2018 Kenai Peninsula Situations & Prospects Report
Kenai Peninsula Economic Development District www.kpedd.org (907) 283.3335 Pictures on front cover courtesy of: USDA Forest Service Alaska Alaska Department of Labor and Workforce Development Frank Kovalchek City of Homer City of Soldotna
Research, analysis, and the 2018 Situations & Prospects Report by Sheinberg Associates, a Community & Strategic Planning & Research firm, www.SheinbergAssociates.com
Average Annual Daily Traffic Location Map prepared by Alaska Map Company www.akmapco.com
Kenai Peninsula icons by graphic artist Averyl Veliz averylveliz.blogspot.com
Leadership to enhance, foster, and promote economic development
September 2018
Dear Readers,
The Kenai Peninsula Economic Development District, Inc. (KPEDD) is pleased to issue the 2018 Situations and Prospects for your business, agency, or non-profit’s decision-making.
In this report you will find a complete 2017 dataset of information, making this the most current and comprehensive review of the Kenai Peninsula’s economy and relevant metrics available.
KPEDD’s mission is to provide leadership in enhancing, fostering, and promoting responsible and sustainable economic development. In order to achieve this goal KPEDD has adopted the acronym of SAVE - Sustainable, Accountable, Visible, and Efficient.
We hope you find the 2018 Situations and Prospects report will SAVE you time and help with your business decisions. It is available to download - - - along with a variety of other documents you will fund useful - - - at our website www.kpedd.org. There, you will find economic data and indicators available in an easy-to-use platform.
Stay in touch --- come by our office at mile 14.5 on the Kenai Spur Highway, give us a call at 283-3335, or email Tim anytime at [email protected] to see how we can assist you in meeting your business needs.
Todd Smith Tim Dillon President, Board of Directors Executive Director
KPEDD Board of Directors Todd Smith, President Chris Hough Bruce Richards, Vice President Karin Marks Tim Redder, Treasurer Sue McClure Rachel O’ Brien, Secretary John Czarnezki Elizabeth Appleby Hal Smalley Cassidi Cameron Bryan Zak
Acronym Guide AADT Average Annual Daily Traffic ACS American Community Survey ADEED Alaska Department of Education and Early Development ADF&G Alaska Department of Fish and Game ADOLWD Alaska Department of Labor and Workforce Development ADOR Alaska Department of Revenue ADOT&PF Alaska Department of Transportation and Public Facilities AHFC Alaska Housing Finance Corporation AIDEA Alaska Industrial Development & Export Authority AMHS Alaska Marine Highway System AVTEC Alaska Vocational Technical Center BEA Bureau of Economic Analysis BRE Business, Retention and Expansion CAH Critical Access Hospital CDP Census Designated Place CDQ Community Development Quota CFEC Commercial Fisheries Entry Commission CI Cook Inlet CMS Centers for Medicare and Medicaid Services CPH Central Peninsula General Hospital DCCED Department of Commerce and Community Economic Development DCRA Division of Community and Regional Affairs EIS Environmental Impact Statement FAA Federal Aviation Administration FERC Federal Energy Regulatory Commission IFQ Individual Fishing Quota KIT Kenaitze Indian Tribe KPB Kenai Peninsula Borough KPC Kenai Peninsula College KPEDD Kenai Peninsula Economic Development District KPTMC Kenai Peninsula Tourism and Marketing Council LNG Liquid Natural Gas NAICS North American Industry Classification System NOAA National Oceanic and Atmospheric Administration NRCS Natural Resources Conservation Service ODB Occupational Database OCS Outer Continental Shelf PFD Permanent Fund Dividend Pre-FEED Pre-Front End Engineering and Design PK-12 Preschool through 12th Grade QCEW Quarterly Census of Employment and Wages SNAP Supplemental Nutrition Assistance Program SPH South Peninsula Hospital TAG Tax Authority Group UAF University of Alaska Fairbanks USCG United States Coast Guard USDA United States Department of Agriculture
Table of Contents
1 Executive Summary ...... 1 2 Population ...... 9 2.1 Population Change ...... 10 2.2 Migration to and from the Peninsula ...... 11 3 Education ...... 12 3.1 Kenai Peninsula Borough School District ...... 12 3.2 Post-Secondary Education | AVTEC and Kenai Peninsula College ...... 15 4 Housing and Cost of Living ...... 17 4.1 Price of Housing, Number of Homes Sold, and Rental Costs ...... 17 4.2 Number of Dwelling Units and New Construction ...... 20 4.3 Utilities and Food ...... 21 5 Movement of People and Freight ...... 22 5.1 Roads (Average Annual Daily Traffic) ...... 22 5.2 Ferries - Alaska Marine Highway System ...... 24 5.3 Marine Cargo and Freight ...... 25 5.4 Air Travel ...... 26 6 Income ...... 28 6.1 Total Personal Income to Peninsula Residents ...... 28 6.2 Sources of Income ...... 29 6.3 Per Capita Income ...... 30 6.4 Household Income ...... 31 6.5 Indicators of Economic Hardship ...... 31 7 Business Activity ...... 33 7.1 Gross Business Sales ...... 33 7.2 Taxable Business Sales ...... 35 7.3 Highest Value Properties on Peninsula ...... 37 8 Overview: Work on the Kenai Peninsula ...... 38 8.1 Workforce: Number of Jobs Declined, Number of Self-Employed Entrepreneurs Rose ...... 38 8.2 Wages and Earnings: Decline for a 2nd Year ...... 39 8.3 Top Sectors ...... 40 8.4 The Split between Private Sector and Government Work ...... 44 9 Resident-Nonresident Workforce ...... 45 9.1 Statewide Resident-Nonresident Worker Trends ...... 46 10 Industry Spotlight | Government Workforce ...... 47 11 Industry Spotlight | Tourism ...... 48 11.1 Business Activity, Workers, Earnings ...... 48 11.2 Sport Fishing, Charters and Guides ...... 54 12 Industry Spotlight | Oil, Gas, and Mining ...... 59
12.1 Workforce, Wages and Business Activity ...... 59 12.2 Number of Businesses in Oil, Gas and Mining ...... 60 12.3 Sector Trends, Issues, and Outlook ...... 61 13 Industry Spotlight | Maritime Sector ...... 63 13.1 Maritime Work ...... 63 13.2 Vessels, Boat Building, and Repair ...... 63 13.3 Maritime Workers, Wages, and Activity ...... 65 14 Commercial Fishing & Seafood Processing ...... 67 14.1 Commercial Fishing Activity at Kenai Peninsula’s Ports ...... 67 14.2 Commercial Fishing by Kenai Peninsula Residents ...... 72 14.3 Workforce and Earnings ...... 74 14.4 Cook Inlet Fisheries ...... 75 14.5 Sector Trends, Issues, and Outlook ...... 79 15 Industry Spotlight | Health Care ...... 81 15.1 Workforce, Wages, Business Sales ...... 81 15.2 Number of Businesses in Health Care and Social Assistance ...... 83 15.3 Resident Health on the Peninsula ...... 83 15.4 Sector Trends, Issues, and Outlook ...... 84 16 Industry Spotlight | Professional Services ...... 87 17 Industry Spotlight | Construction ...... 89 18 Industry Spotlight | Agriculture (Food, Peonies, Marijuana, and More) ...... 91 18.1 Number of Businesses in Agriculture ...... 91 18.2 Gross Business Sales ...... 92 18.3 Farm Income and Expenses ...... 93 18.4 Sector Trends, Issues, and Outlook ...... 93 18.5 Central Peninsula Agricultural Market Analysis ...... 95 19 Profiles: Borough and Cities ...... 97 19.1 Kenai Peninsula Borough ...... 98 19.2 City of Homer ...... 100 19.3 City of Kenai ...... 102 19.4 City of Seldovia ...... 104 19.5 City of Seward ...... 105 19.6 City of Soldotna ...... 107
Acknowledgements
In addition to the data, reports, and publications referenced in the 2018 Situations and Prospects, this report depends upon the information generously shared by the following individuals:
Albert Wall, Peninsula Community Health Services Anne Weske, Alaska Department of Revenue Bret Luick, Journal of Nutrition Education & Behavior Brian Lindamoot, Alaska Railroad Corporation Bruce Richards, Central Peninsula Hospital Cathy LeCompte, AVTEC Chad Helgeson, Hilcorp Energy Cindy Clock, Seward Chamber of Commerce Dale Bagley, Redoubt Realty Danielle Doyle, Alaska Department of Transportation and Public Facilities, Alaska Marine Highway System Debbie Speakman, Homer Chamber of Commerce Eddie Hunsinger, State Demographer, Alaska Department of Labor and Workforce Development Glenn Hollowell, Alaska Department of Fish and Game Heidi Chay, Kenai Soil and Water Conservation District Heidi Geagel, Seldovia City Clerk Jen Shiver, Alaska Department of Fish and Game Jeremy Rogers, Seward Light and Power Jim Greely, Alaska Department of Revenue Jim Hunt, Seward Harbors Karinne Wiebold, Alaska Department of Labor and Workforce Development Kelly Mazzei, Alaska Department of Revenue Kim Kane, AVTEC Kyra Wagner, Homer Soil and Water Conservation District Lalanya Downs, Cruise Lines International Assoc Larry Persily, Oil and Gas News and Alaska LNG project updates Laura Lingafelt, Kenai Peninsula Borough, Finance Department, Sales Tax Division Louanne Staton, Kenai Chamber of Commerce and Visitor Center Marcus Gho, Alaska Commercial Fisheries Entry Commission Matt Conner, US Fish and Wildlife Service Matt Murphy, Alaska Department of Transportation and Public Facilities Meg Mueller, USDA, National Resources Conservation Service Merril Sikorski, Homer Electric Association Mike Liddell, National Oceanic and Atmospheric Administration Neal Fried, Alaska Department of Labor and Workforce Development Nicole Dusenberry, Alaska Department of Labor and Workforce Development Rachel Smith, Alaska Department of Fish and Game Renata Bennett, TOTE Sara Hondel, Soldotna Chamber of Commerce Scott Waterman, Alaska Housing Finance Corporation Scott Winther, Alaska Railroad Corporation Sean Dusek, Kenai Peninsula Borough School District Superintendent Summer Lazenby, Kenai Peninsula Tourism and Marketing Council Tara Riemer, Alaska SeaLife Center William Romberg, Alaska Department of Fish and Game
1 Executive Summary
In 2017, Alaska experienced its 3rd year of recession; statewide per capita income, total wages, employment, and population all declined. Following suit, the Kenai Peninsula saw declines in each of these and some other areas. However, in some sectors, such as oil and gas, drops were significantly less percentage-wise than for the state as a whole. And, the Kenai Peninsula had a few bright spots in 2017 as well.
Negative economic indicators for the Kenai Peninsula in 2017 were flat population, declining total number of employees and a drop in both total income coming to Peninsula residents and in per capita income. The total number of employees dropped for the 3rd year in a row, though not as steeply as the year prior. Of note, the number of self- employed business proprietors (without employees) began to grow on the Peninsula coincident with the decline in wage and salary workers.
Workforce earnings - both from employee wages and self-employed proprietor earnings - were in decline for a 2nd year on the Peninsula as well as in Alaska. Gross business sales in Kenai Peninsula Borough dropped for construction contracting (5th year in a row of decline), administrative and waste management work, rental of residential properties (1st decline after several; years of growth), and for professional and scientific services. The oil and gas workforce (employees plus self-employed business owners without employees) and their earnings both declined, but barely.
Positive economic indicators for the Peninsula include gross retail sales rising to the highest level ever in 2017, breaking the billion dollar mark. Among contributing factors were higher prices of both natural gas and gasoline at the pumps, growing marijuana sales, and higher prices for salmon. Tourism was healthy despite declines in arriving ferry, cruise and air passengers in 2017. Gross sales were up in both land and water guiding activities (10 and 6% respectively) but declined in restaurant/bar and lodging sales (-2% and -1% respectively).
Economically, health care continued to be a stabilizing force both on the Peninsula and statewide. Despite 2017’s overall job and wage losses, health care jobs on the Kenai Peninsula, which is the area’s largest employer, grew as did employee wages and self-employment earnings. Gross sales also rose.
Of note, while a relatively small overall contributor, gross business sales in agriculture on the Kenai Peninsula, which had hovered around $3 million for a decade, doubled to over $7.7 million in 2017; this reflects increased business in growing food, peonies, and marijuana.
Finally, recent economic reports suggest that depending on the sector, the Alaskan economy “bottomed” out in late 2017 or at some point in 2018 and that business activity and employment is slowly turning around. Change is happening last in places with oil and gas activity or with large state employment. The price of oil is up in 2018, and despite efforts to move away from the state’s dependence on oil, when the price of oil rises the economy is unquestionably rosier in Alaska.
The remainder of this Executive Summary is a high level review of the economic data in this report. Refer to the specific report sections for details and all source documentation.
Population
Population on the Kenai Peninsula in 2017 was 58,024, essentially holding steady with a small decrease of 25, which was a drop of -0.04% or 4/100th of one percent. Statewide, population also fell between 2016 and 2017, declining by a larger -0.4% or 4/10th of one percent.
Population gains and losses are never uniform. Over the last five years, 12 of the area’s cities and places lost people while 26 grew. The city of Kenai and adjacent Salamantof together dropped the most, losing 214 residents over five
KPEDD 2018 Situations & Prospects page 1
years while Kalifornsky just to the south gained 227 residents. In addition to Kalifornsky, Sterling, the city of Homer, and Cohoe led population growth over the last five years.
The aging of the large baby-boomer cohort on the Kenai Peninsula shows up as an increasing number of seniors and seniors becoming a larger percentage of the total population. Growth in the number of those age 65 or older is expected to continue until about 2035 as long as health care, services, and housing that seniors desire and need are available.
The Alaska Department of Labor and Workforce Development (ADOLWD) most recent population projections call for the number of Alaskans ages 0 to 19, after being flat for about 20 years, to grow 3% by 2030 and 9% by 2045. For the Kenai Peninsula Borough, ADOLWD projects an even higher increase of 9% growth in the number of residents who are age 0 to 19 by 2030 and 14% growth by 2045.
Migration
Net migration to and from the Kenai Peninsula was -283 people in 2017. For the last five years Alaska as a whole has had more people moving away from, rather than to, the state. This is partly due to the strength of the Lower 48 economy compared to Alaska’s recession, which began in mid-2014.
Looking just at the movement of people within the state, between 2016 and 2017, net in-state migration was a positive 200 people to the Kenai Peninsula. The biggest gains were people moving to the Peninsula from Anchorage and Kodiak.
Education
The number of preschool through 12th grade youth enrolled in a Kenai Peninsula Borough School District (KPBSD) school declined by 114 students or 1% between October 1, 2016 and October 1, 2017. Enrollment changes were not spread evenly. Enrollment was flat or up slightly at schools in Nikolaevsk, Kenai, Homer, Seldovia, and Hope, and declined everywhere else.
The KPBSD continues to be a top performer in Alaska. KPBSD test scores and graduation rates beat state averages, dropout rates are lower, and a national school ranking website identifies it as the 10th top school district in Alaska in 2017-2018. Aurora Borealis Charter School (K-8) is ranked #2 elementary school in the state (out of 186) and #1 for middle schools (out of 96). Homer Middle School is ranked #6 statewide for middle schools. For high schools, Homer High is ranked #4 statewide out of 74 high schools.
In 2017, post-secondary enrollment by young adults increased by about 40 students on the Peninsula; Kenai Peninsula College had gains in the number of students and AVTEC had losses. State budget cuts are causing reduced class and program offerings.
Housing
All sources of housing information show that the availability and affordability of housing on the Kenai Peninsula is an asset and advantage for this region.
In 2017, 88 new dwelling units were built in the Peninsula’s five cities. This is the 3rd year of a drop in new home construction in cities. With a one-year exception, Homer has led in new home construction (among cities) for a decade.
The realtor’s Multiple Listing Service shows that in 2017, 776 dwelling units (of all types) sold on the Kenai Peninsula with the help of a realtor with an average sale price of $235,097. Homes were on the market an average of 4.5 months (135 days), which was 30 days less than in 2016.
KPEDD 2018 Situations & Prospects page 2
According to the AHFC mortgage loan-based data, the average sale price of a single-family home on the Kenai Peninsula was $270,377 in 2017. This is a 3% increase over 2016 prices. AHFC information shows that on the Kenai Peninsula: Single-family home prices have risen steadily over the last 15 years. Condominium prices jumped in 2017. Prior to this they lost value between 2007 and 2011, then flattened out with smaller ups and downs until 2016. The sale price of multifamily units, which includes everything with two units or more, has a more erratic price history due to the variety of housing types included. The cost of renting on the Kenai Peninsula is lower than anywhere else in Southcentral Alaska, a competitive advantage for this area. Higher vacancy rates here compared to other places means that there are more places to choose from as well.
Despite the reasonable housing and rental costs compared to other places, there were still an estimated 41% of renters, 27% of homeowners with a mortgage, and 12% of homeowners without a mortgage in the Kenai Peninsula Borough that paid more than 30% of their income for housing and utilities.
Cost of Living
Cost of living is driven by the price of housing. The availability and affordability of housing on the Kenai Peninsula is an advantage compared to more constrained and expensive housing markets in nearby Anchorage and Mat-Su. Looking at food and utilities though: Food costs in Kenai and Homer were 4-5% higher in March 2018 than in Anchorage. In Seward however, food costs were 69% higher than in Anchorage. Gasoline prices were higher on the Peninsula than in Anchorage or Mat-Su. For the first half of 2018, the cost of electricity was higher in most Peninsula cities than in other places in Southcentral Alaska, as has been typical for several years. Rates in the city of Seward though were comparable to Mat-Su. Except for in Seldovia, heating oil and propane were less expensive on the Peninsula in 2017 than in Anchorage.
The impact of higher costs for gas and utilities on the Kenai Peninsula is compounded by the fact that median household income of Peninsula residents is lower than in Anchorage or Mat-Su. This means that many Kenai Peninsula residents must spend a higher percentage of their income on necessities such as food, gasoline, heat, electricity, and housing. Countering this is the relative affordability of housing.
Movement of People and Freight
The transportation of people and goods throughout the Kenai Peninsula is an indicator of commercial, industrial, and general economic activity. Compared to 2016, many indicators were flat or in decline in 2017: • The number of AMHS ferry stops and ferry passengers declined significantly in 2017. • In Alaska there was a dramatic increase in cruise ship visitation between 2014 and 2015. The Peninsula experienced this too. Since then, the number of cruise visitors to the Kenai Peninsula has stayed relatively high, but compared to 2016 was down 2% in 2017. This is surprising as the number of ships and cruise visitors statewide is on an upward trend now. In 2017, there were an estimated 187,950 cruise passengers visiting Seward and 14,600 visiting Homer. Cruise Lines International Association personnel report that the number of cruise passengers visiting Peninsula ports is expected to increase in 2018. • The number of arriving air travelers was down 2% in 2016, the pounds of air freight arriving was essentially flat, and the volume of incoming airmail was up (2016). The total number of air travelers disembarking at Peninsula airports has been declining for five years.
KPEDD 2018 Situations & Prospects page 3
• Coal exports through Seward continued to decline and in 2017 ended. • From 2009 to 2016, the tons of goods received (inbound) at the port of Seward increased from 14,000 short tons (rounded to nearest 1000) to 66,000 short tons. Inbound cargo volumes declined in 2016, but over the longer term are steady. Inbound cargo includes distillate fuel oil, gasoline, lumber, iron and steel pipes/tubes, primary wood products, lumber, and miscellaneous mineral products. Shipping officials note that business was up in 2017 due to imports to support the military, mining, and oil and gas. Expectations are that these trends will continue in 2018. • Compared to five years ago, traffic is up along the Seward Highway near the Placer River Bridge (road segment D, a proxy for the number of vehicles coming or going from the Peninsula) with a five year average of over 4,100 vehicles per day. • Along the Sterling Highway (road segment G) where one is traveling to or from Anchor Point and Homer, traffic volumes have been increasing consistently, reflecting in part Homer’s decade long lead in new home construction and population increases. Personal Income
In 2016, total personal income to Kenai Peninsula Borough residents totaled $2.97 billion. This was $95 million or 3% less than came to the region’s residents in 2015. Statewide there was a decline as well, with Alaskans overall receiving 1% less in 2016 than they did in 2015.
Per capita personal income on the Kenai Peninsula in 2016 was $50,691, a decline of 4% compared to 2015, according to the US BEA. This was 9% below the statewide per capita income of $55,646. Alaska’s per capita income declined 2% in 2016 too.
A variety of indicators together suggest that approximately 11% of Kenai Peninsula Borough residents and 18% of households are struggling financially.
2017 Business Sales
Finally, some very positive numbers: during 2017, gross business sales on the Kenai Peninsula Borough totaled $3.6 billion, which was up 6% compared to 2016, and broke a two-year cycle of decline. Compared to 2016, gross sales were up in Soldotna (21%), Seldovia (15%), in places outside of cities (5%) and in Kenai (3%). Gross sales in Seward and Homer declines just a bit (less than 0.5%) compared to the 2016.
Highest Value Properties
The 25 property owners with the highest assessed property value in the Kenai Peninsula Borough continue to be oil and gas producers, companies that supply goods and services to or transport oil and gas, telecommunications companies, utilities, major retailers, and one tourism business.
Workforce and Earnings
Total employee wages were down again in 2017 on the Peninsula. Total wages to Kenai Peninsula employees dropped between 2016 and 2017, as they did between 2015 and 2016. This was true statewide and in the Anchorage area too. The decline in total wages has been about 5% since 2015 on the Peninsula, in Anchorage, and statewide.
When the number of employees and their wages on the Kenai Peninsula are combined with the number of self- employed business proprietors and their earnings, this big picture shows that: • The total workforce in 2017 was 26,581 workers, essentially unchanged from 2016 (26,615).
KPEDD 2018 Situations & Prospects page 4
• Direct work earnings totaled $1.2 billion in 2017, which was a decline of $19 million or 2% compared to 2016. • The workforce and their earnings were split as follows: o Government – 19% of workforce, 23% of earnings o Goods-Producing – 20% of workforce, 27% of earnings o Service-Providing – 62% of Workforce, 50% of earnings
Top Areas of Economic Contribution
When the Kenai Peninsula’s employees and self-employed business proprietors are combined by sector:
The MOST WORKERS (average annual) were engaged in: 1. Health Care and Social Assistance - 3,586 2. Local Government** - 3,365 3. Retail Trade - 3,040 4. Accommodations and Food Service - 2,738 5. Agriculture, Forestry, Fishing and Hunting (primarily commercial fishing) - 1,779
The HIGHEST TOTAL EARNINGS on the Peninsula came from: 1. Local Government**- $175 million 2. Health Care and Social Assistance - $155 million 3. Oil & Gas, Mining - $96 million 4. Agriculture, Fishing, Forestry, Hunting (primarily fishing) - $91 million 5. Retail Trade - $89 million
The HIGHEST WAGES (average annual) went to employees in (does not include self-employed): 1. Oil & Gas, Mining ($115,163/year) 2. Utilities ($110,365/year) 3. Securities, Investments ($94,304/year) 4. Federal Government ($79,357/year) 5. Wholesale, Electronic Markets ($77,454/year)
The HIGHEST GROSS BUSINESS SALES were for: 1. Retail Trade - $1,123,219,462 (record high) 2. Oil and Gas, Mining/Quarrying - $659,054,693 3. Construction Contracting - $304,527,369 4. Wholesale Trade - $258,480,256 5. Utilities - $168,590,043 ** Local government includes the all public schools, all cities, the borough, and all tribal government employment.
KPEDD 2018 Situations & Prospects page 5
At a Glance: Key Demographic and Economic Indicators
Demographics 2013 2016 2017 1 year change 5 year change Population 56,850 58,049 58,024 -25 0% 1,174 2% Median Age 41.4 41.4 41.4 0 0% 0 0% Number < age 5 3,566 3,605 3,563 -42 -1% -3 0% Number > age 64 7,774 9,140 9,584 444 5% 1,810 23% Number of Total PFDs 53,217 52,418 52,127 -291 -1% -1,090 -2% Number Child PFDs (age 0-17) 12,352 11,958 12,221 263 2% -131 -1% Income 2012 2015 2016 1 year change 5 year change Total Personal Income $2,770,353,000 $3,056,190,000 $2,965,755,000 -$90,435,000 -3% $195,402,000 7% Per-Capita Income $48,644 $52,737 $50,691 -$2,046 -4% $2,047 4% Alaska Per Capita Income $52,648 $56,528 $55,646 -$882 -2% $2,998 6% Median Household (HH) Income $59,421 $63,684 $64,891 $1,207 2% $5,470 9% Alaska Median HH Income $69,917 $72,515 $74,444 $1,929 3% $4,527 6% Businesses 2012 2015 2016 1 year change 5 year change No. AK Business Licenses in KPB 5,473 ('15) 7,068 ('17) 7,666 ('18) 598 8% 2193 40% No. Self-Employed Proprietors 6,117 6,622 6763 141 2% 646 11% Earnings for Self-Employed $277,153,000 $284,660,000 $271,856,000 -$12,804,000 -4% -$5,297,000 -2% Proprietors Employment and Wages 2013 2016 2017 1 year change 5 year change Number Employees (ave. ann.) 20,704 19,993 19,818 -175 -1% -$886 -4% Total Gov’t Employees 4,820 4,873 4,843 -30 -1% $23 0% Total Private Sector 15,120 14,875 -245 -2% -$1,009 -6% Employees 15,884 Total Employees Wages 953,673,438 $938,916,522 932,287,166 -6,629,356 -1% -$21,386,272 -2% Total Gov’t Wages 247,156,180 $269,760,755 272,772,293 3,011,538 1% $25,616,113 10% Total Private Sector Wages 706,517,257 $669,155,768 659,514,873 -9,640,895 -1% -$47,002,384 -7% Average Annual Wage 46068 $46,962 $47,040 78 0% $972 2% Annual Unemployment Rate 8.0% 8.6% 8.5% -0.1% 0.5% (not seasonally adjusted) % all people below poverty last 9.1% ('12) 10.0% ('15) 11.0% ('16) 1.0% 1.9% 12 months % Families Below Poverty 5.2% ('12) 6.4% ('15) 7.1% ('16) 0.7% 1.9% % Families Below Poverty with 15.2% ('12) 20.6% ('15) 24.9% ('16) 4.3% 9.7% female head of house, no husband Schools 2013 2016 2017 1 year change 5 year change PK-12 School District Enrollment 9,077 ('13/'14) 9,141 ('16/'17) 9,027 ('17/'18) -114 -1% -50 -1%
Dropout Rate 3.0% ('12/'13) 2.3% ('15/'16) 1.7% ('17/'18) -0.6% -1.3% Free Lunch Eligibility (% of all 39% ('13/'14) 43% ('16/'17) 42% ('16/'17) -1% 3.0% students) Ave. SAT Scores - KPB/State 1493 / 1495 1500 / 1424 1116 / 1080* (*new test 2017) Full & part time KPC and AVTEC 4,026 4,121 4,159 38 1% 133 3% students Agriculture 2013 2016 2017 1 year change 5 year change Number of USDA funded High 217 390 472 82 21% 255 118% Tunnels in KPB Total Income, Farms (Gross, not $7,297,000 $7,527,000 $8,063,000 $536,000 7% $766,000 10% Net) ('12) ('15) ('16) GROSS SALES: Ag, Forestry, $3,259,614 $3,929,259 $7,713,162 $3,783,903 96% $4,453,548 137% Fishing, Hunting Excise tax 28 Peninsula marijuana $1,108,317 $717,940 cultivators paid state ('17) (Jan-May '18)
KPEDD 2018 Situations & Prospects page 6
Gross Business Sales, by Type 2013 2016 2017 1 year change 5 year change GRAND TOTAL $3,717,539,890 $3,365,263,955 $3,562,254,538 $196,990,583 6% -$155,285,352 -4% Trade: Retail $984,180,277 $945,655,655 $1,123,219,462 $177,563,807 19% $139,039,185 14% (Oil & Gas) Mining/Quarrying $552,522,750 $623,592,005 $659,054,693 $35,462,688 6% $106,531,943 19% Construction Contracting $566,348,085 $391,597,672 $304,527,369 -$87,070,303 -22% -$261,820,716 -46% Trade: Wholesale $319,501,740 $239,834,004 $258,480,256 $18,646,252 8% -$61,021,484 -19% Tourism (Arts & Entertainment, $167,309,334 $174,572,976 $182,666,683 $8,093,707 5% $15,357,349 9% Guiding-Water & Land, Lodging) Utilities $176,751,210 $158,495,022 $168,590,043 $10,095,021 6% -$8,161,167 -5% Services, Other $173,813,125 $120,144,891 $157,877,674 $37,732,783 31% -$15,935,451 -9% Transportation & Warehousing $96,307,920 $106,416,878 $131,007,648 $24,590,770 23% $34,699,728 36% Property Rentals (all) $104,623,871 $132,826,210 $125,120,965 -$7,705,245 -6% $20,497,094 20% Manufacturing $139,007,456 $105,130,451 $116,593,124 $11,462,673 11% -$22,414,332 -16% Restaurants & Bars (partly linked -$2,084,485 -2% $6,602,970 7% to tourism) $92,841,409 $101,528,864 $99,444,379 Prof, Scientific & Technical Svs $137,673,975 $74,634,921 $68,760,387 -$5,874,534 -8% -$68,913,588 -50% Telecommunications, -$2,630,975 -5% -$14,796,371 -22% Information $66,856,363 $54,690,967 $52,059,992 Waste Management, Admin, -$22,292,004 -38% -$45,078,469 -55% Remediation $82,097,934 $59,311,469 $37,019,465 Health Care, Social Assistance $20,369,553 $34,368,296 $34,899,117 $530,821 2% $14,529,564 71% Public Admin, Education Svs $24,041,998 $30,291,864 $30,791,699 $499,835 2% $6,749,701 28% Ag, Forestry, Fishing, Hunting $3,259,614 $3,929,259 $7,713,162 $3,783,903 96% $4,453,548 137% Financial & Insurance $10,033,276 $8,242,551 $4,428,420 -$3,814,131 -46% -$5,604,856 -56% Housing 2012 2015 2016 1 year change 5 year change Number of new dwelling units (5 94 (‘13) 103 (‘16) 88 (‘17) -15 -15% -6 -6% cities) Number of dwelling units 30,302 30,671 30,752 81 0% 450 1% (5 yr avg/ACS) Number dwelling units occupied 21,964 21,485 21,481 -4 0% -483 -2% Median value owner-occupied homes $202,300 $219,100 $229,200 10,100 5% 26,900 13% Avg. Sales Price SF Home $283,103 (‘13) $269,436 (‘16) $270,377 (‘17) 941 0% -12,726 -4% Alaska avg. price SF home $303,626 $323,909 $323,462 -447 0% $19,836 7% Anchorage avg. price SF home $347,552 (‘13) $383,830 $375,424 -8,406 -2% $27,872 8% Median Gross Rent $852 $940 970 $30 3% $118 14% Median Adjusted Rent (incld utilities) $900 (‘14) $986 (‘17) $987 (‘18) $1 0% $87 10% Homeowners w mortgage: % 32.0% 28.0% 27.2% -0.8% -4.8% paying >30% income for housing Renters: % paying >30% income 45.5% 42.5% 41.0% -1.5% -4.5% for housing Maritime Indicators 2013 2016 2017 1 year change 5 year change No. Maritime Jobs (employees + self- - 3,292 3,145 -147 -4% employed) Maritime Income (wages + earnings) - $164,701,699 $155,680,305 -$9,021,394 -5% State Fish Tax shared with $1,528,107 $1,006,329 $1,377,426 $371,097 37% -$150,681 -10% KPB/cities (state FY) (FY ‘13) (FY ‘16) (FY ‘17) Total Pounds Landed by KPB 148,490,275 208,442,366 104,860,835 -103,581,531 -50% -43,629,440 -29% residents (pounds) (‘12) (‘15) (‘16) % of all pounds harvested by 14.2% 15.4% 10.2% -5.2% -4.0% Alaskans, that is KPB Ex-Vessel Value Landed by KPB $125,159,013 $100,765,813 98,329,046 -$2,436,767 -2% -$26,829,967 -21% residents (‘12) (‘15) (‘16)
KPEDD 2018 Situations & Prospects page 7
Passenger Transportation 2013 2016 2017 1 year change 5 year change All Passenger (Pax) 362,883 474,308 500,929 26,621 6% 138,046 38% Airline Pax Arriving (9 airports) 146,712 ('12) 143,711 ('15) 141,401 ('16) -3,279 -2% -5,311 -4% Railroad Pax (total) 77,610 95,774 91,861 -3,913 -4% 14,251 18% AMHS Pax Arriving (Homer, 7,582 12,799 8,219 -4,580 -36% 637 8% Seldovia) Cruise Passengers 130,979 202,116 198,574 -3,542 -2% 67,595 52% AADT @ Seward Hwy @ Placer 3,930 4,265 4,239 -26 -1% River Bridge 309 8% AADT @ the Y, Sterling Hwy & 18,650 16,978 no '17 count Kenai Spur Rd Sources: See individual sections of the Situations & Prospects Report for full documentation
KPEDD 2018 Situations & Prospects page 8
2 Population Figure 1 - 2017 Population, 5-year Change
2017 Kenai Peninsula Population 5-Year Population Change (2013 to 2017) 58,024 1,174 Borough Borough Sterling 6,075 Sterling 278 Kalifornsky 8,564 Kalifornsky 227 Homer City 5,313 Homer City 158 Cohoe 1,514 Cohoe 114 Bear Creek 2,100 Bear Creek 87 Ridgeway 2,189 Ridgeway 73 FunnyRiver 960 FunnyRiver 70 Soldotna City 4,333 Soldotna City 66 Seward City 2,518 Seward City 54 Balance 541 Balance 48 FoxRiver 687 FoxRiver 42 HappyValley 622 HappyValley 42 Kachemak City 505 Kachemak City 39 SeldoviaVillage 180 SeldoviaVillage 31 FritzCreek 2,053 FritzCreek 29 PortGraham 180 PortGraham 29 DiamondRidge 1,199 DiamondRidge 28 Nanwalek 304 Nanwalek 21 Nikolaevsk 311 Nikolaevsk 21 PointPossession 24 PointPossession 21 LowellPoint 88 LowellPoint 17 Hope 211 Hope 9 Tyonek 191 Tyonek 9 Nikiski 4,605 Nikiski 3 Ninilchik 851 Ninilchik 2 Sunrise 12 Sunrise1 CrownPoint 72 -1 CrownPoint HalibutCove 89 -2 HalibutCove Beluga 13 -3 Beluga ClamGulch 177 -6 ClamGulch Primrose 69 -8 Primrose Anchor Point 2,042 -10 Anchor Point CooperLanding 258 -20 CooperLanding MoosePass 230 -20 MoosePass Source: Seldovia City 216 -26 Seldovia City ADOLWD Kasilof 561 -35 Kasilof Population Estimates Salamatof 1,129 -40 Salamatof 2013-2017 Kenai City 7,038 -174 Kenai City
KPEDD 2018 Situations & Prospects page 9
2.1 Population Change
Population on the Peninsula essentially held steady in 2017, decreasing by 25 (a drop of less than half of one percent). Population is estimated by the Alaska Department of Labor and Workforce Development (ADOLWD) at 58,024; compared to five years ago (2013), this is up by almost 1,200 people or 2% (Figure 1).
