Mayor presents FY26 GPET nonprofit funding recommendations; council divided over cuts and legality

Mayor and staff presented recommended allocations for the city's FY26 GPET (1% sales-and-use tax) nonprofit service agreements and said they intend to place the mayor's recommendations on next week's consent agenda for formal action.

"We had 19 nonprofit organizations apply for city funding through service agreements this year," said Mister Mayer, a staff member presenting the process and eligibility criteria. Mayer told the council that all 19 applicants met the three-part legal standard staff uses: the service must be legal in Wyoming, nondiscriminatory to the clientele served, and the governing body must give due consideration.

The city projected no growth in sales-and-use tax revenue and displayed an estimated GPET total of $4,881,471. Requests from all applicants totaled about $704,500, or roughly 14.4% of projected GPET revenue. The mayor said his recommendations brought the total recommended allocation to about $509,500, or approximately 10.44% of projected revenues, close to the historical nonprofit share the city has targeted (about 10% over the last four years).

Council discussion touched on several themes. Councilman Harrison said borrowing to cover core services this year made him uncomfortable funding nonprofits at prior levels: "I think it sends a very bad message to the people of Sheridan that we are borrowing money on one side and giving away taxpayer money on the other side," he said. Other council members argued nonprofits supply essential services the city does not provide directly and that funding those groups provides value to residents.

Several council members questioned whether certain requests fit the statutory limit for GPET-funded service agreements. During discussion, Wyoming statute 15-1-103 paragraph 45 was cited; that statute was discussed in the context of whether funding must be for "human services" and whether animal-welfare requests such as Second Chance Cat Rescue qualify. Staff said earlier legal opinions had found the city's approach constitutionally defensible if the governing body determines the expenditure returns public value, but council members acknowledged legal interpretations vary.

Mayer walked through the mayor's line-item recommendations. Examples discussed during the study session included: keeping Compass Center for Families at its requested $30,000; recommending $35,000 for Sheridan Community Land Trust (with council questions about proposed use for salaries versus direct trail maintenance); recommending a reduced amount for Second Chance Cat Rescue (mayor recommended $25,000 of $60,000 requested) with several council members urging support for its spay/neuter program rather than broader operations; and recommending a reduced allocation for Volunteers of America after staff review of its financials.

Mayer said staff would try to reflect council discussion when placing items on the consent agenda and that any council member may pull items off consent for separate discussion. No formal votes were taken during the study session; the mayor said the recommendations would be brought forward next week for formal council action.