DJ Summers

Proposals in, 2017 board meeting to revisit Inlet battles

Deadlines have passed for proposals to the 2017 Upper Cook Inlet finfish meeting of the Alaska Board of Fisheries. The proposal book, now under review, is stuffed with 499 pages that largely carry over the battles fought in the 2014 meeting, when the two-week Board of Fisheries marathon gave way to new rules for the Kenai River management plans that added fuel to the so-called Cook Inlet “fish wars.” The book is currently under review for the 166 proposals submitted. More than a dozen proposals look to modify or entirely repeal the Kenai River Late Run King Salmon Management Plan and the Kenai River Late Run Sockeye Salmon Management Plan. The current late run king salmon plan include restrictions on commercial sockeye fishing and sport fishery bait usage when the department projects an in-river run of less than 22,500 fish. The late run sockeye plan, which begins after the sport fishery closes on July 31, restricts the commercial setnet fleet to 36 hours through Aug. 15 if the Alaska Department of Fish and Game projects a king salmon escapement of less than 22,500 fish. Commercial fishermen largely resent the August sockeye rules and have been restricted by them to some degree in each of the last three years since they were adopted in 2014. However, ADFG used its emergency management authority to allow a 12-hour setnet opener on Aug. 9 after using the allowed 36 hours for the month in the previous week in order to keep late run sockeye from exceeding the in-river goal for the Kenai River. Some fishermen say the August restrictions are a de facto optimum escapement goal. While ADFG sets the sustainable escapement goal, or SEG, the board may set optimum escapement goals, or OEG. An OEG may not be lower than the sustainable escapement goal, but the board may choose a higher range for reasons such as passing more fish to in-river users. “The current provisions in 5 AAC 21.359(e) and (f), which were adopted in 2014, have essentially created an optimal escapement goal (OEG) for Kenai River late-run king salmon bore disproportionately by the Upper Subdistrict set gillnet fishery,” wrote Joel Doner. “The current management plan places the entire burden of conservation for this stock in August solely on the set gillnet fishery.” Because the Kenai River is managed with a sustainable escapement goal of 15,000 to 30,000 king salmon, commercial fishermen wonder why the number comes up at all. “There is no biological reason or data, that can justify for this number,” wrote Gary Hollier in his proposal. “22,500 puts unnecessary restrictions on the ESSN (East Side setnet) fishery. In the Kenai-East Forelands sections, where in some years up to 25 percent of their harvest can occur in August, the current regulation is very devastating. If 15,000 is the minimum goal, and the minimum escapement goal is projected, why are there any time restrictions put on the set net fleet?” The Anchorage Advisory Committee, one of dozens around the state that make recommendations to the Board of Fisheries, wants to decouple the restrictions on commercial sockeye harvest for the Kenai and Kasilof rivers if the use of bait is prohibited in the Kenai River for king salmon. “Allowing ADFG to independently use the 36 hours in each beach will make meeting the objective of maximizing sockeye salmon harvest more effective, and thus, more efficient,” wrote the committee. Elements of the August plan, said others, have tied ADFG management’s hands with the 36-hour limit. “The restrictions in place are too static and will not allow any flexibility to managers,” wrote Paul Shadura, spokesperson for South K-Beach Independent Fishermen’s Association, or SOKI. “The question of pairing is not fundamentally possible in a fisheries with so many different moving parts.” Not only is the August plan unmanageable, others said, but a clear violation of ADFG’s constitutional charge to manage fisheries to ensure maximum yield. “The current version of 5 AAC21.360 and 5AAC21.365 set gillnet fishery management plans are in violation of the constitutional mandate and does not allow adaptive in-season management,” wrote the board’s Central Peninsula Advisory Committee, which also asks repeal the optimum escapement goal of 700,000 to 1.4 million for sockeye. “The result has been gross annual over-escapements and annual loss of harvest in the tune of millions of salmon and tens of millions of dollars.” The Upper Cook Inlet Drift Association, an industry group of Cook Inlet drift net fishermen, notes that sockeye have indeed surpassed the upper end of the goal the majority of the most recent years. “The Kenai River late-run sockeye have exceeded the inriver goal for seven of the last 10 years and the Kasilof River sockeye have exceeded the (biological escapement goal) for nine of the last 10 years,” wrote UCIDA, which also wants to revise the Central District drift plan. Personal use fisheries have a wealth of proposals in the queue as well, asking for expanded hours and zones and restricted hours and zones. Rich Koch, city manager of Kenai, wants to repeal the ability of ADFG to open dipnetting to 24 hours by emergency order, saying the city has enough trouble cleaning up the normal dip net season. “There are inherent safety conflicts between personal use fishery participants and the operation of heavy equipment in a confined area during a dark period of the night/morning, during 24 hour openings of the fishery,” wrote Koch. While commercial fishing representatives are trying to repeal some 2014 restrictions, guided angler representatives will try to enact even more at the 2017 meeting. The Kenai River Sportfishing Association, a guided angler industry group, wants to limit East Side set netters to 29-inch mesh, in addition to increasing the daily bag limit of coho salmon to three after the set net fishery closes in August and expanding boat usage further upstream. “Research conducted at the request of the Alaska Department of Fish and Game and widespread experience of set net fishermen both demonstrate that fishing with shallower set net gear will more selectively harvest large numbers of sockeye with reduced harvest of king salmon,” reads the proposal. “Most fishermen currently use 45 inch mesh depth gear. A maximum net depth of 29 meshes is currently thought to provide the best efficiency for harvesting sockeye while avoiding kings.” KRSA also wants to establish an optimum escapement goal of 15,000 to 40,000 for king salmon and expand Kenai sockeye restrictions to the Kasilof Special Harvest Area. “Higher in-river runs produce tremendous sport fishery benefits with no significant impact on future production or yield for escapements up to 40,000,” the proposal reads. “The proposed upper goal of 40,000 includes the historical average escapement and maintains high production and yield according the Department’s recent escapement goal analysis. “Returns from all historical escapements below 40,000 exceeded replacement and produced substantial yields. There was no significant correlation with returns for escapements between 22,500 and 40,000.”  

Alaska Communications grows business segment in 2Q

Alaska Communications Systems Group Inc. released its second quarter financial report for 2016, underscoring growth in its targeted areas since leaving the wireless industry despite a drop-off in both residential and business connections. Like the first quarter of 2016, Alaska Communications charted an increase in net income over last year. In 2015, second quarter net income was a $4.8 million loss. This year, the quarter’s net income was $0.3 million on total revenue of $56.2 million, up from $55.7 million year-over-year. Alaska Communications’ wireline segment now makes the most important revenue source for the company. While the loss of wireless customers has reduced revenue, broadband-based cash flow has risen. In the second quarter of 2016, total broadband revenue grew 8.4 percent year-over-year. Total business revenue, which includes both broadband and managed IT services, has risen from $31.2 million to $33.9 million. This growth comes mostly from business broadband rather than managed IT services, which have stayed flat since last year. Business broadband revenues grew some $12.6 million to $14.4 million.  “I’m pleased to report our performance is aligned with our operating plan for the year,” said president and CEO Anand Vadapalli during an Aug. 4 earnings call. “We continue to deliver results consistent with the long-term directional view we provided on earlier calls.” As of Aug. 9, the company’s stock was $1.69 per share, a 19 percent drop from the $2.08 per share on Aug. 11, 2015. Investor calls since 2014 have focused on the company’s move to broadband and managed IT after selling it shares of the Alaska Wireless Network and its wireless customer base to General Communications Inc. in 2014 for $300 million. The sale reduced Alaska Communications’ debt — which stands at $169 million now instead of more than $400 million — but also reduced revenue from the wireless market. This year, Vadapalli said the company’s new focus is starting to yield results. Consumer revenues, meanwhile, have fallen, as expected by the company when it switched to unlimited data connections for consumer broadband plans with only one price of $79.99. In 2015, second quarter consumer revenue came in at $10.1 million. This year, that number has dropped to $9.5 million, mostly due to a decline in consumer broadband. Like GCI, Alaska Communications is losing residential connections, dropping 982 connections since last year. Consumer broadband revenue decreased to $6.2 million in 2016 from $6.6 million in 2015. Overall, business connections have actually declined by nearly 3,000 since last year. Rather than expanding the number of connections, Alaska Communications is making more money off the connections it has. The average revenue per user, or ARPU, has risen substantially since last year. For broadband, Alaska Communications’ ARPU for the business section of broadband rose from $268 in 2015 to $314 in 2016. The ARPU drove much of broadband’s growth; the company said business customers are paying more to satisfy high and high demands for data. “This improvement was primarily driven by a $1.8 million increase from new and existing customers buying or increasing their consumption of bandwidth using our advanced network services such as multi-protocol label switching (“MPLS”), dedicated Internet and Enhanced Metro Ethernet,” according to Alaska Communications’ quarterly report. Vadapalli did not directly address a shareholder question about market contraction due to Alaska population declines. These were expected by GCI President and CEO Ron Duncan in an earnings call the day before. GCI announced that it will cut capital expenditures by as much as a quarter next year in light of failure to produce a fiscal plan in Juneau. Duncan said he expects an oilfield recession to combine with GCI’s own cutbacks to contribute to a loss of Alaskans. “We’re expecting the size of the market to compress rather than continue growing,” Duncan said,” depending on how bad the state economy gets in reaction to the fiscal situation, we’re going to see some loss of population over the next several years up here. We’re already seeing it with the compression in the oil industry. We’re going to compound it with the compression of investment spending by not just us but others in the economy.” In response, Vadapalli said he “cannot comment on someone else’s perspective,” but did say the company will not be directly impacted by oilfield contraction. “Our exposure to the two sectors that are most directly impacted by the price of oil, which is the energy sector and the state government remains somewhat limited,” said Vadapalli. “More importantly, our wallet share of the spend from those sectors is also pretty low.” DJ Summers can be reached at [email protected]  

ADFG cuts Kenai setnet hours

After allowing liberalized harvest of Kenai River sockeyes and king salmon throughout July, the Alaska Department of Fish and Game is implementing restrictions on the East Side setnetters in response to its latest forecast for escapement. ADFG announced on Aug. 2 that it is projecting an escapement of less than 22,500 king salmon on the Kenai River, meaning the commercial setnet fishery may only be opened by emergency order to no more than 36 hours of fishing time until Aug. 15 when the commercial fishery for sockeye closes. When the sport fishery closes on July 31, ADFG tracks escapement numbers instead of total run size. During the season, ADFG was projecting a total run size larger than 22,500 kings, allowing for more commercial fishing time and the retention and use of bait in the sport fishery. After Aug. 1, different rules kick in if ADFG predicts an escapement of 16,500 to 22,500, which it has now done after managers were optimistic earlier in July that the restriction would not be triggered. If managers predict anything less than 16,500, the commercial fleet cannot fish at all. ADFG can loosen the restrictions if it projects an escapement greater than 22,500 before Aug. 15. ADFG area commercial manager Pat Shields said the department will be making daily reassessments to see if the forecast changes. The release said the department didn’t see what it needed to achieve the mid-point of the river’s 15,000 to 30,000 escapement goal for late-run kings. “In order to maintain escapement estimates at that level, daily passages rates of approximately 1,000 king salmon were needed through the peak of the run during the last week of July,” reads ADFG run analysis. “Those daily passage rates were not realized and low king salmon passage now project an escapement less than 22,500 Kenai River late-run king salmon for all on-time and early run timing scenarios.”  

