Posted Wednesday, September 12, 2018 - 10:42 am
The people we elect will either manage the state’s assets wisely or continue profligate spending, wasting our resources.
Alaskans bear the highest unemployment rate, 7.3 percent, in the United States. We are in the third year of a self-inflicted recession. We’re missing the national Trump recovery because we have a governor and Legislature without a plan for a successful economy. They don’t know how to get us out of this recession. I do.
As a banker and student of economics for decades, I understand consumer spending accounts for 70 percent of a state’s economy. The governor and Legislature cut dividends in half for the last three years. We had the money. The funds didn’t go to government services. They should have gone to the private sector, creating jobs throughout Alaska.
The Permanent Fund Dividend program is a conservative, return on investment enterprise, uniquely Alaskan. We thought we protected the Fund and the dividends in the Constitution by passage of the amendment setting aside 25 percent of royalty income plus the earnings of the Fund.
But, the Legislature arbitrarily overrode the statutory dividend and cut another $1,050 per Alaskan, for the third year. That cost our economy another 2,000 jobs. Dividends are only paid on collected earnings held in the Earnings Reserve. We have nearly $19 billion in the Reserve including $2.7 billion set aside to pay lowered dividends and general fund expenses for this year. The Constitutional Budget Reserve has another $2.3 billion in spare change.
Cuts to the dividends weren’t used for operating expenses of government. They cut the heart out of small business. Alaskans’ personal economies suffered. I read financial statements and I’m horrified by what I read. In fiscal years 2013 and 2014, the Legislature gave $376 million to the Alaska Gasline Development Corp., an unbuildable pipedream. What a waste.
Consolidating agencies should be a key part of Alaska’s money saving strategy. Alaska Housing Finance Corp. and the Alaska Industrial Development Corporation, could free their combined net worth (not used for mission), of $2.8 billion dollars. Gov. Bill Walker awarded a study to Boston Consulting Group for over $800,000 to study consolidation. Then buried it. That further demonstrates that costs are out of control, even under two different governors and many different legislators.
The duplicity of most legislators and the governor is astounding. They tell you that Alaska had a 2017 budget deficit of $2.4 billion dollars. If you read the fiscal year 2017 Comprehensive Annual Financial Report, you will find that Alaska had a $3.9 billion surplus. That’s like having a million in your savings account earning $100,000 while your checking account is overdrawn. Count only checking, you have a deficit. Count all the money, you have a surplus. Our Fund grew by $6.5 billion in fiscal year 2017 and by about $5 billion in the fiscal year 2018 just ended.
Our surplus will be even greater. Our oil income will be up almost $1 billion in fiscal year 2019 due to the rise in price and 30,000 barrels per day in new production through ConocoPhillips at Greater Mooses Tooth-1 and 12,000 barrels per day from Hilcorp at Moose Pad in the Milne Point unit.
Earnings of the Permanent Fund and our recovering economy can and should fund both full dividends and protect education and public safety. Dividends are the private sector way to capitalize hundreds of small businesses. We need to implement a vision that grows the Alaskan economy.
It was my honor to chair the statewide campaigns that elected or reelected Presidents Ronald Reagan, George H. W. Bush and Donald Trump. I also ran the campaign in 1999, Alaskans Just Say No, which stopped the last raid of the Alaska Permanent Fund. We won that campaign 83 percent to 17 percent. The public understood the raid and said no.
If your legislator told you we had a $2.4 billion deficit, ask about the $6.55 billion in earnings of the Permanent Fund in 2017 that they were not counting in order to concoct the deficit. That’s how they’re cooking the books. Some Legislators just want more money. They want to increase oil and mining taxes. And they want a personal income tax. We have the earnings to manage our resources wisely, within a spending cap.
Dividend cuts cost our economy consumer spending of $4,300 per person in the last three years, devastating our private economy. We can end Alaska’s recession with restitution of the 2016 and 2017 cuts and full payment of the 2018 amount statutorily required. Economists agree.
Legislative inaction just cost us another 2,000 jobs. Join me in demanding a special session, called by the Legislature prior to the General Election, to correct their unjustified and injurious cuts to our dividends. The money is in the bank today. The public has a right to know which candidate is your Permanent Fund Defender or Permanent Fund Spender. Find out and vote accordingly.
Jim Crawford is the former president of the nonprofit Permanent Fund Defenders. He also served Governor Hammond as a member of the Investment Advisory Committee which formed the investment and corporate strategy of the Alaska Permanent Fund Corp. in 1975. He is a candidate for Senate District I (Spenard and Midtown, U-Med District in Anchorage)
Posted Wednesday, September 12, 2018 - 10:42 am
With everyone in Alaska’s crowded gubernatorial race for more oil and less crime, the candidates are trying to highlight what separates them in the final two months before the Nov. 6 election.
