A special Fair Board meeting was held on July 27, 2019. The only item on the agenda was a vote to approve the selection of contractor MossAdams to consult on updating and revising the Board Policy manual.

Prior to the meeting, a letter had been sent to the Board members recommending that they not approve the contract because of MossAdams stated preference for a particular policy approach known as the Carver Model, which is used in the Board's current policies and has been severely problematic, and is, in many cases, the root cause of the Board dysfunction and the out-of-control management at the Fairgrounds.

Read the MossAdams proposal Download MossAdams Proposal

Read the letter sent to the Board Download 2019-07-25_Ltr_to_Board

Unfortunately, it appears that the attempt to hire a contractor to assist is leading to more problems due to a failure of the Board to recognize important differences between the process that was described to them by Director Andreas Meyer and that for which they will be contracting.

Director Meyer’s Description of Policy Development Process

During the meeting, Director Meyer, who chairs the ad-hoc committee on Board Governance Policies, defended the recommendation of MossAdams by stating that, despite their stated preference for it, MossAdams will not be using the Carver Model or even directly writing the policies. Instead, the policies will be developed by the Board and the public in sections, through a series of public workshops and based on best practices and examples from other organizations and cities. Policies from each segment will be developed prior to starting on the next segment.

Unfortunately, this is not what the contract being recommended by Director Meyer actually includes.

Actual MossAdams Proposal

MossAdams, in their bid in response to the Fair Board's Request for Proposal proposed one round of drafting of new policies by MossAdams with input from the staff, Board, and stakeholders. The draft would be presented and revised to make the final version of the Board policies. MossAdams does not mention workshops with the owners of the property (i.e., the public), a Board centric process, or the development of the policies in a segmented, iterative fashion. MossAdams proposes a process that will only cost $45,000 (the equivalent of 150 work-hours) over 16 months, or just 9 hours of work per month. It is inconceivable that the intensive iterative process that Director Meyer has described can be performed for that amount of effort.

Per state contracting laws, the contract issued by the Fairground must reflect the bid proposal from MossAdams.

Failure to Recognize Discrepancy

During the meeting, it was not clear that the Board recognized the gap between the MossAdams proposal and Director Meyer's description of what would be done. Consequently, it was not clear whether Board Members were voting to approve a contract to cover what Director Meyer was describing or the contract proposed by MossAdams. When the public tried to have the Board address the gap, Chair Robert Ruiz shut down the public and discussion of the gap and approved the contract.

Letter Was Sent to Board Addressing the Gap Between Reality and Expectations

Following the meeting, a letter was sent to the Board addressing the gap between the MossAdams Proposal and Director Meyer's description of the process. If the Board responds to the letter, we will share the response with you.

Read the letter sent to the Board Download 2019-07-27_Ltr_to_Board

Contact the Fair Board

In This Issue: 

• Lack of Planning for 405 Freeway & OCC Construction Expected to Compound OC Fair Traffic & Parking Problems
• Is a Fair Share of OC Fairgrounds Sales Tax Revenue Coming Back to Costa Mesa & OC?
• Did the OC Fairgrounds Pass Up on a Share of $18 Million in Grant Money to Improve Emergency Readiness?
• Over $129,000 of State Money Spent on Personally Motivated Investigations 
• OC Fairgrounds Sent $75,000 to LGBT Opponent While Trying to Hide Behind Rainbow Flag

Lack of Planning for 405 & Freeway Construction Expected to Compound OC Fair Traffic & Parking Problems
OC Fairgrounds staff did not get ahead of problems arising from the demolition of the Fairview Rd bridge and construction at Orange Coast College. No plans are in place to have more parking lots with shuttle bus service or expanded OCTA Fair Express bus service. Expect traffic to be worse and more Fairgoers to attempt to park in Costa Mesa neighborhoods.

Is a Fair Share of OC Fairgrounds Sales Tax Revenue Coming Back to Costa Mesa & OC?
We started asking questions when we saw that sales tax revenue received by Costa Mesa from the OC Fairgrounds was flat since since 2004 despite OC Fairgrounds revenues nearly doubling since 2004. Sales tax revenue is a major source of funding for local governments. A new law enacted in 2018 makes it easier for sellers to report sales made at the OC Fairgrounds.  Preliminary numbers show an increase from the 2004 numbers and we continue to work on this issue.

