September-2012-Alaska Business Monthly

ALASKA NATIVE CORPORATION REVIEW SPECIAL SECTION

September 2012

$3.95

Alaska Native Brotherhood 100 Year Anniversary

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September 2012 TA BLE OF CONTENTS dePArtments From the Editor. . . . . . . . . . . . . . 7 Inside Alaska Business . . . . . . 8 Right Moves . . . . . . . . . . . . . . . 30 Alaska This Month. . . . . . . 122 Events Calendar . . . . . . . . . 125 Market Squares. . . . . . . . . . 126 Alaska Trends. . . . . . . . . . . . 127 Ad Index . . . . . . . . . . . . . . . . . 130

FeAtures

© 2012 Chris Arend

VIEW FROM THE TOP

About the cover We’ve selected a photo for the cover of the September issue to honor ANB’s 100th anniversary this year. Founded by a dozen men and one woman in 1912, this photo was taken two years later. Eleven founding members are pictured in the article about ANB. Alaska Business Monthly’s annual Alaska Native Corporation special section begins on page 66.

“Alaska Native Brotherhood convention at Sitka, Alaska, 1914.” The title and description of the cover photo are from a handwritten list (date and writer unknown), identifying people in the Sheldon Jackson College Stratton Library’s photograph of a “1914 ANB CONVENTION AT SITKA,” according to the Alaska State Library.

Front Row (l. to r.): James Watson, Juneau; Frank Mercer, Juneau, but originally from Klukwan; Herbert Murchison, Metlakatla; Chester Worthington, Wrangell; Peter Simpson, Sitka, but originally from Metlakatla; Paul Liberty, Sitka; Edward Marsden (Rev.), Metlakatla; Haines DeWitt, Kake; Unidentified from this list but other Sheldon Jackson information says Mark Jacobs, Sr., Sitka; Charles Newton, Kake.

Second Row (l. to r.): John Willard, Sitka; Woosk-Kee-Nah (Jim Johnson); Seward Kunz, Juneau; Stephen Nickles, Sitka; Donald Austin, Wrangell; George McKay, Saxman; Cyrus Peck, Sr., Sitka; Eli Katinook, Angoon; Chas Daniel Sitka; Don Cameron, Sitka; Ralph Young, Hoonah; Rudolph Walton, Sitka; William S. Jackson, Sitka; Frank D. Price, Sr., Sitka .

Third row (l. to r.): James Gordon, Kluckwan; Andrew Hope, Sitka; George Bartlett, Sitka; Tommie Williams, Sitka; John Williams, Sitka; George Lewis, Sitka; Sergius Williams, Sitka. CREDIT: Alaska State Library – Historical Collections

Articles

MILITARY

12 | Ron Perry, President and CEO Teya Technologies LLC Compiled by Peg Stomierowski

REGIONAL FOCUS

20 | Military Impact Alaska’s defense spending bolsters state economy

By Zaz Hollander

INSURANCE

26 | Court Ruling Leaves Employer Health Benefit Burden Unchanged

By Eric Deeg

© Daryl Pederson / AlaskaStock

ARCHITECTURE & ENGINEERING

14 | There’s No Place Like Nome Gold rush town draws visitors, prospectors

By Tracy Barbour

OIL & GAS

46 | Alaska Hire vis-à-vis Nonresident Workers Political sensitivity not legally enforceable

By Mike Bradner

OIL & GAS

50 | Oil Reform Requires Fiscal Reform Commentary by Bradford G. Keithley

CONSTRUCTION

52 | Cook Inlet Natural Gas Storage Alaska Bringing CINGSA on-line for Railbelt utilities

By Gene Storm

TRANSPORTATION

HR MATTERS 32 | Designs for Aleutian Homes Winning entry won’t be built

By Zaz Hollander

TELECOM & TECHNOLOGY 36 | VoIP Telephony Technology Connecting over the Internet

By Mary Lochner

118 | Right to Return Transportation Alaska law provides seasonal remedy

By Richard Birdsall ■ 4

OIL & GAS

40 | Linc Energy Developing oil, gas and coal

By Vanessa Orr

Photo courtesy of Cook Inlet Tug & Barge

58 | Alaska Tug and Freight Mariners Shipping goods by sea to the 49th state

By Paula Cottrell

HEALTH & MEDICINE 119 | The Eyes Have It Vision care in Alaska

By Susan Sommer

www.akbizmag.com • Alaska Business Monthly • September 2012

September 2012 TA BLE OF CONTENTS special section Alaska Native Corporation Review

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he Alaska Native Brotherhood and the Alaska Native Sisterhood held a 100 Year Anniversary Celebration in Anchorage in June. The anniversary will be celebrated again at the annual convention in October in Sitka, where it all began 100 years ago.

Right: Some of the dignitaries at the ANB 100 Year Celebration held in Anchorage in June, from left to right: Joaqlin Estus, granddaughter of William Paul; Marvin Adams; Alaska Native Sisterhood Executive Committeewoman Selina Everson; ANS Grand President Mary Brown; ANB Executive Committee Senator Albert Kookesh; and ANB Grand 2nd Vice President Sasha Soboleff.

Below left: Ian Erlich, the president and CEO of Maniilaq Association.

Below right: Ishmael Hope, the great-greatgrandson of Andrew Hope, one of the original 1912 ANB founders.

Photos By Mark Hoover.

66 | Alaska Native Brotherhood 100 Year Anniversary A century of progress

By Will Swagel

94 | Native Corporations ‘Pass the Torch’ Rising leaders of the new generation

By Mary Lochner

105 | Sustainable Arctic Communities A Working Conference by and for Alaska Native Peoples

68 | Regional Native Corporation Review

By Julie Stricker

98 | From Timber to Tourism Hoonah evolves to meet its economic needs

By Paula Dobbyn

106 | 2012 Alaska Regional Corporations Directory

82 | Village and Urban Native Corporations Questions of balance

By Will Swagel 88 | Constructing the Future HUD grants improve Alaska Native housing

By Dimitra Lavrakas ■ 6

102 | Mining on Native Lands Balancing resource development with ancient ways

By Julie Stricker

114 | Village Corporation Listings

www.akbizmag.com • Alaska Business Monthly • September 2012

FROM THE EDITOR Follow us on and

Volume 28, Number 9 Published by Alaska Business Publishing Co. Anchorage, Alaska Vern C. McCorkle, Publisher 1991~2009

EDITORIAL STAFF

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

Susan Harrington Mari Gallion Tasha Anderson David Geiger Linda Shogren Chris Arend Judy Patrick

BUSINESS STAFF

President VP Sales & Mktg.

Account Mgr. Account Mgr. Survey Administrator Accountant & Circulation

Jim Martin Charles Bell Anne Campbell Bill Morris Tasha Anderson Mary Schreckenghost

501 W. Northern Lights Boulevard, Suite 100 Anchorage, Alaska 99503-2577 (907) 276-4373 Outside Anchorage: 1-800-770-4373 Fax: (907) 279-2900 www.akbizmag.com Editorial email: editor@akbizmag.com Advertising email: materials@akbizmag.com Pacific Northwest Advertising Sales 1-800-770-4373 ALASKA BUSINESS PUBLISHING CO. Inc. ALASKA BUSINESS MONTHLY (ISSN 8756-4092) is published monthly by Alaska Business Publishing Co. Inc., 501 W. Northern Lights Boulevard, Suite 100, Anchorage, Alaska 99503-2577; Telephone: (907) 2764373; Fax: (907) 279-2900, ©2012, Alaska Business Publishing Co. All rights reserved. Subscription Rates: $39.95 a year. Single issues of the Power List are $15 each. Single issues of Alaska Business Monthly are $3.95 each; $4.95 for October, and back issues are $5 each.

Send subscription orders and address changes to the Circulation Department, Alaska Business Monthly, PO Box 241288, Anchorage, AK 99524. Please supply both old and new addresses and allow six weeks for change, or update online at www.akbizmag.com. Manuscripts: Send query letter to the Editor. Alaska Business Monthly is not responsible for unsolicited materials.

Photocopies: Where necessary, permission is granted by the copyright owner for libraries and others registered with Copyright Clearance Center to photocopy any article herein for $1.35 per copy. Send payments to CCC, 27 Congress Street, Salem, MA 01970. Copying done for other than personal or internal reference use without the expressed permission of Alaska Business Publishing Co. Inc. is prohibited. Address requests for specific permission to Managing Editor, Alaska Business Publishing. Online: Alaska Business Monthly is available at www.akbizmag.com/archives, www. thefreelibrary.com/Alaska+Business+Monthly-p2643 and from Thomson Gale. Microfi lm: Alaska Business Monthly is available on microfi lm from University Microfi lms International, 300 North Zeeb Rd., Ann Arbor, MI 48106.

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‘The Original Environmentalists and Resource Developers’

very year in September Alaska Business Monthly reviews Alaska Native Corporations. We’ve been doing this for about 20 years, which might seem like a long time to some—it really isn’t. This year, we’re doing it again, and one of the stories in our special section is about the 100 year anniversary of the Alaska Native Brotherhood. One hundred years might seem like a long time to many—it does to me, but it really isn’t.

The many thousands of years Alaska Native peoples have been here is a long time—a really long time. In my research for this month’s special section I was most impressed by a speech NANA Regional Corporation Inc. President and CEO Marie Greene gave two years ago via video conference to the Inuit Circumpolar Council’s 11th General Assembly in Greenland. I’m sharing the last few paragraphs with our readers—it’s a powerful message for all.

—Susan Harrington, Managing Editor

I

n our region, we are being pulled—on all sides—by the politics of global warming, development, and conservation. NGOs and people from all sides of the political spectrum are coming to our region. Their message is the same: “We know what is best for this place; we know what is best for your people.”

We must tread carefully in our engagement with these groups. Our ICC Chair, Jimmy Stotts, has also counseled us in this regard. He points out: “the Inuit are being told to scale back our industrial development when we did not contribute to global warming.” He has warned us against forming partnerships with environmental activists because they are also opposed to subsistence activities, like whaling, seal and caribou hunting, and fishing, which form the cornerstone of our cultural identity.

We must heed his words and proceed with caution. Any mistake we make in this engagement can be costly and may—in the long run—limit our ability to make decisions about our lands—to determine our destiny. I am concerned that these groups are working to create a political and economic environment where we must turn to them for permission, approval or partnership. They insist that we need to be protected from ourselves —— and they are dividing us.

We must remember we are all tied together by a common bond. We share common values. We share common languages, cultures, and kin. Our peoples are the first peoples of our nations. We must work together. We must not allow anything, or any group, to drive wedges between our tribes and our corporations—to pit village against village, region against region, country against country, or brother against brother.

As the Arctic becomes more accessible to the Outside world, as the world moves closer to our borders; into our waters; over our lands—we must work together to protect them. We must stand together. We face strong Outside influences and we will need each other when this storm comes. If we are united, we will succeed. I urge us, as Inuit peoples of the North, to make a pledge to consult not only with our own peoples but with each other. To make every effort to work through our differences so we can face the world in the strength of unity. We must remind the rest of the world who we are. We must remind them of our strength, resilience and adaptability. We must remind them that we are the original environmentalists and resource developers—we will determine—together—how to use our lands to benefit our people and protect our subsistence resources and cultures.

We will have a place at the table in all decisions that affect our lands.

We will show the world that though we speak our different languages—we are one people—we are the Inuit—and this land is ours.

Quyaanna—Thank you and God bless you.

—Marie N. Greene, June 28, 2010

www.akbizmag.com • Alaska Business Monthly • September 2012

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INSIDE ALASKA BUSINESS

Davis Wright Tremaine

C

hambers USA: America’s Leading Lawyers for Business 2012 has recognized seven attorneys from Davis Wright Tremaine’s Anchorage office as leaders in their fields. The Anchorage office was also awarded a top ranking in three practice areas: Corporate/M&A, Labor & Employment and Real Estate.

The Anchorage attorneys chosen as leaders in their fields are: Jon S. Dawson (Corporate/M&A; Litigation: General Commercial; Real Estate), Gregory Fisher (Labor & Employment), James H. Juliussen (Labor & Employment), Barbara Simpson Kraft (Corporate/M&A; Real Estate), David W. Oesting (Litigation: General Commercial), Joseph Reece (Corporate/ M&A; Real Estate), Robert K. Stewart (Labor & Employment).

Alaska Energy Authority

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he Alaska Energy Authority is soliciting grant applications for renewable energy projects to be funded by the Alaska State Legislature. The Round 6 application period is now open. AEA has lengthened this year’s application period by approximately one month. AEA must receive Round 6 applications no later than 5 p.m., Monday, September 24.

In 2008, the Alaska Legislature established the Renewable Energy Fund and authorized AEA to administer procedures for awarding the grants and distributing grant funds. In previous rounds, AEA received more than 550 applications which were thoroughly evaluated in accordance with criteria set forth in the legislation.

Compiled by Mari Gallion

Following AEA’s recommendations, the Legislature approved 208 Rounds 1-5 renewable energy projects totaling $202.5 million.

AEA is seeking to recommend projects based on applications that clearly demonstrate a public benefit from the proposed project. From Round 6 applications received, AEA will make project recommendations to the Legislature for FY2014 funding. A new link to the Round 6 web page is available from AEA’s home page, www.akenergyauthority.org.

Northwest Strategies

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he Telly Awards has named Northwest Strategies as a seven-time winner in the 33rd Annual Telly Awards, the premier award honoring outstanding local, regional and cable TV commercials and programs, the finest video and film productions, and online commercials, video and films.

The following pieces have been selected as winners: Silver and two-time bronze winner for the long-form video titled “Tobacco Prevention and Control Matters,” Bronze winner for the long-form video titled “Alaska Native People: The Tobacco Prevention and Control Movement,” the campaign titled “Great for Business,” for the piece titled “Great for Business: Chilkoot Charlie’s” and for the piece titled “Obsession with 6.”

McCool Carlson Green

T

he Council of Education Planners International announced McCool Carlson Green’s principal architect, Michael Carlson, AIA, CSS, REFP as the

2012 CEFPI Pacific Northwest Planner of the Year for his excellence in designing student learning environments.

Michael Carlson’s award winning designs can be seen in the recent Su-Valley School, Fred and Sara Machetanz Elementary School, and the Chester Valley Elementary School, all of which achieved a LEED Silver rating.

Ted Stevens Anchorage International Airport

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nchorage Airport Police and Fire Officer Eric Horvath represented Ted Stevens Anchorage International Airport in the Alaska Peace Officers Association Sponsored “Law Enforcement 3-Gun Competition.” Participants competed in a four stage event: pistol, shotgun, rifle and ambush.

Officer Horvath earned second place overall, placing first in the rifle portion of the competition, and second in ambush.

Anchorage Airport Police Officers are state police officers certified by the Alaska Police Standards Council.

Their rigorous training and qualifications includes completion of the Alaska State Trooper Policy Academy and field training. In addition, all officers are cross-trained as state firefighters, a unique combination crafted to serve the population served by the Ted Stevens Anchorage International Airport.

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Alaska DOT&PF

ack Stickel, Alaska Department of Transportation and Public Facilities transportation information group

Your Project, Our Responsibility.

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

www.pacificpile.com I (907) 276-3878 276-3873 ■ 8

From critical lifts to platform support, PPM is sufficiently resourced to deliver a wide range of construction services.

620B East Whitney Road I Anchorage, AK 99501

www.akbizmag.com • Alaska Business Monthly • September 2012

INSIDE ALASKA BUSINESS manager, was honored by his peers at the Western Association of State Highway and Transportation Officials annual conference in Colorado Springs, Colo., by winning the prestigious Dr. L.I. Hewes Award. The award recognizes a recipient’s outstanding contribution to the highway development program in the Western Region of the United States.

Stickel’s leadership skills are an accumulation of more than 20 years in developing solutions to meet DOT&PF’s transportation data requirements. Stickel’s work can be viewed across the entire state from weather cameras and sensors along the Klondike Highway to mobile phones when checking Alaska 511 for current weather and driving conditions.

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Yakutia Airlines

akutia Airlines is providing seasonal passenger and cargo service to eastern Russia. The airline received final approval from the US and Russian governments for passenger and cargo service between Petropavlovsk-Kamchatsky and Anchorage in May. Scheduled service began July 12, running weekly through September 13.

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Eyak Preservation Council

he Eyak Preservation Council in Cordova received a grant from First Nations Development Institute through its Native Agriculture and Food Systems Initiative to develop an environmentally friendly food processing and cold storage plant to support and

Compiled by Mari Gallion

preserve sustainable and independent food harvesting in rural Alaska. The grants were made possible through the Walmart Foundation.

Northern Air Cargo

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orthern Air Cargo entered in to a lease agreement with Ted Stevens Anchorage International Airport for aeronautical use of space at the former Kulis Air National Guard Base. This is the first air operator to make use of the opportunity to lease the space.

Northern Aviation Services, a division of NAC, has reconfigured the building that once served as the mess hall and kitchen, transforming it into a fi rst class charter terminal for the use of their client, Shell Alaska Exploration. The facility will be supporting transportation of Shell’s employees and contractors during the summer offshore exploration season. NAC has also chartered a Boeing 737-400 passenger aircraft from Miami Air which will be based at the former Kulis base as well.

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AmeriCorps

ural Alaska Community Action Program and Nine Star Enterprises Inc. were awarded grants from AmeriCorps. The grants were awarded to member organizations that coordinate and implement community environmental improvements in village solid waste management use, recycling and backhauling solid waste, and conduct energy efficiency and environmental education programs in remote Alaska villages; help local wellness co-

alitions to plan, implement, evaluate and reflect on service projects which build youth resiliency and prevent substance abuse and suicide in youth ages 12 to 18; service in education and employment as well as volunteer recruitment for programs that target ex-offenders, unemployed and underemployed individuals.

NANA Construction LLC

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ANA Construction LLC recently turned over its first, full-service camp to new owners in Deadhorse.

The camp was manufactured at NANA Construction’s Big Lake fabrication facility where it took about 10 weeks to complete. The camp sleeps 58 people and includes kitchen, dining and recreation facilities for up to 150. The camp, built for oilfield service company MagTec Alaska, is made up of 31 modules that were each trucked up to the North Slope and assembled on site.

NANA Construction also chose the Big Lake area because of the available workforce, and has added a training facility to the campus. NANA Construction is already at work on its next order: a camp that will house 82 workers. The company is capable of building up to six large to medium scale full-service camps each year.

ASRC Energy Services

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SRC Energy Services Inc. broke ground on an expansion and upgrade to its Rig Tenders Dock marine facility in Nikiski. The $9.4 million upgrade is expected to be completed in 2013 and will allow AES to pursue

Your Project, Our Responsibility. 24/7 Service

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

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

From critical lifts to platform support, PPM is sufficiently resourced to deliver a wide range of construction services.

620B East Whitney Road I Anchorage, AK 99501

www.akbizmag.com • Alaska Business Monthly • September 2012

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INSIDE ALASKA BUSINESS new marine service opportunities as oil and gas exploration activities increase in Cook Inlet, as well as the Chukchi and Beaufort Seas. Additionally, the upgrade will complement current construction and fabrication projects at the adjacent Kenai Fabrication Shop.

AES also broke ground in late June in New Iberia, La., at its subsidiary, Omega Natchiq Inc., to build a 45,000-square-foot, under-roof fabrication facility that will feature eight 20-ton overhead cranes and 75 welding stations. The under-roof facility is expected to curb delays and work days lost due to inclement weather. Omega Natchiq provides fabrication, construction and technical services for energy producer clients operating in the Gulf of Mexico. The $4.87 million dollar project is expected to be complete and operational this fall.

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Calista Corp.

alista Corp. authorized a $10,000 donation to be made to the Eddie Hoffman Senior Center in Bethel, the hub community for the large YukonDelta region, a region that is approximately 10 percent of the land area of Alaska. The Y-K region is home to approximately 24,000 people and more than 6 percent of the population is 65 years of age or older, according to 2010 State of Alaska DCED data.

Owned and operated by the Orutsararmiut Native Council, the Bethel Native tribal corporation, the Senior Center provides a host of services to the elders in the community. Services are provided in part through nutrition, transportation, and support services

Compiled by Mari Gallion

grant funding. Extremely high heating and electrical costs strain the center’s budget and limit services.

SLR Management Ltd.

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LR Management Ltd., an international environmental consultancy with offices in Anchorage and Fairbanks, raised a further $23 million in acquisition finance to continue its international expansion. Combined with internal funding, this will enable SLR to acquire environmental consulting businesses with an aggregate enterprise value up to $80 million.

Over the past five years, SLR has successfully completed the acquisition of 12 businesses in Australia, Canada, Europe, Namibia, South Africa and the US to augment its strong organic growth.

This strategy remains unchanged and SLR will continue to target high-quality consulting firms in growth regions and market sectors, particularly in energy and natural resources.

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Anchorage Sister Cities Commission

nchorage celebrates 30 years of sister city relationships between Anchorage and Darwin, Australia.

Darwin, an Anchorage Sister City since 1982, is the capital of Australia’s Northern Territory. Situated on the Timor Sea, Darwin is about 2,000 miles northwest of Canberra, Australian Capital Territory. A port city, Darwin was founded in 1869 and grew rapidly with the discovery of gold at nearby Pine Creek in 1871. Darwin was named

for famed British naturalist Charles Darwin by his shipmates aboard the HMS Beagle.

Similar to Anchorage, Darwin’s residents have ready access to outdoor adventures, superb national parks, exotic wildlife viewing, and premiere fishing and diving. Darwin is considered to be Australia’s northern gateway and in 2011 Australians were the No. 1 foreign visitor to Alaska.

Anchorage has five other Sister Cities: Chitose, Japan; Incheon, Korea; Magadan, Russia; Tromso, Norway; and Whitby, England. The Anchorage Sister Cities Commission is comprised of nine commissioners who serve threeyear terms and are appointed by the Mayor of Anchorage.

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Alaska USA

laska USA Federal Credit Union has been selected as the 2012 Family-Friendly Workplace Award winner by the Fairbanks North Star Borough and the Early Childhood Development Commission.

Alaska USA won among nonprofit organizations with more than 25 employees. More than 60 organizations in Interior Alaska were nominated by their staff.

Among the entries, Alaska USA employees continually cited management’s flexibility and understanding of family time. One employee explained how her coworkers donated hundreds of leave hours when her child needed medical care out of state. Another employee noted the credit union’s support for military families, especially when a spouse is deployed overseas. 

• General Contracting • Marine Infrastructure • Design Build

Dutch Harbor - Unalaska, Alaska

www.pacificpile.com I (907) 276-3873 ■ 10

620B East Whitney Road I Anchorage, AK 99501

www.akbizmag.com • Alaska Business Monthly • September 2012

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View from the Top

Compiled By Peg Stomierowski

Ron Perry, President and CEO Teya Technologies LLC

T

eya Technologies, started in 2005, won its first federal logistics contract shortly thereafter with Langley Air Force Base in Virginia. Today it conducts multiple lines of business for government and commercial clients, including design/ build construction, project management, information technology, administrative support and event planning.

The firm was created by Ron Perry, an Alaska Native and longtime small business entrepreneur, and the Village of Salamatof, which was interested in exploring the Small Business Administration’s 8(a) program. Teya became certified in 2006 as an Alaska Native Corporation certified 8A enterprise. Perry had learned the 8(a) ropes when he guided an earlier startup of his called Microware Inc. through the process in 2009, a firm that continues to provide IT support for Alaska businesses.

LOOKING BOTH WAYS: With the economic recovery remaining fragile, unemployment above 8 percent, an impending presidential election and the federal government again failing to achieve its own small business goals, Teya is moving forward with caution.

TARGETED GROWTH: We target opportunities for doing what we do well and form top-ofthe-line partnerships. The growth we’ve enjoyed in the last few years is owed largely to finding fit partners and going after contracts that we have a better-than-average chance of securing.

TEAMING APPROACH: We found the best way to get into new agencies and business lines is to partner with successful firms that understand they cannot do everything alone. Great businesses realize their limitations and know when to partner. Teya was just recognized as the American Express OPEN™ Teaming Partner of the Year.

WHY USE YOU: While the 8(a) program has had its first major clarifications and changes in more than 10 years, the basic principle hasn’t changed, and once you obtain certification, you still need to market yourself. Agencies need to know why they should use you.

NICHE MARKETS: These days in the federal arena, a jack of all trades has limited appeal. Companies are specializing. You must be very good at what you do. Federal agencies seek to work with firms that can set themselves apart with clearances, skill sets, software and technologies.

TRUST BINDS: Relationships with partners and team members have to be rock solid. You need to perform due diligence and know everything about your partners: financial strength, past performance, ethics, personalities, etc. Face-to-face meetings are crucial. You have to trust that your partners can perform, and they have to trust that you can do your part. When everyone does their part, business gets done.

RECRUITING WELL: We’ve not had any lack of applicants, but finding the proper fit is key. We use employment services and our partner network. Most federal contracts have requirements for each procurement.

INFRASTRUCTURE: We’ve had to bolster accounting, IT, and management teams to keep up with business and data demands. With more employees comes standardization, compliance concerns, ethics training and workforce growth and enrichment.

© 2012 Chris Arend

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DIVERSIFY, SPECIALIZE: Some federal agencies face budget cuts, and more companies will be competing for less work. Strategic planning is essential. At Teya, we plan to follow the money and diversification, and we are eyeing real estate and global opportunities.  www.akbizmag.com • Alaska Business Monthly • September 2012

Regional Focus

By Tracy Barbour

There’s No Place Like Nome

© Michael DeYoung / AlaskaStock

Last Train to Nowhere near Solomon, Nome-Council Road.

Gold rush town draws visitors, prospectors

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erched at the edge of the Bering Sea on the south coast of the Seward Peninsula, Nome sits 102 miles south of the Arctic Circle, 161 miles east of Russia and 539 air miles northwest of Anchorage. As a vital community hub, Nome is mostly a governmental service provider for the Bering Strait/Norton Sound Region. The city is home to about 10,000 residents.

Gold Rush Town

Since the 1899 discovery of gold in Anvil Creek, Nome’s history has been closely connected to the mining industry. That association is even stronger today with the current gold rush that’s unfolding. High prices have triggered a renewed sense of gold fever, according to Barb Nickels, executive director of the Nome Chamber of Commerce.

According to Nickels, the State of Alaska’s Division of Natural Resources just issued 135 recreational offshore ■ 14

suction dredge mining permits to go along with the 39 professional offshore dredge mining permits. DNR also has opened up a second recreational dredge mining area along Nome’s West Beach to accommodate the anticipated influx of new gold seekers.

Last August, DNR auctioned 23,793 acres of marine placer gold prospects in two groups: 53 small parcels—ranging from 40 acres to 160 acres—and 31 larger tracts. Many of the smaller parcels were purchased by locals, with most of the larger tracts (1 mile offshore) bought up by Anglogold Ashanti Ltd. and De Beers. The Gold Prospectors Association of America’s Cripple River Gold Camp has also added two additional gold camp sessions to accommodate the interest in gold prospecting and mining. “All of this activity is welcome by the chamber, and we continue to support, encourage and welcome visitors to Nome,” Nickles says.

In terms of what’s happening shore side, Nome Gold Alaska Corp. has purchased about 11,000 acres of Alaska Gold Co.’s placer gold patented claims in and around Nome. The company plans to begin placer operations using traditional mining methods on a small scale and ultimately ramp up to year-round operations, Nickels says. In addition, Edmonton, Alberta-based Graphite One Resources has begun drilling their Graphite Creek Property located approximately 120 miles north of Nome.

Six miles east of Nome, NovaGold Resources Inc. recently sold the shuttered Rock Creek open-pit gold mine to Bering Straits Native Corp., which plans to assess the mine and either operate it or reclaim the property. The mine is now in care and maintenance status.

The Discovery Channel’s “Bering Sea Gold” show is also fueling the intensified interest in gold. Each time after the show aired, the chamber and

www.akbizmag.com • Alaska Business Monthly • September 2012

City of Nome became inundated with phone calls from aspiring miners. The show is currently taping a second season and has contracted with the major players for an additional five years.

“We anticipate the future success of this show will play a big role in the recreational area offshore dredging mining interests—even for those who had never imagined they had an interest,” Nickels says.

Gold mining activities will bring new people with new money to the area.

This will lend support to the economic viability of the city’s businesses, as well as offer more employment opportunities. “While I can’t quote the number of new people coming here,” Nickels says, “so far this summer you can certainly see many four-wheelers running around town with all sorts of gold mining apparatuses strapped aboard.”

our local businesses, but it is especially beneficial to our surrounding communities who have the resources to send one person to a conference in Anchorage or Fairbanks. They can use these same resources to send three persons to Nome to participate,” Nickles says.

Fishing is another key industry of Nome. With its easy access to the Bering Sea, the city’s economy benefits from herring, pollock and Pacific cod fishing, as well as salmon fishing.

The local, state and federal government sector also plays a critical role in Nome’s economy.

Economic Development

With its rich history and diverse culture, Nome offers unique opportunities for the right entrepreneur, Nickels says.

So what makes Nome a distinctive place to do business? Based on a recent survey of chamber members, a key factor is its proximity to resources, services and amenities, along with the following: ■Good selection of downtown office space ■ Small-town atmosphere where everyone is willing to step up and help out

HAS YOUR BUSINESS GONE MOBILE? Your shareholders, customers and competitors have.

Tourism

Like mining, the tourism industry continues to be a major element of Nome’s economy. Tourists have always been drawn to Nome because of its gold-mining history. Nome may have a great deal of historic ambiance, but it’s a bustling city with plenty of activities, shopping and restaurants to engage tourists, Nickels says. Tourism is a major component to the success of local businesses, and Nome has the basic infrastructure needed to serve as a successful visitor destination. “Our excellent jet service through Alaska Airlines—three flights daily—a recently improved cruise ship dock to accommodate small cruise vessels, and a range of accommodations, interesting attractions and a variety of tours all play an integral part of this success,” Nickles says.

Nome has meeting facilities that can host up to 600 people, and the local chamber of commerce is working on expanding that capacity. As a part of its marketing plan, the chamber has initiated a Conventions and Meetings Division to entice more year-round visitors.

The division has so far contracted with more than 31 state, federal, nonprofit and private individuals to host their meetings, conferences, trainings or other events in Nome.

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However, as with any small town, there are challenges to operating a successful enterprise in Nome. The biggest one, according to Nickels, amounts to general operation costs.

“The cost of energy continues to rise and many businesses are still trying to catch up from fuel bills from last January—one of the coldest months on record for Nome,” Nickels says.

“Also, the hourly wages that Nome businesses need to pay are significantly higher than those in a larger Alaska city or the Lower 48 for similar positions. And this takes a bite right off the top of a company’s profits.”

While Nome is feeling the pain of the high cost of energy—like the rest of rural Alaska—the city is working on a solution, according to Mayor Denise Michels. The City Council has retained a consultant to look at all the energy studies and create an implementation plan to move those potential projects forward to lower the cost of doing business and living in Nome. Nome Joint Utility is also working to add an additional wind turbine to help offset the cost of diesel for rate payers this fall.

Logistics, according to the chamber’s research, is the second-most challenging factor of running a business in Nome. To compensate, most local businesses purchase the bulk of their goods outside of Nome. The cost of shipping materials to Nome is so expensive that many businesses rely on bypass mail, which employs private air carriers to move cargo to rural communities at subsidized rates. “This service continues to be under attack by those legislative representatives perhaps not fully understanding that we don’t have roads, and that this service is essential to our quality of life,” Nickels says.

Another difficulty is the lack of accommodations. Nome has 159 beds available for rent through hotels and bed and breakfast establishments. During the Iditarod Trail Sled Dog Race, for example, there aren’t enough beds for

www.akbizmag.com • Alaska Business Monthly • September 2012

© Daryl Pederson / AlaskaStock

the thousand or so people who travel to Nome to watch the end of the race.

To mitigate the housing shortage, the chamber is promoting an overflow housing program that connects guests with locals who are willing to rent a house, room or even floor space. Such alternative housing is especially beneficial to local businesses because it allows more people to visit and use their services, Nickels says.

Business-Friendly Environment

Michels says Nome is constantly working to create a business-friendly environment. The Nome Common Council and Administration, for example, does its best to have ordinances in place for citizens to conduct business. The City Council interacts with the business community to resolve issues when they’re brought forth. And the council is looking at the current sales tax ordinance and pull tab ordinance in an effort to streamline the process.

“To improve better communication between the business community and the city government, per the Nome

Green northern lights dance over a historical gold dredge near Nome.

Chamber of Commerce’s bylaws, a council person now sits on their chamber board and reports at the council on chamber activities,” Michels says.

Businesses that are opening or relocating in the area can take advantage of the new-business program at the Norton Sound Economic Development Corp.

NSEDC provides technical assistance for

business development and startup funds.

The program has been the catalyst for a local restaurant and a bakery. Kawerak Inc. is another useful resource. The organization—which manages grants and other funding sources for 20 tribes in the Bering Straits region—helps with business plans, budgeting, website development and other needs.

www.akbizmag.com • Alaska Business Monthly • September 2012

17 ■

Commercial Real Estate

Nome Borough Demographics People QuickFacts Population, 2011 estimate Population, 2010 (April 1) estimates base Population, percent change, April 1, 2010 to July 1, 2011 Population, 2010 Persons under 5 years, percent, 2011 Persons under 18 years, percent, 2011 Persons 65 years and over, percent, 2011 Female persons, percent, 2011 White persons, percent, 2011 (a) Black persons, percent, 2011 (a) American Indian and Alaska Native persons, percent, 2011 (a) Asian persons, percent, 2011 (a) Native Hawaiian and Other Pacific Islander persons, percent, 2011 (a) Persons reporting two or more races, percent, 2011 Persons of Hispanic or Latino Origin, percent, 2011 (b) White persons not Hispanic, percent, 2011 Living in same house 1 year & over, 2006-2010 Foreign born persons, percent, 2006-2010 Language other than English spoken at home, pct age 5+, 2006-2010 High school graduates, percent of persons age 25+, 2006-2010 Bachelor’s degree or higher, pct of persons age 25+, 2006-2010 Veterans, 2006-2010 Mean travel time to work (minutes), workers age 16+, 2006-2010 Housing units, 2010 Homeownership rate, 2006-2010 Housing units in multi-unit structures, percent, 2006-2010 Median value of owner-occupied housing units, 2006-2010 Households, 2006-2010 Persons per household, 2006-2010 Per capita money income in past 12 months (2010 dollars) 2006-2010 Median household income 2006-2010 Persons below poverty level, percent, 2006-2010 Business QuickFacts

Nome Census Area

Alaska

9,856 9,492 3.8% 9,492 10.7% 34.1% 6.4% 46.9% 17.4% 0.5% 74.6% 1.1% 0.1% 6.2% 1.6% 16.7% 81.7% 1.1% 27.9% 83.8% 14.9% 693 5.9 4,008 56.2% 17.4% $144,600 2,693 3.31 $20,549 $53,899 24.6%

722,718 710,231 1.8% 710,231 7.5% 26.1% 8.1% 48.1% 67.9% 3.6% 14.9% 5.6% 1.1% 7.0% 5.8% 63.7% 78.6% 7.2% 16.5% 90.7% 27.0% 71,798 18.1 306,967 64.7% 24.6% $229,100 248,248 2.68 $30,726 $66,521 9.5%

Nome Census Area

Alaska

155 2,160 19.9% 435 629 F 45.2% F F F S 0 D 63,167 $6,785 10,198 2 156,073

19,901 252,882 23.4% 51,137 68,728 1.5% 10.0% 3.1% 0.3% S 25.9% 8,204,030 4,563,605 9,303,387 $13,635 1,851,293 877 12,615,329

Nome Census Area

Alaska

22,961.76 0.4 180 None

570,640.95 1.2 2

Private nonfarm establishments, 2009 Private nonfarm employment, 2009 Private nonfarm employment, percent change 2000-2009 Nonemployer establishments, 2009 Total number of firms, 2007 Black-owned firms, percent, 2007 American Indian- and Alaska Native-owned firms, percent, 2007 Asian-owned firms, percent, 2007 Native Hawaiian and Other Pacific Islander-owned firms, percent, 2007 Hispanic-owned firms, percent, 2007 Women-owned firms, percent, 2007 Manufacturers shipments, 2007 ($1000) Merchant wholesaler sales, 2007 ($1000) Retail sales, 2007 ($1000) Retail sales per capita, 2007 Accommodation and food services sales, 2007 ($1000) Building permits, 2011 Federal spending, 2010 Geography QuickFacts Land area in square miles, 2010 Persons per square mile, 2010 FIPS Code Metropolitan or Micropolitan Statistical Area

(a) Includes persons reporting only one race. (b) Hispanics may be of any race, so also are included in applicable race categories.

