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Tribe, casino announce changes to employee pay
Harrah’s extends closure
Tribe, casino announce changes to employee compensation
BY HOLLY KAYS S TAFF WRITER H arrah’s Cherokee Casinos announced April 1 that its COVID-19-induced closure would extend through the end of the month, and that same day Principal Chief Richard Sneed issued his own announcements about changes to compensation for tribal employees in the weeks ahead.
The casinos in Cherokee and Murphy generate the majority of revenues for the tribal budget and will have lost six weeks’ worth of business by the time this is over — if, that is, the closure is not extended again. When it reopens, business will likely resume at much lower levels than typical as Americans continue to struggle with unemployment and the economic engine works to get into gear.
Currently, all casino and tribal employees are receiving pay and benefits despite not being at work, with tribal employees in essential positions receiving double pay for remaining at work. However, as of April 16 most casino employees will be placed on furlough. They will no longer receive a salary but will continue to receive medical benefits through re-opening or June 30, whichever comes first.
Tribal secretaries have been tasked with keeping the number of employees working to a bare minimum — currently about 12 percent — with those employees working very limited hours, Sneed said in a video posted April 1. As of April 12, those employees who are working will receive time and a half for their labor, not double time, with the remaining employees continuing to receive salary and benefits.
However, if the shutdown continues through April 26, employees who are still working will be compensated at their regular rate of pay and nonessential employees will receive 85 percent of their typical salary. These employees will be able to use accrued sick leave and annual leave to make up the difference and will continue to accrue new leave at the same rate they would if they had been working.
“As with all things financial, there’s not just this unlimited open-ended cash flow, and obviously now we don’t have revenue coming in from the casino with it being shut down as well,” said Sneed.
Overall, he said, the tribe is in a solid financial position to weather the storm, but the unknowns surrounding how long the shutdown will last and what business as usual will look like once it ends require making these changes now.
“If this goes on for a long period of time, what’s going to be painful is fiscal year ‘21,” he said. “So we do have cash reserves now. We want to preserve those cash reserves to make up for the shortfall that inevitably is going to come because we don’t have gaming revenue coming in.”
In a follow-up video posted April 3, Secretary of Finance Cory Blankenship explained that there’s need for caution, but not for panic. Because the tribe based its current budget on 80 percent of casino projections, the casino can miss projections by about $40 million without impacting tribal operations.
“Financially, the tribe is in a solid position to be able to weather that storm and to actually provide assistance to tribal members as well as to local business in getting through this particular crisis,” he said. “It’s interesting that the circumstances nobody could have predicted, but honestly we couldn’t have been better prepared for this situation from a finance perspective.”
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Mountain BizWorks, working with Dogwood Health Trust, announced a targeted effort to provide increased access to the highly anticipated Small Business Administration Paycheck Protection Program for nonprofits and small businesses in the region, with a focus on rural and minority and women-led organizations.
The PPP was created to provide loans to organizations impacted by COVID-19 and are forgivable if they are used to cover payroll, mortgage, rent and utility costs over an eight-week period after the loan is issued. The Mountain BizWorks regional application process opens for nonprofits on Wednesday, April 8, and will open on Friday, April 10, for small businesses. Information and application materials can be found at mountainbizworks.org/ppp/.
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BY HOLLY KAYS S TAFF WRITER D uring a special-called session April 9, the Cherokee Tribal Council unanimously passed a resolution designed to help small businesses operating on the Qualla Boundary survive the COVID-19 crisis.
“What we’re trying to do is to ensure that once this crisis is over and the economy has opened back up again that the small businesses that are here on the boundary will be able to open back up and stay operational,” said Principal Chief Richard Sneed, who proposed the resolution.
The provisions contained in the document are two-fold. First, it allows the tribe to remit tribal levy payments already made during the 2019-20 fiscal year back to the small businesses that made them. Secondly, it sets up a grant program to be administered by the Sequoyah Fund that will help these businesses continue to make payroll as most sectors continue to be shut down.
The resolution allows up to $1.1 million from the tribe’s $11 million tribal levy fund balance to be sent back to businesses that are licensed by the Eastern Band of Cherokee Indians, have a primary place of business on tribal trust lands and made levy and privilege tax payments for the current fiscal year.
Payments will be remitted on a sliding scale based on how much levy the business has paid. Businesses that paid less than $1,000 will receive a 100 percent rebate; those that paid $1,001 to $5,000 will receive 75 percent; $5,001 to $10,000 will receive 65 percent; $10,001 to $20,000 will receive 55 percent; $20,001 to $30,000 will receive 45 percent; $30,001 to $40,000 will receive 35 percent; $40,001 to $50,000 will receive 25 percent and greater than $50,000 will receive 15 percent.
Secretary of Finance Cory Blankenship said that there are about 220 businesses on the Qualla Boundary that could qualify for some kind of rebate. If all 220 were to submit an application, then the program would just about hit the $1.1 million mark contained in the resolution. However, he said, it’s anticipated that not all 220 will ultimately submit the required paperwork.
The resolution also provides for $250,000 from the fund balance of the general fund to be allocated to the Sequoyah Fund, which will then provide grants to small businesses to help them keep their employees paid during the closure. To qualify for a grant, a business would have to be licensed by the EBCI, have a primary place of business on trust lands, employ 50 or fewer people, and be impacted by the closure of the Boundary and nonessential businesses. In awarding grants, preference will be given to businesses that employ enrolled members. Grant funds must be used to preserve the employment and wellbeing of employees through the closure.
Businesses with 30 days of payroll greater than $10,000 will be eligible for a grant of up to $10,000, and businesses with a 30-day payroll less than $10,000 will be eligible for a grant of up to $5,000.
“There are going to be businesses that do not survive this,” said Sneed. “This is just an attempt to ensure that our local businesses, that once we open the economy back up, that they are able to stay in business.”
The grants will be available to businesses regardless of the enrollment status of their owners, said Sneed.
“Every bit of it trickles down,” he said. “Even if the business is not owned by an enrolled member, they are leasing from an enrolled member. If that business goes under and they go bankrupt and they fold, there’s no lease payments going to that enrolled member who’s the possessory holder of that land as well. The bigger pic
— Boyd Owl
ture is at the end of the day, all of this benefits tribal citizens because if the business folds and they don’t make their lease payments, I can assure you that those people who are the possessory holders count on those lease payments to come in on an annual basis.”
Council members — who sat at dispersed intervals along the horseshoe and in the area typically reserved for public seating to observe social distancing guidelines — had several questions about the resolution but were uniformly supportive of its provisions.
“Before 1997, this was all we had to depend on, the 220 businesses on the Qualla Boundary here,” said Birdtown Representative Boyd Owl. “That’s what people came for, to visit and spend their money here as a tourism town. I think if we don’t help these businesses, some are going to fold, and not all people come to gamble.”
Vice Chief Alan “B” Ensley said that he supports the resolution but that the tribe should also consider starting a food bank to help families who are struggling as a result of the crisis.
“I would hope that Council would authorize a couple million dollars for myself and the chief to start a food bank over there at the ceremonial grounds,” he said, adding that, “I’ve always supported the small business owners, but we’ve got to take care of our own at the same time.”
The Sequoyah Fund is accepting grant applications at www.sequoyahfund.org/tribal-economicstimulus. Paper applications are available at the EBCI Finance Office.
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