Now that it has progressed from the stages of property taxation to debenture financing, Tzeachten First Nation is closer to achieving its economic goals.
“It’s just the calm before the next storm, yet we’re ready to jump in and make our goals a reality,” says Ms. Sheila Schmidt, General Manager of Tzeachten First Nation, of the past three years since the First Nation joined the First Nations Fiscal and Statistical Management Act (FSMA) through the First Nations Tax Commission (FNTC).
“We may have new responsibilities and requirements to meet, yet we’re excited about how our plans are coming together in a tangible way,” adds Ms. Schmidt.
Located in the Upper Fraser Valley within the city of Chilliwack, Tzeachten First Nation owns its own commercial development, including the Vedder Crossing Plaza, which houses a grocery store, bank, restaurant, medical clinic and several retail stores.
Ms. Schmidt first began leading Tzeachten First Nation’s management team in 2002 and oversaw their transfer from implementing property taxation under the Indian Act to creating their own laws through the FSMA.
Having taken advantage of the services offered by each of the FSMA fiscal institutions, Tzeachten First Nation has become one of three First Nations in Canada to receive certification from the First Nations Financial Management Board (FMB), which will provide them with the requirements to become borrowing members through the First Nations Finance Authority (FNFA).
Ms. Schmidt says she is proud of their progress since they first started to head in this direction three years ago.
“The first trigger for us was going under the FSMA,” recalls Ms. Schmidt. “That was when we realized that not only would we improve our jurisdiction and regulations through FNTC, we would improve our financial practices through the FMB certification process, and that would take us to another level of sophistication, which would ultimately result in this end benefit: debenture financing through the FNFA.”
It’s a natural next step for the First Nation, which has already experienced the benefits of First Nations property taxation. With a membership of 500 members, half of whom live on-reserve, Tzeachten First Nation has already witnessed significant economic growth, resulting in an exponential increase in administrative staff.
To address the shortage of office space, Ms. Schmidt oversaw the expansion of their administrative building, a $430,000 construction project, the type of initiative that could have been financed through FNFA debenture financing.
Not slowing down anytime soon, two shovel-ready projects are ready to proceed to construction. The groundwork for a seven-unit townhouse complex has been laid out, which will provide housing for Tzeachten membership. This will be the third residential development for membership. In addition, there are approximately 1,500 non-member residents residing in seven on-reserve residential developments that form part of their taxation folio.
Their other project is the construction of a multi-purpose building to be used for public sporting events and private community gatherings. Aside from the construction costs of the 3,500 sq.ft. building, they are budgeting for extra costs including: infrastructure services, storm water drainage systems, paved parking and lighting, a $1.3-million project they plan on financing with FNFA debenture funds.
Ms. Schmidt says that building the legal and administrative framework has been critical in their success.
“All the pieces of the puzzle have been coming together,” she says. “FNTC has been great — they have sample laws, which have been a valuable resource for us because it meant we didn’t have to reinvent the wheel.”
Now that they are a borrowing member of FNFA, Ms. Schmidt hopes to take advantage of the new revenue options, which will address their outstanding debt.
“Between our two loan payments, we’re paying about $10,000 a month in debt servicing because of aggressive repayment terms with our current lender. But if we refinance under the FNFA, we will save approximately $5,500 a month in debt servicing alone, and the same amount we’re paying right now to finance $1-million could actually leverage about $3-million.”
Having experienced first-hand the benefits of First Nation property taxation, Ms. Schmidt says she’s eager to share the successes of Tzeachten First Nation with other First Nations who may be considering joining the FSMA.
“The support we’ve received has been phenomenal — I would tell people to pick up the phone and call FNTC, or go to their website and look at the resource material there,” encourages Ms. Schmidt. “And even though it may seem overwhelming, I’d tell them you won’t have to work through it yourself – you’ll find support from the FNTC staff and plenty of us willing to share our own experiences.”