Around the World April 22, 2001

STATE Fishery council proposes Steller sea lion planANCHORAGE -- A federal panel on April 16 approved a plan for the second half of this year that increases protection for Steller sea lions in some areas while boosting opportunities for commercial fishermen.The new emergency rules were approved by the North Pacific Fishery Management Council 9-1, with Jim Balsiger of the National Marine Fisheries Service in opposition. It now goes to the secretary of commerce for approval.The plan customizes restrictions for 13 fishing areas from Prince William Sound to the Aleutians. It replaces regulations for the industry imposed in December in the wake of lawsuits filed to protect the endangered Steller sea lions.The new plan provides increased sea lion protection in areas where they are declining, while allowing more pollock and other groundfish harvesting in areas where sea lions numbers are rising. Those include productive grounds near Dutch Harbor and Unimak Island, near the tip of the Alaska Peninsula.Council recommends IFQs for halibut charter boatsKENAI -- Charter boat skippers soon could own shares in Alaska’s annual halibut quota under a plan recommended April 14 by the North Pacific Fishery Management Council."I’m real pleased," said Bob Ward, secretary of the Homer Charter Association and a member of the council’s advisory panel. "The fact that it was 8-3 tells me the council needed to do this."The plan, which still must be approved by the U.S. Secretary of Commerce before it can take effect, would give charter skippers individual fishing quotas similar to those already in place for commercial halibut fishers. It also would allocate the charter fleet a fixed share in the annual halibut quota.Commercial fishermen long have called for a cap on the charter catch. That is because regulators figure the biologically acceptable halibut harvest each year, then subtract the sport catch before setting commercial quotas. Some commercial fishermen fear a growing charter catch could take a big bite from the commercial fishery.Charter skippers, though, have argued that capping the charter catch would set off a race for the fish. The charter season could close early, and skippers might have to cancel reservations booked months before.Cordova voters turn down cruise ship head taxCORDOVA -- Voters here have defeated a proposed $5-per-passenger fee on cruise ships -- by one vote.The city held its second recount of the March 6 vote on April 11. The outcome showed 324 votes against the head tax, and 323 in favor, City Clerk Dixie Lambert said.When voters first went the polls, the initiative passed by one vote. But the vote flipped to 324 against to 323 in favor after a group of citizens demanded a recount.Ironically, none of the large cruise ships making port calls around Southeast Alaska each summer with their 640,000 passengers stops at Cordova.The Prince William Sound community lacks a deep-water port.South Korea likely to join salmon commissionWASHINGTON -- South Korea’s ambassador says the country will probably join an international group that coordinates enforcement of a high seas ban on drift net fishing for salmon, according to Alaska Lt. Gov. Fran Ulmer.Ulmer, president of the North Pacific Anadromous Fish Commission, met with Ambassador Sung Chul Yang on April 12.Ulmer said she hopes South Korea will become a commission member before the October annual meeting in Victoria, British Columbia. Current commission members include Japan, Russia, the United States and Canada.The commission coordinates enforcement flights and cruises by member nations whose salmon use the North Pacific region covered by the high seas drift net ban. That area includes all water north of 33 degrees and more than 200 miles from shore.NATIONHigh tech stock leader Cisco issues warningSAN JOSE, Calif. -- Cisco Systems Inc. is warning investors that its third-quarter performance will fall far short of forecasts amid decreasing demand and increasing inventory backlogs.The San Jose, Calif.-based networking giant also said April 16 it planned to cut about 8,500 jobs.Cisco said it expects third-quarter revenue to be 30 percent below the company’s second-quarter sales of $6.7 billion, or about $4.7 billion.It would be the first time in Cisco’s 11-year history as a public company where revenues fell from quarter to quarter. In the year-ago third quarter, Cisco had $4.9 billion in revenue.Bankrupt California utility passes on some bonusesSAN FRANCISCO -- PG&E Corp. eliminated the bonuses of the two executives in charge of its bankrupt utility but gave out substantial raises to managers at its thriving, unregulated businesses, the company said April 16.PG&E Chairman Robert D. Glynn Jr.’s salary and benefits for 2000 were down 58 percent, from $2.26 million in 1999 to $945,000, according to the company’s proxy statement.Gordon R. Smith, the utility’s president and chief executive, didn’t receive his usual bonuses and earned $660,000, a 41 percent drop from the previous year.PG&E blames its utility’s bankruptcy on lawmakers and regulators for passing a 1996 deregulation law that included a rate cap that prevented the company from passing on the full costs of soaring wholesale electricity prices since last May.Bush to fight for Alaska to Chile trade zoneWASHINGTON -- President Bush said he will "fight for the right" to establish a free trade area stretching from Alaska to Chile, previewing the case he will take to a 34-nation summit this week."I believe we can get it done,’’ Bush said April 16, four days before leaving for the Summit of Americas in Quebec City. "It’s going to require a lot of hard work and effort to do so.’’ The proposed Free Trade Area of the Americas, getting skeptical reviews from Congress and some Latin American countries, will be the focal point of the summit, which opens Friday amid threats of anti-globilization demonstrations.Consumer confidence on the reboundNEW YORK -- American consumers must work four months just to pay taxes. Their mutual funds have plunged. Layoffs loom. Their utility bills are up. They are deep in debt.But consumer confidence is up.Confidence did fall sharply during the past year, but it rebounded in March even as some of the other economic indicators worsened. Business confidence, for example, remains depressed.Compiled from business wire services.

