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2002-03-28 Economic Specialist Reportc '_"'""'""b, ~' ~"'~r'"'~`~ ECONOMIC DEVELOPMENT SPECIALIST ' ;~ ~~ REPORT ~ Kodiak Island Borough Work Session 2, ~ ~ March 28, 2002 x ,-a-....~...+ ~-...~ ~`~~~ floCC -'v`~:aE~ pr~c~ntl~ivdfl~i~g~ith fthe Kodiak Island Borough School District on a date for a NFTE iS`zCainp"to be held for stucTerits living in the outlying communities. Last January, we hosted a business camp for the Alternative High School Students in Kodiak. In September 1999 we hosted the camp for students from the villages on Kodiak Island. To the best of my knowledge, Kodiak is the only location in Alaska to have hosted this program. Kodiak Community Profile & Economic Indicators The Chamber continues to publish the 27-page Kodiak Community Profile, which is updated on a quarterly basis. The profile is available in hard copy or on the Kodiak Chamber of Commerce website at www.kodiak.org Kodiak Chamber of Commerce and Kodiak Island Convention and Visitor's Bureau Website The site has seen an increasing volume of traffic, now up to about 850 "hits" per day. To date we have had just over 900,000 hits on our website. Thousands use the site each month to find business information and to plan trips and visits. We aze always looking at ways to improve the site and aze in the process of developing a method that would allow members to update their own listings. Based on feedback from those people accessing our website, we need to provide more information, especially photographs, of the outlying communities. I have contacted each municipal council to provide material that can be loaded to the site. Plans aze underway to incorporate a "Business Opportunities" page. We recognize the need to get the word out on what business opportunities are available in Kodiak, e.g. Seazs outlet, Drivers Education Instructor, bookstore, medium- to high-end clothing store. Village Training Needs Assessment We have formed a committee comprised of representatives from Kodiak College, KANA, Kodiak Island Housing Authority and the Chamber to develop training options. We will be meeting with Dr. Ed Forrest, University of Alaska to develop a method by which to obtain information on the training needs in the outlying communities. Foreign-Trade Zone twwiier~ee Thirteen sites have been designated as FTZ's but to date none have been activated. We have until Mazch 2003 before the certification expires. I have been in contact with National Association of Foreign Trade Zones, Washington D.C. to determine what steps we need to take to protect our status. In order to maintain our status, we' need to activate a site, even if no activity takes place within the site. In 1995-96, the application and certification process, paid for by Alaska Aerospace Development Corporation cost approximately $25,000. Comprehensive Economic Development Strategv (CEDSI Committee The Comprehensive Economic Development Strategy document is now accessible on-line at www.kodiak.org We are in the process of evaluating the performance and functions of the Comprehensive Economic Development Strategy (CEDS) Committee. The goal of the CEDS Committee is to be action-oriented and productive and we need the input and ideas of all of our members to make it work. One area of concern that we have identified is the sporadic and somewhat limited participation by the leaders in the outlying communities. Often the weather makes air travel difficult, or circumstances do not allow for an entire day(s) to be spent away from home/office/work, etc. We are proposing the utilization of teleconferencing tec~olog~. r Teleconferencing is not intended to replace physical attendance at the meetings, bl~itY ~r to provide a means by which more people can participate in the meetings. Funding Summit 2001 Together will KANA and Koniag Inc., the Kodiak Chamber of Commerce hosted a 3-day Funding and Jobs Summit on December 12-14 at the Kodiak College. The goal of "Funding Summit #2" was to follow up to last year's Summit by taking the projects identified a step further. In conjunction with the Funding Summit, we hosted a Jobs Summit. State project owners, contractors and training providers discussed public projects scheduled for Kodiak Island in the next three yeazs. The goal of the Jobs Summit was to assist residents in the region obtain required training to access the related construction jobs. Grant Writing Workshop Based on feedback from village residents during the Funding and Jobs Summit, KANA and the Chamber sponsoring atwo-part grant writing workshop for members of the outlying municipalities and the tribal councils. The first part was aone-day training session held at Kodiak College to go over the basics of grant writing and grant management. The second part of the training is taking place this week in the villages with hands-on review of grants that the cities and tribal councils are currently working on. Grant Writing and Grant Management Training I attended atwo-day grant writing class and afollow-up grant management class at Kodiak College. The classes were very informative and took a "hands-on" approach to successful grant writing. Fiber