Navajo Housing Authority plans to return about $19 million to HUD

Navajo Housing Authority Chief Financial Officer Marlene Lynch and NHA Board President Edward T. Begay report to the Navajo Council's Resources & Development Committee and Naabik'iyati Committee on a federal notice to NHA to give back $102 million in unspent federal housing dollars during a meeting at the Navajo Council chamber in Window Rock, Ariz., on May 28, 2014. Photo by Marley Shebala.

Navajo Housing Authority Chief Financial Officer Marlene Lynch and NHA Board President Edward T. Begay report to the Navajo Council’s Resources & Development Committee and Naabik’iyati Committee on a federal notice to NHA to give back $102 million in unspent federal housing dollars during a meeting at the Navajo Council chamber in Window Rock, Ariz., on May 28, 2014. Photo by Marley Shebala.


During the discussion by RDC and Naabi on HUD taking back $102 million in unspent federal housing funds that were appropriated by HUD to Navajo Housing Authority years ago, NHA attorney Patterson Joe reported to the two committees that NHA had offered HUd a settlement.

NHA’s settlement offer is for HUd to take back $18.6 million instead of the entire $102 m. The offer is also for NHA to “completely” spend about $34.4 m in two years and if NHA does not spend the $34.4 m. in two years then HUD can take it back.

The $18.6 m. was earmarked for “new construction of public rental” for Shiprock, N.M., in 2009-2012, and “rental housing acquisition” for St. Michaels Special Education in 2012-2013. The breakdown of the $18.6 m. shows Shiprock with $11.8 m in federal housing funds and St. Michaels with $6.8 million.

According to a copy of NHA’s May 20, 2014, settlement letter to U.S. Department of Housing and Urban Development Office of Public and Indian Housing Assistant Secretary Sandra Henriquez, the settlement was sent by NHA Chief Executive Officer Aneva Yazzie, who sent copies of her settlement offer to Navajo Nation President Ben Shelly and NHA Board President Edward T. Begay. Begay is a former Navajo Council speaker and the Navajo vice chairman of Navajo Chairman Peterson Zah.

Resources & Development Committee Chairperson Katherine Benally and Speaker Pro Temp LoRenzo Bates presided over a joint meeting of RDC and the Naabik'iyati Committee on May 28, 2014, that was called to address Navajo Housing Authority problems regarding the return of $102 million to Housing and Urban Development and proposed Congressional language for HUD to takeover how federal funds are appropriated to tribes. Photo by Marley Shebala.

Resources & Development Committee Chairperson Katherine Benally and Speaker Pro Temp LoRenzo Bates presided over a joint meeting of RDC and the Naabik’iyati Committee on May 28, 2014, that was called to address Navajo Housing Authority problems regarding the return of $102 million to Housing and Urban Development and proposed Congressional language for HUD to takeover how federal funds are appropriated to tribes. Photo by Marley Shebala.

Today’s joint meeting of the Resources & Development Committee and Naabik’iyati Committee was called to also address proposed Congressional language that would allow HUD “to withhold allocations from recipients whose undispersed block grant total is greater than three times its yearly award under the formula allocation.” According to correspondence between HUD and NHA, NHA has an outstanding balance of federal housing funds that is three times its yearly award.

Navajo Nation Washington, D.C., Director Clara Pratt also reported to the committees today, “In the event a recipient’s grant amounts are adjusted, based upon the unexpended balance provision, those amounts shall then be allocated under the need component of the formula,” which means that any federal housing money that is taken back from NHA will be allocated to other tribes.

Pratt noted, “Both the unexpended balance provision and redistribution of funds provision are inapplicable to Indian tribes that receive less than $5 million under the formula allocation.”

She also reported that this “unexpended balance” language is nothing new to the House and appeared in 2012.So to have congress supersede or override that process is troubling.

Pratt added that if NHA is not spending federal housing money quick enough, HUD can justify that there is a “broken appropriation process for tribes and Congress is asking HUD to hold Tribally Designated Housing Entities accountable and the proposed language is HUD’s answer.

But she reported the huge problem is HUD taking appropriation of housing funds from tribes.

