Contact Information

What Johnson Consulting Didn't Tell You About the OC Fairgrounds Master Site Plan Bond Financing Plans

A Master Site Plan proposal for the OC Fairgrounds (also called Orange County Fair and Event Center or OCFEC) created by a team of Johnson Consulting, HPI Architecture, and landscape architects SWA relies upon a $170 million bond issue to fund projects including doubling the size of the Administration Building, moving the Main Entrance about 200 ft closer to the 55 Freeway, demolishing the Equestrian Center, and reviving a parking garage next to a residential neighborhood cancelled in 2015 after loud neighborhood opposition, among other changes. The $170 million bond funding proposal was glossed over in two slides which are deficient in material facts, at the most charitable. As you consider these matters, remember that over a quarter of a million dollars has been paid to the consultants to create this work product in addition to countless hours of staff and Board Directors involved with the Master Site Plan process.

OCFEC was founded in 1949 by a grant of land from the former Santa Ana Army Air Base (SAAAB) for use as a public park, fairground, and recreation. Download the deed and most recent title report  

Since 1949, construction has been financed without going into debt. This has allowed OCFEC to weather economic problems better than other fairgrounds.  For unknown and unclear reasons, Johnson Consulting, HPI Architecture, and SWA propose a high priced set of projects of little real value which could bankrupt OCFEC or force a major change in operations while causing long term and irreversible harm to the surrounding residential neighborhoods. This process cost over a quarter of a million dollars in consultant fees, uncounted staff time, and took over a year to conduct.  More scrutiny is needed of what has transpired before the Master Site Plan process can move ahead. 

The two slides about bond finacing presented by Johnson Consulting, HPI Architecture and SWA follow and can be downloaded here  Download Financials_CHJC-OCFEC-Board-Presentation-April-2018

Balance Sheet Bond Slides_Board-Presentation-April-2018

Phases Bond Slides_Board-Presentation-April-2018

Bond Payments are Missing from the Financial Projections

The phased build out of the Master Site Plan proposal takes more than a decade and relies on $170 million in bond financing. No analysis of the impacts of bond financing or supporting information is presented in the April 2018 proposal. The hard consequences of the massive debt issue are ignored, at the most charitable. Payments for the bonds are missing from the financial projections prepared by the consultants.  Estimated payments on a one time capital infusion of $170 million at 6% is about $15 million per year for 30 years.  Johnson Consulting, HPI Architecture, and SWA slides show project phases being paid for and revenues generated by the phases but do not show the $15 million per year deduction needed to pay for the $170 million in bond debt.  

When asked about this during the April 2018 Board meeting, representatives from Johnson Consulting seemed surprised that this was an issue. 

 

Nearly Half a Billion Dollars Paid Out to Build What Amounts to Parking Lots

Interest more than doubles the $170 million bond to $450 million (30 years X $15 million/year = $450 million). Paying nearly half a billion dollars to build what amounts to a few more parking places is insane. This proposal was a non-starter and should have been shredded instead of being brought forward. 

 

Project Locked In & Cannot Be Changed Under Bond Financing

Bond financing locks in a project once the bonds are underwritten. The underwriting process sets the cash flows which must be obtained to maintain solvency and to meet debt covenants entered into as part of the bond underwriting process. It is difficult if not impossible to change a project once the bonds are sold. A future Board would face a high if not impossible hurdle to changing a project funded by bonds.  Representatives from Johnson Consulting did not mention this during the April 2018 Board meeting and it is not clear if OCFEC Directors understand that bond financing locks in a project. 

 

No Good Choices Come from $170 Million in Bonds: Bankrupt OCFEC or Quadruple Annual Revenues to Pay Debt Service 

Annual payments on the $170 million bond issue are $15 million per year for 30 years at 6%. Each and every year a $15 million check needs to be written to pay off the debt of building what amounts to parking lots. Current OCFEC operations have revenues of around $45 million per year and around 10% in net proceeds in 2017 which is about $4.5 million. How is that going to pencil out? 

Choose to Declare Bankruptcy: Once the $15 million annual debt payment starts, current reserves of about $45 million only last a few years until an over $10 million deficit occurs each year because the $4.5 million in annual net proceeds is not enough to pay the $15 million in debt payment.  At that point, OCFEC faces long term insolvency of their own making. A private company could declare bankruptcy to restructure the debt but it is not clear what happens to a state agency which becomes bankrupt caused by actions of the state agency.

