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2005 Annual Report

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2005 Annual Report Norton Sound Economic Development Corporation 2005 Annual Report Brevig Mission • Diomede • Elim • Gambell • Golovin • Koyuk • Nome • Saint Michael • Savoonga • Shaktoolik • Stebbins • Teller • Unalakleet • Wales • White Mountain NSEDC MISSION STATEMENT “NSEDC will participate in and encourage the clean harvest of all Bering Sea fisheries to promote and provide economic development through educa- tion, employment, training and financial assistance to member communities and Western Alaska, while protecting subsistence resources.” RUSSIA U.S.A. RUSSIA U.S.A. Big Diomede Little Wales Diomede Brevig Mission Gambell Teller Savoonga BERING SEA Nome White Mountain Eli Koyuk Golovin NORTON SOUND Shaktoolik Unalakleet Stebbins Saint Michael The Year in Review Message From The Chairman projects as they relate to our current Commission took your comments and mission and methods for delivering incorporated them into a formula for benefits to the region. CDQ Program evolution. NSEDC and the other CDQ groups will be working A fundamental part of this process with these ideas to further develop the is to keep looking to the future to program into a form that will bring the anticipate where the company will be regulatory and statutory ability for us in terms of economic and regulatory to advance how we do business in the capability, and to integrate that with region. After amending the laws that hope the Chairman of the NSEDC the major needs of our communities. I govern the CDQ program, the next step Board of Directors never gets tired of NSEDC has been at the forefront of is to examine how NSEDC interacts with delivering the message that NSEDC has the movement to amend the program its communities. experienced another amazing year of to allow the CDQ program to benefit growth, both in program development the needs of all residents of member One method NSEDC has employed and financial successes. I am pleased communities, fishermen or otherwise. for self-examination is through to report that in 2005, we expanded our As the reality of non-fisheries projects a contract with the University of programs and added nearly $17 million comes closer, the need for corporate Rhode Island (URI) to conduct an to our bottom line. adaptation increases. Many of you will evaluation and create a community- remember meetings of the Governor’s based development plan. All 15 Resting on our laurels is not an option Blue Ribbon Commission held in member communities were visited in with our company growing as it is, NSEDC communities in 2005. The 2005 by the URI research team and and the NSEDC Board of Directors and staff continually strive to match our program delivery with the needs of our NSEDC 2005 Fiscal Year Total Assets member communities. In 2005, your NSEDC Board of Directors amended (in millions) its financial management strategy 100 95 to expend 75% of profits realized 90 from investments (2nd Generation 85 80 Funds), up from 25% in the past. We 75 70 will continue to invest 50% of our 65 CDQ royalties as well as 25% of 2nd 60 55 Generation Funds. While this will 50 45 slow the growth of our net worth, it 40 greatly increases our ability to make 35 30 investments within the region. With 25 each passing year and additional 20 15 projects being completed, we are 10 5 essentially running down the list of 0 more obvious and straightforward 1996฀฀฀1997฀฀฀1998฀฀฀1999฀฀฀2000฀฀฀2001฀฀2002฀฀฀2003฀฀฀2004฀฀฀2005 1 NSEDC staff. The URI research team board of directors, and ultimately its communities, and over $2.3 million conducted many interviews in each member communities. The state and in donations and contributions to community. The interviews were federal governments both have strict organizations and entities in the region. directed to provide initial information rules about the types of projects that This combined with the millions of regarding community perception of NSEDC can participate in, and the other NSEDC dollars spent on in- NSEDC performance and programs, board and staff must interpret these region projects all add up to another potential for future NSEDC programs, regulations as well as account for value outstanding year for our company. and general information regarding and likelihood for success of each As Chairman, I am very proud of the the major needs of the communities. project. The company also has to work hard work the Board of Directors has The final report will not be available within a budget to ensure corporate put forward as well as the diligence until some time in 2006, but it should growth. All of these factors must be and motivation the staff of NSEDC have prove to be a very valuable tool in considered when NSEDC attempts to shown in the delivery of our programs. identifying areas for development both change how it does business. Ideas