“This language has never made it into the final budget,” Pratt explained. “However, this is the first year this language has appeared in the President’s budget request.”

According to a July 31, 2013, letter from HUD Assistant Secretary Henriquez to NHA CEO Yazzie, a review of NHA’s annual 2012 performance report showed that NHA had only spent $66.6 million of its $215.9 million housing budget, which left a balance of $149.2 million.

“NHA’s failure to expend its IHBG (Indian Housing Block Grant) funds in a timely manner has a direct and substantially negative effect on Navajo tribal members,” Henriquez wrote to Yazzie.

Henriquez noted that NHA’s failure to expend its 2012 IHBG in a timely manner is not an isolated case…NHA has consistently failed to draw down and expend its anual IHBG allocations…This pattern of practice has resulted in an unexpended balance of $469,500,550.27 in LOCCS (Line of Credit Control System) as of July 19, 2013, which is more than NHS’s cummulative IHBG allocation for the last 4 fiscal years.”

After several hours of discussion between the Resources & Development Committee, Naabik’iyati Committee, NHA Chief Financial Officer Marlene Lynch, NHA attorney Patterson Joe, and NHA Board President Edward T. Begay, the Committees directed that NHA provide detailed information about the number of homes that it has built since 2011 and where and the number and location of homes that NHA plans to construct instead of just providing lump sums of money that NHA plans to spend.

Speaker Pro Temp LoRenzo Bates, who presides over the Naabik’iyati Committee, said that NHA needs to have that information available tomorrow, May 28, in case Naabi votes to hear from NHA.

The joint committees voted 7 in favor, 0 opposed to accept NHA’s report with directives.

The following is the discussion of the joint committees and NHA after NHA consultant, Mellor Willie, and Navajo Washington, D.C, Office Director Pratt reported on HUD’s plan to take back federal housing funds from NHA and the proposed Congressional language that would allow HUD, and not the tribes, to amend the way that HUD allocates federal housing funds to tribes.:

I was hoping to hear a plan. All we are hearing is regurgitation. DC office and Willie not adding anything. What bothers me is when RDC considering options with TDHE, I recall DC saying TDHE going thru process. We left alone and now it’s worse. Congress accused us of not being able to run Headstart and now this is in Prez Obama’s message. Where was DC office? Where was NHA consultant? I’m looking at sponsors of proposed language and most are Democrats, and with Prez message, there is a strong likelihood that it will pass.

Now we have to try and save the housing money of Navajo people. What is the plan to save this money. If there is no plan…NHA knew about this cuz we talked about this last week. If NHA has no plans then let them turn in resignations at end of day.

All we have been doing is befuddling this issue. Now we have to go Navajo people that federal housing money returning to federal government. We will hear it, not NHA employees. But maybe there is a plan. And also when receive report from staff, there is no timeline and I hoped to get from DC office. I hear that proposed language is before full House so need deadline to find out how much time to respond. I’m talking about sending people up to DC to talk with key people that DC office identified.

Over $100 m in federal housing money is a lot to lose. It’s very worrisome. If do here what will stop smaller tribes from taking our federal educational funds. This is just beginning and we have no plan to defeat.
All I need is to see a plan.

In one sense someone has opened gate and the sheep are starting to follow each other out. I see two issues here: gate open and that information gets to congress and left hand doesn’t know what right hand doing and so decision made regarding Navajo Nation and its NASDAH program.

But the other issue is HUD. Is there reason they didn’t want to join us today. I understand clarification is needed to identify $246 million. Expenditure plan is five years. What happened? Is that no longer being followed by NAHASDA and NHA? The $300 million is within five years and there has been no clarification of that.

Two issues, one with HUD which is key when comes to letter of intent. So where are we at, right now? It’s been stressed that key pple be brot together. Who are key pple? DC office? NHA? President? HUD? I think that is part of concern here at meeting cuz we are getting info about HUD from Congress that will impact our nation. So part of this initiative is to make sure these issues addressed.

“By golly we are Navajos and we shud continue to fight instead of rolling over.”

I see two issues and problem is HUD changing rules in midstream and Navajo Nation is getting shortchanged. To go against “Uncle Sam” is nothing new. We shud consider best interest of Navajo pple.