Lines offer short cruises

Two cruise lines operating in the Alaska market are also planning shorter voyages this year in the Pacific Northwest, starting this spring.Last year Royal Caribbean International launched its three- and four-night cruises from the Port of Seattle, calling itself the first major cruise company to offer these shorter cruises. The company plans to offer the packages again this year, featuring its new 2,100-passenger Radiance of the Seas.This year Princess cruise line will begin offering three- and four-day round-trip voyages from Vancouver, British Columbia, that include a stop in either Ketchikan or Sitka. The four voyages serve to reposition the vessels at the start and close of cruising season for its Alaska voyages, but the company also hopes the trips provide a sample of the area, according to spokeswoman Julie Benson."We’re not in the short cruise market," she said. "We’re trying to address a new audience and showcase our product."Princess’ cruises start May 9 with a four-day voyage that includes a stop in Ketchikan; a similar run is set for Sept. 15. Two other trips are set for Sept. 17 featuring a stop in Sitka and Sept. 22 visiting Seattle and Victoria, British Columbia.The shorter trips are ideal for people with busy schedules, Benson said. Also, the company, noting that its research shows passengers want flexibility, is offering options in dining and entertainment plus shore excursions pre-ordered online, Benson said.Ketchikan Visitors Bureau director Patti Mackey said repositioning cruises are typical in the industry. Similar abbreviated cruises also are conducted by chartered cruises visiting the Southeast community, she said.The Port of Seattle is working to bring cruise lines to the recently upgraded port, she said. "They certainly are making cruise lines offers."Doug Williams, Port of Seattle spokesman, said in 2001 he expects to see 50 cruise ships visiting the port, up from 36 last year. In 2000 Norwegian Cruise Lines used Seattle as a home port for its 21 seven-day cruises to Southeast Alaska; this year the company plans 23 Southeast cruises, he said.Royal Caribbean operated six three- and four-night cruises from Seattle to other Pacific Northwest ports including Victoria last year, he said. In 2001 the cruise line plans 14 shorter Pacific Northwest voyages, he said.Later this spring, port officials anticipate completion of phase two construction at the Bell Street Pier Cruise Terminal at Pier 66, he said. Work included building larger concourse areas, separate embark and disembark areas, an all-weather canopy and other amenities, Williams said.Response to Royal Caribbean’s Pacific Northwest voyages proved favorable, based on bookings and passenger comment cards, said company spokeswoman Merle Jones.The new Radiance of the Seas accommodates 100 more passengers than the vessel serving the route last year. The 962-foot ship features the latest in environmental technology, such as two smokeless gas turbines. Amenities include a climbing wall, self-leveling pool tables and a coffee and book shop, among others.

Adak votes for incorporation

ANCHORAGE -- Residents of Adak have voted overwhelmingly to become a city, according to state elections officials. The count from the April 3 election showed a 61-6 vote for incorporation as a second-class city, according to Janet Kowalski, director of the Division of Elections. The votes were mailed to Juneau for tallying by her division. For the state to accept the city, voters also had to pass two accompanying tax measures, which they did. A 3 percent sales tax was approved 57-10, and a 2 percent fuel transfer tax was passed 54-12. Along with the incorporation, voters picked a seven-member council from eleven candidates. Adak had six thousand residents before the Navy closed its base there. Now, the population on the island 500 miles west of Unalaska is estimated at roughly 300. There are 424 registered voters on Adak, Kowalski said. Many of them are likely no longer active voters, but federal laws make it hard for election officials to purge voting rolls. For the precinct including Adak, 33 votes were cast for president in 2000 out of 561 registered voters, for a turnout of less than 6 percent. The precinct runs from Adak to the far end of the Aleutian chain.  

Community property law has benefits

The 1998 Alaska Legislature enacted a community property system, the Alaska Community Property Act, based in part on the Uniform Marital Property Act. To participate in this community property system, couples must elect in, either partially or completely. For example, a couple may elect to have only certain assets characterized as Alaska community property. Benefits of a trust There are two types of benefits that an Alaska community property trust would provide. First, community property is a property ownership system that generally provides for equal ownership of property by husband and wife. Usually, there is a sharing in the appreciation and income from the property. Similarly, there is often an equal sharing in the management of the property. Many couples find this equality and sharing arrangement the preferred form of property ownership. From an income tax standpoint, community property is currently given a significant tax advantage. At the death of the first spouse, both spouses’ interests in the community property receive a full basis adjustment. As a result, there will be no capital gain payable if the property is sold for its value at the date of the first spouse’s death. Further, the increased basis will allow for increased depreciation deductions for business and investment depreciable property. In a separate property state, if the property were jointly owned between husband and wife, only one-half of the property would receive such an adjustment in basis. Such a full basis adjustment is often very desirable. After one spouse dies, it may be necessary for the surviving spouse to sell certain assets. The family business may need to be sold due to the decedent’s lack of participation, or pursuant to an existing buy-sell agreement. Real property may be considered burdensome to manage. Market conditions may dictate the sale of assets before an expected downturn. Assets may need to be sold to replace the decedent’s earnings. If a full basis adjustment has been obtained, capital gain taxes will be eliminated or greatly reduced. The use of an optional community property system to obtain a full basis step-up is a new development in the tax law. We are not sure if the Internal Revenue Service will attempt to challenge it, absent new legislation. Alaska has a strong tax law position. This is probably why the Treasury Department has proposed new legislation eliminating the full basis adjustment. However, we anticipate vigorous opposition from community property states. Also, a more persuasive position is that Congress should extend the full basis adjustment to all spousal jointly held property. Those who should consider forming a community property trust include couples who have a stable marriage and are attracted to the equality of the shared ownership characteristics of community property, as well as couples who have a significant amount of appreciated property and desire the income tax advantages discussed above. How to form a trust Many couples have already accomplished significant estate planning. They may each have existing revocable trusts or sophisticated wills. In this situation, a community property trust can be added to this existing estate planning. Appreciated property that is presently held in their other revocable trusts or by the spouses individually would be transferred into a new community property trust. At the death of the first spouse, when the allowable basis adjustment occurs, then the community property would be divided. One-half would be distributed to the deceased spouse’s revocable trust or estate, and the other one-half would be distributed to the surviving spouse’s revocable trust or outright to such spouse. If a couple had not yet accomplished estate planning, then a new joint revocable trust could be formed that would hold their community property, the husband’s separate property, and the wife’s separate property. Nonresidents The Alaska Community Property Act allows nonresidents of Alaska to form Alaska community property trusts. However, such trusts require an Alaska qualified trustee. Such a trustee must be an individual domiciled in Alaska or an Alaska trust company or bank. Other co-trustees may be nonresidents and may include the spouses. The Alaska trustee’s powers must include maintaining records for the trust on an exclusive or nonexclusive basis, and preparing and arranging for the preparation of any income tax returns that must be filed by the trust, again on an exclusive or nonexclusive basis. The law offices of David G. Shaftel in Anchorage emphasize estate planning and estate and trust administration.

