Local nonprofit organizations are breathing a sigh of relief after the Mitchell City Council changed course on Monday and opted to approve the majority of 2021 subsidy applications.

Following several testimonies from nonprofit leaders representing the organizations that were facing the risk of losing out on their 2021 requests, the council found a middle ground and approved most of the applications with a 25% reduction in funds that were initially requested. However, the Mitchell Area Development Corporation, Convention and Visitors Bureau and Regional Economic Development, each had their applications approved in full with no reductions.

Heading into Monday’s meeting, the council was proposing to deny all but three of the 16 subsidy applications that were submitted to the city this year. Each year, the city considers approving subsidy applications that are designated for qualifying nonprofit organizations to receive city funding.

“My hope is to give 25% less than what we gave the organizations that submitted last year. That seems to be a more fair way of doing it because we are setting it at an equitable level for everybody,” said council member Susan Tjarks, who pitched the proposal to approve the applications at a 25% reduced rate. “I think we will be shooting ourselves in the foot if we don't give these groups any funding.”

Roswitha Konz, mental health clinical director of Dakota Counseling, urged the council to reconsider denying the subsidy requests. Dakota Counseling was one of the organizations at risk of losing their subsidy funds from the city prior to Monday’s meeting. Konz pointed to the increased demand for critical mental health services that have resulted from COVID-19 as a reason for the council to approve the group’s subsidy request.

“So far this year, we have had 184 emergency after hour phone calls that come in over the weekends at 2 a.m. And we have had 141 emergency after hour requests for mental health evaluations by law enforcement,” Konz said. “The need for our services is increasing, and we have applied for all the small business loans and CARES Act.”

Emma DeVos, a board member of Mitchell Main Street and Beyond, highlighted the work that the organization does for the community on an annual basis. From hosting First Fridays on Main Street to serving over 600 children for an annual Christmas shopping event, DeVos said the organization is one that gives back to the community in multiple ways.

“Those events serve a lot of people you may not be aware of. If our funding is cut, we will not be able to deliver any of those events this year. We are a community-supporting organization,” DeVos said, noting Mitchell Main Street and Beyond gained 12 new business members this year.

While the council backed the proposal to approve the subsidy applications at a reduced rate with a 6-2 vote, Council President Kevin McCardle wasn’t on board, emphasizing the city “needs to stop being the bank” for many of the nonprofit organizations that request funding from the city each year. Council member Jeff Smith supported approving the applications, however, he said a 25% reduction wasn’t a steep enough reduction considering the economic woes the city has faced amid COVID-19. Smith and McCardle made up the two opposing votes to the proposal.

“I’ve talked to a lot of former council members about this, and they said the city shouldn’t be a bank for all of these groups every year. I really think these organizations are great, but I also don’t think the city should be a bank for them,” McCardle said. “A lot of the organizations applied for money years ago for a short period of time, and they are still coming back 10 to 15 years later asking for more money.”

Among the organizations that the council was proposing to reject subsidizing in 2021 were the Prehistoric Indian Village, Mitchell Main Street and Beyond, Friends Foundation of the Mitchell Library, Friends of Firesteel, LifeQuest, Court Appointed Special Advocates (CASA), Dakota Counseling, Helping Hand Pantry, VFW Post 2750, Creative Force Law Drive (for Mitchell Township marketing), Mitchell Area Safehouse, Mitchell Municipal Band and the Exchange Club’s fireworks display. The combined total of subsidy requests that were submitted by the organizations amounted to $181,750.

But after the approval of the 25% reduction, that brought the total amount for the groups listed above that were approved to $83,625. Although the dollar amount of each group’s subsidy application varied, the combined total for all of the applications that were approved amounted, including the MADC, CVB and Regional Economic Development, to $530,625.

Another caveat to the subsidy request proposal was basing the reduction off last year's (2020) applications that were submitted to the city, which meant all new 2021 applications that were submitted this year were eliminated from the list. Therefore, Friends Foundation of the Mitchell Library, VFW Post 2750, Friends of Firesteel, Creative Force Law Drive and the Helping Hand Pantry, were among the new requests that were excluded from receiving any subsidy funds this year.

For Council member Marty Barington, the approval of the 25% reduction was a good solution that represented every organization’s understanding of the unique circumstance which has resulted in many entities making cuts and tightening up their budgets.

“All of these entities are entitled to some funding, but we all know that we have had to make cuts, and we’ve had to ask city department heads to also make a lot of cuts. Every citizen in the United States has had to make cuts everywhere,” Barington said. “I support this 25% reduction, as I think it shows we are all making strides to some type of cutting somewhere along the line.”

On the budget side of things, City Administrator Stephanie Ellwein said the anticipated drop in sales tax and entertainment tax this year could put the city at risk of having to tap into cash reserves. According to Ellwein, the most recent projections on the entertainment tax shows Mitchell is down 11% from the previous year, while the first- and second-penny sales tax is down 0.42%, which equates to the city being roughly $60,000 under budget.

“Everything is very volatile and uncertain, but we are trying to put in some safeguards for revenue shortfalls so we don’t have to go right to the reserves,” Ellwein said.

Review of MADC's hiring progress

Between the MADC, CVB and Regional Economic Development, the council approved the groups' requests for a combined total of $447,000 in subsidy funds.

While the three organizations at 601 N. Main St. had their applications approved, council member Steve Rice requested to review the MADC’s progress on hiring a new executive director for the group to receive the $167,000 subsidy. The council unanimously approved Rice’s motion for the MADC review, which will place the subsidy funds on hold until the council reviews the MADC's direction for hiring a new executive director.

Rice’s request comes after Mark Vaux, former MADC and Chamber of Commerce executive director, was asked by the MADC board to resign in August. The MADC and Chamber of Commerce are in the process of seeking for a new leader.

“With the changes that have happened across the street… I would like to put a review time after the 1st of the year to visit with them once their executive team has their organization and investigation for hiring which they anticipate to be around Jan. 1,” Rice said.