Co-signers can get nasty surprise without liability release

In our everyday lives, and in the business world, we are constantly financially obligating ourselves to lenders. While our personal borrowing is fairly straightforward, it is not unusual for us to find ourselves in the role of a guarantor: a person who will step up and be personally responsible for another person or entity to the lending party.A not too infrequent example is when a son or daughter is out on their own and wishes to acquire an asset, perhaps a car. No financing is allowed unless Dad co-signs, or guarantees, the loan.Months pass; and then one blissful spring day, you receive a call: The loan is delinquent. Is Dad still on the hook?For personal debts, finality comes when the debt is paid and the obligation instrument you signed is marked satisfied, or paid in full. If you are a guarantor, you want a release from your guaranty of the satisfied obligation.So, what happens if the debt obligation is not fully satisfied, and you, as a guarantor want to be released from your guaranty? The first step is to ask the lender for a release. If that proves unsuccessful, perhaps a new guarantor or some collateral can be offered by the borrower to persuade the lender to release the guaranty.The lesson for guarantors in this situation is that until such time as there is a written "novation" from the lender, the guaranty liability remains. A novation means that the lender has agreed to release the guaranty in exchange for some other contractual commitment from the borrower or perhaps, a new guarantor.Over the years, I have seen many a guarantor exclaim that they assumed, or were told that they had been "released from that liability." Absent a written novation agreement from the lender, promises to take care of the guaranteed debt, while maybe sounding good, are close to meaningless unless the lender signs off on the new deal and issues the old guarantor a release from liability.In the world of small business, the law recognizes the legal distinctness of the business entity from its owners. Nevertheless, with many smaller, closely owned business entities, such as limited liability companies or corporations, most business lenders require personal guarantees from members, shareholders, officers and/or directors of the business entity.A business entity can legally assume debt, and, unless there is a personal guaranty of the business’ obligations, the owners are not automatically responsible for repayment, absent deceitful and/or fraudulent types of conduct by the owners, shareholders and other persons in control.Piercing the liability veil is not an easy task, and the proof requirements are rather rigorous. Nevertheless, the simple fact that one creates a business entity (LLC or corporation) is not a guarantee that the liability shield is impregnable.A potential way that creditors may pierce the liability shield was demonstrated in a fairly recent Alaska Supreme Court case. In International Investors vs. Business Park Fund, a limited partnership, the Alaska Supreme Court upheld the right of a creditor to the limited partnership to execute upon and compel payment from certain limited partners of unpaid capital contributions.While limited partners are commonly not liable for the obligations of the partnership, if the limited partners had obligated themselves in writing to make certain capital contributions, and they remain unpaid, they essentially are treated no differently than a partnership account receivable. Had the limited partners fully paid in their capital contributions, the liability shield would likely have withstood scrutiny from entity creditors.The International Investors case does not fully deal with all the circumstances that may be presented if a business investor, who has not fully paid in their capital contribution, can legitimately withdraw from the business enterprise.Nevertheless, under the law as it currently exists, if there are known business creditors when an investor seeks to withdraw from the limited liability entity, or if a guarantor wishes to be released from an existing commitment, then the way to be sure that liability does not follow the withdrawing person is to obtain a written novation agreement from the known creditors.The bottom line is that extrication from financial guarantees or commitments should not be treated in a cavalier manner, and reliance on promises alone can, if they are unfulfilled, lead to subsequent liability, liability that one assumed was long since satisfied.If you find yourself in a situation where someone other than yourself is offering to assume a personal liability, do your homework up front, and either get a novation or assure yourself that the assumed liability is or will be satisfied. I guarantee that doing this small bit will allow for much more restful nights.Jim Gorski is a member of the law firm of Hughes Thorsness Powell Huddleston & Bauman LLC. He can be reached via e-mail at ([email protected]).

Neptune asks to buy into Alaska Fiber Star

Neptune Communications LLC has filed with state utility regulators for approval to acquire controlling interest in Alaska Fiber Star LLC. Alaska Fiber Star is an affiliate of WCI Cable of Hillsboro, Ore., and its parent, Worldnet Communications, which filed for Chapter 11 bankruptcy reorganization in August.Alaska Fiber Star runs a terrestrial fiber-optic system between Anchorage, Fairbanks and Whittier plus a submarine fiber-optic cable linking Whittier, Juneau, Valdez and Nedonna Beach, Ore. It also offers intrastate and local telephone services.Neptune Communications also asked state regulators to step up the typical timeline for a ruling by about two months.Bankruptcy proceedings could conclude this spring, said Donald Schroeder, president and chief executive of Neptune Communications.Neptune Communications was chosen as high bidder during U.S. District Court procedures in Oregon for sale of assets from Worldnet, WCI Cable and its subsidiaries.Even though bankruptcy proceedings continue, the Fairfax, Va.-based Neptune Communications filed with the Regulatory Commission of Alaska in anticipation of successfully gaining controlling interest in Alaska Fiber Star, Schroeder said.Neptune Communications’ Feb. 8 filing with state regulators called for an expedited review of its application to acquire controlling interest in Alaska Fiber Star."We’re doing everything we can to protect the interests of the customers and keep the company going forward," Schroeder said.Neptune Communications asked for a review by April 30. Without a ruling by late April, Neptune Communications contended, there would be a risk of disrupting service to Alaska Fiber Star customers. Another reason for the request was that as part of its stock purchase agreement with WCI Cable, Neptune Communications might face monthly penalty payments of $250,000, the filing said.A comment period runs through March 13, said utility commission spokeswoman Agnes Pitts. Regulators would typically rule within six months of the completed application filing, she said.State regulators have not ruled on granting the expedited timeline, she said. State regulators would approve the request if they found compelling reasons for expedited treatment and if no other major utility issues conflicted with the timeline, she said.If Neptune is successful in its bid to acquire Alaska Fiber Star, according to the filing, "the operations of Alaska Fiber Star and its affiliates will be streamlined with a view to allowing the companies to become profitable." Neptune does not anticipate changes to the Alaska Fiber Star plant, according to the paperwork. For 2001 Alaska Fiber Star reported a net loss of $1.5 million.Schroeder, who has led Neptune for five years, also has been involved in international telecommunications projects. David Walker, Neptune Communications executive vice president, worked in Alaska with the predecessor to AT&T Alascom.The two men helped develop Alaska North Star, an Alaska-Lower 48 undersea fiber-optic cable, before selling it to WCI Cable in December 1997, Schroeder said.

