KSP Members

The following is the letter I sent over to the Governor. Will let you know if I get any feedback.

Brian Kraft

April 7, 2020

Governor Mike Dunleavy,

The Katmai Service Providers, Inc is comprised of 62 businesses that operate throughout Katmai National Park as well as the Greater Bristol Bay region. We are owners of air taxis, lodges, guide services, and Eco tourism companies that help contribute over $300M a year into state revenue. We work closely with the Superintendent of the Park to help guide policy and long-term vision for the region with regards to sustainable healthy businesses. Our membership is comprised of small businesses that generally do not carry forward large amounts of capital.

We are all grappling with the COVID-19 situation that has sickened many, taken lives, and crippled the economy. We are keenly aware of the concerns that many people and tribal entities have expressed with regards to the commercial fishery that takes place in Bristol Bay. We are also aware of the impact that an outbreak of COVID-19 could have in a small community that has a large influx of people in a very short period of time. It is crucial for your office to understand the vast difference between the commercial fishery and its impact on local communities versus the sport fishing and tourism-based businesses that also operate in the Katmai / Bristol Bay region.

The Commercial fishery of Bristol Bay requires a massive labor force that arrives into the region in large numbers very quickly. Some of that labor force will begin to arrive in the coming weeks with large pushes of labor arriving by late May. There is also a tremendous lead time in preparation for the season by the canneries and support businesses. Additionally, the Commercial season is actually quite short in duration from Mid-June to Mid-July and cannot be put on pause nor delayed. The fish are going to arrive when nature dictates and once they are out of the ocean there is lost economic opportunity for the commercial fleet. Thus, it makes the commercial industry an “All or Nothing” scenario. It is not like they can delay the season to mid-July. If they do not have everything in place when the fish arrive the season will be a bust. The interaction of the imported workforce into the local communities is quite overwhelming and it is understandable that the communities of Dillingham, King Salmon, and NakNek are very concerned about this pending surge of people. Compared to the Tourism based industries such as bear viewing, sport fishing lodges, air taxi’s, and photography tours, where we can delay the start of our season and still have somewhat of a successful season. Additionally, the physical preparation needed to “open” these businesses is minimal with most being able to open for business within days. The biggest difference is for the most part many of our businesses can operate without ever impacting or interacting within any of the larger communities such as King Salmon, NakNek, Dillingham, Iliamna. Nor would we need to interact in any of the smaller villages in the region. Where interaction is necessary there can be protocols put in place and easily

adhered to since you are not looking at thousands of people moving into a region at a time but rather a few people potentially moving through as they make their way to a lodge or some other remote location.

The lodges themselves are self-contained operations and can virtually eliminate any interaction with any of the villages. The air taxi’s with bear viewers and photographers transport people to the most remote parts of the Park and have no interaction with Bristol Bay communities.

We are not callously approaching this situation and all of our businesses are making plans and looking at protocols to operate safely. We are hopeful that rapid testing becomes available that would allow testing to be done on travelers prior to making their way to a lodge or to the region. This would greatly improve confidence and allow for a testing protocol to ensure safe operations. As far as the concerns of the commercial fishery opening and requests for your office to shut down the Bristol Bay commercial fishery, we want to make sure you take a calculated specific approach with regards to our business sector and if warranted, consider incremental steps as we approach the season opener of June 8.

We urge you to look at alternatives to a complete closure for the entire season at any one point in time and urge your office to take a wait and see approach as we get closer to our season. It is a fast-moving fluid situation and new data is becoming available each day. There are breakthroughs in testing procedures as well as potential remedies for COVID that would make it acceptable to safely open

businesses throughout the country. It is difficult at this point in time now to predict what things will look like in June let alone July, August, or September.

I am available for any questions or discussions. Thank you for your time and attention to our situation.

Brian Kraft

President

Katmai Service Provider’s, Inc.

907-227-8719

Brian@fishasl.com

I heard back from Senator Murkowski’s office regarding our concerns with the shortcomings with the PPP loan program. Ann Roberston has been very responsive and I suggest all our members reach out to her to request funding for summer seasonal operations. Here email is:

Ann_robertson@murkowski.senate.gov

For reference here below are suggestions that have been made to her and would be good for others to send similar requests:

Allow summer seasonal businesses to take 2019 total payroll and divide that number by 4 to arrive at a monthly average and multiply by 2.5 (this encompasses the bulk of seasonal business payroll). This will cover a large portion of anticipated payroll and allow small businesses to keep employees even when revenue is down.

