JAN 2010

January 2010

$3.95

SPECIAL SECTION:

2010 ECONOMIC OUTLOOK HOPE OPTIMISM STABILITY Page 32

JANUARY 2010 TA B L E O F C O N T E N T S

D E PA R T M E N T S From the Editor . . . . . . . . . . . . . . 7 Inside Alaska Business . . . . . . . . 8 Events Calendar . . . . . . . . . . . . 50 Right Moves . . . . . . . . . . . . . . . . 52 Market Squares . . . . . . . . . . . . . 64 Alaska Trends . . . . . . . . . . . . . . . 95 Ad Index . . . . . . . . . . . . . . . . . . . 98

ABOUT THE COVER: Figuring out the Alaska economy can be like getting lost in a maze, we try to make it easier for you to find your way with comments from leaders of the state’s key economic sectors in our Economics Special Section: Alaska 2010 Outlook starting on page 32.

Illustration by Gregory Spencer.

R E G U L A R F E AT U R E S

ARTICLES

(cont’d.)

VIEW FROM THE TOP MINING Renee Schofield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Alaska Mining Industry Optimistic . . . . . . . . . . . . . . . 60 Tongass Substance Screening. By Peg Stomierowski.

Support services essential to long-term growth.

By Heather A. Resz.

ALASKA THIS MONTH Alaska Folk Festival . . . . . . . . . . . . . . . . . . . . . . . . . . 48 CONSTRUCTION Thousands gather to share music and stories.

ARRA Stimulus Funds . . . . . . . . . . . . . . . . . . . . . . . . . 70

By Nancy Pounds.

Alaska’s $1.2 billion share. By Tracy Kalytiak.

LEGAL SPEAK FILM Flu Now, Pay Later? . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 Alaska TV in the Making . . . . . . . . . . . . . . . . . . . . . . . 72 A workplace guide to H1N1 swine flu. By Jeff Waller.

Trio turns dreams into reality and has huge plans for Alaska television. By Debbie Cutler.

HR MATTERS Reduce Employee Theft . . . . . . . . . . . . . . . . . . . . . . . 68 EDUCATION Be proactive. Not reactive. By Andy Brown.

University of Alaska Enrollment Up . . . . . . . . . . . . . . 74 Economy, recruitment efforts responsible. By Heidi Bohi.

REGIONAL REVIEW Aleutian Islands: Land of Promise . . . . . . . . . . . . . . . 86 Nearly year-round fishing boosts economy. By Tracy Barbour. EDUCATION SIDEBAR O.T. Doctorate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 The UAA-Creighton connection. By Heidi Bohi.

ARTICLES TECHNOLOGY REAL ESTATE CREW Alaska . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 To Tweet, or Not to Tweet? . . . . . . . . . . . . . . . . . . . . . 80 That is the question. By Heidi Bohi.

Women seek parity in earnings and advancement.

By Heidi Bohi.

TRANSPORTATION OPINION Truck On … Safely . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 Health Care Crisis . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Companies prepare road warriors for every situation.

Do Something, But Think First. By Debbie Cutler.

By Debbie Cutler.

GUEST AUTHOR Enforcement for ‘Made in Alaska’ Logo Grows . . . . . 31 GENERAL Federal trademark registration has convincing consequences. Empty Nest Syndrome . . . . . . . . . . . . . . . . . . . . . . . . 89 Not always a bad thing. By Heidi Bohi.

By Michael Hanzuk.

OIL & GAS How Petroleum Has Transformed the Alaska Economy . . . . . . . . . . . . . . . . . . . . . . . . . . 54 Many underestimate extent of oil’s contribution.

By Scott Goldsmith.

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FISHERIES Protecting Alaska Fisheries, or Not . . . . . . . . . . . . . . 92 Understanding the regulatory decision-making process.

By Gale K. Vick.

www.akbizmag.com • Alaska Business Monthly • January 2010

(continued on page 6)

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JANUARY 2010 TA B L E O F C O N T E N T S

JUNIOR ACHIEVEMENT 2010 SPECIAL SECTION

ECONOMICS SPECIAL SECTION

Junior Achievement Educates and Inspires Students to Succeed in a Global Economy . . . . . . 10 Alaska Business Hall of Fame Jan. 28.

By David Wilson Sr. and Flora Teo.

Alaska 2010 Outlook . . . . . . . . . . . . . . . . . . . . . . 32 New decade brings challenges, opportunities.

Compiled by Susan Harrington.

Junior Achievement Donors . . . . . . . . . . . . . . . . . . 11 Ruth and Coy Bailey . . . . . . . . . . . . . . . . . . . . . . . . 12 Junior Achievement Alaska Business Monthly Hall of Fame Laureates. By Peg Stomierowski.

Vern McCorkle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Junior Achievement Alaska Business Monthly Hall of Fame Laureate. By Peg Stomierowski.

Matthew Nicholai . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Junior Achievement Alaska Business Monthly Hall of Fame Laureate. By Peg Stomierowski.

Ted Stevens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Junior Achievement Alaska Business Monthly Hall of Fame Laureate. By Peg Stomierowski.

Alaska . . . . . . . . . . . . . . . . . . . . . . . . . . .By Sean Parnell.

Construction . . . . . . . . . . . . . . . . . . . . . .By John MacKinnon.

Construction (Military) . . . . . . . . . . . . . .By Reinhard Koenig.

Environmental . . . . . . . . . . . . . . . . . . . . .By Kim Kovol.

Financial Services . . . . . . . . . . . . . . . . . .By Bill Eckhardt.

Fisheries . . . . . . . . . . . . . . . . . . . . . . . . .By Mark Vinsel.

Health Care . . . . . . . . . . . . . . . . . . . . . . .By Bruce Lamoureux.

Jobs . . . . . . . . . . . . . . . . . . . . . . . . . . . . .By Click Bishop.

Minerals. . . . . . . . . . . . . . . . . . . . . . . . . .By Steve Borell.

Native Corporations. . . . . . . . . . . . . . . . .By Ed Herndon.

Oil & Gas . . . . . . . . . . . . . . . . . . . . . . . . .By Jim Bowles.

Real Estate (Commercial) . . . . . . . . . . . .By Brandon Walker.

Real Estate (Residential). . . . . . . . . . . . .By Russell Joyce.

Telecommunications & Technology . . . .By Ronald Duncan.

Timber . . . . . . . . . . . . . . . . . . . . . . . . . . .By Owen Graham.

Trade . . . . . . . . . . . . . . . . . . . . . . . . . . . .By Greg Wolf.

Transportation (Aviation) . . . . . . . . . . . .By Christine Klein.

Transportation (Marine) . . . . . . . . . . . . .By Jim Beedle.

Transportation (Surface) . . . . . . . . . . . . .By Frank Richards.

Travel & Tourism . . . . . . . . . . . . . . . . . . .By Ron Peck.

Over the last 30 years, we’ve built up quite a hat collection…

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www.akbizmag.com • Alaska Business Monthly • January 2010

FR

OM

THE

E

DITOR

A Fresh Start Volume 26, Number 1 Published by Alaska Business Publishing Co. Anchorage, Alaska

Vern C. McCorkle, Publisher 1991~2009

EDITORIAL STAFF Managing Editor Associate Editor Art Director Art Production P h o t o ConsultantPhoto Consultant P h o t o Consultant

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ALASKA BUSINESS MONTHLY (ISSN 8756-4092) is published monthly by Alaska Business Publishing Co., Inc., P.O. Box 241288, Anchorage, Alaska 99524; Telephone: (907) 276-4373; Fax: (907) 279-2900, ©2010, Alaska Business Publishing Co. All rights reserved. Subscription Rates: $39.95 a year. Single issues $3.95 each; $4.95 for October.

Back issues $5 each. Send subscription orders and address changes to the Circulation Department, Alaska Business Monthly, P.O. Box 241288, Anchorage, AK 99524. Please supply both old and new addresses and allow six weeks for change. Manuscripts: Send query letter or manuscripts 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 Monthly is prohibited. Address requests for specific permission to the Editor, Alaska Business Monthly. Online: Alaska Business Monthly is available online from Data Courier and online from Thomson Gale.

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National economist says we are in recovery.

T

he same day that the New York Times came out with an article stating the U.S. was coming out of the longest economic “contraction” since World War II, and the Bureau of Economic Analysis released a press release stating that real gross domestic product increased by an annual rate of 3.5 percent in the third quarter of 2009, Bruce McCain, chief investment strategist for Key Private Bank, sat in ABM’s conference room and spoke about what he had been saying for months: We are in recovery.

“When most economists were predicting that the recession would linger into 2010 or 2011, Bruce was right on the money saying it would be the second half of this year (2009),” said Brian Nerland, Key Alaska district president, who was also in attendance at the meeting.

But recovery will be slow, lasting up to 10 years as job availability increases, the housing market stabilizes and consumer spending gets a jump-start. The economic recovery is happening, but it is likely to be slow and cautious.

“Bruce believes if we get a ‘spark’ we could see a surge as consumers begin spending to satisfy pent-up demand and businesses scurry to rebuild depleted inventories and restore productive capacity that was cut to reduce expenses during the recession,” noted Nerland.

McCain sees three stages to economic recovery as noted in his Economic & Market Update plan, released in September of last year. He begins by saying it’s important the U.S. first must stabilize, then reaccelerate. The first stage is where the decline ends and the economy begins to stabilize; however, pessimism remains high. The second stage is a “snap back demand” that creates a growth surge, and “catch up” spending is unleashed while pessimism wanes. The third stage is where growth subsides to the sustainable level and optimism takes hold.

“Even a slowly flowing stream releases a surge of water once a dam is removed,” McCain noted in his Web-based PowerPoint presentation.

This is good news for the U.S. and good news for Alaska, at a time when fears the recession will hit the state are minimized by a somewhat healthy economy.

McCain noted Alaska was not hit as hard as the rest of the U.S., mainly because of our resource-driven industry, including fishing and oil. Energy will be a big part of our future, he said.

While noting some decline in job growth in Alaska, the first in more than 20 years, he sees a bright future for Alaska, and a bright future for the U.S. once people realize the economy is improving, business confidence improves and consumer confidence grows.

He notes, on his presentation, that “businesses seem prepared to rebuild capacity, but will be reluctant to get too far ahead of improving results.” Lingering concerns, according to McCain, are fourfold: “sales need to improve, competition in many industries remains fierce; concerns about energy and other commodity costs remain; and there is uncertainty about how health care-policy and energypolicy changes might affect costs.”

He stated there is already great economic improvement in other emerging countries, such as China.

Some credits to U.S. economic recovery include the Cash-For-Clunkers program, the $8,000 federal tax credit for first-time homebuyers, and the $787 billion stimulus package.

According to McCain, there is nothing stopping recovery to occur and hope is on the horizon.

– Debbie Cutler Managing Editor

www.akbizmag.com • Alaska Business Monthly • January 2010

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INSIDE ALASKA BUSINESS

COMPILED BY NANCY POUNDS

MARINE TERMINAL

TECHNOLOGY

Crowley Scores Safety Record

GeoNorth Designs Aces, Firetap Web Sites

G

C

rowley Maritime Corp.’s Bethel petroleum terminal employees recently marked a safety record by completing 570 days without lost-time injury.

The record tops the group’s previous high mark.

Crowley’s Bethel employees have been working for nearly two years as the first marine terminal to participate in the U.S. Department of Labor’s Occupational Safety and Health Administration’s Strategic Partnership. Crowley’s petroleum distribution group in Alaska joined the partnership agreement with OSHA and the United Steel Workers Local 4959 in March 2008. Since the agreement was formed with Crowley’s Bethel and Nome terminal operations, Crowley has upgraded their safety and health systems; improved hazard recognition by all workers, supervisors and managers; and reduced injuries and illnesses.

Because of the partnership, Crowley’s terminals in Bethel and Nome will not be subjected to an OSHA enforcement inspection until March. The OSHA partnership is anticipated to roll over to Crowley’s Kotzebue and Nenana operations this spring and continue through 2012.

H E A LTH & M E D I C I N E

Wellness Warriors Receive National Award

S

outhcentral Foundation’s Family Wellness Warriors Initiative was one of 12 recipients of the National Indian Health Board Regional/Area Impact Award.

The honor was announced at the national group’s conference in Washington, D.C. The Family Wellness Warriors Initiative was started in 1999 as an abuseprevention program, which aimed to encourage men to “reclaim their role as protectors of family values, and women to step forward as instillers of these values.”

“As we celebrate our 10th year, it is an honor to have the work of hundreds of volunteers appreciated in this manner,” said Bobbi Donadio, Family Wellness Warriors Initiative administrator. “Ending domestic violence, child sexual abuse and child neglect in our generation requires the entire community partnering together.”

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eoNorth LLC completed development of a new Web site for the popular Anchorage eatery Firetap Restaurant & Alehouse. The Web site offers menu previews, information on new brews and listings for upcoming live entertainment. The Firetap Restaurant & Alehouse, located at 10950 O’Malley Centre Drive, opened in June 2009. The restaurant features a special wood-stone fire deck oven. GeoNorth handles geographic information systems and database management as well as Web design. GeoNorth also redesigned the Alaska Aces Web site. The new site provides improved access to merchandise sales, ticket information, schedules, statistics and links to other league team sites.

FINANCIAL SERVICES

Alaska Growth Capital Expands

A

laska Growth Capital BIDCO was selected to receive $50 million in tax credits under the New Market Tax Credit Program to provide funding for communities in Alaska and Hawaii.

Alaska Growth Capital is a subsidiary of Arctic Slope Regional Corp. AGC, in partnership with Council for Native Hawaiian Advancement, was awarded the funds to also develop Native Hawaiian trust lands, and to expand its services to finance real estate projects with high community impacts. AGC will provide funding for similar projects in Montana.

New Market Tax Program is a program administered by the U.S. Department of Treasury, and allocated through the Treasury Department’s Community Development Financial Institutions Fund. AGC is one of 99 organizations selected to receive a total of $5 billion under the American Recovery and Reinvestment act of 2009.

www.akbizmag.com • Alaska Business Monthly • January 2010

INSIDE ALASKA BUSINESS ENGINEERING

Award Honors Chapel Design

USKH Lands National Ranking

Photo by Kevin G. Smith Photography for Bristol Industries LLC

ARCHITECTURE

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B

ristol Design Build Services LLC received the 2009 Honor Award for Excellence in Architecture for the Eielson Chapel Center in Fairbanks. The award was presented by the Alaska Chapter of the American Institute of Architects.

Bristol Design Build was contracted to design and build the chapel to serve all religious denominations of military personnel and their families at Eielson Air Force Base. The chapel consolidates religious services, administration, counseling, and religious education into one facility. Bristol worked on the project in association with KPB architects. The chapel design also was recognized in 2008 with a Pacific Air Forces Design Award in the Concept Design Category. Bristol Design Build Services is a subsidiary of the Bristol Bay Native Corp.

S U P P O RT S E R V I C E S

ATCO Opens Anchorage Office

A

TCO Structures & Logistics Ltd. opened a new branch office in Anchorage last fall. The Calgary, Alberta, Canada-based company believes the Alaska market will provide business growth opportunities. One recent ATCO project is a 78-person camp for a mining project south of Fairbanks, which was due to be finished in late 2009.

“Alaska has been an important market to ATCO for decades,” said Harry Wilmot, company president. “This expansion will allow us to work even closer with our aboriginal and jointventure partners as well as local clients.”

ATCO’s housing experience in Alaska dates back to the late 1970s when the company provided work

force housing along the trans-Alaska oil pipeline. Those early units were capable of withstanding extreme temperatures and winds of 120 mph.

“The design and quality of our product was originally proven in Alaska,” said Wilmot. “We built our reputation in tough northern climates and we believe in the Alaska market.”

The company now provides modular office rentals, construction, camp catering, logistics, support services and noise-reduction technologies. With its aboriginal partners, the company also operates and maintains radar and site communication equipment on 62 radar sites across the north, including 15 radar sites in Alaska under contract with the United States Air Force.

SKH Inc. was chosen by engineering industry service providers ZweigWhite and Stagnito Media as the sixth best firm to work for in the multidiscipline architecture and engineering firm category. USKH also was ranked third in the mid-sized multidiscipline architecture and engineering category. The national rankings rate firms on evidence for providing positive work environments, and offering challenging and interesting work opportunities for employees.

“This recognition is the result of all USKH employees’ efforts to make our company a great place to work,” says Tim Vig, president of USKH. “We take feedback seriously and are always looking for ways we can improve the company.”

AV I AT I O N

Era Parent Buys Arctic Circle Air

T

he Alaska company that owns Era Aviation Inc. and Frontier Flying Services has acquired Arctic Circle Air Service Inc. HoTH Inc. announced the acquisition in late fall, and Arctic Circle’s cargo operations were due to begin operating as Frontier Alaska on Dec. 1.

“This acquisition strengthens Frontier Alaska’s position in the cargo business in the state of Alaska,” said Bob Hajdukovich, company chief executive. “The addition of Arctic Circle Air to the Frontier Alaska family of carriers will improve our customer’s cargo experience statewide by providing increased capacity to the rural communities we serve.”

Arctic Circle’s two Shorts 330 (Sherpa) all-cargo aircraft will complement existing Frontier Alaska operations and improve the ability to move greater volume and oversized cargo statewide. ❑

www.akbizmag.com • Alaska Business Monthly • January 2010

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JUNIOR ACHIEVEMENT 2010 SPECIAL SECTION

Junior Achievement Educates and Inspires Students to Succeed in a Global Economy Alaska Business Hall of Fame Jan. 28 BY DAVID WILSON SR. VICE PRESIDENT & CHIEF FINANCIAL OFFICER, ACS CHAIRMAN, JUNIOR ACHIEVEMENT OF ALASKA INC. AND FLORA TEO PRESIDENT, JUNIOR ACHIEVEMENT OF ALASKA INC.

David Wilson Sr.

Alaska Business Hall of Fame Junior Achievement of Alaska’s 24th annual Alaska Business Hall of Fame unites the business community to honor outstanding individuals who have made significant contributions to the Alaska economy and whose efforts have been key drivers of economic growth in Alaska.

Junior Achievement of Alaska and Alaska Business Monthly would like to congratulate the class of 2010 laureates: the Bailey family, Vern McCorkle, Matthew Nicolai and former Sen. Ted Stevens.

This year’s event will take place Jan. 28 at the Dena’ina Civic and Convention Center. We invite all past laureates, Junior Achievement alumni and all who care about Alaska’s continued success to join in honoring the laureates.

The Need for Junior Achievement As evidenced by the economic upheaval on Wall Street and on Main streets across the country, it is imperative that we improve the level of financial literacy in America. If banking and lending institutions can crumble, so can our respective personal financial frameworks. The long-term guarantee that or economy will remain the strongest in the world depends on the education of our students. For the last two years, consumer spending has outpaced after-tax earnings, and we carry approximately $2.5 trillion in debt, excluding home mortgages. We can, and must, teach the next generation to save and invest wisely.

Many parents assume – incorrectly – that their children learn moneymanagement skills in schools. In fact, fewer than half of U.S. states require even basic economics courses, much less personal financial literacy education. This means that it is even more critical for schools to work with organizations such as Junior Achievement to provide relevant financial literacy education.

An investment now in teaching Alaska’s youth how to earn, save, manage credit, and budget will pay dividends in the long-term. Financially

10

Flora Teo

literate individuals are more likely to be self-supporting; to prepare for financial setbacks and emergencies; and to increase their standard of living through wise spending, saving, planning and investing, according to the U.S. Financial Literacy and Education Commission.

Providing Solutions in Alaska Junior Achievement’s sequential and integrated kindergarten through 12th grade programs give students the necessary skills to be successful. Junior Achievement has been conducting financial literacy classes in Alaska since 1973, and is presently offering classes statewide in 35 Alaska communities. This year, Junior Achievement is on track to meet its key strategic goal of reaching 10,000 students by 2010. Students will participate and learn through Junior Achievement’s programs focused on financial literacy, work force readiness skills and entrepreneurship.

Junior Achievement has a unique and practical delivery system: Junior Achievement recruits volunteers from the business community and trains them to deliver activity-based age-appropriate financial literacy classes free to students and schools. These volunteers who donate their time have helped turn classrooms into learning laboratories of the future by acting as role models who bring the real world of work into the classroom.

We Need You We need your commitment to reach children in our state. We need you to reinforce the importance of free enterprise in our successful democracy.

We need you to be a part of Junior Achievement’s purpose and mission.

Our children are the future. Let their success be your inspiration!

For more information on the Junior Achievement Alaska Business Hall of Fame or to join the growing number of parents, volunteers and business professionals across Alaska involved in Junior Achievement programs, contact Junior Achievement at (907) 344-0101 or visit our Web site at http://alaska.ja.org. ❑

www.akbizmag.com • Alaska Business Monthly • January 2010

JUNIOR ACHIEVEMENT 2010 SPECIAL SECTION

BUILDING UP ALASKA’S YOUTH FOR THE FUTURE

Junior Achievement Donors Platinum Plus Investors ($10,000 +) Alaska Business Monthly Alaska Communications Systems Allstate Foundation BP CIRI ConocoPhillips Alaska, Inc. ExxonMobil Production Company First National Bank Alaska Fred Meyer Northern Lights Bingo Wal-Mart Foundation Wells Fargo Platinum Investors ($5,000 +) Alaska National Insurance Company Alyeska Pipeline Service Company Atwood Foundation Tom Corkran Credit Association of North America Era Aviation, Inc. Flint Hills Resources Jim Jansen KeyBank Nabors Alaska Drilling, Inc. Walsh Sheppard

Gold Investors - ($2,500 +) 3M 3M Foundation, Inc. Alaska Commercial Fishing and Agriculture Bank Alaska USA Federal Credit Union Andrew Eker & Mary Hughes GCI Harbor Enterprises, Inc. Lynden David Marquez NANA Development Corporation NANA Management Services Northrim Udelhoven Oilfield System Services, Inc. Watterson Construction Company Silver Investors - ($1,000 +) Arctic Information Technology Avis Rent A Car Delta Western Fuel & Ship Supply Doyon Ltd. Eni Operating Fosler Law Group, Inc. Holland America Line Inc. Katmailand, Inc. Linford of Alaska Matanuska Valley Federal Credit Union

Petro Star Inc. Port of Anchorage The Alaska Club David Wilson Bronze Investors - ($500 +) Alaska Rubber & Rigging, Inc. Alaska Sales & Service Bob Allen Alps Federal Credit Union Arctic Wire Rope & Supply Bagoy’s Benefit Brokers Chevron John Delano Denali Alaskan Federal Credit Union First Bank of Ketchikan Great Northwest, Inc. Hughes Foundation Karen L. Kennedy LCMF LLC Mat-Su Regional Medical Center Bonnie L. Mehner Morris Communications Paul Sander Grace Schaible Totem Ocean Trailer Express, Inc. Usibelli Foundation George J. Vakalis

www.akbizmag.com • Alaska Business Monthly • January 2010

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JUNIOR ACHIEVEMENT 2010 SPECIAL SECTION Junior Achievement Alaska Business Monthly Hall of Fame Laureates:

Ruth & Coy Bailey

©2010 Chris Arend

Ruth and Coy Bailey in their furniture store in Anchorage.

BY PEG STOMIEROWSKI

R

uth and Coy Bailey aren’t afraid to strike out and try new things, like that indoor waterfall at the family’s furniture superstore in Anchorage. They envisioned a creative place where families could shop for new ideas and looks to enjoy in their homes.

An ability to consistently work hard, pursue leads, look at things differently and blend their skills harmoniously

12

helps explain why they’ve been a growing force in Alaska business with the successful expansion of Bailey’s Furniture operations over two decades.

Coy and Ruth met back at Elmendorf Air Force Base, where he was stationed after entering the military at 17. Ruth was a telephone directory clerk there, and they wed when they were 19.

DEEP ROOTS She was the daughter of Palmer dairy farmers who’d come to Alaska from Wisconsin in the mid-1930s with other enterprising colonists from the Lower 48 to settle and farm the Matanuska Valley. Her young soldier enjoyed going home from the base with her on weekends, and climbing the Butte near their home.

www.akbizmag.com • Alaska Business Monthly • January 2010

Their impulses proved solid: they’ve been married 51 years, have raised five kids and now boast of their 16 grandkids and eight great-grandkids. Most of their kids are involved in the business, including oldest and youngest sons Ron (president) and Michael (vice president) and daughter Vicki (general manager), who will graduate from DeVry University this spring.

As Ruth tells it, she and Coy were inclined by nature and upbringing to work hard and pay heed to what matters. “We were both frugal,” she said.

“We started out with practically nothing and learned to be good budgeters.”

A FOOT IN THE DOOR In their 40s, with three kids still living at home, they ventured outside Alaska to North Carolina, where they bought and managed a small convenience store that had gasoline pumps out front.

Even though they ran the business for only a couple of years – actually, she worried that it might in practice provide a little too much togetherness – she credits that experience of sharing a common business goal with preparing

them for loftier ventures later when, homesick, they returned to Alaska.

For most of their union, Coy continued to work for other people as well.

After they’d come back to Alaska, he coached youth sports, including boxing, Little League and football, and was active in athletics leadership, serving under Gov. William Egan as the State Commissioner of Athletics. He was founder of the Girls Club of Alaska and the Anchorage Boxing Association.

He also held a real estate license and worked in corrections until 1995.

While the benefits of working for the State were good, Ruth recalled, the shifts were long.

So she, with her husband helping as he could, decided in the early 1990s to venture into the furniture business with Ron. They frequented garage sales, and an auctioneer helped Ron learn the ropes.

After they’d successfully bid on a building full of office furniture, Ruth and Ron rented a warehouse and sold off the inventory, floor by floor, which provided a means for their business to grow. Finally, “it gave us a leg up,” she recalled.

THE BIRTH OF BAILEY’S In less than a year, they outgrew a small store on Tudor Road, named A-1 Discount Furniture, and moved into 20,000 square feet of space at the old Anchorage Roller Rink at Arctic and Benson, gradually moving away from used merchandise to new only.

In 1993, Michael and his wife, Krista, bought into the business. A new store opened between Palmer and Wasilla days after the birth of their first child.

The same year, Ruth and Coy’s grandson, Buddy Bailey, then 7 (and now a superstore manager), debuted in Bailey’s television commercials.

The business grew to have seven locations from the Kenai Peninsula to Fairbanks, including a “sleep gallery” in Wasilla and a Clearance Center in Anchorage on W. 54th Ave. Mike Keeney, who became their first employee in Anchorage in 1991, has long managed the Soldotna store.

For 10 years, they also had a store at Glenn Highway and Bragraw, but it closed after they built the new superstore at International Airport Road and C Street. They aimed to bring

www.akbizmag.com • Alaska Business Monthly • January 2010

13

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“We had to struggle at first for people to take us seriously.”

– Ruth Bailey Bailey’s Furniture

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most enterprises under one roof so they could better manage the business and their employees.

Good employees and a fine family balancing act keep their business successful, says Ruth, who continues to keep a hand in the finances and watch over Coy, who has suffered health challenges.

While Vicki manages operations, Ron, an avid reader, keeps up with sales trends and continues to do most of the buying and community work. Michael has proven talented at organizing maintenance and warehouse functions, and the two make a good team, Ruth said.

“We had to struggle at first for people to take us seriously,” she recalls, reflecting on some lessons learned over the years. Their core customers , she said, have come to appreciate the quality and value their products are known for.

Along with value and affordability, she stresses integrity in pricing and other business affairs, admonishing that “when you say you’ll do something, you’d better do it.”

Bailey’s Web site (www.baileys furniture.com) stresses “integrity pricing” and pledges to never inflate prices to facilitate the appearance of greater discounting. It also credits the store’s success to the home-grown touch, good customer service and quick delivery.

With relatively fast growth came other changes, including outsourcing the challenging delivery function. Another great relief, she observed, came with outsourcing the job of human resources management.

These days Bailey’s also has a fulltime advertising manager who manages all aspects of advertising on radio and ❑ TV channels.

www.akbizmag.com • Alaska Business Monthly • January 2010

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JUNIOR ACHIEVEMENT 2010 SPECIAL SECTION Junior Achievement Alaska Business Monthly Hall of Fame Laureate:

Vern McCorkle

BY PEG STOMIEROWSKI

A

laska Business Monthly Publisher Vern C. McCorkle was a friend to free enterprise in The Last Frontier. He had a big hand in organizing the Junior Achievement Hall of Fame recognition, which this month passes to him posthumously.

Each month he had shared stories of the state’s development in the publication’s colorful pages. The magazine he helped start celebrated its 25th anniversary as Alaska observed 50 years of statehood. Meanwhile, McCorkle kept on contributing what he could as he fought for his life against pancreatic cancer.

When death came calling last January, the empty chair at his desk left colleagues in the business to ponder again how much of the real content of a life lived large – the long days and hours spent in the public eye or in quiet reflection – can’t ever really tell the whole story of his loss.

“Vern always had a glint in his eye and a grin on his face,” reflected Steve Lindbeck of Alaska Public Telecommunications Inc. (APTI). In a lighthanded way, Lindbeck and others observed, McCorkle inspired colleagues toward excellence.

McCorkle was a guest commentator on “Anchorage Edition” and was a familiar face on screen during public television fundraising drives at KAKM. “You could not leave a business meeting with Vern without feeling a

16

©2010 Chris Arend

Vern C. McCorkle

deeper commitment to service and quality,” Lindbeck added.

