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State seeks input on plan for $8.1M in VW settlement funds

The Alaska Energy Authority is asking for ideas about how to spend $8.1 million the state received as part of the 2016 legal settlement stemming from Volkswagen’s use of emissions “defeat devices” in many of its late model diesel cars. The $8.1 million is Alaska’s share of nearly $2.9 billion the German vehicle manufacturer was required to put into trusts to fund mitigation of nitrogen oxides, or NOx, emissions from diesel engines of all sorts nationwide. Nearly $54.5 million was allocated to a trust for federally recognized Tribes nationwide and the rest was allocated to states based on the number of vehicles sold in each state that were equipped with the emissions control defeaters between 2009-2016. In Alaska there were 1,450 such vehicles, which emitted about 10.5 tons of NOx, according to AEA Environmental Manager Betsy McGregor. Nationwide, almost 600,000 vehicles and their owners were affected. VW was also required to spend roughly $10 billion to buy back the vehicles with the devices that purposefully gave readings indicating the cars and SUVs were emitting lower amounts of NOx than was actually the case when tested for emissions outputs. “The vehicles were more (fuel) efficient and more powerful but they released thousands of tons of NOx beyond EPA standards,” McGregor said during a June 4 public meeting in Anchorage. AEA also held meetings in Fairbanks and Juneau to inform the public about its plans and solicit feedback. High concentrations of nitrogen oxides can aggravate respiratory ailments, such as asthma and long-term exposure can lead to the development of respiratory diseases and increase one’s susceptibility to respiratory infections. The particulate emissions can also contribute to the formation of acid rain. The car company was further required to invest $1.2 billion over 10 years to support increased use of zero emissions vehicles in the U.S. Specifically, AEA is asking for feedback on the Proposed Draft Beneficiary Mitigation Plan the agency put together since January — its early ideas on how to spend the money. The agency is trying to use the limited money in the most cost-effective manner, McGregor said, and wants the public’s help in doing so. Currently, the mitigation plan calls for 58 percent of the $8.1 million to be allocated over up to 10 years through competitive grants open to any applicants. That $4.7 million is open to anyone wishing to replace or repower generally pre-2009 model diesel freight trucks, buses, ferries, tugboats or other equipment and vehicles with cleaner burning engines. McGregor emphasized that grant applications must meet a litany of specific criteria to be eligible for the trust funds largely because they are available as a result of a court settlement. Another 12 percent, or $1 million would be available for government-sponsored projects to repower or replace older diesel vehicles or equipment. The final 30 percent of the $8.1 million would be split evenly between federal Diesel Emissions Reduction Act projects, which are primarily diesel powerhouse replacements in rural Alaska, according to McGregor, and projects to add electric vehicle infrastructure in the state. McGregor said AEA officials want the electric vehicle funds to go to coordinated efforts that would help strategically place charging stations along the road system, for instance. “We don’t want a shotgun approach. We want them to be strategically located,” she added. In some cases applications could be given preference depending on the air quality and amount of NOx historically released in a given area. The formal public comment period on the mitigation plan runs from May 1 to July 1 and McGregor said AEA hopes to issue requests for applications in late summer or early fall. “We expect to be funding projects by the end of the year,” she said. The proposed draft plan and additional information is available on AEA’s website, ^ Elwood Brehmer can be reached at [email protected]

