Council committee struggles with federal Cook Inlet salmon plan

Two-and-a-half years after a federal court directed the North Pacific Fishery Management Council to develop a fishery management plan for the Cook Inlet salmon fishery, there is still a lot of work to do. The commercial salmon fisheries of Alaska are primarily managed by the state, including in Cook Inlet, where part of the fishery takes place in federal waters. The North Pacific Fishery Management Council for years deferred management of the salmon fishery there to the Alaska Department of Fish and Game, finally removing Cook Inlet completely from its FMP in 2012. The United Cook Inlet Drift Association and the Cook Inlet Fishermen’s Fund sued, saying the federal government had a responsibility to manage that fishery to ensure it complies with the Magnuson-Stevens Act. In 2016, the 9th Circuit Court of Appeals agreed, and the council reluctantly turned back to developing a management plan. Many of the commercial fishermen there have a longstanding dissatisfaction with the Alaska Fish and Game and the Board of Fisheries, stemming from a belief that the department’s allocation decisions governed by the board are politically rather than scientifically motivated and that the escapement goals for sockeye salmon on the Kenai River are too high. They sought to exercise federal influence over state management through the lawsuit, and now are running into roadblocks on federal authority to do so. The Cook Inlet Salmon Committee, which the council convened to gather stakeholder feedback on developing the FMP, has been hung up on philosophical differences at meetings. Council staff Jim Armstrong, who serves as the plan coordinator for the Cook Inlet salmon FMP, told the council during its meeting on April 7 that there are still some major points of disagreement between the stakeholder council members, the council’s Scientific and Statistical Committee and the council staff. “There’s a lot of frustration and they have perspectives on the way that these salmon fisheries should be managed and how escapement goals are set and the biological impacts of spawning stock reaching the carrying capacity, and they feel it has,” he said. “That’s the theme that has woven through my report and experience of these meetings. We’re not just going in there with an agenda and checking boxes. They’ve come in with a certain plan and we’re trying to reconcile that with what’s possible under the federal system and the council process. It’s taking some time.” One of the core tenets of the fishermen’s grievances is the belief that ADFG’s sockeye salmon escapement goals on the Kenai are too large, exceeding the carrying capacity of the system and thus reducing the overall return of fish as well as commercial harvests and therefore not delivering the required maximum sustainable yield. The committee requested a scientific analysis of how different stock-recruitment models fit the Kenai River and at what level the river could be considered overcompensated — essentially, how many sockeye salmon it would take for the stock to begin crashing rather than producing more fish. Dr. Curry Cunningham of the Fisheries, Aquatic Science and Technology Laboratory at Alaska Pacific University developed the analysis. The Kenai River is the largest sockeye salmon-producing system in Cook Inlet, replete with large lakes and gravel bottoms for sockeye spawning and rearing. Cunningham’s results concluded that an escapement of between 1.03 and 1.78 million sockeye would achieve a maximum sustainable yield of 2.97 million to 3.55 million sockeye on the Kenai River. After looking at multiple models, he found that the model that best fit the data from the river — called a Beverton-Holt relationship — offered limited support for overcompensation in the river. “Given that a Beverton-Holt function does not provide for overcompensation, this indicates limited evidence for the overcompensation hypothesis with respect to the Kenai River late-run sockeye salmon stock,” he wrote. This is not necessarily the same case for the Kasilof River, a separate but nearby stock. Upper Cook Inlet fishermen harvest both stocks of sockeye, and while the Kasilof River produces fewer sockeye, it is important to the commercial fishery and sustains a sportfishery of its own. Fitting a model to the data on the Kasilof, Cunningham wrote that the model does not confirm that the Kasilof is overcompensating, but that it can’t be rejected. His results suggested a maximum sustained yield of 629,000 sockeye for an escapement of 235,000 on the Kasilof. Cunningham’s findings about the Kenai River generally agree with ADFG’s calculations about escapement on the river. In a memo released March 26 detailing proposed escapement goal changes for Upper Cook Inlet, department staff indicated that results based on the traditional Ricker model indicate that the current escapement goal is too low and recommended raising the goal by 50,000 sockeye on the lower end and by 1 million on the upper end. Fish and Game noted that the data the department has doesn’t conclude anything about overcompensation but noted that escapements after 1979 are more consistent than those between 1968 and 1978, and so excluded the earlier years in model estimations. Using data from years 1979 to 2012, a goal that would produce 90 percent of maximum sustainable yield would be between 774,000 and 1.7 million sockeye, according to the escapement goal memo. The committee members have repeatedly said they wanted the federal government to influence the state’s escapement goal development, Armstrong said. “This was framed as a fundamental question, as in if this can’t happen, what’s the point of this whole exercise?” he said. “That’s not a committee statement, that’s just a flavor (of the discussion).” The state has jurisdiction over inland waters and out to three nautical miles from shore. The court decision doesn’t give the federal fisheries managers rights to manage inside the state waters, nor does it allow them to overrule state management of fish in those waters. That is another fundamental disagreement between the stakeholders and the council, Armstrong said; some members of the committee believe the federal government should extend its management into the freshwater salmon habitat. Some council members expressed frustration at the delay in the work so far. Council member Bill Tweit of Washington noted in his comments that the council has specific rules under federal law. “I think the more time the committee spends debating those kinds of issues, the longer this process is going to take and the longer it’s going to take to actually develop an FMP,” he said. “If the committee members want a salmon FMP, they’d be well advised to play within the boundaries of the ballfield that is the Magnuson-Stevens Act. None of us get to play outside those boundaries.” Committee member Hannah Heimbuch, who commercially fishes in Cook Inlet, told the council that there is still significant confusion among stakeholders about the council process, as the state management process is more familiar to them. “Some are fairly hopeless and think federal management is the only way to manage the fishery,” Heimbuch said. “Some are understandably frustrated that we even went down this road. And some are very confused … That all with a 40-year low harvest (of salmon in 2018). I think understandably there is a lot of emotion and tension. For me that meant selling my boat last week and leasing this year. “To the extent that the council would be able to do any community outreach that communicates that beyond the scope of the committee, I think that would be helpful.” Elizabeth Earl can be reached at [email protected]

Battle brews over return of Johnstone to Board of Fisheries

Unsurprisingly, there is likely to be a tense vote in the Legislature over at least one of Gov. Michael J. Dunleavy’s appointments to the Board of Fisheries. A pair of resignations from the board added with the end of member terms give Dunleavy a chance to select a majority of the board’s seven seats with four up for confirmation. One — Marit Carlson-Van Dort of Juneau — drew some raised eyebrows because of past work with the Pebble Limited Partnership, and another — Karl Johnstone of Anchorage — sparked a fiery opposition from commercial fishermen and vocal support from sportfishermen. The other two, Israel Payton of Wasilla and Gerad Godfrey of Kodiak, drew little to no controversy. The members of the Board of Fisheries serve three-year terms and determine fishing allocation and opportunity in the state. The appointments are always controversial, with the governor selecting candidates and the Legislature interviewing them intensively before either confirming or rejecting them. While there are no dedicated seats on the board for either region or user group, stakeholders keep track of where members’ experience and interests lie and calculate the balance of the perspectives. This time, the commercial sector loudly objected to the governor’s appointments, saying the balance would heavily tip toward sportfishery interests. Bob Penney of Kenai, who has spent decades fighting for sport priority over commercial in Cook Inlet, was a major financial supporter of Dunleavy during the 2018 election. Johnstone, a retired Superior Court judge and a friend of Penney’s since the 1970s, was the main flashpoint of the group of appointments. Following seven years of serving on the board, he resigned in 2015 after then-Gov. Bill Walker told him he would not be reappointed after former House Speaker Mike Chenault, R-Nikiski, objected to how Johnstone handled the board’s interview process for candidates for commissioner of the Alaska Department of Fish and Game. Johnstone told the Senate Resources Committee in a hearing on April 10 that he was interested in taking up Board of Fisheries service again because he’s been keeping up with fisheries issues and he finds the work rewarding. “There’s an enormous amount of work involved if you do it right, and an enormous amount of time spent … I choose to consider the rewarding part of it, and that’s why I reapplied,” he told the committee. “I have the time and the energy and the desire to continue this work.” Johnstone comes with a heavy wake of controversy. During past service, records from the Alaska Department of Fish and Game showed that the department spent more money on lodging for Johnstone than any other member during board meetings in Anchorage, despite that Johnstone has a home in Anchorage. He maintains a home in Prescott, Ariz., and frequently travels out of state, though he told the Senate Resources Committee that he spends “much more time in Anchorage than I do elsewhere.” In 2000, he was publicly reprimanded by the Alaska Commission on Judicial Conduct for violating the legal parameters of hiring a coroner and was once recommended for nonretention by the Alaska Judicial Council in 1988 for being unqualified, ranking low in integrity, judicial temperament and overall performance. Within the fisheries world, he’s a polarizing character. Sportfishing advocates testified to the committee that he maintained a professional demeanor and always came prepared to meetings, running them fairly for the four years when he served as the chairman. On the other end of the spectrum, commercial fishermen ardently oppose his nomination because they say he is irreversibly biased in favor of the sportfishing industry and say that he created a hostile atmosphere at board meetings. A joint House Fisheries and Resources committee meeting April 15 attracted more than 100 commenters and ran for nearly four hours, with testifiers on both sides. The Senate Resources Committee meeting on April 10 similarly attracted a large number of testifiers on both sides, though the majority opposed Johnstone. The United Fishermen of Alaska, an organization representing 37 commercial fishing groups in the state, doesn’t usually endorse or oppose Board of Fisheries candidates because of the potential for repercussions if the person they opposed is confirmed anyway. In written comments to the committee, UFA noted it hadn’t opposed a board member nominee since 2006. Executive Director Frances Leach told the Senate Resources Committee that Johnstone’s record shows that he is aware of fisheries regulation processes through the board but has disregarded them. “We understand the risk that we are taking in opposing someone such as Mr. Johnstone because we understand there are repercussions that could cause us harm,” she said. “His blatant bias against commercial fishermen was illustrated heavily throughout meetings.” Commercial set gillnet fishermen on Cook Inlet’s east side have a particular axe to grind with him. As chairman, he oversaw an Upper Cook Inlet meeting in 2014 in which a board-generated proposal was introduced to set significant restrictions on setnetters paired to restrictions on the Kenai River king salmon sportfishery, which commercial fishermen saw as a violation of the public process because the proposal was introduced, deliberated and passed without public input during committees or public comment. A number of Kenai Peninsula setnetters testified against his reappointment to the board, with a number saying he used his position to belittle Alaska Department of Fish and Game scientists and members of the public. “My experienced with Judge Johnstone has been anything but fair and balanced,” said Ken Coleman, a Kenai-area setnetter. Though he’s been absent from the Board of Fisheries since 2015, Johnstone occasionally wrote in opinion pieces to Alaska newspapers focusing on fisheries. Some highlighted a belief that personal-use and sportfisheries needed to take precedence over commercial fisheries and referring to commercial fishing in the state as “the aged and fading sibling.” Sportfishing supporters wrote in and testified in support of all the candidates Dunleavy appointment, but particularly for Johnstone. The Kenai River Sportfishing Association hosted a letter-generating form on its website, producing a large volume of form letters from individuals, and other organizations noted that the Legislature awarded Johnstone a citation for his service on the Board of Fisheries in 2015. “We much appreciate that Chairman Johnstone prioritized managing for the sustainability of our fisheries resource first and foremost as well as his efforts to provide reasonable harvest opportunities for all user groups, particularly Alaska residents, most of whom do not own commercial fishing permits,” wrote Martin Meigs, the chairman of the Alaska Sport Fishing Association, in his public comment to the House Fisheries Committee. “People as experienced if (sic) fisheries and as dedicated and competent as Karl Johnstone are few and far between!” During the hearings, a number of legislators showed skepticism about Johnstone, in part because of concerns about how much time he spends in Alaska. Sen. Scott Kawasaki, D-Fairbanks, asked if Johnstone would release his 2019 Permanent Fund Dividend application — which details how many days a person spends out of state as a qualifier to receive the dividend — as a way of quelling public debate about whether he primarily lives in Alaska or Arizona. Johnstone, who said he was calling into the hearing from Arizona, said he did not have an objection but wondered “why you want it.” Applicants for the PFD who are gone from the state for more than 90 days must document their absences and must reside in the state for at least 185 days per year. According to Permanent Fund Dividend Division records, Johnstone did not apply for the PFD from 2002 to 2009, did apply for it while on the board from 2010 to 2015 and did not apply for it in 2016 and 2017 before applying for it once again in 2018. “By all standards, I’m a resident,” he said. “I do spend time outside Alaska. My interest in the winter at my age has waned a little bit, although I still enjoy it once in a while. I do travel quite a bit. I also travel to other states and countries in the winter … From every point of view I can think of, I’m a resident.” Rep. Louise Stutes, R-Kodiak, who chairs the House Fisheries Committee, passed the gavel at the end of the April 15 meeting to explain why she would vote against Johnstone in the joint House and Senate confirmation hearing. Saying she was “morally and ethically compelled” to oppose him, she added that she understood the governor would not appoint a commercial fishing representative to the seat but wanted to at least see an appointment from outside the Anchorage area. “I firmly believe that Mr. Johnstone’s reputation and history of biases show that he is not the right person for this board,” she said. A few commenters said they opposed Carlson-Van Dort because of her work with Pebble, though others supported her because of her background in environmental science and familiar with fisheries. Payton, who currently serves on the board, attracted a number of supportive comments from both sport and commercial interests. The committees forwarded the names to a joint hearing for consideration. ^ Elizabeth Earl can be reached at [email protected]

