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Storm clouds gather: AGDC makes play for foreign funding of operations

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GASLINE PROJECT RUNNING ON FUMES

The AK-LNG project is facing steep headwinds this month on several fronts: Tariffs on steel are going up, a stern letter from the Federal Energy Regulatory Commission is deeply troubling, none of the promised purchase agreements have been announced, and the agency has a rapidly dwindling bank account.

Now, the AGDC is hoping for a cash infusion from a foreign entity, possibly China, to stay afloat.  This adds even further to the uncertainty.

Setting aside the dubious likelihood of a foreign entity investing substantial sums in the project, it is far from clear whether the Legislature would even allow the Alaska Gasline Development Corporation to accept foreign funding.  Doing so would cut legislators off from their appropriating authority on the proposed $45 billion gasline and potentially hand authority to a foreign entity.  That would be a tough sell.

TARIFFS ON STEEL

President Donald Trump on Thursday announced steep new tariffs on imported steel and aluminum, which will add 25 percent to the steel estimates for the Alaska gasline project. No one outside AGDC knows what those estimates are, as that is a closely held detail, but they probably got the calculators out today to recheck their numbers.

The Alaska AK-LNG gas treatment plant alone will require 250,000 tons of steel, while the 800-mile 42-inch pipeline will require approximately the same.

The Alaska Gasline Development Corporation has a fragile margin for the feasibility of the project and was depending upon cheaper imported steel. AGDC now must hope it can get a waiver from the tariff.  The tariff was announced today at a White House meeting with U.S. steel and aluminum executives.

[Read: 10 questions for AGDC]

FERC LETTER OF REPROACH

In February, the Federal Energy Regulatory Commission sent a detailed and pointed letter to AGDC, warning the state agency that it had fallen far short in its application for an environmental impact statement.

FERC had already warned AGDC last year that it was not ready to file for a permit, but the agency, which is directed by President Keith Meyer, proceeded anyway. In April, it filed what AGDC said was the largest EIS filing in the history of the National Environmental Policy Act, which is the process for getting a permit. By August, FERC had replied and said too much detail was missing. In January, President Meyer told FERC he had given them all the information to which they were entitled.

February’s letter from FERC responded, saying there were hundreds of items that were incomplete or nonexistent in the filing.

Since FERC’s letter, AGDC has been silent, not issuing any statement about the shortfalls of its application or how it plans to proceed.

[Read: Alaska gasline agency gets tough love letter from FERC]

NO PURCHASE AGREEMENTS

Meanwhile, AGDC had announced last year that by March 1, 2018  it would have  gas sales agreements in place with foreign buyers in Japan, Korea, Vietnam, and China. That date has passed and no agreements were announced, although such agreements could be just days away. The agency is hoping to have all of its agreements for financing and sales in place by the end of 2018, and gas flowing by 2025.

OPEN ENDED CHECKBOOK REQUEST

Another existential problem is available cash to continue as an agency, which now burns through millions of dollars a month and is supporting four separate offices: Anchorage, Houston, Tokyo, and Nikiski.

The agency is likely down to its last $57 million, although legislators have complained about the lack of transparency. The agency itself says it will have just $40 million in June, the end of the fiscal year.

[Read: AGDC presentation to Legislature January, 2018]

During the past year, AGDC has spent at least $3 million on marketing the project, which is the largest in North American history. It has signed “agreements” with potential customers in China, South Korea, Japan and Vietnam.

Now, the governor has an item in his supplemental budget that would give AGDC “open-ended appropriation of SDPR (statutory designated program receipts) collected in FY 18 and FY 19 from investors.” This means the agency would have the ability to cut the Alaska Legislature completely out as an appropriator, and receive all of its money from outside investors, such as Chinese entities, and then proceed to make commitments on behalf of the state, without worrying about whether legislators have concerns about the level of ownership that those investors might acquire or the commitments the agency would make on behalf of the State of Alaska.

“AGDC expects to receive investments from outside parties as it continues to develop the Alaska LNG project. Investment funding will support the project as it contracts with engineering, procurement, and construction (EPC) firms to a conduct front-end engineering and design (FEED) prior to a final investment decision in calendar year 2019,” the governor’s description reads.

