It is now 7:36 pm and the Navajo Council’s Naa’biki’yati’ Committee has recessed for supper in the Council chamber where they have been meeting since noon today. The first item on their agenda was the $220 million Bond/Loan and the Committee has been debating since they got a quorum.
Well, they broke for a couple hours for lunch.
If Naabi approved the $220 million Bond/Loan then it goes to the Council. Speaker Johnny Naize, who also presides over the Council, said that the Council is meeting tomorrow, 10-1-13.
Intially the plan was for Naabi to take action on the $220 million Bond/Loan last week but lack of a quorum and keeping a quorum brought that plan to a halt which brings us to today’s Naabi meeting.
Plan B, or was it C, anyway the plan, as laid out by Speaker Naize, last Friday and after Naabi lost a quorum, was for Naabi to get going at 8:30 am, approve the Bond/Loan and immediately send it to Council, which was scheduled to also meet today. But Naabi got a quorum about noon and so the Council’s special session is tomorrow.
But even before the Naabi took up the $220 m Bond/Loan, the Council’s Investment Committee, along with primary sponsor, Delegate Katherine Benally, went to Seattle to meet with KeyBank the week of Sept. 9.
It is now 7:45 pm and Naabi has reconvened. During supper recess, Speaker Naize announced that Naabi needs to also take action on other legislation on their agenda and then convene the Council special session, which means they’ll be meeting until 1 am, Oct. 1.
NAVAJO NATION DIVISION OF ECONOMIC DEVELOPMENT CHIEF FINANCIAL OFFICER RAYMOND NOPAH
I was able to locate Delegate Alton Shepherd’s office building project which was transferred to Captial Improvement Projects because it was incorrectly identified as a publc building. And so the total amount that would be financed thru the Bond/Loan the first year would change from $156 million to $183 million.
DELEGATE LEONARD TSOSIE
Perhaps we shud table this until we review list especially after hearing concerns of Delegates over their projects. And this is not to defeat Bond/Loan but to ensure that there are projects that benefit the pple.
And if table for 30 days, we would still be within the timeline for Bond/Loan to move forward.
DED CHIEF FINANCIAL OFFICER NOPAH
To respond to section 6 questions of legislation regarding WEstern Regional Business Development Office decision to put Tuba City project into different basket. That project is still active. But for some reason, it was situated differently from List.
Regarding Delegate Shepherd’s question: I don’t get directly involved i project calls but the initial bond legislation regarding Burnside Project was that money for building but realized that additional engineering issues/info and so increased cost from $7 m to $9 m. But doesn’t mean go with $7 m cuz can use tax credits and get to $9 m. And will do with all projects where costs increased.
With SEction 6, we have alerted Navajo Community Financial Institution to be leander of funds and getting close. Have banker, Community Development Financial Institution member on Board, well rounded group of interestd pple. Told CDFI that Navajo looking at CFI to do credit ratings. to date, shareholders met with Board and they are about to hire CEO and leading officer. CFI loking to credit review and developing policies.
If Naabi approves, they said they wud proceed diligently and develop credit policies and waiting on Naabi before to credit rating on Bond/Loan projects.
NCFI also wud gain as CDFI and lot to do with building up lending review. Know proposal by CDFI to work with banks to lend money to CDFI which would then lend out money.
DELEGATE LORENZO CURLEY
Many of these projects that are listed for financing through the Bond/Loan have been sitting there for about nine years because the Navajo Nation lacks funds and a way to finance these projects that amount to millions of dollars.
If we are concerned about our projects not being on Bond/Loan list then we can take our projects, one by one, to the Investment Committee and bow down to Delegate LoRenzo Bates. (laughter)
DELEGATE LEONARD PETE
I think this can work. my concern is economic development enterprise and if existed now, under this Bond/Loan legislation, they would review and approve projects as recommended.
DELEGATE MEL BEGAY
I trust the document but now from what Delegate Danny Simpson brought up regarding document, look at Coyote Canyon, my area will be eligible for $1,000 in three years. Other one is Naschitti and that is blank. “That doesn’t make sense.”
We need to vote down and find path that would give every community opportunity to develop resources. I think that is a better path.
I think that this is an insult to a colleague that spoke highly of it. “There is no fairness. Vote this thing down.”
SPEAKER NAIZE
This is what happens to CIP plan. When a delegate doesn’t see his or her project on list then it is voted down.
DELEGATE RUSSELL BEGAYE
to me, we are talking about drawing down millions, not appropriations, but money to pay back. Reserves has $80 m but Bond financing has to be market driven. Someone has to pay back and hopefully projects generate revenues to pay back Bond/Loan. So be diligent rather than satisfy every chapter cuz not every chapter would be able to have business that geneate revenues.