“He exuded those qualities, and he brought out the best in the people around him. At APTI, he was a volunteer who gave us good counsel on our community advisory board. More than that, he was a friend who constantly reminded us why good service is always good business.”

Jim Martin, general manager of Alaska Business Monthly and McCorkle’s business partner for 18 years, agreed that McCorkle, despite a touch of sarcasm – his trade ran in his blood from the time he was a boy – was quick to see the good in things. Despite different management styles, the men got on well, Martin said: “He had a hand on the left rudder, and I had a hand on the right rudder.”

That commitment to revealing the stories of Alaska business people – from

big corporations to sole proprietors – at work navigating the shoals of survival and growth is part of his legacy.

The magazine prints 12,000 copies of each issue and boasts more than 100,000 readers. To this day, Era Aviation carries these issues in its seatbacks, exposing passengers excited about seeing Alaska to what’s happening in business here.

Too journalistic to be unaware of problems, still “he didn’t dwell on the negative side of business leaders or politicians,” Martin reflected. His vision at Alaska Business Publishing, added Managing Editor Debbie Cutler, was “not to downgrade industry, but to uplift and support, while being honest and objective.”

Neither was McCorkle much for kicking back and enjoying his free time.

He practically had to twist his partner’s arm, Martin said, to get him to venture outside the office to visit the state fair.

When asked what McCorkle did to relax, Martin said, “Nothing. Not a thing outside of it (the magazine).”

He came early to modest offices on Northern Lights Boulevard and stayed late, and every weekend, McCorkle could be found at his desk through most of Saturday. He maintained an opendoor policy and his staff knew him as a good listener, even when their frustrations went beyond their work.

“It was his family,” Martin said. “I think you could literally say that he lived for Alaska Business Monthly.”

He loved the Christmas season, they

www.akbizmag.com • Alaska Business Monthly • January 2010

said, and wasn’t a Scrooge. He cared about the elderly and was kind and generous to the homeless, occasionally hiring a stranger in need to work at his home or office. He was a volunteer for the state Long Term Care Ombudsman and served on the Food Bank board.

Co-managers recalled times when McCorkle either bought lunch for everyone or brought in home-cooked fare for a staff “dine-in.” Before coming to Alaska, he’d been director of nutritional services at the University of Washington, and while it seems he’d never lost his appreciation for bringing people together around fine food, he remained an intensely private man who’d known life’s blows himself.

According to former colleagues, McCorkle was a Navy veteran who knew business reporting from inside out. He’d also been a pool reporter and had written for some big names in the news business. But as much as he preferred being behind the scenes, he also could handle himself just fine behind a microphone, which he demonstrated to Anchorage radio listeners and television viewers.

In the 1980s, when the business publication was just an idea – one that Martin credited to legal duo Tony and Carol Smith – Martin recalls rubbing shoulders with McCorkle and Tony Smith, also now deceased, and about 13 other early shareholders at Denali Towers.

As Martin tells it, these were folks who were pretty well connected.

McCorkle had been city manager of St. Paul when Tony Smith was representing that Native group, and Tony Smith had also been Commerce director under Gov. Steve Cooper. Smith and McCorkle had been lobbying in behalf of a $6 million breakwater that eventually turned the island into a leading fisheries location.

McCorkle loved public service, a trait that reportedly dated back to his successful campaign for election as student body president as a junior in high school.

Before becoming publisher, he was city manager of Seldovia. Over the years, he’d also served in the same role for Haines, Nenana and Anderson. He also served on advisory boards for several regions and enterprises, including www.akbizmag.com • Alaska Business Monthly • January 2010

17

“You could not leave a business meeting with Vern without feeling a deeper commitment to service and quality.”

– Steve Lindbeck Alaska Public Telecommunications Inc. (APTI)

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Cook Inlet and Prince William Sound as well as the University of Alaska Anchorage School of Business.

Along with all Alaskans, “generations of students owe McCorkle a big debt of gratitude,” said Tom Case of the Alaska Aerospace Development Corp. Case said he has appreciated McCorkle’s dedication to advancing business education – energetically serving on the board, hosting business round tables, reviewing curriculum, and aiding in fundraising.

In 2007, when McCorkle learned he had cancer, Martin says, he was given about five months. Eighteen months later, after a stellar year for the magazine, he died on a cold day in January.

But don’t expect to see any bronze rendering of McCorkle in the magazine’s lobby any time soon. McCorkle made it clear that he wasn’t crazy about being eulogized and was even less fond of the idea of being memorialized.

When Martin gave in to his mourners and went along with a plan for a “celebration of life” service to be held at UAA, the city was lashed with a freezing rainfall that closed the entire university system down.

His old partner figured it was McCorkle having his way. The service was never rescheduled. ❑

www.akbizmag.com • Alaska Business Monthly • January 2010

JUNIOR ACHIEVEMENT 2010 SPECIAL SECTION Junior Achievement Alaska Business Monthly Hall of Fame Laureate:

Matthew Nicolai

BY PEG STOMIEROWSKI

W

hen Matthew Nicolai, CEO of Calista Corp., joined leaders of some 564 federally recognized tribes who met with President Obama and aides at the White House last November at the Tribal Nations Conference, he was a long way from home.

Born in Bethel and raised in the village of Kwethluk, Nicolai is a graduate of Chemawa Indian Boarding High School in Oregon. He attended the University of Alaska Fairbanks and Westfield State College in Massaschusetts, and received an economics degree from George Washington University.

Nicolai serves on the boards of the Alaska Native Claims Settlement Act (ANCSA) Regional Federation and Russian Orthodox Sacred Sites in Alaska, as well as Pacific Northwest, Soldotna and Fairbanks title companies and Title Insurance Agency of Juneau.

He also is a member of Anchorage South Rotary and past president of Anchorage East Rotary.

He has helped provide board leadership for other Native, state and community organizations, including the Alaska

20

Photo courtesy of Calista Corp.

Matthew Nicolai, president and CEO of Calista Corp.

Federation of Natives, the Anchorage Chamber of Commerce, the Salvation Army (chairman), Alaska Public Interest Research Group and the state’s Democratic Party.

Nicolai has was honored in 2000 as a distinguished Eagle Scout for Western Alaska by the Boys Scouts of America and has received the Hugh O’Brien Youth Leadership volunteer award.

CALISTA CAREER Nicolai joined Calista in 1975 as communications supervisor. He served in various leadership positions before becoming president of the Native regional corporation in 1994. At that time, he recalled, Calista had 54 employees, all in Alaska; by 2008, annual revenues had risen from $6.9 million to $224 million, with 1,196 employees

in 27 states, Guam, Iraq, Afghanistan and the United Kingdom.

Assets simultaneously grew from $13.5 million to $145 million, he said, and shareholders equity from $8.8 million to $106.8 million. The firm created more than 3,750 shareholder jobs and awarded more than $3 million in scholarships to Native shareholders and descendents, Nicolai said. He lists creation of jobs in rural Alaska, where good jobs are scarce, as a Calista goal in line with its goal of responsible resource development.

Calista’s growth has yielded more than 3,100 jobs over 14 years, Nicolai calculates, assisting 56 villages in the Yukon Kuskokwim Delta. Nicolai said Calista achieved the highest Native hire rate in the state, at 93 percent, at the Donlin Creek gold exploration project near Crooked Creek, expected to yield 31 million ounces of gold and as many as 500 jobs a year over 20 years.

Calista also oversees a U.S. Army Small Business Administration 8(a) set-aside contract in Huntsville, Ala., where Nicolai said income from the project has helped produce a dividend program, more than 400 local

www.akbizmag.com • Alaska Business Monthly • January 2010

jobs, and scholarships for shareholders and descendents.

FAMILY HERITAGE Nicolai’s father, David Nicolai, a traditional and community leader from the Yukon Kuskokwim Delta, modeled leadership through consensus building and strove to sustain traditional cultural values. “My late father had a very strong desire to help those with misfortune and alleviate their suffering,� Nicolai said.

This was a trait demonstrated through work and generosity. “He never looked for recognition.�

His parents taught him the value of kindness, compassion and thoughtfulness. He learned from them to listen well. To this day, he said, “My greatest challenge is to remind myself that I must constantly be a better person and not lose the positive traits I’ve learned from my parents.�

FELLOW LAUREATE Nicolai also appreciates fellow 2010 Junior Achievement Laureate Ted Stevens for the former senator’s tenacity

and commitment to improving the lives of Alaskans. “His legislative record has truly shaped the Alaska we live in today,� Nicolai said.

Stevens “stood up for Alaska� with the creation of the Stevens Magnuson Act, Nicolai said, with these efforts resulting in needed jobs and housing in rural villages, and the Denali Commission has created thousands of jobs while building rural infrastructure for airports, water and sewer systems, health clinics and renewable energy projects.

TRIBAL SOVEREIGNTY At the White House in November, Nicolai said, tribal leaders proposed a study as a step toward centralizing Native American services in an Indian Affairs Department, including housing, health care, education, human services, fish and wildlife management on Native lands, government contracting and Indian gaming.

And Nicolai said it is about time. “For the last two centuries the tribalfederal relationship has been treated as an inconsequential and unimportant matter of concern by the judicial,

legislative and executive branches of the U.S. government.� There was feeling that services have been handled by multiple departments, often in fragmented ways, Nicolai said, and as secondary issues.

In the name of sovereignty, an often misunderstood concept, he said, many tribal leaders wish to resolve their own problems and create opportunities with the federal government as a partner.

ADVICE TO YOUNG PEOPLE When it comes to educational opportunity, Nicolai said young people should be taught “the foray, the venture, the incursion of what income, consumption and saving should be. American culture places too much emphasis on consumption. Young people should understand early in life the meaning of sharing, giving, positive attitude and problem solving.�

They need, as well, to value freedom and leisure, and, he said, that doesn’t mean watching TV shows or broadcast sports or surfing the Internet day and night. Leisure is a privilege, Nicolai said, and this “pursuit of happiness� is a

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foundational concept in his view of life.

Nicolai said he advises young people who aspire to success and contentment to know their goals, do their best, stay in school and involve their parents in school and problemsolving activities. Also, avoid comparing themselves to others and do not let failure erode opportunity. He said the learning process differs from person to person.

As a teenager attending boarding school away from home, “I missed my parents, just as many teenagers did who went to boarding schools. Those are critical years when teenagers get to know their parents.”

But going to boarding school also allowed Native youths like him to finish school, Nicolai said: “It taught us to become independent thinkers and producers early in life.”

He said he is grateful for teachers who believed in his capacity to make a difference. “This just goes to show that the pursuit of happiness only happens through hard work.”

Asked about motivational changes between generations, he said, “I’ve

22

seen many in the younger generation operate with a self-centered work ethic. This means attitudes toward work, life, loyalty and respect are different. Many people in this new generation think just for themselves, not for the whole community. I do have hope they will change as they age in life. Self-discipline and leading an ethical lifestyle are personal choices. Youth should understand how much better life is when you conduct yourself with discipline and lead an ethical lifestyle.”

SUCCESS & DESTINY As for the future of Native corporations like Calista, ever-changing federal and state policies will influence how finances, operations and investments are directed, he said, and rapid changes in federal SBA policies on 8(a) contracting could affect local jobs, charitable giving and Nativehire programs.

While he continues to see a strong future in resource development, Nicolai said he is frustrated that such development “is constantly under criticism and attack by extreme environmen-

“My greatest challenge is to remind myself that I must constantly be a better person and not lose the positive traits I’ve learned from my parents.”

– Matthew Nicolai talists and worldwide organizations that have interests in Alaska but do not live here. How can we, a Native people, succeed if we cannot direct our own destinies?” ❑

www.akbizmag.com • Alaska Business Monthly • January 2010

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JUNIOR ACHIEVEMENT 2010 SPECIAL SECTION Junior Achievement Alaska Business Monthly Hall of Fame Laureate:

Ted Stevens

©2010 Chris Arend

Ted Stevens

BY PEG STOMIEROWSKI

F

Making it clear he didn’t intend to discuss any fallout from last year’s corruption trial, close election defeat and later dismissal of charges and vacating of the jury verdict, Stevens did say of his public service career, “I don’t have any qualms about it … I’m happy at what I’ve achieved.”

24

www.akbizmag.com • Alaska Business Monthly • January 2010

ormer Sen. Ted Stevens, when we caught up with him in Washington, expressed satisfaction with what he was able to accomplish during his decades in public service, which he alternately described as a commitment, a calling and a form of payback for a good life.

While Stevens also declined to quantify what his political representation has meant to the Alaska economy, Scott Goldsmith, with the University of Alaska Anchorage Institute of Social and Economic Research, thought it plausible that Stevens’ impact on state economic history has been comparable

to that of William Seward, who as U.S. Secretary of State engineered the purchase of Alaska from Russia in an act often ridiculed as “Seward’s Folly.”

The impact of Stevens’ political career most obviously has been felt, Goldsmith said, in the flow of federal dollars into the state’s economy during his tenure – a flow that became a surge and a key growth factor over the last 15 years. Stevens was quoted as saying in 2005 that he was responsible for $3 billion a year that was going into the Alaska economy, and Rhonda McBride of KTUU noted in 2007 that federal spending in Alaska was roughly $8 billion a year.

The surge in federal grants to the state and Native nonprofits, Goldsmith noted, coincided with Steven’s ascension to the chairmanship of the Senate Appropriations Committee in the late 1990s. Then, early in this decade, growth shifted to a dramatic increase in military spending.

And while by late 2009 the total of military and civilian spending had stopped growing – and there was growing concern that some spending channels will dry up – Goldsmith was not yet envisioning dramatic cutbacks. But it’s hard to predict Alaska’s economic future with any certainty, he added.

The operating budget of the Denali Commission, which coordinates millions in federal dollars for projects across Alaska, was down more than $34 million in fiscal year 2009 from the previous fiscal year, according to spokesman Sharon Guenther Lind.

Lind said operating funds in 2009 were $74.5 million, down from $108.8 million in fiscal year 2008.

Stevens, for whom the city’s international airport is named, in his private life enjoys spy novels and flying. He has six children and 11 grandchildren, and has expressed regrets for the many times his political life took him away from his own children’s activities.

He said he views commitment to one’s goal as essential to survival, but concedes “not everyone believes in commitment.” Nonetheless, one has to have a reason for one’s efforts, he says, and now, at 86, his is gratitude for having had a good life.

He expressed dismay about statistics showing that up to 40 percent

of Alaskan youths fail to finish high school. “You can only do it if you apply yourself,” he said, pointing out that in his own family, he was the first person to finish college, let alone get a law degree or be elected to Congress.

As noted last winter in the Anchorage Daily News, the state’s dropout statistics are grim indeed: at 8 percent, the rate was double the national average in the 2005-2006 school year, according to federal education figures; 38 percent of ninth-graders in 10 years would have no high school diploma, according to the Alaska Commission on Postsecondary Education, and the commission then found that Alaska ranked 50th in the number of ninth-graders likely have a bachelor’s degree in 10 years.

As a Junior Achievement 2010 Laureate, Stevens advised young people to work hard and respect themselves.

Even when your efforts meet opposition, he said, you have to keep going and find ways to contribute overall.

It would seem to be hard to conceive of a worse time to be young than in the years when Stevens and his three siblings were growing up.

Born in 1923, he lived in a small cottage in Indianapolis. His father was an accountant. Eventually he moved with his parents to Chicago, but the stock market crash ended his dad’s job and led to the Great Depression.

After their parents divorced, the Stevens kids went back to live with their grandparents. His father went blind for several years, and Stevens helped care for his dad and a disabled relative.

Stevens said he began working at age 6, doing whatever he could to help support the family, including selling newspapers, shining shoes and picking vegetables. He changed jobs often.

One of saddest days of his life, he has said, was when his first wife, Ann, was killed in an aircraft accident. Stevens survived the accident at Anchorage International Airport. Referring to Winston Churchill’s quote that “if you’re going through hell, keep going,” Stevens said adversity teaches the value of hard work and perseverance.

“You have to keep going no matter what happens,” he said. “If you lose one job,” he added, “you have to find another.”

Young Alaskans should concentrate

“You have to keep going no matter what happens. If you lose one job, you have to find another.”

– Ted Stevens

on finding ways to finish their studies and get as much education as they can, he said. Commerce in the state is going to be more technologically based than in the past, and today’s students will need higher education beyond a four-year degree to meet the demands of the future.

Stevens these days flies back and forth between the Anchorage area and Washington, where his second wife, Catherine, has a legal career. Having served longer than any other GOP senator, he is working on plans for the cataloguing and disposition of files and memorabilia from his half century in public life.

He believes sustained opposition to new development in Alaska, especially from environmental “extremists” who seem to want Alaska “to become a national park,” has made economic recovery even harder, and Stevens suggests some of those “who oppose Alaska’s future” are really afraid of all that the state could produce.

Alaska’s Native corporations have been very successful, says Stevens, who was instrumental in their formation in 1971. He also helped to create the Denali Commission in 1998, whose projects currently include many in rural areas with a high need for basic health, transportation and energy services. ❑

www.akbizmag.com • Alaska Business Monthly • January 2010

25

REAL ESTATE

CREW Alaska Women seek parity in earnings and advancement. ©2010 www.billzphotography.com

BY HEIDI BOHI

The Crew Alaska team at the Petroleum Club in Anchorage during summer 2009.

A

woman in a man’s world – as archaic as this expression may sound as we round the corner of 2010, in commercial real estate in Alaska, it is a widely held belief that this is the reality in a field that is still predominantly male.

Although the same holds true for the Lower 48 states, in Alaska this imbalance is especially noticeable where it is estimated that less than 25 percent of those who practice in the state’s industry are women. The high-paying field of commercial real estate offers a culture and compensation structure that is often problematic for women.

“Go to any Certified Commercial Investment Member (CCIM) meeting.

There will be more than 100 people in the room and only a dozen will be women,” says Beth Knight, vice president for Alyeska Title and a member of the industry for 28 years.

ALASKA CHAPTER To address narrowing that gap, about two years ago Knight began asking around to see if there was enough interest in the community to support an Alaska chapter of the national organization Commercial Real Estate Women (CREW). The 20-year-old nonprofit advances the success of women in disciplines affiliated with commercial real estate development, including lenders, attorneys, architects and engineers. In October, the chapter celebrated its one-year anniversary and has 25 core members.

26

“It gives women a place where they feel like they can emerge,” Knight says, adding that the organization also has resulted in networking women and men in the industry. “It allows some of the gentlemen to learn of rising stars they might not otherwise have the opportunity to meet.”

A major focus of CREW is to provide more role models and mentors for young women breaking into the industry, which is key to a woman’s success in this industry, experts say.

CREW Foundation, the philanthropic arm of CREW Network, offers a program called “CREW Careers: Building Opportunities,” which is presented to local girls’ groups nationwide. In addition to networking, education and professional development, locally the Anchorage chapter offers the CREW Foundation for scholarships and also focuses on developing role models from its membership who can mentor each other, teach and share best practices with the next generation of women, Knight says.

NATIONAL RESEARCH Despite the fact that women account for only about 36 percent of all commercial real estate professionals, research by the national organization shows there are more women in commercial real estate today than ever before. A commissioned study found that despite the disparity, the number is up from 32 percent from five years ago when it did its first study.

Women have made greater inroads in some parts of the industry than others. Industry-wide, 51 percent of assetproperty management professionals are women, while 44 percent in financiallaw services are women. Only 23 percent of the CREW survey respondents said they were employed in a brokerage function, and 36 percent of development professionals are women.

COMPENSATION, ADVANCEMENT At the same time, the CREW study, along with anecdotes from leading female executives in real estate, reveals a contradictory picture. Women’s participation in the industry is at an all-time high, though the survey found that when comparing men and women with more than 20 years of experience, 44 percent of men held the title of president, chief executive or chief financial officer, compared to 23 percent of women.

Though more women are entering commercial real estate, men earn more than women across the board at comparable levels of age and experience, as well as across specializations. Nearly six in 10 (58 percent) of the men reported yearly incomes of $150,000 or higher, but only 24 percent of women achieved those revenues.

“There is clearly more work to do to achieve parity between men and women in terms of compensation and career advancement and to increase the number of women in certain segments of the industry,” the national network ❑ says of the study.

www.akbizmag.com • Alaska Business Monthly • January 2010

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VIEW FROM THE TOP

BY PEG STOMIEROWSKI

R

enee Schofield is owner of Tongass Substance Screening (TSS), with offices in Ketchikan, Anchorage and Juneau, as well as in Keokuk, Iowa. Since 1999, the firm has specialized in drug and alcohol collection and testing services.

AK STAR, its educational arm, does phlebotomy (blood collection) training and CPR/First Aid classes, customer service training and additional continuing education.

ABM: How’s the view from the top at Tongass?

Schofield: Ten years ago, I was the only employee; today we have 12.

We have a great team at TSS, and we truly change people’s lives with the work we do. We provide an array of services, and every day is different.

From drug-free workplace programs to crime- and trauma-scene decontamination, we are on call 24/7.

ABM: What substances pose greatest risks?

Schofield: Substance abuse is widespread across the nation. As the economy takes a dive, it tends to skyrocket. Our offices have seen an increase in prescription drug abuse in all age groups.

ABM: How effective is workplace testing, and how prevalent random testing?

Schofield: Workplace testing is quite useful. Employers have a responsibility to send a clear message that illicit drug use is unacceptable, and some employees are federally mandated to participate in random drug testing. Many business owners who are not mandated to do testing still run programs that comply with Alaska statutes in order to reduce the risk of accident and/or injury.

28

Photo courtesy of TSS

Renee Schofield,TSS Founder ABM: What’s the cost range and process for a startup program?

Schofield: Costs vary, depending in part on size and policy. TSS can have a program up within days, once a policy is legally vetted and employees notified.

Given the rise in insurance/business costs, and potential loss of time in the event of an injury, drug screening constitutes essential protection.

ABM: Is workplace testing a growth field?

Schofield: Companies like TSS are unique in that we fill a niche market, primarily catering to the workplace. TSS does other things in the testing arena, such as audiograms, spirometry (measuring breath), insurance exams, health fairs and safety training. We perform urine drug-screen collection for agencies across the nation, for instance, when screening for employment elsewhere can easily be done locally. Alaska has some fine providers who work well with others, including competitors, when needed. Safety is the primary goal.

ABM: What’s the view five years out … what’s coming?

Schofield: There should be some

changes for example, more electronic dissemination of paperwork. In the (regulated) Department of Transportation world, we are still working with a five-part chain of custody, while non-regulated (for random screening) industry is making the switch to an electronic chain of custody, which reduces storage and management functions. I think DOT will get there; it just takes time. We’ll likely see an increase in sweat-patch testing.

I hope more Alaskans recognize the value of residential treatment.

We’re at crisis level, with too few beds.

Treatment dollars reduce what’s spent in corrections, courtrooms and broken families.

I also hope to see a reduction in stigma for recovering addicts. While they may always be recovering, it is important to recognize strides toward sobriety. We all must be willing to be supportive of recovery efforts. With strong family and community support, many recovering addicts can again stand tall.

ABM: What can you tell us about your decontamination unit?

Schofield: The unit’s job is to avoid additional trauma, with most calls following suicides. Our technicians arrive after police leave. Their job is to decontaminate, clean up and restore property.

It may seem gruesome, but no family members should be re-traumatized by viewing blood or body fluids of a dead loved one. Proper decontamination is crucial to avoid exposure for future inhabitants of a building or vehicle.

We never know who may be HIV ssor Hepatitus-C positive, and we should take care to reduce risks.

We hope you never need us in this capacity, but when and if you do, activate emergency responders first. And then call TSS. ❒

www.akbizmag.com • Alaska Business Monthly • January 2010

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OPINION

Health Care Crisis

Do Something,

But Think First

BY DEBBIE CUTLER MANAGING EDITOR

P

resident Obama’s proposed solution to the heath care crisis in America leaves my head spinning. Even our own leaders disagree on whether it will be good for the country and Alaskans. Overwhelmingly, I read, however, that it is a step toward the solution, but not THE solution.

I am not an expert on health care issues, not an expert on his proposed plan, not an expert on anything relating to reform and universal health care, but I do have an opinion for all it’s worth.

■ Health care insurance costs to small businesses are increasing at alarming rates.

■ Health care insurance costs to individuals are increasing at alarming rates.

■ The number of uninsured is increasing at alarming rates, with more than 45 million uninsured in the U.S. One month without health care insurance can bankrupt some individuals. One young man I know, without health insurance, relying on medication samples from his doctor for a severe illness, went without his prescriptions, at least in part, because samples were not available. The cost of his meds: more than $1,000 a month, too much for his small budget. He owes thousands upon thousands for a life-threatening accident he had, even though much was written off by Providence Hospital. His future looks

30

bleak financially: mid-20s with bills the size of a mortgage and a job without benefits. It’s amazing he keeps such a positive outlook on life and retains his energy and motivation.

I see my senior friend, on Medicare, needing medical attention, but not going for it because she can’t afford the percentage she still must pay. She has no part D insurance for medicine, again because she can’t afford it. She is 67 and working away in her retirement years because she can’t live on a social security check, can’t pay for dentures that Medicare does not cover, can’t afford health care, period. Even with some plan in place.

We need to do something. We all may be one job, one premium, one day or month or one year away from not having coverage ourselves. That is if we are among the lucky ones who have it.

ALASKANS HURTING The U.S. Census Bureau reports, each year, the number of Alaskans without health insurance. During 20072008, there were 632,000 residents in the state: of the total, 33 percent were without health care insurance, a whopping 209,000. Of the uninsured, it was likely that more than 75 percent would remain uninsured for six or more months.

According the Census Bureau, those most likely to go without health insurance in Alaska were minorities: 38.3 percent of Hispanics/Latinos, 35.8 percent of African Americans, and 46.6 percent of other racial and ethnic minorities. And though only 28.3 percent of Caucasians were uninsured, those 125,000 individuals are 60 percent of all the uninsured in Alaska.

Nearly 80 percent of uninsured Alaskans are members of working families.

The remaining were not working, actively searching for employment, disabled, chronically ill, family caregivers, an so on, the report stated. Low-income individuals were the most likely to go without health insurance.

So what should we do?

I believe health care reform is the answer, but not by decreasing Medicare benefits or creating more hardships for business. Something drastic needs to be done. Nobody should be without insurance.

Take Elan Moren who lived through a brutal machete attack in her Palmer home in 2007. The incident was horrifying, but her struggle to access medical care without insurance was worse, she said, in an article published in ABM in April 2009. “The attack lasted maybe 15 minutes,” she said. “This (health care issue) is about the rest of my life.” ❑

www.akbizmag.com • Alaska Business Monthly • January 2010

GUEST AUTHOR

Enforcement for ‘Made in Alaska’ Logo Grows Federal trademark registration has convincing consequences.

BY MICHAEL HANZUK

I

started work as a development specialist with the State of Alaska, in the Department of Commerce Community and Economic Development, Office of Economic Development in 2006. One of my primary responsibilities would be to oversee the “Made in Alaska” program consisting of more than 1,100-plus participants and working with the contracting program manager Webb Consulting. Being somewhat familiar with the program since it started in 1986, this was exciting for me. Twenty years later, I am helping with a program designed to support entrepreneurs and small businesses in Alaska.

POPULAR LOGO After reviewing the history of the program, and bringing myself up to speed with how it has developed over the years, I found that many businesses and people over the years have continued trying to capitalize on the popularity of this logo without registering for use of it. This has caused problems with legitimate participants seeing the logo being misused. In 2007, the Office of Economic Development (OED) was asked to visit some of the gift shops around the state, amidst claims illegal products were being sold as “Made in Alaska.”

During the peak of the tourist season, I obtained the support of other State OED staff members in the purchasing of particular items, including masks, baskets and jewelry claiming to be made in Alaska. At one location, a purchase was made of a basket of Indonesian origin, embellished with rabbit fur and a piece of imitation ivory. This basket may have been embellished in Alaska, but the basket was obviously not made in Alaska. None the less, the basket retained the “Made in Alaska” mother bear and cub logo sticker on it. When the owner of the shop was confronted with the illegally marked

basket, the excuse given at that time was that one of the employees must have retagged the basket by mistake.

Because this seemed to be a common event with some gift shops, I obtained authorization from OED Manager Joe Austerman to inspect gift shops misusing the “Made in Alaska” stickers. To my surprise, several other gift shops were misusing the “Made in Alaska” logo signage to promote items made in Indonesia and other parts of the world.

ILLEGAL USE Realizing this to be a bigger problem than first anticipated, and with the program’s integrity in jeopardy, OED continued with reviewing the law for infringement of a logo. Consulting with the State of Alaska, Department of Law, OED was informed that although the logo was registered within the State of Alaska, the program had little or no teeth to enforce illegal or misuse of the logo.

Since the “Made in Alaska” logo had not been federally trademarked in the past, the program was in need of additional enforcement. The Department of Law and OED proceeded to pursue the registration of these two bears “Mishka and Toklat” with the federal government.

FEDERALLY REGISTERED As of Sept. 8, 2009, the “Made in Alaska” emblem of the “Mother bear and cub” is now a federally registered trademark. With the federal registering of “Mishka and Toklat” as the state’s logo, anyone who imports into the United States goods bearing counterfeit marks is subject to civil and criminal penalties for violation of federal trademark and customs laws. Such penalties include seizure and destruction of the infringing-marked goods and statutory damages of $500 to $100,000 for each counterfeit mark used on each type or class of goods; and as much as $1 million per counterfeit mark if a court finds that the counterfeit activity was willful.

