September 2011 - Alaska Business Monthly

Alaska Native Corporation Review

September 2011

$3.95

FISHING

Developing Alaska’s coastal and rural villages Page 82

SEPTEMBER 2011 TA B L E O F C O N T E N T S

ABOUT THE COVER

D E PA R T M E N T S From the Editor . . . . . . . . . . . . . . 7 Inside Alaska Business . . . . . . . . 8 Events Calendar . . . . . . . . . . . . 52 Right Moves . . . . . . . . . . . . . . . . 54 Market Squares . . . . . . . . . . . . . 70 Alaska Trends . . . . . . . . . . . . . . 127 Ad Index . . . . . . . . . . . . . . . . . . 130 R E G U L A R F E AT U R E S

The crew of the seine boat, Ocean Spirit, fishes for wild Alaska salmon at Lucky Cove, south of Ketchikan.

Cover photo by Clark James Mishler.

ARTICLES

View From the Top 11 | Sandy Baker CEO/Golden Heart Administration Professionals Compiled by Peg Stomierowski

Oil & Gas 30 | Oil Industry Innovators Alaska’s challenges forced development of new technology

By Mike Bradner

Ripe for Redevelopment 12 | Northway Mall Revitalization New anchors, live entertainment

By Gail West

Oil & Gas 36 | Alaska Offshore Development Historical methods still being used

By Mike Bradner

Regional Review 14 | The North Slope Where oil is king

By Tracy Barbour

Agriculture 42 | Alaska Food Challenge Eating local for a year

By Susan Sommer

Health & Medicine 56 | Group Health Insurance Still desirable, still expensive

By Deborah Jeanne Sergeant Rural Development 60 | Building in the Bush Communities face long list of obstacles to rural development

By Vanessa Orr Environmental 66 | The Clean Water Act Compliance challenges communities, businesses

By Vanessa Orr

Towns in Transition 22 | Wrangell ‘The little town that could’

By Heidi Bohi Associations 26 | Alaska Miners Association Mining brings benefits to the state

By Tracy Barbour Business Basics 46 | Strategy Your critical component to success

By Eric Britten

Alaska This Month 50 | Drivers Tackle Denali Park Road Road-lottery winners venture onto scenic route

By Nancy Pounds

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Photo by Susan Sommer

HR Matters 48 | Total Compensation More than green

By Andy Brown

SEPTEMBER 2011 TA B L E O F C O N T E N T S ARTICLES

100 | A Partner for Progress Alaska Native corporations help move the state forward through publicprivate partnerships

By Shelly Wozniak/Op-Ed 103 | ANCSA Lands Claims – 40 Years Later Alaska Natives need lands, often held up in litigation

By Julie Stricker

Photo courtesy of Sealaska Corp.

106 | Crossing Borders Native corporations make inroads on the global economy

By Vanessa Orr 108 | CITC’s Cutting-Edge Programs Models of social enterprise effectiveness

By Gail West

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111 | 13 Regional Corporations Directory 122 | Village Corporations Listings

SPECIAL SECTION ALASKA NATIVE BUSINESS NEWS

72 | 2010 ANCSA Regional Corporation Overview Major engines for the state; revenues of 12 ANCs top $7.5 billion

By Julie Stricker

94 | Solstice Advertising Agency Award-winning, Native-owned

By Louise Freeman 96 | Growing ANCSA Leaders New generation steps up to corporate management

By Julie Stricker

CORRECTION

In the August issue, on the Table of Contents and the byline of an article titled “Seeking Champions for Alaska’s Future” Rachael Petro’s name was misspelled. She is the Alaska State Chamber of Commerce president and CEO.

82 | Villages Put Fish Dollars to Work Coastal, river communities spread development opportunities

By Rindi White

90 | SBA 8(a) Regulation Restructure ANCs set to work with new rules

By Gail West 92 | Sealaska Heats Headquarters With Wood Juneau first bioenergy commercial site

By Julie Stricker

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Photo courtesy of Chugach Alaska Corp.

86 | Empowering People Education is a key factor

By Julie Stricker

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Debbie Cutler Susan Harrington Candy Johnson Linda Shogren Chris Arend Judy Patrick Azimuth Adventure Photography

BUSINESS STAFF President Vice President Sales & Mktg.

Account Mgr. Account Mgr. Traffic Coordinator Accountant

Jim Martin Charles Bell Anne Campbell Bill Morris Ann Doss Mary Schreckenghost

501 W. Northern Lights Boulevard, Suite 100 Anchorage, Alaska 99503 (907) 276-4373 Outside Anchorage: 1-800-770-4373 Fax: (907) 279-2900 www.akbizmag.com Editorial e-mail: editor@akbizmag.com Advertising e-mail: 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., P.O. Box 241288, Anchorage, Alaska 99524; Telephone: (907) 276-4373; Fax: (907) 279-2900, ©2011, Alaska Business Publishing Co. All rights reserved. Subscription Rates: $39.95 a year. Single issues $3.95 each; $4.95 for October.

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DITO R

Movers and Shakers of Tomorrow

Vern C. McCorkle, Publisher 1991~2009

EDITORIAL STAFF

THE

Generation Alpha

Volume 27, Number 9 Published by Alaska Business Publishing Co. Anchorage, Alaska

Managing Editor Associate Editor Art Director Art Production Photo Consultant Contributing Photographers

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y first grandchild, Kaleb, was born midJuly. I wonder about his future.

According to an Internet article from MoneyTalksNews called “Things Babies Born in 2011 Will Never Know” combined with an article in the Huffington Post titled “You’re Out: 20 Things That Become Obsolete This Decade” my beautiful Kaleb will never know “video tape, travel agents, separation of work and home, books, magazines and newspapers, movie rental stores, watches, paper maps, wired phones, long-distance, newspaper classifieds, dial-up Internet, encyclopedias, forgotten friends, forgotten anything else, the evening news, CDs, film cameras, the yellow and white pages, catalogs, fax machines” and so much more.

He’s of a new generation. Not Gen X, Gen Y or even Gen Z. He’s Generation Alpha, otherwise know as Gen A. One that will use technology unlike I have ever thought of. Can’t imagine. Can’t fathom. One that will be the most educated ever. One that begins learning earlier than past generations and continues to learn longer than any before them, according to researchers and sociologists.

My grandson’s parents know technology.

They are hooked to their iPhones and iPads and text messaging. When my daughter, Sarah, was giving birth, she was texting my other daughter, Jennifer, from the delivery room. Now, who would have thought of that 20 years ago? But even they will be behind the times if they don’t keep up with the changing world around them.

I can’t fathom what my grandson will know that I don’t know. I can’t fathom a life without the things I am familiar with. But if there is any truth to these two articles, which I believe there is, in fact already am already seeing signs of, our lives and livelihoods are going to change drastically within 10 years and we

Kaleb Diekmann smiles at 10 days old old, innocent, but already a product of the new generation, Generation Alpha. His generation will be one of technological advancement unlike we’ve ever seen.

all must jump on the technology bandwagon, learn and try new things, explore, comprehend, and run with it.

We must know things our parents don’t know. We must learn things that we may not want to. We must grow, change, progress. Digging our heels in today won’t work.

Like it or not, we must enthusiastically join in thought with the new generation, my grandson’s generation, or we will be left behind in a dust trail of things familiar.

Welcome to the world Kaleb. I already know you will be my teacher, leading me out of the baby boomer mindset into new realms of discovery and all things fascinating.

— Debbie Cutler Managing Editor

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INSIDE ALASKA BUSINESS Former Kulis Facilities Up for Sale or Lease

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fficials from Ted Stevens Anchorage International Airport are looking to sell or lease the former Kulis Air National Guard Base facilities. The 127acre facility is accessed via Raspberry Road. In 2005, the Base Realignment and Closure Commission recommended closing Kulis and relocating the 176th wing of the Alaska Air National Guard and associated aircraft to Joint Base Elmendorf-Richardson. In September, airport officials expect the land transfer from the Defense Department to be completed. The facilities available for sale or lease include three office buildings, some with warehouse space, and one warehouse with adjoining office space. Three hangars are available for lease or purchase for aviation-related industries. Apron-front land is available for developing aviation business.

Preference will be given to aviation-use applicants, airport officials said. More information about the facilities and lease applications are online at http://dot. state.ak.us/anc/business/leasing/.

Fort Greely Housing Upgrades Advance

their families. The U.S. Army formed the partnership with Actus Lend Lease through the Military Housing Privatization Initiative to renovate, build and maintain 1,800 houses at Fort Greely near Delta Junction and Fort Wainwright near Fairbanks.

Tunista Construction Wins Military Contract

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unista Construction LLC, a subsidiary of Calista Corp., was awarded two construction contracts totaling $14.4 million for Joint Base Elmendorf-Richardson. Tunista received a Small Business Administration 8(a) sole-source contract with a $4.2 million bid to expand training facilities for the 16th Air Support Operations Squadron. The second contract was a competitive SBA 8(a) set-aside project awarded for $10.2 million. Work will develop a multipurpose machine-gun range. Brice Inc. and Alcan Electrical & Engineering are major subcontractors. Brice is also a Calista subsidiary.

The project will add target lanes, two new buildings covered bleachers and include other site development. Work on both projects was due to begin this summer with an expected completion set for next year.

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he U.S. Army formed a partnership with Actus Lend Lease to renovate, build and maintain 126 houses at Fort Greely. The partnership, called North Haven Communities, has completed a picnic pavilion and plans to build playgrounds and a community center. The 50-year contract aims to improve quality of life for Fort Greely soldiers and

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ASRC Subsidiary Lands NASA Contract

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SRC Research and Technology Solutions of Greenbelt, Md. was awarded a NASA Awards Spectrum Management and Engineering Services

COMPILED BY NANCY POUNDS Contract worth up to $46 million.

ASRC Research and Technology Solutions is a subsidiary of Arctic Slope Regional Corp. The contract was awarded under a noncompetitive Small Business Administration 8(a) program. ASRC Research and Technology Solutions will provide technical support and engineering studies to support NASA’s spectrum allocations. Work will also support coordination of national and international spectrum management organizations related to NASA’s mission needs and support the U.S. commercial space communications industry.

Alaska Communications Going 4G LTE

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laska Communications plans to build a 4G LTE – or long term evolution – wireless network this year and begin operating it in phases. The upgrade aims to provide wireless speeds up to 10 times faster than current 3G wireless networks in Alaska, ACS officials said. The company plans to spend $12 million for planned 4G LTE infrastructure.

Grant Supports Fish for School Lunch Study

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he Center for Alaska Native Health Research received a three-year, $1.1 million grant from the U.S. Department of Agriculture to study ways to provide Alaska salmon on school lunch menus. The center is part of the University of Alaska Fairbanks Institute of Arctic Biology. UAF nutrition

www.akbizmag.com • Alaska Business Monthly • September 2011

INSIDE ALASKA BUSINESS researcher Andrea Bersamin will lead the study, called Fisheries to Schools, which aims to find the best ways to connect fishermen and processors who can provide fish for Alaska schoolchildren’s lunches. The study will take place in the Yukon-Kuskokwim Delta.

There are several examples of schools using Alaska fish in school meals, Bersamin said, but this is the first time the idea will be subjected to scientific study. The project is based on USDA’s Farm to School project and “connect kids to the local food system and how to use it,” she said.

The Fisheries to Schools program has three major components: an economic feasibility study, curriculum and program development and an evaluation of the effectiveness of the program, Bersamin said, and could be developed for statewide application, based on study results.

Anchorage Carpool Group Expands

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nchorage Share-A-Ride has expanded from 24 commuting groups six years ago to 61 groups at mid-2011. Four new groups were added between January and April. Most groups commute from the MatanuskaSusitna Borough to Anchorage. Two groups commute within Anchorage, and three groups drive between Anchorage and Girdwood. High gas prices have encouraged Alaskans to consider alternative transportation, according to Anchorage Share-A-Ride officials.

According to the American Automobile Association’s “Your 2011 Driving

Costs” findings, the average cost of owning and operating a medium-sized automobile, traveling an average of 15,000 miles per year is 57.3 cents per mile. For a 40-mile round-trip commute this comes to $22.92 per day, $481.32 per month and $5,775.84 per year, based on commuting 21 days per month. A driving cost calculator is available at http:// muni.org/peoplemover/drivingcost.cfm.

Alaska Carl’s Jr. Eateries Earn Award

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laska franchise operators of Carl’s Jr. earned awards for high volume sales for 2010. Anchorage-based J & D Restaurants Inc. and CJ’s of Fairbanks LLC received the honors at the annual franchisee meeting for Carl’s Jr. and parent company CKE Restaurants Inc. in Las Vegas. The Alaska eateries earned the highest average unit volume award in categories related to comparable markets and are among more than 1,200 Carl’s Jr. restaurants in 42 states and 20 countries.

Report Assesses Alaska Broadband Use

Another key finding showed Alaska businesses with high-speed Internet connections report median annual revenues $100,000 greater than businesses without broadband. According to the study, Alaska businesses pay a median monthly price of $74.62 for broadband service. Also, about 5,000 Alaska businesses allow employees to telecommute, using broadband technology to reduce commuting time.

The Connect Alaska program developed a statewide broadband inventory map, which was incorporated into the National Broadband Map earlier this year. Connect Alaska is funded by the American Recovery and Reinvestment Act of 2009. Connect Alaska is a statewide publicprivate partnership working on broadband expansion under a federal grant administered by the Alaska Department of Commerce, Community and Economic Development.

“Findings from this survey help to illustrate the correlation between highspeed Internet adoption and a business’s bottom line,” said Susan Bell, Commerce Department commissioner.

“This will help the task force in its efforts to create a statewide plan for the future and more economic opportunity for Alaska businesses and families.”

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report by a federally funded group shows the extent of broadbandtechnology use statewide. According to Connect Alaska, more than 5,000 Alaska businesses are not connected to broadband technology. Connect Alaska’s study, “Business Technology Assessment,” assessed broadband use in many sectors of the state’s economy.

Anchorage Museum Earns National Award

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he Anchorage Museum at Rasmuson Center received a marketing and public relations materials award from the American Association of Museums. The Anchorage Museum

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INSIDE ALASKA BUSINESS was a winner in the 2011 Publication Design Competition. Anchorage Museum entries earned honorable mentions in the categories of Marketing/ Public Relations Materials and Newsletters for the museum’s “Museum … and more” ad series, “Andy Warhol: Manufactured” ad series, Solo Exhibition ad series and “Pure Experience” tourism ad series. The museum also earned an honorable mention for its Anchorage Museum Today newsletter. The museum was judged in the category of institutions with budgets greater than $750,000. Anchorage graphic designers Lucian Childs and Rachel Gebauer were honored for their work. The award-winning projects reflect rebranding materials developed by Pyramid Communications.

UIC Science Continues Barrow Facility Support

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kpeagvik Iñupiat Corp. Science was awarded a continuing contract with Sandia National Laboratories at the U.S. Department of Energy’s Atmospheric Radiation Measurement Climate Research Facility in Barrow. UIC Science provides technical and management support at the facility, which is a long-term climate- and weathermonitoring facility. Scientists worldwide use research from the Barrow facility to study atmospheric changes.

UIC Science employees provide on-site coordination, equipment and instrument servicing, logistical support such as equipment relocations, and other related tasks associated with placement and retrieval of scientific instruments

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for field measurements. UIC Science has been involved in this project since the mid-1990s. This one-year contract, which tops $625,700, has four one-year extension options.

Firm to Design New Pratt Museum

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fficials from the Homer-based Pratt Museum chose architectural firm Livingston Slone of Anchorage to design the new museum building.

Tom Livingston and Joe Abegg will be the primary architects on the building project. The firm has designed other museum facilities, community and cultural centers, and other public facilities, including 18 museum projects. Public design meetings are planned for fall.

“The Pratt Museum is the jewel of Homer and a source of great pride to Alaskans,” Livingston said. “Livingston Slone is honored to assist this National Merit Award-winning museum in designing their new facility.”

Specialized Therapy Helps Cancer Patients

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ind Matters Research LLC in Anchorage began offering its therapy services to cancer patients and survivors in mid-summer. Dr. Lyn Freeman, founder and owner of Mind Matters, spent seven years to research and develop ENVISION Behavioral Medicine Intervention. The therapy uses the brain’s imagery-based function to advance physical and emotional healing. Therapies include imagery-driven

biofeedback to assess and change heartrate variability, mind-mapping practices, and art, storytelling and sound to effect mood state. Methods used depend on each patient’s symptoms and response. ENVISION was originally tested on breast-cancer survivors and is now available to other cancer patients.

According to Freeman, the therapy can help cancer patients and survivors overcome effects and symptoms including memory and focus problems, sleep disorders, depression and post-traumatic stress disorder.

Freeman began work on the program in 2005 when she submitted a Small Business Innovation Research Phase I proposal to the National Cancer Institute and received a $145,000 grant.

She subsequently received a $1 million Phase 2 grant. For more information, visit www.mindmattersresearch.com.

Firm Buys New Crawler Crane

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TG Inc. of Anchorage added a new crawler crane to its fleet in midsummer. The new Liebherr LR 1600/2 lattice boom crawler has a heavy-lift capacity of 600 metric tons. STG officials call it the largest crawler crane now based in Alaska. The new crane joins the company’s fleet of more than a dozen crawler cranes. The new crawler crane has a tip height of 354 feet. The crane’s first job was installing gas turbines at Chugach Electric Association’s new Southcentral Power Plant. STG officials believe offering the new crane will allow construction project leaders an Alaska option rather than paying for a similar crane to be dispatched north from the Lower 48. ❑

www.akbizmag.com • Alaska Business Monthly • September 2011

VIEW

FROM THE

TOP

COMPILED BY PEG STOMIEROWSKI

Sandy Baker, CEO

Golden Heart Administration Professionals

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certified woman-owned small business started by Sandy Baker, Golden Heart Administration Professionals opened in Fairbanks in October 2003. Since then, GHAP has expanded from three to 12 employees, offering billing, bookkeeping, government contracting and other administrative services to businesses in Alaska. Baker, whose background includes medical office management, bookkeeping and payroll, decided to open her own business doing what she enjoys, yet allowing more flexibility for family time. She has now spent two decades in business support services.

FLEXIBLE GROWTH: GHAP, which started as a medical billing service, provides bookkeeping and administrative services to a variety of clientele. While we serve primary and urgent care providers, therapists and substance abuse counselors, orthopedic and general surgeons, and optometrists, our clientele also include such nonmedical professionals as jewelers and appraisers. Whether training front-office employees, reviewing routine office forms, assisting in developing procedure manuals, or aiding in license renewal, we customize our services to meet our clients’ needs.

BILLING & CODING: Medical billing can be a maze. Given the state of the economy and the changing nature of health care regulations, staying current with coding and billing rules is essential. Our billing department conducts extensive inhouse training. We also send employees to receive continuing education. We pride ourselves on keeping up with changes and assuring compliance.

24-HOUR TURNAROUND: Many medical providers are deciding to outsource billing functions to other professionals who have the time, the team and the resources to ensure their billing is done efficiently and accurately. Our team offers 24-hour turnaround for billing out charges and posting payments for deposit. We provide a daily courier run to client offices to pick up and deliver paperwork, to the post office for client mail, and to various banks.

©2011 Chris Arend

GOOD GRACES: The inhouse auditing procedures we developed and our staff teamwork have significantly diminished the need for sending accounts to outside collection agencies. Maintaining our billing collection rates in the high-90th percentiles during the downward slide of today’s economy has become a source of pride for the staff. Acting as advocates for both providers and patients, we have developed relationships with such third-party payers as insurance companies and public agencies. They have come to value our expertise.

EMERGENT FRONTS: Attention to marketing and employee training are keys to our growth. We are currently focusing on the lengthy process of certifications and training to prepare for small government contracts. We are also furthering our medical biller trainings and certifications. One day we’d like to own our own building, to have space available to teach, test and certify medical billers on site.

CARVING OUT OUR EDGE: In the competitive world of medical billing support, we strive to customize services and always be honest, personable, knowledgeable, sincerely interested in our work and open to new ideas or requests. We are conscious of the need to follow up on even the smallest details.

Sandy Baker

CROSS-TRAINING: While our staff members are assigned responsibility for specific client accounts, we use a team approach to ensure completion of daily work.

Cross-training is essential in efficiently serving clients and patients as well as other staff members. Development of knowledge and resources helps each employee build his or her inner strengths and goals. GHAP benefits as a whole from their individual growth. There is always room to grow. ❑ www.akbizmag.com • Alaska Business Monthly • September 2011

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RIPE

FOR

REDEVELOPMENT

New anchors, live entertainment Photo by Jeffery Cutler

Northway Mall is banking on new anchor tenants, fresh paint, landscaping and colorful murals to bring new customers.

One of those new anchors is Burlington Coat Factory, which is working on a build-out of 60,000 square feet in the former Gottschalks’ space.

BY GAIL WEST

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ucked away at the east end of Anchorage’s Sixth Avenue as it turns into the Glenn Highway sits one of the city’s oldest shopping malls – the Northway Mall, which first opened its doors in 1980. Since that time, many malls have been built across town and many have “morphed” into things they weren’t initially built to be. The University Center, once a premier mall, is now home to parts of the University of Alaska Anchorage, where UAA offices mix with an organic grocery and a furniture store.

REI helped save the Northern Lights Mall when it was in decline, and the Anchorage School District populates the Boniface Mall.

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NEIGHBORHOOD CUSTOMERS Through the years, Northway Mall stores have ebbed and flowed, come and gone. Competition has been heavy, particularly with two new malls opening relatively nearby – Glenn Square Mall and Tikahtnu Commons. Through it all, however, the mall has persevered and is, once again, looking forward to a resurgence in popularity. Mall owners are targeting the neighborhoods from which it draws the mall’s primary customers, and have recently brought an Anchorage icon on board to manage the mall. Mao Tosi, former pro football player and founder of Alaska Pride youth programs, has brought his

enthusiasm for his hometown and his neighborhood to his new job.

“The mall has not had many changes for a while,” Tosi said, “but that’s changing. When Security National Properties hired me, they said: ‘Mao, this is your home, build it.’”

That’s just what Tosi intends to do.

“Without having to actually build things,” Tosi said, “we can give the mall what it needs – a fresh coat of paint, artwork, murals, landscaping and cultural opportunities. Our mall is different because of these things, and we provide free entertainment on weekends. My charge is to bring customers to the mall, and that’s been my focus.”

www.akbizmag.com • Alaska Business Monthly • September 2011

The mall, with 356,582 square feet of leaseable space, is nearly 100 percent full, Tosi said. However, there are two new anchor tenants coming in the near future to join long-term anchor Safeway.

Burlington Coat Factory is currently finishing its construction phase – 60,000 square feet in the old Gottschalks space – and Planet Fitness would lease about 20,000 square feet with plans to bring in 6,000 to 7,000 members.

“That would make it the largest Planet Fitness in the state,” Tosi said.

OUTSIDE OWNERS Security National Properties purchased the mall more than 10 years ago, and today it is part of a string of malls and other retail properties that stretch from Mississippi and Texas through Iowa and Kansas to Michigan and Montana.

According to its website, the firm’s philosophy is to “acquire, develop and manage commercial assets for longterm value.”

As an affiliate of Security National Master Holding Company LLC, the website says, SNP acquires underperforming commercial assets, including properties with recent vacancies, poor management teams or depressed market conditions. Steps the company takes to redesign and remarket those underperforming assets include using their existing relationships with larger retailers to bring in anchor tenants, aggressive leasing and cost-cutting measures, making necessary capital improvements, paying down debt rapidly to create a portfolio of free and clear assets, and reinvesting excess cash flow into additional acquisitions or for debt reduction.

The Security National holding company owes its beginning to the failure of an Alaska bank in 1987, when founder Robin Arkley purchased the bank’s mortgage loan portfolio.

“He loves Alaska,” Tosi said, “and he owns several other properties around Anchorage.”

LOCAL MANAGEMENT Tosi said he plans to help SNP renew the mall by connecting it to the communities in which it’s located.

“I’ve only been in this job a few months,” Tosi said, “but my focus is all about the community. I believe this mall has a lot of opportunity to make

Tosi said he plans to help SNP renew the mall by connecting it to the communities in which it’s located. an impact. Our demographics are very much a variety, and they continue to grow and change in the communities around Mountain View. We’re also trying to figure out how to connect and to bring others from around the city.

That’s one reason we’re building beautification projects and hosting entertainment here at the mall.”

Tosi added that he thinks owners of the variety of shops in the mall are seeing the business they want to see, and it’s a wide variety covered under the single roof. From the catering-toeveryone grocery store at one end, the mall includes shops that cater to many – both minorities and others – within Anchorage’s municipal boundaries.

“We want to make our mall different through our arts and entertainment,” Tosi said, “our family workshops and family events. I think this is something Alaskans want to see, and we want to provide a way – a stage – for them to show it off.

“I grew up here, too, and this job gives me the opportunity to help – not just the mall, but the community,” Tosi said. “I see an opportunity to provide jobs here at the mall, and to better the lives of others – to give some people chances they may not otherwise have.”

Connecting with the community in every way he knows, Tosi, said he wants to use his credibility and his excitement to excite the community.

“I bring trust, credibility and a passion for the work I do,” he said.

SNP is banking on Tosi’s experience, knowledge and draw in the community to help revitalize the Northway Mall, and is giving him many of the tools to make it all happen, including new anchors with wide community appeal.

Cafes, gourmet coffee shops, beauty salons and barber shops, clothing, groceries, nutritional supplements, jewelry and much more – the mall owners and Tosi hope this mix will draw customers from all corners of the Municipality and ❑ well beyond.

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REGIONAL REVIEW

BY TRACY BARBOUR

The North Slope Where oil is king

Photo by Judy Patrick

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he North Slope is one of the most distinctive and impactful regions in Alaska. Virtually a flat, treeless plain, it stretches nearly 90,000 square miles, from the foothills of the Brooks Mountain Range to the Arctic Ocean and west from the Canadian border to the Chukchi Sea. For all its vastness, the developed portion of the “Slope” encompasses slightly more than 300 square miles.

Alaska’s North Slope is an isolated and sparsely populates area. The region’s North Slope Borough is home to about 9,400 people. Many of these residents live in Barrow, with the rest inhabiting the villages of Wainwright, Point Hope, Nuisqsut, Atqasuk, Anatuvuk Pass and Point Lay. But the most notable place in the region is Prudhoe Bay, a census-designated place with about 558 square miles and 2,200 people. The Prudhoe Bay CPD is located about 400 miles north of Fairbanks and 650 miles north of Anchorage.

The North Slope Borough has the distinction of being part of the Arctic National Wildlife Refuge (ANWR)

Deadhorse view toward the west. Prudhoe Bay Hotel is on the left of the photo, Nabors Operations Center on the far right. The southern end of Lake Colleen is also on the right.

and the National Petroleum PreserveAlaska (NPR-A). The 19-million-acre ANWR occupies northeast Alaska, while the 23-million-acre NPR-A sits in the western Arctic. These pristine areas represent a tremendous amount of protected lands and are often the source of controversy by those for and against oil and gas exploration.

Prudhoe Bay/Prudhoe Bay Oilfield at a Glance What: Prudhoe Bay is a census-designated place (CDP) located in Alaska’s North Slope Borough. According to the U.S. Census Bureau, the CDP has a total area of 558.0 square miles. Prudhoe Bay oilfield, which is located on the North Slope, is the largest oilfield in North America and is operated by BP with partners ExxonMobil and ConocoPhillips Alaska.

Where: The Prudhoe Bay oilfield is located 400 miles north of Fairbanks, 650 miles north of Anchorage, 250 miles north of the Arctic Circle, and 1,200 miles from the North Pole.

Population: As of the 2010 census, the population of the Prudhoe Bay CDP was 2,174 people; however, at any given time several thousand transient workers support the Prudhoe Bay oilfield.

Impact: Prudhoe Bay is responsible for approximately 40 percent of the state’s oil production. The initial producing area of Prudhoe Bay field has generated more than 12 billion barrels. In 2008, production from the Prudhoe Bay initial producing area averaged approximately 314,000 barrels of oil equivalent (BOE) per day.

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OIL, KING OF THE SLOPE AND STATE If there’s one thing that differentiates the North Slope from all the other regions in Alaska, it’s oil. “It’s about a third of our economy, and its importance cannot be overstated,” says Alaska Department of Labor Economist Alyssa Shanks.

Prudhoe Bay – the largest oilfield in North America – is responsible for nearly half of the state’s oil production. Alaska historian Terrance Cole described Prudhoe Bay’s significance this way: “The wealth generated by Prudhoe Bay and the other fields on the North Slope since 1977 is worth more than all the fish ever caught, all the furs ever trapped, all the trees chopped down; throw in all the copper, whalebone, natural gas, tin, silver, platinum, and anything else ever extracted from Alaska, too. The balance sheet of Alaskan history is simple: One Prudhoe Bay is worth more in real dollars than everything that has been dug out, cut down, caught or killed in Alaska since the beginning of time.”

In addition to the oil and gas industry, the North Slope’s economy is driven by

www.akbizmag.com • Alaska Business Monthly • September 2011

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government jobs. The professional and business services sector is also an important piece of the economic pie, but it’s tied to oil and gas, according to Shanks.

“It is about 9 percent of the wage and salary employment in the North Slope Borough, compared to natural resources at 61 percent,” she says.

Workers in the oil and gas industry make some of the highest wages in the state, earning almost $170,000 annually. But a large number of the North Slope’s workers don’t actually live there, creating an interesting dynamic for the area. “The impact of the high wages is, of course, muted because most of that money leaves the borough,” Shanks explains.

However, government employment helps to compensate for the situation.

“The well-funded local government has a very real impact on the area by being able to hire lots of employees and pay relatively high wages,” Shanks says.

With its rich resources, the North Slope Borough has one of the lowest unemployment rates in the state, according to figures by the Alaska Department of Labor. The most recent unemployment rate available for the borough, as of this writing, was 4.3 percent for May. This compares to 7.4 percent for the statewide rate for May. Only the Bristol Bay Borough had a lower unemployment rate for May, at 2.9 percent.

Employment on the North Slope region has been relatively high for the last three or four years, says Alaska Department of Labor Economist Neal Fried. Fried says the area’s employment growth can’t be attributed to any one factor. However, the North Slope’s employment started to grow with the 2006 oil spill in Prudhoe Bay. We can’t say whether most of the growth is due to maintenance versus development,” Fried says. “When we look at the overall part of the Prudhoe Bay area, it did start seeing significant increases that were turbo charged by the oil spill and maintenance.”

BP AND SHELL CONTINUE INVESTING IN THE SLOPE Since the 2006 Prudhoe Bay oil spill, BP Exploration has made a significant investment to reinforce the integrity of production and transportation systems

16

www.akbizmag.com • Alaska Business Monthly • September 2011

on the North Slope. The company has engaged in a $500 million project to replace the main network of oil transit lines at Prudhoe Bay. Put in service at the end of 2008, the new system includes 16 miles of coated and insulated pipelines, facilities to make the lines accessible for cleaning and inspection devices called pigs; direct injection of corrosion inhibitors; and a state-of-theart leak-detection system, according to BP’s website.

Steve Rinehart, a spokesperson for BP Alaska, says BP has an aggressive and comprehensive pipeline inspection and maintenance program. “We are doing more than 110,000 annual inspections for corrosion under insulation and about 160,000 total pipeline inspections a year (X-ray, ultrasound and visual),” he says. “This is twice as many as in 2005. We have significantly increased the number of inline or “smart pig” inspections. Our spending on corrosion monitoring and prevention has tripled from 2004 to almost $120 million in 2010.”

This summer, BP has been diligently working to enhance its North Slope plants, facilities and pipelines, according to Bruce Williams, BP Alaska vice president of operations. “We’re in the middle of the summer maintenance season, with plants in turn-around and improvements of all sorts under way,” Williams says. “It has taken a huge amount of planning, and hard work.

But when you step back from the details, what you see is a commitment to extend the service life of these facilities.

The North Slope still has enormous resources – and big challenges. The potential is real. I think we will be at this for a long time.”

BP’s goal is to deliver a long-term, sustainable business in Alaska, Rinehart says. The strategy for doing that includes using new technologies to develop Alaska’s known resources; renewing its North Slope infrastructure; ensuring safe and compliant operations; and commercializing the North Slope natural gas.

One example of this long-term approach is BP’s Heavy Oil Pilot Project at Milne Point, which is located about 35 miles west of Prudhoe Bay. At a cost of more than $100 million so far, the company has designed and installed a www.akbizmag.com • Alaska Business Monthly • September 2011

17

Photo by Judy Patrick

Downtown Barrow. Noon, early December.

processing facility and drilled four wells to try to unlock the technology needed to make heavy oil viable in Alaska. The project came online with the first well in April.

“This was an important step, although significant technological and economic issues remain to be addressed,” Rinehart says. “The main goal of the pilot is data collection, not oil production. The heavy oil potential is so big – an estimated 20 billion barrels in place – that even a low recovery rate could yield substantial volumes. With this pilot we are looking for ways to make it happen.”

Meanwhile, Shell Oil Co. is awaiting approval for its proposal to drill exploratory wells in the Beaufort and Chukchi seas. The wells would be drilled about 20 miles off the coast of Northern Alaska. Fried says the offshore drilling wouldn’t have a huge impact in terms of revenues because of its location on federal land. But it would be positive for the region’s employment, and it would ultimately increase the value of the trans-Alaska oil pipeline.

In July, the EPA issued draft air quality permits for Shell’s drilling in both the Beaufort and Chukchi seas. Some people are cautiously optimistic about Shell’s proposal. However, environmentalists say the risks are too great for seals, whales, walruses and polar bears that live in the region. They also caution that proposed drilling could endanger

18

the subsistence of Native communities in the region.

Acting Barrow Mayor Lloyd Leavitt is in favor of offshore drilling. “They’re going to drill anyway,” he says. “Why not work with them. They’ll listen to us and work with us if we give our input.”

According to Leavitt, about 300 people will be coming up to Wainwright to participate in the exploration work. The influx of workers is expected to make the village double in size and have a positive impact on the area.

BARROW, NORTH AMERICA’S NORTHERNMOST CITY With close to 4,600 residents, Barrow is the economic, service and administrative hub of the North Slope region.

Leavitt describes Barrow as a very friendly place with a strong sense of community, closeness and cooperation. Many of the city’s residents have a strong adherence to Inupiat values, according to Leavitt, who was born and raised in Barrow.

In September, Barrow is hosting a cultural fair that will bring all 49 of the area’s ethnic groups together.

“We did that a couple of years ago, and it turned out very well,” Leavitt says. “Everybody comes out, even our elders here.”

Like the rest of the region, Barrow’s economy is driven by oil. Providing services to oilfield operations is an important stream of revenue for many

of the local businesses. Government employment, fishing and subsistence also play a major role in the city’s economic wellbeing. “Subsistence is very important,” says Leavitt, who sits on the federal subsistence regional advisory council. “I still honor my subsistence way of life,” he says. “I take some time off from April 19 to May for whaling and from May to the first week in June for geese hunting.”

After June, Leavitt and many other Barrow residents focus their efforts on catching fish. “Through October, about 99.9 percent of our local people will be fishing and gathering fish to store in their cellars for winter’s use,” Leavitt says.

Tourism is also an important industry for Barrow. Many tourists travel there to see the old historical Birnirk site and watch the array of waterfowls.

Leavitt says: “Visitors come from all over to see and monitor the nesting of all our waterfowl birds. There must be 20 to 30 people here watching the birds now.”

Barrow has a number of important construction projects under way to enhance the city for its visitors and residents. For example, a Samuel Simmonds Memorial Hospital Replacement project is well under way. The new structure will be four times larger than the antiquated original hospital, which was built in the 1960s. The replacement hospital will allow residents to receive CAT scans and many other services locally, instead of having to travel elsewhere for their health care.

“It will be a plus to us here and to the surrounding villages,” Leavitt says.

Barrow will also be getting a larger recreational facility. The Piuraagvik Recreation Center is being expanded to accommodate whaling festivities and other events. The renovated building, which should be completed in October, will be twice the size of the existing one. “Now pretty much the whole community of Barrow will be able to fit in there,” he says.

Residents of Barrow will also be able to take advantage of more affordable and efficient housing – which has been a longstanding need. The city is constructing 20 new single-family houses, ranging in size from 1,100 to 1,500 square feet. This past winter, seven new

www.akbizmag.com • Alaska Business Monthly • September 2011

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ARCTIC SLOPE REGIONAL CORP. DEVELOPMENTS Headquartered in Barrow, Arctic Slope Regional Corp. (ASRC) is the state’s largest Alaska Native corporation. It is owned by and represents the business interests of the Arctic Slope Iñupiat.

ASRC covers eight villages on the North Slope: Point Hope, Point Lay, Wainwright, Atqasuk, Barrow, Nuiqsut, Kaktovik and Anaktuvuk Pass.

Along with its family of companies, ASRC is the largest Alaskan-owned company, employing approximately 10,000 people worldwide. The company has five major business segments: petroleum refining and marketing, energy support services, construction, government services and resource development.

ASRC holds title to about 5 million acres of Alaska’s North Slope.

The corporation’s known resource reserves include the Alpine Oilfield and the Western Arctic Coalfields, which have been instrumental in generating a steady stream of dividends for its shareholders. In April, ASRC declared a dividend of $1,653, a 33 percent

Photo courtesy of ASRC

units were built. Leavitt says: “There’ll be 27 new units by the end of this year.

That’s a lot of housing for Barrow, but we’re still about 50 percent short on housing here.”

There’s such a housing shortage that many Barrow residents share their homes with other family members. Houses in Barrow are typically small, but now larger houses are being built – some even with garages.

Leavitt says Barrow has 212 people on the waiting list for housing units, and there’s pretty much the same problem in the outlying villages.

Leavitt says Barrow could also use a counseling center to help people with drug and alcohol addiction. But it doesn’t look like that’s going to happen any time soon. “That’s not even on the drawing board here,” he says.

“We need to get a government grant, so we can get some assistance for alcohol abuse.”

Other major areas of concern for Barrow, according to Leavitt, include the city’s reliance on federal money, a need to diversify its economic base and vandalism.

Tara Sweeney, senior vice president of external affairs for ASRC.

increase from the 2010 spring dividend.

Last year was one of the most successful years in ASRC’s history, which was no small feat considering the state of the economy in many of the areas in which the company and its subsidiaries operate, according to Tara Sweeney, senior vice president of external affairs.

www.akbizmag.com • Alaska Business Monthly • September 2011

There’s such a housing shortage that many Barrow residents share their homes with other family members.

Sweeney says the $2.3 billion in revenues earned in 2010 was up from about $1.9 billion in 2009 and allowed the board of directors to declare a combined spring and fall dividend of $64 and 26 cents a share – the highest in ASRC’s history. With the distributions in 2010 and the spring “true-up” dividend that was made this year, ASRC has paid out more than $500 million dollars in dividends to shareholders since its 1972 inception. “Much of the progress we saw last year can be attributed to the strategic business decisions the corporation has made over the long-term,” she says.