So what are we doing in Congress with proposed language? And why is HUD changing rules that impact $300 million federal housing money for NHA five year housing plan?

I have question for Navajo DC Office director Clara Pratt and this is first time that I heard that Congress planning to withhold federal housing funds from Navajo.

Is Navajo only tribe to be impacted? And is battle facing that when we lobby congress we will be looking at uphill battle, especially with President Obama supporting House? I want to know chances of success in striking this language from House bill.

No we are not only tribe impacted. We know that Hopi and White Mountain will likely be impacted. Carolyn Drew made request to HUD for official listing to make better assessment. Just because in President’s Budget not sure thing but thing of concern. But it doesn’t make sure thing. And not in Senate version even though not in House version. It will be little batter but not uphill battle. Can curtail with lobbying and Willie as NHA consultant has done good at getting that message across.

What is plan, strategy? There is strategy since couple of years back. DC office asked RDC to suspend any sweeping amendments to NHA cuz if made any drastic changes to TDHE then more problematic and harsh discussion coming out. We will continue to work to remove language and ensure that Navajo gets fair appropriation which is part of treaty obligation.

How much worse would situation have been? How worse can it get to have funds withdrawn? I know Zah and Begay went to DC but obviously that didn’t work. And Council has been told that we cannot make decisions for NHA.
I don’t think we’ll see a plan today. So what do we do? I don’t think President Shelly is answer. Shelly said at Twin Arrows, you council layoff and I’ll take care of. We respected that.
So I don’t know how long colleagues lay idle or give all housing power to Naabik’iyati. Let’s make this campaign issue; support delegates that support housing.

When we go to congress to lobby for federal housing for Navajo relocatees, we are told to go to NHA because NHA has millions of federal housing dollars that are unspent. So congress and President Obama have grown weary of NHA excuses.

Even if successfully remove proposed HUD language, we still need a plan.

Page 1 of 6, tab L indicates current draw down and balances, May 2013 $68,824,000 that has been drown down but this morning report indicates spent $142 million. I’d like to hear an explaination from NHA about the $80 million difference.

And Delegate Leonard Tsosie talked about plan and when look at purpose and outcome to achieve goals we have not gone that path. And today’s meeting is for unification to move forward. Obviously there is no plan.

One other indication in NHA report is it takes 2-5 years to get home site lease but Madame Chair Benally said untrue. Also heard from NHA staff that five chapters set aside 42 to 300 acres for housing. So that is positive.

Yes it use to take that long to get a home site lease and grazing permittees refused to give up land but there are positive points so we shud focus on that.

Also Arizona side of rez has much land set aside. New Mexico has more issues. Eastern allottees cud be problem. So those are points in how we as nation have improved process to allow NHA which has issues to move forward.

But we need a plan.

I also want a list of other tribes with outstanding federal housing fund balances to compare with NHA’s outstanding balance.

Also regarding reimbursement: allocation done but cuz NHA works on reimbursement process, is there something out there that prevents us from spending money we already have while waiting for reallocation? Explain that process?

$142 m is what spent in 2013. Section L is 2014 and that is our expenditure report as reported by HUD. We have spent $73 million and that will continue to escalate as we purchase and expend.

We do plan to spend $100 million by Dec. 31. And we have plan and I don’t have with me but discussed and sure NHA CEO Yazzie would have had info available if knew wud be asked.

The Goal is to spend $155 m but you said NHA spent $70 m so you have to spend $80 m?

Yes we do and we plan to spend additional amount

Does NHA have specific plan for these funds? How many homes have you built past three years and where? I have seen a single one. What seen is renovation but I don’t think we shud do. Serve Navajo people needs with new homes and worry about renovation. Know NHA responsible for 1932 units.

Kayenta veterans here and they reported to RDC that they feel that nothing is happening for them. We heard of a veteran re-enlisting and he returned in a box cuz he couldn’t get anything.

We hear about all these dollars but no numbers regarding homes, plans of where homes to be built? All I heard before was excuses of hard to get home site lease and if case then let’s put heads together and find a way.

