Aviation opportunities

A surge in activity at flight schools is sending a strong message to local operators: Gear up for sales and instruction or lose out. New general aviation aircraft are being manufactured that will change the complexion of aviation in Alaska, triggering different maintenance schedules and installation of very high-tech avionics, according to statewide aviation businesses. But besides the equipment, one flight school owner said the future will hold something very different from the past -- more women pilots. "With the current shortage of pilots for the airlines to draw from, we are experiencing a large influx of interest in flying here," said Ramona Ardiz, co-owner of Aero Tech Flight School at Merrill Field. "And you would be surprised at the gender. We are getting more women every day that are interested in learning to fly for a career." The reason, according to Ardiz, is that as pilots women will likely get equal treatment during a time of high demand. Dick and Ramona Ardiz have been in business in Anchorage since 1955. "I think Alaska has a very strong future in aviation," said Ramona Ardiz. "But we always have. I quit counting how many people we taught to fly when the number hit 14,000 sometime in the early 1960s." Women pilots are nothing new in Alaska, according to Ruth Jefford, the first woman flight instructor at Merrill Field who also operated International Air Taxi at Anchorage International Airport. "I think women make better flight instructors. They are more patient than men," said Jefford. "I never really had any problems with the sexuality issue. As long as people got there safely no one cared that I was a woman pilot." Jefford’s opinion appears to be shared by others. Just recently the Federal Aviation Administration awarded Charlotte Luckett of Palmer’s Mustang Air the Flight Instructor of the Year award.

Gottschalks to leave mall

Alaska’s fourth-largest mall will lose a major tenant later this spring in a continuation of blows to the University Center in Anchorage. Officials from Gottschalks Inc. will not renew their lease at the mall, which runs out in June, said Fred Bentelspacher, vice president of marketing for the Fresno, Calif.-based retailer. The University Center Gottschalks location is tentatively set to close in late May, he said. After closing the University Center store, Gottschalks will operate two Anchorage stores, plus one store each in Fairbanks, Juneau, Soldotna and Wasilla. The decision was based on lagging sales volume per square foot at the location compared to other stores, he said. Bentelspacher did not offer sales figures for comparison. Location was another factor coupled with prospects for the mall, he said. "We were not sure about the future of the mall so we didn’t want to sign another long-term lease," Bentelspacher said. Gottschalks employs 45 full- and part-time workers at the University Center location, he said. Employees could be transferred to Gottschalks’ two other Anchorage locations. The department store retailer also plans improvements later this year to its Dimond Center and Northway Mall locations. However, a timeline for those upgrades is still being decided based on negotiations with vendors, Bentelspacher said. Bill Gee, vice president and broker for University Center owner Hickel Investment Co., did not return phone calls at press time. University Center, built in 1972, has lost national tenants since 1998 due to corporate decisions to close Alaska stores including Rite-Aid, Kinney Shoes and Jay Jacobs. Operators of University Cinema shuttered the theater. Local tenants also relocated or closed stores at the mall although Natural Pantry opened its second Anchorage store in the former Safeway space, and Champions Choice relocated to the mall. Last April Gottschalks picked up seven Alaska locations plus 31 other Pacific Northwest stores after acquiring the assets of another retailer, Lamonts Apparel Inc. of Kirkland, Wash., then under Chapter 11 bankruptcy status. Lamonts had operated in Alaska, Idaho, Oregon, Washington and Utah. The deal, completed in July, included acquisition of Lamonts’ store leases, fixtures and equipment for $19 million. After renovations to the Dimond Center and Fairbanks store, Gottschalks opened its Alaska stores Sept. 7. Other Pacific Northwest stores had opened earlier, in late August. Gottschalks currently operates 79 department stores in seven Western states, with 39 stores in California, 21 in Washington, seven in Alaska, five in Idaho, four in Oregon, two in Nevada and one in Utah. Gottschalks also operates 17 specialty apparel stores which carry a limited selection of merchandise. According to the Municipality of Anchorage, the University Center ranks fourth in size with 281,568 gross leasable square feet. The Midtown Anchorage shopping center trails the Anchorage 5th Avenue mall at 498,000 gross leasable square feet that includes J.C. Penney and Nordstrom, the Dimond Center measuring 477,774 gross leasable square feet without its office tower and the Northway Mall at 339,368 gross leasable square feet including Office Max. The next largest Alaska mall is the Bentley Mall in Fairbanks with about 185,400 gross leasable square feet, according to the International Council of Shopping Centers.  

Non-housing projects draining AHFC

Alaska Housing Finance Corp., the state housing corporation that is now a $5 billion financial juggernaut, has also become a source of cash for a variety of state-funded construction projects. That cash, however, is now running out -- and already a popular home mortgage subsidy program has been suspended. Each year AHFC pours $103 million into the state general fund. About $22 million of this goes for the corporation’s own capital needs, mainly construction and maintenance on public housing projects AHFC owns and operates, according to John Bitney, who manages AHFC’s legislative affairs.. He said the other $81 million per year is spent on other things, such as rural water and sewer and school construction, ports and harbors, University of Alaska student dorms and deferred maintenance of university buildings. There’s no doubt that the need for village sewer and water improvements and repairs to schools and other public facilities is legitimate, but some are critical of the Legislature for tapping the housing corporation’s financial strength for general state capital projects. "I tease them that housing shouldn’t even be in AHFC’s name anymore," said Robin Ward, president of the Alaska State Homebuilders Association. But if AHFC weren’t around with its several billion dollars in assets, the state would have no way of paying for these improvements except by raising taxes or cutting other services. "What the Legislature really needs to do is to adopt a general long-range fiscal plan for state government," said Dan Fauske, AHFC’s executive director. "We’re happy to work with them to meet a short-term need, but we’re not the long-term solution." The problem is that the corporation is really paying the state more than it earns each year, which is contrary to the agreement for transferring earnings to the state general fund approved by AHFC’s board. That agreement limits the size of the transfer to the housing corporation’s earnings for the previous year. In fiscal 2000, which ended last June 30, the corporation earned $83 million, but still paid $103 million into the state general fund, according to Bitney. In effect, the contribution is drawing down the asset base of the housing corporation. The proposed capital budget submitted by the agency for use of the $103 million in state fiscal 2002, the budget year beginning next July 1, in addition to $22.9 million in spending for AHFC’s own capital projects, contains mostly improvements to low-income and senior citizen housing. It also includes $52 million for rural Alaska water and sewer projects, $1 million for debt service on bonds sold for University of Alaska student housing, $44 million for debts service in AHFC bonds sold for other state capital projects, and $6 million to retire other state debt. Last year the Legislature didn’t give the housing corporation what it asked for to maintain and build its own public housing. AHFC asked to use $22.9 million of the $103 million it paid the state, but lawmakers only gave it $18.7 million, according to Fauske. Ward, of the home builders association, worries that all of this detracts from AHFC’s primary role, which is housing. "We create new housing stock for future growth. They’re not the primary lender but they are the lender that fills the cracks, especially for first-time homebuyers," Ward said. "It’s important to us to have AHFC as a partner," she said. Sue Benedetti, vice president in charge of mortgage home lending at First National Bank of Anchorage, agrees: "AHFC is very important to us. We do a lot of rural lending, and they are an important source of financing for rural areas." What is focusing attention on the issue now is AHFC’s phasing out of programs funded by arbitrage earnings from invested bond proceeds. Those earnings have declined, which on April 3 caused the corporation to announce the suspension of a popular interest rate subsidy for new homeowners called the Taxable First Time HomeBuyer program. Other programs, such as one that reduces interest rates for energy-efficient homes, may last only another year or two, according to agency officials. Fauske told the House Finance Committee March 29 that while AHFC is working on other ideas for bringing in low-cost capital to fund these programs, the only other source is the corporation’s own earnings, which are now being diverted to the state general fund. A more challenging problem is that AHFC has to capture more of the mainstream home mortgage market, not just fill the gaps of low-income and rural loans. Mainstream lending is more profitable, and these profits are needed if the state corporation is to continue to issue less-profitable, special-needs financing, Ward said. "They need to be able to move more into mainstream lending to make the profits to continue filling these niches," Ward said. "They’re not the major player in the market now, but they need to be a player. If interest rates rise we’ll need them even more." Fauske said it’s critical for AHFC to maintain a strong position in the market in the event of an economic decline in Alaska. "When the Alaska economy turned down in the mid-1980s, other lenders pulled out of here for several years. We were lucky then to have a local housing corporation making loans to help the market recover," he said. AHFC started issuing corporation bonds to cover other state capital project needs unrelated to housing in 1998, after the Legislature passed Senate Bill 360. That bill authorized $200 million in new projects to be paid for by the housing corporation, mostly deferred major maintenance on rural schools and University of Alaska buildings. In 2000, the Legislature passed House Bill 281, ordering AHFC to issue another $77 million in bonds to finance more school and university major maintenance as well as small boat harbors around the state. The deferred maintenance was on state facilities, mostly rural schools, university buildings and harbors that had been allowed to run down during the latter half of the 1980s when low oil revenues forced sharp cuts in state capital and operating spending. The total price tag for deferred maintenance was estimated at $1.2 billion. Actions taken by the Legislature in recent years, mostly through the financing by AHFC, have taken care of about $400 million of this. Recently the housing corporation used its acumen in innovative financing deals to develop an unusual financing instrument to issue bonds to be paid by future payments received by the state from settlement of litigation brought by several states, including Alaska, against four major tobacco companies. Last year AHFC created the Northern Tobacco Securitization Corp., which financed $93 million in new school construction around the state. This year Gov. Tony Knowles is proposing another $124 million in bonds be sold by the corporation to finance more rural school construction and major maintenance. The latest bonds proposed by the governor would take care of the top four projects on the state’s priority list for rural schools. Alaska is expected to receive $18 million to $20 million a year under the tobacco settlement. Forty percent of this is now pledged to support the bonds that have been issued. If the governor’s latest proposal is adopted by the Legislature, potentially another 40 percent of the tobacco settlement income will be committed. Alaska was the first state in the union to use the tobacco settlement money to sell bonds to leverage money. Other states are now looking at what Alaska did and will attempt similar financing, Fauske said. "People don’t realize how innovative they’ve been. I go to conferences around the country and people are amazed to hear the kind of things we’ve done here," said Benedetti of FNBA. Ward added, "They’re the goose that is laying the golden eggs. They’ve paid back the state’s original investment, so now they should be just left alone to focus on their mission, which is housing." Fauske said a locally owned housing corporation keeps money in the local economy. "We pay a dividend to the state. Other lenders, like Fannie Mae, don’t pay a dividend."  

