Yes, employee must travel overnight with no compensation

Sam Smith is being sent to a convention in Las Vegas by his employer and has been told that he will be flying to Las Vegas on a red-eye flight. Sam is excited about going to the convention, but objects to having fly during the night, particularly because he will not be paid for the travel time.His employer is having Sam fly during the night specifically to avoid having to pay him overtime compensation for his travel time. Is this legal? The short answer is yes.One of the more confusing areas of wage-and-hour law involves the rules for paying non-exempt employees for travel time. There are a number of different rules depending on when an employee is traveling, where the employee is traveling and why the employee is traveling.Generally, employers are not required to pay employees for "traveling to and from the actual place of" work, unless the travel is the "principal activity of the employee." A principal activity is one that is "necessary to the business and is performed by the employees, primarily for the benefit of the employer." If travel "is an indispensable part of performing one’s job," it is a principal activity and the employee must be compensated for the travel time.Employers are not required to pay employees for the time spent in an ordinary commute from home to work or from work to home. This rule applies whether the employee travels to a set work site or to a different work site.In Alaska, this means employers do not have to pay employees for commuting between Palmer and Anchorage, when the employee lives in Palmer and works in Anchorage. Nor does an employer have to pay employees for commuting between Anchorage and Prudhoe Bay.For travel from home to work in emergency situations, generally employees must be compensated for their travel time if they are traveling from their home to the location of one of their employers’ customers. For instance, a plumber who has to respond in the middle of the night to an emergency call at a customer’s building would have to be paid for his travel time.However, if the employee is called to the employer’s work site on an emergency basis, the Department of Labor has declined to take a position as to whether the associated travel time must be paid.Next, if employees are sent to work in another city on a special one-day assignment, then all of their travel time, less the time the employee would have spent in an ordinary commute to his or her regular place of work, must be compensated.For instance, if an employee who lived and normally worked in Anchorage had to travel to Girdwood for a one-day meeting, then the employee would have to be compensated for the travel time required to drive to and from Girdwood for the meeting.The most frequent situation for which an employee must be paid for travel time is when travel time is "all in the day’s work." For instance, the time an employee spends traveling from one work site to another work site during the course of a workday is compensable.Likewise, if an employee is required to report to a central meeting place to "receive instructions" or "to pick up and to carry tools" before being dispatched to an actual worksite, then the travel time between the meeting place and the actual worksite is compensable. However, the travel time between home and the central meeting place is not compensable travel time.If an employee is required to transport equipment or tools during a commute from home to a worksite, then the time is generally considered compensable. For instance, if an employee works for a service company and drives a company vehicle, which contains the tools and supplies needed by the employee to perform his or her job, then the employee must be compensated for driving to the worksite in the morning.However, if the employee is allowed to take the vehicle home at the end of the day, then the travel time between work and home is considered normal "work-to-home" travel and is not compensable.Whether an employee must be paid for travel time away from his or her home community overnight depends on when the travel time occurs. If the travel time "cuts across the employee’s workday," then the employee must be paid for the travel time. Otherwise, the employee does not need to be paid for the travel time.Thus, if an employee normally works between the hours of 8 a.m. and 5 p.m., then the only travel time they need to be compensated for on an overnight trip is travel time that occurs between the hours of 8 a.m. and 5 p.m. This includes travel time on Saturdays and Sundays, even if the employee does not normally work on those days.In Sam’s situation, if he is traveling from Anchorage to Las Vegas on a Sunday evening, on a flight leaving at 7 p.m., then his employer does not need to pay him for the travel time. However, if he flies to Las Vegas on a flight leaving at 1 p.m. instead of 7 p.m., then he is entitled to compensation for the time spent on the flight up to 5 p.m., even though he normally does not work on Sunday. Depending on when Sam’s workweek starts, those hours may well be overtime hours.Finally, if an employee works while traveling, then the employee must be paid for that working time, regardless of whether he or she would otherwise have to be compensated for the traveling time.Because of the penalties associated with failing to pay employees for all hours worked, employers should ensure they are properly compensating nonexempt employees for travel time. If employers have questions about whether they need to compensate an employee for travel time, they can contact the Alaska Department of Labor at 907-269-4900 for guidance.Kimberlee Colbo is a member of Hughes Thorsness Powell Huddleston & Bauman LLC in Anchorage. She can be reached via e-mail at [email protected]

State: Plenty of work for environmental firms

The environmental cleanup industry is alive and well in Alaska and is likely to stay that way for a while, according to Larry Dietrick, head of the state Department of Environmental Conservation’s spill prevention and response group."We’ve developed an infrastructure in private industry with the capacity to assess contamination and do cleanup very efficiently," Dietrick said."Our contractors are good across the range at work, from tank-yanking to dirt-burning, professional support services and analysis, and particularly the logistics support needed to work at remote sites in Alaska," he said.Dietrick estimates about $250 million a year is spent in the state on cleanup and environmental remediation, including $50 million to $60 million per year in Department of Defense cleanup projects at abandoned or active military sites.The petroleum industry is another big customer for environmental work, Dietrick said.BP Exploration (Alaska) Inc. and Phillips Alaska Inc., the two major North Slope oil producers, are engaged in a long-term program of cleaning out closed reserve pits used to store drilling fluids from oil wells.The industry is making good progress on this, Dietrick said. About 450 old reserve pits have been cleaned out, leaving 150 left to be cleaned, he said.There are no figures available for what the companies are spending on this, but it is a substantial effort, Dietrick said.In addition, BP and Phillips have committed to spending an additional $10 million a year in environmental remediation of old drill sites, including "orphan" sites where no one has accepted responsibility, he said.That is part of the companies’ charter agreement with the state, reached during the acquisition of Atlantic Richfield Co. by BP, Dietrick said.There are currently 2,011 statewide sites with identified contamination deserving attention listed in the state’s database, according to Steve Bainbridge, a DEC environmental manager in charge of the state contaminated sites program. Cleanup has been completed at 927 other sites in the state. Cleanup also is under way at 292 locations.The state maintains a master list of all contaminated sites, including federal, state and private owners. Under federal law, the state has regulatory authority over all sites, although the respective landowners assume responsibility for cleanup, Bainbridge said.There are 178 more contaminated sites than the 3,052 listed last year, despite the completion of 816 cleanup projects last year, he said.The number of sites is growing mainly because landowners are more diligent in checking for contamination from old fuel tanks or industrial activity when property is sold or transferred, or when new construction is done, Bainbridge said.With increased federal funding for highway and defense projects, overall construction activity is up throughout Alaska, and with new excavation more soils with contamination are uncovered.Three examples in the last year, involving state projects which increased the total on the contaminated site list, include the new Fairbanks courthouse, the Anchorage jail and the new construction at Ted Stevens Anchorage International Airport, he said.All of these involved pollution discovered when soils were excavated, Bainbridge said.Although much of the pollution is oil spilled from leaking tanks, chlorine-based solvents from garages and shops where work on machines and engines is done is another common source, Bainbridge said.Pollution from oil is easier to clean up because oil tends to remain at the top of any groundwater and spread laterally. Chlorine-based solvents tend to sink deeper in the soil, he said.Dietrick said 52 percent of the cleanups last year were on federal lands where federal agencies took responsibility, 31 percent were on private or privately-leased lands where companies were responsible, 8 percent were on state lands, 5 percent were on municipal land and 2 percent were on Native lands.The remaining 2 percent were sites where no responsible party could be identified, he said.For the unclaimed sites, Alaska has a source of funds for cleanup, the so-called "470" fund managed by the DEC, Dietrick said.North Slope oil and gas producers pay five cents per barrel to the state in a surtax on oil moved through the trans-Alaska oil pipeline.Two of the five cents goes into a contingency fund for a major oil spill cleanup and stops being collected when the fund reaches $50 million.The remaining three cents per barrel, now totaling about $9 million per year, is paid into the state spill "prevention" account.From that account, $4 million per year is used to pay state agency expenses for review of industry contingency plans and other costs, with the remaining $5 million available for cleanup of contamination on state lands and sites where no responsibility for the spill can be determined, Dietrick said.A number of other states have similar surcharges on oil to support cleanup, Dietrick said."Our normal role is to provide oversight on cleanup projects, no matter who the landowner is. But where there is no responsible party, we step in to manage the cleanup," he said.The military has been very aggressive in their cleanup work, much of which is managed by the U.S. Army Corps of Engineers. The state’s congressional delegation has also been effective in securing steady funding for the military and Corps cleanups, Dietrick said.An important development in recent years, Bainbridge said, is that DEC is allowing more risk-based cleanup plans, where the risk to human health and damage to the environment is considered when DEC approves how much of the contaminants must be removed.This is an alternative to the traditional approach of relying on numeric standards, set in regulation, for the amount of pollution that can be safely left in the ground."This gives us the flexibility, in cases where people are not drinking the water, for example, to allow a responsible party to leave some contamination in the ground," Bainbridge said.This is part of a national trend and is done in several states, and is allowed by the U.S. Environmental Protection Agency, Bainbridge said.Dietrick said businesses have become more sensitive to contamination issues and liability in real estate transactions, he said, and the state of Alaska has developed new procedures to prevent contamination disputes from holding up property transfers. In some cases, the property owner can not afford the cleanup.To help these owners, DEC has developed a "Prospective Purchasers Agreement" where the buyer and seller can negotiate an agreement to share liability, he said.One real success story in Alaska has been the repair and replacement of old leaking underground storage tanks, Dietrick said.The Environmental Protection Agency established regulations in 1988 requiring fuel tanks to meet new, higher standards by 1998. This meant that many older underground tanks in Alaska had to be repaired or replaced, he said.The state Legislature established a grant program in 1991 to help small businesses deal with the costs of repair and replacement, and appropriated $38.9 million for the grants over the following 10 years. Most of the grants were small, typically $10,000, and were given to small "mom-and-pop" businesses, Dietrick said.Last year, the program was terminated, replaced by a revolving-loan program that will be self-supporting.But the important thing, Dietrick said, is that 6,000 of the 7,000 old underground fuel tanks that were in the state in 1988, many of them leaking, have been repaired or replaced.About 1,000 older tanks still need to be replaced, Dietrick said.

