Pilots bumped from Lake Hood

With her new float slip at the Lake Hood Seaplane Base, Janis Meldrum has joined one of the most exclusive clubs in Alaska. And she only had to wait a decade to do it. "I’m practicing the secret handshake," Meldrum joked. "It makes me somebody now." Meldrum is one of two dozen airplane owners in the last three months to earn float-slip space at the state-owned seaplane base, the largest such facility in the world. She and her fellow pilots were able to lease slips thanks to new enforcement measures that have terminated several old leases. It is perhaps the largest purge of slip space in the seaplane base’s 63-year history. Meldrum got on the wait list at Lake Hood in 1993, and received notification in March that she could lease a space. She plans to put her Cessna 180 on the lake in mid-May when the ice melts. Despite the near 10-year wait, Meldrum considers herself lucky. Many folks who lease one of the 361 float slips at Lake Hood waited 18 years or longer for an opening.

Forest Oil Corp. drilling uncovers more reserves

ANCHORAGE --The fourth exploration well drilled by Forest Oil Corp. from its Cook Inlet platform indicates the Redoubt Shoal field holds 100 million barrels of recoverable oil, a company official said.Earlier estimates showed the company could pump out 50 million barrels or so, said Gary Carlson, head of Forest’s Alaska operations."Each time we drill farther down ... it’s bigger than we anticipated," he said.The well just completed went 20,203 feet, some of that laterally, the deepest such angled hole ever drilled in Cook Inlet, and the limits of the field still weren’t reached, Carlson said. The limits of the drilling rig were reached, though. Total depth was about 13,000 feet measured straight down.A fifth well will be started soon to define the western limit of the field and determine the extent of a significant gas deposit discovered in the Number 4 well.The platform was installed in about 45 feet of water in June 2000. It was designed to work as an exploration platform and then be converted into a production platform if oil was found.Production is expected to begin by the end of this year, and the field could eventually produce in the neighborhood of 25,000 barrels a day.

Disability plans can discriminate

Does your group disability plan discriminate against your most valuable employees? Many plans do, and the employer usually is unaware of the situation.Long-term disability insurance replaces a portion of the income of an employee who is unable to work for an extended time due to an accident or illness such as cancer. Most large employers provide a medical plan to cover the majority of costs for the necessary medical treatment in either of these situations.But what about the paycheck the employee is no longer receiving? The employee’s need for cash to cover expenses such as mortgage payments, groceries and childcare usually remains unchanged. However, the flow of cash into the household changes drastically. A severe illness or injury can also result in the need for daily living care, also known as long-term care, which may not be covered under a medical policy. The high cost for such care can deplete an employee’s savings and retirement funds.A typical group-disability plan will pay disabled employees 60 percent of their pre-disability income up to a maximum benefit, $5,000, for example. An employee will begin receiving this benefit after having been disabled for a specified time, typically 90 or 180 days.For most employees, this plan design is adequate. In some instances, however, especially in professional organizations such as attorney firms or medical clinics, the maximum benefit is well below 60 percent of the monthly income for a segment of the group. This reverse discrimination can leave a large gap in coverage for your most valuable employees.How real is the threat of disability to these highly compensated employees? According to a 1998 study by the National Institute on Disability and Rehabilitation Research, 17.2 million people - one in 10 of the working-age U.S. population - had disabilities that interfered with their abilities to work.In 1994, adults 25 to 64 experienced a total of more than 184 million injuries or illnesses that required medical attention or restricted activity or both. In 1996, 4.4 million U.S. workers were receiving Social Security Disability benefits.Here’s a hypothetical example of how limited disability benefits affect highly compensated employees. ABC medical clinic has 40 employees: 10 physicians plus registered nurses, licensed practical nurses and office staff. The physicians each earn an average of $200,000 per year; the rest of the employees each earn an average of $50,000.ABC provides a group long-term disability plan that pays 60 percent up to $5,000 per year. This plan is adequate for all the employees except the physicians. The physicians earn an average of $16,666 per month; therefore, a 60 percent income-replacement benefit would be $10,000. However, because of the $5,000 limit, the most valuable employees, those who generate income for the clinic, would receive only 30 percent of their monthly income.What can you do about this situation? Most employers assume that the answer is to increase the maximum benefit on the group policy to $10,000. However, in many cases the insurance company imposes restrictions that make it impossible for the employer to provide the desired benefit.One option is to purchase individual disability policies for the affected employees to provide the additional income protection. Many insurance companies will offer a discounted rate for the individual policies if a minimum number of policies, usually three or more, are written. The discount can be as much as 25 percent.Using individual policies to avoid discriminatory group disability plans provides advantages: The individual premium typically is guaranteed not to increase after the policy is issued. Group premiums can and do change annually. Individual policies are portable, so employees can "take it with them" if they leave the company; group plans are contingent on continued employment. This approach allows employees to select riders that will increase benefits as their incomes increase, without having to undergo new medical exams. Over time, individual plans can help to stabilize rates for the group plan.If you sponsor a group disability plan, it’s a good idea to review the plan provisions periodically to be sure it still meets your business needs.Terry Allard is an account executive at The Wilson Agency LLC in Anchorage and president of the Alaska Association of Health Underwriters. She can be reached by e-mail at ([email protected]).

