC;&#x2122;S TOP 49ERS 2014 | TOP 49ERS DIRECTORY

Sealaska

Classification: Alaska Native Corporation Top 49er Rank in 2013: 12 Change in Rank from 2013: Down 9 Principal Activities: Sealaskaâ&#x20AC;&#x2122;s businesses are divided Change in Revenue into three tiers: natural resources, construction and from 2012: Down 47.07% services. Through our wholly and majority-owned Gross Revenue subsidiaries, Sealaska operates in a range of industries 2013 $164,950,000 and offers a variety of products. 2012 $311,620,000 2011 $259,487,000 Subsidiaries: Sealaska Timber Corporation; Alaska 2010 $223,823,000 Coastal Aggregates; Sealaska Environmental Services; 2009 $196,017,000 Managed Business Solutions; Sealaska Constructors; Security Alliance; Haa Aani, LLC; Synergy Systems Recent Newsworthy Events: Sealaska has had a dramatic change in leadership with electing an independent candidate to the board, electing a new board chair and vice chair. Anthony Mallott Anthony Mallott is officially the new President and CEO as of the 2014 Annual Meeting. Pres./CEO Sealaska recently divested itself of Alaska Employees: $350,000,000 subsidiary Nypro Kanak. 60 Worldwide Employees: 1,271

$300,000,000 $250,000,000 $200,000,000

$150,000,000 $100,000,000 $50,000,000

Alaskan Workforce

Established 1972

One Sealaska Plaza, Suite 400 Juneau AK 99801-1276 Phone: 907-586-1512 Fax: 907-463-3897 webmaster@sealaska.com sealaska.com

2009

2010

2011

2012

2013

Davis Constructors and Engineers, Inc. Classification: Construction Principal Activities: Current Projects- UAF Engineering Facility, Providence Tower M, Penland Parkway, Resolution Pointe Subdivision, Cook Inlet Housing Mountain View Village, CLDC Fireweed Office Building, C Street and International Office Building

Top 49er Rank in 2013: 16 Change in Rank from 2013: Down 6 Change in Revenue from 2012: Down 24.94%

Gross Revenue

2013 $163,639,861 2012 $218,000,000 2011 $119,000,000 2010 $120,300,000 2009 $151,500,000

Subsidiaries: Mass Excavation, Inc. Recent Newsworthy Events: Davis recently hosted a kids safety day. Featuring stations on wildlife safety, water safety, first aid, CPR, and fire/carbon monoxide alarms- the kids were able to learn skills specific to our Alaskan environment. The safety vests and glasses Alaska Employees: $250,000,000 were a hit among the 50 kids in 100 attendance. Worldwide Employees: $200,000,000

Josh Pepperd Pres.

100

$150,000,000

100

Alaskan Workforce

$100,000,000

Established 1976

$50,000,000 $0

2009

2010

2011

2012

2013

740 Bonanza Ave., Anchorage AK 99518 Phone: 907-562-2336 Fax: 907-561-3620 admin@davisconstructors.com davisconstructors.com

Alaska Business Monthly | October 2014 www.akbizmag.com

ALASKAâ&#x20AC;&#x2122;S TOP 49ERS 2014 | TOP 49ERS DIRECTORY

Ravn Alaska Classification: Transportation Principal Activities: Scheduled passenger services, charter, cargo and air services to more than 100 communities in Alaska. Subsidiaries: Era Aviation, Inc.; Hageland Aviation Services, Inc.; Frontier Flying Service

Top 49er Rank in 2013: 24 Change in Rank from 2013: Up 1 Change in Revenue from 2012: Up 6.67%

Gross Revenue

2013 $160,000,000 2012 $150,000,000 2011 $136,000,000 2010 $120,000,000 2009 $117,000,000

Bob Hajdukovich CEO Alaska Employees: 950 Worldwide Employees: 950

100

Alaskan Workforce

www.akbizmag.com

$200,000,000

$150,000,000

$100,000,000

Established 1948 $50,000,000

2009

2010

2011

2012

2013

4700 Old International Airport Rd. Anchorage AK 99502 Phone: 907-266-8394 Fax: 907-266-8391 sales@flyera.com flyravn.com

October 2014 | Alaska Business Monthly

ALASKAâ&#x20AC;&#x2122;S TOP 49ERS 2014 | TOP 49ERS DIRECTORY

Goldbelt, Incorporated Classification: Alaska Native Corporation Principal Activities: Tourism, government contracting, facility management, IT consulting, construction, hospitality, and vehicle leasing.

Top 49er Rank in 2013: 22 Change in Rank from 2013: Down 2 Change in Revenue from 2012: Down 6.73%

Gross Revenue

Subsidiaries: Goldbelt Orca, LLC; Goldbelt Glacier Health 2013 $146,033,239 Services, LLC; Nisgaâ&#x20AC;&#x2122;a Data Systems, LLC; LifeSource 2012 $156,565,827 Biomedical, LLC; Goldbelt Eagle, LLC; Goldbelt Falcon, 2011 $135,188,063 2010 $139,476,350 LLC; Goldbelt Hawk, LLC; Peregrine Technical Solutions, 2009 $107,748,370 LLC; Facility Support Services, LLC; Goldbelt Security, LLC; Godlbelt Raven, LLC; CP Leasing, LLC; Goldbelt Cedar, LLC; Goldbelt Professional Services, LLC; Goldbelt Hotel; Mount Roberts Tramway; Goldbelt Transportation; CP Marine; Goldbelt Speciality Services, LLC; Goldbelt Orca, LLC; Goldbelt C6

Robert Loiselle Pres./CEO

Recent Newsworthy Events: The Goldbelt Hotel was renovated in summer 2013, and recently the Goldbelt Ancestral Alaska Employees: $200,000,000 Trust (a settlement trust) was 196 passed by shareholders. Worldwide Employees: $150,000,000 777

25% Alaskan Workforce

$100,000,000

Established 1974 $50,000,000

2009

2010

2011

2012

2013

3075 Vintage Blvd., Suite 200 Juneau AK 99801 Phone: 907-790-4990 Fax: 907-790-4999 mail.gbi@goldbelt.com goldbelt.com

Three Bears Alaska, Inc. Classification: Retail and Wholesale Trade Principal Activities: Retail grocery, general merchandise, sporting goods, pharmacy, and fuel.

Top 49er Rank in 2013: 29 Change in Rank from 2013: Up 4 Change in Revenue from 2012: Up 4.89%

Gross Revenue

2013 $136,632,222 2012 $130,268,017 2011 $121,093,287 2010 $109,060,780 2009 $111,247,617

Recent Newsworthy Events: New Chugiak/ Birchwood/Peters Creek/Eklutna store opened in July 2014. Now operating 8 stores in Alaska featuring groceries, general merchandise, sporting goods, pharmacy, and fuel.

David Weisz Pres./CEO

Alaska Employees: 396 Worldwide Employees: 441

$150,000,000 $120,000,000 $90,000,000

Alaskan Workforce

Established 1980

$60,000,000 $30,000,000 $0

2009

2010

2011

2012

2013

445 N. Pittman Rd., Suite B Wasilla AK 99623 Phone: 907-357-4311 Fax: 907-357-4312 steve@threebearsalaska.com threebearsalaska.com

Alaska Business Monthly | October 2014 www.akbizmag.com

Construction Machinery Industrial Classification: Industrial Services Principal Activities: Distributor of construction, mining and logging equipment in Alaska. Representative for Volvo, Hitachi, Atlas Copco, Doosan, Metso, and Link-Belt.

Top 49er Rank in 2013: 26 Change in Rank from 2013: Same Change in Revenue from 2012: Down 7.59%

Gross Revenue

2013 $134,000,000 2012 $145,000,000 2011 $91,630,000 2010 $90,000,000 2009 $87,000,000

Ken Gerondale Pres./CEO Alaska Employees: 105 Worldwide Employees: 105

$150,000,000 $120,000,000 $90,000,000

100

Alaskan Workforce

$60,000,000

Established 1985

$30,000,000 $0

2009

2010

2011

2012

2013

5400 Homer Dr., Anchorage AK 99518 Phone: 907-563-3822 Fax: 907-563-1381 cmiak.com

Our outstanding management team specializes in providing design, preconstruction and construction services on all types of civil and commercial construction projects. The Municipal Light & Power Plant 2 Expansion Contract is just one of our many projects.

For a complete listing and more information visit our website www.rogerhickelcontracting.com

11001 Calaska Circle I Anchorage, Alaska I 99515 I phone 907-279-1400 I fax 907-279-1405 www.akbizmag.com

October 2014 | Alaska Business Monthly

ALASKAâ&#x20AC;&#x2122;S TOP 49ERS 2014 | TOP 49ERS DIRECTORY

First National Bank Alaska Classification: Finance, Insurance, Real Estate Principal Activities: First National Bank Alaska experts have been adding convenience and value to banking services for Alaska businesses and families for more than 90 years by offering their expertise in safe keeping and lending money, trust banking, escrow and contract collection and BankCard services.

Top 49er Rank in 2013: 27 Change in Rank from 2013: Same Change in Revenue from 2012: Down 9.23%

Gross Revenue

2013 $131,005,000 2012 $144,330,000 2011 $143,400,000 2010 $150,930,000 2009 $156,500,000

Recent Newsworthy Events: First National Bank Alaska experts have been adding convenience and value to banking services for Alaska businesses and families for more than 90 years by offering their expertise in safe keeping and lending money, trust banking, escrow and contract collection and BankCard services.

Betsy Lawer Pres.

Alaska Employees: 694 Worldwide Employees: 694

100

Alaskan Workforce

$200,000,000

$150,000,000

$100,000,000

Established 1922

PO Box 100720 Anchorage AK 99510-0720 Phone: 907-777-4362 Fax: 907-777-3406 marketing@FNBAaska.com FNBAlaska.com

$50,000,000

2009

2010

2011

2012

2013

The Tatitlek Corporation Classification: Alaska Native Corporation Principal Activities: Information Technology, SatelliteBased Imagery Capture and Processing, Geospatial Solutions, Specialized Live and Virtual Training Scenarios, Logistics Support, Base Operations Support, Supply Chain Management, Transportation and Motor Pool Services, General Contracting and Design-Build

Roy Totemoff Pres./CEO

Top 49er Rank in 2013: 28 Change in Rank from 2013: Same Change in Revenue from 2012: Down 2.95%

Gross Revenue

2013 $124,840,398 2012 $128,640,928 2011 $137,189,354 2010 $110,700,000 2009 $107,500,000

Subsidiaries: Tatitlek Contractors, Inc.; Tatitlek Construction Services, Inc.; Tatitlek Management, Inc.; Tatitlek Support Services, Inc.; Tatitlek Technologies, Inc.; Tatitlek Training Services, Inc.; GeoNorth, LLC; Tatitlek Logistics Corporation; Tatitlek Response Services, Inc.; Tatitlek Training Technologies, Inc.

Recent Newsworthy Events: GeoNorth launched a new business line, Remote Sensing/ Imagery Solutions. GeoNorth is now a Direct Receiving Station for the Astrium constellation of satellites. GeoNorth can provide Alaska Employees: $150,000,000 low, medium, high, and very high 75 resolution optical and radar satellite Worldwide Employees: imagery in near real time. $120,000,000 937 $90,000,000

Alaskan Workforce

$60,000,000

Established 1973

$30,000,000 $0

2009

2010

2011

2012

2013

561 E. 36th Ave., Anchorage AK 99503 Phone: 907-278-4000 Fax: 907-278-4050 info@tatitlek.com tatitlek.com

Alaska Business Monthly | October 2014 www.akbizmag.com

ALASKA’S TOP 49ERS 2014 | TOP 49ERS DIRECTORY

Cruz Companies Classification: Construction

New Top 49er This Year

Principal Activities: Oil and gas operations, ice roads, snow trails, tundra transport, heavy haul, heavy-civil, equipment, marine transportation, camps, logistics, oilfield exploration, engineering and consulting.

Change in Revenue from 2012: Up 40.66%

Gross Revenue 2013 $116,798,739 2012 $83,038,657 2011 ~ 2010 ~ 2009 ~

Dave Cruz President Alaska Employees: 250 Worldwide Employees: 481

Alaskan Workforce

$120,000,000 $100,000,000 $80,000,000 $60,000,000

Established 1981

$40,000,000

7000 E. Palmer Wasilla Hwy. Palmer AK 99645 Phone: 907-746-3144 Fax: 907-746-5557 info@cruzconstruct.com cruzconstruct.com

$20,000,000 $0

2009

2010

2011

2012

2013

Transportation Solutions For Your Business!

Interior Alaska’s Fleet Headquarters SERVING ALASKA BUSINESS FOR 37 YEARS! Complete Line of Ford Vehicles in Stock

1625 Seekins Ford Dr. Fairbanks, Alaska 99701 (907) 459-4055 sangel@seekins.com www.akbizmag.com

SEEKINS.COM

1000 Lake Colleen Rd. Prudhoe Bay, Alaska 99734 sangel@seekins.com

October 2014 | Alaska Business Monthly

ALASKAâ&#x20AC;&#x2122;S TOP 49ERS 2014 | TOP 49ERS DIRECTORY

Aleut Corporation

Classification: Alaska Native Corporation Top 49er Rank in 2013: 34 Change in Rank from 2013: Up 4 Principal Activities: Commercial and residential real Change in Revenue estate; government contracting; fuel and port services; from 2012: Up 18.51% gravel operations; water utilities; oil well testing Gross Revenue instrumentation and testing; water testing; mechanical 2013 $116,260,627 contracting; oil and fuel storage, hazardous materials 2012 $98,098,953 analysis, testing and remediation services. 2011 $148,419,945 2010 $159,416,000 Subsidiaries: Aleut Enterprises LLC, Anchorage, 2009 $146,058,000 Alaska; Aleut Management Services, Colorado Springs, Colorado; Aleut Real Estate LLC, Anchorage, Alaska; Alaska Instrument LLC, Anchorage, Alaska; CandH Testing LLC Bakersfield, California; Patrick Mechanical; Analytica Group; ARS International Thomas Mack Recent Newsworthy Events: Acquisition of ARS International, headquartered in Baton President Rouge, Louisiana. CandH Testing Alaska Employees: $200,000,000 opened an office in Dickinson, 159 North Dakota to offer services in the Bakken oil fields. Worldwide Employees: $150,000,000

429

$100,000,000

37%

Established 1972

Alaskan Workforce

4000 Old Seward Hwy., Suite 300 Anchorage AK 99503 Phone: 907-561-4300 Fax: 907-563-4328 info@aleutcorp.com aleutcorp.com

$50,000,000

2009

2010

2011

2012

2013

Colville, Inc. Classification: Industrial Services Principal Activities: Oil and gas industry and aviation support services, fuel industry supply and solid waste utility and logistics operating camp. Subsidiaries: Colville Transport LLC; Brooks Range Supply Inc.; Brooks Camp, LLC

Eric Helzer Pres./CEO

100% 80

Gross Revenue

2013 $105,600,000 2012 $110,000,000 2011 $81,000,000 2010 $78,000,000 2009 $75,900,000

Recent Newsworthy Events: Opened a 190 man camp, Brooks Camp on December 31, 2013.

Alaska Employees: 185 Worldwide Employees: 185

Alaskan Workforce

Top 49er Rank in 2013: 32 Change in Rank from 2013: Up 1 Change in Revenue from 2012: Down 4%

$120,000,000 $100,000,000 $80,000,000 $60,000,000 $40,000,000

Established 1981 $20,000,000 $0

2009

2010

2011

2012

2013

Pouch 340012, Prudhoe Bay AK 99734 Phone: 907-659-3198 Fax: 907-659-3190 info@colvilleinc.com colvilleinc.com

Alaska Business Monthly | October 2014 www.akbizmag.com

Matanuska Electric Association Inc. Classification: Utility Principal Activities: Covering more than 4,000 miles of power lines, MEAâ&#x20AC;&#x2122;s service area extends north past the Chulitna River, over to the mighty Matanuska Glacier, and south to Eagle River. MEA was founded in 1941 by 201 colonist families, and celebrates its 73rd year of service in 2014 with 59,000 points of service.

Top 49er Rank in 2013: 33 Change in Rank from 2013: Up 1 Change in Revenue from 2012: Down 1.39%

Gross Revenue

2013 $105,000,000 2012 $106,482,000 2011 $105,000,000 2010 $94,000,000 2009 $110,000,000

Joe Griffith Gen. Mgr. Alaska Employees: 168 Worldwide Employees: 168

100% Alaskan Workforce

www.akbizmag.com

$120,000,000 $100,000,000 $80,000,000 $60,000,000

Established 1941

$40,000,000 $20,000,000 $0

2009

2010

2011

2012

2013

163 E. Industrial Way, Palmer AK 99645 Phone: 907-745-3231 Fax: 907-761-9368 facebook.com/matanuska.electric mea.coop

October 2014 | Alaska Business Monthly

ALASKAâ&#x20AC;&#x2122;S TOP 49ERS 2014 | TOP 49ERS DIRECTORY

Usibelli Coal Mine Inc. Classification: Mining

Top 49er Rank in 2013: 31 Change in Rank from 2013: Down 2 Change in Revenue from 2012: Down 8.04%

Principal Activities: Coal mining and coal marketing. Wholesale power and retail district heating, investments, real estate and vineyards.

Gross Revenue

2013 $103,000,000 2012 $112,000,000 2011 $107,878,996 2010 $96,753,015 2009 $91,458,640

Subsidiaries: Aurora Energy; Usibelli Investments; Usibelli Vineyards

Recent Newsworthy Events: UCM is the only operating coal mine in Alaska, providing the Interior with its lowest cost and most reliable source of energy and jobs for hundreds of Alaskans for over 70 years. UCM exports coal to Chile, Japan and Korea and has offices in Healy, Fairbanks and Palmer.

Joseph Usibelli Chairman

Alaska Employees: 175 Worldwide Employees: 210

83% Alaskan Workforce

$120,000,000

$100,000,000 $80,000,000 $60,000,000

Established 1942

$40,000,000 $20,000,000 $0

2009

2010

2011

2012

2013

PO Box 1000, Healy AK 99743 Phone: 907-452-2625 Fax: 907-451-6543 info@usibelli.com usibelli.com

MTA Inc. Classification: Utility Principal Activities: Alaskan owned co-op delivering advanced communications products including wireless, high-definition digital television with video-ondemand, high-speed Internet, local and long-distance, online directory, IT business support, directory and television advertising and local community content on TV. Subsidiaries: MTA Communications

Gross Revenue

2013 $99,000,000 2012 $96,000,000 2011 $100,000,000 2010 $106,000,000 2009 $109,000,000

Recent Newsworthy Events: MTA is proud to deliver state of the art residential and business services to Southcentral Alaska for over 60 years. MTA is the only company in Alaska to offer Internet Rolling Gigs. MTA recently began offering Cloud Storage Services for businesses across Alaska.

Greg Berberich CEO

Alaska Employees: 297 Worldwide Employees: 297

100

Alaskan Workforce

Top 49er Rank in 2013: 35 Change in Rank from 2013: Up 1 Change in Revenue from 2012: Up 3.13%

$120,000,000 $100,000,000 $80,000,000 $60,000,000

Established 1953

$40,000,000 $20,000,000 $0

2009

2010

2011

2012

2013

1740 S. Chugach St., Palmer AK 99645 Phone: 907-745-3211 Fax: 907-761-2688 facebook.com/MatanuskaTelephone mtasolutions.com

Alaska Business Monthly | October 2014 www.akbizmag.com

Sitnasuak Native Corporation Classification: Alaska Native Corporation Principal Activities: Sitnasuak operates a number of for-profit businesses in Nome, including a home heating fuel delivery service, a real estate venture that owns residential apartment and commercial buildings. SNC also owns six professional and technical service companies operating throughout the U.S.

New Top 49er This Year Change in Revenue from 2012: Up 747.63%

Gross Revenue

2013 $93,147,344 2012 $109,852,435 2011 ~ 2010 ~ 2009 ~

Subsidiaries: SNC Technical Services, LLC; Bonanza Fuel, Inc; Fidelity Title Agency Alaska, LLC; Mat-Su Title, LLC; GBS, LLC; Nanuaq, LLC; Nanuaq Development, LLC; Sitnasuak Construction Services, LLC; Sitnasuak Health Solutions, LLC; Sitnasuak Properties, LLC; Aurora Industries, LLC; API, LLC; Sound Fabric, LLC; SNC Manufacturing, LLC

David Hoffman CEO

Recent Newsworthy Events: Sitnasuak’s newest subsidiary Sitnasuak Health Solutions (SHS) provides administrative, non-medical services to the health care industry, with a focus on the Indian health care system throughout the US and SHS CEO Carolyn Crowder received a National Indian Health Board National Service Alaska Employees: $120,000,000 Award for her work with the new 102 subsidiary. $100,000,000

Worldwide Employees: 672

15% Alaskan Workforce

$80,000,000 $60,000,000 $40,000,000

Established 1972 $20,000,000 $0

2009

2010

2011

2012

2013

400 Bering St, Nome AK 99762 Phone: 907-443-2632 Fax: 907-443-3063 mail@snc.org https://snc.org/

THANK YOU ANCHORAGE MEETING CHAMPIONS!

MEETINGS PAY IN ANCHORAGE www.akbizmag.com

When Grant Hildebrand and Steve Mendive think about behavior they usually have a pretty imposing audience in mind: Alaska’s bears. Grant is a Regional Wildlife Biologist for the State of Alaska, and Steve handles projects and development at the Alaska Wildlife Conservation Center. Both are also keen observers of human behavior. They helped make the case for the International Association for Bear Research and Management, and now the group will meet in Anchorage in 2016. Talk about bringing all your influence to bear. Steve Mendive and Grant Hildebrand THE MEETING: International Association for Bear Research and Management June 11-19, 2016 400 Delegates Estimated Economic Impact: $607,717

ARE YOU A MEMBER OF AN ASSOCIATION? CONTACT VISIT ANCHORAGE TO BRING YOUR GROUP TO TOWN:

MEETINGS@ANCHORAGE.NET | 907.257.2341

October 2014 | Alaska Business Monthly

ALASKA’S TOP 49ERS 2014 | TOP 49ERS DIRECTORY

ALASKAâ&#x20AC;&#x2122;S TOP 49ERS 2014 | TOP 49ERS DIRECTORY

Homer Electric Association Inc. Classification: Utility Principal Activities: Homer Electric is the generation, transmission, and distribution electric cooperative for the western Kenai Peninsula. The cooperative has approximately 32,000 meters on its system. Subsidiaries: Alaska Electric and Energy Cooperative, Inc.; Kenai Hydro, LLC

Top 49er Rank in 2013: 36 Change in Rank from 2013: Up 1 Change in Revenue from 2012: Up 1.10%

Gross Revenue 2013 $92,000,000 2012 $91,000,000 2011 $84,000,000 2010 $72,000,000 2009 $87,283,352

Recent Newsworthy Events: On January 1, 2014 HEA began generating its Bradley Janorschke own power. The portfolio includes a new combined cycle plant in Nikiski, a combustion turbine plant at Bernice Lake, and a new combustion turbine plant Gen. Mgr. in Soldotna. HEA also receives Alaska Employees: $100,000,000 a share of the power produced 158 at the Bradley Lake hydro plant. Worldwide Employees: 158

$80,000,000 $60,000,000

100

Year Established: 1945

3977 Lake St., Homer AK 99603 Phone: 907-235-8551 Fax: 907-235-3313 contact_us@homerelectric.com homerelectric.com

$20,000,000

Alaskan Workforce

$40,000,000

2009

2010

2011

2012

2013

Watterson Construction Co. Classification: Construction Principal Activities: General building contractor. Projects include two helicopter hangars at Fort Wainwright; MEB at Fort Greely; Girdwood Elementary School; AVTEC Addition - Seward; Anchorage YMCA addition

Top 49er Rank in 2013: 38 Change in Rank from 2013: Up 2 Change in Revenue from 2012: Up 1.12%

Gross Revenue

2013 $90,000,000 2012 $89,000,000 2011 $63,000,000 2010 $75,000,000 2009 $90,000,000

Bill Watterson Pres. Alaska Employees: 100 Worldwide Employees: 101

$100,000,000 $80,000,000 $60,000,000

Alaskan Workforce

$40,000,000

Established 1981

$20,000,000 $0

2009

2010

2011

2012

2013

6500 Interstate Cir., Anchorage AK 99518 Phone: 907-563-7441 Fax: 907-563-7222 info@wattersonsconstruction.com wattersonconstruction.com

Alaska Business Monthly | October 2014 www.akbizmag.com

Vitus Energy LLC Classification: Transportation

New Top 49er This Year Change in Revenue from 2012: Up 44.52%

Principal Activities: Vitus Marine specializes in meeting the marine transportation and fuel distribution needs of Western Alaska maritime communities. Vitus currently provides fuel and freight delivery services across Western Alaska.

Gross Revenue 2013 $89,600,000 2012 $62,000,000 2011 ~ 2010 ~ 2009 ~

Subsidiaries: Great Circle Flight Services; Central Alaska Energy; Vitus Marine; Vitus Terminals Mark Smith CEO

Recent Newsworthy Events: New locations in Dillingham and Kotzebue.

Alaska Employees: 50 Worldwide Employees: 50

$100,000,000 $80,000,000 $60,000,000

100

Alaskan Workforce

Established 2009

$40,000,000 $20,000,000 $0

2009

2010

2011

2012

2013

113 W. Northern Lights Blvd., Suite 200 Anchorage AK 99503 Phone: 907-278-6700 Fax: 907-278-6701 info@vitusmarine.com vitus-energy.com

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rbauction.com RBA Branding AD Alaska www.akbizmag.com Bus Journal 7x4.875 01364.indd

14-06-20 October 2014 | Alaska Business Monthly

10:33 AM 85

ALASKA’S TOP 49ERS 2014 | TOP 49ERS DIRECTORY

Cornerstone General Contractors Inc. Classification: Construction

New Top 49er This Year

Principal Activities: General contracting utilizing collaborative project delivery methods for new commercial construction and the precision renovation of existing facilities for Alaska’s leading academic, civic, industrial, medical, non-profit, oil and gas, and private development organizations.

Change in Revenue from 2012: Up 78%

Gross Revenue 2013 $89,000,000 2012 $50,000,000 2011 $41,000,000 2010 $34,600,000 2009 ~

Recent Newsworthy Events: 2014: New UAA Alaska Airlines Center (Sports Arena) in Anchorage—Successful Project Completion. 2014: Best Places to Work in Alaska from the Alaska Journal of Commerce. 2014: Alaska Governor’s Excellence in Safety Award (4th Consecutive Year).

Joe Jolley Pres.

Alaska Employees: 50 Worldwide Employees: 50

$100,000,000 $80,000,000 $60,000,000

100

5050 Cordova St. Anchorage AK 99503-7222 Phone: 907-561-1993 Fax: 907-561-7899 jjolley@cornerstoneak.com cornerstoneak.com

$20,000,000

Alaskan Workforce

Established 1993

$40,000,000

2009

2010

2011

2012

2013

Anchorage Chrysler Dodge Center Classification: Retail and Wholesale Trade Principal Activities: Chrysler, Jeep and Dodge new and used vehicle sales and service. Your home town dealer for 51 years.

Top 49er Rank in 2013: 41 Change in Rank from 2013: Up 2 Change in Revenue from 2012: Up 9.09%

Gross Revenue

2013 $85,550,000 2012 $78,422,000 2011 $64,546,162 2010 $52,300,000 2009 $50,000,000

Rodney Udd Pres./CEO Alaska Employees: 95 Worldwide Employees: 95

$100,000,000 $80,000,000 $60,000,000

100

Alaskan Workforce

$40,000,000

Established 1963

$20,000,000 $0

2009

2010

2011

2012

2013

2601 E. Fifth Ave., Anchorage AK 99501 Phone: 907-276-1331 Fax: 907-264-2202 anchoragechryslerdodge.com anchoragechrysler.com

Alaska Business Monthly | October 2014 www.akbizmag.com

PenAir Classification: Transportation Principal Activities: Regional airline serving communities throughout south western Alaska, the Aleutians and Pribilofs as well as several destinations out of Boston to Northern Maine and New York.

Top 49er Rank in 2013: 40 Change in Rank from 2013: Same Change in Revenue from 2012: Down 3.69%

Gross Revenue 2013 $78,300,000 2012 $81,300,000 2011 $72,100,000 2010 $72,300,000 2009 $70,100,000

Recent Newsworthy Events: Continuing to remain one of the leaders in aviation Safety, PenAir recently completed level 3 of the FAA’s “Safety Management System.

Danny Seybert CEO

Alaska Employees: 450 Worldwide Employees: 500

$100,000,000 $80,000,000 $60,000,000

Alaskan Workforce

www.akbizmag.com

$40,000,000

Established 1955

$20,000,000 $0

2009

2010

2011

2012

2013

6100 Boeing Ave., Anchorage AK 99502 Phone: 907-771-2500 Fax: 907-334-5763 missy.roberts@penair.com penair.com

October 2014 | Alaska Business Monthly

ALASKA’S TOP 49ERS 2014 | TOP 49ERS DIRECTORY

ALASKAâ&#x20AC;&#x2122;S TOP 49ERS 2014 | TOP 49ERS DIRECTORY

Builders Choice Inc. Classification: Manufacturing

Top 49er Rank in 2013: 45 Change in Rank from 2013: Up 4 Change in Revenue from 2012: Up 25.87%

Principal Activities: Building materials wholesaler and manufacturer of engineered building components to include modular structures and trusses.

Gross Revenue 2013 $73,002,000 2012 $58,000,000 2011 $39,000,000 2010 ~ 2009 ~

Recent Newsworthy Events: Builders Choice recently participated in sponsoring the Love Alaska Festival in Anchorage. Notable recently completed projects include: Brooks Range Camp in Deadhorse and the new Top of the World Hotel in Barrow

Mark Larson Pres.

Alaska Employees: 210 Worldwide Employees: 285

$80,000,000 $70,000,000 $60,000,000 $50,000,000

Alaskan Workforce

$40,000,000 $30,000,000

Established 1996

$20,000,000 $10,000,000 $0

2009

2010

2011

2012

2013

351 E. 104th Ave., Anchorage AK 99515 Phone: 907-522-3214 Fax: 907-522-3216 sandi@builderschoice.us.com builderschoice.us.com

Roger Hickel Contracting Inc. Classification: Construction

New Top 49er This Year

Principal Activities: General contractor of civil and commercial projects. Union contractor and member of the Associated General Contractors of America.

Change in Revenue from 2012: Up 38.26%

Gross Revenue 2013 $67,963,073 2012 $49,155,971 2011 $54,003,584 2010 $57,958,000 2009 $67,438,000

Mike Shaw Pres. Alaska Employees: 50 Worldwide Employees: 50

$80,000,000 $70,000,000 $60,000,000 $50,000,000

100

Alaskan Workforce

$40,000,000 $30,000,000

Established 1995

$20,000,000 $10,000,000 $0

2009

2010

2011

2012

2013

11001 Calaska Cir., Anchorage AK 99515 Phone: 907-279-1400 Fax: 907-279-1405 contact@rhcak.com rogerhickelcontracting.com

Alaska Business Monthly | October 2014 www.akbizmag.com

Seekins Ford Lincoln, Inc. Classification: Retail and Wholesale Trade Principal Activities: New and used auto sales, parts, service, and body shop. Recent Newsworthy Events: Helped collect and donate over 3,600 pounds of peanut butter for the Fairbanks Food Bank.

Top 49er Rank in 2013: 42 Change in Rank from 2013: Down 1 Change in Revenue from 2012: Down 9.36%

Gross Revenue 2013 $67,581,913 2012 $74,556,932 2011 $63,993,582 2010 $65,520,021 2009 $54,418,442

Ralph Seekins Pres. Alaska Employees: 115 Worldwide Employees: 115

$80,000,000 $70,000,000 $60,000,000 $50,000,000

100

Alaskan Workforce

www.akbizmag.com

$40,000,000 $30,000,000

Established 1977

$20,000,000 $10,000,000 $0

2009

2010

2011

2012

2013

1625 Seekins Ford Dr., Fairbanks AK 99701 Phone: 907-459-4000 Fax: 907-459-4057 sales@seekins.com seekins.com

October 2014 | Alaska Business Monthly

ALASKAâ&#x20AC;&#x2122;S TOP 49ERS 2014 | TOP 49ERS DIRECTORY

DOWL HKM Classification: Engineering Principal Activities: Civil, structural and geotechnical engineering. Planning, landscape architecture, environmental, and construction administration. Recent Newsworthy Events: Opened two offices in Colorado to make our total 23 offices in 8 states.

Top 49er Rank in 2013: 43 Change in Rank from 2013: Down 1 Change in Revenue from 2012: Up 5.61%

Gross Revenue

2013 $62,309,000 2012 $59,000,000 2011 $51,000,000 2010 $50,000,000 2009 $54,000,000

Stewart Osgood Pres. Alaska Employees: 175 Worldwide Employees: 415

$80,000,000 $70,000,000 $60,000,000 $50,000,000

Alaskan Workforce

$40,000,000 $30,000,000

Established 1962

$20,000,000 $10,000,000 $0

2009

2010

2011

2012

2013

4041 B Street, Anchorage AK 99503 Phone: 907-562-2000 Fax: 907-563-3953 jpayne@dowlhkm.com dowlhkm.com

Geneva Woods Classification: Healthcare

New Top 49er This Year

Principal Activities: We have retail Pharmacies, Infusion Pharmacies and Medset Pharmacies, specialty compounding pharmacy and home infusion services. We also provide DME and HME to the communities we serve. We also have pharmacies in Montana and Wyoming.

Change in Revenue from 2012: Up 53.85%

Gross Revenue 2013 $60,000,000 2012 $39,000,000 2011 ~ 2010 ~ 2009 ~

Dan Afrasiabi Pres. Alaska Employees: 190 Worldwide Employees: 250

76% Alaskan Workforce

$60,000,000 $50,000,000 $40,000,000 $30,000,000

Established 1979

$20,000,000 $10,000,000 $0

2009

2010

2011

2012

2013

501 W. International Airport Rd. Suite 1A Anchorage AK 99518 Phone: 907-350-3816 sue.parrott@genevawoods.com genevawoodspharmacy.com

Alaska Business Monthly | October 2014 www.akbizmag.com

Alaska Industrial Hardware Inc. Classification: Industrial Services Principal Activities: Retail sale and industrial sale of tools, industrial supplies, hardware, fasteners, construction supplies, small equipment, pumps, generators and pressure washers.

