Richfield’s prohibited pool of non-profit funding restored

After a scare in September that suggested they would lose an annual source of funding from the city of Richfield, a group of local non-profit organizations can relax.

At that time, it was announced that an audit found that the city of Richfield had been giving out money to various social agencies on an unauthorized basis for the previous 20 years, but an opinion from City Attorney Corrine Heine rejects the finding. City Manager Steve Devich outlined her conclusion in a memo to the city council dated Thursday, Dec. 13.

Ten organizations had become used to the funding, but the audit finding meant they would be missing a cumulative $70,000 next year, although the organizations could have pursued altering the structure of their arrangements with the city to make them legally compliant, Devich noted in September.

Among the groups in question were Bloomington-based Volunteers Enlisted to Assist People, which had received $15,500, and MIRA, an organization serving the Latino community, which received $11,500. VEAP leadership suggested the organization could absorb the hit due to its size as the largest food shelf in Minnesota and was optimistic they could make another arrangement to receive funds from the city.

However, others took the news in September differently. A representative of MIRA said the lack of funding suggested a “dark future.”

“That’s pretty much what supported the agency,” said Rosa Rubio, vice chair of MIRA’s board of directors.

But with the assistance of the city’s finance manager, Heine reviewed the expenditures in question further and found that the disbursements were indeed lawful and that the city could resume the funding.

As outlined in Devich’s memo, Heine opined, “The City Council could reasonably determine that activity benefits the community as a body, and the contract is therefore lawful.”

Other groups that can celebrate the news include Cornerstone, which addresses domestic abuse; Family Partnership, which gives counseling to at-risk youth; and Headway Emotional Health Services.

Devich wrote in his memo that he has directed city staff to establish contracts for service with the organizations in question for 2013, which would reinstitute the funding.