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Coastal Villages Region Fund

2006 Annual Report





2006 Annual Report Table of Contents 4 Strategic Mission Statement 6 Message from the President 8 Message from the Executive Director 10 Board of Directors On-Shore/Near-Shore Infrastructure Development 12 Coastal Villages Seafoods Summary 14 Fisheries Support 16 Vessels/Barges 18 Quinhagak Airport 19 CDQ Harvest Summary Human Resources Development 20 4-SITE Fisheries Support and Development 21 Commercial Fishing Loan Program 21 Tax & Permit Assistance Program Community Development 22 Project HaullyWOOD 23 CDQ Project Fund 24 Financial Overview 27 Staff List




COASTAL VILLAGES REGION FUND STRATEGIC INTENT (VISION) Continuous focus on balancing growth in commercial fishing and sustainable development of CVRF communities.

STRATEGIC MISSION Provide the means for Development of our communities by creating sensible, tangible, and long-term opportunities that generate hope for all people who want to fish and work.

CORE VALUES • Effective Strategic Leadership • Trust, Integrity & Teamwork • Respect for and Understanding of all PEOPLE • Active Community Participation • Respect for and Understanding of the Land, Sea, and the Resource • Growth & Sustainability through Maximum Return on Capital • Industrious People + Job Opportunities = Self Determination

CORE COMPETENCIES • Balance the needs, wants, and expectations of all – Now and 7 generations from now • Understand risks/rewards, develop a plan of action, support it and execute on it • Deliver efficient and equitable economic benefits to our communities • Develop and deploy successful business models and adapt as needed for future use • Support bold thinking and continuous innovation • Deliver disciplined, purposeful & sensible initiatives to sustain and stimulate new economic growth in our region







Message from On behalf of the Board of Directors, I am pleased to provide you with the 2006 Annual Report. We are happy to report a very successful year on our major investments, and a sweeping change in Federal statute that dramatically increases the potential scale of benefits for our 20 communities. As the Western Alaska Community Development Quota (“CDQ�) Program enters its 15th year, both CVRF and the CDQ Program itself are stronger than ever. The fluctuations of Bering Sea resources like salmon and crab stocks attest to and prove the cyclic nature of this natural world. We are mindful of these factors as we invest heavily in Bering Sea fisheries such as pollock and crab. The last few years have given us exceptional returns on our pollock investment, and have allowed us to deliver benefits to our region in the form of scholarships, youth programs, internships, and in-region fisheries and markets for salmon and halibut. We hold ourselves responsible and accountable to ensure that CVRF can sustain itself through times of smaller investment returns, which are inevitable in the future with the oscillations of the Bering Sea. That is why we have a long-term view of responsible and equitable delivery of benefits to our communities. The CVRF Team has spent a lot of time and effort to improve the CDQ program for the benefit of our 20 communities. We received some great help in 2006 with the passage of federal legislation in June of 2006 to improve the CDQ Program. When this new law was being enacted, our Congressional Delegation said that the CDQ Program had far exceeded their expectations in terms of its growth and the benefits it is providing. I share their view. We remain deeply grateful for the ongoing support of the CDQ Program by Congressman Don Young and Senator Ted Stevens that has made our success possible.




the President It is very rewarding to work hard to carry forward the vision of the founding fathers such as Mr. Steven White of Eek, and turn that into real, tangible economic fisheries-related opportunities for our region residents. An important internal company discussion for the future was on the lengthening of board terms from three to six years. Stability of leadership is one important factor that is looked at by any investor, including banks. Without stability, it is very difficult to gain their trust and working relationship. The history of the corporate entities that have successfully grown is contingent upon their ability to secure financing and working capital. That one fact alone has allowed us to capitalize on, and benefit from successful investments. As you review this annual report, and reflect on the 2006 accomplishments for our communities, I hope you will also reflect on the very serious sacrifices that some of our resident soldiers are making overseas. We have the benefit of a stable program, stable economy and stable society because U.S. Military personnel, including men and women from our 20 villages, continue to serve this great country on our behalf. Let us be grateful for their service, continue prayers for their safe return, and stay mindful of what they mean to us, regardless of our politics.

