The OC Fairgrounds is holding a budget meeting to discuss the 2020 budget and capital expenditures plan during the evening on Thursday, November 14, 2019, starting at 6:30 PM in the Administration Building. Input from the public is needed regarding revenues, operating expenditures, and capital expenditures.

URGENT: Requests to the Board to Change Format of Meeting

We need to ask the Board to make this into a public workshop, rather than just a public meeting. a public workshop will allow members of the public to have more than one 3 minute speaking time to make input, and allow them to request and receive answers from staff. These requests need to be sent to the Board well before the meeting so that the format may be adjusted.

URGENT: Requests to the Board to Require Meaningful Budget Development Background

In the past, the budget was presented a list of revenues and expenditures which happened to add up. Download 2019 Budget 

A slide presentation provides only a little more detail, but staff avoided being specific on how the numbers were calculated and how money would be spent. Download 2019_Budget_Presentation

The Board needs to receive requests, beginning now, that the public expects to see full backup on the development of the budget numbers and the rationale for the budget priorities.

Background on the Budget and Budgeting Process

How Much Money Does the OC Fairgrounds Have?

Over $62 million in cash as of August 2019.  Annual revenues are about $50 million making the cash reserves about 125% of annual revenue.  The OC Fairgrounds can spend as much as they want to on capital improvements and other projects.

Board policy sets the reserve level at 25% of annual operating expenditure which is about $10.75 million in reserves. The OC Fairgrounds is sitting on over over 5.75 times the required reserve level. In comparison, Costa Mesa which is a city of 110,000 residents which operates a city government with police and fire departments has about $55 million in reserves.

Ideas for Capital Improvement Projects and Other Needed Expenditures

1. Traffic and parking study to reduce the impacts of 5 weeks of near constant gridlock during the OC Fair which stops the 55 Fwy to the Paularino exit and causes OCTA buses to detour through residential neighborhoods. A parking study is needed to find places for the 1.4 million OC Fair attendees to park. It's time to work to reduce the encroachment of OC OC Fairgrounds traffic and parking problems on the homeowners. 

2. A sound wall for the Action Sports Arena to reduce noise from monster truck shows, motorcycle races, and other events from encroaching on the homeowners around the OC Fairgrounds. This projected has been promised "next year" for several years and needs to be built now.

3. Removing the weeds on the Pacific Amphitheatre berm and putting in native plants which can thrive in the salty soil with little water or maintenance. Sprinklers on the berm have not worked correctly since the project was finished several years ago  and the staff member in charge of the project did not follow up on the problem during the time the contractor was liable to make the project work. It's time to pull the weeds and put in a native garden.

4. Make needed repairs and upgrades to the Equestrian Center including installing wifi access.

5. Agreements for use of off-site parking and storage lots for use during the OC Fair. Agreements for shuttle service to and from the off-site parking lots are needed.

6. A covered riding arena in the Equestrian Center. 

7. Development of green-space around the property to buffer the sonic and visual encroachment of the OC Fairgrounds on the neighbors.

What Are Your Ideas on the 2020 OC Fairgrounds Budget?

Please email the Board with your ideas on how state money should be spent at the OC Fairgrounds and requests for handling the budgeting process. And please join us at the meeting!

Contact the OC Fair Board

Board Chair Sandra Cervantes [email protected]

Vice Chair Andreas Meyer [email protected]

Director Ashleigh Aitken [email protected]

Director Barbara Bagneris [email protected]

Director Doug LaBelle [email protected]

Director Newton Pham [email protected]

Director Natalie Rubalcava-Garcia   [email protected]

Director Robert Ruiz   [email protected]

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

Example of proposed 25 ft gate signs with LED screens and lighting.

Contact OCFEC and the Costa Mesa Planning Commission to Put a Hold on This Project

Jason Jacobsen from OCFEC is in charge of the project. Ask him to withdraw the project from the Costa Mesa Planning Commission agenda. He can be reached at 714-625-2958 and [email protected]

OCFEC CEO Kathy Kramer can also withdraw the project from the Costa Mesa Planning Commission agenda. She can be reached at 714-708-1510 and [email protected]

Ask the Costa Mesa Planning Commission to place on hold Public Hearing 2 Zoning Application 19-23 for a Planned Signing Program for the Orange County Fair and Event Center Located at 88 Fair Drive because the project is being brought forward without the OC Fair Board having approved the plans, in addition to other problems with the project. You can email the Costa Mesa Planning Commission

Attend the Costa Mesa Planning Commission meeting on Monday, October 14, 2019, at 6:00 pm in Costa Mesa City Hall and ask the commissioners to place the project on hold.