The candidates took the stage together during a lunch forum held by the Anchorage Chamber of Commerce Sept. 10.
Democrat candidate and former U.S. Sen. and Anchorage Mayor Mark Begich set himself apart from independent Gov. Bill Walker, former Republican state Sen. Mike Dunleavy and Libertarian candidate Billy Toien by noting he is the only one in the crowded field supporting Ballot Measure 1, which would overhaul the state’s permitting requirements for development projects in salmon habitat.
Resource industry and development groups oppose the measure, contending it would add unnecessary time and cost burdens — if not outright stop some projects, particularly large mines — to a regulatory process that has worked well for decades.
Ballot Measure 1 sponsors, led by the nonprofit Stand for Salmon, insist the voter initiative would largely codify in law best practices already used by the Department of Fish and Game’s Habitat Division and insulate science-based permit evaluations from political influences.
They also note the initiative would add public notice and comment period requirements to what currently is one of the only public resource-use permits the state issues without such input.
Begich said the Alaska Supreme Court stripped the proposed law change of its most prescriptive language Aug. 8, when the court removed an outright prohibition on permitting substantial damage to salmon habitat, calling it mostly a “right to know” measure after the ruling.
“If there’s going to be a megaproject the public gets to be involved from a state perspective; they get to have comments,” Begich said.
Dunleavy said he “doesn’t know what’s going to become of Alaska” if policies such as Ballot Measure 1 are enacted because it will hamper the state’s ability to approve projects and create jobs.
Toien’s message was similar.
Walker noted that he is still opposed to the measure even after the Supreme Court removed the provision it deemed unconstitutional for usurping the Legislature’s authority to appropriate state resources..
He more generally characterized the voter initiative process as a “blunt instrument,” and said that the new requirements would add a new layer of unwanted permitting uncertainty.
“If there’s improvements that need to be made, let’s have that discussion in the proper forum and that forum is in the committee rooms in Juneau so everybody has an opportunity to weigh in and participate,” Walker said.
Begich responded to that by drawing attention to the fact that legislators did not act on House Bill 199 — very similar to the ballot measure — last session, but did pass House Bill 44 when it became clear another voter initiative aimed at tightening legislative pay and per diem allowances was gaining steam.
The Alaska Constitution allows a legislative action to nullify an initiative if the intent of the change is substantially similar to that of the voter proposal.
“The back-and-forth the governor talks about is a great idea, but where were these guys when the debate was supposed to be happening?” Begich questioned. “Why weren’t they talking about this? Instead, 45,000 people (who signed the Ballot Measure 1 petition) got a little upset about it. That’s how the initiative process works.”
A question as to how the candidates feel the state should deal with the aging Anchorage port — which despite decaying dock infrastructure is still the entry point for the vast majority of goods entering the state — also illuminated how they plan to tackle the state’s broader capital project and deferred maintenance issues.
It’s generally accepted among state politicians that the $100 million to $150 million the state has spent from the general fund on capital budgets in recent years is unsustainably low, particularly as the state’s deferred maintenance bill approaches $2 billion.
In this case, it was Dunleavy who departed the most from his main competitors, though they all stressed the obvious need for rebuilding the docks.
Port officials have said the reconstruction project will likely require more than $500 million in new money to complete. The Municipality of Anchorage is currently attempting to recoup some of the more than $300 million in federal and state funds used on the failed expansion project in a lawsuit against the U.S. Maritime Administration that was tasked with supervising the effort that was halted in 2010.
The former Wasilla legislator said the main question is whether the money should come directly out of the state’s General Fund for the city-owned port. He wants to see if private investors would be interested in putting money into the port.
“I believe that there are equity funds and there are pension funds that would like to invest in the Port of Anchorage,” he said, using the former name for the facility.
The Anchorage Assembly renamed it the Port of Alaska in 2017 to emphasize its importance to the state overall.
Port Director Steve Ribuffo said in a 2017 interview that municipal officials have discussed the prospect of attracting private capital to fund the work, but noted that option would likely raise usage fees to cover investment returns — fee hikes that would invariably be passed on to Alaska consumers.
On broader capital projects, Dunleavy said he would push for more thorough vetting of state-funded projects and wants to see municipalities share capital costs with the state, ideally on a 50-50 split whenever possible.
Walker and Begich said they prefer voter-approved general obligation, or GO, bond packages as a means of growing the capital budget with low-interest debt, a way to fund construction that is common for local and state governments nationwide.
Begich is floating a one-time, $2 billion-plus GO bond package that would be dispersed over six years. He said up to about $100 million in General Fund money the state already spends on direct capital appropriations could be used for annual debt service, meaning the plan would not require any new state money, stressing accountability in project success and a need to prevent legislators from slipping pet projects into the capital budget.
“Deferred maintenance just alone for the State of Alaska is enormous and we just continue to close our eyes and hope it will magically disappear; that’s not how you do it,” Begich said.
