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HomeMy WebLinkAbout11032010 PACAB PacketI J f SEWARD PORT AND COMMERCE ADVISORY BOARD Regular Meeting November 3, 12:OOPM COUNCIL CHAMBERS Ron Long, Chair Board Member Term Expires 2011 Vacant Board Member Term Expires 2012 Deborah Altermatt Board Member Term Expires 2010 Daniel Oliver Board Member Term Expires 2010 Daryl Schaefermeyer Board Member Term Expires 2012 Robert Buck Board Member Term Expires 2012 Paul Tougas Board Member Term Expires 2011 Phillip Oates City Manager Kari Anderson Harbor Master Suzi Towsley Executive Liaison City of Seward, Alaska November 3, 2010 1. CALL TO ORDER 2. PLEDGE OF ALLEGIANCE 3. ROLL CALL 4. SPECIAL ORDERS, PRESENTATIONS REPORTS A. ARRC Representative Louis Bencardino B. Harbormaster Report —Kari Anderson C. Community Development Report- Christy Terry UNT11 5. Citizens' comments on any subject except those items scheduled for public hearing. [Those who have signed in will be given the first opportunity to speak. Time is limited to 2 minutes per speaker and 30 minutes total time for this agenda item.] 6. Approval of agenda and consent agenda [Approval of Consent Agenda passes all routine items indicated by asterisk (*). Consent Agenda items are not considered separately unless a Board Member so requests. In the event of such a request, the item is returned to the Regular Agenda.] 1 PA CAB Agenda Page 1 7. INFOMATIONAL ITEMS, REPORTS AND PRESENTATIONS — A. Open Meetings Act update...................................................................Page 3 8. UNFINISHED BUSINESS 9. NEW BUSINESS A. Review of attendance record, City Code and PACAB policy regarding inactive and absentboard members.......................................................................Page 26 B. Election of new Vice Chair...................................................................Page 28 C. PACAB Resolution 2010-07 Supporting and Providing recommendations for City initiatives to expand existing and attract new business..................................Page 29 D. PACAB Resolution 2010-08 A Resolution Opposing an Application from AquaBounty Technologies, Inc. to the U.S. Food and Drug Administration (FDA) to Approve and Market Genetically Engineered Atlantic Salmon in the United States...........................................................................................Page 38 E. Discuss and provide recommendations for lease parcel sizes on the South Harbor Uplands .................................................................................................. Page 42 F. Set next work session topic for November 17, 2010 to Review and Provide Recommendations on Nominating Public Lands for Lease and the Lease Proposal Policiesand Procedures..................................................................... Page 44 G. Approval of August 4, 2010 Regular Meeting minutes ................................ Page 45 10. CORRESPONDENCE, INFORMATIONAL ITEMS AND REPORTS (No action required) - A. Alaska Railroad Quarterly report ...........................................................Page 50 B. WTC Report -The Economic Impact of International Trade Exports on the Alaskan Economy..........................................................separate packet due to size C. Economic Development Survey questions for Town Hall meeting...............Page 54 D. Alaska Regional Ports Conference .....................................................Page 55 11. BOARD COMMENTS 12. CITIZEN COMMENTS [S minutes per individual - Each individual has one opportunity to speak.] 13. BOARD AND ADMINSTRATIVE RESPONSE TO CITIZENS'COMMENTS 14. ADJOURNMENT City of Seward, Alaska PACAB Agenda November 3, 2010 Page 2 2 Wohlforth I Johnson I Brecht Cartledge I Brooking A PROFESSIONAL CORPORATION Julius J. Brecht Cheryl Rawls Brooking Telephone Cynthia L. Cartledge ATTORNEYS AT LAW 907.27S.6401 Michael Gatti Clyde W. Hutchins Jr, 900 WEST STH AVENUE, SUITE 600 Facsimile RoberIM.Johnson ANCHORAGE, ALASKA 99601.2046 907.276.5093 Leila R. Kimbrell Eric E. Wohiforth Website www.akatty.com OPEN MEETINGS ACT IN ALASKA Prepared and Presented By: Cheryl Rawls Brooking Wohlforth, Johnson, Brecht, Cartledge & Brooking cbrooking@akatty.com 2010 3 I. Open Meetings Laws - Overview PART A - Alaska Open Meetings Act The Alaska Open Meetings Act (the "Act") is codified in AS 44.62.310 and with policy behind the procedures described in Section 312. Although the Act has been on the books since 1959, it was substantially modified in 1994 to clarify definitions of "governmental body" and "meeting" and thereby give further guidance with respect to interpretation and enforcement under the Act. Where an issue concerting the interpretation of the Act is not determined by the statutory language or an Alaska Supreme Court decision, opinions of the Alaska Attorney General and of courts in other- jurisdictions are referred to for guidance. Municipalities and other governmental entities have, in many cases, adopted their own ordinances and regulations regarding compliance with the Act. In summary, the Act prescribes certain requirements applicable to meetings ofpublic bodies, and establishes exceptions to those requirements. The following issues are directly addressed in the Act: • What public bodies are subject to the Act? • What is a meeting for purposes of the Act? • What requirements does the Act impose upon a meeting of a public body? • What exceptions does the Act establish to the requirements that it imposes upon a meeting of a public body? • What are the consequences of a violation of the Act? When addressing the requirements that the Act imposes upon a meeting of a public body, it is helpful to refer to related requirements imposed by other provisions of state or local law. All of these requirements must be complied with, so they should not be viewed in isolation. Page 2 2010 4 The starting point in detennining how the Act is to be interpreted is found in the words of the legislature itself, appearing in AS 44.62.312: (a) It is the policy of the state that (1) the governmental units mentioned in AS 44.62.310(a) exist to aid in the conduct of the people's business; (2) it is the intent of the law that actions of those units be taken openly and that their deliberations be conducted openly; (3) the people of this state do not yield their sovereignty to the agencies that serve them; (4) the people, in delegating authority, do not give their public servants the right to decide what is good for the people to know and what is not good for them to know; (5) the people's right to remain informed shall be protected so that they may retain control over the instniments they have created; (6) the use of teleconferencing tinder this chapter is for the convenience of the parties, the public, and the governmental units conducting the meetings. (b) AS 44.62.310(c) and (d) shall be construed narrowly in order to effectuate the policy stated in (a) of this section and to avoid exemptions from open meeting requirements and unnecessary executive sessions. It is well to remember the Act's purposes when addressing specific questions of its application. The Alaska Supreme Court repeatedly relies upon these statements of the Act's purposes as support for a broad interpretation of the Act's requirements, and a narrow interpretation of the exceptions to those requirements. PART B - What is a Public Meeting and What Public Entities are Covered? The Act begins with the words, "[a]ll meetings of a governmental body of a public entity of the [State of Alaska] are open to the public except as otherwise provided by this section or another provision of law." "Meeting," "governmental body" and "public entity" are each specifically defined terns in Section 310(h). Page 3 5 1. What is a Public Meeting? The definition of "meeting" in the Act initially determines what gatherings of members of a goveruirental body are subject to the Act's requirements.' The definition of "meeting" varies depending upon the function of the governmental body: a. The governmental body has the authority to establish policies or make decisions for a public entity. There is a meeting of such a body when: • More than three members or a majority of the members, whichever is less, are present, and • a matter upon which the governmental body is empowered to act is considered by the members collectively. b. The governmental body has only authority to advise or make recommendations, but has no authority to establish policies or make decisions for a public entity. There is a meeting of such a body when: • More than three members or a majority of the members, whichever is less, are present, and the gathering is prearranged, and the gathering is for the purpose of considering a matter upon which the governmental body is empowered to act. Use the following analysis to determine whether one is participating in a meeting subject to the Act: a. What is the type of governmental body whose members have gathered? • Does the governmental body have authority to establish policies or make decisions? Note that authority to establish policies or make decisions is broader than authority to legislate. Governmental bodies in this category include municipal assemblies and councils, planning and zoning boards, and state boards and commissions. • Does the governmental body have only advisory responsibilities? Such governmental bodies may include temporary or pennanent 1 AS 44.62.310(h)(2). Page 4 201.0 committees who provide advice and recommendations to a main governing body. b. If the governmental body has decision making authority: Iow many members of the body are present? For there to be a meeting, either four or more members, or a majority of members, whichever is less, must be present for there to be a meeting. Note that where there is a vacancy on a governmental body, the number of members whose presence is necessary for there to be a meeting subject to the Act may be reduced. Applying the statutory language literally, the presence of a majority of the actual members of the body, rather than a majority of the body's authorized membership, may cause a gathering to be a meeting. For example, if two seats were vacant on a body of seven members, a gathering of only three mernbers (a majority of five) could constitute a meeting. Are the members collectively considering a matter upon which the governmental body is empowered to act? Note that the matter under consideration need not be pending currently before the body. It is only necessary that the matter be one upon which the body is ernipower-ed to act. Note also that all members present need not participate in the collective consideration, so long as at least the minimum number of members necessary to constitute a "meeting" are present. C. If the governmental body has only advisory authority, was the gathering prearranged for the purpose of considering a matter upon which the governmental body is empowered to act? More than three members, or a rnr jority of the members, whichever is less, is sufficient. No formality is specified for the necessary prearrangement. An appointment made in casual conversation could be a sufficient prearrangement. What is actually considered a the gathering is irrelevant, so long as the purpose of the gathering is considering a matter within the authority of the body. Also keep in mind that a prearranged gathering to consider a matter upon which the body is not empowered to act Page 5 2010 7 may become a "meeting" if a matter within the body's authority is considered. Although the Act defines what constitutes a "meeting," some ambiguities remain. The determination of whether a meeting is subject to the Act may depend on the facts of the particular situation, viewed in terms of the Act's policies. Courts continue to hold that a "meeting" for purposes of the Act "includes every step of the deliberative and decision making process when a governmental unit meets to transact business."'- "Deliberation" connotes not only discussion but the collective acquisition and exchange of facts preliminary to the ultimate decision.' Under the present law, the following factors do not determine whether a meeting has occurred for purposes of the Act:' 1985). a. The presence of a quotlun. A quorum need not be present for a "meeting" to occur. The presence of four members will constitute a meeting even if that number is less than a quorum. b. Formality of a gathering. A gathering need not be formally noticed or scheduled to constitute a meeting subject to the Act. C. Setting or location of a gathering. That a gathering is not at the location where the body regularlymeets, or occurs during a social or civic function does not keep it from being a meeting subject to the Act. d. Absence of face-to-face interaction. A conference over the telephone may constitute a meeting subject to the Act. The Act expressly provides that meetings may be conducted by telephone conference.' Questions have been raised regarding whether a series of phone calls or elnails constitutes a "meeting." If the relevant factors are met, emails or phone calls may constitute a meeting. 2 Brookwood Homeowners Association, Inc. v. M unicipality oFA nchorage, 702 P.2d 1317, 1322-1323 (Alaska 3 Id. 4 Id.; July 6, 1993 Op. AL Atty, Gen. 5 AS 44.62.310(a) Page 6 2010 2. What Public Entities are Covered? The Act has broad application and includes not only State entities but also political subdivisions of the State, instrumentalities ofthe State, boroughs, cities, unified municipalities, the Alaska Bar Association Board of Governors,' school district boards' and other governmental units. The State legislature and the court system are excluded (h(3)) but the legislature has adopted its own version of open meetings rules (Uniforin Rule 22). "Governmental body" also includes subcommittees of a govenmental body. The Act describes the meetings of groups to which it applies as all meetings of. a "govenunental body of a public entity."' "Public entity" means: an entity of the state or of a political subdivision of the state including an agency, a board or commission, the University of Alaska, a public authority or corporation, a municipality, a school district, and other governmental units of the state or a political subdivision of the state; it does not include the court system or the legislative branch of state goverinnent.9 "Governmental body" means: an assembly, council, board, commission, committee, or other similar body of a public entity with the authority to establish policies or make decisions for the public entity or with the authority to advise or make recommendations to the public entity; "governmental body" includes the members of a subcommittee or other subordinate unit of a governmental body if the subordinate unit consists of two or more members.' ° 6 Horowitz v. Alaska Bar Association, 609 P.2d 39 (Alaska 1930). ' Von Stauffenber_g v. Committee for an Honest School Board, 903 P.2d 1055 (Alaska 1995). B AS 44.62.310(a) 9 AS 44.62.3 1 0(h)(3) 10 AS 44.62.3 1 0(h)(1) Page 7 9 2010 The definitions are comprehensive. The formality with which a group is formed does not determine the Act's applicability. The Act applies to a task force or committee whose duration is temporary, or the subject of whose activities is quite limited." A group need not have decision making authority to be subject to the Act. A group that is merely advisory must comply with the Act, as must a subcommittee or other subordinate unit of a governmental body. However, underthe current version of the Act, private organizations receiving public funding are excluded,"-- and Municipal service area boards meeting solely to act on administrative or managerial matters. Part C - Requirements for Notice and Agenda The Act's stated policies regarding meetings of governmental bodies in Alaska13 reflect the legislature's intent that governmental bodies conduct theirbusiness openly and maintain the people's right to remain informed. Any questions with regard to application of the Act are to be construed narrowly to avoid exemptions and to avoid unnecessary executive sessions. To meet these policy requirements, meetings of a governmental body subject to the Act require prior notice so that the public may attend. The meeting may be an informal work session or a formal adjudicatory hearing but the notice requirements are the same whether or not any final action is to be taken at the meeting. So long as the deliberative process is occurring, the meeting is considered an open meeting. AS 44.62.310(e) requires reasonable public notice for all meeting required to be under the Act: 11 University of Alaska v. Geistauts, 666 P.2d 424, 427-428 (Alaska 1983 ); H ammond v. North Slope Borough, 645 P.2d 750, 764-765 (Alaska 1982). 12 May 23, I994 Op. Ak. Atty. Gen. 13 AS 44.62.310(b) Page 8 10 2010 The notice inust include the date, time and place of the meeting and if, the meeting is by teleconference, the location of any teleconferencing facilities that will be used. The issue ofwhat constitutes reasonable public notice may depend on theregulations adopted by the governmental entity. Many state regulations and municipal ordinances require at least 24 hours notice of a meeting. The first step in determining reasonable notice is to determine whether the governmental body has followed its own guidelines and procedures. The nature of the action to be taken may determine the reasonableness with regard to the timeliness of the notice. For example, in an emergency, the notice period may be much less. If an issue is complex and would have a tremendous public impact then more extensive notice may be required prior to a meeting.14 The agenda items for the meeting are not expressly required to be stated but fall within the concept of reasonable notice. The public should be provided with the substance of the matter to be discussed. This requirement limits the ability of the governmental body to address changes in the agenda and add items that have not been publically noticed. Items that are non -controversial or minimal in nature may not be objected to. However, items that may engender controversy or involve complex issues should be stated with sonic specificity in the meeting notice.15 In addition to general public notice, other statutes, ordinances and regulations may require specific notice to be provided directly to individuals who would be affected at a meeting. This may apply to individuals facing adjudicatoiy hearings or perinit applications, contracts, leases, licenses, zoning changes or the like. 14 Tunley v. Municipality of Anchorage school District, 631 P.2d 67 (Alaska 1981), 15 Anchorage Inclenendent Longshore Union Local I V. Municipality of Anchorage, 672 P.2d 891 (Alaska 1983). The court interpreted the Municipality of Anchorage public notice requirement, which is similar to the Act's reasonable public notice standard, and remanded to the trial court the question of whether the Port Commission's consideration of a terminal use permit application had to be specifically mentioned on the agenda posted in advance of the meeting or whether the issue could be properly taken tip under the category "Items Not on the Agenda." The trial court was required to make factual findings regarding the complexity and importance of the issuance of that particular permit. Page 9 11 2010 The Act states that notice may be given "by using print or broadcast media," and that "the notice shall be posted at the principal office of the public entity, or if the public entity has no principal office, at a place designated by the governmental body."' Note that specific provisions of law may establish the required media of notice for particular actions (e.g., publication in a newspaper of general circulation, posting in specified locations). Part D - Meeting Procedure Most meetings are held in one place with everyone present, but telephonic meetings are permitted." If telephonic participation is utilized, the various locations must be made known in the meeting notice, and meeting materials are to be available at each location. Any votes taken at a telephonic meeting must be by voice vote. Meeting procedures generally are defined by statute, regulation or ordinance of the public entity and will be controlling to the extent the requirements are narrower than the Act. Thus, even though telephonic meetings are penmitted under the Act, a particular entity may be required to have a quorum of members physically present in a single location to conduct its business. The Act requires that meetings be open to the public, giving the right to be present, but does not require that the public be heard, Often the right to be heard is found elsewhere. For example, AS 29.20.020(a), which applies to home rule as well as other municipalities, requires that the governing body shall provide reasonable opportunity for the public to be heard at regular and special meetings. Other statutes, ordinances and regulations may require that certain actions of a public body may only be taken after a public hearing. 16 AS 44.62.31 o(e), 17 AS 44.62.310(a). Page 10 12 2010 II. Open Meetings Laws - Exceptions and Remedies for Violations Part A - Executive Sessions and Other Non -Public Meetings 1. Executive Sessions As an exception to its general requirement that meetings of public bodies be open to the public, the Act permits (but does not require) certain subjects to be discussed privately in executive session.'s a. Subjects that may be discussed at an executive session are limited to the following: I. Matters, the immediate knowledge of which would clearly have an adverse effect upon the finances of the public entity.' Emphasis must be placed on the words "immediate" and "clearly" in this exception, as the exception is to be narrowly construed to avoid unnecessary executive sessions.20 2. Subjects that tend to prejudice the reputation and character of any person. This provision is qualified by the statement that the person whose reputation or character is at issue may request a public discussion, in which case the discussion must occur in a public meeting rather than in executive session.'-' This right may be waived.'-'- 3. Matters which by law, municipal charter, or ordinance are required to be confidential.'-' Under the Act, in contrast to the situation under the state's public records law, 18 AS 44.62.310(c). 19 AS 44.62.310(c)(1). 20 AS 44.62.312(b), 21 AS 44.62.310(c)(2); Geistauts, 666 P.2d at 429. 22 Ramsey v. City of Sand Point, 936 P.2d 126 (Alaska 1997). 23 AS 44,62.310(c)(3). Page 11 13 2010 municipalities are explicitly delegated authority to establish topics which maybe discussed in executive session. Where a municipality's ordinances list subjects that may be considered in executive session in a manner that is narrower than the Act's exceptions, the Act is controlling over the municipal ordinance.24 4. Matters involving consideration of government records that by law are not subject to public disclosure." This may be referred to as the "deliberative process" privilege.'6 Communicating with an attorney is confidential and privileged and may also occur in executive session. b. Requirements for an executive session. Procedure. Before the executive session, the meeting must be convened as a public meeting and the question of holding an executive session shall be determined by majority vote of the body. The motion to convene in executive session must clearly and with specificity describe the subject of the proposed executive session without defeating the purpose of addressing the subject in private.'' 2. Notice. If an executive session is to be held to discuss a subject that tends to prejudice the reputation and character of a person, that person must be given adequate notice of the meeting so the person may request that the subject be discussed in a public session 24 Walleri v. City of Fairbanks, 964 P.2d 463, 468 (Alaska 1998). 25 AS 44.62.310(c)(4). 26 Fuller v. City of Homer, 75 P.3d 1059 (Alaska 2003). 27 AS 44.62.310(b). Page 12 14 2010 instead of in executive session.29 In Ramsey v. City of Sand Point, 936 P.2d 126 (Alaska 1997), the court found that the police chief had actual notice of the meeting so a defect in formal notice was clued, and also found that the police chief had waived his right to a public discussion by failing to appear and request that the proceeding be held publicly. 