Tax law changes retirement plan rules

After four attempts in prior sessions, Congress finally enacted, and President Bush signed into law, major 401(k) and pension law changes in June. These changes are generally effective for plan years beginning in 2002.The new pension provisions are part of the budget bill, known officially as the Economic Growth and Tax Relief Reconciliation Act of 2001. This column will focus on changes that directly affect employers who act as plan sponsors. Larger profit sharing deductionsEffective with the 2002 plan year, the maximum deduction limit for profit sharing plans increases from 15 percent of the taxable wages of plan participants to 25 percent of the gross wages of the participants. This is particularly significant with respect to profit sharing plans that include 401(k) provisions.Definition of wagesFor 2001 and prior plan years, the deduction limit was based on the wages of participants after reduction by untaxed wages, specifically 401(k) elective contributions and cafeteria or flexible benefits plan salary set-asides.For example, if our theoretical participant Susan’s gross wages equaled $40,000 and she made elective contributions of $6,000 to a 401(k) arrangement, her taxable income is $34,000. Her employer, when calculating how much it can claim as a tax deduction for profit sharing contributions, can only count the $34,000, rather than $40,000, in wages when calculating the 15 percent limit prior to 2002.Effective with the 2002 plan year, the employer can count Susan’s entire wages of $40,000 when calculating the 25 percent maximum deduction limit.Employee elective contributionsParticularly galling to many employers has been the fact that the elective contributions, or deferrals, employees have made from their own pay to the 401(k) component of a profit sharing plan are treated as employer contributions for deduction purposes, which can significantly limit the deductible profit sharing contributions an employer may make.If Susan were the only participant in the plan, under the rules in effect for 2001, the employer’s maximum deduction for profit sharing contributions would be limited to $5,100, or 15 percent of $34,000.However, since total deferral contributions by Susan were $6,000, not all of her contribution is deductible by the employer who can deduct only $5,100 and must pay an excise tax equal to 10 percent of the $900 nondeductible contribution, or $90. Of course, there is no "room" for an employer contribution at all.Effective for plan years beginning in 2002, the employer’s profit sharing deduction limit increases to 25 percent of gross wages from 15 percent of taxable wages and employee deferrals are no longer treated as part of the employer’s contribution when calculating the profit sharing deduction limit.Removing employee deferral contributions from the employer’s contributions for deduction purposes is extremely important, particularly in light of the changes made to the calculation of an employees’ limit on annual additions effective for the 2002 plan year.For the 2001 plan year, an employee’s limit on annual additions is capped at the lesser of 25 percent of wages or $35,000. Annual additions are the sum of employer and employee contributions, both pre-tax deferral and after-tax contributions, plus forfeitures reallocated to the participant. Wage earners making less than $42,000 in 2001 are unable to make the maximum deferral contribution of $10,500 since it is greater than 25 percent of pay.Effective for the 2002 plan year, the 25 percent limit on annual additions is repealed. The only limit is the dollar cap, which increases to $40,000 for plan years ending in 2002. This effectively means that a lower paid employee making $18,000 will theoretically be able to make 401(k) deferral contributions of $11,000 (the 2002 increased limit) even though that amount far exceeds 25 percent of pay.Of course, in most cases, an $18,000 wage earner will be unable to take advantage of this generous new limit, unless it is a second family wage.Money purchase plansMany small employers have adopted a money purchase pension plan in addition to a profit sharing or 401(k) plan in order to work around the 15 percent deduction limit on profit sharing contributions in effect through the 2001 plan year.Money purchase pension plans effectively have a deduction limit of 25 percent of pay, but the trade-off is the employer contributions to the plan are mandatory, unlike employer profit sharing contributions, which are generally discretionary. Hence, the second plan has traditionally been set up with a 10 percent contribution allocation rate to achieve the maximum deduction limit with 40 percent of that contribution being mandatory.With the increase of the profit sharing deduction limit, most money purchase plans in these paired arrangements are likely to be terminated or merged into the surviving profit sharing plan. The employer must take certain steps to effect these changes, including new notice requirements for pension plans that are being terminated or merged into another plan.Particularly for employers sponsoring standardized prototype money purchase pension plans, it may be necessary to take action no later than November 2001 to eliminate the pension plan for 2002. ConclusionThe change in the structure of and the increase in the profit sharing deduction limits, along with the elimination of the participant’s percentage limit on annual additions will require employer and plan sponsors to rethink the design of their qualified retirement plans.Particularly with respect to the elimination of the 25 percent annual addition limit, it will require the plan sponsor to amend its plan or plans to take advantage of this change.J. Michael Pruett is president of Cache Pension Services Inc. in Anchorage. He can be reached at ([email protected]).

Around the World September 16, 2001

STATESubsistence panel works on amendment wordingANCHORAGE -- An 11-member subsistence panel appointed by Gov. Tony Knowles went to work Sept. 11 crafting language for a proposed subsistence amendment to the state constitution.Knowles told a meeting of the Anchorage Chamber of Commerce Sept. 10 that he’s prepared to call the Legislature into special session to consider the amendment. The subsistence group led by Attorney General Bruce Botelho is following up on the conclusions of the subsistence summit Knowles called last month. Most members of the panel attended that summit.Chugach, CIRI look at Fire Island wind powerANCHORAGE -- Two Anchorage companies are considering the idea of generating wind power on Fire Island in Cook Inlet west of Ted Stevens Anchorage International Airport.Cook Inlet Region Inc., which owns most of the island, and Chugach Electric Association are planning to spend $50,000 on a study of the wind-generating potential on the island.Chugach will put up two 130-foot towers and one that’s about 33 feet tall. They’ll collect weather data for up to 18 months. The towers are designed so they can be moved easily and have little impact on the land.NATIONMorgan Stanley sued for sex discriminationNEW YORK -- Federal authorities sued Morgan Stanley Sept. 10, accusing the Wall Street brokerage of discriminating against as many as 100 women by preventing them from getting promotions and raises.The lawsuit brought by the Equal Employment Opportunity Commission alleged that the company prevented most women from advancing to jobs and salaries reached by less productive men.Morgan Stanley denied the allegations.The lawsuit, seeking unspecified compensatory and punitive damages, alleged that the discrimination included trips to strip clubs where business was discussed and the exclusion of female employees from golf outings.Cargo pilots want passenger safety rulesWASHINGTON -- The pilots who fly for cargo carriers like FedEx and United Parcel Service want to operate under the same safety rules as pilots for passenger airlines like American and United.Under current Federal Aviation Administration regulations, cargo airlines don’t have to install the same collision warning systems as those carrying passengers, don’t have to add systems that automatically put out fires and can schedule their pilots to work more often.The industry maintains that the different practices don’t reduce safety. Its pilots disagreed and scheduled a two-day conference beginning Sept. 11 to push for a uniform set of safety rules for cargo and passenger flights.The pilots are making their arguments to the FAA and to members of Congress.Dominion buys Louis Dreyfus for $1.8 billionRICHMOND, Va. -- Dominion Resources Inc. is buying Louis Dreyfus Natural Gas Corp. for $1.8 billion in cash and stock in a deal that will increase its natural gas reserves by 60 percent.The deal announced Sept. 10 also calls for Richmond-based Dominion to assume $505 million in Louis Dreyfus debt.Louis Dreyfus, based in Oklahoma City, is an independent natural gas production and exploration company operating primarily in Texas and the Gulf of Mexico.Dominion has about 4 million customers in the mid-Atlantic, Midwest and Northeast. The acquisition will boost Dominion’s natural gas reserves to 4.6 trillion cubic feet. It also will allow the company’s exploration and production unit to produce more than 450 billion cubic feet annually, an increase of more than 40 percent.WORLDO’Neill sees no need to weaken dollarBEIJING -- U.S. Treasury Secretary Paul O’Neill on Sept. 10 rejected suggestions that Washington should weaken the dollar to boost exports.Speaking to students at Beijing’s University of International Business and Economics, O’Neill said governments should focus on raising productivity instead of manipulating exchange rates.The Bush administration is under pressure from U.S. companies to take steps to lower the dollar’s exchange rate against other currencies to make exports more attractive.But O’Neill criticized as "excuse makers’’ business leaders who complain about market conditions instead of adapting. The former chief executive of aluminum producer Alcoa Inc. said his company had grown steadily despite dramatic shifts in the dollar and the Japanese yen.Smaller cars win attention at car showFRANKFURT, Germany -- Luxury cars usually draw the biggest oohs and aahs at auto shows. At this month’s Frankfurt International Auto Show, it’s the small cars that will be getting much of the attention -- and people may find they are looking more and more like bigger cars on the inside.The reason: ferocious competition that has made manufacturers lavish luxury-car features on vehicles that fall more into the category of basic transportation. Mass-market players such as Volkswagen, Fiat and Ford have sunk hundreds of millions of dollars into revamped small cars they hope will get them through a Europe-wide auto slump.China’s economy growing but so is unemploymentHONG KONG -- On paper, China’s economy looks great: Growth is moving forward at a rate of 7.9 percent a year, companies are racing to modernize, and the country is on the brink of joining the World Trade Organization.A closer look, however, reveals an unsettling scene. Reforms are throwing tens of millions out of work. Public debt is rising, export growth falling, and banks are drowning in a sea of bad loans. Rural incomes are lagging, and drought has left 23 million Chinese without enough drinking water.Though China’s growth rate has fallen steadily from a peak of 13.6 percent in 1992 to 7 or 8 percent in recent years, according to official data, a first-half growth rate of 7.9 percent raised hopes China might drag its anemic neighbors out of the doldrums.-- Compiled from business wire services.