Support modifications to existing loans through refinancing or gapping payments with short term funding through the SBA to apply payments towards. So the SBA would provide 12 months’ worth the amount of an existing business loan that a company already has. This SBA funding would be at a 5 year term at 1% with no prepayment penalty.

Regional funding for tourism based operations if seasons are canceled or impacted due to COVID-19 that would be granted at 40% of the average for the last three years revenue. For instance a company has an average of $1,000,000 in revenue for the last three years. The company would receive a grant for $400,000. Or if it had to be a SBA loan it could be paid back at a favorable rate similar to the PPP. This money would be used for existing business operations and covering expenses to make sure we are able to progress and open for business in 2021.

The attachment on this e-mail is a good PDF that shows the different loans available to small businesses and what the differences are.

Brian Kraft-President

Katmai Service Providers

KSP Members

The following is the letter I sent over to the Governor. Will let you know if I get any feedback.

Brian Kraft

April 7, 2020

Governor Mike Dunleavy,

The Katmai Service Providers, Inc is comprised of 62 businesses that operate throughout Katmai National Park as well as the Greater Bristol Bay region. We are owners of air taxis, lodges, guide services, and Ecotourism companies that help contribute over $300M a year into state revenue. We work closely with the Superintendent of the Park to help guide policy and long-term vision for the region with regards to sustainable healthy businesses. Our membership is comprised of small businesses that generally do notcarry forward large amounts of capital.

We are all grappling with the COVID-19 situation that has sickened many, taken lives, and crippled the economy. We are keenly aware of the concerns that many people and tribal entities have expressed with regards to the commercial fishery that takes place in Bristol Bay. We are also aware of the impact that an outbreak of COVID-19 could have in a small community that has a large influx of people in a very short period of time. It is crucial for your office to understand the vast difference between the commercial fishery and its impact on local communities versus the sport fishing and tourism-based businesses that also operate in the Katmai / Bristol Bay region.

The Commercial fishery of Bristol Bay requires a massive labor force that arrives into the region in large numbers very quickly. Some of that labor force will begin to arrive in the coming weeks with large pushes of labor arriving by late May. There is also a tremendous lead time in preparation for the season by the canneries and support businesses. Additionally, the Commercial season is actually quite short in duration from Mid-June to Mid-July and cannot be put on pause nor delayed. The fish are going to arrivewh en nature dictates and once they are out of the ocean there is lost economic opportunity for the commercial fleet. Thus, it makes the commercial industry an “All or Nothing” scenario. It is not like they can delay the season to mid-July. If they do not have everything in place when the fish arrive the season will be a bust. The interaction of the imported workforce into the local communities is quite overwhelming and it is understandable that the communities of Dillingham, King Salmon, and NakNek are very concerned about this pending surge of people.

Compared to the Tourism based industries such as bear viewing, sport fishing lodges, air taxi’s, and photography tours, where we can delay the start of our season and still have somewhat of a successful season. Additionally, the physical preparation needed to “open” these businesses is minimal with most being able to open for business within days. The biggest difference is for the most part many of our businesses can operate without ever impacting or interacting within any of the larger communities such as King Salmon, NakNek, Dillingham, Iliamna. Nor would we need to interact in any of the smaller villages in the region. Where interaction is necessary there can be protocols put in place and easily adhered to since you are not looking at thousands of people moving into a region at a time but rather a few people potentially moving through as they make their way to a lodge or some other remote location. The lodges themselves are self-contained operations and can virtually eliminate any interaction with any of the villages. The air taxi’s with bear viewers and photographers transport people to the most remote parts of the Park and have no interaction with Bristol Bay communities. We are not callously approaching this situation and all of our businesses are making plans and looking at protocols to operate safely. We are hopeful that rapid testing becomes available that would allow testing to be done on travelers prior to making their way to a lodge or to the region. This would greatly improve confidence and allow for a testing protocol to ensure safe operations.

As far as the concerns of the commercial fishery opening and requests for your office to shut down the Bristol Bay commercial fishery, we want to make sure you take a calculated specific approach with regards to our business sector and if warranted, consider incremental steps as we approach the season opener of June 8.

