VLT revenues fuel economic development on Swan Lake First Nation

RUTH BONNEVILLE / WINNIPEG FREE PRESS Enlarge Image

Suzanne Martin (centre), with boyfriend Nathan Sutherland, nephew Hayden Scott and sister Tiffany Martin, in one of the traditional log houses being built on the Swan Lake reserve.

It's easy to deride VLTs as a tacky way to make money, an unsophisticated economic development scheme every First Nation seems to fall back on.

But drive around Swan Lake First Nation, and you'll see just what those VLTs can do.

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The band's gaming centre (above) and gas bar/smoke shop in Headingley help drive economic development. (RUTH BONNEVILLE / WINNIPEG FREE PRESS)

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(RUTH BONNEVILLE / WINNIPEG FREE PRESS)

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As you drive south on Hwy. 34 toward Swan Lake First Nation, the landscape begins to change from flat plains to rolling hills. (RUTH BONNEVILLE / WINNIPEG FREE PRESS )

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Ruth Bonneville / Winnipeg Free Press Special project manager Bob Green hopes to see wind turbines rise in the fields behind him this fall.

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Housing manager Farrell Cameron oversees renovations on the reserve. A new council office is also being built. (RUTH BONNEVILLE / WINNIPEG FREE PRESS)

The colourful tangle of new playground equipment out behind the school? Paid for by VLT revenues.

The new band office that's sprouting up on the main highway? VLT revenues.

The neat row of newly renovated bungalows? VLTs again.

Video lottery terminals -- 30 on the reserve and later 30 in a lounge in Headingley -- are where Swan Lake started. Along with a prime parcel of land in Headingley, the VLTs helped the band pay off a crippling debt and created capital that catapulted it into other economic-development ventures such as land development, a casino near Carberry and a wind farm.

That progress has put the band in the running for a national municipal leadership award to be handed out at a gala this weekend in Toronto. The award is given out by Deloitte and the Institute of Public Administration of Canada. Swan Lake is up against public-service programs in London, Ont. and Lethbridge, Alta.

Before the casino and the land leases, though, the most impressive thing the band did with its VLT revenue was solve its housing crisis, the same kind of crisis that, to varying degrees, bedevils nearly every reserve in the province.

In the last few years, Swan Lake has renovated 95 per cent of its band-owned houses, often gutting them down to the studs to get rid of mould and rot. The houses, many of them bungalows, got new insulation, new siding and, best of all, a metal roof that stands up to Swan Lake's notoriously relentless wind far better than tar shingles. The roofs will last decades with little maintenance.

The renovations cost about $40,000 a unit -- $16,000 from the federal government and the rest from the band's own revenue. There are only about 10 or 12 homes left to be fixed, says housing manager Farrell Cameron.

Maybe the coolest thing Swan Lake did though, was to start building traditional log houses, in which not a piece of drywall is used.

The band invested in a sawmill and planer and set it up on its small satellite reserve near Carberry. Then the band hired two experts from Alberta and six band members and built a batch of traditional log homes on an almost suburban-looking street on the reserve.

One of the homes is Suzanne Martin's, her first house. Before she moved into the bright, piney open-plan house last April, she was living with her mom.

"I can change my living room around any time I want," she laughed as her sister tidied up the kitchen and her nephew, Hayden, scurried around trying to avoid putting on pants.

Swan Lake plans to build more log houses and export them off reserve as cottages.

In addition to the renovations, Swan Lake created a bunch of new housing policies.

Band members pay rent -- not common on many reserves where band housing is held communally. And in the last few months, the band has implemented tenant agreements that allow the band to recoup the cost of any willfully inflicted damage. If a tenant busts a hole through the drywall, the band can garnishee wages (most people work for a band-owned venture) or social assistance until the repair costs are repaid.

"Some people don't respect houses as much as they should," said Francine Meeches, Swan Lake's diminutive, no-nonsense chief.

"The cost of repairs comes out of everyone's pocket. I say 'It's not my money. This is your money.' "

Next, the band wants to install street lights and street signs on its main drags -- a no-brainer to anyone who has ever driven aimlessly around a reserve looking for the second right after the nursing station.

Swan Lake earns about $2.5 million a year, roughly a third of its budget, from own-source revenue instead of government grants.

"If we were to try and operate the community with just the revenue from the federal government, we would not be able to do what we've done," said Desmond Gould, a retired RCMP officer and the band's longtime manager.

What started with VLTs has expanded to include two gas bars and two smoke shops, prime agricultural land that's leased to farmers, office buildings and even a small bison operation.

Key to Swan Lake's success was property bought in Headingley with land-claim cash, payments for outstanding reserve lands promised under their treaty with the Crown. About 10 hectares on the Trans-Canada Highway were given reserve status, and the band built a gaming centre, the Arboc smoke shop and gas bar as well as office space leased to other bands.

At the main reserve on Highway 23, the band also runs a gas bar and smoke shop as well as a VLT lounge.

And the band has a third parcel of reserve land near Carberry, which will soon be the site of the province's third First Nation-run casino, the $40-million Spirit Sands casino and resort slated to open next year. It's the product of a gaming agreement between the province and the Assembly of Manitoba Chiefs and will be owned equally by all First Nations in the province, but Swan Lake is planning to capitalize on the project by building an RV park, a golf course and luxury cabins near the casino.

Another key to Swan Lake's success was paying off its $2.8-million debt. That got done six months early, in 2009, but it wasn't pretty.

One summer, band staff did their own version of Filmon Fridays. And there were cuts to programs including home care and to non-essential positions. The school principal became the education director, for example.

Every department had to create a budget and stick to it. There was no more raiding the housing budget to cover a shortfall at the school or vice-versa -- a common practice in cash-strapped bands.

And there were protests.

When the Arboc gas bar and smoke shop was preparing to open in 2006, band members protested on the Trans-Canada Highway. The band's chief at the time had a personal financial stake in the project, and the protesters called that a conflict of interest.

And when the band's debt-reduction plan had just begun, protesters angry over the band's financial problems staged a sit-in at the band office in 2003.

"One of the heads they were calling for was mine," said Bob Green wryly.

Green is the band's special projects manager, the guy responsible for many of the economic-development ventures.

"We went from wondering where the money was going to come from for the next cheques to having money in the bank to build on a plan and making some changes," said Green.

He credits successive chiefs and councils for creating a plan to pay off the debt and sticking to it -- something many bands have trouble doing when band elections bring turmoil every two years. As the debt shrank, that freed up cash to spend on other things.

In the last few years, Swan Lake has seen the construction of a new K-to-8 school with a full-sized gym and a new health-care centre and is almost finished building a new band office. The current band office is rotting from the ground up and was declared structurally unsound. It will also be home to two RCMP officers and an adult training centre.

This fall, the band is hoping to begin work on a 10-megawatt mini-wind farm to be built on a field on the reserve. A power purchase agreement with Manitoba Hydro is almost complete -- no small feat since wind projects have been notoriously tricky to get off the ground in Manitoba. Green says the revenue from the wind farm could be used to subsidize hydro rates for band members, used for education or poured back into other economic development projects.

maryagnes.welch@freepress.mb.ca

Republished from the Winnipeg Free Press print edition February 11, 2012 J1