Fri Oct 9th, 2020
Robert L. Ortiz
The Southern Ute Drum
Good Day Tribal Members.
I know today is a very unsettling time, as we continue navigating our way through the transformation of the “new normal”, I wanted to take a moment to provide the Southern Ute tribal membership with an update on the impacts of COVID-19 on our businesses, and what we are doing to manage through today’s pandemic.
First, I want to address a couple of groups in our organization that we are very appreciative to have as part of our Growth Fund Team who provide essential services: Utilities, Facilities, Fairgrounds, Shared Services and all field staff. These services are critical to keep functioning throughout this pandemic. These groups have unwavering support from Tribal Council and our leadership team. This truly is a team effort. Secondly, Tribal Council through the Incident Command Team working with Growth Fund leadership and GFMC implemented protocols and procedures to help ensure a healthy and safe work environment.
The priorities of the team:
Now, let’s move on to the business and address the top two business related items that are on tribal member’s mind. (1) What are the financial implications to the Growth Fund due to the COVID-19 virus? (2) What is the Growth Fund doing to manage through the pandemic?
Q. What are the financial implications to the Growth Fund due to the COVID-19 virus?
A. The potential impact of this virus has resulted in an unprecedented response from society globally. As many of you are aware federal, state, and local actions are being taken to slow the spread of this pandemic across America and the world. As with all businesses and governments, there will be a financial impact and predicting the full extent of those impacts is nearly impossible. What we can communicate from the Growth Fund is that the businesses are much better prepared to weather this economic downturn than the financial crisis in 2008 or even the energy downturn in 2016. A few data points that are worthy of sharing to illustrate this point:
In the Energy Portfolio revenues will be impacted by the reduction in oil prices. Oil prices saw their second worst day in history on March 9, 2020 where oil dropped 31% in one day. However, there are many factors that will allow the Growth Fund Energy Businesses to manage through this downturn.
On the Non-energy side (Real Estate and Private Equity), we learned and grew from the 2008 financial crisis. Back then, GF Properties Group had 63% of its assets in mixed-use and land development projects that were producing very little, if any consistent income. GF Private Equity Group had a large portion of their portfolio tied up in direct investments including risky early-stage venture capital. Today, these businesses look totally different:
Q. What is the Growth Fund doing to manage through this pandemic and potential economic downturn?
A. First, we are grateful that we learned from the previous downturns and have set the businesses up to better weather these types of events. In times such as this, it is important to remember that we focus on what we can control and prepare for the future of what may or may not occur. As a result, we have acted quickly to respond to the pandemic to protect the Southern Ute tribal membership and our staff, continue to provide essential service to the membership and proactively keep business operations functioning in order to manage cash in the short term and protect the tribal member distributions for the long term. A few of the steps that we have taken include the following:
Immediately Growth Fund implemented a wage freeze to all Growth Fund Employees to better manage cash through the short-term disruption.
Offices in critical areas are on modified work schedules to minimize health risks and maintain critical business operations. Growth Fund field and office staff continues to work hard, safely, and professionally for the continued success of the Southern Ute Indian Tribe.
A few final thoughts …
The Growth Fund Directors, Presidents and managers of our companies and divisions monitor work-force size and needs on a fairly constant basis. Steadily over the last several years the number of Growth Fund employees has declined, resulting in a reduction in those operational costs. Particularly in the energy industry, the decline in commodity prices in March required Red Willow and Red Cedar to come up with cost savings by deferring or canceling projects. With the help of Congress, we also received PPP Loans to keep our employee rosters steady. In the meantime, we monitored the economy to see if this was a temporary blip or whether it would last longer.
Although there has been some re-opening, economic recovery has been very slow. Our businesses have not been as hard-hit as other organizations, but still this has been a very challenging time for everyone. In July the Growth Fund Directors had serious discussions about potential layoffs. With the focused attention of company presidents, we developed plans for potential layoffs and have worked closely with Human Resources in taking the steps needed to move forward. Red Willow eliminated five positions and Red Cedar eliminated four positions. Those actions at Red Willow and Red Cedar have also required re-organization and consolidation of job duties to maintain functionality. Through consolidation of the accounting and finance teams of GF Properties and the Growth Fund, we were able to consolidate workload and eliminate two positions there. Also, GF Internal Audit department has consolidated with the Internal Audit department with the Permanent Fund resulting in a net reduction of one position. Prior to the Stay At Home Order, GF Properties Group eliminated three positions in March. Although not part of the Growth Fund, Shared Services relies on the Growth Fund for Human Resources, and Shared Services has also eliminated four positions.
Throughout this process we have ensured that no member of the Southern Ute Indian Tribe has been laid off due to the pandemic. Our job duties and responsibilities under the Growth Fund Implementation Plan include making these tough calls, and we have made the decisions that we believe are best for the overall organization.
People remain our most important priority and we know that it is a very unsettling time in society. We have great people who have and will continue to contribute daily, and we will get through this unprecedented time. We need to continue to look out for the health and well-being of our families, our co-workers and our community.
We hope you will support us in making these tough decisions and we thank you for the confidence you have placed in us to make those decisions carefully and thoughtfully. Please contact Executive Director, Shane Seibel at 970-563-5006 with any questions or concerns.
Southern Ute Growth Fund