Cossack Caviar attempts a comeback

Ron Decker, chief executive of Cossack Caviar Inc. of Arlington, Wash., has lost millions while trying something new in the Alaska fishing industry. If his idea gets the backing he needs, however, he could become a pioneer in eliminating waste in the processing of Alaska salmon.Decker and a partner, Dave Ederer, bought Cossack Caviar three years ago from its founder, Garry Shaw. For 30 years, Shaw had built up a successful business that bought salmon eggs from Southeast Alaska processors and fishermen and turned them into two products: frozen eggs for the Japanese market and heavily salted caviar for the American and European markets.Decker soon found that processors were becoming less willing to sell eggs, since they were the highest value part of the pink and chum salmon typically harvested in Southeast. He could buy salmon directly from fishermen, but that created a problem: What to do with the meat?Decker said he investigated producing fish meal, which is made by incinerating fish. The downside of fish meal is that it’s a low-value product, and Decker was looking for something else that would generate more revenue.He found it in a product called hydrolysate. Developed for use in the fishing industry by Canadian scientists, it’s created by grinding and heating the fish, then adding a natural enzyme to the fish and essentially digesting it, Decker said. The resulting product is high-quality protein with a shelf life of up to a year. It is used as animal feed, fertilizer and as feed for farmed shellfish.To commercialize the idea, Cossack formed a joint venture with a Canadian firm, Ocean Biosource Inc. of Vancouver, British Columbia, to build a floating hydrolysate plant on a barge. The concept was to process caviar at one end of the barge and create hydrolysate at the other.The barge, called the Alaskan Venturer, was ready by the 2000 fishing season. Capable of processing 450,000 pounds of fish a day, it was to be stationed at the fishing grounds near Juneau, Ketchikan and Sitka during the salmon openings in those areas."It was a disaster the first year," Decker said. The plant did not work right. "We bought millions of pounds of fish and didn’t produce a pound of good product."At that point, Decker says, Ocean Biosource pulled out of the joint venture. Cossack was on his own, with no markets for a product it couldn’t make. Decker wondered if the company should pull out, too.In February 2001, Decker decided to go for it. He spent the rest of the winter refitting the plant and headed north to the fishing grounds last summer. The plant still had problems, but they were finally solved near the end of the fishing season."By mid-August, it was running at full capacity," he said.By then, Cossack had spent a lot of money. Decker said the company had spent $4.2 million buying and outfitting the barge and the plant, plus about $2 million in what he called the "learning curve" of making it work. He said Cossack was left owing a total of $8 million to numerous creditors, including a bank and fishermen."We made some big mistakes and dug a big hole, financially speaking," Decker said.Without Ocean Biosource, Decker had no distribution channel and no customers for the hydosylate product."We had to learn the business," he said.Decker’s comeback plan was to locate investors willing to kick in about $2 million, enough to outfit the barge and buy fish this summer, along with paying off some creditors. He said he’s making the rounds of potential funding sources ranging from Native corporations to the state of Alaska.Decker has also been invited to make a presentation to investors during the InvestNet Capital Investment Conference later this month in Anchorage.In the face of all these difficulties, why is Decker still trying to make his venture work? He has several reasons.One reason is because his process doesn’t generate waste."The environmentalists like it because we use all the fish," he said. He said he also has support in Southeast from the state Department of Environmental Conservation and the Alaska Department of Fish and Game.Even more important is the lesson Decker learned when he visited the archenemy of the Alaska fishing industry: Chile’s fish farms. There, he observed a process that is fast, has extensive quality control, and which generates revenue from every bit of a farmed salmon in the form of bone meal, fish meal and fish oils.In other words, using all of the fish is efficient and makes it competitive on the world markets. Decker believes Cossack’s process can do the same for the Alaska salmon business, where currently 35 percent of the fish is not used."It speaks directly to an industry that’s dying," he said. "Waste isn’t a problem, it’s an opportunity."So Decker keeps knocking on doors and continues to work on selling the product he was finally able to make last summer so he can raise some cash."I’m selling the product to the shrimp farming industry in Thailand," he said. "Then we can come back to Alaska."

Polar routes not a factor in Anchorage's cargo business

Cross polar routes between Asia and North America that have cut by two-thirds the number of overseas passenger flights from Anchorage over the last decade pose little threat to cargo operations here, according to a Ted Stevens Anchorage International Airport official.Polar routes over the North Pole through Russian and Canadian airspace bypass Alaska and cut flight times by several hours between continents. But using the routes lessens the amount of cargo that can be carried in freighter bellies, according to Linda Close, marketing director at Anchorage International.In the aircraft cargo business it’s known as payload vs. range, the decision to top-off an airplane with fuel or go partially full and use the remaining capacity for cargo.Despite advances in long-range aircraft and more open skies over the North Pole, most air cargo carriers will chose cargo over fuel for many years to come, Close told business leaders at the Pacific Rim Construction, Oil & Mining Expo Feb. 21 in Anchorage.Anchorage International will remain one of the top five busiest cargo airports in the world, as airlines will continue to use the airport as a refueling pit stop between North America and Asia, Close said."We expect the impact to be minimal," Close said of the short-cut polar routes that overfly Anchorage.One pound of fuel -- about an eighth of a gallon -- costs an airline about 12 cents. Replacing that fuel with a pound of cargo earns the airline about $12, Close said.For airline accountants, the decision is easy, said Ray Keiser, an aviation consultant with Keiser Phillips Associates in Oakland, Calif."Airlines will use every possible economic advantage," Keiser said. "The more fuel you have, the less cargo you can carry. If they have to spend one or two hours in Anchorage to refuel in order to carry 20 more tons of cargo, they will."Anchorage International leads the nation in the amount of fuel pumped into cargo planes. The airport also ranks in the top five for passenger aircraft fueled, according to Signature Flight Support, the contractor that provides fueling services at the airport.It’s hard to get a perspective of Anchorage’s geographic advantage looking at a flat map of the world, but by looking over the top of a globe, it’s easy to see.Anchorage is less than nine hours by air from 95 percent of the industrialized world, including Asia, Europe and the rest of North America, according to Close."Location, location, location,’’ Close said. "If it wasn’t for that, we’d be dead in the water."Through the 1980s with Russian airspace off-limits, overseas flights had to pass through the Pacific or Europe, requiring a refueling stop in either Anchorage or Tokyo.The thawing of the Cold War opened up limited airspace over Russia, allowing straight-line polar routes, connecting points in North America and Asia.The shorter polar routes were appealing to airlines, which saved money and fuel, and to passengers, who saved time.A year ago, Russia permanently opened four polar routes to commercial airline traffic in return for airspace fees. The less circuitous Russian routes tied to polar routes in Canada would save airlines millions of dollars on fuel and other costs, according to a joint study by NAV Canada and the Federal Aviation Authority of Russia, counterparts to the United States’ Federal Aviation Administration.The study said that while the routes were feasible, $35 million was needed to improve Russian air traffic control facilities to make the polar routes safe.Even the limited use of polar routes began having an impact on Anchorage International beginning in the early 1990s, when the number of passenger stopovers began sliding from 1.5 million to about 555,000 last year, Close said.She believes the passenger numbers will remain stable now."I think passenger flights bottomed out a couple of years ago," Close said.Many of the world’s airlines still need long-range aircraft capable of flying 16 to 18 hours to take full advantage of the polar routes for passenger flights.On the cargo side, Close said, one long-haul jet that may have a small impact on Anchorage International is the Airbus A380, an airplane scheduled to make its first flight in 2004 and expected to enter commercial service in 2006.Close said the only air carrier that serves Anchorage taking delivery of the airplane is Federal Express, which is buying 10 of them over the next several years.The 555-seat airplane in passenger configuration still has tremendous space in its belly to haul cargo. But Close said airlines are looking more at installing duty-free shops and casinos in the huge airplanes’ bellies instead of using the space for cargo."They feel it will give them more revenue than will cargo," Close said.

