How Health and Human Services Uplift Community Economic Development
There are a multitude of ways in which the development of health and human services facilities have supported the community economic development goals of tribal and Native communities.
The management of healthcare facilities and programs is a critical piece of self-governance and self-determination.
This session, Health and Human Services, featured discussions about two health centers in rural areas, the Lac Courte Oreilles (LCO) Band of Lake Superior Chippewa Health Center and the Pawnee Nation of Oklahoma Behavioral Health Clinic.
The discussion between Subject Matter Experts representing the projects centered around how they identified a need for the facilities in their communities, how they secured funding, and the impacts the health centers will have and are having on community economic development. Experts also discussed how the 105(l) lease program can help fund and support Native health centers.
Subject matter experts
Key Takeaways
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Both the LCO and Pawnee Health Centers utilized Needs Assessments to identify healthcare needs in their communities. The data collected during community needs assessments help tribal decision makers prioritize needs and support applications for grants and other funding sources. The data can also help identify service gaps and inform which recourses are required to finish projects. These projects take time and deliberate planning.
LCO identified a great amount of need for healthcare facilities on their reservation, especially after Covid. When things shut down and only emergency services were offered, there was a lack of healthcare services for non-emergency circumstances.
Pawnee identified a lack of treatment options (including being thousands of beds short). The tribe was primarily focused on preventing relapse and keeping the road to recovery going. Pawnee started their project with a 1-year planning grant. This was a new project to everyone involved -- representative of the fact that any and all tribes can undertake similar projects with the right resources.
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“Capital Stacking” was utilized in both projects to fill in the funding gaps. Capital stacking is using a ‘stack’ of different sources of capital such as loans, grants, tax credits, or other debt and equity to purchase, build or develop a piece of real estate or another asset. This innovative approach to funding complicated projects can reduce the barriers rural and low-income tribal communities face when completing costly, high-in-demand projects.
LCO partnered with Baker Tilly and Native American Bank who both helped the tribe navigate funding for this large-scale project. These partnerships helped create a relationship with IFF, a CDFI, which had not worked in Indian Country before. This effort showcases that tribes who partner with outside organizations not only uplift their local communities but help Native CDFIs develop a track record in Indian Country such that other tribes can begin to utilize their resources.
NMTCs provide capital for low-income and underserved areas. Although NMTCs only cover up to 20% of a project, they are critical for filling gaps between other sources of funding.
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Tribal health centers promote community economic development by:
Promoting and maintaining a healthy labor force and increasing labor force participation rates
Driving infrastructure development
Generating direct revenue through 3rd party (Medicare and Medicaid) and other billing
Serving as a gateway to broader participation in regional economies
Are an amenity to attract and retain workers
For LCO, the healthcare system became a center of their community and helped set up broadband and a sewer line. These resources then helped build their tribal college and more housing. The facility also helped tribal members access the internet whereas only about half of members had access beforehand.
Brian Kirk Introduction
Matthew Pugh Introduction
Glenn Hall Introduction
Marina Titova Introduction
Paula Poncho Introduction
“Health isn’t just a social service and something that kind of controls one aspect of the of community, it’s part of economic development, it’s part of sovereignty.”
Session Summary
Importance of Health Facilities for Indigenous Communities and How They Relate to CED
Discussion abount Health & Human Services and the connection to CED
Kevin Klingbeil, Managing Director of Big Water Consulting, began the session with an overview about how the management of healthcare facilities allows tribal and Native communities to reduce their dependence on and vulnerability to the historically insufficient services offered by the federal government. These facilities also directly connect the provision of health and human services to their culture and spirituality.
Health services are a direct source of reliable revenue which can be utilized for other community economic development projects. An array of programs, loans and grants from USDA, EDA and Treasury’s CDFI Fund (of which the latter two are focused primarily on economic development), highlight that health and human services programs and facilities are core drivers of comprehensive community economic development in tribal and Native communities.
Tribal health centers promote community economic development by:
promoting and maintaining a healthy labor force
increasing labor force participation rates
driving of infrastructure development
direct revenue generation
serve as an amenity to attract and retain workers
are gateways to broader participation in regional economies
Needs assessments and data collection efforts highlight how interconnected health and human services are to barriers for families and CED.
Marina Titova discusses the unique role community clinics play.
Marina Titova expanded on Klingbeil’s point and discussed how IFF is specifically interested in community clinics because of how they impact more than health services.
Community clinics have a different business model than for profit clinics.
Not only are they essential providers of essential services for the community, but they become anchors that support workforce development and help retain local community members.
They can provide catalytic impact, bring in more investors, and promote other successful projects in the community.
The Decision Making Process and How the Health Facilities Helped Uplift the Entire Community
The decision making process and healthcare impact on CED.
