Maine Islands Coalition Minutes November 21, 2008

In Attendance:
Roger Berle, Chair, Cliff Island, MIC Co-Chair
Malcolm Donald, Cranberry Isles, MIC Representative
Lise Pratt, Islesford/Cranberry Isles & Cape Elizabeth
Eva Murray, Mantinicus Island, MIC Representative
Rudy Graf, Isle au Haut, MIC Representative
Pete Anderson, Islesboro, MIC Representative
Mark Tierney, Little Diamond, MIC Representative
Lisa Shields, N. Haven, MIC Representative
Sonny Sprague, Swans Island
Alden Finney, Great Diamond Island, MIC Representative
Ted Hoskins, Isle au Haut
Kate Hotchkiss, Isle au Haut
Ellen Mahoney, Peaks Island
Marjorie Phyfe, Peaks Island, MIC Representative
Marjorie E. Stratton, Vinalhaven, MIC Co-Chair
Mary McAleney, Long Island, MIC Representative
Steve Train, Long Island
David Cousens, Maine Lobstermen's Association
Sara Cotnoir, Maine Department of Marine Resources
Hugh Cowperthwaite, Coastal Enterprises, Inc.
Bill Floyd, Genesis Fund
Dennis Damon, State Senator, District 28
Hannah Pingree, State Rep, District 36
Edward J. Mazurek, State Rep, District 47
Jonathan McKane, State Rep, District 51
Jane Eberle, State Rep, District 123
Peter Stuckey, State Rep, District 114
Elsie Flemings, State Rep, District 35
Andy O'Brien, State Rep, District 44
Rep Bruce MacDonald, State Rep, District 61
Leila Jane Percy, State Rep, District 64
Gillian Garratt-Reed, Island Institute
Mary Terry, Island Institute

Meeting Called to Order:
Roger Berle called the meeting to order at 10:10 a.m. and welcomed legislators old and new, the lobster community, guests, and committee members.

Legislative Updates:
Hannah Pingree, State Rep, District 36
Rep. Pingree provided an overview of upcoming legislative issues and concerns.
1. Economic Issues impact all state departments and all islands and communities
2. Energy Issues including alternative energy (off shore wind energy) and weatherization.
3. Lobster Industry, which was addressed more fully during the lobster panel discussion.
4. Affordable Housing
5. Zone Council Issues and rules around closed and open zones.
Rep Pingree emphasized that given the budget constraints, it will be important for the legislature to entertain a few targeted issues and bills. Her suggestion was to focus on the three bigger issues of energy, fishing, and housing while not losing ground on transportation.

Later in this morning, Rep Pingree noted that people on islands are bracing for a tough winter. At the same time summer people, suffering from the economic downturn, may provide less resources for the islands. A future agenda item might be a discussion of development issues for a strong year round economy on the islands.

Roger Berle asked, "What do you need from us?" A conversation followed around island support of critical issues. Roger's suggestion was to work toward holding the February MIC meeting in Augusta.

Jonathan McKane, State Rep, District 51
Rep McKane discussed his concern over property taxes along the waterfront and shoreline. Specifically, he noted plans to:
1. Submit legislation to confront issues of property taxes
2. Look at the Circuit Breaker program which as a tool only 50% of those eligible enroll
3. Work toward halting tax increases in the double digits noting that working Maine people are losing their homes.

Edward J. Mazurek, State Rep, District 47
Rep Mazurek noted his focus on the following three major issues:
1. The lobster industry is a vital cornerstone of Maine economic life. As legislators, we must keep the lobster industry viable and keep in mind that a downturn in the industry has ripple effects within the state.
2. How to maintain island communities including an examination of ferry transportation, affordability issues, and the ties to the lobster industry.
3. Looking at alterative energy, both tidal and wind.

Roger Berle noted that islands are an endangered species and that is what we are here to address.

Andy O'Brien, State Rep, District 44
Rep O'Brien noted that he was here to listen and learn in preparation for the session in January. He ran for office with an eye toward renewable energy issues.

