alaska business monthly

StimulusFundsWhat happens whenthe money runs out?Were we given theboost needed?

Alaska’s Healthy

C ommercial and residentialmarket status

Real Estate

Page 56

Page 64

Environmental Special Section | Building Alaska

Industry

From the Editor . . . . . . . . . . . . . . 7Inside Alaska Business . . . . . . . . 8Events Calendar . . . . . . . . . . . . 26Right Moves . . . . . . . . . . . . . . . . 32Market Squares . . . . . . . . . . . . . 45Alaska Trends . . . . . . . . . . . . . . . 95Ad Index . . . . . . . . . . . . . . . . . . . 98

D E PA R T M E N T S

A U G U S T 2 0 1 0TA B L E O F C O N T E N T S

R E G U L A R F E AT U R E S

ABOUT THE COVERStimulus funds boosted the

economy for the last year and this trend is expected to continue, but will it be enough? Read the story

in our Building Alaska Special Section, beginning on page 56.Cover photo ©2010 John Bale.

A R T I C L E S ( c o n t ’ d . )

(continued on page 6)

HR MATTERSFatal Attraction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20Possession becomes obsession By Lynne Curry

VIEW FROM THE TOPMike Craft . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22Alaska Environmental Power By Peg Stomierowski

ALASKA THIS MONTHAlaskans Savor State Fair Flavors . . . . . . . . . . . . . . . 24Four big events in August celebrate community spirit By Nancy Pounds

REGIONAL REVIEWNorthwest Arctic Borough. . . . . . . . . . . . . . . . . . . . . . 28Progressing through unity By Tracy Barbour

TOWNS IN TRANSITION Valdez . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86Not just for supertankers By Heidi Bohi

FINANCIAL SERVICES

Corporate Capital Planning . . . . . . . . . . . . . . . . . . . . 12Debt restructuring and refinancing free up cash By Peg Stomierowski

TOURISM

Fly-Fishing for Women Only . . . . . . . . . . . . . . . . . . . . 16Executive stress reliever By Heidi Bohi

OIL & GAS

North Slope Conditions Test Workers. . . . . . . . . . . . . 78Days and nights in Deadhorse and the oilfields By Heather A. Resz

OIL & GAS

High Taxes, Expensive Exploration, Delayed Development . . . . . . . . . . . . . . . . . . . . . . . . . 82Man-made obstacles may close trans-Alaska oil pipeline by 2014 By Mike Bradner

EMPLOYEE BENEFITS

Evolving Employee Benefits . . . . . . . . . . . . . . . . . . . . 90New options for insurance and retirement plans By Peg Stomierowski

ENVIRONMENTAL & RECYCLING

SPECIAL SECTION

Mining with Minimal Impact . . . . . . . . . . . . . . . . . . . . 34Industry seeks to become better environmental stewards By Vanessa Orr

Going Green . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38Alaska Waste and Green Star innovate leaders By Louise Freeman

Endangered Species Act . . . . . . . . . . . . . . . . . . . . . . 42Impacts of compliance in Alaska By Tyson Kade

Environmental & Recycling Directory. . . . . . . . . . . . 46

78PAGE

Photo by Heather A. Resz

A R T I C L E S

www.akbizmag.com • Alaska Business Monthly • August 20104

86PAGE

Photo by Larry Weaver, Public Works Director for the City of Valdez

A U G U S T 2 0 1 0TA B L E O F C O N T E N T S

BUILDING ALASKA SPECIAL SECTION

Stimulus Funds: What happens when the money runs out? . . . . . . . . . . . . . . . . . . . . . . . . . . 56Were we given the boost needed? By Heidi Bohi

Rural Alaska Construction . . . . . . . . . . . . . . . . . . . . . 60 Transportation projects dominate spending By Heidi Bohi

Alaska’s Healthy Real Estate Industry . . . . . . . . . . . . 64Commercial and residential market status By Rachel Kenshalo

Equipment Management Strategies . . . . . . . . . . . . . . 70How two Alaska contractors boost profits By Blythe Campbell

PCL Construction Services . . . . . . . . . . . . . . . . . . . . . 74North American company here to stay By Heidi Bohi

60PAGE

Photos by Blaine Galleher/Courtesy of Alaska Department of Transportation and Public Facilities


CORRECTIONSMary Sattler’s name was misspelled in an article in the June 2010 issue titled “Alaska’s Biggest Mines.”

In a story titled “Multimodal Cargo Transportation,” featured in the June 2010 issue, American Fast Freight, a consolidator that handles a large volume of freight to and from and within Alaska, was omitted from a list of other transportation companies featured.

AFF is one of the leading freight Alaska forwarders and consolidators serving the state.

www.akbizmag.com • Alaska Business Monthly • August 2010 7

Volume 26, Number 8Published by

Alaska Business Publishing Co.Anchorage, Alaska

Vern C. McCorkle, Publisher1991~2009

EDITORIAL STAFF Managing Editor Debbie Cutler Associate Editor Susan Harrington Art Director Candy Johnson Art Production Linda Shogren Photo Consultant Chris Arend Photo Consultant Judy Patrick Photo Consultant Bill Zervantian

BUSINESS STAFF President Jim Martin National Sales Mgr. Charles Bell Account Mgr. John Page Account Mgr. Anne Campbell Traffic Coordinator Elaine Collins Accountant Mary Schreckenghost

501 W. Northern Lights Boulevard, Suite 100Anchorage, Alaska 99503

(907) 276-4373Outside Anchorage: 1-800-770-4373

Fax: (907) 279-2900www.akbizmag.com

Editorial e-mail: [email protected] e-mail: [email protected]

Pacific Northwest Advertising Sales1-800-770-4373

ALASKA BUSINESS PUBLISHING CO., INC.

ALASKA BUSINESS MONTHLY (ISSN 8756-4092) is published monthly by Alaska Business Publishing Co., Inc., P.O. Box 241288, Anchorage, Alaska 99524; Telephone: (907) 276-4373; Fax: (907) 279-2900, ©2010, Alaska Business Publishing Co. All rights reserved. Subscription Rates: $39.95 a year. Single issues $3.95 each; $4.95 for October. Back issues $5 each. Send subscription orders and address changes to the Circulation Department, Alaska Business Monthly, P.O. Box 241288, Anchorage, AK 99524. Please supply both old and new addresses and allow six weeks for change. Manuscripts: Send query letter or manuscripts to the Editor. Alaska Business Monthly is not responsible for unso-licited materials. Photocopies: Where necessary, permission is granted by the copyright owner for libraries and others registered with Copyright Clearance Center to photocopy any article herein for $1.35 per copy. Send payments to CCC, 27 Congress Street, Salem, MA 01970. Copying done for other than personal or internal reference use without the expressed permission of Alaska Business Monthly is prohibited. Address requests for specific permission to the Editor, Alaska Business Monthly. Online: Alaska Business Monthly is available online from Data Courier and online from Thomson Gale. Microfilm: Alaska Business Monthly is available on microfilm from University Microfilms International, 300 North Zeeb Rd., Ann Arbor, MI 48106.

‘It can happen to you.’

F R O M T H E E D I T O R

‘It Can Happento Anyone.’

I remember a friend, who went from working on a master’s degree to living on the streets, once telling me, “Debbie, be careful. It can happen to anyone. It

can happen to you.” He ended up dying on the streets – not here, but in a com-munity far away where he lived part-time homeless and part-time with his mother.

Those words have always haunted me, and they do even more today.Recently, I met a bright, vibrant woman full of ideas and vigor. She had a past

life of purpose and professional success. But at 59, even with age discrimination laws in place, she found herself in a situation where few would hire her. She did manage to find part-time work, but still, the walls crumbled down around her.

She did not make enough to afford the rent, no matter how hard she tried, and neighbors complained about her pets and other tenant-related issues. She soon found herself without a home and four animals to take care of. Trying to find temporary homes for her dogs, at least until she could get herself back on her feet and into an apartment, seemed futile. One dog had issues only she was willing to deal with. An animal lover, she did not want to see her precious dog put down.

So as I write this, here we sit. Four dogs, a harried lady, and no place to put them. It’s a sad story. And even sadder when I learn more than 20 have died on the streets in Anchorage in about a year’s time. I wonder what will happen to her.

In Alaska, in 2008, 3,311 were homeless, according to statistics put out by the Alaska Justice Forum, which is part of the University of Alaska Anchorage system. We rank as one of the highest states in the nation for our homeless population.

And according to the report, titled “A Look at Homeless in Alaska,” in January 2009, based on a single-night count, the figures are even more astonishing. There were 4,583 homeless, 93 percent sheltered. About 7 percent were unsheltered (cars, parks, sidewalks, abandoned buildings, streets). Of the unsheltered, the report went on to state, 23.5 percent were households with children.

Anchorage has the highest homeless population, the report stated, nearly 65 percent. In 2009, the count of Anchorage homeless was 2,962.

“It can happen to anyone. It can happen to you.” Those haunting words come from the grave and into my heart. There’s only so much I or anyone can do.

I feel for this woman who right now is packing boxes to go who knows where and who knows when. I feel for her dogs. I feel for the dozen or so who have reached out their hands to help her, only to find a dead end.

I offer her a room for a few nights, sans dogs, but know even that must stop. Then I wonder. What if it happened to me, to my children, my family? Would there be help? Or would I be like this woman. A billion boxes, four dogs (her family) and nowhere to go, no place to call home.

– Debbie Cutler Managing Editor

Sitnasuak Native Corp.Opens Anchorage Office

Sitnasuak Native Corp. (SNC), the village corporation for Nome,

opened an Anchorage office earlier this year at 420 L St., Suite 505. Company offices will remain fully operational in Nome. SNC owns and operates numer-ous businesses and properties in Nome and has multiple operations throughout the United States and Puerto Rico.

DenaliTEK Brings CloudComputing to First

Rate FinancialAnchorage company DenaliTEK Inc.

announced that it has finished roll-ing out a successful deployment of its newest cloud-based solution at First Rate Financial. The offering is designed to provide reliable and secure networked e-mail, file storage, sharing, communica-tions and desktop management without the use of on-site servers. It advertises cost savings by replacing the purchase and upgrade IT cycle with hosted ser-vices not requiring constant maintenance.

DenaliTEK is employing Microsoft’s global network of geo-redundant data centers, professional Cisco hardware and redundant internet access to offer guaranteed uptime and is partnering with Sophos and Venyu to offer a full suite of data protection services.

“Technology has finally matured to where we can offer small business owners more functionality than ever while significantly minimizing their costs,” said DenaliTEK Chief Oper-ating Officer Todd Clark.

The company is now expanding its cloud computing initiative across An-chorage. It also is leveraging campaigns in unified communications solutions, long-term strategic technology plan-ning, risk assessment services and elec-tronic medical record systems.

DenaliTEK has a decade-long track record providing industry with lead-ing technology solutions to small and medium businesses.

Anchorage Film OfficeNow Open

Ready to share the city’s 365 mil-lion acre back lot with productions,

the new Film Anchorage office at the Anchorage Convention & Visi-tors Bureau (ACVB) opened in June. Working in concert with the Alaska Film Office, the Alaska Film Group and other visitors bureaus, the Film Anchorage office markets Alaska to feature films, commercials, documen-taries, stills shoots, reality shows or TV series considering production locations. The office will also aid projects once work begins, providing local knowl-edge, referrals and liaison services.

Visit the Film Anchorage web-site at www.Anchorage.net/film for more information.

Yukon Equipment Revamps Website

Yukon Equipment Inc. upgraded its website at www.yukoneq.com.

The company has locations in Anchor-age and Fairbanks. The new website allows visitors to locate information on

new and used inventory and custom-ers can request a quote on available equipment, search for parts and browse showrooms for Case, Trail King and Link Belt Excavators. Links are also available to manufacturers of products sold by Yukon Equipment.

RIM Architects Works on Asia Projects

RIM Architects of Anchorage was chosen to work on housing and

hospitality projects in several Asia locations, including China, Taiwan and Okinawa. RIM Architects is working with Asian firms to produce concept, schematic and design development ser-vices. RIM officials have discovered their Asian counterparts are often eager to incorporate Western designs. Also, Asian architects often face design chal-lenges akin to Alaska, RIM officials said.

Seward Hotel Earns AccoladesSeward Windsong Lodge received

a top award and ranking for 2009 from the international tour operator Studiosus. The lodge ranked No. 1 and was one of four North American hotels to receive the 2009 award. Stu-diosus selects hotels based on client evaluations, which rate facilities for atmosphere, comfort, cleanness, breakfast and service. Studiosus is a cultural and educational tour opera-tor, running more than 1,000 routes in about 100 countries. The company gears its tours chiefly to travelers between the ages of 45 and 65.

The 180-room Seward Wind-song Lodge, owned by CIRI Alaska

INS IDE ALASKA BUS INESS COMPILED BY NANCY POUNDS


Tourism Corp., operates from mid-May to mid-September.

“We are pleased to have been a part of the public-private partnership that brought this route to Alaska,” said Emil Notti, commissioner of the state Depart-ment of Commerce, Community and Economic Development. “It provides a valuable transportation service to resi-dents of the Interior, and also brings jobs and economic opportunity to the visitor industry.”

USKH Climbs in U.S. RankingsUSKH Inc. of Anchorage improved

its ranking in the annual Engi-neering News-Record Top 500 Design Firms survey for 2009. USKH moved up to No. 379 from its previous rank of No. 423. Rankings are based on annual revenue across several market sectors.

“The fact that we ranked better than ever despite the overall slow-down in our industry is something that I am very proud of,” says Tim Vig, USKH president.

Design revenue for the Top 500 firms fell nearly 12 percent to $80 bil-lion in 2009, down from nearly $91 bil-lion in 2008, according to Engineering News-Record.

Kendall Opens Kia Dealership in Fairbanks

Kendall Automotive Group opened a Kia Motors dealership in Fair-

banks in June at 3419 S. Cushman St. The dealership is part of Kendall Auto Alaska, which currently represents Kendall Toyota/Scion, Lexus and Land Rover in Anchorage; Kendall Ford in

Wasilla; and Kendall Toyota/Scion, Subaru, Mazda and Honda in Fair-banks. Kendall Automotive Group is based in Eugene, Ore. Kendall expects to have 10 to 15 full-time employees at the Fairbanks Kia location.

“We are very excited to be able to bring the Kia product back to the community of Fairbanks,” said Ken-dall Automotive Group President Dave Blewett.

The company represents 15 automo-tive manufacturers and is one of the largest privately held auto dealership groups in the Northwest. Kendall owns and operates automotive dealerships in Oregon, Idaho and Alaska.

Fairbanks Lands New Frontier Flights

A federal grant helped Fairbanks add new summer flights between

Denver and Fairbanks by Frontier Air-lines. Denver-based Frontier was due to fly the nonstop flights four times a week from mid-May through Sept. 12. Airport officials aim to expand the flights from seasonal operations to year-round flights.

The grant included $500,000 from the federal government and $100,000 from the Fairbanks Convention and Visitors Bureau, which served as the community partner.

Fairbanks International Airport re-ceived the grant as part of a 2006 Small Community Air Service Development grant awarded by the U.S. Depart-ment of Transportation. The grant was administered by the state Department of Commerce, Community and Eco-nomic Development.

GeoNorth Designs New WebsitesGeoNorth LLC of Anchorage com-

pleted work on two new Web design and development projects.

All Dream Properties Real Estate provides real estate tools for buyers, sellers and agents to list or find prop-erty listings. All Dream Properties aims to work with Multiple Listing Service’s search service and locate list-ings outside of MLS. The website is www.alldreamproperties.com.

GeoNorth also developed Team Up World, an online marketing tool de-signed to connect business owners via a referral network. The website is www.teamupworld.com. GeoNorth was able to create this site in less than a day by reusing the theme – with minor modi-fications – from the existing site, All Dream Properties Real Estate.

Grant Aids Kodiak Cattle Ranchers

Operators of the Sitkinak Cattle Ranch near Kodiak were chosen

to receive a $131,749 federal grant to develop a new value-added product. The U.S. Department of Agriculture included the Alaska ranchers in its Rural Development Value Added Producer Grant program. The Alaska ranchers expect to add at least 10 new jobs as part of the project. The Alas-kans plan to process their own livestock on the ranch and deliver fully cooked, shelf-stable beef products to local, statewide and national markets. The Value-Added Producer Grants total more than $22.5 million nationwide.

The grants will be used to create

INS IDE ALASKA BUS INESS


higher value meat products such as fully cooked steaks, stew meat, summer sau-sage and snack sticks. The value-added processing and packaging method will solve the problems remote livestock producers have of getting their prod-uct to market. Meat will be processed into retort pouches, steam cooked and sealed into foil pouches, providing a long shelf life and removing the need for refrigeration.

Red Dog Turns To New Deposit

NANA Regional Corp. Inc. and Teck, operator of Red Dog Mine,

are pursuing plans to develop the Aqqaluk Deposit. Ore from Aqqaluk is needed to supplement ore from the Main Deposit, which is almost mined out. Teck officials are working to begin mining at Aqqaluk.

Red Dog Mine, located in North-west Alaska, is situated on land owned by NANA and operated by Teck. The mine is one of the world’s largest pro-ducers of zinc concentrate.

Operators have faced an uncertain future for the mine since the Environ-mental Protection Agency pulled cer-tain water-quality provisions from the National Pollutant Discharge Elimina-tion System Permit it issued in respect of the main water discharge from the Red Dog Mine in February. The EPA ruling was in response to an appeal filed by two environmental law firms represent-ing two environmental groups, Indian Reorganization Act Councils for two villages, and five individuals.

Teck officials have stated plans to develop Aqqaluk with methods to pro-tect water quality and the environment.

Red Dog Mine is an important eco-nomic engine for Northwest Alaska. About 58 percent of Red Dog’s 500 employees are NANA share-holders. NANA subsidiaries provide goods and services for the mine.

Steffys Honored by University of Alaska

University of Alaska officials have named a Kenai Peninsula College

building after long-time resource indus-try educators Dennis and Ginger Steffy. The Steffys have supported vocational-technical education in Alaska’s mining and petroleum industries.

Since the founding of UA’s Mining and Petroleum Training Service in 1979, the Steffys have helped train an esti-mated 100,000 students in everything from underground mine safety training to oil and gas drilling technology.

UA officials dedicated the MAPTS building on the Kenai Peninsula Col-lege as the Dennis and Ginger Steffy Mining and Petroleum Training Center of Excellence in June.

Dennis Steffy has nearly 40 years of continuous service to the oil, gas and mining industry. He’s been director of MAPTS since 1979, when it was known as the Petroleum Extension Program at KPC. He’s perhaps Alaska’s most internationally recognized expert in oil and gas drilling technology, min-ing and health safety education, hav-ing helped establish and operate the Sakhalin-Alaska College in Russia.

Ginger Steffy retired as director of Kenai Peninsula College in 2002, a position she held for 15 years.

Previously, she served in various posi-tions at KPC, including teaching phys-ics, physical science, math and energy. She also developed courses in energy resource technology. She retired after 29 years of service to the university with emeritus director status. Ginger Steffy also was instrumental in creating the Alaska Process Industries Careers Consortium in 1999.

INS IDE ALASKA BUS INESS

ABM Takes First Placein National

Communications Contest

Alaska Business Monthly took first place in its category in The Na-

tional Federation of Press Women Inc. Communications Contest, for a story written by Managing Editor Debbie Cutler titled “Ice Road Truckers: The Reality Behind ‘Reality’ TV.” The article also took first place in its cat-egory in the statewide contest, put on by the Alaska Professional Communica-tors. National awards will be presented in Chicago Aug. 26-28. ❑


Parker, Smith & Feek understands the complexity of our company and excels, in coordination with our employee benefits team, at providing outstanding service to our employees.

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www.psfinc.com

2233 112th Ave. NE, Bellevue, WA 98004 425.709.3600 | 800.457.0220 4000 Old Seward Hwy., Suite 200, Anchorage, AK 99503907.562.2225


Corporate Capital Planning

FINANCIAL SERVICES

Debt restructuring andrefinancing free up cash

BY PEG STOMIEROWSKI

Companies in Alaska, as else-where, whether weathering the financial storm well or under

duress, are considering debt restructur-ing and refinancing strategies. They are looking for ways to help them hang tough in a troubled economy, keep their doors open, and free up cash for various purposes, including acquir-ing weaker competitors. These capital planning approaches are expected to continue for at least a year.

Besides the potential to restore cash flow, renegotiating debt at historically low interest rates can allow a company to stretch out payments, sometimes at more favorable rates and terms. Some firms will seek the consultation of finan-cial management specialists in review-

ing the possible terms and doing the necessary negotiation. Since managing debt, with its high stakes, can be a stress-ful process, finding the right institution to work with is important.

MATCHING CAPITAL NEEDSWITH SOURCES

The 11 member staff at Alaska Growth Capital (AGC) has been busy. Small business loan volume is at an all-time high and expected to continue that way well into 2011, said Chief Executive Officer Hugh Short. Annual lending at the state’s only business and industrial development corporation (BIDCO) is expected to triple over 2009, to more than $35 million in 2010, Short said, in-cluding a diversity of clientele who visit its small office environment to explore their options.

A niche lender, AGC offers government-guaranteed loans in an at-tempt to maximize use of Small Busi-ness Administration (SBA) and U.S. Department of Agriculture (USDA) programs. Short says his staff sees many clients who have failed to achieve the credit solutions they sought from more traditional lenders and have been re-ferred by banks that turned them down. Additionally, AGC has been building a significant new markets tax credit port-folio, with AGC receiving $50 million in allocation from the U.S. Department of Treasury in 2009.

Sources of financing assistance for larger firms also include the Alaska Industrial Development and Ex-port Authority (AIDEA), observed Brian Nerland, president of Alaska

operations for KeyBank. While he was seeing more uptick in loan demand than debt restructuring, he said, Key-Bank representatives have been talk-ing to clients about areas of risk to be mindful of, including interest rates. He says relief may be available either through fixed-rate loans or interest rate swaps, which allow companies to lock into interest rate at their lows.

With some clients, KeyBank uses bond financing, private placement of debt and debt syndication. With some of these methods, there’s a single party providing the debt financing, he said, but on a more institutional struc-ture. In debt syndication, the lender takes the lead in helping more than

Brian NerlandPresident, Alaska Operations

KeyBank

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Hugh ShortChief Executive OfficerAlaska Growth Capital

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one borrower at once place the debt. At Wells Fargo Alaska, business de-

mand for financing has slowed from a peak in 2008, when the institution provided more than $800 million in aggregate business and commercial lending – probably two-thirds of it, commercial, said Sam Mazzeo, com-mercial banking manager.

After 20 years of business growth, with oil-related and tourism sectors down, there’s a fear factor affecting Alaska’s economy, he reflected, and consumers have pulled back. Weaker and more leveraged borrowers are more affected by the trend. Since they are less experienced and less capital-ized, Mazzeo said, they tend to be more vulnerable to the stress.

Wells Fargo customizes credit solu-tions based on cash flow, assets and the purpose of any given loan. At Wells Fargo, restructuring primarily implies credit agreement changes, whereas refi-nancing may only imply taking advan-tage of a lower rate. While restructuring generally involves changing the terms, amortization, collateral, etc., he said, re-structuring a balance sheet might mean fundamentally changing investment philosophies or debt preferences.

In general, Mazzeo said, the costs of borrowing money are related to the level of risk. The lower the risk in ex-tending credit, the lower the cost of the loan is likely to be. Cost also tends to be a function of the overall business relationship with the bank, he said, and deposit accounts and other non-credit business often matter.

Mazzeo said many solid businesses here with the capacity to easily bor-row money in 2008-2009, borrowed for the first time in a long while just to bolster their liquidity and/or to be ready to take advantage of business opportunities in the lagging economy. Alaska Native corporations, he noted, have been particularly active.

Many Alaska companies raised cash by refinancing or leveraging assets, he said. They wanted to be ready for op-portunities. Some were looking for companies to buy, he said, or eyeing weaker competitors. In general, they’ve been trolling for business opportunities provided by economic downturns.

Even without looming cash needs, many corporate borrowers have taken

advantage of low short-term interest rates for the last several years and now are looking to lock in rates and refinance to create liquidity, he said. Again, they want to have cash on hand in order to move quickly when oppor-tunities arise.

PROACTIVE CREDIT ANDDEBT MANAGEMENT

Ideally, structuring credit effectively is best done before an emergency, Mazzeo observed. “Banks don’t want to go through a fire drill, and borrowers

don’t either,” he said. “Borrowers need to try to be proactive instead of forc-ing themselves and the bank to react behind the curve. It’s much better to be proactive.”

Good accounting and finances sup-port allowing a business to create ac-curate projections of internal financial conditions a year or two ahead of time, including projections of expected cash flow. Quality projections provide bor-rowers with sensitivity in their analysis of future events. That, he said, can help the borrower react in a more timely

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way to changing economic conditions. In general, costs of borrowing are

related to the level of risk, he said. The lower the risk in extending credit, the lower the cost of the loan is likely to be. Cost also tends to be a function of the overall business relationship with the bank, he said, noting that deposit accounts and other non-credit business can be important.

