Questa Economic Development Fund bolsters village coffers

Posted: Monday, January 16, 2012 12:00 am | Updated: 9:46 am, Fri Jan 13, 2012.

Matthew van Buren

Members of the Questa Economic Development Fund’s board of trustees see Centinel Bank’s recent donation of a building at the center of town as a momentous step toward creating economic opportunities in the village.

However, Fund records show, up to this point, substantial sums have gone toward subsidizing the village of Questa’s budget.

Chevron Mining created the Fund in fall 2008 under then-mayor Malaquías Rael. According to a September 2008 letter to Rael from Questa mine manager Roy Torres, the Fund’s creation represented a “unique” and “historic” venture “to help the village prepare for its economic well-being far beyond the likely life span of the (molybdenum) mine.” In order for Questa to become sustainable for the long term, the letter states, it must diversify its business base, attract additional industry and enhance existing small businesses.

Chevron Mining proposed to create the Questa Economic Development Fund, a nonprofit entity, to “provide the seed money necessary to create and maintain jobs and enhance the capacity of the village to expand its economic base.”

The company proposed financing the organization at a level of $320,000 per funding cycle for eight cycles, providing $200,000 to the fund and $120,000 to an endowment, as well as a one-time $1 million contribution if the Fund remains active for eight cycles.

Records show the Fund contributed about $480,000 to the endowment account after Chevron Mining made its first four contributions.

According to one of the Fund’s founding documents, when considering payments to qualified charitable recipients, the board is to focus on “general economic development” in the village, attracting new businesses and jobs to the village, increasing tourism opportunities, improving village facilities to attract economic development and supporting projects and initiatives within the village “that have a significant, direct impact on the community of Questa.”

‘Cyclical nature of mining’

“The creation of this Fund, combined with the resources previously provided to the village at the end of 2007, will take the place of any other future payments from (Chevron Mining) to the village,” Torres’ letter states. “It is (Chevron Mining’s) hope that by working cooperatively with established capacity-building organizations — such as the Taos Community Foundation and the McCune Charitable Trust — that the Questa Economic Development Fund and the village will be able to leverage additional matching Funding for the Fund and Endowment.”

Rael said, considering the “cyclical nature of mining,” hiccups in the economy can have a “devastating effect” on a community like Questa, where more than 200 people were laid off in early 2009. He said previous donations, begun under Molycorp, went directly to the village — but that Chevron Mining “didn’t feel comfortable with that.”

He said the company wanted to move away from writing checks directly to the village, as it did not want to Fund the hiring of more village personnel.

“They didn’t think that was the best use of the money,” Rael said.

So, Rael said, the village came together with Chevron Mining to propose the Questa Economic Development Fund, partly to put some distance between the Chevron Funding and village coffers.

From the Fund’s creation in 2008, it was tied closely to village government.

Then-mayor Malaquías Rael, then-councilor Robert Ortega Jr. and village counsel Marcus Rael Jr. were named to the Fund board for five-year terms; Questa residents Owen López and Gordon Robinson were appointed to the board for three-year terms.

Questa Mine public affairs manager Margaret Lejuste said, though the Fund was created before she started in her current position, it is her understanding that a number of different requests were coming to the mine from the village. She said the mine has a social responsibility to the community of Questa — particularly to ensure it is not totally dependent on the mine — and the creation of the Fund was a way to put more decision-making ability in the village’s hands.

Fund documents

The Questa Economic Development Fund board voted last year to open Fund-held documents, including minutes, expenditures and tax filings, to The Taos News. The records show more than $500,000 in contributions to the village of Questa since the Fund’s formation.

According to information released by the Fund, its largest single expenditure (other than contributions to the endowment) was made to the village of Questa: A check for $185,600.21 was written to the village Jan. 23, 2009. Fund documents describe the contribution as a “reimbursement.”

Though Fund Executive Director Bobby Ortega was not with the nonprofit at the time, he said its board had approved that amount of village expenditures prior to receiving Chevron Mining’s initial contribution.

Further details about that expenditure were not made available to The Taos News by the Fund or village by press time. Though a formal records request was made to the village a month ago, and the Inspection of Public Records Act gives public bodies only 15 days to respond to most requests, an ongoing mold problem has forced the temporary relocation of the Questa administrative offices and has complicated record retrieval.

Other contributions to the village of Questa include: $75,687 to be used to match three road projects administered by the state Transportation Department (DOT) and $18,938 to be used as a match to update the layout plan and install equipment, such as a weather system and lighting, at the Questa airport. According to records provided by the village and Fund, related work includes a $50,393, or 25-percent, village match to design and perform improvements to South Kiowa Road.

Minutes show Fund board members began to question such expenditures. According to minutes from the Dec. 21, 2010, meeting of the board, during discussion about using $11,006 to match a DOT grant of $33,017 for work on Cisneros Road, “The Fund board raised questions on this request related to whether this was the best use of Fund monies and what is the economic development benefit.”