Online marketplace offers opportunity for small business

With more than 6 million small businesses in the United States, it remains a mystery as to why only a small percentage has elected to exploit the online marketplace. A number of the major online players, including Microsoft, AOL, Verisign and eBay, provide extensive start-up and hosting platforms for the small business that wants to crack the electronic-commerce code.With the Internet now firmly established as an integral part of the American home and with broadband fast becoming the preferred connection into that home, e-commerce has now become a revenue source that the average small business, particularly the retailer, cannot ignore.In fact, e-commerce sales in the United States alone totaled more than $51.3 billion in 2001 and are projected to grow to $76 billion in 2002.How does Yahoo! do it?Yahoo! Small Business has been in operation for five years with a subscriber base of 20,000 merchants and a monthly audience of 10 million visitors who touch the small business site, smallbusiness.yahoo.com. Most merchants who use the service employ fewer than 50 employees and list revenues of $10 million or less.As would be expected, the bulk of the e-commerce action centers around retail and wholesale sales and services, with consumer electronics and specialty goods, particularly apparel, occupying a commanding presence.Business-to-business activity remains sparse although there is no compelling reason why that marketplace, lucrative even for the small business community, should not be more aggressively exploited.According to Bud Rosenthal, vice president and general manager of Yahoo! Small Business, the company’s current concentration is on recruiting small businesses that are well established and employee-based, with less emphasis on the small office-home single practitioner.To a major extent, Yahoo! and its competitors provide an array of services aimed at establishing a successful front-end operation by getting the storefront up and running and leading customers to the front door. Yahoo! Small Business, for example, offers three primary services that help the small business develop a presence on the Web, reach new customers and hopefully close sales. Get online. Secures a Web address, or domain, offers an easy-to-use e-mail option for multi-employee business use and provides tools for building a business Web site. Costs range from $9.95 to approximately $30 per month. Sell online. Offers the availability of an actual online storefront with attendant features such as referrals for start-up design assistance, provision of shopping cart and secure credit card processing, and access to buyers and customers who are Yahoo! users or visitors. The service starts at $49.95 per month.Sell online also offers an auction capability at 5 cents per listing plus fees, a classified ad service and a merchant credit card billing, and payment program that starts at 2.2 percent of transaction amount. Promote and market online. Gives merchants the opportunity to buy a standard listing with a $299 annual fee. Special sponsor listings in the Yahoo! Directory and Yahoo! Yellow Pages are available for $25 per month.For all such e-commerce services, the key benefits to the small business merchant derive from association with a well-known, stable online global brand as well as the potential customer reach that the brand delivers. Most small businesses will gladly consider paying for the opportunity to be seen in the company of a Microsoft or eBay or better still have access to their massive user audience.Since most e-commerce facilitators like Yahoo! focus on the transaction and sale of tangibles, particularly within a retail setting, for the service provider the benefits are less evident. They include driving traffic to the site, domain-based e-mail for all employees and e-mail marketing.Does it work?While precise industry data is guarded, merchant churn rate is estimated to be in the 10-20 percent range, which compares favorably with the 35 and greater percent rates experienced by cellular phone, cable television and online hosting services. For the majority of online merchants, the primary benefit lies in gaining access to customer and prospect traffic.Says Allan Schwartz, owner of We Love Macs, and a Yahoo! Small Business merchant, "They get eyeballs to the store."But there are also complaints that most e-commerce facilitators ignore the back end of the transaction, the back office functionality. That includes the hidden problems and hiccups that go into running a successful e-commerce operation ranging from helping with customer fraud situations to assisting with inventory management and order tracking.As Rosenthal notes, "We need to present a more holistic approach, and we’re working on it." This means that eventually even the smallest and least sophisticated small business will have access to a fully integrated front counter and back office environment where transactions flow seamlessly and the dollars roll in.Regardless of the initial e-commerce hype and the equally hyperbolic and unreasonable gloom-and-doom stories that now surround the issue, the e-commerce horse has clearly escaped the corral. Every small business obsessed with increasing revenue stream would be well advised to investigate the potential that this opportunistic channel has to offer.Alf Nucifora is an Atlanta-based marketing consultant. He can be reached via e-mail at [email protected]