Alaska likely to lose defense cleanup funds

U.S. government funding for cleanup of old defense sites will be declining, according to the U.S. Army Corps of Engineers. Part of this is a shift in priorities within the Corps nationally, from cleaning up sites with chemical contamination to clearing away unexploded ordnance and its residue.Alaska has plenty of that, but other states, such as Hawaii, have a lot more, explained Pat Roth, chief of the Corps’ Formerly Used Defense Sites cleanup program in Alaska."Compared with other states, we’re a drop in the bucket," Roth said. The result will be a shift of some funds from Alaska to other states, he said.There will likely be a $3 million reduction in FUDS spending next year and a $7 million reduction the following year. In recent years the Corps has spent about $40 million per year in its FUDS cleanup in Alaska, Roth said.An even greater uncertainty, however, is whether Alaska Republican Sen. Ted Stevens will be able to deliver $15 million to $20 million in special appropriations to the FUDS budget, which he has been able to do in recent years, Roth said.Stevens’ special appropriation is part of the $40 million that has been spent annually in Alaska.The ability of the state’s senior senator to put extra money into the program could never be guaranteed. But now, with the change in the Senate leadership and Republicans, including Stevens, no longer holding chairmanships of committees, there’s more of a question.If Stevens can’t deliver, FUDS funding could drop sharply next year, from $40 million to about $17 million, and $15 million the year after, Roth said..However, for the long term the number of old military installations in Alaska with known contamination may be increased, he said. There are 600 inactive military installations or abandoned sites in Alaska. One hundred and thirty of these have some levels of contamination.The Corps is now looking again at 470 abandoned sites where there was thought to be no significant contamination."We’re going back and getting more information on these sites," Roth said. "It’s possible that when the initial screening was done 15 years ago, decisions were made without a lot of information."Thus it’s likely that the ultimate number of sites the Corps will tackle in its cleanup effort will increase, although the money spent each year may be less.The agency is working with the state Department of Environmental Conservation and the U.S. Environmental Protection Agency. So far only one FUDS site has been "closed out," where the cleanup has met DEC’s and EPA’s specifications.Closeout on another five or six sites are in various stages of final review, and the pace of closeouts will probably continue at about this level.Until recently the Corps’ emphasis has not been on totally closing out a site but tackling sites with significant pollution and reducing that to lower levels of risk, Roth said.A lot of work on higher risk sites has been completed, so the emphasis is now switching to closeouts, and the pace of these should quicken, he said.Most of the sites have contamination from spilled petroleum products, although there are also polychlorinated biphenyls at many sites as well as limited other contaminants, Roth said.Some of the higher priority contaminated sites the Corps is working on include former Air Force installations at Northeast Cape and Gambell on St. Lawrence Island, naval sites on Kodiak Island, and Umiat, an old support site for U.S. Navy oil exploration in the 1940s and 1950s on what is now the National Petroleum Reserve-Alaska.The FUDS program is still scheduled to be completed by 2016, with an estimated $546 million in reclamation of old sites yet to be completed, according to briefing documents prepared by the Corps.Meanwhile, the Corps is also doing work for the Army, Air Force and other federal agencies. In some cases it involves assistance in obtaining a contractor and developing a cleanup program, with the service or agency managing the cleanup, Roth said. In other cases the Corps is managing the project.The Corps is managing projects to clean up two sites at Fort Richardson near Anchorage and Fort Wainwright at Fairbanks, as well as excavation and other work from the old nuclear reactor site at Fort Greely, near Delta, according to briefing documents.Restoration and remediation at old fuel terminals in Haines is continuing, and demolition work has started on fuel tanks at Tok, in eastern Interior Alaska, the documents said.

Business Profile: Thomas, Head & Greisen

Name of the company: Thomas, Head & GreisenEstablished: 1969Location: 1400 W. Benson Blvd., Suite 400, AnchorageTelephone: 907-272-1571Web site: [email protected] focus of services: The certified public accounting firm of Thomas, Head & Greisen provides audit, accounting, tax and business advisory services. Clients range from large corporations and nonprofit organizations to individuals needing tax preparation.History of the company: Don Thomas founded the accounting firm in Anchorage and was joined by Pat Head in 1970 and later Bill Rompa. In 1972 the firm of Thomas Rompa & Head hired its first senior accountant, Ron Greisen, who became a stockholder the following year. In June 1973 Rompa left the firm to work as a sole practitioner, and the company changed its name to Thomas, Head & Greisen.The accounting industry landscape in Alaska has altered during the firm’s tenure. When Thomas, Head & Greisen opened, several national accounting firms operated offices in Anchorage. However, those firms have consolidated or shuttered their Alaska offices, leaving one remaining national accounting firm. In October 1996 national firm Coopers & Lybrand opted to close its Anchorage office, and Thomas Head & Greisen took over the firm’s Alaska clients and hired one Coopers & Lybrand partner, John Letourneau.The firm has expanded its service offerings, adding litigation services in the 1970s, but tax and tax planning services make up about 60 percent of business.Thomas, Head & Greisen employs 31 people. Thomas and Head have now retired, and the firm’s directors include Greisen, Letourneau, Kevin Branson and Debra Mason, all certified public accountants.Top accomplishment of the company: Greisen cites the firm’s ability to conserve and grow clients’ net worth. The secret to Thomas, Head & Greisen’s longevity is considering the clients’ needs first, he said. "People are looking for a lot more than tax returns. They are looking for advice in financial matters like planning for their children’s college education or planning a business expansion."Major player: Ron Greisen, stockholder, Thomas, Head & Greisen.Greisen earned a bachelor’s degree in accounting and business statistics from the University of Oregon. He moved to Alaska in 1969 to work for a national certified public accounting firm and later joined Thomas, Rompa & Head in 1972.-- Nancy Pounds

Attorney general stays on lookout for gasoline price gouging

FAIRBANKS (AP) -- Alaska Attorney General Bruce Botelho said the state is watching for gasoline price gouging following the terrorist attacks on the East Coast.To date there has been no evidence of any stations in Alaska charging too much per gallon for gasoline, he said, unlike some stations in the Lower 48.’’In fact, most gasoline prices were unchanged since last Friday, while a few stations dropped their prices by a penny a gallon, and a few stations went up by a penny a gallon,’’ Botelho said.Both the federal government and the oil industry say that crude oil and gasoline supply and distribution remain abundant, Botelho said.The state surveyed gas stations in Fairbanks, Anchorage and Juneau. The attorney general’s office also has been conducting regular surveys in an ongoing investigation into gas pricing in the state.Gas stations that raise prices artificially could be fined up to $5,000 for each offense, said Ed Sniffen, assistant attorney general for fair business practices.