AIDEA revises Mustang investment to spur production

Brooks Range Petroleum Corp. has the go-ahead from state regulators and funders to scale back its Mustang development in order to get the long-delayed North Slope oil project into production sooner. On May 31 the Alaska Industrial Development and Export Authority board of directors unanimously approved a pair of resolutions that shift the authority from being an investor-owner in Mustang infrastructure to a lender for Brooks Range’s parent company, Caracol Petroleum LLC. AIDEA will sell its interest in the holding companies — Mustang Operations Center-1 LLC and Mustang Road LLC — that were set up under the original deal for the project’s processing facilities and the five-mile gravel road and pad needed to access the site. Specifically, AIDEA will finance the purchase by Caracol of MOC-1 for $52.5 million and its membership in the road and pad company for $8.5 million plus enough to cover the authority’s investment costs, according to a memo accompanying the resolutions. The loans will be amortized over the time the project is producing oil. The authority will also get options in Alpha Energy Holdings Ltd., which is Caracol’s parent company. AIDEA Executive Director John Springsteen said prior to board approval of the terms that continuing to support the Mustang project is consistent with the authority’s economic development mission and with the state’s broader goal of getting more independent companies to develop oil projects on the North Slope. Fairbanks businessman and board member Bernie Karl, owner of the popular Chena Hot Springs Resort, suggested AIDEA has “bent over backwards” for Brooks Range and authority staff should’ve insisted on a stake in the project’s oil production in exchange for its financing help, but voted in favor of the plan. “The best time to plant a tree is 30 years ago. The second best time is today,” Karl remarked. “Today we are planting a tree.” Deputy Commerce Commissioner and board member Fred Parady said helping Brooks Range reach sustained production will ultimately provide the company and its owners the cash flow needed to meet their obligations as well as move the state forward with a new North Slope development. Mustang is in the small Southern Miluveach Unit on the southwest edge of the large Kuparuk River Unit. It’s estimated to hold 33 million barrels of proven and probable light oil reserves, according Brooks Range. Peak production estimates for the field have been in the range of 15,000 barrels per day. Full development was initially pegged at $580 million, but now is estimated at greater than $750 million, according to AIDEA. It is expected to generate $230 million in state royalties over the 20-year production period. “The true way to monetize this investment is to make it produce and I think it moves us much further down the road of achieving that objective,” Parady said. AIDEA leaders have been debating nearly continuously over how to handle years of delays in the project. The authority first invested $20 million of the $27 million needed to build a five-mile road to Mustang and a 19-acre pad for production and processing facilities in December 2012. At the time Brooks Range leaders said they hoped to have Mustang in production by late 2014. The gravel road and pad — in which AIDEA is an 80 percent owner — were finished in April 2013. In April 2014, AIDEA committed another $50 million equity investment in the $225 million Mustang oil processing facility. Brooks Range Chief Operating Officer Bart Armfield said at the time that the project would start production in late 2015 and likely peak in 2017. In February 2016 management for the authority and Brooks Range agreed to put Mustang in “warm standby” as oil prices in the $30 per barrel range hampered the ability to secure other financing options. Company leaders subsequently told state officials in regulatory filings that Mustang would produce in late 2017, but apparent financing problems ended that prospect. Armfield, now president of Brooks Range, told the Journal in January that the company is also owed more than $40 million in tax credits from the state. The AIDEA memo states that discussions with other potential financiers “made it clear that long-term, third-party financing will only be available for MOC-1 and the (Southern Miluveach Unit) with a definitive demonstration of the capacity/capability of the Mustang field.” Last June AIDEA invested another $2.5 million in MOC-1 to help maintain installed equipment and secure the original investment. On May 31 the AIDEA board also approved a $1 million line of credit to MOC-1 from the Economic Development Account of the authority’s Revolving Fund as “bridge financing” to continue work on the project, according to a second memo from the authority. Brooks Range has less than $200,000 remaining from the $2.5 million that has gone to operational costs such as storage fees and taxes, the memo states further. Repayment of the credit line is to be included in the loan for the transfer of the MOC-1 assets from AIDEA to Caracol. On May 7 the state Division of Oil and Gas approved changes to Brooks Ranges’ plan of operations for the Southern Miluveach Unit and Mustang that the company hopes will finally get the project off the ground. The company plans to install a turnkey “early production facility” with the capacity to produce up to 6,000 barrels of oil per day, which will be trucked to nearby facilities for processing, the filings with Oil and Gas state. Armfield said the company is working to finalize a contract for the early production facility, but declined to comment much further, saying the company would be able to provide more information about its work in the near future. Last fall Brooks Range conducted a flow test of the North Tarn 1-A well on the Mustang pad that produced peak oil flows averaging nearly 1,300 barrels of crude per day with only small amounts of water, according to a company statement at the time. Based on that flow test, Brooks Range leaders developed a new plan around the smaller, early production facility that could have it producing roughly 2,000 barrels per day in the first quarter of 2019 and up to 5,000 barrels per day by the end of the year. According to the AIDEA loan documents, Brooks Range will drill laterals off of existing wells this year to access the oil. Elwood Brehmer can be reached at [email protected]

AEDC excited about athletic training, Alibaba and Anchorage flights after China trip