Walker noted the latest capital budget included $20 million for the Port of Alaska on the expectation the municipality, which settled several lawsuits against contractors who worked on the project for just less than $20 million in January 2017, would provide matching funds.
He also said now that the state is using Permanent Fund earnings to greatly reduce annual deficits, which has also stabilized the state’s credit rating, it is time to revisit the $500 million biannual GO bond plan he submitted early in his tenure as governor but did was mostly ignored by the Legislature.
The governor called the port the “tip of the iceberg” of capital needs across the state.
“We have $1.8 billion of deferred maintenance that needs to be done across the state. It’s disappointing to me that the Legislature went through $14 billion of savings before we got to the SB 26 (Permanent Fund earnings) vote, which is unfortunate because that would’ve fixed literally every capital project across the state three times over,” Walker said.
Toien, the Libertarian, stressed that all state departments and quasi-government agencies and funds need to be put through a “comprehensive financial audit” and all revenue streams need to flow into the General Fund to get the best, true assessment of the state’s fiscal situation before any money goes to the port or any other major project.
Toien said he believes bringing “off-budget” revenues into the General Fund would also close the remaining roughly $700 million budget deficit that has been projected for the current fiscal year.
“I’m the only one addressing the comprehensive finances of the state, not just the corner called the budget or the (Constitutional Budget Reserve) and it’s because it’s necessary,” he said of his plan for balancing the budget.
Toien, in the unusual position of being the alternative fourth candidate in a race with an independent incumbent, closed his remarks with a pragmatic assessment of his situation.
“If everyone threw their vote away and voted for me I would win,” he said to a collective chuckle from the crowd.
Elwood Brehmer can be reached at [email protected]
Posted Wednesday, September 12, 2018 - 10:42 am
Alaska fishermen now have a little more leeway to borrow money from the state to pay for new permits, boats, licenses and other equipment.
House Bill 56, primarily sponsored by Rep. Dan Ortiz, I-Ketchikan, rewrites sections of the state’s Commercial Fisheries Revolving Loan Program to change the cap on allowable amounts of certain types of loans. Fishermen who want to buy individual fishing quotas, or IFQ, limited entry permits or gear can now borrow up to $400,000, an increase from $300,000.
Gov. Bill Walker signed the bill into law Aug. 31. Ortiz — who represents a district with a high proportion of commercial fishing and seafood processing jobs — said in a release from the Alaska House Majority Coalition that the bill helps resident fishermen get over the cost hurdle to enter commercial fisheries.
“By clearing away bureaucratic and economic hurdles, this bill moves us one step closer towards the goal of helping Alaskans reap the benefits of our sustainable commercial fisheries,” Ortiz said.
The House passed the bill in 2017, but it sat in the Senate Finance Committee for the remainder of the contentious and lengthy session before the Senate passed it in May 2018. Ortiz credited Sen. Gary Stevens, R-Kodiak, with pushing the bill through the Senate this year, despite most of the Legislature’s attention being focused on fiscal issues.
The Commercial Fisheries Revolving Loan Fund is coordinated through the Alaska Department of Commerce, Community and Economic Development and is only available to people who have lived in Alaska for at least two years. Fishermen can take out low-interest loans for up to 15-year terms to finance fishing-related expenses like vessel upgrades, gear purchases or permit purchases.
The $300,000 amount was set in 1982, Ortiz wrote in a sponsor’s statement to the Legislature. Adjusting for inflation in the 36 years since, that would be about $746,000 today.
Alaska fishermen have been facing steeper and steeper thresholds to entry in commercial fisheries over the years. Because of concerns about stock sustainability and overharvesting, Alaska established the limited entry system in 1972 for state-regulated fisheries.
The value of permits goes up and down depending on the value of the fishery, but can cost as much as $190,800 for a set gillnet permit in Prince William Sound or as little as $3,300 for a set gillnet permit for salmon in the Upper Yukon River, according to the Commercial Fisheries Entry Commission. That’s not counting boats, gear and fuel.
In 1992, federal regulators implemented a quota system for halibut that created IFQ for a similar reason — to preserve the stocks and slow down the fishery while still allowing harvest opportunity. The season now lasts from March until November compared to the “race for fish” in the past when the total harvest could be taken in just days.
However, the market-based value of those quota shares has increased so much that small, rural Alaskan fishermen have been pushed out by the cost of purchasing quota, causing significant disruption in those rural fishing communities even two decades later.
IFQs have been implemented in a variety of fisheries in Alaska including Bering Sea crab and pollock to achieve the goal of sustainability through limited entry. While that may work for some fisheries, it has shown negative consequences for smaller ones, according to a paper published in the Proceedings of the National Academy of Sciences in August.
