22ND DISTRICT AGRICULTURAL ASSOCIATION DEL MAR FAIRGROUNDS BOARD OF DIRECTORS MEETING DECEMBER 11, 2012 AGENDA

Those persons wishing to attend the meeting and who may require special accommodations pursuant to the provisions of the Americans with Disabilities Act are requested to contact the office of the General Manager, (858) 755-1161, at least five working days prior to the meeting to insure the proper arrangements can be made.

Items listed on this Agenda may be considered in any order, at the discretion of the chairperson.

This Agenda, and all notices required by the California Bagley-Keene Open Meeting Act, are available on the Internet at: lArww•delmarfairgrounds.com

I. CALL TO ORDER - PRESIDENT DAY

CONSENT CALENDAR

The items on the Consent Calendar will be enacted in accordance with recommended action under one motion unless trailed from the Consent Calendar by the Board. Any member wishing to trail an item from the Consent Calendar should notify the General Manager prior to the meeting. Trailed items will be considered after the motion to approve the Consent Calendar. Page: A. Minutes, Regular Meeting, November 20, 2012 1-4 B. Out of State Travel 5 C. 2013 Del Mar National Horse Show Judges Agreements 6 D. Contract Approvals 7 E. Delegation of Authority, Contracts 8

MANAGER'S REPORT

The Board may take approval action on the Manager's Report:

A. 22nd DAA Employee Recognition (Informational) 9 B. Valitar Update (Informational/Action) 9 C. Events Reports (Informational) 10-12 D. 34th District Agricultural Association/Modoc County Fair (Informational/Action) 13-21 E. Other (Informational/Action Item)

IV. COMMITTEE REPORTS

The Board may take approval action on Committee Reports and New Committee Assignments:

A. Fair Operations Committee - Frederick Schenk, Chair

1. Committee Report (Informational) 22 2. International Association of Fairs & Expositions (IAFE) Awards (Informational) 23-24 3. 2013 San Diego County Fair Grandstand Entertainment Contracts (Action Item) 25 B. Land Use/Environmental/Master Plan Committee - David Watson, Chair

1. Consent Orders Update (Informational) 22 2. Phase I South Overflow Lot Restoration Plan Approval (Informational) 22

C. DMTC Liaison/Satellite Wagering Committee - Frederick Schenk, Chair

1. Satellite Wagering/Horse Racing Report (Informational) 26-27 2. Mini Satellite Wagering Update (Informational/Action) 28

D. Community Relations Committee - David Watson, Chair

1. Meeting with Representatives from Del Mar & Solana Beach (Informational) 29

E. Contracts/Food & Beverage Committee - Lisa Barkett, Chair

1. Committee Report (Informational) 29 2. Premier P & L Statement - October 2012 (Informational) 30

F. Budget/Personnel/Employee Compensation Committee - Adam Day, Chair

1. Employee Compensation (Informational/Action) 29

V. PUBLIC COMMENT - Speakers are requested to sign in prior to the start of the meeting and are limited to three minutes. Speaker's time may be modified based on the # of public speakers. Public comment is allowed on issues NOT on the current Agenda. However, no debate by the Board shall be permitted on such public comments and no action will be taken on such public comment items at this time, as law requires formal public notice prior to any action on a docket item. Comments will be accepted on Agenda items during the meeting. Speakers wishing to address the Board on items on the agenda are requested to sign in prior to the start of the meeting and identify the agenda item(s) on which you desire to address the Board.

VI. DIRECTORS REQUESTS

A. Board Communication - Letters Received/Sent (Informational/Action) 31

VII. CLOSED EXECUTIVE SESSIONS (NOT OPEN TO THE PUBLIC)

A. Pursuant to the authority of Government Code section 11126(a), (b), and (e), the Board of Directors will meet in closed executive sessions. The purpose of these executive sessions is:

1. To confer with and receive advice from legal counsel regarding potential litigation involving the 22nd District Agricultural Association. Based on existing facts and circumstances, there is significant exposure to litigation against the 22nd District Agricultural Association.

2. To confer with and receive advice from legal counsel regarding potential litigation involving the 22nd District Agricultural Association. Based on existing facts and circumstances, the Board of Directors will decide whether to initiate litigation.

3. To confer with counsel, discuss, and consider the following pending litigation to which the 22nd District Agricultural Association is a party: VII. CLOSED EXECUTIVE SESSIONS NOT OPEN TO THE PUBLIC - continued

a. City of Solana Beach, et al. v. 22nd District Agricultural Association, San Diego Superior Court Case No. 37-2011-00091464-CO-WM-CTL b. Sierra Club v. 22nd District Agricultural Association, San Diego Superior Court Case No. 37-2011-00091507-CU-TT-CTL

VIII. RECONVENE TO OPEN SESSION

A. Report on actions, if any, taken by the Board in closed executive session.

IX. DIRECTORS CLOSING COMMENTS

X. FOR YOUR INFORMATION

A. 22nd DAA Financial Statements 32-33 B. Satellite Wagering Operating Statement 34 C. RTA & RUC Financial Reports 35-37

XI. ADJOURNMENT CONSENT CALENDAR 22 1 Board of Directors Meeting D Del Mar Fairgrounds I November 20, 2012 S T MINUTES SUBJECT TO BOARD APPROVAL R The regularly scheduled monthlyI board meeting of the 22 'Board District of Directors, Agricultural met inC the Boardroom at the Del Mar Fairgrounds on November 20, 2012 at 1:30 p.m. AssociationT OFFICERS PRESENT: (22' A Adam1 Day, PresidentDAA)G Frederick Schenk, Vice President R Tim Fennell, Manager, Secretary-Treasurer I DIRECTORS PRESENT: C Lisa Barkett, Ruben Barrales,U David Lizerbram, Russ Penniman, Stephen Shewmaker, David Watson L OTHERS PRESENT: T Deborah Fletcher, Deputy Attorney General U Hayley Peterson, Deputy Attorney General Becky Bartling, Deputy GeneralR Manager Rita Walz, Chief Financial OfficerA — 22 Sherrynd DAA Piper, Executive AssistantL — 22n d DAA A CALL TO ORDER S President Adam Day calledS the meeting to order at 1:30 p.m. with a quorum present. CLOSED EXECUTIVE SESSIONO C The Board adjourned into Iexecutive session at 1:33 p.m. A RECONVENE TO OPEN SESSIONT I The regular meeting resumedO at 2:03 p.m. President Day reported on discussions with legal counsel regarding pending litigation with the Attorney General. He announced the Board unanimously approved the final settlement agreementN between the Cities of Del Mar, Solana Beach, the San Dieguito River Park JPA and the 22 ndsigned by all four entities and subject to format changes. District CONSENT CALENDAR Agricu ltural AssoDirector Russ Penniman moved to approve items A through C of the Consent Calendar. A. Minutes, Regular Meeting, October 9, 2012 ciatB. Out of State Travel ion.C. Contract Approvals TDirector Ruben Barrales seconded the motion, all were in favor and the motion carried. h eMANAGER'S REPORT fi "25n Years of Service" Marka Pasko, Maintenance Worker was awarded his 25 year service pin by General Manager, Tim Fennell. l ag re em en t w i l l b e c o m e p u b l i c w h e n i t i s 22 ndNovember 20, 2012 DPage two of four A A MANAGER'S REPORT continued B o Events Report a General Manager Tim Fennell reviewed the events scheduled for November and December, 2012 as listed r on pages 8 through 11 of the board packet. Facility rental revenues for nine months ending September 30,d 2012 are up 16.9 percent or almost $420,000 as compared to the same time period last year. M Sane Diego Ag in the Classroom Teacher Resource Fair Katiee Phillips, Exhibits Manager, provided an overview of the Resource Fair event hosted by the District fort the Foundation for San Diego Agriculture in the Classroom. Ag in the Classroom raises money to help elementaryi school teachers to incorporate agriculture into their curriculums. Elementary School teachers fromn all over San Diego County were invited to participate. g ScreamM Zone Report Generali Manager Tim Fennell reported the Scream Zone was very successful although slightly down in attendance and revenue. Deputy General Manager Becky Bartling acknowledged the team for going n above and beyond in their efforts toward this event despite the challenges of gas prices and no excess mediau due to the elections. t Holidaye of Lights Lindas Zweig, Information Officer, reported on the upcoming Holiday of Lights starting up on Thanksgiving Day; it's the fourth year for the Holiday Hayride offered on the first four Fridays with the new 17 Hands Cantina open those nights.

