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P E N I N S U L A
Monday, September 17, 2018 Kenai Peninsula, Alaska
Vol. 48, Issue 300
In the news University of Alaska regents consider $351.5M budget FAIRBANKS — University of Alaska officials are considering a proposed operating budget of $351.5 million for the next fiscal year. The Fairbanks Daily News-Miner reports the university’s board of regents proposed the budget for fiscal year 2020 during a two-day meeting in Juneau last week, increasing by $24.5 million from the current budget. Regents had identified the university’s budgeting needs during a June retreat. In settling on the budget proposal last week, the officials considered how the university could organize to be successful 20 years down the line. The regents also proposed a capital budget that includes $50 million for the university’s deferred maintenance and $5 million for the USArray program, a system of seismic sensors that collects data on ground movement across the state.
Teachers, district agree to mediator after stalemate ANCHORAGE — The Anchorage School District and teachers’ union have agreed to bring in a federal mediator after contract negotiations stalled last week. The Anchorage Daily News reports that officials from the Anchorage Education Association and the school district say they’re hopeful an agreement will be reached with the help of a mediator from the Federal Mediation and Conciliation Service. The union, which represents about 3,300 educators in the city, is seeking for teachers to have a greater voice in the selection of curriculum and programs, as well as more autonomy in the classroom. The union has also been at odds with the district over salaries and health benefits. Union head Tom Klaameyer says a mediator was brought in 2012, helping the sides reach a three-year contract agreement.
Cannabis industry raises concerns over state marijuana board regulations By VICTORIA PETERSEN Peninsula Clarion
Cannabis cultivators, retailers, consumers squeezed into a small Kenai living room Wednesday night to discuss ongoing problems within the marijuana industry and to come up with solutions to address them. Amy Jackman, a cannabis business consultant with AK Canna Connection, and Dollynda Phelps, co-owner of Nikiskibased Peace Frog Botanicals, a limited marijuana cultivation company, organized the meetup to prepare for the upcoming Alcohol and Marijuana Control Office meeting, which will be held in Kenai for the first time. “It’s so important that we can all come together for this meeting,” Phelps told the crowd on Wednesday. “I think it’s important that we participate, and that everyone who can show up, should show up. I want to draw everyone else’s concerns so everyone can refine their comments and we can be as effective as we possibly can to convey our messages and need.” Phelps began the discussion with issues she plans to bring up at the Alcohol and Marijuana Control Office: the need to trim testing and application
The open sign for Uncle Herb’s, Homer’s first marijuana retail store, lights up on opening day, Thursday, May 24, 2018 on Ocean Drive in Homer, Alaska. (Photo by Megan Pacer/Homer News)
review times. On Aug. 15, amendments were made to a regulation that determines the testing of products not sold to retail. Phelps said the amendment places an unnecessary financial burden on small cultivators. “I believe the small cultiva-
tors are the backbone of the industry,” Phelps said. “This (regulation) will put us out of business.” Phelps also brought up issues with the amount of time it takes for a license application to be reviewed. Phelps told the group she submitted an appli-
By KEVIN GULLUFSEN Juneau Empire
Magical mystery tour The autumn tones of the Mystery Hills sit above the Sterling Highway on Sunday on an overcast day. The forecast calls for similar cloudy conditions, with highs in the upper 50s and lows in the lower 40s, throughout the rest of the week as autumn colors reach their peak. (Photo by Jeff Helminiak/Peninsula Clarion)
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cation for a license on March 30. Per state statute, the office should take 90 days to issue a license. “I’m still like number 17 in the queue of under review,” Phelps said. “They haven’t even looked at my application yet.”