Mall shops hope UAA students will bring back good times

Yong Bae is renovating his New Cauldron restaurant at University Center, preparing for what could be a revival spurred by the University of Alaska Anchorage, a new mall occupant.After 16 years at the mall, Bae has seen national and local tenants depart, transforming University Center into what he calls a ghost town.The mall had suffered the loss of several tenants in the mid-1990s due to national closures or relocations after mall traffic declined.The influx of faculty, staff and students coming to the mall later this year could help his ailing business."This is my last chance," Bae said. "I really expect UAA to make a good business for me."UAA is purchasing part of the mall for classrooms and administrative offices. About 150 faculty and staff are scheduled to begin moving to the mall in mid-November, said Cyndi Spear, associate vice chancellor for facilities and campus services. About 500 students will be affected in January by the change, she said.Renovations are now under way to outfit 90,000 square feet of the mall to create high-tech classrooms, labs and office space for UAA employees.The New Cauldron already has a business relationship with university employees, delivering food orders to the nearby campus, he said.The restaurateur started building a cafeteria-style deli so students, faculty and staff can swiftly pick up a salad or sandwich at the 150-seat eatery. Bae said he will probably spend about $40,000 to add a salad bar, sandwich bar and more seating. Work began in late August and should be finished later this month.Bae also plans to open at 7:30 a.m. rather than the usual 11 a.m., to sell espresso and bagels to university employees and students.Vikki and Rick Solberg, owners of Natural Pantry in the mall, are also considering ways to attract college customers.Natural Pantry aims to revamp its existing lunch menu and might start serving espresso, Vikki Solberg said.On the grocery side, the Solbergs may produce a newsletter and coupons to promote Natural Pantry to UAA faculty and staff working at the University Center, Vikki Solberg said.Natural Pantry should provide a convenient grocery stop for UAA students and employees, Solberg said.The additional population in the mall could help her business and "get some blood flowing into the mall again," Solberg said.Bob Zorick, owner of ice skate and hockey retailer Champions Choice, isn’t planning changes to prepare for UAA’s move, but he does believe it is important to his mall business."We hope it’s going to be a plus," Zorick said.Carl’s Jewelers & Gifts, a 12-year mall tenant, likewise isn’t making any changes, according to Carl Mujagic Jr. But moving UAA employees to University Center could boost mall visitors and also sales for his 50-year-old family business, Barr said.Habitat housewares store is another long-time tenant looking forward to sharing the building with UAA, according to owner Rene Soucek.The addition will help people recognize the viability of the location, Soucek said.Habitat’s University Center location generally rings up more business than its downtown Anchorage store, she said."There’s a good reason we have stayed at the University Center all those years," Soucek said.About a block away, Ovations Victorian, a gift shop also selling sandwiches and pastries, may revise its box lunches for university employees looking for a quick meal, said owner Diane Block. The store has been serving a popular afternoon tea since April, she said.Block has seven employees at her restaurant. Others could be added if business continues to pick up from UAA customers, she said."We’re just waiting to see what the impact will be on our business," Block said.The former mall tenant moved to the nearby Gallery North mall, also on the Old Seward Highway. Block hopes the added population from UAA benefits University Center."We’ve been hoping the University Center would become a successful place," Block said.

Phillips, Conoco merger gets final FTC approval

WASHINGTON -- The $15.1 billion merger of Phillips Petroleum Co. and Conoco Inc. received federal approval Aug. 30, clearing the way for completion of a deal that would create the third-largest U.S. oil and gas company.The Federal Trade Commission voted 5-0 in favor of the deal, but required the companies to sell refineries in Utah and Colorado and certain operations in Missouri, Illinois, New Mexico, Texas and Washington state.In Alaska, the merger will mean a reduction of 60 jobs at Phillips Alaska Inc., even though Conoco has little presence in the state. The cuts represent about 6 percent of the company’s 950-employee Alaska work force.Most of the affected employees perform services for Phillips and its subsidiaries such as accounting, computer support and working on tax matters, according to the company.Joe Simons, director of the FTC’s Bureau of Competition, said the agency believes the conditions attached to approval of the deal will help maintain competition in the energy market.The companies announced in November their intention to merge, forming a firm named ConocoPhillips that would be based in Houston.At that time, the new company’s value was estimated to be $35 billion.The combined company would become the country’s top refiner and a gas retailing giant with about 17,000 filling stations nationwide.Anticipating the FTC conditions, the companies had already begun selling some facilities.Phillips, based in Bartlesville, Okla., is selling its Woods Cross refinery near Salt Lake City and 25 gasoline stations in Utah and southern Wyoming. Houston-based Conoco is seling its 60,000-barrel-a-day refinery in Commerce City, Colo.The FTC also is requiring Phillips to sell its marketing assets in eastern Colorado; a light petroleum products terminal in Spokane, Wash.; and propane terminal assets in Jefferson City, Mo., and East St. Louis, Ill. Conoco must sell certain natural gas facilities in New Mexico and Texas, the FTC said.The FTC had said the original merger proposal would have reduced competition, allowing ConocoPhillips to raise prices.The deal would create the world’s sixth-largest oil and gas company. In the United States, ConocoPhillips would be No. 3 behind Exxon Mobil Corp. and ChevronTexaco Corp.Shareholders approved the deal in March.Conoco sells gasoline, diesel fuel and other petroleum products at 5,000 outlets in the United States, while Phillips sells fuel at more than 12,000 stations under brands such as Phillips 66, Circle K, and 76.The 16-member board will have eight members each from Phillips and Conoco. Conoco chairman Archie Dunham is to be chairman until 2004, when Phillips chairman Jim Mulva, who will be chief executive officer, takes over.-- The Associated Press