Oscar Evon, President COASTAL VILLAGES REGION FUND




Message from the E Hello to our twenty member communities. It continues to be a great honor to work for our communities, the people of our region, and the CVRF Board of Directors. I am thankful to be part of the CVRF team, a team that can take pride in the success of 2006. CVRF had a remarkable year financially, provided our communities with more benefits and opportunities than in any year in CVRF’s history, and helped lay the groundwork for a new era of stability, maturity, and potential growth for CVRF and for the Western Alaska CDQ Program as a whole. In all aspects, 2006 was a great year, a year whose significance is already evident, and whose impacts we will continue to feel a decade from now. With the accomplishments of 2006, we are stronger than we have ever been in looking ahead to the economic future of our region, our people, and CVRF. The federal CDQ statute was improved significantly in 2006. After years of divisiveness, fish politics and red tape in the CDQ Program, the U. S. Congress stepped in and enacted comprehensive new measures to streamline and strengthen the CDQ program. The passage of these CDQ amendments (part of the Coast Guard and Maritime Transportation Act) in July of 2006 was a monumental turning point for the entire CDQ program and CVRF. In the new statute, Congress provided the CDQ community with long-awaited stability in our annual fish allocations so that we no longer have to argue with our neighbors about who gets how much fish. We will be able to work together with the other five CDQ groups on common, stable ground. In the fall of 2006, the six groups formed the Western Alaska Community Development Association, WACDA, to fulfill the new mandate in the statute to create a CDQ Panel to administer the CDQ program. The CDQ Panel and new CDQ framework are intended to inspire greater self-determination for our communities. I believe the new Panel and framework will provide tremendous success and autonomy for all 65 CDQ communities in the years ahead. We will achieve this with unanimity among the six CDQ groups and greater equality among the 65 CDQ communities. On the home front, CVRF adopted important changes to our mission statement that compliment the new federal law. For those who wish to fish and work, CVRF is providing more opportunities than ever before. The new mission statement is a reflection of the forward thinking nature and adaptability of our people. Clarity of intent will help us expand opportunities for residents even further under the new framework, increased autonomy, and self-determination afforded by the 2006 federal CDQ statute. CVRF continued to develop and build new fish plants and fisheries support centers in our communities in 2006. In fact, there is so much activity and visible, tangible results that it may be better to just look out your window than read this report. A new program that may be less evident is the “HaullyWOOD� project. We delivered a substantial amount of firewood by barge to nine communities in 2006, spending only around one-tenth of one percent of our 2006 budget to do so. The project has been well received and we are moving along with a 2007 expansion that will provide even more wood to CVRF communities, while still spending only a very small amount of the CVRF budget. The wood is coming from the Kenai Peninsula and is sprucebeetle kill that might otherwise be wasted. We had record in-region production of salmon and halibut during 2006, which has driven the decision to construct a world class processing center and central port for bulk item delivery. As part of our investment 


Executive Director in bulk transportation assets, CVRF will haul more of our own supplies in and out of the region. This will provide greater control and ultimately cost savings for CVRF across the region. We will be able to supply our own plants in region and haul our own fish products out of the region when and where we need to. The passing of Steven White impacted our company in 2006, and impacted me personally. Steven dreamed of fisheries benefits that had not happened in our communities and was a great example for our region because he went out and fished and worked. He wanted to see the same opportunity for his people. We dedicated the Eek Fisheries Support Center to Steven. Maybe we should dedicate the whole year to him. Thanks to the higher power for sharing him with us and thanks to his family for allowing him to give of his precious time and lasting wisdom to all of the Coastal Villages. It is our responsibility to look to the future. Steady growth is more important than our current financial strength. The new CDQ program framework will help us to sustain steady, controlled growth. We have stability in the resource, subject to the conditions in the Bering Sea. We have stability in CVRF governance, subject to the wishes of our communities. We have stability in our autonomy as it relates to CDQ oversight, subject to the work of the CDQ Panel. We have stability in our benefit delivery programs, subject to the desires of our region residents. Steady growth will broaden each of the CVRF programs, providing more jobs, more scholarships, more support, and in short, more opportunities. The accountants tell us that we are now in control of well over one hundred million dollars in assets. While that is a great achievement that stands as a pleasing measure of financial strength, we must continue to promote controlled, steady growth. We have only begun to scratch the surface of CVRF’s potential to serve its communities and people. I would like to thank each and every person for their part in getting us to where we are, and I challenge everyone to recommit to the next test. Our Board and the CVRF Staff are highest on the thank you list for 2006! It is my hope that Steven would be proud of our 2006 operations. There isn’t anything we can’t do if we support each other as we did in 2006.