Buds and bugs: cannabis grow inspections underway

KASILOF — On July 28, Kasilof’s Greatland Ganja became the second of 47 approved cultivation facilities in Alaska to pass inspection and receive its full license despite glitchy tracking software and a worry over plant height limits. The first, Fairbanks’ Pakalolo Supply Co., passed inspection earlier in July. Before commercial cannabis licensees receive their final approval, each has a visit from Alcohol and Marijuana Control Office enforcement officers. Officers check to make sure facilities are up to specifications outlined in the Marijuana Control Board’s regulations for security and inventory. Greatland Ganja passed the inspection with only a few minor hiccups. Apart from a needed security tune-up and snags in the Alcohol and Marijuana Control Office inventory tracking software, enforcement officers’ only criticism was to tease owner Leif Abel for “slacking” in a greenhouse with fewer cannabis plants than the others. The officers also gave some slack for a preponderance of plants over the 18-inch height guidance discussed by the Marijuana Control Board in an emergency meeting on July 12. Leif Abel, owner and operator of Greatland Ganja alongside brother Arthur Abel and their father Seymour, grumbled about the state’s cannabis tracking software but said the enforcement officers met his expectations for professionalism. “I think the state’s responding very reasonably and treating us like any other business,” Abel said. Enforcement officer Joe Bankowski recognized the glitches, but said they are only part and parcel of the new partnership between regulations and a formerly illegal activity. “There’s a big learning curve here for everybody,” said Bankowski. The inspection, administered by AMCO officers Bankowski, Joe Hamilton, and Scott Starr, took just less than three hours from start to finish and was divided into two distinct enforcement focuses. Officers either counted plants with the state’s tracking system or monitored building codes and regulations with an especially sharp eye for security-related items. Security requirements in Marijuana Control Board regulations require a heavy investment for cannabis businesses. Cultivation operations must be out of the public view with extensive video monitoring and storage capacity, along with a coterie of requirements for door and window alarms, signs pointing out restricted access areas within the facility, and commercial grade locks. The officers spent the inspection’s first hour checking security requirements and found only one problem area. Greatland Ganja’s facility sits back from the Sterling Highway surrounded by a six-foot security fence peppered with signs cautioning that the building is heavily monitored. From a central control room inside, a flat screen television hooks into each of the state’s required high-resolution security cameras and stores the visuals in a 24-terrabyte unit for the required 40 days. The cameras covered virtually every nook and cranny of the operation with enough resolution to make out a person’s features within 20 feet, except for a blind spot made by an incubation room’s cannabis-stuffed growing racks. The officers made a note of the blind spot and gave Abel a week to install a new camera from the stockpile he’d bought in case he needed such additions. Potentially, explained Bankowski later, enforcement officers can issue two kinds of citation: and advisory notice, or a notice of violation. The difference, he said, concerns the severity of the violation and the adherence to regulatory intent. A willful disregard for an enforcement officer’s directions or for regulation — Bankowski used the example of a failure to install a new camera in the Abels’ incubator room, or having untagged plants — will receive a notice of violation. An advisory notice is the Alaska cannabis equivalent to a “fix-it ticket,” and gives a time frame to correct simple oversights. Officers give a time frame in which to correct the problem and require some proof of its completion. The bulk of the inspection’s remaining two hours was spent tallying up plants. The State of Alaska entered into a contract with Franwell, a Florida-based company, to provide cannabis-tracking services. Franwell’s technology, METRC, is already in use for the same purpose in both Colorado and Oregon. As a piece of equipment, the METRC gun resembles a graphing calculator glued to a Glock, much the same as the inventory controls Franwell has produced since 1993 for retail operations. Enforcement officers point the gun at the metal tags required on each plant and the software matches the plant to the strain and quantity the growers entered into the system prior to inspection. Franwell’s system is still rather buggy, as METRC developers have to craft an entirely new system for Alaska. “The program is probably a little bit like Healthcare.gov,” said Arthur Abel. “They’re probably a little overburdened and under budgeted and behind schedule, so they’re having to fix things as they go along.” Cultivators still have no way to enter either seeds or waste into the system, an issue for cultivators who must trim regularly to keep crops viable. The Abels keep detailed physical records of seeds, waste, and growing plants in the meantime, which enforcement officers consulted during the inspection. The METRC gun read through the facility’s metal walls into adjoining rooms at one point. Several times during the walkthrough, METRC didn’t correctly populate with the plants Greatland Ganja had registered on its shelves. At one point, Bankowski had to place a call to METRC support to resolve the issue. By the inspection’s end, the issues were fixed and enforcement officers encountered no untagged or plants unaccounted for. Abel feared the enforcement officers would take a more critical eye to the plants in Greatland Ganja’s outdoor greenhouses, and was pleased they recognized the spirit of the law behind the Marijuana Control Board’s 18-inch height guidance for pre-inspection plants. Previously, the Alcohol and Marijuana Control Office and the Alaska Marijuana Control Board issued guidance that cultivators may have an unlimited number of tagged clones on premise, but that they must be within a 6- to 18-inch height range to prove they’d been obtained and tagged after June 9, when the board began approving licenses. “I was a little bit nervous when they went out into the greenhouse,” Abel said, “because those plants have been in the sun, and they’re a little more than 18 inches tall. “So I’m really glad that they were reasonable and understand that this is agriculture. In the summer you have to grow.” DJ Summers can be reached at [email protected]  

Ninilchik group finally gets Kenai subsistence net OK’d

A year and half after it was first approved, the Ninilchik Traditional Council has been allowed to set its subsistence sockeye gillnet in the Kenai River in 2016. On July 27, the Federal Subsistence Board approved a special action request from the NTC that asked for the subsistence gillnet’s operational plan be approved. Over the conservation concerns of the public, U.S. Fish and Wildlife Service and the Bureau of Land Management, the board approved the request 6-2. “This successful outcome underscores years of efforts by the Tribe to operate this fishery,” said NTC in a statement. The U.S. Fish and Wildlife Service permit allows the Ninilchik Traditional Council to harvest up to 2,000 sockeye, 50 king salmon, 100 Dolly Varden and 50 rainbow trout. The net can be in the water through Aug. 15 or until 50 kings are caught. In its statement, NTC said this year’s improved king salmon runs should allay any worries that the gillnet will damage chinook stocks or take sockeye from commercial fishermen. There are plenty of fish to go around, it said, and the community gillnet harvests a negligible amount. “Over 5,000 Chinook salmon have been harvested so far in the 2016 Kenai sport fisheries,” NTC said in its statement. “NTC’s allowed harvest of 50 chinook is 1 percent of this harvest. The tribe’s 2016 harvest limit for 2,000 sockeye is far less that 1 percent of the total Kenai harvest. NTC’s fishery is carefully structured to be conservative and precautionary while catching salmon that are vital to its subsistence way of life.” As of Aug. 1, the Kenai River king salmon have returned with more vigor than the previous years, though strong numbers in July slowed toward the end of the month. The Alaska Department of Fish and Game has counted 17,215 kings having escaped past sonar, 400 more than the same time last year and 6,000 and 4,000 more than that of 2014 and 2013, respectively. This meets the lower end of the escapement goal of 15,000 to 30,000. ADFG commissioner Sam Cotten said he worries about potential impacts for the fish, fishermen and the federal board itself. ADFG has voiced concerns repeatedly about the gillnet. “It just adds one more controversy in the mix,” said Cotten. “It’s a one year deal, relatively small number of fish, but it adds a wrinkle of controversy.” After July 31, Kenai River management switches to escapement based from in river run total-based. If this amount does not pass 22,500 king salmon, the commercial sockeye fishery endures more restrictions. Cotten said 50 fish are unlikely to make the difference, but fears it all the same. Further, that the Federal Subsistence Board overrode the federal agency that manages the fishery in question unsettles Cotten. “I remain confused about who should be making these calls on the behalf of the U.S. government in these decisions,” said Cotten. “I felt like USFWS should be given some deference when it’s the exact conservation unit they manage, and they weren’t given any at all.” Local voices, which have been largely against to the idea since its inception, remain concerned about the health of king salmon stocks. Tim Cashman, a member of the Soldotna city council and angler guide operating from Homer, said the tribe’s net remains a bad idea. “I’ve yet to find anybody in favor,” said Cashman. “I do know the importance of a fishery that’s barely hanging on and barely making minimum escapement, to have these fish that have beaten all odds to get to spawning grounds. They beat the commercial nets, they beat sport fishermen, they beat the guides and they beat Mother Nature. And they’re being yarded out by a group that lives 50 miles away from us. If the people who manage our fishery are telling us this is a bad idea, it’s a bad idea.” The approval comes after a lengthy and heated battle involving hundreds of letters from the public asking the board to reconsider the gillnet, accusations of wrongdoing against U.S. Fish and Wildlife Service managers, earlier special action requests, a lawsuit brought by the council against the Secretaries of the Interior and Agriculture and opposition from neighboring subsistence communities. In January 2015, the Federal Subsistence Board voted 4-3 in favor of NTC’s proposal to hold a community subsistence gillnet for the Kasilof and Kenai rivers. State and federal biologists advised against the action at the time. They claimed a subsistence gillnet, even if targeted for sockeye salmon, could endanger returns of king salmon, which had been on the downswing statewide since the beginning of the decade. Within months, more than 700 requests for reconsideration flooded the Office of Subsistence Management asking the federal board to overturn its decision to let a subsistence gillnet into the state’s most heavily used and heavily politicized river. Several legislators submitted letters of their own, including Anchorage’s Rep. Les Gara and Sen. Bill Wielechowski. The U.S. Fish and Wildlife Service manages the Kenai Wildlife Refuge, which is the federal land on which the Ninilchik Traditional Council proposed it put its gillnet. The USFWS was one of the parties represented on the Federal Subsistence Board that voted against approving the gillnet. The proposal required that the USFWS manager Jeff Anderson approve an operation plan before NTC be allowed to actually put the net into the water. Though he approved the operational plan for the Kasilof River during the 2015 sockeye season, he denied the Kenai River plan. NTC leadership was outraged and filed a special action request with the Federal Subsistence Board to force Anderson to approve the operational plan, similar to the one approved in 2016. On July 29, 2015, the board denied the request, backing up the USFWS decision. Ninilchik Tribal elder and Council President Greg Encelewski spared no venom describing how the council feels about Anderson’s management of the Kenai River gillnet. “It’s absolutely ludicrous,” Encelewski said at the time. “It’s shameful and we’re disgusted.” In response, the council filed a lawsuit against the board and secretaries of Agriculture Tom Vilsack and Interior Sally Jewell. Others jumped into the fray as time rolled on. In April 2016, The Cooper Landing and Hope Federal Subsistence Community filed a proposal change in the 2017-2019 Federal Subsistence Board proposal book that would eliminate Ninilchik Traditional Council’s gillnet. The gillnet, the Cooper Landing and Hope filers said, has a direct impact on them. Cooper Landing subsistence users are upriver of NTC and fish with dipnets. “We maintain firmly that the Federal Subsistence Board’s approval, which allows Ninilchik to place a community gillnet in the Kenai River, aggrieves the federal subsistence priority and right of Cooper Landing and Hope subsistence users,” the proposal stated. NTC filed its latest special action request while a judge was considering an injunction that would have forced USFWS to approve the net. NTC’s attorney, Sky Starkey, said the group plans to continue its lawsuit against USFWS. “We’re still weighing how to proceed,” said Starkey. “We believe that the FWS violated the subsistence priority of NTC in 2015. This fishery was actually supposed to start on June 15. That would have allowed NTC to get the bulk of the sockeye run. “What NTC wants is just whatever help the court might provide so that we don’t end up in the same situation next year.”  

GCI cuts capital project spending over lack of state fiscal plan

General Communications Inc. is cutting as much as one-fourth of its panned capital project spending next year in light of the State of Alaska’s failure to implement a fiscal plan during its 2016 marathon legislative session. “The state government has not been able to adopt a workable long term fiscal plan in 2016,” according to a statement from GCI in its second quarter earnings announcement Aug. 2. “As a result, we have announced that we will be reducing 2017 capital expenditures by 20 to 25 percent from our 2016 forecast of $210 million. This implies 2017 capital expenditures of $158 to $168 million.” GCI President and CEO Ron Duncan has been an outspoken supporter of plans such as those put forward by Gov. Bill Walker and approved by the state Senate to restructure the Permanent Fund to use earnings to pay for state government. The House failed to have a floor vote on the Senate bill, leading Walker to veto $1.3 billion in state spending, including $666 million from Permanent Fund Dividends to reduce this year’s check from more than $2,000 to $1,000. Duncan is the founder and one of the co-chairs of Alaska’s Future coalition, which has organized a campaign to encourage legislators to approve a fiscal plan and for the public to support such a plan. GCI spokesman David Morris said the company doesn’t plan on shedding employees as a result of capital expense reductions, but acknowledged things can change. “We don’t have any plans for job loss,” he said, “but we reserve the right to right size the company depending on what direction the economy of the state heads.” The capital expense project cuts will take place in 2017, and without a 2017 budget Morris said GCI doesn’t know which projects will take the hit hardest. However, it has several commitments that will take priority over other plans. “Right now we don’t have a true budget for 2017,” Morris said. “We have committed to complete the TERRA ring. We’re going to commit to a second fiber cable to the North Slope. The third is we’ve already made a commitment to extend TERRA services to several villages in rural Alaska. The other items are on the table until we come up with a budget.” The capital expense cut at GCI will dig into statewide utilities construction. According to forecasts by the Institute of Social and Economic Research at the University of Alaska, private spending for utilities construction in 2016 will total $459 million. GCI accounts for nearly half that amount. According to a fourth quarter 2015 GCI earnings summary, in 2016 “Capital expenditures are expected to be approximately $210 million, and capital expenditures net of tower sale proceeds to be re-invested in 2016 are expected to be approximately $150 million.” Curbing capital project expenses will put a damper on two years of growth for GCI and throw a wrench into optimistic plans for a chunk of money gathered in 2015 and 2016. GCI has been aggressively expanding its rural presence in 2016 by adding redundancies to existing broadband networks. Recent moves were also projected to add about $200 million in revenue for GCI. The TERRA network, which lays terrestrial broadband and microwave towers across Southwestern, Western and Northwestern Alaska, and already includes 72 locations. The total number of rural locations under GCI coverage will grow to 84 after recently announced additions to Red Dog Operations and the village of Noatak are completed, scheduled for 2017, the latest in a round on TERRA expansions announced in 2016. GCI’s rural presence has also spanned into the Gulf of Alaska. On July 29, GCI acquired the Kodiak Kenai Fiber Link from Kodiak Kenai Cable Company for $20 million. The low-latency redundant fiber link connects Anchorage, the Kenai Peninsula and Kodiak. In 2015 and 2016, GCI made some extra cash with roaming agreement changes and an asset sale. Late in 2015, GCI renegotiated its roaming agreements with Outside carriers whose customers travel to Alaska. The new deal secured the lucrative agreements by lowering the cost to the carriers. This cost $25 million for GCI, but also cemented the $100 million the contracts are worth. GCI also made a sale-leaseback agreement on May 4 to sell its urban wireless tower and 275 rooftop sites to Vertical Bridge for $91 million, or approximately 20 times what the towers bring in for GCI, according to Vertical Bridge. This sale closed on Aug. 1. The capital expense cut for 2017 projects comes during a time when GCI is still adjusting to its new business since acquiring full ownership of Alaska Wireless Network in 2014 for $300 million. Second quarter financials show that roaming backhaul agreements are still eating into GCI’s revenue after they caused a flat first quarter, but also that income are climbing out of the AWN-driven income gaps in 2015.  GCI’s net income was $3.4 million in the second quarter of 2016. For the same period in 2015, the company ran a $15.6 million loss. Losses ran through GCI’s balance sheet in 2015 as the company absorbed the expenses of buying AWN. In the second quarter of 2016, the company’s revenue dropped to $234 million, six percent less than the same period last year though a one percent improvement over the first quarter. Wireless revenues declined from $67.9 million in the second quarter of 2015 to $53.9 million. Wireline revenues held steady over last year at $180 million, but consumer revenues of $84 million in the second quarter are a six percent decline year-over-year and one percent sequentially. Consumer broadband and wireless connections declined in the second quarter of 2016 compared to earlier in the year. At 127,000 by the end of June, there are nearly 5,000 more cable modem subscribers than in the year before. Since March 31, that number is down by about 800. GCI has also lost about 1,500 consumer postpaid lines — the largest consumer wireless segment — since March 31.

