March-Issue-1 2002

Events celebrate ANCSA's 30th

Alaskans are celebrating the 30th anniversary of the Alaska Native Claims Settlement Act this spring. Passed by Congress in 1971, the claims act reshaped Alaska’s economy and the management of the state’s vast unpopulated areas.Among other things, the claims act made possible the construction of the trans-Alaska oil pipeline in 1974 and its completion in 1977.It was passed just in time to supply oil to U.S. markets when oil supplies from Iran were cut off in 1978. Because Alaska oil was available at that crucial time, many petroleum economists say the Iranian cutoff never led to an actual shortage of oil on world markets, unlike the shortages and worldwide panic that followed the Arab embargo of 1973.The actual Native claims act anniversary was Dec. 18, 2001, 30 years from the date the law was signed by President Nixon. But a number of educational activities related to the anniversary are continuing through the spring.Included is a series of four seminars at the University of Alaska Anchorage by people who participated in events leading up to passage of the historic legislation."So many people have forgotten what the claims act was and what it has done for Alaska, even our own young Native people," said Irene Sparks Rowan, a Native leader who helped organize the lecture series.The act was unusual in a number of respects. It has attracted worldwide attention for the way it resolved land claims by indigenous people and by the unique and innovative way in which the indigenous people, Alaska Natives, were economically empowered.It was of tremendous importance for Alaska, equal or approaching in significance, Alaska historian Jack Roderick believes, to the Alaska Statehood Act of 1958.The pipeline and North Slope oil production revenues made possible by the claims act also greatly boosted Alaska’s economic growth, and the private Native corporations created by the act have now become major employers and investors in the state’s continued development.Other important changes occurred as well. The 1971 act settled aboriginal land claims and cleared title to Alaska lands, allowing, among other things, for a land corridor for the trans-Alaska pipeline.The act also led directly to creation of the nation’s biggest national parks and wildlife refuges, and to vast parts of Alaska being given formal protection as wilderness.Section 17 d(2) of the claims act required the withdrawal of 80 million acres of federal lands for classification into a new system of national parks, wildlife refuges, national forests and wild and scenic rivers.These were created in the Alaska National Interest Lands Conservation Act in 1980, which also designed large areas for protection as wilderness.Despite these accomplishments, there are a number of loose ends remaining from the claims act and, in its wake, ANILCA.The most well-known is the unresolved subsistence wrangle. While the ambiguous rural preference for subsistence appears in ANILCA, the efforts to protect access to subsistence resources in rural Alaska, on both Native and public land, was a primary force behind the push for a land claims resolution by Native people."The land and subsistence was what was really important to us. Having control of the land was everything. Money was nothing," said Joe Upicksoun, a North Slope Inupiat leader, in the first of the University of Alaska seminars Jan. 26.Another loose end, many believe, is the status of tribal groups in rural Alaska, and the question of Native sovereignty in terms of government powers.A deliberate policy decision by Congress in 1971 was to form private corporations owned collectively by Native shareholders to receive lands and money transferred in the settlement.There was a decision to steer away from forming reservations governed by tribes. There was a feeling that system had failed Native Americans in the Lower 48.Some Alaskans felt the claims act, in settling land claims and establishing the Native corporations with land and cash, meant that tribes would not assume the quasi-governmental powers they have in the Lower 48 and that the federal government would end its special responsibility for welfare of Alaska Natives.The government, however, decided that the claims act did not do these things. The responsibility of the federal government for Alaska Native health and welfare has continued, although the health system has largely been privatized to Native-operated nonprofit corporations.Native tribes have also been recognized by the federal government, and recently by Alaska Gov. Tony Knowles. What is still unclear is the extent of tribal governmental powers in Alaska.

This Week in Alaska Business History February 24, 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 TimesFebruary 24, 1982More salmon can defects foundby Maureen BlewettTimes WriterFederal officials have widened their search for contaminated Alaska canned salmon after finding holes in 21 cans packed in "various" Alaska canneries. But U.S. Food and Drug Administration officials this morning refused to name which of Alaska’s 58 canneries are involved.Officials said they are "not ready yet" to recall all salmon canned in Alaska. Owners of the canneries which produced defective cans have been informed, said FDA spokesman Christopher Smith.Botulism is an odorless, tasteless poison which grows in the absence of oxygen. It is introduced through the holes after the salmon is packed.A Belgian man died of botulism poisoning Feb. 6 after eating salmon packaged by the New England Fish Co.-Whitney Fidalgo Co. in Ketchikan. Health officials in Belgium found a hole in the can the size of a pencil eraser.Anchorage TimesFebruary 24, 19823 firms to sign pacts for state royalty oilby Dave CarpenterTimes WriterThe native corporation representing Alaska’s Interior region and two oil companies with Kenai-area refineries have reached tentative agreements with the state to buy its royalty oil for the next years, officials from the three firms have confirmed.Natural Resources Commission John Katz is expected to announce the tentative contracts here Friday.The three companies selected by the Department of Natural Resources: Doyon Ltd., whose officials planned to sign a preliminary state contact today or Thursday for the purchase of a maximum 50,000 barrels of royalty oil per day. Chevron U.S.A. Inc., which would get an undisclosed amount of oil to increase production in its Nikiski refinery and boost in-state production of heating, diesel and jet fuel. Tesoro Alaska Petroleum Co., which would receive an undisclosed amount to use in its North Kenai refinery.10 years ago this weekAlaska Journal of CommerceFebruary 24, 1992Another protest filed over port studyBy the Alaska Journal of CommerceJUNEAU - A Maryland firm ousted as the apparent bid winner for the southcentral Alaska port study has filed a protest with the state, alleging it lost on a technicality.The Division of Economic Development has until Feb. 24 to issue a decision on the protest filed by ECO Engineering Inc., of Annapolis, said Phil Bennett, finance officer for the state agency."When the department made its decision based on anonymous phone calls it violated the rules under which protests are to be made," said Walt Parker, ECO’s representative in Anchorage."We were given absolutely no notice before the change of contact notice was made. It’s a violation of state statutes."Parker also said ECO’s $127,000 was considerably less than the amount bid by Peratrovich, Nottingham & Drage Inc., the Anchorage firm the state agency has now identified as the successful bidder.Alaska Journal of CommerceFebruary 24, 1992Kodiak breakwater to be advertisedBy the Alaska Journal of CommerceKODIAK - Phase one of the $32 million Kodiak breakwater project will be advertised later this year, after revisions sought by the city of Kodiak are incorporated, says the U.S. Army Corps of Engineers."We are redoing the plan specs and some of the environmental documentation, to designate a quarry site for the rock for the first phase of the contact," said Steve Bordman, chief of civil works programs for the corps.The Kodiak City Council "felt it was in the best interests of the community to try to guarantee the quarry site would be in St. Herman Harbor because removal of the fill material from that location would provide approximately 10 acres of uplands space for gear storage," said Harbormaster Corky McCorkle.-- Compiled by Ed Bennett.