The positive impacts to the region that in the company and in its member for development and growth that come NSEDC has had thus far and more communities. from within the communities are highly significantly, what the future holds regarded by both the Board and staff to Another very important tool in will speak more loudly than I can so be more likely to succeed, as the sense developing new approaches to NSEDC I will end with a simple token of our of ownership is greater if it comes program delivery is through community appreciation. The Board and staff look from within. interaction. NSEDC staff recognizes forward to growing with the region in that it may be a slow process once Direct economic impacts from NSEDC the future and would like to thank the an idea or a concern is passed on; programs and operations in 2005 residents of the Norton Sound for their however, it should not be taken include: $2.2 million invested in local hard work, ideas, and patience! as rejection if something doesn’t fisheries wages through Norton Sound occur right away. There are a lot of Seafood Products, over $1 million Sincerely, factors to take into account when in wages to residents employed by Dan Harrelson advocating for a program or corporate Glacier Fish Company and Norton change. NSEDC is governed by state Sound Ventures, $197 thousand in NSEDC Board Chairman government, federal government, its scholarships to residents of member White Mountain The community of White Mountain 2 Norton Sound Fisheries Since 1995, Norton Sound Seafood permit holders delivered pounds of coho salmon and 28,135 Products (NSSP), a division of to Norquest Seafoods at pounds of chum salmon. The 2005 NSEDC, has continued to sup- an ex-vessel value of salmon season was over 53% higher port the Norton Sound region $154,234 ($150/Ton at than the 2004 season. commercial fisheries. NSSP’s ten percent). In addition, A $.10 per pound price adjustment activities include purchasing, NSEDC paid these fishermen for all salmon landed in 2005 was processing, marketing, and selling a bonus incentive of $100/Ton approved by the board of directors herring, salmon, halibut, crab, and for ten percent and better, totaling at the December 2, 2006 meeting. bait. NSSP operates facilities through- $71,025. From this amount $ 29,150 out the region including the Unalakleet was collected and applied toward OPEN-ACCESS NORTON SOUND plant, Savoonga halibut buying station, NSEDC loan programs. RED KING CRAB Norton Sound Seafood Center in Nome, The open-access crab season com- The Norton Sound salmon fishery was and buying stations in Elim, Golovin, menced July 1st and closed August the second highest in the past twelve and Shaktoolik. 15th. Twenty-six fishermen delivered years. Coho and chum production was a total harvest of 294,938 pounds. COMMERCIAL NORTON SOUND up considerably. Forty salmon permit The ex-vessel value totaled $868,670. HERRING & SALMON holders fished the coho season, twelve Fishermen were paid an average of The sac roe herring fishery started 48 hour periods, for a total ex-ves- $33,410 each. on June 3, 2005 and continued for sel value of $296,253. This included seven days. Fifty-three Norton Sound 2,511 pounds of king salmon, 660,987 Norton Sound Investment Company Norton Sound Investment Company Generation Earnings,” to distinguish (NSIC) is a wholly-owned subsidiary of them from income NSEDC receives as year, resulting in record earnings and NSEDC and holds NSEDC’s investments royalties from CDQ allocations. During record cash received by NSIC. in Glacier Fish Company, Norton Sound 2005 the portion of 2nd Generation During 2005 NSIC acquired a higher Ventures, IFQ holdings and various Earnings which NSIC remits to NSEDC percentage ownership interest in a crab investment accounts. Its purpose is was increased, and the portion which harvesting subsidiary called Norton to make investments in income-pro- is reinvested for further growth was Sound Ventures, LLC. NSIC’s owner- ducing assets and then oversee those decreased. As a result, 2nd Genera- ship increased from 50% to approxi- investments. A portion of the income is tion Earnings from NSIC’s investments mately 59.5%. Norton Sound Ventures remitted to NSEDC for current pro- are now funding a large number of also posted record earnings, and NSIC grams, and a portion of the income is new projects and programs beyond the believes that there is potential for higher reinvested for growth, with a goal of Community Benefit Share. earnings in future years, even though creating an even greater income stream crab prices are somewhat depressed. Norton Sound Investment Company, LLC in the future. The Community Benefit had a strong year in 2005. As a result, NSIC also saw gains in its stock market Share is paid for entirely from NSIC’s NSIC’s receipts were higher than in investments and received income remittances to NSEDC.
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