You can find many “Made in Alaska” products at gift shops and at shows, such as the Make it Alaskan Festival, Holiday Food & Gift Show, Arts and Crafts Festivals around the state, and the new 2010 Alaskan Showcase being held at the Dena’ina Civic Convention Center, scheduled Feb. 16. Over the past two years, in collaboration with the Department of Transportation, the “Made in Alaska” program has also added three new display cases and locations for participants to promote their products: Ted Stevens Anchorage International Airport, and the ferry terminals in Juneau and Whittier. Other locations are the Egan Center in Anchorage and the Tok Visitors Center.

With continued support of Alaskanowned gift shops and participants of the “Made in Alaska” looking out for one another, the program will continue to offer support of marketing and promoting products made in Alaska.

Look for the label “Made in Alaska” ❑ – www.madeinalaska.org.

About the Author Michael Hanzuk is the Made in Alaska program coordinator in the State of Alaska Commerce Department’s Office of Economic Development.

www.akbizmag.com • Alaska Business Monthly • January 2010

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ECONOMICS SPECIAL SECTION

Alaska 2010 Outlook New decade brings challenges, opportunities.

COMPILED BY SUSAN HARRINGTON ASSOCIATE EDITOR

R

ecession, recovery, rehab: the three R’s of prevailing economics. Recovery, not recession, is the buzz word for 2010, but rehab could turn out to be the key. A new decade begins with government subsidies increasing GDP and decreasing unemployment, thus elevating the economy to recovery status.

All the careful confidence cannot keep the economy up when the handouts end. Billions of dollars later, credit is still tight and people are keeping their money in their pockets.

The economy will not grow without increases in private spending and lending, two details necessary for lasting job creation. In Alaska, it’s a bit of a different story.

Read on to find out what some remarkable leaders have

BY SEAN PARNELL Governor State of Alaska

ALASKA

I

n the past 50 years, Alaska has been generous to her people, offering many opportunities for success and happiness. Alaska still has much to offer and I believe her best years are yet to come. My number one priority is to position Alaska’s economy for growth and our children and families for oppor-

32

to say about Alaska’s economic outlook for 2010. A golden thread of optimism and hope for stability runs through most sectors of the economy. ConocoPhillips Alaska President Jim Bowles gives an honest appraisal of what the State needs to do before the economy can move forward.

We’ve included comments from government representatives as well. Gov. Sean Parnell weighs in on the State’s commitment to Alaskans. Other State voices include Labor Department Commissioner Click Bishop and Transportation Department deputy secretaries of aviation, marine and surface transportation. On the federal side, U.S. Army Corps of Engineers Alaska District Commander Col. Reinhard Koenig briefs us on planned 2010 military construction spending.

tunity. You can be assured that no matter the issue – increasing oil production, making a gas pipeline happen, fixing our roads or bridges, or supporting our families and children – I’ll be working hard with your help for Alaska.

So what’s working? Clearly oil and gas exploration and development works – and fuels our economy. But TAPS throughput is declining. As we continue our quest for renewable resources, our job is to keep the oil flowing through TAPS. Take Alaska’s outer continental shelf (OCS) for instance.

The potential is huge. We’re estimating 35,000 direct and indirect jobs and a $72 billion payroll.

We are also making progress on the natural gas pipeline. Today, we have four major international companies working on commercializing Alaska’s North Slope gas – whereas, just two years ago, we were at a standstill. For the first time in 32 years, we have an open season scheduled for North Slope gas.

Work also continues on in-state gas, which is particularly important to the Interior and to Southcentral. Our instate gas pipeline team has identified and is evaluating all options for in-state gas. Considerable work has been done

evaluating a stand-alone pipeline from both the North Slope and the foothills of the Brooks Range to Fairbanks and Southcentral, and a spur line to Southcentral from a major pipeline to the Lower 48.

Another focus of my administration is infrastructure – we are going to fix what we have got and put our contractors to work. First we’ll focus on Alaska’s sole ground transportation link to the oil and gas fields of the North Slope – the Dalton Highway. We will continue improving the safety and drive-ability of the Dalton by taking steps to bring it up to current construction standards. This project supports both our existing oil production and future gasline efforts.

The capital budget will include $100 million for deferred-maintenance projects. This will be the first year of a five-year deferred-maintenance plan to maintain the State’s assets. The construction industry can depend on these “hammer-ready” jobs each and every year for the next five years.

Work force development and job training also are key to Alaska’s economic future. I’ve included $3.5 million in my budget for Alaska construction academies, $2 million for the pipeline

www.akbizmag.com • Alaska Business Monthly • January 2010

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training facility in Fairbanks, and funding for job-training efforts in rural Alaska.

I have also introduced the Governor’s Performance Scholarship program, or GPS. This is a merit-based scholarship for Alaska high school students, which will allow them to earn scholarships for postsecondary studies at qualifying Alaska universities or job-training centers.

We will work to grow our economy through the ingenuity and creativity of our people. As we look to our future – to Alaska’s next 50 years and beyond – we will work together to promote and support responsible development of Alaska’s resources. Only then can we be sure that Alaska’s next 50 years will be her best yet.

■

BY JOHN MACKINNON Executive Director Associated General Contractors of Alaska

CONSTRUCTION

C

onstruction is the third largest industry in the state and accounts for 20 percent of Alaska’s economy. The 2010 outlook for commercial construction is fairly good for roads, bridges and airports, less so for buildings.

Normal federal funds to Alaska each year are between $270 million and $280 million for highways and $180 million for airports. We have a $315 million bond issue passed in 2008 funding projects statewide and accounting for at least two solid years of work that

34

Construction is the third largest industry in the state and accounts for 20 percent of Alaska’s economy. The 2010 outlook for commercial construction is fairly good for roads, bridges and airports, less so for buildings. will soon go out to bid. The stimulus (ARRA) money funded about $250 million for highways, bridges and airports for 2009 and 2010 – three-quarters of those projects are yet to hit the streets.

On the building side, we’re seeing the first real downturn in 20 years.

There is some pull back of private investment, some nationwide stores are delaying construction; and in housing, new construction in 2009 was one-third what it was in 2007 – $250 million versus $750 million. Overall, building construction was down 10 percent in 2009 and expected to be down more in 2010.

Stimulus money is funding hospitals in Nome and Barrow and a health care facility in Anchorage. In Anchorage, we could see a negative effect with passage of Title 21, which could increase the cost of commercial development 10 percent. Increasing regulations is best done when the economy is booming – it’s not the best time now when the economy is down.

Gov. Parnell’s proposed deferredmaintenance program could be a real boost to construction spending and a real benefit to state facilities. Construction bidding is very competitive, much more than in many years, with many bidders on each project and prices well below estimates. It’s a great opportunity for the State to take advantage of the good market to tackle the backlog of deferred maintenance. Taking advantage of that is good business. Next, we could start that big list of infrastructure projects for the gas pipeline – $500 million to $700 million worth of work that will take eight to 10 years to do.

■ It’s time to start.

BY COL. REINHARD (RHINO) KOENIG Commander U.S. Army Corps of Engineers, Alaska District

CONSTRUCTION (MILITARY)

T

he U.S. Army Corps of Engineers, Alaska District’s strong military construction mission provides a stabilizing force to the state of Alaska’s economy in times like these when private construction remains uncertain. The Alaska District, serving as the Military Construction (MILCON) construction agent for the U.S. Army and Air Force in Alaska, manages one of the largest military construction programs in the nation. The fiscal year 2010 program estimate is $314.6 million, up from last year’s $297.6 million. Continuing to support transformation of the Army, military readiness, training and qualityof-life facilities to support a nation at war, the District anticipates that the

The Alaska District is awarding 48 projects for the Army and the Air Force under the American Recovery and Reinvestment Act (ARRA) of 2009.

www.akbizmag.com • Alaska Business Monthly • January 2010

fiscal year 2011 program will remain strong at $351.9 million.

The fiscal year 2010 program includes 11 projects in the Army Program, valued at $252.7 million and three projects in the Air Force Program, estimated at $61.9 million. Most projects are scheduled for award this month and next, after Congress passes the military appropriations bill. The district advertises for proposals to design and build these projects on the Web site https://fbo.gov In addition, the Alaska District is awarding 48 projects for the Army and the Air Force under the American Recovery and Reinvestment Act (ARRA) of 2009. Funded at $21.8 million, these are repair, renovation

BY KIM KOVOL Executive Director Green Star

ENVIRONMENTAL

M

any industries are addressing their mission, HR and operational practices to include “green” policies in order to be attentive to their employees’ values and remain competitive in business with client demands. Wal-Mart, for example, will soon be providing their vendors’ “carbon footprint” so customers are better educated and can make more informed decisions with their purchases.

In 2010, more companies will be “greening” their businesses through employee interviews, evaluations and performance reviews. Hiring decisions will increasingly be made after measuring prospective employees’ commitment to “saving green” (your bottom

and small construction projects. Two projects at Eielson Air Force Base have been awarded for a total of $256,000. Still to be awarded are two projects at Fort Wainwright estimated at $3.45 million. Army ARRA projects at Fort Richardson total $18 million, including 23 already awarded and 21 to be awarded.

The Corps of Engineer’s motto “Building Strong” and the Alaska District’s motto of “Building and Preserving Alaska’s Future” supports the Army’s motto of “Army Strong” and symbolizes our commitment to construct world-class facilities ontime and within budget, while helping provide economic stability to the Last Frontier.

■ line!) by “living green” through their practices, ideas and philosophy.

More performance measures will include environmental stewardship, learning opportunities and training, paper use, supply orders and other “green” practices, such as using “EcoFont” for printing computer-generated documents and e-mail, which reduces the use of toner/ink by 50 percent.

More performance reviews and selfevaluations will be electronic.

In these challenging economic times, folks are more aware of their impact and actively seek out alternative opportunities to recycle, repurpose and reuse. There are numerous and increased resources (locally and nationally) to address “green” ideas – there are 10 iPhone applications alone on recycling and “green tips.” In fact, Green Star is looking at producing an application with local Alaska “green” information.

Bloggers are testing and rating green products and sharing their opinions with eager followers who don’t mind paying a premium for “green” products, after all, materials in production are recycled and reused. And for many Generation X, Y and Z’ers, it’s hip, it’s inclusive and it’s a part of their life (consider the concept of recycling really hit its stride commercially and in academia 30 to 40 years ago).

Green Star’s environmental outlook for 2010 is for increased use of innovative approaches and “green-minded■ ness” by Alaska businesses.

BY BILL ECKHARDT President and CEO Alaska USA Federal Credit Union

FINANCIAL SERVICES

T

he outlook for the financial services industry is linked directly to the economy and more specifically to the financial well-being of consumers and businesses. On a global scale, the past year has been challenging for everyone.

The impact of consumer confidence during this recession has been significant. Consumers are concerned about employment and the value of their homes and retirement savings.

As a result, they are buying less and saving more. In the long-term, this deleveraging of a consumer’s personal balance sheet is good for their financial well-being, but in the short-term it puts further downward pressure on the economy. While many economists feel the economy is on the road to recovery, there are many potholes in the road ahead and it is sure to be a bumpy ride.

Alaska’s economy has only recently been affected by the global recession.

Unemployment is up slightly as tourism, retail trade and the construction industry struggle from the effects of

Alaska’s economy has only recently been affected by the global recession.

www.akbizmag.com • Alaska Business Monthly • January 2010

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national trends. Alaska’s oil- and government-based economy has sustained Alaska during this period and provided for a relatively high level of consumer confidence. As a result, the financial services industry in Alaska has performed well during the recession and is expected to continue to do so. This is not to say there have not been challenges, but financial institutions based in Alaska, just like Alaskans, are somewhat insulated from many of the conditions that have adversely impacted the rest of the world.

Indicators of what is happening in an economy and key metrics that financial institutions watch are loan demand and loan delinquency. In Alaska, consumer loan demand is down less than 10 percent and delinquency is within normal ranges. While these loan metric values may change in the future, Alaska’s financial institutions are well capitalized and positioned to help Alaskans and Alaska businesses during this difficult economic period. The outlook for Alaska in 2010 is cautiously optimistic as the nation navigates the road to recovery.

■

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The very short time frames announced on these extremely complicated issues bring increased possibility of unintended consequences.

BY MARK VINSEL Executive Director United Fishermen of Alaska

FISHERIES

C

ommercial fishing forecasts can be difficult to predict, but the overall outlook is that Alaska’s commercial fisheries will continue to provide the public with well more than half of U.S.

domestic seafood production, and benefit from a market premium based on the value of the State’s investment in the Alaska brand through the Alaska Seafood Marketing Institute. Alaska’s historical focus on sustainability ensured that we have seafood to harvest and is now paying off in the marketplace, with large retailers such as Wal-Mart and Costco now considering this criteria – with the result of more Alaska seafood on their shelves.

In looking at a few specific fisheries, the pink salmon of Southeast may continue the lower-than-average harvests of the past few years, while the world’s largest salmon harvests of Bristol Bay are expected to continue the higher-than-average runs of recent years. The cycle of lower-than-average harvests of halibut is offset for many in the longline fleets from a trend to increased U.S. demand for sablefish, commonly called black cod. Just a few years ago, few restaurants in the U.S. offered black cod, but more and more chefs and consumers are discovering the rich flavor and health benefits of its high level of omega-3.

The year 2010 may bring new variables outside of the fishing industry’s control with federal attention to “ocean spatial planning” and a review of federal subsistence by the Department of Interior. The very short time frames announced on these extremely complicated issues bring increased possibility of unintended consequences. In addition, time will tell whether predicted effects of increased atmospheric carbon such as warming and ocean acidification will affect fisheries resources in the short-term. United Fishermen of Alaska will continue to work for the funding of science, and best use of this science to continue our role in the delivery of Alaska’s seafood resources to the dinner ■ plates of the public.

www.akbizmag.com • Alaska Business Monthly • January 2010

Providence our Parish Nursing Program trains volunteer nurses in faith communities to serve in a care coordination role for their parishioners, saving money and resulting in better care outcomes. Also, the Providence Family Medicine Residency is moving toward a patient-centered-health home model, with care coordination as a centerpiece.

Demand for health care services is growing. As providers, we must look at ways to control costs while ensuring better outcomes. At Providence, we are implementing these best practices of “high tech” and “high touch” to deliver Alaskans the care they have relied on for more than 100 years.

■

BY BRUCE LAMOUREUX Chief Operating Officer Providence Health and Services Alaska

HEALTH CARE

H

ealth care reform shone a spotlight on the health care industry in 2009 and what has emerged under the scrutiny of that bright light isn’t very pretty. As a nation, our health outcomes are not as high proportionately as the money we spend for care delivery.

The reform debate highlights two important ways we can change our health care system for the better. Alaskans will see these trends impact health care delivery in 2010.

First, health care information management will become more high tech.

Other industries are far ahead of us in the use of technologies to improve efficiency and outcomes. Providence Alaska Medical Center will be integrating its electronic patient health record under one solution called Epic, diminishing fragmentation and consolidating information in one place. Epic will also provide patients with a secure Internet portal and access to their personal medical information. Better technology can enable better and more efficient care.

Second, expect more coordinated care. Instead of just treating symptoms, the health care industry will move toward treating the whole person. For those with chronic conditions such as asthma and diabetes, regular and consistent care means the difference between managing symptoms and ending up in the hospital. As examples, at

BY CLICK BISHOP Commissioner Alaska Department of Labor and Workforce Development

JOBS

G

ood and plentiful jobs are at the core of every healthy economy. In 2009, Alaska saw rising unemployment rates – along with every other state in the country – but the recession’s effects on Alaska have been less severe than they have been elsewhere. Still, Alaskans and Alaska families are feeling the negative effects of our economic times.

While many businesses still cite the difficulty of finding qualified employees as their single biggest challenge, many people throughout Alaska can’t find jobs. Alaska’s unemployed are concentrated in certain regions, industries and populations, such as people with disabilities. This labor disconnection is a

tipping point in our economy. It affects not only day-to-day business, but also limits opportunity for long-term growth.

Alaska Department of Labor and Workforce Development staff are working every day to connect job seekers with employers and to improve our services to prepare unemployed and underemployed workers. We are also working harder to close the gap, to train Alaskans for the high-paying jobs that currently go to nonresidents.

Our success will depend on strong partnerships with industry and education, as our needs and resources complement each other. A good example is registered apprenticeship. Historically, craftsmen and professionals handed down their knowledge and skills through apprenticeship. Registered apprenticeship combines on-the-job learning and related instruction with a progressive pay scale so participants truly earn while they learn. Apprenticeship allows employers to establish the standards of proficiency they need while developing a local and loyal work force.

More than 900 occupations can be apprenticed – from accounting and welding to supporting industries as diverse as health care and information technology.

Alaska currently has about 80 apprenticed occupations, 2,400 apprentices and 300 sponsors (employers and employer associations – both independent and union). Last year, more than 750 apprentices became journey-level workers.

Apprenticeship is emerging as an important component of Alaska’s connected work force development and educational system. An individual can follow pathways from high school through tech prep courses to a registered apprenticeship or enroll at the university or other post secondary institution. With registered apprenticeship as a component of the system, apprentices can earn up to 38 credits with the University of Alaska. Moreover, with more than 80 percent of our high school graduates not prepared to go directly to university, apprenticeship is a viable next step that opens a door to further education and training.

As part of a connected system, apprenticeship is a talent development strategy that addresses the skilled worker shortage and develops fu■ ture managers.

www.akbizmag.com • Alaska Business Monthly • January 2010

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BY STEVE BORELL Executive Director Alaska Miners Association

MINERALS

T

he mineral industry continues to advance following the financial meltdown of late 2008 and early 2009.

These financial challenges forced many companies to drop prospects and sell assets but the situation is now greatly improved.

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As demand for base metals returns, base metal prices are getting better. Precious metal prices continue to increase due to global political turmoil, inability to rapidly increase production and continued growth of the U.S. national debt.

After dropping to nearly $700/ounce in November 2008, gold prices have continued above $900/ounce since midApril and are now over $1,000/ounce.

Silver prices are now above $16/ounce.

Alaska is particularly well positioned to benefit from improved prices. With many dozens of exploration companies now active in the state, Alaska is clearly on the â&#x20AC;&#x153;radarâ&#x20AC;? screen for the investment funds, banks and common investors that provide the exploration investment capital.

The reasons for companies to come to Alaska and invest here remain the same. Even though nearly half of the state is designated as some type of park, preserve, refuge, wilderness or otherwise protected status, the lands that remain available have tremendous potential. Also, the state has had relatively little exploration â&#x20AC;&#x201C; especially with the latest technologies that have been developed over the past couple decades.

Another benefit to Alaska is that it contains a significant amount of private Native lands, much of which are open to leasing with the owners, and Alaska has a large amount of State land that is open to mineral development. Alaska also has a stable tax and regulatory structure and Alaskans support environmentally responsible development.

Today Alaska has five large mines operating, but only five. That compares with Nevada, which is one-fifth the size of Alaska and has 55 large mines. The conclusion is that Alaska has a tremendous opportunity for future mineral development. This development will create high-quality, skilled, yearround jobs and economic opportunity throughout the state. For much of Alaska â&#x2013; there are no other options.

Alaskans support environmentally responsible development.

BY ED HERNDON Chief Executive Officer Chugach Alaska Corporation

NATIVE CORPORATIONS

F

or 2010 Chugach Alaska will be concentrating on diversifying our business base. A large portion of our business is derived from the federal marketplace and it stands to reason that within the current political environment there is a desire to utilize those skills in other markets.

The next year will be just as good â&#x20AC;&#x201C; if not better.

Regarding our 8(a) challenges â&#x20AC;&#x201C; beyond continuing the education of members of congress and others on the benefits of the 8(a) program, I believe this is an opportunity to strengthen the program through the regulatory process. In addition, any opportunity to show value to the government and the American taxpayer is a positive one.

We need to be thinking about the next generation of shareholders and what will we create now to provide benefits for them then.

Chugach has primarily positioned itself as a service provider for facility maintenance, construction, educational services, IT and oil field services. For the new year our eyes are on new business acquisition and teaming arrangements that can potentially develop our capabilities into new and different markets.

www.akbizmag.com â&#x20AC;˘ Alaska Business Monthly â&#x20AC;˘ January 2010

Chugach just started a new fabrication company (Wolf Creek Fabrication Services Inc.) and has experienced some interesting business leads that could create some new opportunities for us and we expect those to pan out this coming year.

Our concentration for the new year will primarily be in the construction market with an increased emphasis on our own self-performance. This past year we have seen some solid growth within our construction divisions and we forecast the next year will be just as good – if not better.

■

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BY JIM BOWLES President ConocoPhillips Alaska

OIL & GAS

T

he oil and gas industry has been a driving force behind the Alaska economy for more than three decades.

According to a 2008 report by ISER, a quarter to a third of all jobs in finance, utilities, retail and wholesale trade, and construction can be traced in some way to the petroleum sector. The oil and gas industry will continue to shape Alaska’s economy for many years to come, but the industry faces challenges in 2010 and beyond.

While the Chukchi Sea and gas pipeline projects are the focus of much discussion and debate, the existing production fields on the North Slope need the same amount – or even more – attention. As we look to 2010, we believe a strong pro-business perspective www.akbizmag.com • Alaska Business Monthly • January 2010

39

is needed to help sustain and improve the health of these core producing fields. Finding additional oil in these existing production fields is the bridge to the future growth projects like the gas pipeline project and the Chukchi.

To touch on exploration, this winter will be the first drilling season since 1965 that ConocoPhillips won’t drill an exploration well in Alaska. We have been the state’s most aggressive explorer over the last decade, drilling 56 exploration wells on the North Slope, including 20 in NPR-A. Our success has been limited and as a result, we have relinquished more than 1.4 million gross acres back to the BLM since 2007. Other explorers appear to be reducing their activity as well. To date, we are aware of only two possible exploration wells being drilled on the North Slope this winter.

Moving on to production, let’s first look at Alpine, the westernmost field on the North Slope. Alpine in 2010 will have been producing for 10 years.

Alpine is producing about 100,000 barrels a day, with two relatively new satellite fields currently accounting for some 40 percent of that production.

If we’re not constantly re-investing in producing fields – like developing new satellites or drilling additional wells – we will see a rapid drop in production.

At ConocoPhillips, we’ve invested years and millions of dollars toward sustaining production at Alpine – but progress is slow. We’ve been trying to permit and develop the next Alpine satellite field since 2005! We remain concerned that unnecessary delays in permitting result in deferred investment and loss of countless North Slope construction jobs.

Then there are the top two oil fields in the nation, Kuparuk and Prudhoe Bay. We’re a 36 percent owner in Prudhoe, and a 55 percent owner and operator of Kuparuk. These fields hold substantial opportunity to produce more barrels of oil if the right investment climate is in place. We continue to do our part in looking for ways that new technology can help deliver more oil production and create more jobs. For example, at Kuparuk we’re using a new coil-tubingdrilling rig that can re-drill old wells cheaper and faster to find new oil and increase production rates at Kuparuk.

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So, there is some good news, but on the flip side heavy oil is progressing slowly, challenged by high costs, the volatile price environment and technology issues, not to mention the current ACES production tax structure.

Finally, Alaska’s mature fields are requiring an ever-increasing portion of our capital budget for maintenance.

We’ve been paying a lot of attention to the integrity of these assets – inspecting, repairing, upgrading – and millions are being spent by BP and ConocoPhillips to ensure that existing oil is produced in a safe and environmentally responsible manner. However, we cannot continue to look at this higher level of facility upgrade work to carry jobs in the future.

These upgrade projects will eventually be completed and we need to look at our core business of developing new barrels of oil to sustain our business in the future.

I have spent most of the time here talking about our core producing fields but let’s circle back to the long-term growth projects – why is there so much uncertainty? For a big gas pipeline, it is natural gas prices, project costs, uncertainty in state tax terms and lack of clarity on commercial tariff terms that remain significant outstanding issues for the shippers like us who may commit their gas on a proposed project.

ConocoPhillips is one of the largest gas owners on the North Slope and we will continue to look for the best overall solution to move this natural gas to the marketplace.

With the Chukchi Sea, ConocoPhillips is a substantial acreage holder, and we continue to plan for a first exploration well in 2012. At this time we are awaiting a decision from the Department of Interior on the status of those leases from the 2008 lease sale. In addition, the Chukchi Sea has now been designated critical habitat for the polar bear, adding more uncertainty to this project. We remain committed to both development of Alaska North Slope natural gas, and exploration in the Chukchi Sea, but these are long-term projects and we think additional focus is needed on the short-term projects.

What can be done? We believe a production tax system that strikes a better balance in a high-price environment and rewards continued investment in fields

like Prudhoe Bay and Kuparuk will result in more oil development and jobs for Alaskans. We will continue to work with federal, State and local agencies to look for more efficient ways to shorten the permitting cycle from discovery to first oil. A solid oil price outlook and a reasonable cost environment wouldn’t hurt either.

New projects create jobs, and 2010 will be a tell-tale year if only a few exploratory wells are drilled. In these difficult times we all need to collaborate to improve the overall business ■ climate in Alaska.

BY BRANDON WALKER Commercial Associate Bond, Stephens & Johnson

REAL ESTATE (COMMERCIAL)

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ast year – 2009 – was a year in which the commercial real estate market was characterized by trepidation spawned from uncertainty about the future of the Alaska economy.

Many would-be buyers were standing by, unwilling to pay asking prices based on the assumption that if the market deteriorated they could get more for their money.

Meanwhile, sellers were relatively comfortable and unwilling to drop rents/prices due to recent appreciation and low interest rates. The result was a relative slowdown in transactions compared to the sharp upward movement experienced a few years ago.

The slowdown in transaction volume was unsettling compared to the

www.akbizmag.com • Alaska Business Monthly • January 2010

upward trends of years past and was perceived by many to be a “softening” of the market, especially when interpreted against the backdrop of the problems experienced in other U.S. regions.

However, any perceived softening was not supported by a significant decrease in rents or prices as most sellers/ owners remain comfortable. Even despite a few visible vacancies the market is near equilibrium, and in some cases may even be undersupplied.

Thus, the market can afford some additional vacancy without creating significant distress for property owners, and when Alaska’s stable employment outlook is included into the mix, it’s difficult to find the ingredients for a substantial downturn in prices or rents.

As we begin 2010, the stability experienced throughout 2009 persists with no apparent sign of departure. Although the downturn in tourism and concerns about oil prices may perpetuate uncertainty for some market participants, these variables will likely continue to slow transaction volume while underlying market conditions should remain ■ stable and healthy.

BY RUSSELL JOYCE 2010 President Alaska Association of Realtors

REAL ESTATE (RESIDENTIAL)

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ost of us in the real estate industry are looking forward to 2010.

We have our fingers crossed, however, that we are not disappointed as the year unfolds. Last year, 2009, was a haphazard year for our practitioners with some doing very well, others struggling and still others leaving the business altogether.

As an industry we are thankful for

stimulus money provided to first-time homebuyers and we believe much of the same must be available in 2010 to sustain similar sales levels. At this writing, it looks like the First Time Home Buyer Tax Credit will be extended and expanded. Coupled with continued low interest rates, we are hopeful for sales to pick up in 2010.

Today and for the past five to six years, we as consumers have become accustomed to interest rates at or lower than 6 percent for 30-year mortgages. We fear rising interest rates as the consumer will not accept rates higher than today’s 4.5 percent to 6 percent mortgage rates.

Also, Alaska has not seen a huge number of foreclosures as elsewhere in the country and we don’t expect that to change in 2010. As long as our economy remains stable we should weather this arena with modest numbers of foreclosures and short-sale properties as compared to the Lower 48.

A rebounding real estate industry is in need of reasonable financing for new construction, commercial real estate and raw land purchases for investors and builders. Changes in lending

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www.akbizmag.com • Alaska Business Monthly • January 2010

criteria have all but dried up money for these important parts of our industry.

If these factors come to pass and spur development in the state, we are hopeful 2010 will bode well for the real estate industry.

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BY RONALD DUNCAN President and CEO GCI

TELECOMMUNICATIONS & TECHNOLOGY

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ommunications infrastructure is critical to our economy. As customer needs evolve, Alaska’s telecom providers are adapting the technology and expanding the network to extend existing services and provide new choices throughout Alaska. We are building the communications infrastructure necessary to support Alaska’s existing economy and more importantly, to diversify into future economies. The question is: What will Alaska do with it?

Five years ago, we would not have predicted that traditional wireline telephone service would be so rapidly supplanted by wireless phones.

Today, being connected no longer means being tethered. With the completion of GCI’s statewide wireless network in 2010, even in the remotest villages, wireless calling will be available and more affordable than wireline service. We will see significantly increased numbers of consumers “cutting the cord” and moving off of wireline services.

Also, 2010 will see continued construction of fiber optic and microwave systems in communities that were once satellite served. Five years ago we assumed anything other than satellite services were economically infeasible in the rural areas. We were wrong. The everincreasing need for high-speed services for both residential and commercial customers has forced us to rethink this basic assumption. Responding to increased demand, we have found new ways to efficiently extend terrestrial connections to remote areas. Within 10 years many rural areas could have full broadband terrestrial infrastructure connecting their communities to the rest of the world.

There’s no getting around the fact that the ways we do business and conduct our personal lives have changed and will continue to change as broadband services, technology and networks evolve. We can look forward in 2010 to an acceleration of that change. But in change, there is always opportunity.

This is especially true for Alaska as we work to connect the whole of Alaska with the rest of the world – bringing ■ the world to our fingertips.

www.akbizmag.com • Alaska Business Monthly • January 2010

43

in the Mat-Su area and another 1.5 million board feet in the Kenai.

