Secretary-Treasurer Financial Report FY20 Q1
Remarks delivered at the Quarterly Meeting – Friday, October 11, 2019
This quarter was very busy with the new Twin Cities Office building acquisition, meetings, and the Constitutional Convention Committee. The Wild Rice season ended with a good harvest that will supply us with delicious Manoomin for the coming year. The pow-wow season was one of our best yet, along with the many other events and happenings that represent the values and commitment of the Leech Lake Band of Ojibwe.
As we end our first quarter of the fiscal year, our financial health remains strong. We have had some obstacles such as an issue with billing the State of Minnesota for services in our Opioid Treatment Program. We are working with the State in an effort to resolve the issue as expeditiously as possible. The issue has not affected current operations and we continues to serve our people at the Opioid Treatment Program.
Our new Cedar Lakes Casino is open and bustling with renewed activity. The Cass Lake area businesses surrounding the new Casino all appear to be just as busy with the renewed traffic to the area. We have also expanded the Leech Lake Transit Program which allows for use of federal and state grants for transporting all employees to their worksites as well as providing better public transportation. Our Tribal Development Division and Leech Lake Financial Services has been holding home ownership informational meetings to assist residents with financing opportunities amongst many other economic development ideas and plans.
We passed the FY 2020 budget with a slight surplus which allows this administration some breathing room as we continue to prioritize the many programs and activities that we operate while keeping aligned with the Band’s mission statements to provide responsible operation of government. We will be starting our FY 2021 budget process in November and we will need your input. During the months of January and February we will hold public hearings in each district on the content of the budget. Your voice is needed on development of priorities and how to commit resources to those priorities.
Our Gaming and State tax and license revenue projections for FY 2020 are:
|Where the money comes from:|
|State Tax/License Revenue||$11,500,000|
|Where the money goes:|
|Indian Land Tenure Fndtn||$4,516|
|Deer Rvr LIC||$7,374|
|Buck Lk LIC||$7,374|
|THPO NPS 2019||$14,088|
|Political Action Totals||$15,000|
|Back Pack Project||$18,234|
|MN State Headstart||$18,889|
|Land Self Gov||$24,503|
|Special Pow wows||$25,906|
|Nature’s Lake – PW||$43,419|
|Inger – PW||$44,339|
|Battle Point – PW||$44,886|
|Toys for Children||$45,536|
|Onigum – PW||$46,289|
|Ball Club - PW||$52,497|
|Hert Sites Admin||$70,000|
|Labor Day – PW||$73,094|
|LL Wild Rice||$79,995|
|Summer Youth Emp||$80,653|
|Memorial Day – PW||$89,312|
|4th of July - PW||$102,000|
|Food Dist Nutr/Other||$149,426|
|Sp Ed PtB (Bug – School)||$163,019|
|Base (Bug- School)||$169,887|
|Twin Cities Office||$181,346|
|O & M||$243.914|
|MARRS 2003 (Bug School)||$359.653|
|Billing (Bug School)||$374,128|
|Educ Incent Asst (Endowment)||$500,000|
|Traders Bay PUD||$546,489|
|Youth Activities Pgm||$580,226|
|General Fund – RBC / Other||$1,687,507|
|Tax Rebate ($250)||$2,425,000|
The above represents only the Gaming and State Tax/License revenues portion of the total budget and the portion subsidized to the programs. Many programs also receive other funding through grants from Federal, State and other grants and program fees revenues for an additional $75 million for a total annual budget of $100 million. Also, we used some General Fund reserves from prior years for the large capital items such as the Education Endowment Fund equal to $500,000 and Property Acquisitions equal to $1,250,000.
The Band contributes to other entities operating budgets such as:
Leech Lake Tribal College = $500,000
Leech Lake Boys and Girls Club = $150,000 (Cass Lake)
Leech Lake Boys and Girls Club = $109,238 (Onigum)
Cass Lake Fire Dept = $ 51,508
S. Lake Fire Dept = $ 1,600
Walker Fire Dept = $ 8,000
Deer River Fire Dept = $ 7,200
A long term goal of this administration is to remain as stable financially stable through development of sound business practices and the adoption of adequate internal controls. Annual budgeting is the first step in this long term goal. We invite everyone to ask questions and make comments regarding this report and the following financial statement presentations and to attend our annual budget hearings.
Leech Lake Gaming
Summary of Operations
Quarter Ending September 2019
Once again, revenue has continued an upward trend for Leech Lake Gaming. The first two months of fiscal year 2020 saw revenue totaling $21.4 million. Compared to the previous fiscal year 2019, that is a $943 thousand increase. The 5-year trend shows a revenue increase of $4.8 million. In these two months, you see the closure of the Palace on July 22nd and opening of Cedar Lakes on August 1st, approximately a week and half of no revenue from one site.
Comparatively to last fiscal year, operating expenses have had a slight increase of $94 thousand. Payroll expenses and Cost of Goods Sold saw increase, while Operating Expenses saw a decrease. Total expenses through August 2019 was $15.2 million. Cost of Sales were $4.2 million, Payroll expenses were $6.7 million and Operating Expenses were $4.3 million.
Net profit also saw an increase these two months of the fiscal year. Total net profit equaled $6.1 million, compared to last year of $5.2 million that is an $849 thousand increase. Similarly, if you are looking at the 5-year trend, that is an increase of approximately $1.4 million.
From revenue to expense to net profit, all areas saw increases. Even with the closure of the Palace, where we didn’t see revenue from one casino for about 10 days, we have seen increases in revenue and profit. Cedar Lakes has been doing well in bringing in additional revenue and profit for Leech Lake Gaming, with hopes that will continue to trend upward for profit.