In 2010, the corporation made some important investments. ASRC Federal Holding Co. acquired Arlington, Va.-

based Mission Solutions Engineering and ASRC invested another nearly $15 million dollars in the Badami Oilfield on the North Slope, raising its total ownership interest in the field to 32.5 percent. “These decisions, like others at ASRC, were guided by our Iñupiaq values,” Sweeney says.

Recently, ASRC made several significant changes in leadership. In April, Butch Lincoln became the corporation’s new executive vice president/ chief financial officer. He has been employed with ASRC since 1997, most recently holding the position of vice president of operations for ASRC. Geri Storer was named ASRC executive vice president and chief of operations; Cheryl Stine was promoted to senior vice president and chief administration officer; and Jeff Kineeveauk, who took over as ASRC Energy Services president and chief executive officer. In addition, Arctic Slope Community Foundation added Sharon E. Thompson as executive director.

“The face of ASRC is changing – and the stability of the new team can be credited to the foresight and leader-

ship of the elders who helped guide this corporation through the Alaska Native Claims Settlement Act and the ensuing incorporation process,” Sweeney says.

“Now, a new generation of leaders is emerging to build on that foundation for the benefit of our growing number of shareholders.”

ASRC has also been working with anthropologist Dr. Patricia Partnow and the North Slope Borough School District on a workbook and teacher guide dealing with a course that includes historical information surrounding ASRC. However, the standardized curriculum doesn’t just look into the company; it also touches on Native American Indian Policy and the Alaska Native Claims Settlement Act. Sweeney says: “The students of today are the leaders of tomorrow, and we wanted to make sure they were educated on just how Arctic Slope Regional Corp. was formed, what factors came into play at the time of incorporation and what role they can play to shape the future of ASRC and even the state. This is a project we’re very proud of and believe has great potential for our shareholders.” ❑

www.akbizmag.com • Alaska Business Monthly • September 2011

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TOWNS

IN

TRANSITION

BY HEIDI BOHI

Wrangell ‘The little town that could’

N

Photo courtesy of the City and Borough of Wrangell

eighboring towns and other communities throughout Alaska often look at the Southeast city of Wrangell with envy. At a time when villages with similar social structures and economic systems try to balance the need for new development with resistance from locals who fear change, this island of 2,400 residents perseveres despite its own challenges, including the collapse of the timber industry there.

“We’re the little town that could,” Mayor Jeremy Maxand says, explaining the economic and cultural transition Wrangell has chugged through since the mill began slowing down in 1994. Since then, the community has reinvented itself by diversifying the economy that is now based on logging, fishing and tourism. Its successes to date, he says, are an example of what can happen when a community is “one giant family” and businesses commit to investing in long-term planning and creating family-wage, year-round jobs so future generations have a reason to return to stay in the community.

“It may seem that we’re lucky, but these accomplishments don’t just fall out of the sky – the things we’re benefiting from today are the result of planning efforts that started in the mid-’90s,” he adds.

FUTURISTIC THINKING While the list of accomplishments is impressive – and growing – still, Maxand says, the community knows it cannot lose sight of where it is going and what it wants to be able to offer future generations in the next few decades. It is this futuristic thinking that is resulting in the completion of large construction projects, downtown revitalization, and developing a business-friendly community that is helping diversify the city and borough economy.

As tourism continues to emerge as one of the promising industries, with

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Heritage Harbor.

the community attracting an increasing number of independent travelers, Wrangell city planners are investing in developments that will improve the visitor experience when they stop during their travels throughout the Southeast Region to enjoy nine out of 10 of the

state’s most popular attractions, including fishing, boating, glaciers, hiking, cultural history, and bear and wildlife viewing. The community also offers visitors a variety of excursions to experience Tlingit culture and see historic petroglyph carvings.

www.akbizmag.com • Alaska Business Monthly • September 2011

“There was a day when we had to honk the horn to get visitors out of the way,” Maxand says of the ’80s and ’90s when major cruise lines stopped in Wrangell. Although it took some time to recover when cruise lines pulled out, in the long run it was best because the town has been able to offer what is unique in the community by catering to smaller groups.

“It’s hard to welcome 2,000 people when our town’s entire population is not much larger than that,” he says. “It’s easier for independents and smaller groups to get a more authentic experience of what it’s like to live in Southeast, and since we aren’t owned by the cruise lines we don’t have businesses that get boarded up in the winter.”

DOWNTOWN DEVELOPMENT The downtown revitalization project is one development designed to strengthen the visitor industry. Ten years in the making, design concepts began taking shape after the city and borough decided to piggyback this improvement with the need for utility, street and sidewalk improvements. Besides being a historical and cultural attraction for visitors, the downtown core is a popular gathering place for locals and was a top priority identified by residents, says Carol Rushmore, economic development director for Wrangell.

The $10 million project started in July and is expected to be completed by the fall of 2012. In addition to reconstructing utilities in the downtown area, the plan includes replacing sidewalks and resurfacing deteriorating roads, repairing and paving the area around the city dock, and adding interpretive signage throughout the downtown area.

The James & Elsie Nolan Center, which also houses the Wrangell Convention and Visitors Bureau (WCVB), opened in 2004 and is one more way the city is growing the industry by promoting the community as a small meeting and convention destination.

Only a two-hour flight from Seattle, Rushmore says that with the facility’s two new meeting rooms, the WCVB is able to market to groups of up to 250 attendees for special events and professional conferences. Charitable

contributions made by locals are another example of the community committing to its vision.

HARBOR PROJECT Wrangell’s 15-acre Heritage Harbor, also 10 years in the making, opened in 2007 and is another development that contributes to the visitor and marine services industries. The $30 million, two-phase project included dredging, building two new breakwaters, pilings, and installing a float system. The harbor has 169 permanent moorage stalls and

an additional 1,500 feet of side-tying capabilities to accommodate vessels up to 200 feet.

Although large cruise ships have not been docking in Wrangell since 2005, private yachters and small cruise ships sailing the Inside Passage continue to contribute to the town’s visitor industry. Harbor improvements will add opportunities for this market segment, along with improvements resulting from the city dock rehabilitation, which will be completed by the end of next year. The T-shaped city dock

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www.akbizmag.com • Alaska Business Monthly • September 2011

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Photo by Greg Martin

LONG-TERM AMENITIES

Chief Shakes Tribal House in Wrangell.

includes moorage for large and small cruise ships, direct access to charter vessels, and lightering areas for loading and unloading passengers.

As part of its efforts to improve port services available to privately owned boats, small commercial cruise lines, commercial fishing boats, and tour excursion operators, the community is also completing the Wrangell Marine Service Center, located on the site that was originally a sawmill in the 1950s before the city and borough bought it from the former Alaska Pulp Corp., the community’s largest employer before the timber industry failed. Today, the

24

service center is regarded as a key source of economic diversification in the community, which will help expand the visitor and marine service industries, provide boat repair and haul-out services, and add new jobs to the community. Services include a 150-ton marine lift, a 40-ton boat haul-out trailer, boat wash-down area, and storage and repair facilities.

“It is recognized as one of the best facilities in the region for boat repair and boat storage, and we continue to see growth of this industry year after year,” which can be attributed to the quality of the facility and the staff that operate it, Maxand says.

Currently, the Wrangell Medical Center is one of the largest employers and economic drivers in the community, employing 64 staff with payroll totaling more than $5 million.

A new medical campus in Wrangell will be home to WMC’s new $27 million critical access hospital and nursing home. In addition, Alaska Island Community Services, a federally recognized community health center, is in the process of completing a $4 million primary care clinic at the same site that will provide more practitioner and administrative space, and larger, updated examination rooms.

Wrangell is one of the most centrally located communities along the Southeast archipelago, giving fishermen easy access to all five species of salmon, halibut, crab, shrimp, and black cod. Over the past decade, the community has invested in the industry to increase the capacity of seafood processing in the community. At the same time, more and more of the commercial fishermen are also processing and marketing their own catch.

Sea Level Seafoods is one of the two largest processors for fresh and frozen markets and has been part of the community for more than 30 years. Trident Seafoods became another significant player when it purchased Wrangell Seafoods for $4.3 million two years ago and helps support the local fishing fleet that includes small day boats and large 200-ton tenders. Trident continues to expand its operations and the city recently invested in a cold storage facility and a belt freezer.

Trident’s decision helped rescue the community. “It positioned us for growth in the seafood industry because a company the size of Trident can weather the ebb and flows of the economy and they share our long-term plan for growth because they see Wrangell as a critical fish processing hub,” Maxand says.

While the timber industry in Wrangell is not what it was in the past, the community has begun rallying around the small mill operators and is looking for ways to more fully develop the “value-added” wood products industry. There are currently two small mill operators on Wrangell Island, with at least two other potential operators ❑ looking to Wrangell.

www.akbizmag.com • Alaska Business Monthly • September 2011

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ince 1972, NANA Regional Corporation, Inc. (NANA) has grown from a small, Kotzebue-based operation to a diverse corporation with businesses and employees around the world.

However, it is a company still firmly rooted in Inupiat culture and values.

As one of the 13 Regional Alaska Native Corporations (ANCs) created pursuant to the Alaska Native Claims Settlement Act of 1971, NANA works to create economic opportunities for its more than 12,700 Inupiat shareholders and to protect and enhance NANA lands, culture and the traditional Inupiat subsistence way-of-life.

Located in northwest Alaska, the 38,000 square mile NANA region lies mostly above the Arctic Circle. NANA owns 2.2 million acres, or approximately 9.4 percent of the 24.3 million acres that comprise this area.

The NANA region is one of the largest unexplored on-shore basins in North America and NANA Regional Corporation is working with its partners to responsibly unlock this potential to the benefit of the corporation’s Inupiat shareholders.

As land owner of Red Dog Mine, one of the world’s largest zinc mines, NANA shareholders know and appreciate the benefits responsible development brings to their region. For more than two decades, Red Dog has stood as a model of responsible development, founded on the principles of consensus, cooperation, and mutual respect between a mining company and indigenous people.

“Red Dog Mine is more than just a mine developing essential minerals,” said Dr. Lance Miller, vice president of Natural Resources at NANA. “It is a mechanism for hope and a catalyst for the northwest Arctic, Alaska and American economies. Development at the mine generates well-paying jobs for our shareholders and represents 73 percent of domestic zinc production. It has, and continues to, provide an economic base for the NANA region.”

In 1991, NANA shareholders voted to enroll those born after the ANCSA cut-off

date as shareholders to the corporation.

“Our shareholder base continually grows” said E.J. Doll Garoutte, vice president NANA Shareholder Relations, “so NANA is actively engaged to ensure we continue to offer opportunities to our shareholders, and are able to invest in the region.”

One such opportunity is the Upper Kobuk Mineral Development project. As part of the project, NANA and NovaGold are working on development of the Arctic Deposit in the Ambler Mining District, and the Bornite property on nearby NANA land. “Development and exploration of new projects will help maintain and grow revenues, jobs and payments to local governments when Red Dog reaches the end of its mine life,” said Miller.

The Ambler Mining District contains deposits of copper, lead, zinc, silver and gold, and the Arctic Deposit is the largest know deposit in the district. Bornite is an underexplored copper deposit.

Skyrocketing energy costs dramatically affect many aspects of life in northwest Alaska. From developing alternative energy projects to multipurpose village buildings to strategic partnerships with local, statewide and federal institutions and īĜĤğ ĜğıĠĭįĤĮĠĨĠĩį

agencies, NANA is tackling energy and economic development issues head-on.

In addition to resource development projects, NANA owns NANA Development Corporation (NDC). Founded in 1974, NDC is an investment management company with a broad range of subsidiaries and affiliates providing an array of services across five business lines: Resource Development, Engineering and Construction, IT & Telecom, Facilities Management & Logistics (Federal and Commercial), Real Estate & Hotel Development.

ƞȽɀΎȻȽɀȳΎȷȼȴȽɀȻȯɂȷȽȼΎȱȽȼɂȯȱɂ˶ ƦƙƦƙΎƪȳȵȷȽȼȯȺΎƛȽɀȾȽɀȯɂȷȽȼ ƨƧΎƚȽɆΎ̸̳ ƣȽɂɈȳȰɃȳ˴ΎƙƣΎΎ̸​̸̶̴̱ ƬȽȺȺ˹ȴɀȳȳ˶Ύ̷̯̚​̛̯Ύ̶̷̳˹̱̯​̯​̯ ƨȶȽȼȳ˶Ύ̸̶̛̯̚Ύ̳​̳̱˹̲​̲̯̰ ƞȯɆ˶Ύ̸̶̛̯̚Ύ̳​̳̱˹̷̵̱​̵ ɅɅɅ˷ȼȯȼȯ˷ȱȽȻ̐ɀȳȵȷȽȼȯȺ ɅɅɅ˷ȴȯȱȳȰȽȽȹ˷ȱȽȻ̐ȼȯȼȯɀȳȵȷȽȼȯȺȱȽɀȾȽɀȯɂȷȽȼ ɅɅɅ˷ɂɅȷɂɂȳɀ˷ȱȽȻ̐ȼȯȼȯȱȽɀȾȽɀȯɂȷȽȼ

A S S O C I AT I O N S

BY TRACY BARBOUR

Alaska Miners Association Mining brings benefits to the state

Photo courtesy of Steve Borell

Executive Director Steve Borell, is to show Alaskans and everyone else the benefits mining can bring to the state and nation.

“Alaska is an incredibly resource-rich state, and it is been badly hampered over the years with lack of infrastructure and a lot of outside meddling,” Borell says. “Many people across this country look at Alaska as their big park, but Alaska has far more than just parks to offer the nation.”

As the country’s largest state, Alaska has about 365 million acres of land.

Borell points out there are 165 million acres of federal land in Alaska off limits to development. “That’s the combined total acreage of New York, New Jersey, Pennsylvania, West Virginia, Ohio, Indiana and Illinois,” Borell said. “When somebody says some particular area of federal land is so important and we can’t afford to see oil and gas drilling there, you have to back up and say, ‘What about the other 165 million acres that are already off limits?’”

OTHER AMA ACTIVITIES

Constantine Metals president Garfield MacVeigh and geologist Tracy Roach discuss drill core at the Palmer Project north of Haines.

W

ith more than 1,200 members, the Alaska Miners Association engages in a variety of activities to promote the interest of the mining industry throughout the state, nation and abroad. A key objective of the AMA is to increase public awareness about the mineral industry and its economic impact on the state and country.

26

In pursuing this goal, the nonprofit AMA works with the State and federal government to promote legislation and relationships feasible for the industry.

It also strives to ensure members of the State and federal Legislature understand mining-related issues and are well informed about what the mining industry is doing.

The AMA overriding goal, says

To help educate the public about the mining industry, the AMA holds a statewide convention in Anchorage each fall and jointly sponsors an annual placer convention in Fairbanks during the spring. Before the conventions, the association typically offers short educational courses on various topics of interest to the mining community.

In addition to its education-oriented initiatives, the AMA monitors political processes to help keep land available for mineral exploration and development. It also strives to insure the restrictions on land and water use are economically realistic and provide a balance between environmental protection and resource utilization.

www.akbizmag.com • Alaska Business Monthly • September 2011

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Some of the mines the group was slated to visit are operated by companies that are active in Alaska. The AMA also planned to visit a coalfired, electric-generation power plant that utilizes Alaska coal from Usibelli Coal Mine in Healy. The tour also included meeting with Chilean mining officials and visiting various mining museums and at least one historic mine area.

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ROLE OF AMA IN ALASKA Established in the 1930s, the AMA is headquartered in Anchorage and has additional branches in key mining areas throughout the state: Fairbanks, Kenai, Juneau, Denali and Nome. The organization has a broad-based membership that comprised of everyone

PARTS

Fugro Tel: 907 561 3478 Email: info-arctic@fugro.com www.fugro.com

www.akbizmag.com • Alaska Business Monthly • September 2011

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from individual prospectors and weekend suction dredge miners to family mining operations, junior mining companies, and biologists and engineers.

The AMA represents one of Alaska’s most prosperous and growing industries. The mining industry has a significant impact on the state’s economy, according to the Alaska Department of Labor. It generated more than 2,100 jobs in everything from engineering and environmental to electrical and construction in 2009. Mining is the state’s second-highest paid industry, next to oil and gas. On average, mining workers earn about $91,000 a year; their counterparts in the oil and gas industry earn close to $170,000 annually.

Earlier this year, the AMA had the honor of seeing the mining industry receive special recognition for its pivotal role in the history of the state. On May 2, Lt. Gov. Mead Treadwell presented the AMA with a proclamation declaring May 10, 2011, “Mining Day.” The tribute was fitting, given the industry’s rich past, significant present and promising future. Alaska

is renowned for its legendary gold rushes at Juneau, Fairbanks and Nome during the 1800s. Since then, mining has expanded to nearly every part of the state and includes six large mines: Usibelli, Greens Creek, Red Dog, Fort Knox, Pogo and Kensington. High-profile projects such as Donlin Creek, Pebble and Lik also promise to unlock extensive reserves of gold, copper and zinc. In addition, there are hundreds of small placer mines helping to provide a livelihood for individuals and families throughout the state.

STRONG DEVELOPMENT SUPPORT The AMA advocates the development and use of Alaska’s mineral resources to provide an economic base for the state. There are many areas in the state that could support large mines in Alaska, Borell says.

However, he adds, mining needs to take place responsibly.

Alaska has more than 190 million acres of federal, State and Native lands open for mineral-related activities and mining. This, along with

rising mineral prices, represents a tremendous growth potential for the industry.

Currently, products from Alaska’s mines are instrumental in feeding the world’s demand for gold, silver, zinc, lead and copper. However, Borell would like to see the state – and country – ramping up mineral production. He points out there is a tremendous need for base metals like copper and iron, as well as “rare earth” minerals. The United States acquires all of its rare earth minerals from China, Borell says, but it needs to be producing these minerals domestically to create jobs in America.

He adds: “If we were providing all of the minerals to this country that this country consumes, there would be a huge amount of mining in Alaska.

There are 20 different minerals that the United States is 100 percent dependent upon from foreign suppliers.

Some of those we may have very little of in this country, but many others we do have, and we should be able to provide them here.” ❑

First Things First At Fort Knox, our top priorities are simple.

Our people.

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Our environment.

We invest in our people, so they are trained to do the best job possible.

We support our community with charitable donations, volunteer hours and local purchases.

We adhere to the toughest standards to protect water and air quality.

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Because at Fort Knox, it’s about putting first things first.

Fairbanks Gold Mining Inc. A Kinross company

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www.akbizmag.com • Alaska Business Monthly • September 2011

kinross.com

OIL & GAS

Oil Industry Innovators Alaska’s challenges forced development of new technology

©2011 Judy Patrick

BY MIKE BRADNER

A rolligon on the North Slope.

I

n the early years, working in the Arctic meant a steep learning curve for oil and gas companies and their contractors. To the unknowing eye, the tundra looked a lot like the plains of central and west Texas, and the caribou dotting the landscape reminded early oil explorers of antelope in country they were more familiar with.

It didn’t take long for the industry to realize the north country wasn’t Texas. The first lesson came when

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the newcomers realized that summer wasn’t the time to “shoot” seismic lines or move drill rigs across the tundra.

What seemed firm soil dissolved when it was disturbed – sinking as the result of warmer temperatures just a few inches down to the frozen soil below. It quickly became soup.

Not only did vehicles and equipment bog down, but the disturbed soil didn’t heal. In fact, the melt usually worsened and the disturbance became

www.akbizmag.com • Alaska Business Monthly • September 2011

a scar that was to last for years. The image of 1960s-era seismic lines etched across pristine tundra, as scars on the landscape became an icon for the environmental movement as it blossomed in the late 1960s – demonstrating a blundering oil industry that shouldn’t be allowed to work in the Arctic.

Alaskans had learned these lessons earlier. The Native Inupiat had the common sense to know moving overland was easier in winter than summer. The mosquitos were gone, too. Although mistakes were made by non-Natives working in the late 1940s to late 1950s in early exploration of then-Naval Petroleum Reserve No. 4 (now the National Petroleum Reserve-Alaska) and in construction in the late 1950s of the Distant Early Warning radar stations along the coast, the non-Natives picked up the cues from the Inupiats.

It was the Canadians who really showed the oil industry how to work in northern Alaska. Nabors Drilling, an experienced Canadian drilling company, brought the first drill rig to the North Slope in the early 1960s. Working for BP and Sinclair, the company demonstrated how the rig, equipment and people could move and do their work safely through fierce winter weather.

It wasn’t pleasant, but it was effective.

The industry quickly learned, however, and working in winter became standard practice. In fact it became the law as State regulators, stung by the deserved criticism from environmental groups, caught up with things and banned cross-tundra travel in summer.

Out of those early experiences came a body of knowledge that now includes innovations that have become standard practice such as the building of ice and snow roads, temporary ice pads built for exploration wells, some of which can be made to last through the summer so that one pad can serve two winters of work.

The drillers learned, but it took a while longer for the pipeliners to get the message. Pipeline builders weren’t on the scene until there was a need for a pipeline, of course, and that came in the late 1960s when the big Prudhoe Bay oil discovery was made. One company, Humble Oil Co. (now ExxonMobil) looked at the idea of transporting North Slope oil by ice-breaking tanker and

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Oil tanker going to refinery near Valdez.

thought it was at first. The initial estimate that the Trans Alaska Pipeline System could be built for $900 million was a real estimate, not just a scrawl on a bar-room napkin. It took a while for the pipeliners to learn about permafrost. Eventually, TAPS would cost $10 billion by the time it was finished, eight years after the first discovery of oil.

©2011 Natalia Bratslavsky

SEARCHING FOR ANSWERS

the test voyage of the SS Manhanttan, specially modified for navigating the Northwest Passage, was a technological feat. It was not a commercial success, however, and a pipeline from the North

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Slope south across Alaska to Valdez was quickly decided on by Humble and its partners, BP and Atlantic Richfield.

Crossing Alaska wasn’t like crossing west Texas, but the pipeliners

Although the pipeliners displayed their ignorance at first about building in the Arctic, they learned quickly, goaded by the urgency of getting TAPS constructed. The solutions they developed with the help of Alaska experts were innovative, and even brilliant. They have served the test of time, and many have exceeded their initial expectations.

The most innovative of the solutions for TAPS was to build about half of the pipeline above ground and to keep the permafrost stable. Pipeliners

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traditionally bury pipelines because they are secure and stable that way, and also out of the way of vandals or sabotage, for the most part. The TAPS engineers first thought of burying the Alaska pipeline for its total length, and that idea was behind the original estimate of $900 million. However, in 1969 scientists in the federal government and the University of Alaska pointed out the impracticality of burying a hot oil pipeline in permafrost. The industry listened and wound up hiring Alaska scientists to develop a solution.

Among them was Hal Peyton, Ph.D., a University of Alaska civil engineering professor, who worked with Alyeska Pipeline Service Co. Peyton showed Alyeska that there could be as much as a 90 percent failure rate with structures improperly placed in frozen soils. Years later Bill Howitt, a veteran Alyeska engineer who worked on the early TAPS design, remembered Peyton saying this: “Unless you balance the thermal equation and take into account the heat balance, Mother Nature will do it for you and you won’t like the result.” Howitt said later: “Once we discarded the rules-of-plumb (in pipeline building) from the Lower 48 and really looked at heat inputs and outputs, it worked.”

There were a variety of solutions eventually developed by Alyeska, but the most radical concept was the aboveground construction, which it called the “unrestrained above-ground design.”

In this design, the pipeline was built above ground and on vertical support and horizontal members so that the pipe could move laterally with expansion and contraction and, as would be vividly demonstrated, earthquakes. The pipe was laid on horizontal steel beams between the vertical VSMs, or vertical support members, so it could move freely back and forth.

“Unless you balance the thermal equation and take into account the heat balance, Mother Nature will do it for you and you won’t like the result.”

– Hal Peyton, Ph.D. Civil Engineering Professor University of Alaska www.akbizmag.com • Alaska Business Monthly • September 2011

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Above-ground pipelines had never been built before except in short sections around refineries and product storage facilities. Doing it on the scale of TAPS was a new idea in the 1970s and in the end, about half of TAPS was built in above-ground sections. This kind of construction explained much of the cost increase from $900 million to $10 billion.

The famous zig-zag design of the above-ground sections of TAPS, now made famous in photographs, was done deliberately to allow for thermal expansion and contraction, which require the pipe to be able to move. “The zig-zags appear random, but they were part of a careful design,” Howitt said in a 1997 interview. There were also vertical variations of the pipe at various points intended to accomplish some of the same purpose, although these would not be as apparent to an observer, Howitt said.

DEVELOPING NEW TECHNIQUES The design was just one of Alyeska’s accomplishments. Actually building it, and properly, was the second. The pipe had to be aligned correctly at

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construction so that it would move according to the plan and be in its expected place when the pipe was filled with hot oil. When constructed, the pipe was never to actually touch the VSMs – at either end of the crossbeam – themselves. “Someone had to figure out where the pipe would be at different temperatures, and all this had to be done before the VSMs were set in place and the pipe tie-in welds were done,” Howitt said. All this was done before computers were commonly available, in a day when most engineers still worked with slide-rules.

There were many other innovations in the TAPS construction, among them development of both passive and active refrigeration systems to keep the permafrost cold at points where the pipe, which carried the hot oil, went from above the ground to underground. The passive solution involved development of special foam insulation installed around the pipe in these transition zones. The foam has worked well. Another system of “active” refrigeration involved adaptation of a conventional technology of pumping brine through

pipe to keep soils cold below buildings and where pipe was laid through very unstable permafrost. This concept was fairly standard, but a lot of people at the time said it wouldn’t work. It did.

Another innovation developed first

by Alyeska and later refined further by companies exploring the North Slope was the use of snow to make a work pad for winter construction. Alyeska did two tests of this concept, one near Tooklik, on the southern North Slope, and the other south of the Yukon River in the Interior, and it worked well. There was no visual evidence of the work pad when the snow melted.

This concept has been further developed to the point that snow and ice pads built for winter exploration wells are insulated to remain intact through a summer season so the pad can be used to support two consecutive winter drilling programs.

MOVING BIG RIGS The list of technology innovations is a long one as oil companies and contractors learned to work in the Arctic. Included among these would be

www.akbizmag.com • Alaska Business Monthly • September 2011

transportation innovations such as the first shipment of a drilling rig by air to a remote site. This was done in 1966

by Alaska Airlines to Atlantic Richfield’s Susie No. 1 exploration well on the southern North Slope, using an adapted military C-130. This proved the usefulness of this versatile aircraft for industrial purposes. In terms of transportation, the development of large Arctic sealift capabilities by Crowley Maritime Corp. in the 1970s was another innovation. Crowley developed a reliable way of moving large industrial cargoes to the North Slope by tug and barge, including very heavy production process modules the size of multi-story buildings, that had been moved elsewhere. Among the challenges Crowley faced was safely navigating around Point Barrow, where the icepack tends to cling until the middle and sometimes late summer.

Another technology breakthrough was the development of vehicles with specialized tracks and low-pressure rubber tires that exerted a low enough pressure on the tundra they could move overland even before the hard freeze

of the North Slope winter set in, or even during the winter without having to build snow or ice roads. This has proved to be even more important as climate change and warming winter temperatures shortens the season when cross-tundra travel can be done without specialized equipment.

Not all the new ideas worked. One, involving the use of hovercraft to move heavy cargo, was tried but proved to be impractical. However, BP is using a passenger hovercraft, which can carry some cargo to support its offshore Northstar field.

Two other significant innovations had to do with the size of the industry “footprint” for drilling and other operations, and disposal of wastes from drilling. Both were in response to unique North Slope conditions.

In the 1970s when the oil fields were first developed, pads for producing wells typically covered 65 acres. Over the years, the companies worked to reduce this with closer spacing of well heads on the pad. When the Kuparuk field was developed in the 1980s, the well pads were reduced to 20 acres

and then to 11 acres. When the Northstar offshore field was developed in 2000, the wells, production facilties and camps had to be consolidated on five acres on a gravel production island. Pioneer Natural Resources developed a similar tight “footprint” on an offshore production island for its Oooguruk field.

Waste disposal technology was also unique to the North Slope. In the 1970s used drilling fluids, or muds, and drill cuttings, mostly rock, were stored in large pits adjacent to the production pads. These, over time, leaked when filled with spring snow melt and rain.

In response, the industry developed a way to inject the fluids and cuttings underground, deep enough that they were permanently sealed off by the permafrost. The old, leaking reserve pits were meanwhile reclaimed.

As each problem occurred over the years, the North Slope companies have been able to meet the challenge with new ideas. As the industry now moves offshore, into the Beaufort and Chukchi Seas, there will be new challenges to test ❑ the ingenuity of engineers.

www.akbizmag.com • Alaska Business Monthly • September 2011

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OIL & GAS

Illustration/photos courtesy of Shell

Artist depiction of an offshore production platform design that Shell may use for the Alaskan Beaufort Sea or Chukchi Sea.

Historical methods still being used

BY MIKE BRADNER

T

he challenges of working offshore in Alaska’s oil and gas industry has led to significant technology advances over the years.

Today most people think of the offshore exploration work planned by Shell, ConocoPhillips and Statoil in the Arctic, in the federally owned outer continental shelf. Many Alaskans may not realize that petroleum companies have been exploring, and even producing offshore oil, for years.

Some examples: Shell and other companies drilled exploration wells in the Chukchi Sea in the early 1990s, with no significant problems. Amoco drilled in the Beaufort Sea OCS in the 1980s with drill ships, as did other

36

companies. There were discoveries, too. Shell made a discovery at its Seal Island OCS prospect offshore Prudhoe Bay, subsequently purchased by BP. It is now producing as Northstar, the first Arctic offshore producing field.

However, the industry’s first lessons in Alaska offshore technology came decades earlier, in Cook Inlet in Southcentral Alaska, where companies faced and found solutions to difficult engineering challenges. These provided valuable learning for the Arctic offshore because the ice, heavy currents, winds and waves, cold and a lot of bad weather were as challenging in Cook Inlet as they would be in off Alaska’s northern coasts.

Interestingly, it was Shell that helped pioneer some of the early Cook Inlet platforms. Today the company is putting some of that learning to work in its planning for the Arctic, with concepts for large offshore platforms in the Beaufort and Chukchi Seas that would be capable of withstanding ice, waves and freezing conditions. Building pipelines to shore are challenges in the Arctic, but there were also challenges in Cook Inlet, where there is heavy currents, tidal action and silting.

ALASKA’S LONG OFFSHORE HISTORY The industry’s track record in the Alaska Arctic offshore is a long one. Union Oil

www.akbizmag.com • Alaska Business Monthly • September 2011

Co. of California built the first ice island for exploration drilling in Harrison Bay in the 1980s, a technological feat at the time. Shell helped develop another approach, building and exploring from artificial gravel islands including Seal Island, now the Northstar field. There were other exploration wells drilled from artificial gravel islands, including “Mukluk,” drilled also in Harrison Bay

by Sohio (now BP). Mukluk has the distinction of setting a record of being the world’s most expensive dry hole.

The Mukluk well itself cost $160 million including the cost of the gravel island, but Sohio and its partners spent about another $1 billion in acquiring the federal OCS leases on the prospect.

Mukluk was also interesting in that the water depth, about 60 feet. That depth is considered the economic limit for an artificial island because of the huge quantities of gravel needed.

There were other discoveries, but they were uneconomic and not developed. Unocal drilled in the eastern Beaufort Sea with a drill ship and made a discovery it called “Hammerhead.”

It was not big enough to be economic.

Arco drilled in the eastern Beaufort Sea in the 1990s on its “Kuvlum” prospect and found oil. Like Hammerhead, it was not a big enough for development.

Conventional drill ships modified for the Arctic were used in the Beaufort Sea and large semi-submersible drilling vessels were used in the Chukchi Sea, but there were also innovations in design and construction of Arctic drilling vessels, notably the Kulluk, a round-shaped mobile structure designed to deflect ice, as well as CIDS, a modified and strengthened tanker that was used in the Beaufort Sea and eventually moved to ice-infested waters off northern Sakhalin, in Russia’s Far East, where it is still being used.

The deeper Alaskan offshore still looked promising but in the late 1980s and 1990s the industry focused also on exploring State and federal waters closer to shore, in places shallow enough drilling could be done from an artificial gravel island. Although it is very close to shore – in fact 2 miles offshore – BP discovered and developed the Endicott field in 1985 as the first true Arctic offshore field.

Endicott involved construction of two

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www.akbizmag.com • Alaska Business Monthly • September 2011

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large offshore gravel islands connected to the mainland by a gravel causeway to support road and pipeline access.

Drilling on an artificial gravel island in shallow water essentially involved an extension of gravel pad-building and road-building techniques used in the onshore North Slope oil fields, except that it was, at first, done in summer with gravel laid from barges at the designed location. Later it would be done in winter with gravel hauled over ice roads from shore. At the island location the sea ice would be cut and removed, then the gravel placed. Enough of an island could be created to allow the exploration well to be sited safely. When the well was finished, the rig was removed and the island effectively removed by the natural forces of waves and current, which eroded the island, causing it to disappear.

NECESSITY, MOTHER OF INVENTION Sometimes unexpected things happen in the Arctic offshore, calling for ingenuity and quick response, and which add to the industry’s experience in working offshore. A case in point came in 1975 when the major companies building the Prudhoe Bay oil field were moving the large process modules needed for the field by sealift barges. The timing was critical in getting barges to Prudhoe Bay that summer, but the ice did not cooperate. The sealift finally made it, but late, and at a time when shore ice was already forming – the barges could not get in to the Prudhoe Bay dock.

The solution, a daring move, was to build a gravel causeway a mile out into the frozen Beaufort Sea to where the barges were stuck. The construction, on an emergency basis, took one month.

The innovation in developing this solution, marshalling people, equipment and the gravel resources, and to build this in the dark and bitter cold of the North Slope winter was a technological feat. The critical learning, however, was in how to build a gravel structure out in the frozen ocean. The modules were moved into location in the field and hooked up, enabling the Prudhoe Bay field to get into production in 1977.

When Endicott and Northstar were built, the first offshore producing fields, there had to be permanent islands that could be protected from the winter ice

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www.akbizmag.com • Alaska Business Monthly • September 2011

the problems of supporting a remote production operation from shore by helicopter and hovercraft and, during winter, an ice-road. There were the environmental challenges of building and producing the first offshore producing field and minimizing impacts on wildlife like migrating bowhead whales, provided learning experiences. All of this provided valuable experience.

ICE OVERRIDE SOLVED

The “Nanuq� oil-spill response vessel, built for Arctic offshore support by Arctic Slope Energy Services, undergoes tests in Valdez.

and other forces. The ability to deal with this evolved in stages. BP’s Endicott field is near shore and inside the protective barrier islands. However, the first Arctic offshore producing field facing the full range of offshorse challenges was BP’s Northstar field. Northstar is six miles offshore Prudhoe Bay in 39 feet of water. It is far enough from shore to be exposed to moving pack ice in win-

ter, a challenge not present at Endicott where the waters are very shallow and the winter ice is shore-fast and stable.

BP’s achievements at Northstar included overcoming the ice challenges in winter, the fury of summer storms, the construction of the first buried pipeline to shore and the safe operation of both the field and the pipeline for more than a decade. There were also

The first truly innovative Arctic offshore engineering design was stimulated by the problem of ice override, which could threaten a drill rig or production facilities on a low-lying gravel island. Surface ocean ice can be moved by offshore storms and winds with huge forces, and there are many instances known of ice piling up and overriding many natural barrier islands along the Beaufort Sea coast and even damaging houses at Barrow, an Inupiat coastal community northwest of the oil fields. Ice override can occur both in summer and winter.

For the petroleum industry, ice wasn’t a serious problem in the years when the

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exploration was done with drill ships in deeper waters because the ships could be moved if the ice moved in. Exploration wells in the shallow near-shore waters inside the barrier islands were protected from moving ice. When BP tackled the first field development farther out, beyond the barrier islands, the ice problem had to be dealt with.

There were actually two problems, the ice override on the island and the gouging of the seafloor by heavy ice “keels,� which could threaten a pipeline. The solution engineers developed for the ice override at Northstar was to build an underwater gravel berm extending out from the island for 50 to 100 feet, and to further armor the outer 75 feet of the island itself, from the island’s working surface to the shoreline.

What the underwater berm accomplished was to cause the moving ice to ground before reaching the island and pile up on itself, which in turn stopped or diverted other ice. The large “rubble piles� built up would, for the most part, provide to be effective barriers to the ice. At its farthest edge the berm is 15 feet below water. At the edge of the island the gravel is built up four feet from the water. The island slopes uphill 75 feet to the base of a sheet metal wall, which protects the main working area for the production island. The working area itself is 15 feet above sea level.

The berms served a somewhat similar purpose in the summer by breaking some, but not all, of the wave action.

However, summer storms have turned out to be more intense and frequent than was believed earlier, and the storm action has caused some erosion of gravel at the island’s edge. The gravel has had to be replaced periodically, such as in 2003 when 30,000 yards of gravel had to be replaced. The wave action was so intense the 2,000-pound concrete armor blocks built around the island itself were lifted and tossed around in the surf.

This caused losses of gravel. Gravel used to reinforce the outer edge of the island was laid in bags covered in fabric, which each bag containing two cubic yards of gravel. The movement of the concrete armor created tears in the bags, resulting in loss of gravel. The solution was to replace the gravel in bags lined with abrasion-resistant geotextile fabric.

www.akbizmag.com • Alaska Business Monthly • September 2011

SEAFLOOR GOUGING SOLVED

907.278.1877

The second problem, seafloor gouging by ice keels, was a problem unique to the Alaska Arctic with its shallow water depths that extend for considerable distance from shore. A solution to this, burying the pipelines, isn’t as simple as it might seem.

Depending on the location, the gouges can be quite deep, so any company planning a buried pipeline to shore from an offshore facility will have to know the possible greatest depth that the ice could gouge along the pipeline route.

Past history is the best guide to this, so companies now do surveys of potential pipeline routes searching for evidence of past ice gouging as well as other hazards. The pipeline burial depth is planned around this. In the case of the relatively short Northstar pipeline, 6 miles from the production island to shore, the maximum gouge that BP could find was 2 feet. The company added an extra margin of safety by burying the pipeline at depths of 7 to 12 feet over the offshore segment of the pipeline route.

The act of constructing a buried pipeline offshore raised its own challenges, of course. BP built the Northstar pipeline in winter with a process that required cutting a trench in the ice, which was mostly stable and shore-fast, from shore out to the island. Earth-moving equipment then had to be positioned on the ice and reach down to the ocean floor, which gradually deepened to 40 feet near the island, to dig the trench. The pipeline was then laid in the trench. All of this had to be done with precision, with the depth of burial, the backfill and sediment composition known with certainty. All of this had to be done in darkness and in frigid Arctic winter temperatures and wind, and it was a first for industry.

This accumulated learning is now being put to use with other offshore projects. Pioneer Natural Resources developed its Oooguruk field with a gravel island in shallow waters a few miles offshore, and a similar gravel production island is now planned

by Eni Oil and Gas for the nearby ❑ Nikaitchuq field.

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www.akbizmag.com • Alaska Business Monthly • September 2011

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AGRICULTURE

Photo by Susan Sommer

ALASKA FOOD CHALLENGE Eating local for a year Urban laying hens are quiet.