Movers & Shakers April 14, 2002

John Lowrance was recently presented the 2002 Best Practice and Innovation in Seafood Award by World Trade Center Alaska during the 2002 Business of SeaFood Conference and Tradeshow. The award identifies and recognizes individuals, companies, associations or communities that find successful new ways of responding to the demands of international markets. In 1999 Lowrance founded Leader Creek Fisheries LLC, which emphasizes sales to domestic markets with its wild sockeye salmon fillets program. Bill Popp has been appointed sales manager for HiSpeed Gear at 405 Overland St. in Kenai. Popp previously served as fleet sales manager for Kenai Chrysler Center. Popp has more than 25 years of business experience including corporate management, small business ownership, capital project management and general business experience. Popp will oversee the expansion of the sales department at HiSpeed Gear. Kerr Cal Kerr has joined Northern Economics as a project manager/analyst. Kerr has a background in project management, forestry, financial analysis and information technology. Kerr most recently worked for IT Alaska Inc. Susan Benedetti and Chuck Diters have been appointed to the Anchorage Historic Properties board of directors. Benedetti currently serves as vice president, mortgage loan department at First National Bank Alaska. Benedetti has 30 years of mortgage lending experience. Diters serves as the regional historic preservation officer for the U.S. Fish and Wildlife Service, Region 7. Diters is in charge of historic preservation compliance of national wildlife refuges in Alaska. Alaska Legal Services Corp., a statewide program offering free civil legal assistance to low-income Alaskans, has hired Andrew R. Harrington as executive director. Harrington, of Fairbanks, most recently served as the supervising attorney for the organization’s Fairbanks office. Harrington was unanimously selected by the ALSC board of directors following national recruitment efforts and a search committee process. His legal career spans 20 years. Alaska Airlines has promoted Dave Burris to Anchorage customer service manager. Burris will be responsible for both ground service operations and passenger service at Ted Stevens Anchorage International Airport. Burris, a 14-year employee of the company, most recently served as the Anchorage passenger service manager. Burris began his career at Alaska Airlines as a reservation agent in Anchorage and has served as a customer service supervisor in Fairbanks and a customer service manager in Kotzebue. Jack Wilbur, Eric Anderson and Serena Markey were recently presented awards for Engineer of the Year, Young Engineer of the Year and Student Engineer of the Year, respectively, at the Alaska Society of Professional Engineers’ annual awards banquet in Fairbanks. Wilbur, a professional engineer, has served as president of Design Alaska Inc. since 1995. Wilbur joined the firm as a mechanical engineering intern in 1975 and has led the mechanical engineering department as chief mechanical engineer for 20 years. Anderson is a senior engineer and laboratory quality manager for the Fairbanks office of Shannon & Wilson Inc. Anderson worked for the company as a construction materials technician during college and upon graduation, was promoted to engineer. Anderson has worked on various geotechnical, environmental and hydrologic projects throughout Alaska and in other states. Markey will receive a bachelor’s degree in civil engineering from the University of Alaska Fairbanks in May. Markey’s experience in the engineering field comes from working as an engineering intern for the Department of Transportation and as a research assistant in the Hydraulics Laboratory at UAF. Wells Fargo Bank Alaska has added Judith Crotty and Asta Keller to its community relations department. Crotty has been employed by the bank for more than 20 years in various management positions and is a vice president. Crotty will serve as Community Reinvestment Act officer and will also oversee charitable donations in Anchorage, coordinate financial education, and partner with private and government agencies to develop affordable housing. Keller has been hired as corporate relations officer. Keller will represent the bank in community and economic development activities and act as a referral source for business development projects. Keller will serve as the bank’s liaison between rural communities, local agencies, nonprofit organizations and minority groups. Kay Slack of K Slack Associates Inc. has been awarded the Palmer Chamber of Commerce’s 2002 Pioneer Award. The chamber’s highest honor recognizes Slack’s volunteer service to the chamber and the Palmer community. Slack has served on the chamber’s board of directors from 1991 to 1996 and from 1998 to the present, on its budget committee since 1991 and for the group’s auction since 1995. Frank Williams, vice chancellor for administrative services at the University of Alaska Fairbanks, has returned full time as director of the Arctic Region Supercomputing Center. Williams has held a dual appointment as center director and vice chancellor since 1999. Williams joined UAF in January 1992 as dean of the school of engineering. Mark Neumayr will act as interim vice chancellor for administrative services. Neumayr currently serves as the senior associate general counsel for the University of Alaska. Neumayr has worked for the university since 1982, serving in several roles in the general counsel’s office. The Alaska Wilderness Recreation & Tourism Association has elected its 2002 board of directors. Officers elected include: board president, Cathy Hart, Alaska Marine Highways in Anchorage; secretary, Katrina Church-Chmielowski, Prince William Sound Community College in Glennallen; treasurer, Wanetta Ayers, Destination Marketing Services Inc. in Anchorage; and past president, Carol Kasza, Arctic Treks in Fairbanks. Directors include: Deb Ajango, University of Alaska Anchorage; Todd Bureau, Adventure Alaska Tours Inc.; Tom DeLong, Tolovana Hot Springs; Buckwheat Donahue, Skagway Convention & Visitors Bureau; Pete Heddell, Honey Charters; Catherine McDermott, Alaska Wildland Adventures; Mark McIntosh, The Boat Co.; Karen Petersen, Prince of Wales Island; Mya Renken, Unalaska /Port of Dutch Harbor Convention & Visitors Bureau; and Gerry Sanger, Sound Eco Adventures. The Alaska Society of Convention and Visitors Bureaus has elected the following officers for 2002: president, Deb Hickok, president and chief executive of the Fairbanks Convention and Visitors Bureau; vice president, Buckwheat Donahue, executive director of the Skagway CVB; treasurer, Michelle Glass, executive director of the Haines CVB; and secretary, Bonnie Quill, interim executive director of the Matanuska-Susitna CVB. Four Alaska teachers were selected as recipients of the 2001 Presidential Awards for Excellence in Mathematics and Science Teaching administered by the National Science Foundation. The honored teachers are: Lisa Stewart of Swanson Elementary School, Palmer; Sheryl Sotelo of Cooper Landing Elementary School, Cooper Landing; Ruth Mount of Mirror Lake Middle School, Chugiak; and Ronald Reihl of Tanana Middle School, Fairbanks.

State approves transition to low-sulfur diesel fuel in 2006

The Alaska Department of Environmental Conservation has decided to allow a national rule requiring ultra-low sulfur diesel fuel for on-road trucks and buses to go into effect in 2006 for parts of Alaska connected to highways or the state ferry system.However, DEC asked the U.S. Environmental Protection Agency for another year to develop a transition plan for rural Alaska.The rule for ultra-low sulfur diesel will be required across the nation in 2006, but EPA gave Alaska the option of a phase-in plan. Alaska was required to submit its plan April 1.The federal agency adopted the rule to reduce sulfur particulates and other pollution from trucks and buses, which have been identified as a health hazard in major cities."Although we have fewer large trucks and buses in urban Alaska than in other areas of the U.S., these trucks still rumble down our roads, and children still ride on school buses," said Michele Brown, state commissioner of the Department of Environmental Conservation.< Font Face="arial,helvetica" size="2">’Arctic’ grade diesel fuel may come from Canada< Font Face="arial,helvetica" size="1">The big challenge for Alaska with the requirement for ultra-low sulfur diesel fuel in 2006 is getting the special "Arctic" grade needed in Interior, northern and Northwest Alaska, according to Ron King, head of the state Department of Environmental Conservation unit charged with implementing the new rule.Ultra low-sulfur diesel with a sulfur content of 15 parts per million will be widely available in the Lower 48 when the requirement for its use kicks in. It will cost more after costs of transportation to Southeast and Southcentral Alaska are added, but at least it will be available.Getting "Arctic" grade diesel at 15 ppm sulfur content will be challenging, King said. In the harsh winters in Interior and northern Alaska, diesel is needed that will pour at temperatures as low as minus 60 degrees, King said.Diesel made for use in more temperate climates has a higher "pour point," he said. For example, in the Seattle area diesel with a minus 27 degrees pour point is sold. In Minnesota, diesel with a pour point of minus 33 degrees is sold.King said he has found that refineries in Alberta will be making Arctic-grade diesel at 15 ppm. Canada is also requiring the new ultra low-sulfur fuel be used, and Arctic diesel is needed widely across northern areas of Canada.However, getting the fuel to Alaska from Alberta won’t be cheap. It could be shipped by pipeline to the Pacific Northwest and then barged to Alaska, or it could be trucked directly to Interior Alaska.Either way will be costly, King said.Frank Dillon, executive vice president of the Alaska Trucking Association, said he has been told by the Alberta refiners that, "they will be glad to sell us Arctic grade diesel, and we’ll be glad to truck it, but it will cost more." "Using ultra-low sulfur diesel will reduce air pollution from large trucks and buses, and consequently reduce the risk of cancer, asthma and respiratory illnesses," she said.Use of lower-sulfur diesel in engines with new emissions-control equipment will reduce particulate matter and nitrogen oxide-gas emissions by up to 90 percent, according to Ron King, chief of the DEC’s non-point mobile air pollution section.It will, however, add to the cost of diesel for trucks and buses in Alaska, and there will be some loss of fuel efficiency due to the lower energy content of ultra low-sulfur fuel, he said.Alaska refiners say they will be unable to economically reduce sulfur from diesel down to the 15 parts per million that will be needed for new diesel engines made in 2007 and after, King said.Alaska’s four refineries are mainly built to manufacture jet fuel, and make smaller quantities of gasoline and diesel. Because diesel is only a small part of what Alaska refiners produce, and a smaller part of that is designated for highway fuel, production of the ultra low-sulfur diesel is not viable, the companies told the DEC in meetings leading up to the decision.Williams Alaska Petroleum Co. has estimated that it would cost $100 million to install the facilities to reduce sulfur to 15 ppm.Lower 48 refineries are geared to produce diesel in large volumes, however."The EPA has estimated that it will cost Lower 48 refiners about five cents a gallon more to make 15 ppm diesel compared with costs of making conventional diesel," King said."However, those costs will be higher when transportation costs to Alaska are added, as well as the costs of special handling to keep the fuel separated from other fuel products."King said local fuel distributors estimated the delivered cost in Alaska could range from 25 cents to 40 cents per gallon above current diesel fuel prices.The 15 ppm diesel will have about 3 percent lower energy content per gallon than diesel now being used, King said, but it is possible that calibration of engine settings can make up for this.The EPA rule is actually directed at diesel-engine manufacturers, who are being ordered to install new pollution control equipment on diesel engines.The equipment is very sensitive to sulfur content in fuel, however, and cannot tolerate fuel with a sulfur content higher than 15 ppm.In the Lower 48 diesel is now made with a sulfur content of 500 ppm, to comply with an EPA rule adopted several years ago requiring that level of sulfur.Alaska is exempt from that requirement, but the only high-sulfur diesel used in the state is that made by Williams Alaska Petroleum Co. at its refinery at North Pole, near Fairbanks, which has sulfur ranging from 300 ppm to about 1,000 ppm, King said.Much of the diesel fuel used in Southeast Alaska has 500 ppm sulfur because it is shipped to Alaska from the Pacific Northwest refineries.Tesoro Alaska Petroleum can make 500 ppm diesel because it uses Cook Inlet crude oil, which has a lower sulfur content than North Slope crude.King said that although the federal rule requires pollution-control equipment on heavy trucks and buses with a gross vehicle weight greater than 8,500 pounds, engine manufacturers have decided to make only engines that require the ultra low-sulfur, 15 ppm diesel fuel.Frank Dillion, executive vice president of the Alaska Trucking Association, said some new engines requiring the new fuel may start showing up in Alaska as early as 2004.Truckers will not use higher-sulfur fuel in the new engines, he said. "One tank of high sulfur fuel will ruin a $60,000 new engine," he said.Dillion predicted that by 10 years from now most diesel trucks in Alaska will have the new engines and use the new fuel.