Way do bond financing is different from CIP. I agree that these projects are outdated and being business to communities that can generate revenues such as Tohatchi where lot of traffic, infrastructure there. consider heavy tourist areas such as Monument Valley and Chaco Canyon. Not every chapter included but they will be impacted cuz there will be revenues generated to fund chapter projects.
DELEGATE LORENZO BATES
Nopah says that entity will vet projects and that it would be independent review so are these folks paid or volunteering. And I understand that Mr. Whitman is Navajo Tribal Utility Authority consultant.
NAVAJO DIVISION OF ECONOMIC DEVELOPMENT CHIEF FINANCIAL OFFICER RAYMOND NOPAH
Economic Development Enterprise was NCFI to be somewhat independent of government to go in and provide credit analysis and review, independently of own selection or by legislation previous adopted, or under consideration for adoption. And that would remove pressure. And there would be criteria for business to pay back loan, hire competent pple.
Without evaluating and based on any financial lending institution that lender wud provide service on fee basis. But what fee is, is not under my control but factored into lending policies and CFI has fee schedule.
But services provided by NCFI, if NCFI, already being compensated with other funds. Me as financial officer would work on getting to level without CFI doing so much work.
What charge is unknown. Once get into credit policy then know. NCFI not looking to these projects to fund their salaries.
And Whitman company not under contract with Division of Economic Development. He had contract with Navajo Tribal Utility Authority.
DELEGATE ROSCOE SMITH
I understood that financial tool created for discussions having now such as CDFI. Part of initiative was to capitalize that inititive and then create financial tool, which is NCDFI/Navajo Community Development Financial Institution, to leverage Navajo dollars to get projects on ground.
CDFI in picture cuz Navajo Nation wud be ones entering into Bond Financing.
DELEGATE WALTER PHELPS
There is need for Navajo Nation to be baptised in financial world, to get familiar with bankers, investors. That is why I was asking about security; what is security. And goes back to security.
When I come home to constitutencies and chapter meeting at Leupp and heard again. “Nothing has changed. Everything is the same.” This legislation is one way to step out and make things happen quicker and address those comments, words.
I feel like I still want to support the Bond/Loan.
IT’S NOW 8:42 PM
DELEGATE DWIGHT WITHERSPOON
Agree with Delegate Phelps. But to begin to have Bond is important and we want to begin to start different steps. Rates and amounts are of concern. Certainly opportunity for CDFI to do vetting and to also protect the nation.
There is still concern from many delegates about projects listed. DK if suggestion from sponsor on how to resolve. But I’m interested in suporting legislation. We have USA’s debt seriously impacting them. Perhaps we can impact them positively.
DELEGATE RUSSELL BEGAYE
Draw down Bond can be done as needed to fund projects. What about General Obligation Bonds? Can they be drawn down as needed? It should be separate cuz confusing.
DED CHIEF FINANCIAL OFFICER NOPAH
Delegate Mel Begay’s project should be $1 million not $1,000.
KEYBANK MANAGING DIRECTOR PUBLIC FINANCE GEOFF URBINA
We are interested in long-term Bond to see if these projects would be self-sustaining. Regarding funding, how the draw down Bond fits with Capital Markets. At some level, have $60 m and taking $100 m and fixing rate for 20 yrs and separate from drawn as needed at about 2.25 percent and wud be charged on what draw down.
The $63 m is for judicial projects, $30 m is NTUA.
DELEGATE RUSSELL BEGAYE
What would $100 m at 5 percent be?
These are both same so securities are both the same because Navajo Nation stands behind Bond/Loan with it’s rating.
KEYBANK MANAGING DIRECTOR PUBLIC FINANCE URBINA
Long term, 20 yr at 5 percent, $100 m, $660,000 per month, amortizing principal and interest so about $8 m each payment.
DELEGATE RUSSELL BEGAYE
We need to get ducks in a row cuz the projects that are revenue generating need to immediately generate funds because the $8 milion a year has to be paid, otherwise it will be paid with tribal revenues.
SPEAKER NAIZE
I have held Delegate Tsosie’s Tabling motion in abeyance so what do you want, Delegate Tsosie.
DELEGATE LEONARD TSOSIE
Table and during 30 days, the sponsors of $220 m Bond/Loan have work session on projects that are revenue generating and have business pple come before Resources & Development Committeee and Naabi to find if ready to go. Also Delegates can look at adding new projects.
IT IS NOW 9:05 PM
VOTE ON TABLING $220 MILLION BOND/LOAN LEGISLATION: 13 in favor, 2 opposed
MOTION TO ADJOURN at 9:06 pm
ADJOURNED