2013 Proposed Board Meeting Dates Director Ruben Barrales moved to approve the 2013 Board meeting dates as listed on page 16 of the board packet. Director Russ Penniman seconded the motion, all were in favor and the motion adopted.

COMMITTEE REPORTS

FAIR OPERATIONS — Frederick Schenk, Chair

Vice-President Schenk reported he and a few staff will attend the International Associations of Fairs and Expositions (IAFE) Conference in Las Vegas soon to begin the process of meeting with talent agencies to discuss entertainment options for the 2013 summer.

2013 San Diego County Fair Grandstand Entertainment Contracts Director Lisa Barkett moved to approve the confirmed grandstand act Steve Miller Band on June 15 on page 18 of the board packet. Director Ruben Barrales seconded the motion, all were in favor and the motion carried unanimously.

Land Use/Environmental/Master Plan Committee — David Watson, Chair

Consent Orders Update Senior Environmental Planner Dustin Fuller stated we've submitted the buffer restoration plan, riprap restoration plan and the south overflow lot restoration plan in September. We received some comments back from staff on the riprap and buffer restoration plans and have responded back to them. There is no deadline that has occurred since the September submittal; the next one is due in March. 22 ndNovember 20, 2012 DPage three of four A A ConsentB Order Update Continued oDirector Watson reported that staff attended a recent Coastal Commission hearing where the phase one aplan for the restoration of the south overflow lot restoration was approved by the Commission unanimously. The consent orders are phase two. r d Presentation by the San Diego County Water Authority PresidentM Adam Day introduced Dennis Cushman, Assistant Manager of the San Diego County Water Authoritye who proceeded with a presentation update on water transportation cost issues relating to San Diegoe County's water supply, particularly the rate litigation against the Metropolitan Water District and wouldt appreciate the Board's support for their efforts to protect the rate-payers of this region. Director Watsoni made a motion to approve the proposed resolution, subject to minor edits, Director Lizerbram secondedn the motion, all were in favor and the motion carried unanimously. g DMTCM LIAISON/SURFSIDE RACE PLACE - Frederick Schenk, Chair i Surfsiden Racing Report George Bradvica, Surfside Race Place Manager, explained that October numbers are down due to not u having the Breeder's Cup in October this year. November numbers will be better than last year due to t the Breeder's Cup being held in November which resulted in a boost of $1,050,000 in handle. Therefore, e if you take the Breeder's Cup numbers out of the equation October is on par with last year. George addeds that there will be about 32 Handicapping Tournament qualifiers sent to Las Vegas in January.

2012 DMTC Race Meet Update President/CEO Joe Harper, Del Mar Thoroughbred Club, provided a power point presentation and gave an overview of the Del Mar Thoroughbred Club and a little history on the Race Track Leasing Commission & Race Track Authority as previously requested by the board. Mr. Harper also mentioned the upcoming turf course renovation project which will enable the increase of the number of horses racing, as well as make the track safer for the horses and their riders. There have also been discussions of a possible fall meet.

COMMUNITY RELATIONS - David Watson, Chair

Director David Watson reported that he, General Manager/CEO, Tim Fennell and COO, Becky Battling met with representatives from the cities of Del Mar and Solana Beach. Both sides are happy with the settlement agreement, approved by their counsels and were hopeful that the Board would be as well. Another topic of discussion was the shuttle system in place for the fair. Director Watson reiterated to the representatives they would have to get their business communities active and engaged early next year to improve and increase the ridership to make the program more cost effective. The cities were overall supportive of the County Supervisors' approval of discussions about a possible new JPA. The cities would like to know how it's going to work and then have some input into it.

CONTRACTS/FOOD & BEVERAGE - Lisa Barkett, Chair

Committee Report Director Lisa Barkett referred to page 31 of the Board packet. The September Food & beverage revenues, even though down a little from last year, they still averaged about $500,000 per day. Director Barkett also was happy to report that there has been a 10 0 /0 growth each year. '2) 22 ndNovember 20, 2012 DPage four of four M B oBudoet/Personnel/Emolovee Compensation — Adam Day, Chair a 2013 Budget Approval r General Manager Tim Fennell gave an overview of the 2013 budget. Director Ruben Barrales moved to approved the proposed 2013 budget, Director Russ Penniman seconded the motion, and all were in favor andM the motion carried. e Employeee Compensation Presidentt Adam Day said there is nothing new to report at this time. i Newn Governance Models Basedg on prior board approval President Adam Day reported he and CEO Tim Fennell are continuing discussionsM with the governor and the CDFA. The governor's office expressed an interest in the County Boardi of Supervisors taking part in a partnership with us. In the past few weeks the Board of Supervisors did approve having further dialogue with the District and the governor's office on potential n new governance models; forming a JPA may be a viable option. A meeting is planned in Sacramento u with the governor, secretary of CDFA and county supervisors for further discussions in early December andt will report on the progress at the next meeting. e PUBLICs COMMENT

• Tom Hetherington spoke to the board on behalf of the community on his concern about the concerts held during the Races. He would like to see eliminating minors under the age of 18 from the concerts and give consideration to the type of music chosen. • Barbara Gordon, San Dieguito Alliance, applauds the Fair Board for making the decision in making the 2013 Fair smoke-free and continued efforts affecting young adults. • Dean Scott, Community resident, indicated his hope the Smoke-Free Committee, formed three years ago, will reconvene in January 2013. • Judi Strang, Tobacco Free Communities Coalition, informed the Board about a new website called "BeTobaccoFree.gov" and she was very thankful that the 2013 Fair is tobacco free.

DIRECTORS CLOSING COMMENTS

There were no closing comments.

ADJOURNMENT

There being no further business to discuss, the meeting adjourned at 3:48 p.m.

Timo 3 nnell Se /Treasurer — 12/03/12 2 d P A Board meeting OUT OF STATE TRAVEL

Management requests Board approval on the following out of state travel:

Surfside Race Place Manager George Bradvica, will be traveling to the National Handicapping Championship (NHC), January 24 — 26, 2013 in Las Vegas, Nevada to represent Surfside expecting to send 32 qualifiers.

Box Office Assistant Mary Kelly plans to attend the Annual International Ticketing Association Conference, January 29 — 31, 2013 in Lake Buena Vista, Florida. 2013 DEL MAR NATIONAL HORSE SHOW JUDGES AGREEMENTS

Staff is requesting Board approval of the following 2013 Del Mar National Horse Show Judge Agreements:

Name Event Judging Contract Amount Joan McCartney Dressage $2,100 Jane Weatherwax Dressage $2,100 Stephen Clark Dressage $2,400 Janet Curtis Dressage $1,575 Cindy Canace Dressage $2,200 Paula Lacy Dressage $1,575 Natalie Lamping Dressage $2,200 Leif Tombald Dressage $2,200 CONTRACT APPROVAL(S) December 2012

In accordance with the requirements of the Department to Food & Agricultural, Division of Fairs & Expositions, Staff requests approval of the agreement(s) listed below:

Standard Agreements

Contract # Contractor Purpose Tferm i Amount Software Consulting and Technical Support Services for 12-261/23 Pacific Data Marketing 7/30/12 — 9/30/13 $70,000.00 Human Resources/Payroll Department 2013 DELEGATION OF AUTHORITY

22 n In accordance with compliance regulationsd and requirements of the Division of Fairs & Expositions, Department of Food & Agriculture, StaffD requests authorization from the 22' DAA Board of Directors for the Secretary-Manager, Timothy J. Fennell,i or the Secretary-Manager's designee; Becky Baffling to execute Rental/Lease Agreements, Interagencys Agreements, and Standard Agreements up to $50,000 without further authorization from the Board of Directors.t This delegation of authority is issued annually and the term is from January 1, 2013, through December r31, 2013. i c t A g r i c u l t u r a l A s s o c i a t i o n MANAGER'S REPORT MANAGER'S REPORT

A. 22n d Informational: Management would like to recognize the following employees: DA A Jim Pedroza - Jim was also hired as Fairground Attendant in November, 1987, was Empromoted to Maintenance Worker in 1990 to his current position as Senior plMaintenance Worker in 1991. Jim leads a crew responsible for set up, operations oyand cleanliness of hundreds of events held throughout the year in our exhibit halls eeand grounds. When it comes to events Jim and his team know how to "get it done, R make it easy, make it safe and make it memorable" for all of our guests. Jim is also ecfamous for supervising the Fair-time janitorial graveyard shift and making the o fairgrounds sparkling clean in time for the next day's fair opening. g niJose Bojorquez was hired as a Carpenter I on December 18, 1992 and promoted to tiCarpenter II in 2006. He likes to be called "Ricardo" and his supervisor likes to call o him "Skilled, Reliable, Dependable, Knowledgeable, Helpful, Self-starting and always n on top of the task at hand". Ricardo enjoys his work and it shows. When people come into the carpentry shop looking for assistance he is there with tools in hand ready to cut, fix and build. From setting up for the Fair to building Scream Zone hay wagons to putting wood antlers on Trams for the Holiday of lights, Ricardo can be counted on to make it happen. We wish Ricardo the best when he retires the end of this month.