3. Limitation on activity during executive session. Subjects may not be considered at an executive session except those mentioned in the motion to convene in executive session unless auxiliary to the main question. Action may not be taken at the executive session, except to give direction to an attorney or labor negotiator regarding the handling of a specific legal matter or pending labor negotiations. Any other action to be taken as a result of consideration of a matter in executive session may be taken only in a public meeting convened after the executive session.' C. Other executive session issues. The following corrects some common misconceptions concerning executive sessions. 1. Confidentiality of matters considered in executive session. Provisions in the Act and in local. ordinances for executive sessions act only as exceptions to the general requirement that meetings of governmental bodies be open to the public. 2. Consideration of particular documents in an executive session does not make those documents privileged or confidential indefinitely. Documents considered in an 28 Geistauts, 666 P.2d 424, 429. 29 AS 44,62.310(b). Page 13 15 2010 executive session remain subject to disclosure under state and local public records laws unless an exception to those laws permits them to be withheld from disclosure.30 2. Other Non -Public Meetings Not every gathering of public officials is a group to which the Art's requirements apply. The Act lists specific exceptions,31 which are to be interpreted narrowly: 1. A. governmental body performing a judicial or quasi-judicial function when holding a meeting solely to make a decision in an adjudicatory proceeding;32 2. Juries; 3. Parole or pardon boards; 4. Meetings of a hospital medical staff; 5. Meetings of the governmental body or any committee of a hospital when holding a meeting solely to act upon matters of professional qualifications, privileges or discipline; 6. Staff meetings or other gatherings of the employees of a. public entity, including meetings of an employee group established by policy of the Board of Regents of the University of Alaska or held while acting in an advisory capacity to the Board of Regents; or 7. Meetings held for the purpose of participating in or attending a gathering of a national, state, or regional organization of which the public entity, governmental 30 Municipality of AnchOra>;e v. Anchorage Daily News, 794 P.2d 584, 590 (Alaska 1990), Fuller v. City of Horner, 75 P.3d 1059 (Alaska 2003). 31 AS 44.62.310(d), 32 Alaska Department of Law Memorandum March 10, 1998 Page 14 2010 body, or member of the governmental body is a member, but only if no action is taken and no business of the governmental body is conducted at the meetings. 8. Meetings of municipal service area boards established under AS 29.35.450-29.35.490 when rneeting solely to act on matters that are administrative or managerial in nature. There are two important features of these exceptions. First, the excepted groups are completely outside the application of the Act when acting within the scope of the exception. For example, the gathering of such a group may be closed to the public without complying with the "executive session" procedures of the Act. Second, these exceptions will be interpreted narrowly. Only gathering of an excepted group that conforms strictly to the conditions of the defined exception will be exempt. Part B - Enforcement and Remedies a. Action taken contrary to the Act's requirements by a governmental body with authority to establish policies or make decisions is voidable." The remedy of voiding an action taken contrary to the requirements of the Act does not apply to the action of a governmental body that has only authority to advise or make recommendations to a public entity and has no authority to establish policies or make decisions for the public entity."' b. The remedy of voidability applies not only to action taken by a governmental body with decision -making authority at an illegally closed meeting, but also to action taken at an open meeting where deliberations or fact-finding concerning the action occurred at an earlier illegally 33 AS 44.562.320(fl. 34 AS 44.62.310(g). Page 15 17 2010 closed meeting." An illegally closed meeting at any time during the process leading to an action may render the action voidable. C. A lawsuit to void an. action taken in violation of the Act must be filed in Superior Court within 180 days after the date of the action.36 A governmental body may cure its alleged violation of the act by holding another meeting in compliance with the Act and conducting a substantial and public reconsideration of the matters considered at the meeting where the alleged violation occurred.37 d. A courtmayvoid an action taken in violation ofthe Act by a governmental body with decision malting authority only ifthe court finds that, considering all of the circumstances, the public interest in compliance with the act outweighs the harm that would be caused to the public interest and to the public entity by voiding the action. The court is required to consider specified factors in malting this determination:" (1) the expense that may be incurred by the public entity, other governmental bodies, and individuals if the action is voided; (2) the disruption that may be caused to the affairs of the public entity, other governmental bodies, and individuals if the action is voided; (3) the degree to which the public entity, other governmental bodies, and individuals may be exposed to additional litigation if the action is voided; 35 Brookwood Area Homeowners, 702 P.2d at 1323. 36 AS 44.62.310(f). 37 id. 38 1d Page 16 �3 2010 (4) the extent to which the governing body, in meetings held in compliance with this section, has previously considered the subject; (5) the amount of time that has passed since the action was taken; (6) the degree to which the public entity, other governmental bodies, or individuals have come to rely on the action; (7) whether and to what extent the governmental body has, before or after the lawsuit was tiled to void the action, engaged in or attempted to engage in the public reconsideration of matters originally considered in violation of this section; (8) the degree to which violations of this section were wilful, flagrant, or obvious; (9) the degree to which the governing body failed to adhere to the policy under AS 44.62.312(a). The determination whether to void an action depends upon the particular circumstances of the alleged violation, and in large part is subject to the discretion of the reviewing court. This standard should not be relied upon as an alternative to compliance with the Act in the first instance. The potential of having the court void an action in every case imposes uncertainty and delay even if the remedy ultimately is not granted. THE ALASKA OPEN MEETINGS ACT Sec. 44.62.310. Government meetings public. (a) All meetings of a governmental body of a public entity of the state are open to the public except as otherwise provided by this section or another provision oflaw. Attendance and participation atmeetings bymembers of the public orbyinembers of a governmental body may be by teleconferencing. Agency materials that are to be considered at the meeting shall be made available at teleconference locations if practicable. Except when voice Page 17 19 2010 votes are authorized, the vote shall be conducted in such a manner that the public may know the vote of each person entitled to vote. The vote at a meeting held by teleconference shall be taken by roll call. This section does not apply to any votes required to be taken to organize a governmental body described in this subsection. (b) If permitted subjects are to be discussed at a meeting in executive session, the meeting must first be convened as a public meeting and the question of holding an executive session to discuss matters that are listed in (c) of this section shall be determined by a majority vote of the governmental body. The motion to convene in executive session must clearly and with specificity describe the subject of the proposed executive session without defeating the purpose of addressing the subject in private. Subjects may not be considered at the executive session except those mentioned in the motion calling for the executive session unless auxiliary to the main question. Action may not be taken at an executive session, except to give direction to an attorney or labor negotiator regarding the handling of a specific legal matter or pending labor negotiations. (c) The following subjects may be considered in an executive session: (1) matters, the immediate knowledge of which would clearly have an adverse effect upon the finances of the public entity; (2) subjects that tend to prejudice the reputation and character of any person, provided the person may request a public discussion; (3) matters which by law, municipal charter, or ordinance are required to be confidential; (4) matters involving consideration of government records that by law are not subject to public disclosure. (d) This section does not apply to Page 18 2010 (1) a governmental body performing a judicial or quasi-judicial function when holding a meeting solely to make a decision in an adjudicatoiy proceeding; (2) juries; (3) parole or pardon boards; (4) meetings of a hospital medical staff; (5) meetings of the governmental body or any committee of a hospital when holding a ineeting solely to act upon hatters of professional qualifications, privileges or discipline; (6) staff meetings or other gatherings of the employees of a public entity, including meetings of an employee group established by policy of the Board of Regents of the University of Alaska or held while acting in an advisory capacity to the Board of Regents; (7) meetings held for the purpose of participating in or attending a gathering of a national, state, or regional organization of which the public entity, governmental body, or member of the governmental body is a member, but only if no action is taken and no business of the governmental body is conducted at the meetings; or (8) meetings of municipal service area boards established under AS 29.35.450-29.35.490 when meeting solely to act on matters that are administrative or managerial in nature. (e) Reasonable public notice shall be given for all meetings required to be open under this section. The notice must include the date, time, and place of the meeting and if, the meeting is by teleconference, the location of any teleconferencing facilities that will be used. Subject to posting notice of a meeting on the Alaska Online Public Notice System as required by AS 44.62.175(a), the notice maybe given using print or broadcast media. The notice shall be posted at the principal ogee of the public entity or, if the public entity has no principal office, at a place designated by the Page 19 21 2010 governmental body. The governmental body shall provide notice in a consistent fashion for all its meetings. (f) Action taken contrary to this section is voidable. A lawsuit to void an action taken in violation of this section must be filed in superior court within 180 days after the date of the action. A member of a governmental body may not be named in an action to enforce this section in the member's personal capacity. A governmental body that violates or is alleged to have violated this section may cure the violation or alleged violation by holding another meeting in compliance with notice and other requirements of this section and conducting a substantial and public reconsideration of the matters considered at the original meeting. If the court finds that an action is void, the governmental body may discuss and act on the matter at another meeting held in compliance with this section. A court may hold that an action taken at a meeting held in violation of this section is void only if the court fi ids that, considering all of the circumstances, the public interest in compliance with this section outweighs the harm that would be caused to the public interest and to the public entity by voiding the action. In making this detennination, the court shall consider at least the following: (1) the expense that may be incurred by the public entity, other governmental bodies, and individuals if the action is voided; (2) the disruption that may be caused to the affairs of the public entity, other governmental bodies, and individuals if the action is voided; (3) the degree to which the public entity, other governmental bodies, and individuals may be exposed to additional litigation if the action is voided; (4) the extent to which the governing body, in meetings held in compliance with this section, has previously considered the subject; Page 20 22 2010 (5) the amount of time that has passed since the action was taken; (6) the degree to which the public entity, other govermnental bodies, or individuals have come to rely on the action; (7) whether and to what extent the governmental body has, before or after the lawsuit was filed to void the action, engaged in or attempted to engage in the public reconsideration of matters originally considered in violation of this section; (8) the degree to which violations of this section were wilful, flagrant, or obvious; (9) the degree to which the governing body failed to adhere to the policy under AS 44.62.312(a). (g) Subsection (f) of this section does not apply to a governmental body that has only authority to advise or make recommendations to a public entity and has no authority to establish policies or make decisions for the public entity. (h) in this section, (1) "governmental body" means an assembly, council, board, commission, committee, or other similar body of a public entity with the authority to establish policies or make decisions for the public entity or with the authority to advise or make recommendations to the public entity; "govenunental. body" includes the members of a subcommittee or other subordinate unit of a governmental body if the subordinate unit consists of two or more members; (2) "meeting" means a gathering of members of a governmental body when (A) more than three members or a majority of the members, whichever is less, are present, a matter upon which the governmental body is empowered to act is considered by the members collectively, and the governmental body has the authority to establish policies or snake decisions for a public entity; or Page 21 2010 23 (B) more than three members or a majority of the members, whichever is less, are present, the gathering is prearranged for the purpose of considering a matter upon which the governmental body is empowered to act and the governmental body has only authority to advise or make recommendations for a public entity but has no authority to establish policies or make decisions for the public entity; (3) "public entity" means an entity of the state or of a political subdivision of the state including an agency, a board or commission, the University of Alaska, a public authority or corporation, a municipality, a school district, and other governmental units of the state or a political subdivision of the state; it does not include the court system or the legislative branch of state government. Sec. 44.62.312. State policy regarding meetings. (a) It is the policy of the state that (1) the governmental units mentioned in AS 44.62.310(a) exist to aid in the conduct of the people's business; (2) it is the intent of the law that actions of those units be taken openly and that their deliberations be conducted openly; (3) the people of this state do not yield their sovereignty to the agencies that serve them; (4) the people, in delegating authority, do not give their public servants the right to decide what is good for the people to know and what is not good for them to know; (5) the people's right to remain informed shall be protected so that they may retain control over the instruments they have created; (6) the use of teleconferencing under this chapter is for the convenience of the parties, the public, and the governmental units conducting the meetings. Page 22 24 2010 (b) AS 44.62.310(c) and (d) shall be construed narrowly in order to effectuate the policy stated in (a) of this section and to avoid exemptions from open meeting requirements and unnecessary executive sessions. ALASKA LEGISLATURE UNIFORM RULES Rule 22. Open and Executive Sessions. (a) All meetings of a legislative body are open to all legislators, whether or not they are members of the particular legislative body that is meeting, and to the general public except as provided in (b) of this rule. (b) A legislative body may call an executive session at which members of the general public may be excluded for the following reasons: (1) discussion of the matters, the immediate knowledge of which would adversely affect the finances of a goverrunent unit; (2) discussion of subjects that tend to prejudice the reputation and character of a person; (3) discussion of a matter that may, by law,'be required to be confidential; (4) discussion of a matter the public knowledge of which would adversely affect the security of the state or nation, or adversely affect the security of a governmental unit or agency. (c) When a legislative body desires to call an executive session in accordance with (b) of this rule, the body shall first convene as a public meeting and the question of holding an executive session shall be determined by a majority vote of the members present. (d) The provisions of this rule ruay not be interpreted as permitting the exclusion of a legislator from an executive session, whether or not the legislator is a member of the body that is meeting. A legislator not a member of the body holding an executive session shall, however, be subject to the same rules of confidentiality and decorum as pertain to regular members of the body. Page 23 25 2010 N rn 2010 PACAB Attendance P = Present UA = Unexcused Absent Ex = Excused Absent Nm = no meeting Board Member Jan Feb March April May June July August Sept Oct Ron Long P P Ex Ex P P P P nm P Deborah Altermatt P P Ex Ex P P P Ex nm Ex Paul Tougas P P UA UA P UA UA Ex nm UA Daryl Schaefermeyer P P P P P P P P nm P Rob Buck P P P P P P P P nm P Dan Oliver P P P P P P P P nm Ex Please see Seward city code 2.30.315 Terms of Office, Filling Vacancies sub section (c) 2.30.310 ADMINISTRATION (c) The city manager will appoint a city employee to serve as an ex officio member of the board who shall have the privilege of the floor but not the right to vote. (Ord. 512, 1982; Ord. 553, § 1, 2, 1986; Ord. 93-23; Ord. 2000-13, § 2, 2000; Ord. No. 2006-02, § 1, 3-28-2006) 2.30.315. Terms of office; filling vacancies. (a) Members of the port and commerce advisory board shall be appointed for a term of three years; provided, that the terms of initial appointments shall be staggered so that as nearly as possible a pro rata number of members shall be appointed for each year. (b) The council may appoint any qualified person to fill a vacancy of any member of the board provided that the 4Wpintment shall be for the unexpired term of the vacancy. (c) Following a member's absence from three consecutive regular meetings of the board, the remaining board members shall decide whether the board member should be retained or whether to request council appointment of a new member. ta) members stall not be paid for services on the board or participation in board activi without prior approval of the city council. (Ord. 512, 1982; Ord. 93-23; Ord. 2000-13, § 2, 2000) 2.30.320. Meetings and quorum. (a) The board will meet at a time and place to be designated by the board. (b) Four members of the board shall constitute a quorum for the transaction of business except that, in the absence of a quorum, any number less than a quorum may adjourn the meeting to a later date. The affirmative votes of at least a majority of those board members present shall be required for any action. (c) All meetings and records of the board shall be open to the public. The board shall keep minutes of proceedings showing the vote of each member upon each question and shall keep records of any actions, all of which shall be immediately filed in the office of the city clerk and shall be a public record. (Ord. 512, 1982; Ord. 553, § 4, 1986; Ord. 93-23; Ord. No. 2006-02, § 2, 3-28-2006) 2.30.325. Powers and duties. (a) It shall be the responsibility of the port and commerce advisory board to: (1) Report annually to the city council at the first council meeting of the new fiscal year and at any other time as may be requested by the city council. The annual report shall include, at the minimum, a report on the prior year's activities, a list of any anticipated requests for appropriations for the year's planned activities and a recommendation regarding the continuation of the board; Supplement No. 06-1 2-34 27 Port and Commerce Advisory Board Agenda Statement Date: November 3, 2010 To: Port and Commerce Advisory Board From: Suzi Towsley, Executive Liaison Subject: Electing a new vice chair Background and Justification: The recent resignation of Vice Chair Butts from the Port and Commerce Advisory Board leaves the board with out a Vice Chair. A Board nomination and election of a new Vice Chair should take place to fill the vacant position. W Port and Commerce Advisory Board Resolution 2010-07 Sponsored by: PACAB CITY OF SEWARD, ALASKA PORT AND COMMERCE ADVISORY BOARD RESOLUTION 2010- RESOLUTION OF THE PORT AND COMMERCE ADVISORY BOARD, SUPPORTING AND PROVIDING RECOMMENDATIONS FOR CITY INCENTIVES AND SERVICES TO EXPAND EXISTING AND ATTRACT NEW BUSINESS WHEREAS, The Seward Economic Development Assessment 2010 suggested in conjunction with a Business Retention and Expansion Program the City establish incentive policies; and WHEREAS, incentives would assist growing Seward's existing business and recruiting new businesses; and WHEREAS, the Port and Commerce Advisory Board discussed possible incentives and made recommendations at their Regular Meeting August 4, 2010. NOW, THEREFORE, BE IT RESOLVED by the Port and Commerce Advisory Board that: Section 1. For the reasons stated in the recitals, the Board recommends Council support for the following incentives and services: 1. Assist in directing where to obtain low interest loans for property purchases & construction, and/or; 2. Provide low interest loans for the same, and/or; 3. Extend or waive payments for infrastructure installation (electricity/water/sewage) using existing assessment district options in Seward City Code, and/or; 4. Include water & sewage construction in the City's minimum payment agreement and/or; 5. Explore opportunities to assist with lowering interest rates for infrastructure construction, and/ or; 6. Provide lease payment options, including `balloon payments,' credit for developing infrastructure and lower payments as the lease matures, and/or; 7. Lengthen lease terms, and/or; 8. Expand the City's utility budget billing program, and/or; 9. Refund Building Permit fees after 1 full year of operation for a business either physically expanding their business or building a new location within City Limits, and/or; 10. Refund Conditional Use, Variance, and other Land Use Permit Fees after 1 full year of operation for a business either physically expanding their business or building a new location within City Limits, and/or 29 Port and Commerce Advisory Board Resolution 2010-07 11. Determine what City property is available for lease and/or for sale and list property on website with map and with state economic development organization(s), and/or; 12. Offer a fast -track license and permit systems, and/or; 13. Provide a business friendly environment, and/or; 14. Better define our economic development groups in town (i.e. PACAB, Chamber, Community Development Director and Wednesday Morning Business Breakfast), and/or; 15. Hire or assign someone to target market specific industries, developing long-term relationships with potential developers, corporations, businesses and industries that could operate out of Seward, and/or; 16. Heavily market port and harbor to potential, and/or; 17. Commit to Harbor development and expansion, and/or; 18. Advertise property, services and business opportunities in widely dispersed publications, professional organizations and websites, and/or; 19. Update the lease policy and procedures for the City of Seward, and/or; 20. Joint meetings with businesses, Chamber Director and Community Development to help navigate through City Processes, and/or; 21. Develop business `How To' kit. Section 2. This Resolution will be forwarded to Council for direction. Section 3. This Resolution shall take effect immediately upon its adoption. PASSED AND APPROVED by the Port and Commerce Advisory Board this 20th day of October, 2010. AYES: NOES: ABSENT: ABSTAIN: ATTEST: Jean Lewis, CMC City Clerk (City Seal) 30 THE CITY OF SEWARD, ALASKA Ron Long, Chair I % SE.,:S;MAU BOA; HARBOR I rJ � +•s �y I f ' 0 I r� ">`3'� I I eg 8 I 1)o> a. OCEANNEW II ,• -- — — suac Sa „' Iry L✓,9NfB�� i_ _ f+,ADanoNs 1 D,o_r Y I I UPLAN05 LINE TABLE Y4W as sorai : iem ;- ATS 174 Seward Boat Harbor .w 1. rxur - - - - - - - - - -------------- ® ---- - -------------- 14 '. LOT 17A _--' �, I / BLOCK ,6 ^ / ATS 174 Res' rrecilar Bay � � I—`— — —8 ,`�( , \,jam •➢ VA.N BUREN ST '"' e 'yyT �•`,,, M`l•. e 2 Y iAUMER AODIRON I I ,...