In an effort to make budget deliberations easier — particularly nonprofit contributions — the City of McMinnville’s Board of Mayor and Aldermen opted to set a ceiling on how much revenue will be earmarked for donations to nonprofit groups in this year’s budget.
During last month’s meeting, City Accountant Samantha Moore introduced a recommendation provided by MTAS (Municipal Technical Advisory Service) during last month’s meeting which suggested capping nonprofit funding to equal 3% of property tax revenue. At the time, the matter was not voted on until Tuesday night when it returned for consideration.
As an example, Moore explained the average tax bill in the city would contribute an estimated $26.31 to nonprofit awards if the 3% model was adopted as policy. If the city elected to allot 4%, the number would become $35.08 and 5% would be $43.85.
The amount of funding awarded to nonprofits has been different each year and often fluctuates. It was as high as 8% of property tax revenue several years ago, but has steadily trended lower each year since. During the current year’s budget, the city elected to allot 4.74% to nonprofits, which is almost half of the 7.56% from 2022.
Included in nonprofit appropriations are some constant recipients, such as the money awarded to Magness Library as a maintenance of effort, Chamber of Commerce dues and the population-based amount given to Upper Cumberland Human Resource Agency (UCHRA) and Upper Cumberland Development District (UCDD). According to Moore’s calculations, these contributions alone account for about half of the prospective 3% set aside with the policy suggested by MTAS, leaving the other half for all other nonprofits the city may have choose to award money.
“I read somewhere in our information that said property tax is one of our biggest revenues, but that’s no longer true with us, is it?” Vice Mayor Steve Harvey asked.
Moore indicated property tax revenue has been exceeded by the combined Local Option and the Local Option Agreement.
With 3%, the city would have $170,000 to split between nonprofits and it would be the lowest amount ever attributed for this purpose. Moore provided other examples of attributions, such as 4% and 5%; with the contribution set at 4%, $230,000 would be available for the 2025-26 fiscal year budget and 5% would be approximately $285,000.
“I can tell you this, it’s a lot easier to do this now and get a limit and then decide where it goes than it is at budget time when they’re turning in their papers,” Harvey said. “It’s hard to do at that point.”
The new application, which will be launching for this year’s budget season, helps nonprofits better understand if they meet the criteria outlined in the document. It indicates a nonprofit is not eligible for funding if it is not a 501©(3), 501©(4) or 501©(6), and outlines all applicants must be able to prove they have nonprofit registration, are not a United Way-funded agency or a recipient of other financial assistance from the city.
Alderman Rachel Kirby floated the idea of a 3% contribution, but the board ultimately moved forward with a 4% ceiling on nonprofit donations at Mayor Ryle Chastain’s suggestion. Alderman Keri Morton motioned to approve the 4% ceiling and Alderman Kara Youngblood seconded, all members of the board were in favor.
“It’s still three-quarters of% less and still reduces our obligation, but isn’t as severe,” Chastain said.
Fiscal Year 2024-25 Nonprofit Appropriations • McMinnville-Warren County Chamber of Commerce — $71,000 in addition to $5,500 in dues • Main Street McMinnville — $35,000 • Black History Museum of Warren County — $9,500 • Families in Crisis — $8,000 • Warren County Rescue Squad — $7,425 • Magness Library — $68,000 (maintenance of effort), $25,000 (one-time donation to be used as a bonus for faculty) • Tourism Development Board — $169,793 • Young Men United — $5,000 • Homeless of McMinnville Effort (HOME) — $20,600 • Warren County Senior Citizens Center — $30,000 • McMinnville Special Games — $4,750 • Upper Cumberland Human Resource Agency (UCHRA) — $2,800 • Upper Cumberland Development District (UCDD) — $2,800