Contents

Section Page
I. PROJECT THEORY, DESIGN, AND PLAN 1
I(a). Description of Target Population, Analysis of Need, and Project Assumptions 1
I(b). Project Strategy and Design: Interventions, Outcomes, and Goals 4
I(c). Work Plan 5
II. SIGNIFICANT AND BENEFICIAL IMPACT 10
II(a). Quality of Jobs and Business Opportunities 10
II(b). Community Empowerment Consideration 11
II(c). Support for Non-custodial Parents 12
II(d). Cooperative Partnership with Designated Agency for the TANF Program 12
II(e). Cost per Job 12
III. ORGANIZATIONAL EXPERIENCE IN PROGRAM AREA AND STAFF SKILLS,
RESOURCES, AND RESPONSIBILITIES 13
III(a). Agency Experience and Commitment in Program Area 13
III(b). Staff Skills, Resources, and Responsibilities 17
IV. PROJECT EVALUATION 19
V. PUBLIC AND PRIVATE PARTNERSHIPS AND RESOURCES 20
VI. BUDGET APPROPRIATENESS AND REASONABLENESS 21

Appendices
APPENDIX 1: Resumes
APPENDIX 2: Business Plan
APPENDIX 3: Letters of Intent and Support
APPENDIX 4: Evaluator’s Resume
APPENDIX 5: Non-Custodial Parents and TANF Administrator’s Contract
APPENDIX 6: Third Party Agreement and IWP Articles of Incorporation
APPENDIX 7: Non-Profit Status
APPENDIX 8: Indirect Rate Agreement
APPENDIX 9: Pacific Log and Lumber Supporting Documentation
APPENDIX 10: AVI Annual Report

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 Project Narrative
I. PROJECT THEORY, DESIGN, AND PLAN
Overview. Interior Wood Products (IWP) is a proposed project to create meaningful
employment opportunities for low-income individuals in the Interior region of Alaska. The
project will focus on equipping members of the region’s workforce with skills in value-added
processes. The Ketchikan Gateway Borough, the area that will directly benefit from the jobs
and economic impacts created by the project, is a designated HUBZone with an
unemployment rate at 197% of the statewide rate.

I(a). Description of Target Population, Analysis of Need, and Project Assumptions

Target Population. The IWP project is designed to serve and will target low-income
individuals in the Ketchikan Gateway Borough. The Ketchikan Gateway Borough
encompasses 1,233 square miles of islands in the far Southeast corner of Alaska and is
connected to the rest of the state only by air or by water. The Borough consists of the cities
of Ketchikan, with a primarily white population of almost 8,000, and Saxman, with a

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Interior Wood Products Office of Community Services JOLI Program Proposal

primarily Alaska Native population of 431 (2000 census). Another 4,000 people live within
the Borough but in non-metropolitan areas. Additional details about characteristics of the
Borough are noted below:
• The population is declining and the probable cause is loss of jobs. There were
14,716 people in the Borough as of 1993 (Alaska Department of Labor and
Workforce Development) and only 13,548 ten years later (2003 State Demographer
Estimate), a decline of 8%.
• 164 families live in poverty, 82 of these (50%) are families with a female
householder with children under the age of 18 and no husband present.
• Both Ketchikan and Saxman are qualified as HUBZones due to their American
Indian/Alaska Native population levels, and although there are no reservations in
Alaska, they are considered Indian Reservations for designation purposes. The total
American Indian/Alaska Native population of the Borough is 2,689 (19%). Of the
881 Native households in the Borough, 153 (17.4%) receive public assistance
income. (American Factfinder, 2000 Census Data).
• The number of adults not in the labor force increased from 23.8% in 1990 to 32% in
2000. A typical developed U.S. community has 20% of adults unemployed or no
longer seeking work (Alaska Department of Commerce, Community and Economic
Development).
• The greatest single impact on the Borough’s economy was the closing of the
Ketchikan Pulp Company in 1997, at which time 516 workers were laid off.
Ongoing challenges are a decline in the timber harvest from the Tongass National
Forest and a sharp drop in earnings from commercial fishing. These natural resource
based industries were attractive forms of employment for Alaska Natives and
American Indians, who have been hardest hit by the recent changes.
Analysis of Need: Poverty in Rural Alaska. Alaska Natives, who are the primary
beneficiaries of the jobs that will be created, continue to make up the largest group in Alaska
to live in poverty. More than 26 percent of 49,537 Natives in rural Alaska have incomes
below federally recognized poverty levels, compared to 9 percent of the population across the
state of Alaska. Alaska Natives have extremely low incomes and living standards,
perpetuated by isolation from the mainstream cash economy.
In 1994, the Joint Federal-State Commission on Policies and Programs Affecting Alaska
Natives noted, “in one out of every eight villages, unemployment among Native men is in
excess of 50 percent; in one-third of all Native villages, male unemployment—at 32 percent
—is nearly quadruple the statewide average unemployment rate.” Because of the severely
limited employment opportunities in most communities, percentages of so-called
“discouraged workers” are believed to be much higher than official estimates.
The University of Alaska Anchorage published the following findings: “Poverty among
Alaska Natives is still widespread… as indicated by their reliance on public assistance
programs. Alaska Natives make up about 40 percent of the enrollment in the state’s core

