TRAVERSE CITY — Traverse City commissioners quietly opted out of distributing tribal gambling proceeds to nonprofits headquartered in the city, including the Father Fred Foundation and Planned Parenthood of Northern Michigan.
The decision puts at risk money the nonprofits rely upon, if they can't find another government to sponsor their tribal funding applications. The Father Fred Foundation typically seeks money for its food pantry and home heating assistance, and in 2012 received a $60,000 grant from the Grand Traverse Band of Ottawa and Chippewa Indians for heating assistance.
"It is a critical piece of our budget ... and that money is really needed because what we receive from the state for heating assistance doesn't meet the need," said Rosemary Hagan, Father Fred's executive director.
City commissioners changed their previous stance without debate following objections raised by state officials who object to local governments acting as pass-through agencies for community charity groups that receive grants from the Grand Traverse Band. The tribe distributed more than $20 million over two decades to local governments and area nonprofits.
The tribe is required to send 2 percent of its electronic gambling revenue to local units of government under a 1993 federal consent deal between the state and tribe.
"Because one of those parties disagrees with the administration of the 2 percent grants as pass-through grants, the city should respect the direction given by the state," wrote city attorney Lauren Trible-Laucht in a memo recommending the city stop accepting grant applications.
County boards in Grand Traverse and Leelanau counties both opted to ignore those same directions from the state after considerable debate. Grand Traverse County changed its policy in 2012 to ensure that it only submitted grants from nonprofits for legitimate government activities, then contracted with those nonprofits to perform those services.
Grand Traverse County will continue to accept grant applications, said Dave Benda, county administrator.