Providence chief of staff sees future, hurdles in telemedicine

Alaskans’ work developing telemedicine technology and practices is creating opportunities across borders, but telemedicine faces some hurdles, according to an Alaska expert. Dr. Jerome List, chief of staff for Providence Alaska Medical Center, is involved with telemedicine efforts in Alaska. Providence has worked with health care providers on Sakhalin Island via telemedicine or using telecommunications and the Internet to relay a medical condition or advice."We’ve shown we have the technology. I think the opportunities are endless," he said."Alaska is particularly positioned to work with Far East Russia," List told members of the World Trade Center Alaska on Feb. 7. He spoke during the group’s monthly luncheon at National Bank of Alaska headquarters at C Street and Northern Lights Boulevard.List, who speaks Spanish and Russian fluently, studied at the University of Costa Rica, where he has also practiced medicine, and at the First Medical Institute of Leningrad. Today he also handles otolaryngology/head and neck surgery in private practice at Alaska Ear Nose and Throat Inc. in Anchorage.Maintaining a healthy work force is important to production around the globe, he said. However, healthy workers are less important than a manufactured product, he noted. In 1974 List served as a resident in St. Petersburg working with Russian doctors."They have some talented, bright people," but lack the resources needed for some health care services, he said. Unlike manufacturing in Russia in the 1970s, health care was not given the emphasis it deserved, List said.Telemedicine can operate beyond borders to help solve this problem. Yet some barriers still hinder the service, he noted.One such issue concerns the application of professional health care services from people who are licensed in other states or countries, List said. So far state officials have not ruled on this issue, he said.Expected improvements and competition in telecommunications technology should help telemedicine efforts, List said.Another major barrier for telemedicine is defining payment for physicians, List said. So far models have not been developed, and many doctors have provided their expertise out of enthusiasm for telemedicine, he said."I do a fair number of consultations and triages from the U.S. and abroad, and I haven’t charged a cent," List said.However, it is difficult to persuade some doctors to do telemedicine work without a reimbursement plan in place, he said.Telemedicine procedures also could be affected by the federal Health Information Portability Act, designed to regulate and protect medical records transmitted electronically, he said. The legislation could be implemented in 2002, List said.

Endangered species concerns likely to delay Unalaska project

In addition to jeopardizing Alaska’s big pollock and cod fisheries, lawsuits by environmental groups under the federal Endangered Species Act are also creating problems with public works projects in coastal communities. Former Unalaska Mayor Frank Kelty, now a natural resources analyst on the city’s staff, told state legislators in Juneau on Jan. 30 that his city may have to do a formal environmental impact statement on a much-needed small boat harbor project because of lawsuits by environmental groups over Steller ducks, a threatened species. Doing an EIS rather than a more streamlined environmental assessment will delay the project and add costs. The harbor, badly needed in Unalaska, will provide space for 70 medium- to small-size vessels, Kelty said. Two hundred of the ducks overwinter near Unalaska’s harbor, which is an intensely used marine industrial facility, he said. Unalaska has been the nation’s top fisheries port for more than a decade, Kelty told a luncheon gathering of lawmakers, according to data compiled by the National Marine Fisheries Service. Another city project that could face problems is a planned 500-foot extension to the existing 1,200-foot city dock in Unalaska. The extension is needed to accommodate Coast Guard, National Oceanic Atmospheric Administration and state ferry vessels. Building the extension will require that the city fill in two acres of wetlands. As mitigation, the city may have to adopt an alternative construction design that will cost three times that of the design now planned and which would lose the access to upland shoreline acreage that would be valuable rental space for the municipality, Kelty said. One positive development is that the U.S. Fish and Wildlife Service, the agency with jurisdiction over spectacled and Steller eider ducks, has backed away from an earlier proposal to designate 25,000 square miles of lands in Western Alaska critical habitat for the ducks, Kelty said. On Jan. 12, the agency announced it would reduce the proposed critical habitat by 93 percent, instead designating 2,800 square miles as protected habitat.  

This Week in Alaska business History February 18, 2001

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 TimesFeb. 18, 1981Share-the-wealth plan airedBy Dave CarpenterTimes Juneau BureauJUNEAU -- The Hammond administration and former House Speaker Terry Gardiner have begun to push the Legislature to adopt a new share-the-wealth plan that would make every Alaskan a part-owner of the vast Prudhoe Bay oil and gas stores and other state riches.Gardiner, D-Ketchikan, and a top Hammond aide told House lawmakers Tuesday night that their Portfolio of Alaska Citizen Enterprises program -- called PACE -- would transfer Alaska’s wealth to its rightful owner -- residents.And that, they said, will make Alaskans less dependent on government to properly handle the state’s oil billions.Anchorage TimesFeb. 21, 1981Gas line work still set for 1982By Dave CarpenterTimes Juneau BureauJUNEAU -- In-state construction on the Alaska Highway natural gas pipeline still is scheduled to begin in the summer of 1982 with completion targeted for the winter of 1985-1986, a federal pipeline official said Friday.Mo Mathews, deputy federal inspector for the Alaska Natural Gas Transportation System, told the Senate Resources Committee that the key to the fate of the pipeline is "on Wall Street, where the financing plan is." He said he didn’t know how the plan was faring."You know as well as I do the difficulties of financing a multibillion dollar project in a year of 12-20 percent inflation," he told the panel.Construction of the Alaska segment of the line, being handled by the Northwest Alaska Pipeline Co., has been estimated at $7.9 billion.10 years ago this weekAlaska Journal of CommerceFeb. 18, 1991UPS agreement comes at right time for airportBy Ray TysonFor the Journal of CommerceWith international passenger flights in Anchorage down by 20 percent, a new interim agreement allowing United Parcel Service and two Japanese carriers to begin all-cargo operations between the United States and Japan couldn’t have come at a better time.The agreement, effective Feb. 13 to March 2, is boosting weekly refueling stops at Anchorage International Airport by 20 a week and potentially 28 if disagreements between the two countries can be resolved."This is the biggest new injection of business we’ve had in a long time. It’s absolutely needed right now," said Anders Westman, marketing director for the Alaska International Airport System.Under a landmark trade agreement, UPS in October was selected for an all-cargo route into Tokyo’s Narita Airport, while Japan Air Lines and Nippon Air Cargo were given landing rights in Chicago.Alaska Journal of CommerceFeb. 18, 19911991 looks good -- probablyAlaska Journal of CommerceWith millions of dollars in projects planned or under way, employment prospects for Western Alaska appear to be shaping up fairly nicely for 1991. The deciding factors, though, will be the fishing season and summer tourism."Last year was good and there is no reason to believe this year will be any different," said Neal Fried, labor economist with the Alaska Department of Labor. "But we never know what the price of fish will be like, or what the volume will be."One of the largest ongoing projects for Western Alaska is the Red Dog Mine, a partnership of Cominco Alaska Inc. and NANA Regional Corp., which employs more than 300 people, 60 percent of them NANA shareholders, according to Willie Hensley, president of NANA Development Corp.-- Compiled by Ed Bennett.