Uncertainty over export markets makes precise forecasting for 2010 difficult, but if the markets, shipping and other issues remain relatively unchanged, we expect the private timberland operators to harvest about 100 mbf in Southeast and Southcentral Alaska. ■

BY OWEN GRAHAM Executive Director Alaska Forest Association

TIMBER

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n 2009, the U.S. Forest Service and the State of Alaska worked together on preparing economically viable timber sales in Southeast Alaska. This program has been successful – the pending Logjam Timber Sale on Prince of Wales Island is the initial timber sale prepared under the program. The environmental review of this 73 million board foot (mbf) project is complete and we expect to see the timber sale advertised very soon. However, the actual federal timber sales harvest for the last two years has been only about 25 mbf annually. And, in 2010 the harvest from federal timberlands in Southeast will again be limited to about 25 mbf due to the limited availability of national forest timber sales. A total of only 45 mbf of federal timber has been sold over the last three years in this region where the installed sawmill operating capacity is still in excess of 250 mbf per year.

The State has continued offering timber sales in Southeast Alaska, but, as a result of a revised timberland analysis, it will be lowering its timber sale program in this region from 12 mbf annually to about 8 mbf.

The State expects to sell about 13 mbf in the Interior region where the local sawmills have increased their operations. There also is a strong demand for firewood in the Interior and there is a growing biofuels industry in this region.

The State is currently conducting land-use planning for State lands in the Mat-Su area and it is imperative that plans allocate sufficient lands for forestry operations. The current timber sale estimate for 2010 is only 1.5 mbf

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BY GREG WOLF Executive Director World Trade Center Alaska

TRADE

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or Alaska’s export industries in 2010, a major factor will be the performance of Asian economies, especially China. While Alaska’s export markets have become more diversified in the last 10 years, in terms of dollar value, they are still heavily concentrated in the Pacific Rim. This should bode well for Alaska as Asia is home to the fastest growing economies, and the region appears in relatively better financial condition to lead the developed world out of recession. In their most recent report, the International Monetary Fund projected China, for example, to grow 8 percent in 2010. Meanwhile, they project the U.S. economy to grow just 1.6 percent. Demand for natural resources from rapidly growing countries such as China and India is driving prices higher as they seek to modernize their economies and satisfy the needs of increasingly affluent consumers.

With each passing day, China is becoming more important to Alaska. In 2008, Alaska’s exports to the Middle Kingdom reached $733 million, a new record. This represents a dramatic rise

from 2001 when the state’s exports to China totaled $102 million. China has become the state’s second largest and fastest growing trading partner. I anticipate that commercial ties between Alaska and China will continue to expand both in size and scope this year, and in the years ahead. In the next phase of this relationship, we will see China not only continue to grow as a significant buyer of Alaska export commodities, but also become an investor in Alaska’s natural resource development projects.

Related to Asia’s growing economic prominence, 2010 should be a banner year for the export value of precious metals from Alaska. Gold, in particular, has experienced a dramatic rise in recent months as central banks, hedge funds and individual investors have bid up the price of the yellow metal.

Asian countries that have built up huge reserves of U.S. dollars, based on their export-driven economies, are now seeking to diversify their holdings into non-dollar assets, including other currencies as well as precious metals and natural resources, to protect themselves from a falling dollar.

Alaska is well positioned, offering the right commodities at the right time, to benefit from the current trends of Asian ascendancy and resource scarcity. ■

BY CHRISTINE E. KLEIN Deputy Commissioner and Acting Airport Director Alaska Department of Transportation

TRANSPORTATION (AVIATION)

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laska’s aviation system is the largest, most extensively developed

www.akbizmag.com • Alaska Business Monthly • January 2010

system in the nation. Airports range from simple gravel strips to one of the largest paved runway cargo facilities in the U.S. The State of Alaska owns and operates 256 rural airports, along with the Alaska International Airports System (AIAS), comprised of Fairbanks (FAI) and Ted Stevens Anchorage (ANC) International Airports. Aviation is essential to Alaska’s communities, many of which rely on aircraft as the only means of access – and delivery of mail, food, fuel and medical services.

Beyond access, recent economic assessments indicate aviation is a major economic engine for Alaska, providing more than $3.5 billion and 47,000 jobs to the state’s overall economy.

At 8 percent of Alaska’s gross state product, it’s 40 percent greater than the national average, making aviation the fifth largest industry and employer in the state. A critical component of the economy and vital to Alaska communities, the aviation industry provides jobs in nearly every town and village, large and small across the state.

AIAS serves as Alaska’s primary gateway and hub system. It supports interstate carriers and passengers as well as domestic and international passenger and cargo carriers serving and passing through Alaska. Unlike our smaller airports, AIAS is a business enterprise without state funding. It includes ANC, which is the world’s fifth largest airport for cargo throughput. With the recession, no international cargo carriers were lost; however, reductions in numbers of operations have occurred, directly affecting revenue. In response, FAI and ANC have taken measures to balance operating expenses with earned revenues.

Industry forecasts for international air freight indicate a long, slow recovery taking several years to reach previous volumes.

In planning for the future, our team is focused on ensuring safe airports, stable rates and fees, and looking at innovative ways to build, partner and grow customers. Today’s economy forces airports to be extremely competitive and vigilant in maintaining existing business. This begins with keeping our system strong, competitive and working together collaboratively with all business partners to ensure a bright future. ■

BY JIM BEEDLE Deputy Commissioner Alaska Department of Transportation

TRANSPORTATION (MARINE)

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he staff of the Alaska Marine Highway is excited about the prospects available to us in the coming year. Commencing in 2008, the Administration committed to an annual consistent service level, defined by port calls, to be provided for the next three years.

Supported by early seasonal schedule releases, equitable tariffs and professional customer-oriented staff, AMHS is expecting continued growth in Alaska ridership, even during depressed economic times.

The 3,500-mile service route of the Alaska Marine Highway provides many challenges to the successful operation of a marine transportation system.

The delivery of high-quality, dependable service is essential for growth, and AMHS’s consistent high scores in customer satisfaction, on-time departures and early schedule releases resonates in the form of 21 percent passenger growth between 2005 and 2008.

Our marketing plan reached more than 11.2 million people in the last year.

We updated our Web site and almost a half million people visited the site. Our marketing vision is to enhance awareness of AMHS as a brand offering a unique travel experience.

AMHS commenced operations in 1949 with the M/V Chilkoot providing service between Juneau, Haines and Skagway. Of the current fleet of

11 vessels, three were commissioned in 1963 and are nearing the end of their useful life. The management of AMHS is currently designing the “Alaska Class Ferry” which will be the class of ferry that allows AMHS to succeed for the next 50 years.

AMHS is currently undertaking several fleet-wide capital improvement projects to both enhance the customer experience and provide operational cost savings. AMHS is installing 24-hour satellite service on all its vessels that will enhance vessel communications and provide passenger wireless communications. In addition, we are upgrading fuel-efficiency systems, which will provide for up to 15 percent savings in fuel.

AMHS works hand-in-hand with the Marine Transportation Advisory Board (MTAB). This allows management an avenue to gauge public wants and needs in relation to marine transportation.

Moving forward into 2010 we find economic downturn, but with the strong foundation of dependable, high-quality service priced appropriately we expect the future to bode well for AMHS. ■

BY FRANK RICHARDS Deputy Commissioner Alaska Department of Transportation

TRANSPORTATION (SURFACE)

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he Department of Transportation and Public Facilities (DOT&PF) anticipates 2010 to be a good year for transportation construction. As of October 2009, DOT&PF has nearly

www.akbizmag.com • Alaska Business Monthly • January 2010

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$400 million in projects expected to bid in the next eight months. These projects are funded from GO bond proceeds, previous appropriations and stimulus funds. Additional projects will move to the bid stage as our focus changes from wrapping up the 2009 construction season to planning for next year’s construction.

It is too early to predict what the State’s generally funded capital budget program will be, but we know there are projects funded with GO Bonds and stimulus projects funded through the American Recovery and Reinvestment Act that will be put out to bid in fourth quarter 2009 and first quarter 2010.

In November 2008, voters approved a GO Bond package worth $315 million to fund projects across the state. Those projects are being designed and will move forward toward construction. DOT&PF anticipates bidding about $120 million of the GO bond funds in 2010.

Congress passed the American Recovery and Reinvestment Act (ARRA) in February 2009. The DOT&PF not only met the requirement to have at least 50 percent of the funds obligated

by June 29, 2009, but exceeded it by obligating more projects. Several rutted roads and highways in the Anchorage Bowl have benefited from this funding, including Minnesota Drive and parts of the Glenn Highway. We estimate 30 percent of the $175 million in ARRA funds still needs to be obligated by March 2010 and contracts awarded.

The DOT&PF continues to work quickly to put ARRA funding projects out. Two ARRA-funded projects in Ketchikan are scheduled to bid this winter.

Work in Nome is scheduled to advertise in February, a project in Dillingham bids the following the month.

The one significant unknown is what the new federal transportation funding bill will look like. How will Alaska fare? Early indications are there will be a major shift in focus and consequently in funding toward energy conservation and congestion mitigation in major urban areas. This could result in less federal funding coming to Alaska.

We will be re-building Alaska in

www.akbizmag.com • Alaska Business Monthly • January 2010

2010 with funds from prior efforts. Our future federal and state funding levels are uncertain. Our economy relies on a safe and sound transportation system of airports, highway and ports. Maintaining this system will require a reliable program of funding so we can plan, design and construct the necessary projects to keep Alaska competitive. ■

by the cruise industry. The fact that ships are being redeployed to other markets, including Europe and the Caribbean, means Alaska visitor numbers will decline by 140,000 travelers.

Alaska’s travel industry is hopeful that factors that impacted the 2009 season will moderate in 2010, but we know the reduction in cruise passengers will be problematic.

ATIA believes that a tourism promotion budget in the range of $20 million is imperative in order to be effective and to have a meaningful presence in

the national and international marketplace. The Alaska Travel Industry Association is a strong proponent of a long-term sustainable tourism marketing effort. We have identified a means for reaching $20 million via a travel business corporate income tax credit.

Presently, two similar bills reside in the Alaska House and Senate that would increase the state tourism marketing budget to $20 million. Although it will not completely fix the tourism industry’s challenges it would be one positive step forward.

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BY RON PECK President and Chief Operating Officer Alaska Travel Industry Association

TRAVEL & TOURISM

F

or the past 18 years, the Alaska travel industry has experienced steady growth during the peak season of May through September. In the summer of 1990, the state welcomed 690,000 visitors. By 2008, that number had grown to more than 1.7 million.

Unfortunately, the growth has stopped.

Our estimate for summer 2009 is 1.6 million visitors. The prognosis for the summer of 2010 is just as bleak.

The reason we dropped 100,000 visitors is due to several factors, including Mount Redoubt volcano alerts, H1N1 flu panic, the reduction of allowable halibut catches for sport charter operations in Southeast Alaska, and the global economic crisis that influenced international visitors and Alaska’s target market in North America.

For the 2010 season, the industry is aware that visitor numbers will be down due to announced reductions www.akbizmag.com • Alaska Business Monthly • January 2010

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Photos by Eileen Frey

BY NANCY POUNDS

Back Alley Banned – Heather Resz, Donna Fearey, Eileen Frey, John Lewis, Charlie Rouge, Suzi Fowley Perri, Marilyn Backus, Linda Ziegler, Brett Jokela, Ben Alexander and Terri McCoy – wait in the green room at Wendy Williamson Auditorium to go on stage and play a set of traditional Irish music at the annual Anchorage Folk Festival.

Anchorage Folk Festival Thousands gather to share music and stories.

BY NANCY POUNDS

A

song in the heart is powerful. In fact, the cure to the winter blues could be bluegrass, rock, Irish and big band music found at the Anchorage Folk Festival, held for the 21st year this month.

“We need that in January,” said Brett Jokela, Anchorage Folk Festival board president. “The festival encourages all levels and all ages. We want all of Anchorage to be infused with the idea that making and sharing music and stories is a way to enjoy our winter city and appreciate our neighbors and the diverse cultural traditions that exist throughout our community.”

Jokela first attended the festival in the mid-1990s, when he participated in a workshop. In 2000 he performed with friends on stage.

“We had a great time,” he said.

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Jokela plays the mandolin with the Midnight Sun Zombies and guitar with the Irish music group Back Alley Banned. He has been working on the board of directors for the past three years.

The event runs Jan. 21 to Jan. 31 at the University of Alaska Anchorage Wendy Williamson Auditorium. The festival features many free workshops and performances by local musicians. Two special-guest bands will perform each weekend of the festival and participate in workshops.

Brother Mule of Victor, Idaho, will perform Jan. 21 to Jan. 24. The acoustic trio of fiddle, bass and mandolin won the Indie Music Award’s Best Americana CD in 2005. Sweet Sunny South of Paonia, Colo., an old-time string band, will participate in the festival Jan. 28 to Jan. 31.

www.akbizmag.com • Alaska Business Monthly • January 2010

HISTORICAL SIGNIFICANCE The festival started in 1989. â&#x20AC;&#x153;A handful of local Anchorage fiddlers and folk singers saw a need for an event to share their passion,â&#x20AC;? Jokela said.

One original participant and music teacher, Mary Schallert, encouraged her students to perform in the festival. Now some of those musicians perform with popular area bands such as Bearfoot.

He quoted Schallert to describe the festivalâ&#x20AC;&#x2122;s significance to the community: â&#x20AC;&#x153;The Anchorage Folk Festival is one of the only community events in Anchorage where people of all ages are doing something meaningful together.â&#x20AC;?

throughout the two-week event. An all-volunteer crew coordinates the multifaceted event.

NEW BANJO COMPETITION Organizers added a five-string banjo contest this year, with no entry fee. â&#x20AC;&#x153;Iâ&#x20AC;&#x2122;m sure weâ&#x20AC;&#x2122;ll get some good players,â&#x20AC;? Jokela said.

The winners of the old-time and bluegrass categories will perform on the main stage Jan. 30. Dick Sanchis, owner of the Arctic Roadrunner restaurant, suggested the banjo contest and offered to sponsor the event. He hosts a monthly bluegrass jam at his eatery.

PERFORMANCES & WORKSHOPS

VARIETY & TALENT

This yearâ&#x20AC;&#x2122;s festival will feature some 600 local performers, from single performers to large ensembles such as the Alaska Button Box Gang with 16 accordions. The 900-seat Wendy Williams Auditorium is typically packed for the special guest performers. Main stage local performances run two Thursday and Friday evenings and the two weekends.

About 30 workshops are conducted on both weekends.

Workshops offer various instructions, for children or adult beginning musicians to more advanced players. Dances and late-night jams are key elements of the festival.

Also, Folk Week performances are held at smaller venues in Anchorage, Eagle River, Wasilla and Palmer.

Jokela estimates about 10,000 people participate

Jokelaâ&#x20AC;&#x2122;s favorite aspect of the festival is hearing the variety of music and talent of local performers. â&#x20AC;&#x153;The festival provides a focal point for wintertime artistic endeavors, whether you are a dancer, singer, instrumentalist or storyteller,â&#x20AC;? Jokela said. â&#x20AC;&#x153;Performers from professional caliber to fledgling children and adults share the stage for their own 15 minutes of fame. And if the performance is not to your liking, just wait a few minutes and the next act will be sure to move you.â&#x20AC;?

Performances and workshops are free and open to the public; dances and other â&#x20AC;&#x153;special eventsâ&#x20AC;? are designated fundraisers with entrance fees. Visit anchoragefolkfestival. org for more information. â?&#x2018;

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www.akbizmag.com â&#x20AC;˘ Alaska Business Monthly â&#x20AC;˘ January 2010

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J A NUA RY E V E NT S C A L E NDA R •••••••••

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Wildlife Wednesdays at the Zoo

The popular “Wildlife Wednesdays” free science lectures moved from the Loussac Library to the Zoo Gateway Building. Lectures start at 7 p.m. every second Wednesday. For more information, visit www. alaskazoo.org, phone 907-346-2858 or e-mail klarson@alaskazoo.org.

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U.S. Cross Country Ski Championships

Sponsored by ConocoPhillips, the national championships return to Anchorage’s Kincaid Park, where the top skiers in the U.S. compete for the title of nation’s best. For more information, phone 907-2767609 or go online to www.anchoragenordicski.com.

8 to 10

Crystal Gallery of Ice Carving Competition

The event will be held in Town Square with teams from Anchorage and Fairbanks. Ice carvers create lovely carvings with “Arctic Diamond” ice from Fairbanks, while competing for cash prizes. Come watch the ice come to life and bring your ice skates and enjoy the Town Square Ice Rink. For more information, visit www.anchoragedowntown.org.

14 to 24

Cyrano’s Theatre Company

Wind Blown and Dripping premiere by Peter Porco is an exciting and compelling story based on the great mystery writer Dashiell Hammett’s years in WWII Alaska when he was stationed in Adak editing the post newspaper. For more information, visit www.cyranos.org or phone 907-274-2599.

Pride of Alaska

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Experience the Anchorage Symphony’s world premiere of a work commissioned and inspired by the Anchorage Museum’s Permanent Collection. Plus, Alaska-grown double bass virtuoso Paul Sharpe, returns to delight his hometown with a Carmen Fantasy for Double Bass and Orchestra. For more information, visit www.anchoragesymphony.org or phone 907-274-8668.

18 to 22

Alaska Marine Science Symposium

The 2010 symposium will be convened at the Hotel Captain Cook in Anchorage. Scientists from Alaska, the Pacific Northwest, the nation and beyond will gather to discuss their research in the large marine ecosystems of the Arctic, the Bering Sea and the Gulf of Alaska.

Updates and additional information will be posted as available at: http://www.alaskamarinescience.org.

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Imago Theatre’s ZOOZOO

Imago Theatre will populate the stage with characters and beings such as comedic amphibians, acrobatic larvae, circus boulders and more. ZOOZOO brings frogs, rabbits, penguins, hippos and other creatures in a show promising the best of Imago’s family friendly theatre. Held in the Atwood Concert Hall at the Alaska Center for the Performing Arts. For more information, visit www.anchorageconcerts. org or phone 907-272-1471.

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Anchorage Wedding Fair

The sixth annual Wedding and Home Lifestyle Fair has vendors of all types for the largest wedding fair in Alaska. Held at the Dena’ina Civic and Convention Center. For more information, phone 907-275-2263 or e-mail cherie.curry@anchoragemediagroup.com.

www.akbizmag.com • Alaska Business Monthly • January 2010

J A NUA RY E VE N TS C A L E N D AR •••••••••

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A I R B A N K S •••••••••

Joel’s Place

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Open daily to young people ages 10 to 20 years old. Indoor skate park, music venue and youth center offers activities and a place to be for creative, adventuresome, adrenaline-seeking youth. Meal served each evening. Joel’s Place is located at 1890 Marika Ave., Fairbanks. For more information, visit www.joelsplacealaska.org or phone 907-452-2621.

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I R D W O O D • • • • • • •

Winter Trails Day

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Explore the snowy meadows, rainforests and trails of Girdwood’s Glacier Valley. Learn to cross-country ski on groomed trails, or snowshoe backcountry single-track. Fun-filled day will introduce you and your family to easy-to-learn winter sports for FREE. Alyeska Resort is providing FREE cross-country ski and snowshoe rentals. Pick them up at the Alyeska Mountain Shop located on the second floor of the Hotel Alyeska from noon to 1 p.m. on Winter Trails day. Join Alaska Backcountry Access on a FREE tour of nearby trails, meadows and attractions at 1 p.m.

Maps, skis, Atlas snowshoes and information provided noon to 1 p.m. at the Alyeska Mountain Shop. Attractions may include gold panning, an igloo visit and more. Bring cameras and warm layers for this active adventure. Find more information at www.alyeskaresort.com.

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Telluride Film Festival

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Sponsored by Community Schools of Homer, 7:30 p.m. at the Mariner Theatre. For more information, contact Mike at 235-6090.

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Perseverance Theatre’s Eurydice

8 to 31

On her wedding day to Orpheus, Eurydice trips and falls into the depths of the underworld where her memories are washed away by the river Styx. When Orpheus finds her, she must choose between following him back to life or remaining with her dead father. Eurydice abounds with plot twists, quirky humor and an original musical score created especially for the Perseverance production. Friday through Sunday performances begin at 7:30 pm. Check online for preview, matinee or pay-as-you-can performances. Tickets are available online at www.perseverancetheatre.org or by phone at 907-364-2421.

2010 AARP Day in Juneau

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AARP and the Juneau Community Council will present a day of seminars and workshops on issues of interest to Juneau area residents including Financial Management, Tax-Aide, Widowed Persons Service, Wise Up on Medications, Driver Safety, Home Modification and many others. This event will be held from 10 a.m. to 6 p.m. at the Centennial Hall Convention Center located on 101 Egan Drive.

• • • • • • • • •

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O D I A K • • • • • • • • •

Russian New Year and Masquerade Ball

Enjoy a dinner with many varieties of Russian food followed by a masquerade ball with dancing and judging of the costumes. Unmasking takes place at midnight. More information is available the Chamber of Commerce or the Kodiak Island Convention and Visitors Bureau located at 100 Marine Way or phone 907-486-4782. ❑ www.akbizmag.com • Alaska Business Monthly • January 2010

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KEYBANK T. J o h n N e l s o n was hired as branch m a n a g e r fo r t h e KeyBank’s Palmer location at 1150 S. Colony Way. Nelson previously served as a regional leader with Primerica Financial Nelson Services. He has 20 years of experience as a small business owner and more than five years in banking and finance.

Iraq where he served with the United States Air Force Reserve at Kirkuk Regional Air Base. Shaw is a traditional reservist with the 477th Civil Engineer Squadron at Elmendorf Air Force Base.

RIM DESIGN

Barbara Cash earned the Leadership in Energy and Environmental Design Accredited Professional designation. Cash is president and chief executive of RIM Design. She has 35 years of commercial interior design experience.

DENALI ALASKAN MORTGAGE

Jeffrey Hase joined Denali Alaskan Mortgage as a senior loan originator. He has worked as a home loan consultant in various aspects of mortgage lending.

CROWLEY MARITIME CORP.

Charlie Nalen was appointed general manager of Crowley Maritime Corp.’s Valdez operation. Nalen joined the company in 1980 and has held several positions. He comes to Alaska from Jacksonville, Fla.

KAKIVIK ASSET MANAGEMENT LLC

Scott Torrison was appointed interim president and chief executive of Kakivik Asset Management LLC. Torrison has most recently served as chief operating officer of Bristol Bay Native Corp. Kakivik is a subsidiary of Bristol Bay Native Corp.

URS CORP.

Paul DePalatis joined URS Corp. as a senior planner. He most recently served as president of DePalatis Associates in Rancho Mirage, Calif. Kristen Marsh rejoins the company as an environmental scientist. Marsh spent one year in the Mexico City office where she worked as a biologist responsible for World Bank environmental compliance reviews, environmental impact analysis and feasibility studies. David Shaw also rejoins URS. He recently served an eight-month deployment in

NAC CAN make air cargo easier!

V E S

Hase

ALASKA INDEPENDENT INSURANCE AGENTS AND BROKERS INC.

The Alaska Independent Insurance Agents and Brokers Inc. selected its board of directors.

They are: R. Douglas Shaffer, Associated Insurance Services, Anchorage, president; David Bohan, Patterson Insurance Brokers Inc., Anchorage, president-elect; Peter Mores, Shattuck and Grummett, Juneau, vice president; Stephanie Green, Homer Insurance Center, Homer, secretary/treasurer; and John Grummett, Shattuck and Grummett, Juneau, national director. Directors are Susan Erickson, Petersburg-Wrangell Insurance Center, Petersburg; Nancy Boeshart, Malone Insurance Agency, Bethel and Bobby Hanson, Hale and Associates, Fairbanks. Suzy Baird of M.J. Hall & Co. of Alaska of Anchorage is associate director.

COMPILED BY NANCY POUNDS DENALI ALASKAN FEDERAL UNION Alfredo Calugay was promoted to retail sales branch manager at Denali Alaskan Federal Credit Union’s Abbott branch. Calugay has worked for Denali Alaskan since 2007.

Calugay He most recently served as branch sales supervisor at the Abbott branch.

SOUTHEAST ALASKA REGIONAL HEALTH CONSORTIUM

Dr. Jessica Scott joined The SouthEast Alaska Regional Health Consortium as part of its permanent medical staff at the Ethel Lund Medical Center in Juneau. Scott, a Tlingit who grew up in Kake and Juneau, earned her medical degree from University of Washington School of Medicine in Seattle. Scott is the fourth Alaska Native medical provider on staff at the Ethel Lund Medical Center.

UNIVERSITY OF ALASKA FAIRBANKS

Chuck Crapo received the 2009 Earl P. McFee award from the Atlantic Fisheries Technology Conference. Crapo is an Alaska Sea Grant Marine Advisory Program seafood scientist at the University of Alaska Fairbanks School of Fisheries and Ocean Sciences. The award recognizes the Alaskan’s commitment to seafood science and dedication to the fishing and seafood industry. He joined the university in 1983 and helped the industry develop new products and improve quality standards for Alaska-caught seafood.

To serve you even better, Northern Air Cargo announces NAC Can – a new program designed to improve customer service and make shipping with NAC easier than ever before.

• Faster drop-offs and streamlined pickups.

• Individual kiosks for small packages, oversize, and general freight.

• Dedicated service agents for custom shipping solutions.

Who can make air cargo easier for Alaska? NAC Can!

800.727.2141 907.243.3331 www.nac.aero 52

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CRW ENGINEERING GROUP LLC

Wende Wilber of CRW Engineering Group LLC earned certification as a certified Professional Tr a n s p o r t a t i o n Planner. She is one of only 229 planners certified in the Wilber United States by the Transportation Professional Certification Board. Rebecca Campbell earned certification as a Professional Traffic Operations Engineer.

Matthew Edge earned certification from the International Municipal Signal Association as a Work Zone Traffic Safety Specialist.

USKH INC.

Five employees at USKH Inc. were selected as associates: Jake Gerondale, Janet Benson, Melody Franklin, Elaine Martin and Wendy Davis. Gerondale has worked three years for USKH. She is the Anchorage survey manager.

Benson is the executive assistant to USKH’s president and vice president, has been with the company for more than five years. Franklin has been with USKH since 1997 and is an administrative assistant based in Fairbanks. Davis, who also works from the Fairbanks office, has been with USKH for four years. Davis serves as a project administrator. Martin works from the Spokane, Wash., office in the accounting department and has been with the company for three years.

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ALASKA COMMUNICATIONS SYSTEMS GROUP INC.

Vadapalli

Anand Vadapalli was appointed to chief operating officer for Alaska Communications Systems Group Inc. He most recently served as executive vice president of technology and operations. He has worked for ACS since 2006.

HANSON ALASKA LLC

Shane Ferrell joined Hanson Alaska LLC as a civil engineer. His current work includes conceptual design Port MacKenzie Rail Line Extension with the Alaska Railroad Corp. Ferrell earned Ferrell a master’s degree in civil engineering from Michigan Technological University.

CENTER FOR ALASKAN COASTAL STUDIES

Dave and Kathy Harnum were honored as volunteers of the year by the Center for Alaskan Coastal Studies. They were recognized for their work at the Wynn Nature Center, the Peterson Bay Field Station and the center’s headquarters in Homer.

NANA MANAGEMENT SERVICES

Eric Fox was promoted to vice president of operations for NANA Management Services’ camp services division. The division provides support services to the oil and gas industry on the North Slope and in Anchorage, as well as at Red Dog Mine operations. Fox most recently served as vice president of strategic planning.

ALASKA NATIVE TRIBAL HEALTH CONSORTIUM

Carrie Brown was hired as the new director of the Healthy Alaska Natives Foundation with the Alaska Native Tribal Health Consortium.

Brown previously served as senior vice president and chief Brown administrative officer of the First Alaskans Institute.

WESTERN ENTERPRISES INC.

Anchorage resident Robert Moats was recently named as a property manager of Western Enterprises Inc., an Alaska corporation with divisions specializing in construction and development, commercial property management and real estate. Moats has been an employee since 2001, and has worked in each of the company’s field departments. He’s been a real estate licensee for two years and was recently appointed to the Western Enterprises Inc. board of directors. ❑

Did someone in your company receive a promotion or award? Please submit information, for possible inclusion in Right Moves, to editor@akbizmag.com. Information received is published, space available, two months after receiving the press release.

Right Moves is compiled by Nancy Pounds of Anchorage.

www.akbizmag.com • Alaska Business Monthly • January 2010

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OIL & GAS

How Petroleum Has Transformed the Alaska Economy

©Roman Krochuk

Trans-Alaska oil pipeline bridge crossing Tanana River near Delta Junction.

Many underestimate extent of oil’s contribution.

BY SCOTT GOLDSMITH

E

veryone agrees petroleum is an important driver for the Alaska economy, but most Alaskans do not realize how different our economy would be without petroleum. Recent research at the Institute of Social and Economic Research of the University of Alaska Anchorage has produced

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some surprising new indicators that quantify the role petroleum has played in the growth and development of the Alaska economy.

Two-thirds of the growth of the economy since statehood can be traced to the petroleum industry. The economy would be about half of its current

size if the petroleum resources of the Cook Inlet and North Slope had not been developed. One-third of all jobs can be traced, directly and indirectly, to petroleum production and the public revenues it produces. And finally, nearly the entire State general fund operating budget has been financed

www.akbizmag.com • Alaska Business Monthly • January 2010

Those booms have now passed, revealing that in spite of attempts to diversify the economy, we are still highly dependent on petroleum.

