Mug Update: Round 2 Federal PPP and AK CARES for Fishermen

PPP

The Paycheck Protection Program reopened for applications January 11, 2021 and will remain open until March 31, 2021. Check out our Mug Update on round one for background on the program. 

If you have already received PPP funds, certain businesses are eligible for a second round of PPP funds starting January 13, 2021 until March 31, 2021.  

AK CARES

The State of Alaska was allocated $50 million of the initial $300 million directed toward fisheries relief by Congress in spring 2020. Applications opened March 1st for the Alaska NOAA CARES Fisheries Act Assistance Program. The application period closes April 23, 2021. You and your financial advisor are the best judge of whether this program applies to you. 

General Eligibility Requirements:

In addition to Alaska residents, “nonresident commercial harvesters may be eligible to apply to the state of Alaska if they meet the following criteria:

• Must be a resident of a state that did not receive a Section 12005 allocation 

• Must meet all eligibility requirements outlined in this plan”

Applicants must be able to document a greater than 35% loss when comparing March 1, 2020 – November 30, 2020 gross revenue to average annual gross revenue from 2015-2019 (or for available years)

• Must hold one or more of the following

  • Valid 2020 Commercial Fisheries Entry Commission (CFEC) commercial vessel license 

    • Support vessels and/or skiffs without a CFEC vessel licenses are not eligible for a share.

  • 2020 NOAA Fisheries License Limitation Permit

  • 2020 NOAA Fisheries Halibut/Sablefish Individual Fishing Quota Permit

  • 2019/2020 or 2020/2021 NOAA Fisheries Bering Sea and Aleutian Island Crab Rationalization Individual Fishing Quota Permit

Details to Apply:

Applicants will be responsible for downloading or printing their applications off the PSMFC site. Applicants are encouraged to complete and submit their applications electronically, although will still be permitted to print, complete by hand, and submit through traditional mail methods, i.e USPS, FedEx, UPS, etc. Applications will NOT be mailed unless explicitly requested. Given the application period is only 54 days; all applications MUST be received or at least postmarked on or before 4/23/2021 - ABSOLUTELY NO LATE APPLICATIONS WILL BE ACCEPTED, Commission staff highly encourage applicants to obtain the necessary documents themselves due to these time constraints and due to our limitations to review and respond to voicemails and emails promptly. If requesting an application by mail, please email AKCares@psmfc.org, subject the message "Application Request," and provide your name and an address where you can receive mail. If calling our toll-free hotline, please do the same.

For questions or inquiries related specifically to Alaska’s Sec. 12005 CARES Act Fisheries Assistance relief please email AKCares@psmfc.org or call toll-free: 1-888-517-7262. If you have the ability to email, you may receive a quicker response due to the large volume of calls anticipated to be received.

Alternatively, you may reach out to ADFG personnel working on Alaska’s ~$50 million Sec. 12005 CARES Act relief at dfg.com.caresact@alaska.gov or (907) 465-6136. 

Call for 2021-2022 Alaska Young Fishing Fellowship Host Proposals Ends March 31

The Alaska Fishermen’s Network (AKFN) and Alaska Marine Conservation Council (AMCC) have opened the call for host proposals for the 2021-2022 Alaska Young Fishing Fellows program. AMCC recruits and screens applicants and provides a small stipend to support appropriate fisheries-focused projects. Hosts provide a project and guidance for a 2-5 month period.

Previous projects have included direct marketing, citizen science, history, communications, policy, advocacy, and other creative ways to support fishermen and coastal communities.

Former fellows have used their projects to bridge their fishing livelihoods with work on shore to support and improve their communities. They have moved on to serve as congressional staffers, AP members, direct marketers, fleet managers and often continue as engaged, active fishermen. Find more information and apply here.

Sole Proprietorship, LLC or S-Corp? Choosing the Right Business Entity for your Commercial FishingBusiness

One of the crucial decisions commercial fishermen must make is what business entity to use for their business.  Why does this matter?  Your choice on incorporation has a big influence on taxation. 

There are different tax consequences depending on the corporate structures you have in place.  Sole Proprietorships, LLCs and S-corps are the most common for commercial fishermen.  C-corps are sometimes used for large operations but are generally rare, so they will be left out for now.

• Sole Proprietorships – this is the simplest structure, but has some differences to other entities from a tax perspective.  Simplicity is related to the lack of filing & compliance tasks to establish the entity.  Tax-wise, however, all profit is treated as wages, which is subject to ~15% FICA/payroll taxes on wages below approximately $137,000 (for 2020), but decreases beyond that.  FICA taxes include Social Security and Medicare taxes.  

• LLCs – they can be taxed like a Sole Prop (above), or like an S-corp (below).

• S-Corps – The S-Corp is an election on how your corporation is taxed.  The S-Corp tax election can be advantageous for commercial fishermen due to the fact that you can pay yourself in two tiers: wages and distributions.  Wages are subject to FICA taxes, which are ~15%.  Distributions, on the other hand, are not subject to FICA taxes.  It is important to note that both tiers are included in ordinary income.  