About the Project

OC Fairgrounds (aka OCFEC) staff want the Costa Mesa Planning Commission to allow six new gate signs over two stories tall to be built along with three new lighted wall signs. Link to the Costa Mesa Planning Commission Agenda with all of the documents. New gate signs have LED screens, lights at the top, and include the City of Costa Mesa logo to deceive the public into believing the City of Costa Mesa owns, operates, or somehow manages the state owned OC Fairgrounds. These new signs are incompatible with the existing homes around OCFEC and will interfere with the quiet enjoyment of homes. 

Jason Jacobsen is in charge of the project and did not bring the plans dated January 2019 to the Board or public prior to pushing the item through to the Planning Commission. The public learned of this project when signs stating there was a planning commission hearing about an LED signage project popped up about 10 days ago at OCFEC. The first time the public saw the plans was when the Planning Commission agenda was posted on October 10, 2019. Neighbors have not received notification of the project and no outreach has been conducted. OCFEC staff continue to be indifferent to public input and needs of the neighbors.

It is unclear why new gate signage would be built when OCFEC is undergoing an infrastructure analysis in preparation for another attempt at a new master site plan and is in the midst of a rebranding effort. Any of these projects can change the need for gate signage and how that signage appears and is used. This project needs to be put on hold until other projects which may impact signage are completed. 

OCFEC staff made no attempt to fit into the Costa Mesa sign code except make the signs share the same hideous design in order to qualify as a "Planned Signing Program".  Here's the table from the Costa Mesa Planning Commission staff report detailing how out of line with city code this project is:

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

Photo of Orange County Transportation Authority (OCTA) on a residential street in Mesa del Mar during the 2019 OC Fair. 

Friends and Neighbors of the OC Fairgrounds (FANSOCF) met with Costa Mesa City Council Member Andrea Marr to discuss how harmful impacts resulting from activities at the Orange County Fair and Event Center (OCFEC) on the neighborhoods around the OC Fairgrounds can be managed and reduced. Council Member Marr represents Costa Mesa District 3 the district where the OC Fairgrounds is located.

Issues about traffic and parking issues which cause nightly backups during the five week annual OC Fair were a primary concern. While OCFEC staff have acknowledged that the amount of traffic attempting to reach the OC Fair exceeds the capacity of the roadways leading to the property, OCFEC staff have not taken steps to make significant impacts on the problems. Neighbors in College Park, Mesa del Mar, and Monticello Community face five weeks each summer where traffic backups in their neighborhoods make travel difficult. Some residents leave on vacation rather than deal with the never ending problems.

A portion of the never ending traffic back up is due to a lack of OCFEC staff planning for offsite parking with shuttle service. The Experian parking structure located near South Coast Plaza is only used on weekends for OC Fair parking. The only offsite parking during the week is at Orange Coast College across from OCFEC with current overuse of the parking lots causing headaches for College Park residents.

FANSOCF is encouraged that Council Member Marr understands the issues faced by residents of her district and is willing to work with FANSOCF to gather information to work with OCFEC, City of Costa Mesa, Orange County Transportation Authority (OCTA) and other stakeholders to develop plans to reduce negative impacts on her constituents.

OCTA buses and parking shuttles cutting through residential neighborhoods is not acceptable and must end.

On Saturday, July 27, 2019, OCTA OC Fair Express and parking shuttles were cutting thru Mesa del Mar. Two OCTA OC Fair Express and a parking shuttle were photographed on Junipero Dr passing a “No Parking” sign near TeWinkle Park. Traffic was backed up on Newport Blvd going into the OC Fairgrounds causing the 55 Fwy to back up to the Paularino Ave overpass. Buses and shuttles were diverting through residential neighborhoods to avoid the stopped traffic.

There are 47 weeks between the end of the 2019 OC Fair and the beginning of the 2020 OC Fair which can be used to make changes to reduce the traffic problems which crush neighborhoods during the fair.  Possible ways to reduce traffic impacts for the 2020 OC Fair include:

• Increasing offsite parking with shuttle bus service. Shuttle bus lots can be in neighboring cities.
• Routing OC Fair patrons to offsite parking lots with shuttle when parking lots on the Fairgrounds are filling up.
• Ensuring the efficient use of adequate parking during periods of peak attendance.

There are a number of other possible changes which are not listed. What would you do to end buses and shuttles going to the OC Fair cutting through the residential neighborhoods?