✓ .'` I ,.xv c-.,•.ar -�NJ L /• 33 y. }'F S DI? S In 'N i eJ Rl`yyy 2 1 930 nil :2 /I WGGTYUAP I'luHE % •'/ CERTMCAIE Df ONNLRSH/R AND �pCA iHlx /�, � �! � ° el r.�vw� o,"„ :"per � "nre.. m,�.�`w.:;:'Mf",• ,� Y �/ n, .N.,=•.. Ps.:ra�N°Y44s4 / / WASTEWATER DISPOSAL =, I -- NOTARYs AbrxOxi Df£�MNT NO7E5 V 1 rwr°�"110 n4Wfkr,. W re a� ✓," ` i•m,1`°a`",mw�>er xa w'rniiwi ioie xo wem N Sxre aune•nw i�"Arow• '•D a"n�i w 0, u, snN -s�9enatNv� LEGEND NQA.A. FOAL INFORMAPON 0 v rov. SEWARO A A POE STAPON AL ® = A.4r A Ax ty Loi: 6097't2N • Aar A w �� Long: 14975•32'W „mod sro• w°r 6-111 41 er,re PK n'm M.O.AA. DATA SHEET 945 W90 PUBUSNED 1012218466 B zs14'Nre "emu i i% • u.,,.. em .rr • /a re' • � /:jy •lq.yr s b MEANMHIGH :R 9. l' WATER uF.W A S.' L�-Cw WA- .. ---- nn vr"9 ymlw JLi!_i6 ayp,e„eoee /wee :m,r • ti—W IO m-m .e:ru xro ne, L SUFKraRY GERwl.4E .ewr,y en . marbq m rY 4m �roA re MONUMENT DETAILS ir�E/7oo9/7009 _ Nr M1 NJ N4 v PLAT APPRD" ��aw...e sm rw n 4ruvpl eM AN yITT I � r ._.�.�_ 03 �. _.�1 II fi L3 Ca .. IL A'i T rf I F! E 17T=I f.r� { P vu{k� Ur��� tiff 1'0 0 4 ^' . rWxm ffV- IMfrr 14i f fi i =°a ', ,� \`�. Itil 1 yf 11 tf. II II 11 II It I i �x� ,;���� 1t �t-� t kY �. 4 -:.�'Y}�+��lih.p�t�,^'�'' •�J r�� 3 F 01,10 it iHB�{�"k1 % was Fdf n �R > 't T . `y .+.yX.� 3 ft� 'y • e TOTAL VEHICLE STALLS TRAILER HANDICAP �d ! f ' � ark �+'"�rn^4�53✓. . �. i � .` � e riSWitir, NIEftI`NI1N F s�� I �'r °• i�5`RY ,� PARALLEL —. ..__ *J";�[' 'L'r.'v .•,- i'f:ux.ov§ STANDARD 100 EASEMENTS AROUND FIRE HYDRANTS 15' SIDE OF WATER OR WASTEWATER LINE 15- (3D' TOTAL) PRNMRY ELECTRICAL LINES 20' - .... _. SECONDARY ELECTRICAL LINES 10' Sponsored by: PZ Commission and PACAB CITY OF SEWARD, ALASKA RESOLUTION 2010-058 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, ENDORSING THE SOUTH HARBOR UPLANDS TRYCK NYMAN HAYES CONCEPTUAL DEVELOPMENT PLAN OPTION TWO AS ATTACHED WHEREAS, Council directed the Planning and Zoning Commission and the Port and Commerce Advisory Board to hold a joint work session to provide development recommendations for the new South Harbor Uplands; and WHEREAS, previous to the May 11, 2010 Joint Work Session the Port and Commerce Advisory Board held additional work sessions and provided recommendations to Council; and WHEREAS, previous to the May 11, 2010 Joint Work Session the Planning and Zoning Commission, Seward City Council and the Kenai Peninsula Planning Commission made recommendations and approved South Harbor Uplands Plat 2009-17; and WHEREAS, the Planning and Zoning Commission and the Port and Commerce Advisory Board recommend that the first projects that should receive initial funding efforts include the Fishing Pier and Boardwalk, both with ADA accessibility; and WHEREAS, the Historic Preservation Commission, Port and Commerce Advisory Board, Planning and Zoning Commission, and Council have all approved Resolutions supporting the concept of the Mariners Memorial; and WHEREAS, the attached conceptual plan and recommendations shall be incorporated into the update of the Small Boat Harbor Development Plan. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA that: Section 1. The South Harbor Uplands Tryck Nyman Hayes Conceptual Development Plan Option Two as presented at this meeting is hereby endorsed as attached hereto. Section 2. The structure types on the Harbor Commercial north side of the uplands and all parking are excluded from the conceptual development plan endorsement and will be reviewed for appropriate improvement types during later development stages. Section 3. All parking and proposed uses of this property shall be brought before council. Section 4. This resolution shall take affect immediately upon its adoption. PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 12t' day of July, 2010. 33 (City Seal) CITY OF SEWARD, ALASKA RESOLUTION 2010-058 AYES: NOES: ABSENT: ABSTAIN: ATTEST: THETCITYSEWARD, ALASKA Willard E. Dunham, Mayor Valdatta, Bardarson, Shafer, Amberg, Dunham None Keil, Smith None can Lewi , C ity Clerk a561u.8„"� �•••' OF 3610t• P. q. •�0� ••��i • SEAL80 • 34 w MI Council Agenda Stai Meeting Date: July 12, 2010 Through: City Manager Phillip Oates From: Agenda Item: Community Development Director Chri; ENDORSING THE SOUTH HARBOR HAYES CONCEPTUAL DEVELOPMENT PLAN OPTION TWO AS ATTACHED BACKGROUND & JUSTIFICATION Under the June 2003 Project Cooperation Agreement between the Department of Army and the City of Seward for Construction of the Harbor Improvements, dredged and excavated material was deposited behind the newly extended Breakwater creating approximately 3.5 acres of filled land described by the Corps as `BOD Disposal Area L" On February 12, 2007 the City of Seward authorized the approval of the Department of Army memorandum for record and accepting Disposal Area 1. This area is owned by the City of Seward, but also remains subject to the federal doctrine of navigational servitude. Council directed the Planning and Zoning Commission and the Port and Commerce Advisory Board to hold a joint work session to provide development recommendations for the new South Harbor Uplands. Both Bodies had developed and sent their recommendations to Council on various aspects of development of this newly created parcel. The Port and Commerce Advisory Board held additional work sessions and provided recommendations to Council including Resolution 2008-03. The Planning and Zoning Commission, Seward City Council and the Kenai Peninsula Planning Commission made recommendations and approved South Harbor Uplands Plat 2009-17. Also, the Historic Preservation Commission, Port and Commerce Advisory Board, Planning and Zoning Commission, and Council have all approved Resolutions supporting the concept of the Mariners Memorial. A Joint Planning and Zoning Commission and Port and Commerce Advisory Board Meeting was held on May 11, 2010 with many Council Members, Administration and public also in attendance. Recommendations developed at the meeting are included in the resolution including: Tryck Nyman Hayes Conceptual Development Plan Option Two should be adopted as the development plan; initial funding should be sought for the development of the Fishing Pier and Boardwalk, both with ADA accessibility; the current zoning should remain as it is in harmony with the development plan; and the structure types on the Harbor Commercial north side of the uplands should be excluded from the conceptual development plan approval and should be reviewed for appropriate improvement types during later development stages. The Planning and Zoning Commission and the Port and Commerce Advisory Board disagree regarding the zoning recommendation for this parcel. This Resolution before Council tonight only 7 KET endorses the TNH Conceptual Development Plan Option Two, excluding the structure types, and does not recommend a zoning designation. INTENT: This resolution proposes to endorse the South Harbor Uplands Tryck Nyman Hayes Conceptual Development Plan Option Two as presented at this meeting as attached excluding the structure types. This plan will be used to guide future development and supports initial funding efforts be placed on the ADA Fishing Pier and Boardwalk. CONSISTENCY CHECKLIST Where applicable, this agenda statement is consistent with the Seward City Code, Charter, Comprehensive Plans, Land Use Plans, Strategic Plan and City Council Rules of Procedures. Other: Small Boat Harbor Development Plan FISCAL NOTE: No fiscal impact with the approval of this plan. Approved by the Finance Department:y� �i�C,dK-,•-, ATTORNEY REVIEW: Yes: No: X RECOMMENDATION Approve RESOLUTION 2010-058 ENDORSING THE SOUTH HARBOR UPLANDS TRYCK NYMAN HAYES CONCEPTUAL DEVELOPMENT PLAN OPTION TWO AS ATTACHED 3 37 Port and Commerce Advisory Board Resolution 2010-08 Sponsored by: PACAB CITY OF SEWARD, ALASKA PORT AND COMMERCE ADVISORY BOARD RESOLUTION 2010-08 RESOLUTION OF THE PORT AND COMMERCE ADVISORY BOARD, OPPOSING AN APPLICATION FROM AQUABOUNTY TECHNOLOGIES, INC. TO THE U.S. FOOD AND DRUG ADMINISTRATION (FDA) TO APPROVE AND MARKET GENETICALLY ENGINEERED ATLANTIC SALMON IN THE UNITED STATES WHEREAS, AquaBounty Technologies, Inc. has submitted an application to the FDA for approval of the "AquAdvantage Salmon", a genetically engineered Atlantic salmon, for human consumption and marketing in the United States; and WHEREAS, this is the first genetically engineered animal intended to be use for food in the United States; and , the "AquAdvantage Salmon" was bred by inserting a recombinant DNA construct (also known as a transgene) comprised of a Pacific Chinook salmon growth hormone gene and an Ocean Pout antifreeze protein gene into fertilized eggs of wild Atlantic Salmon. The bredding of six subsequent generations led to an "AquAdvantage Salmon" line which bears a single copy of the integrated transgene. The broodstcok used in spawning of "AquAdvantage Salmon" are females containing two copies of the transgene that have been scientifically sex -reversed for breeding purposes, therefore labeled neomales. The neomales are crossed with female Atlantic salmon that do not posses transgene to produce eggs containing a single copy ofthe transgene. The fish that develop form these eggs grow at an enhanced growth rate compared to non-transgenic Atlantic salmon; and WHEREAS, AquaBounty Technologies, Inc. proposes fertilization and incubation to the eyed -egg stage on Prince Edward Island, Canada; shipment of the eyed -eggs to Panama; grow -out and processing of fish in Pananma; and , shipment of processed fish to the United States for retail sale. While AquaBounty maintains the land based rearing ofthe "AquAdvantge Salmon" to be safely contained with a minimum risk of escapement into the wild; and, in the event of there is an escape, believes tha the geographical area of the salmon rearing is unfavorable to the survival of "AquAdvantge Salmon", Alaskans know all to well that fish farming containment measures are not fail safe. In addition, AquaBounty does not address the possibility of eyed -eggs making their way into the streams that run into the Northern Pacific Ocean; and 38 Port and Commerce Advisory Board Resolution 2010-08 WHEREAS, Sewards Port and Commerce Advisory Board urges the FDA to honor the FDA Amendments Act of 2007 provision (PI 110-85) requiring the FDA Commissioner to "consult with the Assistant Administrator or the National Marine Fisheries Service of the National Oceanic and Atmospheric Administration to produce a report on any environmental risks associated with genetically engineered seafood products, including the impact on wild fish stocks", and WHEREAS, Alaska's wild seafood industry is extremely important to the state and to the economy of the Seward area, and it could be severely impacted by the sale of genetically engineered salmon if proper labeling is not required. Should the FDA approve AquaBountys Application to market their product in the US, it is crucial that the product be mandated to be clearly labeled "Genetically Modified" to allow customers to make an informed decision. NOW, THEREFORE, BE IT RESOLVED by the Port and Commerce Advisory Board that: Section 1. For the reasons stated in the recitals, the Board recommends Council oppose the approval of genetically enhanced salmon in the Untied States. Section 2. If despite strong environmental and human health concerns the application is approved by the FDA , product labeling requirements should include the words "Genetically Modified" prominently displayed in a minimum font size and a contrasting color on the front of the package. Section 3. This Resolution will be forwarded to Council for direction. Section 4. This Resolution shall take erect immediately upon its adoption. PASSED AND APPROVED by the Port and Commerce Advisory Board this 3rd day of November, 2010. THE CITY OF SEWARD, ALASKA Ron Long, Chair 39 Port and Commerce Advisory Board Resolution 2010- AYES: NOES: ABSENT: ABSTAIN: ATTEST: Jean Lewis, CMC City Clerk (City Seal) 40 JpG 1N 7ryF CITY OF PETERSBURG /.dye CPftlRRTp SFs�i P.O. BOX 329 • PF,TERSBURG, ALASKA 99833 eN r 'TELEPHONE (907) 772-4519 FAX (907) 772-3759 To: Mayor and Councilors of the Coastal Alaska Communities of Angoon, Coffman Cove, Cordova, Craig, Gustavus, Haines, Homer, Hoonah, Hydaburg, Juneau, Kake, Kenai, Ketchikan, Klawock, Kodiak, Kupreanof, Metlakatla, Pelican, Seward, Sitka, Tenakee Springs, Thorne Bay, Valdez, Wrangell, and Yakutat From: Debra K. Thompson, Deputy City Clerk Date: October 11, 2010 Dear Neighbors, Please join the City of Petersburg in urging the US Food and Drug Administration to decline an application submitted by AquaBounty Technologies, Inc. requesting approval of genetically engineered Atlantic salmon for human consumption and to market them in the United States. If approved, the "AquAdvantage Salmon", also known as the Frankenfish, will be the first genetically engineered animal intended to be used as food in the U.S. Alaska's wild seafood industry could be severely impacted by the sale of genetically engineered salmon if AquaBounty's application is approved and proper labeling is not required. If, despite environmental and human health concerns the application is approved, the Petersburg City Council strongly believes it crucial that the FDA mandate the product be clearly labeled "Genetically Modified" to allow consumers to make an informed choice. Enclosed is a copy of the City of Petersburg's Resolution #1952 opposing AquaBounty's application. The FDA is accepting comments on the labeling of food made from "AquAdvantage Salmon" until November 22, 2010. All comments must reference: Food and Drug Administration Docket No. FDA-2010-N-0385. Comments can be sent electronically at the Federal eRulemaking Portal: http://www.regulations.gov, or you can fax or mail your comments to the FDA at: Division of Dockets Management (HFA-305) Food and Drug Administration 5630 Fishers Lane, Room 1061 Rockville, MD 20852 Fax: 301-827-6870 United we are strong. Please share this resolution with any communities I may have missed and voice your concerns to the FDA as soon as possible. Sincerely, � Jl � UL— Debra K. Thompson Deputy City Clerk 41 PACAB Agenda Statement Meeting Date: November 3, 2010 Through: City Manager Phillip Oates From: Community Development Director Christy Terry Agenda Item: South Harbor Uplands Parcel Size Recommendations BACKGROUND & JUSTIFICATION Council Approved Resolution 2010-058 endorsing the South Harbor Uplands Conceptual Development Plan Option Two with two caveats 1) The structure types were to be determined and in addition 2) the parking and proposed uses of the property would need to return to Council for final determination. PACAB has been tasked with providing recommendations on lease parcel sizes for the South Harbor Uplands. Some items to consider in your deliberations: a) The parcel is split zoned with Harbor Commercial to the North and Park to the South. (a zoning map will be displayed at the PACAB meeting.) b) The strip of land between the two utility easements on the northern portion of the parcel is about 55-60' in width. (a parcel map will be displayed at the PACAB meeting in addition to the one provided in the packet) c) The buildings displayed in the South Harbor Uplands Fill Area Conceptual Development Plan Option 2 are sized as follows beginning east and moving west: two 30'x40', then two 30'x60', then six structures 8 %' by 20', and the final building to the west before the bathroom is the Harbormaster's building without a size designation (conceptual plan provided in packet.) d) For comparison (a plat map of these sites will be posted at the PACAB meeting): a. Boardwalk lease sites in the harbor are about 30'x 36' lots, b. `Marina Restaurant' lease parcel is about 80'x 100', c. two lease parcels to the north of the `Marina Restaurant' are 42'x 100', d. `Ray's' lease parcel is 105'x 82', e. `KFT' lease parcel is 131'x 45' e) Development requirements in the HC district are as follows; a. building height is limited to 26 feet, b. no minimum buildable lot size, c. no front yard setback d. no side yard setback 42 e. In the HC District, parcels abutting mean high tide —No rear yard setback; parcels abutting the waterfront boardwalk —Five feet; and parcels not abutting the waterfront boardwalk or mean high water mark —Ten feet. f. 100% lot coverage allowed f) Will one of the requirements in these lease sites mandate decks and structures connecting to the conceptual board walk? g) Electric easement to the north- is it really necessary or can it be shifted to allow ease to access the lots and allow a connecting boardwalk? The Electric Department has verbally indicated that a removal boardwalk would be allowed in the easement. h) Will dumpsters be co -located since there will not be vehicle access to north side of parcels? i) PACAB should discuss other operational logistics using their collective experience. CONSISTENCY CHECKLIST Where applicable, this agenda statement is consistent with the Seward City Code, Charter, Comprehensive Plans, Land Use Plans, Strategic Plan and City Council Rules of Procedures. Other: Small Boat Harbor Development Plan RECOMMENDATION PACAB provide recommendations for the South Harbor Uplands Lease Parcel Sizes. 43 Port and Commerce Advisory Board Agenda Statement Date: November 3, 2010 To: Port and Commerce Advisory Board From: Suzi Towsley, Executive Liaison Subject: Setting a work session topic for November 17, 2010 Backp-round and Justification: Administration recommends that PACAB Set its next work session topic for November 17, 2010 to Review and Provide Recommendations on Nominating Public Lands for Lease and the Lease Proposal Policies and Procedures 44 City of Seward, Alaska Port and Commerce Advisory Board Minutes August 4, 2010 Volume 3, Page CALL TO ORDER The regular August 4, 2010 meeting of the Seward Port and Commerce Advisory Board was called to order at 12:07 p.m. by Chair Long. PLEDGE OF ALLEGIANCE TO THE FLAG led by Chair Long ROLL CALL There were present: Chair Ron Long presiding, and Board Members Dan Oliver Rob Buck Darryl Schaefermeyer comprising a quorum of the Board' Excused: Deborah Altermatt, Paul Tougas, Theresa Butts Absent Also were present: Christy Terry, Community Development Laura Cloward, Chamber of Commerce Suzi Towsley, PACAB Liaison Public: SPECIAL ORDERS, PRESENTATIONS, AND REPORTS - Chamber of Commerce Report: Director Laura Cloward • Reports are varied for local tourism this year; Army resort numbers look good, Visitors centers numbers are down, Local businesses are varied. • There were a record number of applicants for July 4`h Mount Marathon race. • The Silvers are in and it looks like it will be a great year for the Derby. • The chamber continued to pursue alternatives for future funding of salmon stocking programs. There was general discussion ofthe limits during the silver salmon derby, conservation/replenishing of stock in the bay and the fishery sustainability. General discussion of the upcoming Ombudsman position resolution between Board and director Cloward took place. 45 City of Seward, Alaska August 4, 2010 Volume, Page Port and Commerce Advisory Board Minutes Community Development Report: Christy Terry • Kenai Peninsula Economic Development Division report excerpts were reviewed. • City July camping numbers are up. • Representatives from the United Methodists Women's division had a walk through of the old Wesley building on Monday with representatives from the City and had recommitted to being good neighbors in the community and working to keep the vacated facility form becoming an attractive nuisance and moving forward • The Chamber lunch was on Friday and the Lt Governor was scheduled to be in attendance and speaking. • City Council Land Policy and Lease procedure work session would be August 5, 2010. • Planning and Zoning were continuing to revise Title 15 of City Code and would being sending approved portions to council for consideration and approval, including sign code. • Terry explained that there was an executive session on Title 7 prior to the work session on Monday August 9 beginning at 5:00 pm. • Planning and Zoning Commission discussed the ordinance to allow Wind Energy Conversion systems within the City of Seward. There were no Citizens Comments. Approval of agenda and consent agenda; The consent agenda was approved via unanimous consent. PACAB reviewed the schedule of City Council Work sessions in June and July. The board touched briefly upon the upcoming WTC meeting to announce the Governor's North Star Awards for Excellence in Anchorage. Chair Long stated he would be in Anchorage and was tentatively planning to attend. Board discussed the notes and ideas included in the packet on the Economic Development study: Idea l and were discussed and not supported by the board. 3- The idea of extending or waiving payment for infrastructure (electricity/sewer/water). This had been done in the past, post earthquake and was possible as far as PACAB knew. The board expressed support for this program. This rolled into Item 4-Special tax assessment district classification was discussed and the potential for how that could affect city coffers. Would that have performance based thresholds involved? 5- Chair Long expressed the desire to see the City be revenue neutral on the development of economic incentive by making sure these were neither cost or revenue generators. 6 and 7- The fairness of lowering new businesses tax rates or lease payments as opposed to existing ones was discussed. The board asked director Terry to rework numbers 6 and 7 into any resolution of support. The board supported the idea of the city lowering or delaying lease payments required from businesses, sometimes on individual criteria. This incentive could also be based on the business improving property, infrastructure development and meeting a threshold ofviability. Provision for a 46 City of Seward, Alaska August 4, 2010 Volume, Page Portand Commerce Advisory Board Minutes reasonable exchange ofvalue for developed infrastructure should be considered as an incentive in city leases. This topic would be addressed at the Council work session on August 5 2010. The plausibility of the City helping to get businesses lower insurance rates was discussed by the board. 10- The board supported the idea of the city refunding building permit fees after one full year of operation. The board also discussed and supported the idea of refunding or waiving conditional use permit fees or variance fees if those were approved. All of these would potentially affect the general fund, though the board believed the affect would be nominal. Schaefermeyer asked about specific business dis-incentives, i.e.; sign code, zoning code. Terry responded that she believed that these were being discussed and ironed out as individual cases. 1-City engineer- the board was informed that each department hired or contracted out for specific projects and the city does not currently have an engineer or civil engineer. 2- Building inspector- the board believed that this would be in competition with the private sector. 4-List of all the leased and sale property on the website- use of the Alaska prospector was supported, 11,12,13,14 all went together, as the idea of Port Marketing Director history was discussed. The board expressed that they would like to see this discussion compiled in a resolution for council. Marketing and capital improvement, completion of the SMIC basin was discussed for all its positive potential. The possibility of a private investor fronting capital was discussed. A Hydro study of the basin was being done some while ago and the board members remarked that they would like to see that if it had been completed. 