I believe Judicial Branch part of problem and the Grazing Act, which is why RDC is amending it. Judicial Branch made lands fee simple lands so we need to address.

There are many things we can do. So if build lot of homes in short amount of time then we must bite the bullet and do it. We can propose all ideas we want but in the end, if Prez Shelly _ and I don’t know where he is – has no plan then the Council needs to approve a plan. And if Prez Shelly vetoes then Council needs to override cuz if we don’t then we’re back to square one.

I suggest we address by finding out where grant came from. I understand that when make request to federal government that you do thru proposal and that agreement sets expenditure plan and finish project.

But hear from floor is, “let’s just do and go spend anyway you want to.” But that is not true. There is proposal and so we shud address proposals and agreements that have gone thru process.

I agree. We need commitment from NHA, especially to relocatees and those people living on former Bennett Freeze. I believe that Sen. McCain wud not support the proposed language of HUD if our own TDHE/TRIBALLY DESIGNATED HOUSING ENTITY, which is NHA, shows commitment to spend money on relocates and former Bennett Freeze.

There have been millions spent on studies on relocatees and Bennett Freeze housing needs. We have all of that stuff.

First we never shud have been in this position of opening door to have federal housing funds taken back by HUD. We shud have always worked towards goal of justifying additional funds.

Are there plans to draw down housing money in third quarter?

I really wud like to see how much land has been identified by NHA for homes, including scattered homes and apartment, instead of round figures. I want to see those. And it will not take thousands of pages of reports.

Also let’s see plans for homes/housing, actual practical down to earth information instead of projected figures. Then we’ll have good idea and maybe even make recommendations so we can work together for homes for our people.

I’m looking for that report too and according to NHA’s Report, Tab L: what is being drawn down currently, it’s obvious there’s no commitment. But we, Council, made commitment and I include myself cuz Council ultimately responsible.

At last meeting I said that Council still responsible and RDC made amendments to resolve this issue of NHA not expending funds and HUD’s warning to take back unspent housing funds from NHA. And HUD didn’t say we will not stop taking back money and stop changing appropriation formula. But there is a letter in Tab C signed by HUD, that states that NHA promises to comply with all HUD policies and if NHA refused to comply then HUD may terminate, limit or reduce current and future grants and suggested a TDHE replacement. HUD cud also refer to federal attorney general.

RDC asked for new TDHE and NHA board and NHA fought RDC.

There also was another letter from Chavez John that specifically advised the Navajo Nation to have new TDHE and Board and that happened under Prez Shirley administration. Prez Shelly failed Council and more importantly the people.

NHA uses federal funds to lobby Congress and that is illegal even if claim that funds are from 1972 discretionary housing funds. There are no discretionary funds.

I appreciate that Congress and Prez Obama pressuring us to build homes for our people. So the proposed language is what I support cuz we are all just saying, we’re going to spend it down but there are not additional homes. I went to NHA dedication of new beautiful building and that’s not a home for people.

I will go to Congress at my own expense to support congress language. This is not money of consultant, NHA, or Council.

And to Ms Pratt, when is there a good time to address this. I also recall Prez Shelly telling RDC/Council to back off on NHA and that he would take care of.

Navajo Land Department Manager Mike Halona streamlined the home site leasing process and now it only 6 weeks for home site lease. Halona identified all withdrawn land for NHA, starting with 300 acres by Twin Arrows Casino.

So no more wool pulled over our eyes. Let’s be forth right otherwise I’ll be telling congress that you’re doing the right thing by telling us to spend money on houses instead of wrong things, such as administration buildings.

They allow you to spend ahead and get reimburses. Council has the money. That is what we shud be talking about.

We are hiding the truth from ourselves. If don’t face it then we have no business going to congress.

Tab 11: question from Delegate Russell Begaye. He said no expenditures in third quarter but we have entered month of June, July,’
We are using non-program funds which are not federal dollars to pay consultant.
There are some requests for additional info – number of homes built since 2007, location. What is NHA doing today and we will provide that info. The info I received info from departments is 1,184 homes built since 2007 but those are unconfirmed numbers.