Lead Guard David Tatum will be receiving an exemplary performance commendation acknowledging his performance in responding to a fire at the Horsepark facility.

B. Valitar Update Informational/Action: Staff will provide a verbal update.

C. Events Report Informational: CEO Tim Fennell will review the event schedules for the months of December 2012 & January 2013 (refer to attached event schedules, pages 10 - 12).

D. 34th District Agricultural Association/Modoc County Fair Informational/Action: a. The 34th District Agricultural Association (Modoc County Fair) is requesting $100,000 for the year 2013 to help supplement their annual budget and to assist in start-up costs for a new revenue producing plan. Dannette De Paul, the CEO of the 34th DAA, will be making a presentation and Diana Paluszak, Resource Coordinator for the Division of Fairs & Expositions, will also be attending (see attached information, pages 13 - 19). b. The Mark & Jessie Milano Foundation (a Delaware incorporated private foundation) is prepared to make a $50,000 grant to the 34th District Agricultural Association contingent upon a matching two-for-one gift of $100,000 from the 22nd District Agricultural Association (see attached, pages 20 - 21). EVENTS DEPARTMENT December 2012

DATE: EVENTS: CONTRACT VENUE: AMOUNT:

22-12/21 Purdy Tree Farms, LLC. (Revenue listed in Nov. Main Parking Lot Christmas Tree Sales $12,000.00)

23-12/22 Pinery Christmas Trees, Inc. (Revenue listed in Nov. Big Dirt Parking Lot Christmas Tree Sale $11,000.00)

11/30-12/09 Jingle Bell S 10,051.00 Horsepark Horse Show Est. stall: $ 24,945.00

1 I /22-1/1 Holiday of Lights (District sponsored) Infield Christmas Light Show

1-2 Train Expo, Inc. 7,500.00 Pat O'Brien Train Show

5 Kaiser Permanente 3,000.00 Mission Tower, Paddock MD Quartlery Meeting

6 The Jewish Federation of S.D. County 3,230.00 Activity Center, Directors Dining Men's Event

7 Scripps Green Hospital S 400.00 Directors Dining Room Holiday Party

7 Solekai Systems 1,300.00 Equus Room Holiday Party

8 Aztec Components, Inc. 5 1,100.00 Directors Dining Holiday Party

8 Cabrillo Credit Union 5 1,100.00 Equus Room Holiday Party

8 Laborers' International Union S 3,500.00 Mission Tower Holiday Retirement Party

8 Mira Costa College 700.00 Native Diver Skybox Holiday Party

8 Jackson Design & Remodeling 1,200.00 Seabiscuit Holiday Party

8 Hoenecke, Barbara 1,000.00 Turf Club Scripps Clinic Holiday Party

8 S.D. Derby Dolls 3,600.00 Wyland Roller Derby Bout

Page 1 EVENTS DEPARTMENT December 2012

DATE: EVENTS: CONTRACT VENUE: AMOUNT: 8-9 B&L Productions, Inc. $ 10,030.00 Pat O'Brien Gun Show

10 San Diego Horticultural Society 450.00 Lower GA Meeting

11-12 Apex Performance, Inc. 6,000.00 Mission Tower Auto Research

13 Del Mar Rotary Club 400.00 Turf Club Holiday Party

14-16 Community Resource Center (District sponsored) Hacienda Room, W. Grandstand Holiday Basket Drive

15 EMN Defense Service 425.00 Native Diver Skybox Holiday Party

15 Thermo Fisher Scientific 1,100.00 Directors Dining Room Holiday Party

15 Transit America 650.00 Equus Room Holiday Party

15 Communications Test Design 1,200.00 Seabiscuit Skybox Holiday Party

17 The Jammer Foundation 1,105.00 Equus Room Holiday Party

18 General Instrument, Corp. 900.00 Sports Club & Furlong Holiday Luncheon

2012 27 Events Rental: $59,941 Est. Stall: $24,945 TOTAL: $84,886 2011 29 Events Rental: $85,074 Stall: $27,575 TOTAL: $112,649

Revenues from facility rentals for the 10 months ending October 31, 2012, including base rental fees, reimbursable labor and equipment usage, box office admission, stall rentals, and co-promotion revenues total $4,147,236 as compared to $3,824,902, an increase of $322,334 or 8.43% more than the past year. These figures do not include food & beverage or parking revenues.

Page 2 EVENTS DEPARTMENT January 2013

DATE: EVENTS: CONTRACT VENUE: AMOUNT:

11/22-1/1 Holiday of Lights (District sponsored) Infield Christmas Light Show

12 Pucher, Cathy 850.00 17 Hands Bat Mitzvah

12 San Dieguito Cotillion $ 3,000.00 Mission Tower Cotillion

13 Multisports.com $ 3,600.00 W.lot, Green Lot, Wyland, Walk, Run, Wag 5K Grandstand

18 The Century Club $ 500.00 Mission Tower, Plaza Military Appreciation Luncheon

18-20 Calendar Shows $ 14,300.00 Pat O'brien Antique Show

18-20 Gem Fair, Inc. 10,660.00 Bing Crosby Gem Show

19 S.D. Derby Dolls $ 3,600.00 Wyland Center Roller Derby Bout

26 San Dieguito Cotillion $ 3,000.00 Mission Tower Cotillion

26-27 National Event Management $ 6,800.00 Wyland Center Franchise & Business Expo

26-27 San Diego Cat Fanciers 6,120.00 Exhibit Hall Cat Show

28-29 Apex Performance, Inc. $ 6,000.00 Mission Tower Auto Research

Page 1 MODOC DISTRICT FAIR P.O. Box 26 Cedarville, CA 96104 (530) 279-2315 Office (530) 279-2555 Fax [email protected] email

Dannette DePaul, Manager

November 16, 2012

San Diego County Fair Board of Directors 2260 Jimmy Durante Blvd. Del Mar, CA 92014

Dear Board of Directors:

34 th Modoc District Fair FINANCIALD ASSISTANCE PLAN PROPOSAL i As per the San Diego Countys Board of Directors request October 9, 2012, the following is background information about the 34 theth proposedDistrict scope for additionalt funding and request for financial assistance: Agriculturalr AssociatioHistory of Modoc Districti Fair n, c ModoThe 34 t northeasterlycth corner of California in Cedarville, CA, in the county of Modoc. Surprise Valley, theDistrDis "Valley", includes the Afour (4) unincorporated communities of Fort Bidwell, Lake City, icttricCedarville and Eagleville. gIn addition, the fairgrounds provides services and entertainment for allFait of Modoc County, includingr the communities of Alturas, Likely to the South, Canby, Adin, Bieber, Nubieber, Lookout, Tulelake to the West, Davis Creek and New Pine Creek to the North. rAg i Theanric communities in northern Lassen County, Washoe County, Nevada, and Lake County, dultOregon, are also participantsc of the Modoc District Fair. The area spans approximately 4,203 ursquare miles with an extendedu service area of approximately 4000 square miles. The total populational of Modoc Countyl is 9,747. The "Valley" is a 70-mile long corridor bordered by OregonA to the North, the Warnert Mountain Range on the West, the Nevada Hays Mountain Ranges on the East and the Modoc/Lassen County line to the South. u s Theo fairgrounds, hospital, rclinic, elementary and high schools are located in Cedarville. The economyci is largely agriculture,a e.g., cattle, sheep, commercial alfalfa and hay and small independentlyat owned businesses.l The Warner Mountain Range is timberland that includes a protected wilderness area and the Hayes Mountain Range has several hundred square miles of io A n, M s o s d o o c c i D i a s t t i r o i n c t F a i r , i s l o c a t e d i n t h e m o s t public grazing rangelands. Because of these public owned lands, there are U.S. Forest Service and Bureau of Land Management offices located in Cedarville also. Approximately, 80% of land in Modoc County are owned by Bureau Land Management and U.S. Forest Service.