17, Business "How To" kit was supported by the board. Directed Terry said that she had started that work. NEW BUSINESS Resolution 2010-06 Motion (Schaefermeyer/Buck) Adopt Resolution 2010-06 of the Seward Port and commerce Advisory Board, supporting and providing recommendations on the creation of a Seward Ombudsman Public Comment made in support of the resolution Motion to amend 2010-007(Long/Buck) And 47 add and business retention and expansion program to title Changes WHEREAS, an economic development ombudsman position would serve as the primary point of contact for existing Seward area new —businesses and attracting new businesses to the Seward area and as a liaison between the business community and relevant City of Seward, Alaska August 4, 2010 Volume, Page And Addition Amendment passed unanimously Port and Commerce Advisory Board Minutes government departments and commissions; and WHEREAS, this position would pufsae assisting growing existing business, recruiting new businesses, generating events; WHEREAS, will be most effective if independent of the City administration in developing its findings and recommendations but with the necessary ,cooperation of the administration in order to fulfill its functions. Motion for secondary amendment to 2010-007 (Long/Buck) Change Section 1. to read: Section 1. For the reasons stated in the recitals, the Board recommends Council authorize the development of an ombudsman position and business retention and expansion program to be implemented by a qualified employee or by contract with such contract with the chamber of commerce with such contract detailing the specific services to be provided. Secondary Amendment passed unanimously Main Motion Passed as Amended Unanimous Board approved unanimously canceling the August 18 works session and replacing it with the August 5 council work session. July 7 2010 Minutes approved by consensus, with amendments. BOARD AND ADMINISTRATION RESPONSE TO CITIZENS' COMMENTS — Rob Buck: would like to see better communication with administration on future title changes to help streamline the process. Schaefermeyer agreed. City of Seward, Alaska August 4, 2010 ADJOURNMENT The meeting was adjourned at 1:56 Suzi Towsley Executive Liaison (City Seal) Volume, Page 49 Port and Commerce Advisory Board Minutes Ron Long Chair www.AlaskaRailroad.com • (907) 265-2300 37-year industry veteran begins top executive job in late September Even before his official start date of September 23, the Alaska Railroad's (ARRC) new President and CEO Christopher Aadnesen attended a railroad leaseholder meeting and board meeting in Fairbanks mid -September. The next couple of weeks he was on the road, getting acquainted with the railroad's infrastructure and people. This is familiar territory for the 37-year industry veteran, who is well -versed in railroads large and small, privately and publicly owned, and located in America and abroad. He most recently (2007-2010) worked for HNTB Corporation, a nationwide consulting firm. Based in Austin, Texas, Aadnesen led national freight rail services for all seven of the U.S. Class One railroads. From 2004 to 2007, Aadnesen was CEO and chairman of the management board for Estonian Railways (ER). Like ARRC, ER provides passenger and freight services and is owned by a government (privatized in 2001, ER ownership was sold back to the (see ".Vein PresidentICEO" on pa;e 2) Ownership transfer to enhance public access to historic collection In late September, the Alaska Railroad formally transferred ownership of its historical photo collection to the Anchorage Museum at Rasmuson Center. The collection consists primarily of photographs, but also includes postcards, invitations, brochures, commemorative buttons and pins, anniversary press packet, reports, rail tickets, and video film. The museum has had physical custody of the collection for decades through an informal loan agreement. During this time the museum has helped to preserve, organize, repair, duplicate, describe and exhibit the materials. The deed of gift provides the formality required for the museum to obtain grants and other funds to enhance future efforts to preserve, protect and display the collection. �c[+e li1l;CN1i1 A`oru iMUn,>, nn �3% 50 RKHORDUSES 00 First herbicide application in 28 years provides safe, effective tool In late July the Alaska Railroad (ARRC) applied a glyphosate herbicide along 30 miles of the track between Seward and Indian and within the Seward Yard. This fol- lowed a year -long Alaska Department of Environmental Conservation (ADEC) permit process, and two months of subsequent legal actions. To recap, in summer 2009, ARRC requested an ADEC permit to use AquaMaster (an herbicide EPA approved for use in and around water). After a year -long review, ADEC approved the permit in late April 2010. On June 1, environ- mental groups appealed, asking the ADEC commissioner for: 1) an immediate stay to prevent spraying; and 2) an adjudica- tory hearing to decide if ADEC improperly issued the permit. The commissioner denied the immediate stay except around a handful of private wells. Represented by the Trustees for Alaska, opponents appealed. In late July, the Alaska Supreme Court declined to overturn the commissioner's decision, allowing ARRC to proceed with the herbicide application. The railroad hired a licensed and experienced contractor to apply the herbicide in select areas where water bodies were further than 100 feet away, as stipulated by the permit. Spraying occurred July 25-27. The herbicide did an excellent job of getting rid of weeds between the rails and ties, allowing inspectors to easily see the track. Even so, vegetation remains on the track shoulders where train and maintenance crews walk so that track maintenance crews still manually and mechanically clear vegetation in these areas. (cuutinited Ji-om pine /) country in a year -long process overseen by Aadnesen). In 1996, Aadnesen founded Capitol City Group, a consulting firm in Austin. Through 2009, Aadnesen specialized in rail transportation and logistics, management, planning, and quality systems development. From 1996 to 2000, Aadnesen held several executive positions for the Texas Mexican Railway and TFM (the first privatized Class One section of the old Mexican National Railway), including COO and executive VP The previous two decades he was employed by Union Pacific, working with nearly every department involved with railroad management. 51 An adjudicatory hearing is set for April 5-15, 2011, to decide: 1) Does herbicide application near water wells pose an unrea- sonable adverse effect? And, 2) Does applying herbicides under the conditions set in the permit pose a risk of adverse effect and would that effect be unreasonable? Depending on the answers, the permit may be revoked or the permit may be reaffirmed. Additional stipulations could also be imposed on the permit. The commissioner's decision can be appealed in court. In the meantime, ADEC has monitored the railroad's use of AquaMaster. A month after application, ADEC conducted a post -application evaluation around Seward. "There was a clear line of demarcation along the edge of the spray area," noted Karen Hendrickson, ADEC Pesticide Program. "Most vegetation within the spray area was dead or browning, and vegetation outside of the sprayed areas was green and showed no signs of pesticide impact." This observation underscores initial findings of an ongoing University of Alaska Fairbanks study on herbicide use along the Alaska Railroad. The study demonstrates that AquaMaster does not migrate or linger in the soil. The two-year study first focused on the railroad's south end, and is now researching herbicide behavior on the northern end. A final report on south end results, and preliminary data from the north end research, are expected before the end of the year. S Aadnesen earned a bachelor's degree and a master of business administration degree from the University of Utah. Subsequently, he completed University of Pittsburgh and Harvard University executive management programs. Wherever he goes, Aadnesen becomes involved in the community. While in Georgetown, Texas, he chaired the local planning and zoning commission, served on a local theatre board and wrote columns for the local newspaper. While in Europe, Aadnesen served on the board of the Community of European Railway and Infrastructure Companies in Belgium, and was VP of Estonia's American Chamber of Commerce. • 111111 D 1 Anchorage and Fairbanks meetings invite discussion from leaseholders The Alaska Railroad Real Estate Department organ- ized two Tenant Town Hall meetings in Anchorage and Fairbanks in mid -September to provide a forum for face-to-face dialogue on issues important to real estate customers. Members of the ARRC Board Real Estate Committee (John Binkley, Jack Burton and Jon Cook) and of the Real Estate & Facilities Department were on -hand to greet customers and answer their questions. About 40 people attended the Fairbanks event and about 50 attended the Anchorage event. As noted during the events, real estate customers are very important to the Alaska Railroad. During economic down- turns, real estate's stable net income is even more crucial to ARRC remaining self-sufficient. Lease revenues also help to fund capital projects that don't qualify for federal funding. "Not surprisingly, many of our leaseholders were interested in HB 357, the land sale law that passed the legislature last ses- sion," said VP Real Estate Jim Kubitz, who moderated both rcontiuued from p, ,,e Ij The transfer agreement stipulates that the collection must remain in Anchorage. Requests for commercial use of the photos must still be approved by the railroad. The museum may convey some materials that are better suited for the National Archives and Records Administration (NARA). Last year, the railroad transferred ownership of Railroad documents and records from federal ownership era (1914 to 1985) to the NARA Anchorage facility. The railroad collection has always been important to the museum, said Chief Curator Marilyn Knapp. "This collection gets a huge amount of use. We consider it a heritage / legacy collection because of the railroad's significance to state history." Now that the museum owns the collection, more staff time can be dedicated to expanding opportunities to enhance in - person and electronic access. "We plan to make more of the collection accessible online through two fronts," explained 52 forums. "The law has raised expectations for the sale of rail- road land, and we spent quite a bit of time explaining what the law means to our leaseholders. We explained that the process for land sale or transfer remains relatively the same in that the railroad board and legislature must still approve a proposed land sale. The railroad board is currently working on a policy to interpret the law's language and to clarify land sale criteria." Railroad staff and board members assured both gatherings that leaseholders and the public at large would have ample notice and opportunity to comment on the board policy as it is developed. Other topics included the cap and floor on lease rents, the land appraiser selection process, responsibility for lease land improvements such as sewer and water service, municipal tax assessments, lease contract insurance and immunity provi- sions, tenant representation on the railroad's board of direc- tors, and the appraisal appeal process. A i Knapp. "We have our own collection database management system linked to an e-museum that we expect to finalize in a year or so. Secondly, we'll continue to partner with the Alaska Digital Archives (http://vilda.alaska.edu)." Alaska Digital Archives is backed by a consortium of libraries with main support and servers at the University of Alaska Fairbanks. lhiecmn Curator_llarilivi An,epp, Left, amiRetilroad VPof (,�,�/,;u•ateAffair, 1Kendli Iinclskon� si;;; tbea�neeinent. �0�� O D PMS D �o� oo�� ONRUBLE �� Sales-and-signing events scheduled for Dec. 4 in Anchorage and Dec. 18 in Fairbanks The Alaska Railroad's 2011 commemorative annual poster/print will be available in early December, in time for holiday gift giving to railroad fans and art enthusi- asts. The artist will be on - hand at sale -and -signing events slated for December 4 at the Anchorage Historic Depot, 411 W. Ship Creek Avenue, and on December 18 at the Fairbanks Depot, 1745 Johansen Expressway. Both Saturday events are from 10:00 a.m. to 2:00 p.m. The 2011 artwork is a painting that depicts a freight train crossing the Matanuska Bridge, about 35 miles north of Anchorage. The artist is Douglas Girard from Palmer, Alaska. Girard holds a bachelor of fine arts degree from the Art Center College of Design in California. He has worked as a 005 *ON J IMHd >IV `dDV'dOHDNV aldd HDVISOd Yn Q,I,S LdS2Id freelance illustrator, taught art classes and completed numerous private commis- sions. His artwork is sold through galleries in Anchorage, Wasilla and Palmer. Girard has been fea- tured by local and national news media and his paint- ings are included in nation- al and international collec- tions. Since 1979, the Alaska Railroad has commissioned an artist annually to produce art- work as the basis for limited edition prints, posters, lapel prints and other cloilectables. As in years past, the railroad will produce 750 signed and numbered prints, and 4,000 posters. They will be available through the Anchorage Historic and Fairbanks depots, and from the railroad's online gift shop. Prints cost $55 and posters are $30. • :mopaq ssaxppr pirwa aye of pprwa dq aw m iuDs sail 6.zuuueumD iu m I 'saA palpadssyy awrly ❑ p ourya uosiad »rIuoD OU071A ssaxppy Ado:) auo ury axon, 3upnpa:)a21 :xsq Ouiprui xaixapsmau xnof ui sxoxxa Suimogoj aqx xaaxxoa asrapd p;p i , ,� ;� d"W 00SZ-01 S66 XV `aSBaotloud uo pawed 00Szol Xog 'OBI $> uonr.rodto:) proapgd 731sEfV 53 Economic Development Survey Questions City of Seward Town Hall Meeting November 4, 2010, 7 PM, IMS Rae Building, Corner of 3rd and Railway Avenues The City of Seward is sponsoring an Economic Development Town Hall Meeting to address three key economic development issues: (1) year-round city support of retail, restaurant, and lodging businesses; (2) city encouragement of small businesses and start-ups; and (3) changes the city could institute to become more business friendly. To allow identification of key issues, please provide your input to the following questions no later than November 1, 2010 to datwoodCtcityofseward.net, drop off physically at the Clerk's Office located at 410 Adams Street, or mail to the Community Development Department, P.O. Box 167, Seward, AK 99664. Alternatively, please be prepared to discuss these issues at the Town Hall Meeting. Anonymous responses are acceptable. 1. What can the City do to support retail, restaurant, and lodging businesses year-round? a. Is there any support or service the City should provide to encourage retail, restaurant or lodging business success? b. Should the City offer incentives to assist retail, restaurant, or lodging businesses to remain open in the winter? If so, what incentives would be helpful? c. If it was determined that a City of Seward marketing or "Buy Local" campaign should be undertaken, what organization should lead the effort? (1) City of Seward; (2) Chamber; (3) Merchants' Association; (4) High School (as a student project); (5) Other (please list): 2. What can the City do to encourage retention or start-ups of small businesses? a. What specific changes to the Seward City Code or City lease procedures would encourage entrepreneurial or small business start-ups or retention? b. Are there any industry specific or other support services that you feel are necessary to encourage small business start-ups or retention? c. What types of entrepreneurial or small start-up businesses are viable in Seward? d. Should the City offer incentives to assist entrepreneurial or small business start-ups in Seward? If so, what incentives would be helpful? e. Are you willing to participate on the Port and Commerce Advisory Board or on a Seward Business Retention and Expansion Task Force? 3. What would you change or do differently for the City to become more supportive of business and establish a friendlier business environment? a. Please list or describe the greatest obstacle to operating your business in Seward that the City could help eliminate? b. If a Business Ombudsman position is established, where should that position exist: City staff, Chamber, or as an independent entity? Should the position be volunteer or funded by the City or Chamber? c. Are there specific challenges your business is facing where the city could assist? d. What recommendations do you have for improving the business climate or quality of life in Seward? 54 2010 ALASKA REGIONAL PORTS CONFERENCE �NQVE 1�8 2a1:0 SON A1,P The U.S. Army Corps of Engineers., and the Alaska Department of Transportation and .Public Facilities are. pleased to invite you to attend the 2nd Alaska Regional Ports Conference. Meeting, goals are to share information :on agency accomplishments, review outcomes of Alaska Regional Ports Study, collect input on goals and priorities related to Alaska's water infrastructure., and discuss Alaska port and harborprojects. 8:00am-4,00pm Egan Civic & Convention Center Summit Hall Lower Level Meeting Room 555 West 5th Avenue, Anchorage, Alaska Conference Fee: $30 (for working lunch) Register online at http://www.poa.usace.army.mil/en/cw/AKPortsStudy.htm Doors will open at 7:30am. Please arrive early to check -in. LO LO s Si CC WS (Camera Surveillance) City Council Meeting Nand Richey lc:P&Z.wtuk 5e iong'; PAOkl Wlw It , , �°Social Security SIcRe Northern Wisdom • Trust • Relevance • Innovation This publication was funded in part through a grant from the State of Alaska, Department of Commerce, Community, and Economic Development The Economic Impacts of International Trade Exports on the Alaskan Economy Prepared for the World Trade Center Alaska July 2010 Prepared by Northern 880 H Street, Suite 210 119N Commercial Street, Suite 190 Anchorage, Alaska 99501 Bellingham, WA 98225 Phone: (907) 274-5600 Phone: (360) 715-1808 Fax: (907) 274-5601 Fax: (360) 715-3588 Emaii: mail -- nareon.com This publication was funded in part through a grant from the State of Alaska, Department of Commerce, Community, and Economic Development PROFESSIONAL CONSULTING SERVICES IN APPLIED ECONOMIC ANALYSIS Principals: Patrick Burden, M.S. — President Marcus L. Hartley, M.S. — Vice President Jonathan King, M.S. Consultants: Alexus Bond, M.A. Bill Schenken, MBA Leah Cuyno, Ph.D. Don Schug, Ph.D. Michael Fisher, MBA Katharine Wellman, Ph.D. Cal Kerr, MBA Administrative Staff: Diane Steele — Office Manager Terri McCoy, B.A. Preparers Northern vv�� k Eco a 880 H Street, Suite 210 119 N Commercial Street, Suite 190 Anchorage, Alaska 99501 Bellingham, WA 98225 Phone: (907) 274-5600 Phone: (360) 715-1808 Fax: (907) 274-5601 Fax: (360) 715-3588 Finad mail;, norecon.com Team Member Project Role Company Patrick Burden Project Manager Northern Economics, Inc. Leah Cuyno Economist Northern Economics, Inc. Alexus Bond Analyst Northern Economics, Inc. Terri McCoy Editor Northern Economics, Inc. Please cite as: Northern Economics, Inc. The Economic Impacts of International Trade Exports on the Alaskan Economy. Prepared for World Trade Center Alaska. July 2010. Contents Section Page Abbreviations....................................................................................................................................... iv ExecutiveSummary............................................................................................................................ES-1 Seafood..................................................................................................................................... ES-3 Energy..................................................................................................................................... ES-3 PreciousMetals and Minerals........................................................................................................ ES-3 ForestProducts............................................................................................................................. ES-3 1 Introduction...........................................................................................................................1 2 Approach............................................................................................................................... 8 3 The Alaskan Economy and the Export of Goods.......................................................................... 9 4 Seafood...............................................................................................................................14 4.1 Movement of Seafood Exports..........................................................................................15 4.2 Seafood Products and Demand........................................................................................ 18 4.2.1 Seafood Harvesting and Processing Employment............................................................... 19 4.3 Economic Impacts of Seafood Exports............................................................................... 21 5 Precious Metals and Minerals................................................................................................ 22 5.1 Movement of Precious Metals and Minerals...................................................................... 22 5.2 Economic Impacts of Metals and Minerals Exports............................................................25 6 Energy.................................................................................................................................27 6.1 Movement of Energy Exports............................................................................................ 27 6.1.1 LNG................................................................................................................................. 28 6.1.2 Refined Petroleum Product...............................................................................................29 6.1.3 Coal................................................................................................................................. 31 6.2 Economic Impacts of Energy Exports.................................................................................33 7 Forest Products.................................................................................................................... 35 7.1 Movement of Forest Products Exports...............................................................................36 7.2 Economic Impacts of Forest Products Exports....................................................................37 8 Other Goods......................................................................................................................... 39 9 Services Sector..................................................................................................................... 40 9.1 U.S. Service Exports..........................................................................................................40 9.1.1 Alaska Service Exports.......................................................................................................42 10 References...........................................................................................................................43 Northern Economics The Economic Impacts of International Trade Exports on the Alaskan Economy Table Page Table ES-1. Alaska Ranking for Value of US Exports by State, 2009................................................ ES-2 Table ES-2. Top Ten US States by Value of Exports on a Per Capita Basis, 2009 ............................. ES-2 Table ES-3. Alaska Ranking for Export Value as a Percentage of GSP, 2008.................................... ES-2 Table ES-4. Percent Change in the Value of Exports, 2008-2009................................................... ES-2 Table ES-5. Summary of Selected Employment Effects, 2008......................................................... ES-4 Table ES-6. Summary of Selected Economic Output Effects, 2008................................................. ES-4 Table 1. Alaska Ranking for Value of US Exports by State, 2009.........................................................1 Table 2. Top Ten US States by Value of Exports on a Per Capita Basis, 2009......................................3 Table 3. Alaska Ranking for Export Value as a Percentage of GSP, 2008.............................................3 Table 4. Percent Change in the Value of Exports, 2008-2009.............................................................5 Table 5. Value of Alaskan Exports by Destination Country, 2000-2009 (in $ Millions).........................6 Table 6. Alaskan Goods Exports, 2000-2009 (in $Millions)...............................................................10 Table 7. Alaska Goods Exports as a Percentage of GSP, 2000-2008 (in $ Millions) ............................12 Table 8. Alaska Seafood Production as a Percent of GSP, 2000-2008 (in $ Millions) .........................14 Table 9. Total Value of Alaskan Seafood Exports, 2000-2009 (Including Seattle)...............................17 Table 10. Alaska Seafood Exports as a Percentage of Production, 2000-2008 (in $ Millions) .............18 Table 11. Average Monthly Employment in Seafood Harvesting and Processing Related to Exports, 2000-2008................................................................................................................................ 