FN: Footnote on this item for this area in place of data NA: Not available D: Suppressed to avoid disclosure of confidential information X: Not applicable S: Suppressed; does not meet publication standards Z: Value greater than zero but less than half unit of measure shown F: Fewer than 100 firms Source: US Census Bureau State & County QuickFacts ■ 18

Realtor Melissa Ford says Nome has a “healthy” commercial real estate market. Ford, the broker/owner of Nome Sweet Homes, says a number of downtown properties are being slated for remodel to accommodate the new growth that Nome is experiencing. “With the 2012 Gold Rush in full swing, we are seeing quite a bit of growth as new services are being offered, from assayers to fabric stores to coffee shops and restaurants,” she says.

The Front Street area has had several recent sales, with the new Bering Sea Restaurant being opened and the purchase of the Federal Building by private ownership. The lack of buildable land and other market factors have initiated several trends in the commercial real estate market in Nome. It’s not uncommon to see residential properties being converted to businesses. For example, two recent eateries on Bering Street were previously single-family homes that were transformed for business use.

“This area is ripe for development, as it is located between the downtown area and the harbor, where the traffic from the mining community has increased dramatically this year,” Ford says.

There’s also an increased interest in older buildings. Some of the derelict properties that previously weren’t being considered for use suddenly have new buyers ready to convert them. The gold rush and construction of a new regional hospital are fostering many service industries. This, in turn, is creating a greater demand for office space, residences and warehouse opportunities.

Ford says the recent sale of mining leases in the Bering Sea has created a virtual population explosion, and the opening of the hospital is expected to bring more than 100 new employees into Nome—which is already experiencing a housing shortage. Ford says, “This is a great time to take advantage of the remaining (viable) properties that are zoned for commercial use.”

Stable Market

Real estate manager Robert Gilley said he also feels Nome has a stable commercial market. “I think it’s doing well,” he says. “We have 93 percent occupancy.”

Gilley is the Nome property manager for Bering Straits Development

www.akbizmag.com • Alaska Business Monthly • September 2012

Co., a subsidiary of Bering Straits Native Corp. As part of his job, he operates Aurora Inn and Suites and manages a large, three-story commercial building on Front Street. With its prime location and amenities, the upscale building has very few spaces for lease. “We have a couple of different classes: one commercial space and other spaces that would be suitable for office type rentals,” Gilley says.

Nome could use a few more “reasonable-sized” commercial buildings to accommodate the current demand for office and retail space, Gilley says.

The city has a mix of older and newer commercial buildings, with one of the newest additions being the Sitnasuak Native Corp. building. The commercial building that Gilley manages is among the older properties in town.

Built in the 1930s, the building has undergone several additions and major remodels over the years.

Construction projects are always a challenge to complete in Nome. With its remote location, all building materials must be flown or shipped to the area. Barges come only three or four

times a year, which equates higher costs for goods. The permafrost beneath most of Nome also presents difficulties. For instance, the Aurora Inn and Suites had to go through extensive efforts to build 33 additional rooms in 2003. Gilley explains, “We drove piling 60 feet to add the addition to the hotel.”

Infrastructure

An integral component of Nome’s infrastructure is the Port of Nome. The City Dock, located on the port’s causeway, handles bulk cargo and fuel deliveries. The WestGold Dock handles the region’s rock and gravel exports, as well as heavy equipment. Recently, the city expanded the causeway, added a barge landing to enhance loading, and included an additional floating dock. The improvements helped to make the facility more accessible to larger vessels, as well as more functional and safer.

Nome’s infrastructure also contains 350 miles of roads that are accessible from mid-May until the end of October.

The city relies on a variety of modes of transportation, including walking,

all-terrain vehicles, snowmobiles and other vehicles. Currently, a construction project is taking place to improve the Nome Council Road. Pro West Contractors LLC was recently awarded more than $20 million in contracts for work on MP 4-16 of the Nome Council Road and to replace the Nome Snake River Bridge.

Another major project is the replacement facility for Norton Sound Regional Hospital. The new 150,000 square-foot hospital will offer the latest equipment, technology and other amenities. The tribally owned nonprofit Norton Sound Health Corp will own and operate the new hospital, scheduled to open in December, culminating a multi-year, $100 million construction project awarded with stimulus funds by the Indian Health Service to Inuit-NCI JV, a joint venture formed between Bering Straits Native Corp. subsidiary Inuit Services Inc. and Anchorage-based Neeser Construction Inc.  Writer Tracy Barbour owns a marketing company in Tennessee.

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www.akbizmag.com • Alaska Business Monthly • September 2012

19 ■

militArY

U.S. Air Force photo/Tech Sgt. Brian Ferguson

Joint Air Operations: JBER troops join forces for 6th Engineer airborne mission. A C-17 Globemaster III from the 517th Airlift Squadron flies over an Alaska mountain range, before dropping soldiers from the 6th Engineer Battalion (Combat) (Airborne) Feb. 7.

Military Impact Alaska’s defense spending bolsters state economy

BY ZAZ HOLLANDER

A

laska’s military defends the nation. But Alaska-based fighting forces have also been a significant safeguard when it comes to the state’s economy. Federal spending by the US military in Alaska—though expected to decline in coming years— constitutes a major economic engine that brought an infusion of spending during tough times.

Here’s one way to look at it: A decadelong force buildup and construction boom by Alaska’s military probably

■ 20

helped spare the state from the worst of the economic woes that hammered the Lower 48 these past few years.

“If you see it as an industry, which it basically is, the United States of America is paying Alaska to defend the nation and they’re providing all the resources,” says Alaska Department of Labor and Workforce Development economist Neal Fried. “It was a big source of growth in the last decade for Alaska, and one of the reasons we experienced only a glancing blow from the recession.”

Three-quarters of the federal jobs in Alaska are military, if you include both uniformed military and civilian employees. The US Department of Defense is the state’s largest federal entity, employing nearly 30,000 Alaskans, according to the Alaska Department of Labor & Workforce Development.

Alaska’s concentration of veterans is the highest in the nation at 15 percent of the state’s adult population. Military retirees receive hundreds of millions of dollars in benefits.

www.akbizmag.com • Alaska Business Monthly • September 2012

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The military’s economic might reaches many business sectors. Defense construction spending, while down this year, added up to more than $1 billion in 2010 and 2011. Alaska corporations benefit from those contracts.

Military members and their families spend money in their home communities of Kodiak, Anchorage, Fairbanks, Delta Junction or Juneau. Fairbanks, for example, boasts about 8,000 military members and 10,000 family members and retirees. Translate those people to consumers and you’ve got an economic driver that reaches $800 million a year, according to the Fairbanks Economic Development Corp.

There are less direct effects to Alaska’s military presence, too. Consider the economic benefits of the US Coast Guard, saving the lives of fishermen and others, as well as vessels and property.

“If you rescue someone, that means they can go back to work,” says Coast Guard Lt. J.G. James Dooley, based in Juneau.

Boom and Bust

Today, military personnel and their families make up 8 percent of the state’s

■ 22

population, most living in Anchorage, Fairbanks and Kodiak.

More than half a century ago, military personnel helped build the state’s infrastructure as the nation reacted to the threat of Japanese attack during World War II. Soldiers carved the Alaska-Canada Highway from mountain, mud and tundra. The government built Elmendorf Air Force Base and Fort Richardson, today known as Joint Base Elmendorf-Richardson. Installations like the Nike Missile Site above Eagle River came in response to Cold War threats.

Military spending cooled as the Cold War fizzled. A state economic “Trends” report on federal spending explains the subsequent drop in Alaska’s military population: “The drop in troop levels between 1970 and 1980 marked the end of the Vietnam War but it also represented the transition from a mandatory military service to an all-volunteer army. In addition, the realignment campaign of the 1990s meant Alaska lost nearly 24 percent of its military population, which hit rock bottom in 2001.”

That was before the terrorist attacks of 9/11.

Numbers of uniformed military climbed from 17,042 in 2001 to 20,168 three years later. By 2007, that active duty number rose to 23,141—a 36 percent increase over 2001, or 6,099 troops.

The US Army accounted for all of the increases, doubling its numbers in Alaska since 2000. The Army represents more than half the state’s armed forces today.

The Books

The payroll this year at Joint Base Elmendorf-Richardson totaled more than $1.06 billion, $837 million going to military payroll. The remainder went to civilians—$206 million—and base exchange or private organizations, $23 million.

Total local construction contracts amounted to nearly $116 million, with military construction accounting for nearly $58 million of that total. Services contracts totaled more than $76 million.

The payroll at Eielson Air Force Base this year totaled $212 million, $174 million going to military payroll. The remainder went to civilians—$30 mil-

www.akbizmag.com • Alaska Business Monthly • September 2012

© Accent Alaska - All Rights Reserved www.kengrahamphotography.com

A U.S. Air Force pilot gets into his F-22 Raptor during an air show at Joint Base Elmendorf-Richardson near Anchorage.

lion—and base exchange or private organizations, more than $7 million.

Total local contracts amounted to more than $98 million, with construction accounting for $79 million, service $8 million and health/Tricare $6 million.

At Fort Wainwright, spending totaled $800 million in the last fiscal year, with $435 million of that going to military salaries and some $105 million for military construction. Local contracts were responsible for nearly $53 million.

As of 2010, the Coast Guard made up only about 9 percent of Alaska’s military population. But the Coast Guard maintains an outsized presence here.

The Coast Guard base at Kodiak is the biggest in the nation, with roughly 900 personnel. Another 400 personnel serve in Juneau. Last year, Coast Guard personnel in Alaska saved life and property in more than 500 cases, including 83 medevacs, 28 vessels aground or capsized, and seven aircraft crashes. That adds up to $1.4 million in property saved.

■ 24

Plus, Juneau boasts no military post or base exchanges—tax-free department stores available to military and dependents—so local grocers and other retailers benefit from the business.

In 2009, the most recent year for which data is available, nearly 5,000 Alaskans were in the Reserves and National Guard, with a payroll of nearly $91 million, according to “Trends” data. Currently, there are about 4,000 Guardsmen.

In general, investments in the military presence in Alaska help the state “grow a stronger Alaskan economy, including modernized and enhanced infrastructure that makes the state more attractive for businesses and economic growth,” MSgt. Mikal Canfield, a spokesman for the Alaskan Command, wrote in an email. “Military payroll feeds into the state’s economy, as do the tourism dollars spent each year by thousands of exercise participants who come into the state, eager to take advantage of all Alaska has to offer.”

Construction and Contractors

Alaska’s military construction work has received more than $400 million from the federal budget this year. That includes $15 million for joint training ranges such as the Joint Pacific Alaska Range Complex, or JPARC, a vast training area that stretches from the Mat-Su to Fairbanks that the Alaskan Command hopes to expand on land and in the air.

Typical construction projects include aircraft hangars, housing, training facilities, air support facilities and utility upgrades. A frenzy of construction activity broke ground at JBER over the past few years, for example, as federal stimulus dollars flowed to new buildings.

Aggressive outsourcing has led private contractors to pay a major role at military installations like JBER and other bases. A Doyon subsidiary operates the base power plants. Installa-

www.akbizmag.com • Alaska Business Monthly • September 2012

tions contract out other civil functions, everything from janitorial services to highly specialized technical support, according to the “Trends” report published by the state on federal spending.

The most recent numbers available, from 2008, show total defense contract awards in Alaska totaled $2.1 billion that year.

The report also lists the state’s top military contractors in 2009. At the top, with contracts valued at more than $150 million, was Arctic Slope Regional Corp.

Other Alaska companies followed. Lynden’s contracts totaled more than $107 million that year. Tatitlek Support Services, a government support contractor with offices in Anchorage, had contracts worth more than $58 million. Doyon Utilities’ contracts amounted to more than $56 million and Chugach Alaska’s totaled $50 million.

But budget watchers say another decline in federal spending is coming, with uncertain results for Alaska.

Back to Bust?

Alaska’s national defense spending is expected to decline this year by 17 percent from 2011, according to the 2012 Construction Forecast produced by the Institute for Social and Economic Research at the University of Alaska Anchorage. The report puts this year’s defense construction spending at $460 million out of a total $2.58 billion in public money for construction.

Spending for national defense will be down due to significant cutbacks in defense spending nationally, according to the report. Military spending is divided into military construction, civil works and environmental remediation. The only element that hasn’t declined this year is environmental remediation.

Construction at the military’s main bases in Anchorage and Fairbanks— JBER, Eielson and Wainwright—is the largest share of the state’s defense construction budget, and the component of military spending that’s taken the biggest hit.

That trend is expected to continue with further reductions in future years, say the report’s authors, Scott Goldsmith and Mary Killorin.

Labor economist Fried puts it this way: “There’s been that upward trajectory. I think we’re done with that.”

Alaska has seen historic drops in military spending and staffing in the aftermath of the Korean Conflict and Vietnam War. This time around, there’s definitely a downward pressure on federal defense spending in Congress, with the end of combat missions in Iraq and the downsizing of the mission in Afghanistan.

Bill Popp, president and CEO of the Anchorage Economic Development Corp., takes a cautious stance when discussing future defense spending in Alaska. Rather than being the end of growth, Popp says, he sees federal

funding hitting a plateau.

It’s possible that on the whole, the military’s strategic focus will shift from the Middle East and Europe to the Pacific Rim. It’s unclear what effect that might have on placements within Alaska, Popp says.

“There’s going to be a plateauing of deployment with a decline in capital expenditures,” Popp says. “We’re still not clear on what that means.”  Zaz Hollander is a journalist living in Palmer.

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www.akbizmag.com • Alaska Business Monthly • September 2012

25 ■

insurAnce

BY ERIC DEEG

E

mployers waiting for a clear understanding of the future before deciding how to cope with federal health care reform are no better off today than they were before the US Supreme Court ruling.

The court decision, which addressed the individual mandate and Medicaid provisions of the Patient Protection and Affordable Care Act, leaves the federal law largely intact. Still to come, however, are presidential and congressional elections that may shift the political dynamic around health care reform—not to mention regulations that have yet to be issued to turn

■ 26

vague legislative language into specific requirements.

All of this means the precise details of the healthcare system that will be in place beginning in 2014 are still developing. However, the one certainty employers should understand is that health benefit costs will continue to rise no matter what happens next. Employers should position themselves with effective strategies rather than waiting for more shoes to drop.

Health Insurance Costs Escalate

While the bulk of the Affordable Care

Act does not take effect until 2014, several key provisions are already in place. These include allowing children to remain on their parents’ policies until they reach age 26, extending coverage to children up to the age of 19 even when there are pre-existing conditions, and the removal of annual and lifetime plan limits.

Together, these add to health insurance costs because they increase coverage and extend services. No one expects these provisions to be reversed, even if the Affordable Care Act is “repealed and replaced” or altered in some way. Insurers have said they do

www.akbizmag.com • Alaska Business Monthly • September 2012

not intend to roll them back but instead are already building them into their cost basis.

At the same time, new ways of compensating for care that are designed to reduce cost drivers in the healthcare system (outcome-based rather than procedure-based payments, for example) have not yet taken hold. Therefore, the charges for hospital services, diagnostic tests and sophisticated treatments all continue to rise.

In addition, if the Affordable Care Act remains on track, employers face decisions that will have economic consequences. Even the inaction of sticking with their current health benefit strategy may leave them with unexpected extra costs.

Play or Pay Consequences

One of the well-known sections of the Affordable Care Act involves the employer mandate — what employers are expected to provide and what will happen if they don’t. Known as Play or Pay, the core concept is that those employers that qualify as large employers under this part of the law

are required to provide health insurance for full-time workers and their dependents or pay a per-person penalty to the government.

On the surface, it seems to be a simple decision to make: Is it cheaper to provide health insurance or pay the penalty? However, even if an employer sets aside the value of health benefits in attracting and retaining a talented workforce and decides to make a purely mathematical choice, the Play or Pay provisions are not designed for simple calculations.

In general, there are two ways an employer may find itself liable for penalties.

No Coverage

Companies that have more than 50 full-time equivalent employees (employers are required to calculate hours worked by part-time employees and convert those hours to full-time equivalents) are expected to offer health benefits for full-time workers and their families. Full-time for purposes of this mandate includes employees working an average of

more than 30 hours a week. If they do not provide coverage for these employees, and if at least one of the employees qualifies for a subsidy and purchases health insurance through a government-run exchange, then the company is assessed a $2,000 penalty per full-time worker, whether or not more workers beyond the initial person buy coverage from the exchange.

However, the penalty is waived for the first 30 workers.

Unaffordable Coverage

If the employer provides coverage that is not affordable or does not provide minimum value then companies pay a penalty of $3,000 for each fulltime worker who receives a government subsidy to purchase insurance from the exchange. A plan is defined as not affordable if the employee portion of the employee-only premium exceeds 9.5 percent of the employee’s household income. A plan does not provide minimum value if the employer’s share of the total cost of benefits provided under the plan is less than 60 percent.

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27 ■

Essentials for Containing Health Insurance Costs

E

mployers have important choices to make about the way they plan to comply with the Affordable Care Act. But long before the act takes effect, they have strategies available that can reduce their health premiums by holding down medical care costs.

SMART CONSUMERS Get employees engaged in the insurance-buying decision and the delivery of the care they receive by making the costs more transparent. Rather than providing benefits that keep employees in the dark, fund Health Savings Accounts (HSAs) or Health Reimbursement Accounts (HRAs) that allow employees to pick and choose their own plans. Some will opt for high-deductible, low-cost plans, while others may prefer more traditional coverage.

WELLNESS FOCUS Communicate with employees about the benefits of staying healthy and offer them ways to improve their health at work. This can be as simple as encouraging team competitions that revolve around exercise, or offering flu shots, blood pressure readings and cholesterol testing onsite. And it can be as sophisticated as hosting clinic hours at the workplace, or providing employees information about how rising health care costs impact the company’s ability to provide higher salaries.

CARROTS & STICKS Make staying healthy and making good choices about medical care pay off for employees. Incentives might include a lower share of premium cost if employees complete a smoking cessation program, lose weight or complete preventive care procedures. Conversely, employees can be told that continuing to smoke or failing to follow healthcare guidelines will result in paying higher premiums.

Improving employee health carries dividends beyond lower costs for the company, often resulting in greater productivity and reduced absenteeism. Many employee benefits brokers can help employers identify best practices to promote wellness at work.

■ 28

Hidden Costs for Alaska Employers

The employer mandate provisions may be convoluted, but at least they are clearly tied to employer action or inaction. Employers should also be aware that other provisions of the federal law undoubtedly will impact their costs in ways policy makers did not necessarily intend.

For example, the individual mandate is aimed at people, not companies. Its requirement that everyone have coverage, either through their employment or through personal purchasing of policies, has been the focus of a great deal of attention, as reflected by the U.S. Supreme Court case.

However, experts expect the individual mandate to have an expensive spillover effect for companies. People who today opt out of coverage at their place of employment may suddenly decide that the least expensive way of fulfilling the mandate is to sign up for health benefits at work. This is particularly so in Alaska, where the majority of people who now waive coverage at work are receiving wages above 400 percent of Federal Poverty Line and are thus ineligible for federal subsidies to buy coverage at a government exchange.

This means that Alaska employers can expect to see their number of insureds rise. Since a typical health benefit package has the employer paying 70 percent of the premium, companies will see their costs rise sharply as more employees join their plan, bringing their dependents with them.

Making the Right Call

Obviously, many factors are in play when it comes to making the best decision for a specific employer. One food services company set out to drop its group health benefits and replace them with higher salaries that would allow employees to buy their own coverage. However, when the company’s leaders got assistance from experts to run through different scenarios, they realized that several tax consequences were overlooked and that individual health plans were far more expensive than anticipated. Instead, they decided to explore other options.

Similarly, employers should work closely with their benefits broker to find the right solution that fits their

needs. Brokers who are on top of the coming health care changes should be able to assist their customers with a multi-step approach: 1. ASSESSMENT What does your company offer now? What are the demographics of your workforce? How do your benefits interact with your total compensation offering, etc.?

2. MODELING Using sophisticated analytical tools that are built around the Affordable Care Act, how can different scenarios affect your bottom line?

3. EVALUATION Will a chosen scenario comply with federal requirements for “fair” employee access, “acceptable” coverage and “affordable” benefits?

4. STRATEGIC DECISION What is the best choice that will optimize benefits for your company?

5. IMPLEMENTATION What steps are required to implement the new strategy and what assistance will you need?

6. REPORTING How can you track and measure your results to compare them to your financial and human resource targets?

New Approach Needed

Putting together the right health benefits package in the past has often been a matter of choosing one insurer’s plan over another’s, a decision driven largely by cost and services. But today, the decision about what to do with health benefits is best made with the help of knowledgeable experts and a thoughtful approach. No matter what shoes are left to drop in determining the fate of the Affordable Care Act, employers should look for insurance partners who can help them make the tough decisions ahead.  Eric Deeg is a vice president and employee benefits program manager for Wells Fargo Insurance in Alaska. He has 25 years of experience managing employee benefits and health insurance programs.

Contact him at 907-297-7319 or eric.w.deeg@wellsfargo.com.

www.akbizmag.com • Alaska Business Monthly • September 2012

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RIGHT MOVES University of Alaska

Steven Seefeldt is the new Tanana District agriculture and horticulture agent for the University of Alaska Fairbanks Cooperative Extension Service.

He earned a doctorate in agronomy from Washington State University. Areas of expertise include rangeland management, crop rotation and integrated weed management.

SEARHC

Cabracas

Zimbrich

The SouthEast Alaska Regional Health Consortium Behavioral Health Division is pleased to announce the hiring of Araceli “Ari” Cabarcas, Psy.D., as a behavioral health clinician at the Haa Toowóo Náakw Hít outpatient behavioral health clinic in Sitka, and the hiring of longtime Haines clinician Emily A. Zimbrich, LPC, CDC II, as a behavioral health clinician at the SEARHC Haines Behavioral Health Clinic in the Green Dolphin Building in Haines.

Dr. Cabarcas holds a Doctorate of Psychology degree from California Southern University in Irvine, Calif. She also holds a Master of Arts degree in psychology and a Bachelor of Arts degree in psychology from National University in San Diego.

Zimbrich earned a Masters in Clinical Christian Counseling from Cornerstone University in Lake Charles, La. She holds Licensed Professional Counselor and Chemical Dependency Counselor II credentials from the state of Alaska.

American Fast Freight

Stephen L. Day was named by the board of directors for American Fast Freight Inc., to serve as president and chief executive officer.

Day joined AFF as vice president of corporate counsel in June 2005. Prior to joining AFF, Day

Compiled by Mari Gallion FNBA

was with the Seattle law firm of Betts, Patterson & Mines, where he was a director and founder of the firm’s transportation and logistics law practice group.

WHPacific Inc.

WHPacific Inc. announced that veteran industry executive Rober t G. “Bob” Macomber has joined the firm as its new president. With 22 years of distinguished leadership and business development experience in the real estate, land Macomber development and energy industries, Macomber’s expertise includes enterprise planning and growth, strategic initiatives, mergers and acquisitions, and achieving industry recognition for corporate best practices.

Griffin

Sefton

Crow

Heinz

AFPAC

The Association of Fundraising Professionals Alaska Chapter recently hired Jamie Newsom Eaton as chapter administrator. Newsom Eaton graduated from Bartlett High School, holds a BA in English from UAA and an MA in Arts Journalism from Syracuse University.

Battelle

Ted Rockwell, long a recognized expert in Alaskan environmental issues, has joined Battelle, the world’s largest independent research and development organization. Rockwell joins Battelle after a long and distinguished career with the U. S. Environmental Protection Agency where he served from 1994 as senior adviser, Alaska oil and gas sector, for EPA’s Alaska operations office.

University of Alaska

University of Alaska Fairbanks alumna and longtime administrator Michele Stalder has been tapped as the new dean of the UAF Community and Technical College. She was recognized in 2001 as the UAF recipient of the UA President’s “Make Students Count” award.

Hofeling Schuh Phil Griffin was recently appointed First National Bank Alaska’s Chief Information Officer by the bank’s Board of Directors. Griffin graduated from the University of Nebraska with a bachelor’s degree in business administration. He has held many CIO positions in California and Nevada.

Karen Sefton was recently appointed Seward Branch Manager by the bank’s Board of Directors.

Sefton has worked at the Seward branch for a total of 31 years. She started as a teller and worked numerous other positions.

Martin Crow was promoted to branch manager and assigned to the Healy branch of FNBA, vice president Karl Heinz was named branch manager of the Eagle River branch, Dustin Hofeling was

OH MY! ■ 30

www.akbizmag.com • Alaska Business Monthly • September 2012

RIGHT MOVES appointed vice president and named software solutions manager, and Michele Schuh was appointed vice president and named finance director.

Crow is a graduate of First National’s management associate program which trains bank officers and teaches them leadership skills.

Heinz also completed the management associate program and was named one of Alaska’s 2012 “Top Forty Under 40” business professionals.

Hofeling effectively managed the enhancement and upgrade of online services with more improvements expected in the future.

In 2011, Schuh was inducted into the Anchorage ATHENA Society, which celebrates professional excellence, commitment to community and encouragement of women’s leadership.

Anchorage Fur Rendezvous

Jennifer Harrington has been appointed the executive director of Anchorage Fur Rendezvous. With over 14 years of nonprofit experience in Alaska, Harrington has a strong background in nonprofit management.

SEARHC

SouthEast Alaska Regional Health Consortium SEARHC pediatric dentist Dr. Kim Hort, DMD, won a the C lini c a l E xc e ll e n c e Award for Dental Specialist 2012, a national award which honors performance while proHort viding clinical services, clinical consultations, program development, clinical presentations and contributions to continuing education.

Alyeska Resort

Alyeska Resort welcomes four new members to the management team: Director of Marketing Jessica Pezak, Director of Human resources Jaci Ohayon, Mountain Manager Eric Teixman,

Compiled by Mari Gallion and Director of Retail Sales and Guest Services Melissa LaRose.

Pezak went to high school in New York state and graduated from Boston University with a B.S. in Communications.

Ohayon graduated from Willamette University College of Law with a Juris Doctorate, and also has earned a Master of Arts in International Studies and a Bachelor of Arts in Social Science.

Teixman comes to Girdwood from Big Sky, Mont., where he spent the past three years working as Lift Maintenance Manager for the Club at Spanish Peaks. Teixman is also a journeyman ironworker, crane and heavy equipment operator and is well versed in aerial tramway construction and maintenance.

La Rose comes to her new position with a variety of experience in the resort industry, most recently arriving from Montana where she spent seven years as the Director of Retail, Rental, Human Resources, Technology and Procurement at Yellow Stone Mountain Club.

Alaska Legislature

Eloy Martinez, an associate director at the Alaska State Senate’s Democratic Steering and Outreach Committee, has been promoted to staff director. Martinez is a graduate of Texas Lutheran University.

Best Beginnings

Julie Varee, CFRE, has joined Best Beginnings as development manager.

Varee earned her Master of Arts in Philanthropy and Development from St. Mary’s University in Minnesota, and was named 1998 Outstanding Fund Raising Professional in Varee Philanthropy by the Association of Fundraising Professionals, Alaska Chapter.

Alaska SeaLife Center

The Alaska SeaLife Center Board of Directors announces the appointment of Dr. Tara Riemer Jones as its new president and CEO. Jones holds a Ph.D. in Biomedical Engineering from the Johns Hopkins School of Medicine.

Jones

R&M Consultants Inc.

NANA WorleyParsons

Rock Hengen has been named president of NANA WorleyParsons. Hengen earned his Bachelor of Science in Electrical Engineering from the University of Saskatchewan in 1987, and served as the senior instrument engineer during the Hengen startup of BP Exploration (Alaska) Inc.’s Badami production facility on Alaska’s North Slope.

Turletes

Anderson

R&M Consultants Inc. hired Irene Turletes, EIT, and Kim Anderson, EIT, in May as staff engineers in R&M’s Civil Engineering Department.

Turletes and Anderson are both recent graduates of the University of Alaska Anchorage, and have each earned a B.S. in Civil Engineering.

Both are WAQTC qualified and have their E.I.T. certifications.

www.akbizmag.com • Alaska Business Monthly • September 2012

31 ■

Architecture & engineering

Images courtesy of International Living Future Institute

Living Aleutian Home Design winning entry “Finnesko 13” was designed by Taller Abierto studio in Madrid, Spain.

Designs for Aleutian Homes Winning entry won’t be built

A

BY ZAZ HOLLANDER

n international home-design contest aimed at stimulating affordable, energy-efficient building in the inhospitable climes of Atka Island drew an elegant winning entry from a young team of Spanish architects. But, in a difficult decision for the Aleutian Housing Authority, that body has abandoned plans to build the design that won the Living Aleutian Home Design Competition earlier this year.

Instead, the Authority plans to build a different home with a design not suggested by any contest participants—an octagon—and not on Atka but in the community of Sand Point.

The decision allows the Authority to meet its original contest goals without compromising the competition’s stiff standards on cost and efficiency, says AHA’s executive director, Dan Duame.

“I just can’t let the idea of the competition dictate my result,” Duame said at the end of July. “My original objectives were to find a highly performing build■ 32

ing at the lowest possible cost that’s replicable throughout the region. If the facts lead me to something else, that’s where I need to go.”

The Living Aleutian Home Design Competition—hosted by the Aleutian Housing Authority and the Portland, Ore. International Living Future Institute—challenged participants to design an energy-efficient yet affordable home on Atka, a windswept spot in the central Aleutian Islands deluged by 60 inches of precipitation a year—an inch for each person who lives there.

The Living Aleutian competition asked entrants to design rigorously efficient, cost-effective and easily replicated homes. The design needed to meet “netzero” standards for energy and water by creating as much of both as it consumed. And it couldn’t cost more than $400,000, the average price for the modular units currently built on the island.

In May, to fanfare in the cold-climate housing community and in their home

country, the competition announced the winner: a trio of young architects from the Taller Abierto studio in Madrid, Spain’s sophisticated capital city of 3 million.

The winning project, “Finnesko 13,” was a sloping three-bedroom, one bath home with a strip of windows and an aerodynamic design meant to channel the wind. The home was to be powered by wind turbines and geothermal heat rising from the volcanic ground.

The Madrid studio won the $35,000 first prize. And, in a fairly unusual opportunity for architects not accustomed to seeing designs become real, Taller Abierto also won the chance to turn their winning design into a home for 32-year-old Jimmy Prokopeuff, a fish processing plant manager raised on the island. Construction was expected to begin this fall.

But by July, it became clear that Finnesko 13 couldn’t be built as designed and still meet the standards of the Living Aleutian competition.

www.akbizmag.com • Alaska Business Monthly • September 2012

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Living Aleutian Home Design second place winner “House for a Windy Island” was designed by Seattle architects Jesse Belknap and Joseph Swain.

Deciding Factors

The decision to not build from the winning design came at the end of July, Duame says.

The Authority, with ILFI, promoted the contest to find innovative ideas for weaning the Aleutians off fossil fuels like diesel. The Authority is the designated housing entity for 10 communities in the Aleutian and Pribilof region, including Atka. AHA owns, manages and operates 258 housing units throughout the region.

Duame met with Fairbanks coldclimate housing expert Thorsten Chlupp and kpb architect Lauri Strauss in Fairbanks on July 24. They determined that the winning design just couldn’t be built for $400,000 given the kind of construction necessary to meet the relevant building and efficiency standards.

First, the trio found they couldn’t make the Finnesko 13 design buildable without compromising its integrity. Its curved ribs allowed any built structures to be flexible—longer or shorter, depending on the number of ribs used.

That fit the competition’s goal of being easily replicated. But curves are expensive to construct, and the trio struggled to get wall thicknesses and other details to meet performance criteria, Duame says.

Second, sealing the home as designed with a slope from front to back proved technically challenging when it came to window placement and keeping out the elements. That’s key

in a place as rainy and windy as the Aleutians.

“We were ending up with straighter walls, with more square corners than round corners,” he says.

The design also proved difficult to site in different spots and still gain the passive energy advantages integral to the contest, such as wind power.

An octogon, on the other hand, can be rotated and manipulated on any given site, Duame says. “So you’re almost always getting the maximum solar gain from three sides, morning, afternoon, and evening.”

An octagon home was designed and built in Quinhagak—a Yupik community north of the Aleutians with a similar wet, windy climate—by the Cold Climate Housing Research Center, with input from the community.

The shape maximizes heating efficiency and deflects wind-driven rain, says Jack Hebert, president and CEO of the Fairbanks-based CCHRC.

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Overwhelming Entries

The Living Aleutian contest drew 104 design entries from 21 countries around the world, according to April Knudsen, ILFI’s competition manager. Nearly half came from the United States; five designs came from firms based in Alaska.

The sheer number of entries didn’t allow the contest’s volunteer panel of judges adequate time to give each a detailed analysis, Duame said. “Our ability to look at each project at the level we did yesterday (on July 24) was just not

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www.akbizmag.com • Alaska Business Monthly • September 2012

33 ■

feasible,” he says. “I still like the (winning) design, it’s a very elegant look. I wish we could do it.”

A panel of six judges determined the winners: Sebastian Eckmann, builder at Nordic Constructors; Bryan Mackay-Lyons, principal at Mackay-Lyons Sweetapple Architects; Jason McLennan, architect and CEO at International Living Future Institute; and Hebert, Duame and Strauss, who is an Alaska architect.

The judges weighed each design’s concept and creativity, as well as its self-sustaining qualities, says Hebert. They kept coming back to two different forms of architecture: the earth-sheltering design of the traditional Aleut sodhouse, the barabara and the Quonset hut, which he calls “a tremendously practical structure.”

The winning entry stood apart because of its form and the way Taller Abierto came up with a home built from pieces that could be pre-built and set up on site, he says.

But it wasn’t head and shoulders above the rest.

“It wasn’t one Mick Jagger, the rest local garage bands,” Hebert says. “There was a lot of talent and creativity, as well as a lot of naiveté about building in cold climates.”

“Orca House” tied for third place and was designed by New York architect Janus Welton of EcoArchitecture DesignWorks.

Images courtesy of International Living Future Institute

The Winner— On Paper at Least

The Taller Abierto team—Julio Rodriguez Pareja, Nacho Roman Santiago and Daniel Martinez Diaz—knew they had a good thing as soon as they submitted their proposal to the Living Aleutian Design Competition earlier this year.

The trio toasted their own work that day in Madrid—and then again at the awards ceremony in May in Portland, Ore. The studio normally focuses on

“Universal Serial House” tied for third place and was designed by 2SIS Arquitectes in Girona, Spain.

■ 34

housing projects, so the competition excited the team from the very beginning, Santiago wrote in an email before the decision was made to scrap the building phase.

“It dealt with a (really attractive) architectural issue,” he said. “There was an actual need to solve both a construction and a social problem, building a home in a geographical area that was always very interesting to us.”

Taller Abierto couldn’t be reached again before this issue went to press.

The $35,000 first prize wasn’t wasted, Duame said, given the incredible range of ideas that came out of the contest.

He does plan to make use of a Diamond Pier footing foundation suggested by the second-place winner.

The second-place design came from two Seattle men still completing advanced degrees in architecture at the University of Washington when they submitted their idea.

“House for a Windy Island,” by Jesse Belknap and Joseph Swain, represents a simple design that’s easy to build, Belknap said. The two architects felt that the remoteness of Atka Island was a bigger factor than the weather. The Seattle men received a $15,000 prize.

Two teams tied for third place.

“Universal Serial House”—basically a Quonset hut on stilts—was designed by 2SIS Arquitectes Girona of Girona, Spain. Eco Architecture DesignWorks, a fi rm based in upstate New York, designed “Orca House” around an easily constructed kit concept. Another Madrid team, 24 Studio, earned an honorable mention.

www.akbizmag.com • Alaska Business Monthly • September 2012

The Next Step

Like other rural communities in Alaska, residents of the Aleutians pay exorbitant fuel costs for heat and power generated by imported diesel. The need for an alternative energy source fueled the 2010 Aleutian Pribilof Island Energy Summit, where more than 50 participants generated a goal that Aleutian communities reduce fossil fuel use by 85 percent.

Duame and Strauss came up with the home design contest, says Mark Masteller, a former Alaska-based ILFI staffer and longtime energy efficient building advocate.

The remarkable number of entries the contest received can be chalked up to good publicity. There’s no doubt the competition and ensuing media coverage stimulated a far-reaching conversation about the possibility of net-zero energy and low-cost efficient home construction for rural Alaska, Masteller said before the decision was made to move on from the winning design.