Top 49er Rank in 2013: 44 Change in Rank from 2013: Down 2 Change in Revenue from 2012: Down 2.05%

Subsidiaries: General Hardware Distributors

Gross Revenue 2013 $57,400,000 2012 $58,602,000 2011 $52,500,000 2010 $50,430,000 2009 $50,957,000

Recent Newsworthy Events: Over the last several years AIH has either been replacing smaller stores with new larger shopper friendly stores, or Mike Kangas remodeling existing locations. In 2014, AIH finished the remodel and reset Pres./Gen. Mgr. of their Fairbanks store and Alaska Employees: also launched the Reddy $60,000,000 200 Box program, a job site $50,000,000 Worldwide Employees: consignment system. 200

$40,000,000

100% Alaskan Workforce

$30,000,000 $20,000,000

Established 1959 $10,000,000 $0

2009

2010

2011

2012

2013

2192 Viking Dr., Anchorage AK 99501 Phone: 907-276-7201 Fax: 907-258-3054 info@aih.com aih.com

AN ALASKA MINING PROJECT COMMITTED TO: LOCAL HIRE RESPONSIBLE DEVELOPMENT ENVIRONMENTAL INTEGRITY

www.akbizmag.com

October 2014 | Alaska Business Monthly

ALASKAâ&#x20AC;&#x2122;S TOP 49ERS 2014 | TOP 49ERS DIRECTORY

Airport Equipment Rentals Classification: Industrial Services Principal Activities: Heavy-equipment rental/ sales company providing sales, services, and rentals for the construction, mining, logging and oil and gas industries. Subsidiaries: The Rental Zone

Top 49er Rank in 2013: 47 Change in Rank from 2013: Same Change in Revenue from 2012: Up 1.85%

Gross Revenue 2013 $55,000,001 2012 $54,000,000 2011 $49,000,000 2010 ~ 2009 $53,452,000

Jerry Sadler Owner/Pres. Alaska Employees: 105 Worldwide Employees: 105

100% Alaskan Workforce

$60,000,000 $50,000,000 $40,000,000 $30,000,000

Established 1985

$20,000,000 $10,000,000 $0

2009

2010

2011

2012

2013

1285 Van Horn Rd., Fairbanks AK 99707 Phone: 907-456-2000 Fax: 907-457-7609 aerinc4@alaska.net aer-inc.net

Credit Union 1 Classification: Finance, Insurance, Real Estate Principal Activities: Credit Union 1 is a fullservice financial institution known for its lowcost loans, unique rewards program, financial education and variety of money management tools. We value responsible, accessible lending as one of our most vital community services.

New Top 49er This Year Change in Revenue from 2012: Up 5.24%

Gross Revenue 2013 $52,618,949 2012 $50,000,000 2011 $48,000,000 2010 $47,200,000 2009 $47,600,000

Tom Newins Pres./CEO Alaska Employees: 323 Worldwide Employees: 327

99% Alaskan Workforce

$60,000,000 $50,000,000 $40,000,000 $30,000,000

Established 1952

$20,000,000 $10,000,000 $0

2009

2010

2011

2012

2013

1941 Abbott Rd., Anchorage AK 99507 Phone: 907-339-9485 Fax: 907-339-8522 service@cu1.org cu1.org

Alaska Business Monthly | October 2014 www.akbizmag.com

Tatonduk Outfitters Ltd. Classification: Transportation Principal Activities: Schedule and charter air freight services using DC-9, DC-6 and C-46 aircraft. Passenger and freight service from Fairbanks to interior Alaska destinations using PC12 and Caravans.

Top 49er Rank in 2013: 49 Change in Rank from 2013: Same Change in Revenue from 2012: Up 2.29%

Gross Revenue

2013 $51,950,000 2012 $50,785,000 2011 $50,500,000 2010 $46,800,000 2009 $40,500,000

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ALASKA’S TOP 49ERS 2014 | TOP 49ERS DIRECTORY

ALASKA’S TOP 49ERS 2014 | 49ERS BY INDUSTRY CLASSIFICATION

Alaska Native Corporations Alaska Total 2013 2014 Company Jobs Jobs Revenue Rank Name 1 Arctic Slope Regional Corporation 4,175 10,082 $2,525,615,000 2 Bristol Bay Native Corporation 1,503 3,800 $1,835,894,000 3 NANA Regional Corporation Inc. 5,049 15,476 $1,700,000,000 4 Chenega Corporation 440 5,360 $1,044,000,000 6 Chugach Alaska Corporation 500 4,600 $609,000,000 7 Afognak Native Corp./Alutiiq 186 4500 $526,000,000 8 Calista Corporation 450 1,600 $368,914,000 10 Ukpeagvik Inupiat Corporation (UIC) 588 3340 $320,716,000 11 Doyon, Limited 1,348 2,238 $318,552,461 14 Bering Straits Native Corporation 207 1,237 $242,000,000 15 Olgoonik Corporation 133 986 $215,200,000 16 Cook Inlet Region Inc. 1319 1909 $214,930,000 17 Koniag, Inc. 57 615 $202,142,000 18 Ahtna, Inc. 375 1,715 $200,000,000 20 Sealaska 60 1,271 $164,950,000 23 Goldbelt, Incorporated 196 777 $146,033,239 27 The Tatitlek Corporation 75 937 $124,840,398 29 Aleut Corporation 159 429 $116,260,627 34 Sitnasuak Native Corporation 102 672 $93,147,344 Total Alaska Native Corporations 16,922 61,544 $10,968,195,069 Engineering 2014 Company Rank Name 44 DOWL HKM Total Engineering

Alaska Jobs 175 175

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Total Jobs 415 415

2013 Revenue $62,309,000 $62,309,000

Construction Alaska 2014 Company Jobs Rank Name 21 Davis Constructors & Engineers, Inc. 100 36 Watterson Construction Co. 100 38 Cornerstone General Contractors Inc. 50 42 Roger Hickel Contracting Inc. 50 Total Construction 300

Total Jobs 100 101 50 50 301

2013 Revenue $163,639,861 $90,000,000 $89,000,000 $67,963,073 $410,602,934

Finance, Insurance, Real Estate 2014 Company Alaska Rank Name Jobs 9 Alaska USA Federal Credit Union 1,340 13 The Wilson Agency LLC 20 26 First National Bank Alaska 694 48 Credit Union 1 323 Total Finance, Insurance, Real Estate 2,377

Total Jobs 1,739 22 694 327 2,782

2013 Revenue $337,200,000 $267,195,622 $131,005,000 $52,618,949 $788,019,571

Healthcare 2014 Company Rank Name 45 Geneva Woods Total Healthcare

Alaska Jobs 190 190

Total Jobs 250 250

2013 Revenue $60,000,000 $60,000,000

Industrial Services 2014 Company Rank Name 19 Udelhoven Oilfield System Service

Alaska Jobs 695

Total Jobs 780

2013 Revenue $166,229,644

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105 250 185 200 105 1540

105 481 185 200 105 1856

$134,000,000 $116,798,739 $105,600,000 $57,400,000 $55,000,001 $635,028,384

Manufacturing 2014 Company Rank Name 41 Builders Choice Inc Total Manufacturing

Alaska Jobs 210 210

Total Jobs 285 285

2013 Revenue $73,002,000 $73,002,000

Mining 2014 Company Rank Name 32 Usibelli Coal Mine Inc. Total Mining

Alaska Jobs 175 175

Total Jobs 210 210

2013 Revenue $103,000,000 $103,000,000

Retail & Wholesale Trade 2014 Company Rank Name 24 Three Bears Alaska, Inc. 39 Anchorage Chrysler Dodge Center 43 Seekins Ford Lincoln, Inc. Total Retail & Wholesale Trade

Alaska Jobs 396 95 115 606

Total Jobs 441 95 115 651

2013 Revenue $136,632,222 $85,550,000 $67,581,913 $289,764,135

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Telecommunications 2014 Company Rank Name 33 MTA Inc. Total Telecommunications

Alaska Jobs 297 297

Total Jobs 297 297

2013 Revenue $99,000,000 $99,000,000

Transportation 2014 Company Rank Name 5 Lynden Inc. 22 Ravn Alaska 37 Vitus Energy LLC 40 PenAir 49 Tatonduk Outfitters Ltd. Total Transportation

Alaska Jobs 788 950 50 450 295 2533

Total Jobs 2,540 950 50 500 299 4,339

2013 Revenue $875,000,000 $160,000,000 $89,600,000 $78,300,000 $51,950,000 $1,254,850,000

Utility 2014 Company Rank Name 12 Chugach Electric Association, Inc. 31 Matanuska Electric Association Inc. 35 Homer Electric Association Inc. Total Utility

Alaska Jobs 300 168 158 626

Total Jobs 300 168 158 626

2013 Revenue $305,308,427 $105,000,000 $92,000,000 $502,308,427

Total Employees & Gross Revenues Reported

25,951 73,556 $15,246,079,519

October 2014 | Alaska Business Monthly

ALASKAâ&#x20AC;&#x2122;S TOP 49ERS 2014 | 49ERS BY INDUSTRY CLASSIFICATION

Industrial Services Continued 25 Construction Machinery Industrial 28 Cruz Companies 30 Colville, Inc. 46 Alaska Industrial Hardware Inc. 47 Airport Equipment Rentals Total Industrial Services

ALASKA’S TOP 49ERS 2014 | 49ERS FIVE YEAR RANK & REVENUE

2014 2014 2013 Gross 2013 2012 Gross 2012 2011 Gross 2011 2010 Gross 2010 2009 Gross Top 49ers Rank Revenue Rank Revenue Rank Revenue Rank Revenue Rank Revenue Afognak Native Corp./Alutiiq 7 $526 7 $535 7 $711 6 $783 6 $766 Ahtna, Inc. 18 $200 19 $190 20 $200 13 $243 14 $231 Airport Equipment Rentals 47 $55 47 $54 ~ $49 ~ ~ ~ $53 Alaska Industrial Hardware Inc. 46 $57 44 $59 44 $53 49 $50 ~ $51 Alaska USA Federal Credit Union 9 $337 10 $338 9 $311 10 $302 11 $312 Aleut Corporation 29 $116 34 $98 26 $148 22 $159 24 $146 Anchorage Chrysler Dodge Center 39 $86 41 $78 41 $65 48 $52 ~ $50 Arctic Slope Regional Corporation 1 $2526 1 $2629 1 $2550 1 $2332 1 $1945 Bering Straits Native Corporation 14 $242 17 $213 17 $206 18 $190 21 $162 Bristol Bay Native Corporation 2 $1836 2 $1962 2 $1966 3 $1667 2 $1392 Builders Choice Inc 41 $73 45 $58 ~ $39 ~ ~ ~ ~ Calista Corporation 8 $369 8 $404 10 $300 14 $231 16 $203 Chenega Corporation 4 $1044 4 $1100 4 $1100 4 $1100 5 $1077 Chugach Alaska Corporation 6 $609 6 $709 6 $766 5 $937 4 $1105 Chugach Electric Association, Inc. 12 $305 13 $267 11 $284 12 $258 12 $290 Colville, Inc. 30 $106 32 $110 39 $81 39 $78 44 $76 Construction Machinery Industrial 25 $134 26 $145 37 $92 38 $90 40 $87 Cook Inlet Region Inc. 16 $215 15 $238 19 $201 19 $188 43 $80 Cornerstone General Contractors Inc. 38 $89 ~ $50 ~ $41 ~ $35 ~ ~ Credit Union 1 48 $53 ~ $50 ~ $48 ~ $47 ~ $48 Cruz Companies 28 $117 ~ $83 ~ ~ ~ ~ ~ ~ Davis Constructors & Engineers, Inc. 21 $164 16 $218 32 $119 31 $120 23 $152 DOWL HKM 44 $62 43 $59 ~ $51 ~ $50 49 $54 Doyon, Limited 11 $319 9 $338 8 $468 8 $459 10 $416 First National Bank Alaska 26 $131 27 $144 25 $143 23 $151 22 $157 Geneva Woods 45 $60 ~ $39 ~ ~ ~ ~ ~ ~

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October 2014 | Alaska Business Monthly

ALASKA’S TOP 49ERS 2014 | 49ERS FIVE YEAR RANK & REVENUE

2014 2013 Gross 2013 2012 Gross 2012 2011 Gross 2011 2010 Gross 2010 2009 Gross 2014 Top 49ers Rank Revenue Rank Revenue Rank Revenue Rank Revenue Rank Revenue Goldbelt, Incorporated 23 $146 22 $157 29 $135 26 $139 35 $108 Homer Electric Association Inc. 35 $92 36 $91 38 $84 44 $72 39 $87 Koniag, Inc. 17 $202 30 $129 30 $128 24 $150 31 $116 Lynden Inc. 5 $875 5 $885 5 $850 7 $720 7 $680 Matanuska Electric Association Inc. 30 $105 33 $106 34 $105 37 $94 34 $110 MTA Inc. 33 $99 35 $96 35 $100 34 $106 37 $109 NANA Regional Corporation Inc. 3 $1700 3 $1800 3 $1500 2 $1600 3 $1260 Olgoonik Corporation 15 $215 18 $199 22 $178 29 $133 26 $135 PenAir 40 $78 40 $81 40 $72 41 $72 45 $70 Ravn Alaska (Formerly Era Alaska) 22 $160 24 $150 28 $136 30 $120 30 $117 Roger Hickel Contracting Inc. 42 $68 ~ $49 46 $50 46 $58 46 $67 Sealaska 20 $165 12 $312 14 $259 15 $224 17 $196 Seekins Ford Lincoln, Inc. 43 $68 42 $75 42 $64 43 $66 ~ $54 Sitnasuak Native Corporation 34 $93 ~ $110 ~ ~ ~ ~ ~ ~ Tatonduk Outfitters Ltd. 49 $52 49 $51 45 $51 ~ $47 ~ $41 The Tatitlek Corporation 27 $125 28 $129 27 $137 32 $111 36 $108 The Wilson Agency LLC 13 $267 14 $254 15 $245 17 $205 15 $206 Three Bears Alaska, Inc. 24 $137 29 $130 31 $121 33 $109 32 $111 Udelhoven Oilfield System Service 19 $166 25 $148 18 $202 28 $134 27 $132 Ukpeagvik Inupiat Corporation (UIC) 10 $321 11 $312 12 $279 11 $271 9 $292 Usibelli Coal Mine Inc. 32 $103 31 $112 33 $108 35 $97 38 $91 Vitus Energy LLC 37 $90 ~ $62 ~ ~ ~ ~ ~ ~ Watterson Construction Co. 36 $90 38 $89 43 $63 40 $75 42 $90 Total Top 49er Gross Annual Revenue $15,246 $16,072 $16,155 $15,243 $14,546

ALASKAâ&#x20AC;&#x2122;S TOP 49ERS 2014 | FEATURED 49ER

Cruz Construction Specialized skills, international scope By Julie Stricker

hirty-five years of construction experience in remote sites in Alaska has given Dave Cruz no shortage of stories to tell. He worked on the trans-Alaska oil pipeline and helped build the oilfields at Prudhoe Bay. Then he and his wife, Dana, started Cruz Construction, which under the umbrella of Cruz Companies, has grown to be one of the largest in Alaska. It employs hundreds of people and

handles projects all over the state, in the Lower 48, and even has operations in Australia. Cruz workers have built oilfield support camps, transported barges of heavy equipment and building supplies to landing sites on shallow riverbanks, and were on the first wave of the sealift for Point Thomson in the Beaufort Sea.

Strong in Logistics and Support â&#x20AC;&#x153;A lot of my work career has been in re-

Alaska Business Monthly | October 2014 www.akbizmag.com

ALASKA’S TOP 49ERS 2014 | FEATURED 49ER

Four Cruz Construction rock trucks make their way to a material site on Tofty Road near Manley Hot Springs on Wednesday, August 20, 2014. Cruz Construction began the two year “Road to Tanana” project in July. Photo by Stephen Nowers/ Courtesy of Cruz Construction

Cruz Construction Steiger pulling a rig component onto an ice pad at Umiat during the 20132014 drilling season while providing rig support to Linc Energy. Photo by Stephen Nowers/Courtesy of Cruz Construction

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October 2014 | Alaska Business Monthly

Photos by Stephen Nowers/Courtesy of Cruz Construction

ALASKA’S ALASKA’S TOP 49ERS TOP2014 49ERS | TOP 201449ERS | FEATURED DIRECTORY 49ER

Cruz Construction’s Copper River mancamp (inset) at the company’s staging area at mile 359 of the Dalton Highway. Cruz Construction loader prepares to unload a rig component on the Cruz staging area in March during the 2013-2014 drilling season.

Photo by Stephen Nowers/Courtesy of Cruz Construction

Cruz Construction employee Mike Urban prepares to place a duck pond underneath his ejector truck in Deadhorse after Cruz demobilized from an ice road construction job in March 2014.

mote Alaska,” says Cruz. “That’s one of the things all the Cruz companies excel in. We’re very, very strong in logistics and support and being able to operate off the road system.” And while Cruz Companies have handled many large projects, Cruz says the most notable project he worked on was a small-scale, but intense, task. In November 2010, an F-22 Raptor crashed in Interior Alaska, killing pilot Jeff Haney. The crash site was located in frigid, rugged terrain in the Talkeetna Mountains. Cruz Construction was selected to build a camp for forty-two people twenty miles off the road system Cruz Construction equipment haul rig components up an ice road to a Linc Energy ice pad in Umiat, Alaska, during the 2013-2014 winter season. Cruz Construction provided rig support for Linc Energy’s drilling program in Umiat. Photo by Stephen Nowers/Courtesy of Cruz Construction

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Alaska Business Monthly | October 2014 www.akbizmag.com

Photo by Stephen Nowers/ Courtesy of Cruz Construction

to house the military during recovery operations. It was a job that required rapid deployment and complicated logistics, areas in which Cruz has decades of experience. Even after decades in business, Cruz remains a hands-on manager and traveled out to the crash site with officials. “It was sobering to think of what happened there,” Cruz says. “It’s not like some of the things we do where we go very remote and support the job. This was a very personal one. It’s one of those you really thought about what you’re doing up there. It wasn’t just a job. It was a responsibility.”

Deep Ties to State Alaska is important to Cruz, and his ties to the 49th state run deep. He was born and raised in Fairbanks and his wife Dana’s family moved to Palmer in 1929. Dave Cruz worked on the pipeline and in the oilfields, projects that had a huge impact on Cruz and his desire to start his own company. He and Dana started Cruz Construction in 1981. Today, Cruz Construction, which specializes in oilfield support services and heavy civil construction, is one of four companies under the Cruz Companies banner. Headquarters are in Palmer. “The company has gone through quite a transition,” Dave Cruz says. “It was the ability to be a young person in Alaska and have the opportunity to work on the trans-Alaska [oil] pipeline and then [go] to Prudhoe Bay to work on building the oilfields. It was quite an impact—on that project—for myself and on a lot of people.” Cruz is proud of his company’s expertise and environmental record. With a short construction season in the Arctic, Cruz uses innovative and www.akbizmag.com

October 2014 | Alaska Business Monthly

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ALASKA’S TOP 49ERS 2014 | FEATURED 49ER

Cruz Construction employees load a Cruz Marine barge at the Trading Bay barge landing across Cook Inlet from Nikiski on Monday, August 11, 2014. Cruz Construction is supporting Cook Inlet Energy’s drilling program on the west side of Cook Inlet. (iPhone image)

ALASKA’S TOP 49ERS 2014 | FEATURED 49ER

The Cruz Marine tug Ari Cruz and barge Innoko cross Cook Inlet on their way from Nikiski to Trading Bay in October 2013. Photo by Stephen Nowers/Courtesy of Cruz Construction

Photo by Stephen Nowers/ Courtesy of Cruz Construction

A Cruz Construction truck unloads the Cruz Marine barge Innoko at the Trading Bay landing in October 2013. The tug Ari Cruz is at right.

efficient methods to build ice roads so its clients can meet their goals. They use specialized equipment that can be transported via C-130 Hercules planes to nearby airstrips and employ a fleet of low ground-pressure vehicles, which reduce stress on the fragile tundra. The company’s other subsidiaries also focus on using the right tools and techniques to get the job done right. 102

Cruz Marine Cruz Marine, started in 2008, is a partnership with Cook Inlet Regional, Inc. (CIRI). It oversees a fleet of shallowdraft tugs and barges that offer construction support throughout coastal Alaska and in Australia. Two of the tugs have specialized double-hull construction, making them ideal for icy waters. “Shallow draft is our specialty,” Cruz

says. “When you want to bring a load of freight into the North Slope or western Alaska, it’s very shallow, so a conventional tug that comes out of the Lower 48 with a sixteen-foot draft isn’t going to work. They’re not going to be able to get to the beach.” Cruz’s tugs, the M/V Dana, M/V Ari, and M/V Millie, have shallow drafts that allow them to take large barges and land them on the beach so cargo can be off-loaded. While the M/V Ari and M/V Millie operate in Cook Inlet and Western Alaska, the M/V Dana is working off the coast of Australia. “Here’s a milestone for a little homegrown company,” Cruz says. “Two years ago we had a tug at Point Barrow, Alaska, working and we had one on Barrow Island off Australia.”

Cruz Energy Services Cruz Energy Services, based in North Dakota, provides oilfield support services in North Dakota, Wyoming, Montana, and Colorado. It is also a partnership with CIRI. “CIRI is a great partner—a great

Alaska Business Monthly | October 2014 www.akbizmag.com

ALASKA’S TOP 49ERS 2014 | FEATURED 49ER

Photo by Stephen Nowers/Courtesy of Cruz Construction

The Cruz Marine barge Innoko approaches the landing at Trading Bay while under tow by the tug Ari Cruz in October, 2013.

group of people to work with. Same values as we have,” Cruz says. Cruz Energy Services specializes in moving rigs and crane services, as well as roustabout and environmental services, in the booming oilfields of the upper Plains and Mountain states. “We move more drill rigs in one month than the state of Alaska combined does in two years,” Cruz says. And, by partnering with sister company Cruz Marine, Cruise Energy Services can move rigs across both land and sea. The fourth arm of the Cruz Companies deals with specialized transportation and rigging, specializing in large oversize loads in oilfields. “Today, they’re moving a 170,000-pound generator in Kodiak and a large 140-ton crane in Anchorage,” Cruz notes.

Awards and Accomplishments Over the years, Cruz Companies have won numerous awards, including the Commander’s Medallion from the US Army Corps of Engineers for a 1999 dredging project on the Chena River. In 2002–2003, it was awarded the Associated General Contractors of America Excellence in Construction Award for the Drift River Crossing Pipeline Replacement and Northern Intertie Ice Roads projects. One of its biggest challenges came in the winters of 2007–2009 when Cruz supported the drilling of five wells in the White Hills south of Prudhoe Bay for Chevron. “We had all the responsibility from getting the drill rigs there and modules set up to making sure there was butter www.akbizmag.com

October 2014 | Alaska Business Monthly

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Photo by Stephen Nowers/ Courtesy of Cruz Construction

there on the table,” Cruz says. “Everything. It was seven months of planning and working with Chevron.” In the process, Cruz workers had to solve any number of problems, but that’s part of doing work in remote areas, he says. “You’ve always got to overcome adversity because you always have weather, you have permitting challenges,” he says.

The project was a success. Although the project was fifty miles off the road system and Cruz had to build ice roads and a runway, among other aspects of the project, the company completed 232,000 man-hours without an accident. “At that time, that was one of the largest jobs we’d undertaken,” Cruz says. He credits the company’s workers, some of whom have been with Cruz for

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A convoy of Cruz Construction Steigers haul rig components across the tundra to the company’s staging area on the Dalton Highway at the conclusion of the 2013-2014 drilling season. Cruz Construction provided rig support for Linc Energy’s drilling program in Umiat.

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more than fifteen years. Turnover is low and many of his seasonal workers are welcomed back year after year. “I work with a tremendous team, a group of very good, qualified people,” he says. He says his wife, Dana, is also behind the company’s success. “[She] has been at every board meeting in the morning and every board meeting in the evening,” Dave Cruz says. “We’re husband

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ALASKA’S TOP 49ERS 2014 | FEATURED 49ER

and wife, but we’ve also been able to work together as a team.” His son, Ben, and daughter, Arianna, also work for the family business. In addition, Dave Cruz has kept up relationships with people he’s worked with over his entire career. “Their grandchildren work here. And I have a lot of employees whose children are working for us now.” He paused, laughing. “It goes so fast. You think they can’t even keep their room clean and the next thing, they’re running heavy equipment.” Cruz also tips his hat to other top executives such as Jeff Miller, who has been with Cruz for ten years, and Randy Norman, who is in charge of all the equipment and maintenance crews for Alaska and North Dakota.

Going Forward The future looks bright, Cruz says. “We are a dominant fixture now in North Dakota,” Cruz says. “We just completed a brand new base of operations in Dickinson in North Dakota. Even though its administrative headquarters comes out of Palmer and Anchorage, Alaska, it’s based in North Dakota and North Dakota is so strong it’ll be there twenty years.” Cruz notes that his companies have strong competition here and in the Lower 48, and he’s glad to see it. “I’m very proud of our accomplishments,” he says. “We’re always striving to be better. I’ve got some great competitors and they keep us working very hard.” Alaska and the construction industry have been good to his family, he says. “I see a great future for Alaska,” Cruz says. “We are a resource state and that’s something we can never forget. People say you can’t have mining and fishing, but we need to be a state that has it all.” He cites North Dakota as an example of a state that is so far doing a good job of balancing its resources. “Look at all the oil and gas they’ve got,” he says. “They’ve got big agriculture, big manufacturing, big coal. And the whole world stops in Dickinson when pheasant season opens.” R Julie Stricker is a journalist living near Fairbanks. www.akbizmag.com

October 2014 | Alaska Business Monthly

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ALASKA’S TOP 49ERS 2014 | FEATURED 49ER

Sitnasuak Native Corporation Unprecedented growth for Nome village corporation By Nichelle Seely

Photo by Jenny Irene Miller

Sitnasuak Native Corporation real estate in Nome.

hen you have a cool company, you attract a lot of cool talent. That’s what Sitnasuak CEO David Hoffman says when asked about the success of the Nome-based village corporation. It’s an off-the-cuff response, a sound bite—but it reflects his conviction that people are the greatest corporate asset and that the best people want to work at a company that reflects their best values. When describing the accomplishments of Sitnasuak, the first thing Hoffman explains is what he calls the triple bottom line: profitability, social responsibility, and environmental sustainability. This is how he measures success. These three statements incorporate the

106

nineteen Iñupiaq values listed in the official mission of the company: spirituality, commitment to the family, love of children, respect of elders, respecting others, hard work, reverence toward nature, cooperation, sharing, honesty, obedience, patience, humor, humility, responsibility, pride in culture, avoidance of conflict, open communication, and speaking the Iñupiaq language. Sitnasuak isn’t unique in listing such things on their website or in their corporate advertising. Many organizations seek to soften their image by paying lip service to social values. However, at Sitnasuak, the company leaders take these concepts seriously. Yet, in order to en-

“We spend a lot of time talking about teamwork and recruiting remarkable people.”

— David Hoffman CEO, Sitnasuak Native Corporation

sure profitability, the first item cited in the triple bottom line is that the company must succeed in the marketplace. Sitnasuak is primarily a holding company. As such, it performs four main tasks: CFO Tom Delamater keeps track of the finances; VP Rich Dyson manages human resources; CIO Ubon Boutsomsi

Alaska Business Monthly | October 2014 www.akbizmag.com

— David Hoffman CEO, Sitnasuak Native Corporation

heads up the IT department, which provides overall technology support; and VP and shareholder Holly Poydack leads the team that provides management and administrative support.

ALASKA’S TOP 49ERS 2014 | FEATURED 49ER

“We’d like the company to eventually be run by the shareholders. Management understands that their job is to lead and to teach. It’s up to us to train and mentor the next generation. We’re not just sending them to classes, we’re building explicit career paths for them. We don’t just stand for shareholder hire, we stand for shareholder leadership. But it doesn’t ‘just happen.’ It needs to be planned for and nurtured.”

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Corporate Renaissance Three years ago, following a period of transition and change, the corporation had what Hoffman describes as “a bit of a Renaissance.” A new management team came on board (including Hoffman), and since then the company has enjoyed unprecedented growth. “We spend a lot of time talking about teamwork and recruiting remarkable people,” Hoffman says. Each of the subsidiaries has its own CEO, hand-picked and nurtured by the parent company. Bonanza Fuel LLC is the most profitable of the subsidiaries. The company operates the largest bulk fuel terminal in Nome as well as a gas station/convenience store located in the center of town. With a fleet of thirteen trucks, it also provides delivery of heating oil, diesel, gasoline, and propane to customers within Nome and the surrounding road system. Bonanza CEO Scott Henderson has increased the profitability of the company tenfold since coming on board. He earned his financial acumen through working as the branch manager and commercial loan officer at the local Wells Fargo for six years. In addition to providing a diviwww.akbizmag.com

October 2014 | Alaska Business Monthly

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ALASKA’S TOP 49ERS 2014 | FEATURED 49ER

Photo by Jenny Irene Miller

Above: A Sitnasuak Native Corporation subsidiary Bonanza Fuel truck in Nome. Right: Bonanza Fuel employees Mickey (Michael) Nichols and JT Sherman at work filling a fuel storage tank.

dend, Bonanza gives shareholders a break on the price of fuel, an especially welcome benefit to those residing in Nome. Up until recently, perhaps the least profitable of the subsidiaries was SNC Technical Services (SNCT), an apparel company that provides uniforms to the US military. Based in Puerto Rico, it employs hundreds of people and enjoys the benefits of sourcing directly to the government as a preferred vendor under “Buy American.” Despite this, the company was barely breaking even. Sitnasuak’s management team believes the problems stem from the lack of com-

petitive pressures that a non-preferred vendor must overcome with efficiency and smart business practices—simply stated, SNCT had gotten lax. A year ago, the corporation instigated a worldwide search for a new CEO to lead the subsidiary. They found Humberto Zacapa, a successful commercial apparel retailer in El Salvador. Zacapa has a degree in engineering, an MBA, and has studied in New York at the Fashion Institute of Technology. His academic background is backed up with plenty of street cred: he has successfully competed in the international clothing market

Photo by Jenny Irene Miller

against companies in India and China, where cheap labor wields a huge economic advantage. Even better, Zacapa speaks Spanish as his native language, unlike the previous CEOs who only spoke English and lived within the continental United States. He has moved to Puerto Rico where he can be a hands-on manager, and Sitnasuak expects that his expertise will turn SNCT around. SNC Financial Services is a fairly new venture, created a year and a half ago

Photo by Jenny Irene Miller

Above: A US stamp used for US military items made at the SNC Technical Services apparel factory in Camuy, Puerto Rico. Right: A textile worker at the SNC Technical Services factory in Camuy, Puerto Rico. 108

Photo by Jenny Irene Miller

Alaska Business Monthly | October 2014 www.akbizmag.com

A textile worker at the SNC Technical Services factory in Camuy, Puerto Rico.

with the acquisition of two title insurance companies in Anchorage and Wasilla. In keeping with Hoffman’s emphasis on getting the best people, he recruited longtime business leader Richard Strutz as the CEO. Strutz spent forty-two years working for Wells Fargo, the last twenty years as CEO. He is known as one of the top executives in Alaska. Hoffman emphasizes that it isn’t only Strutz’s financial acumen that makes him a respected businessman. He is also known for his people skills and compassion, qualities that Hoffman assigns equal value to. SNC Properties, one of the original subsidiaries, had been the management and holding company for Nanuaq, a residential and commercial property firm in Nome. In addition to collecting rents as revenue from lessors, Sitnasuak shareholders are also eligible for reduced rent on the apartments, another way the corporation can serve its members. Nanuaq has now branched out to include Sitnasuak Construction Services, an 8(a) certified organization that conwww.akbizmag.com

tracts with federal agencies to build facilities. Sitnasuak Construction Services also provides construction services to other Sitnasuak subsidiaries, most recently building a tank farm for Bonanza Fuel. Nanuaq Development also falls under the umbrella of SNC Properties. In partnership with Pfeffer Development, Sitnasuak Construction Services is expanding its operations into Anchorage by harnessing local expertise. Tudor Bingo now belongs to Nanuaq Development. Hoffman is a strategic planner, and in reviewing the commercial entities under his sway, he recognized that all of them were in mature, stable industries. To broaden the scope and income for Sitnasuak, he wanted to branch out into younger, developing fields that allowed for greater growth and opportunity while also benefitting the shareholders in deeper ways than simply increased dividends. Healthcare seemed to be the obvious answer, especially since the Affordable Care Act directly impacted Indian

Health Services, and the whole system is in flux. It just so happened that one of the experts in the field is Carolyn Crowder, a shareholder of Sitnasuak and Tribal CoChair of the National IHA Budget Formulation Work Group in Washington, DC. Crowder is now the CEO of the corporation’s newest subsidiary: Sitnasuak Health Solutions, providing medical self-insurance administration, consulting services, and outsourced billing.

Building Career Paths Hoffman is quick to point out that the profits and discounts are only surface benefits, just one part of the story. Another long-term goal of the corporation is to provide employment opportunities for the shareholders. “We’d like the company to eventually be run by the shareholders. Management understands that their job is to lead and to teach. It’s up to us to train and mentor the next generation.” To that end, Sitnasuak has established the Shareholder Executive Leadership Program. Under

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ALASKA’S TOP 49ERS 2014 | FEATURED 49ER

Photo by Jenny Irene Miller

ALASKA’S TOP 49ERS 2014 | FEATURED 49ER

Photo by Jenny Irene Miller

Sitnasauk Native Corporation shareholders and staff at the Anchorage shareholder reception.

this program, subsidiary workers who are also shareholders and who have innate leadership ability are identified and nurtured as future executives. Every quarter, these employees participate in a two-day retreat facilitated by an external consultant and two one-on-one executive coaching sessions per month. The group has literally been brought up within the company and trained to its high standards. They are now working to develop a greater talent bank of all 2,800 shareholders that the company can draw from. “We’re not just sending them to classes, we’re building explicit career paths for them. We don’t just stand for shareholder hire, we stand for shareholder leadership. But it doesn’t ‘just happen.’ It needs to be planned for and nurtured,” Hoffman explains. An example is Shareholder Executive Leadership Program participant Brittany Brown. After serving as Market Research Manager, Brown is now at Texas A&M, seeking her MBA and a master’s in industrial distribution. She’s slated to go to Puerto Rico and work at SNC Technical Services, and, to that end, she is participating in total immersion Spanish 110

classes and will be spending summers in Puerto Rico to learn about the culture and the specific dialect, as well as gain a greater understanding of the company she’ll be working for. Another example is Cameron Piscoya. He’s been chosen to be VP Richard Dyson’s successor as director of human re-

sources. Dyson intends to bring Piscoya on board over the course of the next three years. When Dyson retires, he’ll have a replacement with the experience and qualifications to make a seamless transition. Hoffman is quick to point out that no one is making Dyson do this; all the initiative has come from the vice

Brown

Piscoya

Alaska Business Monthly | October 2014 www.akbizmag.com

ALASKA’S TOP 49ERS 2014 | FEATURED 49ER

Nome, home of Sitnasuak Native Corporation. Photo by Peggy Fagerstrom

“I love to get up and come to work each morning. All the leaders here are passionate about what we do.”