Courtney Carothers, a University of Alaska Fairbanks College of Fisheries and Ocean Sciences professor who co-authored the study, said in a news release from the university that the study was meant to question whether a broadly applied fishery management tool like the IFQ system, also known as ITQ (individual transferable quotas) works for all fisheries.
“Social scientists have been frustrated by the assumption that ITQs are a simple solution for fisheries management across the world,” Carothers said. “We were excited to come together and evaluate some examples of where ITQs work, why sometimes they don’t work, and who is being impacted when an ITQ isn’t the right option for a fishery.”
She cited the halibut fishery in Alaska as an example, where some quota shares can cost up to $70 per pound. The paper suggests developing an “institutional diagnostics toolkit” to help fisheries regulators and officials gauge the impact of a measure before implementing it, based on the context of the fishery.
“Toolkits like this could be used in many governance settings to challenge users’ understandings of a policy’s impacts and help them develop solutions better tailored to their particular context. They would not replace the more comprehensive approaches found in the literature but would rather be an intermediate step away from the problem of panaceas,” the paper states.
The Legislature was considering another bill, HB 188, to address the same entry-cost problem. HB 188, sponsored by Rep. Jonathan Kreiss-Tompkins, D-Sitka, would allow up to three regions in Alaska to establish commercial fisheries trusts which would hold permits and temporarily transfer those permits to fishermen, essentially providing a middle step between being a deckhand and laying out a small fortune to buy an entry permit.
Introduced in 2017, the bill was last heard in February 2018 and referred to the House Labor and Commerce Committee.
Elizabeth Earl can be reached at [email protected]
Posted Wednesday, September 12, 2018 - 10:42 am
First they were underweight, with underwhelming numbers. Then they weren’t there at all. Then they were coming in late, showing up as Upper Cook Inlet fishermen were packing up their gear for the season.
The unpredictable and significantly smaller Kenai River sockeye run frustrated a lot of fishermen this year.
As of the last day of sonar counts on Aug. 28, about 1.03 million sockeye had entered the river. More than half of them arrived after Aug. 1, leading to a stop-and-start fishery that included significant time and area cuts for commercial fishermen in Cook Inlet and a complete sockeye salmon sport angling closure on the Kenai River from Aug. 4–23.
That resulted in a total catch of 813,932 sockeye, less than half of the Alaska Department of Fish and Game’s preseason forecast commercial harvest of 1.9 million sockeye.
Even the late fish arrival wasn’t much of a boon to the area’s commercial fishermen. Per the management plans, the East Side setnet fishermen are largely out of the water by Aug. 15, and the drift gillnet fleet is moved mostly to the west side of Cook Inlet to focus on silver salmon.
On Aug. 23, in response to late incoming fish passing the Kenai River sonar, The Alaska Department of Fish and Game opened Drift Area 1 — a broad fishing area between the Anchor Point Light and Kalgin Island in the middle of the inlet — to drifting.
Despite the opening and the numbers of sockeye passing the sonar in the river, fishermen only picked up 209 sockeye in that opening. By comparison, they picked up 1,105 silvers, which have reportedly been running well in Cook Inlet this year, despite the poor numbers of sockeye, king and pink salmon.
The managers were expecting the sockeye catch to be better, said Brian Marston, the area management biologist for the Division of Commercial Fisheries in Soldotna.
“We were hoping to get at some of those late fish,” he said. “We couldn’t open it up in Area 2 (closer to the mouth of the Kenai) … we just missed them.”
The silver run has been a little better than usual this year, providing a small extra buffer for fishermen. Most Kenai River sportfishermen have been switching from sockeye to silvers as well, with guides grateful that the silver run has been strong enough to support angler effort with a weak or closed sockeye fishery.
Biologists have been puzzling over what happened with the Gulf of Alaska sockeye this year. Weak king salmon runs weren’t uniform across the gulf, and since 2008, Alaskans have been adjusting to a reality with fewer king salmon in it.
But sockeye are normally plentiful, and this year presented some firsts. Chignik’s commercial fishermen, for example, never opened, earning a disaster declaration from Gov. Bill Walker before the summer was even over.
The poor runs of sockeye have happened in some rivers before, but the complete closure is a first for Chignik, said Bill Templin, the chief fisheries scientist for Fish and Game’s division of commercial fisheries.
Other fisheries have been seeing a late burst, like the Kenai, and the commercial fishermen have been able to take some advantage, such as the Copper River and in Kodiak. Those fisheries have been seeing a sharp underperformance in pink salmon fisheries, too, though, as they did in 2016 when a federal disaster was declared and for which $56 million was appropriated by Congress for impacted stakeholders.
So far, indications seem to point to ocean conditions unfavorable for survival. Research through the Chinook Salmon Research Initiative for the last five years has provided good tracking and life history data on ocean survival for king salmon, but the department hasn’t been doing the same kind of research for sockeye salmon, Templin said.
