State to Dole Out Nearly $5 Million in Aid To Fishermen and for Fisheries Research

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Last month, nearly four years after Congress appropriated the money, the state Department of Land and Natural Resources’ Division of Aquatic Resources was poised to begin distributing more than $2 million in direct aid to fishermen and fishing groups affected by federal restrictions or closures.

The money is part of a $5 million federal grant to the state, made in 2003, for fisheries disaster relief. Under the project’s most recent iteration, roughly $2.1 million is going toward direct assistance to fishermen, about $2.5 million is being spent on a contract for fisheries research and development with the Joint Institute of Marine and Atmospheric Research, and most of the rest will go toward administrative expenses.

Although some (fishermen, mainly) have criticized the state for taking so long in getting the money out the door, state Division of Aquatic Resources officials say there are good reasons for the delays. The DAR never asked for the appropriation and was not prepared to disburse a grant of that size (DAR’s entire annual operating budget usually hovers around $5.5 million). What’s more, once it was decided that the DAR would administer the grant, the division had to create a Fisheries Disaster Relief Program from scratch, amidst a hiring freeze imposed by Governor Linda Lingle.

State of Confusion
Whether the money was ever intended to end up in state hands was an issue from the start. A call to the National Oceanic and Atmospheric Administration’s headquarters in Maryland was not returned by press time and local federal officials don’t want to speculate about whether the money was intended to be administered by the state or by the National Marine Fisheries Service. But state officials involved in the grant say that the appropriation to the state was a mistake.

In 2001, Congress appropriated $3 million under the Consolidated Appropriations Act to NMFS, stipulating that the award was to provide financial aid to certain Hawai`i-based longline fishermen affected by a 1999 lawsuit filed by Turtle Island Restoration Network and the Center for Marine Conservation against NMFS. At the heart of the lawsuit were claims that longline fishing, as practiced at the time, resulted in harm to endangered and threatened sea turtles. As a result of the litigation, U.S. District Judge David Ezra in 2001 issued the first in a series of orders directing NMFS to impose restrictions on the longline fishery while the agency prepared an environmental impact statement on the fishery’s effects on sea turtles.

In November 2001, NMFS established a direct economic assistance program (DEAP) to distribute the $3 million. The 118 vessels eligible for assistance were divided into two groups – tuna vessels and swordfish vessels. Swordfishing vessels received twice as much money as the tuna vessels, since NMFS had determined that the injunctions affected them more and that the cost of converting the swordfishing vessels to tuna would cost between $12,000 and $15,000 per vessel. Tuna vessel owners received $16,000 each, and swordfish vessel owners got $32,000 each, according to a NMFS report.

Exactly how many vessels received compensation, and whether all $3 million was appropriated is unknown. Environment Hawai`i did not receive responses from NMFS to its Freedom of Information Act request for documents by press time. However, according to a draft environmental impact statement by NMFS, the money given to the fishermen covered only a portion of their financial losses and, “The DEAP did not benefit the crew members of swordfish or tuna longline vessels.”

When Congress appropriated another $5 million to the Hawai`i’ fishing industry in February 2003, it took a different approach. It stated that the money “shall be made available as a direct lump sum payment to the State of Hawai`i for economic assistance to fisheries affected by Federal closures or fishing restrictions…”

(Although the appropriation was under a section titled ‘Fisheries Disasters’ – which also included $35 million to Alaska, $20 million to the Northeast and West Coast fisheries, $35 million to Gulf and South Atlantic fisheries, and $5 million to the blue crab fishery – it was not through the Fisheries Disaster Relief Program, which at the time did not provide for relief from federal restrictions or closures. The money was distributed under the same grant program as the 2001 appropriation, the Unallied Industry Projects program. Last year, however, Congress added regulatory closures, including those resulting from judicial actions, to the definition of “catastrophic regional fisheries disasters,” making them eligible for funds under the federal disaster relief program. As of mid-December, President Bush had not yet signed the amendments into law.)

While the congressional language would seem clear that the money was intended to go to the state, NMFS, believing the funds would be its to distribute, was apparently making plans for them.

