Administration asks public 10 questions before reconsidering forest road ban

WASHINGTON -- The Forest Service has come up with 10 questions it wants the public to consider before revising a Clinton-era ban on logging and road construction on a third of national forest land.The questions include how the government can best satisfy competing interests while protecting national forests, and how roadless forests should be protected from wildfires, insects and disease.The government also wants to know what activities should be prohibited in roadless areas, how the rights of nearby property owners should be protected and what role local forest managers should play in protecting the areas."It is important to give people additional time to express their views on how best to move this process forward," Forest Service Chief Dale Bosworth said in a statement. "If we spend the extra time now, we have a better chance of coming up with a workable solution."The ban instituted by Clinton just before he left office ropes off 58.5 million acres from developers, loggers and mining companies. Environmentalists hailed the rule as much-needed protection for the most pristine parts of the national forest system.But some timber industry and off-road vehicle groups say the policy is too restrictive.The Bush administration also considers the policy flawed and Agriculture Secretary Ann Veneman in May promised to amend it, specifically to allow more local input. Veneman oversees the Forest Service.A short time later, a federal judge blocked implementation, saying the policy would cause "irreparable harm" to federal forests.The vast majority of roadless federal forests are in the West, including Alaska’s Tongass and Chugach national forests. Clinton’s order would have stopped all new road construction in the Chugach and all road construction in the Tongass, except for developments involving timber sales that were already proposed.The roadless rule is the subject of eight lawsuits in seven states, including Alaska.American Forest & Paper Association spokesman Michael Klein said the questions are a "good sign" if they look at whether the rule accomplishes its goals and was crafted in the best way possible.Klein’s group has filed one of the eight lawsuits against the Clinton policy.The 10 questions were to be printed in the Federal Register on July 10, which started a 60-day public comment period.

EPA's Whitman sees states as partners

Environmental Protection Agency Administrator Christie Whitman told Alaska business and government leaders in Anchorage July 9 that "responsible growth doesn’t mean no growth. The rest of America needs to understand that Alaskans can be good environmental stewards and still oversee responsible economic development.""Alaskans have a right to earn a living. Protecting Alaska’s environment doesn’t mean impovershing her people," Whitman, a former governor of New Jersey, told a breakfast group organized by the Resource Development Council of Anchorage.Whitman went on to say that "too many people in Washington, D.C., believe that all wisdom resides within the Beltway. The federal government should certainly be an ally in protecting the environment, but too many in Washington forget that being an ally is just that, a partner.""Washington needs to listen more and preach less," she said. "That’s why I’m here, to listen and absorb information about Alaska."Whitman also said there will be delays in appointing key regional administrators in her agency including Region 10, which includes Alaska.The Bush administration’s process of interviewing candidates for political appointments within agencies first in the White House and then giving agency heads a short list, plus delays brought on by the recent leadership change in the Senate, have pushed appointments to the EPA regional offices until later in the year, Whitman said.She hopes there will be a Region 10 administrator named by this fall but it could be as late as February. Whitman would not comment on a proposed Region 11, which would be based in Alaska, other than to say that it is now suggested that Alaska and Hawaii be in the same EPA region."That means everyone in my agency will want to work in a new Region 11," she quipped.The Alaska regional office is a substantial part of Region 10, she said, with more than 30 people.Whitman also would not comment on a question from the audience about the dispute between the state of Alaska and the EPA over a state air quality permit issued for a diesel generator at the Red Dog Mine in northwest Alaska.It is a matter in litigation and a comment from her would be inappropriate, she said. But in general comments later, Whitman said her policy will be to maximize the role of states in running environmental programs after they have been delegated by the EPA, which is the crux of the Red Dog permit dispute."We should set the standards, and let the states figure out how to meet them. We should get out of their way, and not try and micro-manage their decisions," she said in a press briefing after her talk.The Red Dog lawsuit, now before the 9th U.S. Circuit Court of Appeals, involves an EPA decision that new technology for controlling air emissions from diesel generators was superior to an older technology approved by the state in a permit issued to Cominco Alaska Inc., the mine operator.The state of Alaska asserts the older technology meets the EPA air quality goals and is less costly.Whitman had been in Alaska for four days touring rural villages where EPA and state funds are being used to improve village water and sewer systems."There’s been a huge improvement in the number of rural communities that have access to running water. But there are still challenges, with many villages still without access to clean water," she said."One of Alaska’s biggest challenges is its remoteness and the expense of doing these projects," Whitman said.She added that the rural "honey bucket" problem isn’t unique to Alaska. "There are many tribes in the Lower 48 states which also don’t have access to running water. It’s the functional equivalent to honey buckets," she said.