Bills would ease permit buybacks

JUNEAU -- Bills aimed at increasing the efficiency of Alaska’s beleaguered salmon industry are moving through the Legislature.The House Resources Committee Feb. 13 approved a measure making it less cumbersome for the state to implement a limited entry permit buyback program.The committee is also looking at a bill that would let fishermen set up associations that could put together their own private buyback programs. Rep. Drew Scalzi, R-Homer, is sponsoring both bills.Both are aimed at reducing the number of nets in the water, so the remaining fishermen stand a better chance of survival in a market flooded with farm-raised salmon."It gives human beings a little bit more control instead of just flowing with the immediate market circumstance," said David Bedford, executive director of the Southeast Alaska Seiners Association and a board member for the United Fishermen of Alaska.A flood of farm-raised salmon has pushed down prices and made it more difficult for Alaska’s commercial salmon fishermen to stay afloat financially.The buyback bill, House Bill 288, would change existing law so that if the state Commercial Fisheries Entry Commission decides to go forward with a buyback program, it need only purchase a fisherman’s permit.State law currently requires a buyback to also include boats and gear."It would be a very cumbersome and expensive process," Scalzi said.The bill also removes a requirement that the state automatically begin a buyback program as soon as an entry commission study determines there are too many permits in a fishery.That change allows the commission to determine the optimum number of permits, information that fishermen could then use to decide how many permits to remove if they pursued a private or federal buyback.The bill also removes language calling for buyback programs to be paid for through an assessment on the fishery, leaving funding to be determined when a particular program is proposed.The measure next goes to the House Finance Committee.The Resources Committee is expected to act soon on House Bill 286, which lets permit holders in a given fishery form an association to consolidate that fishery.A fishery consists of fishermen using a particular type of gear in a particular area, such as Cook Inlet drift gillnet fishermen.The measure would allow such a group to assess a fee with approval of two-thirds of the permit holders. The money would be used to reduce the number of people fishing.The association would decide for itself how best to accomplish consolidation. Mary McDowell, of the commercial fisheries entry commission, said associations might create their own private buyback program or simply pay some fishermen to sit out a season.The measure also allows fishermen to hold two permits in a single fishery, although it doesn’t let them use any more gear than allowed for a single permit. Currently, fishermen can hold only one permit per fishery.Both bills are supported by various fishing groups, including the United Fishermen of Alaska.

Five Star Medallion chief works to change safety culture

Jerry Dennis has his work cut out for him.As the new executive director of the Five Star Medallion Program, Dennis is in charge of cutting Alaska’s aircraft accident rate by half in the next decade.That’s a tall order in a state that has the highest aviation accident rate in the nation.Dennis was hired last month to head the federally funded volunteer program to provide safety training to air carriers and help them establish safety programs."We’re hoping to have some impact," Dennis said. "It won’t be easy and it won’t happen overnight."Dennis, 59, brings with him decades of experience in aviation.He was a commercial pilot before joining the Army to fly helicopters and airplanes in Vietnam. In the military, he also served as an aircraft crash investigator. He went on to work for the National Transportation Safety Board investigating aircraft accidents. He also worked as an aviation insurance agent, accident investigator and underwriter."I probably have credibility with a lot of different venues," Dennis said.He also has seen many aviation accidents, at least 600 by his count, most in Alaska and most involving fatalities."The sad thing is, that in most cases, if you change the date on the picture and the (tail) number of the airplane, it is virtually the same accident," Dennis said. "The types of mishaps haven’t changed."One of the most common is called "controlled flight into terrain," a crash that is often the result of a pilot taking too many chances in bad weather.Poor pilot judgment has destroyed many good airplanes at a cost of hundreds of lives in Alaska, Dennis said.Since 1990, 460 people have died in aviation-related crashes in Alaska, according to the National Institute for Occupational Safety and Health. That number includes about 120 commercial pilots who lost their lives in airplane crashes.Commercial pilots have surpassed loggers and fishermen as having the most dangerous job in the state. Over a 30-year commercial flying career in Alaska, 11 out of 100 pilots will die in an airplane crash, 100 times the risk of an average worker in the United States, according to NIOSH."What we’re looking at and looking for is a fundamental change in the safety culture," Dennis said.Too many risks are being taken by pilots for the sake of their companies’ bottom lines, Dennis said. Crashing airplanes is never good for an air carrier, and as a group, more accidents mean higher insurance premiums."It is more economical to be safer," Dennis said.Key to the program will be education, not only to airlines and pilots but to the traveling public as well, Dennis said."Often it’s passengers who apply the pressure,’’ said Dennis, who intends to pitch the program’s goals to school districts and large companies that do business in the Bush.The Five Star Medallion Program is volunteer accreditation by Alaska air carriers that includes, among other things, a company safety program, simulator training, risk assessment checklists, increased mechanic and ground service training and independent safety audits.Sen. Ted Stevens, R-Alaska, included $3 million in this year’s transportation appropriations bill to fund the program, in which participating airlines will be given a star by the Federal Aviation Administration for each step of the program it completes. After a carrier has accumulated five stars, it must wait a year to be certified as having Medallion status. The carrier will undergo annual independent audits to retain the status.The Alaska Air Carriers Association administers the program, which in time is intended to be self-supporting through air carrier funding.