Tell the OC Fairgrounds Executive Management and Fair Board to Stop the Buses Cutting Through Your Neighborhoods
OC Fairgrounds executive management and Fair Board claim they do not hear about problems caused by the OC Fair. You can invite Fair Board members to your neighborhood to show the problems experienced during the OC Fair. Share your problems and suggestions for fixing the problems:

Contact Fairgrounds Executive Management 
CEO Kathy Kramer [email protected]

VP of Operations Ken Karns [email protected]

Contact the Fair Board

• Traffic routing and road closures created headaches for Fairgrounds neighbors traveling to and from their homes because changes were made during the day. Neighbors found themselves stuck in the traffic they were trying to avoid.
• Eastside Costa Mesa was parked bumper to bumper with cars left by people walking to the OC Fair. Trash was left in the neighborhood by the fairgoers.
• Merrimac Way was used as a cut thru from Harbor Blvd.
• Maxed out parking at the OC Fairgrounds and Orange Coast College (OCC) caused fairgoers to find other places to park. 

• Are "No OC Fair Parking" signs and parking enforcement needed for your neighborhood? Where are the signs and enforcement needed?
• Does your neighborhood need OC Fair Ambassadors to pick up trash? If there are OC Fair Ambassadors in your neighborhood, are more needed?
• Do neighbors need to be given traffic routing maps including restricted turns and street closures? Should neighbors be told when traffic routing changes to plan for trips to and from their homes?
• Should offsite parking with shuttle service be offered during the weekday evenings of the OC Fair? Hollywood Bowl and Ventura County Fair have been offering shuttle service during the weekdays for a number of years.
• Is more weekend offsite parking with shuttle service needed?
• Is there a better way for the OC Fair to let fairgoers know parking is maxed out other than signs on the 55 Fwy and Fairview Rd? How could fairgoers be told before getting to Fairview Rd that parking is maxed out? Where should fairgoers be routed to when parking is maxed out?

You can copy [email protected] on the emails to help us track issues experienced in the neighborhoods and resolution of the issues.

Neighborhoods near the OC Fairgrounds need relief from problems caused by growing OC Fair attendance and a push to have  year round daily use of the property.  Growth in year round use of the OC Fairgrounds has increased traffic, parking in the neighborhoods, and use of parking lots at Orange Coast College (OCC.)  Problems once only experienced during the OC Fair are now year round problems for the neighbors.  

Steps can be taken to check the problems caused by increased use of the OC Fairgrounds include funding for neighborhood police services and reducing use of OCC parking lots by the OC Fairgrounds.

Fund Neighborhood Police Services in Addition to Traffic Control Services

Contracts between the Costa Mesa Police Department (CMPD) and the OC Fairgrounds provide traffic control services and do not include neighborhood police services to deal with parking, cut-through traffic, and problems caused by OC Fairgrounds patrons. Neighbors have reported difficulty in having CMPD respond to requests for service during the OC Fair. Read the contract between the OC Fairgrounds and City of Costa Mesa for police services. Download Costa Mesa Police Contracts

The OC Fairgrounds needs to fund CMPD services in the neighborhoods during the OC Fair and large year round events. CEO Kathy Kramer is pushing for increased year round use of the OC Fairgrounds, which will burden the neighborhoods even more. With annual revenues over $50 million with a profit of about $7 million (about 14%) and cash reserves are over $54 million, the OC Fairgrounds has the money to protect the neighborhoods from the problems caused by their operations and needs to step up to address issues caused by their operations.

Reduce Neighborhood Disruptions by Curtailing OC Fairgrounds Use of OCC Parking Lots

Parking lots at OCC are now being used year round for OC Fairgrounds events in addition to the five week OC Fair. OCC parking lots have becoming a defacto extension of the OC Fairgrounds parking lots. Events using the OCC parking lots during 2019 are:

• Tet Festival on February 8, 9, 10
• Musink on March 8, 9, 10
• Pet Expo on April 26, 27, 28
• OC Marathon on May 5
• OC Night Market on May 17, 18, 19
• Scottish Festival on May 25, 26
• OC Night Market on June 14, 15, 16
• OC Fair from July 12 to August 11
• OC Night Market on August 23, 24, 25
• Sand Sports Super Show on September 13, 14, 15

Read the contract between OCC and the OC Fairgrounds for year round use of the OCC parking lots. Download OCC Parking Contract

Use of OCC parking lots during the OC Fair and year round events disrupts the neighborhoods near the parking lots with noise from patrons coming and going carrying into the neighborhoods. Patrons leaving late at night may be intoxicated which has its own set of problems to deal with. Problems from the five week annual OC Fair are now occurring throughout the year.  CEO Kathy Kramer is pushing for growing attendance of the OC Fair and conducting events every day of the year which will grow the problems for the neighbors including increasing use of OCC parking lots.

