Conference comes up with bold recommendations as Walker readies for office

Gov.-elect Bill Walker over the weekend continued preparations to take office Dec. 1, with a member of his transition team asking top officials in the Parnell administration to submit resignation letters and more than 250 Alaskans attending a transition conference to lay out a policy roadmap for the incoming administration.

On tear sheets taped across classrooms at the University of Alaska Anchorage, experts and stakeholders in 17 areas including oil and gas, fiscal policy and health care made dozens of recommendations for Walker to consider, including suspending some of Alaska's long-pending mega-projects for a rigorous cost-benefit review and that efforts to raise state revenue consider other sources before the new oil-production tax is revisited.

Walker's staff has said the transition conference, typically held before a new governor assumes office, will cost about $150,000. The recommendations will be assembled in roughly two weeks or less, in a report to the new governor that will be publicly available, organizers said.

Walker said late Sunday he was looking forward to seeing the recommendations.

At the conference on Sunday, Bruce Botelho, former attorney general under Tony Knowles and a transition-team volunteer who won't work in the Walker administration, said he had issued a statement asking members of the Parnell administration to submit a resignation letter by Friday.

Gov. Sean Parnell had said in a TV news report he would not make that request himself, Botelho said. Such requests, however, are typical as a new administration comes in with new political goals.

Botelho's letter, distributed by state staff, will affect about 250 state employees, Botelho said. Some may be asked to stay.


"We're talking about commissioners, deputy commissioners, division directors, special assistants in the governor's office, there are some deputy division directors as well," he said. "This is in no respect unusual -- it's the nature of why we have elections."

Botelho said Walker's staff would work quickly to provide confirmation on whether employees are staying or going.

"We will be doing reviews to determine who will be asked to leave immediately, probably a fairly small group," he said. "We understand the stress."

Walker had said during the campaign he planned to eliminate Parnell's Natural Resources director Joe Balash, who had accused Walker of secretly lining his pockets while working for the municipal-supported Alaska Gasline Port Authority, and Parnell chief of staff Mike Nizich, who has helped field complaints related to the long-brewing Alaska National Guard controversy.

Boteleho said that in determining who stays, "We'll try to be systematic, and careful. Governor Walker has put a premium on integrity, competence, and obviously (that people) in general support his views on where the state should be going."

As for the conference, delegates from around the state -- some polar opposites in their views -- worked for two days to find common ground after the event began Friday night with a gloomy look at the $3 billion deficit Alaska faces because of falling oil prices.

As much government transparency as possible, something Walker called for during the campaign, was a goal frequently mentioned in the committees.

The health care committee's top recommendation was expanding Medicaid, something Walker had promised to do on the campaign trail.

Such an expansion would provide health insurance for 40,000 Alaskans who don't have it, said committee co-chair Valerie Davidson, senior director of intergovernmental and legal affairs for the Alaska Native Tribal Health Consortium.

"These are our friends, our neighbors, our families," she said. "We all support Alaskans leading productive lives and contributing to our economy. People can't work, they can't hunt and fish when they're not healthy, and this is a way to get them there."

Speaking with a reporter late Sunday, Walker said he is seeking to determine whether Medicaid expansion will require legislative approval. Though the federal government will fully fund the expansion for now, the state would have to bear some of the costs to implement expansion, which could require legislation.

Walker said he was working on determining the "appropriate" path, but that whatever the course, he would immediately take first steps to expand Medicaid after his inauguration in Juneau a week from Monday.

In one classroom at UAA, the fiscal policy committee recommended temporary suspension of several mega-projects and a state corporation so they could be closely reviewed by the governor to determine if they should go forward in the new and challenging fiscal environment, said Brian Rogers, the head of that committee and chancellor at the University of Alaska Fairbanks.

Those projects were listed on a large tear sheet at the front of the room as the Knik Arm Bridge, the Juneau Access Road, the Alaska Stand Alone Pipeline, the Susitna-Watana Hydroelectric Project, the Ambler Access Road, and the Alaska Aerospace Corp.

Among other recommendations, the group also wants the governor to balance the budget by the end of his term.

The oil and gas committee in another room was led by attorney Robin Brena, who has fought the state and oil companies to increase the valuation of the 800-mile trans-Alaska pipeline that delivers the crude oil that pays for most of state government.

The committee recommended maintaining momentum on the Alaska LNG project that Parnell put together in collaboration with four major energy companies, but recommended Walker expeditiously review the project, portions of which are confidential to the public. Walker said during the campaign he would halt the project if it's not good for Alaska.


Final approval -- when the entities decide whether to fund the $45 billion to more than $65 billion project --- is not expected for another four years. First production would not come for at least a decade, according to a project timeline.

Kara Moriarty, executive director of the Alaska Oil and Gas Association was also part of the oil and gas committee.

"We found alignment on more things than we didn't," she said, including the LNG project, the need for lower energy costs, and ways to enhance oil production. The group met for two days, including 10 hours on Saturday, in a civil, professional and strenuous effort to find agreement in key areas.

Moriarty was pleased with the recommendation that the governor look for other sources of revenue before re-examining Senate Bill 21, which stabilized taxes on oil producers and lowered them when oil prices are high and went into effect earlier this year.

"The governor has told (industry leaders) he won't fix what's not broken, and we believe the current tax structure is working," she said, adding that it has led to more investment, production and activity in the state's North Slope oil patch.

"Yes, the state is going into budget deficits," Moriarty said. "But with declining oil prices, (development) capital is going to be constrained, so it's more important than ever to have a competitive tax structure."

She said she was disappointed with another recommendation: That the state should be able to force companies that own pipelines or processing facilities to open their facilities to other companies if the two sides can't find agreement on fees or other terms.

"In our mind the state should not get involved in negotiating when two commercial parties can't reach agreement," she said.


The subsistence committee, dealing with another long-divisive topic in Alaska, also found common ground in some key areas.

Committee member Rod Arno, executive director of the Alaska Outdoor Council, said he has been part of four transition efforts over the decades, and this was the best one.

"The neat thing is we had people talking to each other that weren't before," something that will have to continue if Alaskans are to resolve the long-running legal battle over subsistence, he said.

His committee did something that has never happened in the transitions he's been involved in: Agreed to support a unified system to manage subsistence uses of wildlife, in place of the current dual-management system run by the state and federal governments.

The unified system would have the federal government, the state and tribes cooperatively managing the use.

"There's no reason there can't be cooperative management, if the state can sit down with tribes and come up with something the feds agree to. That's the bright crack under the door," said Arno.

Arno sat near John "Sky" Starkey, the committee's chair and an attorney who has often tangled with the state and the outdoor council to fully protect the subsistence priority granted to rural residents under federal law.

Arno said a key difference with this transition conference and others for past governor-elects is that no state officials attended.

"I'm pretty pleased," said Arno. "I have to hand it to Walker and his team. This is the best group I've been on in three decades because he didn't fill these committees with state agency and department people who say, 'No, you can't do that.' "

The subsistence committee ended with a prayer in Yup'ik delivered by Robert Nick, a subsistence fisherman from a Southwest Alaska village. As about 10 delegates stood with bowed heads, Nick asked the creator to help the incoming governor make wise decisions.

Alex DeMarban

Alex DeMarban is a longtime Alaska journalist who covers business, the oil and gas industries and general assignments. Reach him at 907-257-4317 or alex@adn.com.