2001 a $1 billion year for Arctic Slope

Despite a slowdown in its aggressive growth, Arctic Slope Regional Corp. remains a powerhouse in the state’s economy. The Barrow-based Native regional corporation enjoyed more than $1 billion in revenues during 2001 for the second year in a row. However, the corporation’s rapid rate of growth leveled off last year. Net income for 2001 was about the same as in 2000. "It was a relatively stable year for us," said Jacob Adams, ASRC’s president, in a talk to the Resource Development Council for Alaska Inc. earlier this year. In broad terms, ASRC is consolidating many of its gains of recent years. Its Alaska assets performed well in 2001, with the exception of post-Sept. 11 impacts on Petro Star, a fuels refining company, according to Conrad Bagne, ASRC’s chief operating officer. But some out-of-state ventures also did not do well, particularly a plastics company, he said. That had an impact on the corporation’s bottom line.

Princess puts Royal Caribbean merger vote on hold

LONDON -- With its planned marriage to a U.S. rival now on hold, P&O Princess Cruises PLC is expected to come under intense pressure to talk with Carnival Corp., the No. 1 cruise operator, whose $5.4 billion bid for Princess sparked a shareholder revolt.Carnival won a tactical victory Feb. 15 after Princess shareholders voted to postpone a meeting at which they were to decide whether to approve their company’s proposed merger with Royal Caribbean Cruises Ltd.All three companies operate in Alaska.A 62.5 percent majority of investors chose to adjourn the meeting to give competition regulators in the United States and Britain more time to review Carnival’s bid alongside the proposed merger."We are committed to giving P&O Princess shareholders the opportunity to accept our increased offer, and we will focus all our efforts on securing regulatory clearance," Carnival Chairman Micky Arison said after the votes were counted.Princess insists that Carnival’s bid is unlikely to survive regulatory scrutiny. It argues that regulators are more likely to approve its proposed merger with Royal Caribbean, which it says would deliver more value to shareholders over the long run.Analysts estimate the Royal Caribbean merger to be worth about $3.7 billion for Princess shareholders."What the shareholders were saying is that they wanted more time to consider the alternatives. I don’t think they were choosing between them," said Peter Ratcliffe, Princess chief executive.Royal Caribbean shareholders called off a parallel meeting in Miami after learning the outcome of the voting in London. Royal Caribbean Chairman Richard Fain said he was "obviously disappointed.""However, we have to acknowledge that a shareholders’ vote is a democratic process, and naturally we respect the decision that has been reached at the P&O Princess meeting," he said. "Now we will need to consult with our advisers to determine the implication of the votes and their impact on the merger."Although Fain suggested earlier that his company might walk away from the merger if Princess shareholders delayed their decision, Royal Caribbean would face a $62.5 million breakup penalty if it did so before Nov. 16."At this stage, it’s not in their interest to walk really because it’s not clear that shareholders have voted ’no’ to a merger," said David Liston, a transportation analyst at the London brokerage firm Gerrard.Royal Caribbean, based in Miami, is the world’s second-biggest cruise operator with 23 ships and an estimated 22 percent market share. Princess ranks third with a 13 percent share of the global market and 18 ships.Carnival’s 43 ships give it a 27 percent share of the estimated global market for 2002, according to U.S. brokerage firm AG Edwards. By buying Princess, it would scuttle the competitive threat of a merger and become the industry’s unassailable leader.Business for all three companies foundered after the Sept. 11 terrorist attacks, and each is determined to cut costs and boost profits.Princess has refused to talk with Miami-based Carnival about its hostile bid, which Carnival has sweetened three times. However, Liston said Princess would face growing pressure to do so, given the preference expressed by a majority of its shareholders."They’re still very reluctant, but I think (the) vote has to improve the prospect of them talking, at least," he said.