BY SUSAN SOMMER

WHY EAT LOCAL? Whether omnivore or vegan, knowing where their food comes from and what’s in it is the number one reason given by Alaska-food fans. Keeping money in the local economy, and meeting the farmers, fishers and ranchers are also cited as important. Other factors are freshness, superior taste and reducing their environmental footprint.

For some, eating local is a tradition that offers a strong sense of connection. Lifelong Alaskan Eowyn Ivey of Palmer says: “It’s a part of our lifestyle and family tradition. It makes me feel more connected to the place, both in harvesting and eating local foods. We

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Photo by Susan Sommer

W

hat does it take to eat locally produced and grown food for one year in Alaska? Plenty of residents enjoy moose, fish, wild berries and veggies during summer, but what about dairy, grains and access to Alaska foods year-round? How many people would give up coffee? Supporting the local food movement is gaining popularity in Alaska, as evidenced by a diverse group of optimists involved in the Alaska Food Challenge, a grassroots collaboration formed over several evenings of cold-winter-night discussions about eating locally for a year.

The Challenge kicked off June 21, summer solstice, representing a good time to make changes. The group is informal but meets regularly, and welcomes an array of individual goals, many of which are personal – for better health or a personal challenge – but some are aimed at changing Alaska’s basic food supply chain.

Cooking fresh moose ribs over a beach fire.

go hunting, fishing, berry picking. We grow our own garden, and as much as possible purchase local foods at the grocery store. I think it’s an important piece in understanding and appreciating the natural world, and I want to pass that on to my children.”

While individual reasons vary widely for choosing Alaska foods, statewide entities have been focusing on food security in recent years. It’s estimated that 95 percent of the state’s food is shipped here from thousands of miles away. A major disruption to transportation could quickly leave local larders running low.

Carol Lewis, dean of the University of Alaska Fairbanks School of Natural Resources and Agricultural Sciences and director of the Agricultural and Forestry Experiment Station, says legislation sup-

porting a food security research project is “absolutely a critical piece if we are to move toward a secure food supply in Alaska.” Funding for this remains scarce.

Alaska is still struggling with a definition of food security, says Lewis. She envisions production of foods suited to Alaska’s climate, including using extended season growing technology at all levels. Lewis says distribution is also part of the equation, “including marketing that is appropriate to specific locations. For example in Delta and Fairbanks that might look like a typical Midwest system with food going to brokers or wholesalers and then into retail outlets as well as food sold by CSAs (community supported agriculture) and farmers markets or smaller retail outlets and cooperatives. In rural Alaska it might look quite different.”

www.akbizmag.com • Alaska Business Monthly • September 2011

a healthcare “ Managing enterprise as diverse as ours in bush Alaska can be quite a challenge.

Thanks to our team at Parker, Smith & Feek who provide exceptional expertise supportive of our unique business model.

“

Coryee Hamons, Director of Risk Management Yukon-Kuskokwim Health Corporation Bethel, Alaska

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Photo courtesy of Sitka Local Foods Network

red meat and root vegetables throughout the year in the Anchorage area, but offering fresh local greens in a co-op during winter is tough. Attempts have been made at offering year-round produce; a company growing micro greens for sale in Anchorage in 2010 closed its doors for financial reasons after a short-lived, yet much celebrated, stint.

Demand is there. Filling it efficiently is the hard part.

FEAST OR FAMINE?

It also is important to have the capability to process and store vegetables and livestock, as well as to bring in supplies necessary for food production, Lewis says.

UAF has recently conducted a statewide survey to update information about Alaska-produced and -grown foods. It’s the springboard for a larger goal: to help Alaska’s food producers meet the growing demand by “locavores,” those who eat as much local food as possible.

And whether they know it or not, kids are getting in on the locavores movement, too. The State’s Farm to School program works toward more local foods in school lunches, says Johanna Herron, program coordinator. “The Mat-Su school district uses all Matanuska Creamery milk in their schools. Quite a few districts purchase local baby carrots.” she said.

SCATTERED RESOURCES Busy schedules prevent many people from buying farm-fresh eggs at one location, organic chicken at another, ripe produce at a farmers market and berries at a U-pick. One-stop shopping at large chains such as Fred Meyer, Carrs/ Safeway and WalMart offer plenty of edible variety, but other than potatoes and carrots in the bins and Matanuska milk in the coolers, Alaska-grown or produced food is not as abundant as many would like.

“I would like to see local grocery

44

stores get in on the Alaska Food Challenge by setting up a display featuring local foods,” says Eagle River resident Julie McDonald, an Alaska Food Challenge member.

Farmers markets during summer help fill the gap. CSAs are growing in popularity among Alaskans; the State of Alaska’s Alaska Grown Source Book lists 11 CSAs and five U-pick farms statewide.

But there is no one-stop shopping for all Alaska foods. Yet. One Fairbanks store, however, has made a successful start. HomeGrown Market focuses on meats, but also carries produce and dairy. To anyone who says buying local is too expensive for them, owner Jeff Johnson says: “After you consider the amount of waste from spoiled produce, or the chemicals that are put in or on the meat, the cost becomes very even. You get what you pay for.”

Johnson takes pride in knowing his suppliers personally and providing their fresh, healthy products to his customers.

A similar effort at starting an allAlaska food co-op is under way in Anchorage. Mary Ernsberger, a Challenge member, and others are researching how best to go about opening what they are calling the Fresh from Alaska Food Co-Op. “We really need more volunteers that have time to do the outreach,” Ernsberger says, and added that it’s easy enough to find local dairy, seafood,

Photo by Susan Sommer

Jonathan Cox is the lead gardener at Sitka’s St. Peters Fellowship Farm.

The question looming for those planning to eat close to 100 percent Alaska foods for the year-long Alaska Food Challenge is this: How can I give up my favorite foods? Not surprisingly, the two items that many agree would be the hardest are not foods at all, but drinks – coffee and alcohol. Some Challenge members plan to try brewing their own

Alaska A l k F Food dR Resources Alaska Food Challenge Group: http://akpermaculture.ning.com Alaska Food Challenge: open group on Facebook Alaska Cooperative Extension Service: www.uaf.edu/ces Alaska Community Agriculture: www.alaskacommunityag.org Alaska Farmers Market Association: www.alaskafarmersmarkets.org Alaska Pioneer Fruit Growers Association: http://apfga.org State of Alaska, Dept. of Natural Resources, Division of Agriculture: http://dnr.alaska.gov/ag/index.htm Farm to School Program: http://dnr.alaska.gov/ag/ag_FTS.htm Alaska Food Policy Council blog: www.alaskafoodpolicy.blogspot.com FoodRoutes: www.foodroutes.org Community Food Security Coalition: www.foodsecurity.org

www.akbizmag.com • Alaska Business Monthly • September 2011

beer, though it’s still unclear whether Alaska-grown barley (there are two types – animal grade and human grade) will work as an ingredient.

Coffee, it seems, is the sacred cow.

Teas made from dried Alaska plants don’t contain caffeine, and neither does dried, ground dandelion root, which can be brewed through a filter for a hot drink that tastes remarkably similar to coffee. But it’s not quite the same.

The solution, for most, is to buy locally roasted coffee beans.

Other basics not produced in Alaska are salt and sugar. Honey from local bees can replace sugar. Dried seaweed crumbled into a sweet treat that calls for a pinch of salt may or may not give it a “fishy” taste. Challenge devotees, though, are game for trying new ways of pleasing their palate.

Saskia Esslinger, de facto organizer of the Alaska Food Challenge, says she plans a few exceptions such as salt, baking powder and cheesemaking cultures, none of which are available locally and which have a small food carbon footprint. As for how a mostly Alaska foods diet might affect

her health, Esslinger says she and her husband “will be eliminating processed foods from our diet, as well as refined flour and sugar. I am excited to break my dependence on these items.”

When asked why she’s doing this, Esslinger says, “There are so many (reasons), but the main one is just to prove that it can be done. To change people’s perception that Alaska food is limited in quantity or quality. The point isn’t just to survive it, but to flourish in it, to demonstrate the abundance that is all around us. To discover new alternatives and open up new markets for Alaska products. We hope this will be a catalyst to strengthen Alaska’s food system so that more of our food dollars stay in Alaska and we are more food-secure should energy prices continue to rise or a natural disaster should happen.”

Eagle River resident Cindee Karns is more representative of others taking the Challenge. She says she’s “not going to be a purist.” She reaps plenty of produce from her mountainside gardens, and harvests moose, salmon and halibut. Karns estimates less than half the foods she and her husband eat now

are from Alaska sources, a common estimate among Alaska-food enthusiasts. Her goal in the Challenge is to make an economic impact by keeping the money local and increase demand for, and hence supply of, Alaska foods statewide.

Being an agent of change is an uphill battle. Every time she gets an espresso now, Karns asks if they are using local milk. “They kind of look at me and say Costco’s cheaper,” she says.

Eating locally is not a new concept, but rather a return to human history’s roots. For many Alaska locavores or those who’ve become “locavorecurious,” Barbara Kingsolver’s book “Animal, Vegetable, Miracle: A Year of Food Life” was a key inspiration; reading it emphasizes how disconnected most Americans are from their food sources. Alaska Food Challenge members seek to explore a similar adventure in a much harsher environment.

Though a handful of people eating locally sourced foods for a year might not immediately affect the way Alaska’s food supply chain functions, it might very well plant the seeds of change. ❑

www.akbizmag.com • Alaska Business Monthly • September 2011

45

BUSINESS BASICS

BY ERIC BRITTEN

Strategy Your critical component to success

M

cKinsey and Co. recently completed its latest “Global Survey on Governance.” In their analysis, McKinsey highlighted an interesting anomaly when comparing the 2011 survey results to those from the same survey taken three years previously. In the 2008 survey, corporate directors said they wanted to increase the amount of time their boards spent on strategy development.

In this year’s survey, those directors said their boards now spend slightly less time developing strategy than they did three years ago.

These directors know they should be spending more time working with management on strategy. Yet, in three years, which included the time before, during and after the global financial crisis, the amount of time actually spent working on strategy slightly decreased.

WHAT ABOUT YOU? You probably didn’t respond to McKinsey’s survey, but you may very well be a board member, an executive, a senior management team member, a manager, a large or small business owner or even a sole proprietor. Are you spending enough time on strategy development? My guess is your answer may be the same as those who did answer the survey. You know you need to spend more time doing it, but you’re not.

Developing strategy is about determining what your organization will do and how you will do it. It’s about how you differentiate your products or services from others who may offer similar goods and services. It’s about your unique value proposition to your customers or clients. It’s about adjusting your business to the changes you see coming in the market; changes you

46

Eric Britten

forecast in your customer’s needs or habits; changes in technology.

Tactical organizations develop and execute operating plans effectively.

They can change quickly and react to a crisis or emergency almost without missing a beat. They are great responders, often good team players, quick to react, quick to quell a crisis, and often operationally excellent.

Strategic organizations know that change is on the horizon and what the change is likely going to be. They effectively plan how they will change what their organizations do to adapt or capitalize on the change. These organizations innovate well when they see the status quo will no longer work.

INTEGRATING EXCELLENCE The problem with being too good tactically is that management may be reacting quickly to change in the near-term at the expense of making poor decisions for the long-term health of their organizations. Conversely, being too strategically focused might mean that

an organization’s ability to execute on well-planned strategy may be slow, ineffective or cause short-term organizational gridlock. The secret to a well-run organization, then, is to possess both strategic and tactical excellence and to be able to integrate them.

My observation has been that more organizations are tactical. They get the job done from day-to-day, but may find themselves stuck when faced with unforeseen changes in their market, demand, technology or regulatory environment. They may suddenly realize there is a need to innovate or automate, but they may not be prepared for it. The results of the lack of good mid- to longterm analysis, planning and strategy may result in a sudden loss of margin, profitability, market or competitiveness, as well as an increasing number of missed opportunities.

You don’t have to be a Fortune 500 corporate director to know that a good organizational mid- to long-term strategy is critical to success. Planning can be time consuming, but it will save time in the long run. Without a strategy, you’re often sitting around thinking of what to do next. That can be costly, frustrating and a huge waste of resources. Take the time to map out what you want your business to do and how you want to do it. It’s so much easier to spend the time thinking about and creating your strategy beforehand so that you are prepared to make good ❑ decisions when you need to.

About the Author Eric Britten is president of Britten & Associates LLC, a management consulting firm based in Anchorage. Britten can be reached at 907-440-8181.

Additional information is available at: www.BrittenAssociates.com.

www.akbizmag.com • Alaska Business Monthly • September 2011

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H R M AT T E R S

BY ANDY BROWN

Total Compensation

©2011 Chris Arend

More than green

Andy Brown

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mployee compensation is a problem every employer and HR professional must deal with and the solution is rarely as simple as writing out a paycheck. Part of this problem stems from a misunderstanding of true wages or makes a total compensation package. Compensation is more than just the gross income on a pay stub or the net amount of a direct deposit. It includes a wide variety of factors and creativity is key to structuring an effective compensation system.

Two main issues with compensation include the concept of equity and actual identification. They are not the only issues, but are the two I find the easiest to discuss. Both are complex, but the basics are not difficult to understand.

Equity is the principle that wages are fair, both within an individual company and in relation to the market in general.

Wage equity within a company is called internal equity; market fairness is external equity. An effective compensation system has elements of both and both have their challenges.

48

Internal wage equity is easily destroyed when salaries are not monitored or when workers are in high demand; the common types of internal inequity are compression and inversion. Compression is when the wage of junior, less-experienced employees creeps up on or advances faster than the wage of senior more-experienced employees. When junior employee’s wages surpass the more-experienced employees, inversion occurs. These two problems will destroy morale because all sense of fairness vanishes.

Loyalty and dedication lose value and performance falls dramatically while turnover increases. They are not easily fixed; so the best solution is prevention, which is done by monitoring wage rates.

External equity is maintained by using salary surveys. These surveys can be as broad or narrow as you choose.

Individual position, industry, regional and even national surveys are common.

The challenge is finding a valuation for a specific job because accurate salary surveys are as much an art form as a science. The accuracy of any given survey is not based on title, but rather job description. The office manager in company A might actually manage five to 10 staff while in company B, they act alone.

When looking for a salary survey, be prepared to spend a few hundred dollars for an individual position survey and tens of thousands for a large, comprehensive private survey. The government also provides a phenomenal amount of wage information as well. Government wage information is free but usually about a year less current than private sources – although with new technologies, this is getting better. The larger issue with government information is that the sheer volume of information combined with

governmental bureaucracy always makes it more difficult to find exactly what you want.

When I talk about employee compensation, I understand perks don’t pay bills. The right amount of cash is vital to a good compensation package; but employers frequently ignore other options such as in-kind (meals vouchers, or other goods), or perks like a company car. Actual cash compensation is also typically limited only to salary when you can use a bonus structure to enhance the bottom line by reducing fixed costs. Bonuses can also be used to increase performance by tying a portion of the bonus to specific benchmarks.

Other benefits like extra vacation days, alternate work schedules or parking spaces can also be considered part of a compensation package. In order to find out what an employee wants, engage them in discussions about what they value – time off, a mini-fridge at their desk, etc. Engaging the employee in their compensation creates motivation and buzz in an office and when times are financially tight buzz can ❑ make all the difference.

About the Author Andy Brown, J.D., SPHR, a labor and employment attorney who grew up in Alaska, left his law practice in the Lower 48 to return to Alaska as a senior consultant with The Growth Company Inc. Brown has more than 16 years of broad-based human resource experience, including legal compliance, compensation, salary surveys and collective bargaining agreements. Brown has extensive investigative experience and worked as an investigator for both the U.S. Army and the State of Utah Department of Workforce Services

www.akbizmag.com • Alaska Business Monthly • September 2011

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Wolk & Associates Â&#x160;Â&#x2021; Â&#x2018;Â&#x201D;Â&#x2013; Â&#x2018;Â&#x2C6; Â?Â&#x2026;Â&#x160;Â&#x2018;Â&#x201D;Â&#x192;Â&#x2030;Â&#x2021; Â&#x2021;Â&#x17D;Â&#x2021;Â&#x201E;Â&#x201D;Â&#x192;Â&#x2013;Â&#x2039;Â?Â&#x2030; Í?Í&#x2DC; Â&#x2021;Â&#x192;Â&#x201D;Â&#x2022; Â&#x2018;Â&#x2C6; Â&#x2021;Â&#x201D;Â&#x2DC;Â&#x2039;Â&#x2026;Â&#x2021;

Helping Out Cargo shipments through the Port support more than 250 villages through fuel, cargo and dry goods. The Port also provides 100 percent of the jet fuel for Joint Base Elmendorf Richardson (JBER) and two-thirds of the jet fuel used at the Ted Stevens Anchorage International Airport. The Port is designated as one of only 19 Department of Defense National Strategic Seaports. As a testament to its longevity, the facility has remained operational through the Good Friday earthquake of 1964, numerous military deployments and weekly cargo shipments which prove vital to Alaskans. â&#x20AC;&#x153;For 50 years, the Port of Anchorage has been Alaskaâ&#x20AC;&#x2122;s port, supporting business, fuel, cargo, dry goods, military operations, tourism and so many more goods and services for the state of Alaska,â&#x20AC;? Sheffield says. â&#x20AC;&#x153;The Port has and will continue to be an important asset and an essential lifeline to Alaska.â&#x20AC;?

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his year, the Port of Anchorage is celebrating its 50th anniversary.

Itâ&#x20AC;&#x2122;s a momentous and fulfilling milestone for Alaskaâ&#x20AC;&#x2122;s major marine cargo terminal. â&#x20AC;&#x153;We are thrilled to celebrate 50 years of successful service in Alaska, but weâ&#x20AC;&#x2122;re even more excited about the next 50 years with our expansion project and state-of-the-art infrastructure,â&#x20AC;? says Director Bill Sheffield.

The Port of Anchorage is a major economic engine and serves as a critical hub in Alaskaâ&#x20AC;&#x2122;s statewide intermodal transportation system, which links rail, road and air cargo from across the state of Alaska. Sheffield describes the Portâ&#x20AC;&#x201D; which offers free summer tours to the publicâ&#x20AC;&#x201D;as Alaskaâ&#x20AC;&#x2122;s â&#x20AC;&#x153;lifeline.â&#x20AC;? Ninety percent of the merchandise goods for 85 percent of Alaskaâ&#x20AC;&#x2122;s population come through the Port of Anchorage. Or as Sheffield puts it: â&#x20AC;&#x153;If you eat it, wear it or drive it, it probably came through the Port.â&#x20AC;?

)QXGTPQT 5JGHÄ GNF 2QTV &KTGEVQT EGPVGT YKVJ 2QTV QH #PEJQTCIG UVCHH Unlike most municipal departments, Anchorageâ&#x20AC;&#x2122;s Port is self-sufficient. No city property tax dollars are used to cover its operational costs, and it contributes over $750 million to Alaskaâ&#x20AC;&#x2122;s economy annually.

To further enhance its service, the Port continues to move forward with modernizing and expanding its antiquated and deteriorated facilities. The multiphase undertaking will enable the Port to double in size and become a world-class intermodal facility, better poised to support current tenants and future businessâ&#x20AC;&#x201D;such as large gas line and power projects. The larger facility will provide increased seismic protection, additional acreage for commercial use, the ability to accommodate larger vessels, two new barge berths and secure road access for military deployments. The Port will remain fully operational during the project to ensure ships can always call on Alaskaâ&#x20AC;&#x2122;s portâ&#x20AC;&#x201D;including cruise ships, its most recent customer addition.

Port of Call The Port of Anchorage expects a dozen port calls from cruise ships in 2011 and has a ÄŤÄ&#x153;ĤÄ&#x; Ä&#x153;Ä&#x;ÄąÄ Ä­ÄŻÄ¤ÄŽÄ Ä¨Ä ÄŠÄŻ

committed schedule for the 2012 cruise season. The increased cruise ship traffic is good for the Port and for Anchorage businesses. Disembarked passengers enjoy sightseeing, wildlife viewing and other local attractions; off-duty crew members indulge in no-sales-tax shopping to collect bags of clothing, electronics and other items.

In the future, the Port will continue focusing on enhancing its operations to benefit visitors, Alaskans and global customers. â&#x20AC;&#x153;We are confidently moving forward through development, new customers, more jobs and better service,â&#x20AC;?

Sheffield says.

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SEPT

16-19

ALASKA THIS MONTH

BY NANCY POUNDS

Drivers Tackle Denali Park Road Road-lottery winners venture onto scenic route

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his month some Alaskans will boldly go where few drivers can – Denali National Park and Preserve. The four-day road lottery event is the only time private vehicles can drive the rugged 92mile park road, which is usually only open to only concessionaire tour buses and park vehicles.

From Sept. 16-19, hundreds of private vehicle drivers, who were chosen by lottery, will navigate the park road. The road abounds with opportunities for up-close wildlife viewing and capturing shots of North America’s tallest peak, Mount McKinley.

People visiting the park during the lottery event can travel the narrow road of colorful Polychrome Pass with its steep drop-off or scan alpine slopes to spot grizzly bears or Dall sheep.

Wildlife viewing on one’s own timetable is a major appeal of the Denali Park road lottery.

DON’T FORGET NEXT YEAR

Photos by D. Gualtieri/Denali National Park and Preserve

ALASKAN OPPORTUNITY

Most lottery participants are Alaskans, since the visitor season has concluded by mid-September, said Kris Fister, park public affairs officer.

“I believe folks who participate feel it’s a great opportunity to experience the park on their own schedule, after the busyness of the main visitor season,” Fister said.

Participants in the Denali Park road lotter lottery weekend eekend may spot wildlife without binoculars.

Each day of the road lottery, 400 vehicles are allowed on the park road during road lottery with day-use permits.

September in Denali Park offers variety. Bright fall colors have usually faded by September, but lottery participants may enjoy berry picking or glimpses of late-fall flowers, she said.

Weather affects the number of lottery participants, she noted. Last year, lottery drivers scored big and a record number of 1,434 vehicles ventured onto the park road, she said.

“All four days were clear, and it was warm enough that those of us working it were wearing short-sleeved uniform shirts, no jackets needed,” Fister said. “None of us can ever remember having four days like that.”

Snow can hinder road-lottery drivers, requiring park officials to dispatch the plows or close the road.

“I remember more white road lotteries than those without snow,” Fister said.

50

The lottery-road event typically runs the second Friday to Monday weekend after Labor Day. Next year’s dates are Sept. 14-17. Applications with a $10 fee are accepted online during June at www.recreation.gov under the permits section. The automated random drawing is conducted by mid-July. Winning lottery participants pay a $25 single-day road travel permit fee. Participants also pay the $20 per vehicle park entrance fee.

Denali National Park, totaling more than 6 million acres, was creaated in 1917. Private vehicles were permitted to drive the road until 11972, when park officials created the bus system. In the fall, private vvehicles were permitted to drive the park road after buses concluded tthe visitor-season run. But in 1989, a sunny fall attracted more than 11,600 vehicles on a Saturday, Fister said.

“The park was overwhelmed, and there were many adverse resource iimpacts and major safety issues,” she said. “Wildlife was killed or injured ddue to vehicle encounters, bumper-to-bumper traffic and major dust iissues were just a few problems.”

Park officials concluded it was time for a change and developed the llottery system, which began in 1990, Fister said.

The lottery system has changed throughout the years. In 2004, park oofficials began charging for entries and road permits, Fister said. In 2009, applicants were first able to enter the lottery online, Fister said.

This year lottery applicants were also able to enter via phone, she said.

Mail-in entries are still accepted.

This year park officials received more than 10,700 entries, the largest total since 2004 when fees were added, she said. Entries before fees were charged totaled about 16,000 to 18,000, Fister said. Also in 2004, park officials began using an electronic database to manage the entries and shuffle them for the lottery, she said.

“Prior to going electronic a crew of employees spent the day drawing the winning envelopes from the large containers they had been dumped into, writing down the information on the envelope for notification, which was done by mail,” Fister said.

Camping is available within the park at Riley Creek, Savage River and Teklanika campgrounds during the road lottery. Reservations can be made at www.reservedenali.com. Hotels outside the park are also open during the road-lottery weekend.

For more information, visit www.nps.gov/dena/planyourvisit/road❑ lottery.htm.

www.akbizmag.com • Alaska Business Monthly • September 2011

SEPT

1-30

EVENTS CALENDAR

ANCHORAGE 9/1-9/11 Anchorage Market & Festival Local farmers and artisans sell their goods on Saturdays and Sundays in this festival atmosphere. Enjoy free, lively entertainment and great food while browsing through more than 300 booths. Times are: Saturday-Sunday: 10 a.m.-6 p.m. Location: Third Avenue and E Street Parking. Contact: 907-272-5634.

9/9 Taste of Mardi Gras The 7th annual street party on Fourth Avenue is the only street party recreating Bourbon Street, featuring authentic Cajun cuisine from local celebrity chefs, live music, and street performers. Kick back and enjoy the last days of summer while raising money for the American Red Cross of Alaska. Time: 5:30 p.m. to 10 p.m. Location: Fourth Avenue, between G & H streets. Contact: 907-646-5400. Contact: steofmardigras@gmail.com.

9/10-9/11 Great Alaska Quilt Show Anchorage Log Cabin Quilters presents their annual quilt show displaying the talents of local guild members. A special display of a quilt inspired by Leonardo DaVinci’s artwork will highlight the show. “The Supper” has traveled to many countries and is making its Alaska debut during the quilt show; it measures 183 inches by 67 inches and is composed of more than 50,000 one-half-inch fabric squares. Time: Saturday: 10 a.m.-5 p.m.; Sunday.

10 a.m.-4 p.m. Location: Conoco Phillips Atrium. Contact: 907-263-4611.

9/13 Tricks of the Trade: White Collar Crime & Civil Fraud Come learn about white collar crime and civil fraud, they are a fact of daily life. This program will review popular schemes most likely to affect firms, clients and families. It will focus on warning signs that indicate a person may be a target, protective steps that may be taken to keep out of harms way, and remedies available to victims. Attorneys earn 4.0 general CLE credit + 3.0 ethics CLE credits. Held at the Hotel Captain Cook. Time: 8:00 a.m.-4:30 p.m. Contact: (907) 272-7469.

9/16 k.d. lang and the Siss Boom Bang Four-time Grammy Award winner k.d. lang is bringing her perfect pitch to Anchorage. Twenty years after bursting onto the music scene, her flawless, smooth-as-silk voice continues to impress audiences and critics alike throughout the entertainment world. Don’t miss what promises to be an enthralling performance that will touch your soul. Time: 7:30 p.m. Location: Atwood Concert Hall. All ages must have a ticket to enter. Contact: 907272-1471.

9/17 Wanda Sykes, Comedienne See why Wanda Sykes has been called “one of the funniest stand-up comics” by her peers and ranks among Entertainment Weekly’s 25 Funniest People in America. Her smart-witted stand up has sent her career in many different areas. Previously seen on several television shows, and on her own late night talk show on FOX, “The Wanda Sykes Show”. Her hilarious stand-up comedy features material from her recent national tour. Among the topics covered are: politics, gay marriage, karma, healthcare, racial profiling, the pressure of being a woman and the perks of getting older. Time: is to be announced.

Held at the Dena’ina Center. Contact: (907) 263-2850.

9/17-9/18 Alaska Whole Life Festival Alaska’s premier spiritual holistic festival, 11th year in Anchorage features popular keynote speaker Dr. Frank Yurasek, micro-system specialist from Chicago with 27 years of practice and teaching experience, and 38 other professional counselors, healers and vendors. Time: 11 a.m- 6 p.m. Location: Coast International Inn. Contact: 907-243-2233.

9/23-9/25 Alaska Women’s Show Celebrate everything that makes Alaska women unique. The show features financial seminars, fashion shows, jewelry, health care information and much more. Time: 11 a.m.-6 p.m. Location: Sullivan Arena. Contact: 907-276-0990.

FAIRBANKS 9/15 k.d. lang and the Siss Boom Bang Four-time Grammy Award winner k.d. lang is bringing her perfect pitch to Anchorage. Twenty years after bursting onto the music scene, her flawless, smooth-as-silk voice continues to impress audiences and critics alike throughout the entertainment world. Don’t miss what promises to be an enthralling performance that will touch your soul. Time: 7:30 p.m.

Location: Hering Auditorium. All ages must have a ticket to enter. Contact: 907-474-8081.

9/24 Tanana Valley Potato Extravaganza Midnight Sun Chefs Association six-courses meal featuring locally grown potatoes. Contact: info@festivalfairbanks.org or 907-456-1984.

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www.akbizmag.com • Alaska Business Monthly • September 2011

9/24 Zymurgist Borealis Septemberfest The Zymurgist Borealis Homebrew Club will meet with festivities that will start at around noon. There will be a potluck of good food and, of course, plenty of great beer to sample. This event is free to anyone interested in learning about homebrewing will take place rain or snow or shine. Location: Chena Pump Campgrounds. Contact: Scott Stihler at stihlerunits@mosquitobytes. com or 907-474-2138.

GIRDWOOD

KENAI 9/10 Geocache Rally Join in the fun in a real-world outdoor treasure hunting game. Players try to locate hidden containers, called geocaches, using GPS-enabled devices and then share their experience online. Join a fun-filled family day with entertainment, BBQ, prizes, live music and a beer garden. Sign up your team today. Location: Challenger Learning Center of Alaska, 9711 Kenai Spur Highway. Contact: 907-283-2279.

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9/1-9/5 Alaska State Fair Nestled in the heart of the Chugach Mountains, the Alaska State Fairgrounds are just an hour north of Anchorage. Alaskaâ&#x20AC;&#x2122;s last blast of summer, the fair is a showcase of Alaskaâ&#x20AC;&#x2122;s uniqueness and beauty. Enjoy the bounty from lush flower gardens, see record-setting giant vegetables, and partake of endless food and entertainment. The Alaska State Fair is for all ages.

Contact: 907-745-4827.

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9/5 Labor Day Rubber Duck Race Nome Rotary sponsors this annual event on the Snake River by Bering Air. Tickets are available from any Rotarian or AC Value Center. Entry Fee: $5 Donation. Contact: Leo Rasmussen: 907-304-2573.

October 5th, 2011 â&#x20AC;˘ 11:30 a.m. â&#x20AC;&#x201C; 1 p.m.

Denaâ&#x20AC;&#x2122;ina Civic & Convention Center

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9/5 Great Bathtub Race This 34th annual event begins at City Hall (Front Street) and ends at the U.S. Post Office Building. Time: 12 p.m. (high noon). Contact: Leo Rasmussen: 907-304-2573.

Make your reservations today for the Top 49ers Luncheon!

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3450 Aviation Avenue Anchorage, Alaska 99502 Toll Free AK: 800-478-2233 Toll Free US: 800-544-0986 907-243-2233

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9/10 Vertical Challenge Climb-a-Thon The fourth annual North Face Vertical Challenge Climb-a-Thon is an endurance event where contestants will walk, hike and run up the steep North Face Trail of Mount Alyeska and ride the tram down as many times as possible from 9 a.m. to 7 p.m. The top competitors have climbed more than 20,000 vertical feet, the equivalent of climbing Denali â&#x20AC;&#x201C; only you have 10 hours to do it. Have you got what it takes? Time: 9 a.m.-7 p.m. Location: Alyeska. Contact: (907) 754-2111.

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SKAGWAY 9/9-9/10 Klondike International Road Relay This 110-mile relay race begins in Skagway on Friday and ends Saturday :HVW WK $YHQXH $QFKRUDJH $. afternoon in Whitehorse, Yukon Territory, Canada. Teams of 10 members from all over the world compete in this annual event. In 1998, 162 teams competed, 5 ( 6 ( 5 9$ 7 , 2 1 6 some for the race experience and some just for fun (one Skagway team is ::: 68//,9$167($.+286( &20 named Muckrakers). Contact: http://skagway.com or info@sportyukon.com or 867-668-4236. â?&#x2018; www.akbizmag.com â&#x20AC;˘ Alaska Business Monthly â&#x20AC;˘ September 2011

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RIGHT MOVES STATE GOVERNMENT

Osborn

Melissa Osborn was hired as airport safety and security officer with the Alaska Department of Transportation & Public Facilities Northern Region Rural Airports in Fairbanks.

Osborn most recently worked as an operations officer at Fairbanks International Airport.

COMPILED BY NANCY POUNDS YUKON EQUIPMENT INC.

Roy Rank was hired as general manager of Yukon Equipment Inc. Rank previously worked as general manager of Alaska Construction Equipment Inc. and Northstar Trucking. He started Alaska Construction Equipment in Anchorage, and the company later expanded and relocated to Wasilla.

U.S. ARMY CORPS OF ENGINEERS – ALASKA DISTRICT

SOUTHEAST ALASKA REGIONAL HEALTH CONSORTIUM

Thomas Ryan joined SouthEast Alaska Regional Health Consortium’s Alicia Roberts Medical Center as behavioral health clinician in Klawock. Ryan also serves as regional behavioral health supervisor for Prince of Wales Island.

Ryan He previously served in children’s mental health with Community Connections in Craig.

RIM ARCHITECTS

Christopher Emond was appointed chief financial officer for RIM Architects’ offices in Anchorage, California, Hawaii and Guam. Emond has more than 20 years of experience in financial management, business development and government contracting.

WHPACIFIC

Andrea Morton joined WHPacific as a senior transportation engineer in the Anchorage office. Morton has more than 20 years of civil engineering experience, including 17 years the Alaska Department of Transportation and Public Facilities. Park Dallis joined the firm as senior electrical engineer in Anchorage. Dallis has more than 38 years of experience in electrical engineering, project management and construction.

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Frenier

David Frenier was chosen engineering division chief for the U.S. Army Corps of Engineers - Alaska District. He will also serve as the district’s corporate board and as a member of the Pacific Ocean Division’s Regional Management Board. He has served as the district’s design branch chief since 2006.

CRW ENGINEERING GROUP LLC

ALASKA NATIVE TRIBAL HEALTH CONSORTIUM

Garvin Federenko was appointed acting chief executive officer for Alaska Native Tribal Health Consortium. Federenko served as senior director of administration and finance at the consortium since 1998. Laura Báez was chosen director of behavioral health for the Division of Community Health Services. She most recently worked as behavioral health administrator for Yukon Kuskokwim Health Corp.

AFOGNAK NATIVE CORP.

Sarah Lukin was chosen senior vice president of corporate affairs for Afognak Native Corp. Lukin previously worked as Native American Contractors Association’s executive director in Washington, D.C.

STATE FARM INSURANCE

Mark Barth joined State Farm as an agent in Homer. His insurance agency is located at 3726 Lake Street. His career includes work in Anchorage as a general manager.

FIRST NATIONAL BANK ALASKA

Luke Fanning joined First National Bank as a loan officer at Valley Centre branch in Juneau.

He was also appointed vice president. He has seven years of banking experience.

Wende Wilber was promoted to director of business development at CRW Engineering Group LLC. Wilber has 20 years of management experience in Alaska. Wilber, who joined CRW in 2006, is a certified Professional Transportation Planner.

DENALI STATE BANK

Mike Milam was promoted to executive vice president and chief lending officer at Denali State Bank in Fairbanks. He most recently served as senior vice president. He has more than 40 years of industry experience, including 25 years in Fairbanks. Randy Weaver was promoted to executive vice president at Denali State Bank in Fairbanks. Weaver joined the bank in 2006. He has more than 20 years of accounting and management experience. He most recently served as executive vice president and chief financial officer.

Fanning

CALISTA CORP.

Gregory Strong was appointed president of Calista Real Estate LLC, a new subsidiary of Calista Corp.

Strong has nearly 35 years of real estate development experience. He previously owned his own real estate development company. He most recently served as president of the Strong Family Trust.

Daniel Boone was appointed president and chief executive at Alaska Telecom Inc., a subsidiary of Calista Corp. Boone recently handled marketing

www.akbizmag.com • Alaska Business Monthly • September 2011

RIGHT MOVES andd bbusiness i accounts for ICG Communications Inc. in Colorado. Monica James was chosen as president of Yulista Holding LLC and Yulista Management Services Inc., also Calista subsidiaries. James most recently served as senior vice . Yulista Holding. president of business strategy for Daisy May Barrera was hired as Calista Corp.’s shareholder-relations specialist in Bethel. Barrera has worked as a behavioral health counselor and corporate training development specialist for the Yukon-Kuskokwim Health Corp.

SPONSORED STEELFAB

Michael Cassidy was hired as logistics manager for STEELFAB. He has more than 25 years of operations management experience from FedEx and Wien Airlines. Earl Rudd was assigned to work as part of the inside sales team at the Anchorage Post Road location. Rudd is a longtime STEELFAB employee.

PROVIDENCE HEALTH & SERVICES

Bruce Lamoureux was appointed senior vice president and chief executive for Providence Health & Services Alaska region. He replaces Al Parrish, who will retire in late 2011. Lamoureux previously served as chief operating officer for Providence’s Alaska region. He has 35 years of health care operations experience.

NORTHERN AIR CARGO

their work in labor and employment. David Oesting was honored for work in general commercial litigation.

PROVIDENCE ALASKA MEDICAL CENTER

Christie Artuso was appointed to serve as a member of the American Heart Association Western States Affiliate 2011-2012 Stroke Task Force. Artuso is director of neuroscience Services at Providence Alaska Medical Center.

GLOBAL FOOD ALASKA

NORTHRIM BANK

Joe Hays was hired as vice president, commercial loan officer at Northrim Bank. Hays has 14 years of banking experience. He most recently served as a vice president with Wells Fargo in Petersburg.

Fausto Ortiz was promoted to branch manager of the Jewel Lake branch. He is also assistant vice president. He joined the bank in 2002. Kevin Kofstad joined Northrim as vice president, commercial real estate loan officer. He has more than 10 years of banking experience. Neolanda Frazier and June Gardner were promoted to assistant vice president at Northrim Bank. Frazier is assistant vice president, branch sales manager of the Midtown Financial Center in Anchorage. Frazier, who has more than 20 years of banking experience, joined Northrim in 2006. Gardner is assistant vice president, electronic banking operations manager. She has worked 10 years at Northrim. Amber Zins was promoted to senior vice president. Zins is senior vice president, internal audit manager. Chris Chambos was hired as assistant branch manager at Northrim’s Jewel Lake branch. He has more than five years of banking experience.

BY

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Cassidy

Rudd

CHUGACH ALASKA CORP.

Sheri Buretta was chosen to serve as acting chief executive officer for Chugach Alaska Corp. Buretta also serves as chairwoman of Chugach’s board of directors. She replaces Ed Herndon, who resigned in July. Buretta has worked 13 years for Chugach.

NUVISTA LIGHT AND ELECTRIC COOPERATIVE

Global Food Alaska honored several Alaskans for their business leadership. Honorees were Ben Vanderweele, Scott Blake, Ralph Carney and Jim Harmon. Vanderweele is owner and operator of Vanderweele Farm in Palmer, where he grows produce to supply Fred Meyer, Carrs/Safeway and the Anchorage Farmers Market. Blake is president of Copper River Seafoods, which has expanded under his 15-year tenure. Carney is president of Alaska Chip Co. The company began producing and selling multiflavored chips in 2003 and added popcorn in 2008. Harmon is executive director of SeaShare, a seafood donation program that collects seafood from Alaska and Pacific Northwest’s harvesting and processing industries to distribute to food banks.