TIMING CAN BE EVERYTHINGAs this handful of lenders individually discussed their services in early sum-mer, interest rates, which are tied to the prime rate, were running a maximum of 6.25 percent. Guaranteed loans were available for a maximum of $1.6 mil-lion guaranteed under the SBA, Short said, and $10 million with the USDA Business and Industry program.

For the second half of 2009 and the first half of 2010, the U.S. government increased loan guarantee levels by the SBA from 75 percent to 90 per-cent (from $750,000 to $900,000 for a $1 million loan), and this has proven to be a huge boon, Short said. Banks are more comfortable with the risks associated with some loans because there’s less cash investment on their parts, he said.

As a preferred SBA lender, Short said, AGC can underwrite loan appli-cations internally. While waiting for missing or incomplete documentation is probably more typical, it is possible, he said, that someone coming through

“Banks don’t want to go through a fire drill, and borrowers don’t either.

Borrowers need to try to be proactive instead of forcing themselves and the bank to react behind

the curve. It’s much better to be proactive.”

– Sam MazzeoCommercial Banking Manager

Wells Fargo Alaska

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the doors with all of their documents perfectly in order could be approved in a matter of weeks. Under the more complicated USDA underwriting, the process tends to take longer.

Whomever the preferred source might be, Nerland echoed, a borrower needs to have realistic expectations of how fast any traditional or nontradi-tional lender can effectively respond. If you need money by the end of July, be sure to approach the lender by early June so there’s time for an appraisal and other review processes; traditionally, 30 to 60 days is not an uncommon time frame, he said.

CLEAR PURPOSE ESSENTIALRestructuring can be successful, Nerland said, when it supports a company’s business plan, when the growth in revenues effectively offsets a planned expansion, and when im-proved efficiencies and infrastructure make the effort worthwhile. Even for smaller requests, when making a proposal, the owner should have a purpose behind it, he said.

Overall, the merits of borrowing still

depend in part on what the funds are used for, Nerland says, and financing equipment, with relatively shorter de-preciation rates of three to seven years, might make sense. Companies also are looking at equipment leasing, which doesn’t require a down payment. Some are looking at technology or infrastruc-ture upgrades.

Or it can come down to just staying afloat, better managing basic business processes in these times, and avoiding such dire and potentially expensive processes as bankruptcies.

While managers should always be watching the financials, in real-ity “when times are bad, that’s when people pay attention to the balance sheet and income statements,” said Issac Vanderburg, Southcentral region director of the Small Business Devel-opment Center (SBDC).

As sales began to level off or decline and lending requirements tightened, some firms, especially retail firms, were having trouble meeting such short-term demands as replenishing inventory, making payments on short-term lines of credit from vendors or banks, and

renewing their lines of credit, he said. They are realizing “they need to do some first aid,” Vanderburg said, pos-sibly renegotiating terms with vendors, reducing inventory levels, or improving accounts receivable management.

Still, he said, a surprising number of would-be entrepreneurs, mostly women and minorities, are getting into business, when “we were expecting new business starts to drop off.” Some are acquiring other businesses and hop-ing to inject some new efficiency into them, including anything from better accounts management to more efficient use of assets.

“There are still a lot of people out there with money who are looking for opportunities,” he said, including peo-ple who have some money and maybe a career behind them. These are not so much hostile takeovers, he said, as see-ing opportunity in the struggles others are having to stay afloat.

The trend is seen across all sectors, Vanderburg said. Those doing best in this economy, he said, tend to be in the service sector. “Those are my stars right now.” ❑


Fly-Fishing for Women OnlyTOURISM

Executive stress relieverBY HEIDI BOHI

No phones, no computer, no walls – and no men. This, fly-fishing guru Cecilia “Pudge”

Kleinkauf says, is the perfect prescrip-tion for women executives who need a little stress relief from a lot of job. And it’s exactly what she has been offering working women for the past 25 years, instructing and guiding female-only fly-fishing trips on some of the state’s most remote and remarkable waterways in areas such as Brooks River, Lake Clark, the Denali Highway, Cordova, Nome, Wood Tikchik State Park, Kodiak and the Kenai Peninsula.

Although her clients are all ages, skill levels and from all walks of life,

including mothers, divorcees, widows, and those battling health problems or other personal issues, one thing they all agree on, she says, is how soothing fly-fishing is.

“It’s wonderful to be outside with no telephones ringing, no subordinates needing their help, no pressing dead-lines, or any of the other things that cause stress in the working world. These trips allow them to be somewhere all of those things aren’t,” Kleinkauf says.

As far as Pam Finnesand is con-cerned, whether she catches fish on the annual trips she takes with Kleinkauf’s company, Women’s Flyfishing, has little to do with whether she considers

the outing a success – though she can only remember one time when she went home empty-handed, the trip was still the highlight of her year. As president and chief executive officer of Ahtna Support and Training Ser-vices, where she averages 60-hour workweeks, Finnesand says, just as much as the fly-fishing, she relishes the one time of the year when she’s not thinking of business. Even when going on a cruise, she says, there was an In-ternet connection so the temptation to check in with the office was too great. But on Kleinkauf’s trips, the locations are so remote it’s impossible to have any contact with the outside world.

Women attending the annual Women’s Flyfishing school in Cordova admire the eagles in the trees along the creek.

Photos courtesy of Cecilia “Pudge” Kleinkauf


“It gives me a real chance to re-new, rejuvenate and have a week of self-reflection because when I’m out fishing, I’m pretty much on the water in a world by myself.”

As she prepares to go on Kleinkauf’s Nome trip this month – one of her favorites because of the trophy-size Arctic grayling that average 20 inches – looking back Finnesand says she sought out Kleinkauf’s expertise 15 years ago after a fishing trip on the Ke-nai River when she saw another angler land a fish on a fly rod in just under 15 minutes, while those around him had been casting for hours. Although she talked to another local business that offered fly-fishing lessons, it was Kleinkauf who encouraged her and had a less intimidating style. “She

didn’t make me feel stupid,” she says.Besides going on her trips to relieve

stress, Kleinkauf says, her clients who are business women tell her that one of the things they enjoy the most is simply the opportunity to be with only women, especially when they spend most of their working lives with men. Since most of the women are like-minded and come from similar backgrounds, over the years, she has seen many of them forge lifelong friendships and later re-turn on the same trip together, whether they are from Alaska or somewhere in the Lower 48 states. They also enjoy a competitive work environment re-placed by camaraderie. Kleinkauf en-courages the women to do the best they can, while still doing everything she can to make sure everyone catches fish.

Which is not to say these women are not also serious anglers. On a trip to Brooks Lodge, Finnesand remem-bers Kleinkauf working with every-one individually and the group ended up outfishing the men around them, which she says is not the first time that has happened.

“There was a tremendous sense of pride,” Kleinkauf says, “especially for those who had never fished before. You can pull your car over and go fishing anywhere, but when you’re a woman – especially if you’re the only woman – it can be kind of intimidating. This is the opportunity to be out in a safe location, learning new things and being comfort-able knowing that I can hold my own.”

Fly fishing also can be a good team-building exercise, she found. Although Klienkauf stakes out the best location for the day at 5 a.m., holding the spot so that other anglers do not move in requires cooperation.

“We’re normally the only women out there, so when someone catches a fish we move in as a group to hold their spot so it’s still there when they come back,” Finnesand says.

Besides women executives joining a fly-fishing trip individually, or organiz-ing a group of friends, the corporate world also uses her for corporate re-treats, executive work sessions, incen-tive trips to reward top producers in a company, and to promote staff and client loyalty. A fly-fishing “staff meet-ing” or fishing tournament, Kleinkauf says, is commonly organized by large businesses, mixing fishing and staff de-velopment time. One company had her put together a fly-casting afternoon for its employees. The business had pizzas delivered to the local lake where they were fishing and after an hour of prac-tice, they held a fly-fishing competition where a few employees from each de-partment competed with other groups by fly-casting into hula hoops.

Many women in business are

Women’s Flyfishing client, Mimi, with a super silver salmon caught fly fishing out of Cordova.

“Women and men learn differently and commu-

nicate differently.”– Cecelia “Pudge” KleinkaufWomen’s Flyfishing Owner


motivated to learn to fly fish so they don’t feel left out when they partici-pate in various out-of-the-office meet-ings and fishing lodge retreats when they want to be able to hold their own with the men. Although Kleinkauf

emphasizes the relaxing wilderness environment where the only thing her clients have to focus on is the beau-tiful surroundings and catching fish, she does not mean to undermine why they are fishing with her to begin with:

to learn to catch fish from any lake or river. And to this end, she says, she makes it her job to make sure that at the end of the day everyone has hooked, played, and, hopefully, caught a fish.

Kleinkauf attributes some of her success to being a woman and know-ing how to explain the techniques in a non-threatening environment and in a way that women can relate to.

“Women and men learn differently and communicate differently,” she ex-plains. “For years I have heard them tell me, ‘Oh, is that what my husband was trying to teach me? Why didn’t he just say that?’”

No competition, no pressure, no hi-erarchies, and the chance to hang out with only other women – this, Kleinkauf says, is why Women’s Flyfishing contin-ues to appeal to female executives who are anxious to find ways to get out from behind their four office walls.

“I caught the biggest fish, I caught the most fish – you almost never hear women say that,” Kleinkauf says. “Women cheer each other on rather than being jealous and competitive. The competitiveness is gone.” ❑

A client and Women’s Flyfishing Owner Cecilia “Pudge” Kleinkauf (right) show off a fly fishing catch.

of Alaska Inc.

Love your job?

✦


Fatal Attraction

She seemed like any other employee, but she wasn’t. She was an employer’s worst

nightmare. Within a three-month period, four employers called me reporting run-ins with “fatal attraction” employees. In each case, the story plays out like a television drama.

Said one, “This employee literally turned on me. We’d had a good work relationship and I’d pretty much allowed her to define how she’d handle her office-management job. I trusted her with everything. Then, when she didn’t get her way on a minor matter, she turned it into a royal battle. Suddenly I could do nothing right. I was the worst manager she’d ever seen. We agreed she’d leave, but she begged to have two last weeks here. What I didn’t know until later was that during those weeks she copied every file and every disk. She later concocted a bogus lawsuit with the material she stole.”

Said another, “It was pure vengeance. I couldn’t get her out of my life. She’d been my assistant for a year, and done a good job, but I needed to expand my business and she couldn’t handle any other employees in her ‘space.’ When I told her she had to work with a second employee, she created an ugly scene and resigned. Then things got weird. It was as if she became obsessed with me. She called every former employee I’d ever supervised to see what ‘patterns’ she could find. She even followed my car when I drove home from work.”

Although none of the four managers who called me agreed to be identified or taped, all agreed to answer questions. After conducting hour-long interviews, I learned each scenario shared similar features.

In each case, a single, attractive female employee with good job skills and few non-work interests worked for a charismatic man-ager. In each case, an intense, productive work relationship founded on mutual support became “a little too close” until it ended with a pivotal event that the employee considered a betrayal.

Each situation contained an element of perceived “possession.” Said one employer, “This employee seemed to feel she ‘owned’ me in some unhealthy way. When I didn’t do what she wanted, she got really cold for a day or two.”

Said another, “She acted as if I was obli-gated to act as she dictated.”

Said a third, “She obsessively criticized any other employees who were loyal to me. She drove other employees away.”

According to each manager, they’d ignored initial trouble clues. Said one, “I was uneasy about how much time and energy she needed from me. At the same time, I was so grateful for everything she did that I felt I owed her that time. It wasn’t until later I realized her needs were out of line.”

Said another, “She was obsessed with her physical appearance. Even though she worked long hours, she exercised for at least three hours daily. She dressed exquisitely well, yet occasionally showed up in an outfit that was risqué.”

Said a third, “She vacillated between judgmental and servile behavior toward oth-ers. She was hard working but a touch ‘off’ around others.”

If you would like to avoid starring in a made-for-television workplace drama, try these guidelines.

INSTINCT – HEAR IT AND MOVE FAST

Trust your instincts. If you feel uneasy about an employee, investigate. While most suc-cessful managers possess a keen intuition, the ones who called me reported they hadn’t listened to their intuitive feelings that things were soured beyond redemption. Instead, absorbed in other business matters, they’d looked the other way.

Says psychologist Tom Robinson, “Ask questions from the beginning of a potential

problem. Don’t wait for a major deterioration. Uneasiness needs to be discussed.”

Delay can cost managers money, the loss of crucial files or other employees – and sleep.

TOO MUCH OF A GOOD THINGExercise caution when you supervise an employee for whom personal and work life becomes totally meshed. While initially an employee’s excessive overwork benefits an employer, such a situation may contain the seeds for later disaster. An employee with no life other than work may try to get all his or her personal needs met at the office. When these needs aren’t met, the employee may feel betrayed and hold the employer accountable.

An obsessive work focus can contain the side of violence. If work is the only calm in the storm of an otherwise lonely or unstable life and the employee’s and employee’s “life” is threatened or taken away, this undermines the very essence of the employee’s identity and the employee or ex-employee may resort to violence.

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Possession becomes obsession

Lynne Curry

HR MATTERS BY LYNNE CURRYHHH

REMEMBER, ANY EX-EMPLOYEE WITH A COMPUTER CAN SUE

Remember that any ex-employee with a com-puter and an attitude can sue. Follow employ-ment laws to the letter. While termination may be the only way to end an employee relation-ship containing revengeful or obsessive-com-pulsive characteristics, if the termination isn’t done in a letter-perfect manner, it results in the ex-employee’s revenge mechanism.

Because Alaska laws require employers to operate in good faith and fair dealing, manag-ers should follow consistent and fair steps when terminating any employee. When dealing with a “fatal attraction type” employee, remem-ber your employee may know those policies better than you, and may be looking for one slight careless mis-step to exploit. Before firing the employee, document in writing the actions of the employee that justify the termination.

CANCEL LAST TWO WEEKSIf your termination policies now require you to give two weeks notice, consider a change. If you have objective reasons to terminate a genuinely vengeful employee, you may want them out of the office immediately. Establish a policy allowing you to pay the employee in-stead of termination notice. Once the employee is out of the building, change your locks and your computer passwords. If you have a remote access computer network, modify it.

OTHER SAFEGUARDSEstablish a policy that prohibits employees from removing confidential documents from company premises and provides for ter-mination for violations of the policy. If the ex-employee files a lawsuit protesting termi-nation, and the employer learns that the ex-employee violated the policy, the employers

policy may limit what the ex-employee can use.

DON’T BECOME DEAD STATISTICFinally, don’t assume the situation won’t get worse, and fast. Employers dealing with obses-sive ex-employees or employees need to take action immediately. If you feel the police need to be called, do so.

Would you rather not become the target of an obsessive former employee? Listen to your intuition – if a situation doesn’t feel right, it often isn’t. If you sense a working relation-ship beginning to sour beyond redemption, ask questions. Exercise caution in any work situation that breeds unrealistic expectations. If you sense, the potential for violence, take precautions. Learn and operate according to the letter of all employment laws – so that if an employee becomes vengeful, you’ll be able to protect your rights. ❑


About the AuthorDr. Lynne Curry runs an Alaska-based management consulting fi rm with 3,500 clients in 14 states and three countries. Her company specializes in management training and provides HR on-call services to clients. Her team includes a J.D.

(attorney), an MPA (Master in Public Administration) and an SPHR (Senior Professional in Human Resources). For details, check out www.thegrowthcompany.com or call Lynne, Andy or Jennifer at 907-276-4769.

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Alaska Environmental Power

Mike Craft, part owner of Alaska Environmental Power (AEP), came to Alaska in 1981 from

Virginia with his wife Kathy. With $16 dollars between them, they drove into Delta Junction and flipped a coin: Would it be Anchorage or Fairbanks? Fairbanks won. At first, Craft worked as a line cook and sous chef, then moved into construction.

The oldest of five in a military fam-ily, he’s lived across the United States, in Germany and Okinawa. While here, Craft’s family flipped homes every two years, eventually purchased tracts of land for subdivisions, developed a gravel pit and bought excavation equipment. Craft figures he has re-corded a dozen subdivision plats, and built dozens of houses and more than 10 miles of roads

For several years, he’s studied the Alaska energy market and renewable energy. Given his construction back-ground, developing a 24-megawatt Delta Junction wind-farm project wasn’t such a stretch.

He credits his success to his family and in part to his two Fairbanks busi-ness partners, Richard Clymer and Marvin Hall. He says he also garnered substantial support from Sen. Mark Begich and his staff in resolving Fed-eral Aviation Administration issues re-lating to the Alaska military complex. Craft also appreciates the Army and the Air Force for being a part of the environment-impact solution facing Fairbanks and the Interior.

ABM: How’s the view from the top at AEP? Craft: I am concerned about the quality and costs of living and work-ing in Alaska. Fairbanks has for at least 10 years failed to meet the clean air standards of the Environmental Protection Agency. We have done a poor job of securing future energy resources in Alaska. We are facing

a 10-year planning gap, with no real sustainable energy resources in sight, such as gas and hydro power or clean coal. My role is to be part of the solu-tion. By putting as much as 20 percent (174 MW) wind power on the Railbelt grid (870 MW), we can have stable rates and good jobs. My family lives in Alaska and I’d like them to stay.

ABM: How have economic/environmental challenges affected AEP’s efforts? Craft: The impacts of substandard air quality in the Fairbanks area have strengthened the need for renewable energy development, and the EPA has forced the local government to begin to address the issue. With the high avoided cost of fuel and electricity, in conjunction with the 30 percent capital reimbursement opportunities offered through the federal stimulus pack-age, it is possible to compete with the avoided cost of diesel-generated elec-tricity. Golden Valley Electric Associa-tion (GVEA) currently produces 60 percent (137 MW) of power with fuel oil.

ABM: Share some community successes and primary obstacles.Craft: The Sustainable Natural Alter-native Power farm in Healy has proven our capability of developing renew-able energy on the Railbelt grid. It has been producing electricity for two-and- a-half years, leading to development of the Delta Junction wind farm. AEP has two turbines, totaling a megawatt, on a 320-acre plot there. Our local util-ity, GVEA, has developed an experi-mental power-sales agreement for the 1 MW on line now. The Alaska Energy Authority was instrumental in award-ing a matching grant to move forward with the 900-kW EWT (Emergya Wind Technologies) turbine. Success led AEP to take formal steps toward a 24-MW wind farm, with completion planned in 2011.

ABM: In the renewable energy debate, what’s most at risk? Craft: Besides the air quality in Fair-banks, sustainable lifestyles and stabi-lized power rates; also, the creation of hundreds of jobs. We can’t continue to produce power in the Interior solely with hydrocarbons and expect to ex-pand and enhance our community.

ABM: How would renewable energy use affect power rates here?Craft: It would stabilize rates in the short term and eventually lower rates.

ABM: What are your other enterprises?Craft: We operate a gravel pit, are involved with a gold-mining venture and have several real estate projects. We are developing emerging tech-nologies relating to renewable energy production using tidal power, and also a new battery system. We also are looking at several other wind sites across Alaska. ❑

Mike Craft on site as the foundation is being put in for a wind turbine in

February 2009.

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Mike Craft

BY PEG STOMIEROWSKI


SOUTHEAST ALASKA STATE FAIRHAINES – JULY 29-AUG. 1

WWW.SEAKFAIR.ORG

The state fair in Haines combines food, contests and critters in the dramatic setting of mountains and coastline.

“The Southeast Alaska State Fair offers a summer cultural convergence that draws thousands from Alaska and the Yu-kon each year,” said Kelly Hostetler, fair executive director and events coordinator.

About 11,000 people attended the fair last year. Attendees come from the Haines area, Skagway, Juneau and White-horse, Yukon Territory, Canada.

But Southeast Alaska fair-goers trek to the venue via dif-ferent routes than their other Alaska counterparts.

“Much of our audience is rural, with visitors traveling to Haines via the Alaska Marine Highway, the Haines Highway or the two Bush air carriers,” Hostetler said.

The Southeast fair has been a social draw and seasonal highlight for more than 40 years, Hostetler said.

The 2010 fair in Haines will feature a half-marathon trail race, new food vendors, mechanical bull rides and musical entertainment. The smaller-scale of the Haines fair cultivates its regional flavor.

“Without the midways and commotion of big festivals, there’s room in Haines for fair-goers to breathe and try to

take it all in: music, arts and crafts, logging contests, food booths, children’s stage and carnival, puppet shows, low-stress rides, animals and sporting events,” Hostetler said.

TANANA VALLEY STATE FAIRFAIRBANKS – AUG. 6-14

WWW.TANANAVALLEYFAIR.ORG

The Tanana Valley State Fair in Fairbanks is the state’s oldest fair, marking its 79th anniversary this year, and the northernmost state fair in the nation.

“It’s a pretty traditional, down-home kind of fair,” Car-nahan said.

Organizers are spotlighting Interior-based entertainers and artists for the fair, rather than drawing national perform-ers. Old-time contests also are on tap this year, including bubble-gum blowing contests.

“They were a huge hit last year,” Carnahan said. Fair planners watch U.S. trends closely and try to include

popular events like food and cooking shows, but Carnahan also aims to schedule longtime favorites.

“What we’re trying to do is breathe excitement into old traditional events like a bake-off” where a stove was the grand prize, she said, recalling a past contest.

More than 100,000 people attended the 2009 Tanana Valley fair. Fairbanks residents treasure the fair, planning

ALASKA TH IS MONTH BY NANCY POUNDSAUGUST

1

State fair food – from powdered-sugar elephant ears to savory gyros – indulges the palate. Renewing friendships and etching family memories satisfies the heart.

August marks state fair season, with the larger events set for this month. Alaska has nine state fairs held every summer in Copper Center, Delta Junction, Fairbanks, Haines, Kodiak,

Nenana Valley, Ninilchik, Palmer and Salcha. “All the fair (organizers) get together once a year and help each other out,” said Randi Carnahan, general

manager of the Tanana Valley State Fair Association. For example, organizers ensure fair dates don’t overlap since each event relies on shared services like the

carnival, she said. Regional fairs will conduct Alaska’s Got Talent competitions and send winners to the finals at the Alaska State Fair in Palmer to compete for the $5,000 first prize.

Alaskans Savor State Fair Flavors

Four big events in August celebrate community spirit

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Eris Rodgers enjoys the bumper cars in her “fair hair” at the Alaska

State Fair in Palmer.


their two-week vacations around fair dates or just popping in during lunch hour, Carnahan said.

KENAI PENINSULA STATE FAIRNINILCHIK – AUG. 20-22

WWW.KENAIPENINSULAFAIR.COM

Organizers at the Kenai Peninsula State Fair in Ninilchik are bringing back the popular Backwoods Girl competition this year. Alaska women will demonstrate skills in fire-building, wood-cutting, water-hauling, egg-frying and changing the baby’s diaper. The winner’s prize this year is a chainsaw, said Katie Schollenberg, fair office assistant.

Organizers are planning new children’s events for the mini stage, including story time, acting workshops and building classes. A few more experiment stations will be added to the Sight, Sound and Motion exhibit, a hands-on children’s science center.

The new Matti’s Farm will feature interactive agri-cultural exhibits and demonstrations – imagine milking cows, collecting eggs and harvesting vegetables. The farm is dedicated to Matti Martin, a boy who was killed in an accident last year.

Last year about 8,100 people attended the Kenai Pen-insula fair.

The fair features a parade, rodeo, 5-kilometer beach run,

arm-wrestling competition, hula-hoop contest and musical entertainment. The pig races are another fair highlight.

“Of course we will be running a new crop of racing pigs, and they are already looking like the best we’ve seen in several years,” Schollenberg said.

“The small, home-grown feel of our fair makes us unique,” she said. “We don’t do things on the grand scale that some of the larger fairs do, but instead focus on our agricultural roots, great local entertainment and good, clean, family fun.”

ALASKA STATE FAIRPALMER – AUG. 26-SEPT. 6WWW.ALASKASTATEFAIR.ORG

This year fair-goers can plan their fair-food strategy with an online food guide. The 2010 Palmer fair will offer more than 70 food vendors, including three new entries, according to Dean Phipps, marketing director. The Snak Shack will sell pocket bread with Thai or Mediterranean filings. Ed’s Eats showcases barbecue-glazed chicken wings and salmon chowder. Why Not and What Not will offer various pronto pups. Original Gourmet Ice Cream Bars plans to sell a new item: chocolate-covered bacon.

Organizers attracted several national entertainers this year, including Kenny Rogers, Howie Mandel, Boys II Men, Ricky Skaggs and 38 Special. ❑


• • • • • • • • • A N C H O R A G E • • • • • • • • •

1 to 15 Art PotpourriHelp your summer visitors find beautiful, Alaska-made treasures or treat yourself at this annual juried art sale. The Anchorage museum hosts a revolving roster of Alaska artists. For more information, phone 907-929-9262 or visit www.anchoragemuseum.org.