Morgen Crow, Executive Director COASTAL VILLAGES REGION FUND




Board of Directors Board Member Oscar Evon, President Timothy Samson, Vice President John O. Mark, Secretary Eric Olson Sr., Treasurer Paul Tulik, Executive Committe Member Nicholas Paul, Executive Committe Member Ralph Kiunya, Executive Committe Member Andrew Boyscout William “Charlie”Brown Evan S. Evan

Community Kwigillingok Kipnuk Quinhagak Hooper Bay Nightmute Napakiak Kongiganak Chevak Eek Goodnews Bay

Board Member Daniel Olrun Sr. Helen Kaganak Peter John Frank Berezkin John Bright Homer Hunter Jr. Willie Charlie Gabriel Olick Felix Albert

Community Mekoryuk Napaskiak Newtok Oscarville Platinum Scammon Bay Toksook Bay Tuntutuliak Tununak

Top Row (left - right): John Bright, Helen Kaganak, Evan S. Evan, Gabriel Olick, Andrew Boyscout, Oscar Wassillie, Morgen Crow, Felix Albert, Daniel Olrun Sr., Homer Hunter Jr., William Brown, Frank Berezkin Bottom Row (left - right): Ralph Kiunya, Paul Tulik, Timothy Samson, Oscar Evon, John O. Mark, Eric Olson Sr., Nicholas Paul, Peter John

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Top Row (left - right): Morgen Crow, Paul Tulik, Ralph Kiunya, Nicholas Paul, Eric Olson Sr. Bottom Row (left - right): Timothy Samson, Oscar Evon, John Mark


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Coastal Villages Seafoods On-Shore/Near-Shore Development

Overview: Coastal Villages Seafoods (CVS) is the CVRF subsidiary that owns and operates commercial fishing and processing operations in our member communities. CVS had a great year in 2006, marked by the continued growth of CVS operations, particularly with respect to employment opportunities for our residents on fishing vessels and in our plants.

Halibut Fisheries Local halibut fishermen had their most successful season in recent memory harvesting 240,974 lbs of CVRF’s 4E quota. Ground prices were the highest they have ever been, at $2.50 per pound shoreside and $2.25 per pound for tender deliveries. These prices were $.50 more per pound than in 2005 and $1.25 more per pound than in 2004 or 2003. Western Alaska experienced a colder than normal spring which affected fishing and processing operations. At the beginning of the season, CVS had problems with snow pack at the plants, frozen water lines and a fleet that could not get out to the halibut grounds. Once the ice receded, fishermen landed near record amounts of halibut.

Location

Harvest (lbs) 2002

2003

2004

2005

2006

Chefornak

2,874

1,024

5,548

6,974

12,993

Mekoryuk

156,432

83,531

96,784

117,270

86,658

1,534

766

1,034

1,505

966

Toksook Bay

59,801

65,302

17,580

62,726

90,110

Tununak

Quinhagak

33,580

20,009

8,176

18,696

34,067

S.Nunivak Tender

-

-

22,864

-

11,701

Hooper Bay

-

1,747

43

1,627

418

Kipnuk

112

4,750

1,745

1,146

4,061

TOTAL

254,333

177,129

153,774

209,944

240,974*

*all of the 4E halibut quota was taken this season

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Coastal Villages Seafoods On-Shore/Near-Shore Development

Volumes increased at several plants and we look forward to this continuing in the 2007 fishing season. The fishermen who delivered to CVS made more during 2006 than in previous years even with higher fuel prices. Demand has been excellent for CVS halibut due to the high quality of our product. CVS only purchases #1 halibut from fishermen and this is reflected in the market price received for sales. CVS is aiming to further increase the volume running through these six plants which should reduce operating losses and help in eventually making these plants self-sustaining.

Salmon Fisheries The Quinhagak processing plant had a record year, purchasing 1.8 million pounds of salmon from resident commercial fishermen. The CVS Quinhagak plant purchases product in Districts W4 and W5. The first opener was June 15th for Kings and the last was September 1st for Coho’s. This record production put cash in fishermen’s pockets, paid plant workers for overtime, and provided more high quality product to CVS customers. Where do the CVS Quinhagak plant workers come from? During 2006, the plant employed 165 workers from Chefornak, Chevak, Eek, Hooper Bay, Kipnuk, Kongiganak, Kwigillingok, Napakiak, Napaskiak, Newtok, Quinhagak, Scammon Bay, Toksook Bay, Akiachak, Bethel, Kalskag, Kasigluk, Kwethluk, Lower Kalskag, Mountain Village, Nunapitchak, and Pilot Station. The CVS Quinhagak plant may have the highest percentage (nearly 100%) of Alaskan residents of any major fish processing plant throughout Alaska. Where do our District 4 and District 5 fishermen come from? During 2006, the CVS Quinhagak plant purchased salmon from 155 permit holders from Eek, Goodnews Bay, Kongiganak, Kwigillingok, Napakiak, Oscarville, Platinum, Quinhagak, Toksook Bay, Tuntutuliak, Akiachak, Aniak, Bethel and Atmautlauk. CVRF is extremely pleased to be able to provide good markets to these hard-working residents of Western Alaska.