Population gains and losses are never uniform. Over the last five years 12 of the area’s cities and places lost people while 26 grew. Over the last five years the city of Kenai and adjacent Salamantof together dropped the most, losing 214 residents, while Kalifornsky just to the south gained 227 residents. In addition to Kalifornsky, Sterling, the city of Homer, and Cohoe led population growth over the last five years.
Another population indicator is the number of Permanent Fund Dividend (PFD) applications (Figure 2), although these numbers can reflect a delay of up to two years, as individuals must live in Alaska for one calendar year starting January 1st before they can apply to receive the dividend. The total number of PFD applications, as well as the number of students enrolled in schools on the Peninsula, declined between 2016 and 2017 and also over a 5-year period.
Figure 2 - Number of PFD Applications, Kenai Peninsula Borough Population Percent Change 2013 2016 2017 1-Year 5-Year Population 56,850 58,060 58,024 0% 2% PFDs total 53,217 52,418 52,127 -1% -2% PFDs children under 18 12,352 11,958 12,221 2% -1% PK-12 School Enrollment 9,077 9,141 9,027 -1% -1% Sources: ADOLWD Population Estimates 2013-2017, ADEED District Enrollment, Alaska Permanent Fund Division Annual Reports
The aging of the large baby-boomer cohort on the Kenai Peninsula shows up as an increasing number of seniors and as seniors becoming a larger percentage of the total population. In 2010, there were 6,276 people age 65 or older, making up 11% of the Kenai Peninsula Borough population. By 2017, there were 9,584 seniors age 65 or older, comprising 17% of the population (Figure 3). This trend of a growing senior population is expected to continue until about 2035 as long as health care, services, and housing that seniors desire and need are available. Linked to the increase in residents who are older, an increasing share of income on the Peninsula is from retirement earnings, social security, and investment earnings. This is an economic advantage that seniors provide to the region (see Section 6.1, Sources of Income). In addition, as a larger percentage of residents live off investments and retirement, this helps to insulate the economy from recessionary declines in workplace wages. The ADOLWD most recent (2018) population projection suggests that the number of Alaskans ages 0 to 19 will, after being flat for about 20 years, grow 3% by 2030 and 9% by 2045. For the Kenai Peninsula Borough, ADOLWD projects 9% growth in the number of residents age 0 to 19 by 2030 and 14% growth by 2045.
KPEDD 2018 Situations & Prospects page 10
Figure 3 - Kenai Peninsula Borough Population by Age Group – 5 Years Shows Changes
11,185 10,416 2013
2017 6,914 7,169
5,695 5,546 4,318 3,413 1,791 1,784 616 701
0 to 4 5 to 19 20 to 39 40 to 64 65 to 79 80+
Source: ADOLWD Alaska Population by Age, Sex and Borough, 2010-2017
2.2 Migration to and from the Peninsula This report uses two information sources to estimate migration to and from the Kenai Peninsula. First is the official state estimate, produced by ADOLWD, that reviews annual births, deaths, and in- and out-migration. This shows an overall population drop of 25, which includes more births than deaths for a net natural gain, but many more out- migrants than in-migrants.
Net migration to and from the Peninsula was -283 people in 2017 (Figure 4). For the last five years Alaska as a whole has had more people moving away from, than to, the state.
Figure 4 - Components of Population Change End of Total Net Period Population Growth Natural Net Period Population Change Rate Births Deaths Change Migration 2016-17, Alaska 737,080 -2,629 -0.36 10,786 4,530 6,256 -8,885 2016-17, Kenai Peninsula 58,024 -25 -0.04 697 439 258 -283 Borough (KPB) 2015-16, KPB 58,049 342 0.59 750 475 275 67 2014-15, KPB 57,707 276 0.48 705 438 267 9 2013-14, KPB 57,431 581 1.02 710 383 327 254 2012-13, KPB 56,850 217 0.38 713 386 327 -110 2011-12, KPB 56,633 103 0.18 715 336 379 -276 2010-11, KPB 56,530 809 1.44 711 377 334 475 Source: ADOLWD Components of Population Change 2010 -2017
The other migration information, also from ADOLWD, focuses just on movements within Alaska. This data comes from addresses provided on PFD applications. As noted before, these numbers can reflect a delay of up to two years.
This data shows that between 2016 and 2017, net in-state migration was a positive 200 people moving to the Kenai Peninsula from other parts of Alaska, primarily from Anchorage and Kodiak.
However, more people moved from the Kenai Peninsula Borough to Fairbanks, Ketchikan, and Aleutians East Borough than vise-versa. Everywhere else in Alaska shows more people moved to the KPB (Figure 5).
KPEDD 2018 Situations & Prospects page 11
Figure 5 - Kenai Peninsula Borough, Net In-State Migration 2016-2017
Based on Alaska PFD Applications. Source: ADOLWD
3 Education
3.1 Kenai Peninsula Borough School District The number of preschool through 12th grade youth enrolled in a Kenai Peninsula Borough School District (KPBSD) school declined by 114 students or 1% between October 1, 2016 and October 1, 2017 (Figure 6). Enrollment changes were not spread evenly. Enrollment was flat or up slightly at schools in Nikolaevsk, Kenai, Homer, Seldovia, and Hope, and declined everywhere else (Figure 6). While population numbers don’t translate directly to school enrollment, the ADOLWD’s most recent (2018) population projections expect that for the Kenai Peninsula Borough the number of residents age 0 to 19 will grow 9% by 2030 and 14% growth by 2045.
The KPBSD continues to be oriented both to college-bound students and to those seeking workforce and career technical training. A new program is an Alaska Petroleum Academy, where students can earn HAZWOPER, confined space, and other certifications. KPBSD has an active Distance Computer Learning program and recently approximately 100 students received at least one Microsoft Certification through distance education. Two KPBSD students were honored due to high scores with an invitation to represent Alaska in the National Microsoft Championships in June 2018. The School District also partners with Kenai Peninsula College to offer dual credit classes. A focus of all efforts is to make sure that Peninsula students have an education to match job opportunities on the Peninsula.
The KPBSD is a top performer in Alaska. KPBSD test scores and graduation rates beat state averages, dropout rates are lower, and a national school ranking website (www.schooldigger.com) identifies it in 2017-2018 as the 10th top school district in Alaska1.
1 SchoolDigger ranks schools based on test scores supplied by each state's Department of Education. It calculates an Average Standard Score by normalizing and averaging each school's test scores across all tests and grades.
KPEDD 2018 Situations & Prospects page 12
Aurora Borealis Charter School (K-8) is ranked #2 elementary school in the state (out of 186) and #1 for middle schools (out of 96). Homer Middle School is ranked #6 statewide for middle schools. For high schools, Homer High is ranked #4 statewide out of 74 high schools.
KPBSD high school students continue to achieve higher college preparatory test scores compared to statewide averages. In 2016/2017, the mean SAT score for the KPSD was 1116 compared to the statewide average of 1080 (Figure 7). The KPBSD has enjoyed annually increasing high school graduation rates for several years, a trend that continued in 2016/2017 (Figure 8). In 2016/2017, the KPBSD graduation rate was 84.0% (4-year adjusted cohort); statewide, the graduation rate that academic year was 78.2%. The KPBSD drop-out rate was 1.7% while the Alaska-wide rate was 3.5% (Figure 8).
Figure 6 - Total Enrollment, by School and Community (PK-12) 1-Yr Change 5-Yr change Community Total School ‘1 3/'14 ‘16/'17 ‘17/'18 (‘16/’17 –‘17/’18) (‘13/’14-‘17/’18) Kenai Peninsula Borough 9,077 9,141 9,027 -114 -50 School District Total Chapman School 128 137 140 Anchor Point Total 128 128 137 140 3 Tustumena Elementary 178 185 186 Cohoe Total 178 178 185 186 1 Cooper Landing School 17 18 15 Cooper Landing Total 17 17 18 15 -3 Kachemak Selo School 63 48 47 Razdolna School 77 89 93 Voznesenka School 110 111 107 Fox River Total 250 250 248 247 -1 McNeil Canyon Elementary 131 126 123 Fritz Creek Total 131 126 123 -3 -8 Fireweed Academy 109 105 122 Homer Flex School 37 36 29 Homer High School 411 390 404 Homer Middle School 194 203 192 Paul Banks Elementary 189 227 221 West Homer Elementary 235 256 255 Homer Total 1,175 1,217 1,223 6 48 Hope School 18 17 17 Hope Total 18 17 17 0 -1 River City Academy 72 80 85 Skyview Middle/High School 281 416 405 Kalifornsky Total 353 496 490 -6 137 Aurora Borealis Charter School 194 193 197 Kaleidoscope Sch. of Arts and Sci. 253 253 260 Kenai Alternative High School 73 75 71 Kenai Central High School 546 474 467 Kenai Middle School 352 376 344 Marathon School 3 11 5 Mt. View Elementary 457 445 493 Kenai Total 1,878 1,827 1,837 10 -41
KPEDD 2018 Situations & Prospects page 13
1-Yr Change 5-Yr change Community Total School ‘1 3/'14 ‘16/'17 ‘17/'18 (‘16/’17 –‘17/’18) (‘13/’14-‘17/’18) Moose Pass School 16 11 13 Moose Pass Total 16 11 13 2 -3 Nanwalek School 81 83 79 Nanwalek Total 81 83 79 -4 -2 Nikiski Middle/High School 407 380 368 Nikiski North Star Elementary 364 382 368 Nikiski Total 771 762 736 -26 -35 Nikolaevsk School 72 67 79 Nikolaevsk Total 72 67 79 12 7 Ninilchik School 144 131 110 Ninilchik Total 144 131 110 -21 -34 Port Graham School 20 37 33 Port Graham Total 20 37 33 -4 13 Susan B English School 48 32 37 Seldovia Total 48 32 37 5 -11 William H. Seward Elementary 339 307 300 Seward High School 177 191 184 Seward Middle School 84 127 123 Seward Total 600 625 607 -18 7 Connections 774 800 747 Kalifornsky Beach Elementary 388 408 398 Redoubt Elementary 394 367 359 Soldotna Elementary School 290 338 343 Soldotna High School 557 573 582 Soldotna Middle School 380 Soldotna Montessori Charter Sch. 167 166 167 Soldotna Prep School 200 198 Soldotna Total 2,950 2,852 2,794 -58 -156 Sterling Elementary 209 239 233 Sterling Total 209 239 233 -6 24 Tebughna School 38 31 28 Tyonek Total 38 31 28 -3 -10 Source: Alaska DEED, Enrollment Totals for all Alaskan Schools
Bear Glacier, Kenai Fjords National Park. Photo of by Bruce Molnia, on Alaska.org website
KPEDD 2018 Situations & Prospects page 14
Figure 7 - SAT and ACT Test Scores Average ACT Scores Average SAT Scores Year KPB Schools Statewide Schools KPB Schools Statewide Schools
2009 23.7 21.0 1570 1528
2010 23.1 21.1 1544 1509
2011 23.1 21.2 1562 1513 2012 22.3 21.2 1516 1504 2013 22.5 21.1 1493 1495 2014 21.7 21.0 1496 1485 2015 22.3 21.1 1533 1494 2016 20.6 20.0 1500 1424
2017 20.4 19.8 1116* 1080*
Source: Kenai Peninsula Borough School District Student Assessment Results
* in Spring of 2016 college board offered a new revised SAT test with a 1600 point scale as opposed to the 2400 point scale. The test is comprised of two parts Evidenced Based Writing & Reading (EWR) and Mathematics.
Figure 8 - Kenai Peninsula Borough School District, Graduation and Drop-out Rates
85% 83% 84% 20% 83% 81% 82% 18% 81% 79% 16% 78% 79% 14% 76% 77% 12% 75% 73% 73% 73% 73% 10% 73% 8% 70% 71% 69% 6%
69% 67% 4% OutDrop Rate GraduationRates 4.3% 4.0% 4.5% 4.4% 4.5% 67% 3.3% 2% 2.5% 3.0% 3.0% 3.0% 2.8% 2.8% 65% 2.3% 1.7% 0%
Source: ADEED State Report Cards
Graduation Rate Dropout Rate to the Public
3.2 Post-Secondary Education | AVTEC and Kenai Peninsula College In 2017, post-secondary enrollment by young adults increased by about 40 students on the Peninsula.
At Kenai Peninsula College (KPC) enrollment increased by about 130 in 2017 while it fell at the Alaska Vocational Technical Education Center (AVTEC) in Seward by about 100 (Figure 9). Enrollment in KPC’s oil and gas industry-related Process Technology or Industrial Process Instrumentation workforce programs totaled 129 in spring of 2017.
AVTEC ties a decline in the number of students directly to the state’s fiscal situation and the resulting mandate for AVTEC to reduce its budget. To fulfill mandated reductions, programs had to be reduced or eliminated. In previous years it meant the closure of the health programs at the Anchorage site and in 2017 the decline was due to a reduction in the number of times Construction Technology, Plumbing and Heating, Refrigeration, and Culinary Arts were offered
KPEDD 2018 Situations & Prospects page 15
per school year. These used to be offered twice (fall and spring) and now all four are only available in one semester per school year. A new partnership has been established with the Ft. Knox Mine. Approximately two-third of the students attending AVTEC are not Kenai Peninsula residents; thus this institution is not only providing workforce and technical training, but also bringing “outside” money and people into the Seward and Kenai Peninsula economy. AVTEC’s footprint in Seward and Anchorage includes 10 buildings and about 80 employees. AVTEC recently tracked graduates and found that one year after graduation former students were earning 60% more than before they attended AVTEC.
Figure 9 - AVTEC and Kenai Peninsula College, Number of Enrolled Students 4,500 4,000 3,500 3,000 2883 2,718 2825 2631 2769 2,434 3,025 2,905 2,500 2,195 1,988 2,000 1,500 1,000 1387 1309 1398 1490 1390 1009 1118 976 1121 1280 500 0 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY 17 AVTEC Students KPC-All Campuses Source: AVTEC Education Associate, KPC Student Services Director
Living on the Kenai Peninsula, Alaska painting by David Hartman, hanging at the Soldotna Regional Sports Complex
KPEDD 2018 Situations & Prospects page 16
4 Housing and Cost of Living
4.1 Price of Housing, Number of Homes Sold, and Rental Costs The cost of living is tied to the price for everyday goods and services necessary to support a household, including housing, electricity, heat, and food.
Housing Prices
Three sources of information are used to consider the price of homes: the realtor’s Multi- Listing Service, which is based on actual home sale prices; ADOLWD/Alaska Housing Finance Corporation (AHFC) data, that uses the value of mortgages taken out for home purchases; and the American Community Survey 2012-2016 5- year estimate, which uses decadal and annual census data. Each has its strengths.
All sources of housing information show that the availability and affordability of housing on the Kenai Peninsula is an asset and advantage for this region.
Figure 10 – Kenai Peninsula Housing Price Information 2017 1. Average sales price, all types of dwelling units, 2017 (sold with realtor help) $235,097 2. Median2 value, all types of dwelling units (2012-2016 rolling average) $229,200 3. Average sales price single family homes, 2017, based on mortgage loans $270,377 4. Average sales price multi-family units, 2017, based on mortgage loans $378,921 5. Average sales price condominium units, 2017, based on mortgage loans $242,567 Sources: 1-Multiple Listing Service, 2- ACS 2012-2016 estimate, 3,4 & 5- ADOLWD/AHFC Alaska Housing Market Indicators/Historical Loan Data
The realtor’s Multiple Listing Service shows that in 2017, 776 dwelling units (of all types) sold on the Kenai Peninsula with the help of a realtor with an average sale price of $235,097. Homes were on the market an average of 4.5 months (135 days), which was 30 days less than in 2016 (Figure 11).
Figure 11 - 2017 Residential Home Sales, KPB Total and Places with 50 Home Sales or More Number Agent Days on Average Area Sold Market Sale Price 2016 2017 2016 2017 2016 2017 Total, Kenai Peninsula Borough 773 776 166 135 $227,631 $235,097 Kenai 102 114 107 106 $209,544 $205,812 Kalifornsky Beach 110 99 106 131 $253,378 $242,353 Homer 58 78 275 156 $245,572 $269,389 Sterling 72 68 120 115 $278,156 $286,995 North Kenai 51 59 102 120 $204,850 $195,574 Soldotna 75 54 118 101 $223,762 $260,187 Seward-Cooper Landing 59 52 121 93 $245,105 $255,817 Source: Multi-Listing Services (MLS) courtesy of Redoubt Realty
ADOLWD/Alaska Housing Finance Corporation (AHFC) Historical Loan Data tracks sale prices of homes across the state. According to the AHFC mortgage loan-based data, the average sale price of a single-family home on the Kenai Peninsula
2 The median value is “at the top of the bell curve” so half the houses cost more and half the houses cost less than this value.
KPEDD 2018 Situations & Prospects page 17
was $270,377 in 2017 (Figures 12 and 13). This is a 3% increase over 2016 prices. AHFC information shows that on the Kenai Peninsula (Figure 12): Single-family home prices have risen steadily over the last 15 years. Condominium prices jumped in 2017. Prior to this they lost value between 2007 and 2011, then flattened out with smaller ups and downs until 2016. The sale price of multifamily units, which includes everything with two units or more, has a more erratic price history due to the variety of housing types included. The average sales price for a single-family home on the Kenai Peninsula is lower than most other areas in Alaska (Figure 13).
As noted, in 2017 the average sales price for single-family homes in the Kenai Peninsula Borough was $270,377. This was more than $100,000 less than average sales prices in Anchorage. Of the regions surveyed by AHFC, only homes in the Fairbanks North Star Borough had lower average sale prices (Figure 13).
Figure 12 – Average Home Prices, Kenai Peninsula Borough $500,000 $450,000 $400,000 $378,921 $350,000 $300,000 $270,377 $250,000 $242,567 $200,000 $150,000 $100,000
$50,000 Single Family Multi Family Condo $0
Source: ADOLWD/AHFC Alaska Housing Market Indicators/Historical Loan Data
Figure 13 - 2017 Average Single Family Home Sales Price Statewide Total $323,462 Bethel $320,591 Kodiak Island $315,329 Ketchikan Gateway $299,389 Source: Juneau $394,909 ADOLWD/AHFC Alaska Housing Kenai Peninsula $270,377 Market Fairbanks North Star $252,961 Indicators/ Matanuska-Susitna $286,155 Historical Loan Data Anchorage $375,424 Remainder of State $292,112 $0 $100,000 $200,000 $300,000 $400,000
KPEDD 2018 Situations & Prospects page 18
The US Census’s American Community Survey (ACS) 2012-2016 5-year estimate for the median home value in Kenai Peninsula Borough is $229,2003, which is 12% less than the state as a whole and 30% less than in Anchorage (Figure 14). Figure 14 - Median Value of all Dwelling Units Median Home Median Home Place Place Value Value Alaska $257,100 1. Sitka City and Borough $341,600 17. Haines Borough $198,400 2. Juneau City and Borough $329,500 18. Dillingham Census Area $196,400 3. Skagway Municipality $305,700 19. Wrangell City and Borough $183,300 4. Anchorage Municipality $298,000 20. Prince of Wales-Hyder Census Area $171,100 5. Kodiak Island Borough $266,700 21. Yakutat City and Borough $165,800 6. Ketchikan Gateway Borough $257,100 22. North Slope Borough $154,100 7. Hoonah-Angoon Census Area $235,100 23. Bethel Census Area $151,400 8. Matanuska-Susitna Borough $230,100 24. Northwest Arctic Borough $146,400 9. Kenai Peninsula Borough $229,200 25. Lake and Peninsula Borough $143,800 10. Denali Borough $228,600 26. Nome Census Area $138,300 11. Valdez-Cordova Census Area $227,900 27. Aleutians East Borough $124,500 12. Fairbanks North Star Borough $224,000 28. Kusilvak Census Area $101,300 13. Petersburg Borough $213,400 29. Yukon-Koyukuk Census Area $90,800 14. Aleutians West Census Area $211,400 30. Haines Borough $198,400 15. Southeast Fairbanks Census Area $201,600 31. Dillingham Census Area $196,400 16. Bristol Bay Borough $199,000 32. Wrangell City and Borough $183,300 Source: ACS 2012-2016 5-year Estimate
Rental Costs
The cost of renting on the Kenai Peninsula is lower than anywhere else in Southcentral Alaska, a competitive advantage for this area (Figure 15). Higher vacancy rates than other places mean there are more places to choose from as well.
Figure 15 - Residential Rental Costs and Vacancy Rates, 2016-2018 March 2016 March 2017 March 2018 Median Adjusted Rent (includes utilities) Kenai Peninsula Borough $992 $986 $987 Municipality of Anchorage $1,214 $1,200 $1,197 Mat-Su Borough $1,072 $1,105 $1,139 Statewide Total (surveyed) $1,175 $1,148 $1,178 Vacancy Rate Kenai Peninsula Borough 8.8% 11.2% 10.7% Municipality of Anchorage 3.8% 5.1% 6.2% Mat-Su Borough 3.6% 7.6% 7.3% Statewide Total (surveyed) 5.8% 7.3% 7.9% Source: ADOLWD/AHFC Rental Market Surveys
3 With a + or – margin of error of $5,923
KPEDD 2018 Situations & Prospects page 19
Despite the reasonable housing and rental costs compared to other places, there are still an estimated 41% of renters, 27% of homeowners with a mortgage, and 12% of homeowners without a mortgage in the Kenai Peninsula Borough that pay more than 30% of their income for housing and utilities.
4.2 Number of Dwelling Units and New Construction According to the 2012-2016 American Community Survey (ACS), there are 30,752 housing units on the Kenai Peninsula, of which 21,481 or 70% are occupied year-round. The 2012-2016 ACS 5-year estimate reports that the vast majority of homes are owner-occupied - some 72% or 15,382; the remaining 6,099 homes, or 28% of the total, are renter- occupied.
For the five cities on the Kenai Peninsula, aggregated new home construction dropped by 15% in 2017, which is the 3rd year in a row of decline (Figure 16), according to the ADOLWD/AHFC annual aggregation of local permit and building data.
There were no new homes built in Seldovia, home construction declined in Kenai, Soldotna, and Seward, though Homer experienced an increase.
In 2017, there were 88 new dwelling units built. Of these, more than half (58%) were built in Homer, which continues to lead in annual new home construction.
The 88 new dwelling units in either Homer, Kenai, Soldotna, or Seward were 70 single-family homes, 8 units in four duplexes, one tri-plex, one six-plex, and one manufactured home built.
Figure 16 - Number of New Dwelling Units Constructed 140
120
100
80
60
40
20
0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Soldotna 28 24 20 29 10 14 16 41 18 29 16 Seward 2 6 2 2 0 3 4 3 8 13 4 Seldovia 0 0 0 0 2 1 0 0 0 0 0 Kenai 30 24 11 20 29 22 33 31 36 25 17 Homer 60 37 38 27 31 19 41 46 49 36 51
Source: Alaska Housing Finance Corporation, Housing Market Indicators
KPEDD 2018 Situations & Prospects page 20
4.3 Utilities and Food The cost of housing is the most important component of cost of living. As was just reviewed, in 2017 rents and the price of housing is lower on the Peninsula than in other parts of Southcentral Alaska.
Food costs in Kenai and Homer were 4-5% higher than in Anchorage in March 2018. When data is available it has typically shown food costs as significantly higher in Seward, and March 2018 was no exception with a listing for Seward food costs as 69% higher than Anchorage.
Gasoline prices were higher on the Peninsula than in Anchorage or Mat-Su. In Seward, it was over 60 cents/gallon higher in September 2018, while in Kenai it was 12-16 cents/gallon higher.
For the first half of 2018, the cost of electricity was higher in most Peninsula cities than in other places in Southcentral Alaska, as has been typical for several years. Rates in the city of Seward though were comparable to Mat-Su. On Figure 17 the monthly residential electric bill for 1,000 kWh for January-June 2018 is listed. (Two different companies list average monthly residential kWh usage at 550 and at 696 kWh.)
Except for Seldovia, heating oil and propane were less expensive on the Peninsula in 2017 than in Anchorage.
The effect of higher costs for gas and utilities on the Kenai Peninsula is compounded by the fact that median household income of Peninsula residents is lower than in Anchorage or Mat-Su. This means that many Kenai Peninsula residents must spend a higher percentage of their income on necessities such as food, gasoline, heat, electricity, and housing. Countering this is the relative affordability of housing.
Figure 17 - 2017 Household Expenses, Select Southcentral Alaskan Places Anchorage MatSu Homer Kenai (city) Seward Seldovia Week of food for a family of four, $220.80 $204.00 $230.20 $231.90 $372.90 - kids age 6-11 (1st qtr 2018) Monthly Electricity Bill for $194.83 $207.37 $238.53 $238.53 $208.58 $238.53 Residential for 1000 kWh (Jan-Jun ’18) (Jan-Jun ’18) (Jan-Jun ’18) (Jan-Jun ’18) (Jan-Jun ’18) (Jan-Jun ’18) $2.75 #1 Heating Oil + Tax ($/gal) $3.07 $2.72 $2.75 $2.69 $4.38 (Wasilla) $3.12-$3.17 $3.41 Gasoline ($/gal) Sept 2018 $3.12-$3.16 $3.28-$3.29 $3.75 - (Wasilla) (Anchor Pt) Propane + Tax ($/gal) $4.50 - $3.89 $4.10 - $5.24 $80,862 $73,908 $57,471 $58,732 $70,000 $43,889 Median Household Income ±$1,295 ±$1,841 ±$3,155 ±6,816 ±$7,911 ±$9,535 $1,231 $1,079 $970 $899 $729 $633 Median Gross Rent ±$19 ±$27 ±$37 ±$50 ±$192 ±$132 - = data not available Sources: Food Costs - Personal communication Sept 2018 with B. Luick, University of Alaska, Fairbanks, Food & Nutrition Specialist; Electricity - Chugach Electric Association, Matanuska Electric Association, Homer Electric Association, Seward Light and Power; Heating Oil & Propane - Alaska Housing Finance Corporation, Fuel Cost Survey, January 2018; Gasoline- GasBuddy.com as of early Sept 2018; Median Household Income and Median Gross Rent - American Communities Survey 2012-2016 5-yr estimates
KPEDD 2018 Situations & Prospects page 21
5 Movement of People and Freight
The transportation of people and goods throughout the Kenai Peninsula is an indicator of commercial, industrial, and general economic activity. Compared to 2016, most indicators were flat or in decline in 2017: • The number of AMHS ferry stops and ferry passengers declined significantly in 2017. • The number of air travelers and pounds of air freight was essentially flat; volume of air mail was up (2016). • Caution is needed when considering only a year traffic data; however, traffic along the Kenai Spur Highway in Nikiski dropped 20%. • Coal exports through Seward continued to decline and in 2017 ended. Inbound cargo volumes declined in 2016, but over the longer term is steady.
5.1 Roads (Average Annual Daily Traffic) The Alaska Department of Transportation Figure 18 - Map of Traffic Segments Monitored by this S&P Report and Public Facilities (ADOTPF) records the average number of vehicles per day (average annual daily traffic or AADT) at numerous locations on the Peninsula. Eight sites are monitored by the Situations and Prospects Report as indicators of traffic through specific communities or areas (map at Figure 18, data at Figure 19).
Due to how this data is collected, caution is needed when reviewing a single year’s change. Also, data collection at segments F, E, and B are only counted every three years; in the in-between years the count is estimated using data from adjacent locations.
Keeping the above cautions in mind, it is interesting to see (Figures 18 and 19): Compared to five years ago, traffic is up along the Seward Highway near the Placer River Bridge (road segment D) with an average of over 4,100 vehicles per day coming to and from the Kenai Peninsula. Along the Sterling Highway (road segment G) where one is traveling to or from Anchor Point and Homer, traffic volumes have been increasing
KPEDD 2018 Situations & Prospects page 22
consistently, reflecting in part Homer’s decade long lead in new home construction and population increases. Along the Kenai Spur Highway in Nikiski (road segment F), traffic volumes were high in 2012 and 2013; since then average daily traffic has been declining and in 2017, it dropped 20% At the intersection of the Kenai Spur Highway and the Sterling Highway, also called the “Soldotna Y” (road segment B), traffic seems to have peaked during 2012-2014, though the increase those years could be due to local area construction.
Figure 19 – AADT (Average Annual Daily Traffic) Counts at Select Kenai Peninsula Locations
20,000
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000 Average Average AnnualDaily Traffic 2,000
0 20082008 20092009 20102010 2011 20122012 20132013 20142014 2015 20162016 20172017 D Placer River Bridge-Seward Hwy 3,702 4,026 4,011 3,865 3,753 3,930 4,012 4,214 4,265 4,239 E Moose Pass-Seward Hwy 1,553 1,572 1,614 1,584 1,568 1,555 1,570 1,611 C Soldotna - Sterling Hwy @ Robinson 7,997 8,352 8,425 8,313 8,314 8,560 8,819 8,881 9,211 9,023 Lp B Soldotna - Sterling Hwy @ Kenai 14,120 16,634 16,900 16,650 18,085 18,650 18,275 15,168 16,978 Spur A Kenai - Kenai Spur Hwy 8,922 9,157 9,449 9,231 9,218 9,339 9,587 9,587 9,520 9,520 F Nikiski - Kenai Spur Hwy 3,139 3,220 3,226 2,418 3,747 3,800 3,270 3,281 3,571 2,861 G Anchor River-Sterling Hwy 2,467 2,484 2,611 2,571 2,469 2,500 2,561 2,642 2,801 2,816 H Homer - Sterling Hwy 3,840 3,773 3,874 3,861 3,677 3,776 4,444 4,146 4,295 4,281 Source: Alaska Department of Transportation and Public Facilities
KPEDD 2018 Situations & Prospects page 23
5.2 Ferries - Alaska Marine Highway System The Alaska Marine Highway System (AMHS) provides state-run ferry service to Homer and Seldovia along the route to Prince William Sound, Kodiak Island, and the Aleutian Islands. In 2017, the number of ferry stops and passengers to and from both Homer and Seldovia declined.
The number of port departures in Homer dropped from 246 in 2016 to 201 in 2017, a 16% decrease (Figure 20). The number of port departures in Seldovia dropped from 128 in 2016 to 92 in 2017, a 28% decline (Figure 21).
Fewer ferry stops generally means fewer passengers to and from communities and the numbers show this. Homer experienced a 34% decline in the number of arriving passengers in 2017 and a 35% decline in the number of departing passengers. Vehicle numbers were down as well. In Seldovia in 2017, there was a 42% decline in the number of arriving passengers and a 35% decline in those departing. As long as the state continues to cut funding to the AMHS and reduce service, reduced ferry service and ridership will persist.
Figure 20 – Homer, Alaska: Number of AMHS Ferry Passengers (arriving) and Port Departures
350 12,621 12,360 12,674 12,456 14,000 11,853 12,117 300 10,713 10,301 12,000 250 10,000 6,782 200 6,282 8,000 150 305 6,000 286 264 254 254 239 234 246 100 201 4,000 135 50 2,000
0 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Number of Port Departures Number of Arriving Passengers
Source: ADOTPF, AMHS Annual Reports and Personal Communication
Figure 21 – Seldovia, Alaska: Number of AMHS Ferry Passengers (arriving) and Port Departures 4,000 160 3,398 3,500 3,253 3,135 140 2,818 2,793 3,000 2,723 120 2,392 2,498 2,500 100 2,000 80 136 1,300 1,437 1,500 125 118 128 60 111 116 105 102 92 1,000 77 40 500 20 0 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Number of Port Departures Number of Arriving Passengers
Source: ADOTPF, AMHS Annual Reports and Personal Communication
KPEDD 2018 Situations & Prospects page 24
5.3 Marine Cargo and Freight Seward is the Kenai Peninsula’s main port hub. It is also the back-up port to Anchorage and southcentral Alaska should a hazard close service in Anchorage. Seward’s strategic location on the Gulf of Alaska coupled with existing port, harbor, rail, and highway infrastructure make it an important regional maritime asset.
In 2016, the Alaska Railroad upgraded the Seward freight dock to accommodate fishing vessels seeking to unload their catch in Seward. This is important as Seward is consistently on of the top US ports for pounds of fish across its docks. Improvements include an 8,000+ square foot paved area at the dock’s ocean end, electrical power, and water service. Ample illumination and jersey barriers define the fish unloading area, separating it from other freight operations.
The city of Seward and the Alaska Railroad have been working together to identify ways to increase freight volume and passenger use. This $3 million Seward Marine Terminal Expansion Planning Project ($2.5 million TIGER VI grant and $500,000 from Alaska Railroad) analyzed traffic and developed alternatives. The project vision statement was to, “Reimaging travel and trade to enhance economic vitality and increase opportunities in the region by balancing port, rail, and real estate to meet transportation demands.” The final master plan was adopted in late 2017. The plan sets priorities for multi-phased future development. The top asset for improvement is the passenger dock; a funding strategy for improvements is being completed now. The dock serves some 200,000 passengers a year from about 100 vessels of varying size from large and small cruise ships to yachts.
Exports (outbound) cargo peaked in 2011 at 1,073,000 short tons and fell to 72,000 tons in 2016 (Figure 23).
Exports through the port of Seward are primarily coal and lignite. Alaska Railroad officials report that coal exports ended in 2017, have not resumed in 2018, and there are no expectations for renewed coal export in 2019 at this time. The Seward Coal Loading Facility is at the southern terminus of the Alaska Railroad. It is the only facility in Alaska that can accommodate export of Usibelli coal. Usibelli coal is used in Alaska, but despite its low sulphur content, 2017 was the year that coal exports ended. Factors affecting coal shipments include reduced global demand for coal, a more competitive world market driving down the price of coal, the introduction of higher calorie Indonesian coal into Japan causing Usibelli coal to lose significant market share, domestic sourcing of coal in Chile, and institution of an import tax on coal into Korea in 2015.
From 2009 to 2016, the tons of goods received (inbound) at the port of Seward increased from 14,000 short tons (rounded to nearest 1000) to 66,000 short tons (Figure 23). Inbound cargo volumes declined in 2016, but over the longer term are steady. Inbound cargo includes distillate fuel oil, gasoline, lumber, iron and steel pipes/tubes, primary wood products, lumber, and miscellaneous mineral products. Shipping officials note that business was up in 2017 due to imports to support the military, mining, and oil and gas; and expectations are that these trends will continue in 2018. The Marine Terminal Master Plan, plus current observations of Alaska Railroad officials, suggest mixed future trends including continuing decline of coal exports (now ended), slower freight imports due to downturns in the oil and gas and construction industries (although in 2018 there are increasing fuel imports), increasing fish exports, and increasing passenger visitation.