1 to 29 Port of Anchorage ToursSundays 11 a.m. to 3 p.m. Bring your friends and family to the port for a free tour and hot dogs. A bus will depart every 30 minutes from the Alaska Railroad corporate office, 321 W. Ship Creek Ave. For more information, phone 907-343-6230.

4 to 7 Music MachineA fast-paced musical revue featuring 100 local children, ages 6 to 18. Colorful costumes, high-energy dancing, lots of great voices and smiling faces. Features the talented Dance Machine kids. For more information, phone 907-263-2787 or visit www.myalaskacenter.com.

• • • • • C O R D O V A • • • • •

5 to 14 Prince William Sound Science CenterWorking with local marine scientists and educators, students will participate in hands-on, science-based activities that increase their knowledge of coastal and marine ecosystems. For more information, phone 907-424-5800 or visit www.pwssc.org.

• • • • • • • F A I R B A N K S • • • • • • •

9 Summer Session & Lifelong LearningAnn Knowlton of UAF’s Alaska Summer Research Academy presents “Squidding Around: Adaptations to Life in the Ocean,” an evening discovering how squid are suited to life in the oceans. Begins at 7 p.m. in the Reichardt Building, room 201,UAF campus. For more information, phone 907-474-7021 or e-mail [email protected].

• • • • • • • H O M E R • • • • • • •

6 The Germany RetrospectiveComposed of a variety of media, including (but not limited to), original paintings, sketches, pho-tographs, prose, poetry, video and audio from the Homer High School Concert Choir/Kenai Peninsula Community Chorus trip to Germany, Austria and the

AUGUST EVENTS CALENDAR

2010-2011

We Make Pigs Fly.

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Czech Republic. Homer Council on the Arts, 355 W. Pioneer Ave., Suite 100. For more information, phone 907-235-4288 or visit www.homerart.org.

• • • • • • • J U N E A U • • • • • • •

13 to 15 64th Annual Golden North Salmon DerbySpend the weekend in pursuit of kings, cohos and the chance to compete for the prizes generously donated by local businesses and individuals. For more information, phone 907-321-8000 or visit www.goldennorthsalmonderby.org.

• • • • • • • K E N A I • • • • • • •

28 14th Annual Soup Supper & AuctionEnjoy gourmet soups in hand-crafted pottery bowls created by local potters. Proceeds go to Empty Bowl and the Kenai Peninsula Food Bank. Begins at 5:30 p.m. at Kenai Central High School. For more information, phone 907-262-3111 or visit www.kpfoodbank.org.

• • • • • • • K E T C H I K A N • • • • • • •

6 to 8 Blueberry Arts FestivalA Ketchikan original, featuring more than 70 arts and craft vendors, food, games, battle of the bands contest, Gigglefeet Dance Festival, special juried art exhibition, slug races, pie-eating contests and more. For more information, phone 907-225-2211 or visit www.ketchikanarts.org.

• • • • • • • T A L K E E T N A • • • • • • •

6 to 8 Bluegrass & Music FestivalAlaska’s greatest camp-out celebrates 29 years with more Bluegrass bands than before. Bring the family, as there are new campgrounds to accom-modate the more conservative crowd. For more infor-mation, phone 907-488-1494 or visit www.talkeetnabluegrass.com.

• • • • • • • V A L D E Z • • • • • • •

1 to Sept. 11 Celebrating Valdez ArtistsThis exhibit features artwork in all mediums by local Valdez artists. The museum has created a turn-of-the-20th-century parlor to enhance the exhibit and to add historical interest for the visitors. For more information, phone 907-835-2764 or visit www.valdezmuseum.org. ❑

AUGUST EVENTS CALENDAR


Northwest Arctic Borough

Progressing through unity

BY TRACY BARBOUR

REG IONAL REV IEWRR

The Northwest Arctic Borough is one of the most remote and sparsely populated areas in the

state. The second-largest borough in Alaska, the Northwest Arctic Borough spans about 39,000 square miles along the Kotzebue Sound, Wullik, Noatak, Kobuk, Selawik, Buckland and Kugruk rivers. The borough’s climate is marked by long, cold winters and cool sum-mers; temperatures range from -52 to 85 degrees Fahrenheit.

Communities in the Northwest Alaska Borough aren’t connected by roads. Consequently, the main modes of transportation are by plane, snow machine, four-wheeler and dog sled.

During winter, some people travel in vehicles across improvised ice roads.

The Northwest Alaska Borough has been occupied by Inupiat people for at least 10,000 years. It’s comprised of 11 communities: Ambler, Buckland, Deering, Kiana, Kivalina, Kobuk, Kot-zebue, Noorvik, Selawik, Shungnak and Noatak. Kotzebue, with about 3,100 residents, is the borough’s largest city and the hub of Northwest Alaska.

Kotzebue lies on a sand spit at the end of the Baldwin Peninsula in the Kotzebue Sound where the Noatak, Kobuk and Selawik rivers end. Kotze-bue Sound was named after Otto von Kotzebue, who “discovered” it while

exploring on behalf of Russia in 1818. The site was a trading location for area Natives for hundreds of years. In 1899, a post office was established in Kot-zebue. The local name for the site is Kikiktagruk, which means “almost an island” in Inupiaq.

BOROUGH’S ECONOMY STEADYMajor industries that drive the North-west Arctic Borough are government, health care and mining. And, as with many other remote places in Alaska, the residents depend on subsistence hunting and fishing to augment their wage and salary jobs. The area’s larg-est employers are the Northwest Arctic Borough School District, Maniilaq As-sociation, which operates the Maniilaq Health Center in Kotzebue, and Red Dog Mine.

Alaska Department of Labor Econo-mist Alyssa Shanks describes the bor-ough’s economy as fairly stable, with no big growth and no big declines. The borough’s future movements, in terms of jobs, she said are highly correlated to Red Dog and the Northwest Arctic Bor-ough School District. “Since it’s such a young borough, I don’t think that the school district is in danger,” she added.

The Northwest Arctic Borough is

Northwest Arctic Borough at a GlancePopulation: About 7,400Key Contacts: Borough Mayor Siikauraq Martha Whiting, Kotzebue Mayor Eugene Smith, and NANA Regional Corp. President and CEO Marie GreeneMain Industries: Government, health care and mining Major Hospitals: Maniilaq Health Center Schools: About a dozen schools are located throughout the borough, and both the University of Alaska and Alaska Technical Center operate campuses in Kotzebue. Airport: The Ralph Wien Memorial Airport in KotzebuePort: The borough’s largest city, Kotzebue, does not have a natural harbor. Deep-draft vessels must anchor about 15 miles out, and cargo is transported to the docking facility.

The river system ties the NANA region together. The Village of Selawik is located on the 140-mile-long Selawik River.

Courtesy of NANA Regional Corporation/Photo by Brian Adams

the second-youngest borough or census area in the state. According to Shanks, the 2008 median age of population in the borough was just under 23 years old. The young borough population translates to higher birthrates. In 2008, the borough’s birthrate was the highest of all Alaska boroughs and census areas at 29.1 births per 1,000 residents. In comparison, the birthrate for Anchor-age Municipality was 15.8.

Despite the borough’s high birthrate, its population has remained relatively constant from 2001 to 2009. The reason it hasn’t grown significantly could be due to the lack of economic opportunity in the area. “If there were loads of jobs, I think you would see more people mov-ing there,” Shanks said. “But it’s also a harsh environment, so even if there were an explosion of jobs, you might find a situation more like on the North Slope, where people work there, but don’t live there.”

The Northwest Arctic Borough is renowned for its extremely high cost of living. In Kotzebue, for ex-ample, the cost of living is 61 percent higher than in Anchorage. Because of its northern location, there is only a 100-day period that barges can enter or leave Kotzebue’s docks. The short shipping season translates into higher costs for heating oil, gasoline, gro-ceries and other goods for the entire region. Most goods and services pass through Kotzebue on their way to the borough’s other 10 communities.

The borough is also facing a scar-city of payroll jobs, particularly in the remote villages. The lack of payroll jobs causes the borough to have a high percentage of transfer payments, in-come received for which no services are performed. Transfer payments – like the Alaska Permanent Fund Dividend, retirement checks, Social Security checks, Medicare benefits, family assistance and food stamps – made up 32 percent of the borough’s personal income in 2007, compared to 16 percent for the state overall, ac-cording to Shanks.

The lower job opportunities are reflected in the borough’s unemploy-ment rate, which typically runs much higher than the statewide rate. The borough’s preliminary unemployment rate for April – the most recent figure

available – was 14.5 percent. In con-trast, the statewide unemployment rate for April was 8.5 percent.

RED DOG DEVELOPMENTPROGRESSES

Red Dog Mine – the world’s second-largest zinc and lead mine – provides hundreds of mining jobs to the borough. In May, the mine received permission to move forward with the development of its Aqqaluk Deposit. The develop-ment is vital for the region, as ore from the Aqqaluk Deposit is needed to sup-plement ore from the Main Deposit, which is almost depleted.

Red Dog Mine is operated by Teck Alaska, a U.S. subsidiary of Vancouver Canada-based Teck Resources Ltd. The mine, located about 90 miles north of Kotzebue, is situated on land owned by NANA Regional Corp. Inc. NANA – whose name was derived from the Northwest Arctic Native Association – is one of 13 regional Native corpora-tions created under the Alaska Native Claims Settlement Act (ANCSA). It is the regional corporation for Kotzebue and the 10 other villages in the North-west Arctic Borough.

NANA Regional Corp. President and CEO Marie N. Greene expressed relief over receiving the green light for the Aqqaluk Deposit. Previously, there had been months of uncertainty surrounding the opening of the new deposit. “This was a major concern, and we are grateful we are able to proceed,”

she said. “Overall the most important thing that has come out of all this is we do take responsible resource develop-ment seriously. We don’t want to take any shortcuts.

“We are excited to move forward with this next phase at Red Dog Mine,” Greene said in a May 20 press an-nouncement. “NANA and Teck have worked very hard to ensure that the social, cultural, environmental and economic benefits of Red Dog will remain in place for our people and our region.”

Red Dog is a critical source of eco-nomic stability and growth for the Northwest Arctic Borough. It creates high-paying, steady jobs that help to fund local government, support schools and sustain important so-cial and cultural programs that help preserve the Iñupiat way of life for NANA’s more than 12,000 sharehold-ers. Nearly 60 percent of the mine’s more than 500 employees are NANA shareholders, and many NANA sub-sidiary companies provide millions of dollars worth of goods and services annually to the mine.

From a broader perspective, Red Dog also adds tremendous value to Alaska. Due to the revenue-sharing provision of ANCSA, profits from Red Dog benefit other regional corporations throughout the state. “Red Dog is to the region like Prudhoe Bay is to Alaska,” said NANA Vice President-Resources Lance Miller.


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Iñupiat culture plays a huge role in the lives of the residents of Northwest Alaska. Here children from the Noorvik Aqqaluk School learn traditional dances.


MORE EXPLORATION EFFORTSUNDER WAY

NANA is also engaging in a variety of other efforts to develop its resources in the Northwest Arctic Borough. This summer, the corporation is doing some exploratory work for gold and base metals, as well as reconnaissance work for coal, Miller said. NANA also has an agreement with an independent oil and gas company to drill some explor-atory wells in the region.

“As far as the mineral work, the re-sults could come soon, in about a year,” Miller said. “As far as the oil and gas work – that depends on the funding. With luck and funding, in the next few years, there could be a well drilled.”

In addition, NANA subsidiary WH-Pacific is under contract with the Kot-zebue Electric Association to install two larger turbines that will expand the Kotzebue Wind Farm. In partner-ship with the Northwest Arctic Bor-ough and the State of Alaska Energy Authority (AEA), WHPacific is mov-ing forward with final assessments for wind power prospects in Buckland and Deering. Once research is complete,

information will be presented to the communities, so the village can decide how they would like to proceed. At Red Dog Mine, meteorological towers are already in place, with three differ-ent sites monitoring for wind. Starting in the fall, further resources will be-come available to explore possibilities for a transmission and energy corridor between Kivalina and Red Dog.

WHPacific is also exploring several hydropower and geothermal projects. One of the projects – a partnership that includes Alaska Village Electric Coop-erative (AVEC) and AEA – involves field work studying the potential of hy-dropower in the Kobuk River system. Pre-feasibility reports have already been done, as have village meetings in Shun-gnak, Ambler and Kobuk. This summer, the team is scheduled to work on map-ping, fisheries, a desktop archeological review (of historical documents), and hazard and geotechnical studies.

ENERGY CONSERVATIONA KEY CONCERN

As part of an Energy Efficiency and Conservation Block Grant, NANA is

NANA Regional Corporation works with local energy groups as well as tribal, State and federal agencies to

help mitigate the energy crisis in Rural Alaska. Wind farms, like the one in

Selawik, help reduce the cost of fossil fuel energy for villagers.

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The Salvation Army Anchorage Corps Community CenterA community center of exceptional quality where every person, regardless of social or economic

status, is given both hope and opportunity to reach his or her full potential, physically, emotionally, educationally, culturally and spiritually.

Thanks to our supporters who have already contributed to this project:Block Foundation Glen Chambers First National Bank Alaska Nick & Lauretta Pepperworth

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FOR THE NEXT GENERATIONB U I L D I GN

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also involved in a program to promote the efficient use of energy. WHPacific is conducting energy audits in nine of the 11 NANA villages this summer. “We’ve been going to the villages and collecting data to figure out how we can minimize and conserve energy,” said NANA Project Manager Sonny Adams. “We came up with all the concepts to find out which renewable energy is ap-plicable to which building.”

Each village is deciding which build-ings to audit, while tribal councils and leaders will determine which upgrades will be made. The program is expected to be completed in about a year, Ad-ams said.

As a corporation, NANA’s primary goal is to maintain a subsistence prior-ity to the region and create economic opportunities for its shareholders. Often economic benefits receive a great deal of emphasis, Miller says, but it is health services, education and other things that make the region sustainable for the future. “Sometimes people just think about the dollars,” he said. “I think NANA has done an awesome job rolling those dollars into

health care, education and other ben-efits for the region.”

Adams is a prime example. Thanks to NANA and Red Dog, he was able to complete college and receive a degree in engineering.

TEAMWORK AND CONSULTATION CRITICAL TO SUCCESS

NANA is involved with numerous proj-ects and companies, Miller said, but it’s all about the people and the region. “It’s about balancing development, subsistence lifestyle and culture, and this requires input from the villages,” he said. “We want everybody’s view, so there’s consensus in moving ahead.”

Consulting with the vil lages, Greene says, is an essential step. “Consultation is in everything that we do,” she said. “We must continue to practice consultation.”

NANA also focuses using team-work. The corporation prides itself on its unique ability to work with different entities. Long-range planning for the future is also key. That’s why being a member of the Northwest Arctic Lead-ership Team is so important to Greene.

The group represents a collaborative team formed by various regional orga-nizations, including NANA, the North-west Arctic Borough School District, Maniilaq Association and Northwest Arctic Borough.

The Northwest Arctic Leadership Team concentrates on identifying and prioritizing regional needs, whether it’s alternative energy, jobs or edu-cation. The members represent one voice when presenting issues to the governor, federal agencies or Wash-ington, D.C. Teamwork has been a key factor in the success of the North-west Arctic Borough, according to Greene. Members of the team work together to maximize resources and minimize duplication, promote strat-egies through grassroots efforts, ex-amine various regional issues, and recommend policy and resource al-location. “We have a region that really works together,” Greene said. “We have to come together for the benefit of the people that we serve. What has made us accomplish what we have today is the unity of working together in our region.” ❑

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One People

One Region

One Future

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SITNASUAK NATIVE CORP.Sitnasuak Native Corp. (SNC), the village corporation for Nome, with offices in Nome and Anchorage, recently announced corporate appointments.

William E. “Bill” Humphries, chief operations officer, brings more than 25 years of business experience to SNC with a focus in program management for federal and state contracting programs. Humphries’ previous association with other Alaska Native corporation subsidiaries resulted in significant 8(a) and competitive contract growth for the organizations.

Lenn Doran, chief financial officer, joins SNC with 35 years of financial experience in diverse multi-state and multi-national companies holding executive leadership positions as CFO, vice president and treasurer.

Larry Sullivan, human resource director, has more than 25 years human resources experience in recruiting, benefits and compensation, labor and employee relations, training, safety, risk management, continuous process improvement and change management.

Denise Burger, executive administrator, comes to SNC with 16 years experience in executive office management, having served as the director of the Anchorage mayor’s office under two mayors, the director of the University of Alaska Anchorage Office of the Chancellor, the director of operations at Rasmusen Foundation, and as the senior executive administrator at Akmaaq LLC.

SNC owns and operates numerous businesses and properties in Nome and has multiple operations throughout the United States and Puerto Rico.

FLINT HILLS RESOURCES ALASKA

Mike Brose was ap-pointed vice president of Alaska operations and refinery manager of Flint Hills Resources Alaska’s North Pole refinery. Brose oversees operations at the 220,000 barrel-per-day crude oil refinery. In 2009, Brose transferred to the North Pole refinery from the company’s plant in Rosemount, Minn.

NEW YORK LIFEINSURANCE CO.

Glen Bobo joined the Anchorage office of New York Life Insurance Co. as an agent. He recently served as director of wealth management for The Wilson Agency LLC.

FIFTH THIRD LEASING CO. Steve Isaacson was chosen as equipment leasing manager for Fifth Third Leasing Co.’s northwest U.S. region, including Alaska, Idaho, Montana, Oregon and Washington. Isaacson pre-viously served as national marine sales leader for GE Capital Solutions. Fifth Third Leasing Co. is part of Cincinnati-based Fifth Third Bancorp.

ADAMS & ASSOCIATES Courtney Bliss was hired as manager of outside sales and business development for the Anchorage office of Adams & Associates. Bliss has more than six years of sales, customer service and recruit-ing experience.

BETHEL NATIVE CORP. Bethel Native Corp. elected three directors at its annual shareholders meeting: Robert Lekander, Gregory Hoffman and Robert Hoffman. Officers were elected to the board: Lyman Hoffman, chairman; Mary Kenick; vice chair-woman; Eugene Peltola Jr., treasurer; Louise Charles, secretary; and Gregory Hoffman Sr., assistant secretary.

PRINCE WILLIAM SOUND REGIONAL CITIZENS’ ADVISORY COUNCIL

The Prince William Sound Regional Citizens’ Advisory Council elected officers for its board. They are: Walter Parker, president; Dorothy Moore, vice president; Sheri Buretta, treasurer; and Thane Miller, secretary. The members at large are Blake Johnson, Kenai Peninsula Borough; Pat Duffy, Alaska State Chamber of Commerce; and Cathy Hart, Alaska Wilderness Recreation and Tourism Association. Two new board members were added: Rochelle van den Broek repre-sents the city of Cordova, and Paul Selanoff represents the community of Chenega Bay.

DESIGN ALASKA John Rowe joined Design Alaska of Fairbanks as a landscape architect. The firm added landscape architecture services earlier this year. Rowe has eight years of experience designing landscapes in Alaska and another 14 years of experience in Michigan. His Alaska work includes the first two phases of Fairbanks’ new Tanana Lakes Recreation Area, tourist viewing areas at the Large Animal Research Station, – known as the Musk Ox Farm, – and a master plan for the Georgeson Botanical Gardens at the University of Alaska Fairbanks.Brose


KEYBANKDelores Siah was promoted to assistant vice president of retail for KeyBank in Alaska. She is responsible for sales, service and leadership in 14 KeyBank branches in Alaska. Siah has more than 11 years of retail banking experience. She joined Keybank in 2000 as a teller.

ALASKA TRUCKING ASSOCIATION

The Alaska Trucking Association elected officers at its annual meeting in Anchorage earlier this year. Officers are: Lisa Marquiss, Carlile Transportation Systems Inc. of Anchorage, pres-ident; Art Reed, Sourdough Express Inc., first vice president; Scooner Rice, NC Machinery Co., second vice president; and George Lowery, Totem Ocean Trailer Express, secretary/treasurer. All officers are based in Anchorage. New board members are Lowery and Scott Hicks, Alaska West Express.

STOEL RIVES LLPJohn Evans joined the law firm of Stoel Rives’ Anchorage office as part of the litigation group. Evans handles real estate and construction issues, primarily for oil and gas industry clients. Evans also worked as an asso-ciate at Sonnenschein Nath & Rosenthal LLP in St. Louis, Mo.

WELLS FARGOMichael Scott was a p p o i n t e d s e n i o r business relationship manager and vice pres-ident for Wells Fargo’s A laska Commerc ia l Banking Group. Scott has seven years o f financial services expe-rience as a risk analyst and investment bank-ing analyst.

NORTHRIM BANKGary Conatser has joined the Northrim Bank lending staff in Fairbanks. Conatser is senior vice president, commercial loan manager and is responsible for man-aging lending activities in Fairbanks and is a member of the Northrim’s sen ior management

group. He comes to Northrim with more than 25 years of financial institution experience. Conatser is an alumnus of the University of Louisiana Graduate School of Banking and also completed the American Bankers Association School of Bank Marketing. He is a Rotarian, serves on the Fairbanks Chamber of Commerce Membership Committee, is the board vice pres-ident for the Downtown Fairbanks Community Services and is president of the board of directors for the Downtown Fairbanks Association.

BETTISWORTH NORTH ARCHITECTS AND

PLANNERSBettisworth North Architects and Planners now provides landscape architecture and interior design services. Mark Kimerer and Jonny Hayes serve as landscape architects. Judie Bunkers and Abigale Kron handle interior design services. Kimerer and Hayes have 20 years of combined landscape design expe-rience. Bunkers has certifications from the National Council for Interior Design. Kron has experience in designing commercial office inte-riors, space planning and furniture selection.

STATE GOVERNMENTJesse VanderZanden and John Johansen earned the Certified Member designation from the American Association of Airport Executives. VanderZanden is manager of Fairbanks International Airport. Johansen is engineering, environmental and planning manager at Ted Stevens Anchorage International Airport.

Melissa Osborn earned the designation as Airport Certified Employee from the American Association of Airport Executives. Osborn is airport operations officer at Fairbanks International Airport. Airport officials report Osborn is the first Fairbanks airport employee to earn the designation.

Marc Luiken was appointed deputy com-missioner of aviation for the Department of Transportation and Public Facilities. Luiken recently retired as a U.S. Air Force colonel after a 30-year military career. Luiken previously served as the vice commander, 11th Air Force, Elmendorf Air Force Base in Anchorage. ❑

Did someone in your company receive a promotion or award? Please submit information,

for possible inclusion in Right Moves, to [email protected]. Information received is

published, space available, two months after receiving the press release. Right Moves is

compiled by Nancy Pounds of Anchorage and sponsored by Northern Air Cargo.

Evans

RIGHT MOVES SPONSORED BY NORTHERN AIR CARGO

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Mining with Minimal Impact

BY VANESSA ORR

Industry seeks to become better environmental stewards


Leave it better than how you found it. In Alaska, that refrain is often used to encourage those

who enjoy the outdoors to make sure they leave no trace of their forays into the wilderness. What may be surpris-ing, however, is that the mining in-dustry also is beginning to follow this same tenet.

For many years, the industry left a large, and often indelible footprint,

on the landscape. Yet as mining has evolved, more and more companies have begun to embrace the idea of envi-ronmental stewardship – impacting the land, water and wildlife as minimally as possible, and in some cases, even im-proving the areas in which they work.

“I’ve been with the Red Dog Mine for 22 years, and I’ve seen the concept of environmental stewardship steadily evolve,” said Jim Kulas, manager,

environmental and public affairs. “The idea of taking care of the envi-ronment really escalated in the early 1990s, and it’s continued to grow. I think it’s a healthy view, and there is definite acceptance and recognition in the industry of the importance of being good environmental stewards.”

According to Tony Ebersole, Coeur spokesman, “producing and protect-ing” summarizes that organization’s operating policy. “Coeur emphasizes an environmental and safety focus, all while producing for the benefit of our shareholders,” he said. “Our culture is to provide the safest environment for our workers. Additionally, we can’t pro-duce without an unwavering commit-ment to environmental stewardship.”

“Environmental stewardship is more than a buzzword at Fort Knox, it’s how we do business,” says Lorna Shaw, community and government affairs manager, Kinross Fort Knox. “Through years of inspections and audits, we have shown our commitment to high envi-ronmental standards. Only one notice of violation has been issued to Fort Knox in the operating history of the mine, for an improperly labeled used oil container. Our outstanding record is a credit to the hard work, the com-mitment and the environmental ethic among the employees at Fort Knox.”

