Naomi Klouda

Opioid epidemic costs to Alaska topped $1 billion in 2015

Anyone who’s found their homes burglarized or their cars broken into or stolen is increasingly likely to be a victim of the opioid epidemic. Strewn in parking lot litter and on dog-walk pathways are the spent syringes from someone’s latest fix. Families of people lost in the epidemic suffer the greatest grief and the scale of the epidemic and its victims of all kinds cannot be ignored. That’s the acknowledgement at conversations to be taken up at town halls, the Alaska Federation of Natives and by government officials at this year’s fourth special session of the Alaska Legislature. According to a study released in March by the McDowell Group that seeks to quantify the economic costs of the crisis, the toll of drug abuse in Alaska totaled $1.2 billion in 2015 when measured in traffic collisions, health care, criminal justice and protective services, and public assistance. Alaska lost 128 people in 2016 from drug overdoses, the majority of which were from opioid classified drugs such as heroin and fentanyl. An estimated 2.6 million Americans suffer from an opioid addiction, with addiction rates rising nationwide. According to the Centers for Disease Control, 91 people a day die from opioid overdose. Yet, only one in 10 addicted are able to receive treatment. After Alaska Gov. Bill Walker declared the opioid emergency in February, a $5 million federal grant was immediately made available to supply 7,000 kits to administer naloxone shots. The kits were sent to every population hub in the state as part of Project Hope. Naloxone is a medication designed to rapidly reverse opioid overdose. It can very quickly restore normal respiration to a person whose breathing has slowed or stopped as a result of overdosing with heroin or prescription opioid pain medications. More than 50 lives were saved by the shots in the last eight months, said Andy Jones, the deputy incident commander of the opioid crisis at the Department of Health and Social Services, but tracking results is difficult due to the distribution that allows for anonymity. Other than the kits and the implementation of Project Hope – meant to support to those suffering addiction to help them on the path toward treatment – no expansion of treatment programs have yet occurred, said Rep. Matt Claman, D-Anchorage. Last week Sen. Lisa Murkowski made an appeal to President Trump to take specific actions after his own declaration of an opioid epidemic in August. Trump said on Oct. 17 from a press conference in the Rose Garden that he plans to unveil the federal response next week. The benefit of disaster or emergency declarations is the opening of federal funding that helps states in areas of treatment and temporary programs. In addition to Alaska, Arizona, Florida, Massachusetts, Maryland and Virginia all have declared an opioid emergency. Alaska State Trooper Lt. Steven Adams, with the statewide drug enforcement unit, said there’s no doubt most everyone is touched by the opioid epidemic. “I would venture to say the highest percentage of the public is affected either by knowing someone touched by addiction or you may be part of the public that is a victim of property crimes,” Adams said. “Of the property crimes that are solved, and we’ve been able to interview those subjects, it’s pretty clear the vehicle break-ins are going to addiction.” Retail property crimes carry an economic impact not often talked about. Adams said when stores experience what’s called inventory “shrinkage” through theft of high-priced items, they pass those costs to their customers. The biggest tally of economic loss, according to the McDowell Group study, was $542 million in lost workforce productivity. Drug abuse results in lost productivity when it prevents people from being employed or performing household tasks such as childcare. Lost productivity occurs because of premature death, reduced efficiency through physical or mental impairment, employment absenteeism and incarceration or hospitalization. The second largest cost is in traffic collisions at $396 million in 2015. About 40 percent of all traffic collisions were related to drug abuse, the survey concluded. Health care and criminal justice each cost $11 million due to drug abuse. A significant number of crimes can be directly attributed to drug abuse, the McDowell survey concludes. For example, driving under the influence, sale of illegal drugs, and many cases of assault, theft, and other violent and nonviolent crimes. The cost of these crimes includes criminal justice system costs - police protection and law enforcement, legal and adjudication, and incarceration — and the costs to crime victims. A portion of child protective services also are associated with drug abuse. (Available data used in the survey looked at the most recent years 2011-2015.) Jim Calvin, the principal manager on the McDowell Group study, said the opioid crisis has been accelerating to the point that the current economic impact won’t be known for years to come. “It’s hard to see what trajectory we might be headed toward,” Calvin said. “The landscape is changing here a bit on what these costs will look like. We don’t have a sense or a full measure of the economic impact, but the trend we know is of growing costs. We are in the billions now.” Rep. Claman gave a talk Oct. 17 to the Anchorage Rotary Club about Alaska’s current criminal justice issues and the drug epidemic. Claman is chair of the House Judiciary Committee and sits on the Criminal Justice Commission. His primary concern, he said, is the need for more federal funding to help combat the opioid crisis. “If we had more federal funding, we could increase the number of our treatment beds or hire more staff, or support efforts for better use of the treatment beds we have by not being empty for a period of time,” Claman said. The Salvation Army Clitheroe Center expansions is a logical step, he believes, a project supported by Anchorage Mayor Ethan Berkowitz. A $3 million grant could add significantly to the number of people allowed in for treatment by adding beds and staff. But another aspect of the problem, Claman said, are high losses in law enforcement officers since Alaska budget cuts starting gutting the Alaska State Troopers in 2014. City cuts in Anchorage under Mayor Dan Sullivan did the same kind of damage, he said. “We had 400 officers and were cut down to 328 officers; that’s nearly a quarter of the APD that was cut,” Claman said. “Now we are back with over 400 officers, but many may be in training or not fully operating yet.” Depending on the kind of grants Alaskan agencies request, there could be more public health resources to help officers as they respond to street incidents involving addicts.

Startups make their pitch at Launch Alaska Demo Day

A cyber attack that breached 143 million citizens’ credit information isn’t just a worst-case scenario. “That’s no hypothetical; it’s what happened at Equifax,” said Courtney Targos, pitching her startup Threat Informant Managed Services Oct. 13 at Launch Alaska Demo Day in the Beartooth Theatre Pub. The startup was one of four new business graduates of Launch Alaska’s 2017 cohort. 60Hertz, Helix and Attently also completed this year’s business accelerator designed to propel them toward success. Each pitched concepts to investors at the event. Threat Informant is an IT security firm developing an innovative managed security product, The Hyve, that will make information security accessible to all size companies. The giant Target retail chain has also had its cyber security breached, resulting in 180 million people’s private information exposed to unknown hackers. “What were the costs? Well, there were fines and penalties, a loss of trust from customers and worse — their brand was tainted,” Targos told a crowd of about 500 people at the presentation. Profits fell 46 percent for Target the same month as the breach. Yet, the other cost – preventing security breaches and cyber threats – is often out of reach for many business owners, she said. Security expenses can be a minimum of $250,000 a year, plus monthly fees. “Our team got together and thought we could fix this. The Hyve is the key. The Hyve uses automation to scale managed services and reduce costs,” she said. Co-founders Targos and Matthew Peters work with a tech-savvy team of ethical hackers, software analysts and programmers. Using a business model that is subscription-based, they can offer $10,000 per month fees to customers with 100 or more employees. That’s less than half the cost of other security companies. They can also work with on-demand professions such as incident response or network support. 60Hertz is addressing energy poverty in Alaska, the Arctic, and the developing world with finance opportunities and operations for small-scale microgrids. Piper Foster Wilder, co-founder with Whitney Gantt, noted that Alaska has 12 percent of the globe’s microgrids at work. This company’s goal is to offer turnkey microgrid operations for remote sites, from villages to remote camps. The company is led by the vision of reducing diesel dependence in rural Arctic communities for both humanitarian and economic reasons. “We partner with communities and industrial sites to provide financing aimed at energy cost reduction strategies such as integration of renewables and energy efficiency projects,” she said. Many microgrids in Alaska are “islanded” from roads, transmission lines and centralized distribution points. As a result, electricity costs four times the national average for many of the 200 villages, Wilder said. This creates a chain of energy poverty that can be solved through increasing renewables and decreasing diesel use. Another aspect is the job training available to employ people in their own microgrid maintenance and operation. The company makes socially oriented investment in remote electricity infrastructure, and offers its proprietary operations and maintenance software, Pinga, to support power plant operators globally. More cyber solutions Cyber security is certainly in the forefront in the tech innovations today. That Alaskans are solving key issues is an economic strength to celebrate, said Launch Alaska Managing Director Isaac Vanderburg. Helix has innovated a technology to protect your cash when you make credit card purchases. Co-founded by Tom Humphrey and Andrea Irving, this startup has created a unique mobile payment app and electronic card duo. It enables users to generate one-time use Visa Prepaid virtual account numbers, also known as VANs, instantly with the app. These VANs can be funded from their bitcoin wallet or bank account and be spent by swiping at any point of sale. “This is a product that puts consumers, for the first time, in charge of their own purchasing protection,” Humphrey said. “One-time use of VANs is the most secure method of payment today.” Yet another Alaskan technology wonder was created at Attently, founded by Eric Solie and Erik Talvi. This software company analyzes video of human audiences to determine both their demographic makeup and their emotional reaction to live content. Solie used the 500 people in the audience at the Beartooth Theatre Pub to demonstrate how it works. Based on emotional reactions and factual audience demographics, the software detected more men in the audience than women and a “mostly” receptive response. The numbers were demonstrated in graphs Solie’s software projected onto the large screen, showing ebbing valleys of lost interest and spiked moments of piqued curiosity. “This is an objective observer that creates transcription of what you said,” Solie explained. “Now you can stop pestering people with surveys that ask how you did. And you can stop asking yourself; you’re the most biased of them all.” With data uploaded, the information can be analyzed and used to improve training and other presentations. The audience analysis is presented via an online dashboard to the user to provide objective, granular feedback for any presentation and “correlates the two and tells you what you need to do,” Solie said. Launch Alaska The four-month mentorship came with $75,000 toward gearing up their businesses, and potential for up to $1 million from other investors. It gave each of these startups access to 50 mentors both nationally and locally, Vanderburg said. “There were numerous meetings during the course of the program to solve different issues. It’s an intensive curriculum based on the Lean Startup Methodology developed by Steve Blank at Stanford University,” he said. The Lean Startup provides an approach to creating and managing a desired product so that it gets into the consumers’ hands faster. The keynote speaker at the event was internationally-known Pipeline Angels founder Natalia Oberti Noguera. Inc. Magazine selected Noguera as one of “The Most Impressive Women Entrepreneurs of 2016”; included her in their list of “25 Latinas Who Shine in Tech,” and she was named to the Forbes list “Top 20 Women for Entrepreneurs to Follow on Twitter” and Fortune’s “55 most influential women on Twitter. On this first trip to Alaska, Norguera offered to hear startup pitches and mentor the next great ideas. She has set out to change the odds for women and minorities. “Diversification is integral to the evolution of the tech world,” she said. “It’s about creating that safe space to experiment and try things.” Launch Alaska has provided that for entrepreneurs, she noted. She hopes to contribute to success here through mentoring and offering resources from Pipeline Angles. The 2017 graduate-startups that have completed their work and are ready to open doors for business. They also will continue to gain investors in the coming year to grow in planned, scaled increments. Now the startups of 2018 is under selection to go through Launch Alaska’s accelerator, though announcements won’t be made until January. Choosing from a pool of 25 applicants, teams will be at work on three rounds of elimination and selection over the next two months, Vanderburg said. “Out of the 25 applicants, we’re going for up to 10; quality over quantity. If only three or four of those have a good chance of providing returns for investors than that is the number we will select,” he said. The non-profit accelerator brings together entrepreneurs, members of the military, utility operators, researchers and thought leaders to work toward a shared vision of Alaska as a thriving innovation and entrepreneurial hub, Vanderburg said. From drones to climate change mitigation, and from electrical grids to cyber security, Alaska holds value and experience that a growing entrepreneurial ecosystem is beginning to capture, he said. “This is an incredibly exciting time and momentum,” he said. ^ Naomi Klouda can be reached at [email protected]

After large rate cut, Premera pushes open enrollment period

A 45-day open enrollment on the federal health care exchange begins Nov. 1, and despite confusion surrounding the Affordable Care Act, several factors that brought down the cost of health insurance in Alaska for those shopping on the individual market this year promise to strengthen the state’s health care market. But it’s a short window this time that ends on Dec. 15. That’s the message of licensed insurance producers such as Joshua Weinstein of Northrim Benefits Group/RISQ. He has helped people enroll on the open market exchange since the ACA launched in 2014. “We let people know that the political climate in Washington, D.C., has been uncertain since the beginning of the ACA, yet with Republicans in full control, the ACA remains popular to Americans,” Weinstein said. “The ACA isn’t gone. There probably will be changes.” Alaska’s only company on the insurance exchange is Premera Blue Cross-Blue Shield, which lowered rates by 26 percent going into 2018. Alaska also is in the unique position as the recipient of what’s known as a Section 1332 innovation waiver, referring to that part of the ACA, with a strategy to reduce rates by isolating high-cost conditions away from the more generally healthy individual pool. Weinstein said 9 out of 10 people qualify for the tax credits that bring down the cost of their health insurance. During registration, consumers are helped selecting plans and find out if they qualify for the tax credits. People who aren’t offered insurance through their jobs and aren’t covered by a government program have to purchase it through the exchange. Those who don’t are subject to the individual “mandate,” which requires a penalty payment to the IRS if one does not have approved coverage during all or part of the tax year. President Donald Trump signed an executive order soon after taking office that loosens the IRS enforcement of the mandate. “The individual mandate is still in the law and still applies. What’s changed is that the IRS has been given discretion through the executive order as to how stringently it enforces the mandate,” said Premera communication manager Melanie Coon. “We encourage people to enroll in 2018 coverage because premiums are lower next year, and people would have to wait until the next open enrollment period if they wait (unless they have a qualifying event).” Qualifying events include changing jobs, turning 26 (in which case the person can no longer be covered through a parent’s insurance), getting married or having a baby. Alaska’s reinsurance program, originally state-funded with $55 million for 2017 and now to be about 80 percent covered by the federal government for the next five years, has garnered the spotlight as states consider ways to stabilize their individual markets. In 2016, the Alaska Legislature created a state-operated fund to cover all health care costs of people in the individual insurance market that had certain, traditionally high-cost diagnoses. By subsidizing the costs of individuals with diseases such as HIV/AIDS, cancer, and multiple sclerosis, among other conditions, the state was able to reduce the increasing cost burden on others in its market risk pool. “Open enrollment” is the period of time, once a year, to choose or change insurance plan options. Though consumers don’t have options to decide on another insurance provider, there are a range of monthly premium and annual deductible amounts for the upcoming calendar year to be selected. The push is on in part to bring costs down for the 18,000 people now on the Alaska health insurance exchange. Coons said Premera lost about 5,000 customers over the past year. “Some of this may have been due to expanded Medicaid coverage,” Coons said. After Premera raised rates by nearly 40 percent in 2015 and 2016, others in the individual market who don’t qualify for subsidies may have also dropped out because of the high costs that were nearly $1,000 per month for a “silver” plan. Alaska’s expanded Medicaid coverage grew to include an additional 35,000 people when Gov. Bill Walker used his executive authority to accept federal funds for the program, which at the time was for 100 percent of the cost of the new enrollees. That means about 184,000 Alaskans are now covered by Medicaid. An estimated 10 percent of the population remains uninsured, according to the Alaska Department of Health and Human Services. Medicaid expansion opened a new health coverage option for thousands of low-income, childless Alaskans between ages 19 and 64 who earn less than 138 percent of the federal poverty level (or an annual income of about $20,000 for a single adult). At least some of these are people who, Coons believes, may have formerly been covered on the exchange. It’s estimated that about 55 percent of all people on Medicaid are elderly and people with disabilities. Eligible children are covered by the Children’s Health Insurance Program, or CHIP, in Alaska through the Denali Kid Program. Mandate or not Enrolling on the open health care exchange under the ACA is required by a federal mandate. People fell into one of two camps under the mandate: either their employer must offer health insurance to employees and their children up to 26 years old, or the individual must supply coverage. People or businesses that didn’t follow the rule were penalized when filing their IRS forms, resulting in fees added to the tax bill or loss of exemptions. What happened to that? Earlier this year, the IRS quietly altered its rules to allow the submission of 1040s with nothing on line 61. The IRS says it still maintains the option to follow up with those who elect not to indicate their coverage status, although it’s not clear what circumstances might trigger a follow up, according to information provided by the IRS in the Wall Street Journal. “The change is a direct result of the executive order President Donald Trump issued in January directing the government to provide relief from Obamacare to individuals and insurers, within the boundaries of the law,” the article stated. The move has already raised questions about its legality, the WSJ article continues. Federal law gives the administration broad authority to provide exemptions from the mandate. But “it does not allow the administration not to enforce the mandate, which it appears they may be doing here,” says Michael Cannon, health policy director at the libertarian Cato Institute. “Unless the Trump administration maintains the mandate is unconstitutional, the Constitution requires them to enforce it.” The IRS notes that taxpayers are still required to pay the mandate penalty, if applicable. “Legislative provisions of the ACA law are still in force until changed by the Congress, and taxpayers remain required to follow the law and pay what they may owe,” the agency statement said. Whether that continues in 2018 or not is a gray area that awaits more clarity. Premera reads the mandate as still in effect, Coons said. Cuts to advertising The federal Centers for Medicare and Medicaid Services announced in early September that it is making large cuts in spending on advertising for the 2018 open enrollment period on the ACA’s health insurance exchanges, as well as significant cutbacks in funding for local organizations that help consumers navigate the buying process. Navigator organizations received $62.5 million from the federal government last year, but will get $36.8 million this year, a 39 percent cut, according to a fact sheet from the Centers for Medicare and Medicaid Services or CMMS. Overall cuts for the promotional budget to get people to sign up on the exchanges nationwide was cut from $100 million to $10 million, according to the CMMS. That means no advertising on television or radio, according to a bulletin the agency sent out. The campaign will be limited to digital media, email and text messages. Licensed insurance producers As Northrim Benefits Group did in the past before being sold by its parent company, RISQ will be offering assistance to people navigating the insurance market exchange starting Nov. 1. Individuals can call for an appointment with Jessica Carlson at 907-263-1401. Though enrollment won’t open until Nov. 1, consumers can also go to or to to look at plans now. Premera is also fielding calls from customers with questions about signing up. Another resource is Alaskan Benefit Insurance Consultants at ^ Naomi Klouda can be reached at [email protected]

