County may stop handing out proceeds

Region

June 22, 2012

County may stop handing out proceeds

State auditors pressed officials about the process

By Bill O'Brien bobrien@record-eagle.com The Record Eagle Fri Jun 22, 2012, 07:14 AM EDT

TRAVERSE CITY — Grand Traverse County may stop handing out tribal gambling proceeds.

A divided county board this week voted to notify the Grand Traverse Band of Ottawa and Chippewa Indians that it won't act as a fiscal agent for distributing the current round of tribal grants, funded by a 2 percent share of electronic gambling revenue generated by the tribe's two casinos.

State auditors began to press local officials about the grant process a few months ago, specifically challenging funds that have been paid out to nonprofit agencies. The state maintains that practice violates Michigan's federal consent agreement with the band that dates to 1993.

"I wouldn't recommend the situation continue," said Robert Cooney, assistant county prosecutor and the board's civil counsel. "I believe that if we continue to participate in this program we are, in fact, breaking the law."

The Grand Traverse Band distributed more than $28 million in 2 percent funds over the past 20 years, including numerous grants to nonprofit organizations. The latest round of pending grant applications through Grand Traverse County include 15 proposals totaling more than $325,000, with 11 of those from nonprofit organizations. The applications are supposed to be turned over to the band by June 30.

Tribal attorney Bill Rastetter said the band is following guidelines on the 2 percent money agreed to by the state Attorney General's office in 2009. The state back then wanted tribal grants to nonprofits run through local governments, and the tribe agreed to do so.

"Nothing has changed in four years," Rastetter said. "The fact that some auditor is saying that this isn't right doesn't make it a dispute."

Some county officials questioned why state officials are challenging the grant process now, and wondered what authority they have to challenge it.

"We've been doing this for years," board Chairman Larry Inman said. "What are they going to do, cite us, fine us?"

But others said the county should remove itself from the grant process because of the questions raised by the state.

"We are no longer ignorant; we cannot ignore this," Commissioner Christine Maxbauer said. "Let's just step back and get out of it right now."

Commissioners' decision came at committee level, meaning it could change again before a final vote at the June 27 board meeting. A group including Inman, new county administrator David Benda and finance director Dean Bott will attempt to meet with new tribal chairman Alvin Pedwaydon and other tribal representatives before then to try and resolve the issue.

Leelanau County administrator Chet Janik said officials there also are attempting to arrange a sit-down with tribal officials.

Some Grand Traverse officials worry the dispute could damage the county's relations with the band.

"I believe it will be a slap in the face to the tribe, whether it's intended to be or not," Commissioner Rob Hentschel said.