Budget crunch hitting tribe

Posted April 02, 2009, at 9:01 p.m.

PLEASANT POINT, Maine — Veteran Fire Chief Maxwell “Chick” Barnes became the latest casualty of a deepening financial crisis on the Passamaquoddy reservation when he was laid off Tuesday.

Barnes, 70, is one of 25 reservation employees paid with tribal funds who have been laid off in recent months, tribal officials confirmed Thursday. The tribal office once employed 100 workers.

Barnes said he started the Fire Department 35 years ago with a water hose and a pickup truck and built it into an organization with firetrucks and volunteer firefighters.

Barnes said Thursday that he is disappointed and believes the layoff may have been related to his age and physical disability. Tribal officials reiterated Thursday that the layoff was due to money issues.

Public Safety Director Ralph Dana, who has been on the job about a month, now manages the police, ambulance and fire departments.

Last year, the tribe downsized its Police Department and eliminated its dispatch service, which now is provided by the Washington County Regional Dispatch Service in Machias. Earlier this year, the tribal council took the day-to-day administrative duties of operating the reservation away from the governor and lieutenant gov-ernor and hired Ken Poynter as tribal manager. Poynter has been on the job a week and reports directly to the council and governor.

“We ran out of funds to pay the governor and lieutenant governor,” tribal Councilor Eddie Bassett said Wednesday. He did not say how much the salaries were for the two leaders.

Gov. Rick Phillips-Doyle and Lt. Gov. Thomas Lewey retain their titles and continue to handle other duties on the reservation. Phillips-Doyle acknowledged Wednesday that he was upset at first. “After I thought about it somewhat, it seems like a good move,” he said. Lt. Gov. Thomas Lewey could not be reached for comment.

“It is unfortunate that we don’t have the funds to keep paying Chick [Barnes], and the tribe is extremely grateful for all the years of service.” Poynter said. He said he hopes the tribe will set aside a time and place to honor Barnes.

The crux of the reservation’s money problem lies with the tribe’s investments. In past years, the tribe has received about $800,000 a year from its investments. This year, that number is much lower, and because most tribal employees are paid with funds from the U.S. government that often have been augmented by tribal funds, the tribe no longer can afford to pay for some of its employees and services.

“It is not business as usual anymore [on the reservation],” Bassett said. “We don’t have the luxury of having an $800,000 a year tribal budget anymore; we will be lucky if we have a $1,000 a week tribal budget.”

A recent change in U.S. government policy added to the reservation’s cash-flow problem when it resulted in the tribe no longer being able to use federal money to pay for tribal leaders’ salaries, he said.

“It was a 50-50 share of tribal funds and [federal] indirect funds,” he said. “Since tribal funds were no longer available, the [people] had to be laid off.”

For a time, the Passamaquoddy Tribe owned the Thomaston-based Dragon Cement Co. When the tribe sold Dragon Cement, it agreed to accept annual payments instead of a total lump sum. “That money was enough to run both tribal governments at Pleasant Point and Indian Township to the tune of $800,000 to $1 million a year for each reservation,” Bassett said.

A few years ago, the new owners offered a lump-sum payoff, and then-tribal Govs. Robert Newell and Melvin Francis agreed, he said.

Newell recently was found guilty on 30 charges of misapplication of tribal and federal funds and making false statements to government agencies regarding use of federal money in tribal programs. He is expected to be sentenced later this month in federal court in Bangor. Francis died in 2005 in an automobile accident.

“The two governors were willing to accommodate [the company],” Bassett said. “But the governors drew upon that [money] in one fiscal year. I don’t know how much was spent in that one fiscal year but after a while Pleasant Point saw that money was being depleted from that account and we said, ‘we want our share’ and [In-dian] Township took their share and we split it 50-50 and so all of that money is gone. It was gone as of two or three years ago.”

Bassett said tribal officials were looking closely at all grants, programs and services. “Everything is on the table and we have to figure out, ‘OK gang, what are we going to do with what we have?’” he said.

Tribal Councilor Fred “Moose” Moore said the tribe has been broke for years but didn’t acknowledge it. “If the tribe was broke [in the past], and we haven’t done anything to improve our economy, imagine what our condition is now.”

Moore said that although the tribe receives millions from the federal government in terms of allocations for the health center, education and other programs, he agreed the extra money the tribe had from its investments is gone. He also said there was a need to remove politics from tribal operations.

“The council has determined that it would be in the best interest of the community to assign the responsibility of program management to a professional and not politicians,” he said.

Moore said tribal leaders would have to cut even more from the operating budget as it looks toward its 2009-10 budget. “This tribe cannot afford, like every other town in the county or state cannot afford, to fund programs at previous levels,” he said. “So certain measures need to be taken in order to consolidate certain programs to the extent that it is in the best interest of the community.”

Poynter agreed. “We are a microcosm of what is going on globally,” he added. “We are having to face some hard realities here in regards to financial resources and providing essential services to the community.”

Bassett said most people have accepted the changes without comment, he said, but not all. “Other people get upset because they … want the status quo; they want us to pluck out tribal funds right from the air,” he said.

Tribal officials are focusing on essential services, such as the sewage treatment plant, which costs $400,000 a year to operate, Bassett said. He said the tribe convinced the federal government to allow it to use funds earmarked for other reservation programs to keep the sewage treatment plant operating. Another essential service is the reservation’s drinking water, which costs about $100,000 a year.

Bassett said he personally has been affected by program cuts through the layoff of his wife, who was involved in the federally funded meal program for the elderly. “That was another program subsidized by tribal funds,” he said. “When the money ran out, the decision had to be made to lay her off. She was given no notice.” As tribal councilor, Bassett said, he removed himself from that decision. The meal program continues because the people who were laid off continue to volunteer their time, he said.

Bassett said Poynter is working with the tribe’s financial officer and department heads to look at ways to keep government running. “We haven’t given this manager his opportunity to come forward with a plan yet,” he said. “That will be one of his tasks.” All options are on the table including more layoffs and downsizing, he added.

Reaction on the reservation has been mixed. “They don’t like it, but they understand and they were expecting it because they knew. Everybody has been informed for many years now that this day was coming and we went on tribal TV to explain that this day is now here,” Bassett said. “The feedback I am getting is ‘You guys are doing a good job, you are doing the right things.’”

But other tribal members are unhappy. “They are blaming us [the council],” he said. “They are blaming me in particular, calling me a headhunter,” Bassett said.

Although there have been dramatic changes at Pleasant Point, it appears no similar changes have been implemented at its sister reservation at Indian Township, near Princeton.

Indian Township tribal Gov. Billy Nicholas continues to run tribal government there. Bassett said Indian Township is in a lot better shape financially because of income it receives from some of its business ventures — businesses in which Pleasant Point does not have a stake.

Similar articles:

ADVERTISEMENT | Grow your business
ADVERTISEMENT | Grow your business