SUCCESS STORIESKulas cites the management of Red Dog Creek as an example of how a mine can make a difference. “Red Dog Creek runs through the middle of the mine’s ore body, and in its pre-mine history, it was polluted by metals leach-ing from natural deposits,” he said. “A baseline study document showed a high rate of fish mortality downstream. Fish would travel through the harm-ful toxicity of the water and be over-whelmed, resulting in fish kills.

ENVIRONMENTALSPECIAL SECTION

Aerial of Red Dog Port. The two large buildings at the top are concentrate storage facilities. Shipping is only done in the summer when the ice is gone so it has to be

stored the rest of the year. To the right of the buildings is the Port Road that connects the Red Dog Mine site to the port site. Trucks haul the

concentrate from the mine to the port using this road year-round.

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“When we started our operation, we put the creek into a manmade contain-ment system to protect it where it came through the mine area,” he continued. “We collect all site-impacted water, and treat and remove metals. The combi-nation of metal-free water and creek improvements has resulted in better downstream water quality. Now fish are spawning and rearing in that same stretch of creek.”

Red Dog staff are advised by a sub-sistence committee made up of elders from two local communities who pro-vide oversight and regular guidance. “We know the importance of running an operation with minimal impact on the environment,” Kulas said. “We op-erate in an area where there is a huge reliance on the subsistence harvest, including marine mammals, caribou and berries.”

The Fort Knox Mine, located in the Fish Creek drainage of the Fair-banks Mining District, also has made a positive difference on its environment. The mine is owned and operated by Fairbanks Gold Mining Inc. (FGMI), a wholly owned subsidiary of Kinross Gold Corp. “As a result of historic min-ing activity, the Fish Creek Valley suf-fered substantial habitat alteration,” Shaw said. “Several tributaries in the headwaters of Fish Creek were affected and fish access to Barnes and Pearl creeks had probably not existed for at least 10 years prior to development of the Fort Knox project.

“Although FGMI never mined in Fish Creek, the company completed extensive reclamation of pre-existing

placer mining disturbance as wetlands, created high-quality spawning grounds and habitat for native fish species, and improved the water quality of the Fish Creek drainage,” she said. “In 1993, a 10-year goal was established to create a viable Arctic grayling population in the water supply reservoir from fish trapped upstream of the dam. Through concurrent reclamation, the goal was attained only two years after the con-struction of the water supply reservoir. Wildlife use of the lower Fish Creek valley has also increased.”

Jointly with the Alaska Department of Fish and Game, Fort Knox received the prestigious Tileston Award in 2009 for the Fish Creek reclamation project, presented by the Alaska Conservation Alliance and the Resource Develop-ment Council to recognize projects good for both the environment and the economy.

Even when a mine doesn’t come to fruition, companies make sure the land is returned to its natural state. “On the exploration side of things, we’ve taken a different approach to protect the

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Kinross Fort Knox Community and Government Affairs Manager Lorna

Shaw pointing to the mill and adminis-trative facilities in a 1996 aerial photo

and describing changes that have occurred since the photo was taken.


environment by having all of our work supported by helicopters,” said Mike Heatwole, vice president, public affairs, The Pebble Partnership. “We build no roads or permanent infrastructure; when we’re done with our drill sites, they are immediately reclaimed. A year later, you’d be hard-pressed to find any evidence of where we were. This was a decision made early on. Even if a proj-ect doesn’t make it through all of the hurdles, we still require that its impact on the environment be minimal.”

“From a company perspective, en-vironmental commitment can be the difference between company success and failure,” Shaw said. “In order to continue developing and operating mines, we need to be sure we exhibit not only environmental stewardship, but also environmental leadership. We want to be the operator of choice. That’s a position that can’t be attained without a great record of environmen-tal performance.”

REGULATIONS AND REQUIREMENTSWhile many mines monitor the ways they affect the environment, there are also hundreds of State and federal rules and regulations they must follow. “It’s really important big mining operations have a system in place that allows them to manage all of the regulations,” Kulas said. “We counted, and there are 162 permits, agreements and bodies of regu-latory requirements we are required to follow. These 162 requirements have 6,000 related tasks, which total 26,500 things that we must do, including ev-erything from writing reports to collect-ing samples to making environmental observations. It’s a very extensive list.”

To ensure nothing slips through the cracks, the Red Dog Mine has an en-vironmental managing system. “We are an ISO140001-certified operator, which means our system meets all of the requirements of an ISO organization, which include supporting environmen-tal protection, preventing pollution and fostering improvements in environmen-tal performance.”

Red Dog also tracks any incidents that do happen, and issues alerts to make sure the company and its em-ployees are following through with corrective actions. “It’s a very robust system,” Kulas said. “Our intent is to

take the responsibility for being en-vironmentally sound and spread it throughout the work force; to put it into the hands of those people who are closest to each task, instead of having a satellite group manage it.” Training seminars are provided on-site for Red Dog employees, and if an individual needs to go outside for training, that is provided as well.

“When a new employee is hired at Fort Knox, in addition to comprehen-sive safety training, we provide training on our environmental procedures from things as simple as disposing of food waste in covered trash cans to what to do in the event of a spill,” Shaw said. “In addition, employees attend quarterly environmental training sessions.”

At Coeur, the company routinely performs internal and third-party envi-ronmental audits on its operating mines. “All of our operating plans include provisions that require environmental training for fisheries and wildlife pro-tection and management, spill preven-tion and response, and safety and water management,” Ebersole said. “Certain environmental training programs are offered at the mine on a regular basis, both at the site and by off-site confer-ences and trainers.”

INVESTING IN THE ENVIRONMENTOf course, none of this comes cheap. “Before opening Kensington, the mine was evaluated under three separate Environmental Impact Statements (EIS), each involving different oper-ating scenarios,” Ebersole said. “The final constructed alternative also re-quired about 35 separate permits to cover air, water quality, solid waste, water management, fish passage, wa-ter rights, housing, marine, transporta-tion – the list goes on. In total, about $30 million was spent in environmental and engineering studies, including the three major EISs. This included over 1,000 individual studies and designs.”

Adding to expenses are Kensing-ton’s three water-treatment plants, which cost about $12 million in capi-tal. “This amount does not include the cost of ongoing operating and moni-toring at the facilities for the life of mine and into closure,” Ebersole said. “It does not include the cost of the tailings-treatment facility, or all the

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storm-water detention and treatment facilities, or environmental personnel.”

In the last 10 years, Red Dog has spent $125 million on capital improve-ments to address environmental im-pacts and issues. “On water monitoring alone, we spend $3 million annually. Treating it and discharging it is another $10 million annually,” Kulas said. “This is significant, because it requires an op-eration have the wherewithal to do it. It has raised the standards for what it takes to be a successful mine in the U.S., as opposed to a political jurisdiction that does not have the same regulations.”

Mining companies must ensure their existing mines are environmentally sound and any new mine they open will adhere to the same high standards. “Opening a mine requires land, air and water disturbance,” Ebersole said. “For example, Kensington will impact or disturb about 190 total acres of land and habitat, which include timber, non-forest brush, musky wetlands, rock out-croppings and more. This disturbance requires immediate stabilization and interim reclamation to preclude run-off with high-suspended solids, given the 85-plus inches of average annual precipitation, which could adversely impact the local fishery. Our projects must meet all environmental standards from day one of construction.”

According to Ebersole, the Kens-ington project will require streams to be rerouted via newly constructed channels that must accommodate fish passes and storm-water design flows. Engineered facilities, including the three water-treatment plants, must be in place and fully operational in advance of startup. Air quality mitiga-tion measures, like chemical suppres-sants, must be applied to new roads from day one of construction and die-sel generators must be equipped with selective catalytic-reduction devices to reduce emissions.

“Environmental performance was important even in the planning stages for development of the mine,” said Shaw of the Fort Knox facility. “For example, the mill and shop facilities are located upstream of the tailing facility. The tailings storage facility (TSF) at Fort Knox is a zero-discharge facility, which means no water is released into the environment. Rather, any seepage

is captured through a water-collection system and returned to the TSF. The newly built heap leach facility was con-structed not only as a stand-alone zero-discharge facility, but also it is located upstream of the TSF.”

According to The Pebble Partner-ship, the Pebble prospect, located in Southwest Alaska, is currently in a pre-feasibility and pre-permitting research stage, and is conducting some of the most extensive environmental studies ever undertaken in Alaska. The Part-nership is an Alaska limited partner-ship between Anglo American PLC and Northern Dynasty Minerals Ltd.

“We are not yet at the stage where we’re ready for permitting, though we have made significant investments in environmental studies; approximately $120 million to date,” Heatwole said. “These studies, which mainly focus on water and fish, are looking at quality, quantity, service water, groundwater and seasonal fluctuations among other things to meet the high standards Alaska has when it comes to the environment.”

The mine will be required to meet more than 67 types of State and

federal permits, as well as a number of State and federally mandated en-vironmental requirements. More than a dozen State and federal entities will provide agency oversight.

By the end of the year, The Pebble Part-nership will take all of its environmental studies and turn them into an environ-mental baseline document that character-izes the area around the mine. “We will also be putting together a preliminary project plan that shows how we would mine and where the infrastructure would go, among other details,” Heatwole said.

The Pebble Partnership won’t be filing for a permit until 2011, after it hears from the communities around the region. “Right now, people are focused on the completion and rollout of the environmental baseline document and our preliminary plan,” Heatwole said. “Our CEO is committed to presenting the preliminary plan to the Southwest Alaska region for consultation before initiating the permitting process.

“There’s a good track record for larger mines in the state, and obviously, we want to be on a par with them in our environmental practices.” ❑


As local businesses become more attuned to the green economy, many are trying out new ways

to make their products and business practices more earth-friendly by re-ducing waste, recycling and curbing pollution. Alaska Waste is at the fore-front of innovative recycling efforts in the Anchorage area.

NEW PROGRAMSIn one of the bays at their Anchorage facility, a cylinder 32 feet long and 10 feet in diameter continually rotates at slow speed, converting waste into a rich organic soil additive in seven days. The composting service, a new pilot program, is not offered to area households because Alaska Waste has to carefully monitor what goes into the

composter. Two local grocery stores provide waste produce, which is mixed with shredded paper, cardboard, wood chips and horse manure.

Another new development at Alaska Waste is their biodiesel process-ing plant. Used cooking oil from local restaurants is processed into biodiesel for use in their fleet of 50 trucks. The three-part goal is to save money, re-duce carbon emissions and make use of a renewable resource, according to Jeff Jessen, renewable resources pro-gram administrator.

CURBSIDE EXPANSIONIn addition, curbside recycling through Alaska Waste has expanded over the last three years and is now available to 40,000 households in Anchorage,

Eagle River and on Elmendorf Air Force Base. Four thousand households currently participate in the optional program. Even with only 10 percent participation, 2.5 million pounds of waste were diverted from the landfill in 2009. Alaska Waste’s goal is to get participation up to 25 percent.

“Our hope is that the curbside makes it a lot more convenient. It’s in their home, they can get kids in-volved,” said Katy Suddock, recycling coordinator at Alaska Waste. “We haven’t gotten as many people as we would hope. It’s interesting we don’t get the take rates as in Lower 48. It’s an educational process.”

The Municipality of Anchorage has a similar recycling program, which cov-ers 20 percent of the households and commercial establishments in Anchor-age. Their service area is north of Tu-dor Road, with pockets in a few other neighborhoods.

In the spring of 2008, Alaska Waste expanded their paper-only recycling program to include co-mingled waste such as aluminum and tin cans and some plastic bottles and jugs (PET No. 1 and HDPE No. 2 only). No sorting is necessary for the customer – it all goes in one 96-gallon tipper cart provided by Alaska Waste.

BUSINESS WASTEAlaska Waste offers two programs for the business community. The office re-cycling program picks up mixed paper and shredded paper, as well as waste generated in company break rooms, such as aluminum cans and plastic bot-tles. Pickup is available weekly, every other week or on call.

“It’s a great way for businesses to promote recycling and to educate their employees to recycle, and it diverts it from their waste stream,” Suddock says.

Alaska Waste and Green Star innovative leadersGoing Green

BY LOUISE FREEMAN


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Alaska Waste’s recently instituted promotional campaign features Anchorage residents such as Nurse Sara, saying “I choose to recycle, do you?”


“A lot of businesses are starting to get on the recycling bandwagon. It’s great.”

There are currently 250 participants in the office recycling program.

COMMERCIAL PROGRAMAnother service provided to busi-nesses is the commercial recycling program, which provides a dumpster for pick up of mixed paper and card-board. The cost varies with the size of the dumpster and the frequency of pick up. Like the other materials, the mixed paper is shipped to the Lower 48. It is used to make paper towels, toilet and facial tissues, and paperboard for such items as cracker and cereal boxes. Currently 634 busi-nesses, schools and other organiza-tions participate in the commercial recycling program.

As part of its ongoing educational effort, Alaska Waste works closely with schools in the Anchorage area. Company representatives give talks at the schools and participate in the school district’s yearly Earth Day celebration. They also go to home shows and other local events and provide a substantial amount of educational info on their website. But Alaska Waste’s recycling efforts don’t stop there. They practice what they preach: They have an internal program for recycling and reducing their own waste. In February 2009, they received their Green Star Award in recognition of their earth-friendly business practices.

GREEN STAR HELPSGreen Star is a nonprofit organization that offers education and technical as-sistance to help businesses go green by reducing waste, conserving energy and preventing pollution.

“Anyone can say they’re green,” said Kim Kovol, executive director of Green Star, “but to get a Green Star Award, you have to prove to an assessment committee of your peers that you’re making a difference within your orga-nization, like a positive return on in-vestment, and a positive impact on the community and environment.”

Green Star members include busi-nesses from all sectors, including health, travel, transportation, hospi-tality, construction, manufacturing,

AT&T Stays Green

AT&T Recycle & ReuseTo help eliminate electronic waste, consumers are invited to bring unwanted wireless phones, smartphones, acces-sories and batteries (regardless of the manufacturer or carrier) to AT&T company-owned retail stores for recycling. AT&T has a long-standing history of supporting Cell Phones for Soldiers – an initiative that uses funds from recycled cell phones to buy prepaid phone cards for active duty military members to help connect them with their families. Drop-off sites are located in all AT&T company-owned retail stores.

More information: http://www.wireless.att.com/learn/articles-resources/community-support/recycling.jsp

Slimmed PackagingAT&T announced in March it is working with suppliers of mobile phone accessories to use less plastic and paper in packaging.

More information: http://www.att.com/gen/press-room?pid=4800&cdvn=news&newsarticleid=30599&mapcode=


retail and waste management. Many municipal, State and federal agencies, nonprofits and schools also have be-come members. Even a single-person business, such as a contractor or a com-puter consultant, may work toward a Green Star award.

Currently, half of the organization’s 242 members have earned a Green Star Award for meeting the required standards. The 10 standards include such goals as reducing solid waste dis-posal through waste reduction and re-cycling, minimizing energy and water consumption, and cutting down on ve-hicle pollution. Benefits to the company include not only economic benefits, but also reduced environmental liabili-ties and public recognition for being a responsible member of the commu-nity. Awardees also find making these changes yields an unexpected bonus.

“We’re getting feedback that it improves employee morale,” Kovol said. “People make fewer mistakes when there’s better lighting, for ex-ample, and it’s creating a more pro-ductive environment, not only by providing a healthier environment

but by improving physical health.” Green Star is invited to present

one award a month at the Anchorage Chamber of Commerce luncheon, which, Kovol noted, “can spark some business for the company receiving their award.” Businesses sometimes choose to receive the award at a work meeting or an employee potluck. “We leave it up to the business on how they choose to be recognized.”

EARTH-FRIENDLY CHANGESTo receive the Green Star Award, Alaska Waste made many changes in their work areas, including sealing up windows and doors, regulating heat in their shops, plugging vehicles in over-night and establishing new policies on idling. The company made great strides in reducing its own internally generated waste, switching to all biodegradable plates, cups and utensils, and encourag-ing the use of reusable cups and water bottles. Some waste generated in their break room, such as cups and plates, goes next door to their new composter. The janitorial service is now required to use earth-friendly cleaning products.

All printers have been set to black and white double-sided, and post-it notes are used instead of fax cover sheets. The company newsletter and calendars are distributed by e-mail. Alaska Waste also is adding electronic bill-pay so custom-ers can cut down on paper use, too.

Anchorage Waste recently instituted a promotional campaign with the slo-gan: “I choose to recycle, do you?” Along with the slogan, their trucks display photos of Anchorage residents and celebrities, such as Olympic cross-country skier James Southam.

The earth-friendly changes Alaska Waste and other Green Star awardees have made are essential for future growth.

“For younger employees and con-sumers, the green culture is ingrained already and they value that,” Kovol says. “They look at a business in the hospitality industry, for example, and ask, ‘Are they saving water? Are they using corn-based products or tradi-tional plastic spoons in the restaurants?’ Businesses must respond to consumer demands because customers are mak-ing greener purchases and decisions in higher quantities.” ❑

For more information, contact:

Emerald Alaska Inc.

W. Paul Nielsen III, Sales Manager

425 Outer Springer Loop Rd.

Palmer, AK 99645

Phone: 907-258-1558 x107

Fax: 907-746-3651

Website: www.EmeraldNW.com

Emerald Alaska Inc., the state’s larg-est Alaska-based environmental services firm, is constantly adapt-

ing to the needs of the marketplace.Emerald was founded on high-quality

petroleum recycling services that include transforming used oil, oily water and mixed fuels into custom blended fuel products for energy recovery. Today, the company offers the widest variety of en-vironmental and recycling services avail-able in Alaska.

Emerald helps businesses reduce their environmental risk and comply with ev-er-increasing environmental regulations. Clients include government agencies and private companies in oil, mining, transpor-tation, engineering and other industries.

Headquartered in Palmer, Emerald Alaska has expanded its expertise, services, loca-tions, and equipment to better serve its Alaska clients. Currently, the company is constructing a new Kenai facility at Mile 17 Kenai Spur Highway to support the Cook Inlet region. In Fairbanks, Emerald has relocated its operations to a larger, more efficient facility at 1350 Queens Way. Ad-ditionally, Emerald’s Tacoma, Wash treat-ment, storage and disposal facility recently received an expanded EPA permit to ac-cept a broader array of hazardous waste.

Emerald’s service offerings are centered around its fleet of high-powered vacuum trucks. The company operates various ve-hicles, from standard liquid vacuum units to high-performance Vactor/Guzzler air moving and hydro-excavating systems. Emerald routinely services underground oil/water separators; sump and catch ba-sins; sewer and stormwater lines, safely removing sludges, mud; ground water and industrial wastewater.

Industrial and marine cleaning is an-other area of growth for the company. Em-erald offers high-pressure hydroblasting to help clients decontaminate processing equipment, storage tanks, and other ma-chinery. The company also provides bilge pumping/cleaning; barge cleaning; venti-lation; liquid pumping, product transfer, filtration services, as well as statewide emergency spill response and clean-up.

Emerald excels in all types of waste treatment and disposal. It manages ignit-able liquids, corrosives, batteries, paint, rags, sludges, solids, pesticides, contami-nated soil, spent lamps, and off-spec and surplus chemical labpacks. Emerald helps companies improve their processes and materials so they can generate less waste.

Automotive services is another key product line for Emerald. The company provides full-service automotive fluids waste management – from parts washer solvents to antifreeze and coolants – with available processing or reuse of almost all automotive fluids waste. Emerald is the Alaska distributor for Orange-Sol, an environmentally-friendly cleaner with a proven record of removing tough petro-leum residues. Emerald also operates a large fleet of vehicles that transports haz-ardous waste, used oil, fuels, wastewater, drilling muds, and contaminated solids.

Emerald is proud to have been re-awarded the Defense Logistics Agency contract to manage hazardous waste for Alaska’s mili-

tary installations. The contract – which the company has successfully performed since 2000 – is a testament to its strong ethics, ex-pertise and service. Emerald also recently supported the U.S. Coast Guard’s closure of the LORAN station at Port Clarence. The project involved removing hazardous waste from the complex in support of the demoli-tion of Alaska’s tallest manmade structure: a 1,300-plus-foot antenna. Additionally, Emerald also assisted with the spring 2010 shutdown and maintenance of North Pole’s Flint-Hills Resources refinery.

Emerald Alaska can tackle the toughest, most challenging project with sophisticated technology and safe, well-trained personnel.


Impacts of compliance in Alaska

Endangered Species Act

BY TYSON KADE


Alaska is beginning to experience the emerging application of the federal Endangered Species

Act (ESA), with effects that are likely to increase in the coming years. While much media attention has been paid recently to addressing climate change on a global and national scale, advo-cacy groups have turned to an existing environmental law, the ESA, to address the impacts of climate change on plant and animal species in the Lower 48 states, as well as in Alaska. The effects of the application of the ESA to climate change issues could be felt acutely in Alaska, far more than other states.

Currently, there are 20 Alaska species listed under the ESA, ranging from polar bear and bowhead whales in the north to beluga whales and sea otters in Southcentral and Southeast,

with 10 additional species currently be-ing considered for protection. Several of these species have been proposed recently based on the anticipated ef-fects of climate change on their habi-tat, such as declining areas of sea ice coverage. While Alaska is no stranger to the ESA, the recent listing actions will bring increased federal involve-ment and oversight to activities and land use in the state. In response, the State of Alaska has filed lawsuits to challenge the federal government’s listing of polar bear and Cook Inlet beluga whale under the ESA.

For landowners and companies seek-ing to do business in the state, the ESA carries compliance obligations that must be understood prior to conducting activities that may affect a threatened or endangered species. Due to the large

amount of federal lands in Alaska and the types of development projects, such as natural resources exploration and extraction that require federal permits the number of projects subject to ESA requirements will increase in the future as more species are listed under the ESA. As application of the ESA be-comes more widespread, the associated compliance-related delays and project modifications could well increase the cost of doing business in Alaska.

In order to successfully manage these potential impacts, it is important to understand these federal actions in advance.

WHAT IS THE ESA?The ESA, administered by the United States Fish and Wildlife Service (USFWS) and the National Marine

Tyson Kade is an attorney with Van Ness Feldman P.C. in Seattle. Scientists tagging a beluga whale in Cook Inlet near Anchorage.

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Fisheries Service (NMFS), has been called by its proponents “the pit bull of federal environmental law” for its single-minded requirement to place federally required species conserva-tion as a priority over all types of eco-nomic activity. In general, the ESA requires the conservation of listed threatened and endangered species and the protection of the habitat on which the species depend. The ESA defines species broadly, including subspecies and distinct population segments of vertebrates, which allows the USFWS and NMFS to protect discrete populations of listed species in portions of their range. Once a spe-cies has been listed, the ESA prohibits private or public actions that harm or harass the protected species.

HOW ARE SPECIES LISTED UNDER THE ESA?

To be protected under the ESA, a spe-cies must be “listed,” either as endan-gered or threatened. An endangered species is a species which is in danger of extinction throughout all or a signifi-cant portion of its range. A threatened species is a species likely to become en-dangered within the foreseeable future throughout all or a significant portion of its range. Additionally, a species can be designated as a candidate for listing. While this does not implicate

ESA protections, a candidate species is eligible for conservation agreements that may prevent a future listing.

Under Section 4 of the ESA, the list-ing process is triggered upon petition by a private citizen or on the initiative of USFWS or NMFS. In determin-ing whether listing is warranted, one of the following five factors must ex-ist: (1) present or threatened destruc-tion, modification, or curtailment of habitat or range; (2) overutilization for commercial, recreational, scientific or educational purposes; (3) disease or predation; (4) inadequacy of existing regulatory mechanisms; and (5) other natural or manmade factors affecting continued existence.

For example, the polar bear was listed as threatened based on the de-clining amount of sea ice in the Arctic, its principal habitat. The listing deter-mination must be based upon the best scientific and commercial data and take into account other efforts being made to protect the species.

If a species is listed, the ESA typi-cally requires the designation of critical habitat. Critical habitat includes spe-cific areas containing features essential to the conservation of the species and that may require special management considerations or protection. The desig-nation of critical habitat must be based on the best scientific data available after

taking into consideration the economic impact, and any other relevant impacts, of specifying any particular area as criti-cal habitat. Only activities involving a federal permit, license or funding are affected by a critical habitat designa-tion. Currently, NMFS and USFWS are considering final critical habitat des-ignations for Cook Inlet beluga whales and polar bears, respectively.

WHAT IS CONSULTATION AND WHEN IS IT REQUIRED?

Of the impacts associated with the list-ing of a species, the consultation re-quirement can have the greatest effect on businesses and landowners. Under Section 7 of the ESA, every federal agency has an obligation to ensure that its actions do not jeopardize the continued existence of a listed species or result in the destruction or adverse modification of a listed species’ critical habitat. To fulfill this obligation, a fed-eral agency must consult with USFWS or NMFS when its action may affect a listed species or its critical habitat. For example, consultation can be triggered if a private action requires a federal per-mit, occurs on federal land, or involves federal funding. The consultation pro-cess can result in the preparation of a biological opinion, which may impose additional terms and conditions upon the proposed project.