Anchorage magazine debuts

The publishers of Alaska magazine will soon roll out a new publication called Anchorage magazine.Anchorage magazine will focus on life in Alaska’s largest city. It will be published five times a year and will be distributed as a separate magazine within every other issue of Alaska magazine.Alaska magazine is owned by Morris Communications Corp., which also owns the Journal and various other Alaska media properties.Each issue of Anchorage magazine will feature stories about Anchorage’s people, their homes and lives, as well as regular columns on the arts, gardens, foods, history, current events and the social scene.The editor of the publication is Rachel D’Oro.The premiere issue of Anchorage magazine will be released on newsstands May 1, within the May-June issue of Alaska magazine.

Busiest airport summer ahead

With United Parcel Service beginning flights to China six times a week and Korean Air adding a summer schedule that will add 300 seats a week, Ted Stevens Anchorage International Airport is heading into its busiest summer ever, according to airport marketing officials."We are looking at a real busy season coming up," said Mort Plumb, director of the airport.The airport hosted 1,768 international landings and 1, 039 domestic landings in February, an increase of 5.5 percent from February 2000.According to Airports Council International, Anchorage is now the third busiest cargo airport in the world, behind Hong Kong and Memphis, Tenn., with 179,257 tons of landed cargo in November 2000 -- an increase of 8.3 percent from the previous year.Anchorage International has 19 international all-cargo airlines and six international all-cargo charter airlines that operate at the Alaska International Airport System airport.

Plans to limit Bering Sea crabbing send boat owners flocking to join C.R.A.B.

Plans to limit entry to the nation’s most dangerous fishery are on the fast track. That has Bering Sea crabbers organizing like never before to make sure new management schemes protect the crab resource and their financial future. Simply put, there are too many boats going after too few crab. The king and Tanner crab harvests are frenzied free-for-alls, with fishermen competing against each other to get as much crab as they can, often in life-threatening winter weather.The Bering Sea fleet now numbers around 270 boats, and "many believe the available resource could be taken with 50 or 60 boats," said Phil Smith of the National Marine Fisheries Service.Everyone agrees something must be done quickly, but crafting a new management plan that’s fair to all players has the industry divided.In just a few weeks, more than 70 vessel owners from Alaska, Washington and Oregon have rallied behind a group called C.R.A.B. and more are signing on every day, according to spokesman Gordon Blue of Sitka.That makes C.R.A.B. the largest group ever formed to represent the concerns of independent Bering Sea harvesters and to make sure they are included in policy discussions. Along with Blue, the group’s interim board includes Terry Cosgrove of Seattle and Dick Powell of Kodiak.C.R.A.B. stands for Crab Rationalization and Buyback -- two of the biggest challenges confronting the industry today. The challenges start with a $100 million vessel buy back program, a sort of interim relief valve that is expected to be in place this year. Members of C.R.A.B helped develop the vessel buyback legislation passed by Congress last December.It is estimated, however, that the buyback will remove only about 50 vessels from the Bering Sea crab fleet, hardly enough to mitigate the problem of excess harvesting capacity.That means managers are required to look at ways to further "rationalize" the crab fisheries, and it’s widely believed a limited entry program will follow in a few years. According to the Dec. 15 Congressional Record, "The North Pacific Fishery Management Council shall analyze individual fishing quotas, processor quotas, cooperatives and quotas held by communities. The analysis should include an economic analysis of the impact of all options on communities and processors, as well as the fishing fleets."While most agree that an IFQ program based on fishing history would create a slower and safer harvest, the concept of processor shares is causing a lot of controversy. Members of C.R.A.B. are concerned that guaranteeing quota shares to processors, many of whom also own their own catcher boats, will give them too much control over crab markets. They believe such an arrangement will allow processors to dictate when crabbers can fish and obligate them to deliver their catch only to certain buyers.Processors, on the other hand, argue that they also are entitled to harvest rights in order to protect the major investments they’ve made in plants and equipment over the years and to help their businesses stay profitable.No interest in taxCiting a lack of interest, Sen. Alan Austerman, R-Kodiak, has decided against introducing a bill to impose a 1 percent tax on landings of halibut and sablefish, also called black cod. The money, which would be administered by the Alaska Seafood Marketing Institute, was designed to increase marketing and promotional funds for wild Alaska halibut to head off challenges soon to be posed by halibut grown in fish farms.Limited amounts of farmed halibut from Norway, Scotland and Iceland are already available in Europe, and experimental farms are coming on line in Maine. Fish farmers could be producing commercial volumes of halibut in five years, according to international expert John Forster.Austerman said his bill didn’t draw a large amount of comment, but what he heard was negative at the rate of five to one.Fish fundsThe deadline to apply for the next round of Saltonstall-Kennedy grants is May 7. The competitive grant program is administered by the National Marine Fisheries Service to provide financial assistance for research and development activities that benefit U.S. marine and Great Lakes fisheries.NMFS seeks applications that demonstrate direct benefits to U.S. fishing communities and encourages proposals that involve fishing community participation.S-K funding priorities are for programs that eliminate and prevent overfishing and overcapitalization; attain economic sustainability in fishing communities; and develop environmentally and economically sound marine aquaculture.Successful applications will be those aimed at helping fishing communities resolve issues that affect their ability to fish; make full use of those species that are currently under federal or state fishery management plans and cultured species; and address the socioeconomic impacts of overfishing and overcapitalization.The S-K fund is capitalized through annual transfers by the secretary of agriculture to the secretary of commerce of amounts equal to 30 percent of the gross receipts collected under the customs laws on imports of fish and fish products.In fiscal 2000, 20 S-K grants totaling $1.68 million were awarded. Recipients of note to Alaska include $80,175 to the University of Alaska Fairbanks for a study on evaluation of ozone for ready to eat seafood, and $180,000 to the University of Washington for research on reducing sea bird bycatch in North Pacific longline fisheries. For more information, call Alaska S-K Program Manager Barbara Fosburg at 907-586-7273.Kodiak-based free-lance writer Laine Welch can be reached via e-mail at ([email protected]).