My question regarded homes built by NHA since 2011.

Are you satisfied with NHA’S answers? You wud think since discussed last week that NHA wud be ready to go today. This is a semblance of what NHA has been doing all along and pulling wool over eyes of council.

How can we explain letter from HUD to people that over $100 million being taken back. There was outcry over millions in diabetes funds returned to federal government and what do you expect from this?

We need to get heads and resolve together without NHA and Prez Shelly’s permission. Shelly said give me time to address and leave NHA alone. We did.

So we’ll send him letter that Council is moving forward and how we will do it.

I told constituents that I see bright days ahead but requires taking TDHE back. We just have to. In the absence of that we cannot control expenditures of federal housing money and things will continue to go the way they are. And Pratt has not explained to the Council why HUD didn’t stop taking back federal housing dollars from NHA and changes to the appropriation language after she advised the Council against taking back the TDHE from NHA because that wud result in HUD taking back funds and amending appropriation language.

I saw presentation of some award to NHA for GIS capability to identify where housing constructed and possible construction sites. A capable CEO wud be using that capability. Today we have CFO telling us, we’ll get back to you and that is same message we have been getting. And NHA runs into our meeting with annual five-year housing plan and NHA wants approval immediately.

So how do we go to Congress and talk homes without information that we’ve been asking for. What can you do?

Are you satisfied with these answers? Or are you serious about getting answers and make a plan. I’m ready to work and roll up my sleeves but I need information. We need to recapture TDHE so we are responsible for expenditure of federal housing funds.

I also feel frustration with key housing personnel.
I respect Navajo Nation for keeping a balanced budget, unlike federal government which spends more than it has and which is why congress is looking at millions of federal housing dollars that is sitting at NHA.
And 75 to 80 percent of Navajo budget is federal dollars and so congress will figure out a way to get at those unspent federal dollars.
Right now this issue is just floating out there and all these threats are coming from both sides. I’m trying to understand and we shouldn’t internalize and fight each other. This is issue is bigger than one entity; it’s a Navajo Nation issue.
So is Navajo Nation identifying the key people to address these issues? And HUD is not here.

We are doing best we can to spend funds and look at available land. I know high rate of frustration. I’m aware of land being withdrawn. Mike Halona identified fee simple land.

Over $300 million in jeopardy and that is what I am asking – what are they doing to address that?

We are working with HUD to seek a negotiated meeting with them on amount they propose to recapture. We had meeting in Phoenix with Assistant Secretary Henriquez regarding $102 million to be returned. At that meeting, we provided info that we spent all money except for $41 million. currently reply made to take back $41 million. we are negotiating now. And I request NHA attorney Patterson Joe to address the joint committees.

Navajo Housing Authority attorney Jefferson Joe reported to a joint committee meeting of Resources & Development Committee and Naabik'iyati Committee about NHA's plans to give about $19 million back to Housing and Urban Development. Photo by Marley Shebala.

Navajo Housing Authority attorney Patterson Joe reported to a joint committee meeting of Resources & Development Committee and Naabik’iyati Committee about NHA’s plans to give about $19 million back to Housing and Urban Development. Photo by Marley Shebala.

HUD issued a Notice of intent to impose remedy on July 2013. We are in four step process and at third step which is informal meeting. We sent settlement offer to Assistant Secretary Henriquez to settle $102 million that HUD would take back. If HUD accepts NHA settlement offer then this issue will be resolve and that’s the end of it.

NHA only at third phase and settlement offer, which was made May 20, 2014. And Prez Shelly supports and the settlement letter is in NHA material. If HUD accepts offer then resolve, and no $102 million returning to HUD.

This settlement is separate from appropriation language and Senate needs to approve. As far as I’m aware that language is not on senate side. We have talked with several senators and they are willing to oppose anyone proposing language.

There are talking points in NHA material for lobbying Congress to keep language out of bill.

I’m listening to my colleagues and I’m waiting for a strategy from NHA. And for the Committees and Council to assist, NHA needs to provide information.

As I heard from Clara Pratt, congress looks to what Navajo Nation doing even though NHA goes up there to lobby.

So my point is, is that there needs to be a strategy.

