Economy

Juneau’s economy is back on track. After a brief flirt with recession, Alaska’s capital city is healthy.

That’s the headline from this year’s 2011 Juneau and Southeast Economic Indicators, prepared by the Juneau Economic Development Council.

Meilani Schijvens is the primary author of the annual report, which looks back at 2010.

“This year we’re happy to announce the Juneau population is up, the Southeast population is up, employment is up, total payroll is up, unemployment is down, ” Schijvens says. “School enrollment is up, both is terms of Juneau School District and UAS. Housing starts are up and home values are increasing.”

The annual report shows increases in 2010 employment and wages in mining, fishing, health care, and federal, state and local government. But Schijvens says some of the increases in 2010 were not enough to make up for the losses of 2009.

“Just for an example, the average annual employment in Juneau grew by 2.3 percent in 2010, but in 2009 the loss was 3.5 percent and that was a big loss,” she says. “So we have these nice upward trending numbers but they don’t erase all the losses of 2009.”

The downturn in the cruise industry affects Juneau’s retail segment and city sales tax. One-hundred twenty-three-thousand fewer people arrived by cruise ship last year than in 2009. Schijvens says that’s already turning around and more passengers are projected next year.

The number of independent travelers was up: Both Alaska Airlines and the Alaska Marine Highway System report increases for 2010.

“Ferry passenger traffic was up 6.6 percent. Alaska Airlines passenger traffic was up by 3.9 percent and in 2011 that’s continuing to go up, an additional 3 percent so far,” she says.

The number of passengers traveling by small, regional airlines grew more than 17 percent last year.

The Indicators report is a one-stop guide to economic information for 2010. JEDC compiles research from federal, state, local and industry sources to help inform the business and political communities and citizens about Juneau’s economic climate. Brian Holst is JEDC executive director.

“It looks back at where we’ve been,” Holst says. “The Indicators report gives us a good snapshot of where we are. It doesn’t tell us where we’re going. We believe that by having good information, a good understanding of what the economic sitatuion is, people can make better decisions about the future.”

The population in both the capital city and Southeast region increased slightly in 2010. Senior citizens are the fastest growing segment, but the number of “20-somethings” is also rising.

The report’s bad, but not unexpected news: Juneau’s cost of living is 39 percent more than the average American city. Housing costs are 66 percent higher.

A link to the 75-page Juneau and Southeast Economic Indicators 2011 can be found at www.jedc.org.

New officers have been named for Coeur d’Alene Mines Corporation, the parent company of the subsidiary that runs the Kensington Mine about 45 miles northwest of Juneau.

Frank Hanagarne, Jr. will become the new Chief Financial Officer and Senior Vice-President next month. He recently was Chief Operating Officer of Swiss miner Valcambi and director of corporate development for Newmont Mining.

K. Leon Hardy, who started work at Coeur d’Alene Mines eight years ago and was most-recently Senior Vice-President of Operations, will become Chief Operating Officer and Senior Vice-President.

It was just last July that former Chief Financial Officer and VP Mitchell Krebs was promoted to President and Chief Executive Officer as long-time CEO Dennis Wheeler retired. It was expected back then that Krebs would continue with his duties as CFO.

The chief executive of the Southeast Alaska Regional Health Consortium, or SEARHC, is stepping down.

Roald Helgesen is leaving SEARHC to become chief exectuive officer of the statewide Alaska Native Tribal Health Consortium. He says his last day is in December, to ensure a smooth transition to a new CEO.

In a letter to the SEARHC, Helgesen says he believes he can use his skills even better at the tribal group. Headquartered in Anchorage, ANTHC was formed in 1997 to manage statewide Native health care, including the Alaska Native Medical Center, the state’s largest Native hospital.

Helgesen started at SEARHC answering phones in 1993 and made his way to vice president of administration before leaving in 2004 for work in the Lower 48. He returned in 2007 as president and CEO.

SEARHC operates Mt. Edgecumbe Hospital in Sitka as well as facilities in Juneau and 16 other communities throughout Southeast Alaska.