According to the US Army Corps of Engineers annual Waterborne Commerce Reports, cargo arrives and departs the port of Seward on both self-propelled and non-self-propelled vessels with dry cargo, tankers, tows, or tug. In 2016, there were 100 inbound trips and 84 outbound trips; in 2015 there were 97 inbound trips and 95 outbound trips. These numbers are about evenly split between foreign and domestic traffic, with slightly more foreign than domestic vessels.
KPEDD 2018 Situations & Prospects page 25
Figure 22 - Coal, Metric Tons Delivered to Seward 2010 2011 2012 2013 2014 2015 2016 2017 953,329 1,083,757 871,935 574,755 465,079 124,276 55,578 0 Source: Alaska Railroad Corporation
Figure 23 - Port of Seward Cargo Traffic, Short Tons 1,200 1,000 800 600 400 Source: US Army Corops of Engineers, Annual reports 200 on Waterborne Commerce 0 of the US, Part 4 20 20 20 20 20 20 20 20 200909 201010 201111 201212 201313 201414 201515 201616 Short tons of Outbound Cargo 890 949 1,073 893 670 554 149 72 Short tons of Inbound Cargo 14 11 41 72 48 46 89 66
5.4 Air Travel There are nine airfields on the Kenai Peninsula (Figure 24). Together, between 2016 and 2017 the number of arriving passengers fell 2%, from 143,711 to 141,401. The total number of air travelers disembarking at Peninsula airports has been declining for five years. Pounds of incoming freight were essentially flat, up 1% to 3.48 million pounds. The amount of US mail arriving by air bucked a flat to downward trend and jumped to over 202,000 pounds, up 13%.
Pounds of airfreight can vary based on many factors, including how active construction and professional service activity is during the year. In general, air freight is increasing with growing Amazon and other e-delivery services, while pounds of US mail air-shipped is decreasing as more communication moves to email. However in 2016, the volume of US airmail delivered bucked this trend due to increased volume at the region’s smaller airfields (Figure 25).
At the Kenai Airport, the Peninsula’s main airfield, the number of arriving passengers declined between 2015 and 2016 by 6%; about 87,500 travelers arrived in 20164. However, pounds of arriving freight increased by 36%. Pounds of mail dropped.
At Homer, the 2nd largest airport in the region, arriving passengers increased 4% to 39,105. Pounds of freight delivered here fell in 2017 by 18%.
4 Year 2017 data is available from the US Bureau of Transportation Statistics, it tends to get updated during the following year as late reporters file, so this information is not included this year.
KPEDD 2018 Situations & Prospects page 26
Figure 24 - Arriving (Deplaning) Air Passengers/Freight on the Kenai Peninsula 1-Yr % 5-Yr % 2012 2013 2014 2015 2016 Change Change KENAI PENINSULA BOROUGH TOTALS Air Passengers (#) 146,719 144,181 144,680 143,711 141,401 -2% -4% Air Freight (lbs.) 4,620,308 4,935,609 3,890,961 3,482,033 3,475,134 1% -25% Air Mail (lbs.) 178,743 135,223 180,473 163,619 202,275 24% 13% Beluga Air Passengers (#) 3,266 2,289 2,673 1,702 1,572 -8% -52% Air Freight (lbs.) 971,396 500,157 514,480 264,259 219,787 -17% -77% Air Mail (lbs.) 9,979 5,266 12,036 3,473 6,978 101% -30% Homer Air Passengers (#) 38,086 36,179 36,475 37,594 39,105 4% 3% Air Freight (lbs.) 694,905 1,322,397 767,228 918,516 751,462 -18% 8% Air Mail (lbs.) 20,214 18,376 19,715 9,586 9,360 -2% -54% Kenai Air Passengers (#) 92,863 94,478 94,333 92,901 87,466 -6% -6% Air Freight (lbs.) 1,415,967 1,418,710 1,682,795 1,675,090 2,274,844 36% 61% Air Mail (lbs.) 9,184 8,395 10,537 8,105 5,768 -29% -37% Nanwalek Air Passengers (#) 2,662 2,391 2,410 2,810 3,014 7% 13% Air Freight (lbs.) 300,521 239,067 187,306 169,837 1,914 -99% -99% Air Mail (lbs.) 16,549 15,941 22,213 22,921 23,879 4% 44% Port Graham Air Passengers (#) 2,045 1,897 2,334 2,564 3,059 19% 50% Air Freight (lbs.) 344,881 301,742 207,020 165,507 14,839 -91% -96% Air Mail (lbs.) 34,989 22,386 31,304 34,415 54,145 57% 55% Seldovia Air Passengers (#) 4,215 3,592 3,516 4,107 5,198 27% 23% Air Freight (lbs.) 136,651 113,764 72,963 58,328 3,030 -95% -98% Air Mail (lbs.) 72,892 48,609 73,305 73,265 89,097 22% 22% Seward Air Passengers (#) 5 3 10 3 1 -67% -80% Air Freight (lbs.) ------Air Mail (lbs.) ------Soldotna Air Passengers (#) 43 19 5 2 47 2250% 9% Air Freight (lbs.) - 7,432 9,635 5,031 712 -86% - Air Mail (lbs.) - - - - 0 - - Tyonek Air Passengers (#) 3,534 3,333 2,924 2,028 1,939 -4% -45% Air Freight (lbs.) 755,987 1,032,340 449,534 225,465 208,546 -8% -72% Air Mail (lbs.) 14,936 16,250 11,363 11,854 13,048 10% -13% Source: US Department of Transportation, Bureau of Transportation Statistics, T-100 Market Data
KPEDD 2018 Situations & Prospects page 27
6 Income
6.1 Total Personal Income to Peninsula Residents In 2016, the US Bureau of Economic Analysis (US BEA) reported that total personal income to Kenai Peninsula Borough residents was $2.97 billion5. This was $95 million or 3% less than came to the region’s residents in 2015. Personal income declined statewide as well, with Alaskans receiving 1% less in 2016 than they did in 2015.
During the five years from 2012 to 2016, total personal income to Kenai Peninsula Borough residents rose 7% from $2.77 billion to $2.97 billion (Figure 25). However, in 2016 dollars (adjusted for inflation) the rise was only 1% over this 5-year period (Figure 26).
Figure 25 – Total Personal Income, and Sources of Income to Kenai Peninsula Residents, 2012-2016 Change 1-year 5-year 2012 2013 2014 2015 2016 (2015- (2012- 2016) 2016) Total Personal $2,770,353,000 $2,759,412,000 $2,986,663,000 $3,061,059,000 $2,965,755,000 -3% 7% Income Sources of Income Work Earnings (by $1,788,331,000 $1,819,623,000 $1,889,853,000 $1,917,251,000 $1,820,237,000 -5% 2% place of residence) Dividends, $522,298,000 $473,059,000 $542,814,000 $570,719,000 $577,343,000 1% 11% Interest, & Rent Retirement (Social Security & $384,478,000 $395,729,000 $484,669,000 $505,851,000 $498,473,000 -1% 30% other) Income Maintenance (SSI, SNAP, child tax $54,492,000 $53,871,000 $59,367,000 $58,687,000 $59,642,000 2% 9% credit, Medicare/ Medicaid, PFDs, etc.) Unemployment $20,754,000 $17,130,000 $9,960,000 $8,551,000 $10,060,000 18% -52% Insurance Source: US BEA CA 30. November 2017 update, includes revisions for 2010-2015 with past year’s late returns and reporting.
5 Total personal income to Kenai Peninsula Borough residents, as measured by the US Bureau of Economic Analysis (BEA) is resident income only; it does not include income earned by non-resident workers in the region (such as non-resident oil and gas or seafood processing workers). Total personal income is the sum of all income that Kenai Peninsula Borough residents receive from all sources including work, benefits, self-employed proprietors' income, dividends, interest, rent, and transfer receipts (Social Security, other retirement earnings, Medicare/Medicaid benefits, veterans' benefits, and unemployment insurance benefits). Transfer receipts include Permanent Fund Dividend payments.
KPEDD 2018 Situations & Prospects page 28
Figure 26 – Total Income to Kenai Peninsula Borough Residents (Actual and Adjusted to 2016 dollars) $3,500,000,000 Adjusted to 2016 dollars $3,000,000,000
$2,500,000,000
$2,000,000,000
$1,500,000,000
$1,000,000,000
$500,000,000
$0 2010 2011 2012 2013 2014 2015 2016
Sources: US BEA CA 30, November 2017 update; Anchorage CPI (ADOLWD); inflation calcs: Sheinberg Assoc.
Year 2016 was challenging both statewide and in the Kenai Peninsula Borough. Thus the changes between 2015 and 2016 to sources of personal income (Figure 27) is quite different than the longer five-year change and patterns. For example: Work earnings shrank by 3% between 2015 and 2016, but over five years has grown 7%. Retirement income shrank by 1% between 2015 and 2016, but over five years has grown 30%. Unemployment insurance payments grew by 18% between 2015 and 2016, but over five years dropped 52%.
6.2 Sources of Income Of the total income in 2016 to Kenai Peninsula residents (Figure 27), US BEA data indicates that: 61% came from work earnings;
19% came from dividends, interest, and rent; and Figure 27 - Sources of Kenai 17% came from retirement income Peninsula Resident Income, 2016 2% came from transfer receipts/income 0.3% maintenance benefits Unemployment 17% (Supplemental Security Insurance 19% Retirement, Income [SSI], Earned Dividends, Income Tax Credits, Interest, Rent SNAP, WIC, etc.) and 2% PFDs. Income Maintenance Less than 1% came from (SSI, SNAP, unemployment Medicare/Medi 61% insurance payments caid, PFDs etc) Work Earnings
KPEDD 2018 Situations & Prospects page 29
6.3 Per Capita Income
Per capita income is computed by dividing total personal income by the Kenai Peninsula’s total population (every man, woman, and child - even newborn babies).
Per capita personal income on the Kenai Peninsula in 2016 was $50,691, a decline of 4% compared to 2015, according to the US BEA. This was 9% below the statewide per capita income of $55,646 (Figure 28). Alaska’s per capita income declined 2% in 2016 too.
Between 2015 and 2016, 13 boroughs or census areas in Alaska had a decline in per capita income, including the other Southcentral Alaska boroughs of Anchorage, Mat-Su, and the Valdez-Cordova Census area. Per capita income has not kept pace with inflation in the Kenai Peninsula Borough or statewide. For the five years between 2012 and 2016, the Anchorage Consumer Price Index (CPI) rose 7.8%, but statewide per capita income only rose 6%. In Kenai Peninsula Borough, per capita income rose 4% during these five years.
Figure 28 - Per Capita Income, 2012-2016 1-year 5-year 2012 2013 2014 2015 2016 change change (‘15 to ‘16) (’13 to ’16) Alaska $52,648 $51,455 $54,625 $56,528 $55,646 -2% 6% Aleutians East Borough $37,213 $39,624 $41,051 $50,926 $60,284 18% 62% Aleutians West CA $50,427 $50,195 $52,392 $52,515 $56,105 7% 11% Anchorage Municipality $59,199 $57,340 $60,881 $63,513 $62,317 -2% 5% Bethel CA $36,659 $35,744 $38,489 $39,712 $40,826 3% 11% Bristol Bay Borough $58,164 $59,879 $63,700 $65,488 $64,069 -2% 10% Denali Borough $59,680 $58,554 $67,864 $68,791 $69,535 1% 17% Dillingham CA $47,462 $47,601 $51,996 $52,691 $53,923 2% 14% Fairbanks North Star Borough $50,594 $48,626 $51,995 $53,820 $53,647 0% 6% Haines Borough $41,502 $43,799 $46,730 $51,129 $50,667 -1% 22% Hoonah-Angoon CA $46,405 $49,306 $53,739 $54,716 $55,511 1% 20% Juneau City and Borough $60,305 $58,943 $61,792 $62,670 $63,070 1% 5% Kenai Peninsula Borough $48,644 $48,361 $51,828 $52,737 $50,691 -4% 4% Ketchikan Gateway Borough $57,848 $58,086 $61,059 $63,229 $63,222 0% 9% Kodiak Island Borough $55,271 $53,373 $56,761 $59,691 $58,843 -1% 6% Kusilvak CA $27,887 $26,963 $30,348 $30,105 $31,301 4% 12% Lake and Peninsula Borough $51,052 $50,445 $52,350 $55,565 $54,491 -2% 7% Matanuska-Susitna Borough $43,670 $43,466 $45,352 $46,700 $44,880 -4% 3% Nome CA $42,984 $42,553 $47,198 $48,906 $50,254 3% 17% North Slope Borough $32,571 $32,521 $36,033 $38,437 $37,332 -3% 15% Northwest Arctic Borough $41,689 $41,917 $46,057 $46,576 $48,039 3% 15% Petersburg Borough $56,114 $62,790 $63,972 $65,428 $62,773 -4% 12% Prince of Wales-Hyder CA $36,509 $36,786 $38,921 $40,234 $40,750 1% 12% Sitka City and Borough $60,139 $62,501 $64,146 $65,853 $62,537 -5% 4% Skagway Municipality $85,297 $83,632 $82,049 $76,833 $77,977 1% -9% Southeast Fairbanks CA $38,245 $38,658 $40,922 $43,805 $43,473 -1% 14% Valdez-Cordova CA $57,220 $54,531 $60,265 $63,087 $61,337 -3% 7% Wrangell City and Borough $42,166 $42,044 $46,449 $47,141 $47,105 0% 12% Yakutat City and Borough $54,446 $61,510 $61,646 $59,131 $54,161 -8% -1% Yukon-Koyukuk CA $51,136 $49,040 $51,916 $51,890 $54,850 6% 7% Source: US Bureau of Economic Analysis, CA4, November 2017 update. CA= Census
KPEDD 2018 Situations & Prospects page 30
6.4 Household Income Household income is not available from the US BEA. It is available from the US Census Bureau's 5-year (2012-2016) American Community Survey (ACS). Household income is the total income to a household. A household includes all the people who occupy a housing unit; household income doesn’t change whether there are 1, 4, or 8 people in the household. The ACS defines total income as all income from persons 15 years or older6.
According to the ACS, the Kenai Peninsula Borough’s median household income in 2016 was $64,891. The average (mean) household income was $80,661. This is below Alaska’s median household income of $74,444 and the average household income of $92,191.
The ACS also reviews household income by category (Figure 29), showing that: 29% of Kenai Peninsula households made $100,000 or more in 2016 18% of households made less than $25,000
Figure 29 - Number of Kenai Peninsula Borough Households in each Income Category, 2016 Less than $10,000 1,007 $10,000 to $14,999 990 $15,000 to $24,999 1,899 $25,000 to $34,999 1,776 Median HH $35,000 to $49,999 2,349 income $50,000 to $74,999 4,193 ($64,891) $75,000 to $99,999 3,004 $100,000 to $149,999 3,742 $150,000 to $199,999 1,476 Average HH income $200,000 or more 1,045 ($80,661) source: 2012-2016 ACS 5-Year Survey
6.5 Indicators of Economic Hardship Approximately 11% of Kenai Peninsula Borough residents and 18% of households are struggling financially (Figure 30). Many struggling are families with children. For school year 2017/2018, the state Department of Education listed 3,257 students (42% of all students) in the borough school district as qualified for free or reduced fee lunches due to lower income (Figure 31). There were approximately 1,854 households (out of 21,481) in the Kenai Peninsula Borough receiving Food Stamps/SNAP in the past 12 months, according to the most recent data available (ACS 2012-2016 Survey). An estimated 11% of residents, 10% of families, 18% of households, and 25% of families headed by a female are living below poverty limits. Poverty limits are set by US HUD and in Alaska in 2018 are an individual making $15,180 or less; or a family of four making $31,380 or less.
6 Total income is the sum of the amounts reported for wage or salary income; net self-employment income; interest, dividends, or net rental or royalty income or income from estates and trusts; Social Security or Railroad Retirement income; Supplemental Security Income (SSI); public assistance or welfare payments; retirement, survivor, or disability pensions; and all other income. For the ACS 5-year survey, a 5-year “rolling average” of the number of households, and total income is used.
KPEDD 2018 Situations & Prospects page 31
Figure 30 - Economic Hardship Indictators, Kenai Peninsula Indicator 2016 Percent of Residents below Poverty 11.0% ±1.4% Percent of Families below Poverty 7.1% ±1.2% Percent of Families headed by a female with no male present, 24.9% ±5.9% below Poverty Number of Households receiving Food Stamps/SNAP 1,854 ±226 Percent of Students Qualifying for free or reduced fee school 42% lunch (‘17/’18) Number of Households earning $24,999 or less 3,896 ±576 Number of Families earning $24,999 or less 1,301 ±437 Sources: US Census ACS 2012-2016 5-Year Survey; Free & Reduced School Lunch Report, ADEED
Figure 31 - Number (and %) of Students Qualifying for Free or Reduced Fee Lunches7, by School Year District 10/11 13/14 14/15 15/16 16/17 17/18 Kenai Peninsula Schools 3,228 (42%) 2,923 (39%) 2,992 (38%) 2,925 (38%) 3,297 (43%) 3,257 (42%) Anchorage Schools 19,363 (38%) 22,898 (46%) 21,558 (47%) 21,352 (47%) 22,181 (49%) 22,430 (50%) Mat Su Schools 5,550 (37%) 5,868 (39%) 6,185 (41%) 6,503 (40%) 6,734 (41%) 7,009 (44%) Alaska Schools statewide 50,203 (42%) 56,383 (47%) 57,915 (50%) 56,891 (49%) 58,631(51%) 59,904 (52%) Source: Alaska DEED Child Nutrition Services Free & Reduced Program Reports
7 Families that earned less than 130% of the federal poverty limit (FPL) qualify for a free lunch and those earning up to 185% of the FPL qualify for a reduced fee lunch. Using the January 2018 federal poverty thresholds in Alaska, this is equal to a family of four earning less than $40,794 for a free lunch, or earning less than $58,053 for a reduced fee lunch. For a single parent with one child, annual income limits to qualify for a free lunch are $26,754 or $38,073 for a reduced fee lunch.
KPEDD 2018 Situations & Prospects page 32
7 Business Activity
Taxable sales are critical to provide revenue to run local and borough government; however, they are not a good indicator of business activity because many sales are for resale or wholesale and exempt from sales tax, or a variety of other borough exemptions apply. By contrast, gross business sales are a good proxy for business activity and investment. Both are reviewed here.
7.1 Gross Business Sales Total gross business sales in 2017 (Figure 32) on the Kenai Peninsula were $3.56 billion. This was an increase of 6% or $197 million compared to 2016.
With total personal income and wages both declining, it is a bit of good news to see gross sales or business activity rising. However, a portion of the increase is due to municipal code changes rather than actual increased business activity. Code change in 2017 required more non-profits to report sales, causing an increase especially in Arts & Entertainment and Services gross sales.
Lines of business with the highest increase in gross sales in 2017 compared to 2016 were: Retail Trade (+$177 million), pivots from a two year decline and sets a new record for retail sales Services (+$38 million) Mining, Quarrying, Oil & Gas (+$35 million), pivots from a two year decline Transportation & Warehousing (+$25 million) Also of note: although the total amount of gross sales activity for agriculture-forestry-fishing-hunting is not huge, gross sales increased 96% between 2016 and 2017, from $3.9 million to $7.7 million.
Lines of businesses with the largest decrease in gross sales in 2017 versus 2016 were: Construction Contracting (-$87 million, 5th year in a row of a decline) Administrative and Waste Management (-$22 million) Rental of Residential Properties (-$7 million, 1st decline after several years of growth) Professional and Scientific Services (-$6 million)
Despite the overall increase in gross sales activity on the Peninsula between 2016 and 2017, business sales declined slightly in the cities of Homer and Seward. Other cities as well as places outside of cities increased, some significantly (Figures 33 and 34). For example, the city of Soldotna had a $92 million dollar increase, or 21% jump, in gross business sales in 2017.
For more detail, refer to the City Profiles in chapter 19 of the 2018 Situations and Prospects Report, which shows each city’s gross business sales by type of business.
KPEDD 2018 Situations & Prospects page 33
Figure 32 - GROSS SALES by Type of Business, Kenai Peninsula Borough, with 1 and 5-year Change 1-Year Change 5-Year Change Business Type 2017 2016 2013 (2016 to 2017) (2013 to 2017) GRAND TOTAL $3,562,252,203 $3,365,263,955 $3,717,539,890 $196,988,248 6% -$155,287,687 -4% 1. Retail Trade $1,123,219,462 $945,655,655 $984,180,277 $177,563,807 19% $139,039,185 14% 2. Oil, Gas, Mining $659,054,693 $623,592,005 $552,522,750 $35,462,688 6% $106,531,943 19% 3. Construction Contr. $304,527,369 $391,597,672 $566,348,085 -$87,070,303 -22% -$261,820,716 -46% 4. Wholesale Trade $258,480,256 $239,834,004 $319,501,740 $18,646,252 8% -$61,021,484 -19% 5. Utilities $168,590,043 $158,495,022 $176,751,210 $10,095,021 6% -$8,161,167 -5% 6. Services $157,870,393 $120,144,891 $173,813,125 $37,725,502 31% -$15,942,732 -9% 7. Transportation, $131,007,648 $106,416,878 $96,307,920 $24,590,770 23% $34,699,728 36% Warehousing 8. Manufacturing $116,593,124 $105,130,451 $139,007,456 $11,462,673 11% -$22,414,332 -16% 9. Restaurant/Bar $99,444,379 $101,528,864 $92,841,409 -$2,084,485 -2% $6,602,970 7% 10. Hotel/Motel/B&B $94,643,824 $95,409,527 $88,861,805 -$765,703 -1% $5,782,019 7% 11. Rental Resid. Prop $74,120,613 $81,576,002 $65,203,539 -$7,455,389 -9% $8,917,074 14% 12. Guiding Water $72,149,337 $67,961,054 $60,368,575 $4,188,283 6% $11,780,762 20% 13. Prof, Scientif.,Tech Svs $68,760,387 $74,634,921 $137,673,975 -$5,874,534 -8% -$68,913,588 -50% 14. Information $37,407,782 $40,357,914 $55,491,122 -$2,950,132 -7% -$18,083,340 -33% 15. Admin, Waste Mgmt $36,642,276 $58,988,661 $81,561,362 -$22,346,385 -38% -$44,919,086 -55% 16. Health Care, Social Ast $34,899,117 $34,368,296 $20,369,553 $530,821 2% $14,529,564 71% 17. Rental Non-Resid. Prop $28,645,851 $33,940,204 $23,115,672 -$5,294,353 -16% $5,530,179 24% 18. Public Admin $26,611,556 $26,870,633 $21,096,106 -$259,077 -1% $5,515,450 26% 19. Telecommunications $14,652,210 $14,333,053 $11,365,241 $319,157 2% $3,286,969 29% 20. Rental Commercial Prop $13,824,408 $9,208,229 $6,766,394 $4,616,179 50% $7,058,014 104% 21. Arts & Entertainment $11,817,059 $7,495,161 $15,377,847 $4,321,898 58% -$3,560,788 -23% 22. Agriculture, Forestry, $7,713,162 $3,929,259 $3,259,614 $3,783,903 96% $4,453,548 137% Fishing, Hunting 23. Financial & Insurance $4,428,420 $8,242,551 $10,033,276 -$3,814,131 -46% -$5,604,856 -56% 24. Rental Self-storage, $4,402,840 $4,755,034 $4,610,668 -$352,194 -7% -$207,828 -5% MiniWhses 25. Educational Svs $4,180,143 $3,421,231 $2,945,892 $758,912 22% $1,234,251 42% 26. Rental Personal Prop $4,127,253 $3,346,741 $4,911,307 $780,512 23% -$784,054 -16% 27. Guiding Land $4,056,463 $3,707,234 $2,701,107 $349,229 9% $1,355,356 50% 28. Remediation Svs $377,189 $322,808 $536,572 $54,381 17% -$159,383 -30% 29. Other $7,281 - - 30. Trailer Court - - $16,291 Source: Kenai Peninsula Borough Finance Department - confidential NOTES: Some of 2016-2017 increase in Arts & Entertainment and Services due to 2017 code change that requires more non-profits to report more sales. Transportation & Warehousing increase partially due to newly registered oilfield-related businesses. Finance & Insurance decline appears linked to closures in financial companies such as banks or CPAs. Admin & Waste Management decreases partly due to declines in cleaning industry and some business closures. Construction Contracting varies linked to oil & gas and government spending and contracts; gross sales been declining for 5 years
Figure 33 - Gross Sales by Place, 2013 - 2017 $3,000,000,000 2013 $2,500,000,000 2014 2015 $2,000,000,000 2016 $1,500,000,000
2017 $1,000,000,000
$500,000,000
$0 Outside of Homer Kenai Seldovia Seward Soldotna Cities 2013 $436,004,144 $584,960,466 $3,698,911 $238,980,430 $500,663,480 $1,953,232,459 Source: KPB 2014 $419,675,444 $581,506,421 $4,674,521 $239,381,655 $479,279,886 $2,607,296,242 Finance 2015 $403,102,471 $629,610,107 $4,223,683 $282,063,853 $482,124,898 $1,950,706,451 Deptartment Sales Tax 2016 $411,826,548 $547,259,387 $7,340,762 $258,511,392 $436,379,712 $1,703,946,154 Division 2017 $410,790,439 $562,174,507 $8,446,115 $257,877,692 $528,246,814 $1,794,716,637
Figure 34 - Change in Gross Sales, by Place 2017 Total 1-Yr Change 5-Yr change
Gross Sales 2016-2017 2013-2017 Homer $410,790,439 -$1,036,109 -0.3% -$25,213,705 -5.8% Kenai $562,174,507 $14,915,120 2.7% -$22,785,960 -3.9% Seldovia $8,446,115 $1,105,353 15.1% $4,747,204 128.3% Seward $257,877,692 -$633,700 -0.2% $18,897,262 7.9% Soldotna $528,246,814 $91,867,102 21.1% $27,583,334 5.5% Outside of Cities $1,794,716,637 $90,770,483 5.3% -$158,515,821 -8.1% TOTAL Kenai Peninsula Borough $3,562,252,203 $196,988,248 5.9% -$155,287,686 -4.2% Source: KPB Finance Department, Sale Tax Division
7.2 Taxable Business Sales Total taxable sales in 2017 (Figure 35) on the Kenai Peninsula were $1.06 billion, up by $43 million or 4% since 2016.
The three lines of business with the highest increase in taxable sales in 2017 were: Retail Trade (+$21 million) Utilities (+$7.5 million) Services (+$4.6 million)
The three lines of business with the largest decrease in taxable sales (with the size of decline in parentheses) were: Information Services (-$2.8 Rentals of Non-residential Restaurants/Bars (-$730,000) million) Property (-$955,000) The dollar drop in value for all these declines was much smaller than any drop that occurred in 2016.
KPEDD 2018 Situations & Prospects page 35
Figure 35 - TAXABLE SALES by Type of Business, Kenai Peninsula Borough, with 1 and 5-Year Change Business Type 2017 2016 2013 1 year change 5 year change Grand Total $1,055,692,475 $1,012,417,925 $1,017,866,033 $43,274,550 4% $37,826,443 4% 1. Retail Trade $490,262,863 $469,290,233 $492,210,171 $20,972,630 4% -$1,947,308 0% 2. Restaurant/Bar $94,480,556 $95,210,940 $85,303,841 -$730,384 -1% $9,176,715 11% 3. Hotel/Motel/B&Bs $82,822,461 $83,474,417 $75,549,517 -$651,956 -1% $7,272,944 10% 4. Utilities $80,818,311 $73,336,506 $64,581,694 $7,481,805 10% $16,236,617 25% 5. Guiding Water $58,923,540 $55,270,781 $48,211,422 $3,652,759 7% $10,712,118 22% 6. Services $41,187,912 $36,543,313 $35,428,030 $4,644,599 13% $5,759,883 16% 7. Wholesale Trade $27,893,516 $25,437,208 $31,831,157 $2,456,308 10% -$3,937,641 -12% 8. Information $27,401,499 $30,218,839 $44,698,273 -$2,817,340 -9% -$17,296,774 -39% 9. Rental Residential $24,501,766 $24,573,958 $22,579,038 -$72,192 0% $1,922,728 9% Property 10. Public Administration $20,256,601 $18,522,398 $17,290,842 $1,734,203 9% $2,965,759 17% 11. Professional, Scientific $16,464,388 $16,061,922 $15,986,117 $402,466 3% $478,271 3% and Technical Svs 12. Construction $13,030,423 $12,895,910 $12,334,522 $134,513 1% $695,901 6% Contracting 13. Telecommunications $12,139,635 $11,822,009 $10,998,660 $317,626 3% $1,140,975 10% 14. Manufacturing $9,450,061 $8,758,749 $9,266,357 $691,312 8% $183,704 2% 15. Administrative, Waste $9,346,299 $9,386,095 $10,041,226 -$39,796 0% -$694,927 -7% Management, 16. Rental Non-Residential $8,298,177 $9,253,574 $8,482,963 -$955,397 -10% -$184,786 -2% Prop 17. Arts and Entertainment $6,727,088 $6,042,348 $4,712,293 $684,740 11% $2,014,795 43% 18. Transportation and $6,466,753 $4,106,553 $4,215,629 $2,360,200 57% $2,251,124 53% Warehousing 19. Oil, Gas, Mining $5,621,764 $4,677,227 $7,650,051 $944,537 20% -$2,028,287 -27% 20. Rental Commercial Prop $3,298,775 $2,536,944 $2,166,046 $761,831 30% $1,132,729 52% 21. Rental Personal Prop $3,008,325 $2,294,616 $2,733,591 $713,709 31% $274,734 10% 22. Rental of Self-storage & $2,566,600 $2,719,667 $2,454,094 -$153,067 -6% $112,506 5% Mini-warehouses 23. Agriculture, Forestry, $2,514,819 $1,922,230 $2,027,171 $592,589 31% $487,648 24% Fishing & Hunting 24. Guiding Land $2,370,867 $2,407,039 $1,790,807 -$36,172 -2% $580,060 32% 25. Educational Services $2,234,292 $1,990,614 $1,667,194 $243,678 12% $567,098 34% 26. Health Care and Social $1,906,763 $2,160,082 $1,747,100 -$253,319 -12% $159,663 9% Assistance 27. Finance and Insurance $1,441,792 $1,232,016 $1,374,245 $209,776 17% $67,547 5% 28. Remediation Services $256,629 $220,135 $523,247 $36,494 17% -$266,618 -51% Trailer Court $10,735 Source: Kenai Peninsula Borough Finance Department, Sales Tax Division
KPEDD 2018 Situations & Prospects page 36
7.3 Highest Value Properties on Peninsula The 25 property owners with the highest assessed property value in the Kenai Peninsula Borough (Figure 36) continue to be oil and gas producers, companies that supply goods and services to or transport oil and gas, telecommunications companies (ACS, Alaska Wireless, GCI), utilities (Enstar), major retailers (Walmart, Fred Meyer), and a tourism business.
Figure 36 - Top 20 Property Tax Payers 2017 Total Assessed 2016 2015 2014 2013 Taxpayer Rank Property Value** Rank Rank Rank Rank Hilcorp Energy Company 1 $616,229,500 1 1 1 1 Tesoro Alaska 2 $250,050,495 4 3 3 3 Furie Operating Alaska, LLC 3 $244,230,660 2 11 Conoco Phillips 4 $185,962,262 3 2 2 2 Cook Inlet Natural Gas Storage Alaska LLC 5 $105,651,680 5 4 4 5 Bluecrest Energy Inc 6 $95,894,740 11 Harvest Alaska 7 $86,532,240 6 9 Cook Inlet Energy, LLC 8 $77,576,470 7 5 9 10 Alaska Pipeline 9 $74,581,542 8 7 7 8 ACS 10 $69,946,155 9 6 5 6 Enstar Natural Gas 11 $45,932,990 10 10 10 20 Wal-Mart Real Estate Business Trust 12 $24,635,400 12 12 11 11 Agrium US Inc 13 $21,865,512 16 15 18 17 Fred Meyer 14 $21,292,448 15 17 20 19 Alaska Wireless Network LLC 15 $16,378,671 17 Kenai Pipeline Company 16 $15,917,520 20 GCI 17 $14,585,162 21 16 Ocean Marine 18 $14,091,030 23 Leirer Enterprises LLC 19 $13,581,100 Spartan Offshore Drilling LLC 20 $13,349,940 24 20 CIRI Alaska Tourism Corporation 21 $13,060,500 22 Aix Energy LLC 22 $12,922,230 19 18 Miller Energy Resources, Inc 23 $12,770,340 25 19 Alaska Growth Properties LLC 24 $12,264,600 Homer Spit Properties 25 $12,000,600 Alaska LNG Project LLC 13 Saxon Drilling 14 13 13 US LP 18 Xto Energy Inc 8 6 7 BP Exploration 14 12 13 Weatherford US LP 16 15 Kenai Offshore Ventures, LLC 8 9 Kenai Kachemak Pipeline 14 12 Armstrong Cook Inlet LLC 16 15 Source: Kenai Peninsula Borough Finance Dept. ** Combined assessed value for property, real, and oil and gas
KPEDD 2018 Situations & Prospects page 37
8 Overview: Work on the Kenai Peninsula
To understand the work economy, this section (and Figures 37-45) combines information on the number of employees or jobs (average annual) and their wages from the 2017 ADOLWD QCEW, with the number of self-employed business entrepreneurs (without employees) and their business receipts (net earnings) from the 2016 US Census Bureau’s Nonemployers Statistics. Read more about these data, and the way they are combined in the footnote8, below.
8.1 Workforce: Number of Jobs Declined, Number of Self-Employed Entrepreneurs Rose The number of employee jobs on Figure 37 – Kenai Peninsula Workforce, 2010-2017 the Kenai Peninsula rose through 2014, and has been declining 20,782 20,704 20,400 since (Figure 37) when the price 20,017 19,993 19,818 19,438 of oil crashed and Alaska’s 19,123 economy began a slide into recession. (Total employment statewide began dropping in 2016.) No. of Employees (avg. ann.)
The number of self-employed business proprietors (without employees) has been growing on the Peninsula since 2014, coincident with reduced wage No. of Self-employed Proprietors, no and salary employment (Figure employees 37).
Since the overall population on the Peninsula has risen since 2014 as well, it could mean that some who 6,543 6,622 6,763 6,117 6,126 6,206 6,117 6,160 lost their jobs decided to stay and open small businesses. 2010 2011 2012 2013 2014 2015 2016 2017
Sources: ADOLWD QCEW- 2017-2010; US Census Nonemployer Statistics- 2009-2016 8 About the Combined Dataset in this Section:
Wage and employment data from the Alaska Department of Labor and Workforce Development (ADOLWD) Quarterly Census on Employment and Wages (QCEW) is the most common dataset used in Alaska to understand economic activity. However, this important dataset does not include earnings or a count of those who are self-employed (like most commercial fishermen) or those who own their own small businesses (sole proprietors). Data on these individuals is available through the US Census Nonemployer Statistics database, which is based on US tax returns. Matching NAICS codes from these two data sources and aggregating them provides a more complete picture of the whole economy than either data set alone.