If we are to maintain the strong economic performance we have grown to expect, the petroleum industry will need to play an important role. by petroleum revenues for 30 years.

It is critical that Alaskans understand the role that petroleum has played in the transformation of the economy since statehood and its importance today, because production peaked 20 years ago and has now fallen to only one-third of that level.

Expansion of some other economic drivers – mining, tourism and air cargo – has offset a small part of the decline. But it has mostly been good fortune – the run-up in the price of oil and other commodities, a decade long boom in federal spending and a booming U.S. economy – that has served to temporarily shield our economy from the consequences of that precipitous decline in production.

Those booms have now passed, revealing that in spite of attempts to diversify the economy, we are still highly dependent on petroleum. If we are to maintain the strong economic performance we have grown to expect, the petroleum industry will need to play an important role.

Although high oil prices, federal spending and a booming world economy have diverted our attention from declining production, there are two other reasons why Alaskans tend to underestimate the contribution of petroleum to the economy.

First, unlike tourism or commercial fishing, most petroleum exploration, development and production takes place in the remote northern part of the state, far from the population centers, so we just do not see it. Second, most

Alaskans have no memory of a time when petroleum was not driving the economy, so we have no basis for judging how much difference it has made in our economic lives.

ONE-THIRD OF JOBS FROM PETROLEUM PRODUCTION AND REVENUES The oil companies directly employ only about 3 percent of the total work force, but more than 40,000 Alaska jobs are supported, directly and indirectly, by their spending. They purchase billions of dollars of services and materials from other Alaska businesses that provide everything from transportation to construction, to camp support services to the oil companies. In addition, oil industry wages are the highest in the economy and represent a significant source of household purchasing power.

As these company purchases and wages circulate through the economy, additional jobs are created in almost all industries of the economy.

The revenues collected by State and local governments from petroleum production and income pay for a large share of our public services. In particular, almost the entire State general fund operating budget comes from petroleum taxes and royalties. These revenues pay the wages of about 30,000 State and local government workers.

And as these wages circulate through the economy, another 20,000 privatesector jobs are also created.

When we add in the considerable economic boost from the Permanent Fund dividend – financed by petroleum royalties – the total number of jobs attributable to petroleum activities is more than 100,000, or about onethird of all jobs in the economy. These are the jobs that would disappear if all petroleum industry activity were to cease and the Permanent Fund were to disappear. The job loss would span all but a handful of industries and reach into all regions of the economy.

PETROLEUM SPECIAL CHARACTERISTICS But the importance of petroleum cannot be measured only by the job loss if the industry were to disappear tomorrow. Three important characteristics of the industry – stability, size and value

907.278.1877

www.akbizmag.com • Alaska Business Monthly • January 2010

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Our fleet of ATV’s are an investment toward protecting the environment and supporting the petroleum industry in its effort to explore and develop Alaska’s Arctic Regions.

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added – have generated benefits for our other resource industries and support businesses that have transformed the Alaska economy by further contributing to job growth.

STABILITY Petroleum has reduced the seasonality of the Alaska economy. This stability has fostered growth of businesses providing goods and services locally.

Almost all the 100,000+ petroleumrelated jobs generated by oil company spending, government spending and the dividend are year-round. Employment in the oil patch varies little between the summer and winter seasons, as does employment in the public sector. This is in sharp contrast to the jobs created by the tourism and seafood industries, the other large resource sector employers. Both are highly seasonal with most employment concentrated during a few months in the summer.

The year-round stable employment from petroleum has allowed local serving businesses to put down roots and prosper. Without that stability, it is difficult for supporting businesses to cover their costs. This is evident in communities in Alaska that depend exclusively on tourism, like the Denali park region, or fishing, like Dillingham. In those places where employment is concentrated over a few summer months there are few year-round jobs in supporting businesses. And of the supporting businesses there in the summer, many close up for the winter months.

SIZE Size matters. The economic multiplier is larger because of petroleum.

The 100,000+ petroleum-related jobs have increased the size of the Alaska economy by one-third. The larger market has brought opportunities for new businesses, more competition among existing businesses, economies of scale and lower costs of doing business. The larger market can support a wider variety of businesses serving other businesses and consumers.

The larger market and availability of goods and services locally provided means that new dollars that come into the economy from whatever source circulate in the economy longer before

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Public revenues from petroleum have lowered the tax burden on other businesses and provided funds for economic development that have benefited every sector of the economy and enhanced job growth. leaking out. This is reflected in an increase in the size of the multiplier due to the presence of the petroleum industry.

VALUE ADDED Public revenues from petroleum have lowered the tax burden on other businesses and provided funds for economic development that have benefited every sector of the economy and enhanced job growth.

Through 2008, the State of Alaska has collected $141 billion in revenues (measured in 2008 dollars) from petroleum production – a significant portion of the value added created from production; $35 billion has been saved – deposited in the Permanent Fund and Constitutional Budget Reserve. The majority – $106 billion – has been spent, divided about evenly between reduced taxes for households and businesses and increased public spending (compared to the U.S. average).

We are all aware of the light tax burden we enjoy as individuals – no state personal income tax and no state sales tax. But the lighter tax burden has also been a benefit for Alaska businesses, increasing their profitability and consequently their level of operations. Without petroleum revenues, we would be asking our other economic drivers – mining, seafood, tourism, air cargo – to shoulder a larger share of the cost of providing basic public services.

These other economic drivers have also benefited from higher public spending. Some of that spending has directly targeted business development such as financial support for road construction to a mine. Although most of the higher spending cannot be

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www.akbizmag.com • Alaska Business Monthly • January 2010

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linked directly to economic development efforts, it has helped to reduce the cost of doing business and increased economic opportunities. For example, a port project reduces the costs of moving goods into and out of the state for our resource industries and education spending increases the quality of the local work force.

It is hard to say exactly how many more jobs Alaska businesses provide today because of the light tax burden and higher public spending due to petroleum revenues. But if we are to believe industry statements about the burden of taxation and legislative statements about the economic development benefits of the State budget, that number must be considerable. Without petroleum, those jobs would also disappear.

The bottom line is that petroleum has helped build the other basic sectors of the economy and has also contributed to growth in the support part of the economy. We estimate that the jobs benefits from the stability, size and value added from petroleum, together with the 100,000+ jobs from production, revenues and the dividend, account for two-thirds of the growth since statehood.

ALASKA WITHOUT PETROLEUM Without petroleum, we would have been dependent on growth of our other resource industries and the federal government. Growth of those sectors would likely have been slower without the boost from petroleum and growth in the support sector jobs would also likely have been slower.

What would the economy have looked like today without petroleum?

Probably not that much different from when Alaska became a state. At that time it was small, thin, seasonal and poor. Of the 90,000 jobs, half were attached to the federal government, either military or civilian activities. There were twice as many private-sector jobs in the summer as in the winter. Because of that and the low per capita income – 10 percent to 20 percent below the U.S. average – there were few local businesses supporting the resource industries or households. Infrastructure was underdeveloped and there was limited revenue-generating capacity to build any.

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There would have been growth without petroleum. The number of jobs might have doubled, driven largely by growth in federal spending, mining, seafood and tourism. But we would only have had half the jobs we currently have. And the economy would still be dominated by the federal government that would account directly and indirectly, for more than half the total. Tourism and fishing, both highly seasonal, would be the largest privatesector economic drivers, together accounting for about one-third of all jobs.

Mining and air cargo might round out the portfolio of economic drivers.

MAINE? The economic history and current economic condition of Alaska in the absence of petroleum might be similar to that of Maine, a state with many similarities to Alaska except without petroleum. (On the other hand it has a number of advantages not enjoyed

by Alaska.) Maine’s economy has struggled since the 1960s with slow job and wage rate growth, slow population growth and an aging population. Whereas Alaska gross product per capita ranks near the top among the states, Maine is near the bottom.

Maine households receive on average less in wages, pay more in taxes and enjoy only about half the level of public services of the average Alaska household. And, of course, they do not receive a Permanent Fund dividend.

of the importance of petroleum to the economy, it would be a mistake to ignore the opportunity that the petroleum industry still represents for Alaska. ❑

Professor Oliver Scott Goldsmith

Fortunately even though Alaska has produced 17 billion barrels of oil, there are still billions more – both in known fields and estimated – as well as large deposits of natural gas. These resources can support a strong petroleum industry in the state for decades to come.

It will not be easy to develop these additional resources. Nor is it possible to forecast the jobs and other economic benefits that could flow from their development. But based on this analysis

About the Author Professor Oliver Scott Goldsmith has been a faculty member of the Institute of Social and Economic Research (ISER) since 1975, and was Institute Director from 2001 to 2005.

ISER is a public policy research institute within the College of Business and Public Policy of the University of Alaska Anchorage.

Professor Goldsmith’s research interests include regional economics, Alaska fiscal policy and energy policy. He is the principal author of the ongoing Fiscal Policy Papers series, which examine the fiscal implications of the dominance of petroleum in Alaska’s tax base.

In 2006, he was the recipient of the Edith R. Bullock Prize for Excellence, presented by the University of Alaska Foundation.

Professor Goldsmith is a native of Chicago, graduated from Princeton and earned a Ph.D. in Economics from the University of Wisconsin, Madison after serving in the Peace Corps in Malaysia. Contact him at 907-786-7720 or afosg2@uaa. alaska.edu.

THE FUTURE As we look to the future it is important to recognize how the size and strength of the economy has depended on petroleum. Alaska businesses have benefited from an expanding market, low taxes and public expenditures.

Alaska households have benefited from high wages, low taxes and public expenditures.

Because of that dependence, declining petroleum production presents a challenge to Alaska. Will we be able to maintain the economy we have grown accustomed to? Experience has shown that the strategy of economic diversification – building up our other natural resource industries – can only partially offset the effects of a declining petroleum industry. www.akbizmag.com • Alaska Business Monthly • January 2010

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MINING

Alaska Mining Industry Optimistic Support services essential to long-term growth.

Photos courtesy of Last Frontier Air Ventures

BY HEATHER A. RESZ

Last Frontier Air Ventures on a prepared drill platform in the Alaska Range.

said David Sell, with Evergreen Helicopter. “It’s not going down. It’s going up. As long as the price of gold stays high there will be exploration in Alaska.”

After 10 years of steady growth, gold prices topped $1,000 in February 2009 and had climbed to $1,100 by mid-November 2009.

Executive director of the Alaska Miners Association, Steve Borell said 2010 looks better than 2009, but mining exploration isn’t likely to rebound to recent record-breaking levels.

The mining industry saw historic high spending in 2007 – $329.1 million – and 2008 – $328.6 million, according to the Alaska Division of Geological and Geophysical Surveys. Though 2009 spending was down significantly from those record levels, at $125 million it was still the fourth highest year on record.

On the production side, gold mining reached its second highest production year since 1916. Two mines – Fort Knox and Pogo Gold Mine – produced 84 percent of Alaska’s total 800,752 ounces of gold in 2008. That’s nearly an 11 percent increase from 2007.

Total gold production in Alaska – and the mining support services industry that supports it – will likely get a bump in 2010, after Kensington, the state’s third large gold mine, begins production late in the year.

Alaska’s gold production already equals about 10 percent of the nation’s total output.

Forecasts for base metal projects are less robust, according to Curt Freeman, a Fairbanks-based geological consultant and owner of Avalon Development.

F

2010 Alaska mining season. The biannual Interior Conference is in Fairbanks March 9-12.

“This year will be better than last,”

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olks at the Alaska Miners Association’s 2009 Convention and Trade Show Nov. 2-8 in Anchorage were optimistic about the

“If you have a base metal project, other than a large copper project like Pebble, the markets are dead as a doornail,” he said. “Demand has slowed, supplies are still up and although lead, zinc, copper, nickel, etc., are all up from their lows in the fall of last year, they are still well below the highs we saw in 2007 and early 2008.”

Freeman said that means even highquality projects such as Niblack, Palmer and 40-Mile are flying holding patterns, waiting for prices to recuperate.

LAST FRONTIER DEPENDS ON MINING Much of the work that keeps Last Frontier Air Ventures, at Mile 81 of the Glenn Highway, flying is in support of mineral exploration, according to company president and director of operations Dave King.

Though the company’s three Astar 350B2 Aircraft fly support for industries as varied as oil, mining, science foundations, State and federal agencies, film companies and tourism, King said he relies on mining for 60 percent of his business.

Last Frontier flies out of King’s 160-acre homestead on the Matanuska River. He bought the land, a small sawmill and a D7 Cat and started carving out Last Frontier from scratch. In 1997, the company took flight with one helicopter flying support for a mineral exploration project.

In addition to flying helicopter support for numerous major exploration companies, the company also does heliskiing, tours and works on many film and TV projects, including the Discovery Channel’s “Out of the Wild” and “Blue Planet” series, feature films like “Guardian” and the Sean Penn film “Into the Wild.”

Last summer was the first time Last Frontier worked with a new airborne geo-technology called ZTEM. The helicopter carries the equipment, which does deep-earth surveys of the ground below.

King said the airborne geotechnology was used to explore several of the largest claim areas in the Bristol Bay mining district in summer 2009.

“At this time, our projected work load appears to be headed for steady growth,” he said. www.akbizmag.com • Alaska Business Monthly • January 2010

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Last Frontier Air Ventures helicopter with the ZTEM base on a survey site in Western Alaska.

The Pure Nickel MAN Project near Paxson is one of the reasons for his optimism. An alliance with ITOCHU will provide funding for the next several summers of work on the project, King said. He’s optimistic that will also mean flying work for his company.

King said the company needs three different projects each summer to be comfortable financially.

In 2007, the company had six fulltime exploration contracts. Compare that to summer 2009 with one part-time and one full-time contract.

Similarly, Last Frontier had contracts with NOVA Gold for 2006, 2007 and 2008 for 80 to 120 days of flying. In 2009, the same company booked 30 days of flying.

“We’re hoping many past clients will be returning to exploration mode in the 2010 season,” King said.

Because of Alaska’s size and the remoteness of most exploration sites, he said air transportation is often one of the biggest costs for companies.

King said in addition to projects like Pebble and Donlin, many companies have already invested hundreds of millions of dollars with no guarantee they will ever see a bar of gold poured.

“I love where we are positioned at this time, and am optimistic for increased prosperity for future mining and exploration in our state,” he said.

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ANCSA IS GOOD FOR MMINING Before the U.S. Congress passed the Alaska Native Claims Settlement Act and the related Alaska National Interest Land Conservation Act in the 1970s and 1980s, nearly all of Alaska was open to mineral entry, but little of the land was in private hands.

The settlement act transferred 44 million acres to the Alaska Native corporations it created. Borell said Alaska Native groups sensibly selected land with known mineral wealth.

“ANCSA is the most important piece of mining legislation that has passed in the last 100 years because it placed the ownership of minerals in private hands,” he said.

Mining jobs also offer good pay and benefits to people who live in rural Alaska, he said.

“Ultimately they will find projects in remote locations where they will be creating long-term year-round quality jobs,” Borell said. “It’s more than jobs.

It gives people hope and a purpose.”

Alaska’s economy can be divided into thirds: one-third is oil and gas related; one-third is federal; and, onethird is everything else. The mining industry generates a 3 percent slice of the state’s economic pie, Borell said.

“We have a very small industry, but its seen steady growth over the past 20 years,” he said.

W h e n Pr e s i d e n t D w i g h t D .

Eisenhower signed the Alaska Statehood Act in 1959, there were just 700,000 acres or so of private land in Alaska.

Fifty years later, the federal government still holds 283 million of Alaska’s total 373 million acres, according to the Alaska Department of Natural Resources.

Getting the minerals to market is complicated by access and energy issues, even when world-class deposits of in-demand minerals are discovered on land open to mineral claims, Borell said.

Donlin backers estimate the deposit contains 30 million ounces of gold, and could produce more than 1 million ounces of gold per year during its lifetime.

Pebble is a copper-gold project in the Bristol Bay region that is estimated to contain 94 million ounces of gold.

But both Donlin Creek and Pebble most either mill the ore at the remote sites and fly out the minerals recovered, or, build roads so the raw ore can be shipped out for processing elsewhere.

Processing the ore on-site requires huge amounts of electricity, Borell said, but neither project has yet announced how it will generate the as much as 700 megawatts of electricity needed.

LARGE MINING OPERATIONS GROWING Most precious metals mining in the U.S. shut down during World War II to focus on base metals like lead, zinc, iron, nickel and copper.

After the war, some mining resumed.

Except now the U.S. had more base metals capacity than the market could handle and so nobody was exploring for more, Borell said. And in the precious metals market, the price of gold was $35 an ounce, he said.

Some mines were no longer profitable that had been before the war, Borell said.

Eventually, the capacity on the base metals side began to be used up and the price of gold increased.

In Alaska, that’s about the time of the enormous oil field in Prudhoe Bay was discovered, which changed the playing field tremendously, Borell said.

Before a pipeline could be built to move the oil to market, questions about Alaska Native land ownership had to be

www.akbizmag.com • Alaska Business Monthly • January 2010

Opening five large mines in the past 21 years is a significant accomplishment. â&#x20AC;&#x201C; Steve Borell Executive Director Alaska Miners Association resolved. ANCSA resolved questions of ownership and allowed the pipeline project to move forward.

When ANILCA passed a decade later, Usibelli Coal Mine and Valdez Creek Mine were the only large mining operations in the state. In 1989, Greens Creek began in February and Red Dog began in November. â&#x20AC;&#x153;They proved to the world that it was possible to permit a mine in Alaska,â&#x20AC;?

Borell said. â&#x20AC;&#x153;It was a wake-up call.â&#x20AC;?

Now Alaskaâ&#x20AC;&#x2122;s mining support service industry works with five large mines â&#x20AC;&#x201C; Usibelli, Red Dog, Greens Creek, Pogo, Fort Knox â&#x20AC;&#x201C; and a sixth, Kensington, is expected to begin production later this year. And two smaller operations â&#x20AC;&#x201C; Nixon Fork and Rock Creek â&#x20AC;&#x201C; are idle, but hope

to resume operations in the future.

Opening five large mines in the past 21 years is a significant accomplishment, Borell said. But thatâ&#x20AC;&#x2122;s just scratching the surface in terms of Alaskaâ&#x20AC;&#x2122;s promising mineral deposits, he said.

High gold prices have also encouraged investments to prolong productivity at Fort Knox, Kensington and Pogo mines. â&#x20AC;&#x153;Thatâ&#x20AC;&#x2122;s good news for support services such as helicopter companies, remote camp services and drilling companies,â&#x20AC;? Borell said.

EDUCATION PROGRAMS EXPAND TO TRAIN FOR MINING JOBS In Alaska, skilled core drillers and millwrights who provide support to the mining, and oil and gas industries are in such high demand that the University of Alaska added training programs.

Prince William Sound Community College had a booth at the bi-annual mining event in Anchorage to get the word out about its new distancedelivered millwright program.

Now students who complete the first two levels of the millwright program in

high school can continue through all five levels of the National Center for Construction Education and Research curriculum through the University of Alaska, according to Alan Sorum, director of training at Prince William Sound Community College. â&#x20AC;&#x153;Millwright is one of the highdemand jobs in oil and gas, mining and power,â&#x20AC;? he said.

The program began offering classes this semester to help fill a shortage of qualified millwrights. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re hoping to get ahead of demand,â&#x20AC;? Sorum said. â&#x20AC;&#x153;If any one of these projects gets off the ground, weâ&#x20AC;&#x2122;ll be behind.â&#x20AC;?

Some businesses like Kensington Mine are creating their own registered apprenticeship program to grow their own millwrights, he said. The State and federal government are investing heavily in registered apprenticeships as a tool to develop a highly skilled work force. Apprentices are well paid to learn a trade, he said. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s harder to get kids into the trades,â&#x20AC;? Sorum said. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re trying to get them interested in high school.â&#x20AC;? â?&#x2018;

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65

LAWYER SPEAK

Flu Now, Pay Later?

A workplace guide to H1N1 swine flu.

BY JEFF WALLER

H

ow many businesses will be exposed to liability from the manner in which they handle employees infected with the H1N1 virus, commonly called swine flu?

In our ever-litigious society, if a customer sees that a sick employee constantly wiping his runny nose did not use hand sanitizer before serving the customer’s family, and then soon afterward the customer’s child contracts swine flu, which causes substantial medical bills or death, who is the customer going to sue for damages? If an expectant mother learns about an outbreak of swine flu at a particular business that she frequented prior to becoming seriously ill, will she demand that that business pay damages? How much business will be lost because of absenteeism as swine flu spreads through employees? How many work injury claims will result? Will infected employees who are not sent home infect other individuals at a job site and lead to possible liability?

PRECAUTIONS NEEDED

For the swine flu season, businesses will need to establish the appropriate precautions to address infected employees, reduce any spread of the disease through its employees, avoid exposing customers to infected employees, but also ensure that the business’ precautions do not go so far as to cause injury to their own employees. The purpose of this column is not to provide specific advice, but to draw attention to possible situations, taking into account the already evident severity of H1N1. Considering the great variety of businesses, employers and circumstances in Alaska, nothing can be a substitute for advice from your own attorney for your unique situation.

LETHAL FLU

H1N1 swine flu is recognized as a potentially severe illness and has resulted in many deaths, with a surprising amount of the deaths occurring in people age 25 to 64 and in pregnant women. In October 2009, President Obama declared the H1N1 swine flu outbreak a

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are free from recognized hazards. It also allows one employer to possibly be held liable for injury caused to the employees of another employer when working at a common job site. The idea is that if employer A creates or allows the hazard to exist, which then exposes employer B’s employees to the hazard (and the hazard causes harm to B’s employees), employer A could be held liable. Hazards can come in all shapes and sizes and arguably would include a known, potentially serious disease like the H1N1 virus, swine flu.

ACT IN REASONABLE MANNER

©2010 Chris Arend

Jeff Waller

national emergency. At this same time, the Centers for Disease Control had already reported 292 deaths from H1N1 in the United States, which was later revised to 1,004 deaths. According to the CDC, 33 percent of deaths were in people aged 25 to 49, and 32 percent of deaths were in people aged 50 to 64. These age groups cover a substantial portion of the working population. The CDC also reported the H1N1 virus in pregnant women has caused early labor, severe pneumonia and death. The New York Times reported 100 pregnant women infected with H1N1 required intensive care and 28 had died. CNN reported that among H1N1 swine flu deaths, 6 percent were pregnant women. Considering that on average approximately 1 percent of the women in the United States are pregnant at any given time, the increased numbed of deaths for pregnant women indicates a greatly increased risk for women in this category.

SWINE FLU AS WORKPLACE HAZARD

Alaska law requires an employer to furnish employment and a place of employment that

In addition to obligations to their employees, businesses are required to act in a reasonable manner to protect their customers from recognized dangers. This does not mean that businesses are required to guarantee a customer’s safety, but it is not so far-fetched to imagine a situation where a family is being assisted by the business’ employee. The business knows the employee has H1N1 swine flu, but the business has decided to let the employee serve customers, thereby knowingly exposing a customer and family to the disease. If a lawsuit is filed and the business’ actions with regard to letting the infected employee serve customers is determined to not be reasonable, and assuming that the family can establish by a preponderance of the evidence (more than 50 percent) that the victim contracted H1N1 swine flu from the business’ employee, liability could be established.

Examined in another fashion, would a business allow an employee to bring dangerous materials to work to expose co-employees, employees from other companies, or its customers? This principle could hold true for any highly infectious disease. How many parents with their children in daycare would sit idly by and allow a daycare center to expose their children to tuberculosis? Or after exposure, allow the daycare to escape liability?

www.akbizmag.com • Alaska Business Monthly • January 2010

TAKE PREVENTIVE MEASURES

As preventive measures, businesses can distribute hand sanitizers, put up posters listing symptoms and generally remind employees of appropriate hygiene. Hand sanitizer dispensers can be given to each employee or be placed in break rooms, workrooms and other areas where employees commonly come into contact with items handled by other people.

Posters listing H1N1 swine flu symptoms advising the employees to stay home or seek medical treatment if one or more of the symptoms are present can be obtained and posted in prominent areas like break rooms. Also, it probably would not be a bad idea to put up reminders of those things we were all taught as a child: cover your mouth when you sneeze or cough, wash your hands often and especially after sneezing or coughing.

The CDC recommends that if an employee becomes ill, the employee should notify his or her supervisor and stay home except for needed medical attention. Employees who have an underlying medical condition or who are pregnant should call their health care provider for advice, because they might need to receive influenza antiviral drugs. Additionally, employees with a fever should remain home for at least 24 hour after their fever has gone.

Employees with ill family members at home with the flu may come to work, assuming the employee is not displaying any symptoms, like fever, sore throat, runny nose, aching muscles, shortness of breath or cough, diarrhea or vomiting. Clearly, infected employees should stay home until the flu has run its course.

Los Angeles Times, millions of dollars were paid in damages to the individuals and their families.

While businesses want to reduce absenteeism from illness, no one wants to require preventive care that could directly result in injury or loss of life. Such decisions are typically best left to each individual.

The clear indication is that businesses will need to recognize that precautions and actions are need to address the effects of H1N1 swine flu on their own employees and the individuals that their employees may come into contact, including employees of other employers and customers. Employees can be educated about

symptoms, how to avoid spreading the disease, staying home and seeking appropriate medical attention upon experiencing H1N1 ❑ swine flu symptoms.

About the Author Jeff Waller is a senior associate attorney at Holmes Weddle & Barcott P.C. in Anchorage. His practice includes litigation, construction law, employment law, insurance defense and real estate matters.

Prior to becoming an attorney he owned and operated several businesses.

OPTIONAL FLU SHOT

While the CDC also recommends flu shots, it appears that most employers have limited their position on this issue to encouragement, but have not gone as far a recommending or demanding that their employees obtain flu vaccinations. As a form of encouragement, some employers have waived any co-pay requirements under employer-provided insurance.

The decision not to require that every employee be vaccinated appears to be a choice based upon avoiding liability or damages arising from any vaccination side effects that in the past have allegedly included life-long disabilities and death. Thirty-three years ago people rushed to be immunized for swine flu, but the vaccinations supposedly resulted in 25 deaths and the development of Guillain-Barre Syndrome in approximately 500 more individuals. Guillian-Barre Syndrome is an autoimmune disorder affecting the peripheral nervous system, usually triggered by an acute infectious process. According to the www.akbizmag.com • Alaska Business Monthly • January 2010

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HR MATTERS

Reduce Employee Theft Be proactive. Not reactive.

BY ANDY BROWN

T

he numbers are staggering. The U.S. Chamber of Commerce estimates 75 percent of all employees engage in some type of theft against their employers and at least half of those who engage in theft do it repeatedly.

The Department of Commerce says estimates that employee theft costs employers between $40 billion and $400 billion each year. The range is so wide because 75 percent of all employee theft goes undetected. The problem is so extreme the FBI calls employee theft the fastest growing crime in America. Add the fact that employee theft can be traced to one-third of all business failures in the United States and the magnitude of the problem is clear.

Employee theft is a broad category. It’s not just cold hard cash, but also supplies and equipment. Loss of supplies, equipment and inventory is called shrinkage and in a 1998 University of Florida study, Loss Prevention executives attributed 42.7 percent of their annual shrinkage losses to employee theft.

Theft, however, includes more than shrinkage and tangible goods. Employees can also steal time by improperly reporting sick leave and vacation or intellectual property and confidential information such as product design or customer lists. Theft can also include actions that hurt employer-employee good will like overcharging clients and pocketing the extra cash.

WHY EMPLOYEES STEAL

While research has shown several reasons why employees steal, money or financial motivation is nowhere near the top of the list. In fact, of the top 10 employee concerns, money or salary concerns rank ninth. Employees do not steal because of need. Strange as it may seem, study after study confirms the simple truth that most employees who steal do so because the opportunity presents itself and they have little fear of discovery.

While opportunity is key, there are factors that push employees to act. Low morale leads employees not only to steal, but also

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©2010 Chris Arend

Andy Brown

lowers productivity. When an employee feels wronged or mistreated they may steal when the opportunity arises. Likewise, when an employee feels they are underappreciated for the work they do, theft can follow. If a company has no punitive consequences or policies for theft, employees may steal because they think that they won’t be punished. Similarly, poor inventory control or a lack of preventative measures can be an open invitation to steal.

10-10-80

Although not scientific, some research suggests that 10 percent of employees will not steal no matter the opportunity, a second 10 percent will steal no matter what you do and the remaining 80 percent will steal depending on how they rationalize a given opportunity.

Naturally, you want to hire the 10 percent that will never steal and avoid the 10 that will try to steal. The challenge facing employers is removing the opportunity and rationale for the bulk of the work force.

REMOVE OPPORTUNITY, KEEP EMPLOYEES HONEST

Opportunity essentially comes down to three things: procedures, employee autonomy and perception. Your procedures should provide checks and balances with inventory, cash, time cards, etc. This eliminates the opportunity for an employee to circumvent only one level of protection. Have the extra layers and let your employees know you have extra layers. If you review time cards, tell your employees that you review time cards for accuracy. If they know someone checks their work regularly, they are less likely to “fudge” the numbers.

When employees have a high level of autonomy, consistent oversight is a must. The employee that works alone or at a remote location with little or no supervision has incredible opportunity for theft. Random checks and redundant monitoring systems can limit opportunity for theft.

The more employees believe they will be caught, the less likely they are to steal.