It's time to rethink your estate plan

The president has signed the Economic Growth and Tax Relief Reconciliation Act of 2001. The act phases in repeal of the estate and generation-skipping transfer taxes that will be fully implemented for the estates of people who die after Dec. 31, 2009. During the phase-out period, the transfer taxes will continue to apply, with the gradual reduction in tax rates and an increasing applicable credit amount. Estate planning during this phase-out period will be important for everyone. However, it will be extremely significant for those who are aged or in ill health, or who otherwise might not be expected to survive the eight-year period until final repeal. One or more of the following strategies or considerations might be appealing. Initial planning considerations The focus for an older individual unlikely to survive to repeal would be the reduction of the value of his or her estate for estate tax purposes, including the implementation of various techniques under current estate planning practice to transfer property at little or no gift tax cost. While the younger person in good health may seek to minimize the gift tax, he or she may more likely choose to postpone any immediate or future transfers. An older person who may not have otherwise provided for his or her surviving spouse might consider the establishment of a trust for the surviving spouse’s benefit. The trust should be established in order to defer the estate tax in the situation where one spouse is likely to die prior to repeal, and the surviving spouse may survive until after repeal -- if, in fact, repeal ever really occurs. It might be advantageous to immediately use the increase in the applicable exclusion amount, which now will also have an impact on the amount that can be transferred free from the generation-skipping tax. Gift tax retention The gift tax was always considered supplemental to the estate tax. The question arises, why was the gift tax retained? Retention was apparently deemed necessary because, as noted by several commentators, complete repeal of all transfer taxes would have led to a situation whereby taxpayers could drastically reduce or altogether avoid income taxes by way of transfers to relatives or others in lower tax brackets. Effective planning techniques Many currently used planning techniques involving lifetime transfers should remain effective. Of course, the use of lifetime giving in conjunction with the $10,000 annual exclusion and the gift splitting provisions between the spouses will continue to be an important planning device to shift assets to the next generation without depleting the existing estate. An installment sale to an intentionally defective grantor trust can still be beneficial as a freeze of the value of the transferred assets with the only gift being the initial contribution to fund the trust. The use of the family limited partnership or limited liability company or other closely held business interest in order to take advantage of appropriate discounting remains beneficial. Life insurance will still play a role in estate planning after full estate tax repeal. You may wish to insure against the potential capital gains tax resulting from carryover basis. In life insurance trusts, it may be useful to have provisions added allowing for distributions of the policy during the grantor’s life, to allow the trustee to distribute out the policy as the trustee determines, taking into account eliminating any liability on the trustee for so doing. Decreasing term life insurance may also be useful, decreasing as we near estate tax repeal. The danger, however, is that the estate tax will not vanish as scheduled, and it may then be more costly or impossible to obtain replacement insurance if needed to pay the tax. Reviewing will provisions In reviewing your will, a close review should be made of the provisions disposing of the unified credit exemption equivalent. Many of these provisions are drafted as a formula equal to the maximum amount that can pass free of federal estate tax. Under current practice, this amount does not pass outright to the surviving spouse and may even be directed away from the spouse. As the applicable exclusion amount increases, the resulting effect on many testamentary schemes may be to substantially reduce what the spouse receives, even to the point of inadvertently disinheriting the spouse or giving rise to the spouse’s right of election against the will under state law. Carryover basis Effective for persons dying after Dec. 31, 2009, the step-up in basis at death rule will be eliminated and thereafter, property acquired from a decedent will generally acquire a carryover basis. The act provides for a limited step-up in basis rule: Up to $1.3 million in estate property can be stepped-up, and an additional $3 million in property passing to the surviving spouse can be stepped-up. If an individual has not kept adequate records and is unsure of the basis of his or her assets, they might consider a sale or transfer of the property during his or her lifetime. While doing so will not necessarily avoid a dispute with the Internal Revenue Service over basis, the individual’s ability to provide facts in furtherance of his or her claimed basis might lead to a better settlement with the IRS than the executor could later obtain. On the other hand, if, because of advanced age or ill health, he or she seems unlikely to survive until after the end of 2009, and holding on to the asset still makes sense from an investment point of view, a lifetime disposition of the asset may needlessly squander the possibility for obtaining a stepped-up basis under pre-2001 act rules. If this were the case, the lifetime disposition would probably not be wise. A charitable remainder trust established at death after repeal would also serve to eliminate the impact of carryover basis because a charitable remainder trust would not have income recognition on the potential gain. The value of the noncharitable interest passing to family members would not be relevant as there would be no estate tax, and the need to obtain an estate tax charitable deduction would no longer exist. In the upcoming weeks and months, numerous estate planning strategies will likely surface. It should be interesting to see the ultimate impact of the new law. Allen Bingham is a partner with the accounting firm of Mikunda, Cottrell & Co.  

Palmer company makes high-resolution survey of Cook Inlet

When pioneering navigator Capt. James Cook entered the inlet that eventually was to bear his name, sailors’ arms were likely weary from heaving lead lines for constant depth readings. "The Inlet must’ve driven him nuts,’’ said Bob Kohut, a hydrographer with Terra Surveys LLC. "Cook Inlet is like a huge river. ... It has a dynamic bottom.’’ Like winds that shape and reshape desert dunes, the Inlet’s tidal action and currents constantly change the contours of its depths, and that makes life tough for navigators, Kohut said. The National Oceanic and Atmospheric Administration has hired Kohut’s Palmer-based firm to perform a hydrographic survey of about 85 square miles of Cook Inlet, including Knik Arm and the approaches to the Port of Anchorage. NOAA is spending $18.1 million this year nationally for seafloor mapping; $11 million of that is being spent in Alaska. Nearly $2 million is being spent in Knik Arm alone. The work in Alaska also is being done by NOAA’s 231-foot research vessel Rainier and other contractors, including LCMF Inc., a subsidiary of Ukpeagvik Inupiat Corp., Barrow’s village corporation. Two crews from Terra Surveys working 24 hours a day, seven days a week are collecting depth soundings using a state-of-the-art multibeam sonar, capable of collecting more than 3,000 soundings a minute. The technology -- which is only a few years old -- can survey the entire seafloor, instead of just parts of it as was done with single-beam sonar or lead lines and sounding poles. According to Terra Surveys officials, the system, which costs about $750,000 to outfit one vessel, requires precise positioning by Global Positioning System and corrections radioed from shore to one of the company’s boats. Compensation for the vessel’s pitch, roll, heaving and heading are done with devices like those found on missile guidance systems. Crews have been performing the hydrographic survey west of Fire Island past Port MacKenzie to just north of Cairn Point. The data is collected while on one of the company’s 31-foot boats, cruising at up to 11 knots, within designated grids. Crews obtain data traveling back and forth within the grids, not unlike mowing a yard, Kohut said. Depths of the Inlet range from 60 to 200 feet, Kohut said. Of most concern are shoals that are migrating into shipping lanes, he said. The company began its survey in early May and expects to finish by mid-August. When completed, the survey will contain some 1.2 billion soundings, requiring nearly 200 gigabytes of data storage. The survey data is processed in the company’s Palmer office and then turned over to NOAA to be used for new nautical charts for marine navigation. Updated charts, said Doug Baird, NOAA navigation adviser in Anchorage, "Helps everybody that’s on the water and gives everyone information to help keep boats off the rocks.’’ It was ship groundings nationwide and in Alaska that helped increase funding for NOAA, which constantly battles liability cases from vessel owners who blame outdated charts for running aground, Baird said. This year, Baird said, about 1,300 square miles of Alaska waters will undergo hydrographic surveys. "That represents one-tenth of 1 percent of the water we are responsible for,’’ Baird said, emphasizing the need for increased funding for updated and accurate charts. Baird said it takes up to two years from the time hydrographic data is gathered to the time a chart is published. He said NOAA is working on speeding that process so that charts are as accurate as possible, especially in waters like Cook Inlet where the depths are forever changing. "One of the issues we are trying to address is ensuring charts aren’t obsolete by the time they get to mariners,’’ Baird said.  