Herring Fisheries Herring fishermen from our region harvested 416 tons (832,000lbs) of herring in the Kuskokwim Herring Districts. The Cape Avinof district was not opened due to lack of participation, and the Nunivak Island was not opened for commercial harvest. Working with Norquest, CVS paid region fishermen a total of $78,000 for herring harvested in 2006. The following is a summary of the activity for 2006. District

Quota (tons)

Harvest

Roe %

Nelson Island

562

260

10.88%

Cape Avinof

105

0

-

Cape Romanzof

609

92

10.07%

Goodnews Bay

822

64

9.64%

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Fisheries Support On-Shore/Near-Shore Development

Goodnews Bay Salmon Plant Project Overview: The 2006 salmon fishing season produced record numbers of salmon for CVS. The Quinhagak plant was running at maximum capacity for the majority of the season and as a result, limits had to be placed on fishermen, resulting in less income for fishermen and fewer opportunities for processing salmon. In 2006, CVRF began planning the construction of a new regional salmon processing plant. The new plant will allow for more deliveries of fish and will create more jobs in the region. The site for the new plant is located on the South Platinum Spit and is scheduled to open at the beginning of the 2009 season. Donation of Site: The City of Platinum is donating property to CVRF for the plant. The transfer of the property to CVRF is expected to occur in 2007. The design of the processing plant and dining/housing complex will begin in 2007, as will work on the design options for the power plant and water and sewer systems.

Tununak Halibut Plant Construction of the new Tununak halibut plant began in late 2006. The new plant was determined to be more cost effective and feasible than performing repairs on the existing halibut plant. The new halibut plant is set to be in operation for the 2007 fishing season.

Fisheries Support Centers (FSC’s) Overview: CVRF believes in providing FSC’s in our communities to allow our fishermen and residents to repair their boats and motors indoors. Each FSC is expected to have a mechanic/welder to assist fishermen and provide the necessary skills for repairs and additional services. Construction: Prior to 2006, two fisheries support centers were constructed and operating in the communities of Eek and Scammon Bay. During 2006, fisheries support centers were built and became operational in Hooper Bay, Toksook Bay, Kongiganak, and Kwigillingok. During 2006, the construction of four additional FSCs began in Chefornak, Nightmute, Mekoryuk, and Tununak but severe winter weather delayed completion. All four of these additional FSCs are expected to be operational in 2007, bringing the total number of CVRF FSCs to ten.

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Fisheries Support On-Shore/Near-Shore Development

There are seven FSCs in the works for the future, in Chevak, Goodnews Bay, Napakiak, Napaskiak, Kipnuk, Quinhagak, and Tuntutuliak within the next two years.

Collaborative (Applied) Fisheries Research: In 2006, CVRF provided direct support to the Kuskokwim Native Association for the George River weir in the form of funding for local staff and fuel. CVRF also directly provided support to the Takotna Tribal Council for the Takotna River weir. CVRF worked with the Native Village of Kwinhagak in support of the Kanektok River weir in 2006 as well. CVRF had agreed to provide half of the salaries for two weir technicians (local hire) who were to work at the weir. However, the weir was damaged during breakup, and instead CVRF provided funding for the local reconstruction of the weir in the fall of 2006. The Kanektok River weir is in place and ready for use in 2007 CVRF staff is also working with the Alaska Department of Fish and Game for continued support for salmon counting weirs on tributaries of the Kuskokwim River and Kanektok River. Grant support for these projects is under consideration.

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Vessels / Barges

On-Shore/Near-Shore Development

CVS BULK TRANSPORTATION FLEET As we continue construction of facilities to grow and support our local fisheries economy, the need for additional capacity to deliver freight and supplies to and from the CVRF region is ever increasing. In order to meet those needs, CVRF has acquired a number of vessels and barges. The vessels include the F/V Kelly Mae (135’), M/V Blarney (103’), and the M/V Leo (73’). The barges include the Gildy Logger (155’) and the NP1 (110’).