The availability of Nonemployer Statistics lags QCEW data by one year. Thus this section of the 2018 Situations & Prospects (S&P) combines 2017 QCEW data with 2016 Nonemployer data. It is common to do this to understand the whole work economy, but remember that it is blending data for two years. When a time series does this consistently (as the S&P Report does) this provides a meaningful review of both totals and trends.
KPEDD 2018 Situations & Prospects page 38
8.2 Wages and Earnings: Decline for a 2nd Year Workforce earnings - both from employee wages and self-employed proprietor earnings - were in decline for a 2nd year on the Peninsula as well as in Alaska.
Figure 38 – Work Income, Kenai Peninsula, 2010-2017 $972,205,459 $938,916,522 $865,877,141 $986,023,133 $953,673,438 $932,287,166 $787,672,297 $819,415,551
$291,660,000 $280,868,000 $284,660,000 $246,342,000 $297,232,000 $273,343,000 $277,153,000 $271,856,000
2010 2011 2012 2013 2014 2015 2016 2017
Wages to Employees Receipts (Net Earnings) to Self-employed Proprietors
Sources: ADOLWD QCEW- 2017-2010; US Census Nonemployer Statistics- 2009-2016
Combined wages and self-employment earnings on the Kenai Peninsula totaled $1.2 billion in 2017 (Figure 39). This was a decline of $19 million or 2% between 2016 and 2017, though less than the prior year’s decline of $60 million or 7% between 2015 and 2016.
Figure 39 - Workforce and Earnings Summary and Change, Kenai Peninsula 1-Year Change 5-year Change 2013 2016 2017 2016-2017 2013-2017 Number of employees/jobs 20,704 19,993 19,818 -175 -1% -886 -4% (avg. ann.) Number of self- employed business 6,160 6,622 6,763 141 2% 603 10% proprietors Combined total 26,864 26,615 26,581 -34 0% -283 -1% Employee wages $953,673,438 $938,916,522 $932,287,166 -$6,629,356 -1% -$21,386,272 -2% Self-employed $277,153,000 $284,660,000 $271,856,000 -$12,804,000 -4% -$5,297,000 -2% business receipts Combined total $1,230,826,438 $1,223,576,522 $1,204,143,166 -$19,433,356 -2% -$26,683,272 -2% Sources: ADOLWD QCEW- 2017,2016, 2013; US Census Nonemployer Statistics- 2016, 2015, 2012
KPEDD 2018 Situations & Prospects page 39
Total work earning power on the Kenai Peninsula rose between 2010 and 2015, and has fallen since the 2015 peak. Compared to 2010, earnings on the Kenai Peninsula were up 16%; however, when adjusted to 2017 dollars (adjusted for inflation), the increase has only been 4% since 2010 (Figure 40).
Figure 40 - Work Income, Kenai Peninsula (wages + self-employed combined) $1,400,000,000 Adjusted to 2017 dollars $1,300,000,000
$1,200,000,000
$1,100,000,000
$1,000,000,000
$900,000,000
$800,000,000 2010 2011 2012 2013 2014 2015 2016 2017 Sources: ADOLWD QCEW, 2010- 2017; US Census Nonemployer Statistics, 2009- 2016
8.3 Top Sectors When the Kenai Peninsula’s 19,818 employees and 6,763 self-employed sole proprietors are combined by sector:
The MOST WORKERS (average annual) were engaged in (Figure 41 and 43): 1. Health Care and Social Assistance - 3,586 2. Local Government** - 3,365 3. Retail Trade - 3,040 4. Accommodations and Food Service - 2,738 5. Agriculture, Forestry, Fishing and Hunting (primarily commercial fishing) - 1,779
The HIGHEST TOTAL EARNINGS on the Peninsula came from (Figure 42 and 43): 1. Local Government**- $175 million 2. Health Care and Social Assistance - $155 million 3. Oil & Gas, Mining - $96 million 4. Agriculture, Fishing, Forestry, Hunting (primarily commercial fishing) - $91 million 5. Retail Trade - $89 million
The HIGHEST WAGES (average annual) go to employees in (does not include self-employed): 1. Oil & Gas, Mining ($115,163/year) 2. Utilities ($110,365/year) 3. Securities, Investments ($94,304/year) 4. Federal Government ($79,357/year) 5. Wholesale, Electronic Markets ($77,454/year)
HIGHEST GROSS BUSINESS SALES: 1. Retail Trade - $1,123,219,462 (record high) 2. Oil and Gas, Mining/Quarrying - $659,054,693 3. Construction Contracting - $304,527,369 4. Wholesale Trade - $258,480,256 5. Utilities - $168,590,043
KPEDD 2018 Situations & Prospects page 40
PEAK EMPLOYMENT was in June (22,333 employees). 12 types of businesses had AT LEAST 500 EMPLOYEES IN JUNE: 1. Local Government** - 3,611 employees 2. Food Services & Drinking Places -1,989 3. Accommodation - 1,366 4. Hospitals (Non-Municipal) & Nursing/ Residential Care - 1,359 5. Out-Patient Health Care - 1,358 6. State Government - 1,157 7. General Merchandise Retail - 756 8. Food & Beverages Retail - 684 9. Food Manufacturing (mostly seafood processing) - 606 10. Social Assistance - 633 11. Specialty Trade Contractors - 605 12. Oil & Gas & Mining Support Activities - 534
In addition to the list above of employees, there were over 500 self-employed business proprietors in: 13. Fishing - 1,586 14. Construction - 631 15. Professional, Scientific, and Technical Services - 553 16. Other Services – 536 17. Retail Trade – 509
WORKFORCE AND EARNINGS SPLIT: When the number of employees and their wages on the Kenai Peninsula are combined with the number of self- employed business proprietors and their earnings (Figure 43), this big picture shows that: • The total workforce in 2017 was 26,581 workers, essentially unchanged from 2016 (26,615). • Direct work earnings totaled $1.2 billion in 2017, which was a decline of $19 million or 2% compared to 2016. • The workforce and their earnings were: o Government – 19% of workforce, 23% of earnings o Goods-Producing – 20% of workforce, 27% of earnings o Service-Providing – 62% of Workforce, 50% of earnings
** Local government includes all cities, the borough, all schools, and all tribal governments.
KPEDD 2018 Situations & Prospects page 41
Figure 41 - Kenai Peninsula Borough Total Workforce, by Sector (Employees AND Self-Employed)
0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 Health Care And Social Assistance 3,586 Local Government 3,365 Retail Trade 3,040 Accommodation And Food Services 2,738 Agriculture, Forestry, Fishing, Hunting 1,779 Construction 1,492 Other Services 1,339 State Government 1,210 Transportation And Warehousing 1,170 No. Employees Manufacturing 1,060 Professional, Scientific, Tech. 972 No. Self-Employed Oil and Gas, Mining 862 Proprietors Real Estate, Rental And Leasing 724 x,xxx Total Workforce Arts, Entertainment And Recreation 686 Administrative And Waste Services 559 Finance And Insurance 494 Federal Government 368 Wholesale Trade 300 Sources: 2017 Employment (average annual) Educational Services 277 ADOLWD, QCEW; 2016 Self-employed Proprietors, Information 273 US Nonemployer Statistics Utilities 236 Note that Local Government includes all cities, the Mgmt. Of Companies & Enterprises 28 borough, all schools, and all tribal governments. Unclassified Establishments 24
Figure 42 - Kenai Peninsula Borough Total Work Earnings, by Sector (Employees AND Self-Employed) $0 $40,000,000 $80,000,000 $120,000,000 $160,000,000 $200,000,000
Health Care And Social Assistance $155,399,649 Local Government $175,528,088 Retail Trade $89,037,104 Accommodation And Food Services $68,555,149 Agriculture, Forestry, Fishing, Hunting $90,481,313 Construction $80,084,695
Other Services $35,135,924 State Government $68,040,904 Transportation And Warehousing $54,349,490 Manufacturing $64,135,097 Professional, Scientific, Tech. $37,737,519 Mining $96,160,262 Real Estate, Rental And Leasing $46,903,798 Arts, Entertainment And Recreation $13,499,980 Administrative And Waste Services $14,422,967
Finance And Insurance $19,032,676 $ Amt. of Employee Wages Federal Government $29,203,301 Wholesale Trade $20,317,443 $Amt. of Self-employed Educational Services $5,253,563 Proprietors Earnings Information $12,450,948 $xx,xxx Total Work Income Utilities $25,529,269 Mgmt. Of Companies & Enterprises $1,782,219 Unclassified Establishments $1,101,809
Figure 43 -Total Workforce and Earnings Summary (Employees AND Self-Employed), Kenai Peninsula Borough WORKFORCE WORK EARNINGS No. of Self- No. of Grand Receipts Grand Employed Employees Total Self-Employed Wages, Total Prop. (avg. ann.) Workforce Prop. Employees Earnings ALL Industries 6,763 19,818 26,581 $271,856,000 $932,287,166 $1,204,143,166 Local Government n/a 3,365 3,365 n/a $175,528,088 $175,528,088 State Government n/a 1,210 1,210 n/a $68,040,904 $68,040,904 Federal Government n/a 368 368 n/a $29,203,301 $29,203,301 Total, Government - 4,943 4,943 - $272,772,293 $272,772,293 Agriculture, Forestry, 1,665 114 1,779 $86,411,000 $4,070,313 $90,481,313 Fishing, Hunting Construction 631 861 1,492 $31,072,000 $49,012,695 $80,084,695 Manufacturing 197 863 1,060 $7,176,000 $56,959,097 $64,135,097 Oil and Gas, Mining 50 812 862 $2,648,000 $93,512,262 $96,160,262 Total, Goods-Producing 2,543 2,650 5,193 $127,307,000 $203,554,367 $330,861,367 Health Care and Social 278 3,308 3,586 $9,743,000 $145,656,649 $155,399,649 Assistance Retail Trade 509 2,531 3,040 $15,988,000 $73,049,104 $89,037,104 Accommodation and Food 393 2,345 2,738 $17,667,000 $50,888,149 $68,555,149 Services Transportation and 238 932 1,170 $12,377,000 $41,972,490 $54,349,490 Warehousing Other Services 536 803 1,339 $13,739,000 $21,396,924 $35,135,924 Professional, Scientific, Tech. 553 419 972 $16,953,000 $20,784,519 $37,737,519 Real Estate, Rental and 468 256 724 $32,934,000 $13,969,798 $46,903,798 Leasing Arts, Entertainment and 415 271 686 $8,292,000 $5,207,980 $13,499,980 Recreation Administrative and Waste 340 219 559 $7,061,000 $7,361,967 $14,422,967 Services Finance and Insurance 200 294 494 $2,495,000 $16,537,676 $19,032,676 Wholesale Trade 67 233 300 $3,860,000 $16,457,443 $20,317,443 Educational Services 163 114 277 $2,386,000 $2,867,563 $5,253,563 Information 55 218 273 $1,019,000 $11,431,948 $12,450,948 Utilities 5 231 236 $35,000 $25,494,269 $25,529,269 Mgmt. Of Companies and - 28 28 $1,782,219 - $1,782,219 Enterprises Unclassified Establishments - 24 24 $1,101,809 - $1,101,809 Total, Service-Providing 4220 12,226 16,446 $147,433,028 $453,076,479 $600,509,507 Sources: 2017 Employment (average annual) ADOLWD, QCEW; 2016 Self-employed Proprietors, US Nonemployer Statistics
KPEDD 2018 Situations & Prospects page 43
8.4 The Split between Private Sector and Government Work
The private sector dominates the work scene on the Kenai Peninsula, especially when employees and self-employed business owners are considered together. This combined data on working shows that government employment is only 19% of the total. However, government employees earned 23% of all work income (Figure 44).
Figure 44 – Jobs and Earnings, By Type of Worker, Kenai Peninsula
Workforce Composition, Kenai Peninsula Workforce Earnings, Kenai Peninsula Local Govt Self employed Self employed Employees** Proprietors Local Govt Proprietors 25% 22% Employees** 13% 15% State Govt Employees 5% State Govt 1% 6% Employees Federal Govt Employees 2% Federal Govt Employees Private Sector Private Sector Employees 56% Employees 55%
Sources: ADOLWD QCEW 2017; US Census Nonemployer Statistics, 2016
Looking only at employees (not including self-employed proprietors) 5-year trends show that the number of federal and local government jobs has increased, while the number of state government and private sector goods-producing and service-providing jobs has shrunk (Figure 45).
Job losses in private goods-producing jobs hurt the most because these are the highest wage jobs on the Peninsula, and because goods-producing jobs create a demand for service-providing jobs.
Figure 45 - Change in Employment by Type of Job, 2013-2017 Kenai Peninsula Borough (employees only, does not include self-employed proprietors) Change in Number of 2017 Average Type of Job Jobs Between Monthly 2013-2017 Wages
Federal Government 10 $6,613 State Government -43 $4,686 Local Government 156 $4,347
Private-Good Producing -905 $6,401 Private-Service Providing -105 $3,108 Total, All -887 $3,920 Source: ADOLWD QCEW, 2017 and 2013
KPEDD 2018 Situations & Prospects page 44
9 Resident-Nonresident Workforce
In 2016, 70% of the workers on the Kenai Peninsula were local residents (Figure 46). Of the 30% of the Kenai Peninsula workers who did not live in the region, 7% lived in other parts of Alaska, and 23% were not residents of Alaska (Figure 47).
Figure 46 - Worker Residency by Borough or Census Area, 2016 Non- Total Local Percent Non- Borough or Census Area local workers residents local residents residents Aleutians East Borough 4,241 762 18.0% 334 3,145 Aleutians West Census Area 5,057 2,083 41.2% 361 2,613 Anchorage Municipality 165,368 125,397 75.8% 17,885 22,086 Bethel Census Area 10,204 7,983 78.2% 1,086 1,135 Bristol Bay Borough 4,242 385 9.1% 364 3,493 Denali Borough 4,074 621 15.2% 558 2,895 Dillingham Census Area 3,972 2,052 51.7% 387 1,533 Fairbanks North Star Borough 47,791 34,150 71.5% 5,352 8,289 Haines Borough 1,518 815 53.7% 108 595 Hoonah-Angoon Census Area 1,168 727 62.2% 119 322 Juneau, City and Borough 20,977 15,410 73.5% 1,626 3,941 Kenai Peninsula Borough 28,963 20,394 70.4% 1,856 6,713 Ketchikan Gateway Borough 9,486 6,019 63.5% 834 2,633 Kodiak Island Borough 8,317 5,706 68.6% 379 2,232 Kusilvak Census Area 3,673 3,162 86.1% 277 234 Lake and Peninsula Borough 1,871 680 36.3% 204 987 Matanuska-Susitna Borough 30,022 23,589 78.6% 2,782 3,651 Nome Census Area 5,606 4,373 78.0% 527 706 North Slope Borough 19,584 3,483 17.8% 9,297 6,804 Northwest Arctic Borough 4,471 3,030 67.8% 687 754 Petersburg Borough 2,085 1,102 52.9% 144 839 Prince of Wales-Hyder Census Area 3,290 2,259 68.7% 201 830 Sitka, City and Borough 5,866 3,681 62.8% 297 1,888 Skagway Municipality 1,697 497 29.3% 105 1,095 Southeast Fairbanks Census Area 3,414 1,807 52.9% 1,002 605 Valdez-Cordova Census Area 7,603 3,764 49.5% 921 2,918 Wrangell, City and Borough 1,223 781 63.9% 126 316 Yakutat, City and Borough 421 265 62.9% 47 109 Yukon-Koyukuk Census Area 3,269 2,149 65.7% 665 455 Source: ADOLWD, Nonresidents Working in Alaska, 2016
KPEDD 2018 Situations & Prospects page 45
9.1 Statewide Resident-Nonresident Worker Trends
To prepare this information, ADOLWD matches QCEW information with PFD application information. This data counts jobs/employees by place of work and shows that in 2016, for Alaska as a whole, an estimated 21.5% of all workers were nonresidents, essentially the same as 2015. There were 89,411 nonresidents working in Alaska in 2016 who earned $2.5 billion in wages (Kreiger, K., et. al. ADOLWD, Research and Analysis Section. Nonresidents Working in Alaska: 2016). The numbers of resident and nonresident workers both fell in 2016.
Figure 47 - Percent Nonresidents, 2016
Source: ADOLWD, Nonresidents Working in Alaska: 2016
Statewide, the seafood processing industry is the largest employer of nonresidents. On the Kenai Peninsula in 2016, 67% of those working in seafood processing were nonresidents according to the ADOLWD Nonresidents Working in Alaska 2016 publication.
Other industries with high percentages of nonresidents included oil and gas, construction, metal mining, and other visitor-related industries. These industries have at least one of the following: high seasonality, a need for specialized skills, or remote work sites. In terms of income that Alaska loses to nonresidents, the oil and gas industry has a disproportionate impact because wages in oil and gas are much higher than the statewide average. The Gulf Coast region’s mining industry, which is mostly Cook Inlet oil and gas extraction, was reported at 35.6% nonresident.
Since fishing is economically important on the Peninsula, it is interesting to note that while the industry aggregation of “agriculture-forestry fishing and hunting” only accounted for 1% of all nonresident workers in the state, when ADOLWD looks more deeply at this dataset, it showed that in 2016 fishermen are 68% nonresident.
KPEDD 2018 Situations & Prospects page 46
10 Industry Spotlight | Government Workforce
Government jobs are generally year-round jobs with good benefits that provide economic stability on the Peninsula; this is especially important during swings in private sector employment.
The number of employees in local and federal government on the Peninsula grew slightly in 2017. Employees of local, tribal, state, and federal (civilian) government agencies together accounted for 25% of the workforce (employees-only), or if self- employed small business owners are included, 19% of the total workforce on the Kenai Peninsula. This split is about the same as it is statewide.
High average wages mean that while government employment is 19% of the total workforce on the Peninsula, its employees earned 23% of all work income (see Figure 44).
Based on 2016 and 2017 personal communications and detailed ADOLWD data, local government employees are split approximately as follows: 37% working for the borough and cities, 34% for the school district, 16% for tribal governments including health care facilities under tribal ownership, and 13% employed by one of the municipal-owned hospitals (which should be re-coded to Health Care by ADOLWD like the other hospitals).
Most are familiar with the Peninsula’s borough and city governments, but may not know that local government also includes tribes, which provide a diversity of services to their tribal members. Local tribal governments include Kenaitze Indian Tribe, Ninilchik Traditional Council, Seldovia Village Tribe, Tyonek Village, and Chugachmiut. In 2017, 8% of Kenai Peninsula Borough residents listed their race as Alaska Native, and 12% listed their race as Alaska Native and other. Peninsula tribal governments offer a diversity of services, including health care (e.g. Dena’ina Wellness Center and more) and job training, to serve their tribal members and others.
Figure 48 - Government Wages Figures 49 - Number Government Kenai Borough Employees, Kenai Borough
$200,000,000 3,209 3,259 3,247 3,287 3,365 $180,000,000
$160,000,000 $140,000,000
$120,000,000
$100,000,000
$80,000,000 1,253 1,268 1,249 1,234 1,210 $60,000,000
$40,000,000 358 348 355 352 368 $20,000,000
$0 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017
KPEDD 2018 Situations & Prospects page 47
11 Industry Spotlight | Tourism
Kenai Peninsula’s diverse attractions include fishing, wildlife viewing, hunting, RV-ing, boating, hiking, biking, skiing, marathons, camping/ backpacking, ATV-ing, snow machining, kayaking, canoeing, rowing, sailing, snowshoeing and more. The region also benefits from developed parks and recreation centers with playgrounds, tracks, rinks, and swimming pools. These assets and experiences are enjoyed by residents and visitors alike. The Peninsula’s road accessible rivers, lakes, bays, mountains, glaciers, fish and wildlife will continue to ensure the area is an important travel destination for people from Anchorage, the rest of the state, the US, and the world.
Tourism continues to be a “strong suit” and competitive advantage for the Kenai Peninsula.
Well known for its fishing, the Kenai Peninsula also offers adventure, scenic beauty, glaciers, and wildlife; these natural assets are increasingly valuable in the growing “experience economy,” in which consumers prize experiences. Business sales of land based guiding are increasing, indicating success in efforts to diversity tourism experiences.
Gasoline prices have been increasing since 2015, according to several national reports and GasBuddy.com, which is potentially putting a damper on vehicle and RV travel. This could especially impact Alaskans who may be struggling in the statewide recession that began in summer of 2014. Countering this is the strength of the national economy, which encourages people to travel more and while vacationing spend more.
This chapter covers three types of indicators for the tourist economy on the Kenai Peninsula: wages, earnings and employment of tourism businesses; visitor numbers; and the sport and charter fishing activities on the Peninsula.
Wages and the number of employees in tourism related work held steady in 2017. Wage growth beat inflation. The number of self-employed business owners in the visitor industry on the Peninsula rose in 2017 as did their earnings.
Gross business sales from tourism businesses were up 2% in 2017 to $282 million, and up 8% over five years. Sales of lodging, at restaurants and bars (not all linked to tourism), and of guided water-based experiences like fishing led tourism business activity. However, there was a decline in 2017 for total restaurant/bar and lodging sales.
In 2017, the number of visitors to the Kenai Peninsula remained steady to slightly declining, with small losses driven by a drop in cruise ship and ferry passengers.
The number of days that anglers sportfished in the region was down for a second year in a row, led by a decline in Kenai Peninsula freshwater effort as well as days fished from shoreline. There were increased fishing days though for West Cook Inlet freshwater fishing and by those who used a boat to saltwater fish in Cook Inlet.
11.1 Business Activity, Workers, Earnings
Seven Years of Growth - Since tourism businesses recovered from the 2008-2010 US recession, which resulted in less travel almost everywhere during those years, overall tourism activity on the Kenai Peninsula - as reflected in gross business sales - has increased every year except 2014 when it had a slight dip (Figures 50 A and B).
In 2017, gross sales for visitor-related businesses grew by $6 million or 2% compared to 2016. Looking at the details, business sales in 2017 increased for both Land and Water Guiding activities; were up for Arts and Entertainment (note that arts and entertainment sales can vary widely year to year); and were down for both Lodging and for Restaurants and Bars.
KPEDD 2018 Situations & Prospects page 48
While sales of land guiding activities have the smallest overall dollar value, this part of the tourist economy has grown significantly over the last five years. This shows the result of focused efforts to diversify tourism from fishing to other activities that take advantage of all the Peninsula has to offer.
Figure 50 A and B - Gross Sales, Visitor Related Businesses, Kenai Peninsula Borough 1 year change 5 year change Business Type 2013 2016 2017 (2016-2017) (2013-2017) Restaurant/Bar $92,841,409 $101,528,864 $99,444,379 -$2,084,485 -2% $6,602,970 7% Hotel/Motel/Bed & $88,861,805 $95,409,527 $94,643,824 -$765,703 -1% $5,782,019 7% Breakfast Guiding Water $60,368,575 $67,961,054 $72,149,337 $4,188,283 6% $11,780,762 20% Guiding Land $2,701,107 $3,703,234 $4,056,463 $353,229 10% $1,355,356 50% Arts and $15,377,847 $7,495,161 $11,817,059 $4,321,898 58% -$3,560,788 -23% Entertainment TOTALS $260,150,743 $276,097,840 $282,111,062 $6,013,222 2% $21,960,319 8%
$300,000,000
$250,000,000 Restaurant/Bar $200,000,000
Hotel/Motel/Bed & Breakfast $150,000,000 Guiding Water $100,000,000
Guiding Land $50,000,000
Arts and Entertainment $0 2009 2010 2011 2012 2013 2014 2015 2016 2017
Sources: Kenai Peninsula Borough Finance Department Sales Tax Division. NOTE: Reviewing KPB Businesses licenses shows that most scenic and sightseeing businesses (NAICS 487) are part of guiding land or guiding water.
Visitor industry employment and wages held steady on the Kenai Peninsula in 2017 (Figure 51).
Average monthly wages to workers in tourism-related sectors in 2017 increased by $27 or 1.5% (inflation in Alaska was 0.5% in 2017). This is important because average monthly wages to those working in visitor-oriented Leisure and Hospitality jobs are typically the lowest paid in the borough. This is one reason why affordable apartments and workforce housing is needed to support the employees that fill these jobs.
Average monthly wages in 2017 were: Performing Arts, Museums, Zoos, Parks, etc. - $1,833 Amusements, Gambling, Recreation - $1,549 Accommodations - $2,111 Food Services and Drinking Places - $1,634 Scenic and Sightseeing - $3,313
KPEDD 2018 Situations & Prospects page 49
Together, over three-quarters (84%) of visitor-related employment is either in Accommodations or Restaurants and Bars (Figure 52).
Figure 51 - Visitor Industry Employment and Total Wages
2,900 $64 million $70,000,000 2,800 $60,000,000
2,700 $50,000,000
2,600 $40,000,000
2,815 2,809 2,500 2,761 $30,000,000 2,662 2,687 2,400 2,606 2,648 $20,000,000
2,300 2,431 2,418 2,422 $10,000,000
2,200 $0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: ADOLWD Number of Employees (avg ann) Total Earnings QCEW
Figure 52 - Visitor Industry Employment, 2017
Scenic and Sightseeing 7% Accommodations 31%
Performing Arts, Museums, Zoos, Parks, etc. Food Services 53% and Drinking 2% Places 7%
Amusements, Recreation Source: ADOLWD QCEW
Number of Visitor-Related Businesses
Counts of the number of employers and small businesses engaged in tourism related work on the Peninsula vary depending on the source; however both the borough and the state list about 1,500 with a business license to offer services and activities to visitors, and adding the number of self-employed business owners to the number of employers yields approximately 1,250 who offer services or goods to visitors.
KPEDD 2018 Situations & Prospects page 50
There were 845 small business owners (self-employed) living on the Kenai Peninsula with a visitor-oriented business in 2016. Together, their receipts totaled $27 million, which is on top of the $64 million in employee wages for these types of businesses in 20179. The Kenai Peninsula Borough (KPB) listed 1,477 visitor-related businesses for sales tax purposes (December 2017). This included 183 in Arts & Entertainment, 34 in Land Guiding, 401 in Water Guiding, 559 in accommodations, and 300 in restaurant/bars. Of the total 1,477, over 80% (1,210) listed a Kenai Peninsula community as their primary address. The list of Alaska State business license holders had 1,491 businesses in this sector with a physical address on the Kenai Peninsula in December 2017. Of this total 1,491 with a physical address in the borough, 122 had a mailing address outside of the borough. The ADOLWD QCEW lists 393 employers in this sector active in the borough in 2017.
Number of Visitors
In 2017, the total number of visitors arriving to the Peninsula by railroad, cruise ship, and ferry was estimated at 257,400 (rounding) (Figure 53). Cruise ship visitors account for about three-quarters (77% in 2017) of all arriving visitors. This does not include those arriving by vehicle, air, or private boat. Ferry/highway traffic was estimated for summer 2016 to be 31,30010. The number of arriving visitors decline in 2017 after three consecutive years of growth.
Figure 53 - Summary: Arriving Cruise, Railroad and Ferry Visitors (does not include by air or vehicle) 2013 2014 2015 2016 2017 Railroad passenger arrivals 41,189 43,036 46,614 52,426 50,585 Cruise ships passenger arrivals 130,979 148,778 204,250 202,116 198,574 Ferry passengers disembarking in Homer 6,282 12,117 10,713 10,301 6,782 Ferry passengers disembarking in 1,300 2,723 2,392 2,498 1,437 Seldovia TOTAL 179,750 206,654 263,969 267,341 257,378 Number difference from prior year -23,641 26,904 57,316 3,372 -9,963 Percentage difference from prior year -12% 15% 28% 1% -4%
Alaska Railroad Visitors
After four years of steady increases in the number of Alaska Railroad passengers to and from Seward, visitation by train fell in 2017 (Figure 54). This is probably due in part to decreased cruise passengers.
In 2017, the Grandview Cruise Train, which operates between Seward and Anchorage as an alternative to the cruise lines’ motor coach service, had a 1% (departing Anchorage) to 4% (departing Seward) decrease in passenger traffic compared to 2016. Departures from Anchorage are typically passengers beginning their cruise in Seward.
9 As explained on page 38 in footnote 8, every year the Situations & Prospects Report combines wages and employment data from ADOLWD with self-employed businesses receipts from the year prior. This is due to the lag in reporting self-employment earnings. 10 McDowell Group, “Kenai Peninsula Visitor Profile and Economic Impact Analysis, Summer 2016”, August 2017
KPEDD 2018 Situations & Prospects page 51
The Alaska Railroad second train line, the Coastal Classic, is open to the public and serves a mix of Alaskan residents, independent travelers, and cruise ship passengers. This train experienced a 3% drop in arriving passengers to Seward and a 7% decline in departing visitors. More arrive to Seward via train than depart every year.
Figure 54 - Alaska Railroad Passengers to and from Seward 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 - 2009 2010 2011 2012 2013 2014 2015 2016 2017
Coastal Classic Arrivals to Seward Coastal Classic Departures from Seward Source: Alaska Grandview Train Arrivals to Seward Railroad Corporation Grandview Train Departures from Seward
Cruise Ship Visitors
In Alaska there was a dramatic increase in cruise ship visitation between 2014 and 2015. The Peninsula experienced this too; in 2015 the number of cruise ship passengers jumped over 55,000 to a total of over 204,000 in either Seward (primary port) or Homer (Figure 55). Since then, the number of visitors has stayed relatively high, but compared to 2016 was down 2% in 2017. This is surprising as the number of ships and cruise visitors statewide is on an upward trend now. In 2017, just over 198,500 cruise passengers visited Seward or Homer. Cruise Lines Agency of Alaska personnel report that the number of cruise passengers visiting Peninsula ports is expected to increase in 2018.
Figure 55 - Number of Cruise Ship Passengers on the Kenai Peninsula
Homer Passengers Seward Passengers 11,970 9,706 14,627 1,934 Source: Cruise 13,797 15,939 9,599 6,533 401 Lines International Association 192,280 192,410 183,947 166,059 145,454 139,285 135,574 130,578 142,245
2009 2010 2011 2012 2013 2014 2015 2016 2017
KPEDD 2018 Situations & Prospects page 52
In addition to bringing visitors to town, cruise ships pay a Commercial Passenger Vessel (CPV) excise tax to the state that is shared with cities and boroughs. Ships pay $5 per passenger (onboard a qualifying commercial passenger vessel the borough. providing overnight accommodations), which is shared to each of the first seven qualifying ports of call within the state. The fee is split between the cities and the borough. The tax is generally collected one year and shared the next, but late collections and other factors affect the distribution at times. In FY 2017, $486,380 was shared with the Kenai Peninsula Borough, $458,750 to Seward, and $27,360 to Homer (Figure 56).
Figure 56 - State Commercial Passenger Vessel (CPV) Tax Shared with Peninsula Municipalities
$948,450 $972,760 $1,000,000
Series4 $729,950 $723,316 $750,000 to city of Seward $647,843
to city of Homer $500,000 to Kenai Peninsula Borough $250,000 Alaska Dept. of Revenue, Source:Shared TaxADOR, SharedReports Tax $0 Fiscal Reports 2013 2014 2015 2016 2017
AMHS Ferry Passengers
Refer to Section 5.2 in the chapter on Movement of People and Freight (page 24) for a review of ferry travel, which declined in 2017.
Visitors at Popular Destinations
Documented visitors increased at some Peninsula destinations and decreased at others in 2017 (Figure 57). The Alaska SeaLife Center in Seward welcomed over 160,000 visitors to the aquarium (not including participants in their education programs). This is another consecutive year of growth in attendance and interest. Kenai Fjords National Park experienced a decline in visitation in 2017. Documented visitors were slightly down across the board at Chamber of Commerce-operated visitor centers in Seward, Soldotna, and Kenai (Homer did not report). Staff suggest that rather than a decrease in visitation to the Peninsula, this likely reflects a change in how visitors are getting information, with more and more reliance on mobile devices to access Chamber, Visitor Center, business, and other apps and google maps to gather information and directions. Kenai National Wildlife Refuge documented more visitors in 2017. Their count is total use of the Refuge, not just the Visitor Center. This is every visitor that drives Skilak Road, Swanson Road, fishes at the Russian River Ferry, hikes a trail, goes hunting, etcetera, so these counts are not unique.
KPEDD 2018 Situations & Prospects page 53
Figure 57 - Annual Visitor to KPB Destinations Chamber of Commerce Visitor's Centers KPB Destinations Kenai Kenai Fjords Alaska National National SeaLife Wildlife Year Homer* Seward Soldotna Kenai Park Center Refuge+ 2012 N/A 14,238 38,820 41,866 281,279 138,940 1,132,101 2013 14,000 14,467 43,320 38,707 283,592 143,829 1,130,100 2014 6,245 15,363 40,071 35,354 270,666 142,349 1,110,000 2015 14,995 16,026 28,940 41,971 296,697 151,395 1,139,200 2016 19,085 16,339 28,994 40,239 346,534 152,184** 1,140,000 2017 16,135 26,869 35,848 303,598 160,345 1,183,500 *Homer 2016 data combines Homer Visitor Center, Cruise ship terminal, and Visitor Center, and visitor center/jackpot halibut derby numbers. Homer 2017 data was not reported. ** SeaLife corrected data for 2016 +This is total use of Refuge, not just the Visitor Center. This is every visitor that drives Skilak Road, Swanson Road, fishes at the RR Ferry, hikes a trail, goes hunting, etc. Sources: Homer Chamber of Commerce, Seward Chamber of Commerce, Soldotna Chamber of Commerce, Kenai Chamber of Commerce, Alaska SeaLife Center, National Park Service Monthly Public Use data, USFWS
11.2 Sport Fishing, Charters and Guides
To review sport fishing trends, data from the Alaska Department of Fish and Game (ADF&G) Statewide Harvest Surveys was analyzed for the region. In addition, per day expenditures for anglers in Alaska and for the Cook Inlet region from a 2007 study were considered. While this data is more than a decade old (currently being updated), it establishes a frame of reference for considering the spending impact of sport fishermen. Finally, 2017 trends in gross business sales for guided land and water activity were reviewed.
Sportfish Related Spending in Kenai Peninsula
Guided adventures and guided fishing are a huge part of the tourist economy on the Peninsula (see Figures 50 A and B earlier in this chapter). Growth in sales for guided land activities shows success at a goal of tourism promotion to diversify visitor opportunities from fishing and boat tours to land based eco-adventures.
Business for both land and water guiding services in the borough has been increasing every year, and 2017 was no exception. Compared to 2016, sales for guided land businesses were up 10% in 2017 to $4 million and guided water businesses gross sales were up 6% to $72 million.