Oil companies to start sonar study for Beaufort Sea gas route

FAIRBANKS -- The major North Slope oil companies are poised to launch survey vessels from Prudhoe Bay this month to scout a proposed northern natural gas pipeline route, despite the fact that the route is widely condemned in Alaska.The "Over-the-Top" pipeline route would transport the North Slope’s huge natural gas reserves offshore to the Canadian Arctic, then south along the MacKenzie River on the way to the Lower 48.That route is roughly 350 miles shorter than the main alternative, a route paralleling the trans-Alaska oil pipeline to Fairbanks, then along the Alaska Highway.The Beaufort Sea proposal faces opposition from Alaskans concerned that jobs and gas would bypass the state. A state law was even passed with the intention of killing the Beaufort Sea route."At the same time this (over-the-top route) survey is going on, we have people walking the trans-Alaska pipeline route," said Curtis Thayer, spokesman for the pipeline consortium of BP, ExxonMobil Production Co. and Phillips Alaska Inc.The sonar study of the Beaufort Sea is slated to begin in mid- to late July, pending the expected issuance of a permit from the National Marine Fisheries Service.A pair of survey vessels would scout near the shoreline of the Beaufort Sea off the northern coasts of both Alaska and Canada.The vessels would chart the sea floor to find any hazards there.There have been similar studies in the Beaufort Sea, Thayer said, but this is the first by the pipeline consortium."We don’t know what the bottom of the Beaufort Sea looks like," Thayer said. "We don’t know what we are going to find."The companies are conducting a $75 million feasibility study on possible pipeline routes and design.Thayer, the spokesman for the industry consortium, said the law barring issuance of permits for the Beaufort Sea route is an issue to be dealt with later."That is a discussion that needs to be held between the state and the (companies) down the road, once a route selection has been made," he said.Thayer said it might become a question of whether the state is willing to lose a natural gas pipeline project entirely if the northern route turns out to be the only one that would be profitable.State legislators and the governor say the market is hungry for Alaska’s natural gas and sending it across the Beaufort Sea would mean allowing an Alaska-owned resource to be extracted with minimal benefit for state residents.The Fairbanks-based Northern Alaska Environmental Center says a pipeline should not run just offshore of the Arctic National Wildlife Refuge.A national environmental group, the Natural Resources Defense Council, recently announced its opposition for the same reasons. Both environmental groups say an Alaska Highway route would be preferable.The influence of Canada, however, will be a huge factor in any route decision.Leaders of the Yukon Territory favor an Alaska Highway route. But officials in the Northwest Territories want the line across their land in the MacKenzie River valley, providing local jobs and allowing their gas reserves to be developed as part of the same project.Late last month, a group of aboriginal leaders in Canada, representing some of the Northwest Territories land that would be crossed by the MacKenzie River route, publicly endorsed the proposal.Houston-based Arctic Resources Company Ltd., which is pushing the MacKenzie route, is suggesting the northern Canadian portion of the pipeline could even be owned by the aboriginal groups of that area."The endorsement of the aboriginal leaders marks a major milestone in getting to the right answer quickly on this important project," said Forrest Hoglund, chief executive officer of Arctic Resources, which wants to operate the pipeline.

One stop shop

Editor’s note: This week’s Focus looks at some of Alaska’s fastest growing industries. We start with health care, which has grown 59 percent over the last decade and will continue to be a growth leader as the population ages, according to state labor economist Neal Fried. We also profile several engineering firms, another fast-growing sector that serves as a bellwether for the entire construction industry; and air cargo, expected to double over the next 20 years. Champions of outpatient care believe that patients lying around in beds are not only costly, but unhealthy. At the forefront of the movement is HealthSouth Corp., the nation’s largest provider of outpatient surgery and rehabilitative services, with more than 2,000 facilities. HealthSouth entered the Alaska market in 1996 when it purchased the Alaska Surgery Center. HealthSouth now operates nine facilities throughout the state. Today its most celebrated venture in Alaska is the new three-story Lake Otis Medical Plaza in Anchorage, scheduled for a grand opening in September. This new "integrated service plaza" is one of a kind in Alaska, combining HealthSouth’s surgery center, diagnostic center and physical therapy center under one roof. The company is blending the three entities for a more cost-effective and patient-friendly approach to health care, said Aaron Wollrich, marketing director for HealthSouth. Advantages to this model include increased efficiencies, such as consolidating the billing services and sharing staff.

Investing in employees, even in down times, pays a big dividend

Usually, the first thing out the window during an economic downturn is training and development. That’s been true during recent times as well. Most companies have cut back on sending people to conferences and looked hard at cutting other expenses.Leading edge companies that are still continuing to invest in training and development will come out far ahead of those other businesses whose only management strategy is to cut, slash and burn. Training, education and degree completion programs have become one of the most desired employee benefits available. Among younger job seekers, the opportunity to learn new skills is the No. 1 benefit.They value the opportunity to advance and make more money. They also want to make a bigger contribution and have a fear of failing or falling behind in a competitive world.Satisfying this desire with training accomplishes personal and organizational goals. Well-trained employees are more capable and willing to assume more control over their jobs. They need less supervision, which frees management for other tasks.Employees are better able to answer the questions of customers, which builds better customer loyalty. Employees who understand the business complain less, are more satisfied and are more motivated. All this leads to better management-employee relationships.Last year an American Management Association survey of 352 human resources executives confirmed that certain enhancement issues were of top importance to employees and improved retention."Investing in employees’ future is more important than immediate compensation," said Eric Rolfe Greenberg, AMA’s director of management studies. "Programs that improve work skills and future career development are seen as particularly effective."The AMA survey identified these skill enhancement techniques and the percentage of companies employing them as a retention strategy:* External conferences and seminars, 78.1 percent* Tuition reimbursement, 67.3 percent* Managerial training, 66.8 percent* Company support for degree, 62.2 percent* Interpersonal skills training, 56.8 percent* Technical training, 54.5 percent* Employability training, 35.2 percentHere’s a startling fact: In a study of more than 3,100 U.S. workplaces, the National Center on the Educational Quality of the Workforce found that on average, a 10 percent increase in work force education level led to an 8.6 percent gain in total productivity. But a 10 percent increase in the value of equipment increased productivity just 3.4 percent.In addition to better productivity, organizations that emphasize employee development make a lasting impression and earn lasting loyalty. Years ago when I was in the military, I took the time to coach one of my soldiers on getting a college education. We would sit down regularly to discuss his plans for the future. When we were transferred to different organizations, we lost track of each other until years later, when Sgt. White called me.Sgt. White had taken my advice and gone to college. Now the Army was promoting him, and my interest in his future had made such an impact on him that he wanted me to come to Fort Bragg, N.C., to pin on his new rank. This was a great honor. I’ve never forgotten what he told me: "Sir, you were the only officer who took the time to help. I can’t tell you how much that meant to me."Gregory P. Smith leads the management consulting firm called Chart Your Course in Conyers, Ga. He can be reached via e-mail at ([email protected]).

No TWA changes in sight

Now that American Airlines has purchased Trans World Airlines, no changes are slated any time soon for either airline at the Ted Stevens Anchorage International Airport.American Airlines in April bought the assets of TWA through U.S. Bankruptcy Court for $625 million in cash and the assumption of aircraft operating leases. For now, the airlines say they will operate independently, including separate reservations systems and aircraft.But the buyout has caused changes elsewhere. In Washington, D.C., TWA lost a highly coveted space at the Ronald Reagan National Airport, allowing Alaska Airlines to win landing rights there last month.TWA will stay in Anchorage, at least for now, according to airline officials."We have no plans for any changes at Anchorage, either for ground crew or flights,’’ said Julia Bishop-Cross, a TWA spokeswoman in St. Louis, Mo."There are still a lot of questions still unanswered about how things are going to shake out,’’ said Mark Slitt, an American Airlines spokesman in Fort Worth, Texas. "It’s too soon to tell.’’American serves Anchorage only during the summer months, with one flight a day. TWA runs two flights a day to Anchorage and three on Fridays, year-round.Neither airline has employees in Anchorage. Instead, all ground service and cargo handling are done by other airlines.TWA contracts out its ground service and cargo handling to Northwest Airlines; Alaska Airlines handles cargo and ground service duties for American Airlines.