Pribilof Islands require $100 million cleanup

For more than a century, the United States’ management of fur seal harvests on Alaska’s Pribilof Islands was a money-maker. So profitable was the federal government’s oversight of the seal trade, that Alaska’s purchase price of $7.2 million in 1867 was recouped two decades later from the sale of furs alone.Declining fur seal populations and public outcry halted the harvests in 1983, and under federal law, the land was to be turned over to the islands’ Aleut inhabitants.But 116 years of government occupation had left St. Paul and St. George islands an environmental mess. Tens of thousands of gallons of fuel oil had seeped into the tundra over the years due to leaky fuel tanks and lines or from outright dumping. Botching the landscape were tons of debris, including derelict cars and trucks, oil barrels, asbestos-tainted buildings and abandoned fuel tanks, above and below ground.The Aleuts want the real estate back, but in near the same condition as when they were brought to the islands in the mid-18th century by the Russians to hunt seals.Now, the United States is stuck with an estimated $100 million cleanup bill for two of the five tiny islands that make up the Pribilofs, located in the Bering Sea, 800 miles west-southwest of Anchorage.Some $50 million has been spent since the mid-1990s cleaning up the islands. Much of the work has been done by Pribilovians working for environmental restoration firms started by local Alaska Native village corporations.The new jobs created during the cleanup are welcomed in St. Paul and St. George, hit hard in recent years with the crash of the over-fished opilio crab industry, the economic bread and butter of the communities after the closure of fur seal harvests."The economy is so bad here everybody is afraid to get pregnant," said Phyllis Swetzof, St. Paul city clerk. "Thank God for birth control and the cleanup -- it’s a good thing."The island’s population has slid from 650 in 2000 to about 535 today, Swetzof said. Only six babies have been born since the crab-fishery crisis. Historically, St. Paul’s annual birthrate had been in the high teens, she said.St. Paul and St. George islands are largest Aleut communities left in the world, with 800 of the remaining 3,200 Aleuts.Our landSt. Paul ’s village corporation, Tanadgusix (Aleut for "our land"), started its own environmental restoration company to do the some of the cleanup work on the island, literally in its own backyard."I don’t want to say we are blessed, but (the pollution) has become an opportunity for us," said Bill Arterburn, president of the Native corporation’s environmental cleanup subsidiary, Bering Sea Eccotech Inc.The company, which employs up to 40 locals, has parlayed its cleanup experience to get other jobs Outside, including on government land in Hawaii, and at several U.S. Air Force facilities in the Lower 48. Bering Sea Eccotech won contracts at home and beyond using its status under the Small Business 8(a) program, which gives federal contracts to Natives and other economically disadvantaged groups.Using the 8(a) status helps the Native-owned company land cleanup jobs on federal property, but just as important is experience and ability to do the work, Arterburn said. Bering Sea Eccotech meets all qualifications, and then some. The company in one summer removed 2,300 tons of scrap metal from the island, mostly from junk cars, fuel tanks and machinery. It also has treated tens of thousand cubic yards of fuel-contaminated dirt in the past few years."That helped us build our resume," Arterburn said.The unlikely overseerThe National Oceanic and Atmospheric Administration was the last in a long line of federal agencies that managed the fur seal trade on the islands. When NOAA was formed in 1970, it took control of the Pribilofs.It now has inherited the pollution problem, and a political one.NOAA’s historical role has been to predict environmental changes on Earth -- not clean it up.The Pribilof project accounts for 90 percent of the agency’s environmental restoration budget, which in the past has gone toward small-scale projects like the razing of a few old weather stations.NOAA clearly wants to rid itself of the management responsibility for the Pribilofs, and return the land to locals, a process begun under the 1971 Alaska Native Claims Settlement Act, which requires the transfer of some federal land to the state’s Eskimo, Indian and Aleut people.The agency has been criticized for stalling the cleanup in the past. But officials say they are at the mercy of federal funding, which has been spotty over the years. At current funding levels, NOAA won’t get the islands cleaned up for at least another 15 to 20 years, according to agency officials. In its 2003 budget request, the agency has asked for $10 million toward the cleanup, an increase of $4 million from this year.NOAA has placed some of the blame on the Pribilovians for the slow cleanup. In a report to Congress in 1999, the agency alleged the locals are making matters worse."Pribilovians have continued to dispose of materials in dumps and at other sites for which NOAA is being held responsible," the report said. "This had made it impossible to establish any definitive end point of cost boundaries for the cleanup process."NOAA also alleges cleanup companies had been soaking the government financially."When compared to estimates of outside contractors, the local entity proposals have always been substantially inflated," the agency said in its report to Congress.NOAA also alleged at least one unnamed local contractor had "improperly and illegally" dumped contaminated material at another site, and then attempted to get the agency to pay for "waste storage."The agency’s allegations are untrue, said Bret Coburn, chief executive officer of Chadux Corp., a environmental remediation subsidiary of St. George’s Native corporation, Tanaq."I believe there has been political motivation to discredit the work that has been done," said Coburn. "The deal is, using the local labor for this cleanup has been quite a deal for the taxpayers."Coburn and others say the agency has minimized the extent of the Pribilof Islands’ pollution, hoping to get the job done cheaper, and get out of town quicker."Hundreds of thousands, if not millions of dollars, have been wasted on consultants," Coburn said.Coburn and others say NOAA officials and consultants had tried to turn a blind eye to several contaminated areas.Locals, not government inspectors, found some 900 oil drums buried beneath the village school playground. And an area thought by government inspectors to have only 80 cubic yards of fuel-contaminated soil, turned out to be 2,100 cubic yards, enough to fill more than 250 large dump trucks.A clean slateBy all accounts, NOAA’s John Lindsay, who took over the cleanup project a little over two years ago, has smoothed the distrust between villagers and the government.Lindsay, based in Seattle, said his agency and locals share the blame for the cleanup problems."In the past, the agency didn’t spend any time out there and just funneled money with no oversight," Lindsay said. "Frankly, (cleanup companies) abused that."The agency still has difficulty finding qualified engineers that will work on the Pribilofs, overseeing the project.Lindsay makes several trips annually to the islands to monitor the work. Each round-trip ticket costs $2,000."Things are working out well now, given the past," Lindsay said. "I can’t tell you the level of effort that has gone into this."Most large debris on the islands has been removed, according to Lindsay. The focus now is on soil contamination, primarily associated with spilled diesel oil over the last century.Max Malvansky, St. George city manager, said the pollution has been good and bad for the community."The cleanup has been a godsend for us economically," Malvansky said. "If we didn’t have it we’d be up the Bering Sea without a motor."But the former mayor said villagers would rather have a clean community and outright ownership of its lands, as required by law."We want to get this all cleaned up and get the government out of our hair," Malvansky said. "We’ve been a company town -- lock, stock and barrel. And the company has been the government."

State's credit outlook downgraded

ANCHORAGE -- A major New York bond rating firm said Aug. 27 that Alaska should reduce the gaping chasm between its income and expenses or expect to pay higher interest rates when it borrows money.Moody’s Investors Service, one of the two major bond-rating agencies, downgraded the state’s credit outlook from stable to negative. The move did not affect the state’s current bond rating, which remained at a strong Aa2.Gov. Tony Knowles said the report was a call to action.The Moody’s announcement on Alaska was part of the company’s annual state-by-state credit accounting.Florida, Hawaii and Nevada were upgraded from negative to stable. Alaska and half a dozen others slipped this year, boosting the number of states with a negative outlook to 15.Ray Murphy, one of the financial analysts who wrote the Alaska report, said the state is financially healthy on most fronts. Its economy has grown 14 years in a row, it has record low unemployment, and last year Alaska enjoyed the nation’s fourth-fastest growth in personal income.Home ownership is up, bankruptcies are down and the state’s savings accounts are sound. Alaska has little debt and is the only state to have reduced its budget in the last five years.The problem is Alaska’s dependence on oil and state savings accounts, Murphy said.Oil taxes and royalty payments no longer pay for state government operations, forcing the Legislature to tap the state’s Constitutional Budget Reserve. Last year, the state drew about $800 million from that savings acount, and it could be exhausted in two years."Our changed outlook is a signal to the market that there is significant stress in Alaska," he said. "The current revenue structure is insufficient to fund the operations of state government."A significant solution has to be developed to address this problem, and we don’t know what that solution will be," Murphy said.Knowles has been calling on the Legislature for several years to find a solution."The biggest threat to our economy and jobs is the inability to make progress on a long-term budget plan," he said following the announcement.Knowles called the Moody’s report "a clear indication of how the financial markets will view our lack of resolve," and encouraged the Legislature and next administration to act quickly.Larry Persily, deputy commissioner of the Department of Revenue, said the Moody’s report came as no surprise, and he does not expect it to have any significant immediate impact on the state’s finances.But the next time Alaska sells a bond, Persily said, the rate will be affected by a host of factors, from the price of oil to the Dow Jones Industrial Average.Outgoing Senate President Rick Halford, R-Chugiak, said the report was the mildest possible rebuke.A week earlier the other major credit rating agency, Standard & Poors, published its annual rating and found Alaska’s credit outlook stable."It probably won’t have any impact," Halford said of the Moody’s report, other than to give the Knowles administration "one more opportunity they couldn’t pass up to advocate for a state income tax and spending Permanent Fund income."Though he won’t return to Juneau in January, Halford said he expects the Legislature will ignore the Moody’s report, although not the underlying issues."We haven’t bought the governor’s proposed solution (to eliminating the fiscal gap), but that doesn’t mean we shouldn’t be looking at revenues and expenditures," he said.Dave Rose, who used to be director of the Alaska Permanent Fund Corp. and now is a private financial adviser in Anchorage, said he thinks a downgraded credit rating is next."It’ll cost us a little more" the next time the state sells general obligation bonds, he said.That could be soon. Voters in November will be asked to decide the fate of two bond packages totaling $360 million. One would fund schools, the other transportation projects.