“There’s a huge need for replicability since demand for affordable housing in rural Alaska is high,” he says. “And of course fossil energy costs continue to increase, which also drives change.”

The Authority next will travel to Sand Point—a roughly 1,000-person community that serves as the seat of East Aleutians Borough, located near the opening of the Bering Sea—and meet with the community to discuss plans for the first of three homes Duame hopes to build as part of the contest’s original mission. It proved too complicated to build a home in Atka as planned for the first home, given the logistics of building in such a remote spot this late in the season. Duame says he still hopes to build homes in Atka, as well as King Cove.

He says it’s also possible the Authority could build a design submitted for the Living Aleutians competition as part of an entirely separate process. And the contest could still provide guidance to the home to be built in Sand Point.

“We’re kind of going back now and scouring all of the entries to see what might be applicable to the design we’re looking at,” Duame says.  Zaz Hollander is a journalist living in Palmer.

www.akbizmag.com • Alaska Business Monthly • September 2012

35 ■

telecom & technologY

VoIP Telephony Technology Connecting over the Internet

BY MARY LOCHNER

W

hen most people think of dialing over the Internet, they think of the jittery, in-andout connection associated with free services such as Skype. But cost savings, flexibility and increasing audio quality are all driving more businesses to migrate over to what are collectively called Voice over Internet Protocol, or VoIP, for their phone service.

In a June 26 report, market research firm TechNavio predicted it expects VoIP services world-wide to see 7.1 percent annual growth from 2011 to 2015.

■ 36

“The sales have increased year over year,” says GCI Sales Engineer Rodrigo “JR” Garcia.

He says GCI has offered VoIP systems for a long time, and offered VoIP services for a few years.

The VoIP systems are hardware systems installed at offices on-site that enable customers to use VoIP. They’re often used by large companies and organizations. But a VoIP service makes the technology more affordable to a small or mediumsized business, Garcia says.

“Rather than having one of those expensive boxes on-site, which can cost upwards of tens of thousands of dollars,” Garcia says, “we can provide the same VoIP services over the standard Internet or data connection.”

The VoIP service GCI offers is what Garcia calls a hosted cloud voice solution. All that means, he says, is that the “brains” of the system are hosted at the telecom company’s facility.

Data Line Determinations

But isn’t the connection quality of a

www.akbizmag.com • Alaska Business Monthly • September 2012

phone call held over the Internet notoriously bad? That doesn’t have to be the case, says Alaska Communications Systems Vice President of Marketing Eric Lazo.

“A lot of consumers have the conversation on Skype and it starts to break up,” he says. “It’s because their data line is not provisioned for voice conversations; it’s provisioned for downloading. It’s not sized to do the cutting-edge technology they’re trying to do.”

He says the new VoIP systems and services packaged for businesses utilize an array of technological solutions that help improve the audio quality experienced by the user. Having enough bandwidth to deliver good voice quality is one part of that, Lazo says, but another involves setting up the system to prioritize voice communications going over the Internet medium as opposed to say, downloads.

Companies could save money using VoIP, Lazo says, but it’s not necessarily in the area of bypassing long-distance or other conventional telephone fees.

Yes, VoIP will save a little in that arena, he says, but the real savings to businesses come with the flexibility VoIP services offer.

With VoIP, he says, a small business owner could set her office number to ring on a cell or home phone when she’s out, and still have the office voice mail take a message if she doesn’t answer the call. It’s kind of like a modern-day, technological version of bi-locating.

“Suddenly you don’t have to be in the office for that important phone or conference call, and you can have your messages and communications delivered the way you want,” Lazo says. “That’s the bigger component people find in cost savings and feature functionality.

They can do their business differently and it saves them money.”

Mike Rosko, owner of Advanced Telecommunications Systems of Alaska, says roughly 25 percent of his 200 customers use a VoIP system, and it’s mainly for cost savings and efficiency.

“I have one customer with locations in Wasilla, Fairbanks, Anchorage and Soldotna,” Rosko says, “and all they have to do is pick up their phone and dial an extension, and they’re talking to the person in Fairbanks. It cuts out long distance charges for them completely.”

The portability of the home office phone number on a VoIP system out to a remote location or home office is

also an attractive feature for businesses, he added. “It’s definitely growing,” Rosko says.

Alaska Communications currently installs and maintains hardware for VoIP systems, and is looking at offering VoIP services in the future, says Lazo.

AT GCI, Garcia says both the VoIP system and the cloud-based VoIP service it offers are in high demand, and he expects that interest from businesses to grow.

MTA’s marketing and sales director, Carolyn Hanson, says in an email interview that MTA has provided businesses

VoIP in Practice

But small business owner Jake Libby says VoIP’s most attractive feature is the savings on expenses. His Wasillabased Web and graphics design company, Crystal Clear Creative, has used a VoIP system for three years, he says.

“Rates are far superior to the local phone company,” Libby says. “The nice thing is having it all consolidated in one bill. And the call quality is stellar.”

www.akbizmag.com • Alaska Business Monthly • September 2012

37 ■

“The double-digit growth in data consumption is driving growth in the Alaska market.”

Anand Vadapalli Chief Executive Officer, Alaska Communications

with VoIP system solutions for 10 years, and is considering offering VoIP services in the future.

When VoIP Rules the World

In a July report, Research and Markets projected the global VoIP service market to see a compound annual growth rate of 7.1 percent from 2011 to 2015.

The firm says cloud-based, or hosted, VoIP services for small businesses are on the rise.

In mobile VoIP, less than a handful of companies—Fringland, Nimbuzz, Skype and Vonage—rule the global mobile VoIP market today, according to another July 2012 report from Research and Markets. The firm says the mobile VoIP market is attractive to new companies because the investment cost for entry into the mVoIP market is low, while the potential profits are high.

All that VoIPing by businesses and consumers could be expected to reduce

■ 38

telcos’ revenues from traditional voice phone calls, of course. It’s no secret the VoIP trend is one that appears likely to shake up the telecomm industry. In a February 2012 study on use of mVoIP in South Korea published in Telecommunications Policy, the author noted that the new technology is “a major rival to the most valuable service in the telecommunications industry and threaten(s) to change the ecology of the global communications industry.”

VoIP Goes Mobile

What is mVoIP? It’s like a get out of jail free card for cell phone users. You don’t expect people to get out of jail for free in the real world, and you don’t expect to talk to your friends (or txt ur bff ) all day on your cell phone without paying for the service. But that’s exactly what you can do with an mVoIP app, or an app that enables mobile VoIP on your cell phone. Some of the apps allow you

to make calls or texts truly for free, while others ding your minutes. Nimbuzz, a company whose app allows users to make free cell calls and texts on just about any platform, announced on July 31 that it had reached 100 million users, with roughly 60 percent of those based in the U.S. But Nimbuzz also makes it easier for users to transmit pictures and video, which take up a subscriber’s data.

In a transcript of the Alaska Communications group earnings conference call held this March, Chief Executive Officer Anand Vadapalli noted that, while voice traffic has gone down, “the double-digit growth in data consumption is driving growth in the Alaska market.”

In the future, it seems, data is king.  Mary Lochner is a journalist living in Eagle River.

www.akbizmag.com • Alaska Business Monthly • September 2012

Unified Communications VoIP has become an established norm for many businesses over the last decade and it’s time to broaden the scope of the concept. IBM Sametime and Sametime Unified Telephony integrate voice and video into real-time communications—one company’s answer to unified communications. Cisco and Avaya are making advances in product innovations for interactions and exchanges using business applications as well.

The industry is providing integration for people to collaborate across towns, time zones and devices the world over. Unified communications enable people to get their jobs done with greater efficiency and more productivity.

Software and systems now integrate voice, video and data over Internet protocol across multiple platforms and devices. Companies need only one network—data—to conduct business, and that business can be conducted everywhere: in the office, out of the office, in the cloud, via mobile or Wi-Fi, it all streams together in a unified manner.

The telephone may be the original real-time device, but it’s time to cut the cord.

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Search “unified communications” on these websites to learn more about VoIP telephony’s place in unified communications.

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www.akbizmag.com • Alaska Business Monthly • September 2012

39 ■

oil & gAs

Developing oil, gas and coal

BY VANESSA ORR

Photos courtesy of Linc Energy

The April 14 installation of the meteorological monitoring station at Umiat. The station, placed on an existing gravel pad, measures wind, temperature, relative humidity, barometric pressure and solar radiation through satellite telemetry. Linc Energy will collect data for 12 to 15 months.

A

lthough Linc Energy has only been active in Alaska for the past two years, the Australian company is already making inroads in the oil and gas industry. A world leader in underground coal gasification technology, it is also on the cusp of bringing a new industry to the state which could affect Alaska’s long-term energy future.

Headquartered in Brisbane, Queensland, Australia, Linc Energy was incorporated in 1996, and began operations in Alaska in 2010. The company has 450 employees worldwide and a team of 15 people in the 49th state. There are two divisions within Linc Energy, both of which operate in Alaska: the Clean Energy Division, which is comprised of UCG exploration and development, and the Oil and Gas Division.

■ 40

Using UCG to Harvest Stranded Resources

According to Linc Energy Alaska General Manager Corri Feige, the amount and quality of Alaska’s coal resource was a huge draw for the company, which specializes in converting underground resources into energy and synthetic fuels. As the owner of Yerostigaz, the world’s only commercial UCG operation, Linc Energy produces commercial UCG synthesis for power generation in Uzbekistan. The company has also constructed and commissioned the world’s only UCG to GTL (gas to liquids) demonstration facility, which is located in Queensland, Australia.

“Alaska is the Saudi Arabia of coal, so considering that Linc Energy’s business is converting underground coal gas to

Corri Feige, Linc Energy Alaska General Manager

www.akbizmag.com • Alaska Business Monthly • September 2012

power, synthetic diesel and synthetic jet fuel, it makes the state very, very attractive to us,” Feige says. “The resource position is very advantageous—the depth of burial and the rank of coal are at the ‘sweet spot’ for UCG processing using Linc’s technology.”

Linc Energy holds exploration licenses on 167,000 acres of Alaska Mental Health Trust Authority lands, two of which are located on the western shores of Cook Inlet and one in Interior Alaska near Healy. According to Feige, all three areas are currently being explored for depth and characterization of coals for UCG development.

“There has been a lot of offset drilling done in the region, so Cook Inlet coals are well known,” Feige says of the estimated resource. “There are 20- to 30-foot thick coal seams, and we know that these are pervasive throughout the region. The rank is sub-bituminous, which is perfect for gasification.

“On the west side of the inlet in just one small area, we have calculated that there is enough coal to run a power plant or liquids facility for more than 50 years,” she says.

she says. “We are able to harvest a stranded resource that is too deep to mine with conventional methods and to convert it to power and transportation liquids, which Alaska very much needs in large quantities.”

The UCG exploration program will continue year-round. The company’s upcoming plans include the drilling of additional holes on the west side of Cook Inlet and in the Interior. Linc recently commissioned and had constructed a fit-for-purpose rig for UCG drilling in Alaska to make its exploration program more effective.

“We could contract small core rigs, but for the kind of UCG drilling we do to be efficient, we needed a fit-forpurpose rig built,” Feige says. “This rig, which will be the only one of its kind in Alaska, is specifically built to handle drilling conditions in basins, where the thick top layer of glacial gravel creates a very challenging drilling scenario.”

The rig is being constructed by Buffalo Custom Manufacturing in Abbotsford, British Columbia. Modules are being transported from Canada and the Lower 48 to Wasilla, where the fi nal assembly was to be completed

Global Leader

Considered a global leader in the UCG industry, Linc uses proprietary technology to recover stranded resources, such as those found in the Cook Inlet area. UCG transforms underground coal into a high quality synthesis gas of carbon monoxide, hydrogen and methane as heat and oxygen are introduced. All of the company’s technologies were developed at its Chinchilla facility in Queensland.

“We drill an injection well and a production well, and after we drill to the coal seam, we connect the two wells mechanically with a horizontal bore hole,” Feige explains. “Using proprietary technology, we are then able to gasify the coal in place, harvest the product (known as syngas), and use it to generate power or to produce synthetic diesel or synthetic jet fuel.”

According to Feige, bringing UCG technology to Alaska will not only provide benefits to the company, but to the state as a whole. “With UCG development, we’re bringing a new industry to the state, which will positively impact Alaska’s energy future,”

www.akbizmag.com • Alaska Business Monthly • September 2012

41 ■

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before the rig was commissioned in early August.

Exploring for Oil and Gas

On July 6 last year, Linc Energy purchased a controlling interest in 19,358 acres of federal and state oil and gas leases at Umiat, located in the National Petroleum Reserve-Alaska on the North Slope. “We have very aggressive plans for this area, which include producing gas and oil in five to seven years,” says Feige of the site, which is estimated to have 200 million barrels of recoverable reserves.

While the company originally planned to begin exploratory drilling in the winter of 2011, they instead decided to defer drilling until 2012. “Last year, snow levels on the tundra were very low, which meant a very late tundra opening,” Feige says. “We needed to build a 100-mile snow pack access road, which we were not able to construct in time for the season.

“By the time Linc purchased Umiat in July, the majority of suitable rigs ■ 42

www.akbizmag.com • Alaska Business Monthly • September 2012

UCG core well drilling operations.

were also already under contract,” she adds. “The combination of no rigs and reduced snow levels would have delayed construction of the road and would have prevented us from drilling until close to the end of the season, so we decided that it was better to defer the project for a year.”

On Jan. 4, Linc Energy signed a rig, the Kupik 5, which will be used to drill up to five holes at the Umiat site. “We will install a disposal well and drill a series of vertical holes and one horizontal hole, and perform float tests on those,” Feige says. “We will also be drilling an exploration hole deeper than the known reserve to see what’s there.”

Linc Energy is also working on developing the Angel Unit in Cook Inlet; plans are currently out for public comment. “The Angel Unit is just under 2,000 acres of conventional natural gas play, and once approved, our plan is to collect 2D and 3D seismic this November and December,” Feige says. “We hope to drill in year two, and develop the resource in year three.”

While Linc Energy doesn’t have firm budgets in place for each project, in

Photos courtesy of Linc Energy

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Photos courtesy of Linc Energy

total, the company plans to spend in excess of $40 million in FY2013 for all gas, oil and UCG projects. “Between the Umiat development, oil and gas in Cook Inlet and our UCG program, Linc Energy is absolutely committed to Alaska for the long haul,” Feige says.

Moving Forward

While many other natural resource companies are expressing concern that their investment in Alaska is being limited by the state’s unresolved oil and gas tax issues, Feige says that this is not as large a concern for Linc Energy.

“As a small, independent operator with nothing in production yet, what the Legislature is doing is not really impacting our immediate near-term plans,” she says. “But we are being affected by the loss of services and a skilled labor pool. Because of the investment climate, people are moving to more competitive regions in the Lower 48, which is driving our costs up. Companies have to increase wages to keep workers here to compete with markets in Texas, North Dakota and Oklahoma.

“What’s most important to us is to see Alaska with a stable, competitive, investment-friendly business climate,” she says.

As Linc continues to move forward in the 49th state, Feige says that they will continue to promote the company ideals that have made them so successful.

“Linc Energy is a very innovative company—it encourages out-of-the-box thinking in its approach to projects, technology and problem-solving. This dynamic is driven from the board and CEO level through the operations level and the project level. As a result, we have created technologies on the UCG gas-to-liquid side that have made us a world leader.

“Our corporate culture demands technical excellence and innovation, which is a positive thing for any state where Linc sets up operations,” she adds. “We are very bullish on Alaska, and on the effect that we can have on the state’s energy future. Our innovation sets us apart, and sets us up for success.”  Vanessa Orr is a writer living in western Pennsylvania.

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www.akbizmag.com • Alaska Business Monthly • September 2012

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oil & gAs

Alaska Hire vis-à-vis Nonresident Workers Political sensitivity not legally enforceable

BY MIKE BRADNER

A

“

laska Hire”—it’s one of those terms politicians like to use when they want sound-bites to beat up on oil companies, or any large industry for that matter.

The term relates to an employer’s effort to hire workers locally, and essentially it relates to a desire to retain as many of the jobs and as much of the wages as possible of an economic activity within the local economy, and reduce the leakage of the benefits to outside the state.

There has always been a political sensitivity to Alaska hire because of the state’s history of major resource industries coming to the state, extracting resources (whether salmon, gold or oil), exporting them and bringing most workers with them too. Many of these industries have been seasonal, so the workers would typically arrive in spring, often spending the summer in remote camps, and leave in the fall with their paychecks.

In modern times, industries like oil and mining bring jobs that are generally year-round, which are attractive and viable employment options for resident employees. Other industries provide relatively low-wage jobs— tourism and fish processing, for example— that are unattractive to many Alaskans.

Construction of the trans-Alaska oil pipeline in the 1970s prompted a huge effort for Alaska hire—which had mixed results—and discussions about local hire are emerging once again with

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the possible construction of a large natural gas pipeline.

Subject To Interpretation

The term “Alaska hire” has many components and interpretations. It relates to “local hire” for example, meaning hiring within a community or region, not just the state. Contractors on remote rural projects are often criticized for not hiring workers from a local village, even though their employees may all be Alaskans, but hired in the state’s major cities.

Alaska Native Corporations, who now own some of the state’s largest firms, encounter the criticism in a different way. Their management teams come under intense criticism internally for not hiring more shareholders, who are likely to live in Alaska but don’t always: Many Alaska Native shareholders of Native corporations live in the Lower 48 states.

In order to address Alaska Hire, the task of Native corporation managers is two-fold: to hire as many Alaska residents and also as many shareholders as possible. Most Native corporations list percentages of both groups in their annual reports.

Because Alaska Hire is about keeping the money at home, it also relates to Alaska Buy, another dimension of the issue that is in some ways more complex. For example, how do companies measure “local” purchases? Counting the number and value of contracts let

or checks mailed to vendors with local addresses is an easy way, but can it be verified that the vendor maintains more than just a post office box in the state?

If a firm has a sales representative with an office in the state, does it qualify as Alaskan? How about numbers of employees, or length of time in business?

If even a long-time Alaskan firm must order parts and materials made in the Lower 48, what is the true Alaska content? It gets complicated quickly.

Not Legally Binding

State agencies and local governments encounter this problem when they deal with requirements in state statutes or municipal ordinances to give preference to local firms on procurement.

Under current law, Alaskan companies are allowed to submit bids a certain percentage above the out-of-state competition. However, the definition of what qualifies as “local” or “Alaskan” can seem murky at times, and frustrating for the agency managers who can sometimes see that the firms they give bidder preference to on contracts have spotty Alaska hire records.

What does the law say about Alaska hire and Alaska purchase? Basically, the courts have consistently found that no employer, even if it’s a public agency, can be forced to hire locally or be penalized for not hiring locally. The same applies to purchasing, except that governments have—so far—been allowed to give a small advantage to bids from local firms.

www.akbizmag.com • Alaska Business Monthly • September 2012

Because Alaska Hire is about keeping the money at home, it also relates to Alaska Buy, another dimension of the issue that is in some ways more complex. For example, how do companies measure “local” purchases?

There have been several attempts to establish Alaska hire preferences and penalties in Alaska law, but all have run up against the commerce clause of the U.S. Constitution and have foundered. The commerce clause prohibits restraints on commerce between states, such as in the free movement of people seeking jobs.

An early attempt at legislating Alaska hire came in the 1970s when the transAlaska oil pipeline was being planned.

As a condition on a lease for a pipeline right-of-way across state lands, the pipeline builders had to accept an obligation to hire Alaskans. The theory was that the state, as a landowner, could impose certain terms and conditions of the use of state land.

This law was actually in effect when pipeline construction began and Alyeska Pipeline Service Co., builder of the project, made strong efforts to comply amid the confusion of a giant construction project, but the law was challenged in court and eventually nullified.

Another attempt at compulsory Alaska hire came a few years later, when legislators tried to impose a local hire requirement on state construction contracts, the theory being that a condition to reinforce the local economy could be tied to the use of state funds. It, too, fell afoul of the courts.

There is now a new attempt at legislating Alaska hire at least on a gas pipeline. The Legislature has required that the contact let by the state to TransCanada Corp. under the state’s Alaska Gasline Inducement Act contain a Project Labor Agreement related to Alaska hire. TransCanada is leading the effort to build a large Alaska gas project. Whether the gas line will move forward, or whether this provision will withstand a legal challenge, is unknown.

Faced with the legal setbacks, Alaska politicians fell back on simple persuasion—or embarrassment—as a tool to encourage Alaska hire, and this has

been marginally more effective. Each year the state Department of Labor and Workforce Development publishes an Alaska hire report, with a breakdown of employers’ hiring of residents and nonresidents. Politicians have used this report and other data compiled by the state labor department when they want to criticize industries, for example the petroleum industry most recently during the 2011 and 2012 debates on oil taxes.

PFD Recipient Hire Stats

The labor department’s annual compilation of resident hire data for employers isn’t perfect, however, because it is based on people on record as receiving Alaska Permanent Fund dividends. The thinking behind this is that virtually every qualified Alaskan, and there are strict residency requirements, applies for a dividend.

This is data retained by the Department of Revenue, to which the labor department has access. Crossmatching the dividend list against an employer’s list of employees gives the labor department the number of employees who receive dividends (as a proxy for residency) and employees who don’t. Those who don’t are counted as nonresidents.

Despite its imperfections, the PFD cross-match is likely the most reliable tool the labor department has to measure residency, but it isn’t perfect. For example, Alaskans moving to the state must wait two years before qualifying for a dividend, so there is a lag between people arriving and being counted as residents. Legally a person is a resident, for purposes of voting for example, if he or she is in the state for 30 days. However, outside the Permanent Fund dividend cross-checking there’s no other way to independently verify residence.

Despite its imperfections, it’s the best tool we have.

What the procedure does, however, is somewhat distort residency data for

www.akbizmag.com • Alaska Business Monthly • September 2012

47 ■

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What does the law say about Alaska hire and Alaska purchase? Basically, the courts have consistently found that no employer, even if it’s a public agency, can be forced to hire locally or be penalized for not hiring locally. large companies that bring in employees, because those people aren’t counted for two years. In theory the reverse can happen, where employees rotated out of the state are counted as residents except that claiming residency for a PFD filing when a person is not legally a resident (i.e., living out of state) is unlawful and is a serious offense. Employees of large companies are unlikely to do this.

The state labor department publishes its annual nonresident employment report in the early spring, and it always has a two-year lag. Thus the report published in 2012 shows data for 2010.

In general, the report showed that 19.6 percent of the state’s 408,467 wage and salary workers were nonresidents, up slightly from 19.1 percent in 2009. However, nonresident workers earned only 13.6 percent of the $14.1 billion in total wages and salaries paid in 2010. That indicates that a large number of nonresident workers were in low-wage jobs, such as seafood processing and visitorrelated businesses. Seventy-five percent of the seafood industry’s workers were nonresidents in 2010, for example.

Some high-wage industries have relatively high percentages of nonresidents.

Typically about 30 percent of workers in the oil and gas industry, for example, are nonresidents.

Despite the legal impediments, there are many companies and labor unions that actively recruit and train Alaskans because it’s good business, not just because it’s politically correct. All things equal (mainly skills) if a firm can reduce relocation costs by hiring locally, and also have an employee who is suited to Alaska’s climate and less likely to terminate, it only makes sense.

Recruitment Practices

Firms based in Alaska recruit out of state typically when the skills being sought are not available locally.

For many years this was the case in the oil industry, except that now the industry has been in the state for so

many years that employees imported earlier are now long-time residents.

Also, Alaskans joining these companies’ ranks have worked their way up the skill ladder and even to senior management.

The oil companies have also reached out to the University of Alaska to encourage a greater focus on some fields, such as petroleum engineering. Many University of Alaska petroleum engineer graduates, and other engineering graduates as well, now work in the petroleum industry. The same is true of mining, and companies like Usibelli Mines, operator of a coal mine at Healy, have long prided themselves on recruiting University of Alaska graduates.

Another initiative led by the oil in-

Employers can’t tell their employees where to live, of course, and while most employees work eight-to-five type jobs where it is only practical to live relatively near to the job, there are many Alaska industries where seasonality in the work and remote work sites make it easy to live out of state and rotate to the job for extended work shifts, usually several weeks long. dustry was creation of the Alaska Process Industries Career Consortium, or APICC, a coalition of industries formed to work with the university in training the highly-skilled workers who operate large industrial facilities in oil fields, refi neries or power plants.

The APICC initiative has been very successful in steering Alaskans into high-skill jobs.

Employers can’t tell their employees where to live, of course, and while most

www.akbizmag.com • Alaska Business Monthly • September 2012

employees work eight-to-five type jobs where it is only practical to live relatively near to the job, there are many Alaska industries where seasonality in the work and remote work sites make it easy to live out of state and rotate to the job for extended work shifts, usually several weeks long. As long as North Slope oil companies maintained a weekon, week-off schedule, it was expensive and difficult for oil workers to live out of state and commute every week—but when most of the companies went to two-weeks on, two weeks off, a number of employees moved out of state.

Ironically, the North Slope workforce is aging and one trend is that as workers approach retirement age they become more interested in buying retirement homes outside the state, gradually moving to their Lower 48 residences. Many of these people grew up in Alaska and joined the industry in the 1970s and 1980s when they were young. Now these Alaskans are becoming nonresidents by choice, but still working in the state.

There’s really not a lot that employers can do about things like this. One major oil producing company tried to encourage more Alaska residency among its North Slope workers by requiring them to live in the state as a condition of employment, the argument being that they should be within a few hours of travel to the North Slope work site in case of an emergency. This was strongly opposed by the oil workers’ union, however, and eventually the company had to relent and end the policy.

Interestingly, Alaska Native Corporations developing projects within rural regions to create jobs for their shareholders encounter the problem in a different way. Workers from local villages may be recruited and trained for skilled jobs at a mine, for example, but after a period the family decides to move to the city, where living costs are lower and there are more amenities.

If the worker is on a shift of several weeks on and off it can be a sensible choice. However, some of the locallyrecruited workers do keep their residences in the villages. 

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www.akbizmag.com • Alaska Business Monthly • September 2012

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oil & gAs

Oil Reform Requires Fiscal Reform

BY BRADFORD G. KEITHLEY

M

Any opinions expressed herin are the author’s own.

ost Alaskans are familiar with efforts by Governor Parnell the last two years to reform Alaska’s current oil tax structure.

The most recent effort ended earlier this year, when the Governor withdrew the revised oil tax reform bill that he had submitted at the beginning of the special legislative session.

What many are not aware of is something that happened at the end of the special session, immediately before the Governor withdrew the bill.

The Office of Management and Budget is the state agency responsible for preparing and administering the state budget. In an appearance before the House Resources Committee, the head of OMB, Karen Rehfeld, testified that if the Governor’s tax reform bill passed, the reduction in revenues could cause the state budget, which otherwise was projected by OMB to run a surplus for several more years, to turn to a deficit virtually immediately.

Rehfeld estimated that the deficit would be roughly $615 million for Fiscal Year 2013, which began July 1, 2012.

If all other things remained equal, Rehfeld estimated that the annual deficit would grow to roughly $1.03 billion by Fiscal Year 2018.

The Governor withdrew the bill later the same day.

Some took Rehfeld’s testimony as an indication that the Governor’s proposed oil reforms were overly generous. For example, Senator Bill Wielechowski, an opponent of the Governor’s plan, said at the time that Rehfeld’s testimony “makes crystal clear the disastrous impact the Governor’s bill would have on the state treasury.”

Actually, Rehfeld’s testimony showed the reverse, what a disastrous impact recent state fiscal policy is having on Alaska’s ability to regain competitiveness in the oil industry.

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Axed Investment, Exploded Spending

In 2007, Governor Palin and the Legislature passed significant revisions to Alaska’s oil tax, termed “Alaska’s Clear and Equitable Share,” or “ACES” for short.

By some estimates, ACES increased oil taxes by 400 percent and many have argued that ACES has significantly diminished Alaska’s competitiveness in attracting new oil investment.

Prior to the passage of ACES, Alaska state spending was relatively moderate. During Fiscal Years 2004 through 2006, for example, spending from the General Fund was only $2.3 billion, $2.3 billion and $3 billion.

After the passage of ACES, however, state spending exploded. Spending from the General Fund for Fiscal Year 2008, the first year following the passage of ACES, was $4.25 billion, nearly double what it had been only four years earlier.

In the following three fiscal years, spending generally continued to creep upward, but at a reduced pace. Spending from the General Fund for Fiscal Years 2009 through 2011 averaged slightly over $4.75 billion.

In the last two years, however, spending has exploded again. In Fiscal Year 2012, the Legislature appropriated and the Governor approved $6.72 billion in General Fund spending, a new record for state spending. That record lasted only one year, however.

The General Fund spending level approved for Fiscal Year 2013, the current Fiscal Year, is $7.6 billion, a new record.

In short, in the last six years since the passage of ACES, state spending from the General Fund has more than doubled, from $3 billion before ACES, to $7.6 billion this year. Since Fiscal Year 2004, General Fund spending has more than tripled, from $2.4 billion, again to $7.6 billion this year.

With the Governor’s concurrence, those in the Legislature that favor oil

tax reform have spent themselves into a corner. As the OMB Director made clear in her testimony, the Legislature cannot now pass oil tax reform without creating a budget deficit.

Of concern, some in the Legislature appear to suggest that is a corner from which there is no exit.

Special Committee

For the past two years, the House “Special Committee on Fiscal Policy” has been working on, among other things, a website to explain—and provide insights into—the state budget. The website recently was completed and made available to the public.

One part of the website is devoted to discussing various alternatives available to the Legislature for dealing with situations where revenue levels are not sufficient to cover expenses. One alternative listed under that is “Cut Spending.”

In the discussion of that alternative, however, the Special Committee appears to suggest that the solution is only of limited effect. According to the Special Committee, “Alaska’s operating budget has been increasing at about 9 percent per year for the last decade and is expected to continue on this path. Even with tighter budget control, the budget will need to increase as population increases and to adjust for inflation just to maintain current levels of service.”

That is an odd explanation given that, only six years ago with a population level only slightly lower than at present, the state maintained service with much lower spending levels.

The much more likely explanation is that, by dramatically increasing spending after the passage of ACES, the Legislature has created a public expectation that the spending levels will continue. Having done so, at least the Special Committee appears to argue that the Legislature cannot now revert

www.akbizmag.com • Alaska Business Monthly • September 2012

to the spending levels that existed only six years ago.

The Special Committee adds support to this view in the last paragraph of its explanation of why cutting the budget is a limited option. The Special Committee argues that Alaskans “are used to receiving high levels of service from our government. In a recent statewide telephone survey, Alaskans from all political parties chose maintaining state services over balancing the budget for nearly all state services.”

Such a poll is largely meaningless, however.

The oil industry currently provides roughly 90 percent of General Fund revenues. As a result, government services to current Alaskans appear to be a “free good”—Alaskans don’t pay for them in the form of income, sales or even significant property taxes. As long as they don’t have to pay for them, consumers always want “free goods,” and the more of them they can get, the better.

Whether Alaskans want those free goods to continue isn’t the right question to be asking. The question is whether Alaskans want to continue to receive those goods at the expense of continued investment in development of the state’s oil resources.

The Bigger Problem

Moreover, acceptance of a view that the budget cannot be cut sows the seeds of an even larger problem.

A recent study by the Institute of Social and Economic Research at the University of Alaska Anchorage demonstrates the extent of the larger problem.

In the study, “Managing Alaska’s Petroleum Nest Egg for Maximum Sustainable Yield,” ISER analyzes the effects of Alaska’s current spending levels on future generations. The study concludes that, through the Permanent Fund, other forms of savings and including the future stream of state earnings from oil yet to be produced, Alaska has built up a “nest egg” of assets.

The study suggests that if managed properly, earnings from the “nest egg” can sustain government services indefinitely into the future.

Part of the management plan, however, requires limiting current draws from the “nest egg” to “sustainable” levels in order to ensure that the nest egg

is capable of producing a consistent level of earnings in the future. The study defines “sustainable” as the level of spending which can be maintained indefinitely into the future, adjusted for inflation and anticipated population growth.

The study examines the effect of spending beyond sustainable levels and concludes that, depending on the rate of unsustainable spending, the nest egg can be depleted in a number of years.

As the nest egg is depleted, future generations will be required to find other sources of revenue—such as an income, sales or property tax—to continue to fund state government.

Stated on the same basis as the spending levels discussed above, the study concludes that the current level of “sustainable” spending is in the range of $5.35 billion per year. That is slightly more than the level of spending approved by the Legislature and Governor for Fiscal Years 2009 through 2011.

That level is significantly less than what the Legislature and Governor have spent annually during the last two years, however.

Analyzing Fiscal Year 2012 spending levels, the study concludes that “spending above the sustainable level in FY 2012 means Alaskans are passing on an $800 million fiscal burden to future generations and similarly reducing the size of the nest egg.”

The study took place before the Fiscal Year 2013 budget was finalized. Because that spending level is nearly $1 billion larger than for Fiscal Year 2012, however, it seems safe to assume that the “fiscal burden to future generations” from current spending decisions is expanding.

The study concludes that the “fiscal burden will grow every year and the nest egg will shrink at an accelerating pace, until the state reduces spending or finds an alternative source of revenue.”

As a consequence, even if the Legislature is unconcerned about oil tax reform, the need for fiscal reform remains important in order to address the increasing burden current spending levels are creating for future Alaskans.

Incapable of Control?

The theoretical solution to these problems is apparent. The state needs to reduce spending to “sustainable” levels in order to remove itself from the fiscal

corner into which it has painted itself.

The practical solution to these problems is less apparent. Recent Alaska state budgets have become full of spending earmarks. In the current year’s budget, for example, state money is appropriated for repairing a parking lot at a privately owned sports facility, to install AstroTurf at middle school and privately owned sports complexes, and to subsidize airplane tickets for Alaskans outside of Anchorage to fly to Anchorage in the hope that they will attend a basketball tournament during Thanksgiving.

Legislators issue press releases at the end of the legislative session taking credit for the various pieces of state spending that will occur in their district. No individual legislator appears able to avoid participating in the system out of concern that his or her constituents will deem them ineffective if they do not arrange for as much spending in their district as any other.

In short, from a practical standpoint it may be that a slightly modified version of the conclusion reached by the Special Committee is correct—given the higher revenue levels resulting from ACES, it may be that the Legislature and Governor, who originates the budgets and signs the final appropriations bills, may be incapable of controlling state spending levels.

If that is the case, more structural limitations, such as a hard cap on state spending levels, may be required.

What is clear, however, is that given the significantly higher spending levels that have become customary since the passage of ACES, some form of fiscal reform will be necessary before the Legislature is positioned to proceed with “meaningful” oil tax reform and future Alaskans can feel safe that they are being treated equitably.  Brad Keithley is a Partner and Co-Head of the Oil & Gas Practice at Perkins Coie LLP. He maintains offices in both Anchorage and Washington, DC, and is the publisher of the blog “Thoughts on Alaska Oil & Gas.” (http://bgkeithley.com)

www.akbizmag.com • Alaska Business Monthly • September 2012

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construction

Photo by Robin Barry, ENSTAR

Aerial photo of the CINGSA gas storage station (foreground) and the well pad (bakcground), taken in August.

Cook Inlet Natural Gas Storage Alaska Bringing CINGSA on-line for Railbelt utilities

BY GENE STORM

T

he specter of natural gas demands exceeding supply during Southcentral Alaska’s coldest, darkest months has been averted in the short term with the construction of the state’s first commercial storage facility in Kenai. The Cook Inlet Natural Gas Storage Alaska (CINGSA) facility began pumping gas into an underground storage reservoir with a capacity of 11 billion cubic feet (Bcf) on April 1 of this year. CINGSA will release

■ 52

gas to buffer the supply from Cook Inlet producers when the heating and electrical generation demands peak in winter.

Construction began on the facility located on the eastern side of Cook Inlet within the City of Kenai in March of last year following the issuance of a Certificate of Necessity and Public Convenience from the Regulatory Commission of Alaska on Jan. 31, 2011. CINGSA also obtained an additional 56 permits from more than a doz-

www.akbizmag.com • Alaska Business Monthly • September 2012

en local, state and federal agencies for the $161.4 million project, and worked with a host of surface and sub-surface mineral rights owners.