Elders & Youth speakers provide from one century to next

The theme of the 34th First Alaskans Institute Elders and Youth Conference — “Part Land, Part Water, Always Native” — speaks to identity as a deep connection with the surroundings. Clare Swan, 86, and Chris Apassingok, 17, each live immersed in cultural activities at opposite ends of a century. Yet their lives are living examples of culture in motion, say the event’s organizers. As the conference allows elders and youth to engage in critical dialogues on issues through presentations and discussions, they will be inspiring future generations to take active roles. Apassingok’s talk is 10:15 a.m. Oct. 16, while Swan gives her address at 9:25 a.m. on Oct. 17, both at the Dena’ina Civic and Convention Center in Anchorage. Clare Swan, an Athabascan elder of the Kenaitze Indian Tribe, grew up at a unique historical point. Her parents were Victor and Madrona Segura, her dad of Filipino descent, her mother Athabascan. In the 1930s and ‘40s, Old Kenai sat on a busy tributary as a fishing hub for Cook Inlet. She recalls going from house to house, visiting the old Norwegian fishermen, whalers, sailors, Native elders and Russians descended from the time when Russia owned Alaska. Even then, the Kenai Peninsula was a world-class destination drawing trophy moose hunters and avid salmon anglers. “They brought the world in with them,” Swan said. Another way the world “came in” was through a big short-wave radio kept tuned to news. “I was a nosey little kid, under feet,” she said. “Always listening and asking questions. The first words in my language I recall anyone saying to me was ‘close your mouth and stop talking right now.’” As the eldest of nine children, Swan frequently had errands outside the house to run for her parents. She was able to read before she went to school, piecing together words from the funny pages lining the log cabin walls of her home. “That was our wallpaper,” she said. Her dad put her in school when she was five. Though bilingualism was a mark of distinction among Kenai’s multi-ethnic inhabitants, Swan and her brothers were told not to speak Dena’ina in school. She recalls walking out with her brothers when a teacher named Mrs. Armstrong reprimanded them for singing a song in Dena’ina about a boat trip to visit their uncle. “We knew a woman, a friend of my parents, who spoke five languages. My mom spoke Russian, English, Dena’ina, some Japanese, Togalog,” Swan said. “I asked ‘how come if that is so wonderful, why do they make us not speak our language?’ I don’t shush very easily.” Mrs. Armstrong, on a visit back to the Kenai many years later, apologized to Swan for prohibiting their language in school. For her junior year of high school in 1946, Swan’s dad thought it would be good for her to attend Anchorage High School to broaden her horizons. She was boarded with a military family, just after World War II, that had three children. They lived on Gambell Street and Anchorage High was located downtown. She walked the distance to and from school each day. “I ended up being a nanny for the kids,” she said. “I cooked, taught the children, made lunch for her and her girlfriends. They would talk over me like I wasn’t there.” Behind in her own studies at school, Swan wasn’t going to keep living that way. After Christmas, she walked with her suitcase to Merrill Field and asked a pilot to take her home to Kenai. “I said my dad would pay him for the ticket."' Having a strong sense of herself and her own culture remained with her as she married Van Swan in 1950 and raised four children. They were living in Seward when the 1964 earthquake struck and it destroyed their home. So that year, they moved to the southern U.S. to be near Van’s family. Once her own children were raised, Swan enrolled in Loyola College in Louisiana and earned a degree in business. She went to work as a medical records technician at Tulane Medical School. Then, May 29, 1973, she and her husband moved back to Alaska just as work forming lands and incorporation was occurring for the Kenaitze Tribe. Back in Alaska, Swan immediately went to work for her tribe under the new organizations brought about in the Alaska Native Land Claims Settlement Act that passed in 1971. She spent two decades immersed in research and litigation, culminating in the Kenaitze Indian Tribe receiving set net fishing rights through state regulations in June 1989. “That took us 11 and a half years to get it,” Swan said. “It brought our tribe back together. The first summer though was the Exxon (Valdez) oil spill. So we shared our fish with Nanwalek because they couldn’t eat their fish.” At work for the Tribe, Swan was involved in gaining the Dena’ina Health Clinic, and education and social services through the 1975 Indian Self Determination Act passed by Congress. The first clinic was located in the old Air Force infirmary at Fort Wildwood (now Wildwood Correctional Center). Later it was moved to Kenai. She also worked to establish the Cook Inlet Council on Alcoholism and Drug Abuse. From 1980 to 1995, Swan was instrumental in establishing youth and community agricultural programs. She dove into board activities as chair of Cook Inlet Tribal Council (a position she still holds), or CITC, and on the Cook Inlet Region Inc., or CIRI, board of directors from 1991 to 2006. As a certified substance abuse counselor, a volunteer with the court system and an active participant in the effort to revitalize the Dena’ina language, relearning the language herself, Swan has helped countless Alaska Native people. In 2009, she was honored with the Alaska Federation of Natives President’s Award for Elder of the Year, and she was inducted into the Alaska Women’s Hall of Fame in 2011. CIRI, the Alaska Native regional corporation for Southcentral, presented her with the 2013 Shareholder of the Year Award for more than 40 years of community work. This year, she was honored by CITC with the naming of the Clare Swan Early Head Start Child Care Center. “When I look back, it was very hard work. I’m proud to say the land the Tribe has now has been purchased, fee simple, by the Tribe; these are our lands. Old Town of Kenai lands are the Tribe’s. No one gave it to us,” she said. “Even though it was so hard, I would do it all over again.” This close to the age of 90, Swan doesn’t show signs of slowing down. She’s known for her “bundle of energy." “Being around people and my work gives me my energy,” she said. Swan freely shares her stories and thoughts with everyone, but has a special place in her heart for young people. One of her favorite Dena’ina words is “tsilqu.” It means the number 1, but also “together.” “If you are together, you can be as one,” she said. “It’s up to the young people now. I tell them don’t be part of making the world sick. People can do a lot if they stick together.” Learning to provide Chris Apassingok lives a traditional Siberian Yupik life that shares a lot in common with his grandparents and their parents. In Gambell on St. Lawrence Island, bearded seal, walrus and bowhead whale are still stable food sources. Winters when the meat isn’t available are hard years. That’s why people such as young Chris Apassingok shoulder an important role. He is a Neqniighta, or provider. “Hunting, it’s something I am supposed to do,” Apassingok said in an interview with the Journal. “We’re supposed to do that because it’s hard to buy food at the store. We rarely get money. Store food isn’t as good. The meat we eat lasts longer in our system than the store’s food.” He’s been on whaling and walrus hunting crews since he was 5 years old. He struck and killed his first whale at the age of 11, and another when he was 16. “He provides food for his family and his village,” said his mother, Susan Apassingok, who is the mayor of Gambell. “I watch him get ready and risk his life to feed his people. It’s hard to purchase gas and they might get stuck because they can’t pass the ice. I have a lot of white hair because I worry and pray a lot for him.” In honor of his achievements contributing to the health and well being of his community, the Bering Straits Native Corp., conferred on him the “Young Providers Award” in 2016. “When I was given that, I felt proud of myself. I was the first one from my village to get the award,” he said. The most important aspects of hunting are reading the weather correctly and “not being nervous.” “My father taught me how to watch the waves, the currents. I pretty much know what it does. I can see storms coming,” he said. “Back when I was a kid, I got scared of seeing the game we hunt, then I started to get to used to them. They are super huge. The skills to be a good hunter, you have to have a perfect aim on shooting a rifle. You can’t be nervous. You have to have perfect aim throwing a harpoon and know the dangers. That’s pretty much it.” Nowadays, Apassingok, his dad and the other hunters have to travel about 130 miles from the island in an open 18-foot Lund boat. “Climate change makes warmer winters and there is more open water, less ice,” he said. Not only is he hunting for walrus and seal. He’s hunting for ice. Next month, in November, whaling begins and will continue through January. Those are some of the harshest months, but the time when the mammals are available. A few months ago, Apassingok had a bad experience that made him realize people all over the country and the world might have opinions about him and his hunting. Cruel opinions, and they weren’t shy about expressing it in hate messages on social media after a Nome radio station carried an interview with Chris and his dad about the successful bowhead they had just brought in. “I realize I got the whale and that newspapers all over wrote about it. I was proud, too,” he said. But environmental groups, which tend to see hunting as a sport and not a necessity for putting food on the table, made comments denouncing whaling. Then cyber bullies joined in. After more than 400 messages came in saying things like they hoped Chris would get harpooned and die, he was concerned and upset. “Then, I just forget about it,” he said. “Forgive all the people and just move on. I’m different from other teens. I don’t really use electronics and stuff that other people do.” But it upset his family. His mother cried at reading comments such as “I hope your whole community dies.” “We were shocked,” his mother said. “This is our way of life. It’s been around for thousands of years. It hit my heart in a million pieces. I cried, but I didn’t write back.” Apassingok comes from a busy, engaged family. His grandmother, Debbie Apatiki is Gambell’s village public safety officer, or VPSO. His grandfather, Mike Apatiki, is retired from the Army National Guard. His dad, Daniel Apassingok, is the school custodian and a whaling captain. On his paternal grandparent side, Anders is a teachers aide and with his wife, the late Luceen Apassingok, were involved in teaching the next generation traditions such as building the angyapiks or walrus hide boats also known as umiaqs. They also were Siberian Yupik language teachers. Apassingok’s older sister, Danielle, is in her first year of college at the University of Alaska Fairbanks studying to be a teacher. His younger brother Chase is in junior high school. “I like basketball and sports, and I am athletic, but I’m not that good at it,” Apassingok said. He also likes to keep fit dancing with the St. Lawrence Island Yupik Dancers, who will be performing at AFN. According to Apassingok’s family, he doesn’t like to talk much. His siblings often speak for him. “I do feel nervous about going to AFN, speaking. But I wrote it down already,” he said. “I’m looking forward to it.” Naomi Klouda can be reached at [email protected]

AFN keynote speakers perfect physical, spiritual fitness

The Alaska Federation of Native’s theme this year, “Strength in Unity: Leadership — Partnerships — Social Justice,” takes shape as the largest gathering of indigenous people in the United States meet in Anchorage Oct 19-21. Sgt. Jody Potts, the director of Public Safety for the Tanana Chiefs Conference, and Lt. Col. Wayne Don of the Alaska Army National Guard came to leadership roles and social justice issues on broad stages. AFN opens on their addresses at 9:30 a.m. Oct. 19. Potts recalls an image of herself at age four or five running in 30 degrees below zero behind her father and brother in the woods of Eagle where she was raised. The foot race encompassed a mile in upper Yukon River territory between a relative’s cabin and their own. “Us running on a trail, mukluks, running home, dad encouraging me to keep up. He’d say, ‘if you have to walk a little ways, it’s OK.’ It’s dark, it’s cold, it’s winter. I’m following and trying to keep up with dad and brother.” Potts is Hans Gwich’in, though Eagle was no traditional Alaska Native village, given its long history as an 1800s trading post and center for gold rush activities. Her own long list of accomplishments began in lessons her dad taught her — through running, trapping, hunting — that she can do anything if she sets her sights on it. After graduating from Glennallen High School in 1995, Potts was crowned Miss National Congress of American Indians in 1998. A year later, in 1999, she was named Doyon Youth Shareholder of the Year. “I was raised traditional, without electricity and using old kerosene lanterns, grandpa playing the fiddle, dancing in a small cabin. Those are fond memories,” Potts said in an interview with the Journal. “At four or five, I remember going to the city and not knowing what a toilet was. I remember getting electricity and how it changed our lives.” Adeline and Mike Potts, Jody’s parents, lived a subsistence lifestyle following a trapline in winter, supplemented by Mike’s work building log cabins. Her mother baked bread and pies, and lived a community-minded philosophy. Working out and running was a regular part of life under the accomplishments of her fitness-minded dad and brothers in the village of Eagle. Back then, on the southern banks of the Yukon River near the Canadian border, Eagle had a small population of about 100 people, most of them Caucasian. “It helped develop my character, my sense of belonging in the community. At the same time, there were a lot of alcohol related problems and I definitely saw some of that. It’s a part of what made me adverse to alcohol and drugs in a way that I’ve been lucky to not struggle with addiction. I saw so much negativity resulting from it,” she said. Presenting a positive role model for other women was one of her tasks while serving as the Miss National Congress of American Indians. NCAI is an organization that protects indigenous treaty rights, works on policy issues and advocacy, so this was not just a beauty contest. “To hold the title was a real honor,” Potts said. “It was a lot of great experiences as a role model for young native girls. I traveled throughout Indian country, the Lower 48 and Alaska, and spoke to Tribes, to students at universities in Native programs and went to Washington, D.C. “A lot of it was based on who you are and what you are doing, what you represent already.” A scholarship came with the award. Potts also married and had three children: Izzy, 17, Quannah, 15 and Denali, 12. To her, parenting became her most important role but she wanted to make other contributions as well. She graduated from Northern Arizona University with a bachelor’s degree in applied indigenous studies in 2008. After earning her degree, Potts returned to the Glennallen area in 2009 and began her job hunt. She considered a Tribal position in administration, wanting to make contributions through indigenous social issues. Then, spotted training for Ironman triathlon races and noticed for her strength, she was invited to enter law enforcement. Alaska State Trooper Sgt. Dwayne Stone, recruited her. “I had been running and cycling, and was asked if I had ever considered law enforcement,” she said. In addition to training at the Alaska State Trooper Academy, Stone mentored Potts throughout, showing her how to work with victims and suspects, and important traits such as respecting people where they are at in life, she said. It was a role that fit and put Potts’ skills to work. As a new VPSO she was assigned to the village of Tazlina. Three years later she was appointed head of the organization in 2013, overseeing a territory that is the third of the state of Alaska and encompasses 42 villages. “When I’m able to help victims and encourage children, or see positive outcomes in criminal cases, that’s fulfilling,” she said. “When there are not enough resources and officers in every village, it’s challenging. Statewide there are many openings. Out of 60 some positions, only 50 are filled.” Working out continues to be “part of who I am and my character, seeing what I can do if I work hard at something.” It’s also stress management, she said, to offset law enforcement work. To even do one triathlon takes countless hours of training: her most recent completed event was 2.4 miles swimming, 112 miles biking and a marathon run of 26.2 miles. “Being an officer, it was important for me to be as fit as possible,” she said. “It can determine the outcome of a potentially violent situation. I would rather talk someone into handcuffs than use physical force. But if I do have to go there, I want to be fit as possible.” Invited to be a speaker for AFN is another honor recognizing Potts for her years of dedication. “This is the largest indigenous gathering in North America,” she said. “AFN is an important organization for Alaska Natives. It does a lot of advocacy work. AFN is a collective of all our leaders throughout the state. It’s impressive and awesome and I do feel honored to be chosen.” Now Potts has returned full circle to her subsistence lifestyle as well, only now she’s putting caribou, moose and grouse on the table. Her roles are somewhat uncommon to women as she works, competes and recreates in what is considered a predominantly male domain. “As I go about my day-to-day life I rarely have idle time,” she said. “Always there’s something to accomplish every day. My kids are my priority and working hard for my people. I never give up and teach them ‘don’t ever give up.’” As she was preparing for her first full Ironman last year, back to back with no breaks, her daughter told her one night, “I know this goal is important to you, Mom. I’m proud of you.’ “And I thought, ‘oh wow. She gets it.’ The take away is for them to see I have a dream, and put in a lot of hard work, and then I accomplish it. It makes everyone feel good.” Many pathways to leadership Wayne Don grew up in the 1970s on Nunivak Island surrounded by the Bering Sea with his two brothers, parents Fred and Annie Don, and a large extended family. One of the first televisions on the island was in his parent’s home, which meant people gathered there to see the new source of entertainment. “I didn’t like watching TV myself so much as watching others watch television,” he said. “That was interesting Books were in his family’s home. Don’s mom had graduated 8th grade and wanted to attend Mt. Edgecumbe High. “Her older sister had graduated from there, and mom wanted to go, but she was needed at home and couldn’t. She liked to read. Mom read to us as a child,” he said. “I liked to read. Books took me out of the confines of where I lived.” Like Potts, Don was a runner and athletic, living a subsistence lifestyle. One summer while commercial fishing out of his mother’s village of Quinhagak near the Kuskokwim River at the age of 14, he had an epiphany about what he wanted for his own goals. “I realized I wanted to go to college,” he said. Don was accepted into the Rural Alaska Honors Institute his senior year, a college prep program that students had to apply to enter. After graduating Mekoryuk High School in 1990, he immediately attended the University of Alaska Fairbanks thinking of studying criminal justice to either be an Alaska State Trooper or go to law school. “Midway through, I started to wonder what I was doing,” he said. “I remember I had stayed up all night studying for a math test — I tell students now, ‘don’t ever do that. It will make you crazy.’ I was doing fine, but for whatever reason I was feeling lost.” He considered dropping out to join the Army. Instead, he stayed in college and joined the Army. For initial training, he was shipped to Fort Leonard Wood, Mo. Then, back at UAF, he joined the ROTC as a cadet. When he graduated in 1994 from UAF with a degree in criminal justice, his life in the military continued. Army routines and traditions appealed to him, he said, the physical training aspects and warrior culture. “It gave me a sense of purpose,” he said. A year after graduating, he was sent to Bosnia. “I recall my dad’s ritual each evening was watching the national news on television,” he said. The war in faraway Bosnia dominated the screen in the late 1980s, the drawn out conflict involving Bosnians, Serbians and Croatians. “I remember thinking it was terribly sad what’s happening there,” he said, “but I thought ‘why are we watching this?’” Eight years later, 2nd Lt. Wayne Don was poised to cross the Herzegovina River into Bosnia. The U.S. had negotiated the Dayton Peace Accord and Don was one of the peacekeeper troops sent in on a one-year mission. “The infrastructure was destroyed,” he said. “Factions had stopped fighting. A number of things had caused ceasefire, but hostilities always resumed. No one knew what was going on. We didn’t know what was going to happen. The military planners assumed, because we had to do a river crossing, that in a worst-case scenario it could be an opposed crossing.” At 23, he felt in over his head, but Company Commander Lee Rysewyk (now in Washington, D.C.) told his most junior lieutenant he would be in charge of crossing the river, leading 30 troops. “My heart absolutely sank,” Don recalled. “I was scared. I was unsure. At this point, I was questioning his judgment. But he was the most combat-seasoned company commander the Army at the time,” after serving in Somalia and during Desert Storm. Rysewyk’s confidence and faith changed a dynamic in Don’s own belief in his capability. He passed that leadership test, getting his men across without incident. His troops were there that year, and a second mission, to support local governments as they were being stood back up. “What I saw in the country and the privations of people, it makes you proud to be who you are, privileged to live in a country that has organizations and beliefs that protect us from large scale violence like that,” he said. In 2001, Don returned on an assignment to teach ROTC at UAF, and completed a master’s degree in business while there. The Sept. 11, 2001, terrorism attacks on the World Trade Center and the Pentagon occurred while he was in Fairbanks, an event that made him feel he should be serving his country. At the end of four years at UAF, he joined the Alaska Army National Guard in 2005 and was sent on two subsequent missions to Afghanistan. In 2011, he was honored with the prestigious Marshall Memorial Fellowship, an award that gave him an intense 23-day journey through five European countries meeting with world leaders. French President Emmanuel Macron is alumni of the same leadership program, for example, which invites emerging leaders from the U.S. and Europe ages 28 to 40 to explore each other’s politics, business, innovation, and culture through experiential learning. Don visited Romania, Belgium, Germany, Macedonia and Italy. That was a profound time of learning on a broad stage, Don said and exposed him to a range of political and leadership issues. Soon he would be putting those insights to work for his own people. He was elected to the Calista Corp. board of directors, and serves as chairman on his village corporation, Nunivak Island Mekoryuk Alaska or NIMA. He also continues to work for the Alaska Army National Guard after being promoted from major to lieutenant colonel in 2013. For most, it takes years to achieve that level, but Don reached it at the age of 41. Of all his honors, coming back to Alaska, taking on leadership roles at Calista and NIMA hit Don as being meaningful in a deeply personal way. Selected for the keynote address before the AFN means a lot to him, he said, and he credits the AFN as being a factor helping him become a leader today. “Being recognized by your own people,” he said, “that is an honor.” Naomi Klouda can be reached at [email protected]