Schulte uprooted from Marijuana Control Board

Editor's note: this story has been updated from the original version to include additional comments from Gov. Walker's office and other board members. Gov. Bill Walker has removed Bruce Schulte from the Marijuana Control Board. Walker’s letter gives little explanation for Schulte’s removal. “While I have appreciated your willingness to serve on the Marijuana Control Board, I have determined that your continued representation on this board is not in the best interest of Alaska,” stated the letter signed by Walker and dated July 29. Schulte said he received a voicemail from Walker’s deputy chief of staff John Hozey on the afternoon of July 29 informing Schulte he was off the board. Schulte, a commercial pilot out flying at the time, said he left several messages but hasn’t heard back from Hozey for any explanation. “I honestly have no idea (why I’ve been removed),” said Schulte. “No explanation. No preface. I have no clue.” Hozey has not returned calls from the Journal asking for comment. Alcohol and Marijuana Control Office Executive Director Cynthia Franklin referred the Journal to Hozey for questions. Board members contacted they don’t know why Schulte had been removed, either. Grace Jang, Walker’s director of communications, had a slightly more detailed explanation for Schulte’s expulsion from the board than provided in Walker’s July 29 letter. “Board members serve at the pleasure of the Governor, and Governor Walker felt it was time for a change,” wrote Jang in an email. “Mr. Schulte’s approach to the staff and the administrative process was not satisfactory.” Peter Mlynarik, the board’s chair, said he was surprised by Schulte’s removal and couldn’t venture to get the cause. “I don’t know what the reason is,” he said. Mark Springer, the board’s Bethel-based rural representative, said he doesn’t know why Walker cut Schulte from the cannabis bench, but said that’s simply the nature of board service. “Governors work in mysterious ways,” said Springer. “When you serve on a board, you serve at the pleasure of the governor. And nobody knows what pleases a governor.” The removal comes shortly after Schulte being voted out of his role as board chair at the June 9 meeting and replaced with Mlynarik, the Soldotna Chief of Police, who is gathering signatures for a commercial cannabis ban in unincorporated areas of the Kenai Peninsula Borough. The next board meeting is scheduled for Sept. 7 when the first retail licenses are expected to be issued. The vacancy leaves the board with four members. Jang wrote that, “The goal is to fill the vacant seat before the September board meeting.” Schulte said he feels like his time on the board ended too abruptly and without having accomplished what he wanted to in terms of industry success. “When I think back on all the work that I put in, it was almost like a part-time job,” he said. “That’s 2,000 hours of my time I just pissed away. It’s a little disheartening.” Board member Brandon Emmett of Fairbanks, who has applied for a cannabis production license, said he does not know why Schulte was removed and hopes his replacement continues Schulte’s work. “Mr. Schulte is an ardent advocate for the marijuana industry,” said Emmett. “I admired his zeal for staying true to the voter initiative timelines and assuring the industry was fairly represented. I can only speculate as to the reason for his removal, but would hope Walker sees fit to insert a strong, responsible voice in his place.” Schulte served as the board’s chair and a designated industry representative seat from its 2015 inception through the June 9 meeting, during which he was replaced with Mlynarik by a board vote of 3-2, with himself and Emmett voting against.  Schulte said he believes his removal is an attempt to dilute direct industry representation on the board by installing a non-industry member to replace him, leaving only Emmett as an industry representative. According to HB 123, which established the Marijuana Control Board and was signed into law by the governor on May 12, 2015, the governor must appoint “one person from the public safety sector; one person from the public health sector; one person currently residing in a rural area; one person actively engaged in the marijuana industry; and one person who is either from the general public or actively engaged in the marijuana industry.” Schulte’s removal has opened a spot for another industry seat, but the governor’s Boards and Commissions office posted a notice for a replacement for an “industry/public board representative.” This designation is not in line with statutory designations that Schulte and Emmett filled. According to Schulte, “I was industry, Brandon Emmett is industry/public.” Emmett confirmed that he is the board’s industry/public member. When Walker announced the board’s makeup in 2015, his press release made no distinction. “Appointed to the two industry seats are Bruce Schulte from Anchorage and Brandon Emmett from Fairbanks. Per HB 123, the Governor needs to select two people for the initial appointments to the Marijuana Control Board with experience in the marijuana industry. This experience can be obtained through lawful participation in the marijuana industry or participation in an academic or advocacy role relating to the marijuana industry.” By way of explanation as to why a vacant industry seat is being advertised as an industry/public seat, Jang wrote, “At the time of the initial appointment of the board, we were required to seat two industry members. But after March of this year, one of the industry seats became flexible, so that either an industry or public member could fill it.” Schulte said he views his removal as evidence of industry antagonism by Walker’s administration. “I have witnessed some highly questionable behavior on the part of several in this administration and I can only assume from my own dismissal that Gov. Walker condones that questionable behavior, and that is truly shameful,” said Schulte. “I believe there is another agenda at work here — and it is definitely not what the voters asked for. The appearance of transparency is, in my opinion, a thinly-veiled façade intended to obscure the fact that they have no real intention of letting a lawful marijuana industry get started in Alaska.” Schulte said plans to remove both him and Emmett from the board have been in the works for months. “John Hozey himself did confirm to me that Franklin was trying to keep (Emmett) from being reappointed because she felt that it would weaken the industry’s position on the board,” said Schulte. As to anti-cannabis forces, Springer thinks the Legislature, if anything, should cause concern, rather than Walker. “I don’t think I’m being naive in saying I don’t believe the administration from the governor on down is trying to make an effort to put the kibosh on the industry,” said Springer. “Compared to trying to get a wildlife photographer on the Board of Game…people think we have problems?” Springer was referring to Guy Trimmingham of Hope, who was shot down by the Legislature 46-12 in April for a seat on the Alaska Board of Game based largely on his support for nonconsumptive uses of game such as wildlife photography. The board reviewed a regulatory addition in July that would have prepared for a four-member board. At the MCB’s July 7 meeting in Fairbanks, a regulation was advanced to the board that would have given the executive director Franklin the ability to cast a tie-breaking vote in the event of a board tie. Some of the Marijuana Control Board’s five members, who frequently cast 3-2 votes, voted against the measure and it was struck from regulation proposal language. If a vote is tied at 2-2, any license or matter before the board would fail. Schulte took the position of board chair at the expense of his position as president of the Alaska Marijuana Industry Association. He said he does not know whether or not he will return to the association. Though the board’s former industry representative, Schulte has not yet submitted a license proposal for the retail business he’d been planning to open in Anchorage. “I’m reevaluating my entire involvement with marijuana right now,” he said. “I’m fairly certain I’m not going to have the marijuana business I envisioned. I don’t think there’s a hope in hell I’m going to get a license here in the state.” The removal comes shortly after the public knowledge that Mlynarik, the Soldotna Chief of Police, is a registered signature gatherer for a petition that would put a commercial cannabis ban ballot initiative onto the Kenai Peninsula Borough ticket in October. Mlynarik has insisted that his personal involvement with the petition should not concern the industry, as his personal opinion and board behavior are separate issues. He said his voting record on license approval beginning June 9 should speak for itself, as he has voted in favor of each license. The situation, Schulte said, has soured him on the industry’s prospects for success. “If I were just any guy, thinking I want to start a marijuana business, I would tell that guy, ‘don’t spend a lot of money on it right now. You may be in for a really rude awakening.’”   DJ Summers can be reached at [email protected]

Ninilchik subsistence gillnet is in the Kenai River

Editor's note: this story has been updated from the original version with the latest Kenai River king salmon counts as of Aug. 1. A year and half after it was first approved, the Ninilchik Traditional Council has been allowed to set its subsistence sockeye gillnet in the Kenai River in 2016. On July 27, the Federal Subsistence Board approved a special action request from the NTC that asked for the subsistence gillnet’s operational plan be approved. Over the conservation concerns of the public, U.S. Fish and Wildlife Service and the Bureau of Land Management, the board approved the request 6-2. “This successful outcome underscores years of efforts by the Tribe to operate this fishery,” said NTC in a statement. The U.S. Fish and Wildlife Service permit allows the Ninilchik Traditional Council to harvest up to 2,000 sockeye, 50 king salmon, 100 Dolly Varden and 50 rainbow trout. The net can be in the water through Aug. 15 or until 50 kings are caught. In its statement, NTC said this year’s improved king salmon runs should allay any worries that the gillnet will damage chinook stocks or take sockeye from commercial fishermen. There are plenty of fish to go around, it said, and the community gillnet harvests a negligible amount. “Over 5,000 Chinook salmon have been harvested so far in the 2016 Kenai sport fisheries,” NTC said in its statement. “NTC’s allowed harvest of 50 chinook is 1 percent of this harvest. The tribe’s 2016 harvest limit for 2,000 sockeye is far less that 1 percent of the total Kenai harvest. NTC’s fishery is carefully structured to be conservative and precautionary while catching salmon that are vital to its subsistence way of life.” As of Aug. 1, the Kenai River king salmon have returned with more vigor than the previous years, though strong numbers in July slowed toward the end of the month. The Alaska Department of Fish and Game has counted 17,215 kings having escaped past sonar, 400 more than the same time last year and 6,000 and 4,000 more than that of 2014 and 2013, respectively. This meets the lower end of the escapement goal of 15,000 to 30,000. ADFG commissioner Sam Cotten said he worries about potential impacts for the fish, fishermen and the federal board itself. ADFG has voiced concerns repeatedly about the gillnet. “It just adds one more controversy in the mix,” said Cotten. “It’s a one year deal, relatively small number of fish, but it adds a wrinkle of controversy.” After July 31, Kenai River management switches to escapement based from in river run total-based. If this amount does not pass 22,500 king salmon, the commercial sockeye fishery endures more restrictions. Cotten said 50 fish are unlikely to make the difference, but fears it all the same. Further, that the Federal Subsistence Board overrode the federal agency that manages the fishery in question unsettles Cotten. “I remain confused about who should be making these calls on the behalf of the U.S. government in these decisions,” said Cotten. “I felt like USFWS should be given some deference when it’s the exact conservation unit they manage, and they weren’t given any at all.” Local voices, which have been largely against to the idea since its inception, remain concerned about the health of king salmon stocks. Tim Cashman, a member of the Soldotna city council and angler guide operating from Homer, said the tribe’s net remains a bad idea. “I’ve yet to find anybody in favor,” said Cashman. “I do know the importance of a fishery that’s barely hanging on and barely making minimum escapement, to have these fish that have beaten all odds to get to spawning grounds. They beat the commercial nets, they beat sport fishermen, they beat the guides and they beat Mother Nature. And they’re being yarded out by a group that lives 50 miles away from us. If the people who manage our fishery are telling us this is a bad idea, it’s a bad idea.” The approval comes after a lengthy and heated battle involving hundreds of letters from the public asking the board to reconsider the gillnet, accusations of wrongdoing against U.S. Fish and Wildlife Service managers, earlier special action requests, a lawsuit brought by the council against the Secretaries of the Interior and Agriculture and opposition from neighboring subsistence communities. In January 2015, the Federal Subsistence Board voted 4-3 in favor of NTC’s proposal to hold a community subsistence gillnet for the Kasilof and Kenai rivers. State and federal biologists advised against the action at the time. They claimed a subsistence gillnet, even if targeted for sockeye salmon, could endanger returns of king salmon, which had been on the downswing statewide since the beginning of the decade. Within months, more than 700 requests for reconsideration flooded the Office of Subsistence Management asking the federal board to overturn its decision to let a subsistence gillnet into the state’s most heavily used and heavily politicized river. Several legislators submitted letters of their own, including Anchorage’s Rep. Les Gara and Sen. Bill Wielechowski. The U.S. Fish and Wildlife Service manages the Kenai Wildlife Refuge, which is the federal land on which the Ninilchik Traditional Council proposed it put its gillnet. The USFWS was one of the parties represented on the Federal Subsistence Board that voted against approving the gillnet. The proposal required that the USFWS manager Jeff Anderson approve an operation plan before NTC be allowed to actually put the net into the water. Though he approved the operational plan for the Kasilof River during the 2015 sockeye season, he denied the Kenai River plan. NTC leadership was outraged and filed a special action request with the Federal Subsistence Board to force Anderson to approve the operational plan, similar to the one approved in 2016. On July 29, 2015, the board denied the request, backing up the USFWS decision. Ninilchik Tribal elder and Council President Greg Encelewski spared no venom describing how the council feels about Anderson’s management of the Kenai River gillnet. “It’s absolutely ludicrous,” Encelewski said at the time. “It’s shameful and we’re disgusted.” In response, the council filed a lawsuit against the board and secretaries of Agriculture Tom Vilsack and Interior Sally Jewell. Others jumped into the fray as time rolled on. In April 2016, The Cooper Landing and Hope Federal Subsistence Community filed a proposal change in the 2017-2019 Federal Subsistence Board proposal book that would eliminate Ninilchik Traditional Council’s gillnet. The gillnet, the Cooper Landing and Hope filers said, has a direct impact on them. Cooper Landing subsistence users are upriver of NTC and fish with dipnets. “We maintain firmly that the Federal Subsistence Board’s approval, which allows Ninilchik to place a community gillnet in the Kenai River, aggrieves the federal subsistence priority and right of Cooper Landing and Hope subsistence users,” the proposal stated. NTC filed its latest special action request while a judge was considering an injunction that would have forced USFWS to approve the net. NTC’s attorney, Sky Starkey, said the group plans to continue its lawsuit against USFWS. “We’re still weighing how to proceed,” said Starkey. “We believe that the FWS violated the subsistence priority of NTC in 2015. This fishery was actually supposed to start on June 15. That would have allowed NTC to get the bulk of the sockeye run. “What NTC wants is just whatever help the court might provide so that we don’t end up in the same situation next year.”  