This perception is vital. You can promote this perception through effective training. Communicate an anti-theft message clearly to all hires early and often and tell your employees what is expected from them. Let them know what theft is – not only outright stealing, but also things such as taking a long lunch break without approval, using sick leave when not sick, doing slow or sloppy work, or coming to work late or leaving early. Meet with employees regularly to ensure they understand their roles, responsibilities and are not having problems. Finally, train ALL your employees to recognize theft – this can reduce opportunity.

KEEPING OUT THE WRONG 10 PERCENT

Effective hiring promotes an honest work force.

It costs you the same money to hire a good employee as it does to hire a bad employee, and a bad employee will cost more in the long run so spend the resources and get the right one. When you hire, always perform background checks before the final decision. This

www.akbizmag.com • Alaska Business Monthly • January 2010

should include criminal history, civil history, driver license violations, contacting previous employers, references and any schools that the applicant claims to have attended.

Consider using dishonesty tests to weed out the people more likely to steal. Consider running credit checks on prospective employees, as people with financial difficulties are more prone to fraud. In order to do this, you are legally required to notify the job applicant in writing that a credit report may be requested. You also need to receive the applicant’s written consent. If you are filling a position that will handle money frequently, a credit check should be a priority.

Interview prospective employees more than once. This helps you weed out less serious applicants, who may be more likely to steal. This also gives you the time to ask the more serious and personal questions about their background.

WHAT HAPPENS WHEN THEFT OCCURS

When employee theft is discovered, you feel violated and often want to react out of emotion.

Don’t. Not only can you cause more problems, but also you could potentially open yourself up to other liability. Remember this is a business

problem and addressing it in that frame of mind will produce a faster resolution and help prevent more theft.

First, review your processes. Remember, theft is almost always due to an opportunity, find where the employee took the opportunity and remove it. What checks and balances do you have? Did they fail or were they circumvented? The problem may be worse than expected and the fallout could be significant.

Above all, NEVER have one person in charge of finances. This is almost a prescription for theft. If you run a small business with only one or two employees, use an outside auditor to review books and have the books open for review to prevent theft. If you do not trust your other employees to review the books, that is a good sign you do not have the right people working for you.

Do not accuse an employee of theft before an investigation is complete and even then, be cautious. The word “theft” implies an intent to steal and employers who throw around the term can get into hot water.

Whenever you do find evidence of employee theft, do not wait before starting an investigation. The longer you wait, the more theft can occur and the more other employees see the damage being done.

Prompt investigations send the message that theft is not tolerated and that you are watching – reducing opportunity.

Above all, be honest with your employees. They will reciprocate. It’s hard to expect your employees to be honest if you aren’t honest. Your example as a manager or employer goes a long way toward creating a workplace free from theft. ❒

INVESTIGATIONS

About the Author Andy Brown J.D., MPA, labor and employment attorney, is a HR consultant with The Growth Company in Anchorage. Brown has more than 16 years of broad-based human resources experience.

If you have legitimate suspicions, you should conduct an investigation. Legitimacy comes from evidence and not from gossip or another employee’s “hunch.” You need to be impartial and if you can’t, get someone who can.

Large employers often have a manager from a separate division investigate, if you are small, consider bringing is an outside investigator.

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Photos cour tesy

of the Alaska Ra

ilroad Corp.

CONSTRUCTION

Above left: The Alaska Railroad Corp. is using its $25.8 million share of federal stimulus money to improve its facilities and enhance passenger safety. First-phase renovations of the historic Ship Creek depot in Anchorage, including track work on its north side, took place last summer.

Above right: The ARRC’s track rehabilitation program will replace wooden ties with longer-lasting concrete ties, particularly on curves that get more wear and tear.

Left: With 26 dedicated science berths, the Alaska Region Research Vessel will be able to accommodate more than 500 researchers and students annually and spend as many as 300 days at sea.

Graphic courtesy of the ARRV Project.

ARRA Stimulus Funds Alaska’s $1.2 billion share.

BY TRACY KALYTIAK

S

Delivery of the vessel is anticipated in mid-2013, with science operations beginning in 2014. Whitledge expects 300 to 500 scientists a year will come north to ride the vessel and conduct research in the Arctic Ocean and Bering, Chukchi and Beaufort seas.

“We only have a small window in mid- to late-spring to early fall when we can go out and take samples,” Whitledge said. “Seven to nine months of the year, we’re having to basically make pronouncements about what’s going on without being there most of the time.

That hampers us a lot in knowing how the ecosystem works when we’re only there less than half of the seasons.”

ARRA stimulus grants, contracts and loans are being used in Alaska to do such things as build or modernize rural housing, improve the quality of drinking water and wastewater treatment, buttress education-related funding and upgrade highways and rural airports.

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www.akbizmag.com • Alaska Business Monthly • January 2010

ince 1973, scientists in Alaska have dreamed of researching the ocean and creatures that live in it while aboard a ship hardy enough to withstand the pounding of winter storms and maneuver through icy conditions.

Now, 36 years later, $1.48 billion flowing from the American Recovery and Reinvestment Act of 2009 will realize that dream. The grant for construction of the 254-foot Alaska Region Research Vessel is the highest-dollar award among Alaska’s approximately 1,000 grants, contracts and loans.

“These are research vessels that belong to a national fleet that universities and university institutes and programs can use to study oceanography,” said Terry Whitledge, principal investigator on the project, who is a professor and director of the Institute of Marine Science, University of Alaska Fairbanks.

“It seems like a lot, but a research vessel is a very complicated machine.”

A Nome hospital project is receiving a large infusion of the federal money, as are the Alaska Department of Education, a Detroit-based company building military housing, the State Department of Transportation and the Alaska Railroad Corp.

President Barack Obama on Feb. 17, 2009, signed ARRA into law. The $787 billion recovery package was designed to jump-start the economy to create and save jobs, according to www.recovery.gov. The Web site provides statistics and an interactive map detailing stimulus money recipients and expected jobs created or saved.

Alaska recipients are receiving 1,006 awards – contracts, grants or loans – worth a total of $1.2 billion, and creating or saving an estimated 2,314.83 jobs.

The bulk of Alaska’s stimulus money is coming in the form of grants, a total of 702 worth $914.7 million. Contracts – 302 of them – constitute just over

$322 million of the stimulus money and 491.09 saved or created jobs, according to recipient reports on the Recovery. gov Web site. Alaska recipients also are slated to receive two loans worth a total of $233,650, but with no jobs created or saved.

Agencies are reporting a total of 977 contracts, grants and loans for Alaska, worth a total of $1.4 billion, with 565 grants, 317 contracts and 95 loans.

The $148-million grant for the ARRV tops the list of projects slated for more than $10 million, according to the Recovery.gov list.

Other projects listed as receiving more than $20 million include: ■ A $90.5 million contract for Inuit NCI joint venture, through the Department of Health and Human Services, for construction of the Norton Sound Regional Hospital in Nome. The new 150,000-square-foot facility will be a three-story, steel-frame structure with 14 inpatient beds. The project, according to federal stimulus documentation, is expected to create or save three jobs, and is less than halfway completed.

■ A $62.3 million grant for the State Department of Education, which will reportedly create or save 91 teaching or support staff jobs and be used to support public elementary, secondary and postsecondary education, as well as early childhood education programs and services. Just under $32 million of that money will be parceled out to Yakutat City and Borough, as well as school districts in the Pribilof Islands, Anchorage, Nenana, Petersburg, Craig, Wrangell, Dillingham, Glennallen, North Slope Borough, Sitka, Chevak, Delta Junction, Kodiak, Ketchikan, Juneau, the Kenai Peninsula, Fairbanks and Mat-Su. Paul Prussing, deputy director of the Alaska Division of Teaching/Learning Support, said 33 school districts applied for stimulus money. “Of those 33, 25 have been approved. The remaining districts have yet to apply.” Prussing said the education department is hoping to receive another $30 million in stimulus funding sometime next year.

Some districts are performing small repair projects in addition to buying books and educational materials; others have used the money to prevent the need for layoffs.

“It runs the full gamut,” Prussing said. “The full spectrum is kind of what we’re seeing. There are some upgrades to technology, staff hirings, minor building repair, new curriculums and training, professional development for their teachers.”

Districts have until Sept. 30, 2011, to spend their stimulus funds, Prussing said.

■ Lakeshore Engineering Services Inc., a company located in the Detroit area, received a $49.3 million Department of the Air Force contract to demolish 72 units and one garage complex at Eielson Air Force Base and construct 76 military family housing units with all necessary amenities and supporting facilities. The project includes site preparation, garages, energy-conserving features, parking, patios, privacy fencing, and supporting infrastructure of roads, utilities, recreation areas, landscaping, asbestos removal, and demolition, stimulus documentation stated.

The project will generate 1.5 jobs and is less than halfway completed, stimulus documents stated.

■ The Alaska Department of Transportation received several hefty stimulus grants, including one $6.5 million grant that will be used to help pay for a $38.5 million reconstruction of Kotzebue’s badly storm-eroded Shore Avenue and seawall.

Pounding surf and sea ice have narrowed Shore Avenue to fewer than two lanes.

“In rural Alaska, there is a very high pedestrian population. A third of our community walks,” said Lisa Coyle, DOT construction engineering manager for the western district, who lives in Nome. “On Shore Avenue, there’s only one lane open for drivers and pedestrians, very unsafe conditions.”

Shore Avenue will be paved, and new sidewalks, a pathway, parallel parking and an open space on the seaward side will be put in. An erosionprotection stone facing will be built to protect the sea side.

The project is costly because all the construction materials will have to be barged in, including 75,000 tons of dirt, 2,000 tons of armor stone, and enough concrete and other materials to pave a two-lane road extending approximately 4,400 feet and install

sidewalks, curbs, gutters and boat ramps.

“About the only local resource we can employ is the labor,” said DOT project engineer Blaine Galleher. “Everyone understands the cost of doing business on this scale, unless they’re farther east than the Canadian border.

When they opened the bids, I was surprised. I would have thought the cost would have been 20 percent more.”

Galleher said this season was spent mobilizing equipment and materials so workers can get started early next season – perhaps in late April. He anticipates hiring approximately 50 people to work on the project.

Galleher, Coyle, and Neil Strandberg, assistant project engineer for DOT, said the work will proceed all next season and into 2011.

■ The Alaska Railroad Corp. received $25.8 million to fund its so-called Implementation Plan. The ARRC’s list of stimulus-approved projects includes installation of a second track at the Fairbanks intermodal depot; installation of Americans with Disabilities Act-compliant depot restroom facilities in Seward and Talkeetna; initiation of a second phase of Anchorage Ship Creek improvements, including design, exterior, mechanical and electrical upgrades; providing an alternate electrical power source in Seward, to reduce train idling; installation of wheel impact load detectors, to enhance passenger safety; monitor seven of the ARRC’s 142 wayside locations for track integrity, load, avalanche and hot wheels, to improve the railroad’s collision-avoidance system; rehabilitate the tracks by buying and installing 200,000 linear feet of rail and 50,000 ties; erect security fencing at the Ship Creek intermodal facility and conduct hydrology and final engineering in preparation for a major rail realignment in Nenana.

Bruce Carr, ARRC’s director of strategic planning, estimates it will take two years to complete the work listed in the Implementation Plan.

“You had to have all the environmental work done,” Carr said, of why the selected ARRC projects were best suited for stimulus funding. “You couldn’t use (stimulus money) for planning, environmental work. You had to have a project ❑ that was ready to go.”

www.akbizmag.com • Alaska Business Monthly • January 2010

71

FILM

Alaska TV in the Making Trio turns dreams into reality and has huge plans for Alaska television.

BY DEBBIE CUTLER MANAGING EDITOR ● “Halfway There,” a unique and refresh-

ing look at the oftentimes hilarious side of corrections. The sitcom is set in a town hundreds of miles from anywhere. Halfway is a federal residential corrections facility on a five-year quest to rehabilitate inmates back into society. Currently there are four scripts written and ready to roll in a monthly episode.Youth to age 35 appeal to this show, typically.

● “Scared Scriptless Improv,” a comedy

Photo by Kirsten Gregoire

group that is known statewide and is now bringing their humor to television. The first filming was in November for a weekly TV show coming out this month. It’s a PG13 production for a teen and older audience.

Halfway There cast photo.

I

f dreams could make money then the three owners of Anchoragebased Upper One Studios would be rich.

Rick Mallars, Tom Karpow and Jason Martin are three amigos who live the life many of us would love to: taking risks, working hard, pursuing passions and seeing sometimes the future is more than dollars in the pocket for the moment.

And they are taking flight.

Formed in 2008 by Mallars and Karpow, Martin joined the duo in late 2009.

“Upper One Studios was created with one purpose and one goal,” said Mallars. “To bring quality all-Alaska video productions to the great state of Alaska. Our motto is – The Lower 48

72

can have the rest, but Alaska has the Upper One!” Their programming is filmed and produced by Alaskans, with Alaskans and for Alaskans, and currently three shows are in production or being aired.

● “Late Night Alaska,” a mostly non-

scripted comedy variety talk show hosted

by Bob Lester, a DJ from 106.5 KHWL. The show mirrors Saturday Night Live with a unique Alaska flavor, and packs it full of Alaska humor, local politics, music from local bands and musical legends, dancing and more. It is filmed live at Alaska’s famous Chilkoot Charlie’s, with scripted spots interspersed, and regular features such as “Where’s Taquito.” There are also fake commercials. Demographics show those ages 18 to 55 are the main audience.

Upper One Studios has partnered with KACN Channel 38 (analogue) and local GCI cable Channel 95, utilizing their broadcast capabilities to place their programming in favorable time slots to both urban and rural Alaskans.

Both “Late Night Alaska” and “Halfway There” were hoped to be aired by press time, with “Late Night Alaska” on Friday, 10 p.m. to 11 p.m., prime time for weekends. There are also plans to air reruns on Channel 1 from noon to 3 p.m. weekdays. They’ll soon be on Dish Network, statewide. In addition, they have a full feature film called “Probation” being shopped around Hollywood, with hopes it will soon find a slot on national TV. “We’re not just talking the old traditional outdoor shows and the tired nature programming that everyone else is doing,” said Mallars. “We’re talking TV shows, sitcoms, talk shows, business spotlight programming and shows that demonstrate to the rest of the world that REAL filming and REAL programming can actually be done here and that the people who actually live and work here can make that happen.

www.akbizmag.com • Alaska Business Monthly • January 2010

VOLUNTEER CAST The cast for their productions is large and all volunteer, at least for the moment, said Mallars. There is an agreement that they may be paid later as the shows become more successful and turn profit.

Volunteers were selected, in part, from a joint audition with another firm for a Lower 48 production. “These amazing people showed up,” said Mallars. “They just kind of knocked our socks off with their abilities. We’re building this troop of people and talent pool and all are very excited about being a part of the projects.

Why work for free? “They just want to be involved in something special,” said Mallars. “Take Scared Scriptless for instance. There’s a lot of people in there who do plays. You do it because you like to act, be around people with similar interests. We say ‘look this is a nonpaying project with a lot of great talent behind it, would you be interested in joining up and see how goes?’

Haven’t had anyone say ‘no’ – 110 percent – I’ve heard them say ‘absolutely.’”

The pilot episode of Late Night Alaska has already been filmed live at Koots, just before Halloween.

“We completely packed the place out,” said Mallars. “I remember starting filming and I turned around and there were just wall-to-wall people.

And it was amazing, there was this huge energy in the crowd and it just took off. I felt like we weren’t ready, weren’t ready, weren’t ready, weren’t ready and then it was just ‘we’re here.

We’re doing it.’”

IN THE FUTURE They have several other programs in the planning stages, including “Successful Neighbors,” about local businesses and Alaskans who give back to the community in some way, and “Alaska Fitness Show,” which is a version of the “Biggest Loser,” only Alaska-based.

They hope to eventually produce fulllength major feature films.

“It’s something we’d really like to do,” said Mallars. They are looking at funding sources for future productions, as well as sponsorships and inkind donations. There has been even national interest.

“We believe in partnering with longtime Alaska businesses and lifelong Alaskans that can add the very flavor to our productions that we need to make them the best we can,” said Mallars. “By the ‘best,’ we simply mean not only interesting to the people who

live here, but also entertaining and fun for those Alaskans who are now living in the Lower 48 looking for that little taste of home.”

They also have a huge Web presence, with Webisodes of all shows available. For samples, type in “Halfway There a Sitcom” in the search engine on the Internet. There are past shows available for viewing, as well as interviews with cast members called “Inside Halfway There.”

“One of neat things about Web, we have a Facebook group, just word of mouth, that just went wildfire,” added Martin. “We had one member one day, 10 the next, 100 the next and we are now up to 1,600 (mid-November).

“One of the neat things Facebook brought to ‘Halfway There’ and ‘Late Night Alaska’ was the number of Alaskans, and even those not in Alaska, who want to see these programs. Some say ‘man, I miss Alaska,’ or ‘It’s so neat to see friends I know from Alaska’ or places in Alaska where they’ve been.

They’re making connections.”

All footage is also available on You Tube.

Links to Upper One Studios and antics and shows include: www.upperonestudios.com www.halfwaytherealaska.com www.late nightalaska.comhhtp:// www.facebook.com/home.php?#/ group.php?gid=166506638773 (for “Late Night Alaska”) hhtp://www.facebook.com/home. php?#group.php?gid=106437612033 (For “Halfway There”) ❑

Photo courtesy of Upper One Studios

“We don’t need a full Hollywood crew and we don’t need millions of dollars to entertain people. We simply need Alaska.”

“That’s my experience with everything Upper One has done,” added Martin, also founder and director of Scared Scriptless. “It starts out as a spark and then just explodes.”

Things are happening so fast, so quickly conceptually, it sometimes overwhelms the trio. But their focus is still the same, just bigger gears on where they want to go.

Their ultimate goal in two years is having their own full-fledged studio where they can run and produce shows, picking and choosing topics as they please, and not have outside interference,

Late Night-Alaska---Bob.

www.akbizmag.com • Alaska Business Monthly • January 2010

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EDUCATION

University of Alaska Enrollment Up Economy, recruitment efforts responsible.

BY HEIDI BOHI Photos courtesy of the University of Alaska Anchorage

UAA graduates celebrate at the 2009 Commencement ceremony.

W

hile the recession is partly responsible for driving up college tuition in Alaska and nationwide, at the same time it also is responsible for boosting the enrollment at these same academic institutions.

At first glance, it’s enough to make you recoil. The cost of goods is rising, there are record high gas prices, the stock market is down, there is a historic housing slump, and unemployment numbers continue to rise. Across the board everyone is cutting back, whether its annual vacations or health care. Why then – as four-year public colleges are raising annual tuition and fees by an average of 6.5 percent to $7,020, not including room, board and other expenses – are students deciding this couldn’t be a better time to spend thousands of dollars on college?

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An aerial view of the University of Alaska Anchorage campus.

FINANCIAL AID FACTOR ‘‘A lot is driven by families seeking financial aid,’’ says Saichi Oba, associate vice president for Student and Enrollments Services at the University of Alaska. ‘‘More people apply for financial aid and that equals more students applying for school admission,’’ he says, adding that as of the end of September 2009, the UAA Office of Student Financial Assistance reported an 18 percent increase in applications for financial aid. Current students are also making the decision to stay in school longer, because there is no reason not to – given the current unemployment rates. While the waning economy means Americans are spending less and saving more, the record number of students also indicates that they are willing to shoulder the cost of college tuition in hopes of better job security.

At UAA and systemwide, the numbers are significant, Oba says. Collectively, the University saw a 4.4 percent increase, which translates to 1,200 students spread out among the main campuses in Anchorage, Fairbanks and Juneau, along with satellite schools at other communities. In secondary education, too, Alaska continues to be more protected than states Outside, because the budget climates are so different.

Although the university has increased tuition, over a 10-year period, the bump has been 30 percent less than at its peer universities in the Pacific Northwest.

The strategic plan UAA 2017 states that “driving Alaska’s social and economic development through education and training for work force development in high-demand careers” is a priority.

In the 2008-09 academic year, UAA

www.akbizmag.com • Alaska Business Monthly • January 2010

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A group of students walking near the newly remodeled Cuddy Hall on UAA’s Anchorage campus.

The UAA/APU Consortium Library is a gathering place for students, staff, faculty and members of the community.

The UAA Quad with Rasmuson Hall in the background.

An Alaska Native Science & Engineering Program student giving a presentation.

conferred 1,555 degrees and certificates in high-demand fields. Part of the university’s reason for wanting to increase enrollment is because increasing its capacity allows it to serve all students.

RECRUITMENT STRATEGY For each campus, the recruitment strategy is different and deliberate, Oba says, so it is not accurate to say that only the economic crisis is driving the movement. In February 2009 his office got the first indication that the fall 2009 semester would be better, as a result of carefully tracking the Free Application for Federal Student Aid (FAFSA). The U.S. Department of Education FAFSA office ensures that all eligible individuals can benefit from federally funded and federally guaranteed financial assistance for education beyond high school.

“We watched the numbers go right through the roof,” he says. “We were hoping for 3,000 enrollments, and by the end of February we had 4,000+, and by the time it was all said and done, we had about 5,300 students,” which is a record number.

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HIGH-TECH ANCHORAGE In Anchorage, the largest of the three main campuses, enrollment has consistently gained about 3 percent (408 students) annually over the past six years, resulting in the highest head count of 20,255 students and the most credit hour numbers, even when other campus numbers have been flat. First-time, full-time freshmen at UAA increased 22 percent, adding 381 more students, and 50 percent of UAA’s student body is comprised of traditional-aged students, ranging from 18 to 24, which marks a big increase over previous years, Oba says. Preliminary opening numbers for the 2009 fall semester showed significant increases at two of UAA’s community schools – Kenai campus enrollment is up 21 percent (331 students) and the Mat-Su campus is up 12 percent (161 students).

Besides the economic recession’s effect on increasing enrollment numbers, recruitment strategies tailored to the population bases serving each campus are critical to the increasing enrollment numbers. It is very purposeful how campuses go after populations,

Oba says. “They don’t just sit on their hands waiting for someone to show up.”

In the 2008-09 academic year, the percentage of students returning to UAA full-time increased slightly from 43 percent to 44 percent. To foster this growth, UAA is focusing on moving to a digital online environment as part of its effort to serve the population base there, which responds primarily to high tech, Oba says.

PERSONABLE FAIRBANKS The University of Alaska Fairbanks (UAF) is a prime example of how effective well-staged recruitment efforts work for each of the campuses. Enrollment increases seen at UAF today are the result of recruitment efforts launched about seven years ago. “The economy helps, but these main administrative units have to be very deliberate or the gains we see will not be as dramatic,” Oba says.

As the second largest campus, Fairbanks has an enrollment of 10,467 students, and is another example of how recruitment efforts must reflect the local population’s desires. This campus takes

www.akbizmag.com • Alaska Business Monthly • January 2010

a different approach to recruitment, which is based on a more relationshipintensive model, Oba says, where representatives from UAF visit more high schools and college fairs, make personal phone calls to prospective students, and spend more one-on-one time with them. Although it is more expensive and is based on a long-term approach, it has proven to be the only effective way to increase the numbers at UAF. This is because the demographics are different than Anchorage – where service is more important – which also has the advantage of being able to draw from the Anchorage Bowl. Among Fairbanks students, feeling like they have a personal relationship with UAF is what compels them to enroll. It is very effective, Oba says, and this year the numbers increased by 6.5 percent, or 560 students.

UAA Dental Hygiene students practice their skills in their newly remodeled clinic.

CONGENIAL JUNEAU Similar to Fairbanks in its approach, the University of Alaska Southeast (UAS) in Juneau invests in relationship-based recruitment campaigns to reach the local population. The hands-on, personal approach is based on outreach that includes UAS representatives getting to know the students, their schools and families. Recruitment representatives call every student admitted from enrollment services and many hear from them more than once. Other premiums may include offering free mileage to bring students into Juneau from remote Bush communities. This strategy is even more effective than the one used by the two larger, sister campuses, Oba says.

This year’s enrollment figure of 3,971 students represents a 10.4 percent increase for 2009, which amounts to just more than 300 students.

COMMUNITY COLLEGES Community college enrollments have always been considered countercyclical and tend to rise as the economy worsens. Flexible classes, open-enrollment policies and a high concentration of worker-training programs also make community colleges a popular option for those worried about the job market. Community colleges are also considerably less expensive than four-year institutions, averaging $6,750 dollars per year for

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full-time students, compared with $9,800 for four-year public colleges.

According to the American Association of Community Colleges, nationwide summer enrollments were also up with overall numbers of 11.5 million, which is expected to increase again.

The biggest growth areas included online courses and worker retraining, which again underscores schools’ relationships with the economy. Most online students take “hybrid” classes taught partly online and partly on campus, so they don’t have to drive to school every day and they have more flexibility for work.

PRIVATE COLLEGES Worried about pricing out recessionbattered families, nationwide tuition at private institutions climbed a modest 4.4 percent, according to the National Association of Independent Colleges and Universities (NAICU), the lowest increase in 37 years. At the same time, these same schools increased grant aid

About two-thirds of all college students receive grant aid, reducing tuition bills by more than half.

by 9 percent. This year, the annual average cost to attend college is $22,000 a year. While battling decreased endowments and budget cuts, they are more aggressively recruiting students, offering incentives and limiting tuition increases by making cuts to areas such as construction and renovation, salaries and travel, to offset the expenses. As a result, private schools, too, are reporting record, or near-record enrollments.

“I’m confident the colleges have used every tool available to them to create access for students,” Ed Moore, NAICU president says. “Otherwise, our numbers wouldn’t look the way they look.”

Although private universities are competing with the less expensive community colleges and public universities, many of these schools are crowded, so public institutions are appealing to these students by offering scholarships and financial aid, as well as smaller classes and campuses, and a higher studentadvisor ratio. Private schools boosted financial aid by about 9 percent. About two-thirds of all college students receive grant aid, reducing tuition bills by more than half. Federal tax credits can cut the costs even more. In many cases, students who applied to colleges for the 2009-10 academic year actually received more financial help than the previous year’s applicants. ❑

www.akbizmag.com • Alaska Business Monthly • January 2010

EDUCATION SIDEBAR

A

BY HEIDI BOHI

O.T. Doctorate â&#x20AC;&#x201C; The UAA-Creighton connection.

s part of the University of Alaskaâ&#x20AC;&#x2122;s continuing efforts to reduce the shortage of health care professionals statewide, it recently partnered with Creighton University to launch a distance-learning program aimed at addressing the stateâ&#x20AC;&#x2122;s critical shortage of occupational therapists.

In Alaska, students must attend out-of-state schools to earn degrees in such fields as occupational therapy, physical therapy and pharmacy. A 2007 study by the Alaska Center for Rural Health determined Alaska faces a â&#x20AC;&#x153;perfect stormâ&#x20AC;? in its struggle to meet the health needs of its residents, due to an aging population, a lack of health professionals, and the stateâ&#x20AC;&#x2122;s unique geography. Once they leave Alaska, most do not return after graduating, according to the study, thus increasing the ever-widening gap in accessibility to services. Although shortages in many health care fields are listed in the report, the area with the greatest shortage is rehabilitation, specifically occupational therapy.

The partnership between Creighton, a Jesuit Catholic university in Omaha, Neb., and the University of Alaska Anchorage resulted from

Cheryl Easley, dean of the UAA College of Health and Social Welfare, discussing the idea with an associate professor of occupational therapy at Creighton who she knows from a previous professional affiliation. Creighton, which offers the only accredited distance-education degree for doctor of pharmacy candidates, wanted to adapt that model for other health professions. â&#x20AC;&#x153;This partnership responds to the lack of educational opportunity for occupational therapists in Alaska and the shortage of them available to practice in this state,â&#x20AC;? Easley said. â&#x20AC;&#x153;The distance-delivered program Creighton offers increases the likelihood that the graduates will remain in Alaska to work.â&#x20AC;?

If the program is successful, it could also serve as a national model for addressing shortages of health care professionals in Alaska and other rural and underserved areas in the United States and worldwide. UAA is talking to Creighton and other universities about developing longdistance physical therapy and pharmacy programs.

Seven UAA students participated in the 2008 inaugural class, which graduates next year, and 10 entered the program in 2009. Students com-

plete nine semesters over three and a half years before earning their doctoral degrees in occupational therapy. During a four-day orientation, students meet with a team of Creighton faculty, staff and advisers to learn about school policies and procedures.They are issued computers and software, complete training in distance-learning technology, and participate in a ceremony during which they are issued white lab coats. After completing the program, students receive an Occupational Therapy Doctorate (OTD) from Creighton and are eligible to sit for the National Board for Certification in Occupational Therapy exam.

The program includes teaching and learning in a hybrid model. Students have classes in a traditional and distance format, with labs being held on the UAA campus. Subsequent classes, lectures and course work are available online to students at their preferred times and locations.

Creighton also hires adjunct professors and a full-time program coordinator based at UAA to oversee lab clinics on the Anchorage campus.

Students do not step foot on the Creighton campus until graduation day. â?&#x2018;

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www.akbizmag.com â&#x20AC;˘ Alaska Business Monthly â&#x20AC;˘ January 2010

79

TECHNOLOGY

To Tweet, or Not to Tweet?

BY HEIDI BOHI

W

hen it comes to social media marketing and networking, the mania surrounding the top media channels – Twitter, Facebook, MySpace, LinkedIn, YouTube, Flickr, blogs and other online communities – is dizzying. On Facebook alone, there are more than 300 million active users who are 35 or older and 50 percent of these log on daily. More than 8 billion minutes are spent on Facebook every day, worldwide. “Twitterholics” have more than 18 million followers and that number is expected to hit 26 million over the next year.