Consultation, in effect, creates a sec-ond permitting requirement, since, in addition to the federal permit already required, the applicant would also have to comply with the requirements of the biological opinion. For example, the biological opinion will contain an inci-dental take statement, which allows for the take of listed species in conjunction with otherwise lawful federal actions. The liability protection provided by the incidental take statement is only ap-plicable so long as there is compliance with the biological opinion’s terms and conditions. Any such terms and condi-tions must be designed to minimize the amount or extent of the anticipated take of the listed species.

The consultation requirement, and the imposed terms and conditions, have the potential to significantly impact a proposed project. The consultation it-self is typically a laborious process that involves the collection and review of


detailed, scientific data, which, along with the preparation of the biological opinion, can delay the anticipated start of a proposed project. In addition, de-pending on what additional conditions are required for the protection of the listed species or its critical habitat, the biological opinion can impose signifi-cant costs and alterations on a proposed project by, for example, prohibiting certain activities in specified areas or requiring the inclusion of expensive technological modifications.

WHAT IS PROHIBITED TAKE?Once a species has been listed as en-dangered, Section 9 of the ESA prohib-its any person, including government agencies, from “taking” any endangered species. The term “take” is defined broadly to mean “harass, harm, pursue, hunt, shoot, wound, kill, trap, capture or collect, or to attempt to engage in any such conduct.” Importantly, a take can occur if a species is impacted directly or if significant habitat modification or degradation occurs, which actually kills or injures wildlife by significantly affecting essential behavioral patterns, including breeding, feeding or shelter-ing. Examples of these types of activities include: the discharge of pollutants; the removal or alteration of rocks, soil, gravel, vegetation or other physical structures; and constructing, maintain-ing or using inadequate bridges, roads or trails on stream banks or unstable hill slopes adjacent to or above a listed species habitat. The ESA imposes sub-stantial civil and criminal penalties on any person who “knowingly” violates the prohibitions on take.

For threatened species, Section 4(d) of the ESA provides the USFWS and NMFS with greater flexibility when

determining what activities constitute a taking. Instead of the complete prohibi-tion on take that applies to endangered species, the USFWS and NMFS are able to promulgate regulations that are “necessary and advisable” to conserve threatened species. These “4(d) rules” allow the federal agencies to adopt less-restrictive measures to ensure the protection of threatened species. Impor-tantly, the development of a 4(d) rule is a public process, allowing interested parties to participate and provide com-ments on the proposed measures. The recent 4(d) rule for polar bear, while currently the subject of a legal chal-lenge, provides an example of the type of protection from take liability that can be provided under section 4(d).

ARE THERE EXCEPTIONS TO THE PROHIBITION ON TAKE?

While the ESA’s prohibition on take can be onerous, the ESA provides several exceptions that can allow take to occur in certain specified circumstances. First, a party can take a listed species if they have received, and complied with the terms and conditions of, a Section 10 incidental take permit. The USFWS or NMFS can issue an incidental take permit if the contemplated taking is incidental to, and not the purpose of, the carrying out of an otherwise lawful activity. To apply for a permit, the party must submit a description of the activ-ity sought to be authorized, the species sought to be covered by the permit, and a habitat conservation plan. The habitat conservation plan must describe the likely impact of the taking, the measures the applicant will employ to minimize or mitigate any such impact, and any procedures for resolving problems posed by unforeseen circumstances.

Second, the ESA allows Alaska Natives to take any endangered or threatened species if the taking is primarily for sub-sistence purposes. Third, a person may take a threatened or endangered species in defense of his own life or the lives of others. The self-defense exception is typically not available for the protection of property or pets. In addition, as dis-cussed above, a lawful taking can occur subject to an incidental take statement contained in a biological opinion.

HOW SHOULD ESA COMPLIANCE OBLIGATIONS BE ADDRESSED?

While the impacts of ESA compli-ance can be significant, entities in other regions of the country, such as the Pacific Northwest, have success-fully addressed similar requirements. In general, landowners and companies that take a proactive approach regard-ing ESA compliance are better able to effectively and efficiently manage their ESA obligations. For example, when considering an action that may af-fect a listed species, the landowner or company should actively engage the appropriate federal agency early in the project-development process. The appli-cant should also work cooperatively with the federal agency to ensure that the best available science is used to assess any impacts to listed species. Finally, land-owners and companies should design their projects to minimize any impacts to listed species to the greatest extent possible. These actions, coupled with an understanding of the relevant regula-tory requirements, will help landowners and companies avoid some of the costs and delays usually associated with ESA compliance. For entities that do not fully appreciate the role of the ESA or that do not proactively attempt to address their compliance obligations, the ESA can serve as a significant barrier to project permitting and construction. ❑

About the AuthorTyson Kade is an attorney with Van Ness Feldman P.C. in Seattle. His practice focuses on federal and state environmental and natural resources law. Kade recently gave a presenta-tion on “Arctic Species: Incidental Take Compliance Strategies” at the Endangered Species Act – Impacts on Alaska seminar in Anchorage.

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What happens when the money runs out?Stimulus Funds

BUILDING ALASKASPECIAL SECTION

When former Gov. Sarah Palin originally vetoed $28.56 mil-lion in American Recovery

and Reinvestment Act (ARRA) funds to help improve the energy efficiency of public and private buildings statewide, most Alaskans were ready to posse up and escort her out of town. In announc-ing the acceptance of only 69 percent

of the estimated $930 million slated to flow into Alaska, Palin said she was acting in the best interests of Alaskans. She said she would only accept “timely, targeted and temporary” money that did not create strings binding the State in the future, adding that any kind of obligation would simply lead Alaska into a deeper hole.

“A good time may be had by all, but the hangover the next day, and the consequences of what you did while you were drunk, may be with you for a long, long time,” Sen. Con Bunde said, supporting Palin’s decision. Democrats rebuked her and the conservative Re-publican minority in the Senate saying the governor was breaking with a long tradition of Alaska going after as much federal money as possible to help create infrastructure and build the state.

At the same time, many Palin-antagonists said her motives behind the decision were completely selfish and that she was making decisions with an eye toward a future presidential campaign,

in the meantime aligning herself with other very conservative governors who also rejected the money.

By now, of course, everyone knows the punch line to the story. In May 2009, House and Senate finance com-mittees held almost 20 public hearings to discuss and debate the stimulus leg-islation. In the end, the federal eco-nomic stimulus appropriation bill, HB 199, was signed. Palin did not ac-cept the $28.6 million for energy funds and vetoed this portion, but the Alaska State Legislature then voted 45-14 to override her veto.

ARRACongress passed the American Recov-ery and Reinvestment Act (ARRA) of 2009 at the urging of President Barack Obama, who signed it into law last year. A direct response to the economic cri-sis, the act has three immediate goals: to create new jobs and save existing ones, spur economic activity and in-vest in long-term growth, and foster unprecedented levels of accountabil-ity and transparency in government spending. To do this, nationally, the act provides $288 billion in tax cuts and benefits for millions of working fami-lies and businesses; increases federal funds for education and health care as well as entitlement programs (such as extending unemployment benefits) by $224 billion; makes $275 billion available for federal contracts, grants and loans; and requires recipients of ARRA funds to report quarterly on how they are using the money.

In addition to offering financial aid directly to local school districts, expanding the Child Tax Credit, and underwriting a process to computer-ize health records to reduce medi-cal errors and save on health care costs, ARRA targets infrastructure development and enhancement. For instance, the act includes investment Sen. Mark Begich

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ARRA Stimulus funds paid for $7.7 million of Alaska Department of Transportation and Public Facilities $17 million causeway and dock project in Gustavus, meant to

improve marine access in and out of Gustavus and Glacier Bay National Park.

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Were we given the boost needed?

BY HEIDI BOHI

COVER STORY


in the domestic renewable energy industry and energy improvements, and the weatherization of 75 percent of federal buildings and more than 1 million private homes nationwide.

BUILDING INFRASTRUCTUREConstruction and repair of airports, roads and bridges, as well as scientific research and the expansion of broad-band and wireless service, are also included among the many projects in the recovery act. While many of these projects focus more immedi-ately on jump-starting the economy, others – especially those involving infrastructure improvements – are expected to contribute to economic growth for many years.

To date, a total of about $1.6 billion came to Alaska, with the last payouts arriving this year, according to Sen. Mark Begich. Of that, about 30 percent went to stimulus construction projects for highways, airports and defense, with the remainder going to tax relief and small-business incentives. Alaska fared well, ranking 36th in terms of most ab-solute dollars. For overall transportation

and infrastructure spending, the state came in No. 42. Per capita comparisons are difficult with the stimulus money because it specifically directs much of the money to some of the hardest-hit states and large urban areas, according to the Center for American Progress.

What is most significant about the windfall was the timing. “The money came in at the right time,” Begich says, adding that while the rest of the country was sinking fast and deep into the re-cession, Alaska was still holding strong and the stimulus funds prevented the state from losing its hold by funding im-portant projects that also created good paying, long-term jobs.

“The timing held off the deeper re-cession Alaska could have faced – even though we were behind that curve, it was so fast and furious that we were next on the list, but we were able to fend it off.” Now, he adds, while the rest of the country is still witnessing unprec-edented rates of unemployment, Alaska has dropped three-tenths of a point.

Undeniably, the resulting projects are critical for both the quality of life of peo-ple and future development of commu-

nities statewide. Alaska’s military bases alone received $250 million through the Department of Defense for making the upgrades that will allow them to restore and modernize facilities and continue their mission in Alaska and the Pacific Rim, reaffirming Alaska is strategically valuable from a military perspective.

John MacKinnonExecutive Director

Associated General Contractorsof Alaska

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In transportation, there was about $170 million in highway construction and $80 million in aviation stimulus projects, says John MacKinnon, exec-utive director of Associated General Contractors (AGC) of Alaska. “There is no question the ARRA projects have been a boost to the construction economy, especially those projects on the civil or horizontal side of the busi-ness. Add to that the normal annual highway and aviation construction program and $315 million in State transportation bonds that Alaska vot-ers approved just four months before Congress passed ARRA, and there has been a lot of project money on the street,” MacKinnon says. “The build-ing or vertical sector of construction was down 15 percent in 2009, and this year we’re starting to see some of the building projects that were part of the stimulus.”

ALASKA PROJECTSOne of the first projects through the Alaska Department of Transportation and Public Facilities (AKDOTPF) is the construction of a new $17 mil-lion causeway and dock in Gustavus – funded in part with $7.7 million in stimulus funds – which is expected to employ 30 people. The new pier and causeway replaces a wood structure built in the early 1960s and will be a roll-off and roll-on marine transfer facility capable of mooring freight-ers, freight and fuel barges, transport vessels, and sightseeing vessels. It is expected to greatly improve marine access in and out of Gustavas and Gla-cier Bay National Park.

In Ouzinkie, a $15 million air-port was constructed from part of the $1.1 billion in stimulus money available for nationwide airport improvements, providing a critical transportation link for residents of the island who have relied on flying to the grocery store or taking a 40-minute skiff ride across the Ouzinkie Narrows to Kodiak. The vil-lages of Allakaket, Akiachak and Fort Yukon also received the maximum stimulus grant for airport projects.

The new $171 million Norton Sound Hospital project in Nome also is being paid for in part with $146 million in ARRA money. The 150,000-square-foot building will replace a 61-year-old

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hospital. Currently under construc-t ion, i t wil l employ more than 100 construction workers up until its completion in 2012.

In Kotzebue, the reconstruction of 4,400 feet along Shore Avenue from Lake Street through the primary com-mercial downtown area will include paving, new sidewalks, a pathway, parallel parking, and open space on the seaward side. A badly needed ero-sion protection revetment also on the seaward side is also a major component of the project.

The list of projects goes on and on. In the meantime, the focus is starting to be on what will happen to the con-struction industry when stimulus funds run out in the next couple of years. Much of the $787 billion stimulus ap-propriated nationally has been spent, creating jobs for some and extending jobless benefits for others. Concerns are beginning to rise about how to prevent another recession from happening once the stimulus funds have been spent.

NO SLUMP ANTICIPATEDNO BOOM OR BUST

Because projects do not stop and start by the calendar year like funding does, MacKinnon says, he does not expect there to be a sudden slump when stimu-lus projects begin to come to an end. The two years of stimulus spending will translate into work over four years. “I don’t think it’s an issue of whether the economy is strong enough to pick up the slack after ARRA,” he says. “The question is: ‘Will State revenue be strong enough to keep up a healthy capital budget and address the state’s transportation and facility needs?’

“There’s not a transportation proj-ect that doesn’t offer a significant benefit to the people of the state,” MacKinnon says.

With only 680,000 residents liv-ing in 395 communities spread over 660,000 square miles – 258 airports and less than 16,000 miles of road – the state’s basic transportation needs are never-ending. In addition, Alaska’s climate is hard on infrastructure. Pavement and roadway rehab alone could consume much of the budget, MacKinnon says, because no sooner is a project completed than it’s time to start reconstructing again.

“As far as ARRA being a benefit,

you don’t dump $250 million into transportation projects and another $250 million into military projects in the state over a four-year period and not have it be a positive impact,” MacKinnon says.

Begich agrees that nothing but ben-efits will remain as a result of the ARRA money, which is intended to be a short-term, stimulus, not an ongoing flow of money. Referring back to some of the confusion brought on by Palin, he says her claims were politics, but he has faith that Alaskans’ opinions about the program are reality-based.

At the same time, Begich says, the State’s extensive capital budget is strong and because it’s at the end of the fiscal year and money that needs to be spent will dovetail nicely with the stimulus funds. “This won’t be boom or bust,” Begich says. “It will be a manageable flow. Some people assume (stimulus funding) did nothing, but that’s incor-rect. It’s creating real jobs for needed projects. The long-term effect was not just to create jobs, but at the end of the day to have operational activities for decades to come.” ❑


Transportation projects dominate spending

Rural Alaska Construction

BY HEIDI BOHI


In rural communities across Alaska, there is a buzz of excitement com-ing from the buzz of construction

projects that are changing the quality of life and potential for growth for the first time in many decades. The streets of tiny villages known for their sleepy, small-town atmosphere are bustling, and everywhere there are hard hats, cranes and crews of construction work-ers, long awaited signs of progress.

In transportation, health care, edu-cation and energy-related industries there are airport and dock construction projects, boat harbors, clinics, hospitals and new schools that mean those living in the Bush are starting to have some of the same conveniences and critical services their urban neighbors have.

Although it may seem like all of this activity came out of nowhere, in fact rural construction has been steady

for several years, says John MacKin-non, executive director of Associated General Contractors (AGC) of Alaska, mainly the result of government fund-ing, as opposed to a greater percent-age of privately funded construction projects in urban areas.

As always, numbers don’t tell the whole story. And as is typically the case, the influences on Alaska’s economic sectors and industries are exclusive to the state’s economic climate and often independent of what’s going on in the rest of the country.

PUBLIC CONSTRUCTIONFORECAST DOWN

Despite the steady level of activity in Rural Alaska, in fact, projections show public construction spending – which funds most of this work – will be down 5 percent, dropping to $2.6 billion, and this even with the cash infusion from the American Recovery and Reinvest-ment Act (ARRA), according to the 2010 construction spending forecast produced by University of Alaska Institute of Social and Economic Research (ISER) for AGC and its sister organization the Construction Industry Progress Fund. Spending will increase in the utilities and hospitals categories, but will decline in mining, residential, other commercial and the other rural basic sector categories, the report says. A second round of ARRA stimulus funds may be undertaken later this year, but it is too soon to speculate on how that might impact construction spending, ISER says, adding it is as-suming there will be no further support from the federal government.

In comparison, private-sector construction spending will be down only 1 percent from 2009, dropping to $4.4 bil l ion. The total value of

Alaska Interstate Construction (AIC) is the contractor on the $33 million Kotzebue Roads Shore Avenue project, which includes erosion protection from the Chukchi

Sea and roadway improvements along 4,400 feet of Shore Avenue.

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Alaska Interstate Construction (AIC) is the contractor on the $33 million Kotzebue


construction spending “on the street” in Alaska in 2010 will be $7 billion, down 3 percent from 2009. In terms of wages and salaries in the construction industry, this means there will continue to be a slow decline, which began in 2006, but the level remains above the long-term average for the industry.

TRANSPORTATION SPENDING UPFrank Richards, deputy commis-sioner of highways and public fa-cilities for the Alaska Department of Transportation and Public Facilities (DOT&PF), says when it comes to transportation construction, undeni-ably, the rural areas have continued to fare very well recently.

“We have had a very robust trans-portation construction program over the past couple of years and the $278 million in stimulus funding was a big boost for us,” Richards says, explaining that the money funded highway and road projects and five rural airport developments. This year, DOT&PF will have another $110 million to $130 million in addi-tional federal highway dollars for rural

and urban improvements because of continuing federal resolutions under the Safe, Accountable, Flexible, Ef-ficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU). The Act, signed into law by President George W. Bush in August 2005, es-tablished extensive new resources and opportunities for advancing highway safety throughout the country.

Several major transportation con-struction projects include roads and highways in rural areas that are also critical to the rest of the state’s eco-nomic activity. In the Northern Region alone, more than $230 million will be spent on upgrades – a big increase from $172 million last year.

This includes work on the Dalton Highway, a remote 414-mile stretch that parallels the trans-Alaska oil pipeline, heading north from Livengood through the Arctic ice fields to Prudhoe Bay. It carries 160 trucks daily in the summer and 250 trucks daily in the winter, and is critical to operations in the oil patch. Recent road improvements between MP 260 and MP 321 include culvert replacements and grade increases at

six stream crossings, replacing a culvert crossing with a new bridge, and rais-ing the grade of the highway between MP 311.7 and MP 314 near the Saga-vanirktok River. The improvements will preserve and extend the service

Frank RichardsDeputy Commissioner, Highways

and Public FacilitiesAlaska Department of

Transportation and Public Facilities

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life of the highway, enhance highway safety, provide adequate fish passage and improve localized drainage.

Other rural road construction proj-ects include a $31 million replacement of the Tanana River Bridge near Tok and a $17.3 million improvement proj-ect on the Alaska Highway near the Canada border.

In Gustavas, the construction of a new $17 million causeway and dock is expected to employ 30 people. The new pier and causeway replaces a wood structure built in the early 1960s and will be a roll-off and roll-on marine transfer facility capable of mooring freighters, freight and fuel barges, trans-port vessels, and sightseeing vessels. It is expected to greatly improve marine access in and out of Gustavas and Gla-cier Bay National Park.

In Kotzebue, the reconstruction of 4,400 feet along Shore Avenue from Lake Street through the primary com-mercial downtown area will include paving, new sidewalks, a pathway, parallel parking and open space on the seaward side. A badly needed erosion-protection revetment on the seaward side is a major component of the project.

In Ouzinkie, a $15 million airport was constructed from part of the $1.1 billion in stimulus money available for nationwide airport improvements, providing a critical transportation link for residents of the island who have relied on flying to the grocery store or taking a 40-minute skiff ride across the Ouzinkie Narrows to Kodiak.

“Rural Alaskans, like all Americans, need transportation to get to medical facilities, schools, sporting events and even to travel to communities to see relatives, so these rural transportation projects are key to having a safe trans-portation network for getting to these places,” Richards says.

MEDICAL FACILITIESIn health care, rural Alaska also stands to benefit from funds being leveraged between private, State and federal dol-lars, with more than half of these proj-ects being new construction and the remainder being renovations. Primary care clinics, completed in the last two years between June 2008 and June 2010, are in 18 communities: Tuntutuliak,

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Selawik, Kodiak, Hooper Bay, Chignik Bay, Teller, Fort Yukon, Hughes, Good-news Bay, Levelock, Perryville, Kotlik, Akhiok, Craig, Kake, Skagway, Pilot Point and Brevig Mission. Several other communities have recently been ap-proved for health care facility funding, says Nancy Merriman, health facilities senior program manager for the Denali Commission, including: Nunapitchuk, Kasigluk, Mountain Village, McGrath, Ouzinkie, Hydaburg, Noorvik, Ekwok and Igiugig.

One of the largest in the state is the new $171 million Norton Sound Hospital project in Nome. The 150,000-square-foot building will replace a 61-year-old hospital. Currently under construction, it will employ more than 100 construc-tion workers up until its completion in 2012.

The $4 million Family Service Cen-ter in New Stuyahok, scheduled to be complete by the end of 2011, integrates a primary care clinic that is 3,000 square feet, a domestic violence shelter that is 1,325 feet, and a family resource center that provides advocacy services.

The $2.57 million 6,132-square-foot

Harris Sub-Regional Clinic in Chignik Bay is especially significant because it serves communities based on the com-mercial fisheries, a high-risk industry and one that involves a lot of employees moving around the region. An example of the Denali Commission working with other State and federal funders, Merri-man says the project, completed last summer, also involved a lot of local hire. The facility will have one doctor, at least one mid-level practitioner, six exam rooms, dental labs, and a proce-dure and trauma room.

K-12 FUNDING CONSISTENTRural schools statewide also will see consistent funding for new construc-tion resulting from the passage of Senate Bill 237, aimed at improving educational facilities outside major cit-ies and boroughs, which provides about $38 million a year for construction proj-ects in Rural Education Attendance Areas.

The Alaska Department of Edu-cation and Early Development list of capital improvement projects for fiscal year 2011 includes 35 schools statewide, amounting to a $412 million

for the State’s share of construction costs. Major projects include a $47 million K-12 replacement school in Al-akanuk, a $56 million renovation and addition to the Kipnuk K-12 school, and a $41 million replacement to the K-12 school in Napaskiak.

While recognizing the uncertainty associated with the economy this year, the ISER report says there is little downside risk to the forecast because private construction spending will be dominated by the petroleum industry, which invests strategically and is not overly influenced by the current reces-sion. Public construction spending will be driven by money from the ARRA and estimates are complicated by de-lays in passage of the budget for the federal fiscal year, which is October through September. Because projects often take two or more years to com-plete, estimating the cash on the street is difficult because it never flows in a predictable fashion

“We are confident in the overall pat-tern of the forecast – but as always, we can expect some surprises as the year progresses,” the report says. ❑

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C ommercial and residential market statusBY RACHEL KENSHALO


It’s been impossible to avoid hearing about the mortgage crisis plagu-ing our nation’s lenders and hom-

eowners for the last several years. It can be seen on the news, on infomercials promising to save the consumer from home foreclosure, and in the partially finished luxury condo developments found in many major cities. According to the Mortgage Bankers Association,

the national association representing the real estate finance industry, the de-linquency rate for mortgage loans in-creased to 10 percent of all outstanding loans by the end of first quarter 2010. In Alaska, however, real estate industry leaders and economic experts all seem to have the same message: the current situation may not be ideal, but things could be a lot worse.

“We just haven’t seen the real estate market tank like it did elsewhere in the country,” says Bill Popp, president and CEO of the Anchorage Economic Devel-opment Corp. Popp attributes Alaska’s healthy real estate market to sobering lessons learned during the statewide recession in the late 1980s. During that time, oil prices dropped to less than $10 per barrel and Anchorage saw 14,000

Jim CalvinPrincipal and Senior Economist

McDowell Group

Photo courtesy of McDowell Group

Mark FilipenkoAssociate Broker

Bond, Stephens & Johnson

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Bill PoppPresident and Chief Executive Officer

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‘UP IN THE AIR’


home vacancies, 8,000 foreclosures, and 29,000 people simply packed up and left the state, devastating the economy.

“Alaskans benefit from having more anticipation and being better prepared for times of economic slowdown,” Popp says. “Construction companies, lending institutions and property developers re-member those times and therefore are much more cautious than the rest of the United States. The rest of the country didn’t experience the recession we had, so perhaps they were more prone to fiscal irresponsibility.”

Jim Calvin, principal and senior economist with the McDowell Group, a statewide economic research and con-sulting firm, agrees. He points out that low oil prices in the 1980s created a dras-tic decline in employment, which led to tanking real estate values and a decline in construction. “In times of economic change,” Calvin says, “the real estate market is the most responsive to that change, and therefore it’s a great indicator of overall health of an economy.”

If real estate markets are an indica-tor of overall economic health, then all signs point to Alaska’s economy remaining strong.

COMMERCIAL MARKETOn the commercial side, the market is fundamentally sound, with low va-cancy rates across all sectors (retail, office and warehouse) and stable lease and sale prices, according to Mark Fil-ipenko, an associate broker at Bond, Stephens and Johnson.

“We are seeing a very low number of transactions, both for lease and sale. In Anchorage, we have not seen a dra-matic increase in vacancies; it is the lack of demand that is affecting the mar-ket,” Filipenko said. “With low vacancy

rates, most landlords are not feeling the pinch of a slow economy, but landlords who have had a vacancy have typically had the space on the market for over six months. We are starting to see some of these landlords give concessions or slightly soften their lease rates to try and encourage a tenant to move.”