Marijuana board chair gathers signatures for borough ban

The recently elected chairman of Marijuana Control Board, Peter Mlynarik, is a registered signature gatherer for a Kenai Peninsula Borough petition that would put a commercial cannabis prohibition ballot initiative onto the borough’s 2016 ballot. Ballot Measure 2, which legalized commercial cannabis statewide in 2014, allows for local governments to submit their own controls on cannabis, including ballot initiatives that ban commercial activity. Several localities including the Mat-Su Borough, Wasilla and Palmer have already opted out. The borough ban, like that of the Mat-Su Borough, would only apply to unincorporated areas. Those cities that already have their own laws, like Kenai, would still have legal commercial cannabis.  Mlynarik and the board’s legal counsel said Mlynarik’s involvement with the borough initiative is simply a private exercise of citizenship, while others think it crosses a line. Mlynarik, who serves as the Soldotna Chief of Police, where commericial cannabis is banned, said he doesn’t feel his involvement as a signature gatherer should color his board chairmanship any differently than in the past. His actions as a private citizen, he said, should be viewed in context. “I think the main thing is to look on my roll and how I voted,” said Mlynarik. “I’m not always the most conservative vote on the board. All the licenses went through. I’m not trying to hold anything up.” Despite his chairmanship, he said, he still has personal concerns about young people's cannabis usage in his home borough. “My particular concern about the youth,” he said. “That’s always in the back of my mind. As a borough citizen, it was my concern that the people at least have a right to vote on it.” Mlynarik was elected as chair during the board’s June 9 meeting, replacing Bruce Schulte, one of two designated cannabis industry representatives on the board, sparking some industry fear that the board’s policies and regulations could change. The record supports Mlynarik’s claim that he has supported license issuance since the board began approving licenses on June 9, which another board member said is the most important part of the situation. The fact that Mlynarik gathers signatures for a citizen’s initiative “don’t mean (expletive deleted),” according to Mark Springer, a board member. “It’s a local government issue," said Springer. “He can do whatever he wants. He has voted to approve every license that’s been approved. He hasn’t expressed a deep prejudice against the licensing process. He’s not the sponsor of the petition. At the higher level, we’re issuing licenses. We’ve had Kenai (Peninsula Borough) applications. He voted yes on them too.” Other board members from the industry don’t like the development, saying a member should respect the duty of the board to encourage, not prohibit, the industry. “Although it’s legal to do this, it seems somewhat poor spirited to be in the position of highest authority on the board and also be attempting to end the industry for significant portions of the state,” said Brandon Emmett, an industry seat on the board. “It’s disheartening. I was very surprised.” Mlynarik consulted Harriet Milks, the board’s legal counsel, before gathering signatures. Milks said board members are within their rights to engage in local politics that involve the subject of their respective boards, and that she doesn’t think there is any legal issue with Mlynarik’s doing so. “I think it’s perfectly fine,” said Milks. “We are a representative democracy. We don’t expect our board members to check their opinions at the door when they enter. Participating in the election process is something we’re all for.” Cases of conflict of interest, Milks explained, are outlined in the Alaska Executive Branch Ethics Act. She said in the case of the Marijuana Control Board, behavior away from the board is irrelevant unless the board member has something to personally gain from an issue on which the board is taking action. “That act gets down to undue influence as a public official,” said Milks. “If we wanted people to have completely blank minds, we wouldn’t have people, we’d have a computer. We don’t want people to have their votes be bought or to have a sway in influence.” Milks and Mlynarik both compare signature gathering for the initiative to industry members Schulte and Emmett, saying his involvement with the petition shouldn’t be any more concern than their pro-industry actions are as they develop their own respective cannabis businesses. “It’s just as appropriate to do that as it is for a member of industry to do industry related things when they’re away from the board,” Mlynarik said. “And they stand to benefit. There is a monetary gain there. For me, there isn’t one. I’m not making any money from this.” Emmett does make a distinction, saying board members’ personal actions should not undermine the mission. “I think the MCB was formed to implement a regulated industry,” he said. “The overall perception is that marijuana is legal, and we need to implement it responsibly. Even though there are some diverse viewpoints, I feel that when he took the job as a regulator for the industry, it’s responsible implementation he should have in mind.”   DJ Summers can be reached at [email protected]    