But even then, there are some mysterious snags — while one sockeye stock may have come back poorly this year, a neighboring stream would do just fine. Next door to the Kenai River, the Kasilof River’s sockeye run handily made its escapement goal this year with harvest and increased bag limits.
“Generally the freshwater conditions are pretty good, pretty consistent,” he said. “Ocean conditions seem to be driving a lot of it.”
In the case of the Kasilof, that may be because the main cohort for that river is largely four-year-old fish as opposed to five-year-old fish being the norm on the Kenai, Marston said. The department staff will do more analysis after the season about the run, but so far it looks like the fish caught were for the most part smaller than usual.
The Kasilof River escapement goal for sockeye was exceeded in part because of concerns for the Kenai run that restricted the commercial fleet. More fish escaped into the Kasilof, so even though the run itself wasn’t that large, more fish made it into the river, Marston said.
Some fishermen have still been out harvesting silvers, but in a fishery that depends almost entirely on sockeye for the majority of its value, this season was a hard one for Upper Cook Inlet fishermen.
“It’s hard to make (that sockeye catch) up,” Marston said.
Posted Wednesday, September 12, 2018 - 10:42 am
The backers of the Stand for Salmon ballot initiative well understand the power of pitting Alaskans against quote-unquote Outsiders.
The phrase “foreign mining corporations” is used no fewer than six times on the “Get the Facts” page on their website.
One particularly strident sentence reads: “In order to protect our Alaskan way of life, we need to support this initiative and not buy what the dishonest foreign mining corporations have to sell.”
Stand for Salmon Campaign Director Ryan Schryver used the occasion of a minor fine against the measure’s opponents to accuse them of trying to fool voters by not adding the words “Vote No on One” to their organization’s Stand for Alaska name promptly enough after the initiative was certified in March.
“They have to create distrust and confusion to be successful,” he told the Anchorage Daily News.
That is a particularly rich charge for an organization that created the ultimate bumper sticker slogan to promote its ballot measure.
While the Stand for Salmon proponents attempt to paint the opposition as foreign interlopers into Alaska’s affairs, they are hardly being transparent when it comes to the source of their funding.
The top contributors include the Alaska Conservation Foundation, the Alaska Center, Cook Inletkeeper, the Wild Salmon Center and Salmon State. The initiative itself was crafted by environmental law firm Trustees for Alaska, which is well known for its legal activism against resource development in the state.
According to campaign disclosures, about $730,000 of the $1.1 million in reported contributions to the effort are classified as non-monetary, with the Alaska Center topping the list at $357,000 followed by the Washington, D.C.-based New Venture Fund that employs Schryver at $227,000.
Cook Inletkeeper is next at about $83,000 in non-monetary contributions to the effort.
If money from outside the state is dirty, then all these groups with “Alaska” in their names hardly have clean hands.
Trustees for Alaska lists 14 foundations as its top donors in its 2017 annual report, with only one having any staff based here and that one, the Leighty Foundation, was founded by a family from Waterloo, Iowa, but reported a Juneau address in its most recent IRS Form 990.
The 14 most recent 990s for those groups show about $339,000 in donations to Trustees for Alaska.
The Venn diagram of Trustees for Alaska foundation donors overlaps nearly perfectly with those to the groups backing the Stand for Salmon initiative.
The Alaska Center received $255,000 in donations from the same foundations that back Trustees for Alaska in the most recent year according to the Form 990s.
It has also received another $245,000 from the New Venture Fund for a total of a half-million dollars in “Outside” money in the most recent year forms are available.
Cook Inletkeeper received about $260,000 in donations from the New Venture Fund and the Trustees for Alaska foundation donors.
These 14 foundations collectively hold about $463 million in assets according to their most recent 990s, with the New Venture Fund adding another $230 million for nearly $700 million total.
What these groups have in common is their fight against resource development of all kinds in addition to the money that insulates them from the consequences of the policies they are trying to implement around the country.
All the groups with Alaskan addresses are a handy vehicle to carry through money in order to advance the goals of these non-Alaska foundations, with the added benefit of those organizations not having to disclose how they are contributing nearly three-quarters of a million dollars in “non-monetary” resources to an effort that will undoubtedly cost the state jobs if it passes.
As just one example, the 444 S Foundation based in Bellevue, Wash., donated $115,000 to the Alaska Center and $60,000 to Trustees for Alaska in 2016, with another $100,000 to the New Venture Fund.
What is the 444 S Foundation? Besides being endorsed by the Sierra Club, Code Pink and the socialist Working Families Organization, its executive director is Fred Munson, who is also a member of the Arctic Defense Fund advisory council, which dispersed funds to support the “kayaktivists” who blockaded Shell in Seattle in 2015 and later hung from bridges in Portland trying to prevent its outer continental shelf drilling.