Bulletin Board September 16, 2001

In gearThe Craig Community Association and the Organized Village of Kasaan have formed a new information technology company, Prince of Wales Tribal Enterprise Consortium LLC. POWTEC is a state of Alaska limited liability company established by two federally recognized Indian tribes located on Prince of Wales Island, and n-Link Corp., a state of Washington employee-owned information technology corporation. POWTEC plans to provide quality information technology and professional engineering services to the federal government. The information technology department of POWTEC will be based at the Craig Native Tribal Center in Craig, and the professional engineering services department of the corporation will be located at the David S. Peele Community Hall in Kasaan.Scientific Fishery Systems Inc. has completed negotiations with SEA Corp. of Ichikawa-City, Chiba, Japan to become the exclusive distributor of the SciFish 2000 broadband sonar systems for the Japanese marine science market. SciFish’s products use broadband sonar to improve fish detection as well as provide species identifications and size estimation. SciFish will provide support and training to assist SEA Corp. in marketing and sales.Ribelin Lowell & Co. Insurance Brokers Inc. has become the prime sponsor of the Excellence in Construction awards for the Associated General Contractors of Alaska for the next 10 years. The awards are presented annually to recognize projects in Alaska exhibiting the greatest challenge to the contractor and the construction team. Seven award categories consider project location, climate, construction challenges encountered and innovative construction techniques utilized with winners announced at the AGC annual conference in November.Fred Meyer has installed U-Scan checkout stations at its 1000 E. Northern Lights Blvd. location in Anchorage. The fully automated checkout system, the seventh in Alaska, enables customers to scan, bag and pay for small purchases. U-Scan Express features a group of four checkout stations. Each station is equipped with a bar-code scanner, weighing platform with three bagging racks, touch-screen monitor, debit/credit terminal, and bill and coin acceptor and dispenser.LocatorThe URS Corp. offices located at 5600 B St. and 3501 Denali St. in Anchorage are consolidating operations. The offices will move into a newly constructed building Sept. 17 at 2700 Gambell St., Suite 200, in Anchorage. The telephone number is 907-562-3366, and the fax number is 907-562-1297. URS Corp. is a professional services firm. The Alaska Region’s primary office is located in Anchorage with satellite offices in Fairbanks, Haines, Homer, Juneau and Ketchikan.GrantsThe Alaska Congressional Delegation announced Aug. 22 a series of funding grants and loans totaling more than $24 million. The Federal Emergency Management Agency under the Assistance to Firefighters Program for personal protective equipment awarded Old Harbor Fire Department, $72,297; Funny River Emergency Services in Soldotna, $33,449; Willow Fire Service Area, $17,836; and City of King Cove, $17,616. Department of Housing and Urban Development Indian Housing Block Grants were awarded to Orutsaramiut Native Council, $1,971,450; Point Hope, $387,665; Selawik, $399,082; Tanacross, $87,069; Tyonek, $127,489; and Unalakleet, $338,513. The Department of Health and Human Service’s Administration for Native Americans awarded grants in the amounts of $122,395 to Allakaket Tribal Council; $100,000 to Barrow; $124,909 to Calista Elders Council Inc.; $89,800 to Chilkat Indian Village; $90,834 to Circle Tribal Council; $300,000 to Kawerak Inc.; $118,650 to Nanwalek; $295,790 to St. Michael; and $201,668 to Stevens Village Council. The Department of Health and Human Services Head Start grants were received by the Association of Village Council Presidents, $161,468; Southcentral Foundation, $150,282; and Kawerak Inc., $121,163. HHS also awarded Eastern Aleutian Tribes Inc., $50,000; Knik Tribal Council, $69,060; Yakutat Tlingit Tribe, $74,877; Skagway Medical Services, $182,626; University of Alaska’s Health Careers Opportunity Program, $250,000; and Alaska Department of Health and Social Services, $135,000. The Department of Agriculture awarded a $171,000 grant to the City of False Pass; a $93,587 grant and $120,000 loan to Koyuk; and a $900,000 loan to Inter-Island Ferry Authority in Craig. The National Oceanic and Atmospheric Administration awarded the University of Alaska Fairbanks $3,779,534 for arctic research and $947,486 for Steller sea lion documentation in the Kodiak region. The Federal Aviation Administration has awarded Airport Improvement Program grants to Fairbanks International Airport for $6,878,400 and $6 million to Stevens Village.

Alaskans in the farthest reaches mourn those killed by terrorists

From the remote reaches of Barrow to the urban centers of Anchorage and Juneau, Alaskans mourned the deaths of those killed in Tuesday’s terrorist attacks on the East Coast.In ceremonies and gestures occurring across the Last Frontier on Friday, they paid their respects and demonstrated that sometimes only distance separates Alaskans from New Yorkers.’’I feel like I am a member of the tribe of the United States,’’ said Barrow City Mayor Jim Vorderstrasse.In his remote enclave along the Arctic Ocean, there’s a renewed patriotism in the wake of terrorist attacks that brought down four jetliners, leveled the World Trade Center and damaged the Pentagon.Not far away, at the popular eatery Pepe’s North of the Border, owner Fran Tate was contemplating closing shop for a 7 p.m. candlelight vigil planned at the Ipalook Elementary School.’’It doesn’t look like anyone wants to stand still for what’s going on,’’ Tate said of the attacks. ’’Most things don’t hit us like that.’’A prayer service was planned at the Utkeagvik Presbyterian Church at noon to coincide the President Bush’s call for a National Day of Prayer.Ketchikan pilot Ken Eichner strung an 18-by-30 foot American flag from his helicopter for a flight on Thursday.’’Our country is having some real problems now, and I wanted them to know we back em,’’ Eichner said.All at once, the Nation weaved somber prayer with patriotic enthusiasm in a series of ceremonies and vigils on Friday. President Bush left a solemn remembrance ceremony at the Washington National Cathedral and told those cleaning up the wreckage in New York ’’the people who knocked these buildings down will hear all of us soon.’’At the Anchorage Performing Arts Center’s Atwood Theater, a crowd of more than 2,000 interrupted Gov. Tony Knowles with a standing ovation after he thanked the military.’’As always and especially this week, Alaskans stand together in support, prayer and unity for our fellow Americans,’’ Knowles said.The ceremony was televised on the Alaska Rural Communication System, a state satellite channel that broadcasts to Bush communities throughout the state.A crowd of about 1,500 at Juneau’s Centennial Hall on Friday hummed as a lone Bagpipe played a haunting rendition of ’’Amazing Grace.’’ A day earlier, about 500 attended a noontime ceremony in Fairbanks where Nina Rawson, representing the local Jewish congregation said in an opening prayer, ’’the surreal is real.’’A moment of silence was held at 12:30 p.m. in numerous ceremonies on Friday. During the day, some Alaskans asked for peace, others for revenge.’’We’re a ’praise the Lord and pass the ammunition’ type of organization,’’ said Juneau resident Tim Armstrong, a former commander of the local VFW Post 5559. ’’There’s a part for each to play.’’Children and adults wrote messages on pieces of paper that will be combined into two books and sent to New York and Washington, said Juneau Mayor Sally Smith.One such message said, ’’I feel as if I know you and am your neighbor.’’ Another sent greetings to someone named Evelyn and Richard and concluded, ’’I wish I knew where you are.’’A statewide candle vigil was planned in which organizers asked that at 7 p.m. Alaska Time everyone step outside their home or business, or leave their car and light a candle.’’We will show the world that Americans are strong and united against terrorism,’’ an announcement said.A prayer circle in Homer brought about 100 people, including Hal Spence, a former Brooklyn resident who remembers watching the twin World Trade Center towers being built.Both collapsed following Tuesday’s attack in which hijacked airliners slammed into them.’’It’s kind of painful to look at recent photographs of New York and not see them there,’’ Spence said. ’’I guess I am pretty thankful I live in Homer.’’