— David Hoffman CEO, Sitnasuak Native Corporation

president himself. He wants to leave his position in capable hands—reflective of his commitment to the company and the shareholders he serves. For Hoffman, his position as CEO is more than a job. His wife and children are Doyon shareholders, so he knows firsthand how the ANCSA corporations can benefit the people they were created to serve. His children are emerging native leaders, and he loves to be identified as their father. His pride in their accomplishments eclipses that of his own. “I love to get up and come to work each morning. All the leaders here are passionate about what we do.” Everything that the company does is strategic, from the annual report to the website to the shareholder scholarship program. Sitnasuak’s success is not just the story of a company, it’s the story of the people who own and operate it. All subsidiary CEOs are required to develop a business plan, and Hoffman closed the interview by quoting a line from one of them: “When you come to a fork in the road, always take the most awesome one.” That’s a great prescription for success. R Anchorage-based Architect Nichelle Seely writes from across Alaska. www.akbizmag.com

Gateway to the Arctic

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ALASKA’S TOP 49ERS 2014 | FEATURED 49ER

Aleut Corporation Navigating international commerce By Russ Slaten Aleut Corporation subsidiary Aleut Facilities Support Services employee moving items in a warehouse in Colorado Springs, Colorado, for a federal client. Photo courtesy of Aleut Corporation

he Port of Adak is a view of the future for the Aleut Corporation. Not only is it in the region, translating to more opportunities for shareholders, it has the potential for exponential growth over generations to come. The Aleut Corporation, formed in 1972 under the terms of the Alaska Native Claims Settlement Act, or ANCSA, with 3,249 shareholders at one hundred shares each, has grown to a little over 3,800 shareholders through gifting and passing down shares from one generation to the next. Aleut Corporation lands, also settled under ANCSA, are nearly seventy-one thousand acres of surface lands and more than 1.5 million acres of subsurface land. The area stretches from the western tip of the Alaska Peninsula and covers the Aleutian Islands, Shumagin Islands, and the Pribilof Islands. The area’s primary industry is commercial fishing. Aleut Corporation CEO Dave Gillespie has spent more than twenty years in the energy business in the Lower 48 with experience ranging from leading start-ups

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to international power and gas entities, along with small utilities and renewable energy. Gillespie says what most attracts him to the Aleut Corporation is its mission to promote economic, cultural, and social growth for its shareholders. “When you work for a Fortune 500 company, for example, and you have five thousand shareholders and most of them are institutions, you don’t have that connection to consider how decisions impact the people. But when we [at Aleut Corporation] issue a dividend check to somebody, it matters. And it may be someone that we know personally. So there’s much more of a connection [to shareholders],” Gillespie says.

Boosting Business Lines The Aleut Corporation employs more than 650 people, with 160 in Alaska and the rest based elsewhere. Aleut Corporation owns nineteen subsidiaries and joint ventures with business lines under commercial and residential real estate, government contracting, fuel and port services, gravel operations, water utili-

ties, mechanical contracting, and oil well testing, and others. The Aleut Corporation holds its government sector companies in a separate league from its private sector companies. “Companies that are good at government contracting are uniquely not good at working in the commercial sector. I have not seen an entity make that transition well,” Gillespie says. “Our businesses that work for the government, work for the government. We’ve made a conscious choice to do that, because the way you do business with the government is a completely different animal than the way you do business with a commercial customer.” But there’s an exception to every rule, and in the case of the Aleut Corporation, that is Patrick Mechanical based in Fairbanks. The Aleut subsidiary fabricates and installs all-mechanical systems in the commercial, institutional, and government clients. The company is a full-service mechanical contractor for design-build, design-assist projects to serve a range of project sizes and complexities. Its ability to construct

Alaska Business Monthly | October 2014 www.akbizmag.com

Aleut Facilities Support Services employee providing technical services for a federal client. Photo courtesy of Aleut Corporation

Adak Venture Aleut Corporation Director of Business and Resource Development Janet Reiser has lived in Alaska for nearly thirty years. She has executive experience with NANA and Sea Lion Corporation subsidiaries and has a passion for projects. One of the biggest projects she aims to tackle in the long-run is the development of the Port of Adak. The Port of Adak is strategically located at the intersection of the North Pacific Great Circle Route and the Northwest Passage, Transpolar Route, and Northern Sea Route and can be used as a transshipping hub. “I look at Adak as a natural resource,” Reiser says. “For a long time, getting www.akbizmag.com

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ALASKA’S TOP 49ERS 2014 | FEATURED 49ER

and maintain mechanical systems makes it a leader in full-service mechanical contracting across all sectors. The Aleut Corporation has seen recent activity in government contracting due to one of its major subsidiaries Aleut Management Services, which serves as an umbrella with several companies underneath it in Colorado Springs, Colorado. One such company is Aleut Facilities Support Services LLC, which in July was awarded a $95,986,770 firm-fixed-price contract by the Department of Defense. The contract is for civil engineering support services like property management and maintenance, planning and engineering services, and environmental services and protection. Aleut Facilities Support Services was also awarded a $14,714,248 firm-fixed price contract for Cadet support services to be performed at the US Air Force Academy. Services are expected to be completed by July 31, 2019. Aleut won the contract out of nine offers. Aleut Corporation’s newest subsidiary acquisition is American Radiation Services, or ARS International. The Port Allen, Louisiana-based company specializes in environmental analysis and cleanup in radioactive materials at nuclear weapon test sites and in oil and gas fields. ARS has a running track record of more than 250 projects with the US Department of Energy, Department of Defense, the US Army Corps of Engineers, the Department of Homeland Security, and private industry. ARS International maintains a DOECAP/ DOD ELAP Approved and NELAP Certified, internationally recognized radiological and hazardous materials laboratory.

ALASKA’S TOP 49ERS 2014 | FEATURED 49ER

“I like working [at Aleut Corporation] because we’re able to take a long view [of our projects]. We can look at infrastructure development projects that are going to develop over twenty years. For Native Corporations, it’s built into their ethos to look generations ahead. So we’re developing the infrastructure now, and we’re putting the relationships in place now, because it’s that old saying: the journey is long, we must start right away. And we feel, not only is this a long-term play for Aleut Corporation, but we have a sense of urgency today to make something happen.”

—Dave Gillespie CEO, Aleut Corporation

things going out of Adak was difficult because of its location, and now, it’s exactly in the right location. So now it’s a bit of an unexpected resource. And we’re going to treat it as such—as a resource.” Adak is the site of the former Adak Naval Air Facility with deep, ice-free water all year long and extensive infrastructure. Adak has the capacity for 20 million gallons of underground fuel storage, more than 300,000 feet of warehouse space, two paved runways each more than 7,600 feet, and hangars, paved real estate, and available housing. “We’re talking to many different people about it; there’s a lot of interest in learning how it can work and how it helps at the state, national, and international levels,” Reiser says. Adak has forty thousand acres of easily accessible land available for custom built staging and storage facilities and space for a container transshipment terminal. Upgrades are currently under design to accommodate mega-tankers up to thirteen hundred feet long and fifty-five feet of draft. “I like working [at Aleut Corporation] because we’re able to take a long view 114

Alaska Business Monthly | October 2014 www.akbizmag.com

Shareholder Interests Managed through the Aleut Foundation, the Aleut Corporation funds scholarships, career development programs, paid internships in the healthcare and energy industries, and culture camps to enrich the lives of shareholders. This year’s shareholder dividends were equal to $7 per share paid in July, with an additional $500 elder benefit set to be paid in November. “We went through a significant contraction a few years ago. So we have spent our time in growing the business and putting additional lines of business in place and investing the company’s balance sheet into new things,” Gillespie says. The Aleut Corporation’s gross revenue for 2012 was nearly $98.1 million, and in 2013, it saw an $18 million increase in gross revenues to $116.2 million. “We are fortunate that we have a very strong balance sheet and solid cash position, and every day we balance the near-term needs of the company to pay dividends to its existing stakeholders, while all at the same time recognizing www.akbizmag.com

the growth of the future. So we want to create sustainable, long-term growth,” Gillespie says. As one of Alaska’s Top 49ers by gross revenue, he has words of wisdom for other aspiring Top 49er executives. Gillespie says the executive must surround themselves with a team of people who have a diversity of viewpoints, give them the opportunity to say what’s on their minds, ask sometimes difficult questions, and when they have an idea, give them some rope and let them run with it. “In my career, I’ve been successful not

because I’m the smartest guy, but because I’ve recognized that filling the room full of really smart people who all think differently gets you to a better answer,” Gillespie says. “So we work really hard here to put people in the room who have a different point of view and aren’t afraid to say what’s on their mind because, if everybody agrees with you all the time, then some of you are redundant.” R Russ Slaten is the Associate Editor for Alaska Business Monthly.

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ALASKA’S TOP 49ERS 2014 | FEATURED 49ER

[of our projects]. We can look at infrastructure development projects that are going to develop over twenty years,” Gillespie says. “For Native Corporations, it’s built into their ethos to look generations ahead. So we’re developing the infrastructure now, and we’re putting the relationships in place now, because it’s that old saying: the journey is long, we must start right away. And we feel, not only is this a long-term play for Aleut Corporation, but we have a sense of urgency today to make something happen.” Rural Alaska has some of the highest electricity costs, and Adak is no exception. Gillespie says Aleut Corporation is working with TDX Power in discovering ways to place affordable, sustainable energy sources in the city of Adak to make the port projects possible. “We have a vision in mind, we have the milestones in the path to achieve that vision, and we’re taking a systematic approach to that. Like any new product, you build demand and establish relationships, and eventually the appropriate infrastructure becomes obvious. And we’re excited about the [Port of Adak venture] as a game-change, legacy opportunity for our shareholders,” Gillespie says.

CONSTRUCTION

Bridge Building, Road Building Civil construction contractors stay busy By Margaret Sharpe

lthough the Knik Arm Crossing between the Port of Anchorage and Port MacKenzie is not under construction yet, and a life-saving road between King Cove and Cold Bay still isn’t approved, this summer’s construction season schedule was filled with many other bridge and road projects around the state. Successful completion in the tight timeframe takes innovation, flexibility, and a lot of planning.

Tanana Crossing One very large, very long (3,300 feet) project is the Tanana River bridge at Salcha. Kiewit was the prime contractor with Brice Civil Construction out of Fairbanks as one of multiple subcontractors. Brice provided more than three hundred thousand tons of rip rap for the bridge and levee. Groundbreaking took place in August 2011, and the ribbon-cutting ceremony followed thirty-six months later in August this year. The cost of the project was $188 million. “The railroad is very proud of the effort that we did,” says Clark Hopp, vice president of engineering for the Alaska Rail116

road Corporation. “We felt like we were good stewards of the federal government’s, i.e., the DOD’s money, and also good stewards of the state of Alaska. We appreciate the trust they had in us to deliver a project that was of benefit to the railroad but really a benefit to the entire state.” The bridge is the first phase of a larger four-phase project to extend rail services to Delta Junction. “Phase two will build the railroad from its current terminus at North Pole up to and across the Tanana River bridge to an off-load facility on the far side of the bridge,” Hopp says. “And then come phases three and four, which will ultimately build the railroad the rest of the way to Delta Junction.” Now complete, the access across the Tanana River will facilitate future construction and provide year-round access to the military training grounds on the Tanana Flats, the Joint Pacific Area Range Complex, or JPARC. “It really was a win-win,” Hopp says. The dual-purpose bridge will ultimately accommodate rail and road traffic, similar to the Whittier Tunnel, for which Kiewit was also the contractor. “It won’t

The bridge at Salcha is part of a larger project to bring the Alaska Railroad from North Pole to Delta Junction. Photo by Judy Patrick

Alaska Business Monthly | October 2014 www.akbizmag.com

The completed Tanana Crossing at Salcha.

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look anything like it, but it’s similar in its use. You can take a train, a car, or military equipment across,” Hopp says. The innovative delivery process used for the Tanana River bridge project played an important role in its success. Construction Management General Contractor method, or CMGC, allowed for risk management concurrent with construction. “We talked about the bad things that could happen and we mitigated them if we could or planned what we would do if we encountered them,” Hopp says. “So it was a testimony to the approach we took here that we didn’t really run into any perceived challenges.” The ribbon-cutting ceremony took place August 5 and was well attended by Alaskans and local, state, and federal elected officials. “Just a great day for Alaska to celebrate having the vision for a large project and then coming back together and celebrating the completion of it. Just a great day,” Hopp says.

Sterling Highway Alaska Road Builders, Inc., out of Soldotna, was the general contractor for the Sterling Highway pavement preservation project, which spanned from milepost 79 to 82.5. This stretch of the highway gets a lot of heavy traffic from commerce, oil service companies, and other urban vehicles, which causes road rutting. “We milled up and foamed a few sections and performed soil stabilization to firm up some areas that had questionable subbase materials,” says Chuck Davis, vice president. “Then we milled the rest of the sections because it was in a curving gutter template, so there wasn’t enough room to do an overlay. We had to get rid of some existing asphalt to be able to put some new asphalt in. [The process] essentially takes out the ruts in areas that are starting to erode and pothole. We fixed those problems and put in a new wearing surface for a smoother ride and longevity.” The $4.8 million project started May 15 and completed in early August. Subcontractors included Yenney & Associates Construction out of Homer, which did the signage; Pacific Asphalt, which did the striping; and Hot Wire Electric, which installed the piezo sensor—a traffic data collector that records traffic volume, vehicle speed, classification, and weight. “DOT [Alaska Department of 118

Transportation and Public Facilities] requires this,” Davis says. “This is the second or third one coming from Soldotna going to Anchorage that I’m aware of. They are all along the highway system.” “The job went surprisingly well,” Davis says. “In the past few years, we’ve experienced a lot of jobs that have come out later in the season, like June.” With the bureaucratic paperwork and DOT&PF reviews of project plans necessary before notice to proceed, a lot of time is taken up before contractors can actually break ground, making it challenging to complete a same-season project. The Sterling Highway pavement preservation work was well executed because it was awarded to Alaska Road Builders in October 2013, giving them the entire winter to complete all the paperwork. “Everything was in place to start work at the beginning of the [2014] season,” Davis says, “so we were ready to go the first of May.” Timing in Alaska is a well-known problem. “Probably any other contractor will tell you the same thing,” Davis says. “We all are excited about getting work. And whenever it comes out, we do it. We want to be competitive, but we need to keep our people busy. It’s not the Department’s fault. It’s timing. It just takes too long to get all these things in place for a single-season job.” Davis points out that the time crunch isn’t just about preapproval and paperwork. Oftentimes getting subcontractor schedules to align with the job in progress is another timing challenge. “Subs, most of them striping contractors, are so busy. They don’t do anything for a whole year and then all of a sudden they have to do three months’ worth of work in two weeks. So it’s very difficult to get everything accomplished, especially with a late-season job. With two weeks’ notice, if we don’t start the day that we are actually low bidder, it is impossible to accomplish [all tasks] in the timeframe. We were able to complete the job on time, on budget, mainly because we had the time to do their [DOT&PF] reviews and their paperwork.”

Parks Highway Jolt Construction and Traffic Maintenance, Inc., out of Big Lake, was the general contractor for the Palmer-Wasilla Highway Extension project, which runs

Alaska Business Monthly | October 2014 www.akbizmag.com

Photos courtesy of Jolt Construction and Traffic Maintenance

from the Parks Highway to Knik-Goose Bay Road. The $2.9 million pavement preservation began the first of June and was completed at the end of August. Subcontractors included ASRC Civil Construction, which did the hot mix asphalt paving, and Ogard Leasing Company, which did the pulverizing, asphalt milling, and motor grader finish work. The purpose of this DOT&PF job was to preserve the pavement laid down when the extension was initially built in the early 2000s. Cracks appear about every one hundred feet as a result of asphalt contraction and expansion in winter and summer. If the cracks aren’t filled in rapidly and water gets into the spaces, potholes form. In those areas, Jolt pulverized the existing road and then re-used that material as a base, adding four new inches of hot mix asphalt. “Part of the project, scope-wise, was to put a waterproofing membrane down on the bridge deck,” says Matt Ketchum, project manager at Jolt. “We placed bituthene—a thick waterproofing membrane—to keep water away from the bridge concrete and keep moisture out of the steel in the concrete.”

Above left: Side-dump being used to line a ditch on the Palmer-Wasilla Highway Extension project, creating a riprap flume (above), that looks like landscaping. Jolt Construction and Traffic Maintenance was the general contractor on the project. Left: Construction workers putting in a sign foundation on the project.

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Paving operations on the PalmerWasilla Highway Extension project. Photo courtesy of Jolt Construction and Traffic Maintenance

One contributor to the project’s success was the flexibility offered by DOT&PF. “We were restricted by the contract for the majority of the job to be completed at night, from 8 p.m. until 6 a.m.,” Ketchum says. “The State has been really a great partner with us and working with those restrictions. They were somewhat lenient on those depending on which side of the road we were working on.” For example, Jolt was able to, at times, start earlier when working on the eastbound lanes and finish later in the

morning if they were on the westbound lanes. “Really just kind of offsetting the commuter traffic. The traffic is very heavy. It is amazing that the road wasn’t there ten years ago [when] everybody was driving through downtown Wasilla. It gets a lot of traffic.” At the end of the project, Jolt added the striping. “Striping is really the icing on the cake for a road job or paving job,” Ketchum says. “It’s when you get all the nice crisp lines in. This job’s got pretty expensive striping specifications.

We actually had to mill [cut] into the asphalt one-quarter inch or so and then fill that void with what’s called methyl methacrylate or MMA. It is not a paint; it’s almost like a lacquer compound that practically pours into the milled indentions, creating nice bright lines. So when a motor grader goes by, it is not scraping off the paint; it glides right over the top during snow removal operations.” The lines aren’t the only attractive byproduct of the pavement preservation project. Jolt’s storm water erosion control—used to slow the water down as it passes through the ditches—is also pleasing to the eye. “We were able to find some innovative ways to do that work without disturbing much of the vegetation around it,” Ketchum says. “We put in a ditch grading rock in the three ditches—one on each side of the road and then one in the median. It’s a sixfoot-wide by one-foot-deep, shot-rock ditch lining that really almost looks like landscaping.” R Margaret Sharpe writes from Palmer.

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CONSTRUCTION

Hangar Foam Drop Photo essay by Julie Stricker

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Workers prepare for the foam drop in the ninety-thousand-square-foot hangar.

Bill Watterson of Watterson Construction stands on a balcony overlooking the hangar on Fort Wainwright (pictured on the left). The $72 million project, which also includes a fifty-thousand-squarefoot office and training facility, is due to be finished this fall. On August 21, workers tested the fire protection system, which included a â&#x20AC;&#x153;foam drop,â&#x20AC;? at right. To pass the test, the fire retardant foam had to cover the outlines of helicopters on the hangar floor in sixty seconds and fill the entire hangar with a meter (39.37 inches) of foam in less than four minutes. www.akbizmag.com

Foam begins to fall from the ceiling as the test begins. October 2014 | Alaska Business Monthly

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Left: About a minute into the test, most of the floor is covered with foam. Below: Less than three minutes into the test, the entire hangar is filled and the flow is stopped.

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Bill Watterson takes a picture of the foam drop, which was also videotaped from several vantage points.

The test exceeded expectations, filling the hangar with thirteen feet (3.962 meters) of foam, dwarfing Watterson as he stands on the ground floor. www.akbizmag.com

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ENVIRONMENTAL SERVICES

Photo courtesy of City of Seward

Lowell Point Lagoon in Seward.

Water & Wastewater: Seward

ater and wastewater are some of the most expensive utilities to provide and also the most vital to keeping a community healthy. The American Council for an EnergyEfficient Economy says municipal water and wastewater treatment systems “are among the most energy-intensive facilities owned and operated by local governments, accounting for about 35 percent of energy used by municipalities.” In Alaska, costs can be even higher than those national averages, especially in rural and remote communities where groundwater is brackish or soils unsuitable for building wastewater treatment facilities. But what’s happening with water and wastewater in Alaska’s urban areas? Are water utilities much different in Anchorage, Fairbanks, Juneau, and Mat-Su than Outside? What are the issues facing these utility providers? Since last year, Alaska Business Monthly readers have been learning about utilities across Alaska and finding out how each community is preparing for the future. 126

By Rindi White

he city of Seward wastewater treatment plant at Lowell Point may have one of the nicest views in the country, but city officials say the plant is giving off some offensive odors. City public works director W.C. Casey says the city is working on a $4 million fix that involves draining the two city sewage lagoons, removing sludge, and reworking its aeration system to get it working back at normal levels again. Seward’s Lowell Point plant can process up to 880,000 gallons a day, but generally the number is a bit lower: between 500,000 and 700,000 in the summer. That number is largely dependent on rainfall, Water and Sewer Foreman Nort Adelmann says. July was a relatively dry month, for example, and Adelmann says the city processed

about 500,000 gallons a day. August showed more rainfall, so the plant processed around 700,000 gallons per day. Seward’s treatment facility is self-regulating and pretty basic. Waste comes from about nine hundred customers around the city and travels through piping to some of the three lift stations and one pump station scattered around town. All of the waste goes through Pump Station 3 where a macerator grinds everything into small pieces for easier processing. After passing through the macerator, Adelmann says, the waste flows into the treatment facility and to the first of two lagoons. There, eight aerators typically pump air into the septage to allow bacteria to break it down. Adelmann says the first lagoon holds about 30 million gallons. Treated waste

Alaska Business Monthly | October 2014 www.akbizmag.com

“Sludge has accumulated for twenty years at our Lowell Point Wastewater Treatment Plant. We know it’s time for maintenance. In the process of preparing for that… we discovered that there is a problem with our aeration system. We’re not getting enough air in our pond to activate the biological process and that’s part of why our sludge is building up.”

—W.C. Casey Public Works Director, City of Seward

flows from the first lagoon slowly into the second, where it receives further “finishing” treatment. Once treated to acceptable secondary-treatment levels, the water flows out into Resurrection Bay. Casey says the city recently began preparing for maintenance on the septage lagoons and realized an issue with the aeration system that’s causing a larger problem: sludge buildup.

Accumulated Waste at Two Facilities: A Big Fix “Sludge has accumulated for twenty years at our Lowell Point Wastewater Treatment Plant. We know it’s time for maintenance. In the process of preparing for that… we discovered that there is a problem with our aeration system. We’re not getting enough air in our pond to activate the biological process and that’s part of why our sludge is building up,” Casey says. Because the aeration system isn’t working properly, he says, the sludge is building up faster than it generally would. And the untreated—or undertreated—waste is behind complaints the city has received about the smell. Last year, he says, city test results were in compliance, but dissolved oxygen levels were lower than usual. With closer monitoring, city workers have realized the aeration system may need repairs. “We believe there is a compromise in the piping to the facility, that there isn’t enough air going out to the water to keep a happy, active biological process,” Casey says. www.akbizmag.com

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Inspecting and repairing the piping will require draining the twenty-twofoot deep septage lagoons. “If we’re going to drain the pond to find out what our air problem is, it makes sense to remove the sludge as well, and inspect the liner—make sure air is moving. It’s just good management practice,” he says. With two lagoons, Casey says, the city sewer clients shouldn’t see any interruption in service. But the city’s second wastewater treatment plant, serving Spring Creek Correctional Center, is a different story, he says.

Sludge removal used to be a relatively easy job, Casey says: haul the waste fifty miles out to sea to dump it, and that’s it. But regulations have since changed, and now sludge removal is very closely monitored, he says.

Pooling Resources to Pay, Future Plans on Hold The city is using a variety of sources of funding to pay for the work. The Alaska Legislature appropriated $1.3 million for the project, and Casey says the city water fund, a reserve fund, is loaning the city sewer fund $500,000. A legisla-

increase by 5.2 percent in both 2014 and 2015. According to the city budget overview, the increases are aimed at addressing the repairs needed at Lowell Point Sewage Lagoon. The wastewater enterprise fund is expected to bring in just over $1 million in fiscal year 2014, according to the city budget, and expenses—even with the rate increase—are expected to be about $111,000 more than revenues. “While these rate increases do not achieve the goal of fully funding depreciation in any of the enterprise funds, they are essential to the city’s ability to

“If we’re going to drain the pond to find out what our air problem is, it makes sense to remove the sludge as well, and inspect the liner—make sure air is moving. It’s just good management practice.”

—W.C. Casey Public Works Director, City of Seward

The Lowell Point facility was built in 1982; Spring Creek Correctional Center’s facility in 1987. Spring Creek is significantly smaller, set up to treat the sixty thousand gallons of influent coming from the prison each day. Over the years, sludge has built up at that facility also, Casey says, and maintenance is in order. But draining the single collection pond means taking the facility offline temporarily. Earlier this year, the city solicited bids to do the repair work. Bids were opened in August and the city was in the process of awarding the contract to Merrell Brothers, a nationwide biosolids company based in Indiana. “They’re premier people in regards to this project. They do sludge removal all over the country,” Casey says.

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tive appropriation for capital projects at Spring Creek Correctional is expected to offset the work being done at the prison’s wastewater system, he says, and the city is using a combination of low-interest loans from the Alaska Department of Environmental Conservation and other sources to complete the monetary picture. For the city of about three thousand people with a general fund budget of $10 million, a $4 million capital project is a sizable investment. After years of static rates, city leaders in 2012 agreed to adjust rates for water, sewer, and electricity to automatically adjust for yearly changes to the Consumer Price Index, or CPI. This year, all enterprise funds are increasing by 2.6 percent except wastewater, which will

begin funding its most critical capital needs,” states James Hunt, Seward City Manager, in the 2014-2015 city budget transmittal letter. The unplanned project is placing a little stress on other water and wastewater projects, Casey says. The city is deferring other projects until both wastewater treatment plants are back in operation. None of the deferred projects should compromise day-to-day operations at the wastewater treatment plant, he says, but if they are deferred long-term, it could put the city in a bad spot. “We have other projects that need to be done before we have catastrophic failure,” he says. But the problem of deferred maintenance is a national problem, he says, not just one the city of Seward is dealing with. Casey says deferred maintenance list includes city plans to build a new water storage tank and make repairs to the other two bulk city water tanks. The lift and pump stations around the city are roughly thirty-five years old and need to be assessed and perhaps repaired or replaced, he says, and the city has miles of collection lines that are sixty years old or older and should be systematically replaced. Budgeting for repairs is difficult, he says. “With a small community, you can’t increase rates to [the point that] you

Alaska Business Monthly | October 2014 www.akbizmag.com

“With a small community, you can’t increase rates to [the point that] you chase people off. We depend on a lot of creativity and depend on the municipal loan and grant program a lot.”

—W.C. Casey Public Works Director, City of Seward

chase people off,” he says. “We depend on a lot of creativity and depend on the municipal loan and grant program a lot.”

City Offers Clean Water, Minimally Treated One of the benefits of living in Seward is the fresh city water. City water comes from five wells, each around one-quarter mile from the next, and Adelmann says the water is pure enough that the city only uses chlorinated gas to keep service lines disinfected. Like the wastewater system, the water operation is pretty basic: a looped system with two zones providing pressurized

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water to its roughly nine hundred customers. The city has two water storage tanks, one that holds 220,000 gallons and a second that holds 400,000 gallons; together they store nearly a full day’s consumption during peak summer usage. Seward has two major industrial users: the Alaska Railroad dock, which supplies water to cruise ships, generally twice a week during the cruise season, and the Icicle Seafoods Seward plant, which cans and packages salmon for export. Adelmann says most of the time the city has plenty of water for all of its customers: residents, businesses, tourists, and both industrial users. But occasionally water usage spikes and the reserve tanks start dropping. When that happens, he says, the city may have to ask the industrial users to cut back their water use. “We haven’t had a problem this season,” Adelmann says. Water usage in Seward, particularly in the summer, reflects how busy operations are at Icicle Seafoods, he says. “The cannery is the big variable for us; they can move some water,” he says. Icicle Seafoods Seward Plant Manager Charles McEldowney says the

plant recently rerouted part of its water system to take advantage of clean used water that previously had been going down the drain. The cannery uses a significant amount of water to cool cans of salmon that were in pressure cookers. The water had touched cans but not salmon, he says, so the rerouting project gave plant operators a chance to reuse the water either in plant boilers or to put it through the troughs that wash cannery waste, such as fish heads and guts, down a drain system. McEldowney says it’s difficult to say just how many gallons of water the plant is saving each month, as monthly usage rates vary widely based on the amount of fish coming into the plant. “It’s obvious the water in that tank wasn’t paid for a second time,” he says. “It’s a start. When you start finding projects like that, maybe it opens your eyes to another and another. It builds a culture in a system.” R Rindi White is a freelance journalist living in Palmer.

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Legal Speak

By Renea I. Saade

2014 Employment Law Update for Federal Contractors

ccording to many reports, federal contractors employ as much as one-fifth of the US workforce. As a result, the federal contracting workforce is usually the first to see new developments in the area of employment law. While not yet over, 2014 has already brought a number of significant employment law changes for federal contractors that will likely have a noticeable impact on Alaska’s business community. As your company prepares for the upcoming calendar year, please keep in mind the following important developments: Minimum Wage Increase: Pursuant to a February 12, 2014, Executive Order, the federal minimum wage will increase to $10.10 per hour effective January 1, 2015. The Department of Labor released a proposed rule to implement this new minimum wage (RIN1235-AA10) and the final rule is expected to issue by October 1, 2014. Already positioned to begin enforcement of the new wage rate, the Department of Labor also issued a memorandum of guidance (Memo No. M-1409 dated June 12, 2014) to all federal agencies outlining enforcement suggestions. In addition to increasing the minimum rate, the new law eliminates an existing exception that allows employers to pay disabled workers who are in specialized certification programs less than other workers, thereby establishing that beginning January 1, 2015, all workers will be entitled to the $10.10 pay rate. Requirement to Disclose Violations: Pursuant to a July 2014 Executive Order known as the “Fair Pay and Safe Workplace Executive Order,” contractors looking to be awarded a new or renewed federal contract totaling $500,000 or more will soon be required to disclose any violation of fourteen federal statutes or equivalent state laws covering, among other issues, wage and hour (Fair Labor Standards Act), workplace safety (Occupational Safety and Health Act), family and medical leave 130

Saade

(Family and Medical Leave Act), collective bargaining (National Labor Relations Act), and civil rights protections (Title VII of the Civil Rights Act of 1964). Intended to help level the playing field for those contractors making a concerted effort to comply with these laws and adjust procurement procedures to disadvantage those who are not, the requirement, which is expected to go into effect in 2016, will require a disclosure of any violations within the last three years and will flow down to subcontractors. Notice of Pay and Prohibition Against Arbitration: The “Fair Pay and Safe Workplace Executive Order” also confirms that all contractors must ensure that employee pay stubs clearly spell out hours worked, rate of pay, and any pay deductions for each pay period. The Executive Order also forbids contractors with federal contracts totaling $1 million or more from imposing a requirement on its employees that they must submit tort claims arising from alleged sexual harassment, other forms of harassment, or workplace violations to arbitration. In other words, the Order preserves employees’ rights to pursue these claims in court instead of before a private arbitrator.

Prohibition Against Gender Identity Discrimination: For more than fifty years, employers governed by federal law, and federal contractors in particular, have been required to provide equal employment opportunities to all applicants and not to discriminate on the basis of race, sex, religion, and national origin. Over the years, the classes of employees protected have expanded to include pregnancy, military status, and sexual orientation. Pursuant to another July 2014 Executive Order, the protection now also extends to gender identity, and federal contractors are now prohibited from discriminating on the basis that someone is transgendered or does not meet the employer’s expectation of a particular gender identity. Additional Guidelines on Pregnancy Discrimination: The Pregnancy Discrimination Act has been in place since 1978, but it was not until recently that charges of pregnancy discrimination began to rise. In 2014, there were more than five thousand charges filed, representing an almost 40 percent increase from ten years ago. To help address the challenges that employers and employees are clearly facing concerning pregnant employees and how to lawfully accommodate pregnancy-related disabilities, the Equal Employment Opportunity Commission in July 2014 issued a thorough guideline (Guidance No. 915003, available at eeoc.gov). The guideline is incredibly helpful for federal contractors as well as all employers who want to ensure that they are providing a workplace free from pregnancy discrimination. R Renea I. Saade is a partner with Stoel Rives LLP’s Anchorage office. She regularly provides employment law advice to Alaska employers. Contact her at risaade@stoel.com. Please note that the foregoing is provided for educational purposes and is not intended to substitute as legal advice.

Alaska Business Monthly | October 2014 www.akbizmag.com

HEALTH & MEDICINE

How Will the Legalization of Marijuana Affect Employers? By Vance O. Knapp

urrently twenty states, including the District of Columbia, have legalized marijuana for medical use. In addition, Colorado and Washington State have legalized the “recreational” use of marijuana. The legalization of marijuana presents several issues with which employers will have to contend. This article will address the federal government’s response to state marijuana legalization, state laws affecting employers’ rights to restrict marijuana possession and use by their employees, and recommendations for employers seeking to regulate marijuana possession and use by their employees. In November 2012, Colorado and Washington became the first states to legalize possession of small amounts of marijuana for recreational use. Shortly thereafter, in a rare sign of bipartisan cooperation, Congressional Representatives Dianna DeGette (D) Denver, Colorado, and Mike Coffman (R), Aurora, Colorado, introduced the “Respect States’ and Citizens’ Right Act” into Congress. This proposed legislation would exempt states that have legalized marijuana from the provisions of the Federal Controlled Substances Act (CSA). Pursuant to the CSA, marijuana is classified as a Schedule I controlled substance, putting it in the same category as cocaine, LSD, heroin, and ecstasy. Physicians can prescribe Schedule II through V controlled substances; in contrast, marijuana remains illegal under federal law and cannot be prescribed by a physician. The “Respect States’ and Citizens’ Right Act” is still pending.

The Federal Government’s Response On December 14, 2012, in an ABC television interview with Barbara Walters, Walters asked the President his opinion of the legalization of marijuana in Colorado and Washington, to which the President responded, “We’ve got bigger fish to fry.” Nevertheless, President Obama directed Eric Holder, US Attorwww.akbizmag.com

Employers are not required to accommodate marijuana use under the Americans with Disabilities Act (ADA). The ADA does not require employers to accommodate an employee’s current use of any illegal drugs, including marijuana. However, if an employee has entered into a substance abuse treatment program for an addiction to marijuana, an employer will probably have to allow the employee to complete the treatment program as a reasonable accommodation. ney General, to review the conflict between existing federal law under which possession and use of marijuana is illegal with state laws that have legalized limited amounts of marijuana for either medical or recreational purposes. In February 2013, Holder said that the Department of Justice is in the process of formulating a response to the legalization of marijuana in Colorado and Washington. To date, the Department of Justice has not announced any opinions concerning state legalization of marijuana. If the Department of Justice decides to enforce the CSA, the Department of Justice could sue Colorado and Washington on the basis that the CSA preempts these states’ legalization efforts. The Department of Justice previously employed this litigation strategy in suing Arizona over its enactment of immigration laws. For now, marijuana distribution, possession, and use remain illegal under federal law in all states. Only Congress can legalize marijuana at the federal level, and it is unlikely this will happen in the near future. However, if pharmaceutical and tobacco companies become interested in the marijuana industry, there will likely be a lobbying effort in Congress to remove marijuana from its current Schedule I classification under the CSA. The Drug Free Workplace Act of 1988, which applies to some federal contractors and grantees, requires in part that covered contractors publish and issue a policy statement to all covered employees informing them that the unlawful manu-

facture, distribution, dispensation, possession, or use of controlled substances is prohibited in the workplace (subject to the federal contract) and specifying the actions that will be taken against the employee for failure to follow policy. However, the Drug Free Workplace Act does not require employers to terminate employees that test positive for marijuana and/or other controlled substances. Employers are not required to accommodate marijuana use under the Americans with Disabilities Act (ADA). The ADA does not require employers to accommodate an employee’s current use of any illegal drugs, including marijuana. However, if an employee has entered into a substance abuse treatment program for an addiction to marijuana, an employer will probably have to allow the employee to complete the treatment program as a reasonable accommodation. If the employee attempts to avoid termination by entering the treatment program knowing he or she is likely to test positive for marijuana, entry into the program will probably not shield the employee from termination.