Phelps turned over the discussion to the crowd and asked people to list any concerns they might want to bring to public comment at the October meeting. Among the issues brought up were video footage retention, on-site public consumption and festival permitting. In Alaska, cannabis businesses must have a certain number of cameras and must retain video footage for 90 days. In other states, like Washington and Colorado, retention time is typically under 45 days. When AMCO requests footage from proprietors, they have three days to send the footage to the office. Patricia Patterson, owner of High Bush Cannabis, said it took over a week to download 40 days worth of footage. “If we need to get video to them, by law they have three days,” Patterson said. “I can’t download 40 days (worth of footage) in three days. We are already going to fail. My license will be taken away if they call and need any video.” Patterson has eight cameras. For standard cultivators, who can have more than 30 cameras, the download time would take much longer. See AMCO, page A2
Canadian mine cash crunch could affect state waters
— Associated Press
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Anchorage school district paying consultants amid investigation ANCHORAGE (AP) — The Anchorage School District is paying a public relations firm $12,000 a month to help it properly release information regarding a sexual assault investigation involving Dimond High School students. Allegations of hazing and sexual misconduct involving Dimond High School’s football team were reported to police last month, the Anchorage Daily News reported . Strategies 360 will help the district get clear and transparent information out to students’ families and the public, Superintendent Deena Bishop said in a statement. A memo that a district spokes-
woman emailed to the Anchorage Daily News Thursday states that Strategies 360 is charging $12,000 a month, with the first month of work going from Aug. 27 to Sept. 27. The memo states discussion of a longer-term agreement, if necessary, would follow. Some members of the Anchorage School Board said they support the district’s decision to hire the firm or didn’t object to it. “I’d rather spend $12,000 or $20,000 on a PR firm that will help us appropriately filter — say what we can, redact what we can’t — then have somebody go and open their mouth and we have a $1 million lawsuit,” said Elisa Snelling, a board member.
Anchorage School District spokeswoman Catherine Esary would not say what work the public relations firm had done for the district so far and from what pool of money the fee will come. The incident involving the football team was reported to Dimond High staff on Aug. 20, the first day of school. A mother of a player told KTUU-TV that several older players allegedly sexually assaulted younger teammates during the overnight stay in Fairbanks on Aug. 18. The school has since fired three football coaches, including the head coach, and disciplined students. The superintendent has not said how many students were involved.
With a strike, falling copper prices and more than $554-million ($723 million Canadian) soon due to lenders, Canadian mine owner Imperial Metals, which operates the Red Chris Mine in the transboundary Stikine River watershed, is in dire financial straits. The mine’s financial situation — and its lack of bond money for environmental reclamation at the site — has unearthed questions about what will be done to keep its tailings pit from leading pollution into the Stikine River, which supports an average annual run of about 40,000 adult Chinook salmon. Cash crunch Imperial’s woes have been widely reported, but Canadian magazine The Narwhal dove deep into the particulars in an August article. Thomas Schneider is an expert in financial reporting of environmental liabilities and a professor at Ryerson University in Toronto. Schneider was a source in the Narwhal article and spoke to the Empire recently describing the situation. On Oct. 1, Imperial Metals will have to renegotiate or pay a $153 million ($200 Canadian) credit facility — basically a loan from investors, Schneider said. That’s just the first of a series of credit facilities that mature between now and March, totaling $554 million. “They have a big, big cash crunch ahead of them,” Schneider said. Imperial Metals didn’t return requests for comment for this story. In their most recent quarterly report, they didn’t make any assurances that they’d be
able to meet their debt obligations. “There can be no assurance that the Company will be able to successfully extend or renegotiate this debt, and that adequate additional financing will be available on terms acceptable to the Company or at all, which creates a material uncertainty that could have an adverse impact on the Company’s financial condition and results of operations and may cast significant doubt on the Company’s ability to continue as a going concern,” the company wrote. Translation: the debt threatens the Imperial Metals’ ability to function in its current state. Schneider said he wouldn’t want to speculate whether the mine will go bankrupt, but financial indicators show that it faces an uphill battle to stay in operation. A two-month strike this summer from a steelworkers union at Mount Polley Mine, which Imperial Metals also owns, cost the company about $28 million, according to media reports. Imperial owes about $57 million a year ($75 million Canadian) in interest payments, Schneider said. Imperial doesn’t have the cash flow right now to pay that interest, and it’s been paying some of that interest in company shares, diluting its stock prices. It’s stock price has fallen from a high of $18.34 in 2014 to $1.14 at press time. “It’s always a bad sign when you pay interest by issuing shares because they don’t have enough cash to pay interest,” Schneider said. What would bankruptcy mean? B.C. mine regulators estimate that the Red Chris is on the hook See MINE, page A2