Rumor has it that in a matter of weeks you can watch your brand grow from wallflower to wowza. And it’s free – so what do you have to lose?

ONLINE TOOLS Social media marketing includes using social networks, online communities, blogs, wikis or any other collaborative Internet form of media for marketing, sales, public relations and customer service. Although well-written, informative, entertaining content remains critical, the difference between this method and old-school marketing tactics is that it is about engaging the customer, not force feeding them a sales pitch. In fact, content is primarily published by users, not employees of the company. The success is based on conversations and user participation, or what is referred to as a “pull” medium, not “push.” As media consultants remind: “People don’t care that you know until they know that you care.”

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Although businesses don’t have to be on every social network, they do need to be where their customers are and they expect to find every business there. “As a default, I recommend a presence on the big three: LinkedIn, Facebook and Twitter. LinkedIn is your business suit, Facebook is business casual and Twitter is the 24/7 ongoing cocktail party,” says Paul Chaney, author of “The Digital Handshake: Seven Proven Strategies to Grow Your Business Using Social Media.”

In today’s economy, being able to find innovative, inexpensive ways to market is one more reason businesses need to understand these applications that are turning out to be priceless promotional tools.

However, signing up then failing to maintain this online presence will be counterproductive and could actually damage the brand.

“What can be misleading is that when you start using it, you can get a massive following list

within 90 days,” says Sarah Browne, The Guru of New, an expert on social media marketing and author of “How Not To Be An E-Hole: The Ultimate Guide to Online Etiquette.”

“It’s like high school,” Browne says.

“Suddenly, you’re so popular. On the one hand, that’s really neat. But if no one asks you to the prom, it doesn’t matter.”

Those who ignore the potential effectiveness of social media typically fall into three categories: 1) those who don’t know much about

Photo courtesy of Alaska Airlines

www.akbizmag.com • Alaska Business Monthly • January 2010

it; 2) those who are interested, but don’t know how to use it; and, 3) those who don’t believe in the value that a social media strategy can add to any business or Web site.

Then, there are the believers, ranging from micro-businesses to mega corporations. Street carts in large cities sell everything from hot dogs to cupcakes and knock-off designer purses by letting customers know menus and their location that day, and by engaging them with photos and recipes. As Browne points out, a small business does not need a massive following list, they only need several highly engaged followers.

ALASKA AIRLINES LAUNCHED Alaska Airlines eased into the world of social media marketing doing exactly what Browne recommends. “We said, ‘Let’s see what our customers need,’” says Andrea Schwarzenbach, interactive marketing manager. “We decided to go into the social space not just for marketing, but also for customer service, by using channels that work best for them. Our approach is to let them talk among themselves while also being available when our customers want to interact with us.”

Before first going on Twitter a year ago, the company watched how other airlines and well-known brands incorporated these platforms, then used those ideas to help develop its strategy, including launching its presence on Facebook and YouTube. In addition to having dedicated staff responsible for maintaining and tracking this online presence for both Alaska Airlines and its regional carrier Horizon Air, it is working on new ways to maximize what is turning out to be valuable forums for sharing useful information, especially when customers connect with each other from the fan page and have conversations about everything from long-distance promotions to shipping

Photo by Katie Carroll

“As a default, I recommend a presence on the big three: LinkedIn, Facebook and Twitter.

LinkedIn is your business suit, Facebook is business casual and Twitter is the 24/7 ongoing cocktail party.”

– Paul Chaney, Author

Sarah Browne welcomed home by Bradley the dog after Christmas tree shopping IRL (in real life).

pets and weather advisories. Besides being an extension of its brand and a way to educate customers and drive more traffic to its Web site, Schwarzenbach says the company uses the comments it tracks to make changes to its line of services, and to reach out beyond its primary age demographic of 45 to 55.

When Mount Redoubt erupted last winter, the airline put its Twitter handle on the Alaska Airlines Web site to get timely advisories to its passengers.

During that two-week stretch, the following grew by 200 percent. Today, it has 14,000 followers and continues to grow exponentially.

SUPPLEMENTAL MARKETING To use social media marketing to grow a business, the first step is to enter a profile that professionally represents the company. After that, reach out to other business owners and friends, and follow-up by communicating with the target audience so that it encourages them to want to participate by having conversations with the business and other users. It’s about communicating frequently, building two-way relationships, hosting events and promotions, and enhancing customer service.

But that’s only the beginning to successful social media marketing, Browne says. There are detailed steps and etiquette to contact, network and respond to others on the sites so you

can begin to build your community.

“The key questions you need to ask yourself before you do anything are: ‘What business effect do we want to achieve with social media? Who are we trying to reach and what are we trying to accomplish?’ Quantity does not equal quality. Social media is ineffective if you don’t have a solid strategy,” Browne says.

Before determining which social media tools to use, she says businesses much first identify where their potential customers are.

In other words, the fundamental rules of marketing still apply. Although social media is another channel for brand building and marketing a company message, it should not be considered a replacement for other forms of advertising and marketing.

Part of that strategy is to maintain a presence in various social media venues, whether it is handled in-house, or contracted out to a professional consultant or firm. If the efforts are abandoned, people will think a company has gone out of business, which is worse than having no social media presence.

“It’s not a matter of if you build it they will come,” Browne says. “It’s that if you build it, for two weeks your friends and family will come, then they go away unless you put a fairly concerted effort into refreshing and maintaining it.” ❑

www.akbizmag.com • Alaska Business Monthly • January 2010

81

TRANSPORTATION

Photos by ©2010 www.billzphotography.com

Truck On … Safely John McCoy, manager of driving training for Carlile Transportation Systems, shows off a new truck purchased by the company for heavy hauling.

Companies prepare road warriors for every situation.

BY DEBBIE CUTLER MANAGING EDITOR

T

he pressure is on.

I’m at Carlile Transportation Systems’ Anchorage training center, about to test out their truck simulator. It teaches new truckers, and enhances the skills of experienced drivers in, safety and preparedness on harsh Alaska roads.

I know another media person came before me to try her skills on the oneof-a-kind machine in Alaska – months before. She did so well she was offered a job working as a truck driver. All I want to do is survive the road.

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I jump into the driver’s seat, fasten my seatbelt, while beside me sits coach John McCoy, manager of driving training. He has overseen the simulator hundreds of times, if not thousands, on average 20 to 25 per week. He knows how easy it is to crash and burn. But it’s the simple stuff that gets to you.

Brake too hard, drive too fast, don’t use mirrors or turn signals, forget to turn wide around corners or watch traffic around you.

He puts me through all the elements, snow, sleet, ice and rain. We

drive through traffic, on freeways and in the mountains.

A motorcycle runs into me from behind and flips off the road. The motorcyclist’s fault, but mine, too, for not watching.

As I drive on ice around a steep curve on a cliff, I see my speed is too fast for the conditions. I slide and swerve, then brake fast. But much too late as I head downward in a tumble, just as McCoy turns off the system to prevent me from seeing me land and roll to certain death. I’m not offered a job.

www.akbizmag.com • Alaska Business Monthly • January 2010

SAFETY FIRST Carlile has about 20 driver instructors companywide throughout their 11 terminals (seven in Alaska), and safety is always the name of the game.

The show “Ice Road Truckers,” in which Carlile is star, is fun and flashy, but when it comes to their drivers, in reality it’s safety first and foremost.

Drivers receive continuous training.

Doesn’t matter if you are new or a longtime staff member. You train, train, train and then train some more. “Training never ends,” says Harry McDonald, chief executive officer.

For a new driver, it may mean a yearlong program of watching safety videos, doing simulator work and driving with the pros. About seven to eight new drivers are trained per month at the Anchorage facility, about 10 statewide. For the long-term drivers, and also newcomers, there’s some of the same, but also safety awards, remedial training, hazardous material training, toolbox meetings.

The total driver pool is 400 and company turnover is low, less than 30 percent, much less than the national rate of more than 100 percent, says McDonald. Pay is good, between $60,000 and $120,000 a year, depending on experience.

“We try to train ASAP,” McCoy says.

“Good drivers are hard to come by.

There might be one or two in a class.”

Truckers from different regions and experiences ask different questions.

“The ones from Alaska are concerned about the longevity of the job, how much money they will make,” says McCoy. “We get those who are concerned about us as a company, want to know what kind of company we are.

“Those from outside the state ask about the weather, how steep are the hills, is it really as tough as it appears on television.”

“If you are intimidated by it, it’s not the job for you,” says McDonald.

Their truck drivers are also closely monitored with satellites that signal to headquarters maximum speed, break usage, engine utilization, fuel economy, idle times and much more. “The satellite is also used for communication,” adds McDonald. On the Haul Road there are dead zones for cell phones.

With satellite, communication is always available.

“It’s a driver safety issue,” says McCoy. “They pop up on the computer.

You can see where everyone is at.

They can send messages to say what is going on.”

“We like to know where all the trucks are,” adds Linda Leary, president. “It’s customized for Alaska.”

REGULATED AND WATCHED McDonald says Alaska is heavily regulated for safety and compliance, more so than the rest of the United States.

The Department of Transportation is especially watchful of the Haul Road truckers, those who travel the 520 miles from Fairbanks to Prudhoe two to three times a week on one of the harshest roads in the nation. The truck drivers are stopped without exception, says McDonald. Either at a weigh station or on the road itself. “We are very closely watched,” he adds.

HELP FOR OTHERS About 90 percent of the drivers who go up and down the Haul Road in the winter are truckers, 80 percent in the summer. That’s about 600 trucks a month on average, not including the little guys. Carlile has about 15 to 20 trucks on the road each day, about onethird of all the traffic.

They haul everything from bulk fuel to groceries to pipe to oilfield equipment.

Carlile and other trucking companies often help those who break down

ABM Managing Editor Debbie Cutler tests out the truck simulator at Carlile Transportation Systems’ Anchorage training center. Just moments after this photo was taken, she drove the truck off the road in a tumble. www.akbizmag.com • Alaska Business Monthly • January 2010 83

John McCoy, manager of driving training for Carlile Transportation Systems, shows off a piece of equipment installed in trucks that monitors – via satellite – maximum speed, break usage, engine utilization, fuel economy, idle times and more, reporting back to headquarters. It is also used for communication between the driver and headquarters.

or need assistance, receiving letters of thanks monthly. One such letter praises the courtesy of Carlile truckers.

“Each and every one of the Carlile truckers slowed their trucks down a little more than the other trucking companies and would go by leaving a little more room between their rig and my pickup,” wrote a Palmer resident on a hunting trip up north. “Not one pebble hit my pickup truck from any of the Carlile semis. It is obvious that safety and courtesy are very important at Carlile Trucking.”

truckload transportation throughout the U.S. and Canada, specializing in shipment to and from Alaska, where Maltby says they are the leader in transporting liquid and dry-bulk products, hazardous and non-hazardous chemicals and petroleum products, with terminals in Anchorage, Fairbanks and Tacoma, Wash. Aside from fuel, AWE hauls the majority of bulk chemicals to the North Slope, says Maltby.

The tractors are equipped, like Carlile’s, with satellite tracing to maintain communication between the dispatcher and drivers.

“Look at our safety record,” says Maltby, who is director of health, safety and environmental. “Every load delivered without incident is a road story of successful safety training.”

He says there are plenty of jobs for truckers in Alaska, especially welltrained ones.

“There is a growing demand for qualified and competent employees in hazardous materials in transportation, hazardous waste, emergency management and hazardous materials emergency response industries,” he says.

“Our goal is to provide focused, intensive, professional development courses using hands-on training methodology to meet these needs. Classroom instruction, followed by exercises and drills utilizing personal protective equipment in simulated response situations, will significantly improve skills and safety performance.”

FOR LYNDEN, SAFETY, TOO

THEN THERE’S SPAN ALASKA TRANSPORTATION

Alaska West Express Inc., a Lynden company, is also concerned about safety on Alaska’s road system. James Maltby has been with the company for 19 years and says AWS employs 40 line drivers, 20 independent contractors and 20 hostlers.

“Alaska West Express opened Alaska West Training Center in 1995, providing training in hazardous materials transportation, emergency response for hazardous materials, Incident Command System, hazardous waste and workplace safety,” Maltby says. “The Alaska West Training Center is the hands-on training facility.”

AWE, which maintains a modern fleet of tractors and trailers, provides

Mike Landry, president of Span Alaska Transportation, is following in his father’s footsteps. The senior founded the company in 1978, and the junior Landry started working at Span Alaska (formerly Span Alaska Consolidators) in 1982 and became president in 1991.

At Span Alaska, there are 116 employees working for one of three companies owned by Span Alaska Transportation: Span Alaska Transportation Inc., Midnight Sun Transportation Services Inc., and Alaska Freight Express Inc. “Of these 116 employees, 72 work in one of the four terminals located in Alaska, and there are 29 of those Alaska employees who are commercial truck

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drivers,” he says. “We also have six commercial truck drivers located at our Auburn, Washington, terminal.”

Training is an essential element for all employees. They are oriented to the company through their position and departments. They also must have proper licenses, certifications and endorsements, based on the title they hold.

“All of our trucks are regularly inspected to ensure the safety of the truck on the road for our drivers as well as for the public,” Landry says. “We also use the proper equipment for securing all freight in which we deliver and/or pick up.”

He says most in Alaska know truck drivers have a dangerous job.

“To help our drivers, we hold regular safety meetings that cover topics anywhere from hazardous materials, reviewing accidents and injuries, reiterating all driver safety rules, to reminding everyone to stay focused on the job at hand.

“The training we do with our drivers is probably similar to our competitors, since there are many federal and state regulations we must abide by. We may differ on the standpoint of who does our training. Most of the training is done by our qualified employees who have been in their positions. They offer the best real life scenarios and also understand the best way to get the information across to our drivers.”

Span Alaska Transportation and its subsidiaries ship more than 200 million pounds of freight annually to Alaska and own more than 250 pieces of rolling equipment. In addition to its vast volume of shipments from the Lower 48 to Southcentral, the company also offers overnight service for Anchorage to both Fairbanks and the Kenai Peninsula. It provides less-than-truckload service via barge from Seattle to Southeast Alaska.

WHAT ABOUT PACIFIC ALASKA FREIGHTWAYS? Since 1961, Pacific Alaska Freightways, a privately held company founded in Seattle, Wash., has provided freight transportation services to Anchorage, Fairbanks, Kenai, Kodiak, Southeast and other communities statewide in a variety of forms, including over the road. They also provide services in the Lower 48.

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“Look at our safety record. Every load delivered without incident is a road story of successful safety training.”

– James Maltby Director of Health, Safety and Environmental Carlile Transportation Systems Inc.

According to its Web site, “the company started out as a consolidation business for many of the wholesale plumbing and electrical suppliers in Alaska, utilizing the services of breakbulk barge and shipping companies of that era.”

Today, they have freight terminals in Alaska and Washington, and own a fleet of trucks and trailers in both locations. Wes Renfrew, director of operations for Alaska, and Bill Meszaros, vice president of Alaska, said the company currently serves the entire road system in Alaska from Homer to Fairbanks, to Valdez to Tok and all points

in between. Pacific Alaska Freightways was renamed from its former name of Pacific Alaska Forwarders in 2008 to better represent the company and the services it provides, said Meszaros.

They currently have about 100 employees with 50 of those in Washington and 50 in Alaska, of which 26 are Alaska truckers.

“We ship everything,” said Meszaros.

“The shorter version is of what we don’t move. We do oversized freight, but not extremely oversized. We move everything from construction materials, to furniture, to retail merchandise to supplies for the North Slope.

“New drivers are trained with our long-term senior drivers, and must past competency tests before driving on their own,” he added..

In addition, PAF has several safety programs in place. One is a computer system that tracks on-time delivery and how long drivers are out on the road.

Another is a monthly safety incentive paid out to drivers without incidents.

The bonus amount is based on longevity with the company, pay grade, how long they have gone without incidents

and other factors. At the time of the interview, in mid-November, about 80 percent of the drivers received bonuses for October.

They are also big on making sure the truckers have the right equipment and knowledge for the job. There are weekly driver safety meetings, and monthly staff meetings that include drivers and everyone else in the terminal.

At these meetings they might go over seasonal needs, such as proper clothing, chains, ice grips, safety on the road when the first snow falls, watching out for children in school zones and other areas of discussion.

PAF also rewards one driver each Christmas with the Driver of the Year Award at their holiday party.

Another goal is to work to prevent accidents. “Accidents are caused when people are in a hurry to get the job done,” said Renfrew. “We have an idea of what drivers are doing day out and day in on the roads. We watch patterns.

See how long deliveries take. We note problems to work on. It’s almost like being on the outside looking in.” ❑

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REGIONAL REVIEW

Photo courtesy of Unalaska Mayor Shirley Marquardt

Aleutian Islands:

Land of Promise Nearly year-round fishing boosts economy.

The C/P American Triumph, a pollock trawler/processor, and a freighter sit at the new Kloosterboer Dutch Harbor Cold Storage dock. The modern cold storage facility will benefit the entire region by allowing users to consolidate their product, as well as store more product.

BY TRACY BARBOUR

T

he Aleutian Islands represent one of Alaska’s most unique geographic regions. Known as the Catherine Archipelago prior to 1867, the Aleutians are a chain of more than 300 volcanic islands that extend more than 1,000 miles into the Pacific Ocean from Alaska’s mainland.

Collectively, the Aleutians are multiple island groups: Fox Islands, Near Islands, Rat Islands, Delarof Islands, Andreanof Islands, Islands of Four Mountains, and Krenitzin Islands. The Aleutians – most of which are within the Aleutian National Wildlife Reserve – occupy a total area of 6,821 square miles The climate of the Aleutians is characterized by unpredictable and stormy weather. Rain and fog are common, as well as moderate temperatures. Early summer and fall often bring clear sunny

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days that allow spectacular views of the surrounding volcanoes. The islands are nearly treeless, although their terrain is accented by dense green grasses, bushes and sedges. And there’s an abundance of wildlife: sea otters, sea lions, harbor seals and birds. The islands also have a wide variety of fish, including halibut, cod, perch, sablefish, yellow fin sole, pollock, sand lance, herring and salmon.

TRENDS FOR ALEUTIANS WEST AND EAST The Aleutian Islands have a 2008 estimated population of 7,140. Residents of the region occupy two boroughs: the Aleutians West Census Area and the Aleutians East Borough. The principle industry for both areas is commercial fishing.

The Aleutians West Census Area is the more prominent borough of the region. With a population around 4,500, Aleutians West is home to most of the islands’ residents. Cities in Aleutians West include Unalaska/Dutch Harbor, St. Paul, St. George, Adak and Atka.

Main cities in the Aleutians East Borough are Sand Point, Akutan, King Cove, Cold Bay and False Pass. Sand Point, which has about 1,000 residents, is the largest population center in Aleutians East. Akutan and King Cove have respective populations of 800 and 750.

Historically, the Aleutian Islands were originally settled by the Unangan people, who early Russian explorers referred to as “Aleuts.” During World War II, Unalaska/Dutch Harbor was bombed by Japanese forces on June 3, 1942. Following the attack,

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Unalaska at a Glance Location: The Fox Islands, about 800 air miles southwest of Anchorage Population: Anywhere from 4,300 to 9,000, depending on the fishing season Key local contacts: Mayor Shirley Marquardt and Ounalashka Corporation CEO Wendy SvarnyHawthorne.

Major industries: Fishing and government Government structure: Mayor-council form of government Tax base: A 3 percent raw fish tax, 3 percent sales tax and a marine fuel tax Hospital/clinic: Iliuliuk Family & Health Services Schools: The Unalaska City School District has a single facility that serves about 400 students who are grouped by grade level. The University of Alaska Aleutian/Pribilof Rural Center awards two-year Associate of Arts degrees Airport: The Tom Madsen Airport

For example, the population of Aleutians West Census Area has been on a downward trend, “It grew from the ‘70s to the ‘80s, had a spike in the ‘80s (from the building of the now-closed Adak Naval Air Station) and came back down,” Shanks says. “Then it’s been declining ever since.”

In Unalaska, the population has been a bit more sporadic. It grew slightly in 2003 and declined from 2004 to 2008, according to Shanks. The 2008 estimated population for Unalaska was 3,551, compared to the 2005 estimate of 4,296. There’s no obvious reason for population decline, Shanks says, but the harsher climate could be a factor.

In Aleutians East, however, a different trend has emerged. The population was slowly growing until around 2000, and then it flattened out, Shanks says.

While population trends vary slightly for Aleutians West and Aleutians East, unemployment patterns for the two areas are very similar. That’s likely because both areas are driven by the fishing industry, Shanks says. Unlike many places in Alaska, the Aleutians West and Aleutians East areas have a virtual year-round fishing season that runs nearly 10 months of the year. Their fisheries – which encompass everything from pollock and cod to crab and scallops – help to keep unemployment for the region relatively low. The unemployment rate fluctuates throughout the year, depending on what’s happening with the fishing industry. “It’s a very bimodal unemployment rate,” Shanks says. “The rate jumps up in June and sometimes in May. Then it drops down and goes way back up in December.”

The unemployment rate for the region as a whole was 7.9 for the month of August; in May it was 14.9, Shanks says.

And although, the region’s unemployment rate is relatively low, it is trending slightly higher. Seafood manufacturing was down in both Aleutians West and Aleutians East during first quarter 2009 – but demand is down for a lot of things. “Food tends to do well in recessions, but we’re seeing lower prices on everything,” Shanks explains. “It wouldn’t surprise me if companies had hired fewer people to do their fishing.”

The government represents another important sector for the region, providing hundreds of stable jobs. In Aleutians

Photo courtesy of Cory Baggen

the Unangan people on the island were involuntarily removed to Southeast Alaska until they were allowed to return in April 1945. The Aleutian World War II National Historic Area is a U.S. National Historic Site on Amaknak Island. Bunkers, tunnels and observation posts remain on the island as a historic trace of Fort Schwatka, which was located on Mount Ballyhoo.

Today, the Aleutian Islands have a diverse population that includes Unangans, as well as a significant number of Asians, Hispanics and Norwegians.

Interestingly, the Aleutians West and Aleutians East boroughs have among the largest concentrations of Asians in Alaska. Twenty-six percent of the population of Aleutians East is Asian, while 24 percent is Asian in Aleutians West, according to Alaska Department of Labor Economist Alyssa Shanks.

Interesting trends are also taking place with the Aleutians’ population.

Unalaska Mayor Shirley Marquardt

West, 500 jobs come from local government, while there are 250 local government jobs in the smaller Aleutians East Borough, according to Shanks.

UNALASKA, THE HEART OF THE ALEUTIAN ISLANDS Most residents of the Aleutian Island are concentrated in the city of Unalaska, making it a regional hub. Unalaska, which is located approximately 800 miles southwest of Anchorage, is the 11th-largest city in Alaska. Unalaska is a unique city that traverses two neighboring islands: Unalaska and Amaknak, which are connected by the recently completed Unalaska South Channel Bridge. More than half of Unalaska’s residents live on the island of Amaknak, home to Dutch Harbor, the official name of the city’s port.

Unalaska is a place of natural wonders and sheer beauty – copious wildlife, majestic mountains and lush, green tundra during summer. It’s also a place marked by wild weather. “There are real challenges to living here, but the benefits and positives outweigh the negative,” says Mayor Shirley Marquardt, who has called Unalaska home for nearly three decades.

Marquardt describes Unalaska as a “working Alaska town” with fewer activities – and distractions – than larger cities. Therefore, Unalaska residents tend to have more time to become more involved with their family, coworkers,

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friends and community, she says. “You cannot help but gain a true sense of belonging here,” Marquardt adds.

That same sense of belonging is what endeared Unalaska to Marquardt almost 30 years ago. After high school, Marquardt arrived in Dutch Harbor in 1980 to work a fish-processing job. She jumped at the chance to work a shipping and receiving position over the winter. “I stayed and never left,” she says.

Today, Marquardt’s life still revolves around the fishing industry. Now as Unalaska’s mayor, she is ultimately responsible for one of the country’s most productive fisheries port, Dutch Harbor. For nearly every year since 1981, Dutch Harbor has been the largest fisheries port in the United States, in terms of volume of seafood caught.

Until 2000, it also ranked first in terms of the dollar value of its catch.

Dutch Harbor is also renowned for being the main port and field base for the famed Bering Sea crab fishery. The Dutch Harbor crabbing fleet is featured in Deadliest Catch, a documentary-style television show on the Discovery Channel.

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UNALASKA’S ECONOMY REVOLVES AROUND FISHING Thanks to its robust fishing industry, Unalaska has a very low unemployment. “You almost can’t chart it,” Marquardt says. “There’s always work to be found in our community,” she says.

“We have year-round fishing and yearround revenue sources, and that’s a huge blessing.”

Naturally, everything revolves around the fishing season, even vacations. Everybody goes on vacation at the same time – during the brief lag in the fishing season. “It quiets down in the end of May and June (the end of our crab season), and in July, we start up with cod,” Marquardt explains.

Unalaska’s population also fluctuates according to the fishing industry. During fishing season, the city’s normal population figure of 4,300 increases dramatically. “For nine or 10 months out of the year, we are closer to 8,000 or 9,000 for the population,” Marquardt says.

With its central location in the North Pacific, Unalaska is directly on shipping routes between the West Coast

and Pacific Rim nations. As such, the city is in prime position for the shipment of cargo between Pacific Rim trading partners. This allows Unalaska to benefit from unique opportunities, such as its new Kloosterboer Dutch Harbor Cold Storage. The modern facility offers a fully automated system for bringing products indoors where they can be properly packaged, labeled and stored.

The much-needed facility – which will generate more Fisheries Resources Landing taxes for the city – allows products to be consolidated, stored and shipped out according to market demands. Ideally, Marquardt says, places like St. Paul will use Dutch Harbor’s cold storage instead of shipping products to Seattle. And perhaps Bristol Bay salmon will end up in the city’s cold- storage facility. “I’m excited about it,” she says. “I think it will strengthen the market for different areas around region. It’s a tremendous improvement, and it will give American fishers a competitive edge.”

As another recent development, Unalaska is constructing a new 10-plusmegawatt power plant. The powerhouse, which should be completed

by September 2010, will help to end shortages that have plagued the city for years. It also will provide a more reliable alternative than the “non-firm,” backup supply that Unalaska receives from UniSea, a local processor.

Unalaska also continues to move forward with its small boat harbor project that will create a safe haven for vessels that regularly fish the Bering Sea. The city has completed the boat ramp and is working on finishing the outer break water, Marquardt says.

Now, the U.S. Army Corps of Engineers is waiting to receive $10 million in funding to complete the floating breakwater. Then the city will need another $15 million or so to complete the inner harbor development. Some of the funding depends on the appropriation of federal stimulus money. But Marquardt is hopeful that the boat harbor project will receive the necessary funds to continue progressing. “The Corps really wants to finish this project,” she says. “They have told us we are the No. 1 dock project for the State of Alaska ❑ on their list.”

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GENERAL

Empty Nest Syndrome

Photo by Patrice Parker

The Fried family, from left, empty nesters Neal and Mary, with daughter Ruby and son Evan at the couple’s 25th wedding anniversary celebration.

Not always a bad thing.

BY HEIDI BOHI

W

hen the last of his two children left home, Neal Fried first threatened to adopt a child. When that didn’t happen, AND he continued to be depressed, his friends told him to get a dog. Although he didn’t resort to taking on either of these new responsibilities, one full year since both his daughter, Ruby, 23, and son, Evan, 19, have been gone, he says that joining the ranks of Alaska’s empty nesters has not been easy.

“They don’t arrive at 4 a.m.,” he says after more than two decades of life being all about the kids. “They just don’t arrive at all.”

A well-known economist for the state, Fried and his wife Mary are just two of many Alaska parents who find themselves adjusting to this transition, despite the satisfaction of seeing the fruits of their labor realized. “It’s very different when there are only two of you left. It changes the dynamics of the household,” he adds.

FATHERS HURT, TOO While most studies have focused on mothers, researchers have found that they don’t take the children’s departure any harder than fathers. In fact, fathers often have a harder time adjusting be-

cause they are less emotionally prepared. Besides the fact he doesn’t have to worry about his children as much on a daily basis, he’s not convinced of the other lifestyle benefits that becoming an empty nester offers.

The American family is becoming more complex and diverse. We now have “helicopter parents” who hover over every move their child makes, “boomerang babies” for children who treat their parents’ homes less like an empty nest and more like a revolving door, and “half-full nests,” which are empty nesters whose time is filled by parents who need care. Also with

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Photo by Alex Hoffman

The Parker family, from left, Bill, Patrice, Anya, Adler(grandson), Mara, Alia, Patrick (son-in-law), Finn (grandson), Adan, Aram.

remarriage, many empty nesters have stepchildren or “half-nests.”

’70S TERM Psychologists coined the term “empty nest syndrome” in the 1970s to define the sense of loss parents often feel when their children leave home. Studies show mothers and fathers within the same family tend to experience similar feelings when their children leave home, though the concept is more stereotypically applied to the mother’s experience. The term also applies to the changing nature of the parental partnerships, as they find themselves with extra space – a physical and emotional – formerly occupied by a child.

Although the Census Bureau does not recognize the term “empty nesters,” Fried says anecdotal information and some statistics are indicative of just how formidable a group these parents are.

STATISTICAL ARRAY In 2008, Alaska reported 34 percent of family households had children under the age of 18, compared to 31 percent nationally, and 38 percent of these Alaska households have one or more child under the age of 18, also higher than the national average of 34 percent.

