- Amnicon Bay Lease Agreement On Madeline Island
Notes by S. Deragon
At present time we have requests for information concerning the Amnicon Bay
lease agreement. We’ve requested a historical account of the terms of the lease
agreements. We’ve requested information on the fair market value & how this was
determined. We’ve asked about the issue of inadequate septic systems and the
renting of cabins on the property. As we receive this information, we will inform the
Members. Meanwhile, we will tell you what we do know of the lease.
Since 1967, the Tribe has leased lakeshore property on Madeline Island to
Amnicon Bay Developers. The lease amount is to be negotiated every five years. At
the February 11, 2009 Special Tribal Council meeting, the former Tribal Attorney,
Susan Aasen, presented Resolution No. 2-11-09-38. She stated that Amnicon Bay
complied with all of the requests from the Tribe (we have yet to know what these
requests were). A final figure of $112,590.00, annually for five years was agreed
upon. Susan Aasen assured the Council that Amnicon Bay developers were no
longer renting out cabins and “the septic systems were brought up to speed.” She
further stated that the Tribe was receiving $94,500.00 per year.
Resolution No. 2-11-09-38 indicates that prior to the date enacted, the last time
the Tribe negotiated for a modification of the lease was in 1992. The Resolution
outlines a formula used to arrive at the lease amount, however, without knowing
how the fair market value of the property was determined, we truly do not know if
this lease amount is adequate. The Resolution states that the Tribe received
$189,000.00 for the years 2007 & 2008 and an additional $36,180.00 would reflect
the new lease amount covering those years.
First of all, what happened to the modification of lease amount for the years 1997
to 2002 and for years covering 2002 to 2007?
Secondly, we find discrepancies in the amounts stated by Susan Aasen ($94,500
/annually) and the acknowledgement of payments received in the Resolution No. 2-
11-09-38 ($189,000.00). At close review of the audit for FY2005, the Tribe received
$78,446.00. In FY2006, the audit reflects the Tribe received 0 (zero). According to
the audit, the Tribe received $78,446.00 in 2007. Although we have not had the
opportunity to see the FY2008 audit, I specifically requested how much money the
Tribe received for 2008. I was told that the Tribe had, again, received 0 (zero). The
Tribe needs to address these discrepancies and collect the appropriate amounts
due the Tribe or explain why the audits do not reflect the amounts that Amnicon Bay
paid to the Tribe. At the March 2010 Tribal Council meeting, issue was raised about
the Accounting Department receiving a check from Amnicon Bay in an amount over
$100,000.00. This check was not deposited. The Accounting Department held onto
the check for six months. The Treasurer of Amnicon Bay recently contacted the
Tribe to inquire as to why this check was not cashed & because of the six month
delay, needed to have the check returned & re-issued. Why was the proper
procedure for depositing funds not adhered to? What are the true amounts of
revenue that the Tribe has collected for leasing this prime lakefront property? Why
the huge discrepancies?
Lastly, I believe the Tribe should revisit the issue of septic problems to ensure
that this was, in fact, resolved. I say this because during one of the discussions with
former Chairman Bigboy during a Tribal Council meeting, he told the Members that
this issue was taken care of because he sent Susan Aasen (Tribal Attorney) and
an employee who works on Tribal leases to Madeline Island to check it out.
Members raised concern that neither of these individuals were qualified to assess
whether the septic systems were up to code, as it was also noted that the Indian
Health Service Engineer was not present during their inspection. Without an
engineer to evaluate the situation, how do we know the septic systems are up to
code? We’ll certainly be looking to see if the IHS Engineer inspected & had signed
off on this matter.