Ashcroft honors Native women's group

U.S. Attorney General John Ashcroft and the Justice Department’s Office for Victims of Crime have awarded the Alaska Native Women Sexual Assault Committee with the 2001 Crime Victim Service Award. The award was presented to Cindy Pennington, vice chairwoman of the Alaska Native Women Sexual Assault Committee, and Denise Morris, chairwoman, president and chief executive of the Alaska Native Justice Center. Pennington and Morris were scheduled to receive the award April 19 in Washington, D.C., during national Crime Victims’ Rights Week. The award honors innovations, commitment and effectiveness by individuals and organizations helping crime victims. The Alaska Native Women Sexual Assault Committee was formed in January 1999 to address the high percentage of Alaska Native women who are victims of sexual violence in Anchorage. The committee aims to reduce sexual violence against Alaska Native women and increase community awareness through research, education and outreach.

Low gold prices hard on new projects

Two of Alaska’s largest new mining projects are not doing so well with today’s gold prices.Coeur Alaska Inc.’s $300 million plan to develop the old Kensington gold mine, on Berner’s Bay north of Juneau, is hurt by markets and a dispute with the U.S. Environmental Protection Agency over tailings disposal.Early last year the company developed a new approach, ironically at EPA’s request, for onshore tailings disposal. Later in the year, EPA rejected the plan.Coeur is waiting to see if there might be a new attitude toward mining in EPA’s Region 10 with the advent of a new administration in Washington, D.C., a source close to the project said.Another big gold project facing challenges is the large Donlin Creek gold discovery near the Kuskokwim River in western Interior Alaska.The identified gold resource is very large, more than 10 million ounces. But the remote location and the particular type of ore processing needed, requiring large power supplies, mean that Donlin Creek will be very costly, according to Placer Dome, the major mining company that holds the leases.NovaGold, a junior mining company, has negotiated a deal to take over exploration at Donlin Creek from Placer Dome. NovaGold will invest $12 million in the project over 10 years, to earn a 70 percent interest.NovaGold has been active in recent years exploring on the Seward Peninsula, where it acquired assets of Alaska Gold Co. and interests in the Rock Creek gold prospect, both near Nome. The company has also been active in Southwest Alaska, where it made an important gold discovery at Shotgun in the Bristol Bay region.Stan Foo, a consultant to Placer Dome, thinks the deal is good for both parties."This allows Placer Dome to concentrate on its producing properties, which is its strategy in the current gold price environment, while also bringing in an aggressive junior company to undertake more exploration," Foo said.The landowner at Donlin Creek is Calista Corp., the Alaska Native regional corporation for the area. Calista worked closely with Placer on development and has initiatives under way on a regional power supply.

Business Profile: Builders Choice Inc.

Name of the company: Builders Choice Inc.Established: 1998Location: 360 E. 100th Ave., AnchorageTelephone: 907-522-3214Major focus of services: Builders Choice Inc. manufactures building components including trusses, wall panels, stairs and premanufactured buildings.History of the company: Home builder Dave Hultquist and Mark Larson started Builders Choice Inc. to use technology to increase accuracy and speed on-site construction in building. The company, originally located near Lake Otis Parkway, started with truss manufacturing before expanding its services.For trusses, designs are finalized on a computer, relayed via a network to a computerized saw that cuts boards to fit the specific truss. Computerized systems also speed the truss and panel assembly process. More than two years ago Builders Choice expanded its customer base, although Hultquist Homes represents 25 percent of total business. Three years ago the company moved to its current South Anchorage facility.Builders Choice builds trusses in its 17,000-square-foot plant. The company recycles waste wood, burning it in an efficient heating unit to heat the indoor manufacturing plants. The ability to build in winter is an advantage for the company.In 2000 Builders Choice built its 10,000-square-foot panel plant. As another service, Builders Choice now provides framing crews to install its products. The crews are an important service in an era when builders often struggle to find workers.The company, which started with four employees, now employs up to 60 people.Top accomplishment of the company: Larson is most proud of the services Builders Choice offers. "As I see the technology and as I see our capabilities, I believe we’re able to meet the needs that are there. A lot of what we do is driven by our business customers, the builders."Major player: Mark Larson, owner, Builders Choice Inc.Larson moved his family from Minnesota to Alaska in 1993 after meeting Dave Hultquist. Larson first worked for Hultquist Homes before starting Builders Choice.-- Nancy Pounds

GCI extends its Internet access program to schools in Arizona, New Mexico

General Communication Inc. has signed a multi-year contract to provide Internet access to rural schools in Arizona and New Mexico. The agreement would allow the schools to use online educational resources via GCI’s high-speed satellite network to deliver high bandwidth Internet service, GCI officials said.Infrastructure for the service will be installed this summer, and all of the Arizona and New Mexico schools could receive Internet service by July.The company already provides the SchoolAccess program in rural Alaska. According to GCI, more than 70,000 rural Alaska students are connected to the Internet with SchoolAccess. GCI provides e-mail service, a customer user interface, a help desk, on-site training and Web site hosting for more than 155 rural schools plus another 85 schools in urban areas, GCI officials said.In Arizona and New Mexico GCI plans to serve more than 10,500 students who attend 22 rural schools.Alaska Fiber Star expands worldwide networkOfficials from Hillsboro, Ore.-based WCI, parent company of Alaska Fiber Star, announced WCI has a contract with TyCom Global Network. TyCom will land segments of its planned undersea fiber-optic cable at WCI’s carrier-neutral landing station at Nedonna Beach, Ore. Using WCI services, TyCom will connect to its cable station in Hillsboro.TyCom’s Phase 1 of the cable project aims to connect North America, Europe and Asia including Seoul in South Korea, Manila in the Philippines, Tokyo, Hong Kong and Singapore. The TyCom Transpacific ring could be completed by second quarter 2002.WCI operations include World Net Communications, WCI Cable Inc., WCI LightPoint LLC and Alaska Fiber Star LLC. The Alaska Fiber Star network provides fiber-optic cable along the Railbelt between Anchorage and Fairbanks with service also including Whittier and Valdez. The company also operates an undersea fiber-optic cable running from Whittier to Juneau to Seattle and Portland, Ore.