Determining whether anglers are resident or nonresident, whether they are unguided or guided, and where they are fishing helps target business and government decisions because the cost to access fishing varies for these different experiences. The higher the local expenditures to access fish, the more economic benefit there will be to Kenai Peninsula businesses. A 2007 ADF&G study analyzed this information.11 However the information from this study is
11 Southwick Associates Inc. and W. J. Romberg, A. E. Bingham, G. B. Jennings, and R. A. Clark. 2008. Economic impacts and contributions of sportfishing in Alaska, 2007. Alaska Department of Fish and Game, Professional Publication No. 08-01, Anchorage.
KPEDD 2018 Situations & Prospects page 54
more than a decade old so the actual dollar values are less relevant than the percentages and trends. Of note, the Matanuska Susitna Borough is currently contracting with Southwick Associates Inc. to repeat this study and analysis just for the Cook Inlet subregion (data for 2017). That report is expected in early 2019 and will be available to inform the 2019 Situations & Prospects Report.
For all of Alaska, the 2007 report found that (Figure 58): For both guided and unguided fishing, nonresidents spend more per day than residents. Per day spending for freshwater fishing was higher than for saltwater fishing for all categories with one exception, unguided residents spend more per day in saltwater than fresh.
Figure 58 - Average per Day Expenditures in 2007 for Sportfishing Trip-Related Items Only, Including Package Trips (Lodging, fuel, food, travel packages, etc.) PER DAY All Alaska Fishing Combined $277.46 Residents Only $150.63 Non-Residents Only $448.78
Saltwater Residents, Unguided $162.81 Residents, Guided $466.53 Non-Residents, Unguided $209.40 Non-Residents, Guided $744.03
Freshwater Residents, Unguided $91.73 Residents, Guided $509.56 Non-Residents, Unguided $213.24 Non-Residents, Guided $790.41 Source: Southwick Associates Inc. and W. J. Romberg, A. E. Bingham, G. B. Jennings, and R. A. Clark. 2008. Economic impacts and contributions of sportfishing in Alaska, 2007. Alaska Department of Fish and Game, Professional Publication No. 08-01, Anchorage.
Looking at the Cook Inlet subregion, the 2007 study found that (Figure 59): Total spending by anglers for freshwater fishing was twice as high as for saltwater fishing. 56% of total spending was by nonresidents and 44% was by residents. The total spent for guided versus unguided fishing in Cook Inlet was about even with 52% on guided experiences and 48% on unguided.
KPEDD 2018 Situations & Prospects page 55
Figure 59 - Detailed total TRIP and PACKAGE spending in the Cook Inlet subregion in 2007, by residency, use of guides, and type of water fished.
RESIDENT NONRESIDENT ALL Guided Unguided Guided Unguided Freshwater $21,759,205 $58,678,740 $55,254,085 $45,704,524 $181,396,553 Package n/a n/a $8,680,122 $5,027,281 $13,707,403
Saltwater $17,460,056 $25,397,328 $50,717,735 $5,789,207 $99,364,325 Package n/a n/a $9,452,136 $615,002 $10,067,138
ALL anglers $39,219,260 $84,076,068 $105,971,820 $51,493,731 $280,760,879 Package n/a n/a $18,132,258 $5,642,283 $23,774,541
Source: Southwick Associates Inc. and W. J. Romberg, A. E. Bingham, G. B. Jennings, and R. A. Clark. 2008. Economic impacts and contributions of sportfishing in Alaska, 2007. Alaska Department of Fish and Game, Professional Publication No. 08-01, Anchorage.
Guided and Nonguided Fishing on the Kenai Peninsula Freshwater
Looking more closely at activity on just the Kenai River (Figure 60) and in the region (Figure 61): The number of non-guided anglers on the Kenai River increased by just over 400 in 2016 to 92,711. The average number of non-guided sports fishermen over the last 10 years has been 91,244 in the Kenai River. The number of guided anglers on the Kenai River dropped in 2016 by over 1,000 to 35,006. Over the last 10 years the average number of guided anglers has been 34,323.
Figure 60 – Estimated Number of Guided and Nonguided Anglers on the Kenai River, 2007-2016
Non-Guided Guided
103,710
98,453
96,928
95,044
92,711
91,299
88,114
84,367
84,228
77,390
34,939
33,298
37,392
36,985
36,245
35,053
35,006
34,621
29,109 30,586
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Source: ADF&G, Alaska Sport Fish Survey. Notes: Number of angler estimates are not unique because an angler may have visited more than one site. These are point estimates, not counts.
KPEDD 2018 Situations & Prospects page 56
Figure 61 – Estimates of Kenai Peninsula Freshwater Sportfish Effort by Fishery, 2016 Freshwater Area Fished Number Estimated Days Responses Used Anglers Fished Anchor River 112 4,012 12,699 Deep Creek 50 1,657 4,730 Kasilof River - nonguided bank fishing 167 5,854 10,867 Kasilof River - nonguided boat fishing 45 1,534 2,696 Kasilof River - guided bank fishing 33 1,038 1,317 Kasilof River - guided boat fishing 192 7,077 7,231 Kenai River - Cook Inlet to Soldotna Bridge (non-guided) 963 37,290 141,887 Kenai River - Soldotna Bridge to Moose River (non-guided) 827 31,224 112,382 Kenai River - Moose River to Skilak Outlet (non-guided) 317 11,155 42,670 Kenai River - Skilak Inlet to Kenai Lake (non-guided) 350 12,514 33,026 Kenai River - reach not specified (non-guided) 16 528 1,386 Kenai River - Cook Inlet to Soldotna Bridge (guided) 420 14,600 21,986 Kenai River - Soldotna Bridge to Moose River (guided) 225 8,072 11,932 Kenai River - Moose River to Skilak Outlet (guided) 165 4,917 6,698 Kenai River - Skilak Inlet to Kenai Lake (guided) 218 7,347 8,601 Kenai River - reach not specified (guided) 3 70 70 Ninilchik River 54 1,889 3,166 Quartz Creek 46 1,470 2,989 Resurrection Creek drainage 66 2,827 3,865 Russian River 536 19,096 39,957 Sixmile Creek drainage 17 686 946 Swanson River 26 1,019 1,778 Other streams 25 1,060 1,907 Crescent Lake 27 1,110 1,499 Johnson Lake 20 1,051 2,306 Kenai Lake 17 653 1,247 Summit Lake 19 1,026 2,842 Other Kenai Peninsula stocked lakes 48 2,104 6,539 Other lakes 112 3,790 8,125 Freshwater Total 5,116 133,319 497,344
Source: ADF&G Alaska Sport Fish Survey Note: Angler numbers are not unique, because an angler who visited more than one site was counted twice.
Regional Sportfishing Effort
The number of days fished in the region was down for a second year in a row, led by a decline in Kenai Peninsula freshwater effort as well as days fished from shoreline. There were increased fishing days though for West Cook Inlet freshwater fishing and by those who used a boat to saltwater fish in Cook Inlet (Figure 62).
Point estimates of the number of anglers from the state’s annual sportfish survey shows 2016 continued what’s now a three-year decline. The number fishing by boat in west Cook Inlet was the only fishery with an increase in estimated anglers in 2016 (Figure 63).
KPEDD 2018 Situations & Prospects page 57
Figures 62 - Kenai Peninsula, and East and West Cook Inlet - Number of Days Sportfishing by Area/Fishery
900,000
800,000
700,000
600,000
500,000
400,000
Source: 300,000 Days of Number ADF&G Statewide 200,000 Harvest Survey 100,000
0 2010 2011 2012 2013 2014 2015 2016 Cook Inlet Saltwater Boat 154,500 157,160 160,289 179,174 169,222 161,302 164,365 Cook Inlet Shoreline 13,297 11,054 7,751 13,571 26,815 24,086 17,478 West Cook Inlet Freshwater 12,780 10,088 10,682 12,380 12,041 11,459 11,614 Kenai Peninsula Freshwater 469,614 478,502 476,331 547,120 600,515 562,231 497,344
Figures 63 - Kenai Peninsula, and East and West Cook Inlet – Estimated Anglers, by Area/Fishery
160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000
0 Estimated NumberAnglers of 2010 2011 2012 2013 2014 2015 2016
Kenai Peninsula Freshwater Cook Inlet Saltwater Boat Cook Inlet Shoreline West Cook Inlet Freshwater Source: ADF&G, Statewide Harvest Survey. Note: these point estimates for angler numbers are not unique, for example if an angler fished in two rivers she may be counted twice. This is especially true for totals for Cook Inlet saltwater boat and shoreline fishermen.
KPEDD 2018 Situations & Prospects page 58
12 Industry Spotlight | Oil, Gas, and Mining
12.1 Workforce, Wages and Business Activity12 Economic indicators for the oil and gas industry in 2017 on the Peninsula were flat to slightly up.13
After two years of declining gross sales in oil and gas on the Kenai Peninsula, which are mostly crude oil and natural gas sales, with only a small portion being pipes or other goods and services, sales were up $22 million or 4% in 2017 to $645 million. This compares to 2016’s gross sales of $622 million. In 2017, gross sales were above the 10-year average of $627 million. The gross sales of these two commodities are highly price sensitive, which would explain the big number in 2014 and the steep drop in 2015-2017.
At $645 million in sales in 2017, this sector continues to be 2nd largest on the Peninsula for overall gross sales activity. Most of these are raw oil and gas sales to refineries and utilities, which are later resold. Since the good is resold, these raw oil and gas sales are not subject to the Borough’s sales tax. Therefore this sector’s raw oil and gas sales highs and lows don’t have a significant impact on taxable sales or sales tax revenue to the borough. Taxable sales from this sector in 2017 were $5.6 million, or less than 1% of all taxable sales in the borough, which is typical.
Several businesses linked to oil and gas have the highest assessed value of any properties in the borough though, so a good share of property tax revenue comes from the industry (see Figure 36, page 37).
Figure 64 - Kenai Peninsula Borough Gross and Taxable Sales Activity, Oil and Gas Businesses Change in Gross Percent of All Percent of all Oil & Gas Sales Compared to KPB Oil & Gas KPB Year Gross Sales Year Before Gross Sales Taxable Sales Taxable Sales 2017 $645,298,559 4% 18% $5,579,491 0.5% 2016 $622,528,708 -22% 18% $4,772,110 0.5% 2015 $795,102,538 -35% 21% $6,511,900 0.5% 2014 $1,231,538,492 106% 25% $8,042,010 0.8% 2013 $598,579,715 -37% 16% $7,049,602 0.7% 2012 $957,519,274 50% 24% $5,532,043 0.6% 2011 $640,427,871 153% 18% $5,500,868 0.6% 2010 $253,510,248 19% 9% $4,140,876 0.5% Source: Kenai Peninsula Borough Finance Office, Sales Tax Division
12 To support the KPEDD Situations & Prospects (S&P) Report, ADOLWD does a unique aggregation for oil and gas employment and wages, which includes oil and gas extraction (NAICS 211), oil and gas well drilling (213111), work on oil and gas field wells (213112), petroleum and coal products manufacturing (324), and chemical manufacturing (325). For 2017, these oil and gas jobs on the Peninsula numbered 1,002 (Figure 65). This is a different aggregation of NAICS codes than what is used by ADOLWD for its QCEW “Mining, Oil & Gas” aggregation, which shows 812 jobs in 2017 (as seen on Figures 41-43). The S&P has been using its oil and gas NAICS aggregation consistently since 2000. It does not include mining, and does include manufacturing related to oil and gas, and some other miscellaneous chemical manufacturing. Note also that for reporting of gross and taxable business sales, the Kenai Peninsula Borough’s Line of Business “Mining/Quarrying” is the same grouping used in the S&P report, with the addition of quarry and mining activity (Figure 51).
13 Uplands in the Kenai Peninsula Borough (KPB) and adjacent Cook Inlet host onshore and offshore oil and gas reservoirs, with a long history of development. Refer to the 2015 KPEDD Situations & Prospects for a review of Cook Inlet historic oil and gas production and context.
KPEDD 2018 Situations & Prospects page 59
Between 2016 and 2017, the number of oil and gas jobs on the Kenai Peninsula was basically steady, staunching a 3- year decline. The total (average annual) number of employees dropped 46, from 1,048 to 1,002 (Figure 65). Total wages paid to employees also declined slightly, down 2.6% or $3.3 million from $125 million in 2016 to $122 million in 201714. In 2017, oil and gas businesses paid out $122 million in wages, which was 13% of all wages and 19% of all private sector wages paid to employees on the Peninsula. These percentages are unchanged from 2016.
Figure 65 - Oil & Gas Employment and Total Wages, Kenai Peninsula, 2008-2017 1,800 $200,000,000
1,600 $180,000,000
1,400 $160,000,000 $140,000,000 1,200 $120,000,000 1,000 $100,000,000 800 1,669 1,465 $80,000,000 1,389 1,314 TotalWages 600 1,270 1,249 1,304 1,215 1,048 1,002 $60,000,000 400 $40,000,000
Number of Oil NumberofOil Gas Employees & Source: 200 $20,000,000 ADOLWD ADOLWD 200-job coding correction QCEW data 0 $0 run for 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 KPEDD S&P Report, Number of Employees (average annual) Total Wages N. Fried
12.2 Number of Businesses in Oil, Gas and Mining There are currently 20-40 businesses in oil and gas and another 30-50 in mining and quarrying that are physically located on the Peninsula, based on evidence from the following four sources: There were 50 small business proprietors (self-employed) in the KPB engaged in mining, quarrying, or oil and gas businesses that together generated $2.7 million in earnings in 2016. Of the 50, 28 were in mining or quarrying and 22 in oil and gas businesses. (In 2015, net earnings were $4 million.) In December 2017, the Kenai Peninsula Borough (KPB) listed 79 mining, oil and gas, and chemical manufacturing businesses that were registered for sales tax purposes. Of this group, 28 listed a physical address in a Kenai Peninsula community – 16 in mining-related businesses and 7 in oil and gas. (This is a few more than in 2016, when 71 similar companies were listed for sales tax purposes, of which 25 had a Peninsula physical address. Of those, 16 were in mining and 9 in oil and gas.) The June 2018 list of Alaska State business license holders for oil and gas extraction, drilling, refining, and related petrochemical manufacturing shows 20 businesses with a physical address on the Peninsula, and another 55 in a mining related business. The ADOLWD 2017 employment and wage summary listed 40 employers active in oil and gas on the Peninsula in 2017.
14 The ADOLWD oil and gas employment tally is complicated by a coding correction made in early 2014 when the state discovered about 200 oil and gas workers coded to the Kenai region that instead were employed elsewhere. This employment had been counted in the Kenai region as far back as 2000, which means that all oil and gas employment figures before 2013 have been high by about 200. Thus, the 2014-2015 decline in oil and gas workforce is real, but less precipitous than published QCEW data indicates on Figure 52 (and in past reports).
KPEDD 2018 Situations & Prospects page 60
12.3 Sector Trends, Issues, and Outlook15 Outlook on the $43 billion Alaska Gasline Development Corporation (AGDC) North Slope liquefied natural gas (LNG) export project has improved since the promising November 2017 signing of a non-binding joint development agreement between the State of Alaska and Chinese oil and gas giant Sinopec, the Bank of China and China Investment Corp. to advance the prospect of the three state-owned Chinese companies buying LNG, helping to finance and even investing in the Alaska Project.
Although State officials contend that the current US-Chinese tariff and trade wars will not affect the long-term viability of the AGDC LNG project, the trade fight is adding some level of uncertainty and potential delays to all proposed US LNG export projects. While continuing to work with China, AGDC also plans to embark on a road show in late 2018 and early 2019 to present the venture to other investors. Meanwhile, recent US tariffs on steel imports under the Trade Enhancement Act have added another challenge by driving up the price of steel pipe and manufactured steel components for US oil and gas projects, creating the risk of additional costs for project construction.
In September 2018, the Federal Energy Regulatory Commission (FERC) accepted the Kenai Peninsula Borough’s late filed motion to intervene in the FERC review of the AGDC project. The state-led project development team’s preferred site for the LNG terminal is Nikiski. However, the Matanuska-Susitna Borough has filed with FERC to advocate for Port MacKenzie 65 air miles to the northeast of Nikiski as a better location and the city of Valdez filed last year to advocate for its community. The federal environmental impact statement, prepared by FERC, will review alternatives for the LNG plant site, just as it will review multiple other alternatives in the pipeline route and project construction and operations.
The FERC announced in August 2018 that it was accelerating the issuance of its Alaska LNG project draft environmental impact statement by one month, to February 2019, assuming the “state-led team completes timely responses to any future data requests” and that cooperating regulatory agencies “provide input on their areas of responsibility on a timely basis.”
In Cook Inlet, Hilcorp Alaska continues as the dominant producer. While work has slowed in the last few years, active production, exploration, drilling, and planning still continue. In 2017 Hilcorp drilled 24 wells. They are planning to invest $285 million in 2018 for drilling, infrastructure upgrades, and other activities. Hilcorp operates oil and gas units on the west side of Cook Inlet, in both the northern and southern Kenai Peninsula, and offshore where it now has six fields and 12 offshore platforms in four clusters throughout the waters of Cook Inlet. The company recently asked the Regulatory
15 Eric Lidji, Petroleum News, November 2017, “The Producers 2017: Hilcorp continues Cook Inlet dominance” http://www.petroleumnews.com/pnarchpop/84252273.shtml
Ben Boettger, Peninsula Clarion, January 29, 2018, “Fertilizer plant restart still dependent upon gas supply” http://peninsulaclarion.com/news/local/2018-01-29/fertilizer-plant-restart-still-dependent-upon-gas-supply
Krystl Shallenberger, Peninsula Clarion, August 14, 2018, “Donlin Mine nabs two major permits at Army Corps signing” https://www.alaskapublic.org/2018/08/14/donlin-mine-nabs-two-major-permits-at-army-corps-signing/
Larry Persily, multiple 2018 weekly e-updates, “Oil and Gas News and Alaska LNG project updates,” [email protected]
Larry Persily, personal communications, August 2018
Rashah McChesney, Alaska Public Media, August 8, 2018, “As trade war escalates, AGDC and Gov. Walker minimize threat to state’s LNG project” https://www.alaskapublic.org/2018/08/03/as-trade-war-escalates-agdc-and-gov-walker-minimize- threat-to-states-lng-project/
KPEDD 2018 Situations & Prospects page 61
Commission of Alaska for permission to ship oil from west to east, beneath Cook Inlet. The $75 million Cross Inlet Extension Project would bypass the Drift River oil terminal, allowing the company to reduce the use of oil tankers in Cook Inlet.
Environmental review and permitting for the Donlin Gold Mine, located outside of the borough, is proceeding. In August 2018, after six years of review, the mine received two major permits from the Army Corps and Bureau of Land Management. Donlin hopes to complete the permitting process within two years. The leading proposed power source for the mine is gas-fired electrical generation, fed by a 14-inch, 312-mile-long buried pipeline to transport natural gas from the west side of Cook Inlet to the mine site. This would be a significant for Cook Inlet gas. The Donlin Mine project does not identify a source of gas for the pipeline, only that the pipeline would be part of the project.
PacRim Coal withdrew from pursuing permits in late 2017 to develop a coal seam under the Chuitna River near Tyonek, where both commercial and subsistence salmon harvest occurs. However, in August 2018, Alaska DNR reversed its decision to allow water rights to the Chuitna Citizens Coalition, essentially opening the door to future political and environmental issues here on the west side of Cook Inlet.
Nutrien, the new owner of the former Agrium fertilizer plant in Nikiski, is studying whether to reopen the plant. In January 2018, they proposed a schedule to take a year to inspect and assess the site, determine if plant rehabilitation is economical, and if an adequate supply of natural gas can be secured. If a decision to proceed is issued, a 26-month plant renovation phase would occur. The plant, closed since 2007, would take an estimated $275 million investment to reopen. The plant uses nitrogen from the atmosphere and methane, the primary component of natural gas, to make ammonia and urea fertilizers. Obtaining a long-term gas supply at a favorable cost is a critical factor. If Nutrien were to reopen, it would be able to take advantage of a July 2017 state tax credit that would allow Nutrien’s corporate income tax liability to be credited equal to the royalty payments made to the state by the producers who supply Nutrien its gas, making it financially neutral to state government.
KPEDD 2018 Situations & Prospects page 62
13 Industry Spotlight | Maritime Sector
13.1 Maritime Work Maritime work - sometimes called the Blue Economy - are jobs linked to the ocean or rivers, it is people whose livelihood “touches” the sea. On the Kenai Peninsula this includes fishermen, seafood processing workers, barge line operators, oil and gas vessel support, SeaLife Center researchers and employees, AVTEC maritime instructors and staff, sportfish guides and whale watch charters, marine biologists, engineers, and surveyors, fishing crew, fishing gear retailers, fish wholesalers, local government port and harbor workers, state and federal fishery scientists and technicians, and more.
Economic and labor statistics typically fragment maritime work, dividing it among many different industry sectors. For example, commercial fishing is part of ‘agriculture-forestry-fishing-hunting’, seafood processing is part of ‘manufacturing’, and marine sightseeing and transportation are part of ‘transportation and warehousing’, and so on. As a result, the importance of work that is dependent on the ocean - is hidden as part of other industries.
Wanting to understand the unique opportunities for economic growth that living by the ocean offers, more and more Alaska communities are analyzing data to break out their maritime economy. The KPEDD Situations & Prospects Report has been breaking out the maritime sector since 2014 so that the Kenai Peninsula can accurately consider this ‘blue’ sector when making strategic land, workforce, and infrastructure investments and decisions.
Maritime work remains a top sector and a Kenai Peninsula economic powerhouse (Figure 68). This is true even with the economic slowdown that occurred statewide in 2017 in this and many other sectors. For maritime work on the Peninsula, total wages and employment declined for a 2nd year in a row in 2017, led by a sharp drop in marine- related professional, scientific and technical services.
When all maritime work is aggregated: There were 3,145 people who worked in a maritime-related job on the Kenai Peninsula in 2017. o If maritime was a standalone economic sector, it would rank 3rd largest for workforce, just behind health care and social assistance, and local government. Maritime related work brought home $156 million in combined wages and proprietor earnings in 2017. o If maritime were a stand-alone economic sector, it would be tied for 2nd ranking with local government for total earnings, just behind health care and social assistance. Compared to 2016, maritime-related employment was down by 147 or 4%, and total earnings dropped $9 million or 5% in 2017 (Figure 68). o Decreased earnings from marine-related professional, scientific, and technical services, as well as self- employed fishermen led the decline. Earnings increased for businesses in (mixed) marine-related leisure and hospitality, such as marine or fishing guiding services, fish camps with accommodations, and marine museums.
13.2 Vessels, Boat Building, and Repair All vessel owners must register their boats with the Alaska Department of Motor Vehicles (DMV) every three years. According to the DMV, in 2017, there were 10,143 vessels registered to a resident in the Kenai Peninsula Borough, or 15% of all vessels in the state. This includes not only commercial fishing boats but also charter vessels, and personal use - both motorized and non-motorized.
KPEDD 2018 Situations & Prospects page 63
All these boats create a demand for upkeep, repair, moorage, and a variety of services. In 2017, there were approximately 200 employees or small business owners engaged in activities related to boat building, repair, construction, manufacturing and marinas on the Peninsula. This is an area of economic activity that Homer and Seward in particular have recognized and have been making strategic decisions to diversify and attract more maritime activity.
The Alaska Commercial Fisheries Entry Commission (CFEC) tracks commercial fishing vessels, and in 2017 listed 1,030 commercial fishing vessels homeported in a Peninsula community (Figure 66), including the following vessels (some used for more than one purpose): Set gillnet - 67 Drift gillnet - 592 Herring gill net - 55 Purse seine - 262 Beach seine - 5 Hand troll - 29 Power troll - 9 Otter trawl - 5 Beam trawl - 6 Long line - 300 Pots - 129 Scallop dredge - 2 Diving hand picking - 2
Figure 66 - Commercial Fishing Vessels Homeported in Kenai Peninsula Borough
Commercial Vessel Characteristics 2017
Total Number of Commercial Vessels 1,030
Average Year Built /Median Year Built 1980 /1984
Average Age (in the year 2017) 38 years
Average Length 35 feet
Type of Activity (vessels can be used for more than one purpose) Freezer/Canner 6 Tender/Packer 96 Guided Sport (Charter) 0 Commercial Fishing 997 Hull Type Aluminum 408 Fiberglass/Plastic 547 Iron/Steel/Alloy 48 Rubber 2 Wood 22 Salmon Registration Area Bristol Bay 129 Chignik 9 Cook Inlet 451 Kodiak 40 N/A 159 Peninsula/Aleutian Islands 46 Prince William Sound 187 Southeast 9 Source: CFEC, Commercial Vessel Characteristics and Statistics
KPEDD 2018 Situations & Prospects page 64
13.3 Maritime Workers, Wages, and Activity
Self-employed commercial fishermen account for half the maritime workforce on the Kenai Peninsula (Figure 67). Seafood processors and those in marine transportation are the other two big categories of maritime work.
Figure 67 - Kenai Peninsula Maritime Workforce by Type of Work, 2017
2% 2% Self Employed Boat (Mixed) Marine Repair Construction, (65) 2% Manufacturing, (Mixed) Marine Education, Boat Professional, Repair & 2% Scientific, & Maintenance State Government Technical Services, (60) (75) (63) 1% 3% Federal Government Marinas, Boat (45) Dealers, Boat 10% Building (Mixed) Marine 1% (79) Leisure & Local Government Hospitality ( 32) 12% (309) Water Transportation (368) 50% 15% Self Employed Fishing and Seafood Commerical Processing Fishermen (458) (1,586)
Photo at AVTEC Alaska Maritime Training Center, the full bridge mission simulator
KPEDD 2018 Situations & Prospects page 65
Figure 68 - Kenai Peninsula Borough, Maritime Employment and Earnings, 2016 and 2017 Year No. of Total Average Annual Average Firms Wages Employment Annual Wages 2016 2017 2016 2017 2016 2017 2016 2017 Fishing (self-employed) 1 1,640 1,586 $91,501,000 $84,412,000 1,640 1,586 $55,793 $53,223 Fishing and Seafood Processing 2 44 40 $17,689,203 $17,839,805 506 458 $34,959 $38,952 Water Transportation 3 80 78 $19,261,706 $18,707,813 371 368 $51,918 $50,836 Marinas, Boat Dealers, Boat 10 10 $3,956,158 $4,105,883 83 79 $47,665 $51,973 Building 4 Mixed Marine Leisure & 59 62 $5,507,939 $10,909,513 188 309 $29,298 $35,306 Hospitality 5 Mixed Marine Professional, 25 20 $11,288,935 $3,657,643 227 63 $49,731 $58,058 Scientific, & Technical Services 6 Mixed Marine Construction, Manufacturing, Education, Boat 11 10 $2,652,394 $2,697,730 62 60 $42,781 $44,962 Repair & Maintenance 7 Boat repair (self-employed) 1 58 65 $1,505,000 $1,555,000 58 65 $25,948 $23,923 State government Maritime 1 1 $3,774,274 $3,801,458 75 75 $50,324 $50,686 Employees 8 Federal government Maritime 2 2 $3,571,894 $3,898,264 45 45 $79,375 $86,628 Employees 9 Local Government Maritime 5 5 $3,993,196 $4,095,196 37 37 $107,924 $110,681 Employees 10 Total Kenai Region Maritime 1,935 1,879 $164,701,699 $155,680,305 3,292 3,145 $50,031 $49,501 1-year change -2% -3% -8% -5% -4% -4% -5% -1% (compared to year before) Sources & Notes: 1 2015, 2016 US Census Nonemployer Statistics (lags other data by a year). For self-employed in boat repair this is NAICS 811490. For both self-employed fishermen and boat builders, the wages are actually business receipts, which appear to coincide with net earnings. 2 Source: ADOLWD QCEW data by N. Fried. Includes, for example: employees/ payroll, for aquaculture, fishing, seafood processing, wholesalers, seafood markets 3 Source: ADOLWD QCEW data by N. Fried. Includes, for example: water transportation, guides, tours, support 4 Source: ADOLWD QCEW data by N. Fried. 5 Source: ADOLWD QCEW data by N. Fried. Includes, for example: marine museums, marine or fishing guiding services, fish camps with accommodations 6 Source: ADOLWD QCEW data by N. Fred. Includes, for example: boat design, marine surveyors, marine engineering, fisheries research 7 Source: ADOLWD QCEW data by N. Fried. 8 Source: ADOLWD QCEW data by N. Fried. Includes ADF&G 9 Source: ADOLWD QCEW data by N. Fried. Includes NOAA and partial USFWS 10 Local Government data excerpted from FY 17 budgets - Seward, Homer, Kenai, Seldovia, and Kenai Peninsula Borough (Kenai River Center), employment is estimated from web listings of employees by department or interviews. All data compiled by Sheinberg Associates
KPEDD 2018 Situations & Prospects page 66
14 Commercial Fishing & Seafood Processing
Commercial fishing and seafood processing together account for about three-quarters of the Peninsula’s maritime economy. Charter and sport fishing are important too; these activities are generally part of water transportation and are reviewed in Section 11.2 of this report in the chapter on Tourism.
Commercial fishing and seafood processing are key economic activities on the Kenai Peninsula. This is true whether measured by: Activity at individual Kenai Peninsula ports (Figures 69 to 73), Activity by Kenai Peninsula residents, including how many residents earn all or part of their living in commercial fishing or support activities (Figures 74 to 78), and Trends in Cook Inlet salmon harvest, value, and permit prices (Figures 78 to 80). Source: Fisheries of the United States, 2016. NOAA
14.1 Commercial Fishing Activity at Kenai Peninsula’s Ports
Information in this section is organized by activity at Kenai Peninsula ports (regardless of who caught the fish or where they live).
Alaska dominates commercial fish landings in the United States. In 2016, Alaska landed 58% (6 billion pounds) of all domestic commercial fish and 29% ($1.76 billion) of the total US commercial fisheries value.
Seward and Kenai are two of the top commercial fishing ports in the US. Seward ranked 28th top US port for pounds of commercial fish landed and 25th for value of fish crossing its docks in 2016. There were 27 million pounds of commercial fish worth $42 million hauled out in Seward’s that year (Figure 69). Kenai ranked 33rd top US port for commercial fisheries volume (22 million pounds landed) and 44th ($25 million) for value (Figure 69) in 2016.
There are many processing facilities on the Kenai Peninsula and tenders waiting at sea to buy fish. The largest processing plants are at the mouth of the Kenai River and in Seward at Resurrection Bay, accounting for the statistics just cited. Most of the (sizable) catch at Homer and other places on the Peninsula is either tendered at sea or trucked by land to one of these processing plants. From the plant, processed fish can easily be trucked to the Lower 48, and advantage the Kenai Peninsula region (and other southcentral Alaskan spots) possesses compared to western and southeast Alaskan processors.
KPEDD 2018 Situations & Prospects page 67
Figure 69 - Commercial Fishery Landings and Value at Major US Ports, 2015-2016 Quantity Value PORT 2015 2016 PORT 2015 2016 Million Pounds Million Dollars Dutch Harbor, AK 787 770 New Bedford, MA 322 327 Aleutian Islands (Other), AK 467 508 Dutch Harbor, AK 218 198 Empire-Venice, LA 379 440 Empire-Venice, LA 111 122 Kodiak, AK 514 417 Naknek, AK 69 108 Reedville, VA 350 321 Kodiak, AK 138 107 Pascagoula-Moss Point, MS 295 285 Honolulu, HI 97 106 Alaska Peninsula (Other), AK 268 243 Aleutian Islands (Other), AK 111 105 Intracoastal City, LA 428 215 Alaska Peninsula (Other), AK 90 85 Naknek, AK 176 170 Cape May-Wildwood, NJ 72 85 Westport, WA 84 108 Bristol Bay (Other), AK 90 76 New Bedford, MA 124 107 Stonington, ME 64 68 Astoria, OR 92 94 Key West, FL 71 67 Newport, OR 65 77 Hampton Roads Area, VA 56 61 Ketchikan, AK 84 65 Westport, WA 65 59 Gloucester, MA 68 63 Point Judith, RI 46 56 Sitka, AK 87 56 Sitka, AK 59 55 Bristol Bay (Other), AK 70 54 Brownsville-Port Isabel, TX 55 53 Point Judith, RI 46 53 Gloucester, MA 44 52 Portland, ME 62 50 Dulac-Chauvin, LA 45 48 Cape May-Wildwood, NJ 77 47 Newport, OR 33 48 Petersburg, AK 70 41 Galveston, TX 42 45 Port Hueneme-Oxnard-Ventura, CA 44 38 Bayou La Batre, AL 37 45 Los Angeles, CA 15 37 Vinalhaven, ME 40 42 Cordova, AK 162 35 Astoria, OR 38 42 Rockland, ME 31 34 Seward, AK 59 42 Honolulu, HI 32 32 Palacios, TX 31 39 Dulac-Chauvin, LA 31 32 Portland, ME 35 38 Seward, AK 94 27 Cordova, AK 65 38 Provincetown-Chatham, MA 21 27 Petersburg, AK 39 37 Point Pleasant, NJ 24 26 Shelton, WA 34 36 Atlantic City, NJ 26 24 Ketchikan, AK 40 36 Stonington, ME 19 23 Port Arthur, TX 27 33 Kenai, AK 50 22 Provincetown-Chatham, MA 31 33 Bayou La Batre, AL 20 22 Point Pleasant, NJ 28 32 Coos Bay-Charleston, OR 21 21 Reedville, VA 33 31 Lafitte-Barataria, LA N/A 21 Delacroix-Yscloskey, LA 26 29 Brownsville-Port Isabel, TX 25 18 Lafitte-Barataria, LA N/A 29 North Kingstown, RI 16 18 Coos Bay-Charleston, OR 22 28 Golden Meadow-Leeville, LA 16 17 Long Beach-Barnegat, NJ 25 27 Wanchese-Stumpy Point, NC 18 16 Port Hueneme-Oxnard-Ventura, CA 21 26 Juneau, AK 17 16 Intracoastal City, LA 33 26 Key West, FL 17 16 Seattle, WA 25 26 Port Arthur, TX 14 15 Golden Meadow-Leeville, LA 24 25 Palacios, TX 15 15 Kenai, AK 33 25 Galveston, TX 16 15 Beals Island, ME 21 23 Delacroix-Yscloskey, LA 14 14 San Francisco Area, CA 9 23 Moss Landing, CA 45 13 Tampa Bay-St. Petersburg, FL 25 23 Ilwaco-Chinook, WA 15 13 Juneau, AK 23 23 San Francisco Area, CA 5 13 Crescent City, CA 7 23 Princeton-Half Moon Bay, CA 11 13 Ilwaco-Chinook, WA 15 22 Source: Fisheries of the United States, 2016, NOAA
KPEDD 2018 Situations & Prospects page 68
At KPEDD’s request, an analysis was completed by the Alaska Commercial Fisheries Entry Commission (CFEC) in 2018 to identify the pounds of fish landed and their value, by port. Typically, landings and value are only available by fishery or by residency of the fishermen.
The size of the commercial fish haul at individual Peninsula ports is of interest because of the economic activity this generates: local processors buy the fish, purchases are needed of ice, bait, groceries, boat and gear related repair services, and so on. For entrepreneurs, these are all business opportunities.