Early work on the project started in May of 2009 when SEMCO Energy, ENSTAR’s parent company headquartered in Port Huron, Michigan, approached TransCanada Corp. of Calgary, Alberta, to develop preliminary engineering and design documents. Initially, TransCanada was going to own the facility, but SEMCO bought out the Canadian company’s interest. CINGSA is part of ENSTAR’s Alaska operations as a natural gas supplier to residential customers and electrical utilities.

The purchase brought to Alaska the expertise of two chemical engineers who had been involved in the preliminary work at TransCanada. Here, they continued their work on the facility as project managers for CINGSA. Richard Gentges and Ed Scarpace brought more than 60 years of combined experience on the design and construction of underground natural gas storage fields to the project in Kenai. They have worked together on 10 similar projects over the

Photo courtesy of ENSTAR

Two welders working on the CINGSA project.

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Multitude of Contractors for Multimillion Dollar Project CINGSA credits success for its project to the contributions and cooperation of local contractors, material suppliers, construction and support services, and governmental agencies. Since 2009, more than 50 Alaska companies participated in the project, infusing more than $33 million into the local economy out of a total capital budget of $161.4 million.

The participating suppliers, construction firms and service organizations included: Pipe, Valve and Fittings Suppliers ■ Tubular Solutions Alaska (Drill Pipe) ■ Puget Sound Pipe and Supply (Anchorage and Kenai) ■ FMC Anchorage (Wellheads) ■ Dowland Bach (Well Safety Panels) ■ Alaska Energy Resources (Well Materials) ■ Alaska Tent & Tarp (Liners) ■ Alaska Instrument Co. ■ Alaska Industrial Hardware ■ Arctic Petroleum Products ■ Ferguson Enterprises ■ Alaska Valve and Fitting ■ Arctic Office Supplies ■ Aurora Engineered Systems ■ Crescent Electrical Supply Co. ■ Engineered Equipment Co. ■ FMC Inc ■ Graybar Electric Co. ■ Industrial Instrument SVC Co. (Kenai) ■ NC Power and Machinery Co. ■ Oil and Gas Supply Co. ■ PCE Pacific ■ North Coast Electric ■ Paramount Supply Co. ■ McJunkin Redman ■ AK Supply ■ Industrial Boilers and Controls (Anchorage) ■ Halliburton Energy Services ■ SteelFab Alaska (Anchorage) ■ NANA Construction ■ Alaska Energy Resources ■ Kenai Welding ■ Metailizing (Kenai) Main Construction Firms ■ Udelhoven Oilfield System Services (Mechanical & Electrical) ■ Nabors (Well Drilling) ■ Kiewit Construction (Foundations) ■ Conam (Pipeline and Gathering) ■ Foster Construction (Site Work) ■ Team Industrial Services (Radiography) ■ Northstar Paving (Water & Sewer lines) ■ 54

■ Superstructures (Warehouse) ■ Baker Hughes (Directional Drilling Services and Coiled Tubing Services) ■ Schlumberger (Well Cementing, Perforating and Coiled Tubing Services) ■ Weatherford International (Casing Crews and Well Testing Services) ■ M-I Swaco (Drilling Mud Services)

Support Services ■ A & L Construction (Snow Plowing) ■ Alaska Communications (Telephone) ■ AIMM Technologies ■ Air Liquide (Nitrogen) ■ Alaska Industrial X-Ray (Weld Inspection Services) ■ Alaska Pacific Environmental (Trash Services) ■ Alaska’s Best Water (Water) ■ Big G Electric (Electric Services) ■ Bluestone (Water) ■ CIC (Tree Clearing and Site Grading) ■ Dave Demster Woodworks (Wood Walkways, Stairs) ■ Dukowitz Machine (Millwright Services) ■ Emerald Alaska (Waste Disposal) ■ ERA Aviation ■ Fastners and Fire Equipment ■ Homer Electric (Electric Power Installation and Service) ■ Kenai Self Storage (Parking) ■ KraxBerger Drilling (Drill Pipe Supports and Water Well) ■ Lynden Transport (Freight for Equipment & Materials) ■ McLane Consulting (Engineering and Survey Services) ■ Peninsula Pumping (Septic Pumping) ■ Pollard Wireline Services (Down Hole Testing) ■ Rain for Rent (Storage Tank Rentals) ■ S&R Enterprises (Sand for Station/Well Pad) ■ United Rentals (Equipment Rentals) ■ Woodcock’s Hydroseeding (Hydro-Seed Berm)

last 30 years. On this project, Scarpace managed construction of the facility’s surface elements while Gentges oversaw development of the reservoir and storage wells.

Critical Factors

Pinpointing the proper location for CINGSA was critical. Factors considered were the size of the reservoir, proximity to existing infrastructure, environmental impact, and overall estimated cost. “We looked at 50 different sites initially, cutting it to the top 10 and then the top three before making the selection,” Gentges says. “It’s essential to do screenings on depleted gas fields to find one that is the right size and has the right level of depletion.”

Declining supplies of natural gas from the Cook Inlet region and the uncertainty of adequate new supplies coming on line drove the development of CINGSA. The Kenai site chosen was an 85 percent depleted gas field that serviced a single Marathon Oil Corp. gas well from October of 2000 until July 2011, producing 23 Bcf during its operational life out of an initial gas-in-place volume of 26.5 Bcf.

Meticulous Construction Planning

Three major buildings were part of the construction at the CINGSA station facility on a 10-acre site in an industrial area of Kenai; the total project footprint including the well pad is 16 acres. The largest is a 70 by 100 foot structure that houses two Caterpillar engine compressor units rated at 2,370 horsepower each. The auxiliary building occupies a footprint 50 feet wide by 80 feet long and provides space for air compressors, a hot water boiler, emergency generator, a motor control center, and switching gear for electrical power. The structure that houses the offices, conference room and equipment maintenance shop is 40 feet wide by 120 feet long. Also on site is a metering building that hous-

www.akbizmag.com • Alaska Business Monthly • September 2012

es instruments that measure gas on both injection and withdrawal from the reservoir.

Also built was a 1,500-foot-long, buried 20-inch pipeline to connect the station to the source of Cook Inlet gas, Marathon’s Kenai-Nikiski Pipeline. The project also included construction of an underground well header and a second 16-inch, high pressure buried 1,400foot pipeline that links the station to the well pad.

Because of Alaska’s distant location from many of the parts suppliers on a project like CINGSA, the construction planning had to be more meticulous, according to Scarpace. “There were millions of pieces that had to be engineered, procured and transported to Alaska,” he says. While most of the parts came from US or Canadian suppliers, items like the low-temperature pipe came from Italy and Argentina. “Part of the challenge on this project was logistics.

Getting everything to Alaska on time was critical. We couldn’t have contractors waiting on parts,” Scarpace says.

Another challenge was weather related. Construction continued through last winter and during the season’s coldest temperatures, some equipment literally ground to a halt. “Some of the equipment just wouldn’t run at 30 below,” Scarpace says.

Drilling Challenges

Drilling the CINGSA’s five storage wells and bringing the reservoir up to operational status presented other challenges for Gentges. The reservoir is located at a depth of 4,900 feet below the surface of the Kenai River, varies in width from one-half to three-quarters of a mile, is 1.5-miles long, and is some 240 feet thick.

Storage reservoirs like CINGSA are pressurized underground gas containers that result in a certain amount of gas that is permanently embedded in the formation. In addition to this physically unrecoverable gas, there is base or cushion gas that must remain or be injected to provide pressurization in the reservoir. The working gas is the volume that is available for withdrawal.

CINGSA capacity can be expanded to store up to 17 Bcf. The five storage wells were drilled to a vertical depth of about 4,900 feet. How

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Storage reservoirs like CINGSA are pressurized underground gas containers that result in a certain amount of gas that is permanently embedded in the formation. In addition to this physically unrecoverable gas, there is base or cushion gas that must remain or be injected to provide pressurization in the reservoir. ever, all five wells are near-horizonotal within the reservoir, so the total depth ranges from 8,600 feet to 11,100 feet.

On the surface, the five storage wells are located about 50 feet from each other on a north-south axis.

“Careful assessment and analysis of the size and shape of the reservoir was most challenging relative to other similar projects, with the drilling itself presenting the greatest challenge,” Gentges says. “There are 12 other producing wells

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in the area of the reservoir, and we had to be careful not to intersect those wells.”

To do that, the drilling team created a three-dimensional map of the existing wells and tailored the drilling program based on that map. “The technology in directional drilling has improved dramatically in the last 20 years. You’re steering the drilling assembly from a laptop computer loaded with sophisticated software,” Gentges says.

Crews accomplished drilling on the five wells at drilling rates of up to approximately 2,000 feet per 24 hours.

The overall drilling time was 26 to 27 days per well from a 5.5 acre well pad.

Well facilities are on property owned by the State of Alaska.

Facility Operations

CINGSA staffs operation of the facility on 12-hour shifts, 24-hours per day.

“The control system is automated and we have dual process controllers, a hot one and an on-line backup,” Scarpace says. “The system is continually polling all of the instruments to make sure they are operating correctly and we have a program that tells the equipment how it should be operating under any given circumstance.”

Gas quality is one of the critical elements monitored in the operation of the facility. “The system is designed to ensure the gas is of correct quality for injection and withdrawal. We filter the gas for condensates and particulates before sending it to the compressors, to make sure we do not harm the compressor cylinders,” Scarpace says.

The facility is designed so that eventually it can be operated from Enstar’s offices in Anchorage. That shift will occur when everyone is comfortable with the operation of the system. “You always have a learning curve, even for experienced personnel. The change will happen once they get familiar with all of the nuances of a new facility,” Gentges says.

Financing for the project came from four different sources. SEMCO Energy www.akbizmag.com • Alaska Business Monthly • September 2012

Gene Storm, a writer living in Anchorage, has covered Alaska business 41 years.

Photos courtesy of Becky McCord’s Photography

owns a 65 percent interest in CINGSA. MidAmerican Energy of Des Moines, Iowa holds a 26.5 percent interest while CIRI and First Alaskan Capital Partners each have a 4.25 percent share. The sale of SEMCO Energy and its holdings to AltaGas Ltd., a Calgary, Albertabased energy infrastructure business, is pending based on regulatory approvals in both Michigan and Alaska.

The sophisticated gas control system provides for switching from injection to withdrawal within a three-hour timeframe. This gives CINGSA the ability to provide gas to its customers quickly. That customer base consists of Southcentral Alaska utilities including ENSTAR, Chugach Electric Association and Anchorage’s Municipal Light & Power. Homer Electric Association will become a customer in November of next year. Between them, these utilities heat and electrify a vast majority of the state’s population.

Declining supplies of natural gas from the Cook Inlet region and the uncertainty of adequate new supplies coming on line drove the development of CINGSA. In a Cook Inlet Gas Study commissioned by the utilities, Petrotechnical Resources Alaska said in March 2010 that “the utilities must develop gas storage to assure deliverability on the coldest days and optimize gas production throughout the year.” That was one of several action items recommended for utilities to be able to supply current customers and accommodate future growth.

The study also addressed the regulatory and market conditions that needed attention to encourage exploration and development of Cook Inlet reserves.

While there is activity in those areas, the long-term natural gas picture is not yet sufficiently clear.

While CINGSA makes the predictability of a peak season gas supply more certain in the short-term, it does not resolve the long-term uncertainty. What is certain, according to the PRA study, is that, “in the future, Cook Inlet utility customers should expect to pay more for the gas used by Cook Inlet utilities to generate heat and electricity.” 

Compressor suction and discharge vessels at the CINGSA facility in Kenai.

Engine compressor pulsation vessels at the CINGSA facility in Kenai.

www.akbizmag.com • Alaska Business Monthly • September 2012

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trAnsPortAtion

Photo courtesy of Cook Inlet Tug and Barge

Two Cook Inlet Tug and Barge tugs assist the 712-foot Horizon Lines containership Tacoma through the ice in Cook Inlet to the Port of Anchorage.

Alaska Tug and Freight Mariners Shipping goods by sea to the 49th state

BY PAULA COTTRELL

F

or many in Alaska, summer means warmer temperatures and longer days. To others in remote areas of the state, it also means the beginning of freighting season.

Freight comes into Alaska one of two ways—by air or by sea. According to the Port of Anchorage, 90 percent of all consumer goods sold in Alaska’s Railbelt arrive by containerships. The freight is usually either trucked to its final destination by a common carrier, or it will travel by rail on the Alaskan Railroad.

As active as the Port of Anchorage is, being located at the mouth of Cook In■ 58

let presents its own challenges—40 foot tides, six months of winter, and ice up to four feet thick. Containerships and barges serving the area rely on a single local company to help them guide their way through the treacherous waters of Cook Inlet.

Transporting Freight in Cook Inlet

Katrina Anderson, Operations Manager at Cook Inlet Tug and Barge, is a fourth generation mariner navigating the waters of Cook Inlet. As the sole provider of ship assist services at the

Port of Anchorage, CITB is a key player in ensuring freight arrives in Anchorage year-round.

Like many Alaskan stories, details of the early days of the company have been lost, but an edition of the Seward newspaper dates the company back to 1938 when it promoted contract mail as well as cargo and passenger service to Anchorage for the company known as Anderson and Sons Transportation Co. This company, run by Capt. Jack and his son, Jack Jr., later became known as Cook Inlet Tug and Barge shortly after the end of World War II.

www.akbizmag.com • Alaska Business Monthly • September 2012

CITB began ship assist services in Cook Inlet when SeaLand began containership service to Anchorage in 1964. TOTE began its containership service to the area in 1975, five years after Jack Jr. retired and split the business between his two sons. Carl Anderson, Katrina’s father, took over the Cook Inlet side of the business in 1974 while her uncle, Jack (Andy) Anderson III moved to Seward to form Anderson Tug and Barge.

Perhaps the reason CITB is still the sole provider of ship assist services in Cook Inlet is because it takes 75 years of experience to understand the nuances of what Anderson considers “a specialized piece of water.”

While Carl Anderson is still involved with the company, he has passed the torch to his daughter, Katrina, who holds a two-ton captain’s license and has been groomed for the business since she could walk the decks of the boats alongside her parents. “You couldn’t keep me away from this business,” Katrina Anderson says. “It’s in my blood.”

In early 2011, CITB was acquired

by Foss Marine Holdings, expanding its operating capabilities. “It’s difficult remaining a small company and keeping up with the demanding compliance regulations of the USCG,” Anderson says. “By joining forces with Foss, we’re able to continue providing the same level of expertise in Cook Inlet with the added advantages a larger company offers.”

Perhaps the reason CITB is still the sole provider of ship assist services in Cook Inlet is because it takes 75 years of experience to understand the nuances of what Anderson considers “a specialized piece of water.” With tidal differences of up to 40 feet and extreme winter weather, Cook Inlet offers plenty of opportunities for danger and misfortune. “Extreme weather combined with current tends to make things nasty,” Anderson says. “When Prince William Sound’s weather gets pushed through the wind tunnel of

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www.akbizmag.com • Alaska Business Monthly • September 2012

flyera.com 59 ■

Photo courtesy of PacArctic Logistics LLC

PacArctic Logistics LLC installed an 888 Manitowac crane with a 250-ton lift capacity to Port MacKenzie to assist with barge operations.

a MeMber of the ukpeagvik iÑupiat corporation faMily of coMpanies

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www.akbizmag.com • Alaska Business Monthly • September 2012

Cook Inlet, conditions change quickly and unpredictably.”

Without a doubt, it is the unusual weather patterns of Cook Inlet that makes the transport of freight to the area challenging. During the winter months, CITB uses two ice-class tractor tugs to clear a path in the frozen water so container ships may gain access to the port. Additionally, the 3,500 and 2,200 horsepower tugs known as the Stellar Wind and the Glacier Wind assist Horizon Lines and TOTE containerships into their berths at the Port of Anchorage.

Because weather conditions are so poor in Cook Inlet during the winter months, the only barges that will brave the journey are those carrying fuel to the Port of Anchorage. These barges are escorted by CITB’s ice-assist vessels.

“When it comes to fuel delivery, nobody wants to mess around,” Anderson says.

“We push through ice up to four feet thick sometimes and we want to make sure not a drop gets spilled in the waters we’ve come to call home.”

New Player in Cook Inlet

Also calling the area home is PacArctic

“In addition to our ice tugs, CITB has two flat-deck cargo barges and two crew boats supporting projects in the area, we’ve provided support to the Port (of Anchorage) expansion, the construction of Port McKenzie, the GCI fiber optic cable installation, and the natural gas platforms in the inlet as well as the Fire Island Wind Farm.”

—Katrina Anderson Operations Manager at Cook Inlet Tug and Barge

Logistics, a wholly owned Koniag Inc. subsidiary, poising themselves to be the leader in development at Port MacKenzie.

Across the inlet from the Port of Anchorage, Port MacKenzie consists of a 14.7acre barge dock with a 500-foot bulkhead, a 1,200-foot-long deep-draft dock, and alternate road access to the MatanuskaSusitna Borough via Port MacKenzie and Knik Goose Bay Roads. Eventual plans for the area include connecting to the rail system via a 32.1 mile rail line from the Parks Highway to the port.

King Hufford, president of PacArctic Logistics, is optimistic about the potential growth for barging operations in Southcentral Alaska. “With the expanded barge dock and the close prox-

imity to Cook Inlet operations, our company offers something that few can in the area—and that is land,” he says.

PacArctic signed a 20-year lease with the Mat-Su Borough for an eightacre parcel of land suitable for staging of project equipment. “We have staged some of the overflow equipment for several projects in the area and we see these services expanding as development in the area increases,” he added.

This year, PacArctic installed an 888 Manitowoc crane with a 230-ton lift capacity to assist with barging operations. “We are posturing ourselves for the next big influx of activity in the area,” Hufford says.

“New and increased industry activities will drive traffic to the expanding port.”

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www.akbizmag.com • Alaska Business Monthly • September 2012

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And those silt issues that the Port of Anchorage has to deal with? “We are a self-dredging port,” Hufford says. “The tides carry the silt away from us making it a non-issue.”

Brice Marine’s ATB

As infrastructure in the area increases, Anderson says they are seeing an increase in project support work across Cook Inlet. “In addition to our ice tugs, CITB has two flat-deck cargo barges and two crew boats supporting projects in the area,” Anderson says. “We’ve provided support to the Port (of Anchorage) expansion, the construction of Port McKenzie, the GCI fiber optic cable installation, and the natural gas platforms in the inlet as well as the Fire Island Wind Farm.”

CITB worked alongside Brice Marine LLC this summer to support the construction of CIRI’s wind farm on Fire Island. CITB transported the project equipment throughout the construction phase using its tugs and barges and provided crew transport to Fire Island with its two newly acquired crew boats.

Brice Marine was tasked with transporting the 240-foot tower sections of the wind turbines. To accomplish this, the company used their exclusively designed articulated tug and barge (ATB), according to Alba Brice, vice president of Brice Inc., parent company for Brice Marine LLC. “The Fire Island project was a good fit for the ATB design and our particular set had a barge configuration that was well suited for the larger components of the wind turbines,” he says.

Brice Marine describes their ATB design as a “tug that is coupled to the barge by large hydraulic rams extruding from the hull of the tug that fit into receivers on the barge. The tug and barge are one laterally but the tug articulates on the vertical axis.” This unified design “takes on many of the characteristics and efficiency advantages of a traditional ship or landing craft, but retains its status as a tug and barge set.”

“The ATB design is most generally used in fuel delivery, but as the nature of Brice’s core business is remote heavy civil construction, we thought the concept would have merit for project support, especially for jobs where a lack of infrastructure and road access

www.akbizmag.com • Alaska Business Monthly • September 2012

Photo courtesy of Brice Marine LLC

The Brice Marine LLC articulated tug and barge delivering equipment and materials to the Seawall Project in Kivalina.

require a landing craft type of vessel for delivery of equipment and materials.,” Brice says.

Equipped with a drop ramp, the ATB is able to land at a location, drop its ramp, discharge its cargo, back away and head to its next destination.

“We really like the efficiency and safety factors that the ATB brings,” Brice says. “There are no tow wires that can be a primary safety hazard for the crew on a typical tug and barge set, and this also means we do not have to spend time making or breaking tow before we are under way.

“The ATB typically has some larger upfront costs for vessel construction, but with its sturdy configuration, efficiencies and operating capacity, we think the concept enhances our capabilities in Alaska,” he adds.

Barge Service for the North

Consumers not on the rail or road system must rely on air or marine transportation to receive their freight. While expensive, air cargo transportation can deliver goods during the cold, winter months when sea travel isn’t an option due to heavy ice and severe weather.

But for most Alaska villages and remote communities, receiving freight by barge during the summer months is the most practical option.

Bowhead Transport Co. LLC is a common carrier providing line-haul barge

service with ocean-going tugs to rural communities and villages in the most northern regions of Alaska. Owned by Ukpeaġ vik Iñupiat Corp., Bowhead, headquartered in Seattle, is committed to providing cost-effective freight solutions to the communities north of Kotzebue and all along the North Slope of Alaska each summer.

Bowhead has scheduled service to the Arctic region annually, requiring barging activities to be coordinated well in advance of the sailings that leave Seattle. “Depending on the volume of freight we are hauling, we may sail one to three barges each season,” says Jim Dwight, general manager for Bowhead.

“We leave Seattle in late June or early July and head straight to Dutch Harbor where we refuel. Then it is on to Nome where the tug and barges will pick up the seasonal employees who flew up from Seattle to join the flotilla and assist in cargo operations,” Dwight says.

“We pick up one or two of Bowhead’s lighterage vessels in Nome and then head straight to Point Hope.”

Upon leaving Point Hope, Bowhead makes stops in Point Lay, Wainwright, Barrow, Prudhoe Bay and Kaktovik before heading back to Seattle with southbound freight. Occasionally shipments that did not make the barge in Seattle are shipped to Alaska and transported by road to Prudhoe Bay, then picked up by Bowhead and delivered to North

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Photo courtesy of Bowhead Transport Co.

Bowhead Transport Co. tug and barge depart Seattle’s Elliott Bay en route to the Arctic.

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Slope destinations. “Delivering freight to these remote areas has its logistical challenges,” Dwight says. “Our team is excellent at safely and efficiently managing lots of activities in a compressed amount of time.”

Due to the shallow drafts in most of the northern communities, Bowhead uses lightering vessels to transport freight from their barges to the shore.

“It becomes a three-vessel operation at Point Lay and Wainwright,” explains Dwight. “The tug holds the barge in place while we lighter freight to the beach; then our lagoon equipment delivers cargo to the villages. It’s the only solution for some of these communities to receive marine freight—none have docking facilities.”

Ice, severe weather and high winds are just some of the environmental challenges Bowhead faces. “During severe storms, our vessels sometimes have nowhere to hide. Planning ahead during these times is critical to ensuring safe delivery of the freight,” Dwight says.

In addition to the weather, Bowhead is vigilant to not disturb the environment. “We are careful to coordinate our operations with community leaders, particularly where whaling and other subsistence activities are taking place,” Dwight says.

Celebrating its 30th anniversary of business operations, Bowhead sees continued growth in the northern region, especially around Barrow and Wainwright as support of oil exploration and production in the Arctic increases. “We’ve had very steady volume over the last 10 years, with 2010 being our biggest year ever as we provided project support for the new hospital construction in Barrow,” Dwight says.

2012 will be another busy year for Bowhead as it assists the North Slope Borough with moving a natural gas drilling rig from Barrow to Prudhoe Bay, as well as performing all of the equipment mobilization for the Kaktovik Runway Project. “UIC is in an excellent position to remain successful,” Dwight says, “and Bowhead is delighted to be a part of the contributing team.”  Paula Cottrell is an Alaskan author.

www.akbizmag.com • Alaska Business Monthly • September 2012

special section

Alaska Native Corporation Review

Alaska Native Brotherhood 100 Year Anniversary A century of progress

BY WILL SWAGEL

T

Alaska State Library – Historical Collections

Alaska Native Brotherhood founding fathers in 1912. From left, Paul Liberty, James Watson, Ralph Young, Eli Kalanvok (Katinook), Peter Simpson, Frank Mercer, James C. Jackson, Chester Worthington, George Fields, William Hobson (an early member), Frank Price. Seward Kunz is not pictured (nor is Marie Moon Orsen).

he Alaska Native Brotherhood is celebrating its 100th anniversary at their Grand Camp convention in October in Sitka, and a number of Alaska’s top leaders are expected to give speeches or send congratulations.

After all, there is no organization more central to Alaska Natives’ fight for citizenship and self-determination than the Alaska Native Brotherhood and its partner organization, Alaska Native Sisterhood. ANB members believe their organization is the oldest Native fraternal organization in the United States.

In a 1971 letter to the Anchorage Daily News, ANB Grand Camp president Frank Peratrovich, a state and territorial legislator and the brother-in-law of civil rights pioneer Elizabeth Peratrovich, objected to an article that referred to ANB as primarily a social organization. He listed some of ANB/ANS’s accomplishments: claiming Native citizenship and voting rights, school desegregation, the extension of workers’ compensation, pensions and aid to children to Alaska Natives, along with protections against discrimination.

ANB’s lobbying is credited with helping form Alaska’s sophisticated Native

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health consortiums and facilities. And with land claims: “It can be argued with documentation,” says Gerry Hope, president of Camp #1 in Sitka, that ANB and ANS played a critical role in the negotiations for and passage of the Alaska Native Claims Settlement Act and the birth of Alaska Native Corporations.

History in the Living Room

Bertha Karras, a lifelong resident of Sitka, was personally changed by the activities of ANB/ANS. She was in the first group of Native students to attend the newly desegregated public schools. The same went for the churches and even the local movie theater, which had separate sections for Natives and whites. Karras remembers her mother, Annie Jacobs, and her brother, Mark Jacobs Jr., both active ANB/ANS members working to get decommissioned WWII naval air base buildings to be used for Native health care and education. Today, the Southeast Alaska Regional Health Consortium, a campus of UA-Southeast, and the state-run boarding school Mt. Edgecumbe High School occupy the site.

Dennis Demmert, of Klawock, also saw history occurring in his living room

when local ANB/ANS members came to his home for meetings to discuss land claims and other issues. Demmert has served a one-year term this past year as ANB Grand Camp President, representing all the local camps.

Demmert spent two decades teaching Native history and education at UA Fairbanks and can quote from memory the legislation behind a century’s worth of Native progress.

In 1912, a dozen men and one woman from the Sheldon Jackson Training School (later SJ College) started ANB during and after an educational conference they attended in Juneau to discuss important issues with Alaska educators and one another. The group of young Native leaders wrote a charter for ANB that required members to speak English, be Christian, take a sobriety oath, and dedicate one’s life to service. They established the first ANB camp—Camp #1—in Sitka.

In a speech last year to the ANB Grand Camp held in Klawock, UA Anchorage history professor Stephen Haycox commented on the conditions faced by early ANB members.

“At the time, their best thinking was that education and acculturation were

www.akbizmag.com • Alaska Business Monthly • September 2012

the best ways to guarantee Alaska Natives’ future. It seems odd to us now, but we must remember the values of the past were not the values of today. The thinking then was that the Natives could survive only if they adopted the ideas, mores and behaviors of the dominant culture.”

Demmert, who heard Haycox’s speech, agrees: “At the time the Alaska Native Brotherhood was formed, Alaska Native people were not citizens. We could not own land. We didn’t have civil rights.

What was being sought was some status to be able to work on these issues.”

After only three years, ANB achieved passage of the Native Citizenship Act. Demmert says Natives could achieve the desired status of citizen, but only after “passing a literacy test, pledging to move from the old ways to Western ways, and also to have the written endorsement of five white men.”

The Next Hundred Years

Once Native citizenship was assured by the 1940’s, ANB’s attention turned to land claims. Demmert explains that the statehood act contained a “disclaimer” that would prohibit the people of the

new state from utilizing traditional Native lands—most of the state—unless the US Congress negotiated the Natives’ title.

Some non-Native politicians wanted the disclaimer removed. Threatening to withdraw their support for statehood, ANB members succeeded in keeping the disclaimer in the statehood act. Haycox said the disclaimer was the basis of the 1971 Alaska Native Claims Settlement Act. “Without the settlement of Alaska Natives’ claims, not only would justice for Natives have been wanting, but there would have been no new economic development in Alaska, because no one would invest money in a project for which the title was not secure. The construction of the Alaska Pipeline, for example, could not go forward without the settlement of Native claims,” Haycox said in his speech. “In insisting on the disclaimer, the ANB and ANS did an incalculable service for Alaska Natives and all other Alaskans, and on that score alone, if on no other, is owed the deepest debt of gratitude and appreciation.”

Although there are a number of ANB/ ANS camps throughout Alaska and as far south as Portland, Ore., ANB has

always been largely a Southeast organization. A long list of Native groups has been developed because of ANB’s activities. The new groups involve Natives throughout the state, such as the Native regional and village corporations, Native health consortiums and the Alaska Federation of Natives.

At next month’s Grand Camp in Sitka, both Grand Camp President Demmert and Camp #1 President Hope plan to charge attendees with considering the organization’s next 100 years. Protecting traditional Native hunting and fishing rights is sure to be a priority in the 21st century, along with the continuing challenges in education, health care and economic opportunity. ANB/ANS is also dealing with an aging membership and a lack of new, young members. Young people may be motivated to invigorate ANB/ANS if they learn what their elders accomplished.

“ANB members need to carve out our role,” Hope says. “Redefine our purpose and think forward for those who are not yet born.”  Will Swagel is an author living in Sitka.

www.akbizmag.com • Alaska Business Monthly • September 2012

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special section

Alaska Native Corporation Review

Arctic Slope Regional Corp.

NANA Regional Corp.

Bering Straits Native Corp.

Doyon Ltd.

Calista Corp.

Cook Inlet Region Inc.

AHTNA Inc.

Chugach Alaska Corp.

Bristol Bay Native Corp.

Sealaska Corp.

Aleut Corp.

Koniag Inc.

The 13th Regional Corp.

Regional Native Corporation Review

A

BY JULIE STRICKER

laska’s Native regional corporations officially entered their 40th year in 2011, having grown into strong, diversified institutions.

They’ve helped educate, hire and train generations of shareholders to be leaders, and have led a resurgence in Native culture and Native values. The corporations are looking ahead, but they maintain strong roots to their past.

In 1971, the federal government passed the Alaska Native Claims Settlement Act to settle aboriginal land claims. Under ANCSA, Alaska’s Natives relinquished claims to their ancestral lands in exchange for 44 million acres of land and $962.5 million, which was

■ 68

divided between 12 regional and more than 200 village corporations. A 13th corporation was later created for Alaska Natives living outside the state. It received a share of the cash payout, but no land.

The corporations were given dual financial and social mandates. They were to create wealth for their shareholders and descendants, provide jobs and protect their social and cultural traditions.

It’s been a mix of calm waters and rough seas, William Anderson Jr., president and CEO of Koniag Inc., wrote in a letter to shareholders.

“Unlike most corporations that begin small with an idea and a product

to sell, Native corporations started with large assets and no clear vision on how to grow those assets into productive corporations,” Anderson wrote.

The corporations had to figure it out as they went.

“It’s gratifying to know that today Alaska Native Corporations are more vibrant than any time in our history,” he wrote.

As they’ve grown, the corporations have become an economic force in Alaska. Together in 2011, they accounted for $8.4 billion in revenue, thousands of jobs in Alaska and even more in the Lower 48 and around the world. All but one was profitable in 2011.

www.akbizmag.com • Alaska Business Monthly • September 2012

The corporations moved forward, despite battling a lackluster national economy still struggling to recover from the recession, and amid stronger competition for government contracts. The federal government is choosing to in-source more contracts and others have moved to the competitive marketplace.

Congressional backlash for solesource contracts under the Small Business Administration’s 8(a) program for minority and disadvantaged companies is causing uncertainty for many Alaska Native Corporations, some of which receive more than 80 percent of their revenue from 8(a) subsidiaries.

“We are—all the ANCs—are facing a very changing world on 8(a),” says Bob Sandt, CEO of Ahtna Netiye, who oversees the day-to-day operations of the corporation’s subsidiaries. “There’s a pretty substantial chill on many in the contracting business that’s causing them to lean away from sole source.”

The contracting business is moving toward the competitive marketplace, he says, which means changes in the way corporations will have to structure

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their subsidiaries and uncertainty for the next few years.

One overriding theme in every region is how to bring down high energy prices. Efforts to boost energy efficiency are widespread. Alternative energy projects are ongoing in several regions and wind farms are sprouting up on the tundra. The state’s largest wind farm is expected to go online this summer in Anchorage, Cook Inlet Region Inc.’s Fire Island.

Another challenge is providing for future generations.

When ANCSA was passed, only those alive at the time were included in the corporation ownership. Those born afterward could only become shareholders if the shares were willed or gifted to them. In 1991, amendments passed that allowed corporations to vote on whether to enroll “afterborns.” To date, several corporations have voted to include the “afterborns,” greatly boosting the numbers of shareholders.

With the expanding shareholder rolls, the corporations are looking back to the land to help provide economic development in their region, and jobs and

opportunities for shareholders. Natural resources, such as gold in the Calista and Bering Straits regions, copper and zinc in the NANA region, and oil and natural gas in Cook Inlet are likely to be big players in the next decade.

Arctic Slope Regional Corp.

Arctic Slope Regional Corp. serves shareholders from eight villages in the far northern reaches of Alaska. The corporation, with 11,000 shareholders of Inupiat descent, is based in Barrow, with administrative offices in Anchorage.

In 2011, Barrow-based Arctic Slope saw a boost from higher commodity prices, led by its Petro Star petroleum and marketing segment. Other business segments include energy support services, construction, government services and resource development.

www.akbizmag.com • Alaska Business Monthly • September 2012

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Overall revenue was $2.5 billion, its highest ever. Since its incorporation 40 years ago, ASRC has distributed approximately $542.5 million in dividends. The fall 2011 dividend of $34.31 per share was down from 2010’s record payout, which was not unexpected, according to a news release from President and CEO Rex A. Rock Sr. “This distribution reflects the impact of declining North Slope oil production and other operational challenges, as well as the importance for the corporation to continually look for ways of diversifying its sources of revenue, and improving its sustainable earnings,” he says.

ASRC is one of the largest Alaskanowned companies, employing more than 10,000 people worldwide.

It expanded into Southeast Alaska with the acquisition of ASRC Construction Holding Co. by McGraw’s Custom Construction Inc. in January 2012. The business, which employs more than 30 people, is based out of Sitka.

Climate change and the increase in commercial traffic is likely to have an effect on life and the economy of the

North Slope. ASRC supports a stronger US Coast Guard presence on the North Slope to help safeguard its communities, and is keeping an eye on opportunities—as well as the challenges—that a warmer Arctic may provide.

Arctic Slope helps support two organizations that are focused on the North Slope community: Arctic Community Foundation and Arctic Education Foundation. In calendar year 2010, ASRC donated nearly $9 million to these two organizations. ASRC also donated nearly $320,000 in sponsorships to such groups as the Alaska Native Heritage Center and First Alaskans Institute.

Since 2007, ASRC has donated more than $1.06 million to tribal organizations.

Ahtna Inc.

Ahtna Inc. went through major changes in 2011. The Glennallen-based cor-

poration radically changed its structure into two major divisions. One, Ahtna Netiye, is the umbrella for the corporation’s operating subsidiaries overseen by CEO Bob Sandt. Netiye means “Our strength.” Its main offices are in Anchorage.

Operations are in fields such as environmental services, government services, engineering, construction and facilities services.

Ahtna Inc. oversees the land and resources, economic development, traditional and customary rights, and village relations and is run by Ahtna President Michelle Anderson. Under that structure, the corporation will be able to reduce duplication for shared services such as accounting and human resources, improving operational efficiency, Sandt says.

It was a process long in coming and was implemented when former President and CEO Ken Johns announced his retirement last year. Splitting the duties made sense, Sandt says. “We’re so busy with just half the deal, I don’t know how he managed everything,” Sandt says of Johns.

Looking forward.

ASRC celebrates Alaska Native leaders and entrepreneurs.

■ 72

www.akbizmag.com • Alaska Business Monthly • September 2012

Ahtna’s stable of subsidiaries works mostly through the Small Business Administration’s 8(a) program, but Sandt is looking to diversify and to increase operational efficiencies.

“We’ve reached the point in time that a number of our subsidiaries have matured from that program and are operating in the competitive marketplace,” he says.

In 2011, Ahtna recorded revenues of $205 million and a net loss of $2.63 million.

Anderson is taking Ahtna back to the basics. “My plan is to focus the company back in the direction we had in the beginning, which is resource development and shareholder development,” she says. Ahtna is also looking for ways to lower the cost of energy in the region.

