Proposed Brainerd charter change puts nonprofit funding in jeopardy

BRAINERD — A portion of the funding for three Brainerd nonprofits might be in jeopardy, with a proposed change to the city’s charter.

Charter Commission members voted 5-1 in May to recommend the city remove a section of its charter promising levied funds each year to organizations focusing on services for seniors, green space and community action. Commission members said they were proposing the move to avoid showing favoritism to certain nonprofits over others. The Brainerd City Council approved the first reading of the ordinance change Monday, June 6, and will host a public hearing on the issue at its next meeting.

The council’s vote on approving the first reading and dispensing with the actual reading Monday was unanimous, but only because a split vote would have meant the whole ordinance be read in its entirety. An ordinance must go through multiple “readings,” though, and a public hearing before it can be approved.

“I’m going to vote for it tonight because I don’t want to sit through the reading,” council member Tiffany Stenglein said, “but I think that I heard a lot from constituents about how much the amenities that are provided through these funds mean to them, and so you can expect me to vote no on the second time around.”

The input Stenglein mentioned came during a public hearing May 2 , when community members spent about 40 minutes telling the council about the benefits of the Northland Arboretum. Representatives from The Center also shared testimony in March, after learning they would have to go through a request for proposal process instead of securing the funds they normally get each year.

Historically, Brainerd’s charter guaranteed a portion of its levied tax dollars to the Northland Arboretum, Brainerd Community Action and to the establishment and maintenance of a program for the benefit of senior citizens or to subsidize a nonprofit senior citizen organization. The City Council, at the recommendation of the Charter Commission, amended the language last year to exclude the names of specific organizations but commit to supporting entities that provide community programs and events and arboretum or green space organizations within the city limits of Brainerd .

With the previous contracts with Brainerd Community Action, the Northland Arboretum and The Center for the money ending in 2022, the council decided to go through a request for proposal process to determine which entities would receive the money.

After approving five-year contracts with The Center and Community Action in March, council members debated about the Arboretum’s proposal, as 260 acres of the 420-acre facility is in Baxter, as is the visitor’s center, on which most of the funds from the city would be spent. Several community members testified as to why the Arboretum is important and should get the funding, which was roughly $92,000 in 2020-21 and more than a quarter of the nonprofit’s funding.

Theresa Bourke / Brainerd Dispatch

The council ultimately voted 4-3 to give the money to the Arboretum through 2023, allowing the council time to set up another request for proposal process for future funds. Council members also wanted to see a working group formed with representatives from Brainerd, Baxter, Crow Wing County and the Arboretum to discuss future funding options.

While the Charter Commission reviewed language changes to the document May 11, commissioner Kevin Yeager proposed removing the section promising funds to the three organizations altogether.

“The first point I want to make is that I fully support The Center, Community Action, the Arboretum, all of their endeavors, everything that they do,” Yeager said. “I have not one bad thing to say about any of those entities, and I have not heard one city member or anyone from the public say anything negative regarding these entities.”

But after thinking the matter over the past couple weeks, Yeager said he ultimately felt donating money to only three nonprofits out of many in the city showed favoritism, even if it may have been a well-intentioned measure when first approved. Brainerd has a multitude of amazing nonprofits, he said, that could use city funding.

“These are organizations that are fighting every day, tooth and nail, to keep their doors open, to keep staff, to keep programs going, to keep soup on the shelves, to keep books on the shelves for children, to keep these programs alive,” Yeager said.

“These institutions receive zero, nothing — not one penny, not one dime, not in-kind services, nothing. So the question that I have been asking myself isn’t why the Arb or why The Center or why Community Action, but why just those? And why is the city of Brainerd in the position, or putting themselves in the position to take money out of taxpayers’ pockets, filter it throughout our checking account and selectively pick three institutions to give this money to?”

Not wanting to strip the funding instantaneously though, Yeager proposed extending the Arboretum’s contract to five years to match those with The Center and Brainerd Community Action, but ceasing to give that portion of money to the nonprofits after the five years is up.

“If these institutions are as valuable as we think they are and the citizens of Brainerd think that they are, they will have no problem moving forward into the future, not only sustaining but also thriving,” he said.

Kelly Humphrey / Brainerd Dispatch

Commissioners Jan Lambert, Mike O’Day and Jan Burton agreed with Yeager. O’Day said the idea for the city to help a nonprofit in its infancy might be a good idea, but there should be an end date for the support.

“Otherwise what you have is an organization just operating outside of its budget, technically, because it’s getting taxpayer dollars,” O’Day said. “It’s not fundraising enough for itself. And I think that’s what we need to maybe, in the weaning process, let these guys know that your budget will change eventually, but it doesn’t have to. You just have to figure out some fundraising.”

Kelly Bevans, who serves as council liaison to the Charter Commission but does not vote, noted Brainerd is the recipient of the same kind of benevolence from the state through Local Government Aid funding, with several pushes to have that funding reduced or cut off.

O’Day asked if those pushes could have been because of matters like this, where the city is using its money to fund select nonprofits, which Bevans said was an excellent point.

Brainerd Dispatch file photo

Commission Chair Jeff Czeczok agreed to Yeager’s proposal as well, and commissioner Andrew Shipe served as the lone opposing vote, noting the portions of the charter at hand are about the city’s values.

“They are a commitment from the city to provide funding to organizations that maybe can’t fundraise on their own,” Shipe said. “I don’t think planting trees is a real sexy charity, right? It’s not always going to get the funding. The senior center, they might not have the capacity or the resources to go out and raise money the same way that the local branch of the United Way does, and so I’m hesitant to strike this, knowing that this is defining, as a city, Brainerd values seniors, green space and community action programs.”

The 5-1 vote from the Charter Commission moved the measure on to the City Council Monday.

In order for a charter city to donate funds to a nonprofit, the expenditure must be written into the city’s charter, as state law does not allow for those sorts of donations. That’s why statutory cities don’t make those kinds of donations, City Attorney Joe Langel said Monday.

Council member Gabe Johnson, however, said he would vote in favor of the first reading, as there would still be workarounds.

“There are legal expenditures a city can make and contract out even if the entity they’re contracting with is a nonprofit corporation in the state of Minnesota. So eliminating these levies does not eliminate these organizations from ever being able to contract with the city on anything ever again. It just means we wouldn’t be able to just cut them checks and never ask for accountability,” Johnson said.

After stating how nonprofits could still receive city funding if the commission’s recommendation were to be approved, Johnson chastised other council members for revealing their votes before the public hearing.

“And secondly, I would just like to remind everyone on the council that we will have a public hearing next time, and to announce what your vote is before the public hearing is a grave mistake as a City Council member,” he said. “You need to hear the community’s input, then churn it, then make a decision. If you’re set before the public hearing, it’s not correct. So keep an open mind.”

The council’s next meeting is 7:30 p.m. June 20 at City Hall, during which time there will be a public hearing before council members vote on the second reading of the ordinance change.

THERESA BOURKE may be reached at theresa.bourke@brainerddispatch.com or 218-855-5860. Follow her on Twitter at www.twitter.com/DispatchTheresa .