Funds drop for military cleanups

U.S. Army Corps of Engineers officials say funding for environmental cleanups in Alaska is stable this year but the budget for work on abandoned military sites in Alaska has declined.Besides the abandoned site cleanups, the Corps manages environmenal remediation work on active U.S. Army, Air Force, Federal Aviation Administration and Coast Guard stations, according to Pat Richardson, a spokeswoman for the Corps in Alaska.For the abandoned military sites, $30 million in cleanup contracts are authorized for the current federal fiscal year, which ends in September, she said. This compares with $40 million authorized last year, and about $46 million the year before.The appropriation is declining because the Corps has shifted priorities to sites with unexploded ordnance, and while some of these are in Alaska, there are more in other states, according to Suzanne Beauchamp, manager for the Corps’ Formerly Used Defense Site program.Funding for the next fiscal year may be lower yet. The basic program appropriation, to which special appropriations secured by the state’s congressional delegation are added, will decline from $17 million in the current year to $12.5 million next year, she said.In the current year, Alaska lawmakers secured an additional $13 million, which when added to the $17 million program budget results in a total of $30 million.How much in additional funds the delegation will be able to secure for the next fiscal year is unknown at this time, Beaucamp said.Another reason for the decrease is that several large high-priority cleanup projects in Alaska are nearing completion, she said. A large soil-reclamation project around Unalaska and Dutch Harbor in the Aleutians is nearing 90 percent completion.Another reclamation project on Kodiak Island is about 80 percent complete, she said. Jacobs Engineering Group Inc. of Golden, Colo., has the contract on both projects.A third major project, at a closed Distant Early Warning radar site at Northeast Cape on St. Lawrence Island is about 40 percent complete, Beauchamp said.Anchorage-based Bristol Engineering & Environmental Services Corp. was recently awarded a contract to take over this project, she said.

Business Profile

Name of the company: Alaska Safety Inc.Established: 1996Location: 4725 Gambell, Anchorage, AK 99503Telephone: 907-561-5661Web site: www.alaskasafety.comE-mail: [email protected] focus of services: Alaska Safety Inc. sells industrial safety supplies and emergency vehicle accessories. The company also installs specialized equipment for police, emergency and government vehicles.History of the company: Alaskan Paul Richards bought Alaska Environmental Supply from Dana Henry in 1996. Henry had operated the firm for a few years before selling it. Richards sold 40 percent of the company to Clint Van Noy, a co-worker at Sahlberg Safety Inc. before that company closed. Richards and Van Noy renamed their firm Alaska Environmental Safety and Supply Inc.The company expanded its services in 1999 by installing lights and other police equipment, including special seats and other gear to vehicles.In 2000, Richards and Van Noy changed the name to Alaska Safety Inc.The company operated at a 3,000-square-foot office at 76th Avenue and the Old Seward Highway. By 2000, Alaska Safety moved to its current location with nearly twice the office space.Alaska Safety employs nine people, including two full-time employees who install equipment on emergency vehicles.Top accomplishment of the company: One major milestone was choosing to install equipment for emergency vehicles, Van Noy said. That part of the business has shown considerable growth in the last two years, he said. Today, the company outfits cars for the FBI, CIA, U.S. Forest Service, Alaska State Troopers and Alaska city governments, he said.Major players: Paul Richards, president, and Clint Van Noy, vice president.Richards grew up in Anchorage and attended West High School. He worked for Sahlberg Safety for 10 years where he served as a sales representative. Van Noy moved to Anchorage in 1979 and graduated from Dimond High School. He worked on the North Slope as a laborer before starting at Sahlberg Safety as a shipping clerk. Van Noy logged seven years at Sahlberg Safety where he was promoted to several different positions.-- Nancy Pounds

University works on move to mall

Work is under way to convert a portion of a struggling shopping mall into classrooms for the University of Alaska Anchorage.UAA employees will begin moving into the University Center by Nov. 15, said Cyndi Spear, UAA associate vice chancellor for facilities and campus services. About 150 faculty and staff will be moved in by the end of the year. Some 500 students will use the new classrooms when spring semester starts Jan. 13, Spear said.UAA officials are purchasing one-fourth, or about 90,000 square feet of the shopping center, increasing classroom space by 30 percent, Spear said."That’s a big jump for classes," said Spear.The $13.6 million price includes $8 million in renovations, according to John Dickinson, University of Alaska assistant vice president for finance.In addition to more classrooms, students should have an easier time parking and have better access to offices for student services like registration and financial aid, university officials said.The new space will house UAA’s Community and Technical College and administrative offices.UAA officials are considering the purchase of another 30,000 square feet of mall space in the future, Spear said.Anchorage-based Davis Constructors & Engineers Inc. began work on the renovation project in June, Spear said.The general contractor gutted the interior of the mall section and the former theater site, said Josh Pepperd, project manager. The sloping floor in the theater had to be leveled to accommodate new offices that will be there, he said.Mechanical and electrical systems are being upgraded, Pepperd said. Other work includes framing and finishing the interior, he said.Davis Constructors is scheduled to complete the theater section by mid-November and the classroom a month later, Pepperd said.University officials, who announced the deal in late May, are buying mall space from JL Properties Inc., an Anchorage developer and property management company.Last December, JL Properties acquired by bid the 350,000-square-foot shopping center with Furniture Enterprises of Alaska, which owns Sadler’s Home Furnishings. Previous owner Hickel Investment Co. had returned the title to its lender, which auctioned the mall.UAA is buying the 90,000-square-foot portion owned by JL Properties. That section, built in 1986, extends south from the site of former tenants Roundtable Pizza to the movie theater.University Center opened in 1972. At one time, it ranked as the third-largest shopping center in Alaska, behind Dimond Center and the Anchorage 5th Avenue mall, according to the International Council of Shopping Centers.The mall has suffered many setbacks in it 30-year history. Several national retailers that once anchored the mall went bankrupt in the mid-1990s. Other businesses relocated as mall traffic declined. Gottschalks department store closed its University Center location last year. It had been the mall’s largest tenant.