FAA grant funds study of Anchorage's general aviation needs

A $450,000 grant by the Federal Aviation Administration to the state Department of Transportation and Public Facilities to study the patterns and use of general aviation facilities in the greater Anchorage area is under way. "This study will include all general aviation, including (ultralights)," said Patty Sullivan, an FAA airport planner.The study, called the Area General Aviation System Plan, is to identify future needs for general aviation facilities and services in the Anchorage area and is to be finished in 18-24 months, according to FAA and state DOT officials.The two agencies and consultants are seeking input from pilots and aircraft owners, as well as managers and owners of businesses at airports in the Anchorage area.Alternatives will be developed and evaluated to handle future general aviation needs. They will then be put into an implementation plan that will determine how to fulfill the needs, according to Diana Rigg, a transportation planner for the state DOT.The system plan was initiated in early 1998 with a survey of 2,000 area general aviation pilots by DOT.Last November a technical advisory committee was assembled, composed of representatives from DOT, FAA, Ted Stevens Anchorage International Airport, Merrill Field, Birchwood Airport, the Municipality of Anchorage, the military, aircraft owners, pilots, airport users and other interested parties, as well as other government agencies.Sullivan, Rigg and Carl Seibe, a state transportation department airports engineer, made presentations at an introductory meeting Jan. 31. Increased aviation activity at all area airports is driving the study, according to Rigg.Airspace use, runway conditions and construction, additional float ponds for seaplanes, increased use at airports like Birchwood and Campbell Creek Airstrip, and additional float tie downs at Lake Hood were discussed.At the meeting, John Sanders, a consultant with Aires Consultants Ltd., a California-based firm specializing in airport and aviation planning studies, laid out the plan for the study."What we hope to do is take your input, along with an inventory of the local facilities and their environmental condition and come up with plan to make improvements to the current infrastructure," Sanders said. Public input by all users is necessary for the study to work, added Sullivan."There is a six-month to a year waiting list for a slip at Lake Hood. If we had two more floatplane facilities in Anchorage, that would not be enough," said Bob Miller, a Cessna 185 floatplane pilot. "They are going to hear more from me."To voice your ideas and needs, contact Diana Rigg, Anchorage area planner, P.O. Box 196900, Anchorage, AK 99519-6900. Her phone is 907-269-0515, fax is 907-269-0521 and e-mail is ([email protected]).

Oregon dealership buys Johnson Chrysler/Jeep for $2.8 million

Lithia Motors Inc. of Medford, Ore., in late January completed the acquisition of its first Alaska dealership, Johnson Chrysler/Jeep dealership in Anchorage. Lithia officials said the company’s net investment in the dealership, which totaled $2.8 million, was paid in cash. The new operators told investors in the public company they expect revenue from the Anchorage dealership could add $35 million annually to Lithia operations. Lithia operates 113 franchises -- or vehicle brands -- in Alaska, California, Colorado, Idaho, Nevada, Oregon, South Dakota and Washington. The company sells 26 brands of new vehicles at 53 stores and via the Internet. Lithia also sells used vehicles, arranges financing to buy vehicles and provides parts and repair services at its locations. In 1999 Lithia sold 52,485 new and used vehicles, and for the first nine months of 2000 the company sold 64,645 new and used vehicles. According to company officials, Lithia’s current annualized revenue run rate, including all completed acquisitions, exceeds $1.7 billion. "Anchorage, Alaska, represents a new target area for Lithia Motors," said Sid DeBoer, chairman and chief executive. "This is the kind of market where the combination of Lithia’s operational focus and community involvement has been successful in the past. In 1999, Lithia was recognized as being the Northwest’s fastest growing public company, and this store will be a good fit with the other stores we have in that region." The company may consider other acquisitions in Alaska, said investor relations manager Dan Retzlaff. The former owner of Johnson Chrysler/Jeep is no longer with the dealership, but Lithia retained the general manager and other employees, Retzlaff said. New Anchorage eatery eyes March opening Operators of Wayne’s Original Texas Bar-B-Que, now under construction in Midtown, expect to open the restaurant in March. Work on the eatery is about 75 percent complete, said Wayne Bond, president of restaurant operator Kodiak Foods. For a handful of months the restaurant has sold take-out orders from a trailer at its construction site. "We’re doing more business (on an annualized basis) than the average restaurant," he said. Wayne’s Original Texas Bar-B-Que will total 6,800 square feet and will be able to seat 250 people, Bond said. Bond once ran the original Anchorage Taco Bell restaurants and led a Fairbanks location to a top franchise ranking. The restaurant will employ about 45 full- and part-time workers, Bond said.  

Pipeline competitors face off

Competing pipeline builders Alaska-based Yukon Pacific Corp. and Foothills Pipe Lines Ltd. of Calgary, Alberta, squared off in Juneau earlier this month. Yukon Pacific has permits and rights of way for a natural gas pipeline from the North Slope to Valdez and for a liquefied natural gas plant near Valdez. Foothills holds rights of way and permits for a gas pipeline from the North Slope through Interior Alaska and Yukon Territory along the Alaska Highway. In several legislative hearings, Jeff Lowenfels, president of Yukon, said that U.S. and Canadian laws enacted in the 1970s, as well as a U.S.-Canada energy treaty from that period, are specific in their requirements for an Alaska Highway pipeline. Costs of building a pipeline to those specifications make it uneconomic, he said. In addition, pipelines from Alberta to the U.S. border are full. "There is no room for Alaska gas," Lowenfels said. That means new pipelines will have to be built, adding to costs. Yukon Pacific has, meanwhile, updated its cost estimates and feels it can land Alaska gas in Japan for $3.50 per million British thermal units, well below the $5 per million Btu now being paid for LNG from the Phillips-Marathon plant near Kenai, and the $5.50 per million Btu being paid for LNG from Indonesia. Lowenfels also said Yukon Pacific’s new cost estimates show it can deliver gas to Southcentral Alaska through a 16-inch spur pipeline from the main pipeline near Glennallen for the same price Enstar Natural Gas Co. pays to buy gas from Cook Inlet producers. Enstar is the regional gas utility for Southcentral Alaska. Rebutting Lowenfels, John Ellwood, vice president of engineering and operations for Foothills, said the existing permits and regulatory approvals for the Alaska Highway route provide considerable flexibility. This has been demonstrated in Canada where southern sections of the pipeline intended to go all the way to Alaska were built and are now in use. These have been modified and expanded over the years, he said. The permits allow for the use of new technologies, which will be incorporated into a new Alaska Highway pipeline, Ellwood said. As for the existing Canadian pipeline being unable to carry Alaska gas, "this is nonsense," Ellwood said. It’s standard practice in the gas pipeline industry to add compression to accommodate additional supplies, he said. When the system reaches the point where additional compression costs rise sharply, additional sections of pipe are installed at certain points along the system. Then the cycle starts over again, he said, with additional compressors added and eventually new lengths of pipe, until what is essentially a new pipeline has been built. Ellwood cited an example of a single pipeline built originally from Alberta to the U.S. Midwest being gradually expanded until it is now six pipelines.  