[Read: Governor’s supplemental budget, see Page 3 detail]

March 8 is the next board of directors meeting for AGDC. The meeting begins at 9 am at the AGDC corporate office, 3201 C Street in the Calais II building. The public may attend in person or via teleconference by calling 855-282-6330, access number 921 325 605.

Justin Parish’s Monday blues

I OBJECT … YOU CAN’T OBJECT … I STILL OBJECT

On Monday, Juneau’s Rep. Justin Parish found himself at odds with the rest of the House Resources Committee. Even the co-chairs of the committee, both hard-left Democrats, seemed to lose patience with him.

Parish was showing no love to names provided by the governor for the Big Game Commercial Services Board. He felt the applicants should have disclosed that they have a potential conflict of interest, since they were involved in the big game services business.

Rep. Chris Birch tried to explain to Parish that real estate professionals serve on the Real Estate Board, and other professionals serve on other boards and commissions that create regulations for their specific professions. This is how it works.

But Parish was not happy forwarding Gov. Bill Walker’s names to a joint session of the House and Senate for a vote. He objected.

Co-chair Geran Tarr told him gently that he could not object to forwarding names. By forwarding the names, the committee was not approving them, but was only acknowledging they had reviewed the applicants was sending them on to a joint confirmation vote by the House and Senate.

“I understand the intent of your objection, but I’ve just never seen it entertained,” said Rep. Josephson, the other co-chair.

With his logic, Parish would never be able to serve on a “Crossing Guard Board” because he would have a possible conflict of interest.

JUSTIN’S BILL GETS BOLOXED

Also on Monday, Rep. Parish’s signature legislation had to be withdrawn from the House calendar after being held over to the next day’s calendar not once, but twice; it was returned to the Rules Committee for further work.

HB 213 would restructure the Public School Trust Fund, combining separate accounts and using a “percent of market value” approach to get a higher rate of return, and more stable funding for public schools.

But a question came up: Because it is one of the only dedicated funds in the budget, by changing the structure of it, would future legislators be able to dip into the principle of the fund?

Rep. Tammie Wilson of North Pole wanted to make sure that didn’t happen. She offered an amendment, but it was not approved by the Democrat-led majority.

In the meantime, others started questioning whether by changing the fund so dramatically it would lose its “grandfather status” as a dedicated fund. The bill was rapidly losing support, and Parish was unable to explain it to his colleagues in the House why neither of these risks were relevant.

Parish was given the bill to help him with his gravitas. It backfired. At this point, he’s looking for a lifeline to help him get his bill out of Rules Committee purgatory.

Scofflaw: Kreiss-Tomkins hustles to fix illegal campaign disclosure

SLOPPY OR TOO BUSY TO CARE?

Rep. Jonathan Kreiss-Tomkins of Sitka is working hard to correct a report he made more than two weeks ago to the Alaska Public Offices Commission.

His original report, which was due Feb. 15, contained significant errors, serious campaign finance violations, incomplete information about donors, and a lack of attention to detail. Transparency is the biggest problem with his reporting.

Kreiss-Tomkins, elected in 2012 after dropping out of college, could be seen during a committee meeting on Wednesday afternoon working hard on his tablet computer and not paying attention to legislative proceedings.

By the end of the day, the most egregious errors to his campaign finance report were amended, although numerous donors are still listed with incomplete information.

The extensive violations on his original filing that had been noted by Must Read Alaska in our Wednesday email News Flash, read by thousands of Alaskans (you may sign up on the right side of this web site). Must Read Alaska noticed his extensive violations while reporting on a challenger in the District 35 race, who filed for office on Tuesday.

[Read: Alaska Native ‘Kenny Karl’ Skaflestad challenges JKT]

Kreiss-Tomkins’ report had problems enough to attract a hefty fine from the public offices commission, but by fixing them he will likely not face such a penalty.

His original report showed he had received more than $3,000 from out of state, which would have been a violation; he also showed receiving a donation in February from a political action committee, also illegal; and received $1,000 in illegal donations from ASEA, the State employees union. He also had listed four donations twice on his APOC report.