Download 32nd DAA Historic Revenue Chart

Download Fairground Flat Sales Tax

Did the OC Fairgrounds Pass Up on a Share of $18 Million in Grant Money to Improve Emergency Readiness?
The OC Fairgrounds is a key part of the emergency readiness plans for Orange County and can be used as a shelter site for people and animals in addition to a staging site for emergency and rescue equipment. Gov. Newsom has made emergency readiness a priority and $18 million in from Proposition 68/SB 5 has been allocated to be used to improve emergency readiness infrastructure at fairgrounds. We are digging to find out if the OC Fairgrounds applied for a grant.

Over $129,000 of State Money Spent on Personally Motivated Investigations 
CEO Kathy Kramer targeted two Board Directors and the Chief Financial Officer for investigation for reasons which are unknown.  The bill has climbed to $129,270 with no end in sight.  If there are real problems to be investigated, law enforcement authorities such as the California Highway Patrol, Attorney General, State Auditor, Orange County Sheriff's Department, and other agencies should be brought in. The Fair Board has the legal authority to stop the investigations and has not stopped drain on the public coffers from the nefarious investigations. 

OC Fairgrounds Sent $75,000 to LGBT Opponent While Trying to Hide Behind Rainbow Flag
At its monthly meeting on May 23, 2019, the Fair Board voted to fly a Rainbow Flag over the Fairgrounds.  This despite the fact that the same Board has refused to order Fairgrounds CEO Kathy Kramer to cancel a sponsorship agreement she entered into with Vanguard University that has resulted in over $75,000 in public funds being transferred to the University.

Download Pride Resolution  

Download Contract 32nd DAA Vanguard

Vanguard University, which is affiliated with the Assemblies of God, takes a hard-line fundamentalist Christian position regarding homosexuality. Engaging in a even a chaste romantic same-sex relationship or publicly questioning any of the University's policies on homosexuality are grounds for expulsion.  The Orange County Fair and Event Center (a state agency) entered into a sponsorship agreement with Vanguard in 2018, but apparently did not include state required non-discrimination language in its contract. State law (Cal. Gov't. Code §11135-11139.8) prohibits the state from contracting with groups such as Vanguard University which discriminate.  

CEO Kramer has also given thousands of dollars in free OC Fair admission and concert tickets to Vanguard University in addition to allowing the school to rent OC Fairgrounds facilities on terms not available to the general public.

Did You Know?

• OC Fairgrounds employees are not paid overtime. All hours worked are paid at the regular pay rate. Download Morales v. 22nd Dist. Agricultural Assn
• Free admissions to the OC Fair are around 25% of the paid OC Fair admissions.
• Fair Board Directors can buy an unlimited quantity of general admission OC Fair tickets for $1/each. Former Fair Board Directors receive a lifetime admission credential and can buy up to 30 general admission OC Fair tickets for $1/each. Download Board Director Tickets
• Spouses and dependent children of current Fair Board Directors receive free admission credentials.
• A Board Concierge who is a state employee arranges the dinners and concert tickets for Fair Board Directors, their friends, and business associates. Former Fair Board Directors can use the Board Concierge to book concert tickets.
• CEO Kathy Kramer wants to raise admission prices for the 2020 OC Fair.

Contact the Fair Board
Chair Robert Ruiz [email protected]
Vice Chair Sandra Cervantes [email protected]
Ashleigh Aitken [email protected]
Barbara Bagneris [email protected]
Doug La Belle [email protected]
Andreas Meyer [email protected]
Gerardo Mouet [email protected]
Newton Pham [email protected]
Natalie Rubalcava-Garcia [email protected]

The OC Fairgrounds is also known as the 32nd District Agricultural Association, 32nd DAA, Orange County Fair and Event Center, and OCFEC.  

The agenda for the Thursday,  February 28, 2019, OC Fair Board (aka Orange County Fair and Event Center, OCFEC, 32nd District Agricultural Association) meeting has been published.  The Board meets at 9 AM at the Administration Building off Arlington Drive. If  you cannot make the meeting, please email comments to the Board Directors using the emails at the end of this post.

