Pasco considers dissolving troubled group. What it means for events like Cinco de Mayo
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Unwinding the Downtown Pasco Development Authority
The City of Pasco gears up to dissolve the flawed Downtown Pasco Development Authority after a decade of spotty audits, dubious accounting practices and some illegal activity.
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Pasco city staff are recommending the city council dissolve an organization that has seen years of mismanagement, lack of oversight and poor accounting practices.
The guidance comes days after the Washington state auditor released a damning report detailing dubious cash withdrawals, unaccounted for equipment, unannounced meetings, illegal votes and more.
The Downtown Pasco Development Authority (DPDA) organized the city’s Cinco de Mayo festivities, Fiery Foods Festival, the seasonal Farmers Market and the Pasco Specialty Kitchen.
But the nonprofit has essentially ceased all operations and meetings since its executive director, Jerry Martinez, resigned last year and the city took over a number of its programs. Many previous board members have since stepped aside.
Now, the city council will decide what next to do with the organization at its 7 p.m. workshop session Monday, Feb. 12. A formal vote on the matter is likely next month.
City Manager Adam Lincoln said all programs and events should be folded into city operations if the dissolution is approved, and city staff will continue to operate the events in collaboration with others in the Pasco community.
“I’m put at ease knowing we’re running a real tight ship as far as running the happenings of downtown,” Lincoln told the Tri-City Herald on Monday morning.
The state’s financial audit released this month appears to be the final nail in DPDA’s coffin. It brought to light the severity of the organization’s practices between January 2020 and December 2022.
The report does not identify individuals but notes the DPDA had three executive directors during the three years covered by the audit.
The state said it could not account for nearly $300,000 in expenditures by DPDA.
The time period includes the catastrophic bungling of the 2022 Cinco de Mayo festival, which saw the organization spend $250,000 on an event budgeted at $30,000. DPDA booked a five-figure loss blamed on a lack of clear financial and managerial oversight.
Among the missteps: DPDA spent $42,000 to re-book performers for the event after erroneously canceling their appearances.
The audit also described broad failures in how DPDA managed the money it takes from the city, grants, events and other programs in hopes of stimulating downtown business.
The audit also exposed:
- Weaknesses in how DPDA handled $630,000 in private grants it received to support people and families affected by the COVID-19 pandemic.
- Meeting violations by the nonprofit’s seven-member board, who reportedly routinely violated the Washington Public Meetings Act and voted on DPDA business in secret meetings.
- Unaccounted for payments totaling $300,000, including $1,000 in “unallowable” payments and nearly $8,900 for assets that couldn’t be tracked.
- An unnamed executive director also used electronic payments and a debit card to spend more than $285,000, which included $80,000 paid to 14 people outside of the U.S. and two outside of the state.
Before the audit’s release and the organization’s most recent executive director departing, city council and staff expressed a willingness to fix the broken organization. The city was optimistic it could fix the flagging nonprofit.
The city is a major financial supporter of the organization. The city council voted in 2022 to raise its 2023 contribution to $120,000 with an extra $60,000 available in both the third and fourth quarters, depending on if certain targets were met.
The organization never met those additional incentives, so that extra $120,000 was given the group.
The city also paid a consultant $50,000 last year to review the DPDA’s organizational structure and evaluate the goals and its future direction.
But that taxpayer-funded work to reorganize DPDA ultimately stopped after Martinez’s departure, and little has been done since.
Herald reporter Wendy Culverwell contributed to this report.
This story was originally published February 12, 2024 at 12:57 PM.