Two of the more immediate outcomes of Gov. Bill Walker’s trade mission to China involve Olympic athletes coming to Alaska for their winter trainings and a new direct Anchorage-China flight that could begin as early as next year. On the 12-day Opportunity Alaska Trade Mission to China, Alaska Pacific University President Robert Onders signed a memorandum of understanding with Heilongjiang Province to cooperate on training athletes for the 2022 Olympic Winter Games that will be hosted in Beijing. The MOU is a step toward developing a year-round international Winter Olympic training center in Alaska, an idea Walker has said evolved during his April 2017 visit with China’s President Xi Jinping in Alaska. Xi stopped in Anchorage during his trip back to China after a visit with President Donald Trump in Florida. Bill Popp, president and CEO of Anchorage Economic Development Corp., ticked off a list of “strong potential” partnerships as an outgrowth of the Opportunity Alaska Trade Mission to China that wrapped up May 30. A direct flight from Alaska to China has long made sense, considering the thousands of winter and summer visitors from there. This past winter, the Alaska Railroad made three trips a week between Anchorage and Fairbanks, the first time that had been done in winter, Popp said. Due to no direct flights, it takes 15 hours to fly from Harbin, for example, for what should be a 6½ hour direct flight to Anchorage. Visitors actually fly from China over Alaska, then down to Seattle where they disembark. There, they board another plane to fly to Anchorage, Popp said. Harbin is the capital of Heilongjiang, China’s northernmost province. Harbin wasn’t on the itinerary for the Alaska trade mission, Popp said, but establishing a new flight route from there has long been under discussion. “We know that there is a strong intent to get direct passenger service between China and Anchorage International. For us this is a brass ring to pursue. It’s been years in the talking stage and we’re finally starting to see significant progress,” Popp said. Provincial Gov. Waling Jong spoke with Walker on the trade mission about the Harbin-Anchorage stops. “That opens Alaska to a significant amount of tourism,” Popp said. “I’m not using enough hyperbole to describe it, hundreds of millions more people. Imagine if we had a much shorter air route, a significant difference.” Of the 26 business delegates that traveled on the mission, breakout groups met with individual Chinese delegations set up by the China Investment Corp, considered the world’s third-largest sovereign wealth fund. The corporation set up face-to-face meetings with 72 Chinese businesses, according to the governor’s office. One of those was with Alibaba, ranked in the top 10 worldwide by Fortune Global 500, Popp said. “It’s a huge company, their Amazon, but more like Amazon on steroids that sells a massive amount of goods throughout the world,” Popp said. Alaskans were told how to sell products via Alibaba. The Alaska businesses learned of Alibaba as an export portal for seafood, baby food and other Alaska-made products that could be shipped directly to Alibaba or direct to Chinese customers with Alibaba directing the transactions, Popp said. Among the group were Bambino Baby Foods owner Zoi Maroudas, 49th State Brewing Co., Copper River Seafoods, Alaska Skylar Travel, Kachemak Bay Seafoods, Golden Harvest Alaska Seafood, Alaska Native corporations such as Bering Straits Native Corp., NANA Regional Corp. and Sealaska Corp., as well as Visit Anchorage, Explore Fairbanks and the Alyeska Resort and Hotel Alyeska. Explore Fairbanks CEO Deb Hickok signed a contract in Beijing with East West Marketing Corp. to represent them in reaching Chinese tourists wanting to visit Alaska. The arrangement will also build on the business missions to China that Explore Fairbanks has coordinated with Visit Anchorage and other travel trade companies, such as the Alaska Railroad over the past three years, Explore Fairbanks Tourism Director Scott McCrea told the Journal last week. Alibaba opens another opportunity via an app called Fliggy. Fliggy is “a fun way of saying flying piggy, a symbol characterized by a cartoon pig head wearing aviator goggles and a scarf,” Popp said. It offers over two million travel products, Popp said, including hotel stays, tour packages and flights. For Alaskans, using the Fliggy option would open a huge market of Chinese travelers. Another major trade opportunity centers on the Chinese celebration of Nov. 11, an “auspicious day to travel and purchase,” Popp said. The number 1 represents powerful numerology, and that date yields four No. 1s in 11/11. Like American Black Friday, customers rush to take advantage of special sales, a day that generates more than $35 billion in sales for China, Popp said. Educating Alaska exporters about the date’s significance would open opportunities for them to participate in the day’s sales offerings, thus reaching millions more in potential customers, he said. AEDC went with its own project, which Popp focused on: an arrangement to have Chinese National Aviation Fuel Co., or CNAF, deliver bulk fuel to the Ted Stevens International Airport in Anchorage. CNAF is the sole provider of jet fuel in China, Popp said, earning $39 billion in annual revenues. “They deliver jet fuel to 59 international airports including L.A.,” Popp said. “They are now keen to set up a full blown operation here. We were able to arrange for a summit meeting. They have some due diligence to do, and this meeting moved the ball closer to a positive decision.” AEDC will also be hosting workshops on specific topics related to trade between Alaska and China, Popp said. Alaskans on the trip had access to translators to overcome language barriers. But there’s also an app called WeChat that can be downloaded to phones for translating texts, Facebook, Twitter, and debit card payments. “Using this app, people are in open dialogue right now,” Popp said. As for the current political environment under which Trump has placed tariffs on certain products from China, Popp said that had little impact on this trip. “The sanctions didn’t stop them from the dialogue. There are no tariffs on tourism and that’s an export since they are paying for the services that we provide that give them a tourism experience,” Popp said. The more money the Chinese spend on American goods and vacations, the better the trade balance between the two nations, Popp notes. Trump’s main argument to impose the sanctions is to correct the current massive trade deficit. Naomi Klouda can be reached at [email protected]