Flurry of work in Interior

FAIRBANKS -- This Interior city will be a jumping off point this year for geologists in search of platinum and palladium, making the area the second busiest in the state behind Southeast Alaska, mining experts predict. Mineral companies will spend $3 million to $4 million in the state this year, up from the $1 million spent in 2000. The reason? Increased demand for jewelry and clean air emissions is driving up the price per ounce as stockpiles of the steely gray metals dwindle. "There is huge demand for this stuff," said Curt Freeman, president of Avalon Development Corp., which has several platinum and palladium clients. Platinum and palladium have been mined in Alaska before, so it makes sense that companies have come back for a second look, Freeman said. Palladium, used for catalytic converters, has jumped from $127 an ounce in 1996 to $687 an ounce this week. Platinum has been selling at about $558 an ounce. Over the last 10 years, demand for platinum for jewelry, as well as for catalytic converters, has increased 70 percent worldwide, Freeman said. Freeman estimates that for the first three months of this year companies have spent about $500,000. Many of those companies have come or intend to come through Fairbanks on their way to the surrounding fields, he said. In addition, field samples are sent to Fairbanks to be processed for testing, he said. Platinum and palladium are usually found together and have four byproducts, including iridium, said Rainer Newberry, geology professor at the University of Alaska Fairbanks. Together they are known as platinum group elements, or PGE. The metals are excellent conductors of electricity, with platinum being the best of the grouping, he said. Freeman said exploration is occurring in four locations. Southeast Alaska exploration activity includes prospectors sizing up the Salt Chuck, a closed palladium mine on Prince of Wales Island. Also in Southeast, work is continuing on a Union Bay platinum prospect. In Southwest Alaska geologists are searching around the former Goodnews Bay mine, which at one time produced 650,000 ounces of platinum, Freeman said. Prospectors have also been looking around Seward, he said.

Airport gets first wetlands permit from Corps

A two-year wait for a wetlands permit from the U.S. Army Corps of Engineers by officials at Ted Stevens Anchorage International Airport will soon come to an end as the first of three parts of the permitting process have been approved."This is the first of three instruments that the Corps will produce that enables the airport to proceed with land development," said airport director Mort Plumb."We learned a lot during this two-year process," Plumb said. "We saw the business community provide input so that we had a balanced approach to the public process portion of this permit."A campaign by the Anchorage Chamber of Commerce and the Anchorage Economic Development Corp. that encouraged numerous business leaders to testify before the Anchorage Assembly is thought to have carried the weight of the decision, according to local transportation industry officials.After taking testimony in three separate meetings, on Feb. 6 the Assembly approved a land swap of Klatt Bog property needed as mitigation that was a condition of the Corps permit.The initial permit, issued on April 6, authorizes the development of 245 acres of airport-owned wetlands. The airport can fill bogs near the FedEx facility with soil and allow development of additional taxiways, parking areas and single tenant facilities for commercial use. Additional bogs will be filled for general aviation parking near the Lake Hood air strip, according to AIA officials.The loss of the wetlands is balanced by conditions of the permit, which include measures to minimize harm to remaining wetlands on airport property and compensatory mitigation to offset the loss of wetland functions and values.An interagency group including the Corps, the Environmental Protection Agency, the U.S. Fish and Wildlife Service and the Municipality of Anchorage formulated the mitigation agreement, according to a Corps press release."Over the last three years the airport has documented the need for using these lands," Plumb said. "There has been demand for this land for tenant development in the past; we are hopeful that this interest continues.""The international air cargo business is one of Alaska’s growth industries," said Gov. Tony Knowles. "This permit allows aviation businesses at the airport to continue to expand their activity and create more jobs for Alaskans."

State sees lower oil prices next year

Lower oil prices are expected to reduce state revenues next year, requiring a draw of $622.2 million on the state Constitutional Budget Reserve for the fiscal year 2002, the budget year beginning July 1, Revenue Commissioner Wilson Condon said April 11.In the Department of Revenue’s spring oil revenue forecast, Condon said state oil revenue forecasters now think prices for North Slope crude oil will average $21 per barrel from 2002 to 2004, down from about $28 per barrel currently.State unrestricted revenues are now expected to be $2.288 billion in the current fiscal year and decline to $1.777 billion next year, mainly because revenues from oil royalties and taxes will be lower.High oil prices over the last year eliminated the need to tap the budget reserve, which is the state’s main savings account. In fact, the current year is expected to have a $1.5 million surplus when it ends June 30, Condon said.The department’s spring forecast projects Alaska North Slope oil prices to average $27.61 per barrel for the current fiscal year. "It’s been a bouncing year for oil prices. We’ve seen ANS prices range from over $34 to just above $20 per barrel," Condon said. "This has not been a year for market stability."On the brighter side, oil production is expected to increase next year with new fields beginning production on the North Slope. Production dipped below 1 million barrels per day through much of the current fiscal year, but should average just over a million barrels a day through next year, Condon said.Falling stock prices will hurt investment performance of the Alaska Permanent Fund this year, resulting in a slightly smaller dividend. The fund’s unrealized capital gains, the stocks it holds that gained value in what had been a bull market, have been hit. They are now down about $2 billion in value, Condon said.The dividend will be less affected because it is based on a five-year average of permanent fund earnings, however.Lower oil prices also mean a larger budget deficit for the following year, Condon warned. Assuming state general fund spending remains at about $2.4 billion over the next two years, the deficit will climb to $895.1 million in fiscal 2003.If those kind of deficits continue, the drawdown on the Constitutional Budget Reserve would deplete it by July 2005, Condon said. That’s six months earlier than the department predicted in its last revenue forecast in December.