Employer Regulation of Marijuana Possession and Use in Colorado and Washington Colorado voters in November 2012 approved State Constitutional Amendment 64, which legalized marijuana for recreational use. Amendment 64 contains two sections that provide employers with the ability to regulate marijuana possession and use by their employees:

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To date, the Department of Justice has not announced any opinions concerning state legalization of marijuana. If the Department of Justice decides to enforce the CSA, the Department of Justice could sue Colorado and Washington on the basis that the CSA preempts these states’ legalization efforts. “Nothing in this [Amendment] is intended to require an employer to permit or to accommodate the use, consumption, possession, transfer, display, transportation, sale, or growing of marijuana in the workplace or to affect the ability of employers to have policies restricting the use of marijuana by employees.” “Nothing in this [Amendment] shall prohibit an employer or any other entity who occupies, owns or controls a property from prohibiting or otherwise regulating

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the possession, consumption, use, display, transfer, distribution, sale, transportation, or growing of marijuana on that property.” Colorado voters had previously adopted Amendment 20, the Medical Marijuana Act, which permits patients to obtain limited amounts of medical marijuana for specific medical conditions but does contain language restricting the use of medical marijuana at work: “Nothing in this [Amendment] shall require any employer to accommodate the use of marijuana in any workplace.”

Task Force Created Shortly after Amendment 64 was passed, Colorado Governor John Hickenlooper (D) created a task force to recommend legislation regulating recreational marijuana. The task force was comprised of local business leaders including medical marijuana business owners, plaintiff employment lawyers, defense employment lawyers, and members of the public. A minority of the task force members wanted the state legislature to adopt an impairment standard requiring employers to show that an employee was “impaired” or “under the influence” before the employer could take

disciplinary action against an employee testing positive for THC, which is the active ingredient in marijuana. The task force did not adopt this impairment standard, but instead recommended to Governor Hickenlooper that existing law not be changed and that, consistent with the text of Amendment 64, employers should be free to enforce policies restricting the use of marijuana by either treating marijuana use like alcohol use under their employment policies or by maintaining a zero tolerance drug policy. The Colorado State Legislature adopted these recommendations and did not modify Colorado employment laws. Thus, Colorado employers can have policies restricting marijuana distribution, possession, and use in the workplace, and employers and landlords can completely prohibit marijuana possession on their premises. There have been several Colorado court cases addressing how employers can restrict medical marijuana in the (workplace). In the case of Benoir v. Industrial Claims Appeals Office, 262 P.3d 970 (Colo. Ct. App. 2011), the Colorado Court of Appeals held that authorized medical use of marijuana may insu-

Alaska Business Monthly | October 2014 www.akbizmag.com

The Colorado State Legislature adopted these recommendations and did not modify Colorado employment laws. Thus, Colorado employers can have policies restricting marijuana distribution, possession, and use in the workplace, and employers and landlords can completely prohibit marijuana possession on their premises. late an employee from state criminal prosecution but does not preclude the employee from being denied unemployment benefits for termination of employment for using marijuana in violation of an employer’s zero tolerance drug policy. The Benoir court went on to hold that medical marijuana users do not have “an unlimited constitutional right to use the drug in any place or in any manner.” In April 2013, the Colorado Court of Ap-

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peals in the case of Coats v. Dish Network construed whether the off-duty, offpremises use of medical marijuana was protected by Colorado’s Lawful Activities Statute. C.R.S. § 24-34-402.5. This statute prevents an employer from terminating an employee due to the employee’s having engaged in any lawful off-duty, off (employer’s) premises activity. Coats, a quadriplegic licensed by the State of Colorado to use medical marijuana pursuant to Amendment 20, alleged that he used marijuana within the limits of his license, never used marijuana on Dish Network’s premises, and was never under the influence of marijuana at work. Dish Network fired Coats after Coats tested positive for marijuana, which established a violation of the company’s drug policy. Coats sued Dish Network, alleging that his termination violated the Lawful Activities Statute. The Colorado Court of Appeals held that Coats’s use of marijuana was not lawful because marijuana remains illegal under federal law and upheld his termination of employment. Coats’s counsel promised to appeal this decision. In November 2012, voters in Washington State legalized marijuana for

recreational use by passing Initiative 502, which contains no provisions concerning marijuana possession or use by employees. Initiative 502’s predecessor, the Medical Use of Marijuana Act (MUMA), also does not address an employee’s possession or use of medical marijuana. In the case of Roe v. Teletech Customer Care Management (Colorado) LLC, 257 P.3d 586 (Was. 2011), the Washington Supreme Court held that MUMA did not provide a private cause of action for discharge of an employee who uses medical marijuana, either expressly or impliedly, nor did MUMA create a clear public policy that would support a claim for wrongful discharge in violation of such a policy.

Other Court Cases Construing Employee Use of Marijuana Several other jurisdictions have sided with employers in cases involving the use of medical marijuana by employees. In Ross v. RagingWire Telecommunications, Inc., 174 P.3d 200 (Cal. 2008), the California Supreme Court concluded that the plaintiff could not state a cause of action under California’s Fair Em-

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ployment and Housing Act based upon the company’s refusal to accommodate his use of medical marijuana. In reaching this conclusion, the court held that no state law can completely legalize marijuana for medical purposes because the drug remains illegal under federal law, even for medical use. Similarly, in the case of Johnson v. Columbia Falls Aluminum Company, LLC, 2009 Mt. Lexis 120 (Mt., March 31, 2009), the Montana Supreme Court held that Montana’s Medical Marijuana Act clearly provides that an employer is not required to accommodate an employee’s use of medical marijuana. In Emerald Steel Fabricators, Inc. v. Bureau of Labor and Industries, 230 P.3d 518 (Or. 2010), the Oregon Supreme Court held that Oregon’s Medical Marijuana Act was preempted by the Federal Controlled Substances Act, which expressly prohibits marijuana use without regard to medicinal purpose. The Oregon Supreme Court went on to hold that an employee currently engaged in illegal use of drugs is not entitled to reasonable accommodation. Most recently, in Savage v. Maine Pretrial Services, Inc., 58 A.3d 1138 (Me. 2013),

If an employer performs drug testing, the employer needs to ensure it is complying with all applicable federal, state, and local laws concerning drug testing. Employers should train their supervisors regarding what constitutes “reasonable suspicion” for compelling drug testing an employee who appears to be impaired or under the influence. the Maine Supreme Court held that the Maine Medical Use of Marijuana Act does not create a private right of action against an employer; rather, it protects against prosecution and penalties by governmental regulatory entities.

Illinois Legislature Codifies Employer’s Right to Have Drug Free Workplace Policy On August 1, 2013, Illinois Governor Pat Quinn signed into law House Bill 01, legalizing medical marijuana in Illinois. The Illinois medical marijuana act permits employers to maintain drug free workplace and zero tolerance drug policies and grants the employer the right to discipline employees for violat4.6x4.8 MPFC AKbusmo AD_61814.pdf ing such policies.

How Should Employers Regulate Marijuana Use by Their Employees? Employers should review their substance abuse policies to ensure their restrictions concerning illegal drug use include “recreational and medical marijuana.” An employer’s substance abuse policies should be easy to understand and consistently applied. If an employer performs drug testing, the employer needs to ensure it is complying with all applicable federal, state, and local laws concerning drug testing. Employers should train their supervisors regarding what constitutes “reasonable suspicion” for compelling drug testing an employee who appears to be impaired 1 6/18/14 PM or under the2:50 influence. Employers should

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ensure: (a) the confidentiality of its employee drug testing, (b) the proper collection of testing samples, (c) adherence to the chain of custody, (d) that tests are conducted by properly trained and supervised lab technicians using appropriate equipment, and (e) the results are communicated through a Medical Review Officer trained to render such judgments. If drug testing is the subject of a collective bargaining agreement, employers will be required to comply with testing and notification responsibilities as stipulated in the agreement. Policies prohibiting the use of marijuana by employees engaged in hazardous occupations will likely receive less scrutiny if challenged in court than will drug prohibition policies applied to non-hazardous occupations. Finally, employers should educate their employees concerning employees’ perceptions of their legal right, or perceived constitutional right, to use marijuana versus the employer’s expectations concerning marijuana use in the workplace. R

Vance O. Knapp, Esquire, is a partner in the Labor & Employment Law Department at Sherman Howard, LLC. Knapp has extensive experience representing employers in internal investigations, employee terminations, responding to discrimination and harassment claims, ADA accommodation issues, and defending employers in wage and hour matters. Knapp has litigated employment cases throughout the United States in federal and state courts and arbitrations. As a former prosecutor for the Denver City Attorney’s Office, Knapp tried over three hundred cases. Knapp has also lectured and written extensively on labor

and employment matters. He has been interviewed by KUSA 9News on “How Your Facebook Status Could Get You in Trouble at Work.” He has also been interviewed by Newsweek, The Denver Post, and The Denver Business Journal on the impact of medical and recreational marijuana in the workplace. Knapp is a past president of the Sam Cary Bar Association, Colorado affiliate of the National Bar Association. Currently, he is a board member of the The Legal Center for People with Disabilities and The Elderly. Knapp is a Colorado native. He graduated from the University of Colorado Law School, and Colorado State University. Knapp is admitted to practice law in Arizona and Colorado and can be contacted by email or phone: vknapp@shermanhoward.com, 303-299-8162.

This article first appeared in May on dri.org, the website of DRI, an international membership organization of all lawyers involved in the defense of civil litigation. It is reprinted with permission of the publisher and the author.

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HEALTH & MEDICINE

Taki ng Steps i n Advance of Marijuana I nitiative Alaska companies advised to review drug and alcohol policies By Vanessa Orr

n November 4, Alaskans will vote on an initiative to allow people age twenty-one and older to possess up to one ounce of marijuana and up to six plants; Ballot Measure 2 also allows for the creation of marijuana retail stores, cultivation facilities, infused-product manufacturers and testing facilities. While the measure does allow employers to maintain restrictions on marijuana use by employees, it may be advisable to review company policies and procedures beforehand, to be prepared if the initiative passes. “No stance is not a good stance; I cannot reiterate enough the importance of updating a policy to reflect a company’s stance regarding marijuana as it will help to address problems before they arise,” explained Ian Cooper, C-SAPA, drug and alcohol program supervisor, Beacon Occupational Health & Safety Services, Inc. “Some companies will update their policies regarding marijuana use on the job if it becomes legal, but I also think that there are companies that will continue to view marijuana as a banned substance and as a positive result if it comes up on a drug test.”

Voicing Concerns “Some clients have already reached out to Beacon with their concerns about medical and recreational marijuana use in other states, and how it affects their company policy,” Cooper says. “These potential changes should not have a huge effect on companies, as it really just requires a little finetuning of a company’s drug and alcohol testing policy.” Even if the legalization law passes, companies will not be mandated to allow the use of medical or recreational marijuana by employees. “As it stands federally, marijuana is still a Schedule I drug under the DEA’s 136

scheduling list. This means that, at this time, there is no current accepted medical use, and it is determined that it has a high potential for abuse,” Cooper says. “And keep in mind, federally regulated positions under Federal Motor Carrier Safety Administration, Federal Transit Administration, Pipeline Hazardous Materials Safety Administration, Federal Aviation Administration, Federal Railroad Administration, and United States Coast Guard do not accept the use of marijuana for any recreational purposes or medicinal purposes, as it still a Schedule I drug.”

Federal Law Supersedes Because federal drug and alcohol laws always supersede state laws, a company in Alaska can choose to allow or deny the use of marijuana, as they can divert to current federal laws, according to Cooper. “These protective measures for companies are not only at the federal level, however; Alaska statutes regarding medical marijuana make it clear that an employer is not required to accommodate an employee’s use of medical marijuana either. This is similar to the statement that would be included if the recreational law were to pass.” While medical marijuana has been legal in Alaska since 1998, it is still up to companies to decide if they will allow their employees to use the substance. “As it stands now and as it has stood for quite some time, the acceptance of medical marijuana with a valid medical marijuana card is company mandated,” says Cooper. “This means that if a company wants to allow the use of medical marijuana, they would need to update their stance within their policy and notify all employees.” No Rx for Pot Cooper adds that a letter written from the company to its drug testing com-

pany would be needed, stating that the company allows medical marijuana so that all positive results for marijuana for those employees who hold medical marijuana cards would be reviewed accordingly. These positive results for marijuana from the laboratory would be reviewed by the Medical Review Officer (MRO), similar to the way MROs review prescriptions for other drugs of abuse. “Keep in mind, medical marijuana cards are often confused or put in the same category as prescriptions, but any drug that is Schedule I cannot have a prescription; therefore, a medical marijuana card is not a prescription,” says Cooper. “A medical marijuana card is a medical recommendation, and until marijuana is taken off the Schedule I list, there will be no prescription for marijuana.”

Complex Issue Because the marijuana issue is very complex, Cooper suggests that companies ask themselves a number of questions to help determine their stance on marijuana usage as they revisit their policies in light of the current initiative. “Do they have DOTcovered employees? Do they have employees performing non-covered [non-DOT] safety sensitive duties? How will they handle an employee that is under the influence of marijuana during business hours? Does their company policy clearly lay out the answers to these questions?” he asks. “Undoubtedly, there are some companies who will change their policies, but I think that there are several steps that will need to be taken before doing so.” R Vanessa Orr is the former editor of the Capital City Weekly in Juneau.

Alaska Business Monthly | October 2014 www.akbizmag.com

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TELECOM & TECHNOLOGY

Cyber Security C

yber attacks are constantly on the rise, making cyber security a critical issue impacting almost every business some way or another. It extends beyond merely safeguarding data to encompass broader issues that involve hardware, software, people, and best practices. Experts say businesses should address cyber security at various levels and make constant modifications to protect themselves against potential cyber attacks, cyber fraud, human error, and other potential perils.

Cyber Security Threats In a broad sense, cyber security relates to managing the risks associated with a wide variety of assets. To GCI Network Security Engineer Donald Lenamond, cyber security involves protecting computer information systems (computers, networks, programs, data, and even voice over Internet protocol systems) and their digital information from unintended or unauthorized access, change, or destruction. A major menace to cyber security is the theft of data. The most common form of data theft usually involves enticing individuals to a “bad” website where hidden malicious software, or “malware,” is inadvertently downloaded to their computers. “Once accomplished, this malware provides back-channel command and control mechanisms allowing hackers to peruse the target network remotely, undetected for some period,” Lenamond says. “Once hackers have access, they patiently seek out information at their convenience.” But not all cyber crime involves the actual theft of data. The defacement of a company web page is a good example. A more malicious crime could involve denial of service where the company’s network is taken offline—either temporarily or indefinitely—for spite or other reasons. In both cases no data is stolen, but either act can cause interruption and harm to a business. The FBI’s Anchorage office investigates a variety of high-tech crimes, including computer and network intrusions, cyber fraud, and identity theft. Assistant Special Agent in Charge Kevin Donovan says cyber security certainly involves 138

Critical issue impacts business By Tracy Barbour

protecting data, but it’s also important to protect the hardware on which the data resides because unauthorized individuals may be attracted to more than just a company’s data. “They also may be interested in how much space and bandwidth they can take from you to continue attacking other targets,” he says. “In addition, revealing too much information on social media is a problem not only for kids, but for those who could be targeted by hackers looking to find a way in.” CryptoLocker ransomware is also an ongoing threat for individuals and some businesses. The attack usually starts as a spear-phishing email with an attachment that, when opened, encrypts the person’s computer and renders it useless until a “fee” is paid to get it unlocked. CryptoLockers, which typically target computers running a Microsoft Windows operating system, can also infect a company’s system through security vulnerabilities. “They often falsely claim to be from the FBI and primarily involve scaring people with child pornography implications,” Donovan says. “More recent cases have involved entire-disk encryption.”

Who Needs Protection and Why Any business with assets to protect is at risk of cyber crimes, Donovan says. And Alaska businesses shouldn’t assume they have immunity because they’re located far from the rest of the United States. “Geography is irrelevant on the Internet,” he says. “The FBI has investigated numerous national security computer intrusions and other cyber crimes targeting businesses, individuals, and other entities in Alaska.” Some businesses also face the threat of national security computer intrusions. These attacks, sponsored by foreign governments, often target sensitive data, proprietary data, new technologies, and research facilities, Donovan says. The attacks don’t just target companies that are involved in national defense, but any business with information that could help a foreign company or government could be at risk.

Donovan points out that many companies don’t think they are worthy targets of cyber attackers, or they don’t think they have information anyone would want. However, these companies (even smaller ones) still have valuable bandwidth or systems that hackers find easy to compromise and use as “mules” or hop points to much larger targets. Businesses should ensure they know who and what kinds of companies they are contracting with that might leave them vulnerable to national security concerns, Donovan says. In addition, companies with a bring-your-owndevice policy should know what types of personal devices employees are connecting to their networks. Personal devices, if not properly secured, could put the company network at risk. Lenamond says some of the most common attacks he’s seen in Alaska are advanced persistence threats. With this, the attackers breach the site defense but lie dormant for some period of time. Then they slowly poke around looking for “interesting” data without triggering any alarms by the site security. “Once they start moving around, however, any site with good intrusion detection should pick up on this activity,” he says. “The downside with intrusion detection is you’ve already been breached by the time you detect the attack.” Like Donovan, Lenamond says all businesses need to have effective cyber security measures in place. In fact, he says, any company that processes digital payments should have some sort of protection to make sure that information isn’t compromised. It’s not a matter of if or how a security breach will occur, but when. “If someone’s under the impression they’ll never be targeted, they will be sadly surprised,” Lenamond says.

Protective Measures Cyber security measures can vary widely from business to business. First, companies need to determine where the “chinks” are in their armor, Lenamond says. They can accomplish this by using

Alaska Business Monthly | October 2014 www.akbizmag.com

a penetration test or vulnerability scan to evaluate the cyber defenses and weaknesses of their website. In essence, Lenamond says, cybersecurity involves a number of layers or perimeters, a concept known as defense in depth. Companies should never rely solely on any one level for all of their protection. He adds: “While I would encourage a business to develop a strong perimeter defense [firewall], there is also a need to incorporate some form of host-level, end-point security [a host intrusion prevention system] running locally at the computer desktop [Symantec End-Point Protection]. Finally, look at implementing a white-list application program that only allows users to download and install verified applications [Bit-9 Parity, for example].” Even the smallest business can take simple steps to protect their assets from cyber attacks. For example, they can develop user security awareness training for their personnel. They can educate the users to be wary of clicking on email attachments, going to questionable websites, or disclosing too much information [via phone, email, and social media]. “This type of training involves no expensive hardware or systems, yet the return on investment can be huge,” Lenamond says. Jessy Strebel of International Data Systems recommends that businesses have regular internal and external security audits. With internal auditing, they have an outside company to come in and evaluate their network. With an external penetration audit, the business hires specialists to figure out ways to attack their system. This type of hacking takes on two forms, one form that involves trying to physically get into the system and another form referred to as social hacking, which doesn’t involve forced entry. Instead, the intruder uses manipulation to gain access. For example, someone might call the help desk and pretend to be a company executive who’s locked himself out of the system. He would sound very agitated and in a hurry and then intimidate the technician into resetting his password. Cyber attackers are growing more sophisticated and brazen each year, targeting major companies like Target, eBay, and even CNN. The threat is so sinister that technology giants like Microsoft, Google, and Amazon are hiring hackers to reveal weaknesses in their systems. www.akbizmag.com

Alaska Miners Association Annual Convention & Trade Show Celebrating 75 years! We have moved to the Dena’ina Center this year!

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Cyber security is a constant battle as companies become more securityconscious and hackers get craftier. “We secure the networks, and they figure out how to get around the security settings,” Strebel says. If he had a cyber-security wish list, Strebel says, it would start with company employees. “Unfortunately, we’re human and that is exploited regularly, so we have to protect our network against ourselves,” he says. This can be accomplished, in part, by denying employees access privileges on the Internet. Email messages or pop-ads linked to seemingly trustworthy—but fraudulent—websites are also a serious threat, according to Rebecca Collins, operations manager for Alaska Computer Support. Unsuspecting employees who click on the links or ads open themselves up to dangerous malware. The safest route is for users to type the web address into their browser instead of clicking on a link, pop up add, or even search results, Collins says. They should also look for the lock icon in the browser bar to ensure they actually landed on the site they intended to reach.

Security Involves Everyone Security doesn’t just lie in a company’s IT department or one particular person or device such as a firewall, says Collins, who has a bachelor’s degree in information technology with an emphasis in information security. Much of it depends on the practices of users or employees. “The biggest threat to security is human error,” she says. For example, many people like to share their day-to-day activities and vent their frustrations on Facebook and other social media sites. However, companies should advise employees to be aware of what they’re posting online, Collins says.

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Even seemingly unimportant information could be used to target a company if it landed in the wrong hands. Likewise, misdirected emails with sensitive information attached could be detrimental if sent to the wrong person. Sometimes addressing the user side of cyber security can be as simple as employees misappropriating data on a mobile device like a USB drive. Companies should heavily scrutinize and safeguard the information being stored on portable drives, Collins says. “For example, if you’re an HR rep with a file of employees’ social security numbers, you should make sure it’s password protected and at least encrypted,” she says. “It may or may not stop information thieves, but it will slow them down.” Collins also emphasizes that security is not something one can simply get in a box. It takes effort from everyone, she says. And if businesses don’t have the correct network security in place and exercise best practices for their data, they’re opening themselves up for potential attacks. Businesses, especially those involved with any type of online interactions, should keep a constant check on the security of their system, Collins says. “Technology changes almost daily,” she says. “Checking security once a year is not enough.” Lenamond has similar thoughts. “Networks are a dynamic beast,” he says. “Thus, cyber security is a constant, evolving solution—not some static solution that, once implemented, remains effective indefinitely. Attackers are always on the lookout for new attack vector mechanisms, hence a business’ cyber-security defense must be constantly evolving to remain effective.” R Tracy Barbour is a former Alaskan.

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Alaska Business Monthly | October 2014 www.akbizmag.com

Delivery Challenges Even Kotzebue, which is located on the coast, presents a challenge for fuel delivery.

region, Smith says. He has prepared a chart showing the landed and retail costs of fuel for the eleven villages in the region. “This year the water was high enough so a barge could get up to those upper Kobuk [River] communities,” Smith says. “But a barge hasn’t made it into Noatak for a number of years.” That means fuel has to be flown in, pushing up the cost of gasoline, as well as electricity. Some villages are paying nine dollars to ten dollars per gallon for fuel.

ship believes “one port isn’t going to be enough. There’s going to be a need for multiple port locations.” The borough, along with other regional entities and the Alaska Department of Transportation and Public Facilities, are working together to develop a deep-water port at Cape Blossom, about ten miles south of Kotzebue. A barge with a draft of nineteen feet would need approximately twenty-five feet of water for safe passage. Kotzebue’s port is shallow, and a channel leading to it is only about five feet deep and could close completely in the future. An immediate benefit to the port would be a reduction in fuel costs to the

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Future Opportunities Regional officials foresee many opportunities in the future, notes Gail Schubert, president and CEO of Bering Straits Native Corporation (BSNC). “In terms of the traffic that could eventually flow through the strait, there are all kinds of needs that will have to be met, facilities that could service some sectors of industry,” Schubert says. “If it makes economic sense to develop a port facility, then the more there are, the better it will be, especially for the communities in terms of something happening out in the Bering Strait. “We’d want to ensure there are services and supplies that could be utilized to deal with a situation that might arise.” Fred Smith, economic development director for the Northwest Arctic Borough, notes that the borough leader-

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By Julie Stricker laska’s Arctic coastline stretches from the mouth of the Kuskokwim River along the western and far northern edges of the continent and east to the Canadian border, a distance of about 3,600 miles. In that entire distance, the equivalent of one and a half times the distance from Maine to Key West along the US East Coast, there are no developed deep-water ports. And while communities such as Nome and Kotzebue do have ports, they are relatively shallow. Alaska transportation companies have developed methods for offloading cargo using specially designed shallowdraft tugs and amphibious barges, but as Arctic ice thins and marine traffic increases, state, federal, and local entities are looking at opportunities for deepwater port development.

Cape Blossom and Port Clarence frontrunners for Arctic development

“The large barges can’t make it into Kotzebue,” Smith says. “They can make it into Kotzebue Sound, about eight miles offshore. Then you’ve got a small barge, a shallow-draft barge that’s lightering off the big barge offshore.” That extra step to get the fuel into Kotzebue adds eleven or twelve cents per gallon, he says. Then it’s handled again to go to the upriver communities on shallow draft vessels. “We think that eventually a Cape Blossom fuel facility might allow the big barges to come directly into a port and offload, so we can eliminate a portion of that cost,” Smith says. An environmental assessment of the eleven-mile, $67 million road from Kotzebue to the Cape Blossom is underway. A second phase of the project would be to build oil storage facilities at Cape Blossom and a pipeline to Kotzebue at an estimated cost of $32 million. The port itself would be the next phase. In 2004, the US Army Corps of Engineers completed an analysis of several options for Cape Blossom. The most cost-efficient of these was a dredged channel and pier. Initial dredging costs

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would be $13.2 million with total costs of $35 million, according to the city of Kotzebue. Overall, the project would cost $132 million, according to the city’s application for federal TIGER (Transportation Investment Generating Economic Recovery) grant funding. The application notes the port would save $1.4 million annually in fuel costs by removing the need for lightering. Overall, the port would provide a significant economic benefit to the region, Smith says. “Cape Blossom, while it can’t handle everything a Port Clarence can as far as the draft of these vessels, has a purpose along the western coast of Alaska.”

Port Development Other sites in western Alaska may be better suited for larger vessels. The US Army Corps of Engineers and the Alaska Department of Transportation and Public Facilities have been analyzing the need for ports in western Alaska and are in the midst of a three-year study of the Alaska Deep-Draft Arctic Port System. The state defines the purpose of a future port: “To promote economic de-

velopment, employment, job training, and education in the state of Alaska, including areas of rural Alaska with historically high rates of unemployment, through the development and construction of an Arctic port that will attract new industry, expand international trade opportunities, and broaden and diversify the economic base in Alaska in a safe, reasonable, and efficient manner.” It notes that while Alaska’s Arctic coast has several existing ports, ranging from rudimentary shallow-draft barge landings to Red Dog’s bulk export facility for lead-zinc to Dutch Harbor, which is well set up for international traffic, more development is needed. The study noted several trends in 2013: n More large vessels are traveling along Alaska shores, more than half of which are foreign-flagged. n Global interest in the Arctic is rising, along with a focus on Arctic marine traffic and resources. n Increased traffic means a higher risk of incidents that require a response by the US Coast Guard or other vessels.

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n Community resupply costs in Western Alaska are high because of limited infrastructure—the goods must be lightered to shore, resulting in higher fuel costs and multiple handling. In addition, since communities in the region rely on subsistence, additional traffic could jeopardize food resources. n The state of Alaska is calling for increased development of minerals, as well as oil and gas in the Arctic. n US national sovereignty requires that the country maintain its presence in the Arctic.

Evaluating Port Sites The study identified fourteen potential port sites: St. Paul Island, St. Lawrence Island, Nome, Port Clarence/Teller, Kotzebue/Cape Blossom, Mekoryuk, Cape Thompson, Wainwright, Point Franklin, Barrow, Prudhoe Bay, Mary Sachs Entrance, Bethel, and Cape Darby. These sites were evaluated on their proximity to resources, such as mining, oil, and gas; connections to intermodal transportation; upland support; natural water depth; and accessibility for navigation. The four sites that ranked highest were Nome, Port Clarence, Cape Darby, and Bethel. BSNC is also looking closely at Port Clarence, located about seventy miles northwest of Nome on the Seward Peninsula. It housed a small US Coast Guard station that operated for almost half a century, closing in 2010. It is situated on the fifty-mile wide Bering Strait and most of its facilities, such as an airstrip, shops, and housing, are intact although in need of refurbishing. “As a corporation, we’ve been focused on Port Clarence for the past four years,” Schubert says. “Port Clarence was one of the plots of land we had selected under ANCSA. It’s a natural deep-water port. There are actually no port facilities at Port Clarence at this time. We’ve been talking to a couple of private industry businesses as we move forward trying to secure Port Clarence.” BSNC is seeking an expedited transfer of the property, possibly by the end of 2014. Port Clarence Although it lacks facilities, Port Clarence has a long history of use. It is the only natural deep-water harbor close to 144

the Bering Strait and can accommodate vessels with drafts of thirty-five feet or more. The channel past Point Spencer into the harbor is forty feet deep. It is usually ice-free from June through September, although the use of ice breakers could lengthen that period. The port served as a refuge for whaling vessels during Russian rule and became the main summer refitting port for the Arctic fleet after the US purchase of Alaska. Ships would stock up on water and coal transported from Cape Lisburne and stockpiled on the shore at the port. The US Coast Guard selected Port Clarence as a LORAN site in 1961 and operated it until it was decommissioned in 2010. BSNC and Crowley Maritime Corporation commissioned a study by Northern Economics on the feasibility of developing a port facility. It was released in June. The study looked at several alternatives for development, with minimum facilities consisting of a dock, sixty-sixperson capacity camp, water/wastewater services, and power. It estimated costs of developing these facilities to range from $34 million to $72 million. Further, the study showed it would require about $5 million annually in revenue to cover those costs. Potential users of facilities at Port Clarence include local vessel traffic, vessels traveling through the Bering Strait, oil and gas exploration, government agencies, oil spill response organizations, oilfield support, local tugs and barges, cruise ships, and bulk carriers. Of these, only oil and gas exploration, federal agencies such as the Coast Guard, and oilfield support offer any significant revenue potential. In the short term, the study “shows that Port Clarence really does not work unless there’s offshore oil development up in the Chukchi and Beaufort seas,” Schubert says.

Potential Activity Royal Dutch Shell, which had well-publicized problems during the 2012 drilling season, filed a revised Arctic drilling plan in late August but hasn’t said whether it would return to the Chukchi Sea in 2015. Despite the current drilling hiatus, the study looked at potential oil and gas development at both high and low

levels of activity on Alaska’s Outer Continental Shelf in the Chukchi and Beaufort seas. At high levels of activity, marine traffic through Bering Strait between 2016 and 2020 could be two or three times that in 2012. If oil and gas are found, the earliest production dates are estimated to be around 2026. Port Clarence’s relative proximity to the Chukchi Sea lease sites is an advantage, the study notes. It is about 400 nautical miles away, while Dutch Harbor, although well-equipped for large vessels, is about 1,300 nautical miles from the lease sites. “There’s a belief that within several years, we can start to develop Port Clarence to a point where it could start to be used for the traffic that might be flowing through to the Arctic,” Schubert says. Although a small portion of traffic in the region now, tourism may be on the rise in the Arctic as the Northwest Passage opens. The study notes increasing numbers of cruise ships traversing the western shore of Greenland and interest is likely to increase in the Bering Strait region. Other opportunities exist along the Northeast Passage over Russia. The site is ideal for search and rescue operations and could be a staging point for an oil spill response team, but the study notes the difficulty in planning for such events. The port would likely also have more local impacts. Local residents could benefit from a full buildout of the port if it is selected as a support base by the oil and gas industry in the future. The study estimates 700 to 1,300 workers would be needed. Brevig Mission and Teller, the only two villages near the port, could also potentially benefit from lower fuel costs, but both communities would have to invest in storage facilities. “I also hope that it would create employment and other development opportunities. In rural Alaska, it’s so expensive to do business,” Schubert says. “Energy costs are about 40 percent of doing business. There’s little impetus for industry to go out to rural Alaska to do any development unless it has to do with mining. Industry won’t just go up there just for the sake of going up there developing.” R Julie Stricker is a journalist living near Fairbanks.

Alaska Business Monthly | October 2014 www.akbizmag.com

TRANSPORTATION

Photo courtesy of Alaska Department of Transportation and Public Facilities

Roads for Business and Industry

Parks Highway in Wasilla near the Palmer-Wasilla Highway intersection.

Driving the intermodal transportation system

By Lisa Maloney

n Alaska, where intermodal transport reigns supreme, the balance of sea, air, rail, and highway transportation is heavily weighted by the fact that although 82 percent of Alaska’s communities aren’t on the contiguous road system, more than 75 percent of the people are. If the Port of Anchorage is an artery feeding 90 percent of merchandise goods into the state, the state’s roads are its capillaries, routing much of that merchandise to its final destination. For the rest of the state, intermodal transportation is raised to a whole new level with heavy dependence on air transport, barges, and marine lighterage (transferring cargo between vessels of different sizes—one way of bringing goods to land when there is no adequate port for a barge to dock). Cranes and other heavy equipment may also be used to transfer shipping containers when

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there is nowhere for a barge to dock. But still, roads are usually the critical link that distributes commercial goods to their final destination—whether that means a tractor trailer hauling shipping containers in the big cities and regional hubs or four-wheelers and snowmachines hauling cargo sleds in smaller rural communities.

Serving Big Industries Although truckers haul the majority of merchandise goods brought into Alaska, that’s hardly the only commodity being shuffled on the road system. Many of the roads currently in use were originally built to support mining operations, and trucking is still one of the most efficient and flexible means of moving coal, sand, gravel, and ore—at least as far as the train station or port. While Prudhoe Bay to the north

might be where the first Alaska oilfields that come to mind are, there are many of producing oil and natural gas fields in the Kenai Peninsula and offshore Cook Inlet. Flatbed and stretch deck trucks help transport the heavy equipment needed for these industries. Alaska’s next-largest export after natural resources—seafood—also logs quite a few road miles on its way to dock or airport. Air shipments of Alaska seafood boomed during the 1990s, but most of the outbound fish is still packed into freezer vans or trucks then hauled onto barges and shipped to Japan or the Lower 48, with a small percentage being trucked all the way to the Lower 48. There aren’t many logging trucks zooming down Alaska’s major highways, but 2013 statistics from the US Census Bureau rank the timber industry among the state’s top ten exports. Truly

Alaska Business Monthly | October 2014 www.akbizmag.com

remote working conditions can require barging in heavy equipment, building a logging road, and then hauling the logs back to the barge for further transport. When this sort of road-building is either not feasible or not allowed, logs may be hauled out by helicopter. And finally, there’s one of Alaska’s largest imports—people. According to the most recent statistics available from the Alaska Visitor Statistics Program, 4 percent of visitors arrive by some combination of highway and ferry. Also, according to 2011 data, 10 percent of non-cruise passengers book motorcoach tours. The most-used motorcoach routes, for both major bus lines and smaller companies, are between Seward/Anchorage and Anchorage/Denali. Other common destinations include Whittier, Homer, and Dawson City, Yukon—there are also the visitors who arrive by air or cruise ship and then rent a car to strike out on their own.