By the time he corrected those problems, which appear to be double entries, his $8,833 in donations were whittled down to $6,944, about a 22 percent error rate in his reporting. His out-of-state contributions came in just under the $3,000 limit, a legal squeaker for the lawmaker who attended Yale University but who left before graduating to run for the Alaska House.

The majority of his donors on his original filing omitted their job titles and employers, and many addresses were missing or clearly false, such as “Stanwood, Alaska.” That problem is still one he will have to address.

Kreiss-Tomkins listed one $500 donation that he received on Feb. 12, 2018, which would violate the APOC rule that prohibits sitting legislators from accepting donations during legislative session. That donation came from the Alaska Sea Pilot PAC fund.

In the 24 hours since Must Read Alaska first reported on this, Kreiss-Tomkins has removed that donation from his amended report.

The lawmaker, who is part of a group pushing the Alaska Government Accountability Act, a ballot initiative to limit state lawmakers’ travel, per-diem, and lobbyist contributions, received the majority of his donations from out of sate. Some 45 of his 56 donors on his original report (since amended) came from places like California, Massachusetts, Connecticut, New York, and Chicago.

A sample of what the Kreiss-Tomkins APOC report looks like, with incomplete information, double entries, and what would be an illegal contribution, which is now gone from his amended report.

A screen shot from Kreiss-Tomkins’ original campaign finance filing, showing double entries and an illegal contribution from the Alaska Sea Pilots Political Action Committee, as well as numerous “TK” listings that show no addresses, occupations, or employers.

 Kreiss-Tomkins’ amended report is here.

The Sitka lawmaker was featured prominently in a Politico story earlier this year about how Democrats took over the Alaska House of Representatives.

[Read Politico: How to turn a red state blue]

Assembly Mining Committee begins public process

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By WIN GRUENING
SENIOR CONTRIBUTOR

The newly formed Assembly Mining Committee will accept public comments on the draft revision of Juneau’s mining ordinance at their March 1 meeting in City Hall Chambers, beginning at 5:30 pm.

As the committee begins its work, the economic benefits of the mining industry remain in the forefront.

The average annual salary at Greens Creek Mine on Admiralty Island is $122,000, from an aggregate payroll of almost $51 million for 414 direct jobs.

It is Juneau’s largest property tax payer at $1.7 million annually.  Some 45 miles north of Juneau, the Kensington gold mine, with 367 employees, has similarly impressive numbers.

The mining committee was established in response to a group of local businessmen that believes current municipal regulation is a barrier to potential development of new mining projects. The group contends that duplication of permitting processes in state and federal law, along with unnecessary requirements and vague and undefined language in municipal code discourage investment.

Win Gruening

Meeting for the first time last July, the committee recently finalized its organizational structure and membership.  The committee is made up of seven voting members – three members of the Assembly: Norton Gregory (Chair), Maria Gladziszewski, and Beth Weldon; two Planning Commissioners: Ben Haight and Paul Voelckers; and two public members: Roman Motyka and John Kato.

The first meeting attended by all members was held on Jan. 3. Committee deliberations, public participation, and final recommendations are expected to be complete by May.

Thus far the committee hasn’t made substantive changes but proposed a reorganization and clarification of the code’s provisions. Hopefully, this will lead to eliminating the burden on applicants to provide duplicative information.

But more changes are being considered. And while these changes are being characterized by mining opponents as “gutting” the ordinance, this isn’t the case.

No environmental protections would be “rolled back” and our community would continue to have control over how any mining operation would occur.

Under any revised ordinance, large mining projects near Juneau population areas would continue to be subject to a conditional use permit. This allows the city and borough the final say on whether the project could proceed. Juneau could add other conditions addressing local concerns such as traffic, noise, dust, visual aspects, surface subsidence, and erosion, for instance.

There are three major areas of the existing mining ordinance needing modification.  They are the requirement for (1) a socioeconomic study (2) a mitigation agreement and (3) financial warranties.

None of these requirements were municipal conditions of the opening of the Greens Creek Mine or the Kensington Mine.  Indeed, no other industry is subject to all these requirements even though some impacts may be similar.