Kinetic still seeks home

Pilots and potential aircraft buyers asking whatever happened to the Mountain Goat manufacturing effort in Alaska may be surprised to learn the airplane’s designer and builder is taking orders and deposits for the high performance aircraft."If you want to get an airplane early on, you’d better get off the stick and order one," said Bill Montagne, president of Kinetic Aviation Inc.A deposit of $5,000 will secure a delivery position, according to Montagne. He said deposits will be used for certification and production start-up and associated costs. Deposits will also ensure an additional discount on the purchase price of one plane, he said..Montagne claims more than 1,000 people have signed up to make deposits on the aircraft..The Anchorage Economic Development Corp. has continued to work to find financing and land for Kinetic Aviation’s manufacturing efforts in the municipality, according to AEDC officials."We still have an interest in finding a location for Kinetic," said Larry Crawford, executive director of AEDC. "Once he has the financing, we can find the airplane company a home." Crawford indicated land near Birchwood Airport could be developed.Montagne has an elaborate financing plan to proceed with the certification and manufacturing of the single-engine aircraft, which boast landing speeds of 25 mph and cruise speeds in excess of 155 mph with tundra tires.Montagne is considering Alaska, Washington and South Dakota as manufacturing sites. Although the aircraft has not been certifieddand the company is still seeking a home, Montagne would prefer to locate in Alaska."All three states would make excellent choices for several reasons," he said. "The determining factors will be what happens with our deposit program, loans and investment, as well as local incentives."When asked why, after all former attempts at locating in the state have failed, he would continue to want to manufacture in Alaska, his response remains the same: "Because Alaska takes my breath away!"Montagne also believes that as a high performance aircraft designed for use in rural areas, the Mountain Goat will be popular with pilots in the Alaska Bush.The Mountain Goat recently won second place in the 20th annual Excellence in Design Competition from Design News magazine. The competition is an annual worldwide contest for the best new technology of the year.

Glitter of prom adds millions in gold to area's cash registers

At a long-time Anchorage tuxedo rental shop recently, employees were taking requests for men’s formal attire faxed from Valdez. Once the measurements are matched to coat, shoe and pant size, the package -- including cuff links and studs -- is sent from Dooley’s Tuxedo & Costumes via Alaska Airlines Goldstreak in time for prom. "We ship all over Alaska," said Starla Heim, one of the company’s owners. "We’ve had our tuxedos on dog sleds." Even though Dooley’s says it owns one of the largest inventories of tuxedos on the West Coast, 12 proms scheduled for April 28 may stretch the company’s capability. By mid-April, 200 tuxedos had been rented for that date, and Heim estimates total tuxedo rentals for prom season will hit 600 to 800. Research shows prom participants nationwide spend an average of $300 to $500 each, from manicures to limo rentals. Facility operators say events average 500 to 800 attendees and each of the Anchorage area’s six major high school holds an event. Prom business also comes from private schools, Palmer, Wasilla and the Kenai Peninsula. That means the total economic impact of prom season in Anchorage ranges from $900,000 to $2.4 million for area businesses. Jim Anderson, owner of Anderson’s Bride, believes total prom season spending could hit $2.5 million if expenses for creative ideas are included. One student, he said, is planning to rent a helicopter to fly to the Double Musky restaurant in Girdwood. Dresses and tuxedos At Dooley’s Heim said prom business lasts from mid-April to mid-May. Tuxedo rentals account for 80 percent of Dooley’s overall business, and prom rentals represent a third of that, Heim said. Anderson’s Bride rents tuxedos and sells dresses, but prom probably counts for 5 percent of total business, Anderson noted. Nearly 450 customers work with the shop from mid-March to May, he said. Last year the shop shipped 10 tuxedos to Nome. "I really think the Bush does quite a bit of traffic with Fairbanks," Anderson said. At Anderson’s Bride, the high-school dance attendees each spend $88 to $140 renting tuxedos or from $140 to $360 for a dress, shoes and jewelry. Camille’s Boutique Inc. stocks 350 dresses for the event, and girls start ordering in January. By peak season about 40 teen-agers visit the store daily, said manager Camille Williams. The store has sent dresses to Nome, Barrow and Kaltag, she said. Williams, who has sent dresses to the Miss Alaska pageant, estimates that more than 20 percent of her business comes from prom season. Customers spend between $145 to $400 on prom dresses at Camille’s, she said. Flowers Florists this year face a double challenge: At least two Anchorage proms are set for May 12, one day before Mother’s Day. "I have to figure out how to get (corsages and boutonnieres) done on top of handling Mother’s Day, our largest holiday," said Carrs Huffman store floral manager Dawn Kauffman. She estimates 420 hours are required to make corsages, which range in price from $20 to $30. Boutonnieres cost $8.99. Kauffman believes prom business is more significant in Anchorage than Outside, where spending is spread among more stores. Teen-agers also are buying presentation bouquets of roses or sunflowers selling for $40 to $60, said Chanda Mines, owner of Bagoys Florist & Home. Mines expects high volume and overtime hours to tackle the two big events this spring. At Bagoy’s wrist corsages cost $22.50 to $25, and boutonnieres cost $8 to $10. Beauty Another element of prom spending is glamour. "It’s great business," said Kari Hall, an owner of Allure Day Spa & Hair Design. Allure serves prom clients for school events from January to May, and about 300 customers each prom season ask for hair styling, she said. On the day of a prom, up to nine hairdressers work with clients, and 75 percent of the day’s business comes from the event, she said. Hair styling ranges from $20 to $60, she said. Prom students can also opt for makeup, tanning or manicures, all for about $35 each. Spa treatments range from $125 to $500. Some girls get the royal treatment. "We have moms who go all out for their daughters," Hall said. Dining Prom often means a night on the town including dinner. "We get quite a bit of prom business this time of year," said Simon & Seafort’s general manager Danny Dirscherl. Three to four proms can be scheduled on one night, filling three-quarters of the restaurant with up to 150 people, he said. Prom diners spend about $25 each on average, he said, and parents often foot the bill. One prom night stands out in his memory. Three years ago more than 100 prom participants filled the restaurant when a group with a late dinner reservation was seated: Aerosmith. Autograph seekers crowded the table. "I have never seen stars as accommodating as they were," Dirscherl recalled. Lone Star Steakhouse & Saloon is usually busy on any weekend night, but prom certainly helps business, general manager Craig Cannon said. "We totally enjoy seeing the young people come in. In my opinion this is future long-term business," he said. At Glacier BrewHouse prom and homecoming weekends bring teen-age customers who don’t usually visit the restaurant, said general manager Robert McCormick. He welcomes the extra business. Prom goers spend anywhere from $10 on a pepperoni pizza to $33.95 on king crab legs, he said. However, they spend less than typical diners since they do not order alcoholic beverages, he said. Limousines On prom nights most Anchorage limos are rented, operators said. Prestige Limousine Service, which operates five vehicles, tallies about 15 percent of overall business from proms, said manager Janise Cohen. Other clients include summer visitors and Alaska Federation of Natives conference delegates, she said. The company receives about 100 phone calls from each school per prom, she said. Prestige limos rent from $75 to $125 an hour with a six to eight hour minimum. My Chauffeur Limousine Service also sells out on prom nights, although other business, such as weddings and birthdays, contribute to year-round operations, said manager Randy Hahn. Its five limos can carry from six to 10 people and costs start at $300 for a four-hour minimum plus tip. Facilities Anchorage facilities host several area dances. Total prom attendees range between 500 to 600, said Greg Spears, Egan Civic & Convention Center general manager. This year the Egan Center will host the Palmer High School prom. However, growing spring convention business has sometimes limited the space available for proms, he said. The Anchorage Museum of History and Art will host three spring proms plus others in the school year, said Arby Williams, Anchorage Museum Association administrator. Usually about 800 people attend each event, and prom rates, billed at the city’s nonprofit rate, are $480 for four hours plus $120 for each additional hour, she said.  