20 Table 12. Total Direct, Indirect, and Induced Employment of Alaskans Resulting from Seafood Exports, 2008............................................................................................................................21 Table 13. Labor Income and Output from Seafood Exports, 2008 (in $ Millions)..............................21 Table 14. Total Value of Alaskan Precious Metals and Mineral Exports, 2000-2009 (in $ Millions) ....22 Table 15. Total Direct, Indirect and Induced Employment Resulting from Metal and Mineral Exports, 2008............................................................................................................................26 Table 16. Labor Income and Output from Metal and Mineral Export Employment, 2008 (in $ Millions).................................................................................................................................26 Table 17. Total Value of Alaskan Energy Exports, by Product, 2000-2009 (in $ Millions)...................27 Table 18. Total Direct, Indirect, and Induced Employment Resulting from Alaskan Energy Exports, 2008......................................................................................................................................... 34 Table 19. Labor Income and Output from Alaskan Exports, 2008 (in $ Millions)...............................34 Table 20. Total Value of Alaskan Forest Product Exports, 2000-2009 (in $ Millions)..........................35 Table 21. Total Direct, Indirect, and Induced Employment Resulting from Forest Product Exports, 2008......................................................................................................................................... 38 Table 22. Labor Income and Output from Forest Product Employment, 2008 (in $ Millions) ............38 Table 23. Total Value of Other Alaskan Goods Exports, 2000-2009 (in $ Millions)............................39 Table 24. Selected U.S. Service Sector Exports, 2005-2008..............................................................40 Table 25. U.S. Exports of Goods and Services, 2005-2009...............................................................41 Table 26. Estimate of Alaska Service Sector Exports, 2007................................................................42 ii Northern Economics The Economic Impacts of International Trade Exports on the Alaskan Economy Figure Page Figure ES-1. Alaskan Goods Exports as a Percentage of GSP, 2008................................................ ES-1 Figure ES-2. Value of Alaskan Exports by Destination Country, 2009............................................. ES-1 Figure 1. Alaskan Goods Exports as a Percentage of Gross State Product (GSP), 2008.........................5 Figure 2. Value of Alaskan Exports by Destination Country, 2009....................................................... 6 Figure 3. Gross State Product by Industry Sector, 2000-2008 (in $ Millions) ....................................... 9 Figure 4. Alaskan Goods Exports by Commodity, 2009....................................................................10 Figure 5. Map of the Alaskan North Pacific Groundfish Fishery.........................................................11 Figure 6. Map of Alaskan Energy Sources.........................................................................................12 Figure 7. Goods Exports as a Percentage of GSP, 2000-2008 (in $ Millions)......................................13 Figure 8. Alaska Seafood Production as a Percent of GSP, 2000-2008 (in $ Millions) ........................15 Figure 9. Total Value of Alaskan Seafood Exports, 2000-2009 (Including Seattle) (in $ Millions) ........ 17 Figure 10. Alaska Seafood Exports and Non -Exports, 2000-2008 (in $ Millions)................................18 Figure 11. Alaska Direct Marine Fisheries Product Exports, 2009 (by Value).....................................19 Figure 12. Seafood Harvesting and Processing, Residents vs. Non -Resident Employment, 2008........20 Figure 13. Alaska Mineral Production by Mine or Sector, 2008........................................................23 Figure 14. Total Value of Alaskan Precious Metals and Mineral Exports, 2000-2009 (in $ Millions) ...24 Figure 15. Minerals & Ores Export Destinations, 2009 (by Value).....................................................25 Figure 16 Energy Export Destinations, 2000-2009 (in $ Millions)......................................................28 Figure 17. Total Value of Alaskan LNG Exports, 2000-2009 (in $ Millions).......................................29 Figure 18 Products made from a Barrel of Crude Oil (gallons), 2008................................................31 Figure 19. Location of Chuitna Coal Project.....................................................................................33 Figure 20. Total Value of Alaskan Forest Product Exports, 2000-2009 (in $ Millions).........................36 Figure 21. Forestry Product Export Destinations, 2009 (by Value) ..................................................... 37 Figure 22. Exports of Selected Service Sectors for the U.S., 2007..................................................... 41 Northern Economics III The Economic Impacts of Intemational Trade Exports on the Alaskan Economy Abbreviations ADNR Alaska Department of Natural Resources ADOLWD Alaska Department of Labor and Workforce Development APED Alaska Partnership for Economic Development APP Alaska Product Preference Program BEA Bureau of Economic Analysis COAR Commercial Operator's Annual Report DOC United States Department of Commerce EIA Energy Information Administration EU European Union FTD U.S. Census Bureau Foreign Trade Division GDP Gross Domestic Product GSP Gross State Product kWh Kilowatt-hour LME London Metal Exchange LNG Liquefied Natural Gas MMBF Million Board Feet NAICS North American Industry Classification System NOAA National Oceanic and Atmospheric Administration OM Origin of Movement Data Series (US Census Bureau) TAPS Trans Alaska Pipeline System UCM Usibelli Coal Mine, Inc. WTCAK World Trade Center Alaska iv Northern Economics For the purpose of this study "exports" refers only to goods and services sold internationally; it does not include the Alaskan goods and services sold out -of state to domestic buyers. Gross State Product (GSP) refers to Gross Domestic Product (GDP) data that are grouped by state. 48 percent of Alaskan GSP was attributable to mining (which includes oil and gas), and Source: Northern Economics, Inc. using data from the BEA and US government in 2008. Federal, Census Bureau Origin of Movement data supplied by the Alaska state, and local governments Governor's Office of International Trade, 2010 employ a large percentage of Alaskans, and the state economy is heavily dependent upon the public sector. Transportation and warehousing and real estate rental and leasing comprised an additional 17 percent. All other sectors combined amounted to less than 35 percent of 2008 GSP. Executive Summary World Trade Center Alaska (WTCAK) commissioned Northern Economics, Inc. to study the economic impacts of international trade exports upon the Alaskan Economy. As a percentage of Gross State Product (GSP), Alaska sat near the middle of all states with export values amounting to 7.4 percent of total GSP in 2008. As shown in Figure ES-1, the seafood, metals and minerals, energy and forest products industries were the most significant export sectors. Figure ES-1. Alaskan Goods Exports as a Percentage of GSP, 2008 Figure ES-2 summarizes the value of Alaskan goods exports by destination. In 2009, Japan, China, and South Korea were the top three recipients of Alaskan goods; combined, they imported 62 percent of Alaska's exports. Canada received 10 percent of Alaskan exports, and Switzerland received 5 percent. In 2009, Alaska ranked 40th among all states for goods export value. Alaska's low standing on an export value basis understates the importance of the export sector to the state economy. If the value of goods exports is adjusted to account for the state's relatively small population, Alaska's standings improve dramatically. As shown in Table ES-2, on a per capita basis, ■ Seafood ■ Metals and Minerals ■ Energy ■ Forest Products ■ Other Figure ES-2. Value of Alaskan Exports by Destination Country, 2009 China Japan 30% South Korea Canada 10% Switzerland 5% Spain 4% utn er 19% Source: Northern Economics, Inc., using US Census Bureau Foreign Trade Division data, 2010 Northern Economics ES-1 The Economic Impacts of International Trade Exports on the Alaskan Economy Alaska ranked sixth in the nation for value of exports in 2009; it exported an equivalent of $4,660 in goods for each person in the state. With the exception of Utah, which saw a slight increase in its exports, all U.S. states saw a drop in the value of their exports between 2008 and 2009. During this time, the average national drop in the value of exports was 18.7 percent. As shown in Table ES-4, the value of Alaskan exports dropped only 8.8 percent. This beat the national average by 10 percent and put Alaska in the top ten states to withstand the decline in exports, highlighting the resiliency of the state's export sector. Table ES-1. Alaska Ranking for Value of US Exports by State, 2009 Annual Export Rank State Value ($) 35 Nebraska 4,868,867,546 36 West Virginia 4,822,106,056 37 Oklahoma 4,415,124,146 38 Delaware 4,310,891,618 39 Idaho 3,879,807,527 40 Alaska 3,254,978,781 41 Vermont 3,170,846,510 42 New Hampshire 3,061,594,401 43 Maine 2,276,290,790 44 North Dakota 2,177,803,333 Table ES-3. Alaska Ranking for Export Value as a Percentage of GSP, 2008' Exports as a Rank State Percentage of GSP 22 Arizona 7.9 23 Delaware 7.9 24 California 7.8 25 Massachusetts 7.8 26 New Jersey 7.5 27 Alaska 7.4 28 Florida 7.3 29 Minnesota 7.3 30 Connecticut 7.1 31 New York 7.0 Table ES-2. Top Ten US States by Value of Exports on a Per Capita Basis, 2009 Per Capita Rank Description Export Value ($) 1 Washington 7,763.79 2 Louisiana 7,282.78 3 Texas 6,579.14 4 Vermont 5,099.79 5 Delaware 4,870.39 6 Alaska 4,660.14 7 Kentucky 4,081.71 8 Connecticut 3,985.45 9 Oregon 3,899.12 10 Utah 3,712.18 Table ES-4. Percent Change in the Value of Exports, 2008-2009 Percent Rank State Change 1 Utah 0.42 2 Nevada -7.29 3 Kentucky -7.76 4 Connecticut -8.43 5 Alaska -8.8 6 Arkansas -8.86 7 Nebraska -9.98 8 Vermont -11.83 9 Delaware -11.92 10 Tennessee -11.95 Note: These rankings are based on the 50 states only, and do not include Washington, D.C., Puerto Rico, or the U.S. Virgin Islands. Source: Northern Economics, Inc. using US Census Bureau GSP data, US Census Bureau Population Estimates, and World Trade Center of New Orleans data from the US Census Bureau, Foreign Trade Division, Origin of Movement series, prepared by World Institute for Strategic Economic Research (WISER), 2010. These rankings were compiled using 2008 gross production data released from the Bureau of Economic Analysis (BEA). GSP data for 2009 are not expected to be released until November of 2010. ES-2 Northern Economics The Economic Impacts of Intemational Trade Exports on the Alaskan Economy Seafood The annual harvest and processing of Alaskan seafood contributes significantly to the state economy. Thousands of people are employed annually on fishing boats, on processing vessels, at docks, and in processing plants, harvesting groundfish (pollock, Pacific cod, sablefish, rockfish, etc.), crab, salmon, and other marine species. In 2009, $1.37 billion worth of Alaska seafood (68 percent of total seafood exports) left Alaska directly and $640 million (32 percent of total seafood exports) were exported via Seattle. Of the direct exports, 73 percent of products were shipped to Asia, while 12 percent went to Europe, and 5 percent were sent to Canada. Each year more than half of Alaskan seafood production is sent overseas. Energy Alaska's energy resources are vast and consist of both renewable and fossil -based sources. The majority of today's energy exports take the form of liquefied natural gas (LNG); LNG exports were 78 percent of the total value of energy exports in 2009. Usibelli Coal Mine, Inc. (UCM) is located south of Fairbanks near Healy, in the Alaska Range. UCM produces an average of 1.5 million tons of coal per year, and in 2009, 40 percent of production was exported, (McDowell Group, 2010). Precious Metals and Minerals Each year the extraction of gold, silver, lead, zinc, and other industrial minerals yields millions of dollars worth of construction and manufacturing materials. The mining of these materials creates jobs both within the industry and in support sectors; the transportation and storage of materials and workers generates spending and jobs that extend throughout the logistical network. Ores and minerals are raw materials that usually need to be smelted or refined before they can be used. Many Alaskan mines export their products to refineries in countries such as South Korea, Canada, Japan, Spain, and China. Forest Products Alaskan wood products are mostly round logs and primary wood products and include cants, flitches, shop lumber, wood chips, and music wood. These forest products have been marketed to Pacific Rim markets for more than 40 years; the largest consumers of Alaska wood products exports are China, Japan, and South Korea. 2 The Foreign Trade Division of the U.S. Census Bureau considers all Alaskan export ports to be part of the Anchorage District. The Anchorage District is representative of state-wide exports. hftp://www.census.gov/foreign-trade/schedules/d/distcode.html Northern Economics ES-3 The Economic Impacts of International Trade Exports on the Alaskan Economy Table ES-5. Summary of Selected Employment Effects, 2008 Employment and spending within Alaska's export sectors create a wave Direct Jobs Related Indirect and Total of economic activity that continues Export Sector to Exports Induced Jobs Jobs beyond the dock, mine, well or forest Seafood 13,715 7,797 21,511 where the initial effect was generated.' Precious Metals As shown in Table ES-5, Alaskan and Minerals 937 1,285 2,222 export industries provide direct jobs to Energy 136 497 633 a significant number of Alaskans as Forestry 153 236 389 well as indirect and induced jobs to a Total 14,940 9,814 24,755 host of workers in supporting and Source: Northern Economics, Inc. 2010 related sectors through associated spending. The revenue generated through the sale of seafood, energy, precious metals and minerals, and forestry exports contributed almost 24,755 jobs and $5.6 billion to the Alaskan economy in 2008 (see Table ES-6). The federal government does not yet provide data by state for services that are provided by U.S. firms to customers in other countries. It is known that a number of Alaska companies provide services to clients in other countries, but the identities of the Alaska firms and the value of the services that are exported are not reported. A preliminary estimate of Alaska service sector exports could range from $580 million to potentially as high as $1.7 billion. Thus, service sector exports could represent about 14 to 43 percent of the value of goods exported from the state, and about 1.2 to 3.6 percent of Alaska's GSP in 2007. Table ES-6. Summary of Selected Economic Output Effects, 2008 Value of Indirect and Total Economic Exports Induced Economic Output Export Sector ($ millions) Output ($ millions) ($ millions) Seafood 2,213 1,346 3,559 Precious Metals 835 414 1,249 and Minerals Energy 473 140 613 Forestry 83 57 140 Total 3,604 1,957 5,560 Source: Northern Economics, Inc. 2010. Note: Alaskan seafood exports as measured in this analysis include estimates of Alaskan products warehoused in Seattle before being exported internationally. Therefore, this figure does not agree with the state's 2008 figure of $1.8 billion. World Trade Center Alaska is a private, non-profit membership organization providing international trade and business services to members and WORLD TRADE CENTER community partners across the state. The mission of WTCAK is to assist Alaskans to successfully compete for trade and investment in the global ALASKA market place. 431 West Seventh Avenue, Suite 108, Anchorage, Alaska 99501, USA Phone: 907.278.7233 Fax: 907.278.2982 • Email: info cDwtcak.org Web: www.wtcak.org This publication was funded in part through a grant from the State of Alaska, Department of Commerce, Community, and Economic Development. 3 Data on export values, sector employment, and industry production were used to determine the direct employment and economic output attributable to Alaska's export sector. Indirect and induced effects are measured in terms of employment, labor income, and economic output. These effects were determined through 1-0 analysis using IMPLAN data for the relevant industries. ° The Foreign Trade Division of the U.S. Census Bureau considers all Alaskan export ports to be part of the Anchorage District. The Anchorage District is representative of state-wide exports. htip://www.census.gov/foreign-trade/schedules/d/distcode.html ES-4 Northern Economics I Introduction World Trade Center Alaska (WTCAK) is a private, non-profit membership organization that provides international trade and business services to organizations across the state. The mission of WTCAK is to assist Alaskans in successfully competing for trade and investment in the global marketplace. In pursuit of this goal, WTCAK commissioned Northern Economics, Inc. to study the economic impacts of international trade exports upon the Alaskan Economy. For the purpose of this study "exports" refers only to goods and services sold internationally; it does not include the Alaskan goods and services sold out -of state to domestic buyers. Gross State Product (GSP) refers to Gross Domestic Product (GDP) data that are grouped by state. To limit confusion between state -specific and nationwide data, the term "GDP" is not used in reference to the State of Alaska. As shown in Table 1, Alaska ranked 40th among all states for goods export value in 2 0094 . Texas was at the top of the list with $163 billion worth of exports, and was followed closely by California with $120 billion. Table 1. Alaska Ranking for Value of US Exports by State, 2009 Rank State Annual Export Value ($) 1 Texas 163,046,235,100 2 California 120,142,219,999 3 New York 57,320,623,000 4 Washington 51,739,397,146 5 Florida 46,919,556,478 6 Illinois 41,513,559,039 7 Ohio 34,083,697,044 8 Louisiana 32,714,796,637 9 Michigan 32,553,939,379 10 Pennsylvania 28,253,145,576 11 New Jersey 27,259,303,080 12 Georgia 23,868,217,885 13 Massachusetts 23,574,691,740 14 Indiana 22,889,919,070 15 North Carolina 21,789,312,207 16 Tennessee 20,461,097,921 17 Kentucky 17,608,951,952 18 Wisconsin 16,729,044,512 19 South Carolina 16,515,607,019 20 Minnesota 15,506,267,221 21 Virginia 15,045,245,039 22 Oregon 14,916,688,204 23 Arizona 14,023,616,088 4 The rankings in Figures 1 — 4 are compiled using the 50 states only, and do not include Washington D.C., Puerto Rico, or the U.S. Virgin Islands. Northern Economics The Economic Impacts of International Trade Exports on the Alaskan Economy Rank State Annual Export Value ($) 24 Connecticut 14,021,952,584 25 Alabama 12,352,189,889 26 Utah 10,336,841,557 27 Missouri 9,507,800,877 28 Maryland 9,229,271,918 29 Iowa 9,040,665,520 30 Kansas 8,891,977,162 31 Mississippi 6,307,993,302 32 Colorado 5,780,011,885 33 Nevada 5,672,751,348 34 Arkansas 5,267,049,146 35 Nebraska 4,868,867,546 36 West Virginia 4,822,106,056 37 Oklahoma 4,415,124,146 38 Delaware 4,310,891,618 39 Idaho 3,879,807,527 40 Alaska 3,254,978,781 41 Vermont 3,170,846,510 42 New Hampshire 3,061,594,401 43 Maine 2,276,290,790 44 North Dakota 2,177,803,333 45 Rhode Island 1,495,230,588 46 New Mexico 1,269,478,272 47 Montana 1,030,118,697 48 South Dakota 1,011,783,473 49 Wyoming 926,092,118 50 Hawaii 562,161,811 Source: Northern Economics, Inc. using World Trade Center of New Orleans data from the US Census Bureau, Foreign Trade Division, Origin of Movement series, prepared by World Institute for Strategic Economic Research (WISER), 2010. Alaska's low standing on an export value basis understates the importance of the export sector to the state's economy. If the value of goods exports is adjusted to account for the state's relatively small population, Alaska's standings improve dramatically. As shown in Table 2, on a per capita basis, Alaska ranked sixth in the nation for value of exports in 2009; it exported an equivalent of $4,660 dollars in goods for each person in the state. 2 Northern Economics The Economic Impacts of International Trade Exports on the Alaskan Economy Table 2. Top Ten US States by Value of Exports on a Per Capita Basis, 2009 Annual Export Per Capita Rank Description Value ($) Population Export Value ($) 1 Washington 51,739,397,146 6,664,195 7,763.79 2 Louisiana 32,714,796,637 4,492,076 7,282.78 3 Texas 163,046,235,100 24,782,302 6,579.14 4 Vermont 3,170,846,510 621,760 5,099.79 5 Delaware 4,310,891,618 885,122 4,870.39 6 L Alaska 3,254,978,781 698,473 4,660.14 7 Kentucky 17,608,951,952 4,314,113 4,081.71 8 Connecticut 14,021,952,584 3,518,288 3,985.45 9 Oregon 14,916,688,204 3,825,657 3,899.12 10 Utah 10,336,841,557 2,784,572 3,712.18 Source: Northern Economics, Inc. using US Census Bureau Population Estimates and World Trade Center of New Orleans data from the US Census Bureau, Foreign Trade Division, Origin of Movement series, prepared by World Institute for Strategic Economic Research (WISER), 2010. As a percentage of GSP, Alaska sits near the middle of all states, with export value amounting to 7.4 percent of total GSP. As shown in Table 3, eleven states (or 22 percent of all states) are within the seven to eight percent bracket. Table 3. Alaska Ranking for Export Value as a Percentage of GSP, 20085 Export Value State GSP Exports as a Rank State ($ Millions) ($ Millions) Percentage of GSP (%) 1 Washington 66,885 322,778 20.7 2 Louisiana 41,927 222,218 18.9 3 Texas 192,144 1,223,511 15.7 4 Vermont 3,596 25,442 14.1 5 South Carolina 19,832 156,384 12.7 6 Kentucky 19,089 156,436 12.2 7 Oregon 19,363 161,573 12.0 8 Michigan 44,871 382,544 11.7 9 Indiana 26,507 254,861 10.4 10 Kansas 12,475 122,731 10.2 11 Ohio 45,488 471,508 9.6 12 Idaho 4,988 52,747 9.5 13 Utah 10,294 109,777 9.4 14 Alabama 15,846 170,014 9.3 15 Tennessee 23,237 252,127 9.2 16 West Virginia 5,631 61,652 9.1 17 Iowa 12,093 135,702 8.9 5 These rankings were compiled using 2008 gross production data released from the Bureau of Economic Analysis (BEA) in combination with Origin of Movement export data from the Foreign Trade Division (FTD) of the U.S. Census Bureau. GSP data for 2009 are not expected to be released until November of 2010. Northern Economics 3 The Economic Impacts of Intemational Trade Exports on the Alaskan Economy Export Value State GSP Exports as a Rank State ($ Millions) ($ Millions) Percentage of GSP (%) 18 North Dakota 2,760 31,208 8.8 19 Wisconsin 20,553 240,429 8.5 20 Illinois 53,445 633,697 8.4 21 Mississippi 7,301 91,782 8.0 22 Arizona 19,742 248,888 7.9 23 Delaware 4,894 61,828 7.9 24 California 144,813 1,846,757 7.8 25 Massachusetts 28,293 364,988 7.8 26 New Jersey 35,479 474,936 7.5 27 Alaska 3,569 47,912 7.4 28 Florida 54,272 744,120 7.3 29 Minnesota 19,159 262,847 7.3 30 Connecticut 15,313 216,174 7.1 31 New York 79,596 1,144,481 7.0 32 Georgia 27,509 397,756 6.9 33 Nebraska 5,409 83,273 6.5 34 North Carolina 25,076 400,192 6.3 35 New Hampshire 3,746 60,005 6.2 36 Pennsylvania 34,448 553,301 6.2 37 Maine 3,011 49,709 6.1 38 Arkansas 5,779 98,331 5.9 39 Missouri 12,834 237,797 5.4 40 Virginia 18,933 397,025 4.8 41 Nevada 6,119 131,233 4.7 42 South Dakota 1,645 36,959 4.4 43 Rhode Island 1,977 47,364 4.2 44 Maryland 11,379 273,333 4.2 45 Montana 1,390 35,891 3.9 46 New Mexico 2,780 79,901 3.5 47 Oklahoma 5,058 146,448 3.5 48 Colorado 7,668 248,603 3.1 49 Wyoming 1,081 35,310 3.1 50 Hawaii 964 63,847 1.5 Source: Northern Economics, Inc. using US Census Bureau GSP data and World Trade Center of New Orleans data from the US Census Bureau, Foreign Trade Division, Origin of Movement series, prepared by World Institute for Strategic Economic Research (WISER), 2010. With the exception of Utah, which saw a slight increase in its exports, all U.S. states saw a drop in the value of their exports between 2008 and 2009. During this time, the average national drop in the value of exports was 18.7 percent. As shown in Table 4, the value of Alaskan exports dropped only 8.8 percent. This beat the national average by 10 percent, and put Alaska in the top ten states to withstand the decline in exports, highlighting the resiliency of the state's export sector. 