Gasline corp. withdraws loan application to AIDEA

Editor's note: This story has been updated with the withdrawal of the loan application described in the original story, which follows below. State gasline officials have pulled their loan application with the state’s development bank, Alaska Gasline Development Corp. spokesman Jesse Carlstrom told the Journal Thursday. AGDC’s loan application, discussed during an executive session of the Alaska Industrial Development and Export Authority’s May 31 board of directors meeting, was not to directly finance a portion of the $43 billion Alaska LNG Project the corporation is pursuing. “It was a small loan to explore ways to provide in-state gas to Alaskans,” Carlstrom said. Corporation officials previously would not acknowledge that the application, listed on AIDEA’s May 31 board meeting agenda simply as an “LNG loan” was from AGDC. The application was withdrawn just prior to the Wednesday morning online publication of a Journal story outlining the loan, according to Carlstrom. He declined to comment on the loan amount, citing commercial sensitivity. An AIDEA spokesman previously noted that if the finance authority’s board ever took formal action on the loan its details would have been made public at that time. AGDC officials denied a public records request for the loan application documents June 7, citing "information or trade secrets" that "would cause commercial or competitive harm or damage" to the corporation. AIDEA has not responded to a request for documents sent between the two this year. Both state-owned organizations under the Department of Commerce, Community and Economic Development. AGDC President Keith Meyer has repeatedly emphasized a desire to disperse LNG shipments to remote Alaska communities wherever possible alongside the large LNG tanker shipments to Asian buyers that would be the economic driver of the proposed LNG export plan. Original story Alaska Gasline Development Corp. leaders are asking the state’s development bank for help in financing the Alaska LNG Project, but neither side is willing to say as much. Multiple sources within the state confirmed AGDC has applied for a loan from the Alaska Industrial Development and Export Authority to fund work on the $43 billion LNG export plan; however, when asked if the state-owned gasline corporation had sought help from its fellow state-owned financing authority, an AGDC spokesman provided neither a “yes” or a “no.” “AGDC is actively developing financial and business arrangements that are beneficial to moving the Alaska LNG Project forward,” spokesman Jesse Carlstrom wrote in an email. “Due to the confidentiality and competitive nature of these efforts, AGDC cannot publicly disclose any information at this time.” The agenda for the May 31 AIDEA Board of Directors meeting listed an “LNG loan” as one of the topics the seven-member board would be discussing in an executive session. AIDEA spokesman Karsten Rodvik said the authority had received a loan application to finance an LNG project and authority staff was in the early stages of reviewing the application. “It was just a quick briefing and heads up on a loan that could come before them (for approval) someday,” Rodvik said. He added that it was discussed behind closed doors because of a confidentiality statute that precludes disclosing potentially sensitive information of the authority’s prospective business partners. It is common practice for public bodies to discuss legal, business or personnel matters in an executive session to prevent information that could potentially damage a business deal, for instance, if it became public, but the general topics that are going to be discussed in an executive session must be disclosed. However, in the case of AIDEA and AGDC, both are public entities under the Department of Commerce, Community and Economic Development and their financials are public information. AIDEA officials denied a June 1 records request for the documents related to the “LNG loan” citing the authority’s confidentiality statute, but noted the documents would be made public if the board ever took action on the application. Subsequent records requests submitted June 4 to AIDEA and AGDC seeking documents sent between the two this year are outstanding. The amount AGDC is requesting and under what loan structure is unknown at this point. AIDEA regularly participates with private banks and credit unions in loans for real estate developments. The authority has several loan programs and also invests in energy projects but it is typically required to — unless directed via legislative policy — to achieve commercial returns on its investments, which also often require significant collateral. AIDEA had a net position of more than $1.3 billion at the end of fiscal year 2017, according to its annual report. And while AGDC leaders have made good on their promise over the last two years to not request additional funding from the Legislature while the state continues to run sizable deficits, legislators further challenged them by not granting the agency the ability to accept third-party investments in Alaska LNG in the state budget passed May 12. Enough legislators are concerned that authorizing AGDC to accept outside funds would ostensibly be signing away the Legislature’s control over the project — that of the purse string — and the request was pulled from the budget. The corporation took over control of the project in January 2017 with $106 million remaining from prior gasline appropriations and expects to have $52.5 million at the start of the 2019 fiscal year July 1. An austerity program instituted by AGDC leaders when they took over the project has helped them under-spend on their budget by $35.7 million since. As a result, the corporation should be able to continue operating on its existing funds through June 2019, according to AGDC Finance Manager Philip Sullivan. However, lacking a substantial injection of new money could potentially challenge the ability of the corporation to stay on its desired schedule, which is to have a final investment decision in early 2020. Prior to that AGDC will need to hire at least one, likely multiple, large engineering, procurement and construction firms to manage the massive build-out as well as complete the costly environmental impact statement for the project that is currently being reviewed by the Federal Energy Regulatory Commission. Elwood Brehmer can be reached at [email protected]

