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Council walks back several proposed subsidy cuts for some Mitchell nonprofits, while a few remain trimmed

Dakota Counseling Institute and Heartland Regional Economic Development were among the nonprofits that had their subsidy cuts remain as proposed.

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People stopping by to take photos of the Corn Palace walk past the 601 N. Main St. building that's home to the Mitchell Area Development Corporation and Mitchell Area Chamber of Commerce.
Republic file photo
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MITCHELL — A handful of Mitchell area nonprofit organizations that were on the verge of having their city subsidy funds trimmed managed to minimize the proposed cuts.

Prior to the Mitchell City Council fine combing through the list of nonprofits looking for city subsidies during the Oct. 3 meeting, council member Jeff Smith echoed concerns of the sluggish economy and recession fears as reasons to keep the city’s contingency funds plentiful. Some nonprofit subsidy funding impacts the amount of Mitchell’s contingency funds, which are used to cover unforeseen expenses and emergency repairs.

“We know where inflation is. Some economists say we’re in a recession, others say it’s coming. We know that harder times are coming down the road, and that’s why I’m leaning toward getting closer to Stephanie’s (Ellwein) $844,000,” Smith said.

Ultimately, the council walked back some of the proposed subsidy fund reductions that a handful of nonprofits were facing.

Among the few organizations initially looking at cuts that are now proposed to receive their full requested amount are the Mitchell Area Development Corporation (MADC) and Convention and Visitors Bureau (CVB). The MADC had its $167,000 subsidy request approved, gaining the proposed $27,000 cut. The CVB managed to secure its $250,000, gaining the $50,000 from the initially proposed cut. The city’s growth in property taxes will help fund the proposed cut for the MADC.

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The council’s decision to approve the full amount of subsidy requests came a few weeks after Tim Bottum, president of the MADC board, spoke about the nonprofits’ “great momentum” since welcoming new leaders roughly a year ago.

While the two nonprofits that serve as marketing arms for the city and set out to grow Mitchell and recruit new businesses had their requested subsidy amounts approved, a handful of other organizations didn’t have the same fate.

Dakota Counseling Institute had its $13,250 cut from the $26,250 requested amount remain in place after the Oct. 3 meeting due to what some council members say was the organization adding $1.9 million to its cash fund reserves.

Executive Director Michelle Carpenter said the $1.9 million Dakota Counseling added to its cash reserves came from coronavirus-related grant funds. She emphasized the coronavirus grant funds are “very tightly earmarked.”

Despite the financial boost from the grant funds, Carpenter said Dakota Counseling is having a “really tough year.”

Carpenter pointed to inflation and Dakota Counseling’s low rates lagging behind as key issues contributing to the tough year.

“The issue is the staff. To be able to retain or recruit any staff, we’re not going to be able to sustain that after a year or two years because the rate’s just not going to support it,” she said.

During the discussion over Dakota Counseling’s subsidy funding, council member Susan Tjarks broke down the formula the committee is using to propose nonprofit organization subsidy cuts this year, which she said entails trimming subsidies for nonprofits that saw growth in their fund balances exceeding the amount requested from the city.

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In previous years, several council members took issue with Dakota Counseling’s subsidy requests to the city due to their services being a county requirement. Carpenter said she was waiting to hear back from the county regarding the organization’s subsidy application.

Joining Dakota Counseling in having its initial proposed subsidy reduction remain the same was Heartland Regional Economic Development – a branch of the Mitchell Area Chamber of Commerce that aims to spur economic growth and development in small area communities near Mitchell. Smith noted the surrounding area communities that benefit from the organization should pitch in more considering the towns that get help developing aren’t Mitchell.

“Mitchell has stepped forward from the beginning and contributed since 2010. I just think it would be good to challenge them to get more of those towns involved,” Smith said.

The council-led committee’s recommendation to reduce the regional economic development organization’s $35,000 subsidy to $25,000 stood.

The Prehistoric Indian Village had its proposed subsidy cut minimized. Initially, the committee was recommending a $10,000 cut from the Indian Village’s $19,000 subsidy request.

After hearing Cindy Gregg, executive director of the Indian Village, speak about the steady visitor numbers and new documentary film that will soon be released, the council narrowly agreed on trimming the tourist organization’s subsidy amount to $13,000 in a 5-3 vote.

Tjarks advocated for the Indian Village and referenced the upcoming documentary that’s set to premiere at Logan Luxury Theaters on Oct. 20 as a “huge opportunity to market” Mitchell and the Indian Village.

“Without a doubt, I think this will be a return on our investment. I think we will have a lot of people who will watch that and make a point of coming to Mitchell to see the Indian Village. We’re always giving money to the Corn Palace,” Tjarks said.

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After combing through this year’s subsidy applications, Big Friend Little Friend, Mitchell Area Council for the Arts, Davison County Juvenile Diversion Program and Habitat for Humanity had their funding requests nixed from the 2023 budget. The committee said the three organizations not requesting city funding in previous years as main reasons behind their recommendation to deny the requests, while the elimination of Habitat for Humanity’s $15,000 request centered around the city donating two lots for their next home build projects.

More on nonprofit subsidy applications...
A few of the nonprofit organizations that asked for city subsidy funds this year are sitting on cash fund balances that grew by over $1 million in recent years, which played a role in the committee recommending to reduce city subsidy funds.

Sam Fosness joined the Mitchell Republic in May 2018. He was raised in Mitchell, S.D., and graduated from Mitchell High School. He continued his education at the University of South Dakota in Vermillion, where he graduated in 2020 with a bachelor’s degree in journalism and a minor in English. During his time in college, Fosness worked as a news and sports reporter for The Volante newspaper.
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