Dollies could throw wrench in Juneau power expansion

JUNEAU -- A single 4-inch Dolly Varden trout could block development of new hydroelectric power for Alaska’s capital city.The proposed project would tap Lake Dorothy, a 3-mile-long, 560-foot-deep, glacier-fed lake on the east side of Taku Inlet."We are at a point where Juneau’s energy demand is equal to our firm hydroelectric energy supply in a dry year," Corry V. Hildenbrand of Alaska Electric Light & Power told the Juneau Chamber of Commerce last month. "Firm" refers to the minimum expected megawatts generated during a year with the least rainfall."Lake Dorothy would help provide low and stable electric rates, which would help provide an attractive business environment for Juneau," said Hildenbrand, who is both president of Lake Dorothy Hydroelectric Inc. and vice president of energy development at AEL&P.Lake Dorothy, which sits at an elevation of 2,400 feet, is 25 miles closer to downtown Juneau than is the Snettisham project, which now supplies most of the borough’s electricity.In addition to its nearness, said David Stone, vice president of consumer affairs for AEL&P, the $30 million Lake Dorothy project has two things going for it: A submarine cable laid in 1999 has sufficient capacity to transport any energy it would produce. The east terminal crossing of the cable is only three miles from where Dorothy Creek spills into Taku Inlet, the site where the proposed power house would be built.However, the monkey wrench for the project could be the Dolly Varden found near the mouth of Dorothy Creek during an environmental impact survey, Hildenbrand said.The Lake Dorothy project has been talked about for 60 years.As seen from the air, Lake Dorothy and two other lakes below it resemble a stepped fountain. Dorothy pours into Lieuy Lake, which pours into Bart Lake, which discharges into Dorothy Creek. With gorges and waterfalls galore, it is "extremely rough terrain," Hildenbrand said, best accessed by using a penstock rather than a dam approach.A penstock is a tube or trough for carrying water and controlling its flow. A tunnel would be drilled to tap Lake Dorothy 100 feet below its waterline, and a "faucet" installed to control the water flow to Lieuy. Dorothy would be considered a reservoir, used as needed.That would be the last phase of the project. Phase I would be to build an access road to Bart Lake and tapping it. Phase I could generate a maximum of 14.3 megawatts of power.Phase II would tap Dorothy and connect it to Lieuy and Bart. That would generate an output of 30.3 megawatts, which Hildenbrand calls "a nice resource for the future of Juneau."The first preliminary permit for the project was received in 1996. Lake Dorothy Hydroelectric Inc. filed an environmental impact statement in June 2001, only to find that additional studies were required. In October, LDHI met with resource agencies to discuss issues related to fisheries and water resources. If all goes well, a final permit could be issued in September 2003, Hildenbrand said.But then there’s that trout. Dorothy Lake has been stocked with eastern brook trout, a non-native species. There is some concern that draining water from Dorothy during spawning months would endanger the brookies’ habitat, Hildenbrand said.The U.S. Forest Service is not concerned with preserving this non-native species, and might allow LDHI to provide fisheries mitigation in another location to make up for its impact here. However, the agency is concerned about the native Dolly."If we have to preserve the habitat for (Dolly Varden) trout, we don’t have a project," Hildenbrand said.But Pete Griffin, head ranger for the Juneau Ranger District with the Forest Service, put a slightly different spin on the situation: "From our standpoint, it’s a good project, and the folks in charge of the planning have been very responsive to our needs."I don’t think there will be a problem (with the Dolly Varden), but we need to assess the difference between the habitat that is there now and what will be there when the plant is operating," Griffin said.If LDHI gets construction permits, it would prepare the site in 2003, constructing an access corridor to Bart Lake, and taking rock samples where tunnels would be sited. In 2004, it would clear the transmission right of way from the mouth of Dorothy Creek to the east terminal of Snettisham Lake. In 2005, penstock and tunnels would be constructed. The project would go online in November 2006, making 2007 the first full year of operation.The Lake Dorothy substation would be unmanned, visited by maintenance crews twice a week.

British Columbia fish farm tests waters with lucrative black cod

KODIAK -- Totem Seafarms of Jervis Inlet, British Columbia, put some of the first farmed black cod, also called sablefish, onto the market in mid-January. According to the Fish Information Service, Totem’s Gus Angus said that even though the 750, five-pound fish were more of a sample for the market than a real commodity, he believes there is a bright future for sablefish aquaculture. "It’s going great. It is in its absolute infancy. There is a tremendous amount of work to do in hatching and rearing. It’s a great fish," he said. Angus said the quality of the flesh was very acceptable to the market, and the fish fetched about the same price as wild black cod in the seven- to nine-pound range, around $4.50 Canadian a pound. A private firm called Island Scallops Ltd., is also hatching sablefish for sale to grow-out sites. The company supplied 13,000 fish to growers in 2001 and intends to have 100,000 available this year. Spokesman Robert Saunders said there are other marine species under consideration by the aquaculture industry, but right now sablefish is what he calls the "prime candidate." With wild black cod being one of the most valuable fish on the market, interest has been high to develop a farmed version. Commercial fishermen in British Columbia are alarmed by the government’s support of black cod aquaculture in the province. Chris Acheson of the Canadian Sablefish Association told FIS the government is not taking into consideration the economic and environmental impact such aquaculture could have on the wild industry. A recent study prepared for the government of British Columbia stated that once farmed black cod is produced in large volumes, it could cause a price drop of 40 percent in the price of fish. The report predicted that aquaculture could be producing potentially up to 16,000 tons by 2021 with revenues of $22 million to $114 million Canadian. Flying squid destined for Japan After years of quiet preparation, a handful of U.S. vessels has begun jigging for neon flying squid in the North Pacific. Several former Bering Sea crabbers have been outfitted with jig machines for flying squid, an abundant high seas resource that has been harvested only slightly since the international ban on high seas driftnetting went into effect in 1993. Until then, the Asian driftnet fishery yielded 300,000 metric tons per year worth roughly $1 billion in 1990. Industry reports said that about 15 Japanese vessels are already jigging in the region, as well as some from British Columbia. Nearly all of the catch is destined for Japan. Several species are considered of primary interest: red flying squid, neon flying squid, purpleback flying squid and diamond-back squid, which often exceeds three feet in length and weighs up to 50 pounds. Its large, tender, muscular mantle commands a premium price in Japan. Fishermen on watch Thousands of fishermen and lobstermen are being asked to join a new floating security network to help spot terrorist threats along Maine’s craggy coastline. The Kennebec Journal reports the Coast Guard is mailing notices to 9,000 Maine fishermen as part of its Coastal Beacons Program. "They’re the guys that are out all the time. They know when things are out of the ordinary," USCG spokesman Arn Heggers told the Journal. It is hoped that fishermen will tell them about anything suspicious, such as unfamiliar vessels transferring cargo on the water or unfamiliar people taking pictures of bridges or waterfront facilities. Demand for U.S. pollock increases Alaska longliners got a boost in their halibut catch to nearly 62 million pounds, up from roughly 58 million last year. The fishery will also open three days later than usual on March 18 to accommodate market opportunities. The season will end on Nov. 18. Pollock from the United States has become the major supplier to world markets. The director of the U.S. Surimi Commission said that declines of nearly 45 percent in Russian catches have resulted in a general shortage of both surimi and fillet blocks in the global market. Demand for U.S. pollock by European buyers has increased dramatically. Imports of fillet blocks to Europe last year were five times higher than in 2000. In order to respond to the increased demand, processors are focusing more on fillet blocks, which food manufacturers turn into fish portions and fish sticks, than on producing surimi. This year’s pollock quota in the Bering Sea is roughly 3 billion pounds, with an additional 1.2 million pounds coming from the Gulf of Alaska. That’s 3 percent higher overall than last year, "but this is not enough to compensate for landing declines seen in other fisheries," the director said.  