Family makes beauty salon a place of beauty

Operating a family owned business has its risks, both to the family and to the business. Many people have tried to run a family business; some have succeeded, while many have failed. The owners of Marie’s Beauty Salon & Supply seem to have found a formula for success in a family run operation. Since 1988 this business has been on a track for growth, and the company is healthier than ever. The founder, Maria Neubauer, a licensed cosmetologist and instructor, determined that most salons were not meeting customer needs for beauty supplies and services, so she decided to start a business. Joined by her husband, Joe, daughter Diane Holzschuh and her husband, Phil, they formed a corporation to operate Marie’s with a goal of providing high quality salon services and beauty products, with primary emphasis on customers. They determined that in order to be successful, they had to maintain their focus on the business. Here is their formula: * Focus on customers. This was the primary goal when starting the business, and it continues to be the major priority. The customer comes first at Marie’s. That message comes from the top down. It is communicated regularly to all employees. "We try to exceed expectations," said business manager Diane Holzschuh, "and we expect our employees to have that approach to our customers." * Focus on balance. In a family owned business, it is difficult to get away from either the family or the business problems. It is necessary to maintain balance. Family time is sacred. The owners try to balance business needs with family priorities. * Focus on strengths. Each family member contributes unique strengths to the business. Neubauer and Holzschuh run the day-to-day operation of the business. Neubauer takes responsibility for personnel, ordering and the salon management. Holzschuh’s business and accounting background make her a natural to manage financial and marketing duties. The husbands both have other businesses, but are active in the major decisions for the corporation. Phil Holzschuh’s computer skills help with inventory and accounting systems, while Joe Neubauer contributes marketing skills. Regular family business meetings update all owners on the responsibilities of each. * Focus on employees. Marie’s has an excellent staff, and Holzschuh says that good communication and continuing education play a key role in maintaining good employees. "We like to hire good people and keep them happy," Holzschuh said. The company uses graduates from local beauty schools when possible. They also have bi-weekly staff meetings to communicate information about new services, products and company policy. * Focus on marketing. "We want our marketing effort to be proactive rather than reactive," said Holzschuh. "A regular, planned approach using primarily radio has been successful for us." The company recently began using a marketing firm. According to Holzschuh, the timing was right. "The marketing firm helped us with fresh ideas and creativity," she said. "It also made time available to devote to other business needs." * Focus on banking relationships. Five years ago, when the company wanted to expand, its lender, National Bank of Alaska, used a program of the Small Business Administration to help with the financing. SBA’s loan guaranty program helped the bank overcome factors the bank considered more risky than it wanted to take without the guaranty. The SBA guaranteed loan enabled Marie’s to expand its retail space, add privacy rooms for facial, pedicure and waxing services, and improve lighting throughout the store. "The SBA provided an important tool for the bank in providing the financing for our expansion," said Holzschuh. "We have an excellent relationship with NBA," she said, "and we take full advantage of the services they offer for our business." The company was able to pay off the SBA loan ahead of schedule. Since the expansion in 1996, the company has nearly doubled its sales and has added seven employees. "Compete with yourself" has become a company motto, empowering the owners and employees to focus on making Marie’s the best that it can be, constantly evaluating products, services, staff and facilities, to give the customers the level of service they desire. That’s a good formula for success in a family owned business. Ron Veltkamp is the business development officer for the Small Business Administration’s Alaska District.   

KAKM makes leap to digital TV early, to broadcast four channels

Anchorage’s public television station, KAKM, is gearing up to quadruple its programming, bringing Anchorage fans four separate channels at once.The change, designed to coincide with the advent of high definition television, comes as part of a federally mandated conversion of television broadcasting to digital technology.Commercial stations nationwide must switch to digital broadcasting by May 2002, while public stations are required to convert by May 2003."It’s the first major change in television transmission in 50 years," said Susan Reed, president of KAKM’s owner, Alaska Public Telecommunications Inc.Current broadcasts use analog technology, but Congress aims to free up bandwidth on the broadcast spectrum for other uses like cellular telephone service. Moreover, the conversion brings with it advantages for television."With the same bandwidth now used for one analog TV station, we will be able to offer four channels of programming," Reed said.Known as multicasting, this process will provide KAKM viewers with a 24-hour-per-day children’s channel, two education channels with adult Public Broadcasting Service programs and telecourses from the University of Alaska Anchorage and the Anchorage School District as well as a business channel with continuing medical education courses and other training opportunities.Viewers also will be able to download additional information, some interactive, on their own computers that corresponds with the televised PBS programming. This datacasting will include course materials, software, transcripts, photos and information related to topics covered in the broadcast programming.KAKM is joining Anchorage’s other television stations in sharing a single broadcast tower for DTV, a move that will save each station at least $1 million. But it also means KAKM must complete its conversion on the commercial television timetable, Reed said.The switchover will cost APTI an estimated $6 million, of which half will come from government and private sources. The nonprofit broadcaster hopes to raise the remaining $3 million in a capital campaign that began Feb. 4, Reed said.In addition to space on the broadcast tower, the money will pay for a new automated programming retrieval system at KAKM that can be used to download and store nearly 3,000 hours of video programming. The system also can record and play back seven video programs simultaneously and access stored programs within one minute, paving the way for "video-on-demand" services within a couple years, Reed said."We expect to save $70,000 to $80,000 a year in operating costs with the new digital video disc server," she added. KAKM also will house Alaska’s only public DTV production center and share the facility with public television stations in Fairbanks, Juneau and Bethel, she said.Northrim Bank chief executive Marc Langland and Jim Palmer, head of external affairs at BP Exploration (Alaska) Inc., will co-chair the capital campaign. Former Gov. Walter J. Hickel, his wife, Erma Lee, and Lowell and Tay Thomas will serve as honorary co-chairs, Reed said.BP has already committed $300,000 to the campaign, and the Thomases also contributed a $300,000 gift. Reed said APTI will be seeking other large donors as well as government and foundation grants, but the ability to offer four channels of programming also will mean "lots more opportunities for program underwriters and sponsors."The fund-raising campaign will include direct mail appeals to KAKM’s 10,000 members and to other Alaska leaders. The TV station also will conduct informational tours every weekday during the noon hour throughout the month of February and an open house Feb. 24 from 1-3 p.m. For more information, call 907-563-7070.

Movers & Shakers February 18, 2001

Gov. Tony Knowles has appointed Walter Majoros director of the Division of Mental Health and Developmental Disabilities. The governor also appointed David Maltman administrator of the Developmental Disability Program within the state Department of Health and Social Services. Majoros has been involved in various aspects of mental health treatment for more than 20 years. Majoros has been executive director of the Alaska Mental Health Board since 1996. Maltman has served as executive director of the Governor’s Council on Disabilities and Special Education since 1991. Dr. Maria Wallington has joined Providence Alaska Medical Center in the new position of medical ethicist. Wallington assists patients, families, physicians and staff with ethical choices concerning clinical issues. Before obtaining her degree in medical ethics, Wallington practiced pediatric cardiology in Anchorage for two decades with Dr. David Brauner.James H. Juliussen has become a partner in the law firm of Davis Wright Tremaine LLP in Anchorage. Juliussen’s primary practice areas are employment and labor law and related litigation.The Alaskan Chapter of the American Society for Industrial Security has chosen Joseph Young chairman of its board of directors for 2001. Young is business manager for the Alaska Peace Officers Association. Madeline Schatz, a dangerous goods/cargo security specialist with the Federal Aviation Administration Civil Aviation Security Division, will serve as vice chairwoman. Charlene Derry, manager for the Office of International Aviation, FAA, is secretary, and Bill Rodasky, safety and security manager at the Hilton Anchorage Hotel, will serve as treasurer.Rick Thornton has been promoted to vice president of purchasing at Spenard Builders Supply. Thornton will be responsible for the overall operation of advertising, pricing, merchandising and purchasing departments. Thornton has been with SBS for more than 12 years, most recently as director of purchasing.Ramone Baccus McCoy has been sworn in as the Glennallen field office manager for the Bureau of Land Management. McCoy most recently served as assistant field office manager in Malta, Mont. McCoy previously worked with the U.S. Fish and Wildlife Service in Anchorage and at the Yukon Delta National Wildlife Refuge in Bethel.Terry Lee, Judith Diane McKee, Meghan Moore and Connie Nebesky have been appointed to officer positions at Northrim Bank. Lee, as electronic services officer, is responsible for supervising staff in Northrim’s electronic banking department. Lee joined the bank in 1995 and has more than 12 years of banking experience. McKee was chosen merchant services officer and is responsible for the product management functions of the merchant services department. McKee, who joined Northrim in 1999, has seven years experience in banking. Moore will serve as assistant compliance officer. Moore assists the bank’s compliance officer in the management of the bank’s Community Reinvestment Act program and loan regulatory compliance program. Moore joined Northrim in 1999. As training officer, Nebesky is responsible for overseeing the bank’s employee training program. Nebesky has 11 years of financial industry experience and joined Northrim in 1999.James McMullian has joined Alaska Sales and Service as general sales manager. McMullian has been in the car sales business for nearly 30 years in the Lower 48, most recently moving to Alaska from Gulf Breeze, Fla.The Alaska Public Offices Commission has appointed Brooke Miles executive director of the agency effective March 3. Miles has served as the APOC Juneau regional office manager, legislative liaison and lobbying law administrator for the past 18 years.Suzanne Rudolph has joined Providence Alaska Foundation as its Children’s Miracle Network director. Rudolph most recently was sales and marketing director for Alaska DigiTel. Rudolph has 10 years experience in sales, marketing and public relations.