Optic Proiect Under sepazate cover Southwest Alaska Municipal Conference (SWAMCI As a board member, I attended the SWAMC Winter Conference held in Anchorage last month. Many informative sessions were held on regional fishing, transportation, tourism and economic development issues. Resolutions supporting crab rationalization in the Bering Sea, endorsing national recognition of the Alaska Marine Highway as a national scenic by-way and supporting legislation granting tax credits for investment in the production of value added salmon products were passed during the Conference. Port Lions Proiect The grant application for funding to cover a feasibility study through the USDA Rural Development Community Facilities Program was unsuccessful. I will be contacting the Department of Community and Economic Development to apply for aMini-Grant which, if successful, will be awarded in October. . Grist Mill and Bakery Proiect I am in the preliminary stages of a project working with~Reed Oswalt, the borough and the Department of Fish and Game. Plans aze to construct a gristmill and baker's oven on the site where the original gristmill was located on Island Lake creek that flows into Mill Bay. f GUIDELINES FOR THE LAPSE PROVISION, FTZ ACTIVATION AND REINSTATEMENT ACTIVATION DEFINED A zone grantee which will have reported in its annual report to the FTZ Board the receipt of shipments under FTZ procedures (and under Customs activation approval) at any time prior to November 8, 1996, and thereafter within five years of the issuance of the grant of authority for the zone or subzone, is deemed to have fulfilled the FTZ activation requirement. A zone project at which no shipments have been actually received under FTZ procedures, but which is active in offering FTZ services to the public, may alternatively fulfill the FTZ activation requirement by: (1) obtaining Customs activation approval under Section 146.6 of the Customs regulations (19 CFR Part 146) from the Customs Port Director for the area; (2) submitting a zone schedule to the Executive Secretary of the FTZ Board and to the Customs Port Director pursuant to Section 400.42(b) of the FTZ regulations; and, (3) notifying the Executive Secretary in writing upon the completion of (1) and (2) that the zone is open for business. The fulfillment of the requirements in either of the two preceding paragraphs constitutes ' 'FTZ activation" for purposes of the ' 'lapse provision" and it preserves active FTZ authority for all general- purpose zone sites in a zone plan. Subzones are individually subject to the requirements. REINSTATEMENT PERIOD During the 18-month period following a lapse of authority (' 'reinstatement period"), zone grantees may apply for reinstatement of FTZ authority for general-purpose zone sites and for individual subzones upon .completion of the FTZ activation requirements during that period. Grantees should notify the Executive Secretary when steps are being taken to qualify for reinstatement. During the reinstatement period, the authority for the affected zone or subzone is considered lapsed, unless and until reinstatement occurs. Termination of authority would occur at the end of the 18-month reinstatement period for a zone or subzone not reinstated during the period (as noted below, under certain conditions, grantees may request that the processing of certain pending applications be continued during this period). Upon termination of authority, zones and subzones affected will be dropped from lists maintained by the FTZ Staff and published in the FTZ Board's annual report. GUIDELINES 1. A zone which had been in FTZ activation at any time and for any length of time within the applicable time frame (i.e., prior to the lapse date) is not affected by the lapse provision. 2. The FTZ activation of any part of ageneral-purpose zone or a subzone will suffice to preserve FTZ authority for all of the general- purpose sites of a zone project, but not for any particular subzone which has not been activated. Thus, each subzone is considered separately. (The lapse of authority for a subzone does not affect the basic authority of a zone grantee which has otherwise met the FTZ activation requirements.) 3. The starting time for tolling whether a lapse of authority has occurred will be from the time of the original grant of authority for a zone project, and it will affect all general-purpose zone sites and subzones associated with the project, however recently approved. With regard to a zone project which meets the activation requirements but has inactive subzones, the starting time for tolling such subzones will be from the time of the original grant of authority for the subzone. 4. Applications submitted to or pending with the FTZ Board or the FTZ Staff from any affected zone shall become inactive if zone authority lapses, but the processing of such applications may be resumed upon written request of a zone grantee made within 90 days of a lapse of authority if the site involved in the application is part of an activation plan. (New applications may be considered for acceptance for filing under the same conditions, except that applications for minor modifications to zone projects under Section 400.26(c) proposing changes that are part of an activation plan may be so considered up to 60 days prior to the end of the reinstatement period.) 