Federal, state studies move Red Dog Mine port expansion forward

Feasibility studies by federal and state agencies on a planned expansion of the Red Dog Mine port on the Chukchi Sea northwest of Kotzebue are slowly moving forward. The project would involve extending the current dock to deeper water by building a trestle-type ore loading facility. Ships would be able to load ore directly at the dock rather than have ore lightered out in barges, which raises costs and creates environmental risks. Cominco Alaska Inc., operator of the Red Dog Mine, and Alaska Industrial Development Authority, the state development agency that owns the port and the 52-mile access road to the mine, hope to have an environmental impact statement review under way next year and have the project under construction in 2006. The project will cost between $150 million and $200 million. Red Dog, operated by Cominco in partnership with NANA Regional Corp., the landowner, is already the largest zinc mine in the word, but the entire region has potential for several more mines, according to John Key, Cominco’s manager for Alaska. The company has identified an additional ore body adjacent to the existing mine, although deeper, as well as a significant new discovery of ore 6 miles north, which would require a separate, underground mine. But a larger port is needed to handle more ore shipment. The existing facility is at capacity with current production from Red Dog, according to John Wood, AIDEA’s manager for the project. The U.S. Army Corps of Engineers is now doing an analysis of wave and wind effects on an extension of the ore loading dock at the current Red Dog port, and on offshore dredging needed to allow large ore ships to load ore directly at the dock rather than having ore "lightered" on barges to ships anchored in deep water a mile and a half offshore. AIDEA itself is doing feasibility studies of expanded onshore facilities to make Red Dog a regional port capable of handling bulk fuel storage and general cargo for delivery to villages in the region, as well as handling ore shipments from new mines in the region. Beside new zinc mines around Red Dog, there is possible development of coal resources 90 miles further north of the Red Dog Mine, as well as potential copper and other base metals mines in the Ambler mining district, east of Kotzebue, according to AIDEA officials. One benefit of extending the dock is lowering the cost of fuel shipped into the region. Wood said that unloading diesel fuel directly from a tanker at a larger dock would save 17 cents a gallon over the current method of shipping fuel to the port in small barges, which can unload at the present dock. Cominco uses 20 million gallons of diesel fuel yearly to support mining operations, so this is a substantial savings, Wood said. The company will not use tank ships now for Red Dog because of the risks of fuel spillage if the fuel is lightered ashore. Since the larger port would allow fuel to be delivered to nearby communities from Red Dog, the 17-cent benefit would also be extended to consumers in the area, Wood said. Securing funding for the port expansion is another problem to be tackled. AIDEA has existing authorization from the state Legislature to issue $80 million in revenue bonds for the project. Companies which use the dock for shipping ore, such as Cominco, would repay the revenue bonds. The Corps of Engineers can also contribute up to about $20 million of the offshore dredging costs, which could be as much as $40 million depending on how large a dredged channel is needed. That means about $50 million to $100 million in other funding for the expansion must still be secured, Wood said. Its possible that some funds might come from the annual allocation of federal transportation money to Alaska. That could follow completion of a transportation master plan for the Northwest region, which is now under way by the state Department of Transportation and Public Facilities. If the Red Dog port becomes a regional port serving communities as well as resource development, it may be eligible for federal transportation funds. Cominco, NANA and AIDEA teamed up in 1986 to build the port and road to the Red Dog Mine. In recent years Cominco has been able to increase the mines production by 35 percent, to about 1.4 million tons of lead and zinc concentrate yearly. The mine and related support work now employs 485 people in what was one of the poorer regions of Alaska. Red Dog also contributes $4 million in funding to the Northwest Arctic Boroughs $7 million annual budget.  

Business Profile: Potelcom Supply Inc.

Name of the company: Potelcom Supply Inc.Established: 1988Location: 1125 Orca St., AnchorageTelephone: 907-274-8525Major focus of services: Potelcom Supply Inc. distributes products for the telecommunications and electric utility industry. The company chiefly specializes in medium- to high-voltage commercial projects rather than residential work.History of the company: The firm was originally operated in Alaska as Anixter from 1976 until 1988 when the national firm decided to redirect its focus. Gary Erber, who was leading the office at the time, bought the Alaska division of Anixter. In 1993 Erber added partner Kevin Hudson.One major past project for the company was supplying products for installation of electrical transmission lines between Anchorage and Fairbanks in the early 1980s.Recent projects include supplying parts and cable for BP Exploration (Alaska) Inc.’s Northstar modules among other work for BP. Potelcom Supply also is a supplier for Chugach Electric Association and supplies other Alaska utilities. The company typically records annual revenue between $15 million and $18 million.Potelcom Supply typically employs about 20 full-time workers.Top accomplishment of the company: Erber, Potelcom Supply’s president, is proud of his firm’s large supply of wire and cable which usually allows quick fulfillment of orders. "We bend over backwards to do whatever the customer needs," he said. Some employees’ industry background can pay off for customers, Erber said. "We have such experienced people that we have the expertise to save people a lot of money and catch mistakes before they order it. Maybe that’s why people come back."Major player: Gary Erber, president, Potelcom Supply Inc.In 1981 Erber was transferred to Alaska as district manager for Anixter. In 1985 he moved to Seattle to serve as regional vice president for the company, leading the Pacific Northwest region including Alaska. He returned to Alaska, acquiring the division office in the late 1980s.-- Nancy Pounds

Wireless guru

"Every kid in Alaska ought to have one of these!" exclaims H.A. "Red" Boucher, holding up a Compaq handheld device in a wireless cradle that keeps it connected to the Internet at all times. "They can do their homework on it, take it to school and automatically update it." The former lieutenant governor, legislator, mayor, baseball team owner and Navy signalman still gets excited about how technology can be used to improve people’s lives. These days, he’s singing the praises of wireless technology as a low-cost way to link people in small communities. It’s an idea that began in Toksook Bay, a village of a couple of hundred people some 100 miles west of Bethel. The town has served as a testbed for many of Boucher’s ideas. Now, those ideas are spreading to include Native American reservations, inner city ghettos, and even villages in other countries. It’s a testament to Boucher’s enthusiasm -- and to his clout in opening doors and getting people to listen to him. For years, Boucher has contributed his ideas and feedback to the Massachusetts Institute of Technology Media Laboratory, thanks to a long-term friendship with its executive director, Walter Bender. He visits the nationally renowned high-tech think tank at least once a year. And he always seems to be way, way ahead of the curve when it comes to technology. He was one of the first users of computer-based bulletin boards, a pre-Internet form of text communication, and he was one of the first owners of an Apple computer. "I have a long telescope," is how he put it. Boucher said he first became aware of the possibilities of wireless data transmission on one of his trips to MIT in 1992. Acting on a recommendation from Bender, he arranged a tour of a nearby company called Wave Access, founded by a group of Israeli scientists. They were using a technology called "spread spectrum" to transmit data, a technique that allows the sharing of radio bandwidth without interference.