This Week in Alaska Business History March 3, 2002

Editor’s note: "This Week in Alaska Business History" revisits events that shaped our past."Those who cannotremember the past arecondemned to repeat it."-- George Santayana, 1863-195220 years ago this weekAnchorage TimesMarch 3, 1982Wien-Western merger review startsBy Betty MillsTimes Washington BureauWashington -- With Administrative Law Judge William A. Kane Jr. promising his decision by June 14, the Civil Aeronautics Board launched its review of the planned takeover of Wien Air Alaska by Neil Bergt, chairman of the board of Western Airlines.Kane presided over a pre-hearing conference largely taken up with procedural matters. Kane said the board "has given me a short leash" in the acquisition bid. A decision by the full board is expected this summer, soon after the ruling by Kane.The CAB blocked the sale of Wien to Bergt’s Eagle Corp. on Dec. 31 and ordered a full review of the takeover bid.Anchorage TimesMarch 3, 1982Norton Sound oil, gas leases may bode ill for environmentBy Dave CarpenterTimes WriterNome would turn into a boomtown and spills would be likely if oil is discovered in a 2.4 million-acre area of Norton Sound targeted for a controversial federal lease sale next November.However, chances that commercial qualities of petroleum would be found are only 14 percent for oil and 26 percent for natural gas.Those findings are contained in the U.S. Bureau of Land Management’s final environmental impact statement for proposed Outer Continental Shelf Sale 57. The 2-inch-thick document was released last week, five months after public hearings in Western Alaska villages turned out a rash of opponents to the proposed sale.The petroleum industry has expressed strong interest in exploring the Bering Sea region, never before leased. Proposed federal offerings in the North Aleutian Shelf and Bristol Bay have drawn more attention, but the Norton Sound sale is seen as "a good first step," as one industry official put it.10 years ago this weekAlaska Journal of CommerceMarch 9, 1992Lucky trucker - he’s got a jobBy Margaret BaumanAlaska Journal of CommerceHeading out of Anchorage on a stormy day with tankers carrying 14,200 gallons of aviation fuel for a Fairbanks customer, veteran Dave McCloud knows he is a lucky guy.He’s a trucker with a job. For the past 17 years, McCloud, 45, has been driving trucks for James Doyle, now president of Weaver Brothers, one of Alaska’s top trucking firms. And McCloud, like others in the trucking industry, sees a tight year for the trucking industry in the face of decreased activity in Alaska’s oil patch.Although a flurry of activity is expected this summer, the outlook for the next few years will not bring growth, and more truckers have left the state since the start of the year, some trucking firms say."The traffic on the road from Prudhoe Bay is way, way down," said McCloud, as he completed his checklist before pulling his Kenworth out of the port area and onto the snow-covered road to Fairbanks.Alaska Journal of CommerceMarch 9, 1992Alaska wants control of navigable waterBy the Alaska Journal of CommerceState officials have filed suit against the federal government to protect Alaska’s interest in title and control of navigable waterways, says Gov. Walter J. Hickel.The suit, filed Feb. 27, was in direct response to the federal agencies’ takeover of important fishery areas and to assert the state’s authority over navigable waterways like the Colville, Alsek, Yukon, Copper and Chena rivers, Lake Iliamna and the waterways surrounding Afognak Island, Hickel said."The feds closed areas like Glacier Bay to subsistence and commercial fisheries that have been there a long time," the governor said. "This is clearly in violation of our statehood compact and the intent of ANILCA (Alaska National Interest Lands Conservation Act)."The suit was the first of a series of lawsuits against the federal government that Hickel said in his State of the State speech he planned to file.-- Compiled by Ed Bennett.

Russians praise Alaska worker training

As investment in oil and gas facilities in the Russian Far East continues, Russian officials from Sakhalin Island aim to boost local hire in the growing industry. The effort echoes sometimes similar goals in Alaska."We’re planning, in the coming weeks, to meet with companies to devise a strategy to increase Russian participation," said Galina Pavlova, shelf department director for the Sakhalin Regional Administration.Her department handles offshore oil and gas projects including regulatory compliance, overseeing contracting work and development of industrial infrastructure and environmental safety principles.Pavlova spoke Feb. 21 at the Pacific Rim Construction, Oil & Mining Expo at Sullivan Arena in Anchorage.She praised Alaskans’ efforts to create joint venture companies on Sakhalin."The Russian side really welcomes the formation of joint ventures which are usually Russian-based," Pavlova said through a translator.This year could see bustling construction activity on Sakhalin, according to plans proposed by oil development owners and the government’s goals for infrastructure work, she noted.Pavlova was pleased the Sakhalin I and II projects are advancing, since those efforts have been in progress for more than 10 years.Exxon Neftegas Ltd., owners of the Sakhalin 1 project, have proposed a 2002 budget of $700 million, four times larger than last year’s work, she said. Russian federal authorities are studying Exxon’s plans. Pavlova said her department aims to support the owners’ goal of beginning oil production in 2005.The Sakhalin II project, owned by Shell, Mitsui and Diamond Gas/Mitsubishi, began producing oil in summer 1999 at the Molikpaq offshore platform. Now owners are pursuing subsequent phases of oil field development. Last summer, owners laid the first stone for a 946 million ton capacity liquefied natural gas plant.Sakhalin government officials will review the Sakhalin II budget before approving it, Pavlova said.Russian leaders, including Pavlova, hope these oil development projects will employ Sakhalin and Russian Far East residents."We foresee in the coming years for both projects that 20,000 workers will be hired," she said.However, training is needed so Russians can be hired for those jobs, she said.Pavlova praised a recent training program in Alaska for Russians.The University of Alaska Anchorage American Russian Center conducted a small business management training program for Russian Far East business people Jan. 25-Feb. 22. The program was sponsored by the U.S. Agency for International Development."We are very grateful for the opportunity to train young engineers so they can work on Sakhalin," she said.Pavlova also commended Alaska for sending about a dozen government agency experts to Sakhalin to conduct an environmental survey and workshop, working with Pavlova’s department.Environmental issues are a key concern for Pavlova, who earned a doctorate in biology and chemistry from Moscow State University. Despite Sakhalin officials’ considerations for careful oil development, "the greens surely don’t let us sleep," she said.Her office is studying three methods for recycling drilling muds. Also, following the model in Alaska, Sakhalin officials are studying oil spill response plans, she said.Infrastructure development, needed for the oil industry projects, is a major issue for the Sakhalin region, Pavlova said. In this area, too, she hopes Russian companies take the lead in modernizing infrastructure. Despite tough discussions about financing, Pavlova said officials had reached an agreement and are now negotiating a timeline and specifics for project start-up.The goal is for upgrades to occur in the next two years, she said. Work would include roads, ports, bridges, the railroad and other projects necessary to complete Sakhalin’s oil projects, she said."I think this year both projects are looking at investing $70 million (for upgrades,)" Pavlova said.In other oil developments, Sakhalin III-VI are stalled while government officials consider approving production sharing agreements."President Putin promised that this question would be looked at. Unfortunately, nothing has taken place," she said.

