Committee seeks to limit nonprofit access to facilities tax

A citizens committee is recommending that nonprofit organizations be ineligible for Minot’s city sales tax for community facilities unless working in partnership with a political subdivision.

Any political subdivision would be eligible for funding if its facility meets project criteria.

The committee sought to steer away from the need for the city to continually enter enterprise agreements with nonprofit entities to comply with state law on how governments can donate to groups. The city has given sales tax dollars to nonprofits such as the YMCA and Bishop Ryan High School as well as donated to political subdivisions such as Minot Park District and Minot State University. Community concern over how the tax money was being spent led to the city setting up a committee to define “community facility.”

The definition adopted by the committee states: “A community facility would fill a need by the community, and it should be owned and operated by a political subdivision. If nonprofit groups are to be eligible, they should be limited to partnership projects with political subdivisions, not stand alone non-profit projects. Local control is the main concern on any project funded, and true benefit to the community.”

The committee acknowledged that the definition won’t entirely eliminate the need for enterprise agreements, either by the city or the other political subdivisions that partner with nonprofits to access the sales tax. However, members see the definition as an improvement.

“We feel very strongly we are moving in the right direction with this definition,” committee chairwoman Brekka Kramer said. “This is where I feel we need to go.”

“I might feel a little better if the political subdivision were better defined,” committee member Jim Montgomery said. “But I am also thinking we need to allow some flexibility to the city council. I think it can work. I think the application process needs to be tightened up.”

The committee did not formalize other recommendations. However, members offered suggestions to award only tax dollars already collected, limit awards to once a year to allow adequate time for review, require matching funds from the project sponsor and ensure the project sponsor has funds to maintain the facility.