Roads South of Fairbanks Following is a brief overview of the road system south of Fairbanks: The Richardson and Parks Highways form a rough “A” that meets in Fairbanks with the Denali Highway as the crossbar. The Glenn Highway underscores that A, departing Anchorage to the northeast, crossing the bottom of the Parks Highway before meeting the Richardson Highway in Glenallen. Richardson Highway runs south from Glenallen to Valdez. Traveling north from Glenallen, at the Tok Cutoff from the Alaska Highway runs northeast and through Canada to the Lower 48, one of Alaska’s few routes to the contiguous states. The Haines Highway, which splits from the Alaska Highway, also crosses through Canada before ending in the Southeast community of Haines, four and a half hours by ferry from Juneau. South of Anchorage, the Seward Highway is the primary trucking route south for hauling anything from RVs to commercial goods to Alaska themed fabrics. It splits at the Tern Lake Junction, about 90 miles south of Anchorage, allowing vehicles to travel to two ports—Seward, by continuing on the Seward Highway, or Homer on the Sterling Highway, which also travels through the Kenai and Soldotna area. These end-of-road ports are stops on the Alaska Marine Highway System, which can carry some freight and comwww.akbizmag.com

Photo courtesy of Alaska Department of Transportation and Public Facilities

Glenn Highway near Palmer.

mercial equipment—Alaska’s solution to the difficulty of building and maintaining roads throughout Alaska. The Marine Highway and traditional highway support each other in moving commerce across the state.

Weigh Stations and Restrictions Even at their busiest, Alaska’s nearly sixteen thousand miles of urban and rural highways carry less than a tenth of the truck traffic found on busy highways in other states—largely due to the fact that Alaska, in terms of road traffic, is a destination, with no through traffic carrying shipments bound for other places. Still, according to the Alaska Trucking Association, trucking in-state employs one out of nine workers in Alaska, pays more than $1 billion in wages annually, and moves more than 34,700 tons of essential goods every day. Meanwhile, drivers are dealing with extreme weather and roadways. Trucking on Alaska roads can mean negotiating narrow, undivided, and sometimes unpaved roadways; steep grades; and the requisite snow, ice, and seasonal flooding. Seasonal weight restrictions on vehicles of more than ten thousand pounds GVWR, or gross ve-

hicle weight rating, help protect roads and bridges, but with so much commercial traffic on remote, dead-end highways, enforcing GVWR compliance can be a challenge. One solution: In addition to five static weigh stations south of Fairbanks and more than twenty weigh-in-motion lanes, the Department of Transportation & Public Facilities (DOT&PF) uses a mobile weigh station to gauge compliance on remote highways. The static weigh stations south of Fairbanks are located as follows: Hans Roelle Memorial outbound weigh station at 9451 Glenn Highway, northeast of Anchorage; Glenn Highway inbound weigh station at 9450 Glenn Highway; Tok weigh station, 1308 Alaska Highway, northeast of Anchorage; Potter Marsh weigh station, just south of Anchorage; and the Sterling weigh station farther south, mile marker 82.8.

Seasonal Challenges Visitors in personal cars have relative flexibility, and most motorcoach tours take place during the summer, when weather is relatively mild. But those trucking freight year-round in Alaska, and the DOT&PF employees maintaining the roads, face some unique seasonal

October 2014 | Alaska Business Monthly

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Photo courtesy of Alaska Department of Transportation and Public Facilities

Keystone Canyon on the Richardson Highway earlier this year.

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Performance

challenges to keeping the roads open— and commerce flowing—year-round. For commercial truck drivers in Alaska, avoiding known avalanche zones isn’t possible. DOT&PF does its best to monitor and mitigate avalanche hazard, and Howitzer-wielding avalanche mitigation efforts are one of the very best reasons for a shipment to be delayed, considering that the alternative is blocked roads and days of delays, not to mention the risk of death or injury. One worst-case scenario played out in early 2014, when a series of avalanches on the Richardson Highway outside Valdez not only bracketed in a commercial driver (who was lucky to escape being buried) but dammed off the Lowe River and created a temporary lake across the highway, which remained closed for about two weeks. Although the Valdez incident was uniquely spectacular, it’s not the only bad road avalanche in recent history. In early 2000, a series of avalanches completely cut off the Kenai Peninsula from road access for five days, leaving a number of communities completely isolated and without power. In 2006, an avalanche buried part of the Seward Highway under eighteen feet of snow.

Tunneling Home At about 2.5 miles long, the single-lane Anton Anderson Memorial Tunnel between Bear Valley (south of Anchorage) and the small town of Whittier is a novelty—and scheduling challenge—for commercial drivers in oversize trucks. It’s also the longest road/rail tunnel in North America. According to statistics from DOT&PF, only 5 percent of the tunnel traffic involves Class C and D commercial vehicles. The tunnel accommodates vehicles up to seventy-five feet long, fourteen feet high, and ten feet wide, although the length limit will be updated to eighty feet when the regulations are updated. This tunnel is also the Alaska Railroad’s interchange access for rail barges from Canada and the Lower 48—making it a key point for intermodal shipping strategies, even if road traffic is relatively light. R Lisa Maloney is an Anchoragebased freelance writer.

Alaska Business Monthly | October 2014 www.akbizmag.com

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OIL & GAS 154°0'0"W

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Alaska Seaward Boundary

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Alaska Business Monthly | October 2014 www.akbizmag.com

Alaska’s Exploration Licensing System An alternative to traditional leasing By Mike Bradner

laska’s oil and gas Exploration Licensing system has now been in place for almost two decades, giving petroleum explorers an alternative to the state’s traditional leasing system. The difference between the two is that traditional leasing involves companies bidding competitively for lease tracts of about five thousand acres with the land to be leased for periods of five to ten years. With leases a royalty share of any oil and gas production is paid to the state (the royalty is the “landowner share,” typically one-eighth of production) as well as annual land rentals and a cash bonus bid paid to the state for the lease. If more than one company bids on a lease, the firm proposing the higher cash bonus bid wins. A license, however, can be for much larger areas, up to five hundred thousand acres (the minimum is ten thousand acres), and is similar to a negotiated concession that is granted in most other petroleum-producing regions. The license is for exploration only, however, and involves no cash bonus. Companies instead commit to spend money on exploration.

Hybrid System Alaska’s system is really kind of a hybrid between concessions as other nations do them and the state’s traditional leasing. If exploration is encouraging or if discoveries are made, the license, or parts of it, must be converted to state leases with the standard terms for royalty and land rentals, but again no cash bonus payment. Companies propose dollar amounts to be expended on exploration rather than specific exploration activities, and this gives them the flexibility to shift www.akbizmag.com

Alaska’s system is really kind of a hybrid between concessions as other nations do them and the state’s traditional leasing. their program if needed. It also provides the state a quantitative measure, in dollars, of the work to be performed. This gives the state a simple way to evaluate any competing proposals for an exploration license, in that one license applicant would typically propose a higher amount than another. This recently happened, in fact. The Division of Oil and Gas had its first competing offer for a license area for the recently-issued southwest Cook Inlet license. Cook Inlet Energy was awarded the license, but there was another offer from an unidentified company. Cook Inlet offered the higher dollar amount, however, and got the license. Alaska may be the only state in the United States offering such an alternative on public lands, and while the state’s license program has yet to result in a discovery of a commercial petroleum deposit, several license holders have gone as far as converting parts of their licenses to leases.

pendent explorer and Cook Inlet producer, holds two licenses in the Susitna Basin north of Anchorage and has converted part of one license area to leases. Cook Inlet was also recently awarded a third license in the Iniskin Bay region of southwest Cook Inlet. That award, made August 6, gives the company the right to explore on 168,581 acres of state lands for four years in return for a commitment of $1,501,000 in exploration work. Both Doyon and Cook Inlet are now zeroing in on specific targets for drilling, which most likely would not have been found under the state’s conventional leasing system. The licenses give the explorers access to larger areas than leasing, although it is acreage that is little explored and almost always is remote and high risk. The companies in turn commit to spending on exploration. Licensing seems to be doing its job, enticing explorers to look at big, unexplored sedimentary basins in parts of Alaska that are outside the state’s tra-

Targeted Drilling One of these is Doyon Limited, the Interior Alaska regional Native Corporation, which started out with a license in the Nenana Basin, converted some of the license to leases, and now believes it is close to making a discovery after drilling two exploration wells. Doyon is exploring state-owned lands in the Nenana Basin, which is west of Fairbanks. In Southcentral Alaska, Anchoragebased Cook Inlet Energy LLC, an inde-

Most other countries offer concessions for exploration. The United States seems to be in the minority among the world’s oil producing regions with its traditional system of leasing in relatively small acreage units.

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ditional “oil patches” of the North Slope and Cook Inlet. “Our objective was to allow companies to put their money into exploration work, instead of being paid to the state through a cash-bonus bid in traditional leasing. A company’s money goes into the ground rather than to the state treasury,” says Ken Boyd, a former state oil and gas director who was primarily responsible for creating the licensing program in the mid-1990s. The arrangement gives the company the flexibility to shift its focus across large areas and gain the most efficient use of available funds. It is well suited for high-risk areas where there has not been much prior exploration, Boyd says.

Licensing and Areawide Leasing Most other countries offer concessions for exploration. The United States seems to be in the minority among the world’s oil producing regions with its traditional system of leasing in relatively small acreage units. In the mid-1990s, when Boyd and others at the Alaska Division of Oil and Gas put the licensing idea to the gover-

152

“Our objective was to allow companies to put their money into exploration work, instead of being paid to the state through a cash-bonus bid in traditional leasing. A company’s money goes into the ground rather than to the state treasury.”

—Ken Boyd Former State Oil And Gas Director

nor and Legislature, the state’s oil and gas leasing program seemed stuck in a quagmire. The leasing program was a system where the state solicited interest from companies and then proposed specific tracts for leasing. Conservation groups were active and sued to delay and halt lease sales. State officials looked for other ideas, particularly to get someone to drill in the big Interior basins. “We even went so far as to try to organize a ‘stratigraphic’ well, but we couldn’t get a rig,” Boyd says. The idea was for the state to chip in with industry partners in drilling a test well in an unknown basin just to get the geologic data. Boyd consulted with industry and government geologists through the

Alaska Association of Petroleum Geologists and decided to borrow the idea of a concession-type arrangement from other countries. Surprisingly, the idea was not an easy sell in the Legislature, Boyd recalls. Part of the difficulty was just the novelty of the idea and the notion of giving one company a franchise on a large area, although it is a common approach in other parts of the world. However, what also raised some concern among lawmakers was the loss of a bonus cash bid, which was money into the state treasury. That was money legislators could spend, so some didn’t like giving up some of it. Boyd argued, successfully, that the bonus bids actually contribute relatively lit-

Alaska Business Monthly | October 2014 www.akbizmag.com

tle in dollars to the treasury. “It is chump change, really, compared with what oil and gas production taxes and royalties contribute,” he says. In the long run the state is better off with the money being spent on actual exploration. Licensing was just one idea Boyd and his colleagues in the Department of Natural Resources proposed to get the state leasing system out of the thicket of lawsuits and delays. Another was “areawide” leasing, where all unleased state lands on the North Slope and Cook Inlet, and now the Alaska Peninsula, are offered yearly. That system is considered highly successful.

Beyond the North Slope and Cook Inlet Boyd thinks the licensing is successful, too, in its primary goal of getting companies to look at other parts of the state than the North Slope and Cook Inlet. There are now five licenses that have been issued: two in the Susitna basin, one in the Tonsina basin near Glennallen, one near Healy, and the most recent in Southwest Cook Inlet. One of the current Susitna licenses covers 62,909 acres with a ten-year term

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The Alaska Peninsula state lands have oil and gas potential, but until the federal government leases the offshore Outer Continental Shelf, where the prospects for oil and gas are greater, the state lands are likely to command little interest. and a $2.25 million work commitment. A second in the Susitna is for five years and covers 45,764 acres with a $250,000 work commitment. The Healy license covers 204,882 acres with a $500,000 work commitment and is for ten years. The Tolsona license is for five years and covers 43,492 acres with a $415,000 work commitment. There are also two pending applications, a proposed “North Nenana” license for an area of the Minto Flats near where Doyon is now exploring and one near Houston and Willow in the Matanuska-Susitna Borough. One license was issued earlier in the Copper River Basin. It was to Anschutz Exploration in 2005. In 2007 part of the acreage was converted to twelve leases, but all of those, and the license, have expired. Boyd believes, however, that the li-

censing could be taken farther. Two parts of the state where the state offers traditional leases in its annual area-wide sales, but which draw almost no bids, is a section of state-owned lands on the Alaska Peninsula and the southern North Slope “foothills” area. The Alaska Peninsula state lands have oil and gas potential, but until the federal government leases the offshore Outer Continental Shelf, where the prospects for oil and gas are greater, the state lands are likely to command little interest. Likewise, the large foothills region of the southern slope area has seen some exploration, but the area is geologically prone to natural gas, and until there is a gas pipeline there will be little sustained interest in the region. Boyd says that exploration licensing would be much more effective in get-

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What is significant is that there have been several exploration wells drilled in earlier years by major companies in the Glennallen area, all unsuccessful. Like the Nenana Basin, the region was written off by industry. ting companies to explore, or to continue to explore, in both areas. The case of two licenses and the companies holding them illustrates why they can be effective in encouraging companies to undertake this high-risk exploration. It is interesting that both programs are led by Alaska Native corporations interested in exploring state lands in their regions as well as their own. The Nenana Basin in the Interior had been pretty well written off after two major companies, Unocal and ARCO Alaska, drilled two shallow tests in the 1980s. As it turned out, both firms misjudged the geology and drilled, as it happened, at the southern edge of the basin. These companies did not know that the basin extended to the north and deepened, which improved the prospects for petroleum accumulations. The geology was misunderstood partly because some tools available now were unavailable then. State and federal geologists were also of the opinion that the basin was shallow and young in geologic age, similar what was believed about other Interior basins (and may yet be incorrect), and would be more prone to natural gas than oil. Since there was no real market for gas, unlike oil, no company was interested, particularly after the Unocal and ARCO drill results.

Doyon’s Decision to Explore Enter Doyon in the 1990s. Doyon owns land in parts of the basin, though much of the basin is state-owned, and in the process of evaluating its acreage, using more up-to-date procedures, Doyon saw things the two major companies missed. Doyon decided to explore both its land and state lands and applied for an exploration license so that it had access to a large enough block of land for a comprehensive evaluation. 154

Alaska Business Monthly | October 2014 www.akbizmag.com

The geologic and seismic work were encouraging, and a drill target was identified about four miles west of the community of Nenana. A well was drilled in a consortium with three partners. It was a deep test and did not find a commercial deposit, but it demonstrated the presence of hydrocarbon systems. It was enough to encourage Doyon to keep going, although the risk proved too great for the partners. Doyon by this time had converted parts of its license to state leases, about four hundred thousand acres, which makes it one of the stateâ&#x20AC;&#x2122;s largest owners of state oil and gas leases. A second well was drilled a few miles west of the first. Again, no commercial discovery, but more confirmation that hydrocarbons were present and there was, in fact, oil as well as gas. Now Doyon is doing more seismic in preparation for a possible third well in the vicinity, hoping to find an oil deposit in a basin long thought to be gasprone and written off by industry. One other license that illustrates the program at its best is the Tonsina license for an area near Glennallen issued to Ahtna, Inc., the Alaska Native corporation for the Copper River region. Like Doyon, Ahtna was initially interested on exploring its own lands and issued leases to a Texas independent, Rutter and Wilbank, who drilled a well. It found gas, but technical problems prevented a full evaluation. Building on that experience, Ahtna has now found what it thinks is a better possibility on nearby state lands, and the exploration license is now allowing it to explore that prospect. Ahtna has formed a partnership with two independents, including its original lessee, and, like Doyon, is leading the exploration venture, not just being a passive participant through a leasing arrangement. What is significant is that there have been several exploration wells drilled in earlier years by major companies in the Glennallen area, all unsuccessful. Like the Nenana Basin, the region was written off by industry. Now a fresh look is being taken by entrepreneurial smaller companies, and the licensing program is making it possible. R Mike Bradner is publisher of the Alaska Legislative Digest. www.akbizmag.com

October 2014 | Alaska Business Monthly

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OIL & GAS

Arctic Iñupiat Offshore and Shell’s Historic Venture ASRC, North Slope Village Corporations, and Shell sign agreement

n a ground-breaking announcement on the last day of July, Arctic Slope Regional Corporation (ASRC) and six North Slope village corporations joined together to create a new company known as Arctic Iñupiat Offshore, LLC (AIO). AIO and Shell Gulf of Mexico, Inc. (Shell) entered into a binding agreement that will allow AIO the option to acquire 156

an interest in Shell’s acreage and activities on its Chukchi Sea leases. This interest will be managed by AIO. AIO members include ASRC, Ukpeaġvik Iñupiat Corporation, Tikigaq Corporation, Olgoonik Corporation, Kaktovik Iñupiat Corporation, Atqasuk Corporation and Nunamiut Corporation. These corporations repre-

sent the communities of Barrow, Point Hope, Wainwright, Kaktovik, Atqasuk, and Anaktuvuk Pass. Rex A. Rock Sr., president and CEO for ASRC, will also serve as the president for AIO. He commented, “Our region has always been a leader in strategic partnerships that provide meaningful benefits to our shareholders, to our people.”

Alaska Business Monthly | October 2014 www.akbizmag.com

“This is an important day for our Alaska Venture. A regional alliance with so many respected Alaska Native Corporations provides Shell the opportunity to collaborate with savvy and experienced North Slope business partners going forward. It also underscores our commitment to provide opportunities for North Slope communities to directly benefit from Shell’s activities offshore Alaska.”

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Rock further stated, “I am humbled to acknowledge that this arrangement balances the risk of OCS development borne by our coastal communities, with the benefits intended to support our communities and our people.” Ukpeaġvik Iñupiat Corporation president and CEO, Anthony E. Edwardsen will serve as Chairman of AIO. Edwardsen remarked, “Our values teach us that we achieve success by putting the needs of our community at the center of all that we do. It is important that our community has a seat at the table to represent the subsistence and economic needs of our shareholders. Through AIO we will have meaningful input into this process while providing benefits back to our shareholders.” “This is an important day for our Alaska Venture,” said Shell Alaska Vice President, Pete Slaiby. “A regional alliance with so many respected Alaska Native Corporations provides Shell the opportunity to collaborate with savvy and experienced North Slope business partners going forward. It also underscores our commitment to provide opportunities for North Slope communities to directly benefit from Shell’s activities offshore Alaska.” Sayers Tuzroyluk, Chairman of the Board of Tikigaq Corporation, will also serve as the secretary and treasurer of AIO. Tuzroyluk explained, “Tikigaq borders the Arctic coastline, and we finally have a mechanism to share in the benefits from responsible off-shore oil and www.akbizmag.com

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October 2014 | Alaska Business Monthly

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“Formation of AIO provides for unity amongst our corporations which makes us stronger in time of new changes. This agreement allows us to be better prepared for the unknown that’s coming to us in the near future and we must stand united in our respective communities, including the whole North Slope.”

—Margaret Ahngasuk President, Atqasuk Corporation

gas development. The creation of AIO opens the opportunity to do business with respect to oil and gas development.” Olgoonik Corporation’s President, Steve Segevan, commented, “The com-

munity of Wainwright is at the forefront of OCS development, and our community has taken a progressive approach in support of responsible OCS development. AIO strengthens our approach

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to the OCS and provides us with a solid seat at the table. It’s a new day, where the village corporations join together with the regional corporation—it’s a new way of doing business on the North Slope.” Phillip Tikluk, President of Kaktovik Inupiat Corporation, said “KIC and its Board of Directors believes this opportunity, brought forth to the village Corporations across the North Slope by ASRC and Rex Rock, to join AIO is unprecedented; it stands to bring financial stability and alignment to the village corporations across the North Slope from responsible off-shore development.” “Formation of AIO provides for unity amongst our corporations which makes us stronger in time of new changes. This agreement allows us to be better prepared for the unknown that’s coming to us in the near future and we must stand united in our respective communities, including the whole North Slope,” said Margaret Ahngasuk, President of Atqasuk Corporation. Patrick Mekiana, President of Nunamiut Corporation, said, “This partnership creates alignment with most of the North Slope villages. Through AIO, even Nunamiut shareholders and the inland community of Anaktuvuk Pass will benefit from responsible OCS development. We are happy to be included in this opportunity because we are all one people and related across the North Slope region.” Through this option agreement, Shell would assign to AIO an overriding royalty interest in oil and gas produced from specific Chukchi Sea leases. In addition, AIO would have the option to participate in project activities by acquiring a working interest at the time Shell makes the decision to proceed with development and production. Shell and AIO will hold quarterly meetings to exchange information and address regional and development issues. R SOURCE: ASRC

Alaska Business Monthly | October 2014 www.akbizmag.com

Partners in the Venture Shell

Shell Gulf of Mexico, Inc. (Shell) is an affiliate of the Royal Dutch Shell plc, a global group of energy and petrochemical companies in more than 70 countries. We deliver a diverse range of energy solutions and petrochemicals to customers worldwide. These include transporting and trading oil and gas, marketing natural gas, producing and selling fuel for ships and planes, generating electricity and providing energy efficiency advice. We also produce and sell petrochemical building blocks to industrial customers globally, and we are investing in making renewable and lowercarbon energy sources competitive for large-scale use. In the U.S., we operate in 50 states and employ more than 20,000 people delivering energy in a responsible manner.

AIO

Arctic Iñupiat Offshore, LLC (AIO) is a privately held corporation established to promote sustainable economic development within the Arctic Slope region. Members of AIO include Arctic Slope Regional Corporation (ASRC), and village corporations Ukpeaġvik Iñupiat Corporation (UIC), Tikigaq Corporation, Olgoonik Corporation, Atqasuk Corporation, Kaktovik Iñupiat Corporation, and Nunamiut Corporation. Communities represented by these corporations include Barrow, Point Hope, Wainwright, Atqasuk, Kaktovik, and Anaktuvuk Pass. AIO’s primary focus includes creating alignment for responsible development within the Arctic Slope region, planning for the future, providing a voice for Arctic Slope Iñupiat with a seat at the development table, and economic stability.

AIO’s Member Companies ASRC

Arctic Slope Regional Corporation is owned by and represents the business interests of the Arctic Slope Iñupiat. Since opening enrollment in 1989 to Alaska Natives born after 1971, the Corporation’s shareholder base has nearly tripled, growing from the 3,700 original enrollees to around 11,000 today. Corporate headquarters are based in Barrow, Alaska, with administrative and subsidiary offices located in Anchorage and throughout the United States. ASRC, along with its family of companies, is the largest Alaskan-owned company, employing approximately 10,000 people worldwide. The company has six major business segments: petroleum refining and marketing, energy support services, construction, government services, industrial services.

SOURCE: ASRC

Ukpeaġvik Iñupiat Corporation

Ukpeagvik Iñupiat Corporation (UIC) is the Alaska Native village corporation of Barrow, Alaska and provides social and economic resources to over 2,500 Iñupiat shareholders and their descendants. Since its establishment, UIC has diversified its investments and consistently ranks among the top largest Alaskan-owned companies. UIC has over 3,400 employees and provides services to clients worldwide in a variety of industries, including operations in Barrow, www.akbizmag.com

construction, architecture and engineering, regulatory consulting, information technology, marine operations, logistics, and maintenance and manufacturing. More information about UIC and its family of companies can be found at www.uicalaska.com.

Tikigaq Corporation

Tikigaq Corporation is the Alaska Native village corporation of Point Hope. The corporation has approximately 1,400 Inupiat shareholders. A majority of our shareholders are in Point Hope, and are also shareholders of the Arctic Slope Regional Corporation (ASRC). Tikigaq has proven arctic construction capabilities, rural and urban environmental expertise, logistics services experience, and supports local hire throughout various projects. Resources include staff engineers, scientists, project managers, superintendents, office managers, purchasing agents, quality control personnel, and safety specialists. Tikigaq has operations in Virginia Beach, Virginia, and in Anchorage, Fairbanks and Point Hope, Alaska.

Olgoonik Corporation

Olgoonik Corporation is an Alaska Native-owned village corporation established under the terms of the Alaska Native Claims Settlement Act. Headquartered in Wainwright along the coast of the Chukchi Sea, Olgoonik is owned by more than 1,100 Alaska Native shareholders, almost half of whom live in the community. Since incorporation in 1973, Olgoonik has steadily assembled a proven record of past performance through its distinguished companies.

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Kaktovik Iñupiat Corporation

Kaktovik Inupiat Corporation (KIC) is an ANCSA Corporation incorporated in 1973; it is the Alaska Native village corporation of Kaktovik. KIC is located on the eastern Beaufort Sea Coast of Alaska and is the only Alaska Native Corporation within the boundaries of the Arctic National Wildlife Refuge. KIC grew from 112 original shareholders to 209 shareholders today.

Atqasuk Corporation

The village of Atqasuk is located along the Kuulugruaq River (Meade River) 60 miles southwest of Barrow. The Atqasuk area was traditionally fishing and hunting camps. The present day population of Atqasuk is about 250 people. Atqasuk Corporation is the village corporation established pursuant to the Alaska Native Claims Settlement Act of 1971. Atqasuk Corporation has over 100 shareholders and owns approximately 73,000 acres of surface lands in and around the community.

Nunamiut Corporation

Nunamiut Corporation (NC) is an ANCSA Corporation incorporated in 1973. It is the Alaska Native village corporation of Anaktuvuk Pass. NC is located in the central Brooks Range and is the only Alaska Native Corporation within the boundaries of the Gates of the Arctic National Park. NC has 230 shareholders and owns and operates eight R businesses.

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October 2014 | Alaska Business Monthly

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OIL & GAS

LNG on a Small Scale Getting less expensive energy than oil and diesel By Mike Bradner

or years Alaskans in communities dependent on fuel oil have hoped to get less expensive energy into their homes. Some regions, like parts of Southeast Alaska, are blessed with inexpensive hydroelectric power. Southcentral Alaska has access to natural gas from the Cook Inlet basin, although that is getting to be less of a bargain. For much of the state it is diesel and heating oil that fuels power generation and space heating, and these are pricey. However, there are large reserves of stranded natural gas on the North Slope and it appears these may be tapped by a pipeline in a few years, after years of talk. There could be a natural gas pipeline built by an industry consortium or a state corporation, the Alaska Gas Development Corporation, although neither is a sure thing. But if a pipeline is built, gas will be made available to the Fairbanks area as well as more gas in Southcentral Alaska and possibly other points along the pipeline. But what about elsewhere in the state? Many communities would still be oildependent. A grid of smaller pipelines radiating out from the big pipeline along the Interior-Southcentral Railbelt corridor would be uneconomic unless there is a big â&#x20AC;&#x153;anchorâ&#x20AC;? customer like a mine. One spur gas line already in the planning is a twelve-inch line from Southcentral Alaska to the mid-Kuskokwim River, where a large gold mine is planned by Donlin Gold, a joint-venture of Barrick Gold and NovaGold Resources. If the big pipeline is not built, the companies would buy Cook Inlet gas, they said. That assumes the mine, now planned, will go forward. As for the big pipeline, the plan now is for North Slope gas to be piped to Nikiski, near Kenai, and chilled into liquefied natural gas, or LNG, for export in a large plant. 160

The question is whether propane, or LNG for that matter, could economically displace heating oil and diesel for space heating and power generation, and whether it could be used as a fuel for vehicles now powered by diesel or gasoline. Improved Technology Many wonder whether some of the gas, either LNG or propane, a natural gas liquid, could be shipped to communities outside the Interior-Southcentral Railbelt corridor. Would it be less expensive than oil? Many think it might be. Recent improvements in the technology of containers would now allow the efficient shipment and storage of small quantities of LNG to smaller coastal communities, says Keith Meyer, president of LNG Americas, a Houston-based company working to develop LNG markets in North America, including Alaska. These ISO containers could be moved by truck, barge, or rail, Meyer says. If shipped by barge they could be deckloaded along with other freight. Propane is another liquid fuel available through a gas pipeline. Propane has long been used in Alaska for cooking and in some places heating. It is typically stored in small bottles and refueled at community fueling stations. Most propane now sold in Alaska is shipped in from Prince Rupert, British Columbia, Canada, according to Mary Ann Pease, an Anchorage-based energy consultant who has worked on an Alaska propane project. If a gas pipeline is built, large volumes of propane, along with other natural gas liquids like butane, would be entrained with the methane, the main component of natural gas, and shipped along with methane through the pipeline. About fifty thousand barrels per day of propane could be available to supply local needs, although much

of it would likely be exported. Alaska currently uses about one thousand barrels per day, so there would be ample supply for expanded use of propane in the state. The question is whether propane, or LNG for that matter, could economically displace heating oil and diesel for space heating and power generation, and whether it could be used as a fuel for vehicles now powered by diesel or gasoline.

Considerations One advantage of propane and natural gas (regasified from LNG or as compressed natural gas) as vehicle fuel is that it is very clean burning and would reduce maintenance. A consideration, however, is that both LNG and propane, in liquid form, contain less energy than conventional oil fuels. That means larger fuel tanks would be needed relative to an oil-based fuel if the vehicle carries the same amount of fuel. LNG contains about 80,000 Btus per gallon while propane contains about 90,000 Btus per gallon. Diesel, in contrast, has about 130,000 Btu per gallon. Based on this, tanks for both LNG and propane would have to be about 1.6 times bigger than a tank for an oil fuel if the tanks were to contain the same amount of energy. In addition, the propane tanks would have to be pressurized, and while LNG tanks would not be pressurized, they should ideally be insulated. However, the price differentials between natural gas, propane, and conventional diesel might be enough the offset these disadvantages. Economic studies that have been done for a propane distribution system

Alaska Business Monthly | October 2014 www.akbizmag.com

to smaller Alaska communities show that there could possibly be substantial savings for larger communities—particularly those where there could be year-round barge deliveries. Similar studies of an LNG distribution system have not been done, but there are enough similarities between the fuels that many of the logistics issues would be similar. One difference is that the LNG system would require regasification at the delivery point.

Shifted LNG Paradigm LNG is typically thought of as a big business that requires large tanks and transportation in large, specialized ships to distant markets, and for years this was indeed the case. Now, however, the paradigm has shifted. The revolution in shale gas production in the Lower 48 has sent natural gas sharply down and stimulated efforts to substitute gas for oil as a fuel in many industrial and transportation applications, Meyer says. “We’re now seeing a convergence of two major industries, the users of high horsepower engines and the natural gas industry,” Meyer says.

The “downsizing” of LNG technology to smaller scale has actually been underway for years. Utilities in the Lower 48 now commonly use small LNG units for “peak shaving” for use in periods of peak gas demand. Gas is purchased seasonally, or off-peak, when it is less expensive, chilled, and stored and then used in peak periods when gas purchases would otherwise be more costly. Smaller-scale LNG has been in place in Alaska for a number of years, too. Fairbanks Natural Gas Company, or FNG, a small private gas utility, operates a small LNG plant in the Matanuska-Susitna Borough, shipping LNG by truck to Fairbanks. FNG now serves about 1,100 customers in the core downtown Fairbanks area. Also, the state’s first small-scale customer for LNG for space heating is served by FNG. Cook Inlet Region Inc.’s Talkeetna Inn, a major hotel, relies on LNG and is supplied by truck. As FNG trucks its LNG from the Mat-Su to Fairbanks, some of the product is dropped off at the Talkeetna lodge. The LNG-trucking concept for Fairbanks is now being expanded. The Alaska Industrial Development and Export

Authority (AIDEA), the state development finance corporation, is in partnership with MWH Americas to develop a small LNG plant on the North Slope that would ship LNG by truck to Fairbanks. FNG is now expanding its distribution system in anticipation of this and a second public utility, the Interior Gas Utility, plans a separate system to serve parts of Fairbanks outside FNG’s service area. The Prudhoe Bay LNG plant will have capacity beyond that needed for Fairbanks, however, and AIDEA and MWH hope to find other customers. One possible customer is NovaCopper, Inc., a minerals company working to develop a copper mine in the Ambler Mining District of the western Brooks Range. AIDEA, the state authority, is also working on a three hundred-mile access road from the Dalton Highway to the Ambler district where NovaCopper is exploring. The mining company is interested in purchasing LNG trucked from the North Slope. If the mine and access road are built, the LNG would come part-way down the Dalton Highway and then west to the mine to supply power. The overall distance by road is about the same as

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from the North Slope to Fairbanks. Similarly, Alaska Power and Telephone, owner of a small power plant serving Tok, east of Fairbanks, is interested in trucked LNG as an alternative to the expensive fuel oil now used for power generation. In this case, LNG trucks arriving in Fairbanks would drive east on the Richardson and Alaska highways to Tok.