Energy Dept. grant aims to harden microgrids

Imagine that Puerto Rico’s electrical grid had the ability for one power plant to “talk” with another plant in a long daisy chain. Then, when Hurricane Maria sweeps in, the plants’ automation kicks in and amps up power production in one facility while another remains offline. Their systems’ communications capacity evaluates which “assets” could be used and whatever backup activation fixes were necessary to generate electricity until full power could be restored. That’s no pipe dream, but a plan in place for Alaska’s microgrid resiliency, backed by $6.2 million in grant money from the Department of Energy via Sen. Lisa Murkowski’s office. The award funds a partnership between the City of Cordova Electric Cooperative, the Alaska Center for Energy and Power, or ACEP, at the University of Alaska Fairbanks, the Alaska Village Electric Cooperative that operates electricity for 58 villages, and three national laboratories. One of the entities is Sandia National Lab, known for its space age innovations such as the Ultrafast X-ray Imager that can capture stars and other images down to 2 billionths of a second. It’s responsible for the WANDERER, a bipedal robot that can operate for long periods performing the types of jobs relevant to scorched earth disaster response scenarios. Two other labs at work on solving critical problems — the Idaho National Laboratory and the Northwest Pacific National Laboratory —will also be in on the project, though concerned with different questions. Now, back to Puerto Rico and Hurricane Maria: Alaska’s natural disasters such as tsunamis, earthquakes and severe climatic storms also cause electrical grid vulnerability. Addressing those vulnerabilities, the $6.2 million project is called exactly what it’s supposed to create: Resilient Alaskan Distribution System Improvements using Automation, Network Analysis, Control, and Energy Storage, or RADIANCE for short. The Cordova example Cordova Mayor Clay Koplin, also serving as director of the Cordova Electrical Co-Op, is especially excited about what’s ahead. Back in 1999-2000, Cordova skipped a few generations when planning its hydro projects, and went straight to the most advanced technology available, Koplin said. The hope was to eventually shift from diesel dependence to 100 percent hydro for electrical generation. Cordova’s two hydro projects — Power Creek and Humpback Creek — are separated by a mile and a mountain ridge. The Orca Power Plant, which runs on diesel, is located in Cordova, about eight miles away from the hydro plants. But even 18 years ago, communication between the power plants was on Koplin’s mind. The planners wanted each of the plants to be able to supply communication to the other. “(When we were done), manufacturers were looking at what we did with their equipment and said they didn’t know that could be done,” Koplin said. “We didn’t have a lot of money, so we just did stuff. There are eight miles between the community and the hydro plants, so we used copper telephone lines and an ethernet with DSL modems,” Koplin said. “We hopped modem to modem, each three miles apart. The manufacturer said no one tried to daisy chain like that.” It cost $10,000 and provided “bulletproof communications,” Koplin said. Two hydro plants supply the city’s 2,300 residents with power most of the summer months, or about 90 percent. In winter, the hydro has to give way to expensive diesel. A “good” winter means 500,000 gallons of diesel is consumed. A stormy, snow-piled one sees nearly 800,000 gallons of diesel use, he said. A single kilowatt hour, or kwh, can cost 65 cents in the winter, with “bare bones” heating of 450 kwh causing a $300 monthly bill per household. But Cordova Electric Cooperative not only serves the residents; it is responsible for the major commercial port activity for Prince William Sound and one of the richest fisheries in the world. After the economic devastation of the 1989 Exxon Valdez Oil Spill, the community set its sights on diversifying. One key hindrance was the high cost of energy, Koplin said. “We’ve gotten costs down by using closer to 90 percent hydro in the summer. But we don’t have a dam to store a reserve of water to access for winter,” he said. Hydro would be capable to shoulder more of Cordova’s electrical load if there were two innovations: a reservoir to store water that can be accessed by the plants during the winter and a backup battery system to store generated energy that goes to waste in summer, Koplin said. “If a battery can take spinning reserve function, that frees up capacity to save over 100,000 gallons of fuel,” he said. Another part of the project is a layer of technology overlaid on the microgrid to control what happens when one part of the system breaks down. This is where one plant can “talk” to another one, either automatically or via human operators. “If a tsunami hit, the system could automatically reconfigure to look at say, a hospital critical load. If you’ve lost part of system, then it reconfigures to maintain critical loads,” Koplin said. The project will take three years. Dr. Abraham Ellis, one of Sandia’s scientists and a principle member of the technical staff, came to Cordova in June for a field hearing of the U.S. Senate Committee on Energy and Natural Resources, led by Murkowski and ranking Democrat Sen. Maria Cantwell of Washington. Also present were Gwen Holdmann, director of the ACEP, which will be working with the labs on RADIANCE, and Meera Kohler, director of Alaska Village Electric Cooperative. “We told a story that kind of dazzled them,” Koplin said, speaking of himself and the Alaska partners of Holdmann and Kohler. In announcing the awards, U.S. Secretary of Energy Rick Perry talked about how a resilient, reliable and secure power grid is essential. “As round-the-clock efforts continue to help communities recover from the devastation of Hurricanes Harvey and Irma, the need to continue strengthening and improving our electricity delivery system to withstand and recover from disruptions has become even more compelling,” he said. The world-class innovation of the national laboratories — including Idaho and the Pacific Northwest in partnership with Sandia — forms an investment, Perry said, meant to “keep us moving forward to create yet more real-world capabilities that the energy sector can put into practice.” Village power Alaska Village Electric Cooperative, or AVEC, oversees electrical generation for 58 villages. Kohler explained that beginning in 2004, many of the villages took advantage of DOE programs making wind turbines available. They became hybrids of wind and diesel. “Now we operate 50 microgrids, electric utilities that aren’t connected to each other,” Kohler said. “The objective of this grant is to work with national labs to optimize the grids so we’re getting the best value out of the systems we have.” Toksook Bay in western Alaska has an automated, fuel-efficient power plant and four Northwind 100 wind turbines with a generating capacity of 400 kilowatts. An electric tie line was built between Toksook Bay and the communities of Tununak and Nightmute. This allowed AVEC to reduce substantial costs by being able to shut down the old power plants in both Tununak and Nightmute. The tie line allows all three communities to reap the benefit of reduced diesel fuel costs on their electric bills when the wind turbines generate electric power. A similar intertie between Nunapitchuk and Kasigluk on the Kuskokwim River also shares three 100-kilowatt wind turbines. AVEC operates standalone microgrids in Hooper Bay where three Northwind 100 wind turbines were erected; Savoonga’s two wind turbines and Gambell’s three wind turbines. Working with expensive diesel backup, the challenge is always to get more out of wind and cut back on diesel use. AVEC pays $26 million per year for diesel, a cost passed on to communities whose residents point to energy expenses as often surpassing food costs. “The problem here,” Kohler said, “is when the winds grow strong and we can’t use all the power.” Like Cordova, AVEC would like more storage to retain wind-generated power. They also want to keep optimizing power during storms so that each hybrid operates seamlessly, Kohler said. Partnering with the labs means giving them “quite a university of class options in each environment,” she said. Gwen Holdmann, the director at the Alaska Center for Energy and Power, agrees that there are many advantages for the labs to learn from real life systems. Alaska has 15 percent of the nation’s microgrids, Holdmann said. “AVEC owns more individual wind farms than any other other co-op in the United States,” Holdmann said. “This is a real challenge to operate remotely. They have a complicated network of different communities they are trying to serve.” Not only will AVEC’s villages receive some assistance, they’ll be teaching the university partners on real life microgrids, she said. In exchange, the village systems will be made more efficient and reliable. The goal is to enhance the resilience methods for distribution grids under harsh weather, cyber-threats, and dynamic grid conditions. They’ll do this by using multiple networked microgrids, new energy storage and early-stage grid technologies, Holdman said. The labs then will have more information and tools to take to other projects around the world. Hopefully, before more devastating power-loss catastrophes strike, as it did in Puerto Rico. Naomi Klouda can be reached at [email protected]

Voters reject return to pot prohibition

Voters on Oct. 3 rejected propositions to ban commercial marijuana operations on the Kenai Peninsula and in Fairbanks where most of the state’s cultivation farms are located. With 23 of 24 precincts reporting results, the Kenai Peninsula Borough’s unofficial election results show an overall majority voting against the prohibition 5,232 to 2,941 or 64 percent against and 36 percent in favor of the ban. In Fairbanks, voters faced two ballot props that also went down in defeat. The Fairbanks North Star Borough reported unofficial results from 40 of its 40 precincts on its Proposition 1 as 9,488 nay votes to the 4,080 in favor of the ban, margins showing overwhelming rejection of a ban at 70 percent to 30 percent in the 7,444-square mile borough. In the City of Fairbanks, voters cast 2,912 against the ban prop and 1,313 votes in favor of it. That showed margins of 69 to 31 percent, another strong showing in support of the cannabis business operations. Many voters on the Kenai Peninsula got a surprise when they took their first look at the ballot ticket and saw no Prop 1 listed for them to express a preference. Borough Mayor Mike Navarre said that was a reflection of the 2014 legalization of marijuana laws that went into effect. “Each city has its own jurisdiction to decide,” Navarre said. “All the voters within the boundaries of Homer, Soldotna, Kenai, Seward and Seldovia weren’t asked that question. It just applied to areas outside the cities that are in the borough.” The mayor said he wasn’t surprised the ballot measure nonetheless failed. The “no” vote people were well organized, he said. “The ‘Vote Yes’ got the signatures to put the question on the ballot but then, didn’t mount a strong effort. It was a one-sided effort where the ‘Vote No’ people were able to make a case for the medical and regulatory benefits of it being legal and regulated so you know what you’re getting,” Navarre said. Robert Mikol, whose business cultivator license was approved at the last Marijuana Control Board meeting in September, said he watched both Fairbanks propositions with some concern. “A lot of people told me how they were going to vote – people who are not even consumers, some fairly conservative – who said they were going to vote no,” Mikol said on Oct. 4. He had invested $50,000 to $70,000 in a grow operation that took a year of planning and two appearances before the board before he was approved. “It would have been such a huge blow if the prop had passed. I would have had to figure something out; maybe move to Delta Junction,” Mikol said. “But now the question is settled and we see the support here.” Cary Carrigan, president of the Alaska Marijuana Industry Alliance, said he felt education was the key particularly on the Kenai Peninsula were he felt the industry was depicted as a “boogie man.” “That was a moving target but we really worked it, a lot of people worked extremely hard,” Carrigan said. As votes filtered in Tuesday evening, Carrigan said he was noticing a 60-40 split against the ban community-by-community. “I felt pretty good to see that but I wasn’t sure if that would hold,” he said. In the end, even members of the Alaska Marijuana Control Board got involved in the proposition debates. In Kenai, board chairman and Soldotna Chief of Police Peter Mlynark helped draft the petition and gathered petition signatures on the proposition that ended up on the borough ballot. In Fairbanks, board member Brandon Emmett participated in rallying calls to vote “no” on making commercial marijuana illegal. Public members on a call-in radio show, KSRM, questioned whether that constituted an ethics violation. But such activities aren’t in violation of state law, said Cori Mills, an assistant attorney general in the Alaska Department of Law. “There is no prohibition against a board member participating in this process, and exercising their freedom of speech to voice their opinion on a local issue,” she wrote in an email to the Journal. In analyzing for potential violation, the state oversight of boards and commissions would analyze for financial rewards for activities related to commission work. None was found in either Mlynark or Emmett’s activities, she said. Bethel alcohol tax hike passes Bethel voters agreed to raise taxes on alcohol sales at its two liquor stores from 12 percent to 15 percent in a vote of 372 in favor to 257 against in the Oct. 3 City of Bethel election, giving that western Alaska hub city the highest sales tax in Alaska. The Bethel City Councilman who sponsored the petition, Leif Albertson, said voters agreed that alcohol sales are taking a toll on social services in the community. “They were reading it accurately that we have a huge cost associated with alcohol sales here. A lot of times in rural Alaska, people are more concerned about the sense of community and public safety when you’re out of the larger metro area,” Albertson said. “Everyone has someone affected by alcohol and so it feels a little more personal.” Both anecdotal and actual statistics bear out that since more-easily available alcohol became legal in Bethel in May 2016, costs have gone up, Albertson said. “People have seen more problems with domestic violence, theft and homelessness,” he said. “We’ve also heard from non-profits, such as at Winter House those running it say they are experiencing increased burdens from the increased sale of alcohol.” Yet, those same nonprofits don’t have access to an increase in funding to pay for serving the extra people. “They get no help in terms of a tax benefit,” Albertson said. To solve that, Albertson’s plan included making grants available from the $1 million anticipated in tax revenue from a 15 percent sales tax. An additional 3 percent is projected to add $200,000 to the $800,000 in annual tax revenue, he said. Those who didn’t support the tax hike expressed concern about illegal bootlegging getting the advantage, Councilmember Thor Williams said during the debate on putting the petition out. But in the end, the council voted in favor of placing the petition on the ballot. Bethel has long been a “damp” community, meaning it is legal for people to order alcohol to be shipped into Bethel for use in their homes. Naomi Klouda can be reached at [email protected]