Infrastructure work begins in spring on Sakhalin project

The engineering and construction contractor for the Russian Far East Sakhalin I oil development project plans to begin infrastructure construction work this spring. The multibillion-dollar project would take several years, heading to oil production start-up in 2005.Project director George Arzymanow said construction could include opportunities for Alaska companies. He spoke Feb. 21 at the Pacific Rim Construction, Oil & Mining Expo in Anchorage. As vice president with ABB Lummus Global, Arzymanow is based at its Houston office.The company will contract with Russian businesses on the project, although many Russian firms are forming joint ventures with Westerners including Alaskans, he said."We look forward to the significant contributions from Alaska companies," he said. "I see tremendous opportunity for Alaska companies for technology transfer and to assist on the project."Work on Sakhalin I development could be a stage for Alaskans to display their industry expertise, he said."We not only invite you, we need your help," Arzymanow petitioned audience members.Alaskans can contact Robin Richardson, executive director at World Trade Center Alaska, for ABB Lummus Global contact information, he said.One Alaska company, Natchiq Inc. and its joint venture Natchiq Sakhalin LLC, already are working with ABB Lummus Global, he said.In April ABB Lummus Global Inc. of Bloomfield, N.J., signed a contract with Sakhalin I project operator Exxon Neftegas Ltd. for design work in the first phase of construction. ABB Lummus Global, which specializes in engineering and construction for oil and gas, refining and petrochemical-chemical process industries, is owned by ABB Zurich, an international firm with 160,000 employees in 140 countries.The Sakhalin I project includes three offshore fields and will require construction of onshore drilling and oil processing facilities.Initial construction of the project could tally $4 billion to build infrastructure, buildings and drilling rigs, Arzymanow said.For 2002 Sakhalin I operators have been approved for a $700 million budget by Sakhalin government officials.ABB Lummus Global is conducting early engineering work, and Arzymanow is organizing a work force that could "mobilized onto the island to begin work in May."By October the company aims to install a drilling rig, he said. Drilling could begin in the third quarter. Rig construction is under way, which includes renovations to create a 90-meter square platform with 93-person living quarters to produce 200,000 barrels of oil per day, he said.Permitting, regulatory compliance and other government approvals also are in the works, he said.Arzymanow described the schedule as aggressive in the face of challenges that include a three-month weather window for sealifts transporting construction materials. Another issue is training or hiring workers with needed skills, including safe practices knowledge to perform construction, he said.Logistics are another concern on the Sakhalin I project, he said. Development of onshore facilities will be run from three engineering centers, five job sites and two module fabrication sites, he said.Other aspects of the project include 200 miles of marine and terrestrial pipeline, marine terminal, onshore well sites and processing facilities with storage tanks.Required Russian involvement in the project may also be a challenge, although Arzymanow holds that procurement from Russian companies may work well."We believe that the Russian manufacturing and fabrication community has the capability to help build and provide the materials we need," he said.

Self-discipline is what make a millionaire

I recently had a chance to reread Thomas Stanley & William Danko’s well researched 1996 study of American millionaires entitled, "The Millionaire Next Door." After reading it, one can’t help but wonder: Is it really worth it? Obviously, the answer for most people is yes, but the very fact that the question is raised at all is an indication of the power of this book. "The Millionaire Next Door" was on the New York Times bestseller list for over a year, and with good reason. We all think we are good at managing our money, but let’s be honest. How many of us prepare detailed family budgets and monthly personal financial statements? I recently finished a grueling accounting clean-up consulting project for a company in the entertainment industry. In part, this project involved reconciling cash accounts that had been out of balance by tens of thousands of dollars for most of the company’s history. They would just call the bank a few days before payroll was to be issued to find the bank’s balance, then transfer in just enough to cover the payroll. After sorting out this type of financial spaghetti during the day, who wants to do more accounting when you get home? Perhaps as busy employees and business owners you have had similar experiences. Unfortunately, applying sound accounting concepts to family finances is one of the predominate themes of this book. So who are these American millionaires anyway? According to Stanley & Danko, becoming a millionaire is not dependent on seven-figure salaries, huge inheritances, speculative stock picks or anything of the sort. In fact, the median household income of the millionaire is $131,000. Not a bad wage, but hardly what I expected from the typical millionaire. Here are some of the more common traits of the American millionaire: Self employed (self-employed people make up less than one-fifth of American workers, but account for over two-thirds of the millionaires);Often work in a "regular" business, such as mobile-home park owners, pest controllers, paving & welding contractors and farming;Work 50 hours or more per week;Are meticulous budgeters and planners with 62.4 percent tracking their family’s spending by category;Are an average of 57 years old, and have spouses "who are even more frugal than themselves;"Are fastidious investors, investing nearly 20 percent of their yearly household income;Invest heavily in the education of their children and for top quality financial and tax advice;Rarely, if ever take expensive luxury vacations; andLive in average homes in working-class neighborhoods; 37.6 percent drive cars three years old or older. Clearly it takes an unusually high level of self discipline and moderation to achieve this degree of net worth. "Deferral of gratification" is how I would summarize the authors’ main concept.Stanley & Danko are more specific: "The foundation stone of wealth accumulation is defense (reducing spending), and this defense should be anchored by budgeting and planning. Above all, it is the character of the individual which is the most important factor in predicting his/her level of wealth accumulation."From time to time, we all tend to re-examine our progress toward our goals in life, financial and otherwise. It is not that we all could, or even would want to sacrifice enough to become millionaires, but it is nice to see such an objective, well-researched blueprint of how others have done it.A wise man once told me that "the best way to become successful is to get advice from someone who already is." "The Millionaire Next Door" by Thomas Stanley & William Danko does just that. Jason S. Giaimo is president and chief accounting consultant of Anchorage-based Net Gain Business Consultants.