Phillips sure of Inlet gas

Phillips Alaska Inc. says it is confident more natural gas can be discovered in Cook Inlet and that problems in meeting winter peaks in local heating and electrical demand can be met through gas storage. Scott Jepson, Phillips’ asset manager for Cook Inlet, told the Alaska Support Industry Alliance in Anchorage on Feb. 9 that his company is now discussing a gas storage project with Enstar Natural Gas Co., the regional gas utility.Unlike many areas of the Lower 48, Alaska does not have gas storage facilities because the Cook Inlet gas fields are large enough to meet peak winter demands.But as these fields mature and decline in production, they will soon no longer be able to meet winter peaks. Estimates now are that problems in daily "deliverability" of gas could begin as early as 2004.In other states gas is stored during low demand summer months and used during winter. Such a capability could easily be established here, Jepson told the Alliance.But exploration for gas is also just beginning in Southcentral Alaska, he said. New tools are available to the industry, like 3-D seismic, and exploration companies can now spot different indicators for gas and oil on seismic, Jepson said. These offer no guarantees of commercial discoveries, but they increase the chances of success, he said.Also, gas prices in Southcentral Alaska are increasing."The new gas contracts Enstar has signed provide a price that is high enough to stimulate new exploration," Jepson said.Southcentral Alaska has enjoyed very low gas prices for years because of the large fields’ lack of demand. Until the 1990s, gas in the Inlet was being sold for 30 cents per thousand cubic feet. Over the same period gas prices reached $2.50 and $3 per thousand cubic feet in the Lower 48, he said.Most major producing basins go through phases of development with major discoveries made early and then years, sometimes decades, go by before new companies come in with new ideas, Jepson told the Alliance.In the Inlet, gas was discovered in the 1960s while the industry searched for oil."All the big structures in the Inlet have been drilled," but there are many structures yet to be explored and undoubtedly smaller fields yet to be discovered, he said.For example, Phillips and Anadarko Petroleum are now developing the small Moquawkie gas field discovered on the west side of the Inlet in 1998. The field will begin producing gas for Enstar in early 2002, Jepson said.Smaller, independent companies like Anadarko, Forest Oil and Aurora are now exploring the Inlet, indicating the second phase of exploration is under way, he said."These are new players. More companies coming in will drill more wells," leading to more discoveries, Jepson said.Phillips itself is exploring with a new test well in partnership with Forest, planned north of Anchor Point on the southern Kenai Peninsula, Jepson said.However, one Cook Inlet oil exploration play now appears a dead end. Phillips plans no further work on its Tyonek Deep oil prospect near the Tyonek gas platform, Jepson said after speaking to the Alliance. The oil reservoir appears to be uneconomic at this time, he said.Tyonek Deep is part of the Sunfish prospect in the Inlet for which there were once high hopes. ARCO Alaska Inc., which Phillips acquired last year, made an Inlet oil discovery that at first appeared large.Subsequent drilling proved disappointing, however. Even before acquiring ARCO, Phillips continued work on a part of the Sunfish reservoir near the Tyonek platform, which it renamed Tyonek Deep. But even that was not viable to develop, Jepson indicated.

Around the World February 18, 2001

STATE Anti-salmon ad pulledANCHORAGE -- Quaker Oats has pulled a national television commercial in which a little girl declares she doesn’t like Alaska food and Alaska salmon.The girl instead says she likes a company product called Pasta Roni.Alaska elected officials didn’t find the commercial humorous and called the company."We take our salmon very seriously," said Gov. Tony Knowles. "We’ve spent millions of dollars and years of hard work to protect the sterling reputation and integrity of our salmon and other fish. We’re pleased that Quaker Oats decided to pull the national ad."NATIONBookseller posts lossNEW YORK -- Online bookseller reported a greater-than-expected fourth-quarter loss and announced that it would lay off 350 employees, or roughly 16 percent of its work force.For the quarter ending Dec. 31, had a net loss of $138.1 million, or 91 cents a share, compared with a loss of $38.4 million, or 27 cents a share during the same period last year.Revenues grew 37 percent in the fourth quarter to $104.6 million, compared with $76.2 million a year earlier.For the year ended Dec. 31, the company had a net loss of $275.7 million, or $1.87 per share, compared with $102.4 million, or 77 cents a share, in 1999.Revenues rose 65 percent to $320.1 million from $193.7 million.Phillips to buy ToscoNew York -- Phillips Petroleum Co. has agreed to buy Tosco Corp. in a $7 billion stock transaction.Managers said Phillips will benefit from integrating Tosco with Phillips’ business in exploration and production, gas gathering and chemicals joint ventures.Phillips will issue 0.8 Phillips shares for each Tosco share and assume approximately $2 billion in Tosco debts. The deal has been approved by both boards, subject to regulatory and shareholder approvals. It is expected to close by the end of the third quarter. Phillips’ board also has authorized a $1 billion share buyback program.Phillips expects the acquisition to produce annual pretax synergies of $250 million, improved net cash flow and a year-end 2001 debt-to-capital ratio of about 37 percent.Phillips runs three U.S. refineries, more than 6,000 retail and aviation outlets in 28 states and 6,000 miles of pipeline. It will acquire Tosco’s eight U.S. refineries and 6,400 retail outlets in 32 states, becoming the nation’s second largest refiner and its third largest marketer.Phillips has 12,400 employees and $20.6 billion of assets, and had $21.2 billion in 2000 revenues.Cisco misses targetSAN JOSE, Calif. -- Cisco Systems Inc. missed Wall Street’s earnings expectations for the first time in 3 1/2 years despite a nearly 50 percent gain in quarterly profits, blaming the slip on the softening U.S. economy.The world’s top supplier of equipment for the Internet and other computer networks earned $874 million, or 12 cents per share, in its second quarter ended Jan. 27. In the same three-month period a year ago, Cisco earned $816 million, or 11 cents per share.Excluding one-time factors such as acquisitions expenses and research and development costs, Cisco earned $1.33 billion, or 18 cents a share. Analysts were expecting 19 cents per share. Cisco, widely seen as a barometer for the technology industry and the Internet economy, finished regular trading at $35.94, up $1.38, on the Nasdaq Stock Market.Another stamp hike likelyWASHINGTON -- Just a month after higher stamp prices took effect the U.S. Postal Service, facing massive losses, is considering another rate boost that could result in higher prices early next year.The post office is reportedly facing losses of up to $2 billion this year despite the price increase that took effect Jan. 7, which included raising a first-class stamp a penny to 34 cents.While approving that increase, the independent Postal Rate Commission rejected or scaled back several other requested price hikes, cutting expected income by some $1 billion. At the same time, mail volume has dropped because of the poor economy, further reducing anticipated income.WORLDOil demand slowsLONDON -- The growth of world oil demand has slowed faster than expected in pace with a cooling global economy, but has yet to push prices lower, a respected industry survey said Feb. 12.World oil demand growth has fallen by 140,000 barrels per day to 1.5 million barrels per day, the Paris-based International Energy Agency said in its monthly report.It predicted continuing volatility in oil markets because of moves by OPEC to cut production to keep prices high, and the consequent reduction in oil inventories.High prices and mild weather in Europe and Asia are part of the story, but "the global economy is slowing, curbing demand,’’ the report said.Compiled from business wire services.

