‘Once-in-a-lifetime opportunity’: Nation could receive $1.8 billion-plus from rescue plan
President Jonathan Nez and Speaker Seth Damon struck a conciliatory tone last week while planning for administering the American Rescue Plan Act stimulus funds in order to address the ongoing public health and economic impacts of COVID-19.
“It is time for our great Nation to initiate Nitsáhákees, Nahat’á, Iiná dóó Sihasin to determine the needs of our Diné,” said Damon.
In addition to ARPA’s $20 billion “Fiscal Recovery Fund” for tribes, comparable to the $8 billion CARES Act Coronavirus Relief Fund, there are a variety of other funding opportunities as well as general assistance for businesses and individuals.
“The general strategy for the American Rescue Plan funds should be to maximize and leverage funding, not only from the $20 billion, but also from the other pots of funding that will become available,” said Nez, whose office has already been engaged in tribal consultation with various federal agencies regarding the rescue plan.
“We are recommending that the funds be distributed as direct funding to tribes, and not in the form of grants that may require additional documentation and applications,” said Nez.
Of the $20 billion, $1 billion will be divided equally among the 574 federally recognized tribes and the remainder will be allocated by a formula yet to be determined by the U.S. Department of the Treasury.
Through the direct tribal allocation alone, it is estimated that the Nation could receive around $1.8 billion, according to Navajo Nation Department of Justice consultants Holland & Knight.
“It’s a once-in-a-lifetime opportunity for the Nation to harness the resources that Congress made available to it,” said consultant Nicole Elliott.
The estimate is based on last year’s Coronavirus Relief Fund distribution formula, where 60% of the $8 billion allocated to tribes was based on population, 30% by workforce, and 10% by expenditures, which yielded a total of $714 million for the Navajo Nation in 2020.
The U.S. Treasury is required to disperse the tribal funds within 60 days of the enactment of the rescue plan in March, which means the monies should be arriving by May.
This time around, the Nez-Lizer administration is recommending to Treasury that the funding formula for the $19 billion be based on population, land base, number of employees, and direct COVID-19 impacts measured by coronavirus infections, deaths and other key factors.
In a letter to Damon, Nez said the Nation’s financial resources must be optimized for maximum productivity, especially in the face of reduced tribal revenues.
“I respectfully ask members of the 24th Navajo Nation Council to assist us in packaging one proposal,” said Nez. “The American Rescue Plan requires the immediate attention and planning of Navajo leaders to help our people without needless delays.”
Work sessions begin
On March 29, Damon welcomed Nez and Chief Justice JoAnn Jayne to a three-branch-chiefs discussion with the Naabik’íyáti’ Committee along with an overview of the Rescue Plan presented by Holland & Knight.
“Today’s discussion among the three branch chiefs helped lay the foundation for the Navajo Nation’s recovery beyond Covid-19,” said Damon. “These funds will support many important infrastructure and recovery initiatives that will positively impact the health and well-being of our Nation’s citizens.”
The session was the precursor to a series of daily work sessions that started on Monday to receive input from the Nation’s experts on water resources, power lines, housing, broadband infrastructure, education, public safety, health, chapters, economic development, strategic planning and financial management.
Damon is requesting stakeholders, including executive branch division directors, to develop fund management plans and propose expenditure plans comprising the Nation’s most pressing needs and priorities as well as make recommendations for how to streamline processes, including the archaic and lengthy ’164 review and rights-of-way approvals.
“The requested data will provide the Naabiki’i’yati Committee a synopsis of the needs of our people and the Nation,” said Damon. “As subject matter professionals of your respective sectors, we look forward to this partnership for the betterment of our Diné.”
Jayne said the Judicial Branch is identifying immediate and long-term needs and funding to address the myriad issues the Navajo Nation faces in response to the pandemic, including mental health, substance abuse prevention and treatment, veterans’ court services and prioritizing judicial/public safety facilities.
“There were many lessons learned from the CARES Act that can be applied to the American Rescue Plan,” said Nez. “We have to improve from the past and do better. We strongly recommend that we revisit CARES Act projects that were not previously completed due to the stringent deadlines included in the initial bill.”
‘Elected for this time’
Navigating the complexity of the rescue plan will be a challenge as dedicated staff, patience and expertise will be required to parse out each funding opportunity in the law and to discern requirements needed to qualify for them, which could include grant processes.
The Navajo Nation might need to immediately hire a team of consultants to augment current staffing just to help administer the behemoth rescue plan and create a “one-stop shop” for projects to limit bureaucratic red tape and delays, suggested Nez.
Damon proposed that certain processes could be waived for the purpose of expediting projects, but that would have to be legislated.
Additionally, as proposed by U.S. President Joe Biden last week, trillions of dollars in funding for infrastructure and energy projects could be on the way for the entire U.S. by this summer if agreed on by Congress, above and beyond the rescue plan funding.
The good news is rescue plan funds are somewhat less restrictive than the CARES Act funds were and the deadline to spend them is Dec. 31, 2024, which allows a lot more time for planning and execution of projects.
The tribal FRF also allows more flexibility in that funds can be spent both to address the COVID-19 public health emergency and to cover negative economic impacts, including a reduction in tribal government revenues.
CARES Act spending was restricted to expenditures “necessary” due to the COVID-19 pandemic.
Assistance to individual households, small businesses, and nonprofits negatively impacted by the pandemic is also allowable under the FRF, as are pandemic-related infrastructure needs, and supplemental premium pay to employees who perform essential work.
Depending on additional guidelines still to be released by Treasury, all of these benefits could conceivably be retroactive to the onset of the pandemic in March 2020.
“All we’re wanting is the fair allocation of dollars,” said Nez. “We all were elected for this time and that’s the reason we are here. We’ve gone through a lot and now with an opportunity to improve the quality of life for our Navajo citizens.”
In doing so, Nez said it is also important to prepare for any future pandemics by working to complete waterline, sewer, electricity, broadband, renewables, justice facilities, roads, bridges, housing and emergency storage warehouses.
He proposes hiring Navajo professionals to do the work of planning for and carrying out rescue plan projects as well as involving chapters.
“The Office of the Speaker remains open to any and all collaborative and constructive proposals for the critical needs of the Navajo people,” said Damon.