4 NorthernEconomics The Economic Impacts of Intemational Trade Exports on the Alaskan Economy Table 4. Percent Change in the Value of Exports, 2008-2009 Annual Export Value Annual Export Value Rank State 2008 2009 Percent Chanaa 1 Utah 10,293,513,353 10,336,841,557 0.42 2 Nevada 6,118,991,933 5,672,751,348 -7.29 3 Kentucky 19,089,371,625 17,608,951,952 -7.76 4 Connecticut 15,313,059,446 14,021,952,584 -8.43 5 Alaska 3,569,108,232 3,254,978,781 -8.8 6 Arkansas 5,778,809,479 5,267,049,146 -8.86 7 Nebraska 5,408,858,191 4,868,867,546 -9.98 8 Vermont 3,596,425,853 3,170,846,510 -11.83 9 Delaware 4,894,214,789 4,310,891,618 -11.92 10 Tennessee 23,237,044,064 20,461,097,921 -11.95 Source: Northern Economics, Inc. using World Trade Center of New Orleans data from the US Census Bureau, Foreign Trade Division, Origin of Movement series, prepared by World Institute for Strategic Economic Research (WISER), 2010. In 2008 Alaskan exports amounted to seven percent of state GSP. As shown in Figure 1, the seafood, metals and minerals, energy and forest products industries were the most significant export sectors. The "other" category includes (but is not limited to) crops, waste & scrap, miscellaneous manufactures, used merchandise, and goods returned to Canada. Many of the goods listed in the "other" category are not produced in Alaska. As explained further in Section 8, they may be the product of reporting errors, intermediate warehousing, and/or goods intended for use by Alaskan firms working abroad. Figure 1. Alaskan Goods Exports as a Percentage of Gross State Product (GSP), 2008 ■ Seafood r Metals and Minerals ■ Energy ■ Forest Products e Other Source: Northern Economics, Inc. using data from the BEA and US Census Bureau Origin of Movement data supplied by the Alaska Governor's Office of International Trade, 2010 Northern Economics 5 The Economic Impacts of Intemational Trade Exports on the Alaskan Economy Table 5 and Figure 2 summarize the value of Alaskan goods exports by destination. In 2009, Japan, China, and South Korea were the top three recipients of Alaskan goods; combined, they imported 62 percent of Alaska's exports. Canada received 10 percent of Alaskan exports, and Switzerland received 5 percent. Table S. Value of Alaskan Exports by Destination Country, 2000-2009 (in $ Millions) Trade Partner 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Japan 1,316 1,039 1,105 1,033 1,189 1,185 1,092 883 1,051 981 China 103 102 148 154 241 337 474 716 733 586 South Korea 449 463 401 567 580 686 726 703 366 458 Canada 165 188 158 231 248 223 451 548 370 318 Switzerland 3 2 47 94 93 103 115 132 148 150 Spain 2 7 68 38 70 72 144 143 30 138 Germany 34 115 118 113 147 183 242 202 208 126 Netherlands 3 31 83 97 92 116 125 114 105 88 Singapore 26 18 11 5 3 77 11 13 18 74 Italy 5 23 20 17 2 27 25 26 3 46 Other 357 429 345 392 492 603 643 531 510 289 World Total 2,464 2,418 2,504 2,739 3,157 3,613 4,046 4,010 3,542 3,255 Source: Northern Economics, Inc., using data from the Foreign Trade Division, 2010. Figure 2. Value of Alaskan Exports by Destination Country, 2009 Japar 30% China South Korea Canada 10% Switzerland 5% Spain 4% vtner 19% Source: Northern Economics, Inc., using data from the Foreign Trade Division, 2010. 6 Northern Economics The Economic Impacts of International Trade Exports on the Alaskan Economy In 2010 the Alaska Partnership for Economic Development (APED) released a situational analysis of the current economic development system in Alaska. The study found that Alaska faced future risk due in part to weak linkages to global market opportunities and lack of diversification within the state's export -oriented industries. The findings recommend that stakeholders within the state economy take a collaborative approach to economic development that focuses on developing stronger export industries (APED, 2010). This export analysis aims not only to assess the current status of Alaska's export industries, but also to quantitatively and qualitatively assess the economic benefits that these industries provide to the state as a whole. Alaskan export industries provide direct jobs to a significant number of Alaskans as well as indirect and induced jobs to a host of workers in supporting and related sectors through associated spending. That is to say, employment and spending within Alaska's export sectors create a wave of economic activity that continues beyond the dock, mine, well or forest where the initial effect was generated. Measuring the size of this effect highlights the benefit of the export sector to the Alaskan economy. Northern Economics The Economic Impacts of International Trade Exports on the Alaskan Economy 2 Approach This analysis uses both qualitative and quantitative research to assess the economic value of Alaskan goods and services sold by U.S. companies and residents to foreign firms and residents. Data on export values, sector employment, and industry production were used to determine the direct employment and economic output attributable to Alaska's export sector. These direct effects were used as inputs into an Input -Output analysis (1-0) to derive the indirect and induced effects also attributable to the export sector. 1-0 analysis is an economic tool used to measure the effects or impacts of an economic activity and is typically used to evaluate the benefits of a project or entity. The analysis is based on a model of the inter -industry transactions within a community, region, or state. The 1-0 model is a matrix that tracks the dollar flow between the industries within a specified economic region of interest. The model can measure how many times a dollar is re -spent in, or "ripples" through, a community (or a larger economic region) before it leaks out. The 1-0 model yields multipliers that are used to calculate the indirect and induced effects on jobs, income, and business sales/output generated per dollar of spending on various types of goods and services in the study area. To evaluate the economic effects to the state or a particular region, only the "local" (i.e., within the state or within the region) expenditures are used in the model; the rest are considered leakages. More leakages mean smaller multipliers; and the larger the local expenditures, the greater the multiplier effects. The multipliers for any given industry in any given location are unique, based on industry composition and geographic area. The IMPLAN'" software was used to develop the statewide 1-0 model used in this analysis. IMPLAN uses specific data on the inputs needed to produce the goods or services for over 400 industries, and state -specific data on the industries available locally from which to purchase those inputs. The most recent (2008) IMPLAN data for all the economic sectors within the state were applied. A variety of data sources were used for this analysis including federal, state, and industry resources. Data on Gross Domestic Product by State (GSP) were obtained from the Bureau of Economic Analysis. The U.S. Census Bureau's Origin of Movement data series was used in combination with Census Bureau Foreign Trade Division data and the National Marine Fisheries Service database to acquire the reported value of Alaskan exports. Unreported or aggregated export values were extracted through industry reports and interviews. Employment data were gathered from the Federal Department of Commerce, the Alaska Department of Labor and Workforce Development, and a variety of industry publications and interviews. Due to discrepancies in methods of data collection, state, federal, and independent resources did not always agree with one another. The data used in this report are our best estimates of the data that most accurately portray Alaska industries. We have gone beyond traditional reporting by combining primary industry analysis (survey results, etc.) and local knowledge of production and movement of Alaskan goods to yield what we believe are more accurate estimates of export value and production. Northern Economics The Economic Impacts of International Trade Exports on the Alaskan Economy 3 The Alaskan Economy and the Export of Goods Alaska is endowed with abundant natural resources and its economy is greatly dependent upon the management and extraction of these resources. For example, the production value of the transportation and warehousing industry is heavily dependent on the movement and storage of oil, gas, coal, minerals and seafood within the state. Additionally, a portion of the revenue within the 'real estate, rental and leasing' sector comes from payments made for the rental and leasing of machinery and equipment used for large resource development projects. Figure 3. Gross State Product by Industry Sector, 2000-2008 (in $ Millions) 60,000 0 50,000 40,000 30,000 20,000 10,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 ■ Other ■ Real estate and rental and leasing - Mining ■ Construction ■ Wholesale and Retail trade Transportation and warehousing ■ Health care and social assistance ■ Government Source: Northern Economics, Inc. using data from the BEA, 2010. As highlighted in Figure 3, 48 percent of Alaskan GSP was attributable to mining (which includes oil and gas), and government in 2008. Federal, state, and local governments employ a large percent of Alaskans, and the state economy is heavily dependent upon the public sector. Transportation and warehousing and real estate rental and leasing comprised an additional 17 percent. All other sectors combined amounted to less than 35 percent of 2008 GSP. In line with the state economy as a whole, Alaska's export industries also stem from the state's natural resources. Table 6 and Figure 4 show the large amounts of seafood, precious metals, minerals, energy sources, and forest products that are exported directly from Alaska each year. Northern Economics The Economic Impacts of Intemational Trade Exports on the Alaskan Economy Table 6. Alaskan Goods Exports, 2000-2009 (in $Millions) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Seafood 1,034 1,190 1,321 1,395 1,685 1,969 2,019 1,980 1,800 1,623 Precious Metals and 294 331 427 507 595 595 1,204 1,401 835 994 Minerals Energy LNG 145 145 141 148 139 141 156 111 305 257 Refined Petroleum 122 134 130 153 196 184 93 143 144 38 Product Coal 16 17 9 4 14 14 10 5 23 33 Other 288 1 0 0 27 0 0 2 0 0 Forest Products 210 155 130 152 105 135 112 86 83 88 Other 355 444 346 379 396 574 453 283 351 222 Total 2,464 2,418 2,504 2,739 3,157 3,613 4,046 4,010 3,542 3,255 Source: US Census Bureau Origin of Movement data supplied by the Alaska Governor's Office of International Trade, 2010 Figure 4. Alaskan Goods Exports by Commodity, 2009 3cious Metals nd Minerals 30% Seafood 50% tnergy 10% 1q1Q1 Forest Products Other 3% 7% Source: US Census Bureau Origin of Movement data supplied by the Alaska Governor's Office of International Trade, 2010 Alaska's resource industries are distributed throughout the state. The productive Tongass and Chugach forests are located in Southeast and Southcentral Alaska. As shown in Figure 5, the commercial groundfish fisheries extend from the north portion of the Bering Sea to coasts of the Southeast. Commercial salmon fisheries extend even further north, and also into the major river systems such as the Yukon and Kuskokwim River drainages. 10 Northern Economics The Economic Impacts of International Trade Exports on the Alaskan Economy Figure S. Map of the Alaskan North Pacific Groundfish Fishery N C Source: NwRrS/NUAA, 1U1U. Oil and gas extraction are based in the Cook Inlet region and on the North Slope of Alaska and adjacent waters, primarily near Prudhoe Bay. Coal deposits are found in many parts of the state, but currently the only active coal mine is the Usibelli coal mine, located in the Interior near Healy. In the future, a second mine may be developed in Southcentral Alaska to access the Beluga coal field. This project is still in stages of review, but preliminary plans indicate that a large portion of the extracted coal is intended for export (Chuitna, 2010; Borrell, 2010). Northern Economics 11 The Economic Impacts of Intemational Trade Exports on the Alaskan Economy Figure 6. Map of Alaskan Energy Sources Source: EIA, 2010b Table 7 and Figure 7 show the value of Alaskan exports in relation to GSP. From 2000 to 2008 direct exports were consistently between seven and ten percent of total GSP. Table 7. Alaska Goods Exports as a Percentage of GSP, 2000-2008 (in $ Millions) 2000 2001 2002 2003 2004 2005 2006 2007 2008 Gross State 27,034 26,609 29,186 31,219 35,102 39,362 43,264 44,887 47,912 Product Exports 2,464 2,418 2,504 2,739 3,157 3,613 4,046 4,010 3,542 Exports as % of 9.1 9.1 8.6 8.8 9.0 9.2 9.4 8.9 7.4 GSP Source: Northern Economics, Inc. using data from the BEA and US Census Bureau Origin of Movement data supplied by the Alaska Governor's Office of International Trade, 2010 12 Northern Economics The Economic Impacts of International Trade Exports on the Alaskan Economy Figure 7. Goods Exports as a Percentage of GSP, 2000-2008 (in $ Millions) 60,000 50,000 40,000 30,000 20,000 10,000 15.0% 12.0% 9.0 % 6.0 % 3.0 % 0 0.0 % 2000 2001 2002 2003 2004 2005 2006 2007 2008 Gross State Product � Goods Exports —Goods Exports as % of Industry Value Source: Northern Economics, Inc. using data from the BEA and US Census Bureau Origin of Movement data supplied by the Alaska Governor's Office of International Trade, 2010 The following sections discuss each of Alaska's export industries in further detail, highlighting their specific contributions to the state economy, including their direct, indirect, and induced effects. Indirect and induced effects are measured in terms of employment, labor income, and economic output. These effects were determined through 1-0 analysis using IMPLAN data for the relevant industries. Northern Economics 13 The Economic Impacts of Intemational Trade Exports on the Alaskan Economy 4 Seafood The annual harvest and processing of Alaskan seafood contributes significantly to the state economy. Thousands of people are employed annually on fishing boats, on processing vessels, at docks, and in processing plants, harvesting groundfish (Pollock, Pacific Cod, Sablefish, Rockfish, etc.), crab, salmon, and other marine species. Economic activity within Alaska is generated through employee and business spending, which creates activity both within the industry and in a variety of related economic sectors including (but not limited to): transportation and warehousing, retail trade, administrative and waste services, accommodation and food services, and utilities. Estimating the total value of production within the seafood industry is challenging. Federal production data as tracked by the U.S. Census Bureau and the Bureau of Economic Analysis' (BEA) prove somewhat inadequate for this purpose. Neither bureau captures "seafood" as an industry; instead, portions of the industry are captured in NAICS' classifications such as "forestry, fishing and related activities," "manufacturing," and "wholesale trade," (BEA, 2010; US Census Bureau, 2010). Furthermore, the values recorded by the two industries are calculated in separate manners and do not match, (BEA, 2009b). To accurately capture the value of production within Alaska's seafood industry, this analysis uses industry -based data (Northern Economics, 20098; Hiatt, 2000-2009; Shirley, 2002). These sources capture production values using volume and price data gathered from Weekly Production Reports, Observer Reports, fish tickets and the Commercial Operator's Annual Report (COAR) data. For the purpose of our analysis, seafood production values are equivalent to "first wholesale values," which are commonly described as the initial prices at which the processed seafood products are sold (not the price at which the processor buys the seafood). In 2008 the total value of groundfish and non-groundfish products in the commercial fisheries of Alaska was nearly $4 billion, or 8.3 percent of GSP. As shown in Table 8 and Figure 8, seafood production has been between seven and nine percent of Alaska's GSP since 2000. Table 8. Alaska Seafood Production as a Percent of GSP9, 2000-2008 (in $ Millions) 2000 2001 2002 2003 2004 2005 2006 2007 2008 Gross State Product 27,034 Seafood Production 2,234 26,609 2,286 29,186 2,362 31,219 2,557 35,102 2,859 39,362 3,281 43,264 3,430 44,887 3,645 47,912 3,988 Percentage 8.3 8.6 8.1 8.2 8.1 8.3 7.9 8.1 8.3 Source: Bureau of Economic Analysis, 2010; Northern Economics, Inc. 2009; Hiatt, 2000-2009; Shirley, 2002. 6 The Bureau of Economic Analysis (BEA) is an agency of the U.S. Department of Commerce ' North American Industry Classification System 8 This document relies heavily on data from the Alaska Department of Labor and Workforce Development and "The Stock Assessment and Fishery Evaluation Report for the Groundfish Fisheries of the Gulf of Alaska and Bering Sea/Aleutian Islands Area: Economic Status of the Groundfish Fisheries Off Alaska, 2008" by Hiatt, et al. 9 As calculated by the BEA 14 Northern Economics 60,000 50,000 40,000 30,000 20,000 10,000 The Economic Impacts of International Trade Exports on the Alaskan Economy Figure 8. Alaska Seafood Production as a Percent of GSP, 2000-2008 (in $ Millions) 2000 2001 2002 2003 2004 2005 2006 2007 2008 Gross State Product Seafood Production Percentage 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% Source: Northern Economics, Inc. using Bureau of Economic Analysis, 2010; Northern Economics, Inc. 2009; Hiatt, 2000-2009; Shirley, 2002. 4.1 Movement of Seafood Exports Commercial seafood caught in Alaskan waters can be processed in several ways depending on species being caught, location of the fishery and preference of the fisherman. Deliveries are either made directly to a processor or are delivered to an intermediary (such as a tender or mother ship) that will eventually deliver an aggregated catch to a processor. Some vessels are catcher -processors which, as their name implies, both catch and process fish. Other vessels do not have processing capability, and must deliver their seafood to a processor either on land or at sea. Processors operating on land are referred to as on -shore processors and may also function as canneries. "Off -shore" processers are usually located within in -shore waters, but are not directly on land. At sea processors may be floating processors or catcher processors. Processed seafood takes a variety of forms. Fish may be canned, smoked, headed and gutted, filleted, made into Surimi, etc. The catch may be sold fresh to local markets, or frozen and sent to distant ones. According to the Origin of Movement (OM10) data issued by the US Census Bureau, $1.799 billion dollars worth of seafood was exported internationally from Alaska in 2008. This figure includes all of the seafood that is exported directly from processors or vendors in Alaska ($1.5 billion), and the value of transshipments." If, for example, an Alaskan seafood shipment was barged to Seattle and put directly on a sea -going vessel to Japan, the OM data would record this as an Alaskan export. If, however, the goods were warehoused or consolidated in Seattle before export to Japan, the OM 10 The OM series is based on origin state; it provides export statistics based on the state from which the merchandise starts its journey to the port of export; that is, the data reflect the transportation origin of exports. " Transshipment as defined in this analysis is the shipment of goods to an intermediate destination before reaching the final destination. No warehousing takes place at this intermediate destination. Northern Economics 15 The Economic Impacts of International Trade Exports on the Alaskan Economy data would record the shipment as a Washington export. The OM figure does not include millions of dollars worth of Alaskan seafood products that are warehoused in and exported from Washington. Alaskan seafood is sent out of state before being exported for several reasons. First, it should be noted that many of the fishing vessels and seafood processors operating in Alaska are based out of the Seattle area. Though the harvesting and processing roots of their operations may be in -state, portions of their businesses are run from out of state. Warehousing is a significant expense in Alaska. Though Alaskan land is less costly than land in the coastal regions of the lower 48, the comparative cost of electricity more than offsets this advantage. Frozen seafood products must stay in cold storage, which requires large amounts of electricity. According to the US Energy Information Administration (EIA), the cost of electricity to a commercial user in Washington was 7.09 cents per kilowatt-hour (kWh) in December of 2009. The average cost in Alaska was more than twice this amount, averaging 14.32 cents per kWh (EIA, 2010). In many parts of rural Alaska electricity is produced solely by diesel generators, and the price is much higher than in the rest of the state, where much cheaper coal and natural gas are used for electricity production. In Naknek and Dillingham, where large amounts of salmon are harvested, electricity was 35 and 34 cents per kWh, respectively, for residential users in 2008 (AEA, 2008). Consolidation for distribution may also be done more effectively from Washington than Alaska. Seafood products processed in Alaska can be thousands of miles apart, but owned by the same company (a processor may have a plant in Southeast Alaska, Bristol Bay, and/or on the Aleutian Chain). Given the state's limited transportation network, and the aforementioned expense of warehousing, it is more efficient to consolidate products in Washington. From Seattle or Tacoma, processors are within reach of both international markets via the Port of Seattle, and domestic markets via port, rail, or truck. In the case of canned products, shipments are sent to the lower 48 for labeling and further packaging before sale. A single processor may sell identical canned products to several different companies. Each company packages and labels their cans for individual sale, whether destined for domestic or international markets. Table 9 and Figure 9 show the total value of Alaskan seafood exports sent via the Anchorage District and the Seattle District12 from 2000-2009. In 2009, $1.37 billion (68 percent of total seafood exports) left Alaska13 directly and $640 million (32 percent of total seafood exports) were exported via Seattle. 12 The Seattle District includes most ports in the state of Washington, with the exception of Longview, Vancouver, and Kalama. 