Elaine Samuelson-Brown was hired as energy director and general manager for Nuvista Light and Electric Cooperative. She recently served as NorthStar Gas LLC’s president and chief executive.

The cooperative’s members are Association of Village Council Presidents, AVCP Rural Housing Authority and Yukon-Kuskokwim Health Corp.

Vanderweele, Blake, Carney & Harmon

DAVIS WRIGHT TREMAINE

Several lawyers from Davis Wright Tremaine’s Anchorage office were recognized in the legal directory Chambers USA: America’s Leading Lawyers for Business. The firm achieved the survey’s highest rankings in Alaska as a top firm for corporate/ mergers and acquisitions, labor and employment, and real estate. Jon Dawson, Barbara Simpson and Joseph Reece were honored for work in corporate/ mergers and acquisitions and real estate work. James Juliussen and Robert Stewart were recognized for

SPIRE COMMERCIAL

Hugh Wade recently earned his Certified Commercial Investment Member (CCIM) designation in commercial real estate, becoming one of only 25 in Alaska. Wade says, “All transactions boil down to income streams, the time value of money and rates of return.” Prior to owning Spire Commercial in Anchorage, Wade served as president of the Mountain View Community Council, and was a bank vice president. ❑

www.akbizmag.com • Alaska Business Monthly • September 2011

55

HEALTH & MEDICINE

Group Health Insurance Still desirable, still expensive

H

Photo courtesy of Alaska Employee Benefit Specialists

ealth insurance coverage remains one of the coveted benefits companies offer employees. As the cost of medical care rises and work forces gray, insurance will become both less affordable and more necessary.

Among the market’s available plans – self-funded, traditional coinsurance models with different deductibles, high-deductible plans, health savings accounts and health reimbursement account plans – most employers are shifting toward partially self-funded plans among the clients of Alaska Employee Benefit Specialists in Anchorage.

Amber Larkin, account specialist, Alaska Employee Benefit Specialists

“There has been a need for options amongst small- to mid-size employers,” said Amber Larkin, an account consultant. “With only a few fully insured carriers operating in the state, all with similar plans, employers have been stuck in a box.”

EMPLOYER PREFERENCES Partially self-funded options can offer insurance for companies with even very small groups. Since the employer

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chooses the plan’s benefits, PPO network, care-providing hospital, prescription drug vendor, for example, the employer can keep costs down.

Through claims data, employers with partially self-funded plans can also keep better tabs on how and if employees are using the plans so they can strategically plan to spend those dollars better.

“Under a fully insured plan, a smallto mid-size employer … is left in the dark on whether the benefits are being used, being overused or how much has been paid in claims,” Larkin said.

By using claims data, employers can nix benefits no one wants, curtail abuse and enhance helpful benefits.

Executives at Alaskan Benefit Insurance Consultants in Anchorage say clients like plans offering a high deductible with a doctor office co-pay and also health reimbursement or health savings accounts. Employers like deductible plans’ low cost and employees like the relatively rich coverage.

“The employees realize when they see a network provider, they have only their doctor office co-pay to pay: $20,” said Spencer Biegel, agent and owner of the firm. “If hospitalized, they have their deductible to be considered.”

SAVINGS FOR EMPLOYERS When a high-deductible plan is combined with a health reimbursement account, employees can be compensated if they go beyond the $5,000 to $10,000 deductible, up to the health reimbursement account’s maximum.

Employers can save significantly by using a higher deductible.

“In the long run, if the employees don’t utilize the maximum amount, the employer saves 30 percent,” Biegel said.

He said a health savings account (HSA) paired with a high deductible

Photo courtesy of Alaskan Benefit Insurance Consultants

BY DEBORAH JEANNE SERGEANT

Spencer Beigel, agent/owner, Alaskan Benefit Insurance Consultants

catastrophic plan is still very popular because advantages abound to both employer and employee.

“The employer and employee can contribute tax-deferred,” Biegel said.

“Unlike a flexible spending account, the HSA isn’t ‘use it or lose it.’”

The plan’s portability from employer to employer and the employee’s ability to roll it into an IRA upon retirement also make it attractive.

“They can still withdraw to pay for qualified medical expenses,” Biegel said. “They can use those dollars to pay for premiums on long-term care, or if they lose employment, they can use the money in the account to pay for health insurance premiums.

“Most employees establish the account and use it as a second IRA. It’s a great way to pay yourself before you have to pay Uncle Sam. If you can pay yourself first, do it every single time.”

A few employers have begun selffunding employee prescription benefits. Depending upon the needs of a particular work force, this can be a costeffective way to provide more benefit

www.akbizmag.com • Alaska Business Monthly • September 2011

since most prescriptions cost $10 to $50 per month.

“Even if an employer says, ‘I’ll shell out $1,000 per year, most won’t use that,” Biegel said.

Self-funded plans offer employers another benefit: fewer headaches in the future.

“Many employers are moving toward the self-funded option in light of health care reform; thus, mitigating some of the negative mandates the regulations can impose,” said Jeff Ranf, president of Wallace Insurance Group in Anchorage.

RISING COSTS OF INSURANCE AND HEALTH CARE

Photo courtesy of Premera Blue Cross Blue Shield of Alaska

It’s not surprising that employers are seeking new ways to offer benefits.

Biegel said he has heard of rate increases ranging from 7 percent to 68 percent. “Some brokers have said even 96 percent increases,” he said.

Jeff Davis, president of Premera Blue Cross Blue Shield of Alaska, said a rate jump like that “isn’t the norm. Eighteen percent is the average for 7/10 to 6/11. Historically, health care costs in Alaska have increased 15 percent a year. For the 7/10 to 6/11 period, some groups actually experienced decreases.”

He fears many picture insurance companies pocketing huge profits after rate increases, but that’s not so, according to Davis.

“Our profit for the past 18 years on average has been less than 1 percent per year,” he said.

He casts blame on increasing health

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www.akbizmag.com • Alaska Business Monthly • September 2011

57

care costs and the aging population’s demand for more services. As for the group Biegel referenced, Davis said a jump like that could be caused by several factors, one of which could be losing young employees and gaining older ones (thus negatively altering the group demographics).

The state’s higher cost of living and limited access to medical care influence the cost of health care and are starting to shape the benefits employers offer.

“A colonoscopy costs about $3,500 here,” Biegel said. “In Seattle, it’s

58

$1,500 for the same procedure. Does it cost any more up here? No. We’re a captive audience. I tell my clients to fly out to Mexico or the Bahamas to have their procedure done and enjoy a weekend away and still save money.

“Some very large group employers are buying travel insurance so employees who need a procedure done will fly overseas. Some hospitals in the Philippines are beautiful, new facilities with doctors trained in the States. It’s a lot less expensive because the labor costs are less.”

LACK OF CARE David Frazier, president of David Frazier and Associates in Anchorage, says he believes the new health care laws are adding expense, along with a decreased availability of care.

“These mandates add incremental costs to the health insurance contract,” he said, “but there’s no off-setting legislation to control doctor costs or to increase the availability of health care.

Finding health care is a challenge.”

He said he fears that once the Patient Protection and Affordable Care Act legislation is fully effective, the glut of people newly covered will recreate the scenario already present with those on Medicare and make finding care even harder.

“When you reach age 65, you’re forced into Medicare coverage,” he said. “It’s something you’ve paid for all along. Part B has a supplement. You can’t find a doctor willing to take the reimbursement that Medicare allows.

What all of this does is that the laws are designed to expand access, but cost containment is not there. We have better coverage, but it feeds more people into the health care system.

“We’d all like 20 million to 40 million (more) people to be covered by health insurance policies, but there’s no provision for care once you have a policy.”

Receiving care at clinics or under other pro bono circumstances can compromise the quality of care for patients with complex medical issues requiring continuity of care.

Keeping insurance costs down enables more employers to offer quality plans. For some companies, technology can help with cost containment.

“Many third-party administrators now offer comprehensive phone and email consultations with doctors and registered nurses, many of whom will schedule appointments like the employee is accustomed to,” Larkin said, “For many services, the doctor can diagnosis and recommend treatment over the phone, saving the expense of an office visit.”

As Biegel mentioned, traveling Outside can also help. Larkin has heard of employers paying for travel if it will save them money on particularly expensive procedures.

www.akbizmag.com • Alaska Business Monthly • September 2011

“The same service can be as much as half of what they are in Alaska,” Larkin said.

SHOP AROUND She encourages employers to help employee to become savvy health care consumers.

“Employers need to send the same message to their employees about health care: shop around, ask questions and find the best deal,” Larkin said.

“Charges for the same service can differ greatly from doctor to doctor, but a lower-cost option does not equate to a sacrifice in care.”

Strategically pruning benefits can help keep the contributions at the same level while premium costs escalate.

“Remove basic benefits such as free office calls, prescriptions, x-rays and lab fees and low deductibles,” Frazier said.

“They can raise the deducible under an HSA to $5,000.”

He has a client with a small group who was walloped with a 36 percent rate increase, which is higher than her average increase. By raising the deductible from $2,500 to $5,000 and trimming the basic benefits and adding a health savings account, she was able to keep the rate at the same amount.

Biegel said more large employers are cutting expenses by contributing toward individual plan coverage for dependants instead of inclusion with the group plan.

“When it comes to dependants, they go with individual plans,” he said.

“They’re not as benefit rich as group plans.

Maternity benefits, drug and alcohol services, and prescription drug co-pays are usually not covered in individual plans.

Lifetime benefits are still the same for everyone, but most carriers have found a loophole with an annual benefit.”

He advises employers to look for plans with annual deductibles, not peroccurrence deductibles.

Some employers forgo plans altogether by forking over a stipend for health benefits and allowing employees to take care of the matter themselves.

But for those still paying for insurance

plans, bringing employees into the loop can also help them swallow the bitter pill of decreased benefits or increased premiums.

“We find many employees are unaware how much their benefits actually cost, referring only to their portion as their reference,” Larkin said. “Involve the employees and make them understand they can play a big role in helping the company meet savings goals and incentivize them to do so. The more informed they are the better choices ❑ they will make.”

Changes, Changes Most off the Patient i Protection i and Affordff able Care Act regulations do not take effect until 2014. The following are a few health care changes effective with contract renewals on or after Sept. 23, 2010.

■ Preventive care is free.

■ Insurance companies offering individual and small group policies must spend 80 percent of the premiums they receive on medical services.

■ Policy holders may keep their adult children on their own plan until age 26 regardless of marital status or financial dependence.

■ Lifetime maximums were eliminated; annual maximums still stand. www.akbizmag.com • Alaska Business Monthly • September 2011

59

RURAL DEVELOPMENT

Building in the Bush

Photo courtesy of ANTHC

(Left to right) Professional Land Surveyor Susan Miskill, Project Engineer Chris Fehrman, Kasaan Water Treatment Plant Operator Mike Escoffon, Project Engineer Mike MarcAurele and Professional Land Surveyor Barbara Hosier at the site of the proposed water storage tank in Kasaan.

Communities face long list of obstacles to rural development

BY VANESSA ORR

L

iving in Anchorage, Fairbanks or Juneau, it may be hard to imagine there are still some areas of Alaska that don’t have running water or sewers. Even in some of the state’s more developed rural areas, there is still a laundry list of infrastructure needs that remain unmet, including roads, bridges, airports, telecommunications and more. Yet even as the need for infrastructure improvements continues to grow, the amount of money available to advance the quality of life in rural communities decreases.

“I mean no disrespect, but the infrastructure in rural Alaska can best be

60

described as third-world. There certainly is no other place in the United States that is comparable,” said Jim Nordlund, Alaska State director, USDA Rural Development. “Many communities are without running water and sewers, roads are inadequate, fire protection is poor, there is a lack of healthy food, energy prices are exorbitant, housing is poor and community facilities are lacking.

“Rural people are strong and resilient, however, and determined to improve their communities,” he added.

“It is our job to help them build sustainable communities.”

USDA Rural Development, which has six offices throughout the state, provides direct loans, guaranteed loans and grants for rural infrastructure, including housing, community facilities, businesses (including business development) and utilities (including electric, telecom, sewer/water and solid waste). In fiscal years 2009 and 2010, USDA RD funded $607 million worth of projects in Alaska. This included $45 million in business, $89 million in community facilities, $162 million in housing, $76 million in electrical, $146 million in telecom, and $89 million in sewer/water and solid waste

www.akbizmag.com • Alaska Business Monthly • September 2011

“Investments like these can make huge, fundamental differences in the lives of rural residents, just by providing the things that urban dwellers take for granted.”

– Jim Nordlund Alaska State Director USDA Rural Development projects. The agency’s budget was bolstered by funds provided by the American Reinvestment and Recovery Act. More than 600 separate projects were funded by the USDA RD during these two years, including a major broadband expansion into the Bristol Bay and Yukon-Kuskokwim Delta regions through an $88 million grant/ loan to GCI and its subsidiary UUI. The USDA RD was also able to secure the release of $68 million in pent-up

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www.akbizmag.com • Alaska Business Monthly • September 2011

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funds for village sewer and water projects through the Rural Alaska Village Grant program.

Health care investments included the construction of a new $20 million hospital in Wrangell, construction of a new $50 million Native health clinic in Wasilla, and widespread funding for Code Blue, which provides medicaland emergency-related equipment such as ambulances to communities throughout Alaska.

“Our motto is that we can build a community from the ground up,” said Nordlund. “Investments like these can make huge, fundamental differences in the lives of rural residents, just by providing the things that urban dwellers take for granted.”

CHALLENGES OF BUILDING IN THE BUSH There are many issues facing those in charge of improving the infrastructure of rural Alaska.“Probably the number one problem is that many systems that are built for use in larger communities or in the Lower 48 are too expensive to build or operate in rural Alaska,” said Bill Griffith, facility programs manager, Division of Water, Alaska Department of Environmental Conservation. “There are also tremendous environmental and climate challenges within the state. It takes an enormous amount of energy to keep a system from freezing in winter in most of Alaska; a small community in California might not have to think about it, but here, climate is a challenge.”

In some areas, permafrost prevents utilities from putting pipes into the ground or constructing buildings on grounds that might later melt. Even in communities where permafrost is not an issue, soil conditions are. In the Yukon-Kuskokwim Delta, for example, gravel has to be barged in, which adds greatly to the cost of a project.

“Gravel is critical for infrastructure development for trenches, for footings and to construct the dikes for lagoons,” said Griffith. “A number of communities also don’t have running water or sewer so there’s no fresh water. And if a community is situated where there is a lack of elevation, there is no good place to put a lagoon or a septic tank with ocean outfall.”

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Companies that provide environmental consulting services, such as HDR Inc., often find that a lack of baseline information can hinder a project as well.

“The environmental process is often a hurdle to developers; in many cases, there is not a lot of good topographic information available,” explained Vice President John McPherson, who manages HDR’s transportation planning and environmental groups. “A project we were doing in Akutan needed aerial photography, and it took a year to find a weather window in which those photos could be taken.

“Because these projects are so remote, our folks need to get in and out by helicopter, and have to be ready to stay the night in tents as well,” he added. “This mobilization of equipment and people adds an extra cost to doing business off the road system.”

In addition to climate and geographical difficulties, there are other issues as well. “The high cost of doing business in rural Alaska is affected by the challenge of designing and maintaining sustainable projects; transportation limitations such as barge schedules; limitations on

professional capacity to manage grant/ loans and the propensity of communities to expect grant funding instead of loan funding,” explained Nordlund.

Add to this a community’s inability to pay for and support a project once it’s built, and it becomes evident why Alaska’s rural infrastructure is lagging.

“It really begins with economics,” said Griffith. “Many rural areas have very low incomes, and very few or seasonal jobs. When you compare the cost of operating a system with the median household income, it is simply not feasible to operate a water and sewer system.”

In larger cities of more than 1,000 people, it is expected that the community will pay at least a share of construction improvements. “We might provide loan funding or make grants, but these areas usually pay about 30 percent to 40 percent of construction,” said Griffith. “Smaller communities are often 100 percent grant funded, and some Native communities get 100 percent federal grant funding through Indian Health Services.” Projects that are funded are prioritized, with an emphasis given to those that meet a health-related need

and those that have the local capacity to provide operations and maintenance.

“The highest points are given for projects that provide homes with running water or sewer for the first time; for those that bring current facilities into regulatory compliance, and for those that make essential improvements to an existing system,” said Griffith.

FUNDING ISSUES LIMIT FUTURE INVESTMENT During Sen. Ted Steven’s tenure in Congress, Alaska saw a lot of money go toward improving the state’s infrastructure. “Right now, we have about $40 million a year to fund projects, which is down about 60 percent from eight years ago when Sen. Stevens chaired the Appropriations Committee,” said Griffith. “At that time, there was $100 million coming in for rural water and sewage improvements.”

“Times have changed; the pench a n t i n Co n g r e s s t o p r o v i d e earmarks or direct congressional appropriations is almost taboo now,” added Nordlund. “The way to get infrastructure projects funded

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now is through agency programs.â&#x20AC;?

According to Nordlund, FY11 saw a â&#x20AC;&#x153;double whammyâ&#x20AC;? with the end of ARRA funding in addition to cutbacks on regular funds. â&#x20AC;&#x153;We are bracing for more cuts in fiscal year 2012,â&#x20AC;? he said, â&#x20AC;&#x153;and we expect to see even more cuts in 2013 and down the line. â&#x20AC;&#x153;We do grants, but are primarily a lending agency,â&#x20AC;? he added. â&#x20AC;&#x153;We understand that rural Alaska is not rich in cash and that some communities do not necessarily have the means to pay back loans, but borrowing money is not dismissed out of hand. Weâ&#x20AC;&#x2122;re willing to work with communities, looking at possible revenue streams.

Itâ&#x20AC;&#x2122;s a challenge doing business in rural Alaska, but itâ&#x20AC;&#x2122;s a challenge we like to take on.â&#x20AC;?

According to McPherson, a major issue facing transportation infrastructure projects is that (at the time of this article) the federal transportation bill for highways had still not been approved. â&#x20AC;&#x153;By most accounts, it is expected to be lower than in the past, which means that we will probably see state funding levels decrease,â&#x20AC;? he said. â&#x20AC;&#x153;We are starting to see a trend toward more innovative financing approaches,â&#x20AC;? he added. â&#x20AC;&#x153;For example, the Knik Arm Crossing project is exploring the idea of the private sector putting up capital funding and receiving toll concessions back.â&#x20AC;?

One way in which to make funds stretch further is through the use of new technologies. â&#x20AC;&#x153;The technologies that weâ&#x20AC;&#x2122;ve been using for the last 20 or 30 years will not handle what we need to do now with the lack of funding available,â&#x20AC;? said Griffith. â&#x20AC;&#x153;We canâ&#x20AC;&#x2122;t keep up with aging infrastructure, growing populations, the effects of new regulations and inflation without taking a harder look at new technologies and making it a focus of our program.â&#x20AC;? â&#x20AC;&#x153;The challenge in a lot of rural areas is that the population is low, which makes the cost of making improvements really high,â&#x20AC;? summed up McPherson. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s hard for those who make the programming decisions to justify finding $50 million to $60 million for 300 people. But there is a definite link between the quality of life, standard of living and cost of living in Alaska that capital improvements generate.â&#x20AC;? â?&#x2018;

www.akbizmag.com â&#x20AC;˘ Alaska Business Monthly â&#x20AC;˘ September 2011

ENVIRONMENT

“In the end, I believe that our program will be more accountable to the public than the EPA program because we have to ask for our budget from the Alaska Legislature every year. That makes lawmakers pay more attention and puts us in the public eye.”

– Lynn Kent, Director Division of Water, Alaska Department of Environmental Conservation

The Clean Water Act

Compliance challenges communities, businesses Photo courtesy of DEC

Bob Klieforth from SLR Consulting takes samples at the Anchorage landfill. DEC compliance staff members often observe the sampling process, whether done in house or through contactors, to verify sampling is done as outlined in the facility’s quality assurance plan.

BY VANESSA ORR

I

Act is one of the earliest fundamental environmental laws. Prior to the act, there were some rules on rivers and harbors, but these mainly focused on navigation.”

While the Clean Water Act has helped to protect water quality in the nation’s wetlands, rivers, streams, lakes and oceans, it has also made it difficult for some areas, including a number of Alaska’s rural communities, to comply with all of the regulations required. And while businesses who are affected by the act, including the oil and gas industry, timber, seafood, mining, construction and municipal sewage and treatment facilities, know that complying with the CWA is a part of doing business, delays in permitting too often put a strain on project timelines.

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t is often taken for granted in the Lower 48 that most areas have clean, running water, and that those who use the nation’s waters will be held accountable when it comes to protecting the environment. Less than 40 years ago, however, this was not the case. In 1972, Congress passed the Clean Water Act as a way to reduce pollution and ensure the nation’s waters were safe for human use.

“Before the Clean Water Act, there were a lot of problems – rivers were catching fire because they were filled with oily discharge and many water bodies were polluted,” explained Lynn Kent, director, Division of Water, Alaska Department of Environmental Conservation. “Along with the Clean Air Act, the Clean Water

STATE TAKES ON PERMITTING SYSTEM While the CWA covers a wide array of different issues, there are two main regulatory programs that affect those living and working in Alaska. The first requires any company or community that discharges wastewater has a National Pollution Discharge Elimination System permit. This permit regulates the quantity and quality of discharge from facilities and includes monitoring requirements.

“Like 45 other states, Alaska has sought approval from the Environmental Protection Agency to run the NPDES program, and we are about three-quarters of the way through phasing the EPA out and establishing our own APDES (Alaska Pollution

Discharge Elimination System) program,” explained Kent. “This transition is taking place in phases, based on the ‘permittee’ sectors. We have now taken over permitting for every sector except oil and gas, munitions discharge and miscellaneous discharges not included in the other sectors.”

While the state had originally scheduled this last phase to be completed

by Oct. 31, 2011, it is working with the EPA to extend the process for another year. “There was such a large backlog of permits for the oil and gas sector that we wanted to get all of the permits current before we had the sector transferred to us; we’re using the help of the EPA until then,” said Kent.

The state opted to take on the permitting process for a number of reasons.

“Our desire is to issue permits in a timelier manner than the EPA is able to do,” said Kent. “For a lot of permittees, time is money. If a permit gets delayed, so does the project.

“Most of the EPA permiters are also located in Seattle, and we feel that it is better to have a permitting staff that understands Alaska conditions,”

she continued. “Our program will be, and is, as stringent as what the federal government is operating, but we better understand the constraints of the permittees in Alaska. It is also much less expensive to meet with permit writers here than it is to have to fly to Seattle.”

To undertake this new role, the Alaska DEC has added positions and budget, though its staff was already familiar with the permitting process.

“Even before we began taking over different sectors, we were engaged in the EPA permitting process because the State has to certify that the EPA regulations meet our state regulations,” said Kent. “In the end, I believe that our program will be more accountable to the public than the EPA program because we have to ask for our budget from the Alaska Legislature every year. That makes lawmakers pay more attention and puts us in the public eye.”

Another part of the Clean Water Act that often affects Alaskans is the dredge and fill (404) permit program managed by the Army Corps of Engineers. “Any

project where there is dredging of a water body or fill is placed into a water body, including wetlands, requires a permit from the Corps,” said Kent. “In Alaska, almost everything is wet – you can’t build in too many places that don’t require fill or the use of wetlands.”

There has been some concern in Alaska that the EPA has the authority to overturn the Corps’ decision to issue a permit based on whether the agency feels the discharge of materials will have an adverse effect on municipal water supplies, shellfish beds, fishery areas, wildlife or recreation areas. In July 2011, the U.S. House voted on the passage of H.R. 2018, which restricts the EPA’s ability to veto the Corps’ section 404 permitting decision unless the State concurs with the veto.

“The bill is new but the concept is not new,” said Kent. “There has been a lot of frustration in recent years that the EPA comes in at the 11th hour on a project and then causes delays. The bill has not been passed by the full Congress at this point; it is still a long way from becoming law.”

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While protecting the environment is a priority, so is protecting human health. Unfortunately, the prohibitive cost of building and maintaining fullfledged sewage treatment facilities in rural Alaska can make complying with federal regulations extremely difficult.

“The Clean Water Act affects what kinds of treatment and disposal options are available to communities from Anchorage to Alakanuk,” explained Bill Griffith, facility programs manager, Division of Water, ADEC. The agency provides funding and technical assistance to rural communities to develop sustainable sanitation facilities. “Similar to drinking water-treatment regulations, wastewater-treatment regulations over the years have called for more and more sophisticated, complicated, expensive facilities to be constructed.”

While most rural communities in Alaska use a primary method of treatment to treat wastewater, CWA regulations are requiring that communities move to a secondary method of treatment. “The deadline to receive a 301(h)

Photo courtesy of DEC

RURAL COMMUNITIES STRUGGLE WITH REGULATIONS

DEC and its partners performed water-quality and physical-habitat surveys of the Yukon River from Fort Yukon to Kaltag.

waiver from secondary treatment was many years ago, back in the 1970s,” said Kent. Anchorage has a formal 301(h) waiver, as do eight or nine other Alaska communities.

“At that time, the EPA recognized that some Alaska communities would have a very difficult time applying for the waiver; they didn’t have the technical expertise available,” added Kent.

“So the EPA gave 76 communities a 301(h) waiver of sorts. This was not a formal waiver, but the EPA recognized at the time that those communities had a long way to go in terms of getting to secondary treatment.”

As times have changed, however, so have regulations. This means that many communities are now being required to go to secondary treatment. “Years ago,

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ĖIJĭĭĩĶĦīĤ Ğīġ ĢįĢĠıĦīĤ İıĢĢĩ ĞĠįĬİİ ĄĩĞİĨĞ ģĬį ĶĢĞįİ 68

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the only kind of system that was even considered in small, rural communities was a simple, single-cell (pond) lagoon and this met the regulations that were in place,” said Griffith. “Over time, it was decided that single-cell lagoons could not meet treatment regulations, and now communities need to build more sophisticated systems that require more money to build and more money to operate.”

The Alaska DEC is working with the EPA and individual villages to determine what this means to rural Alaska.

“I don’t think that anyone really knows what this means for every village in Alaska, but I do believe that – over time – a number of systems now providing primary treatment will need to move to secondary systems,” said Griffith.

“Some areas may be able to make modifications to their primary systems instead of building full-blown watertreatment plants; these may include increasing single-cell lagoons to doubleor triple-cell lagoons or using septic tanks to capture solids before the waste goes into the lagoons,” he added. Other options could include aerating small lagoons by blowing air into them, which enhances the treatment process.

“In Palmer, the city has an aerated lagoon with an insulated cover that greatly enhances biological activity,” added Griffith. “Well over 100 communities have uncovered lagoons throughout the state that shut down during the winter because it’s so cold, causing bio-activity to stop. Palmer has found a way to continue this bio-activity all year long. Communities need to look at things like this to improve treatments now taking place.”

There is, however, no hard-andfast timeline to see improvements made. “There’s simply not enough money to make these changes quickly – the amount of money that we have available to address health and safety issues in treatment systems is already much less than what is needed,” said Griffith. “It will take many years; and it’s not just to meet regulatory changes. We’re dealing with aging infrastructure and undersized systems in many areas and there are still communities that have no running water or sewer. Regulatory needs are only ❑ a part of the issue.”

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Learn about the Healthy Alaska Natives Foundation initiatives at InspiringGoodHealth.org, and you too will be inspired to give.

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www.akbizmag.com • Alaska Business Monthly • September 2011

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SPECIAL SECTION:

ALASKA NATIVE BUSINESS NEWS

2010 ANCSA Regional Corporation Overview Major engines for the state; revenues of 12 ANCs top $7.5 billion

BY JULIE STRICKER

A

lmost 40 years ago, Congress undertook a “great experiment” when it passed the Alaska Native Claims Settlement Act, creating for-profit corporations instead of reservations when resolving aboriginal land claims. Under ANCSA, Alaska’s Natives received title to 44 million acres of land and $962.5 million, which was divided between 12 regional and more than 200 village corporations. A 13th corporation was later created for Alaska Natives living outside the state.

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

By most measures, the corporations have succeeded. Despite a rocky start and some missteps by some in the past four decades, the 12 Alaska-based corporations are profitable and are major economic engines for state. They have taken the traditional Alaska business model, in which resources and money flowed out of the state, and reversed it.

They have operations around the globe, as well as in Alaska, in such diverse fields as government services, construction, real estate, mining, tourism, technology and energy. They have created thousands of jobs in Alaska and contribute millions of dollars to scholarships, job training and cultural programs.

In the past decade, the corporations have found tremendous success in government service contracts, which contribute as much as 94 percent of total revenues for some corporations. In 2010, total revenues for the 12 Alaskabased regional corporations exceeded

72

$7.76 billion, fueled in a large part by government contracts.

Many of these were granted under the Small Business Administration’s business development’s 8(a) program, which grants specific preferences to Alaska Native-owned businesses. The corporations say they are gaining valuable experience and expertise under the program but the preferences have come under attack in Congress.

New rules adopted by the SBA early in 2011 strengthened oversight and reporting of government services contracts, but efforts by Congress to roll back preferences granted to Alaska Natives continue.

Corporations say they are working to diversify their holdings, but government contracts will likely continue to be an important component of their businesses whether under 8(a) or in the competitive field.

The corporations also are working together to find solutions to high energy prices in rural Alaska. NorthStar Gas, a partnership between Calista and NANA Regional corporations and 16 village corporations, is working with bulk fuel distributor Delta Western to create a stable source of fuel in Western Alaska. NorthStar Gas acquired the Cauneq, a 162-foot-long fuel and cargo barge to improve deliveries to remote villages.

All of the corporations felt the sting of slumping natural resource markets as 7(i) distributions from Arctic Slope Regional Corp.’s Alpine Oilfield and NANA Regional Corp.’s Red Dog mine revenues decreased nearly 70 percent over 2009. Prices have since recovered.

The effects of climate change are being felt strongly in the Arctic, not only because of warmer temperatures and thinning ice conditions, but also in the regulatory climate. Four regional corporations as well as village corporations and North Slope Native organizations formed a coalition to sue the federal government over its designation of 187,000 square miles of Arctic coast as polar bear critical habitat designation.

ARCTIC SLOPE REGIONAL CORP. Arctic Slope Regional Corp., Alaska’s largest private enterprise, recorded its highest-ever revenue in 2010, $2.33 billion, up from $1.95 billion in 2009.

It employs 10,000 people, 3,000 in Alaska. It has five major business segments: petroleum refining and marketing, energy support services, construction, government services and resource development.

The Barrow-based corporation, with about 11,000 Inupiat stockholders, rode a strong year in the energy sector in 2010. Arctic Slope was one of the first corporations to enroll shareholders born after 1971. Currently, nearly 70 percent of shareholders were born after 1971.

In fall 2010, Arctic Slope paid a

www.akbizmag.com • Alaska Business Monthly • September 2011

record dividend of $51.83 per share.

Most shareholders own 100 shares. It has paid $484 million in dividends over its 40-year history.

It holds title to 5 million acres of highly mineralized land on the North Slope, including Alpine Oil Field and the Western Arctic Coalfields.

In 2010, it distributed $20 million in scholarships, community support funding and training and development programs.

Ahtna is one of five Alaska Native corporations to have opened enrollment to descendants of the original shareholders.

Ahtna is creating a permanent fund to help generate dividends for future needs.

Net revenues were $1.7 million and the board declared a dividend of $4 per share, an increase of $1.21 over 2009.

In 2011, Ahtna is focusing on reorganizing and stabilizing its organization. It is consolidating corporate and accounting operations to improve cash flow. Johns announced plans to retire in 2012. A successor has not been named.

ALEUT CORP. A change of leadership highlighted 2010 for The Aleut Corp., with Dave Gillespie named as CEO and Thomas Mack retaining the title of president.

Government contracting under the umbrella of Aleut Management

Helping Alaska B Businesses es Grow w

AHTNA CORP. Ahtna Corp. has built a strong base in government services and feared a weak economy and a congressional move to strip Alaska Native preferences from the Small Business Administration’s 8(a) program would negatively affect them.

Despite those concerns, the Glennallen-based corporation recorded its sixth consecutive year of profitability.

In 2010, about 70 percent of Ahtna’s $243 million in revenues came from government services, said President and CEO Ken Johns. Ahtna has 10 operating subsidiaries in areas such as construction, facilities management, environmental remediation, oil and gas pipeline maintenance, janitorial services and surveying. It created five new subsidiaries in 2010 to provide services in information technology, facility support, environmental cleanup and other areas.

The SBA 8(a) program has been a key part of its recent profitability; however Ahtna is looking at diversification strategies.

“We’ve been moving out of 8(a)” Johns said. “The system is working. We’ve been gaining experience from it and are working being able to survive outside 8(a).”

Ahtna is working with Raven Gold Alaska and Ocean Park Ventures Corp. to explore for gold at the Chisna project and is looking natural gas development in its region to provide more jobs for its 1,600 shareholders and their descendants and help the company diversify.

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Services accounts for about 80 percent of revenues for The Aleut Corp. Revenues were up in 2010, at $159.4 million, an increase of $12.5 million over 2009.

Net income was $20.29 million, almost half of the $43.3 million seen in 2009.

In the past couple of years, AMS growth has slowed in part because of government insourcing and stronger competition for government contracts, according to Gillespie.

AMS is being restructured to be more cost-effective with Sam Cole taking over as CEO of the subsidiary. It provides services in information technology, communications, base operations support, logistics and civil engineering. It is increasingly moving into the competitive arena for government contracts.

The Aleut Corp. recently announced its largest dividend ever, $21 per share.

Most of its 3,600 shareholders hold 100 shares apiece. It also provided scholarships for 140 shareholders.

With its strategic location in the North Pacific, The Aleut Corp. is wellpositioned to take advantage of the opportunities presented by new polar shipping routes opened by melting sea ice. It owns many of the facilities at the defunct Adak Naval Base, as well as a hotel. A subsidiary provides support for the Missile Defense System’s floating radar warning station, which is based in Adak and Hawaii.

Bering Straits Native Corp.

BERING STRAITS NATIVE CORP. 2010 was a good year for the Nomebased regional corporation, which recorded $190 million in revenue, up from $160 million.

The bulk of the revenue – 94 percent – came from the corporation’s government-contracting subsidiaries.

“We’re still heavily vested in the 8(a) program,” said BSNC chief financial officer Wally Powers. “We recognize the concerns about 8(a), but even if 8(a) goes away, we’re heavily invested in government contracting. We’ve built the infrastructure and will continue that route.

“It’s going to be more competitive,” Powers continued. “We’re going to have

www.akbizmag.com • Alaska Business Monthly • September 2011

to do more marketing and do what it takes to succeed.”

One of Bering Straits’ projects outside the 8(a) realm was its partnership with Neeser Inc. to build a new $90 million hospital in Nome. It also touts its Banner Wind partnership with village corporation Sitnasuak Native Corp. to build and operate an 18-tower wind farm, which helps supply electricity to Nome’s grid.

One disappointment was NovaGold Resource’s pullback from the Rock Creek gold mine just outside Nome, said Matt Ganley, vice president of resources and external affairs. The mine would have provided about 160 wellpaying jobs in the area.

The mine’s status is unclear, he said.

Startup problems and cost overruns plagued the mine when it opened and NovaGold decided to sell it and focus on other properties. BSNC is hoping Nova Gold won’t button it up to the extent that it would be difficult to open in the future, Ganley said.

While the gold prospects are uncertain at the moment, despite record-high prices, Bering Straits is also

prospecting for rare earth minerals, which are used in technology products.

Ganley said indications show such minerals are widespread in the region and could complement development of precious metals such as gold and silver.

BRISTOL BAY NATIVE CORP. Bristol Bay Native Corp. has long been a quiet giant among Alaska businesses, reaping steady success for years. 2010 was no different as the corporation, with its roots in the Bristol Bay area of Southwest Alaska, brought in $1.4 billion in revenues in fiscal year 2010.

It marked the second most-profitable year for Bristol Bay, and its 32nd consecutive year of profitability.

“It’s been a growth process for us, but we’re still staying true to our roots and foundation in ANCSA,” said President and CEO Jason Metrokin.

Bristol Bay’s business focuses on its

investment portfolio, petroleum distribution operations, contract services and natural resources. After incurring big losses in fiscal year 2009, its portfolio showed a return of 38 percent over 2009, ending the fiscal year in March 2010 with a value of $85 million. Its PetroCard subsidiary, which is Bristol Bay’s largest single source of revenue, saw declines in 2010 as prices rose and consumers cut back.

Its contract services sector brought in $102.7 million in revenues. A project by subsidiary CCI to build a seawall in Iraq suffered a $25 million loss, leading to an overall drop in services income and operating cash flow. The corporation is applying for remediation from the Army Corps of Engineers. Bristol Bay is planning to expand its Texas construction businesses and increase its non-8(a) contracts.

Other sectors also saw drops, but all showed positive earnings. Bristol Bay had $31.9 million net revenue in 2010, compared to $5.17 million in 2009.

The corporation also officially announced its opposition to the giant Pebble Mine gold, copper and

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First Alaskans Institute and Alaska Native Professional Association welcome your organization’s participation in the

2011 Elders & Youth Opportunities Expo October 17 - 18, 2011 8 AM to 5 PM Dena’ina Civic and Convention Center Anchorage, AK Registration for an Expo Booth is $800 (Registration includes one 6 foot display table for 2 full days)

molybdenum mine prospect in its region. Although the mine could have a huge economic impact on the region, shareholders fear its effect on the world-renown salmon fisheries in Bristol Bay that now power the region’s economy.

The corporation, with 8,600 shareholders, has been paying regular dividends since 1978. Quarterly payouts in 2011 were $3.25 per share.

Bristol Bay also provides funding for Marrulut Eniit, a 10-unit assisted living facility in Dillingham. A smaller facility is in Naknek. Marrulut Eniit, Yupik for Grandma’s House, is the first state-licensed assisted living facility in rural Alaska.

Bristol Bay’s fiscal year for 2011 ended in March. It is reporting revenues of $1.6 billion for that period.

For more information please visit

www.firstalaskans.org

CALISTA CORP. Calista saw a major change at the top in 2010, with longtime CEO Matthew Nicolai stepping down from the corporation, which has 15 subsidiaries in such fields as telecommunications, marketing, construction and facility management.

Andrew Guy was named to replace him.

Bethel-based Calista Corp., is focusing on expanding its revenue base beyond government contracting, which provided 69 percent of its 2010 revenue.

The corporation has 13,000 shareholders and a 6.5 million acre land base in southwest Alaska.

In 2010, Calista’s revenues increased 16 percent to $235 million with a net income of $18.3 million.

Work continues on the Donlin Creek gold prospect, with feasibility studies wrapping up and a decision on whether to begin the permitting process. The mine, near the village of Crooked Creek, is being developed by a joint venture of NovaGold Resources and

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Barrick Gold and could have the same economic impact on Southwest Alaska that Red Dog zinc mine has on Northwest Alaska. It could produce up to 1 million ounces of gold annually and employ hundred of workers.