He points to Alaska’s economic di-versity and our most important indus-tries, such as oil and gas, health care, the military and publicly funded proj-ects remaining stable, thus keeping our commercial vacancies low.

Filipenko says the Anchorage commercial real estate market has been largely unaffected by the nation-wide recession.

“In the Lower 48, it was not unusual for an investor to buy a property with a 5.75 percent capitalization rate and have a mortgage with a 6 percent inter-est rate. The investor was speculating that lease rates would continue to in-crease and that they would have a posi-tive cash flow in a year or two,” he said. “Well, we all know what happened. The economy slowed, lease rates went flat or declined, and properties decreased in value – so we began to see foreclosures across the country.”

Although the Anchorage com-mercial market might not have been directly affected by the national reces-sion, Lower 48 retailers scaling back have caused a bit of a pinch. Companies such as Gottschalk’s, which once had a presence in the Anchorage market and has since gone bankrupt and closed their doors, have had an impact the local economy.

“Because of the Lower 48’s reces-sion, we are seeing national brokers for these stores expecting concessions and reduced lease rates from the landlords.

“Alaskans benefit from having more anticipation and being better prepared for times of economic slowdown.

Construction companies, lending institutions and property developers remember those times and therefore are much more cautious than the rest of the United States. The rest of the country didn’t experience the recession we had, so perhaps they were more prone to fiscal irresponsibility.”

– Bill Popp • President and CEO • Anchorage Economic Development Corp.

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The Anchorage market has been sta-ble, so there is a disconnect between the national brokers and our local landlords, and transactions are tak-ing two to three times longer to com-plete,” Filipenko says. “Another aspect of the Anchorage market affected by the Lower 48 is financing. Outside lenders have severely tightened their requirements, not only by reducing the loan to value, but also by requir-ing borrowers to have better credit and more experience with commercial property and are looking farther back into borrowers’ credit histories.”

It seems as though Outside lend-ers can afford to be selective. In fact, the demand for refinancing current commercial loans is about five times higher than the supply of money through commercial lending institu-tions, according to Jason Baer, a mort-gage loan originator with Alaska USA. National retailers that are unable to refinance loans carrying undesirable interest rates may be forced to reduce overhead in other ways, which could potentially mean closing their doors.

Still, Filipenko predicts continued

stability for the Anchorage commercial real estate market, and says it is a good time for both buying and selling. “With low interest rates and stable prices, I think it’s a good time to buy,” he says. “And if you are thinking of selling in the next five years, now is the time to do it. Capital gains tax cuts will expire at the end of 2010, increasing the rate from 15 percent to 20 percent.”

RESIDENTIAL FARING WELLThe Anchorage residential real estate market seems to be faring even better than the commercial market. Popp and Calvin both cite local lenders’ reluc-tance to engage in subprime lending as one of the main reasons for Anchor-age’s low foreclosure rate.

Subprime is a blanket term used to describe almost any type of loan with a higher-than-usual risk of default, due to the borrower’s poor credit his-tory or a low capacity for repayment. This type of loan was rampant dur-ing the housing bubble in 2006 and 2007. In fact, subprime became such a popular term that it was actually designated Word of the Year by the

American Dialect Society in 2007. Other consumers hoping to cash

in on the housing bubble took out adjustable-rate mortgages believing they would quickly gain equity as home prices rose, and could then re-finance at more favorable rates. Un-fortunately, as we all learned, supply soon overtook demand, and housing prices plummeted. Homeowners were left with little to no equity and were often unable to repay mortgages.

Alaska lenders have tended to be more conservative in issuing these types of loans, perhaps because the recession suffered in the 1980s remains fresh in their minds. Alaska also didn’t see a huge surplus in new housing develop-ments found in many suburban areas across the country.

“Lenders here have been very pru-dent and sensitive about not making speculative investment, and we have a very well-balanced market,” Popp says. “There is no dramatic oversupply of houses, and our foreclosure rate is very modest. In fact, Alaska is ranked second lowest for foreclosures nationwide.”

Another factor helping to keep the

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Anchorage real estate market healthy is the limited supply of land suitable for housing development. We are geo-graphically situated between mountains on one side and water on two sides. “The rest of the country has seen fore-closures nearing 10 percent or 15 per-cent, but we simply haven’t suffered that badly,” Popp says.

Jack Little, real estate specialist with Prudential Jack White/Vista Real Es-tate, says the local residential market-ing is holding steady so far in 2010, and remains quite active, especially in the $200,000 to $499,000 price range. This is ideal for young families looking to purchase starter homes. Little says that homes priced in this range take an average of 3.32 months to sell, and the average residential price for a home this year so far is $326,585, only a 1 percent increase from last year, although homes are generally taking longer to sell.

Little says it is an excellent time to purchase a home, with interest rates at around 4.8 percent as of May. With homes on average taking longer to sell, buyers can often negotiate in their favor and receive concessions from

sellers. He also predicts even more homes coming on the market through-out the summer.

All sources surveyed predict contin-ued stability in the Alaska housing mar-ket, and good news for the economy in general.

ECONOMY HOLDINGFourth quarter 2009 marked Anchor-age’s first decline in employment in 20 years, but Popp insists that in gen-eral, our markets are quite healthy. He reports hearing anecdotal evidence through other industry folks that va-cancy rates are fairly low in strip malls, which is a great sign that small busi-nesses are flourishing. “And of course big-box stores have had phenomenal growth in the past several years, with the addition of stores like Target, Kohl’s, and stores like Walmart and Walgreens expanding their presence,” Popp says.

Baer agrees Alaska has a bright fu-ture in real estate. “As Alaska contin-ues to expand its resources and people want to move here to take advantage of our growing opportunities, our state

will continue to develop,” Baer said. Calvin is keeping an eye on national

trends. He predicts increased stability for us as the national economy recov-ers, and emphasizes we benefit a great deal from tourism and seafood, indus-tries greatly affected by economic con-ditions outside Alaska. When it comes to federal dollars, he says “Alaska does receive a lot of federal money – largely because of our military bases, and we will likely benefit from spending some of the economy recovery funds.”

Calvin is quick to caution, however, that in the long-term, Alaskans will have to face the imminent decline of oil production, but in the meantime, high oil prices and increased economic di-versification are keeping our economy from failing.

“We may not have seen the incred-ibly booms some communities saw in 2005 and 2006, but we also did not see the bust,” Filipenko said. “Our real es-tate market has had long, steady growth over the last 20 years, just like the rest of our economy. Just like the old fable: ‘The Tortoise and the Hare,’ I will take slow and steady any day.” ❑


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How two Alaska contractors boost profits

Equipment Management

Strategies

BY BLYTHE CAMPBELL


Alaska contractors rely on equipment to build the $7 bil-lion in projects forecast for

Alaska in 2010. Making the right decisions about acquiring, moving and maintaining equipment around Alaska affects contractors’ clients, the public – and the companies’ profits. Two Alaska companies, STG Inc. and Granite Construction, are among those managing equipment with an eye to the bottom line.

STG INC.At STG’s headquarters in south An-chorage, a 250-ton Kobelco crane towers over the yard. The crane is one of the larger pieces of equip-ment STG owns, along with a large inventory of other heavy construction equipment, including dozers, loaders,

dump trucks, cranes, cement mixers, excavators and pile drivers. STG also has dozens of four-wheelers and hun-dreds of pieces of smaller equipment.

STG focuses on projects involving utility-scale wind farms, tower construc-tion and pile foundations, along with power generation, distribution and bulk-fuel storage facilities. For the 2009 season, STG had projects in 29 villages from the Aleutians to Barrow.

Owner Jim St. George started STG in Kotzebue in 1991 and bought Alaska Crane in 2001. “That purchase was a great thing for us,” said St. George, who had been working out of his house. “It gave us a place to work, access to equip-ment we needed, and a good line of business on its own.”

The Alaska Crane fleet is rubber-tired for road use, while the cranes used by

STG are tracked, but there are synergies between the two businesses. St. George says although it’s a different business, there’s a good interface.

STG prefers to own equipment rather than lease or rent it. “We’re work-ing in remote areas, and need to control our own destiny,” St. George said.

In 2009, there were significant tax advantages to purchase new equipment as a part of the economic stimulus plan, and STG accelerated some of their equipment purchases to take advan-tage of that opportunity. “We definitely invested more heavily,” St. George said.

St. George works with local dealers for much of his equipment, but the crane market is a world market, with new and used cranes bought and sold by people all over the world. “The In-ternet has really changed the market,”

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An STG Kobelco crawler crane makes headway during transport down the Yukon River to one of the company’s remote job sites.


St. George said earlier in the year. “Last week I watched a bidding war between a buyer from South Africa and one from Dubai.” The Internet also has made the market more stable, as the value and price of equipment is agreed through trades. With the worldwide recession, new and used equipment is readily available today, whereas a few years ago it was scarce and expensive.

St. George keeps up with equipment trends through contacts with dealers, trade publications and construction equipment trade shows. He attends several big trade shows in the U.S. and Europe, including the BAUMA international trade show in Munich and ConExpo in Las Vegas, which features more than 2 million square feet of the latest construction equipment. He doesn’t make buying decisions at trade shows – his equipment purchases are planned in advance – but he does use the opportunity to learn.

Most of the equipment STG purchases must be modified for Alaska conditions. Common upgrades include installing radiator covers and heaters, along with building and modifying equipment for the unique construction conditions the company faces. “If there’s enough work for a custom piece of equipment, or it gives us an advantage in winning a job, we’ll invest in it,” St. George said.

With all of that equipment and projects in multiple locations, moving equipment around efficiently is impor-tant. STG tries to keep its investments in people and equipment working all year, with fall, summer and winter work. “The goal is to keep equipment and people as busy as you can,” he said.

The company plans two major stagings per year, getting spreads of equipment in place for the upcom-ing work, and St. George says he used to plan those in head. Now that the company has grown, the company started scheduling on a spreadsheet. Staff gather around a large screen in St. George’s office to plan project lo-gistics, including equipment moves. The spreadsheets list all equipment needed for a job, where the equipment is currently located, where and when it needs to move, and how it will be transported. Much of the equipment is transported around Western Alaska by barge, and the logistics are complex. With fuel and transportation costs both increasing dramatically in the last sev-eral years, careful planning pays off.

STG does most repair and main-tenance in the field, with equipment returned to Anchorage only for major overhauls. The cost of moving equip-ment back and forth, and the time involved, makes it more cost-effective

STG’s rural projects, particularly those in Southwest Alaska, frequently require construction activities to take place during the winter months to take advantage of frozen ground conditions. The above photo was taken during STG’s construction of 23 miles of electrical interties between the

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to leave it staged closer to the work in the company’s two yards in Nome and Bethel.

Through the strategic management of equipment purchases and staging, STG has experienced relatively strong growth over the past five years, em-ploying a skilled work force of op-erators across Alaska. Making smart decisions about the company’s equip-ment has contributed to the company’s success. “It’s like a giant chess board,” said St. George. “We have to move the pieces around strategically.”

GRANITE CONSTRUCTIONIn 2000, Granite Construction first invested in Wilder Construction, completing in 2008 the acquisition of Wilder, which had worked in Alaska since 1974 on heavy civil, highway and paving construction, site development and environmental remediation for public agencies, private-sector devel-opers, industrial, commercial and in-stitutional owners.

Granite uses a wide range of large equipment, including bulldozers, cranes, excavators, pavers, compactors, loaders, motor graders and scrapers, as well as both on- and off-highway trucks. The company also owns portable rock crushers and asphalt plants to service remote projects.

Granite has one of the largest equip-ment fleets in the country, with more than 7,000 pieces of rolling stock. Be-fore going to the new or used equipment market to acquire equipment for new projects, the company looks to Granite-owned resources first before renting or leasing. Granite typically owns its equipment and bases decisions to buy or lease equipment on utilization – the number of hours per year or per proj-ect it will operate the specific piece of equipment. The company constantly evaluates the size and makeup of their fleet in order to right-size its asset base for business opportunities.

Granite’s Alaska equipment depart-ment is based at its newly built shop facility in South Anchorage, and also has a Small Tools department in An-chorage to better manage traffic control devices and highly utilized tools like air compressors, jackhammers and more.

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mechanics who are familiar with the state’s wide-ranging weather condi-tions, and our staff understands the logistics challenges of remote work,” said Joe Spink, Alaska branch manager.

Granite has very high standards for equipment maintenance, which result in minimal project down-time and in-creased job efficiencies. Detailed main-tenance schedules minimize shop time and maximize return on equipment investments.

Don Pryor is Granite’s equipment manager in Alaska, supporting the company’s projects from one corner of the state to another. Although Granite performs most preventative mainte-nance activities at its shop facility in Anchorage, its mechanics are equipped to perform almost every maintenance task in the field if necessary. “We place our newer, most reliable equipment at remote jobs and keep our older gear closer to town,” Pryor said.

In June, Granite was running two 10-hour shifts with 12 mechanics at the shop in Anchorage, and had three me-chanics on the Dalton Highway job just south of Prudhoe Bay, one in Gakona

and three in the Matanuska Valley. “It’s a close-knit group,” Pryor said.

A core group of eight mechanics returns year after year – one has 15 years with the company – and Granite adds more during the construction season. In the winter, the maintenance crew is busy with preventive maintenance and re-pairs. Granite also works closely with the high-quality, Alaska-based equip-ment vendors and rental companies to provide both scheduled maintenance tasks and/or major rebuilds. “I’d say that 300 days out of 365 we have a piece of equipment in NC Machinery’s shop for preventive or other maintenance,” said Pryor.

Granite’s work on the Glenn High-way repaving project starts at 7 p.m. and runs until 6 a.m., so Pryor needs mechanics on duty to respond to any equipment problems. Project budgets and timelines are critical, and when equipment goes down it’s expensive. Diagnosing the problem and getting the right parts to the job site requires good communication.

“Nine times out of 10, when my phone rings, it’s a problem,” Pryor said.

“You need to make sure you understand exactly what piece of equipment needs work, and what needs to be fixed.”

Granite keeps a supply of parts at the job site, but if parts must be shipped or trucked, Pryor must make sure the right part gets there as soon as possible. One of Granite’s greatest strengths is the resource allocation between their operating groups. “If I need something, it’s just a phone call away,” Pryor said.

Mechanics need specialized training and advanced skills to work with the wide variety of equipment Granite uses, so the company sends them to Caterpil-lar and other schools, Pryor said. One large piece of equipment used to grind road surfaces for recycling asphalt and repaving has five onboard computers to manage grade control, the engine, track speed and the conveyors.

Depending upon the needs of the individual groups, Granite routinely shares equipment between regions, according to Spink. “Recently, Granite has moved asphalt plants, paving equipment, mobile sweepers and service trucks both into and out of Alaska.” ❑


North American company here to stay

PCL Construction Services

BY HEIDI BOHI


When PCL Construction Ser-vices entered the Alaska mar-ket in 2005, after winning

the contract for seismic and security retrofitting of the Ted Stevens Anchor-age International Airport (TSAIA), it was not the first time the company had contributed to one of the state’s most important construction transportation projects. Forty-eight years earlier, in 1957, PCL – then known as Poole

Construction Ltd. – was contracted to carry out the first paving of the Can-ada section of the Alaska Highway.

Although a lot has changed since then, today PCL is regarded as one of the largest and most-experienced construction firms in North America, management says, this year ranking No. 31 on Fortune magazine’s “100 Best Companies to Work For” list. As PCL develops relationships with the state’s

community of vendors, and commits resources to making a long-term invest-ment, one thing remains the same, PCL executives say: The company “aspires to be the most respected builder, re-nowned for excellence, leadership and unsurpassed value.”

Ernest Poole originally founded the PCL family of companies in 1906. His first job was to build a large farmhouse in Stoughton, Saskatchewan, and Edmon-ton became the site of the corporate office in 1932. In 1977, employees purchased the company from majority sharehold-ers John Poole and George Poole, sons of the founder, and today the business remains 100 percent employee-owned. The name of the company changed to PCL Construction Ltd. in 1979.

IMPRESSIVE PROJECT LISTToday, PCL has evolved from building four-room brick schoolhouses, banks and town halls to building almost any

Two views of PCL’s Fort Wainwright Warrior in Transition project, designed by Tetra Tech and kpb architects.

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structure imaginable across North America, ranging from general and specialized building to industrial, high-way, marine and heavy civil construc-tion. Some of the firm’s more familiar projects are Staples Center in Los An-geles, Calif., and the Mall of America in Bloomington, Minn. Alaskans who are familiar with the construction sur-rounding the Seattle airport in the past are familiar with the Central Link Light Rail system, of which PCL completed more than five miles of elevated track and the SeaTac Rail Station. For non-standard building challenges, PCL has a special projects division.

In addition, PCL Construction Group operates through a number of subsidiary companies in different construction sec-tors and geographic areas across North America with full-service district offices in 25 locations, including Florida, Min-nesota, Arizona, California, Hawaii and Washington state. Operations offices are located in Alaska and North Caro-lina. PCL Enterprises, headquartered in Denver, Colo., since 1975, is the parent company for all U.S. operations in more than 36 states, totaling more than $3 bil-lion in annual U.S. construction volume.

RETURN TO ALASKAAs the price of oil hovered around $60 and $70 a barrel between 2003 and 2008, PCL realized the Alaska econ-omy was again “firing up,” says Scott Ivany, Alaska construction manager. Since entering the market, the com-pany has learned there is also a lot of construction opportunity not driven by the petroleum industry, including the development of sustainable- and renew-able-energy resources being looked to for helping Alaskans lower the cost of energy, especially in rural communities.

“Construction development is some-thing that will continue in Alaska and the ups and downs of the industry are something of the past,” Ivany says of the company’s decision to open a regional office in Anchorage, which has 21 full-time staff – only one is from Alaska – and employs up to 40 subcontractors, depending on the project.

The first project PCL took on was the TSAIA South Terminal Seismic and Security Retrofit, which was completed in June. The four-year, $140 million project consisted of the remodel and


retrofit of the A and B concourses. It is the company’s mastery of technically complex projects like the airport that offer the extra challenges where PCL excels, and it is this technical expertise that sets the company apart from other competition in Alaska, Ivany says.

“The majority of competition in Anchorage only works in the Alaska market, which can limit the technol-ogy and expertise that is brought to the state,” Ivany says. “We can bring technologies to Alaska that the state hasn’t seen before, along with different ways of doing things.”

CURRENT PROJECTSOne of the most significant and visible projects PCL is working on is the Alaska Railroad Historic Depot Renovation. Re-storing the white building currently used to house some of the Alaska Railroad Corp.’s administrative offices, rail pas-senger lobby and tenant rental spaces in-volves everything from installing modern conveniences and environmental con-trols to moving outdated mechanical and electrical systems housed on the roof into basement spaces that originally housed one of the city’s first morgues. The $5.5 million project is slated for completion in January 2011. Besides practical im-provements, PCL says it will restore the character of building to its full 1940s glory as much as the budget will allow, including the roof and windows. While the upstairs will be renovated so it can continue to be used for administrative of-fices, the downstairs passenger areas will be restored so construction activity does not affect the railroad’s visitor season.

“It is these not-so-run-of-the-mill projects – the ones that present extra challenges – where we excel,” Ivany says.

Other PCL projects currently under way in Alaska include the design-build delivery of three separate buildings for the Warrior In Transition complex at Fort Wainwright, providing housing for soldiers recuperating from injuries sus-tained fighting overseas. The $21 million complex includes the primary facility, a 32-bed barracks that is 20,000 square feet, an administrative and operations facility of 8,200 square feet, a soldier and family assistance center that is 6,600 square feet, counseling offices and a day care center. Construction will be finished by the end of summer 2011.


The F-22A Field Training De-tachment Facility at Elmendorf Air Force Base involves constructing a 13,000-square-foot training facility for maintenance crews to support the bed down of the new F-22A Raptor fighter

aircraft. Project elements of the steel frame structure include a concrete foundation that meets Alaska seismic and frost heaving requirements, insu-lated metal skin and a standing seam roof. The facility will include secure

and unsecured offices, classrooms and two high bay maintenance-training areas. The scope of work also includes fire suppression and detection fea-tures, an intrusion-detection system, environmental controls, communica-tions, utilities, pavements, parking force protection, site improvements and contaminated soil remedia-tion. The $4.7 million project broke ground this spring and is expected to be complete March 2011.

Looking ahead, Ivany says the firm hopes to get more projects through the U.S. Army Corps of Engineers, in the health care sector, and with the Alaska Department of Transportation and Public Facilities, as well as with private developers, building on its suc-cess at TSAIA. PCL also has its eyes on several projects in Southeast and rural Alaska. The company has significant experience working in remote areas across the Arctic and in Canada and will continue to build relationships with Bush communities.

“We’re here for the long haul,” Ivany says. ❑Part of PCL’s work at the Alaska Railroad Depot in Anchorage included

putting a roof-top tank in the basement.Part of PCL’s work at the Alaska Railroad Depot in Anchorage included

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Days and nights in Deadhorse and the oilfieldsNorth Slope Conditions Test Workers

BY HEATHER A. RESZ

OIL & GAS

It takes folks of the hardiest mettle to handle working and living inside Mother Nature’s cold, dark, Arctic

icebox all day and night for weeks at a time. But every day – and every night – thousands of people get up and go to work in Alaska’s remote North Slope oilfields. They work 12 hours a day, seven days a week, for two-, three-, four- or six-weeks at a time.

They endure brutal weather where the mercury can sink to minus 68 de-grees with a wind chill of minus 115 or colder for days or weeks. They cope with nearly two months of darkness when the winter sun never crests the horizon, and 75 days in the summer when the sun never sets.

Yet the wealth generated by these 4,000 or so hardy souls generates one in three jobs in Alaska, most State tax dol-lars and the Permanent Fund Dividend, according to a study by the Institute for Social and Economic Research. Alaska currently supplies 12 percent of the nation’s domestic oil produc-tion, 3.4 percent of the country’s oil consumption, according to U.S. Depart-ment of Energy data published in June.

‘WE DO IN ONE WEEK WHAT MOST PEOPLE DO IN TWO’

It’s June 1 and breakup season is near-ing its end. The thermometer in Dead-horse reads 32 degrees. But the birds are coming back, and soon the water, grass and musk ox will follow.

“We do in one week what most people do in two,” says Celeste Rose, expeditor for CH2M Hill Construction.

For the next 21 days, she’ll work from 6 a.m. to 6:30 p.m., picking up materials and people in Deadhorse and driving them down the 16-mile dirt road to BP’s Liberty Field. Speed limits on the road vary from 25 to 45 miles per hour and are strictly en-forced, Rose said.

She’s one of two expeditors for CH2MHill Construction that make about four trips a day ferrying materi-als and people back and forth between Deadhorse and Liberty.

“We’re construction. We’re here to do the project and when it’s done, we’re out of here and on to the next one,” Rose said.

In her former life, she was a nurse’s aide at Providence Hospital for five

years. She got her first taste of con-struction work two summers ago work-ing for Quality Asphalt Paving.

“I really enjoyed being outside and doing physical work, so I started apply-ing for Slope jobs,” Rose said.

She’s worked on the North Slope for two years. And like the rest of the people here, Rose works more over-time hours in a pay period than she had of regular time when she worked for Providence.

“We work 84 hours a week,” Rose said. “And everyone but the 18- to 22-year-olds are in bed by 8 p.m.”

CAMPS INCLUDE VARIETYOF AMENITIES

Field operators like ConocoPhillips, BP Alaska and Pioneer Natural Re-sources Alaska Inc. provide comfort-able living quarters and good food to help ease the stress of rotating shifts and the restless, hemmed-in feeling workers can experience in the dark, sub-zero winter, according to Paul Dubuisson, manager of North Slope operations for ConocoPhillips Alaska.

The majority of workers are housed

A visiting dog chases a local fox through the heart of Deadhorse, the service center for Alaska North Slope oil fields.

Photos by Heather A. Resz


at oilfield camps at Prudhoe Bay, and at Kuparuk, Alpine, Milne Point, Endi-cott, Northstar and Badami. All of the camps include dining rooms, 24-hour snack centers and a television lounge with satellite TV.

Dubuisson said camps also include a variety of recreational facilities, ranging from exercise rooms and saunas in even the smallest facilities to movie theaters, basketball courts and a swimming pool at the largest facility.

However, some contract compa-nies like CH2MHill Construction and Carlile Transportation Systems house their employees outside of the field operations areas at the Prudhoe Bay Motel, Arctic Oilfield Hotel, the Arctic Caribou Inn or at Deadhorse Camp.

Rose gets a different lodging assign-ment each time. She said workers usu-ally share a room with a person who works the opposite shift and share a bathroom with the room next door. Or, in some cases, use a common dormitory style bathroom.

“You have to pay for nothing,” Rose said. “The only thing you’d have to buy is if you forgot your toothpaste or underwear.”

When that happens, Brooks Range Supply is the only store in Deadhorse and sells everything from necessi-ties to souvenirs. For many years, it was also home to Denver, the camp’s only cat.