Company makes small-scale LNG work

What has always surprised entrepreneur Ray Latchem is how difficult it is to raise money in Alaska for Alaska projects, and to get Alaskans to invest in their own state."There are people in Alaska with money, but they want to invest it elsewhere. It’s always puzzled me," Latchem says.Fortunately, Latchem has been able to convince out-of-state investors on the merits of Alaska projects he and his wife, Shannon, have developed. Shannon is a former chemical engineer with Atlantic Richfield Co.The two have successfully launched small natural gas businesses and have formed a new company, Spectrum Energy Services, to develop small-scale liquefied natural gas technology that will be suitable for small Alaska communities.One exception to the lack of Alaska capital, Latchem says, is the Alaska Science and Technology Foundation, which is providing some funding in addition to Latchem’s own investment in the LNG technology development venture."ASTF has been outstanding to work with. They are very savvy people," Latchem said.One of the foundation’s purposes in supporting Spectrum is to have small-scale LNG systems suitable for Alaska, and to have the plants built in Alaska if possible, he said.Meanwhile, two Alaska companies formed by the Latchems are both doing well.They are the small natural gas distribution companies formed to serve Deadhorse, at Prudhoe Bay on the North Slope, and Fairbanks, the Interior Alaska city where fuel oil and coal have long provided the energy for homes and busineses.The Deadhorse gas company, in which the Latchems invested with several out-of-state partners, was started in the mid-1980s to supply gas purchased from the major producing companies to the industry support contractors and service companies who maintain camps and shops in the Deadhorse industrial area near Prudhoe.In 1992, Northern Eclipse was formed to develop a small-scale LNG project to supply Fairbanks with natural gas. A subsidiary, Fairbanks Natural Gas, was formed as a gas distribution company in the Interior city.The Latchem’s co-investor in the Fairbanks venture is, indirectly, the Caroline Hunt Trust, one of the descendants of the legendary Texas oil wildcatter H.L. Hunt.Latchem said he had to overcome a lot of skepticism that LNG could be economically trucked to Fairbanks and economically sold through a small distribution system.The technology involved is off-the-shelf. The skid-mounted small LNG plant and specialized LNG tank units for the trucks were acquired from the East Coast, where small LNG units are commonly used to supplement pipe-delivered gas during periods of peak demand.The idea of serving Fairbanks is working, however. Fairbanks is now the only city in the nation which is supplied with natural gas delivered totally as LNG, Latchem said.The company is also supplying LNG to the Talkeetna Lodge, a major hotel operated by Cook Inlet Region Inc. Latchem said trucks carrying LNG to Fairbanks stop at the lodge, outside of Talkeetna, to drop off fuel. The hotel is another first, he said, being the only large commercial facility in the nation totally heated with gas from LNG.In Fairbanks, Fairbanks Natural Gas Inc., a subsidiary of Northern Eclipse, is gradually expanding its distribution system and now has 45 miles of pipeline installed and 375 customers, including 150 residential homes, according to Keith Hand, the company’s chief financial officer.The company delivers 20,000 gallons of LNG per day in two tank trucks driving up the Parks Highway to its LNG plant near an Enstar pipeline in the Matanuska-Susitna Borough.The gas is being purchased from Aurora Power, a small gas producer and one of several gas resellers in the region.The company operates an LNG storage and regasification facility in south Fairbanks.A five-day supply of LNG is kept on hand there, Hand said, but so far there have been no disruptions to the two-truck daily supply of LNG up the highway, despite sometimes severe winter driving weather.Hand said that because the LNG is liquefied and trucked, the natural gas isn’t particularly cheap in Fairbanks compared to Anchorage, but it still competes well against the main alternative, fuel oil.The company sells gas for about $8.56 per thousand cubic feet for small residential users in Fairbanks, more than twice the $3.50 per Mcf being paid by typical residential customers in Anchorage, he said.But it still looks good in Fairbanks when the alternative is buying fuel oil and paying $8.71 for the comparable amount of heating energy at current oil prices, Hand said.

Anchorage residents want solution to fiscal gap this year

JUNEAU -- Anchorage-area residents overwhelmingly want a solution to the state’s fiscal gap this year, which they believe must include a constitutional cap on spending, according to a new poll released Feb. 25.The results lend support to both sides of the debate currently going on in the Capitol.The poll was conducted Feb. 15-20 by Dittman Research Corp. of Anchorage, a veteran political polling firm. It was limited to the Anchorage area simply because it was tacked on to another poll that already was being conduced, said pollster Dave Dittman. About half the state’s population is in the Anchorage area.In the survey, 68 percent of respondents agreed with the statement that Gov. Tony Knowles and the Legislature "need to find a solution to Alaska’s budget gap this year." The question posed did not mention possible solutions.A quarter said a response could wait until next year, and 7 percent were unsure.Support for action in 2002 was found across most party lines, although Democrats and nonpartisans favored it somewhat more strongly than Republicans.That part of the poll backs the stance of the Fiscal Policy Caucus, a bipartisan group of legislators pushing for new state revenue. Those legislators note that a key reserve fund is headed for depletion in 2004, leaving the state with a shortfall of $1 billion or more. Because some taxes can take several months or a year to implement, action can’t wait until the 2003 session, caucus members say.On the other hand, 66 percent of Anchorage-area residents said they support a constitutional amendment to limit spending.Such an amendment has passed the Senate and is awaiting action in the House Finance Committee.The sponsor, Senate Finance Co-Chairman Dave Donley, R-Anchorage, said the proposed 2 percent annual limit on increases in the state general fund and certain other nonfederal funds is necessary to build public confidence.

Judge rules ACE can still deliver mail

ANCHORAGE -- A bankruptcy judge has ruled that Alaska Central Express can continue to provide mail service while challenging the U.S. Postal Service in a legal dispute, the airline said Feb. 20.The carrier, which has hauled bypass mail in Alaska since 1988 and employs about 100 people, filed for Chapter 11 bankruptcy last month.It has been engaged in a yearlong dispute with the Postal Service after it was notified that it would no longer be eligible to carry bypass mail between Anchorage and the state’s larger communities.U.S. Bankruptcy Judge Donald MacDonald issued an order Feb. 19 granting Alaska Central’s motion to stay the Postal Service decision. The judge also asked that the case be heard on an expedited basis.