“The intent was for it was to go to NMFS, but when NOAA attorneys reviewed the congressional language, it was clear that the money was to be given to the state,” says the DAR’s Francis Oishi.

Plan A
While some state agencies might consider a $5 million federal grant a reason to celebrate, in this case, the state was stunned.

“We got word from the federal government: ‘You are about to receive $5 million for disaster relief,’” Oishi says.

Without any idea how it was going to spend the money, the DAR scrambled to come up with a grant application package, which had to be approved by NMFS by the end of the fiscal year.

“DAR was told the application should not include direct payments to fishermen, but was given a list of suggestions for projects that could be funded,” says Walter Ikehara, a former DAR biologist.

DAR then coordinated with the NMFS, the federal Western Pacific Fishery Council, and the local fishing industry to cobble together the state’s own proposal that included both research and some kind of mitigation for fishermen.

In July 2003, DAR submitted a grant application to NMFS to encumber the $5 million appropriation. Its application proposed the following expenditures:

• $1.68 million to purchase permits from fishermen forced or intending to leave a fishery as a result recent federal closures or fishing restrictions. At the time, the Northwestern Hawaiian Islands were on their way to becoming a national marine sanctuary, which threatened to end commercial bottomfishing there. Also, the 2000 executive order establishing the NWHI Coral Reef Ecosystem Reserve prohibited fishing for lobster or precious corals. DAR’s application stated, “If the assistance program is deemed infeasible or is terminated, unspent funds allocated to this program will be reprogrammed to the Fisheries Grant Program.”

• $2.5 million for a Fisheries Grant Program, which included $1.5 million for cooperative research (preferably with fishing vessels) to improve fishing methods to reduce take of protected species, improve stock assessments (priority on bottomfish and lobster), improve analysis of social/economic impacts, provide outreach to the fishing community, understand impacts of alien organisms on fisheries/fishermen, and investigate the impact on Main Hawaiian Islands fisheries of closures in the NWHI, especially with regard to potential displacement of fishing effort or impacts of potential federal closures or restrictions in the MHI. The remaining $1 million dollars would go towards industry-sponsored research and development projects.

• $570,000 for in-house DLNR projects to assist fishermen, such as alternative employment opportunities in aquaculture, higher education support for families of affected fishermen, basic fisheries research in the Main Hawaiian Islands, small-scale infrastructure improvements, habitat enhancement including artificial reefs for bottomfish, and stock enhancement.

• $250,000 to the DLNR to hire a coordinator, accountant, and information specialist for the Fisheries Disaster Relief Program.

While waiting for NMFS to approve the grant, the state worked to set up the program, requesting an increase in spending, special project designation, and the creation of three temporary positions from the state Department of Budget and Finance. It also requested special project status from the Department of Human Resources, so hiring could be expedited.

On October 8, 2003, the state received the grant. Hiring people to implement it was tough with the governor’s hiring freeze. The DAR failed to find anyone to fill the three positions internally. After months of fruitless searching, the DAR decided to collapse the three positions into one and at the end of 2004 hired retired Marine Corps commander Earl Miyamoto to be the program’s coordinator.

Getting to Work
Miyamoto says he knew next to nothing about the fishing industry when he started the job, but he has a background in administering big-money projects. In January 2005, DAR officials, including Miyamoto, met with representatives of the Joint Institute for Marine and Atmospheric Research to discuss whether the research agency would consider administering the Fisheries Grant Program component of the disaster relief program. (JIMAR is housed at the University of Hawai`i’s Manoa campus and is one of 13 joint and cooperative institutes under NOAA’s Office of Oceanic and Atmospheric Research.)

To make sure all expenditures could be justified and were made in consultation with industry experts, Miyamoto assembled in February 2005 an executive steering committee to make final decisions on all proposals. The committee included DAR’s Oishi, NMFS Science Center director Samuel Pooley, NMFS Pacific Islands Regional Office director William Robinson, University of Hawai`i fisheries scientist John Sibert, Western Pacific Fishery Management Council executive director Kitty Simonds, and Timm Timoney, a Northwest Hawaiian Islands lobster- and bottomfisher.