The profitability of your business will influence how much of a benefit this means for you as there are some higher compliance and filing costs for S-corps vs. LLCs.  The bottom line is that the dividend distribution tier avoids applicable FICA taxes, which can be as high as ~15%.  As a slight offset to this benefit, half of FICA taxes are deductible (whether you itemize or not) from ordinary income.  Still, if your wages were $100,000 and you shifted half to dividend distributions, this could save you about $6,000 in taxes.  Importantly, the IRS has safeguarded against all income being distributed as dividends - the owner(s) of the business must also take reasonable compensation in the form of wages (IRS guidance on this topic here).

Case Study:

Tom started a fishing operation 5 years ago as a sole proprietorship due to simplicity.  At the time, ex-vessel prices in his fishery were low.  His total net income then (after crew & expenses) was about $35,000.  In the following years, demand for his product rapidly grew, and even with similar poundage per season, his income is now $135,000.  However, his business is still setup as a sole proprietorship and his $135,000 income is all subject to FICA Taxes.  When his income was lower, FICA taxes on his $35,000 income would have been approximately $5,000.  With his current income, FICA taxes on his $135,000 income is now approximately $19,000.

Tom reincorporates as an S-Corp.  He must pay himself a reasonable salary (IRS guidance here), which he has determined is half of the total $135,000 net income, or $67,500.  

The other $67,500 he takes as dividend distributions, which is not subject to FICA taxes and is passed through to Tom’s personal tax return as ordinary income.

Once you take into account that half of FICA taxes are deductible (the dollar benefit to you equals the deducted amount multiplied by your ordinary income rate), Tom could save approximately $8,400 in overall taxes using this strategy. 

*These numbers are purely for illustrative purposes and should not be used as any guidance for determining reasonable compensation or your specific tax liability.  This should not be interpreted as tax advice.

To be clear, any amount in wages or distributions still flows through to your personal income tax return and will be subject to federal and state income tax rates.

A choice you make on your business structure early on could have increasing implications as your situation evolves.  Understand the consequences of choosing one corporate structure over another means you can make the best choice for your operation.  

About Robert

Robert Seid is a financial advisor and Partner at Blue Summit Wealth Management, an independent wealth advisory firm in San Diego, CA. He also captains an Alaska commercial fishing vessel in Bristol Bay. His experience in both industries provides him the perspective to share financial guidance specifically geared for commercial fishermen. To learn more about how Robert and Blue Summit can help you and your operation succeed, please visit www.bluesummitwealth.com.

Robert started in the Bristol Bay fishery in 2011 as a green crew member, walking the yards to find his first opportunity. His love for nature and adventure found a home in Bristol Bay and, after his first year on the water, he was hooked. He has returned every year since and purchased his own vessel in 2019. As a skipper, his dedication to commercial fishing has only continued to grow.

**All opinions expressed by Robert Seid in this article and website are solely Robert's opinions and do not reflect the opinions or guidance of Blue Summit Wealth Management.

Financial Minute with Robert Seid: Planning for Retirement

Retirement Planning – Minimize taxes now and save for the future

Commercial fishing is ever-changing, dynamic, and demands our attention as skippers. This often puts retirement planning in last place on our to-do lists. However, we all love to reduce current year taxes, and retirement planning can accomplish that. Furthermore, there will come a day when our fishing careers end, and we will need to live off the decades of hard work we’ve spent in the yards and on the water. How do you start now to ensure you’ll have enough and help minimize taxes along the way?

There is no one-size-fits-all approach to retirement planning for commercial fishermen. The most fitting techniques can vary year to year, depending on your income and tax situation. Self-directed Traditional IRAs and Roth IRAs are covered all over the internet, so we will focus on more exclusive and impactful strategies available to business-owning captains. Let’s go through a few of the options:

Solo 401ks – This is an opportunity that skippers really shouldn’t miss and is the premier way to reduce taxable income AND invest for your retirement. The contribution limits have a high ceiling AND are tax-deductible. Regardless of your income, you can contribute. The total contribution consists of two portions: Employee and Employer.  

Employee portion: can be $19,000 in 2020. If you are over 50, you can contribute another $6,500 for a total of $25,000.  

Employer portion: Slightly trickier; this can be 25% of your salary (i.e., W-2 wages) up to the max of $37,000 (which would mean your salary was $148,000).   

Between both of these contribution types, your max total contribution can be $57,000 (plus $6,500 if you are over 50) for YR2020.

Roth Solo 401k – A typical Roth IRA has inhibitive income limits, i.e., if your taxable income in a given year is under approximately $130,000 (single) or $200,000 (married), you cannot contribute. However, Roth Solo 401ks have all the same tax rules (contributions are NOT tax-deductible, but withdrawals are tax-free if you are over 59 ½ ) and flexibility (contributions can be withdrawn at any time) of Roth IRAs BUT, there is no income limit for contributions. Regardless of your income, you can contribute. This is a unique opportunity for skippers compared to the typical Roth IRA investor.

Contribution limits are limited to the employee portion only (see above), so a max of $19,000-25,000 (age-dependent). This maximum can be split between the Solo 401k and the Roth Solo 401k as you wish, but the max remains the same.