Federal and state regulators of mining projects require financial warranties and mitigation measures and any EPA environmental impact study would consider socioeconomic impacts.  CBJ code revisions should allow approved state and federal permits as evidence of “de facto” compliance with these requirements.

While any new business, its employees, and support vendors exert some short-term pressure on municipal services and housing stock, the history of the Greens Creek Mine and Kensington Mine prove mining projects are extremely beneficial to our economy and can be developed and operated with appropriate environmental safeguards.

In evaluating “people” impacts on our community, there is no logical distinction between 200 mine workers and their families coming to Juneau versus adding 200 new government jobs – except that economic benefits are greater with mining jobs. So why discriminate against mining companies and their employees?  What is the sense in discouraging valuable mining projects here through extra requirements that impose unnecessary studies and duplicative bonding and mitigation measures?

Organizations such as the Juneau Chamber of Commerce and Southeast Conference have already endorsed modifications to the ordinance. But these changes also need to be supported by the general public. You can help by attending the meeting on March 1.

Citizen input is vital to reinforce to our elected assembly members the importance of diversifying our economy.  This is an opportunity to attract environmentally responsible projects that add jobs, families and demographic stability to our community – thereby strengthening our schools, our local businesses, and our municipal tax base.

Win Gruening retired as the senior vice president in charge of business banking for Key Bank in 2012. He was born and raised in Juneau and graduated from the U.S. Air Force Academy in 1970. He is active in community affairs as a 30-plus year member of Juneau Downtown Rotary Club and has been involved in various local and statewide organizations.

Criminal round up, release, repeat

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Eight arrests occurred in Anchorage last weekend for people with seven stolen vehicles.

Police said they took the eight into custody on Feb. 24-25 in what was a busy weekend of apprehending car thieves that the court system then processed in subsequent days.

Must Read Alaska tracked where those eight people are now in the justice system and discovered that five are already out of jail:

  • Joseph Sanford, 25, arrested in a stolen car on Mountain View Drive on Feb. 24 after spinning out on ice and then fleeing on foot. He was arrested for car theft and eluding an officer. In jail awaiting pretrial.
  • Cassey Ann Stricklin, 37, arrested on Feb. 24 for car theft. Out of jail on community supervision. Her next court date is March 20.
  • Russell Anderson, 32, arrested for car theft on Feb. 24 at 40th Avenue and Old Seward Highway. Out of jail on community supervision.
  • Rose Soto-Naranjo, 21, passenger with Anderson, arrested on Feb. 24 for car theft and criminal mischief, also possession of a controlled substance. Out of jail on own recognizance.
  • Lawrence Dewayne Ward, 42, arrested for car theft on Feb. 25 on Ingra Street at 8th. Out of jail on community supervision.
  • Joseph McAlees, 36, arrested on Feb. 25 after fleeting a stolen vehicle at Bragaw Street. In custody at Anchorage jail.
  • Shannon Perkins, 31, arrested on vehicle theft on Feb. 25 in Muldoon and Creekside Center Drive. Perkins is accused of stealing a car from a woman who had gotten her vehicle stuck in a snowbank and had stepped out of the car to call her insurance company. Out of jail on community supervision.
  • Denzel Lang, 24, arrested on Feb. 25 with a stolen vehicle on 5th Avenue near Reeve Blvd. She eluded and resisted arrest. In custody at Anchorage jail.

Of the eight arrested, five are out of jail either on their own recognizance or under community supervision.

PERKINS, AGAIN

Shannon Perkins, 31, arrested for stealing the car of the woman who had plowed into a snowbank, was the subject of an earlier car theft arrest in January.

In this latest case, however, Perkins appeared to be pretending to help the woman with her stuck car at about 9:20 in the morning, but then simply stole it.

Police arrested him at 6th Avenue and Norman Street after he abandoned the vehicle. Must Read Alaska wrote about this character in an earlier car theft case:

[Read: The couple that steals together…]

Perkins’ next court date is March 6. Of course, he is innocent until proven guilty.

Tarr’s bill would give judges right to take guns

Feeling a bit blue today? Feel like taking some time in your shop reloading?