Kodiak, math programs win grants

The Alaska Science & Technology Foundation board of directors recently approved more than $102,000 for a technology education project and teachers grants.The state agency will provide $85,000 to a consortium of Kodiak educators for Tech Leaders for the 21st Century, a project by the Kodiak School District, the Kodiak campus of the University of Alaska and Kodiak Native organizations. The organizations will provide $117,000 worth of matching funds and in-kind support.As part of the project, 100 refurbished computers will be placed in area villages, and students from 12 schools will learn to design, create and market Web pages for personal and commercial use. Instructors also will teach students to install, repair and network computers as part of a program that may lead to technical certification.Also, ASTF approved $17,659 in grants to Alaska teachers who aim to implement innovative math and science projects in the classroom. ASTF awards grants up to $5,000 per teacher through the Grants to Teachers program.

Congress makes big 401(k) changes

After four abortive attempts in prior sessions, Congress finally enacted, and President Bush signed into law, major 401(k) and pension law changes. These changes are generally effective for plan years beginning in 2002. The new pension provisions are part of the budget bill, known officially as the Economic Growth and Tax Relief Reconciliation Act of 2001. This column will focus primarily on the increased contribution limits for 401(k) plans, ndividual retirement accounts and SIMPLE IRAs. Later columns will deal with other important pension law changes enacted as a part of the new law. Larger 401(k) contributions The 401(k) elective contribution limit -- the amount a participant can contribute out of her paycheck on a pre-tax basis -- was reset to $7,000 in 1987 by the Tax Reform Act of 1986. Cost of living adjustments in that law provide for incremental increases in the limit as inflation takes its toll. The $7,000 limit has increased to $10,500 for both the 2000 and 2001 calendar years. EGTRRA increases that limit to $11,000 for the 2002 plan year with $1,000 programmed increases for the 2003 through 2006 plan years. Thereafter, cost of living adjustments will occur in $500 increments. In 2006, an employee will be able to make elective contributions to a 401(k) plan in the amount of $15,000, if the employer’s plan document so permits. Special catch-up provisions For participants who are 50 or older, additional elective contributions may be made. The additional contribution that can be made in 2002 is $500, with programmed $500 increases for 2003 through 2006 calendar years. Thereafter, there will be cost of living adjustments in $500 increments. In order to be able to make these catch-up contributions, the participant must have contributed the maximum amount allowed by law ($11,000 in 2002) or the amount permitted by the plan document, if less. These additional contributions are not subject to nondiscrimination testing. In 2006, a participant who is 50 or older will be able to make elective contributions equaling $17,500 ($15,000 base plus $2,500 in catch-up). 25 percent of pay limitation removed Also effective in 2002, there is no longer a 25 percent of pay limit imposed on annual additions (contributions and forfeitures allocated to a participant’s accounts in qualified plans sponsored by her employer). What this means is that a participant earning $30,000 may be permitted to contribute $11,000 to a 401(k) plan in 2002 even though that contribution exceeds 25 percent of pay. Many second-wage earners will be able to substantially increase the amount contributed into a 401(k) plan. The contributions must still flow through payroll, so the effective limit on contributions will be gross wages reduced by FICA, Medicare, health insurance premiums and other deductions withheld from pay. SIMPLE IRAs In 2001, the maximum elective contribution a participant can make to a SIMPLE IRA is $6,500. In 2002, this amount increases to $7,000, with $1,000 increases through 2005. In 2005, the maximum elective contribution will be $10,000. Thereafter, there will be $500 incremental increases as inflation erodes the value of the dollar. There is also a 50-or-older catch-up provision for SIMPLE IRAs. The increases are $500 per year, commencing in 2002. Hence, in 2006, a participant in a SIMPLE IRA who is 50 or older will be able to contribute $12,500 per year. IRAs Increases to IRAs are similar to those discussed above. The contribution limit for regular, both deductible and nondeductible, and Roth IRAs increases by $500 for calendar years 2002 through 2007, inclusive. In 2007, an individual will be able to contribute $5,000. Thereafter, there will be cost of living adjustments in $250 increments. There is also a special catch-up provision for individuals 50 or older. Starting in 2002, such an individual may increase her contribution by $250 for each year through 2007. In 2007, an individual 50 or older will be able to contribute $7,500 to an IRA. The increase in deferral limits for all of these plans is significant for more highly compensated employees with discretionary income. However, it is doubtful that these enhanced provisions will benefit lower paid workers, since discretionary income for this group is frequently limited. Although the new law does grant a nonrefundable credit to lower income participants ranging from 10 percent to 50 percent on contributions up to $2,000 to one of the programs discussed above, based on the taxpayer’s income level, the question remains whether these credits will actually encourage lower wage earners to participate. J. Michael Pruett is president of Cache Pension Services, Inc.

Security expert makes point by breaking in

Imagine someone breaking into your company’s computer network and gaining complete access to every file on the system -- including lists of passwords.That’s exactly what Todd Clark did the other day to an agency he declined to name. It took him about one hour."I didn’t even need a password to get in," he said. "I had ’back door’ access."Clark wasn’t out to destroy files. He was proving a point to a potential customer about how vulnerable most networks are. Clark, owner of a newly formed company called Denalitek, Inc. is drumming up business by offering a free evaluation of any company’s network security -- and then charging a fee to make the network safe and keep it safe.Clark specializes in Microsoft products, with knowledge of both the company’s operating systems and its software. He said that gives him a competitive advantage, since most attacks consist of small programs custom written to go after vulnerabilities in the operating system.Clark’s software credentials include writing a program called Autopilot, which automatically created a custom menu for each user of a network based on what files they were allowed to see. He said he sold the pre-Windows software for royalties.In 1988, Clark was hired by Network Business Systems of Anchorage, where he stayed for 12 years, rising to the level of vice president. In early June, he left the company to devote his energies full-time to Denalitek.The new company provides network management for companies that are too small to afford their own information technology staff. While Clark acknowledges that there are many other firms offering such a service in Anchorage, he says he differentiates his service by providing unique task tracking software for his customers.The software, called AdminPoint, is accessible via a Web browser. It allows clients to leave requests for repairs or changes for their service technician. The technician, who typically visits the company once per week, can log into the same area and see those requests, along with other regular maintenance tasks.Those tasks, says Clark, include installing "patches," which are software changes provided by Microsoft that are designed to block newly found vulnerabilities. Clark said failure to keep up with the frequently released patches can leave networks very vulnerable to attack. So can improper installation of the network in the first place, he said. It’s those kinds of oversights that Clark can find with his security audits.Clark said protecting the information on computer networks is becoming increasingly important because two federal laws now require it. One is aimed at protecting the privacy of medical records, which affects the entire health care industry.Another federal law requires financial services companies to take steps to protect their customers’ privacy -- and to tell their customers what those steps are. Clark said people should have been receiving notices from their mortgage and credit card companies in recent weeks because the disclosures were required by July 1.In addition, Clark said VISA is requiring any merchant accepting so-called "card not present" purchases over the phone or the Internet to have a full array of security features installed on their systems to guard against fraud.Clark said that in addition to keeping up with software upgrades, businesses wishing to beef up their security can install a "firewall," a mix of software and hardware that keeps most attackers at bay by limiting the kinds of traffic allowed into the network.Clark said firewalls can range from software on an individual PC to a separate box that plugs in between a corporate network and the Internet. In an era with "always on" cable modem or digital subscriber line connections, he said such protection is highly recommended.Without it, Clark said intruders can remotely install software that records every keystroke on a PC -- including passwords to Internet banking and other sensitive sites."This is why people should be concerned," he said. "It’s like asking people to stand and watch over your shoulder while you use an ATM machine."