PROFILE - F/V KELLY MAE Year Type Hull Gross Tonnage Length Draft Hailing Port Top Speed Cruise Crew

1958/2006 LCU Steel 146 135’ 4’ 8” Quinhagak, Alaska 14.5 knots 12 knots 4-10

PROFILE - M/V BLARNEY Year Type Hull Gross Tonnage Length Draft Hailing Port Top Speed Cruise Crew

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1945 Tug Boat Steel 194 103’ 13’ TBD 10 knots 9 knots 4-10


Vessels / Barges

On-Shore/Near-Shore Development PROFILE - M/V LEO Year Type Hull Gross Tonnage Length Draft Hailing Port Top Speed Cruise Crew

1965/2006 Pusher Tug/LCM 8 Steel 64 73’ 3’ 6” Anchorage, Alaska 10.5 knots 9 knots 4-5

PROFILE - GILDY LOGGER Year 1955 Type Barge Hull Steel Length 155’ Draft Unloaded 2’ Loaded 8’ Hailing Port TBD

PROFILE - NP1 Year 1946 Type Barge Hull Steel Gross Tonnage 99 Length 110’ Draft Unloaded 18” Loaded 5’ 6” Hailing Port Napakiak, Alaska

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Quinhagak Airport On-Shore/Near-Shore Development

Quinhagak Airport Extension - 2006 Record Salmon Production

I

n 2006, CVRF made use of the newly-extended runway in Quinhagak to ship significantly more high quality salmon from the Kuskokwim fisheries out to Anchorage and markets beyond. The Quinhagak runway expansion was completed in 2005 as a cooperative venture between the Economic Development Administration (EDA) and CVRF, with support from the Native Village of Kwinhagak. CVRF provided the matching funds to secure a federal EDA grant for the runway. $1.5 million was invested to extend the runway an additional 800 feet, providing a total of 4,000 feet of runway. With the longer runway, CVRF began using larger cargo planes in 2006 to more efficiently haul Kuskokwim salmon out of the region. On June 22, 2006, an Evert’s Air Cargo DC-6 flew 24,000 pounds of packaged salmon out of Quinhagak, the most ever on a single flight from Quinhagak. Thereafter, CVRF also used Universal Airlines to haul fish from the plant. The CVRF/CVS Quinhagak salmon plant can only freeze a limited number of fish per day, so flying the fresh fish to market was critical to expanding production. With the longer runway and bigger planes, CVS was able to purchase more fish and put fishermen on fewer limits in 2006 than in any previous year. The result meant more cash to Kuskokwim fishers and to the workers at the CVS Quinhagak plant. The 2006 season saw a record production of 1.8 million pounds of salmon from districts W-4 (Quinhagak) and W-5 (Goodnews Bay). CVS management is looking forward to another successful season in 2007, and is exploring the use of a third air carrier to allow even more salmon to be produced by the CVS Quinhagak plant.

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CDQ year Summary Off-Shore Fisheries/Investments

QUOTA MANAGEMENT For the year 2006, the total CVRF CDQ total allowable catch was 41,102 metric tons. Of this amount, 99% was harvested and brought to market. The chart below illustrates the harvest by species group.

In the annual evaluation of the Bering Sea commercial fisheries, the biologists and the North Pacific Fishery Management Council recommended that the 2007 total allowable catch (TAC) for pollock, pacific cod and sablefish be reduced, while the various flatfish species were increased and crab remained about the same. The chart below illustrates the resulting changes for CVRF.

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4-SITE

Human Resource Development 4-SITE -SCHOLARSHIPS, INTERNSHIPS, TRAINING, EMPLOYMENT

Scholarships:

During 2006, CVRF provided an increase in scholarships awarded by the Louis Bunyan Memorial Scholarship (LBMS) program. CVRF awarded $355,700 in scholarships to 91 region residents for college and technical school attendance. The CVRF budget was increased from a starting point of $200,000 in order to accommodate the growing need for scholarships by qualified region residents. LBMS students are attending colleges and technical schools that include Alaska Pacific University, Alaska Vocational Technical Center, Central Washington University, Lake Superior University, Take Flight Alaska, Tulsa Welding School, Yuut Yaqungviat and University of Alaska campuses in Anchorage, Fairbanks, and Bethel. If you have any questions about the LBMS program or would like an application please contact your local CVRF office or the Anchorage CVRF office at 1-888-795-5151.

Internships: CVRF continues to offer a variety of internship

opportunities. One recent success story is Wayne Phillip, from Kongiganak, who completed an internship at Coastal Villages Seafoods’ Quinhagak plant during the 2006 season. Wayne is a former LBMS scholarship recipient who majored in Rural Development through the UAF/KUC distance learning program. Wayne was hired in the Anchorage CVRF office as an account clerk. For the 2007 season he will be returning to the Quinhagak plant office. Wayne is becoming a great asset to the region as a result of his internship training. CVRF provided a total of six intern positions during 2006.