Sullivan: Health care at a crossroads

America’s health care crossroads ahead can follow two different philosophical paths, U.S. Sen. Dan Sullivan told a group of health care professionals Oct. 3 in Anchorage. One would let states take federal funds and design their own systems. The other would get rid of private insurance and put all American health care into the hands of a government program, Sullivan said, making his statements via video at State of Reform, a one-day conference at the Dena’ina Civic and Convention Center. The conference brought about 500 professionals together, focused on a series of discussions about health care policy, reform and managing costs. “Along with Sen. Bernie Sanders, one-third of the members of the Senate on the other side of the aisle would get rid of private insurance and put our health care system into one run by federal government,” he said. “That’s the crossroads and we will continue to debate it.” The repeal and replace debate over the Affordable Care Act, or ACA, is a dormant discussion for now, Sullivan said. Four different versions — from the American Health Care Act to the Better Care Reconciliation Act to the Skinny Repeal and the Graham-Cassidy Bill — failed to pass by the Sept. 30 budget fiscal year deadline, but Congress will continue to quietly work on solving key issues, Sullivan said. One example of how that works came as a suggestion from Alaska. A man in addiction recovery told Sullivan that as he increased his income, he was losing eligibility for his treatment. “He asked why not de-couple treatment from the Medicaid expansion?” Sullivan said. “I took that idea back and worked on it with key senators. We ended up adding $45 billion into the budget for mental health and opioid and other addictions; and that idea came from the Mat-Su Valley.” While predicting no further bills amending the ACA this year, Sullivan encouraged professionals to keep the ideas coming from trouble-shooting problem areas. “The best ideas come from the people in the room,” he said. The resignation of Health and Human Secretary Tom Price over improper charter flights at taxpayer expense was a “huge disappointment,” Sullivan said. Former Secretary of HHS Price, along with Centers for Medicare and Medicaid Services Administrator Seema Verma, were working closely with Sullivan and his staff on a possible pilot project for Alaska. The details were being hashed out, but the goal of the project was to work to lower healthcare premiums and to increase access to quality healthcare for Alaskans. Moderator DJ Wilson asked Sullivan how his views on fixing or replacing the ACA differed from Sen. Lisa Murkowski. She had garnered intense media attention for her “no” vote on each repeal and replace bill that failed in July, although she did not ever say how she would have voted on Graham-Cassidy. But Sullivan said the two had worked together daily, “if not hourly,” on legislation impacting Alaska. “I’m not going to grade my colleague. We wanted to work (the bill) and didn’t talk to the press,” Sullivan said. Sound bites in media reports quoting Congressional Budget Office analyses were latched upon to criticize bills or sound alarm bells about millions who would lose their medical coverage. “Many of those who would ‘lose’ their coverage were people who, if given a choice without the individual mandate, wouldn’t chose to get insurance,” Sullivan said. “But those nuances were rarely analyzed. In the end, we didn’t have enough data and we didn’t have enough time.” Health care as an economic force In a discussion of health care’s impact on the Alaska economy, Ralph Townsend, the head of the University of Alaska Anchorage Institute for Economic Research, or ISER, pointed out health care spending can be a negative driving force. Increasing benefits in health care causes a decline in real wages for employees across the U.S, he said. Alaska’s high cost of health care has driven retirees out of the state, a potential long-term problem because having a stable retiree population adds to an economy, Townsend said; large medical bills are also a leading cause of bankruptcy. “Medical tourism” takes patients out of Alaska where they can pay less for procedures in other states, another loss in dollars for the local economy. But Alaska wasn’t always known as the state with the highest medical costs; in the 1990s, medical costs here were well below other states, Townsend said, citing an ISER study. Something happened after 1992 that researchers don’t yet have a grasp on, he said, but the suspicion is that it relates to more people having access to health insurance in the 1990s, he said. Bill Popp, the president and CEO of the Anchorage Economic Development Corp., showed Alaska has seen real benefits from a booming health care field for employment. While most of the statistics available date back to the beginning of the ACA in 2014 and “therefore are not helpful, the trend has been for increasing needs in most all medical professions,” he said. But as the retirement age demographic continues to increase, Popp posed the question of whether the job market will be able to attract enough professionals to fill all the needed jobs. “Are we going to be able to meet the demands of the future? There are labor shortages in our city,” Popp said. Medical staff is heavily recruited from outside, and while the economic impact of good paying physician and nursing jobs is a boon to the state economy, caregiving and support work at the other end shows depressed wages and low pay. But like Alaska’s painful lessons on its oil revenue dependence, the health care economy is dependent on federal dollars with Medicare, Medicaid, Veterans’ Affairs and Indian Health Services. “Any contracting will cause pain because those federal dollars will go away,” Popp said, noting that the bottom line is the trend of increasing health care jobs will continue. “Just not the sharp rise of the past.” State budget crisis Alaska has the highest costs in the nation per capita as the result of a small insurance market with limited provider competition. A keynote panel assembled at lunch discussed questions about how to fix the intertwined health care and fiscal challenges facing Alaska included Sen. Cathy Giessel, R-Anchorage, Rep. Les Gara, D-Anchorage, Nancy Merriman, executive director of Alaska Primary Care Association, and Curtis Thayer, president of the Alaska Chamber and former commissioner of the Alaska Department of Administration and Department of Commerce, Community and Economic Development. Thayer advocated a three-part attack on Alaska’s deficit: aligning the cost of government with revenue; creating an endowment model for Permanent Fund earnings and setting stable tax policy. “Oil companies had their taxes changed three times, three years in a row,” Thayer said. Giessel talked about the need for transparency in medical billing. Doctors are getting rich off the system, she said. “I don’t mind a physician who owns an airplane but three airplanes and a helicopter?” she said. As a medical professional herself, Giessel said she would like to target patient incentives on the front end through wellness care in order to lower the number of Alaskans who consume most of the medical care through bad health. All of them noted the state’s fiscal crisis is linked to the high cost of providing health care to its employees and retirees, and about a third of the state budget goes to health care overall, Gara noted. On the other hand, federal dollars are helping the state by paying for Medicaid expansion that enables more to have coverage, he added. But employers are still the largest buyers of health care in the country, said Merriman. Employers need to demand more value for their dollars through a more transparent system. Policy makers are pinning no small amount of hope on bills afoot in the Alaska Legislature to address the high cost of health care, with the goal of bringing down costs not only to help consumers but the state’s bottom line. House Bill 123, sponsored by Rep. Ivy Spohnholz D-Anchorage, is meant to empower consumers to make informed decisions abut their health care options by ensuring accessible information on medical pricing. Senate Bill 119, sponsored by Shelley Hughes, R-Wasilla, mirrors the same concepts as HB 123 but carries filing and reporting requirements. Thayer predicted that in five years, the current ACA won’t exist because of amendments and reforms. In the meantime, individual businesses are struggling and demanding changes. There’s more work to be done on the state spending level by renegotiating contracts with public employees, Thayer said. During his tenure at the Department of Administration, he said it was able to cut $60 million in insurance costs by finding efficiencies in policies. They had found that in one state health insurance policy, clients were allotted seven teeth cleanings per year. “That’s a social engagement with your dentist and might not be the best way to use funding,” he said. Naomi Klouda can be reached at [email protected]

Judge approves Chapter 7 liquidation of remaining ADN assets

Any chance to reorganize Alice Rogoff’s remaining Alaska Dispatch News holdings after her Aug. 12 Chapter 11 bankruptcy filing was deemed at “0.00 percent” by her attorney at a Sept. 22 hearing, which is bad news for those left holding the bag on more than $2 million of debts. Yet, at the hearing, Federal Bankruptcy Court Judge Gary Spraker gave the go-ahead to liquidate what assets do remain. He granted a request that the bankruptcy case be converted to Chapter 7, which allows selling all assets — whatever there may be — to pay creditors. The process will be overseen by an objective third party official appointed by the court, Nacole Jipping, whose task is to get as much value as possible from what remains. The money is then distributed to those owed. Spraker issued a written order on Sept. 26 stating that Rogoff must turn over all records and newspaper estate property to Jipping. Within 30 days, an accounting of all disbursements must be filed along with a schedule of unpaid debts incurred after the end of the Chapter 11. Rogoff sought Chapter 11 protection at the end of financial difficulties operating the Alaska Dispatch on Aug. 12 and declared she had lost more than $4 million in the first six months of 2017, and millions more since buying the paper in April 2014. The newspaper and many of its assets were sold to the Binkley Co. for $1 million after a public auction brought forth no other bidders on Sept. 11. “The sale transfer is now closed and Mr. Binkley is in the daily business of putting out a newspaper?” Spraker asked. Attorney Erik LeRoy, representing the Binkley Co., confirmed that is the case. Creditors owed money — landlords at leased facilities, numerous paper companies and contractors — had waited to see what Binkley Co. chose not to purchase. Kathryn Perkins, the attorney for the U.S. Trustee monitoring the case on behalf of creditors and the public, said at the last hearing that she wanted to determine what assets “were left on the table” after the Binkley Co. made decisions on equipment and supplies they would keep. That list came out the same day as the hearing: an inventory of ink pumps, paper reams, conveyors, tools, conexes and a forklift. No printing press was on the list of items to be kept. That means they will not purchase any of the three printing presses previously owned by the Anchorage Daily News and then the Alaska Dispatch. In previous hearings, it was determined the two presses housed at 5900 Arctic Blvd., warehouse could be worth $250,000 if sold. A third press under daily use at the GCI building at 1001 Northway Dr., a Goss Urbanite, was also on the list of rejected assets but will continue to be used by the Binkley Co. until other arrangements are made, LeRoy said. Testimony had established that this press was going to cost so much to remove, more than $1 million, that it wouldn’t be worth much in parts to be sold. Nevertheless, it was on the list of remaining assets, and Rogoff has guaranteed to GCI that she will pay the cost of its removal. “The speed with which this case has happened in this court case compels the court to agree it should be converted,” Spraker said at the hearing. “There is no doubt the creditors bear the brunt of this bankruptcy. The court agrees an independent examiner of any such rights that may lead to recovery should be fully examined.” Rogoff attorney Cabot Christianson told the judge he didn’t object to converting the case. “There’s 0.00 percent chance that this debtor (Alice Rogoff) will be reorganized,” Christianson said, referring to any remaining assets that can be brought forth to help pay debts. But a Chapter 7 official, such as Jibbing, may be able to raise questions about financial resources Rogoff could use to pay down the debts, LeRoy said. In another matter, Spraker also decided against a motion put forth by Arctic Partners attorney Jason Kettrick. He had asked that the landlord at 5900 Arctic Blvd. be given more latitude to negotiate over the removal of the presses located in that warehouse. But Perkins objected in filings Sept. 21. “Instead, Arctic should be required to comply with the ‘notice and a hearing’ requirements … and a Chapter 7 trustee should be given the requisite notice period accorded” to evaluate whether the assets there could be used to pay some debts. Arctic needs to show it is entitled to administrative expense priority, Perkins wrote. Spraker acknowledged the debt owed to Arctic Partners (about $144,000), but asked that Arctic Partners follow the process set forth in liquidation of assets under Chapter 7. Others will have to wait as well. GCI, owed $1.4 million in back rent and utility bills, said according to its Aug. 10 eviction filing, “GCI’s claim against the Alaska Dispatch News, like all other unsecured claims against ADN, remains open. Along with all other creditors, we await the outcome of the Chapter 7 process.” In 2014, Rogoff purchased the Anchorage Daily News from national newspaper chain McClatchy Corp. for $34 million. As part of the deal, she sold the newspaper’s building in East Anchorage to Alaska telecommunications company GCI for $15 million. Rogoff is married to billionaire and Carlyle Group co-founder David Rubenstein, but has stated that any shared marital funds are off limit to the bankruptcy case. Perkins agreed that those owed money could not question Rogoff directly on her personal fortune at a Sept. 7 creditors’ hearing. But questions in this area are not off limits to a Chapter 7 official. Naomi Klouda can be reached at [email protected]

Oceans 17 panel shares vision of growing blue economy

The blue economy isn’t a new concept when thought in terms of the traditional jobs and industry: fishermen need boat wrights and processors, navigation tools and data to help bring in the catch. Rippling out, the blue economy demands a slew of new maritime trainings, greater security presence extending to the Arctic and literally thousands of new innovators to solve a multitude of science questions, according to a panel of six in “Building Alaska’s Blue Economy” Sept. 21. The panel came together at Oceans 17, an international science conference held in Anchorage Sept. 18-21 at the Dena’ina Civic and Convention Center. Hosted by Alaska’s Ocean Cluster, Director Joel Cladouhos introduced a need to define the scale of a new blue economy. “It’s easy to see it’s emerging as the next economic frontier,” Cladouhos said. Economic prosperity and security are intertwined, said retired Rear Adm. Jonathon White, a 32-year Naval officer who focused on the Arctic Ocean in his last three years as he helped author the Navy’s Arctic Roadmap 2014-2030. Even in remote Alaska towns, economic security is enhanced in proximity to military bases, White said. “You can’t have one without the other,” he said. “Your economy has to answer the needs of your security.” The Navy and the Coast Guard are becoming more intertwined to fill a security-capability gap, he said. White, whose Ph.D. is in oceanography, has urged Congress to recapitalize the U.S. icebreaker fleet, a need recognized in the passage of the Sept. 18 National Defense Authorization Act that authorized six new heavy icebreakers to serve the Arctic. White identified Arctic challenges ahead as the same needed to figure out technical issues in space exploration. He goes so far as to coin a new term by talking about the “blue rush” ahead, a nod to the gold rushes of old. Mining in data will part of it, he said. “We need to invest in the science up front. By investing in science, we will ensure that the Arctic evolves securely, and this means economic security, environmental security and national security, which includes both international events and homeland security,” White said. The Port of Anchorage, where nearly 90 percent of the goods sustaining Alaska cross the docks, needs to be seen as the port of a coastal city concerned with maritime issues and not just as an economic center to the state, said Molly McCammon, the executive director of the Alaska Ocean Observing Program and on the Ocean Regional advisory Council. It’s also the “gateway to the Arctic,” noted the panel’s moderator, Bradley Moran, Dean of the College of Fisheries and Ocean Sciences at the University of Alaska Fairbanks. Before his 2016 appointment as dean, Moran served as acting director of the Obama Administration’s National Ocean Council, assistant director for Ocean Sciences in the White House Office of Science and Technology Policy, and program director in the Chemical Oceanography Program at the National Science Foundation. Moran believes more security is needed at the Port of Anchorage. “We need to move the needle on this, the northernmost ice free port. That’s something that’s going to happen, not ‘if’ but ‘when.’ The national security aspect is critical,” Moran said. Michael Jones, president and founder of two San Diego-based nonprofits, the Maritime Alliance and TMA Foundation, quantified the employment needs of a blue economy. His groups’ missions are to promote sustainable, science-based ocean and water industries as well as business ecosystem development, economic development and workforce development. In a 2012 study of San Diego County, the Maritime Alliance found 46,000 people employed in maritime jobs and $14 billion in revenue was generated from the blue economy. Of those jobs, only 8,000 were in traditional blue economy jobs such as fisheries, stevedores and boat wrights. Another 19,000 were “blue tech” jobs; another 19,000 were support industries and engineering firms. “That was our baseline study,” Jones said. The worldwide ocean economy is expected to hit $3 trillion by 2030, according to an OECD study in March 2016. Alaska is on the way to having renewable energy systems technology to export. Monty Worthington, the director of project development for Ocean Renewable Power Co. Alaska, said just one example is an Alaska village that will soon be able to gain most all of its energy from hydrokinetic or river tidal energy provided by the Kvichak River in Southwest Alaska. Power generation for the village of Igiugig on the Kvichak River was proven in a test project that resulted in a prototype turbine called the RivGen Power System. Now awaiting funding to install the river generator that is the size of wheat threshing machine, Igiugig has become the “poster village” project that could be replicated in many other villages to ease their dependence on diesel fuel, Worthington said. Some 1.3 billion people in the world live without electricity, Worthington noted, meaning that many do not even have access to generators. Global communities on coastlines could use similar systems to Iguigig’s. “This is a case where small scale becomes an advantage rather than a disadvantage,” Worthington said. Another aspect of the project was that “blue jobs” were created in the installation, testing and maintenance of the RivGen system, Worthington added. “These were all local contractors who are now skilled in the device,” he said. Al Eisaian, described as a “serial entrepreneur” because he co-founded four technology companies, including IconApps, Inc., and the current IntelinAir, asked the audience of about 50 people what will it take to pull off new enterprises in the blue economy? His answer: Crazy people. “I don’t know about blue ocean opportunity, but I do know that none of this will happen unless we get some crazy people who will pursue these things and fight through the obstacles,” he said. Most obstacles are personal and individual, not financial, he said. In Alaska, he sees core sciences that can build-out technology to serve those who need data. “There’s no shortage of customers,” he said. “There’s a ton of potential here, but none will happen unless some crazy people will actually go pursue it.” Alaska is experiencing an economic crisis in its failure to diversify beyond the rich economy provided by oil revenue, Eisaian said. “I hope you don’t waste this crisis,” he said. “In it is a real opportunity.” Naomi Klouda can be reached at [email protected]