Glenn Hall discussed the LCO Health Center:
Before the new health center, LCO often experienced early shutdowns and only offered emergency services as Indian Health Service (IHS) only provided around 46% of the cost of healthcare. The need for a new center had been established for a while as feasibility studies were conducted in 2002, again in 2012, and a needs assessment was conducted with Big Water Consulting in 2019.
After sufficient need was documented, LCO sought out a good financial partner to help achieve their goals. Baker Tilly’s Matt Pugh helped LCO with their first critical move by requesting a proposal for New Market Tax Credits (NMTC). The second critical move, which took the longest, was finding a spot for the health center.
The center created a ripple effect by creating a centralized spot for CED. The development increased access to broadband; the tribe’s access to internet was below 50% before. The increased sewer lines allowed for more housing development, college buildings, and government services.
Brian Kirk discussed the Pawnee Nation Behavioral Health Center
The pre-existing health facilities at Pawnee Nation provide a lot of preventive care. With their needs assessment, the nation found gaps in access to relapse treatment and the road of recovery. This affects both Tribal and non-Tribal members.
Despite this type of project being new to the tribe and Brain, they started with a one-year HERSA planning grant. They then received help from Baker Tilly (and Matt Pugh) to start planning their capital stack.
Both of these examples highlight that impactful projects take time and planning. It should not be lost that it is possible for smaller and/or rural tribes to find creative solutions to administrative barriers.
LCO and Pawnee Utilized Capital Stacking and Partnerships to Uplift Their Communities and Support Native CDFI Funding Networks
Capital stacking and New Markets Tax Credits as a funding tool.
New Markets Tax Credits are a capital investment tool used to fund transformational projects in low-income areas. (Low-Income in this case is defined by poverty rate, median income, and unemployment rate). NMTCs fund projects that create impacts extending beyond the immediate project itself.
Partnering with other financial institutions and funding sources allowed IFF to become more comfortable with working in Indian Country. It also helped uplift and create partnerships with native CDFIs such as Native American Bank and Oweesta.
Those awarding NMTCs look for meaningful impact – such as educational impact, increased food access, workforce development, etc.
NMTCs are a great tool to “fill in the gap” that might exist between other sources of funding. In this way, they can be paired with other sources of capital.
These two projects showcase that small, underserved communities have what it takes to successfully design and complete impactful projects.
Joel Smith from Native American Bank, Glenn, and Kevin expanded on how partnerships build an ecosystem of native lending and how familiarity with Indian Country helps move projects forward.
Filling funding gaps and the ecosystem of native lending.
Impacts of Healthcare Facilities on Indigenous Success
Brian and Glenn share what impacts healthcare projects have on their communities
Both Brian and Glenn highlighted that their health centers will increase revenue generation for their respective tribes and communities. LCO went from $1 million to around $16 million in third party payments.
The Section 105(l) lease covers the loan payments of the project for LCO. LCO went from receiving $180,000 through their IHS agreement to $900,000 annually.
LCO undertook “new ground” with capital stacking.
Brian highlights that this project enhances sovereignty and self-governance for Pawnee Nation.
This project will enhance more CED to bring in more community members.
The Underutilized 105(l) Lease Program
Paula walks through the underutilized funding vehicle
The 105(l) lease program came about through public law 93-638, the Indian Self Determination Education Systems Act. in 1997. Paula Pancho helped create this program for villages in Alaska.
Paula offers an hour and a half training session that she gives to tribes upon request. She encourages tribal decision makers to give her a call!
This program is underutilized, especially around Navajo Country and in the Great Plains region.
Once a tribe signs a 105 L lease with IHS, they no longer get maintenance and improvement (M&I) funds. However, often times M&I funds offer $1 a square foot for facilities, while 105(l) lease program minimum is $10 per square foot and can go up to $100 per square foot.
Examples of lease spaces are hospitals, clinics, housing for healthcare providers, storage, office space, long‐term care, diabetes and more. (If it is in your funding agreement, it is most likely covered).
Leases are one-year terms.
Leases offered are Fair Market Rent (FMR), Combination FMR & (a)‐(h), and Compensation Elements (a)‐(h).
Small Indigenous communities can take on big projects
Brian Kirk encourages small tribes to take on impactful projects
Brian shared some parting words for participants. He highlights how these projects showcase that tribes do not need to be large or “rich” to capital stack. He highly encourages small tribes to take on these projects.
The Pawnee Nation utilized a $1 million EDA grant to add onto their capital stack. Read more about it below.
Success Stories/Current Projects:
Healthcare Funding Resources:
Closing Thoughts
There are resources available, including the above subject matter experts (SME), who can help tribes and their programs get involved in large scale projects.
Questions, with answers from the Resource Group and fellow participants, will continue to be posted in the Knowledge Bank on the CoP website. If you have questions that you want answered, please ask in the LinkedIn group or share it with the administrators.