Alaska Command chief sees new units in state's military future

Alaska has a key role to play in support of national defense, and recent developments may enhance that, Lt. Gen. Norton Schwartz, commander of the Alaska Command, told state legislators in Juneau on Jan. 29. Schwartz also urged lawmakers to be understanding of the need for future base closings even as they support continued operations of Alaska military installations. There are things Alaskans can do to strengthen arguments for maintaining bases here, he added. An important new development enhancing the mission of Alaska’s military is the location of a C-17 airlift group in the state, Schwartz told a joint meeting of the House and Senate Military and Veterans’ Affairs Committees. "One of the challenges we’ve had is that while we have a major asset with airspace for training, the costs of transportation in moving people and equipment here is a liability. Having a C-17 unit here, which can help efficiently move units from the Lower 48 and Pacific region here to train, will be a big help," the general said. In addition, the U.S. Army’s consideration of moving a medium-force brigade to Alaska could mean, because of the C-17s also stationed here, an ability to quickly project force to virtually any region in the western Pacific, he said. Also, if the current disposition of forces in the Asia and western Pacific regions are realigned, it’s likely that some of them will wind up being repositioned in Alaska, Schwartz said. The general urged Alaskans to be supportive of the need to close redundant military installations, because the operations and maintenance costs take money away from the facilities, personnel and equipment that are retained. "Ten years ago we had 2.1 million people in uniform. Today we have 1.4 million. We’re one-third smaller, yet we’ve had no significant decrease in our infrastructure. We have airbases, but no aircraft," Schwartz said. In the next round of base closings, "Alaska cannot be immune. But we will make a compelling case for the mission of the bases that are here," he said. One thing that would help Alaska in the next round of closings would be for training access and strategic importance to be given as much weight as cost in the formulas used in consideration of base closings, Schwartz said. When the base closings process began 10 years ago the major focus was on cost of underutilized facilities. In future rounds there will likely be a broader perspective, and Alaskans could encourage training and strategic value be factored into the formula used by the base closings commission, he said. Overall, Schwartz was upbeat about the military’s future in the state. There is about $1 billion annually in military payroll paid in the state. One in five Alaskans have some connection to the military, through a family member, friend or neighbor. In Anchorage the ratio is tighter, one in three, he said. Training exercises also bring a lot into the economy. Cope Thunder, the air exercise near Fairbanks held four times a year, brings $2 million into the region, the general said. Southeast Alaska communities also benefit. The maritime part of the annual Northern Edge exercise was based in Sitka last year and brought $500,000 into the community, Schwartz told legislators. Ketchikan will play that support role in this year’s Northern Edge, and will enjoy a similar economic benefit, he said.  

Fisheries specialist leaves organic salmon label legacy

Industry advocate Kate Troll has left her job as fisheries specialist with the state Department of Community and Regional Affairs. During her three years on the job, Troll led the charge to make sure wild seafood would be included in new national organic standards. "Kate not only kept the door open, but went through the door on that one," a co-worker said. Troll also was involved from the beginning with the Marine Stewardship Council’s eco-labeling program, which last year certified Alaska salmon as coming from a healthy fishery. "We made sure our sustainable management of Alaska salmon was duly recognized. It’s nice to see some of the processors stepping up and putting that label on their products," Troll said. Troll also helped launch a popular program that provides marketing grants for new salmon products. Prior to her job with the state, Kate was director of the Southeast Seiners Association and United Fishermen of Alaska. Her replacement is Glenn Haight. Demerits force suspension Bristol Bay driftnetter Trygve Gabrielson of Walla Walla, Wash., won’t be out salmon fishing with the rest of the fleet this summer. Gabrielson is the first commercial fisherman to have his limited entry permit suspended for accumulating too many demerit points. Under a 1998 law, harvesters who receive more than 12 points over a three-year period lose their permits for one year. Gabrielson was charged with fishing during a closed period in Egegik and fishing before and after legal fishing periods. Sixteen demerit points results in suspension for two years, and more than 18 points results in three years on the beach. Fish caucus returns Watch for the resurrection of a legislative Fish Caucus, according to several policy-makers in Juneau. The group will comprise an informal mix of lawmakers and seafood industry representatives who will meet to discuss commercial fishing bills and issues. Rep. Fred Dyson, R-Eagle River, said the idea has been met "with a significant amount of enthusiasm," according to the weekly fish watch publication "Laws for the Sea." Sen. Alan Austerman of Kodiak and Rep. John Harris of Valdez also plan to participate. Enforcement funding Slashed budgets have forced the Fish and Wildlife Protection Division to use a "rob Peter to pay Paul" approach to both sport and commercial fisheries enforcement personnel and patrols. Agency director Joel Hard told the House Finance Committee that Bristol Bay takes 20 percent of total enforcement personnel for one month, while many other major fisheries are going on as well. "This example is not the exception throughout the year, it’s the rule," Hard said. Fish and Wildlife Protection has a statewide staff of 237 to patrol Alaska’s 36,000-mile coastline, plus lakes and rivers. Shellfish sells Americans love mussels, and per capita consumption has increased 250 percent in the past five years, from 880,000 pounds to 2.2 million pounds per month. WorldCatch reports that Terry Callery of Great Eastern Mussel Farms of Tenants Harbor, Maine, the largest mussel producer in the United States, says that American consumers are just learning what most of the world already knows -- that mussels are inexpensive, versatile and delicious. He says, "Mussels have grown beyond what has been an ethnic (in Belgium, Latin and Asian countries) appeal and are now a mainstream item in the U.S. supermarkets." The industry’s marketing efforts are a major reason for the popularity surge in consumption. "There is no question as to the availability of the product grown under controlled conditions. We only harvest what we can sell, and we always have what we need to sell," he said. "Because of this market stability, retailers can confidently advertise mussels to get people to the seafood counter." The growing popularity of mussels echoes the gain made by other aquaculture-based seafoods. Since 1987, due to the increase in aquaculture production, the per capita consumption of salmon is up 285 percent, shrimp is up 31 percent and catfish is up 96 percent.

