Deadwood commission needs to restore grants to other communities, S.D. history board says

Capitol News Bureau
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PIERRE, S.D. (KELO) — The decision by Deadwood city officials last year to further reduce their grants for projects in other South Dakota communities should start to be reversed if possible, the State Historical Society trustees said Friday.

The trustees, after a presentation and discussion that ran more than 90 minutes, endorsed the $5.8 million budget proposed for the city’s historic preservation program. That is a $1.1 million reduction from past years, Deadwood historic preservation officer Kevin Kuchenbecker said.

But the state trustees as part of their decision want Deadwood officials to restore up to $50,000 of grants for historical projects outside Deadwood if the historical preservation program’s share of gambling fees and taxes comes in higher than budgeted.

The Deadwood City Commission funds the historic preservation program from gambling taxes, license fees and city-owned slot machines. Casinos in the city closed at 5 p.m. March 25 because of the COVID-19 pandemic. They began reopening May 7.

The state Commission on Gaming agreed in June, because of the pandemic’s financial effects on casinos, to allow unlicensed devices to remain on the casinos’ floors through December 31, provided that the slots and other devices couldn’t be played.

As of July 1, there were 2,416 licensed slot machines and other gambling devices in Deadwood casinos. Another 402 hadn’t been re-licensed. For comparison, there were 3,090 licensed in 2018 and 3,664 in 2008.

On Friday, State Historic Society trustee Tom Hurlbert of Sioux Falls called for the $50,000 condition to be added onto the endorsement motion that trustee David Wolff of Spearfish made. Otherwise, he said, “This money is going to be difficult to get back, because it is going to get reallocated.” Wolff agreed: “I approve it. I think it makes sense.”

Trustee John Fowler of Elk Point wanted it to be harder and make Deadwood officials come up with $100,000 for outside-Deadwood grants however they could.

“Where you get it is up to you” Fowler, speaking by phone, told Kuchenbecker, as well as the two city commissioners, and two Deadwood historic commissioners, who had made the trip Friday to Pierre. Said Fowler, “You can use your imagination to figure out how to get more money.” 

Last September, Deadwood officials — without Kuchenbecker along — told the state trustees they were cutting the Deadwood grants program to $50,000 from $100,000. The grants, which Deadwood voluntarily started in 2001, had been $250,000 annually until a few years ago.

The outside-Deadwood grants are separate from the $100,000 per year that state law requires the State Historical Society receive.

Earlier in the presentation, Kuchenbecker spoke of the cut to $50,000 that Deadwood officials decided to make last year. “I know that’s a hard pill to swallow,” he said.

Kuchenbecker said the hope was to get the funding back “eventually” to $100,000. “Will we ever see it $250,000 again?” He said no. There’s a waiting list of structures in Deadwood whose owners applied for preservation funds for reconstruction of retaining walls, he said. “Can we do it ($100,000) this year? I don’t see it. We’d have to cut something.”

Kuchenbecker then renewed the call he’s made for several years for Deadwood’s normal $6.9 million of historic preservation funding to start receiving an inflationary increase. He presented a chart that showed Deadwood could have been receiving another $2 million per year for historic preservation with the inflation factor.

The city commission in April, because of the pandemic, put a moratorium on forgivable local preservation loans and grants.

Fowler gave no ground, saying the $50,000 cut was less than 1% of the Deadwood preservation budget. “There’s 800,000 people elsewhere in the state that should get some of the benefit,” he said, adding that the trustees’ discontent about the cut had been “ignored” for the past year.

“I’m quite concerned this is showing disrespect for the (state) board’s views,” Fowler continued. “I personally consider this somewhat of a challenge to the board.”

Kuchenbecker responded that the outside-Deadwood grants were “a gift to the state in many ways” and didn’t know if the Deadwood program would get enough to reach its $5.8 million budget. He said he understood the state board’s concern but he would need to have his proposed budget changed by the local preservation commission and then by the city commission.

Municipal governments operate on a January-December budget year in South Dakota, while state government runs on a July-June budget year.  “It would be challenging,” Kuchenbecker said. “They would listen but I don’t know that timing would allow it.”

Kuchenbecker added, “Going into next year, we’re in uncertain historical times here.” He said the April shutdown wasn’t predicted. “We were closed,” he said. “We still don’t know what next year is going to look like.”

The state board’s chairman, Brad Tennant of Aberdeen, seconded Hurlbert’s motion for the second $50,000 to be Deadwood’s first priority if more than $5.8 million becomes available. After that was added, the trustees voted 8-2 to give their qualified endorsement. Said Tennant, “I regret we have concerns year after year after year.” 

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