Weston workers dig debris, contaminated soil from Elmendorf

Crews for Roy F. Weston Inc. have begun an estimated $2.6 million cleanup project on Elmendorf Air Force Base after contractors for a housing project discovered contamination at the site.The excavation project began Aug. 27 and will continue through mid-September. Cleanup of the site includes removing wood, metal and concrete debris and extracting approximately 2,800 cubic yards of contaminated soil.Workers discovered rubble in June while they were clearing the area inside the Boniface gate to build new family housing. Excavators uncovered the remains of an old Quonset hut that had been buried there sometime before 1975.John Mahaffey, Elmendorf’s environmental project officer for the Air Force said that lead and fuel were detected in the soil. The contamination came from lead-based paints used on the Quonset hut and from heating fuel tanks.To clean up the site, soil from the contaminated area is sifted and dumped into white "supersacks" and then taken to a former landfill on Elmendorf. Each bag will then be tested to determine the extent of the contamination.If the soil is deemed usable "as is," it will be used as fill material at an old landfill. If the soil is determined to be toxic waste, it must be shipped out of the state to an approved disposal facility, Mahaffey said.The soil is first tested for leachability. If it is determined that the contaminants will leach from the soil, it will be classified as hazardous waste.The second test is for total lead content. If the soil contains 400 or fewer parts per million, it is acceptable for use in residential areas. If the lead content is 400-1,000 parts per million, it is acceptable for use in industrial areas. Anything over 1,000 parts per million and the soil is labeled hazardous waste.Testing of the soil is not expected to be complete until the summer of 2002. Mahaffey stressed that regardless of the outcome of the tests, the soil is being completely removed from the site to ensure unquestionable safety for the future residents of the area.The debris and other nontoxic waste will be disposed of at the Anchorage Landfill.The cleanup site is expected to be turned back over to the contractor on Sept. 17. Construction has continued in areas that were unaffected by the contaminants.Mark Coburn, project engineer for the private sector financed housing project, said that the unexpected cleanup project will not delay construction. The 372-home project, being built by Aurora Military Housing LLC, is scheduled for completion in August 2002.

DEC agrees with Cook Inlet council, will launch comprehensive pipeline review

KENAI -- The Alaska Department of Environmental Conservation is working toward initiating a Cook Inlet pipeline review and risk assessment as part of its larger review of the Alyeska and North Slope pipelines.The Cook Inlet Regional Citizens Advisory Council called for DEC to perform a comprehensive review of inlet pipelines during a meeting of its Preventative Response and Operations Safety Committee on Aug. 24.CIRCAC first identified a need for such a review over a year ago in a report that gave an overview of pipeline regulatory requirements. The report pointed out the regulatory confusion that comes from the lack of a single agency coordinating the design, construction, maintenance, operation and spill response plans for Cook Inlet pipelines. It also indicated that Cook Inlet pipelines are nearing the end of their projected life spans.DEC agrees with CIRCAC that a review is needed and has been working toward one for the last year, according to Larry Dietrick with DEC’s Division of Spill Prevention and Response."Conceptually, industry, CIRCAC and everybody else are on notice that we want to go down this path," Dietrick said. "It just takes a lot of work to get the details straightened out."In order for a comprehensive review and risk assessment of the Cook Inlet pipeline infrastructure to be done, DEC needs to work out an agreement among all the parties involved, including the oil industry, CIRCAC and regulatory agencies, as to how the review is carried out. There needs to be a consensus on the scope of the review, how to go about it and what it will cost, Dietrick said.That is what DEC is working on now -- putting together a plan that addresses the concerns of all the parties involved and that everyone agrees on.In order to complete that plan, DEC is attempting to determine the jurisdictional requirements the pipelines are under, by state and federal agencies and the oil industry.The oil industry has regulations in place for its pipeline operations. DEC has met with Unocal Corp., for instance, to get information on what the company has been doing for risk assessments."It’s not like we’re without a risk assessment," Dietrick said. "The industry has already done a fair amount. One of the concerns here is that we not duplicate what they’ve done and waste money."DEC is not the only government agency with the jurisdiction to impose regulations on pipeline operations. The federal Environmental Protection Agency and Department of Transportation, for instance, also have the authority to impose regulations.According to Dietrick, the Department of Transportation is in the process of issuing rule-making regulations on carrying out pipeline assessments. Those regulations will include a lot of the requirements for doing a risk assessment that DEC, the oil industry and CIRCAC favor, Dietrick said.So in coming up with a plan for its review, DEC doesn’t want to impose regulations that are being imposed by other organizations."We’re working with other agencies that have (pipeline assessment) requirements and finding out what new requirements will be coming in the future," Dietrick said. "We don’t want to duplicate an assessment requirement that’s already being covered. There’s no point in re-creating the wheel there. We need to integrate our assessment with theirs and cover the pieces that won’t be performed under their requirements."CIRCAC’s report compared this overlapping and interconnected system of regulatory and agency involvement to a bowl of spaghetti, and noted that there is no clear delineation of regulatory authority for Cook Inlet pipelines.It doesn’t help matters that, according to Dietrick, DEC is working to straighten out this arrangement on a "time-available basis."DEC intended to get funding to carry out all the front-end studies, like developing the scope of the review, sorting out the pipeline regulatory jurisdictions, evaluating current spill-prevention measures, surveying existing pipelines and coming up with what, if any, corrective actions need to be taken, as part of its fiscal 2002 budget.The Cook Inlet pipeline review is one part of the DEC’s larger review of the Alyeska and North Slope pipelines. DEC submitted a proposal for $500,000 to cover the review for the 2002 fiscal year. Around $150,000 of that budget was proposed to cover the initial research for the Cook Inlet review.The proposal was rejected by the Legislature. Because DEC didn’t get the money it had hoped for the Cook Inlet review, it is completing the background work with its normal budget and on a time-available basis."We do a review of these pipelines as part of our prevention and contingency plans review anyway," Dietrick said. "It’s just when you approach them on a regional basis rather than an individual basis it takes on a whole new dimension. Instead of looking at one pipeline at a time we’re looking at the whole of Cook Inlet. It’s a huge chore, and we’re running about as fast as we can."Dietrick hopes DEC will complete its research, reach a consensus with the oil industry, CIRCAC and involved parties on the scope of the review, and put that into a proposal for how to go about the assessment during this fiscal year. If these steps are taken, it can submit a funding proposal for next year’s fiscal budget with the initial review work already done, which may increase the chances of getting favorable legislative consideration, Dietrick said."It’s no small thing to take on the entire infrastructure of Cook Inlet," Dietrick said. "But we’ll get there. The industry’s goal is to not spill oil, and that’s the same goal as everybody else on the peninsula. People want to make sure the pipeline infrastructure is safe for another 20 years."