In 2010, Calista acquired two longstanding Alaska businesses, Brice Inc. and Yukon Equipment, Inc. Brice has been in operation for 40 years, doing civil and Arctic construction, commercial gravel and international marine operations. Yukon Equipment was started almost 70 years ago, and provides heavy equipment sales, service, parts and rental. About 30 percent of employees at Calista subsidiaries are Alaska Natives.

Calista formed a new subsidiary, Calista Real Estate, to acquire real estate in the western United States that is in distress or foreclosure.

It distributed $78,000 in scholarships and declared a $2.75 per share dividend.

In July, it announced it was shutting down and liquidating Alaska Newspapers Inc., which ran a chain of five rural weekly newspapers, as well as its quarterly magazine, First Alaskans.

CHUGACH ALASKA CORP. The weak economy and battle over the SBA 8(a) program caught up with Chugach Alaska Corp. in 2010. Revenues totaled $937 million, down from the $1.1 billion it recorded in 2009, as changes in federal procurement policies and the loss of big contracts to competitors affected the bottom line, according to the corporation’s annual report. The corporation received funds from the settlement of the Exxon Valdez oil spill in 2008 and 2009, but none in 2010.

It is the third-highest revenue in corporation’s history. Despite a reduction in revenue, gross margins increased to 12.6 percent over 11.35 percent in 2009.

Net income was $26.5 million.

The corporation, headquartered in Anchorage with a land base in Prince William Sound, has 2,300 shareholders. Its primary business operations are

government and other contract services including base operations support, environmental management, construction management, information technology, education and training, engineering and metal fabrication.

Base operations support services are the core of Chugach Alaska’s business, providing 64 percent of total revenue and 71 percent of total gross margin.

In its construction services company, the completion of a major short-term project in 2009, valued at $109 million accounted for a large part of the revenue reduction in that sector.

Chugach Alaska is continuing to diversify its holdings and improve its competitive strategies and reduce administrative costs.

The corporation also supports a number of internship, training and scholarship programs, as well as its Nuuciq Spirit Camp and cultural programs at its Nuchek Island facility. It contributed $3.4 million toward those programs in 2010.

Dividends of $41.92 per share were announced in 2010, for a total $8 million payout. In the past 10 years,

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Chugach Alaska has paid more than $80 million in dividends.

CEO Ed Herndon stepped down in July of 2011. Chairman of the Board Sheri Buretta was named acting CEO.

COOK INLET REGION INC. Cook Inlet Region Inc. has had many ups and downs in the past decade and 2010 was another challenging year. The Anchorage-based corporation recorded $16.5 million in revenue, down from $24.5 million in 2009.

CIRI is home to diverse businesses, including energy and resource development, oilfield and construction services, real estate, tourism and telecommunications. The corporation is retooling its business strategies, however, to focus less on short-term profits and more toward steady, long-term sustainable growth, President and CEO Margaret Brown said in a statement to shareholders. Investments toward that goal may reduce net income in the next few years.

Its heavy construction and oilfield services subsidiaries performed well in 2010. Successful projects include the construction of a new bridge over the Tanana River east of Tok and several large road projects. Peak Oilfield Service Co. won contracts to support ExxonMobil’s North Slope operations.

CIRI is expanding its energy and clean technology businesses, highlighted by its underground coal-gasification project on the west side of Cook Inlet and its wind power generation project on Fire Island, near Anchorage.

CIRI has extensive real estate and property management interests in Alaska and several western states. Taking advantage of the soft real estate markets in the western United States, CIRI invested in four large multi-family housing developments in Tucson and Phoenix. It is also developing three mixed-use office and retail sites in Anchorage.

CIRI continues to aggressively market its tourism division, which resulted in increases in day passenger counts for its tours in Kenai Fjords and Prince

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William Sound, despite a weak overall tourism market.

Its North Wind environmental remediation subsidiary, which was acquired at the end of 2009, had a strong year. It worked on more than 500 projects across the country.

CIRI has paid dividends every year since 1980, including a total of $22.2 million in 2010. With its 2011 payments, cumulative dividends will surpass $963 million, the total value of the original ANCSA cash settlement. It has more than 8,100 culturally diverse shareholders.

DOYON LTD. Fairbanks-based Doyon Ltd., increased its revenues to $280.2 million in 2010, with a net income of $15.7 million. Its business operations are divided into four “pillars”: oilfield services, government contracting, natural resource development and transitional.

Although oilfield services have traditionally provided the bulk of Doyon’s operating income, in 2010 government services provided two-thirds of the total, or $21 million. Oilfield services income saw a steep drop, from $27.6 million in 2009 to $11.7 million in 2010.

Doyon is the largest landowner in Alaska, with 12.5 million acres and 18,000 shareholders. It is focusing on its mineral, oil and gas resources, most recently working with village and tribal groups in Stevens Village and Birch Creek to do seismic exploration of likely petroleum deposits in the area, which is adjacent to the trans-Alaska oil pipeline. Early indications showed an active hydrocarbon system and more seismic studies are planned.

Doyon is 60 percent equity owner of a joint venture to explore for oil and gas in the Nenana Basin, 60 miles west of Fairbanks. Although an 11,000-foot exploratory well showed inconclusive evidence of commercial quantities of gas in the Nenana Basin, Doyon hopes to do more seismic work in that area.

Doyon is working with Canadian junior mining companies Full Metals

Minerals and FreeGold Ventures and Newmont to explore its lands for gold, silver, zinc, lead and copper. Exploration is continuing in 2011.

Its tourism holdings, including a joint venture with ARAMARK Sports and Entertainment Services, which holds the major concession contract at Denali National Park, showed the effects of the national recession. Doyon’s tourism subsidiary also owns Kantishna Roadhouse and Denali River Cabins in the park region. Revenues for all tourism-related holdings were $3.7 million in 2010, on par with $3.5 million in 2009, but well below the $5.3 million it garnered in 2008.

In 2010, Doyon sold its stake in Angeles Composite Technologies, which manufactures aerospace components.

It contributed $198,000 in earnings.

Doyon contributed $1.4 million to its nonprofit Doyon Foundation.

In a letter to shareholders, Doyon President/CEO Norm Phillips and Chairman of the Board Orie Williams said the corporation has adopted two major five-year goals. One is to boost shareholder hire by a third to 800; the second is to increase pre-tax net income to from $30 million to $50 million.

KONIAG INC. Koniag Inc. moved into its spacious new offices on Near Island, across the harbor from Kodiak in 2010. The 13,500-square-foot building, which it shares with the Kodiak Area Native Association, marks the corporation’s commitment to its roots in the region, said Will Anderson, president and CEO. Koniag saw substantial growth in 2010, fueled in large part by strong performances from its diversified subsidiaries. Revenues increased 29 percent to nearly $150 million, with net revenues up 4 percent.

The bulk of the revenue is through Koniag’s operating companies under the umbrella of Koniag Development

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Corp. Of the $136 million in revenue from these companies, 71 percent is from operations that provide services for federal agencies. Its information technology and telecommunications subsidiaries alone had an 82 percent increase in revenue. The corporation continues to fight to keep Alaska Native preferences intact for government contracts under the Small Business Administration 8(a) program.

According to Anderson, “We have a large base of our shareholders who grew up in a village and have no intention of leaving that village. The 8(a) program is important there as well because it creates an opportunity to pay dividends to those individuals living a subsistence lifestyle in a rural village.”

The corporation maintains a strong real estate portfolio, adding properties in Virginia and Texas, and expects strong growth in that sector. Its investment portfolio returned earnings of $5.4 million, a turnaround from the $6.9 million loss it sustained in 2009.

Locally, Koniag and the Larsen Bay Tribal Council built two 638-squarefoot cabins on the upper Karluk River

to accommodate hunters, fisherman and outdoors enthusiasts, as well as shareholders. The project is designed to help shareholders develop guiding businesses without having to build their own lodge facilities.

NANA REGIONAL CORP. NANA Regional reported its highest ever revenues in 2010, $1.6 billion.

Net income was $41.17 million.

The Northwest Alaska corporation with more than 12,500 shareholders, paid out $20.5 million in dividends.

It earned $146.3 million from the giant Red Dog zinc mine, of which $82 million was distributed to the other corporations under the 7(i) resource sharing provision in ANCSA. Red Dog mine, which is an

economic engine for Northwest Alaska, got an extension when operator Teck Alaska Inc. announced it planned to develop the Aqqaluk deposit. The lead and zinc deposit holds an estimated 51.6 million tons of reserves and is expected to provide another 20 years of mining in the region. Nearly 350 NANA shareholders work at the mine, 58 percent of the work force.

Another local project is the construction of a new Nullagvik hotel in Kotzebue, which is scheduled to open in 2011. Six NANA subsidiaries were involved in the design and construction of the hotel.

NANA also paid out more than $800,000 in scholarships to 275 NANA shareholders and approved a special $2,000 payment to each shareholder over age 65 under the NANA Elders’ Settlement Trust.

Wholly owned subsidiary NANA Development Corp.’s diverse business operations span the globe, employing more than 13,400 people, including 5,000 Alaskans. Of those, 1,315 were shareholders, who earned approximately $48.1 million in wages.

Anchored by tradition, destined for success.

194 Alimaq Drive, Kodiak, AK 99615 | 907-486-2530 | 800-658-3818 | www.koniag.com

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SEALASKA CORP. The government services industry was a driver for Sealaska in 2010. The Juneau-based corporation saw revenues of $223.8 million, up from $196.02 million in 2009. Services accounted for just more than half the revenue. Net income dropped to $15.15 million from $20.29 million.

Land was a major focus for Sealaska in 2010, as it pushed to get the final piece of its remaining ANCSA land entitlement through Congress.

The 79,000-acre parcel will give it an opportunity for long-term, economically sustainable logging operations in the region, according to Jaeleen Araujo, vice president and general council of Sealaska.

Sealaska is looking to create economic opportunities in Southeast Alaska through its Haa Aani subsidiary. It helped establish oyster farms,

increased shareholder employment at its Alaska Coastal Aggregates operation, which supplies construction materials. With Kake Tribal Corp., it’s refurbishing a fish-processing facility in Kake. Haa Aani is also investing in alternative, renewable energy projects such as biomass, hydroelectric and tidal energy.

Sealaska converted its headquarters in Juneau from an oil boiler system to a renewable wood-pellet system in 2010, and hopes to create a market and infrastructure for wood-pellet heating in the region.

A strong timber market in Asia helped Sealaska Timber Corp. launch a second-growth harvest program, which provided 20 percent of the total harvest of 70 million board feet, the highest since 2006.

Sealaska’s government contracting subsidiaries continued to perform well.

It acquired Security Alliance, which provides security guard services in 2010. The subsidiary was named the 2010 Small Business Prime Contractor for the U.S. Department of State.

Sealaska Constructors, which provides

design, construction, infrastructure and environmental remediation services, had a stellar year, earning the “Commanders Coin,” a high honor usually reserved for Army Corps personnel and rarely given to civilians, according to a news release. Overall, the services segment provided $112.3 million in revenue in 2010, over $84.5 million in 2009, with a $3.06 million profit after a $2.11 million loss in 2009.

Sealaska’s gaming segment lost $4.68 million in 2010, after a $2.76 million loss in 2009.

THE 13TH REGIONAL CORP. The 13th corporation, created for shareholders living outside Alaska, has not filed any financial reports or had any communication with shareholders for several years. ❑

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SPECIAL SECTION:

ALASKA NATIVE BUSINESS NEWS

Villages Put Fish Dollars to Work Coastal, river communities spread development opportunities

“We get our CDQ royalties from offshore, then bring them onshore and provide scholarships, vocational training, assistance for commercial fishermen in obtaining permits or vessel improvements that would increase the quality of the fish.”

– Robin Samuelsen President Bristol Bay Economic Development Corp.

Photo courtesy of Bristol Bay Economic Development Corp.

Set netting in Bristol Bay.

BY RINDI WHITE

T

ogiak resident and fisherman Moses Kritz for years dreamed of finding a way to help his community. He knew Bristol Bay salmon are some of the highest quality fish in the world and believed there must be a way to boost prices for fishermen.

“That has always been our dream here in Togiak, that we come up with some kind of value-added type of fish,” Kritz said.

Like many villages along the Alaska coast, Togiak’s economy revolves around commercial fishing: salmon, herring and herring roe, primarily, according to the Alaska Department of Community and Regional Affairs.

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And like many coastal villages, the population is mostly Alaska Native: about 80 percent of the roughly 800 people living there are Alaska Native, primarily Yup’ik Eskimo.

State labor officials said the state doesn’t track the ethnicity of commercial fishermen or people participating in the fishing industry. A lack of data makes it difficult to quantify the impacts of commercial fishing on Alaska Native communities and the number of Alaska Natives who participate in Alaska’s fishing industry, but there’s no question the two are inextricably linked and have been for generations. A demographic study, produced by the National

Marine Fisheries Service, of 136 Alaska villages considered most involved in commercial fishing states that more than half the residents in those villages are Alaska Native.

“Certainly there are a lot of Alaska Natives involved in commercial fishing … pretty much around the state wherever there are Native communities, people were involved in harvesting seafood,” said State Division of Commercial Fishing Assistant Director Geron Bruce.

Residents have been fishing commercially in Togiak “since the sailboat days,” Kritz said. Those days aren’t so long ago – sailboats were the only

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boats allowed by federal law to fish the Bristol Bay fishery from the inception of the fishery in the late 1800s until 1951, when the fishery was opened to powered boats.

But the fishing life is often not easy and many villages can speak of lean years. In Togiak a few years ago, salmon prices were at a historic low and, thanks to high fuel prices and other factors, the cost of fishing was higher than ever.

Residents began selling their commercial fishing permits, Kritz said. The future of commercial fishing in their area looked bleak.

Fishermen had only one local option for selling their fish – Togiak Fisheries, a processing facility owned by North Pacific Seafoods. Kritz and other villagers longed for a second processor to provide competition and boost salmon prices.

Tired of waiting for one to materialize, Kritz – also the president of the Traditional Council of Togiak – helped the Council secure a grant through Bristol Bay Economic Development Corp. and partner with Copper River Seafoods to build a new community-owned processing plant called Togiak Seafoods.

The $5 million processing facility opened in 2009. Last year they processed and sold more than 2 million pounds of salmon and employed 60 people, mostly Togiak residents. Kritz said the focus is high quality fish, marketed fresh in the Lower 48.

“We are teaching, educating our fishermen how to handle their fish in the boat,” Kritz said. The fish are handled carefully and put in ice water as soon as they’re killed and bled, then kept on ice until they get to the processing facility.

Treating the fish with respect – a principal woven into the fiber of Alaska Native culture – has indeed added value to fish marketed through Togiak Seafoods. The facility has been buying salmon at $1.25 this season, one of the highest prices in the region.

A SIMILAR STORY THROUGHOUT COASTAL ALASKA Fish are the fuel that powers communities in coastal Alaska and have been for generations. For thousands of years Alaska Native families have depended on what they harvest from the land,

rivers and ocean for food, clothing and shelter.

When Europeans arrived on Alaska’s shores, fishing quickly became a way for early Alaskans to boost their earning potential. According to Alaska Department of Fish and Game, commercial harvests of herring and salmon date back to the late 1800s.

“The earliest known commercial activity on the Yukon and Kuskokwim was in the early 1900s,” said John Linderman, regional supervisor for the Arctic-Yukon-Kuskokwim rivers for the State Division of Commercial Fishing.

Along the Yukon, buyers with large floating processors came in and provided Alaska Natives with boats and nets and paid them to fish, Linderman added.

“That went on through the 1920s.

Most of the fish taken were salted and put into barrels, and those floating processors would go back to Seattle and put to market,” he said.

But being involved in commercial fishing hasn’t always been a boon. For years coastal Alaska residents could only watch as large fishing companies from the Lower 48 or other countries fished nearby and motored away with the catch.

“The benefits of the commercial fishing industry weren’t getting translated back to the people who had a history of fishing in the region,” said Aggie Blandford, executive director of the Western Alaska Community Development Association.

Meanwhile, local fishermen were finding it more and more difficult to pay for boat repairs, and purchase fuel, nets and other fishing necessities.

“It was getting harder and harder for our people to get loans. The only thing they really have for cash value to the outside world was the Native allotment,” said Robin Samuelsen, president of the Bristol Bay Economic Development Corp., which helped Togiak pay for its new processing plant.

In 1992, the North Pacific Fishery Management Council granted 56 Western Alaska villages fishing rights, allocating them a percentage of the annual fish harvest of certain species in Bering Sea and Aleutian Islands commercial fisheries. The program was later expanded to include 65 eligible

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communities. The program has been tweaked many times since then but remains focused on supporting economic development, alleviating poverty and “achieving sustainable and diversified local economies,” according to a recent Western Alaska Community Development Association annual report.

Although the villages participating in the Community Development Quota, or CDQ, program are primarily Alaska Native communities, the federal program is aimed at improving the economics of the whole community, not just among Native residents. Residents seeking training, grants, scholarships or other help from local CDQ organizations are not restricted based on race, Blandford said.

Blandford added that in those early years, communities leased their quotas to different fishing companies. Now, some of the communities own their own fishing vessels and processing facilities.

“We get our CDQ royalties from offshore, then bring them onshore and provide scholarships, vocational training, assistance for commercial fishermen in obtaining permits or vessel

improvements that would increase the quality of the fish,” Samuelsen said.

Samuelsen also said in recent years Bristol Bay has invested $8 million in fish quality improvements.

“That’s only a fraction of what the CDQ program brings in,” Samuelsen said.

FISH UNDERWRITE OTHER INVESTMENTS Not all the CDQ-related investments are directly fishing related. On the Yukon River a historic fishery is deflating, but the local economic development association is still able to keep residents working and the economy moving forward.

The Yukon River king, or Chinook, salmon fishery is facing a serious decline.

“There hasn’t been any directed king commercial fishing since 2007,” Linderman said.

Linderman explained in recent years the U.S. has not consistently met its objectives under the U.S. and Canada Yukon River Salmon Agreement for the number of king salmon that swim

up the Yukon River to Canada. In an effort to sustain king salmon stocks, the state has limited subsistence fishing on the Yukon and mostly curtailed directed king commercial fishing.

The decline of the commercial fishery may affect some residents’ ability to subsistence fish, Linderman said.

“Many Yukon commercial fishermen use the money they get from commercial activity and pretty much put it directly into subsistence activities,” he added.

It pays for boat motors, fuel, fishing gear and other needs, as well as for supplies for hunting trips, he said. Not having money from commercial fishing means some residents may scale back on subsistence hunting and fishing activities to be more economical.

“Folks who would travel to fish camps, up to an hour up or down the river … we’re now seeing more localized activity where they’ve discontinued using their fish camps and are putting up their smokehouses right in town along the beach,” Linderman said.

A 2009 report from the Western Alaska Community Development

YOU KNOW US, BUT DO YOU KNOW ALL THAT WE DO? Calista Corporation is the second largest of the 13 Alaska Native Regional Corporations.

We are dedicated to our Shareholders, our customers, and our mission.

We are the parent company of 15 subsidiaries, providing services ranging from telecommunications and marketing to construction and facility management.

Delivering excellence in the projects we build, the services we offer, and the jobs we provide.

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Association said the lack of fish poses a very serious problem for villages in the region.

“At the same time, the rural energy crisis has meant dramatically increased heating bills and shipping costs, making it unaffordable to fill boat and snowmachine gas tanks for subsistence hunting, which is critical to the communities’ survival,” the report stated.

Instead of waiting for the fish to return, the Yukon-Delta Fisheries Development Association has sought other ways to employ residents, including hauling freight and gravel, building a new shop and painting a church, according to a 2009 Western Alaska report.

Kwik’pak Fisheries, an associationowned processing plant in Emmonak, is using another renewable resource to keep residents employed when no commercial fishing happens.

Kwik’pak employees harvest logs that come down river in the spring.

The logs, mostly spruce, are milled into three-sided logs suitable for building.

Workers in 2009 built a 1,200-squarefoot “fishermen’s store” that now sells everything from camping gear and berry buckets to fishing supplies.

“None of this would be possible if it weren’t for fishing,” Blandford said.

Blandford added that the program is also reinvesting in fisheries.

Rhodes said Norton Sound Economic Development Corp. recently paid for longline fishing gear and boats so fishermen could scout for new fishing opportunities near Port Clarence and the Bering Strait. The group also funds salmon-egg planting projects in two area creeks in hopes of improving coho and chum salmon runs.

“The organizations are generating

income in the Bering Sea and Aleutian Islands fisheries and bringing benefits back into the region, but they’re also investing in fisheries in the region that otherwise may not have any investment opportunities,” Blandford said.

“They’re building local halibut and salmon fisheries.”

As the CDQ program nears its 20th year, village leaders see hope for a bright and more diversified future for rural Alaska residents, underwritten by salmon, halibut, crab and other ❑ marine species.

SUSTAINING ADDITIONAL ACTIVITIES While fish are still the fuel that powers communities in coastal Alaska, the CDQ program is helping build a more stable economy along coastal Alaska, where high unemployment is a longstanding problem.

In Norton Sound, the Norton Sound Economic Development Corp. recently created a small business initiative program to provide financial and technical support for local entrepreneurs in the corporation’s 15-member communities.

Nome resident Jimmy Adams tapped into that program to begin a driving school to help residents in the area get drivers’ licenses, which makes it easier for them to get jobs and travel.

Gambell resident Edmond Apassingok secured a grant to build a device to improve in-home heating systems, an important tool for residents in the bitterly cold region.

“Any small business opening is a success,” said Norton Sound spokesman Tyler Rhodes. “Economic development in rural Alaska is a challenge.” www.akbizmag.com • Alaska Business Monthly • September 2011

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ALASKA NATIVE BUSINESS NEWS

Empowering People Education is key factor

BY JULIE STRICKER

A

The scholarships helped pay for books and living expenses at the prestigious Medill Journalism School at Northwestern University, where Gusty, who is Yup’ik and Athabascan, earned a bachelor’s degree in broadcast journalism.

She returned to Alaska in 2005, eager to bring an Alaska Native perspective on issues in the mainstream media. Today, she is a news anchor on KTVA-CBS 11 and is lead investigative reporter for the Eye Team Investigates franchise. She is one of only a few

Photo courtesy of Andrea Gusty

ndrea Gusty grew up living a subsistence lifestyle in the small Alaska village of Aniak, but she had big dreams. When she was in high school, she decided she wanted to attend a first-rate journalism program in college, but it was too costly for her single mom to handle alone.

Gusty applied for every scholarship she could find and found strong support from her village corporation, The Kuskokwim Corp., and from Calista Corp., the regional corporation in which her father is a shareholder.

Andrea Gusty, a news anchor for KTVA-TV, grew up in Aniak. She credits support from The Kuskokwim Corp. and Calista Corp., with enabling her to get her journalism degree and frequently speaks with schoolchildren about the importance of education and benefits available through Alaska Native corporations.

Photo by Sarah Qapuk Hobart

Alaska Native journalists in the state and hopes her visibility helps other Alaska Native children take advantage of the benefits provided by the state’s Alaska Native corporations.

She speaks frequently in schools, always telling children to get some higher education, whether scholastic or vocational, and that the corporations are just waiting to help them.

“I tell them the opportunities are out there,” Gusty said.

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A Native woman cleans fish at Camp Sivu near Noorvik. www.akbizmag.com • Alaska Business Monthly • September 2011

The opportunities stem from the strength of Alaskaâ&#x20AC;&#x2122;s Native corporations, which were created almost 40 years ago under the Alaska Native Claims Settlement Act. ANCSA, passed to settle indigenous land claims blocking the construction of the transAlaska oil pipeline, divided 44 million acres of land and $962.5 million between 12 regional and more than 200 village corporations.

The corporations were to use the land and money to seed economic development, but they also were tasked with protecting and nurturing their shareholdersâ&#x20AC;&#x2122; cultural, social and educational needs. The corporations answered the question of how to manage these dual mandates in different ways, says Jim Jager, director of corporate communications for Anchorage-based Cook Inlet Region Inc. In general, the corporations pay dividends to shareholders, but affiliated nonprofits provide a diverse array of social and cultural programs.

NATIVE NONPROFITS In the case of CIRI, affiliated nonprofit organizations provide housing, job training, scholarships and health care, among other things.

Cook Inlet Housing Authority operates housing programs that work to ensure that people in the CIRI region have access to quality, affordable housing. It serves a population living at or below 80 percent of the areaâ&#x20AC;&#x2122;s median income, which includes half of the Alaska Native population.

Nearly 80 percent of its clientele is Alaska Native/American Indian, although the program serves clients of all backgrounds. Jager noted that the authority is frequently singled out by the federal government as a program that is among the best of its class. â&#x20AC;&#x153;These are organizations doing tremendous work,â&#x20AC;? Jager said.

The Cook Inlet Tribal Council provides social services and programs, such as after-school programs, family assistance and drug and alcohol abuse treatment. It also provides career counseling and training and employment assistance, as well as help for small businesses.

The Southcentral Foundation, which oversees health care in the region, is

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another program deemed best in its class. It was designed from the ground up based on Alaska Native community needs and values. It is the largest of CIRI’s affiliates, employing more than 1,400 people in a variety of programs that serve 60,000 people in Anchorage, the Mat-Su region and surrounding rural areas. It includes the Alaska Native Medical Center, which serves Alaska Natives statewide.

Other Alaska Native corporationbacked programs with statewide impact include the Alaska Native Heritage Center, Koahnic Broadcasting and Alaska Native Justice Center.

EDUCATION BENEFITS Shareholder education, however, is a key. Since it was formed in 1983, CIRI Foundation has distributed nearly $18 million for 11,500 individual scholarships and grants. CIRI is the primary contributor to the foundation’s endowment.

“That’s passing on a benefit to shareholders and their descendants,” Jager said.

The benefits are substantial. According to a report prepared in March

by CIRI, Doyon Ltd. and Arctic Slope Regional Corp., the 12 Alaskabased regional corporations paid out $171 million in dividends to shareholders in 2008 and contributed $24.3 million to health, environmental, educational and other organizations.

The cultural and social dividends are harder to measure, but no less important.

The Inupiaq Eskimos of on Northwest Alaska are people who “walk with one spirit in two worlds,” as described by the late Robert “Aqqaluk” Newlin, a beloved Inupiaq Eskimo elder and former board member of Kotzebuebased NANA Regional Corp. Newlin understood the importance of education and learning modern skills, but not at the expense of the people’s traditions and identity as Inupiaq.

“There’s a strong desire to continue our Inupiaq way of life,” said E.J. Doll Garoutte, vice president of shareholder relations for NANA Regional.

NANA employs resource technicians in the region’s villages, who act as liaisons between the tribal and village governments and NANA. They

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help villagers apply for jobs and access programs provided by NANA, such as burial assistance or economic development.

“They help us better understand the needs of shareholders in those villages,” Garoutte said.

Providing jobs for shareholders is a key ideal for NANA Regional, but the corporation also plays a vital role in helping to preserve the traditional cultures of Northwest Alaska.

Newlin, who died in 1989, bequeathed funds to start The Aqqaluk Trust, which today provides scholarships, cultural programs and language preservation programs supported by NANA Regional Corp. and NANA Development Corp.

SAVING THE LANGUAGE A few years ago, a study showed that the Inupiaq language was fading quickly, said Sarah Hobart, development director for The Aqqaluk Trust.

Only 14 percent of the people in the NANA region understand Inupiaq fluently, and 92 percent of those who speak it are more than 65 years old.

Newlin was aware that the cultural knowledge, and the language especially, fades a little more each time an elder dies, she said.

“You can’t lose your identity and the part of the culture that makes the people of the NANA region a unique people,” Hobart said.

The trust teamed up with the Rosetta Stone language software company to create programs to help teach the Inupiaq dialect spoken in Northwest Alaska. One program covering the coastal dialect was completed in 2007 and a second, which covers the inland Kobuk dialect, was completed in 2010.

NANA bought thousands of copies and distributed them free to each household in its region.

They feature local people and scenes with the phrases, bringing the language back home to its roots.

Hobart said they have been popular.

There is also an Inupiaq language immersion school in Kotzebue that teaches children as young as 3. The trust also is funding an oral history project that will allow historians to go into the villages to record the stories from the elders.

On a broader front, Alaska Native nonprofit organizations such as Doyon Foundation in Fairbanks, Sealaska Heritage Institute and the Alutiiq Heritage Foundation in Kodiak feature a “Native word of the day” on their websites or in local publications. Hobart said NANA will be launching its Inupiaq word of the day soon.

It’s sometimes an uphill battle to get kids to want to learn about their culture.

Many of NANA’s shareholders live in Kotzebue, Anchorage and Fairbanks – urban settings with little in common with Inupiaq culture.

“I do think we’re losing that connection,” Garoutte said. “We’re competing with video games, Wii and computers and the Internet.”

But take young people to a place without electricity or modern amenities and they embrace their culture, Hobart said.

KEEPING THE CULTURE The Aqqaluk Trust runs Camp Sivu, a cultural camp on the Kobuk River near Noorvik. There, children ages 9 to 15 stay in wall tents and go fishing, pick berries and learn about their oral traditions from elders. The camp is funded by NANA, with contributions from Teck, which runs the giant zinc mine at Red Dog, and some grants, Hobart said.

“This is a way to take kids from Kotzebue and Anchorage and all over Alaska that are from the NANA region and show them what it means to Inupiaq,” Hobart said. “They love it. It’s good for them to learn from the elders and to hear the stories.

At camp, it’s just going back to the basics.”

Other Alaska Native corporations sponsor similar camps, such as Chugach Alaska Corp.’s Nuuciq Spirit Camp on Nuchek Island in Prince William Sound. Afognak Native Corp. sponsors Dig Afognak culture camp and in Southeast Alaska, the Sealaska Heritage Institute hosts the biennial Celebration festival to help perpetuate Tlingit, Haida and Tsimshian cultures.

Sealaska Heritage Institute, the nonprofit cultural arm of the Juneaubased Sealaska Corp., also sponsors the Latseen Leadership Academy, geared

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toward students in the sixth, seventh and eighth grades. “Latseen” is a Tlingit word that means “strength of mind, body and spirit.”

The students learn traditional tasks such as harvesting spruce roots, making drums and preserving fish, as well learning more about their culture, language and history in a group-centered atmosphere. They also learn geometry and algebra while making armor and get exercise playing traditional Native American sports such as lacrosse.

Students also receive high school and college credits.

In Northwest Alaska, educational scholarships are tied to culture. In 2010, The Aqqaluk Trust distributed $812,000 in scholarships to 350 shareholders for vocational to post-secondary to doctoral programs, Hobart said.

Students must meet specific qualifications to get a scholarship, such as GPA. They also must carry out the ideals of Robert Newlin and explain how they will use the knowledge they gain from the scholarship to help further the cultural revival in the NANA region, Hobart said.

Maver Carey, president/CEO of The Kuskokwim Corp., was herself a recipient of scholarships from the corporation. TKC, which represents 10 villages strung along the Kuskokwim River in Southwest Alaska, funds scholarships for 25 to 30 students annually. Some of those students carry 4.0 grade point averages and Carey said the corporation is searching them out for employment opportunities with the corporation.

“Hopefully they’ll come to work for us and run one of our subsidiaries,” Carey said, noting they had just hired two summer interns.

She is looking at today’s students as potential leaders for the future. She said they are talking to students in the fifth and sixth grades about starting to think about future career opportunities. It’s a discussion Gusty tries to have with students when she talks at schools in Anchorage.

“We do need those strong Native leaders in the next generation,” Gusty said as she was heading into the television studio to prepare for the day’s broadcast. “You do need ❑ that education.” www.akbizmag.com • Alaska Business Monthly • September 2011

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SBA 8(a) Regulation Restructure ANCs set to work with new rules

BY GAIL WEST

U

.S. Small Business Administration officials stood before a crowd of Alaska Native business people recently and outlined new regulations put in place this spring to govern the SBA 8(a) program. At a National 8(a) Association conference held in late June at Anchorage’s Marriott hotel, Marie Johns, deputy administrator for SBA, told attendees the government agency has spent the past four years developing and refining new regulations for minority contractors in the 8(a) program. She outlined three goals for the new regulations: 1. Implement statutory requirements.

2. Reduce waste, fraud and abuse.

3. Strengthen the program by ensuring benefits flow to the right small businesses.

Reaching the final goal through the regulation, she added, will require firms owned by Native organizations to report how they have helped their communities through the work done under their 8(a) contracts. Establishing tracking and reporting methods have been postponed for a six-month period while SBA conducts tribal consultations.

NEW REGULATIONS These new regulations took effect March 14, and were the result of wide-ranging complaints levied primarily by senators Claire McCaskill and John McCain. They charged that the federal government was giving unfair advantage to Alaska Native contractors by giving them access to sole-source contracts of any size while limiting other minorities to smaller

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contracts – $4 million or $6 million, depending upon the type of contract.

“McCain has just come out with this stand in the last year,” said Ron Perry, board president of the National 8(a) Association. “We’re in the worst recession in the last 110 years and everyone is looking for waste, fraud and abuse, but these programs create jobs. Certainly they need to be monitored – but if the programs work, they need to continue.

They’re tools to provide jobs and we don’t want to see them go away.”

Perry said the government wants to make sure the benefits earned through the SBA program flow down to corporation shareholders, but the methods used to measure those benefits and how they reach shareholders are both open questions. To help answer those questions, Perry added, the Native American Contractors Association and the Alaska Native Village CEOs Association put together proposals they submitted to SBA during the June conference. The National Congress of American Indians and the National Center for Indian Enterprise Development have both expressed their support for the proposals.

“There are a number of things you need to consider,” Perry said. “You shouldn’t focus any returns until after three years. Most businesses fail within the first year or two. You have to consider how you can provide benefits and continue building the company. After that, we have to determine how and what we track to provide meaningful measurements.”

HAVING A VOICE IN CHANGES Perry said Congress and the SBA will

make those determinations, but the triad of organizations – N8(a)A, NACA and NCAI – want their members’ voices to be heard before those decisions are made. A tribal consultation during the conference provided one occasion, and the proposals put forward by the three organizations provided another.

“Something Congress and SBA have to understand,” said Jennine Elias, external affairs coordinator for NACA, “is that while some Alaska Native corporations have been very successful under the 8(a) program, many tribes, Alaska Native and Native Hawaiian organizations are just now entering the field. Since we have many new contractors and new regulations, we’re telling people on the hill that we need to let these significant reforms work before making additional changes.”

Elias added that today, there are more than 225 Alaska Native corporations with 8(a) subsidiaries, 185 (Outside) tribal and about 18 Native Hawaiian organizations.

The new regulations covering the 8(a) Business Development Program represent the first comprehensive revisions in more than 10 years, according to John Klein, SBA’s associate general counsel for procurement law. These revisions include significant changes to income, joint ventures, mentor/protégé relationships, tribes and Alaska Native corporations, military relationships and community benefits.

INCOME The final rule adds objective criteria to determine economic disadvantage based on personal income ($250,000 for initial eligibility, $350,000 for

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continued eligibility) and total assets ($4 million for initial eligibility, $6 million for continued eligibility) Subchapter S Corporations: This provision will eliminate income reinvested in the firm or used to pay taxes from consideration in determining economic disadvantaged

JOINT VENTURES Joint ventures are now required to be in writing, don’t need to be a separate legal entity, do not have to have separate employees, cannot be awarded more than three contracts in a two-year period without a finding of general affiliation, and allows the same two entities to form additional joint ventures with each having the ability to be awarded three contracts over two years. The 8(a) partner to the joint venture must perform 40 percent of the work (this replaces “significant portion” language in the previous regulations). In an unpopulated JV (or a JV populated only with administrative personnel), an employee of the 8(a) managing venture must be the project manager. With an unpopulated JV (or a JV populated only with administrative personnel) the amount of work done by all partners will be aggregated, and the 8(a) partner must perform at least 40 percent of all work done by the JV.

MENTOR/PROTÉGÉ The new regulation specifically allows nonprofit mentors. Allows a mentor up to three protégés up to one time.

Requires mentor assistance to be tied to protégé’s SBA-approved business plan.

TRIBES AND ANCS A firm owned by a tribe, Alaska Native corporation, Native Hawaiian organization or Certified Development Company may not receive a sole-source 8(a) contract that is a follow-on contract to an 8(a) contract immediately performed previously by another participant (or former participant) owned by the same tribe/ANC/NHO/CDC.

MILITARY SERVICE The changed regulations allow owners of 8(a) firms called to active military status to elect to be suspended in order not to lose any of their 9-year term in the program.

COMMUNITY BENEFITS An additional rule in the new regulations requires ANC, NHO, and CDC organizations to report benefits flowing back to communities – and this is the requirement that is in its six-month hiatus while SBA and 8(a) participants talk with each other about how this reporting will be done.

NACA submitted a proposal to SBA at the June conference that would set the reporting into six categories – all are to report benefits to Native or other communities as a direct or indirect result of the organization’s participation in the 8(a) program. The six categories proposed are health, social and cultural support; education and development; lands; economic and community development; employment; and economic benefits.

STIMULATING THE ECONOMY “In Alaska, ANCs are stimulating the state’s economy,” Elias said. “They’re hiring Native and non-Native employees in a time of high unemployment. They have operations in all 50 states and are employing more than 55,000 people. They are benefiting whole communities and Congress needs to put that into perspective.

“I, myself, have benefited from the 8(a) program. I’m a Bering Straits shareholder, and I earned my undergraduate degree and two masters’ degrees on scholarships,” she added. “Kawerak, in collaboration with the Bering Straits Native Corp., built a wind turbine in Nome to help offset the high cost of fuel. Afognak and NANA have contributed to the preservation of their languages. Eighty percent of Sealaska’s work force is Alaska Native. We see the benefits.”

According to the ANCSA Regional Association’s annual report for 2010, ANCs, energized by Native 8(a) contracting, have provided more than 35,000 jobs worldwide – nearly 14,000 in Alaska. In 2008, the 12 Alaska Native regional corporations distributed $171 million in dividends to shareholders. That dollar amount represented 66 percent of net profits. Also in 2008, Alaska Native regional corporations contributed $11.1 million in educational scholarships to more than 3,200 recipients.

Elias added that Alaska’s Native corporations, as a group, are the second highest taxpayer in the state, behind the oil companies.

PROTECTING THE PROGRAM According to NACA and the National 8(a) Association, the Alaska Native contracting community can work with the regulation changes, although they remain alert to additional challenges from members of Congress.

“Our role in all this is to watch, educate and protect the program as a whole for all minority businesses,” Perry said.

“We don’t want one minority group attacking another. As a matter of fact, the Hispanic minority has the smallest number of contracts – even though they have the highest number of small businesses.”

Perry added that ANCs are providing benefits to their shareholders from a wealth of income-producing businesses, not all relating to the 8(a) program.

“NANA’s oilfield services have nothing to do with federal contracting,” Perry said. “NANA has a very high employment rate from its shareholder population.”

Perry also enumerated a number of benefits coming back to shareholders from the corporations, regardless of the income source.

“Social and cultural programs,” he said. “Community-based meetings, scholarships and apprenticeship programs, K-12 programs, internships, board and leadership training – all come to shareholders from the corporations. There’s also energy assistance programs and an elders’ trust, sort of like a permanent fund dividend, to help our elders.”