Ketchikan veneer plant to make another AIDEA pitch in August

Gateway Forest Products, a new Ketchikan-based company operating a wood veneer manufacturing plant, will be back before the Alaska Industrial Development and Export Authority’s board in August with a new request for financial assistance, says its president, Jim Erickson.At its June meeting AIDEA’s board declined to act on an application from Gateway and Wells Fargo Bank for the authority’s participation in a $14 million operating loan to the Ketchikan company, which experienced financial problems at the start-up of its veneer plant in January and filed for bankruptcy protection."They didn’t turn us down," Erickson said of the AIDEA board meeting in June. "They told us they needed more information."Bob Poe, the authority’s executive director, agreed."We’re interested in working with Gateway. The company does represent a viable business," he said."Its plant is in operation, employing two shifts, making a high-value manufactured wood product from low-value trees. It’s a major employer in Ketchikan. Still, it must make financial sense to our board," Poe said.Poe said the board was uncomfortable acting on the loan participation request before Gateway had finalized its bankruptcy reorganization plan."There are several options being discussed. It’ll be up before our board again at its Aug. 9 meeting," he said.An independent consultant’s report indicates that Gateway is well positioned to take advantage of increasing demand for wood veneer. Despite Gateway’s location in Ketchikan and added transportation costs, the Beck Co., a Portland-based consulting firm specializing in the forest products industry, said the Ketchikan company has a cost advantage over competitors in the Pacific Northwest because of rising costs for logs in Washington and Oregon.In a related development, the Ketchikan Gateway Borough Assembly agreed to extend repayment of a $2.5 million loan to Gateway from June 30 to Sept. 15 based on progress the company is making in its reorganization and financing plans.Gateway was formed by former managers of Ketchikan Pulp Co. and Sealaska Timber Corp. after Ketchikan Pulp Co. closed its pulp mill in the Southeast city.The start-up company, aided by some $15 million in loans from the borough, purchased an operating sawmill from Ketchikan Pulp and built the veneer plant at the site of the former pulp mill.Problems developed when there were construction cost overruns on the veneer plant and its start-up was delayed from September of last year until January, according to a report put together by AIDEA’s staff.The company was also hit by declining prices in lumber markets, affecting revenues from the sawmill, while it was also stuck with fixed-price contracts to purchase logs from the U.S. Forest Service.The combination of these factors had a $6 million negative effect on the company just as it was starting operations of the plant in January, the AIDEA staff analysis indicated."This year we’re in a lot more flexible position," Erickson said. "Veneer markets have improved in the last month and a half and our plant is now operating."Erickson said the company is now buying logs from a variety of sources, including from the Tongass National Forest, from loggers on state and state Mental Health Trust lands, and from private landowners.There are always concerns about timber supply from the Tongass National Forest, "but we can support the plant at current harvest levels in the Tongass," Erickson said. Gateway is also discussing purchases from British Columbia, Canada, and from other areas of southern Alaska, such as Yakutat and Afognak if transportation problems can be worked out.Erickson said the company will have its reorganization plan completed by mid-July and that a variety of longer-term financing options are being discussed, including a plan that could include AIDEA and U.S. Department of Agriculture loans. A plan with KeyBank is also being examined, he said.The plan presented to AIDEA’s board in June by Wells Fargo would have AIDEA lending $10 million over 10 years and Wells Fargo lending $4 million over four years. The money would be used for operations, but would also retire an equipment loan from Foothills Capital, a Wells Fargo subsidiary.Gateway began commercial production at the veneer plant Jan. 19 with one shift and began a second shift in April, according to Cliff Skillings, Gateway’s director of corporate relations. The business plan is to have a third shift operating in the spring of 2002, he said.Strips from logs as small as 6 inches in diameter are used to make veneer in sheets 8 feet by 4 feet or 2 feet, Skillings said. Sheets of veneer are bundled and shipped to the Port of Tacoma every two to three weeks and then trucked or shipped by rail to customers in Oregon, he said.

State registers digital signature firm

Alaska is one step closer to making digital signatures a reality with the approval in late June of Digital Signature Trust as a "trusted third party" to verify that people and companies are who they say they are."Digital Signature Trust is the first company to do business here and we’ve just registered them," said Lt. Gov. Fran Ulmer. "It’s the next step in a multistep process."The previous step was the approval last year by the Legislature of a law allowing digital signatures to be recognized as legally valid and enforceable. The U.S. Congress has also approved the signatures on a national basis.Why the excitement? Because digital signatures will allow contracts to be signed and other transactions requiring signatures to go forward without putting two people in the same room -- or physically shipping a signed piece of paper from one party to the other.According to a DST white paper on the subject, the need for legally binding signatures is the prime reason the "paperless office" has never really happened. After all, an original signature proves identity, various delivery methods ensure that no alteration occurs to the document during shipping, and yet another signature proves delivery to the proper person. It’s a lot of paperwork, but it works.Now try that on the Internet, where every piece of data is subject to interception and/or modification, where identity theft is rampant, where it’s often difficult to determine if a message ever got to its intended recipient -- or if it got there in one piece.Digital signatures are designed to solve all these problems.The first step is to verify the identities of the parties to a transaction. That’s part of what DST does, according to the company’s director of government services, Karen West. She pointed to Washington, another state that has chosen DST as its certifying authority."In Washington, we collect the personal information and verify it," West said. "The states themselves can do it. Alaska hasn’t decided on any process -- they will probably do a little of each."States and corporations can buy digital signatures, also called certificates, for their employees or their vendors, but certificates are issued only to individuals, West said. Certificates cost about $20, she said.Once an individual’s identity has been verified, DST gives them a digital signature, which is really nothing more than an encryption key. To "sign" a document is actually to scramble it using your personal code. The document is then sent over the Internet, where any modification will garble the message. The person at the receiving end uses his or her own digital certificate to unscramble the message.West said anyone who has bought something on the Internet via a secure server has used a limited type of certificate, which scrambles the information between the buyer and the seller so it can’t be intercepted. A digital signature encrypts the channel, too, she said -- but it also assures the identities of both parties."You know it’s and they know it’s you," she explained.West said DST provides a warranty of $100,000 per transaction and $250,000 per certificate.West said that her company’s strategy is to build up an infrastructure that allows transactions to occur at all levels, allowing commercial entities to do business with states and the federal government, while making sure states can communicate with one another and with federal agencies.West said one driving force for the technology is a federal law requiring the privacy of medical records."State health departments and insurance companies are some of our biggest customers," she said.Likewise, West predicts that new federal requirements for privacy in the financial services industry -- especially the mortgage industry -- will drive new customers to DST.In Alaska, Ulmer says she’s gotten the most inquiries about digital signatures from the banking and oil industries. She expects that transactions involving oil leases with the state Department of Natural Resources will be among the first to use digital signatures.Ulmer said that she expects the digital signatures to also be valuable for international transactions."It should simplify international business because we’re a big exporter," she said.Ulmer said she expects the use of digital signatures in Alaska will start slowly and grow over time."Like any new technology, we’ll have to see who decides it’s in their best interest," she said. "We’ll see how it goes."

