WINDOW ROCK, Ariz. - The Navajo Nation Council voted 15-1 June 30 in support of legislation that would allow the Navajo Nation to refinance a $60 million loan the Nation received in 2010.
The loan was used, along with stimulus funds from the American Recovery and Reinvestment Act, to build public safety and judicial complex facilities in several communities, including Kayenta, Tuba City, Crownpoint, Ramah and others.
Legislation sponsor Council Delegate Alton Joe Shepherd (Jeddito, Cornfields, Ganado, Kin Dah Lichíí, Steamboat) explained that refinancing the loan would prevent the Nation from having to pay a lump sum of over $53 million in July, in accordance with the terms of the 2010 loan.
Shepherd previously said refinancing the loan will likely result in a lower interest rate, saving the Nation millions of dollars over the life of the extended loan.
The Navajo Nation will authorize the issuance of bonds to be sold in order to refinance the loan through Key Bank - the financial institution that provided the initial loan - which will allow the Nation to issue bonds for the first time in history.
Despite support from the majority of Council members, Council Delegate Leonard Tsosie (Baca/Prewitt, Casamero Lake, Counselor, Littlewater, Ojo Encino, Pueblo Pintado, Torreon, Whitehorse Lake) asked his colleagues to vote against the measure to protect Navajo sovereignty, affirming his position that the Nation was waiving its sovereign immunity.
Council Delegate Seth Damon (Bááháálí, Chichiltah, Manuelito, Tsé Lichíí', Rock Springs, Tsayatoh) disagreed with Tsosie and said he believes issuing bonds will move the Nation in a new direction and allow more financial options for the Nation to fund future projects.
Following the special session, Speaker LoRenzo Bates (Nenahnezad, Newcomb, San Juan, Tiis Tsoh Sikaad, Tse'Daa'Kaan, Upper Fruitland) said Key Bank worked with the Nation's investors to provide for a loan to the Navajo Nation with competitive favorable terms for the Nation, adding that the loan refinancing agreement was reviewed by the Navajo Nation Department of Justice.
Bates also emphasized the Navajo Nation Arbitration Act requires that in the event of a dispute concerning the loan refinancing agreement the parties will bring the issues to Navajo courts.
"The loan financing document specifically states that Key Bank and the Navajo Nation consent to enforcement of an arbitration decision before the Window Rock Navajo Nation District Court - an important exercise of Navajo sovereignty," Bates said. "The Navajo Nation Council is using the Navajo Nation Arbitration Act in a meaningful, well-thought out manner."
President Russell Begaye will have 10 calendar days to approve or disapprove the resolution once it is sent to the Office of the President for review.
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