Knowles to seek low-interest loans

Fishing disaster denied

Posted: Wednesday, September 20, 2000

Gov. Tony Knowles' Disaster Policy Cabinet has recommended against declaring a state disaster following dismal returns of upper Cook Inlet sockeye salmon.

However, Knowles will ask the federal Small Business Administra-tion to provide low-interest loans to fishers and businesses hurt by the poor return, said Maj. Gen. Phil Oates, commissioner of the Department of Military and Veterans Affairs and head of the disaster team.

Oates said the administration already has had discussions with the SBA, which appears favorably inclined to declaring an economic injury disaster. An SBA declaration would make the low-interest loans available.

"These SBA declarations must be the direct result of a precipitous natural event, which in this case began with the impact of the 1995 fall flood on salmon spawning grounds in the Kenai River and manifested itself in the year 2000 sockeye salmon return as well as the 1999 coho salmon return," he wrote to Borough Mayor Dale Bagley, who declared a borough disaster Aug. 25 and requested a state disaster declaration and state and federal aid.

Kenai Peninsula Borough Assembly President Bill Popp of Kenai said he was disappointed that Knowles did not declare a state disaster.

"But I believe the SBA loans, which is what we really were going for, are going to move forward," he said. "Based on previous discussions I've had with commercial fishermen, the main goal was to achieve the availability of low-interest loans. In discussions with canneries, that absolutely was a high priority. We haven't seen those yet, but it's looking very, very favorable."

Rob Williams, president of the Kenai Peninsula Fishermen's Association, said he thinks asking SBA to make low-interest loans available is a good approach.

"It's not a handout. It's a loan that can be reimbursed. There are some people who need the money, and I'm glad something will be available to them," he said. "But personally, I have a hard time with the Knowles administration to begin with."

Under Knowles, the commercial season has been cut so short that fishers have trouble making money in anything but a bumper year, he said, and bumper years are few.

If a fisher takes a loan, he said, there is still the question of whether it will be possible to repay. Williams said he probably will tighten his belt rather than take a loan.

"All we want is our fishery back the way it used to be. I thought it was pretty ironic they were asking if we wanted some help -- the same administration that has been putting the squeeze on us," he said.

Oates said he anticipates that Knowles will ask the SBA early next week to declare an economic injury disaster. Then, it should take SBA only a few days to decide, said Herb Johnston, SBA spokesperson in Sacramento, Calif. A declaration would make available 4 percent loans of up to $1.5 million each with terms of up to 30 years.

Before approving a loan, SBA will consider what the applicant's income would have been had the disaster not occurred, what expenses the applicant must meet and whether the applicant likely can repay the loan.

Assembly member Jack Brown of Nikiski said the SBA loans could help a lot of fishers and processors survive. However, he said, he wished the Knowles administration had been willing to declare a state disaster. That might have brought federal aid under the Magnuson-Stevens Act, such as vouchers for food, electricity and other basic needs.

Oates said the disaster team does not believe the Cook Inlet situation warrants a state disaster declaration.

"The DPC acknowledges the severity of the economic hardship caused both by the low salmon harvest in the upper Cook Inlet and the low ex-vessel value of harvested sockeye," he wrote Bagley. "However, the situation did not meet the level of a state disaster for three primary reasons:

"Although commercial fishermen experienced a total catch of less than 50 percent of the long-term average, the economic diversification of the Kenai Peninsula Borough means that alternate sources of income are available to affected individuals and families.

"All fisheries escapement goals were met, subsistence restrictions were not implemented and subsistence was not significantly impacted.

"Alternatives to a state Declaration of Disaster exist to provide your citizens with the types of aid needed, such as loan restructuring and deferments and home energy assistance for low-income families."

The administration also declined requests to declare salmon disasters for the Bristol Bay, Lake and Peninsula and Aleutians East boroughs and Metlakatla, he said.

He said Debbie Tennyson at the Department of Community and Economic Development will be the contact for information about available aid. She can be reached at 842-5135 through Sept. 30 and at 269-8100 after that.

Mark Powell, who owns Alaska Salmon Purchasers in Nikiski, said he does not see the alternate employment Oates seems to think is available to commercial fishers.

"He figures we can all go out and get jobs, or the fishermen can, with the 15 percent unemployment rate in the winter. And (the unemployment rate) doesn't include all those people like me that don't ask for unemployment, so the actual unemployment rate in the winter is actually quite a bit higher," he said.

Powell said he appreciates that Knowles will personally seek aid from SBA. However, when SBA made low-interest loans available in 1998, many fishers did not qualify, he said.

"A lot didn't have enough ability to repay, and a lot had too much ability to repay, in terms of assets," he said. "They didn't fit the criteria for SBA loans."

Johnston said SBA tries to approve as many applications as possible, but there always are some applicants who do not qualify.

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