Ahtna has 1,758 shareholders and is based in Glennallen. It is the only corporation in which all of its eight villages are on the road system. “The road itself is both a blessing and a hindrance,” Anderson says. “I want to focus on the blessing part of it.”

Ahtna is pursuing gas and oil exploration in its region as well as gold. It is looking to attract businesses to the

Glennallen area over the long term and hopes to be able to capitalize on its location, which is bordered by two national parks, Wrangell-St. Elias and Denali.

Shareholder development is a major priority, she says. Ahtna supports the nonprofit Ahtna Heritage Foundation through the Walter Charley Memorial.

The Aleut Corp.

The Aleut Corp.’s businesses were challenged on multiple fronts in 2011, according to CEO Dave Gillespie. A slowdown in government services contracts affected its Aleut Management Services subsidiary. Legal action over its Aleut Fisheries seafood processing plant on Adak Island continued and increasingly restrictive fishery regulations affected fuel sales by the Aleut Enterprise subsidiary. The corporation’s real estate businesses are still feeling the effects of the recession.

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Despite the challenges, TAC was profitable in 2011, in large part because of its diversified business interests.

The corporation, with a land base that stretches from the Alaska Peninsula along the Aleutian Chain to Attu, has subsidiaries in government operations and maintenance contracting, fuel sales and delivery, real estate and gravel operations. It recently acquired an oil well testing facility in Bakersfield, Calif.

TAC reported revenues of $143 million in 2011, a decrease of 10 percent.

Its income before taxes was $8.37 million, a decrease of 59 percent from 2010.

However, the corporation remains healthy, President Thomas Mack wrote in a letter to shareholders, with $31 million in cash reserves and more than $11 million in its permanent fund.

Dividends increased to $21 per share. The Aleut Corp. has about 3,700 shareholders.

The corporation is looking to increase its business diversity and is expecting an upturn in fuel sales and other services as marine traffic increases through the Bering Strait. A new operator has taken over at the fish processing

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www.akbizmag.com • Alaska Business Monthly • September 2012

plant, and continued strength in the oil industry is likely to result in increased opportunities for Aleut Industrial Services, which has operations in California and on the North Slope.

Bristol Bay Native Corp.

Bristol Bay Native Corp. is continuing to expand. It has 30 subsidiaries with operations in 40 states, eight foreign countries and employs 2,800 workers with an annual payroll of $180 million. About $4 million of that payroll went to shareholders. It has a land base in southwest Alaska around Bristol Bay, about 150 miles southwest of Anchorage. BBNC has 9,000 shareholders of Eskimo, Indian and Aleut descent.

In February 2010, BBNC reorganized its subsidiaries, which fall under four business sectors: petroleum distribution, construction, government services and oilfield and industrial services. It is also looking for business opportunities in the Bristol Bay region itself. The corporation has a successful rock and gravel operation, which has provided material for local airfields, roads and other projects.

2011 brought record revenues for BBNC of $1.67 billion, with net earnings of $43 million. The corporation is using its success to increase dividends, education funding and increase benefits to elders.

Bering Straits Native Corp.

and increased minerals exploration on BSNC’s lands. The corporation noted that although it has successfully won new government contracts under 8(a), competition has increased and margins are often lower. Contract revenues increased 5 percent over 2010 to $187 million.

In fiscal year 2010, BSNC and other village and nonprofit corporations bought Pilgrim Hot Springs and are currently exploring ways in which they can harness the area’s geothermal energy to provide low-cost power for the region, as well as use the springs for cultural and social programs.

Our histOry Aerospace & technology services Yulista Management Services, Inc. Y-Tech Services, Inc. Yulista Aviation, Inc.

Construction & engineering Brice Companies Tunista Services, LLC Tunista, Inc. Tunista Construction, LLC Yukon Equipment, Inc.

environmental services Brice Environmental

telecommunications Bering Straits Native Corp.

Bering Straits Native Corp. is headquartered in Nome and is owned by 6,300 shareholders. The region encompasses most of the Seward Peninsula and coast of eastern Norton Sound. Operations include real estate management and development, tourism, construction, mining services and federal contracting under the SBA 8(a) program.

Despite a slowdown in government services, BSNC’s revenues grew to $206 million, with a net profit of $9 million, helped in part by an increase in 7(i) revenue sharing from other corporations

The region is rich in minerals such as tin, cassiterite, platinum and possibly rare earth minerals. Exploration is continuing. NovaGold completed construction of a gold mine at Rock Creek, but shut it down before it went online. It is fi nalizing a reclamation plan for the site. However, Bering Straits’ management is analyzing whether the mine can be brought into production.

The village corporation for Wales is developing a source of rock and gravel for local projects. The Coast Guard and other agencies are evaluating areas in

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yOur Future CAlistA COrpOrAtiON is dediCAted tO MeetiNg ANCsA ObligAtiONs. Expanding business services and diversifying its client base allows Calista to remain competitive and prosperous. Through its hard work and smart investments Calista sees success in the following ways: • Calista revenues totaled over $300 million in 2011, a 30 percent increase from the year before • Shareholder/Descendant hire rate at Calista is 50.9 percent

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www.akbizmag.com • Alaska Business Monthly • September 2012

75 ■

the region as staging grounds to support new operations in the Arctic.

With its location on the eastern Bering Sea coast, BSNC is strategically located to benefit from increased marine traffic through the Northwest Passage. The corporation is looking at how shareholders can benefit from the traffic while still preserving their traditional lifestyles.

Calista Corp.

Calista is owned by 13,000 shareholders of Yup’ik, Cup’ik and Athabascan descent, representing 56 villages in the Yukon-Kuskokwim region of southwest Alaska. Many of the residents speak Yup’ik, which is the second mostspoken Native language in the United States, according to the US Census.

Overall, 2011 was a successful year, with revenue jumping from $300.5 million over 2010’s $230 million. Net income, however, was $15.7 million, down from $18.3 million in 2010.

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At that time, the April 2011 dividend was the largest in corporate history, at $3.65 million. April 2012 was larger still at $3.99 million. Sixty-five percent of Calista’s revenues are from its government contracting and professional services subsidiaries through the federal Small Business Administration’s 8(a) program, although it is working to diversify its holdings. The acquisitions of Brice Inc. and Yukon Equipment are part of that strategy. In 2010, 70 percent of Calista’s revenues came via the 8(a) subsidiaries.

Under President and CEO Andrew Guy’s direction, the corporation heightened its focus on infrastructure projects, partially funding the Chikuminuk hydro project in concert with regional utility Nuvista and others. When complete, the project could power almost half of the Calista region and possibly the town of Dillingham.

Calista also acquired two companies, AtContact Communications and Sequestered Solutions, and founded a third, Calista Real Estate LLC. It shut down and liquidated Alaska Newspapers Inc., a chain of rural weekly newspapers.

Looking ahead, the Donlin Gold project could provide thousands of jobs and revenue for the region. Years of exploration have turned up more than 33 million ounces of gold. Donlin Gold’s board voted in July 2012 to advance to the permitting phase. Permitting is estimated to take three years.

The corporation also increased its benefits to youth. Since 1994, Calista has awarded $2.6 million in scholarships, with more than half of that total since 2007. In 2011, it distributed $314,750 in scholarships and $104,000 for internships. Since its creation in 2010, the Calista Heritage Foundation has awarded more than 250 scholarships to students representing 76 communities.

In 2011, 11 people participated in Calista’s internship programs. Four of the interns were flown to its subsidiary in Alabama, Yulista Aviation, to gain invaluable aeronautical engineering experience.

Calista is working to improve its communications with shareholders and in 2011 opened a Calista Corp. office in Bethel and held several shareholder relations meetings and fundraisers in villages.

www.akbizmag.com • Alaska Business Monthly • September 2012

Chugach Alaska Corp.

Chugach Alaska is looking toward the future. The corporation, which has a land base in the Prince William Sound region, is focusing on education and the importance of investing in future generations, according to Beth Welty, communications specialist. Between 1997 and 2011, the corporation funded more than $4 million in scholarships to more than 750 shareholders and descendants.

Chugach Alaska, which declared bankruptcy in the 1980s, was one of the first regional corporations to find success with government contracting, and it still forms the bulk of its business sector. Its subsidiaries operate in government contracting, commercial services and investments.

Its revenue in fiscal year 2011 was $766 million, down from $937 million in 2010.

In July, Barney Uhart, president of the government contracting division, retired from Chugach Alaska after 19

years. Uhart helped lead the corporation out of bankruptcy and was instrumental in forging a path for other regional and village corporations, many of whom still rely heavily on government contracting businesses. The board named Uhart “president emeritus” for his years of service to Chugach Alaska.

Gabriel Kompkoff, who serves as president of Chugach’s Commercial Division, was named CEO. Chugach Alaska is owned by 2,300 shareholders of Alutiiq, Eskimo and Indian heritage.

Cook Inlet Region Inc.

Anchorage-based Cook Inlet Region is changing the skyline in Alaska’s largest city with the installation of 11 wind turbines on Fire Island. Power generation is expected to begin in September.

“It’s part of CIRI’s overall belief that energy is a growing place,” says communications director Jim Jager.

CIRI is owned by more than 7,300 shareholders descended from nearly every group of Alaska Native. It has subsidiaries in real estate, energy and alternative energy, oil field services, tourism and construction, among others. Total revenues in fiscal year 2011 were $201 million, with a net income of $29.6 million.

CIRI has also partnered with other groups to bring wind farms online in the Lower 48. It is continuing its Stone Horn Ridge underground coal gasification project on the west side of Cook Inlet, which is still in early phases, but looks promising, Jager says.

Significant oil and gas leasing is continuing on CIRI land and the corporation is eying investments in Cook Inlet oil and gas projects. Jager says Cook Inlet is only going to get busier.

“For the last 20 years or so, give or take, everybody has managed Cook Inlet gas for its lowest short-term cost,” he says. “As a result, no one has been investing in infrastructure and no one has been investing in exploration.”

Profit margins in Wyoming were much higher, so business went there, Jager says.

www.akbizmag.com • Alaska Business Monthly • September 2012

77 ■

Recently, regulation changes mean Cook Inlet gas prices are now higher than national gas prices. “Now it makes sense to come up and look in Alaska,” he says.

CIRI bought a majority interest in Cruz Energy Services LLC, which is working primarily in Bakken in North Dakota, and Cruz Marine, which provides marine construction services in Alaska.

Cruz Marine did some of the work to install submarine cable to Fire Island.

Another acquisition is of a majority interest Weldin Construction, a construction services company in Alaska. Weldon works on a variety of projects, including government construction systems. CIRI is starting a subsidiary of Weldin that would work on 8(a) contracts.

“We haven’t abandoned 8(a),” Jager says. “We don’t look at 8(a) as a business.

We view 8(a) as a way to get contracts for existing businesses. The businesses we do 8(a) work in, we think they’re good businesses to be in, regardless.”

CEO Margie Brown is stepping down and will be replaced by Chief Operating Officer Sophie Minnik. “It shouldn’t be a big change for CIRI,” Jager says. “We have a tried and true hand moving into the office.”

■ 78

Doyon Ltd.

2011 marked the 27th consecutive year of profitability for Doyon and the 24th year the corporation has paid a dividend.

It operates subsidiaries in oil field services, government contracting, land and natural resource development, utility management, security, engineering, facility management and construction.

Its subsidiaries employ more than 2,800 workers in 14 states.

Doyon reported revenues of $314 million in 2011, with a net income before taxes of $41.2 million. It was the second most profitable year in the company’s history, led by strong performance from its oilfield services companies.

Headquartered in Fairbanks, Doyon Ltd. is the largest private landowner in Alaska, with more than 12.5 million acres, about the size of France.

It is owned by 18,500 shareholders of primarily Athabascan descent. Doyon’s

shareholder rolls doubled in 2011 as it opened its doors to descendants of the original shareholders.

The corporation is actively encouraging responsible petroleum and mineral exploration on its lands, which include several areas of high mineralization and historic placer mining. Recent drilling in the Nenana and Yukon Flats region indicates the potential for large oil and gas fields. Doyon has completed preliminary drilling operations in the Nenana region, with indefi nite results.

Doyon is focusing on increasing its profitability and finding ways to employ more shareholders.

President and CEO Norm Phillips retired in September 2011 and Aaron Schutt was named to those positions.

Koniag Inc.

2011 was a year of growth for Kodiakbased Koniag. Its investments and op-

www.akbizmag.com • Alaska Business Monthly • September 2012

erating companies performed well, providing $131 million in revenue and $8.7 million in net earnings.

Revenues were slightly down compared with fiscal year 2010, in part because Kodiak sold its Washington Management Group and subsidiary FedSources to Deltek Inc. It retains a portfolio of operating companies in business sectors such as information technology, manufacturing, construction and technical services.

The bulk of Koniag’s revenues are from government contracting: 67 percent of the $119 million in 2011 contract revenue came from government services. Koniag saw decreases in some sectors in fiscal year 2011 because of government in-sourcing, more competitive delays or cancellation of contracts and higher overhead costs. Other sectors, such as its technical services and manufacturing subsidiaries continued to show strong growth.

The company, which has 3,789 shareholders of Alutiiq descent, is focusing on projects on their lands within the Kodiak National Wildlife Refuge. Subsidiary Karluk Wilderness Adventures

operates rental cabins along the Karluk River and a commercial bear-viewing operation based on Camp Island is under development.

A granite quarry near Shakmanof Point is in the permitting stage.

Through the Koniag Education Foundation, more than 150 scholarships are awarded annually.

“As a corporation, we balance our shareholder benefits—dividends, cultural preservation and education,” Will Anderson, president and CEO of Koniag wrote in the 2011 annual report.

“Sharing benefits today is equally as important as understanding our past and nurturing our future leaders.”

Sealaska Corp.

Despite challenging conditions in 2011, Sealaska boosted its revenue. In 2011, Sealaska reported revenues of about $260 million, up from 2010. But its net

income, at $7 million, is only half of 2010’s profits.

Timber has long been the mainstay of the southeast Alaska economy and for Sealaska Corp., the regional corporation based in Juneau. But the corporation is having to work hard to maintain the sustainability of its timber operations. Sealaska continues to fight for congressional legislation awarding it land it has selected under ANCSA, which would give it a base for longterm, sustainable operations.

The corporation is actively searching for a profitable enterprise that will economically benefit Southeast Alaska, with potential for global growth, and that provides jobs for shareholders.

Sealaska has subsidiaries in a variety of government services fields, natural resources, manufacturing and gaming.

Sealaska is focusing on creating jobs and a stronger economy in Southeast Alaska. In 2011, the corporation and Kake Tribal Corp. worked together to reopen a fish processing company that employed 20 shareholders.

Its Alaska Coastal Aggregates subsidiary saw a 99 percent rise in net rev-

www.akbizmag.com • Alaska Business Monthly • September 2012

79 ■

enues, a new retail sales office in Yakutat, and increased shareholder hire in Klawock, Kake and Hoonah.

Haa Aani, which is tasked with building economic growth in Southeast Alaska, worked with a shareholder in Angoon to revitalize a defunct oyster farm and partnered with another group to build three oyster farms in the Yakutat area. These farms will provide jobs and are expected to produce more oysters in 2012 than the entire state of Alaska combined.

Another initiative, Haa Aani, has been working on renewable energy. It’s oil-to-wood-pellet conversion at Sealaska Plaza headquarters in Juneau saved the corporation $45,000 in heating costs in 2011. The US Forest Service and Coast Guard have also converted their buildings to renewable energy.

Despite a challenging climate, Sealaska’s government services subsidiaries continued to show growth in 2011. Sealaska Environmental Services won three large contracts in 2011 and was due to become Sealaska’s first subsidiary to graduate from the SBA 8(a) program.

In 2011, Sealaska and Sealaska Timber Corp. provided $477,000 to Sealaska Heritage Institute for its scholarship programs. Sealaska Heritage Institute, a nonprofit whose mission is to preserve and enhance Southeast Alaska’s Tlingit, Haida and Tsimshian cultures, is spearheading an effort to build a cultural center in downtown Juneau. The center would honor the teachings of Dr. Walter Soboleff, who died at age 102, and showcase Southeast Alaska Native arts and culture.

NANA Regional Corp.

In February 2012, the last load of ore was taken out of the main pit of the huge Red Dog Mine north of Kotzebue. It was a milestone for Teck Alaska and its partner NANA Regional, which worked together to put Red Dog online in 1989.

For more than 20 years, Red Dog has been the financial backbone of the region, generating millions of dollars in ■ 80

payment in lieu of taxes to the Northwest Arctic Borough, hundreds of millions of dollars in royalties to NANA and employing hundreds of NANA shareholders.

Alaska Natives around the state also benefit from Red Dog through the 7(i) resource sharing provision of ANCSA. In 2011, NANA shared $82 million through 7(i).

The closure of the pit didn’t have dire consequences, as the main mining effort was moved to the adjoining Aqqaluk deposit in 2010. “We hope and expect to be mining beyond 2030, as long as commodity prices hold up,” says Dr. Lance Miller, vice president of resources for NANA. 2011 was a strong year for NANA, which reported earnings of $1.8 billion with a net income of $25.5 million. It declared $22.1 million in dividends.

NANA is a region the size of Indiana in the northwest corner of Alaska that encompasses 11 villages with 13,000 shareholders of Inupiat descent. No roads connect any of the villages.

With the success of its relationship with Teck Resources under its belt, NANA teamed up with NovaCopper in November 2011 to explore rich mineral deposits in the Upper Kobuk region.

About half of the workforce is made up of NANA shareholders.

In everything it does, NANA works to promote shareholder hire. In 2011, 1,390 NANA shareholders worked for the NANA family of companies, earning $53 million in wages. NANA Regional owns NANA Development Corp., which oversees a broad range of affiliates and subsidiaries in such fields as resource development, engineering, construction, real estate, hotel development, technology and facilities management. In 2011, NANA acquired Grand Isle Shipyard Inc., a Louisiana-based offshore oil and gas industry support company.

Overall, NANA employs more than 13,400 people worldwide. NANA’s businesses generated more than $29 million.

NANA spent approximately $5 million in 2011 on social and cultural programs, scholarships, elder programs, language revitalization efforts and other social programs. NANA contributed $3.3 million to the nonprofit Aqqaluk Trust, which promotes the Inupiaq language, awards educational and vocational scholarship and other programs

to enhance Inupiat culture. In 2011, the Aqqaluk Trust awarded 356 scholarships worth $830,300. As part of its cultural efforts, NANA partnered with Rosetta Stone software to produce two Inupiaq language CDs, which are available to all shareholders.

NANA also works with a variety of public and private entities to help mitigate the high cost of energy in the region through a combination of conservation and development of renewable energy resources. Wind farms are online in Kotzebue and Selawik and projects are under design in Deering and Buckland.

The use of hydro and biomass to provide energy is being studied.

The 13th Regional Corp.

When ANCSA was passed, it did not include any provisions for Alaska Natives living outside the state. A later amendment created The 13th Regional Corp., which was incorporated in 1975 with about 4,000 shareholders. It received $54 million from the ANCSA settlement, but no land.

The corporation, today based in Seattle, has struggled over the decades and has virtually disappeared in the past few years after bad decisions and infighting sank the corporation financially. It hasn’t issued financial reports since 2006 or had an annual meeting since 2007. Its last communication with shareholders was in 2008 and its website was taken down in 2009.

Today, it’s struggling to reorganize with no operations, no income and a volunteer board of directors. Its problems have kept it from being able to qualify for SBA 8(a) contracts. The corporation is looking to Congress to help it claim a land allocation, which would give it access to 7(i) revenue sharing.

Messages to those listed on The 13th Regional’s board of directors were not returned.  Julie Stricker is a writer living near Fairbanks.

www.akbizmag.com • Alaska Business Monthly • September 2012

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special section

Alaska Native Corporation Review

Village and Urban Native Corporations Questions of balance

BY WILL SWAGEL

A

submarine fiber-optic cable provides broadband Internet service to Kodiak Island. A new hospital, triple the size of the old one, will serve Barrow and five surrounding villages. Crossing guards kept throngs of cruise ship tourists safe and secure on the jam-packed streets of downtown Juneau this summer.

These are all business services in Alaska made possible by Alaska Native village and urban corporations. These types of activities may be highly visible to the residents of a corporation’s home village—many of them shareholders.

The Alaska Native Claims Settlement Act created more than 240 urban and village corporations. In the 40 years since, many shareholders have moved elsewhere in Alaska, the Lower 48 or even overseas.

Those far-flung shareholders might pay more attention to the profits their Alaska Native Corporations obtain by utilizing their favorable standing in seeking government contracts. The same three corporations that laid the fiber-optic cable, built the new hospital and supplied the crossing guards also provide cybersecurity, submarine maintenance and heavy-lift helicopter repairs to various departments of the United States government.

While these corporations are tasked to maximize profits for their shareholders, they are also under strong pressure to be a source of economic development and employment in the home villages.

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Photo courtesy of Goldbelt Inc.

The Mt. Roberts Tram is one of many Goldbelt Inc. money-making ventures for the Juneau-based urban Alaska Native Corporation.

Balancing these priorities occupies the chief executive officers of some of Alaska’s top ANCs. “It’s an ongoing conversation in almost every community at one point in time, as to whether the village corporation goes outside the village or even outside the region in order to provide revenue, because it can be very difficult to make much revenue at the local level,” says Charles Parker, CEO of Alaska Village Initiatives. AVI provides train-

ing and consulting services to small ANCs and collaborates with larger ones on lobbying and advocacy. “They have to find a way to balance it.”

Top of the World

The village and urban ANCs range greatly in size. Parker says the largest have a score or more subsidiaries, hundreds of millions of dollars in revenue, and very competent management. But the majority of the corporations are

www.akbizmag.com • Alaska Business Monthly • September 2012

Photo courtesy of UIC

.

The Barrow Replacement Hospital is scheduled for completion this fall. A joint venture between Ukpeagvik Iñupiat Corp. and Arctic Slope Regional Corp. employed many shareholders on the multi-year construction project.

mid-sized and have much workforce. They may qualify smaller revenues and stafffor special programs for dising. The smallest corporations advantaged firms. may have no professional This has made partnermanagement and receive their ing with ANCs an attractive funds largely from revenue proposition for Lower 48 firms sharing and land-use permits. wanting a competitive edge.

A sizeable number of ANCs Increasingly, ANCs are electprofit from special advantages ing to use the expertise they Anthony granted them (along with are gaining for their own startEdwardsen Hawaiian Natives and some ups. The ANCs often have both other Native tribes) when they bid for partnerships/joint ventures and start-ups contracts in the Small Business Admin- in their roster of subsidiary companies. istration 8(a) Business Development Take Ukpeaġvik In~upiat Corp., one of contracting programs. ANCs, for in- the largest village corporations. Located stance, are eligible to receive sole-source in Barrow, UIC is involved in oil and government contracts regardless of the gas support; shipping; construction; size of the contract, where other com- and scientific, professional and technipetitors may be limited to smaller con- cal services. Although their 8(a) contracts. ANCSA firms may own multiple tracting work may range all the way to 8(a) companies, while other firms may Helmand Province in Afghanistan, they own only one. As 100 percent minor- are also putting a strong mark on their ity-owned, ANCs can attract partners home region in the Arctic. They are wishing to increase the diversity of their working with a major oil company and ■ 84

two other ANCs to support shore-based facilities on the North Slope. In partnership with the regional ANC, Arctic Slope Regional Corp., UIC is putting in water and sewer lines in Barrow and several other villages. UIC operates barges that supply heavy equipment, construction materials and general cargo to villages all along the northern coast.

But what UIC President and CEO Anthony Edwardsen most wants to talk about is UIC’s joint venture with ASRC, constructing the Barrow Replacement Hospital. The new facility will be triple the size of the current hospital and serve the communities of Barrow, Nuiqsut, Kaktovik, Atqasuk, Wainwright and Point Lay. When the $85 million project is completed this fall, UIC will provide building maintenance, housekeeping and most other non-medical services.

“UIC is the largest landowner in Barrow,” Edwardsen says. “When it comes to new facilities, like the borough facili-

www.akbizmag.com • Alaska Business Monthly • September 2012

ties, you’ve got to come to UIC and ask for use of the land. For example, the new hospital that’s coming on board?

The Indian Health Service had to come to UIC and purchase the land.

“Since UIC was providing the land, we wanted some of the work to come to us,” he adds. “We use our land as leverage. And it has worked out very well for UIC.” Edwardsen says he hopes the expertise gained partnering on large construction projects with other entities will position UIC well to work with other Native American firms and organizations in Arizona, North Dakota and Washington state.

“We’re not just focusing on Alaska,” says Edwardsen of the growth of the UIC commercial construction division.

“We’re also focusing outside of Alaska where there is a lot of work.”

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At Old Harbor Native Corp., located in that village on Kodiak Island, CEO Carl Marrs has brought the expertise he gained at the helm of Cook Inlet Regional Inc. to what he describes as a “medium-sized” ANC. “Operating a village corporation is substantially different from operating a regional corporation, because it’s all personal,” Marrs says. “You see the needs that the village shareholders have more directly.”

Making business even more personal, Marrs went to school in Kodiak. “I’ve known a lot of the guys in Old Harbor for a long time,” he says. “I love this island and the people who live here.”

Although Old Harbor has a large number of enterprises elsewhere in Alaska and the Lower 48, Marrs says the instructions from his board have been to try and “stop the exodus of shareholders from our village.”

“Our focus has been: How do we create an economy in the village so that people who are living there can live there decently and those people who had to leave to find jobs can come home,” Marrs says.

“We were able to put in a new boat harbor and a new dock. The ferry is now stopping in Old Harbor. We’re extending the runway to allow bigger planes with more freight, which will allow (fishermen) to fly fresh fish out. Then we’re looking at new hydro. All of which breaks down the cost

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85 ■

Photo courtesy of Old Harbor Native Corp.

The new dock facility at Old Harbor allows for continued fuel delivery to the community, new ferry service from the Alaska Marine Highway System, safe freight delivery, safe gear loading (off and on) for fishing vessels, safe moorage refuge for vessels on the southeast side of Kodiak Island, and support for future economic development efforts.

of living in the village, and also Old Harbor also owns the tends to have people look at the Grande Denali Lodge and the village more favorably because Denali Bluffs Hotel—both in you can then put in operations Denali National Park, among that are more economic.” other commercial properties.

Marrs says cooperation beOld Harbor’s 8(a) division, Three tween the city, the tribe and the Saints Bay LLC, does business corporation was a key factor in with the US government in Virattaining such improvements. ginia, South Carolina, Texas and Carl Marrs Old Harbor Native Corp.’s California. They have acquired logo depicts a spiral—a shape which or formed the following LLCs: Amee Bay, well describes the company’s influence Barling Bay, Rolling Bay, SAGE Technoloas it flows out from the traditional Alu- gies and Shearwater Systems. tiiq village. Firstly, Old Harbor’s Anchorage-to-Kenai-to-Homer-to-Kodiak “Graduating” Companies fiber-optic link provides broadband Goldbelt Inc. is the urban ANC in service to 10 percent of Alaska’s people. Juneau. Urban ANCs are similar in The system provides real-time trans- structure to village corporations, but mission to such vital sites as the Kodiak revenue-sharing funds are paid directly Coast Guard base, the Kodiak Rocket to shareholders, instead of going first Launch Facilities and the Mid-Course to the company. Goldbelt has 3,200 Missile System. Improvements are un- shareholders—10 times or more the der way in microwave transmission number of shareholders in some village systems in Ouzinkie, Port Lions and corporations. About a third of Goldbelt shareholders still live in Juneau.

Old Harbor, among other villages.

A tour of Juneau would feature many “If you have real-time capacity, you can create economies out of that also,” of Goldbelt’s local holdings. The Mt. Roberts Tram takes tourists and others Marrs says.

■ 86

to a mountaintop complex of restaurants, hiking trails, gift shops and other amenities. The 105-room Goldbelt Hotel faces the waterfront, where Goldbelt also operates the Seadrome Marina—moorage for yachts and other vessels up to 300 feet. Goldbelt provides marine transportation to the workers of the Kensington Mine on the east side of Lynn Canal, about 45 air miles from Juneau.

Goldbelt receives a significant proportion of its revenue from more than a dozen subsidiaries making up the contracting side of the business, says CEO Bob Loiselle. Striking a balance between contracting with the government and offering services to the private sector is a balancing act that has to be continually adjusted.

“We’re fairly well diversified, but not as well as we would like to be,” Loiselle says. “It’s our goal to try and grow that government contracting business—but at the same time get more business going here in Alaska and elsewhere. We want to develop a more balanced portfolio so we are not so dependent on the vagaries of the federal government or

www.akbizmag.com • Alaska Business Monthly • September 2012

who might be in office at the time.”

The 8(a) contracting advantages and the contracts they helped ANCs secure “have been a real springboard” for the Native firms. But for Bob Loiselle any one company, the 8(a) advantages run out in nine years (sooner in some cases)—a circumstance Loiselle refers to as the firm “graduating.”

“The goal is that after you graduate you continue on without the benefit of the 8(a) advantage,” Loiselle says. “We have a number of our companies that have already graduated from the program and are doing work outside of the federal government arena. Our goal is to make sure that after (the companies) graduate, they’re still viable.”

Loiselle says the key for ANCs is to couple any competitive advantages with a reputation for superior service.

“You have to be competitive on a cost basis, but you also have to have good past performance,” Loiselle says. “You want to be viewed as someone they want to keep around.”

While starting up a brand new business may be challenging, partnering with an existing firm can be dangerous, too.

Alaska Village Initiatives’ Parker says a smaller ANC needs to be prepared—and competent—to carry out their own due diligence. He said his own village corporation, Sitnasuak of Nome, had a similar experience several years back.

“You essentially have a big brother you can learn from and the big brother benefits from gaining that competitive advantage, as well as marketing opportunities,” Parker says. “A lot of very successful growth has come from that, but there have been just as many or more (ANCs) that partnered with a company, and the company they partnered with made money but the Native corporation didn’t.”

UIC’s Edwardsen says he knows such situations occur—and how to steer clear of them.

“That’s why we are so successful in the government contracting,” Edwardsen says. “We’re very careful who we joint venture with.”  Will Swagel is an author living in Sitka.

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Alaska Native Corporation Review

special section

U.S. Coast Guard photo by PA1 Sara Francis

Aerial view of Kivalina from about 150 feet above during a Coast Guard Arctic Domain Awareness flight in mid-October 2008 during seawall construction. The community intends to use this year’s HUD grant money to upgrade substandard housing.

Constructing the Future HUD grants improve Alaska Native housing

Photo by Dimitra Lavrakas

O Sen. Lisa Murkowski on a visit to Skagway talks abut the importance of the HUD Indian Housing Block funding for Alaska Natives.

■ 88

BY DIMITRA L AVRAKAS

n a recent visit to Skagway, Sen. Lisa Murkowski leaned forward to emphasize the importance of the U.S. Department of Housing and Urban Development’s $67.45 million in Indian Housing Block Grants for tribes in Alaska.

“It will have a considerable impact across the state,” Murkowski said.

She said she thinks the funding should be beefed up or at the very least continued on a level funding.

“We have to make sure Alaska’s share remains the same,” she said. “If the tribes had not spent the money, the Senate Appropriations Committee wanted the money back, but the tribal authorities said they could use it all.”

Of greatest importance to rural villages is safe, affordable, energy efficient housing that ensures residents can remain in their communities, she said.

Arctic Challenges

Kivalina is at the tip of an eight-mile barrier reef of 1.9 square miles between the Chukchi Sea and Kivalina River in Alaska’s Arctic. It has 386 residents with their backs against the sea.

“We have nowhere to build, but have a whole lot of rehab to do to existing housing,” says Native Village of Kivilina Tribal Administrator Stanley Hawley. “We’re building in the evacuation site, but the State of Alaska wants to build a new school there. We don’t have concrete plans to move the village, but that’s been on everybody’s mind the last 20 years.”

In the meantime, the $261,149 in block grant money will deal with the aging housing built in the 1950s, Hawley says.

“The roofs leak, there are problems with mold, and the electrical needs to be upgraded,” he says.

www.akbizmag.com • Alaska Business Monthly • September 2012

Challenges of Building in Western Alaska AVCP Regional Housing Authority service area contains 56 federally recognized tribes, is home to 23,000 residents, and encompasses 54,000 square miles (about the size of Illinois). The majority of residents rely on commercial fishing and subsistence hunting to live.

Construction season is planned for July through the end of September to get homes shelled-in or completed, and this must coincide with barge companies shipping schedules from Seattle delivering materials to remote locations.

In some cases, when the main barge arrives, materials must be off loaded or “lightered down” to smaller barges to traverse the smaller rivers and rivulets to a village. The winters are harsh, demanding and unforgiving. If materials are wrong, missing, lost or stolen, it will affect efficiency and cost—good planning is essential.

Materials and Methods

Foundation systems are either post and pad or steel pipe piling. Walls are eightinch prestressed foam core panels placed on a wood deck with prefabricated truss-

es spanning the width. Finish materials are metal siding and metal roofing. Heating systems in the smaller homes are Toyo stoves, windows are triple pane, and insulation value for entire building envelope yields an R50.

Cost Considerations

The average cost of construction for residential Bush construction is $200 per square foot for a single story moderate design.

The components of cost are: site control; civil engineering; foundation preparation; foundation installation; construction materials and freight charges; mobilization to site; wages for construction of the homes; per diem; transportation of personnel to remote villages; equipment rental; housing rentals for crews; fuel; demobilization and one year warranty period.

These elements of cost are multiplied by difficulty to site; terrain; weather; infrastructure requirements and available construction crews. Land is usually donated by long-term lease from the tribes and is not a cost factor.

SOURCE: AVCP Regional Housing Authority Development Department Core Staff

■ 90

“We just need to make them more comfortable—they’re substandard.”

The plan is also to retrofit the homes for running water and add basics like bathtubs.

“We don’t have indoor plumbing yet and that’s next on our list of challenges,” he says. “Maybe we’ll deal with a flush and haul system.”

Village water is drawn from the Wulik River by a three-mile surface transmission line to a 700,000 gallon raw water tank and then to a 500,000 gallon tank, where it is treated when it is pumped.

The water lasts the community only for a six-month period, and the washeteria, a community combination of flush toilets, showers and laundromat, closes to the public when the last tank is down to 12 feet. Then only the school uses the water so it can last through the end of the school year. In addition to the water designated for the school’s use, water is limited to 30 gallons a day for the public during this period.

One-seventh of the residents have tanks that provide running water for the kitchen, but homes are not fully plumbed. Residents haul their own

www.akbizmag.com • Alaska Business Monthly • September 2012

honey buckets to the landfill disposal site, according to the Alaska Division of Community and Regional Affairs.

They try to hire locals for these projects, Hawley says, but have to go out of town for skilled labor like licensed plumbers or design engineers.

“We don’t have certified craftsmen in town,” Hawley says.

Aleutian Housing Authority

Another far-flung group of 12 Tribes, represented by the Anchorage based Aleutian Housing Authority, received $2.98 million.

“We have a huge amount of work we’re doing in the region,” says Viola Yatchmeneff, director of the Aleutian Housing Authority. “We’re building rentals, housing and doing rehab. We’re doing weatherization with this funding and with state funding too.”

Organizing so many projects over such vast distances is understandably complicated.

The housing authority represents the tribes of the Aleutian and Pribilof Islands: Agdaagux Tribe of King Cove, Akutan Tribe, Atka Tribe, Belkofski Village Tribe (offices in King Cove), False Pass Tribe, Nel-

son Lagoon Tribe, Nikolski Tribe, Qagan Tayagungin Tribe of Sand Point, Qawalangin Tribe of Unalaska, Pauloff Harbor Tribe (offices in Sand Point), St. George Tribe and Unga Tribe (offices in Sand Point).

And are local workers hired for these projects? Indeed they are.

“We always advertise for positions in each community as each project gears up,” Yatchmeneff says. “We also have employees already in most communities.”

Chilkoot Indian Association Builds New Housing

The Chilkoot Indian Association is in Haines, a town of 1,806 that is 80 miles north of Juneau, between the Chilkoot and Chilkat Rivers. Its HUD allocation for this year was $179,697.

“Our Title VI loan paid to build the four-plexes and we are using our IHBG funds to pay the loan off, so indirectly IHBG funds are paying for them,” says Mary Gross, housing coordinator for the Chilkoot Indian Association.

The Title VI loan guarantee assists IHBG recipients who want to finance eligible affordable housing projects, but are unable to secure financing without

the assistance of a federal guarantee, which is a pledge by the US government to repay all or a portion of the unpaid principal balance and accrued interest if a borrower defaults under the terms of the repayment agreement.