The only State access road out of the "Valley" is Highway 299 to the West over a 6300' mountain pass over the Warner Mountains. There are no paved roads to the East and the access road to the North and South is a Modoc County owned and maintained road.

The Modoc District Fair has been providing an annual Fair to Modoc County and surrounding areas since 1920. In 1935 the Modoc District Fair became eligible for state funds through horse racing revenues. Horse racing revenues continued to provide funding for California fairs throughout the State until 2008, when funding for Fairs became part of the General Fund. In July 2012 funding for California Fairs through the State of California was completely eliminated.

The fairgrounds consist of 68 acres, approximately 61 acres of which belong to Modoc County and approximately 7 acres to the State of California. Currently, the 34 thAssociation District has a $1, Agricultural 25 year lease for use of the grounds as a Fair with Modoc County that will expire in 2015.

The grounds consist of 2 beef barns (approximately 10,000 sq. ft.), 1 sheep barn (5,000 sq ft), 4 horse stall barns (15,000 sq ft.), arena and corrals (60,000 sq. ft.), Louisville Historical site, concession stands (400 sq ft), Junior Building (4,000 sq ft), 4 Seasons Building (4,750 sq ft includes commercial kitchen), Commercial Building (5,000 sq ft), Dance Hall (5,000 sq ft), Floriculture Building (2,850 sq ft), Agriculture Building (5,000 sq ft), 2 Shop Buildings (5,000 sq ft), Administrative Building (1,302 sq ft.), Rental House (2,000 sq ft) baseball field, tennis court, horseshoe pit area and motorsports dirt race track. The grounds also has 27 RV sites available for public use with water and electric hookups. A dump station is also located on the grounds.

During the fair off season the fairgrounds rents the facilities to non-profit organizations, businesses and individuals for various events including fundraising events, storage, weddings, school activities, fire camps, 4-H and Future Farmer's of America activities, quincinara's, school and family reunions, horse shows, livestock events, Motorsports races, little league, softball, youth soccer, memorial services, field days, blood drives, Public Health Immunization Clinics, CHP and Sheriff's Department training sessions, BLM and Forest Service training sessions, vacation bible school, charter school, livestock shipments and fire camps. Non-profit organizations and youth groups are allowed to waive fees in exchange for volunteer services throughout the year. Fairgrounds are vital to small communities as the facilities are typically used in crisis situations or disaster emergencies as they are capable of utilizing all of their services for food and shelter for both humans and animals. The facilities are also used as cooling centers during extreme heat conditions. The 34 theth evacuationDistrict site for any major disaster that occurs in Modoc County as it has the largest Agriculturalholding capacity in the whole County. Association isOrganizations that routinely utilize the fairgrounds are the Surprise Valley Rotary Club, Surprise currentlValley Chamber of Commerce, Cedarville Volunteer Fire Department, Eagleville Volunteer Fire yDepartment, Lake City Volunteer Fire Department, Fort Bidwell Volunteer Fire Department, Surprise Valley Future Farmers of America, Surprise Valley 4-H Club, Surprise Valley Health Care District, Surprise Valley High School and Elementary School, Surprise Valley VFW, Surprise Valley Electric Corporation, Modoc Forum, Alturas Lion's Club, Alturas Rotary Clubs and many others throughout Modoc County. The U.S. Forest Service and Bureau of Land Management also utilize the fairgrounds for training purposes and fire camp during the fire season.

The Fair office is open Monday through Friday from 8:30 a.m. to 2:30 p.m. The fairgrounds are open 24 hours per day, 7 days per week, to allow utilization for everyone when necessary. Fair staff is limited to one part-time Manager and one full-time Maintenance position. Two part-time assistants are hired during the summer months June through August. During the Fair approximately 12 people are hired during the four days of Fair and 3 livestock coordinators and 1 cleaning person begin the second week of August. Approximately $40,000 is budgeted for Fair entertainment. Operating revenue is not sufficient to fund equipment purchases or building- related projects. With the unexpected increase in fuel prices, there is an unexpected impact to the Budget, as well as, assuming all the debt responsibility that the Division of Fairs and Expositions paid for Fairs. Currently the 34 thdepleted DAA approximately is spring of 2013. The lay off procedure for the two remaining employees runninghas been implemented. on reserveThe District has an outstanding Maintenance Department that is capable of repairing and keeping fundall of our equipment in operable condition. The District also has the storage capacity to house all sof our equipment to keep it in top working condition. The community is very supportive of the anannual fair and fairgrounds. We collect over $25,000 in voluntary contributions for sponsorship dof the annual events held at the fairgrounds. Annually we have over 200 volunteers in the form thoof individuals and non-profit organizations that graciously give their time and energy to assist sewith the livestock shows, still exhibit entries, building attendants, security, upkeep and whatever funit takes to keep the fairgrounds attractive and operable. ds wiLoss of Funding Background ll bFinancial stability for small fairs throughout the State of California is becoming more difficult edue to the elimination of Fair funding from the State of California. Class I small fairs were allocated $199,000 from the State of California, Fairs and Expositions Department annually. In addition, our Fair received approximately $30,000 in supplemental funding from the State of California from the fair rating fund. This amount is supplemented from the interim events held at the fairgrounds; i.e., rental of buildings, the annual Fair and fundraising events sponsored by the Modoc District Fair Board of Directors which generate approximately $130,000. The annual Budget for the 34 thconsistent DAA for revenues during the past 10 years. The District has tried various fundraising isactivities, (i.e., recycling event, cioppino feed, Cattlemen's Benefit Auction, benefit dinners) approxduring the past two years and those events generate from $1,00045,000 in additional revenue. imatelThe District is limited in the ability to generate needed revenue by the current economic crisis, ysparsely populated area, and the frontier rural remote location of our fairgrounds. $35 At5,00 our Board meeting, July 24, 2012, the Modoc County CEO and two members of the Modoc 0.County Board of Supervisors, were invited to attend the meeting to discuss the possibility of FinModoc County taking over operations of the Fair. The idea was met with resistance as the ancCounty is in no financial condition to take on another department as they are currently ial$15,000,000 in debt to the County and working with the State Controllers office to come to an sagreement to fund the debt. The Board of Directors has also discussed the option of non-profit f o r t h e Di st ri ct h a v e b e e n v e r y governance, however, in researching Modoc County non-profit organization fundraising revenues, approximately $30,000 is the most generated by non-profits annually and this is not enough money to fund operations of the District.

At Western Fairs Association and California Fairs Alliance meetings larger fairs and fairs that are operating with profit margins have discussed the idea of adopting a fair, or becoming sister fairs, with the idea of assisting small rural fairs that are in jeopardy of closing, for the short term, to allow the fair network to come up with alternative funding solutions or give the fairs the chance to become entrepreneurial and give them the opportunity to implement revenue generating ideas. The Modoc District Fair, 34 1hSan DiegoDAA, County Fair.would like to Proposedentertain Revenue Scope this Theidea Modoc District Fair is not requesting financial assistance for charity purposes. The reason withfor requesting financial assistance is to give the Fair financial stability in order to research and theimplement revenue generating ideas that will increase revenues for the Fair and allow us to become self sustainable. In order to do that, the Fair must become a revenue generating business which is a new concept for the Fair industry. The following are ideas for revenue generation and estimated revenues. Implementation of these ideas take time to implement and also time to establish customer clientele.

Ideas planned for research and development which utilize the natural resources and exploitation of the history of our area include the following:

Plan Est. Revenue

1. Guided Wagon Train Tours— Contract with a wagon $15,000 train expert who will provide wagons, horses, gear, meals, entertainment, and provide 4-5 tours from spring to fall and re-enact guided 3-4 day tours over historical trails from Nevada over the Lassen trail and Applegate trails which will end at the Fairgrounds.

2. Cattle Drives with Local Ranchers — Local ranchers $ 8,000 have offered to take up to 2 individuals to assist with herding cattle during the spring and fall when driving cattle to pasture in the spring and gathering cattle and bringing them home in the fall.

3. Guided Horseback Tours — Offer guided tours of $20,000 historical sites and majestic sites in Modoc County during the spring, summer and fall.

4. Burning Man Vendor Possibilities — Become a vendor $ 8,000 for Burning Man traffic (approximately 30,000 individuals) offering sales items (i.e., showers, sweatshirts, eccentric items, entertainment, camping, etc.) over the Labor Day weekend.