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Interior Wood Products Office of Community Services JOLI Program Proposal

public assistance programs, although they represent only about 14 percent of the total state
population.”
Ketchikan Wood Products Industry Overview. According to statistics maintained by the
Alaska Department of Commerce, Community and Economic Development, the average
annual monthly employment in the wood products industry in Ketchikan Gateway Borough
fell from 927 jobs in 1990 to 383 jobs in 2000, a decline of 242%. This number does not
even include over 500 jobs lost due to the Ketchikan Pulp Corporation closure in 1997. A
study by the Alaska Department of Labor and Workforce Development found that, while the
Ketchikan economy was able to absorb most of the 299 pulp mill employees who chose to
remain in the area, by 1999 their average earnings were at only 65% of what they made in
their former jobs, and 24.5% of the workers were holding more than one job to make ends
meet (Alaska Economic Trends, January 2001).
In a report titled The Alaska Wood Products Industry in 2001, the Institute of Social and
Economic Research of the University of Alaska Anchorage provided the following
information about declines in the state’s wood products industry:
• “The Alaska wood products industry has been experiencing significant market
changes for the past several years. The industry has declined by all economic
measures. As a result of this, the social and political structure in some Alaskan
communities has also changed from a more timber supportive environment to one
focused on non-timber related jobs and skill sets.”
• “The Alaska forest products industry faces many barriers. The recent economic
downturn in the Asian market has brought about change, forcing mills in Southeast
Alaska to close and placing hardships on others.”
• “Timber harvests in Alaska have declined from approximately 900 mmbf (million
board feet) annually in the past to a recent 283 mmbf. As of June 2000, forest industry
employment statewide had dropped 65 percent from its peak.”
Project Assumptions. The project assumptions are as follows:
• Residents of Rural Alaska communities need new sources of employment to offset
job losses in traditional industries and to raise their income levels.
• Numerous high-paying timber and wood products industry jobs held by Native
Alaskans have been lost in the targeted region over the past decade due to the effects
of globalization and loss of global export markets.
• The proposed intervention–participation by Alaska Village Initiatives (AVI) in the
expansion and market growth of an already successful value-added operation that is
manufacturing building materials–will (1) facilitate the re-employment of individuals
with adaptable skill sets who have been forced into a low-income status by market
changes and (2) create job training, marketable skill sets, and higher income
opportunities for other low-income individuals with current skill and employment
limitations.
• The IWP project will target job creation for low-income residents of the Ketchikan
Gateway Borough.

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Interior Wood Products Office of Community Services JOLI Program Proposal

• Current training and placement services provided to low-income individuals seeking

employment are not equally matched by employment opportunities in the local
market.
• Projected wages for the jobs to be created will range from $11/hr to $20/hr depending
on the specific job. The average wage of $15.50/hour is __% higher than the typical
wage of TANF recipients in the Ketchikan Gateway Borough.
Identification and Removal of Personal and Community Barriers. Problems specific to
employment of low-income individuals in the Ketchikan Gateway Borough include limited
opportunity for job creation, resulting from inability to attract industry and commerce, and
isolation due to the lack of road access to other communities. The social services provided
for these communities are, of necessity, operated in the regional center of Fairbanks.
Consequently, individuals must leave their home communities to reach the center that
provide family social services and job training, traveling by airplane, boat, or snow machine
in winter. The vast distances, remote locations, and lack of road access are barriers to
providing services to low-income rural Alaskans. By creating employment opportunities, the
IWP project will remove the systemic barrier of limited job opportunities for low-income
individuals. Removal of the barrier will be accomplished through a comprehensive and
coordinated effort with the local TANF services provider, in which project participants and
their families will be fully supported and provided with the necessary services to ensure that
their employment is both successful and long term.
Job retention will be enhanced by the creation of local jobs that permit families to remain
intact, reducing the strains of absent family members and returning the pride of self-
sufficiency. The employment opportunities will enhance self-image, reduce the likelihood of
substance abuse and family violence, and foster new skills.

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Interior Wood Products Office of Community Services JOLI Program Proposal

I(b). Project Strategy and Design: Interventions, Outcomes, and Goals

The primary social strategy of the IWP project is to promote economic self-sufficiency
through the creation of job opportunities for low-income individuals in an economically
depressed region. The implementation tools are effective mobilization and leveraging of
technological, financial, public, and market resources.
The desired outcome will be accomplished through the development of a regional center for
the processing of locally harvested raw timber resources creating products needed in
residential and commercial construction.
Immediate Interventions. IWP will expand a local value-added business that will further act
to displace treated timber imports from foreign sources. Currently, the primary source of
treated wood products is from outside the United States. This project will expand a local
source for building material to meet local and statewide demand. The IWP penetration into
the treated wood market will help to contain the deterioration of this community.
Intermediate Interventions. Intermediate interventions will include the creation of a
sustainable market for new value-added products and the associated employment
opportunities. Furthermore, job training will improve the marketability of skilled labor from
the region, and will help to create cluster economies built on available renewable resources.
Immediate Outcomes. The immediate impact will be the creation of 52 additional
employment opportunities for disadvantaged workers. Training in specific job skills will help
to immediately improve the local labor force. The projected impact will also significantly
improve the well-being of families from the region, by immediately increasing income for
the neediest households.
The job skills training will have the further benefit of raising self-esteem among chronically
unemployed region residents. The training will help participants with eligibility for a wide
array of industries, including construction, manufacturing, and other resource base industries.
Intermediate Outcomes. The creation of a “cluster economy” for value added timber
processing will stimulate further development in the wood products industry. The addition of
business for harvesting, processing, constructing, distributing, and other associated business
activities will create a wider labor market for project participants, helping to introduce further
benefits by increasing prevailing wages for the region and improving the overall employment
situation.
Goals. The overall objective of the IWP project is to contribute to a healthy regional
economy by using local resources and local labor in a market sustainable fashion. The IWP
project will accomplish this by immediately creating employment opportunities, and will
stimulate the development of a cluster economy centered around the treatment of locally
harvested timber.
The project will act as a catalyst for change in the surrounding region, helping to alleviate the
extreme poverty and under-utilization of human and natural resources. These changes will
foster a positive attitude among regional residents and act to build confidence, encouraging
communities to take control of their future.