King Cove to build clinic

Health care services in the Aleutian chain community of King Cove will receive an upgrade next year with construction of a larger clinic.Work is scheduled to begin in mid-May on a new clinic with completion expected in March 2002, said project manager Chris Kowalczewski.Bids are due April 27 on the $1.6 million project, and the project should be awarded in mid-May, she said.However, community officials believe the new clinic is not a complete remedy for emergency situations that still would require transport to Cold Bay and on to Anchorage. King Cove’s population of 750 full-time residents surges each year with an influx of hundreds of cannery workers. King Cove is off the road system and flying in and out of the village is often dangerous due to high winds and fog, according to officials from Aleutians East Borough."It’s still a slow boat to Cold Bay, but we’ll have a better facility to care for those patients awaiting transport," Chris Devlin, executive director of Eastern Aleutians Tribe, said in a statement.Community members had previously pushed for a road between King Cove and Cold Bay, but failed to obtain approval to build it via the Izembeck National Wildlife Refuge.Nearly three years ago Congress rejected the road but appropriated funds for a new clinic in King Cove, and on March 30 the Denali Commission transferred $1.6 million for the new clinic to the Eastern Aleutian Tribes, according to borough officials.The new clinic will measure 9,600 square feet, nearly three times the size of the older 3,300-square-foot facility, said project manger Kowalczewski, who runs her own company Planning for Health.A larger clinic will enhance health care services in King Cove, she said."Right now, for example, the dental chair for the visiting dentist is stored in a storeroom at the school because there’s no room at the clinic," she said. "People sit in the school hall to wait to see the dentist when he comes to town."The new clinic will feature a dental area with a supply room and two dental chairs. Telemedicine equipment will be installed for consultations with referral physicians outside the area. The emergency room will be expanded, allowing treatment for two patients at a time instead of one. A new garage at the clinic will house the ambulance, currently housed at the fire station.The clinic also will be home to a new regional medical, behavioral and dental administration center for Aleutians East Borough communities of Akutan, Cold Bay, False Pass, King Cove, Nelson Lagoon and Sand Point.A new location for the clinic also is advantageous for the community, which encounters seismic activity that could possibly trigger a tsunami, according to borough officials.The existing clinic is barely above sea level, unlike the new clinic, which will be on a hill -- one of the highest points in the community -- and the "designated area for the community to gather in case of disaster," Kowalczewski said.

Managing inventory is art and science

Many companies have trouble with their inventory. They have too little of what they need and too much of what they don’t need. They end up throwing away old inventory that becomes unusable due to age or obsolescence. They have raw material air freighted in or finished goods air freighted out. In general, they spend a lot more than they need to on shipping, storage, handling and losses. Can you do something about this? The answer is yes, there are many inventory management techniques that can help a lot. The first principal is that having inventory is expensive. A rough rule of thumb is that inventory costs about 20 percent of the face value of inventory per year. So, if you have an average of $1 million in inventory for a year, that inventory costs you about $200,000 to have. You can calculate what it actually costs more accurately by considering the elements that add up to the total. They are the cost of the money tied up in inventory, the cost of space to store it, the cost of material handling to move it around and the cost of "shrinkage," which is the cost of lost, damaged, stolen or obsolete inventory. Because of these expenses, it is best to have as little inventory as possible. Keep only the minimum amount necessary to function. So how much do you need to function? Inventory can be viewed as the result of variability in your business, and the more variability there is the more inventory you will need. For example, suppose you can buy one of two different kinds of production machines -- one that breaks down once a day but can always be fixed in an hour or less and one that breaks down only once a week but takes five hours to fix. If the company operates a 40 hour week, each of these machines gives the same amount of production per week -- 35 hours. But suppose the company is on a just in time shipping system where it has to ship product once an hour to customers. With the first machine, they need to keep a safety stock of one hour of production to be sure they will always be able to make the shipments, while with the second machine they would need to keep five hours of finished goods on hand to be sure they always make production. So where does variability come from? There are internal and external sources. Internal sources include quality problems with processes, machines that break down unpredictably, tasks that cannot consistently be done in the same amount of time, variable skills among employees, and absenteeism. External sources of variability include inconsistent customer demand, variable quality of raw materials, inconsistent availability of raw materials and power outages. So, in order to reduce inventory, companies try to reduce variability. This is part of the reason for the focus in recent years on quality programs. Quality programs are aimed at reducing variability and thus have the added side effect of allowing lower inventories. So how should you as a company manage your inventory? Let’s start with raw material inventory. First, you should characterize your inventory based on cost, use rates, variability of use, lead time to get more and the variability of that lead time, shelf life, space and material handling and storage requirements. Based on this data, inventory is typically divided into three groups -- A, B, and C. "C" items are typically cheap, small, have a long shelf life and are easy and quick to get more. Bolts would be a common example. These are managed in a very simple manner -- typically you keep two boxes on hand and when one is used up another is ordered. Boxes are sized to be sure that you can get another box before you use up the one you have. This is usually implemented with a ticket that goes with each box. The person who empties a box takes the ticket to purchasing who orders a new box. "A" items are typically expensive, large, hard to get and have long lead times. They may often be ordered based on production plans. The company creates a production schedule of what they are going to make, uses the bill of materials to predict what raw materials they will need, checks raw material inventory for what is on hand, and orders what additional inventory they need. This is typically implemented using large computer systems that track and model production plans and calculate what raw material is needed. "B" items fall in the middle. They are often too cheap and easy to get to be worth going through all the trouble of running a computer system to manage them, but they are also too expensive to manage as simply as a "C" item. In many cases, companies will calculate usage rates for "B" items and set reorder points based on that rate. Suppose we have some expensive hard to get bolts. We could study the use rates of each bolt and define a different reorder point for each. Some bolts we might only order when we have two left. Others we might order when we have two boxes left. Factors that would be considered when setting these reorder points are cost of the items, shelf life, shipping cost and minimum order size. The goal in all three cases is the same -- to minimize costs while still being able to meet the needs of production. David Arnsdorf is president of the Alaska Manufacturers’ Association in Anchorage. He can be reached via e-mail at ([email protected]).  