Elsie Flemings, State Rep, District 35
Rep Flemings noted that issues of particular concern to her were:
1. Energy
2. Health Care
3. Tax Reform
4. Fisheries

Peter Stuckey, State Rep, District 114
Rep Stuckey expressed a desire to work toward keeping people in their homes, warm, fed and healthy. He also mentioned:
1. Property Taxes
2. Transportation Issues, including ferry issues
3. Parking
4. The Circuit Breaker Program

Other Updates:
Campaign for Energy Efficiency, Affordable Housing and Economic Development:
Bill Floyd, Executive Director of Genesis Fund, reported on the Campaign. Speaking on behalf of the Maine Affordable Housing Coalition, Bill noted that the campaign involves a broad base of support including public housing authorities, community action groups, non-profit housing development groups and others.

Using a portion of the Real Estate Transfer Tax that is currently transferred to the General Fund, the goal is to dedicate up to $14.5 million per year to support the issuance of $20 million in revenue bonds per year for a total of $120 million over six years. The revenue bonds would support the construction of new, energy efficient affordable housing, a weatherization program to increase the efficiency of current housing stock and an employer housing tax credit to encourage employers to assist employees find local affordable housing.

The coalition has met with Rep Pingree and other legislators, environmental and energy efficiency groups, and others to garner a broad base of input and support. In addition, the coalition has contracted with MIT for an affordability study that will include an island and coastal breakdown.

The program, if enacted, would provide funding suited to smaller scale programs for island and remote coastal communities. Bill asked for support in educating islanders about this campaign and provided a written overview of the campaign.

Energy Issues:
A general conversation about the task of insulating and weatherizing housing stock followed.

Rep Pingree noted that there are workforce development programs now working to train technicians to properly insulate, upgrade boilers and furnaces, and provide other weatherization services. This is a large-scale project as there are over 400,000 houses in Maine and many are not properly weatherized.

Leila Percy noted there are many community programs designed to help people weatherize. Often people are reluctant to seek out such help.

Rep Mazurek discussed a local program in Knox County that provides weatherization with the services of a Coast Guard crew. The community has set up a buddy system that encourages high school and college students to check on community elders.

A general discussion of possible models to create and provide energy efficiency followed. Discussion included the need to look at reframing the essential services and how they are provided. Rep Pingree mentioned the Efficiency Maine residential programs that provide light bulb replacement as well as other services.

Working Waterfront Coalition:
Gillian Garratt-Reed, Director of Marine Programs at the Island Institute, provided an overview. The coalition is working to secure bond funding. To date eleven properties have been funded and 200 inquiries have been received. The remaining funds will be allocated in 2009. Now is the time to look at future funding, especially in light of the economic climate that puts privately owned working waterfront at risk.

Roger Berle noted that money is available now and the staff is willing to work with applicants and help with the process.

Leila Percy thought it would be wise to look at working waterfront in conjunction with farmland conservation and Land for Maine's Future (LMF).

Hugh Cowperthwaite provided the web address for the program: www.wwapp.org. The site has a summary of projects and application information. The next funding deadline is January 15, 2009. If funds remain, another round of projects would be considered in April. Property can include affordable housing as a part of the project.

Lobster Panel Discussion:
Discussants included:
Sarah Cotnoir, Maine Department of Marine Resources
Ted Hoskins, Penobscot East Resource Center, Maine Seacoast Mission
David Cousens, Maine Lobstermen's Association
Hugh Cowperthwaite, Coastal Enterprises, Inc.

David Cousens opened the discussion with an overview of the current situation. The industry is in crisis and the fallout may continue for the next few years. The crisis is related to several poor (or normal fishing years), increased debt, and low prices for product. The industry, in conjunction with DMR and others, approached the Governor and asked for assistance in creating a new industry business plan. A task force of business leaders, working in consultation with the industry, has been charged to work on a plan for a lean, green, and efficient plan that keeps consumers.