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Interior Wood Products Office of Community Services JOLI Program Proposal

I(c). Work Plan

The work plan for accomplishing the IWP project charts the development of capacity to
manufacture and deliver treated-wood products. The milestones and schedule are
summarized in the table immediately below. Following an overview that describes the
evolution of Pacific Log and Lumber Ltd. and identification of the market opportunity
targeted by the business expansion, the work plan tasks are described. Other subsections
address use of funds and the potential for obstacles. The business plan is provided in an
appendix.
TASKS AND SCHEDULE FOR WORK PLAN MILESTONES
Task No. Activity Milestone Completed
1. Business entity creation November 2004
2. Facility construction April 2005
3. Equipment procurement and installation May 2005
4. Development of sales and distribution network May 2005
5. Recruitment and hiring of staff June 2005
6. Training of employees July 2005
7. Product testing August 2005
8. Fully operational facility August 2005
9. Assessment of project success March 2006

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Note: Ketchikan is unlike other regions of the state in that it is possible to conduct construction and timber p
activities year-round in Ketchikan due to the milder climate of Southern Southeast Alaska.

The Pacific Log and Lumber Ltd. Facility, looking East towards downtown Ketchikan

Background. Pacific Log and Lumber Ltd. is a small business founded in 1998 to produce
rough-cut lumber. In March of 2002, the company received a U.S. Forest Service matching
grant to purchase a kiln and compete in the value-added lumber market. The company
currently employs approximately 40 individuals on an annual basis.
Pacific Log and Lumber Ltd. produces rough lumber, house, logs, and beams. Products also
include exterior siding products and interior wood finishes. The business is currently
providing log lap siding, spruce pole interior, ceiling panels, and other products to Home
Depot, as well as various building products to retail and commercial customers.
The ability to treat wood products with a new process that successfully extends service life
has been identified as a significant market opportunity. Currently available products, which

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Interior Wood Products Office of Community Services JOLI Program Proposal

are largely imported from Canada, do not endure in Interior Alaska applications for
foundations and boardwalks.
AVI owns the licensing for a successful treatment process that has demonstrated unmatched
success in wood preservation (during University of Alaska Fairbanks product testing).
Through a joint effort between AVI and Pacific Log and Lumber Ltd., IWP will provide
several distinct advantages in business expansion. Consequently, the jointly supported and
owned IWP enterprise will succeed in tapping a greater share of the value-added wood
products industry, as well as offer a vehicle for expanding the existing value-added
processing of Pacific Log and Lumber Ltd..
The treatment process that will be used by IWC offers the ability to produce mass and
ordered-to-specification products for the building industry. Products can be cut to size first,
then treated to weatherproof them. Because the products are thoroughly saturated with the
treatment solution, rather than just treated on the outside, they will retain their durability far
longer than wood treated with traditional weather-proofing techniques.
The initial products will consist of shakes (used primarily as roofing), boards, beams, and
timbers. In addition to treating the shakes, IWC will produce and market a new shake product
consisting of 16-foot lengths of prepared roofing that offers the advantage of installation in
10% of the time required for traditional shingle products.
More than 75% of the jobs created by the business expansion are expected to employ low-
income individuals and individuals on public assistance, resulting in the following direct
community benefits:
• The jobs will provide opportunities for low-income individuals to develop new
technical and career-building skills.
• IWP training and employment will advance the careers and future hiring prospects of
the employed individuals.
• The income from the jobs will contribute to improved family and community welfare.
In summary, IWC will be an expansion of the successful Pacific Log and Lumber Ltd. to
provide a business dedicated to manufacturing value-added wood products. The firm will
also add new treated wood product lines. The manufacturing enterprise will benefit from the
use of technology licensed to AVI, as well as the financial and marketing expertise of AVI
(see Element III). The following work plan tasks will accomplish the business expansion.
1. Business Entity Creation. The IWP business structure will be a for-profit class C
corporation. The company will be jointly-owned by AVI and Pacific Log and Lumber Ltd..
The legal agreement outlining ownership, monetary and equity, and company management
will be prepared and reviewed by the boards of directors for the parent firms. These activities
will be completed and the Alaska business license will be obtained by November 2004.
2. Facility Construction. Construction of the building to house the value-added and
operations and support services, including sales and administration, will be completed in
April 2005. A key objective will be advantageous layout and efficient use of mechanical
systems to create a safe and healthy environment while delivering the electricity and
chemical handling capacities to meet the production needs. The 6,000-square-foot facility

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Interior Wood Products Office of Community Services JOLI Program Proposal