Alaska salmon, halibut will now be labeled as 'wild'

KENAI -- With its sponsor, Sen. Jerry Ward, R-Anchorage, at his side, Gov. Tony Knowles affixed his signature April 3 to a bill allowing salmon and halibut products sold in Alaska to be labeled as wild, as well as free of antibiotics, hormones and dyes.At the introduction of Senate Bill 208, Ward complained that fish farmers "color" their fish to give them the deep red appearance of wild salmon."The fish farmers are almost all using hormones to get bigger fish and artificial chemicals to hide the dull coloring of farm-raised fish," Ward said."I think the people of Alaska have a right to know whether their fish is wild or chemically enhanced."Ward went on to thank the governor for his quick action, saying the law will give consumers the ability to make informed decisions about what they eat."This positive legislation will help our state’s fishing industry," he said.Ward said succeeding with the bill "felt good," but he was not really surprised by the speed with which SB208 made it through the process to become law."Everybody in the Legislature and the governor know we have a tremendous problem in the commercial fishery, and that goes for subsistence and sport fishing, too," he said."You have to take some positive action" to compete with farmed salmon, Ward said.Ward said he believes more and more consumers are looking for seafood free of artificial additives.Meanwhile, a bill extending a 1 percent tax collected on the value of salmon at the docks for an additional five years passed the Alaska House on April 3. House Bill 390, sponsored by Rep. Lesil McGuire, R-Anchorage, is headed to the Senate.The tax has been in place since 1993 and funds the Alaska Seafood Marketing Institute’s efforts to market Alaska’s seafood products Outside."By authorizing fishermen to continue supporting ASMI by assessing themselves this small fee, the Legislature is simply giving fishermen a critical financial tool they need to market the best seafood product in the world," McGuire said.The bill also allows ASMI to expend tax revenues to expand efforts to market Alaska seafood in international markets. One benefit of that expansion is the chance for federal matching funds, she said."One estimate shows they stand to bring in $12 for every $1 they collect," she said."Those are pretty good odds, and we’d like to see ASMI take advantage of them."The tax raised about $2.5 million last year and is expected to raise about $2 million this year.

Business Profile: Digital Blueprint

Name of the company: Digital BlueprintEstablished: 1997Location: 903 W. Northern Lights Blvd., Suite 103, AnchorageTelephone: 907-274-4060Web site: www.digital-blueprint.comMajor focus of services: Digital Blueprint provides copying services and specializes in printing blueprints and other projects for architects, engineers and contractors. The company also handles color reproductions, specialized binding, mounting and laminating plus digital scanning, plotting and archiving.History of the company: Early operations of Digital Blueprint began in the early 1990s as part of work by Alaska Legal Copy, owned by Richard Blaylock. In August 1997 Blaylock launched Digital Blueprint, separating from Alaska Legal Copy, citing sufficient demand and customer needs differing from the legal industry copier.Technology has changed the way blueprints are reproduced, and Digital Blueprint invests in high-tech equipment and related employee training. Customers can transmit files electronically to the company for specified copying jobs. Digital Blueprint also is part of a national industry association with 235 reprographic firms able to receive files electronically for printing.Digital Blueprint has printed plans for many major construction projects including Wal-Mart stores, Fred Meyer, the new 3000 C St. office building, the Alaska Club for Women and renovations to Recreational Equipment Inc.The company employs nine full-time employees. Workers with the shortest tenures have logged a couple years at Digital Blueprint. "Your commitment to your employees expresses your commitment to your customers," said General Manager Paul Krous. "Employees -- and not the manager and not the owner -- make the process work."Since opening Digital Blueprint has increased its production and revenue volumes each year.Top accomplishment of the company: Digital Blueprint’s quality service has helped perseverance in a competitive market, Krous said. Two months before the company opened, a large national firm bought two existing Alaska copying facilities and aimed to dominate the market, he recalled. "We did what we do. We provide a quality product at a fair price," Krous said. That company closed three years after opening in Alaska. Also, Digital Blueprint’s production volume is more than twice the national average per employee, and the company’s turnaround time for a project is half the national average, he said.Major player: Paul Krous, general manager, Digital BlueprintKrous moved to Alaska in 1977. He has worked in the technology sector handling support and training as well as in other areas including purchasing and management. Krous joined the company in March 1997.-- Nancy Pounds

Merrill Field slated for improvements

Nearly $2 million worth of improvements are slated at Merrill Field Airport this year, including demolition of an old air traffic control tower and installation of taxiway-barrier gates to prevent automobile and airplane collisions.Dave Lundeby, manager of the city-owned airport, said other improvements slated this year also include raising the fence height to 7 feet along the north side of the airfield; resurfacing a taxiway; tie-down improvements; and rebuilding a portion of Merrill Field Drive.And when the ice melts, Merrill Field’s new $1.5 million gravel runway will be exposed. The new runway, which opened in December, is the only such strip in Anchorage that caters solely to airplanes with tundra tires in the summer and skis in the winter.Lundeby said the second and third floors of the old air traffic control tower will be razed this year, leaving the first floor, where his office will remain. A new 116-foot-tall air traffic control tower on East 5th Avenue opened in 1999.New barrier gates across two taxiways should be working by May, Lundeby said. The gates, which are electronically triggered by approaching aircraft, should prevent cars from turning onto runways.Despite a dip in operations last year caused largely by the terrorist attacks of Sept. 11, Merrill Field remains Alaska’s busiest general aviation airport.The airport, established in 1930 one mile east of downtown Anchorage, had 179,217 flight operations in 2001, down from 190,508 in 2000, according to airport officials.