A plan will be presented to the legislature. Making change will be difficult. However, if we do not make changes we will not have fishing communities. Right now, the boat price is as low as $1.90 per pound and lobstermen cannot make re-investments in their businesses to keep the industry strong. In addition, there is the cost of sink rope being required next spring. (Sarah Cotnoir later noted that there a loans available for sink rope.) There is no quick fix.

Ted Hoskins noted that this is the deflation in the industry. The lobsters are not in bad shape, they are out there, but we cannot sell them.

A discussion of adding value to the product followed and included the following points:

• The economics of processing plants require a steady stream of inexpensive product.
• What else could be processed to allow the plants to run fully and process lobster as harvested?
• Is it possible to create an extended frozen market? Right now, the market is for tails not knuckles and claws.
• Alternative processing technologies

Ted Hoskins and Steve Train noted that historically we were fishermen and now we are lobstermen. Access to other fisheries no longer exists which has increased individual dependence on the lobster resource.

It was generally agreed that the upcoming year will be tough and work needs to be done to strengthen the industry.

Sarah Cotnoir of DMR noted that the issue is with a weak economy and lowered demand leading to a glut of product. While there is pressure for government intervention, we cannot close the fishery under these circumstances.

She went on to discuss the series of zone meetings that have been taking place over the past two months. These meetings, along with input from other organizations, led to the Governor's Task Force. There are four broad issues:
1. Finance
2. Regulation
3. Processing Capacity
4. Promotion

Subcommittees relating to these issues will report to the Governor in April. Sarah Cotnoir noted that the Governor's Task Force report is due out April 15.

A conversation around financing followed. It is estimated the industry carries a debt of $75 million. A third of the fishermen are in good shape, a third are troubled, and a third are at risk.

Rep Pingree asked the group what we should ask for. David Cousens replied, before we ask for help we need to figure out a plan to help ourselves.

A discussion of how to "help ourselves" using the resources available followed. Generally, it was agreed that the following points and actions are important:

• Continue to promote Maine and Maine Lobster as a unique brand. Maine Lobster is a community brand not an individual brand, we need to work collaboratively to strengthen our brand
• Identify the network of agencies that can assist the local lobsterman
• Identify individuals in each fishing community to help spread the word and to help link those in need with services or those with questions to sources of answers
• Encourage all fishermen to work directly with the bank even if all accounts are in good standing. Building working relationships between fishermen and the banks is key to addressing or even avoiding financial problems for individual fishermen.
• Talk with lobstermen about restructuring loans and looking at potential buy down programs
• Encourage lobstermen to do everything possible to stay financially current
• Work to build trust between State Agencies and the fishing community - put a face to the various programs.
• Work to educate one another on the issues and possible solutions - use individual contacts, community meetings, meetings that include fishing families etc
• After zone meetings, have someone from each zone available to answer questions and unpack the information
• Invite bankers to community meetings (and advise them to dress appropriately!)

Rep McKane asked why lobster pounds are in such disrepair. David Cousins replied that pounds are no longer widely used as pounded lobsters are subject to shell disease. The disease causes 10 to 20% shrinkage making the pounds not profitable. Pounds that do exist are likely to be Down East or aerated. The ocean is a great pound, the lobsters do well on the bottom we just need to work on the timing for the catch and processing.

A conversation around zone council meetings as a method to hear from lobstermen and to share information followed. Again, the need for information regarding financial counseling and for each lobsterman to speak to their banker was discussed.

Hugh Cowperthwaite noted that different parts of the coast are affected by the industry crisis differently. Down East has less work choice than the southern coast.

A conversation around the creation of separate island zones took place. It was stressed that islands are unique communities and often do not have an economy that can absorb island fishermen should the industry collapse. Islands need their own rules and mechanisms to address island needs and to keep people on the islands year round. The idea of closed zones causes a reaction and presents issues regarding entry into the fishery.

Hugh Cowperthwaite noted that the zone meetings and the Governor's Task Force are meeting to look at these issues.

Sonny Sprague noted that Swans Island addressed these issues around 1984 when they got their own zone. It is not easy to discuss and implement trap limits or limiting effort but it is necessary. Sonny noted that islands are different from the coast. If islanders can't fish they can't find a job unless they leave the island. If we have to leave, our homes will be sold to non-residents who live on island for a month or two not year round. Yet, he was quick to note that "the only thing islands have in common is that they have water around them."