The benefit of Roth Solo 401ks is that any money you save there will never be taxed when withdrawn. What you see is what you get.

Strategies – generally speaking, your income/tax situation will be the key drivers to nudge you towards tax-deductible contributions (Solo 401k) or non-tax-deductible contributions (Roth Solo 401k) in any given year. A high-income year would encourage Solo 401k contributions because you are preventing taxable income at higher rates. A lower-income year would encourage Roth Solo 401k contributions because you could take advantage of lower rates this year.      

Keep in mind; income means ALL income types (other work/business, short-term capital gains, etc.), so your overall situation is what matters, not just this year’s fishing.

Another factor is timing. Perhaps you won’t know your income/tax situation in full until after the April tax deadline. That’s okay; you can extend your tax filing until September or October and still contribute before then. Your Solo 401k just needs to be established before the calendar year is over.

Case Study: 

Roger has a good year in 2020 and earns $200,000 (net of crew shares & expenses) in his fishing business.  He takes $176,000 as profit sharing and pays himself $24,000 as his skipper salary.  He is single and would be in the 32% federal marginal tax bracket.  He is a resident of Washington and has no state income tax.  

He decides to contribute $25,000 to his Solo 401k, bringing his total taxable income down to $175,000.  He contributes $19,000 for his employee portion, and $6,000 for his employer portion.  This prevents $25,000 from being taxed at 32% and thus saved him $8,000 in taxes this year.  If Roger lived in a high tax state like California, the tax savings would be even larger.  

Retirement planning is not just for your retirement years.  It should also be looked at as a huge benefit to reduce current year taxable income and tax liabilities.  As commercial fishermen and often solo business owners, there is a lot of unique opportunity to take advantage of with the right financial planning.

About Robert

Robert Seid is a financial advisor and Partner at Blue Summit Wealth Management, an independent wealth advisory firm in San Diego, CA. He also captains an Alaska commercial fishing vessel in Bristol Bay. His experience in both industries provides him the perspective to share financial guidance specifically geared for commercial fishermen. To learn more about how Robert and Blue Summit can help you and your operation succeed, please visit www.bluesummitwealth.com.

Robert started in the Bristol Bay fishery in 2011 as a green crew member, walking the yards to find his first opportunity. His love for nature and adventure found a home in Bristol Bay and, after his first year on the water, he was hooked. He has returned every year since and purchased his own vessel in 2019. As a skipper, his dedication to commercial fishing has only continued to grow.

Mug Update: Cash for 2019 Tariff damages (Seafood Trade Relief Program)

As you may remember, two years ago, President Trump imposed tariffs on Chinese goods, which resulted in steeply increased taxes on U.S. seafood headed to China. Find out more here. To mitigate part of the damage to U.S. seafood harvesters, the Administration has rolled out the Seafood Trade Relief Program through the USDA.   

Relief will be provided directly to eligible fishermen with a valid federal or state license or permit to catch seafood and sell their catch to a licensed, shore-based party. Funds will be allocated based per pound of eligible species caught in 2019.   

For example, Salmon is listed at 0.16 per pound. 

The application is open Sept. 14, 2020, to Dec. 14, 2020. Find it here. 

The USDA provided a webinar for fishermen on Tuesday, Sept. 22. Find the recording here.  

Call the USDA assistance line at 877-508-8364 with questions about the application.

For Alaskans, once you’ve submitted your application to the Palmer office of USDA you will have 60 days to complete the additional forms that they send you. Please note that Alaska has ONE office processing all of the applications for this program and that there is currently a backlog of applications.

Read the FAQ here. 

Mug Update: Federal PPP and AK CARES Programs for Fishermen

Greetings from Bristol Bay, fish people. First, I’d like to thank you for your diligence and conscientiousness preventing the spread of COVID-19 in our fisheries and coastal communities this summer. While fishing is still underway across the state, here in the Bay we’ve wrapped our main sockeye season with no instances of community spread.   

The few tenacious characters left with nets in the water over here await fall fish after a compressed and frustrating season on the Westside. While fishing is always an uncertain endeavor, COVID-19 is impacting markets worldwide in a way we’ve never seen. We can’t be sure how long these effects will last or what the long-term impacts will be. With a base price of $0.70 for sockeye here in the Bay, down from $1.35 last year, and dock prices down by 60% most other places, a lot of us are looking toward the federal and state COVID-19 relief programs to help get our crews and businesses through the winter.

However, we’re hearing a hesitance to apply for available relief programs. Fishermen are adaptable, resilient, and tough. But there is no need to grit this one out, folks. There will be paperwork, it might be tedious, and you will spend more time than you’d like on the phone, but the funds available here can help your business weather the next few years of unique uncertainty. Fisheries and the food security we provide are worth federal and state investment.  

There are two programs that Alaska fishermen should look into. The federal Payment Protection Program (PPP), deadline August 8, 2020, and the AK CARES program from the State of Alaska. The PPP, a loan program with a forgiveness mechanism, looks at last year’s expenses while AK CARES, a grant program, looks at expenses and debts incurred this season. Please note that you can only apply for AK CARES if you have received less than $5,000 from the PPP.