About the data on Figure 70
The CFEC data (Figure 70) is based on ADF&G fish tickets, so it is a complete set of information for commercially caught fish in Alaska with one exception: processors operating in federal waters exclusively for federally-managed fisheries, such as groundfish (halibut, sablefish, pollock, some rockfish, etc.) are not required to fill out ADF&G fish tickets -- although many do so voluntarily. Because of this, ADF&G fish tickets are incomplete data sets for these fisheries. There is a ‘work-around’ for this for Seward and Kenai. Because they are top US ports, the National Ocean and Atmospheric Administration (NOAA) / National Marine Fisheries Service (NMFS) reports the volume/value of fish hauled out there – and this NOAA dataset reported in the Fisheries of the United States (FUS) is complete. Subtracting the CFEC numbers from the NOAA numbers for Seward and Kenai allows a determination of the pounds and value of all groundfish (primarily halibut and black cod) crossing the docks at these ports.
In other words, when reviewing the data on Figure 70, total volumes and value do not include all halibut and other groundfish, except for Kenai and Seward where the listed source is FUS 2016. Because there are significant landings of halibut and other groundfish at other Peninsula ports, the CFEC data on Figure 70 underestimates the total volume of fish and its value at the other listed Kenai Peninsula ports.
Nonetheless, Figure 70 shows the volume and value of most commercial fish activity at ports on the Kenai Peninsula, which is not readily available published data.
KPEDD 2018 Situations & Prospects page 69
Figure 70 – Number of Processors, Pounds of Commercial Fish Landed, Ex-Vessel Value of Fish, by PORT 2015 2016 2017 (prelim) Whole Whole Number of Whole Pounds Ex-Vessel Number of Pounds Ex-Vessel Number of Pounds Ex-Vessel PORT Source Processors Landed Value $ Processors Landed Value $ Processors Landed Value $ Homer CFEC/ADFG 42 23,002,108 $25,037,042 47 13,560,385 $28,031,204 51 12,992,231 $24,516,775 Kasilof CFEC/ADFG 12 5,351,260 $7,062,158 11 3,364,819 $4,066,533 8 2,916,544 $4,486,781 Kenai CFEC/ADFG 28 8,630,501 $11,796,709 17 15,102,593 $16,222,073 17 19,649,165 $18,533,851 Kenai FUS 2016 50,000,000 $33,000,000 22,000,000 $25,000,000 Nikiski CFEC/ADFG 1 to 3 * * 1 to 3 * * 5 956,169 $1,507,060 Ninilchik CFEC/ADFG 32 2,436,705 $3,401,575 27 224,959 $283,892 30 359,522 $521,139 Seldovia CFEC/ADFG 1 to 3 * * Seward CFEC/ADFG 16 71,862,371 $46,767,086 11 22,722,850 $36,685,296 10 41,750,434 $50,300,794 Seward FUS 2016 94,000,000 $59,000,000 27,000,000 $42,000,000 Soldotna CFEC/ADFG 1 to 3 * * 1 to 3 * * 1 to 3 * * GRAND TOTAL, for CFEC/ADFG 130 111,638,557+ $94,115,002+ 113 56,082,696+ $86,708,369+ 121 78,769,512+ $100,133,618+ the 8 communities Sources: FUS 2016 = National Marine Fisheries Service (2017) Fisheries of the United States, 2016. U.S. Department of Commerce, NOAA Current Fishery Statistics No. 2016. Available at: https://www.st.nmfs.noaa.gov/commercial-fisheries/ fus/fus16/index CFEC = Alaska Commercial Fisheries Entry Commission, M. Gho, Economist, Data aggregated by port and provided on July 19, 2018.
Notes: * = Confidential + Totals are per CFEC, does not include all halibut and other groundfish harvested in federal waters. These totals on this line do not include the FUS 2016 volumes reported for Kenai and Seward. The boundaries for the 8 communities are defined by ADF&G for fish ticket reporting, this doesn’t coincide exactly with city or census area boundaries. Some permits, people, and/or processors were present in more than one port, so sums of the port counts exceed the count the aggregate (e.g., if one person made a landing in Homer and Kasilof, she would be counted in both those ports, but in the ‘Total’ only once).
KPEDD 2018 Situations & Prospects page 70
Halibut and Sablefish
Seward and Homer continue to benefit from receiving about one-quarter of all Individual Fishing Quota (IFQ) Halibut and Sablefish landings.
NOAA/NMFS also regularly publishes the volume and value harvested for Individual Fishing Quota (IFQ) fisheries for Pacific Halibut and Sablefish, for ports on the Kenai Peninsula. The pounds landed and value for halibut and sablefish on Figure 71 and 72 are partially missing from data reported on Figure 70 because IFQ halibut and sablefish are federally managed fisheries in (mostly) federal waters.
In 2017, 12% (2.1 million pounds) of all IFQ halibut landed crossed a Seward dock, 11% (2.0 million pounds) crossed a Homer dock, and the volume in landed in Kenai was confidential. These volumes mean that a 23% of all halibut IFQ landings in 2017 occurred at a Kenai Peninsula Borough port. Seward was the top sablefish port in Alaska, with 355 landings and 4.6 million pounds landed in 2017. Altogether, in the Kenai Peninsula Borough, at least 23% of all Sablefish IFQ harvest crossed a Seward or Homer dock in 2017.
Figure 71 - Commercial IFQ Halibut Harvest Landed in Seward and Homer 8,000,000 30% 7,000,000 7,062,545 7,236,747 27% 25% 6,000,000 24% 23% 20% 5,000,000 21% 20% 19% 4,000,000 4,542,015 4,479,795 4,486,441 15% 4,123,402 3,000,000 10% 2,000,000 5% 1,000,000 0 0% 2012 2013 2014 2015 2016 2017 NOTE: Percent of all landed in KPB does Millions of Pounds Halibut IFQ Landed in KPB not include any Kenai landings in 2016- Percent of all Halibut IFQ Landed in KPB 2017, which were confidential. Source: NOAA IFQ Reports. Halibut weights are reported in net (headed and gutted) pounds. Figure 72 - Commercial IFQ Sablefish Harvest Landed in Seward and Homer 27% 28% 5,800,000 26% 30.0% 24% 5,600,000 5,725,76522% 21% 25.0% 5,400,000 5,483,894 5,492,869 5,417,782 20.0% 5,200,000 5,000,000 15.0% 4,800,000 4,940,108 4,841,421 10.0% 4,600,000 5.0% 4,400,000 4,200,000 0.0% 2012 2013 2014 2015 2016 2017
Millions of pounds of Sablefish IFQ Landed in KPB NOTE: Percent of all landed in KPB does not include Percent of all Sablefish IFQ Landed in KPB any Kenai landings, which are confidential. Source: NOAA IFQ Reports. Sablefish weights are in round pounds.
KPEDD 2018 Situations & Prospects page 71
Seafood Processing Shared Fish Taxes
Seafood processors share approximately 3% of the value of the fish they process (collected from fishermen) with the state, which then shares half of this with the municipality where the processors are located.
During fiscal year 2017, the state shared almost $1.4 million with the Kenai region from commercial fishery taxes (Figure 73). Half of the total shared went to the borough, and the other half is split among cities proportional with the amount of processing that occurred there. Totals shared in FY 2017 (rounded) were $775,000 to the borough, $441,000 to Seward, $116,000 to Kenai, $43,000 to Homer, $1,775 to Seldovia, and $0 to Soldotna. This translates roughly to $92 million worth of fish processed in local plants. The more fish that are processed locally and the more value per fish that processors can add, the higher will be the revenue that circulates through the region from commercial fishing.
Figure 73 - Amount of State Fisheries Tax Shared with Kenai Borough and Cities
$2,009,804 $1,846,030 $1,775,545 $1,528,107 $1,377,426 $1,212,640 $1,006,329
FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017
Source: Alaska Department of Revenue Shared Taxes Annual Reports
14.2 Commercial Fishing by Kenai Peninsula Residents
Information in this section is organized by the commercial fishing activity of Kenai Peninsula residents. Data is presented about residents of Kenai Peninsula communities, and includes resident’s harvests and earnings, regardless of where they harvested the fish – so some may be (for example) from Kodiak or Bristol Bay.
Residents of the Kenai Peninsula have a long and successful history in commercial fishing and seafood processing.
While only about 8% of Alaska’s population lives on the Peninsula, since 2010 local residents have consistently landed between 10% and 17% of all pounds of commercial fish harvested by Alaskans, and taken home 17-19% of all commercial fishing gross earnings of Alaskan residents (Figure 74).
Efforts to increase the share of not only Kenai Peninsula residents, but of all Alaskan’s harvest of Alaska’s resources, are important. Lower 48 fishermen are more successful than Alaskans when it comes to commercial fishing in state waters.
KPEDD 2018 Situations & Prospects page 72
Alaskans account for 70% of those who fished commercially in 2016 and 2017; however, they harvested only 17% of all commercial fish pounds in 2016 and 20% in 2017. And, the estimated gross earnings from the fish that Alaskans harvested was only 33% of the total value of commercially caught fish in state waters in 2016 and 39% of the total value in 2017. Figure 74 - Kenai Peninsula Commercial Fishermen: % of Alaskan’s Harvest and Value
19% 19% 19% 18% 17% 17% 18% 17% 17%
17% 15% 15% 15% 14% 14% 15% 13%
10%
2009 2010 2011 2012 2013 2014 2015 2016 2017 (prelim) KPB Resident's Earnings - Percent of All Alaskan Commercial Fishermen KPB Resident's Pounds Landed - Percent of All Alaskan Commercial Fishermen Source: Commercial Fisheries Entry Commission, Fishery Statsitics
Figure 75 - Value by Species of Kenai Peninsula Borough Commerical Fishermen
$140,000,000 Salmon is Most Lucrative Confidential Fishery for Peninsula (other shellfish, $2,664,575 Residents Other some halibut)
$120,000,000 groundfish, Estimated gross earnings to $9,173,002 Crab Kenai Peninsula Borough Halibut, residents from their $14,241,764 Herring commercial fishing efforts $100,000,000 Sablefish, in 2016 and 2017 $12,045,663 (preliminary) shows that - $9,099,725 as usual - salmon is the Other groundfish, ‘bread and butter’ fish and $80,000,000 $8,171,776 accounted for over half to Halibut, over two-thirds all $15,419,872 commercial fishing earnings to residents (Figure 75). $60,000,000 Sablefish, $9,613,436 Source: CFEC, After salmon, halibut is the Salmon, Fishery next highest value $91,258,901 Statistics, commercial fish for $40,000,000 2016 and residents (and remember 2017 that this CFEC dataset is Salmon, (prelim). incomplete for the halibut $54,858,498 harvest). $20,000,000
$0 2016 2017 (prelim)
KPEDD 2018 Situations & Prospects page 73
Residents from 18 communities on the Kenai Peninsula commercial fished in 2016 (Figure 76). Homer residents again lead the harvest; their commercial fishermen landed 74% of all pounds that Kenai Peninsula residents harvested and earned 67% of the gross earnings that came to the region in 2016. Seward residents place second with 5% of the Kenai Peninsula Borough resident total harvest and brought home 8% of the total gross that residents earned.
Figure 76 - Kenai Peninsula Resident Commercial Fishing Activity, 2016, all Fisheries Combined (BY RESIDENCY OF FISHERMEN) Estimated No. of Pounds No. of Permits Residents from …. Gross Fishermen Harvested Fished Earnings who Fished Anchor Point $1,298,207 1,315,533 25 30 Clam Gulch $695,294 517,471 27 36 Cooper Landing X X 2 2 Fritz Creek $1,296,752 1,413,579 11 17 Halibut Cove $304,398 176,313 5 10 Homer $66,150,778 77,938,018 476 722 Hope $0 0 0 0 Kasilof $2,031,605 2,226,895 87 103 Kenai $5,712,714 4,296,079 162 192 Moose Pass $682,765 841,533 5 5 Nanwalek $0 0 0 0 Nikiski $1,132,097 949,985 30 34 Nikolaevsk X X 15 22 Ninilchik $835,527 796,814 30 34 Port Graham $109,548 90,608 4 5 Seldovia $2,811,472 3,370,870 34 49 Seward $7,782,685 5,124,686 44 76 Soldotna $4,391,568 3,574,698 112 129 Sterling $1,970,665 1,494,877 25 34 Tyonek $95,339 66,480 7 8 KBP TOTAL $98,329,046 104,860,835 1101 1,508 X = confidential Source: CFEC Fishery Statistics. Note: dataset does not include all federally managed fisheries in federal waters, including a portion of the halibut harvest.
14.3 Workforce and Earnings
As noted at the beginning of this chapter, it is difficult to use published economic and labor data to identify the economic contribution on the Peninsula from commercial fishing and seafood processing because these workers are divided among many different industry sectors. For example, commercial fishing is part of ‘agriculture-forestry-fishing- hunting’, seafood processing is part of ‘manufacturing’, and marine sightseeing and transportation are part of ‘transportation and warehousing’, and so on.
To help address this, each year the ADOLWD at the request of KPEDD does a special review of maritime related employment and wages. This, and other information is used to put together Figure 68, Maritime Summary.
KPEDD 2018 Situations & Prospects page 74
Figure 77 pulls out just the seafood processing and commercial fishing information, and also considers gross earnings reported to the CFEC.
A count by the state completed a few years ago identified close to 30 fish and shellfish processors on the Kenai Peninsula, located in Anchor Point, Homer, Kasilof, Kenai, Nikiski, Ninilchik, Seward, and Soldotna. They range from smaller value-added operations to large statewide processors. The largest plants are the former Icicle Seafoods facility now owned by Cooke Aquaculture and still operated as Icicle Seafoods in Seward, and the Inlet Fish plants in Kenai and Kasilof owned by North Pacific Seafoods.
When seafood processing and commercial fishing are combined, salaried workers and business proprietor data together yields an estimate of (Figures 68 and 77): 2,044 average annual workers on the Kenai Peninsula. This is a drop of 102 workers or 5% compared to 2016. Income, from combined earnings and wages, is estimated at between $102 and $116 million.
Keep in mind that the estimated gross commercial fish earnings to fishermen are not net earnings. It is the value of the fish harvested, against which commercial fishermen must deduct all their business expenses to determine their net income.
Figure 77 - Commercial Fishing and Seafood Processing in Kenai Peninsula Borough Business Type No. of Total Wages or Number of Average Firms Earnings Annual Workers Commercial Fishing (self-employed)1 (2016) 1,586 $84 - $98 million 1,586 Fishing and Seafood Processing 40 $18 million 458 (2017, employees) 2 (employees/payroll, for (over 1,000 at peak aquaculture, commercial fishing, seafood season) processing, wholesalers, seafood markets) Total, Commercial Fishing & Seafood 1,626 $102 - $116 million 2,044 Processing Sources: 1- US Census Nonemployer Statistics 2016 and CFEC Gross Earnings 2017 2- ADOLWD QCEW, 2017, N. Fried
14.4 Cook Inlet Fisheries
Kenai Peninsula residents dominate in both the Cook Inlet driftnet and setnet fisheries (Figure 78).
Kenai Peninsula Borough residents from 12 different communities – earned almost three-quarters of all Cook Inlet driftnet gross earnings, and 60% of the Cook Inlet setnet salmon fishery gross earnings in 2016.
Cook Inlet Driftnet Fishery (SO3H)
Between 2014 and 2015, total earnings from the Cook Inlet driftnet fishery dropped 52% from $13.7 million to $6.5 million. However, gross earnings for these fishermen partially rebounded in 2016 (Figure 78), up 18% to $11.7 million. Fortunes of Kenai Peninsula residents who participated in the driftnet fishery followed similar trends: their gross earnings in 2014, 2015, and 2016 respectively were: $13.7 million, $6.5 million, and $7.5 million.
Cook Inlet SetNet Fishery (SO4H)
In contrast to the drift fishery, between 2014 and 2015 total earnings from the Cook Inlet setnet fishery rose 24%, from $11.7 million to $13.7 million. But, moving the opposite of the drift fishery, in 2016 gross earnings for setnet fishermen in Cook Inlet fell 22%, down to $10.7 million (Figure 78). Kenai Peninsula residents who participated in the setnet
KPEDD 2018 Situations & Prospects page 75
fishery followed similar trends: their gross earnings in 2014, 2015, and 2016 respectively were: $7.3 million, $8.5 million, and $6.4 million.
Figure 78 - Gross Earnings Cook Inlet Drift and Set Gillnet Salmon Fisheries, 2015 and 2016 Drift Gillnet Fishery (S03H) Set Gillnet Fishery (S04H) Residency of Permit Holder 2015 2016 change 2015 2016 change Entire Fishery Total $9,917,636 $11,719,597 18% $13,698,735 $10,720,426 -22% Alaska Resident Total $7,731,748 $8,897,268 15% $11,085,738 $8,265,129 -25% Washington Resident Total $653,060 $941,403 44% $946,811 $802,184 -15% Oregon Resident Total $636,966 $573,300 -10% x x x California Resident Total $107,516 $164,862 53% $79,288 $47,338 -40% Other States Resident Total $788,347 $1,142,765 45% x x x Kenai Peninsula Resident $6,509,025 $7,505,246 15% $8,507,601 $6,386,596 -25% Permit Holders Total Anchor Point $169,307 $178,603 5% $135,200 x Clam Gulch X X x $1,080,423 $521,418 -52%
Fritz Creek $108,683 $140,261 29% $0 $0
Halibut Cove $66,655 X x x $0 Homer $3,070,450 $3,386,110 10% $310,061 $238,099 -23% Kasilof $492,049 $553,205 12% $1,166,557 $643,927 -45% Kenai $996,374 $1,107,249 11% $3,079,747 $3,027,307 -2% Nikiski $198,393 $353,381 78% $453,072 $396,754 -12% Nikolaevsk $226,297 $255,216 13% $0 $0 0% Ninilchik $131,041 $145,657 11% $535,945 $262,039 -51% Port Graham X X x $0 $0 0% Seldovia X $76,048 x $310,514 $164,463 -47% Soldotna $659,306 $844,300 28% $1,395,728 $970,015 -31% Sterling $250,790 $276,935 10% x x x
Tyonek $0 $0 0% x $95,339 Source: Basic Information Tables, CFEC, Fishery Statistics, downloaded summer 2018, includes revised data previous years
The 2016 total salmon harvest in Cook Inlet was the lowest it’s been since 2001: less than 20 million pounds of salmon were harvested (Figure 80). Runs rebounded in 2017, to 25 million pounds of total salmon, still a million pounds below the 20-year average.
Cook Inlet sockeyes are the region’s most lucrative salmon fishery and has typically been 65-85% of all pounds of salmon commercially harvested in Cook Inlet. However, in 2015 they were just over one-third of the total haul because there was a five-fold increase in the pounds of Pinks harvested that year. In 2017, there was also a sizeable pink harvest, as well as Chum and Coho haul, so Sockeye represented just under half the total salmon harvest in Cook Inlet this year.
The commercial Chinook salmon harvest in Cook Inlet was just over 174,000 fish in 2017, slightly lower than 2016 but still in the middle of a three-year rebound. Ex-vessel value for 2017 Chinooks rose for the 5th year in a row, fetching $659,000 (Figure 80).
KPEDD 2018 Situations & Prospects page 76
The per pound price for all species of Cook Inlet saamon rose in 2017 (Figure 79).
Figure 79 - Average Ex-Vessel Price Per Pound, Cook Inlet Salmon, 2007-2017 $4.50 2017 prices Chinook $4.00 $3.86 $3.50 Sockeye $3.00 $2.50 $2.00 Coho $1.84 $1.50 $1.00 $1.06 Chum $0.50 $0.63 $0.32 $0.00 Pink 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Source: OCEANAK ADF&G COAR Buying Subject Area. ADF&G, Alaska Commercial Salmon Harvests & Ex-Vessel Values
Ten years of Cook Inlet harvest data by salmon species and the total exvessel price paid to fishermen can be reveiwed on Figure 80. The charts in Figure 80 also show a five-year moving averages for all harvests and earnings.
KPEDD 2018 Situations & Prospects page 77 Figure 80 - Cook Inlet Salmon Harvests and Ex-vessel Value of Harvest, by Species, 2008-2017 with 5-year Moving Average Trendlines
Cook Inlet SOCKEYE Salmon 40,000 Cook Inlet SOCKEYE Salmon $60,000 (1000s pounds) Exvessel Value (in $1000s) $50,000 30,000 $40,000 20,000 $30,000
$20,000 Thousands
10,000 Thousands $10,000
0 $0
2009 2008 2010 2011 2012 2013 2014 2015 2016 2017
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
350 Cook Inlet CHINOOK Salmon Cook Inlet CHINOOK Salmon $1,000 (1000s pounds) 300 Exvessel Value (in $1000s) $800 250 200 $600 150
Thousands $400 100 Thousands $200 50
$0
2009 2010 2011 2012 2013 2014 2015 2016 2017
0 2008
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Cook Inlet PINK Salmon 25,000 Cook Inlet PINK Salmon $5,000
(1000s pounds) Exvessel Value (in $1000s)
20,000 $4,000 es 15,000 $3,000
10,000 Thousands
Thousands $2,000
vessel Valu vessel - 5,000 $1,000
0
2009 2010 2011 2012 2013 2014 2015 2016 2017
2008 $0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
2,500 Cook Inlet COHO Salmon Cook Inlet COHO Salmon $3,000 (1000s pounds) 2,000 Ex-Vessel Value 1,500 $2,000 1,000 Commercial Salmon Harvests and Salmon Commercial Ex $1,000
500 Thousands Thousands
0
2014 2017 2009 2010 2011 2012 2013 2015 2016
2008 $0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Cook Inlet CHUM Salmon 4,000 Cook Inlet CHUM Salmon $2,500 Source: ADF&G, Alaska Source:ADF&G, (1000s pounds) Exvessel Value (in $1000s) $2,000 3,000 $1,500 2,000
Thousands $1,000 Thousands 1,000 $500
$0
2008 2010 2011 2012 2013 2014 2015 2016 2017
0 2009
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Cook Inlet Commercial Fishing Permit Values
Between 2016 and 2017: The average value of a Cook Inlet purse seine permit declined $8,800, to $59,500. The 20-year high for a permit was in 2014 at $86,000; since then the price has dropped 31%. The average value of Cook Inlet drift gillnet permits declined $10,100, to $42,400. The 20-year high for these permits was $83,100 in 2013. The average value of Cook Inlet set gillnet permits rose $300, to $15,600. The average value of a Cook Inlet herring purse seine permits was the same for the 5th year in a row, at $16,800.
14.5 Sector Trends, Issues, and Outlook
Tariffs Causing Jeopardy and Uncertainty for Fish Exports and Imports16. Last year China purchased 54% of Alaska’s seafood, valued at nearly $800 million. Much is now at risk given new U.S.-China tariffs. On July 6, 2018, the first 25% tax went into effect on more than 170 U.S. seafood products going to China. On August 23 more items were added to the list, including fish meal from Alaska. “As of right now, nearly every species and product from Alaska is on that list of tariffs,” said Garrett Evridge, a fisheries economist with the McDowell Group, in an interview with the Fish Factor in late August 2018. The tariffs on U.S. seafood products exported to China are a done deal. In the long run, Evridge said Alaska might be able to shift exports to other countries, but the mere size of the Chinese market makes it tough to replace. Trump has proposed a 25% tariff on products coming into the U.S. from China. It would include seafood that is caught in Alaska, shipped to China for reprocessing into fillets, portions or fish sticks and then resent to the U.S. for distribution to buyers.
Getting in on the Mariculture Wave17. Individuals in Halibut Cove and Seldovia are two of 16 new applicants for shellfish and seaweed mariculture farms in Alaska. In 2017, Alaskan farms produced 11,456 pounds of clams, 1,678 pounds of mussels, 16,570 pounds of seaweeds, and 1.8 million oysters. Julie Decker, director of the Alaska Fisheries Development Foundation and head of an 11-member mariculture task force established in 2016 by Governor Walker, concluded that mariculture crops could yield $1 billion for the state within 30 years.
Add Value. Seward and Kenai are top US ports for commercial fish landings and total ex-vessel value. Fish are generally plentiful in the region and the industry and workforce are positioned to continue to benefit. Cook Inlet region seafood processing operations have a competitive advantage over other parts of the state in being on the road system. Freshly frozen fish can be packed in refrigerated vans and trucked to US and Canadian markets immediately after it is caught. Additional economic opportunities are available by increasing local value-added seafood processing in areas such as new food products, nutraceuticals, cosmetics and skin care, fish skin leather, supplements, performance fabrics from crab and shrimp shells, bio-oils and fuels, and other products that increase the percent utilization of whole fish.
Halibut IFQ reduced in 2018, but Cook Inlet still has largest share in the Pacific Northwest. For the second time in 94 years, the United States and Canada did not reach consensus on Pacific halibut catch limits at this year's annual International Pacific Halibut Commission meeting, held in Portland in January 2018. The U.S. then went forward with setting catch limits through its domestic regulatory process, and set limits lower than the 2017 levels. After higher
16 Source for much of information in this paragraph is Laine Welsh, Fish Factor, as published in September 5, 2018 Juneau Empire. 17 Source for much of information in this paragraph is Laine Welsh, Fish Factor, as published in the August 27, 2018 Cordova Times.
KPEDD 2018 Situations & Prospects page 79
overall IFQ halibut quota in 2017 by 7%, the 2018 IFQ halibut allocation was lower by 9% out of concern for the health of halibut stocks. For area 3A (Central Gulf of Alaska/Cook Inlet region) there was a 7.74 million pound IFQ halibut allocation in 2017, and a 7.35 million pound allocation in 2018 (Cook Inlet is getting a proportionally larger share of the total in 2018). The 2018 rules revised Catch Sharing Plan allocations for guided sport (charter) and commercial individual fishing quota (IFQ) halibut fisheries in Cook Inlet too, which included establishing a 1.79 million pound catch limit for charter operations in 2018. Anglers charter fishing in area 3A had a two fish daily bag limit, maximum size limit of less than or equal to 28 inches on one of those halibut (down from 30 inches in 2015), and a four fish annual limit. In addition, Wednesdays were closed to charter fishing in 3A all season, along with six Tuesday closures in the summer. Vessels and charter permit holders continue to be limited to one trip per day.
“Every Fish has a Name on It”. Being near Alaska’s population centers and having road accessible fisheries raises attention to Cook Inlet fisheries. At Alaska Board of Fisheries meetings, management concerns erupt among commercial gear groups, between Anchorage/Mat-Su versus and Cook Inlet fishing groups, and between area sport and commercial fishing associations. Unknowns among management and allocation decisions create anxiety and uncertainty among users. Years with lower size fish runs and late fish runs exacerbate these issues. Anxiety and competition among US and Canada, and then among commercial and sport harvesters is at issue at International Pacific Halibut Commission (IPHC) and the North Pacific Fishery Management Council (NPFMC),
Reduced ADF&G Budgets. Declining state budgets have impacted fish research and data collection as well as the timeliness of fish decision-making. A state budget impasse at the Legislature in early 2017 threatened to prevent commercial fishing. A politically unpopular reduction of Permanent Fund Dividends has helped stabilize operating budgets at a new lower level, reducing uncertainty. Along the way though reduced state operating budgets and personnel have stretched fishery managers thin at times and impacted research programs.
Ocean-Warming. The long-term effect of ocean warming and acidification on future commercial fisheries migration and growth patterns is an unknown and of concern to the industry.
KPEDD 2018 Situations & Prospects page 80
15 Industry Spotlight | Health Care
15.1 Workforce, Wages, Business Sales We all need health care services. With three hospitals, a wellness center, multiple health and dental clinics, behavioral health support, dentists, assisted living and nursing homes, and many allied services and businesses, every dollar spent at one of these local health facilities keeps income on the Peninsula, circulating within the region, and supports local jobs.
On the Kenai Peninsula, heath care and social assistance is the largest private sector employer and total wages and receipts for this industry were the 2nd largest, just as was true in 2016.
Economically, health care continues to be a stabilizing force both on the Peninsula and statewide. Despite 2017’s overall job and wage losses, health care jobs on the Peninsula grew by almost 180 and total employee wages and self-employment earnings increasing by $10 million.
Together, the number of employees (3,308) and self‐employed small business owners (278) numbered 3,586 (Figure 41). Combined employment and self‐proprietor earnings grew just over 2%, from $145.5 million in 2016 to $155.4 million (Figure 43).
Health care is one of very few industries ADOLWD forecasts for growth in 201818. “Health care growth has been robust for the last three decades and stronger than expected in recent years due to the increased health care needs of the state’s aging population, Medicaid expansion, and broader health insurance coverage. Health care employment increased by 2,900 from 2015 through 2017 and the industry is forecasted to add an additional 700 jobs in 2018. With increased coverage comes increased demand for and access to medical services. Medicaid and the Children’s Health Insurance Program, or CHIP, have expanded coverage by 60 percent under the Affordable Care Act, providing insurance for an additional 73,600 Alaskans, according to the Henry J. Kaiser Family Foundation.”
Figure 81 - Kenai Peninsula - Health Care & Social Services, Number of Employees and Total Wages ($ Millions)
3,500 3,251 3,265 3,222 3,308 $160 3,095 3,194 2,934 3,030 3,000 2,709 $140 2,631 $146 $137 $120 2,500 $134 $122 $127 $113 $100 2,000 $107 $108 $97 $101 $80 1,500 $60 1,000 $40 500 $20 0 $0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Number of Employees (avg ann) Total Wages ($ millions)
18 ADOLWD January 2018 Trends, Employment Forecast
KPEDD 2018 Situations & Prospects page 81
In addition to increased workers and earnings, gross business sales by health care and social assistance businesses on the Peninsula increased 2% or by $531,000 in 2017, from $34.4 million to $34.9 million (Figure 82). Keep in mind that while all businesses must report their gross sales to the Kenai Peninsula Borough prior to taking exemptions, because most sales of health services are tax exempt, it is likely that several medical offices do not report. Thus, gross sales from this sector are likely higher than reported. Only about 6% of all health care-related sales are subject to sales tax.
Figure 82 - Gross Business Sales, Health Care & Social Assistance Businesses, Kenai Peninsula, 2013-2017
$30,000,000
$25,000,000
$20,000,000
$15,000,000
Gross Sales Tax $10,000,000
$5,000,000 Source: KPB Finance Dept., Sales TaxOffice Source:KPB Finance Sales Dept., $0 2013 2014 2015 2016 2017 Soldotna $9,101,448 $9,101,448 $23,659,401 $23,877,617 $21,421,449 Homer $5,376,320 $5,029,172 $4,905,075 $4,477,232 $5,290,158 Kenai $326,137 $451,591 $1,636,173 $1,854,372 $2,666,811 Seward $1,310,379 $1,310,379 $1,676,350 $1,667,107 $1,261,353 Outside of Cities + Seldovia $4,255,269 $18,262,746 $4,632,661 $2,491,968 $4,259,346 TOTAL BOROUGH $20,369,553 $34,155,336 $36,509,660 $34,368,296 $34,899,117
The Alaska Department of Labor and Workforce Development occupational database shows at least 50 workers on the Kenai Peninsula in 13 health occupations in 2016 (Figure 83).
Figure 83 - Health Care Occupations with at Least 50 Workers, on Kenai Peninsula, 2016 Occupation Number of Workers, 2016 Registered Nurses 526 Home Health Aides 340 Nursing Assistants 301 Healthcare Support Workers, All Other 206 Medical Assistants 187 Social and Human Service Assistants 169 Recreational Therapists 157 Dental Assistants 124 Physicians and Surgeons, All Other 66 Physical Therapists 62 Medical Records and Health Information Technicians 59 Mental Health Counselors 51 Radiologic Technologists 51 Source: ADOLWD Occupational Database
KPEDD 2018 Situations & Prospects page 82
15.2 Number of Businesses in Health Care and Social Assistance Counts of the number of employers and small businesses engaged in health care and social assistance work on the Peninsula varies depending on the source: There were 278 small business owners (self- Figure 84 – Ranked Health Outcomes and Health Factors Health Health employed, no employees) who lived in the KPB Alaskan Outcomes Factors with a health care or social assistance business Borough or Census Area in 2017 (up 12 compared to 2016). Rank Rank Juneau 1 1 The Kenai Peninsula Borough (KPB) listed 95 Kodiak Island 2 4 businesses registered for sales tax purposes Valdez-Cordova 3 11 (Dec 2017), of which 87 listed a Kenai Southeast Fairbanks 4 14 Peninsula community as home. Kenai Peninsula 5 10 The list of Alaska State business license holders Sitka 6 3 had 413 businesses in this sector with a Ketchikan Gateway 7 12 physical address on the Kenai Peninsula in June Fairbanks North Star 8 6 2018. Matanuska-Susitna 9 13 The ADOLWD QCEW listed 199 employers in Anchorage 10 2 this sector active in the KPB in 2017. Prince of Wales-Hyder 11 16 Petersburg 12 8 Haines 13 5 15.3 Resident Health on the Peninsula Denali 14 7 In 2018, the Kenai Peninsula Borough is the 4th top‐ Bristol Bay 15 15 ranked in Alaska for health outcomes and 10th top Hoonah-Angoon 16 17 ranked for health factors (Figure 84). North Slope 17 18 Lake and Peninsula 18 20 Each year the Robert Woods Johnson Foundation, in Aleutians West 19 9 collaboration with the University of Wisconsin, Nome 20 21 analyzes 35 different publicly available health datum to Bethel 21 23 rank county (borough) overall health. Health outcomes Yukon-Koyukuk 22 22 are based on how long people live and how healthy Northwest Arctic 23 24 people feel while alive. Heath factors are based on four Dillingham 24 19 types of measures: health behaviors, clinical care, Kusilvak 25 25 social and economic, and physical environment factors. Aleutians East NR NR Skagway NR NR Health Insurance Wrangell NR NR Yakutat NR NR According to the 2012-2016 American Community Source: Survey, 20% of the borough’s 56,486 people who are in http://www.countyhealthrankings.org/app/#!/alaska/2017/overview the “civilian non-institutional population” do not have There is a wealth of health information available at this website. health insurance coverage.
Of those that have insurance, 30% receive public coverage (Medicaid, Medicare, Veterans) and the remainder has private insurance coverage.
Major Health Care Providers, Issues and Trends
The Central Peninsula Hospital (CPH) located in Soldotna is an acute care hospital owned by the Kenai Peninsula Borough (KPB), which leases the facility and its operations to CPH. CPH is a private non-profit corporation governed by a self-appointed 11‐member volunteer Board. CPH services a significant portion of the Kenai Peninsula population totaling over 40,000 including the Kenai, Soldotna, and Sterling areas. There are a number of facilities and services
KPEDD 2018 Situations & Prospects page 83
under the CPH umbrella including the 49‐bed Hospital, the 60‐bed Heritage Place a long‐term skilled nursing facility, nine family and specialty physician services clinics, and the recently completed $43 million River Pavilion, which provides growing room for cancer oncology and infusion care, The Spine Center, and other programs. The hospital provides emergency medical services regardless of ability to pay and promotes wellness services for all.