Blood Bank CEO: export contract about inventory control, not financial gain

Editor’s note (Aug. 10, 2 p.m.): The Blood Bank of Alaska is disputing the description of O negative blood inventory provided by Karen Lakey of Alaska Regional Hospital in this story. The Blood Bank of Alaska chose not to refute Lakey’s statements on the record prior to publication, but after publication did provide information to the Journal indicating that hospitals around the state have been fully stocked with O negative blood since it entered an export contract on May 1. However, CEO Bob Scanlon did say in a follow-up meeting with the Journal that a situation such as Lakey described could have been the case at least temporarily regarding the available inventory at the Blood Bank of Alaska in Anchorage depending on the amount of blood that was awaiting clearance after testing. Lakey did not respond immeidately to requests from the Journal for clarification of her comments. In a statement to the Journal, the Blood Bank of Alaska said, “Blood Bank of Alaska is committed to supporting our partner hospitals and providing a safe, pure and potent supply for their use. We continue to work each and every day to ensure that every unit of blood that is collected in the state is used by a patient in need. At no time this summer has there been more type O negative blood in California that was collected by our organization.”  The Journal made contact with Lakey on Aug. 10. Lakey said she misspoke and was referring to the number of O negative units Alaska Regional Hospital had on hand rather than only five available tested O negative units statewide. "I get very impassioned sometimes about things, and brain goes faster than tongue can work and things come out slightly backwards." In early summer, California blood banks had more Alaskan O negative blood than Anchorage. After moving into its $45.7 million, 57,000 square foot building earlier this year, the Blood Bank of Alaska entered an agreement with LifeStream, a California blood center, to sell 100 pints of blood per week, all the while ramping up recruitment for more donors in the face of sporadic statewide shortages. The building was funded with $32.8 million from the state capital budget, an $8.5 million loan from the Alaska Industrial Development and Export Authority, and a $3 million donation from ConocoPhillips. As recently as mid-June, Alaska had only five units of O negative blood across the state, according to Karen Lakey, Alaska Regional Hospital’s lab director. She said the hospital had no reserves, and nothing but a hope and prayer. “We don’t have the room to store a lot,” Lakey said. “The Blood Bank of Alaska was calling on partners in the Lower 48, and they were experiencing shortages as well. We were crossing our fingers that we didn’t have anything catastrophic happen. It’s really scary.” The situation is not uncommon, according to both Lakey and the Blood Bank of Alaska. “That has happened a couple of times this summer,” said Lakey. “That’s not unusual. A couple times a year there’s a perfect storm where hospitals all over the state are experiencing odd things happening.” Throughout the summer, the bank has asked Alaskans to step up donations through advertisements on local television channels including a Fox 4 news spot from June. “According to the Blood Bank of Alaska, an increase in local area traumas has caused a critical need for all blood types,” read a July 14 article on YourAlaskaLink. “They say there is a particular need for blood donors with type O negative, the universal donor.” Bob Scanlon, who has been the Blood Bank of Alaska’s CEO since 2012, said the export agreement makes money, but only for the increased costs of recruiting more donors and drawing their blood.  “If I had to do this again, I would sign the contract again. It’s the responsible thing to do,” said Scanlon. “What we did is indicative of what any blood center would do in the strategy of how to pursue proper management of the blood supply.” Type O negative and export agreements The Blood Bank of Alaska is shipping blood to a California blood center, LifeStream, which has centers in San Bernardino, Riverside, Ontario, High Desert and La Quinta. According to Scanlon, the contract began May 1 and ends in September.  LifeStream purchases 100 units of blood from BBA per week, to be delivered from Alaska to California.  In the last four years since Scanlon took over as CEO, BBA has not had any export agreements, though Scanlon notes that there have been such agreements in the past. “There have been other export contracts in the history of the blood bank,” said Scanlon. “This is very, very routine and very, very normal.” Blood centers treat the price of blood as proprietary business information and do not reveal prices. In 2014, ABC News reported that the national average price per pint of blood was between $130 and $150, though costs are known to vary widely across the nation. LifeStream’s CEO, medical director and president Dr. Frederick Axelrod said these types of agreements are common for blood centers in urban areas like New York City, Los Angeles, Washington, D.C., or San Francisco, where the need for blood outweighs the local supply. Apart from BBA, LifeStream buys blood from three other blood centers in less densely populated areas like Denver, Minneapolis, or Idaho, where donors are more plentiful in comparison with the demand. Because blood has a shelf life of 42 days, Axelrod said these purchase agreements can benefit the selling party. “This really ensures that the BBA almost has no expiration of the product given by Alaska donors,” he said. Scanlon gives the same explanation. Because blood expires, BBA has to manage inventory carefully and uses a statewide inventory rotation system much like a grocery store dairy fridge rotation following FIFO, an industry jargon for “first in, first out.” The Anchorage facility circulates a mix of blood types to hospitals. To rural health centers, it delivers only universal donor O negative blood. Rural hospitals don’t always use their blood, however. When supplies near their expiration date, BBA asks them to send their blood back to the center. LifeStream buys this blood, which Scanlon calls a win-win situation. “The hospitals don’t necessarily want these because they’re fully stocked,” said Scanlon. “It makes sure that that gift is used responsibly. And it ensures we can recoup some of the costs we took on when we ramped up our collections. Even though we didn’t use it, we still took on the cost of recruiting donors, processing. We are able to recoup some of our cost, which means the blood supply here can remain at less cost.” Shortages Lakey of Alaska Regional said she has not sensed any rise in trauma injuries this summer, while BBA and Providence Medical Center say they have seen evidence.  Alaska hospitals typically see increases in injuries during summer months, according to Mikal Canfield, director of communications for Providence Medical Center. This year there have been more injuries than the year before, but Canfield said that does not necessarily correspond to an increased need for blood. “We have seen an 8.5 percent increase in traumas from January through June over last year,” said Canfield. “Important caveat: a person who’s a trauma patient isn’t always who will require blood. Hip injuries, broken bones, they’re all considered trauma patients. The increase doesn’t necessarily mean they require blood.” Regarding instances of blood shortages for hospitals, Canfield issued a separate statement. “Some of the information you requested is included as part of Providence’s contract with the Blood Bank of Alaska and so is proprietary information,” reads the statement. “What we can say is the Blood Bank of Alaska and Providence Alaska Medical Center have an excellent relationship and collaborate to meet the needs of our patients. “Providence regularly communicates with the Blood Bank of Alaska, informing them of product needs or increased usage. Blood Bank of Alaska maintains inventory to ensure Providence patients receive the lifesaving blood they need.” Both in the state and nationally, blood centers and hospitals are short on type O negative blood, the “universal donor” type in highest demand by medical centers across the country. Anyone can use O negative blood, but O negative blood type patients can only receive blood from another O negative donor. AB positive blood, in contrast, is the “universal recipient” blood type.  As part of the 100-unit per week agreement with LifeStream, BBA sells 12 units of O negative blood per week along with a mix of other blood types. An Alaska Industry Development and Export Authority loan application projected Alaska’s need at 25,000 units per year, or roughly 2,083 units per month, though Scanlon said the bank is revising that number. Combined with the 400 units per month now under contract with Lifestream, BBA must now collect about 2,483 per month. Scanlon said the typical monthly blood input is 2,300 to 2,400 units, or about 92 percent to 96 percent of its total need for the projected state supply and its contract. In short, the BBA must take in about 19.2 percent above the total projected need for Alaskans to meet its contract with Lifestream. Scanlon would not release any documents to the Journal to support the estimate of monthly donations, claiming both proprietary and confidential information. “We just don’t release that kind of information,” he said. Scanlon said the agreement does allow for BBA to withhold portions of its delivery if needed. However, the bank does have to make up the difference in later deliveries to account for an overall 100 unit per week total. “It’s only when there’s not a use for that blood that we export it,” said Scanlon. “There are times where we’ve shipped out less than the 100 units to LifeStream because there was usage. Then in later weeks there isn’t so much usage and we can ship out the surplus rather than having to throw it away.” New building and AIDEA loan BBA’s export contract with LifeStream coincides with the bank’s move to a new building and the attached costs. The Blood Bank of Alaska has received more than $47 million in grants and loans from the state and corporations for the construction of a new facility on Airport Heights Drive near Alaska Regional Hospital. Between 2008-2014, the State of Alaska granted $32.8 million to the Blood Bank for the facility’s construction. The Alaska Industrial Development and Export Authority, or AIDEA, awarded another $8.5 million to BBA after “anticipated funding source not materializing,” according to BBA’s loan application referring to state funding that was denied. Former Gov. Sean Parnell used his line item veto to reduce proposed capital budget appropriations for the BBA building by a total of $10.8 million over two of the five fiscal years it was funded. ConocoPhillips gave BBA $3 million in grants to be paid out over a period of years ending in 2017. After a recent $300,000 grant from the M.J. Murdock Charitable Trust, Scanlon said the loan is down to $8.2 million. According to the AIDEA loan numbers, the monthly interest-only payment was as high as $46,000 recently, but lowered after having the $300,000 Murdock grant applied to the principal. “We are in the process of paying on that interest,” said Scanlon. “It comes to around $40,000.” Once they sell the old building and receive the rest of the scheduled ConocoPhillips payments, Scanlon said the outstanding loan balance will go down to $3 million. “We have another grant in the wings. All of that is capital that we’ll receive,” Scanlon said. The old building has been on the market for several years and does not yet have a buyer. Scanlon said he has “several interested parties.” Certain cash-making operations are also not yet up and running. In its loan application to AIDEA, the Blood Bank said it would establish a donor testing facility in the new building as a revenue generator. BBA currently has to ship samples of its blood to Minneapolis for testing, leaving a two-day testing lag from the time of initial donation. With an in-house facility, the bank could test its own blood as well as host other tests for hire. “The donor-testing lab would open up new sources of revenue for BBA by potentially serving blood banks in Hawaii and the Pacific Rim countries,” according to a whitepaper presented by the Blood Bank of Alaska in 2016. “Testing services for one additional blood bank would create annual revenue in the amount of approximately $700,000-$1,000,000.” The Blood Bank has not yet bought this equipment nor begun hiring staff for its management. Scanlon said the state donor testing facilities are in the works, and that they were not a deciding factor for any of the grants or loans BBA received. “That was not the intent from the very beginning,” Scanlon said. “When we went to the Legislature we explained that to them. The building facilitates us having our own donor testing facility in house. We’ve already had discussions on that. “We’ve also met with industry. We’ve pretty much decided on the first platform we will purchase in order to facilitate being an in-house testing facility. The effort kicks off in November. We’re very rapidly moving to bringing the donor testing and getting it up and running. From start to finish, anywhere from a year and half to two years to get that up and running.” Need for a new building BBA had appealed for the new building for the better part of a decade, both as a contingency against emergencies and as a release valve for ever-tightening federal regulations. According to U.S. Food and Drug Administration records, some regulations seemed particularly problematic in the old building. Workflow in the old building was cramped, and blood often crossed paths of possession in designated zones. The new building is more in line with FDA regulations. “It’s up to FDA specs,” said Scanlon. “They’ve been here, they were happy with it. The staff are happy. The most important thing is that it makes it more efficient. We’re not having to layer work effort over each other. We no longer have four locations spread out among town. We have to have an orderly progression and orderly handoffs.” In the past decade, Alaska’s only blood bank received a relatively greater number of Food and Drug Administration citations than the rest of the state’s medical institutions, with a higher average citation rate than other blood and tissue centers in its FDA industry category, including 10 from the 2015 inspection. Last year’s citations are largely procedural, and range from failing to fix a printing system malfunction to technicians performing multiple blood tests using techniques they’d previously failed to qualify for in proficiency tests. Blood Bank of Alaska representatives said the violations were mostly due to documentation flubs or in some cases regulations clashing with the old building’s design. Ashere Chait, a media representative for the blood bank, said the violations are neither severe nor indicative of a recurring pattern of negligence or malpractice, and that the spike in the 2015 citation rate comes from BBA using a new tracking system for its blood components. “Every citation is a big deal,” said Chait. “But in the time I’ve been here I don’t think we’ve ever had what could be considered a serious violation. In 2015, we switched our operating system that fuels everything we do from collections to tracking our blood from the source through all the steps along the way. With that there were many process changes from BBA. That had bearing on some of the documentation issues.” Some violations directly related to BBA’s appeal for a new building. BBA’s old building was constructed prior to the 1980s AIDS outbreak when FDA regulations for blood management changed. Over the years it underwent four renovations to keep up. Scanlon said certain violations would have been entirely eliminated in a new building where the floor plans follow a “figure eight” flow design to avoid blood being crossing too many areas after being taken. “It’s really hard to reorient without the space,” said Scanlon during a tour of the new building while it was still under construction in 2015. “Technology has a square footage. The building we’re currently in just does not make the grade.” By Scanlon’s admission, the new building will not lower healthcare costs for Alaskans. Fiscal savings aren’t the point as much as ensuring up-to-date, earthquake proof building, he said. DJ Summers can be reached at [email protected]  

Alaska Communications opens showroom for business services

New business plans need new faces. Alaska Communications is in the midst of a rebranding, and the Business Technology Center will serve as the playground for Alaskans looking to familiarize themselves with the new focus on business services. The building, located at the company’s former wireless store at 600 E. 36th Ave. in Anchorage, serves as a showroom for interested businesses and nonprofits, as well as a conference and co-working center in the vein of the BP Energy Center or The Boardroom in Downtown Anchorage. Companies can book appointments online to either talk with representatives about managed IT services or to host a conference or work session. Alaska Communications does not charge for the use of its facilities or pitch those companies who use the space, hoping rather to draw attention to what it has to offer. “If it’s a hook, it’s the softest set imaginable,” said Chris Reaburn, vice president of managed services. Alaska Communications Systems Group Inc. left the state wireless market after selling their share of the Alaska Wireless Network infrastructure and their subscriber base to General Communications Inc. in 2014 for $300 million. The company’s debt fell drastically as a result. From a high of $425 million in 2014, the company’s debt dropped to $159 million in the first quarter of 2016. Revenue has fallen since the sale closed, but is expected to stabilize as the company grows into its new focus in broadband and managed IT services. It has so far partnered with various medical organizations, municipalities, schools, and North Slope oil supplier for broadband management. Part of the new direction means providing a space where Alaska Communications customers and non-customers can familiarize themselves with what the company has to offer in terms of tech solutions for businesses. “It’s intended to be immersive,” said Reaburn. “Customers can come here and use the technologies, have us demonstrate the technology, and increasingly, come in and use the technology on their own as a meeting space, a collaboration space, a space where they can engage their own stakeholder groups.” Transitioning from a wireless company to one focused on business IT services helped pay down Alaska Communications debt, but the change does present some marketing hurdles. Consumer-driven wireless is visible and understandable with a physical object — the almighty cell phone — to which the business can anchor itself in customer minds. Managed IT services are a more nebulous concept without any physical service as easily understood as a cell phone. The new center gives Alaska Communications to have something touchable and seeable in its marketing strategies. “It’s no secret this used to be our flagship wireless store,” said Reaburn. “This represents the physical evidence of what our transformations look like. We operated a significant wireless business. Part of going into a space people may not as familiar with associating us with is a physical space. This is one of the points of physical evidence we can point to.” The center blends co-working space, demo room, and conference center. Six glass-walled rooms dominated by high definition flat screens border a central space complete with kitchen additions for catering purposes. Rooms vary in size from more intimate small group arrangements to larger rooms capable of hosting 25-30 people. One of the glass terrariums holds a server to demonstrate where Alaska Communications can host company networks. The repurposed building has been open since June 9. So far, the last two months have proven successful. “It’s been more successful that we would have thought it would be,” said Reaburn. “From a pure marketing standpoint, are we getting eyeballs? From that perspective, the traffic has been very good. People are using it for what we intended. From the standpoint of demonstrating tech, it’s been very useful.” Alaska Communications uses powerhouse names in Lower 48 tech spheres to focus on business mobility and productivity. It has partnerships and licenses to use Microsoft software, Checkpoint, HP, and Dell. More and more, Alaska businesses and non-profits want employees to have the ability to collaborate from separate locations in real time, or to have the same capability offsite as when in the office. The goal, Reaburn said, is to become a locus for tech solutions that Lower 48 businesses have to fill those demands. “That’s ultimately what we’re trying to be in this space,” said Reaburn. “If we can be the local presence to the best in class IT providers, and show how local Alaska business can get the same stuff people are used to getting in the Lower 48, the same quality…That’s objective of the center, to showcase what that technology looks like and how they can be using it as they would be in a center that’s more used to having ready access to technology.”  DJ Summers can be reached at [email protected]  

GCI partners with Red Dog Mine for broadband connectivity

The charge to bring Netflix to the Alaskan Bush continues. General Communications Inc. has entered a contract to supply high-speed broadband to Red Dog Operations, one of the world’s largest zinc producers, which will enable it to do the same for Noatak, a neighboring village. The partnership highlights the interplay in rural Alaska among telecommunications companies, large-scale industrial operations, federally supported municipal services and residents in securing broadband connections. “It really comes down to the anchor tenants,” said Chris Martin, GCI’s senior vice president of business services. “If you build to the anchor tenants you open up the region to connectivity.” Mine representatives praised the partnership as one of the benefits it brings the region not only in revenue and employment but also telecommunications access. “This partnership will help connect many more Northwest Arctic residents with important online services, while also providing business benefits to Teck Red Dog Operations and mine employees,” said Henri Letient, General Manager of Teck Red Dog Operations, in a release. “Bringing high-speed internet connection to Noatak is a strong example of the local benefits generated by Red Dog, and of our commitment to helping support local residents and communities.”
 