13 The Foreign Trade Division of the U.S. Census Bureau considers all Alaskan export ports to be part of the Anchorage District. The Anchorage District is representative of state-wide exports. hftp://www.census.gov/foreign-trade/schedules/d/distcode.html 16 Northern Economics The Economic Impacts of International Trade Exports on the Alaskan Economy Table 9. Total Value of Alaskan Seafood Exports, 2000-2009 (Including Seattle) Year Seafood Exports from Anchorage District AK Seafood Exports from Total Value of AK Seafood Seattle District Exports 2000 $941,574, 713 $509,875,142 $1, 451, 449, 855 2001 $1,132, 417,161 $605, 266, 070 $1, 737, 683, 231 2002 $1, 256,066,318 $483,213,360 $1, 739, 279, 678 2003 $1,321,692,004 $472,189,170 $1,793,881,174 2004 $1,574,730,200 $498,717,443 $2,073,447,643 2005 $1, 856, 643, 578 $498,181,191 $2, 354, 824, 769 2006 $1,832,228,330 $551,366,156 $2, 383, 594, 486 2007 $1, 725, 348,211 $619,667,322 $2,345,015,533 2008 $1, 530, 325, 433 $682,256,371 $2,212,581,804 2009 $1,373, 758,290 $638, 917, 987 $2.012.676.277 i otal $14,544,784,238 $5,559,650,209 $20,104,434,447 Source: Northern Economics, Inc. using data from NMFS, 2001-2009; NOAA, 2010; Northern Economics, 2009; Crapo, 1988; Orr, 2010; Plesha, 2010. Figure 9. Total Value of Alaskan Seafood Exports, 2000-2009 (Including Seattle) (in $ Millions) $3,000 N C O $2,500 $2,000 $1,500 $1,000 $500 $0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 ■Seafood Exports from Anchorage District OAK Seafood Exports from Seattle District Source: Northern Economics, Inc. using data from NMFS, 2001-2009; NOAA, 2010; Northern Economics, 2009; Crapo, 1988; Orr, 2010; Plesha, 2010. Alaskan seafood exports from the Anchorage District represented in Table 9 are seafood products that were exported internationally through an Alaskan port. The exports from the Seattle district were derived through analysis of species, industry research, and industry interviews. These figures include products harvested only in Alaska, products produced only in Alaska, and portions of products Northern Economics 17 The Economic Impacts of Intemational Trade Exports on the Alaskan Economy harvested and produced in both the Pacific Northwest and Alaska. No fresh products exported from Seattle were included in these figures. Table 10 and Figure 10 show total seafood exports as a percent of production. Each year more than half of Alaskan seafood production is sent overseas. Table 10. Alaska Seafood Exports as a Percentage of Production, 2000-2008 (in $ Millions) 2000 2001 2002 2003 2004 2005 2006 2007 2008 Total Seafood Production 2,234 2,286 2,362 2,557 2,859 3,281 3,430 3,645 3,988 Total Seafood Exports 1,451 1,738 1,739 1,794 2,073 2,355 2,384 2,345 2,213 Percentage 65.0 76.0 73.6 70.2 72.5 71.8 69.5 64.3 55.5 Source: Northern Economics, Inc. using data from NMFS, 2001-2009; NOAA, 2010; Northern Economics, 2009; Crapo, 1988; Orr, 2010; Plesha, 2010; Hiatt, 2000-2009; Shirley, 2002. Figure 10. Alaska Seafood Exports and Non -Exports, 2000-2008 (in $ Millions) 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 ■ Non -Exported Seafood Production ■ Exported Seafood Production Source: Northern Economics, Inc. using data from NMFS, 2001-2009; NOAA, 2010; Northern Economics, 2009; Crapo, 1988; Orr, 2010; Plesha, 2010; Hiatt, 2000-2009; Shirley, 2002 4.2 Seafood Products and Demand Figure 11 highlights the destination markets of Alaskan seafood product exports. Seventy-three percent of products are shipped to Asia, while 12 percent go to Europe, and 5 percent are sent to Canada. 18 Northern Economics The Economic Impacts of International Trade Exports on the Alaskan Economy Figure 11. Alaska Direct Marine Fisheries Product Exports, 2009 (by Value) Other 10% N eth erlan c 5% Germany 7% South Kore 13% span 13% 27% Source: Northern Economics, Inc., using data from NMFS and the Foreign Trade Division, 2010. Japan imported $63 million in frozen sockeye salmon, $58 million in Pollock Surimi, $54 million in Pollock roe, and $49 million in frozen king crab directly from Alaska in 2009. The top exports to the Chinese market were frozen pink salmon and yellowfin sole. South Korea, in line with Japan, imported large amounts of Pollock Surimi and frozen Pollock roe. Germany and the Netherlands imported Pollock fillets more than any other product. Cod and fresh, frozen, and preserved salmon were also sent to Europe in significant quantities (NMFS, 2010). 4.2.1 Seafood Harvesting and Processing Employment Accurately measuring employment within the seafood industry is complicated given the nature of the business. Seafood harvesting is seasonal. Though some within the industry are employed year-round, most jobs take place over a set of weeks or months. Many of the seasonal job holders travel to Alaska for the duration of the work and are not from Alaskan communities. Fishermen are often recorded as "self-employed" for tax purposes, making it difficult to attribute their income (and associated spending) to the correct sector. Employees working at processors based within the state can be tracked (to some degree) through tax and salary payments. Workers that are on vessels based out of non -Alaska ports that both catch and process seafood on board cannot be tracked in this fashion. The vessel owner and crew are often paying employment -related taxes to another state. Northern Economics 19 The Economic Impacts of International Trade Exports on the Alaskan Economy Figure 12. Seafood Harvesting and Processing, Residents vs. Non -Resident Employment, 2008 Source: Northern Economics, Inc. using data from Northern Economics, 2009 and AKDOLWD, 2006. The Alaska Department of Labor and Workforce Development (ADOLWD) tracks seafood employment using information from three sources: the Commercial Fisheries Entry Commission of the Alaska Department of Fish and Game, the Alaska Department of Labor's Quarterly Census of Employment and Wages data, and information from the National Marine Fisheries Service (Warren, 2009). The state produces an estimate of average monthly employment, as shown at the top of Table 11. Applying the percentage of production that is exported (Table 10) to the state estimates of employment yields a range of 9,000 (in 2008) to 12,000 (in 2001) seafood industry jobs that are related to exports on an average monthly basis. That is to say, an average of 9,000 people were employed within the seafood industry each month in 2008. Table 11. Average Monthly Employment in Seafood Harvesting and Processing Related to Exports, 2000-2008 2000 2001 2002 2003 2004 2005 2006 2007 2008 Employment Processing 8,433 7,904 7,406 7,873 8,535 8,727 9,374 9,143 9,027 Harvesting 8,706 7,959 7,168 7,404 7,330 7,486 7,314 7,260 7,270 Total Jobs 17,139 15,863 14,574 15,277 15,865 16,213 16,688 16,403 16,297 Exports as a % of 65.0 76.0 73.6 70.2 72.5 71.8 69.5 64.3 55.5 Production Total Export Related 11,136 12,058 10,732 10,717 11,505 11,635 11,596 10,552 9,043 Employment Source: Northern Economics Inc. using Warren, 2010; NMFS, 2001-2009; NOAA, 2010; Northern Economics, 2009; Crapo,1988; Orr, 2010; Plesha, 2010; Hiatt, 2000-2009; Shirley, 2002. 20 Northern Economics The Economic Impacts of International Trade Exports on the Alaskan Economy Unfortunately, the annual average monthly job count as estimated by ADOLWD is not equivalent to the total number of jobs generated within the seafood industry annually; calculating total jobs from monthly averages requires additional information. If, for example, 1,000 processing and harvesting jobs cease at a Southeast plant in one month, but another 1,500 are created in the Bristol Bay region for the same month, the monthly job count will increase by 500 jobs. Though this paints an accurate picture of employment within the industry at a given time, it captures only a portion of the total number of jobs created on an annual basis within the industry. For the purpose of measuring the statewide economic effects of employment within the industry, this analysis requires an estimate of the total number of jobs within the seafood industry in a given year. To estimate total annual employment within the seafood industry in 2008 (and the portion of this employment generated by exports in the following subsection) this analysis combined data from several sources. Monthly employment figures were obtained from ADOWLD to estimate the portion of processing and shore -based employees in each Borough or Census Area during the year. It was assumed that annual peak fishery related employment within a Borough or Census Area was representative of total annual job numbers within that area. Fishery fleet details and crew per vessel calculations were used to estimate the portion of vessel and catcher/processor employment (Northern Economics, 2009; Hiatt, 2000-2009; Shirley, 2002; Warren, 2010). Employment figures from these sources are estimates of the number of total jobs (not full time equivalent positions) within the industry. 4.3 Economic Impacts of Seafood Exports In 2008 there were approximately 55,370 jobs within the seafood industry in Alaska; 27,547 were seafood harvesting jobs and 27,823 were seafood processing jobs. Of these total jobs 55.5 percent or 30,730 were supported by exports. Alaska residents held 30 percent of the seafood processing jobs and 59 percent of the seafood harvesting jobs. Total direct, indirect, and induced employment within Alaska attributable to the seafood export industry is summarized in Table 12. 1-0 analysis also revealed that the indirect and induced jobs contributed $338 million dollars to the economy in the form of wages. Table 12. Total Direct, Indirect, and Induced Employment of Alaskans Resulting from Seafood Exports, 2008 Direct Jobs Indirect & Induced Jobs Total Jobs Seafood Harvesting 9,005 978 9,983 Seafood Processing 4,710 6,818 11,528 Total 13,715 7,797 21,511 Source: Northern Economics, Inc. 2010. As shown in Table 13, the $2.2 billion worth of Alaskan seafood exports contributed $337 million to the economy in the form of wages, and generated an additional $1.3 billion in indirect and induced economic output. Table 13. Labor Income and Output from Seafood Exports, 2008 (in $ Millions) Total Value of Exports Indirect and Induced Economic Output Total Economic Output 2,213 1,346 3,559 Source: Northern Economics, Inc. 2010. Northern Economics 21 The Economic Impacts of Intemational Trade Exports on the Alaskan Economy 5 Precious Metals and Minerals Precious metal and minerals mining are important industries within the Alaskan economy. Each year the extraction of zinc, gold, lead, silver and industrial minerals yields millions of dollars worth of construction and manufacturing materials. The mining of these materials creates jobs both within the industry and in support sectors; the transportation and storage of materials and workers generates spending and jobs that extend throughout the logistical network. Additionally, taxes paid by the mines are a valuable source of income for the state and political subdivisions to which they are paid. According to the 2009 Mining Industry Annual Report completed for the Alaska Miners Association, $12.3 million was paid in the form of taxes and payments in lieu of taxes to cities and boroughs throughout the state. An additional $35 million was paid to the state government in royalties, rents, fees and taxes, (McDowell Group, 2010). In 2008 total production in the mining industry (not including coal) was valued at more than $2.3 billion. Though peat, rock, sand, and gravel were extracted in large quantities, their values were overshadowed by the production values of Alaska's precious metal and mineral industries, which amounted to more than $2.2 billion or 95 percent of non -coal mining production in 2008. Precious metal and mineral production consisted of more than 6,262,000 tons of zinc, 800,000 ounces of gold, 153,000 tons of lead, and 14.6 million ounces of silver (Szumigala, 2009). Table 14 is a summary of the value of Alaskan precious metal and mineral exports over the last decade. Please note that the total production value of $2.3 billion in 2008 was determined by multiplying the estimated quantity of the minerals and metals produced with the annual average market price of the commodity on the London Metal Exchange (LME) (Szumigala, 2009). In contrast, the value of the exported materials shown in Table 14 does not include the costs of shipping, smelting or refining, and other costs incurred beyond Alaska's border but which are reflected in the LME market price. Table 14. Total Value of Alaskan Precious Metals and Mineral Exports, 2000-2009 (in $ Millions) Product 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Precious Metals 1.2 2.6 47.0 94.3 90.0 84.2 109.7 132.0 143.9 152.5 Minerals 292.9 328.9 379.8 412.8 505.4 510.8 1093.9 1269.1 691.0 841.6 Total 294.0 331.5 426.8 507.1 595.5 595.0 1203.6 1401.1 834.8 994.2 Source: US Census Bureau Origin of Movement data supplied by the Alaska Governor's Office of International Trade, 2010 5.1 Movement of Precious Metals and Minerals As stated previously, zinc, gold, lead, and silver comprise the vast majority of precious metal and mineral commodity value. Figure 13 displays the state's mineral production by mine or sector, as detailed in Alaska's Mineral Industry 2008 Special Report 63, published by the Division of Geological and Geophysical Surveys (Szumigala, 2009). 22 Northern Economics The Economic Impacts of International Trade Exports on the Alaskan Economy Figure 13. Alaska Mineral Production by Mine or Sector, 2008 Coal and Peat placer Gold Rock, Sand and 2.3% 2.0% Fort Knox N 11.8% Pogo Mine 12.5% Gree Source: Szumigala, 2009; Recreated by Northern Economics, Inc., 2010. Red Dog Mine 54.5% Alaska's mineral production values are greatly influenced by the Red Dog Mine, which began production in 1989 in the Northwest Arctic Borough. Red Dog rivals the world's largest zinc mines and produces almost 30 percent of the lead concentrate mined in the United States. The mine is co- operated by Teck Alaska Incorporated (a subsidiary of Teck Resources Limited, headquartered in Vancouver, Canada) and NANA Regional Corporation (Red Dog, 2010). Greens Creek mine, located in Southeast Alaska, is the largest silver producer in the United States and supports 330 employees and 12 full time contractors. Fort Knox and Pogo, gold mines located in the interior of the state, support a total of 897 full time employees. A host of additional precious metal mines are in preliminary production stages (Kensington, Donlin Creek, Livengood), each with the potential to support hundreds of fulltime and/or contractor positions (McDowell Group, 2009). It was recently announced that Kensington mining operations are scheduled to begin in July 2010 (North of 60, 2010). As shown in Figure 14, the value of Alaskan precious metal exports has grown over the past decade. Should additional precious metal mines come online, these values would likely increase going forward. Northern Economics 23 The Economic Impacts of International Trade Exports on the Alaskan Economy Figure 14. Total Value of Alaskan Precious Metals and Mineral Exports, 2000-2009 (in $ Millions) 1,400 N C .4 1,200 1,000 800 600 400 200 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 ■ Minerals ■ Precious Metals Source: Northern Economics, Inc. using US Census Bureau Origin of Movement data supplied by the Alaska Governor's Office of International Trade, 2010 The value of precious metals exported from Alaska shown in Figure 14 may understate the value of Alaskan product that ends up in the hands of foreign buyers. A large portion of the gold and silver mined in Alaska is not exported directly, but rather processed at domestic refineries before the final product is sold. Alaskan product sent directly to a foreign refinery or buyer would be reported by the Origin of Movement data as an Alaskan export; Alaskan product refined and sold abroad from another state would not be captured in these figures. Determining the end buyers of Alaskan precious metals is problematic; there is a significant portion of the product (especially gold) that is sold on the spot market through pool accounts and clearinghouses (Weyland, 2010; Davey 2010; Wick 2010). Metals may be aggregated before sale to banks, governments, private industry, etc. Buyers may be end users or intermediaries. Though the metals may end up abroad, the amount sold internationally is not clearly defined given that there is no direct or consistent "customer." Ores and minerals are raw materials that usually need to be smelted or refined before they can be used. As shown in Figure 18, many Alaska mines export their products to refineries and buyers in countries such as South Korea, Canada, Japan, Spain, and China. As with most Alaskan exports, the majority of exported minerals and ores are destined for Asia. 24 Northern Economics The Economic Impacts of International Trade Exports on the Alaskan Economy Figure 15. Minerals & Ores Export Destinations, 2009 (by Value) Other 10% Corea /o China 10% Spair 13% iada 2% Japan 16% Source: Northern Economics, Inc., using data from the Foreign Trade Division, 2010. Canada does receive the second largest portion (22 percent) of the minerals and ores exports, which may be in part a reflection of the ownership structure in Alaska's mining sector. Many of the state's largest mines (Red Dog, Fort Knox, and Pogo) are wholly or partly owned by Canadian firms. 5.2 Economic Impacts of Metals and Minerals Exports According to the Alaska's Mineral Industry report, there were 3,282 full time equivalent positions in the mining sector (not including coal mining) in 2008 (Szumigala, 2009). This figure included employment in the exploration and development of minerals, as well as mining employment for gold, silver, other metals, sand, gravel, rock, etc. Of total mining employment in Alaska, only a portion of positions are related directly to exports. The number of direct jobs attributable to metal and mineral exports was estimated using employment counts and export percentages at the major Alaskan exporting mines of Red Dog and Greens Creek. Export related employment at the primary gold mines (Fort Knox and Pogo) was derived using refinery locations. Though Alaska has mines other than these four, most are in the preliminary stages of production and/or do not produce for export. Total direct, indirect, and induced employment within Alaska attributable to the metals and minerals export industry is summarized in Table 15. Nine hundred thirty-seven direct jobs and 1,285 indirect and induced jobs were attributable to metal and mineral exports. 1-0 analysis also revealed that the indirect and induced jobs contributed $110 million to the Alaskan economy in the form of wages. Northern Economics 25 The Economic Impacts of International Trade Exports on the Alaskan Economy Table 15. Total Direct, Indirect and Induced Employment Resulting from Metal and Mineral Exports, 2008 Direct Jobs Indirect & Induced Jobs Total Jobs Precious Metals and Minerals 937 1,285 2,222 Source: Northern Economics, Inc. 2010 As shown in Table 16, the $835 million dollars worth of Alaska precious metal and mineral exports generated an additional $414 million in indirect and induced economic output in 2008. Table 16. labor Income and Output from Metal and Mineral Export Employment, 2008 (in $ Millions) Total Value of Exports Indirect and Induced Economic Output Total Economic Output 835 414 1,249 Source: Northern Economics, Inc. 2010 26 Northern Economics The Economic Impacts of International Trade Exports on the Alaskan Economy 6 Energy Alaska's energy resources are vast and consist of both renewable and fossil -based sources. Geothermal, water and wind energies are being harnessed to supply electricity to communities within the state, while coal, natural gas and petroleum -based resources are being harnessed for both domestic use and to supply demand in foreign markets. The oil and gas industry plays a significant role in Alaska's economy. The state receives over 12 percent of the oil and gas produced from its leases in the form of royalty payments. These payments may be made in the form of oil or gas or as cash payments. The product supplied through royalty payments helps provide supply security to Alaska's in -state refineries (ADNR, 2010). This section focuses on the movement of energy exports and includes descriptions of the LNG, refined petroleum, and coal export sectors. Each of these is discussed in detail in the following subsections. 6.1 Movement of Energy Exports Much of the petroleum produced in Alaska is sent to refineries in the lower 48 and is used to meet U.S. domestic demand. Only a small portion of total petroleum production is exported, and this takes the form of refined petroleum products. As shown in Table 17, crude has not been exported from Alaska since 2000. This is due to a combination of declining output, oil company mergers, and unfavorable public reactions to exporting domestic oil (Kumins, 2006). The majority of today's energy exports take the form of LNG; LNG exports were 78 percent of the total value of energy exports in 2009. Table 17. Total Value of Alaskan Energy Exports, by Product, 2000-2009 (in $ Millions) Energy Product 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 LNG 145.1 145.1 140.9 148.4 139.0 141.0 156.5 110.6 305.5 256.7 Refined Petroleum 122.3 134.0 130.4 152.5 196.2 184.3 92.9 142.9 144.4 38.4 Product Coal 16.3 16.7 9.2 4.2 14.0 14.1 10.1 5.0 23.2 33.1 Other 288.0* 1.0 0.1 0.0 27.2 0.0 0.0 1.6 0.0 0.0 Total 571.7 296.9 280.7 305.1 376.3 339.4 259.4 260.0 473.0 328.2 Notes: *Crude Oil. Source: US Census Bureau Origin of Movement data supplied by the Alaska Governor's Office of International Trade, 2010 Energy products from Alaska are exported primarily to Asian markets. Though China, South Korea, Singapore, and Hong Kong have imported Alaskan energy products within the last decade, Japan's consumption dwarfs that of other Asian countries. Figure 16 displays the large percentage of exports that are sent to Japan. Northern Economics 27 400 N C O 350 300 250 200 150 100 50 0 The Economic Impacts of Intemational Trade Exports on the Alaskan Economy Figure 16 Energy Export Destinations, 2000-2009 (in $ Millions) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 � Canada � South Korea Taiwan China Hong Kong � Mexico Ili! Singapore Other Japan Source: Northern Economics, Inc., using data from the Foreign Trade Division, 2010. 6.1.1 LNG Alaska is home to the only Liquefied Natural Gas (LNG) export facility in the United States. The Kenai LNG Export Terminal is owned by ConocoPhillips and Marathon Oil Company. It was built in 1969 for the purpose of liquefaction, storage, and loading of LNG for export and delivery to Japan. At the time it was constructed, the plant was the world's largest and was the first to serve the Asia -Pacific market. According to ConocoPhillips, the plant has achieved over 40 years of uninterrupted supply to Japanese customers (ConocoPhillips, 2010). Japan has few natural energy resources within its borders, and depends heavily on nuclear power and foreign imports to meet its energy demands. Japan currently consumes 48 percent of global imports of natural gas, and nearly all of the LNG produced at the Kenai facility (FERC, 2010). 28 Northern Economics 350 N C O 300 250 200 150 100 50 The Economic Impacts of International Trade Exports on the Alaskan Economy Figure 17. Total Value of Alaskan LNG Exports, 2000-2009 (in $ Millions) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Source: Northern Economics, Inc. using US Census Bureau Origin of Movement data supplied by the Alaska Governor's Office of International Trade, 2010 Until recently, it was not clear whether or not ConocoPhillips and Marathon Oil would seek to renew their LNG export license, which is set to expire in 2011. Gas production from Cook Inlet is declining and in -state electric and gas utilities have suffered from a shortage of supply during winter cold snaps. According to a recently published article in the Anchorage Daily News, the companies have applied for an export license renewal which, if approved, will extend exports through March 2013. In times of need, the LNG plant is expected to reroute some of the gas they produce for in -state use. During the summer months, when local demand drops, the LNG facility will continue to act as a key customer, keeping demand for gas high enough to keep all of the inlet's gas wells operating (Bluemink, 2010). Currently under consideration is the construction of a natural gas pipeline that would extend from the North Slope of Alaska to markets further south. Several routes are still under consideration, one of which would involve the construction of an LNG facility in Valdez, Alaska. The remaining routes channel the pipeline through Canada. Either alternative will result in state revenues from natural gas exports; however, the Valdez alternative would generate the most direct jobs and spending through construction of an in -state liquefaction and export terminal. 