Poe reflects on 2 years as AIDEA chief

Bob Poe has moved back to the private sector after two years at the helm of the Alaska Industrial Development and Export Authority.Poe, 48, ended his job as executive director of the state’s development corporation Aug. 30 and has been appointed Alaska’s senior vice president for ASCG Inc., an architectural and engineering firm owned by Arctic Slope Regional Corp."My biggest joy has been to be involved with an institution that is helping the economy grow in a tangible way," Poe said.Poe reflected on changes that have affected the state authority on his watch, and challenges that remain.The challenges are mainly two troubled high-profile development projects, Alaska Seafood International, owner of a large seafood plant in South Anchorage, and the Healy Clean Coal Project, a new-technology power plant at Healy in the Interior. On the positive side, a lot has gone well with AIDEA, including continued growth of the authority’s loan participation programs with commercial banks, Poe said, adding the programs have helped the state’s economy grow and diversify, while adding to AIDEA’s bottom line.Business loans by banks in which AIDEA participates provide the bulk of the long-term financing for economic expansion in the state today, Poe said.This has been vital to Alaska, because in the sharp recession that hit the state in 1987, traditional sources of long-term financing, like pension funds, insurance companies and savings and loan institutions, pulled out of the Alaska market. Few have returned since, he said."These loans help all kinds of businesses in all parts of the state, from tourism projects and hotels to restaurants, office buildings and retail stores," Poe said.The loan programs, which typically invest $40 million a year in new business lending, are important to AIDEA because they supply most of the authority’s $35 million to $40 million a year in net earnings.This directly supports the annual dividend the authority pays the state treasury, which ranges from $15 million to $20 million annually, Poe said.AIDEA’s annual earnings also help support investment in development and infrastructure projects, like a new dock at Unalaska, the Federal Express Corp.’s maintenance hangar at Ted Stevens Anchorage International Airport, and larger projects like the seafood center and the Healy power plant.For the success of the loan programs, Poe gives a lot of credit to Jim McMillan, the authority’s deputy director for lending. Poe said McMillan made loan programs more flexible for banks and businesses to use.McMillan is now filling in for Poe as acting executive director, serving until the authority’s board names a permanent replacement. That is unlikely to happen, however, until after a new governor takes office this December and new members are named to the authority’s board.Poe felt another solid accomplishment for the authority under his tenure has been the integration of Alaska’s rural energy programs into AIDEA. The programs were transferred from the former Community and Regional Affairs agency to the authority.Rural energy is now a success for the authority, thanks to the reorganization, a new partnership with the Denali Commission and the "leveraging" of money with the private sector, he said.The number of new rural energy projects have increased from about three a year when Poe came aboard to 15 to 17 a year, he said.This has also helped reorient AIDEA towards rural Alaska. "We used to be thought of as primarily an urban-focused outfit," Poe said.There have also been frustrations for Poe during his tenure. One is the seafood plant.ASI built a $125 million seafood manufacturing plant with AIDEA’s help, but the company has faced financing and start-up challenges that led to a new company, Sunrise Captial Partners LT of New York, taking over.Poe is cautious about ASI’s chances of survival."We gave ASI a good chance of making it, but I don’t know if they’ll be able to do it," he said.The company’s first year of operation was not as successful as Sunrise had hoped, Poe said. Sunrise has pumped $15 million into the venture, $5 million in the initial purchase and $10 million in additional investment, he said."Sunrise is a good company and they’ve done everything they said they were going to do. They’ve put a lot into ASI, but the trucks aren’t lining up at the door yet taking deliveries," Poe said."The company has a significant investment, but they now have to look seriously at how much more it will take to make it work," he said."I wish we could wave a magic wand and make this happen, but AIDEA’s role is to provide the infrastructure to make development possible. We can’t run the business," Poe said.The other frustration has been the $292 million Healy Clean Coal Project, the new-technology 50 megawatt coal power plant built in 1997. The plant closed in late 1999 after two years of start-up and testing, due to a dispute between the authority, which owns the plant, and Golden Valley Electric Assoc. of Fairbanks, the regional utility which had contracted to operate the plant and buy power.GVEA wants the coal-burning systems in the plant to be replaced with conventional technology. AIDEA believes a less-costly limited retrofit would do the job."It’s very tough to try and negotiate an agreement with someone who says their way is the only way," Poe said.AIDEA is close to an agreement with another power company to operate the plant, but whether GVEA will buy power if the plant is restarted is up in the air, he said.A state corporation isn’t immune to politics, but what helps insulate AIDEA from political pressure from legislators or even the governor is that its board, which includes outside directors, must approve projects that are financially sound.The authority also has a policy of contracting with consultants for independent advice and analysis of development proposals.Sometimes that isn’t enough, however. It is interesting, Poe said, that three high-profile development projects on which AIDEA’s board did get pressured -- Alaska Seafood International, the Healy Clean Coal Project and an earlier project to buy out old MarkAir hangars in Fairbanks and Bethel -- ultimately faced problems.In retrospect, absent the political pressure, "We might not have allowed ASI to build a plant that was so large," Poe said.In the business participation loan programs there is an additional layer of protection in that private banks initiate the loans and bring them to AIDEA. There are, therefore, two levels of due diligence, one by the originating bank and the second by AIDEA itself.Poe is a veteran state agency trouble-shooter whose most recent position, before he took the job as AIDEA’s executive director, was as state commissioner for the Department of Administration, where he handled the state’s response to the "Y2K" problem in computer systems.

Forest Service plans sale

JUNEAU -- The U.S. Forest Service is planning a timber sale that would harvest about 25 million board feet of timber from Point Couverden. If approved, it would be the first such sale harvested in the Juneau area in the past decade, according to the agency.The timber sale project is about 30 air miles west of Juneau on the south Chilkat Peninsula along Icy Strait. Part of the area was logged in the late 1980s and early 1990s by Alaska Pulp Co. The sale would cover about 1,500 acres of land, targeting hemlock and spruce.The Forest Service is in the initial stages of planning the sale and is accepting public comment on the proposal through Sept. 15.A draft plan should be out by February and the agency is evaluating the project’s impact on fish streams and wildlife, according to Stan McCoy, resource forester. Moose, black bear and wolves live in the area, he said.The Couverden project is part of the Forest Service’s 10-year timber-sale program in the Tongass National Forest. The agency is looking at the area because some roads already have been built, the project avoids controversial roadless areas, and it provides better economic opportunities for timber companies than do other areas in the district, McCoy said.The project would build up to five miles of new road, three miles of temporary road and reconstruct 19 miles of existing road. The Forest Service also would fix roads and culverts that block fish passage in the area, said Pete Griffin, Juneau District Ranger.Timber would be harvested in clearcuts or partial cuts, depending on the location, and the sale would use an existing log-transfer facility, McCoy said. Logs would be loaded directly onto barges and would not be dumped into the water.Most Tongass timber sales have been offered in southern and central Southeast Alaska in recent years. In general, timber from the southern half of the Tongass has more value and is closer to processors, Griffin said.The Southeast Alaska Conservation Council is concerned about the viewshed, fisheries and wildlife in the Couverden project area, but also is uncertain who would buy a sale that contains so much low-value hemlock, grassroots organizer Matthew Davidson said in an interview."The Juneau Ranger District under (the Tongass Land Management Plan) has to provide a certain amount of timber," he said. "Whether anyone is going to buy it is a question."Errol Champion, general manager of the aviation division of Silver Bay, which operates a sawmill in Wrangell, said it is too early to make economic assumptions about the proposal. An operator interested in the sale would need to evaluate the volume of timber by species and grade, he said in an interview."Better grades of hemlock and spruce will always sell," he said. "It is farther removed from manufacturing facilities in Southeast, but the quality of wood, if it exists, could offset transportation costs."

Future workers need many skills

The profession of economic development and risk capital assumes that investment creates demand for critical job skills. But in thinking about how wealth is created, it might be just as useful to think of people and their skills driving investment.Certainly in Alaska, the oil, mining, and construction industries have primarily operated in the first mode of importing or training workers to extract and process resources. But as Alaska seeks to add more value to those resources and to produce more knowledge-based products, it is more likely that the presence of skills will help cause investment rather than the other way around.Marketing AlaskaAre we more likely to attract manufacturing plants by influencing corporate decision makers in their 40s and 50s already rooted elsewhere or younger self-employed business and technical professionals who are more footloose and can serve clients from any convenient location? It would only take a few hundred professionals with clients mainly outside the state to locate in Alaska to make a measurable impact on bringing money into the state and improving the state’s business environment.Sizable numbers of self-employed professionals may choose to live in the many places on the road system where they have a good connection to the Internet, a short path to the airport, low taxes and less traffic.The Anchorage economy has benefited from the investment of cargo carriers drawn to the airport’s location and capabilities. But aside from the magnet of natural resources and the airport, it is hard to come up with a long list of significant industrial investments made in Alaska’s economy in the last 20 years.While local and state organizations are focused on the mission of attracting investment, it is a harder challenge but perhaps an easier sell to market Alaska as a lifestyle location for proficient professionals with clients.Employers cry for integrated skillsA related opportunity is for Alaska to expand the skills of existing professionals so they can win more work both inside and outside the state.A recent focus group of chief information officers of large Anchorage firms and information technology providers repeated the familiar cry for workers with more "soft skills" such as an ability to communicate, write, understand how markets work, manage projects and demonstrate common business sense.In effect, the fields of information science, quality systems, certified information technology skills and market analysis are merging at the high end. The most valuable employee may have a concentrated skill in one area but have enough education and experience in the other areas to do their job.Currently, a student may need to take courses in the different schools of business, engineering, humanities and information technology certifications to expand their integrated skills. How can we provide a clearer road map to our students to provide for an integrated skills education? How can employers work with our bright future workers on a senior or graduate project that encourages the cross-disciplinary work necessary both to increase education and sales?How can a Web strategy be executed unless the individual organizing the work also knows how the market functions for what is being offered and the capability of information systems? What chance is there of success unless that person also has the ability to integrate sales, production, quality and inventory data to undertake real time business decisions? Moreover, the need to manage projects by managing money and people underlies every effort.As more than one information officer remarked, increasingly information technology projects must be structured, justified, managed and concluded in terms of clear results and short pay-back periods. Work and rewards flow to the firms and people who have the integrated skills to bring it off.I am currently working with the university and businesses on a research plan that can better integrate state and federal resources. My working group will focus on how to make it easier for students to graduate with the integrated skills necessary to be valuable in today’s economy.Alaskans spend a fair amount of time justifying the internal boundaries of how the universities, businesses, and public and private sector work.However, markets do not care about maintaining institutional distinctions that do not serve clients or customers.Increasingly, resources and wealth will flow to the local and regional economies that can harness marketing savvy, information technology and production quality systems to produce competitive products and services.Maintaining hard boundaries between university colleges or departments, between different state departments, between business suppliers and large companies, between educators and employers, and between the public and private sector can reduce the efficiency of industrial clusters that need to expand to grow the state’s economy.As always, we’ll all have to do a better job. That may not be the right message for an election year but my hunch is it will still be the job the morning after. Jamie Kenworthy is the executive director of the Alaska Science and Technology Foundation. He can be reached at [email protected]