Cowdery introduces insurance reform measures in Alaska Senate

Sen. John Cowdery, R-Anchorage, has introduced a bill to prevent insurance companies from using a customer’s credit rating to determine rates, and to halt use of "aftermarket," or used, replacement parts in settling accident claims without permission of the insured car owner.Under Cowdery’s SB320, insurers would be prohibited from using credit scoring, a practice which the Anchorage Republican says has no merit in determining risk exposure to an insurance company, and which could be used in a discriminatory way."I support the rights of any company to protect its assets by limiting exposure to risk, but I also believe in protecting rights of individuals to keep personal information private," Cowdery said."The use of personal credit information provides nothing to the insurance companies except a method to charge customers more. This is particularly true when other rating data, such as driving records, illustrate a driver to be low risk. Credit scoring, which may change due to events such as a divorce or decreased spending power, does not accurately reflect a driver’s risk on the road."Cowdery’s bill also requires insurance companies to obtain consent from consumers prior to using aftermarket replacement parts during repair work."An insurance company insures your vehicle and insures the parts in your car," Cowdery said. "These are usually originally manufactured parts. If that is what is insured that is what should be replaced."Use of aftermarket parts may nullify the manufacturer’s warranty or cause unnecessary safety risks due to an imperfect fit in an auto, Cowdery said.Committee approves measure for temporary state water-use permitsThe House Resources Committee approved House Bill 420, eliminating a "sunset" provision in state law regarding the issuing of temporary water permits. The bill is now in the House Resources Committee, awaiting placement on the calendar for action by the full House.The current law provides a way for the state Department of Natural Resources to issue temporary water permits for projects like building ice roads on the North Slope. Without the law, time-sensitive projects could be delayed.The law contains a sunset provision, or a section that voids it without new action by the Legislature. House Bill 420 would extend the law.Regulatory Commission of Alaska would continue if bill approvedLegislation that will extend the powers of the Regulatory Commission of Alaska moved from the Senate Labor and Commerce Committee to the Judiciary Committee. The bill would extend the "sunset" date in the current law, so that the RCA will continue its regulation of public utilities and pipelines in the state.

Military seeks permit for radar

Even Pentagon planners have to apply for permits.The U.S. Missile Defense Agency has applied for a wetlands permit with the U.S. Army Corps of Engineers to begin construction of a portion of the nation’s new missile defense system at Eareckson Air Station on Shemya Island.Proposed work at the U.S. Air Force installation includes upgrades to the existing Cold War-era early warning radar system, utility extensions, housing and infrastructure improvements, dredging and land-clearing.Most importantly will be the installation of test equipment related to X-Band radar, the most powerful tracking and detection device in the world and the heart of the national missile defense system.Lt. Col. Jim Balocki, deputy commander of the ballistic missile defense program for the Alaska district, said work will begin this summer, once a permit is in place and a federal environmental impact statement completed.Work related to the national missile defense system in Alaska also is slated for Fort Greely and Eielson Air Force Base. A test missile complex is set for construction this summer at Fort Greely, as is a transfer facility at Eielson for shipment of booster missile components.Missile launch facilities on Kodiak Island also are being considered.The test facilities at Fort Greely and Shemya are expected to be completed by mid-decade, according to Department of Defense officials.About $198 million will be spent at Fort Greely this year, and $48 million at Shemya, Balocki said.An estimated $12.5 billion is needed to fund the entire missile defense project, a top priority with the U.S. Defense Department.Only two miles wide and four miles long, Shemya Island is one of the most important pieces of real estate in the United States. It has long been used by the military to monitor missile tests in Russia and as a refueling stop for U.S. war planes.The island’s location on the tip of the Aleutian chain makes Shemya ideal for the new antiballistic missile radar, designed to get an early look at any missile fired at the United States from Russia, China, Iraq, Iran or North Korea, Department of Defense officials say.The antiballistic radar at Shemya would lock onto warheads as they cross the Pacific and guide intercepting missiles from mainland Alaska. In theory, the Alaska-launched missiles would destroy the incoming missiles on impact above the Earth’s atmosphere.Shemya, with the Bering Sea on one side and the Northern Pacific on the other, is closer to Russia and Japan than it is to Anchorage, 1,500 miles to the northeast.The tiny island’s location, while strategically significant, is one of the worst places on Earth to build anything, and it is a logistical nightmare, said John Killoran, a U.S. Army Corps of Engineers spokesman in Anchorage."It’s awful out there but the location couldn’t be better," Killoran said.Weather on Shemya is brutal, even by Alaska standards. Calm, sunny days are rare. Earthquakes have rocked the island repeatedly over the years.Air Force Capt. Heather Anderson said she loves the place."It takes a special kind of person to work here because it’s so remote," Anderson said.To the 100 or so people who work on "The Rock" or the "Black Pearl," the incredible weather conditions are known simply as the "Shemya Factor."For example, Anderson said, in the winter snow blows and swirls almost continuously, creating a sand-blasting effect. And the warmer weather doesn’t always bring better conditions. Last summer saw 122 consecutive days of fog."For 122 days it was as thick as pea soup. You couldn’t see in front of your face," Anderson said."We have hurricane-force winds without there actually being a hurricane, on a regular basis," Anderson said. "It’s pretty spectacular."There are a few temporary duty Navy and Air force personnel on the island like Anderson, and about 90 contractors from Chugach Eareckson Support Services, a joint venture between Del-Jen Inc. and Chugach Development Corp.The contractors are charged with keeping the island’s runway open to military and commercial traffic and other island operations.The island also is home to about 18 Arctic foxes known locally as scruffys. The foxes earn their keep by keeping goose populations at bay, lessening the risk of aircraft-bird collisions, Anderson said.Companies from California, Washington and Alaska have submitted proposals to the Missile Defense Agency to do the planned work this summer. A contract should be awarded by April, and work will begin immediately thereafter, Balocki said.Barge shipments would have to come either from Anchorage or Seattle, 3,000 miles away.Shemya has only one dock, and the island’s beaches are home to many shipwrecks.Balocki said the window of time for construction is narrow, so shipments must be precise."It’s not like there is a Home Depot on the next island," Balocki said.