The State of Alaska recently updated the AK CARES program to include Alaska Commercial Fishing Businesses. The application period will open August 6, 2020 through an online portal - make sure you have a good internet connection. Find more information on eligibility for commercial fishermen here.  

The Alaska Marine Conservation Council (AMCC), AKFN’s parent organization, submitted its Paycheck Protection Program application through Northrim Bank. It’s essential to work directly an SBA-approved lender. With the deadline looming it is important to have your required paperwork ready to submit when you receive the application link from your banker. As of this writing, many banks have closed their application period for the Aug. 8 deadline. However, Northrim is still taking applications in Alaska.  

If you are applying as crew, a private contractor, without your employer, you will need your 1099 tax form from 2019. As a vessel owner or captain, you will need your schedule C or schedule K tax form. You will also need three months of banking statements from Jan-March of 2020. As a captain, you will need to be sure that your crew has not applied for the program on their own before claiming their wages on your application. If they have already received funds from the program, you will be unable to claim their wages. As crew, be sure that your captain has not already filed on your behalf.

If you work with a CPA or other financial advisor, they can help decide which program you may be eligible for and assist with the application process.

AMCC and the Fishing Communities Coalition (FCC) have worked with the Alaska congressional delegation to make the PPP workable and helpful for fishing businesses. Since the first round, fishermen are now able to include their crew share payments in their application. Private contractors, crew or anyone who receives a 1099, are also able to participate in the program.      

We appreciate the work of the Alaska delegation and look forward to further relief for commercial fishermen in upcoming legislation. We're anticipating further funding to be added to the PPP by Congress, in addition to added flexibility for fishing businesses to amend their applications from the first round. We will keep you posted as we know more. 

Here are a few links that will be helpful as you wade into this process.

FCC’s fact sheet on the PPP.

While you MUST work with your banker on the PPP application, here are some of the forms from the Small Business Administration for reference:

Payment Protection Program Borrower Application Form

Payment Protection Program EZ Loan Forgiveness Application (for loans less than $150,000)

Paycheck Protection Program - How to Calculate Maximum Loan Amounts

FAQ on AK CARES here.

Please take extra care as we finish out the summer season and transition back into our winter lives. Wear your masks and be kind to each other.

For any questions or suggestions for Mug Update, please email jamie@akmarine.org 

A Day in the Life of Alaskan Fishermen

We asked members of the Alaska Fishermen’s Network Facebook group to send us pictures of their daily life and the response was amazing! We hope you enjoy this special look into the lives of the men and women harvesting one of the state’s most precious resources.

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Image 1: Deck loaded, and the some F/V Lady Samantha PWS (Credit Seteve Anica Currier Estes)

Image 2: F/V Lady Samantha deck load with Steve Anica Currier Estes (Credit Sarah Roemhildt Trumblee)

Image 3: Skipper in training on F/V Silver Beach (Credit Jennifer Cabana)

Image 4: The “setnet crew” on Upper Cook Inle't’s K Beach (Credit Angela Maples)

Image 5: Unloading Southeast Alaska troll-caught King Salmon (Credit Karl Jordan)

NEW UPDATE: PPP Application Deadline Extended

The Department of Treasury has updated the Paycheck Protection Program (PPP) to expand Eligible Payroll Costs specifically to help fishermen access more relief funds. Fishing boat owners can now include compensation paid to crewmembers whose income is reported on a 1099-MISC. Read the Treasury Department's clarifications below and talk to your lender now to proceed with, or update, an application

Here are some of the key takeaways from the update:

1. Calculation of Payroll Costs of Certain Fishing Boat Owners 

• May fishing boat owners include payroll costs in their PPP loan applications that are attributable to crewmembers described in Section 3121(b)(20) of the Internal Revenue Code? 

Yes. The Administrator, in consultation with the Secretary, has determined that the relationship of a crewmember described in Section 3121(b)(20) of the Internal Revenue Code (Code) and a fishing boat owner or operator (fishing boat owner) is analogous to a joint venture or partnership for purposes of the PPP. As a result, a fishing boat owner may include compensation reported on Box 5 of IRS Form 1099-MISC and paid to a crewmember described in Section 3121(b)(20) of the Code, up to $100,000 annualized, as a payroll cost in its PPP loan application. The Administrator, in consultation with the Secretary, has determined that this treatment is appropriate to effectuate the purposes of the CARES Act to provide assistance to eligible PPP borrowers, including business concerns that operate as partnerships, affected by the COVID-19 emergency. 

2. Calculation of Certain Payroll Costs Eligible for Loan Forgiveness 

• May a fishing boat owner include as payroll costs in its application for loan forgiveness any compensation paid to a crewmember who received his or her own PPP loan and is seeking forgiveness for amounts of compensation the crewmember received for performing services described in Section 3121(b)(20) of the Code with respect to that owner’s fishing boat? 