Essentially, the Chilkoot Indian Association leverages IHBG funds to currently finance affordable housing activities by pledging future grant funds as security for repayment.

The $700,000 Title VI loan contributed to the construction of two four-unit low-income apartment complexes with a handicapped unit in each building in a new subdivision called Chilkoot Estates.

“The two four-plexes were constructed using our own local crew,” says Gross.

“We contracted out our plumbing, heating and electrical.

“We also constructed three homes in our subdivision using a combination of federal funding, and we have plans to complete the subdivision by adding a total of 20 homes and possibly an additional two apartment complexes.”

The four-plexes were completed last October, and the houses built with other HUD funding were completed in July.

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The Chilkoot Indian Association leverages HUD money to pay off loans used to build affordable housing in Haines, including fourplexes and single family homes in Chilkoot Estates, a new subdivision.

Photo by Mary Gross

Paying attention to the high costs of heating homes in Alaska, the fourplexes have a wood pellet or fuel oil (it burns either) burning boiler for more efficiency. In the summer, one boiler heats both buildings, Gross says.

The HUD funding provides not only housing but also employment for residents.

“The Chilkoot Indian Association has its own construction crew for development and rehabilitation,” Gross says.

Building in Bristol Bay

“We’re doing a combination rehab and new homes in Dillingham this year,” says Dave McClure, director of the Bristol Bay Housing Authority in Dillingham.

Since its founding in 1974, BBHA has built more than 500 safe, affordable, sin-

gle-family homes and apartments with HUD Indian Housing Block Grants, Alaska Housing Finance Corp. and the U.S. Department of Agriculture Rural Development Division. BBHA has received an annual allocation of Indian Block Housing Grants funding since 1990. This year’s allocation is $5.37 million.

Part of the HUD funding passes through to eight villages in the region for rehabilitation, but some funding is also used for utility vouchers, rental assistance for projects BBHA has built, and soft second mortgages, McClure says.

BBHA has an innovative system to ensure local hire.

The Southwest Alaska Vocational and Education Center in King Salmon partners with the state’s Workforce Development

Partnership at the Bristol Bay Campus of the University of Alaska Fairbanks in Dillingham, King Salmon and Togiak, and graduates trained workers ready to build.

With heating oil more than $7 a gallon, McClure says they pay attention to energy efficiency.

The Alaska Building Energy Efficiency Standard was established by the State of Alaska to promote the construction of energy efficient buildings by setting standards for thermal resistance, air leakage, moisture protection and ventilation.

“We adhere to BEES standards,” McClure says.

The tribes that have received this funding are grappling with monumental challenges to improve the standard of living for their members, but bit-bybit they are whittling away at the aged structures and antiquated waste disposal systems that have been a source of health hazards. With continued funding, it’s a sure thing they’ll succeed.  Long-time Alaska photojournalist Dimitra Lavrakas headed to the East Coast this fall.

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■ 92

www.akbizmag.com • Alaska Business Monthly • September 2012

U.S. Department of Housing and Urban Development 2012 Indian Housing Block Grants of $67,449,435 went to the following for affordable housing activities:

Akiachak Native Community, Akiachak Aleutian Housing Authority, Anchorage Arctic Village, Arctic Village Asa’carsarmiut Tribal Council, Mountain Village AVCP Regional Housing Authority, Bethel Baranof Island Housing Authority, Sitka Bristol Bay Housing Authority, Dillingham Chalkyitsik Village, Chalkyitsik Chickaloon Native Village, Chickaloon Chilkoot Indian Association, Haines Cook Inlet Housing Authority, Anchorage Copper River Basion Regional HA, Glennallen Egegik Village, Egegik Emmonak Village, Emmonak Hoonah Indian Association, Hoonah Hydaburg Cooperative Association, Hydaburg Kenaitze Salamatof TDHE, Kenai Ketchikan Indian Corp., Ketchikan Knik Tribe, Wasilla Kodiak Island Housing Authority, Kodiak Lime Village, McGrath Native Village of Eklutna, Chugiak Native Village of Eyak, Cordova

$481,439 $50,399 $261,149 $1,143,415 $94,702 $418,715 $152,303 $244,643 $126,641 $374,088 $355,713 $786,229 $175,606 $2,854,987 $4,774,257 $205,054 $1,823,146 $50,399 $307,602 $64,686 $403,874 $99,050 $151,442

Native Village of Fort Yukon, Fort Yukon Native Village of Karluk, Karluk Native Village of Kivalina, Kivalina Native Village of Kotzebue, Kotzebue Native Village of Ouzinkie, Ouzinkie Native Village of Selawik, Selawik Native Village of Tanacross, Tanacross Native Village of Tanana, Tanana Native Village of Tyonek, Tyonek Native Village of Unalakleet, Unalakleet Ninilchik Village Traditional Council, Ninilchik Nome Eskimo Community, Nome Nondalton Village, Nondalton North Pacific Rim Housing Authority, Anchorage Northwest Inupiat Housing Authority, Kotzebue Nulato Village, Nulato Orutsararmuit Native Village, Bethel Pedro Bay Village, Pedro Bay Pribilof Island Aleut Community of St. Paul Island Seldovia Village Tribe, Seldovia Stebbins Community Association, Stebbins Village of Sleetmute, Sleetmute Village of Venetie, Venetie

Background photo of Bethel © Dimitra Lavakas

$385,324 $2,979,113 $122,140 $317,441 $15,026,840 $1,369,095 $5,368,430 $111,182 $116,204 $179,697 $15,682,433 $2,089,641 $59,669 $347,096 $262,745 $170,793 $798,573 $975,510 $1,298,150 $4,165,319 $50,399 $50,399 $123,703

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www.akbizmag.com • Alaska Business Monthly • September 2012

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special section

Alaska Native Corporation Review

Native Corporations

‘Pass the Torch’ Rising leaders of the new generation

BY MARY LOCHNER

F

orty years after regional and village Native corporations were created by the Alaska Native Claims Settlement Act in 1971, the mantle of leadership in those corporations is being passed on to the next generation.

“You see it within the regional corporation structure, this passing of the torch,” says Bristol Bay Native Corp. president and chief executive officer Jason Metrokin. “At the village level there has now become a passing of the torch, but the pool of ready-made recipients is not as great as it could be.”

Metrokin, who was hired on to the corporation’s top leadership position in 2009, replaced retired president and CEO Hjalmar Olson, who had led the

and CEO. “You don’t know until you put a person in that leadership position; there’s always a risk. And somebody was willing to give me that chance. I think we need to do more of that.”

Leading a New Generation

As the next generation of Alaska Native leaders steps into their role at regional and village corporations, the shareholders they serve are increasingly comprised of the next generation as well. Sophie Minich, who will become Cook Inlet Region Inc. president and CEO in January 2013, says the number of shareholders in the regional corporation has grown considerably in the last 40 years.

“I was this young punk a few years ago and somebody said, ‘Hey let’s give this guy a chance—he has potentially the makings of a leader.’ You don’t know until you put a person in that leadership position; there’s always a risk. And somebody was willing to give me that chance. I think we need to do more of that.”

—Jason Metrokin President and CEO, Bristol Bay Native Corp.

company in that role for roughly three decades. Metrokin was the first Alaska Native leader born after the Alaska Native Claims Settlement Act to step into the top position at a regional corporation.

“I was this young punk a few years ago and somebody said, ‘Hey let’s give this guy a chance—he has potentially the makings of a leader,’” says Metrokin, who was BBNC’s public relations director before he was president ■ 94

At CIRI’s inception, it had 6,278 shareholders, says Jim Jager, director, corporate communications. As of July of this year, that number had grown to 8,102.

He says that, while original shareholders each had 100 shares, younger shareholders who have received shares through gift or by will of shareholder relatives tend to have fewer shares.

That’s because original shareholders

often distribute shares to multiple relatives. It means that younger shareholders are likely to have 10 or 20 shares in the company rather than 100.

“Several shareholders own a small number of shares in the company. We will work hard to make those shares meaningful to them,” Minich says.

At the same time, the number of non-Native shareholders in CIRI has increased in 40 years from zero to 555.

Non-Native shareholder receive dividends the same as Native shareholders, but do not vote to elect board members at shareholder meetings, Jager says.

Shares must go to Native relatives if they are gifted during the shareholder’s life time, he says, but in a will they could be bequeathed to anyone. Some of CIRI’s shareholders are even nonprofit organizations, Minich says, because original shareholders have bequeathed shares to charities they cared about.

Originally, Alaska Native people were eligible to become shareholders in their regional and village corporations if they were born before Dec. 18, 1971.

People born after that date typically receive shares only by gift or inheritance.

The issue of whether and how to open any given corporations’ stock to the next generation is one that all Native corporations must face, Metrokin says.

“Some of the impacts to our financial wherewithal need to be considered, but ultimately our descendants of original shareholders are very important stakeholders for us,” he says. “We have taken our time to figure out the enrollment of new shareholders, but I’ve told our staff this needs to be a year where we

www.akbizmag.com • Alaska Business Monthly • September 2012

Rising.Native.Leaders Sophie Minich

Thom Leonard

Future President and CEO, Cook Inlet Region Inc.

Communications Manager, Calista Corp.

“Getting the next generation to be part of the company, and understand what the company does, and have some ownership in the company will be challenging.”

An elder relative of Minich’s encouraged her to apply to Sophie Minich CIRI, and in 1993 she joined Photo courtesy of CIRI the corporation as an accountant. She moved up through different positions in the finance department to become its director before successfully applying to the position of vice president of administration in 1999. She later served as CIRI’s chief financial officer and then its VP of business development before becoming chief operating officer in 2007. She will start in her new position as CIRI’s president and CEO in January 2013.

Jason Metrokin President and CEO, Bristol Bay Native Corp.

“While I think that yes, (BBNC) is a success story, the challenge is being successful and not losing track of who you are as a company, who you represent, and what your values are.”

After graduating with a Jason Metrokin Bachelor of Business AdPhoto courtesy of Bristol Bay ministration from MassaNative Corp. chusetts College of Liberal Arts, Metrokin started out in a job with National Bank of Alaska that took him around the state to various rural communities. After seven years with NBA, Metrokin worked as development director of First Alaskans Institute. He was voted on to the BBNC board of directors in 2003, and then joined the corporation as a staff member in its shareholder relations department in 2005. In January 2009, Metrokin was hired as BBNC’s president and CEO, replacing longtime president and CEO Hjalmar Olson.

“I’ve paid specific emphasis to maintaining and building our social media presence on Facebook and Twitter, and been able to build up the connections we have—basically doubled the number of people that Thom Leonard we are in constant contact Photo courtesy of Calista Corp. with that way.”

After graduating with a Bachelor of Arts from Gonzaga University in Spokane, Wash., Leonard worked in Seattle for Nintendo for 15 years, moving up from customer service to event management, and media and public relations.

When Nintendo moved its offices to San Francisco in 2007, Leonard decided to move back to Alaska, where he was hired on as a public relations manager for Southcentral Foundation. He was hired as Calista’s communications manager in December 2010.

Connie Downing Director of Lands and Operations, The Alaska Group, Tyonek Native Corp.

“It’s important for people to understand how the (ANCSA) corporations came about, and why they’re so important. A lot of the young people don’t really know.”

Downing worked for TyoConnie Downing nek Village Council for 12 Photo courtesy of years before moving to Big Tyonek Native Corp.

Lake and eventually applying with Tyonek Native Corp. She was hired in her current position in May. Downing is currently a student at the Universty of Alaska Anchorage earning an associate degree in accounting.

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educate our shareholders on how this can be done.”

Some Alaska Native corporations, such as Doyon Ltd., have already opened enrollment to younger eligible shareholders.

Connie Downing, Tyonek Native Corp.’s new director of lands and operations, has been in her position just two months and is also a student at the University of Alaska Anchorage. She says it’s important for the younger generation of leaders and shareholders to have an understanding of the history behind ANCSA and how Alaska Native Corporations were developed.

It will be important for new Native leaders at the village and regional corporations to keep in mind the concerns of shareholders and descendants living in rural Alaska, Downing says.

“Balancing healthy lands with other business, being able to provide business opportunities for shareholders,” is important, says Downing, who grew up in the village of Tyonek. “There are a lot of shareholders who live in the village, and we need to do what we can to help them.”

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Forging into the Future

The changes ANCSA corporations have weathered in the short 40 years since their inception are extraordinary, Metrokin says.

“In 1995, (BBNC) had $100 million in revenue and one subsidiary company,” he says. “Today, in FY2012, we had almost $2 billion in revenue, with over 40 subsidiary companies. The sheer growth is significant, and to manage a business based on all its successes, to grow into a $2 billion company with as many operations as we have all over the world, is no small task.”

Minich says CIRI has also seen a great deal of change in its size and business activities.

“We’ve had tremendous growth, which has required a lot of learning of new industries and the various complexities that come with those industries and the people,” Minich says.

“We’ve changed from an investment company to an operations company. It’s been a challenge to keep up with that.”

Part of keeping pace means making sure there are enough training and education programs for shareholders,

descendants and other employees, Metrokin says.

“We need to work smarter at finding opportunities for more shareholders to be employed with BBNC,” he says.

“We need to build a better shareholder development system by increasing our investments locally in Bristol Bay and other parts of Alaska.”

Downing, another rising leader, has similar goals. “I want to build up shareholders to be able to take my position and other positions within the company,” she says.

A new step in that direction is a firstever training program that Tyonek Native Corp. will host this fall at its headquarters in Anchorage, in a partnership with Alaska Pacific University. The series of classes will provide training in writing and office skills, and be made available to Tyonek Native Corp. as well as staff at Tyonek Village Council via videoconference.

Downing says the corporation will invite other ANCSA corporations to participate as well, if the classes don’t fill up with Tyonek employees and shareholders.

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“Whoever hasn’t been to college before can benefit from working in a group,” Downing says.

Thom Leonard, Calista’s communications manager since December 2010, says that creating a track for young Alaska Native people to become the corporation’s workers and leaders of tomorrow is vital for steering Calista into a successful future.

“One of my strong beliefs is to support and help grow future Native leaders,” Leonard says. In particular, he says, he thinks it’s important to hire more people who are from the Calista region and speak their Native language.

“I would love to be able to train and hire my replacement who is a Native speaker,” he says.

Leonard says it’s also going to be a challenge to communicate to the wider public about how greatly Alaska Native Corporations benefit those shareholders and descendants, in the midst of recent attacks against ANC’s 8(a) status.

“One of the biggest challenges Alaska Native Corporations are going to face is the unnecessary attacks on the 8(a) program,” he says. “The various contracts that not only Calista but the other regional and village corporations provide, those profits go back into and affect the lives of Alaska Natives all across the state.”

Minich says maintaining CIRI’s growth while also continuing to provide services under its nonprofit agencies will be a major challenge going into the future. CIRI started numerous nonprofit agencies, such as Cook Inlet Housing, Southcentral Foundation and Cook Inlet Tribal Council, which provide services to all Alaska Natives and some non-Natives as well, Jager says.

“At the end of the day, we’re always going to be an Alaska Native Corporation,” Metrokin says. “We can use conventional wisdom to support our business decisions, which we very much do. But we also keep in mind that uniqueness of being an Alaska Native Corporation. We’ll never lose sight of that.”  Mary Lochner is a journalist living in Eagle River.

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special section

Alaska Native Corporation Review

From Timber to Tourism Hoonah evolves to meet its economic needs

H

STORY AND PHOTOS BY PAULA DOBBYN

oonah resident Floyd Peterson powers his 35-foot catamaran in the waters near Point Adolphus, a major feeding ground for whales in Southeast Alaska. Aboard his vessel are clients from Oklahoma City.

“We always get to see whales when we go out with Floyd,” says Annette Hott.

“He seems to attract them.”

As if on cue, a pod of humpbacks soon surfaces near Peterson’s boat, the Silver Spoon. To the delight of Peterson’s passengers who have been sampling smoked salmon dip, the whales perform acrobatic stunts. They do partial breaches, roll on their sides, slap their flukes and forcefully exhale saltysmelling air through their enormous blowholes.

“This is the highlight of the trip, no question,” says Shannon Wilcox, who is touring Southeast Alaska’s lush Inside Passage with her husband, Spencer, aboard the Celebrity Millennium cruise ship.

The Oklahoma visitors joined Peterson at Icy Strait Point, an Alaska Nativeowned cruise ship port developed in 2004, the first of its kind in Alaska. It’s on the outskirts of Peterson’s hometown of Hoonah, a predominately Tlingit community on Chichagof Island, about 40 air

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miles west of Juneau, Alaska’s capital. The backdrop to Hoonah, in the Alaska Panhandle, is the Tongass National Forest, a 17-million-acre temperate rain forest with old growth spruce, cedar and hemlock trees and more than 17,690 miles of salmon-bearing rivers, streams and lakes, according to the US Forest Service.

Because of its abundance, the Tongass is often called a “salmon forest.”

But it’s also home to thousands of migrating humpback whales, which attract tourists from all over the world every summer.

Plenty of Business

Although he’s seen thousands of whales over the course of his lifetime, Peterson seems as thrilled as his passengers each time one of the behemoth animals surfaces. In contrast to his four decades as a commercial fisherman and a sportfishing charter operator, Peterson’s latest career in whale watching is a lot easier and more reliable.

“The whales have to come up to breathe but the fish don’t have to bite,” he says. “This has been good for me. It’s a lot less work and everyone’s happy.”

Peterson has been offering whale watch trips for nine years. He started the company after witnessing Hoonah’s

economy—like that of much of Southeast Alaska—undergo a shift from natural resource extraction to visitor services. In recent decades, the town’s focus was heavily centered in forest products, a sector that has suffered major declines in Southeast Alaska since the mid-1990s.

As timber harvesting shrank and tourism grew, Peterson recognized an opportunity. His timing was good.

“When I started the whale watching business, I was the only one doing it.

Now there are nine or 10 different operators,” he says.

But Peterson doesn’t mind the competition. The way he sees it, there’s plenty of business to go around.

An Economic Renaissance

Peterson’s company, called FISHES (Floyd’s Icy Straits Highliner Enterprising Services), is among a slew of new tourism offerings in Hoonah. Whale watching is among the most popular attractions. But the range of excursions available to tourists continues to expand as the town builds its reputation as a unique wilderness destination.

There’s a heart-pumping zip line, billed as the world’s largest. There’s kayaking and guided sport fishing for salmon, halibut, trout, steelhead and

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other species. Van tours comb the area’s vast network of former logging roads to view bears. And with Chichagof Island hosting the world’s highest concentration of bears per square mile, sightings are virtually guaranteed.

Although Hoonah gets some independent travelers—mainly hunters and anglers—most visitors arrive aboard cruise ships. Since Hoonah’s local Native corporation transformed an old cannery and surrounding land into a cruise ship venue in 2004, more than a million tourists have descended upon Hoonah, giving the town a much-needed economic boost.

“It’s generated a renaissance in Hoonah,” says Lawrence E. Gaffaney, president and chief executive of Huna Totem Corp., the Juneau-based village corporation for Hoonah formed under the 1971 Alaska Native Claims Settlement Act. Purchased by Huna Totem in 1996, the cannery has become the focal point of Icy Strait Point’s major themes of Tlingit culture and wild salmon.

“They’ve really done an excellent job of playing off their strengths,” says Ron Peck, executive director of the Alaska Travel Industry Association.

Cannery to Cruise Destination

One hundred years ago this year, the Hoonah Packing Co. salmon cannery

Above: The Hoonah waterfront, its cold storage and part of the boat harbor.

Left: A sampling of products sold at Tlingit Rx, a store located inside Icy Strait Point’s refurbished salmon cannery.

Products contain local medicinal plants including devil’s club, spruce and cottonwood.

opened about 1.5 miles from downtown on the shores of Hoonah’s fishing grounds. Then as now, it acts as an engine for the town’s economy.

The cannery used to pack more than 2 million cans of salmon a year. It operated for four decades before closing in

1953. A century later, the refurbished cannery hosts more than 132,000 cruise passengers every summer as the hub of Icy Strait Point.

Owner Huna Totem started building Icy Strait Point in 2002 as a revenue alternative to the company’s prior focus

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on logging. It opened in 2004 with 32 cruise ships visiting that first summer.

Nearly double that number—63 ships— stopped at Icy Strait Point last summer.

The tourism industry investment marked a dramatic change for Huna Totem and the village of Hoonah.

“The market for timber collapsed.

That was the primary driver. We thought, ‘What are we going to do now?’” says Johan Dybdahl, director of special projects and community relations at Icy Strait Point.

Making a Shift

Although tourism is on the rise, fishing is still important to the Alaska Panhandle community. With easy access to Icy and Chatham Straits, Hoonah’s proximity to fish and its comparatively low moorage fees make it a coveted spot for commercial fishermen. Since 2000, Hoonah residents have harvested over 24 million pounds of fish and generated over $25 million in gross earnings, according to the Alaska Commercial Fishing Entry Commission. Over the last decade or so, an average of 58 Hoonah residents have commercially fished and collected more than $2.5 million in gross earnings each year. While the number of permits fished has declined from 106 in 2000 to 70 in 2011, Hoonah’s harbor is still abuzz during fishing season.

“I was just over there two weeks ago and it was hopping,” says Kurt Iverson, research project leader with the Alaska Commercial Fishing Limited Entry Commission, last July.

Increasingly, Southeast fishing vessels home ported elsewhere are using Hoonah as a base because of its affordable harbor rates, according to harbor master Arlen Skaflestad.

“I have a waiting list for the first time,” says Skaflestad, referring to vessels wanting slips.

Compared to fishing, Hoonah’s timber industry has been hit harder. Much of Hoonah’s economy from the late 1970s to the mid-1990s revolved around logging. But the forest products industry has contracted for nearly two decades in Southeast Alaska, and Huna Totem, which liquidatTlingit totem pole located at Icy Strait Point, ed most of its old-growth timber a cruise ship destination on Chichagof Island. by the mid-1990s, knew it had no The only Alaska Native-owned cruise ship choice but to seek new growth port in the state, it has attracted more than 1 million visitors since opening in 2004. opportunities, says Dybdahl.

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With cruise ship tourism starting to explode in Southeast Alaska in the 1990s, Huna Totem decided to capitalize on growth in the visitor industry.

“It was a conscious decision to do something consistent with our mission to be a for-profit corporation and to also benefit our shareholders,” says Gaffaney.

An Economic Engine

Huna Totem has invested $31 million to date in Icy Strait Point, says Gaffaney.

It’s now the town’s largest employer, providing 28 percent of jobs in Hoonah during peak tourism season and 31 percent of private sector payroll, according to Gaffaney.

According to Huna Totem’s 2011 annual report, 135 shareholders worked at Icy Strait Point, generating $2 million in earnings and $776,230 in cash flow for the company.

In 2009, Icy Strait Point paid $327,000 in sales tax to the city, providing about 60 percent of all sales tax revenues collected.

Huna Totem is particularly proud that most of the workers at its cruise ship port are shareholders.

“More than 85 percent Native hire and 90 percent local hire has been maintained since construction of Icy Strait Point began,” says Gaffaney.

Alaska’s Wildest Kitchen

Outfitted with restaurants serving fresh salmon, Dungeness crab and halibut, along with locally made micro-brewed beer, the cannery features retail shops offering Alaska Native-themed products, everything from Huna Tlingit handbags to devil’s club lip balm. A cultural performance hall, a museum, a culinary instruction space called Alaska’s Wildest Kitchen, and other amenities are scattered nearby.

On an overcast afternoon in June, Dodie Lunda, a Hoonah resident and commercial fisherman, demonstrated to visitors at Alaska’s Wildest Kitchen how to fillet salmon and halibut and turn them into burgers, spreads, casseroles and grilled entrees. Lunga grew up on a dairy farm in the Midwest before migrating to Southeast Alaska to fish some 30 years ago.

As she prepares a bowl of dip made from wild Chinook salmon, Lunga discusses the importance of salmon to the Tlingit tribe. She notes the heavy reliance on seafood—salmon, in par-

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ticular—for subsistence and its cultural importance at special ceremonies.

“Whenever someone in the village passes away, we gather and have salmon salad sandwiches. I’ve probably made thousands and thousands of salmon salad sandwiches since I was adopted into the clan,” Lunda says.

After sipping wine spritzers and sampling some of Lunda’s creations, the group heads to an outdoor grill to practice cooking salmon and halibut over an alder wood fire.

Building toward the Future

Although visitor numbers peaked at Icy Strait Point in 2007 when nearly 162,000 passengers disembarked, the port still appears to be meeting its growth expectations. Passenger counts increased 7 percent in 2011 from the prior year.

And net income from Icy Strait Point totaled $974,000, up $283,000 from 2010, according to the annual report.

Many local entrepreneurs, along with city officials and Icy Strait Point and Huna Totem executives, want more cruise passengers to visit Hoonah. The massive ships currently visit on Monday

Floyd and Marjorie Peterson, owners of FISHES, a Hoonah-based tourism company that offers whale watching and wildlife tours on the north end of Chichagof Island.

and Tuesday and every other Wednesday, anchoring offshore and bringing passengers to land by lightering vessels.

The construction of a cruise ship dock would allow the town to continue to expand as a tourist destination. In 2011, the Alaska Legislature approved a $17

million grant for such a project.

“The objective is to get the dock built in 2014,” Gaffaney says.  Freelance journalist Paula Dobbyn lives in Anchorage.

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special section

Alaska Native Corporation Review

Mining on Native Lands

Photo by Larry Harris

The Upper Kobuk Mineral Project Bornite Exploration Camp on NANA Regional Corporation Inc. land about 12 miles north of Kobuk.

Balancing resource development with ancient ways

BY JULIE STRICKER

F

or thousands of years, the Inupiat people of northwest Alaska have thrived in the cold, remote region by coming up with innovative ways to answer challenges. In the past few decades, they faced another challenge, one that was brought by the discovery of world-class deposits of zinc, copper and lead, as well as gold and silver on their lands. Would it be possible to balance an ancient way of life with modern mining techniques?

That’s a question NANA Regional Corp. leaders wrestled with 30 years ago. Jobs were scarce and costs high, but mining companies were very interested in the enormous mineral wealth on NANA’s lands, which include one of the richest zinc deposits in the world at Red Dog Creek.

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In the end, NANA leaders decided Red Dog was an integral part of their future and that it could be developed in a way that would create sustainable communities and economic opportunity while protecting shareholders’ subsistence way of life.

NANA signed an agreement with Teck Alaska and Red Dog Mine went online in 1989. In the past 23 years, it has become the basis for the region’s economy. It is a balancing act that requires both partners to work closely together to achieve their goals while keeping their values intact.

Red Dog Today

Today, Red Dog is to the NANA region what Prudhoe Bay is to Alaska, according to Dr. Lance Miller, vice president of natural resources for NANA Regional Corp.

“Mining is part of the culture, balanced with subsistence,” Miller said.

Red Dog provides significant local jobs.

It is the sole “taxpayer” for the Northwest Arctic Borough, providing $8.9 million payment in lieu of taxes in 2011, Miller said. The State of Alaska receives mining taxes and the Alaska Industrial Development and Economic Development Association collects fees for the road that connects Red Dog with the coast.

The state’s regional and village corporations also benefit under the Alaska Native Claims Settlement Act’s 7(i) revenue-sharing clause. About 65 percent of NANA’s net revenue from Red Dog is distributed to the other corporations, which came to $82 million in fiscal year 2011. NANA itself received $169.9

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Donlin Gold

In Southwest Alaska, one of the largest known undeveloped gold deposits in the world has the potential to transform a region much as Red Dog has in northwest Alaska. Exploration in the past 15 years has uncovered more than 33 million ounces of gold in the Donlin Creek area.

The surface land is owned by The Kuskokwim Corp., a consortium of 10 villages. The subsurface belongs to Calista Corp., a regional Native corporation that encompasses 56 villages in the Yukon-Kuskokwim region.

Donlin Gold, a partnership between NovaGold and Barrick Gold, decided in July to begin the permitting phase of

Photo by Thom Leonard/Calista Corp.

million in net proceeds from Red Dog. Shareholders benefit from dividends, scholarships and training programs, social and cultural programs and projects to boost energy efficiency in the region.

The goal of resource development is to provide jobs and opportunities for residents of northwest Alaska so that they can remain in the region and help sustain their culture, said Shelly Wozniak, communications manager for NANA Regional. NANA has more than 13,000 shareholders, more than 7,500 of whom live in northwest Alaska. More than half of Red Dog’s workers are NANA shareholders.

“It shows the significance of responsible mineral development to the region,” Wozniak said.

One such success story is Jason Rutman. Rutman’s family is from Noorvik and he grew up in the NANA region, graduating from a four-year development program in environmental management. He worked at Red Dog and later became the first NANA shareholder to be transferred to a different Teck project, the Pogo Gold Mine northeast of Delta Junction. He worked as an environmental manager for various entities and is now the liaison between NANA and NovaCopper, which is exploring mineral deposits in another part of the NANA region.

“Red Dog was my stepping stone and provided the foundation for my career,” Rutman said.

Other Alaska Native Corporations, as well as indigenous peoples around the world now look to NANA as a model for economic development for native peoples.

Donlin Gold exploration camp about 10 miles north of the village of Crooked Creek on land owned by the Kuskokwim Corp. (surface rights) and Calista Corp. (subsurface rights).

the mine, according to Kurt Parkan, external affairs manager for Donlin Gold.

“I know that this will have a huge impact on the Y-K region as there isn’t any other kind of industry at all,” Parkan said. “This will have a very positive impact on jobs.”

Calista supports responsible resource development and has experience orchestrating a successful drilling project that employed shareholders and descendants, Thom Leonard, communications manager for Calista, said in an email.

Calista is already working with Donlin Gold and Yuut Elitnaurviat, a Bethelbased public-private consortium that provides vocational training, to plan for workforce development needs.

“The potential impact of the project at Donlin Creek is massive,” Leonard said. “The opportunity for year-round, full-time employment is rare in one of the most economically challenged areas of the country, and thousands of families would benefit from steady income. The income provided would help families pay the highest energy and fuel costs in the nation. And with the nearest supermarket hundreds of miles away the families will be able to better afford the fuel needed to continue a subsistence lifestyle.”

Donlin Gold has a hiring preference for shareholders and local residents.

“We’ve made a commitment to our landowners to hire locally,” Parkan said. “We’ve got a really good record

over the past 17 years. Over 90 percent of our camp workers were local hires.”

In the remote area, with virtually no roads or other infrastructure, Donlin Gold must generate its own electricity.

It plans to build a 312-mile pipeline to connect to natural gas lines at Beluga, on Cook Inlet, Parkan said. The pipeline will be buried and only temporary roads will be built during its construction. The natural gas will power a 150157 megawatt plant.

Natural gas will provide the mine with more economic power and means that 80 million gallons of diesel will not have to be transported up local rivers to the mine site, which had been a source of concern for local residents. Natural gas is also cleaner burning than diesel.

Whether residents can benefit from piped-in natural gas is unknown, Parkan said, but any energy project would have to come from a third party.

Consultation Key to Development

Decisions such as piping in natural gas instead of shipping diesel fuel come from close consultation with local leadership, residents and the corporations and are key to development efforts.

“All NANA projects require a great deal of consultation before any dirt is moved,” said NANA’s Wozniak.

The shareholders themselves support resource development, Wozniak

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Photo by Larry Harris

Exploration geologist Evan Twelker showing off core during an Institutional Investor tour of the Upper Kobuk site.

said. NANA conducted surveys in 2009 and 2011 and more than 90 percent of shareholders said they supported mineral development and road construction. The main ore pit at Red Dog was mined out in 2010 and operations shifted to the Aqqaluk deposit, which is expected to operate through 2031. Now, with more than two decades of mining experience under its belt, NANA is looking beyond Red Dog to mineral deposits in the eastern part of its region.

“NANA has taken what it’s learned over the last 23 years,” Rutman said.

“Taking that knowledge and experience and applying it at all levels.”

In 2011, NANA’s board of directors approved a resolution to form a partnership with NovaGold Resources to look into potential mineral resources in the upper Kobuk River region.

Upper Kobuk

Called the Upper Kobuk Mineral Project, NANA and a new company called NovaCopper are exploring a 70-mile belt of volcanogenic massive sulfide deposits containing mostly copper, zinc and lead.

It is considered to be one of the most significant deposits in the world, with very high grades of ore, from 4 percent to 12 percent copper in some areas. The project is near three villages, Kobuk, Shungnak and Ambler and is about 250 miles ■ 104

northwest of Fairbanks.

“It’s the second big year for us,” Rutman said. “Last year was a pivotal year as far as drilling.” UKMP has four drills going this summer and is spending roughly twice as much money on exploration as it did in 2011. About half the workers are NANA shareholders.

NovaCopper may be new, but its president and chief executive officer Rick Van Nieuwenhuyse has extensive experience working with both NANA and Calista. He formed NovaGold in the late 1990s and focused on exploration in the Donlin Creek area. With that project entering permitting, he turned his focus to northwest Alaska, spinning off NovaCopper to spearhead exploration of the Upper Kobuk Mineral Project.

“Both (corporations) have been an integral part of the process,” he said. While NovaGold and NovaCopper work closely in cooperation with the Native corporations, the relationships are different.

At Donlin Creek, about 300 miles west of Anchorage, Calista owns the subsurface and The Kuskokwim Corp. owns the surface rights. Barrick Gold and NovaGold are operating the mine and paying royalties, a similar relationship to the one NANA has with Teck Alaska.

In the Upper Kobuk region, it’s more of a partnership with NANA, Van Nieuwenhuyse said. NANA owns the

land at Bornite and NovaCopper is the landowner for the Arctic Deposit and several other parcels in the region. Both sets of claims are being worked under a joint arrangement, he said.

“It’s a ‘one plus one equals three’ story,” he said.

Outreach to the three villages closest to the exploration sites is an important part of NovaCopper’s business plan.

“We’re constantly letting them know what we’re doing,” he said.

NovaCopper is always looking for opportunities to hire locally and provide training, which provides more local expertise, in turn helping both the residents and the exploration projects, Van Nieuwenhuyse said.

For instance, with the increase in people working at the UKMP this summer, NovaCopper needed another emergency medical technician. They identified a resident who had partial certification and provided the rest of the training so both the project and the region benefit long-term, he said.

NANA’s Miller emphasized that UKMP is a long-term project. “No mine is going to be built tomorrow; there’s no economic mine at this present time,” Miller said.

It can take decades and $100 million to $150 million in exploration and feasibility work before a successful mine plan can be drawn up, he said. Two other major components, transportation and energy, also must be taken into account.

“Sort of the missing link in Alaska is there isn’t a lot of infrastructure,” Van Nieuwenhuyse said. Alaska Gov. Sean Parnell has proposed several “Roads to Resources” that would link areas of high petroleum or mineral potential to the road system. One of those roads would link the Ambler mining region with the Dalton Highway. Parnell included $4 million in his 2013 budget proposal for the project.

With a road, any future mine would have access to diesel and trucked-in natural gas that could help reduce energy costs in the region, he said. NovaCopper is also looking at the potential for hydropowered electricity via the Ambler River.

“Every little bit helps,” he said. “Right now, at $11 a gallon, gas, diesel and milk all cost about the same.”  Julie Stricker is a writer living near Fairbanks.

www.akbizmag.com • Alaska Business Monthly • September 2012

Alaska Native Corporation Review Editor’s Note

What makes an Arctic community sustainable? In a few months a conference will be convened in Anchorage to start a dialogue to determine just that. Proponents of the conference include Irene Rowan; Nichola Ruedy, Alaska Native Village CEO Association; Jimmy Stotts, Inuit Circumpolar Council; Dalee Sambo Dorough, University of Alaska Anchorage Department of Political Science; Willy Templeton, UAA Native Student Services; and Lynda Hadley. It is planned for early March 2013.

Panel discussions will outline the issues and set the stage for breakaway meetings for participants to present ways to develop sustainable Arctic communities. Alaska Natives will look at what’s going on, what’s working, and what’s needed

special section

in terms of food security issues, physical and mental wellbeing, sustainable and equitable development, and energy and infrastructure. This is not just another conference, it is gravely important for the future of Alaska Native peoples and the Inuit of the circumpolar region. What sets this conference apart from all the other Polar meetings taking place these days is the indigenous standpoint—Alaska Native people determining, for their selves, what constitutes a sustainable Arctic community.

Preliminary details of the conference follow, courtesy of the proponents. Some changes may occur as more people become involved and final preparations get under way. What won’t change is the importance and urgency.