Gov, challengers square off for support at oil and gas conference debate

Two challengers for governor took their swings at the incumbent during the Alaska Oil and Gas Association’s gubernatorial debate on May 31 yet the mood was generally light and there was even a fair amount of laughter. But then again, it is still early in the campaign and the full field wasn’t yet set as former U.S. Senator and Anchorage Mayor Mark Begich entered the race on June 1, sending Walker out of the Democrat primary and into an independent bid for reelection with running mate Lt. Gov. Byron Mallott. Later that day, former Lt. Gov. Mead Treadwell also announced he was entering the GOP primary. Journal Managing Editor Andrew Jensen moderated the hour-long debate that focused on oil and gas production, government regulation, the Alaska LNG Project and a few non-related topics submitted from the audience and those watching on Facebook Live. Republican hopefuls Scott Hawkins, an Anchorage businessman, and former state Sen. Mike Dunleavy of Wasilla also stressed continued budget cuts and the prospect of growing the state’s resource development economy by making permitting more efficient. Walker noted the reduction in future deficits via the passage of his landmark legislation to employ a 5 percent structured annual draw on the Earnings Reserve Account of the Permanent Fund and his efforts to lobby federal officials on behalf of ConocoPhillips regarding the company’s North Slope projects. “We closed 80 percent of the fiscal gap. That’s a significant step for the future of (the oil) industry and the future of this state,” Walker said in his opening remarks, adding that he ran for governor in 2010 and 2014 on a resource development platform. Dunleavy and Hawkins are vying for the Republican nomination. Gubernatorial candidate and longtime Republican Kenai Peninsula Rep. Mike Chenault was unexpectedly absent from the debate and announced late Thursday night he is withdrawing from the race. Dunleavy and Hawkins also questioned the role Chinese state-owned companies might play in the $43 billion Alaska LNG Project if it is built. In November Gov. Bill Walker and Alaska Gasline Development Corp. President Keith Meyer signed a nonbinding framework agreement to have oil and gas giant Sinopec buy LNG from the project with the Bank of China and China Investment Corp., the country’s sovereign wealth fund, financing up to 75 percent of the project’s cost. The deal also leaves open the prospect of Sinopec having engineering and construction roles in the project. Dunleavy said he voted for gasline legislation in 2014 that made the state a partner in the project with BP, ConocoPhillips and ExxonMobil, but he questioned how Walker’s administration has handled it now that the state is leading the gasline effort. “I don’t have faith in the administration that they’re going to be able to pull it off,” Dunleavy said of Alaska LNG. He added that if the state is not cautious in negotiating contracts with the nationalized Chinese companies “they’ll tie us in knots.” Hawkins said it is very important for the private sector to lead construction and management of the gasline. Walker responded that China is already Alaska’s largest trading partner, buying much of the state’s seafood, minerals and timber. “When we start drawing lines and saying ‘you can invest, you can’t invest,’ I think that’s a dangerous road to go down,” the governor said. Hawkins, the former CEO of the Anchorage Economic Development Corp. and the owner and founder of Advanced Supply Chain International, a logistics firm, contended the state has a “toxic reputation on Wall St.” because Walker vetoed full payment of oil and gas tax credit certificates in 2015 and 2016. The vetoes, totaling $630 million — and followed by the Legislature’s statutory minimum tax credit appropriation in 2017 — caused small explorers and producers that took out loans underpinned by the credits to default on their payments, ostensibly leading to a credit freeze on the industry in the state. Hawkins called the credits a “tremendously successful” program. He said the credits, which in some instances had the state fund more than two-thirds of oil and gas projects, were probably overly generous but he would be open to a similar program in the future. In response to a question regarding whether the state’s royalty share of North Slope gas should be sold to in-state consumers at a discount to maximize the public benefit if the gasline is built, Hawkins said it would need to be sold at market rates. “Generally, it’s a bad idea to subsidize things,” he added. Walker noted that his administration led the push to pass House Bill 331 this year, allowing the Department of Revenue to sell bonds to pay off the nearly $1 billion outstanding credit obligation once the Legislature passed a long-term solution to the state’s deficit. HB 331 requires the companies to accept a discount of up to 10 percent on the value of the certificates they hold to prevent the state from incurring additional interest costs. A lawsuit has been filed against the administration challenging the constitutionality of the tax credit bonds, as well. Walker hasn’t signed the bill yet. Hawkins also expressed concern over the Alaska Industrial Development Authority’s strategy for getting more natural gas to the Fairbanks area since Walker took office. AIDEA purchased Fairbanks Natural Gas for $52 million in 2015, a deal that set the stage for consolidating the area’s gas utilities, which Interior Energy Project leaders believe will result on operational efficiencies, economies of scale and ultimately lower gas prices to consumers. He said the project is important but it’s become “too government driven.” Dunleavy called it a “work in progress,” while Walker highlighted that regardless of the economic challenges of the project brought on by lower oil prices it is a fundamental way to improve air quality in Fairbanks, which is often the worst in the country during the winter months. ^ Elwood Brehmer can be reached at [email protected]