5. Lodging Stays Combined with Local Activities — Raffles $10,000 featuring donated lodging at popular locations or lodges combined with golfing, squirrel hunts, bird hunts, coyote hunts or activities with local non-profit organization activities. Raffle or auction antique cars, tractors, wagons, etc.

6. Mountain Bicycle Races or Tours — Implement mountain $15,000 bicycle races or tours over mountain passes or high desert plateaus. Implement one race or tour per month during the summer and fall.

7. Rally Site for RV Groups and Motorcycle Groups — $ 7,500 Advertise facilities for RV tours and motorcycle tours and provide lodging and meals.

8. Goodwill Sponsorships — Contact corporate sponsors $Unknown and introduce the concept of goodwill sponsorhips.

TOTAL: $83,500

The above estimates for revenue are very conservative realizing it takes time to implement and build business opportunities.

Project Time Frame

Due to the remote rural location of facilities and the elevation and inclement weather in our area, the window of opportunity for functions and activities at the fairgrounds is from mid May to the middle of October. During the winter months the grounds must be winterized and certain areas of the grounds are not usable during the winter months.

1. Reach out to County Communities seeking 1 Month support and donations, volunteers to implement ideas.

2. Research and obtain permits from Bureau of 3 Months Land Management and U.S. Forest Service, Modoc County and other agencies to implement guided tours.

3. Schedule and Advertise Events 3 Months

4. Hire Qualified Individuals as event guides 2 Months

5. Window of Opportunity for Events (May to October) 5 Months

Total estimated project time from design to implementation 6 Months Budget

Projected Income 2013 Amount

Reserve Funds January I, 2013 $85,000 Rental of Buildings and Grounds (House Rental) $30,000 Fundraising Activities (Cioppino Feed, Electronic Recycling, Merchandise, etc.) $10,000 Sponsorships and Donations $32,000 Grounds Admissions $18,000 Commercial Vendor Concessions/Space, Carnival $20,000 Camping/Horse Stall Rentals $ 4,000 Grounds Entertainment (Exhibit Entries, Derby, Saddle Bronc, etc) $40,000

Subtotal: $239,000

Potential New Business Revenue $83 500

TOTAL REVENUE $322,500

Projected Expenses 2013 Amount

Administration (Salaries, Benefits, Insurance, $138,200 Travel, Supplies, Telephone, Postage, Dues, Audits, Worker's Comp Ins.) Maintenance (Salaries, Benefits, Lights, Heat, $132,900 Water, Power, Equip. Main., Bldg. And Grds. Maint, Trash) Publicity $ 7,000 Attendance (Salaries, Gate Security, Grds Security, Supplies) $ 8,700 Carnival, Fair Trash Removal, Curtains $ 17,300 Premiums/Awards $ 16,000 Exhibit Expense (Salaries, Judges, Supplies, $ 8,200 Tent, Booth Rental) Rancher's Day Event (Salaries, Judge, Announcer, $ 29,200 Supplies, Cattle Fees, Premiums, Awards) Saddle Bronc Event (Promoter, Awards) $ 6,500 Derby Expenses $ 6,000 Sheep Dog Trials $ 1,000 Greased Pig $ 1,800 Grounds Entertainment Expenses $ 2,900 Fundraising Expenses $ 2,000

TOTAL EXPENSES $377,700

Potential New Business Expenses Unknown The above Budget reflects the ability to operate for the entire year of 2013, however, the reality is there are only enough funds in our operating account to run until June 30, 2013. The increase in administrative expenses are due to the absorption of costs of audits and additional insurance expenses. The employee layoff plan has been implemented for the two remaining staff members of the Modoc District Fair. The Division of Fairs and Expositions has been notified that the Modoc District Fair will cease operations by June 30, 2013, due to the elimination of Fair funding and the depletion of all remaining reserve funds.

Request

As reflected in the above Budget the difference between income and expenses is projected at a loss of ($55,200), with the revenue from proposed new revenue sources included. Without the new revenue sources there is a projected loss of ($138,700). In order to implement the new revenue sources the Modoc District Fair will need financial assistance for set up and implementation costs. The Modoc District Fair is proposing a request of $100,000 from the San Diego County Fair for start-up costs for the new proposed revenue plan. There will be associated costs for marketing, staffing, permits, etc. We are requesting your assistance to help us with a new vision and self supporting business venture for small rural fairs.

Summary

As stated above, the Modoc District Fair is not requesting financial assistance from the San Diego County Fair for charity or to continue to operate as fairs have in the past. Initially, when Fair funding was eliminated completely, all Fairs believed there would be legislative action to reinstate fair funding. We all worked with Western Fairs Association and California Fairs Alliance for months to no avail. Then came the realization that Fairs must become self sustainable. Because of our geographic location and rural remoteness, the Modoc District Fair is in a unique situation in that the funding required to operate cannot be generated locally. Therefore, the Modoc District Fair has been exploring all funding alternatives. When the concept of the "Adopt a Fair" or "Sister Fair" was mentioned all Fairs had the opportunity to reach out to the larger profitable fairs to seek financial assistance, for the short term, to allow them the opportunity to implement revenue generating ideas. This concept also allows Fairs to utilize and share the expertise and resources of the larger Fairs that smaller Fairs do not have. The Modoc District Fair is the only Fair in the State of California that took this initiative. The reason the Modoc District Fair is seeking financial assistance from the San Diego County Fair is to give us the additional finances needed in order to implement the proposed revenue generating plan ideas and allow the Fair the time required to generate the projected revenue. The letters of support received indicate the county's support and just how important the survival of our Fair is to the communities of Modoc County. We again, ask for your consideration and hope you will look favorably upon our proposed plan.

Sincerely,

Dannette E. DePaul, CEO Modoc District Fair 34 th D i s t r i c t A g r i c u l t u r a l A s s o c i a t i o n MODOC DISTRICT FAIR P.O. Box 26 Cedarville, CA 96104 (530) 279-2315 Office (530) 279-2555 Fax [email protected] email

Dannette DePaul, Manager

December 6, 2012

San Diego County Fair Board of Directors 2260 Jimmy Durante Blvd. Del Mar, CA 92014

Dear Board of Directors:

34 th Modoc District Fair FINANCIALD ASSISTANCE PLAN PROPOSAL MARKi MILANO LAND & CATTLE COMPANY s The 34 t thMilano Foundation that we would request the San Diego County Fair Board of Directors Disconsider as a second optionr for financial assistance to the Modoc District Fair. tric i tThe proposal is as follows:c "Per the request of Mark Milano, I am writing to confirm that Mark andAg Jessie Milano Foundationt is a Delaware incorporated private foundation and the foundation isric prepared to make a $50,000.00 grant to the 34 111Modocult District District Fair, contingentA upon a matching 2-for-1 gift of $100,000.00 from the San Diego Fair.Agriculturalur Please feel free to contactg me should you require any additional information. Sincerely, AssociationChristineal A. Mayers, Directorr of Client Services, Foundation Source, 55 Walls Drive, Ste. 302, Fairfield,forA CT 06824." i the s c Mr.s Milano contacted me early yesterday morning to see what the status of the Modoc District Fairo financial situation was.u I explained our financial situation and stated that I would be travelingci to San Diego Countyl Fair on Tuesday, December 11, 2012, to make a formal presentationat of our proposalt for revenue generating plans and our request for financial assistance. Mr. Milano stated he had money in his foundation that had to be distributed before December 31, io u 2012,n and he would be willing to assist our fair financially if there was an intent commitment r fromh the San Diego County Fair to match his offer 2 for 1, in the upcoming year, 2013. a a Mr.s Milano owns the Milanol Land & Cattle Company ranch located in Canby, California, Modocj County. His FoundationA has been very generous in supporting community service organizations in Modoc County and other worthy causes. u s s 9,0 t s r o e c c i e a i v t e i d o a n p r o p o s a l t o d a y f r o m t h e M a r k Therefore, I am presenting Mr. Milano's proposal to the San Diego County Fair Board of Directors for consideration. This would be guaranteed financial assistance for the Modoc District Fair and would not be based on the revenue generating plan revenues, however, it is the Modoc District Fair's intention to also pursue these revenue generating ideas discussed in our proposal.

Sincerely,

Dannette E. DePaul, CEO 34 thModoc District Fair D i s t r i c t A g r i c u l t u r a l A s s o c i a t i o n COMMITTEE REPORTS FAIR OPERATIONS COMMITTEE

Vice-President Frederick Schenk, Chair, will provide a review of the following:

1. Committee Report Informational: Staff will provide a verbal update.

2. International Association of Fairs & Expositions (IAFE) Awards Informational: See attached information (pages 23 - 24).