Olympic skiers and snowboarders eat Alaska salmon, win medals

KODIAK -- Alaska salmon and other seafood are making sports headlines along with American teams and athletes.The U.S. Olympic Ski and Snowboarding Team enjoyed Alaska salmon as part of a "Performance-Nutrition Partnership" that fed athletes, trainers and support staff at the qualifying events, and at the seven different venues at the Winter Olympic Games in Salt Lake City.Interestingly, 10 of the 34 medals won by the U.S. at the Winter Olympics were taken in skiing and snowboarding. The previous record for total U.S. medals was thirteen. The protein-packed sponsorship was made through the Alaska Seafood Marketing Institute and the U.S. Ski and Snowboard Association."Many other skiers and snowboarders performed very strongly, fueled in part by Alaska’s soul food: Alaska salmon," said ASMI’s Laura Fleming.Alaska seafood was also featured in Atlanta, where the NCAA Men’s Final Four Basketball Tournament was played. For the third year, ASMI and Sitka Sound Seafoods contributed fresh halibut, salmon lox, scallops, shrimp and king crab to a reception that attracted a crowd of about 200 people, including many key coaches from Division 1 teams, the top college-sports level.The seafood reception in Atlanta was intended to publicize the BP Top of the World Classic Basketball Tournament held every November in Fairbanks. The University of Alaska Fairbanks team will serve as host to seven visiting teams in its Division I tournament Nov. 21-24.Looking ahead, Alaska canned salmon could soon partner in promotions with NASCAR, according to the minutes of a meeting held by ASMI’s canned salmon promotion committee. While the details are still being worked out, organizer Larry Andrews said he would soon be meeting with NASCAR’s Kyle Petty to discuss a tie-in with Victory Junction Camp for terminally ill children.Andrews said the promotion would feature supermarket aisle displays with Petty and Alaska fisherman stand-ups and recipes. Advertising would include a statement saying: "When you purchase Alaska canned salmon, you help support fishing communities in Alaska." A NASCAR display may also be included in front of each participating store during the four- to six-week promotion.Should players lose on the slopes, courts and race-car tracks, eating all that salmon will help with their woes. A report in this month’s American Journal of Psychiatry declares that further studies show that eating fish high in omega-3 fatty acids, most notably wild salmon, does indeed help relieve depression.Pollock watchPollock, which is Alaska’s largest and most valuable fishery, is turned into several products: fillets for use in fish sandwiches and fish sticks, and surimi, which is turned into "seafood salad." The pollock roe is also highly valued in Japan and other Asian countries. Here is some of the latest information from market-watcher Bill Atkinson’s readings of major Japanese newspapers:Prices for surimi from the year’s first pollock openers recently started surfacing in Japan. Atkinson said unofficial reports peg prices for top grade product at $1.07 to $1.21 a pound, up 14 to 17 cents from last year’s end-of-year fisheries. Prices for lesser-grade surimi ranged from 69 to 96 cents a pound."This year’s negotiations were dominated by the U.S. producers, largely due to the increased production of pollock fillets for the European market and the resulting reduced production of surimi this year," Atkinson said. The price for pollock fillets has gone from 85 cents a pound last year to more than $1 a pound this year.Prices for top quality roe from the first auction rounds averaged $5.51 to $5.85 a pound for shore-based processors, and $6.89 to $7.92 a pound for at-sea processors. Lesser-grade product sold for between $4.13 and $4.48 a pound. While these prices are about $1.72 a pound lower than last year, the difference in quality between the two years makes the price reduction closer to $1.03 a pound, Atkinson said.Pollock roe from Alaska waters is facing little competition from Russia this year. Producers there are facing their worst year ever, and as much as 70 percent of their product is reportedly off-grade. The Russian fishery began the year with more than a 55 percent quota cut, which will reduce the overall amount of pollock roe available in Japan for the year.Kodiak-based free-lance writer Laine Welch can be reached via e-mail at ([email protected]).

Building industry predicts second record year

It’s going to be another good year for construction, according to estimates compiled by the Associated General Contractors, an industry trade association. Preliminary figures show total statewide building activity may be up 6 percent over last year, according to Dick Cattenach, executive director of AGC. Last year was itself a record year for construction, excluding the years of trans-Alaska oil pipeline construction in the mid-1970s, Cattenach said. "The big driver this year is federal government construction, particularly U.S. Army Corps of Engineers projects," he said. Activity will be particularly brisk in Interior Alaska, where the Corps will supervise the start of construction of the $185 million U.S. Army hospital at Fort Wainwright in Fairbanks, and new facilities at Fort Greely, near Delta, related to the planned national missile defense system. About $150 million to $250 million will be spent on Alaska facilities related to missile defense, although not all of that will be for construction, Cattenach said. A big highway project in Southcentral Alaska is the planned interchange at the Parks and Glenn highways, which will begin construction this year. This will be the first major highway project in Alaska done by design-build, where engineers and designers team up with a contractor to submit a joint bid. Design-build is used frequently with building construction in Alaska and elsewhere, but this is the first time it has been used with a highway project, Cattenach said.

DEC says Phillips, BP are keeping charter promises

ANCHORAGE -- State regulators say two of Alaska’s big oil companies are keeping their environmental promises at their North Slope oil fields.The Alaska Department of Environmental Conservation March 29 released its second annual report on how BP Exploration (Alaska) Inc. and Phillips Alaska Inc. are fulfilling a 1999 state agreement.The charter agreement was reached before the state blessed Phillips’ purchase of Atlantic Richfield Co.’s Alaska assets, which BP originally had proposed assuming. Phillips closed the $6.5 billion Arco deal in 2000.DEC’s report comes amid criticism that the oil industry is not properly maintaining the pipes, valves and other machinery at Prudhoe Bay and other aging oil fields.Chuck Hamel, a longtime oil watchdog, said the report goes soft on the oil industry."The self-serving report serves only to conceal DEC’s pathetically lax oversight of the public’s interests on the North Slope,’’ he said.The agreement does not cover all environmental issues on the North Slope. For instance, DEC is considering fining BP for taking too long to install a system to spot oil leaks on Prudhoe Bay’s huge oil trunk lines. That issue and some others are being dealt with individually.While DEC pointed out some concerns in its report, such as ongoing corrosion monitoring, it said BP and Phillips are doing a good job of meeting obligations outlined in the agreement.Those obligations include spending $10 million to clean up contaminated sites, investing $200,000 a year for 10 years to improve spill response preparedness, and accelerating replacement of oil tankers with a fleet of double-hulled tankers by 2007.Among other accomplishments in 2001, according to the DEC report: Phillips launched its first double-hulled tanker, with a second scheduled to begin operation this year. BP’s first doubled-hulled tanker is scheduled to start operating in late 2003. Phillips and BP removed 540,000 cubic yards of drilling waste from the Slope. They began the cleanup of eight contaminated sites. The companies disposed of 983 abandoned drums. They reportedly spent $55 million on their infrastructure corrosion programs.