Commuters prefer cars

A new commuter rail study commissioned by the Alaska Railroad wastes no time in its preface pointing out highway traffic between the Matanuska-Susitna valleys and Anchorage is bad and getting worse.And the Southcentral Rail Network Commuter Study and Operation Plan goes as far as offering some editorial advice to prevent the potential for gridlock: "... a locally sponsored commuter rail service could offer commuters a meaningful alternative to traffic jams and frazzled nerves.’’But within the inch-thick, $250,000 study, scheduled for release to the public on Sept. 10, researchers found that an overwhelming majority of people -- as high as 97 percent -- would rather drive the 50-mile commute alone than to take a speedy, punctual, schedule-flexible and less expensive train.To start an Anchorage-to-Wasilla commuter service by 2005, the study said $28.2 million was needed for rolling stock, five passenger stations and a maintenance facility.The study said extending the commuter rail south to Girdwood was "impractical’’ because of light ridership and the high cost of rail improvements that would be needed.According to state statistics, 8,000 people commuted between the Mat-Su area and Anchorage in 1999. By 2005, the study said commuters will swell to 9,500.Another 8,000 commuters come in from Eagle River daily, and the study predicts that number to jump to 8,700 in four years.The study said the number of average daily riders on a commuter rail service between the Mat-Su area and Anchorage, based on the projections for 2005, would be about 300, with 50 of those originating trips from Eagle River.Those numbers may be even lower, according to the study."Not all commuters who say they will ride the trains will actually become regular train riders,’’ the study said. "One reason is that survey respondents sometimes opt to tell the interviewer what they think the interviewer wants to hear."The commuter rail study was done by San Francisco-based Wilbur Smith Associates with the help of several consultants and the Anchorage-based Craciun Research Group, which held focus groups earlier in the year.Some of the findings include:* Renters are more likely than homeowners to use commuter rail;* Higher income residents are more likely to work in Anchorage, but aren’t as likely to use commuter rail;* Mat-Su residents older than 60 are less likely to come to Anchorage and even less likely to take commuter rail if they do;* The longer someone has resided in the Mat-Su area, the less likely they’d come to Anchorage, or use the commuter rail;* More men than women commute, but there was no difference in the likelihood of using commuter rail.The draft study was released to mayors along the Railbelt at the end of August. The study was paid for with federal money, with the railroad contributing about $50,000.It is the latest in a slew of commuter-related studies performed since the late 1970s.Palmer Mayor Henry Guinotte said he’s "thumbed through’’ the study and intends to read it in full. But he suspects the recent report is just another costly study that has little hope of leading to tangible results."Don’t get me wrong, I’m not opposed to it,’’ Guinotte said of commuter rail. "I look at reality -- economic reality."There is not enough population base to support it,’’ Guinotte said. "I just don’t see the numbers here.’’The Palmer mayor said the trains would have to be fast and punctual and significant infrastructure improvements in the Matanuska-Susitna valleys and Anchorage would have to be in place."Unless the Legislature gets more friendly handing out money and the Anchorage bus system is beefed-up considerably, I just don’t see it happening,’’ Guinotte said.Commuters surveyed said they log about 30,000 miles a year, or about 100 miles a day for the commute, and spend between $100 and $250 monthly for car-related expenses. Commuters said they would expect to pay less than their current expenses, anywhere from $70 to $150 a month to ride the train, the survey said.The number of commuters, based on the amount they’d be willing to pay for the commuter rail service, "wouldn’t pay the union crew to run the engine,’’ Guinotte said. "We’re going to have to be looking around for tax money to support it.’’The study said money could be available to fund start-up costs for commuter rail, but after that, the service would be pretty much on its own."A variety of federal sources of funds are available for a share of the capital cost of the project, whereas little or no federal sources are available to cover long-term operating costs,’’ the report said.The report suggested the formation of a regional transportation authority, which would consist of the communities working together to secure future funding.Tim Anderson, mayor of the Matanuska-Susitna Borough, said the creation of a regional transportation authority would do little more than form another layer of bureaucracy."It’s just going to cost more money,’’ Anderson said.Already, Mat-Su governments and Anchorage officials are working together on a regional transportation plan."We have agreed to work regionally, not individually,’’ Anderson said.A commuter rail system is a "wonderful idea,’’ Anderson said. But paying for it and getting folks to ride the train will be huge challenges, he said."If I worked in Anchorage, I’d ride the train,’’ Anderson said. "I drive in to Anchorage more than I want to now and it’s not a pleasant experience.’’Wasilla Mayor Sarah Palin said she supports the idea of commuter rail, but admits she’s in the minority."I have this ideal vision of reading my paper and drinking my coffee while letting someone else do all the work,’’ Palin said of a commute to Anchorage. "But Alaskans are very independent. Our nature is to get in a truck and drive.’’Like other mayors in the Mat-Su area, Palin said a decision needs to be made on what really needs to be done to solve the commuting problem, whether it’s by rail, or the oft-studied ferry system or bridge across Knik Arm."One project can’t be competing with another,’’ Palin said. "We can’t do anything half-baked.’’Anchorage Mayor George Wuerch could not be reached for comment. Spokeswoman Nance Larsen said the mayor had not read the study yet, but supports the "overall concept’’ of commuter rail.Alaska Railroad officials have said commuter rail is too expensive for the small state-owned railroad to run by itself. To make the commuter rail a reality in Alaska, it would have to be heavily subsidized, like any other commuter system in the United States, railroad officials say.Patrick Flynn, Alaska Railroad public affairs officer, said officials are reserving comment until the public gets a chance to read the study."We want people to read this thing and ask tough questions,’’ Flynn said. "Is this something they want or not?’’A public meeting on commuter rail is scheduled from 10 a.m. to noon Oct. 3 at the Loussac Public Library in Anchorage.Copies of the report can be obtained by calling 907-265-2571. The study also will be posted on the railroad’s Web site at (www.alaskarailroad.com).

This Week in Alaska Business History September 16, 2001

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 TimesSept. 16, 1981Congressmen oppose state oil swap planTimes Washington BureauWASHINGTON -- Leaders on ocean and shipping issues in both the House and Senate have urged Interior Secretary James G. Watt to reject proposals to allow the export of Alaska oil.In a letter to Watt, the representatives say the proposal would have "serious adverse consequences for the United States merchant marine and an undesirable impact on our national security, international relations and, possibly, the federal budget."A bill pending in Congress would overturn the existing federal ban on exporting domestic oil.The new law would allow for a three-nation oil swap that would cut the cost of transporting domestic oil to the eastern United States and benefit the Alaska state treasury.Under the proposal, Alaska oil would go to Japan instead of through the Panama Canal. In exchange, the United States would import more oil from Mexico.Anchorage TimesSept. 17, 1981Hovercraft fly across bay in six minutesBy Bill WhiteTimes WriterThe modern magic carpet slides down a mud flat and flies across Knik Arm in six minutes flat.At Point MacKenzie, all is silent. Across the water, the Anchorage skyline looks small against the Chugach Range.As the carpet, in this case a hovercraft, skims across the water for the return trip to the Port of Anchorage, a rip tide chops across the arm, but is hardly noticeable.Jack Barr said he is looking to the future with his newly opened Alaska Hovertravel, located at the end of Tidewater Road at the port.In his vision, Hovercraft will serve as a transit link between Anchorage and bedroom communities across Knik Arm. The commuters will drive to a landing at Point MacKenzie, board his Hovercraft and be scooted over to a People Mover bus at the port, he said.10 years ago this weekAlaska Journal of CommerceSept. 18, 1991First Wishbone Hill coal may be mined in 1995By the Alaska Journal of CommerceConstruction of a surface coal mine at Wishbone Hill, 45 miles northeast of Anchorage, may begin in early 1994, with the first coal produced by mid-1995, says a top official with Idemitsu Alaska Inc."We feel it is important for Idemitsu Alaska Inc. and important for the people of Alaska that Wishbone Hill be developed as expeditiously as possible," said Jiro Hayashi, president of Idemitsu Alaska, a subsidiary of Idemitsu Kosan Co. Ltd. of Japan.Hayashi also said in a statement released Friday that his company is examining possible cost reductions on all project components, including mining, transportation and port handling costs.The state Department of Natural Resources, Division of Mining, earlier this month issued a surface mining permit to Idemitsu, Alaska, clearing the way for Alaska’s second producing coal mine.Alaska Journal of CommerceSept. 16, 1991The Orbital Express: Headed for Poker Flat?By Margaret BaumanAlaska Journal of CommerceA four-stage solid-fuel rocket system called the Orbital Express may be launching microsatellites northeast of Fairbanks by 1993.The Orbital Express was designed for MicroSat Launch Systems, of Herndon, Va., in conjunction with three major international aerospace corporations. It is the first of the micro-class of launch vehicles designed to provide rapid, low-cost and dedicated launches of microsatellites into low-Earth orbit, MicroSat officials said.A $120,000 preliminary economic feasibility study on the new launch pad that would be needed for the launchings at the University of Alaska’s Poker Flat Research Range is due in about mid-November, said Riley Snell of Alaska Industrial Development and Export Authority.-- Compiled by Ed Bennett.