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LNG for Fuel and Power With improvements in technology, LNG as a fuel option for heavy trucks, construction and mining equipment, ships, and locomotives on railroads is being actively pursued, Meyer says. The fuel would be particularly suitable where vehicles are operated at a particular location, like a mine, or along established routes, like a bus or truck fleet; the Alaska Marine Highway System; or the regular Tacoma-Anchorage voyages of Totem Ocean Trailer Express, or TOTE. Engine manufacturers for heavy trucks and construction equipment are also now developing engine kits that are dual-fuel that allow switching between gas and oil. Now the list includes big names in the industry, like Caterpillar and GE. Rolls Royce is working on similar dual-fuel capabilities for turbines. Either LNG or compressed natural gas (CNG) can be used in these engines, and CNG has been used in vehicles for years. LNG has some advantages in that CNG requires a pressurized tank while LNG does not, although the tank should be insulated. Meanwhile, TOTE is converting its large cargo ships that operate between Tacoma, Washington, and Alaska to LNG, mainly to meet new emissions rules. The company has now secured a supply of LNG for its vessels, a significant development. In late August the Port of Tacoma approved a lease for Puget Sound Energy to build a $275 million LNG facility that will provide liquefied gas for TOTE. Ucore Rare Metals Inc., a mining company, now working to develop the Dotson Ridge rare earths mine on Prince of Wales Island in Southeast Alaska, plans to use LNG as a source of power for its operations. Ucore now plans to import LNG from British Columbia but could easily buy the LNG from an Alaskan source if it were more economical, the company says. Ucore has been discussing LNG pur-

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Unlike propane, LNG is not stored under pressure, but the containers are typically insulated to keep the LNG cool. If the container is stored for a period of time, some of the methane does “boil off” back into a gaseous state, so over an extended period some pressure can build up inside an LNG tank. chases with Liquiline, a Norwegian company that has been supplying LNG for years to coastal communities in Scandinavia. Liquiline is now in a jointventure with LNG America to develop LNG fueling stations in US ports, including Alaska and Hawaii. Meyer, of LNG America, says the growth of LNG as a transportation fuel has been somewhat hampered by the limited sources for the fuel, but this is gradually changing as more and more LNG fueling stations are built, such as one planned by Puget Sound Energy in Tacoma. LNG America isn’t the only company pushing LNG as a fuel for power generation and transportation. WesPac Midstream LLN, an Irvine, Calif.-based company, is proposing a small LNG plant at Port MacKenzie, on upper Cook Inlet, to supply LNG to coastal communities and perhaps Fairbanks. British Columbia is aggressively pushing LNG and compressed natural gas as a local fuel, although the province also hopes to build large LNG export plants and to compete with Alaska LNG overseas. British Columbia has an incentive fund to help truck fleet operators convert to either CNG or LNG, and LNG manufacturers are expanding to meet the anticipated larger local demand. Vancouver-based FortisBC, for example, is currently undertaking a $400 million expansion of its Tilbury LNG plant, which has been supplying LNG to regional markets. WesPac is working with FortisBC on its project, the company said. In Alaska, ConocoPhillips has equipped its LNG plant at Nikiski with truck-loading racks. While the plant mainly loads ships for sale of the LNG overseas, the truck racks enable the company to load trucks, or tanks, for local delivery. For small, remote communities, the development of highly portable ISO containers is important for the emerging LNG and propane industries because the containers can be moved by truck, rail, or barge and can be placed in community fueling stations. The containers can www.akbizmag.com

hold between 9,600 gallons and 10,000 gallons, and in the case of LNG, that is equal to about 6,200 gallons of diesel. Unlike propane, LNG is not stored under pressure, but the containers are typically insulated to keep the LNG

cool. If the container is stored for a period of time, some of the methane does “boil off” back into a gaseous state, so over an extended period some pressure can build up inside an LNG tank. Typically a tank can hold LNG for

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about seventy-five days before the pressure must be relieved, but in a case where LNG is being regularly “regasified” this is not a problem. For coastal communities the ISO containers could be supplied and retrieved by barge for refilling every 90 or 120 days. In large LNG vessels the “boil off” provides the fuel for the vessel.

Propane’s Advantages Propane has some advantages compared with LNG. Pease, the energy consultant, says LNG is basically more expensive because of the cost of the liquefaction of the methane to a liquid and the cost of regasification at the point of delivery. While propane is entrained, or mixed, with methane in the gas pipeline, it can be taken out with an extraction process that is simpler than LNG manufacturing, she says. Another advantage is that Alaskans are familiar with propane, and there are long-established firms in the state which specialize in delivery and support for propane. Just as the use of LNG by coastal communities in Norway offers a template for that fuel in Alaska, so does the wide use of propane in Japan for home heating and in Japan and China as a fuel for vehicles, Pease says. As for vehicles, there have also been questions as to how well propane-fueled or natural gas-fueled vehicles would perform under Alaska winter temperatures. These questions have been somewhat put to rest, however. In a demonstration project sponsored by the Alaska Natural Gas Development Authority, two Ford trucks were fitted with dual-fuel systems for propane and gasoline. BP tested one of the trucks for a year at Prudhoe Bay while a second truck was tested in Southcentral Alaska, Pease says. One of the two trucks is still used by Joe Griffith, general manager of Matanuska Electric Association, she says. As for natural gas, Barrow Utilities, which operates municipal utilities at Barrow, the state’s farthest-north community, has worked out the cold weather problems and has successfully operated its fleet of small maintenance trucks on CNG for years. R Mike Bradner is publisher of the Alaska Legislative Digest 164

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OIL & GAS

Ballot Proposition 1 Fails

Alaskans will watch for more barrels from SB21 By Mike Bradner

he feisty campaign over repealing the oil tax reform bill passed by the Legislature in 2013 took up much of the summer for Alaskans. It seemed a new state flower had appeared—the clusters of red “Vote No” and “Vote Yes” campaign signs that were spread along roadways and through neighborhoods.

Narrow Margin In Ballot Proposition 1, which appeared on the August 19 primary election ballot, a “yes” vote would have repealed the new oil production tax, Senate Bill 21 (SB21), while a “no” vote would retain it. As it happened “no” prevailed, to the relief of North Slope oil producers and the state’s oil and gas support industry, although the margin was narrow, about 52 percent to 48 percent. Many businesses with no direct link to the industry, such as Northrim Bank, actively worked for “vote no” through grassroots organi166

zations like “Keep Alaska Competitive.” Their concern was that a healthy oil industry is important to the state economy. The primary election vote is likely to encourage oil producers to continue to increase activity on the North Slope as well as sustain an increase in oil production, at least compared with the continuing decline that had been forecast. The regional breakdown of the voting was interesting. “Yes” prevailed in Fairbanks, Southeast Alaska, some coastal communities like Kodiak, and the southern Kenai Peninsula and Homer area. “No” was strongest in Anchorage, Mat-Su, and the Kenai-Soldotna region and, surprisingly, some rural communities where Alaska Native corporations were campaigning against the repeal. Although “no” won the campaign, the surprise was that the margin was as narrow as it was considering the sums spent on the campaign by opponents of the repeal.

Oil producers, oil and gas service companies, and several other businesses spent heavily to fight the referendum, up to about $15 million. Meanwhile, the “yes” campaign was thinly-financed and seemed pretty much a grassroots operation. Despite the heavy funding on “no,” there is obviously a large number of Alaskans who remain skeptical and wary of the tax change. Democrats were overwhelmingly “yes,” which might be expected, but the vote showed that Republicans were not solid in the “no” camp, either.

Ramped Up Activity To their credit, oil producers on the slope have ramped up activity in the year and a half since the tax passed. In May, 2013, a month after the Legislature’s action, ConocoPhillips announced it was adding a new “workover” rig in the Kuparuk River field, which the company operates. Two months later BP announced it was stepping up activity in the Prudhoe Bay field,

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where it is operator, and was starting work on a major new development project in the west end of the field. In the past year BP has increased its “rate-enhancing” work, or activity aimed at stimulating new production, by 20 percent, and its spending on this work by 40 percent. This work has resulted in new oil production above what had been forecast by the state of Alaska. In August, it was certified by the state Department of Revenue that the decline in slope oil production had been halted in Fiscal Year 2014, which ended June 30. In previous years North Slope oil production had declined at an average rate of 6 percent yearly and between FY 2013 and 2014 had declined over 8 percent. For both FY 2014 and 2013 the production was even, averaging 531,000 barrels per day in both years. These were measured barrels, not forecasts. In contrast, in December 2013 state petroleum economists had predicted a 4 percent decline in 2014 for an average of 508,000 barrels per day, a figure that included some estimated benefit of the new oil tax reform, which actually took effect in January 2014. The industry’s performance beat that forecast, however, by about 23,000 barrels per day to the positive.

Watching the Industry Alaskans will closely watch what the industry does now. In the August 19 election voters appeared to discount claims from the “vote yes” camp that the rampup in production (compared with what was forecast) was an effort by the companies to accelerate projects they had previously planned to influence the vote. This claim seems dubious because the kinds of contractual commitments needed to ramp up production, for example hiring new drill rigs, involve large sums of money spent over several years. A new drill rig contracted by ConocoPhillips to Doyon Drilling, for example, was for five years. While many of the projects were indeed in the plans, the producing companies have said, the fact that the work was not being done during the years of the ACES tax and that production continued to decline from 2007 through 2013, the years ACES was in effect, seems to speak for itself. Now that SB21 has improved the economics of incremental projects in the fields, the work is being done. The key thing to watch for now in 168

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monitoring North Slope production, industry people say, is how many rigs are at work in the large producing fields doing “workovers” (major maintenance) of older producing wells and drilling new production wells. If the number of rigs goes up, that means more oil, the companies say. If rig numbers go down, it means less oil and a likely return to the production decline. Since the new tax law passed, two rigs have been added in the producing fields, both by ConocoPhillips in the Kuparuk field (one rig mentioned previously) and plans are set for three more rigs to be added in 2015 and 2016, two by BP and one more by ConocoPhillips. State petroleum economists say that, as a rule of thumb for the North Slope, each rig working in the producing fields typically drills six new producing wells a year (usually twelve in total but half are gas and water injector wells for reservoir pressure support) with each producing well averaging eight hundred to one thousand barrels per day. Based on that, fourteen drill rigs at work in the field in total would add, over one year, twelve thousand to fourteen thousand barrels of new production per day. This does not include additional production that could come from the well “workovers,” which would include new oil from older wells producing more because of the workovers. The large producing fields like Prudhoe, Kuparuk, and Alpine are important because much of the remaining proven oil reserves yet to be produced, about 4.3 billion out of 5 billion barrels, are in these large fields. There will also be new deposits of oil tapped outside the existing fields and new deposits in separate reservoirs within the producing fields. As examples, in December ConocoPhillips’ board will decide on two brand new projects within the existing Kuparuk River field, a new drill site in the southern part of the field and an expansion of the existing West Sak viscous oil project also in the Kuparuk field. The board will also decide on developing GMT-1, a new oil site within the northeast National Petroleum ReserveAlaska. If these projects are approved, ConocoPhillips expects forty thousand barrels per day of new production by 2018 aside from added production in the existing fields, the company has said. BP also has a big project in the west end of the Prudhoe Bay field that could add www.akbizmag.com

forty thousand barrels per day over several years beginning in 2018. There are also two new projects planned by small independents: Brooks Range Petroleum’s small Mustang field that will be producing about nine thousand barrels per day in 2016 and twelve thousand barrels per day in 2017 and Nuna, a new project by Caelus Energy, a small independent that purchased the Oooguruk field earlier this year from Pioneer Natural Resources Co.

Monitoring SB21 Meanwhile, the financial performance of the new oil tax in SB21 must be monitored. Several sets of analyses, including one by the Department of Revenue and two independent reviews by the University of Alaska’s Institute of Social and Economic Research, conclude that the two tax systems, the new SB21 and the former ACES tax, bring in about the same amount of revenue in the current range of oil values. If oil values go down (the net revenues value is determined by oil revenues as well as production costs) SB21 performs better, and also provides a safety net for the state; if oil values go up, through a surge in oil prices for example, ACES would have performed better. It seems more likely than not that North Slope oil values will be going down because US crude oil prices seem on a gradual downward trend mainly because of the large amounts of shale oil on the market in the Lower 48. The boom in shale oil production isn’t likely to be reversed soon. Even price spikes caused by Middle East turmoil seem short in duration. However, parts of the new production tax bear watching closely, particularly a new per-barrel production tax credits system for production from existing fields, a major point raised by critics of the tax. In the change of tax systems, a 20 percent industry capital investment tax credit in the ACES tax was eliminated and the per-barrel production tax credit was substituted, the argument being that the 20 percent capital tax credit rewarded spending with no particular link to new production (maintenance-related capital costs were eligible for the credit, for example). The per-barrel tax credit is linked to barrels actually produced, so it is more actual production that gets a higher tax break, not just more spending. One other issue that bears watching is how an inevitable tension between

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the Department of Revenue and industry over extending “Gross Value Reduction” (GVR) status (an additional tax break for “new oil”) to oil from new deposits in the existing fields. Even critics of the tax didn’t argue about the idea of a GVR being granted to new oil from new fields outside the producing fields (they did argue about the amount), but industry had also pushed for some mechanism to classify new projects in existing fields for the GVR. The department has a resolution for this for now (the “new” oil has to be mechanically metered, which isn’t easy), but there will be more to come on this.

Revenue Revisions Alaskans meanwhile won’t have a good feel for the revenue impact of the new oil tax until the revenue department does its next revenue forecast due in late November or early December. By that time the department will be able to assess almost a year of performance of the new tax. It went into effect January 1 this year. It’s quite likely that the revised Fiscal Year 2015 (current state financial year) revenues will be about what was pre-

dicted in the last forecast in April. But there are some wild cards. One is that the heavy spending the industry has been doing, and which resulted in the increase in production, will be a cost factored into the calculation of the net revenues production tax. The spending will drive up per-barrel costs which will effectively lower the net perbarrel value of oil against which the 34 percent tax rate applies. Also, oil prices appear to be trending down, so the combination of those two, lower prices and higher costs, will lower the per-barrel value and the resulting revenues. However, this will be offset by the greater number of barrels being produced. Just how these two factors will shake out in the next revenue forecast is uncertain. The same effects would have occurred under the former ACES tax, in theory, except that in actuality the ramp-up of industry activity and spending (and added production) wouldn’t have occurred under ACES. While increased capital costs are being felt now in the calculation of the net value for tax purposes for this year, these investments will result in more produc-

tion, and more revenues, next year and after. More barrels being produced also mean more royalty revenues to the state in addition to production tax revenues. One thing that is certain is that the state avoided a substantial revenue hit had the “yes” vote prevailed because the restoration of the ACES tax would have put the 20 percent capital investment tax credit back into effect. This would have resulted in several hundred million dollars of reduced revenues in FY 2016 and FY 2017 when one fifth of the capital expenditures for the big Point Thomson gas project would be credited against oil taxes owed by the producing companies. Under SB21 this credit is not allowed. What is unusual about Point Thomson is that it will not immediately generate a lot of liquids production, only ten thousand barrels per day of condensates, a natural gas liquid. Thus the state would, under ACES, pay one-fifth of the $4 billion capital cost of this project without a lot of benefit from new production. R Mike Bradner is publisher of the Alaska Legislative Digest

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ALASKA NATIVE CORPORATIONS

ANCSA

Perspective

From Alaska Native Corporation Leaders Maver Carey, Sophie Minich, Gail Schubert, and Sheri Buretta

Photo courtesy of Bering Straits Native Corporation

Bering Straits Native Corporation is focused on developing Port Clarence, above, as an Arctic deepwater port.

By Julie Stricker

orty-three years after the passage of the Alaska Native Claims Settlement Act (ANCSA), a new generation of leaders is at the helm of the corporations, both regional and village, created under the landmark legislation. Unlike in most of corporate America, many Alaska Native business leaders are women. We spoke with several about their perceptions of ANCSA while growing up, how they’ve been affected by the legislation, as well as how their corporations have grown and changed and what’s next.

Maver Carey President and CEO The Kuskokwim Corporation Maver Carey grew up in Anchorage and says she knew almost nothing about ANCSA before she started working at The Kuskokwim Corporation (TKC) in 1994, although her mother is from Aniak. It wasn’t taught in high school or college, she says. “I wish it was,” she says. “I’m actually encouraging our school districts and universities to provide a stronger curriculum in this area.” President Nixon signed ANCSA into law in December 1971. The legislation was intended to settle aboriginal land claims by giving Alaska Natives title to 172

“We’ve more than tripled in size. We started out at 1,100 and now have 3,500. I often get phone calls asking if I can talk to different boards about when we decided to enroll descendants. We’ve more than tripled in size, but we had to do that same thing on the financial side so our dividends kept up.”

—Maver Carey President and CEO, The Kuskokwim Corporation Carey

40 million acres of land and $962.5 million to be divided among 12 regional and about 220 village corporations. The corporations were tasked with providing for the economic, cultural, and social well-being of their shareholders. The mandate for cultural and social support makes the dynamics of running a Native corporation different from other businesses, Carey says, such as providing scholarships that she used to earn a degree at Gonzaga University. TKC is a village corporation in Southwest Alaska formed from the merger of ten small village corporations along the

middle Kuskokwim River. Today, TKC has 3,500 shareholders, which include the descendants of the original shareholders. Its revenue in 2013 was $62 million, Carey says. The corporation signed an agreement with Donlin Gold in 2014 that spells out the conditions around the development of what could be one of the largest gold mines in the world on land owned by TKC. Calista regional corporation owns the subsurface rights. “It’s a huge milestone for TKC,” Carey says. “We’re going to see some great economic benefits from Donlin.

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Our region is the poorest in the state of Alaska.” The mine, with a life expectancy of about twenty-seven years, will provide royalties, as well as employment for shareholders, Carey says. TKC will play important roles in reclamation and environmental oversight. A port, currently planned for Jungjuk Creek near Crooked Creek, also would bring benefits to the region. TKC is working with the school district, Donlin, and Calista to establish a training facility for residents. In the past, half of TKC’s shareholders lived in the region, but because few jobs are available, only about 36 percent now call the villages home. Carey hopes to turn that around. Carey says the TKC board of directors has been negotiating with Donlin for several years with the goal of establishing an economic legacy for shareholders on the scale that the massive Red Dog zinc mine in northwest Alaska has done for NANA Regional shareholders. Another milestone for the corporation was the shareholders’ decision to include descendants as shareholders. Under ANCSA, only those born at the

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time of the act’s passage were allowed to enroll in a corporation. ANCSA corporation stock cannot be bought and sold, but can be gifted to family members or as a bequest in a will. After ANCSA was amended in 1989, shareholders could vote to enroll descendants. Five regional corporations have done so, as has TKC. “I think that’s an absolutely huge legacy,” Carey says. “We’ve more than tripled in size. We started out at 1,100 and now have 3,500. I often get phone calls asking if I can talk to different boards about when we decided to enroll descendants. We’ve more than tripled in size, but we had to do that same thing on the financial side so our dividends kept up.” TKC has set up a dividend fund, similar to Alaska’s Permanent Fund, to continue providing dividends in the future. It also issued its first dividend to elders. Carey says most of the corporation’s rapid growth in the past decade is due to government contracts, which have cooled. She is working to diversify TKC’s economic base and Donlin Gold is a big part of that.

“We’re not the little village corporation we were a few years ago,” she says. “We need to continue our successful economic operations to ensure our future successful growth, which will benefit our shareholders in the future.”

Sophie Minich President and CEO Cook Inlet Region, Inc. Sophie Minich was a child living in Wyoming when ANCSA was passed. “I remember it specifically because my mother said there was this thing happening in Alaska, and she didn’t know what it meant or where it would go, but she thought it was important and we needed to be involved. So she enrolled us.” Minich’s mother opened a savings account in case the family received any monetary benefit from the act. “It was one of the first times I realized I was Alaska Native,” Minich says. One of ten children, Minich says the kids used to joke about being one of ten little Indians, but her mother was not proud to be an Alaska Native. She had been taken from her village as a child and enrolled in boarding school, where her

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“I remember it specifically because my mother said there was this thing happening in Alaska, and she didn’t know what it meant or where it would go, but she thought it was important and we needed to be involved. So she enrolled us.”

—Sophie Minich President and CEO, Cook Inlet Region, Inc.

Minich

Athabascan language and culture were suppressed, Minich says. She died when Minich was twelve. “Nearly forty-three years after the passage of ANCSA, I wish she could look around and see the embracing of the cultures of the Alaska Natives,” Minich says, adding she wished her mother had been able to share stories from her early childhood with her children and grandchildren. “If I could put words in her mouth, I think she would be proud again.” Minich, a Doyon shareholder, has been with Cook Inlet Region, Inc. (CIRI) for twenty-one years. The Anchorage-based corporation includes shareholders from all regions of the state. “CIRI doesn’t have one homogenous group,” she says. “We’re a melting pot, as it were. We try to find commonalities we can all agree on. We try to celebrate all cultures.” She says being a woman does make a difference when leading a corporation, especially at CIRI. “If you look at CIRI’s shareholder base, it is predominantly women. You look at our family of nonprofits, they’re all run by women. “At one point, one of my predecessors said that when the women moved into leadership at CIRI, this is the kinder, 174

gentler side of CIRI,” she adds. “I think we’re successful in that we’re all compassionate. I think to do a job like this, you have to be compassionate.” She credits former president CEO Carl Marrs as a mentor, saying he taught her how to be a leader with employees. Former CEO and president Margie Brown’s deep knowledge of CIRI’s history was another invaluable asset, Minich says. One of the biggest changes she has seen over the years is the increasing success of CIRI’s nonprofit arms, some of which are larger than the corporation itself, she says. More than two generations from its inception, CIRI’s shareholder base has fractured in some cases, with more shareholders holding far fewer than the 100 shares the original shareholders started with. “We need to figure out new ways to engage those shareholders where the dividends aren’t as important,” she says. “We need to remain relevant and to engage our next generation of shareholders, ensuring the legacy of our corporation. “ANCSA wasn’t just for this generation or for the last generation,” Minich says. “It was for generations to come. And I want to make sure that happens.”

Schubert joined the board of directors in 1992 and has been a BSNC employee since 2002. “At the time, we were experiencing some financial difficulties,” Schubert says. “We were just getting into government contract work and there was one contract in particular that was very problematic. It was my thought I could come on board and maybe help make some changes.” Over the next few years, as Schubert helped build the Anchorage offices up, BSNC found profitability with government contracts, which now comprise about 90 percent of the corporation’s revenues. The goal now, she says, is to help management diversify BSNC’s business base. Schubert was named CEO in 2009 and added the duties of president in 2010. Schubert is also a BSNC shareholder. “I think for me personally, you really have a vested interest in how the corporation does,” she says. “I feel like it’s my obligation to do my very best for Bering Straits.” The corporation now is focusing on developing a deepwater port at Port Clarence, a process that is likely to take several years, but will have a huge ef-

Gail Schubert President and CEO Bering Straits Native Corporation Gail Schubert was fifteen years old when ANCSA was passed, and she said the act didn’t have much relevance to her at the time. She was born and raised in Unalakleet, but left to earn an undergraduate degree from Stanford University, as well as an MBA and juris doctor in law from Cornell. Bering Straits Native Corporation (BSNC) had a rocky beginning, filing for bankruptcy in the 1980s. “I really did not pay attention to BSNC,” she says. “I think in part there was nothing really tangible I was seeing from the corporation… It’s much different today.”

Schubert

Alaska Business Monthly | October 2014 www.akbizmag.com

fect on the region. Besides potentially lowering costs of energy and goods in Northwest Alaska, the port could also create jobs and other development opportunities, Schubert says. “As a corporation, we’ve been focused on Port Clarence for the past four years,” she says. The site was one of the plots of land BSNC selected as part of its ANCSA land entitlement, so when the US Coast Guard shut down its facility at Port Clarence in 2010, the corporation started working to secure it. Schubert, one of three Alaska business leaders chosen to represent the United States on the Arctic Economic Council, says climate change directly affects her region, and residents are concerned. “What concerns me is of the seventeen villages that are members in Bering Straits, fifteen are actually on the coast,” she says. “Subsistence is still critically important to our lifestyles.” Given the high costs, trying to replace subsistence foods with imported food is not feasible for most people in rural Alaska, she says. While any potential development of Port Clarence is still down the road, Schubert says BSNC has other successes to celebrate. “We are one of the only ANCSA corporations that is closest to completion of the lands transfer that we’re entitled to under ANCSA,” she says. “I think that is a tremendous success story.” She also points to the corporation’s success in hiring shareholders and descendants. “Through our internships, we’re exposing the corporation to these young college students and hopefully getting them interested in coming to work for BSNC,” she says. “We’ve also been increasing our contributions to the foundation that funds our scholarships, and that’s something that wasn’t available when I was in college.”

Sheri Buretta Chairman of the board Chugach Alaska Corporation Sheri Buretta was a small child when ANCSA passed, but she says she remembers one of the founders of Chugach Alaska Foundation, John Borodkin, visiting her parents and talking about what seemed to be important business. “I was quite young when ANCSA happened, but I do recall the discussions www.akbizmag.com

“ANCSA wasn’t just for this generation or for the last generation. It was for generations to come. And I want to make sure that happens.”

—Sophie Minich President and CEO, Cook Inlet Region, Inc.

because it seemed very important,” she says via email. “My next real experience was when I was seventeen or eighteen, and I went to a meeting with my brothers. There was a lot of yelling and it seemed to us that people were mad, and I didn’t really want to be around it.” Chugach Alaska, with its headquarters in Anchorage, has its land base in the Prince William Sound region. The corporation was one of the first to find financial success through the Small Business Administration’s 8(a) program, which offers certain Alaska Native-owned businesses the ability to win government contracts without going through a competitive bidding process. Years later, when she was living in Florida where the Air Force had stationed her husband, Buretta said she was homesick and started reading the information the corporation had sent out. It was 1992, just after Chugach Alaska had declared bankruptcy when the corporation first entered the 8(a) program government contracting field. She returned to Alaska in 1994 and started working for the regional nonprofit, Chugachmiut, helping the seven tribes in the region with their accounting and administrative processes. “I found that there was much-needed work to do regarding governance issues,” Buretta says. “I also realized there was a lack of leadership, especially from women at the corporation, and that if I didn’t step up, how could I expect anyone else to? So I did—and sixteen years later I am still Chairman of the Board at Chugach.” Chugach Alaska got off to a rough start and struggled until the 8(a) program provided what Buretta calls the “missing link of the settlement act, or the third leg of the stool. “ANCSA provided land and cash, but no real means to create economic oppor-

Buretta

tunities,” she says. “Our people lived off the land, so corporate understanding did not exist to most of the shareholders.” Buretta says she did get some help from Chugach Alaska while she was pursuing her business degree. She also credits several women as role models when she entered the work force at fourteen at the Pretzel Factory in the Northway Mall in Anchorage. She also notes Anne Wilbur was an important mentor when Buretta worked at Wilburs Flight Safety Alaska in the mid-1980s. “Being a female executive does offer a different leadership perspective,” Buretta says. “But I grew up as the only girl with three brothers, so I learned early on how to deal with boys/men.” As it became financially successful, Chugach Alaska began investing in its people through education and jobs, Buretta says. The scholarship program has paid out more than $5 million to shareholders and descendants since it was created in 1997. Chugach Alaska also supports internship and apprenticeship opportunities within the corporation. Looking ahead, Buretta notes Chugach Alaska recently embarked on a regional social and economic development initiative. “My hope is that our communities, in coordination with the corporation, will be thriving, educated, healthy, happy, and here!” R Julie Stricker is a journalist living near Fairbanks.

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ALASKA NATIVE CORPORATIONS

Marie Greene—NANA ‘Speaking with one voice’ By Julie Stricker NANA Regional Corporation President and CEO Marie Greene at the Red Dog mine. © Chris Arend Photography

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Alaska Business Monthly | October 2014

he year 1977 was a milestone for Alaska. The $8 billion, eight hundred-mile trans-Alaska oil pipeline had just been completed and the first oil started flowing in June. That was the year Marie Greene moved from her home village of Deering to Kotzebue to work for the Northwest Arctic Native Association, the precursor to NANA Regional Corporation. NANA and the other eleven Alaskabased Native regional corporations, created by the landmark 1971 Alaska Native Claims Settlement Act, were just getting their feet under them and had yet to make on impact on Alaska. In the nearly four decades since she first walked through NANA’s doors, the corporation has grown to be one of the largest Alaskan-owned businesses in the state, with 2013 revenues in excess of $1.7 billion. NANA Development Corporation, the business arm of the organization, operates in all fifty states, three US territories, and nine countries around the world. NANA Regional oversees a varied slate of programs that directly and indirectly benefit shareholders through scholarships, job training, employment, cultural programs, and lands protection. Greene, sixty-seven, who became NANA’s president and CEO in 2002, announced her retirement this fall, effective January 1, 2015. She gives credit to the people around her for NANA’s success. “In my younger years, I was blessed to be mentored by my grandmother, by Robert Newlin Sr., by our elders, and others,” she says. “They taught servant leadership. If you are a leader, you are www.akbizmag.com

there to serve the people, to work as part of the group, the team—to learn, to help, to move things forward. It is always a team effort. It was then and it is now.”

All of NANA’s Leaders are Shareholders About 13,500 shareholders of Iñupiat descent own NANA. Greene is one of them. She notes that all of NANA’s leaders were, and still are, shareholders. “Because of that, we automatically want to do the best we can,” she says. “We never forget that we are here to work on behalf of our people, that our successes and our failures are shared. So that provides a great deal of motivation to work hard. “It has been one of the greatest honors and joys of my life to serve my people in this role at NANA and I will always be grateful that I was allowed to work in this capacity.” Donald G. Sheldon, NANA’s board chairman, said in a news release: “Leadership positions require that the individual give up a great deal of personal time with family. I completely understand Marie’s decision to retire to spend more time with loved ones and cannot possibly thank her enough for her work at NANA. Although she will be leaving this position, I know she will remain involved with our corporation and region for many years to come.” For Greene, the journey started in a little one-room house on a windy, sandy spit on the Seward Peninsula where she first heard about the Alaska Native Claims Settlement Act. Greene’s grandmother raised her in the little greenpainted house. It was a local gathering place for elders and leaders to discuss the important topics of the day and to cooperate on decisions that had to be made. Landmark Land Claims ANCSA was a landmark piece of legislation in 1971 that sought to settle aboriginal land claims. The act divided 44 million acres of land and $962.5 million among twelve regional and more than two hundred village corporations. The corporations were tasked with the dual roles of making a profit and overseeing the social and cultural needs of their shareholders. “Land claims to us, before ANCSA, meant that someone put up their house www.akbizmag.com

or camp and everyone just respected that,” Greene says. “There were no titles that governed ownership. We didn’t even know what land ownership was. “When I first heard about ANCSA, the idea was very foreign to me, as it was to many people from the region,” she adds. “I thought, ‘Now this is law. I have to learn more about it so I understand it.’” Greene had returned to Deering after attending business school. She then moved to Kotzebue to find work. “The first place I went to find work was NANA,” she says. “I wanted to be involved in what they were doing. It was all very exciting.” At the time, NANA encompassed everything: land claims, the for-profit business, and nonprofits such as housing and health care. “I ended up becoming the Maniilaq Association president,” Greene says. “Maniilaq was considered the nonprofit arm of NANA at the time. From that point on, I was a part of the team because we all traveled together; we were all under one banner.” In the 1980s, NANA worked closely with shareholders to craft an agreement with Teck Cominco on the operation of Red Dog Mine, one of the largest zinc mines in the world. That partnership has proven to be an economic engine for all of Northwest Alaska. Hundreds of NANA shareholders work at Red Dog, which has paid $1 billion in total net proceeds to the corporation. In turn, NANA has paid $199.2 million in dividends.

Continued Growth of NANA During her tenure, Greene oversaw the continued growth of NANA, including the opening of the Aqqaluk Deposit at Red Dog Mine, which will provide another twenty years of mining and employment opportunities for shareholders. Greene, who also holds a master’s degree in rural development, pledged to work closely with regional partners such as the Northwest Arctic Borough, Maniilaq Association, the Northwest Arctic Borough School District, and local tribal and city governments. Working together as the Northwest Arctic Leaders Team, the group has raised more than $30 million to fund regional priorities. NANA’s involvement

with the Iñuit Circumpolar Council has put it at the forefront of Arctic issues. Other milestones in Greene’s tenure include the establishment of the NANA Elders’ Settlement Trust in 2008 and funding and development of the Rosetta Stone Iñupiaq Language CD project in 2007. Under Greene, NANA established $1 million in economic development grants in each NANA community and about $2 million in energy efficiency education and upgrades for local homes through the Energy Wise project. She also oversaw the creation of outreach programs such as shareholder forums and listening sessions, working to increase avenues of dialogue between the corporation and shareholders. “Ten years from now it is my hope that we will continue to have that strong connection with the owners of the corporation and we will continue to work very closely with the leaders of the region,” she says. Shareholder demographics are changing, she notes. More shareholders live outside the region, and NANA’s challenge is how to balance the needs of all its shareholders. “I think, because of this demographic trend, you’ll see some new things at NANA, but it will all be shareholder driven, just like today. If we do that, we’ll be on the right track, because the decisions will come from the people who own this company.” That goes back to Greene’s roots. In a letter to shareholders, Greene described a recent visit to Deering to meet with residents. She stepped outside to the beach as the Arctic wind blew and walked a few hundred feet to the house where she was raised. “I learned valuable lessons in that little green house,” she wrote. “I learned that when presenting thoughts and ideas, it’s not about ‘getting your way’—it’s about what’s best for the group. I learned that silence can be just as powerful, if not more so, than the loudest voice. But most of all, I learned that when our people work together—when we cooperate and speak with one voice—we can be heard around Alaska and the world.” R Julie Stricker is a journalist living near Fairbanks.

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ARCTIC IDEAS

Providing Support for U.S. Military Arctic Operations

Critical infrastructure already in place at Deadhorse Aviation Center etween April 29 and May 3 this year, the US Army conducted a series of training exercises out of Deadhorse Aviation Center (DAC) at Prudhoe Bay as part of Operation Spartan Pegasus, an Arctic mobility operation designed to enhance the proficiency of US joint forces Arctic airborne operations and ground maneuvers in extreme weather conditions. DAC provided hangar and conference facilities, sleeping accommodations, meal service, and vehicle support for the exercises involving a US Air Force C-17 military cargo plane, two Blackhawk helicopters, three SUSVs (small unit support vehicles), and approximately thirty soldiers. The training included a jump exercise with thirteen paratroopers descending to a drop zone just southwest

178

Photos courtesy of Fairweather, LLC

By Lori Davey

Above: US Army technicians conducted routine maintenance on the helicopters between exercises at Deadhorse Aviation Center. Top: The exercises were conducted as part of Operation Spartan Pegasus, an Arctic mobility operation designed to enhance the proficiency of US joint forces Arctic airborne operations and ground maneuvers in extreme weather conditions.

Alaska Business Monthly | October 2014 www.akbizmag.com

Above: US Army helicopters depart Deadhorse Aviation Center to conduct training exercises. Right: In the spring of 2014, the US Army conducted a series of training exercises at Deadhorse Aviation Center that included a jump exercise involving thirteen paratroopers and the heavy drop of an SUSV (small unit support vehicle). Photos courtesy of Fairweather, LLC

of DAC, following the successful heavy drop of an SUSV from the same aircraft. This is one example of operational support offered to the US Military by DAC. The following military operations were also conducted at DAC in 2014: n The US Navy Applied Physics Laboratory Ice Station established its base of operations at the DAC East hangar February 24â&#x20AC;&#x201C;April 2 n The US Army conducted ICEX 2014 Search and Rescue exercises out of DAC February 24â&#x20AC;&#x201C;25 n The US Coast Guard visited DAC on numerous occasions with its C-37A Gulfstream V jet and HH-60 Jayhawk helicopters while performing exercises out of Barrow

Arctic Importance With the publication of the US Navy Arctic Roadmap 2014-2030, preceded by the introduction of the National Strategy for the Arctic Region released www.akbizmag.com

October 2014 | Alaska Business Monthly

179

Photo courtesy of Fairweather, LLC

Deadhorse Aviation Center provided hangar and conference facilities, sleeping accommodations, meal service, and vehicle support for the exercises involving a US Air Force C-17 military cargo plane, two Blackhawk helicopters, three SUSVs (small unit support vehicles), and approximately thirty soldiers.