Movers and Shakers for April 21

The National Association of Secondary School Principals has named Meghan Redmond, assistant principal of Chief Ivan Blunka School in New Stuyahok, as the 2019 National Assistant Principal of the Year. Redmond is in her fourth year as assistant principal at Chief Ivan Blunka School in New Stuyahok, a K–12 school consisting of 134 students who can only access the school by boat or plane. Because the remote nature of the school limits opportunities for exposure to various careers and other robust experiences, Redmond leads the school’s quarterly exploration weeks that allow students to focus on one or two courses that help them explore careers and interests — with some exploration weeks leading to industry-based certifications. Redmond also started the Small Schools Matter group to draw attention to the needs of remote schools and recently brought students to the state capital of Juneau to advocate for funding. Driven to provide a culturally relevant education for the nearly 100 percent Yup’ik Eskimo Alaska Native population, Redmond incorporates the native language into the school. The school’s administrative team focuses on valuing teacher talent in order to retain it, evidenced by a 100 percent staff retention rate for the current school year. Redmond holds a bachelor’s degree in middle childhood and early adolescence education from the University of Wisconsin-Eau Claire and a master’s degree in educational leadership from the University of Alaska Anchorage. She also serves on the executive board for the Alaska Association of Secondary School Principals. Northrim Bank announced the promotion of a variety of employees throughout the Bank: Mark Edwards, EVP-chief credit officer and bank economist; Kari Skinner, SVP-marketing and communications director; Marc Guevarra, VP-commercial loan officer; Tammy Kosa, VP-regional market manager; Gerlie Monta-Guevarra, VP-branch manager; Aili Peyton-Jalbert, VP-commercial cash management officer; Josie Thayer, VP-commercial cash management officer; Bill Simpson, VP-collections supervisor; Katie Bender, AVP-community and public relations manager. Edwards has been with Northrim Bank since 2007. Prior to that, he was the director of the Office of Economic Development for the State of Alaska and economist for the Department of Revenue. Edwards has an MBA from Alaska Pacific University and a master’s degree from Thunderbird Graduate School of International Management. He received Northrim Bank’s President’s award in 2010. Skinner joined Northrim in 2017 with more than 15 years of sales and marketing experience, most recently with Simon Property Group as a director of Marketing and Business Development. She holds an MBA from the University of Utah. Guevarra has worked in banking since 2001. He joined Alaska Pacific Bank in 2007 and has been with Northrim since the merger in 2014. He holds a bachelor’s degree in accounting from the University of Alaska Anchorage. Kosa has been with Northrim for 15 years. She is a graduate of the University of Alaska Fairbanks and has been awarded the Northrim Way Award, Customer First Service Award, and President’s Award. Monta-Guevarra started her career in banking in 2000. She has started at Alaska Pacific Bank in 2005 and has been with Northrim since the merger in 2014. Peyton-Jalbert joined Northrim Bank in 2018 with eight years of banking experience. She holds a master’s degree in communication from the University of Hawaii. Thayer has been with Northrim for more than 13 years and has 20 years of cash management experience. She holds a bachelor’s degree in international business from the University of Alaska. Simpson joined Northrim in 2007 as part of the bank’s acquisition of Alaska First Bank & Trust. He has more than 30 years of experience in banking. Simpson holds a bachelor’s degree with an emphasis in finance from Boise State University. Bender has been with Northrim since 2013 and has more than 15 years of experience in communications and public relations. She holds a master’s degree in public administration from the University of Alaska Anchorage. Ahtna Inc. announced several new hires and achievements within its subsidiaries. Vivian Tokar, program manager with Ahtna Environmental Inc., has earned the designation of Project Management Professional. This certification, through the Project Management Institute, requires 4,500 hours of leading and directing projects, a four-year degree, 35 hours of project management education, as well as passing a rigorous exam. Tokar has a bachelor’s degree in chemical engineering and has managed environmental remediation projects across Alaska since joining Ahtna in 2015. Ahtna Engineering Services LLC promoted Valeriya Brand, MBA, CPCM, to the position of business manager. Brand has more than 12 years of experience providing financial and contract management including financial tracking and budget management. Brand earned a Certified Professional Contracts Management credential from the National Contract Management Association in 2016 and has an MBA; and bachelor’s degrees in accounting and management. Prior to her promotion, Brand served as the firm’s contracts manager. AEI has recently hired Acery “Ace” Garcia, as one of its safety and QA/QC managers. Garcia has more than 25 years of experience working with the government, 15 years overseas. His focus primarily involves Military Munitions Response Program and environmental projects with the U.S. Army Corps of Engineers. Garcia holds an associate’s degree in occupational safety and health technology and is currently pursuing his bachelor’s degree. AEI’s Anchorage office hired Toni Endsley as project controls manager. Endsley has more than 15 years of experience in federal contracting performing project/program, operations, and contract management; financial analysis and budgeting; safety and hazardous material handling and transportation compliance; and marketing/business development. She holds numerous certifications including USACE CQM, HAZWOPER, and multiple various OSHA certifications. Endsley has an associate’s degree with coursework tailored towards business and finance. AES also welcomed Autumn Gould as a geologist working from the firm’s Anchorage office. Gould has more than four years of experience as a geologist in the oil and gas industry in addition to environmental remediation. She has worked on environmental projects throughout Alaska including strategic project implementation plans, preliminary assessments, site inspections, remedial investigations, feasibility studies, site characterizations, and remedial action projects. Gould has a bachelor’s degree in geology. Alaska Gov. Michael J. Dunleavy accepted the resignation of Public Defender Quinlan Steiner effective immediately and named Beth Goldstein of Anchorage as Acting Public Defender. Goldstein has more than 25 years of business management and legal experience. Goldstein’s public service consists of eight years as an assistant federal public defender in the Office of the Federal Public Defender in Ohio, and most recently 13 years in the Alaska Office of Public Advocacy as an assistant public advocate, deputy director, and supervisor. She received her bachelor’s degree in genetic engineering, biology, chemistry, and political science at Cedar Crest College and her juris doctorate from University of New Hampshire School of Law. With experience in both the private and public sector, her background includes regulations, administrative law, contract negotiations, fraud investigations, and legal management. Saltchuk has named David Karp as senior vice president, managing director for Alaska. Over the years Saltchuk’s family of independently operated companies in Alaska has grown to include Northern Air Cargo, Northern Air Maintenance Services, Cook Inlet Tug & Barge, TOTE Maritime Alaska, Delta Western Petroleum, Inlet Energy, Northern Oilfield Services and Carlile. Karp has been in his new role since Jan. 1. Karp previously served, for the past 11 years, as the president and CEO of Northern Aviation Services, Saltchuk’s Air Cargo line of business, which in Alaska includes Northern Air Cargo and Northern Air Maintenance Services. University of Alaska Anchorage’s Department of Journalism and Public Communication has announced that Larry Persily will serve as the new Atwood Chair of Journalism. Persily brings almost 50 years of journalism and public policy experience to his new position as the Atwood Chair of Journalism at the University of Alaska Anchorage for the 2019-20 school year. His journalism career began in 1969 as a college newspaper reporter and continued for the next 30 years. Although he took leave from the profession periodically during the past two decades to work on public policy in federal, state and municipal government, he has returned of late to journalism to help out at the Chilkat Valley News in Haines, the Nome Nugget, Peninsula Clarion in Kenai, and writing for the Alaska Journal of Commerce on topics of critical concern to Alaskans. He also will take over as owner/publisher of The Skagway News on April 1 as he looks to help Alaska’s smaller newspapers. Deadline for Movers & Shakers is each Monday at noon. Announcements are published in the order received on a space-available basis. For information, contact Andrew Jensen at (907) 257-4271 or by e-mail at [email protected]