Alaska Dispatch now in chapter 7 to liquidate remaining assets

Any chance to reorganize Alice Rogoff’s remaining Alaska Dispatch newspaper holdings after the chapter 11 bankruptcy filing was deemed at “0.00 percent” by her attorney at a Sept. 21 hearing, bad news for those left holding the bag on more than $2 million of debts. Yet, at the hearing, Federal Bankruptcy Court Judge Gary Spraker gave the go-ahead to liquidate what assets do remain.  He granted a request that the bankruptcy case be converted to a chapter 7, which allows selling all assets – whatever there may be - to pay creditors. The process will be overseen by an objective third-party official appointed by the court, Nacole Jipping, whose task is to get as much value as possible from what remains. The money is then distributed over those owed. Rogoff sought chapter 11 protection at the end of financial difficulties operating the Alaska Dispatch on Aug. 12 after saying she had lost more than $4 million in the first six months of 2017. The newspaper and many of its assets were sold to the Binkley Co. for $1 million after a public auction brought forth no other bidders on Sept. 11. “The sale transfer is now closed and Mr. Binkley is in the daily business of putting out a newspaper?” Spraker asked. Attorney Erik LeRoy, representing the Binkley Co., confirmed that is the case. Creditors owed money – landlords at leased facilities, numerous paper companies and contractors – had waited to see what Binkley Co. chose not to purchase. Attorney for the U.S. Trustee monitoring the case on behalf of creditors and the public, Kathryn Perkins, said at the last hearing that she wanted to determine what assets “were left on the table” after the Binkleys made decisions on equipment and supplies they would keep. That list came out the same day as the hearing, an inventory of ink pumps, paper reams, conveyors, tools, Conexes and a forklift. No printing press was on the list of items to be kept. That means they will not purchase any of the three printing presses previously owned by the Anchorage Daily News and then the Alaska Dispatch. In previous hearings, it was determined the two presses housed at 5900 Arctic Blvd., warehouse could be worth $250,000 if sold. A third press under daily use at the GCI building at 1001 Northway Dr., a Goss Urbanite, was also on the list of rejected assets but will continue to be used by the Binkley Co. until other arrangements are made, LeRoy said. Testimony had established that this press was going to cost so much to remove, more than $1 million, that it wouldn’t be worth much in parts to be sold. Nevertheless, it was on the list of remaining assets, and Rogoff has guaranteed to GCI that she will pay the cost of its removal. “The speed with which this case has happened in this court case compels the court to agree it should be converted,” Spraker said at the hearing. “There is no doubt the creditors bear the brunt of this bankruptcy. The court agrees an independent examiner of any such rights that may lead to recovery should be fully examined.” Rogoff attorney Cabot Christianson told the judge he didn’t object to converting the case. “There’s 0.00 percent chance that this debtor (Alice Rogoff) will be reorganized,” Christianson said, referring to any remaining assets that can be brought forth to help pay debts. But a chapter 7 official, such as Jibbing, may be able to raise questions about financial resources Rogoff could use to apply down the debts, LeRoy said. In another matter, Spraker also decided against a motion put forth by Arctic Partners attorney, Jason Kettrick. He had asked that the landlord at 5900 Arctic be given more latitude to negotiate over the removal of the presses located in that warehouse. But in filings Sept. 21, attorney Kathryn Perkins, representing the U.S. Trustee, objected to the request. “Instead, Arctic should be required to comply with the ‘notice and a hearing’ requirements … and a chapter 7 trustee should be given the requisite notice period accorded” to evaluate whether the assets there could be used to pay some debts. Arctic needs to show it is entitled to administrative expense priority, Perkins wrote. Spraker acknowledged the debt owed to Arctic Partners (about $144,000), but asked that Arctic Partners follow the process set forth in liquidation of assets under chapter 7. Others will have to wait as well. GCI, owed $1.4 million in back rent and utility bills, said, ““GCI’s claim against the Alaska Dispatch News, like all other unsecured claims against ADN, remains open.  Along with all other creditors, we await the outcome of the Chapter 7 process.” In 2014, Alice Rogoff purchased the Anchorage Daily News from national newspaper chain McClatchy Corp. for $34 million. As part of the deal, she sold the newspaper's building in East Anchorage to Alaska telecommunications company GCI for $15 million. Rogoff is married to billionaire and Carlyle Group co-founder David Rubenstein, but has stated that any shared marital funds are off limit to the bankruptcy case. Perkins, the trustee’s attorney, agreed that those owed money could not question Rogoff directly on her personal fortune. But questions in this area is not off limits to a chapter 7 official. Naomi Klouda can be reached at [email protected]      

Lake Hood keeps providing bang for the buck

A floatplane slip at Lake Hood Seaplane Base goes for $115 pe month. A gravel or paved tie-down spot for typical bush planes like a Cessna, Piper or De Havilland rents for $55 a month. Land leases are likewise kept low: 12 cents per square foot, an increase in 2017 from 9 cents per square foot. The fees sound like a bargain at the oft-touted “busiest seaplane base in the world.” “This is a local treasure,” Lake Hood manager Tim Coons said. “Everyone here in Anchorage and all over the state benefit from this seaplane base. We have this amazing venue right here in town. It’s not something you’ll find in another urban location. Other cities do not have this right in their town.” The fees are modest by any measure of accounting, Coons acknowledged, and don’t generate much revenue for the airport. The seaplane base budget is encompassed under the larger Ted Stevens Anchorage International Airport budget. “Fees don’t generate any vast sums of revenue,” he said. ““We’re here to encourage aviation. Aviation land rates are low. The FAA (Federal Aviation Administration) is aware of these rates and I believe that overall we’re acknowledging general aviation is a necessity in Alaska.” Fee rates at Lake Hood hadn’t changed since the mid-2000s when this year the floatplane slip rents were raised from $105 to $115 a month. Tie downs were $50, and went up by $5. The most recent study in 2013 by the McDowell Group for the Anchorage Economic Development Corp. found that Lake Hood activities generated $42 million in economic impact. The main philosophy at work shaping Lake Hood into the future allows for even more public enjoyment of a rare urban jewel. Maximizing revenue from public use isn’t the goal, said Coons. Caretaking at the seaplane base supports an Alaskan culture where planes are acknowledged as necessary transportation to get in and out of the state’s vast and nearby roadless wilderness, Coons said. “The airport fosters a unique lifestyle. Cottage goers aren’t flying out of downtown St. Louis to someplace completely off the grid,” he said. “It’s a lot easier said than done in much of the country. Here, by the time you’re across the (Cook) Inlet, you might as well be in the Yukon. You are off the grid.” Part of the 20-year master plan involves widening a crowded area on Lakeshore Drive that presently combines airplane taxi, bicycle riders, pedestrians and car traffic. Widening and separating out for the user groups will cost $10 million and is a few years away, Coons said. It involves relocating a parking grid currently used for tie-down planes. “Eventually, the plan would be to widen the corridor between the strip along Lakeshore Drive to make separate lanes for vehicles, bikes and recreation as well as a taxi for airplanes. Right now they share the same corridor,” Coons said. “That would improve safety and, by the way, make it a nicer and more spread out area for everyone to use.” Airports have tightened security across the nation many times over since the Sept. 11, 2001, terror attack at the World Trade Center and Pentagon. The Ted Stevens International Airport in Anchorage, of which the seaplane base is a part, was no different. But when it came to putting fences and restrictions around the lake, the decision was to not do it indiscriminately. “We have security,” Coons said. “We have our own police force right here at the airport as part of Anchorage International Airport.” Allowing public access to Lake Hood continues pretty much since the days when Lakes Hood and Spenard were joined by a man-made channel in 1939. Swimmers were common then, though lake waters were deemed polluted for a number of years before recent efforts to clean it up. Birds thinking of the place as a sanctuary also were deeply discouraged through wildlife mitigation efforts that included planting pigs on Gull Island in between Spenard and Hood Lakes. “The pigs ate the seagull eggs, and after a few years, they were effective at convincing the birds this wasn’t an area for them to nest,” Coons said. “Now the pigs are gone and so are the seagulls.” Other changes ushered the urban lakes into the modern era on a global level. If you’ve thought summer aviation noise at Lake Hood indicates even more planes are using the world’s busiest seaplane base in recent years, you’d be correct. Lake Hood’s takeoff and landing numbers, or T&L, steadily increase annually. In 2010, T&L totaled 63,455. That number increased by 14.4 percent in 2016 to 72,620, or nearly 200 per day. This year’s numbers are on track to meet or surpass last year, Coons said. On a busy summer day, the seaplane base generates more than 400 operations by float and wheeled aircraft. Given new record tourism numbers pushing past 2 million visitors per year, what’s happening at Lake Hood isn’t surprising. The lack of land space to grow larger isn’t a big item addressed on the 20-year master plan. The lake holds 330 nooks, crannies, docks or “fingers” at present count for floatplanes, said Coons. There’s another 450 gravel or paved lots for the outside tie-downs, and more hangar space going in at the airport for private and commercial lease. “There isn’t much space to build more, but the Airport Master Plan calculates ways to squeeze in more slips in the coming years,” Coons said, indicating places on the map where eddies could be carved deeper in the shore to make room for slips. At most, maybe 30 or 40 slips can be added to the lake, he calculates. The waitlist holds 230 names, and the management cautions prospective leasers to plan on an 11- to 12-year wait for a slip. An additional 30 to 40 slips won’t make much of a dent, but there are generational changes that occur among the owners of Lake Hood’s plane population. “They change hands from one owner to another, so not a lot of planes are being added,” Coons said. Change isn’t the goal so much as managing the public use that continues to attract visitors, residents, small business owners and new lake operations. “No one’s challenged us yet on the ‘busiest seaplane base in the world status,’” he said. “I don’t see anywhere else that has even approaching what is here at Lake Hood.” Naomi Klouda can be reached at [email protected]

Board approves 27 marijuana licenses where prohibition on Oct. 3 ballot

The Marijuana Control Board renewed 21 cannabis business licenses and approved 25 new businesses at its Nome meeting Sept. 14-15, but concerns were expressed that more than half of these license holders face a shutdown from Oct. 3 municipal elections. The Kenai Peninsula Borough, the Fairbanks North Star Borough and the City of Fairbanks all have upcoming votes to ban retail shops and marijuana grows. Of the 45 licenses approved, 27 are in those jurisdictions. The Alaska Marijuana Industry Alliance has campaigns on the Kenai Peninsula and Fairbanks carrying the message that a vote against the legal industry is a vote for the black market, said Cary Carrigan, the group’s executive director. “I’m worried enough to tell you that I am investing in this process,” Carrigan said. “If marijuana is made illegal, it will immediately enhance the black market.” Residents of Alaska voted in 2014 to legalize marijuana, but local governments were granted the right of opt-outs in their communities. So far, only North Pole has banned legal pot sales in an election last fall. Voters in Valdez decided against a proposed cannabis prohibition in May and the Matanuska-Susitna Borough voted to keep it legal in October 2016, just as the new businesses were licensed to operate. The state tax revenue raised to date is $2.3 million. One of the key arguments in favor of keeping marijuana legal is the revenue raised for the State of Alaska, Carrigan said. Yet, even Marijuana Control Board members are siding with opposite camps on the Kenai and Fairbanks ballot props. Soldotna Police Chief and board chair Peter Mlynarik is campaigning for a ban on the Kenai Peninsula. On KSRM Radio, he announced that he was involved in efforts to organize Prop 1, an ordinance “to prohibit the operation of any commercial marijuana establishment in the Kenai Peninsula and the Kenai Borough.” Though questions of conflict arose from callers during the KSRM talk show, “Sound Off,” Mlynarik responded that his position chairing the board is to represent public safety. He pointed out that among the five-member board “there is also two other positions … both occupied by industry and both of those individuals have marijuana licenses.” One of those is board member Brandon Emmett from Fairbanks, owner of Good Titrations. Emmett is working on the campaign to keep marijuana legal in the borough and city. The other industry board member is Nicholas Miller of Anchorage, who is president of the Anchorage Cannabis Business Association. Among the action items taken up, the board voted to extend the timing of public objections on licenses beyond the 30 days currently granted. Now a person or agency can bring up objections at any stage in the process. The board did not take up the agenda items put out for public comment from the July meeting in Fairbanks. One of those was the question of whether a cannabis business can offer a percentage of revenue to a landlord in lieu of rent. Executive Director Erika McConnell said the matter will be taken up with the board meets in Anchorage Nov. 16-17. License denials With few action items on the agenda, for two days the five-member board went through license applications and renewals. Though accused early on in public comments of “rubber stamping” licenses by a Talkeetna man who is against a new marijuana business opening there, the board turned down or postponed nearly a dozen license applications. One Fairbanks cultivator was denied a license based on objections and a technicality: Raven Buds on Lawlor Road in Fairbanks would be located too close to a juvenile drug rehabilitation facility. Tanana Chiefs Conference wrote to the board saying they would “revoke permission to use the access road running across their property if the license is approved,” McConnell advised the board. In a unanimous vote, board members turned down applicants Carol Bold, Dave Mullis and Kerri Mullis who wanted to open Raven Buds. “I can guarantee if someone wanted to put a marijuana operation in a YKHC (Yukon Kuskokwim Health Corp.) duplex, there would be objections,” said member Mark Springer of Bethel, who holds a seat designated for rural Alaska. “I’m going to vote no.” Emmett also objected. “Those most vulnerable to drug abuse are nearby,” he said. “I don’t think I can support that.” Another objection came from the City of Ketchikan over a license application for Northern Lights Cultivation. The Ketchikan City Council voted on Sept. 7 to protest the license on the grounds that the owners haven’t yet complied with all fire and safety codes. In a letter to the board, the Ketchikan City Council also said such a business is “not in keeping with public interest of the surrounding neighborhood,” because it would be located in a multi-residential building. The applicants Jesse Hoyt and Jacob Rodriguez answered questions for the board, contending they are addressing the city’s concerns and are due for a fire inspection in the coming days. The application was tabled until they comply with the city’s concerns, the board decided, in a unanimous vote. The board denied or tabled three other licenses over residency issues linked to their Permanent Fund dividends. The board had adopted regulations that define a resident according to whether they received a permanent fund dividend the previous year. Those denied a PFD based on residency would also be denied a license. But there are problems with using that definition, McConnell alerted the board earlier in the day when she recommended the board give the matter its attention as a new regulations project. Three applicants, High Tide Distributors of Nikiski, the Green Pearl LLC of Big Lake and The Connoisseur of Wasilla were all impacted by the PFD residency definition. One was denied a PFD because he was out of state the previous year for six months, but has lived in Alaska since 1971. Another checked a box stating he was out of town during the time of filing, but is also a resident. A third also claimed a clerical error that made his Alaska residency go unacknowledged by the PFD determination. McConnell wrote to the board that the PFD definition is confusing for two reasons. “The residency requirement that is evaluated through the PFD is for the prior year and (secondly) license applicants who apply in January through May would not know their PFD application status for that calendar year,” she told the board. To make the process less confusing, McConnell recommends changing the regulation language to “currently” meets residency requirements. In the meantime, those who were postponed due to the PFD difficulty will have to wait until the regulation is changed before they can resubmit an application, Program Coordinator Sarah Daulton Oates told the board. Seven other licenses were tabled until the next meeting Nov. 15 in Anchorage. Smell complaints Advertising violations continue tripping up cannabis businesses. This time, Stoney Moose was on the list after enforcement alleged the company claimed 13 items as having medicinal benefits online. State law restricts marijuana businesses from using statements or illustrations to say marijuana has curative or therapeutic effects. The Ketchikan owner found that its website developer had used Leafly, a subscription based mobile phone app that shows the location of the store. A specified type of strain then auto-populated to the Stoney Moose’s website. “Unbeknownst to me, that wording contained ‘Medical Benefits.’” The owner then was able to have the web developer remove the product descriptions, Mark Woodward, the co-owner, wrote to the board. Weed Dudes of Sitka also was cited for violation under advertising restrictions, this one for having a sign in the public right-of-way rather than attached to the building or storefront window. The owner, Michelle Cleaver, said she removed the sign. Smells emitted from commercial greenhouse marijuana facilities are bringing out neighborhood complaints and resulted in three of the five violations issued between July 15 and Sept. 13. Danish Gardens and Great Northern Cannabis Inc., both located on Anchorage’s Cinnabar Loop, were notified of violations based on the stinky smell complaints. In Danish Garden’s case, three neighbors wrote to AMCO enforcement about detectible odor of marijuana outside the premises. The law cited says the business “does not emit an odor that is detectible by the public from outside the cultivation facility except as allowed by a local government conditional use permit process.” To solve the problem, attorney Jana Weltzin said Danish Gardens installed a robust odor control system that includes commercial grade air intakes, exhaust fans, carbon filtration, air scrubber systems and de-ionization systems. Because they have a special land use permit, the law states the smell has to be contained within the property lines, not immediately outside the building, Weltzin wrote in the response to enforcement staff. She also complained that a licensee does not get a chance to address the accusers, yet the violation follows the business licensee through the process of municipal and state renewal and could mean a shut-down of the business. “We do not believe that AMCO Enforcement did their due diligence in determining just where these odors in question were coming from and we do not agree that unknown and unnamed accusers can willy-nilly cause substantial stress and damages to licensees of this new industry. People making complaint should be required to give their names and contact information,” Weltzin contended. What may underlie complaints is the attitude “we just don’t think weed should be legal,” she wrote. In the case of Great Northern Cannabis Inc., enforcement also received three complaints of detectible odor. Birch Horton Bittner &Cherot attorney Jason Brandeis responded that GNC management conducted a thorough review of the facility’s HVAC system and identified the source of the odor as a vent that emitted directly out the door. GNC then hired contactors to investigate and propose a mitigation plan that resulted in sealing off air that vent. The internal ductwork was relocated to pass through multiple filters before exiting a roof stack vent. They also doubled the number of filters associated with the vent, according to Brandeis. Parallel 64 was issued a violation notice for failing to tag marijuana plants taller than eight inches. This is in violation of the marijuana inventory tracking system. Parallel 64, located in Anchorage, responded that an internal misunderstanding led to the violation. They have since changed protocol to educate all employees about compliance. ^ Naomi Klouda can be reached at [email protected]