—Susan Harrington, Managing Editor

Sustainable Arctic Communities A Working Conference by and for Alaska Native Peoples

A

s the world’s attention is increasingly focused on the Arctic for its energy resources, international and strategic value as well as the world’s climate change research laboratory, many continue to dismiss, ignore or overlook the status, rights and conditions of Arctic Indigenous peoples.

In this regard, the world community, consistent with the human rights standards embraced by the United Nations Declaration on the Rights of Indigenous Peoples, must recognize and respect the fact that Alaska Native peoples are poised to play a critical leadership role in the future of Arctic policy. However, in order for Alaska Native peoples to make the most of this central role, more must be done to ensure the sustainability of Arctic communities.

The dramatic changes occurring in the Arctic and sub-Arctic regions have drawn increasing attention from the scientific, military, environmental and economic interests. To date, a wealth of governmental and non-governmental institutions and organizations are undertaking related activities. However, no single indigenous-specific gathering has been undertaken outside of the General Assembly gatherings of the Inuit Circumpolar Council. In this regard, a number of Alaska Native representatives have been discussing the

need to bring a diverse range of individuals together to substantively address how Arctic Indigenous peoples can effectively create Sustainable Arctic Communities. Essentially, we are interested in defining, by and for ourselves, the key challenges to ensuring the distinct economic, social, and cultural integrity of communities and specific responses to overcome such challenges.

Conference Focus

To begin this dialogue a working conference that brings key individuals together to focus upon the areas of food security; health; economic development; and energy within Northern communities is planned. Indigenous and non-Indigenous individuals directly engaged in and concerned about Arctic issues as well as those that have developed cutting edge or innovative and creative ways will be invited to address these matters. At this initial stage, primary emphasis will be to identify individuals within rural Alaska Native communities striving to address the concerns of: ■ Maintaining traditional economies of hunting, fishing, trapping, bartering, and other harvesting rights yet balancing them with outside economic forces to ensure food security

■ Utilizing effective ways and means to address the mental and physical wellbeing of Arctic Indigenous peoples ■ Pursuing development that is equitable and sustainable as well as consistent with the customs, practices and institutions of Alaska Native peoples ■ Providing cost-effective, innovative, and environmentally friendly alternatives for geographically remote, cold climate communities, including the related infrastructure

Key Objective

This project’s key objective is to provide a focal point for Indigenous dialogue centered upon the wide variety of Arctic issues and efforts, in both the public and private sector. The project is anticipated to occur in two distinct phases.

The first phase would involve convening an Alaska-specific gathering hosted at the University of Alaska Anchorage with participation from approximately 100-125 individuals from the North Slope, Northwest Arctic, Bering Straits region, and the Lower Yukon Delta communities.

The second phase would involve a broader international discussion on these topics as well as additional specific areas of concern or innovation identified by the first phase participants. 

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2012 Alaska Native Regional Corporations Directory

SUBSIDIARIES

Ahtna Inc. Bob Sandt, CEO PO Box 649 Glennallen, AK 99588 Phone 907-822-3476 Fax 907-822-3495 ituimalealiifano@ahtna.net www.ahtna-inc.com Acres 1,528,000 Shareholders 1,740 Alaska Employees 377 Worldwide Employees 1,929 2011 Gross Revenue $200,000,000 2010 Gross Revenue $243,000,000

■ Ahtna Engineering Services LLC ■ Ahtna Development Corp.

■ Ahtna Facility Services Inc. ■ Ahtna Enterprises Corp.

■ Ahtna Contractors LLC ■ Koht’aene Enterprises Co. LLC ■ Ahtna Support & Training Services LLC ■ Ahtna Technical Services Inc. ■ Ahtna Government Services Corp.

■ Ahtna Construction & Primary Product ■ Ahtna Design Build Inc. ■ Ahtna Professional Services Inc. ■ Ahtna Environmental Inc. ■ Ahtna Technologies Inc. ■ Ahtna Logistics Inc.

2011 REVENUE SOURCES Not disclosed AHTNA Inc.

Aleut Corp.

David Gillespie, CEO 4000 Old Seward Hwy., Suite 300 Anchorage, AK 99503 Phone 907-561-4300 Fax 907-563-4328 info@aleutcorp.com www.aleutcorp.com Acres 66,000 acres surface lands and 1.572 million acres of subsurface estate.

Shareholders 3,759 Alaska Employees 125 Worldwide Employees 450 2011 Gross Revenue $143,046,000 2010 Gross Revenue $159,416,000

2011 REVENUE SOURCES ■ Operations and Maintenance Contracts $110,249,000 ■ Fuel Sales $10,860,000

■ 106

■ Industrial Products and Services $10,017,000 ■ Rental Properties $4,922,000 ■ Natural Resource $4,503,000 ■ Permanent Fund Earnings $858,000 ■ Gravel Sales $392,000 ■ Investment income $862,000 ■ Water Utility $148,000 ■ Other $235,000

SUBSIDIARIES ■ Aleut Enterprises LLC ■ Aleut Management Services ■ Aleut Real Estate LLC ■ Alaska Instrument LLC ■ C&H Testing LLC ■ Patrick Mechanical ■ Analytica Group

Aleut Corp.

www.akbizmag.com • Alaska Business Monthly • September 2012

2012 Alaska Native Regional Corporations Directory

2011 REVENUE SOURCES ■ Petroleum Refining and Marketing 33% ■ Government Technical Services 32% ■ Energy Services 28% ■ Construction 6% ■ Other 1% Arctic Slope Regional Corp.

Rex A. Rock Sr., Pres./CEO PO Box 129 Barrow, AK 99723 Phone 907-852-8633 Fax 907-852-5733 www.asrc.com Acres Subsurface 4.7 million; surface 4.1 million Shareholders 11,000 Alaska Employees 4,380 Worldwide Employees 10,630 2011 Gross Revenue $2,549,993,000 2010 Gross Revenue $2,331,681,000

SUBSIDIARIES ■ ASRC Energy Services Inc. ■ ASRC Federal Holding Company LLC ■ ASRC Construction Holding Company ■ SKW/Eskimos Inc. ■ Tundra Tours Inc. ■ Petro Star Inc. ■ Alaska Growth Capital

Arctic Slope Regional Corp.

SUBSIDIARIES Bering Straits Native Corp.

Bering Straits Native Corp.

Gail Schubert, Pres./CEO 4600 Debarr Rd. Suite, 200 Anchorage, AK 99508 Phone 907-563-3788 Fax 907-563-2742 info@beringstraits.com www.beringstraits.com Acres 2.1 million Shareholders 6,333 Alaska Employees 387 Worldwide Employees 997 2011 Gross Revenue $206,000,000 2010 Gross Revenue $190,336,771

■ Inuit Services Inc. ■ Bering Straits Aerospace Services LLC ■ Bering Straits Logistics Services LLC ■ Sound Quarry Inc. ■ Eagle Electric LLC ■ Bering Straits Information Technologies LLC ■ Bering Straits Technical Services LLC ■ Bering Straits Aki LLC ■ Eagle Eye Electric LLC ■ Ayak LLC ■ Global Support Services LLC ■ Global Management Services LLC ■ Iyabak LLC ■ Global Asset Technology LLC ■ Global Management Services LLC ■ Global Percision Systems LLC

2011 REVENUE SOURCES ■ Investment Income ■ Government Contracting ■ Construction ■ Information Technology/Communications ■ Facilities Support and Maintenance ■ Property Management ■ Aerospace Support Services ■ 108

Bering Straits Native Corp.

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2012 Alaska Native Regional Corporations Directory

SUBSIDIARIES Bristol Bay Native Corp.

Jason Metrokin, Pres./CEO 111 W. 16th Ave., Suite 400 Anchorage, AK 99501 Phone 907-278-3602 Fax 907-276-3924 facebook.com/BristolBayNativeCorporation www.bbnc.net Acres 3 million Shareholders 9,100 Alaska Employees 375 Worldwide Employees 3,855 2011 Gross Revenue $1,965,507,000 2010 Gross Revenue $1,667,200,000

2011 REVENUE SOURCES ■ Petroleum Distribution ■ Construction ■ Government Services ■ Oilfield and Industrial Services ■ Portfolio of Public and Private Passive Investments ■ Natural Resource Management

■ Badger Technical Services ■ Bristol Bay Corporate Services ■ Bristol Construction Services ■ Bristol Design Build Services ■ Bristol Engineering Services Corp.

■ Bristol Environmental Remediation Services ■ Bristol Fuel Systems ■ Bristol General Contractors ■ Bristol Industries ■ Bristol Munitions Services ■ Business Resource Solutions ■ CCI Group ■ CCI Inc. ■ CCI Solutions ■ Eagle Applied Sciences ■ Glacier Technical Solutions ■ Glacier Technologies ■ MedPro Technologies ■ KAM Resources Group

■ PetroCard Inc. ■ SES Construction and Fuel Services ■ SpecPro Environmental Services ■ SpecPro Inc. ■ SpecPro Technical Services ■ STS Systems Integration ■ TekPro Services ■ Vista International Operations ■ Vista Technical Services ■ Aerostar SES LLC ■ Bristol Earth Sciences LLC ■ CCI Industrial Services LLC ■ CCI Energy and Construction Services LLC ■ Eagle Medical Services LLC ■ Kakivik Asset Management LLC ■ Bristol Resources ■ SES Design/Build

Bristol Bay Native Corp.

■ Camp Services and Catering ■ Communications ■ Calista Region Resources Calista Corp.

Andrew Guy, Pres./CEO 301 Calista Ct., Suite A Anchorage, AK 99518-3028 Phone 907-279-5516 Fax 907-272-5060 calista@calistacorp.com www.calistacorp.com Acres 6.5 million Shareholders 12,600 Alaska Employees 272 Worldwide Employees 1,351 2011 Gross Revenue $300,498,000 2010 Gross Revenue $230,574,000

2011 REVENUE SOURCES ■ Contracting and Professional Services ■ Construction Services ■ Environmental Services ■ Marine Services ■ Rental and Property Management ■ Marketing/PR Agency

SUBSIDIARIES ■ Yulista Holding LLC ■ Yulista Aviation Inc. ■ Yulista Management Services Inc. ■ Y-Tech Services Inc. ■ Chiulista Services Inc. ■ Brice Inc. ■ Tunista Inc. ■ Tunista Pacific Rim LLC ■ Tunista Construction LLC ■ Tunista Services LLC ■ Yukon Equipment Inc. ■ Futaris (Alaska Telecom Inc.) ■ Calista Heritage Foundation ■ Calista Real Estate ■ Solstice Advertising ■ Sequestered Solutions ■ Brice Construction ■ Brice Marine

■ Brice Equipment ■ Brice Environmental ■ Camai Printing ■ Calista Heritage Foundation ■ Tunista Services LLC ■ Tunista Construction LLC ■ Tunista Pacific Rim ■ Yulista Management Services Inc. ■ Yulista Aviation Inc. ■ Y-Tech Services Inc. ■ Chiulista Services Inc. ■ Calista Real Estate ■ Yukon Equipment Inc.

Calista Corp.

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109 ■

2012 Alaska Native Regional Corporations Directory

SUBSIDIARIES

Chugach Alaska Corp.

Sheri Buretta, Chairman 3800 Centerpoint Dr. Anchorage, AK 99503 Phone 907-563-8866 Fax 907-563-8402 bwelty@chugach-ak.com www.chugach-ak.com Acres 10 million in Southcentral, entitled to 928,000 acres of which approximately 378,000 are full fee entitlement Shareholders 2,100 Alaska Employees 671 Worldwide Employees 5,393 2011 Gross Revenue $765,805,249 2010 Gross Revenue $936,975,000

2011 REVENUE SOURCES Not disclosed

Cook Inlet Region Inc. Margaret Brown, Pres./CEO PO Box 93330 Anchorage, AK 99509-3330 Phone 907-274-8638 Fax 907-263-5183 info@ciri.com www.ciri.com Acres 600,000 acres of surface land in Alaska, Hawaii and the Lower 48; 1.3 million acres of subsurface rights Shareholders 7,545 Alaska Employees 80 Worldwide Employees 80 2011 Gross Revenue $200,800,000 2010 Gross Revenue $188,300,000

■ Chugach Alaska Services Inc. ■ Chugach Federal Solutions Inc. ■ Chugach Government Services Inc. ■ Chugach Industries Inc. ■ Chugach Information Technology Inc. ■ Chugach McKinley Inc. ■ Chugach Management Services Inc. ■ Chugach Support Services Inc. ■ Chugach World Services Inc. ■ Defense Base Services Inc. ■ Falcon International Inc. ■ Wolf Creek Fabrication Services Inc. ■ Chugach Education Services Inc.

Chugach Alaska Corp.

■ Oilfield and Heavy Construction Services ■ Energy and Resource Development Tourism and Hospitality ■ Space and Missile Defense ■ Communications & Information Technology ■ Private Equity & Venture Capital Investments

SUBSIDIARIES ■ Alaska Interstate Construction LLC ■ ANC Research & Development LLC (ANC R&D) ■ CIRI Alaska Tourism Corp. (CATC) ■ CIRI Land Development Co. (CLDC) ■ North Wind Group ■ Fire Island Wind LLC ■ Stone Horn Ridge LLC ■ Pacific Tower Properties Inc. ■ Cruz Energy Services LLC ■ Cruz Marine LLC ■ Weldin Construction LLC ■ North Wind Services

2011 REVENUE SOURCES ■ Traditional and Renewable Energy and Resource Development ■ Real Estate Investment and Management ■ Environmental Remediation Services ■ 110

Cook Inlet Region Inc.

www.akbizmag.com • Alaska Business Monthly • September 2012

2012 Alaska Native Regional Corporations Directory

2011 REVENUE SOURCES

Doyon Limited Aaron Schutt, Pres./CEO 1 Doyon Pl., Suite 300 Fairbanks, AK 99701 Phone 907-459-2000 Fax 907-459-2060 info@doyon.com www.doyon.com Acres 12.5 million acres land entitlement Shareholders 18,566 Alaska Employees 1,781 Worldwide Employees 2,818 2011 Gross Revenue $468,400,000 2010 Gross Revenue $458,600,000

■ Oil Field Services ■ Security ■ Construction ■ Engineering ■ Utility Services ■ Tourism

SUBSIDIARIES ■ Doyon Transitional Inc. ■ Doyon Oil Field Services Inc. ■ Doyon Government Contracting Inc. ■ Doyon Natural Resources Development Corp.

Doyon Ltd.

■ Lease Income $2,969,000 ■ Natural Resources Revenue $4,716,000 ■ Other $748,000 Koniag Inc. William Anderson Jr. , Pres./CEO 194 Alimaq Dr. Kodiak, AK 99615 Phone 907-486-2530 Fax 907-486-3325 www.facebook.com/KoniagInc www.koniag.com Acres 935,351 Shareholders 3,908 Alaska Employees 73 Worldwide Employees 493 2011 Gross Revenue $131,052,000 2010 Gross Revenue $149,550,000

2011 REVENUE SOURCES ■ Contract and Sales Revenue $118,677,000 ■ Equity in Earnings of Affiliates $650,000 ■ Gain on Interest in Affiliate $1,062,000 ■ Gain on Disposal of Asset $5,000 ■ Interest Income $66,000 ■ Investment Income $2,159,000

SUBSIDIARIES ■ Angeles Composite Technologies Inc. ■ Angayak Construction Enterprise Inc. ■ Clarus Technologies LLC ■ Ditigized Schematic Solutions LLC ■ Frontier Systems Integrator LLC ■ Koniag Development Corp.

■ Koniag Services Inc. ■ Professional Computing Resources Inc. ■ XMCO Inc. ■ Clarus Environmental Services LLC ■ Clarus Fluid Intelligence LLC ■ Dowland-Bach Corp.

■ Koniag Technology Solutions LLC ■ Koniag Technical Services LLC ■ PacArctic Logistics LLC ■ Open Systems Technologies Inc. ■ Koniag Information Security Services LLC ■ Granite Cover Quarry LLC ■ Karluk River Cabins ■ Kodiak Brown Bear Center ■ Karluk Wilderness Adventures ■ LUGO-KDC ■ Washington Management Group

www.akbizmag.com • Alaska Business Monthly • September 2012

Koniag Inc.

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2012 Alaska Native Regional Corporations Directory

SUBSIDIARIES NANA Development Corporation

NANA Regional Corporation Inc. Marie N. Greene, Pres./CEO PO Box 49 Kotzebue, AK 99503 Phone 907-442-3301 Fax 907-442-4161 news@nana.com www.nana.com/regional www.facebook.com/nanaregionalcorporation Acres 2.2 million Shareholders 13,086 Alaska Employees 4,734 Worldwide Employees 13,453 2011 Gross Revenue $1,800,000,000 2010 Gross Revenue $1,600,000,000

■ Akima Construction Services LLC ■ Akima Facilities Management LLC ■ Akima Infrastructure Services LLC ■ Akima Intra-Data LLC ■ Akima Logistics Services LLC ■ Akima Management Services Inc. ■ Akmaaq LLC ■ Cazador LLC ■ DOWL HKM ■ Five Rivers Services LLC ■ Ikun LLC ■ Ki LLC ■ Kisaq LLC ■ Nakuuruq Solutions LLC ■ NANA Construction LLC ■ NANA/Lynden Logistics LLC ■ NANA Oilfield Services Inc. ■ NANA Pacific LLC ■ NANA Services LLC ■ NANA WorleyParsons LLC

■ NMS ■ Paa River Construction LLC ■ Portico Services LLC ■ Qivliq LLC ■ SAVA LLC ■ Sivuniq Inc. ■ Synteras LLC ■ TKC Global Solutions LLC ■ Affigent LLC ■ Truestone LLC ■ WHPacific Inc. ■ Wolverine Services LLC ■ Pegasus Aviation Services LLC ■ Qivliq Commercial Group ■ Piksik LLC ■ Tuuq Drilling LLC ■ GIS Oilfield Contractors ■ Akima Technical Solutions LLC ■ Akima Global Services LLC ■ NIQI LLC

NANA Regional Corp.

2011 REVENUE SOURCES Not disclosed

■ Gaming ■ Corporate ■ Other

SUBSIDIARIES Sealaska Chris McNeil, Pres./CEO One Sealaska Plaza, Suite 400 Juneau, AK 99801-1276 Phone 907-586-1512 Fax 907-463-3897 webmaster@sealaska.com www.sealaska.com Acres 290,000 Shareholders 21,300 Alaska Employees 103 Worldwide Employees 1,438 2011 Gross Revenue $259,487,000 2010 Gross Revenue $223,823,000

■ Sealaska Timber Corp.

■ Synergy Systems ■ Alaska Coastal Aggregates ■ Sealaska Environmental Services ■ Nypro Kanaak Guadalajara ■ Nypro Kanaak Alabama ■ Nypro Kanaak Iowa ■ Kingston Environmental ■ Managed Business Solutions ■ Sealaska Global Logistics ■ Sealaska Constructors ■ Security Alliance ■ Haa Aani LLC

2011 REVENUE SOURCES ■ Natural Resources ■ Manufacturing ■ Investments ■ Services ■ 112

Sealaska Corp.

www.akbizmag.com • Alaska Business Monthly • September 2012

2012 Alaska Native Regional Corporations Directory

The 13th Regional Corp.

Michael Rawley, President 611 12th Ave. S., Suite 300 Seattle, WA 98044

EDITOR’S NOTE Information obtained from the State of Alaska; Department of Commerce, Community, and Economic Development; Division of Corporations, Business and Professional Licensing.

The 13th Regional Corp.

www.akbizmag.com • Alaska Business Monthly • September 2012

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special section

Alaska Native Corporation Review

VILLAGE CORPORATION LISTINGS Community

Village Corporation

Mailing Address

Phone

Website

Port Lions Anchorage Akhiok Akiachak Alakanuk South Naknek Aleknagik Susitna Platinum Scammon Bay Atmautluak Atqasuk Atka Akhiok Ayakulik Mountain Village Rampart Ivanof Bay Manley Hot Springs Beaver Egegik Belkofski Bethel Brevig Mission Saxman Anchorage Chalkyitsik Nikolski Chefornak Chevak Chickaloon

Afognak Native Corp.

Ahtna Development Corp.

Akhiok-Kaguyak Inc. Akiachak Ltd. Alakanuk Native Corp.

Alaska Peninsula Corp.

Aleknagik Natives Ltd. Alexander Creek Inc. Arviq Inc. Askinuk Corp.

Atmautluak Ltd. Atqasuk Corp.

Atxam Corp.

Ayakulik Inc. Ayakulik Inc. Azachorok Inc. Baan O Yeel Kon Corp.

Bay View Inc. Bean Ridge Corp.

Beaver Kwit’chin Corp.

Becharof Corp.

Belkofski Corp.

Bethel Native Corp.

Brevig Mission Native Corp.

Cape Fox Corp.

Caswell Native Association Chalkyitsik Native Corp.

Chaluka Corp.

Chefarnrmute Inc. Chevak Company Chickaloon-Moose Creek Native Association Inc. Chignik Lagoon Native Corp.

Chignik River Ltd. Chinuruk Inc. Chitina Native Corp.

Choggiung Ltd. Chuloonawick Corp.

Council Native Corp.

Cully Corp. Inc. Danzhit Hanlaii Corp.

Deloycheet Inc. Deloy-Ges Inc. Dineega, Corp.

Dinyea Corp.

Diomede Native Corp.

Dot Lake Native Corp.

Eklutna Inc. Ekwok Natives Ltd. Elim Native Corp.

Emmonak Corp.

Evansville Inc. Far West Inc. Gana-A’ Yoo Ltd. Goldbelt Inc. Golovin Native Corp.

Gwitchyaa Zhee Corp.

Haida Corp.

Hee-Yea-Lingde Corp.

215 Mission Rd., #212, Kodiak, AK 99615 406 W Fireweed Lane, #101, Anchorage, AK 99503 1400 W Benson Blvd., #425, Anchorage, AK 99503 PO Box 51010, Akiachak, AK 99551 PO Box 89, Alakanuk, AK 99554 2221 E Northern Lights Blvd., #119, Anchorage, AK 99508 PO Box 1630, Dillingham, AK 99576 8128 Cranberry St., Anchorage, AK 99502 PO Box 9, Platinum, AK 99651 PO Box 89, Scammon Bay, AK 99662 PO Box 6548, Atmautluak, AK 99559 PO Box 1169, Barrow, AK 99723 PO Box 47001, Atka, AK 99547 3741 Richmond, #5, Anchorage, AK 99508 3741 Richmond, #5, Anchorage, AK 99508 PO Box 32213, Mountain Village, AK 99632 PO Box 74558, Fairbanks, AK 99707 7926 Old Seward, #A-7, Anchorage, AK 99518 PO Box 82062, Fairbanks, AK 99708 PO Box 24090, Beaver, AK 99724 PO Box 220029, Anchorage, AK 99522 PO Box 46, King Cove, AK 99612 PO Box 719, Bethel, AK 99559 PO Box 85024, Brevig Mission, AK 99785 PO Box 8558, Ketchican, AK 99901 HC 89 Box 83, Willow, AK 99688 PO Box 53, Chalkyitsik, AK 99788 PO Box 104, Nikolski, AK 99638 PO Box 70, Chefornak, AK 99561 PO Box 179, Chevak, AK 99563 PO Box 875046, Wasilla, AK 99687

907-486-6014 907-868-8250 907-258-0604 907-825-4328 907-238-3117 907-274-2433 907-842-2385 907-243-5323 907-979-8113 907-558-5411 907-553-5428 907-852-8633 907-839-2237 907-279-7911 907-279-7911 907-591-2527 907-456-6259 907-345-9627 907-458-2176 907-456-1640 907-561-4777 907-497-3122 907-543-2124 907-642-4091 907-225-5163 907-345-6626 907-848-8112 907-576-2215 907-867-8115 907-858-7920 907-373-1145

afognak.com ahtna-development.com

16016 Mammoth Cir., Eagle River, AK 99577 PO Box 48008, Chignik Lake, AK 99548 PO Box 90009, Nightmute, AK 99690 PO Box 3, Chitina, AK 99566 PO Box 330, Dillingham, AK 99576 2635 Draper Dr., Anchorage, AK 99517 PO Box 1183, Nome, AK 99762 5001 Eagle St., Unit B, Anchorage, AK 99503 PO Box 71372, Fairbanks, AK 99701 PO Box 228, Holy Cross, AK 99602 PO Box 150, Anvik, AK 99558 PO Box 28, Ruby, AK 99768 PO Box 71372, Fairbanks, AK 99707 PO Box 7040, Diomede, AK 99762 3500 Wolf Run, Fairbanks, AK 99709 16515 Centerfield Dr., #201, Eagle River, AK 99577 PO Box 1189, Dillingham, AK 99576 PO Box 39010, Elim, AK 99739 PO Box 49, Emmonak, AK 99581 POBox 60670, Fairbanks, AK 99706 3150 C St., #270, Anchorage, AK 99501 6927 Old Seward Hwy., #101, Anchorage, AK 99518 3075 Vintage Blvd., #200, Juneau, AK 99801 PO Box 62099, Golovin, AK 99762 PO Box 329, Fort Yukon, AK 99740 PO Box 89, Hydaburg, AK 99922 PO Box 9, Grayling, AK 99590

907-840-2225 907-845-2212 907-647-6813 907-823-2223 907-842-5218 907-949-1234 907-443-6513 907-569-2705 907-455-8484 907-476-7177 907-663-6396 907-468-4405 907-452-5063 907-686-3221 907-347-1251 907-696-2828 907-464-3336 907-890-3741 907-949-1129 907-374-7084 907-276-2580 907-569-9599 907-790-4990 907-779-3251 907-662-2933 907-285-3721 907-453-5133

Chignik Lagoon Chignik Lake Nightmute Chitina Dillingham Chuloonawick Council Point Lay Circle Holy Cross Anvik Ruby Stevens Village Diomede Dot Lake Village Eklutna Ekwok Elim Emmonak Evansville Chignik Galena Juneau Golovin Fort Yukon Hydaburg Grayling ■ 114

www.akbizmag.com • Alaska Business Monthly • September 2012

alaskapeninsulacorp.com

bethelnativecorp.org capefoxcorp.com

chefarnrmuteinc.com chickaloon.org

chitinanative.com choggiung.com

cullycorp.com deloycheet.com

eklutnainc.com

kazwork.net ganaayoo.com goldbelt.com

haidacorp.comindex.htm

Community

Village Corporation

Mailing Address

Phone

Website

Hoonah Eagle Village Igiugig Iliamna Eek False Pass Kake Kaktovik Kasigluk Kasaan Kenai Nondalton Kotzebue King Island Klawock Klukwan Knik-Fairview Akiak Koliganek Bill Moore’s Slough Kodiak Angoon Kotlik Hughes Koyuk Kipnuk Goodnews Bay Savoonga Nuiqsut Kwethluk Kwigillingok

Huna Totem Corp.

Hungwitchin Corp.

Igiugig Native Corp.

Iliamna Natives Ltd. Iqfijouaq Company Isanotski Corp.

Kake Tribal Corp.

Kaktovik Inupiat Corp.

Kasigluk Inc. Kavilco Inc. Kenai Natives Association Inc. Kijik Corp.

Kikiktagruk Inupiat Corp.

King Island Native Corp.

Klawock Heenya Corp.

Klukwan Inc. Knikatnu Inc. Kokarmuit Corp.

Koliganek Natives Ltd. Kongnikilnomuit Yuita Corp.

Koniag Inc. Kootznoowoo Inc. Kotlik Yupik Corp.

K’oyitl’ots’ina Ltd. Koyuk Native Corp.

Kugkaktlik Ltd. Kuitsarak Inc. Kukulget Inc. Kuukpik Corp.

Kwethluk Inc. Kwik Inc.

9301 Glacier Hwy., #200, Juneau, AK 99801 PO Box 84594, Fairbanks, AK 99708 PO Box 4009, Igiugig, AK 99613 3201 C St., #406, Anchorage, AK 99606 PO Box 49, Eek, AK 99578 PO Box 9, False Pass, AK 99583 PO Box 263, Kake, AK 99830 P. O. Box 73, Kaktovik, AK 99747 PO Box 39, Kasigluk, AK 99609 PO Box KXA Kasaan, Ketchikan, AK 99950 215 Fidalgo Ave., #101, Kenai, AK 99611 1577 C St., #302, Anchorage, AK 99501 PO Box 1050, Kotzebue, AK 99752 PO Box 992, Nome, AK 99762 PO Box 129, Klawock, AK 99925 PO Box 209, Haines, AK 99827 PO Box 872130, Wasilla, AK 99687 PO Box 147, Akiak, AK 99552 PO Box 5023, Koliganek, AK 99576 PO Box 20308, Kotlik, AK 99620 194 Alimaq Dr., Kodiak, AK 99615 8585 Old Dairy Rd., #104, Juneau, AK 99801 PO Box 20207, Kotlik, AK 99620 1603 College Rd., Fairbanks, AK 99709 PO Box 53050, Koyuk, AK 99752 PO Box 36, Kipnuk, AK 99614 PO Box 150, Goodnews Bay, AK 99589 PO Box 160, Savoonga, AK 99769 801 B St., #300, Anchorage, AK 99501 PO Box 110, Kwethluk, AK 99621 PO Box 110, Kwigillingok, AK 99622

907-523-3670 907-778-2231 907-533-3211 907-571-1246 907-536-5211 907-548-2217 907-785-3221 907-640-6120 907-447-6113 907-542-2214 907-283-4851 907-561-4487 907-442-3165 907-443-5494 907-755-2270 907-766-2211 907-376-2845 907-765-7228 907-596-3440 907-899-4016 907-486-2530 907-790-2992 907-899-4014 907-452-8119 907-963-2424 907-896-5414 907-967-8428 907-984-6184 907-480-6220 907-757-6613 907-588-8112

hunatotem.com

www.akbizmag.com • Alaska Business Monthly • September 2012

igiugig.com

isanotski.alaska.com

kavilco.com kijikcorp.com kikiktagruk.com kingislandnative.com klawockheenya.com klukwan.com

koniag.com kootznoowoo.com koyitlotsina.com

kuukpik.com

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Community

Village Corporation

Woody Island Levelock Lime Village Manokotak Mary’s Igloo Marshall Healy Lake Palmer McGrath Napakiak Napaskiak Kodiak Nelson Lagoon Andreafsky Newtok Mekoryuk Ninilchik Northway Village Toksook Bay Anaktuvuk Pass Hamilton Nunapitchuk Perryville Ohogamiut Old Harbor Wainwright Dillingham Oscarville Unalaska Ouzinkie Paimiut Naknek Pedro Bay Pilot Point Pilot Station Pitkas Point Anchorage Quinhagak Kongiganak Russian Mission Clark’s Point Salamatof Pauloff Harbor Sand Point Hooper Bay Seldovia Minto Craig Shaktoolik Sitka Shishmaref Sand Point Nome Gambell Solomon Saint George Saint Mary’s Saint Michael Stebbins New Stuyahok Nunam Iqua Tanacross Saint Paul Port Alsworth

Leisnoi Inc. 2000 Dowling Rd., #3, Anchorage, AK 99507 Levelock Natives Ltd. PO Box 109, Levelock, AK 99625 Lime Village Company 605 West Tudor Rd., Anchorage, AK 99503 Manokotak Natives Ltd. PO Box 149, Manokotak, AK 99628 Mary’s Igloo Native Corp.

PO Box 650, Teller, AK 99778 Maserculiq Inc. PO Box 90, Marshall, AK 99585 Mendas Cha-ag Native Corp. 457 Cindy Dr., Fairbanks, AK 99701 MontanaCreekNativeAssociation 3300 C St., #111, Anchorage, AK 99503 MTNT Ltd. PO Box 309, McGrath, AK 99627 Napakiak Corp.

PO Box 34030, Napakiak, AK 99634 Napaskiak Inc. PO Box 6069, Napaskiak, AK 99559 Natives of Kodiak Inc. 215 Mission Rd., #201, Kodiak, AK 99615 Nelson Lagoon Corp.

PO Box 913, Nelson Lagoon, AK 99571 Nerklikmute Native Corp.

PO Box 87, Saint Mary’s, AK 99658 Newtok Native Corp.

PO Box 5528, Newtok, AK 99559 Nima Corp.

PO Box 52, Mekoryuk, AK 99607 Ninilchik Natives Association Inc. PO Box 39130, Ninilchik, AK 99639 Northway Natives Inc. PO Box 401, Northway, AK 99764 Nunakauiak Yupik Corp.

PO Box 37068, Toksook Bay, AK 99637 Nunamiut Corp. Inc. PO Box 21009, Anaktuvuk Pass, AK 99721 Nunapiglluraq Corp.

PO Box 20187, Kotlik, AK 99620 Nunapitchuk Ltd. PO Box 129, Nunapitchuk, AK 99641 Oceanside Corp.

PO Box 84, Perryville, AK 99648 Ohog Inc. PO Box 49, Lower Kalskag, AK 99626 Old Harbor Native Corp.

PO Box 71, Old Harbor, AK 99643 Olgoonik Corp.

PO Box 29, Wainwright, AK 99782 Olsonville Inc. PO Box 571, Dillingham, AK 99576 Oscarville Native Corp.

PO BOX 6085, Napaskiak, AK 99559 Ounalashka Corp.

PO Box 149, Unalaska, AK 99685 Ouzinkie Native Corp.

PO Box 89, Ouzinkie, AK 99644 Paimiut Corp.

PO Box 209, Hooper Bay, AK 99604 Paug-Vik Inc. Ltd. PO Box 61, Naknek, AK 99633 Pedro Bay Corp.

1500 W 33rd Ave., #220, Anchorage, AK 99503 Pilot Point Native Corp.

PO Box 487, Pilot Point, AK 99649 Pilot Station Inc. PO Box 5059, Pilot Station, AK 99650 Pitka’s Point Native Corp.

PO Box 289, St. Mary’s, AK 99658 Point Possession Inc. 877 Shakespeare Cir., Anchorage, AK 99503 Qanirtuuq Inc. PO Box 69, Quinhagak, AK 99655 Qemirtalek Coast Corp.

PO Box 5070, Kongiganak, AK 99559 Russian Mission Native Corp. PO Box 48, Russian Mission, AK 99657 Saguyak Inc. PO Box 4, Clarks Point, AK 99569 Salamatof Native Association Inc. 100 N. Willow St., Kenai, AK 99611 Sanak Corp.

PO Box 194, Sand Point, AK 99661 Sanak Corp.

PO Box 194, Sand Point, AK 99661 Sea Lion Corp.

PO Box 87, Hooper Bay, AK 99604 Seldovia Native Association Inc. PO Drawer L, Seldovia, AK 99663 Seth-De-Ya-Ah Corp.

PO Box 56, Minto, AK 99758 Shaan-Seet Inc. PO Box 690, Craig, AK 99921 Shaktoolik Native Corp.

PO Box 46, Shaktoolik, AK 99771 Shee Atika Inc. 315 Lincoln St., #300, Sitka, AK 99835 Shishmaref Native Corp.

P.O Box 72151, Shishmaref, AK 99772 Shumagin Corp.

PO Box 189, Sand Point, AK 99661 Sitnasuak Native Corp.

PO Box 905, Nome, AK 99762 Sivuqaq Inc. PO Box 101, Gambell, AK 99742 Solomon Native Corp.

PO Box 243, Nome, AK 99762 St. George Tanaq Corp.

4141 B St., #301, Anchorage, AK 99503 St. Mary’s Native Corp.

PO Box 149, Saint Mary’s, AK 99658 St. Michael Native Corp.

PO Box 59049, St. Michael, AK 99659 Stebbins Native Corp.

PO Box 71110, Stebbins, AK 99671 Stuyahok Ltd. PO Box 1309, Dillingham, AK 99576 Swan Lake Corp.

PO Box 25, Nunam Iqua, AK 99666 Tanacross Inc. PO Box 76029, Tanacross, AK 99776 Tanadgusix Corp.

