Earnings

from Bering Sea fishing operations enable CVRF to distribute benefits

directly to the people we represent. In 2015 alone, Coastals fleet generated over
$35 million in net Bering Sea profits. That money is used annually to provide
benefits such as vocational training, post-secondary educational scholarships,
employment opportunities, grants for the purchase of critical equipment and
supplies, and much more. Since 2006, CVRF has invested more than $290 million
into our member communities, including: wages of over $35 million paid to regionresident employees working in our various operations, more than $4.6 million in
scholarships for over 1,200 recipients, $4.2 million in funds to help region residents
purchase $10.3 million in critical equipment and supplies, and $14.5 million in
financial assistance for community projects, heating oil, assistance, and elder
assistance.

Coastal Villages has been consistently expending CDQ dollars on local fisheries since
1998. In 2009, CVRF opened the Coastal Villages Seafoods fish processing facility in
Platinum to continue supporting the commercial salmon and halibut fisheries in the
Kuskokwim area and provide economic opportunity to a relatively small number of
fishermen with proximate access to those fisheries. This experiment, while costly,
supported jobs in an impoverished area that had not had consistent access to local
processing. Coastal planned to operate the facility at a loss for five years while the
fishery matured.

Over the last several years, with substantial pressure on the resource from several
user groups, policy makers have been unable to commit to a schedule of consistent
and reliable commercial salmon openers upon which the local processor, CVRF, can
plan operations. Additionally, CVRFs local fishery operations are still operating at a
significant loss, requiring ongoing yearly subsidies funded by Coastals earnings in
the Bering Sea. To ensure our region can weather the difficult economic times
ahead, and to alleviate the pressure on the local resource, thus freeing it up for
subsistence use, Coastal has determined it must pursue only healthy and vibrant
programs that provide the greatest benefit to the largest number of people.

The Kuskokwim is not a tenable commercial fishery at this time:

There is substantial pressure on the local resource, with tensions between up
river and down river communities, commercial and subsistence users
It was always known the fishery would operate at a significant loss for at
least five (5) years, but there are profound economic difficulties ahead and
CVRF can no longer continue subsidizing the fishery at the expense of other
programs
The local fishery operations have consumed over $66 million in the last
seven years, and accumulated $134 million in losses since 1999
Coastal believes that money can be better spent on programs that have a
greater impact on more families in the region

The in-region fishery program is not being cancelled, but put on hold for this
summer:

Economic pressures, downward trends in the industry, and tension between
in-region user groups have made this summer a particularly challenging one
for the operation of an in-region fishery
Global salmon prices have weakened in recent years and its not clear how
much, if any, they will rebound in the near future. Other processors in other
areas of the State have already closed their processing plants
While the program is on hold, Coastal will be conducting an in-depth review
of existing programs and benefits to enhance our understanding of which
expenditures are providing the greatest value to the largest number of
people
Coastal is currently polling region residents with an online survey designed
to solicit feedback on the various programs Coastal administers