Alaska News Nightly: September 28, 2011

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Trident Seafoods Paying $2.5 Million in Fines for Clean Water Act Violations

Annie Feidt, APRN – Anchorage

Trident Seafoods is agreeing to pay the federal government $2.5 million to settle clean water act violations at its Alaska processing facilities. The Seattle Based company will also spend tens of millions of dollars to upgrade facilities and clean up the sea floor. The Environmental Protection Agency is calling the agreement a “game changer” for environmental practices in the industry in Alaska.

Legislative Agency Warns of Risk to State’s Credit Status

Dave Donaldson, APRN – Juneau

Wednesday, a legislative agency reports that the state’s credit status will be at risk if the oil tax reductions proposed by the governor become law.

One of the most controversial issues expected during next year’s legislature is a bill introduced by Governor Parnell that would reduce oil taxes from the current levels by as much a two Billion dollars a year depending on oil market prices.

Anchorage Democrat Bill Wielechowski, the chairman of the Senate’s State Affairs Committee,  says he non-partisan Legislative Research Service found that the substantial decrease in revenue that would follow the tax cut could be seen by credit agencies as a negative factor.

“These are the governor’s numbers.  And the governor’s numbers show that we will be losing Billions of dollars.  The governor’s numbers show that within the next decade, the state will be broke.  According to this non-partisan legislative research report – the research they’ve done – it is very likely put downward pressure on our credit rating.  The loss of our credit rating will have a severe impact all across Alaska,” Wielechowski said.

As an example, Wielechowski says that by lowering the credit rating by one level – from triple-A to Double A-plus – the price for the Susitna hydroelectric project alone would increase by more than $300 million in higher interest on bonds for the project.  He says Alaska needs the revenue – to build infrastructure projects – and to protect jobs that Alaskans already have.

“$2 billion into the Alaska economy every year creates thousands and thousands of jobs across the state.  And if you take that money out of the capital budget – which is going to have to happen if you pass the governor’s bill — you’re talking about losing probably thousands of jobs all across Alaska,” Wielechowski said.

Economist Gregg Erickson is Editor at Large for the Alaska Budget Report which reported in February on the connection between the governor’s tax cut and the state’s credit standing.  He is not willing to project the effects of credit ratings on job growth.

He says the Parnell administration recognized that the reason for high credit ratings was the savings and income from the current oil tax regime. However, in the Budget Report’s story,  the administration denied any possible negative effects of a lower income.

“But, of course, their denial which they issued in an e-mail to me was totally devoid of any backup at all.  They just said it.   It’s been remarkable how little analysis did to support its proposed policy.  And it’s no surprise,  given the lack of analysis,  that they haven’t made much progress with it,” Erickson said.

The Parnell administration did not reply to requests for a response to the Legislative Research report – or to Wielechowski’s comments.

Denali Commission Returns $15 Million to Government

Lori Townsend, APRN – Anchorage

After seven months of uncertainty, the head of the Denali Commission says a long awaited answer about whether the commission would need to return $15 million has been settled. Joel Niemeyer is the federal co chair of the commission. He’s been waiting for months for clarity from both the Office of Management and Budget-OMB and the Government Accountability Office-GAO on how and if, $15 million in carry over funds the commission had on its books had to be returned. Neimeyer says the agency has returned all of the money.

He says within 48 hours of receiving the fy11 money last week, all funds were obligated and $15 million was carved out from various pots and returned.

The issue arose last year when congressional staffers told Neimeyer it didn’t look good for the commission to carry over funds from year to year. It appeared the agency didn’t need the money, even though the commission operates with what is known as ‘no year money’, which means carry over should be fine. But Neimeyer heeded the warning, dutifully obligating funds to future projects– then was told in February, Congress wanted the money returned.

Neimeyer says he’s making changes in how money is doled out and says in the past if projects were languishing, commission members would politely ask the grantee if they could help.

He says this will be one of the biggest changes going forward. He says he’ll also insist on more frequent billing from grantees rather than waiting for one final billing and they will only carry over required base amounts.

Kathie Wasserman is the executive director of the Alaska Municipal league, the organization that advocates for municipalities throughout the state. Wasserman is also a commissioner on the Denali commission. She says although the commission did nothing wrong, she’s concerned that some congressional members will see the rescission as a black mark.

Wearing her AML hat, Wasserman says she is worried about how small communities will be able to secure funds for big ticket items in the future.

The commission’s Neimeyer says the types of projects that will be delayed are fuel system upgrades and waterfront improvements. He is optimistic however that the commission is on firm financial ground for future work and new collaborations.

Neimeyer says he anticipates fy12 money will be consistent with current year funds. He’s seen no efforts at reductions in base allocations.

Sailor Attempting to Circle the Americas

Alexandra Gutierrez, KUCB – Unalaska

Traveling through the Northwest Passage is challenging for any sailor, but Matt Rutherford has decided to take his trip farther than that by continuing on to circle the Americas.

Race for Kenai Peninsula Borough Mayor Crowded

Lori Townsend, APRN – Anchorage

On the Kenai Peninsula, the race for Borough Mayor is a crowded one this year, with a total of six candidates vying for the job. KBBI’s Aaron Selbig joins us on the phone from Homer to discuss the race.

Fire Island Wind Project, Chugach Electric Agreement Facing Tough Opposition

Len Anderson, KSKA – Anchorage

This week, the power purchase agreement between Chugach Electric Association and the Fire Island Wind Project has come before the Regulatory Commission of Alaska for its needed approval.   But if Tuesday’s opening statements are any indication, the agreement is facing some strong headwinds.

Fairbanks Borough Schools Working to Resolve Budget Challenges

Dan Bross, KUAC – Fairbanks

Fairbanks Borough schools are facing a budget challenge.  That was one of the messages from North Star Borough District Superintendent Pete Lewis in a “state of the schools” address to the Fairbanks Chamber of commerce yesterday.  Lewis described the $206 million operating budget as unsustainable.

Lewis said those decisions will be made by the school board and administration with input from the public.  He attributes the budget problem to rising costs and a reliance this year on one time funds.

Lewis says the district needs to work away from up and down, year to year budgeting.  He says a series of public budget forums will be held around the district next month to identify funding priorities.