will accommodate future expansion, as well as provide space for manufacturing during the
startup phase of IWP.
3. Equipment Procurement and Installation. Preparation of the facility for the
manufacturing process will require acquisition and installation of the following equipment:
• Storage tanks
• Piping
• Valves, flowmeters, alarms, and other system components
• Overhead crane
The identification, purchasing, receipt, installation, and functionality testing of these items
will be completed by May 2005. The existing equipment used already by Pacific Log and
Lumber Ltd. for producing value-added products, such as molding machinery and a kiln, will
also be installed in the facility.
4. Development of Sales and Distribution Network. During the facility preparation tasks
(Tasks 2 and 3), contacts will be made with potential buyers for the finished goods to be
produced by the IWP facility. This task also will be completed by May 2005.
During meetings and other communications, additional information to refine product
specifications or that may identify future product expansion will be gathered. The existing
contacts and purchasing agreements of Pacific Log and Lumber Ltd. will provide a leg up in
sales, marketing, and distribution for IWP.
5. Recruitment and Hiring of Staff. Workers will be recruited to fill the positions required
to operate the wood treatment operation. This will be done in partnership with both the
Tribal Temporary Assistance to Needy Families Program run through Central Council of
Tlingit and Haida Indian Tribes of Alaska and the State Division of Public Assistance.
IWP, which will seek to employ low-income and displaced workers in the new jobs created
by the project, will benefit from the established recruitment procedures of these
organizations. Candidate interviews and hiring will be completed in June 2005.
6. Training of Employees. The IWP new hires will receive training in health and safety
practices and hazardous materials awareness. A local firm that routinely provides classes for
workers and has demonstrated success in communicating with the targeted population will be
retained to conduct the specialized training.
In addition, employees will be trained in the skills required for their respective positions. The
orientation to the duties will include hands-on practice under the close supervision of a
qualified trainer. In addition to gaining technical knowledge, the manner in which training is
conducted will be consistent with ongoing development of less tangible skills such as
teamwork, planning and scheduling, cross-cultural communications, and time management.
The training will occur in July 2005.
7. Product Testing. The prototype wood treatment and product manufacturing will be
completed in August 2005. This task will involve use of equipment to verify functionality. It
will provide the opportunity to adjust the wood treatment process to improve efficiency and

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Interior Wood Products Office of Community Services JOLI Program Proposal

convenience. The testing will also verify production output expectations and help refine cost
information.
8. Full Operation of Facility. The IWP facility will be fully operational in August 2005.
This milestone will permit scheduled distribution of treated product, in addition to the
ongoing shipments of other value-added products, to major Pacific Log and Lumber
customers and to new customers identified during the networking process.
9. Assessment of Project Success. The first formal assessment of project success, which is
described in Element IV, Project Evaluation, is scheduled for March 2006. The outcome of
this task will be identification of strengths and weaknesses that will promote business
improvements and verification that employment goals are being met.
Critical Issues and Potential Problems. In developing the IWP business plan, the lack of
barriers to success has become apparent. Issues and problems have been addressed through
the agreements with CCTHITA and the State Division of Public Assistance for employment
services targeted at low-income individuals; the inclusion of AVI financial expertise and
licensed technology; and the existing distribution channels, excellent reputation, and
industry-specific business savvy of Pacific Log and Lumber Ltd.. Although a catastrophic
wildfire could reduce available timber, the tremendous amount of resource available in the
immediate area could sustain a huge loss without adversely affecting IWP, and wildfires are
unusual in the temperate rainforest environment of Southeast Alaska.
Funding and the Use of the Financial Assistance. AVI is seeking funding from the Job
Opportunities for Low Income Individuals (JOLI) program of the Office of Community
Services (OCS), so that it can leverage private investment from financial institutions, private
companies, and existing applicant resources.
For the IWP project, $500,000 in funding under the JOLI program is sought. This grant will
create 52 jobs for an average yield of $9,615 per job. The grant funds will be used for the
following purposes:
1. Engineering and Design of the Treatment Equipment. These activities will be
conducted to ensure that the most effective use is made of funds available for
equipment purchase. Engineering and design are estimated to cost $10,000. Work will
be competed by a qualified engineer from the local region.
2. Purchase of the Treatment Equipment. Purchased equipment will consist of piping,
tanks for treating the lumber, and pumps. It is estimated that this equipment and
necessary components will cost $160,000.
3. Installation of the Treatment Equipment. Installation of equipment into the
treatment facility is estimated to cost $30,000.
4. Training on use of the Treatment Equipment and Administration. IWP will use
$100,000 of the grant funds to train workers on safety, job-specific skills, and other
tasks. This training will be conducted primarily in the first three quarters of the
project period. Additionally, some of these funds will be allocated to administration of
the entire implementation process and overseeing recruitment and training.

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Interior Wood Products Office of Community Services JOLI Program Proposal

In addition to the grant funds, the IWC business expansion will be financed through cash and
other contributions of AVI and Pacific Log and Lumber. AVI and Pacific Log and Lumber
will contribute $??? in property, facilities, equipment, and working capital to IWP to facilitate
a cooperative development in a depressed region. To reach the identified goal of 52 jobs, IWP
will seek maximum leverage of private investment. The breakdown below identifies the
components of and total private funding to IWP project:

NON-FEDERAL PROJECT CONTRIBUTIONS

Contributor Amount Source Type
Alaska Village Initiatives $175,000 Wells Fargo Equity Cash
Placement
Alaska Village Initiatives $100,000 Alaska Village Initiatives License - In-Kind
Pacific Log and Lumber Ltd. $160,000 Pacific Log and Lumber Cash
Ltd.
Pacific Log and Lumber Ltd. $75,000 Pacific Log and Lumber Equipment – In
Ltd. Kind
Pacific Log and Lumber Ltd. $36,000 Pacific Log and Lumber Equipment – In
Ltd. Kind
Pacific Log and Lumber Ltd. $140,000 Pacific Log and Lumber License – In Kind
Ltd.
Subtotal Alaska Village Initiatives $275,000
Subtotal Pacific Log and Lumber $411,000
Ltd.
Project Total $686,000

A copy of the third-party agreement and three years of financial statements for PLL are
included as attachments.