Training: During 2006, CVRF recruited and hired four region residents

for a new shipyard apprentice program. CVRF’s fleet manager is working directly with the four residents at a Seattle shipyard where they are learning welding, ship yard labor, and vessel maintenance skills. Upon successful completion of training in the shipyard, the four will begin work aboard the F/V Kelly Mae and M/V Leo, where their training will continue. Ultimately, CVRF’s goal is to help residents to successfully develop the basic welding, vessel maintenance, and other skills that are complimentary to the fishing economy we are developing.

Employment: Since 2001, the CVRF Employment Program has

provided approximately 1,900 residents with fishing industry jobs with CVRF, our subsidiaries and our fishing industry partners. During 2006, we provided 362 new applicants with jobs at CVRF/Coastal Villages Seafoods plants or with our partners. The CVRF Employment Program has dedicated staff who travel throughout the region and nearby communities actively recruiting to fill the fishing industry jobs that open up. In 2006, 52 people earned $782,000 in wages working at jobs out on the Bering Sea, and 328 people earned $1,095,000 working at jobs in the CVS region and other shore-side plants.

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Loan - Tax & Permit Fisheries Support and Development

Commercial Fishing Loan Program The CVRF Commercial Fishing Loan Program assists region fishermen to enter commercial fisheries and with replacing and upgrading commercial fishing gear and equipment. Loans are granted for boats, motors, gear, safety equipment and for the purchase of halibut or sablefish quota. In 2006, CVRF provided new loans totaling $118,750 to 11 residents. Currently 78 residents have active loans with CVRF. Applicants to the loan program are individually assessed on dependability, ability to make loan payments, fishing history with Coastal Village Seafoods, and other factors. The goal of the program is to help the fishermen to be self-sufficient. Approved applicants are educated on the risks and responsibilities of borrowing before they receive the loans. Many current and former loan recipients are among the best of our CVS fishermen, continually bringing in some of the highest catches for their areas. Loan program availability continues to be advertised throughout the region with flyers, newspaper ads, and local announcements. CVRF staff members provide loan program applications upon request, and can assist residents in completing individual applications if needed. The deadline for each loan period is October 15 of each year. If you are or considering becoming a commercial fisher and are in need of a loan to do so, please contact your local CVRF office or the CVRF Anchorage office at 1-888-795-5151.

Tax and Permit Assistance Program CVRF pays for the Volunteer Income Tax Assistance Program (VITA) through the Alaska Small Business Development Center and the University of Alaska Anchorage. This program enables accounting students and business professors to travel to all of the CVRF member communities and conduct free tax preparation sessions for residents. Most returns are electronically filed so refunds are received as soon as possible. This program assisted 3,265 region residents in preparing their tax returns and in receiving over $2,054,615 in tax refunds in 2006 alone. The VITA program is one of the most cost-efficient ways CVRF has of directly assisting residents, with a cost of less than 3.5 cents for every dollar that CVRF residents received in refunds.

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Project HaullyWOOD Community Development

Project “HaullyWOOD” is a new CVRF program that began in 2006 after a survey of our communities identified the potential value of wood deliveries to help offset the high cost of heating fuel. In August 2006, CVRF purchased thirty bundles of sprucebeetle wood weighing 318 tons (approximately 700,000 pounds) in Homer, Alaska. This wood was then loaded onto a CVRF barge, hauled by a CVRF tug boat, and eventually delivered to nine CVRF communities who were selected based on their willingness to handle and utilize the wood deliveries. The wood was delivered in bulk to Napaskiak, Eek, and Kipnuk, and from these drop-off points was then made available to six additional communities. In each community, the wood was given to the local governing body to then distribute within the community. Project HaullyWOOD was not a significant part of CVRF’s 2006 budget, but seemed to have a significant impact. The firewood came as a pleasant surprise for residents, provided extra heat energy in our communities, and reduced the amount our residents had to spend in 2006 on heating oil. CVRF plans to continue Project HaullyWOOD in 2007. The CVRF Board is looking at ways to expand the wood deliveries to more communities, while continuing to rely on CVRF’s own vessels to help keep bulk transportation costs low. Delivery Point

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Additional Communities Served

Napaskiak

Napakiak

Oscarville

Eek

Quinhagak

Tuntutuliak

Kipnuk

Kwigillingok

Kongiganak


CDQ Project Fund Community Development

The CDQ Project Fund was created in November 2005 by the CVRF Board of Directors. The Board approved an initial budget of $1,000,000 over three years for this program. Each community’s budget is based on a formula that includes a fixed base benefit (the same for each village), plus an amount based on the population of the community. The primary focus is on fisheries-related economic development and projects related to local fisheries. However, any project that has an overall economic benefit to the community can be considered. Funds will be distributed each year, and cannot be carried over to the next year. CVRF is hopeful that the CDQ Project Fund will have lasting positive effects for years to come. By investing in our communities, we are investing in the future. CVRF recognizes the need to build strong, diverse, and self-sustaining economies to survive the high cost of living, high unemployment rates, and other economic challenges our communities face.