 The Red Dog contract is the latest in a push from GCI to expand operations into remote and underserved areas. In June, GCI announced plans to expand its TERRA network to include Buckland, Kiana, Noorvik, Selawik, Koyuk, Elim, Golovin, White Mountain, Stebbins and St. Michael into the service in 2016. The TERRA network, which lays terrestrial broadband and microwave towers across Southwestern, Western and Northwestern Alaska, already includes 72 locations. The total number of rural locations under GCI coverage will grow to 84 after the additions to Red Dog and Noatak are completed, scheduled for 2017. For remote industrial operations, technology comes slowly. Development costs are prohibitively expensive. Martin Cary, GCI’s senior vice president of business services, said broadband opens up possibilities to speed up the existing computer applications by centralizing the operation’s server. “They’re on satellite today,” said Cary. “Clearly when you’re on satellite, your computer applications work a lot slower. They could take advantage of cloud-hosted applications much more effectively.” For Red Dog’s 450 employees, the connection can make the job more palatable. Most employees work multi-week shifts at the mine. A broadband connection means access to daily chores like mobile banking access, as well as the ability to digitally connect with friends and family or access digital entertainment. Installing a new broadband connection requires GCI to place towers on nearby mountaintops in the western Brooks Range. The logistics demand capital — earlier interview estimated Western Alaska mountaintop towers at $2 million to $5 million apiece — can only be completed in a short window of time. “Any time you’re doing remote construction in Alaska its very expensive,” said Cary. “The cost of building foundations substantial enough to put a 200-foot tower is very high, and in order to put these buildings on top of these mountain, we have to bring in heavy lift helicopters. The cost of everything increases when you’re up as far north as Kotzebue. The further north we go, the shorter the construction season.” These expansions bring broadband to villages, but the numbers don’t pencil out for GCI to add towers for the region’s residents directly. Noatak, which has a population of 514 people as of the 2010 census, cannot hope to bring enough capital from consumer broadband or wireless connections to recoup the costs of installation and operation. Rather, GCI’s coverage for Alaska’s rural residents starts with high-paying anchor tenants. Industrial operations like Red Dog, along with school, hospitals and municipalities bring in telecommunications expansions that then bleed into the general population. GCI already has operating contracts with the Northwest Arctic Borough School District, Norton Sound Health Corp., and Maniilaq Association, an Alaska Native health and social services organization. The broadband creates a loop of benefits, not only making operations easier for the mine but easing recruitment for hard-to-fill positions in healthcare and education. Schools in particular, Martin said, have an easier time filling educator spots when they have improved options for both digital learning and personal communications. “From the feedback we’ve talked about from superintendents, it’s a real recruiting benefit,” said Martin. “Superintendents have made it very clear, if they can’t answer the question clearly that they have good internet connection, their response rate isn’t very good.” Rural districts have federal opportunities to secure higher broadband connectivity. Anchor tenants like schools and hospitals provide broadband for the schools and a federal dollars for telecommunications providers. The Federal Communications Commission grants for categories of subsidy for telecommunications purposes. The E-rate program, begun in 1997, provides schools with the funds to secure internet connection. The Rural Health Care program secures similar federal funds to provide connection to medical centers; the program will cover the difference in connection costs to that of the nearest urban area. The Lifeline programs provides subscribers a discount on monthly telephone service from participating providers like GCI. The Connect America Fund subsidizes telecommunications carriers to bring service to rural and high-cost areas. DJ Summers can be reached at [email protected]

More opportunity on Kenai in ‘16, but setnetters still wary

Hope and fear both spring eternal on the Kenai River. This year marks a turning point from the abysmal king salmon returns beginning that led to a total closure and federal disaster declaration in 2012. Commercial sockeye fishermen are reaping the rewards in regular commercial openings alongside freshly baited hooks for the king salmon sport fishery. Still, the threat of paired restrictions hangs without a clearly defined mark of success to ease tensions. In times of relative plenty, like 2016, East Side setnetters still feel a cloud over them, said Pat Shields, the area commercial fishery manager for the Alaska Department of Fish and Game.  Nearly 12,000 kings escaped past the Kenai River sonar counter by July 18, nearly double the most recent three-year average of 6,882. With 3,850 kings harvested in the commercial fishery and 3,450 in the sport fishery, the total king run clocks just less than 20,000 salmon as of July 19. More than 574,000 sockeye have escaped past the Kenai sonar as of July 19, also more than twice the number of last year by the same date and 90,000 more than the most recent three-year average. Though “highly unlikely,” according to Shields, ADFG could still end up forecasting a total king salmon escapement of less than 22,500, which could trigger commercial restrictions in August. If the sockeye run is late, as in 2015 — and Shields anticipates it will be — the August restrictions could mean a lot of dollars left in the water. Shields said the commercial fleet still frets with concern due to the August portion of the paired restrictions that call for reduced fishing time if the escapement is projected to be less than 22,500 kings. “The part of the paired restriction plan when you get into August has caused the East Side setnet fishery the most heartburn,” he said. The setnetters largely feel a commercial restriction in August is “an unfair burden they have to shoulder” due to the switch from total run to escapement. By that point, the sport fishery has already closed. “That’s the biggest concern now,” he said. “People always are always asking, ‘Are we alright? Are we going to have more than 22,500?’ Spreading the pain Kenai River paired restrictions came from the 2014 Upper Cook Inlet finfish meeting of the Alaska Board of Fisheries. The meeting was the area’s first since a series of poor king salmon runs culminated by the total shutdown in 2012. Reasons for the decline are still unclear to ADFG biologists but likely involve marine survival conditions. Conservation was a paramount concern at the time and sport and commercial fisheries between 2012 and 2014 were packed with restrictions. In 2012, East Side setnetters had limited openings. The sport fishery in 2012 started with no bait, then opened for catch and release only July 10 before being closed entirely on July 20. In 2013, the sport fishery started with no bait, opening to catch and release only on July 25 and closing July 28. The paired restrictions pushed by the Kenai River Sportfishing Association and approved by the board in 2014, which also included the August restrictions, tie the commercial sockeye fishery to the king sport fishery. If ADFG forecasts an in-river run of fewer than 22,500 fish — the midpoint of the 15,000 to 30,000 escapement goal — it may limit the sport fishery to no bait or catch-and-release fishing and the East Side setnet fishery to 36 hours per week. If the in-river fishery is restricted to catch and release, setnetters have only one 12-hour period per week. Normally that fleet has two such 12-hour periods per week with more hours as needed. When the sport fishery closes on July 31, the plan changes. Instead of a total run size of 22,500, the plan tracks escapement numbers. If ADFG predicts an escapement of 16,500 to 22,500, setnetters may have only 36-hour weeks for the rest of the commercial sockeye season, which ends Aug. 15. If managers predict anything less than 16,500 for escapement, the commercial fleet cannot fish at all. In both 2014 and 2015, ADFG forecasted small enough chinook salmon returns for the East Side commercial sockeye restrictions to kick in. Fishermen concerned with millions in abandoned sockeye harvest accused ADFG managers of waiting too long to open the fishery in 2015. No other river system ties the sportfishing and commercial fishing restrictions to each other in regulation. Most rely on a system of emergency orders from either the Sport Fish or the Commercial divisions to keep the right balance. No measure of success Few agree on whether paired restrictions do what they are intended to. Other benchmarks for fisheries management plans can include productivity, harvest, or maximum sustainable yield.  Managers and fishermen do agree that paired restrictions aren’t tied to salmon productivity. Ricky Gease, executive director of guided angler industry group Kenai River Sportfishing Association, said increasing returns was never the goalpost. “Paired restrictions is not tied to productivity,” he said. “It’s to ensure shared burden of conservation.” Shields agreed that productivity isn’t the aim, but said escapement was the point, rather than conservation per se. “The intent of paired restrictions was to have a way to slow down both the in-river fishery and the East Side setnet fishery as much as possible,” Shields said. “The idea was, ‘let’s slow both the setnet fishery and the inriver fishery together to ensure the minimum escapement for king salmon would be met.’ That (existing escapement goal) 15,000-30,000 already takes into account production. “To the extent they helped ensure they made those goals, that’s about as far as we can go. They tie into getting to the numbers to maximize the yield. That said, this is Cook Inlet, and everybody has a different version of success,” he noted. Even if productivity could quantify paired restrictions’ success, managers could not trace this year’s run back to 2014 anyway.  Jason Pawluk, the acting ADFG sport fishing management biologist for the Kenai River, said the fishery is too complex to link returns to any single factor. “I don’t know if you could narrow it down to an effect,” said Pawluk. “You’ve got lots of variables. Runs around the state are all rebuilding this year, and there are no paired restrictions in those fisheries. I’m not sure you can draw that conclusion.” The late chinook run on the Kenai River usually follows a certain age structure. Younger fish come in first, followed by older fish as the run picks up strength. Most runs, according to Pawluk, have a fairly consistent age composition. “Looking historically, not including the poor years, you would say it’s approximately somewhere 56 percent four-ocean kings,” said Pawluk, referring to fish who have spent four seasons in the ocean before returning to spawn, typically a six-year-old salmon. Because these fish make up the bulk of the run, managers can’t trace the link between productivity and paired restrictions passed in 2014 until that brood year returns in 2020. “Given life history of kings, they stick to it pretty good,” said Pawluk. “The kings returning this year are from spawning events that occurred in 2009 to 2013.” Linked to restrictions or not, the 2016 kings have been kinder to fishermen than last year, but the 2015 season scares East Side setnetters. Last year, the late sockeye run collided with an ADFG escapement forecast of less than 22,500 king salmon. The Upper Cook Inlet salmon harvest dipped below average in 2015 at 3.1 million fish, 15 percent less than the most recent 10-year average of 3.7 million fish. Like other Alaska rivers, bar a few outliers like the Copper and Taku rivers, Kenai River king salmon seem to be rebounding. Pawluk said ADFG remains upbeat but careful. Kings may run strong now, but projections change. “We’re not ready to say it’s a great run,” he said. “When king runs start to rebound, it’s typical to under forecast. The projections should start to come down. But it looks like we’re starting to come out of this.” As to forecasting an escapement of 22,500 kings for the August commercial fishery, Shields responds with cautious optimism. “The answer is yes,” Shields said. DJ Summers can be reached at [email protected]  

With $55M in state aid, Premera files for 9.8% rate hike

Premera Blue Cross Blue Shield of Alaska filed its request for 2017 individual insurance rates on July 18, ending a two-year run of exorbitant increases but still costing the beleaguered state checkbook $55 million. Premera, the state’s sole remaining individual insurance provider, filed for an average rate increase of 9.8 percent on 6,800 individual metallic plans across the state. Statewide, Premera has 140,000 customers with the vast majority in group plans. The rate is a break from two straight years of leaping increases. Premera’s rates rose approximately 37 percent and 39 percent in 2015 and 2016, responding to a high-risk patient pool that lost the company $13 million since 2014. The comparatively palatable rate increase for 2017 comes from a bill passed by the Legislature in June and signed by Gov. Bill Walker on July 18. The bill established a reinsurance program, which subsidizes plans by spreading the cost around to other users. In this case the reinsurance plan, which will cost $55 million, draws proceeds from a statewide insurance premium tax. This tax of 2.7 percent per plan typically draws between $50 million and $60 million per year according to Lori Wing-Heier, director of the Division of Insurance. Premera praised the Legislature’s actions as having staved off a third year of rate increases and potentially the worst year yet. “Had the legislature not passed the reinsurance legislation to provide some relief to Alaskans, Premera’s 2017 rate increase request would have been more than 40 percent, based on medical claims data from 2015,” according to a Premera press release. The Legislature feared dedicating too much state revenue to a shifting situation, and installed a two-year sunset for the reinsurance program. The Legislature also used the opportunity to establish a working group dedicated to studying Alaska high medical costs. “The reinsurance program will sunset after two years, but we remain committed to working with legislators, the Division of Insurance and other stakeholders to find a longer term solution,” stated Premera. The state’s dwindling insurance provider ranks and spiking rates trace their roots to federal healthcare policy. Other states with Alaska’s geography and rural demographics have had similar outcomes. The Affordable Care Act, or ACA, forced insurers to accept high-risk patients for coverage. This drew high-risk patients away from the Alaska Comprehensive Health Insurance Association with lower cost, federally subsidized plans. When federal reimbursements for insurer losses came up short, insurance companies hemorrhaged money and have been forced to raise insurance rates to recoup losses or leave the state altogether. In two years, Alaska’s individual insurance market provider pool shrank from five providers to one. On May 1, Moda Health announced that it is leaving the Alaska individual market in 2017. Aetna, State Farm, and Assurant Health left Alaska’s individual insurance market in June 2015. Moda officials said the company could no longer operate in Alaska without a substantial increase in insurance premiums, which had already increased by 29 and 37 percent in 2015 and 2016, respectively. Rates have cooled for now, but it remains to be seen whether or not the reinsurance program will lure Alaska’s former providers back into the market. The two-year sunset doesn’t promise that subsidies will last long enough for the state to substantially lower healthcare costs for the high-risk users driving insurance prices.  