House rejects income tax, may doom plan

JUNEAU -- The House of Representatives on March 27 rejected a proposed 2.6 percent tax on personal taxable income, a move that could cause a long-range fiscal plan to unravel.After nearly five hours of off-and-on debate, the House voted 22 to 17 against the income tax. It had been offered as a substitute for a 3 percent sales tax."I’ve come to the conclusion that if we don’t do this, we can’t take other steps" to raise revenue, Rep. Beth Kerttula, D-Juneau, said of the income tax.The 28-member Republican majority reportedly has about 15 votes for a sales tax and needs at least six Democrats to pass the tax."Everything I’ve heard sounds like this is the death knell for a fiscal plan," Republican Rep. Lisa Murkowski of Anchorage said just before the income-tax vote, referring to the debate.The historic discussion came exactly a year to the day since the formation of the bipartisan Fiscal Policy Caucus, a group of 20-plus lawmakers, mostly from the House, who were frustrated by inaction on a long-range budget-balancing plan.While the fiscal caucus has succeeded in highlighting the issue, many members have been unhappy with the specifics of the legislation developed in the House Finance Committee.Democrats insisted on the sales tax vote coming first, so that they would know how potentially regressive the revenue package would be before voting on the Alaska Permanent Fund bills.The degree of uncertainty among even prominent majority members was highly unusual."I don’t know if this amendment will succeed or fail," said Rep. Jim Whitaker, R-Fairbanks, before the vote was taken on the income-tax amendment. Whitaker sponsored the sales tax bill.Five Republicans, Murkowski, Bill Hudson of Juneau, Drew Scalzi of Homer, Peggy Wilson of Wrangell and Ken Lancaster of Soldotna, joined the 12 minority Democrats in voting for the income tax.Fiscal caucus co-chairmen Hudson and Rep. John Davies, D-Fairbanks, offered a revised income-tax plan designed to raise the same amount of revenue as the sales tax, about $250 million.The fiscal caucus had backed a 4 percent tax on taxable income for about $360 million.Davies said the lower amount was offered so that apples-to-apples comparisons could be made of the effect on different income brackets. He and Hudson also added a minimum tax of $25 to address complaints by some Republicans that many Alaskans wouldn’t pay anything.Because there are pending plans to take hundreds of millions of dollars from the earnings of the permanent fund, Democrats were particularly concerned about the effect of a sales tax on low-income Alaskans, who would pay a higher percentage than those in high brackets.While equal amounts would be taken on the same purchases from rich and poor alike, Rep. Eric Croft, D-Anchorage, paraphrased the Biblical passage that much is required from those who are given much.Republicans and Democrats alike also argued that a state sales tax could devastate 97 of 161 municipalities that already have one. With a 7 percent local sales tax in Wrangell and a 3 percent state tax, the combined 10-percent rate would be the nation’s highest, Wilson said.Hudson also noted the potential impact of the proposed state pre-emption of municipal sales tax exemptions. The City and Borough of Juneau could lose $5 million under the state mandates, he said.Republican Rep. Andrew Halcro of Anchorage countered that the state of Alaska handles a lot of services that typically are municipal functions in other states."Do they want to take over the court system, the jails?" Halcro asked, rhetorically. "I don’t think so."Fiscal Policy Caucus members also argued that the income tax makes more sense because it’s deductible on federal taxes, thereby keeping $50 million in the state that would otherwise go to Washington, D.C. Economists have said income tax would have less effect than a sales tax or permanent fund dividend reduction on jobs and the economy, and that 10 percent will come from about 65,000 nonresident seasonal workers who take about $900 million in wages out of the state, according to Hudson.But Whitaker and Finance co-chairman Eldon Mulder, an Anchorage Republican, said an income tax is punishment for success."I refuse to be a part of punishing those in the middle who get up every morning to go to work," Whitaker said.Rep. Pete Kott, R-Eagle River, said that a study by a taxpayers’ advocacy group has shown that of the last nine states to adopt an income tax, seven saw an acceleration in the growth of government spending.Rep. Norm Rokeberg, R-Anchorage, said it would be plain "immoral" to tax income so that the state could keep sending out permanent fund dividends.Whitaker also said, in violation of House rules, that it would be futile to send an income tax to the Senate."I’m not the least bit interested in a hollow statement," he said. "I want our package to have a snowball’s chance in hell."Scalzi said the best compromise would be both an income tax and a sales tax, at low percentages, but no one offered such an amendment.One permanent fund bill would draw $300 million from earnings in the next fiscal year, roughly the amount that would be left over after inflation-proofing the principal and paying dividends. In the following year, however, the bill would base Permanent Fund payouts on average market value, with government’s share reaching nearly $1 billion in fiscal year 2004 and dropping to about $700 million two years later.Dividends would drop to about $1,000 in two years. Democrats want to adjust the payout formula from 45 percent for dividends and 55 percent for government to a 50-50 split. That would add more than $100 to the dividend.The other permanent fund bill would use fund earnings to replace the existing general fund programs for aid to municipalities, about a $59 million draw.House Majority Leader Jeannette James, R-North Pole, said she thinks that Democratic Gov. Tony Knowles would veto any legislation involving permanent fund earnings that wasn’t voted on by the public first. Knowles has declined to say what he would do if such a bill came to his desk.