4300 B St., Ste 209, Anchorage, AK 99503 Tanalian Inc. 2425 Merrill Field Dr., Anchorage, AK 99501

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Mailing Address

Phone

Website

907-222-6900 907-287-3040 907-276-1550 907-289-1062 907-642-2308 907-679-6512 907-452-3094 907-569-9005 907-524-3391 907-589-2227 907-737-7413 907-486-3606 907-989-2204 907-438-2332 907-237-2200 907-827-8636 907-567-3866 907-778-2298 907-427-7929 907-661-3026 907-899-4453 907-527-5717 907-797-2300 907-679-6517 907-286-2286 907-763-2613 907-842-3511 907-737-7090 907-581-1276 907-680-2208 907-527-4915 907-246-4277 907-277-1500 907-797-2213 907-549-3512 907-438-2953 907-563-1848 907-556-8290 907-557-5529 907-584-5885 907-236-1235 907-283-3745 907-383-6075 907-383-2106 907-758-4415 907-234-7625 907-798-7181 907-826-3251 907-955-3241 907-747-3534 907-649-3751 907-383-3525 907-387-1200 907-985-5826 907-443-7526 907-272-9886 907-438-2315 907-923-3143 907-934-3074 907-693-3122 907-498-4227 907-883-4130 907-278-2312 907-272-3581

leisnoi.com

www.akbizmag.com • Alaska Business Monthly • September 2012

mtnt.net

nativesofkodiak.com

nimacorporation.com nnai.net

oldharbornativecorp.com olgoonik.com

ounalashka.com ouzinkienativecorporation.com pvil.com pedrobaycorp.com

salamatof.com

snai.com shaanseet.com sheeatika.com shumagin.com snc.org

stgeorgetanaq.com

tanacrossinc.com

Community

Village Corporation

Teller Akutan Chenega Bay Nanwalek Cordova King Cove Aniak Port Graham Tatitlek Birch Creek Point Hope Nenana Togiak Tanana Tuluksak Tuntutuliak Tununak Twin Hills Tyonek Uganik Barrow Unalakleet Sand Point Uyak Wales White Mountain Yakutat Shageluk

Teller Native Corp.

PO Box 649, Teller, AK 99778 The Akutan Corp.

PO Box 8, Akutan, AK 99553 The Chenega Corp.

3000 C St, #301, Anchorage, AK 99503 The English Bay Corp.

1637 Stanton Ave., Anchorage, AK 99508 The Eyak Corp.

PO Box 340, Cordova, AK 99574 The King Cove Corp.

PO Box 38, King Cove, AK 99612 The Kuskokwim Corp.

PO Box 227, Aniak, AK 99557 The Port Graham Corp.

629 L St., #205, Anchorage, AK 99501 The Tatitlek Corp.

561 E 36th Ave, Anchorage, AK 99503 Tiheet’ Aii Inc. PO Box 71372, Fairbanks, AK 99701 Tikigaq Corp.

2121 Abbott Rd., Anchorage, AK 99507 Toghotthele Corp.

PO Box 249, Nenana, AK 99760 Togiak Natives Ltd. PO Box 150, Togiak, AK 99678 Tozitna Ltd. PO Box 129, Tanana, AK 99777 Tulkisarmute Inc. PO Box 65, Tuluksak, AK 99679 Tuntutuliak Land Ltd. PO Box 8106, Tuntutuliak, AK 99680 Tununrmiut Rinit Corp.

PO Box 89, Tununak, AK 99681 Twin Hills Native Corp.

PO Box TWA, Twin Hills, AK 99576 Tyonek Native Corp.

1689 C St., #219, Anchorage, AK 99501 Uganik Natives Inc. PO Box 853, Kodiak, AK 99615 Ukpeagvik Inupiat Corp.

PO Box 890, Barrow, AK 99723 Unalakleet Native Corp.

PO Box 100, Unalakleet, AK 99684 Unga Corp.

PO Box 130, Sand Point, AK 99661 Uyak Natives Inc. PO Box 31, Chignik, AK 99564 Wales Native Corp.

PO Box 529, Wales, AK 99783 White Mountain Native Corp. PO Box 81, White Mountain, AK 99784 Yak-Tat Kwaan Inc. PO Box 416, Yakutat, AK 99689 Zho-Tse Inc. PO Box 130, Shageluk, AK 99665

Mailing Address

Phone 907-642-6132 907-698-2206 907-277-5706 907-562-4703 907-424-7161 907-497-2312 907-675-4275 907-272-7432 907-278-4000 907-455-8484 907-365-6299 907-832-5832 907-493-5520 907-366-7255 907-695-6854 907-256-2315 907-652-6311 907-525-4327 907-272-0707 907-486-3009 907-852-4460 907-624-3411 907-383-5215 907-486-4681 907-664-3641 907-622-5003 907-784-3335 907-473-8262

Website chenega.com eyakcorporation.com kingcovecorporation.com portgrahamcorp.com tatitlek.com

toghotthele.com

tyonek.com ukpik.com

yak-tatkwaan.com

Editor’s Note: Village Corporations listings are from the Alaska Department of Commerce, Division of Community and Regional Affairs. Changes and corrections should be emailed to DCRAresearch&analysis@alaska.gov or faxed to 907-269-4539.

www.akbizmag.com • Alaska Business Monthly • September 2012

117 ■

HR Matters

By Richard Birdsall

Right to Return Transportation Alaska law provides seasonal remedy

M

ost companies in Alaska have jobs that require unique and specialized skill sets. This often extends the talent search and eventual hiring to regions outside the geographical area.

Imagine that during one such talent search you discover an ideal candidate to fill a difficult niche. This candidate is both willing and able to relocate to Alaska. It’s a dream come true. During your employment negotiation you wholeheartedly agree to pay the employee’s relocation expenses including the relocation costs for the spouse, children, dog and the ubiquitous family possessions.

What else did you bargain for?

Alaska Statute 23.10.380 says you may have the responsibility to pay the return transportation costs of the hired employee under specified circumstances. It can happen years later because no time limit is specified.

Furthermore, AS 23.10.390 adds that section 23.10.380 is to be, “considered a part of every contract of hire involving transportation of an employee to and from this state or from one part of the state to another.”

So, regardless of whether this was factored into the mutual employment agreement, it is there. That said, what happens if the economic picture changes or the employer/employee relationship goes south?

AS 23.10.380 says, in part:

(a) An employer who furnishes, finances, agrees to furnish or finance, or in any way provides transportation for a person from the place of hire to a point inside or outside the state to employ the person with return transportation to the place of hire from which transportation was furnished or financed, ■ 118

or to a destination agreed upon by the parties, with transportation to be furnished or financed (1) On or after the termination of employment for a cause considered good and sufficient by the department (State Department of Labor), beyond the control of the person, or on or after the termination of the contract of employment or a renewal of the contract; and (2) Upon the request of the person or the department made within 45 days after the termination of employment . . .”

Seasonal Remedy

This stated purpose of the statutory scheme says it was enacted to provide a remedy for seasonal employees who might otherwise be stranded at remote job sites to become a burden upon the economic resources of the state. This makes sense. It is certainly not in the state’s interest to have ex-employees stranded here because they don’t have the funds to return home. The burden

is placed on the companies that brought them here.

Although apparently enacted primarily with the seasonal employee in mind, the language of the statute does not limit its application to “seasonal” workers. It has been applied to include a professional engineer, laid off by a firm for economic reasons, five years after his date of hire [Vail v. Coffman Engineers Inc., 778 P.2d 211 (1989)]—but (and it’s a big but), there is a limitation.

The employer is only statutorily obligated to pay for the return travel of the employee.  Richard Birdsall, B.A., J.D. is a senior consultant for The Growth Company, and uses his broad experience conducting training in legal compliance, investigation, risk assessment, team building, mediation and alternative dispute resolution.

www.akbizmag.com • Alaska Business Monthly • September 2012

heAlth & medicine

The Eyes Have It Vision care in Alaska

BY SUSAN SOMMER

C

ataracts, glaucoma, macular degeneration, diabetic retinopathy—the list goes on for serious diseases of the eye. Then there are those vision challenges that are less threatening but still annoying if not downright challenging, such as nearsightedness, farsightedness or eye strain.

Even healthy eyes with 20/20 vision need regular check-ups. Alaskans near the state’s larger cities have numerous options for vision care, while those in smaller communities or villages far from the road system are limited.

Many Groups Support Eye Care

A number of entities support vision care in Alaska. Optometrists licensed in Alaska must have graduated from an accredited school of optometry and passed both a written and practical exam administered by the National Board of Examiners in Optometry and a state exam administered by the Alaska Board of Examiners in Optometry. Continuing education is required for renewal. There are 179 licensed optometrists across the state, slightly more than in 2011.

The Alaska Optometric Association represents optometrists throughout Alaska and is the recognized authority for primary eye and vision care. Continuing education credits can be fulfilled at AKOA’s annual conference. The group is active in promoting health and vision care legislation that could affect

www.akbizmag.com • Alaska Business Monthly • September 2012

119 ■

Alaskans, as well as promoting public education about eye health.

Since 1976, the nonprofit Alaska Center for the Blind and Visually Impaired has focused on making sure that vision loss is not the barrier to Alaskans meeting their vocational goals or living safely and independently at any age. It is the only vision rehabilitation facility in the state. The majority of people the Center serves are low vision, meaning they have at least some usable vision that helps them function. The organization offers senior and youth programs, and holds classes in daily activities such as personal grooming and shopping, Braille, assistive technology and more.

It can house up to five out-of-town students at a time while they attend classes, some of which last up to two

of the Blind’s ACB Cafe, ACB Treasure Trove, some BBC channels and National Public Radio via special “blind-friendly” internet receivers, which are free.

Alaska Early Intervention/Infant Learning Program (EI/ILP) is a division of the Alaska Department of Health and Social Services, Office of Child Services that partners with grantees around the state to provide services, including vision screening, directly to eligible children.

The Aurora Borealis Lions Eyeglass Recycling and Vision Center in North Pole recycles approximately 40,000 pairs of glasses each year, most of which currently go overseas to support other Lions’ vision programs. Some, however, stay right here in the state to benefit Alaskans, made possible by a state law passed in 2008 that allows Alaska non-profits to

“Many Alaskans (120,000 or more) do not have access to health insurance, and when they do, vision needs are often not a covered service.”

—­Marilyn Kasmar Executive Director, Alaska Primary Care Association

months. At the Anchorage-based facility, there is even a woodshop for clients to use as an aid in boosting confidence.

The Center partners with the State of Alaska’s Department of Labor and Workforce Development’s Vocational Rehabilitation division to help with job development and placement opportunities. Executive Director Karla Jutzi emphasizes the importance of keeping the visually impaired in the workplace and encourages employers to contact the Center to learn more about resources.

The organization is also active in rural communities; Jutzi said staff members have visited about 20 in the past year.

Alaska Blind Child Discovery is a cooperative charitable research project to provide vision screening for every Alaskan of preschool age. It’s coordinated by optometrists at Ophthalmic Associates in Anchorage.

Alaska Information Radio Reading and Educational Services, or AIRRES., is unique in Alaska as the only broadcast reading service for blind and vision impaired people in the state. AIRRES provides a special radio to listen to various entertainment and educational channels, including many of Alaska’s newspapers, national magazines, American Council ■ 120

be certified by the state to fit any resident, free of charge, with a set of used glasses, provided the person has a prescription obtained from a licensed optometrist or physician. The glasses conform as closely as possible to the prescription.

Non-Cutting-Edge Technology

“Lasik,” which stands for laser in-situ keratomileusis, has become a household word in recent years. Though it’s not for everybody, it is a popular surgery used to correct vision in people who are nearsighted, farsighted or have astigmatism.

Alaska Lasik Center in Anchorage is currently Alaskans’ only option for blade-free laser vision correction, though other types of laser eye surgery are considered very safe and have a high satisfaction rate among patients.

Earlier this year, the Alaska Eye Surgery Center and Laser Center opened in Anchorage and offers the use of its facilities for local ophthalmic surgeons.

Rural Vision Care

Few of Alaska’s smaller communities have regular optometry services; rather, a traveling optometrist visits regularly but not frequently, or residents go to a

larger regional hub for vision and other health care. Bethel, for example, offers a full suite of eye care options via the Yukon-Kuskokwim Health Corp. The Norton Sound Health Corp. provides eye care services to Nome residents; optometrists make annual field trips to other area locations.

In communities such as McGrath (population 341), an optometrist comes once a year and brings various frames for customers to choose from; glasses are then ordered with the correct lenses.

McGrath resident Natalie Baumgartner says though plenty of people see the visiting optometrist and most find that service meets their needs, some still fly to Anchorage for their vision care needs, especially for unusual issues or surgery.

Out on the Yukon-Kuskokwim delta northwest of Bethel, another rural Alaskan, Dawn Webb of Mountain Village, said residents have to fly to Bethel or Anchorage for eye care, and that many people buy glasses online. A traveling optometrist is rarely in town.

“Unfortunately very few people here can afford such expenses and many, many children go without eye care entirely or use the same pair of glasses for prolonged periods of time,” Webb said.

As someone who lives far off the road system where health care is expensive or nonexistent, she said she’s learned to stitch up her cuts, break fevers like a pro and fix her own glasses.

In 2010, 12 community health centers, or CHCs, around Alaska won an Eye Care for Rural Alaskans program grant from the Joint Vision Awareness Committee (Alaska Primary Care Association, Alaska Optometric Association, Alaska Center for the Blind and Visually Impaired, and the Lions Club).

The funding was to buy vision screening devices for use in rural and satellite clinics and other community facilities such as schools. It also provided for an annual optometrist visit to each clinic, an annual visit by a vision rehabilitation specialist to help patients with uncorrectable vision loss, and glasses and other vision aids. Currently, 14 CHCs participate in the program, all of which have their own PlusOptix screeners, an improvement from having to share when the program began. Many of them offer vision screenings at health fairs and other community events.

www.akbizmag.com • Alaska Business Monthly • September 2012

“Each community also has the ability to have an on-site optometrist visit once per year, but we have been able in some cases to provide more, based on need,” said Marilyn Kasmar, executive director of Alaska Primary Care Association. She cites Glennallen as an example; recently, an optometrist visited the community for nine days and saw 180 patients.

“Also, marketing and outreach assistance are now provided to the sites to help maintain and increase staff and community awareness about the program through the year,” Kasmar said.

“Many Alaskans (120,000 or more) do not have access to health insurance, and when they do, vision needs are often not a covered service.”

Eye Exam Assistance Programs

In addition to the Lions Club services mentioned previously, the following vision care assistance programs are available in Alaska.

With a program called InfantSEE, any 6-12-month old infant is eligible for a no cost comprehensive infant eye assessment, regardless of income or insurance. Several optometrists around Alaska are providers of this national program.

Sight for Students is a program administered by AKOA through the charity arm of the national Vision Service Plan. Several criteria must be met for eligibility, including age, lack of vision insurance and family income.

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Job Prospects in Vision Care

As with Alaska health care job opportunities in general, due in part to Alaska’s aging population, dispensing optician jobs are expected to grow as are those for health care support industries.

Alaska’s optometrists are among some of the highest paid professionals, with an average monthly income of $11,768.

The employment outlook for optometrists in Alaska is not available from the State’s Department of Labor and Workforce Development; however, the national outlook is rosy based partly on a growing population that recognizes the importance of good eye care.  Susan Sommer is a freelance writer and editor living in Eagle River.

www.akbizmag.com • Alaska Business Monthly • September 2012

121 ■

ALASKA THIS MONTH Compiled By Nancy Pounds

dining

Outdoor Cajun Feast Supports Red Cross

Photo courtesy of American Red Cross of Alaska

The Taste of Mardi Gras is an annual street fair in downtown Anchorage to benefit the American Red Cross of Alaska.

A

downtown street party featuring Cajun-style cuisine is set for Sept. 7 from 5:30-10 p.m. on Fourth Avenue between K and L streets in Anchorage. Tickets to “A Taste of Mardi Gras,” a fundraiser for the American Red Cross of Alaska, cost $25.

Originating in 2005 to raise money for victims of Hurricane Katrina, the first event featured several top Alaska chefs cooking New Orleans favorites with accompanying regional music and an auction, says Laura Spano, development specialist for the American Red Cross of Alaska. The inaugural event raised more than $80,000.

The Taste of Mardi Gras continues to tantalize taste buds and support local Red Cross efforts. “The tradition of caring has not declined over the years, but grown exponentially,” Spano says. “The American Red Cross of Alaska works closely with the Alaska Travel Industry Association to throw a signature downtown event.”

Last year about 2,500 participants attended the event, which features live music, street vendors and “a dynamic social atmosphere that mimics New Orleans’ own Bourbon Street, Alaska style,” Spano says, adding that local businesses, restaurants and pubs also support the Taste of Mardi Gras. (tasteofmardigras.org) 

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www.akbizmag.com • Alaska Business Monthly • September 2012

ALASKA THIS MONTH Compiled By Nancy Pounds

trAvel

Photo courtesy of Seward Music and Art Festival

Seward Music Festival Heralds Summer’s End

The Seward Music and Arts Festival features various performers from around the state.

V

enture to Resurrection Bay’s town this month for the family friendly Seward Music and Arts Festival, which runs Friday, Sept. 28 through Sunday, Sept. 30.

The event features musicians and artists from around Alaska, plus children’s activities. Arts and crafts booths, an art show, food vendors and a beer garden will also be available.

The festival also features Seward Mural Society members painting a new Community Mural Project.

“Our festival remains committed to youth involvement, education and creative inspiration, as well as a low-environmental impact philosophy,” says Gail Burnard, general director for the festival.

The kids area will feature creative projects with a special guest artist and other offerings. More than 20 musical and dance performers will take the stage, including the group Historian.

The festival is held inside the Alaska Railroad Cruise Ship Terminal Dock Building and is coordinated by the Seward Arts Council. Tickets are $6 per day for adults or $15 for a weekend pass; children younger than 12 participate for free. (sewardfestival.com) 

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123 ■

ALASKA THIS MONTH Compiled By Nancy Pounds

entertAinment

Photo by Jan F. Horwath/Alaska Railroad Corp.

Blues Train Enlivens Route to Seward

The popular fall Blues Train travels along the Turnagain Arm with onboard entertainment en route to Seward.

T

he Alaska Railroad Corp.’s popular Blues Train will again rhythmically sway toward Seward this month with onboard live music. The special event train departs Anchorage Sept. 22 and returns from Seward Sept. 23.

“The event is very popular, it combines one of the most scenic routes on the railroad with world class Blues, and a wonderful barbeque at the Pit Bar while in Seward,” said Jeff Johnson of the Alaska Railroad.

The train is limited to the first 200 people who purchase tickets, he said. Tickets cost $269 per person and include an overnight stay in Seward. The Alaska Railroad and Blues Central, an Anchorage nightclub, coordinate the event. The Blues Train’s live music on the rails first entertained travelers en route to Seward in 2005.

Frank Dahl, owner of Blues Central, modeled the idea after boat cruises in the Lower 48 featuring live blues music. The Alaska Blues Train continues to be popular because of the combination of entertainment and the “excitement of riding the rails to Seward,” Dahl said. The band Rebel Blues will perform aboard the train and at the Pit Bar in Seward.

The special event train stops for wildlife viewing. Last year the train stopped near a glacier for a couple to get married, Dahl said. (alaskarailroad.com) 

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www.akbizmag.com • Alaska Business Monthly • September 2012

EVENTS CALENDAR

Compiled By Tasha Anderson

Anchorage 1-2 & 9-10

Cordova

Anchorage Market and Festival

7-8

Cordova Fungus Festival

Shop for fresh produce, exotic goods from around the world or Alaskan souvenirs at Alaska’s leading outdoor market. It consists of more than 300 vendors, on seven acres of downtown Anchorage. The market includes food and free, live entertainment. Third Avenue between C and E, 10 a.m. to 6 p.m. anchoragemarkets.com

Events include workshops, forays, gourmet dining, and experts from the world of mushrooms. Various locations and times. cordovachamber.com

8-9

This annual 26.2 mile race begins and ends at the University of Alaska Fairbanks. It was initiated in 1963 and includes a marathon, ultra marathon and relay. Pikes Waterfront Lodge is the official host hotel for this year’s races. UAF, 8 a.m. equinoxmarathon.org

Great Alaska Quilt Show

This event displays a large variety of quilts made by members of the local quilt guild. The show will feature award winning local quilt artist Linda Postlewait. Events include a small-quilt silent auction and a large-quilt raffle. ConocoPhillips Atrium, 10 a.m. to 4 p.m. anchoragelogcabinquilters.blogspot.com

9

Fall Wedding Show

The show covers all aspects of planning a wedding including wedding professionals, gown collections, cake and catering samples, venues, flowers, music performers, cosmetics, etc. Free admission. Alaska Native Heritage Center, Noon to 5 p.m. alaskabride.com

12

Job Fair

The fair will include more than 60 employers and vendors. Company representatives will be available to discuss employment opportunities and accept applications for full-time, part-time and seasonal jobs. Free resume evaluations and resume updating assistance will be available.

Egan Center, 10:30 a.m. to 5 p.m. anchorageconventioncenters.com

14-16

Fall Home Expo

Events for the Alaska Fall Home/World of Log Homes & Timber Frames Expo include educational seminars, “How-To” workshops and door prizes.

The Bloodmobile will be located as the show on Sunday. Free admission.

Dena’ina Convention Center, 2 p.m. to 7 p.m. Friday; 10 a.m. to 6 p.m.

Saturday; 10 a.m. to 4 p.m. Sunday. dammstraightproductions.com

15

Walk for Lupus Now

Sponsored by the Lupus Foundation of America, this walk raises awareness and funds for Alaskans living with lupus. The walk also includes raffles, music and arts and crafts for children. The indoor track allows for those with limited physical abilities to participate. The Alaska Dome, 9 a.m. to 11 a.m. www.lupus.org

9/21-10/21

On Golden Pond

Written by Ernest Thompson, this award winning play centers on the turbulent relationship between father and daughter, the generation gap between young and old, and the difficulties facing a couple in the twilight years of a long marriage. Anchorage Community Theatre, 7 p.m. actalaska.org

22

Fiesta

This is the opening night of the Anchorage Symphony Orchestra, conducted by Randall Craig Fleischer. Musical selections include Danzón no 2 by Marquez, Sensemayá by Revueltas, and Capriccio Espagnol, Op. 34 by Rimsky-Korsakov.

Alaska Center for the Performing Arts, 8 p.m. anchoragesymphony.org

28-30

Alaska Women’s Show

Vendors celebrate everything that makes Alaska women unique. The show features financial seminars, fashion shows, jewelry, health care information, home improvement workshops, elder care presentations and more. Sullivan Arena, 11 a.m. to 6 p.m. auroraproductions.net

Fairbanks 15

Equinox Marathon

22

Tanana Valley Potato Extravaganza

This seven course meal features all locally grown produce and is carefully prepared by Alaskan chefs. Pump House Grill, 6 p.m. For information call 907-456-1984.

Homer 6-9

Annual Wooden Boat Festival

The festival includes exhibits, rowboat races, demonstrations by boat builders and kid’s boat building. Sponsored by the Kachemak Bay Wooden Boat Society. Homer Spit. homeralaska.org

Girdwood 11

The Dan Mac Quartet

The quartet is promoting the new jazz CDs of its various members on their “907 Central Tour.” Group members include Dan McElrath on keys, Milo Matthews on bass, Cameron Cartland on drums and Portland jazz guitarist Mike Doolin. Alyeska Resort, 6 p.m. reverbnation.com/danmcelrath

Juneau 9

Community Service Fair & Meet the Candidates Day

The fair provides information on volunteering and fun activities as well as an opportunity for nonprofit groups to dispense information and gather participants. Current candidates will also be available for questions. Nugget Mall, 10 a.m. to 3 p.m. nuggetmalljuneau.com

9/14-10/7

Perseverance Theatre’s “Of Mice and Men”

The theatre’s mainstage 2012-2013 season opens with this John Steinbeck classic. Perseverance Theatre, 7:30 p.m. perseverancetheatre.org

Kodiak 1-3

Kodiak State Fair

Events include calf roping, barrel racing, and bull and bronc riding for adults and teens; pony rides, a petting zoo, pie eating, seed spitting and bubble gum blowing competitions for younger children. Live local music and vendor booths selling everything from local artwork to kettle corn round out the fair’s attractions. Kodiak Fairgrounds, various times. kodiakrodeoandstatefair.com

Valdez 8

Blues Cruise

Sponsored by the Valdez Arts Council, this fundraiser cruise takes place aboard the Stan Stephens M/V Spirit. This year’s musical guest is Rebel Blues. Enjoy desserts, appetizers, music and a cash bar. 7 p.m. valdezartscouncil.org

www.akbizmag.com • Alaska Business Monthly • September 2012

125 ■

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www.akbizmag.com • Alaska Business Monthly • September 2012

ALASKA TRENDS

By Paul Davidson

The Next Oil Boom

Alaska Trends, an outline of significant statewide statistics, is provided by the University of Alaska Center for Economic Development.

T

2012

2009

2006

2003

2000

1997

1994

1991

1988

1985

1982

1979

1976

1973

he State of North Dakota Alaska, North Dakota and Texas Oil Production keeps oil production data 1973-2011 from 1952 to present. This 1000 data shows North Dakota’s total yearly oil production increasing 900 dramatically in recent years. North 800 Dakota’s total oil production for 700 2011 is 153 million barrels, 273.92 percent higher than the preceding 600 40 year average of 41 million barrels North Dakota 500 per year. Use of the now economiAlaska 400 cal hydraulic fracturing technique is credited with much of North DaTexas 300 kota’s increase in oil production.

200 Production data for 2008-2011 100 contains a majority of North Dakota’s recent hike in oil produc0 tion. The U.S. Bureau of Labor Statistics marked North Dakota’s unemployment rate the lowest in the nation for the years 20092011. Having the highest oil production growth of any 1981 until stabilization in 2006-2008, followed by growth state, North Dakota now produces the second most oil of through 2011. Alaska’s oil production took off in the late any state, below Texas and barely above Alaska.

70s, hitting a peak of 736 million barrels in 1988 before The graph shows oil production in millions of barrels declining. North Dakota shows a fairly consistent yearly per year for the current top three oil producing states: Tex- production until rapid growth begins with a 40 percent inas, North Dakota and Alaska. Texas oil production shows crease from 2007 to 2008. Oil production in North Dakota a decline starting at the beginning of the Texas data-set in continues to rise.  Sources: Institute for Energy Research, State of North Dakota, US Energy Information Administration

ALASKA TRENDS HAS BEEN BROUGHT TO YOU THIS MONTH COURTESY OF AMERICAN MARINE/PENCO

www.akbizmag.com • Alaska Business Monthly • September 2012

127 ■

ALASKA TRENDS

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 Sectorial Distribution–Alaska Total Nonfarm Goods Producing Services Providing Mining and Logging Mining

Oil & Gas Construction Manufacturing Seafood Processing Trade/Transportation/Utilities Wholesale Trade Retail Trade Food & Beverage Stores General Merchandise Stores Trans/Warehouse/Utilities Air Transportation Information

Telecommunications Financial Activities Professional & Business Services Educational & Health Services Health Care Leisure & Hospitality Accommodation Food Services & 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 Unemployment Rate Alaska Anchorage & Mat-Su Fairbanks

■ 128

By Paul Davidson Previous Report Period (revised)

Year Ago Period

Year Over Year Change

Units

Period

Latest Report Period

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

4th Q11 4th Q11 2nd H11 2nd H11

33,342 13,137,224 202.58 226.28

33,043 13,033,756 200.28 223.60

32,413 12,915,008 200.278 223.598

2.87% 1.72% 1.15% 1.20%

Number Filed Number Filed Number Filed

May May May

71 52 10

59 43 5

75 57 14

-5.33% -8.77% -28.57%

Thousands Thousands Thousands Thousands Thousands

May May May May May

341.07 186.13 43.85 39.44 37.27

336.64 186.30 43.86 36.53 35.84

337.37 183.87 44.22 39.22 36.33

1.10% 1.23% -0.85% 0.58% 2.60%

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

May May May May May May May May May May May May May May May May May May May May May May May May May May May May May May May May May

328.6 39.7 288.9 16.6 16.1 13.2 13.1 10.0 6.6 65.4 6.1 36.3 6.4 10.1 23.0 6.0 6.4 4.1 14.5 27.8 46.4 32.2 33.1 7.0 20.9 11.1 84.2 16.7 25.7 7.4 41.8 24.0 3.8

321.1 38.7 282.4 16.3 15.9 13.2 11.6 10.8 7.6 61.8 6.0 34.7 6.3 9.6 21.1 5.6 6.3 4.1 14.5 27.3 46.4 32.3 29.4 6.2 18.8 10.9 85.8 16.2 26.6 8.6 43.0 25.8 3.8

328.5 41.7 286.8 16.3 15.8 13.2 16.2 9.2 5.6 65.9 6.2 36.5 6.3 10.0 23.2 6.0 6.5 4.3 14.9 26.6 43.2 31.6 34.2 7.1 21.7 11.7 83.8 17.3 25.3 7.0 41.2 23.9 3.8

0.03% -4.80% 0.73% 1.84% 1.90% 0.00% -19.14% 8.70% 17.86% -0.76% -1.61% -0.55% 1.59% 1.00% -0.86% 0.00% -1.54% -4.65% -2.68% 4.51% 7.41% 1.90% -3.22% -1.41% -3.69% -5.13% 0.48% -3.47% 1.58% 5.71% 1.46% 0.42% 0.00%

Thousands Thousands Thousands Thousands Thousands

May May May May May

367.08 198.49 46.79 42.06 40.42

362.89 198.76 46.89 39.26 39.09

364.28 197.06 47.28 41.95 39.65

0.77% 0.73% -1.04% 0.28% 1.93%

Percent Percent Percent

May May May

7.1 6.2 6.3

7.2 6.3 6.5

7.4 6.7 6.5

-4.05% -7.46% -3.08%

www.akbizmag.com • Alaska Business Monthly • September 2012

ALASKA TRENDS

By Paul Davidson Year Ago Period

Year Over Year Change

Units

Period

Latest Report Period

Percent Percent Percent

May May May

6.2 7.8 7.9

7 8.3 7.7

6.5 8.4 8.7

-4.62% -7.14% -9.20%

Millions of Barrels Billions of Cubic Ft. $ per Barrel

May May May

16.96 8.99 110.55

16.57 8.99 120.95

18.04 9.41 113.57

-6.00% -4.48% -2.66%

Active Rigs Active Rigs $ Per Troy Oz. $ Per Troy Oz. Per Pound

May May May May May

6 1977 1,585.31 28.67 0.96

8 1962 1,649.30 31.55 1.00

5 1836 1,511.31 36.75 1.08

20.00% 7.68% 4.90% -22.00% -10.65%

Millions of $ Millions of $ Millions of $

May May May

47.93 21.16 26.77

30.39 15.76 14.62

45.69 13.19 32.49

4.92% 60.41% -17.61%

Total Deeds

May

973

962

650

49.69%

VISITOR INDUSTRY Total Air Passenger Traffic–Anchorage Total Air Passenger Traffic–Fairbanks

Thousands Thousands

May May

414.76 83.35

323.75 59.70

415.52 83.56

-0.18% -0.25%

ALASKA PERMANENT FUND Equity Assets Net Income Net Income–Year to Date Marketable Debt Securities Real Estate Investments Preferred and Common Stock

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

May May May May May May May

40,082.70 40,687.60 145.7 1,613.8 (16.2) (19.10) (1,700.0)

41,642.10 42,130.10 128.4 1,468.1 80.6 77.10 (245.7)

41,077.80 41,514.20 222.3 ($204.3) 36.2 17.3 (462.7)

-2.42% -1.99% -34.46% 889.92% -144.75% -210.40% -267.41%

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

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

4th Q11 4th Q11 4th Q11 4th Q11 4th Q11 4th Q11 4th Q11 4th Q11 4th Q11

2,088.25 46.12 151.97 1,119.55 6.26 1,827.29 1,783.65 550.20 1,233.44

2,105.62 49.64 156.23 1,097.05 7.05 1,847.06 1,800.05 543.72 1,256.33

2,098.95 43.60 155.42 1,123.90 12.37 1,849.81 1,809.77 528.42 1,281.35

-0.51% 5.77% -2.22% -0.39% -49.37% -1.22% -1.44% 4.12% -3.74%

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

Yen Canadian $ Pounds Euro Yuan

May May May May May

79.75 1.01 0.63 0.78 6.32

81.43 0.99 0.63 0.76 6.31

81.10 0.97 0.61 0.70 6.50

-1.67% 4.30% 2.55% 11.69% -2.70%

Indicator

Southeast Gulf Coast United States PETROLEUM/MINING Crude Oil Production–Alaska Natural Gas Field Production–Alaska ANS West Cost Average Spot Price Hughes Rig Count Alaska United States Gold Prices Silver Prices Zinc Prices REAL ESTATE Anchorage Building Permit Valuations Total Residential Commercial Deeds of Trust Recorded Anchorage--Recording District

Previous Report Period (revised)

www.akbizmag.com • Alaska Business Monthly • September 2012

129 ■

Advertisers Index AES Alaska Executive Search.................47 Alaska Boat Brokers.................................. 126 Alaska Air Cargo - Alaska Airlines........71 Alaska Air Transit.........................................123 Alaska Enterprise Solutions....................25 Alaska Housing Finance Corp...................3 Alaska Native Village CEO Association.. 126 Alaska State Chamber of Commerce.96 Alaska USA Federal Credit Union.......81 Ameresco.............................................................97 American Fast Freight................................. 77 American Hyperbaric Center...............113 American Marine / PENCO...................127 Anchorage Chrysler Dodge ...................22 Anchorage Opera........................................122 Arctic Controls................................................44 Arctic Office Products (Machines).....39 Arctic Slope Regional Corp.- ASRC........72 Arctic Slope Telephone Association.. 39 AT&T Alaska........................................................11 Azimuth Adventure Photography.....121 Bell Tech................................................................19 Bering Shai Rock & Gravel ......................49 Bering Straits Native Corp....................101

■ 130

Bowhead Transport Co.............................60 Bristol Bay Native Corp.............................69 Business Insurance Associates Inc.....27 Calista Corp........................................................75 Capture the Fun Alaska LLC................ 126 Caring For Women......................................121 Carlile Transportation Systems............ 21 Chris Arend Photography......................130 Ciri Alaska Tourism......................................70 City Electric Inc................................................53 Construction Machinery Industrial LLC.....2 Cook Inlet Tug & Barge Inc......................62 Crowley................................................................131 Cruz Contruction Inc....................................61 Delta Western..................................................85 Design Alaska...................................................56 Donlin Gold.........................................................16 Dowland-Bach Corp.................................... 41 Dynamic Properties.....................................27 EDC Inc..................................................................55 Eklutna Native Corp..................................... 76 Engineered Fire & Safety..........................42 ERA Alaska.........................................................59 Everts Air Cargo..............................................97

First National Bank Alaska..........................5 Fountainhead Hotels...................................74 GCI . ......................................................23, 38, 42 Golden Valley Electric Association.....55 Grant Thornton LLP.....................................89 Holmes Weddle & Barcott.......................56 Hotel Captain Cook......................................78 Judy Patrick Photography.......................113 Kendall Ford Wasilla...................................117 Koniag Inc............................................................ 67 Landye Bennet Blumstein LLP...............16 Leemar Manufacturing Inc.....................90 Lounsbury and Associates......................44 Lynden Inc. ........................................................65 Mikunda Cottrell & Co. .............................85 MT Housing Inc...............................................79 NANA Regional Corp...................................13 Native American Bank . ............................. 91 NCB.........................................................................87 N C Machinery.................................................45 Neeser Construction Inc. .....................107 Northern Air Cargo.............................30, 31 PacArctic Logistics........................................62 Pacific Alaska Freightways......................63

Pacific Pile & Marine.......................8, 9, 10 Pacific Rim Media / Smart Phone Creative...........................15 Paramount Supply...................................... 126 Parker, Smith & Feek....................................29 Patton Boggs......................................................73 PDC Engineers Inc.........................................33 Pebble Partnership.......................................92 Pen Air...................................................................87 Personnel Plus...............................................122 Procomm Alaska..............................................37 Rotary District 5010..................................123 Ryan Air...............................................................115 Seekins Ford Lincoln Fleet.......................43 SOS Employment Group...........................49 Stellar Designs Inc...................................... 126 TDX Power.........................................................93 The Growth Company..............................121 Ukpeagvik Inupiat Corp.............................83 Vitus Marine LLC......................................... 126 Washington Crane & Hoist.......................17 Waste Management . ...................................35 Wells Fargo .....................................................132 WHPacific...........................................................34

www.akbizmag.com • Alaska Business Monthly • September 2012

When Shell Oil needed ice-class oil spill response barges to work in some of the world’s most extreme working environments – the Beaufort and Chukchi Seas – they called Crowley. Our management team engineered, constructed and outfitted the three barges that will support this important off-shore operation.

Shell Project: On time. On budget. Turnkey.

You can count on Crowley.

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