Redistribution of Google payment raises controversy

At issue was the proposal to change the distribution formula for $250,000 in funds from Google’s tax abatement agreement of 2005 that extend over a 15-year period. Under the current plan decided upon by the city and county, the share of funding for the college was cut from $100,000 per year to $75,000. After a two year period of reduced capital, the college might be dropped from the program altogether.

Because the “Q-Life” network in The Dalles no longer needs $50,000 in funding authorized under the agreement, that money plus the funds taken from the college’s share and $18,000 in reserve from prior years were divided between the city and county.

The city gains $30,000 to cover some of the wages for Dan Durow, the economic development specialist, and $25,000 for The Dalles Main Street program.

The county’s contract with Mid-Columbia Economic Development District was given $35,000 and the Veterans Service Office $41,000. The county will also get $45,000 to put toward retiring the Columbia Gorge Discovery Center debt, of which they are the guarantor. Another $17,000 was allotted for redevelopment of the old armory site at the corner of Sixth and Webber streets once the new National Guard training center opens on the college campus, which is scheduled to take place this fall.

Mayor Steve Lawrence told Nichols and other audience members at the May 13 meeting that the redistribution of funds had taken place following two negotiation sessions in April that involved four officials. He and Nolan Young, city manager, were present, as were Wasco County Commission Chair Rod Runyon and Tyler Stone, county administrator.

Lawrence said the agreement with Google granted the city and county, as sponsors of the Enterprise Zone that gave Google start-up tax breaks, the authority to amend the original funding formula. He said that had not been done in seven years and both governments believed it was time to take a look at whether the monies were being used to meet current needs.

He said Dr. Frank Toda, president of the college, had presented information in writing and in person at the second April meeting but had failed to sway the decision.

“My understanding is that it (funding) was always premised on, just as Dr. Toda said, developing an Informational Technologies program, which wasn’t done,” said the mayor. “So now we’re looking at maybe something happening in the future, but there was a whole series of steps that didn’t result in the original intent.”

Robb Van Cleave, chief talent and strategy officer for the college, challenged that statement. Speaking as a resident of the city, he said more than $100,000 had been invested each year in renewable energy programs and in supporting STEM (Science Technology Engineering and Math) activities in area schools. He said these educational models might not be called Informational Technologies, the name referred to in the agreement, but were developed in cooperation with Google, Insitu and other local high-tech companies

“How do you define a program where they did all the pieces for seven years?” he asked. “Who in the room is qualified to say the college did not do what it was supposed to do?”

Councilor Dan Spatz recused himself from being involved in the decision-making process to avoid a conflict of interest situation because he is the development director for the college. He also spoke as a citizen and said the college had failed to gain student interest in Informational Technologies classes, so had adapted its educational programs to areas of similar interest.

He said the college was not brought into the loop on the change in funding distribution until its budget for the upcoming fiscal year had already been decided upon. He said no mention of the potential loss of revenue to the institution was mentioned at a spring meeting of the Community Outreach Team, which relied upon communication and trust between agencies to effect positive change.

“I believe it is important to express my personal concern about the process leading up to this redistribution since it speaks to transparency in government and longstanding bonds of trust among local governments,” he said.

Spatz said the aggregate loss of money to the college over the 15-year term of the agreement would be about $700,000. He said the renewable energy and technology program had graduated more than 200 students and the nursing program more than 180, putting money from those employed back into the community. In addition, he said the college awarded more than $6 million annually in student aid, making it a strong partner in economic development.

“All that notwithstanding, it seems private discussions among a few individuals over the past several months reached the conclusion that CGCC has failed to live up to its commitment under the Enterprise Zone agreement,” he said. “At no time was the college itself asked to justify use of these revenues except for last month near the close of the college’s budgeting approval process.

He said while Wasco County was in “dire” financial shape, it was “unconscionable” that college officials and the public were not brought into the discussion of redistributing Google funds until the change had already been decided upon.

“I know we can do better and rebuild the bridges that have served us so well,” said Spatz.

Dan Ericksen had been serving as county judge at the time the agreement with Google was finalized. He said the intent of the funding distribution had been to develop close ties between the city, county, college and Google to further development of programs that would meet workforce needs.

“The question might not be what the college is going to do with the $75,000, but where it’s going to get the $25,000 that’s now missing from its budget,” he said. “The county is hurting and if I was the county chair I’d be looking for additional revenue also, but I think I would have wanted to be more inclusive in the discussion of funds I was going to cut with the entity that I was going to be taking them from.”

Lawrence suggested that because the college had finished paying off one of its bonds, it was in good financial shape to seek other funding sources. Ericksen reminded the mayor that bonds were paid by taxpayers so retiring the debt did not result in any additional revenue for the college.

“Well, it kind of puts them in a position of looking for more money,” said Lawrence.

He said the college had been given two years with three-fourths of the funding to make a financial shift away from that revenue source. He also said the agreement allowed a review of the disbursement each year so the college might be given consideration in the future as new programs were developed.

“I’m hoping this gets approved,” he said. “It allows for some pretty significant programs to be funded every year.”

Young said the distribution of funds had been included in the council packet, which was posted online, and media representatives had been notified as well. He said a recent budget committee meeting and the May 13 council meeting provided an opportunity to members of the community to provide comment on the distribution of funds, fulfilling the city’s obligation to a public process.

Councilors Carolyn Wood and Bill Dick joined Linda Miller in voting for the redistribution of funds. Wood and Dick said the city needed to review the expenditures in January and consider any proposal brought forward from the college.

Councilor Tim McGlothlin voted against the change in funding because of the timing of the decision. He said consideration of a redistribution of monies should have taken place in January, as anticipated in the agreement.