ANCs have taken advantage of the learning and income opportunities of the SBA 8(a) program over the last several years, and have bootstrapped their way to becoming the successful organizations they are today.

“We’ve followed the rules,” Perry said. “They gave us the playbook and said ‘here are the tools.’ Everyone has a level playing field, but you have to have the drive, the right management system. A lot of it is simple hard work.

If you go out and use those abilities and advantages, well good on you. That’s the purpose of the program – to give you the abilities to grow out of it.” ❑

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Sealaska Heats Headquarters With Wood Juneau first bioenergy commercial site

Photo courtesy of Sealaska Corp.

This boiler, at Sealaska Plaza headquarters in Juneau, was converted from an oil-fired boiler system to a wood-pellet system in mid-November 2010.

BY JULIE STRICKER

S

ealaska Corp. is generating some heat over a move it made last November – and it’s welcoming the warmth.

The Alaska Native corporation converted the oil-fired boiler system at its Sealaska Plaza headquarters in Juneau to a wood-pellet system just as winter was settling in. The boiler system was fired up in mid-November 2010, making Sealaska Plaza the first commercial building in Alaska to convert to bioenergy.

“It’s worked really well. It kept the building warm,” said Nathan Soboleff, renewable energy program director for Sealaska subsidiary Haa Aani.

It also saved the corporation about 25 percent of its yearly heating costs for the 65,000-square-foot building, which burned about 35,000 gallons of heating oil annually. That savings is increasing as the cost of fuel oil continues to rise. Over the next 25 years, Sealaska expects the boiler to save it more than $1 million in energy costs and to keep

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8,400 tons of carbon dioxide out of the atmosphere that would have otherwise be generated by heating oil.

The boiler would burn less than 300 tons of wood pellets annually, Soboleff said. A ton of wood pellets has the BTU equivalent of 1.5 cords of moderately seasoned wood and costs about $300 – equal to a $2.52 gallon of fuel oil – a price that hasn’t been seen in Southeast Alaska in more than five years. That equates to a cost of $90,000 per year, compared to $140,000 for 35,000 gallons of fuel oil at $4 per gallon.

The wood-pellet boiler technology already exists and has been used in Europe for decades. It requires little maintenance and creates little waste.

GROWING DEMAND Saving money is good, but Sealaska, which is the Alaska Native regional corporation for Southeast Alaska, has larger goals. The idea is to help create a demand for biofuels in Southeast, which would give the corporation another

market for its forest resources and potentially provide jobs for shareholders.

The corporation is using the project to show that Alaska facilities that convert to bioenergy can save money, reduce their carbon footprint and create demand for a local resource: wood.

Biomass is the use of plant material to create renewable energy. Sealaska is using wood pellets, which are made of pressed sawdust and wood chips, with no glue or fillers, so they burn cleanly.

The pellets themselves are carbonneutral. They resemble processed rabbit food, are dry and produce little to no visible emissions and little ash. Even the ash is compostable.

“What we are doing is growing the demand for wood pellets and hoping to one day grow our own industry,” Soboleff said.

Even before it was officially launched, Sealaska’s project, funded in part by a $510,000 Denali Commission grant, was already generating interest.

The U.S. Coast Guard plans to install

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a wood-fired boiler at Sitka Air Station on Japonski Island. The air station, not including housing for personnel, burns about 90,000 gallons of heating oil annually, and a wood-pellet boiler will save heating costs and help it meet federal mandates on reducing carbon emissions. It also is looking at converting stations in Juneau and Ketchikan.

The Coast Guard is hoping to work with Sealaska to import, store and deliver the pellets. Since there are no pellet manufacturers in Southeast Alaska, Sealaska is importing the fuel from a plant in Washington state.

INTERIOR EXAMPLES There is a commercial pellet manufacturer in Alaska, but it’s near Fairbanks.

Superior Pellet Fuels, which began production in August 2010, can produce 30,000 tons of wood pellets annually. It is eyeing increased demand by homeowners in the Interior, which has been plagued by poor air quality in the winter. The clean-burning pellet stoves could help offset that problem, plant managers say.

Some larger facilities in the Interior have also turned to wood heat, although they are using local wood instead of wood pellets.

After being forced to cut electives such as music and art in order to pay its $300,000 fuel bill, the school in Tok installed a wood-fired boiler in November. Instead of using wood pellets, it is fueled by waste wood and trees cut in local forest-thinning projects – a priority in an area that has seen major forest fires in recent years. Dozens of trees can be stuffed whole into a wood-chipper. The chips are then fed into the boiler by a conveyer belt. The process is saving the Alaska Gateway School District more than $250,000 dollars annually.

In Tanana, two wood-fired boilers were installed in the local laundry/ shower facility in 2007. They use about 50 cords of locally harvested wood annually, which has cut their heating fuel consumption in half. Tanana hopes to use state and federal funding as well as private loans to put bio-energy systems in the school, senior center and other local facilities in the next couple of years.

What kind of system they will install has not yet been determined.

DELIVERY CHALLENGE For Sealaska’s project, Soboleff said creating the delivery infrastructure to deliver the wood pellets in bulk has been the biggest challenge. Right now, burning wood pellets isn’t that much different logistically from burning fuel oil. The fuel must be imported and delivered to a home or business. But instead of having fuel trucks traversing the streets, Soboleff wants to create system of pellet trucks that would deliver the fuel. It also needed a place to store the pellets until they are delivered.

Sealaska is also working with local plumbing and heating businesses that are learning how to retrofit oil boilers to use wood pellets and repair and install the wood boilers.

“You can create a whole new sector,” he said.

For instance, companies that used to sell, service and install traditional boilers are offering wood-pellet boilers and stoves as another product. Companies that deliver home heating oil may one day deliver wood pellets.

Bioenergy is a way of creating jobs for shareholders, whether in increased timber harvest, harvesting and transporting the raw materials, or woodpellet manufacturing and delivery.

“There are a lot of jobs to be had in biomass,” Soboleff said.

It fits into Sealaska’s goal to create sustainable “green” jobs, said Dixie Hutchinson, assistant director of corporate communications for Sealaska.

“This is an industry sector that’s absolutely fantastic for the entire state of Alaska,” she said. “Sealaska is is taking a risk by creating this industry. We’re hoping this will create an industry and demand for wood pellets.”

Sealaska isn’t looking into getting into the wood-pellet business. They want to show that there is enough demand for the pellets to persuade another company, such as Viking Lumber, which operates a mediumsize sawmill near Klawock, to create a manufacturing plant in the region. That would create new sustainable employment opportunities in an area hit hard by logging cutbacks and sawmill and pulp mill closures.

But there are costs involved. In the timber industry, the logistics of moving the material around can be

costly. It’s also expensive to dry wood in the pellet manufacturing process, so a plant would have to have a ready supply of very inexpensive raw materials and a strong demand for the finished product.

The raw materials already exist on Sealaska lands and a biomass industry could have a long-term effect on Sealaska’s silviculture methods.

Biomass is a low-value product, especially compared with the old-growth timber Sealaska usually harvests. Oldgrowth trees are far too valuable to be turned into wood pellets, but the corporation has hundreds of millions of trees of little to no commercial value that could be harvested for biomass, Soboleff said.

In addition, where the old-growth once stood are stands of second-growth trees that have been carefully managed to create sawmill-grade wood.

Through intensive management such as thinning and pruning those stands, what would take 250 years to reach commercial growth is being replicated in 65 to 75 years.

The byproducts of that management, which is now waste, also could be turned into wood pellets.

Sealaska is banking that its pilot project will create enough demand to make the costs reasonable.

High fuel prices are working in its favor.

Sealaska hopes the promise of a locally produced, relatively inexpensive and environmentally friendly energy source will convince more people, homeowners and businesses alike, into converting to wood pellets.

In Juneau, Soboleff said facilities managers from a number of local commercial and government buildings have toured Sealaska’s plant.

“People that are looking at our boiler are business owners, facilities managers, school districts – people who know the cost of operating their facilities,” he said. They walk away impressed with the system’s efficiency and cost savings.

“People are saying they want to use a local resource, but if oil is 5 cents cheaper, that’s what they’ll buy,” he said. With $6 per gallon fuel in many areas, using wood pellets is a 50 percent cost savings. “The economics ❑ are there.”

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Solstice Advertising Agency

Photo courtesy of Solstice Advertising

The dynamic Solstice Crew. (Left to right) Back row: Scott Correy, Michelle LeKites, Kathleen Bowman, Jennifer Castro , Teeka Ballas, Walter Cameron, Laura Tauke, and Eric Burman. Front row: Alexis Roskelley, Lincoln Garrick, Ian Laing and Elizabeth O’Toole. Not pictured: Breanna Moss.

Award-winning, Native-owned

BY LOUISE FREEMAN

T

ake a bunch of people talented in marketing, public relations, graphics, Web design and copywriting, form them into working teams, and throw in a strong leader full of ideas – then shake well. In three short years, what have you got? An award-winning advertising agency known for its creative, effective ad campaigns. Solstice Advertising, a subsidiary of Calista Corp., is a full-service Native-owned advertising agency located in Anchorage, which provides a wide range of services, including everything from tra-

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ditional marketing and public relations to Web and mobile development.

EFFECTIVE LEADERSHIP Solstice was established in 2005, but in the last three years, it has undergone a remarkable transformation, tripling its staff and bringing on board a new president, Lincoln Garrick. First hired at Solstice as account supervisor in 2009, Garrick worked there for a short five months before taking a position as communications director at Calista. He served in that capacity for 18 months

before returning to Solstice in September 2010, this time as president.

Garrick brought a varied background and diverse work experiences to the job. Like many long-time Alaska residents, Garrick has worn many hats since he arrived in Alaska from Chicago in 1994. He worked as a mountaineering guide, paramedic instructor and project director at The Imaginarium in Anchorage. Garrick became an assistant professor at the University of Alaska Anchorage, teaching in the adventure leadership department before

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returning to school to get his MBA at Alaska Pacific University. Receiving his degree in 2008, Garrick said he “dove headfirst into marketing.”

Garrick entered a field that is changing at head-spinning speed. “Advertising has reinvented itself in the last five years,” Garrick said. To keep up with these changes, Solstice has added copywriting, Web development, client insight and strategy staff. “It’s an advantage to have staff not married to traditional channels and ways of doing things. You have to be able to put messages where people are and where people are is changing,” Garrick said.

Under his leadership, Solstice has garnered a number of awards at the state, national and international level.

The company has won Summit International Awards in marketing communications and received recognition from the Association of Marketing and Communications Professionals.

In 2010, Solstice received several Aurora Awards from the Public Relations Society of America (PRSA), Alaska Chapter; awards given for comprehensive public relations campaigns.

Solstice received a first place award in the field of public service for a wetlands awareness campaign for the U. S. Army Corps of Engineers, and another first place award in the field of multicultural public relations for brand implementation for Cook Inlet Tribal Council. Awards of Excellence are also given by PRSA for design, creation and production of individual public relations tools such as video material or websites. Solstice received a total of five Awards of Excellence in 2010, including recognition for an annual report for Kikiktagruk Inupiat Corp., radio material for the Anchorage Opera, and an intern recruitment exhibit for the Alaska Department of Fish and Game. The recruitment exhibit was created with a “Choose Your Own Adventure” theme designed to appeal to young people.

DIVERSE CLIENTELE The broad range of these projects reflects the diversity of Solstice Advertising’s clientele. Approximately one-third of their clients are Alaska Native nonprofits and businesses, another one-third are commercial, and the

rest are State and federal government.

When Cook Inlet Tribal Council (CITC) needed help in presenting a unified identity to their multicultural audience, they turned to Solstice Advertising. CITC administers 35 different educational, social and employment programs and needed some way to pull together these diverse programs under one clearly recognizable brand.

Solstice rolled out a new logo, created a website and wrote, designed and produced printed materials and signage for CITC’s facilities.

Solstice has several clients in the field of resource development. For the past five years, Solstice has provided integrated communications for Donlin Gold (formerly known as Donlin Creek LLC), which is overseeing the exploration of one of the world’s largest undeveloped gold deposits, located in Western Alaska. Solstice shaped an effective communication strategy, taking into account public misconceptions about the project and the need for cultural sensitivity. Solstice organized community forums and did work force recruitment. The effectiveness of Solstice’s campaign strategy has been shown in the increased local support of the proposed gold mine and the high rate of Native hire during the exploration process.

8(A) CONTRACT SUCCESS Although Solstice received SBA 8(a) status in 2010, the majority of their projects are competitively bid and the only one executed under an 8(a) contract to date has been research and rebranding work for the U.S. Army Corps of Engineers (USACE), Regulatory Division. The USACE came to Solstice with the goal of raising their profile in the state. It was a challenge, Garrick said, because the USACE’s customer base includes everyone from BP to a placer miner to the rural resident who wants to build in her backyard, which just happens to be a wetland.

The Solstice team produced a stepby-step video of the permit application process. Now, customers can go through the self-guided tutorial and get many of their questions answered. A new 14-page, pocket-sized field guide produced by Solstice has been such a success it has improved compliance

with Corps regulations. By making more Alaskans aware of the important role played by the USACE in protecting Alaska’s wetlands, Solstice’s public relations campaign yielded an unexpected benefit: aiding in job recruitment.

“The campaign has helped not only with their mission, but also with human resources,” Garrick said.

TEAM WORK Designing effective ad campaigns that get measurable results – how does Solstice do it? Garrick said the answer can be found in their team-based approach.

At most ad agencies, copywriters are in one room, all the graphic artists in the next, and the project will move from department to department, being designed, developed and then tweaked by one person after another as it makes its way to completion. Instead, at Solstice, each project is assigned to a team, and the team is with the client throughout the whole process.

“You have to invest yourself in your client’s world, plan out things before you even start the work. It does require a commitment to staff, preparation and commitment to the client. Solstice has made that commitment to their clients and it has definitely generated results,” Garrick said.

Solstice also is unusual in that they do not bill hourly but identify the scope of the work, map it out, and determine the associated fee.

“That way, there are no question marks, no curveballs,” Garrick said, also pointing out that hourly billing encourages inefficiency. “We need to get it right the first time.”

Being up-front about fees is beneficial in other ways. “Calista communicated to its subsidiaries that we must be transparent and ethical and this is the best way for us to do this,” Garrick says. “This is the Yup’ik way.”

Garrick also attributes much of the success of Solstice Advertising to its parent company. “We wouldn’t be where we are without the investment of Calista Corp,” Garrick says. “Andrew Guy (Calista president and CEO) and many others have recognized that when a creative organization is given a little bit of space and seeding, there are really ❑ great things we can do.”

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SPECIAL SECTION:

ALASKA NATIVE BUSINESS NEWS

Growing ANCSA Leaders New generation steps up to corporation management

BY JULIE STRICKER

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Photo courtesy of Bristol Bay Native Corp.

A

ndrew Guy was an elementaryschool student in the small Southwest Alaska village of Napaskiak when President Richard Nixon signed the Alaska Native Claims Settlement Act in 1971.

“I heard a lot about it,” he said.

“They (the elders) said ‘this is a tool you could use to benefit our people.’ I’m really cognizant of the original intent of ANCSA, which is to improve the social and economic status of our people.”

Guy became a shareholder in the Napaskiak Village Corp. and the Calista Regional Corp. He earned a business degree from the University of Alaska Fairbanks and a law degree from the University of Colorado, helped by scholarships from Calista. He interned at Calista and started working in the corporation’s planning department in 1986. Over the years, he’s held a number of positions in the corporation, and in 2010 he was named president and CEO. He’s one of a generation of welleducated, business-savvy and experienced Alaska Native leaders who have grown up with ANCSA. Together, leaders such as Guy; Jason Metrokin of Bristol Bay Native Corp.; Aaron Schutt, who works at Doyon, and his twin brother Ethan, who works for Cook Inlet Region Inc.; Gerad Godfrey of Afognak Corp.; and Maver Carey of The Kuskokwim Corp., to name just a few, have reaped the benefits of 40-yearold legislation and its benefits to forge a stronger future for Alaska’s Natives.

“The torch is being passed to a new generation of leadership,” said Bristol Bay’s Metrokin. “We’ve learned a lot over the years.”

The ANCSA legislation was written to settle long-standing aboriginal land claims. It divided 44 million acres of land and $962.5 million among 12 regional and more than 200 village corporations. The corporations were

Jason Metrokin, president and CEO, Bristol Bay Native Corp.

given two mandates: to provide for shareholders financially and to protect and foster their social and cultural heritage.

“We’re not GM,” said Aaron Schutt,

senior vice president and chief operating officer for Doyon. “We have a cultural component other corporations don’t have.”

www.akbizmag.com • Alaska Business Monthly • September 2011

Photo courtesy of Calista Corp.

Calista Corporation President/CEO Andrew Guy

ANCSAâ&#x20AC;&#x2122;S INFANCY ANCSA was an ambitious piece of legislation and problems soon became apparent. Essentially, the Alaska Native corporations were built backward, Cook Inlet Region Inc. Communications Director Jim Jager said. Under the traditional business model, a company would come up with a product or service and a business plan and then try to find money to develop it.

The Alaska Native corporations had money, but little else. In the early 1970s, few villages had schools that went past sixth grade and few Alaska Natives had a college education. â&#x20AC;&#x153;In the beginning, we really didnâ&#x20AC;&#x2122;t have the experience, the business background,â&#x20AC;? to run a multi-million-dollar corporation, Guy said.

Millions of dollars evaporated as illadvised investments failed one after another. Some corporations filed for bankruptcy protection.

Beneficial legislation in the late 1980s and 1990s brought them back from the brink. In the past decade, all have become profitable and some are bringing in more than a billion dollars in revenue annually.

But even when they were suffering financially, the corporations were

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investing in their shareholders and their shareholders’ descendants. Scholarships, internships, and training programs helped foster a new generation of Alaska business leaders who understand business and the deeply rooted aspects of their culture. They’re ready to take the corporations forward.

NEW LEADERSHIP “Over the last 10 or 15 years, we’ve spent a lot of our time and effort building global companies,” said Metrokin, president and CEO of Bristol Bay Native Corp. “We want to bring that back and show there are good business opportunities in Bristol Bay. We’ve learned a lot.”

Metrokin’s father served as chairman and CEO of Koniag Inc., but Metrokin said he didn’t feel a strong connection to his Native heritage while growing up.

“I didn’t have a lot of connectivity as a child and young adult, having never lived in a village,” he said. It wasn’t until he had graduated from college and started working with village corporations in the loan department of the National Bank of Alaska did he start to get a feel for life in rural Alaska.

He sees his role at Bristol Bay Native Corp. as one in which he works to “live up to the meaning of ANCSA, enriching the lives of Bristol Bay shareholders.”

Bristol Bay has had a long history as

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a quietly successful corporation (“We don’t brag,” Metrokin said, laughing) and today is one of the three largest privately held corporations in Alaska, with $1.6 billion in revenue in fiscal year 2010.

“It’s been a growth process for us, but we’re still staying true to our roots and ANCSA foundation,” he said. “The real challenge is getting back to showing success can be found locally.”

He’s looking at tourism and renewable energy as two promising areas, but said government contracts will continue to be key for Alaska Native corporations.

As far as the next 40 years, Metrokin and other Alaska Native leaders say they must figure out how to engage today’s young people, provide for their education and keep them in tune with their culture and involved with the corporations. At the heart of the problem is the issue of corporation enrollment.

Photo courtesy of Thom Leonard/Calista Corp.

Photo courtesy of Thom Leonard/Calista Corp.

Calista Corp. board members hold a public meeting in Bethel in February.

it – he is what is termed an “afterborn,” an Alaska Native who was born after the ANCSA legislation was signed in 1971. Only those alive when ANCSA became law were allowed to enroll in village or regional corporations.

The thinking, Aaron Schutt said, is that descendants would inherit shares from their parents and grandparents.

The reality is that it hasn’t happened that way and many shareholders’ children and grandchildren do not own a stake in the corporations.

“They feel like they’re on the outside looking in,” Metrokin said.

The regional corporations have addressed the matter in different ways.

Five of them have voted to enroll descendants as shareholders: Doyon, NANA, Arctic Slope, Sealaska and Calista. Today, 70 percent of Arctic Slope’s shareholders were born after 1971. Some village corporations have also opened enrollment.

“I think it’s important,” Aaron Schutt said. “(Stock ownership) gives them a stake in our corporation.”

Others take different approaches.

Gerad Godfrey, external relations manager for Afognak Native Corp., said the village corporation’s benefits, such as training programs and scholarships, are open equally to shareholders and their descendants. Afognak offers cultural and language-preservation programs.

It offers cash startup payments to prospective businesses, scholarships and

CORPORATION MEMBERSHIP Aaron Schutt and his twin brother, Ethan, now senior vice president of land and energy development for CIRI, grew up in Tok in the 1970s and ’80s.

Aaron said he doesn’t remember hearing much about ANCSA, except for discussion of what it might mean for tribal status in Alaska.

“I don’t think a lot of people actually understood it,” he said.

At the time, he didn’t feel vested in

Calista C li t shareholders h h ld ttake k ab breakk during the 2011 Annual Meeting of Shareholders in Akiachak.

www.akbizmag.com • Alaska Business Monthly • September 2011

internships. The only difference is that shareholders receive dividends and descendants don’t.

Godfrey grew up keenly aware of his status as an “afterborn.” He is the youngest of four children in his Kodiakarea family – the only one born after 1971 and the only one not a corporation stockholder. It was a somewhat sore point in his teen years, he said, recalling that he once refused to help his father stuff envelopes for a corporation matter because it wasn’t “his” corporation.

He spent much of his youth moving around the state as his father, an Alaska State Trooper, was transferred.

He spent summers commercial fishing in the Kodiak Island region, bouncing between Ouzinkie and Port Lions, but never feeling he truly belonged in the village. Later, he inherited stock from his parents and is now an Afognak shareholder, “and that’s my village.”

A turning point came, he said, when he realized “I don’t have to be a shareholder to apply for scholarships; I can be a descendant.” He said he received substantial scholarship help from Koniag and Afognak to help him earn his law degree. His brothers also received scholarships.

Gradually, he became more involved in shareholder programs. Godfrey was the inaugural student for the Afognak Ataku Management Program, an intensive two-year program to become a business manager. The training helped steer him toward his current job with Afognak.

BUILDING THE FUTURE Scholarships and training programs are creating a pool of talented workers throughout Alaska. With Alaska Native corporations becoming a major component of the state’s economy, it makes sense for them to look within to fill jobs. It also helps shareholders connect with the corporations.

“In the broader sense, they learn about their employer, which also happens to be the company in which they own shares,” Aaron Schutt said.

Maver Carey, president and CEO of The Kuskokwim Corp., was a scholarship recipient when she was in school.

She actively recruits among the corporations’ current recipients, many of whom carry perfect 4.0 grade point

averages, to fill internship spots and jobs within the corporation.

For instance, its multimillion-dollar civil construction subsidiary, Suulutaaq, employed several shareholders in 2010 and shareholder Renee Fredericks was named president. Carey herself started with TKC in the shareholder-relations department in 1994 and had worked in every part of the corporation before she was named CEO in 2003.

Carey is a prominent voice for village corporations and a strong supporter of the benefits of the federal contracting industry for Alaska Native corporations. She founded the Alaska Native Village CEO Association in 2008 to give village corporation leaders a place to work together, share their successes and their challenges.

For most Native corporations, a key question is “how do you best engage the next generation and keep them interested in their heritage?” Aaron Schutt said.

In addition to cultural camps and other programs, corporations are increasingly turning to social media, such as Twitter and Facebook, to engage the

younger generations. But for Calista’s Guy, the solution is in tradition.

He was educated under two systems – the Bureau of Indian Affairs’ school and the traditional knowledge taught by his parents and elders.

“Our traditional education goes toward the whole person – not only mental, but physical and spiritual,” Guy said. He said it was his traditional education – the Yup’ik code of life or yuuyaraq – that helped him persevere through the years spent away from home getting a Western education. He missed village activities and as soon as final exams were over, he was on a plane back to Napaskiak. Today, he goes home for fish camp every summer and for Russian Orthodox Christmas. His ties to the village and family are strong.

As he works to grow and strengthen Calista as a business, he’s also focusing on yuuyaraq, which is key to the future health of the overall corporation overall.

“We shouldn’t forget we have this other educational system,” Guy said. ❑ “It’s so easy to lose sight of it.”

Doyon, Limited provides high-quality • oil field services • security • engineering management • construction • facility management • tourism

Doyon Values • financially responsible • pride and respect in Native ownership • socially and culturally responsible • commitment to the long-term • honesty and integrity • commitment to excellence • respect for employees

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LEADER in All We Do

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SPECIAL SECTION:

ALASKA NATIVE BUSINESS NEWS

A Partner for Progress

Alaska Native corporations help move the state forward through public-private partnerships

BY SHELLY WOZNIAK OP-ED “The Alaska Native seeks not to isolate himself from the state – but to become a moving and dynamic part of the state – and we feel that a resolution of the lands problems will enable us to participate in the development of the state, rather than be a burden in the progress that we see on the Alaska horizon.”

F

orty-three years ago, Willie Hensley, whom many consider to be the father of the Alaska Native Claims Settlement Act (ANCSA), said these words before the Committee on Interior and Insular Affairs as part of the argument to pass the act. In the time since ANCSA’s passage, it is clear that Alaska Native corporations have become not only a “moving and dynamic” part of Alaska, but also important partners in creating a viable state economy, as well as tackling some of state’s most daunting challenges.

people only hear about the dividends.

Going beyond the traditional scope of a corporation, ANCs are heavily involved in the issues of our respective rural communities. As a result, Calista provides funds for scholarships, internships, essential advocacy support for issues and projects in our region, training opportunities, and critical funding to regional nonprofit organizations.”

PARTNERSHIPS FOR CHANGE Calista is not alone. Funding solutions for key public services have always been innovative in Alaska, but with the recent economic downturn and the current rural energy crisis, ANCs play an increasing role in providing assistance to their regional communities.

Many contribute significantly through funding for critical services like search and rescue operations, ambulance service, elder care, village economic development initiatives, and supplemental funding for educational institutions and language preservation. According to the 2010 ANCSA CEO’s report, from

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In February 2010, Chugach Alaska Corp. Chairman, Sheri Buretta (left), presented Fran Ulmer (right), Chancellor of the University of Alaska Anchorage (UAA) with a gift of $200,000 to support the development and delivery of programs and courses that educate university students on the history and heritage of Alaska Native people. The programs include the history of the Alaska Native Claims Settlement Act (ANCSA) and the creation of contemporary Alaska Native corporations and organizations. www.akbizmag.com • Alaska Business Monthly • September 2011

Photo courtesy of Chugach Alaska Corp.

A BROADER MISSION To fully understand the critical role Alaska Native corporations, or ANCs, play in the state, it is essential to appreciate that they are not your typical American corporations. They do not simply create wealth for wealth’s sake, and their corporate missions, as well as the expectations of their shareholders, extends far beyond generating annual dividends.

ANCs were created as a means to end; their revenues are used to provide critical social programs, preserve and enhance Alaska Native cultures and to ensure the future of their regions and people. They are private enterprises with social missions, making them unique among their corporate peers.

“Many people oversimplify the scope of our ANCSA-related responsibilities,” said Andrew Guy, president and CEO of Calista Corp. “Most

Sealaska President and CEO Chris McNeil Jr.; Healing Hands Foundation President Joe Kakhlen; and George Reifenstein, vice president of Healing Hands.

2005-2008, the 12 Regional ANCs made $70.5 million in charitable contributions to a wide variety of nonprofits and community organizations.

One of the main focuses of funding is education. Almost all ANCs contribute to scholarship programs for shareholders, ensuring the next generation of leaders will be prepared to take the corporate reigns when the time comes.

But, educating all Alaskans about the importance of ANCs also has come to the funding forefront. ANCs, like Chugach Alaska, are investing in educating all Alaska students about the importance of ANCSA and Alaska Native culture, history and business.

In February 2010, Chugach Alaska provided $200,000 in funding to the University of Alaska Anchorage to support the development and delivery of programs and courses that educate university students on the history and heritage of Alaska Native people.

“It is critical that our students understand our history and corporations,” said Sheri Buretta, Chugach Alaska board chair. “Many students, even master-level students, are clueless about the history of why we are here, what we do, and who we serve. These students are the future of our state. They will help craft the laws and decisions that affect the future of our people, so it is critical that they have an understanding about why our corporations exist and the contemporary economic forces that impact our shareholders. By investing in educating Alaskans, we hope to instill pride in our Alaska Native students and bridges of understanding with our non-

Native students that will help build a better future Alaska.”

In addition to education, many corporations provide medical and emergency assistance to their individual shareholders. Sealaska, the regional corporation for the southeast part of the state, has taken steps to supplement the medical resources available in the Southeast region by committing $1 million to the Healing Hands Foundation. This foundation is a nonprofit entity that assists patients of the Southeast Regional Health Consortium (SEARHC) with unmet needs in durable medical goods, pharmaceuticals and medical travel.

Beneficiaries of SEARHC are largely Sealaska shareholders.

Calista shareholder interns (left to right) Abigail Moses, Alyse Lincoln, Shannon Alexie, Amy Berlin, Samantha Jones and Gwen Francis received on-the-job training this summer at Calista’s Anchorage offices. Alaska Native corporations spend millions on educating and employing shareholders to ensure the future of their regions, people and companies. www.akbizmag.com • Alaska Business Monthly • September 2011 101

Photo courtesy of Calista Corp.

Photo courtesy of Sealaska Corp.

PROVIDING ONE VOICE Aside from funding key social services, government and nonprofit organizations partner with ANCs to secure larger pools of State and federal funds that help address issues facing individual regions. Organizations like the Northwest Arctic Leadership Team, or NWALT, have been extremely successful in this regard.

NWALT is comprised of Maniilaq Association, NANA Regional Corp., the Northwest Arctic Borough, and the Northwest Arctic Borough School District. It was developed to capitalize on combined resources and reduce duplication of efforts to address issues affecting Northwest Alaska.

Concentrating on the five critical focus areas of cultural preservation; healthy communities and wellness; education and workforce development; economic development; and infrastructure and basic services, NWALT actively seeks government partnership to achieve its goals.

Elizabeth Moore is NWALT’s coordinator. Having previously moved back to her hometown of Kotzebue from Washington, D.C., she understands the importance of government, business and nonprofit cooperation.

“NWALT provides a unified voice of support for projects that are important to our region, or even to a single community within our region,” said Moore.

Photo courtesy of NANA Regional Corp.

The Northwest Arctic Borough, NANA Regional Corp. and the Northwest Arctic Borough School District worked together under Maniilaq Association’s leadership to secure the final $10.2 million in legislative funds for the 18-bed, nursing home facility slated to open this fall in Kotzebue, Alaska.

“When granting organizations or governmental bodies assess projects, they look for the political will and the technical ability to achieve the stated goals.

By working together, NWALT supports the technical ability and mission of the grant applicant to demonstrate that the region supports the applicant’s cause.

NWALT lends its support to organizations within our region to assist them in overcoming the two biggest funding obstacles right away by having the public and private sectors working together from the start.”

And, NWALT’s success has been significant for the Northwest region.

Their combined approach to issuesmanagement helped them secure more than $22.1 million for Northwest Alaska as part of the Alaska Renewable Energy Fund from the Alaska Energy Authority in 2011. The monies will be used for key renewable energy development and energy efficiency and conservation measures. But true to the public private partnership model, NWALT member, NANA Regional Corp., also is investing in efficiency and conservation measures, committing more than $800,000 in private corporate funds to RurAL CAP’s Energy Wise program. The program is designed to significantly lower the cost of energy for individual households by changing energy consumption behavior in the region while creating in-region jobs.

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Another NWALT success is the Maniilaq Elder Care Facility. The Northwest Arctic Borough, NANA and the Northwest Arctic Borough School District worked together, under Maniilaq Association’s leadership, to secure the final $10.2 million in legislative funds the 18-bed, nursing home facility slated to open this fall in Kotzebue. The center will allow elders to remain with their family and community by providing skilled nursing care in a region that is geographically isolated from the rest of Alaska and where there are no other options to receive these services. But, the benefits of the facility will also be felt in State coffers, as the state shifts long-term care services from the private sector to the tribal health care system.

The shift will save $36 million over 10 years, according to a 2007 study commissioned by the State Legislature.

AN ALASKA NATIVE ANSWER Like ANCSA, public-private partnerships between Alaska Native corporations make the state stronger economically as these private entities commit staff and funds to address social needs of their regions. There is little doubt that Alaska, and the rest of the nation, will come to rely more on these partnerships into the future.

“Alaska, and much of America, are recognizing the limits of excessive dependence upon the federal government

for project funding,” said John Walsh owner of J.M Walsh Company Inc., a private consulting firm. “Earmarks are prohibited, the highway trust fund is depleted and projects are costing more each year. Policymakers, when asked for their support for competing funding requests, will generally favor the request that reflects a committed private-sector engagement. Alaska Native corporations are knowledgeable of the development needs within their regions and across the state, have necessary business and financial capacity and can effectively articulate for project funding. Coupling this with an active partnership involvement is an effective approach to delivering a project as opposed to simply dreaming it. Between the ANCSA and CDQ regional corporations, the prospects for rural Alaska to achieve overdue regional development and infrastructure improvements is improved rather than diminished if we employ the strategic benefits of public-private partnerships.”

But, even more than fiscal and technical competencies, ANCs bring forward a priceless asset in relation to these partnerships – that of cooperation with a vision of improving the lives of their Alaska Native shareholders.

“At the end of the day, we’re all working for the same people,” says Siikauraq Whiting, Northwest Arctic Borough mayor. “ANCSA and our corporations were created around our Inupiaq values. These values continue to guide us in a corporate world while retaining our cultural tradition. Cooperation is critical and has always been integral to our survival. So, we intuitively reach out and create partnerships to help us ❑ accomplish our goals.”

About the Author Shelly Wozniak has lived in Alaska since 1994. She is the corporate communications manager at NANA Regional Corp. and has been with the company for three years. Prior to her work at NANA, Wozniak worked in Alaska radio for nearly a decade with New Northwest Broadcasters and the Alaska Public Radio Network respectively; she also served as the public relations manager for the Anchorage Convention and Visitors Bureau.

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SPECIAL SECTION:

ALASKA NATIVE BUSINESS NEWS

ANCSA Land Claims – 40 Years Later Photo courtesy of Thom Leonard/Calista Corp.

A winter view of Chuathbaluk, on the Kuskokwim River.

Alaska Natives need lands, often held up in litigation

BY JULIE STRICKER

I

n early July, the news wires carried a story about a piece of legislation moving through the U.S. House of Representatives. The legislation dealt with the transfer of 80,000 acres of federal land in Southeast Alaska to Sealaska Corp. Behind it are years of criticism, litigation and negotiation.

“Every acre of this land is precious to somebody,” said Jaeleen Araujo, vice president and general council of Sealaska.

The Juneau-based Native corporation has been trying to get title to the parcel for a decade as part of its efforts to finalize the land claims process put into place by the 1971 Alaska Native Claims Settlement Act. The passage of the bill out of the House Natural Resources Committee is one step in a process that has been moving at a sometimes glacial pace for nearly 40 years.

“We’re celebrating the 40th anniversary of the passage of ANCSA and we still don’t have our land,” said Will Anderson, president and CEO of Koniag Inc. “It’s been a painfully slow process.”

ANCSA is the landmark 1971 legislation bill intended to settle the claims of Alaska’s aboriginal peoples to their ancestral lands and resources – claims that were partly responsible for blocking construction of the trans-Alaska oil pipeline. The settlement gave Alaska Natives title to 44 million acres of land – one-tenth of Alaska’s land mass – and $962.5 million.

The land and money were divided among 12 regional for-profit corporations and more than 200 village corporations in Alaska. About 80,000 Alaska Natives were eligible to join the corporations. A 13th regional corporation was established for Alaska Natives living outside the state. It received cash but no land.

The corporations were to use the resources from the land to help provide for the social and economic well-being of their shareholders and descendants.

While some corporations have had almost all of their land entitlement conveyed, others are still waiting, despite Congress’ statement in 1971 that

the settlement should be “rapidly” carried out.

In 2004, Alaska Sen. Lisa Murkowski introduced the Land Conveyance Acceleration Act, which aimed to complete the conveyance of millions of acres of land to the Native corporations by 2009, the 50th anniversary of statehood. That deadline passed and the process continues to inch along.

Federal officials estimate it will be years before all of the conveyances are finalized.

From the beginning, it was apparent that land claims would be a complicated process. Dividing millions of acres of land blessed with a wildly unequal complement of natural resources among 80,000 people required a number of complex formulas.

The regional corporations were set up with boundaries that roughly followed the people’s traditional use of the land. For village corporations, the villages own the surface estate of the land and the regional corporations own the subsurface.

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ENTITLEMENT HURDLES

Photo courtesy of Thom Leonard/Calista Corp.

CIRI Communications Director Jim Jager said almost all of CIRI’s entitlement has been conveyed, but it had to overcome some big hurdles The corporations were to select federal lands within their regions, with exceptions such as land set aside for special protections, military land or leased for petroleum exploration. Private land was also off-limits.

The restrictions posed a problem for CIRI. The Anchorage-based corporation is located in the most populated area of the state, with vast areas already set aside for oil and gas leases and wildlife habitat. There wasn’t

Photo courtesy of Thom Leonard/Calista Corp.

Core township lands around villages and culturally significant sites were the first to be selected. Many Alaska Natives still have a subsistence lifestyle – relying on the land for their food and livelihood – and areas importance for subsistence were key selections. Then the corporations focused on areas rich in natural resources.

The villages and regional corporations alternated their selections around the villages, resulting in a checkerboard of ownership.

Parts of Alaska are far richer in resources than others. Doyon Ltd., in the vast lean region of Interior Alaska, received an entitlement of 12.5 million acres (surface and subsurface.) Calista Corp. in Southwest Alaska received 6.5 million acres. They are the two largest regional corporations in terms of land. Cook Inlet Region Inc., with an entitlement of 2.4 million acres, is one of the smallest.

Calista C li t C Corp. P President/CEO id t/CEO A Andrew d G Guy stands t d with ith severall off th the 2011 C Calista li t interns. (Left to right) Andrew Guy; interns Samantha Jones, Alyse Lincoln, Gwen Francis, Abigail Moses, Abigail Chris: Calista Heritage Foundation President/CEO Debra Call; and CHF employee Puyuk Joule.

much land left for selection, except for glaciers and mountaintops.

Since the available lands in CIRI’s region were uneconomic, it negotiated a land exchange with the federal government, which at the time was the largest land exchange in federal history, Jager said.

The exchange occurred in the early 1980s, about the same time as the federal savings and loan crisis came to a head, Jager said. CIRI was given “chits” to exchange for surplus federal land. In the aftermath of the savings and loan crisis, the federal government wound up owning a lot of property it didn’t want, so CIRI was able to trade in the chits for apartment complexes, ranches in Texas and other commercial

properties outside the state of Alaska.

The diversity of holdings was a boon later in the 1980s when the economy went sour.

CIRI’s land selections also were a boost to the other corporations at a critical time.

