Secretary-Treasurer’s Report

Secretary/Treasurer’s Report

Secretary-Treasurer Leonard M. Fineday

Greetings Leech Lake Band members! I hope and trust each of you are having a wonderful summer so far. It is my honor to provide this report to you regarding activities undertaken in July 2025. I will start with the quarterly financial report, as the RBC held our Quarterly meeting on July 11, 2025.

Government Financial Update

This financial report covers the first three quarters of FY 25 (July 1, 2024 to March 31, 2025).

As of March 31, 2025, our overall General Fund Balance was $51,283,712, which represents our total Restricted Reserve and General Fund Reserve dollars. Restricted Reserve funds totaled $32,600,750, representing a decrease of $6,549,250 since the start of the FY 2025 on July 1, 2024. This is the amount the RBC allocated to the Band member rebate payments in December 2024 where the rebate was increased to $1000 per adult band member and $500 per minor. No other Restricted Reserve dollars have been spent or allocated through March 31, 2025.

As of March 31, 2025, the General Fund Reserve balance was $18,682,962, representing a $1,918,164 decrease since the start of FY 2025. This decrease is largely attributable to the expenses surrounding the Powwow Ground renovation project and the construction of the new TERO building, both of which were completed utilizing carry over fund equity.

Through March 31, 2025, Special Revenue income was $91,855,528, representing an increase of $31,554,640, or 52.3%, over the same period last year. Total Special Revenue expenditures through March 31, 2025 was $80,642,172, representing an increase of $16,622,518, or 26%, over the same period last year.

Importantly, the increase in Special Revenue income during this reporting period is indicative of external funding sources lifting funding sanctions and restrictions that had been in place due to us being delinquent in our external audits. Because we have worked diligently to get caught up, this funding is being restored. We have also increased our third party billing revenue by over $2,000,000 since last year.

Through March 31, 2025, total revenue for the Indirect Cost Pool was $9,948,446, representing an increase of $637,914, or 6.9%, over the same period last year. Total Indirect Cost Pool expenditures through March 31, 2025 were $12,942,660, representing an increase of $1,841,557, or 16.6%, over the same period last year.

This increase in Indirect expenditures reflects the filling of vacant positions within the pool, the expenses related to getting caught up on our external audits, and costs associated with purchasing and implementing our new financial software. As we continue to implement the 105(l) leasing program for BIA and IHS programs, we will also allocate additional funds to the Indirect Cost Pool which should hopefully help us lower the IDC rate going forward.

External Audit Update

I am pleased to report that the Leech Lake Band of Ojibwe will once again be caught up on our external audits by the end of August 2025, when the FY 2024 audit is filed with the federal clearinghouse. Just a few years ago, LLBO was four years behind in our audit reporting, but thanks to the diligence of our Finance Team and leadership, we have been able to get caught up.

This means that we will not be sanctioned on any external funds and shows our stakeholders that we are financially sound in our operations. As mentioned above, we are already seeing the positive improvement in various funding sources due to them lifting sanctions that had been put in place when we got so far behind on our audits back in 2021 and 2022.

Enterprise Financial Update

Leech Lake Gaming continues to have a banner year. You’ll recall that last year, I reported that net profit for FY 24 outperformed FY 23 by 85.6%. This was a huge increase in Gaming’s performance and represented a large step forward after a bad year in FY 23. So far for FY 25, we again are outperforming even the great year we had in FY 24. Through March 31, 2025, Net Revenue was up by 1.4% over the same period last year and Net Profit was up 16.5% over the same period last year. We have been able to utilize these substantial increases in profitability to invest in our infrastructure at gaming through expanded capital projects as well as increase the distribution to the Tribal government.

On cannabis, we are continuing to work on expansion to the Cass Lake area and to the eastern part of the Reservation. We have seen a more than 500% return on our original investment of $850,000 in the first year of operations. This does not include the more than $700,000 in tribal tax revenue that has been raised.

Wellness Center Project Financing Update

On May 28, 2025, LLBO broke ground on the Cass Lake Wellness Center. Later this fall, we will break ground on the Ball Club Wellness Center and soon thereafter on the Kego Lake Center Wellness expansion. The total projected investment is $51,400,000 for this major three-site project. I am pleased to report that in conjunction with our finance team, we have developed a financing package leveraging state, private and institutional sources that leave LLBO General Funds intact.

In total, we expect $24,000,000 in MN Cash Bonding funds, $9,300,000 in New Market Tax Credits, $15,100,000 in 105(l) lease debt service reimbursement loans, and $2,000,000 in TransCanada Energy Community Wellness funds.

Here is a site-by-site breakdown. Please note that these are estimates at this time.

  • Cass Lake:
    • Estimated Cost: $37,000,000
    • Funding Sources:
      • $13.6M from State Bonding
      • $9.3M in NMTC Equity
      • $14.1M in 105(l) Reimbursable Loans
    • Note: The Cass Lake numbers are close to being finalized and locked in.
  • Ball Club (Estimates):
    • Estimated Cost: $10,800,000
    • Funding Sources:
      • $8.8M from State Bonding
      • $2M in 105(l) Reimbursable Loans
  • Kego Lake (Estimates):
    • Estimated Cost: $3,600,000
    • Funding Sources:
      • $1.6M from State Bonding
      • $2M from TC Energy

Finance Software Update

As we continue the ever-present work of creating efficiencies and improving quality of services to our Band members, we are making substantial progress on transitioning our far outdated finance software, commonly known as an “ERP” – an Enterprise Resource Planning software. We have utilized New World as our ERP, but the provider is reducing support, offering infrequent updates, and increasing system limitations, which required us to invest in a new ERP.

Our new ERP is known as Sage Intacct and will provide several operational benefits to help streamline our finance and accounting functions within the Tribal government. The system promises to offer improved efficiency and accuracy through automated workflows and reduced manual data entry, provide real-time financial visibility and reporting to assist department and leadership with decision-making, provide cloud-based access for increased flexibility and better audit and compliance readiness with clear digital trails for all transactions and approvals.

Overall, this new system will help bring Leech Lake financial operations into a new era of accountability and streamline our processes to better serve our people. This project has been going on for several months and we expect the new ERP to go live in September 2025.

Conclusion

As I reintroduce this written monthly financial report, I thought it prudent to focus on a primarily financial update for our Band members. Please continue to watch for regular updates on the Tribal Brief Podcast and KOJB. Overall, Band members can rest assured that LLBO remains in a very strong financial position and we will continue to work together to keep it that way, insuring budgets are timely completed, financial protocols are followed, and audits are reported and finalized on time. And even as we do that, all the other work continues within the State and Federal governments and our intertribal organizations. Leech Lake is once again at the forefront of Indian Country for our collaborative leadership and innovation. Chi Miigwech for the opportunity to serve each of you and I wish you all the best in these final weeks of summer as we transition to ricing season and the fall!