Approved Projects: Trail Markers & Survival Shelters Project: Kipnuk, Kongiganak, Kwigillingok, Tuntutuliak, and Napakiak are working together on this safety project to provide trail markers along the trails that connect the communities, as well as new self-contained survival shelters. The new shelters will be strategically placed along the trails, and include replacement of some existing dilapidated safety shelters for travelers. The project is being considered for expansion in 2007 to trails that connect other communities in the CVRF region. Community Infrastructure Projects: The CDQ Project Fund was used in 2006 for a number of community infrastructure projects in CVRF villages. In two communities, existing buildings were renovated to serve as the village public safety office and as the local jail. In another community, funding was approved in 2006 for an existing building to be renovated to provide additional housing in the community. One community is using the 2006 CDQ Project Fund to upgrade the fence and boardwalk around its dump site to improve safety for the residents. In another community, the funds are being utilized to complete a boardwalk around the community. Community Clean-Up Projects: The CDQ Project Fund also provided funding in 2006 for clean-up projects in a number of communities done by local youth residents. Youth participants cleaned trash and other debris in the communities, including around the local fishing areas. Prizes and celebrations were held after the projects were completed, and one community gave away marine safety equipment as prizes.

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nue

Financials 2006 FINANCIAL OVERVIEW 2006 was another successful year for CVRF. With total revenue of $32.7 million and expenses of $30.9 million, net assets, a measure of a company’s net worth, equaled $86.0 million at the end of 2006, an increase of 2% from 2005.

$ 14,265,471 5,512,376 Nearshore Seaf $ eafood Sales $ 4,247,597 $ 933,985 nings $20064,979,862 Revenues t and Interest $ 2,139,905 $ 32,079,196

Royalties 44%

and Expenses

2006 Revenue By Category

Revenue

ties number above includes CDQ Royalties ies and Inshore non-CDQ&lease fees. Nearshore Seafood

Offshore Seafood Sales Equity Earnings Investment and Interest Other Total Revenue

Expenses

Sales

$ 14,270,000 5,520,000 4,260,000 4,980,000 2,140,000 930,000 $ 32,100,000

2006 Revenues and Expenses

Inshore & Nearshore Seafood Sales 17%

Investment and

Inshore and Nearshore Operations $ 9,030,000 Interest 7% Construction 6,800,000 Offshore Operations 3,920,000 Revenue Fisheries Support and Development 3,180,000 Equity Earnings Royalties $ 14,270,000 xpenses 16% 4-SITE 1,760,000 Sales 5,520,000 -SITE Inshore & Nearshore Seafood 1756694 930,000 OutreachOutreach 934100 Offshore Seafood Sales 4,260,000 DQ Management 872625 CDQ 870,000 EquityManagement Earnings 4,980,000 General General & Administrative 3609835 & Administrative 3,610,000 Investment and Interest 2,140,000 isheries Support and Development 3175046 Other 930,000 Total Expenses $ 30,100,000 nshore and Nearshore Operations 9014505 Total Revenue $ 32,100,000 Inshore and Offshore Operations 3912420 onstruction Increase2006 in NetExpenses Assets $ 2,000,000 Nearshore By6803158 Category Expenses

Increase in Net Assets

24

2006 Expenses Other 3%

Offshore Operations 13%

Operations 29%

30078383

Inshore and Nearshore Operations Construction Offshore Operations Fisheries Support and Development 4-SITE Outreach CDQ Management General & Administrative Total Expenses

Offshore Seafood Sales 13%

$ 9,030,000 6,800,000 3,920,000 3,180,000 1,760,000 930,000 870,000 3,610,000 $ 30,100,000 $ 2,000,000

Construction 23%

4-SITE 6% Fisheries Support and Development 11%

Outreach 3% General & Administrative 12%

CDQ Management 3%


Financials Assets

Cash & Investments 18%

Receivables & Other 3% Investment in Fishing Affiliates 45%

Buildings & Plants 4%

Assets by Category

Vessels 12%

Equipment 1%

In 2006, CVRF CDQ projects were directly responsible for $26.5 million of economic activity. These in-region projects and programs are dependant on stable investments in and harvests of Bering Sea resources. Company assets have also grown considerably, from $7.5 million in 1998 to Growth of $110.9 million in 2006. Our main goal continues to be to establish a solid financial footing so that we can deliver, on a sustainable basis, economic development projects to our twenty communities now and in the future.