Chenega Corp. wins $300 million contract at Army base

ANCHORAGE -- Chenega Corp. has won a $300 million federal contract to help run an Army installation in New Jersey.Chenega will maintain the U.S. Army Garrison at Fort Monmouth, N.J. for the next eight years.It is the latest in a string of giant federal contracts Alaska Native companies are winning to handle federal work in the United States and overseas.Chenega is the Native village corporation for the village of Chenega in Prince William Sound. The company will maintain more than 700 buildings as well as roads and grounds for the U.S. Army Garrison in Fort Monmouth, N.J., said Jeff Hueners, the company’s chief operating officer.The company also may provide hazardous waste removal, air traffic control, scheduling for senior officers and other tasks, he said. The work will be performed for six months, with nine one-year renewal options. The contract ends in September 2010.The contract is a coup for the village corporation with about 110 shareholders who have ties to the Prince William Sound region, Hueners said."We’ve been working on this opportunity for years. It’s a landmark for us," Hueners said.Chenega Technology Services Corp., a subsidiary of the parent company, will employ about 230 people on the New Jersey contract, Hueners said.

Another airline sues over bypass mail law

Evergreen International Inc. is the suing the federal government over new mail-hauling rules in Alaska.The McMinnville, Ore.-based airline’s lawsuit filed Aug. 19 in U.S. District Court in Anchorage alleges the rules are unconstitutional and unfairly limit competition for federally subsidized mail.The airline also is seeking an unspecified amount of damages for not being allowed into the rural mail program.Evergreen’s lawsuit is similar to that of Alaska Central Express Inc., a San Diego, Calif.-owned, Anchorage-based air cargo carrier which filed its lawsuit in U.S. District Court Aug. 2, the day President Bush signed into law new rules designed to close loopholes in Alaska’ costly rural mail distribution system. While both airlines say they are suing on constitutional grounds, Alaska Central Express goes a step further, alleging the government, the U.S. Postal Service and four larger airlines have conspired to drive the company out of business, a move that would result in 100 jobs lost throughout Alaska.Alaska Central Express, already under Chapter 11 bankruptcy protection, laid off 40 of its workers in late August, a move which it blamed on the new law.Suing the federal government "is definitely not something we wanted to do," said Jerry Rock, president of Evergreen’s Alaska operations. But he said the new law favors existing carriers and effectively closes the door on competition for bypass mail, a system unique to Alaska where shipments of at least 1,000 pounds are stamped air mail but are never touched by postal workers and delivered at cheaper parcel post rates."We’ve been doing business in Alaska 41 years," Rock said. " We feel like we have the right to participate (in bypass mail)."Under the new law, pushed by Sen. Ted Stevens, R- Alaska, no new carriers will be allowed on mainline routes between the state’s larger cities and Bush hubs unless they provide a certain level of passenger service. The law exempts existing large carriers who have been in the mainline bypass mail market since January 2001.Only Alaska Airlines carries passengers on mainline routes; Air Cargo Express, Lynden Air Cargo, and Northern Air Cargo only haul mail and freight. To enter the mainline bypass mail market now, an airline must provide up to 75 percent of the number of seats provided by Alaska Airlines, and establish service for at least six months without a subsidy.Providing passenger service to many rural communities without bypass mail revenue is not doable, Rock said."It’s nuts to limit the mainline market," Rock said. "I want to be the senator’s friend and I know he’s done a lot for the state, but if he wants more passenger service, the new law all but eliminates that from happening."Stevens in 1970 secured bypass mail for Alaska, hoping the additional revenue would encourage passenger and freight service to the Bush. But the original legislation mainly encouraged cargo-only shippers. Each year, Stevens said, the Postal Service loses about $100 million on bypass mail. The new rules should lower the loss to $70 million annually, he said.The new legislation also will give nearly all bypass mail bound for small villages to carriers providing passenger service. About 30 smaller air carriers have competed for bypass mail in the past. But those who don’t offer passenger service will be phased out of the program over the next three years.Many of the smaller carriers don’t like the new legislation, but none of them are expected to challenge rules in court, said Karen Casanovas, executive director of the Alaska Air Carriers Association."I think most are resigned that what’s going to happen is going to happen," Casanovas said.

Gas line committee continues to support southern route

The state Legislature’s Joint Committee on Natural Gas Pipelines met Aug. 20 to review its draft recommendations, which will be presented to the next Legislature when it convenes in January.The committee will hold its final meeting after the November general elections to approve its recommendations, according to state Sen. John Torgerson, R-Kasilof, Senate co-chairman of the committee. The House co-chairman is Rep. Joe Green, R-Anchorage.Torgerson said he expects no significant changes between now and the final meeting in the draft recommendations, which include a call for continued support of an Alaska Highway, or southern route for a natural gas pipeline and opposition to an offshore, or northern route.Another recommendation is that the Legislature require private parties seeking state fiscal incentives to provide financial, engineering and other data to justify the request.Last spring, several legislators, including Torgerson, expressed concern about efforts to pass a bill granting property tax relief for a pipeline because there was insufficient economic and financial information provided to lawmakers to justify tax relief.Another recommendation is that if the state enacts incentives to help a gas project, an agreement should be negotiated that also rewards the state if economic and financial conditions for the project improve.The committee will also recommend that the Legislature continue to retain its own experts on pipeline and gas issues. In a press release, the committee complained about lack of cooperation from the administration of Gov. Tony Knowles in providing information from consultants the administration had hired. The committee plans to meet one more time shortly after the general election, according to its press release. Current members Torgerson, Green, Sen. Rick Halford, R-Chugiak, Sen. Pete Kelly, R-Fairbanks and Rep. Brian Porter, R-Anchorage are all leaving the Legislature.