Staffing insight for non-profits

Nonprofit organizations have become an important part of Alaska’s economy, and many nonprofit board members and staffers are working hard to build expertise and improve their professionalism. Taking a professional approach to doing one’s job is as important in the nonprofit sector as it is in private businesses. In some ways, it’s even more important, because resources are usually scarce and lost opportunities can interfere with accomplishing a group’s mission. Alaska is blessed with a nonprofit community that contributes to its quality of life in many different ways -- by helping those less fortunate, by providing educational opportunities to those who need them, by bringing alive the arts and culture, and by protecting the environment. But our nonprofit organizations face a big challenge today: finding ways to attract and retain good staff and volunteers. At a recent workshop sponsored jointly by the United Way of Anchorage and Phillips Alaska, participants gained valuable insights on how to meet this challenge. The workshop was one of a series designed to build leadership and management skills within Alaska’s nonprofit organizations. Workshop speakers emphasized that training staff in "best practices" leads to better management and more satisfied employees. Building a great nonprofit staff requires creating jobs with meaning that allow people to really make a difference. Nonprofit managers can seldom compete for employees on the basis of salary, so they need to find other ways to make their organizations desirable places to work. There are many possibilities, but two valuable ones are helping staff to acquire new skills and delegating power to them. These two strategies are tried and true approaches; they work. Recruiting and holding onto good board members is equally vital. People are no longer willing to devote hours each month to boring and ritualistic board meetings where their only role is just to listen and endorse staff reports. Board members increasingly want their time to matter and expect to be engaged in the most important decisions affecting the future of the organization. Among the issues they face are: dealing with information overload, using technology more effectively, increasing fund raising from individuals, becoming more entrepreneurial, finding ways to collaborate or consolidate with other organizations, and, of course, recruiting and keeping a diverse and effective staff for their organization. A key element in succeeding with this last issue is to build a strong relationship with their executive director. To do this, they must carefully select this person, conduct annual evaluations and offer fair compensation. On this point, Alaska nonprofit board members should be aware of a recent salary survey conducted by the United Way of Anchorage that shows that female executive directors are being paid significantly less than men for jobs of similar scope and responsibility. These results should send a message to all boards that pay equity must be at the top of their agenda if they are going to maintain a productive staff. Together, our boards and staff are doing the hard work of meeting important community needs. They deserve the best tools and skills we can provide. It is vitally important that we develop today the people who will lead our nonprofits tomorrow. We do that by setting annual goals for recruiting new board members, committee chairs and officers -- and through ongoing training and education of staff. Nancy Schoephoester is manager of philanthropy and community services for Phillips Alaska Inc.

Networking is key to thriving economies

What makes some regional economies grow faster than others? Recent work by the National Commission on Entrepreneurship reports that 5 to 10 percent of U.S. firms can be called entrepreneurial growth companies. Those companies are responsible for two-thirds of the 240,000 new jobs created each month. Why do some regions nurture these growth companies better than others? In comparing the growth of Silicon Valley vs. slower growing Boston in the last 30 years, and seeing how some regions like Austin apparently came out of nowhere, the commission found that the performance of different regions could not be explained just by looking at such factors as costs and skills of workers, taxes, land and the other inputs. The commission suggested what better explained success was the creation of a regional culture that had a vision of itself, key leaders who shared and communicated that vision, ancestor companies, heroes that promoted success, and most of all vibrant networks that honored and rewarded values like risk taking, openness, and change. Regional economies grew faster when they emphasized both cooperation and competition and not just company competition, start-ups rather than climbing the corporate ladder, building companies and not just making money, and loyalty to an overall network. Corporate and regional cultures influenced each other so the kind of influence a Hewlett Packard had in Silicon Valley, or Dell and others had in Austin helped create a different regional culture than the impact of DEC or Data General had on Boston or the Big 3 automakers had on Detroit. Regions grew faster that valued risk taking, and honoring and learning from failure, rather than risk-avoidance and stigma for failure. In short, networks trumped hierarchies. All regions have their techies, business managers, investor, and community leaders, but regions grew faster which could communicate to themselves a vision of itself that could transcend inevitable changes in technology, markets, elections and even the fate of leading companies. What do these findings have to do with Alaska? A recent survey of 480 members of state business and civic organizations provide some clues. The full results and your chance to take the survey are available at ( The most important success factor was an economy that could produce good jobs to hold young people in the state -- and nearly half, or 49 percent, rated Alaska’s ability to produce these jobs as poor. The next most important success factor was, unsurprisingly, an adequate supply of skilled workers; 36 percent rated the state’s performance as poor in this area and 47 percent as average. The quality of the state’s kindergarten to 12, post-secondary and higher education system was rated the fourth most important success factor. Approximately 7 of 10 Alaskans rated the state’s education system as average or poor. The state was rated lowest on four important factors that 8 of 10 participants rated as important or very important: its dependence on oil and gas revenues to fund public services; its lack of a state fiscal plan; the absence of local economic development strategies; and the absence of a state economic development strategy. The most positive news from the survey is that quality of life was rated as the third most important factor for the state’s economy and 61 percent of respondents rated the state as good or excellent in this area. The encouraging news is that the business community and the state may be poised to start an honest process of benchmarking our common definition of success and measuring our progress. Stronger private-public partnerships will be necessary to improve key parts of our economic infrastructure, such as improving education, creating more risk capital, and having the public and private sectors focus on what must be done to build a larger, more diversified economic base. Perhaps even more importantly, it may be time to create stronger linkages in the economy between educators and employers, industry suppliers and customers, investors and entrepreneurs, and the regulators and the regulated. A number of key organizations have been established or expanded in the last few years, such as the Oil Industry Support Alliance, the Information Technology Career Consortium, InvestNet, the Processor Industry Consortium, and industry advisory groups for different university units. They all seek to address our common need to have a better networked state. What apparently may be lacking may be more fundamental than either a state economic strategy or fiscal plan. It may be our collective sense of Alaska having a sustainable economic future. As important as it is to build enterprises that can compete globally, we may also need to have the confidence and will to construct a common vision that Alaska can grow those enterprises. My hunch is that a common vision of our future will need to combine some existing competitive advantages in terms of our resources and location with the technology and intellectual capital to produce more physical and knowledge products for the world. It will involve an Old Economy most Alaskans will recognize with a New Economy that will look different from what has happened in Austin or California. Almost every respondent, 97 percent, of the statewide survey agreed or strongly agreed that the private sector business and public policy organizations should work with state and local government to improve the state’s economic performance. In a mixed economy in a state of now only average per capita income, the will and need to construct that road map is both appropriate and timely. Jamie Kenworthy is executive director of the Alaska Science and Technology Foundation.