GUEST COMMENTARY: Choices on Medicaid will have consequences

My good friend and former state Sen. Gretchen Guess often reminds me that life is about choices. In public policy, our choices can enhance or destroy people’s lives, so we have a moral obligation to understand their consequences. Good choices involve a decision-making process. What problem am I trying to solve? What are my options? What information or data do I have to evaluate these options? What stakeholders might have information I missed? In his rush to craft a state budget, Gov. Michael J. Dunleavy and his team missed most of these decision-making steps, jeopardizing our economy and health. Case in point is the governor’s Medicaid cuts, which the governor’s administration says will not reduce Medicaid eligibility or services and thus won’t impact the lives of Alaskans. In fact, many of these decisions were made with virtually no analysis or consultation with stakeholders and could have a dramatic impact on the health care system, people who rely on it and small Alaska communities. As the governor makes these choices, Alaskans should understand the consequences. One of the most damaging budget proposals is to reduce Medicaid rates for nursing homes. These facilities, which house the medically vulnerable, are 75 percent to 100 percent Medicaid-funded. Medicaid pays what it costs to provide services, so cutting rates means that some nursing homes will be paid less than cost. You can see that this won’t work for long in a vulnerable facility that relies 100 percent on Medicaid. The consequences of the governor’s decision for some nursing homes will be reducing the quality of care for elders or closing and sending medically fragile Alaskans out of state. The governor’s administration continues to falsely claim that the budget won’t hurt small hospitals. In fact, most small hospitals are co-located with a nursing home, sharing costs and staff. The nursing home revenue is often greater than the hospital revenue and helps keep the facility afloat. Cutting nursing home rates is more damaging to small hospitals than cutting hospital rates. The consequences of the governor’s choice? Dramatically reducing access to health care in some small communities or closing small independent hospitals. In addition to making cuts that directly affect people’s lives, the governor proposes to drastically alter how larger hospitals and all nursing homes are paid, with no analysis of the impact of these changes. Consultants know a lengthy process and significant analysis is required to make informed changes of this magnitude without adverse impacts, but the governor wants to make them by Jan. 1. It is impossible to quantify the impacts without analysis, but the governor is pushing cuts without that information. Some of Alaska’s larger hospitals are not financially strong. How will this affect hospitals in Fairbanks and Juneau? How will it impact small nursing homes? We simply don’t know, but we can’t assume they will be fine. The governor’s team also claims that budget cuts will not affect children, when in fact there is no data upon which to make this assertion. It is true that eligibility for Denali KidCare, the Medicaid program for children, is not impacted. However, access to health care has two parts, having a way to pay for it (insurance coverage) and having providers willing to see you. The Department is cutting physician reimbursement rates an additional 5 percent, on top of recent rate cuts. While pediatricians are exempt from this rate cut, other pediatric providers are not. How will this cut affect the small number of pediatric specialists serving kids in our state? How will it affect physical therapists, speech therapists, psychologists and other providers of health care for children? We simply don’t know, because no analysis has been completed. Life is about choices, and as the governor makes choices, Alaskans deserve to understand their impacts. We can have reasonable conversations based on full information, even if we disagree, but masking or ignoring the impacts of choices does Alaskans a disservice. Alaska’s hospitals and nursing homes want to collaborate with the administration to improve health care and reduce cost growth, but that must be done in an environment of full transparency about actions and their consequences. Becky Hultberg is the president and CEO of the Alaska State Hospital and Nursing Home Association.

Senators push for personal-use priority after board turned it down

Four senators have introduced a bill to set an allocation priority for personal-use fisheries in the state during emergency restrictions or closures. Senate Bill 99, introduced by Sens. Shelly Hughes, R-Palmer, David Wilson, R-Wasilla, Scott Kawasaki, D-Fairbanks, and Bill Wielechowski, D-Anchorage, amends the statutes governing the Alaska Department of Fish and Game to require the Board of Fisheries to “place restrictions on all other fisheries before restricting personal use fisheries” when the department has enacted restrictions to meet a management goal. There are personal-use fisheries all over the state, ranging from spearfishing for whitefish in the Chatanika River to tanner crab fishing in Homer. The main sources of conflict, though, are the popular personal-use dipnet fisheries in Southcentral Alaska for salmon. Alaskans fished more than 20,000 angler days in the Kenai River dipnet fishery alone in 2018. Only Alaska residents qualify for the fisheries. SB 99, introduced March 25, is similar to a proposal struck down by the Board of Fisheries less than two weeks before. The group of senators had been working on the bill for some time before the board took up the proposal at its statewide meeting, but waited to introduce it until after the board members decided, Kawasaki said. Kawasaki said he’s been working on the issue of setting a priority for personal-use fisheries for several years, beginning when he served in the House of Representatives. “I was personally waiting for some kind of action by the board,” he said. “We waited for the board to turn down the proposal (before introducing it).” Despite living far inland, many Fairbanks residents drive the 6 to 7 hours south to fish at the Chitina personal-use fishery for sockeye on the Copper River. It’s a tradition for Kawasaki’s family, too, he said. But the unpredictability of fish availability and possible closures, makes it difficult for families to plan for that trip. If passed, the bill would not mandate fishery regulation, but would require that ADFG close personal-use fisheries last during times of conservative management. The board turned down the proposal 2-5, with the opposing members saying they felt it was unnecessary and would tie managers’ hands. Large numbers of commercial fishermen, particularly in Cook Inlet, testified to the board that pushing up the personal-use fishery would promote conflict among user groups rather than defusing allocation fights. This isn’t the first time the Legislature has debated the topic, either. Former Sen. Bill Stoltze and Rep. Mark Neuman, R-Wasilla, introduced a bill in 2015 that would have required the department to restrict sportfisheries and commercial fisheries before personal-use fisheries. The opposition then was similar, with concerns from the commercial fishermen and processors about the impacts to their industry as the demand for personal-use fisheries grows. There is no set allocation for personal-use fisheries, nor any permit cap. The group of co-sponsors on the current iteration of the bill all represent areas with a stake in increasing personal-use fishing opportunities. Wielechowski represents part of Anchorage, where many residents drive south to either the Kenai Peninsula fisheries or Chitina to participate. Hughes and Wilson both represent the Mat-Su Valley, where many of the residents drive to the Kenai River to participate. There is a personal-use fishery at Fish Creek, but the fishery is muddy and is not open every year, and dipnetters stand a greater chance at catching their limit on the more productive Kenai River, so many choose to go south. Wilson said he had been participating in the discussions with the other senators for some time before the board proposal came up. It’s important to his constituents, the majority of whom are “regular Alaskans,” he said. “We’re talking in times of emergencies and closures,” he said. “The greater impact is done by the commercial fishery. All we’re asking for is we want a priority for (personal use) fishermen. Please take a look at the smallest group possible that’s not making a real dent on the fishery.” The sponsors include two members of the Republican-led Senate Majority and two members of the Democrat-led minority. Kawasaki said the bipartisanship showed that fishing does not necessarily adhere to the same political lines as other issues. While the board is not subject to the same political structure as the elected members of the Legislature, it’s still a politically appointed and confirmed body and notoriously rife with politics. “It’s clear the Legislature is a political body, but the Board of Fisheries is a political body as well. The appointments to the board are some of the most controversial appointments we have,” he said. “It doesn’t matter whether you’re a Democrat or a Republican if you like fishing and your constituents like fishing.” Wilson and Kawasaki both said they hoped the bill could move through the Legislature despite the budget taking up the majority of the Legislature’s time. Wilson said he thought it would likely be next year before it could earn approval, though Kawasaki said he hoped it could get a hearing this year. So far, it has been referred to the Senate Resources committee but has not been scheduled for a hearing. Elizabeth Earl can be reached at [email protected]

BP names Teachers of the Year

BP announced the winners of the 2019 Alaska Teachers of Excellence on April 8, an award that for more than two decades has recognized the state’s top educators. This year, the group is comprised of 21 teachers that were selected from schools across Alaska. “These teachers represent the best of Alaska education, and it’s an honor to recognize them with this award,” said BP Alaska President Janet Weiss. “At BP, we’re proud to play a part in supporting their continued success and showing our ongoing commitment to the state and to creating the leaders of tomorrow.” For 24 years, the BP Teachers of Excellence program has honored K-12 teachers from public and private school districts statewide. This year, BP received hundreds of nominations for the Teachers of Excellence award and for the newly added BP Educational Allies award. The BP Educational Allies award recognizes unsung heroes in Alaska’s schools such as counselors, teacher assistants and custodians. Since the program’s inception in 1995, BP has recognized more than 750 Alaska teachers. Winning teachers receive a $500 gift card and a $500 matching grant to their school. Teachers also receive a trip to Prudhoe Bay to learn about BP’s operations and paid admission for the Alaska Resource Education’s teacher course. All teachers and educational allies will be honored at an award ceremony in late April, where the statewide BP Teacher of the Year will be announced. The 2019 BP Teachers of Excellence winners are: Anchorage School District Natasha Bergt, Huffman Elementary School Antara Brewer, AJ Dimond High School Kelly Corrigan, Robert Service High School Karen Gordon, Northwood ABC Elementary School Trena Rose, Bayshore Elementary School Fairbanks School District Jeannette Fortune, Ladd Elementary School Tanya Mendelowitz, North Pole Elementary School Rebecca Missler, North Pole High School Carolyn Soderlund, Austin E. Lathrop High School Rebecca Zaverl, Denali Elementary School Kenai Peninsula Julie Doepken, William H. Seward Elementary School Jennifer Hornung, Nikiski Middle/High School Wendy Todd, Paul Banks Elementary School Mat-Su Valley Kimberly Flinn, Goose Bay Elementary School Sara Lamont, Ron Larson Elementary School Stacy Molina, Academy Charter School Sarah Shepard, Colony High School Other Alaska School Districts Danielle Huerta, St. Mary’s School, Kodiak Candace Mudge, Denali Borough School District, Healy Jody Smothers-Marcello, Sitka High School, Sitka Gretchen Striker, Tri-Valley School, Healy

