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Receive a verbal update on the status of the Solano County Fair Governance Subcommittee comprised of Supervisors Monica Brown and Skip Thomson; Receive a presentation from the Fair Manager; Receive comments from the County Auditor/Controller and County Administrator’s Office Staff; Consider the recommendations of the subcommittee; and Consider directing staff to issue a Request for Proposals for Management and Operation services for the Fairgrounds
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Published Notice Required? Yes ____ No _X _
Public Hearing Required? Yes ____ No _X _
DEPARTMENTAL RECOMMENDATION:
The Fair Governance Subcommittee recommends that the Board of Supervisors:
1. Receive a verbal update on the status of the Solano County Fair Governance Subcommittee comprised of Supervisors Monica Brown and Skip Thomson;
2. Receive a presentation from Fair Manager Mike Ioakimedes including proposed revisions to By-Laws and governance structure;
3. Receive comments from Auditor/Controller on Audit status and revised Fair Business Plan;
4. Receive comments from County Administrator’s Office Staff;
5. Consider the following recommendations from the Subcommittee:
a. Allow the current Fair Management and Operations Agreement (Agreement) to expire on January 31, 2020;
b. Direct the establishment of a new management agreement with the Fair Association to only deliver the annual County Fair and Ag Day Event;
c. Direct County Administrator’s Office (CAO) and General Services staff to work with the Fair Association to develop a transition plan for delivery of year-round events and the Management and Operations of the Fairgrounds; and
d. Affirm that the work and purpose of the Fair Governance Subcommittee has concluded;
6. Consider issuing a Request for Proposals for Management Services for operation and maintenance of Fairgrounds site and structures including interim events management effective no later than February 1, 2020.
SUMMARY:
At the February 6, 2018 Board of Supervisor’s meeting, the Board appointed Supervisor Monica Brown and Supervisor Skip Thomson to the Fair Governance Subcommittee (Subcommittee) to meet with Directors of the Solano County Fair Association (SCFA) to address concerns raised by the SCFA; to discuss revisions, clarifications and modifications to the SCFA By-Laws and the Fairgrounds Management and Operations Agreement; and to report back to the Board of Supervisors on recommendations on how to proceed going forward with the Fair. The SCFA Board of Directors appointed Directors Carole Paterson, Norma Placido, Mike Coakley, Ray Simonds and Lee Williams to the Subcommittee. Directors Mike Coakley and Ray Simonds have resigned from the SCFA and no longer serve the Subcommittee. Director Norma Placido who replaced Mike Coakley on the Subcommittee is currently on a leave of absence.
At the January 8, 2019 Board of Supervisor’s meeting, the subcommittee members provided a verbal update and received comments from the Fair Association and the public. Based on this input, the Board requested that the subcommittee hold one more subcommittee meeting to discuss final recommendations and bring back to the Board on February 5, 2019.
On January 14, 2019, the two Board subcommittee members and two remaining Fair Directors, Carole Paterson and Lee Williams, met to discuss the recommendations presented to the Board on January 8, 2019 and status of key Fair items reviewed by the subcommittee which included the Fair Strategic Plan, the 2017/2018 Audit, the Fair’s Business Plan, Fair Association By-Laws and the Management and Operations Agreement between the County and the Fair Association. The results of this discussion will be detailed below.
FINANCIAL IMPACT:
The Subcommittee utilizes staff from Fairgrounds Management (Fair) and staff from the County Administrator’s Office (CAO) to assist with meetings and coordination of documents and all costs are covered within the existing operating budgets for the Fair and CAO. On November 6, 2018, the Board received the Audit Report of the Solano County Fair for the years ended December 31, 2017 & 2016.
DISCUSSION:
To date, the Fair Governance Subcommittee has met six times (March 16, May 9, August 29, October 16, December 3, 2018 and on January 14, 2019) since February 2018 (Agendas Attachment A). The meetings have alternated between County and Fairground locations with each party presenting items for discussion and the Subcommittee working through items with the goal of presenting final recommendations to the Board of Supervisors. At the December 3, 2018 meeting, the new Fair Executive Director, Mike Ioakimedes, presented a preliminary business plan on behalf of the Fair Association that outlines a proposed new business model based on input generated as part of the 2018 Audit performed by the County Auditor’s Office and input from the Fair Governance Subcommittee (See attachments and links). Mike Ioakimedes indicated that there are still more questions than answers and was still working on revenue and expenditure calculations by defined cost centers.
Per the Board of Supervisor’s request that another Subcommittee meeting be held, the Subcommittee meet on January 14, 2019 to discuss the recommendations to: not extend the current Management and Operations Agreement; to transition the Fair Association to delivery of the annual County Fair and possibly the annual Ag Day only, and provide final comments on the Fair Strategic Plan, the 2017/18 Audit, Fair Business Plan, Fair revised By-Laws and Management and Operations Agreement.
Recommendation to allow current Agreement to Expire on January 31, 2020:
Supervisors Brown and Thomson indicated that their recommendation to allow the agreement to expire was based upon the current state of Fair Association Finances which has not addressed the costs of operating and maintaining Fair structures, development of cost center tracking of Fair operations, the depletion of Fair cash reserves since 2000, failure to address past pension liabilities and strategies to decrease dependence on County contributions to the Fair through ground lease revenues and .33 revenue pass throughs.
