‘Zombie that couldn’t be killed.’ Pasco votes on long-troubled downtown group

The Pasco City Council voted unanimously Monday night to dissolve a troubled taxpayer-funded group intended to lead downtown revitalization but had fallen into repeated controversies in recent years.

“I think it’s unfortunate that it’s come to this,” Councilman Peter Harpster said at the meeting. “I think staff, council and those who were involved in 2010 had nothing but the best intentions in mind. One of the goals in the beginning was to improve downtown, and I think we would all agree that since 2010 it has improved.”

The vote marks an end to months of sobering discussion about the Downtown Pasco Development Authority’s bleak future.

The city — which created the group but did not oversee its operations — tried to keep the agency afloat with cash infusions and appointed board members, but a series of troubles and a leadership vacuum ultimately doomed the quasi-governmental organization.

In June, the DPDA’s most recent executive director — its third in three years — resigned during a pivotal moment for the agency.

The events and programs it managed — including the Fiery Foods Festival, Cinco de Mayo, Pasco Farmers Market and Pasco Specialty Kitchen — were eventually handed over to the city.

Then, in February, a damning accountability report from the Washington State Auditor’s Office detailed dubious accounting practices, missing cash, illegal public meetings and broad government failures over three years.

The state ultimately determined the group could not account for nearly $300,000 between January 2020 and December 2022. No explicit details of fraud or criminal malfeasance on the part of the organization were included in the audit.

It was the final nail in the coffin. And many saw Monday night’s vote as closure to years of unwarranted turbulence.

“To say that this was a long time coming is an understatement,” Councilman Leo Perales said in a statement. “DPDA was that zombie that couldn’t be killed and I, for one, am glad it’s gone.”

But city leaders aren’t closing the door fully on public development authorities or the possibility that another nonprofit organization could continue the city’s Main Street program.

A few council members on Monday suggested they’d be open to future discussions after the dust settles and the public’s trust is restored.

“Once all the air is cleared, and the forensic investigation is finished and this is wound down, we’ll then have the ability to figure out how to right size it,” Mayor Pete Serrano told the Tri-City Herald.

New lawsuit

Just last week, a civil complaint was filed in Franklin County Superior Court accusing six former DPDA board members and an executive director of violating Washington’s Open Public Meetings Act by holding secret meetings and taking action at unlawfully held meetings.

Several Pasco city officials told the Herald that the organization’s dissolution, which goes into effect Friday, April 26, does not stop the legal challenge.

The rights of staff and board members to seek legal indemnification from the DPDA also was likely severed after the group became defunct. The city can’t defend the board members in court, either.

“If we thought there was a legal umbrella that would have covered board members without significant risk to the city, we would have done that,” Serrano said.

Olympia-based government watchdog Arthur West is seeking $500 for each known violation of the state’s meetings law. Former Executive Director Jerry Martinez, as well as board members Gabriel Portugal, Kylie Grimes, Claudia Tapia, Alexia Estrada, Jose Iniquez and Christina Viera, are named in the suit.

Separate from the DPDA’s legal woes, the city recently hired a forensic accounting firm to scrutinize the organization’s operations in 2022 in order to confirm the state’s audit, with the possibility of broadening the scope to include other years.

Calls to table DPDA dissolution

At a short public hearing before Monday’s vote, two community leaders historically at odds chimed in on the issue.

Carl Holder, a downtown property owner and supporter of the DPDA’s work, asked the city to hold off dissolving the group, calling it a “very bad look” for the city at a time when the facts on what happened are still coming to light.

“Will the city pay the attorneys fees for the board members? Don’t throw those volunteer board members under the bus. The existence of DPDA is the corporate veil that the city must have at this time for this civil action,” Holder said.

He argued the DPDA is an important city investment and offers great economic advantages, including the ability to apply for grants and allow financial supporters to receive a 75% credit against applicable B&O taxes.

“Don’t throw these advantages away,” Holder said. “With the new (Lewis Street) bridge and the downtown Pasco development plan, it would be prudent to maintain DPDA to participate in the future of downtown Pasco. Once dissolved, it’ll be gone forever and that would be very sad indeed.”

David Cortinas, publisher of La Voz newspaper and president of the Tri-Cities Latin Business Association, said the DPDA has been corrupt for “many, many years” and asked why city leadership didn’t step in sooner.

“Nobody intervened with these things,” he said.

He referred to several failed audits of the group and the discovery in 2015 that its executive director, Michael Goins, had embezzled more than $140,000. Goins went to prison for the crime.

Cortinas also believes there is a lot more money that’s gone unaccounted for throughout the lifetime of the authority than is currently being reported by the city or state auditors.