No. If a fishing boat crewmember obtains his or her own PPP loan and seeks forgiveness of that loan based in part on compensation from a particular fishing boat owner, the fishing boat owner cannot also obtain PPP loan forgiveness based on compensation paid to that same crewmember. This restriction applies only if the crewmember is performing services described in Section 3121(b)(20) of the Code for the particular fishing boat owner. The Administrator, in consultation with the Secretary, has determined that this restriction is necessary to prevent fishing boat owners and crewmembers from claiming forgiveness for the same payroll costs (for the owner’s PPP loan, the compensation to a specific crewmember; for the crewmember’s PPP loan, the compensation from the owner to that crewmember). As a result, only the crewmember’s PPP loan is eligible for forgiveness, and the owner may not obtain forgiveness for any payroll costs paid to the crewmember. The fishing boat owner is responsible for determining whether any of its crewmembers during the covered period for loan forgiveness received their own PPP loans. Due to the increased risk of duplicate payroll costs, PPP loans to fishing boat owners are more likely to be subject to an SBA loan review. 

3. Additional Information 

• SBA may provide further guidance, if needed, through SBA notices that will be posted on SBA’s website at www.sba.gov. Questions on the Paycheck Protection Program may be directed to the Lender Relations Specialist in the local SBA Field Office. The local SBA Field Office may be found at https://www.sba.gov/tools/local-assistance/districtoffices. 

Applications are due August 8, 2020

Mug Update: Stay the Course for Summer 2020

We prepared for the season differently this year. While we had the same mad dash from the house to the truck and back, weighing and reweighing groceries and parts the way we always do, our checklist looked much different. 

• Thermometers 

• Crew questionnaire 

• Travel permit and Ordinance FAQs for Dillingham 

• Appendix 2 acknowledgment of State Health Mandate 17

• Masks 

• Hand sanitizer 

• Don't forget the cookies

• And also the dog 

Our family conversations about the season began early, and not just with price rumors, grubstake lists, and crew drama. We hashed those out, too. But mostly we talked about how COVID-19 would change each facet of our work. Did we need different insurance? Where in the global supply chain were we going to get PPE? 

The essential humanness of our pursuit is the same. We go in search of food for ourselves and the nation. We go in search of connection, to each other and the ocean that sustains us. But that connection looks different this year. Solidarity looks like a mask and an open phone line to help our fish friends navigate the process. We show our love by checking in on how our neighbors are implementing social distancing before we trade parts from an appropriate distance. Kind and clear communication is key to everyone's comfort level and safety. We connect in lawn chairs spaced far apart. We smile at babies who reach for us but cannot hug us. We postpone visits from friends and loved ones. We adapt. 

We do this for the health and safety of all. But also, because we've built these small businesses over generations and lifetimes. They are essential and worth protecting. Stay the course, my fish friends. The safety of the season, our food supply, and the health of our friends and neighbors is in our hands. 

Be kind to each other, and have a safe and successful season. 

See you on the grounds.

For any questions or suggestions for Mug Update please email jamie@akmarine.org 

Mug Update: Yes, non-Alaskan fishermen still have to quarantine (Mandate 17)

We’ve received quite a few questions from fishermen after the Governor’s recent announcement that interstate travelers will no longer quarantine when entering Alaska as of June 5, 2020. See the update on Mandate 10 here. 

HOWEVER, this does not relax the requirements in the State of Alaska Health Mandate 17, which says that fishermen entering Alaska from another state MUST quarantine for 14 days. 

Tom Koloski from the State of Alaska Unified Command was clear on this during the update webinar on Mandates 10 and 17 with United Fishermen of Alaska (UFA). Please watch both UFA webinars and the Discovery Health webinar with National Fisherman before you head out for the season, whether you are traveling to the grounds or fish locally. 

Take care of each other out there, and have a safe and successful summer.

If you have any questions or suggestions for Mug Updates, please email Jamie@akmarine.org.  

Mug Update: Testing Available on the Homer Spit

A new testing site opened in Homer on Friday at the Boat House Pavilion on the Homer Spit. It will be open daily until 7 p.m. through the next week to test seasonal workers coming in from out of State. Testing is also available 24/7 at the South Peninsula Hospital’s main entrance parking lot.

If you have questions or suggestions for the Mug Update please email Jamie@akmarine.org.

Mug Update: Covid-19 Testing Locations for Alaska Fishermen

Testing is one of the key ways that we can help to slow the spread of Covid-19. It does NOT eliminate the need for quarantine, but the combination of quarantine and testing is a powerful tool to protect our friends, neighbors, families, livelihoods, and food supply.

Testing is now available for commercial fishermen at the Ted Stevens International Airport and other locations. You MUST pre-register in order to receive a test. Check out the PDF below for instructions.

Additional testing sites are also available including:

• Anchorage:  301 Calista Court, Anchorage AK 99518 - (907) 538-4421

• Wasilla:  3122 E Meridian Park Loop, Wasilla, AK 99654 - (907) 864-4642

• Kenai:  10543 Kenai Spur Hwy., Kenai, AK 99611 - (907) 395-0463

• Dillingham:  240 Harbor Road, Dillingham AK 99576 - (907) 764-8879

You can also find the State of Alaska testing location portal, updated daily, here.