This Week in Alaska Business History February 11, 2001

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 TimesFeb. 14, 1981Large gas field found in reserve south of BarrowBy John KnowltonTimes WriterThe U.S. Geological Survey has made a discovery of what it calls one of the largest natural gas reservoirs ever in the National Petroleum Reserve-Alaska.The find was made in an area southwest of Barrow.It has tested at a rate in excess of 1,000 pounds per square inch of natural gas. That equals about 2.2 million cubic feet of gas a day or enough to operate electrical generating facilities for a city of 8,000 to 10,000 people."From the preliminary results, this would appear to be at least one of the better gas wells discovered on the reserve," said Max Brewer, chief of NPR-A operations for the federal agency.He said earlier drilling in the area indicates that the gas reservoir covers "a fairly sizable area" extending at least four miles from the new discovery."This is something that could very well be bigger than the existing gas fields in Barrow," Brewer said.Those fields are the oldest producing natural gas fields in the world north of the Arctic Circle. In their 31st year of production, the fields are providing more than 1 billion cubic feet of natural gas a year to Barrow.10 years ago this weekAlaska Journal of CommerceFeb. 11, 1991DNR Commissioner wants help with land picksBy Ray TysonFor the Journal of CommerceCommissioner Harold Heinze of the Department of Natural Resources is calling on "knowledgeable" Alaskans to help him pick the last 20 million acres of federal land available to the state under the Alaska Statehood Act. But time is running out."I don’t think a lot of us have thought about the fact only three years are left in the land selection process from the federal government," Heinze said.Under the statehood act, signed in 1959, the state is entitled to 103 million acres of federal land, but the act requires the state to complete its selections by 1994.While Heinze said the Hickel administration has made final land selections a priority, he emphasized that "we don’t have the time, energy and money to get data on everything in the world."Alaska Journal of CommerceFeb. 11, 1991Another Tongass battleAlaska Journal of CommerceJust when you thought it was over, a new fight concerning the Tongass National Forest in Southeast Alaska is under way. The latest skirmish -- between traditional foes, the environmental groups and the timber and, more recently, mining industries -- is being fought over proposed changes in the Tongass land management plan, now being revised to comply with the new law passed late last year by Congress.For the timber industry, the big worry is that despite assurances of steady timber supply put into the new Tongass law, conservation groups will pressure the Forest Service into actual reductions through land plan revisions and other administrative procedures.Actually, Tongass has the capacity to sustain timber harvests well above levels proposed by the Forest Service, the industry argues. The service, in revisions to its Tongass land management plan that are now required by the new legislation, proposes an annual "allowable sale quantity" of about 420 million board feet yearly, a reduction from the 450 million board feet allowed under previous law.... Forest Service studies show the Tongass, the nation’s largest national forest, can actually produce 700 million board feet of annual timber production and remain within the "sustained yield" requirement of law, the industry group said.-- Compiled by Ed Bennett.

Northwest Cargo grows

The addition of two Boeing 747 freighters and the return of the economy in Asia have Northwest Airlines Cargo in need of more space at the Alaska CargoPort. Just four months after it moved into the new Williams Lynx Alaska CargoPort at Ted Stevens Anchorage International Airport, Northwest is increasing its option for more space."We are way over where we were at this time last year; in fact, we had nearly as many flights in January as the whole first quarter of last year," said Mike McKinley, cargo manager for Northwest Airlines Cargo.Northwest Cargo aircraft made 131 landings in January compared with 98 in the first month of 2000, according to McKinley. Currently the cargo airline is operating 32 flights a week through Anchorage with its fleet of 10 Boeing 737-200 freighters and is cross loading as many as four aircraft at a time on some days, he said."In May we will start cross loading five aircraft and due to the extra equipment we will need to do the job we are looking to expand our space here at the CargoPort," McKinley said.Northwest will need an additional 8,000-10,000 square feet of space for ramp equipment used for cross loading and more warehouse space, in addition to the 63,000 square feet the company currently occupies.Northwest moved into the Alaska CargoPort, at the North Airpark at Anchorage International Airport, last October. The company has an option on up to 125,000 square feet, and eight aircraft parking spaces. Currently the cargo airline is using four parking spaces on the ramp.McKinley said Northwest will not need the new building space until the fall, as they can store the new ramp equipment outside during summer months, but will need inside storage by October."We are not sure exactly what we are going to do yet, whether to move to space currently occupied by United that they don’t need, or build new space. We are discussing that right now," McKinley told the Journal.United Air Cargo was the first airline to move into the CargoPort.Northwest Cargo will be taking delivery of two additional freighters -- for a total of 12 aircraft -- one in May, and another in June, according to company officials.Northwest plans on upping its flights to as many as 250 a week by August 2001, with the upward swing starting in March when the schedule goes to 41 flights weekly from the current 32.Northwest posted 165 landings in October, 167 in November and 162 in December during the peak shipping season, according to the company.McKinley said the frequency increase is being driven by a return of the Asian economy."We have been marketing heavily all over Asia, and it is paying off," he added. "Later this year we will start additional flights from Narita (Japan) to Seoul and on to Anchorage, with an additional direct flight from Seoul to Anchorage," McKinley said. With the addition of routes to China and beyond and an alliance with Japan Airlines Cargo for other Asia and Southeast Asia destinations, the airline is now expanding its capacity in the Pacific Rim, which in turn is increasing cargo activity at Anchorage International, according to company officials.

Knowles, Rep. Kott offer plans to raise Alaska minimum wage

Gov. Tony Knowles and Rep. Pete Kott, R-Eagle River, think a hike in the state’s minimum wage is long overdue. But restaurant operators say state legislators should think the issue through very carefully. Restaurants, particularly the fast-food sector of the industry, could be severely affected, according to Jack Amon, president of the Alaska Hotel, Motel and Restaurant Association.Knowles and Kott have both introduced bills raising the current $5.65 per hour minimum wage. Kott’s House Bill 56 was up for a hearing in the House Labor and Commerce Committee, chaired by Rep. Lisa Murkowski, R-Anchorage, in late January.Kott’s bill would raise minimum pay from $5.65 per hour to $6.40 in the first year, and to $6.90 per hour in the second year. The governor’s bill would raise the minimum to $7.15 per hour, and then be automatically adjusted as living costs rise.Legislators on the committee expressed frustration at the lack of information about how many workers in the state are actually paid the minimum wage and who they are."I think a raise in the minimum wage is long overdue, but who exactly is this bill supposed to help?" asked Rep. Norm Rokeberg, R-Anchorage.State Labor Commissioner Ed Flanagan said the best information his department’s Research and Analysis section has is data gathered in the fourth quarter of 1998 that shows there were 14,400 employed Alaskans earning between $5.75 and $6.74 per hour."Because this survey was done in the fourth quarter, October through December, it’s very safe to assume that the number during the summer months is much higher," because the tourist season is in full swing, Flanagan said.The research is part of a national survey paid for by the U.S. Bureau of Labor Statistics, the commissioner said.National data shows the majority of minimum wage workers are adults, Flanagan said, but the department has no data as to ages of the Alaska workers or whether they are heads of households. Other data the state has indicates that about 32 percent work in restaurants and bars, he said."We have a real lack of data," Rokeberg complained. "How many of these 14,000 are heads of households? How many are kids?"A survey of Alaska members of the National Federation of Independent Business, a small-business group, that was sent to legislators indicated that 15- to 19-year-old workers were the largest age group of employees among small businesses in Alaska, at 19 percent of the members’ work force.Eighty-nine percent of the NFIB’s Alaska members also said they paid their employees more than the minimum wage.Murkowski, who chaired the session, said, "We’re here to gather information on this issue and get it out on the table."Kott said one of his goals was to separate the current link between the state and federal minimum wages. Current law has Alaska automatically 50 cents above the national minimum. "We ought to set our own," and not rely on the federal government, he said.Flanagan said there hasn’t been an increase in the U.S. minimum wage for several years. "Until 1981 the federal government did a pretty good job of keeping the U.S. minimum wage in line with inflation. But from 1981 to 1990 there was no increase," he said.The Knowles administration has tinkered before with a hike in the wage, but waited to see if Congress would act, Flanagan said. "We decided not to wait any longer."Knowles chose $7.15 per hour as a proposed new minimum, the commissioner said, because at that level an adult working 60 hours per week -- one parent working 60 hours or one working 40 and a second working part-time at 20 -- would earn enough for a family to be at 105 percent of the established poverty threshold for Alaska.Roxanne Smith, a waitress at The Hangar on the Wharf, a Juneau restaurant, told the committee a minimum wage hike would get her above the poverty level.Her gross income last year was $11,000 including tips, on which she has to support two children. Since her employer doesn’t offer health insurance she relies on Denali Kid Care, a state medical program, for her children, and buys private catastrophic health coverage for herself.Restaurant staff are commonly paid minimum wage and rarely get raises. Tips are not as lucrative as many believe because many foreign visitors who visit Juneau during summer, such as Europeans, are not used to tipping, she said.But she still has 8 percent withheld from her wages for federal tax on assumed tips. Also, her employer requires her to pay the cost of any diners who walk out on checks, she said.Restaurant operators presented a different picture to the committee. Amon, speaking for the hotel and restaurant association, said most restaurant operators pay more than minimum wage and that wait staff earn between $12 and $25 per hour when tips are included. He offered to provide the committee with payroll records of his member companies to prove that.But there are typically no tips in fast-food restaurants, where unskilled or low-skill workers are the norm, Amon said. Generally fast-food operators employ young people, often in their first job, he said.A hike in the minimum wage would force operators to squeeze out young or low-skill workers, according to Bill Pargetter, a veteran restaurant operator who now operates an Applebee’s franchise in Anchorage. He said that if he had to reduce his 85 workers to 75 to absorb cost increases, he would preserve jobs for his most experienced workers. An experienced waiter or waitress can handle five tables, Pargetter said, while an inexperienced waiter or waitress is usually restricted to three."... I’ll wind up cutting off the less skilled," Pargetter said.