Movers and Shakers for April 14

Sen. Lisa Murkowski announced the addition of Amber Ebarb to her Washington, D.C., office as the new legislative assistant for Alaska Native, Rural, and Indian Affairs. In addition, Murkowski announced the establishment of her new healthcare team: new staff member Angela Ramponi and current staff member Annie Dietderich. Ramponi and Dietderich will cover the healthcare portfolio as legislative aides. Kennita Williams is joining Murkowski’s Fairbanks office as a regional staff assistant, and will work with Trina Bailey, who continues to serve as the Fairbanks regional special assistant. Ebarb was born and raised in Anchorage and is Tlingit (L’eeneidí clan). She has worked for the National Congress of American Indians for more than 15 years, most recently serving as the NCAI Budget and Policy Analyst. Ebarb received her bachelor’s degree in psychology from Whitman College and her master’s degree in public policy from George Washington University. Ramponi is from Soldotna and previously acted as the legislative liaison and policy analyst for the Alaska Department of Commerce, Community and Economic Development in Juneau. She graduated magna cum laude from Brown University with a bachelor’s degree public health and biology. Dietderich was born in Anchorage, and previously served as a staff assistant in Murkowski’s office, most recently serving as a legislative correspondent. Dietderich graduated from St. Lawrence University with a bachelor’s degree in government and rhetoric communication. Williams, currently living in North Pole, came to Alaska with her family in 2014 when her husband was stationed at Eielson Air Force Base. She was the discharge specialist and victim liaison for the Eielson Air Force Base legal office from 2014 until joining Murkowski’s office. Williams brings more than 20 years of experience in the administrative and human resources field and, in 2017, was awarded the Eielson Air Force Base Spouse of the Year and Base Civilian Volunteer of the Year award. Bering Straits Native Corp. announced the promotion of Karla Grumman to chief human resources officer/associate vice president. Grumman formerly served as senior director of human resources. Grumman joined BSNC in 2017 after serving in senior HR roles at other Alaska Native corporations and commercial companies. Grumman has 27 years of broad HR experience and will lead the overall HR strategy and administration of services for the company and its subsidiaries. Alaska Deputy Attorney General Robert Henderson has resigned to taking a job with the University of Alaska, effective May 15. Upon Henderson’s departure, John Skidmore will take over as Deputy Attorney General and Paul Miovas will take over as the Criminal Division Director. Skidmore has served as the Criminal Division Director since 2011 and has been with the department for more than 20 years. Miovas is currently the Chief Assistant Attorney General for the Office of Special Prosecutions and has been a prosecutor for more than 16 years including 11 with the Department of Law. Brena, Bell &Clarkson announced that former Gov. Bill Walker will join the firm. Walker will continue his previous work providing municipal and resource and economic development assistance to Alaskans. Walker, a lifelong Alaskan, earned a business degree from Lewis and Clark College in Portland Oregon and a juris doctorate degree from Seattle University School of Law. With Attorney General Designee Kevin Clarkson leaving the firm to go into public service and Walker joining the firm, the firm’s name will be changed to Brena, Bell &Walker. Alaska Communications announced William H. Bishop, senior vice president, customer and revenue management, is being promoted to senior vice president and chief operations officer as of April 9. In the newly created role reporting to President and CEO Anand Vadapalli, Bishop will assume responsibility for business operations including revenue across all market segments, customer service, network and IT. Bishop joined Alaska Communications in 2004 and has served in several leadership roles in consumer and business sales and operations, including director of retail operations, director of business and wholesale, vice president of business and wholesale, and senior vice president of customer and revenue management. He brings more than 25 years of telecom and business leadership experience to this role, including positions at AT&T, McCaw Communications, and a federal government logistic contracting company.

Movers and Shakers for April 7

Anna Henderson was appointed general manager for Anchorage Municipal Light and Power. Henderson will take over for current GM Mark Johnston, who has accepted a position in the Lower 48. Henderson has been with the municipality since 2006 and at ML&P in various roles for more than 10 years. She currently serves as the manager for the Regulatory Affairs Division, where she is responsible for overseeing a $60 million annual operating budget and a $10 million to $20 million annual capital budget. Henderson also has experience managing gas supply operations, leading negotiations in purchase and sales agreements, managing federal contracts and leading the development and approval of utility rates for ML&P. She holds a bachelor’s degree in business administration from the University of Alaska Anchorage. Johnston, who has served as the general manager for ML&P since 2015, will leave the utility on April 19. Opera Fairbanks, the nation’s farthest-north professional opera company, hired Carol Wilbur as president. Wilbur has served on the board of directors of the company for several years. Founded in December 2005, Opera Fairbanks has been producing live opera and providing educational experiences to Alaskans since 2007. Wilbur has degrees in education from Michigan State University and metalsmithing and painting from the University of Alaska Fairbanks, where she taught metalsmithing there from 2001-06. She currently maintains a private studio at Well Street Art Co. Her work has appeared in galleries across the state, and she holds several awards for her work in both painting and jewelry. The Alaska Chamber announced that its executive committee has hired Kati Capozzi as president and CEO. Capozzi most recently worked as the campaign manager for Stand for Alaska Vote No on 1, the group that worked to defeat Ballot Measure 1 in November 2018. The Vote No campaign defeated the ballot measure with 62 percent of the statewide vote. Prior to leading Stand for Alaska, Capozzi worked for five years as a communications and project manager for the Resource Development Council for Alaska. She has also worked for the Alaska Oil and Gas Association and the Alaska Chamber in previous capacities. Joseph Dallaire was appointed Fairbanks District Attorney, effective May 1. Dallaire is replacing current Fairbanks District Attorney Gregg Olson, who is retiring after more than 19 years of service with the Criminal Division of the Department of Law. Dallaire, a former law clerk to Fairbanks Superior Court Judge Randy Olsen, joined the Fairbanks District Attorney’s Office as an Assistant District Attorney in 2007. He has prosecuted all types of matters in the Fairbanks District Attorney’s Office, including complex felony matters. Since 2017, he has been the Fairbanks Deputy District Attorney, supervising the office and coordinating with law enforcement agencies and courts in Fairbanks and Utqiagvik (formerly Barrow). Dallaire is also an Alaska Police Standards Council-certified police instructor and has provided legal instruction to law enforcement throughout the state. Dallaire previously served as president of the Farthest North Chapter of the Alaska Peace Officers Association and was named its 2016 Criminal Justice Professional of the Year. He has also previously served the community as a member of the Fairbanks North Star Borough School District Board of Education’s Curriculum Advisory Committee.

Movers and Shakers for March 31

Scott Rowley has joined KeyBank as vice president and senior payments advisor with the Enterprise Commercial Payments Group. For the past 10 years, he has provided treasury management solutions for high-revenue clients and has extensive experience in consulting and servicing, along with implementing treasury management products and processes. Previously Rowley worked as a treasury management consultant for Wells Fargo. He holds an MBA in international business from Regis University in Denver.

Our children must read by 9

Right now, Alaska’s public-school children are ranked dead last in the nation in fourth-grade reading proficiency, a key indicator used to measure academic success. In terms of school years, they are up to a full year behind their counterparts in other states. This means many of our fourth graders cannot read Charlotte’s Web or The Lion, The Witch, and The Wardrobe. While it may seem like such a simple, basic issue, the ability to read is actually the foundation of a child’s educational success; the value of reading cannot be stressed enough. By not guaranteeing that grade-school students become proficient readers, we are failing our children. We must do everything in our power to ensure that every child is able to read well enough so that when they enter middle school and begin learning harder material, they can read to learn. Through the third grade, students learn to read. As they enter the fourth grade, they read to learn. If a child does not develop this skill, he or she will also fall behind in social studies and science. Word problems in math will be unsolvable, navigating the rich world of literature impossible, and communicating complex ideas in written and spoken word unthinkable. Students who cannot read well almost never catch up and their future is in peril. Statistics compiled by groups like ExcelinEd are sobering. Students who cannot read by the end of the third grade are four times more likely to drop out of high school. High school dropouts make up 75 percent of food stamp recipients and 90 percent of those on welfare. Nearly 85 percent of teenagers in the juvenile justice system cannot read to learn and seven out of 10 adult prisoners cannot read above a fourth-grade level. Evidence-based research shows that a strong reading initiative can make a big difference. The Alaska Policy Forum supports a “Read by 9” policy which provides a common sense and proven solution. It starts by making sure kindergartners know the ABCs and the sounds they make. Strategies, guided by science, focus on developing critical skills through the third grade so students can read with ease, understand the material, and are starting to think critically. We need to implement a system of instruction that places a heavier emphasis on making sure our children leave third grade with the ability to read. We want each child entering the fourth grade to do so with confidence and with the skills he or she needs to learn. As a final safeguard, students unable to read proficiently at their grade level may be retained and given an extra year of enhanced instruction so that before promotion to the next grade, they can learn to read well. Because learning to read is so important and catching up so difficult to do, students must be proficient readers before they move on to more difficult materials. Regardless of where they go to school, every child deserves the opportunity to reach his or her full potential and to fully embrace the American dream. Let’s work together: parents, teachers, administrators, and policymakers to ensure that Alaska implements the Read by 9 reading initiative so that all our children can read to learn and love to learn. Jodi Taylor is an Alaska Policy Forum board member, a life-long Alaskan that attended public school, an entrepreneur at heart, and mother of five children.

Gov: Budget reset needed to save economy

Gov. Michael J. Dunleavy’s underlying message about the State of Alaska budget deficit is much the same as his predecessor’s, but his plan to address it is vastly different. Dunleavy stressed throughout a nearly two-hour talk in Anchorage March 26 that without major, durable spending reductions to close the $1.6 billion deficit the Permanent Fund dividend will disappear within three years. He and members of his administration presented their budget plan alongside members of the conservative political group Americans for Prosperity, which sponsored and hosted the event at the 49th State Brewing Co. Former Gov. Bill Walker’s message, starting in late 2015 when he unveiled his long-term fiscal plan, was that the dividend formula needed to be adjusted along with spending cuts and various taxes to preserve the payouts in some form. The current governor campaigned largely on restoring the PFD to its statutory payment calculation, which if followed is expected to generate dividends in the $3,000 per person range this year. That money, he insists, is best spent individual Alaskans rather than using part or most of it to close the budget gap. He also emphasized that long-term reductions to state spending would not dramatically harm Alaska’s currently fragile economy, which many of the state’s economists have said is ready to come out of a nearly four-year recession late this year barring major unforeseen events. Numerous economists have said the nearly $3 billion of cuts that have been made since 2014, largely from reducing the capital budget to little more than enough to generate federal matching funds, have deepened and extended the recession that was triggered by the sustained fall of oil prices late that year. The majority of jobs lost in the past four years have been in the oil and gas and construction industries. Dunleavy noted that Alaska already has the highest unemployment rate in the country even with current state spending levels. “We feel, for the sake of the private economy, to get that back on its feet and growing, what we need to do is reduce the government side of the economy, so that’s why you have our budget before you,” he said, adding that his budget plan would cost Alaska 600 to 700 jobs. The Office of Management and Budget has calculated that Dunleavy’s budget proposal would eliminate 714 state positions. However, economists routinely stress that Alaska’s economy is largely supported by government spending whether it comes from state or federal sources, which is common for relatively young economies. The Anchorage Economic Development Corp. estimates that about 20 percent of the jobs in Alaska’s largest city are tied to government. Economists for the University of Alaska Anchorage Institute of Social and Economic Research project the administration’s budget would result in roughly 7,000 additional jobs lost across employment sectors; those losses would be on top of the 12,300 jobs Alaska has lost since 2015, according to the state Labor Department. Other economists have calculated that the plan to cut more than $700 million from the state’s Medicaid program would result in 8,000 job losses alone . The administration’s chief economist Ed King testified to the Legislature in early March that the budget plan would likely mean about 5,000 fewer jobs statewide, but he said the losses would reset the state’s economy to a sustainable level. Dunleavy echoed that sentiment March 26, saying that government money had inflated the size of the state’s economy. “We get this budget under control, we’ll get more investment and we’ll get more revenue,” he said. Walker often pointed to the fact that without a statewide tax, which Dunleavy rejects, economic growth is a drain on state services if it does not come in the form of oil revenue to state coffers. OMB Director Donna Arduin said the administration is focused on cutting spending this year and reforming the state departments and programs hardest hit by budget cuts — K-12 education, the University of Alaska, Medicaid and the state ferry system — in the future. She specifically said omnibus education reform legislation would be introduced in the coming weeks. The governor acknowledged that reaching his goals would be challenging, adding that his three proposed constitutional amendments are needed to make it effective long-term. The amendments are to adjust the current spending cap, which Attorney General Kevin Clarkson said would be $10 billion this year, enshrine the PFD as a transfer payment rather than an appropriation, and require public votes for tax increases. Adding those items to the state Constitution would give Alaskans a stronger voice in such major policy decisions, he said. “I have a lot more faith in the people of Alaska than some of the special interests that don’t want you near a constitutional amendment,” Dunleavy said at the event. Elwood Brehmer can be reached at [email protected]