UA joins safety research

The University of Alaska has been selected for a team of universities tasked with supporting aviation safety research and development programs that will form the new Air Transportation Center of Excellence for General Aviation.The Federal Aviation Administration chose Embry-Riddle Aeronautical University as the lead member of a team, which also includes Wichita State University, the University of North Dakota and Florida A&M."This is a phenomenal opportunity to build on existing strengths and study in new areas," said Steve Mattingly, assistant professor of engineering at the School of Engineering at the University of Alaska Fairbanks. "To work in concert with UAA on improving GA safety and all the needs throughout the state is very exciting."The universities will enter into a cooperative agreement with the FAA that allows them sharing as equal partners in their research."We submitted our RFP (request for proposals) with UAF and Embry Riddle in the fall of 2000 to the FAA for this program," said Leonard Kirk, Capstone trainer for the University of Alaska Anchorage. "The FAA was looking for geographical diversity, and of course Alaska has that."UAA will study a back-up system to the Global Positioning System so that aircraft will be able to land should the satellite system fail or be neutralized, according to Kirk. But they are also looking at airports and other technical issues. UAA has an Aviation and Technical School, but does not have a school of engineering so they teamed with UAF for other areas of research."Our role in the center is to provide cold region testing for ground based technology," said Mattingly of UAF. "We hope to become a cold regions testing center for general aviation in the future."UAF will use the experience of the civil, mechanical and electrical engineering and atmospheric studies departments as part of the matching fund research.Funding for the center will be provided through cost share contract awards and grants subject to dollar-for-dollar matching fund requirements mandated by Congress. While the award represents a long-term FAA commitment over the next three to 10 years, the center will strive to become self-supporting within 10 years, said Rep. Don Young, R-Alaska, in a press release.The airport and aircraft safety research and development division of the FAA will manage the Center of Excellence for General Aviation.

Thanks to rest of world, embargo hurts U.S. more than Cuba

 Infrastructurally, Cuba is a mess. Once proud streets and avenues lay potholed and crippled with dying trees and pitted sidewalks. Leaded gas leaves its mark in the horribly polluted air, eroded buildings and monuments and the blackened landscape. Havana reeks of decay. Buildings, unpainted for decades, lend a 1950s air. The good news is that 80 percent to 90 percent of Cubans own their own apartment or house. The bad news: They can’t rent or sell, at least not officially. And stray dogs are everywhere, a byproduct of the Soviet pullout in 1993. Starving Cubans had a choice, feed themselves or feed their pets. The pets lost. Yet, from an economic standpoint, things are beginning to look up. The economy has been on the uptick since 1994 with a latest gain of 5.6 percent in 2000. Government policy is firmly rooted in a shift in production from goods to services. That means less reliance on the traditional exports of raw sugar, nickel, tobacco and seafood and heavy concentration on tourism and emerging industries like biotechnology. The Helms-Burton Act and the Torricelli Amendment, both aimed at placating the politically powerful Cuban-American lobby and preventing any U.S. trade with Cuba, are failing miserably. The rest of the world is capitalizing on American petulance. Seven hundred foreign companies do business with Cuba, 51 from Canada alone. Of the 140 countries doing business, Spain, Canada, Italy and France claim the lion’s share. Tourism is the budding, 800-pound gorilla, a $2 billion industry with an 18 percent annual growth rate. Most of those dollars come from heavy-spending Europeans and Canadians. Those visitors stay in 35,000 rooms in 227 hotels, the majority four- or five-star, with approximately 20 percent built, managed and run by European chains. Retail, however, is stymied. Government ownership and control of the retail environment results in excessive mark-ups, heavy taxing and nonexistent competition in every category except the personal sector, comprised of street and market vendors, craftsmen and small cafe and restaurant proprietors, many of whom conduct business out of their homes. Real estate development is dominated by the Spanish and Italians, who have entered into joint ventures to build apartments and condominiums. Surprisingly, foreigners can buy residential property although the wisdom of that action is open to question given the government’s heretofore unwillingness to recognize private ownership and its previous predilection to expropriate private property at will. So what does it all mean for the United States? Economically and politically America is clearly on the losing end. U.S. investment in tourism, hotels, automobiles and consumer goods represents a shamefully lost opportunity. Cubans crave American products as evidenced by the pervasive presence of well-known brands like Microsoft, Revlon, Tommy Hilfigger, Pepsi-Cola, Coca-Cola and even the Kentucky Wildcats and the New York Yankees. From the Cubans’ point of view, they estimate annual export losses to the United States of $90 million in cigars alone and $1 billion in tourism activity. Ironically, 200,000 Americans visit Cuba legally and contribute $800 million in annual remittances to the Cuban economy. From a political standpoint, the U.S. position is inconsistent if not irrational. America has trading relations with Vietnam, and commercial relations with China. Even archenemy North Korea is subject to U.S. friendly feelers. Someone needs to remind Congress that the Cold War is over and the West won. The Cubans are ready to negotiate without pre-condition. Remember, there are no restrictions placed on Americans visiting Cuba by the Cuban government. The ban is entirely U.S.-driven. But that won’t happen until one of two events occurs: Either Castro dies or Congress develops the political spine to ignore the powerful Cuban-American lobby in Florida. Unquestionably the embargo is hurting the United States as much as it hurts Cuba. Now is the time to normalize relations before the Europeans completely shut the United States out. Ultimately it will be the business community that will force the change. American agricultural and pharmaceutical interests have tried and lost. But they’ll be back, and eventually they’ll succeed. Alf Nucifora is an Atlanta-based marketing consultant.  

Small craft of future packs 'big airplane stuff'

Alaskans don’t have to go very far to find the general aviation airplane of the future -- it’s sitting at Ted Stevens Anchorage International Airport.The future looks like this: a four-place, high wing single engine aluminum airplane with a tricycle landing gear. On the outside, it looks like any small plane built in the last 30 years, but look in the cockpit, and there you will find a surprise."This is the cutting edge for a general aviation airplane and for instruction," said Mark Johnson of AvAlaska. "We are always trying to stay two steps ahead of the competition." And to prove it, his airplane is the first non air-carrier airplane to get the Capstone automatic dependent surveillance broadcast equipment.Johnson’s $200,000 Cessna 172 SP is equipped with a two-axis autopilot, an instrument-certified global positioning system, two navigation and communication radios, and three databases, with three moving map displays.These systems are married to show a visual flight rules terrain moving map, an instrument flight rules moving map, and a terrain and ground proximity display on the MX-20 display screen. From one mile to 350 miles the pilot can see his flight path with a digital display.In addition, there is a 4-inch by 4-inch monitor in front of the pilot (left hand seat) that shows all the navigation you will ever need, and a monitor of the flight data over a terrain base in front of the co-pilot’s seat."If you get lost with this equipment, you might consider another means of transportation!" Johnson said.What do you see on the panel? The screens show the aircraft’s direction, course to a destination, altitude, speed and magnetic direction. Also on the electronic maps are airports, navigational aids, restricted zones, airways and obstructions above ground level."This is big airplane stuff," said Johnson. Most airline aircraft are required to have multiple platforms for backup, and the system in the Cessna is similar."I bet if JFK Jr. was familiar with this type of equipment, he could have pushed two buttons on the auto pilot and his airplane would have been back flying straight and level," Johnson said.With the autopilot, the tiny Cessna can fly an IFR approach for landing that will take you within 200 feet of the runway, according to Johnson. This looks like advanced instrument rating navigation to some -- and that’s just what Johnson aimed for."We fly from Anchorage International, so after every flying lesson my students are flying an IFR course to get back home," he said. The airport is in Class "C" airspace that requires strict approaches and air traffic control."This is a little too much for the beginning student, so I break them in little by little, but most of my clientele will go on to get their instrument rating anyway so why not get familiar with IFR equipment as soon as you can," Johnson added.He said that learning the newer navigational equipment is easy and has cut the learning curve on understanding instrument flying.Johnson demonstrated the equipment by taking a flight around the Matanuska-Susitna valleys and the Anchorage bowl.Once the plane departed the Anchorage International Airport and cleared Point MacKenzie, Johnson moved the destination icon to the Big Lake Airport on the GPS map."For practice in VFR this is great," Johnson said. "I can simulate an ... approach in IFR anywhere just by moving the ... target on the screen." The airplane continues to fly toward Big Lake Airport right on course and can be viewed on the MX-20 display complete with current location, destination and course direction.Once the plane smoothly touched down on the centerline, the moving map showed the plane on the MX-20 display right on the green line depicting the path back to Anchorage International Airport’s north-south runway.Johnson said that he received the Capstone transceiver and display from the FAA as loaners, and then had Avionics Specialists install the equipment and marry it to his existing navigation systems.Johnson envisions some radical changes in the future for navigation and air traffic control that will use satellites for an aerial based traffic system and visual displays that look like highways in the sky on a multifunction screen.The equipment in the AvAlaska airplane, and labor after about 60 hours of installation, is valued at $20,000. "That’s just a drop in the bucket to someone who will buy an airplane for $200,000 to $500,000," said Johnson."And you know what? That new $200,000 airplane out there will probably be worth $200,000 10 years from now, even with 10 year old navigational equipment," Johnson added.