Agenda available here Download 19_02_February_Agenda1

Complete agenda packet available here https://ocfair.com/publicmeetings/board-of-directors-meeting-february-28-2019/

Refusing Action on State Audit Which Found Employee Paid to Not Show Up for Work 

No action can be taken by the Board regarding the 2016 state audit which found an employee paid over $70,000 to not show up for work for approximately eight months because the matter has been agendized as "Information Only" notwithstanding either the seriousness of the matter or the multiple requests by the public for action to resolve the issues which permitted this to occur. The same management are in place now as were during 2016 when the deal went down.  The Board refuses to take action to address the underlying issues which allowed these actions to occur. Download CDFA Unredacted 2016 Audit

Restricting Public Comments

New restrictions on public comment are in place for the February 2019 meeting. The new policy called a "Statement of Meeting Decorum" limits what can be said during public and agenda item comment:

Hiring a Private Investigator

Over $58,000 was spent with private investigation firm Morley Group during 2018 without either a contract being brought forward to the Board or an explanation given of why a private investigator needed to be hired.  Morley Group is being given another no bid contract SA -051-19YR (agendized in the Standard Agreements file as "professional services" in an attempt to conceal the true nature of the contract) for $49,000 for the period from February to July 2019.  There is no need for the Morley Group contract as the OC Fairgrounds can request the Orange County Sheriff's Department, Costa Mesa Police Department, California Highway Patrol and/or other state investigative services to conduct investigations.  

Board Director Nick Berardino requested hiring an outside performance auditor and presented a report at the May 2018 Board meeting.  Download Performance Auditor Request Board Directors requested action to move ahead on a performance auditor while staff have not followed up on the request. Now is the time to bring in an outside performance auditor and request the State Auditor for assistance. If there is money for a private investigator, there is money for a performance auditor. Maybe the performance auditor can find out why the private investigator was hired and report back.

Video Recording of Meetings

Board meetings are held on Thursday mornings at 9 AM, when few people can attend.  Board intent was to look into both live streaming and recording of meetings for later playback, but the agenda says "video recording." Staff and at least one Board Director have used the specific wording of an agenda item to throttle the intentions of Board Directors on prior matters.  A push needs to be made to have live streaming of meetings and archiving of meeting records despite wishes of staff and some Board Directors to the contrary. 

Increasing Oversight of Requests for Proposals and Capital Projects

A number of surprises in requests for proposals (RFP's) and capital projects have come to light in the past few months. Several examples are:

• Staff entered into a legally binding storm water management plan (SWMP) with the State Regional Water Quality Control Board (SRWQCB) in 2016, spent over $80,0000 on storm water consulting services, received a notice of violation for allowing runoff water from operations to enter the storm drain during 2018, and failed to let the Board know what was going on. Members of the public let the Board know about the SWMP in late 2018.
• Nature and scope of the effort undertaken by staff to rebrand the property was unknown to several Board Directors and the public until October 2018 at which time the contract was in place and work had been started.  Staff had written the scope of work without Board or public input. The contract left out the Equestrian Center and tilted the process towards becoming an events and entertainment center.
• Staff publicly stated that the much needed sound wall for the Action Sports Arena (ASA) was not planned to be built despite appearing in the budget for several years. Estimated costs of the sound wall are around $1 million, which is a small portion of the over $50 million in cash reserves. Staff had been leading on the Board and neighbors about building the Action Sports Arena sound wall.

Board Directors have requested to have input and oversight over how public money is spent on contracting and capital projects.  This is a good thing. 

Relocating A4 Skyhawk from Orange County Civic Center to OC Fairgrounds

Plans are being made to relocate the A4 Skyhawk currently located in the plaza at the Orange County Civic Center to the OC Fairgrounds and to place the plane near Heroes Hall Veterans Museum which would allow the plane to be used as part of the museum. Watchful eyes of the public are needed to insure that staff don't create an obstacle to this project. This is a great project. Are there other historic items which could be moved to the OC Fairgrounds?

Help us trace payments for meetings held regarding the OC Fairgrounds (aka Orange County Fair and Event Center or OCFEC)  Master Site Plan from October 2017 to  April 2018.  A total of $46,000 was spent on meetings outside of the September 2017 and April 2018 public meeting and which was not included in the original contract. Fairgrounds staff hasn't been able to explain what the $46,000 was spent on.

The companies and staff working on the project were:

C. H. Johnson Consulting: Charles Johnson

SWA: Elizabeth Shreeve

HPI Architecture: Lawrence (Larry) Frapwell, Megan Gaunce

The meetings and charges we need help with are:

If you met with the consultants between October 2017 and April 2018 outside of one of the public meetings described below, drop us a line at [email protected] because we want to learn more about how public money was spent. 