In the early 1980s, a young Alaska student named Margie Brown had graduated from college with a biology degree and came back to Alaska to get a job.

She landed in CIRI’s land department, where her job was to help make selections. With the deal with the federal government for Lower 48 properties under negotiation, there wasn’t much for her to do, so she started studying the various land laws. She learned something very interesting, Jager said.

Under ANCSA, Native corporations could not select lands that had been leased for oil and gas. But under oil and gas laws, if they owned a parcel of land adjacent to a lease, they would get a part of the royalties.

Brown made a map of all the producing oil and gas lands in Southcentral Alaska and methodically selected the available lands adjacent to them.

“She ended up with a checkerboard of lands on the Kenai Peninsula that basically framed the oil and gas leases,” Jager said. She quietly got approval to select the lands. Then, she went into CIRI CEO Roy Huhndorf’s office and

View from the river of Akiachak, Alaska, located up the Kuskokwim River from Bethel. www.akbizmag.com • Alaska Business Monthly • September 2011 104

made in the 1970s, he noted. That included township lands and other mandatory selections near the villages.

Away from the villages, Doyon’s main focus has been on lands with natural resource potential, such as gold and other mineral deposits.

THE PROCESS

©2011 Chris Arend

What’s taking so long is the process of conveying title to those lands to the corporations. Here is a greatly simplified look at the process of land conveyances:

Under the direction of President/CEO Margie Brown, CIRI’s land selections in the early 1980s may have helped keep some of the other Alaska Native regional corporations afloat during difficult economic times.

told him the State owed CIRI a whole bunch of money.

The State paid up, but CIRI didn’t get to keep it all.

Under the 7(i) revenue-sharing provision of ANCSA, 70 percent of those revenues were paid out to the other corporations at a time when many were struggling with cash-flow issues and some were about to go under.

“That little bit of craft saved ANCSA,” Jager said.

Margie Brown is now president and CEO of CIRI. Jager said CIRI has all but a fraction of the land which it is entitled. “There are opportunities that may still come around,” he said. “We’re purposely waiting to figure out what projects are coming up in the future so if we need land for a road, for instance, that’s what we’re saving for.”

Fairbanks-based Doyon still has more than a million acres to be conveyed out of its 12.5 million acre entitlement.

Jim Mery, vice president of land and natural resources for Doyon, estimates it may take more than a decade for the process to be done in full.

“The last acres are oftentimes the hardest ones,” he said.

The bulk of the selections were

● A corporation selects a parcel of land. ● It requests agencies and the public nominate any easements. ● Easement recommendations are made. ● The land is interimly conveyed to the corporation. ● Surveys and final easements are set. ● The corporation gets title to the land.

The Bureau of Land Management oversees most federal land in Alaska and works closely with the corporations. Mery said BLM was been very helpful in keeping the process moving by allowing non-surface-disturbing exploration of resources. That has allowed Doyon to identify the higher priority parcels, which helps BLM prioritize the surveys.

“BLM has been very helpful,” Mery said. “They’ve been acting in extreme good faith.”

But for every step forward toward conveyance, the corporations have to negotiate hurdles such as litigation over easements, opposition by conservation groups and budget cuts.

The selections are also getting smaller and more specific, requiring surveys in remote terrain in often boggy terrain – places where subsistence activities traditionally took place. It’s a slow, expensive process.

“At the end of the day, it’s a funding problem,” Mery said.

“One of the things that really drags it out is the BLM is really underfunded to complete this process,” Mery said.

“We have to help them fight to maintain their budget.”

Despite this, the Interior Department has proposed cutting the budget for BLM’s land conveyance program in half in 2012, a proposal strongly criticized by Alaska’s congressional delegation. BLM notes that it has met all of its conveyance goals since 2004.

Then there’s politics. Nome-based Bering Straits Native Corp. crossed a milestone when it successfully negotiated the selection of lands near Salmon Lake, northeast of Nome. The settlement took years of expensive litigation and comprises a large portion of its outstanding conveyance. Then it stalled.

“We’re now in the third try of trying to get it passed in Congress,” said Matt Ganley, BSNC vice president of resources and external affairs. “It’s fallen victim to politics again and again. We’re hoping to get it passed this session.”

Koniag also is hoping to complete its conveyances this year. BLM conveyed 146,000 acres on the Alaska Peninsula to the Kodiak-based corporation earlier this year and is due to complete another 87,000 acres. If all goes as scheduled, Koniag will have almost all of its entitlement by the end of the year.

“It’s been a long struggle, but we’re still very happy it’s nearly done,” Koniag’s Anderson said.

The movement of Sealaska’s bill out of committee in July is good news for the Juneau-based corporation. The 79,000 acres has been hotly contested by conservation groups, in part because it’s outside the area originally delineated for Sealaska’s selections.

Araujo said Sealaska was allotted 10 “boxes” from which to select its lands. When the boxes proved to be too small, the corporation had to look outside those areas in order to complete its entitlement.

Sealaska chose the land, which contains a mixture of old-growth and second-growth timber already accessed by roads, because it will provide the corporation with a sustainable economic program for years. “We’re not getting any more acres than we’ve been promised,” Araujo said.

Even if all goes smoothly from here, Araujo estimates it will take from one to five years for the land to be surveyed and conveyed.

“We would just like to get this done,” ❑ Araujo said.

www.akbizmag.com • Alaska Business Monthly • September 2011

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SPECIAL SECTION:

ALASKA NATIVE BUSINESS NEWS

Crossing Borders Native corporations make inroads on the global economy

BY VANESSA ORR

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Photo courtesy of Chugach Alaska Corp.

S

uccessfully doing business in a global economy means that company leaders must be willing not only to expand their markets, but also their minds. Where companies once could be satisfied with local, regional or even national customers, to truly make headway in today’s economy means bypassing continental boundaries.

A number of Native corporations have been very successful in pushing past the Last Frontier. Chugach Alaska Corp., for example, began working outside the contiguous United States, or OCONUS, in 1995. “Our first experience working OCONUS was when we took over the Wake Island project in the Pacific in 1995,” explained CEO Ed Herndon. “That experience helped us secure a nuclear test ban treaty contract that led us to work in Canada, Spain and Turkey. We have since performed overseas work in Africa and Korea and are currently looking into projects in the Middle East.”

Chugach’s primary overseas services include facility maintenance, construction and engineering, seismic monitoring, hazardous waste control and remediation. Approximately 15 percent of the corporation’s total work force, or about 834 employees, work outside the contiguous United States. Approximately 50 percent of Chugach’s total revenue comes from overseas markets, equaling $225 million in 2010.

“There are a number of advantages to working OCONUS, including revenue diversification related to regional economic trends; the ability to build a strong worldwide response and logistical resume and the opportunity to find new and interesting opportunities,” said Herndon. “Disadvantages include delayed schedules, qualified work force, and political and social factors that can cause considerable risk to any investments that you make in infrastructure.”

The majority of Chugach’s global

Chugach provides operations and maintenance services on Wake Island.

client relationships are the result of federal contracts. “The 8(a) program originally provided us with the opportunity to build and expand our capacity overseas; however, it is important to note that today our existing overseas work is primarily a result of our performance and, for the most part, is not directly related to the 8(a) program,” said Herndon.

Named for Section 8(a) of the Small Business Act, the 8(a) program was created to help small and disadvantaged businesses compete in the marketplace.

It also helps these companies gain access to federal and private procurement markets.

Sealaska Corp. has been involved in overseas work for more than 30 years.

“We began in international trade with our Sealaska Timber Company business, first harvesting and marketing logs to Japan and then expanding to South Korea and Taiwan,” explained Chris McNeil Jr., president and CEO, Sealaska Corp. The company now markets a significant share of its timber to the People’s Republic of China.

“Because we also managed transportation logistics for our timber, we got into the business of chartering ships to handle logs as bulk freight carriers so that we could move the logs directly from the area where they were harvested to overseas locations,” he added.

“This gave us a lot of experience in Far East markets, which was a core business for many years.”

Since then, Sealaska has expanded its international presence beyond the timber business. Today, the company is involved in the global economy through its information technology, construction services, transportation logistics, security and protection services, and plastics manufacturing businesses. “We have many broad, small- to mediumscale operations in a lot of locations including Latin America, Europe, Africa, Asia and the Middle East,” said McNeil.

The corporation’s information technology business, for example, performs media management for off-site storage in 26 different countries, principally through a relationship with Hewlett Packard. Sealaska Environmental

www.akbizmag.com • Alaska Business Monthly • September 2011

Services has a federal contract relating to the installation of radiological testing devices in a number of countries under the direction of the Department of Energy.

Approximately 50 percent of Sealaska’s total revenue comes from global markets, with more than half of that earned from federal contracts.

“The 8(a) program is very significant for all Native corporations as a vehicle to start up operations both domestically and overseas,” said McNeil. “It is extremely difficult to do a start-up in any case; 8(a) allows us an entry point to be able to work in international areas.

“To operate on a global basis, it is almost a precondition of certain commercial customers that we have this capability before they would take us seriously as a supplier,” said McNeil.

Sealaska relies on co-ventures with local companies to get its start in new markets. “As these partnerships develop, we are able to rely on them for help,” said McNeil. “Over time, we hire people from our own group who are knowledgeable in logistics and operation areas; for example, we have a pretty good range of people on staff who are extremely experienced in Latin America and speak Spanish and Portuguese fluently. First you rely on local relationships, and then you grow your own.”

UNDERSTANDING OTHER CULTURES Having an international work force can not only help corporations to understand other cultures, but also share information about their own. “Our international work force has contributed in large part to our understanding of many different cultures, and Chugach takes every opportunity to teach others about ours,” said Herndon. “Chugach has always taken great pride in our culture, both at project sites within the U.S. and at OCONUS sites as well. It is with that pride that we conduct sensitivity training and cultural awareness training for our employees.”

This level of respect runs throughout the corporation to include Chugach’s board of directors. “A recent example of this includes a trip that our board of directors made to Guam in support of a large cultural event,” said Herndon.

“The outcome of this trip was that we

now understand that Guam’s cultural and economic ties are very similar to ours. It has helped us to understand how we can be a better corporate citizen and support local initiatives.”

“While there are certainly challenges when operating in other countries, the ability to understand the business culture, and the country’s culture, can help companies do well,” said McNeil. “I don’t think that there is any question that a significant amount of growth in services and manufacturing will occur overseas; but if one is to take advantage, one must be very much engaged in it.”

HELPING OUT AT HOME Success in international markets can also translate to success at home. Overseas work provides opportunities for Sealaska shareholders to gain employment at all levels, including management. “This is a huge goal of ours, and we are continually working at it,” said McNeil, adding that the Tlingit, Haida and Tsimshian people have historically been traders who ventured beyond Southeast Alaska into the Interior, the Aleutian chain and northern California.

“Some of our Sealaska shareholders have worked overseas in some pretty challenging circumstances.”

Even while exploring new international business opportunities, Sealaska is still focused on significantly growing and creating sustainable economies in its villages and region.

“We are working to balance our participation in both,” said McNeil. “We see a weakness in our village economies and are working to deal with this through partnerships formed through our newest subsidiary, Haa Aani LLC.” Established last year by Sealaska’s board of directors, the company, which is led by Chief Executive Officer Russell Dick, is involved in three oyster operations in Southeast, and has partnered with Kake Tribal Corp. to refurbish an existing fish processing facility in Kake. The company also continues to advance renewable energy initiatives and smaller, local ventures.

“Our goal is to be a participant and to provide some level of leadership to individual tribal member entrepreneurs without expectations that all of their enterprises will flow through Sealaska,” said McNeil. “We’re hoping to provide

“Our international work force has contributed, in large part, to our understanding of many different cultures, and Chugach takes every opportunity to teach others about ours.”

– Ed Herndon CEO Chugach Alaska Corp. grass-roots support in our communities.

“Ultimately, we are hoping to create a synergy between the efforts we are making to join the global economy and the efforts we are making to create sustainable economies in Southeast Alaska,” he continued. “We are trying to do both. While it is a significant challenge to operate in both areas, in this day and age, companies have to do both to grow in the face of a soft domestic economy.”

As global business continues to evolve, Native corporations are poised to take advantage of any opportunities that arise. “I believe that it is in the growth plans of all major Fortune 500 companies to have some reliance on growth in emerging markets, which may include China, Russia, India and Brazil,” said McNeil. “Sealaska is currently looking very carefully at independently expanding into Brazil where there is a market for manufacturing, in particular. Brazil is one market where there is expected to be a huge amount of growth in the coming years.”

“Naturally, as we continue to diversify our business lines, we recognize the overseas potential for work,” said Herndon. “For this very reason, as we decide to look into different types of work, we will also be looking for different geographic places to perform it. We recognize that our value proposition reaches across geographic borders and we are prepared to meet ❑ those challenges.”

www.akbizmag.com • Alaska Business Monthly • September 2011

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SPECIAL SECTION:

ALASKA NATIVE BUSINESS NEWS

CITC’s Cutting-Edge Programs Models of social enterprise effectiveness

Photo courtesy of Jennine Janet Elias

BY GAIL WEST

Jennine Janet Elias, “Qapqin” in her Native tongue, is the external affairs coordinator at the Native American Contractors Association (NACA).

C

ook Inlet Tribal Council has recently taken a step down the road toward making some of its social programs contribute to the bottom line. When the organization named its new vice president of social enterprise, Pita Benz, in January, CITC’s President and Chief Executive Officer Gloria O’Neill said: “We are entering

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an era in which nonprofit organizations need to demonstrate higher levels of effectiveness in the programs they provide, coupled with new strategies for sustainable funding.”

O’Neill added that CITC seeks to actively develop small businesses that earn revenue. “These enterprises fulfill a double bottom line: they generate

revenues that can be re-invested in programs, and they provide training and work experience to individuals looking to learn marketable job skills.”

DRIVING CHANGE Is this a new world? Not really, say a host of organizations that have entered the field in the last decade or so. It’s

www.akbizmag.com • Alaska Business Monthly • September 2011

called social enterprise, and it’s been developing in the U.S. for several years.

In fact, social enterprise has been one of Harvard Business School’s initiatives since 1993. Its mission is to drive sustained, high-impact social change through the mission of the business school itself and create leaders who make a difference in the world. According to the HBS website, the initiative “engages with the nonprofit, for-profit and public sectors to generate and share resources, tools and knowledge.”

Benz, herself, brings a wealth of business experience to her new position.

She has more than 30 years of commercial banking background, working with businesses of all sizes and stripes, and plans to rely heavily on her business experience, as well as her many years of working with Anchorage nonprofit organizations, in moving CITC’s social enterprise programs forward.

Her first steps will include developing strategies to manage the change and growth of one of CITC’s existing social enterprises, Chanlyut (pronounced shawn-loot). The name, in the Dena’ina language, means new beginnings.

BUILDING SKILLS AND CONFIDENCE Chanlyut is a two-year residential, educational and vocational program for men with addictions, who are homeless or who are being released from prison.

Modeled on the Delancey Street Foundation, begun in San Francisco in 1971, Chanlyut’s goal is to build skills and confidence in men who want to improve themselves by learning job skills, by pursuing an education or by gaining work experience. Participants live in a community environment that encourages them to make the changes in their lives to make them contributing members of society. Although Chanlyut is targeted to provide a culturally relevant environment for Alaska Natives, the program is open to any man. According to the Chanlyut website, it’s built upon the belief that with time and work, and by taking personal responsibility, people can change.

Among the things Chanlyut provides to participants are room and board; life skills training; individualized educational services; vocational training in at least three core areas; hands-on work

experience through business training schools, community involvement and service; financial skills training; and linkage with medical services.

“It’s a by-your-bootstraps model,” said Lisa Rieger, CITC’s vice president and general counsel. “We have no professional staff and the residents live and work as a cohort. They’re primarily coming out of corrections or the homeless population and want to change their behavior. They don’t pay to participate in the program, but they’re expected to work in our for-profit enterprises and help build them. These expectations help them learn to live life on life’s terms, and to be responsible for their future as well as the program’s.”

BUILDING SUSTAINABILITY According to an article in Chanlyut’s February 2010 newsletter, participants are expected to take responsibility for the management and success of the enterprises and, thus, to contribute to the funding and future of the program.

The article states Chanlyut receives no direct local, State or federal government money because its program does

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www.akbizmag.com • Alaska Business Monthly • September 2011

109

not fit traditional standards. Revenues from training enterprises, private funding and funding through partner organizations provide the support needed to run the program.

Among Chanlyut’s current businesses are the Mountain View Diner; a food wholesale and catering service; landscaping, lawn maintenance and snow removal business; a moving company and a building maintenance service.

When CITC began to look into establishing this particular social enterprise program, the Delancey Street Foundation rose quickly to the top of its list of potential models.

“It really resonated,” Rieger said. “It operates the way villages work – everyone works together, like the whaling crew. There’s a captain, but the whale belongs to the whole village. It takes the labor of everyone’s hands to support the organization.”

Rieger added that CITC has investment funds in Chanlyut, but core funding has come from the Robert Wood Johnson and Rasmuson foundations. Chanlyut has deviated from the Delancey Street program in one way – it has paid leadership staff. William Tsurnos, its director, ran a Delancey Street program in New Mexico for six years before moving to Anchorage.

“The primary point of the program,” she said, “is personal responsibility.

They’re doing this for themselves.”

COHO CUP COFFEE SHOPS Another of CITC’s social enterprises is the Coho Cup coffee shops.

“Our focus is on job-readiness training. When employees move on to other jobs, they have learned the importance of showing up for work on time, to be dressed appropriately and be ready to work,” Benz said. “They know how to run a cash register and they have customer service skills that will make them good employees anywhere in the community.”

Benz said CITC is trying to expand the coffee shop business within the next fiscal year.

“This is our longest running business – 10 years,” she said. “Now, we’re looking at new locations, but you have to make the right decisions, as you do for a for-profit business. You have to

110

“Our focus is on job-readiness training. When employees move on to other jobs, they have learned the importance of showing up for work on time, to be dressed appropriately and be ready to work. They know how to run a cash register and they have customer service skills that will make them good employees anywhere in the community.”

– Pita Benz Vice President of Social Enterprise Cook Inlet Tribal Council study the foot traffic, you need to know what food items and coffee people want to buy.”

To help support the coffee shops, CITC offers barrista training that is open to anyone. The training, set up to generate income, is scheduled once each quarter and is open to eight to 10 people per training.

FINALIZING THE ROAD MAP When Benz took on the job of managing CITC’s social enterprise initiative, she was charged with creating a plan to make the program self-sufficient.

That includes building and expanding for-profit subsidiaries, building infrastructure and developing investment partnerships, then funneling profits back into the program.

“We have to take care of ourselves; be in control of our own destiny and not dependent on grants,” Benz said.

“This is cutting-edge – crafting forprofit subsidiaries of a nonprofit to pay for programs.”

Evaluating the program’s success, Benz added, would be measured by the rate of return on the initial investment, including a component on the social return on investment.

“We will measure outcomes – what we are accomplishing,” she said. “I’ve been charged with establishing businesses and reinvesting profits from those businesses back into CITC. “What kind of businesses are we looking at? Are we going to be an active or a passive investor? We’re looking at

all of those questions,” she said. “That’s what we’re doing in our initial year, and we should have a plan by next month.

It will address how we investigate deals, how we seek partners and who those partners might be. We’re just finalizing the road map right now. We likely won’t be putting any money out the door until the first quarter of next year.”

In the meantime, Benz said she has met and talked with a wide variety of business people in the community, getting help and direction.

“It’s been a great process of finetuning our vision,” she said. “I think there’s a tremendous amount of support for our idea. We want to be selfsupporting, and we want to be able to continue our programs without depending on federal or other grants.”

As for measuring the success of Chanlyut, Rieger said she’s working with others in CITC to put together an evaluation of the program at the end of 2010.

“If all the residents that spent time at Chanlyut had spent the same time in prison, it would have cost the State more than $1 million,” she said. “But instead of prison, they can be placed in Chanlyut as a condition of probation and parole.”

CITC has a very good partnership with the State Department of Corrections, Rieger said, but added that there are, of course, some restrictions.

“We have no professional staff, so we cannot take anyone who is being medically treated for mental illness, and the residents must be mentally and physically able to work. We can’t take arsonists or sex offenders,” she said.

“We do have strict rules: no alcohol or drug use, no threats, no violence.”

There are currently 14 residents at Chanlyut with more anticipated to enter the program over the next few months. Maximum occupancy for the facility is 20, but CITC was building a new facility this summer to increase the occupancy to 40.

As Benz moves CITC’s social enterprise program forward toward selfsufficiency, she said she will continue to work with a variety of community organizations and businesses.

“Our goal is to be a leader in this field,” she said, “and we’re well on ❑ the path.”

www.akbizmag.com • Alaska Business Monthly • September 2011

2011 ALASKA NATIVE REGIONAL CORPORATIONS DIRECTORY

Ahtna Inc.

SUBSIDIARIES

Ken Johns, President & CEO PO Box 649 Glennallen, AK 99588 Phone: 907-822-3476 Fax: 907-822-3495 itumalealiifano@ahtna.net www.ahtna-inc.com Acres: 1,528,000 Shareholders: 1,649 Alaska Employees: 464 2010 Gross Revenue: $243,000,000 2009 Gross Revenue: $231,000,000

Ahtna Construction & Primary Product Ahtna Contractors LLC Ahtna Design Build Inc. Ahtna Development Corp.

Ahtna Engineering Services LLC Ahtna Enterprises Corp.

Ahtna Environmental Inc. Ahtna Facility Services Inc. Ahtna Government Services Corp.

Ahtna Logistics Inc. Ahtna Professional Services Inc. Ahtna Support & Training Services LLC Ahtna Technical Services Inc. Ahtna Technologies Inc. Koht’aene Enterprises Co. LLC

2010 REVENUE SOURCES

Construction and Equipment $98,088,886 Service Contracts $129,106,299 Real Estate $110,179 Other Natural Resources $3,705,552

Aleut Corp.

SUBSIDIARIES

David Gillespie, CEO 4000 Old Seward Hwy., Ste. 300 Anchorage, AK 99503 Phone: 907-561-4300 Fax: 907-563-4328 info@aleutcorp.com www.aleutcorp.com Acres: 70,789 surface, 1.572 million subsurface Shareholders: 3,717 Alaska Employees: 56 2010 Gross Revenue: $159,416,000 2009 Gross Revenue: $146,058,000

Alaska Instrument LLC Aleut Enterprises LLC Aleut Management Services Aleut Real Estate LLC C&H Testing LLC

2010 REVENUE SOURCES

Operations and Maintenance Contracts $127,943,000 Fuel Sales $12,703,000 Industrial Products & Services $7,024,000 Rental Properties $6,218,000 Natural Resource $2,146,000 Permanent Fund Earnings $719,000 Gravel Sales $388,000 Investment Income $1,223,000 Water Utility $147,000 Other $905,000

www.akbizmag.com • Alaska Business Monthly • September 2011

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2011 ALASKA NATIVE REGIONAL CORPORATIONS DIRECTORY

Arctic Slope Regional Corp.

Rex A. Rock Sr., President & CEO PO Box 129 Barrow, AK 99723 Phone: 907-852-8633 Fax: 907-852-5733 www.asrc.com Acres: Nearly 5 million Shareholders: 11,000 Alaska Employees: 4,543 2010 Gross Revenue: $2,331,681,000 2009 Gross Revenue: $1,945,058,000

SUBSIDIARIES

Alaska Growth Capital ASRC Construction Holding Co. ASRC Energy Services Inc. ASRC Federal Holding Co. LLC Petro Star Inc. SKW/Eskimos Inc. Tundra Tours Inc.

2010 REVENUE SOURCES

Petroleum Refining and Marketing 33% Government Technical Services 32% Energy Services 28% Construction 6% Other 1%

Bering Straits Native Corp.

Gail Schubert, President & CEO 4600 Debarr Rd., Ste., 200 Anchorage, AK 99508 Phone: 907-563-3788 Fax: 907-563-2742 info@beringstraits.com www.beringstraits.com Acres: 2.1 million Shareholders: 6,700 Alaska Employees: 461 2010 Gross Revenue: $190,336,771 2009 Gross Revenue: $162,300,000

SUBSIDIARIES

Ayak LLC Bering Straits Aerospace Services LLC Bering Straits Aki LLC Bering Straits Information Technologies LLC Bering Straits Logistics Services LLC Bering Straits Technical Services LLC Eagle Electric LLC Eagle Eye Electric LLC Global Management Services LLC Global Support Services LLC Inuit Services Inc. Iyabak LLC Sound Quarry Inc.

2010 REVENUE SOURCES

Investment Income Government Contracting Construction Information Technology/Communications Facilities Support Property Management Aerospace Support Services Bering Straits Native Corp.

Facilities Maintenance

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www.akbizmag.com • Alaska Business Monthly • September 2011

2011 ALASKA NATIVE REGIONAL CORPORATIONS DIRECTORY

Bristol Bay Native Corp.

SUBSIDIARIES

Jason Metrokin, President & CEO 111 W. 16th Ave., Ste. 400 Anchorage, AK 99501 Phone: 907-278-3602 Fax: 907-276-3924 www.bbnc.net Acres: Approximately 3 million Shareholders: 9,000 Alaska Employees: 585 2010 Gross Revenue: $1,382,396,000 2009 Gross Revenue: $1,391,571,000

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 Bristol Resources Business Resource Solutions CCI Group CCI Inc. CCI Industrial Services

2010 REVENUE SOURCES

Petroleum Sales Operations Contract Services Investment Earnings Natural Resources Other

CCI Solutions Eagle Applied Sciences Glacier Technical Solutions Glacier Technologies MedPro Technologies Kakivik Asset Management KAM Resources Group PetroCard Inc. SES Construction and Fuel Services SES Design/Build SpecPro Environmental Services SpecPro Inc. SpecPro Technical Services STS Systems Integration TekPro Services Vista International Operations Vista Technical Services

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www.akbizmag.com • Alaska Business Monthly • September 2011

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2011 ALASKA NATIVE REGIONAL CORPORATIONS DIRECTORY

Calista Corp.

SUBSIDIARIES

Andrew Guy, President & CEO 301 Calista Ct., Ste. A Anchorage, AK 99518 Phone: 907-279-5516 Fax: 907-272-5060 calista@calistacorp.com www.calistacorp.com Acres: 6.5 million Shareholders: 13,000 Alaska Employees: 271 2010 Gross Revenue: $234,865,919 2009 Gross Revenue: $203,023,390 2010 REVENUE SOURCES

Contracting and Professional Services Construction Services Rental and Property Management Printing, Newspapers and Ad Agency Camp Services and Catering Communications Calista Region Resources Other Region Resources Other

Alaska Newspapers Inc. Alaska Telecom Inc. Brice Inc. Calista Heritage Foundation Calista Real Estate Camai Printing Co. Chiulista Services Inc. Solstice Advertising Tunista Construction LLC Tunista Inc. Tunista Pacific Rim LLC Tunista Services LLC Y-Tech Services Inc. Yukon Equipment Inc. Yulista Aviation Inc. Yulista Holding LLC Yulista Management Services Inc.

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2011 ALASKA NATIVE REGIONAL CORPORATIONS DIRECTORY

Chugach Alaska Corp.

SUBSIDIARIES

Sheri Buretta, Acting CEO 3800 Centerpoint Dr., Ste. 601 Anchorage, AK 99503-4396 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: 2,300 Alaska Employees: 722 2010 Gross Revenue: $936,975,000 2009 Gross Revenue: $1,105,265,000

Chugach Alaska Services Inc. Chugach Education Services Inc. Chugach Federal Solutions Inc. Chugach Government Services Inc. Chugach Industries Inc. Chugach Information Technology Inc. Chugach Management Services Inc. Chugach McKinley Inc. Chugach Support Services Inc. Chugach World Services Inc. Defense Base Services Inc. Falcon International Inc. Wolf Creek Fabrication Services Inc.

2010 REVENUE SOURCES

Contract Revenues $815,419,373 Resource Sales $224,713 7J $2,325,287 Rental $825,021

RESPONSIBLE DEVELOPMENT Our people. Our land. Our companies.

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2011 ALASKA NATIVE REGIONAL CORPORATIONS DIRECTORY

Cook Inlet Region Inc. Margaret Brown, President & CEO PO Box 93330 Anchorage, AK 99509 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: 8,100 Alaska Employees: 81 2010 Gross Revenue: $188,357,000 2009 Gross Revenue: $79,893,000

SUBSIDIARIES

Alaska Interstate Construction LLC ANC Research & Development LLC CIRI Alaska Tourism Corp.

CIRI Land Development Co. Fire Island Wind LLC North Wind Inc. North Wind Services Pacific Tower Properties Inc. Stone Horn Ridge LLC

2010 REVENUE SOURCES

Real Estate Development and Management Environmental Remediation Services Oilfield and Heavy Construction Services Energy and Resource Development Telecommunications Renewable Energy Tourism and Hospitality Aerospace Defense Private Equity and Venture Capital Investments

Doyon Ltd.

SUBSIDIARIES

Norman Phillips, President & CEO 1 Doyon Place, Ste. 300 Fairbanks, AK 99701 Phone: 907-459-2000 Fax: 907-459-2060 info@doyon.com www.doyon.com Acres: 12.5 million allocated Shareholders: 18,300 Alaska Employees: 1,618 2010 Gross Revenue: $458,600,000 2009 Gross Revenue: $416,400,000

2010 REVENUE SOURCES

Construction Oil and Gas Drilling Government Contracting Investment Income Real Estate Tourism

116

Doyon Oil Field Services Inc. Doyon Drilling Inc. Doyon Emerald Doyon Industrial Group LLC Doyon Associated LLC Doyon Universal Services LLC Doyon Government Contracting Inc. Doyon Properties Inc. Doyon Utilities LLC Doyon Government Group Doyon Logistics Services LLC Doyon Security Services LLC Doyon Project Services LLC Cherokee General Corp.

Doyon Natural Resources Development Corp.

Doyon Transitional Inc. The River Cabins Inc., dba Denali River Cabins Kantishna Roadhouse Inc.

www.akbizmag.com • Alaska Business Monthly • September 2011

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Wolk & Associates » Ó Ǥ

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L

ast year was a time of extensive rebuilding for Ukpeaġvik Iñupiat Corporation (UIC). What a difference a year makes.

The Barrow-based corporation made a number of strategic changes to position itself for success. It improved processes, restructured operations to increase efficiencies, and communicated a philosophy of fiscal responsibility corporatewide – all while focusing on providing value to shareholders. After an in-depth analysis of its subsidiaries, UIC opted to sell Umialik Insurance and Rain Proof Roofing, as they were not in line with the corporation’s business model.

UIC also created several holding companies to organize its subsidiaries along common service lines, providing greater operational flexibility and tax benefits. It also developed support service departments for each holding company, such as human resources, accounting, and information technology. This allowed UIC to provide more direct support for all its subsidiaries.

The overhaul also included a restructuring of UIC’s organization, which has allowed the team of key decision makers to work together more collaboratively.

President Anthony Edwardsen says, “These improvements have allowed us to work together as a more effective team.”

UIC has certainly achieved favorable results from the makeover, including a positive 2010 net income of $4.8 million after taxes. Shareholders are reaping the benefits, receiving a record annual dividend of $15 per share in December 2010.

In addition, the UIC Foundation awarded scholarships to 189 shareholders and their descendants pursuing a degree or vocational certification.

The financial improvements fit well with UIC’s goal to use creative decisions that produce growth and benefits. It also complements UIC’s bold mission statement: “Ukpeaġvik Iñupiat Corporation will be the recognized business leader in Alaska for

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providing quality services, solid profitability, and shareholder value.”

With more than 1,900 employees worldwide, UIC has distinguished itself by its commitment to quality. The underlying secret to the corporation’s success, according to Edwardsen, is communication and teamwork. “It’s not ‘I did it,” he explains. “It’s all about ‘We did it.”

Established in 1973, UIC has steadily diversified its investments and consistently ranks among the top 10 largest Alaskan -owned companies. It engages in a range of business lines to serve private-sector and government customers, including its operations in Barrow; construction; regulatory consulting; marine operations; architecture and engineering; information technology; and maintenance and manufacturing.

UIC’s corporate umbrella encompasses UIC Holdings, UIC Construction Services, UIC Professional Services, UIC Marine Services, UIC Maintenance and Manufacturing, and UIC Technical Services.

UIC is involved in an array of projects, including the $82 million Barrow Replacement Hospital, a joint venture with Arctic Slope Regional Corp.’s SKW/ Eskimos. Other UIC initiatives include North Slope Borough Barrow Gas Fields Development, Barrow NOAA Housing Project, providing support services for īĜĤğ ĜğıĠĭįĤĮĠĨĠĩį

Shell Exploration and Production, and National Science Foundation Barrow Science Support.

Currently, UIC provides social and economic resources to more than 2,500 Iñupiat shareholders and their descendants. Since its inception, UIC has been driven to improve its operations and profitability to generate value for shareholders. “We are here to benefit our shareholders in the best possible way,” Edwardsen says.

ƞȽɀΎȻȽɀȳΎȷȼȴȽɀȻȯɂȷȽȼΎȱȽȼɂȯȱɂ

ƭȹȾȳȯɮɄȷȹΎơʍɃȾȷȯɂΎƛȽɀȾȽɀȯɂȷȽȼΎ ƙȼɂȶȽȼɇΎƝȲɅȯɀȲɁȳȼ˴ΎƨɀȳɁȷȲȳȼɂ ƨ˷Ƨ˷ΎƚȽɆΎ̷̸̯Ύ ƚȯɀɀȽɅ˴ΎƙȺȯɁȹȯΎ̸​̸̶̱̲Ύ ƨȶȽȼȳ˶Ύ̸̶̛̯̚Ύ̷̴̱˹̳​̵̳̯Ύ ƞȯɆ˶Ύ̸̶̛̯̚Ύ̷̴̱˹̳​̴̸̳Ύ ƯȳȰɁȷɂȳ˶ΎɅɅɅ˷ɃȹȾȷȹ˷ȱȽȻ

2011 ALASKA NATIVE REGIONAL CORPORATIONS DIRECTORY

Koniag Inc.

SUBSIDIARIES

William Anderson Jr., President & CEO 194 Alimaq Dr. Kodiak, AK 99615 Phone: 907-486-2530 Fax: 907-486-3325 www.koniag.com Acres: 935,351 Shareholders: 3,803 Alaska Employees: 79 2010 Gross Revenue: $149,500,000 2009 Gross Revenue: $115,569,000

2010 REVENUE SOURCES

Angayak Construction Enterprise Angeles Composite Technologies Inc. Clarus Environmental Services Clarus Fluid Intelligence Clarus Technologies LLC Digitized Schematic Solutions LLC Dowland Bach Frontier Systems Integrator LLC Karluk Wilderness Adventures Koniag Development Corp.

Koniag Services Inc. Koniag Technical Services Koniag Technology Solutions LUGO-KDC Professional Computing Resources Inc. Washington Management Group XMCO Inc.

Contract Revenue Earnings (from interest in affiliates) Investment Income Natural Resources Lease Income

NANA Regional Corp.

Marie Greene, President & CEO PO Box 49 Kotzebue, AK 99752 Phone: 907-442-3301 Fax: 907-442-2866 news@nana.com www.nana.com/regional Acres: 2.2 million Shareholders: 12,700 Alaska Employees: 13,000 2010 Gross Revenue: $1,592,826,000 2009 Gross Revenue: $1,257,803,772 2010 REVENUE SOURCES

Red Dog Mine Resource Development Business Operations

118

SUBSIDIARIES

NANA Development Corp.

Affigent LLC 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 Arctic Caribou Inn Ltd. Cazador LLC DOWL HKM Five Rivers Services LLC Ikun LLC Ki LLC Kisaq LLC Kotzebue Properties Inc. 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 Pegasus Aircraft Maintenance Services LLC Piksik LLC Portico Services LLC Qivliq Commercial Group Qivliq LLC SAVA LLC Sivuniq Inc. Synteras LLC TKC Global Solutions LLC Truestone Communications LLC Truestone LLC WHPacific Inc. Wolverine Services LLC

www.akbizmag.com • Alaska Business Monthly • September 2011

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2011 ALASKA NATIVE REGIONAL CORPORATIONS DIRECTORY

Sealaska Corp.

Chris McNeil Jr., President & CEO One Sealaska Plaza, Ste. 400 Juneau, AK 99801 Phone: 907-586-1512 Fax: 907-463-3897 webmaster@sealaska.com www.sealaska.com Acres: 290,000 Shareholders: 20,860 Alaska Employees: 580 2010 Gross Revenue: $223,823,000 2009 Gross Revenue: $196,017,000

SUBSIDIARIES

Alaska Coastal Aggregates Haa Aani LLC Kingston Environmental Managed Business Solutions Nypro Kanaak Alabama Nypro Kanaak Guadalajara Nypro Kanaak Iowa Sealaska Constructors Sealaska Environmental Services Sealaska Global Logistics Sealaska Timber Corp.

Security Alliance Synergy Systems

2010 REVENUE SOURCES

Natural Resources Manufacturing Investments Services Gaming Corporate and Other Income

120

www.akbizmag.com • Alaska Business Monthly • September 2011

2011 ALASKA NATIVE REGIONAL CORPORATIONS DIRECTORY

The 13th Regional Corp.

Michael Rawley, President Seattle Indian Center Leschi Building 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.

www.akbizmag.com • Alaska Business Monthly • September 2011

121

SPECIAL SECTION:

ALASKA NATIVE BUSINESS NEWS

Village Corporations Village

Corporation

Top Executive

Mailing Address

Phone

Akhiok Akhiok-Kaguyak Inc. Akhiok Ayakulik Inc. Akiachak Akiachak Ltd. Akiak Kokarmuit Corp.

Akutan Akutan Corp.

Alakanuk Alakanuk Native Corp.

Aleknagik Aleknagik Natives Ltd. Anaktuvuk Pass Nunamiut Corp.

Anchorage Caswell Native Association Anchorage Point Possession Inc. Andreafsky Nerkilikmute Native Corp.

Angoon Kootznoowoo Inc. Aniak The Kuskokwim Corp.

Aniak The Kuskokwim Corp. (Aniak Office) Anvik Deloy-Ges Inc. Atka Atxam Corp.

Atmautluak Atmautluak Ltd. Atqasuk Atqasuk Corp.

Barrow Ukpeagvik Inupiat Corp.

Beaver Beaver Kwit’chin Belkofski Belkofski Corp.

Bethel Bethel Native Corp.

Bill Moore’s Slough Kongniglkilnomuit Yuita Corp.

Birch Creek Tiheet’ Aii Inc. Brevig Mission Brevig Mission Native Corp.

Chalkyitsik Chalkyitsik Native Corp.

Chefornak Chefarnrmute Inc. Chenega Bay Chenega Corp.

Chevak Chevak Co. Corp.

Chickaloon Chickaloon-Moose Creek Native Association Inc. Chignik Far West Inc. Chignik Lagoon Chignik Lagoon Native Corp.

Chignik Lake Chignik River Ltd. Chitina Chitina Native Corp.

Chuloonawick Chuloonawick Corp.

Circle Danzhit Hanlaii Corp.

Clark’s Point Saguyak Inc. Cordova Eyak Corp.