Alaska Regional debuts lobby; HealthSouth opens new center

Several health care facilities in Anchorage have charted milestones in major renovations projects this fall.Work continues at Alaska Regional Hospital in Anchorage as part of a $26 million, two-year renovation project. Hospital officials say the project should be completed in 2002.Later this month construction of a new main road entrance should be complete, said hospital spokeswoman Kjerstin Lastufka. The project includes creation of a new intersection and stoplight on DeBarr Road across from Alaska USA Federal Credit Union.The 254-bed hospital celebrated the completion and opening for use of its new lobby Aug. 31, Lastufka said. The new atrium lobby features glass elevators, a fountain, a new patient admitting area plus added parking outside the area.Alaska Regional Hospital broke ground last September on renovations to the Anchorage facility. Work includes relocating the current lobby to the opposite side of the building.Other upgrades will include increasing the number of operating rooms, expanding and adding equipment to the radiology department and adding new, larger rooms in labor and delivery.Another health care facility construction project, a new medical center for HealthSouth, opened its doors earlier this summer. Surgery services began in July at the new Lake Otis Medical Center, and diagnostic services in mid-August.The facility consolidates several offices that had previously been separate. HealthSouth occupies the first floor with offices on each of the other floors, but other health care providers, including surgeons, a pharmacy, laboratory, an anesthesia group and orthotics company, also occupy space in the building, said HealthSouth spokesman Aaron Wollrich.HealthSouth is the primary tenant at the three-story building owned by Lake Otis Professional Center LLC.Construction on the $16.5 million project began in July 2000.The 110,354-square-foot facility houses HealthSouth’s surgery center, diagnostic imaging center, a physical and occupational therapy clinic, a family practice, an urgent care clinic and billing services.Efforts also continue as part of a $45 million upgrade at Providence Alaska Medical Center with 341 beds in Anchorage.The project is slated for completion in 2002.Renovations are under way at the hospital cafeteria, aiming for completion in November, said Providence spokeswoman Karina Jennings.The construction project at Providence expanded the emergency and day surgery departments and added two floors of medical office space. Work began in March 2000. The new emergency room department opened in June. Construction continues for the day surgery department, which should be finished this spring, Jennings said.An expanded entry and lobby area was completed in late August, she said.Providence is negotiating with potential tenants for its medical office space, Jennings said. Once tenants have detailed plans for the space, final construction would take place, she said, adding that it could be a year before tenants could move in.Southcentral Foundation is expanding its Anchorage Native Primary Care Center, adding 60,000 square feet to the existing 40,000-sqaure-foot facility. The project was estimated to cost $15 million.Construction should be completed and the addition opened Oct. 10, said Charles Clement, special assistant for Southcentral Foundation.The project will increase space for family medicine, pediatrics, women’s health, mental health, pharmacy, radiology, laboratory and a department for physical therapists, acupuncturists, chiropractors and massage therapists.On Oct. 15 center officials will shut down the existing building to move some services and expand others, he said. The older section will reopen in March with expansions to the pharmacy, women’s health department and the pediatrics unit, he said.

Cruise line drops Valdez

VALDEZ -- Holland America will drop Valdez from its 2002 port of call list.The company said it has not found a way to show off what Valdez has to offer passengers, said Paul Allen, vice president for Alaska Cruise Tours.The company’s ships will stop in Skagway instead.Allen said he has several phone conferences scheduled with Valdez civic leaders this month in order to find a way to keep Valdez as a port of call for Holland America in the future."We’ve taken people to Valdez historically. We just need to be more confident in putting together a package for our passengers," Allen told The Valdez Vanguard.Holland America accounted for 19 of the 46 port calls in Valdez during 2001. The cruise ships Ryndam, Veendam and Statendam stopped at the city.Though port-of-call numbers for 2002 are not yet in, Pat Caples with Alaska Maritime Agencies does not expect an increase from the other lines that stop in Valdez.Valdez could see as few as 27 port calls next summer, which would be a devastating blow to local retailers. Business owners attending an emergency meeting Sept. 6 with city officials said traffic from recreational vehicles, independent travelers and people attending conventions in Valdez cannot make up sales brought by the cruise ships.Many retailers said they are putting merchandise orders for next year on hold until they learn more.Valdez has seen a decline in the number of cruise ship visits for more than five years, according to figures from the Alaska Maritime Agencies. In 1996, 70 cruise ships called on Valdez. That number dropped to 67 in 1998, 61 in 1999, 47 in 2000 and 46 for this year."We’ve heard crew personnel tell people, ’Don’t bother getting off the ship. There’s nothing to see in Valdez,’ " said Nancy Peterson, assistant city manager.Lisa Von Bargen, with the city of Valdez Community Planning Department and formerly with the Valdez Convention and Visitors Bureau, told the group that cruise lines are crossing the Gulf of Alaska because they have land-based excursions.Ships now drop off passengers at Seward and take on new passengers before heading south. The land-based excursion buses take the passengers to Denali National Park and Preserve and other locations before the passengers board flights for home. So far, logistics prevent Valdez from becoming the destination port Seward is.Valdez and Prince William Sound also compete with Glacier Bay as a popular cruise ship stopover, and Valdez is losing out to the Glacier Bay, Von Bargen said.

Natural gas development authority may gain spot on 2002 ballot

ANCHORAGE -- Lt. Gov. Fran Ulmer has certified an initiative aimed at creating a state authority to oversee development of the state’s natural gas resources.The initiative was drafted by a citizens group that favors construction of an 800-mile natural gas pipeline from the North Slope to Valdez. The proposal would include a spur line from Glennallen to provide gas to Southcentral Alaska.Scott Heyworth, chairman of the group Citizens for the All-Alaska Gasline Initiative, said Sept. 5 the group hopes to collect nearly 30,000 signatures during the next four months to put the issue on the ballot in November 2002.If approved by voters, the measure would create an Alaska Natural Gas Development Authority.The authority would search for markets to sell liquid natural gas in Asia and the United States and would search for funding to construct the pipeline. It would also operate and maintain the gas pipeline, ship the gas and market the gas.Alaska’s major North Slope oil producers are currently studying construction of a pipeline that would tap the North Slope’s estimated 35 trillion cubic feet of natural gas. One proposal calls for a pipeline that would follow the Alaska Highway to Alberta. The other would carry gas from Prudhoe Bay through an undersea pipeline to Canada’s Mackenzie River valley and south to Alberta.Those projects are estimated to cost between $15 billion and $20 billion. Curtis Thayer, spokesman for the producers, said last month that the longer Alaska Highway route is not economical.The All-Alaska Gasline project would require that the gas be chilled to minus 260 degrees Fahrenheit, compressed and made into a liquid, then shipped on special tankers.Backers of the route to Valdez say it would give the state access to natural gas markets on the West Coast, Mexico and Asia. They also say the Valdez option would provide the most revenue for the state and the most jobs for Alaskans.

