Transcript Ho-Chunk Nation TERO Division

Nicholas Kedrowski, Great Lakes Region TERO Vice-Chairman
The answer to the question, “How does TERO benefit the tribe?”
has traditionally been answered by pointing to the “success stories”
of the clients.
The truth of the matter is that TERO does help, and success stories
are one of the primary reasons that TERO exists. TEROs provide the
help and training that give tribal members the skills, knowledge
and the tools they need to have the best chance of success, but
more importantly, TERO gives them HOPE.
Unfortunately, this answer does not always answer the question of
“Is TERO worth it?”
Another benefit of TERO is that it is an exercise in Sovereignty.
TERO governs the actions of businesses and employers operating
on tribal lands.
When TERO is both supported and enforcement upheld, TERO
enhances tribal sovereignty by making a definitive distinction
between a sovereign government upholding its own laws and a
business that has a “policy”. TERO is one law that a tribe can adopt
that is supported by and recognized by the federal government. The
Federal Highways Administration references TERO by name and
agrees* to the individual tribal provisions contained therein on the
projects funded in whole or in part with federal funds.
*The agreement to abide with TERO regulations, including fees, is contingent upon TERO being
administered equitably and does not single out those projects in the application of the law. If your
TERO is treated has provisions that provide waivers or is not administered equitably, the Federal
Highways Administration can take an automatic exemption on all of their projects as well. This
could potentially result in a loss of significant training and operational funding for your TERO.
In addition to the “Traditional” non-financial benefits of TERO
we have discussed, there are also “Traditional” financial benefit.
These are generally reported as wages. When we get a tribal
member hired on a job, we count the wages they will then
receive as a “benefit of TERO”. We also count the supportive
services we provide as a “benefit of TERO”.
The funding for these “benefits” can come from fees that TERO
collects but can also be provided by grants and sometimes
program funds provided by the Tribe directly. Not all TEROs
collect fees and those receive the majority of their funds as
allocations from tribal dollars.
Regardless of where a TERO gets it funding, at some point,
someone will questions if TERO is worth having. Several “hot
button” issues with TERO come up and are nearly universal to all
tribes. These include:
• TERO Fees are just passed back on us in the contracts.
• The unemployment rate hasn’t changed in years so TERO must
not be doing anything.
• Contractors can’t do as good of a job if they have to hire TERO
referrals, or the job will take longer if they have to hire TERO
referrals.
• Contractors won’t work on our projects if they have to pay
TERO Fees or hire our referrals or register with TERO
These are just a few of the standard arguments but no matter
what arguments are brought forward, they all lead ultimately to on
question.
“Is TERO worth it”?
When I was asked the question and the traditional answers weren’t
enough, I looked to outside resources to see if there were answers
there. What I found was that there have been numerous studies
done over the last several years that looked at the impact the “Big
Box Stores” had on communities and if that impact was indeed the
cause of the closing of their local counterparts. These studies
indicate that beyond the direct return each dollar spent in the local
economy has, there is additional or collateral affects that must be
considered. These studies have shown that the return itself does
vary, but all agreed that every dollar kept local, resulted in the
creation of additional money being brought into the local economy.
For Example, if you spent One Dollar ($1.00) at your locally owned
business, that One Dollar would result in an additional $.45 being
introduced into the economy from the outside. One Hundred Dollars
($100.00) spent locally will actually boost the local economy by One
Hundred and Forty Five dollars ($145.00).
TERO – Return on Investment
The Yakima Tribe in Washington did a study specifically related to
the issue of Tribal spending within their local tribal economy and
found a significantly higher return. Lee Adolph reported this to me
and indicated this study was conducted in the late 1990’s or early
2000’s while he was working for TERO. Their study found that
there was a much larger return of 7:1 for each dollar spent. When
you factor in reductions of other supportive type services that
occurred when their members were able to afford things for
themselves as well as other savings and reductions that resulted
from that reinvestment, you can see how tribal reinvestment can
really lead to significant returns.
I had asked our regional TERO members if they had looked at this
issue on a more local level. This figure was supported by Darrel
Winter from the White Earth Band who had this to say:
“When I was a very active leader in the Local Callaway Jaycees (on the
Reservation) & the MN State Jaycees, we visited over 30 local
communities, in a 9 County, including the White Earth Reservation,
where we started 4 separate Jaycee Chapters, in small towns. Our
point was; for every $1 Dollar invested in their Individual
Communities, A Seven Fold (ex: 7 x $1 invested) = $7.00 return,
circulating in the local businesses…”
While this information is valuable and does help support why
preference in contract awarding should be enforced it doesn’t go
directly to placing a financial valuation on the good TERO provides to
the membership.
In an effort to find a way to determine and report a strictly financial
view of the TERO landscape, I reviewed the data collected and
reported over the past several years with the Ho-Chunk Nation’s
TERO. I was eventually able to come up with the following formula:
T= (ab-(E-c)/E).
The Formula T= (ab-(E-c)/E) can best be described like this:
Where “T” is TERO’s Return on Investment,
“ab” is Actual Benefit, “E” is Expense and “c” is Collections.
On it’s own, it doesn’t really mean much, but when you insert the
appropriate data into the formula, you finally have a logical means
of calculating and reporting TERO’s fiscal worth.
Actual Benefits are known expenditures on clients such as supportive
services and assistance and the actual wages earned if we were able to
help them find work.
Expense is the annual cost of having a TERO and does not include the
money spent on clients. That money is the investment we are tracking
and is part of the Actual Benefit. The rest of the expenses are to keep
the doors open, lights on and staff the program so it all must be taken
into account.
Collections are just that, the fees we collect, plus any interest or other
revenue TERO brings in such as our EEOC contract. This also includes
any outside revenue streams and contributions. If a TERO does not
collect fees, simply use zero “0” for “c”. If your fees do not go to fund
your TERO but go back into a “general fund” of your Tribe, you would
still count those fees in this formula. They are still providing benefit in
some way.
TERO – Return on Investment
The screenshot above is the blank excel spreadsheet I put
together to simplify the calculation of the actual return on the
investment in TERO.
The Formula tracks actual benefits provided to tribal members. Without
using projections but actual, the formula will help you to demonstrate
that there is a genuine financial return in addition to the personal
benefits of TERO.
Because it is actual year-to-date figures that are used, the formula can
also be used to help evaluate changes that you make in your program
by following any changes in the calculated return helping to determine
whether the changes were positive or negative.
When individual figures are used, it can also calculate the effectiveness
of specific staff. For example, if staff are responsible for the collection
or administration of fees or fines you can run the calculations using
only their numbers. This also applies to supportive services issued.
Of course, this should not be the only factors considered when
evaluating your program or staff but it is another tool in your kit to
help support your program.
TERO – Return on Investment
Thank You for you kind attention
Nicholas Kedrowski