Choose to Quadruple Annual Revenues to Avoid Bankruptcy: Quadrupling annual revenues from $45 million to about $180 million can produce annual net proceeds of $18 million, if everything goes just right. Annual revenues of $180 million pay the annual debt bill due but do not provide enough cash flow to re-build depleted cash reserves. Going to five (5) times annual revenues which is about $225 million per year allows debt to be paid and reserves to be re-built.

Achieving annual revenues of at least $180 million will bring heavy year round use of OCFEC such as that experienced by the residential neighborhoods during the annual OC Fair. Traffic will clog public streets, lights and noise will continue into the night every night of the year and it is unclear if the drive to book events for the sake of booking events will be kicked into hyperdrive to make more money to stay solvent. Who knows what events will be booked to make at least $180 million a year in revenues.

The current buildings may not be enough to bring in $180 million in annual revenues. New buildings may be needed to have more events to make the minimum required $180 million in annual revenue. New buildings will need new debt financing because OCFEC does not have significant reserves at this time because OCFEC is barely keeping up with what they owe. More debt needs more revenue and the debt death spiral of OCFEC becomes obvious. OCFEC destroys College Park, Mesa del Mar, and Vanguard neighborhoods along with themselves with self-created problems arising from their greed.

Johnson Consulting, HPI and SWA did not discuss the financially destructive nature of the proposal brought forward by their firms.  The Public is owed answers from Johnson Consulting, HPI and SWA regarding these matters. 

 

Bond Financing Proposal Shows Why Audits of Fairgrounds Operations are Needed

The April 2018 Master Site Plan should have never seen the light of day and was treated like a homework assignment that had to be handed in to be checked off in a grade book.  Consultants and staff handed in their homework and expected a star sticker in return but were met with well earbed negative responses and hard questions regarding the plans. Over a quarter of a million dollars has been paid to consultants who did not seem to notice that their proposal would offer OCFEC a choice between bankruptcy or destroying OCFEC along with the quality of life in the surrounding neighborhoods. Board Directors who wanted to press forward on the Master Site Plan process without having a workable, buildable plan which is supported by the Public in hand are not serving the interests of the Public who own OCFEC and whom the Directors represent.  

A Board Director who touts her financial credentials did not question the impact of the bond payments on OCFEC solvency and wanted to hurry the process along for the sake of moving things along. A Director such as this is not needed and may find themselves to be happier outside the scrutiny of the Public and with more free time to use as they choose. We thank you for your service and wish you well on your future endeavors. 

 

What Needs to Happen to Regain Public Trust
Work on the Master Site Plan needs to stop.  An audit of the Master Site Plan process is needed to find out where the money went, how two sets of Master Site Plan proposals which were not acceptable to the Public and destroy the nature of  OCFEC were brought forward and who could benefit from these proposal, among other questions to be answered. 

The Voice of OC has joined Director Nick Berardino in calling for a performance auditor to be hired at OCFEC to aid in staff oversight. Empowering a performance auditor is supported. Hiring a performance auditor is money well spent and needs to happen as soon as possible.

  

Contact Information to Follow Up on Issues

Contact the Fair Board 

Chair Barbara Bagneris bbagneris@ocfairboard.com
Vice Chair Robert Ruiz rruiz@ocfairboard.com
Newton Pham npham@ocfairboard.com
Sandra Cervantes scervantes@ocfairboard.com
Stan Tkaczyk stkaczyk@ocfairboard.com
Doug La Belle dlabelle@ocfairboard.com
Gerardo Mouet gmouet@ocfairboard.com
Ashleigh Aitken aaitken@ocfairboard.com
Nick Berardino nberardino@ocfairboard.com

Contact CEO Kathy Kramer kramer@ocfair.com

Contact VP of Operations Ken Karns  kkarns@ocfair.com

Contact the Governor's Appointments Secretary Mona Pasquil Rogers at mona.pasquil@gov.ca.gov to discuss OCFEC Director performance issues. Fair Board Directors are appointed by the Governor and may be removed for cause by the Governor at any time. (Cal. Food & Agriculture Code § 3959-3960.)

