Grande Ronde Tribal Council on Sept. 27 approved a $600,000 line of credit for Redmond-based Shasta Administrative Services. Tribal Council also loaned $350,000 to the company in November 2022 and $400,000 in February 2023.

The decision brings the amount of tribal funds loaned to Shasta, which the Confederated Tribes of the Grand Ronde has co-owned since November 2012 with Honolulu-based Hawaii-Western Management Group, to $1.35 million.

According to the website Datanyze, Shasta employs approximately 60 people with annual revenues of about $18.5 million.

Former Tribal Council member Tonya Gleason-Shepek sought information about the third loan to Shasta Administrative Services during the Sept. 27 Tribal Council meeting and asked when the Tribe would brief the membership on the status of the company that members own a 51-percent stake in.

“That’s a lot of money in one year,” she said.

Tribal Council Chairwoman Cheryle A. Kennedy added that the Tribe is working on a long-term plan for the company and looking at having “things” wound up within 45 days.

However, Tribal economic development manager Bruce Thomas said Oct. 5 that the Tribe is seeking to sell Shasta but remain a client. After the sale, he said, the Tribe would recoup its outstanding loans before any money is distributed.

“We’re exploring that,” Thomas said. “It’s an industry where efficiency and economies of scale are critical. And what’s happening is that industry is consolidating with bigger and bigger operators. It’s hard for us with the number of clients that we have with that organization to really generate the profit we were hoping for. While we’re happy to have them as a service provider, probably being an owner is no longer in our interest. It’s made small returns, but not the kind of returns that from an economic development standpoint you’d look for. For many years, it was making a little bit of money, but it doesn’t meet the goals I would hope for for economic development.”

According to the Oregon Corporation Division, Shasta Administrative Services registered to do business in the state in 2001 to provide “claims administrative services and telephonic/electronic customer service support for medical, dental and prescription drugs.”

It works with Jeld-Wen, an international company that started in Klamath Falls and fabricates windows and fixtures, and other self-funded employers in the Pacific Northwest. The Grand Ronde Tribe became a Shasta client in January 2009. In 2012, the Tribe along with Hawaii-Western Management Group, which provides third-party services for insured and self-funded employer groups’ health plans in Hawaii, purchased the company from Jeld-Wen with the Tribe as the majority owner. The purchase price was not disclosed.

Then-Tribal Economic Development Director Titu Asghar said the purchase made sense in the Tribe’s pursuit of diversifying its non-gaming businesses because the company was already processing claims for the Tribe’s self-funded health plans.

The initial $350,000 loan to Shasta was designed to help the company address cash flow issues stemming from software upgrades and litigation.

Hawaii-Western Management Group, which owns 49 percent of Shasta, has not provided any additional funding to the company, Thomas said.

Shasta agreed in November 2022 to release the Grand Ronde Tribe and its entities from any claims Shasta or its parent company, Lamatsin LLC, have against Tribal entities arising out of a lawsuit filed by QualiCenters Salem LLC against Shasta and First Choice Health Network.

The lawsuit, filed in the U.S. District Court in Oregon, alleged Shasta and First Choice “regularly failed and refused to fulfill their contractual obligations” in paying QualiCenters Salem network rates for the treatment of a patient who worked at Spirit Mountain Casino. It was seeking approximately $1.5 million for past billing and payments for services it provided for the patient.

The Grand Ronde Tribe is traditionally reticent about publicly releasing information on how well its business entities and investments are performing. Annual briefings on the economic performance of Spirit Mountain Casino and the Tribe’s endowments are always held in executive session for Tribal members only, and rarely are specific revenue numbers released about the performance of such companies as Shasta and SAM Medical Products, a Wilsonville-based company the Tribe purchased a 20-percent stake in in December 2012.

“They’ve got value,” Thomas said about Shasta. “Because of this consolidation that is happening, other companies are looking to expand. So having some eight or 10 existing clients and a well-functioning system for Tribes … so Shasta’s system has value, too. That’s actually one of the assets of the company, the software. A lot of that is unique to Shasta. For serving Tribal clients, it’s got value.”

Thomas said a potential sale is in process and an unnamed company is currently looking at buying Shasta. He added that Hawaii-Western Management Group is on board with the sale as well.