3. 2013 San Diego County Fair Grandstand Entertainment Contracts Action: staff is requesting Board approval of confirmed grandstand entertainment contracts for the 2013 San Diego County Fair (see attached, page 25).

LAND USE/ENVIRONMENTAL/MASTER PLAN COMMITTEE

Director David Watson, Chair, will provide a review of the following:

1. Consent Orders Update Informational: Staff will provide an update.

2. Phase I South Overflow Lot Restoration Plan Approved by California Coastal Commission Informational: Staff is available to answer any questions on this project plan approved by the California Coastal Commission.

DMTC LIAISON/SURFSIDE RACE PLACE COMMITTEE

Vice-President Frederick Schenk, Chair, will provide a review of the following:

1. Satellite Wagering/Horse Racing Report Informational: Refer to attached report (pages 26 - 27).

2. Mini Satellite Wagering Update Informational: Staff will provide a verbal update (see attached information, page 28). 2012 International Association of Fairs and Expositions Agricultural Awards Program

l s t Special or Specific Event for Agricultural Exhibitors- San Diego County Fair Wine Festival P l Overall Program for Commercial Agricultural Vendors a c Video of a Unique Event for Agricultural Exhibitors or the Public- San Diego Floral e Competition A w Green Program a - r HydropConsumer Protection Program d onic- Handwashing s Gardand : Program Designed to Correct and Issue or Problem Related to an Agricultural Program- eninDonDiseas Diego Fundraising for Plant Grow Eat Buses ge 2 EduPreven ' cattion P ionOverallInfor Program for Competitive Agricultural Exhibitors l Prmatio og a Overalln Agricultural Program for the Fairgoing Public c ra m 3e a rA t dw tNon Pa h- lr ePrintedFai Material Produced to Promote Agriculture-Jr. Livestock Auction Posters ad Fr cs aFairAg and Sponsor/Partner Joint Exhibit Program- Eggsplore Egg Exhibit e: rri A mcu w lt a ur r al d E s v : e n t o r P r o g r a m - G a r d e n i n g P r o j e c t w i t h P r e m i e r F o o d S e r v i c e s 2012 International Association of Fairs and Expositions Competitive Exhibit Awards Program

First Place:

Use of Fair's Theme Throughout Competitive Exhibits

Competitive Exhibits Display Photo

General Display Photo

2 n d New or Unique Class of Exhibits- "Out of This World" Jewelry P l Interactive Competitive Exhibits Contest- San Diego Floral Design Competition a c Participatory Fair Contest- Kids Festival Costume Parade and Contest e : Competitive Exhibit Photo Series

General Display Photo Series

3 r d New or Unique Strategy to Increase Competitive Exhibitors- Rack Cards P l Competitive Exhibit Display Method or Prop- Home and Hobby Display Cabinets a c e :

clA 2013 Grandstand Entertainment

Staff requests Board Approval on the following Grandstand entertainment contracts:

Contract# Date: Contract Name Amount Genre 13-1001 Friday June 14, 2013 Switchfoot $60,000 Rock

13-1002 Sunday June 30, 2013 Julion Alvarez $85,000 Latin

13-1003 Monday July 1, 2013 Weird Al $52,500 Singer/ Satirist, parodist

Previously Approved: Steve Miller Band Saturday June 15, 2013 Surfside Race Place Monthly Board Report, November 2012

Details of day signal* handle and attendance figures

2012 2011 Yo Change

No. racing days 22 25 (12)

Surfside Race Place Total Attendance 11,841 11,341 4 Avg. Attendance 538 453 18

15 Southern California satellites Total Attendance Not Available

Surfside Race Place Total Handle 3,646,760 3,373,924 8 Avg. Handle 165,761 134,956 22

15 Southern California satellites Total Handle Not Available

Surfside Race Place Revenue (ADW source) $26,824 $26,123 3

Details of night signal** handle and attendance figures

2012 2011 % Change

No. racing nights 13 15 (13)

Surfside Race Place Total Attendance 1,154 1,295 (10) Avg. Attendance 89 86 3

Total Handle 325,117 255,192 27* Avg. Handle 25,009 17,012 47*

Revenue (ADW source) $5,554 $6,416 (13)

*Harness racing has returned to Cal Expo and the satellite menu after an absence since June. Facility News:

• The Saddle Club membership renewal mailing is in the works for the 2013 season. Member benefits include daily admission, reserved parking area, daily racing program, guest passes to the Saddle Club, San Diego County Fair, Del Mar live meet and more. Memberships and parking passes will be complimentary to Diamond Club members who reach certain wagering qualification levels.

• Surfside's annual Santa Anita calendar giveaway will be held on opening day of the meet, Wednesday, December 26 thAnita's most exciting and colorful race scenes is our gift for all patrons with paid admission. •This A calendar 4-color, is one of the most popular giveaways of the year and is valued at $12.50. full sized • Awall special Del Mar Track History book giveaway and signing with former UT-San Diego turf writer Hank Wesch was held on Sunday, November 25 from 12:00pm — 2:00pm. calen dar • The next qualifying handicapping Tournament for the Daily Racing FormiNTRA National showHandicapping Championship is December 29-30. $15,000 in prizes will be awarded. We expectcasin over 100 contestants from all over the United States to compete. The top five finishers willg be on a plane to Las Vegas for the Handicapping Championship in January, 2013 sorepresenting Team Surfside. These Tournaments are promoted nationwide throughout the year.me o f • BingoSa continues at Surfside on Sundays at 3:00pm, and Mondays and Wednesdays at nt7:00pm. Doors open 2 hours prior to each session. a • Every Sunday during football season, Surfside offers Pro Football Freebie contests for the patrons. Patrons can play each week with prizes totaling $250. The Direct ticket- is shown in the Surfside Sports Lounge in the lower General Admission area as well as otherTVs areasNFL around theSunday facility.

• Surfside's annual Thanksgiving special in the Saddle Club and the Carving Stand offered a delicious meal featuring roast turkey breast with all the fixings on this special holiday race day for patrons. California Mini Satellite System Development

In an effort to widen the distribution of the California horse racing signal at brick-and-mortar sites, the California State Legislature approved the development of up to 45 Mini Satellites in 2007.

Since 1989, satellite wagering on horse racing in California was legislatively approved for race tracks and Fairs only. At that time, there were 23 satellite facilities in California where gamblers could place bets on horse races and then view them live on closed-circuit television. The focus for development of Mini Satellites is with restaurants and sports bars.

Mini satellites, as all satellites, are regulated and licensed by the California Horse Racing Board (CHRB). Depending upon their location, northern or southern California, each Mini Satellite must enter into a contract with Southern California Off-Track Wagering, Inc. (SCOTWinc) or Northern California Off-Track Wagering, Inc. (NCOTWinc), corporate entities established and owned by the racetracks in California for the purpose of hiring and managing mutuel clerks and totalisator equipment. Finally, Mini Satellites must be approved by the local city or jurisdiction.

There are geographic restrictions in certain circumstances. If a prospective restaurant or sports bar is located within a 20-mile radius of an existing racetrack or satellite facility, a waiver must be requested by the applicant, and granted by that existing racetrack or satellite facility.

Presently, there are four Mini Satellites operating in southern California. The cities represented are: San Clemente, Santa Maria, Santa Clarita, and Commerce (near Inglewood).

OC Tavern in San Clemente has been open since December 26, 2010. This Mini Satellite has been very successful. In 2012, they are on-track to handle more than $8M, or an average of $35,000 per day. Prior to the opening of OC Tavern, many customers in south Orange County and Orange County, were regular Surfside players. It is estimated that Surfside losses are 40% of the OC Tavern totals, including admissions, food and beverage, and other revenues from papers and handicapping sheets. However, since OC Tavern is 38 miles from Surfside, it falls outside the boundaries of the 20-mile protection zone for nearby satellites. On an annual basis, forty percent of the OC Tavern handle represents a loss of handle revenue for Surfside of approximately $64,000; loss of admissions to Surfside may be as much as $25,000. Conservatively, Surfside's annual net income losses may exceed $150,000 from all direct revenue and ancillary revenue sources.