High bids delay Wainwright hospital

Construction of a replacement hospital at Fort Wainwright, expected to be one of the major construction projects in Alaska this year, is on hold after bids came in higher than expected. The U.S. Army Corps of Engineers Alaska District canceled the solicitation for bids Jan. 26 without awarding a contract.The project to replace the nearly 50-year-old Bassett Army Hospital was to be completed in 2005."We’re looking into options to save the construction season but at this point it does seem to be in jeopardy," said Corps spokeswoman Pat Richardson. However, she was unable to list possible options for the project.The Corps listed a four-year budget of $99.8 million for the project. The contract was to have been a negotiated, best-value procurement, Corps officials said. Congress had appropriated $133 million for construction of the new hospital and demolition of the old one.The 32-bed, 260,000-square-foot hospital would serve the military, dependents and retirees of Fort Greely, Fort Wainwright, Eielson Air Force Base and remote military sites north of the Alaska Range.Site development began in April."The government canceled the solicitation because of high prices in the proposals received Jan. 19," Corps officials said in a statement. "Reducing the scope of the proposed project was considered not in the best interest of the government."Corps officials told the Journal in late 2000 that design changes had delayed the timeline for construction bidding. The construction contract, which was due to be awarded Dec. 30, was next set to be awarded as early as this month.Bids received by the Corps were high, although Richardson did not disclose the number of bids received nor a dollar value range of the different bids."The bids were high enough that we canceled the solicitation," she said. "The customer (the U.S. Army) still wants the project."The health care facility would provide services including internal medicine, general surgery, orthopedics, obstetrics and gynecology, pediatrics and family practice. The design included other departments like emergency services, radiology, food service, physical therapy, pharmacy, labor and delivery, dental treatment and staff administration.

As tax time begins, here are some strategies

The following items identify planning strategies, tips and facts that could affect your 2000 and 2001 tax liability. Extensive and complicated rules govern the application of many of the items that follow, so please contact a qualified tax professional to see if they can be applied to your personal situation. * A new checkbox on the 1040 form authorizes the IRS to discuss any problems directly with a paid preparer. The IRS says this will reduce the "correspondence burden" on the taxpayers. It won’t authorize the preparer to represent the taxpayer in an audit or collection matter. * The standard mileage rate for business-related travel is up to 34.5 cents per mile for 2001. The mileage rate for 2000 is 32.5 cents per mile. * Parents of children younger than 17 can qualify for a valuable tax break: the child tax credit. This credit allows you to subtract as much as $500 from your taxes for each qualifying child in your family. The credit is phased out for higher income taxpayers with modified adjusted gross income over $110,000 for joint filers, $75,000 for single filers. * Up to $250,000 of qualifying home sale profits can escape taxes. This amount doubles to $500,000 for married people filing jointly. In general, you can take advantage of the exclusion only once every two years; and you must have owned and used the home as a principal residence for at least two of the five years immediately preceding the sale. However, if you sell your residence sooner due to a change in employment, health problems, or other "unforeseen circumstances," you may qualify for a partial exclusion. * Building an adequate fund for your retirement years may be one of your important financial goals. The government encourages retirement saving by allowing employers to sponsor tax-deferred savings plans, such as 401(k), 403(b) and SIMPLE plans. If you have such a plan available to you, take advantage of the opportunity to build a nest egg for the future and lower your current income taxes by contributing. * Individual Retirement Accounts also offer tax advantages. With a "traditional" IRA, investment earnings are tax deferred, and account contributions may be tax deductible if you meet certain requirements. A Roth IRA offers the potential for tax-free earnings. Contributions to a Roth IRA are not tax deductible. If eligible, you can save as much as $2,000 annually in traditional and/or Roth IRAs. * State-sponsored college savings plans are an option to consider if you’re a parent or grandparent interested in building a tax-advantaged education fund. Several states make their plans available to both residents and nonresidents, and most plans allow the account to be used for expenses at any accredited post-secondary school in the country. Investments in an eligible college savings plan grow federal income tax free until distributed. Plan earnings are taxed to the student/beneficiary upon withdrawal to pay qualified tuition and related expenses. * Reinvested mutual fund distributions should be added to the cost basis of your shares. Keep good records of reinvestment transactions so that you don’t pay more taxes than you should when you redeem or sell fund shares. Good records can allow for specific identification of shares sold that could result in favorable tax results. * Several tax strategies may help lower your income taxes if you invest in real estate. For example, the like-kind exchange is a popular technique for deferring taxes on dispositions of appreciated real estate. If you exchange a property for like-kind property instead of selling it outright, you can defer your gain and postpone paying tax. In effect, the like-kind exchange allows you to reinvest your profits without paying immediate tax on them. * The installment sale is also used frequently for real estate. In an installment sale, the buyer makes payments for a property to you in more than one tax year, leaving only part of your gain taxable each year. * Capital gains are taxed at maximum rates that are significantly lower than the rates applicable to ordinary income. The rates vary depending upon the type of asset sold, your holding period, and your regular tax rate. Instead of paying capital gains tax at 20 percent, you can qualify for an 18 percent rate on sales of investments acquired after 2000 and held longer than five years. Starting in 2001, the 10 percent capital gains tax rate drops to 8 percent for assets that have been held more than five years before sale. Unlike the 18 percent rate, the 8 percent rate applies immediately, not to assets acquired after 2000. * In 2001, eligible taxpayers can immediately expense up to $24,000 of business asset purchases. The amount is $20,000 in 2000. The expensing election is a valuable tax break. * Up to $2,000 in student loan interest can be deductible, up from $1,500 in 1999. The amount goes up to $2,500 in 2001. The deduction isn’t available for married couples filing jointly with adjusted gross incomes above $75,000, $55,000 for singles. * Smoking cessation programs and prescription drugs to alleviate the effects of nicotine withdrawal are tax deductible as a medical expense. Laser surgery to correct visual defects is also deductible as a medical expense. Every individual’s tax situation involves numerous variables that may impact the usefulness of any of these ideas in unique ways. If you are considering implementing any of the above strategies, please contact a qualified tax professional. Janet C. Kennedy is co-owner of Kennedy & Co. LLC in Wasilla.  


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