Dick Pacific-Ghemm to build Bassett hospital

The U.S. Army Corps of Engineers Alaska District has chosen joint venture firms Dick Pacific Corp. and Ghemm Co. as general contractors to build new Bassett Army replacement hospital at Fort Wainwright.The project contract award, a major construction project in Alaska, comes one year after the original bid and construction start timeline.Work on the $178 million construction contract is set to begin in May and should be complete in June 2006.Dick Pacific operates an Anchorage office that will serve as joint venture headquarters. The company has been operating in Hawaii since 1939 and serves the Pacific Rim from a Guam office. Dick Pacific Construction, which expanded to the Pacific Northwest to pursue projects in Alaska, Northern California, Oregon and Washington, is owned by Dick Corp. of Pittsburgh. At the Anchorage office, alliances with area contractors are established to pursue military, private and public sector projects, according to company information.Fairbanks-based Ghemm Co. marks its 50th anniversary this year. The project award is significant to the company, said president Bert Bell."We’re going to be busy," he said.Ghemm formed a joint venture with Dick Pacific to handle financing on the major construction project, Bell said. Dick Pacific also was looking for a partner on the project and made the match because Ghemm could provide Alaska expertise, he said.The scope of the project is significant, Bell noted."It’s a big building and a complex building that has a lot of special needs," he said. Since it is a medical building, the project will require extra considerations, he said.The total programmed amount for the project is $215 million, including the government’s cost for administering the construction contracts, Corps officials said.Phase I of the project, including site development and project office construction, was completed last year. Construction of the new hospital is next. Subsequent stages of the project include installation of medical and communications equipment and later demolition of the 50-year-old hospital.The 32-bed replacement hospital will measure 269,000 square feet.The bid award concludes a process that had to be restarted last year. Construction was originally to begin in summer 2001. However, the Corps canceled the solicitation for bids in January 2001 without awarding a contract, citing high prices received in bid proposals.Last October the Corps again issued a request for proposals. The new proposal featured a budget increase of more than $80 million.

Philosopher-consultant teaches leadership key

Peter Koestenbaum is a philosopher. He is also a business consultant specializing in developing the leadership skills of managers at large companies around the world.What does philosophy have to do with business? Plenty, says Koestenbaum, who holds degrees from Stanford, Harvard and Boston universities and who taught philosophy for 34 years at San Jose State University in California."Philosophy is not only about the abstract," Koestenbaum said. "It’s about life, human beings and the world. All science began with philosophy."Business is building and creativity. It’s why I as a philosopher went into business."And, he adds, entrepreneurship is the highest form of business creativity. Koestenbaum said he especially admires entrepreneurs because they show vision and courage, two of the attributes he believes all great leaders must have.He will meet some of those entrepreneurs March 13, when he is scheduled to make two presentations at the Alaska InvestNet Capital Investment Conference in Anchorage.

Providence completes expansion project

Construction has been completed on phase two of a $45 million expansion project at Providence Alaska Medical Center in Anchorage. On Feb. 4 the hospital opened its new Ambulatory Procedures Department, formerly called Day Surgery.The 11,000-square-foot area features more private pre- and post-operative rooms, a new pain clinic and three new surgical suites. As a result, Providence now tallies 16 operating rooms. The new operating rooms were finished before the project’s completion and went into service two months ago, said Vince Huntington, assistant administrator.Work on this part of the project began last summer after completion of a new emergency room.Providence children’s program gains accreditation until 2004Providence Alaska Medical Center has received reaccreditation for its Center for Child Development and the BP Early Learning Center, also operated by the hospital.The National Association for the Education of Young Children granted the accreditation, which runs through 2004.The Center for Child Development at Providence serves 150 children age 8 weeks to 9 years. At the BP Exploration (Alaska) Inc. headquarters, the BP Early Learning Center serves 69 children in the same age group.To achieve the voluntary accreditation, a facility’s program must show its early childhood programs meet national standards of excellence. Programs seeking accreditation undergo a self-study and collect information from parents, teachers, administrators and classroom observations. Early childhood professionals trained by the national organization NAEYC visit facilities to confirm self-study results. A group of national experts then independently reviews the information to grant or defer accreditation.About 7 percent of early childhood programs nationwide, or 8,138 programs serving 722,009 children, have obtained this accreditation, Providence officials said.

Railroad straightens first three miles of track to Valley

The Alaska Railroad Corp. last month completed its realignment of about three miles of track on Elmendorf Air Force Base, the first in a series of line improvements between Anchorage and Wasilla that will cost a total of $78 million. The new alignment between miles 118 and 121 of the railroad moves the track 3,000 feet further east of the east-west runway at Elmendorf to alleviate safety concerns the U.S. Air Force had with the line’s location, according to Patrick Flynn, Alaska Railroad spokesman.A new passenger main track was added, as was a new line for freight in the three-mile stretch. The old track will be pulled up by April, according to Flynn.Construction went smoothly, with minimal traffic delays, Flynn said. The line is made of continuously welded rail designed to lessen "clickity-clack" noise, he said.The state-owned railroad began construction last spring on the project that will straighten some 70 curves on the Anchorage-to-Wasilla line. Some road crossings along the track also will be improved for increased safety, according to the railroad.Most of the funding for the $78 million project comes from the Federal Railroad Administration, with the railroad matching about 20 percent of the overall cost, Flynn said.Construction will be done in three phases: Anchorage to Eagle River Bridge; Eagle River to Knik River; and Knik River to Wasilla.The railroad, along with Anchorage-based Wilder Construction Co., began work last April on the first phase of the project, a 10.5-mile stretch from the north end of the Anchorage Rail Yard to the Eagle River Bridge. That phase is scheduled for completion next year, Flynn said.When all three phases are completed in 2004, railroad officials say the travel time between Anchorage and Wasilla will drop from 90 minutes to just under an hour. Trains should be able to maintain speeds of about 50 mph instead of 20-25 mph, Flynn saidMost of the curves along the line will be reduced from 10 degrees to 2 degrees.The shorter travel times and reduced track curvature will also reduce wear and tear on the trains, according to the railroad.The Anchorage-to-Wasilla track is the most meandering leg of the 471-mile railroad, and has had the highest number of derailments over the years.Other improvements along the line include building roads over or under the tracks, instead of at-grade, or level with the road.