Movers and Shakers for June 10

John Binder, deputy commissioner of Aviation for the Alaska Department of Transportation &Public Facilities, and Fairbanks International Airport Manager Jeff Roach have been awarded the distinction of Accredited Airport Executive by the American Association of Airport Executives. As deputy commissioner of Aviation, Binder leads Ted Stevens Anchorage and Fairbanks International Airports along with 240 state owned airports across Alaska. To qualify for the distinction, Binder and Roach had to successfully complete three phases of the accreditation process: pass a 180-item multiple-choice examination, fulfill a writing requirement, and demonstrate, in the final interview by a panel of AAEs, his knowledge of airport management, business administration, and general transportation economics. By fulfilling all the requirements leading to the title of Accredited Airport Executive, The two join a select group of individuals who have earned the designation in the more than six decades of the accreditation program’s existence. At present, fewer than 10 percent of AAAE’s members throughout the country are active accredited airport executives. The Alaska Mental Health Trust Authority announced three hires effective June 4. Eric Boyer is joining the Trust to focus on workforce related initiatives and to expand its behavioral health capacity. Boyer has more than 20 years in youth and family community behavioral health and most recently has been with the Alaska Training Cooperative providing critical training and technical assistance to organizations across Alaska. Travis Welch is joining the Trust to extend its work on criminal justice initiatives. Welch joins the Trust with more than 10 years of law enforcement experience, most recently serving as the Chief of Police for the North Slope Borough. Autumn Vea has 10 years of experience with the statewide behavioral health system in the Department of Health and Social Services and most recently with the Department of Corrections. Her knowledge and skills will be an asset to the Trust and its beneficiaries. Vea will work closely with Senior Evaluation and Planning Officer Michael Baldwin to perform a continuous review and analysis of internal data and policy functions. Sailing Inc. of Seward announced that Captain Randy Altermatt was named an American Sailing Association “Outstanding Instructor of the Year” for 2017. He was among a national roster of 964 sailing instructors who were eligible for consideration of this annual award, determined by student survey submissions in his 2017 classes. He was ranked in the top 20 instructors nationally. Altermatt has a background in education, with a Master’s Degree in Public School Administration. He retired from a career as teacher and principal from the Mat-Su School District in 2000. He immediately started teaching sailing in Seward at Sailing, Inc. He has a U.S. Coast Guard Captain’s License and Instructor Endorsement from ASA. In 2010, he received an endorsement as an ASA Instructor Evaluator. He has since trained new sailing instructors out of the Sailing Inc. Sailing Academy. Altermatt and his wife Deborah Altermatt own and operate Sailing Inc., which offers ASA sailing instruction from basic to advanced levels. It is the only certified sailing program in Alaska. Northrim Bank announced the promotion of Nicole Pintsch to assistant vice president-assistant controller and Danicia Shiryayev to assistant vice president-small business loan officer. Pintsch has been with Northrim Bank since 2007 and has 13 years of experience in banking. She started as the accounting specialist and has worked her way up through the ranks of the Accounting Department at Northrim. Pintsch holds a bachelor’s degree in accounting from the University of Alaska Anchorage. She volunteers as an instructor with Junior Achievement of Alaska. Shiryayev has been with Northrim since 2016 and has 10 years of experience in the banking industry. She is also the chair of the Anchorage Chamber of Commerce Young Professionals Group and a member of the Salvation Army’s Advisory Board.