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Interior Wood Products Office of Community Services JOLI Program Proposal

II. SIGNIFICANT AND BENEFICIAL IMPACT

II(a). Quality of Jobs and Business Opportunities

The jobs created by IWP activities will take advantage of existing skill sets among workers
displaced by wood products industry jobs lost [see Element 1(a)] and will train individuals
entering the industry. In addition to direct employment at IWP, indirect jobs will be generated
by the business expansion. These positions include timber harvesting by vendors supplying
product, road maintenance workers, and community retail and service positions reflecting the
increased spending of employed individuals.
The quality of the jobs created will be far higher than other options currently available to the
targeted population. Aspects that make the employment opportunities attractive include the
following: seasonality, productive use of natural resources, and opportunities to contribute to
aesthetically pleasing new construction.
Some jobs will be seasonal, a job characteristic that is compatible with the desires of many
individuals in the targeted region. It is recognized that seasonal employment, although
considered non-traditional in other areas of the United State, is a standard preferred by many
rural Alaska residents.
Employment based on resource extraction is consistent with Alaska Native heritage. The
productive use of timber assets is a source of pride and satisfaction for those who consider
themselves closely tied to the land, as Tlingit and Haida peoples do.
The availability of the new products will increase the use of wood products for regional
construction. The wood products already produced by Pacific Log and Lumber have been
embraced for use in large log facilities for tourism and Native organization facilities. These
structures promote development of attractive buildings that blend with the surrounding
environment.
Pay will be in keeping with industry standards, and will be well above the Federal Minimum
Wage, with even the lowest paying positions starting at $11 per hour. Advancement and
training opportunities will also be available, because local management and participation are
key objectives of the program.
Job Creation. The following table identifies jobs that will be created through the IWP
project. The total number of jobs created is estimated at 52 positions.

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Interior Wood Products Office of Community Services JOLI Program Proposal

JOBS CREATED BY IWP PROJECT

Job Classification No. of Individuals Employed
Administration for Facility Operations 6
Marketing and Research 2
Loggers 6
Transportation and Warehousing (for both harvesting and 3
plant operations)
Shop/Maintenance (for logging and plant equipment) 2
Yard Maintenance (for logging and plant operations) 4
Road Maintenance (access to harvesting and access to 4
facility site)
Plant Operations (includes supervisor, laborers, fabricators, 8
kiln/boiler operators, and other support)
Plant Quality Control and Product Testing 1
Product Installation (construction crews for installation of 12
roofing and siding products)
Lodging Facilities/Camp Support (for crews remaining in 4
area or relocating to area)

II(b). Community Empowerment Consideration

Most of the affected communities served by AVI are located in HUB Zones, where
unemployment and poverty are pervasive problems. Many of the participant communities for
IWP are members of AVI, which is a membership-based community development
corporation. Through membership, communities dictate the direction and actions of AVI and
ensure that AVI has no programs that are not in keeping with community standards. Pacific
Log and Lumber Ltd. is a HUB Zone Certified Contractor in the targeted community. (See
appendices).
Together, AVI, Pacific Log and Lumber, and IWP will work to equip region residents with
job skills, training, and general employment experience. This employment initiative will help
to further the employability of project participants in other industries. Additionally, through
the creation of a local industry centered on the use of local resources, IWP will act to
empower local communities to participate in the improved use of those resources. The IWP
project plan also supports the Comprehensive Economic Development Strategy (CEDS)
prepared by the Borough in 1999. The plan also is supported by the regional non-profit
organization serving the Yukon-Koyukuk region, Tanana Chiefs Conference. Because the
IWP project plan enjoys the support of both organizations, it is compliant with the region’s
strategy for economic recovery. (is this still a question I need to deal w/ in this year’s
guidelines?)

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Interior Wood Products Office of Community Services JOLI Program Proposal

II(c). Support for Non-custodial Parents

IWP has entered into a memorandum of agreement with both CCTHITA and the State
Division of Public Assistance, who serve as the local TANF and CSE provider of support
services for Non-Custodial Parents for the Native and non-Native populations of Ketchikan,
respectively. As part of these agreements, these organizations have agreed to assist IWP in
identifying qualified non-custodial parents for employment. Through employment, the non-
custodial parents will be able to meet their obligations and improve the economic well-being
of their children. The full agreements are included in the appendices.

II(d). Cooperative Partnership with Designated Agency for the TANF Program
The partnerships described above include agreements that these organizations will provide
assistance in the identification of qualified TANF recipients for placement with IWP, and in
return, IWP agrees to hire and train qualified applicants. The full contract is included in the
appendices. This qualifies for the full five points allowable under this section.

II(e). Cost per Job

The federal cost-per-job ratio for the 52 jobs to be created by IWP (75% or more of which
will be for low-income residents of rural Alaskan communities) is $9,615. This cost-per-job
ratio is below $10,000 per job and qualifies for the maximum point value.

