Tuesday, January 13, 2009

The Tribe In The News: Mohegan Government Cuts

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This installment of The Tribe In The News is an article published in today's The Day newspaper:

Mohegan Tribe Considers Slimmer Tribal Government
By Brian Hallenbeck
The Day newspaper
January 13, 2009

Mohegan - Apart from cost-cutting at its flagship, Mohegan Sun, the Mohegan Tribe will reduce its tribal-government operation through voluntary buyouts and, if necessary, layoffs, as well as rolling back salary increases and halting construction of an $80 million community center that would house administrative offices.

Members of the Tribal Council conducted meetings Monday to discuss the cost-cutting initiatives with tribal-government employees, of which there are nearly 400, according to Chuck Bunnell, the tribe's chief of staff. The sessions came on the heels of Sunday's quarterly membership meeting at Mohegan Sun, where tribal and casino officials presented a sweeping plan to rein in costs in the face of declining casino revenues and dire economic forecasts.

Following the membership meeting, casino officials went public Sunday with a plan to avoid layoffs by rolling back the salaries of all 9,800 casino employees Feb. 1. Senior managers will take a 10 percent pay cut. Middle managers' pay will be reduced by 7.5 percent and salaried nonmanagement and hourly workers will have their pay cut by 4 percent.

Salaries for tribal-government employees, many of whom got raises Oct. 1, the start of the tribe's 2009 fiscal year, will revert to Sept. 30 levels, Bunnell said. As with casino employees, annual and merit-based increases and company 401(k) matches will be suspended. The rollbacks will also apply to the nine Tribal Council members, Bunnell said.

The number of tribal-government positions that will be eliminated is unknown. Tribal government comprises such units as the Gaming Commission and police, fire, education and housing departments.

”It's not necessarily a head count,” Bunnell said. “A couple of years ago, tribal government hired an outside firm to look at efficiencies, so we've been working on this. It predates the economic situation, but based on what's happening with the economy, we've accelerated it.

”Until we see how many want to take it (the voluntary buyout offer), and what department heads come up with as far as their staffing needs, we won't know (how many workers will be let go).”

Decisions about the downsizing will likely be made around the end of February.

”Within tribal government, layoffs are a possibility,” Bunnell said.

Reaction was favorable Monday to Mohegan Sun's plan to avoid layoffs by imposing across-the-board pay cuts. Readers who commented on the plan on The Day's Web site, www.theday.com, overwhelmingly supported the casino's cost-cutting approach.

Bunnell noted that the casino had already reduced its work force through attrition, a point Mitchell Etess, Mohegan Sun's president and chief executive officer, made Monday during an interview on “The Lee Elci Morning Show” on WXLM-104.7, a New London radio station. Etess said the casino had eliminated hundreds of positions over the last 11 to 13 months, in part taking advantage of the high turnover endemic to the casino business.

”Turnover in tribal government is almost nonexistent,” Bunnell said.

Tribal officials also informed the tribal membership Sunday that they will suspend construction of the community center, which was to have been completed in December 2009. In addition to housing offices, the building is to include a swimming pool and a basketball court where the Connecticut Sun, the tribe-owned entry in the Women's National Basketball Association, would practice. The team's home court is the Mohegan Sun Arena.

Construction will be suspended until “we see an opening of the bond market for financing,” Bunnell said.

Annual distributions of casino profits to adult tribal members also are being reduced, though Bunnell declined to provide details.

”Members are joining in the sacrifices being made,” he said.