Traverse City Record-Eagle

October 23, 2013

TC won't distribute 2 percent monies

Traverse City Record-Eagle

---- — 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.

"It's good for the agencies that are getting the money and we are not going to stand in the way of that," Benda said.

Leelanau County considered dropping pass-through requests this spring but eventually passed on its lone application from a nonprofit to provide emergency financial assistance.

The Grand Traverse County board killed a grant request from Planned Parenthood of Western and Northern Michigan for abstinence education in 2012 because some commissioners objected to the organization's pro-choice position on abortion. The agency resubmitted to Traverse City which passed along its grant application to the tribe.

The agency will look for a new sponsor or seek a grant from the tribe outside of the 2 percent funding, a spokesman said.

City Commissioner Jim Carruthers, a Planned Parenthood supporter, said he was "misled" by a memo from City Manager Jered Ottenwess that indicated nonprofits could now apply directly to the tribe for grant funds.

"The state has since indicated that the grant funds should not pass through the city rather they should be given by the tribe directly to the recipient," Ottenwess wrote in his memo to the city commission.

Ottenwess said Tuesday that was his understanding, though he did not speak directly with officials from either the state or the Grand Traverse Band.

Officials with the Michigan Gaming Control board confirmed their opinion had not changed since 2012. The 2 percent revenue has to go to a local unit of government to address the local impacts of gambling operations.

"I'm concerned for many of these groups" Carruthers said. "I think this needs to be brought back before the commission at our next study session."