Conversely, the addition of a Mini Satellite inside the 20-mile protection zone of Surfside is expected to have a positive effect. With the ability to negotiate a "rights" fee with the Mini Satellite inside our zone, we expect to generate between $100,000 and $150,000 in net annual revenue, with minimal incremental costs. The opening of the Mini Satellite in the Gaslamp Quarter is currently being discussed and if licensed through the CHRB it could potentially open as early as late January 2013. It is anticipated that a contract between the facility and the 22 ndDAA would come before this body at the January board meeting. COMMUNITY RELATIONS COMMITTEE

1. Meeting with Representatives from Del Mar & Solana Beach Informational: Director David Watson, Chair, will provide a verbal report on the meeting held with the Cities' representatives.

CONTRACTS/FOOD & BEVERAGE COMMITTEE

1. Committee Report Informational: Director Lisa Barkett, Chair, will provide a verbal report.

2. Premier P & L Statement - October 2012 Informational: see attached information (page 30).

BUDGET/PERSONNEL/EMPLOYEE COMPENSATION COMMITTEE

President Adam Day, Chair will provide a review of the following:

1. Employee Compensation Informational/Action: A verbal update will be provided. Food & Beverage Report October 2012

October 2012 Food Service Revenues were $318,028. Budgeted Revenues for October were $314,474.

Net distribution to the District for October was ($81,089) or -25.57%. Budgeted distribution for October was ($54,344) or - 1728%.

Yeat-to-date distribution to the District is $5,955,442 or 31.70%. The budgeted distribution for 2012 was $5,429,086 or 31.38%.

2012 2012 2011 % Sep ACTUAL BUDGET ACTUAL - TOTAL REVENUE12 318,028 100.00%1 314,474 100.00%1 314,474 100.00%

'TOTAL COGS 50,985 1 16.03%1 58,989 18.76%1 46,529 1 14.80 ( 1GROSS MARGIN 1 267,043 83.97% I 255,485 8124%I 267,945 I 85.20%Y - 'TOTAL PAYROLL 1 269,919 1 84.87%1 254,564 1 80.95%1 256,111 1 81.44%101

'OPERATING EXPENSES 1 89,798 1 28.24%1 63,028 I 20.04%1 60,024 1 19.09%

'NET PROFIT (92,673)1 -29.14% (62,107)1 -19.75%1 (48,190) -15.32%1

'CLIENT DISTRIBUTION 1 (81,089)1 -25.50%1 (54,344)1 -17.28%1 (41,925)1 -13.33%

2012 2012 2011 YTD ACTUAL BUDGET ACTUAL

1TOTAL REVENUE 18,785,197 100.00% 17,300,198 100.00% 17,386,118 100.00%

'TOTAL COGS 3,650,110 19.43% 3,323,940 19.21% 3,315,543 19.07%

'GROSS MARGIN 15,135,087 80.57% 13,976,258 80.79% 14,070,575 80.93%1

'TOTAL PAYROLL 6,404,893 34.10% 6,045,758 34.95% 6,060,630 34.86%1

'OPERATING EXPENSES 1 1,923,976 10.24% 1,725,831 9.98% 1,658,811 9.54%1

1NET PROFIT 1 6,806,219 36.23% 6,204,669 35.86% 6,351,134 36.53%

1Y-T-D CLIENT DISTRIBUTION 1 5,955,442 31.70% 5,429,086 31.38% 5,525,487 31.78%

CADocuments and Settings\spiperkLocal Settings\Temporary Internet Files\Content.OutlookNPWZA8PUM\Food Beverage RepdrIt/20/1242D 3:09 PM DIRECTORS REQUESTS DIRECTORS REQUESTS

A. Board Communication - Letters Received/Sent Informational/Action: There is nothing to include at this time. FOR YOUR INFORMATION 22nd District Agricultural Association Statement of Operations For the Ten Months Ending October 31, 2012 Unaudited

Actual vs Actual Current Yr Current Yr 2012 2012 Variance Budget Prior vs Prior Yr vs Prior Yr Actual Budget Fav/(Unfav) Var % Year Fav/(Unfav) % Var

Revenues Admissions - Fair $7,098,775 $7.140,852 ($42.077) (0.59%) $6,910,046 $188,729 2.73% Admissions to Concerts $1,054,138 $664,854 $389,284 58.55'Y° $923,417 $130,721 14.16% Carnival Rides $9,082,970 $8,600,000 $482,970 5.62% $8,527,443 $555,527 6.51% Carnival Space Rental $855.091 $620,000 $235,091 37.92% $816,983 $38,108 4.66% Commercial Space $3,154,791 $3,110,800 $43,991 1.41% $3,011,732 $143,059 4.75% Concessions $3,332,622 $3,243,000 $89,622 2.76% $3,079.845 $252,777 8.21% Entry Fees $444,151 $483,000 ($38,849) (8.04%) $450,317 ($6,166) (1.37%) Food & Beverage $18,785,197 $17,300,199 $1,484,998 8.58% $17,386,118 $1,399,079 8.05% Parking $4,370,043 $4,205,840 $164,203 3.90% $4,092,829 $277,214 6.77% Surf & Turf $1,268,272 $1,316,570 ($48,298) (3.67%) $1,275,645 ($7,373) (0.58%) Sponsorships $1,604,980 $1,384,000 $220,980 15.97% $1,414,036 $190,944 13.50% Admissions - NonFair $686,502 $69,593 $616,909 886.45% $735,204 ($48,702) (6.62%) Facility Rentals $3.841,667 $3.538,120 $303,547 8.58% $3,651,833 $189,834 5.20% Reimbursement Costs $1,782,079 $1,486,967 $295,112 19.85% $1,610,015 $172,064 10.69% Admissions - OTB $188,415 $189,033 ($618) (0.33%) $203,260 ($14,845) (7.30%) Track Commissions $630,372 $710,434 (680,062) (11.27%) $719,508 ($89,136) (12.39%) Account Wagering $411,916 $334,904 $77,012 23.00% $393,530 $18,386 4.67% Program Sales $263,932 $263,000 $932 0.35% $272,375 ($8,443) (3.10%) Lottery $98,064 $74,960 $23,104 30.82% $98,397 ($333) (0.34%) Other - OTB $59,543 $52,046 $7,497 14.40% $62,087 ($2,544) (4.10%) Del Mar National Horse Show $941,263 $900,952 $40,311 4.47% $874,780 $66,483 7.60% Merchandise $523,734 $538,765 ($15,031) (2.79%) $556,527 ($32,793) (5.89%) Leases $274,601 $224,280 $50,321 22.44c/0 $264,638 $9,963 3.76% Interest $42,203 $32,000 $10,203 31.88% $38,216 $3,987 10.43% Race Track $500,000 $500,000 $500,000 Other $403,270 $358,579 $44,691 12.46% $443,067 ($39,797) (8.98%)

Total Revenues $61,698,591 $57,342,748 $4,355,843 7.60% $58,311,848 $3,386,743 5.81%

Expenses Payroll Related & Benefits $17,644,250 $17,463,476 ($180,774) (1.04%) $16,421,741 ($1,222,509) (7.44%) Temporary Payroll Services $446,507 $215,250 ($231,257) (107.44%) $330,777 ($115,730) (34.99%) Professional Services $2,260,484 $2,202,467 ($58,017) (2.63%) $2,152,867 ($107,617) (5.00%) Entertainment & Show Expenses $3,262,739 $2,308,300 ($954,439) (41.35%) $2,779,738 ($483,001) (17.38%) Carnival $4,696,086 $4,386,000 ($310,086) (7.07%) $4,381,021 ($315,065) (7.19%) Food & Beverage Expense $12,831,073 $11,871,113 ($959,960) (8.09%) $11,860,631 ($970,442) (8.18%) Advertising $1,304,558 $1,229,750 ($74,808) (6.08%) $1.340,110 $35,552 2.65% Prizes/Premiums $916,051 $905,300 ($10,751) (1.19%) $892.701 ($23,350) (2.62%) Supplies $2,154,495 $2,002,008 ($152,487) (7.62%) $1,930,729 ($223,766) (11.59%) Printing $555,056 $590,497 $35,441 6.00% $535,395 ($19,661) (3.67%) Parking $16,704 $23,000 $6,296 27.37/0 $6,662 ($10,042) (150.74%) Surf & Turf $868.549 $857,971 ($10,578) (1.23%) $817,755 ($50,794) (6.21'/0) Transportation $309,648 $364,500 $54,852 15.05% $189,153 ($120,495) (63.70%) Contract Security & Medical $1,489,446 $1,524,500 $35,054 2.30% $1,317,935 ($171,511) (13.01%) Telephone $111,818 $106,239 ($5,579) (5.25%) $101,575 ($10,243) (10.08%) Utilities $1,689,225 $1,759,824 $70,599 4.01% $1,771,096 $81,871 4.62% Repairs & Maintenance $911,345 $825,952 ($85,393) (10.34%) $788,185 ($123,160) (15.63%) Insurance $832,205 $878,913 $46,708 5.31% $815.540 ($16,665) (2.04%) Equipment Rental $906,325 $1,011,710 $105.385 10.42% $837,583 ($68,742) (8.21%) Other Administration $240,101 $269.506 $29,405 10.91% $226,975 ($13,126) (5.78%) Merchandise $337,690 $289.443 ($48,247) (16.67%) $325,492 ($12,198) (3.75%) Lottery $92,830 $70,000 ($22,830) (32.61Q/0) $93,253 $423 0.45Q/0 Depreciation Expense $1,180.631 $1,187,500 $6,869 0.58% $1,170,446 ($10,185) (0.87%) Other $674.528 $583,594 ($90,934) (15.58%) $532,347 ($142.181) (26.71%)