People need to know real estate regulations

It makes one wonder how different things might be in the real estate industry if the general public knew more about our rules of ethics and requirements under Alaska law. And since most people don’t really know a lot about what motivates and restricts us, then it is our responsibility to educate them as we go.Every real estate agent is required to take continuing education credits every two years to maintain skills and abilities. This is one of those years. There is a mix of required and elective credits, and all are designed to protect the general public.The classes relentlessly drill into us that you, the general public, acting as a buyer or a seller, are our "bosses" and that we must perform our duties with a certain level of speed and accountability. If an agent has entered into an agreement with you, either written or implied, then he or she has a lot of responsibilities under the law to you. And this is true whether you pay our commissions directly or not.I think of how different things might be if the public only knew how strictly the laws are interpreted. I believe that agents would probably keep in closer contact with you, answer their phones quicker, negotiate a point of contract more promptly, present all offers to you immediately, keep their "bosses" more informed, and probably act more professionally overall. Our image may improve a bit, and the public might be happier with our industry.The following item serves as a good example of "if the public only knew." Twenty years ago all real estate agents worked for the seller of real estate regardless of our connection to the buyer according to the law. So if my own grandmother just received an insurance settlement and could pay cash for your home that I was helping her buy, the law said that my fiduciary responsibility is to disclose that information to you, the seller, my "boss."And yet, if I disclose that information then my own grandmother’s ability to negotiate a better price is severally compromised, if not undermined. I can tell you of many stories where someone felt betrayed by the agent who was simply obeying the law.Thank goodness the law was changed and that the laws in general are continuing to change for the better. Today, it’s more like what everyone intuitively understands where buyers can "hire" their own agents who are now required by law to represent only their interests. The agents listing a property still represent the seller only. Everyone knows where he or she stands and, in theory, everyone is well served.But, as you guessed, there is an exception. And this exception can create some discord between agents and their clients. Where an agent ends up representing both sides of the transaction, he or she is called a "dual agent." His or her ability to help either party negotiate or strategize is further limited by the law. Agents representing both sides of the transaction are legal and acceptable as long as their status is disclosed and agreeable to all parties.An example of that exception would be if I’m selling my best friend’s home and am having an open house. I’m definitely, at that point, representing the seller only. If a buyer has an agent and comes through the home and decides to make an offer, there is no problem because everyone has his or her own representation and everyone knows it.However, if you come through, and you don’t have an agent but want to make an offer through me, the listing agent, then everything changes. In that instance I become a dual agent because both parties now believe that I’m representing them. The law now restricts me from suggesting a price, other than the one listed, for either party or from disclosing any pertinent information about one side to the other side without express permission to do so, even though I would be doing this for my client if I represented only the seller or only the buyer.In fact, there is a five-page form for disclosing to all parties what a dual agent can and cannot do. Agents can get into big trouble if they mislead or fail to disclose, even if this part of the law is not always understood or totally clear by the agents or by the general public.There are several ways for you to educate yourself about how we are supposed to perform our services. One way is to read articles like this one. Another way is to interview different agents. Find one that will inform and educate you as you go. Either way, if you only knew more about what we do, then I can’t help but think that you would be better served.Ken Jelinek is an associate broker with RE/MAX Properties in Anchorage. He can be reached at 907-257-0196.

Frontier Flying Service studies adding Kenai-Anchorage flight

KENAI -- Commuters in search of choices in the air market from the Kenai Peninsula to Anchorage may soon have another alternative. Fairbanks-based Frontier Flying Service Inc. is considering joining the Kenai market, which is currently served by just one passenger carrier, Era Aviation.Marina Jarvis, Frontier’s marketing director, told the Kenai Rotary Club recently that the company is awaiting word on a federal loan that will help it acquire a sixth aircraft, which would allow expansion into the Kenai market. Frontier expects to hear the status of the loan by April, which would enable the company to begin flights to and from Kenai as soon as May.It would be the culmination of months of talks between Frontier and Kenai Municipal Airport Manager Becky Cronkhite. Cronkhite said the city of Kenai has been encouraged by the commuters in the population to get another carrier in to compete with Era, which is in its 18th year of serving Kenai. She said she knows Frontier well from her days in the Interior."We’re not talking to a start-up operation. Frontier has a good business background and an excellent safety background," she said. "They’re a good company."Established in 1950, Frontier was purchased by John Hadjukovich in 1974. The company employs 150 people, including 47 pilots, who fly Frontier’s current fleet of five Beech 1900 aircraft, which are capable of carrying 19 passengers each.In addition to five flights a day between Fairbanks and Anchorage, the company flies established routes to the Yukon-Kuskokwim region, the North Slope and such Interior villages as Galena, Nulato and Kaltag.Cronkhite noted the importance of getting an established carrier in the market after a series of failed attempts by others, TransNorthern and Yute Air most recently, to remain viable as the market’s second carrier. "The city has seen enough airlines come and go that we want to bring someone in that’s stable," she said. "Frontier is here to stay. It is my personal opinion that Frontier is the best company out there that I can market to."In her address to the Rotary club, Frontier’s Jarvis emphasized that the point of coming into the market is not to compete with Era but, rather, to complement and augment existing service. "We can’t compete with Era," Jarvis said. "If they dropped their prices, we couldn’t match them."To that end, Frontier also is seeking assistance from the city to get service up and running out of Kenai. Jarvis said in addition to getting landing fees waived and leasing costs reduced for the first 12 months of operation, the company also would need assurance from the business community that 50 percent loads could be maintained on the expected two daily flights Frontier would make between Kenai and Anchorage."Our start-up costs must be offset by corporate guarantees and local incentives while the market matures," Jarvis said. She said the operational costs of the aircraft will make it difficult for Frontier to offer fares cheaper than Era’s. "Sixty-seven dollars is not a bad fare," she said. "You could drive it cheaper, but we’d be here to cater to business travelers who just need to get from point A to point B. Here’s another option."

Juror convicts defendants despite sharing a marijuana moment

A man sitting on a jury in West Virginia was sentenced by the court after pleading guilty to smoking marijuana with the three defendants in the case. Despite sharing the marijuana moment, the juror voted to convict the defendants. The juror was found guilty of contempt of court.Lawyer attempts legal suicideAtlanta attorney John J. Lieb, saying he was "sick of the law," attempted to have himself disbarred. Lieb, admitted to the bar in 1983, complained about the practice of law by saying he thought he "was going to be a champion of the underdog. Instead, I became a handler of venomous snakes." He vows to never practice law again.Lieb had a third party file a charge against him with the State Bar and then failed to appear to answer, thinking this would lead to his disbarment. The facts alleged by the third party, however, were never investigated by the State Bar. The claim was dismissed for lack of probable cause, and Lieb is still a lawyer.But will $26 million be enough?The price of becoming a lawyer is increasing dramatically, maybe as dramatically as the salaries paid to associates at large law firms. According to the National Association for Public Interest Law, tuition at law schools accredited by the American Bar Association more than doubled during the 1990s. The average law student now graduates with debt exceeding $80,000.That translates into loan repayments of about $11,000 a year over 10 years. But not all graduates are headed for big firms where they can afford those kind of payments. The average salary of attorneys working in public interest law positions is $31,000 a year.The computer sentences youA new software program, CrimeTime, helps California judges decide on sentences by sorting through the more than 1,900 crimes in the Penal Code and calculating how much time a defendant faces for a specified crime.The judge can plug in prior convictions, extenuating circumstances, and so on and get back a range of time for sentencing purposes. The software is also used by criminal lawyers to forecast possible sentences for their clients if convicted.HistoricalIn the 1640s, Virginia, then a colony, established a fee schedule for attorneys. The rate was low in comparison to those set for other professions and was payable in tobacco.Hearsay"This truly was a network that was vegetables for vegetarians. Too narrow."-- Court TV’s chief executive on the channel’s programmingFootnoteFirst there was Starving Students, the moving company. Now, there’s Starving Lawyers. An advertisement in a Los Angeles legal newspaper is headlined "Starving Lawyers" and offers "reliable" and "cheap" legal services by California licensed attorneys. They are available starting at $20 an hour.Have something to share with Out of Court? E-mail it to Chet Olsen at ([email protected]).

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