If you have any questions or suggestions for the Mug Updates please email Jamie@akmarine.org.

Mug Update: Set Net Appendix to Health Mandate 17

The long-awaited set net guidance arrived on the State of Alaska website as Appendix 03 to State Health Mandate 17 and applies to commercial harvesters not covered under the original mandate. Be sure to read and understand the entire document, but here are a few things to get you started. 

Site manager

Many set net operations have multiple permit holders, so who’s the Captain? In Appendix 03, the Captain is referred to as the “site manager.” While anyone in an operation usually knows who’s running the show, the “senior permit holder” who conducts business on behalf of the operation will be responsible for adherence to the mandate and submitting the acknowledgement form. In the case of my family’s operation, my dear old Dad will be on the hook for our paperwork and how I conduct myself.

Travel Options

The State has expanded its previous guidance on self-quarantine methods to include the following two options.  

1. Mid-Travel Quarantine: 

• “Harvesters will travel to Alaska and observe a 14-day self-quarantine period in temporary lodging in a large community with a General Acute Care or Critical Access Hospital (i.e., Anchorage or Juneau) prior to beginning onward travel to their final destination community. This method will allow harvesters to immediately begin provisioning and operating under the protective measures in Section VI upon arrival to their destination community.”  

This option is not required but is highly encouraged for Alaska residents traveling to another Alaska community to fish. For those of us who live in communities with critical access hospitals, I read this to mean that we should observe a 14-day quarantine at home before traveling to another Alaskan community. 

1. Post-Travel Quarantine 

• “Harvesters will travel to their final destination community in Alaska and observe a 14-day self-quarantine period prior to any interaction with harvesters from other Harvesting Operations or members of the local community. This method will require harvesters to follow stricter protective measures in Section IV.b.iv after arrival to their destination community while in their 14-day self-quarantine period.” 

If you need to be hanging gear and twisting a wrench while you quarantine, then go directly to your operation’s place of quarantine and stay there for two weeks. No field trips unless it’s to get tested, folks. 

Arrival Screening 

You’re required to screen your crew as soon as they arrive at the operation by asking a list of questions and taking their temperature. Be sure you have enough thermometers for everyone. For us, we’ll be screening before our crew flies out of Ted Stevens International. 

Social Distancing in Town

When you’ve finished either quarantine option, you can then revert to social distancing requirements. Stay out of town as much as possible. Use curbside pickup options at parts and grocery stores as much as possible. Do not mix with other operations.  And as always, if you cannot adhere to these mandates please sit this one out. The fate of the season, food supply, and those we all know and love is in your hands.

Please email Jamie@akmarine.org with any questions or suggestions for Mug Update.

AKFN Covid-19 Resources Page 

Original Mug Update on Mandate 17

UFA Webinar on State of Alaska Health Mandate 17

Discovery Health Webinar on Vessel Procedures to Protect you and your Crew

Financial Minute with Robert Seid: Prioritizing Debt Payments

Prioritizing Debt Payments

What does it mean?  Taking on debt is necessary to make investments in your life that would otherwise be impossible. However, when there are multiple debts in the picture, on top of all other aspects of business or family, it can be easy to lose focus of which ones to pay down first. I see this time and time again in the lives of many smart and successful clients.

Interest rates are the key here, and it is best to pay down high-interest loans/debt first. Interest can be seen as a guaranteed loss. Therefore, minimizing interest burdens is a guaranteed way to keep more money. Einstein famously said, "Compound interest is the 8th wonder of the world. He who understands it, earns it. He who doesn't, pays it." 

As a rule of thumb, any debt with an annual interest rate of over 5% should be paid off as soon as possible. If it's below 5%, it's possible for the money that would pay off that debt to be more valuable elsewhere, but this is very dependent on the situation. I'll walk through some typical lines of debt, starting from the highest priority:

Credit Cards:  Often, have the highest-interest rate debt with annual rates typically between 15-25%. Furthermore, interest compounds daily. Ideally, you want to pay off Credit Cards in full every month and have a zero carryover balance. If you need more time to pay off the amounts accruing interest, you can transfer the balance to another card and defer interest accrual for some time. Balance transfers are merely a stopgap. Paying off the principal balance is the true solution.

Bank loans: Bank Loans for your boat or permit are likely the next in line. Highly dependent on the interest rate environment and the individual applicant, the rates could be between 5-10%. These are also priority debts to pay down but won't have the dollar-for-dollar impact of paying off credit card debts. HELOCs (Home Equity Lines of Credit) are also in this category, although they would typically have lower rates than a boat loan since the collateral is more stable. 

No-Interest Loans or Family Loans:  If you have family loans that are of a more nominal degree like 1-3%, these can be paid off after debts with higher interest. However, don't just stick to the math. If there is someone who has entrusted you with a low-interest loan, it may be well worth the goodwill to prioritize their repayment.

Debt itself is not a bad thing. In fact, it's a necessary step in making commitments to your fishing operation and your financial goals. Just be sure to take it on responsibly and have a plan to pay it down that aligns with your income capacity. 