Bill secures missile defense, icebreakers, F-35s

The latest National Defense Authorization Act requires 20 new ground-based missile interceptors at Fort Greely near Fairbanks, additional F-35s at Eielson Air Force Base and the construction of six new icebreakers to serve an Arctic increasingly seen as threatened by Russia’s buildup of nuclear-capable icebreakers. Alaska Sens. Dan Sullivan and Lisa Murkowski voted in favor of the National Defense Authorization Act, a measure that easily passed the Senate in a vote of 89-3 Sept. 18. It recommends $700 billion in defense spending for fiscal year 2018 beginning Oct. 1. Just before going to the Senate floor to vote, Sullivan held a press conference to talk about how the measure will benefit Alaska during this “severe time” of threatens from North Korean President Kim Jong-un. “He (Kim Jong-un) is creating a capability to reach Alaska,” Sullivan said. “He leaked to the press that by next year, by some international community estimates, they can range at Lower 48 cities as well.” The overwhelmingly bipartisan passage of the NDAA is a significant step toward rebuilding America’s military strength, Sullivan said. “Despite increased U.S. diplomatic pressure, North Korea continues its highly provocative missile and nuclear testing,” Sullivan said. “Meanwhile, our nation’s top military leaders continue to warn that it’s no longer ‘if’ North Korea will have the capability to strike U.S. cities with a nuclear missile, but ‘when.’” Sullivan sits on the Senate Armed Services Committee where his priorities for defense spending were worked into 28 NDAA amendments. But NDAA is mainly just a roadmap for defense spending that authorizes plans for the next fiscal year that begins on Oct. 1, Sullivan said. It’s not an appropriation. Spending $700 billion will need to be approved in appropriations, set for a vote later this month. Yet Sullivan said he is optimistic the majority will be funded in the current mood of bipartisan cooperation and acknowledgement of the severe global threats. Earlier this year, Sullivan introduced Senate Bill 1196, the Advancing America’s Missile Defense Act. Sullivan’s missile defense amendment to the NDAA — like the AAMD Act — includes an increase of up to 28 ground-based interceptors or GBIs. “This is the second largest GBI capacity increase ever, and up to 20 of these GBIs are slated to go to Fort Greely,” Sullivan said in a call with the Alaska press. The amendment also includes language to help jump-start silo construction at Fort Greely and calls for a report analyzing the potential for up to 104 GBIs distributed across the U.S, he said. As part of $630 million in added funding for the Missile Defense Agency, Sullivan said he worked to secure an additional $27.5 million to begin the development of new space-based missile defense sensor technologies. Included also are six new icebreakers, the largest single authorization of icebreakers ever, Sullivan said. Gaining the icebreakers is still several years out, he acknowledged and must be funded through appropriation. But now Congress is acknowledging it has to improve America’s Arctic capabilities and access to this region for its growing strategic importance, he said. Sullivan included 10 Arctic-related provisions in the NDAA, including the authorization of the six new polar-class icebreakers, an examination of ice-hardening Navy vessels, and a Department of Defense review of what forces, capabilities, infrastructure, and deep water ports are needed to protect U.S. security interests in the Arctic region. But Russia has 40 icebreakers, Sullivan acknowledged at the press conference, and 14 of those have nuclear capacity, he said. “By comparison, they have super highways; we have dirt roads and pot holes,” he said. “Russia is intending to build 13 more, including nuclear icebreakers. This is an area we are woefully behind.” To counter Russian activity in Europe and the Arctic, Sullivan’s amendment supports the European Deterrence Initiative or EDI – a fund developed to counter Russia’s provocative activities. It is authorized at $4.6 billion in this year’s NDAA – and includes the Arctic as an area where U.S. military forces are needed to counter increased Russian aggression, he said. A total of more than 300 amendments were proposed to the fiscal 2018 NDAA, including a measure for a new round of base closings by Sen. John McCain, R-Ariz. But Sullivan said that’s not in step with the majority viewpoint, and he doesn’t see concern for base closures at a time when military buildup is required. This year’s bill authorizes a major hike in military spending that exceeds the $54 billion defense budget increase requested by President Donald Trump for 2018 aimed to gain more aircraft and ships. Given Alaska’s status as a strategic hub and the incoming F-35A squadrons, Sullivan advocated for the possibility of increasing the number of tankers at Eielson Air Force Base. Joint Base Elmendorf-Richardson in Anchorage already has a large F-22 presence and he believes it’s an appropriate location for the aerial refueling transport aircraft KC-46A because “it’s a strategically-located installation with abundant training opportunities.” The NDAA authorizes $168.9 million for military construction at Eielson AFB related to the bed-down of two F-35A squadrons by 2020. It requires $6.3 billion for procuring 60 F-35A fighters with $1.8 billion to fund 14 aircraft more than the administration requested. These authorized F-35As are likely part of the number designated for Eielson AFB, Sullivan said. This additional request for F-35As comes because it allows to “full-rate production” as planned in 2019. “This will help bring the cost down,” he said. Sullivan’s amendment supports future local reserve training projects in Alaska, including Operation Arctic Care, which provides roving medical and dental care to Rural Alaska villages. The Kodiak Pacific Spaceport Complex has become more important in global defense. Given the importance of assured access to space to U.S. national security, Sullivan’s amendment urges expanding the Department of Defense’s and the Missile Defense Agency’s use of FAA-licensed spaceports such as the one on Kodiak that hosted a pair of missile defense tests earlier this year and is scheduled for more under Defense Department contracts as well as one for the Israeli Arrow-3 interceptor. Sullivan also wants to modernize Alaska’s Air National Guard combat rescue units, encourage active duty rescue units to do additional training in Alaska, increase the number of helicopters in Alaska’s rescue squadrons, and secure funding for the Arctic Sustainment Package or kits that can be dropped to stranded individuals. NDAA secured increases of 5,000 additional active-duty soldiers and 1,000 active-duty marines. NDAA supported an across-the-board 2.1 percent pay raise for U.S. service members. Naomi Klouda can be reached at [email protected]

$15M Lake Hood hangar project embraces new design tech

Airport hangars are typically low-tech pieces of Alaska architecture designed to keep an airplane warm and safe from notorious winter weather. A $15 million project at Lake Hood in Anchorage is introducing a new kind of flexible hangar design featuring moving walls and floating lofts in a three-phase hanger construction project off Aircraft Drive. Steve Zelener, owner and developer of Lake Hood Hangars LLC, is employing new technology design materials to construct a more energy-efficient, space-saving expandable “box” hangar off Aircraft Drive on Lake Hood. Two critical reasons meant Zelener and project manager Stormy Jarvis wanted to use new construction methods on the old box design. One: There’s a hangar shortage at the largest seaplane airport in the world. There’s also a shortage of floatplane tie downs and there’s no room to build more. It’s so packed around Spenard Lake and Lake Hood that gaining a floatplane slip means it’s not unusual to sit on a waitlist 11 years before acquiring one. Two: “There isn’t much land left to develop and what’s here is poor soil,” Jarvis said. Composed of 10 feet of peat and sand on top of clay, 30 percent to 50 percent of a project’s cost can easily be in just dirt and gravel fill. Some 8,000 planes, including the large jets, utilize Ted Stevens Anchorage International Airport. About 90 percent of those are small fixed wing or general aviation planes like the well-known bush planes of Twin Otters, Cessna, Pipers and Beavers. “They’ve developed all the most desirable areas, and what’s left is the undesirable land,” Jarvis said. Infill gravel and dirt costs on the 3.3 acres were nearly $1 million. Given the lack of land, lateral and vertical design made sense. One concept no one else has employed in their hangar construction prior to the Lake Hood Hangars LLC is a floating mezzanine/loft that can be moved across the rafters to create more tail space or suspend planes in different configurations. That’s because these hangars are built of four concrete walls atop 30-foot pilings. “Hangars are typically made of metal, which means you had to have stronger rafters and the building would have to be taller and supported from the bottom, typically, not the top,” Zelener said. Inside the concrete structures, they didn’t use the typical posts that take up space and constrain usage. “One of the things that has taken extra time over the last couple of years,” Jarvis said, “is that we spent a lot of time really focusing on what the best designs would be. One of those, a big one, was being able to maximize the use of floor space and to do so was to eliminate posts or ways that made that floor space smaller.” Each building features six hangars. Remote Alaska Solutions is the building contractor, which is set to finish the first phase in December. Over the next two years, the other two phases are slated to be completed that involve two more buildings for six hangars each. “When we’re finished, the three buildings together will be able to fit up to 70 planes, depending on the size of the planes,” Zelener said. Potentially 40 airplanes inside will be more likely, yet even that number frees up a lot of surface space at the airport. The type of doors to be used are also new to the industry. “What you see normally is doors operated using belts or cables. Having hydraulic doors gives the advantage because cables break and when that happens, you can’t lift those doors. A company has to come and lift your door and fix your cables. That’s one issue that happens,” Zelener said. “It becomes a continuous maintenance issue. Hydraulics shut the door completely themselves. They’re lighter weight, insulated and keep out the cold better. You can open them manually.” The increase in usable space means multiple partners can lease a hangar, taking seaplanes out of the harsh winter elements as well as protect them from vandals. Dozens of planes at Merrill Field, the general aviation airport off Sixth Avenue, had their tires slashed last year. Alaskans tend to keep their $10,000 cars in a garage, but all around the airport, airplanes worth $500,000 to $1 million are left out in the cold, Zelener notes. More hangars were a crucial need at the airport for several years now, because if the planes’ owners had a choice, many would have preferred to keep them in a warm building. Insurance companies also prefer it, and depreciation on planes decreases when kept inside, he said. The total three-phase project includes 71,620 square feet on the market for private or commercial lease, with the first phase mostly leased and customized. Each hangar offers 23,872 square feet with an interior wall height of 24 feet. Starting at the foundation, Seth Kroenke, the president of Remote Alaska Solutions and project building manager, inlaid 13-inch insulated cast-in-place concrete and steel reinforced walls. The hangar doors and exterior walls are done with thermal high efficient triple glazing to better retain heat. Radiant in-floor heat is fed by gas-fired boilers and individual hot water heaters rated for 96 percent high efficiency under the Leadership in Energy and Environmental Design, or LEED, building certification standards. “You pay more on the front end of a project, but on the longer end, you save because the high cost of energy isn’t ignorable any more,” Zelenzer said. Zelener points to a typical construction hangar off the offices at 4451 Aircraft Dr. where his office is located. “Hangars are built cheaply of metal; the columns are bearing the walls and as they grow in height, there’s less room at the top than at the bottom; you might have 35 feet at the top and 50 feet of space at the bottom,” he said. That’s a loss of 15 feet. To keep that 15 feet of space for the better use of office lofts or plane suspension, Kroenke used the insulated concrete forms, or ICF, instead of a metal building’s super structure. The concrete and steel is supporting itself and it doesn’t need additional columns. The inner walls can be moved because they are non-structural walls. The walls inside the concrete outer structure divide into six separate lease spaces. These walls can be moved to accommodate a larger hangar space, if the lease calls for that, or a smaller one. One large hangar space can potentially hold six or even eight planes. The location is also critical, Zelener figures. His hangar project gives access to the Anchorage airport runways via Taxiway Victor to the west or for taxi to the east on Lake Shore Taxi Lane. In addition to the hangars, Zelener is making more floatplane slips available. Presently he leases nine in front of his offices off Aviation Drive. His private ramp can access the public water lane. There he is building nine more. When the entire hangar project is finished, it will show a new embracing of technology for an iconic Alaskan structure, Jarvis said. “Green technologies have been common in the states for 30 years or more, and it’s funny that the impression in Alaska is that renewable energy and innovative building technology isn’t embraced here. But it causes the most impact to help most of our projects,” she said. Zelener Group, the real estate arm of Zelener’s companies, manages properties in Anchorage, Nome and Dutch Harbor. The Solar Building in downtown Anchorage at 441 W. 5th Ave. is one example, though Zelener didn’t design it. Currently, the building supplies about 15 percent of its own power for the five-story office complex. He owns the Nome Federal Building and the airport structures at Dutch Harbor. In the long run, Zelener believes Alaskans have to get serious about energy efficiency and new ways to save time, space and money. “We figured a new way to design a hangar is a good idea for a lot of reasons,” he said. ^ Naomi Klouda can be reached at [email protected]

