Photo by Rashah McChesney/Peninsula Clarion Alaska LNG project manager Steve Butt talks to a crowd during the Kenai Peninsula Economic Development District's Industry Outlook Forum on Wednesday in Kenai, Alaska.

Local politicians speak at Industry Outlook Forum

Speeches from regional politicians opened and closed the 14th annual Kenai Peninsula Industry Outlook forum, held this week in Kenai’s Old Carrs Mall.

The forum’s first session began on Wednesday morning with speeches from municipal leaders.

Kenai Mayor Pat Porter, Kenai Peninsula Borough Mayor Mike Navarre, Soldotna Mayor Nels Anderson, and representatives from Seward, Seldovia, and Homer provided updates on their respective communities to the audience of industry and non-profit representatives.

Porter outlined her optimistic view of Kenai’s economy by citing a 6 percent growth in Kenai’s sales tax revenue in the last two quarters, a high level of occupancy in Kenai retail space, the stability of Kenai real estate, and a fishing industry that “provides seasonal jobs for over 500 individuals.”

Porter described Kenai’s residential growth as “amazing,” and said that “available homes and apartments are nearly non-existent” in Kenai because of the high demand. Porter said that in 2014, houses for sale in Kenai spent an average of 79 days on the market before being bought. That year, 95 homes were sold in Kenai, a 20-home increase from 2013.

Eight vacant lots in Kenai were sold in 2013, while 34 were sold in 2014 — a number that did not include Kenai’s 87 property sales to the Alaska LNG project.

To keep up with this growth, Kenai added two residential subdivisions this year.

Porter credited the increase in demand for Kenai property to development on the northern Kenai Spur Highway.

Speaking after Porter, Navarre opened his speech by thanking industry representatives for their “investment in our communities,” then spoke on borough programs, including hospital expansion.

At Tuesday’s borough assembly meeting, Navarre encouraged the assembly to appropriate $200,000 for consultation regarding health care cost reduction and hospital management.

In Wednesday’s speech, he described health care cost as “out of control.”

“(The appropriation) is designed to get our arms around health care, because it’s so important to us as local governments, as businesses, as residents,” Navarre said.

“It’s the single biggest expenditure we have in our nation, in our communities, in the borough, and in the state. … Somebody has to do something to fix it.”

In addition to borough programs, Navarre also remarked on state-level politics, which is he is involved with as the president of Alaska’s Conference of Mayors.

Navarre said that he and Soldotna councilor Linda Murphy, a member of the Alaska Municipal League, are “working to put together a group that will help the Legislature and Governor Walker in addressing the fiscal situation,” referring to the state’s $3.5 billion budget deficit.

“You’ll hear more about that in the upcoming weeks, as we get more toward the legislative session,” Navarre said.

“The important thing to remember is that we get a lot of benefit from state finances. … It’s important to keep in mind that as the state looks at where it will reduce and streamline the budget, there will be impacts on the local level. … We are not going to panic. We are going to work our way through it, and I’m still very optimistic, as I know all of you are, about the future of Alaska.”

The annual Community Economic Development Forum is a project of the non-profit Kenai Peninsula Economic Development District. Richard Roeske, executive director of the KPEDD, was in charge of organizing and recruiting speakers for this year’s event.

He said that the purpose of the forum was to allow the diverse businesses and other interests on the Kenai peninsula to communicate with each other.

“We get together and trade information,” Roeske said. “And it’s not just business cards. We sit down and talk.”

Roeske said that KPEDD wants to include both policy-makers and private enterprises in its discussions, and this goal was reflected in his choice of speakers at the forum.

He also chooses speakers based on what issues he thinks will be important that year.

“We’ll start looking for hot-button issues that are driving the economy, and try to get those people to come in and make policy and informational statements, so that we can get it into the community, get it disseminated through the media, so people will start talking about it,” Roeske said.

When asked what issues were at the focus of this year’s forum, Roeske said, “Obviously, it’s going to be ‘what does the state do with decreased revenues?’”

That question was addressed by state Sen. Peter Micciche, R-Soldotna, during his speech on Thursday. Micciche said that for the next session of the state Legislature, which will begin on Jan. 20, he has two goals: creating a slimmer budget and providing “available energy across a wider spectrum of Alaska at a reasonable price.”

These two goals motivated him to seek positions as the vice-chair of the finance committee and co-chair of the in-state energy committee.

Although Micciche said that the state is better off than in previous deficit periods due to its high reserve funds, he said that reducing the budget will be a “painful exercise” that requires “getting back to a sustainable menu of services that are within the government’s appropriate role.”

“My personal goal for this session will be a very slim capital budget and an 8 1/2 to 9 percent decrease in the operating budget,” Micciche said.

He plans to accomplish this goal by working for targeted spending cuts, rather than general cuts to all departments of the state government.

Micciche intends to reach his second goal of energy distribution by advocating the development of a “state-wide energy plan that divides the state into common socioeconomic geographic areas, quantifies the (energy) needs of those areas, and matches the most cost-effective available energy options to meet those electrical generation, space-heating, and industrial needs.”

“Across the spectrum, from mines to fish-processing plants to small commercial ventures, the dreams of Alaskans are most often not realized due to the reality of the scarcity and cost of energy,” Miccichie said.

Micciche suggested Norway and Japan as models for a better Alaskan energy distribution system, citing the diversity of energy options that those two countries used to overcome the difficulties of a mountainous, coastal geography­ ­— difficulties also present in Alaska.

“(Japan) has been operating a successful coastal LNG network for generations,” Micciche said. “We need to expand the distribution of other fuel such as hydro, LNG, coal in certain cases, biomass geothermal, renewables where appropriate, to move Alaska from a state dependent on one commodity to a diversified economy.”

A networking session followed Micciche’s speech, which was the last of the forum. Roeske said he has already begun to plan next year’s Industry Outlook Forum, to be held on January 28 and 29 of 2016, to which he hopes to bring speakers from Central Peninsula Hospital and the region’s Native corporations.

Reach Ben Boettger at ben.boettger@peninsulaclarion.com.

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