About Robert

Robert Seid is a financial advisor and Partner at Blue Summit Wealth Management, an independent wealth advisory firm in San Diego, CA. He also captains an Alaska commercial fishing vessel in Bristol Bay. His experience in both industries provides him the perspective to share financial guidance specifically geared for commercial fishermen. To learn more about how Robert and Blue Summit can help you and your operation succeed, please visit www.bluesummitwealth.com or email him at robert@bluesummitwealth.com.

Robert started in the Bristol Bay fishery in 2011 as a green crew member, walking the yards to find his first opportunity. His love for nature and adventure found a home in Bristol Bay and, after his first year on the water, he was hooked. He has returned every year since and purchased his own vessel in 2019. As a skipper, his dedication to commercial fishing has only continued to grow.

Mug Update: Vessel Owner Resource Packet

• Mandate 17 Acknowledgement Form ("Appendix 2" of Mandate 17) If you have not already done so at the request of your processor, you should print and sign this form. Provide a copy to your processor, and keep at least one hard copy on your vessel. 

• Checklist of both recommended & required safety measures per Mandate 17. This checklist is intended to make preparation and ongoing compliance easier. However, you should still read and be familiar with all state mandates impacting fishing businesses. You can find those here.

• Essential worker letter template for crew traveling to Alaska. Fill in the blanks with your information, and provide this letter to any crew members who need to travel from out of state to come work for you. They should have a printed copy with them. 

• Crew contract template from AKFNs working group of captains and crew.

• Flyers for sanitation and prevention

• PPE

• Jobs Posting Flyer for help advertising a deckhand position with the Alaska Department of Labor.

Thank you to Under 60 Cod Harvesters and Ocean Strategies for sharing their Vessel Owner Resource packet with us.

Please send any questions or suggestions for Mug Updates to Jamie@akmarine.org.

A trade organization advocating for the health of Alaska’s Pacific cod fisheries and under 60 foot pot vessels.

Mug Update: Best Available Science and Alaska’s Response to Covid-19

The State of Alaska ranked third most aggressive in its response to the Covid-19 pandemic, including first place ranking in total public health emergency preparedness per capita and public healthcare spending per capita. 

To date, Alaska has had 371 total cases, with 277 recovered and nine deaths attributed to Covid-19. Yesterday one new case was reported while 14 people got well. The Alaska Department of Health and Social Services updates the information dashboard every day at noon. 

Alaska reported 13 people hospitalized for Covid-19 as of May 5th. We have 318 ventilators available. The purpose of flattening the curve is to ensure we have the capacity in our healthcare centers to care for all who are sick. By that metric, Alaska is doing a great job. 

The best available science from the Alaska DHSS tells us that the majority of people infected by Covid-19 get well at home. It also tells us that the best thing we can do to slow the spread of this virus is to continue to socially distance, wear masks when in public, sanitize hard surfaces, and wash, wash, wash our hands. However, if you or someone you live with is part of a higher risk group, it is critical to take additional protective steps.    

For those of you who are still skeptical that wearing a hot mask while sharing public spaces will make a difference, please read and enjoy this Reddit meme. 

AKFN advocates both the wearing of masks and the wearing of pants in public spaces and encourages everyone to not be, “that guy.”

In response to the best available science, each fishing region is boosting their medical capacity in preparation for the summer salmon season. Here are a few examples of the work our healthcare professionals are doing in addition to State health mandates 17 and others in coastal communities: 

In Bristol Bay, Kanakanak Hospital in Dillingham has upgraded its ventilators with the proper filters to support a Covid-19 patient while working to increase testing capacity. 

Samaritan's Purse committed a 20-25 bed mobile hospital with personnel on the East side of the Bay in King Salmon, where Camai Community Health Center is also working to ensure available testing. 

Processors across the State have increased medical staff on payroll to support their workforce while closing their campuses and requiring PPE.

And communities across Alaska are working with State and Federal governments to increase their testing capacity and work through evacuation plans.  

Fishing communities are also beefing up their support for their communities and fishing fleets. Here are some examples of just a few of the things communities are doing to keep fishermen and communities safe: 

Cordova has installed hand washing stations in the harbor and is implementing airport and harbor ambassadors to help folks understand the requirements in addition to increased sanitation staff. 

Kodiak requires fishermen to file a harbor use permit with the City of Kodiak and has designated one of its elementary schools as emergency medical capacity if needed.  

We couldn’t highlight every community or every effort to keep communities and fishermen safe, but we thank each of you for your work and dedication. We are in this together. Please keep up to date on the latest State and local mandates regarding your fishery by following local news outlets and checking City websites. And as Dr. Ann Jarris said during the Discovery Health webinar on vessel procedures, "If you take nothing else from this, remember that everything, literally everything, the success of the season, securing our food supply, the health and safety of everyone around you is in your hands. How you choose to act over the next few months will be the difference." 

Take care of yourselves and each other out there, and mask up in public.

If you have any questions or suggestions for Mug Updates please email Jamie@akmarine.org.

