Mid-Year ARDOR Report
February, 2004

Small Business Grants
In the first half of this fiscal year, the Borough has processed or committed in excess of 70 small business grants that total over $40,000. Grants to individuals, which ranged from $40 to $1,500, have assisted residents to start or improve enterprises including commercial artwork, retail sales, and services that include small engine repair, locksmithing, welding and photography. Grants were also provided to cover transportation costs for residents who traveled to Kotzebue to attend small business education coursework in Kotzebue and for payment for Alaska business licenses. Larger grants, of up to $5,000, have funded the start up costs of community art centers in Buckland and Selawik, a visit from a Chukotkan delegation to initiate trade relations with the Borough, a new espresso coffee delivery system for the Kotzebue Youth Council, and the cost of establishing a business plan for the merger of Kiana city and traditional village governments.

Small Business Loans
The popular revolving loan program was reopened in January, when PFD applications were sent out by the State of Alaska. The program, which has provided over 200 no-interest mini-loans to start up and established small businesses over the last three years, allows residents to utilize assignments of a portion of their PFD to fund profit-making ventures. Nearly a dozen loans over the past two weeks have funded the purchase of raw materials such as ivory and furs for local artists and financed the start of a new retail business in Kivalina. We anticipate a record number of loans this year due to the reopening of the commercial salmon fishery. Many of the approximately 150 resident permit holders will be using the program to purchase new nets for the coming season. The maximum loan for individual adult residents is $800 this year - the same as last year and down from the $1,500 limit of the two prior years. However, any adult resident can utilize the program to support the business venture of a friend or family member. Loans are made in the form of vendor payments only.

Small Business Education
The ARDOR sponsored two days of small business classes and counseling for 16 residents of the region in December. Classes were instructed by the Small Business Development Center of the University of Alaska. Borough staff provided a small business training class in Noorvik in January for six local residents. The Annual Arctic Small Business Gathering will provide another opportunity for residents to receive education and inspiration for starting small business ventures. Special focus of the gathering this year will be on commercial fishing. The date of the AASBG is tentatively set for two days in late March or early April.

Art Purchase and Marketing Program
Now in its third year, this program has provided for the purchase of over $450,000 in arts and crafts from residents of our region and beyond. Through use of a $105,000 revolving purchase fund, the Borough buys products directly from craftspeople and then markets the crafts to repay the revolving account. This program has insured that all area artists will have motivation to produce quality art on a regular basis. Products are sold directly by the Borough, through two local stores, through other stores in Alaska, and to outside residents who look at products on our website and make orders by telephone. In the first half of this fiscal year, the Borough has extended the use of our program to some Point Hope, Barrow, Shishmaref and Anaktuvuk Pass residents. Since the inception of the program, the Borough has purchased products from over 140 different individuals.

Fishery Development
Through a cooperative effort between the Borough, NANA Development Corporation and Bering Sea Fishermen's Association, salmon will be purchased and processed in Kotzebue during the coming season. A grant of $462,000 from the State and $70,000 in matching funds from the Borough over the next two years will be used to equip and refurbish a NANA-owned processing facility and provide start up costs. It is believed that a fresh, boneless fillet product will attract a good price on the market. A local fishermen's cooperative is currently being established to operate the fish plant. An organizational meeting is scheduled for February 20. Only one of over 150 permit holders in the area was active in the million pound chum fishery during the past few seasons due to the fact that there was no local fish buyer. Renovation of the plant will begin in May and newly purchased equipment will arrive on the first barge in late June.

Art Center Development
The Kotzebue Art Center is currently under design and scheduled to go out to bid this spring. Funding for the project was secured through a cooperative effort with Chukchi Campus of the University of Alaska. The art center will serve as a work place for local artists, including residents in treatment at the Maniilaq Alcohol/Drug Rehabilitation Center. It will also serve as a site for training in carving, basketry and sewing skills. It is a goal of the Borough to establish art centers in each of surrounding villages as a response to the need for new income-producing opportunities and healthier communities in general. The Borough opened an art center in Buckland in December, using a city-owned building. As many as 55 residents, many of them young people, have used that facility in a single day. The Borough has renovated and equipped a building in Selawik for use as an art center as well. It will open as soon as AVEC has connected electricity. In late January, the Noorvik city council approved use of an empty city building for an art center as well. A business plan and budget will be established at a meeting in Noorvik in mid-February and the Borough has reserved $5,000 in small business grant funds for this project. The villages of Kivalina, Noatak and Ambler have all identified existing facilities in those communities for art centers and await Borough assistance on development.

Other Activity
The Borough made presentations on its ARDOR program to the Alaska Municipal League Annual Conference in Nome late last year and to the Planning Committee of the Alaska Workforce Investment Board in a January teleconference. We are also working with the North Slope Borough to assist with their application and work plan for establishment as an ARDOR to serve that region. We believe that our grant, loan and art marketing programs would all be valuable components of their ARDOR as well.