Dismal fishing year trickles down

Cook Inlet Aquaculture Association feels sting of 1998 fishery disaster

Posted: Tuesday, March 07, 2000

Dismal Cook Inlet salmon returns in 1998 hurt area salmon fishers, and now the effects are trickling down to the Cook Inlet Aquaculture Association.

The association projects a budget shortfall of about $307,000 for the fiscal year that ends June 30, said executive director Gary Fandrei. He said it still hopes to raise about $57,000 in June. To make up the rest, it has applied for a $250,000 loan from the state's Fishery Enhancement Revolving Loan Fund.

Ladd Macaulay, a loan officer with the state Division of Investments, said loans from the fund have a 25-year term, with no payments and no interest for the first six years. The interest rates are variable, but the present rate is 9.5 percent. Fandrei said he expects to know by the end of the month whether the loan is approved.

"I think we're going to make it through," he said. "We may have to really tighten our belts."

The association consolidated operations several years ago to bring its budget under control, and Fandrei said he is comfortable with the results. Last year, the association nearly broke even.

"The 1998 fishing season was pretty much a disaster," he said. "The 1998 season was unexpected. We didn't think it would be that bad. It set us back a couple of years."

Cook Inlet Aquaculture raises pink salmon at Tutka Bay Hatchery in Kachemak Bay and sockeye and coho salmon at Trail Lake Hatchery in Moose Pass.

It releases pink salmon in Kachemak Bay and sockeye salmon at sites from lower Cook Inlet to Tustumena and Hidden lakes on the central Kenai Peninsula, Big Lake near Wasilla and Bear Lake near Seward. Its releases produce about a tenth of the Cook Inlet pink and sockeye catch, Fandrei said. In cooperation with the Seward Chamber of Commerce, it releases coho salmon to Bear Lake, producing about half the stocked coho catch in Resur-rection Bay.

The association generally receives about half its revenues from a 2 percent enhancement tax on the money paid to commercial fishers for Cook Inlet salmon, he said. The money comes about a year after each fishery.

In 1998, upper inlet commercial fishers earned just $9.5 million for their catch, the poorest paycheck since 1975. Cook Inlet Aquacul-ture had budgeted tax revenues of $450,000 from the 1998 fishery, Fandrei said, but last August, it received a little less than $193,000.

The association also earns money by catching and selling some of the returning hatchery salmon. Such cost-recovery fisheries produced about $764,000 in revenues last year, Fandrei said, and the association still expects about $57,000 this June from a cost recovery fishery at Bear Lake. It also earns a small amount of interest each year.

However, its operating budget totals about $1.5 million, and this year, its revenues are coming up short

On top of that, Fandrei said, many processors have had trouble selling the 1999 catch, and several have not yet paid for all of their cost-recovery fish. Cook Inlet Aquacul-ture is still waiting for about $130,000 of the $764,000 it should have been paid for the salmon it sold last year.

"I think it's a matter of when we'll get paid, not whether we'll get paid," he said.

Cook Inlet Aquaculture built the Eklutna Hatchery in 1982 and used it to produce chum salmon for the Eklutna area. It assumed operation of the state's Trail Lake Hatchery in 1988 and of its Tutka Bay Hatchery in 1991.

In the early 1990s, when the state closed its Big Lake Hatchery, the association switched the Eklutna Hatchery to sockeye salmon and took over the state's Big Lake sockeye program. It assumed operation of the state's Crooked Creek Hatchery.

However, the hatcheries cost several hundred thousand dollars apiece to run. About 1996, the association began looking for ways to tighten its budget.

"Hatcheries work best if you fill them up," Fandrei said. "So, we cut a few programs and moved almost everything to Trail Lakes."

Tutka still produces pink salmon, but the association gave Crooked Creek Hatchery back to the state in 1997 and moth-balled Eklutna Hatchery in 1998. Since 1996, it has laid off four employees and left one position vacant, Fandrei said. It now employs eight full-time workers and 20 or 25 seasonal workers.

Recently, Fandrei has been talking with the Division of Sport Fish about the possibility of trading Eklutna Hatchery to the state in return for ownership of the Trail Lake Hatchery. Eklutna would be an ideal place to produce coho salmon for the Anchorage bowl, he said.

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