How to spend the money: Over $1 billion in ARPA funds still unallocated
After months of planning for the expenditure of ARPA monies to support COVID-19 mitigation projects, the first bill (No. 257-21) proposed to accomplish that is back to square one after the Naabik’íyáti Committee tabled it last week.
In the Naabi meeting, delegates said the bill still lacked project detail and expressed concerns over how projects were ranked, whether the selections were equitable across agencies and chapters, and how they addressed the Navajo Nation’s COVID-19 pandemic response.
In response, Delegate Amber Kanazbah Crotty proposed tabling the bill so that the Council could consider dividing remaining ARPA funds by the 24 legislative districts of delegates to ensure equity and local involvement in how the funds are spent.
“We’re just making sure that all of the districts are being served or benefiting from this recovery money,” Crotty said. “I think everybody should be asking that – how is this benefitting our district?”
The bill was referred to a Naabi work session for further review and will be brought back to the committee within 60 days.
$44.6 million per district
In its current state, the bill proposes a total of $958 million in infrastructure projects for water/wastewater ($300 million), broadband ($208 million), electricity ($200 million), housing ($100 million), and bathroom additions ($150 million).
Of the $2.079 billion in ARPA funding the Nation received last year, $1.008 billion has been appropriated so far for Hardship Assistance ($557 million), Sih Hásin Fund and UUFB project reimbursements ($76.6 million), refunded CARES Act projects ($166.7) and Navajo Nation government administrative/regulatory support ($207.9 million).
This leaves a balance of $1.07 billion that needs to be appropriated by the Council with a two-thirds vote and signed by the president.
If this amount were divided by 24 legislative districts, each delegate would have approximately $44.6 million to work with.
“I like the idea,” Delegate Eugenia Charles-Newton said. “I think it’s only fair it be divvied up by region, per the delegates, and that way we can focus on what our community needs are and allow us to hear directly from the people.”
She recommended opening the chapter houses for meetings to discuss the ARPA money priorities.
“Our people need to be heard,” she said. “We need to know what they are asking for.”
Charles-Newton also believes it’s time to start getting Navajo small businesses involved with carrying out ARPA projects.
“If it were up to me, I would say give it to the delegate regions and let the small businesses in,” she said.
“Have them propose how they can help with some of these projects,” she suggested. “Why would we want to funnel all of that money to Window Rock?”
Reorganizing the bill
When asked what would happen next in the process, Delegate Carl Slater told this reporter, “Your crystal ball is as good as mine right now.”
During Monday’s state of the nation address, President Jonathan Nez said he is willing to meet with the Council to move the bill forward as quickly as possible.
Nez explained that proposals contained in the bill are ranked based on the readiness of each project, completion of preliminary requirements and clearances, the availability of resources, and the federal timeline to expend the ARPA funds.
All ARPA project expenditures must be obligated by Dec. 31, 2024, and completed by Dec. 31, 2026.
“Per the tabling motion by the Naabik’íyáti’ Committee, the legislative branch will work with President Jonathan Nez to negotiate an amount that can be divided between 24 delegate regions,” Speaker Seth Damon told the Navajo Times on Tuesday.
“Both branches will be meeting this week to discuss the best process forward in allocating $1 billion in American Rescue Plan Act funds,” he said.
Separately, as of yet, the Naabi work session has not been scheduled but is being planned for the “near future,” said legislative branch Communications Director Alray Nelson.
Crotty clarified that dividing the funds equally between delegate districts does not mean “starting from scratch” or scrapping the existing bill.
She said each delegate could work together with their communities to identify projects in the bill they want to select and pull together a project listing for their districts within the budget of their allocated funding.
All of this will require the president’s executive branch team that drafted the legislation to reorganize the bill’s projects by delegate district instead of by project category.
This way, delegates will see which projects in their districts have already been reviewed, vetted, and approved within their chapters by the Department of Justice.
Crotty said she didn’t think that that would take very long because a lot of the work had already been done.
“I think we’re just reorganizing the projects in the bill,” she said.
Crotty also wants to make sure some funds are set aside for the COVID-19 public health response, especially since the Navajo Department of Health has no more budgeted funds for that.
“That’s what we need right now,” she said. “We need a stronger response when it comes to COVID.”
‘Time is of the essence’
Nez warned that if the legislation is held up for another 60 days, it could be a year past when the funds were received in 2021 before projects are ready to start.
“We have far too many families living without these necessities, and we need to move on these proposals immediately,” Nez said in the state of the nation address. “We need to take bold action and help our people as quickly as possible.
Delegate Edison Wauneka expressed concern that the projects in the bill were now on hold because his chapters were already waiting to move forward with some of them.
He recommended scheduling the Naabi work session as soon as next week.
Nez said each member of the Council had been provided a binder with information about each project included in the bill.
“We know there are questions and concerns about distribution equality among the five agencies, 24 legislative districts, and 110 chapters, but time is of the essence,” Nez said.
Additionally, suppose more new projects are added by delegates. In that case, it will take more time for the Navajo Department of Justice to vet them to ensure compliance with U.S. Treasury guidelines, said Nez.
“If leaders begin to remove projects that are construction-ready and replace them with ones that are not, we will not only delay these improvements even more, but we will also make it much more difficult to meet the federal deadline to use the funds,” he said.
Initially, when the president’s office’s high-level priorities for its proposed ARPA expenditure plan were announced last October, two additional bills were going to be rolled out as part of the package to include: $220 million for chapters, $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 as well as $100 million for tribal enterprises.
As everyone anticipated, because the 10% cap on Hardship Assistance in the bill was waived and payments to the people of $557 million were approved (increasing it by $350 million), it was expected that parts of the expenditure plan would have to be cut.
“Prior to the approval of $557 million for ARPA Hardship Assistance, these other priorities were to be part of a second/separate legislation,” Communications Director Jared Touchin told the Navajo Times on Tuesday. “With the decrease in available ARPA funding now that Hardship Assistance has been approved, the team is re-evaluating those amounts.”
Touchin indicated that the plan is still to introduce additional legislation to fund the other priorities at amounts yet to be determined.
He added that the president’s team is looking at all funding sources, including ARPA, donations received when the pandemic began, the Indian Health Service, and other external funds to provide more public health support.
“The Navajo Nation Council continues to listen to our communities who need immediate assistance right now,” Speaker Seth Damon said. “It is our (Council’s) plan to allocate ARPA funding to our Navajo tribal enterprises, for economic development projects, and to the Navajo Department of Health and Division of Social Services to combat the COVID-19 virus.”
Since last summer, Nez has cautioned that ranking projects would be a challenge because the comprehensive project listing for the Navajo Nation totals $18.7 billion for about 10,000 projects, far exceeding the $2.1 billion in ARPA funds.
That has certainly been the case.
“Clearly, $2 billion will not meet all of the needs in our communities,” he said. “But it is a start, and it is an opportunity to improve the quality of life for future generations through infrastructure development and other initiatives included in the proposal.”