We urge you to look at alternatives to a complete closure for the entire season at any one point in time and urge your office to take a wait and see approach as we get closer to our season. It is a fast-moving fluid situation and new data is becoming available each day. There are breakthroughs in testing procedures as well as potential remedies for COVID that would make it acceptable to safely open businesses throughout the country. It is difficult at this point in time now to predict what things will look like in June let alone July, August, or September.

I am available for any questions or discussions.Thank you for your time and attention to our situation..

Brian Kraft

President

Katmai Service Provider’s, Inc.

907-227-8719

Brian@fishasl.com

I heard back from Senator Murkowski’s office regarding our concerns with the shortcomings with the PPP loan program. Ann Roberston has been very responsive and I suggest all our members reach out to her to request funding for summer seasonal operations. Here email is:

Ann_robertson@murkowski.senate.gov

For reference here below are suggestions that have been made to her and would be good for others to send similar requests:

Allow summer seasonal businesses to take 2019 total payroll and divide that number by 4 to arrive at a monthly average and multiply by 2.5 (this encompasses the bulk of seasonal business payroll). This will cover a large portion of anticipated payroll and allow small businesses to keep employees even when revenue is down.

Support modifications to existing loans through refinancing or gapping payments with short term funding through the SBA to apply payments towards. So the SBA would provide 12 months’ worth the amount of an existing business loan that a company already has. This SBA funding would be at a 5 year term at 1% with no prepayment penalty.

Regional funding for tourism based operations if seasons are canceled or impacted due to COVID-19 that would be granted at 40% of the average for the last three years revenue. For instance a company has an average of $1,000,000 in revenue for the last three years. The company would receive a grant for $400,000. Or if it had to be a SBA loan it could be paid back at a favorable rate similar to the PPP. This money would be used for existing business operations and covering expenses to make sure we are able to progress and open for business in 2021.

The attachment on this e-mail is a good PDF that shows the different loans available to small businesses and what the differences are.

Brian Kraft-President

Katmai Service Providers

Today I spoke to my State of AK House representative today, Laddie Shaw in Juneau, and relayed the message that all operators in Bristol Bay –KSP members—are starting to feel the pinch with real and potential cancelations. I informed him of the huge upfront expenses our businesses have in preparation for the season and that this money is spent from clients deposits that are now asking for refunds. I asked the he have the Governor declare a state of emergency for Alaska and the Bristol Bay Sport and Commercial fisheries ahead of the season so that we can prepare and get in line as there will be many businesses doing the same thing. I relayed the message that we understand that the airline and cruise ship industries need a bail out but that it is the small business owner in Alaska that fuels the local economy and we will need help. I encourage all Alaskans that do business in Katmai/Bristol Bay to call their reps in Juneau and tell them we need help. Tell them we want access to SBA zero or low interest loans to get us through this crisis. If you do not live in Alaska yet operate in the Katmai/Bristol Bay area, contact Representative Bryce Edgmon (he reps Bristol Bay and Speaker of the House) and tell him your business that brings economic benefit to the region will need help. Representative.Bryce.Edgmon@akleg.gov Or by phone at 800-898-4451 To all Katmai Service Provider members-

I wanted to take a moment to write to all of you to express hopes for all to have a safe and profitable season. The COVID-19 virus has put both of those in jeopardy. Although the season opener of June 8 is 83 days from the writing of this email and many trips happen in July, August, or September, my company is starting to receive cancelation inquires. Although I am an optimist and hope we get this thing under control in the next month, I believe it is prudent that we all start to prepare for what would be a catastrophic event to our businesses with massive cancelations if the virus persists. Katmai Service Providers has proven over the years to be a valuable and strong organization when speaking to decision makers. Strength is in numbers. To that end, I began discussions with the Commercial fishing industry and Bristol Bay Economic Development Corp in an effort to collectively pool our influence on our delegation to provide a financial relief package that is Bristol Bay centric. I would be embarking on this effort on behalf of Katmai Service Provider members. The idea being that we show the importance of making all tourism and commercial fishing businesses that will be severely affected financially stable. Although it is appropriate to bail out the airlines and cruise industries that are hurting, we, the small business owners and our employees that depend upon our ability to pay them, will be the hardest hit.

Let me know if you have any questions or opinions on this.

Thank you,

Brian Kraft

President –Katmai Service Providers, INC