CPH has been in a building and expansion phase for the majority of this decade. The latest additions include Diamond Willow, a sober living facility for those completing residential substance abuse treatment and a six-bed inpatient detox facility. A $40 million expansion currently under construction will provide a new Obstetrics Department, which is currently in the oldest and least secure part of the hospital. A new cardiac catheterization lab is included in the construction and will provide Peninsula residents services such as angiograms and pacemaker implantation locally without having to leave their home or family. The project will also increase CPH Intensive Care (ICU) bed capacity by three beds.
South Peninsula Hospital (SPH) in Homer is a Critical Access Hospital (CAH). It has an emergency room, 22 acute care beds, and several other health and wellness services. They also run a 28‐bed long term and extended care facility. The facility is a private non‐profit organization governed by an appointed nine-member volunteer Board of Directors. SPH is also owned by the Kenai Peninsula Borough, which leases the facility and its operations to SPH, SPH serves a 13,500‐ population base on the Kenai Peninsula, including Homer, Anchor Point, Seldovia, and other communities across the bay. The hospital now also owns the Homer Medical Clinic which provides primary care services. In 2018 construction was completed on a 5,700 sf expansion approved by voters to the Medical Clinic. The HVAC system at the Hospital was also upgraded.
Providence Seward Medical and Care Center (PSMC), located in Seward is a six‐bed Critical Access Hospital (CAH) with a separate skilled nursing facility. It is owned by the city of Seward, which leases the PSMC facility and its operations to Providence Health and Services (PHS), a Washington nonprofit corporation with affiliated facilities throughout Alaska including Anchorage, Valdez, and Kodiak. Under its operating agreement, PHS manages PSMC while all financial risk and rewards from the operations remain with the city. KPB health‐related powers do not extend to PSMC. This facility serves a population of about 5,000 comprised primarily of Seward area residents. Chugachmiut also has a medical and dental clinic in Seward.
The Dena’ina Wellness Center is a 52,000 sf facility incorporating traditional Kenaitze design elements that opened in 2014 in Kenai. It offers medical, dental, behavioral health, chemical dependency, wellness, physical therapy, pharmacy support and traditional healing services all beneath one roof for Alaska Native/American Indian beneficiaries on the Peninsula. New services include optometry and local eyewear availability. In August 2017 several Alaska Native health groups reviewed their integrated health programs with facility tours and presentations to Health and Human Services Secretary Tom Price in Anchorage. The Dena’ina Wellness Center is an example of this extensive health care system in Alaska.
In the city of Seldovia are the Seldovia Village Tribe’s community health center and the private Seldovia Medical Clinic.
15.4 Sector Trends, Issues, and Outlook A Sustainable Future for Kenai Health Care Facilities, Providers, and Services in an Evolving Health Care Market
The biggest health care challenge for the Kenai region continues to be the rapidly changing healthcare landscape and uncertainty regarding multiple proposed payment reforms. Medical tourism is also beginning to trend towards taking patients with high cost procedures to locations in the lower forty-eight. Healthcare is also trending towards the outpatient setting in a regulatory and payment structure. Hospitals on the Kenai Peninsula have over 1,500 direct employees and total facilities valuation exceeds $500 million.
KPEDD 2018 Situations & Prospects page 84
There continues to be opportunity if Kenai Peninsula hospitals position for the future by addressing individual hospital opportunities, seeking Peninsula‐wide efficiencies, and aligning hospitals with physicians, capital/insurance partners, and other partners. Coordinated care models with potential for global payments continue to be explored by Central Peninsula Hospital. This type of system incentivizes focus on prevention and helping patients better manage their chronic conditions. This helps reduce emergency room visits and lowers the cost of care through active management.
Growing Senior Population
The ADOLWD 2017 population estimates show that in 2010, there were 6,276 people age 65 or older, who were 11% of the Kenai Peninsula Borough population. By 2017, there were 9.584 folks age 65 or older, comprising 17% of the population (see Figure 3). This trend is expected to continue until about 2035 as long as the health care, services, and housing that seniors desire and need are available. Providing services for this fast growing demographic is increasing demand from health care providers. These patients also require more from family members who now find themselves taking care of their aging family members. Many of these patients would be better served by home health and hospice services if more were available. As the senior population grows, demand will increase for services to assist people to age in place, for traditional assisted living and long‐term care, for home health, hospice, palliative care, respite care, and related services.
Opioid and Drug Addiction
National and statewide drug and opioid addiction is also impacting the Peninsula’s residents and health care system. Heroin can be easier and cheaper to get than alcohol. The rate of Alaskans who died from opioid overdoses increased 77% over the last decade, with the highest overall rate of deaths reported in the last year, according to an August 2018 report issued by the Alaska Department of Health and Social Services19. The Gulf Coast Region, made up of the Kenai Peninsula Borough, Kodiak Island Borough and Valdez‐Cordova Census Area, showed a decrease in the rates of opioid overdose deaths from 11.4 per 100,000 to 10.0 per 100,000 between 2013 and 201720. Overall, however, the Gulf Coast region came in third in total overdose deaths between that period, with 60 people dying from overdose. The proportion of high school students who have ever used heroin was highest in the Gulf Coast region (3.1%)
Peninsula Community Health Services personnel suggest that a system‐wide problem is the “silo‐ing” of funding for behavioral and mental health, drug addiction treatment, and re‐entry services post incarceration; these service lines thus compete for funding. In addition to not enough supportive services, sometimes providers are not aware of what each other is doing. However, the level of collaboration among Peninsula providers is reported to be very high; for example the Collaborative Care Program is helping to address barriers to effective care.
The Alaska State Legislature authorized an additional $14 million dollars of Disproportionate Share Hospital (DSH) funding. These funds were specifically provided to the Department of Health & Social Services’ (DHSS’) Division of Behavioral Health (DBH) for the purpose of providing funds to general acute care hospitals impacted by the reduction in bed capacity at Alaska Psychiatric Institute (API) and who were therefore having to provide “mental health care” in their emergency departments (EDs) or in their acute care or medical/surgical units. This issue has approached crisis levels for hospitals that do not provide emergency mental health services.
Needs of Future Nikiski Plant and Gas Pipeline Workforce
Continuing to be of future concern is the impact to health care and social assistance facilities’ and providers’ needs if the gas pipeline is built and terminates at an LNG plant in Nikiski. Expanding hospital and health care services cannot be completed overnight. Current thinking is that this could mean an increase of 5,000 or more people on the Kenai, which would create a demand for 10-25 more hospital beds or related space at a rough cost of $100 million. This type of
19 Filley, J. and Hull-Jilly, D., “Health Impacts of Opioid Misuse in Alaska, AHESS, August 2018 20 Ibid.
KPEDD 2018 Situations & Prospects page 85
expansion typically needs a 15-year planning window; yet if the gas line goes, there will not be 15 years to plan and meet service demands.
Other Challenges and Opportunities Demand for mental health and substance abuse services exceeds capacity. Demand for cardiology services that is now unmet, but when the Central Peninsula Hospital’s Cath Lab is completed, many of these needs will be able to be met on the Peninsula rather than in Anchorage. Reduce the outmigration of services, e.g., approximately 50% of joint replacement orthopedic cases are captured in Anchorage. Why does it cost one‐third more for a hip replacement locally compared to Seattle? Part of the answer lies in pursuing coordinated purchasing to enhance bulk‐purchase power and distribution. Recent efforts have occurred through creating and using emergency services areas to address the barriers that geography sometimes creates for emergency care on the Peninsula and among communities and facilities. Limited access to continuing care services. For example, Seward has a single small capacity Assisted Living facility and no Home Health Aides; Soldotna lacks hospice services. Lack of awareness in Seward regarding healthcare service offerings available in Soldotna. Lack of obstetrical care in Seward requires a majority of patients to be referred for treatment away from home: referral trend is 90% to Anchorage /10% to Soldotna. The current system of care is not focused on prevention. Resources are not in place to fully support population health. Collaboration on: management support / expertise, contracted services (laundry, credentialing, legal, etc.), telehealth, recruitment of providers and staff (shared staffing), shared education and training (staff, leadership, medical staff, Board), IT integration, and payer contracting and negotiations. Share specialists (PSMC is currently supported by the following Anchorage‐based specialists: OB, Ortho, ENT, GI, Cardio)
KPEDD 2018 Situations & Prospects page 86
16 Industry Spotlight | Professional Services
There are three types of services grouped together here21: 1. Professional, Scientific, and Technical Services (PST) 2. Management of Companies and Enterprises (MCE) 3. Administrative and Waste Services (AWS)
Gross business sales totaled $106 million in 2017, down $28 million or 21% from 2016 (Figure 85).
In 2017, there were an average of 666 employees on the Kenai Peninsula working in Professional and Business Services jobs, and another 893 small business owners (2016). Employees earned $30 million in wages while small business owners earned another $24 million (Figure 86).
Gross sales, the number of employees (average annual), and the total wages to those in these professions on the Kenai Peninsula are all trending down over the last four years. Recent declines reflect a statewide trend linked to what ADOLWD is calling “second wave” losses in construction and professional services. These industries depend heavily on oil and gas and state government work, both in a recessionary mode. ADOLWD predicts more losses statewide for the Professional Business Services sector in 2018.
Figure 85 – Gross Business Sales - Professional and Business Services, Kenai Peninsula Borough, 2011-2017
$219,771,909 $210,279,140 NOTE: Mgmt. of Companies $203,914,360 $193,869,590 sales are not included as data is confidential. It is estimated that it would add no more than $4
$133,946,390 $126,854,262
$105,779,852
2011 2012 2013 2014 2015 2016 2017 total Source: Kenai Professional, Scientific & Technical Services Peninsula Borough Finance Dept., Sales Administrative & Waste Management, Remediation Services Tax Division
21 The 2017 Situations & Prospects Report only covered Professional, Scientific, and Technical Services in this chapter (NAICS 54). The 2018 report broadens this category to capture all Professional and Business Services (NAICS 54, 55, and 56).
KPEDD 2018 Situations & Prospects page 87
Figure 86 – Number of Employees and Total Wages, Professional and Business Services, Kenai Peninsula Borough, 2013-2017
900 $50,000,000 832 843 796 800 $45,000,000
685 $40,000,000 700 666 $35,000,000 600 511 532 526 $30,000,000 500 453 419 $25,000,000 400 $20,000,000 300 $15,000,000 200 289 277 $10,000,000 238 202 219 100 $5,000,000
0 32 34 32 30 28 $0 2013 2014 2015 2016 2017 total
No. Employees - Professional, Scientific, Technical Source: No. Employees - Administrative & Waste Services ADOLWD QCEW, 2017 Total Employee Wages (all)
Counts of the number of employers and small businesses engaged in Professional and Business Services on the Peninsula vary depending on the source: There were 893 Kenai Peninsula small business owners (self-employed, no employees) offering Professional and Business Services assistance in 2016. The Kenai Peninsula Borough (KPB) listed 504 businesses registered for sales tax purposes (December 2017), including 384 in PST, 1 in MCE, and 119 in AWS. Of this total, 372 listed a Kenai Peninsula community as home. The list of Alaska state business license holders shows 869 businesses in Professional and Business Services with a physical address on the Kenai Peninsula in June 2018. The ADOLWD QCEW listed 195 employers active in the Kenai Peninsula in 2017. This includes 125 in PST, 5 in MCE, and 65 in AWS.
KPEDD 2018 Situations & Prospects page 88
17 Industry Spotlight | Construction
Construction employees on the Kenai Peninsula numbered 861 in 2017 (average annual employees) (Figure 88). There were also 631 self-employed business owners (2016). Employees earned $49 million in wages and small business owners earned $31 million.
The number of workers in all three primary types of construction (specialty, buildings, heavy) has been declining for 4 years on the Peninsula, while the number of self-employed businesses in construction has generally been rising for 5 years.
Gross business sales for construction activities totaled $305 million in 2017, down $87 million or 22% from 2016. This was the 5th consecutive year of decline (Figure 87).
Recent declines reflect a statewide trend linked to what ADOLWD is calling “second wave” losses in construction and professional services. These industries depend heavily on oil and gas and state government work, both in a recessionary mode. ADOLWD predicts more losses statewide for the Construction in 2018. In the January 2018 Trends magazine, ADOLWD notes that losses are tapering, partly because the bulk of the losses have already happened. The construction industry Alaska-wide sustained a small decline in 2015 but had big losses in both 2016 and 2017. This is a similar pattern to what has happened on the Kenai Peninsula. The state’s capital budget is down again in fiscal year 2018, and oil and gas- funded construction projects are unlikely to increase in 2018. Picture courtesy of Alaska Department of Labor and Workforce Development Counts of the number of employers and small businesses engaged in construction services on the Peninsula vary depending on the source: There were 631 self-employed business owners in construction who live in the Kenai Peninsula Borough in 2016. The Kenai Peninsula Borough (KPB) listed 719 construction businesses for sales tax purposes (December 2017), of which 477 have a Kenai Peninsula community as home. The list of Alaska State business license holders had 547 businesses in construction with a physical address on the Kenai Peninsula in June 2018. The ADOLWD QCEW lists 257 employers in this sector active in the Kenai Peninsula Borough in 2017. Of the total, 84 were in construction of buildings, 32 in heavy construction, and 141 were specialty trade contractors.
KPEDD 2018 Situations & Prospects page 89
Figure 87 - Construction, Gross Business Sales, Kenai Peninsula Borough, 2011-2017 $911,658,568
$565,883,608 $566,348,085 $492,129,671 $484,427,149 Source: $391,597,672 Kenai $304,527,369 Peninsula Borough Finance Dept., Sales Tax Division
2011 2012 2013 2014 2015 2016 2017
Figure 88 - Construction, Number of Employees (average annual) and Total Wages Kenai Peninsula Borough, 2013-2017
1066 1,022 1,015 $80,000,000 1,000 967 861 $70,000,000 No. Employees - Specialty Trade Construction 800 $60,000,000 616 566 594 521 $50,000,000 No. Employees - Heavy600 497 Construction $40,000,000
400 $30,000,000 152 No. Employees - 168 176 176 Construction of Buildings 119 $20,000,000 200 297 Total Wages (all) 259 274 270 245 $10,000,000
0 $0 2013 2014 2015 2016 2017
Source: ADOLWD QCEW, 2017
KPEDD 2018 Situations & Prospects page 90
18 Industry Spotlight | Agriculture (Food, Peonies, Marijuana, and More)
Whether it is growing food, peonies, marijuana, crops, or rhodiola rosea, agriculture on the Kenai Peninsula is increasing; gross sales came close to doubling between 2016 and 2017.
There are enough businesses now that for the first time more in-depth reporting is available from ADOLWD without violating confidentiality. Where food is concerned the number of growers is increasing and local foods are easier to buy in a variety of venues. However, farm income data suggests that it’s still difficult to farm profitably.
Marijuana now has 28 cultivators on the Peninsula who contribute significant excise tax to the state and retail marijuana stores on the Peninsula are bumping up local sales tax revenue. Reports are that the state’s peony industry may be on the cusp of explosive growth.
This and more is reviewed now.
18.1 Number of Businesses in Agriculture Agriculture is part of the Agriculture, Forestry, Fishing, and Hunting economic sector for statistical purposes. In the past it has been hard to parse out employment and wage data specific to farming and agriculture. However, there are enough businesses and workers in farming and agriculture on the Peninsula to begin to allow some break-out this year.
Depending on the data source, there appear to be up to about 100 businesses on the Kenai Peninsula engaged in plant and crop related agriculture:
10 self-employed business proprietors (no employees) in Support Activities for Crops businesses who together earned $97,000 (2016). The ADOLWD QCEW lists 10 employers in crop production in 2017 with an average of 46 employees and a seasonal high in August of 70 employees. Total wages were $843,000; this yields a monthly average wage of $1,528 ($843,000/46) - one of the challenges of farming and agriculture. This is the first time there have been enough businesses on the Peninsula in crop production to allow splitting-out of wage and employment data for these employees. The Kenai Peninsula Borough listed 97 agriculture related businesses for sales tax purposes (December 2017). In 2016, there were 58 similarly registered businesses. The Alaska Peony Growers Association lists 15 members on the Kenai Peninsula. The Alaska Department of Revenue lists 28 marijuana cultivators on the Kenai Peninsula. The list of Alaska State business license holders (Dec. 2017) shows 55 businesses physically located on the Kenai Peninsula in some type of agriculture that support or grow vegetables, plants, berries, crops, or plants. The number of USDA-funded high tunnels for crop production on the Kenai Peninsula is now close to 500 (Figure 89).
KPEDD 2018 Situations & Prospects page 91
Figure 89 - Number of High Tunnels in KPB (funded through USDA Seasonal High Tunnel Initiative for Crops) Year Year High Tunnel was Built Total No. High Funded 2010 2011 2012 2013 2014 2015 2016 2017 Tunnels 2010 33 12 3 0 0 0 0 0 48 2011 56 34 0 0 0 0 0 90 2012 35 12 1 0 0 0 48 2013 32 8 0 0 0 40 2014 26 12 7 1 46 2015 50 14 3 67 2016 55 27 82 2017 51 51 Total Constructed, by Year 33 101 173 217 252 314 390 472 472 Source: US Department of Agriculture, Natural Resources Conservation Service, Kenai Field Office
18.2 Gross Business Sales After hovering around $3 million in business sales for a decade, gross business sales for Agriculture-Forestry-Fishing and Hunting businesses on the Kenai Peninsula doubled to over $7.7 million in 2017 (Figure 90).
Individual business sales are confidential; however, of the 133 businesses registered to pay borough sales taxes in Agriculture-Forestry-Fishing and Hunting, 97 are associated with crops or plant farming, 15 with fishing, 12 with animal farming, and three with forestry (five may be miscoded). Interviews suggest that activity in all areas of cultivation on the Peninsula is growing; it does not seem to be a stretch to attribute the significant growth in business activity in 2017 to a combination of marijuana, peony, and food sales in the region.
Figure 90 - Gross Business Sales for Agriculture, Forestry, Fishing & Hunting, Kenai Peninsula Borough
$7,713,162 $8,000,000
$7,000,000
$6,000,000
$5,000,000 $3,929,259 $4,000,000 $3,424,002 $3,259,614 $3,417,660 $3,015,460 $3,229,852 $3,054,311 $3,000,000
$2,000,000
$1,000,000
$0 2010 2011 2012 2013 2014 2015 2016 2017
Homer Kenai Soldotna Seward Confidential
Source: Kenai Peninsula Borough, Finance Department, Sales Tax Division
KPEDD 2018 Situations & Prospects page 92
18.3 Farm Income and Expenses The US Bureau of Economic Analysis (US BEA) tallies farm income each year. The methodology used begins with cash receipts and all other farm related income. From this it subtracts production expenses and adds and subtracts a number of factors special to farm operations. The result is Net Farm Earnings, which on the Kenai Peninsula took a big jump between 2010 and 2012, and since have hovered around $1.6 million (Figure 91).
Figure 91 - Gross and Net Farm Earnings, Kenai Peninsula Borough, 2009-2016 2009 2010 2011 2012 2013 2014 2015 2016 Total Gross $3,552,000 $4,385,000 $6,300,000 $7,297,000 $7,128,000 $7,390,000 $7,527,000 $8,063,000 Income Net Farm -$607,000 -$152,000 $751,000 $1,905,000 $1,687,000 $1,521,000 $1,467,000 $1,690,000 Earnings Source: US BEA CA 45 (Regional Data, Local Area Personal Income and Employment, CA 45, Alaska, KPB) https://apps.bea.gov/itable/iTable.cfm?ReqID=70&step=1
18.4 Sector Trends, Issues, and Outlook Marijuana
There are now 28 marijuana cultivators in the Kenai Peninsula Borough and many retail establishments. Marijuana cultivators pay an excise tax to the state when marijuana is sold or transferred from a marijuana cultivation facility to a retail marijuana store or marijuana product manufacturing facility. The tax is currently $50 per ounce of flower (bud) and $15 per ounce of trim. (Regulations are out for review now that would create more distinctions).
Marijuana cultivators on the Kenai Peninsula paid $1.1 million in state excise taxes in 2017. For the 1st five months of 2018, the total paid was $718,000. During just the month of May 2018, Peninsula cultivators paid $170,300 in excise taxes to the state. Using conservative and reasonable assumptions, this could equate to over $1 million in estimated retail sales for just that month.
The Kenai Peninsula Borough requires all business sales to be reported. However, the borough only levies a sales tax on retail sales. The borough exempts from taxation the sale of goods which are to be resold, which is presumably what most sales are from marijuana cultivators. Thus, at this time the state and borough tax different parts of the marijuana industry.
Export Crops
In addition to food, some farms are run by entrepreneurs attracted by the potential of export crops such as peonies and rhodiola rosea that flourish in Alaskan growing conditions. As an export crop, sales bring new money into the Peninsula economy.
Peonies
Kenai Peninsula farmers and their Interior Alaska neighbors are leading the charge in Alaskan peony growing. The Alaska Peony Market Cooperative and others are succeeding in getting Alaskan’ late season (compared to other places) peonies and peony farmers connected with the US and world market and demand. This year Alaskan peonies were sold in Asia for the first time.
An August 2018 Anchorage Daily News article looked at the peony business and quotes retired UAF horticulture professor Pat Holloway estimating that there are 128 Alaska farms now growing peonies, with an estimated 400,000
KPEDD 2018 Situations & Prospects page 93
stems for harvest in 2018. Growers suggest that attention now starting to come from wholesalers and distributors could result in a harvest of 1.3 million stems in five years. The Alaska Peony Growers Association lists 15 members on the Kenai Peninsula. “Challenges are breaking into new markets in Asia and figuring out better cold storage and cold transportation to keep flowers in peak condition.” Also, hiring is becoming an issue because the time workers are needed competes with the salmon season.22
Berry Wine
Success continues to put Kenai Peninsula agriculture on the world stage. Alaska Berries winery in Soldotna is certified as 100% Alaska Grown and grows all of the fruit and berries used in the production of its handcrafted wines. Alaska Berries brought home four awards from the 2017 NorthWest Wine Summit, where its wines were chosen from 1,279 entries from almost 340 producers in Alaska, Idaho, Montana, Oregon, Washington, Wyoming, British Columbia, Alberta, and Saskatchewan. Its 2016 Haskap Wine won the Overall Gold medal.
Growing and Consuming Local Food
Interest in and demand for local foods in Alaska has increased substantially. This trend is spurred by consumers’ desire to support local communities, diversify Alaska’s economy, recognition that locally grown food is more nutritious and flavorful, and in response to concerns around the lack of food security in Alaska.
According to a July 2014 report by the Alaska Food Policy Council and Ken Meter with Crossroads Resource Center, of the $2 billion spent annually on food purchased in Alaska, 95% is spent on imported food23.
The more Peninsula residents spend on locally grown food, the greater will be the economic impact of farming on both jobs and in recirculating money through the region’s economy.
On the Kenai Peninsula, many of the current farms grew out of the high tunnel boom that started in 2010 (Figure 90). Many of the more recent farms on the Peninsula are smaller operations than in the past, use techniques to extend the growing period, and use a variety of methods to market food produced. “Micro” farms on five acres or less and more intensive farming techniques are growing in numbers in the region. Since 2014, around 100 producers and potential producers have attended various farming workshops on the Peninsula.
Many efforts are now focused on smaller farms, direct marketing, and efficiently connecting growers to consumers. The online Kenai Food Hub recently rebranded as the Alaska Food Hub and has expanded into the Anchorage market while continuing to directly connect growers with consumers on a weekly basis in Homer, Seldovia, Ninilchik, and Soldotna. The 2018 Kenai Local Food website, Facebook page, and its new Kenai Loves Local Food Directory are other efforts to connect growers and local food purchasers. Kenai Peninsula Community Supported Agriculture (CSA) is growing in popularity, where consumers “subscribe” and get boxes of produce and more from farmers.
A USDA funded survey sponsored by the Kenai Soil and Water Conservation District found there was strong interest in workshops on farm business development and farm production methods; preference for in-person events over on-line forums to exchange ideas; that 61% (17 of 28 respondents) were selling produce, and 39% (11 of 28) planned to expand. The Homer Soil & Water Conservation District is committed to supporting local agricultural production, so it wants to know how to best serve people with varying levels of understanding and expertise. What keeps producers from producing more? What keeps consumers from buying more? Homer Soil & Water is conducting two studies, one
22 Zak, Annie, Anchorage Daily News, August 5, 2018, “The industry’s about to explode: peony market flourishes in Alaska”. https://www.adn.com/business-economy/2018/08/05/the-industrys-about-to-explode-peony-market-flourishes-in-alaska/ 23 Meter and Goldenberg, 2014. Building Food Security in Alaska. https://static1.squarespace.com/static/584221c6725e25d0d2a19363/t/58b47081e6f2e17fc47f4656/1488220290961/ 14-•‐09-17_building-•‐food-‐security-•‐in-•‐ak_exec--‐summary-•‐recommendations.pdf
KPEDD 2018 Situations & Prospects page 94
for consumers and one for producers, that will help draw a better picture of what our needs are here on the southern peninsula. Stay tuned for the results in the spring of 2019.
Rhodiola Rosea
The 2016 KPEDD Situations & Prospects report reviewed beginning Rhodiola Rosea efforts, a hardy root with a large market among herbalists in China and Scandinavia. Currently, most of the world’s supply is wild harvested from China and Russia. In Russia, wild stocks have been so over-harvested that the plant has been listed as endangered. Several farmers are now cultivating the plant on the Kenai Peninsula, where it appears to thrive in Alaska’s cool short growing season. Anchor Point Greenhouse is growing starts and recruiting new growers, with the goal of eventually building a 50 acre, 2.5 million dollar export crop on the Peninsula
18.5 Central Peninsula Agricultural Market Analysis This section was reported in the 2017 Situations & Prospects report, and is repeated here.
The Kenai Soil and Water Conservation District used USDA funding to contract a Central Peninsula Agricultural Market Analysis that was completed in April 2017 (M. Heuer, SPORK Consulting). They asked growers if they grew or sold more this year than last year, and about their plans for next year and longer term. The 2017 study, at: http://kenaisoilandwater.org/projects/2017-market-study/ found that (excerpted from its Executive Summary):
Now is the ideal time for local food expansion in the Central Peninsula. Businesses and organizations are interested in buying more local food; growers are interested in expanding their production and there are few barriers limiting this increased growth. Currently local Central Peninsula produce is only filling a sliver of the potential market. With demand from buyers high and the potential scalability of local farms, mutually beneficial opportunities exist.
According to the American Independent Business Alliance, every dollar spent on locally grown produce generates $1.48 of economic impact, compared to the $1.14 that is generated from products grown outside of the area.2425 An increase in local purchases can result in substantial economic growth for the Central Peninsula. Kenai Peninsula residents could generate an additional $1.1 million26 in the local economy by purchasing 10% of their produce from local growers. Additionally, if the 126 Central Peninsula small businesses that were identified as produce purchasers buy 15% of their produce locally, an additional $165,00027 economic impact is generated. While there is currently not enough supply from the Central Peninsula, larger grocery chains on the Central Peninsula could generate an additional $340,00028 in Alaska’s economy by purchasing 5% of their produce from Alaskan farmers. When it comes to local produce in the Central Peninsula, small increases allow for sustained growth and financial benefit to the local economy.
Farmer Interest
In 2016, farm production in the Central Peninsula increased from the prior year for 70% of participating farmers through a variety of improvements, including the total area farmed, new products being grown, and infrastructure changes to allow for a longer season through the addition of high tunnels and heated facilities. There is potential for exponential agricultural growth in the Central Peninsula, with more than 95% of
24 US BEA CA 45 Farm Income and Expenses 25 American Independent Business Alliance, 2017. The Multiplier Effect of Local Independent Businesses. https://www.amiba.net/resources/multiplier--‐effect/ 26 Assumptions: Price per serving fruits and veggies $0.50 (USDA, 2010); 3 servings of fruits/veggies consumed for average Alaskan (State of Alaska DHSS, 2013); 58,506 Kenai Peninsula population (US Census, 2016) 27 Based on annual average produce purchases of $25,800 per organization. 28 Based on annual produce purchases of $2 million in the Central Peninsula
KPEDD 2018 Situations & Prospects page 95
participants indicating the ability to scale up their production and over 80% intending to increase their production levels in 2017.
Buyer Interest
All participating Central Peninsula buyers want to buy more local produce. If quantities become available, more than three-quarters of buyers indicated they would source more than 50% of their produce locally in the future. The majority of buyers are willing to pay more for local produce and there are no pre-existing loyalty agreements that would prevent any of the organizations from working with any number of local producers.
Promising Growth Potential
The Central Peninsula is a prime location for local food growth. Businesses and organizations are seeking more local foods and have the flexibility and capacity to increase their local food purchases. Larger grocery chains and institutions are interested in purchasing local foods, but because of the requirements, the most promising sales avenues for small-scale producers are restaurants, small grocery stores, and smaller institutions.
Potential Market
Smaller, local, non-chain restaurants and institutions are the largest consumers of Central Peninsula produce. This is likely because they can work with a smaller produce quantity; they are more amenable to working with the seasonality of Central Peninsula produce and often have a more direct link with Central Peninsula growers. As small-scale farmers expand, the survey indicates that smaller local businesses have fewer barriers to market entry and are more likely to support local producers than larger businesses.
