NOTICE OF MEETING The 22nd District Agricultural Association Board of Directors meeting Tuesday, November 10, 2020 1:30pm
Mission Tower via ZOOM Del Mar Fairgrounds 2260 Jimmy Durante Boulevard Del Mar, California
As permitted by Executive Order N-25-20 (issued by Governor Newsom on March 12, 2020), the Del Mar Fairgrounds (DMF) will conduct the November 10, 2020 Board Meeting via ZOOM teleconference. If you wish to attend and participate in the meeting via teleconference, accommodations will be made. Please check the DMF website later this week for updated information and instructions on how to participate in the meeting via ZOOM/teleconference.
22ND DAA BOARD OF DIRECTORS
Richard Valdez, President Sam Nejabat, Director Lisa Barkett, Vice-President G. Joyce Rowland, Director Michael Gelfand, Director Frederick Schenk, Director Kathlyn Mead, Director Pierre Sleiman, Director Don Mosier, Director
Secretary-Treasurer 22nd DAA Counsel Carlene Moore Josh Caplan Interim Chief Executive Officer/General Manager Office of the California Attorney General
22nd District Agricultural Association Mission Statement To manage and promote a world-class, multi-use, public assembly facility with an emphasis on agriculture, education, entertainment and recreation in a fiscally sound and environmentally conscientious manner for the benefit of all.
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 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: www.delmarfairgrounds.com BOARD OF DIRECTORS MEETING November 10, 2020 1:30 p.m. AGENDA
1. CALL TO ORDER – PRESIDENT RICHARD VALDEZ
2. ROLL CALL PAGE 3. CONSENT CALENDAR 4-8 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.
A. Minutes, Regular Meeting, October 20, 2020 5-8
4. MANAGEMENT REPORT 9-13 The Board may take approval action on the Manager’s Report:
A. CEO’s Report (Informational/Action) --- B. Employee Recognition (Informational) 10 C. Scream Zone Final Wrap-up (Informational) --- D. Events Report (Informational) 11-12 E. Don Diego Scholarship Foundation Report (Informational) 13
5. COMMITTEE REPORTS 14-37 The Board may take approval action on Committee Reports and New Committee Assignments:
A. DMTC Liaison Committee – Richard Valdez, Chair 14 1. DMTC Race Meet Report (Informational/Action) 15-37
B. Contracts Oversite Committee – Richard Valdez, Chair 26 1. Consideration and vote on whether to approve the Grant for General Support Memorandum of Understanding between the 22nd District Agricultural Association and the California Department of Food & Agriculture. (Action item)
C. Food & Beverage Committee – Kathlyn Mead, Chair 27 1. Premier P&L Statement – September 2020 (Informational/Action) 28
D. Community Relations Committee – Don Mosier, Chair 29 1. Committee Report (Informational/Action)
E. Horsepark/Horse Show Committee – Sam Nejabat & Michael Gelfand, Co-Chairs 30 1. Del Mar National Horse Show Update (Informational/Action) 31
F. Finance Committee – Richard Valdez, Chair 32 22nd DAA Board of Directors Meeting Agenda November 10, 2020
1. Financial Report (Informational/Action) 33-36
G. Legal Committee – Richard Valdez, Chair 37 1. Committee Report (Informational/Action)
6. 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 number of public speakers. No speaker may cede their time to another speaker. Public comments on agenda items will be accepted during the meeting as items are addressed. Public comment on issues NOT on the current Agenda is allowed. 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.
7. CLOSED EXECUTIVE SESSIONS (NOT OPEN TO THE PUBLIC) 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:
A. To confer with and receive advice from legal counsel regarding potential litigation involving the 22nd DAA. Based on existing facts and circumstances, there is significant exposure to litigation against the 22nd DAA. B. To confer with counsel, discuss, and consider the following pending litigation to which the 22nd DAA is a party. Cabezuela, et al., v. 22nd District Agricultural Association, San Diego County Superior Court, Case No. 37-2020-0022179. To C.con To confer with counsel, discuss, and consider the following pending litigation to which the 22nd DAA is a party. Jerry Hollendorfer, et al., v. Del Mar Thoroughbred Club, et al., San Diego County Superior Court, Case No. 37-2019-00036284. D. To confer with counsel, discuss, and consider the following pending litigation to which the 22nd DAA is a party. Bell v. 22nd District Agricultural Association, San Diego County Superior Court, Case No. 2019-00055846. E. Personnel: The Board will meet in closed session to consider those items permitted under Government Code section 11126(a) related to the General Manager/CEO