Slow season for Juneau builders, remodelers

JUNEAU -- The 2001 building season is turning out to be slower than usual for some local contractors.Juneau issued 354 building permits through June 21, fewer than the 386 issued during the same period last year, according to figures from city building official Chris Roust."There’s been a continuous downturn in construction and remodeling (permits) for the past five years," said Roust. "This summer is not a dramatic downturn. It’s just following the pattern that was established several years ago."The number of new commercial construction permits issued this year -- 15 -- is the same as last year, according to a report issued by the city’s permit center. There also appears to be slightly more commercial remodeling and addition work this summer with 76 permits issued, three more than last year.One of the makeovers is at downtown’s Prospector Hotel."We’re in the last 10 days of remodeling every room in the hotel," said general manager Bridgette Coke. "We’ve added five rooms, put in a large conference room that accommodates 80 people, recarpeted, and put new paint and furniture in every room."Along with the downtown hotel’s facelift, Bartlett Memorial Hospital is revamping its cafeteria and Big Kmart is in the middle of a large remodeling project to make room for a new grocery section.The Juneau School District doesn’t have any major remodeling projects slated for this summer, but there is a lot of maintenance work scheduled in the next few months, according to facilities manager Joe Mueller.One of the new commercial buildings going up downtown this summer is a gift shop on South Franklin, which is expected to open next spring, said Steve Landvik, owner of Viking Contractors, which is working on the building."From what I understand by talking with other people, all aspects of construction is slow this year," Landvik said. "Fortunately, we have a lot of work this summer."

'Captain Carl' pushes, pulls the commerce at Anchorage's port

Carl Anderson doesn’t get overly technical when he describes his occupation."I’ve spent years bumping ships ... pushing them in and pushing them out.’’Nor does he get caught up in lengthy job titles like those that cramp the business cards of some.Around the Port of Anchorage, he’s simply known as "Captain Carl.’’Anderson, 45, is the owner of Cook Inlet Tug and Barge, the only tug service operating at the port.It’s a family business that can trace its roots back more than 60 years in Alaska.Anderson’s father and grandfather in 1938 began hauling passengers and freight in and out of Anchorage. And as far back as Anderson can remember, he’s been part of the state’s maritime community."I was in the Gulf of Alaska when Kennedy got shot,’’ said Anderson, who was 7 at the time and on one of his family’s vessels. As a kid, he learned all aspects of seamanship, from chipping paint to steering ships. Open ocean, however, didn’t sit well with Anderson -- literally."I get seasick,’’ Anderson said. "I didn’t want to go out to sea.’’So in 1974, and just out of high school, Anderson started his tug company, a business that would enable him to use his seamanship skills while hugging the shoreline of Cook Inlet.Today, Anderson owns three tractor-tugs, the Stellar Wind, Glacier Wind and Cosmic Wind.The powerful boats cost $4 million apiece and provide an essential service by towing and pushing ships and breaking ice at the Anchorage port, which serves more than 80 percent of Alaska."What he does is very important,’’ Roger Graves, manager of government and environmental affairs for the Port of Anchorage, said of Anderson. "Those ships would not come in without him.’’Cook Inlet Tug and Barge helps some 80 companies’ ships navigate the Inlet, everything from cargo vessels to oil tankers. And with some of the ships nearly as long as three football fields, nimble they are not.Pushing or pulling the big ships around is no easy task, and it takes the finesse of an experienced tug driver to gently nudge them to the dock or lead the ships safely out to sea."Trying to push a ship 800 feet long that sits 30 feet in the water is like trying to walk with a piece of plywood in the wind,’’ Anderson said.Anderson’s tugs work about a ship a day, year-round. Most of the ships come in during the early morning hours so that freight can be handled during daylight. The tugs, which sometimes work in tandem, usually meet inbound ships about a mile out in the Inlet and escort them the same distance going out. Each trip takes a little more than an hour.All of Anderson’s tugs are just a few years old and are state of the art. He helped design the Seattle-built boats, requiring such things as heated decks and extra-thick steel hulls and an ultra-hard ceramic bottom paint for breaking ice. The tugs also have berthing areas and galleys, spaces normally not found on tugs but that add to the comfort of Anderson’s eight employees.The tugs’ wheelhouses are actually misnamed, as there is no steering wheel or helm. Instead, the tug driver sits in a La-Z-Boy-like chair and controls steerage with a pair of joysticks. Each stick controls an 8-foot propeller inside a huge nozzle that can pivot 360 degrees, enabling the boats to spin like saucers.Driving one of Anderson’s tugs is not unlike playing a video game, he said."It takes a while to learn but teaching someone young is easier than an ’old salt.’ For kids growing up with video games, it’s second nature,’’ Anderson said.The 3,500 twin-diesel tractor-tugs have a top speed of about 15 knots. But most cruising is done at just more than 11 knots or half-throttle, which burns about 60 gallons of diesel fuel an hour. Wide-open, the tugs gulp three gallons of fuel a minute.What they lack in speed is made up with grunt and maneuverability."These boats aren’t made to go fast, they’re made to push,’’ Anderson said.Anderson’s tugs are unique in that they can stop from full speed and reverse within their 85-foot lengths, a feat that perhaps no other vehicle can perform, especially one that weighs some 600 tons.Totem Ocean Trailer Express has two new cargo ships coming on line over the next 18 months, both of which are designed specifically for Alaska and the existing port facility. Neither ship is equipped with bow or stern thrusters, additional propulsion normally found on big ships. TOTE’s ships will rely solely on the help of tugs to moor.Of course, Anderson said, any time additional machinery is fitted to a ship, it adds to its cost. "Interpolation in the hull adds to the resistance to the speed of the ship, and over the long run, that means fuel consumption,’’ he added.Further, he said, the silty waters of the Inlet act as an abrasive, chewing up exposed machinery.For a time, Anderson had the only tugs in Alaska. Now, Valdez is home to tugs that are required to escort oil tankers into Prince William Sound, following the Exxon Valdez disaster.A few companies have tried over the years to compete with Anderson in Anchorage, but all have moved on after they found out there wasn’t enough business to support two tug companies, he said."It’s not that big of a port,’’ Anderson said. "Either they go away or everybody starves.’’At more than 6 feet tall, well-groomed and tan, Anderson doesn’t necessarily look the part of a tug captain; he could easily pass for a corporate type, especially while resplendent in jewelry that is testimony that things aren’t going too bad financially."It’s an honest business that makes a little money,’’ Anderson said. "There’s nobody getting rich around here.’’Still, he said, he’s fortunate to have such an occupation."It’s one of the cherriest jobs in Alaska, working on a tug in a harbor.’’Anderson said he gets several calls a week from people looking to work on one of his tugs, but there are no job openings since most of his employees have been with him for years. That includes his wife, Debbie, who handles the administration duties for the business.His children, Garrett, 15, and Katrina, 17, have both worked on his tugs and have shown some interest in staying with the family business, he said. His eldest daughter, Kristine, is a 20-year-old college student and will likely pursue other career goals, he said.Anderson is not ready to let go of the helm anytime soon."It’s not like I can just hand it over,’’ Anderson said.Time and experience are needed to run a tug business in Alaska, he said.According to Graves of the Port of Anchorage, Anderson has plenty of both."He has years and years of experience. He’s a walking maritime encyclopedia; knows the currents inside and out; knows where the whales are and who’s doing what at the port. And people that require his services know that they can count on him.’’All of those attributes were learned by "bumping boats,’’ and little else, Anderson said. "There’s no book written on it.’’

