Hoopa Tribal Council Approves Christmas Per Cap Payment

Budget Concerns May Hamper 2012 Per Cap Payment

By Kristi Shelloner, Two Rivers Tribune

Hoopa Valley Tribal Council passed a motion during its regularly scheduled meeting on Thursday, Oct. 6, that a per capita payment will be made “around Christmas,” after a long discussion on the matter in executive session.
There are several issues around per capita payments that have stymied earlier attempts by the council to set forth the amounts and the dates of per capita payments as they are required to do under the tribe’s per capita ordinance, Title 40.

One issue is the interpretation of the ordinance itself. Does it guarantee the people’s right to a share of the tribe’s own revenues or does it give discretion to tribal council to make or not make payments as they deem proper?
Another issue with how the per capita payments are funded and how the calculation is made on what is owed to the membership. Meanwhile, the tribe’s budget is moaning under near collapse and a FY 2012 budget has not yet been passed or even introduced.

The larger question is, of course, how adept is the tribe at following its own rules? Title 40 does set out the process by which funding is calculated and how notice of payments is to be made to the membership.

The ordinance also sets out the basis of revenue, or how the amount due to the membership is calculated. According to Title 40, that amount is based on “stumpage payments received into the trust account; interest income on stumpage payments received into the trust account, royalty payments; interest income on the trust account; interest income from the general fund account; miscellaneous payments (e.g., business, residential;) and 15 percent of tribal entities’ net profits.

All these sources combined are called the gross revenue and the membership is entitled to 40 percent of the gross revenue distributed as per capita payments. (In addition, tribal council may determine on a case-by-case basis whether and how to distribute funds from settlements, lawsuit awards and various other sources.)

A problem arises when it comes to calculating, say, this year’s Christmas payment. The per cap law says that distributions shall be based upon the revenue earned in the fiscal year two (2) years prior; for example, the distributions for fiscal year 2011 shall be based on revenue from fiscal year 2009, using the accrual method of calculating, which means revenue is counted when it is earned or charged rather than from what it receives or pays.

The problem is, nobody has ever set those funds aside into a separate trust account. The per capita funds sit with the tribe’s general funds and if it gets overspent, oh well. The actual practice has been to use current year funds to pay per caps.
Title 40 also requires that the “Tribal Treasurer” submit to tribal council by Sept. 1, of each year, a written report, based on audited financial statements, indicating the total amount of revenue received for the fiscal year two years prior and the amount, therefore, available for distribution as per capita payments in the coming year.

On Sept. 30, the tribe’s CFO, Ed Lamb, submitted a memorandum to tribal council in which he “reviewed the viability of inclusion for a one-time per capita payment of $150 per member in the FY 2012 budget.” He concluded that funds on which the per caps rely have already been overspent in FY 2009 and FY 2010.

In short, per capita payments in the amount of $919,636 were paid in FY 2011, although the amount available for distribution fro FY 2009 revenues was only $514,199. The overspent amount, $398,436 was partially recouped in the residual amount left over from FY 2008 revenues.

Based on FY 2010 revenues, $654,396 is available for per capita payments in 2012. Projected spending on senior monthly payments and one $150 per capita payment stands at a little over a million dollars, overspending the FY 2010 revenues by more than $400,000.

Councilmember Hayley Hutt contends that the senior payments are not per capita payments and should not have been paid out of the per capita funds. If the accountants make the necessary corrections in their charts, there should be enough to pay the Christmas per cap, she said. But then where would the funds be found to pay for the senior payments? From the general fund. But that is nearing empty. Oh well, we’ll just have to pull it out of this year’s earnings. And that’s how it all started.

That has been councilmember Joe LeMieux’s concern all along. “If the council moves to pay the Christmas per cap, whose budget is it going to come out of, and what are we going to do next year? I support per capita payments but we can’t ignore our budget difficulties either,” he said.

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