As layoffs rise, lawyers predict increase in job bias claims

The slowdown in the Lower 48 economy has management employment lawyers predicting an increase in employment bias claims and lawsuits against employers who have gone through layoffs.They also anticipate an increase in discrimination complaints even while employees are still on the job as a measure of job protection, in the belief that employers will be less likely to terminate an employee who had previously filed a bias complaint. Also, employees who have lost their jobs and been unable to obtain another job are more likely to sue their former employers.By contrast, locally there is significant anecdotal evidence of economic expansion. There are a lot of help wanted signs in the windows of businesses, particularly entry-level jobs. The number of out-of-state license plates on vehicles is increasing. The Alaska Department of Labor reports lower unemployment figures.Thanks in large measure to the congressional delegation and the increased concern for national security measures, construction and related fields are booming. I am told there is a labor shortage in a number of areas. It is reasonable to assume that there is a substantial amount of recruiting and hiring going on in Alaska.An important way to prevent discrimination and wrongful discharge claims is to ensure that the initial hiring is done properly. Accordingly, it’s timely for Alaska employers to review their hiring policies and procedures.To begin with, Alaska law recognizes two kinds of employment relationships: employment at will and employment that can only be terminated for a lawfully recognized reason, or just cause.If the employment is for a particular length of time, it can only be ended before the end of the term of employment for just cause. Moreover, an employer’s ability to terminate "at will" can be lost through its conduct or promises.In Eales vs. Tanana Valley Medical-Surgical Group Inc., the Alaska Supreme Court recognized that an oral promise to an employee that he could work "until retirement" transformed what was otherwise an employment at-will relationship to an implied contract requiring the employer to have just cause to terminate the employee.The Supreme Court later made a similar finding in Jones vs. Central Peninsula General Hospital. There, the court required the employer to follow the representations that it had made to its employees in its employee handbooks.Under these principles, an employee who can point to promises of employment for a particular period of time or representations from which the employee can conclude that she is entitled to job security or longevity may result in a binding implied contract for the employee.In addition, Alaska law has long recognized the covenant of good faith and fair dealing in employment contracts. In that regard, generally speaking, employers are prohibited from depriving employees of their reasonable expectations under an employment relationship.For example, as in Mitford vs. de Lasala (1983), the court held that terminating an employee who had earned commissions, but had not yet been paid them, constituted a violation of the covenant of good faith and fair dealing. The covenant has been construed to place a number of other obligations on employers and is not yet fully defined.As a result of these common law decisions, employers should be circumspect in the representations they make to prospective and current employees, both during interviews and after hire. Moreover, employers should audit the representations that are made in their employee handbooks, policies, correspondence and other documents that are provided to employees.For example, if an employer’s policies or handbook sections contain progressive discipline and obligate the employer to follow a set of criteria without reserving discretion to bypass particular steps, a court may find such "rights" upon the employer and overturn a termination if all the steps were not followed.The employer may wish to terminate an employee for a gross misconduct, but its policies require a warning or suspension before termination. In this fashion, the employer may be utilizing a policy that is against its best interest. Unfortunately, time after time, employers are faced with the need for a personnel action and only then dust off the old, previously adopted policies to discover the problem.If employers are considering substantial hiring, or for that matter lay-offs or terminations, they would be wise to first review their interviewing procedures, handbooks, correspondence and other similar documents and practices in light of these governing principles of Alaska law.Paul S. Wilcox is chairman of the employment law practice at Hughes Thorsness Powell Huddleston & Bauman LLC in Anchorage. He can be reached at 907-263-8248 or via e-mail at ([email protected]). This article is copyright 2002 by Paul S. Wilcox and is used by permission.

Alaska, Canadian Natives to protect gas line interests

ANCHORAGE -- Thirty-five tribal nations from the Yukon, the Northwest Territories, British Columbia and Alaska have signed a protocol to look out for each other’s interests if a natural gas pipeline is built.One plan being backed by Alaska leaders calls for building a gas pipeline from Alaska into Canada along the Alaska Highway.Thirteen Alaska tribes, whose villages are along the trans-Alaska pipeline route, joined forces with the Canadian tribes in signing the pact at the First Nations Oil and Gas Summit in Whitehorse, Yukon Territory.The tribes want federal, state and provincial governments and energy companies to consult with them before building a pipeline.Natural gas producers in Alaska are looking at two routes to move natural gas from Prudhoe Bay to the Lower 48. The other proposed route would go under the Beaufort Sea to the Northwest Territories and then south to connecting pipelines in Alberta.Work in Washington, D.C., on the proposed pipeline is proceeding. The Senate recently approved an amendment, proposed by Sen. Frank Murkowski, R-Alaska, mandating the southern highway route.Murkowski has said when the Senate returns April 8 from its spring break, he will resume efforts to create financial benefits to improve the economic feasibility of a pipeline. One idea is to create some sort of tax credit for gas producers if prices fall below a certain level.John Browne, BP’s chief executive, has said the estimated $15 billion to $20 billion cost of building a pipeline puts it out of reach financially.BP, Phillips Alaska Inc. and ExxonMobil Production Co., owners of most of the Slope’s proven gas reserves of 35 trillion cubic feet, have finished a $125 million feasibility study. The study has not yet been released, but early indications are it found the project would not be profitable.

This Week in Alaska Business History April 7, 2002

Editor’s note: "This Week in Alaska Business History" revisits events that shaped our past."Those who cannotremember the past arecondemned to repeat it."-- George Santayana, 1863-195220 years ago this weekAnchorage TimesApril 7, 1982Shippers fear railroad to get competitive edgeThe Associated PressJuneau -- Private shippers say they don’t want their interests left in the terminal if a state-run railroad rolls into Alaska’s future.Representatives of shipping and trucking firms Tuesday told the Senate Transportation Committee the state should not give an unfair competitive edge to the Alaska Railroad if it comes under the state control.Congress is considering a bill to turn the railroad over to the state, and the Senate is working to create an Alaska Railroad Authority to run the railroad if it is turned over to the state.Union leaders, railroad managers, businesses and shippers have all expressed concerns about how the state would run the railroad.Senate President Jalmar Kerttula, D-Palmer, said he thinks he satisfied many of their concerns in a rewritten, 52-page railroad bill he delivered to the Transportation Committee on Tuesday.Anchorage TimesApril 7, 1982U.S. court to hear gas line caseBy Betty MillsTimes Washington BureauWashington -- Opponents of the Alaska gas line waiver package are prepared to square off with sponsors of the $30 billion project in the U.S. Court of Appeals here Tuesday.Led by Sen. Howard Metzenbaum, D-Ohio, 38 members of Congress, states and organizations representing consumers filed suit last January against the waiver package. Oral arguments are scheduled in the appeals court Thursday.The waiver package was enacted in December and is considered a prerequisite to obtaining private financing for the project.In their brief to the court, Metzenbaum and the others charge the waiver package was enacted in violation of congressional procedures and subjects consumers to "unjust and unreasonable rates."But in their response brief, attorneys for Federal Energy Regulatory Commission said the waiver package "is a validly enacted public law. All constitutional requirements for a valid public law were fulfilled."10 years ago this weekAlaska Journal of CommerceApril 13, 1992Miners and coal operators oppose Hickel on mental health land trustBy Tim BradnerJuneau -- Miners and coal operators are now lobbying the Hickel administration to junk the complex and controversial mental health lands legislation passed in the closing days of the 1991 Legislature."This thing is a tar-baby," one coal operator, whose project is impeded by mental health lands litigation, said privately.An alternative proposal being circulated in Juneau would be easier to implement and would quickly clear title to millions of acres of state lands otherwise held in limbo, they argue.The governor and state lawmakers are reportedly interested in any approach that will solve the problem, but legislators are waiting to see what position Hickel will take. Meetings were held in the governor’s office last week, but no decision was reached.Lawmakers say they’re willing to look at the new approach, but they want to make sure it really will end the litigation and clear title to hundreds of thousands of acres of state lands on which development is now blocked.Alaska Journal of CommerceApril 13, 1992Tesoro earnings disappoint to dateBy Ray TysonFor the Alaska Journal of CommerceWeak residential fuel oil markets coupled with the cost of mounting environmental regulations are putting the bite on Tesoro Alaska Petroleum Co.’s current year earnings."We’re disappointed so far in 1992. Earnings are not near what we expected," said Gene Burden, Tesoro’s senior vice president for marketing.Tesoro’s corporate earnings, Burden said, plummeted from $22 million in 1990 to $3.9 million in 1991. But he stopped a hair short of predicting whether Tesoro would fall into the red by the end of 1992."This is definitely not as good a year as last year," Burden acknowledged.Tesoro’s Alaska subsidiary owns a 68,000 barrel-a-day refinery at Nikiski, a 10-inch pipeline between Kenai and Anchorage, 98 branded service stations and a chain of 7-Eleven stores. The refinery’s full range of products generates 73 percent of the sales for its Texas-based parent.In past months, Tesoro stock has fallen in the wake of the company’s financial woes.-- Compiled by Ed Bennett.