House committee passes own minimum wage bill

The House Labor and Commerce Committee sent legislation hiking the state’s minimum wage to $7.15 per hour to the Finance Committee Feb. 5, but an amendment limiting a cost-of-living "inflator" in the minimum wage to 50 percent of annual increases in the federal Consumer Price Index may create complications for the legislation.An initiative filed by labor groups raising the minimum wage includes a provision for the wage to be adjusted 100 percent to changes in the CPI. Unless the Legislature passes a law "substantially similar" to the initiative petition, the initiative will go on the general election ballot.Rep. Pete Kott, R-Eagle River, made the amendment to limit the bill to 50 percent of the CPI. Rep. Harry Crawford, D-Anchorage, a member of the Labor and Commerce Committee, said the change would likely draw a legal challenge from groups who filed the petitions.House Bill 298 extends lease termsLegislation extending the period that land can be leased from the state-owned Alaska Railroad Corp. has passed out of the House Labor and Commerce Committee. House Bill 298 would extend the maximum lease period from 35 years to 50 years. A similar bill, SB 209, is in the Senate Resources Committee.Railroad officials told the House committee that developers planning projects on lands owned by the railroad need more than a 35-year lease to arrange financing for their projects.

IT systems integration and hamster hunting

Virtually every business has a rodent problem. They’re in your cubicles and behind your Web site; their nests are inside your servers and workstations.Listen closely the next time you buy something online, make a stock trade, or register for a class. Do you hear the scurrying noise? Those are the hamsters, running data between computer systems.Those systems can’t talk to each other.The squeaky hamster sound is also the sound of your business losing money. According to Gartner Research, 80 percent of all online transactions are processed manually and in batches rather than automatically in real-time.Systems integration, the single greatest business information technology expenditure today, is the process of connecting disparate systems that weren’t originally designed to talk to each other.Systems integration is hunting down and killing the hamsters.The greatest benefit of integration is the cost savings. It makes business more efficient by centralizing data and eliminating the need for duplication and double entry. It reduces transactional errors and increases efficiency.And it minimizes the number of hamsters you have to feed.The downside of integration, of course, is that you have to spend money. Sometimes, a lot of it. And while hamsters are inefficient, they can still make judgments that a computer cannot when presented with nonstandard data.Before you kill the hamster, make sure the system you’re replacing it with is smarter than your average rodent.Recognizing firm’s integration needsIf you find yourself saying, "If only our customer records could be connected to our e-mail system," or "If only our accounting software could talk to our reservations database," then you have an integration problem.The larger the organization, the more likely integration challenges will be. The Internal Revenue Service, for example, awarded a $7 billion contract to overhaul its IT architecture and integrate or replace hardware and systems dating back to the 1960s, all without interrupting more than $3 trillion a year in transactions.Thankfully, most businesses don’t have to deal with integration of that scope. Consider this example:A potential customer submits a brochure request from your Web site. Jane receives it by e-mail, prints it, carries it down the hall, and hands it to Bob in fulfillment.Bob retypes the request into his database, prints off the label, and drops the brochure in the mail."Aha! A hamster," you say.Here are some possible solutions to consider.Solution 1: Wait to integrateYou could just leave it alone.It really comes down to volume. Suppose you can fully integrate your Web site with your fulfillment system for $5,000. No e-mails, no printing, no walking down the hall, and no retyping will be the outcome.But then suppose you only have to do this once a day. Should you spend the money? Probably not. If you’re doing it every hour, on the other hand, then the expense is warranted.Solution 2: Rip and replaceSmall to midsize businesses can often get away with the "rip and replace" solution. That is, rip out the component that is most difficult to integrate and completely replace it with a more compatible one.Continuing with our example, you’ve determined that the hamster system costs too much. You tell Bob to rip out the current fulfillment software and replace it with new software that includes a built-in Web site module.Now, customers submit brochure requests from the site and they are inserted directly into Bob’s database.Bye, bye, hamster.Solution 3: Use middlewareRip and replace doesn’t work well with larger organizations. You’ve already invested hundreds of thousands in your fulfillment software, so you can’t get rid of it. And your Web site is tied into lots of other systems already, so you can’t throw it out, either.Enter middleware. Middleware is software designed to sit in the middle of two different systems. Middleware is designed to do what your hamsters do, only in an automatic way.The Web site passes information into your new middleware application, which then delivers a translated version to your fulfillment system in a format that it can understand.Middleware can be designed by your in-house integration team, if you have one, or outsourced to a company that provides systems integration services.Middleware also comes in two flavors: the snapshot model or transactional model. A snapshot is a transfer of data that occurs on a schedule, once a day, for example.Transactional middleware is generally more expensive, but it is the holy grail of systems integration. Data transfer occurs in real time, so data is always current.One pitfall of middleware is the intelligence that you have to design into it. The rip and replace solution allows you to use systems that talk the same language; middleware, however, requires you to get into the translation business.Be sure your middleware does not move a decimal point and send all your customers a giant bill.Happy hamster huntingThe real trick is comparing the cost of retaining your current hamster system with the cost of a systems integration project. If integration will save you money, then do it.Otherwise, be sure to keep the hamsters happy.Scott Gere is chief executive at Impact LLC, an Anchorage communications and technology company. He can be reached via e-mail at ([email protected]).