NHA reported that of $155 million, NHA will spend $75 million which leaves balance of $40 million. where is the plan for $40 million? is there something in Navajo that prevents NHA from spending $85 million?

Next number, NHA expects to spend $100 million by Dec. 31, 2014. So again, is there a plan? And are there issues in Navajo preventing from spending those dollars?

On $41 million that u just brot out: issues in Navajo that prevent from spending. When totaling all of those funds, it’s about $200 million and that’s on top of what cud be taken.

That is my point in earlier comments,. We as nation have to show congress, this is what we are doing and what colleagues asking NHA for is that information.

With ur permission, Madame chair, tomorrow (5/28/14) Naabi is meeting so NHA needs to put all info together and notify the speaker office that NHA has info. And if Naabi want to hear then they can amend agenda to hear. At least they will have that.

And NHA needs to identify a strategy that involves Council and perhaps Prez Shelly can help NHA.

Ms Lynch, you said you are in settlement stage, so need copies of letters. Anytime there is government to government agreement, you need to share with Naabi. Personally I’d like to see the $20 million that NHA is offereing to give back to HUD to be used for residential units.

I’m just now seeing settlement offer, which includes $11.8 million from Shiprock. Based on that letter, HUD awarded monies to NHA to complete project for Shiprock but NHA telling HUD, you can take south Shiprock funds and we’ll call it even. I’m disappointed cuz those funds represent homes. NHA cud have taken from non-residential areas.

NHA’s May 20, 2014, settlement letter basically says we are giving up on homes in south Shiprock. We’re putting Shiprock on sacrificial block to save NHA.

Does NHA have authority to lose money? If you read NHA settlement letter, I thot I found new presidential candidate but we’re losing housing money.

And letter sent to Prez Shelly and Board president. Only way found out about this was through meeting last week.

These enterprises are taking actions not in best interest of people.

For NHA to say they will send back $20 without consulting people is not in their plan of operation and our laws. Our chief legislative counsel needs to review and tell NHA they don’t have that authority.

Is this another distraction to appease HUD? And by this time next year this NHA staff cud be working for another company and claiming on resume that they did such great work for NHA.

NHA has offered to let go of $20 million so what is to stop HUD from saying it wants more. Shud we allow housing entity which is charged with building nice homes for people to return funds? This is bad precedent.

Maybe one positive signal that Council cud send to congress is to totally replace NHA management and board. That is one positive message.

There is also council decision to keep this NHA administration and board but now the council was left out of loop between NHA and HUD.

We can’t seem to come together. Housing is number issue of people. I attend community meetings and people tell me that their housing application is 30 years old.

I think if any lawyer draft opinion supporting this then I want to see legislative intent to allow NHA to return housing funds. The intent was for NHA to building houses.

NDOJ need to research that question but Council designated NHA as TDHE and being TDHE means complying with HUD laws.

No matter how skin this cat, we must keep focus on what is before us and what is the consequences. And it is the responsibility of the Council to make decisions and council said for oversight to make decision. But all we are doing is chastising NHA.

But recommendation I support is for plan and how to remedy. That will take some time and we need to give them that opportunity to bring back tomorrow as pro temp bates suggested.

I want it put on record that Shelly wrote a letter to HUD that Navajo Nation agrees with settlement offer and that Shiprock can be sacrificial lamb to terminate plans to demolish homes and rebuild them. NHA’s first offer to HUD is $68 million and then NHA said let’s take more money from Shiprock. So it’s two piles of money earmarked for Shiprock that NHA dangling in front of HUD. That is under Tab K.

Delegate Russell Begae, do u remember when we discussed changing TDHE from NHA. You voted for NHA to continue as TDHE.

Settlement is not what HUD wants.

And ultimately Council is responsible. And I agree with Delegate Leonard Tsosie that it is time to make this a campaign issue. Homes are needed across the rez. Veterans are dying as they wait for homes.

Me personally I have no money to hire pple to tell you otherwise and to tell you that what is in black and white is a lie.

Let’s address it. It’s long overdue – three years. It’s not NHA hurting, it’s your pple and mine hurting.



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