No shortage of road projects planned on Kenai Peninsula

KENAI -- Millions in state and federal funds will pour into the Kenai Peninsula economy this summer as work begins on a host of vital road and trail projects from Hope and Seward to Homer.Drivers can expect some delays, but the worst will likely occur at night when traffic is down, said Murph O’Brien, assistant director of the Alaska Department of Transportation’s Central Division."It’s always the goal to keep impacts as minimal as possible," O’Brien said Friday. "But with any construction project, there will be impacts to traffic flow. Often, the complete closures will be at night. In general, we spend an awful lot of money in each contract to keep traffic moving as smoothly as possible."For many of the projects, there will be periods of time when traffic is reduced to single-lane flow, with motorists either flagged through one lane at a time or led through the construction zone by a pilot vehicle, he said.The following is a look at the major projects on the schedule for this building season, beginning with a portion of the Seward Highway not actually on the peninsula.A two-mile section of the Seward Highway at Bird Flat, at about Mile 96, is prone to closure from avalanches. The highway and the Alaska Railroad rail bed will be moved about 65 feet toward the water and the old road bed will be raised, creating a berm that will block sliding snow."It should reduce the avalanche hazard about 90 percent," O’Brien said.The Seward Highway from Mile 0 to 8 at Seward is scheduled for reconditioning and repaving, but not all the work will occur this summer. The project includes trail construction out to Timber Lane, expansion of the highway grade and bridges in the Resurrection River area to provide better flood control, and a railroad crossing to be built at Stony Creek Avenue.In all, the work will cost about $16 million. Phase 1 of the bridge construction work will be advertised early this summer.Hope Road, a 16-mile stretch connecting the remote north peninsula town to the Sterling Highway, will get a $4 million facelift starting in late July or early August. The repaving job is to be advertised in June.While there isn’t much scheduled in the way of road work in the central peninsula, a major trail project gets under way.Alaska Road Builders has been awarded the contract to build the Kenai Spur Unity Trail and the Soldotna School Trail, at a cost of roughly $2.2 million.The Unity Trail will connect Kenai and Soldotna along the Kenai Spur Highway. The Soldotna School Trail will consist of a lighted pedestrian-bike trail between Marydale Avenue and Redoubt Avenue along the west side of Soldotna High School, Soldotna Middle School and Redoubt Elementary School property.A good deal of DOT work is scheduled to begin near Homer. One project aims to rebuild two state roads, Bartlett and Hohe streets, and turn them over to the city of Homer. The roads provide access to South Peninsula Hospital.However, negotiations on utility agreements are still under way and bid advertising isn’t expected to happen before September, making it likely little will actually be done this summer. The projects are expected to cost $1.25 million.The largest project will be the reconstruction of East End Road from the Pioneer Avenue and Lake Street intersection in downtown Homer at Mile 0 to Mile 3.75, near the intersection of East End Road and Kachemak Drive.The road will be rebuilt and widened to add shoulders, and a bike and pedestrian pathway will be constructed on the uphill side of the road. The final design is being completed and the project should be advertised in May to begin as soon as possible after that, O’Brien said.The cost of the job will total $14 million, which includes $4.2 million for right-of-way acquisition and the $3.2 million for utility work.The East End Road project has been long anticipated. A public meeting scheduled for April 17 from 4 to 7 p.m. at the Homer Chamber of Commerce Visitors Center will cover traffic control issues. O’Brien said there would be times when the road will be closed completely to install culverts, but that work will likely be done at night to avoid peak traffic times. Closures will be announced well in advance, he said.Several roads will be resurfaced in the Homer area, including Pioneer Avenue in the heart of downtown, as well as West Hill and East Hill roads, the North Fork Road and Nikolaevsk Road. Those projects will include some shoulder widening, guardrails, drainage and other work where appropriate. The jobs will cost about $2.1 million, O’Brien said.While the projects may cause some temporary inconveniences to the driving public, the end results will make transportation easier and more pleasant across the peninsula, O’Brien said.

New rollover rules add to pension portability

After years of giving lip service to the need for pension portability, Congress finally passed and the president signed broadly liberalized rollover rules, including the ability to roll over between and among plans that has never been permitted.Along with the liberalized rules, which are effective for 2002, however, there are pitfalls and some uncertainty that may require further guidance or technical correction to resolve. A plan sponsor is not required to adopt these new rollover rules, so it remains to be seen how widespread the adoption of these new rules will be.The basic old rules An individual retirement account holder can roll over between IRAs, including simplified employee pensions and salary reduction SEPs. Although no longer allowed to be established, SARSEPs in existence in 1996 were permitted to continue in operation. A distribution from a qualified plan - profit sharing, pension, 401(k), stock bonus and employee stock ownership plan - can be rolled over to an IRA or to another qualified plan, if the proposed recipient plan accepts roll-ins. A distribution from a 403(b), or tax-sheltered annuity can be rolled over to an IRA or to another 403(b) arrangement, if the proposed recipient arrangement accepts roll-ins. With respect to qualified plan accounts rolled into a conduit IRA, those amounts can be transferred back into another qualified plan, provided no other funds have been commingled in that IRA.The basic new rules Qualified plans and 403(b) arrangements can accept rollovers from each other. Eligible governmental 457(b) plan accounts are eligible for rollover for the first time in 2002. However, 457(b) plan accounts of employees of nonprofit organizations are not eligible for rollover; only governmental employee plan accounts are eligible. Rollover 457 accounts can be accepted by both qualified plans and 403(b) arrangements. Qualified plans and 403(b) arrangements can accept 457 rollovers and 457 plans can accept rollovers from the other two types of plans. IRAs can be rolled into qualified plans, 403(b) arrangements and 457 plans. However, SIMPLE IRAs, Roth IRAs and nondeductible contributions to IRAs cannot be rolled over to qualified plans or 403(b)s and probably not 457 plans, either, although that is less clear.Be carefulMany employers who sponsor qualified plans, in particular, are not excited about the additional record keeping burdens that arise if rollovers from IRAs, 403(b)s and 457 plans are accepted. The plan sponsor may choose not to accept any form of roll-ins to the plan, or may limit the types of rollovers accepted, so long as such limitation is uniformly applied and is nondiscriminatory in effect.You should check with your employer to determine whether it will permit its plan or plans to accept roll-ins of various types before commencing a roll-over distribution from the present plan or account.Be even more carefulRolling different money types into a different plan type can create unintended and painful results. For example, distributions from 457 plans that are not rolled over, but are currently taxed, are not subject to the 10 percent early withdrawal penalty that is assessed if a participant withdraws money from a qualified plan or a 403(b) arrangement generally before attaining age 59 1/2.However, if the 457 money is rolled over to a 403(b) arrangement or a qualified plan, and if those amounts are subsequently withdrawn before age 59 1/2, those amounts are subject to the 10 percent early withdrawal penalty.If a participant separates from the service of the employer maintaining a qualified plan after attaining age 55, but before age 59 1/2, the 10 percent early withdrawal penalty does not apply. However, if these amounts are rolled to an IRA, for example, and then distributed before age 59 1/2, the 10 percent penalty does apply.Life insurance may be held in a qualified plan. However, that is not true for 457s, 403(b)s or IRAs. Rolling over from a qualified plan to one of these other arrangements may cause the life insurance cash value to be taxable or may require liquidation of the coverage with the proceeds rolled over.Other items to considerBefore the rollover rules were changed, the alternate payee who was the spouse, or former spouse, of the participant was able to either leave the qualified domestic relations order account balance in the plan maintained by his or her spouse, or former spouse, employer or roll over to an IRA. Now, the alternate payee may also roll it to his or her employer’s qualified plan if such rollovers are accepted by that plan, or to a 403(b) arrangement or a 457(b) plan of a qualifying governmental employer.Although the qualified domestic relations order rules have been also been extended to 457(b) plans, they have not been extended to IRAs.The hardship rules are unique for qualified plans and 403(b) arrangements. A 457 plan has unforeseeable emergency distribution provisions that are significantly different than the hardship rules. The benefit of one or the other type of "in-service" distribution may be lost if you roll over from one type of account to the other.For example, in a 401(k), the events that are deemed to be a hardship event are very well-defined: Purchase primary residence, avoid foreclosure or eviction from primary residence, pay for post-secondary education for participant spouse or dependent, or pay for medical expenses for participant, spouse or dependent.However, in order to get an emergency distribution from a 457 plan, the event must be an unforeseeable emergency. Therefore, the purchase of a primary residence, though qualifying for a 401(k) hardship, will not qualify as an unforeseeable emergency for a 457 plan.What does all of this mean? It is certainly possible for a participant who changes jobs to move his or her retirement investments to the new employer’s plan, but a thoughtful participant may want to hesitate before rushing to consolidate all accounts.J. Michael Pruett is president of Cache Pension Service Inc. He can be reached via e-mail at ([email protected])

