Funding of partner agencies continues to be a significant budget conversation

Disagreements over the allocation of funding for various partner agencies have reared their ugly head once again at the City of Newton’s budget workshops. While city staff has recommended the bare minimum of assign funds for HIRTA and the Des Moines Airport’s expansion project, the mayor had her own ideas.

Mayor Evelyn George proposed Newton Main Street, Newton Development Corporation (NDC) and Newton Housing Development Corporation (NHDC) still receive funding for at least one more fiscal year. However, other groups like the YMCA, United Way and Retired & Senior Volunteer Program would get none.

Specifically, Main Street would receive $52,000 to support the director’s salary so that she can focusing on promotions, events and tourism; NDC and NHDC would receive $40,000 to expand economic development and housing opportunities, respectively; and $35,251 for HIRTA and $15,760 for the Des Moines Airport.

It is important to note the Newton City Council pledged by resolution in 2022 to provide the airport a total of $78,000 over five years.

For the past month or so, council members and city staff have discussed the future of partner funding, which is select moneys that go toward local groups that better the community. In FY25, the City of Newton distributed a total of $279,011 to nine different partner agencies. The mayor’s proposal for FY26 is $183,011.

The city’s finance team is projecting that significant spending cuts will be needed in the coming years. Property tax reform laws from the Iowa Legislature are requiring local governments to adjust their levies, which will result in potential savings for taxpayers but at the cost of diminished city services.

In an effort to reduce city spending and maintain services, staff and council have looked to relinquish partner funding. But many officials see the value in partner funding. George said if the city makes good financial decisions now it’s going to be better for the local government in the long run during budget season.

While city staff removed funding to groups like Main Street, NDC and NHDC in its initial proposal, it was recommended the council start a conversation about funding partners and then come to a decision by early January 2025. It was even recommended council submit their own funding proposals for each partner.

It was a suggestion council member Stacy Simbro would later uphold and encourage among his fellow elected officials.

“I think we need to look at which one of these align with where we need to be in the next couple of years, which ones are the most important, how do they align with our comprehensive plan,” Simbro said. “Look at the resources these organizations have, how much are we really a contributing factor to that.”

George defended her decision to fund organizations like NHDC since it works to provide a needed commodity for the city. If Newton wants any hope of growing, it needs housing. She also said Newton Main Street is recognized by both its state and national groups as an example for other communities to follow.

“I am going to be meeting with the city staff and with the Chamber (of Commerce) and Main Street next year to talk about how can we promote different tourism,” George said. “We’ve got some great races. I was in conversation this morning with the Iowa Speedway about more ways to engage those people.”

Access to Main Street resources is also beneficial to the city. George said NDC is important for business retention and expansion, and it has made progress in securing the sale of the final lots in the Industrial Park and developing a future vision for the Newton Rail Park alongside key investors.

Furthermore, NDC has reduced its staff to only one full-time professional instead of two, and it has been able to collaborate with a number of other groups.

George noted property tax relief is expected to be a key issue for the Iowa Legislature as it enters its next session. The mayor said property tax relief is important for individuals who are strapped or on fixed incomes. As a result, George suggested cities will have to focus on providing essential core services.

Which also means cities may be discouraged from spending money on charitable organizations. The practice is already not favorable to state auditors.

“I feel bad. It’s hard to do that,” George said. “But if we asked the YMCA Board, ‘How important is it that you have public safety?’ If we continue to fund you, we’re going to have to cut fire and police or we’re not going to be able to make the repairs on Eighth Avenue.”

Historically, council member Randy Ervin has embraced the idea of funding partner agencies, and he remained vigilant in his views. Ervin disagreed with a lot of what George argued, and he said his expectations for partner funding have been sent to both the mayor and to the city administrator.

“I think they should be an extension to our city staff,” Ervin said. “I don’t think we anticipate our police department or our library or any other function for the city, we don’t expect them to go year-to-year for their budgets. Why do we expect our partners to go year-to-year?”

Ervin said the city council should commit a one-, two- or three-year commitment for all the groups. He went on to say the city does not have staff available to do the services these agencies provide for Newton. While 2029 is will be a budget challenge, Ervin said groups need to know what to expect from the city.

“There are a lot of things in the next three to five years that are going to affect Newton — and it’s going to affect our taxes obviously,” Ervin said. “But I think, for us, we had the same discussion last year … We just need to make up our minds as a city if we want to invest in the future or continue to cut everything we can.”

Ervin stressed his point further.

“We cannot cut our partner agencies,” he said. “…I fully think the City of Newton has got to grow, and we can’t cut everything we have.”