From May Tilixam Wawa submission Note: since this submission members are also receiving $600 for June, July and August and the rules have changed for the CARES Act funding we received.
One thing I have learned over my 53 years is the importance of taking time for full consideration. A time to pause and reflect before taking an action that may be an emotional response instead of a thoughtful response. Everyone reacts differently to crisis, and certainly some crisis requires immediate action. There literally is no time and one must react in these situations. However, there are other times a slower and thoughtful response is best.
By the end of last year, and into February and March, the news of COVID-19 was on my mind. I had seen national news organizations having this appear more and more in the feeds. I remembered the SARS virus that also started from China and how that caused a lot of worry. SARS ended up not being the pandemic that was feared. This news seemed different. So, I read and watched and not only because Jeannette and I already had a spring break vacation planned. That trip had to be cancelled because so much was going on here in Grand Ronde.
When it became clear that this very well could be a feared world-wide pandemic scientists and movie producers have been predicting, Tribal Council was forced to act on closures. The first thoughts on my mind were how could we protect the health of our members as well as our workforce and local communities. The economic ramifications of this action, not knowing the extent of the closure, was my next thoughts. It was clear by the 50% reduction in casino business activity prior to closure that public confidence had diminished. No three-day closure would be sufficient to alleviate concerns. We had to close for an indefinite, but hopefully short period of time.
Actions such as these cause a lot of worry and fear. We did not want our employees to feel abandoned during this closure. Between the casino and the Tribal government, we employ about 1500 people. Entire families work for us. It took one person a night to think on it, but for me there could be no other action. We would continue to pay our employees during the closure. Having worked at the casino for 10 years as an Internal Auditor, I got to know all the departments. I would not turn my back on them now. The decision from the Spirit Mountain Gaming Board of Directors and Tribal Council was unanimous to utilize a special Paid Time Off (PTO) benefit to keep employees paid and with health insurance. We even discussed the importance of messaging and staying on the same page. These employees’ efforts had provided billions of dollars over the years to our Tribe and built up our substantial endowments and assets. The payroll costs amounted to a fraction of a fraction of a percentage of those dollars. We also wanted a workforce that could be brought back to work quickly when needed. Besides, that is who we are. We share and care as a people.
We also did not want our Tribal members to fear these actions. We knew we needed to decide now with incomplete information on funding. This decision was easier knowing there was federal funding in the works, although there was also nothing guaranteed. We were participating with our national and local tribal organizations to insure we had access to these funds. Plans for payroll forgiveness, if you kept employees paid, a loan to do so would be forgiven. Other programs offered payroll tax liability forgiveness, but this would be spread out over multiple quarterly credits and required initial cash outlays against future credits. Some programs offered exceptionally low interest, unsecured (meaning no collateral asset needing to be attached) funds. On top of these, there was Federal money for forward looking programs as well as money for impacts due to the virus in the works and, according to our lobbyists and the news, had a high probability of being passed. Finally, there is also the promise of some of the federal money the state received making its way to the Tribes.
However, these efforts were going to take time; time we did not have when making decisions. Luckily for us, we have great staff and a Tribal Council that is willing to talk things through to come to a consensus. We listened to our staff’s input, voiced our own, and decided to tap into the line of credit, with its historically low interest rates, to facilitate our cash flow in the interim. It did not make economic sense to cash out our endowments, since they had taken a big hit at that moment, nor did we want to do so if we did not have to. Our endowment funds typically do much better return than the 1.5%-2.0% costs on these loans. We also did not want to tap into our six-month reserves if we did not need to. Saving that fund for as long as we could allow us to be flexible if needed. We applied for the relief loan, which will also facilitate cash needs and can be returned if we decide to not use it. We know that Governor Brown has heard from us and is working on passing down some of the federal funds they received.
Also, since the longer we are closed has a direct impact on the money we receive to fund our government and services, we knew that we could not rely on those funds to give immediate aid to members. The federal dollars in the works would not allow a per cap payment and were slow in coming to us. Thus, we utilized the General Welfare Act (GWA) as an alternative method to give the members aid. We had recently adopted the GWA and applied to Elder’s Pension to make that program tax free. Using our non-reservation timber revenues (normally taxable), we declared the need and distribution to all adult members on the first round and utilized an additional highway fund for the second round. These COVID-19 relief payments are not per cap and are tax free because of the GWA qualification. Each of the $400 payments amount to the equivalent of $570-$600 depending on your tax bracket. That is the equivalent of $1200 for this last quarter going out to all the adult members. We doubled the funds in our emergency support as well as loosened some of the requirements for access. We hoped this would also help with fear and worry over the unknown that many folks were feeling. We have seen some progress, as the call load to the help line was reduced to two phone calls last week.
This week, we received the best news. The long promised federal dollars for Tribes was released into our banking account. While we have not disclosed the amount publicly at the time of writing this, we are thankful that it looks like it has the possibility of making us 90% whole with more to follow. Our endowments have recovered nearly all their value without cashing any out at their bottom values at the end of March and the beginning of April. Our emergency fund remains strong. We have used other people’s money (loans) to facilitate the short-term cash flow needs at a small cost to the Tribe. We found different solutions in our different world. We did not react in an emotional manner, fearing some short-term costs at the expense of our long-term financial well-being. We did not allow emotions and fear of criticism to get the best of us. We listened and considered all the collected information and acted with the longer term in mind. We took an ata and are better for it.
Michael A. Langley 