ADN sold after no other bidder surfaced

The Alaska Dispatch News will be able to stay in business under the new ownership of the Binkley Co. after a federal bankruptcy judge on Sept. 11 gave the go ahead despite concerns that the sale price of $1 million seemed a giveaway to those owed money from former owner Alice Rogoff. After hearing arguments lasting most of the day, Judge Gary Spraker of U.S. Bankruptcy Court, Division of Alaska, acknowledged the accelerated pace from filing to sale. Rogoff filed for Chapter 11 bankruptcy on Aug. 12, contending she suffered a revenue shortage of $125,000 per week and didn’t have cash on hand to pay vital bills such as employee insurance premiums and the newspaper carriers that deliver the paper. Now, a month later, the $1 million loaned by the Binkley Co., is spent. And by the end of the week, the ADN will have less than $500 in its bank account with payroll of $390,000 due next week, Finance Director Erin Austin told the judge. Aside from the Binkley Co., made up of siblings Ryan, Wade and James Binkley, and Kai Binkley Sims, and rural Alaska newspaper owner Jason Evans, all the potential buyers rejected purchasing an operation in such a degree of distress. “It remains abundantly clear the debtor is running out of money and she (Rogoff) is running out of time,” Spraker concluded. “There is no more money, there is no more time, and there are no other buyers… I am persuaded of the benefit to be realized from the sale going forward.” Binkley Co. President Ryan Binkley told reporters the real work begins now. He said he’s been assessing the number of employees but isn’t ready yet to announce cuts. “The No. 1 message I would give (to employees) is that they will receive a paycheck next Friday,” Binkley said. “And I would tell them to keep doing a great job every day.” Binkley declined to say whether the insolvent tangle of financial troubles was due to “mismanagement” on Rogoff’s part. But he said those who did work for Rogoff or sold supplies and were stiffed payment “didn’t get what they deserved, and that’s a shame.” At the opening of the hearing, Rogoff attorney Cabot Christianson urged Spraker to rule in favor of the sale in the community’s interest to preserve its only daily newspaper and to avoid laying off more than 200 people. He said he had hoped to hear from interested bidders in open court. But the one other prospective buyer, Steven Malkowich, owner of Alberta Newspaper Group in British Columbia, bowed out Sunday evening. No other potential buyers came forward to challenge the Binkley Co. bid. At issue was the complaint from attorney Michael Mills that Binkley was “paying an alarmingly low amount for the assets it is purchasing, which includes a sizable ongoing business with revenues of over $20 million a year.” Miller represents unsecured creditors owed millions by Rogoff that he characterized as “small businesses left holding the bag” such as M&M Wiring Service, which wired the Arctic Boulevard warehouse for the Urbanite Press purchased from a Tennessee company, J. Birket Inc. Both are among 180 individuals and businesses owed more than $2 million by the Dispatch. Through testimony from ADN finance director Austin, Rogoff and media consultant Bob Kaufman, Christianson sought to show Spraker the Dispatch “had beaten the bushes” trying to locate potential buyers. Kaufman, working for Rogoff since June, said he rallied five prospective buyers to travel to Alaska. One, Malkowich, told Kaufman that ultimately he wouldn’t be comfortable buying a newspaper in this much financial distress. Saving it would mean a “kick in the gut to this community because it would take major surgery to keep it going,” Kaufman said, referring to massive cuts in expenses and laying off many of the 212-member staff. Another representing Wick Communications, a national chain that owns the Frontiersman, the Anchorage Press, and a press that prints several rural Alaska newspapers, told Kaufman he wanted to see the Dispatch succeed. But he “considered it to be extraordinarily risky to buy it.” Kaufman also went to a national-level media broker who negotiated more than 50 percent of all large media sales in the country in recent years. “He told me that he could count the number of people with fingers on one hand that would be interested,” Kaufman said. The biggest problem is that the Dispatch doesn’t have a place of its own to print the paper, Kaufman said. Currently, the giant Goss press is housed at the GCI building on Northway Drive where it was built into the building. Extricating it will take more than $1 million and GCI has made it clear they want the press out of their building. The Dispatch is cast into free-fall insolvency because “if you can’t get this thing printed at a reasonable price, you will never make money,” Kaufman said. Binkley Co., attorney Erik LeRoy put Ryan Binkley on the stand to testify that the $1 million price tag is no bargain, but rather a money pit. “What is it that you call things we discover that you don’t like?” LeRoy prompted Binkley. “Snakes in the grass,” Binkley responded. Every day, there’s a new snake in the grass in the form of an unexpected expense or problem that must be resolved in order to continue operations of the now 71-year-old newspaper, Binkley said. “It’s been an interesting education,” he said. In addition to the $1 million loan that now transfers to the purchase payment for the Dispatch and certain assets outright, he also is paying Rogoff’s past due Municipality of Anchorage property taxes of more than $56,000. Next week, when Dispatch employees are paid, Binkley Co., immediately assumes that liability and will supply the $390,000 payroll. The outstanding debts listed in Rogoff’s bankruptcy filings total $15 million. But of that, Rogoff counts herself as owed $12.7 million for personal money she used to keep the Dispatch afloat in 2015 and 2016. The Dispatch also is carrying $1.3 million in account receivables from companies and individuals who owe the paper money for ads and subscriptions. Mills considers this an asset that should be set aside for paying the unsecured creditors. But Austin testified that many customers apparently stopped paying their bills during the limbo transition between bankruptcy and the judge’s decision on whether it should be sold to the Binkley Co. or liquidated for cash to pay creditors. Normally, Austin said, the Dispatch collects $335,000 per week in revenue. “We haven’t reached that on any of the weeks since the bankruptcy,” she testified. Since filing bankruptcy, that amount is closer to $250,000 per week, she said. Christianson was able to convince the judge that even a large amount of owed cash isn’t an asset that can be counted while much, or or all of it, would not be collectible if the company were liquidated rather than sold. Spraker agreed that the conversation about what is owed for Rogoff’s many debts will need to wait for a hearing on Sept. 22. By then, what assets the Binkley Co., takes and what assets are left on the table for liquidations will be sorted out, he said. The U.S. Trustee, who has recommended the case be converted to a Chapter 7 liquidation sale to settle some of the unsecured creditors, agreed that the discussion on liquidating assets should wait until Sept. 22. The Trustee, who is charged with overseeing this bankruptcy on behalf of the creditors and general public, did not object to the sale of the Alaska Dispatch News to the Binkley Co. Naomi Klouda can be reached at [email protected]

Rogoff faces creditors at bankruptcy hearing, claims $12.7M debt

The largest unsecured creditor was able to question Alaska Dispatch News owner Alice Rogoff under oath in federal bankruptcy court Sept. 7 only to discover for the first time that she disputes the $508,000 unpaid invoice for $1 million worth of work done wiring a press at her leased Arctic Boulevard warehouse. Rogoff also explained why she now lists herself as the largest unsecured creditor of the newspaper she owns with a claim of $12.7 million. Mark Miller, owner of M&M Wiring Service, said he has waited nearly a year to hear anything from her that would explain why she didn’t pay him for work that was part of Rogoff’s attempt to install new printing presses at the location and vacate the printing operating in a Northway Drive building owned by GCI. During a special meeting of creditors in Anchorage Thursday afternoon, Miller was able to ask Rogoff, who appeared in court in person for the first time after phoning in for previous hearings, if she acknowledged M&M Wiring and contractors had done substantial work at the Arctic Boulevard warehouse. “Yes, but less than we expected by a sizable measureable,” Rogoff responded. “Did you talk to me about why?” he asked. “No,” Rogoff admitted. Miller was one of three people who volunteered to sit on the Unsecured Creditors’ Committee that met at the court. Mostly, attorneys for creditors quizzed Rogoff about her assets under the direction of the U.S. Trustee attorney Kathryn Perkins, who is a Justice Department official appointed by the court to guard stakeholder interests. Anyone filing for bankruptcy must appear in court at the meeting with creditors, officially known as a 341 hearing. The purpose is to allow the trustee to verify the accuracy of bankruptcy filings that relate to finances. The end goal is to liquidate these assets for paying off bills owed to individuals and businesses. Catalyst Paper owner Craig Graham of Richmond, British Columbia, and attorney John McKay of Anchorage were the other two on the committee. Neither Graham nor McKay asked questions. Perkins asked a series of questions about her latest filings that now list her among the unsecured creditors, with a Sept. 6 filing increasing the amount she claims is owed to her from $8.2 million to $12.7 million. Rogoff did not include herself among the unsecured creditors of the ADN after she filed for bankruptcy Aug. 12. Northrim Bank is the largest secured creditor with a $10.2 million balance on a $13 million loan Rogoff took out in 2014 to purchase the ADN from McClatchy. She first claimed herself as a creditor in an Aug. 28 filing and updated that in her Sept. 7 filing. “That is from two promissory notes to funds I deposited in 2015 and 2016 to the Alaska Dispatch,” Rogoff said. She said some of it was to make payroll and other day-to-day expenses of the newspaper. ADN Financial Director Erin Austin elaborated to Perkins that when funds were low for paying bills, they would let Rogoff know. “She would transfer money into the company account and we placed it on a balance sheet,” Austin said. “At the end of the year, we would convert it to a debtor’s note.” It was also established that the presses Rogoff owns now present at the Arctic warehouse — an Urbanite Printing Press and a V30 Commercial Heat Set — are worth a combined $2.5 million. Rogoff said there is a market for the presses and she is hearing from people interested in buying them. Fillings show assets of several vehicles and a $9,000 drone the company owns that could be sold for cash to pay creditors. The drone is used to take photos for the newspaper, Rogoff said. Long trail of bills In the latest filing after Rogoff increased the amount she claims is owed to her by the newspaper she owns, the total unsecured debt stands at about $15 million. An 84-page document filed Sept. 7 listing companies and individuals she owes money to shows the bulk are Alaskans. Smaller companies, sole proprietors, and multiple paper and printing companies are owed hundreds of thousands. She owes back rent to the owners of the Arctic Boulevard warehouse of more than $143,000. About 100 are freelance writers and staff owed $100 to $900. She owes the Municipality of Anchorage $56,500 in back taxes and GCI for rent and utilities totally $1.4 million. Nationally, Rogoff leaves a trail of debt for other content providers. The Washington Post is out for $11,700 and the Wall Street Journal is owed $10,277. She owes the New York Times for syndicated columns and Thomson Reuters for financial news. In the Midwest, she owes a Chicago paper company $6,307, a Wisconsin technology company $14,000, a Philadelphia newsprint concern $34,871, and Tennessee’s Birket Co., $161,000 for her Urbanite printing press. The latest filing shows new debts were added in, including $25,000 to the Trustees of Columbia University that she told Perkins is paid through her Alaska Dispatch account. M&M’s complaints Mark Miller is the owner of M&M Wiring Services, which specializes in electrical contracting for large and small projects. His company recently completed work on two projects at the Port of Anchorage for Anchorage Sand & Gravel. In August 2016, he was hired to wire the Urbanite press Rogoff purchased from Indiana and shipped to Alaska for installation at the 5900 Arctic Blvd. warehouse. “We wired the press and other equipment they moved from Northway (site of the ADN Goss printing press.),” he said. Employees of J Birket Inc. of Lebanon, Tenn., traveled north to install the press, Miller said. M&M Wiring came in with subcontractor North Coast Electric, which completed about $19,000 for materials. By December 2016, he and his contractors were dismissed without much of an explanation, he said. M&M held outstanding invoices from Rogoff, but said he paid his own subcontractors. “I would be embarrassed if I couldn’t pay them,” he said. But getting stiffed for $508,000 work meant not only he didn’t get paid for the job his company completed. He was also out the money to his subcontractors. Given the cash shortfall, last winter he laid off two of his fulltime employees. He said he’s “adamant” he wasn’t going to get dragged into bankruptcy over the loss and worked extra hard. “We poured our hearts and souls into getting this done and doing everything professional,” he said, referring to the work at the Arctic warehouse. “It wasn’t a handshake; it was documented and professional. No one does a million dollars worth of work without contracts. Then she failed and refused to communicate on every level.” During the work, Miller reported to project managers hired by Rogoff. One was her “friend and dog sitter,” Ed McCoy; another was her attorney, Adam Cook, Miller said. A replacement project manager was the one who sent him a letter saying M&M’s work was being terminated. “We had completed five months’ work, and worked literally until the last minute, until we got a termination letter telling us to turn in the final invoice and ‘we’ll get you paid,’” Miller said. Three weeks later, Miller submitted his invoice. When months went by and he didn’t receive payment, he wrote to Rogoff. He didn’t receive a single response. “I sent her emails last March asking to meet up and discuss what the situation was in not paying the invoice. It was like a bomb went off. Her lawyer (Adam Cook) fired back and said, ‘If you email my client one more time, I’ll file a harassment suit.’” Miller said. Miller believes the project manager McCoy, who reported directly to Rogoff by visiting her home each day after work, “threw us under the bus.” “She was concerned about the schedule,” Miller said. “He (McCoy) would say, ‘two more weeks; it should be done in two weeks.’ She kept pressing him on it. Adam Cook, was another project manger and he’s also her lawyer. He approached Ed and asked what will it take to fix the project.” Cost cutting and speeding up completion were the two reasons Miller assumes for curtailing his contract with Rogoff. Dealings with Rogoff lead him to now see her as having “utter disregard.” “It was the flippant response she had and why she does she do that? It appears, in my opinion, she thinks, ‘I’m Alice Rogoff. I don’t have to pay you.’ I’ve heard she calls Alaskans a bunch of hillbillies.” Miller said he joined with two other contractors (Anchorage Sheet Metal and Precision Maintenance and Fabricating Inc.) to file the lien on the press at Northway Drive. M&M and Anchorage Sheet Metal have since released their lien, but M&M is counted as the largest unsecured creditor in Rogoff’s ADN bankruptcy proceedings. Now he stands behind Rogoff in her own line-up of owed bills. At the heart of the bankruptcy filings is a lack of disclosure so far on what income Rogoff possesses that could be used to pay the bills. She has a separation agreement with her billionaire husband, David Rubenstein that provides $5 million per year, according to an Alaska Superior Court filing in another lawsuit brought against Rogoff by former Alaska Dispatch News partner Tony Hopfinger. Hopfinger is suing to collect $900,000 of the $1 million she agreed to pay him in a contract written on a cocktail napkin. In court Sept. 7, Rogoff refused to answer questions about her personal finances regarding her marriage to Rubenstein. She is allowed that, according to Perkins, who warned creditors they could only quiz Rogoff on matters related to the debt as it applies to the ADN. “She tries to keep her finances under wrap,” Miller said. “My feeling is that all these Alaskans she owes money to are pawns in a divorce settlement. She is using us for leverage for a bigger divorce settlement from her husband.” GCI also allege Rogoff is hiding her finances behind corporations she formed in Alaska. “ADN and AK Publishing are mere instruments of Alice Rogoff, the corporate forms of which continue to be used by Rogoff to defeat public convenience and justify wrong,” GCI attorneys wrote in their Aug. 10 Alaska Superior Court filing to evict the ADN from the Northway Drive building the telecom bought for $15 million as part of the deal that allowed her to purchase the paper. GCI attorneys are arguing that, under Alaska law, Rogoff’s conduct pierces the corporate veils of ADN and AK Publishing. That makes her personally liable for both companies’ debts, obligations and judgments to GCI, they contend. A sale hearing is scheduled for Sept. 11 to auction off the Alaska Dispatch to the highest bidder. The Binkley Co. is loaning the ADN $1 million to pay off immediate debts to allow the newspaper to maintain operations in exchange for a $1 million purchase price. Any other bidders have until 5 p.m. on Friday to submit $1 million in cash if they want to bid for more on the company. If no other bidder comes forward, the asset purchase agreement between the Binkley Co. and Rogoff could be approved. How the unsecured creditors such as M&M Wiring will receive any payment will remain unresolved. The U.S. Trustee has recommended converting the case to a Chapter 7 bankruptcy to allow the liquidation of all assets not purchased by the Binkley Co. in order to pay creditors. Naomi Klouda can be reached at [email protected]