Sturgeon prevails again at Supreme Court

An Alaska moose hunter whose case against the federal government made a rare second trip to the U.S. Supreme Court prevailed on March 26. The ruling marks a win for Alaskans unhappy with federal “overreach” on some public lands but doesn’t topple rural subsistence rights as some feared it might. John Sturgeon sued the National Park Service after rangers on the Yukon-Charley Rivers National Preserve in 2007 ordered him off the hovercraft he used for moose-hunting trips through the shallows of the Nation River near the Canadian border. The park service claimed the right to manage navigable waters inside parks and preserves. The state maintained that management of those waters was clearly left to the state, which allows hovercrafts. U.S. Supreme Court justices in this week’s decision ruled unanimously that the Nation River doesn’t qualify as “public land” for the purposes of the Alaska National Interest Lands Conservation Act. The sweeping 1980 law created 10 new national park units following natural boundaries rather than federally owned lands, adding more than 18 million acres of state, Native and private land. Nor does the park service have authority to regulate Sturgeon’s activities on the part of the river that falls within the preserve, according to a ruling authored by Justice Elena Kagan for the court. “That means Sturgeon can again rev up his hovercraft in search of moose,” Kagan wrote. Sturgeon, reached in Anchorage a few hours after the ruling, said he planned to do just that in September. “I’m really happy with the decision,” he said. Sturgeon cheered the restored access to once-secret hunting grounds on the Nation that he’d visited since 1971. But he also expressed gratitude that the Supreme Court ruling upheld the so-called Katie John decisions that underlie Alaska’s federal subsistence fishing rights. “Katie John was a casualty that I didn’t intend on,” Sturgeon said March 26. “I’m glad they said it doesn’t disturb Katie John.” He said he called Alaska Federation of Natives president and CEO Julie Kitka March 26 and they agreed it was a good outcome. Sturgeon said AFN and he, along with U.S. Sen. Lisa Murkowski, had worked unsuccessfully on a compromise solution that would have left Katie John intact but “this was just as good.” “Alaska is different by law,” he said. “Alaska is different, our parks and preserves and refuges are not managed like they do down south. I think that’s pretty important.” A park service spokesman said the agency is reviewing the Supreme Court decision to “determine what changes will be necessary to bring existing policy in line with today’s ruling.” Ruth Botstein, the assistant district attorney who successfully argued the case last year on the state’s behalf, was one of numerous at-will employees dismissed by Gov. Mike Dunleavy last fall when he came into office. The ruling is the second time the court had heard the case — and generally ruled in Sturgeon’s favor. Justices in 2016 ordered the 9th U.S. Circuit Court of Appeals to take another look at the case, particularly the provisions about ANILCA exceptions. The unanimous decision of all eight justices declared the 9th Circuit had taken a “topsy-turvy” approach to the law when it said a National Park Service rule banning hovercraft in the Lower 48 must be applied to Alaska. It ordered the lower court to reconsider the issue in light of ANILCA, which created an “Alaska exception” to many of the normal rules applied to national parks, wilderness areas, refuges and other preserves. Over time, the case grew more complicated since that first visit to the Supreme Court. The lawsuit grew into a potential test of the legal precedents, named for the late Ahtna elder and litigant Katie John, which for two decades have provided the legal underpinning of federal subsistence fishing rights in Alaska. Federal rules give priority to rural subsistence families in times of shortage. The Supreme Court decision this week does not undermine the Katie John precedents, said Heather Kendall-Miller, an Anchorage-based attorney with the Native American Rights Fund who drew up a brief in the case for the Alaska Federation of Natives. “The Katie John cases remain the law of the land,” Kendall-Miller said. Just one footnote about halfway through the 46-page ruling makes the ruling’s precision clear: the Katie John provisions are “not at issue in this case, and we therefore do not disturb the Ninth Circuit’s holdings that the Park Service may regulate subsistence fishing on navigable waters.” AFN released a statement March 26 congratulating Sturgeon on the ruling and saying the decision was also a victory for subsistence users. “This is good news for the Alaska Native community and for rural Alaskan subsistence users,” Kitka said in the statement. “Our Board previously approved two principles related to the case: private landowner’s access to — and use of — inholdings within conservation system units; and no net loss to subsistence rights. This ruling accomplishes both.” Alaska’s congressional delegation in 2015 submitted an amicus brief in support of Sturgeon. The delegation welcomed the Supreme Court decision as upholding “promises made to Alaskans in ANILCA” that the park service doesn’t have expansive rights over state and native lands. “During its inception, Senator Ted Stevens and I worked hard to make ANILCA fair to sportsmen, Native communities, and energy developers,” Rep. Don Young wrote in a statement. “Our legislation was intentionally written so that the Alaskan people wouldn’t need to ask the Federal government for permission to use the lands they had been stewards of for generations.” Young and Murkowski also praised the ruling for not disturbing the Katie John decision. Members of the state senate majority cheered the decision that the Nation River is state rather than federal land and navigable inside Alaska national parks. Sen. Bert Stedman, R-Sitka, also referenced the Taku and Stikine rivers in Southeast as “clearly navigable waters and the domain of the state, not the federal government.” The Supreme Court decision includes a concurring opinion from justices Sonia Sotomayor and Ruth Bader Ginsburg recognizing the ruling raises uncertainty about the park service’s authority over navigable waters in Alaska’s parks. “Many of Alaska’s navigable rivers course directly through the heart of protected parks, monuments, and preserves. A decision that leaves the Service with no authority, or only highly constrained authority, over those rivers would undercut Congress’ clear expectations in enacting ANILCA and could have exceedingly damaging consequences,” Sotormayor wrote in the opinion. Congress, through ANILCA, intended for the park service to protect and regulate Alaska rivers. If so, she continued, it’s up to Congress to “clarify the broad scope of the Service’s authority over Alaska’s navigable waters.” The National Parks Conservation Association, involved in the case as a “friend of the court” supporting the park service, called the ruling disappointing but said the concurring opinion “makes it clear that the park service still has the authority to protect park lands from resource damage.” “Yukon-Charley Rivers National Preserve was created in part to protect the rivers and lakes that run through this wilderness,” the group’s Alaska regional director Jim Adams said in a statement. “Eliminating the hovercraft rule in Alaska is a loss for the ‘wild’ that makes these places special to people.” Sturgeon said the ruling probably doesn’t mean hunters in hovercraft will descend on the Nation, which is so sprawling and shallow that it’s hard to travel without extra support. He put his own now-famous hovercraft into his two-car garage and rebuilt it from scratch with new engine he tested just last Saturday. “I started it up and broke the engine in,” he said. “I did it all myself and was very surprised when it actually ran.”

Banks reinvesting boost in profits from 2017 tax reform

Though the fate of Gov. Michael J. Dunleavy’s budget looms over Alaska’s economy, federal tax reform and some positive trends are boosting bank leaders’ morale. “The future looks a lot better than it has,” said Wells Fargo Pacific Northwest Business Banking Division Manager Joe Everhart. Alaska’s financial institutions are reaping the benefits of a federal tax change put in place by President Donald Trump’s administration in 2018. Trump signed the the tax reform bill passed by Congress at the tail end of 2017. Among changes both to individual and corporate tax structures, the law lowered the corporate tax rate to 21 percent to more closely match the global average of 25 percent. Nationally, the change brought about record bank profits. According to the Wall Street Journal, national banking profits spiked in 2018 after the new tax law took effect. According to the Federal Deposit Insurance Corp., banking profits jumped 44 percent from 2017 to 2018 for a record profit of $236.7 billion. For the first time since 2006, no American bank failed during 2018. Alaska’s banks proved no exception to the national trend. For the five Alaska-based banks, net income rose an average 43.8 percent between the fourth quarter of 2017 and the fourth quarter of 2018, or right on par with the national average. Cumulatively, the five Alaska-based banks saw their net income increase from $60.9 million to $87.6 million. Alaska-specific information income from the FDIC isn’t available for national banks Wells Fargo, which has just more than 50 percent of state deposits at nearly $6 billion, and KeyBank, which is fourth in Alaska deposit market share with $1.2 billion. Banks welcome the chance to spread the good news. Wells Fargo is sinking the extra money back into the company and into philanthropy. “We raised the minimum hourly base pay for team members in the U.S. to twice the federal minimum wage, and we increased philanthropic support for our communities by 55 percent in 2018 to $444 million,” said David Kennedy, Wells Fargo Alaska’s public information officer. Everhart takes the tax change as a boost in what has been a gloomy few years for an Alaska economy beset with cash flow problems related to the 2014 crash in oil prices. Everhart said the new tax law accompanies some notable oases on the state’s economic horizon. North Slope oil development has picked up, giving both the promise of revenue and jobs. The Trump administration approved ConocoPhillips’ $1 billion drill site, at Greater Mooses Tooth-2, which began construction this winter, and its sister site Greater Mooses Tooth-1 began producing oil ahead of schedule this past September. Tourism could produce a jump in cashflow for the state economy. Cruise Lines International Association predicted cruise ship tourism will increase by 16 percent in 2019 with about 1.3 million cash-laden visitors. Northrim Bank topped the list of the Alaska-only bank beneficiaries of the new tax law in net income growth. Net income climbed 49 percent from 2017 to 2018 for Northrim, which has $1.22 billion in deposits, from $14 million to $20.9 million. First National Bank Alaska, second in deposit market share with $2.4 billion in deposits, had net income jump 48.5 percent from $36.4 million to $54.1 million in the same period. Mt. McKinley Bank in Fairbanks saw net income grew from $3.8 million to $4.7 million. The new tax law isn’t the only element pushing numbers up, either. Alaska banks also increased their loan portfolios across the board by an average 5.5 percent. McKinley Bank increased net loans and leases 9.5 percent from fourth quarter 2017 to fourth quarter 2018 — a good signal for an area still anticipating a financial boost from an incoming wing of F-35 fighter jets to Eielson Air Force Base. Northrim Bank President and CEO Joe Schierhorn agreed with both with the cheerier-than-normal economic outlook and means to reinvest it. Schierhorn said he can’t remember a time since the late 1980s when a tax reform yielded this kind of fiscal boost, and like Wells Fargo Alaska, has spread the cash around. “There are three ways of thinking about how to use extra income,” Schierhorn said. “You can return it to shareholders, invest back in infrastructure, or invest in employees. We did all three.” Northrim gave wage and pension bumps and additional education opportunities to employees, aa record-breaking dividend increase to its shareholders, and opened a new branch in East Anchorage. Like Everhart, Schierhorn points to increased production on the North Slope and to the cruise line forecast as hopeful elements in the 2019 outlook. “The projected tourism increase will be big,” Schierhorn said. “When you think about the shore-based business that cater to that segment, it could be significant economic driver.” Even though 2019 is beginning with good omens, bank leaders are still looking critically at Alaska’s political situation. Despite the profits and promise, Dunleavy’s cut-laden budget makes banking leaders uneasy. “When Dunleavy’s budget came out, it created a sense of cost,” said Everhart. “It came with $1.6 billion of cuts. You think about that, and in reality every $100,000 of cuts is one job. That $1.6 billion is 1,600 jobs we could lose.” Everhart’s tone and message adds to a widespread concern over Dunleavy’s budget from state employees and public unions in healthcare and education, but he clarified Wells Fargo isn’t making any moves till the Legislature hashes out the budget. Clearly, however, he seems to believe in better solutions to the Permanent Fund dividend question than budgets slashes. “We have a cash flow problem, not an economic crisis,” Everhart said. “The state still has levers to pull without the deep cuts currently proposed. The legislative process has still not taken place. It’s hard to ring the alarm bells until the legislative process completes.”