Plan for yourself, then children

At a time when middle-aged couples should be saving for their retirements, many are squeezed by competing financial needs. Having started families later than past generations, their children may just now be entering college or still living at home. At the same time, aging parents may need financial assistance. It is a dilemma that is likely to become more common.Assisting your childrenFor many families, college costs are a significant financial burden. While you may want to pay all college costs for your children, it may not be feasible with competing needs to save for retirement and to assist your parents. Some strategies to consider include: Shift some of the burden to your children, requiring them to work part time during college or to take out student loans. Understand the financial aid system, investigating all financial aid sources. Search for scholarships that are not based on need. Apply to several different colleges, looking for the best financial aid package. Negotiate with your child’s preferred college to see if you can increase the financial aid package. Look for ways to reduce the cost of college. Your child can start at a community college, which is often cheaper than a four-year college, especially when the child commutes from home. Or consider a public university in your state, which will generally be more affordable than a private university.Once your child graduates from college, don’t assume your financial responsibilities are finished. Adult children may return home for a variety of reasons: They can’t find a well-paying job, they have too much debt to live alone, or they divorce and need financial support. If your child returns home, realize that there are increased costs, such as additional food, phone bills and utilities. Consider charging rent and imposing a deadline on how long he or she can stay.Caring for parentsAs life expectancies continue to increase, it becomes more likely that you may need to help an aging parent. Some financial precautions you can take now include:Investigate long-term-care insurance for your parents. If they can’t afford the insurance, you may want to purchase it for them. Have your parents prepare a complete listing of their assets, liabilities and income sources, including the location of important documents. This can save time if you need to take over their finances. Make sure your parents have legal documents in a place so that someone can take over their finances if they become incapacitated. They may also want to delegate health care decisions. Understand the tax laws if you support your parent financially. You may be able to claim them as dependents if you provide more than half their support. Additionally, you may be able to deduct medical expenses you pay on their behalf. Find out if your employer offers a flexible spending account for elder care. This may allow you to set aside pre-tax dollars to pay for up to $5,000 of eldercare expenses for a dependent parent.Don’t forget yourselfWhen faced with the competing needs of children and aging parents, it’s easy to neglect your own need to save for retirement. But don’t feel guilty about your retirement needs. One of the best gifts you can give your children is the knowledge that you will be financially independent during retirement. Consider the following: Calculate how much you need for retirement and how much to save on an annual basis to reach that goal. Don’t give up if that amount is beyond what you’re able to save now. Start out saving what you can, resolving to significantly increase your savings once your parents’ or children’s needs have passed. Also consider changing your retirement plans, perhaps delaying your retirement or reducing your financial needs. Take advantage of all retirement plans. Enroll in your company’s 401(k), 403(b) or other defined contribution plan as soon as you’re eligible. Also consider investing in individual retirement accounts. Reconsider your views about retirement. Instead of a time of total leisure, consider working at a less stressful job, starting your own business, or turning hobbies into paying jobs.In an increasingly complex world it is sometimes overwhelming to think about these issues. If you find yourself not knowing where to start, think about meeting with a financial planner. He or she can assist you in developing a road map for a successful financial future.Michael Shamburger is vice president of First Interstate Bank of Alaska. He can be reached via e-mail at [email protected]

Proposal would put brand on Inlet sockeye, boost fishery

KENAI -- Back when making a small fortune hauling sockeye from Cook Inlet seemed commonplace, good fishing practices often amounted to filling boat holds with as many salmon as possible in the shortest amount of time.Little care went into preserving the best possible quality, because there was no pressure to do so from the marketplace.Those days are gone now. Prices are down, and many commercial fishermen are struggling. The advent of farmed salmon has flooded the world market with a high-quality product free of the kinds of blemishes that seining and drifting methods made common in Alaska’s annual fish harvest.To compete and still maintain the familiar lifestyle, Cook Inlet fishermen must be willing to handle their product much more carefully, said Kenai Peninsula Borough Assembly member Chris Moss of Homer, an Inlet seiner by trade.Then, they have to find a way to market the resulting high-quality fish as more desirable than the farmed variety, he added."Without a visible and credible presence in the market, Cook Inlet sockeye would fade into the rear echelons, attractive only to bargain hunters and serving merely as a backup in times of shortage, while farmed and branded wild salmon lay claim to customers and market niches," he said in a recent letter to the assembly.An ordinance sponsored by Moss and introduced Feb. 5 seeks to meet the problem head on. It would appropriate $305,550 to the Cook Inlet Sockeye Branding Project, a program recommended last fall by a committee of fishermen, processors, industry leaders, elected officials and borough staff. It would marry an intense quality-assurance policy to an Inlet brand and market Inlet salmon to high-end niche markets worldwide.The ordinance gets a public hearing March 12.Continuing to operate as the industry does today would be disastrous, Moss said. Prices would sink, fishermen would abandon the occupation, the Peninsula’s economy would suffer, all unacceptable outcomes as far as he’s concerned."A diligent effort to adapt to the modern seafood marketplace is the only available alternative," he said.The Kenai Peninsula Borough invested $95,000 last year, assessing needs, developing handling and quality guidelines, drafting certified quality specifications and developing a marketing strategy.A final program plan that grew out of that effort was adopted last fall.A steering committee formed to implement the plan, of which Moss is a member, believes the branding project will take three to five years to become firmly established.Several possible funding sources have been identified, including federal, state and local government grants, private corporate donations or loans and monetary support from the fishing industry itself. Three grant applications are in the works seeking start-up funding for the first year.However, the timing of any grant approvals is critical, Moss said Feb. 12.Paperwork could put actual money-in-the-hand funding off until April or May, delaying implementation of the quality-assurance program until too late in the season to produce a sufficient quantity of product for a planned test-marketing effort next fall.Hence, the borough is being asked to front the $305,550 in start-up funds needed by the program. Subsequent grants would be used to pay back some or all of the money, depending upon the success of the grant applications, Moss said.It may take effort, but raising the market-end quality of Cook Inlet salmon can be achieved, Moss said. Fishermen and processors will have to alter the way they handle fish, for instance, by putting fewer fish in each brailer bag, avoiding dropping fish and making shorter sets so the fish are alive when they’re hauled on board.In some cases, physical changes to vessels may be necessary, he said.What can’t be known for sure, Moss acknowledged, is whether the marketing necessary to compete effectively with farmed salmon or with established brands of quality wild salmon will be effective. But it’s worth a try, because the alternative is further decline of the industry, he said.Singing the praises of the Alaska salmon’s wild, free-roaming, deep-ocean, pristine-water life cycle may be one effective tool."What sells is a great story," Moss said. "Fish in a pen? There’s no story in that."Establishing a quality-control program and putting a better product before consumers isn’t likely to return the Cook Inlet salmon industry to the glory days. It may not even result in more money per pound. But it may help stabilize prices in the long run, and right now, that’s OK, Moss said.The branding project has been estimated to cost more than $1 million over three years, not including vessel-modification expenses fishermen would have to absorb.A source of future funding could be the raw fish tax, but that would require state legislative action, Moss said.