Arctic Defense Fund was created by the Rockefeller Foundation’s Sustainable Market Solutions, whose principal officer is Jay Halfon, a professional litigator for Earthworks and well known “frackivist” leading the fights against the U.S. energy boom in natural gas.
The point is not that there is anything wrong with these foundations contributing their money to the causes they support. And to be clear, their opponents have vastly outraised Stand for Salmon by a 9-1 margin so far.
Rather, it is disingenuous to the nth degree for the supporters of Stand for Salmon to attack the companies that are being completely open about their donations while theirs come from groups in Boston, New York, DC and San Francisco who belong to the “keep it in the ground” movement that are rightly distrusted by those who live and work here.
Admitting they take money from outside foundations as a means to even up the odds, even slightly, would at least be an honest argument.
But that’s probably too much to expect when it comes to politics.
Andrew Jensen can be reached at [email protected]
Posted Wednesday, September 12, 2018 - 10:41 am
Alex Slivka was appointed as the chief fiscal officer for the Municipality of Anchorage, effective Oct. 15. Slivka comes to the municipality from McKinley Capital Management LLC, where he served in various leadership capacities. Slivka has more than 35 years of experience in the financial industry and is an active member of a number of community organizations.
The Mat-Su Health Foundation has hired Colleen Andrews and Bailey Larousse to support the work of its R.O.C.K. Mat-Su (Raising Our Children with Kindness) collaborative project. Andrews is the organization’s social connections coordinator, and Larousse serves as youth leadership coordinator. Andrews is responsible for identifying, inventorying and promoting a robust and updated database of local social and recreational activities. The database is housed within Connect Mat-Su, a new community resource center network recently established by the Mat-Su Health Foundation. Andrews has previously held positions in corporate compliance, human resources and administration. She earned an associate’s degree in business management from Everest University. Larousse is an AmeriCorps member assigned to and funded by the Mat-Su Health Foundation and serves as youth leadership council coordinator for R.O.C.K. Mat-Su. She is responsible for creating a youth leadership council and managing training, enrichment, and outreach for council members. She also works to enhance collaborations with other non-profits and coalitions surrounding youth voice and issues. Larousse graduated from Mat-Su Central School in 2018 and is attending University of Alaska Anchorage.
The Alaska Public Interest Research Group hired Veri di Suvero as executive director. di Suvero will focus on engaging citizens across Alaska on public interest and consumer protection issues, including net neutrality, Census 2020 and redistricting, and utility efficiency. di Suvero has worked with various community and governmental stakeholders on Alaska Native language revitalization as well as language access policy with the Welcoming Anchorage initiative. AKPIRG was founded in 1974 as a non-profit, non-partisan, citizen-oriented statewide organization focused on researching, educating, and advocating on behalf of the public interest.
John Hall’s Alaska was named “Most Outstanding Small Group Tour Provider 2018” by Corporate Vision Magazine. For more than 35 years, family-owned, family-operated John Hall’s Alaska has provided an authentic Alaska experience by land, air and sea. By limiting all tours to 28 to 42 passengers, John Hall’s Alaska gains access to remote parts of the state and allow John Hall’s Alaska to cater to the individual traveler’s needs and desires. Although John Hall’s Alaska is best known for its Signature Series “Untamed Alaska,” Denali Explorer” and “Grand Slam Alaska,” tours, the company also offers group tours as part of its Alaska Highway Experience, Adventure Series and Winter Series. In response to client feedback and the growing popularity of winter travel, John Hall’s Alaska now offers two 2019 winter itineraries that include winter adventure days and up to seven nights of northern lights viewing.
Alaska USA Federal Credit Union has selected Sharlyn Ruyan for the position of vice president, Member Service Center. Ruyan has worked at Alaska USA for more than nine years, most recently as manager, Member Service Center. She is a graduate of the 2017 Victor Valley Chamber of Commerce Leadership program. Alaska USA Financial Planning and Investment Services’ Michael Klopfer, who has more than 15 years of experience, has earned his Certified Financial Planner designation. The CFP mark is recognized as the highest standard in personal financial planning. Investment advisors who earn the CFP have met the rigorous requirements of the CFP Board and set the standard for responsible and ethical financial planning.
Posted Tuesday, September 11, 2018 - 12:33 pm
A lawsuit challenging the constitutionality of a state law to pay off nearly $1 billion in oil and gas tax credits has slowed to a crawl as attorneys squabble over whether or not a jury should decide the matter.
Former University of Alaska Regent Eric Forrer requested a jury trial July 19 in the public interest lawsuit he filed May 14 against Gov. Bill Walker’s administration with the Juneau District of state Superior Court.
The request has resulted in each side filing multiple briefs in the debate over a trial, exemplified by the latest in the series filed by state attorneys Aug. 20 entitled, “Defendants’ Reply to Plaintiff’s Response to Defendants’ Motion to Strike Demand for Jury Trial”.