The Fair Association requested the opportunity to update their new business plan to address some of these items. The Fair was instructed to provide a revised business plan by January 25, 2019 that outlines their proposed plan to operate and maintain the Fairgrounds and an option where the Fair Association provided only an annual County Fair and Ag Day.
The County received the revised business plan on January 25, 2019, but it did not include the option for the Fair Association only providing the County Fair and Ag Day.
Transition of Fair Association to Deliver only the Annual County Fair and Ag Day:
Supervisors Brown and Thomson indicated that their recommendation was for the Fair Association to return to their true mission of delivery of the Annual County Fair without the burden of having to maintain and operate the entire Fairgrounds site for the entire year. This recommendation was based upon the deficiencies within the Fair Association funding and the current poor state of existing Fairgrounds structures, most of which are beyond useful life and requiring extensive maintenance. This model of operation was to be included as an option within the revised Fair Business Plan but was not included in the final submittal from the Fair. The Fair Association did not indicate if they would be willing to accept this form of agreement. This option would require that the County provide some funding, which could come from a combination of site generated revenue and with revenues and fundraising dollars generated by the events, in order for the Fair Association to deliver the Annual County Fair and Ag Day.
Management and Operations Agreement (Attachment B):
The current management and operations agreement between the County Board of Supervisors and the SCFA provides that the Fair Association is responsible for maintenance and operations of the entire Fairgrounds including interim facility events and delivery of the Annual County Fair and Ag Day. Supervisors Brown and Thomson are recommending that there be a new agreement with the Fair Association (or other designated non-profit organization) to be responsible for only the delivery of the Annual County Fair and Ag Day for the reasons listed above and that the County work to transition to another party (either County staff or outside organization or combination of both) to be responsible for maintenance and operation of the County’s Fairgrounds and designated Fair Structures.
Strategic Plan (Attachment J):
The County provided $5,000 for the Fair Association to hold and develop a Strategic Plan. The workshop was held on July 27-28, 2018 and resulted in 4 goals which the Fair Association indicated they had completed. Supervisor Brown and Thomson’s indications that this was a good start but did not provide a plan beyond one year and does not address dealing with fiscal and facility deficiencies. The Fair Association indicated that they would like to hold another Strategic Planning session in the future.
2016/17 Audit and Management Memos (Attachment G, H & I):
Supervisor Brown and Thomson indicated that the key concerns for them regarding the Audit were the depletion of cash reserves, the lack of cost center tracking and the exposure from pension liabilities. The Fair Association indicated that they are working on cost center tracking and have allocated money to address pension liabilities within their revised business plan and their proposed CY2019 Budget. The Auditor will continue to monitor the findings of the Audit.
Business Plan and Revisions (Attachments E & F):
As discussed previously, the Fair Association provided an updated Business Plan and budget to the Governance Committee that outlines continued management and operation of the Fairgrounds site and delivery of annual Fair Events (County Fair and Ag Day). It includes allocations to address pension liabilities and capital improvement/maintenance. Supervisors Brown and Thomson asked that the County Auditor/Controller evaluate and provide comments regarding both the original and revised Business Plan and budget. They also questioned what the basis of increased revenues are, how the values were determined and if they are sufficient, specifically with regards to Capital Improvements because there was little or no supporting data to backup information on the anticipated costs for maintenance/improvements or a facilities assessment to establish a baseline cost provided.
By-Laws (Attachments C & D):
The current Fair Association By-laws were last amended, presented and affirmed to the Board of Supervisors in February 2015. Through the discussions of the Fair Governance Committee, the Fair Association has proposed modifications to the By-Laws to address comments regarding numbers of directors, recommended term, vacancies and committees. The Fair Board is recommending (attached) going from 15 to 11 Directors serving up to 2 consecutive four-year terms (down from 3 consecutive four-year terms). In addition: they propose time restrictions for the appointment of vacancies and seek the ability to allow non-SCFA Board members to chair committees to help increase resident participation in the Fair.
Next Steps:
Assuming the Board concurs with the Subcommittee’s recommendations, the following next steps will need occur:
1. CAO staff in conjunction with County General Services staff would prepare a solicitation of a Request for Proposal for Management Services for operation and maintenance of Fairgrounds site and structures including interim events scheduling and management that will provide adequate overlap to ensure smooth transition and operation of the Fairgrounds
2. CAO, County Counsel and General Services would work with Fair Association and staff to establish a new agreement with the Fair Association or solicit another non-profit to deliver the Annual County Fair and Ag Day.
ALTERNATIVES:
1. The Board could choose to not receive this status update but would miss an opportunity to receive information regarding the efforts and progress achieved by the Fair Governance Subcommittee.
2. The Board can accept and approve some of the subcommittee recommendations.
3. The Board could take no action on the current Fair Association Management Agreement, allow the agreement to expire on January 31, 2020 and direct staff to bring back an initial transition plan, timeline and budget within 60 days.
4. The Board could choose to request additional information and continue to a future date certain.
OTHER AGENCY INVOLVEMENT:
County Counsel has provided input and guidance on the status and substance of the current By-Laws and Management and Operation Agreement for the Solano County Fairgrounds and could assist with modifications and revisions to the By-Laws and Management and Operations Agreement. A subcommittee of the Fair Association Board of Directors and fair management staff have participated with the County’s subcommittee in six meetings that involved discussions, presentations and exchanges of information regarding the fair management agreement.
CAO RECOMMENDATION:
APPROVE DEPARTMENTAL RECOMMENDATION