Alyeska may scrap shut-in pump stations, move workers

Alyeska Pipeline Service Co. is studying the possible dismantling of four shut-in pump stations on the trans-Alaska pipeline system as well as removal of unneeded tanker berths and oil storage tanks at the Valdez Marine Terminal, Alyeska President David Wight said March 28.The company is also looking at new investment in the remaining pump stations. There are substantial opportunities to increase efficiencies through waste heat recovery and re-engineering of pump stations, which use technologies that are 25 years old or older, Wight said.The shut-in pump stations are costing Alyeska about $1 million a year each to maintain, Wight told the Alaska Support Industry Alliance in Anchorage. He said dismantling and removing surplus facilities are part of a long-range strategic plan aimed at reducing costs of transporting oil through the system by 30 cents to 50 cents per barrel within five years.The pipeline was designed to transport 2 million barrels a day, which it did from 1979 through 1988. It now moves half of that. If new discoveries were made on the Slope, the pump stations now operating could be reconfigured to move up to 1.5 million barrels a day, Wight said."Our energy business in Alaska is right at the margin of competitiveness," Wight said. "Alaska has huge energy resources, but to make new oil fields on the North Slope economically viable costs must be trimmed, and Alyeska must play a key part in that reduction."As part of the strategic plan, Alyeska is looking again at how its personnel and resources are located, Wight told the Alliance.A few years ago the pipeline company reorganized into separate business units, but it is now apparent that some core functions, such as human resources, accounting and some engineering, could be more efficiently done from a centralized location."Our engineers, for example, are located in the field but not where our contractors are headquartered, which is where the planning takes place," Wight said. Just where people might be moved hasn’t been decided, he said.

Two Cook Inlet areas part of offshore lease sale

KENAI -- The federal government has announced a proposal to lease a portion of its Outer Continental Shelf planning area in Cook Inlet for oil and gas development.The proposal was announced by Secretary of Interior Gale Norton. The areas in Cook Inlet are part of a proposal to put 20 offshore areas in Alaska and the Gulf of Mexico up for lease.The Cook Inlet lease sales, numbers 191 and 199, are in an area roughly between Kalgin and Shuyak Islands, according to Minerals Management Service spokesperson Robin Lee Cacy. The MMS is the agency responsible for managing oil, natural gas and mineral resources on the Outer Continental Shelf in federal offshore waters.Currently, one-fourth of all oil and gas produced in the United States comes from the OCS. The new Alaska and Gulf of Mexico sales are expected to make 10.2 million to 21.5 million barrels of oil and 40 trillion to 60.6 trillion cubic feet of natural gas available for production.Cacy said the agency has begun taking the first steps toward offering the local areas for lease."We’re beginning to work on the EIS (environmental impact statement) to cover both Cook Inlet sales," Cacy said. She said the service has worked at assessing the potential impact development could have on Cook Inlet."We’ve done four (environmental impact statements) in Cook Inlet since 1977, so we have pretty good baseline numbers to look at. Now we’ll focus on new issues that have come up," Cacy said.One of those issues may be the effect exploration could have on Cook Inlet beluga whales. Environmental groups tried to block Inlet lease sales by the state of Alaska in April 1999 based on concerns for the whales, whose numbers in Cook Inlet have seen a dramatic drop in the past decade.Cacy said the proposal is needed to renew the government’s five-year leasing program, which ends in June. The new plan must still be reviewed by Congress for 60 days before going into effect. If finalized, the sales would take place in 2004 for lease sale 191, and 2006 for sale 199.The other proposed Alaska sales include three in the Beaufort Sea, two in the Chukchi Sea and one in Norton Sound.Cacy said she did not know what kind of interest from oil and gas companies the Cook Inlet sales would receive. However, the 1999 sale garnered substantial interest from oil companies, generating roughly $2 million in Cook Inlet lease purchases.

Heart association offers free CPR class

The American Heart Association is offering free cardiopulmonary resuscitation training April 28. CPR training will run from 9 to 11 a.m., noon to 2 p.m. and from 3 to 5 p.m. at the University of Alaska Anchorage Sports Center, 3211 Providence Drive. Registration is due by April 15.If properly performed, CPR can be a critical part of saving a person who is suffering a cardiac arrest, according to American Heart Association officials.For more information or to register, call 907-263-2014 or 907-929-2014. The association Web site also provides details about heart disease and stroke, (www.americanheart.org).National group presents program about multiple sclerosis April 18The National Multiple Sclerosis Society will offer a live interactive one-hour Internet program April 18. "Moving Forward ... A Program for People Newly Diagnosed with MS" begins at 4:30 p.m. Alaska Standard Time at the group’s Web site, (www.nationalmssociety.org).The program will feature Dr. Loren Rolak, director of the Marshfield Multiple Sclerosis Center in Wisconsin, who will address the medical aspects of multiple sclerosis. Beverly Noyes, director of the National Multiple Sclerosis Society’s program and staff development, will cover the impact, such a diagnosis has on emotions, families and employment. People participating in the interactive program can e-mail presenters questions for discussion.Similar programs also are presented live in June and September. These programs can be viewed live or accessed from the Internet archive called educational programs.To contact an area association chapter, call 800-344-4867.HealthSouth Diagnostic Center receives national recognitionHealthSouth Diagnostic Center of Anchorage is one of four national recipients of a company’s award honoring teamwork. The Pulling the Wagon award was presented March 15 at HealthSouth’s annual administrators’ meeting and awards banquet in Orlando, Fla.The Anchorage center received the award in the diagnostic imaging facilities category.HealthSouth Diagnostic Center, 4100 Lake Otis Parkway, is one of nine company facilities in Alaska. HealthSouth Corp. has almost 1,900 facilities around the world.


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