Yukon, Kuskokwim kings rebound, but not to historic levels

For two of the state’s largest king salmon runs — the Yukon and Kuskokwim rivers — conservative management is biting into commercial fisheries and in some cases the subsistence harvest itself. Kings are rebounding on the Yukon River. The Pilot Station sonar counter has tracked 171,678 kings by July 13, nearly 30,000 more than the same time last year and far greater than the most recent three-year average of 147,096. Summer chum salmon, the Yukon River’s largest commercial fishery, is coming in above last year’s showing with 1.8 million fish by July 13 as opposed to the 1.5 million seen by the same date last year.  Jack Schultheis, the manager for Kwik’pak Fisheries, the Yukon’s sole remaining commercial buyer, said the fishing couldn’t be better. “We’re really fortunate,” said Schultheis. “We’re gonna wind up with 500,000 fish for the summer season, which for this company, is the most summer fish we’ve ever done.” The Alaska Department of Fish and Game opened pink salmon for commercial fishing at its last area meeting, which Schultheis said has helped. Kwik’Pak has harvested more than 100,000 of the newly authorized species. The Yukon River’s price is climbing along with yield. “The market is definitely easier. It’s easier to sell fish this year,” said Schultheis. “Demand is up. Processors prices up 10-20 percent based on what we’re seeing last year. The demand is definitely higher this year.” Only one downside rained on the commercial parade, Schultheis said. The fleet had to leave hundreds of thousands of dollars in the water due to king salmon-related commercial restrictions. “As far as available harvest, there was 1.2 million fish available over what we harvested,” Schultheis said. “That’s the only part that was hard to take, because we could’ve taken more fish. It’s hard to watch all that fish go by and not have a way to catch them.” Area manager Holly Carroll said the commercial chum harvest is the largest the area has seen since the 1980s. Despite the increase in the commercial fishery and the overall increase of kings from the past few years, Carroll said the chinook run is still far from healthy. ADFG still restricted subsistence opportunities, though it allowed for more opportunities in 2016 than in the last three years. “I do like to remind people that we are not out of the woods,” said Carroll. “A true productive run won’t happen until we’re at a place where we don’t need to restrict subsistence harvests.” The benchmark for subsistence harvest is 40,000 kings, but the river hasn’t produced that number since 2011. The run itself, though better than years prior, is still a shadow of its former self. “Total run size is around 300,000 king salmon, long-term average,” Carroll said. “The recent average run has been about half that. Around 1999, 2000, the run started tanking. It’s been fluctuating a lot. 2011-2015, that average is 140,000 kings.” Kuskokwim River Like the Yukon River, the Kuskokwim River watershed is still tinkering with management plans for depressed king stocks – to the point where people should have hit the water harder both for themselves and for the resource health, said area manager Aaron Poetter. In state waters, hook and line, fish wheels, beach seines, and other selective gear types carried no restrictions after the early season closure that lasted until June 11, the first year the Board of Fisheries mandated such a closure. In federal waters upstream, the U.S. Fish and Wildlife Service had an open or closed management system, rather than last year’s staggered closures that followed the king run up the river. Poetter said subsistence users in the area have grown used to conservation management, and are happy with the amount of opportunities provided by state and federal managers, though restricted. “It’s a fascinating dynamic out here,” said Poetter. “You hammer that conservation factor so much, then when we get a run that’s harvestable you tell people, ‘Get out there and kill fish.’ And they say, ‘No, we need to conserve them.’” Poetter said Kuskokwim area fishermen might be a little too happy, in fact. Managers haven’t received nearly the same amount of hostility as previous restricted years now that folks have come to side more and more with conversation concerns — even though he believes no one should ignore overescapement and lost harvest that can result when the subsistence opportunities are too clamped. “Last year we ended up 30,000 or so above the upper end of the escapement goal for kings,” he said. “That’s just lost harvest opportunity, and it’s really just unfortunate. From my perspective, we could’ve done better.” ADFG projected 170,000 kings for the Kuskokwim River, still less than the average but enough to allow for harvest. Unlike other Alaska river systems, ADFG has no sonar counter for the Kuskokwim River. Instead, Poetter relies on the Bethel test fishery, a comparatively imprecise measurement for run strength and passage rates. For king salmon, Poetter said the Bethel test fishery looks promising compared to last year. “As far as Bethel goes, we’re definitely better than last year,” said Poetter. “Our catches in Bethel have been better, and with the amount of harvest and the harvest we’ve heard taken, it was definitely a better run than in 2015. We’ll see what that ends up looking like for escapement.” Along with foregone subsistence harvest, Poetter said a lack of commercial fishing could also harm fishermen. There were plenty of sockeye available in the river to have had a commercial season, Poetter said, so much that the Good News River alone — a Kuskokwim tributary — has gone past the upper end of its escapement goal of 49,000. More than 100,000 sockeye have made it through the river so far. “We had more than enough fish for a commercial fishery,” Poetter said. Despite sizable sockeye availability, 2016 marks the first year the Kuskokwim River has no commercial fishing season. Coastal Villages Region Fund is a Community Development Quota Group, or CDQ. The CDQ program gives 10 percent of the overall federal Bering Sea groundfish harvest to 65 villages within 50 miles of the coast. The 20 villages of CVRF are in the Kuskokwim Delta and do not include the upriver villages from Bethel. Typically, CVRF buys the commercially harvested salmon in the region for its processing plant at Platinum and it has sent tenders to Bethel in the past to buy salmon. This year, the group’s leaders made the call to forgo the harvest in the impoverished region. Poetter said several individuals and groups have called to offer tendering, processing and commercial purchasing services, but each decided not to continue with plans after conversations with CVRF. DJ Summers can be reached at [email protected]

Marijuana board revises cultivator limits

The Marijuana Control Board passed a revised regulation for Alaska cannabis cultivation licensees on July 14. After a regulation approved at the July 8 meeting crossed hairs with instructions from the Alaska Marijuana Control Office, the board changed rules for the cultivators who are currently active but still waiting for a preliminary inspection from AMCO enforcement officers. The new regulations allow a cultivation licensee in an active stage to have any number of immature plants upon their inspection, as long as the plants are tagged into the state’s tracking system, METRC. Currently, there are between 12 and 20 of these cultivators. Inspectors, who have studied similar rules in other states, must be able to have reasonable assurance that cultivators tagged the plants when they were eight inches in height. Cultivators may also have 12 immature plants – roughly speaking, plants not yet in a flowering state – of any size to serve as mother plants for clones. The measure passed on a 3-2 vote of the five-member board, with chairman Peter Mlynarik and Loren Jones voting against it. The board held a lengthy discussion of enforcement aims, botany and business cycles during the telephone meeting. The point of having initial height restrictions for plants, explained board director Cynthia Franklin, is to ensure “that someone didn’t cheat and bring plants in before they ordered their tags.” This follows Franklin’s earlier instructions to cultivators advising plants be in a range of six to 18 inches upon inspection. “We understand they will have grown by the time we see them,” she said. Industry representatives Bruce Schulte and Brandon Emmett argued in favor of having no height restrictions whatsoever for the immature plants a cultivator could have between ordering tracking tags and their AMCO inspection. Both Schulte and Emmett implored the board to loosen the height restrictions and instead specify that cultivators can have any number of immature plants. Height, they said, is a poor measure of a cannabis plants actual maturity, and restricting growers to a pre-tagging size limit would have bad consequences for the industry. “It’s difficult to describe the impacts of this change over time,” Schulte said. “If we have all these cultivators starting out with these plants at height restriction… we’ll see a spike, then business won’t have anything to sell for a month.” Schulte and Emmett pointed to Washington as an example, where such initial cultivation height restrictions contributed to a cycle of price swings related to an unstable supply of cannabis to retailers. Other board members argued the height restriction is necessary to curtail black market operators who could potentially stay in business as suppliers for licensed cultivators. “It gives people incentive to stay in the black market ‘til they transfer it to the legal market,” said Mlynarik. The board's next meeting will take place on September 7-8 in Anchorage, during which it plans to award the first retail licenses.  DJ Summers can be reached at [email protected]

Ninilchik Traditional Council sues for speedy approval of gillnet

As part of an ongoing lawsuit against the Secretaries of the Departments of the Interior and Agriculture, Ninilchik Traditional Council is asking that the authorities give it a community subsistence sockeye salmon gillnet permit before the sockeye runs peaks. NTC filed for a preliminary injunction on shortened time on July 13. The group said it is necessary to have an approved license in the next few weeks, as the sockeye run on the Kenai River will peak soon. “Prime fishing time for Kenai sockeye salmon is this week and next week, with the run steadily falling off after that time,” reads the motion. “The season will be a total loss if NTC waits to seek relief from this court after the July 28 FSB meeting. By the time there is a ruling, a permit issued, and the net, crew and fishing site set up, there will likely be only a few days left in the season occurring after the Chinook have completed their run and on the tail end of the sockeye run.” The Federal Subsistence Board allowed a subsistence gillnet for sockeye salmon in the Kenai River for NTC in January 2015 despite conservation concerns for king salmon and Dolly Varden trout, but denied the group the permit during the salmon season. State and federal biologists opposed the idea of the gillnet, and other Tribal groups from the same area have done the same, arguing that the gift of a subsistence gillnet to NTC would not be equitable to other groups. NTC’s plan for a sockeye gillnet on the Kenai River was denied last year by U.S. Fish and Wildlife Service management, leading to the lawsuit. NTC filed their legal complaint after the Federal Subsistence Board turned down a special request that would have forced the service to issue the permit. This year, NTC has filed yet another special request for the same purpose to be heard on June 28. The Federal Subsistence Board instead scheduled the request for the July 26-28 board meeting, which NTC said would make the purpose moot. “NTC cannot wait and pin its hopes on a favorable FSB decision ordering a permit to be issued for the fishery after its meeting concludes on July 28." This year, conservation may not be as much of a concern. Managers of the state’s most popular river are expanding opportunities for both recreational and commercial fishermen. An improving run of king salmon on the Kenai River has prompted fisheries managers to loosen the lynchpin of the area’s commercial sockeye management, which ties king sport fishing to commercial sockeye. Bait is now allowed for king sport fishermen on the river, and commercial openings are expanding for what is an above-average forecast of sockeye salmon.  DJ Summers can be reached at [email protected]

Conference committee formed on Murkowski's energy bill

The Energy Policy Modernization Act is in conference committee to stitch U.S. House of Representatives and Senate versions together after approval on July 12. Sen. Lisa Murkowski, as chairman of the Senate Energy and Natural Resources Committee, will serve as the conference committee’s chair along with six other senators: John Barrasso, R-Wyo.; Jim Risch, R-Idaho; Sen. John Cornyn, R-Texas; Maria Cantwell, D-Wash.; Sen. Ron Wyden, D-Ore.; Sen. Bernie Sanders, I-Vt.  The House conferee list of 24 members includes Alaska U.S. Rep. Don Young; Energy and Commerce Committee chairman Fred Upton, R-Mich..; and Natural Resources Committee chairman Rob Bishop, R-Utah. Citing a previous record of the bill’s bipartisan Senate support, Murkowski said she believes the committee can make a solid enough compromise to pass the bill by the end of the year. “While we have differences to resolve, I am confident we are up to the task,” said Murkowski in a statement. “Our bicameral negotiations will begin immediately so that a good final bill can be signed into law this year.”  The conference committee will have to overcome a House bill version that attracted seven presidential veto threats over several additions that give more water rights to California farmers and cut National Institute of Standards and Technology spending beneath the president’s request, among other points of contention with White House policies.   Senate Democrats including Cantwell, the Energy And Natural Resources Committee’s ranking minority member, expressed displeasure with the House bill additions, saying it compromises an otherwise solid bill in the name of Republican pet projects. The bill — the first energy policy overhaul since 2007 — includes provisions for renewable energy production for wind, solar, hydro, and geothermal energy, and to ease Alaska’s oil and mineral development processes. The Secretary of Energy would have to make a decision on any liquefied natural gas export application within 45 days after completion of environmental review, along with similar permitting revisions for mineral development. Murkowski has acknowledged in the past that President Barack Obama’s administration had only lukewarm support for the Senate version, but said that the Secretary of Energy is helping her office write language for the bill’s LNG permitting aspect illustrates the administration’s willingness to accept certain provisions. The Senate version passed 85-12 with several Alaska-specific provisions. DJ Summers can be reached at [email protected]