Helgesen announced his resignation Tuesday and was unavailable for comment, meeting with the board much of the day on a transition plan. The Southeast health group will conduct a nationwide search to replace him.

Governor Sean Parnell revealed the amount of this year’s Permanent Fund Dividend in Anchorage on Tuesday morning. Cameras clicked away as he held up a large white card with the printed amount of $1174, followed by applause. This year’s dividend is $107 less than last year’s dividend of $1281.

The dividend is calculated as a share of each Alaskan’s share of the state’s oil wealth savings account, the Alaska Permanent Fund, which invests a portion of state’s oil revenues in stocks, bonds, and real estate. The dividend amount is based on a formula that includes an average of the last five years of realized earnings divided by the number of eligible Alaskans.

Department of Revenue Commissioner Bryan Butcher says the Fund has weathered several rough years by ending the fiscal year 2011 with a total value of $40 billion, the highest ever in state history.

“2008 took quite a beating all across country with investments and because of what happened on Wall Street,” said Butcher. “But we bounced back quite nicely from that.”

This year, Butcher says a total of $760.2 million in dividends is being paid out to 647,549 Alaskans.

Almost 535,000 Alaskans will receive dividends by direct deposit on October 6th. Butcher says paper checks will go out the same day to nearly 93,000 Alaskans.

Governor Parnell says the Pick Click Give charitable deduction program set aside the most amount of money ever – nearly $1.6 million is going out to about 400 non-profits and charities statewide in only the third year of the program.

Alaska’s Marine Highway System wants a court to order the fast-ferry builder to provide new engines for the ships.

State officials say engines on the Fairweather and Chenega are wearing out far faster than their warranties promised. Replacing the eight engines could cost in the range of $20 million.

The state filed a lawsuit last year, but continued talking to the manufacturer about a solution.

Captain Mike Neussl says the state is now asking the court for a preliminary injunction to force action before the engines wear out.

“If that happens, those vessels could be out of service before there’s an ultimate resolution. That would mean the state would lose use, and state residents and communities would lose use, of those vessels prior to the ultimate decision on that lawsuit,” he says.

He says quick action is needed because making new engines will take about a year.

The engines have already undergone repairs. Neussl says that has extended their operating life. But the repairs are not permanent.

The lawsuit and injunction motion are against Derecktor Shipyards, which build the ship, and subcontractors that built the engines. Derecktor officials could not be reached for immediate comment.

The injunction motion filed in Superior Court does not specify that new engines be built by the same manufacturer. But Neussl says that’s the likely solution.

“We have looked at alternatives, what other engines are out there that we could replace these engines with. And to be honest with you, there’s not any other diesel engines in the market place that meet the power-to-weight ratios that these engines have and would fit in the assigned space and have the correct weight to be used in these vessels,” he says.

The Fairweather, built in 2004, is based in Juneau and sails to Sitka and Petersburg. It’s scheduled to begin Angoon service next year. The Chenega, built in 2005, is based in Cordova and runs to Valdez and Whittier.

The Kensington mine accident that killed Juneau resident Joe Tagaban last week is the eighth U.S. mining fatality in 2011, according to the Mining Safety and Health Administration. It was also the first explosives fatality for the year.

An updated report from MSHA indicates Tagaban was waiting on a ramp for the blast to be initiated. And when it was, small rock and debris traveled through a 3-inch diameter diamond borehole, striking him.

The regulatory agency says the hole should have been mapped and plugged.

The report lists several best practices for using underground explosives; that includes evacuating all persons from the designated blasting site.

MSHA is asking for other suggestions to prevent such an accident.

The underground section of the Kensington mine where the accident occurred was closed for a week during the initial investigation.

While the mine is back in full operation, no blasting can be conducted in production areas underground until MSHA says it’s safe.

The company is working with the agency to finalize blasting protocols in production stopes. Blasting activities related to mine development are continuing.

According to MSHA, there were 14 U.S. metal and non-metal mining fatalities reported in 2010.

Click here for the MSHA “Fatalgram.”