PenAir gives museum $50,000 challenge grant

Statewide aviation enthusiasts and industry officials have been challenged to support the Alaska Aviation Heritage Museum by a regional carrier who donated $50,000 at the annual Wings of Alaska fund-raiser."This is what the museum is for," said museum executive director Dee Hanson. "To honor and record the history of Alaska Aviation. The museum can really use it (the donation)."To that cause president of the Alaska Aviation Museum Board of Directors Orin Seybert donated $50,000 from Peninsula Airways to the museum, as a challenge in hopes of raising capital for the aviation venue, refurbishing aircraft and documentation of Alaska aviation history.Seybert presented the check to the museum at the annual fund-raiser co-sponsored by the Alaska Airmen’s Association and the museum on March 30 at the 4th Avenue Theatre in Anchorage."We have a fine crew of aviation experts that are working to refurbish several projects that should fly this summer," Seybert said. "On behalf of PenAir, I would like to present the museum with this check for $50,000 and hope that other businesses in the industry will also donate."A silent auction of unique Alaska items during the program raised another $6,000 for the museum.First National Bank was also recognized for the donation of their annual calendar, which features aircraft and historical aviation vignettes and images of aircraft at the museum on its pages.Museum officials are hoping for more support for book, film, video and restoration projects.The museum was founded in 1989 and is at Ted Stevens Anchorage International Airport on the shore of the Lake Hood seaplane base.

Business Profile April 15, 2001

Name of the company: Environmental Management Inc.Established: 1988Location: 206 E. Fireweed Lane, Suite 201, AnchorageTelephone: 907-272-9336Web site: www.emi-alaska.comMajor focus of services: Environmental Management Inc. provides environmental and safety training as well as environmental and engineering consulting.History of the company: Training, including asbestos removal and hazardous waste handling, was the primary focus of Environmental Management from its start. In 1989 the company added environmental consulting to its list of services.The company has grown from an original handful of employees to eight full-time employees plus contract employees and class instructors. Today total business for Environmental Management is divided about equally between the training and consulting divisions.On the training side, Environmental Management has increased its total class offerings in the last five years. In 2001 classes will be held across the state at locations including Anchorage, Barrow, Ketchikan and Sitka. Enrollment in classes, which range from first aid to forklift training, ranges between 1,800 to 2,000. Training also can be tailored to a specific project for a company. Training clients include private businesses, government agencies and the military.Clients for consulting include private homeowners, corporations and the federal government. Consulting services include environmental site assessment, soil remediation, underground storage tank management and lead and asbestos inspection and management.Top accomplishment of the company: General manager Larry Bethel and program manager Larry Helgeson are proud of the company’s continued Alaska ownership and endurance despite a trend of mergers in the industry. They also are pleased to tailor services to meet customers’ needs.Major players: Larry Bethel, general manager, and Larry Helgeson, program manager, Environmental Management Inc.In 1990 the U.S. Army transferred Bethel to Fort Wainwright. He served at Fort Richardson in Anchorage from 1991 to 1995 then retired after 24 years in the Army. Bethel joined the company in 1995. The U.S. Air Force transferred Helgeson to Elmendorf in 1990 before reassigning him in 1991. In 1993 he retired from service, returned to Alaska and joined Environmental Management.Quote: "The mix of training and consulting works very well for EMI. They kind of go hand in glove," Bethel said.-- Nancy Pounds

Peterson joins aviation hall of fame

Ray Peterson, one of the pioneers of Alaska aviation, was honored by the Alaska Aviation Heritage Museum and the Alaska Airmen’s Association at a fund-raiser and gala dinner in Anchorage on March 30 at the 4th Avenue Theatre."It is an honor to be considered a pioneer along with Carl Ben Eielson, Noel Wien and others," said Alaska Aviation Hall of Fame recipient Petersen, 88.Felix Maguire, director of the Airmen’s Association, explained that Petersen brought a higher level of professionalism to aviation and would work at any job, in his early days, to earn extra money to keep his air service flying.Among the 220 in attendance for the event were former governor and long-time Bush pilot Jay Hammond, Federal Aviation Administration Regional Administrator Pat Poe, First National Bank of Anchorage chairman and president D.H. "Dan" Cuddy, Dick Reeve and sister Janice Reeve Ogle of Reeve Aleutian Airways, air service owners and operators and airline officials.Petersen, who came to Alaska in 1934, is credited with bringing turbo prop service to Alaska villages in 1958, and is also thought to be the first to implement an aviation industry retirement plan."We had Pat Nixon, then the vice president’s wife, christen our first turbo prop. I’ll never forget it -- she had a heck of time breaking that bottle of Yukon River water over the nose of that aircraft," reminisced Petersen.In 1943 Ray Petersen Flying Service purchased Jim Dodson Air Service and Bristol Bay Air Service. In 1945 it also added Northern Airways and two other uncertified operations that further expanded equipment and personnel.The Northern Airways acquisition provided the firm’s initial mail routes, according to Petersen. After a two-year period waiting for the Civil Aeronautics Board to approve the merger, Northern Consolidated was created.Northern Consolidated merged with Wien Air Alaska in 1968, which offered jet service to Alaska with Boeing 737s and turbo prop Fairchild F-27s. Wien Air Alaska was phased out of business in the late 1980s after it was sold to the Household Finance Corp."I quit flying commercially as a pilot in the early 1950s," Petersen said. "I was buried up to my eyeballs in paperwork with the CAB, and had to hire pilots to fly the bigger DC-3s."Petersen last flew the Stinson Tri-Motor and the Lockheed 10a. "We had to solve the curse of the mountain passes so we bought the IFR (instrument flight rules) equipped DC-3 to take care of that challenge," he said.After showing a film on the history of Wien Air Alaska and a revolving program of photographs from Petersen’s early years flying in Alaska, the pioneer aviator received his first surprise.Becky Brock of the National Park Service read a letter written by Rob Armburger, regional director of all the national parks in Alaska, recognizing Petersen for the preservation of Brooks Camp and the Katmai National Monument.Petersen took the concession for Katmai in the 1950s but only after he suggested that they only allow fly fishing in the Brooks River.Today, Sonny Petersen, Ray’s son, continues to run the Katmailand Inc. resort, famous for its fly fishing among brown bears.Petersen also received a plaque honoring his part in Alaska aviation history from Susan Bramstedt, a board member of the Alaska Aviation Heritage Museum and director of public affairs in Alaska for Alaska Airlines.Petersen reflected on his career and its beginnings in the 1930s, when he and Noel Wien flew from Seattle back to Alaska in separate airplanes. Wien flew a Ford Tri-Motor he purchased from Northwest Airlines with the money he made flying photographs of the Wiley Post and Will Rogers crash near Barrow; Petersen flew a Travelair that he purchased from Northwest in Chicago.When asked about his perception of the airline business in today’s world, Petersen is quick to respond. "I still don’t believe it," he said. "It is like a complete fantasy, like going to the moon.""To think that you can fly 550 mph in an aircraft that holds 500 people with a range of 7,000-8,000 miles -- people just don’t realize what a wonderful age we are living in," he said.