Flags remain lowered in memory of terrorist victims

Amending his previous proclamation, President George W. Bush has ordered the United States flag remain lowered at half-staff through sundown on Saturday, September 22, in memory of the victims of last week’s terrorist attacks on New York City and Washington D.C. Gov. Tony Knowles has ordered all state flags remain at half-staff through the same period.Some 5,000 Americans were killed as hijacked commercial airliners struck the World Trade Center in New York, and the Pentagon just outside of Washington, D.C. The victims included hundreds of fire fighters and public safety officers who were trying to rescue individuals from the targeted buildings, and the passengers of a fourth hijacked plane that crashed in Pennsylvania, apparently short of its intended target.Meanwhile, a state emergency manager is being sent to assist in New York. Jim Harris, a program manager in the recovery section of Alaska Division of Emergency Services, volunteered to work a two-week shift as the recovery from the attacks continues. The City of New York has asked states to provide specific technical assistance, including senior level emergency managers, to relieve their crews following the events of last week.Harris is expected to travel to New York at the earliest opportunity. Gov. Knowles offered other Alaska assistance to the recovery operation, including search dog teams, but the management assistance is the only specific request made of the state so far."Alaskans have opened their hearts to the victims of last week’s attacks, generously offering their blood, money, and prayers to the relief effort," Knowles said. "We are also proud to add our technical expertise in managing disaster response to that effort and will continue to support the people of New York and Washington D.C. as required, as the nation recovers from this tragedy."

GCI begins building retail store in Midtown

General Communication Inc. has begun construction of a GCI Store in Midtown Anchorage.The project is scheduled for completion in January, and GCI could move in and begin operations in February, said David Morris, GCI public affairs manager.The one-story facility will measure 6,000 square feet and is at the corner of Northern Lights Boulevard and C Street. GCI is working with developer Mike Navarre on the project, Morris said."We were looking for a high-traffic location," he said.The GCI Store will offer residential and business customer services, a payment center and retail sales and displays of cable modems, digital cable television and cellular telephones.At the location GCI will employ about 30 to 40 full- and part-time workers, he said.Neeser Construction Inc. of Anchorage is the general contractor, Morris said.Upon completion of the new location, GCI plans to close its payment centers at Denali Street and another at Fairbanks Street, he said.Last November the company opened a smaller store at the Anchorage 5th Avenue mall, adding to its location at the Dimond Center.

Gas line study provides 'good little shot' of revenue to Fairbanks

FAIRBANKS -- Just once, Don Bennett bent his company’s rules and allowed a customer to take one of his rental recreational vehicles north on the notoriously rough Dalton Highway.As a result of his flexibility, Bennett’s company, Tanana Motorhome Rentals, landed a summer-long rental contract for 10 travel trailers. Field crews used the trailers while conducting baseline environmental research for a proposed gas pipeline from Prudhoe Bay south to Delta Junction and east to the Canadian border."This sealed the lid for us having a successful year. A lot of the logistical details that could have been nightmares really went well," Bennett said, of the 75-day rental contract with the Anchorage branch of URS Corp., a consulting firm hired by the Alaska Gas Pipeline Production Team to conduct the environmental research this summer.The economic spin-off from that work went well beyond Bennett’s motor home rental business, which nearly doubled its fleet size with the purchase of seven new travel trailers specifically for the environmental research teams.Heindl’s Car and Truck Sales of Fairbanks provided 34 vehicles used to tow trailers and transport field workers during the 2 1/2 month study. Arctic RV and Interior Topper landed extra maintenance work for the 10 trailers that traveled the notoriously rough haul road north of Fairbanks. Chena Marina RV Park hosted the 10 field crews several times during the summer-long project."I estimate that $250,000 to $300,000 came into Fairbanks with us negotiating that contract with URS," Bennett said. "The city absorbed it real well, instead of saying, ’It’s the middle of tourism season and we don’t have time.’ "Taking its cue from the visitor industry, URS opted for recreational vehicles to house about 50 field workers assigned to the pipeline study this summer, starting in mid-June and concluding the end of August. That’s because the work involved some areas with little or no public facilities, said Shauna Thums, URS project administrator. "We also needed electricity for the information gathering so it could be done on an expedited basis," Thums said. "This way, you don’t have people sitting for 12 hours, hand writing information."Portable computers were used in the field and information gathered was downloaded into the study’s central database during evenings spent in the recreational vehicles."It can speed up the process as much as by a year," Thums said. "Doing it this way, we were able to coordinate with the client as each day went by."She said it wasn’t typical for URS to use travel trailers or motor homes for such field work."The biggest argument for it was local spending," she said. "If we went to Budget Rent-a-Car, they’re only giving back to the community a couple of $5 an hour jobs and the rest of the money goes to the corporate headquarters Outside."URS tried out the motor home field accommodations earlier in the season, renting a unit from Bennett for about a month."That one rental that went up the Haul Road got the ball rolling," he said. "They were near the end of their 26-day rental and said they wanted to extend, and that they would like to have nine more motor homes."Bennett suggested the company rent travel trailers and extended cab trucks, providing crews with transportation to remote field sites while maintaining a base camp with the trailer."We didn’t want to send motor homes up there -- the road does too much damage," he added. "It’s like having your house in an earthquake. Everything jiggles loose."Bennett ended up providing each crew with a complete set of housekeeping items -- bed linens, towels, pots and pans, silverware -- as well as a five-kilowatt gas generator, which provided power for the trailer during camp spots in remote areas. Bennett and his wife, Dawn, outfitted the 10 mobile accommodations in 10 days, in order to meet a departure deadline of June 18 set by URS.Other Fairbanks businesses scrambled at the last minute to accommodate the pipeline survey crew, but were also appreciative of the new customer base."They made up for an RV caravan we didn’t have this summer," said Suzanne Spanjer, owner of Chena Marina RV Park. "With nine or 10 rigs, that makes a big impact on a park our size."Greg Heindl, owner of Heindl’s Car and Truck Sales, also faced a short turnaround time to provide vehicles for the summer rental. He purchased 14 vehicles for the contract, and took five more off his sales lot. URS crews kept adding more vehicles during the summer, renting a total of 34 rigs."I was a little nervous about buying so many vehicles, but I got decent prices on them," he said. "I’ve got about 25 extra vehicles now, which I’m paying interest on the money and I need to get rid of but it’s nice to have trucks and sport utility vehicles for sale in Fairbanks in September."Kevin Brown, owner of Arctic RV and Interior Topper, said he felt a time crunch for some midsummer maintenance work."We had to drop things to get these units worked in, and the timing wasn’t done real well for us," he said. Yet he’s glad for the extra business."It was a good little shot that helped us through the summer. We had a lot of road construction right in front of us that kept a lot of the tourist traffic away."Patricia Jones is a free-lance writer living in Fairbanks. She can be reached via e-mail at ([email protected]).

