Community thinks about how to spend a windfall

Posted: Sunday, July 21, 2002

Elfin Cove is so small that it behooves the community council to hold meetings in the summer, when it can be sure of a quorum of seven. But the fishing village and tourist spot soon will get about $577,000 in federal funds to spend as it likes.

Elfin Cove, 70 miles west of Juneau on Chichagof Island, is one of seven Southeast communities that will share about $3 million in compensation for the phaseout of commercial fishing in Glacier Bay.

"That's a goodly wad - half a million bucks is nothing to sneeze at," said Jim Wild, chairman of the Elfin Cove Community Council. "That'll go a long ways toward something."

The National Park Service, which is managing the compensation program, will send the funds to the local government if the community is incorporated, or to a nonprofit community association if it's not.

The latter situation is the case in Elfin Cove, winter population 15 to 30, and Gustavus, with about 430 residents. Also receiving compensation are the municipalities of Haines, Hoonah, Pelican, Petersburg and Sitka.

Congress voted in 1998 to close some fisheries and some areas of the bay to commercial fishing, and allow three fisheries to continue for a final generation of qualifying participants. After those fishermen retire, the bay, which is the centerpiece of Glacier Bay National Park and Preserve, no longer will support commercial fisheries.

Congress authorized $23 million in compensation to fishermen, deckhands, processors, slime line workers, other businesses, and the communities themselves.

The community compensation includes funds to make up for lost fish taxes in municipalities, which receive a share of a state tax on landed fish. The compensation also is intended to account for the economic impacts the communities face from losing a source of jobs, local spending and sales taxes.

"I really believe it's (the closure) made a big change in the community in a lot of respects. Just the whole idea of a historic fishing community - it's basically gone," said Judith Challoner-Wood, a member of a compensation task force created by the Gustavus Community Association.

Gustavus, seven miles from the bay, is home to Glacier Bay National Park's offices. But the bay also supplied about 20 percent of the local commercial fleet's catch, and about 45 percent of the locally processed fish, according to park service figures.

Two processors folded and some fishermen have moved away or now compete against other locals in the tourism industry, Challoner-Wood said. The school, which once had 82 students, now has half that number.

"It's a whole psychology of losing key people who were part of the community," she said. And "it's kind of like our economic underpinnings have gotten shaky."

The park service this spring announced preliminary figures for payouts to the successful applicants. But no compensation has been paid yet because the agency is considering appeals by applicants who got nothing or less than they felt entitled to.

The park service will hold hearings for appellants between mid-August and the end of September, and decide the appeals soon after that, said Ralph Tingey, the agency's associate regional director.

Meanwhile, some of the communities due to get compensation have started to talk about how to spend the money, and others are holding off until they have it in hand.

"Until we have the money, it's not worth discussing," said Johanna Dybdahl, a member of the Hoonah City Council. Hoonah is expected to get about $920,000, according to preliminary estimates.

Gustavus will get about $963,000. The Gustavus Community Association is accustomed to overseeing government-like activities with state assistance of less than $20,000 a year, supplemented by occasional state grants to repair or build projects, said Greg Streveler, the association's new chairman.

"Compared to anything we've ever gotten before, it's monstrous," he said.

The community decided last month to invest the money conservatively for a year while it figures out how to spend it, said Challoner-Wood, who is on the compensation task force.

So far, ideas include spending only the interest each year on community functions such as the library or the clinic, buying shares in the federally managed halibut and black cod fisheries and leasing them to local fishermen, and building a teen center and a swimming pool, Streveler said.

The community likely will vote in a referendum on how to spend the money, Challoner-Wood said.

"It's really a unique opportunity for the community to rise to the occasion and come together in a new way to decide what to do with it," she said. "I'm hoping there's not going to be trouble. ... Whenever there's a bunch of money thrown around, it gets people going and it can be contentious."

The Elfin Cove Community Council has held two special meetings this summer to talk about the anticipated $577,000 in compensation, and will meet again later this month, said chairman Wild. The topic also has arisen in regular monthly meetings. Elfin Cove is used to getting $3,000 to $5,000 a year in state municipal assistance.

"We've worked up the wish list to use the money for," he said. "Nothing's cast in stone yet. Everything's wide open. We're still at the discussion stage of things."

Proposals include buying tidelands near the community-owned fuel tank farm, to save the cost of leasing them, a cost that is passed on to fuel buyers at 8 cents a gallon.

Other ideas include buying an ice plant to serve the commercial and charter fishing fleets, building public toilets and showers, improving the community's solid-waste and sewage systems, and buying emergency medical equipment, Wild said.

Elfin Cove, like Gustavus, also has considered investing the money, and has talked about buying shares in the federal halibut and black cod fisheries and leasing them to fishermen.

The decision about what to do with the money is likely to be made by the registered voters in the community, Wild said. And it's likely to be made in the summer, when the population swells to hundreds a day, some of whom are registered to vote there.

"We need seven people for a quorum. No fooling - by October it's tough to find a quorum," Wild said. "We're trying to involve as many people as we can in the process."

The amount of community compensation may change after the park service hears the appeals.

Pelican Seafoods, a major processor there, didn't receive compensation because its application was incomplete, park service officials said. A successful appeal would change that community's and other communities' compensation as well.

And Petersburg, about 150 miles from the bay, has challenged the agency's method of calculating compensation, in which proximity to the bay was a major factor.

The formula also factored in the number of Glacier Bay fishing permits held by residents, and the percentage of residents' catch and local processing that came from the bay.

There were more people in Petersburg who would no longer qualify to fish during the phaseout than in Gustavus, Pelican or Hoonah, according to an economic assessment of the compensation plan by the Juneau-based McDowell Group.

But Petersburg will get about $56,500 in compensation, under the preliminary estimates, compared to $963,000 for Gustavus. Petersburg also will get about $47,000 to compensate for lost fish taxes.

"Our whole thing was we weren't satisfied with how the money was split between communities, and we wanted to offer support to our processors and fleet," said Petersburg City Manager Bruce Jones. The park service "should have put a little more time in before they decided what to do."

But the park service reasoned that proximity to Glacier Bay was an important factor because it affected how much money was spent in communities by fishermen for fuel and grocery sales and at other businesses.

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