Rep. Murkowski seeks to raise alcohol tax; Senate moves oil, gas pipeline bills

Rep. Lisa Murkowski, R-Anchorage, introduced legislation April 2 that would raise the state’s taxes on alcoholic beverages by about 10 cents a drink. State taxes are now three to four cents a drink on beer, wine and hard liquor. The change would increase state revenues from alcohol taxes to $34 million, up from about $11 million. Murkowski’s proposal would also allow municipalities to tax alcohol an additional 10 cents a drink, and have the state collect the tax and return the money to them. "Right now the terrible expenses associated with alcohol in Alaska are through the roof," Murkowski said. "What we now collect in an excise tax doesn’t put a dent in the damage that alcohol does in this state. It’s incredible to me that we haven’t increased the alcohol tax since 1983." Murkowski chairs the House Labor and Commerce Committee. The bill was referred to her committee and the House Finance Committee. Oil and gas The state Senate passed a number of bills related to petroleum and a natural gas pipeline April 2. Senate Bill 156, making technical changes to oil and gas leasing procedures, was passed and sent to the House. The bill clarifies state law by stating that the Department of Natural Resources will write only a single state Best Interest Finding to cover multi-phased oil and gas development projects. In a decision last year, the Alaska Supreme Court construed the existing law as requiring multiple state Best Interest Findings for different phases of development. "SB156 specifies clearly that no subsequent Best Interest Finding is required after the disposal (lease sale) phase, and that the findings will be made on known information even if all potential cumulative impacts of a project are not known at the time of the lease sale," said Sen. Drue Pearce, R-Anchorage, vice-chairwoman of the Senate Resources Committee, which sponsored the bill. SB156 passed the Senate 14-4, and is now in the state House. The Senate also passed SB164, prohibiting leases on state submerged land in the Beaufort Sea. The legislation is aimed at blocking a proposed northern route for a natural gas pipeline, which would run east from Prudhoe Bay to the Mackenzie River delta on a route that would skirt the Arctic National Wildlife Refuge by going offshore. The vote was unanimous for the bill, which was sponsored by all 20 members of the Senate. Effect of the legislation would to force builders of a gas pipeline to follow a route through Interior Alaska, the so-called Alaska Highway route, as the only viable option. Another pipeline-related measure passed in the Senate April 2, also by unanimous vote, would allow the State Pipeline Coordinator’s office to collect fees for work on pipeline projects before an application is actually filed. The pipeline coordinator is a part of the Department of Natural Resources and coordinates review of permits by several state agencies. The office will assume substantial expenses this year as activity ramps up on proposed pipeline projects. SB143, sponsored by the Senate Resources Committee, would allow it to be reimbursed before permit applications are submitted. The bill also requires reimbursement to the state even it a permit application is later withdrawn. Another bill related to the state pipeline right of way leasing act is advancing in the Senate. Senate Bill 121, sponsored by Sen. Loren Leman, R-Anchorage, would clarify the law on when a change in design constitutes a "substantial change" in an application filed previously, requiring the entire permitting process to be restarted. Two companies, Yukon Pacific Corp. and Foothills Pipe Lines Ltd., have worked on North Slope gas pipeline projects for several years and have submitted preliminary applications for state right of way. If either project were to now proceed a substantial amount of work would have to be done to update permits and other required government approvals. The bill was approved by the Senate Resources Committee April 2. The Senate Resources Committee also sent out SB76, sponsored by Sen. Gene Therriault, R-North Pole, which would increase the maximum term of a state right of way lease from 10 to 30 years.  

Around the World April 15, 2001

STATETongass shut downANCHORAGE -- The U.S. Forest Service suspended all timber operations in Southeast Alaska’s Tongass National Forest on April 4 in response to a judge’s ruling the previous week that the agency violated federal law when it updated its management plan four years ago."This is a precautionary measure to the ruling," said Jim Ustasiewski, a federal attorney speaking on behalf of the forest service.In a 32-page decision issued March 30, U.S. District Court Judge James Singleton Jr. said the agency breached the National Environmental Policy Act and the National Forest Management Act by failing to consider some roadless areas as eligible for wilderness designation by Congress.The judge enjoined any further actions that would alter the wilderness character of any eligible roadless areas until the Forest Service complies with NEPA and NFMA. Some 9.4 million roadless acres are affected.Utility chief pleads guiltyJUNEAU -- The superintendent of Juneau’s wastewater utility has pleaded guilty to violating the Clean Water Act by diluting two water samples from the Mendenhall sewage treatment plant.Andrew Bronson admitted April 6 that he diluted wastewater effluent samples with tap water before the samples were analyzed by other employees of the plant, according to federal prosecutors.He faces a maximum penalty of up to one year in jail and a $25,000 fine for each of the two offenses.State gets fast ferry bidJUNEAU -- A boat-building company from Washington state has turned in the only bid for design and construction of a high-speed catamaran to serve as a Juneau-Sitka dayboat.Nichol Brothers Boat Builders submitted the $35.99 million bid, which was opened April 6 by the state Department of Transportation and Public Facilities at its headquarters in Juneau.Nichol Brothers won’t automatically be awarded the contract, however.A routine review is being done to verify the company complied with the state’s specifications, officials said.NATIONSummer shortage loomsBOISE, Idaho -- A federal energy agency, under fire for not being more aggressive in dealing with the Western electricity shortages and high prices, was scheduled to meet April 10 with officials from 11 Western states to discuss ways to contain the problem this summer.The unusual meeting called by the Federal Energy Regulatory Commission comes as a California utility decided to sell its transmission lines to avoid bankruptcy and officials in the Northwest predicted a tripling of electricity rates unless power demand is cut sharply in the coming months.The FERC, which regulates wholesale electricity sales, asked state utility regulators from the 11 states in the Western power grid to discuss ways that the federal agency might help in easing the power crunch, as the heavy summer demand periods are about to begin.Deal helps NorthwestMINNEAPOLIS -- Northwest Airlines’ tentative deal with its mechanics gives the carrier a leg up on its competitors, whose labor troubles remain unresolved just a few months shy of the summer travel season, industry experts say.If ratified by union members, the Northwest agreement would put pressure on Delta Air Lines, United Airlines and American Airlines to reach agreements that will give consumers trouble-free travel this summer, said Terry Trippler, an airline expert with OneTravel.com.Mechanics would get average raises of 24.4 percent and $10,000 in retroactive pay under the proposed contract, which would end a 4 1/2-year stalemate. The agreement was reached April 9.FedEx contract questionedWASHINGTON -- Auditors are looking into whether U.S. Postal Service managers misinformed their governing board by claiming that a contract with Federal Express will save the debt-ridden agency more than $1 billion.A spokesman for the Postal Service office of inspector general, which reports to the presidentially appointed Board of Governors, said April 9 it is reviewing the $6.3 billion, no-bid contract with FedEx.Fruit of the Loom files suitCHICAGO -- Fruit of the Loom is suing competitor Gildan Activewear Inc., accusing the Montreal company of stealing trade secrets to grab a competitive edge in the cutthroat apparel business."This case is about industrial espionage at the highest corporate level and the lengths to which predatory competitors will go to obtain commercial advantage,’’ Fruit of the Loom alleged in its lawsuit, filed in U.S. District Court last week.Lawyers for the underwear manufacturer asked for unspecified damages and a court-order to prohibit Gildan from using production and sales forecasts allegedly obtained in November.Fruit of the Loom alleges that former manager Elizabeth Walton passed critical documents to her ex-employer, David Cherry, one of five Fruit of the Loom executives who fled the company in recent years as it wallowed in bankruptcy protection.Compiled from business wire services.