Rep. Geran Tarr of Anchorage has a fix for that.

Tarr has a proposal that would allow a judge to seize your guns and ammo if your family or the courts decide you are mentally ill and a danger to yourself or others.

But this is just the beginning, said many testifiers during today’s first hearing on HB 75. Although more gun control is needed, they said, HB 75 is the one baby step the government can take right now, in the aftermath of the Parkland, Florida school shooting, which left 17 young people dead.

Tarr introduced HB 75 in 2017, after an Iraqi war veteran from Anchorage traveled 4,000 air miles to Florida and shot and killed people at the Fort Lauderdale airport.

Esteban Santiago had, months earlier, walked into the FBI office in Anchorage with a loaded handgun magazine. He was clearly agitated and told agents he was experiencing “terroristic thoughts,” and he told them the CIA was making him watch ISIS videos.

Santiago

The FBI referred his case to Anchorage authorities and Santiago was admitted to Alaska Psychiatric Institute. He was delusional and paranoid. Police took his gun. Four days later, he was released and his gun was given back to him. He went on to kill five people and injure six others in Florida.

 

That incident, plus all the crime in Anchorage and the suicide death of her own brother, spurred Rep. Tarr to draft HB 75 last year. Her answer to violence is to take guns away from those who are mentally ill.

But as the details of Santiago’s descent into madness unfolded, it became clear that all the systems to stop him from doing harm to others were in place, but simply failed. The bill didn’t seem ripe last year.

HB 75 was never heard until today, when it was the top subject in the House Judiciary Committee, where Committee Chairman Matt Claman allowed Tarr to dust off her proposal and present it in light of a more recent mass shooting and a more tender current public sentiment.

HB 75 would establish a gun “risk protective order,”  allowing police or others to get a quick ruling on the mental stability of a person who owns weapons.

Judges could then order weapons and ammunition seized, with or without a hearing.

During today’s committee hearing,  both invited and public members talked about gun violence and student safety.

But before long, the reason people wanted HB 75 to be passed included suicide as a main reason. Alaska has a high rate of suicide and HB 75 could reduce it, said person after person who stepped to the microphone.

Sally Rue, former school board president, was among the several testifiers who mentioned suicide as a reason to pass HB 75, although she was also concerned about school shootings.

Rep. Reinbold of Eagle River wondered what other things might be taken away from people who might harm themselves, whether it’s the forcible taking of car keys or pills. She focused on hardening the safety of school buildings.

John Sonin of Juneau testified that he represents “civilized humanity” and that “this craziness going on in the White House” was evidence enough that there is a mental health crisis in the country.

Only one person testified against the bill, among approximately two dozen who spoke.

In practical terms, the bill would not do much more than the law currently allows through 48-hour psychiatric holds now permitted under State Statute.

Democrat Reps. Ivy Spohnholz and Harriet Drummond are cosponsors of the HB 75, which did not move from committee.

The full text of the bill is here.

Filler ‘er up: Gas will cost 10 cents more per gallon on Thursday

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PROTESTS PLANNED
Mayor Ethan Berkowitz’ new gasoline tax goes into effect on Thursday, costing motorists 10 cents per gallon more than they will pay before midnight on Wednesday.
For gasoline costing $2.89 per gallon, that’s a 3.5 percent increase at the pump for regular. A 20 gallon tank of gas will cost $2 more.
The gas tax was approved by the Assembly, and it offset a slight reduction in property taxes that came after Anchorage homeowners started voicing opposition to increasing property tax bills that began under the Berkowitz Administration.

The Berkowitz Administration says the gas tax will raise $11-14 million its first year.

The Anchorage municipal budget has exploded since Berkowitz took office, going up from $471 million in 2015 to now over $521 million.

“In reality this is a $531 million budget because they are kicking $10 million in pension liabilities, which are typically accounted for in the budget, to 2019,” Assembly member Amy Demboski explained earlier this year.

To compare, the similarly sized city of Cincinnati, Ohio has an operating budget of $388 million.

The gas tax, supported by every Assembly member except Demboski, is supposed to help increase services for the homeless, as well as pay for employee pay raises and health care benefits.