Unique to the US Arctic, ground transportation from ports in Anchorage direct to Prudhoe Bay offers a substantial cost savings compared to air transport and serves as an enormous force multiplier in Arctic operations. This factor, combined with a robust infrastructure already in place, affords the military unmatched operational efficiency. by the President in May 2013 and the Arctic Strategy submitted by the Department of Defense in November of that year, the US Arctic has been articulated as an area of strategic national importance from a commercial, scientific, 180

political, and military perspective. In its report, the Department of Defense recognizes the need to employ innovative strategies for supporting the Arctic mission and the balancing act necessary to undertake this mission in

an expensive operating environment during times of fiscal challenge. Fairweather LLC is in a unique position to offer its thirty-plus years of arctic experience to support the US military as it ventures into Arctic areas of operation. It is understood that each military branch recognizes a high need to ensure security, support safety, and promote defense cooperation in and around the Alaska Arctic. It is also widely acknowledged that the Alaska Arctic is melting, and soon there will be a short season transpolar route with the opening of the Northwest Passage. When that opening occurs on a predictable basis, it will

Alaska Business Monthly | October 2014 www.akbizmag.com

bring new passengers and cargo vessels to Alaska’s Arctic shores. In addition to these growing transportation requirements in the Alaska Arctic, there is also a renewed interest in offshore drilling, evidenced by offshore leases held by Shell, Conoco Phillips, Statoil, and BP.

Critical Infrastructure Strategically located in Prudhoe Bay, DAC offers the infrastructure necessary to support joint military needs in the Alaska Arctic. The Prudhoe Bay location offers logistics and communications advantages that are established and well maintained in support of the natural resource industry. Prudhoe Bay already offers airport operations capable of accommodating military transport aircraft with a telecommunications infrastructure in place, making the implementation of a C4 military communication system far less costly compared to other locales not equipped to handle C4 systems. Additionally, Prudhoe Bay has an established road system in place. Unique to the US Arctic, ground transportation from ports in Anchorage direct to Prudhoe Bay offers a substantial cost savings compared to air transport and serves as an enormous force multiplier in Arctic operations. This factor, combined with a robust infrastructure already in place, affords the military unmatched operational efficiency. DAC completed a new thirteen-acre laydown pad in 2014 that is capable of accommodating joint-use military operations with built-to-suit facilities. Offering direct runway access to Prudhoe Bay Airport, the new pad could enable the US military to expand its training exercises, conduct search and rescue operations, and perform environmental research projects and unmanned aerial operations. The pad could also assist in the resupplying and refueling of military vessels during Arctic transit. DAC is fully prepared to serve as the premier US base of Arctic military operations augmenting the US Air Force’s present northernmost operation at Thule Air Base, Greenland. DAC is comprised of two facilities and twenty-three acres of gravel laydown yard. The main DAC West facility encompasses: n 20,000 sq. ft. Hangar www.akbizmag.com

n Medical clinic with ambulance service and Medevac staging n 24 bedrooms n Dining facility n 11,000 sq. ft. of office space n Passenger terminal for fixed wing or rotor operations n Private hangar apron The DAC East hangar encompasses: n 12,000 sq. ft. hangar space n 4,000 sq. ft. office/passenger terminal

Fairweather is heavily engaged in the future of the Arctic. The vast resource development opportunities and the opening of the Arctic shipping corridors will bring the need for a greater presence of our military forces. All segments of our military will be involved with the emerging Arctic. The Deadhorse Aviation Center offers the support and infrastructure to allow each military segment a capable facility but allows the sharing of the costs. R

Lori Davey is a life-long Alaskan, originally from Tok. Davey is the General Manager at Fairweather LLC, a company that offers services to mining, oil, and gas industries including medical, aviation, expediting, weather forecasting, and logistics. Davey graduated from University Alaska Anchorage in 1992 with a Bachelor of Science in Business and a major in marketing. In 1998 she earned an MBA. In 2009, she was named to the Top 40 Under 40 awarded by the Anchorage Chamber of Commerce and the Journal of Commerce. Davey serves as a representative on the Arctic Economic Council and as a trustee on the Alaska Nature Conservancy. She is married to Trent, who is a Captain for Alaska Airlines and they have a son, Grayson.

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October 2014 | Alaska Business Monthly

181

RIGHT MOVES Oles Morrison

Barat M. LaPorte joined Oles Morrison Rinker & Baker LLP as a partner in its Anchorage office in June. She practices in the firm’s Commercial Litigation group, representing companies and individuals in litigation matters, including regulatory and appellate practice. LaPorte focuses LaPorte on protecting the interests of her clients and helps them avoid and resolve litigation.

URS Alaska

Brummer

Naomi DuCharme joined URS as a Field Camp Manager. She brings over twelve years of management experience. DuCharme holds a BS in Physical Education with an emphasis in outdoor leadership and administration from the University of Alaska Anchorage. Landis Pennock joined URS as Marketing Coordinator in August. Pennock recently graduated from the University of Alaska Anchorage with a Bachelor of Business Administration Degree in Marketing and Management.

ACDA

Anchorage Community Development Authority, or ACDA, named Brian Borguno as its new Parking Director in June. Borguno, who has over nine years of parking management experience, will be in charge of managing ACDA’s parking division, EasyPark. Borguno is a Graduate with Borguno Distinction from University of Michigan-Dearborn, obtaining a Bachelor’s degree in Economics, Communications, and Film.

Wells Fargo

Seims

Theater. A freelance voiceoverist and writer for publications all over the country, Ballas brings with her a strong history of theatre, music, writing, and marketing experience. Her position as marketing associate at AJT will include public and media relations; performance logistics; writing and design of print, radio, video, and Ballas Web marketing; and ad sales.

R&M Consultants, Inc.

R&M announced the addition of John Bennett, PLS, SR/ WA, to its Fairbanks office team in May. Bennett joined R&M’s Right of Way Group as a Senior Land Surveyor. Prior to joining the firm, he spent twenty-eight years with the Alaska Department of Transportation & Public Facilities Northern Region Right of Way Section, starting as Titles and Plans Supervisor and ending with almost fifteen years as Right of Way Chief. Additionally, R&M surveyors Jake Austin, PLS, and Gretchen Meyers, PLS, have received their professional licensure. They both passed the Principles of Surveying exam and the Alaska Land Surveying Exam, gaining their Alaska licenses in land surveying.

SEARHC

DuCharme

Pennock

Luke Hoffmann joined URS as a Staff Geologist in August. He recently graduated from the University of Alaska Anchorage with a BS in Geology. For the last fourteen years, Hoffmann has worked in environmental geology and mineral exploration in Alaska. Larry Brummer recently joined URS as a Project Contract/Procurement Specialist in July. With more than eighteen years of experience in both the government environment and the commercial sector, Brummer will predominantly focus on procurement and subcontract management. Tux Seims joined URS as an Environmental and Infrastructure Intern. Seims is currently in route to receiving his BA in Civil Engineering from the University of Alaska Fairbanks and has experience in ocean mariculture and assisting with building/designing structures.

Bozzo

Hoffman

Wells Fargo named Patti Bozzo as Alaska Commercial Real Estate Lending Manager in July. She has been with Wells Fargo for twenty-four years, joining the company as a teller in Northern California. Bozzo has worked as a business relationship manager and commercial real estate industry specialist for the last thirteen years. Claire Hoffman was named Senior Commercial Real Estate Industry Specialist at Wells Fargo. She has been with Wells Fargo for nine years, serving Alaska customers in Anchorage, Homer, and most recently in Fairbanks as a business relationship manager. Hoffman holds an MBA from the University of Alaska Fairbanks.

Alaska Junior Theater

Teeka Ballas, publisher and co-founder of F Magazine, was appointed to Marketing Associate at Alaska Junior

The SouthEast Alaska Regional Health Consortium hired Dr. Adam McMahan for the Haines Health Center in July. McMahan comes to SEARHC from the Providence Family Medicine Center in Anchorage. He earned his undergraduate degree in Social Medicine from the University of Alaska Fairbanks, his medical degree from the University of Kentucky College of Medicine, and completed his residency at Alaska Family Medicine in Anchorage.

UMIAQ

Terri Mitchell has been promoted to the Manager for UMIAQ’s newly formed Environmental Department. Mitchell holds a Master of Science in Environmental Policy and Management with honors and has more than fourteen years of experience providing enviMitchell ronmental documentation and permitting for bathymetric surveys in the Arctic, telecommunication infrastructure, airports, roadways, wind towers, material sites, and fuel tank farms.

OH MY! 182

Alaska Business Monthly | October 2014 www.akbizmag.com

Compiled by Russ Slaten NSTS

Scott Vierra has teamed up with North Star Terminal and Stevedore Co. LLC in their equipment services division, NSES. He brings fourteen years of professional business-to-business experience that has included selling equipment and fleet vehicles throughout the Vierra state of Alaska.

WHPacific, Inc.

WHPacific, Inc. announced the addition of Amanda Tuttle as Environmental Scientist to the company’s Anchorage office in August. Tuttle will be working permitting and hazardous waste management contracts for WHPacific. She has more than eight years’ experience as an environmental scientist; she worked for Alyeska Pipeline, BP’s heavy oil pilot project, and at the Gulf of Mexico Deepwater Horizon incident. Additionally, Benjamin Lloyd and Travis Holmes joined WHPacific, Inc. in its Anchorage office as Civil Engineers in Training (EIT). Lloyd and Holmes will be working with WHPacific’s transportation group. Lloyd earned a BS in Civil Engineering from Brigham Young University in 2013 and is currently working on his MS in Civil Engineering at the University of Alaska Anchorage. Holmes is a recent graduate of the University of Alaska Anchorage with a BS in Civil Engineering.

RIM Architects

Swanson has worked as a freelance professional photographer and provided marketing and event coordination for Davis Constructors & Engineers.

Talkeetna Alaskan Lodge

Talkeetna Alaskan Lodge welcomed Lanny Chin as Executive Chef in July. Chin is responsible for the exquisite culinary experience at the Foraker Restaurant, the Base Camp Bistro, and all catered events. Since completing the program at the International Culinary Arts and Sciences Institute, Chin was the dining room manager for J. Chin Alexander’s and has worked at Chicago’s world-famous Alinea under the renowned Chef Achatz.

Arnold

www.akbizmag.com

Northrim Bank

Bolton

Lillo

Schnese

Uttech

Huna Totem Corporation

Huna Totem Corporation welcomed Anne French as the newly created position of Vice President of Marketing and Sales in July. With over twenty years of experience, she is a brand strategy executive with a proven record for increasing sales and profit performance across a broad range of businesses, including Procter & Gamble; French Clorox; the software company Intuit; and advertising agency Foote, Cone & Belding.

Calista Corporation

Swanson

Jason Arnold, Associate AIA, earned his Construction Document Technologist accreditation through the CDT Program in July. Arnold joined RIM in 2008, providing a variety of services including design assistance, contract administration, construction documentation, building specifications, and project production assistance. Kirsten Swanson joined RIM as Marketing Assistant in August. Swanson recently earned dual Bachelor of Business Administration degrees in Marketing and Management from the University of Alaska Anchorage.

Kinegak-Friday is Associate General Counsel at Calista. She is a graduate of Stanford University and University of California, Los Angeles School of Law. Her main legal focus has been on Alaska Native Corporations and Alaska Native issues. She is a former Calista intern and Calista Heritage Foundation scholarship recipient.

Owletuck

Kinegak-Friday

Calista Corporation welcomed shareholders George Owletuck and Kirsten Kinegak-Friday to the team in August. Owletuck is the Government Relations Liaison. He brings leadership experience and several years of working in government relations. Owletuck served in the US Air Force and has previously worked for the late US Senator Ted Stevens.

Northrim Bank announced the promotion of four officers in July. Debbie Bolton, Training and Development Officer, has over ten years of experience in banking and has been with Northrim Bank for almost five years. She holds an Associate’s Degree in Science from Weber State University. Jeanine Lillo, Vice President, Controller, has been with Northrim Bank for over eleven years. Lillo holds a Bachelor’s Degree in Business Administration and Computer Information Systems from Emporia State University. Judy Schnese, Assistance Vice President, Audit Supervisor, has over twenty-five years banking experience. She worked for First Interstate Bank, National Bank of Alaska, and then Wells Fargo. Schnese also worked as the Internal Audit Supervisor at Hope Community Resources. She is a Certified Internal Auditor and Certified Financial Services Auditor. Linda Uttech, Vice President, Facilities Manager, has been with Northrim Bank for two years. Prior to Northrim, she worked as the Facilities Manager at the Hilton Anchorage Hotel, with over eighteen years of experience in the hospitality industry. R

October 2014 | Alaska Business Monthly

183

INSIDE ALASKA BUSINESS

ConocoPhillips

onocoPhillips Alaska signed a contract with Doyon Drilling to build a new rotary drilling rig for the Kuparuk River Unit on Alaska’s North Slope. This is the first new-build rotary rig that ConocoPhillips has added to Kuparuk’s rig fleet since 2000. The rig will be named Doyon 142 and is scheduled to begin drilling in February 2016. Doyon 142 will join Nabors 7ES and Nabors 9ES, two other recent additions to the ConocoPhillips Alaska drilling operations. Nabors 7ES has added about 4,400 barrels of oil per day to North Slope production since it began drilling in May 2013. Nabors 9ES began working in January and has added 2,600 barrels of oil per day to North Slope daily production. Doyon 142 will employ about one hundred people directly and support hundreds of indirect jobs. Currently, ConocoPhillips has six development rigs working on the North Slope and one in the Beluga River Unit in Cook Inlet.

Alaska Growth Capital

laine Garner of Nuiqsut was named the second recipient of the 2014 North Slope Marketplace business plan competition in August. Garner is the owner of Lil Mo’s Supply Store, a locally owned and operated start-up business in Nuiqsut, a small village in the North Slope Borough. It specializes in hunting gear, hardware, tools, and materials. Garner will utilize the $25,000 grant to purchase more shelving, a storage unit, and to increase inventory options. Lil Mo’s Supply Store will work to increase access to affordable hardware

Compiled by Russ Slaten

products and hunting gear. The business plan is to start by improving their store’s infrastructure and then diversify the inventory to include products that community members have been requesting.

Denali Media Holdings

eneral Communication, Inc. (GCI) closed the transaction between its wholly-owned subsidiary, Denali Media Holdings, and Ketchikan TV of Evergreen, Colorado. The transaction grants GCI ownership of three CBS broadcast stations in Southeast Alaska: KXLJ in Juneau, KTNL in Sitka, and KUBD in Ketchikan. The Federal Communications Commission granted authority to Denali Media Holdings in May to purchase the three CBS broadcast stations in Southeast. Denali Media Holdings now owns CBS and NBC affiliates in Southeast Alaska and the CBS affiliate KTVA-TV in Anchorage.

Pitch-On-A-Train

hile they rode the Alaska Railroad from Anchorage to Whittier on August 1, five entrepreneurs presented their business models, funding needs, and market research to a panel of judges alongside a live audience. Hosted by the Anchorage Economic Development Corporation (AEDC), the Pitchon-a-Train competition brought ideas that ranged from commercial Bitcoin applications to drone surveillance technology, but it was Marc Wheeler of the Juneau café Coppa who wooed the judges most with his rhubarb sherbet. Marc Wheeler of Coppa, an ice cream shop and café in Juneau, presented his idea

of dramatically expanding his existing business by adding a mobile location that would meet more than 1 million cruise ship passengers at the Juneau dock each summer. After providing the panel with a sample of the rhubarb sherbet, the judges were convinced and named Wheeler the winner of AEDC’s 2014 Pitch-on-a-Train. In addition to business coaching by the panel, Wheeler was awarded fifty thousand American Airlines Miles sponsored by Terry Jones, twenty-five thousand Alaska Airlines Miles sponsored by GCI, and a three-month membership to The Boardroom, a co-working space in Anchorage with plans to expand to Juneau in 2015.

Brice Equipment

alista Corporation subsidiary Brice Equipment invested in two new pieces of equipment in August that will help companies operating in Alaska greatly reduce their fuel consumption and dramatically lower carbon emissions. Brice Equipment is the only Alaska dealer for the JetHeat Micro-Turbine Heater, the most advanced industrial heater on the market. It’s the only diesel-fired portable heater in the world, converting over 98 percent of fuel input into useable heat output. The result is a savings of over $500 per day in fuel. The JetHeat offers substantially reduced CO2, NOx, and SO2 emissions, meeting stringent air permitting requirements. Brice Equipment also exclusively offers the Puritan Arctic Heat Generator (AHG). The AHG eliminates problems associated with continuous idling of larger diesel assets in cold weather regions. Idling and insufficient engine loading causes heavy exhaust output (wet stacking) that damages equipment.

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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INSIDE ALASKA BUSINESS The AHG allows operators to shut down the primary engine, which greatly reduces both the fuel burned per hour and sooty emissions output. Not only does this help the environment, it saves companies from costly repairs associated with engines continually running cold.

Bonanza Fuel, LLC

he Alaska Industrial Development and Export Authority (AIDEA) Board at its August meeting in Ketchikan unanimously approved an energy development loan participation for a project located in Nome. The loan, to Bonanza Fuel LLC, is for $7,312,500 (90 percent) of an $8,125,000 loan brought to AIDEA by Northrim Bank. Northrim originated the loan and is participating with $812,500. The purpose of this loan is for long term financing for the expansion of a petroleum storage facility. The project adds three storage tanks to the existing six tanks at the facility and increases storage capacity by 2.3 million gallons to a total of 5.9 million gallons. The project also increases competition among local fuel suppliers and enhances the development of Nome’s harbor by providing additional fuel storage to meet increasing demands for marine traffic in the Bering Straits. Additionally, this increased storage capacity reduces the likelihood of a fuel shortage in Nome. The project generated fifteen construction jobs and creates three new permanent positions.

Alaska Flour Company

SDA-Rural Development announced in August a Value Added Producer Grant, or VAPG, in the amount of $91,100

Compiled by Russ Slaten

awarded to Wrigley Farms LLC, which does business as Alaska Flour Company. The Alaska Flour Company is the only commercial flour mill in Alaska. It specializes in high-quality, artisan, stoneground barley flour and barley cereals that are grown and milled on their farm in Delta Junction, southeast of Fairbanks. The primary objective of the VAPG program is to help agricultural producers enter into value-added activities related to the processing and marketing of bio-based value-added products. Generating new products, creating and expanding marketing opportunities, and increasing producer income are the end goals of the program.

Alaska Communications

laska Communications raised Home Internet speeds in Anchorage to 30 and 50 megabits per second (Mbps) in August. Alaska Communications previously introduced 15 Mbps Home Internet speeds statewide in May. Alaska Communications customers who choose faster Home Internet will have better downloading and uploading speeds. Customers with 50 Mbps download speeds will see upload speeds of 10 Mbps for faster and more reliable video chats, a better gaming experience, photo uploading, file backup, and online information storage—all without overage charges.

GeoNorth

he US Department of Homeland Security Science and Technology Directorate announced in August the

selection of Stevens Institute of Technology and University of Alaska Anchorage (UAA) as co-leads for a new Center of Excellence for Maritime Research, or CMR. This is the first Center of Excellence award for UAA. The new Center will expand efforts initiated in 2008 and develop innovative Arctic research under UAA’s management. The CMR will collaborate with the Science and Technology Directorate, the Department of Homeland Security’s operational components, industrial partners, and other Centers to help the United States address challenges in the maritime domain. GeoNorth, as a subcontractor, will be involved in the development of a GIS portal to be used among all team members throughout the life of the grant award. In addition, with maritime domain awareness as a primary focus, GeoNorth will be fulfilling any satellite imagery requirements that may be requested under this award.

Upper Tanana Energy

anacross, Inc., the Native Village of Tanacross, and Alaska Power & Telephone executed a Memorandum of Agreement for development of the Yerrick Creek Hydropower Project. The proposed 1.5 megawatt project would be located near Tanacross in the Upper Tanana region of Alaska The three entities have formed a new energy business venture, named Upper Tanana Energy, to develop the Yerrick Creek project and sell power to Alaska Power Company—the incumbent electrical utility and a subsidiary of Alaska Power & Telephone—through a longterm power sales agreement. Upper Tanana Energy’s Yerrick Creek

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INSIDE ALASKA BUSINESS project is anticipated to supply 4.9 million kilowatt hours of clean energy per year—enough to replace 375,000 gallons of diesel fuel per year, or approximately 40 percent of the Tok and upper Tanana region’s electrical load. Engineer’s estimates indicate that Yerrick Creek has the potential to supply energy at 50 percent of the cost of diesel-fired generation. Total project cost is estimated at $15 million, nearly $1 million has been spent so far. Tok, Tanacross, Tetlin, and Dot Lake would benefit from the project. The Yerrick Creek hydropower project’s features are located entirely on private land owned by Tanacross, Inc.—the village corporation representing the community—and lands owned by the state of Alaska. Yerrick Creek is a small, low impact “run-of-river” hydro project with a minimal environmental footprint. The project will use a small diversion to collect water for energy production before returning water back to the creek downstream. The Yerrick Creek project’s useful lifespan is estimated at over fifty years.

Port of Anchorage

n August, the Port of Anchorage conducted a week-long collaborative Concept Planning Charrette to identify and refine concept designs for the Anchorage Port Modernization Project. The Concept Planning Charrette is a workshop that involves key stakeholders directly in identifying operational constraints, known risks, and user priorities. More than fifty individuals representing Port users and vessel operators, technical and subject matter experts, and Port of Anchorage and Municipality of Anchorage leadership participated in the Charrette. A Program Manage-

Compiled by Russ Slaten

ment Consultant team, led by CH2MHILL, conducted the effort.

Dimond Center

imond Center, Alaska’s largest shopping center, announces the addition of H&M, the Swedish international clothing retailer, in 2015. H&M will join an existing strong retail mix and represents Dimond Center’s investment in bringing quality retailers to Alaska. The new H&M will consist of two stories and thirty-one thousand square feet with an energy-efficient glass and panel façade. The store will be located in the southeast tower of the building, and all current tenants will be relocated within the shopping center. Construction began in August to remodel the anchor space.

Junior Achievement of Alaska

utstanding Alaska business leaders will join the Alaska Business Hall of Fame at the annual Junior Achievement recognition event in January 2015. Business peers recently selected Jo Michalski and Jana Hayenga—retail store owners, the Odom Brothers—Odom Corporation, Dana Pruhs—Pruhs Corporation, and Sherron Perry—Founder of Fairweather LLC—a leading oil and gas service company. These business leaders are honored for their direct impact toward furthering the success of Alaska business, demonstrated support and commitment to Junior Achievement’s programs, and demonstrated commitment to Alaska business. Junior Achievement programs and volunteers empower young

people to own their economic success. The induction ceremony into the Alaska Business Hall of Fame will be held January 29, 2015 at the Dena’ina Civic & Convention Center in Anchorage. Junior Achievement of Alaska, Inc. and Alaska Business Monthly are the title sponsors of this event. Alaska Business Monthly will feature an interview and biography of each of the Laureates in the January 2015 edition’s Junior Achievement special section. In 1987, Junior Achievement of Alaska, Inc. 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. The 29th annual celebration includes a reception beginning at 5:30 p.m., dinner and induction ceremony at 6:30 p.m., concluding by 8:30 p.m. The evening will also include a special recognition of the many past inductees who will be in attendance. There are limited sponsorship opportunities available; call 907-344-0101 for more information. Individual tickets are $150 and can be purchased online: http://alaska.ja.org

Alutiiq Pacific

lutiiq Pacific, LLC, a subsidiary of Afognak Native Corporation, won a $10 million contract to provide security services for the Airbus A320 Assembly Line in Mobile, Alabama. Alutiiq Pacific will provide physical security officers for site security and protection, fire and rescue first intervention capability, surveillance, control center operation, entry and exit control, reception, security administration and more. R

• General Contracting • Marine Infrastructure • Design Build

Dutch Harbor - Unalaska, Alaska

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AGENDA October Museums Alaska/Alaska Historical Society Joint Annual Conference

October 1-4—Seward: The 2014 theme is “Milestones: Interpreting events that change the course of communities,” exploring the opportunities and challenges museums face in commemorating community milestones such as the Great Alaska Earthquake or the EXXON-Valdez Oil Spill. resbayhistorical.org

Compiled by Tasha Anderson Alaska Chapter of the American Fisheries Society Annual Meeting

Alaska Federation of Natives Annual Convention

ACS Convention

October 2-5—Hilton Anchorage, Anchorage: This annual convention is an opportunity to complete up to twenty-four CEUs over the three day event in all required course topics, as well as special events such as meet and greets and receptions. alaskachiropracticsociety.com October 6-10—Westmark Fairbanks Hotel & Conference Center, Fairbanks: The 2014 “Good as Gold” ATIA convention is for Alaska’s tourism industry leaders with delegates from tour operators, wholesalers, Alaska vendors, destination marketing organizations and elected officials. alaskatia.org

All-Alaska Medical Conference

October 9-11—Sheraton Anchorage Hotel and Spa, Anchorage: A continuing medical education conference put on by the Alaska Academy of Physicians Assistants, providing up to 25 CMEs. akapa.org

October 13-17—Ketchikan: This is the annual conference of the Alaska Association of Harbormasters & Port Administrators. alaskaharbors.org

AMA Fall Convention: Celebrating 75 Years!

October 15-18—Dena’ina, Anchorage: The four-day convention of the National Indian Education Association will focus on strengthening NIEA’s mission of advancing comprehensive educational opportunities for American Indians, Alaska Natives, and Native Hawaiians throughout the United State. This year’s theme is “Building Education through the Generations.” niea.org

Alaska Chamber Annual Fall Conference & Policy Forum

October 20-22—Alyeska Hotel, Girdwood: The state’s premier business conference. This year’s topics include healthcare reform and implementation, worker’s comp reform, grass roots advocacy, small business workshops, etc. alaskachamber.com

October 20-22—Dena’ina Center, Anchorage: First Alaskans Institute helps develop the capacities of Alaska Native people and their communities. The theme for this years’ annual conference is “Get Up! Stand Up!” firstalaskans.org

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November 12-15—Anchorage: AGC of Alaska is a non-profit construction trade association dedicated to improving the professional standards of the construction industry. agcak.org

Transcending Adversity: 2014 Alaska Child Maltreatment Conference

November 17—Hilton Anchorage, Anchorage: The annual conference of the Alaska Children’s Alliance, a not-for-profit 501(c)3 dedicated to improving community responses to child maltreatment. alaska. nationalchildrensalliance.org

AMMA Annual Business Meeting

First Alaskans Institute Elders & Youth Conference

November 3-7—Dena’ina Center, Anchorage: The theme for the 2014 Alaska Miners Association Fall Convention is: Celebrating 75 Years! This event features short courses, technical sessions, history night, the AMA banquet, an expanded trade show, and MSHA surface and underground refresher courses. alaskaminers.org

Associated General Contractors of Alaska Annual Conference

NIEA Annual Convention

October 28-31—Hilton Anchorage Hotel, Anchorage: ATCEM, founded in 1994, is an Alaska Native Tribal Health Consortium gathering that brings together tribes, non-profits, state, and federal organizations for a week of environmental breakout sessions, presentations, and trainings with discussions focusing on finding and implementing solutions to address the unique environmental concerns facing Alaskan communities. atcemak.com

November

AAHPA Annual Conference

October 23-25—Dena’ina Center, Anchorage: Annual gathering of Alaska Native peoples to discuss current news and events on a state, national and international level. nativefederation.org

Alaska Tribal Conference on Environmental Management (ATCEM)

Alaska Travel Industry Association Convention

October 20-24—Centennial Hall, Juneau: This year’s theme is “Bridging disciplines to solve today’s challenges in resource management.” afs-alaska.org

RDC Annual Conference: Alaska Resources

November 17-18—Anchorage: The Alaska Municipal Management Association (AMMA) is a professional organization of municipal managers and administrators in Alaska; its purpose is to increase the proficiency of municipal managers and aid in the improvement of municipal administration in Alaska. alaskamanagers.org

Annual Local Government Conference

November 17-21—Anchorage: Joint conference of the Alaska Municipal League and the Alaska Conference of Mayors. akml.org

November 19-20—Dena’ina Center, Anchorage: The conference provides timely updates on projects and prospects, addresses key issues and challenges and considers the implications of state and federal policies on Alaska oil and gas, mining and other resource development sectors. akrdc.org

December ALASBO Annual Conference

December 7-10—Hotel Captain Cook, Anchorage: Annual conference of the Alaska Association of School Business Officials. alasbo.org

Alaska Bird Conference

December 9-11—Barnof Westmark Hotel & Conference Center, Juneau: Every two years, researchers and managers convene to report on all aspects of bird biology, management and conservation in Alaska. alaskabirdconference.org

January 2015 Meet Alaska

January 8-9—Dena’ina Center, Anchorage: Hosted by the Alliance, this annual energy conference includes educational forums and a tradeshow. alaskaalliance.com

Alaska Marine Science Symposium

January 19, 2015—Anchorage: Scientists, researchers, and students from Alaska, the Pacific Northwest, and beyond come to communicate research activities in the marine regions off Alaska. alaskamarinescience.org

Alaska RTI Conference

January 23-25—Dena’ina Center, Anchorage: Featured presenters include Doug Fisher, Austin Buffum, Anita Archer, Tricia McKale Skyles, Catlin Tucker, Lexie Domaradzki and Gary Whiteley. The small and rural schools preconference is on Friday, January 23. asdn.org/2015-alaska-rti-conference/

Anchorage AEYC Early Childhood Conference

January 28-31—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

Alaska Peony Growers Association Winter Conference

January 29-31—Westmark Hotel, Fairbanks: The Alaska Peony Growers Association is a membership organization comprised of commercial peony growers as well as those interested in the emerging peony industry in Alaska. alaskapeonies.org

Junior Achievement’s Alaska Business Hall of Fame

January 30—Dena’ina Center, Anchorage: Junior Achievement of Alaska is a non-profit whose purpose is to inspire and prepare young people to succeed in a global economy. juniorachievement.org R

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2014 Charities Alaska Dome

The Dome is “Revolutionizing Alaskan athletics” and is “dedicated to promoting health and wellness of all Alaskans by providing recreational activities year round in a safe, clean, and inviting state-of-the-art indoor facility.” It has five core values that “represent the combination of emotional, intellectual, and moral qualities that distinguish both an individual’s and an organization’s character,” which are respect, integrity, discipline, courage, and generosity. The Dome, located at 6501 Changepoint Drive in Anchorage, is 601 feet long, 290 feet wide, and 87.5 feet tall, and is suitable for any field or turf sport, including soccer, baseball, softball, footballs, rugby, lacrosse, and “even” kickball. Memberships are available, but for a daily drop-in fee anyone can use the dome, and membership is not required to rent the track, field space, or batting cages. The Dome also offers equipment rentals, as well as shower facilities and locker rooms.

Anchorage Concert Chorus

The mission of the Anchorage Concert Chorus is “To serve Anchorage and surrounding communities by fostering excellence in choral music through world-class vocal performance, community events, and music education.” It was founded in 1947 by Lorene Harrison. It sponsors the ACC Vocal Scholarship Competition with high school and college divisions and has the Mentor Awards Program for high school or college age students to receive the opportunity to receive mentoring from Dr. Grant Cochran, the choral director. The Anchorage Concert Chorus has done tours to Czech Republic, Russia, Australia, New Zealand, Central and Eastern Europe, Scotland, Wales, Canada, Brazil, and Argentina. In Anchorage, this month the Anchorage Concert Chorus will perform Banquet of Voices, a series of masterpieces for multiple choirs from the Renaissance to the present; Family Holiday Pops, which features traditional hymns and a sing-along; Love Notes, featuring romantic songs; and a Community Messiah, an Anchorage tradition since 1947.

Covenant House

Covenant House opened its doors in 1988 and since then has served the homeless, at-risk, and trafficked youth in Alaska. Covenant house is available to these youth twenty-four hours a day, seven days a week, year round. Its three main programs are Emergency Shelter, Street Outreach, and Transitional Living Programs. Additional programs include housing services, health care services, a youth enrichment program, pastoral ministry, and employment/education assistance. In 2013, Covenant Houses’ 25th anniversary, the organization opened a new Youth Engagement Center, expanding the number of available shelter beds from forty to sixty, combining all other non-residential services under a single roof, and increasing access to other programs. Covenant house also provides support services to parents that are struggling with difficult or troubled teens. Information and assistance is available to improve communication and to build stronger relationships between parents and their teenage children. Covenant House hosts special events throughout the year designed to raise awareness and generate support, including the Fire & Ice Ball, the Passage House Luncheon, the Don Fridley Memorial Golf Tournament, and a Candlelight Vigil each November in Honor of National Homeless Youth Awareness Month.

thread

The mission of thread is “to advance the quality of early education and child development by empowering parents, education child care professionals, and collaborating with our communities.” It is a statewide network of professionals who work independently with families and early educators to enable them to guide children to lifelong success. For more than twentyfive years, thread has been working in Alaska to promote accessible, affordable, and quality early care and learning. Known as Child Care Connection in 1985, the organization opened its first office in Anchorage. It is now a statewide network with hubs in Anchorage, Fairbanks, and Juneau. The name was chosen to signify “the common thread” that ties together a network of support families, early educators, and communities in Alaska. thread has thirteen locations and provides services in fifty-eight Alaska communities; it provides support to more than 7,000 families, trains more than 2,500 early educators, and offers assistance to almost 200 early care and education programs. R 188

The Anchorage Mayor’s Charity Ball Funding charities for twenty years By Tasha Anderson

he Anchorage Mayor’s Charity Ball (AMCB), a nonprofit 501(c)(3) organization, made its first appearance in 1993. Since that time, the Ball has donated $2.7 million to more than sixty charities. It was founded by Robert Penney, a group of volunteers, community leaders, and then-Mayor Rick Mystrom. Henry Penney, Robert’s son and current president of the charity’s board of directors, clarifies that AMCB is not a part of the Mayor’s office. “It was my father’s idea to try to leverage the [Mayor’s] office for charity. [But AMCB] is completely separate from the Mayor’s office, [though] the Mayor has historically attended every year.”

High Attendance in 2013 Last year’s event grossed $264,000 in gross revenue. After expenses, the AMCB was able to donate $207,000 to the four randomly selected charities. Henry Penney says that last years’ attendance was quite high with almost eight hundred attendees, though he attributes that partly to it being the twentieth anniversary of the event. Generally attendance ranges from the high six hundreds to the low seven hundreds. In addition to dinner, the event includes live and silent auctions and dancing. “It’s a lot of work,” Penney says. “We start in March.” To keep costs as minimal as possible, all of the work put into AMCB is volunteer work, from the organizers to the emcee. “Typically we’ve been fortunate in getting Paul McGuire [to be auctioneer],” Penney says. “He’s done it the last few years,” and will again this year. Part of the charity’s success is that all of the organizers aren’t just focused on raising money, but on planning a pleasant evening for all in attendance. “We try to keep the live auction event relatively brief but profitable—so we usually keep it to about a dozen items.” Following the auction, guests can dance, socialize, and bid on the silent auction items. “Predominantly we raise a fair amount of money,” Penney says, “[but] it’s a really fun social event on top of everything else.”