Bristol Bay reds late again; late run Kenai kings start strong

It’s the second late run in a row for the state’s most valuable salmon fishery, and the late run of king salmon in the state’s most popular river are showing up early in strong numbers. Bristol Bay, the world’s largest wild sockeye salmon producing region, experienced a massive late run of sockeye salmon last year, contributing with other market forces to drop the ex-vessel price of salmon to 50 cents per pound, or about half the historic average. This year, most signs point to a similarly late run. Late doesn’t necessarily mean below forecast. Last year, the historical midpoint of July 4 came and went with only 8.87 million fish harvested, about 35 percent less than the five-year average. All signs pointed to a Bristol Bay harvest of less than 20 million fish. By the end of the season, a late burst of sockeye produced one of the largest runs on record. This year, the midpoint has yielded even fewer fish than last. By July 4, fishermen harvested a total 7.3 million salmon of all species, according to daily harvest tables. The Alaska Department of Fish and Game forecast the Bristol Bay sockeye harvest to be 29.5 million, far less than the 2015 harvest of more than 36 million but still greater than the 20-year average of 23.2 million. This year, some signs are pointing to the same kind of late, strong run as in 2015. By July 11, the total run in Bristol Bay totaled 27 million fish, according to ADFG management biologist Tim Sands. Set and drift netters have harvested 17.7 million sockeye salmon, or 18.3 million salmon of all species. Sands, who oversees three of Bristol Bay’s districts, said he’s noticed several trends similar to last year including indices from the Port Moller test fishery, which is the region’s best in-run metric for run size and timing. “It’s definitely looking a lot like last year as far as run timing,” said Sands. “And the Port Moller indices are also similar in that regard. The biggest indices were on the 8th and the 9th (of July). Its certainly indicates it’s not normal run timing. Most of us watching this feel things are between 4 to 6 days late, and coming close to forecast. Without speaking for anybody else, I can say it looks similar to last year.” Sands said each of his three districts is both making escapement and providing plenty of commercial fishing opportunities. “Biologically speaking, I’m very happy for the districts I manage,” he said. Fred West, an ADFG fisheries biologist, said last year’s late run is coinciding with another of last year’s anomalies, small fish. In 2015 the average weight of a Bristol Bay sockeye salmon measured 5.12 pounds, smaller than the historical average and the 2014 average of 5.92 pounds. This year, depending on how much time they’ve spent in the ocean, some are even smaller. “So far, in 2016, the lengths for the two-ocean fish are bigger than last year but still below the average,” West said. “The three-oceans are slightly smaller than last year, and still well below average.” West said the average weight for all ages this year 5.3 pounds, about half a pound shy of the 1970-2015 average of 5.9 pounds. Kenai River late run kings As the state’s largest salmon fishery waits for its midpoint, managers of the state’s most popular river are expanding opportunities for both recreational and commercial fishermen. An improving run of king salmon on the Kenai River has prompted fisheries managers to loosen the lynchpin of the area’s commercial sockeye management, which ties king sport fishing to commercial sockeye. Beginning on July 9, ADFG allowed the use of bait in the Kenai River from its mouth upstream to 300 yards downstream of Slikok Creek. ADFG managers have typically left such restrictions in the last few years until later in the season in the face of statewide dwindling chinook production.  Paired restrictions between the king sport fishery and the commercial sockeye fishery require sockeye fishermen to have limited hours when kings are closed to bait. Managers place a no bait restriction on Kenai kings when it is projected fewer than 22,500 kings total will return to the river. This year, ADFG has forecast 30,000 kings in the late run, about half the average over the last 30 years but at the top end of the escapement goal of 15,000 to 30,000 fish. So far, the late run Kenai kings in 2016 have outperformed the last three years. As of July 11, 6,419 kings have passed ADFG sonar counters. The preceding three years produced an average passage of 3,262 by the same date. With expanding sportfishing for more kings comes expanded commercial fishing for more sockeye. The late sockeye run on the Kenai River looks better than prior years as well. ADFG has counted over 280,000 sockeye as of July 11, outpacing the most recent three-year average of 138,339. The ADFG forecasts a total run of approximately 4.7 million sockeye salmon to the Kenai River, or 1 million more than the 20-year average. For the Upper Cook Inlet area, ADFG forecasts 4.1 million fish will be harvested, 1.1 million more than the 20-year average.  Whether or not the fishermen will have the hours enough to catch them all remains to be seen. ADFG opens Mondays and Thursdays for 12-hour fishing openings for commercial fishing, and can only add 84 hours of extra time per week. Already, managers added an extra five hours onto a normal 12-hour fishery opening as of a July 11 order which extended commercial salmon fishing with set gillnets in the Kenai, Kasilof, and East Foreland sections of the Upper Subdistrict from 7:00 p.m. until 12:00 midnight on Monday, July 11, 2016. On July 12, managers announced a 15-hour additional fishing period for sockeye fishermen in those districts. Last year, the Kenai River commercial setnet sockeye fishery was restricted to 36-hour weeks until getting more fishing time starting July 25, when sport restrictions were also loosened to allow for retention and use of bait. DJ Summers can be reached at [email protected]com.

Marijuana board calls meeting to revise grow rules

The Marijuana Control Board will need to immediately revise a regulation it passed on July 8, an action that’s become a pattern for a board creating an industry from scratch. The July 7-8 meeting reviewed public consumption provisions, awarded licenses, and made changes to enforcement officers’ powers. The board will convene an emergency meeting on July 14 to remedy a cultivation regulation flub that would potentially have bankrupted some of the earliest entries to the industry. “At the meeting the Marijuana Control Board will discuss and may amend preliminary inspection requirements regarding adopted policy decisions relating to licensing of marijuana cultivation facilities,” according to a public notice of the meeting, which will be held telephonically. “No public testimony will be taken during this meeting.” The board passed a measure during its July 7-8 meeting that would have limited cultivators to six so-called “mother plants” before their initial inspection. Mother plants are grown cannabis plants from which cultivators can cut whole stems, called clones, which will then grow on their own as viable plants of the same strain. The board made this regulation with the intent to create an equitable entry for Alaska cannabis grower and to avoid legal scrutiny. Alaska statute allows the personal possession of six cannabis plants for personal use. In theory, a cultivator could “gift” itself six viable mother plants and still be in the realm of legality. If interpreted literally, however, the regulation doesn’t mesh with directives from the Alcohol and Marijuana Control Office, or AMCO, for some cultivators whose licenses were in an “active” state prior to the board’s July 9 meeting. In a letter, AMCO outlined instructions for these cultivators. These include securing fire marshal approval, local government approval, meeting certain training requirement for the state’s tracking system, METRC, and ordering METRC tracking tags. AMCO appeared to have an understanding that cultivators would be cultivating clones in the time between license issuance and final inspection, but did not mention quantity limits, only size and tagging requirements. “Make sure that you are within approximately seven days of your inspection when you tag your plants,” read the instructions. “The plants will be approximately 6-18 inches tall on the day of your initial inspection.” Several cultivators across the state have spent the last month cutting clones to be in the ground, tagged, and ready for final inspection, including Kenai’s Greatland Ganja, Fairbank’s Rosie Creek Farm, and Juneau’s Rainforest Farms. Mike Emers, an owner of the already-established organic outdoor produce grower Rosie Creek Farm, said he already has large crop of clones beneath the 18-inch limit. If forced to throw them away, his outdoor cultivation couldn’t produce another viable crop with only six mother plants before Alaska’s short growing season ends. “There’s nothing I could do, the plants were already planted,” said Emers. “I have to get a crop in this year. I can’t have a different start date.” Leif Abel, owner of Greatland Ganja, operates an indoor grow facility, but said a six mother plant limit would bankrupt him. His roughly $500,000 facility depends on the large crop of clones he’s been cultivating since June 9 to recoup the investment, he said. “No other state has been asked to come online with six plants,” Abel said. “It’s like telling an oil producer to build all this infrastructure and then only pull five barrels of oil in the first year.” The board members believed they had only been voting on mother plants, rather than total plants. AMCO and the board will hold an emergency meeting on July 14 to correct the inconsistency.  “After the meeting was adjourned, I was informed by the chair that the board was confused about the action they took regarding how many plants could be on a cultivation premises at the first preliminary inspection,” wrote AMCO and board director Cynthia Franklin in a letter to staff and industry members.” The Marijuana Control Board has needed to undue several decisions in a similar manner in the first year of its industry oversight. In an emergency meeting, the Marijuana Control Board voted unanimously on Dec. 1 to reinstate a stricter residency requirement for marijuana business licensees, following Permanent Fund Dividend residency rules (one calendar year in the state) instead of voter registration rules. Earlier, a Nov. 20 meeting opened the Alaska cannabis market to more Outside presence than some industry members liked. That amendment had loosened residency requirements to voter registration standards, which only require an Alaska address and a 30-day wait. In draft regulations stages in September, the board passed regulations that would have banned marijuana social clubs where consumption but no sales take place. The board later reversed that vote and said it could neither ban nor endorse licenses for marijuana clubs until the Legislature creates the license type in statute, which it has yet to do. It was at this meeting the idea for onsite consumption provisions for retail stores made its way onto books, which allow retail stores to have adjoining rooms for customers to consume what they have purchased from the retail store. Onsite consumption Retail licenses are still a few months away from being issued while waiting on crops to grow. In the meantime, the board is still shaping how onsite consumption will look, and reviewed a draft of regulations. Some of the board’s members thought the onsite consumption draft strayed too far from the original intent to tie consumption to retail purchases. The draft would require retailers make distinct sales for marijuana to be consumed in their shop, rather than customers consuming some of what they bought for personal use. Retailers would sell up to one gram of flower or bud for onsite use, and have to monitor users for overconsumption. Consumers would not be allowed to leave the shop with anything they’d bought for onsite consumption, which public commentators and board members alike feared could lead to overconsumption. “We have turned this into marijuana bars, from the looks about it,” said member Mark Springer. “My desire is to see a space where people can purchase products and consume a legal portion of them, and then leave with the remainder held by them in a legal fashion. “I think that’s going to be a lot more palatable to the public than commercial marijuana clubs, which is what people see, and I can fully understand their concern about that.” Amendments offered by Springer and Brandon Emmett revised the onsite consumption draft. Springer’s amendment changed language to allow customers to consume from what they purchased as a regular retail purchase. Emmett’s would allow customers to take home their unfinished marijuana in a childproof container — the marijuana equivalent of a “doggie bag,” as assistant attorney general and board legal counsel Harriet Milks put it — thereby avoiding scenarios where customers smoke more than they can handle in order not to leave any behind. The board voted 4-1 to submit the new draft for public review. Only Loren Jones voted against. The amendments intended to address several public commentator concerns, not least of which came from the Municipality of Anchorage, which has not only the largest amount of retail stores applying for onsite consumption provisions but the only marijuana social club free of legal challenge. The Municipality of Anchorage weighted in heavily on issue with a detailed letter from Erika McConnell, the marijuana coordinator for the municipality.  “There is perhaps good reason that this step has not been taken in other states, as regulating a marijuana bar raises significant concerns,” the letter states. “There is as yet no physical test to determine marijuana impairment, leaving only subjective behavioral tests which will probably be inconsistently applied. Limiting onsite consumption to marijuana that is in the state’s tracking system will be difficult if not impossible. And the very nature of this concept encourages marijuana consumption outside the home which will increase the likelihood of public intoxication and impaired driving.” McConnell wrote that the city is still considering whether or not to allow onsite consumption in city limits. “At this time onsite consumption is prohibited in Anchorage by municipal code,” the letter reads. “The administration is continuing internal discussion on the issue of social consumption of marijuana — whether to allow it at all, and if so, whether to allow it through the onsite consumption provision or through the social club model.” Smoking and driving drives a large part of the fears from regulators regarding onsite consumption. The board takes the concerns seriously, but as of now the state has no statistics to prove that marijuana consumption either increases impaired driving or has no effect on impaired driving at all. “We haven’t gotten that far in our record keeping,” said an Anchorage Police Department representative. The most well established area for non-home marijuana consumption is Pot Luck Events in Downtown Anchorage. Pot Luck Events has no endorsement from the Marijuana Control Board, but exists in a still-hazy legal area that has allowed it to continue operating as a private club where paying members can bring their own cannabis and consume onsite. Anchorage police records don’t track DUI violations according to the substance ingested. Rather, to track for what impairing substance, police must backtrack each violation and check whether the offender registered 0.0 percent blood alcohol content, then further check violation records to find what substance was in question. Peninsula conditions and enforcement Several applications from the Kenai Peninsula were only approved conditionally. The Kenai Peninsula Borough submitted letters to the board asking that it require three conditions for each of the approved licenses. Under state regulations, the board has to approve such local conditions unless they are “arbitrary, capricious, and unreasonable.” KPB’s conditions require that the marijuana establishment shall conduct their operation consistent with the site plan submitted to the Kenai Peninsula Borough, that marijuana establishments allow no parking in borough rights-of-way, and that the marijuana establishment shall remain current in all Kenai Peninsula Borough tax obligations consistent with local law. The board eventually allowed the licenses, not wanting further delay, but not before a lengthy discussion with KPB legal clerk Johni Blankenship. The discussion distilled to a question of enforcement, specifically whether or not the state or the borough would have enforcement powers over parking, taxes, and site plans. Enforcement AMCO enforcement officers will now have the authority to cite and make arrests for unlicensed marijuana activity or other marijuana-related offences. The board narrowly passed the measure with a 3-2 vote, with Brandon Emmett and Bruce Schulte fearing unforeseen consequences for an industry already suspicious of law enforcement. “I don’t think we fully understand the scope of this proposal,” said Schulte. Franklin took umbrage at the idea the regulations would expand police powers. Enforcement officers are already fully sworn police officers, simply with special duties. The regulation would give them the power to have enforcement capabilities for regulatory matters as well as legal matters. “This is not expanding their authority,” Franklin said. “This is activating their authority. This is not about arresting people; this is about protecting our licensees. This is the authority to shut down illegal competition with our licensees.” Board chair Peter Mlynarik, himself the police chief of the Soldotna Police Department, said the more help, the merrier. “I don’t think you confront the problem by totally removing law enforcement from it,” Mlynarik said. “I welcome having additional people who would help out in additional cases like that.” Tourism Tourism may be good for green tours, but the chances for having a cultivator’s license approved seemed to improve the more the applicants expressed disinterest in tourism. Tourism has reached a height of curiosity among the board thanks to an Alaska Dispatch News article detailing “green tours,” which would take Alaska visitors to see commercial marijuana businesses including cultivation facilities. Companies in tourist-heavy Southeast Alaska have already begun cropping up. The board appeared to think the prospect of tourism companies could lead to security problems and license protests from neighbors. Members asked many applicants whether or not they would be interested in taking part in green tourism. Cultivators, each of whom were approved, invariably answered no, drawing satisfied responses from the board. Some companies have already had problems with curious rubberneckers, drawing questions about security plans from the board. “People have been showing up asking about it because they’ve read about it online,” said the proprietor of Farmer Jack’s LLC, an Anchorage cultivator. “We’ve been having to ask people to leave.” DJ Summers can be reached at [email protected]  

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