Millennials decline in Alaska population

Alaska isn’t just the second-youngest state in the union. Its population remains younger as well. The median age in Alaska is 33.4 years old, compared to 37.4 nationally. But the number of people ages 20 to 29 years old in Alaska has steadily declined over the past seven years, said state economist Neal Fried. Fried said that gives some advantages for Millennials — roughly 18 to 35 years old — to pick from jobs requiring certain skill sets. “(The younger age groups’) employment chances look bright because there’s not as much competition,” Fried said. But it means a harder situation for Alaska’s employers, as the Anchorage Economic Development Corp., documented in a recent study. State demographic data from 2010 to 2017 shows that the number of 18-year-olds fell by 1,164 people in Alaska, from 10,498 to 9,334. In the 24-year-old count, the number fell from 11,568 in 2010 to 10,600 in 2017, or 968 fewer. Alaska demographer Eddie Hunsinger said overall, the age 20 to 29 population fell from 109,383 in 2010 to 106,044 in 2017, or 3,339 fewer. The data are gleaned from the Alaska Permanent Fund Dividend application filings each year. “The number of prime working age adults is declining, or not expected to grow in the next 20 years,” Fried said. “The numbers have been falling in the younger demographic in Alaska, but it’s following on a national trend as well.” In addition to its impact in the workplace, Alaska demographic changes also have ramification for certain kinds of businesses, Fried said, while other aspects of an economy are not that fazed by broad changes in demographics. “Groceries for example, they will need, though products in the store may change,” he said. “Businesses are usually well aware of what groups they cater to, but an economic spin sometimes is a demographic spin. A change in demographics can also be dictated when fewer members of an age demographic are documented over time.” Alaska has grown accustomed to the high need for health care professions as the “Baby Boomer” generation ages. When the Boomer generation was coming of age, they flooded the market during their prime working years, Fried noted, which meant more competition for jobs. But the number of college graduates was a smaller fraction of that generation than the Millennials, 25 percent of which gain some kind of degree. When the numbers lag in that demographic, there may not be enough people to cover the positions traditionally offered to the 18- to 30 year-old employment grouping. Fast food establishments to retail stores to full restaurants dependent on large numbers of younger people entering the workforce say they can’t always find all the workers they need, Fried said. When that happens, such businesses compete from a limited work pool, Fried said, or hire older workers from the Baby Boomer population, born between 1946-1964. Alaska’s downturn while a brighter economic boom goes on outside Alaska also is a factor. That draws a young demographic away, including college students who chose not to return. Fried said there’s only so far you can go with data, however, and the next steps have to come in what employers say about whether they can draw and retain a younger workforce. Fried doesn’t bemoan the so-called “brain drain” that happens in a discussion about whether or not Alaska tends to lose its young, newly educated workforce. “It’s a two-way street,” he said. “People leave but people also come here. That’s the nature of the demographic. We gain others who have the skills Alaska needs.” Perhaps just not in the numbers wanted by employers. AEDC Millennial study The Anchorage Economic Development Corp. released a study based on a survey of 1,064 Millennials, which they defined as individuals born between 1980 and 2000. This is the age group that currently makes up a third of the city’s workforce, the Millennial Workforce Survey found. It’s also the generation that makes up a quarter of the total U.S. population. AEDC starts out its report stating the goal behind its Live.Work.Play. Initiative is to make Anchorage “the number one city in America in which to live, work and play by 2025.” The initiative means to attract and retain a highly skilled workforce. It came about at the request of the business community wanting to know how to attract and keep them here. Anchorage sees a shortage in technical skills, professions like accountants, health care, even carpenters and oil field workers. “It’s across the board. We can’t find the workforce we need,” said AEDC communication director Sean Carpenter . “We had heard a lot of that. Other cities experience the same thing. So we took the question to see if there’s a way we can answer it.” Making Anchorage attractive helps draw people with skills and talents. “Business chases talent, and talent chases place” is a premise behind the study. Clues were teased out from the question of what Millennials want in their jobs. A paycheck isn’t as important to 75 percent of the Anchorage survey respondents as “good management,” according to AEDC’s findings. “While Millennials do care about wages and benefits, it is evident that other factors like good management, scheduling flexibility, workplace culture and having an interest in the field of work are all aspects that play a critical role in employment decisions,” the survey concluded. Some 91 percent said having a positive impact on society is either somewhat or very important to their job satisfaction. These passion factors “are critical for employers to take into consideration when considering the structure of positions that are available to younger professionals,” according to the study. When asked if they valued telecommuting — working remotely from home or elsewhere — results indicated this was a “low priority for Anchorage residents deciding where to work.” Flexibility was one of the highest-ranking job factors. This isn’t the generation that wants a 9–to-5, but rather built-in scheduling and time-off options. The higher educated, the study found, the more they desired this job characteristic. For employers who say they are frustrated with this generation’s work habits, there’s a communication gap to heed: According to this survey’s results, communication problems are listed as the biggest on-the-job frustration by 71 percent of the Millennial respondents. “This finding was significant because it may indicate that employers have systems or methods of communication that are inadequate and are leading to frustration for Millennial employees,” the report concludes. Millennials are often defined as a generation reliant on electronic communication such as email or text, and not as comfortable in “face-to-face” encounters. Bill Popp, president and CEO of AEDC, said the problem lies in a “top-down military model” of workplace communication hierarchy. “The broader workforce is left in the dark while communication goes mainly between the top managers,” Popp said. “The horizontal model gets better contributions from young Millennials. That’s how you bridge some of those issues. They want to be inspired by the mission. To be inspired by the mission, you have to know the details” of workplace goals. So rather than Millennials being at “fault” for possessing poor communication skills, Popp recommends businesses reconfigure “our leadership systems. It’s a flaw in the system.” AEDC also heard from employers in a separate 2018 Business Confidence survey. One question was “what is the biggest barrier to growth in your business in 2018?” Out of top six barriers, three were labor related, Popp said. A top complaint was the lack of skilled and professional workforce availability. Business majorities see a lack in the semi-skilled workforce. “The three top concerns centered around the labor force — in the third year of a recession,” Popp said. “It tells us that there are things going on here that we are not addressing.” Naomi Klouda can be reached at [email protected]