Alaska Business Monthly | October 2014 www.akbizmag.com

Philanthropy Charity Review Process A second huge boon to AMCB’s success is the charities themselves. Penney explains that they’re selected through a reviewed, but random, process. Each charity is asked to complete an application which certifies specific criteria, such as the charity must be a 501 (c)(3) organization; it must have a physical address in Anchorage for three years preceding application; it must have articles of incorporation filed with the State of Alaska or be a recognized chapter of a national organization; and it must have a non-discrimination policy. Additionally, the application sets out guidelines and requirements for the charity if selected. For example, if the charity is selected, funds received must be used to further the mission of the charity to benefit the Anchorage community and cannot be used for advocacy or lobbying. Further, selected charities are required to participate at the event. Each charity is required to provide one item for the live auction with a value of at least $1,000. In addition, each charity selected is given its own silent auction table, which it is responsible for filling with up to fifty items. The charities receive all of the funds generated at their silent auction table. Any funds raised during the live auction or from the AMCB Committee table are then split four ways between the charities. “If they’re really productive on their respective silent auction table, they can run their numbers up,” Penney says. He thinks it’s important for the charities to be active participants, that they “have some skin in the game.” Random Drawing Once the applications are screened and approved, the selection process is entirely random. The approved charities are separated into three categories: health and human services, arts, and everybody else. “The reason we have the ‘everybody else’ is that ten years ago Friends of Pets ended up in the arts spot. A couple folks [objected], and we ended up setting up the last category.” Once all the charities are sorted, all of a category are literally put into a hat from which the Mayor selects them; two from the health and human services hat, one from the art hat, and one from the everyone else hat. Having new, random charities creates a constantly rotating network of AMCB supporters and contributors. While large companies such as Alaska Native Corporations and oil and gas companies participate as sponsors and donors every year, there are always new interested contributors. For example, “last year the Winter Olympians Foundation was one of the beneficiaries, and they brought a whole new constituency that hadn’t been to the ball before, as well as new donors and live auction items that had never been contributed,” Penney says. Every charity is required to have a board, and those board members will have connections that allow the AMCB to expand itself from year to year. This year’s charities are the Anchorage Concert Chorus, the Alaska Dome, Covenant House, and thread. The 2014 Mayor’s Ball is being held at the Dena’ina Civic www.akbizmag.com

and Convention Center on Saturday, October 11. It is a black tie event starting with cocktails at 5:30 p.m. R Tasha Anderson is the Alaska Business Monthly Editorial Assistant.

Anchorage Mayor’s Charity Ball

n its twenty-one years of operation, the Anchorage Mayor’s Charity Ball has helped to raise funds for all of the following charities, some more than once, as charities are eligible for reapplication five years after being selected. The 2014 selectees have been included in the list below.

n Alaska Center for the Performing Arts, Inc. n Alaska Children’s Services n Alaska Conservation Alliance n Alaska Dance Theatre n Alaska Design Forum n Alaska Dome n Alaska Health Fair, Inc. n Alaska Injury Prevention Center n Alaska Junior Theatre n Alaska Moving Image Preservation Association n Alaska Museum of Natural History n Alaska Theatre of Youth n Alaska Winter Olympians Fund n Alaska Youth & Family Network n Alzheimer’s Resource of Alaska n American Diabetes Association n American Lung Association n American Red Cross of Alaska n Anchorage Armed Services YMCA n Anchorage Bridge Builders n Anchorage Center for Families n Anchorage Citizens Coalition n Anchorage Concert Association n Anchorage Concert Chorus n Anchorage Opera n Anchorage Symphony Orchestra n Anchorage Youth Symphony n Assets, Inc. n AWAIC (Abused Women’s Aid In Crisis)

n Bean’s Café n Big Brothers Big Sisters of Anchorage, Inc. n Black Arts North n Blood Bank of Alaska n Boys & Girls Clubs of Southcentral Alaska n Campfire USA n Catholic Social Services n Challenge Alaska n Covenant House n Downtown Soup Kitchen n EagleCrest Academy n Easter Seals of Alaska n Food Bank of Alaska n Friends of Pets n Girl Scouts Susitna Council n Great Land Trust, Inc. n Green Star n Habitat for Humanity n Hospice of Anchorage n Lutheran Social Services n Nine Star Enterprises n Northstar Skate Club n Planned Parenthood n Pregnancy Support Services n Programs for Infants & Children n Rainbow Connection n Salvation Army n Special Olympics Alaska n Standing Together Against Rape n Stone Soup Group n The Imaginarium, Inc. n The Music Machine n thread

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By Tasha Anderson

DINING

Alaskan Soda Jerk

Photo courtesy of Alaskan Soda Jerk

AN ALASKAN ORIGINAL

ALASKA THIS MONTH

Alaskan Soda Jerk Owner Kelsey Ingram at the 2014 Alaska State Fair.

For 27 years, we've been proud to bring you Alaskan Amber. Brewed and bottled in Alaska, celebrated the world over.

Award-Winning Beer from the Last Frontier. Brewed and Bottled in Juneau, Alaska

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wner Kelsey Ingram says Alaskan Soda Jerk is a merger of fond childhood memories consuming flavored sodas in Texas and a thirteen-year history of bartending and being a vendor at various Alaska fairs and festivals, all set to 1950s music and themes. Alaskan Soda Jerk offers a variety of specialty fountain drinks, mostly Coca-Cola products mixed with juice and syrups. Ingram’s favorite is the Pineapple Express, which is Dr. Pepper mixed with pineapple juice and vanilla served with a dash of fresh ground nutmeg and a chunk of pineapple. Flavored energy drinks, lemonades, and root beer floats are also available. Recent additions to the menu include malts and shakes, and just this year Alaskan Soda Jerk added scoops, sundaes, and banana splits, all of which are made with Alaska-made ice cream. Guests are invited to grab a stool and hang out while the soda jerks throw bottles up in the air and dance to Jerry Lee Lewis. “We go to tireless lengths to give our guest an experience that is unlike any other,” Ingram says. “We won the best new booth award at the Great Alaska State Fair in Palmer and most entertaining, two years running, at the Tanana Fair in Fairbanks,” Ingram says. This year Alaskan Soda Jerk was at nine events, employed twenty-four people, and is adding more events and people every year. “We prefer to operate at festivals. This way it stays something special that you can’t have any day,” Ingram says. Ingram is looking to expand Alaskan Soda Jerk into catering more private events, such as the wedding they did this year. “The drinks and deserts are a great addition to any event,” Ingram says. “At the end of the day, my partners and I just really enjoy what we do.” aksodajerk.com R

Alaska Business Monthly | October 2014 www.akbizmag.com

ALASKA THIS MONTH By Tasha Anderson

DINING

Alaska Cake Studio

Alaska Cake Studio bakes up delicious cupcakes and custom cakes. Photos courtesy Alaska Cake Studio

or those who need a pick-me-up to fight the fading October light, look no further than the Alaska Cake Studio located at 608 West Fourth Avenue in downtown Anchorage. The bakery/dessert restaurant has a warm, welcoming interior with seating for those taking a break from the cold. Traditional bakery cases display a variety of treats. Lisa Reusser, Alaska Cake Studio manager, says two different kinds of cupcakes are baked daily, but the only scheduled flavor is the red velvet cakes, which are made on Tuesdays. “Otherwise, [the pastry chefs] just surprise us,” Reusser says. In addition to cupcakes and cake available whole or by the slice, Alaska Cake Studio has a range of fudge, bon bons, and ice cream. Their individually sized silk and mousse desserts generally have some sort of cookie crust, topped with silk or a silk/mousse combination, and then coated, often in chocolate. Flavors range from a berry and chocolate mousse pyramid to a caramel silk pie. Alaska Cake Studio also provides custom cakes for any occasion, Reusser says. “Recently we’ve been doing cakes for gender-reveal parties; we do either a pink or blue cake on the inside, so when the cake is cut guests find out if it’s a boy or a girl.” Other recent notable custom cakes the bakery has done include an exact replica of a customer’s guitar and a “Hulk, Spiderman, Batman montage cake,” as Reusser describes it. The best reason to visit Alaska Cake Studio, of course, is that everything just tastes good. “All of the recipes are well thought out and the flavors are well put together,” Reusser says. “You’re not only getting a fun cake that looks awesome, you’re getting one that you want to keep eating.” cstudio@gci.net | 907-272-3995 R

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Fairbanks Anchorage

Skagway

Kenai Haines Whittier Sitka

Kodiak

Petersburg

Juneau

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ALASKA THIS MONTH By Tasha Anderson

TRAVEL

Photo courtesy Jeff Gere

Talk Story Festival

Jeff Gere (above) organizes the Talk Story Festival, which includes many other story tellers.

“

tory is one of the foundations of any society, community, and relationship,” says Jeff Gere, director of the Talk Story Festival, a Hawaiian storytelling celebration. Taking place October 17 and 18 at the McCoy Pavilion at Ala Moana Beach Park, this is the festival’s 27th year. Nine seasoned story tellers are featured each night; each storyteller is given twenty minutes, “which is long enough to deliver a powerful tale—or two—but not endless,” Gere explains. The storytellers change year to year, but there are a few who return from time to time. This years’ group features two mainland tellers, Kuniko Yamamoto from Japan and Charles Johnson from California. In addition, there will be nine tellers, including Gere, from Hawaii. “I look for folks who can hold the stage, grab and hold an audience, and deliver a message, an experience—use that precious stage time well,” Gere says. The stories run from 6 p.m. to 9:30 p.m. each night. Friday’s program will consist of “Spooky” stories and Saturday’s will be traditional epics, including Pele and Hi’iaka tales, performed as a relay, tag-team telling. Many of the stories, Gere says, “never travel to the mainland,” making the Talk Story Festival an opportunity for travelers to experience a unique aspect of Hawaiian culture. “In a place like Hawaii with so many different people from so many different places, story can help us gel as a people,” Gere says. Talk Story Festival isn’t just story about community, it’s is a product of the community. Admittance to the festival is free, which is made possible by support from the city of Honolulu, funds from a nonprofit, room donations from Aqua Hospitality, pumpkins from Aloun Farm, and the willingness of the “tellers and production teams [to] support the event by performing/working for a pittance,” Gere says. honoluluparks.com R

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ALASKA THIS MONTH By Tasha Anderson

ENTERTAINMENT

Photo courtesy of SARDFA

Alaska Shellfish Festival

Some fresh-from-the-ocean shellfish, including geoducks (pronounced “gooey” ducks) in the background.

he evening of October 28 is a fantastic opportunity to gain deeper insight into the amazing and varied shellfish industry in Alaska’s Southeast waters. Sponsored by the Southeast Alaska Regional Dive Fisheries Association (SARDFA), the goal of the festival is to raise awareness of the shellfish dive and mariculture industries in the best way possible: having dinner. This is the fourth year that the festival has taken place according to SARDFA Executive Director Phil Doherty. “The event has been really well received,” Doherty says. “Usually, after tickets go on sale, we’re sold out in a few days.” The festival consists mainly of a dinner located at the Ted Ferry Civic Center in Ketchikan. “We get a bunch of geoduck clams, sea cucumbers, locally grown oysters, and locally harvested shrimp and Dungeness crab,” Doherty says. “We also work with the Alaska Scallop Association that catches scallops, so there are fresh scallops there.” Three or four local restaurants receive the shellfish the day before the festival and cook it the way they like. “Some of the [shellfish] they’re not really used to,” Doherty says, “like the sea cucumbers and geoduck clams. But they’ve always come up with really good recipes.” In addition to the oysters prepared by the restaurants, there’s also a table set up so that guests can shuck raw oysters. Three local beer and wine distributors also participate, bringing wines and beers specially selected to compliment the shellfish dishes. Proceeds from the event are donated, Doherty says. During the event, students from oceanography and marine and culinary classes at the Ketchikan high school volunteer, and any after-cost profits are then given to those classes: approximately $1,500 to $2,000 each year. Tickets for the Alaska Shellfish Festival are $30 and available at SARDFA or the Ketchikan Visitors’ Bureau. sardfa.org R

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ALASKA AVIATION MUSEUM

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EVENTS CALENDAR ANCHORAGE

3-5 Make It Alaskan Festival Each year thousands of attendees, wholesale buyers, and vendors share an inside look at what’s made locally in Alaska. Sullivan Arena: Friday Noon to 8 p.m.; Saturday 10 a.m. to 7 p.m.; Sunday 11 a.m. to 6 p.m. makeitalaskanfestival.com 3-5 Oxygen & Octane Event highlights of “Alaska’s Winter Adventure Show” include the Sportsman’s Warehouse Adventure Film Fest, Iron Dog meet-n-greet, snowmachine raffle, a climbing wall, beer garden, booth-side seminars on safety, and winter recreation vendors. Dena’ina Center: Friday 4 p.m. to 8 p.m.; Saturday 10 a.m. to 6 p.m.; Sunday 10 a.m. to 5 p.m. oxygenandoctane.com 4 Pawsitive Reading Taking place the first Saturday of each month, children in the kindergarten through fourth grades are given the opportunity to ready for twenty minutes at a time to service dogs, allowing children to practice reading to a judgment-free audience. Z.J. Loussac Library, 2:30 p.m. to 4:30 p.m. muni.org/departments/ library/events/Pages/default.aspx 10/9-11/2 Hedda Gabler This drama written by Henrik Isben and adapted by Jon Robin Baitz explores the tragedy of people who find themselves trapped in a dead end of their own design and stars Annia Wyndham, an Alaskan actress. Cyrano’s: Thursdays, Fridays, and Saturdays 7 p.m.; Sundays 3 p.m. cyranos.org 10/10-11/2 Bell, Book, and Candle Gillian, a modern day witch, casts a spell on an unattached publisher, who falls head over heels for her; witches, however, cannot fall in love, leading to a number of difficulties. Anchorage Community Theatre. Reserve tickets by phone at 907-868-4913. actalaska.org 17 Oktoberfest Join Marge Ford and the Alaska Polka Chips along with good food and beer at this fundraiser for the Alaska Aviation Museum, which restores vintage aircraft and shares bush pilot stories of the past. Alaska Aviation Museum, 6:30 p.m. to 10:30 p.m. alaskaairmuseum.org 31 Zoo Boo Celebrate Halloween in your favorite costume at the Alaska Zoo. There are spooky trail decoration, event staff in costumes, and trick-or-treat stations throughout the zoo grounds. The Alaska Zoo, 5 p.m. to 8 p.m. alaskazoo.org 31 Alyeska Halloween Train and Zombie Disco The party begins aboard the Alaska Railroad, travels between Anchorage and Girdwood, arrives at a buffet dinner at the Hotel Alyeska, and continues on to the zombie disco at the day lodge. Costumes are encouraged. Anchorage Depot, mid-afternoon. alaskarailroad.com

FAIRBANKS

11-12 Go Winter! Expo This event focuses on winter: how to get through it safely and sanely while having some fun. This year will include the Interior Alaska Gun show, as well as indoor and outdoor activities, food, and information about winterization, home care, and travel ideas. Carlson Center, Saturday 10 a.m. to 6 p.m. and Sunday 11 a.m. to 5 p.m. fairbanksevents.com 25 Creepy Critters Program This program offers children an opportunity to learn about 194

Alaska Business Monthly | October 2014 www.akbizmag.com

Compiled by Tasha Anderson feared and often misunderstood creatures through educational activities, expert consultation, games, and crafts. Creamer’s Field Farmhouse Visitor Center, Noon to 4 p.m.

GIRDWOOD

4-6 & 11-13 Oktoberfest at Alyeska Resort Oktoberfest is two full weekends of live music, souvenir steins, and good times, including local oompah and other live bands and samples of authentic Bavarian delicacies. Alyeska Resort: Fridays, 1 p.m. to Midnight; Saturdays Noon to Midnight; Sundays Noon to 6 p.m. alyeskaresort.com

JUNEAU

4-5 Nugget Mall Art Fair This is a collection of artisans and craftsmen from throughout Southeast Alaska, including painters, sculptors, photographers, and other types of craftsmen. Nugget Mall. nuggetmalljuneau. com

PALMER

31 Halloween Hallow Children under the age of fourteen and their accompanying adults are encouraged to wear costumes to this Halloween event that has a carnival-like atmosphere. Funds raised benefit the Mat-Su Special Santa, a gift giving program for families in need. Raven Hall, 3 p.m. to 8 p.m. alaskavisit.com

PETERSBURG

1-31 Octoberfest Celebration Petersburg celebrates Octoberfest throughout the month with music concerts, gallery walks, the Humpy 500 Go-cart Race, Devil’s Thumb Chilifeed and Brewfest, Octoberfest Artshare, and the Rain Country Quilters Quit Show, among other events. Various locations and times. petersburg.org

SITKA

11-18 Alaska Day Festival This festival celebrates the purchase of Alaska on October 18, 1867. Events include races, a variety show, live music, vendors, and food; the annual ball is on October 17 and the parade and transfer reenactment are on October 18. Various locations and times. alaskadayfestival.org 25 Raven Radio’s Stardust Ball This is local public radio station Raven Radio’s annual fundraiser and has live music, the Lip Sync Extravaganza, and a costume contest. kcaw.org

SKAGWAY

17-19 Fall Festival This weekend celebration of fall includes food, crafts, and local community, with the chance for guests to make their own pickles, create leather masks, learn to knit, and other activities. Various locations and times. skagway.com

WASILLA

10/17-11/9 The Canterville Ghost This comedy is appropriate for all audiences: A free-spirited American family moves into a grand English manor house and is charmed to discover that it is haunted. The ghost however is alarmed. Accustomed to being regarded with fear, he determines to scare these intruders out of their wits and out of his house, but he is nearly undone himself. Valley Performing Arts: Fridays and Saturdays 7 p.m.; Sundays 2 p.m. valleyperformingarts.org www.akbizmag.com

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COMMUNITY

Photos by Russ Slaten

Anchorage Park Fix-It Brings Neighbors Together

ntil late this summer, one neighborhood park in Anchorage offered open, natural spaces but few amenities. The Anchorage Park Foundation requested funds from the Rasmuson Foundation and the Alaska State Legislature for $200,000 in upgrades, including play equipment for neighborhood children. The new playground at Stephenson Park has a nature theme, with a treehouse feel to the play equipment nestled in a park full of trees. Play equipment also includes an ADA-standard “Oodle” swing that fits several swingers at once and a log balance beam. The rest of the park also got a makeover, including a new ADA accessible path, new picnic area and tables, fresh 196

paint, and thinned brush for increased visibility and safety. A grant from the Arbor Day Foundation paid for ten chokecherry trees that volunteers planted. Neighborhood families gathered to celebrate and volunteer their time to help expand improvements on a Saturday morning in late summer during a Neighborhood Park Fix-It hosted by the Anchorage Park Foundation and the Muni’s Parks and Recreation Department. Tools were provided for volunteers to help plant trees, build flower beds, plant flowers, paint bollards, and do

some light brush clearing in forested areas of the park for increased visibility and safety. Smokehouse BBQ provided lunch for the volunteers. The Anchorage Park Foundation mobilizes public support and financial resources for Anchorage parks, trails, and recreation opportunities. Go to anchorageparkfoundation.org to donate or volunteer. R Source: Anchorage Park Foundation

Alaska Business Monthly | October 2014 www.akbizmag.com

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ALASKA TRENDS

SIZE Matters in Alaska

By Amy Miller

Firm size, industry big factors in private-sector employment

laska’s distribution of large and small businesses, classified as “firms” by the Alaska Department of Labor and Workforce Development, is roughly the same as that of its West Coast neighbors and the nation as a whole. But what distinguishes the state is the composition of those employers and the role industry type plays in wages and benefits provided to employees. While the majority of Alaska businesses are “small,” employing fewer than one hundred people, larger businesses employ nearly half of the Alaskans who work in the private sector. Of the seventeen thousand private-sector firms in Alaska in 2011, 60 percent employed four or fewer people. A staggering 98 percent employed fewer than one hundred people. But that remaining 2 percent packs a big punch when it comes to the influence of private-sector business on Alaska’s economy and the wages paid to Alaskans. The Department of Labor and Workforce Development categorizes “large” employers as those with more than one hundred employees, of which there were 353 in Alaska in 2011. These employers include mining companies, manufacturing

(including seafood processing), and oil and gas, among other industries. The oil and gas industry accounts for 91 percent of the jobs in large firms, and the influence of the oil and gas industry on Alaska wages is substantial. Oil and gas companies pay higher wages than other business types on average. In all private-sector firms with five hundred-plus employees, the average wage is $57,453, but removing oil and gas firms from that pool brings the average annual wage down to $46,198. The influence of large employers on wages extends beyond the oil and gas industry, though. Firms with one hundred or more employees employed 49 percent of the work force in 2011 but paid 55 percent of the wages. The distribution of large and small employers in Alaska has been relatively stable over time. Between 1995 and 2011, the number of firms increased by 2,400, but their size distribution was almost identical. 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 Business Monthly | October 2014 www.akbizmag.com

ALASKA TRENDS

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By Amy Miller

October 2014 | Alaska Business Monthly

199

ALASKA TRENDS

Indicator

By Amy Miller

Units

Period

Latest Report Period

Previous Report Period (revised)

Year Ago Period

Year Over Year Change

GENERAL Personal Income—Alaska US $ 1stQ14 37,534 37,179 34,420 9.05% Personal Income—United States US $ 1stQ14 14,360,913 14,251,060 13,589,477 5.68% Consumer Prices—Anchorage 1982-1984 = 100 1st H14 214.78 213.91 210.85 1.86% Consumer Prices—United States 1982-1984 = 100 1st H14 236.38 233.55 232.37 1.73% Bankruptcies Alaska Total Number Filed June 29 45 34 -17.24% Anchorage Total Number Filed June 24 37 16 33.33% Fairbanks Total Number Filed June 3 5 5 -66.67% EMPLOYMENT Alaska Thousands June 348.63 344.55 332.80 4.76% Anchorage & Mat-Su Thousands June 188.91 189.96 186.60 1.24% Fairbanks Thousands June 42.98 44.33 41.00 4.83% Southeast Thousands June 39.26 38.22 41.05 -4.36% Gulf Coast Thousands June 40.65 38.47 35.70 13.87% Sectorial Distribution—Alaska Total Nonfarm Thousands June 353.5 338.7 352.4 0.31% Goods Producing Thousands June 56.1 47.6 53.4 5.06% Services Providing Thousands June 297.4 291.1 299.0 -0.54% Mining and Logging Thousands June 19.0 18.3 18.3 3.83% Mining Thousands June 18.4 17.7 17.7 3.95% Oil & Gas Thousands June 14.8 14.5 14.5 2.07% Construction Thousands June 18.0 16.4 19.9 -9.55% Manufacturing Thousands June 19.1 12.9 15.2 25.66% Seafood Processing Thousands June 14.6 8.6 11.0 32.73% Trade/Transportation/Utilities Thousands June 70.1 68.1 68.8 1.89% Wholesale Trade Thousands June 6.7 6.6 6.1 9.84% Retail Trade Thousands June 39.2 37.9 38.0 3.16% Food & Beverage Stores Thousands June 7.0 6.7 6.3 11.11% General Merchandise Stores Thousands June 10.6 10.2 10.3 2.91% Trans/Warehouse/Utilities Thousands June 24.2 23.6 24.7 -2.02% Air Transportation Thousands June 6.8 6.5 6.4 6.25% Information Thousands June 6.3 6.2 6.2 1.61% Telecommunications Thousands June 4.1 4.1 4.1 0.00% Financial Activities Thousands June 12.2 11.7 13.9 -12.23% Professional & Business Services Thousands June 30.9 30.0 29.3 5.46% Educational & Health Services Thousands June 46.3 47.1 47.6 -2.73% Health Care Thousands June 33.9 33.6 34.1 -0.59% Leisure & Hospitality Thousands June 37.8 33.3 38.7 -2.33% Accommodation Thousands June 9.1 7.1 10.6 -14.15% Food Services & Drinking Places Thousands June 23.1 21.3 22.5 2.67% Other Services Thousands June 11.5 11.6 11.8 -2.54% Government Thousands June 82.3 83.2 82.7 -0.48% Federal Government Thousands June 15.5 15.2 15.4 0.65% State Government Thousands June 25.3 26.1 25.2 0.40% State Education Thousands June 6.2 7.6 6.4 -3.13% Local Government Thousands June 41.5 41.9 42.1 -1.43% Local Education Thousands June 22.3 22.5 22.3 0.00% Tribal Government Thousands June 4.2 3.9 3.6 16.67% Labor Force Alaska Thousands June 374.08 367.37 371.95 0.57% Anchorage & Mat-Su Thousands June 201.03 200.38 199.99 0.52% Fairbanks Thousands June 45.81 46.81 46.68 -1.86% Southeast Thousands June 41.83 40.48 41.70 0.32% Gulf Coast Thousands June 43.60 41.07 42.18 3.36% Unemployment Rate Alaska Percent June 6.8 6.1 6.6 3.03% Anchorage & Mat-Su Percent June 6.0 5.2 5.8 3.45% Fairbanks Percent June 6.2 5.3 5.9 5.08% 200

Alaska Business Monthly | October 2014 www.akbizmag.com

ALASKA TRENDS

Indicator

By Amy Miller

Units

Period

Latest Report Period

Previous Report Period (revised)

Year Ago Period

Year Over Year Change

Southeast Percent June 6.1 5.6 5.8 5.17% Gulf Coast Percent June 6.8 6.3 6.9 -1.45% United States Percent June 6.1 6.3 7.6 -19.74% PETROLEUM/MINING Crude Oil Production—Alaska Millions of Barrels June 14.53 16.24 14.57 -0.27% Natural Gas Field Production—Alaska Billions of Cubic Ft. June 7.91 8.21 5.87 34.75% ANS West Coast Average Spot Price $ per Barrel June 110.76 108.06 104.01 6.49% Hughes Rig Count Alaska Active Rigs June 10 10 7 42.86% United States Active Rigs June 1861 1859 1761 5.68% Gold Prices $ Per Troy Oz. June 1278.48 1288.22 1342.7 -4.78% Silver Prices $ Per Troy Oz. June 19.78 19.36 21.11 -6.30% Zinc Prices Per Pound June 2.12 2.06 0.920 130.56% REAL ESTATE Anchorage Building Permit Valuations Total Millions of $ June 67.0 58.1 37.9 76.78% Residential Millions of $ June 27.9 30.3 11.6 140.52% Commercial Millions of $ June 30.4 25.8 23.9 27.20% Deeds of Trust Recorded Anchorage—Recording District Total Deeds June 768 724 1197* GeoNorth -35.84% Fairbanks—Recording District Total Deeds June 223 233 389 -42.67% VISITOR INDUSTRY Total Air Passenger Traffic—Anchorage Thousands June 554.10 438.84 574.69 -3.58% Total Air Passenger Traffic—Fairbanks Thousands June 116.61 87.43 95.38 22.26% ALASKA PERMANENT FUND Equity Millions of $ June 51213.70 51692.70 44,853.40 14.18% Assets Millions of $ June 53220.50 52384.30 46,435.40 14.61% Net Income Millions of $ June 222.00 417.60 134.70 64.81% Net Income—Year to Date Millions of $ June 721.20 828.70 -832.00 186.68% Marketable Debt Securities Millions of $ June -6.10 105.40 -212.20 97.13% Real Estate Investments Millions of $ June 76.50 79.10 191.90 60.14% Preferred and Common Stock Millions of $ June 413.00 328.70 -690.20 159.84% BANKING (excludes interstate branches) Total Bank Assets—Alaska Millions of $ 1stQ14 5,477.64 5,394.16 5,121.48 6.95% Cash & Balances Due Millions of $ 1stQ14 347.62 141.17 274.72 26.54% Securities Millions of $ 1stQ14 139.05 1,753.74 135.91 2.31% Net Loans and Leases Millions of $ 1stQ14 2,517.48 2,543.77 2,404.90 4.68% Other Real Estate Owned Millions of $ 1stQ14 18.63 17.58 22.19 -16.04% Total Liabilities Millions of $ 1stQ14 4,731.67 4,656.83 4,380.81 8.01% Total Bank Deposits—Alaska Millions of $ 1stQ14 4,070.91 4,046.21 3,857.32 5.54% Noninterest-bearing deposits Millions of $ 1stQ14 1,612.83 1,623.39 1,497.80 7.68% Interest- bearing deposits Millions of $ 1stQ14 2,458.08 2,422.82 2,359.52 4.18% FOREIGN TRADE Value of the Dollar In Japanese Yen Yen June 102.05 101.85 97.35 4.83% In Canadian Dollars Canadian $ June 1.08 1.09 1.03 4.72% In British Pounds Pounds June 0.59 0.59 0.65 -8.64% In European Monetary Unit Euro June 0.74 0.73 0.76 -2.40% In Chinese Yuan Yuan June 6.16 6.17 6.17 -0.20% Notes: 1. Source of Anchorage Deeds of trust (GeoNorth) is cited in the data field. 2. Banking data has been updated to include Alaska State Banks and Alaska’s sole federally chartered, Alaska-based bank, First National Bank Alaska

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ADVERTISERS INDEX AE Solutions.............................................................162 Ahtna Inc.....................................................................63 Alaska Air Cargo...................................................... 29 Alaska Airlines........................................................... 51 Alaska Aviation Heritage Museum....................194 Alaska Communication Systems (ACS)............165 Alaska Crane LTD..................................................... 13 Alaska Executive Search (AES)........................... 99 Alaska Industrial Hardware (AIH) ...................120 Alaska Miners Assoc.............................................139 Alaska Park.................................................................93 Alaska Photobooth.................................................197 Alaska Process Industry Careers Consortium...158 Alaska Railroad........................................................139 Alaska Rubber .........................................................152 Alaska USA Federal Credit Union........................73 Alaska USA Insurance Brokers............................. 71 Alaskan Brewing Co..............................................190 Aleut Corp...............................................................105 Alyeska Resort...........................................................97 American Fast Freight.......................................... 149 American Marine/PENCO.................................. 198 Anchorage Chrysler Dodge ................................. 96 Anchorage Messenger Service...........................134 Anchorage Opera...................................................193 APC Services LLC...................................................127 Arctic Branding & Apparel..................................101 Arctic Controls....................................................... 168 Arctic Office Products (Machines)......................56 Arctos........................................................................ 164 ASRC Energy Services..........................................167 Associated Builders & Contractors AK Chapter........................................................197 Associated General Contractors..........................23 Avis.................................................................... 191, 193 BDO.............................................................................. 31 Beacon OHSS.......................................................... 135 Bering Air..................................................................195

202

Bering Straits Native Corp....................................111 Berry Co......................................................................37 Black Gold Oilfield Services ............................... 171 Blood Bank of Alaska...........................................203 BP Exploration (Alaska)........................................163 Brand Energy & Infrastructure.............................53 Bristol Bay Native Corp..........................................55 Builders Choice.......................................................169 Calista Corp.............................................................. 115 Carlile Transportation Systems..........................145 Chris Arend Photography.................................. 202 Chugach Alaska Corp..............................................75 CIRI...............................................................................21 Construction Machinery Industrial LLC..............2 Cornerstone Advisors............................................. 15 Cruz Construction Inc........................................... 119 Dan Tech Services.................................................140 Davis Constructors & Engineers Inc. ............... 113 Delta Leasing LLC.................................................... 46 Dimond Center Hotel............................................195 Donlin Gold................................................................91 Doyon Limited...........................................................59 eDocsAlaska Inc....................................................148 Everts Air Cargo........................................................25 F. Robert Bell & Assoc..........................................159 Fairweather LLC........................................................33 First National Bank Alaska....................................... 5 GCI .................................................................. 157, 204 Geneva Woods Health Care Services.............103 Global Diving & Salvage Inc................................162 Granite Construction............................................125 Great Originals Inc................................................107 Greer Tank............................................................... 124 Hawk Consultants LLC.........................................170 HDL Hattenburg Dilley & Linnell......................148 Historic Anchorage Hotel....................................194 Homer Marine Trades Assoc..............................197 Horizon Lines.............................................................95

IMPLUS Footware LLC.........................................140 Island Air Express...................................................192 Judy Patrick Photography....................................181 Junior Achievement................................................ 94 Kinross Ft. Knox........................................................58 Landâ&#x20AC;&#x2122;s End Resort...................................................154 Lifewater Engineering Co....................................127 Lynden Inc. ..........................................................11, 57 MagTec Alaska LLC................................................157 Matanuska Electric Company (MEA)..............103 Medical Park Family Care....................................134 Microcom....................................................................61 Millennium Alaskan Hotel...................................170 Modern Dwellers Chocolate Lounge................191 MTA Communications...........................................141 N C Machinery........................................................121 NALCO Champion................................................. 164 Nana Management Services Lodging.................35 NCB............................................................................154 New York Life..............................................................9 North Slope Telecom Inc......................................159 North Star Behavioral Health.............................132 Northern Air Cargo...................................... 182, 183 Northrim Bank...........................................................43 Northwest Strategies.............................................20 NTCL .........................................................................155 Olgoonik Development Corp.............................. 153 Ouzinkie Native Corp............................................197 Oxford Assaying & Refining Inc........................ 189 Pacific Alaska Freightways..................................118 Pacific Pile & Marine........................ 184, 185, 186 Paramount Supply..................................................197 Parker, Smith & Feek...............................................19 Peak Oilfield Service Co. .....................................155 Pen Air........................................................................ 89 Personnel Plus.........................................................192 Port of Nome.............................................................12 Premera Blue Cross Blue Shield of Alaska...... 137

Quality Asphalt Paving (QAP)............................120 Ravn ALASKA............................................................27 Resource Development Council....................... 168 Ritchie Brothers Auctioneers (America) Inc.....85 Roger Hickel Contracting Inc................................77 RSA Engineering Inc..............................................114 Ryan Air.......................................................................81 Samson Tug.............................................................105 Scan Office...............................................................129 Sealaska Corp............................................................69 Seekins Ford Lincoln Fleet.....................................79 Seward Chamber and CVB..................................173 Span Alaska Consolidators.................................. 161 Spruce Park Auto Body..........................................39 Stellar Designs Inc..................................................197 Stephl Engineering LLC........................................ 128 T. Rowe Price.............................................................41 Trailercraft Inc. Freightliner of Alaska..............143 Tulalip Casino Resort..............................................48 Tundra Tours, Top of the World Hotel............104 Turnagain Marine Construction.........................114 UAA College of Business & Public Policy..........35 Udelhoven Oilfield Systems Service...................87 Ukpeagvik Inupiat Corp..........................................65 Unit Company.........................................................107 US HealthWorks dba Primary Care Associates............................... 133 Usibelli Coal Mine Inc...........................................114 Visit Anchorage.........................................................83 Vitus Energy.............................................................114 Washington Crane & Hoist....................................47 Watterson Construction Company.....................45 Wealth Strategies of Alaska..................................67 Wells Fargo ................................................................ 17 West-Mark Service Center................................. 168 WHPacific................................................................ 124 XTO Energy ................................................................. 3 Yukon Equipment................................................... 117

Alaska Business Monthly | October 2014 www.akbizmag.com

Blood Bank of Alaska supports rural communities across the state. They are a critical part of the Alaska healthcare system, impacting thousands of lives each year.

You can make the difference, Alaska is counting on you. Donate to the new building fund www.bloodbankofalaska.org Text BUILD to 27722 to donate today â&#x20AC;˘ â&#x20AC;˘

Ensure that the blood supply is available in times of disaster Keep patients closer to home during treatment

Marie N. Greene President/CEO - NANA Regional Corp.