Merrill Field hangar offers pilots 'really first class' services

A new hangar, fuel and pilot convenience center at Merrill Field has all the comforts of home."It’s not uncommon to look into a hangar and see all the Alaska toys," said Richard "Dick" Armstrong, developer and president of the ACE Hangars Owners Association, "and some pretty expensive airplanes too."Armstrong is describing his $3 million fixed base operation at Merrill Field called ACE Hangars. ACE offers fuel, hangars, hotel rooms, a pilot lounge and retail space -- all right in the center of the airport."This is great for airplane owners or visiting pilots who are bringing their aircraft into Anchorage for maintenance, or if they are from Outside and have flown up the Alaska Highway it’s a great place to base from," Armstrong said."We have added pilot information on each telephone speed dial so the pilot will get Merrill Field Automated Weather Observation Systems, or Automated Terminal Information Service transmissions over the phone," Armstrong said."Each phone speaker becomes a scanner monitoring Merrill Tower, ground and approach frequencies after pressing the number one. The rooms and lounge also have computers with Internet access and cable television," he said. "This is the signature flight service of general aviation." Perhaps the most unusual aspect of the hangar is the four hotel rooms, located over the pilot lounge and meeting areas on the south side of the hangar.Decorated in an aviation theme, the rooms come complete with airline seats from the Russian Ilyushin IL-62 that was clipped by a Boeing 747-400 several years ago at Ted Stevens Anchorage International Airport and scrapped.Rooms have both winter and summer rates and are typically less than local hotel rooms and offer on airport convenience.ACE hosts 17 hangars; 15 have been purchased since the facility’s opening last December. Fuel customers, hotel customers and ACE Pilot Club members have access to a pilot lounge with fax, computer, telephone and vending machines. Public space is monitored by camera surveillance, with a security access code required to enter the pilot lounge and hangar access areas."I am very excited and pleased with my hangar. This is really first class," said dentist Jerome List. "I had put money down on a another hangar, heard about these, found out there was one available and purchased this hangar."List, who moved into his T-hangar in November, compliments the lighting and quality construction but most of all likes the hangar as a home for his new Aviat Husky on amphibian floats.The hangars range from 40- foot-wide T-hangars, to a 56-foot rectangular hangar; rents begin at $65 a day. Hourly and weekly rates are also available, along with tie-downs that come with and without electricity.Polished floors, high spectrum lighting and a fire sprinkler system that exceeds local standards are normal fare in each hangar."We were really happy to see Dick get involved with the development of that facility. He really put together an executive hangar facility with all the amenities," said Dave Lundeby, airport manager at Merrill Field."This really makes us happy to see the airport take on a new, redeveloped look," he said. "We looked at Merrill field several years ago and recognized that some changes needed to be made."In addition to the hangars and lounge, ACE also has a 24- hour credit card fueling system, which offers a 15 cent discount on aviation and jet fuel to members of the ACE Pilots Club or the Alaska Airmen’s Association. It also includes 24-hour access to the pilot lounge.Armstrong is also a partner in Alaska Husky LLC, which has the Aviat Husky dealership in the complex. There is also retail space for lease or sale at the complex."We even have a vending machine for aviation engine oil, perhaps the first in Alaska," Armstrong said.Merrill Field operates as a utility under the Municipality of Anchorage and, according to airport officials, has had the support of the Anchorage Assembly and mayor to make improvements and to work with lease holders to invest in their hangars and buildings."Dick really cleaned up that corner, since the old buildings there were over 35 years old," Lundeby said."We looked at the old buildings and said, ’let’s just take a wrecking ball to this and create a first class facility,’ " Armstrong said.

Red Dog air flap an ongoing struggle

The latest flap over air quality emissions at the Red Dog Mine in Northwest Alaska is part of a series of problems Cominco Alaska Inc. is having with government regulatory agencies over air permits for new power generation facilities at the mine.More power is needed to expand production of zinc at the mine. The latest development is that the Department of Environmental Conservation cited Cominco for exceeding air emission limits during start-up testing on generators that had been retrofitted with new pollution control equipment.Cominco said it thought it had authority to temporarily exceed limits while the new systems were tested. DEC said it did not have the authority and that Cominco had also failed to file other information that was needed.Charlotte MacCay, environmental manager for Cominco, said a new DEC air permit for the generating plant is very complex and that the company believes some of the required information was submitted, but in a different format."A lot of equipment has also been taken off the site" during the technology changeover, MacCay said. "We’re researching now to see if some of the equipment DEC was expecting to be in the report wasn’t included because it was no longer there."DEC and Cominco are allied on a broader air quality issue at Red Dog, however. The state is in court against the U.S. Environmental Protection Agency over an EPA order that Cominco retrofit a 5 megawatt generator built last year with a new selective catalytic reduction technology to reduce nitrous oxide, or NOX, a pollutant.DEC and Cominco argue the new technology is untested in the arctic, too costly and unnecessary because the same reductions in pollution can be achieved at lower cost with conventional pollution-control systems.The state had earlier allowed Cominco to fit the generator with proven low-NOX pollution-control equipment. As a part of that the company agreed to retrofit its existing generators with low-NOX systems. DEC’s recent citing of Cominco was over that retrofit project.The state feels EPA’s order for Cominco to use selective catalytic reduction technology, reversing the state’s earlier approval of a permit for low-NOX systems, infringes on the state’s authority to administer its own air permit program under the federal Clean Air Act.Tom Chapple, director of DEC’s air and water quality division, said earlier that once EPA delegates an air quality program to a state it must allow the state the flexibility to meet goals in the federal law in ways more suitable to local conditions.It’s a state’s rights case, Chapple said. The EPA can choose to revoke Alaska’s authority to run the overall statewide program, but the agency can’t come in and selectively overturn state decisions on individual permits as long as the overall federal law is being complied with, he said.The state filed suit against EPA in the U.S. District Court of Appeals, which has been given jurisdiction over disputes between the federal and state governments involving the Clean Air Act.Hearings on the case were held in San Francisco recently, and a decision is expected in a couple of months, Cominco’s MacCay said.

