Facing allegations from community members and a Kenai legislator that it improperly uses gaming revenues to influence fishing regulations, the Kenai River Sportfishing Association struck back last month, saying there's nothing unethical or illegal about the way it conducts business.
KRSA Executive Director Ricky Gease made a report on his organization's activities at the most recent Kenai River Special Management Area Advisory Board meeting. Gease said KRSA's main purpose is to protect the Kenai River and ensure the river remains a viable sportfishing resource into the future.
"Our objectives are to preserve and protect one of the greatest sportfishing rivers in the world the Kenai River through protecting fish habitats, providing education and promoting responsible sportfishing," Gease said.
He said the bulk of KRSA's annual $1 million budget goes toward the expense of running the annual Kenai River Classic fishing tournament and funding habitat, conservation and access projects on the Kenai. He provided an outline of the group's expenses, pointing out that KRSA has contributed nearly $2 million over the past decade toward such projects.
Gease also answered allegations leveled by Rep. Kelly Wolf, R-Kenai, that the group maintains a large fund balance that runs counter to laws on how nonprofit groups can use gaming funds.
He said KRSA does indeed maintain a "continuity fund," but that the practice is common for nonprofits and essential to ensure that KRSA's "ongoing projects will be funded now and forever."
"The purpose of the KRSA continuity fund is to cover administrative and maintenance costs of recurring projects as well as capital costs associated with new projects," Gease said.
Gease further noted that only a small portion of its program expenses budget goes toward work at the Board of Fisheries.
"As a side note, less than 2 percent of our program expenses go to KRSA education efforts at the Board of Fisheries," Gease said.
Following his remarks, Gease briefly allowed KRSMA board members to question him about KRSA's work. That's when things began to get a bit heated, as KRSMA board member Roland Maw questioned the legality of KRSA's use of gaming funds the group raises approximately $150,000 annually from its pull-tab operation and the Classic auction as they relate to the efforts at the board of fish level.
"Is KRSA in compliance with 501(c)3 tax requirements?" Maw asked.
"Yes we are," Gease replied. "We don't engage in political activity other than that allowed by our 501(c)3 status."
Maw then questioned whether the Classic is indeed a fishing derby, something Wolf has in the past questioned because state statutes and the Kenai River Management Plan both regulate how derby monies can be spent.
"Is the Classic a derby?" Maw asked.
"A what?" Gease asked.
"A fishing derby," Maw clarified.
"We are currently in discussions with the Department of Revenue," Gease replied.
In an interview last week, Gease said KRSA is working with the Department of Revenue in order to clarify the Classic's status.
However those discussions turn out, he said he is confident that KRSA is not in any major violations and said there is no doubt the event will continue as planned this summer.
"If we're out of line, let us know, but we don't believe we are," he said.
The issue of whether the Classic is a derby, he said, is not an issue anyway. He said KRSA did not file a report on the Classic as a derby in the past two years simply because it was led to believe by the state that such paperwork was unnecessary. If the state comes back to KRSA and says it needs to file for a gaming license for the Classic, he said the organization would be happy to do so.
"We will definitely be in compliance with anything the state has in terms of the last two years," Gease said.
From Juneau, Wolf said last week he believes the issue is a much bigger deal than KRSA would have people believe. It's his contention, he said, that the real issue is whether KRSA's continuity fund is illegal because state gaming statutes say gaming revenues must be spent within 12 months of being earned.
"Why is Kenai River Sportfishing the only organization not required to follow the gaming rules?" Wolf asked.
Wolf renewed his challenge to KRSA's board of directors to step down in light of the current situation.
"There has been a tremendous amount of rhetoric generated by that board of directors," Wolf said. "That rhetoric needs to end."
Gease said none of the board members have any intention of stepping down. Gease questioned why a public official would call for a private nonprofit board of directors to step aside.
"It's a frightening proposition when legislators think they can wield power over a private organization and dictate who they're going to have on their board of directors," he said.
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