Council Council Native Corp.

Craig Shaan-Seet Inc. Dillingham Choggiung Ltd. Dillingham Olsonville Inc. Diomede Diomede Native Corp.

Dot Lake Village Dot Lake Native Corp.

Eagle Village Hungwitchin Corp.

Eek Iqfijouaq Co. Inc. Egegik Becharof Corp.

Eklutna Eklutna Inc. Ekwok Ekwok Natives Ltd. Elim Elim Native Corp.

Emmonak Emmonak Corp.

Evansville Evansville Inc. Eyak Eyak Corp.

False Pass Isanotski Corp.

Fort Yukon Canyon Village Traditional Council Fort Yukon Gwitchyaa Zhee Corp.

Galena Gana-A’ Yoo Ltd.

David Goade Marvin Agnot Willie Kasayulie Ivan Ivan Darryl Pelky Shelby Edmund Bobby Andrew Larry Burris Margaret Ward Feodoria Pennington William Alstrom Peter Naoroz Maver Carey Maver Carey Ernest Demoski Mark Snigaroff Peter Waska Sr. Jimmy Nayukok Anthony Edwardsen Greg Hope Simon Kuzakin Ana Hoffman Mary Unok Pete Williams Walter Seetot Robin Jonas Robert Panruk Charles Totemoff James Ayuluk Edith Baller

1400 W. Benson Blvd., Ste. 425, Anchorage, AK 99503 3741 Richmond, Ste. 5, Anchorage, AK 99514 PO Box 51010, Akiachak, AK 99551 PO Box 52147, Akiak, AK 99552 PO Box 8, Akutan, AK 99553 PO Box 148, Alakanuk, AK 99554 PO Box 1630, Dillingham, AK 99576 PO Box 21009, Anaktuvuk Pass, AK 99721 12020 Old Seward Hwy., Anchorage, AK 99515 1321 Oxford Dr., Anchorage, AK 99503 PO Box 87, Saint Mary’s, AK 99658 8585 Old Dairy Rd., Ste. 104, Juneau, AK 99801 4300 B St., Ste. 207, Anchorage, AK 99503 PO Box 227, Aniak, AK 99557 PO Box 150, Anvik, AK 99558 PO Box 47001, Atka, AK 99547 PO Box 6548, Atmautluak, AK 99559 Tikiglyk & Akpik St., Atqasuk, AK 99791 PO Box 890, Barrow, AK 99723 PO Box 24090, Beaver, AK 99724 PO Box 46, King Cove, AK 99612 PO Box 719, Bethel, AK 99559 PO Box 20037, Kotlik, AK 99620 PO Box 71372, Fairbanks, AK 99701 PO Box 85024, Brevig Mission, AK 99785 PO Box 53, Chalkyitsik, AK 99788 PO Box 70, Chefornak, AK 99561 3000 C St., Ste. 301, Anchorage, AK 99503 PO Box 276, Chevak, AK 99563 PO Box 875046, Wasilla, AK 99687

907-258-0604 907-279-7911 907-825-4328 907-765-7228 907-698-2206 907-238-3117 907-842-2385 907-661-3220 907-345-6626 907-563-1848 907-438-2332 907-790-2992 907-243-2944 907-675-4275 907-663-6396 907-839-2237 907-553-5428 907-633-6414 907-852-4460 907-456-4183 907-497-3122 907-543-2124 907-899-4232 907-221-2212 907-642-4091 907-848-8112 907-867-8115 907-277-5706 907-858-7920 907-373-1145

Margie Macauley Waite PO Box 124, Chignik, AK 99603 Rhonda Gregorio PO Box 169, Chignik Lagoon, AK 99565 John Lind PO Box 48008, Chignik Lake, AK 99548 Anne Thomas PO Box 3, Chitina, AK 99566 Tim Akers 2635 Draper Dr, Anchorage, AK 99508 Paul John PO Box 71372, Fairbanks, AK 99701 Joseph Clark PO Box 4, Clarks Point, AK 99569 Nancy Barnes PO Box 340, Cordova, AK 99574 Barbara Vial PO Box 1183, Nome, AK 99762 Leona Casey PO Box 690, Craig, AK 99921 Bryce Edgmon PO Box 330, Dillingham, AK 99576 Dennis Olson PO Box 571, Dillingham, AK 99576 Patrick E. Soolook PO Box 7040, Diomede, AK 99762 Roberta Hamilton PO Box 2271, Dot Lake, AK 99737 Adelene Galen PO Box 81927, Fairbanks, AK 99738 Steven White PO Box 49, Eek, AK 99578 Hazel Nelson 1225 E. Int’l Airport Rd., Ste. 135, Anchorage, AK 99518 Michael Curry 16515 Centerfield Dr., Ste. 201, Eagle River, AK 99577 Luki Akelkok Sr. PO Box 1189, Dillingham, AK 99580 Albert Saccheus PO Box 39010, Elim, AK 99739 Douglas Redsox Kwiguk St., Emmonak, AK 99581 Shirley Lee 122 First Ave., Ste. 202-B, Fairbanks, AK 99701 Rod Worl PO Box 340, Cordova, AK 99574 Nancy Dushkin 101 Isanotski Dr., False Pass, AK 99583 Stanley Jonas PO Box 13, Fort Yukon, AK 99740 Clarence Alexander PO Box 329, Fort Yukon, AK 99740 Betty Huntington 6927 Old Seward Hwy., Ste. 200, Anchorage, AK 99503 www.akbizmag.com • Alaska Business Monthly • September 2011

907-235-7981 907-840-2225 907-845-2212 907-823-2223 907-562-7008 907-455-8484 907-236-1235 907-424-7161 907-443-7649 907-826-3251 907-842-5218 907-842-3511 907-686-3221 907-882-2755 907-488-5782 907-536-5211 907-561-4777 907-696-2828 907-464-3317 907-890-3741 907-949-1411 907-451-8008 907-424-7161 907-548-2217 907-662-2502 907-662-3056 907-569-9599

122

Village

Gambell Golovin Goodnews Bay Grayling Hamilton Healy Lake Healy Lake Holy Cross Hoonah Hooper Bay Hughes Hydaburg Igiugig Iliamna Ivanof Bay Kake Kaktovik Kasaan Kasigluk King Cove King Island Kipnuk Klawock Klukwan Knik-Fairview Kodiak Kodiak Koliganek Kongiganak Kotlik Kotzebue Koyuk

Corporation

Top Executive

Mailing Address

Phone

Sivuqaq Inc. Golovin Native Corp.

Kuitsarak Inc. Hee-Yea-Lingde Corp.

Nunapiglluraq Corp.

Healy Lake Trade Village Corp.

Mendas Cha-ag Native Corp.

Deloycheet Inc. Huna Totem Corp.

Sea Lion Corp.

Kâ&#x20AC;&#x2122;oyitlâ&#x20AC;&#x2122;otsâ&#x20AC;&#x2122;ina Ltd. Haida Corp.

Igiugig Native Corp.

Iliamna Natives Ltd. Bay View Inc. Kake Tribal Corp.

Kaktovik Inupiat Corp.

Kavilco Inc. Kasigluk Inc. King Cove Corp.

King Island Native Corp.

Kugkaktlik Ltd. Klawock Heenya Corp.

Klukwan Inc. Knikatnu Inc. Litnik Inc. Shuyak Inc. Koliganek Natives Ltd. Qemirtalek Coast Corp.

Kotlik Yupik Corp.

Kikiktagruk Inupiat Corp.

Koyuk Native Corp.

Merle Apassingok Nina Jane Patkotak James K. Roberts Gabriel Nicholi Sr. Donna Kamkoff Fred Kirsteatter Gary Lee Rudy A Walker Lawrence Gaffaney Myron Naneng Fred Bifelt Alvin Edenshaw Dallia Andrews Lorene Anelon Edgar Shangin Bertha Cavanaugh Philip Tikluk Jr. Louis A Thompson Howard R. Tinker Dean Gould Eleanor Sebwenna Carl Dock Art Demmert Jr. Les Katzeek Theodore Garcia Victoria Woodward Lois Stover Herman Nelson William Igkurak Peter Elachik Cheryl Edenshaw Clifford Charles

PO Box 101, Gambell, AK 99742 PO Box 62099, Golovin, AK 99762 PO Box 150, Goodnews Bay, AK 99589 PO Box 9, Grayling, AK 99590 Hamilton T C PO Box 20102, Kotlik, AK 99620 PO Box 60300 Healy Lake 19, Fairbanks, AK 99706 457 Cindy Dr., Fairbanks, AK 99701 PO Box 228, Holy Cross, AK 99602 9309 Glacier Hwy., Ste. A-103, Juneau, AK 99801 PO Box 87, Hooper Bay, AK 99604 1603 College Rd., Fairbanks, AK 99709 PO Box 89, Hydaburg, AK 99922 PO Box 4009, Igiugig, AK 99613 PO Box 245, Iliamna, AK 99606 PO Box 233407, Anchorage, AK 99523 PO Box 263, Kake, AK 99830 10 A St., Kaktovik, AK 99747 PO Box KXA Kasaan, Ketchikan, AK 99950 PO Box 39, Kasigluk, AK 99609 PO Box 38, King Cove, AK 99612 PO Box 992, Nome, AK 99762 PO Box 36, Kipnuk, AK 99614 PO Box 129, Klawock, AK 99925 PO Box 209, Haines, AK 99827 PO Box 872130, Wasilla, AK 99687 PO Box 1962, Kodiak, AK 99615 PO Box 727, Kodiak, AK 99615 C/O Jerry L. Liboff, Dillingham, AK 99576 General Delivery, Kongiganak, AK 99559 PO Box 20207, Kotlik, AK 99620 PO Box 1050, Kotzebue, AK 99752 PO Box 53050, Koyuk, AK 99753

907-985-5826 907-779-3251 907-967-8428 907-453-5133 907-899-4453 907-876-0638 907-452-3094 907-476-7177 907-789-1773 907-758-4015 907-452-8119 907-285-3721 907-533-8001 907-571-1246 907-561-6493 907-785-3221 907-640-6120 907-542-2214 907-477-6113 907-497-2312 907-443-5494 907-896-5414 907-755-2270 907-766-2211 907-376-2845 907-486-4833 907-486-3842 907-596-3434 907-557-5529 907-899-4014 907-442-3165 907-963-2424

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ZZZ DNEL]PDJ FRP www.akbizmag.com â&#x20AC;˘ Alaska Business Monthly â&#x20AC;˘ September 2011

123

Village

Corporation

Top Executive

Mailing Address

Phone

Kwethluk Kwethluk Inc. Kwigillingok Kwik Inc. Levelock Levelock Natives Ltd. Lime Village Lime Village Co. Manley Hot Springs Bean Ridge Corp.

Manokotak Manokotak Natives Ltd. Marshall Maserculiq Inc. Mary’s Igloo Mary’s Igloo Native Corp.

McGrath MTNT Ltd. Mekoryuk Nima Corp.

Minto Seth-De-Ya-Ah Corp.

Mountain Village Azachorok Inc. Naknek Paug-Vik Inc. Ltd. Nanwalek English Bay Corp.

Napakiak Napakiak Corp.

Napaskiak Napaskiak Inc. Nelson Lagoon Nelson Lagoon Corp.

Nenana Toghotthele Corp.

New Stuyahok Stuyahok Ltd. Newtok Newtok Corp.

Nightmute Chinuruk Inc. Nikolski Chaluka Corp.

Ninilchik Ninilchik Native Association Inc. Nome Sitnasuak Native Corp.

Nondalton Kijik Corp.

Northway Village Northway Natives Inc. Nuiqsut Kuukpik Corp.

Nunam Iqua Swan Lake Corp.

Nunapitchuk Nunapitchuk Ltd. Ohogamiut Ohog Inc. Old Harbor Old Harbor Native Corp.

Oscarville Oscarville Native Corp.

James M. Nicori Noah Andrew Raymond Apokdak Sandy Williams Dixie Dayo Michael Alakayak Timothy Andrew Richard Komok Vicki Otte Wayne Don Melvin Charllie Felix P. Hess Abe Williams Don Emmal Carl Motgin Phillip Nicholai Jr. Paul Gunderson Alfred R Ketlzer Sr Peter Christopher Sr. Larry Charles Mike Joe Sr. Dora Johnson Gary Oskolkoff Robert Fagerstrom Karen E Stickman Diana L Ervin Isaac Nukapigak Joseph Afcan Franklin Brink Charlie Boots Emil Christiansen Sr. Nicholai Steven

PO Box 109, Kwethluk, AK 99621 PO Box 50, Kwigillingok, AK 99622 PO Box 109, Levelock, AK 99625 PO Box 92813, Anchorage, AK 99627 PO Box 82062, Fairbanks, AK 99708 PO Box 149, Manokotak, AK 99628 PO Box 90, Marshall, AK 99585 PO Box 650, Teller, AK 99778 PO Box 309, McGrath, AK 99627 PO Box 52, Mekoryuk, AK 99607 PO Box 56, Minto, AK 99758 PO Box 32213, Mountain Village, AK 99632 PO Box 61, Naknek, AK 99633 1637 Stanton Ave., Anchorage, AK 99508 PO Box 34030, Napakiak, AK 99634 PO Box 6069, Napaskiak, AK 99559 General Delivery, Nelson Lagoon, AK 99571 PO Box 249, Nenana, AK 99760 PO Box 50, New Stuyahok, AK 99636 PO Box 5528, Newtok, AK 99559 PO Box 90009, Nightmute, AK 99690 PO Box 104, Nikolski, AK 99638 PO Box 39130, Ninilchik, AK 99639 PO Box 905, Nome, AK 99762 4155 Tudor Centre Dr., Ste. 104, Anchorage, AK 99508 PO Box 401, Northway, AK 99764 PO Box 89187, Nuiqsut, AK 99789 PO Box 31, Nunam Iqua, AK 99666 251 7TH AVE, Bethel, AK 99641 PO Box 49, Marshall, AK 99585 PO Box 71, Old Harbor, AK 99643 PO Box 6149, Oscarville, AK 99559

907-757-6613 907-588-8112 907-287-3040 907-526-5228 907-672-3331 907-289-1062 907-679-6512 907-642-2308 907-524-3391 907-827-8636 907-798-7181 907-591-2527 907-246-4277 907-281-2208 907-589-2227 907-737-7413 907-989-2204 907-832-5461 907-693-3122 907-237-2512 907-647-6115 907-576-2216 907-567-3866 907-443-2632 907-561-4487 907-778-2298 907-480-6220 907-498-4227 907-527-5717 907-679-6517 907-286-2286

124

www.akbizmag.com • Alaska Business Monthly • September 2011

Village

Corporation

Top Executive

Mailing Address

Phone

Ouzinkie Ouzinkie Native Corp.

Paimiut Paimiut Corp.

Palmer Montana Creek Native Assoc.

Pauloff Harbor Sanak Corp.

Pedro Bay Pedro Bay Native Corp.

Perryville Oceanside Native Corp.

Pilot Point Pilot Point Native Corp.

Pilot Station Pilot Station Inc. Pitkas Point Pitkas Point Native Corp.

Platinum Arviq Inc. Point Hope Tigara Corp.

Point Lay Cully Corp.

Port Alsworth Tanalian Inc. Port Graham Port Graham Corp.

Port Lions Afognak Native Corp.

Quinhagak Qanirtuuq Inc. Rampart Baan O Yeel Kon Corp.

Ruby Dineega Corp.

Russian Mission Russian Mission Native Corp.

Saint George St. George Tanaq Corp.

Saint Mary’s Saint Mary’s Native Corp.

Saint Michael St. Michael Native Corp.

Saint Paul Tanadgusix Corp.

Salamatof Salamatof Native Assoc. Inc. Sand Point Sanak Corp.

Sand Point Shumagin Corp.

Sand Point Unga Corp.

Savoonga Kukulget Inc. Saxman Cape Fox Corp.

Scammon Bay Askinuk Corp.

Seldovia Seldovia Native Association Inc. Shageluk Zho-Tse Inc.

Michael O’Connor Franklin Napoleon Janet Daniels George Gunderson Norman Jacko Patrick Kosbruck Cecelia Meyers Arthur Heckman Sr. Anna Tinker Helen Kilbuck Rex Rock Dolly Norton John Alsworth Lyoyd H. Stiassny Virginia Ward Pauline Matthew Linda Evans Pat Sweetsir Cecilia Housler Laurence Lestenkof Florence Busch Alberta Steve Anthony Philemonoff Penny Carty Connie Kochuten William Dushkin Sr. Benjamin Johansen Morris Toolie Jr. Mike Brown James Akererea Leo Barlow David Walker

PO Box 89, Ouzinkie, AK 99644 PO Box 209, Hooper Bay, AK 99604 630 Price St., Anchorage, AK 99688 PO Box 194, Sand Point, AK 99661 1500 W. 33rd Ave., Ste. 3220, Anchorage, AK 99503 PO Box 84, Perryville, AK 99648 2950 Telequana, Wasilla, AK 99654 General Delivery, Pilot Station, AK 99650 PO Box 184, St. Mary’s, AK 99658 PO Box 9, Platinum, AK 99651 2121 Abbott Rd., Anchorage, AK 99507 405 E. Fireweed, Ste. 203, Anchorage, AK 99503 2425 Merrill Field Dr., Anchorage, AK 99501 PO Box 5569, Port Graham, AK 99603 215 Mission Rd., Ste. 212, Kodiak, AK 99615 PO Box 69, Quinhagak, AK 99655 PO Box 74558, Fairbanks, AK 99708 PO Box 25, Ruby, AK 99768 PO Box 48, Russian Mission, AK 99657 4000 Old Seward Hwy., Ste. 104, Anchorage, AK 99503 PO Box 149, Saint Mary’s, AK 99658 PO Box 59049, St. Michael, AK 99659 PO Box 88, Saint Paul, AK 99660 PO Box 2682, Kenai, AK 99611 PO Box 194, Sand Point, AK 99661 PO Box 189, Sand Point, AK 99661 PO Box 130, Sand Point, AK 99661 PO Box 160, Savoonga, AK 99769 PO Box 8558, Ketchikan, AK 99901 PO Box 89, Scammon Bay, AK 99662 PO Drawer L, Seldovia, AK 99663 PO Box 108, Shageluk, AK 99665

907-680-2208 907-527-4915 907-733-2337 907-383-6075 907-277-1500 907-853-2300 907-376-0658 907-549-3512 907-438-2953 907-979-8113 907-365-6299 907-833-2705 907-333-1228 907-284-2212 907-486-6014 907-556-8289 907-456-6259 907-468-4405 907-584-5885 907-272-9886 907-438-2961 907-923-3143 907-546-2312 907-283-7864 907-383-6075 907-383-3525 907-383-3681 907-984-6184 907-225-5163 907-558-5411 907-234-7625 907-473-8262

www.akbizmag.com • Alaska Business Monthly • September 2011

125

Village

Shaktoolik Shishmaref Solomon South Naknek Stebbins Stevens Village Susitna Tanacross Tanana Tatitlek Teller Togiak Toksook Bay Tuluksak Tuntutuliak Tununak Twin Hills Tyonek Unalakleet Unalaska Uyak Wainwright Wales White Mountain Woody Island Yakutat

Corporation

Top Executive

Mailing Address

Phone

Shaktoolik Native Corp.

Shishmaref Native Corp.

Solomon Native Corp.

Alaska Peninsula Corp.

Stebbins Native Corp.

Dinyea Corp.

Alexander Creek Inc. Tanacross Inc. Tozitna Ltd. Tatitlek Corp.

Teller Native Corp.

Togiak Natives Corp.

Nunakauiak Yupik Corp.

Tulkisarmute Inc. Tuntutuliak Land Ltd. Tununrmiut Rinit Corp.

Twin Hills Native Corp.

Tyonek Native Corp.

Unalakleet Native Corp.

Ounalaska Corp.

Uyak Inc. Olgoonik Corp.

Wales Native Corp.

White Mountain Native Corp.

Leisnoi Inc. Yak-Tat Kwaan Inc.

Theresa Perry Percy Nayokouk Rose Ann Timbers Ralph Angasan Sr. Nora Tom Randy Mayo Stephanie Thiele Thompson Robert Brean Nina Heyano Roy Totemoff Roger Menadelook Stanley Active Jr. Francis Sipary Joseph Alexie Archie Andrew Frank Flynn John Sharp Michaelene Stephan Steve Ivanoff Wendy Svarny-Hawthorne Gabriel McKilly Jr. June Childress Winton Weyapuk Jr. Roy Ashenfelter Carole Pagano Casey Havens

PO Box 46, Shaktoolik, AK 99771 PO Box 151, Shishmaref, AK 99772 PO Box 243, Nome, AK 99762 111 West 16th Ave., Ste. 101, Anchorage, AK 99501 PO Box 110, Stebbins, AK 99671 PO Box 71372, Fairbanks, AK 99707 8128 Cranberry St., Anchorage, AK 99502 PO Box 76029, Tanacross, AK 99776 PO Box 77129, Tanana, AK 99777 PO Box 650, Cordova, AK 99574 PO Box 590, Teller, AK 99778 PO Box 150, Togiak, AK 99678 PO Box 37068, Toksook Bay, AK 99637 PO Box 65, Tuluksak, AK 99679 PO Box 8106, Tuntutuliak, AK 99680 PO Box 89, Tununak, AK 99681 PO Box TWA, Twin Hills, AK 99576 1689 C St., Ste. 219, Anchorage, AK 99501 PO Box 100, Unalakleet, AK 99684 PO Box 149, Unalaska, AK 99685 PO Box 31, Chignik, AK 99615 PO Box 29, Wainwright, AK 99782 PO Box 529, Wales, AK 99783 PO Box 81, White Mountain, AK 99784 2713 N 63rd St., Mesa, AZ 85215 PO Box 416, Yakutat, AK 99689

907-955-3241 907-649-3751 907-443-7526 907-274-2433 907-934-3074 907-474-8224 907-243-5428 907-883-4130 907-366-7255 907-424-3777 907-642-6132 907-493-5520 907-427-7929 907-695-6420 907-256-2315 907-652-6311 907-525-4327 907-272-0707 907-624-3411 907-581-1276 907-749-2239 907-763-2614 907-664-3641 907-638-3651 480-471-8213 907-784-3335

Editors Note: Village Corporations listings are from the Division of Community & Regional Affairs at the Alaska Department of Commerce. Changes and corrections should be emailed to DCRAresearch&analysis@alaska.gov or faxed to 907-269-4539.

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www.alaskachamber.com 126

www.akbizmag.com • Alaska Business Monthly • September 2011

ALASKA TRENDS

BY WILLIAM COX Alaska Trends, an outline of significant statewide statistics, is provided by the University of Alaska Center for Economic Development.

Housing and Food Inflation Anchorage vs. U.S. (1985-2010)

T

he cost of living in Anchorage is higher than the national average for the United States. This cost variance is due to several of the components that make up the Consumer Price Index (CPI). The CPI is used to measure the increase in costs of specific products over time, relative to a selected base year (whose value is usually set to 100 for ease of comparison). In the comparison of Anchorage to the U.S. national average, a large part of its higher costs are due to housing and food.

The chart shows CPI figures for both primary residence and food purchased for home, for Anchorage and the U.S. from 1985 through 2010. All of the CPI rates show a steady mostly linear increase since 1985, except Anchorage primary residence which had a substantial decrease from 1985 through approximately 1991 at which point it had regained its 1985 level. Despite the higher absolute costs for both housing and food in Anchorage, both of these costs have

experienced more gradual cost increases relative to the U.S. average. This narrowing of the gap in costs essentially means that, all else being equal, Anchorage residents are becoming better off relative to the U.S. ❑ average than in the past.

Sources: 1 Alaska Economic Trends (July 2005): http://www.labor.state.ak.us/trends/jul05.pdf

2 Bureau of Labor Statistics (BLS): http://www.bls.gov

ALASKA TRENDS HAS BEEN BROUGHT TO YOU THIS MONTH COURTESY OF AMERICAN MARINE/PENCO

www.akbizmag.com • Alaska Business Monthly • September 2011

127

ALASKA TRENDS Indicator

Units

GENERAL Personal Income – Alaska Personal Income – United States Consumer Prices – Anchorage Consumer Prices – United States Bankruptcies Alaska Total Anchorage Total Fairbanks Total EMPLOYMENT Alaska Anchorage & Mat-Su Fairbanks Southeast Gulf Coast Sectoral Distribution – Alaska Total Nonfarm 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 Truck Transportation Information Telecommunications Financial Activities Professional & Business Svcs Educational & Health Services Health Care Leisure & Hospitality Accommodation Food Svcs & Drinking Places Other Services Government Federal Government State Government State Education Local Government Local Education Tribal Government1 Labor Force Alaska Anchorage & Mat-Su Fairbanks Southeast Gulf Coast

128

Period

Latest Report Period

Previous Report Period (revised)

Year Ago Period

Year Over Year Change

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

1st Q11 1st Q11 1st H11 1st H11

32,413 12,915,008 200.28 223.60

31,709 12,686,624 195.46 218.58

30,853 12,334,336 194.834 217.535

5.06% 4.71% 2.79% 2.79%

Number Filed Number Filed Number Filed

May May May

75 57 14

94 69 15

101 78 17

-25.74% -26.92% -17.65%

Thousands Thousands Thousands Thousands Thousands

May May May May May

337.37 183.87 44.22 39.22 36.33

330.94 183.91 43.18 36.19 34.72

333.02 181.83 43.35 38.52 36.14

1.31% 1.12% 2.02% 1.80% 0.53%

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

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 May

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 3.3 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

321.4 40.3 281.1 16.0 15.6 13.1 14.5 9.8 6.4 62.7 6.0 35.1 6.1 10.0 21.6 5.6 3.3 6.4 4.3 15.1 26.1 43.1 31.5 30.3 6.0 19.7 11.6 85.8 16.7 26.7 8.6 42.4 25.5 3.7

325.1 42.0 283.1 15.3 15.0 12.5 16.4 10.3 6.6 64.1 6.3 35.8 6.3 9.9 22.0 5.7 3.2 6.3 4.1 14.8 26.3 41.6 29.9 32.9 8.0 20.0 11.5 85.6 18.7 25.2 7.0 41.7 24.0 3.7

1.05% -0.71% 1.31% 6.54% 5.33% 5.60% -1.22% -10.68% -15.15% 2.81% -1.59% 1.96% 0.00% 1.01% 5.45% 5.26% 3.12% 3.17% 4.88% 0.68% 1.14% 3.85% 5.69% 3.95% -11.25% 8.50% 1.74% -2.10% -7.49% 0.40% 0.00% -1.20% -0.42% 2.70%

Thousands Thousands Thousands Thousands Thousands

May May May May May

364.28 197.06 47.28 41.95 39.65

358.46 197.37 46.27 39.07 38.27

360.63 195.83 46.49 41.28 39.46

1.01% 0.63% 1.71% 1.61% 0.49%

www.akbizmag.com • Alaska Business Monthly • September 2011

SPONSORED

Indicator

Units

Unemployment Rate Alaska Anchorage & Mat-Su Fairbanks Southeast Gulf Coast United States

BY

AMERICAN MARINE/PENCO

Period

Latest Report Period

Previous Report Period (revised)

Year Ago Period

Year Over Year Change

Percent Percent Percent Percent Percent Percent

May May May May May May

7.4 6.7 6.5 6.5 8.4 8.7

7.7 6.8 6.7 7.4 9.3 8.7

7.7 7.1 6.8 6.7 8.4 9.3

-3.90% -5.63% -4.41% -2.99% 0.00% -6.45%

Millions of Barrels Billions of Cubic Ft. $ per Barrel

May May May

18.04 9.41 113.57

18.18 10.08 120.86

17.03 9.19 74.23

5.96% 2.39% 52.99%

Active Rigs Active Rigs $ Per Troy Oz. $ Per Troy Oz. Per Pound

May May May May May

5 1836 1,511.31 36.75 1.08

5 1790 1,474.12 41.97 1.19

9 1513 1,204.88 18.50 0.98

-44.44% 21.35% 25.43% 98.65% 10.18%

Millions of $ Millions of $ Millions of $

May May May

45.69 13.19 32.49

61.29 13.83 47.46

36.42 19.94 16.48

25.44% -33.83% 97.15%

Total Deeds Total Deeds

May May

650 No Data

628 No Data

735 298

-11.56%

VISITOR INDUSTRY Total Air Passenger Traffic – Anchorage Total Air Passenger Traffic – Fairbanks

Thousands Thousands

May May

415.52 83.56

331.86 65.30

319.31 64.14

30.13% 30.28%

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

41,077.80 41,514.20 222.3 (204.3) 36.2 17.3 (462.7)

41,171.30 41,762.40 145.7 1,155.4 130.5 92.9 711.4

34,648.30 36,260.40 276.6 (1,569.5) (42.1) (18.3) (1,606.4)

18.56% 14.49% -19.63% 86.98% 185.99% 194.54% 71.20%

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 $

1st Q11 1st Q11 1st Q11 1st Q11 1st Q11 1st Q11 1st Q11 1st Q11 1st Q11

2,098.95 43.60 155.42 1,123.90 12.37 1,849.81 1,809.77 528.42 1,281.35

2,078.40 29.07 156.42 1,150.21 15.06 1,832.10 1,786.15 470.20 1,315.95

1,961.82 32.13 137.69 1,134.99 20.34 1,727.68 1,690.30 428.10 1,262.20

6.99% 35.72% 12.87% -0.98% -39.17% 7.07% 7.07% 23.43% 1.52%

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

81.10 0.97 0.61 0.70 6.50

83.29 0.96 0.61 0.69 6.53

92.04 1.04 0.68 0.79 6.83

-11.89% -7.01% -10.15% -12.02% -4.86%

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 Fairbanks – Recording District

Data compiled by University of Alaska Center for Economic Development.

www.akbizmag.com • Alaska Business Monthly • September 2011

129

ADVERTISERS INDEX AES Alaska Executive Search Inc. . . .

Afognak Native Corp. . . . . . . . . . .

Ahtna Inc. . . . . . . . . . . . . . . . .

Alaska Air Cargo . . . . . . . . . . . .

Alaska Chrysler Dodge . . . . . . . . .

Alaska Growth Capital . . . . . . . . .

Alaska Hearing Aid Institute . . . . . .

Alaska Miners Association . . . . . . .

Alaska Native Professional Association Alaska Native Tribal Health Consortium . . . . . . . . . . . . .

Alaska Photobooth . . . . . . . . . . .

Alaska State Chamber of Commerce. .

Alaska USA Federal Credit Union . . .

Altius Consulting . . . . . . . . . . . .

American Marine/PENCO . . . . . . .

Amerigas Propane . . . . . . . . . . .

Anchorage Chrysler Dodge. . . . . . .

Anchorage Opera. . . . . . . . . . . .

Arctic Controls . . . . . . . . . . . . .

Arctic Foundations Inc. . . . . . . . . .

Arctic Fox Steel Buildings. . . . . . . .

Arctic Office Products (Machines) . . .

ASRC Energy Services. . . . . . . . .

AT&T Alaska . . . . . . . . . . . . . .

Azimuth Adventure Photography . . . .

Bristol Bay Native Corp.. . . . . . . . .

Business Insurance Associates Inc. . .

Calista Corp. . . . . . . . . . . . . . .

130

. . . . . . . . .

. . . . . . . . .

. . . . . . . . .

. 83 . 97 120 . 61 109 . 73 . 71 . 67 . 76

. . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . .

. 69 . 71 126 119 . 70 127 . 71 109 . 52 . 38 . 35 . 68 . 76 . 38 . 29 123 115 . 57 . 84

Carlile Transportation Systems . .

CCI Automated Technologies . . .

City Electric . . . . . . . . . . . .

Chris Arend Photography . . . . .

Construction Machinery Industrial LLC . . . . . . . . .

Craters and Freighters Franchise Co. . . . . . . . . .

Credit Union 1 . . . . . . . . . .

Crowley . . . . . . . . . . . . . .

Cruz Construction Inc. . . . . . .

Delta Western. . . . . . . . . . .

Design Alaska . . . . . . . . . .

Dowland-Bach Corp. . . . . . . .

Doyon Emerald . . . . . . . . . .

Doyon Ltd. . . . . . . . . . . . .

EDC Inc. . . . . . . . . . . . . .

Eklutna Native Corp. . . . . . . .

Engineered Fire & Safety . . . . .

ERA Aviation . . . . . . . . . . .

ERA Helicopters . . . . . . . . .

Everts Air Cargo . . . . . . . . .

First National Bank Alaska . . . .

Fugro . . . . . . . . . . . . . . .

GCI . . . . . . . . . . . . . . . .

Golden Valley Electric Association Golder Associates Inc. . . . . . .

Great Originals . . . . . . . . . .

Green Star Inc. . . . . . . . . . .

Hawk Consultants LLC . . . . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. 47 . 62 . 45 130

. . . . . . 131 . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . .

. 23 . 68 . 19 . 63 125 . 41 . 33 . 31 . 99 . 62 121 . 40 . 64 . 41 . 74 . .5 . 27 . 51 . 87 . 31 . 97 . 70 . 41

Holmes Weddle & Barcott . . . .

Hotel Captain Cook . . . . . . . .

Hydraulic Repair and Design . . .

James & Elsie Nolan Center . . .

Judy Patrick Photography. . . . .

Kendall Ford Wasilla . . . . . . .

KeyBank . . . . . . . . . . . . .

Kinross Fort Knox. . . . . . . . .

Koniag Inc. . . . . . . . . . . . .

Land’s End Resort . . . . . . . .

Landye Bennett Blumstein LLP. .

Little Caesar Enterprises Inc.. . .

Lounsbury and Associates . . . .

Lynden Inc. . . . . . . . . . . . .

Microcom . . . . . . . . . . . . .

Mikunda Cottrell & Co. . . . . . .

MT Housing Inc. . . . . . . . . .

NALCO Energy Services . . . . .

NANA Development Corp. . . . .

NANA Regional Corp.. . . . . . .

NCB. . . . . . . . . . . . . . . .

Neeser Construction Inc. . . . . .

New York Life . . . . . . . . . . .

Northern Air Cargo . . . . . . . .

Northrim Bank . . . . . . . . . .

Northwest Ironworkers Employers Association . . . . . . . . . .

Olgoonik Development Corp. . . .

Pacific Pile & Marine . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . .

. . . 57 . . . 58 . . . 27 . . . 23 . . . 40 . . . 20 . . . 15 . . . 28 . . . 80 . . . 13 . . . 16 . . . 70 . . . 37 . . . .2 . . . 85 . . 124 . . . 34 . . . 68 . . . 77 . . . 25 . . . 89 . . . 79 . . . .3 . 54, 55 . . . 59

. . . . . . . 33 . . . . . . 113 . . . . 8, 9, 10

Paramount Supply . . . . . . .

Parker Smith & Feek . . . . . .

Patton Boggs . . . . . . . . . .

PDC Engineers Inc.. . . . . . .

Peak Oilfield Services . . . . .

Pen Air . . . . . . . . . . . . .

Port of Anchorage . . . . . . .

Richmond Steel Recycling Ltd. .

Rosie’s Delivery. . . . . . . . .

Ryan Air. . . . . . . . . . . . .

Seekins Ford Lincoln Mercury Fleet . . . . . . . .

Shaw Environmental & Infrastructure Group. . . . .

Stellar Designs Inc. . . . . . . .

Sullivan’s of Alaska Inc.. . . . .

Sundog Media . . . . . . . . .

Superstar Pastry Design . . . .

The Aleut Corp. . . . . . . . . .

The Coast International Inn. . .

The Growth Company . . . . .

Tobacco Prevention Control. . . . . . . . . . . .

Ukpeagvik Inupiat Corp. . . . .

Umiaq LLC . . . . . . . . . . .

Washington Crane & Hoist . . .

Waste Management . . . . . .

Wells Fargo . . . . . . . . . . .

WHPacific. . . . . . . . . . . .

www.akbizmag.com • Alaska Business Monthly • September 2011

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. . . . . . . . . .

. . . . . . . . . .

. 71 . 43 . 75 . 34 . 37 . 89 . 49 . 87 . 70 . 81

. . . . . . . . 39 . . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. 67 . 71 . 53 . 71 . 70 . 74 . 53 . 16

. . . . . . .

. . . . . . .

. . . . . . .

. . . . . . .

. . . . . . .

. . . . . . .

. . . . . . .

. 65 117 . 32 . 21 . 17 132 . 62

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4.99% promotional rate through September 30, 2011* Take advantage of a special rate on a Wells Fargo BusinessLineÂŽ or Wells Fargo Small Business AdvantageÂŽ line of credit â&#x20AC;&#x201D; apply by April 15, 2011, and enjoy a low 4.99% ďŹ xed rate through September 30, 2011.* Your Wells Fargo credit line beneďŹ ts your business in these key ways: Ć&#x152;É&#x2020; 0++' ( )/.É&#x201E; .#É&#x201E;ĹŤ*2É&#x201E;2$/#*0/É&#x201E;/4$)"É&#x201E;0+É&#x201E;*+ - /$)"É&#x201E;!0) . Ć&#x152;É&#x2020;É&#x201E; -*1$ .É&#x201E;ĹŤ 3$ ' É&#x201E;!0) $)"É&#x201E;!*-É&#x201E;( &$)"É&#x201E; +$/ 'É&#x201E;$(+-*1 ( )/.Ć&#x2021;É&#x201E; ,0$-$)"É&#x201E;$)1 )/*-4Ć&#x2021;É&#x201E; ) É&#x201E;( ) "$)"É&#x201E; . .*) 'É&#x201E;ĹŤ0 /0 /$*). Ć&#x152;É&#x2020;É&#x201E; +.É&#x201E; *0)/.É&#x201E;$)É&#x201E;"** É&#x201E;./ ) $)"É&#x201E;$)É&#x201E;/# É&#x201E; 1 )/É&#x201E;*!É&#x201E;* .$*) 'É&#x201E;*1 - - !/.É&#x201E;2$/#É&#x201E;*+/$*) 'É&#x201E; 1 - - !/É&#x201E; -*/ /$*) Ć&#x152;É&#x2020; -*1$ .É&#x201E; ..0- ) É&#x201E;/# /É&#x201E; É&#x201E;+ 4( )/É&#x201E;2$''É&#x201E;) 1 -É&#x201E; É&#x201E;($.. É&#x201E;2$/#É&#x201E;*+/$*) 'É&#x201E; 0/*( /$ É&#x201E;+ 4( )/.

'0.Ć&#x2021;É&#x201E;4*0É&#x201E; )É&#x201E; ..É&#x201E;4*0-É&#x201E;!0) .É&#x201E;/#-*0"#É&#x201E; # &.Ć&#x2021;É&#x201E; ./ - - ÂŽ access card, or online and telephone transfers.

Visit a local Wells Fargo store and talk to a banker today, or call (800) 225-5935 for more information. wellsfargo.com/biz

*Apply for a Wells Fargo BusinessLine or Wells Fargo Small Business Advantage line of credit by April 15, 2011, and upon approval, receive a 4.99% rate through September 30, 2011.

All credit decisions subject to credit approval. Š 2011 Wells Fargo Bank, N.A. All rights reserved. Member FDIC. (589008)