5. FTZ activation of ageneral-purpose zone or subzone may be determined by the Board to extend to separate, but related, general- purpose zones or subzones approved for the same grantee if the projects were approved in the same Board action or if the projects are 2 significantly interrelated in terms of their administration as an element of state/regional/local economic development programs (in the case of subzones, if the sites are administered as a unit by the subzone company), providing that the Customs Port Director for the area concurs. CONFIDENTIAL ' Fiber Optic Project As part of our efforts to improve the telecommunications capabilities on Kodiak Island, the Kodiak Chamber of Commerce has been investigating the possibility of accessing a reliable high bandwidth route. This includes assessing the telecommunications needs of local business, government, medical entities, and education organizations. One of the mandates of the Kodiak Chamber of Commerce is to attract new businesses and to improve the existing environment for those businesses currently operating on Kodiak Island. We feel our ability to attract new ventures to Kodiak Island is substantially limited by our present satellite-based communications systems. Having terrestrial connectivity will allow business, government, medical and education entities greater access to bandwidth intensive applications such as PC-video conferencing from home and office, enhanced video services, distance education and telemedicine. Residential users will notice the absence of delay commonly found in satellite-based telephone calls, and should experience faster throughput speeds on Internet and data applications. In order to determine if in fact there is a need for more bandwidth on Kodiak Island, a survey was developed to determine present requirements, as well as 5-yeaz and 10-yeaz forecasted requirements (see attached). The survey was sent to thirty local businesses/organizations, including the City of Kodiak, Kodiak Island Borough, Kodiak Island Borough School District, Providence Kodiak Island Medical Center, Kodiak Area Native Association, US Coast Guard, Kodiak Launch Complex, National Marine Fisheries, Fishery Industrial Technology Center, Kodiak College, local banks and insurance companies, and large retail businesses. To date, twenty responses have been received and passed along to the service provider who has contracted with Pirelli Jacobson, Inc. to explore the potential of laying a fiber optic cable from Seward to Kodiak. Of the surveys returned, 80% indicated that they would be interested in utilizing expanded bandwidth, and most forecasted increased bandwidth needs within the next 5 to 10 year period. One common concern expressed by the respondents was the cost associated with the increased service. We have met regularly with the major parties involved in this $20 million project including the potential service provider, the engineering firm that has been contracted to design the project and the marine surveyor who will be instrumental in determining the most efficient route. Factors such as the 3-mile limit on sea lion haulouts and rookeries and avoidance of the most heavily fished areas are being taken into consideration in the mapping of the cable. Our assistance has been offered in every phase of the process. The project has not yet received a final "go-ahead" status. If events go according to plan, the marine survey will be conducted and core construction with armor configuration will follow (Apri12002). The cable construction guidelines are to be set by the end of May. Installation is scheduled to begin late August/eazly September. The cable will run from the head of Resurrection Bay in Seward to the head of Mill Bay in Kodiak. Attached please find a copy of the Public Notice Easement Application published by the Alaska Dept of Natural Resources, Division of Mining, Land and Water Southcentral Region. In the notice the Division proposes to issue a 25-year, private, non-exclusive easement to Pirelli- Jacobson, Inc. for a submarine fiber optic communication cable between Kodiak and Sewazd. BANDWIDTH NEEDS SURVEY Organization• Contact Person° 1. If a reliable high bandwidth terrestrial (fiber optic, copper cable or microwave radio) route were available off Kodiak Island, would you be interested in utilizing that expanded bandwidth? Yes No Unsure Bandwidths are currently tariffed by the Regulatory Commission of Alaska and aze not likely to change. Current tariff prices for terrestrial (not satellite) bandwidth aze as follows: ~ 56kbs circuit $1,637.80 per month (satellite) ~ 1.544 DS 1 $43.75 x 271 miles ($11,856.25 per month) ~ DS3 $456.75 x 271 miles ($123,799.25 per month) 2. Assuming that bandwidth costs remain the same, but capacity is increased beyond what is available on the satellite routes, what would your initial requirement be? • In 56kbs circuits • In 1.544mbs T-1's • In DS3 circuits 3. In 5 years will you require more bandwidth? • In 56kbs circuits • In 1.544mbs