That filing, signed by Assistant Attorney General Bill Milks, contends the issue at hand is a matter of the reading of law and therefore is not eligible for determination by a jury of 12.
“This case is a facial challenge to a statute. A jury cannot determine what the words of a statute mean. A jury cannot determine what the words of the Alaska Constitution mean. Those are questions of legal interpretation solely within the authority of the judiciary,” Milks wrote.
He continued to note that House Bill 331, the administration-sponsored legislation authorizing the bond sale that passed June 20, has not yet been implemented. The Department of Revenue has not sold any bonds yet.
A bond sale was originally planned for sometime in August, but Deputy Revenue Commissioner Mike Barnhill said in June that the administration would hold off on marketing the bonds while the lawsuit progressed.
Barnhill referred questions for this story to the Department of Law; officials there did not respond to requests for comment.
Pushing ahead with the sale during the litigation would undoubtedly increase the state’s cost of borrowing greatly and damage the underlying economics of the plan to pay off the credits with borrowed money while not incurring additional costs.
Under the plan, the companies and banks holding credit certificates would take a up to a 10 percent discount on the amount they are owed to get the money right away and thus insulate the state from borrowing costs.
Forrer filed the lawsuit on the belief that such sale would violate the Alaska Constitution, which has tight sideboards on what the state can incur debt for and how it must be done.
The state Constitution generally limits the Legislature from bonding for debt to general obligation, or GO, bonds for capital projects, veterans’ housing and state emergencies. In most cases the voters must approve the GO bond proposals before the bonds are sold. State corporations can also sell revenue bonds, but those are usually linked to a corresponding income stream and only obligate the corporation to make payments, not the State of Alaska as a whole.
Legislative Legal Division attorneys in an April 13 opinion questioned whether the Alaska Tax Credit Bond Corp. — that HB 331 authorizes Revenue Commissioner Sheldon Fisher to set up — would truly have a revenue stream that could pass legal muster given it would rely on annual legislative appropriations to fund the debt payments.
Administration officials contend the plan is legal because the 10-year bonds would be “subject to appropriation” by the Legislature, which the bond buyers would be aware of, and therefore would not legally bind the state to make the annual debt payments.
Forrer’s attorney, Joseph Geldhof said in an interview that they are not trying to “slow roll” the legal process by asking for a jury trial to further delay a bond sale, but rather insisted the state’s attorneys have been “enormously uncooperative” and have not engaged in the typical case process.
Geldhof emphasized that the Department of Law has not yet filed an answer to the original May 14 complaint or a July 19 amended complaint.
“They won’t even admit, for example, that the tax credits are not a form of debt,” Geldhof said.
What exactly the tax credits are and how they should be treated is one of several similar material facts that should be decided by a jury, according to Geldhof.
He wrote in response to the state’s motion to strike the trial request that without an answer to the complaint or resolution of the facts in the cast that it’s too early for Judge Jude Pate to rule on the trial motion.
The state has “steadfastly ignored” the insistence that there are factual issues to resolve in the case, according to the Aug 8 response to the state. Geldhof argued that if the facts of the case can be settled, both sides could move for summary judgment, but that hasn’t happened yet.
Forrer wrote in an Aug. 9 affidavit that Revenue Commissioner Sheldon Fisher and other state officials have referred to the bonds as an “obligation” of the state as well as “subject to appropriation” and “revenue” bonds, thereby clouding how they should be viewed relative to constitutionality issues.
Forrer also stressed that it’s unclear what entity would be responsible for repaying the bonds, the State of Alaska or the Tax Credit Bond Corp., which could go a long way towards determining what would happen to the state’s credit rating if the Legislature eventually opted not to make the bond payments.
“Representatives of the state have not explained how, if the credit of the state is at risk, the faith and credit of the state is not implicated under HB 331,” Forrer wrote. “In fact, the bill does not include express language stating that the faith and credit of the state will not be pledged.”
Judge Pate has not yet ruled on the state’s June 25 motion to dismiss — based on the failure to make a claim for relief.
Geldhof made a request for oral arguments on the state’s motions to dismiss and the opposition to a jury trial Aug. 23.
Regardless of the outcome in Superior Court, the case appears primed for an appeal to the Alaska Supreme Court.
Elwood Brehmer can be reached at [email protected]
Posted Monday, September 10, 2018 - 4:15 pm
Two out of three ain’t bad, but there is still a lot of work ahead for the Alaska Gasline Development Corp.
The state agency in charge of putting together the $43 billion Alaska LNG Project signed a gas sales precedent agreement with ExxonMobil on Sept. 10, meaning two of the three major North Slope natural gas holders have now agreed to key gas pricing and volume terms with AGDC.
Those exact terms are confidential, but Gov. Bill Walker said in a formal statement the agreement “means Alaska is one step closer to monetizing the North Slope’s vast and proven natural gas resources.”