DEC calls on truckers, refiners for low-sulfur diesel plan ideas

The state Department of Environmental Conservation has begun drafting a plan for Alaska’s compliance with new U.S. Environmental Protection Agency requirements for ultra-low sulfur diesel used in highway transportation.The new EPA rule becomes effective in the Lower 48 in 2006. It’s possible that a delayed effective date, to 2010, could be applied to Alaska, but the state must submit a phase-in plan to the EPA by April 2002 to justify the extension, according to Ron King, manager for DEC’s nonpoint mobile sources pollution-control program.A stakeholder task force of Alaska truckers, fuel distributors and refiners will work with DEC to develop the proposed implementation plan; they were scheduled to meet April 12 in Anchorage."This is an opportunity for Alaskans to deal with these issues in the best way possible," said Tom Chapple, director of DEC’s Division of Air and Water Quality, in a letter announcing the April 12 meeting."We have a choice to accept the standard federal implementation date or to tackle our unique problems by crafting our own implementation plan to minimize the disruption, distribution and cost factors," Chapple said.The new requirements will very likely raise the cost of diesel used for highway transportation because the fuel will probably have to be imported, since it’s unlikely any Alaska refinery will be able to make modifications to produce the fuel, King said.One possible solution is if a proposal for a plant to make "clean" diesel from natural gas, either in Cook Inlet or on the North Slope, moves ahead.ANGTL Inc., an Anchorage-based company, is working with Forest Oil and other companies to investigate prospects for a "gas-to-liquids" project on the North Slope or in southern Alaska. Diesel manufactured through a Fischer-Tropsch process has virtually no sulfur and would qualify under the new ultra low-sulfur EPA rule.But even if a local source is available for the new fuel, it will have to be stored separately from diesel for other uses not affected by the ultra-low sulfur requirement, said Gene Burden, president of Tesoro Alaska Petroleum Co., which refines and markets oil in the state.There is now a nationwide limit of 500 parts per million sulfur content for diesel fuel used on highways, but because of the state’s remoteness and unique logistics problems, Alaska has been able to get a series of temporary exemptions from the standard.The s ulfur content of much of the diesel used in the state is about 3,000 parts per million, although Tesoro is able to produce 500 parts per million diesel in its Nikiski refinery because the crude oil refined by Tesoro, from Cook Inlet and other sources, has a low sulfur content to begin with.Diesel is used in Alaska for highway fuel, home heating and electrical generation. Since the ultra low-sulfur requirement applies, for now, only to highway use, it causes a serious complication in Alaska because the ultra low-sulfur diesel would have to be stored separately, King said.Diesel used by trucks on highway accounts for only 5 percent of all the diesel used in the state.Although Alaska could get a delayed effective date to 2010 for the ultra low-sulphur requirement, for all practical purposes the earlier effective date for other states will affect Alaska, King said.That’s because at least some diesel trucks equipped with new emission controls that require the ultra-low sulfur fuels may be operating in Alaska.If diesel fuel with sulfur content higher than 15 parts per million, the new EPA standard, is used in engines with the new control systems they will be heavily damaged, King said.Alaska refiners Williams Cos., PetroStar and Tesoro have said that the modifications to produce the ultra low-sulfur diesel will be extremely costly.Williams, which operates a refinery at North Pole, near Fairbanks, has estimated that it will cost $100 million to reduce sulfur in diesel to 50 parts per million.The company has not done an estimate of what it would cost to produce diesel with 15 parts per million, Tom Byers, a Williams government affairs representative, told the EPA in hearings in Denver on June 29."We’re not even certain a commercially viable technology is available for a harsh northern environment like that at the North Pole refinery," he said.The company faces two unattractive options: Either invest $100 million or more to produce "a relatively minuscule amount of highway diesel fuel, or stop manufacturing diesel for highway use."Tesoro’s Burden said it is unlikely his company will be able to justify the investment needed to produce the ultra low-sulfur fuel.Williams and Petro-Star use higher-sulfur North Slope crude oil taken from the trans-Alaska pipeline.Unless it can be made locally, the only alternative is to import the new fuel, Burden said. Consumers will have to bear the cost of extra transportation and separate storage, he said.DEC’s King said that importing the fuel will be a challenge. Diesel used in Alaska must have special qualities because of the cold climate. Otherwise it jells, King said.When the agency was preparing arguments for an extension of EPA’s exemption for Alaska of the current nationwide 500 parts per million requirement, DEC officials tried to find a source for special "arctic-grade" diesel.No U.S. refiner was willing to make arctic diesel at 500 parts per million sulfur, King said. A refinery in central Canada was finally found that could supply the fuel. Having only one source for the fuel is hardly comforting, King said.It will also be very difficult, King said, for Alaska to get an exemption from the ultra low-sulfur requirement similar to the current exemption from 500 parts per million requirement.That’s because the ultra-low standard is linked to other new EPA requirements mandating the new pollution-control technology on trucks, he said.

Revenue fishing's a poor way to fund Fish and Game budget, caucus concludes

Test fishing is a poor way for Alaska Department of Fish and Game to pay for fisheries research. That was the consensus among legislators at a recent Fish Caucus meeting in Juneau. Also called "revenue fishing," the practice refers to the harvest and sale of fish or shellfish for the primary purpose of generating revenue. Originally, test fishing was conducted for research purposes, or to determine run strength. But as state legislators have ratcheted the Fish and Game budget down over the past decade, more costs are being covered by the sale of fish caught by vessels contracted by the department. "Laws for the Sea" reports that according to Commercial Fisheries Director Doug Mecum, since 1988 the department, under legislative direction, has been catching fish to sell for money to pay for activities ranging from aerial surveys to smolt counting. A tally Mecum prepared for the caucus showed that test fishing expenditures have increased from $1.6 million in fiscal 1992 to $2.7 million in the current year. He noted that about half of those amounts are paid to the harvesters contracted to catch the fish, as reported in "Laws." Rep. Fred Dyson, R-Eagle River, who organized the caucus session, has urged other lawmakers to educate themselves about revenue fishing. Dyson reportedly went to great lengths to make sure the department was not criticized for the practice. "ADF&G has not been sneaky. No one is saying the money raised is being used inappropriately. The department has been backed into the process by a lack of appropriations," Dyson said. However, Dyson and others believe the practice might benefit from some changes. A report completed last month by Bruce Gabrys of the United Cook Inlet Drift Association raised concerns that test fishing results in a loss to common property fisheries. It also notes that the department can depress fish prices with the rate in its contracts. Gabrys said test fishing amounts to a de facto tax on commercial harvesters. Since the department’s research benefits all user groups, he suggested that other user groups should contribute more to the cost of research. "Some group of legislators needs to decide what they think we should do," Dyson said after the caucus. "Maybe some broad tax or user fee, and I would hope that would be on all of the users of the stock, including sport fish, personal use and guided fisheries, as well as commercial fisheries to support the research that benefits the fish they utilize. My guess is we may see some legislation following one of those schemes." Fish oil and headaches Researchers claim that adding certain fish oils to the diet of adolescents helps reduce recurring headaches. A presentation at the Pediatric Academic Societies and American Academy of Pediatrics Joint Meeting in Boston described how 27 teens were given fish oil and olive oil supplements for two months. During the fish oil treatments, 87 percent said the number of headaches was reduced, headache duration was reduced in 74 percent of the cases, and severity was reduced in 83 percent of the teens. The olive oil treatments resulted in just slightly lower percentages. Nearly 93 percent of the test subjects said they would recommend both fish oil and olive oil to friends or relatives who suffer from frequent headaches. The researchers concluded that the overwhelming improvement in the teenage patients suggests that the use of fish and olive oils should not be dismissed as simply having a placebo effect. Scots add sushi to lunches Japanese sushi is being added to school lunches in Scotland. According to 2dayuk.com, the menu addition is part of an effort to provide a more healthy diet for school kids. Heart disease and obesity in Scotland are at an all time high, and it’s hoped that children will opt for healthier alternatives to the traditional diet of meat pies and deep fried foods. The nutritional plans are being spearheaded by the Glasgow City Council, which has already introduced Indian, Mexican and Chinese dishes as part of an award winning "Fuel Zone" school lunch program. "As Japanese cuisine is renowned for its nutritional content, it would be fantastic if youngsters decided it was something they would like to eat more often," said Glasgow lunch director Fergus Chambers. The Japanese have the lowest rate of heart disease in the world, and that is credited in great part to their diet. Along with being healthier, Chambers and others believe that foods like sushi are more interesting and fun.