When Public Meetings Were Held

Public meetings were held at the September 2017 and the April 2018 Board meetings on Thursday mornings. A public workshop was held in The Hangar during June 2017.  Small group meetings for vendors, concessionaires, tenants, government entities, and community groups were held during the spring of 2017.

The full agenda packet with the contracts has been posted. Choose the “September 27, 2018” meeting to access the files. Please share with others who are interested.
https://ocfair.com/public-information/public-meetings/

Master Site Plan Process (See 18_09_Staff_Reports_A_J1)
The plan is to hold one (1) public meeting in October and finalize the Master Site Plan in November.

Equestrian Center and Facility Wide Infrastructure Analysis (See 18_09_Staff_Reports_A_J1)
The proposal is to analyze the infrastructure of the Equestrian Center and then sometime in 2019 to analyze the infrastructure of the bulk of the Fairgrounds. An analysis of infrastructure needs to be done before the Master Site Plan is created in order to determine infrastructure which needs to be updated or replaced. The Fairgrounds has $55 million in reserves, so money is not the problem. Staff is considering using the Equestrian Center for storage space. See “Long Term Storage Solutions.”

Sales Tax Collection and Remittance to City (See 18_09_Staff_Reports_A_J1)
Fairgrounds staff take the position that a City business license is not required. Fairgrounds staff discuss sales tax and point out contract language requiring reporting of sales tax but does not state that Fairgrounds staff will be active in having sales properly reported to allow money to earned in the City to be returned to the City. Should the City implement a gate tax, a per drink tax, and/or a parking tax to receive revenue from the Fairgrounds?

Long Term Storage Solutions (See 18_09_Staff_Reports_A_J1)
Solutions for long term storage are needed. Offsite storage space can be rented for about $100K per year or a Butler building could be constructed or the Equestrian Center space could be used for storage.

New Safety and Security Board Policy (See 18_09_Staff_Reports_A_J1)
The proposed policy is:
Draft Policy 2.12

The CEO will not operate without safety and security planning, procedures and training for the protection of the Association, the staff and guests.

1. Operate without an Incident Command Procedure/Emergency Preparedness Plan, reviewed by appropriate governmental agencies, and communicated to key staff, vendors and production personnel.

To this end;

A. The CEO will schedule a security meeting with the appropriate security partner representatives and two policy representatives from the Board of Directors prior to the start of the annual OC Fair and once in the approximate mid-point of the annual OC Fair.

The CEO will ensure the continued development and delivery of Security, Health and Safety training annually for staff and management of the OC Fair & Event Center.

The CEO will ensure the annual budget supports continuing investment in technology and equipment for Security, Health and Safety.

The CEO will ensure the ongoing investment in staff/management continuing education in Security, Health and Safety for the advancement of procedures and best practices.

The CEO will ensure risk management facility inspections are conducted regularly and corrections are made in a timely manner.

Approval of Travel Request to San Antonio, TX (See 18_09_Staff_Reports_A_J1)
State travel is prohibited to states such as Texas which discriminate against same sex couples or their families or on the basis of sexual orientation, gender identity, or gender expression. The proposed trip is to the annual International Association of Fairs and Expositions (IAFE) allegedly for training. CEO Kramer is making a presentation on “How to Market Your Facilities” and “Creating Community Giveback Programs on Your Fairgrounds with Any Budget”. Ken Karns is presenting in a panel on “Fairgrounds Master Planning - Developing a Vision.” This is an unneeded trip at Public expense and does little to benefit the Public.