ExxonMobil operates the Point Thomson gas field and holds a 62 percent stake in the unit (with BP owning nearly all of the remaining share), which sits east of Prudhoe Bay on state land near the edge of the Arctic National Wildlife Refuge. The company also holds a 36 percent interest in the Prudhoe Bay field. With roughly 28 trillion cubic feet of gas available from Prudhoe and another 8 tcf in Point Thomson, ExxonMobil has rights to nearly 15 tcf of North Slope gas.
“This precedent agreement is good for Alaska and ExxonMobil and represents a significant milestone to help advance the state-led gasline project,” ExxonMobil Alaska President Darlene Gates said in an AGDC release. “As the largest holder of discovered gas resources on the North Slope, ExxonMobil has been working for decades to tackle the challenges of bringing Alaska’s gas to market.”
The announcement with ExxonMobil means ConocoPhillips is the only major North Slope producer to not yet sign a preliminary gas deal with AGDC.
BP and AGDC reached a similar agreement in early May on binding price and volume terms; however, there are numerous finer financial and technical points to be addressed before final gas sales agreements are signed.
ExxonMobil’s gas sales precedent agreement — like BP’s — calls for gas to be sold into to the large North Slope gas treatment plant that would be the start of the 807-mile gas pipeline and LNG export project.
AGDC spokesman Jesse Carlstrom said the state-owned corporation is actively engaged in similar discussions with ConocoPhillips.
Department of Natural Resources Commissioner Andy Mack said in an interview that final gas sales agreements would likely be signed nearly in concurrence with a final investment decision on the overall Alaska LNG Project.
“It brings the firepower and brand name of ExxonMobil to the project,” Mack said as AGDC officials begin their major push to attract third-party investors to the project.
In a separate but related development, Mack and Attorney General Jahna Lindemuth also signed what is being called a “letter of understanding” with ExxonMobil and BP Alaska leaders on Sept. 10 to suspend key provisions of the 2012 Point Thomson Settlement Agreement as they work on Alaska LNG.
The letter removes the requirement for ExxonMobil, as the Point Thomson operator, to move forward with a plan to expand production at the field in a way that doesn’t jive with feeding the LNG project.
Before ExxonMobil signed the letter with the state, the 2012 Settlement Agreement signed by then-DNR Commissioner and current Sen. Dan Sullivan required the company to make a final decision on how to increase production at Point Thomson by Dec. 31, 2019.
Specifically, it prescribes that the company choose to either increase production at Point Thomson to more than 50,000 barrels per day of natural gas liquids, or condensates, and pipe up to 920 million cubic feet of natural gas per day into Prudhoe Bay, or simply grow condensate production to 20,000 barrels per day and reinject the gas into the Point Thomson reservoir.
The current Point Thomson facilities have a production capacity of about 10,000 barrels of condensates and 200 million cubic feet of gas per day. However, the technical challenges of producing gas from and reinjecting into the ultra-high pressure field have hampered ExxonMobil’s production ability.
A third, untenable option would be for ExxonMobil and BP to relinquish the leases back to the state, but that would seem unlikely given they spent upwards of $4 billion between 2012 and 2016 to develop the gas field in accordance with the settlement.
In July 2017, ExxonMobil submitted a long-range development plan to the Division of Oil and Gas outlining plans to pipe gas more than 60 miles to Prudhoe for injection into the oil field to aide in oil recovery. That plan was initially rejected, but eventually approved by state regulators.
Despite that, the Point Thomson development was always meant to feed a large gas project.
Some former state officials and Alaska LNG experts have questioned the economics of piping Point Thomson gas to Prudhoe.
Mack characterized all the settlement alternatives other than a major gas project as “suboptimal” for the state and the companies, noting the prospect of moving and injecting gas into Prudhoe is not as attractive as it seemed in 2012.
With the Sept. 10 letter, the state retains the ability to reinstate the 2012 Settlement provisions at any time, Mack said, stressing that the preferred option is for the companies to help the state be successful with the Alaska LNG Project.
“The whole idea is to redirect the (Point Thomson) project back to major gas sales,” he said.
If at some point state officials decide Alaska LNG is not going to be successful or ExxonMobil backs away from it, the settlement provisions can be brought back with a 30-month window for the company to comply.
Mack said the extra time — versus the 16 months between now and the end of December 2019 — is to allow ExxonMobil to restart its Point Thomson expansion engineering team and work out other related issues with the state.
The engineers that have been working on that project will hopefully be put towards advancing the Alaska LNG Project, he said.
Mack added that the gas sales precedent agreement and the letter “are definitely related,” noting the signing of the former is a significant show of commitment by ExxonMobil to the state-led LNG project.
“This is another critically important step, but there’s many more steps in this process,” Mack said.
Elwood Brehmer can be reached at [email protected]