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III. ORGANIZATIONAL EXPERIENCE IN PROGRAM AREA AND STAFF SKILLS,

RESOURCES, AND RESPONSIBILITIES

III(a). Agency Experience and Commitment in Program Area

Alaska Village Initiatives (AVI) is a non-profit organization and a Community Development
Corporation (CDC) dedicated to improving the well-being of rural Alaska communities,
families, and individuals. AVI promotes the economic well being of rural Alaskans through
economic development, assistance, networking, advocacy, and education.
Formerly known as Community Enterprise Development Corporation of Alaska, the
corporation was formed in 1968 to create new economic activities in distressed communities.
Today AVI has more than 170 member organizations, which in turn represent more then
50,000 Rural Alaskans. The corporation is controlled by a 23-member Board of Directors
representing rural communities and organizations from across the state.
AVI provides a wide variety of services in its primary service area of rural Alaska. AVI
programs are designed to provide employment and business opportunities for low-income
residents of rural communities. These programs strengthen local economies by creating jobs
and skills and by promoting financial self-sufficiency of individuals and families.
Executive Leadership and Agency Resources. Tom Harris, President and Chief Executive
Officer of AVI, reports to the AVI Board of Directors. He is supported in program delivery by
AVI program directors and accounting and finance managers. Mr. Harris will ensure that the
proposed project remains a priority activity of AVI and has received direction from the Board
of Directors to advance this project based on membership input to the board.
Managerial oversight and accounting services for the proposed project will be provided by
AVI.
Experience in Program Area. Relying on knowledge gained during 35 years of experience
with rural Native small business assistance, AVI has concluded that with the economic
distress brought about by the crash of commercial salmon fishing and timber, rural Alaska
Natives are looking for new opportunities related to resource extraction that rely on existing
local resources and local skills.
History. In its more-than-30-year history, AVI has devoted its efforts to providing
opportunities for rural Alaskans to enter into the socioeconomic structure of a cash economy.
Toward that end, AVI has provided seed capital, training, and technical assistance to more
than 1,100 individuals and locally owned businesses in Native villages throughout the state.
As the state has changed, so AVI has changed. Before the Alaska Native Claims Settlement
Act was passed, AVI worked primarily to develop and fund cooperatives, because it was
virtually impossible for individuals in a village to amass adequate funding and expertise to
start a business.
When ANCSA created 225 village corporations and 13 Regional corporations, AVI provided
accounting and management assistance to the corporations. This assistance helped
communities transition into a business world. Retail stores, fishing boats, and fish processing
plants were the primary types of businesses receiving AVI financing and technical assistance.

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Interior Wood Products Office of Community Services JOLI Program Proposal

The historic Alaska Commercial Company was the largest rural employer in the state when it
was owned by AVI. (The Alaska Commercial Company is a chain of retail stores in more
than 20 rural communities, and was founded in the 1800s as the Russian America Company.)
Understanding of and Experience with Existing and Historical Assistance Programs.
AVI has provided technical assistance to and financed more than 1,100 community-owned
businesses in more than half of the communities in Alaska. Loans to these businesses have
totaled roughly $40 million. More than 7,600 jobs were created and more than $35 million
has been leveraged from local, state, and private sources to develop enterprises and provide
technical assistance to others. During its ten years of operation, one program alone, the
Minority Business Development Center, assisted more than 900 clients in many business
areas, including obtaining enterprise financing of $34.37 million and procurements and
contracts amounting to $53.11 million. AVI developed and maintained an extensive Web site
for this program, with links to several other assistance programs.
In addition to solid client and member relationships, AVI has ongoing relationships with the
public and private sectors. The following are examples of these relationships:
• Contracts with the State of Alaska for economic development initiatives throughout
Alaska, including a rural tourism grant and business assistance contracts and grants
• Contracts with the U.S. government agencies to administer loan and technical
assistance programs, including the Economic Development Administration boat loan
program, Cooperative Development Center (U.S. Department of Agriculture
[USDA]), and Rural Development Loan Fund (USDA)
• Investment grants from the Office of Community Services and its predecessor, CSA
• More than 20 directorships held by members of AVI management in Alaska business
ventures, Native organizations, private non-profits, and governmental commissions
and committees.
The following table identifies AVI program experience. In keeping with the mission of AVI,
all of these programs have promoted job creation and enterprise activities for low-income
people. Evaluation and data collection have been part of many programs and are
requirements of all loan programs. Through the administration of its many programs, AVI has
maintained meticulous records. AVI is subject to periodic audits of an outside CPA firm
because of work conducted under funding from federal grants.

RELEVANT PROGRAM EXPERIENCE

Program Name Years Purpose Achievements
Technical Assistance
Alaska Cooperative 1998-Present Provide co-ops with management, Clients: 8
Development Center marketing, finance and operational
assistance
Professional Services 1994-Present Provide training and technical Projects: 300+
Group assistance to rural businesses &
communities
SBA Microloan 1993-1995 Provide technical assistance to Clients: 14
Technical Assistance

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Interior Wood Products Office of Community Services JOLI Program Proposal

RELEVANT PROGRAM EXPERIENCE

Program Name Years Purpose Achievements
Program 2001-2002 Microloan borrowers
Rural Small Business 1992-Present Annual conference to provide variety Attendees: 150+
Conference of information and technical annually
assistance to rural small businesses
Norton Sound Fisheries 1992-1997 Provide technical assistance for Affected more than 140
Program Norton Sound Fishery development fisheries
Minority Business 1984-1994 Provide technical assistance to Contracts: $53,110,000
Development Center minority Alaska enterprises Loans: $323,500
Village 1985-1985 Training workshops, problem solving Distributed: 600 copies
Entrepreneurship Project seminars and technical assistance “How to Start a Village
Business”
State of AK Business 1981-1982 Provide technical assistance to Clients: 33
Development Assistance Alaskan enterprises Funding: $4.9 million
Program
Alaska Consulting 1981-1982 Provide technical and business
Group assistance to small businesses
Loan Programs
Rural Development 1981-Present Provide otherwise unobtainable Loans: $17.0 million +
Loan Fund (RDLF) financing to rural enterprises Clients: 66
Commercial Boat Loans 1983-Present Provide financing for commercial Loans: over $2.9
(EDA) fishermen million
Clients: 263
Microloan Program 1993 Provide Microloans to small Alaskan Loans: $62,000
businesses
SBA Microloan Program 2001 Loans $20,000

Grant Programs
Howard Rock 1992-Present Provide scholarships and leadership Scholarships: 46
Foundation programs for Native students Total: $112,270
Bush Development 1986-Present Provide funds for new private Grants: $658,800
Grant Fund economic enterprises
Bush Development Fund 1988-1992 Provide tuition and books for needy Approved: 13
Scholarship Program Rural Alaskans Total: $40,000