While the DAR and JIMAR worked out a contract, which was executed in mid-August 2005, Miyamoto created a technical working group to do most of the groundwork and initial analysis of proposals, since the executive committee included a number of high-level administrators who couldn’t always make it to regular meetings. The working group included DAR’s Alton Miyasaka; consultant Paul Bartram; bottomfishermen Gary Dill and Dave Kalthoff; Western Pacific Fishery Management Council staffers Marcia Hamilton, Mark Mitsuyasu and Sylvia Spalding; NMFS Fisheries Center scientists Chris Boggs, David Itano, Russell Ito, and Kurt Kawamoto; UH scientist Christopher Kelley; and UH-Hilo anthropologist Craig Severance, a part-time fisherman who also is a member of the council’s Scientific and Statistical Committee.

In the summer of 2005, the group developed formats for a Letter of Intent request and a Request for Proposals, as well as evaluation criteria for the RFPs.

At some point, DAR decided that the $1.68 million intended for a permit buyout would not be used that way. Although the grant application states that the money would be used for research and development grants if the buyout program flopped, DAR decided instead to use the money for direct assistance to fishermen, with NOAA’s permission. The reason no money was used to buy out permits, Miyamoto says, is, “We couldn’t figure out a price [for the permits]. Permits were issued without a cost.” Determining a fair market value for the permits would need to be done, but “we weren’t going to get into that,” he said.

By September, the state had received 48 Letters of Intent seeking assistance totaling $9.5 million. Then in February 2006, the DLNR published its RFP notice for direct assistance, inviting fishermen in the Hawai`i-based pelagic, bottomfish, NWHI lobster, and precious coral fisheries managed by the council to apply.

“Individual projects may be eligible for up to approximately $20,000. Larger scale projects that will benefit a broader sector of federally impacted fisheries will also be considered for funding up to approximately $100,000. Projects should target a goal for completion of one year from time of funding,” the RFP stated. The deadline to apply was April 30.

The DAR received 22 applications for direct assistance from individual longliners, seven from bottomfishermen, two from lobster fishermen, one from the owner of a private fish aggregating device, and three from fishing groups. Requests totaled nearly $3.8 million. The department also received about two dozen research proposals totaling about $3.2 million in response to an RFP issued in August.

Once all applications were received, the working group and executive committee reviewed and scored them based on its evaluation criteria. Research proposals were ranked for relevance, soundness of technical approach, likelihood of success, competence of principal investigators, and integration with other disaster-relief program activities. The direct assistance allocations were based on a formula, developed by Chris Boggs, based on the scores assigned to each proposal by working group members.

As of mid-December, the proposed allocation stood roughly as follows:

• $2.1 million in direct assistance to longliners, bottomfishers, lobster fishers, the Hawai`i Longline Association, and the Leeward Bottomfishing Hui.

• $2.5 million to JIMAR for 16 research projects, including two (one industry-sponsored project and a bottomfish tagging study by Gerard DiNardo) totaling nearly $550,000 that had not yet been formally approved by the executive committee as of mid-December.

• $250,000 to DLNR for administration.

Miyamoto says that money originally proposed for in-house DLNR projects went instead to direct assistance, since DAR was short-staffed and felt it couldn’t use the money as envisioned.

“I didn’t want $500,000 sitting there,” he said, so the money was diverted to the fishermen. More than $100,000 remains unobligated for now, he added, held as a contingency fund.

In August, DAR submitted a request to the Department of Budget and Finance for an exemption from state procurement laws to allow the direct payments to be made. Because the proposed HLA allocation was so large, Miyamoto says, Budget and Finance wanted a letter from NOAA stating its approval of the expenditure, which NOAA provided. The department then required all direct assistance recipients to submit a W-9 tax form. Once those are received and the Department of Budget and Finance approves DAR’s exemption request, the checks will take two to three weeks to be issued. As of mid-December, Miyamoto had received all but three of the W-9 forms. He said he expected to start disbursing checks by the end of December. The research money, none of which has been disbursed yet, will be distributed periodically, in accordance with a schedule set forth in the contract with JIMAR, he says.

— Teresa Dawson

Volume 17, Number 7 January 2007

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