FCC may ask court to look at licenses

The U.S. Supreme Court may review a case early next year that disputes ownership of spectrum licenses successfully bid on by an Alaska business and its partner AT&T Wireless.This week Federal Communications Commission officials were set to ask the nation’s high court to consider the case.Alaska Native Wireless LLC was successful bidder on wireless licenses including the major markets of Los Angeles and New York during a January spectrum auction conducted by the FCC. However, a U.S. appeals court decision in mid-June held up awarding spectrum licenses previously owned by a company, NextWave Telecom Inc., that later went bankrupt.The decision ties up the licenses rather than releasing them for service.Arctic Slope Regional Corp. of Barrow, Doyon Ltd. of Fairbanks and Juneau-based Sealaska Corp. formed Alaska Native Wireless to bid on wireless licenses auctioned by the FCC. The spectrum auction, which began Dec. 12, was completed Jan. 26.Officials from the FCC were due Sept. 20 to ask the Supreme Court to review the case, said Conrad Bagne, head of ASRC Wireless, the managing partner for Alaska Native Wireless."NextWave and amicus parties then have until Oct. 22 to respond," he said. "Assuming there are no requests for extension of the time, the Supreme Court will consider whether to hear the case in late November or early December. If the court decides to hear the case, arguments would likely be made in the March/April time frame, with a decision by the end of June."Alaska Native Wireless with its partner AT&T Wireless was the high bidder on almost $2.9 billion in wireless licenses covering 43 markets with a population of 71 million. Markets include Los Angeles, New York City, Denver, Tampa, Fla., Cleveland, Jacksonville, Fla., Minneapolis, New Haven, Conn., and Portland, Ore.However, NextWave sued the FCC for seizing the licenses, which were re-auctioned in January, according to Associated Press reports.A U.S. Court of Appeals for the District of Columbia Circuit ordered the FCC to return the licenses, contending the agency could not seize the property of NextWave, which was reorganizing under bankruptcy protection.On Aug. 30 Alaska Native Wireless and Voice Stream Wireless filed a petition with the FCC to deny reinstatement of NextWave’s licenses, Bagne said.FCC officials returned the licenses to NextWave on Aug. 31 based on the court order, according to Associated Press reports.However, the "FCC’s reinstatement of the licenses is highly conditional," Bagne said, noting the appeal to the Supreme Court. FCC officials also have told Bagne they plan to resolve pending regulatory proceedings concerning NextWave, including a petition for an investigation filed in July.Despite the legal and regulatory proceedings placing the licenses in limbo, Alaska Native Wireless anticipates providing service via the spectrum licenses."Alaska Native Wireless has done significant planning and is poised to quickly deploy the licenses when they are ultimately awarded," Bagne said. "Our filings have urged the FCC to issue the licenses to the winning bidders in Auction No. 35 including Alaska Native Wireless since we have demonstrated that we have the financial wherewithal to build out our system and offer new and innovative services to the American public."

Summit tackles privacy

Declaring that a discussion of privacy issues raised by the Internet "seems timely in Alaska," Lt. Gov. Fran Ulmer on Sept. 5 kicked off a three-day privacy summit in Anchorage.Ulmer is chairwoman of the state’s Telecommunications Information Council and has been active in making state information and services available to Alaskans on the Web.For the privacy summit, she pulled together a diverse group that included representatives from government, the telecommunications industry, academia, privacy advocacy groups, law enforcement and Microsoft Corp., a company whose practices regularly spark privacy concerns.One of the cosponsors of the event was the Alaska Humanities Forum."Alaskans are passionate about the privacy of their personal information," said the group’s president, Ira Perman. "But at the same time we are one of the most wired states."Perman made his remarks at a press briefing preceding the summit. Also on hand was Steve Smith, chief technology officer for the University of Alaska. The university also was a cosponsor of the event.Smith said the free and uninhibited flow of information will depend on proper policies being developed and put into place as laws and regulations; technology which provides adequate security; and education of the people using the technology."People need to understand what their liabilities and options are," Smith said.In her introductory remarks, Ulmer pointed out that Alaska is the only state in the union with a specific guarantee of privacy in its constitution. The right to privacy is not spelled out in the federal Constitution, either.Will that put Alaskans in a unique position as the battles over Internet privacy play out in the future?"It might," said Attorney General Bruce Botelho, also a summit participant.Botelho said the state’s privacy amendment, which was adopted in 1972, has been invoked in cases involving everything from abortion to marijuana use. More recently, however, it was used as the basis for a court decision banning an employer’s surveillance of an employee because the employee "had a reasonable expectation of privacy," he said.Botelho said privacy in commerce might be an area where Alaska’s privacy guarantee would be put into play. But he said that would depend if Internet commerce ended up being regulated nationally or on a state-by-state basis.One person who already deals with privacy issues on a daily basis is Richard Purcell, corporate privacy officer for Microsoft. His job is to establish privacy and security guidelines both within the company and for the company’s millions of customers.Purcell said those guidelines cover five areas:* Notice from companies to their customers, to make people aware that information about them is being stored;* Choice, allowing people to opt in or opt out of data gathering on the Internet;* Access to the information companies have about you;* Reasonable security appropriate to the information being stored; and* Enforcement of privacy provisions.Microsoft has come under fire recently for its proposed "Hailstorm" system, which would store personal data for its customers, who would then decide who could have access to it. A group of privacy advocates has filed a complaint about Hailstorm with the Federal Trade Commission -- a complaint Purcell said he expected would be dismissed as having no merit.He then vigorously defended Hailstorm."For the last 10 years, companies have taken data from people and made money with it," he said. "We’re hoping to change exploitation into stewardship."For the system to work, people will need to trust Microsoft to prudently handle their information."We’re betting the company’s future on it," he said. "We believe in privacy. Period. Full stop."Purcell said Microsoft had contributed $10,000 to help defray the costs of the summit. Other sponsors included Alaska Communications Systems, AT&T and the Alaska Telephone Association.

Former Wasilla High, UAF man among the missing at Pentagon

FAIRBANKS (AP) -- A Navy officer who grew up in Alaska and chose to work in the Pentagon to be closer to his family is among those missing after a commercial jet hijacked by terrorists struck the building Tuesday.Petty Officer 2nd Class Ronald Hemenway, 37, hasn’t been heard from since the fiery crash, said his parents, Bob and Shirley Hemenway of Shawnee, Kan.Hemenway’s name is on the list released by the Defense Department of the 188 people who remain unaccounted for in the Pentagon attack.Hemenway, who attended the University of Alaska Fairbanks, has a wife, Marinella; and two children, Stefan, 3, and Desiree, 1. They live at Bolling Air Force Base near Washington.Shirley Hemenway told the Washington bureau of the Fairbanks Daily News-Miner that her son was successful enough to pick his posts and ended up at the Pentagon after a tour on the USS LaSalle.’’We said ’Hey, you’ll be closer to us, you’ll be safe and you’ll be home for your family every night,’’’ she said. ’’Obviously we were wrong on some of our observations.’’Hemenway lived in Fairbanks with his family from 1967 to 1974 and returned, after graduating from Wasilla High School in 1982, to attend UAF.His father, Bob, worked across the state for Alascom and its predecessors, dating back to the days when Alaska’s long-distance phone systems were run under contract to the U.S. Army. He and Shirley came to Alaska in 1961.Their first assignment was Cape Yakataga, on the Gulf of Alaska coast. They had no electricity or running water, Shirley recalled, and she flew 120 miles west to Cordova for Ronald’s birth.After Yakataga, they moved to Tok and then to Fairbanks in April 1967, just a few months before the Chena River flooded the town.In Fairbanks, Bob worked at the military’s White Alice communication stations on Murphy and Pedro domes while cultivating an interest in politics. He became the Republican Party chairman for the Fairbanks area in 1968 and served through 1972. That’s when he met the soon-to-be U.S. Rep. Don Young and his wife, Lu. The couples remain friends.The Hemenways moved south to Wasilla, where the family eventually grew to six children. Seeking warmer weather, the family uprooted again and headed for Atlanta. There, Bob signed on with Sprint and helped develop the early backbone of the Internet.Ronald left UAF and followed his family shortly afterward, deciding to pursue a career in horse breeding. He worked at a chemistry firm and an equestrian school but followed his parents once again when Sprint reassigned Bob to a post in Kansas.There, Shirley remembers finding a note from her son one morning. It said: ’’I won’t be home until I’ve found a job.’’’’He came back around supper time and said he had a job. He was going to join the Navy,’’ Shirley said. ’’We thought it was a joke.’’Ronald wasn’t joking. He had tried to join the Air Force, but at age 30 was over that service’s age limit. The Navy recruiter was in the same building, though, so Ronald signed up with that branch, his mother said.From there, she said, her son had one success after another. He aced his vocational aptitude tests, entered Navy training in electronics and graduated at the top of his class.’’So he had his pick of what to do,’’ she said.He picked a ship sailing for Italy -- the USS LaSalle.’’We teased him and said now you’re going to find an Italian girl and marry her,’’ she said. ’’And he did.’’Ronald and Marinella were married in Italy, then renewed their vows in America at a joint ceremony with his sister Kathleen. He also has two brothers and two other sisters.

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