Total Operating Expenses $55,732,344 $52,926,813 ($2,805,531) (530%) $51,619,707 ($4,112,637) (7.97%)

Net Operating Income $5,966,247 $4,415,935 $1,550,312 35.11% $6,692,141 ($725,894) (1085%)

Pledged Revenue Transferred to RTA $2,163,527 $2,130,517 ($33,010) (1.55%) $2,174,767 $11,240 0.52%

Net Income/(Loss) $3,802,720 $2,285,418 51,517,302 66.39% 54,517,374 ($714,654) (1582%)

**--In addition to the Pledged Revenues, the District also tranferred $671,041 in 2012 to RTA as paid-in-capital. Previous year transfers from the District to RTA as paid-in-capital are as follows: $979,874 in 2011, $1,214,625 million in 2010, $4,656,743 million in 2009, $4,078,631 in 2008, $1 million in 2005, $1 million in 2004, $2 million'in 2003, and $2.5 million in 2002 (Total-to-date of $18.100,914 million). 22nd District Agricultural Association Balance Sheet Unaudited

10/31/12 12/31/11 (Unaudited) (Audited)

ASSETS

Current Assets: Cash & Cash Equivalents $17,487,028 $13,695,847 Restricted Cash 403,633 312,086

Total Cash and Cash Equivalents 17,890,661 14,007,933

Accounts Receivable, Net 650,417 445,162 Prepaid Expenses and Other Current Assets 479,600 398,236

Total Current Assets 19,020,678 14,851,331

Property and Equipment, Net 23,768,582 24,420,337

Total Assets $42,789,260 $39,271,668

LIABILITIES

Current Liabilities: Accounts Payable $897,818 $770,647 Deferred Revenue 266,941 314,234 Accrued Liabilities 1,572,408 1,039,858 Accrued Employee Compensation 1,973,306 1,839,677 Other Current Liabilities 643,427 623,877

Total Current Liabilities 5,353,900 4,588,293

Other Liabilties 173,618 443,837 Due to Other Funds (130,712) (21,236)

Total Liabilities 5,396,806 5,010,894

FUND EQUITY

Contributed Capital 44,222,421 44,222,421 Less Contributed Capital to RTA (18,100,914) (17,429,873) Retained Earnings (Deficit) 7,468,226 4,511,988 Current Year Income/(Loss) 3,802,720 2,956,238

Total Fund Equity 37,392,453 34,260,774

Total Liabilities & Fund Equity $42,789,260 $39,271,668 22nd DAA Satellite Wagering Operating Results For the Ten Months Ending October 31, 2012

Budget 2012 2012 Variance 2011 Variance Actual Budget Favi(Unfav) Actual Favi(Unfav)

Revenue

Track Commissions $630,372 $710,434 ($80,062) $719,508 ($89,136) Admissions 188,415 189,033 (618) 203,260 (14,845) Account Wagering 411,916 334,904 77,012 393,530 18,386 Program Sales 263,932 263,000 932 272,375 (8,443) Merchandise 7,375 7,060 315 6,164 1,211 Lottery 98,064 74,960 23,104 98,397 (333) Other 174,393 255,046 (80,653) 221,989 (47,596)

1,774,467 1,834,437 (59,970) 1,915,223 (140,756)

Expenses

Salaries 949,939 923,362 (26,577) 962,089 12,150 Programs 230,020 226,250 (3,770) 231,357 1,337 Merchandise 4,434 5,170 736 3,480 (954) Lottery 92,830 70,000 (22,830) 93,253 423 Supplies and Operations 333,717 479,138 145,421 447,449 113,732

1,610,940 1,703,920 92,980 1,737,628 126,688

Net Operating Income 163,527 130,517 33,010 177,595 (14,068) DEL MAR RACE TRACK AUTHORITY CASH AND INVESTMENTS October 31

Cash and Cash Equivalents: 3 2012 Checking Balance 26,984

Local Agency Investment Fund 28,181

Total Cash and Cash equivalents 55,165

Investments:

Restricted

Reserve Fund 4,700,345

Bond Fund 1,178,462

Unrestricted

Surplus Account 1,973,605

Total Investments 7,852,412 STATE RACE TRACK LEASING COMMISSION DEL MAR CAPITAL IMPROVEMENT ACCOUNT October 31 1 2012

Checking Balance $0

Local Agency Investment Fund $146

Total Cash and Cash Equivalents $146 DEL MAR RACE TRACK AUTHORITY PLEDGED REVENUES 2012 DMTC Satellite Food Other Total Rent Wagering & Beverage (Interest)) Pledge January 0 25,424 (161,536) 5,681 -130,432 February 0 10,410 (145,944) 5,202 -130,333 March 0 23,953 127 5,565 29,646 0 59,787 -307,354 16,448 -231,119 April 0 27,936 (74,618) 5,046 -41,636 May 0 87,138 151,162 5,298 243,599 June 0 28,685 605,154 5,198 639,037 0 143,759 681,699 15,542 841,000 July 0 12,128 1,625,655 4,290 1,642,073 August 0 -30,655 0 3,897 -26,758 September 0 (64,076) 0 3,785 -60,291 0 -82,603 1,625,655 11,972 1,555,023 October 0 22,117 0 3,776 25,893 November 0 December 0 0 0 22,117 0 3,776 25,893 Additional Paid-in-Capital 2012 Year to Date $0 $143,060 $2,000,000 $47,737 $2,190,797 2011 DMTC Satellite Food Other Total Rent Wagering & Beverage (Interest)) Pledge January 0 10,872 (143,056) 6,069 -126,115 February 0 45,261 (102,792) 5,029 -52,502 March 0 (8,066) (89,632) 11,259 -86,439 0 48,067 -335,481 22,357 -265,056 April 0 57,284 (11,424) 4,347 50,207 May 0 78,558 (36,468) 4,113 46,203 June 0 1,760 608,841 12,896 623,497 0 137,602 560,949 21,356 719,907 July 0 18,522 1,774,532 6,687 1,799,741 August 0 6,553 0 7,128 13,681 September 0 (42,723) 0 5,311 -37,412 0 -17,648 1,774,532 19,126 1,776,010 October 0 31,392 0 5,350 36,742 November 5,644,000 -24,645 0 5,086 5,624,441 December 0 26,508 0 5,641 32,149 5,644,000 33,255 0 16,077 5,693,332 Additional Paid-in-Capital 979,873

2011 Year to Date $5,644,000 $201,276 $2,000,000 $78,916 $8,904,066 2010 DMTC Satellite Food Other Total Rent Wagering & Beverage (Interest)) Pledge January 0 30,776 (141,140) 16,712 -93,652 February 0 49,998 (76,230) 13,294 -12,938 March 0 66,204 75,770 13,163 155,137 0 146,978 -141,600 43,169 48,547 April 0 77,527 4,034 11,651 93,212 May 0 122,286 9,537 10,103 141,926 June 0 32,729 394,236 8,385 435,350 0 232,542 407,807 30,139 670,488 July 0 667 1,733,793 8,403 1,742,862 August 0 -1,742 0 8,606 6,864 September 0 -222 0 7,304 7,082 0 -1,297 1,733,793 24,313 1,756,809 October 0 -14,887 0 5,717 -9,170 November 6,365,000 139,618 3,916 6,508,534 December 0 3,341 0 6,117 9,458 6,365,000 128,072 0 15,750 6,508,822 Additional Paid-in-Capital 1,214,626

2010 Year to Date $6,365,000 $506,295 $2,000,000 $113,370 $10,199,291