By SCOTT MCKIE B.P.
ONE FEATHER STAFF
There has been a lot of talk lately dealing with how much debt the Eastern Band of Cherokee Indians is actually in, and a lot of different figures have been thrown around. Earlier this week, the EBCI Division of Budget & Finance Office of the Treasurer released a short report entitled “A Closer Look at Tribal Debt” in the hopes of clearing up some of the questions.
“There is confusion about EBCI debt vs. Harrah’s Cherokee Casino debt,” said Kim Peone, EBCI Deputy Finance Officer. “Casino debt is the responsibility of the Tribal Casino Gaming Enterprise (TCGE) and we want to help clarify any misrepresentation. As the Deputy Finance Officer, I felt it was necessary to educate and inform tribal members of the facts and eliminate any fear about our position as a tribal government.”
The report states that the debt of the tribe as of July 1 is $76.9 million and is comprised of the following:
– Cherokee Central Schools, $57.2 million balance with a 2014 payoff date
– Sequoyah National Golf Course, $10.8 million balance with a 2012 payoff date
– Loan guarantees for Tribal entities, $8.9 million balance with an ongoing payoff date, the three loan guarantees currently in existence include: Cherokee Historical Association Line of Credit, Tribal Bingo Enterprise economic development, and Balsam West.
All three of these are being paid from the Debt Service Sinking Fund which, according to Peone, is a savings account for the Tribe which earns interest. The report states that the Fund, as of May 31, is worth $134,115,316.
The report states that as of Sept. 30, 2010, the tribe’s assets totaled over $1.2 billion and the tribe has a net worth of over $620 million.
“We can be proud of our financial position,” said Peone. “Indian tribes and other municipalities are not as fortunate as this Tribe. We are conservative and mindful about the spending that occurs striving for efficiencies to bring about accountability and responsibility of tribal resources. It’s a constant task that will continue to be necessary to maintain our financial stability and continued success.”
The report also addresses the idea of what is considered tribal debt. Currently, the TCGE has a revolving credit limit of $650 million with Wells Fargo and a balance, as of June 30, of $494.3 million for the ongoing expansion at the casino.
“The casino is an entity of the Tribe that operates separate from the Tribal Government,” the report states. “Debt of the casino is not considered a long-term responsibility of the Tribal Government, but is the responsibility of the Tribal Casino Gaming Enterprise (TCGE).”
Peone concluded, “We have strength and power to sustain ourselves without the help of financial institutions. It’s a strategy, not a need, to finance our debt. The return on our investment weighs more than our cost to do business with outside institutions.”