Stakeholders seek ways to grow outdoor rec economy

A group of business owners and advocates are pushing for Alaska to place more of an economic stake in its outdoor recreation economy. Alaska boasts a massive number of tracts of undeveloped public land. Most Alaskans take advantage of all that land for various activities all year, and the summer brings tourists from all over the world, especially to fish. The founders of Confluence, an outdoor recreation advocacy group begun under the umbrella of the Valdez Adventure Alliance, think the state could advertise the outdoor economy better and enable more businesses to cater to it. A new study from the University of Alaska Anchorage’s Center for Economic Development establishes a numerical sketch for the industry’s impact as well. The study estimates that participants in outdoor recreation spend about $3.2 billion annually, excluding equipment purchases, and that the industry provides about 29,000 direct jobs and about 10,000 indirect and induced jobs. The report estimates that equipment purchases could be a similar sum. “A majority of Alaskans say that opportunities to get outside are a reason they choose to live or remain in the state, and a similar share of visitors come to Alaska to experience the great outdoors,” the report states. “Both locals and visitors spend money in the course of their activities that circulates throughout the state economy, making outdoor recreation a substantial industry.” During a House Resources Committee meeting on March 6, committee members heard testimony in support of legislation enhancing the outdoor recreation industry in the state. Lee Hart, one of the co-founders of Confluence, told the committee that Alaskans have long shown support for spending state resources on outdoor recreation, including taxing themselves for trail maintenance. “Since at least the year 2000, residents of this state have been clamoring for more access to the public lands and waterways that surround their communities,” she said. Nolan Klouda, the director of UAA Center for Economic Development, presented the study to the committee and noted that outdoor recreation is also an attraction for workers. An economic strategy for a geographically isolated state like Alaska may not necessarily be to attract firms, but to attract talented workers to live here because of the quality of life and thus lure the businesses to where the workers are, according to the study. Klouda said businesses often identify hiring talent as a major obstacle to operating. “Economic development increasingly is about attracting talent and keeping talent in your area,” he said. “Just the ability to hire any workers at any skill level that can fill the positions that you have, and Alaska businesses will tell you that that is a major challenge.” Exploring ways to attract and retain residents is one of four recommendations included in the report. The others include gathering better data about outdoor recreation consumers, adding an economic impact component to state recreation development and supporting entrepreneurship. The report points to efforts such as the Anchorage-based Launch Alaska and the Seward-based Alaska Ocean Cluster as examples of incubators for businesses in particular sectors. The study also references programs like the state of Vermont’s grant program for remote workers, which grants prospective residents up to $10,000 for living in the state while performing remote work, and to an effort in Valdez to start a telework center meant to attract tech workers from crowded, expensive areas like Seattle and Silicon Valley based on the local outdoor recreation opportunities available. In a handout presented to the committee, Confluence identified four priorities: raising awareness of emerging sectors, creating a blue ribbon commission to identify ways to reduce regulatory burden for outdoor industries, leveraging federal matches to fund outdoor recreation access, and management and preserving the Snowmobile Trails Grant Program. A number of stakeholders also wrote letters to the committee in support of the SnowTRAC program, in which snowmachiners pay an increased license and registration fee in exchange for maintained trails. Gov. Michael J. Dunleavy’s fiscal year 2020 budget proposes reorganization for the state recreational trails program, under which the snowmobile trail grant program is administered, by eliminating a position, according to the Office of Management and Budget. Michele Stevens, who represented the Petersville Community Nonprofit Corporation, said the snowmobile trails provide more than just recreational opportunity — they are important for search and rescue operations, as people are less likely to get lost. Matanuska-Susitna Borough Assembly member Dan Mayfield wrote a letter to Dunleavy that he was surprised that funding for the snowmobile trail program, known as SnowTRAC, was not included in the budget. “The money funds trail care, safety and grooming activities that, in turn, bring increased business through recreational visitation to each of the communities throughout the state who have qualified for these funds,” he wrote. “Failure to fund this program means the end of SnowTRAC, increased hazards on the trails, the failure of several non-profit organizations who work to support snowmobile activity and decreased business/revenue for communities up and down the trail system.” ^ Elizabeth Earl can be reached at [email protected]

Alaska LNG Project economic review underway

Alaska’s new gasline team expects to have the analyses that will determine the path of the estimated $43 billion Alaska LNG Project complete in the next two months. Gov. Michael J. Dunleavy’s senior policy advisor Brett Huber said March 14 that the Alaska Gasline Development Corp. should know in about 60 days whether or not the state should continue actively pursuing the large LNG export plan based on the project’s economics. Dunleavy and several members of his administration held a conference call with reporters while attending the CERAWeek oil and gas industry conference in Houston. The governor subsequently downplayed the prospects of Alaska LNG, saying there generally appeared to be little interest in the project from potential investors also attending the conference. He said talks about Alaska were instead primarily focused on the state’s conventional oil plays, which he highlighted in a speech at the conference. AGDC officials offered more detail on the Alaska LNG review in background discussions. The project review is being done from two angles. First, AGDC engineers are attempting to determine what advancements in LNG technology, such as modular construction, might have occurred over the last three years that could bring the $43 billion Alaska LNG cost estimate down. In 2016, the international energy consulting firm Wood Mackenzie concluded the Alaska LNG Project likely wasn’t economic if developed by Alaska’s major producers, as first envisioned, in part because of the high internal return requirements oil companies typically have. However, a state-led project with federal tax exemptions could be viable, Wood Mackenzie said at the time. Secondly, the state corporation is conducting an all-in, long-term economic modeling exercise for the project that includes construction expenses, financing rates, operations and management costs under multiple ownership and investment structures. That economic modeling, which is being done in conjunction with the Department of Revenue, will ultimately forecast rates of return for potential investors based on the project’s structure; those returns will largely determine the path forward, officials said. If the expected investment returns from the project are favorable — in the 10 percent to 15 percent range — AGDC is likely to begin seeking investors with experience in the LNG realm. If the range of returns comes in lower, the Dunleavy administration, the corporation’s board of directors and legislators will have to decide how much further they want to take the project at this point. AGDC leaders are also planning to meet with BP and ExxonMobil representatives in Houston to review the modeling with them when it is complete. The companies signed agreements announced in early March to assist the state corporation in finding ways to improve the project’s economics. Regardless of the outcome of the economic modeling, AGDC will almost certainly continue seeking a favorable record of decision for the project from the Federal Energy Regulatory Commission. In February, FERC pushed back the Alaska LNG environmental impact statement schedule several months; the first draft of the EIS is now expected in June, with a final EIS set for March 2020 and a decision on the broad federal authorization coming in the months after the final draft. AGDC officials and other industry observers have emphasized the value of securing the authorization whether or not the project is advanced immediately afterwards. It is seen as a major step in de-risking the project, which could attract investors at lower return thresholds or allow the state to quickly resume the project if LNG market conditions improve. Those big decisions aren’t likely to be made until the EIS is complete. On the commercial side, a dialogue between AGDC and potential LNG buyers continues but the sides are no longer actively negotiating. Corporation leaders said they are continuing the relationship they have with the three Chinese companies — Sinopec, Bank of China and the China Investment Corp. — that signed a nonbinding joint development agreement with AGDC in November 2017 with monthly phone calls and will meet with them in Shanghai at the LNG2019 conference in early April. Elwood Brehmer can be reached at [email protected]

Movers and Shakers for March 24

Rasmuson Foundation announced two new members of its board of directors. Eklutna Inc. CEO Curtis McQueen and Alaska Airlines Regional Vice President Marilyn F. Romano have been elected to three-year terms. McQueen joined Eklutna in February 2005 as communications and shareholder relations manager and became CEO two years later. He brings more than 32 years of experience in business, communications, project and construction management, administrative management and governmental affairs. He also previously worked in business development for his tribe, Central Council of Tlingit &Haida Indian Tribes of Alaska. He serves on the boards for Great Land Trust, Chugiak-Eagle River Chamber of Commerce, Anchorage Chamber of Commerce and the Alaska Native Village Corporation Association. He also is on the advisory board for the University of Alaska Anchorage Rasmuson Chair of Economics, and he serves on a subcommittee for Associated General Contractors of Alaska. Romano started with Alaska Airlines in 2011 as the regional vice president for Alaska and added the state of Hawaii to her area of responsibility in 2016. Before working for the airline, she spent nearly two decades with the Fairbanks Daily News-Miner, the second largest paper in Alaska, including 11 years as publisher. She was the newspaper’s first woman top executive. Romano serves on the boards of the Anchorage Economic Development Corp. and Alaska Chamber. She also serves on the Governor’s Aviation Advisory Board, is a trustee for the University of Alaska Foundation, and is vice president of the Alaska Airlines Foundation. Her contributions have brought recognition including a Top Forty Under 40 award from the Alaska Journal of Commerce, Woman of Distinction from the Farthest North Girl Scouts, and the Cashen Award for meritorious service to University of Alaska Fairbanks. In 2014, she was inducted into the ATHENA Society, which honors female leaders who work to set an example for the next generation. Meghan Carson is the newest associate financial advisor on the Alaska Permanent Capital Management private wealth team. Carson graduated from the University of Alaska Anchorage in 2015 with a bachelor’s degree in economics and in 2017 with a bachelor’s degree in accounting. Prior to that, she studied psychology and Spanish at the University of Denver and abroad in London. Senior Financial Advisors Robert Bell, Alex Joannides and Cassie Kosinski of Wells Fargo Advisors in Alaska have been named among the top 10 Forbes Best-In-State Wealth Advisors for 2019. Bell is based in Fairbanks and works with high-net-worth clients in Interior Alaska. He has 21 years of experience as a financial advisor, including 13 years with Wells Fargo. Joannides joined Wells Fargo Advisors in 2008. He is based in Anchorage and serves high-net-worth individuals and families in Southcentral Alaska. Kosinski has 26 years of financial services experience with Wells Fargo, including 18 years as a financial advisor in Anchorage. The Forbes Best-In-State ranking algorithm is based on industry experience, interviews, compliance records, assets under management, revenue and other criteria by SHOOK Research, LLC, which does not receive compensation from the advisors or their firms in exchange for placement on a ranking. Investment performance is not a criterion. Southeast Alaska Regional Health Consortium has hired Elliot J. Bruhl, M.D. to assume the newly created systemwide position of vice president/chief medical officer. SEARHC created the VP/CMO position to enhance the coordination and communication of the medical staff and the rest of the Consortium. Bruhl will begin on May 6. Bruhl has accumulated leadership and management experience in both Tribal and non-Tribal healthcare and has a proven track record in developing and implementing quality improvement measures. He served as the medical director for Mountainside Clinic in Sitka from 2006-08 where, among other things, he coordinated the merger with the Moore Clinic and redesigned the physician-practice model. From 2013-15, Bruhl served as Mt. Edgecumbe Hospital’s medical director, where he supervised the full-time medical staff, served on the leadership team, recruited physicians and established a new compliance system. He is currently the medical director of the Northeast and Northwest Family Clinics of the Mayo Clinic in Rochester, Minn., and serves as a consulting physician in the Mayo Clinic Department of Family Medicine and as an assistant professor in the Mayo Clinic School of Medicine. After receiving his bachelor’s degree in geology from Carleton College in Northfield, Minn., and a master’s degree in hydrology from the University of Idaho, Bruhl earned his doctor of medicine from the University of Colorado.