KPEDD 2018 Situations & Prospects page 96
19 Profiles: Borough and Cities
KPEDD 2018 Situations & Prospects page 97 Kenai Peninsula Labor Force 6 0.6% Unpaid family 9% 9% workers Unemployed Self- (154) (2,451) employed 0.2% (2,417) Armed Forces (62) 17% Government workers (4,891) Population 2017 2016 65% Population 1 58,024 58,049 Private wage No. of Permanent Fund Dividends 2 52,127 52,418 and salary workers PK-12th Grade School Enrollment 3 9,027 9,141 (18,234) (all KPB schools, 20172018) Housing 4 Number of Housing Units ±163 30,752 30,671 4 The Kenai Peninsula…. Number of Occupied Housing Units ±483 21,481 21,485 Median Value of Owner- Business Sales are Up. During 2017, 4 ± $5,293 $229,200 $219,100 Occupied Units business sales in the Kenai Peninsula 15 Median Monthly Rent (w/ utilities) $987 $992 Borough totaled $3.6 billion. This was up 6% Income compared to 2016, and broke a two-year Number of Households 5 21,481 21,485 cycle of decline. 7 5 Median Household Income ±$2,835 $64,891 $63,684 5 Total Wages Dropped Here and Statewide. Mean Household Income ±$2,792 $80,661 $78,118 Total wages to Kenai Peninsula employees Number of Households that Received:5 1,349 / 1,854 1,334 / 1,938 dropped again between 2016 and 2017, as Public Assistance / SNAP-Food Stamps ±193 / ±226 5 they did between 2015 and 2016. This was Number of Families ±480 13,701 13,746 5 true statewide and in the Anchorage area Median Family Income ±$3,975 $82,242 $78,668 5 too. The decline in total wages has been Mean Family Income ±$3,152 $92,886 $91,684 11 about 5% since 2015 on the Peninsula, in Per Capita Personal Income ± $1,153 $50,691 $52,639 Anchorage, and statewide. 8
Top Fish Ports. The city of Seward and Kenai are 2 of the top 50 US ports for commercial fish volume and price.9
Commercial Fishermen on the Peninsula are Very Successful. While only about 8% of Alaska’s population lives on the Peninsula, local residents regularly land 14-15% of all pounds of commercial fish harvested by Alaskans, and earn 17-19% of all commercial fishing gross earnings that Alaska residents make. 10 Home Sales Steady, Price up a Bit. 776 homes sold in KPB in 2017 through the help of a realtor. The average sales price was $235,097. Compared to 2016, volume sold was flat but the average sales price increased 3%. 12
Marijuana Business. In 2017, marijuana cultivators on the Peninsula paid $1.1 million in state excise taxes; for the st 1 five months of 2018 the total paid was $718,000. During May 2018, 28 Peninsula cultivators paid $170,300 in excise taxes to the state. Using reasonable assumptions, this equates to over $1 million in estimated retail sales 13 for that month. 14 KENAI PENINSULA BOROUGH TAX INFORMATION Year 2017 2016 2013 Rate 3% Borough-wide Sales Tax Tax Revenue to Borough $30,479,542 $30,103,266 $29,647,452 Mill Rate 4.5 mill Borough-wide Property Assessed Value (real & personal) $6,701,525,060 $6,347,431,479 $6,295,906,850 Tax Assessed Value (oil & gas) $1,468,599,690 $1,415,096,180 $989,766,390 Tax Revenue to Borough $66,546,525 $62,078,842 $56,910,322 GROSS BUSINESS SALES IN THE KENAI PENINSULA BOROUGH 1-Year Change 5-Year Change Business Type 2017 2016 2013 (2016 to 2017) (2013 to 2017) GRAND TOTAL $3,562,252,203 $3,365,263,955 $3,717,539,890 $196,988,248 6% -$155,287,687 -4% 1. Retail Trade $1,123,219,462 $945,655,655 $984,180,277 $177,563,807 19% $139,039,185 14% 2. Mining/Quarrying $659,054,693 $623,592,005 $552,522,750 $35,462,688 6% $106,531,943 19% 3. Construction Contracting $304,527,369 $391,597,672 $566,348,085 -$87,070,303 -22% -$261,820,716 -46% 4. Wholesale Trade $258,480,256 $239,834,004 $319,501,740 $18,646,252 8% -$61,021,484 -19% 5. Utilities $168,590,043 $158,495,022 $176,751,210 $10,095,021 6% -$8,161,167 -5% 6. Services $157,870,393 $120,144,891 $173,813,125 $37,725,502 31% -$15,942,732 -9% 7. Transportation, $131,007,648 $106,416,878 $96,307,920 $24,590,770 23% $34,699,728 36% Warehousing 8. Manufacturing $116,593,124 $105,130,451 $139,007,456 $11,462,673 11% -$22,414,332 -16% 9. Restaurant/Bar $99,444,379 $101,528,864 $92,841,409 -$2,084,485 -2% $6,602,970 7% 10. Hotel/Motel/B&B $94,643,824 $95,409,527 $88,861,805 -$765,703 -1% $5,782,019 7% 11. Rental Resid. Prop $74,120,613 $81,576,002 $65,203,539 -$7,455,389 -9% $8,917,074 14% 12. Guiding Water $72,149,337 $67,961,054 $60,368,575 $4,188,283 6% $11,780,762 20% 13. Prof, Scientific, Tech Svs $68,760,387 $74,634,921 $137,673,975 -$5,874,534 -8% -$68,913,588 -50% 14. Information $37,407,782 $40,357,914 $55,491,122 -$2,950,132 -7% -$18,083,340 -33% 15. Admin, Waste Mgmt $36,642,276 $58,988,661 $81,561,362 -$22,346,385 -38% -$44,919,086 -55% 16. Health Care, Social Asst $34,899,117 $34,368,296 $20,369,553 $530,821 2% $14,529,564 71% 17. Rental Non-Resid. Prop $28,645,851 $33,940,204 $23,115,672 -$5,294,353 -16% $5,530,179 24% 18. Public Admin $26,611,556 $26,870,633 $21,096,106 -$259,077 -1% $5,515,450 26% 19. Telecommunications $14,652,210 $14,333,053 $11,365,241 $319,157 2% $3,286,969 29% 20. Rental Commercial Prop $13,824,408 $9,208,229 $6,766,394 $4,616,179 50% $7,058,014 104% 21. Arts & Entertainment $11,817,059 $7,495,161 $15,377,847 $4,321,898 58% -$3,560,788 -23% 22. Ag, Forestry, Fishing, Hunt $7,713,162 $3,929,259 $3,259,614 $3,783,903 96% $4,453,548 137% 23. Financial & Insurance $4,428,420 $8,242,551 $10,033,276 -$3,814,131 -46% -$5,604,856 -56% 24. Rental Self-storage, $4,402,840 $4,755,034 $4,610,668 -$352,194 -7% -$207,828 -5% MiniWhses 25. Educational Svs $4,180,143 $3,421,231 $2,945,892 $758,912 22% $1,234,251 42% 26. Rental Personal Prop $4,127,253 $3,346,741 $4,911,307 $780,512 23% -$784,054 -16% 27. Guiding Land $4,056,463 $3,707,234 $2,701,107 $349,229 9% $1,355,356 50% 28. Remediation Svs $377,189 $322,808 $536,572 $54,381 17% -$159,383 -30% Other $7,281 - - $7,281
Trailer Court - - $16,291 Source: Kenai Peninsula Borough Finance Department - confidential NOTES: Some of 2016-2017 increase in Arts & Entertainment and Services due to 2017 code change that requires more nonprofits to report more sales. Transportation and Warehousing increase partially due to newly registered oilfield related businesses. Finance and Insurance decline appears linked to closures in financial companies such as banks or CPAs. Admin & Waste Management decreases partly due to declines in cleaning industry and some business closures. Construction Contracting varies linked to oil and gas and government spending and contracts; gross sales have been declining for 5 years. Sources: 1 - ADOLWD, Population Est 2010-2017; 2 - AK Dept of Revenue; 3 - AK Dept of Education; 4, 5, 6 - US Census, ACS 2011-2015 and 2012-2016 5- 2018 Kenai Peninsula Situations & Prospects Report year estimates; 7 – KPB Finance Dept.; 8 – ADOLWD QCEW; 9 – NOAA 2016 Kenai Peninsula Economic Development District FUS Report; 10 - CFEC; 11- US BEA 2016; 12 - MLS c/o Redoubt Realty; 13 – www.kpedd.org (907) 283.3335 Alaska Dept. of Revenue, calculations by Sheinberg Assoc; 14 - Alaska Taxable reports; 15 - 2018 AHFC/ADOLWD Rental Costs Survey; Photos-
City of Homer Population by Age Group Population 2017 2016 10 …5 Years Shows Change Population 1 5,313 5,252
1,974 Permanent Fund Dividends 2013 (zip code 99603, which includes Homer, Halibut Cove, 9,379 8,956 1,753 Kachemak, Fox River, Nanwalek, Port Graham, Fritz Creek, Diamond Ridge, Miller Landing) 2 2017 PK-12th Grade School Enrollment (all 3 1,223 1,215 1,181 borough schools in Homer, as of Oct 1) 1,100 4 Housing 877 924 902 Total Housing Units ±119 2,800 2,689 662 Occupied Housing Units ±98 2,149 2,090 335 336 Median Value of Owner- ±$10,769 $269,200 $264,100 207 217 Occupied Units Median Monthly Gross ±$37 $970 $932 Rent (For Renters) 0 to 4 5 to 19 20 to 39 40 to 64 65 to 79 80+ Income 5 13% Total Households ±64 2,149 2,090 Occupations Median Household Income ±$3,155 $57,471 $55,849 Production, transportation of Homer Mean Household Income ±$4,400 $75,193 $74,523 and material Residents, Total Families ±119 1,316 1,254 moving 33% 2016 6 Median Family Income ± $7,841 $74,904 $75,000 Management, Mean Family Income ±$5,940 92,834 $91,996 business, Per Capita Income ± $2,200 $31,899 $30,664 10% science, and arts Natural resources, 21% Homer… Sales and construction, • Homer is a commercial fishing town. and office 22% Homer residents, who account for less than 1/10th of maintenance Service
a percent of Alaska’s population, harvested 8% of the
commercial fish pounds hauled in by Alaskan residents in 2016. 476 Homer
residents landed 78 million pounds of fish in Alaska and earned an estimated gross of $66 million in 2016.9
• Demand for houses in Homer was high in 2017. In 2017, the average sales price of a home in Homer was $269,389, up close to 10% from 2016. 78 homes sold with the help of an agent in Homer in 2017, that’s 34 more than in 2016. The number of days on the market dropped from 276 to 156.7 • Homer led in new home construction again. The number of new homes constructed in peninsula cities dropped by 15% (from 103 in 2016 to 88) in 2017. However, over half of those built were in Homer including 51 new homes (one tri-plex, 2 duplexes, and the rest were single family). 8
Sources: 1 - ADOLWD, Population Estm; 2 - AK Dept. of Revenue; 3 - AK Dept of Education; 4, 5, 6 – US Census, ACS 2018 Kenai Peninsula Situations & Prospects Report 2011-2015 and 2012-2016 5-year estimate; 7-MLS c/o Redoubt Kenai Peninsula Economic Development District Realty; 8-AHFC/ADOLWD Housing Market Indicators; 9 - CFEC; www.kpedd.org (907) 283.3335 10 - ADOLWD Pop By Age &Sex 2010-2017; 11 - Alaska Taxable reports; Photo courtesy of City of Homer GROSS BUSINESS SALES IN CITY OF HOMER 1-Year Change 5-Year Change Business Type 2016 2013 2017 (2016-2017) (2013-2017) GRAND TOTAL $410,790,439 $411,826,548 $436,004,144 -$1,036,109 0% -$25,213,705 -6% 1. Retail Trade $154,635,479 $154,208,738 $162,592,958 $426,741 0% -$7,957,479 -5% 2. Transportation, Warehousing $35,081,095 $35,535,360 $15,987,715 -$454,265 -1% $19,093,380 119% 3. Construction Contracting $32,370,893 $29,289,000 $39,967,523 $3,081,893 11% -$7,596,630 -19% 4. Services $28,821,102 $25,547,463 $24,813,277 $3,273,639 13% $4,007,825 16% 5. Wholesale Trade $23,350,137 $24,787,520 $25,956,466 -$1,437,383 -6% -$2,606,329 -10% 6. Restaurant/Bar $22,004,605 $21,340,434 $17,228,696 $664,171 3% $4,775,909 28% 7. Hotel/Motel/B&B $17,596,065 $17,609,323 $14,419,305 -$13,258 0% $3,176,760 22% - 8. Utilities $14,987,997 $13,829,523 $49,357,700 $1,158,474 8% -70% $34,369,703 9. Rental Residential Prop $13,373,970 $13,496,090 $11,618,740 -$122,120 -1% $1,755,230 15% 10. Manufacturing $13,075,052 $5,494,729 $7,660,387 $7,580,323 138% $5,414,665 71% 11. Guiding Water $12,550,040 $11,951,000 $11,353,487 $599,040 5% $1,196,553 11% 12. Public Admin $8,649,251 $8,820,467 $5,264,625 -$171,216 -2% $3,384,626 64% 13. Prof, Scientific, Tech Svs $7,917,671 $10,054,624 $10,097,314 -$2,136,953 -21% -$2,179,643 -22% 14. Health Care, Social Asst $5,290,158 $4,477,232 $5,376,320 $812,926 18% -$86,162 -2% 15. Information $5,219,786 $5,914,410 $6,735,161 -$694,624 -12% -$1,515,375 -22% 16. Admin, Waste Mgmt $3,356,225 $18,576,000 $17,430,482 -$15,219,775 -82% -$14,074,257 -81% 17. Arts + Entertainment $2,256,642 $1,529,000 $1,237,686 $727,642 48% $1,018,956 82% 18. Rental Self-storage + Mini- $2,084,258 $2,568,431 $2,659,297 -$484,173 -19% -$575,039 -22% warehouses 19. Rental Comm. Prop $2,003,968 $1,260,066 $934,614 $743,902 59% $1,069,354 114% 20. Telecommunications $1,747,914 $1,666,679 $1,676,915 $81,235 5% $70,999 4% 21. Rental Non-Res. Prop $1,693,335 $1,516,571 $1,181,063 $176,764 12% $512,272 43% 22. Rental Personal Prop $918,522 $968,711 $874,832 -$50,189 -5% $43,690 5% 23. Ag, Forestry, Fishing, Hunt. $601,104 $551,000 $209,226 $50,104 9% $391,878 187% 24. Educational Svs $469,503 $282,000 $273,694 $187,503 66% $195,809 72% 25. Guiding Land $351,600 $255,000 $446,368 $96,600 38% -$94,768 -21% 26. Remediation Svs $216,679 $188,501 $516,259 $28,178 15% -$299,580 -58% 27. Finance + Insurance $127,298 $108,000 $98,911 $19,298 18% $28,387 29% 28. Other $40,090 Source: Kenai Peninsula Borough Finance Dept. NOTES: Part of 2016-2017 increase in Arts & Entertainment, Services, and Educational Services due to 2017 code change that requires more nonprofits to report sales, also new businesses in Education Services; decline in Admin & Waste Mgmt due to business closures; in Professional & Scientific part of 2017 decline is due to a 2015-2016 sales jump that was linked to government construction jobs those years.
CITY OF HOMER TAX INFORMATION, 2017 11 Year 2017 2016 2013 Sales Rate City = 4.5% Borough = 3% Total in Homer = 7.5% Tax Tax Revenue to City (from city’s 4.5%) $7,674,256 $7,533,680 $7,031,120 11.3 mill Total Rate (includes 4.5 mill to boro + 4.5 mill to city + 2.3 mill to hospital) Property Assessed Value (real + personal property) $759,641,672 $699,797,998 $644,259,434 Tax Assessed Value (oil + gas property) $4,384,620 $0 $0 Tax Revenue to City $3,179,361 $3,101,669 $3,062,995
Population 2017 2016 City of Kenai Population by Age
Population 1 Group ...5 Years Show Changes10 7,038 7,087 Permanent Fund Dividends 11,867 12,773 (for zip code 99611, which includes Kenai, Nikiski)2 2,355
PK-12th Grade School Enrollment 2,155 2013 3 1,837 1,827 (all borough schools in City of Kenai, 2017/2018) 1,838 1,845 2017 Housing 4 1,628 1,608 Total Housing Units ± 210 3,508 3,411 Occupied Housing Units ± 192 3,085 3,041 769 Median Value Owner-Occupied Units ± $16,532 $209,400 $199,600 672 583 488 Median Monthly Rent (For Renters) ± $50 $899 $900 Income 5 136 173 Total Households ± $192 3,085 3,041 Median Household Income ± $6,816 $58,732 $62,236 Mean Household Income ± $16,532 $85,379 $81,043 Total Families ± 119 1,742 1,858 12% Occupations of Residents of Median Family Income ± $7,939 $75,931 $76,944 Production, City of Kenai, 2016 6 Mean Family Income ± $11,659 $93,254 $95,495 transportation, and material Per Capita Income ± $5,561 $37,008 $34,627 moving 31% occupations Management, City of Kenai… business, science, and • The Kenai Airport is a hub of activity. At the Kenai Airport, arts
there were 6% fewer passengers than in 2015, but over 16% occupations one-third more pounds of freight.12 Almost 87,500 Natural resources, 21% passengers and 2.3 Million pounds of freight arrived in 2016. construction, 19% Sales and • Among Peninsula cities, total business sales are and office Service maintenance occupations occupations highest in Kenai and have been since 2011. In 2017, occupations business sales exceeded $562 million. Gross sales 13 within the City of Kenai were up 3% compared to 2016. • More homes sold in Kenai than anywhere else on the Peninsula in 2017. 114 homes sold with an average sales price of $205,812 (about 2% lower than 2016). 7 Only 17 new dwelling units were built here in 2017.8
• In 2016, Kenai was one of two peninsula ports that made the list of the top 50 commercial fisheries ports in the United States. Kenai ranked 33rd top US port for commercial fisheries volume (22 million pounds landed) and 44th ($25 million) for value.9
Sources: 1 - ADOLWD, Population Estm 2010-2017; 2 - AK Dept. of 2018 Kenai Peninsula Situations & Prospects Report Revenue; 3 - AK Dept. of Education; 4, 5, 6 - US Census, ACS 2011-2015 and 2012-2016 5-year estimates; 7-MLS c/o Redoubt Realty; 8- Kenai Peninsula Economic Development District AHFC/ADOLWD Housing Indicators; 9 – NOAA 2016 FUS Report; 10 - www.kpedd.org (907) 283.3335 ADOLWD Pop By Age & Class 2010-2017; 11 - Alaska Taxables; 12-US BTS; 13- KPB Finance Dept. Photo – Eagle Eye Aerial photos c/o City of Kenai GROSS BUSINESS SALES IN CITY OF KENAI 1-Year Change 5-Year Change Business Type 2016 2013 2017 (2016-2017) (2013-2017) GRAND TOTAL $562,174,507 $547,259,387 $584,960,466 $14,915,120 3% -$22,785,960 -4% 1. Retail Trade $296,331,924 $282,517,944 $269,714,818 $13,813,980 5% $26,617,106 10% 2. Wholesale Trade $49,604,074 $44,885,894 $78,681,060 $4,718,180 11% -$29,076,986 -37% 3. Utilities $48,871,863 $49,041,560 $46,215,614 -$169,697 0% $2,656,249 6% 4. Services $29,162,886 $9,475,465 $7,900,991 $19,687,421 208% $21,261,895 269% 5. Construction $18,880,564 $33,614,745 $61,790,877 -$14,734,182 -44% -$42,910,314 -69% Contracting 6. Manufacturing $15,437,748 $19,430,593 $25,156,903 -$3,992,845 -21% -$9,719,155 -39% 7. Rental Residential Prop $15,219,950 $15,324,638 $12,170,141 -$104,688 -1% $3,049,809 25% 8. Prof., Science, Tech Svs $13,609,000 $13,524,951 $12,551,765 $84,049 1% $1,057,235 8% 9. Restaurant/Bar $13,240,702 $13,360,908 $14,362,113 -$120,206 -1% -$1,121,411 -8% 10. Transportation, $11,700,883 $18,360,607 $12,719,518 -$6,659,724 -36% -$1,018,635 -8% Warehousing 11. Hotel/Motel/B&B $8,898,064 $9,674,563 $9,759,324 -$776,499 -8% -$861,260 -9% 12. Mining/Quarrying $7,664,291 $5,854,179 $4,519,204 $1,810,112 31% $3,145,087 70% 13. Information $7,653,916 $9,289,986 $10,656,447 -$1,636,070 -18% -$3,002,531 -28% 14. Public Admin $6,144,788 $6,143,301 $5,158,487 $1,487 0% $986,301 19% 15. Telecommunications $2,995,327 $3,192,890 $1,684,584 -$197,563 -6% $1,310,743 78% 16. Rental Non-Resid. Prop $2,928,725 $3,238,252 $4,259,882 -$309,527 -10% -$1,331,157 -31% 17. Admin, Waste Mgmt $2,796,470 $3,003,240 $3,615,327 -$206,770 -7% -$818,857 -23% 18. Health Care, Social Asst $2,666,811 $1,854,372 $326,137 $812,439 44% $2,340,674 718% 19. Rental Commercial Prop $2,223,099 $1,160,136 $617,831 $1,062,963 92% $1,605,268 260% 20. Rental Personal Prop $1,147,045 $490,802 $454,912 $656,243 134% $692,133 152% 21. Educational Svs $1,088,878 $869,829 $643,490 $219,049 25% $445,388 69% 22. Finance + Insurance $1,087,662 $1,001,074 $572,375 $86,588 9% $515,287 90% 23. Arts + Entertainment $919,550 $440,179 $604,054 $479,371 109% $315,496 52% 24. Ag, Forestry, Fishing, $852,235 $666,575 $463,232 $185,660 28% $389,003 84% Hunting 25. Guiding (Water + Land) $733,346 $507,000 $361,380 $226,346 45% $371,966 103% 26. Rental Self-storage + $308,510 $317,896 - -$9,386 -3% $308,510 - Mini-warehouses 27. Other $6,196 $17,665 - - - - - Source: Kenai Peninsula Borough Finance Department - confidential NOTES: Part of 2016-2017 increase in Arts & Entertainment and Services due to 2017 code change that requires more nonprofits to report sales; half of decline in Information due to phone/internet/cable changes; most of Construction Contracting decline linked to paving and road work.
CITY OF KENAI TAX INFORMATION 11 Year 2017 2016 2013 Sales Rate City=3% Borough=3% Total in City of Kenai=6% Tax Tax Revenue to City (from city’s 3%) $7,375,543 $6,781,037 $6,618,444 8.86 mill Total (includes 4.5 mill to boro, 4.35 Mill Rate mill to city, 0.01 mill to Cent. Hosp.) 8.37 Property Assessed Value (real + personal) $825,580,242 $817,017,891 $754,727,961 Tax Assessed Value (oil + gas) $45,868,140 $52,256,440 $50,844,720 Tax Revenue to City $3,749,301 $3,771,925 $2,885,245
City of Seldovia GROSS BUSINESS SALES 1-Year Change 5-Year Change Business Type 2017 2016 2013 (2016 to 2017) (2013 to 2017) GRAND TOTAL $8,446,115 $7,340,762 $3,698,911 $1,105,353 15% $4,747,204 128% Admin, Waste Mgmt * * * * * * * Ag, Forestry, Fishing, Hunting * * * * * * * Arts & Entertainment $4,311 $42,416 $31,404 -$38,105 -90% -$27,093 -86% Construction Contracting $2,764,082 $1,051,236 $989,702 $1,712,846 163% $1,774,380 179% Educational Svs * * * * * * * Finance & Insurance * * * * * * * Guiding Land * * * * * * * Guiding Water $152,399 $170,775 $253,274 -$18,376 -11% -$100,875 -40% Health Care, Social Asst * * * * * * * Hotel/Motel/B&B $436,304 $512,023 $162,611 -$75,719 -15% $273,693 168% Information $291,848 $308,242 $397,678 -$16,394 -5% -$105,830 -27% Manufacturing $72,899 $27,033 $45,866 170% $72,899 * Prof, Scientific & Technical Svs $216,655 $237,793 $342,772 -$21,138 -9% -$126,117 -37% Public Admin $499,346 * * * * * * Rental Commercial Prop * $5,237 * * * * * Rental Non-Residential Prop * $18,530 * * * * * Rental Self-storage & Miniwrhs * * * * * * * Rental Personal Prop $34,535 $16,445 * $18,090 110% * * Rental Residential Prop $62,509 $63,051 $54,250 -$542 -1% $8,259 15% Restaurant/Bar $493,327 $482,288 $638,181 $11,039 2% -$144,854 -23% Retail Trade $939,224 $1,449,667 $797,586 -$510,443 -35% $141,638 18% Services $222,882 $425,839 $31,453 -$202,957 -48% $191,429 609% Telecommunications $23,714 $13,819 * $9,895 72% * * Transportation, Warehousing $225,282 $130,114 * $95,168 73% * * Utilities $628,342 * * * * * * Wholesale Trade $1,374,099 $1,242,988 * $131,111 11% * * Other $4,357 $1,143,266 Source: Kenai Peninsula Borough Finance Department * confidential or $0
CITY OF SELDOVIA TAX INFORMATION Year 2017 2016 2013 Seldovia City=2% winter/4.5% summer Borough =3% Rate • 2017 Population: 216 Sales Total in Seldovia=5%/7.5% Tax Tax Revenue to City • 2016 Population: 205 $243,479 $179,068 $120,570 (from City Sales Tax) • 2010 Population: 255 12.75 mill Total (includes 4.5 mill to boro Mill Rate 9.85 +0.75 service areas+7.5 mill to city) • No. of 2017 PFDs: 417 Property Assessed Value Tax $36,117,205 $34,747,810 $42,043,285 (zip code 99663-Seldovia & (real+ personal) Seldovia Village) Tax Revenue to City $254,700 $181,892 $102,410 • Source: Alaska Taxable, DCCED School Enrollment: 37 (2017/2018 PK-12) 2018 Kenai Peninsula Situations & Prospects Report Kenai Peninsula Economic Development District www.kpedd.org (907) 283.3335
Seward Population by Age Group--- 8 5 Years Shows Changes 923 2013 851 886 819 2017
326333 271 219 114 110 68 62
Seward: Kenai Peninsula’s Maritime Powerhouse
• Seward’s Marine Industrial Center (SMIC) is one of the few locations in Alaska where the largest vessels can
be maintained. The SMIC has a new breakwater, an 80 x 350-ft synchrolift rated to lift vessels up to 5,000 long
tons and 300 ft, a lateral transfer cradle, a 330-ton Travelift, ample cargo lay-down and dry–dock capacity,
direct connections to the Alaska Railroad, and many local marine service providers.
• Seward was as the Peninsula’s top commercial fishery port in 2016. In 2016, Seward ranked 28th top US port for pounds of commercial fish landed and 25th for value of fish crossing its docks. In 2016, 27 million pounds of commercial fish landed, worth $42 million, crossed Seward’s docks. 6 • One-quarter of all Sablefish IFQ landed Population 2017 2016 in Alaska passed over Seward docks in 2015, 2016, and 2017. In 2017, this was 20 Population 1 2,518 2,659 million pounds. For Halibut IFQ, 11-12% of Permanent Fund Dividends (for zip code 99664, 3,791 3,904 all pounds landed in Alaska crossed a which includes Seward, Lowell Pt., Bear Cr., Primrose)2 Seward dock in 2015, 2016, and 2017.6 PK-12th Grade School Enrollment 607 625 (all borough schools in Seward, 2017/2018) 3 • Seward generates state fish tax to city
Housing 4 (note: large +/- margins of error) and borough. Based on the amount of
Total Housing Units (+/- 144) 1,093 1,109 seafood processing that occurred in
Median Value of Owner Seward, the state shared $440,958 in (+/- $60,404) $192,500 $164,300 7 - Occupied Units state fish taxes with the City in FY 2017.
Median Monthly Rent (For Renters) (+/- $192) $729 $718 • Population drop in 2017. Seward had the 5 Income (note: large +/- margins of error) largest population loss on the Peninsula Total Households (+/- 114) 838 867 between 2016 and 2017, losing 141 people, although the number of Median Household Income (+/- $7,911) $70,000 $53,750 residents is up compared to 5 years ago.1 Mean Household Income (+/- $12,157) $78,980 $67,087
Total Families (+/- 77) 468 453 • In the Seward-Cooper Landing area, 52 homes sold in 2017 at an average price Median Family Income (+/- $17,241) $86,875 $79,076 of $255,817 . Days on the market dropped Mean Family Income (+/- $18,559) $101,919 $84,963 from 121 in 2016 to 93 in 2017. In Seward, $24,671 Per Capita Income (+/- $3,587) $27,810 4 new homes were built in 2017. 10,11
Sources: 1 - ADOLWD, Population Estm 2010-2017; 2 - AK Dept of Revenue; 2018 Kenai Peninsula Situations & Prospects Report 3 - AK Dept of Education; 4, 5 - US Census, ACS 2011-2015 and 2012-2016 5-year Kenai Peninsula Economic Development District estimates; 6 -NOAA, FUS Reports; 7- Alaska Shared Taxes Report; 8 - ADOLWD Pop By Age & Class 2010-2017; 9 - Alaska Taxable Reports; 10-Multi Listing Service www.kpedd.org (907) 283.3335 c/o Redoubt Realty; 11- AHFC/ADOLWD Housing Market Indicators; Photo: Seward Boat Harbor, shutterstock by T. Wozniak.
GROSS BUSINESS SALES IN CITY OF SEWARD 1-Year Change 5-Year Change Business Type 2017 2016 2013 (2016-2017) (2013-2017) SEWARD TOTAL $257,877,692 $258,511,392 $238,980,430 -$633,700 0% $18,897,262 8% 1. Retail Trade $56,976,892 $56,715,348 $54,276,404 $261,544 0% $2,700,488 5% 2. Wholesale Trade $50,987,584 $40,099,112 $31,627,495 $10,888,472 27% $19,360,089 61% 3. Guiding Water $30,634,510 $29,494,852 $23,935,598 $1,139,658 4% $6,698,912 28% 4. Services $20,233,842 $19,364,016 $14,360,696 $869,826 4% $5,873,146 41% 5. Restaurant/Bar $15,727,630 $15,961,260 $13,191,657 -$233,630 -1% $2,535,973 19% 6. Hotel/Motel/B&B $15,447,325 $15,801,499 $13,892,285 -$354,174 -2% $1,555,040 11% 7. Manufacturing $10,348,042 $10,966,939 $16,941,330 -$618,897 -6% -$6,593,288 -39% 8. Construction Contr. $9,131,164 $19,467,759 $26,040,286 -$10,336,595 -53% -$16,909,122 -65% 9. Public Admin $8,461,474 $8,022,495 $7,398,715 $438,979 5% $1,062,759 14% 10. Rental Residential Prop $6,821,867 $10,659,157 $7,864,716 -$3,837,290 -36% -$1,042,849 -13% 11. Utilities $5,897,463 $4,624,712 - $1,272,751 28% - - 12. Transportation, $5,852,449 $9,047,537 $9,721,807 -$3,195,088 -35% -$3,869,358 -40% Warehousing 13. Prof, Science, Tech. Svs $4,681,533 $5,484,326 $8,624,278 -$802,793 -15% -$3,942,745 -46% 14. Rental Commercial Prop $3,299,335 $2,650,469 $1,844,725 $648,866 24% $1,454,610 79% 15. Arts & Entertainment $3,153,639 - $57,833 - - $3,095,806 5353% 16. Admin, Waste Mgmt $2,999,558 $2,466,855 $2,514,425 $532,703 22% $485,133 19% 17. Information $2,942,339 $3,176,774 $3,705,295 -$234,435 -7% -$762,956 -21% 18. Health Care, Social Asst. $1,261,353 $1,667,107 $1,310,379 -$405,754 -24% -$49,026 -4% 19. Guiding Land $1,183,630 $759,610 $603,940 $424,020 56% $579,690 96% 20. Rental Non-Residential $730,793 $774,959 $425,910 -$44,166 -6% $304,883 72% Prop 21. Telecommunications $645,407 $783,558 $395,915 -$138,151 -18% $249,492 63% 22. Rental Self-storage & $186,117 $271,142 - -$85,025 -31% - - Mini-warehouses 23. Rental Personal Prop $172,729 $156,499 $133,252 $16,230 10% $39,477 30% 24. Ag, Forestry, Fishing, $73,213 - $27,455 - - Hunting 25. Finance & Insurance $21,580 - $46,783 - - 26. Educational Svs - $39,251 - - 27. Other $6,224 $95,407 Source: Kenai Peninsula Borough Finance Department - confidential NOTES: Part of 2016-2017 increase in Arts & Entertainment and Services due to 2017 code change that requires more nonprofits to report sales; increase in Wholesale due mostly to gross gasoline sales
CITY OF SEWARD TAX INFORMATION 9 Year 2017 2016 2013 Rate Seward=4% Borough= 3% Total in Seward=7% Sales Tax Tax Revenue to City (from city’s 4%) $5,004,992 $4,883,996 $4,191,186 Rate 4% 4% 4% Bed Tax Tax Revenue to City $505,845 $458,605 $380,210 8.37 mills Total (includes 3.12 mill to city, 4.5 Mill Rate 8.12 mill to boro, 0.75 mill Sew/Bear Cr. Flood) Property Assessed Value (real + personal) $367,914,011 $348,138,375 $601,949,991 Tax Assessed Value (oil + gas) $13,349,940 $0 $0 Tax Revenue to City $1,154,722 $1,007,672 $1,013,580
Population 2017 2016 City of Soldotna Population by Age Population 1 4,333 4,376 Group ... 5 Years Shows Changes 10 2 No. of Permanent Fund Dividends 1,395 (zip code 99669, which includes Soldotna, 14,108 14,507 1,293 Sterling, Kasilof, Kalifornsky, Funny River, 2013 1,105 Ridgeway, Cohoe) 1,059 PK-12th Grade School Enrollment 3 2017 2,794 2,852 889 (all boro schools in Soldotna) 878 Housing 4 Total Housing Units +/- 151 1,892 1,810 583 Occupied Housing Units +/- 141 1,696 1,638 465 Median Value Owner- +/- $11,668 $223,000 $220,800 261 276 Occupied Units 198 198 Median Monthly Rent +/- $96 $1,019 $1,018 (For Renters) 5 Income 0 to 4 5 to 19 20 to 39 40 to 64 65 to 79 80+ Total Households +/- 141 1,696 1,638
Median Household Income +/- $7,062 $67,434 $65,048 Soldotna 9% Unemployed +/- $7,237 $74,051 Labor Mean Household Income $83,221 (214) Force6 Total Families +/- 96 1,092 1,071 Median Family Income +/- $4,729 $69,138 $68,036 4% 16% Government Mean Family Income +/- $8,121 $77,416 $96,829 Self- workers employed 71% Per Capita Income +/- $3,260 $31,210 $33,507 (383) (87) Private wage Soldotna… and salary workers • Business Growth. The largest increase in gross business sales on the Peninsula (1,638) in 2017 was in Soldotna, where sales jumped $92 million (21%) to $529 million. • Home prices increasing. 54 homes sold in the City of Soldotna in 2017 with an average sales price of $260,187 (16% higher than last year). 7 There were 16 new homes built in Soldotna in 2017 8
• K-12 Education is Big. About one-third (31%) of all Peninsula students attend school in Soldotna (more than any
other place).3
• Local Commercial Fishing Stats. In 2016, 112 Soldotna residents landed 3.6 million pounds of commercial fish in
Alaska and earned an estimated gross of $4.4 million 9 Sources: 1 - ADOLWD, Population Estm 2010-2017; 2018 Kenai Peninsula Situations & Prospects Report 2 - AK Dept of Revenue; 3 - AK Dept of Education; 4, 5, 6 - US Census, ACS 2011-2015 and 2012-2016 5-year estimates; 7-MLS c/o Redoubt Kenai Peninsula Economic Development District Realty; 8-AHFC/ADOLWD Housing Market Indicators; 9 - CFEC; 10 - www.kpedd.org (907) 283.3335 ADOLWD Pop By Age & Class 2010-2017; 11 - Alaska Taxable reports; Photo – Summertime crowds courtesy of City of Soldotna GROSS BUSINESS SALES IN CITY OF SOLDOTNA
1-Year Change 5-Year Change Business Type 2016 2013 2017 (2016 to 2017) (2013 to 2017) GRAND TOTAL $528,569,530 $436,379,712 $500,663,480 $92,189,818 21% $27,906,050 6% 1. Retail Trade $314,307,803 $235,997,663 $261,132,299 $78,310,140 33% $53,175,504 20% 2. Construction Contracting $37,693,099 $29,499,026 $73,914,467 $8,194,073 28% -$36,221,368) -49% 3. Restaurant/Bar $28,446,960 $28,655,607 $25,677,948 -$208,647 -1% $2,769,012 11% 4. Wholesale Trade $25,758,531 $23,931,698 $31,766,317 $1,826,833 8% -$6,007,786) -19% 5. Health Care, Social Asst $21,421,449 $23,877,617 $9,101,448 -$2,456,168 -10% $12,320,001 135% 6. Utilities $17,426,408 $16,087,408 $14,103,475 $1,339,000 8% $3,322,933 24% 7. Services $12,251,854 $10,300,119 $9,759,972 $1,951,735 19% $2,491,882 26% 8. Prof, Scientific, Technical Svs $11,743,831 $12,022,805 $10,883,340 -$278,974 -2% $860,491 8% 9. Rental Residential Prop $10,616,185 $12,899,244 $11,112,446 -$2,283,059 -18% ($496,261) -4% 10. Information $7,973,003 $8,040,624 $10,089,659 -$67,621 -1% ($2,116,656) -21% 11. Manufacturing $7,449,355 $5,310,578 $7,551,307 $2,138,777 40% ($101,952) -1% 12. Rental Non-Residential Prop $5,807,798 $5,799,264 $6,712,062 $8,534 0% ($904,264) -13% 13. Telecommunications $5,009,860 $4,864,608 $3,070,786 $145,252 3% $1,939,074 63% 14. Hotel/Motel/B&B $4,920,292 $5,621,859 $4,971,347 -$701,567 -12% ($51,055) -1% 15. Transportation, $4,451,535 $415,337 $3,451,013 $4,036,198 972% $1,000,522 29% Warehousing 16. Admin, Waste Mgmt $3,089,622 $3,121,890 $3,656,157 -$32,268 -1% ($566,535) -15% 17. Rental Commercial Prop $2,490,939 $1,979,971 $2,218,991 $510,968 26% $271,948 12% 18. Public Admin $2,275,242 $2,052,799 $1,611,616 $222,443 11% $663,626 41% 19. Arts & Entertainment $1,775,764 $2,163,784 $4,046,387 -$388,020 -18% ($2,270,623) -56% 20. Educational Svs $1,357,810 $1,008,755 $715,994 $349,055 35% $641,816 90% 21. Rental Personal Prop $795,737 $593,240 $856,427 $202,497 34% ($60,690) -7% 22. Guiding (Water & Land) $626,930 $517,523 $604,514 $109,407 21% $22,416 4% 23. Finance & Insurance $556,807 $1,385,075 $441,968 -$828,268 -60% $114,839 26% 24. Other $322,716 $233,218 - $89,498 38% - - Ag, Forestry, Fishing, & Hunt - - $88,245 - - - - Mining/Quarrying - - $3,125,295 - - - - Source: Kenai Peninsula Borough Finance Department - confidential NOTES: Overall sales are up 21% or $92 million, the largest increase in the borough. In Transportation & Warehousing, 2016 was quite low due to some businesses closing in 2015; then in 2017 some businesses relocated to Soldotna increasing gross sales in this area. Construction Contracting is up 28% or $8.2 million, the largest increase is linked to paving work. There has been a lot of building on the Hospital too, which could contribute to the higher gross sales here and in health care. Manufacturing was up $2 million or 40%, linked to higher fish processing and other manufacturing sales.
CITY OF SOLDOTNA TAX INFORMATION 11 Year 2017 2016 2013 Rate City=3% Borough=3% Total in City of Soldotna=6% Sales Tax Tax Revenue to City $7,058,408 $6,920,246 $7,640,536 (from city’s 3%) 7.61 mill Total (w/ 0.5 mill city, 4.5 mill boro, Mill Rate 7.73 7.67 0.01 mill Cent Hosp, 2.6 mill Cent Emer Serv) Property Assessed Value Tax $572,521,814 $563,599,002 $486,608,006 (Real & Personal) Tax Revenue to City $297,474 $287,379 $347,121