Battle brewing over $9 million

By Marley Shebala
Navajo Times

FORT DEFIANCE, February 9, 2012

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A battle is brewing over $9 million in Navajo Nation supplemental revenues.

On Tuesday, Office of Management and Budget Director Dominic Beyal informed the Council's Budget and Finance Committee that his office has received about 77 requests that total about $80 million, all seeking to tap the $9 million.

The $9 million is part of $42 million in the tribe's Undesignated Unreserved Fund that is available for spending beyond what is in the 2012 budget.

As of November, the 2011 budget had been closed out, leaving a $42 million balance in UUF, mostly from one-time windfall payments such as a lawsuit settlement and annual lease fees. The $42 million is in addition to a required cash reserve of $17.3 million that is also kept in the UUF.

On Jan. 3, the budget committee approved a process to handle supplemental requests, earmarking all but $9 million for special purposes.

Under the proposal, which must be approved by the Council, $20 million would be held in reserve, along with the $17.3 million required under law. Around $7 million would be divided among the three branches and $5.6 million would go to the 110 chapters.

As for the remaining $9 million, B&F Committee Chair LoRenzo Bates (Nenahnezad/Newcomb/San Juan/T'iistoh Sikaad/Tsé Daa K'aan/Upper Fruitland) said it's "fair game," though the president can veto any supplemental spending bill he doesn't like.

Now it appears that the volume of requests, and political pressure behind them, is shrinking the chances of success for the proposed division of windfall revenues, which was carefully hammered out through negotiations with the three branch chiefs and budget committee.

Beyal told the committee Tuesday that he asked to be heard because he needed clarification on whether supplemental requests are subject to executive branch review, as is suggested by an Oct. 24, 2011, executive order from President Ben Shelly.

The order states that all supplemental budget requests must go through the "signature approval sheet" process, which involves legal review and "consideration, prioritization, and possible recommendation" by Shelly's offce to the B&F committee and Council.

Committee member Lorenzo Curley (Houck/Klagetoh/Lupton/Nahata Dziil/Wide Ruins), for one, directed his immediate ire at the messenger, pointing a finger at Beyal and Assistant Legislative Counsel Mariana Kahn and asking why his supplemental request was being held up by "bureaucrats."

Shelly's executive order may have limited reach, as it does not carry the mandate of tribal law, but Curley was incensed by the mere suggestion, saying, "We've lost control of this whole process. Now we have bureaucrats telling us what we can and can't do."

Bates asked Beyal if Curley's particular funding request met the committee's format, but was interrupted by Jonathan Nez (Oljato/Navajo Mountain/Shonto/Ts'ah bii Kin)

"Why are we asking him?" Nez said.

Nelson S. Begaye (Lukachukai/Rock Point/Round Rock/Tsaile-Wheatfields/Tsé Ch'ízhí) pointed at the committee's agenda and noted that Nez had two bills for supplemental funding up for review and neither had not gone through the SAS process.

Nez is requesting $$1.5 million for the Navajo Division of Transportation and $1 million to pay for potential redistricting litigation. The committee gave both bills a "do-pass" recommendation Tuesday.

Begaye said Beyal's request for clarification is weeks late in coming, especially since the committee schedule calls for all spending requests to be through committee review and ready for Council consideration by Feb. 14, next Tuesday.

He wondered if any of the oversight committees had scheduled supplemental budget hearings and if a supplemental funding bill would be ready for Council action on Feb. 24, as the committee had designated in its schedule.

After some debate about chucking the supplemental funding process the committee worked so hard to develop, Bates urged his colleagues not to do so.

In the end, however, the committee went with Nez's recommendation to let delegates "duke it out" over the $9 million.

"We can't have a comprehensive $9 million budget bill," he emphasized. "Each bill should go forward on its own merit."

At the committee's directive, Bates announced Wednesday that a special session on supplemental funding would be held the week of March 19.

The committee also told Chief Legislative Counsel Edward McCool to inform delegates that taking their pet spending bills through the signature review process is optional.

Delegates who choose to skip the review, committee members noted, increase the chances that Shelly will veto their bills.

Bates said Wednesday that at the committee's request, he went to Shelly's office to pick up the proposed supplemental funding budget for the three branch chiefs and chapters, which started the review process two weeks ago.

The chapter funding is still under review so Bates said he expected it would be ready today.

The $42 million is the balance from an estimated $89.5 million in unanticipated tribal revenues this year.

According to the controller's office, the $89.5 million consists of a one-time payment of $50 million from Peabody Energy to settle a 1999 lawsuit; $19.2 million in annual rental payments from El Paso Natural Gas; $10.3 million in right-of-way payments from Transwestern Pipeline; a $6 million lease payment from Arizona Public Service for the Four Corners Power Plant; and $4 million in oil and gas bonuses.

The Council used about $22.5 million of the $89.5 million to erase a deficit left by the prior Council.

On Oct. 17, the controller's office reported in a memo to the three branch chiefs and Bates that $64 million was available for supplemental appropriations.

Bates explained that the $64 million cash balance dropped to $42 million after accounting for all encumbrances left over from the 2011 budget.

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