Senator Damon noted that in order to address the issues facing islands, legislators need to understand ferry issues and island issues. Leila Percy responded that this speaks to the need for MIC to meet at the State House and educate legislators.

Mark Tierney asked the amount of the current backload of product. It was generally agreed that is there is lots of inventory, perhaps up to 12 months backlog. This lead to a conversation about how make processing in the US viable.

Sarah Cotnoir suggested looking at the Pine Tree Zone to work with processing plants. David Cousins suggested that the Governor's Task Force was looking at marketing and perhaps we need to rethink this part of the industry business plan to become less dependent upon processing of product.

Rep MacDonald asked the legislators in the room to provide email addresses so that they might create a coastal and island caucus. Leila Percy suggested it might be more efficient to work with the rural caucus.

Leila Percy also suggested that marketing is important and the Maine Lobster Promotion Council is working to support that. She also suggested that lobstermen often do not join the local Chamber, which might be a good marketing tool. The website www.lobstercelebrations.com was also mentioned as supporting a marketing campaign especially in promoting lobster for holiday celebrations.

Roger Berle asked, "If you get through this crisis and winter is there hope in the long run to survive?"

David Cousins responded that the resource is strong but the economic environment is tough and could be for the next two years. We cannot wait to create a business plan or we will not survive.

A general conversation followed indicating the need for a new plan and the difficulty of implementing a new plan. Options included:

• A focus on the spring fishery for processing, a focus on the summer fishery for locally consumed product and a final focus on the fall/winter fishery for processing.
• Limit traps
• Regulate seasons
• Work on contract pricing
• Free market lobster fishery in spring
• Fisher coop in the fall to set guaranteed pricing for the lobstermen

The overall goal would be to create a supply and demand that helps the fishery be economically viable including reducing overhead costs.

Rep Pingree noted that trap limits are counterintuitive, fear makes it difficult for the legislature to legislate. and people have a hard time facing reality. People on islands are seeing the dire situation. While difficult, it is necessary to address the situation.

There has been some success in limiting traps and creating seasons. Both Swans Island and Monhegan Island are examples. While change is hard to sell, it is important to educate around proposed changes.

The conversation continued about the need for fishermen to understand business, to look at the entry process, and to look at owner operated protections for the small fishermen. The importance of the lobstermen as small businesses was noted. It was also noted that at zone meetings there are no secret ballots, so change can be tough and retribution is a concern.

Roger Berle asked, "What is the stomach of the legislature for helping those who don't want help?"

Leila Percy responded that we need to do it this year and not wait. We need to educate legislators to help them make the tough decisions. She also noted the need to retain the integrity and dignity of those in the industry who might not make it.

Hugh Cowperthwaite called upon MIC to work and think about this: "If an island loses 1/3 of the fishermen it has a huge effect - we need to try to not lose a 1/3 as we could lose the community on the islands."

The suggestion to hold the next MIC meeting in Augusta using an educational format was made. Roger Berle and others committed to this idea for the February meeting.

Leila Percy will work with Rep Pingree to choose a date. MIC needs to work to bring islanders to the meeting to provide a view of island life. Children and working people are important to show the real nature of the problem for real people.

Leila Percy cautioned MIC members and others do not refer to lobster as cheap. Rather encourage island community connections to people from away to support the industry and move live product now. Serve lobster a community events, fundraisers, inaugurations etc.

Rep Pingree asked that MIC support legislators facing this tough battle. She went on to note that it is important to pick bills that are closely aligned and make them the centerpiece in addressing the needs of the state. It is important to look at issues that overlap and are defined by a purpose. Previously she had mentioned Fisheries, Energy and Housing as three primary overlapping issues.

Roger Berle thanked the group for a lively and production conversation.

The meeting was adjourned just after 2 P.M.

Respectfully Submitted,

Mary K. Terry
Island Institute Fellow
11/08