Users say fuel tariff hikes would impact cargo operations at airport

Anchorage port customers on March 15 affirmed the possibility that self-funding a rebuild of the critical but badly corroded infrastructure they use might drive ultimately business away from the port and Anchorage in general. Municipal and port officials are once again in the midst of an analysis to determine exactly is needed how to pay for it at what is arguably Alaska’s most critical piece of infrastructure. The ongoing Anchorage Port Modernization Program would mostly replace the existing docks with a few additions. While scaled back from the failed port expansion project of the late 2000s, the current work is expected to cost upwards of $1.9 billion to complete, according to the project management firm CH2M, which was recently purchased by Jacobs Engineering Group. That price has been met with varying levels of sticker shock; it also includes more than $500 million for risk contingencies and cost escalations as the current schedule calls for work through 2028. Increased foreign steel tariffs; building to high seismic criteria with a 75-year working life; the logistical complexities of keeping the port open during construction; and removing much of the 30 acres of fill that created a large area of backlands at the north end of the port during the expansion project further add to the cost. First in line for replacement is the petroleum and cement terminal, or PCT, which is scheduled to be replaced over the next two years at a cost of $223 million. The PCT is on the oldest section of the docks and must be done first to free up space for when the adjacent cargo docks are rebuilt, according to port officials. Some sections of the pile-supported docks have been in place since 1961 and have far exceeded their initial 35-year design life. Studies indicate the pile maintenance program can keep the docks open for about another nine years before pervasive corrosion from seawater will start forcing closures. The PCT work is being partially funded with unspent money from the first project and court settlements, but absent state or federal funding, city officials in February proposed drastic increases to the port’s fuel and cement import tariffs to cover the cost of borrowing up to $200 million through revenue bonds for the remainder of the work. Representatives from port user companies said at a March 15 Anchorage Assembly Enterprise and Utility Oversight Committee meeting — the second in a series of meetings examining port reconstruction — that increasing the port’s fuel tariff by more than 500 percent would likely increase the cost of fuel and goods across the state. It’s estimated that up to 90 percent of the goods destined for delivery across mainland Alaska arrive across the port’s docks. In 2017, the Anchorage Assembly renamed it the Port of Alaska in an attempt to highlight its importance statewide and hopefully drum up support for its rebuild. Few state leaders deny the necessity of the port work, but the prospect of meaningful levels of state assistance is bleak as lawmakers continue to wrestle with how to close large state budget deficits. Specifically, the proposed fuel tariff change would incrementally increase the current 0.38 cents per gallon to 2.4 cents per gallon in 2023, which would be sufficient to cover the debt service on bonds to pay for a new PCT when combined with cement tariff hikes. While just about 2 cents per gallon in nominal terms, the impacts of the higher petroleum tariffs could be much larger in practice, according to shippers and others. Fuel economy Bert Mattingly, a manager with Anchorage Fuel and Service Co., said any tariff increase would force the international cargo carriers that support a large portion of the business at Ted Stevens Anchorage International Airport to reexamine their operations. Anchorage Fuel and Service doesn’t buy fuel. Rather, it is a consortium of 18 primarily cargo airlines that own fuel facilities at the airport and handles the fuel purchased by the individual carriers. Roughly half of the 616 million gallons of jet fuel the company received in 2018 came through the port, according to Mattingly. Anchorage Fuel and Service also owns the pipeline that carries jet fuel from the port to the airport, he said. The Anchorage airport is the fifth busiest cargo hub in the world mainly because of its position between manufacturers in east Asia and consumers in North America, and that cargo business is a large reason the airport supports 10 percent of the jobs in the city, according to the Anchorage Economic Development Corp. Refueling in Anchorage allows carriers to fill aircraft with more cargo instead of carrying the added fuel that would be needed to reach refueling hubs or destinations to the south and east. However, the economics of the cargo business model rely on a difference of pennies per gallon between hauling more fuel or hauling more cargo, industry experts note. As a result, any tariff change at the port could impact international business at the airport, Mattingly said, adding that newer, more fuel efficient jumbo jets have already begun to challenge the model of an Anchorage stopover. “We’re in a good place physically for heavy cargo to come through but on the return flight (cargo carriers) have a lot more options” for refueling locations, he said. Petro Star Vice President Mark John characterized the Alaska fuel business as an “incredibly competitive” market where changes as seemingly minor as “fractions of a penny” can influence decisions. Petro Star operates small refineries in North Pole and Valdez as well as fuel terminals across much of the state. The company also purchased a 200,000-barrel storage facility at the Anchorage port in 2017. “While we agree that the port is vital to the state’s commercial and public interests, an increase of over 500 percent in port user tariffs would ripple through the fuel market in Alaska and cause irreparable harm,” John told the Assembly members. “Once those customers leave they won’t return.” John said in response to questions about other funding alternatives that Petro Star’s parent company, Arctic Slope Regional Corp., is aware of the situation at the port and is also active in state lobbying efforts for its businesses. Committee co-chair Assemblyman Christopher Constant commented that the tariff proposal is the first thing the city has done regarding the port project that has garnered attention from outside Anchorage. “As scary as it might sound that this could happen it might be the first time we can actually educate people outside of Anchorage that this is their port,” Constant said. The situation for cement could be similar to fuel if the tariffs are enacted, according to Ryan Zins of Alaska Basic Industries, which imports cement at the PCT. Cement tariffs would go from $1.61 per ton eventually to $8.30 per ton under the city’s proposal. Anchorage Municipal Manager Bill Falsey has said city officials believe the current market price for cement is about $155 per ton. “If we look at it from a tariff standpoint, what I hear is lost jobs,” Zins said. He acknowledged the market can absorb some cost increases on cement but the proposed tariffs would equate to $750,000 to $1 million either coming out of Alaska Basic Industries’ bottom line or its customers pockets. The company is in the fourth year of a recession in its business, Zins said, adding that the tariffs could curtail some work in an already fragile construction sector. However, the worries about the basic commodity tariffs don’t even consider what it would cost for Anchorage to self-fund the port’s general cargo docks used by TOTE Maritime and Matson Inc., which provide consumer goods to Alaska. City leaders estimate another roughly $200 million per year would need to be generated to cover the debt service for building new, permanent cargo terminals and the backlands removal and stabilization. All in, that work is pegged at nearly $1.5 billion. Up to $200 million in new charges equates to about $2,000 per container delivered from Tacoma, according to Marion Davis, a Matson consultant, who called the company, “the grocery guys.” “I don’t know what (costs) we could pass on but it wouldn’t be $200 million a year,” Davis said. And while some shipments could possibly be routed to Seward or Whittier, he said that isn’t likely on a large scale. Whittier, tucked against the Chugach Mountains, doesn’t have much extra space; using the railroad isn’t feasible for time-sensitive produce, according to Davis; and adding large volumes of truck traffic to the Seward Highway from either alternative port is untenable. The most likely alternative is that more groceries would likely come north via the Alaska Highway, he said. Davis also clarified that TOTE and Matson need to use the port on the same days — Sundays and Tuesdays, necessitating two cargo docks — because supermarkets want fresh produce early in the week. Also, staggering the shipping schedules would put some ships back in Tacoma during weekends, when there is no freight to load, amongst other logistical challenges. After hearing the concerns of those most directly impacted by changes at the port, Falsey emphasized that city officials along with the Assembly are conducting a detailed review of every aspect of the modernization plan approved in late 2014. “We’re not interested in building a port that will cause business to flight from the airport. We’re not interested in building a port that will cause volumes to spiral down so that the port can no longer pay for the infrastructure that it just created,” Falsey said, while noting that something needs to be done soon. “Our goal remains to build the cheapest port that serves our needs and we’re all in this together.” Funding alternative While Anchorage leaders have struggled for years to drum up support for state and federal funding or the port project, a new possibility emerged from one of the country’s largest labor unions at the March 15 Assembly meeting. Alaska AFL-CIO President Vince Beltrami said the building trades union has a large Building Investment Trust that it could utilize to leverage other funds and help with the Port of Alaska rebuild. The roughly $7 billion AFL-CIO Building Investment Trust supports the union’s pension plans and invests in projects its laborers can work on, according to spokesman Bob Struckman. As a concept, the trust would likely sell bonds to fund a large part of the project but would not become a part owner of the port, explained Struckman, who added the investment could be “in the range of hundreds of millions” of dollars or more. “We would enter into an agreement with Anchorage to service whatever investment that we put in. The terms are very good because we’re not Wall Street. I think we’re a lot better partner than a lot of sources of funding and it can be easier than self-financing,” he said. Beltrami said any such agreement would come with the expectation that AFL-CIO affiliated laborers would do the work and Constant noted the city would hire union contractors for a project the size of the port regardless of funding arrangements. Struckman said he’s very optimistic the union’s fund managers would be interested in the Anchorage port and he’s looking to get investors to Alaska soon to review the project. Elwood Brehmer can be reached at [email protected]