State's exports slip in 2000, and 2001 faces similar challenges

Alaska’s exports in 2000 totaled $2.5 billion, down 3.9 percent from $2.6 billion in 1999, and the state’s export value for this year could face some obstacles, trade officials said. The 2000 dollar value of Alaska exports to foreign countries slipped compared with 1999 figures for seven of the state’s top 10 trading partners, according to data from the U.S. Census Bureau. The drop is mostly due to the shipment of Alaska crude oil to West Coast refineries rather than foreign countries, according to the state Division of International Trade and Market Development. "We expect that trend to continue and accelerate in 2001," said Greg Wolf, director of the Division of International Trade and Market Development. However, the change affects the statistics rather than the Alaska economy. "The state still receives royalties and people are still employed" in the oil and gas industry, he said. Crude oil exports dropped 42 percent in 2000, totaling $288 million. Crude oil falls in the category of Alaska’s No. 2 export, oil and gas, which overall dropped last year to $571.7 million, down from $722.3 million in 1999. Another reason for the total export value decrease in 2000 was a production decrease at Red Dog Mine, a requirement for installation of a new system expected to increase production later this year, Wolf said. The No. 3 Alaska export, minerals, dropped from $358.6 million in 1999 to $292.9 million in 2000. The fourth place Alaska export, wood products, also declined from 1999’s total of $222.5 million to $209.5 million in 2000. Fertilizer, Alaska’s No. 5 export, posted gains, climbing from $112.8 million in 1999 to $154 million in 2000. Exports to Alaska’s top trading partner, Japan, totaled $1.3 billion in 2000, down 1.1 percent from 1999 data. Last year Japan was the destination for 53 percent of all Alaska exports, statistics noted. Second-place export destination South Korea accounted for 18.2 percent of all Alaska exports. Alaska exports to Korea dropped 7.8 percent, totaling $448.6 million, down from $486.7 million in 1999. "I am encouraged by the strength of our traditional top two markets, Japan and Korea," Wolf said, calling export results from the two countries stable. However, the trade office is monitoring the Japanese economy and the strength of its currency, he said. "What happens in Japan matters to Alaska exports," he said. Demand for Alaska exports in Asia could be affected by the health of the economy there, he said. The future for Japan is a growing concern for Chuck Becker, director of the U.S. Commercial Service Alaska Export Assistance Center. "Japan has been in a fiscal funk for 10 years," he said. Since Japan is the leading buyer of Alaska products, any major upset there could affect the state’s exports, he said. Another factor that could impact Alaska would be declines in oil and natural gas prices, he said. Becker also is concerned that Alaska’s fishing industry continues to lose market share to farmed fish. However, Europeans steering away from beef and other meats could turn to Alaska seafood, boosting that sector, he said. "They will be looking for foodstuffs that are healthy and free of contaminants," he said. Farmed fish from nearby Scotland and Norway could still trump Alaska fish, he added. For 2001 Wolf expects some drawbacks for Alaska’s export totals. BP said it will not export crude oil from Alaska this year, instead opting for other refineries, a change that could account for a loss of several hundred million dollars of Alaska exports, he said. Seafood exports could be affected by possible restrictions to the pollock, cod and mackerel fisheries due to Steller sea lion protection plans and the Alaska Department of Fish and Game’s forecast for a smaller sockeye run, Wolf said. However, he is optimistic about a growing interest in Alaska seafood from European buyers. Wolf believes that while statistics may decline, small- and medium-sized Alaska exporters may find opportunities around the globe. Alaska’s top export, seafood, climbed last year from $989.5 million in 1999 to $1 billion in 2000. Seafood accounted for 42 percent of all Alaska exports last year. Chris McDowell of Juneau tracks statistics for Alaska seafood, specializing in salmon. He is program manager for the Salmon Market Information Service, which also provides data to the Alaska Seafood Marketing Institute. One aspect of salmon exports, salmon roe, posted gains in 2000, he noted. From July to December last year Alaska exports of salmon roe totaled $90 million, up from $56 million for the same period in 1999, he said. Last year more than 90 percent of salmon roe was sent to Japan, McDowell said. Another key Alaska salmon sector is sockeye, which typically accounts for two-thirds of the salmon harvest, he said. The export destination of sockeye has changed in recent years, McDowell said. "In 1997 we were sending 72 percent of sockeye to Japan," compared to last year’s total of 54 percent of sockeye shipped to Japan, he said. Also in 2000, Alaska shipped 23 percent of sockeye to the European Union and 18 percent to Canada, he said. One indicator of the 2001 market, McDowell said, is the movement of frozen salmon inventory levels in Japan. Earlier this year frozen salmon inventory levels were down 10 percent from the same period last year, he said. However, salmon imports there also were down slightly, he noted. Another factor for Alaska salmon in Japan is a new requirement by Japanese retailers that salmon be labeled as wild or farmed, he said. "It is not clear what impact this will have on Alaska."  

Bulletin Board April 8, 2001

In gear Northern Economics, an Anchorage-based economics consulting firm, has formed an international consulting consortium with the Progressor Consulting Group of Moscow and Seattle. The consortium, Northern Economics/Progressor, will provide consulting services to public and private entities operating in the North Pacific and adjacent regions, particularly in the Russian Far East. The headquarters of Northern Economics/Progressor is in Anchorage with branch offices in Seattle and Moscow. Spenard Builders Supply has expanded its Kodiak store on Mill Bay Road by 2,600 square feet. The remodeling included a major expansion to its plumbing center and the addition of John Locke, a plumbing expert, to its staff. SBS also has completed upgrades to its Soldotna location. Changes included new fixtures and displays, improved lighting, larger sales counters, an improved entrance and department expansions. RBMS LLC, doing business as Risk & Benefit Management Services, now is wholly-owned by MTD Inc., a company owned by Kent G. Davis, and Kershaw Inc., a company owned by Gregory J. Kershaw. RBMS, an employee benefits third-party administrator, purchased the business interests previously held by Richard Lowell. Davis remains president and chief executive of RBMS while Kershaw is chief operating officer. Northrim Bank’s board of directors approved the formation of a bank holding company, Northrim BanCorp. Inc., and the reorganization of the bank into a wholly-owned subsidiary of the new holding company March 23. Under the proposed reorganization terms, each Northrim Bank shareholder will receive one share of Northrim BanCorp common stock in exchange for each of their shares of Northrim Bank common stock. The transaction is subject to regulatory and shareholder approval and will be included in Northrim’s proxy statement for its 2001 annual shareholders meeting May 3. Datacade LLC has formed an alliance with TKC Communications LLC to provide networking services to federal agencies. TKCC, an information technology and telecommunications company registered in the Small Business Administration 8(a) program, is a subsidiary of Kuskokwim Corp., an Alaska Native corporation. The SBA 8(a) business development program is designed for firms owned by socially and economically disadvantaged entities. Datacade is a network-managed service provider with corporate offices located in Anchorage. Locator Official Census 2000 data from the U.S. Census Bureau is available online in Alaska for the first time. The Department of Labor and Workforce Development Web site at (www.labor.state.ak.us) is the online source for Alaska 2000 Census data. Information consists of Alaska total resident population and the number of Alaskans age 18 and older listed for the entire state, boroughs, census areas, places, census tracts, block groups, blocks, Alaska Native villages and voting precincts. Media KAKM-TV and Phillips Petroleum Co. will co-produce the first high-definition television documentary to be made in Alaska. The documentary will cover the achievements of legendary bush pilot Don Sheldon and will use the historic collection of film footage taken by Lowell Thomas Jr. The Sheldon video will premiere on KAKM’s first broadcast of digital television in May 2002 and also will be sold to the public in videocassette format as a fund-raiser. KAKM will edit and produce the video with part of a $200,000 operating grant from Phillips. Geoffrey Larson and Ray Daniels have co-authored and produced a recently released book on brewing smoked beers as part of Brewers Publications Classic Beer Style Series. Larson is co-founder, with his wife Marcy, of Alaskan Brewing Co. in Juneau. Daniels, who lives in Chicago, has written four books on beer and brewing. "Smoked Beers" covers the history and evolution of the use of smoke in food and drink, how smoke flavors are perceived as well as recipes for using smoked beers in recipes. The publication costs $14.95. Sundries Dobson Communications Corp., which serves Cellular One customers in Fairbanks, Juneau, Ketchikan and Sitka, is seeking applicants for its ongoing Pride scholarship program. High school seniors who live in the Dobson Communications service area are eligible to submit a written application for the $1,000 awards. Applications are available at (www.dobson.net). Applications from high school-age students are being accepted for the Alaska Native Youth Media Institute until April 30. Created by Koahnic Broadcast Corp.’s Training Center, the institute endeavors to introduce Alaska Native and Native American youth to career options in media. For additional details, contact Marie Jeno at 907-258-8924.  