Aircraft accidents slip to five-year low, but fatalities up

Aircraft accidents in Alaska were down by 25 percent last year compared with 2000, and were the fewest in five years.But commercial airline crashes in Alaska accounted for 22 fatalities in 2001, the highest since 1997, according to Federal Aviation Administration statistics.Noncommercial aircraft, also known as general aviation aircraft, accounted for six deaths in 2001, bringing to 460 the number of people who have been killed in all aviation crashes in Alaska since 1990.The decrease in airplane accidents in Alaska is welcome news to a state that for decades has averaged a plane crash every other day and a fatality every 10 days, said Kent Adams, the FAA’s assistant division manager of flight standards in Anchorage."The numbers looked encouraging,’’ he said.Many factors probably contributed to the decreased accident rate last year, Adams said, including a slight decrease in air traffic, increased insurance costs and aviation safety programs.General aviation and commercial carriers combined racked up 102 crashes in 2001, down from 136 in 2000. The five-year average for aviation crashes in Alaska is 143 annually, according to the FAA.The FAA issued its year-end totals Feb. 2.General aviation accidents slid from 104 in 2000 to 80 last year, a 23 percent decrease. The five-year average for general aviation accidents is 114 annually, according to the FAA.Six people died in general aviation accidents in 2001, compared with 12 who died in such air cashes in Alaska in 2000. For the past five years, the state has averaged about 15 deaths annually in noncommercial aircraft.The six deaths last year resulted from three separate air crashes, according to the FAA. In 2000, there were nine fatal air crashes, which nearly mirrored the five-year average of 8.4.Air carriers in Alaska last year tallied 22 accidents, down from 32 in 2000. The five-year average for air carrier crashes is 36, according to FAA statistics.Five fatal air crashes resulted in 22 deaths last year on commercial aircraft compared with 2000, where 12 people died in five aircraft accidents in Alaska, according to the FAA.The deaths last year were the highest since 1997 when 28 people lost their lives on commercial aircraft.Also, 1997 was a deadly year for general aviation, which had 27 fatalities in noncommercial airplane crashes.The FAA’s year-end accident report said while the number of air carrier accidents decreased last year, the increase in fatalities was largely because of Peninsula Airways Inc. Flight 350, which crashed Oct. 10 just after takeoff from the Dillingham airport, killing the pilot and all nine passengers.The second worst air accident in the state last year was in July, where six people died in a Southeast-based L.A.B. Flying Service Inc. crash on a glacier 13 miles southwest of Haines, according to the FAA.PenAir’s crash was Alaska’s deadliest commercial aircraft accident in 14 years. Federal investigators have not yet determined the cause.Ironically, it was PenAir’s safety program that was used for a model for the Five Star Medallion Program, a federally funded volunteer accreditation program designed to decrease the number of accidents in Alaska by half over the next decade.

100 logging permits in Tongass nullified

SAN FRANCISCO -- A federal appeals court nullified as many as 100 logging permits Feb. 13, a decision mainly affecting tree harvesters in the Tongass National Forest in Southeast.The 9th U.S. Circuit Court of Appeals said environmentalists and others should have been given a legal forum to protest new rules allowing the companies to produce more wood waste in estuaries and coastal zones than previously permitted.At issue are the federal permits to run logging transfer facilities. The facilities are estuaries or other coastal areas into which harvesters dump their logs before they are shipped away. The logs are tied together to form log rafts and they are floated in the water to market, a process that can cause pollution from bark and other wood debris in coastal inlets.Two years ago, the Environmental Protection Agency issued new guidelines that permitted harvesters to increase the amount of waste, but did not give environmentalists an opportunity to oppose the new measures. The three-judge panel pointed out that, had the government imposed stricter rules, logging interests would be making the same argument."If the EPA had reached the opposite conclusion, and had added additional requirements to the final permits, Alaskan logging interests would surely have taken the position that notice and comment had been inadequate," Judge Sidney R. Thomas wrote for the San Francisco-based court.Sharon Buccino, a Natural Resources Defense Council attorney, said that the transfer facilities, which she called "logging dumps," kill marine life and ruin coastlines."The ultimate goal is to preserve the ability of Alaska Natives and others to continue to use these waters for a variety of uses: subsistence fishing, commercial fishing, recreation and ecotourism," she said. "The timber companies should not be allowed to monopolize this public resource."The permits in question will not be voided until the court’s decision becomes final in about a month. The court instructed the EPA to renew the permit-formulating process and allow the public the "ability to comment on whether the proposed permit complied with water quality standards."Bill Dunbar, an EPA spokesman in Seattle, said the agency was reviewing the decision and declined comment.John Peterson, a Ketchikan attorney representing the Alaska Forest Association, which opposed the environmentalists in the case, declined comment. John Tillinghast, a Juneau lawyer for logging concern Sealaska Corp., which sided with the forest association, did not return phone calls.Generally, under most of the previous permits, logging groups were allowed to cover one acre of an estuary’s floor with up to 10 centimeters of waste. The new rules eliminated the one acre rule and said the zone of deposit could comprise a company’s project area, which could be several acres.