Steps need to be taken to protect the neighbors from problems caused by ongoing use of OCC parking lots by the OC Fairgrounds:

• Reduce use of OCC parking lots for year round event parking. Events at the OC Fairgrounds need to be parked at the OC Fairgrounds.

• The OC Fairgrounds needs to pay for staff in OCC parking lots at the conclusion of events to move patrons out quickly and quietly.

• Place DUI patrol in the OCC parking lots to deal with patrons who are too drunk to drive.

• Create a way to have an immediate response to and resolution of a problem reported in the OCC parking lots. One point of contact to report, resolve and track problems at OCC parking lots caused by OC Fairgrounds events needs to be created. 

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.  

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 OC Fairgrounds (aka Orange County Fair and Event Center, OCFEC) Master Site Plan is now on hold. The Board will have a comprehensive facility wide analysis of infrastructure and related deficiencies completed prior to re-starting the Master Site Plan process.

Issues which have been identified as needing further assessment include:

• Inspections by the State Fire Marshal uncovered problems with inadequate electrical systems which could lead to fires.
• Electrical power delivered to the property needs to be upgraded to allow shows such as Cirque du Soleil to use the power grid instead of using diesel generators to power the show for several months.
• The Board became aware of ongoing issues with stormwater pollution prevention management. Staff had made legally binding commitments and hired consultants to perform work without bringing the matter to the Board.
• ADA access needs to be evaluated facility wide. Problems with ADA access have been present during Board meetings.
• Parking lot lighting needs to be evaluated and updated. Multiple sets of temporary lights on diesel generators are used on an ongoing basis to provide parking lot and facility lighting.

Have you seen infrastructure, environmental or safety issues which need to be corrected? Please bring the issues forward to allow the issues to be added to the infrastructure assessment.  Please post a comment or email the Board to bring the issue forward for study and possible resolution.

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]

Your input for the OC Fairgrounds (aka Orange County Fair and Event Center or OCFEC) Master Site Plan is needed because the Master Site Plan process will start after the 2018 OC Fair closes in August and finish by the end of December 2018.  Two prior Master Site Plan proposals included converting OCFEC into a convention center (September 2017) and demolition of the Equestrian Center to create an RV park (April 2018).  The April 2018 proposal included $170 million in bonds for a series of projects with the nearly half a billion dollars in  debt payments on the bonds forcing OCFEC either into bankruptcy or to more than quadruple revenues to simply make the debt payments.  Only one meeting was allowed for Public input during these two proposals even though the Public owns the property.  

There has been a lack of participation by the Public and FANS of the OC Fairgrounds is providing a channel for Public input. 

Let's Crowdsource: Tell Us How You Want to Use the OC Fairgrounds (OCFEC)

Friends and Neighbors of the OC Fairgrounds (FANS of the OC Fairgrounds) is crowdsourcing how the OC Fairgrounds (OCFEC) can be used in the future to better serve the needs of the Public who own the property.  We want to know your vision of how the OC Fairgrounds (OCFEC) should be used in 5 years (2023), 10 years (2028) and 15 years (2033). Here are some questions to get your ideas going:

• What works well and what needs to be improved?  
• Are there activities which should be expanded or shrunk?
• Are new activities needed and what are those activities?
• How can the OC Fairgrounds (OCFEC) better serve the community?
• The property is supposed to serve the needs of all of Orange County. What are those needs and how can those needs be addressed? 

Ideas which are submitted will be posted and the Public allowed to review and comment on the ideas. During the Master Site Plan process during late 2018, these ideas will be brought forward to show how the Public wants to use the OC Fairgrounds (OCFEC.)  Any member of the Public can submit ideas.  We ask that submissions be no longer than 6 US letter sized pages with all pages in PDF format. 

How to Submit Your Ideas

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

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 [email protected]
Vice Chair Robert Ruiz [email protected]
Newton Pham [email protected]
Sandra Cervantes [email protected]
Stan Tkaczyk [email protected]
Doug La Belle [email protected]
Gerardo Mouet [email protected]
Ashleigh Aitken [email protected]
Nick Berardino [email protected]

Contact CEO Kathy Kramer [email protected]

Contact VP of Operations Ken Karns  [email protected]

Contact the Governor's Appointments Secretary Mona Pasquil Rogers at [email protected] 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 [email protected]

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

F&E Branch Chief John Quiroz 916-900-5025 [email protected]