An average driver will pay $43 more per year in taxes. Last April, the Assembly raised property taxes by 5.3 percent, costing the average homeowner more than $240 more per year. The latest budget rolled half of that increase back, but sent the rest of the bill to drivers.

It spreads the tax out to residents living in the Mat-Su Valley and Girdwood, who commute farther to work than people in the urban core.

Political activist Judy Eledge said she and others will be protesting Thursday and reminding people that their taxes just went up.

“We’re going to show our mayor and Assembly that many of us are struggling to live in a city with a property tax increase of 8 percent in less than four years, and we’re not going to stand for more taxes so the mayor can build more homeless shelters. If he keeps it up, we’ll all be homeless,” she said.

Eledge said that there will be signs available to wave at 442 Gambell Street in Anchorage, near the Tesoro gas station, starting at 8 am on Thursday.

Alaska Native ‘Kenny Karl’ Skaflestad takes on JKT

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The former mayor of Hoonah, “Kenny Karl” Skaflestad, has filed to run against Sitka’s Jonathan Kreiss-Tomkins for House District 35.

Skaflestad is Tlingit and Aleut, and works on and off as a commercial fisherman. He attended Petersburg High School and graduated from Juneau-Douglas High School in the 1970s. He has worked in construction as well as being a power troller.

Skaflestad served two terms on Hoonah City Council, helped establish a short-term Chamber of Commerce, the Citizen’s Community Support Team and Hoonah Citizen’s Task Force.

“I began my career in civil construction at a young age,” he said. “Experience in rural Alaska helped me to thrive as Hoonah’s mayor and prompted the founding of the Alaska Hubzone, which is a non-profit corporation serving rural areas. Most of all, the early construction experience developed my strong support for economic development.”

He will focus on jobs and economic growth for the District 35 region that includes places like Kake, Klawock, Thorne Bay, Petersburg, and Sitka.

Incumbent Kreiss-Tompkins dropped out of Yale University to run for legislative office and has not held any other actual job.

The district is evenly split between conservatives and liberals, although Sitka is a liberal stronghold for hometown boy Kreiss-Tomkins, who recently filed legislation to change the Alaska constitutional designation of marriage as between a man and a woman. His earlier legislation was to enshrine 20 Native languages as official languages of the State of Alaska. He has advocated for an income tax along with the Democratic majority that controls the House.

Feted by the mainstream media, Kreiss-Tomkins was featured prominently in Politico for having been recruited by the Alaska Democratic Party to run for House in 2012.

KREISS-TOMKINS BUILDS WAR CHEST FROM SAN FRANCISCO, NEW YORK DONORS

Skaflestad, who filed as a Republican, has some catching up to do in the fundraising department.

Kreiss-Tomkins has a busy online fundraising effort, but of the 56 donors he declared in his recent Feb. 15 required fundraising disclosures, 45 were from out of state; 11 donors were from California and 17 were from the East Coast, including New York, Massachusetts, Connecticut, Chicago, and Maryland.

Over half of Kreiss-Tomkins donors have not yet disclosed their job titles and/or employers, which is information required by Alaska election laws, and others have not listed their actual home towns, or have listed fake towns, such as Washington, Alaska.

Check out Kreiss-Tomkins’ donors here.

But Kreiss-Tomkins has a nearly $9,000 head start on the Alaska Native fisherman from Hoonah, whom people in District 35 know simply at “Kenny Karl.”

Take our Survey: Holocaust and self defense

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At a conference in Anchorage last week, Congressman Don Young was asked his views on gun control, and Young offered them:

“How many millions of people were shot and killed because they were unarmed? Fifty million in Russia,” Young said. “How many Jews were put in the ovens because they were unarmed?”

The remarks were recorded as opposition research by Anchorage Democrat Dimitri Shein, who is running against Young. Dimitri gave his audio to a willing news reporter.

Alaska Public Media, with a slight side-glance at Young, decided to run with it as a story and used the opposition research audio in their story. The story and audio clip is here.

What are your thoughts on firearms and the Holocaust?

Give us your quick read on the matter on Must Read Alaska’s SURVEY AT THIS SURVEYMONKEY LINK.