Checks and Contracts:
Cash and cash equivalent reserves are over $55 million. See 18_09_Financial-Packet_Aug

Fragomen, Del Rey, Bernsen & Loewy, LLP is an immigration law firm which was previously engaged to process VP of Operations Ken Karns NAFTA TN clearance and H-1B work visa. Fragomen was paid $5,800.00 on June 7, 2018, using check 84090. See 18_09_Financial-Packet_Aug

Ray Cammack Shows (RCS) which operates the carnival and midway was paid $7,535,495.71 for the 23 day run of the 2018 OC Fair. This money leaves Orange County and does not return. See 18_09_Financial-Packet_Aug Electronic Payments Summary August 2018

Straub Distributing / Anheuser-Busch paid $156,712.00 in sponsorship fees. See contract SA-272-18SP in 18_09_Standard_Agreements1

Contact Information to Follow Up on Issues

Contact the Fair Board 

Chair Barbara Bagneris [email protected]
Vice Chair Robert Ruiz [email protected]
Newton Pham [email protected]
Sandra Cervantes [email protected]
Doug La Belle [email protected]
Gerardo Mouet [email protected]
Ashleigh Aitken [email protected]

Contact CEO Kathy Kramer [email protected]

Contact VP of Operations Ken Karns  [email protected]

Contact VP of Business Development Michele Richards [email protected]

The Master Site Plan process is a revenue centered process, not a community, education, agriculture, or recreation centered process.  This is the section from the winning proposal for the Master Site Plan process which discusses the plans for development of the Master Site Plan. It should be noted that multiple requests have been made for documents regarding this work and no documents have been produced. [A] This section is from pgs. 24-25 of the C. H. Johnson Consulting, Inc. proposal:

C. H. Johnson Consulting, Inc. from Chicago, IL  is the contractor for the Master Site Plan process. A copy of the entire proposal is available on the "OC Fairgrounds Documents" page listed on the right side of this page. We have no idea why the OC Fairgrounds hired a company from Chicago and could not find a planning firm in the Los Angeles-Orange County area or even in California.   

This is one in a series of posts looking at individual Master Site Plan tasks to gain a greater understanding of how the OC Fair Board Directors (Ashleigh Aitken, Barbara Bagneris, Nick Berardino, Sandra Cervantes, Doug La Belle, Gerardo Mouet, Newton Pham, Robert Ruiz, Stan Tkaczyk) and Executive Management want to push the OC Fairgrounds away from being the fairground we currently enjoy. 

Heroes Hall Museum (Museum) is owned and operated by the 32nd District Agricultural Association (32nd DAA) which is the state agency owning and operating the OC Fairgrounds. The Museum was built by the state with the state providing most of the funding. Most of the funding for operations, outreach, and other needs comes from the state. The Public can make a donation directly to the Museum of money or historical items, but the donation is not tax deductible. Volunteer opportunities are available by contacting Museum staff.

Tandem, formerly known as California Performance Marketing Group (CPMG) was hired to sell premium space at the annual OC Fair (called Platinum Partners), sponsorships, and group ticket sales. In 2015, outside the view of the Public, a decision was made to eliminate the state employees selling year round event rentals and to outsource all year round event sales to Tandem.

Tandem is paid on commission and receives free office space at the OC Fairgrounds. The commission schedule is:

Sponsorship Sales

Cash from new sponsors, mobile marketing tours and premium space renters 15%

Cash from renewing sponsors, mobile marketing tours and premium space renters 8%

Sponsorship Trade

Budget-relieving trade, both new and renewing 3%

Incremental Cash

Incremental cash from renewing sponsors, mobile marketing tours, and premium space renters 15%

Event Sales

Cash from new events (rent only) 25%

Cash from first event renewal (rent only) 17%

Cash from subsequent event renewals (rent only) 8%

Group Ticket Sales

Cash from new group ticket sales (25 or more tickets) 15%

Cash from renewing group ticket sales (25 or more tickets) 8%

Tandem’s contract runs through 2018.  Download Tandem Contract Amendments

Tel Phil no longer operates the Orange County Market Place and has assigned the lease to Spectra. The lease runs through 2024 with a 10 year option to renew. Rent started at $1,700,000 per year in 2014 and increases to $2,668,500 in 2034.

A copy of the lease with amendments is here:  Download OC Market Place Agreement Amendments

Spectra, formerly known as Ovations, is a part of Comcast Spectacor, which has contracts to provide food, beverage and alcohol services at the OC Fairgrounds. Spectra pays a commission of 34% of gross sales of food and non-alcoholic beverages; 10% of gross catering sales; 40% of gross beer, wine and spirit sales; and 50% of the amount received by Spectra for commissions, fees or buyouts during events. Spectra holds the Alcoholic Beverage Control (ABC) license for the OC Fairgrounds because governmental agencies are not allowed to have ABC licenses. The contract runs until 2024.

Current Contract  Download Spectra Ovations Contract with Amendment