Tourism Projects
Rural Tourism Center 1995-2001 Provide technical assistance and Clients: 425+
training for rural communities and
tour operators
Alaska Native Tourism 1987-1997 Cooperative marketing and technical Members: 23
Council assistance from rural tour products Visitors: 150,000+

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Interior Wood Products Office of Community Services JOLI Program Proposal

RELEVANT PROGRAM EXPERIENCE

Program Name Years Purpose Achievements
Alaska Village Tours, 1987-1999 Tourism Training and new tourism Employed: 14
Inc. project development Jobs Created: 50+
Community Tourism 1988-1989 Community tourism planning, Produced: Community
Strategy Development assessment, training, and Tourism Plans / Bethel
Training Program development in YK Delta Village Tour Started

Nome Tour Guide 1989-1990 Tour guide and small business Businesses started: 10
Training Program training program
Independent Tour Guide 1990-1991 Tour guide and small business Business started: 14
Training Program training for Bering Straits villages

Kodiak Island Tourism 1990-1991 Tourism development and planning Trained: 12

Development Project and job skills training

Rural Alaska Tourism 1990-1991 Evaluated tourism potential of rural Produced assessment
Assessment & Inventory communities and handbook
Project

Examples of Successful Program Implementation for Similar Projects

North Foreland Barge Facility, LLC. Situated beside Cook Inlet, the North Foreland
Facility is a joint venture among the U.S. Department of Health and Human Services, Office
of Community Services, AVI, and the Tyonek Native Corporation. The project, designed to
create 77 new jobs for low-income residents, provides barge-landing services for the timber,
gravel, and mining industries in Southcentral Alaska. The project has exceeded its original
job creation goal by more than 30 additional jobs. This project has permanently benefited
low-income residents of the west side of Cook Inlet by helping to create lower transportation
costs, improving offloading capabilities and creating local employment opportunities.
Project Code Red. The Project Code Red project is similar to the IWP project because its
success has hinged on the use of new technology to improve community welfare and create
jobs. Additionally, the project has created manufacturing and assembly capacity for Alaska
Village Initiatives, giving the management team valuable experience in managing similar
processes.
With leadership support from U.S. Senator Ted Stevens, AVI worked with the State Fire
Marshal’s office to develop plans for greatly improving fire suppression capacity in rural
Alaska. The project included developing new tactical assumptions, based on an analysis of
the needs from a tribal perspective that considered the unique rural Alaska environment. A
combination of existing and new equipment has created a novel firefighting package that is
much more appropriate for rural conditions than all systems previously used. Project Code
Red delivers new 21st Century fire-suppression technology that is ideally suited to provide
fire protection to remote Alaskan villages in nearly all kinds of weather and conditions. The

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Interior Wood Products Office of Community Services JOLI Program Proposal

Micro-Rural Fire Department can deliver 600 gallons of eco-safe fire fighting foam from 30
gallons of foam water.
In 2002 and 2003, 42 rural, predominately native communities have been identified as
eligible for funds from a U.S. Department of Agriculture Rural Development grant. The
funding covers 75% of costs. Each Native community receives the firehouse and other
equipment in the self-storage shipping container, shipping to the community, and training.
Other funding sources have permitted planning for additional PCR units. The total number of
rural Alaska communities already benefiting from or slated to receive the Micro-Rural Fire
Department and participate in PCR is 55.
The firehouses and suppression units were assembled and equipped by AVI and
subcontractors. These skilled jobs were newly created by Project Code Red.
Summary. It is important to note that part of AVI’s role has always been to maximize
available resources. Toward that end, AVI makes regular referrals to the Small Business
Development Centers, the Alaska Rural Development Organizations (through U.S.
Department of Agriculture), the various Housing and Urban Development and U.S.
Department of Agriculture programs developed for cities and tribes, and bank and investment
programs of the Small Business Administration and private entities. AVI also taps members
of associations such as the Chamber of Commerce, Commonwealth North, and the
Humanities Forum to obtain specific expertise.
AVI must be aware of the various other resources, because it cannot be all things to all
people. AVI provides referrals for assistance to city governments and others that do not fall
under the AVI membership focus of community-based enterprises.

III(b). Staff Skills, Resources, and Responsibilities

Project Management and Staffing. AVI has a consistent track record of recruiting staff
appropriate for its programs. The project management team for IWP consists of the Project
Director, Project Manager, and Finance Director.
Project Director – Tom Harris, AVI President/CEO. As Project Director, Mr. Harris has
overall responsibility for the operation of this project. He will be the primary point of contact
between the AVI Board of Directors and project management. Mr. Harris will also participate
by developing relationships with potential project partners and participants. A large part of
his role will be in cultivating long-term relationships with communities involved in the IWP
project. Additionally, he will participate on the oversight board for IWP, and will review the
Operations Manager’s performance in meeting program objectives.
Mr. Harris’ experience during 15 years as CEO for AVI and other organizations has provided
a sound knowledge of Alaska business trends. His understanding and expertise also provide
an understanding of rural obstacles and opportunities.
Operations Manager of IWP – Mike Holz, Pacific Log and Lumber Ltd. Project
Manager. As Operations Manager, Mr. Holz will manage the project’s manufacturing and
production operations. He will be responsible for the management of all employees and
vendor relationships. Mr. Holz has over 35 years of experience in this field and has extensive
business contacts and industry-specific capabilities. In his role at Pacific Log and Lumber

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Interior Wood Products Office of Community Services JOLI Program Proposal

Ltd., he has participated either as a general contractor or subcontractor on numerous

residential and commercial construction jobs throughout Interior Alaska. Additionally, Mr.
Holz has a successful track record of product development, market identification, and
distribution of timber-related products.
Finance Director – Lou Nelson, AVI Chief Financial Officer. As Finance Director, Mr.
Nelson will ensure that the financial structure of the project is sound, responsible, and
appropriate to the project. This oversight includes internal controls, as well as a reporting
mechanism. Mr. Nelson will report to the Project Director on the overall state of the funding.
He may participate in staff and board program reviews, and may assist staff in analyzing the
feasibility of specific activities. Mr. Nelson and his staff will be responsible for all financial
record keeping and financial reporting to OCS regarding this project.
Mr. Nelson has more than 40 years of business development and financial administration
experience, divided almost equally among private enterprise, government, and private
practice as a Certified Public Accountant. Either as an entrepreneur or senior level manager,
he has extensive experience developing new ventures or administering existing businesses.