“It was mentioned by board members that these types of requests may not be eligible for Funding in the future,” the minutes state.

Malaquías Rael said, though getting roads projects “shovel ready” with initial investments improves the village’s chances of getting legislative Funding, members of the board had hoped the village would begin projects to help improve local businesses in more direct ways.

“That’s why there was a little bit of dissent or concern,” he said.

‘Lobbying and grant services’

Fund records show $126,545 was given to the village for “lobbying and grant services.” Rael said considering the size of the village, its elected officials can’t spend 40-60 days in Santa Fe when the Legislature is in session.

“It’s a competition, really,” he said. “Small communities just don’t have the big guns.”

He said lobbyist Gabe Cisneros’ efforts on behalf of the village have paid off, bringing in money for the wastewater treatment plant, water lines and other infrastructure.

Mayor Esther García also said Cisneros has been “instrumental” in bringing legislative funding to the village.

“They help us pay his salary,” she said of the Fund. “Otherwise the village wouldn’t be able to afford it.”

Fund records also show regular payments into the village of Questa’s “Rapid Action Fund.” Since June 2009, records show, the Fund has contributed nearly $95,000 to the Rapid Action Fund.

García said the Rapid Action Fund is typically used for professional development for village staff, including sending employees to trainings and events such as Municipal League conferences. Rael said the Rapid Action Fund may also be used on lobbying efforts in Washington, D.C.

“That’s what we used it for in the past when I was mayor,” he said.

Rapid Action Fund

Village records show the Rapid Action Fund has been used for travel expenses, such as conference registrations, fuel, baggage fees, meals and hotel rooms, when staff members and village officials have gone to conferences hosted by the New Mexico Municipal League and National League of Cities.

The Rapid Action Fund has also been used to buy office supplies, consulting services and legal advertisements with The Taos News, and money from the Rapid Action Fund was used when the village hosted the dedication of the 6-mile-long Vistas de Questa trail in the summer of 2010 — an activity García was quick to point out is good for the economic growth of the village.

The village also makes requests to the Economic Development Fund for specific projects. Recent village requests to the Fund board have also included:

• A request for funding to hire an architect to plan, design and potentially construct a multi-purpose center that could be used for “business, education, religious and special events”

• A request for funding to hire an architect to plan, design and potentially construct an addition to the library

• A request for funding to hire a firm to construct a village website, where “the community, businesses (and) eco-tourism” could be promoted

The Economic Development Fund does not focus exclusively on the village, however. In 2009, it donated $15,000 to the now-inactive Questa Vecindad Chamber of Commerce. According to a request from the Chamber, “Questa cannot sustain itself on local dollars,” and efforts must be made to attract visitors and business patrons.

The Fund also pays Bobby Ortega $12,000 per year to serve as its executive director and has contributed $2,750 to the Fiesta Council. It has also spent about $13,700 on financial services, including preparing tax filings, from Clifton Gunderson (formerly Meyners and Company).

New priority

Rael said reviving the village center is a major new priority for the Fund; he said improving that area could help the entire community move forward. The revitalization of the area was also stressed in an economic development study prepared for the village.

It was suggested that implementing a “keystone” project at the village center, such as developing a visitor center and chamber of commerce, would lead to “community-wide reinvestment” and increased exposure for local businesses.

“Initial investment in a specific, highly visible project such as building a visitor center (where the Chamber of Commerce can also be housed) often has the effect of stimulating private reinvestment and redevelopment efforts in the surrounding area,” the study states. “The creation of a visitor center would be the initial part of a broader plan to redevelop the village center district.”

The study also suggested investing in housing, workforce development, improving health and social services, beautification projects, industrial development and promoting recreation and outdoor activities.

Rael said it is important that the community buy into the economic development activities being conducted by the village and Fund. Ortega said the Fund board plans to meet next Jan. 31 at 3:30 p.m. at the new building; the board intends to discuss the property’s future use.

The Fund has not yet established a website or phone line, though Ortega said it intends to do that. He said the best way for those curious about the Fund to find out more is to contact the village administrative offices at (575) 586-0694.

He and García have emphasized opportunities that will be available when cleanup work begins on the mine and tailings sites, which were recently placed on the National Priorities List of SuperFund sites. Rael said collaboration with the public schools in Questa will be important — and not only so students can be involved in the cleanup, but to improve their skills in other industries.

García also said the community needs to come together to make Questa’s economy sustainable into the future, adding that it is important that residents think not only beyond the mine but beyond the cleanup work.

“One of these days, they might not be there,” she said of the mine.

For more about the village of Questa’s economic ties to the molybdenum mine, read The Taos News Jan. 19.

The Company We Keep