Investment in Fishing Quotas 17%

Net Assets $100,000,000 $90,000,000 $80,000,000 $70,000,000 $60,000,000 $50,000,000

Growth in Net Assets

$40,000,000 $30,000,000 $20,000,000 $10,000,000

1996

1998

2000

2002

2004

$2006

25


CDQ Royalties by Species Pollock Pacific Cod Red King Crab Opilio Crab Other

$ $ $ $ $ $

11,731,200 574,774 647,618 335,344 376,974 13,665,910

Financials Opilio Crab 2% Red King Crab 5%

Community Development Quota Royalties One of the largest sources of revenue for CVRF is CDQ royalties. The purchase of the Sea Boats Crab vessels has allowed for the internal harvesting of our crab allocation. CVRF continues to explore other methods to maximize the value of its CDQ allocation. In 2006, our industry partners harvested 99 percent of our allocations. Harvesting partners in 2006 were: CDQ Allocation Pollock Crab Pacific Cod Groundfish Halibut/Sablefish

Pacific Cod 4%

Harvesting Partner American Seafoods Company Sanko Fisheries, Silver Spray Seafoods and Sea Boats Crab Pacific Longline Company U.S. Seafoods Shemya Fisheries

2006 Season Highliners

Fishermen from the CVRF region are the lifeblood of the CDQ program. Highliners are fishermen who catch and deliver the most fish throughout the season. The 2006 highliners for our halibut and salmon operations were: Halibut Robert J. Pitka Sr. David Bill Sr. Frank Pitka Lindgren Mathlaw Phillip Tulik*

Toksook Bay Toksook Bay Toksook Bay Mekoryuk Nightmute

Salmon Frank James* Samuel Martin Peter Mathew Walter Ayojiak Walter J. Johnson

Quinhagak Goodnews Bay Quinhagak Goodnews Bay Quinhagak

Phillip Tulik of Nightmute and Frank James of Quinhagak have been highliners for two years in a row!

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Other 3%

Pollock 86%


Coastal Villages Region Fund Staff Executive Office Morgen Crow Robert Williams Patty Murphy Darla Graham

Programs/Human Resources Development Ronalda Olivera Candice Cheshire Dawson Hoover Mae Hank Gretchen Williams

Program Director Human Resources Director Development Coordinator Program Administrator Program Assistant

Community Program Managers Lloyd Black Stella Alexie

Napakiak Eek

Community Liaisons Nellie Abraham Clifford Paniyak Bessie Galila Amanda Hoelscher Steven Stone Chris Dock Darlene Daniel Liane White Laura Evan Lisa Charles Grace Friendly Abraham Rivers Mary Abraham Nick David Jr. Theodore Angaiak

Chefornak Chevak Goodnews Bay/Platinum Hooper Bay Hooper Bay Kipnuk Kongiganak Napakiak Napaskiak/Oscarville Newtok Quinhagak Scammon Bay Toksook Bay Tuntutuliak Tununak

Executive Director Deputy Director Executive Administrator Administrative Assistant

Fisheries Development Joe Hall Kevin Kennedy Peter Speaks Larson Hunter Nicholas Souza Marlene Kiokun Riley McVitty

Fisheries Manager Vessel Manager IT Specialist Fisheries Coordinator Purchasing Manager Administrative Assistant Expeditor

Projects/Infrastructure Development Paul Varady Ted Wittenberger Michael Bird Terry Smith George Smith Theodore Brown Paul Joe Jr. Joe Joseph Herman Beaver Jacob Rivers

Department Director Special Projects Director Senior Project Manager Project Manager FSC Superintendent FSC Mechanic - EEK FSC Mechanic - HPB FSC Mechanic - KKH FSC Mechanic - KWK FSC Mechanic - SCM

Accounting/Finance Larry Warner Jenny Koenig Shellie Johns Catherine Robeson Beverly Evans Wayne Phillip

Controller Investment Analyst Senior Accountant Staff Accountant Payroll Specialist Accounting Clerk

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Coastal Villages Region Fund 711 H Street, Suite 200 Anchorage, Alaska 99501

Toll Free: (888) 795-5151 Phone: (907) 278-5151 Fax: (907) 278-5150

www.coastalvillages.org

Profile for Coastal Villages Region Fund

2006 Annual Report  

2006 Annual Report  

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