President: Navajo Nation portfolio lost $240 million

Copyright © 2008
Gallup Independent
By Karen Francis
Diné Bureau

WINDOW ROCK — Around the United States, the economic crisis that the country is facing is on everybody’s lips, including at the Navajo Nation Council’s fall session on Monday when President Joe Shirley, Jr., delivered the state of the nation address.

“With the current national and international financial crisis upon us, we, as leaders of the Navajo Nation, must do all we can to protect and ensure the wise use of our money more so than ever,” he said.

Shirley reported that over the last few days, the Navajo Nation’s trust portfolio, which includes the permanent trust fund, has declined nearly $240 million in market value.

Shirley also said that the nation’s retirement portfolio has declined nearly $81 million and individual 401(k) accounts have declined substantially.

The president said that the nation is vulnerable to a possible funding shortfall this fiscal year because of unpredictable oil prices. He noted that the nation relied on revenue projects from March and April, and the price of oil per barrel has decreased significantly since then.

“Unless we see stability in the market soon we must begin planning for a revenue funding shortfall in order to continue providing essential governmental services,” Shirley said.
He said that the nation should know more about what to expect by next quarter.

With the economic crisis, Shirley said that the minimum balance of 10 percent in the undesignated, unreserved fund balance should be maintained and built up.

“As has been pointed out numerous times, allocating funds from the 10 percent set aside puts the Nation at risk of not being able to address a true emergency should a situation interrupt or decrease the Nation’s revenue stream, or should the Congress fail to appropriate funds for a protracted period,” Shirley said.

Shirley urged caution in expending the nation’s funds, especially the permanent trust fund, and encouraged the Council to consider approving a five-year plan for the expenditure of the interest from the permanent trust fund.

He said that the income available is approximately $20 million.

One possible use for the money suggested by the president is for the construction on at least one judicial complex that will include public safety and probation services.

Though the president also suggested using the income from the one-cent sales tax increase that was enacted specifically for public safety, Council Delegate and Judiciary Committee Chair Kee Allen Begay, Many Farms/Round Rock, said that there is already a fund management plan in place approved by the Budget and Finance Committee.

While Shirley reported that the state of New Mexico and the Navajo Nation entered into an agreement to provide capital outlay funds for powerline and waterline extensions, house wiring, bathroom additions, road improvements, senior citizen centers and other Navajo Nation facilities, several Council delegates, such as Jerry Bodie, Sanostee, and Pete Ken Atcitty, Shiprock, said that they heard from New Mexico state Sen. Lynda Lovejoy that the state is looking at taking back some of the capital outlay funds it had allocated for tribes in previous years.

Also, the president also announced two ‘get out the vote’ initiatives for the general election in November. The first initiative will coordinate with the senior citizens centers to set a schedule to get elders out to vote early in the three states.

“Early voting in Arizona and Utah is possible through Oct. 31 and in New Mexico through Nov. 1,” Shirley said. “This will be done for the convenience of our elders who might otherwise not cast a vote on Election Day if the weather is too cold.”

The second initiative – to authorize administrative leave for tribal employees the entire day on Nov. 4 to encourage them to vote and take family members to the polls – drew opposition from several Council delegates, some of whom said that services need to be provided that day.

The president also announced that a Navajo Nation background check office will be established to perform background checks for all employees hired to positives deemed sensitive. Shirley said based on preliminary research, there are over 3,000 sensitive positions within the Navajo Nation government.

The need for the office came about after the Administration for Children and families suspended federal financial assistance to the Navajo Head Start and Early Head Start programs.

The Council voted 56 in favor and 2 opposed to accept the president’s report.