Contact Parent State Agency OCFEC is a state agency under the California Department of Food and Agriculture (CDFA)  because OCFEC is a state run county fair created to support California agriculture. Please refer to as OCFEC as the 32nd District Agricultural Association (32nd DAA) when dealing with the state.

CDFA Secretary Karen Ross 916-654-0433 secretary.ross@cdfa.ca.gov

Fairs and Exhibitions (F&E) are under the Marketing Services Division. 

F&E Branch Chief John Quiroz 916-900-5025 john.quiroz@cdfa.ca.gov


OC Fair Board Directors to Start Using Official Email Addresses on April 1, 2018

  GoodJob (1)

OC Fair Board Directors will have new email addresses for the public who own the OC Fairgrounds (Orange County Fair and Event Center) to contact the Directors. This is a move in the right direction to allow Directors appointed by the Governor to hear from their constituents, who are all of Orange County. 

The new email addresses will be posted on this website and prior posts will be updated with the contact information.

Your OC Fair Board Directors are Ashleigh Aitken, Barbara Bagneris, Nick Berardino, Sandra Cervantes, Doug La Belle, Gerardo Mouet, Newton Pham, Robert Ruiz, and Stan Tkaczyk.

 

 


Is the OC Fairgrounds Owned by the State of California? Are They Part of State Government?

Cow Question (2)

Yes and yes. The OC Fairgrounds is owned by the State of California and is formally known as the 32nd District Agricultural Association or 32nd DAA.  

District Agricultural Associations were established to assist in marketing California agricultural products by showcasing livestock, fruits, vegetables, nuts, berries, seeds, hay, straw, other agricultural commodities, and products made from agricultural commodities.  The reason the OC Fair actually exists is to show off local livestock and agricultural products. The Junior Livestock Auction is part of that core reason for being of the OC Fair as are the wine, food, flower, and produce competitions

District Agricultural Associations are part of the California Department of Food and Agriculture (CDFA) in the Executive Branch of government and report to the Governor. Fairs fall under the Marketing Services branch which also manages dairy product production, marketing and pricing; assists in marketing agricultural commodities; and collects agricultural market information and statistics to assist California farmers in growing and selling their commodities. Fairs and Expositions is under Marketing Services and assists State owned and operated fairgrounds in management.


Kill The Bill: AB 2396 Brings the Carnival of Corruption Back to the OC Fairgrounds

Kill AB2396 (1)

Remember back to 2009 when Arnold Schwarzenegger was the Governor and our OC Fairgrounds was put up for sale? Directors of the Fair Board asked for the property to be sold and a majority of Fair Board Directors formed a non-profit corporation, the Orange County Fair and Event Center Foundation, to buy the property from the Fair Board that they were on. This kleptocratic self-dealing scheme surfaced and was called out by the California Attorney General who represented the Fair Board at the time. Due to possible conflicts of interest arising from a majority of Directors being on both sides of the transaction, the Attorney General refused to represent the OC Fairgrounds in late 2009. Nearly 6 years later in 2015, the Attorney General agreed to begin to represent the OC Fairgrounds again.

The Public, who own the OC Fairgrounds, were able to fight back because the California Government Code (Sections 1090, 18000, and 19990) bars Fairgrounds Directors and employees from having financial interests in contracts with the Fairgrounds, holding employment which may conflict with their Fairgrounds employment or Director duties, and accepting extra compensation not paid by the state for their services. Conflict of interest laws are on the books to protect the Public from self-dealing self-interested kleptocrats and those laws are usually amended to strengthen the laws when the kleptos find a way around the laws currently in place. For some reason which needs serious explaining, conflict of interest laws are propose to be removed.

AB 2396 introduced by Assembly Member Bigelow (AD 05) wants to remove conflict of interest laws for the OC Fairgrounds and all other state owned fairgrounds (District Agricultural Associations).  State conflict of interest codes are found in the California Government Code sections Sections 1090, 18000 and 19990. Self-dealing in government contracting and employment is legalized under AB 2396 Bigelow.  Under this bill, Fairgrounds Directors and employees can set up companies and funnel contracts to those companies. This can be done because Fairgrounds employees and Directors make the purchasing decisions without oversight from the state. This is a bad sequel to the carnival of corruption which played the OC Fairgrounds from 2009 to 2015. There is no good reason for this bill to exist other than to further self dealing, corruption, and graft. 