Alaska ranks third in the country for having the highest percentage of households with children under age 18, and supporting statistics show these kids are more likely to leave their home state than those from Outside.

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Economically, too, a lot depends on how you slice the numbers. There is no “empty nester” category. There are tables broken down by the number of people in the household, but the husband and wife only category includes couples of all ages.

Many of the slight differences between Alaska and other states can be attributed to the state’s remoteness: when children do leave, they are far away, which makes it more difficult to visit with any regularity and also creates more anxiety for the parents.

The empty-nester population will only continue to increase in Alaska because in addition to Alaskans having more children under the age of 18, the bulge

Molly McCammon and her husband, Pete Spivey, had at one time or another while raising their two boys, Tim, 22, and, Jackson, 20. As the reality of their children leaving home started to set in, McCammon remembers having some angst when she and her husband faced the fact that the boys would leave the state to pursue sports. And, as is the case with many Alaskans who do not have relatives in the state, the children’s departure also meant the end of the local family unit.

Dealing with empty nest syndrome depends on many different variables and for every parent it is a different experience. Although some may celebrate their newfound freedom by traveling to exotic places, trading the mini van in for a new car, redecorating the house and becoming more involved in adult social activities and personal relationships, for many this is the exception to the rule as funding college educations – often more than one child at a time – and helping them get set up in their new lives drains the bank account at a much faster rate than hockey teams and homecomings.

McCammon and her husband relied on advice from friends when considering the best way to fund two college educations at the same time, and for offering counsel on how to get through the transition. “I remember one friend telling me his plan was to do something completely different, like leave the country so the trauma of being an empty nester would be

Alaska ranks third in the country for having the highest percentage of households with children under age 18, and supporting statistics show these kids are more likely to leave their home state than those from Outside. in the baby boom population means that ultimately more parents will be watching their children fly the coop. In a state where, more than anyplace in the country, many residents are from someplace else, it means that the kids inherit this tendency to move.

THE WAITING GAME I can’t wait to get these kids out of the house, they are driving me nuts, they are lazy, ungrateful, and why are they so much nicer to other parents than they are to their own? Along with most parents, these are all typical thoughts

replaced by something very, very different,” she says. “Maybe we should just go live in Africa,” was a fleeting thought, McCammon says, “but then we wouldn’t be home for more frequent visits.” When it all came down to it, the reality was that it would simply take time to adjust to the void left from the extra energy that comes with having children in the house. At the same time, she says, her fulfilling career and hectic travel schedule has helped fill the void, and cell phones, PDAs and computers make it much easier to stay in regular contact.

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MORE LIFE TO LIVE Deciding that there is more to life than the nest is the key to eventually moving to the acceptance stage, according to mental health care providers. Resting and reflecting on accomplishments as a parent, sharing experiences with others, reinventing romantic relationships, developing a hobby, planning the next step and reading all help with discovering what the world has to offer outside the nest – there is even a book called “Chicken Soup for the Empty Nesters: 101 Stories about Surviving and Thriving When the Kids Leave Home.”

This acceptance stage also requires recognizing that there were downsides to child rearing years and those who have interests of their own find themselves less vicariously dependent upon their children’s happiness.

As the fourth oldest in a family of nine and then the mother of four of her own children, lifelong Alaskan Tissy Parker says she has been raising children for most of her life. Although she was a little worried about what was in store during her life-after-children

phase, and often found it difficult to imagine what she’d do with the rest of her life, when her last child, Adan, 19, decided to go to college after getting his GED, then traveling around Europe with friends, she and her husband, Bill, were actually so relieved that he was getting his life together and not planning on living with them that it made the transition easier. During Adan’s extra year at home, she says she and Bill used the extra time to get ready for their last baby to leave.

Softening the blow, too, was the fact that Tissy’s stepdaughter, Mara Carnahan, and her two children also live in Alaska, as do many of her other siblings and their children.

SERENITY Once the chaos and constant fight to keep the house clean died, expenses shrunk and they no longer had to toss and turn waiting to hear their children arrive home at 2 a.m., the Parkers learned to appreciate their new lifestyle and each other. Cooking has changed – all four of her children were vegetarians – while they were living at

home she felt the need to make regular meals. They are considering buying a newer car and recently purchased new living room furniture. Travel includes trips to Boston, Thailand, Cambodia, Argentina and most recently to deliver their youngest to Evergreen College in Olympia, Wash. Bill spends more time working on projects at their cabins in Hope and Homer. Tissy has developed a bigger circle of friends through her running group and taken up new hobbies such as yoga, swimming and knitting. “I never had the time before and now I don’t feel as guilty – before I always felt the push-pull between having time for myself and being there for my kids.”

Having girls, she says, may also make the transition easier because they tend to be more communicative. Although her oldest daughter, Anya, 30, is a fashion designer in San Francisco, and her daughter, Alia, 24, works for Planned Parenthood in Bellingham, Wash., she unabashedly admits talking to them about five times a week. “I’m clingy that way,” she says. ❑

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FISHERIES

F/V Carmella tendering for Great Pacific Seafoods, with two salmon gillnetters offloading in Prince William Sound.

Photo by Gale Vick

Understanding the regulatory decision-making process.

BY GALE K. VICK

A

re the fisheries and oceans off the coast of Alaska, from tidewater to the 200-mile Exclusive Economic Zone (EEZ) being managed in ways that best serve both the preservation of the resource and the multiple-user groups that lay claim to those resources?

On a relative scale to other world fisheries, probably yes, but sometimes it just depends on whom you talk to.

In July 2005, the U.S. House of Representatives Resource Committee held a hearing in Kodiak. Committee chair

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Rep. Wayne Gilchrest had this to say: “I want to tell the people of Alaska that they can be proud of their fishermen, their fishery management council and their scientists. In my view, Alaska is the model for the rest of the country in how to manage a fishery.” But at the same hearing, congressmen heard from many area residents who felt that regulatory decisions were creating more problems than they solve.

Polarized views have hardly changed in the intervening years.

FISHERIES HISTORY Financially, the combined fisheries of Alaska (commercial, sports, community, subsistence/personal use) have an annual value in the billions of dollars.

Emotionally, fish are Alaskans singlemost important resource. The impetus to become a state was largely driven by territorial concern over federal fisheries management running Alaska’s marine resources into oblivion. In 1949, 10 years before becoming a state, the Territorial Legislature created a

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Department of Fisheries. In 1955, delegates from around Alaska worked diligently to frame a new constitution that would become a model for inclusion of key provisions to preserve Alaska fisheries, reserving fish as a common property resource and providing for principles of sustained yield management.

In 1959, Alaska became the 49th state, anxious to implement their principles. But it was still a long haul to shake the stranglehold of Outside-controlled fishing companies, as well as to provide a regulatory framework to rid the North Pacific of the devastating impact of foreign trawler fleets. In 1976, Congress implemented the Magnuson-Stevens Fishery Conservation and Management Act (MSA) establishing the EEZ. Managers for Alaska state waters (0-3 miles) and federal waters (3-200 miles) then began working together to create a more seamless management.

PROGRAM DISSENT Alaska 50th year of statehood, 2009, had many people feeling Alaska was going backward in its protection of marine resources for Alaskans, in both state and federal waters. One of the questions Alaskans most often asked regarding Alaska’s marine resources is: “Who is getting the benefit?”

Privatization programs and their “unintended consequences” are the most common targets of distrust and frustration. Dr. Seth Macinko, Department of Marine Affairs, University of Rhode Island, a member of the Council Science and Statistical Committee, raised in Kodiak, author of many fisheries papers, is a strong critic of approaches to individual fishing quota (IFQ) programs that don’t consider the severity of unintended consequences, unequivocally stating, “Coastal Alaska is dying. I question how much longer permanent giveaways to selected individuals will somehow make communities better off. This process is killing us.”

Ole Olsen, former president of Afognak Native Corp. and founding board member of the Gulf of Alaska Coastal Communities Coalition (GOAC3) agrees. “Alaska is the perfect laboratory to see what works and what doesn’t. The success of the Western Alaska Community Development Quota (CDQ) program, based on

initial issuance of multi-species quota compared to the dismal record of the Gulf of Alaska Community Quota Entity (CQE) program, which was left with only a purchase option, is like seeing the flip side of the same coin. It clearly illustrates that unless you are an initial issuee and don’t have to pay for your quota, ‘community protections’ are just noise. In the Gulf, we are losing fishing effort all the time and there is no money to buy back what once sustained our communities well.”

There is real concern that IFQs now owned by Alaskans will stay in Alaskan ownership. Linda Behnken, Sitka-based Alaska Longline Fishermen’s Association (ALFA), a former Council member who championed the halibut and sablefish IFQ program for conservation and safety reasons, supporting “owner on board” requirements, understands the limitations.

“The program has met the conservation and safety goals. Now the most important issue facing Alaska fishermen is access. Coastal fishermen need access to adjacent marine resources at a price they can afford or Alaska coastal fishing communities, and the critical role they play in conserving the resource, will disappear.”

Jeff Farvour, a struggling young Southeast halibut longliner and Council AP member, said, “Young people and entry-level fisherman deserve the opportunity to sustain their livelihoods. It is important to ensure that as Alaska’s fisheries become limited or ‘rationalized’ that there are meaningful transition programs, such as preserving diverse small boat fisheries, loan programs that work for those just starting up, encouraging owner participation on deck, etc.”

The issues for Alaskans and Alaska communities are not all the same. Communities are dependent on individual decisions, which are some times not in the community’s best interests. That’s why community programs are so important. There also are very different scenarios between the Bering Sea and the Gulf of Alaska.

Clem Tillion, former fisheries advisor to Gov. Wally Hickel, former member of the Council and an architect of both the halibut and sablefish IFQ and CDQ programs, sees the components

of the North Pacific distinctly. “The Bering Sea is the industrialized fleet; the Gulf of Alaska is the small-boat localized fleet,” Tillon said. “Gulf community fisheries are best protected by limiting fleets to under 60 feet.”

Ole Olsen says this is not enough.

“In the end, the only real protection for communities is guaranteed access,” Olsen said.

HUMAN DECISIONS So how do we get and/or protect access? Regulatory bodies have specific rules and guidelines, but the in the end it comes down to human decision-making.

The Alaska Board of Fisheries (BOF) is the regulatory body for state waters.

Federal waters are regulated by the North Pacific Fisheries Management Council (NPFMC or Council). The International Pacific Halibut Commission (IPHC) regulates halibut, a shared responsibility with Canada.

The BOF regulates according to the Alaska State Constitution and State regulations. The Council regulates according to MSA, specifically the 10 National Standards, and a multitude of other laws, including the National Environmental Policy Act (NEPA) and the Endangered Species Act (ESA). These groups have collaborative agreements and all subscribe to a precautionary approach to fisheries management, managing for maximum sustainable yield, generally referred to as OY, or “optimal yield” incorporating environmental and economic factors.

The issues are so multiple and complex that fishery meetings go on yearround. Even veterans find themselves mired. Meetings are “open and transparent,” but not without significant cost.

The Council meets five times a year for nine days at a time, four meetings in Alaska, one in Seattle or Portland.

The cost (air fare, housing, meals, etc.) for a single individual from a remote Alaska community to attend 45 days of Council, related committees and BOF meetings, can be the equivalent of a year at Harvard University (more than $50,000).

Yet, Council decisions have enormous impacts on Alaska’s coastal communities. In part to address this problem, the Council has just (October 2009) initiated a live audio stream, but

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Joint Resolution No. 21, introduced in March 2009 by Kodiak Rep. Alan Austerman, with 11 co-sponsors, was a historic request to the Council for a stand-down on an amendment proposing significant loss of Pacific cod endorsements to Alaska commercial fishermen. This legislation, supported by communities all over the Gulf of Alaska, passed handily in the House, but there was not enough time to get Senate concurrence. HJR21 did not change the outcome, but it did make the Legislature more aware of the nature of Council issues affecting Alaskans.

Regulatory meetings are often tension filled; allocation decisions are extraordinarily political. In public testimony, one sponsor of the HJR21 bill expressed concern that “big groups with money to lobby are controlling decision-making at the expense of those who cannot.”

BALANCE NEEDED Bycatch from an undisclosed trawler fishing off Kodiak Island last summer shows high numbers of Tanner crab on a trawl vessel fishing for groundfish and reveal a level of wasteful bycatch considerably higher than what has been reported to fishery managers through the standard catch-monitoring system.

attendance in person is still required to deliver testimony or meet with others in negotiating.

The Board of Fisheries process is more direct. Proposals to the BOF are attached to a rotating cycle of regional issues, except for “agenda change requests” to allow consideration of an issue out of cycle. Proposals are encouraged to be considered through local Advisory Committees before submission. The BOF holds work sessions and then deliberates at board meetings. If you want to get a proposal through, you need to be at the meetings.

Attendance does little good unless you are well-versed. The best scenario is having access to attorneys and economists to help with research and analysis of the analyses agency staff already have done. Each stakeholder group needs to fully understand how a particular motion is going to impact them. The material for a single Council meeting can number in thousands of pages. A cheat sheet for the hundreds of acronyms used is highly recommended; fisheries has its own language.

After all this, in order to affect any

94

outcome, you need to have a champion on the Council who is able to obtain the magical six votes to win an issue.

It can take several years just to learn the process and many years before an issue is resolved.

ONGOING CONCERNS The ongoing and highly contentious halibut charter issue is an example.

Starting in the early 1990s, the Council considered options for managing the proliferation of unregulated halibut charters. That issue is still in regulatory process.

Another ongoing problem is bycatch, any fish caught that is not part of the directed species. Some bycatch are allowed, most are not. What to do with bycatch and how to reduce it is a serious and complicated problem. Who gets the advantage is a political issue.

Solutions include increasing observer coverage, reducing or eliminating certain gear types or closing fishing areas.

If you care about the stakes, you need to be paying attention. The Alaska Legislature woke up to this during the last legislative season. House

John Iani, a former NEPA attorney representing seafood processors on Kodiak, stresses the importance of balance. “Alaska coastal communities have developed around seafood harvesting and processing and have an interdependency,” he said. “Each need the other to remain healthy. The allocation of ‘catch-shares’ must consider this relationship or the real probability of economic damage will happen. Fish managers must make accommodations to harvesters, processors and communities to preserve their survival.”

All stakeholders share overwhelming concerns. Affects of climate change, increased ocean acidification, lack of data, lack of funding to get the data, lawsuits regarding endangered species, reducing bycatch, protecting habitat – the list seems endless. The cast of players is in the thousands – communities, harvesters (in-state and out-of-state), regulators, scientists, corporations, attorneys, economists, sports and subsistence users, bankers, vendors and perhaps the most important of all – future generations of Alaskans.

If you have any stake in fisheries, you should belong to a group who can represent you. If you are not involved in fisheries, it is worth going to a Council or Board of Fish meeting to see how ❑ it all works.

www.akbizmag.com • Alaska Business Monthly • January 2010

A

L A S K A

BY JOEL AINSWORTH

TR

E N D S

Alaska Trends, an outline of significant statewide statistics, is provided by the University of Alaska Center for Economic Development.

Measuring Unemployment Varying criteria generates half a dozen rates.

S

ince 1994, the U.S. Department of Labor, Bureau of Labor Statistics has released one official rate along with five alternative rates to measure the underutilization of labor in the United States. BLS releases the data in a range of U-1 through U-6 using various criteria to gauge unemployed or marginally employed workers in the civilian work force. Each rate estimates unemployment using slightly different data, which can offer distinctive perspectives on the state of the civilian labor force.

The official unemployment rate is category U-3, which measures the total number of persons unemployed as a part of the civilian work force. The employment concept in the U-3 data includes all jobless persons who are available to take a job and have actively sought work in the past four weeks. If a person is no longer included as part of the official unemployment rate due to length of unemployment or part-time work, they may still be included in one of the other unemployment categories.

An alternative measurement that has become popular in the news lately is the U-6 measurement, which has been

equivocally described as the “real” rate of unemployment.

The unemployment rate in U-6 data indeed tends to be much higher relative to the official U-3 unemployment rate. This is because the U-6 rate includes the total unemployed plus all marginally attached workers and the total number of people employed part-time as a percent of the civilian labor force.

The BLS does not consider any particular rate more or less accurate within the U-1 through U-6 range. Generally all six measurements move together with changes that occur over time and within the business cycle. The variation exists for researchers or other persons seeking to either narrow (U-1 and U-2) or broaden (U-4 through U-6) their definition of unemployment relative to the officially released statistic based on their needs.

For localized data, the BLS recently released alternative unemployment measurements for each state. Beginning with annual 2008 rates, the data currently goes back to 2005. Due to increased demand, BLS has committed to updating alternative rates to state unemployment on a quarterly basis. ❑

Source: U.S. Department of Labor, Bureau of Labor Statistics

ALASKA TRENDS HAS BEEN BROUGHT TO YOU THIS MONTH COURTESY OF AMERICAN FAST FREIGHT

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A

L A S K A

Indicator

GENERAL Personal Income – Alaska Personal Income – United States Consumer Prices – Anchorage Consumer Prices – United States Bankruptcies Alaska Total Anchorage Total Fairbanks Total EMPLOYMENT Alaska Anchorage & Mat-Su Fairbanks Southeast Gulf Coast Sectoral Distribution – Alaska Total Nonfarm Wage & Salary Goods-Producing Service-Providing Natural Resources & Mining Logging Mining Oil & Gas Extraction Construction Manufacturing Wood Products Manufacturing Seafood Processing Trade/Transportation/Utilities Wholesale Trade Retail Trade Food & Beverage Stores General Merchandise Stores Trans/Warehouse/Utilities Air Transportation Truck Transportation Information Telecommunications Financial Activities Professional & Business Svcs Educational & Health Services Health Care Leisure & Hospitality Accommodation Food Svcs & Drinking Places Other Services Government Federal Government State Government State Education Local Government Local Education Tribal Government Labor Force Alaska Anchorage & Mat-Su Fairbanks Southeast Gulf Coast

96

T

R E N D S Previous Report Period (revised)

Year Ago Period

Year Over Year Change

Period

Latest Report Period

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

2nd Q09 2nd Q09 1st H09 1st H09

28,631 11,959,177 190.032 213.139

28,631 11,959,177 190.032 213.139

28,607 12,146,939 187.659 214.429

0.08% -1.55% 1.26% -0.60%

Number Filed Number Filed Number Filed

August August August

103 74 19

66 36 7

100 4 17

3.00% 1750.00% 11.76%

Thousands Thousands Thousands Thousands Thousands

September September September September September

331.42 179.30 42.50 38.88 35.32

337.62 179.32 43.45 40.72 38.24

338.58 182.08 43.97 40.90 35.96

-2.11% -1.53% -3.36% -4.96% -1.78%

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

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

335 49.5 285.5 15.5 0.2 15.3 13 19.1 14.9 0.3 11 66.5 6.8 36.3 6.3 9.6 23.4 6.4 3.2 7 4.5 14.9 27 38.6 28 35.5 10 205 11.3 84.7 17.1 26.1 7.6 41.5 23 4

343.6 55.6 288 15.7 0.3 15.4 13.2 20.3 19.6 0.3 15.7 68.3 7 37.1 6.5 9.8 24.2 6.5 3.4 7.2 4.7 15.1 27.7 38.8 28.3 39.1 11.4 21.8 11.5 80.3 17.6 24.9 5.9 37.8 18.4 4.1

333.9 50.9 283 15.5 0.3 15.2 13.1 20 15.4 0.4 11.2 66.5 6.6 36.8 6.4 9.5 23.1 6.6 3.3 7 4.4 14.8 26.9 36.9 26.7 35.3 10 20.4 11.7 83.9 17 25.6 7.5 41.3 22.6 3.7

0.33% -2.75% 0.88% 0.00% -33.33% 0.66% -0.76% -4.50% -3.25% -25.00% -1.79% 0.00% 3.03% -1.36% -1.56% 1.05% 1.30% -3.03% -3.03% 0.00% 2.27% 0.68% 0.37% 4.61% 4.87% 0.57% 0.00% 904.90% -3.42% 0.95% 0.59% 1.95% 1.33% 0.48% 1.77% 8.11%

Thousands Thousands Thousands Thousands Thousands

September September September September September

359.17 193.55 45.63 41.66 38.68

363.90 192.71 46.40 43.36 41.45

360.85 193.27 46.43 43.17 38.63

-0.47% 0.15% -1.72% -3.50% 0.12%

Units

www.akbizmag.com • Alaska Business Monthly • January 2010

SPONSORED

Indicator

Units

Unemployment Rate Alaska Percent Anchorage & Mat-Su Percent Fairbanks Percent Southeast Percent Gulf Coast Percent United States Percent PETROLEUM/MINING Crude Oil Production – Alaska Millions of Barrels Natural Gas Field Production – Alaska Billions of Cubic Ft. ANS West Cost Average Spot Price $ per Barrel Hughes Rig Count Alaska Active Rigs United States Active Rigs Gold Prices $ Per Troy Oz. Silver Prices $ Per Troy Oz. Zinc Prices Per Pound REAL ESTATE Anchorage Building Permit Valuations Total Millions of $ Residential Millions of $ Commercial Millions of $ Deeds of Trust Recorded Anchorage–Recording District Total Deeds Fairbanks–Recording District Total Deeds VISITOR INDUSTRY Total Air Passenger Traffic – Anchorage Thousands Total Air Passenger Traffic – Fairbanks Thousands ALASKA PERMANENT FUND Equity Millions of $ Assets Millions of $ Net Income Millions of $ Net Income – Year to Date Millions of $ Marketable Debt Securities Millions of $ Real Estate Investments Millions of $ Preferred and Common Stock Millions of $ BANKING (excludes interstate branches) Total Bank Assets – Alaska Millions of $ Cash & Balances Due Millions of $ Securities Millions of $ Net Loans and Leases Millions of $ Other Real Estate Owned Millions of $ Total Liabilities Millions of $ Total Bank Deposits – Alaska Millions of $ Noninterest-bearing deposits Millions of $ Interest- bearing deposits Millions of $ FOREIGN TRADE Value of the Dollar In Japanese Yen Yen In Canadian Dollars Canadian $ In British Pounds Pounds In European Monetary Unit Euro In Chinese Yuan Yuan

BY

AMERICAN FAST FREIGHT Previous Report Period (revised)

Year Ago Period

Year Over Year Change

Period

Latest Report Period

September September September September September September

7.7 7.4 6.9 6.7 8.7 9.8

7.2 6.9 6.4 6.1 7.7 9.8

6.2 5.8 5.3 5.3 6.9 6

24.19% 27.59% 30.19% 26.42% 26.09% 63.33%

September September September

16.87 10.34 69.20

17.73 10.23 71.52

20.43 11.40 101.86

-17.41% -9.28% -32.06%

September September September September September

8 1097 996.42 1638.95 0.94

8 966 949.44 1434.75 0.91

11 2014 827.43 1237.30 0.87

-27.27% -45.53% 20.42% 32.46% 8.57%

September September September

23.88 12.63 11.25

23.08 12.95 10.13

25.03 13.14 11.89

-4.56% -3.86% -5.34%

September September

829 387

863 379

686 223

20.85% 73.54%

September September

a 87.51

602.73 110.62

504.35 90.27

#VALUE! -3.06%

September September September September September September September

33313.4 33477.7 (56.0) 978.6 114.6 12.6 743.4

32284.5 32469.6 (99.9) 713.8 79.7 21.6 508.3

32,993.90 33,598.60 -197.5 (2581.70) (268.00) -45 (2301.10)

0.97% -0.36% 71.65% 137.91% 142.76% 128.00% 132.31%

3rd Q09 3rd Q09 3rd Q09 3rd Q09 3rd Q09 3rd Q09 3rd Q09 3rd Q09 3rd Q09

1,924.56 42.13 93.50 1,183.18 13.28 1,687.97 1,658.77 429.20 1,229.57

1,924.56 42.13 93.50 1,183.18 13.28 1,687.97 1,658.77 429.20 1,229.57

1,898.10 42.55 79.14 1,163.47 9.44 1,687.09 1,635.09 342.33 1,292.77

1.39% -0.99% 18.15% 1.69% 40.64% 0.05% 1.45% 25.38% -4.89%

September September September September September

91.47 1.08 0.61 0.69 6.83

95.00 1.09 0.60 0.70 6.83

106.94 1.06 0.55 0.69 6.84

-14.47% 2.46% 10.39% -1.07% -0.13%

Data compiled by University of Alaska Center for Economic Development.

www.akbizmag.com • Alaska Business Monthly • January 2010

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ADVERTISERS INDEX Alaska Aviation Heritage Museum . . . . . . . . . . 49 Alaska Mechanical Inc.. . . . . . . . . . . . . . . . . . . 85 Alaska Miners Association - Fairbanks. . . . . . . 64 Alaska Rubber & Supply Inc. . . . . . . . . . . . . . . 13 Alaska Sales and Service Fleet Elite . . . . . . . . . 3 Alaska USA Federal Credit Union . . . . . . . . . . 42 All Spruced Up Professional Organizing . . . . . 65 American Fast Freight . . . . . . . . . . . . . . . . 29, 95 American Marine/PENCO . . . . . . . . . . . . . . . . 57 Anchorage Opera . . . . . . . . . . . . . . . . . . . . . . . 49 Arctic Controls . . . . . . . . . . . . . . . . . . . . . . . . . 61 Arctic Office Products. . . . . . . . . . . . . . . . . . . . 57 Arctic Slope Telephone Association . . . . . . . . . 64 ASRC Energy Services . . . . . . . . . . . . . . . . . . 58 ATCO Structures & Logistics . . . . . . . . . . . . . . 61 B2 Networks . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 Bear Creek Winery and Lodging . . . . . . . . . . . 50 Bill Z Photography . . . . . . . . . . . . . . . . . . . . . . 14 Brice Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91 Carlile Transportation Systems. . . . . . . . . . . . . 23 Certified Residential Specialist. . . . . . . . . . . . . 41 Chandler Corp. Puffin Inn . . . . . . . . . . . . . . . . . 49 Chris Arend Photography . . . . . . . . . . . . . . . . . 98 Clarion Suites Downtown/ Quality Suites Near Convention Center . . . . 46

98

ConocoPhillips . . . . . . . . . . . . . . . . . . . . . . . . . 15 Construction Machinery Industrial LLC . . . . . . 99 Dimond Center Hotel . . . . . . . . . . . . . . . . . . . . 65 Dowland-Bach Corp.. . . . . . . . . . . . . . . . . . . . . 22 First National Bank Alaska . . . . . . . . . . . . . . . . . 5 Floyd and Sons Inc. - Dollar Rent A Car. . . . . . 51 GCI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Great Originals Inc.. . . . . . . . . . . . . . . . . . . . . . 39 Green Star Inc. . . . . . . . . . . . . . . . . . . . . . . . . . 65 Harvey A. Meier Co. . . . . . . . . . . . . . . . . . . . . . 79 Hawk Consultants LLC. . . . . . . . . . . . . . . . . . . 55 Jens’ Restaurant. . . . . . . . . . . . . . . . . . . . . . . . 50 Judy Patrick Photography. . . . . . . . . . . . . . . . . 18 Juneau Convention & Visitors Bureau . . . . . . . 47 Lynden Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Microcom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 Muzak - Sound Tech LLC . . . . . . . . . . . . . . . . . 65 NANA Development Corp. . . . . . . . . . . . . . . . . . 6 Nenana Heating Services Inc. . . . . . . . . . . . . . 55 Northern Air Cargo . . . . . . . . . . . . . . . . . . . 52, 53 Olgoonik Development Corp. . . . . . . . . . . . . . . 39 OPTI Staffing Group. . . . . . . . . . . . . . . . . . . . . 56 Pacific Alaska Freightways . . . . . . . . . . . . . . . . 69 Parker, Smith, Feek . . . . . . . . . . . . . . . . . . . . . 27

Peak Oilfield Services. . . . . . . . . . . . . . . . . . . . 56 Pippel Insurance. . . . . . . . . . . . . . . . . . . . . . . . 21 Polar Car Rental . . . . . . . . . . . . . . . . . . . . . . . . 50 Princess Tours . . . . . . . . . . . . . . . . . . . . . . . . . 46 Rosie’s Delivery . . . . . . . . . . . . . . . . . . . . . . . . 65 Scan Home. . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 Span Alaska Consolidators . . . . . . . . . . . . . . . 59 Stellar Design Inc.. . . . . . . . . . . . . . . . . . . . . . . 64 Sundog Media . . . . . . . . . . . . . . . . . . . . . . . . . 65 Sunshine Fitness and Sports . . . . . . . . . . . . . . 51 Talaheim Lodge . . . . . . . . . . . . . . . . . . . . . . . . 50 TecPro Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 The Aleut Corp.. . . . . . . . . . . . . . . . . . . . . . . . . 88 The Growth Company . . . . . . . . . . . . . . . . . . . 14 UA College Savings Plan . . . . . . . . . . . . . . . . . 75 Ukpeagvik Inupiat Corp. . . . . . . . . . . . . . . . . . . 33 UMIAQ LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 Unisea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 University of Alaska Anchorage/Engineering . . 77 Usibelli Coal Mine Inc. . . . . . . . . . . . . . . . . . . . 61 Washington Crane and Hoist . . . . . . . . . . . . . . 18 Waste Management . . . . . . . . . . . . . . . . . . . . . 17 Wells Fargo. . . . . . . . . . . . . . . . . . . . . . . . . . . 100

www.akbizmag.com • Alaska Business Monthly • January 2010

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