6.1.2 Refined Petroleum Product Alaska's Prudhoe Bay produces 400,000 barrels of oil per day, making it the highest yielding oil field in the United States. Most of the crude is piped through the Trans Alaska Pipeline System (TAPS) to Valdez, where it is transported primarily to Washington and California for refinement. Since the TAPS was finished in 1977, over 95 percent of Alaskan petroleum production has come from the North Slope. The remaining five or so percent comes from the Cook Inlet region in Southcentral Alaska (ADNR, 2010). Northern Economics 29 The Economic Impacts of International Trade Exports on the Alaskan Economy There are currently six refineries within the State of Alaska: Flint Hills Resources AK LLC in North Pole, Tesoro Petroleum Corporation in Kenai, Petro Star, Inc. in Valdez and North Pole, and the Conoco Phillips and BP Exploration facilities on the North Slope. All combined, the facilities are capable of distilling about 377,480 barrels of crude per day (ADNR, 2010). Most of the refineries are considered "topping" plants, with the exception of Flint Hills and Tesoro. Topping plants remove the lighter, more valuable elements of the crude oil and are not capable of refining the heavier, less valuable components into more valuable products (EIA, 2010). None of Alaska's refineries consider export markets their main focus (Gore, 2010; Miller, 2010; Cook, 2010; ADNR, 2010). Both of the facilities on the North Slope (Conoco Phillips and BP) refine just enough petroleum for local use, producing arctic heating fuel (Diesel) almost exclusively. The Petro Star refineries in North Pole and Valdez were founded in the mid 1980s to supply heating fuel for residences and businesses in rural Alaska. Today their largest business is the production of jet fuel; Alaska's refineries supply 88 percent of the jet fuel consumed within the state (ADNR, 2010). The Tesoro facility in Kenai also produces jet fuel, and supplies the Anchorage airport with almost half of its monthly jet fuel demand. The fuel tanks at the airport are linked directly to the refinery via a 75-mile pipeline that also connects to the Port of Anchorage. The Tesoro facility mainly processes the oil produced in Cook Inlet, and supplements this flow with North Slope and foreign crudes, (ADNR, 2010). Production is primarily for in -state supplies to Tesoro retail stations; only in rare cases are products exported internationally. Tesoro's last export shipment occurred sometime in 2008 (Miller, 2010; ADNR, 2010). Flint Hills Resources Alaska is the largest refinery in the state. The Flint Hills facility extends beyond North Pole, and includes both a 700,000 barrel fuel terminal in Anchorage and a 20,000 barrel jet fuel terminal in Fairbanks. The plant refines approximately 44,000 barrels of TAPS oil per day to create products such as gasoline, jet fuel, heating oil, diesel, gas oil, and asphalt (ADNR, 2010). Though Flint Hills has fed international markets in the past, today production is focused on the domestic market and little to nothing is exported from the facility (Cook, 2010). Figure 18 illustrates the products that are made from a single gallon of crude oil according to production estimates for refineries across the U.S. 30 Northern Economics The Economic Impacts of Intemational Trade Exports on the Alaskan Economy Figure 18 Products made from a Barrel of Crude Oil (gallons), 2008 Other Distillate! (heating oil) —1.88 Heavy Fuel Oil (Residual) 1.68 Liquefled Petroleum Gase (LPG) 1.72 Source: U.S. Energy Information Administration, 2010 As mentioned previously, none of the Alaska refineries focus their efforts on export markets. Most focus on the production of jet fuel, heating fuel, diesel, and gasoline for in -state demand. During the process of refining jet fuel, secondary refined products are made almost inadvertently (Knutson, 2010; Eckert, 2010). The export values shown in Table 17 are representative of the sale of these secondary products. In many cases they are sold in part because of timing and/or circumstance. If, for example, a refinery has ample supply of a refined product, has no in -state customer, and needs the space in which the material is being stored, the refinery may turn to export markets (Miller, 2010). In 2009 jet fuel demand in Alaska dropped, reducing with it both the amount of jet fuel and the amount of secondary refined product produced. This drop explains the simultaneous reduction in the value of Alaskan refined petroleum exports. 6.1.3 Coal Despite being rich with coal deposits, Alaska has only one operating coal mine. Usibelli Coal Mine, Inc. (UCM) is located south of Fairbanks near Healy, in the Alaska Range. UCM coal is used to generate approximately 40 percent of the electricity of interior Alaska (McDowell Group, 2010; Usibelli, 2010). Usibelli produces an average of 1.5 million tons of coal per year, and in 2009 40 percent of production was exported (McDowell Group, 2010). Northern Economics 31 The Economic Impacts of International Trade Exports on the Alaskan Economy Coal mining is a difficult undertaking; coal is usually found beneath one or more layers of rock and soil. At Usibelli, approximately 100 feet of stone, earth, and mineral lie between each seam of coal (Usibelli, 2010). The earth and rock removal required to reach coal deposits has presented environmental hazards, and the permitting and regulatory processes for opening and operating a mine are extensive. The Chuitna coal project is a plan to extract the coal deposits of the Susitna basin in Southcentral Alaska. Alaska coal has comparatively low sulfur content when compared to coal found in many other parts of the world. This makes it a cleaner burning fuel, and could contribute to better air -quality conditions in areas that are currently burning coal with higher sulfur content (Borrell, 2010). However, it should be noted that Alaskan coal is somewhat limited by its comparatively low energy value. Usibelli coal is ranked as Subbituminous, which is the third lowest on a general four -tiered ranking of coal grade (Usibelli, 2010). The Chuitna plan includes construction of a surface coal mine, associated support facilities, and a coal export terminal. PacRim Coal is leading the project and estimates a 25-year mine life based on proven reserves (Chuitna, 2010). The location of the proposed development is illustrated in Figure 19. 32 Northern Economics The Economic Impacts of International Trade Exports on the Alaskan Economy Figure 19. Location of Chuitna Coal Project Source: Alaska Industrial Development and Export Authority (AIDEA), 2006. The Susitna coal resource is estimated to be as large as 64,230 million tons of coal (M-tons), though only 10,550 M-tons have currently been identified. Chuitna proven reserves are 700 M-tons (AIDEA, 2006). Should the Chuitna Coal mine be constructed, Alaska can expect a large increase in export and GSP revenues generated by the mining sector. 6.2 Economic Impacts of Energy Exports In 2008 there were 136 direct jobs attributable to energy exports. This includes: 25 to 30 percent of the 110 employees at Usibelli, 57 LNG facility jobs, 48 positions upstream of the LNG plant in the Cook Inlet gas fields, and 3 on -shore tanker -related positions. No petroleum refinery positions are completely dependent upon exports of refined products, nor are any upstream oil extraction positions, so no direct jobs were included for this sector. The indirect and induced jobs generated by Northern Economics 33 The Economic Impacts of International Trade Exports on the Alaskan Economy the refined petroleum sector were caused by the spending generated from the sale of refined exports and subsequent respending by the refineries. Total direct, indirect, and induced employment within Alaska attributable to the energy export industry is summarized in Table 18. 1-0 analysis also revealed that the 497 indirect and induced jobs contributed $35 million to the Alaskan economy in the form of wages. Table 18. Total Direct, Indirect, and Induced Employment Resulting from Alaskan Energy Exports, 2008 Energy Export Direct Jobs Indirect & Induced Jobs Total Jobs LNG 108 210 318 Refined Petroleum 0 254 254 Coal 28 33 61 Total 136 497 633 Source: Northern Economics, Inc. 2010 As shown in Table 19 the $473 million worth of Alaskan energy exports generated an additional $140 million in indirect and induced economic output. Table 19. labor Income and Output from Alaskan Exports, 2008 (in $ Millions) Indirect and Induced Total Value of Exports Economic Output Total Economic Output Energy Export ($ Millions) LNG 305 33 339 Refined Petroleum 144 95 35 Coal 23 11 239 Total 473 140 613 Source: Northern Economics, Inc. 2010 34 Northern Economics The Economic Impacts of International Trade Exports on the Alaskan Economy 7 Forest Products Alaska is home to two major types of forest: the interior boreal forests characterized by white and black spruce, quaking aspen and paper birch, and the larger coastal rain forests of the southeast characterized by Sitka spruce, western hemlock, and red and yellow cedars (Alaska Forest Association, 2010). Boreal forests are harvested as a commercial timber resource, but not to the extent seen in Alaska's coastal forest. The coastal forests have long been the backbone of Alaska's timber industry, providing timber and wood products to world markets since the mid 1900s (Alaska Department of Commerce, 2010). Large scale harvesting supported Alaska's two dissolving pulp mills, one at Sitka and the other at Ketchikan; however, both mills closed in the 1990s and only a handful of small sawmills still exist. Harvesting in the Interior provides wood supply for small, local processors that meet local or regional market demand. Currently, there is little export from the boreal forest. Forestry within Alaska today takes place on privately held lands, state lands, or within the Tongass or Chugach National forests. Each land type is handled with varying degrees of management intensity, from custodial (firefighting, primarily) to intensive (second growth management on coastal islands). Though harvesting of national forest resources within the state has dropped significantly, timber sales volumes on the Tongass National Forest continued to support 122 people in 2008 (Alexander, 2009; Warren, 2008). According to the Review Draft of "Timber Supply and Demand: 2008" prepared by the Alaska Region of the U.S. Forest Service, private suppliers in Southeast Alaska (native corporations) harvested 52.3 million board feet (MMBF) in 2008, while harvests from State of Alaska lands amounted to only 11.9 MMBF, reflecting the differences in management intensity, forest acreage, market demand, and product quality. Alaska's forest product exports consist mainly of primary wood products made from hemlock, red cedar, and spruce with occasional wood chip shipments. Present day processors are, for the most part, individual and family -owned sawmills and independent logging businesses (Warren, 2008). Table 20 and Figure 20 show trends in forestry export values from 2000-2009. Table 20. Total Value of Alaskan Forest Product Exports, 2000-2009 (in $ Millions) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Forest Products 209.5 155.4 129.6 152.1 104.5 135.1 111.7 85.9 83.2 87.8 Source: US Census Bureau Origin of Movement data supplied by the Alaska Governor's Office of International Trade, 2010 Northern Economics 35 250 V! C O 200 150 100 50 The Economic Impacts of International Trade Exports on the Alaskan Economy Figure 20. Total Value of Alaskan Forest Product Exports, 2000-2009 (in $ Millions) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Source: Northern Economics, Inc. using US Census Bureau Origin of Movement data supplied by the Alaska Governor's Office of International Trade, 2010 As shown above, Alaska's wood product industry continues to generate more than 80 million dollars in exports a year, though this is a significant drop from production a decade ago. From 2000 to 2009, forest product exports decreased from $209.5 million a year to $87.8 million (US Census Bureau, 2010). The U.S. Forest Service estimates that employment within the industry statewide dropped by 54 percent from 2000-2008. In specific parts of the industry, such as logging and sawmilling in Southeast Alaska, declines were even greater. Employment in this sector dropped 73 percent from 2000 to 2008 (Alexander, 2009). Recently, Alaska's wood product industry felt the global recession; dropping housing prices and tight credit conditions negatively impacted wood product demand (Alexander, 2009). Going forward, efforts are being made to expand the lands available to the industry. For example, the pending Logjam Timber Sale on Prince of Wales Island is estimated to be a 73 MMBF project (Harrington, 2010). The state is also encouraging increases in the value-added aspect of forestry products as further in- state processing of logs would create additional jobs per board foot (Phelps, 2010). The Alaska Product Preference (APP) program provides a local bidder with a cost preference of three to seven percent for using "Alaskan products." The percentage of the benefit is determined by the amount of the product that is produced and/or manufactured in -state (Alaska Department of Commerce, 2010). 7.1 Movement of Forest Products Exports Alaskan wood products are mostly primary wood products and include cants, flitches, wood chips, shop lumber, and music wood (Alaska Department of Commerce, 2010). These forest products have been marketed to Pacific Rim markets for more than forty years. As shown in Figure 21, the largest consumers of wood products exported from Alaska are China, Japan, and South Korea. 36 Northern Economics The Economic Impacts of International Trade Exports on the Alaskan Economy South Kore 21% Figure 21. Forestry Product Export Destinations, 2009 (by Value) Taiwan Canada 4% 3% China 46% 2 6 %o Source: Northern Economics, Inc., using data from the Foreign Trade Division, 2010. Asian markets use most Alaskan imports for homebuilding and construction. It should be noted, however, that Alaskan woods are also particularly well suited for musical instrument making. Sitka spruce logs are valued as tonewood and can withstand rough handling due to their high elasticity to density ratio and strength. Both red and yellow cedars are used in guitar construction. Alaskan forest products are exported to both Asia and other parts of the world for the purpose of musical instrument making (Cole, 2010). Export of Alaska's forest products in the next decade depends on many factors, including wood supply and its relative cost to others in the Pacific Rim (British Columbia, New Zealand, Australia, Russia), specific market demand (such as music wood or nautical cedar beams), exchange rates, and other economic factors. Opportunistic markets for products such as higher grade birch, clear Sitka spruce, or veneer -grade hemlock exist and will continue to do so, but Alaska's forests contain higher volumes of lower - demand wood fiber that can increase harvesting and processing costs. Pulp mills in the coastal forest and biomass or wood chip operations in the Interior are examples of past efforts to keep overall costs competitive. 7.2 Economic Impacts of Forest Products Exports In 2008, 265 people were employed in the forest products industry in Southeast Alaska. Of these, 153 jobs were directly attributable to exports. Total direct, indirect, and induced employment attributable to the forestry products export industry is summarized in Table 21. Northern Economics 37 The Economic Impacts of International Trade Exports on the Alaskan Economy Table 21. Total Direct, Indirect, and Induced Employment Resulting from Forest Product Exports, 2008 Direct Jobs Indirect & Induced Jobs Total Jobs Forestry Products 153 236 389 Source: Northern Economics, Inc. 2010 1-0 analysis revealed that the 236 indirect and induced forest products jobs contributed $16 million to the Alaskan economy in the form of wages. As shown in Table 22, the $83 million dollars worth of Alaskan forestry product exports contributed an additional $57 million to the Alaskan economy in the form of indirect and induced economic output. Table 22. Labor Income and Output from Forest Product Employment, 2008 (in $ Millions) Total Value of Exports Indirect and Induced Economic Output Total Economic Output 83 57 140 Source: Northern Economics, Inc. 2010 38 Northern Economics The Economic Impacts of Intemational Trade Exports on the Alaskan Economy 8 Other Goods Each year there are millions of dollars worth of exports attributed to Alaska that are not part of the state's major exporting industries. These miscellaneous exports are a combination of goods from a variety of categories including used merchandise, goods returned to Canada, machinery, computers and electronic products, apparel, misc. manufactures, etc. (BEA, 2010). Goods exports as measured by the Origin of Movement series track goods from their initial point of transportation for the purpose of sale. This initial point is, in some cases, not the point of production of the good. In 2008, for example, the US Census Bureau's foreign trade statistics show $687,825 worth of paper being exported from Alaska. According to industry reports, all pulp and paper production mills within the state are closed, and no paper is currently produced. In cases where state production of a good is less than the reported state export of a good, there are several possible explanations for the discrepancy: • State production, by industry, is calculated using a value-added approach. The GSP figures do not include the same costs of production that are incorporated into the retail price at which exports are sold. Consequently, the value of the production of a product may be less than the price at which it is sold. • All data are subject to reporting errors. Production and/or export data may have been misreported. • The origin of movement series does not account for warehousing. There are instances in which a supplier exports a good that was stored in an Alaskan warehouse, but not produced in Alaska. • Alaskan companies working abroad may elect to bring construction equipment or business materials with them to their foreign job site. These materials would be recorded as exports from Alaska, though they are not sold to meet demand in foreign markets. This type of good likely comprises a large portion of the "Goods Returned to Canada" export sector. Table 23 summarizes the value of "other" Alaskan exports from 2000-2009. Table 23. Total Value of Other Alaskan Goods Exports, 2000-2009 (in $ Millions) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Other 355 444 346 379 396 574 453 283 351 222 Source: US Census Bureau Origin of Movement data supplied by the Alaska Governor's Office of International Trade, 2010 Northern Economics 39 The Economic Impacts of International Trade Exports on the Alaskan Economy 9 Services Sector The federal government does not yet provide data by state for services that are provided by U.S. firms to customers in other countries. Accordingly, the export estimates that are shown in the previous sections of this report do not include service sector exports. It is known that a number of Alaska companies in the construction, architecture and engineering, and oil and gas services sectors provide services to clients in other countries, but the identities of the Alaska firms and the value of the services that are exported are not reported. Given the lack of state -level information, this section provides a national comparison of the services sector exports with the goods sector exports to provide an indication of the potential magnitude of Alaska service exports, and provides an initial estimate of Alaska service sector exports. 9.1 U.S. Service Exports Table 24 provides information on exports of selected services as reported by the U.S. Census Bureau for 2005 through 2008. Data are not yet available for service exports in 2009. Data problems in 2008 preclude estimates for several sectors in that year so 2007 is the latest year for which totals are available for these selected service sectors. In 2007 total service exports for these sectors were almost $103 billion. The total value of all exports of all services was about $505 billion. Table 24. Selected U.S. Service Sector Exports, 2005-2008 NAICS Sector Total Revenue ($ Millions) 2005 2006 2007 2008 51 Information 42,960 43,447 51,801 50,998 523 Securities, commodity contracts, and other financial 11,193 12,326 16,197 17,929 investment activities 532 Rental and leasing services 430 515 574 S 54 Professional, scientific, and technical services 24,571 25,834 30,290 S 56 Administrative and support and waste management and 2,525 2,580 2,376 S remediation 71 Arts, entertainment, and recreation services 136 126 106 149 81 Other services 843 990 1,303 1,333 Total for Selected Sectors 82,658 85,818 102,647 Total for All Services 389,122 435,873 504,784 549,602 Source: U.S. Census Bureau, 2010a, and 2010b. Note:" S" means that the estimate does not meet publication standards because of high sampling variability (coefficient of variation exceeds 30%). The selected sectors that are presented by the Census Bureau for 2005 — 2007 are about 20.4 percent of the total service exports for those same years. Information is not available for other service sectors. Figure 22 shows that the Information sector accounted for almost half of the value of exports for the selected service sectors, with Professional, scientific, and technical services accounting for 30 percent. These two sectors account for about 80 percent of the total value for the selected service sectors. The Financial activities sector accounted for 16 percent of the total exports for these sectors. 40 Northern Economics The Economic Impacts of Intemational Trade Exports on the Alaskan Economy Figure 22. Exports of Selected Service Sectors for the U.S., 2007 Entertainment not Professiona 30% Rent, 1% 16% Source: U.S. Bureau of Census, 2010a. Information 50% Table 25 presents information on annual exports of goods and services for the U.S. for years 2005 through 2009. Since 2006, export of goods has exceeded $1 trillion with services exports accounting for less than half of that amount. Table 25. U.S. Exports of Goods and Services, 2005-2009 Exports ($ Millions) Services as % Year Total Goods Services of Goods 2005 1,281,459 892,337 389,122 44 2006 1,451,685 1,015,812 435,873 43 2007 1,643,168 1,138,384 504,784 44 2008 1,826, 596 1,276,994 549,602 43 2009 1,554, 718 1,045, 543 509,175 49 Source: U.S. Census Bureau, 2010b. Northern Economics 41 The Economic Impacts of International Trade Exports on the Alaskan Economy 9.1.1 Alaska Service Exports As noted earlier, data on service exports by state are not yet available from the Bureau of the Census or other sources. However, not including an estimate of service sector exports would understate the overall importance of exports to Alaska's economy. This analysis makes several assumptions regarding Alaska's service sector exports to arrive at a preliminary estimate: • Alaska's service sector exports are approximately 43 percent of the value of goods exports — the same as the relationship of U.S. service sector exports to goods exports in most years (Table 25). • The value of selected service sector exports as a percent of total service exports is the same in Alaska as in the U.S., or about 20 percent (from Table 24). • Alaska's economy has limited capacity in Information, Finance, Rentals (primarily aircraft), and Entertainment, so no Alaska exports are assumed from those sectors. • Alaska's service sector exports are limited to Professional, scientific, and technical services; Management; and Other (or approximately 33 percent of selected service sectors). Table 26 presents an estimate of Alaska service sector exports in 2007 using the assumptions noted above. Based on these assumptions, a preliminary estimate of Alaska service sector exports could range from $580 million to potentially as high as $1.7 billion. Thus, service sector exports could represent about 14 to 43 percent of the value of goods exported from the state, and about 1.2 to 3.6 percent of Alaska's GSP in 2007. Table 26. Estimate of Alaska Service Sector Exports, 2007 Percent $ Millions Total Alaska goods exports in 2007 4,010 Service exports as % of U.S. 43 Potential service exports 1,724 Select sectors as % of total services 20 Select sectors 352 Adjust for selected services available in Alaska 33 Preliminary Alaska services exports 116 Use selected services % to scale to total service sector exports 580 As % of goods exports in 2007 14 to 43 As % of Alaska GSP in 2007 1.2 to 3.6 Source: Northern Economics, Inc., 2010. 42 Northern Economics The Economic Impacts of Intemational Trade Exports on the Alaskan Economy 10 References Alaska Department of Commerce, Office of Economic Development. Alaska Forest Products. Accessible at http://www.commerce.state.ak.us/oed/forest products/forest products htm. Accessed on March 20, 2010. Alaska Department of Commerce. Forest Products. Accessible at: http://www.commerce.state.ak.us/oed/forest products/forest products htm. Accessed on March 15, 2010. 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