State, vendor open talks to provide $26 million in phone service annually

State officials are beginning negotiations with a vendor for a $26 million annual contract to provide state government telecommunications services. Jim Duncan, administration department commissioner, said he hopes to award the contract by Oct. 1 -- 14 months after the contract went out for bid.Duncan said the state received three proposals for the new bid, which was first issued in August 2000. He said he is unable to list names of vendors since the procurement process is ongoing.Start-up dates for providing service are part of negotiations, but Duncan hopes to implement the services as soon as possible after the award date.In December representatives from major Alaska telecommunications players AT&T Alascom, Alaska Communications Systems and General Communication Inc. told the Journal they submitted bids.Bids were due Dec. 15.Originally, state officials had planned to award the contract in mid-March, Duncan said. However, the procress has been extended due to the scope of the bid for services, he said."Once we received the proposals and started evaluating them we determined the evaluation process would take longer than expected because they were more complex proposals," Duncan said.Initial evaluations were conducted in January and February followed by private discussions with each vendor in March, he said. On April 30 vendors were to submit any alterations to their proposals refined after discussions with state officials, he said. Final evaluations were completed in May, and by June 1 vendors were ranked, he said."Now we have made the decision to go out and start discussions with the top-ranked vendor," Duncan said.The new contract aims to streamline state telecommunications services.The request for proposal calls for a vendor, including possibly a consortium of companies, to run the state’s telecommunications networks for four years, with two optional one-year renewal periods.The contract covers providing service for wired telephones, data networks, video, paging, cellular, satellite transport, tech support including a help desk and operating and maintaining the state’s microwave system.State telecommunications services are provided either directly by state employees or by 357 vendors at a cost of $21.5 million per year. Five of those vendors do more than $1 million per year in business with the state, and 46 do more than $50,000 per year, according to a press release issued last year by the governor’s office.

Around the World July 8, 2001

STATEClosed Marketplaces available to nongrocers ANCHORAGE -- The state has cleared the way for nongrocers to move into two former Alaska Marketplace locations in the Dimond Center and at Northern Lights Boulevard and Minnesota Drive now that certain conditions have been met.Since companies like Kmart are moving into the grocery business in the state, concerns about Safeway’s dominance of the grocery market have lessened, the state argued in a recent court filing. Second, Northwest Retail Ventures satisfied the state that it could not find a grocer interested in either location. Third, nongrocer retailers have expressed an interest in the properties. Add it all up, and the state decided it made sense to open the locations to other kinds of business, and the court agreed this month.NATIONDrag that privacy notice out of the trashWASHINGTON -- Many Americans greeted the billion-plus "privacy notices’’ in the mail recently with a hook shot into the trash can. That action may become a collective mistake.It turns out those fine-print-filled envelope-stuffers weren’t your typical junk mail.They give people a say in how far companies can spread around a mountain of personal information -- everything from monthly income and Social Security numbers to credit card spending habits and account balances.Under federal law, Sunday is the deadline for banks, credit unions, insurance companies, mortgage providers, brokerage houses and other businesses that collect personal financial information to mail out notices telling people how they handle it. And if companies want to sell that personal information to nonaffiliated businesses, they have to give consumers a chance to say no -- known as "opting out.’’Buried in the fine print, many of the notices offer toll-free numbers to call or forms to mail back that give consumers a limited right to block release of their information. Consumers are under no deadline and can opt out at any time.Economy grows 1.6%, is likely to slow furtherWASHINGTON -- The U.S. economy barely inched forward in the first three months of the year, and President Bush’s chief economist said that growth in the current quarter was likely even worse.The Commerce Department reported June 29 that gross domestic product -- the country’s total output of goods and services -- grew at an annual rate of 1.2 percent from January to March, slightly slower than the government previously thought.Lawrence Lindsey said he believed the economy was growing at an even weaker 0.6 percent rate in the current April-June quarter, based on his review of economic data that has been released so far.That view is in line with many private economists, who have put growth at around 0.5 percent for the second quarter.WORLDWTO tosses Canada’s lumber trade complaintGENEVA -- The World Trade Organization on June 29 rejected Canadian claims that the United States was breaking international trade rules in a dispute linked to the huge North American lumber industry.Canada imposes a total ban on exports of raw logs, which U.S. producers say leads to a glut of lumber domestically and a fall in the cost of items made from logs, such as boards.The U.S. producers claim that the export ban is therefore a hidden government subsidy to the Canadian wood industry. They are also concerned that Canada’s "stumpage’’ system for licensing lumber cutting on provincial land -- which often takes into account social and environmental policy, not just market rates -- is unfair.WTO rules allow member states to impose additional import duties if lower-priced subsidized imports are damaging their own producers.Canada denies that its export ban is a subsidy. Although the United States has never used the administrative action provision, Ottawa took the case to the WTO to pre-empt any future use.Putin governmnet gains control of gas companyMOSCOW -- The Kremlin strengthened its control over the world’s biggest gas company June 29, gaining a majority of seats on the board of Gazprom in a change investors hope heralds the broad reforms President Vladimir Putin has promised for Russia’s economy.Gazprom, which is Russia’s biggest taxpayer and supplies more than a quarter of Europe’s gas, is seen as epitomizing the power a few tycoons and companies have held over Russia’s economy in the past decade.Although the government owns 38 percent of Gazprom shares, the company has resisted attempts to clear up questions about its finances and relationships to other companies.Putin has sought to change that, and his efforts are seen as a test case for reforming several huge Russian conglomerates accused of murky financial dealings.Compiled from business wire services.


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