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Interior Wood Products Office of Community Services JOLI Program Proposal

IV. PROJECT EVALUATION

The implementation of the project will be continuously examined for effectiveness and
efficiency in meeting project objectives of creating low-income jobs and providing the
interventions described in Element 1(b). The IWP work plan also identifies a formal project
evaluation that will be accomplished by June 2004.
Chuck Akers, Director of the Alaska Rural Development Council (ARDC), will evaluate the
IWP project progress. ARDC is a federally funded organization designed to facilitate and
coordinate with state and federal agencies together with the private sector to effectively
support the community and economic development efforts in rural Alaska. ARDC works to
set up collaborative partnerships between groups and key players to help ensure the success
of any given development project in rural Alaska, the organization.
Mr. Akers has more than 25 years of professional experience, including experience in grants
management, rural development, and project management. Mr. Akers also brings significant
experience in project evaluation, both in his capacity as a civil servant and non-profit
executive. Additionally, he is very familiar with the needs of IWP’s service area, and is
originally from rural Alaska. His resume and a letter of support for the project are included in
the appendices.
Following the initial formal project evaluation, which will occur after the plant has become
fully operational, subsequent project evaluations will be conducted semi-annually. The
following areas will be addressed:
• How effective have IWP’s activities been at creating jobs for low-income individuals?
• Have AVI and IWP been successful in obtaining community participation and
achieving community empowerment?
• How are AVI and IWP management dealing with difficulties and overcoming
obstacles to development?
• Are the jobs created of sufficient quality and are they sustainable?
• Is the program achieving the goal of self-sufficiency for low-income individuals?
In addition, specific feedback and observations will be gathered to identify what project
approaches and components are working best and which areas need improvement. In
identifying ways to improve the project outcomes, the reasons for inadequacies or problems
will be clarified to permit resolution.
Data will be collected by the IWP and AVI staff on the nature and pay of the jobs created by
the program. The data will be presented in a uniform format to the project evaluator to aid in
the decision-making process.
Additionally, an internal quarterly review will be performed by AVI staff and reviewed by the
Project Director, Tom Harris, with results forwarded to the evaluator. This review will
include an analysis of expenditures, revenues, and effectiveness.
Project evaluations completed by Mr. Akers of ARDC will be included in the submission of
the semiannual report to OCS.

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Interior Wood Products Office of Community Services JOLI Program Proposal

Results of the project will be disseminated in press releases and in AVI’s quarterly newsletter.
This information will be prepared semiannually to coincide with project evaluation and
reporting.

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Interior Wood Products Office of Community Services JOLI Program Proposal

V. PUBLIC AND PRIVATE PARTNERSHIPS AND RESOURCES

The IWP project will significantly mobilize private resources for the creation of jobs in
Interior Alaska. An additional $686,000 in resources will be committed to the project,
exceeding the maximum point match requirement by 37.2%. The private contributions are
summarized in the table below (previously included in Work Plan section):

NON-FEDERAL PROJECT CONTRIBUTIONS

Contributor Amount Source Type
Alaska Village Initiatives $175,000 Wells Fargo Equity Cash
Placement
Alaska Village Initiatives $100,000 Alaska Village Initiatives License - In-Kind
Pacific Log and Lumber Ltd. $160,000 Pacific Log and Lumber Cash
Ltd.
Pacific Log and Lumber Ltd. $75,000 Pacific Log and Lumber Equipment – In
Ltd. Kind
Pacific Log and Lumber Ltd. $36,000 Pacific Log and Lumber Equipment – In
Ltd. Kind
Pacific Log and Lumber Ltd. $140,000 Pacific Log and Lumber License – In Kind
Ltd.
Subtotal Alaska Village Initiatives $275,000
Subtotal Pacific Log and Lumber $411,000
Ltd.
Project Total $686,000

Cash contributions will include $335,000, equipment contributions will include $111,000,
and existing licenses will include $240,000, for a project private contribution total of
$686,000. Including the OCS JOLI funds, if awarded, the project will total $1,186,000.
A significant contribution to the project will be made by Wells Fargo Bank Alaska, N.A.,
which will make an Equity Equivalent Placement of $175,000 into the project contingent
upon a grant award. This will be structured as a ten-year placement, with interest only
payments of 2% quarterly for the entire length. No equity return is required in the first ten
years. After the initial ten years, the placement will need to be returned or refinanced with
traditional debt or equity. A commitment letter is included in the appendices.
An additional partnership has been formed with Tanana Chiefs Conference (TCC) for
employment assistance. This partnership will assist greatly in ensuring the project benefits
low-income families from the region. This agreement has been previously articulated in the
narrative.

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Interior Wood Products Office of Community Services JOLI Program Proposal

It is also anticipated that further private and local government resources will be mobilized
upon successful completion of the initial phases. However, no accounting for these
additional resources has been made for the purposes of this grant application.

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Interior Wood Products Office of Community Services JOLI Program Proposal

VI. BUDGET APPROPRIATENESS AND REASONABLENESS

(need to put in some stuff…)

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