IN THE ZONEWhen Barbara Stoll flew out of Dead-horse in May, it was zero degrees and there was snow and ice everywhere. As she was leaving, she noticed a few geese huddled together in the snow for warmth. When she returned two weeks later at the end of her time off, the snow was almost gone and geese were everywhere.

People headed back to work packing small, folding fishing rods is another sure sign of spring, Stoll said. For the next few weeks, these determined an-glers will spend their free time fishing for Dolly Varden.

“Deadhorse isn’t really a town. It’s a camp. It’s where we work,” said Stoll, warehouse manager for Carlile’s Dead-horse terminal.

She shares a room at the Prudhoe Bay Hotel with the other warehouse

manager who works the opposite two-weeks-on and two-weeks-off schedule. And their room shares a bathroom with the room next door.

Stoll said she is lucky to have luxu-ries like her own room, a coffee pot, Internet and cable TV.

“I’m in my own room, but I’m not home. I’m not sleeping in my own bed.”

She’s up by 4:30 a.m. And showered, fed and at work by 6 a.m.

By the time she gets off work at 6 p.m., her face is black from 12 hours of loading, sorting and reloading cargo for delivery to various North Slope clients.

Unless the weather is horrendous, Stoll walks the 100 yards from the Car-lile terminal back to the Prudhoe Bay Hotel where she spends 30 minutes on the elliptical machine. She finishes her day with a salad, hot shower and bed.

“You get in a zone,” Stoll said. “You get up. You go to work. Come home. Have supper. Every night you take the best shower you ever took. And in the morning, you get up and do it all over again.”

That’s been her schedule for the past two-and-a-half years. Before that, she worked at Fred Meyer for eight years as the food-receiving clerk.

“I needed something new to do,” she said. “And I wanted the two weeks off thing.”

She does similar work in Deadhorse, but with an added element of adventure and 44 hours each week of overtime.

“Normally, i t ’s really hard to get a job up here,” Stoll said. “You have to know someone or be lucky.” She said some job openings receive 300 to 400 applicants.

‘IT’S LIKE RUNNING A SMALLCOMPACT CITY’

ConocoPhillips has learned a lot in the last 40 years about working in the Arctic’s challenging conditions, according to Dubuisson, who spends three days a week at Kuparuk.

“Even the types of hoses used on the vehicles are different than you’d find on cars in Anchorage,” he said.

ConocoPhillips, Alaska’s largest oil and gas producer, has self-contained camp facilities for its crews at Alpine and Kuparuk, Dubuisson said. The fa-cilities have their own power, water and


wastewater systems as well as medical staff, volunteer firefighters and emer-gency response teams, he said.

“It’s like running a small compact city of 1,200 people or so.”

ConocoPhillips has many em-ployees who’ve worked on the Slope a long time and experience has taught the company that happy workers tend to stick around longer.

“We put a lot of focus on providing

for the safety and quality of life of our personnel,” Dubuisson said.

The main camps include ameni-ties like aerobics, yoga and jazzercise classes, weight lifting, pool tables, a movie theater, one racquetball court and even a piano room at Kuparuk, Du-buisson said. Employees also organize events like racquetball tournaments and summer Fun Runs, he said.

And workers are invited to bring

a TV and computer and use the GCI cable and Internet service provided in their rooms.

Feeding workers well is an important part of keeping them happy, Dubuis-son said.

For Kuparuk alone, ConocoPhillips ships 9,000 to 10,000 pounds of food up the Haul Road each day, he said.

EXTREME WEATHER REQUIRESEXTRA SAFETY PRECAUTIONS

More women work on the North Slope these days than in the 1970s when the pipeline was built. Today there still are far more men than women who work in Alaska’s oilfields.

From processing engineers to drill-site people, Dubuisson said Conoco-Phillips has women working in every job classification. A wide variety of workers are needed to keep the North Slope oilfields functioning, Dubuisson said.

Jobs include administrative and IT help, expeditors, warehouse workers, housekeeping, food service, forklift operators, office assistants, account-ing, bookkeeping, receiving clerks, materials coordinators, drillers, pipe-line and drill-site operators, com-mercial truck drivers and a variety of support positions.

“There are more women then you think up here,” said Stoll, warehouse manager for Carlile.

The percent of female employees in the North Slope work force varied among 7.2 percent, 10 percent and 17 percent with the three Alaska com-panies that responded to the question.

Rose offered cautionary words for women who think the wages and time off sound inviting.

“The women who work out in the field, the men don’t cut you any slack,” she said. “You get dirty. You work hard. You work in the weather. If you can’t pull your weight, you don’t belong out in the field.”

Productivity in general can suffer when temperatures in the sub-zero ice-box plunge to 65 below to 75 below and stay for a month, Dubuisson said. “It takes time to dress-up and dress-down.”

North Slope employers provide employees with top-quality cold-weather gear and insulated boots, he said. “We’ve learned a lot about proper clothing over the years.”

Barbara Stoll, warehouse manager for Carlile Transportation Systems’ Deadhorse terminal, helps unload cargo from a trailer at the Deadhorse terminal.

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But even with the best gear available, crews can only be outside for 30 min-utes at minus 50, Dubuisson said. “We have to take quite a bit of precaution to take care of people in those conditions.”

ConocoPhillips has rules, called “phase conditions,” that govern what kind of work can be done, depending on the weather.

Phase I – No work is done along roadsides and crews have to carry Arc-tic gear in their vehicles.

Phase II – Only essential work is done and all vehicles travel in convoys.

Phase III – No one travels except in an emergency, and then only as part of a convoy led by a piece of heavy equip-ment, such as a bulldozer.

SUBTLE NORTH SLOPE REWARDSWhen it’s 65 and it’s been sunny in Wasilla for days, Stoll said it’s hard to board her 90-minute Shared Ser-vices Aviation flight from Anchorage to Deadhorse.

BP and ConocoPhillips jointly own Shared Services Aviation, which flies parts, people and equipment to the North Slope. Operated by ConocoPhillips, Shared Services uses Boeing 737 jets and smaller aircraft exclusively to transport employees and the contract work force.

North Slope oilfields have a zero-tolerance, no drugs or alcohol policy. And it’s strictly enforced.

“If you fly up with alcohol on your breath you’ll be terminated; one guy was two days ago,” Rose said.

For those who can handle the tough rules, remote conditions, long hours and unforgiving weather, working on the North Slope also offers some subtle rewards.

“If a goose is standing in the middle of the road you wait for it. This is the animals’ land,” Rose said. “Animals have the right of way here.”

Stoll said sometimes drivers wait for an hour or more while caribou, musk ox, geese or other of the North Slope’s abundant wildlife cross the road. When she drives out into the field this time of year, she said she sometimes sees newborn caribou and musk ox calves moving with their herds.

“Even if they block the road for hours, you have to wait until the ani-mals move,” Stoll said. “Most of the time you don’t mind.” ❑


Man-made obstacles may closetrans-Alaska oil pipeline by 2014

BY MIKE BRADNER

OIL & GAS

Things aren’t looking so good in Alaska’s oil patch these days, but there are pockets of industry

activity, mostly smaller projects by small companies.

State officials and legislators are worried. Oil pays for about 90 per-cent of the State budget, and without it Alaskans would be faced with steep reductions in public services, ruinous taxes and a likely end to the popular Permanent Fund dividend.

That’s according to studies by the University of Alaska Institute of Social and Economic Research, a respected Alaska think-tank.

What’s more, one way or another, oil production accounts for about a third of the state’s economy, again ac-cording to studies by ISER. Given that, all Alaskans have a stake in what happens in the oil patch.

The good news is that companies are still active and State leaders are

beginning to recognize the problem and are looking for ways to help. State legislators stepped up to the plate last spring and approved new exploration and drilling incentives, though mainly for Cook Inlet, a smaller producing area in Southcentral. Gov. Sean Par-nell signed the bills and said he would push for more incentives for the North Slope next year.

Alaska now has some of the world’s most generous incentives for petroleum

A jack-up drilling rig over a producing platform.

©2010 Robert Ellis

High Taxes ,Expensive Exploration ,

Delayed Development


development. One new incentive for Cook Inlet, for example, would have the State pay $20 million to $25 million cash toward the cost of each of the first three exploration wells drilled with a jack-up rig. This is now attracting seri-ous interest.

WORLD’S HIGHEST TAXESThe not-so-good news is that despite the incentives the State’s overall fiscal structure imposes some of the world’s highest taxes on oil production, and that’s a touchy issue State leaders have yet to grapple with. The combination of high taxes, the high cost of working in remote areas, modest prospects for discoveries at least onshore, and what is said to be one of the nation’s toughest regulatory regimes may have created the perfect storm in driving off new industry investment.

A grim scenario, but the news isn’t all bad. As beset as it is with financial pressures from the Gulf of Mexico oil spill, BP is pushing ahead with its new Liberty oil project on the Slope. This is an offshore field to be reached by long-distance, extended-reach wells drilled from shore, some as long as eight miles drilled laterally from the surface loca-tion of the drill rig.

Another Alaska project for BP this year is a test production program for heavy oil the company is conducting. For years the major companies have looked for ways to develop massive heavy oil resources known to overlie the existing fields. BP has adapted a heavy oil production technology developed in Canada and has drilled test wells to try the technique on the North Slope.

In another project, Exxon Mobil Corp. continues with its development of a gas-cycling and condensate-production project at Point Thomson, 60 miles east of Prudhoe. The com-pany has completed two wells drilled into the high-pressure gas field and plans three more. The goal is to pro-duce, by 2014, 10,000 barrels per day of liquid gas condensates while inject-ing the produced gas back into the underground reservoir.

While it will produce the conden-sates and move them to Prudhoe Bay by pipeline, where they will be mixed with crude oil in the trans-Alaska oil

pipeline, ExxonMobil also hopes this project will show that condensate pro-duction can be expanded. If it can’t, the facilities can be used to support natural gas production for a gas pipeline.

BADAMI REDEVELOPMENTAlso east of Prudhoe Bay a small in-dependent, Denver-based Savant Resources, is redeveloping the small Badami oil field. BP developed Badami originally, but the field did not reach production expectations due to reser-voir problems. Under an arrangement with BP, Savant and Arctic Slope Re-gional Corp., as a minority partner, are redeveloping some of the Badami wells and plan to restart production this autumn. Savant also drilled an explora-tion well nearby, which was successful, the company said, which will contribute production that will be processed in the Badami production facility.

West of Prudhoe Bay, a new explora-tion well is planned by Brooks Range Petroleum, the operating company for several small independent firms. The company will drill a new well south-west of the Kuparuk River field. Brooks Range drilled exploration wells last year north of the Prudhoe Bay field and is now assessing those results.

ANADARKO FOOTHILLS GASSouth of Prudhoe Bay, Anadarko Petro-leum Corp. is still evaluating its natural gas prospects in the foothills area. Gas has been discovered, but additional testing is required, which may need a drill rig and construction of an ice road to the remote area. Those will be expensive undertakings. Anadarko owns rights to the Gubik gas deposit, a discovery made years ago that was recently tested by Anadarko. It isn’t known yet whether there is enough gas at Gubik for commercial development, however, and Anadarko’s plans are also contingent on a large natural gas pipe-line moving forward, or, alternatively, the construction of a smaller 24-inch gas pipeline being investigated by the State.

UMIAT, NPR-AIn the same region, Renaissance Umiat LLC, a small independent based in Houston, is working on commercial development of a small oil deposit at Umiat, on the border of the National

907.278.1877


Petroleum Reserve-Alaska. Oil was discovered at Umiat decades ago in early U.S. Navy exploration, but was never developed because of the small size of the deposit. Renaissance be-lieves it can develop and produce the field using new drilling technologies. A proposal by the State to build a re-source road to the area from the Dal-ton Highway has boosted prospects for the Umiat project because the road would provide the key infrastructure for a small pipeline taking oil to the trans-Alaska oil pipeline.

The company’s plan is to place the pipeline in gravel alongside the road, the company says. The State recently approved an appropriation for an Environmental Impact Statement for the road. If the road is built it would help Anadarko’s exploration for gas because the annual construction of expensive ice roads would no longer be needed.

COOK INLET GASIn Cook Inlet, the new State incentives have prompted new interest by com-panies. Apache Oil and Gas, a major

U.S. independent, has expressed inter-est in buying acreage, as have other companies. One is a Tennessee-based company, Miller Petroleum, which has acquired the small Redoubt Shoal and West MacArthur River fields. The new interest is sorely needed because Cook Inlet’s existing oil and gas fields are decades old and nearing depletion.

Of immediate concern: there may not be enough gas produced from the region’s aging gas fields to meet total gas demand by 2014. There does not appear to be enough new drilling under way this year to assure that gas supply. New drilling for gas is actually down this year compared to last.

Unless new gas discoveries are made or until a gas pipeline can be built from the North Slope – 2017 or 2018 is the most likely date – the most likely source of new gas to assure supplies for the region is, ironically, imports of liquefied natural gas from Asia.

Geologists have said there is more oil and gas to be found in Cook Inlet, but the discoveries are likely to be modest and the costs high. Still, the Legislature has bet State cash on the prospects, in

the form of the new incentives, and companies are showing interest.

TAPS FOR TAPS IN 2014?For the North Slope, the underlying problem is that production from the big producing fields is continuing to decline at rates of 5 percent to 6 percent a year. There’s insufficient exploration to find enough new oil to flatten the decline. Projects like Shell’s offshore program, or ConocoPhillips’ develop-ment of known deposits in the NPR-A, could provide needed oil, but they are now delayed by federal restrictions and permitting problems.

There are worries that the amount of oil moving through the trans-Alaska oil pipeline may approach the point within just a few years where the pipe-line will begin experiencing operating problems. Alyeska Pipeline Service Co., which operates the pipeline, says the point at which operating problems set in is a throughput of 500,000 bar-rels per day. The pipeline now moves about 640,000 barrels daily, but the rate is expected to decline to 500,000 barrels per day by 2014.

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Ironically, the geologic potential of the North Slope is huge. Geologists say that the Slope is one of the world’s greatest hydrocarbon-generation sys-tems, so the oil and gas are clearly there. With a pipeline running at a third of its capacity, it’s puzzling as to why there isn’t more exploration. Even outside the North Slope, the state’s large Interior basins have seen very little exploration. What drilling that has been done, such as recent exploration in the Nenana Basin west of Fairbanks and the Cop-per River Basin near Glennallen, shows indications there is petroleum to be found even if the wells did not result in commercial discoveries.

MAN-MADE OBSTACLESOne can’t change the facts of geogra-phy and high costs, but some of the biggest impediments to new oil devel-opment are government-made. Taxes aren’t the only obstacle. There is the federal government.

It’s widely agreed that the best chances for getting new oil into the trans-Alaska oil pipeline relatively soon lies with several prospects Shell wants to drill in the Beaufort Sea off the northern coast of Alaska. Shell also plans exploration in the Chukchi Sea, where the prospects are even better, but the remoteness of this area means years of lead-time in developing pipe-lines. The Beaufort prospects, in con-trast, are nearer to shore and nearer to existing pipeline.

Shell wanted to drill in 2007 but was stopped by lawsuits. The com-pany was primed again to drill in 2010, but was again stopped when President Obama ordered a one-year morato-rium on Arctic offshore drilling, part of a broader moratorium on all off-shore drilling in response to the Gulf of Mexico well blowout and spill. Shell hopes the delay will be only one year, but it could easily slip to two years, company officials worry.

Meanwhile, two other unexplored, but inviting, onshore North Slope ar-eas are also closed to development. One is the coastal plain of the Arctic National Wildlife Refuge, east of Prud-hoe Bay, which geologists believe has best prospects for major discoveries of any onshore U.S. area. The other, surprisingly, is the NPR-A, the huge

23-million-acre tract set aside in 1923 for its oil and gas potential.

Exploration has been only modestly successful in NPR-A so far, but the huge reserve is still considered lightly ex-plored. Even so, modest discoveries have been made. Now, however, the federal government may impede access to discoveries that have been made, an action that will further chill investment.

ConocoPhillips has been working for more than five years to get permis-sion to build a road and pipeline bridge across the Colville River to reach

discovered oil on the west side, which is within the NPR-A. Federal agencies have refused, so far, to give permits for the bridge to be built and have at-tempted to impose their own solution, an underground pipeline crossing and no road access, which the industry feels are uneconomic solutions.

Given the rich geologic endowment of both the North Slope and Cook Inlet, the solutions to the problems of declin-ing production seem so near at hand. But the problems, many of them man-made, loom large as well. ❑


While the entire state anxiously watches the petroleum indus-try reduce its investments on

the North Slope – which in turn adds to the continuing decline of oil production that has been on an unsustainable trajec-tory for the past two decades – Valdez, more than almost any other community in Alaska, is especially nervous about the harsh reality of what it will mean for this seaside town of 4,498 residents if the industry does not make the capital investments needed to support future oil and gas developments.

Valdez is the southern terminus of the trans-Alaska oil pipeline. Super-tankers navigate the deep, ice-free wa-ters of Valdez Arm each day, handling

more than 1.5 million barrels of crude oil. Without long-term commitments, it is not out of the question the reduced throughput would result in the trans-Alaska oil pipeline not being able to ef-ficiently operate the pipeline and pump stations because it would be carrying far below the daily number of barrels it was designed to carry, requiring fewer employees for the Valdez operation.

BIGGEST CHALLENGE“The biggest challenge for Valdez is that we’re still too comfortable with the amount of tax revenue and the jobs the oil industry provides to make us want to look as seriously as we need to at eco-nomic diversification in the community,”

says Lisa Von Bargen, community and economic development director for the city of Valdez. “The oil industry pro-vides 85 percent of our tax base and if that dwindles, being able to maintain a community infrastructure and basic services will be very difficult.”

Although the petroleum industry is considering how it can approach the future strategically, Von Bargen says the city does not know what this will ultimately mean for Valdez in terms of jobs. Developing a strategic plan for the community’s future is one step the city needs to take to prepare for the possibility of losing its largest source of taxes and employment.

“We knew in 1977, when the first

TOWNS IN TRANS IT ION

Not just for supertankersValdez

BY HEIDI BOHI

Photo by Larry Weaver, Public Works Director for the City of Valdez

In August 2009, “The World” docked at the John Kelsey Municipal Dock in downtown Valdez for a day during an international excursion. Managed by ResidenSea Ltd., “The World” cruise ship is a luxurious private community at sea featuring residential options and rentals. City of Valdez officials continue discussions with several cruise

operators about port improvements that would better accommodate larger ships.


barrel of oil came down the pipeline the mainstay would probably only last 20 years,” she says. “Here we are 33 years later and Valdez still doesn’t have a strategic plan for its future. At some point we need to recognize that oil is not going to be around forever.”

IMPROVING COMMUNITYIn the meantime, Valdez is taking a number of smaller steps to improve the quality of life and make the community more appealing to companies doing business there.

Known as the “salt-water play-ground” for the Interior, the city harbor is a significant economic engine for the community. Marine-related improve-ments, though still in the early planning stages, are some of the most important economic development projects, says Bert Cottle, Valdez mayor for 10 years. The small boat harbor, which was built to service 500 vessels, accommodates up to 800 boats by rafting them to-gether or “stacking” them, currently has a seven-year waiting list with 150 boat owners from the northern region waiting to get a slip. Working with the

U.S. Army Corps of Engineers, the city is looking at building a new har-bor, which will end up being a 10-year process – start to finish – with a price tag of about $50 million. The city cur-rently has $5 million dedicated to this improvement. Even with this 330-slip expansion, Cottle says the city still an-ticipates having to start another wait list in five years. To date, the feasibility study has been completed and is out for review, while the city is working on putting a local, State and federal funding package together.

PORT IMPROVEMENTSAt the same time, the city also has im-provements to the Valdez container terminal on its to-do list as a way to in-crease port usage. Valdez is the farthest north ice-free port in the country with the best access to Alaska’s Interior and to the Pacific Northwest, northern Canada and Pacific Rim trade routes, making shipping and transportation one of the largest industries in the community.

Port improvements also will help the community continue to court the cruise ship industry, Von Bargen

says. At one point, the community had more than 90 dockings a year until this number first started declining in 2003. When the economy collapsed and cruise lines deployed ships to other destinations, Princess Cruises was forced to cancel the remaining nine dockings scheduled for this summer. The city remains optimistic, though, as it continues discussions with several cruise operators about port improve-ments that would better accommodate larger ships.

Cruise companies have indicated they would also like to see the com-munity expand the number of shore excursions available to passengers. While many entrepreneurs are con-sidering these businesses, Von Bargen says few people are willing to bank only on what’s possible. “It’s difficult to build a business to accommodate cruise ship passenger if you don’t know if they’re going to come and if they’re going to stay,” she says. “With them not being here right now, business owners would have to depend on the road and group traffic the community has,” which can be more difficult to quantify.


EXTREME SNOW SPORTSValdez is known as the North Shore of heli-skiing. As tourism continues to be one of the mainstays of the econ-omy, and one of the most promising industries for economic diversification, Von Bargen says the community also is looking at developing Valdez into a winter-resort destination, with the main attraction being the unrivaled down-hill skiing and snowboarding. The World Extreme Skiing Championships, hosted by Valdez in the early 1990s, are expected to return to the community. At the same time, heli-skiing operators continue to bring clients from around the world for winter events such as Tail-gate Alaska, an extreme-snowboarding competition that is one example of the types of events that are drawing at-tention to Valdez as a winter resort destination similar to Whistler, Brit-ish Columbia, Canada. Although still in its infancy, Von Bargen says those involved are working diligently on a development that would capitalize on what is regarded as some of the best extreme skiing and snowboarding in the world.

IN THE MIXUnder the city’s direction, Valdez is also investigating the feasibility of incubating a training and testing platform in the community, based on successful results hosting military per-sonnel training and equipment testing exercises in the past. The tall coastal mountains mean the community can concurrently host alpine and maritime training and testing year-round. The feasibility analysis for this program is getting under way.

Although the Valdez hospital was completed in 2004, the community is now working toward securing funding for a major addition, including expan-sion of the long-term care and physical therapy sections, the addition of an as-sisted living facility, and adding an MRI unit to accommodate locals and those from surrounding communities. The initial feasibility work is complete and a design team selected. The expansion is expected to cost several million dollars and the city will work with the hospital’s operator (Providence Valdez Medical Center) to develop an operations and funding plan.

“Fixing what we already have” is also high on the priority list, Cottle says, including roads. Working with the Alaska Department of Transpor-tation and Public Facilities (DOTPF), the city is lobbying for improvements to get bridges and load weights along the Richardson Highway improved so it can be used as another route that feeds into the Interior. As is the case with most things, though, it all comes down to money, which puts Valdez in the second seat as it competes with other transportation routes, such as the Parks Highway, one of the most traveled roads in the state. Cottle is also working on improving city roads that need paving, and water and sewer improvements.

The $5 million Kelsey City Dock up-lands project includes improvements to Ruth Pond, about the size of a small lake, which recently re-opened as a park after several upgrades were made to the popular recreational area. The project included cutting away brush, dredging the pond so it increased from eight feet deep to 20 feet deep, provid-ing a healthier ecosystem for the fish, installing more picnic facilities, and upgrading the bathrooms. Another potential recreation improvement is the proposed ice skating rink, which would be covered and refrigerated. The city is still in the process of de-veloping pro forma financials for the facility, though Cottle says he expects it to be a big number.

Petro Star is also expanding its refin-ery to produce ultra-low-sulfur diesel fuel that will result in 24 new perma-nent full-time jobs and 350 contractors working on the expansion, which is scheduled to be finished in October. Silver Bay Seafoods also recently opened in Valdez, further supporting the commercial fishing industry.

Looking ahead, Von Bargen says while most people move to Valdez for only a short period of time – typically five to seven years – making it difficult for locals to have a long-term perspec-tive on the community’s future, she believes in the potential of Valdez and the minority of residents who are com-mitted to investing in the community’s well-being. “My hope for the future,” Von Bargen says, “is that we can live up to that potential.” ❑

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New options for insurance and retirement plans

Evolving Employee Benefits

BY PEG STOMIEROWSKI

EMPLOYEE BENEFITS

Employers reviewing and assess-ing employee benefit options in a period of prolonged recession

and federal health care reform may be experiencing some sweaty palms.

Besides the rising cost of health in-surance premiums, companies are brac-ing for the challenge of complying with changing rules and regulations – some haven’t yet come on line – and learning to adjust to new ambiguities. Matt Lar-kin, vice president of employee benefits for Wells Fargo Insurance Services in Alaska, explained many of the changes are to be phased in over a period of years – some not until 2014.

His department, with offices in An-chorage, Soldotna and Homer, is one of several broker services that offer to review and compare bids, then advise businesses on how best to arrange in-surance programs. After salaries and

wages, health and retirement plans tend to top the expectations of prospective employees, and small businesses also hoping to recruit top talent find it hard to compete with the benefits that larger companies can offer.