Letter to the Editor

Professionals needed at Juneau convention facilityEmily Wescott’s article in the July 14 issue of the Journal entitled "Juneau’s Centennial Hall may pose problems for future conventions," should have read "Juneau’s Centennial Hall poses problems for future conventions."It is not the size of the hall that keeps conventions away; it is the lack of current convention practices and services that clients want. A recent dissatisfied client of the hall had equipment and acoustical problems which could have easily been avoided by professional audiovisual event services. To expand the size of the hall and not to have the infrastructure of basic services needed for larger conventions is how businesses go under, or in this case, how cities have budget deficits.It may be that the Juneau Convention and Visitors Bureau is the organization that should manage the hall, but it is not a convention services expert by today’s standards. Audiovisual and other production services are not usually handled by the in-house management; they are contracted services that work directly with the client. This poses a problem in Juneau, however, as it takes the revenue away from hall and into a private enterprise -- heaven forbid!Five or six small, yet upscale incentive trip conventions a year could raise the economic impact of a convention attendee from $1,999 to over $3,000. This translates into additional millions per year in revenue for the local economy, which in turn provides the city its fair piece of the tax pie. JCVB does have the marketing skills and basic meeting planning abilities to attract the business, but JCVB has the responsibility to promote the basic private services convention clients have come to expect in today’s market as well.Juneau has the potential to be an excellent incentive travel destination, but the city needs to get out of the way and let the professionals handle it.Joe QuartoJuneau

Convention revenues could reach $95 million

Most Alaska facilities managers and event organizers expect the upcoming convention season to be a good one, despite earlier concerns. Last fall’s terrorist attacks altered the convention industry, making people less inclined to travel to faraway places, according to Julie Dodds, a convention sales manager at the Anchorage Convention & Visitors Bureau. "Since 9-11 (meeting planners) are looking closer to home, which does add a challenge for Alaska," Dodds said. But many people still want to visit Alaska despite those travel concerns, she said. Last year, Alaska’s major towns earned roughly $95 million from convention business, and 2002 could record similar results, officials said. Convention and visitors bureaus help drive the industry, and Alaska CVBs rely largely on bed taxes to fund operations. Anchorage The city recorded $81 million in economic impact from conventions held last year, although some fall events were canceled or poorly attended after Sept. 11.

State appeals Red Dog Mine lawsuit to protect Alaska jobs

Alaskans want good jobs developing Alaska’s ample natural resources and at the same time demand protection of our clean air and water. The State of Alaska and the operators of the world’s largest zinc mine, Red Dog Mine near Kotzebue, reached that careful balance when the state issued an air quality permit to allow an expansion of the mine.But two federal entities, the Environmental Protection Agency and the Ninth Circuit Court of Appeals, rejected the state’s approval. Their decision defied logic and, we believe, the law, by demanding the mine spend millions of dollars to achieve less environmental protection.Once again, my administration has no choice but to stand up for Alaskans. That’s why we’re pressing this irresponsible decision all the way to the U.S. Supreme Court.At stake in this case is Alaska’s ability to protect our air quality through common sense permitting. The larger issue is protection of Alaska’s state sovereignty and the rights of individual Alaskans against misguided federal mandates.The Red Dog Mine is a proud example of a regional Native corporation, NANA, working with a private company and government to create hundreds of quality jobs for Alaskans.The mine is the region’s largest employer, providing 25 percent of the area’s total wage base and boasting a 60 percent Native shareholder hire rate.Until last year, Red Dog had been relying on power from six diesel generators to produce 1.1 million tons of zinc a year. When it needed more power to increase production, it sought a permit to ramp up an existing generator and add a seventh. To get that permit, the federal Clean Air Act required the mine to install controls to minimize emissions of nitrogen oxides.The EPA demanded a new technology untried in Arctic conditions that costs up to $10 million to install and up to $1.5 million more a year to operate.The state Department of Environmental Conservation allowed the mine to install a less expensive, low nitrogen oxide technology on the new generators, if it also retrofitted all the other generators. This cost $2.7 million and reduced the mine’s overall nitrogen oxide emissions tons more than the EPA’s plan.You’d think a less expensive and more proven technology that produces better results would be a no-brainer. It wasn’t.After months of trying to negotiate a reasonable solution, including my meeting personally with two EPA administrators, I had no choice but to go court. When the Ninth Circuit upheld the EPA’s position last month, I directed our attorney general to press the case all the way to the nation’s highest court.When EPA Administrator Christie Todd Whitman was in Alaska recently, we hand-delivered a request that she drop the suit and negotiate a reasonable settlement.Protecting mining jobs is just one example where my administration has been quick to stand up for Alaskans against senseless federal mandates. We have taken federal agencies to court to stop penalizing Alaska fishermen in the Steller sea lion controversy.We fought for timber jobs with a lawsuit against the Forest Service’s "roadless" rule.We’ve gone to the legal mat to ensure Alaskans’ access to historic roads and trails.We are seeking state title to submerged lands and navigable waters in Glacier Bay National Park and the Tongass National Forest and vigorously pursued a legal challenge to ownership of submerged lands within the National Petroleum Reserve-Alaska and the Arctic National Wildlife Refuge.Just as we’re doing with the Red Dog Mine, when it comes to protecting jobs and our environment, my administration will fight every federal action against Alaska’s working families.Gov. Tony Knowles can be reached via his office at 907-465-3500.

Around the World

STATEWestern Alaska named economic disaster areaANCHORAGE -- Western Alaska fishing communities suffering another poor salmon season will get state aid after Gov. Tony Knowles declared the entire region an economic disaster area for the fifth time in six years.From Bristol Bay to Norton Sound, Knowles said Aug. 23, fishing communities are reeling from chronic low salmon prices caused by the glut of farmed salmon on world markets. In many areas, the reduced value has been compounded by weak runs, he said.Prices were so low this summer that many fishermen chose not to fish, and those who did sometimes lost money.In the state’s premier sockeye salmon fishery, Bristol Bay, the total value of the catch will be about $30 million, just 10 percent of the amount fishermen earned at the peak of the fishery in the late 1980s.Satellite contract means more work at stationFAIRBANKS -- The Defense Department has awarded a contract to operate a new polar-orbiting satellite system to TRW Space and Electronics.The announcement came Aug. 23 and there was no word from Washington agencies about how the contract might affect operations at Gilmore Creek Tracking Station north of Fairbanks. The station tracks the nation’s existing polar-orbiting, environmental sensing satellites.Lockheed Technology Services Group operates the Gilmore Creek station under direction of a federal manager. The station employs about 60 people.Fairbanks officials have worried that the new polar-orbiting satellite system would cut out the tracking station.However, Sen. Frank Murkowski, R-Alaska, issued a news release saying he had been told the TRW contract "should involve more activity at the Gilmore Creek satellite tracking station."NATIONSurvey finds less consumer confidenceNEW YORK -- Consumer confidence fell for the third month in a row in August, declining to its lowest level since November 2001, a private research group reported Aug. 27.The New York-based Conference Board said its Consumer Confidence Index fell to 93.5 from a revised 97.4 in July.The industry group’s index, based on a monthly survey of some 5,000 U.S. households, is closely watched because consumer confidence drives consumer spending, which accounts for about two-thirds of the nation’s economic activity.WORLDCommission rejects five additional steel tariffsWASHINGTON -- The U.S. Trade Commission voted Aug. 27 against imposing new anti-dumping duties on imported cold-rolled steel from Australia, India, Japan, Sweden and Thailand.The 4-1 vote was cheered by U.S. consumers of steel imports, who say they are struggling to pay soaring steel prices. The steel manufacturing industry had pushed for the levies, however.Since May, some 20 countries have been required to pay an additional 2 percent to 154 percent deposit for allegedly selling certain cold-rolled steel products far below fair-market value or the cost of production.The Aug. 27 vote means the duties will not be charged for five of the countries.-- Compiled from business wire services.

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