First Western Alaska marijuana licenses to be taken up in Nome

Though illegal marijuana sales continue to show up as arrests in the police blotters of rural Alaska, not many applicants have stepped up with requests to open legal dispensaries in those towns. Two Nome businessmen want to change that on Norton Sound. Robin Thomas’ application to the Marijuana Control Board to open Gudlief and James Fejes’ application for Tundra Fire LLC are up for review before the board at its meeting in Nome Sept. 14-15. City Manager Tom Moran said the Nome City Council has debated and granted approval for the two applications, with certain conditions. “I don’t think public participation in the discussions has been enough to knock your socks off in either direction,” Moran said. “We’ve heard testimony from people giving more pros than cons. Usually supporters have tried to sway the planning commission and the council and there hasn’t been a lot of opposition.” The commercial marijuana industry is authorized under an ordinance passed by the Nome City Council, Moran said, but they didn’t set zoning rules or a separate tax for it yet. “We’ve taken a wait-and-see approach about those issues,” he said. Thomas, a retired commercial fisherman, wants to open the first licensed cultivation facility in Nome this winter, figuring it could be the first in western Alaska. Kotzebue has seen no license applications move forward from that hub town, said Tom Adkinson, a city official who operates the town’s only legal liquor store. Dutch Harbor/Unalaska doesn’t have one and neither does Dillingham, said City Manager Shawn Gilman. Cary Carrigan, executive director of the Alaska Marijuana Industry Association, said there aren’t any legal dispensaries in western Alaska yet, “but there are plans.” “A number of people are working on this, how to create their own supply so they can develop the retail for the rural demands through a legal system,” he said. “And that’s something I try to tell people: ‘By supporting legal growing businesses, you’re fighting against the criminal element. You’re fighting crime.’” Thomas began the process in February for a grow operation in a 600-square foot building next to his home, and changed course to now add a retail license to open a facility, he said. He plans on cultivating 10 plants per week. “I have a retail space 8-by-10 (feet) in my foyer, and it will be simple,” Thomas said. “There will be a menu for the customer to look at, and from there they can purchase. Everyone’s been waiting for over a year for me to get up and running.” Fejes, an Anchorage resident and owner of Jimmy Blaze Entertainment, is planning on opening a dispensary on the historic Front Street in Nome. The Nome City Council took up concerns about his license application at an August meeting to decide whether it complied with keeping the required distance from the Check Point Youth Center. The council found that it did comply. Both are now approved to open, pending the Marijuana Control Board’s approval, Moran said. “There’s a bunch of wait-and-see going on that makes it difficult for people in rural Alaska: how to test by a lab, how to bring it in; there isn’t a lot of expertise out there,” Thomas said. “But I think there’s probably room for 10 more legal businesses like mine in the Norton Sound area.” The rest of the agenda In addition to renewing or approving licenses, the Marijuana Control Board will be looking at key measures after items were put out for public comment from the July 13-15 meeting in Fairbanks. After that packed agenda, they sent out about a dozen measures, but don’t expect debate over onsite marijuana consumption to be among them. The onsite consumption matter — whether to allow public space for smoking and eating marijuana products — won’t be back for the board’s vote until its November meeting in Anchorage. It was set for an extended 60-day public comment period to allow for hearing from municipal governments. Direct or indirect financial interests: Should landlords be able to take a percent of sales in-lieu of rent? Public comments are in and the board should be able to vote on the measure in Nome. At the last meeting, by a 3-2 vote, the board settled on a proposal to prohibit future license applicants from lease arrangements that include a percentage of revenue in exchange for rent. Alcohol and Marijuana Control Office Executive Director Erika McConnell estimates at least 25 percent of the nearly 200 marijuana businesses across the state have this sort of lease arrangement. Some landlords take 5 percent to 20 percent of revenue in the grow operation, dispensary or other cannabis businesses in exchange for decreased rent, which is said to help because banks cannot loan money to the new business owners and many tenants occupied space for months before they were able to open. McConnell asked the board to make a decision based on two proposals. One asked to eliminate percentage lease or rent agreements from “direct or indirect financial interest.” The other option would have allowed a financial interest limit of 5 percent or less, and the landlord would then be required to undergo the same licensing review as the business owner. After lengthy debate, the board agreed to adopt the first version prohibiting any percentage of sales agreements and sent the measure out for 30-day public comment. Now the board could amend it or adopt it as is. If the board amends the proposal it will have to go out for comment again. Ad watch: A dispensary’s ability to promote its facility is being refined in regulations. Currently, many of the violations are related to advertising, said Enforcement Supervisor James Hoelscher in his last report to the board. One of the intents of all advertising regulation is to avoid advocating or encouraging youth consumption of marijuana products, rural board member Loren Jones said. But not being able to sponsor public events as a marijuana business “demonizes the industry so that they can’t participate in community-building events,” industry board member Brandon Emmett said in July. The new regulations will specify that all promotions must take place inside the licensed business, not in a park or at a public event. New regulations also would separate business advertisement rules from product advertisement rules, if approved by the board. Local control: Questions about local government jurisdiction also will be considered. Currently, cities must be notified each time a license is granted to an operation in that jurisdiction. But the land-use authority may be a borough government and in rural Alaska, the local government in authority might be a Tribal entity. A new regulation would require notification to go to all relevant local entities that have separate duties over authorizing land use and taxes. The board will vote on whether to approve the new notifications. Timing: The board looked at extending the amount of time for public comment on new or renewing marijuana license matters. They will vote at the Nome meeting on whether to remove the 30-day period and give no deadline to the objection or comment time period allowed. The agenda for the Sept. 14-15 meeting is not posted yet, but check for its status at: ^ Naomi Klouda can be reached at [email protected]

Alaska latest state to access FirstNet for first responders

A deal worked out by AT&T and the State of Alaska will supply a new private network for the state’s emergency responders that work in times of natural disaster when many first responders are jammed into the same networks as everyone else. Gov. Bill Walker gave the go-ahead Aug. 30 for the State of Alaska to opt in to FirstNet by AT&T, a system that prioritizes public safety in emergency cases over regular commercial cell phone users. John Rockwell, the statewide 911 coordinator for the Alaska Department of Public Safety, gave an example to show the life-saving benefits soon to be at emergency responders’ fingertips. “Let’s say there’s a major incident on the highway where we have 30,000 cars on it a day,” Rockwell said. “If we have a major incident and it’s in an isolated spot with one cell tower, and the public is trying to call home, that could preclude emergency responders from getting onto the same network.” In that case, the public consumes most of the bandwidth. “With FirstNet, they can move the standard commercial users over to a ‘slow lane,’ or if needed, kick them off,” Rockwell said. “Think of the communication system as a three-lane highway and as many people are on it as the highway can withstand. We can move commercial users to the middle lane or to the slow lane. “If more public safety uses are needed, then all are moved to the slow lane so public safety can use two lanes. They won’t have to worry about not being able to continue their job.” Alaska State Troopers and all police departments in the state still use three-way radio dispatch. The new system will give them data at their fingertips on where equipment is located that could be accessed, so the call or information isn’t routed through a dispatch center. It gives them video of a fire before they get there, so firefighters know what to expect. A whole host of public safety-specific tools will be an app click away. The First Responder Network Authority, or FirstNet, came about as a recommendation from the 9/11 Commission after the terrorist attacks in New York City and Washington, D.C. in 2001. Now it is an independent authority within the U.S. Department of Commerce that was chartered in 2012. The mission is to ensure the building, deployment, and operation of the nationwide, broadband network that equips first responders to save lives and protect U.S. communities. Alaska became the 16th state to opt in to FirstNet. Since 2014, AT&T has worked with Alaskan officials to put the new system in place that gives emergency responders a network all their own. Rockwell played a major role. AT&T, which spent about $150 million from 2014-16 upgrading its Alaska network, was selected by FirstNet to build out the nationwide system. Ironically, Texas Gov. Greg Abbott was preparing to opt into the FirstNet system before Hurricane Harvey struck and brought devastating floods, Rockwell said. Rockwell wears another hat as the Alaska statewide inter-operability coordinator. He has 49 other state counterparts, and receives communications data from around the nation. In Texas, he found that only 5.1 percent of the towers went out in Houston, while 7 out of 10 cell tours were knocked out in the other hardest hit Texas counties. Still, 75,000 calls were completed between Friday night and Monday morning through Houston’s call center. Texas 911 also accepts texts; that’s a tool Alaska doesn’t have yet. “Almost everyone believes you can text 911 if you’re in an emergency. Unfortunately, that’s been slow to roll out. You can’t write a text in Alaska and have it go to a public safety point,” Rockwell said. This relates to the FirstNet issue only in that texts take up far less bandwidth than a phone call, and can be placed in many parts of Alaska. Texting is particularly important in an abduction or domestic violence matter when victims can’t or shouldn’t talk on the phone. “We’re working on getting that ability,” Rockwell said. Walker’s decision enables FirstNet and AT&T to begin creating the entirely new wireless ecosystem for Alaska’s public safety communications, Walker said in a news release. He’s excited about the possibilities. Alaska’s first responder subscribers will have immediate access to AT&T LTE network. The infrastructure buildout won’t incur costs for the state because the investment is from AT&T, in a public-private partnership with FirstNet. They will build, operate and maintain the wireless broadband communications network for Alaska’s public safety community at no cost to the state. The FirstNet network also will create an entire system of modernized devices, apps and tools for first responders. But the costs for new phones and subscriber plans will be a state expense, said Rockwell. He is tasked with examining various plans to come up with cost estimates. Nothing has yet been signed off, but so far, the costs are fairly reasonable. A plan for 75 devices and 500 gigabytes of data works out to about $27 per month per officer, Rockwell said. The entire network will be up and running by year-end, yet as of the time of the governor’s signature, a limited use is already in effect, Rockwell added. The network won’t only be available to Alaska State Troopers and police departments across the state. It will also be accessible for firefighters, utility workers who need to turn off power in case of an earthquake or other disaster, emergency road crews, Department of Transportation workers and any number of borough or city-level emergency responders, Rockwell said. Here’s some examples for what it can do: • Connect first responder subscribers to the critical information they need in a highly secure manner when handling day-to-day operations, responding to emergencies and supporting large-scale events, like the Alaska State Fair in Palmer or the Iditarod Sled Dog Race that stretches from Anchorage to Nome. • Create efficient communications for public safety personnel in agencies and jurisdictions across the state during natural disasters. This includes events like the 2014 Keystone Canyon avalanche, the 2011 Bering Sea “super storm” that impacted coastal Alaska, and the 2015 summer wildfires that raged across many parts of the state. • Enhance network coverage throughout the state’s rural areas. • Drive infrastructure investments and create jobs across the state. • Usher in a new wave of dependable innovations for first responders. This will create an ever-evolving set of life-saving tools for public safety, including public safety apps, specialized devices and Internet of Things technologies. It also carries the potential for future integration with NextGen 911 networks and Smart Cities’ infrastructure. Rockwell sees another application as well. It takes Alaska out of isolation and puts it in touch with a dedicated nationwide system, allowing Alaskan responders to speak to Texan responders or a California team in cases of manhunts, storms or abductions. Even Canada has plans to join. “All states are connected to this public safety ecosystem – written for them on a nationwide scale,” Rockwell said. “Looking at it from a nationwide perspective, it will remove the silos.” ^ Naomi Klouda can be reached at [email protected]

Rogoff attorney files proposal for auction sale of Alaska Dispatch News

Alaska Dispatch News owner Alice Rogoff’s attorney is proposing to hold an auction for the sale of the newspaper at an upcoming bankruptcy hearing Sept. 11, and spelled out a path forward for employees at the deal’s conclusion. The Binkley Co. is loaning Rogoff $1 million for paying off immediate debts that allow the newspaper to continue operations. That amount converts to a purchase price, if they are the highest bidder, under the proposed terms. But if another entity offers more, the Binkleys will be reimbursed $100,000 of their expenses, plus paid 3 percent of the purchase price. If an interested buyer steps up to buy the Dispatch on better terms than the Binkley Co., is offering, Rogoff proposes certain auction ground rules in the Sept. 5 filing with the federal bankruptcy court: The bidder would need to deposit $1 million with Rogoff attorney Cabot Christianson by 5 p.m. Sept. 8 to show intent to buy. These funds would be forfeited if the buyer fails to close within three business days of court approval. If there are multiple bidders, and the high bidder fails to close within three business days, then the second high bidder must close within three days. Bidding increments are required. The first bid above Binkleys $1 million must be $1.2 million or higher. Each increment thereafter would be $100,000. By the close of business day Sept. 8, the Binkley Co., will bid the total of its $1 million loan advances and its expenses up to $100,000 as an offset bid. Rogoff’s filing comes within days of the U.S. Trustee request that all of the assets not purchased by the new owners should be liquidated by a Chapter 7 official. The motion by the U.S. Trustee to convert the case to a Chapter 7 bankruptcy after the sale is approved expresses concern that the people and businesses owed money won’t receive any compensation, said Attorney Kathryn Perkins, acting for the U.S. Trustee Office. She makes the case that after the Sept. 11 sale closes, Rogoff “will face no reasonable likelihood of rehabilitation,” or legalese for restoring payments to those owed money. Bankruptcy Judge Gary Spraker is expected to rule on the trustee’s motion to either allow the Chapter 11 to convert to a Chapter 7 or dismiss the bankruptcy outright at a Sept. 22 hearing. As for other paths forward, Rogoff’s Sept. 5 filing sought to “spell out some of the assumption and expectations of the parties that were implicit in the asset purchase agreement that should be made explicit.” GCI: Because GCI has “no interest whatsoever in the having the press remain at the Northway location for more than a few months,” Rogoff has personally guaranteed the cost of removal. Those costs are estimated to be about $1 million for dismantling the giant Goss offset press and all its accessories. “It is possible that this Chapter 11 will convert to a Chapter 7 while Binkley is still using the presses, which means that, if Binkley does not take title to the press at closing,” it could go on the auction block, Rogoff’s attorney wrote. Until the time it is moved, however, the motion makes a provision that the buyer can use the printing press free of charge until Dec. 31, 2018. Arctic Boulevard warehouse: In 2016, having received an extension of her lease with GCI at the Northway Drive building where the paper is still printed, Rogoff began installation of an Urbanite printing press at 5900 Arctic Blvd. in order to have a press after vacating the GCI location. “That construction was beset with problems. The installation of the press has not been completed and there is no path towards that press ever working,” the motion states. The Binkleys have agreed to take this press as part of an amendment to the purchase agreement, but are also granted the right to turn it down before the sale closes, according to Rogoff’s Sept. 5 filing. 212 employees: After closing, the Binkley Co., or another buyer that casts the winning auction bid, can offer employees continued positions. But the offers, wages and other conditions will come from the new owners and the former arrangements with Rogoff would discontinue. Severance pay will be issued to any of the 212 employees who don’t want to continue to work at the Dispatch, with scheduled paychecks for one through six weeks provided based on length of employment. Rogoff is protecting Dispatch employees by requiring the buyer to continue to pay present salaries, health insurance and other benefits until they become as the new owner’s employees. Unsecured creditors: For the lengthy list of about 180 people and businesses collectively owed more than $2.3 million from Rogoff, it may be good news to hear a U.S. Trustee is watching out for their interests. However, Rogoff also claims herself as a creditor in her Aug. 28 filing, stating a debt of $8.2 million classified as “purchase money” that raises the total unsecured claims to $10.5 million. Chapter 11 is filed in cases when a business intends to reorganize and keep operating as a plan is developed to repay creditors. A Chapter 7 bankruptcy calls for liquidation of assets with the proceeds distributed to creditors. Under a deal struck between Rogoff and the Binkley Co., Rogoff is selling assets related to operating the ADN for $1 million. Judge Spraker is expected to approve the asset purchase agreement in a hearing set for Sept. 11. If the sale goes to another buyer, these terms would still apply. Specifically, Ryan Binkley, his siblings and partner Jason Evans are only buying a portion of the corporation owned by Rogoff, as spelled out in filings so far. According to her own financial filings on Aug. 28, Rogoff estimates $11.8 million worth of property assets. Of that, $4.7 million is estimated as the value on equipment that includes the printing presses. This, and other assets that are not part of the sale, are the focus of the latest filings by the U.S. Trustee. The unsecured creditors are an array of local and national businesses from ink and paper suppliers to electrical contractors. “It is unclear who will take control as debtor-in-possession after the Sale Hearing,” Perkins wrote in her motion to U.S. Federal Bankruptcy Judge Gary Spraker. “The United States Trustee presumes that Binkley’s manager (Jerry Grilly) will not remain in control of the debtor-in-possession after the sale, and it is unclear if Ms. Rogoff will step in to liquidate any remaining assets.” The best-suited person to liquidate any remaining assets would be a Chapter 7 trustee, Perkins argued. This has the benefit of bringing in another level of oversight. Chapter 7 trustees are private individuals, not government employees, who are appointed by the U.S. Trustee to administer Chapter 7 bankruptcy cases, said Jane Limprecht, the public information officer for the U.S. Trustees. In filings with the court, the Binkley Co. wrote that it will decline to renew the nearly $40,000 per month lease on Arctic Boulevard and declined renewing the $47,700 monthly lease at the current offices on C Street. The purchase asset agreement is meant to leave the Binkley Co., “unencumbered” of Rogoff’s debts, according to filings. “Rogoff… made it clear that (she) lacks the financial capability to immediately fund any activities beyond the sale hearing,” Perkins wrote. “Thus, absent an increase in the proposed purchase price sufficient to generate a return to the estate, the debtor will lack sufficient capital to fund the removal of any remaining equipment from the leased premises in order to liquidate it for the benefit of creditors.” This inability to remove the Arctic Boulevard printing presses and other equipment, or in the case of Northway Drive landlord GCI’s inability to access that equipment until after Oct. 11 under the terms of the GCI stipulation, “diminishes the value of that equipment to the estate because inaccessible equipment would be substantially more difficult to market and liquidate for the benefit of creditors,” Perkins wrote. But if a Chapter 7 is granted, the value of the unpurchased assets could at least be potentially preserved, she added. “As a trained bankruptcy professional, that person would have bankruptcy knowledge to ensure maximum recovery for all creditors involved.” A hearing is set for Sept. 22 before Spraker to consider Perkins’ motions. Her filings show there’s a legal choice to either convert the case to a Chapter 7 or to outright dismiss the bankruptcy. But Perkins argues against dismissing outright the Chapter 11. “If the case were dismissed, it would be unlikely that the creditors would see any recovery,” she wrote. Naomi Klouda can be reached at [email protected]


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