Happy New Year! I hope you enjoyed a relaxing holiday and are ready to embrace this time of new beginning and fresh starts.
As we reflect on 2019, I am grateful for the strength of CIRI’s business operations and our success as a company. A few highlights include:
CINGSA Ownership Increase
Cook Inlet Natural Gas Storage Alaska (CINGSA) is an underground gas storage facility located on Alaska’s Kenai Peninsula that is capable of storing up to 11 billion cubic feet of natural gas. By substantially improving the reliability and delivery of natural gas supplies during the winter months, the facility provides a critical service to residents and communities throughout the Cook Inlet region. In January 2019, CIRI doubled its percentage interest in CINGSA from 4.25% to 8.5%.
CIRI Settlement Trust
At the Annual Meeting of Shareholders held June 1, 2019, shareholders overwhelmingly approved the formation of the CIRI Settlement Trust (CST). Benefits to both shareholders and the corporation include:
- Under present law, distributions by the CST are not anticipated to be taxable to beneficiaries.
- CIRI Elders’ Settlement Trust funding ran out before year’s end 2019. The CIRI Board of Directors approved the necessary funding to cover the shortfall and ensure all eligible Elders received full payments through the end of the year. Beginning in 2020, Elders’ benefits will be provided through the CST, maintaining the current level of payments and eligibility requirements of the CIRI Elders’ Settlement Trust.
- Significantly reduces CIRI’s current and future federal income tax liability. This means the company will have more money to fund benefits for shareholders and descendants and to reinvest and continue to grow the company.
Johnson Tract Mineral Deposit
In May, CIRI entered into a lease agreement with Canada-based Constantine Metal Resources Ltd. The lease authorizes exploration of a gold- and zinc-rich deposit, known as the Johnson Tract, in a private inholding within Lake Clark National Park and Preserve. The property was conveyed to CIRI under the terms of the Alaska Native Claims Settlement Act of 1971 and the Cook Inlet Land Exchange of 1976. The two companies signed a 10-year lease with a renewal option, which includes annual and escalating lease payments to CIRI until production is achieved. Upon completion of a feasibility study and a decision to proceed with the project, CIRI has the option of investing in the project as a partner and receiving net smelter return royalties on gold and base metals.
Maple Springs of Anchorage
For many years, Alaska’s senior housing market has struggled to meet the needs of its older residents. Maple Springs of Anchorage, an assisted living and memory care facility, is being built on CIRI-owned land in South Anchorage. Preliminary civil work began in October and construction is expected to begin this summer, with substantial completion in early 2021.
North Wind Group
Based in Idaho Falls, Idaho, CIRI subsidiary North Wind Group (NWG) is a leading small business in the federal environmental services market. At the Oak Ridge National Laboratory in Oak Ridge, Tenn., NWG subsidiary North Wind Solutions (NWSol) is responsible for round-the-clock waste operations support at the lab’s Transuranic Waste Processing Center, dealing with radioactive elements like plutonium and americium. NWSol was awarded a two-year contract extension in February so it may complete its transuranic waste processing mission. NWG also opened a new office in Guam, allowing it to further build and strengthen relationships with subcontractors, vendors and teaming partners in the Pacific Rim.
As part of its commitment to engage and support the next generation of shareholders, CIRI revamped and expanded several of its programs, including the CIRI C3 Experience, Next Gen Day (formerly Take the Next Generation to Work Day) and the summer internship program.
Change is a constant factor in our lives. While CIRI was fortunate to experience many successes in 2019, the year also brought its share of challenges that were largely outside the company’s control. CIRI abides by a philosophy of engaging with challenges and learning from them, which—given the company’s willingness to evolve, and thanks to the expertise of our people and partners—often leads to exciting new opportunities.
- The longest U.S. government shutdown in history occurred Dec. 22, 2018, to Jan. 25, 2019. During this period, approximately 800,000 federal employees lived without pay and tens of thousands of contractors were out of work as well. The impacts of the shutdown uniquely affected Tribal citizens, particularly with constraints on the U.S. Department of the Interior’s Bureau of Indian Affairs and the U.S. Department Health and Human Services’ Indian Health Service.
- While the U.S. experiences a record-breaking streak of job creation and low unemployment rates, the Anchorage and Alaska economies continue to struggle. When the fiscal year 2020 state budget was announced, it included $444 million in cuts to education, health care, public safety and public assistance, including significant reductions in the University of Alaska budget. Lawmakers attempted to override the university cut and other line-item vetoes but fell short of the three-quarters majority needed to do so. Ultimately, the governor vetoed more than $200 million from the budget in August, including more than $50 million from Medicaid services.
- Alaska faced an extremely active wildland fire season. July was the hottest month in recorded history in Anchorage and the rest of Southcentral Alaska, with very little rainfall. Throughout much of August, Anchorage’s air quality index ranged from “Moderate” to “Unhealthy,” with the Kenai Peninsula frequently reaching “Hazardous” levels. As of the end of August, 682 fires had burned more than 2.5 million acres across the state.
In business and in life, challenging experiences can be turned into learning experiences, teaching us patience, perspective, ingenuity and resilience. The more we can test our limits and capabilities, the more we can learn about ourselves. The important thing is to treat challenges as opportunities.
Here’s to a bright New Year, the things yet to come and the memories we hold dear. May you be blessed with prosperity, good health and happiness in 2020 and beyond.