Place your bets: Delaware takes sports wagers, others close

DOVER, Del. (AP) — The market for legal sports gambling in the United States widened significantly on June 5 with expanded betting in Delaware, putting legal wagering within driving distance of three major East Coast cities less than a month after the U.S. Supreme Court cleared the way for states to accept the bets. Instead of flying to Las Vegas or betting illegally, fans in Philadelphia, Baltimore and Washington can make a short drive to legally bet in Delaware on the NBA Finals, the Stanley Cup Final or the World Cup. More states are likely to join the action by the time the NFL starts its season in the fall. “Giants and Yankees, all day, every day,” Manhattan native Karriem Keys said June 5 after betting on the New York Giants to win the Super Bowl next year. Keys, 53, who now lives in Dover, was one of a couple of dozen people laying down early wagers at Dover Downs as Delaware became the first state outside Nevada to offer legal gambling on individual sporting events. “In New York, we would go right to the corner store, to the bodega, and bet,” Keys said. “That’s not legal, but, you know, everybody was doing it. But now it’s legal so it’s great.” Gov. John Carney had the honor of placing the first bet, wagering $10 on the Philadelphia Phillies to beat the Chicago Cubs that night. “I’m a big sports fan, a big Philadelphia sports fan,” said Carney, who traveled to Minnesota in February to watch the Eagles win the Super Bowl. Dover Downs casino workers took in 36 bets within the first 20 minutes of legal wagering. The offerings at Delaware’s three casinos include bets on professional baseball, football, hockey, basketball, soccer, golf and auto racing. Because of a failed sports lottery experiment in 1976, Delaware was partially exempted from the 1992 federal ban on sports gambling that was recently struck down by the Supreme Court. That exemption led to broader sports betting legislation passed in 2009 and Delaware’s NFL parlay wagering system, which gave the state a head start in offering more wagers. “I just had to get in on the action, you know what I mean?” John Celatka of Dover said after betting on the June 5 Colorado Rockies game and the June 6 NBA Finals game. Celatka said he’s done pretty well with NFL parlay wagers and single-game wagers was a logical next step. “I’m excited to get started with football season,” he said. “I like my chances.” Fans in three other states could be placing bets by football season. In New Jersey, which successfully challenged the federal ban, lawmakers hope to have a bill signed by the end of this week that resolves competing proposals to allow sports betting at casinos and horse racing tracks. In Mississippi, where lawmakers proactively legalized sports gambling at the state’s 28 licensed casinos in anticipation of a favorable Supreme Court decision, regulators have proposed rules that could be voted on as early as June 21. That means casinos could start taking bets in late July. West Virginia also passed a sports betting law before the Supreme Court decision, and officials there hope to have sports betting when football season kicks off. The West Virginia Lottery Commission is working on draft rules and regulations but has given no timetable for when they might be ready. “We’re not going to start until we know we can do it 100 percent correctly,” lottery director Alan Larrick has said. Republican West Virginia Gov. Jim Justice has said he wants state officials, professional leagues and casinos to reach an agreement on what the leagues have called an “integrity fee” — money that the leagues would use to police betting patterns — but the subject was not addressed in a recent special legislative session. Thus far, no state law has made it to the books with the integrity fee attached. Pennsylvania also prospectively legalized sports betting last year, but it could be months before regulations are in place that would allow sports books to open. State officials have not produced an estimate of what sort of tax revenue the activity could mean for Pennsylvania, which already rakes in more in taxes on casino gambling than any other state. But some gambling industry officials are warning that Pennsylvania’s 34 percent tax rate — plus another small cut for local governments that host casinos — and the $10 million licensing fee will make it unprofitable to run a legal sports betting business. In the meantime, Pennsylvania gaming officials notified casinos last week they could begin applying for licenses. So far, none has submitted an application. Nuckols reported from Washington. Associated Press writers Jeff Amy in Jackson, Mississippi, Marc Levy in Harrisburg, Pennsylvania, and John Raby in Charleston, West Virginia, contributed to this report.


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