Published On: Fri, Sep 21st, 2018

Tribe approves FY19 budget

 

The Charter and Governing Document of the Eastern Band of Cherokee Indians requires a proposed budget be presented to Tribal Council by the first day of July each year. Cherokee Code Section 117-47 entitled “The Balanced Budget Act” places further requirements on the proposed budget including a provision that expenditures not exceed revenues. Unlike the federal government, the Eastern Band of Cherokee Indians by law is not permitted to deficit spend. 

The Fiscal Year 2019 (FY19) approved budget contains nearly 200 programmatic budgets that encompasses all essential governmental functions of the EBCI and delivery of services to enrolled members. Producing a balanced budget of this magnitude is no simple feat and requires staff at all levels of the Tribe to come together and work toward a common goal.

According to the EBCI Office of Budget & Finance, the total budget for FY19 is $564,287,386 and the total operating budget is $179,400,404.  

“I am extremely proud of this FY19 budget,” said Principal Chief Richard G. Sneed.  “I am proud because our tribal programs and Office of Budget & Finance formed a cohesive bond through the budgeting process.  The programs were encouraged to rely on the expertise in budgeting and financial management that has been built in the Office of Budget & Finance, while offering justification for the needs of their programs.  I am proud any time our Tribe affects positive change, but particularly so when it is done on such a grand scale.” 

The EBCI FY2019 budget was presented to Tribal Council in June 2018 and budget hearings began in August. The budget was approved by Tribal Council at the September 2018 Budget Council session.  This FY2019 budget was the first to be presented and passed without changes being made on the floor by Tribal Council.  There were three tribal programs that upon going through the budget hearings were sent back to their financial analyst to provide additional justification for increased need.  

EBCI Secretary of Treasury Cory Blankenship said, “The Eastern Band has long been recognized as a leader in Indian Country for our financial stewardship. It is our responsibility and obligation to the enrolled members of this tribe to study financial trends and forecast the impact of financial decisions with a multi-generational focus.” 

It has been the practice of the Office of Budget & Finance to review actual spending from previous years, providing insight as to where cuts may be made without harming the services provided to enrolled members and preserving employment opportunities within the Tribal Government.  With a needs-based budget approach, there is little room in budgeted expenditures to make significant cuts. 

Blankenship noted, “The usual practice for any organization when balancing a budget is to analyze its top expenditures for necessity and alignment with its goals and objectives. For the EBCI, six of our top 10 expenditures are directly related to our tribal workforce, consuming north of 80 percent of budgeted resources. Our objective here is to gain better control of labor costs, preserve employment, and to reduce the number of positions we budget for but cannot or do not fill.” 

The top 10 actual expenses for 2017 for the Tribe were: Personnel (pension) – $41,623,048.16; Personnel (wages) – $39,253,678.26; Contract Services – $17,487,435.92; Health Insurance claims – $17,239,788.92; Fees & Services – $10,061,543.42; Capital Projects – $10,059,295.42; Health Insurance coverage – $7,891,623.97; Colleges (Direct Member Benefit) – $6,886,846; Personnel (Pension contribution) – $4,263,941.72; and Annual Leave (Personnel wages) – $3,934,074.87.  

Blankenship added, “The on-time approval of the annual operating budget, without a continuing resolution, is a tremendous accomplishment. Having done this in two-consecutive years speaks volumes for the cohesive leadership of this tribal government and the dedication of countless tribal professionals.” 

Tribal secretaries, directors, managers and administrative staff work with their partners in the Treasury Division – Office of Budget & Finance to build, shape and mold their budgets starting in February.  All budgets start at a zero balance and the tribal programs are required to build their budgets line by line, providing justification for their needs.  Tribal programs were mandated to work with their financial analysts and their internal team to take a deep dive into these planning efforts to ensure their budgets were fiscally conservative while giving the same level of excellent service to tribal members.  

This year’s budgeting process was particularly focused on reducing the tribe’s reliance, and arguably over-reliance, on gaming revenues.  Previous year’s budgets totaled between 88 – 100 percent of gaming distribution leaving limited funds for reserve, and at times forcing the Tribal Government into cost containment.  The Office of Budget & Finance analyzed the tribal budget in comparison to gaming projections and identified gaming revenues have been trending at a 4 percent increase each year, which is being outpaced by the EBCI expenditures which are trending at a 6 percent increase each year.   Without immediate and considerable action to curb EBCI spending now, the tribal budget would exceed gaming revenues as soon as 2023.  

It was decided to cut any tribal position that had been vacant since the first quarter of 2018 or prior unless the programs could justify the need for the position and give another position in its place.  There were 72 such positions which have been eliminated from the EBCI budget, resulting in a $4 million in cost savings. There was also a savings of approximately $1.1 million in operations resulting from trending and analysis on the part of the programs and the financial analysts team.  

– Office of the Principal Chief release, One Feather staff contributed to this report

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