Ketchikan hospital to debut MRI soon

Ketchikan General Hospital is renovating a room as part of its plans to debut a magnetic resonance imaging unit this spring.The MRI should be installed and operating by mid-April, said Rachael Morland, Ketchikan General’s manager of community relations.Patients now travel to Seattle for MRI procedures, she said. The new equipment also expands the hospital’s diagnostic services."It gives our local doctors a local resource for diagnostics," she said.The project represents a $1.1 million investment for Ketchikan General Hospital, said assistant administrator David Smith. The MRI, manufactured by Philips Medical Systems, is the Intera Power 1.0 model.Hospital officials have considered adding MRI equipment for eight to 10 years, Smith said. He has conducted four feasibility studies to gauge economics of purchasing the MRI.Finally, prices dropped on the equipment, and the numbers made sense, he said. Hospital officials identified the service as a growth area because residents could visit Ketchikan for an MRI rather than travel to Seattle, he said.An MRI in Ketchikan perhaps will boost early detection of disease, said Corrine Olson, nurse manager at the Ketchikan Public Health Center.Although the center doesn’t handle acute care, it does perform some analytical services like Pap smears. Olson knows the value of early detection for breast cancer among other conditions."This will definitely be easier access and hopefully that will promote earlier identification of a problem," she said.Travel to Anchorage or Seattle is a concern for community residents and can be costly, she said. Once the MRI is operating in Ketchikan, residents from area villages can benefit because they would have to travel a shorter distance to receive care, Olson said.Without the service in the community, Smith believes residents delayed diagnosis and treatment, in part because of travel. For some patients the distance to an MRI perhaps has been too cumbersome, Smith noted."I’m sure there’s times when the scan just doesn’t get done," he said.

Native claims act broke new ground in land settlement

What was the Alaska Native Claims Settlement Act? Enacted by Congress in December 1971, the law created 13 Alaska Native regional corporations following the major regions of Alaskan Eskimos, Indian and Aleut people and also provided for village corporations within each region. About 45 million acres of land was transferred to the Native corporations. Regional and village corporations selected lands through a complex process that is still under way 30 years later. Regional corporations can own surface lands and subsurface rights. Village corporations can own surface lands, with subsurface rights held by the regional corporation. Unlike other private corporations, shareholders in Native corporations cannot sell their stock unless the corporation shareholders agree to allow sales. So far no corporation has done so. The private Native corporations were to invest in business and development activities to create wealth, jobs and opportunities for their Native shareholders. Today Alaska’s Native corporations are some of the state’s biggest business enterprises. The principal purpose of the act was to resolve long-standing aboriginal claims to lands in Alaska, which by the 1960s had reached a point where a legal cloud on title of land in Alaska existed. Unlike Native Americans in the Lower 48 states, Alaska’s Native people had never been dispossessed of the use and occupancy of their traditional lands.

Tourism association hopes to lure Alaska visitors with Web specials

The Alaska Travel Industry Association has added a new feature to its Web site in an effort to promote Alaska tourism businesses and bring additional visitors to the state.In early February ATIA started offering a travel specials section at its Web site, ("This allows visitor businesses to post travel specials to a section of our consumer Web site aimed at visitors," said ATIA President Tina Lindgren.The promotion comes as ATIA research has shown early season bookings across most sectors of the tourism industry are down 30 to 46 percent.ATIA’s Web site averages about 90,000 visitors each month, which can provide exposure to Alaska tourism companies, Lindgren said.Other destinations around the country are offering similar Web-advertised specials, she said.ATIA officials started the service "to help motivate people to come to Alaska, especially those who are price sensitive," she said.Residents, too, may find travel ideas on the site."Of course Alaskans can choose to take advantage of it," she said.ATIA will also continue its advertising campaign through March to encourage Alaskans to support the industry by touring the state themselves or with visiting friends and relatives.ATIA also is advertising Alaska on the Internet via banner ads and e-mail messages, Lindgren said.The service is available to ATIA members for $100 per 30-day segments. Offers should be related to Alaska travel and available to all consumers. The organization recommends specials should discounted by at least 15 percent or a $50 price reduction to ensure a perceived value.For more information, contact ATIA cooperative marketing manager, Charlene Spadafore Vassar at 907-929-2842 or e-mail ([email protected]).

Best Buy takes contractor bids for new Anchorage store

In mid-February national retailer Best Buy Co. Inc. was lining up a builder to construct its first Alaska store in Anchorage. The electronics, personal computer and appliance retailer plans to tear down the former Alaska Marketplace at the Dimond Center and build its own facility, said company spokeswoman Connie Stelter.At press time four area general contractors were bidding on the project, and the contract was to be awarded later this month, she said."We will be demolishing the existing (former) grocery store which was attached to the mall and build a new store in its place which will be attached to the mall," she said.Best Buy is scheduled to open in Anchorage this fall, she said.The retailer now tallies 478 stores in 44 states and adds about 60 new stores annually. The Alaska addition is significant for the company, she noted.The Alaska store will be the first Best Buy store outside of the contiguous U.S. states, Stelter said. "We are always looking to meet our customers’ needs. Choosing a site is a combination of consumer research, the availability of the right site or building."In Anchorage the store will be near other major retailers Costco, CompUSA, Kmart, Sam’s Club, OfficeMax and Wal-Mart.The new store should measure about 45,000 square feet and employ 125 to 150 full- and part-time employees, Stelter said. The ratio of part-time to full-time employees differs for every store, she added.Best Buy, based in Eden Prairie, Minn., aims to have more than 550 stores nationwide by 2004. The company has a presence in Alaska with six Sam Goody stores in Anchorage plus two in Fairbanks and two Suncoast Motion Picture Co. stores in Anchorage.The new Best Buy in Anchorage will be one of the company’s larger versions. Best Buy operates half of its stores at a 30,000-square-foot model while the remainder are the 45,000-square-foot versions.In addition to Alaska the retailer plans grand openings in Idaho, West Virginia, Wyoming and Utah. Growth in the next two years also includes eight to 10 new stores in New York, including its first Manhattan store. Best Buy also plans to open a flagship store in downtown San Francisco.


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