T-1's • In DS3 circuits 4. In 10 years? • In 56kbs circuits • In 1.544mbs T-1's • In DS3 circuits Comments Return to: Kodiak Chamber of Commerce PO Box 1485 100 Marine Way, Suite #300 Kodiak, AK 99615 Fax: 486-7605 Alaska Department of Natural Resources Division of Mining, Land and Water Southcentral Region PUBLIC NOTICE EASEMENT APPLICATION ADL 228146 Pursuant to AS 38.05.850, the Division of Mining, Land and Water proposes to issue a 25-yeaz, private, non-exclusive easement to Pirelli-Jacobson, Inc. (PJI) for a submarine fiber optic communication cable between Kodiak and Seward. The route segments on State-owned tide and submerged land are: from the Kodiak landing site at the head of Mill Bay, ~5.3 mi. northeast to the 3-mile limit east of Spruce Island; from submerged land owned by the City of Seward at the head of Resurrection Bay, south along the center of the bay (as close as feasible to an existing cable) for 30.5 mi. to the 3-mile limit east of the Aialik Peninsula; within the 3-mile limit for ~4 mi., southeast of Seal Rocks in Blying Sound. The'/~-2" diameter cable would be buried in the "sea floor wherever possible. The cable would be laid with conventional trenching equipment on the tidelands at Mill Bay and with aself-propelled vessel towing a submarine plow offshore. Installation would take place during August and September of 2002. While cable is being laid, mariners would be asked to stay cleaz from the cable vessel 1000', or up to 2 mi. if actively fishing. The easement would apply only to use of State-owned tide and submerged lands. You are invited to comment on the preliminary finding and decision. Please submit comments in writing to my attention at the letterhead address. Please contact me at 907-269-8562 or neil_huddleston@dnr.state.ak.us with questions about this action or to obtain a copy of the preliminary decision. Deadline for comments is 5:00 p.m., April 19, 2002. If no significant changes are proposed, this decision will become the final finding and decision to authorize this project. To be eligible to appeal the final decision, a person must provide written comments during the comment period. A copy of the final decision and an explanation of the appeal process will be sent to any person who comments on the preliminary decision. The State of Alaska complies with Title II of the American Disabilities Act of 1990. Individuals with disabilities who may need auxiliary aids or services to respond to this notice may contact the DNR Public Information Center from 10 a.m.-5 p.m., M-F, at 907-269-8400 or TDD: 907-269-8411. CHANGES IN THE AREA ECONOMY Seafood Kodiak remains one of the top three fishing pots in the USA in terms of value of fish landed. In 2000 Kodiak ranked sixth in volume of fish landed. In 2000, 289.6 million pounds were landed at a value of $94.7 million compared to 1999 when 331.6 million pounds of fish were landed with a value of $100.8 million. Figures are not yet available for 2001. Employment Kodiak's average unemployment rate in 2001 decreased to 9.0% from 9.8% reported in 2000. The unemployment rates for 2001 went from a low of 4.7% in July to a high of 13.7% in December. Kodiak Island'Borough Unemployment Rates January 1999 to Oecember 2001 20 is 16 1a 12 0 ,;; 10 to ~ g 6 4 2 0 rn m g o 0 0 ~ ~ ~ m a > c ~ >. ~ a > ~ _ to Z -~ ~ g '-' to Z ~ ~ ~ ~ v~ z° b o ° 0 0 0 i monthly 12 month average rn rn rn rn rn rn $ o 00 0 o c ~ ~ ~ n c Population According to the Census 2000 data, the population of the Kodiak Island Borough is 13,913, remaining virtually steady since 1996 when the estimated population was 14,058. Kodiak Island Borough Population ~~~ O N ~ CD 00 O N '7 CD O O 00 00 O O O a7 O O m O O O O O O Q1 O O) O O O O r T r T T T T T T T N ,, Cost of Living According to the American Chamber of Commerce Researchers Association (ACCRA) the cost of living continues its downward trend in comparison to other U.S. cities. Of the areas surveyed, Kodiak's composite cost of living for the fourth quarter of 2001 was approximately 28% above the national average. At the same time last year, Kodiak's cost of living was 30.9% above the national average. The change is not an indication that prices in Kodiak have dropped since last year, merely that Kodiak prices did not go up as rapidly as in other urban areas in the U.S. How do we compare to other areas in Alaska? For the same time period, Juneau was 36.4% and Fairbanks 19.4% above the national average. Kodiak's cost of living has also dropped in comparison to Anchorage from 5% higher in the fourth quarter of 2000 to 3% higher in the fourth quarter of 2001. Kodiak Cost of Living ACCRA 1st quarter 1998 - 4th Quarter 2001 National Average =100 150 ~ I 140 I 130 I 120 t 110 fi- ---, -- ~-- -T--,-----~~-r-~-T-- ~ -, 00 O L O ~ o0 O L GO 01 O O O O O O O 01 01 ~1 ~ O O O L L L L L L O O L r O L r O L r r O O L L Q ~ Q Q Q ~ Q Q Q Q Q 0 Q Q ~ Q ~ r- C N L ~ r~.~ N ~ L w N C L ~ r N ~ !f r CV M *+ ~' N r ~ N L rt+ M 'et' SBIfS f Gross sales receipts within the City of Kodiak for fisca12001 have increased 1.5% from that reported for fisca12000. Retail sales have increased steadily from 1999, going up 30% in 2000 and 1.6% in 2001.