The city of Temecula has not yet received a $2 million check from the Pechanga Band of Luiseno Indians, an annual payment for road improvements and police services that, according to the city, was due June 30.

The tribe signed off on the $2 million a year payment in March when it approved an intergovernmental agreement that has the tribe paying the city $42 million over the next 21 years to offset the city's expenses associated with the recent addition of slot machines at the tribe's casino.

The agreement was spurred by the passage of Proposition 94 in 2008, a measure that changed how the tribe pays the state to offset the local impacts associated with its casino operations.

Previously, tribes paid into the state's Special Distribution Fund, a pot of money divvied up by the counties and governmental agencies affected by Indian casinos. The proposition changed that process, however, requiring the tribes to negotiate directly with surrounding jurisdictions, which in the case of the Pechanga is Temecula and Riverside County.

A deal similar to the agreement worked out with Temecula is being negotiated with the county.

Councilman Ron Roberts, the city's tribal liaison, said the tribe's deal with the county entails negotiating with various different departments that include the district attorney's office and the mental health department.

Temecula Mayor Jeff Comerchero said Monday that the tribe's discussions with the county "have not been fruitful."

Although he said he can understand why it makes sense for the tribe to seek out a three-party agreement that includes the city and the county, Comerchero said the city's money shouldn't be held up by those talks.

"At this point, we would like to have the mitigation fee we've negotiated with them," he said.

Tribal officials said Monday that a section of the agreement states that the agreement won't be final, or enforceable, unless and until a law enforcement pact has been hammered out by the tribe, the county, the city and the Riverside County Sheriff's Department.

"Although we had all hoped that agreement with the county would have been reached by now, we believe we are making progress. The payments to the city will begin when the county agreement is complete," Tribal Chairman Mark Macarro said in a statement.

"We were told the city is in need of this payment in order to make up its budget deficit. Though we empathize for the city’s budget deficit, this agreement is intended to mitigate reasonable off-reservation impacts, not solve government budget deficits."

When Comerchero was asked whether he was worried about the city's finances being affected by the tribe's inaction, he said, "I'm not concerned to the point that our city is going to be in trouble. But we're providing services for which we are not getting paid."

During discussions with the tribe last month about the payment, the city provided the tribe with a secondary deadline of July 30, Comerchero said.

That deadline also has come and gone without a payment being made.

Comerchero said that if the tribe doesn't make its payment soon, the City Council would probably direct the city's finance department to shift money around to compensate for the revenue shortfall.

Genie Roberts, the city's finance director, said the city has budgeted the $2 million as part of its anticipated revenue for the 2010-11 fiscal year, which started July 1.

That payment constitutes 3.7 percent of the $54.5 million in revenue the city has budgeted, according to city budget documents.

The state's approval of Prop. 94 allowed the tribe to operate up to 7,500 slot machines on its land, a much higher number than the previous cap of 2,000.

To address the effects on the area of adding that many machines ---- traffic, public safety costs, pollution from added traffic, etc. ---- the fine print of the proposition required the tribe to enter into an "enforceable agreement" with a neighboring city or the county in which the tribe's lands are located.

Earlier this year, city documents state, the Pechanga operated about 4,200 slot machines in the casino. If the tribe exceeds 5,000 machines, the city and the tribe have agreed to sit down and negotiate additional mitigation measures.

In addition to the $2 million annual payment, the tribe has agreed to pay up to $10 million within five years to help the city pay for a new interchange at Temecula Parkway and Interstate 15, which is where drivers exit the freeway on their way to the casino. The new interchange is designed to alleviate the notorious traffic congestion on southbound I-15, which sees cars queue up for miles from the Temecula Parkway exit when large events are held at the casino.

Call staff writer Aaron Claverie at 951-676-4315, ext. 2624.