Navajo look at budget decreases
Official fear layoffs loom

By Kathy Helms
Diné Bureau

WINDOW ROCK — If Monday’s budget hearing reports from the Office of Management and Budget and the Office of the Controller are any indication, the Navajo Nation government is in for some significant belt-tightening.

Budget and Finance Committee Chairman LoRenzo Bates said information received from the two offices during the kickoff of this week’s Fiscal Year 2009 budget hearings was as expected, with the two divisions reporting impacts from a decrease in indirect cost recovery.

“We will probably see more of it as the divisions and the programs start to come in. My feeling is that once it’s all done, there could possibly be a recommendation that we increase the revenue projection,” Bates said.

Directors of OMB and OCC said any decrease in funding for their departments could result in layoffs, especially since, like all programs, they already have to absorb FY2008 general wage adjustments, step increases, and a 1 percent fringe-benefit increase. For OMB that translates to $32,000.

“This is the overall picture of the way the budget is looking, as proposed. First of all, there is no layoff or risk in legislative or judicial (branches),” said OMB Director Dominic Beyal.

“However, in the executive branch, there are roughly 40 or so positions that are being eliminated. The Executive Office has one; Health, 14; Human Resources, two; Natural Resources, 10; Community Development, two; Gaming Regulatory, about 13. And of that, about 15 of them are occupied, meaning they’re layoffs.”

Navajo Nation President Joe Shirley Jr. is expected to present more numbers to the committee today regarding loss of positions when he gives the executive branch budget statement, Beyal said.

In FY2008, OMB received $1,250,010; in FY09 it proposes to receive $1,324,213 from the general fund. It also will receive from the indirect cost fund $706,212, or roughly $56,000 less than last year, for a total of $2,030,425.

The budget increase is to cover the reduction in indirect cost recovery and to enable the office to keep all 32 personnel positions.

Beyal said operating increases in tribal vehicles’ fuel and mileage use, auto liability premiums, and workers’ compensation insurance have contributed to a budget that is 94 percent personnel and 6 percent operating costs.

“A fund ratio of 90 percent/10 percent would be more optimal. Any fund decreases will affect personnel,” he said.

The indirect cost pool for this year was estimated to be $21 million, Beyal said. “For ’09, it’s standing at $10 million, still proposed.” A review process is under way and OMB is optimistic that number will be adjusted to a minimum of $13 million.

In a cost-cutting measure, Beyal said OMB will downsize its one tribal vehicle from a Chevy Tahoe to a regular passenger sedan. B&F Vice Chairman Leonard Chee commended the program.

“I would like to see that overall throughout the departments and programs when we recommend the final budget to the council. That’s where we can go to cut costs,” Chess said.

“Another area that could be a cost-cutting measure is promotional items. I think we could do without those items for this year at least — like little fly-swatters — that could be cut and the cost of those promotional items could go to other areas of need within our programs. That should be across the board to all programs.”

Mark Grant said the total proposed budget for the Office ofthe Controller, which includes the Purchasing and Property departments, is $3,901,518. OCC consists of 95 percent personnel costs and 5 percent operating costs.

“Any significant reduction causes under-budgeting of operating costs or the need to lay off personnel,” Grant said. “During FY2008 there was significant insufficient funding for operating costs, travel, office supplies, operating supplies and contractual services.”

He added that both indirect cost and the general fund budget allocations are being reduced for all of OOC.

“The reduction of funding of both IDC and general fund allocations will impact services being provided to all branches within the Navajo Nation. Services will need to be cut back in various areas. As we are already limiting services, as complaints from departments can evidence, to reduce funding will have greater impacts.”

Proposed actions to address significant major budget impacts include a consideration to lay off staff in order to have consistent operating funds for FY2009. “This is still a possibility prior to the end of the budget session,” Grant said.
Also proposed are moving the account manager funding to the permanent fund; requesting supplemental funding for FMIS fixed costs and an FMIS upgrade to version 8.12 to keep it compatible with the vendor.

Other considerations include: less accounts payable check runs; cutting back on demand-payment processing; and reducing the number of payroll deductions now provided to employees, such as Arts and Crafts, Navajo Housing Authority, BIA housing rent, personal loans, Navajo Way, veterinary expenses, accounts receivable auto sales, emergency pay advances, home and/or business loans .
“All of these are personal financial costs,” he said.

According to Bates, increasing the FY2009 revenue projection would give the three-branch government more money to work with in the upcoming fiscal year. “However, the feeling of the committee members is that if that is going to take place, B&F will have a major say in who gets what and where, rather than it being presented by the three branch chiefs.”

Historically, the Nation has under-projected on the budget. “We were all gung-ho when oil prices started going up to $140, but now it’s starting to come down. How far will it come down? We’ve got to take into consideration the risk that’s involved in using the maximum revenue projection,” Bates said.