‘Broken’ Cinco de Mayo group vows to rebound after squandering $42k and calls to defund them
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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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By many accounts, the 2022 Cinco de Mayo Festival was a major success.
It drove more than 15,000 to downtown Pasco over a week’s worth of events centered on Mexican and Hispanic food, music, culture and heritage.
But behind the scenes, in the days and weeks leading up to the event, the planning was disorganized and plagued with a lack of communication, according to a report from the Downtown Pasco Development Authority (DPDA) — the nonprofit that oversees the event.
A lack of clear financial and managerial oversight resulted in the event being a total financial dud.
The fallout played a major role in the departure of its interim executive director and the elimination of five positions at the DPDA after some restructuring.
Two Pasco city council members said the DPDA is fundamentally “broken.”
Another characterized the planning as a “sh*t show” and said it was “disheartening” that this level of oversight could happen.
Recently, when it came time to renew the city’s contribution to the nonprofit, Councilman Pete Serrrano suggested he’d be in favor of defunding them altogether.
The Cindo de Mayo event was originally budgeted to cost $30,000 but spending quickly ballooned to more than $250,000.
And when several bands were erroneously canceled because of what’s being called a communication snafu, it cost the group more than $42,000 to rebook the acts to perform.
The event was ultimately a net loss, draining more than $83,000 from the nonprofit and leaving it $12,000 in the red by the end of this year.
Pasco City Council split
Despite the missteps, the city of Pasco agreed in a 5-2 vote last week to continue to financially back the organization in 2023, but also included some accountability measures to make sure the board is meeting certain goals and staying financially stable.
Pasco raised its annual contribution to the nonprofit from $100,000 this year to $120,000 with the possibility of an extra $60,000 available in both the third and fourth quarters next year.
In exchange, the Downtown Pasco Development Authority’s executive director will give monthly progress reports to Pasco on how the organization is improving on its mission to drive dollars to downtown businesses.
“I believe the DPDA is important — not just a little bit important, but a lot important,” said Mayor Pro-Tem Craig Maloney. “When you look at the downtown master plan, there’s no question that the DPDA is a key element to the success of that plan, so I’m unwilling to support letting this organization lapse or barely limp on.”
The city also wants to repurpose the DPDA.
Pasco is paying a consultant $50,000 next year to review its organizational structure and evaluate the goals and future direction of the nonprofit. This had been a priority of the city council’s since before the Cinco de Mayo debacle.
The city benefits from investing in a downtown development association because it can recoup about $160,000 of its $240,000 commitment next year through a public utilities tax credit.
Maloney said the city’s plan to revitalize downtown Pasco would ultimately take longer if they defunded the group.
“I really want to try and stick it out,” new Executive Director Jerry Martinez told the Tri-City Herald before the vote. “When I came in I was not set up for success at all. I want to make sure that when I leave, whenever time that is, I’m setting up the next person for success.”
He started his job June 16. His predecessor, Oscar Martinez, was fired Sept. 2 as part of the DPDA’s restructuring effort.
Oscar Martinez declined to talk with the Herald last week about the troubles with the Cinco de Mayo event.
Downtown association report
The Downtown Pasco Development Authority is an independent public development authority — a 501c3 nonprofit — with a mission to support economic revitalization around the downtown area, mostly by hosting events.
It’s been around for about a decade now.
The nonprofit’s revenue mostly comes from grants ($274,000), contributions from the city ($100,000) and from programs, sponsorships and events ($272,000).
DPDA organizes several events throughout the year, including the Pasco Farmers Market, the Fiery Foods Festival in the fall and it also manages the Pasco Specialty Kitchen.
After the Cinco de Mayo event troubles, board members Kylie Grimes and Thomas Granbois drafted a report on what went wrong after allegations were made by David Cortinas, director of the Latin Business Association of Tri-Cities (LBA) and published of La Voz newspaper.
“There were definitely missteps that happened, so we wanted as much transparency and clarity as possible,” Granbois told the Herald.
A complaint also was filed with the Pasco Police Department, which confirmed it is continuing to investigate whether there was any financial wrongdoing.
2022 Cinco de Mayo event
Last January, the DPDA formed an informal committee to begin planning the first Cinco de Mayo festival since the onset of the COVID pandemic.
The ad-hoc committee — led by Oscar Martinez and Eric “Chuco” Herrera, an event organizer — reportedly agreed on a budget of $30,000 for the event, according to DPDA’s report.
An email from Mike Gonzalez, Pasco’s community and economic development manager, who sat on the committee, said the funding would come from a grant from the Group Health Foundation.
Oscar Martinez ultimately entered into a “verbal agreement” with Jesse Torres, owner of Yakima-based JT Entertainment, to provide entertainment May 6-8.
After months of asking for the written agreement, the board found out from Oscar Martinez that he was expecting to need about $68,000 for bands, accommodations and staging, and that he had already put down a deposit.
About a month before the event, then-city manager Dave Zabell sent a letter to the DPDA requesting they include Cortinas and the Latin Business Association of Tri-Cities in its events. Zabell said Cortinas had been trying to get involved.
DPDA later reached out to Torres asking if Cortinas could use the stage for his own entertainment acts.
But once Torres found out Cortinas might be involved, and after a sour meeting between the two, he threatened to pull out of the event altogether.
In a letter to the DPDA, Torres said he had previous negative experiences working on events with Cortinas.
“I cannot and will not work with Cortinas because he is not a person I can trust,” Torres wrote in an April 18 letter.
DPDA board Chairman Gabriel Portugal said in an April 15 email that Cortinas and Latin Business Association of Tri-Cities ultimately wouldn’t have a role in this year’s Cinco de Mayo because the request was too late in the planning process.
But Torres ultimately canceled musical acts that were set to perform Sunday in order to accommodate Cortinas’ request.
That led to the DPDA being billed for $42,100 in fees to cancel and rebook the bands, the report says. Granbois said it’s unclear who made the order to cancel the bands, but that it likely happened out of confusion.
DPDA board members didn’t find out from Oscar Martinez that Torres was being paid a total of $88,457 until the week of the event.
“Oscar didn’t feel comfortable talking about Cortinas’ previous interactions with Torres and why Torres didn’t feel comfortable working with him,” Granbois said.
Costly decisions
In addition to the fees paid directly to JT Entertainment, DPDA also paid $45,852 in remaining deposits for entertainers and vendors.
The event brought in about $145,742, mostly in grants and sponsorships. But additional expenses — including to put on the event, promotional and marketing fees, and utilities — put the event at a total cost of $226,000.
At a Nov. 28 city council meeting, Councilman David Milne characterized the planning as a “sh*t show” and said it was “disheartening” that this level of mismanagement could happen.
“A lot of things weren’t documented and I think the contracting was very late,” Jerry Martinez told the Herald. “Even a week up to the event, things were being figured out. I think when you get to two, three weeks, four weeks — things should be solid.”
But they weren’t. Jerry Martinez said volunteers, workers and vendors also experienced a lack of communication about how to set up events.
In the end, current DPDA members say they did put on a good event that included the Cinco de Mayo pageant, a parade, a car show, lucha libre freestyle wrestling, boxing and plenty of music.
“They worked hard and pulled something amazing off, but I think the way I see it is it was such a good event for the community,” Jerry Martinez said.
Maloney and Serrano have both called the structural organization of the DPDA fundamentally “broken.”
Jerry Martinez said he expects there to be another Cinco de Mayo event next year — likely much smaller and more community focused.
“I do think this organization and our downtown does deserve a functional DPDA,” he said.
This story was originally published December 12, 2022 at 12:58 PM.
