2021 in Review | No. 2: ARPA billions face long, winding road

WINDOW ROCK

On March 11, President Joe Biden signed the $1.9 trillion American Rescue Plan Act to help the country recover from the severe health and economic impacts of the COVID-19.

The bill included $20 billion in Fiscal Recovery Funds for the 574 federally recognized tribes and paid $1,400 to all U.S. citizens earning up to $75,000 last spring.

For its share, the Navajo Nation received a total of $2.1 billion with its first allocation of $1.86 billion on May 28, based on certified enrollment data, and an additional $217.9 million on Aug. 16, based on tribal employment data.

The ARPA funds were intended to respond to the COVID-19 public health emergency and its negative economic impacts. All ARPA project expenditures must be obligated by Dec. 31, 2024, and completed by Dec. 31, 2026.

The act includes more than $6 billion for Native health care and COVID-19 mitigation, $1.2 billion for tribal housing, $1.1 billion for Native education programs, $1 billion for family assistance, $900 million for Bureau of Indian Affairs’ programs, $600 million for economic and infrastructure investments, $20 million to preserve Native languages, and $19 million to combat domestic violence.

Of these funds, the Navajo Nation ended up receiving an additional $534 million in ARPA funds already earmarked for programs.

The $20 billion for tribes also represented a significant increase over the $8 billion set aside for tribes in the CARES Act, from which the Navajo Nation received $714 million. About half was allocated to Navajo CARES Hardship Assistance.

According to Controller Elizabeth Begay, as of Dec. 7, out of the $361.9 million budget approved by the Navajo Nation Council for CARES Act Hardship Assistance (Phase I and II), a total of $346.9 million in payments have been provided to approximately 312,010 tribal members.

After ARPA passed, President Jonathan Nez said the funds would support many necessary infrastructure and recovery initiatives that will positively impact the “health and well-being” of Diné citizens.

At the same time, the president’s office cautioned that the comprehensive project list compiled by the executive branch for the Navajo Nation totals $18.7 billion, with about 10,000 projects, which far exceeds the $2.1 billion available in ARPA funds, so prioritizing the needs would be complex and challenging.

Chief Justice JoAnn Jayne said the ARPA funding also needed to prioritize mental health and substance abuse treatment, veterans’ services, and judicial/public safety facilities.

Led by Speaker Seth Damon, the Naabik’íyáti’ Committee held ARPA work sessions starting in March, to hear from division directors and program managers about the funding needs and consider a “one-stop-shop” approval for projects to limit bureaucratic red tape and delays.

In April, the Division of Community Development invited chapters to submit their priorities for ARPA funds, including power lines, water lines, solar, house wiring, bathroom additions, rural addressing, and warehouse projects that yielded 558 submissions totaling $1.1 billion.

In July, Navajo Nation Council approved a resolution (No. CJY-41-21) that set up a framework to spend the ARPA money.

Signed by Nez on Aug. 2, the bill established the Navajo Nation ARPA Fiscal Recovery Fund and Expenditure Authorization Process, including procurement and oversight guidelines.

First and foremost, for any additional ARPA funds to be appropriated, all proposed projects and services would have to be legislated through the Council, approved with a 2/3 vote, and signed by the president.

The bill also required an application process for ARPA funds, waived specific provisions of the Appropriations Act, authorized emergency procurements, and established a Fiscal Recovery Fund Office under the president’s office to oversee ARPA projects and services.

And it immediately allocated 10% of the ARPA funds, or approximately $207 million, to the Navajo government for administration of the funds, including “central support services and regulatory costs” in a 90/10 percent formula to the president’s office and speaker’s office, respectively.

Per the legislation, the president’s office is mandated to contract with qualified Navajo-owned enterprises/authorities/corporations or businesses to assist in implementing, managing, and monitoring FRF funds.

The bill also authorized reimbursements of Síhasin Fund and Unused Undesignated Fund Balance appropriations and refunded unfinished CARES Act projects.

Finally, the bill’s spending plan states that direct financial assistance to enrolled Navajo Nation members would be limited to 10% of the total funds.

This came when many Diné were waiting and hoping for another round of direct payments through ARPA comparable to the CARES Act Hardship Assistance Program, which paid eligible tribal members $1,350 for adults and $450 for minors in Phase I, and $400 to Phase II applicants.

In early June, delegates Eugenia Charles-Newton and Vince James submitted a request for a bill proposing to use ARPA funds to give every enrolled Diné adult $2,000 and every child $1,000 in hardship assistance, estimated to cost about $600 million.

But that legislation was preempted by Council’s framework bill and a 10% cap on Hardship.

On Sept. 1, the Budget and Finance Committee passed a resolution (BFC-31-21) to establish the ARPA FRF application procedures, forms, and expenditure templates for government units, chapters, Navajo-owned entities, and external entities to apply for ARPA funds.

However, the application is cumbersome and confusing and adds another burdensome bureaucracy to the process.

Not surprisingly, as of early September, no other ARPA bills were in the pipeline and $2.1 billion sat in the Navajo Nation ARPA Fiscal Recovery Fund account unspent.

However, on Oct. 1 President Nez announced that the goal was for executive and legislative branches to work together to get legislation for over $950 million in infrastructure projects approved by the end of October.

On Oct. 21, the high-level priorities for the proposed president’s office ARPA plan were finally announced:

• First expenditure bill – infrastructure projects – $200 million for broadband, $200 million for water/wastewater, $160 million for power lines, $140 for bathroom additions, and $80 million for housing.
• Second expenditure bill – chapters – $220 million for chapter projects.
• Third expenditure bill – services – $80 million for education, $80 million for health/behavioral health, $80 million for social services, $90 million for economic development, and $20 million for tourism.
• Enterprises – $100 million.
• Hardship Assistance – $207 million.
• Reimbursements and administration (approved in No. CJY-41-21) – $78 million for Sihasin and UUFB project reimbursements; $168 million to refund CARES projects; $165 million for ARPA administration and regulatory support.

In turn, on Nov. 24, the first bill (No. 257-21) to appropriate ARPA FRF funds for new projects and services according to the president’s plan was dropped on Nov. 24 by sponsor Speaker Seth Damon. The bill encompasses Expenditure Plan 1 plus Hardship, totaling $1.16 billion.

Nez said that if the bill passed, individuals who previously received Hardship Assistance through the CARES Act program would not have to re-apply and $600 is allocated to each enrolled citizen.

However, legislation (No. 257-21) stalled by December because delegates said the bill lacked detail and a strategic planning summary.

Many delegates expressed frustration with the lack of clarity about how projects in the bill were prioritized, whether the selection was equitable across agencies and chapters, and how they addressed the Nation’s COVID-19 pandemic response.

Unfortunately, this left the Hardship proposal attached to a bill that still needed a lot of work.

On Dec. 18, Delegate Amber Kanazbah Crotty dropped a separate emergency bill (No. 263-21) to allocate $207 million in ARPA Funds to provide a second round of Hardship Assistance payments.

This action essentially peeled off the Hardship piece from the executive branch bill to move it forward more quickly.

With nine months gone by since Biden signed ARPA, Crotty said the Navajo people need immediate financial assistance and the Navajo government must meet their requests.

Crotty’s bill, which is expected to go to a Council special session before New Year’s, could be amended to waive the 10% percent cap and increase the total amount available for Hardship payments.

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