This bill allows the OC Fairgrounds to be privatized and leaves the Public with no real tools to stop the privatization. OC Fair Board Directors and employees would be allowed to form a company to manage the OC Fairgrounds, be employed by said company, and have the OC Fair Board enter into a contract to manage the OC Fairgrounds on whatever terms the Directors and employees negotiated for themselves.This would be hard or even impossible to stop because it would be legal. Annual revenues around $45 million with a profit margin of around $8 million a year make legalized kleptocracy lucrative. This bill does not serve the interests of the Public.

Job #1: Kill the Bill

The bill is in the Assembly and we need to contact Assembly Members to have the bill killed. The Assembly email system does not allow you to email anyone but the Assembly Member representing your district, but you can call their offices. Email your Assembly Member using the emails on their page found at the Assembly Member list.

Call Assm. Frank Bigelow (AD 05) at (916) 319-2005  and ask that AB 2396 be killed. Assm. Bigelow represents the area around Yosemite.

Call or Visit Local Assembly Offices

Call, visit and write letters to our Assembly Members to ask them to oppose AB 2396. 

Travis Allen (AD 72)

Sacramento Office 916) 319-2072

District Office 17011 Beach Blvd, Suite 1120, Huntington Beach, CA 92647 (714) 843-4966

William Brough (AD 73)

Sacramento Office (916) 319-2073

District Office 29122 Rancho Viejo Road, Suite 111, San Juan Capistrano, CA 92675 (949) 347-7301

 

Phillip Chen (AD 55)

Sacramento Office (916) 319-2055

District Office 3 Pointe Drive, Suite 313, Brea, CA 92821 (714) 529-5502

 

Steven Choi (AD 68)

Sacramento Office (916) 319-2068

District Office 3240 El Camino Real, Suite 110, Irvine, CA 92602 (714) 665-6868

 

Tom Daly (AD 69)

Sacramento Office (916) 319-2069

District Office 2400 East Katella Avenue, Suite 640, Anaheim, CA 92806 (714) 939-8469

 

Matthew Harper (AD 74)

Sacramento Office (916) 319-2074

District Office 1503 South Coast Drive, Suite 205, Costa Mesa, CA 92626 (714) 668-2100

 

Sharon Quirk-Silva (AD 65)

Sacramento Office (916) 319-2065

6855 La Palma Avenue, Buena Park, CA 90620 (714) 521-6505

 

Job #2: Contact the OC Fair Board & Ask Their Help to Kill the Bill

Please contact the OC Fair Board to ask them to oppose this bill and to do everything in their power to kill the bill. As one of the largest fairs in the western US, the OC Fairgrounds can influence fairs legislation. Directors did not give clear direction during the February 2018 Board meeting to take action to kill AB 2396 Bigelow and need to hear from the Public, who own the OC Fairgrounds, to kill the bill. 

OC Fair Board Directors are: Ashleigh Aitken, Barbara Bagneris, Douglas La Belle, Gerardo Mouet, Newton Pham, Nick Berardino, Robert Ruiz, Sandra Cervantes, Stan Tkaczyk 

OC Fair Board Directors choose to not have official emails so you have to mail a staff member and ask the staff member to forward your email. Email Summer Angus sangus@ocfair.com

You can do a public records request to check if your email was forwarded to the Board. cpra@ocfair.com

 

If You Don't Like State Conflict of Interest Laws, Then Find a New Position

There is no excuse for what you are doing by proposing to ending conflict of interest laws for state owned fairgrounds. If you do not like conflict of interest restrictions placed on you as a Director or an employee, no one is forcing you to be a Director or an employee. 


Take a Day Off Work to Attend Master Site Plan Reveal on April 26, 2018

 

Bullhorn Meeting (1)

The Master Site Plan selection will be revealed on Thursday, April 26, 2018, Download Master Site Plan Notice _February_Board_Packet during a meeting which starts at 9 AM when most people have work, school, or other commitments. Despite repeated asks for evening meetings, the Fair Board chooses to meet at a time when it is hard for people to attend their meetings. The meeting time is by the choice of the Fair Board and nothing in statute says the Fair Board must meet during the day. Oversight of the planning was done by a member of the building trades whose employer can benefit from the project. 