Knik bridge, pipeline bills move

Bills establishing a new Alaska Toll Bridge and Causeway Authority and appropriating $1 million to match federal funds for design and environmental studies for a Knik Arm crossing were reported out of the Senate Transportation Committee April 10. Sen. Jerry Ward, R-Anchorage, sponsor of both bills, said about $20 million in federal funds could be available for engineering of the Knik Arm project, estimated to cost about $350 million. Ward said he and other legislators have discussed the project with Rep. Don Young, who is now chairman of the Transportation Committee in the U.S. House. Young, R-Alaska, is interested in securing federal funds for the project, Ward said. It could be treated as a demonstration project, so that it would be in addition to federal transportation money the state gets every year. The Senate Finance Committee approved a modified version of SB123, requiring legislative approval for major capital projects undertaken by the state-owned Alaska Railroad. The new version of the bill, sponsored by Sen. Drue Pearce, R-Anchorage, would require the railroad to submit a list of its major projects to the Legislature every January. Lawmakers would have 60 days to review the list and can act to disapprove projects. If no action is taken, the project list is approved. The procedure is similar to that used with the Local Boundary Commission on municipal annexations and other boundary changes. Also, railroad facility projects of $5 million or less, or track realignments of $10 million or less, would be exempt from legislative review. Legislation relating to a natural gas pipeline is moving quickly in the state capitol. Senate Bill 164, prohibiting a right of way corridor on state submerged lands in the Beaufort Sea, passed the Senate and was reported out of the House Oil and Gas Committee on April 10. The bill is now in the House Resources Committee. The prohibition applies only to projects moving natural gas. It would not affect a pipeline carrying crude oil, such as is proposed to reach Liberty, an offshore prospect BP is hoping to develop. Another Senate-passed bill moved by the House Oil and Gas Committee is SB143, which allows the state Pipeline Coordinators’ Office to be reimbursed for expenses related to a pipeline project before an application is actually filed. A Senate bill that would reinstitute a former state "school" tax of $100 yearly on employed wage and salary workers was moved from the Senate Labor and Commerce Committee and is now in the Senate Finance Committee. SB165, sponsored by Sen. Alan Austerman, R-Kodiak, would impose a $100 annual tax on employed individuals older than 19, including persons who are self-employed.  

Leadership is about creating jobs with meaning and purpose

Do you want a job or do you want to have a job that has purpose? One truth supersedes all backgrounds, cultures and generations: People want to be part of an organization that means something. When an organization means something, people are willing to give more. Let’s face it, most employees have a "here today, gone tomorrow" attitude toward their work. They know their jobs may vanish when the company hits hard times or changes direction. With this kind of skeptical attitude, their loyalty to their employer may only be skin deep.But when meaning is present, loyalty is deeper. That’s why people work for nonprofit organizations, or dedicate themselves to building houses for Habitat for Humanity. And it’s the reason an employer that can create meaning and purpose and align its employees with its mission will have a more dedicated, productive and profitable crew.Embree Robinson is the founder and president of TRC Staffing, a $200 million temporary staffing agency with 75 offices in the southeastern United States and on the West Coast.The worker shortage hits this company square in the face, especially when you consider at any time it may have 500 workers less than it needs to fill openings for its clients.Embree’s personal experience shows there is no one way to attract, keep and motivate his hard-won work force. According to Embree, a lot of things have changed in today’s work force, but two things remain constant: "The company must stand for something, and the leadership is what makes it work."Embree takes this challenge personally. He stays in touch with his people as much as possible without being a micromanager. He practices a people-centered approach to management and visits about 25 branch offices a quarter.During each visit he sits down with the branch managers and listens while they discuss their goals and review their overall performance and tells everyone where they are heading. During the holiday season, Embree adds levity by giving out turkeys and Christmas presents while dressed as Santa Claus.Embree says that people want two things out of their professional relationship: challenge and security. Challenge means the opportunity to grow professionally as well as financially. Branch managers have the option to "buy into the company" and become shareholders.The corporate office also rewards each branch office with a hefty 20 percent of the profits. Ten percent goes to the office managers, and the other 10 percent is split among branch employees.To feel secure, people need to know company rules and expectations. They also want their boss to keep them informed about where the company is heading.Workers today want to know the strategic direction of the company, Embree says. They have ideas and expect upper management to listen to them or they will walk to the next employer who will listen and provide them the information they need and expect.Prescription for action* Ensure employees understand the mission, values and purpose of the organization;* Allow employees to easily switch jobs within the organization;* Conduct a comprehensive orientation program for all employees;* Take the time to understand the needs, expectations and motivations of your employees;* Take more time selecting employees;* When hiring people don’t misrepresent the job opportunities available at your organization;* Allow employees opportunities to participate in volunteer activities outside work;* Involve all departments in strategic planning;* Ensure senior leaders verbalize and demonstrate organizational goals and direction;* Develop goals in alignment with the strategic plan; and* Identify trends and issues that will impact on the organization.Gregory P. Smith leads the management consulting firm called Chart Your Course in Conyers, Ga. He can be reached via e-mail at ([email protected]).

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