Movers and Shakers for March 17

The Outdoor Heritage Foundation of Alaska has elected new members to its executive board including a new president. The following changes were made to the executive board on Feb. 13: Jennifer Yuhas was seated as a board member representing hunting interests and elected president, and Julianne Curry was seated as a board member representing commercial fishing interests. Eddie Grasser, previous president, and Ben Mulligan, previous board member, remain involved through seats designated by Alaska Department of Fish and Game Commissioner Doug Vincent-Lang. Jordan Adams has been named business manager/secretary treasurer of the Public Employees Local 71 Bargaining Unit at the recommendation of Dennis Moen, effective upon his March 1 retirement, by the Local 71 executive board. Adams is a long-time member, taking his first union position with Alaska Department of Transportation and Public Facilities in Healy as a heavy equipment operator in December 2005. He has served as a shop steward and became the Northern Region Business Representative for Local 71 in 2013. His last year-and-a-half was spent working directly under Moen as assistant business manager in Anchorage. Adams is also the new chairperson for the Local 71 Health Trust. Covenant House Alaska CEO Alison Kear was recently selected as one of 15 leaders from across the U.S. for the 2019-21 class of the Annie E. Casey Foundation’s Children and Family Fellowship. The year’s class is made up of accomplished leaders in the public, nonprofit and for-profit sectors. As a fellow, Kear will utilize Annie E. Casey Foundation resources to work within Covenant House Alaska to make improvements for young people and families in Alaska. The Annie E. Casey Foundation, based in Baltimore, works across the country to develop a brighter future for millions of children who are at risk of poor education, economic, social and health outcomes. The foundation focuses on building stronger families and communities to ensure that children have access to opportunity. The foundation’s Children and Family Fellowship is a 21-month program that develops the leaders of nonprofit, philanthropic and public organizations through professional development opportunities, including executive seminars, peer consultations and individual coaching. In addition to the 21-month fellowship, Kear will have the long-term benefit of being a part of the network of Casey Fellows across the country. The Koniag Inc. board of directors has selected Ron Unger as CEO. Marty Shuravloff has been appointed to fill Unger’s seat on the Koniag board. As Interim CEO and board chairman, Unger was instrumental in helping Koniag through a successful leadership transition resulting in a strong team and sustainable earnings growth. Prior to being hired as the CEO, Unger served on the Koniag board for 14 years, with six years as chairman. Twice during his time on the board, Unger stepped in as acting CEO, in 2013 and then again in 2017. In order to ensure leadership continuity, the board has asked Unger to serve as a non-voting chair until the board votes in a new chair. Linnzi Doerr has been promoted to controller and Courtney Maillet to project accountant in R&M Consultants Inc.’s Accounting Group. Doerr has been with R&M since 2007 in the role of Accounting supervisor and has 17 years of business management and accounting experience. Doerr has a bachelor’s degree in accounting and an MBA, both from the University of Alaska Anchorage. Maillet joined R&M in 2011 as an accounting technician. She has 12 years of financial experience and is knowledgeable in all aspects of business accounting. Maillet has a bachelor’s degree in accounting from the University of Alaska Anchorage.

Draft EIS for Alaska LNG Project pushed back four months

Citing the state’s timeline for answering federal regulators’ questions and fulfilling data requests, the Federal Energy Regulatory Commission has extended by four months its scheduled release date for the Alaska LNG project’s draft environmental impact statement, or EIS. In a notice issued Feb. 28, FERC said it now plans to issue the draft EIS in June. The commission did not specify a date in June. The scheduled release date had been February. The delay in the draft EIS also adds four months to FERC’s schedule for the state-led project’s final EIS. In its Feb. 28 notice, the regulatory commission said the final EIS would be issued March 6, 2020, instead of November 2019. But March 2020 depends on the Alaska Gasline Development Corp. answering all of FERC’s questions in full this summer. “The revised schedule for the EIS is based upon AGDC meeting its commitment to provide complete responses to outstanding data requests on the dates it has identified,” FERC said in its notice. “Staff has revised the schedule for issuance of the final EIS based on an issuance of the draft EIS in June 2019.” FERC explained that its previous schedule of a draft EIS in February and final impact statement in November “was based upon AGDC providing complete and timely responses to any data requests.” The commission has always advised AGDC — the same as for any other project — that an EIS schedule is dependent on full information from the applicant. In its filings in January and February, the state project team reported it would submit answers and additional technical data to more than 150 of FERC’s most recent questions in several batches, starting in early March and ending in July. In a statement provided to the Alaska Journal of Commerce, AGDC spokesman Tim Fitzpatrick said, “FERC’s comprehensive analysis of Alaska LNG now includes more than 150,000 pages of environmental and engineering data, including responses to more than 1,700 FERC queries submitted since AGDC initiated this permitting process twenty-two months ago. Previous FERC scheduling changes accelerated the permitting calendar, and we believe that today’s revision does not affect the prospects for Alaska LNG. We look forward to working with FERC to complete this process and obtain the permits required to bring Alaska’s North Slope natural gas to market.” The state has been talking the past two years with potential lenders, partners and customers in China and elsewhere in Asia, but has not reached any firm deals. The state has spent close to $500 million the past several years on the Alaska LNG project and a smaller, backup project, the Alaska Stand Alone Pipeline, as hopes continue that someday a pipeline will deliver North Slope gas to Alaskans and overseas markets. “Our current plan is to step back and evaluate technical and commercial aspects of the project,” AGDC’s interim President Joe Dubler told a state Senate budget subcommittee in Juneau on Feb. 27 as quoted in an S&P Global Platts report. “If it is viable we are going to solicit world-class partners for FEED, which is front-end engineering and design.” If FERC issues its final impact statement in March 2020, the deadline for commission action on the Alaska LNG project application would be June 4, 2020, 90 days after issuance of the final EIS. Federal regulators have been working to prepare the draft EIS since the state in April 2017 submitted its application for the estimated $43 billion project to move North Slope natural gas down an 807-mile pipeline to a liquefaction plant and export terminal in Nikiski, on the eastern shore of Cook Inlet. AGDC has been working to answer hundreds of questions and data requests from FERC and other federal regulatory agencies participating in the single federal EIS for the project. The proposed Alaska LNG development, which the state took over from North Slope oil and gas producers in late 2016, also includes a gas treatment plant at Prudhoe Bay to remove carbon dioxide and other impurities from the gas stream and a 62-mile pipeline to deliver gas from the Point Thomson field to the treatment plant at Prudhoe. AGDC still owes FERC information on fire safety, spill-containment safeguards and hazard-mitigation designs at the gas treatment plant, liquefaction plant and LNG storage tanks in Nikiski. In addition, federal regulators are waiting for information from the state on pipeline crossings at active earthquake faults, and a more detailed route map showing all seismic hazards within 5 miles of the pipelines. The state team also owes FERC more information about the project’s 27-mile underwater pipeline crossing of Cook Inlet, including addressing whether tidal flow and other currents would move debris and boulders across the pipeline and, if so, how much movement is expected. The regulator also wants to know if AGDC plans to use any additional weights or supports along the underwater pipeline after construction to stabilize the line against tidal currents, and whether the seafloor is firm enough to prevent the weighted 42-inch-diameter pipe from sinking into the seabed and straining the pipe welds during construction and operations. The state gas development corporation reports it has enough funding left over from prior legislative appropriations to last through the EIS process, assuming lawmakers this session approve AGDC’s $10 million operating budget plan for the fiscal year that starts July 1. Moving past the EIS, however, would require at least several hundred million dollars for final engineering and design, which the corporation does not have. It also would require investors, binding gas-supply contracts with the North Slope producers, bankable contracts for customers to take capacity on the pipeline and through the liquefaction plant, and buyers for the LNG. ^ Larry Persily is a former Alaska journalist, state and federal official who has long tracked oil and gas markets and projects worldwide.

On-site cannabis consumption rules delivered to Meyer

The Marijuana Control Board has approved regulations and paperwork for on-site consumption endorsements and businesses are now waiting on Lt. Governor Kevin Meyer’s signature for final approval. At its Feb. 20 meeting, the board approved the permit forms that cannabis businesses will have to complete in order to obtain an on-site consumption endorsement. The paperwork may still have amendments in the future based on industry and local government feedback, but for now, the checklist of items license holders need to apply has the Marijuana Control Board’s approval. However, businesses still can’t submit applications for the paperwork, be approved and open up their spaces quite yet. After the Marijuana Control Board approved the regulations, they were sent to the Alaska Department of Law for review. After that, they require the lieutenant governor’s signature before becoming official. Meyer has not signed them yet; his office just received the packet from the Department of Law on Feb. 28, according to Meyer’s Chief of Staff Josh Applebee. If Meyer signs off, they will take effect 30 days later and applications may be submitted. In December, Alaska became the first state to pass regulations to allow people to consume marijuana on licensed premises in a 3-2 vote of the board. It was a long-championed item by the cannabis industry, particularly those who own licenses in areas with large tourist visitation. However, concerns about public health and safety dominated the discussion for some time as the industry and the board members tried to work out how to implement regulations. Not long after the Dec. 20 vote, Gov. Michael J. Dunleavy dismissed Sitka Police Chief Jeff Ankerfelt from his public safety seat on the board and declined to nominate industry representative Brandon Emmett for another term on the board. Dunleavy instead nominated Vivian Stiver of Fairbanks, who led an unsuccessful effort to ban local commercial cannabis operations in 2017, to replace Emmett. Both Ankerfelt and Emmett voted in favor of allowing onsite consumption. With the summer tourist season coming, some businesses are hoping to have their on-site consumption areas open and available this year. The Ketchikan Gateway Borough, home to about 13,000 people, welcomes just about every Alaska-bound cruise ship every summer. As the first port a ship encounters upon entering Alaska, the city of Ketchikan can see days with 8,000 to 10,000 tourists in town. Mark Woodward, co-owner of cannabis retail shop Stoney Moose, says his store can attract about 10 percent of that influx — maybe 800 to 1,000 people per day on a busy day. Because the cruise ships don’t allow people to use cannabis on board and consuming cannabis in public is illegal, many of his customers have to resort to either smoking somewhere discreet around town or using edibles instead. “People will buy an edible and walk outside and open it up and pop it in their mouth,” he said. Opening up an on-site consumption area has always been part of the plan for his business, he said. Most Ketchikan locals will likely purchase their products and go home to consume them, so the site would be targeted mostly at the cruise ship industry. Set up in downtown Ketchikan where visitors can walk to and from the store, the shop has an advantage over others situated a little farther out of town. But it’s also a disadvantage for on-site consumption because of a clause the Marijuana Control Board included requiring businesses to be located in a freestanding building in order to allow smoking. While that may not be a problem for businesses in Southcentral Alaska, where the communities are more spread out and more buildings stand independently, it’s a huge hurdle for Southeast, where the communities are more densely developed. Woodward said he and his co-owners invested in a ventilated indoor room with the hope that on-site consumption would be allowed, but the inclusion of the “freestanding” clause negatively impacts that plan. They’d have to switch to a covered, ventilated deck instead. “We have a deck that it would be perfect,” he said. “It overlooks a salmon stream. We’re going to ventilate the deck. We have all these plans, but it’s just this unknown of can you have a freestanding building? Down here in Ketchikan, you just don’t.” The board discussed that consideration during its February meeting, noting the concern from some business owners who want to allow on-site consumption of edibles only. The freestanding requirement is a stipulation of the statewide Smoke-free Workplace Act and wouldn’t apply to an area that only allowed consumption of edibles. Board chairman Mark Springer asked if the Alcohol and Marijuana Control Office could look into developing separate forms for someone wanting to only allow edible consumption that would allow them to bypass the freestanding regulation. “We’re approving this, but it’s still going to be a work in progress, so would it be fair to say that if people in industry, people in government, have got thoughts on what all should be included in this, what would clarify it for local government, what industry might think … that they can either throw it in the marijuana mailbox or flag comments on this and it will be administratively considered,” he said. “Partly that’s because this continues to be a high-interest issue.” Elizabeth Earl can be reached at [email protected]


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