The proposed schedule is:

9:00 a.m. – 10:30 a.m. Agenda items 1-9 (including Call to Order through Governance Process, workshop/training to be last governance item)

10:30 a.m. – 10:45 a.m. Short recess for room re-set (if necessary)

10:45 a.m. – 12:30 p.m.  Workshop/Training to commence

12:30 p.m. – 12:40 p.m. Short recess as boxed lunches are delivered for Board of Directors and members of the public

12:40 p.m. – 2:00 p.m. Workshop/Training to continue through working lunch

2:00 p.m. – 2:15 p.m. Wrap up of final Agenda items (Board of Directors Matters of Information and Adjournment)

The Fair Board does not stream or make video recordings of their meetings. This is another choice made by the Fair Board.  With over $40 million in cash and cash equivalent reserves Download Financials_February_Board_Packet, there is no shortage of resources.

The Fair Board is expected to present plans to begin the process of creating a convention and expo center with year round, daily, heavy use. As the process is being led by CEO Kathy Kramer who worked on the $600 million remodel of the Phoenix Convention Center  with the assistance of VP of Operations Ken Karns who helped to convert Western Fair in London, Ontario, Canada to a year round entertainment and expo center and CEO Kramer celebrated a $1 million sales month in December 2017 Download Million Dollar December_January_Board_Transcript, the project will have major impacts on Costa Mesa. The remodel of the Phoenix Convention Center triggered development of hotels and an entertainment district

 

Contact Fair Board Directors Added May 3, 2018

Chair Barbara Bagneris bbagneris@ocfairboard.com
Vice Chair Robert Ruiz rruiz@ocfairboard.com
Ashleigh Aitken aaitken@ocfairboard.com
Nick Berardino nberardino@ocfairboard.com
Sandra Cervantes scervantes@ocfairboard.com
Doug La Belle dlabelle@ocfairboard.com
Gerardo Mouet gmouet@ocfairboard.com
Newton Pham npham@ocfairboard.com
Stan Tkaczyk stkaczyk@ocfairboard.com

Contact CEO Kathy Kramer  

kkramer@ocfair.com 

714-708-1510

Contact VP of Operations Ken Karns

kkarns@ocfair.com

714-708-1552

 

 

 

 

 

 

 

 


OC Fairgrounds Celebrates $1 Million in Monthly Revenue in Move Towards Becoming Convention & Expo Center

When Everything is for Sale (1)

OC Fairgrounds CEO Kathy Kramer, formerly of the Phoenix Convention Center,  announced that the all-time monthly revenue record for year round events (events held outside of the OC Fair) was broken in December 2017 with over $1 million in monthly revenue.  Ms. Kramer called the $1 million a month sales as a “benchmark for next year” which is being celebrated on February 23, 2018, with a lunch for Fairgrounds staff. 
 
Hit the goal, get a reward. The OC Fairgrounds is a sales focussed organization with the Fair Board directing Executive Management to those actions. If the focus was education and agriculture, there would be celebration of increasing the number of Centennial Farm visitors and increases in the amount of space devoted to agricultural and educational use.  
 
Increases in revenue and rewarding staff for the increase gives rise to a number of issue to be examined:
  • While the Fairgrounds Board and Executive Management claim the property is about agriculture and community service, their actions show the goals of the Board and Executive Management are about increasing revenues.  It is not clear why all of this money is needed or how the money is used to benefit the community with increased agricultural and educational programming and community use of the facility. Exactly what does the Public who own the OC Fairgrounds get from this $1 million benchmark month?
  • Who asked the OC Fairgrounds to do this?  Who benefits? We need names.
  • Does the increase in year round sales mean that there will not be increases in admission prices for the 2019 OC Fair and no increases in parking charges? We need a commitment to no price increases for the 2019 OC Fair. 

The Fair Board and Executive Management  continue to deny that their goal is to become a year round convention and event center with daily, heavy use. Executive Management hired by the Fair Board are from the convention and expo business and converted a fairground into a 364 day a year, 24 hour a day entertainment and expo center.  Executive Management were hired to change the OC Fairgrounds from a fairground to a convention and expo center. 