Movers & Shakers April 8, 2001

Nathaniel Rutter, a geologist, will be the keynote speaker for the University of Alaska Fairbanks commencement and one of four honorary degree recipients recognized during the ceremony May 13. Rutter recently was chosen a fellow with the Arctic Institute of North America and is professor emeritus at the University of Alberta in Canada. Other honorary degree recipients are Poldine Carlo, an Alaska Native leader and founding member of the Fairbanks Native Association; Art Buswell, former UA administrator and horticulture professor; and Richard Osborne, social anthropologist and medical genetics educator. Susan Wright Mason, a partner in the Anchorage law firm of Dorsey & Whitney LLP, has become of counsel to the firm. Mason specializes in health care law. Ethan Schutt, Tom Dosik and Jeff Jarvi have joined the firm’s Anchorage office. Schutt concentrates his practice in commercial transactions. Schutt formerly served as a law clerk to Alaska Supreme Court Justice Walter Carpeneti. Dosik concentrates his practice in commercial transactions and litigation. Dosik formerly served as a trial attorney in the Tax Division of the U.S. Department of Justice in Washington, D.C. Jarvi concentrates his practice in litigation. Both Dosik and Jarvi formerly served as law clerks for Alaska Supreme Court Justice Warren Matthews. Northrim Bank has promoted Janet Holland to facilities officer. Holland manages the bank’s purchasing program and vendor relationships and supervises the bank’s courier staff. Holland, who joined the bank in 1999, has more than 25 years of banking experience. Herman White has been promoted to consumer and small business loan officer in Northrim’s credit administration department. White has more than seven years of financial industry experience. White joined the bank in January. Brandy R. Niclai has joined First Union Securities as a financial advisor. Niclai previously worked as human resources manager for Wave Wholesale Co. in Anchorage. W. Michael Stephenson and Andrena L. Stone have become shareholders in the law firm of Jermain, Dunnagan & Owens PC. Stephenson, with the firm since 1992, practices in the area of public construction, primarily representing school districts and Native housing authorities. Stone has been with the firm since 1994. Stone’s practice is concentrated in the area of education law. Matthew Singer joined Jermain, Dunnagan & Owens following a clerkship for Alaska Supreme Court Justice Alexander Bryner. Singer practices in the areas of civil litigation and corporate and business law. Mark P. Melchert rejoined the firm after spending two years in Africa. Melchert’s practice areas include commercial transactions and litigation, and corporate and business law. First National Bank of Anchorage has appointed Bernard Jackson vice president in the bank’s property department located in Anchorage. Pam Wentz was selected vice president at Fairbanks’ Interior City branch. Chris Neros was appointed vice president at the Sitka branch. Jenny Street will serve as assistant vice president at the Golden Valley branch in Fairbanks. Other Anchorage area appointments included: Stephen Dick, loan officer in the commercial loan division; Rita Hendriks, trust officer in the trust department; Charles Hodges, data operations officer in the electronic data processing division; Carol Hovanec, loan servicing officer in the loan servicing division; Barry Jackman, loan officer in the branch lending and administrative division; Sue Johnson, assistant personnel officer in the human resources department; Dawn Lowrie, Community Reinvestment Act officer in the corporate systems division; D’Ava Marsh, loan processing officer in the corporate systems division; and Michael Studstill, assistant cashier in the branch operations support department.  

The Foraker Group helps nonprofit organizations stretch dollars

When I was a child I figured out that if my friend and I pooled our toys, we would both have twice as many toys. Since we got along well together and had similar interests, sharing allowed each of us to have a much larger toy box. Later I noticed that the oil companies operating at Prudhoe Bay had come to a similar conclusion, though their "toys" were much larger and more complex than my childhood things had been. The operators follow a practice called "shared services" under which some essential functions are performed by employees available to multiple companies. Sharing services where possible allows more cost-effective exploration and development activities, providing important savings for all participants. Ultimately shared services result in increased production at a lower cost. And, by keeping costs down, they increase state revenues and thereby benefit all Alaskans. Those oil field initiatives led to formation of a new kind of "shared services" organization unveiled earlier this year -- The Foraker Group. This new and innovative nonprofit entity borrows on the concept of pooling resources. The Foraker Group will put high-quality management and consulting services within the reach of even the smallest nonprofits. The Foraker Group was launched with major support from Phillips Alaska Inc., BP Exploration (Alaska) Inc., the Rasmuson Foundation and the United Way of Anchorage. Foraker President Dennis McMillian says the new organization will help nonprofits make the best use of their philanthropic resources and operate more efficiently than was possible by working alone. McMillian doubles as executive director of United Way of Anchorage. Grants are the lifeblood of nonprofit groups. But securing grant funds isn’t easy, especially in Alaska. Mining the money requires knowledge of foundations both here and in the Lower 48. It also requires skill in developing and writing proposals, and the ability to persevere and succeed even when projects aren’t funded by targeted foundations. In some cases the nonprofits will be able to focus on the things they do best -- like providing services to the community and raising revenues within their own networks -- while the Foraker Group pursues funding sources from afar and provides overhead support from professionals they couldn’t otherwise afford. When funding efforts are more likely to succeed through joint efforts, McMillian and his consultants will broker the necessary relationships and work with the organizations as they approach foundations. The possibility of improving effectiveness through shared services exists in many areas. To cite just one example, the Foraker Group will help nonprofits plan and prepare for technological changes and advances. These days computers are as essential for nonprofit organizations as they are for businesses. But nonprofits can’t afford a new computer system every few years. The Foraker Group will give them access to a specialist who can help them analyze and plan for their technology needs. The consultant will advise them on ways to get financial aid to purchase new equipment and software when they are needed. He or she will also look for opportunities for several nonprofit organizations to share their technology capabilities and their costs. Pooling resources and building cooperative relationships is an established way to save money and work more efficiently. We’ve proved it works in the oil patch and are delighted to see the concept applied in this area of special need. Nonprofit organization leaders should get to know the people at The Foraker Group. McMillian and his team can help stretch your valuable donor dollars and give you the best chance possible for a productive future serving the people of Alaska. Nancy Schoephoester is manager of philanthropy and community services for Phillips Alaska Inc.

Native corporations prove their mettle

JUNEAU -- Alaska Native corporations have become powerful engines for the state’s economy, the president of one of the most successful of the state’s Native regional corporations told business leaders and legislators in Juneau. A study of the 12 Alaska-based regional corporations and three of the largest village corporations released March 20 shows that those corporations had revenues of $2.1 billion and assets of $2.8 billion, said Carl Marrs, president of Cook Inlet Region Inc. of Anchorage. Assets do not include the value of the approximate 44 million acres of land owned by Alaska Native corporations, Marrs said. The survey was sponsored by the Association of ANCSA Regional Corporation Presidents/CEOs Inc., an association of the regional corporations. The corporations paid $49.5 million in dividends to shareholders, most of whom live in the state, and through business and industrial subsidiaries employed 10,000 workers in the state and made charitable contributions of $8.6 million during the year, Marrs told a combined meeting of the Alaska State Chamber of Commerce and the Juneau Chamber of Commerce March 29. The survey understates the contribution of Alaska’s Native corporations because it includes only three of 229 village corporations and does not include nonprofit social service corporations that are affiliated with the for-profit regional corporations, Marrs said. Marrs estimated that if the employment and spending of the nonprofit and other village corporations were included in the study, their economic contribution would be about equal to that of the corporations included in the study. Alaska Native-owned regional and village corporations were formed with the passage by Congress of the Alaska Native Claims Settlement Act in 1971. The settlement of aboriginal land claims included a transfer of about 44 million acres of land and $962 million in cash to the regional and village corporations. Resolution of the issue cleared title to Alaska land and, among other economic developments, cleared the way for construction of the trans-Alaska oil pipeline and the start of oil production on the North Slope in 1977. Much of the revenue earned by the corporations is from business activities in other states. "We earn money down south and bring the profits home," Marrs said. Revenues and earnings of the 15 corporations in the study have grown substantially in the last 10 years, he said. "Some corporations will do well in any given year and others won’t, but taken together there has been a dramatic increase in earnings and growth in equity since 1990," Marrs said. "Net income will go up and down, and some corporations report what look like big losses in a given year because they have aggressive depreciation schedules when they write down assets," he said. But the more significant figures to look at are growth in total equity of the 15 corporations, which has almost doubled since 1990 from about $1 billion to almost $1.9 billion, Marrs said. That said, combined net income among the 15 has grown 98 percent from 1990 through 1999, he said. "The year 2000 was a great year for CIRI but wasn’t so good for some others. But they’ll come back," Marrs said. "We’re all in diversified lines of business, and we’re here to stay." Alaska Native corporations face special challenges that are not shared by traditional business corporations. "We are trying to weave a new corporate culture in with a traditional culture based on subsistence," he said. Because the vast majority of shares are held in blocks of 100 shares and can’t be sold, at least now, management of the corporations attempt to deliver benefits that are shared equally, in the form of dividends. Over 10 years, about $500 million in dividends have been paid by the 15 corporations in the group surveyed. Despite the financial success of many Native corporations, there are still serious social and health problems that affect Alaska Natives, the report noted. "We can help deliver employment, training and dividends, but we can’t solve all of the problems," Marrs said. "By becoming profitable we build our equity base and can use our financial strength in Washington, D.C., and Juneau to bring improved education and health benefits to our shareholders. That’s a bigger part of our success." Nonprofit Native corporations which run many of these social and health programs are also important employers. Collectively they employ 10,000 to 12,000 people, he said. Several Native corporations, not including CIRI, also have formed "8-A" minority corporations to do business with the federal government, most of it outside Alaska, Marrs said. These initiatives bring in about $750 million a year in earnings, the vast majority of it from outside the state, he said.  


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