Recent insurance industry research suggested while traditional benefits of-fered by large employers remained key factors in employee loyalty – health coverage more so than retirement ben-efits – advancement opportunities and company culture had yielded impor-tance. While employee benefits showed resilience in the wake of the recession, for employers, controlling the associ-ated costs seemed to have become a greater priority by 2010 than employee retention. Attention remained trained, in the meantime, on productivity.

The need to cut costs has led some firms to accept higher deductibles for

core health plans – and to offer volun-tary benefits a la carte-style, including disability, life and dental insurance, as well as supplemental insurance to help with the costs of accidents, hospi-tal stays or critical illness, according to “The Value of Voluntary Benefits,” an April Entrepreneur magazine article.

While the pending changes are expected to have widespread ef-fects, larger firms are more likely to be already turning to consultants and educating their employees about navi-gating the changes, Larkin said, while it’s the smaller employers that might be expected to feel more stressed and confused about what it all means.

Small businesses face premiums that are 18 percent higher on average than large businesses pay for the same cov-erage, according to the Small Business Administration (SBA). Sam Dickey,

Matt Larkin, right, vice president for Wells Fargo Insurance Services, discusses changes associated with the Patient Protection and Affordable Care Act with Bosco Baldwin, HR executive for the Alaska Commercial Company.

Photo by Chris Arend/Courtesy of Wells-Fargo


SBA spokesman in Anchorage, said changes associated with the health re-form act should allow some of these smaller businesses to pool together to achieve greater economies of scale and thus more affordable plans. A health care tax credit also is expected to play a role in alleviating cost pressures.

While the ability to provide health benefits has been a primary concern of small employers for at least 25 years because of the multifaceted nature of the changes, many nuances prob-ably weren’t on the radar of many small- to mid-size employers yet – certainly not enough to be causing jitters, Dickey reflected at mid-year. “I doubt many will be closing their doors because of it,” he said, of new responsibilities in regard to expand-ing access to benefits.

Nationwide, figures show only about 10,000 to 12,000 small businesses are likely to be heavily affected by the reforms, since most of the 200,000 that employ more than 50 people, a key threshold under the legislation, are probably already providing benefits, Dickey says.

ALASKA FACES ADDITIONALCOST CHALLENGE

Businesses long challenged by rising costs are under growing pressure, un-der the federal health reforms, to offer expanded coverage. One reform, for instance, allows offspring to remain on their parents’ health insurance plans until age 26. Some businesses, accord-ing to Forbes research, aren’t waiting to move in these new directions.

In the last decade, employer health-care costs have risen about 150 percent, according to a study of company health and wellness programs issued in Febru-ary by Healthways. More than 60 per-cent of Americans, it reported, obtain health insurance through an employer-based plan.

At Premera Blue Cross Blue Shield of Alaska, Jeffrey Davis, president, says having a sustainable health care sys-tem is especially challenging in Alaska, where care tends to cost more than in the Lower 48. About 87 percent of the premiums Premera receives go to pay medical claims, he reported, and here, “we know the cost issue is critical based on conversations with our customers.”

Other carriers in Alaska include Aetna, Celtic and Golden Rule.

Besides expanding its wellness ini-tiatives, as a not-for-profit company operating on a slim margin of about 1.5 percent, Premera is working to keep

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administrative costs down, Davis re-ported. It also is trying to be proactive, he said, “given the incomplete work of federal reform,” in partnering with such providers as Providence Alaska Medical Center and emphasizing pay-ment for quality of outcomes rather than volume of services delivered.

WELLNESS APPROACH DRAWSNEW INTEREST

In the United States, while 58 percent of employers offer some type of wellness coaching or other benefit – sometimes Web-based – to control costs and im-prove productivity, the percentage of larger firms (200 or more workers) of-fering at least one such program rose from 88 percent in 2008 to 93 percent in 2009, according to Healthways. It reported that for every dollar spent on wellness programs, medical costs fell by about $3.27.

While employer health and wellness programs have helped curb the rise in costs, there are wide variations in performance. Newer approaches are being designed to serve a wider cross-section of people and needs, including consideration of the role of stress in reduced productivity. Communication and incentive strategies were consid-ered key drivers in employee engage-ment in such programs.

According to the Healthways study, lifestyle factors play a role in health costs, especially smoking and obesitiy, two factors cited for rising U.S. health care costs.

“While 70 percent of smokers say they want to quit and 40 percent try each year, almost 20 percent of Ameri-can adults still smoke,” the study found.

“While 55 percent of Americans say they would like to lose weight and 27 percent are making a serious attempt, 67 percent of adults are overweight or obese. In five years, health care costs for obese Americans grew 82 percent; for overweight Americans, 36 percent and for normal-weight Americans 25 per-cent,” according to Healthways data.

In Alaska, Vivacity was launched by Premera as an independent com-pany to address employer demand, ac-cording to Dr. Dave Johnson, Vivacity president. He pointed to poor lifestyle choices, rising technology costs and greater use of services as drivers of

medical costs, and said health care costs for employees engaged in such programs average 30 percent lower than those who don’t participate.

While wellness programs tradition-ally have been limited to larger employ-ers, Johnson said, Vivacity is offering services to companies ranging in size from 25 to 499 employees.

401(K) LEADSRETIREMENT BENEFITS

In the retirement arena, a recent survey of more than 350 companies, designed by Wells Fargo Institutional Retirement and Trust, suggested most employers had failed to embrace what Wells Fargo managers consider to be an increas-ingly central role in helping Americans achieve more secure retirement though company-sponsored 401(k) plans and other tax-qualified plans.

As the responsibility for retirement increasingly is shifted from traditional company pension plans to employees

themselves, 401(k) savings are getting more attention. “Plan sponsors need to embrace their role in helping employ-ees focus on maximizing their retire-ment plan,” Joe Ready, co-director of Wells Fargo Institutional Retirement and Trust, was quoted as saying.

Meanwhile, more companies that once had waiting periods for enroll-ment have switched to automatic 401(k) enrollment. Other sources of retirement savings include 403(b) plans for educa-tors and Roth IRAs.

While private-sector employees have been in the midst of a significant shift from earning a pension for life to managing retirement on their own, a company news release noted, the sur-vey found that most employers have been slow to realize the magnitude of what’s at stake for their employees. Most responses, it noted, indicated belief that the 401(k) program was central to attracting and retaining em-ployees and that attaining company 401(k) matching funds was more key to employee participation than the motivation of saving enough money to retire comfortably.

When employers were asked about their primary goal for retirement plan participants in 2010, about a third of respondents listed educating employees about retirement saving, 22 percent noted increasing participation and an-other 22 percent said their focus was to increase savings amounts.

And asked about primary challenges and concerns, 26 percent noted “im-pact of market volatility on account balances,” 25 percent said participant use, and 20 percent indicated “provid-ing employees with the financial ability to retire.”

“It is a concern to Joe and me,” Lau-rie Nordquist, co-director of Wells Fargo Institutional Retirement and Trust, said, “that one in five companies today see their role as supporting and giving their employees the best opportunity to cre-ate a financially viable retirement. In our minds, this should be the number one concern,” she said. “Volatility is certainly an issue, but it is a component of a bigger picture.”

Ready and Nordquist also noted the need for greater measurement and analysis of retirement education pro-grams effectiveness.

Dr. Dave JohnsonPresidentVivacity

Dr Dave Johnson

According to the Healthways study,

lifestyle factors play a role in health costs, especially smoking

and obesitiy.

Photo courtesy of Vivacity

Almost half of the companies sur-veyed reported they don’t measure results and a slim 10 percent said they help employees forecast anticipated retirement income and compare it to expected retirement savings needs.

Rod Shipley, Wells Fargo Institu-tional Retirement and Trust vice presi-dent and Alaska regional director, says many companies have cut back on their 401(k) match in an effort to save money or to help offset rising health care costs. Fortunately, this has not been the experience for most Alaska-based employers, he said, but many employees working for companies headquartered outside of Alaska have been impacted.

While public-sector employees, in-cluding military and teaching person-nel, tend to enjoy the most retirement security, “pension plans for private-sector employees have been disappear-ing quickly,” Shipley said. Today, only 33 percent of the private-sector workers with a retirement plan have a defined benefit pension plan, compared to 84 percent 30 years ago, he said.

At the same time, no one can be sure what Social Security will look like in the future. While there likely will be a benefit, Shipley said, Social Security was never intended to be employees’ sole source of retirement funds.

The projection, said Shipley, is that by the year 2030, Social Security will replace only 28 percent of pre-retirement income for retirees who are 65 and older – if benefits aren’t further diminished.

As for volatility and investment al-locations, employees tend to tighten up as they are approaching retirement, and despite the economic downturn, many might still have a chance of get-ting back to where they once were, he said, if they aren’t too conservative in their allocations.

Older workers aged 55 to 64 have a median balance of only about $50,000 in their retirement savings accounts, Shipley said, and even with a pension and Social Security, for many that won’t come close to securing a com-fortable retirement.

Consequently, more older people – especially those hard hit when stocks in their financial portfolios plunged – are returning to the work force. ❑


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ALASKA TRENDS HAS BEEN BROUGHT TO YOU THIS MONTH COURTESY OF PACIFIC PILE & MARINE

BY JOEL AINSWORTHAlaska Trends, an outline of significant statewide statistics, is provided

by the University of Alaska Center for Economic Development.

Alaska Median Income Rises from 2000 to 2008

SOURCE: U.S. Department of Housing and Urban Development

Each May, the U.S. Department of Housing and Urban Development

(HUD) releases the median family incomes for U.S. residents by state and census area. The measurement income is used to set annual income limits, which determine eligibility for housing assistance through the Sec-tion 8 program. However, the median income measurement also can be useful when analyzing the changes of income over time within a state. When comparing income levels, median in-come is generally the most reliable measurement, as income tends to have a skewed distribution.

The graph illustrates the change in median family income from 2000 to 2008 using the 10 most populous boroughs in Alaska and state median. The graph reveals widely varied income growth patterns across the state. On average the 10 boroughs saw a 32.9 percent (16.4 percent inflation-adjusted) rise in median income over this period.

During both 2000 and 2008, Juneau City and Borough maintained

the highest median income in the state. Conversely, the Bethel Census Area tended to lag in median income growth, despite its population size. The Fairbanks North Star Borough had the largest marginal gain of all census bureaus at 19.08 percent over this period. ❑

ALASKA TRENDS

Juneau remains highest, Bethel lowest

Year Over Year

Change

YearAgo

Period

Previous ReportPeriod(revised)

Latest Report PeriodPeriodUnitsIndicator

GENERAL Personal Income – Alaska US $ 4th Q09 30,051 30,051 29,371 2.32% Personal Income – United States US $ 4th Q09 12,099,289 12,099,289 12,037,360 0.51% Consumer Prices – Anchorage 1982-1984 = 100 2nd H09 193.46 193.46 191.335 1.11% Consumer Prices – United States 1982-1984 = 100 2nd H09 215.94 215.94 216.177 -0.11% Bankruptcies Alaska Total Number Filed April 89 106 86 3.49% Anchorage Total Number Filed April 70 82 60 16.67% Fairbanks Total Number Filed April 5 12 25 -80.00% EMPLOYMENT Alaska Thousands April 331.74 328.26 324.92 2.10% Anchorage & Mat-Su Thousands April 185.38 184.51 182.10 1.80% Fairbanks Thousands April 43.09 42.40 41.81 3.07% Southeast Thousands April 35.70 34.40 36.05 -0.97% Gulf Coast Thousands April 34.49 33.70 32.62 5.73% Sectoral Distribution – Alaska Total Nonfarm Thousands April 316.7 313.6 313.6 0.99% Goods Producing Thousands April 41.5 42 41.1 0.97% Services Providing Thousands April 275.2 271.6 272.5 0.99% Mining and Logging Thousands April 15.7 15.3 15.4 1.95% Mining Thousands April 14.6 14.9 15.2 -3.95% Oil & Gas Thousands April 12.6 12.6 13.2 -4.55% Construction Thousands April 14.5 13.3 14.4 0.69% Manufacturing Thousands April 11.3 13.4 11.3 0.00% Seafood Processing Thousands April 7.4 8.4 7.6 -2.63% Trade/Transportation/Utilities Thousands April 61.8 61.2 61.4 0.65% Wholesale Trade Thousands April 6.2 6.1 6.2 0.00% Retail Trade Thousands April 35.7 35.2 34.7 2.88% Food & Beverage Stores Thousands April 6.2 6.4 6.2 0.00% General Merchandise Stores Thousands April 10.1 10 9.7 4.12% Trans/Warehouse/Utilities Thousands April 19.9 19.9 20.5 -2.93% Air Transportation Thousands April 5.7 5.7 5.9 -3.39% Truck Transportation Thousands April 3 3 3 0.00% Information Thousands April 6.3 6.4 6.6 -4.55% Telecommunications Thousands April 4.1 4.2 4.3 -4.65% Financial Activities Thousands April 13.8 13.8 14.4 -4.17% Professional & Business Svcs Thousands April 23.8 23.7 25.5 -6.67% Educational & Health Services Thousands April 40.3 40.4 38.8 3.87% Health Care Thousands April 29.1 29.1 27.8 4.68% Leisure & Hospitality Thousands April 29.1 27.8 28.1 3.56% Accommodation Thousands April 6.5 6.1 6.3 3.17% Food Svcs & Drinking Places Thousands April 18 18 17.7 2.82% Other Services Thousands April 11 11.1 11.4 -3.51% Government Thousands April 89.1 87.2 86.3 3.24% Federal Government Thousands April 17.7 17 17.1 3.51% State Government Thousands April 26.6 26.3 26 2.31% State Education Thousands April 8.1 8 8.1 0.00% Local Government Thousands April 44.8 43.9 43.2 3.70% Local Education Thousands April 25.4 25.1 24.7 2.83% Tribal Government1 Thousands April 3.6 3.7 3.4 5.88% Labor Force Alaska Thousands April 362.57 363.18 354.76 2.20% Anchorage & Mat-Su Thousands April 200.89 202.26 196.54 2.22% Fairbanks Thousands April 46.56 46.22 45.11 3.20% Southeast Thousands April 38.91 38.23 39.41 -1.27% Gulf Coast Thousands April 38.43 38.06 36.50 5.27%

ALASKA TRENDS


Data compiled by University of Alaska Center for Economic Development.

S P O N S O R E D B Y P A C I F I C P I L E & M A R I N E

Year Over Year

Change

YearAgo

Period

Previous ReportPeriod(revised)

LatestReportPeriodPeriodUnitsIndicator

Unemployment Rate Alaska Percent April 8.5 9.5 8.4 1.19% Anchorage & Mat-Su Percent April 7.7 8.5 7.3 5.48% Fairbanks Percent April 7.4 8.5 7.3 1.37% Southeast Percent April 8.2 9.9 8.5 -3.53% Gulf Coast Percent April 10.2 11.7 10.6 -3.77% United States Percent April 9.9 9.7 8.6 15.12%

PETROLEUM/MINING Crude Oil Production – Alaska Millions of Barrels April 17.01 16.79 19.58 -13.11% Natural Gas Field Production – Alaska Billions of Cubic Ft. April 10.87 11.12 12.09 -10.05% ANS West Cost Average Spot Price $ per Barrel April 74.23 79.45 46.56 59.44% Hughes Rig Count Alaska Active Rigs April 9 11 9 0.00% United States Active Rigs April 1479 1419 995 48.68% Gold Prices $ Per Troy Oz. April 1,148.58 1,114.45 891.43 28.85% Silver Prices $ Per Troy Oz. April 18.10 17.11 12.51 44.63% Zinc Prices Per Pound April 1.18 1.14 0.74 59.59%

REAL ESTATE Anchorage Building Permit Valuations Total Millions of $ April 25.31 22.42 33.53 -24.50% Residential Millions of $ April 13.54 5.72 10.72 26.31% Commercial Millions of $ April 11.77 16.70 22.81 -48.38% Deeds of Trust Recorded Anchorage–Recording District Total Deeds April 735 703 1443 -49.06% Fairbanks–Recording District Total Deeds April 298 298 346 -13.87%

VISITOR INDUSTRY Total Air Passenger Traffic – Anchorage Thousands April 319.31 342.68 312.46 2.19% Total Air Passenger Traffic – Fairbanks Thousands April 64.14 75.36 61.61 4.10%

ALASKA PERMANENT FUND Equity Millions of $ April 36,138.7 35,805.4 28,982.4 24.69% Assets Millions of $ April 36,415.8 36,044.3 29,419.5 23.78% Net Income Millions of $ April 179.6 273.3 (108.3) 265.84% Net Income – Year to Date Millions of $ April 277.1 1,265.3 1,508.9 -81.64% Marketable Debt Securities Millions of $ April 63.4 (16.9) 127.2 -50.16% Real Estate Investments Millions of $ April (70.5) 13.3 26.8 -363.06% Preferred and Common Stock Millions of $ April 143.5 1,084.2 1,377.1 -89.58%

BANKING (excludes interstate branches) Total Bank Assets – Alaska Millions of $ 1st Q10 1,961.82 1,971.86 1,953.70 0.42% Cash & Balances Due Millions of $ 1st Q10 32.13 34.58 48.62 -33.92% Securities Millions of $ 1st Q10 137.69 123.37 84.94 62.12% Net Loans and Leases Millions of $ 1st Q10 1,156.64 1,138.51 1,202.89 -3.85% Other Real Estate Owned Millions of $ 1st Q10 20.34 21.75 14.17 43.51% Total Liabilities Millions of $ 1st Q10 1,727.68 1,740.69 1,739.91 -0.70% Total Bank Deposits – Alaska Millions of $ 1st Q10 1,690.30 1,705.50 1,658.29 1.93% Noninterest-bearing deposits Millions of $ 1st Q10 428.10 445.65 417.74 2.48% Interest- bearing deposits Millions of $ 1st Q10 1,262.20 1,259.85 1,240.54 1.75%

FOREIGN TRADE Value of the Dollar In Japanese Yen Yen April 93.44 90.59 98.99 5.6% In Canadian Dollars Canadian $ April 1.01 1.02 1.23 -17.88% In British Pounds Pounds April 0.65 0.66 0.68 -7.35% In European Monetary Unit Euro April 0.74 0.74 0.76 -2.63% In Chinese Yuan Yuan April 6.82 6.83 6.83 -0.15%



A D V E R T I S E R S I N D E X

AES Employment Services Inc. . . . . . . . . . . . . 79Ahtna Construction. . . . . . . . . . . . . . . . . . . . . . 62Alaska Airlines . . . . . . . . . . . . . . . . . . . . . . . . . 17Alaska Housing Finance Corp. . . . . . . . . . . . . . 14Alaska Media Directory . . . . . . . . . . . . . . . . . . 45Alaska Public Telecommunications. . . . . . . . . . . 6Alaska Rubber & Supply Inc. . . . . . . . . . . . . . . 73Alaska Sales & Service Fleet Elite . . . . . . . . . . . 3Alaska State Chamber of Commerce. . . . . . . . 15Alaska USA Federal Credit Union . . . . . . . . . . 67Alutiiq Oilfield Solutions LLC . . . . . . . . . . . 63, 88American Marine/PENCO . . . . . . . . . . . . . . .8-10Anchorage Opera . . . . . . . . . . . . . . . . . . . . . . . 26Arctic Foundations Inc. . . . . . . . . . . . . . . . . . . . 87Arctic Office Products . . . . . . . . . . . . . . . . . . . . 58Arctic Slope Telephone Association . . . . . . . . . 21ASRC Energy Services . . . . . . . . . . . . . . . . . . 84B2 Networks . . . . . . . . . . . . . . . . . . . . . . . . 45, 71Bear Creek Winery & Lodging . . . . . . . . . . . . . 26Bill Z Photography . . . . . . . . . . . . . . . . . . . . . . 94Business Insurance Associates Inc. . . . . . . . . . 58Carlile Transportation Systems. . . . . . . . . . . . . 23Certified Residential Specialist. . . . . . . . . . . . . 69Chris Arend Photography . . . . . . . . . . . . . . . . . 98City Electric Inc. . . . . . . . . . . . . . . . . . . . . . . . . 61Construction Machinery Industrial LLC . . . . . . 99Craig Taylor Equipment. . . . . . . . . . . . . . . . . . . 75Credit Union 1. . . . . . . . . . . . . . . . . . . . . . . . . . 88Crowley. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89

Cruz Construction Inc. . . . . . . . . . . . . . . . . . . . 77Delta Leasing LLC . . . . . . . . . . . . . . . . . . . . . . 68Design Alaska. . . . . . . . . . . . . . . . . . . . . . . . . . 62Dimond Center Hotel . . . . . . . . . . . . . . . . . . . . 45Dowland-Bach Corp.. . . . . . . . . . . . . . . . . . . . . 85Dynamic Properties-Matthew Fink . . . . . . . . . . 66EHS-Alaska Inc. . . . . . . . . . . . . . . . . . . . . . . . . 49Emerald Alaska . . . . . . . . . . . . . . . . . . . . . . . . 41Energy Laboratories Inc.. . . . . . . . . . . . . . . . . . 37ERA Aviation. . . . . . . . . . . . . . . . . . . . . . . . . . . 63Fairbanks Memorial Hospital . . . . . . . . . . . . . . 91First National Bank Alaska . . . . . . . . . . . . . . . . . 5Floyd and Sons Inc. . . . . . . . . . . . . . . . . . . . . . 27GCI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2Great Originals Inc.. . . . . . . . . . . . . . . . . . . . . . 50Green Star Inc. . . . . . . . . . . . . . . . . . . . . . . . . . 45Hawk Consultants LLC . . . . . . . . . . . . . . . . . . . 83Judy Patrick Photography. . . . . . . . . . . . . . . . . 26Junior Achievement . . . . . . . . . . . . . . . . . . . . . 19Lawes Project Management Office. . . . . . . . . . 26Lynden Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93Muzak - Sound Tech LLC . . . . . . . . . . . . . . . . . 45NANA Regional Corp.. . . . . . . . . . . . . . . . . . . . 31Nenana Heating Services Inc. . . . . . . . . . . . . . 83Northern Air Cargo . . . . . . . . . . . . . . . . . . . .32-33Northern Reclamation Services LLC . . . . . . . . 36Northrim Bank . . . . . . . . . . . . . . . . . . . . . . . . . 13NW Ironworkers Employers Assoc. . . . . . . . . . 72OPTI Staffing Group. . . . . . . . . . . . . . . . . . . . . 94

Pacific Pile & Marine. . . . . . . . . . . . . . . . . . . . . 95Parker Smith Feek . . . . . . . . . . . . . . . . . . . . . . 11Pen Air . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81Polar Supply Co.. . . . . . . . . . . . . . . . . . . . . . . . 35Premier Business Center LLC . . . . . . . . . . . . . 45PSC Environmental Services . . . . . . . . . . . . . . 55Richmond Steel Recycling . . . . . . . . . . . . . . . . 47Rosie’s Delivery . . . . . . . . . . . . . . . . . . . . . . . . 37RSA Engineering Inc. . . . . . . . . . . . . . . . . . . . . 72SGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51Shred Alaska . . . . . . . . . . . . . . . . . . . . . . . . . . 39SLR Alaska. . . . . . . . . . . . . . . . . . . . . . . . . . . . 40SolstenXP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80Spenard Builders Supply . . . . . . . . . . . . . . . . . 59Stellar Design Inc.. . . . . . . . . . . . . . . . . . . . . . . 45Susan Padilla Realtor . . . . . . . . . . . . . . . . . . . . 26Susitna Energy Systems . . . . . . . . . . . . . . . . . 57The Growth Company . . . . . . . . . . . . . . . . . . . 14The Salvation Army . . . . . . . . . . . . . . . . . . . . . 30The Superior Group . . . . . . . . . . . . . . . . . . . . . 76TTT Environmental . . . . . . . . . . . . . . . . . . . . . . 36Unit Company. . . . . . . . . . . . . . . . . . . . . . . . . . 76UAA Engineering . . . . . . . . . . . . . . . . . . . . . . . 53UA Statewide Corporate

Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . 45Valdez CVB . . . . . . . . . . . . . . . . . . . . . . . . . . . 27Washington Crane & Hoist . . . . . . . . . . . . . . . . 81Wells Fargo. . . . . . . . . . . . . . . . . . . . . . . . . . . 100Yukon Equipment Inc.. . . . . . . . . . . . . . . . . . . . 72

Free Business Financial Review You have a lot on your mind every day — meetings, inventory, delivery dates and, of course, fi nances. At Wells Fargo, we’re here to help. With our Free Business Financial Review, we’ll work with you to evaluate your business and create a strategy that helps you keep it fi nancially healthy into the future. And with business credit, cash management products, and payroll and merchant services, we’ll help make it easier for you to manage your day-to-day business. Let’s spend some time focusing on your fi nances. Visit your local Wells Fargo location or call 1-800-35-WELLS today.

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