Mug Update: Keeping up with Local Politics

As we hunker down in our homes or on our boats, local leaders meet in communities across Alaska via teleconference to adapt and respond to the day-by-day changes in our world. Funding and orders originate with the feds, detour through the States where they become mandates, and end up in City governments where your elected neighbors translate them into a local gameplan. How can they protect their community and you? Do their neighbors agree with that approach? Can that person with the dog and the kids please, for the love of all that is good, mute their phone when they're not talking!? Is Bill really eating on Zoom right now? Turn off your camera, Bill. The button on the bottom of the screen, Bill. Yes, that one, Bill! But I digress.  

Your city council works together with the Mayor and city employees to plan and implement the local response you see every day. With limited exceptions for very small, rural communities without trauma centers, they have to work within the laws and mandates released by the State of Alaska as well as city codes and ordinances. Many local governments are working through complex issues right now that will affect your life and fishery for at least the next few months.  

Here are a few ways you can stay informed: 

• Follow your city or village's social media account or check their website to get notices about public meetings. 

• If your community stood up an emergency operations center, follow their updates on social media or check their website.

• Tune into local radio for news coverage on the highlights from public meetings. 

• Read the posted agenda and decide if you want to weigh in during public testimony. 

• Tune into local radio coverage of City Council meetings or call in.

Tips on Public Testimony: 

• Write down your comments, including your introduction.

• Begin by thanking the Council for their work and time. 

• Share your name and connection to the community.

• Be aware of the time limit, and plan your comments accordingly. 

• Be respectful, honest, solution-oriented, and to the point.

• Personal attacks are almost never productive. Though it may feel satisfying to call someone out, resist that urge. You'll have better luck getting buy-in on your idea if you go in with a collaborative approach. 

I have always found public processes to be appreciative of public engagement. It's oftentimes messy, and people disagree, but our government is basically one big group project. So, cut them some slack and pitch in to help where you can. Take care of yourselves and each other, fish people. 

Please email Jamie@akmarine.org with any questions about or suggestions for Mug Update.

Critical Infrastructure Industry Essential Employee Verification and Travel Letter

Crew looking to travel to Alaska fisheries as essential workers will need to carry this Critical Infrastructure Industry Essential Employee Verification and Travel Letter signed by their Captain. Find more information here.

Example Crew Contract for Salmon 2020

Download a suggested crew contract template for salmon season 2020. This contract is the result of a working group of captains and crew editing Sea Grant Alaska’s Fish Biz example contract, and it is the responsibility of the captain to tailor it to their operation. Thank you to Susie Brito, RN F/V Sea Breeze, for spearheading this effort. 

Mug Update: State of Alaska Health Mandate 17

The State of Alaska released COVID-19 Health Mandate 17 Protection Measures for Independent Commercial Fishing Vessels on April 23, 2020. The document is required reading for all Alaska commercial fishermen not already operating under a fleetwide plan--check with your processor or representative industry association for further information on fleetwide plans. Currently, Health Mandate 17 does not apply to set netters who will receive a separate mandate for shore-based operations. 

A few key takeaways from Mandate 17: 

• Firstly, let us all take a moment to grieve the social aspect of the preseason. Operating this year will be much different from previous years, which means a kibosh on parties in the boatyard. I know how much it means to reconnect with each other, but we’ve got to stay strong and stay away from each other! With this in mind, managing the personalities in your operation will be crucial because you will be spending a LOT of time together, during your 14-day quarantine for non-Alaskan fishermen and while social distancing as Alaskans*, and nobody gets to storm off in a huff. 

• Buy yourself a fun notebook because you’ll need to be documenting all the information required by the mandate, including; crew temperatures during quarantine, travel information, and more. 

• Communities will have differing protocols and rules for travel, operating in their harbors, and using their infrastructure. EVERYONE needs to read up on local rules. Local and non-local fishermen alike will need to be aware of and adhere to harbor and supply protocols, processor protocols, and, of course, State mandates. 

• Get some paper dishware (the more biodegradable, the better) and prepare to change up your galley game with masks and gloves for preparing meals. 

• Pack like you’re going to have to quarantine a sick crewmember with appropriate cleaning and medical supplies and PPE. 

• Familiarize yourself with healthcare options available to you and your fleet. Options will vary by community and fishery. Check-in with your processor, many of whom are increasing their medical staff for this salmon season. 

• And as we know from the Discovery Health webinar, if you cannot adhere to these guidelines and play by the rules, DO NOT FISH. The safety of our communities, food supply, and livelihoods is in your hands. If you take a look at these requirements and can’t make it happen, there is no shame or blame in that, and we all thank you for making the call for yourself and your operation.

• UFA will be doing a free webinar for all fishermen focused on Mandate 17 April 29th and 10 a.m. AKST.   

• Also, be sure to check out Robert Seid’s Financial Minute on the CARES act and commercial fishermen for a jumping-off point for information on relief funds.     

Remember, EVERYONE must adhere to these mandates throughout the season, or we all get sent home, and you will be endangering the lives of those we all know and love. I say again; EVERYONE must play by the rules. Stay safe out there. 

If you have any questions or suggestions for resources that AKFN can highlight, please email Jamie at jamie@akmarine.org. 

*Post has been clarified as information is clarified from the State of Alaska.