The Fairgrounds is a 150 acre island surrounded by Costa Mesa and nothing gets on or off the island without going through Costa Mesa.  Costa Mesa neighbors should not be asked to bend their needs to fit what the Fairgrounds wants but the Fairgrounds must fit into the existing Costa Mesa neighborhoods.
 
Fairgrounds Executive Management Contact Information to Address Your Questions and Concerns
CEO Kathy Kramer
714-708-1510
Ms. Kramer was the Deputy Director of the Phoenix Convention Center and was part of the team that oversaw a $600 million expansion project tripling the rentable space to nearly one million sq ft and placing the Phoenix Convention Center in the top twenty-five convention centers in North America.  The expansion of the Phoenix Convention Center changed the character of the area


VP of Operations Ken Karns 
 714-708-1552
Oversees safety, security, facilities, equestrian center, entertainment booking and ticketing, parking, and the Master Site Plan process, among other duties. Mr. Karns worked to convert Western Fair in London, Ontario, Canada to the Western Fair District which has year round 24 hour a day use. 
 

VP of Business Development Michele Richards 
714-708-1716
Oversees event bookings and scheduling, sponsorships, community programs, and community exhibits during the OC Fair, among other duties. Year round events are not booked by state employees but by Tandem, a company from San Francisco which is paid on commission. 

"Smart Farm"" Bill Includes Fairgrounds & Community Colleges - Opportunity for OC Fairgrounds & Orange Coast College

Attention Question (1)

A new Assembly bill, AB 2166 (Caballero) encourages community colleges and fairgrounds to collaborate on establishing "smart farms" on community college campuses and fairgrounds to provide regional agricultural businesses the opportunity to showcase up-to-date technology in real world practice. The OC Fairgrounds is across the street from Orange Coast Community College where there is an active horticulture program. Adding a new farm area at the OC Fairgrounds to showcase agricultural technology would be a benefit to the OC Fairgrounds, Orange Coast College, local agricultural businesses, and the community as a whole. Please ask your local Assemblymember, the OC Fair Board, and Orange Coast College to support this bill.

Download a copy of the bill as of Feb 13, 2018  Download Bill Text - AB-2166 California Farm Bill: agricultural technology

Track AB 2166 https://leginfo.legislature.ca.gov

Orange Coast College Board Contact Info
David A. Grant, ​​​President​​ ​ dgrant14@cccd.edu

​Mary Hornbuckle, Vice President ​mhornbuckle@mail.cccd.edu

Dr. Lorraine Prinsky, Clerk of the Board lprinsky@cccd.edu

Jim Moreno, Trustee jmoreno@cccd.edu

Jerry Patterson, Trustee jpatterson@cccd.edu

Javier Venegas, Student Trustee strustee@mail.cccd.edu

 

Contact OC Fair Board via Summer Angus and ask Ms. Angus to foward the email to the Fair Board sangus@ocfair.com

 

Contact your State Assmblymember https://assembly.ca.gov/assemblymembers


How Can I Contact Fairgrounds Staff?

Chicken Scooter Question (2)

Kathy Kramer, CEO 

kkramer@ocfair.com

714-708-1510

 

Ken Karns, VP of Operations 

Oversees safety, security, facilities, equestrian center, entertainment booking and ticketing, parking, and the Master Site Plan process, among other duties

kkarns@ocfair.com

714-708-1552

 

Michele Richards, VP of Business Development 

Oversees event bookings and scheduling, sponsorships, community programs, and community exhibits during the OC Fair, among other duties.

mrichards@ocfair.com

714-708-1716

 

Jason Jacobsen, Director of Technology and Production

Oversees compliance with noise limits in the neighborhoods and event production, among other duties.  The buck stops at Mr. Jacobsen's desk/phone/email for noise issues. 

jjacobsen@ocfair.com

714-708-1549


How Can I Contact Fair Board Directors?

Senior Man Question (2)

Directors use their personal email addresses and phone numbers to conduct Fairgrounds business. There are no email addresses for Fair Board members using the ocfair.com address used by staff. If you want to send an email to a Director, send it to Summer Angus, who takes messages for the Directors and ask that the email be forwarded to the Directors. Sending the email to Ms. Angus with a request to forward the email to the Directors creates a paper trail which can be tracked using public records requests.

Summer Angus sangus@ocfair.com