8. RECONVENE TO OPEN SESSION A. Report on actions, if any, taken by the Board in closed executive session.
9. DIRECTORS REQUEST & CLOSING COMMENTS ---- A. Board Communication/Correspondence (Informational/Action)
10. FOR YOUR INFORMATION 38 A. Correspondence 39-48
11. ADJOURNMENT
22nd DAA Board of Directors Meeting Agenda November 10, 2020
3. 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 Interim Chief Executive Officer prior to the meeting. Trailed items will be considered after the motion to approve the Consent Calendar.
A. Minutes, Regular Meeting – October 20, 2020 Staff requests approval of the minutes.
Page 4
22nd DISTRICT AGRICULTURAL ASSOCIATION Board of Directors Meeting Del Mar Fairgrounds 2260 Jimmy Durante Boulevard Del Mar, Ca 92014 October 20, 2020
MINUTES
The 22nd District Agricultural Association (DAA), Board of Directors met via ZOOM in the Mission Tower Building at the Del Mar Fairgrounds on October 20, 2020 at 1:30 p.m.
OFFICERS PRESENT: Richard Valdez, President Lisa Barkett, Vice President (via ZOOM) Carlene Moore, Interim Chief Executive Officer, Secretary-Treasurer
DIRECTORS PRESENT VIA ZOOM Michael Gelfand, Kathlyn Mead, Don Mosier, Sam Nejabat, Joyce Rowland, Frederick Schenk and Pierre Sleiman
DIRECTORS/OFFICERS ABSENT None
OTHERS PRESENT Josh Caplan, Deputy Attorney General (via ZOOM) Katie Mueller, Business Services Officer – 22nd DAA Melinda Carmichael, Business Development Officer – 22nd DAA Donna O’Leary, Executive Assistant - 22nd DAA
CALL TO ORDER President Richard Valdez called the meeting to order at 1:30 p.m. with a quorum present.
ROLL CALL All Directors were present.
President Valdez announced that due to the number of people signed up for public comment and the full agenda, public comment will be limited to two minutes.
President Valdez reported that the Board voted unanimously to approve the separation agreement between Tim Fennell and the 22nd DAA during the Executive Session at the September Board meeting. Mr. Fennell’s official retirement date is November 2. The Board thanked Mr. Fennell for his 27-plus years of service and dedication to the Fairgrounds and wished him the very best going forward.
CONSENT CALENDAR Vice President Lisa Barkett moved to approve items A and B on the consent calendar.
A. Minutes, Regular Meeting, September 15,2020 B. 22nd District Agricultural Association (DAA) Contracts Approval
Director Kathlyn Mead seconded the motion. President Richard Valdez, Vice-President Lisa Barkett, Directors Michael Gelfand, Kathlyn Mead, Don Mosier, Sam Nejabat, Joyce Rowland, Frederick Schenk and Pierre Sleiman were in favor and the motion carried.
MANAGEMENT REPORT
Employee Recognition Interim CEO Carlene Moore recognized and thanked Ray Renteria Jr., for his 20 years of outstanding service to the District.
Page 5 22nd DAA Board Meeting Minutes October 20, 2020 Page 2
Scream Zone Business Services Officer Katie Mueller reported that Scream Zone started on October 1 and will continue through October 31. Ms. Mueller reviewed the operation plan for Scream Zone and said that it has been sold out every night it’s been open including Opening Night.
Events Report Melinda Carmichael reviewed the events in detail for October and November as listed on pages 18-19 of the board packet.
Don Diego Scholarship Foundation (DDSF) Report Executive Director Chana Mannen said there is still time to create a new endowed scholarship. Don Diego will match a $10,000 donation two for one which will create a $30,000 endowed scholarship.
Other Interim CEO Carlene Moore and the Board expressed their gratitude for all the staff that were laid off and to those still working. Director Michael Gelfand proposed that a resolution and/or proclamation be made acknowledging the Board’s support and gratitude to all of the staff members who are leaving as well as those who are staying for going above and beyond the call of duty. All the Directors were in favor of the idea.
COMMITTEE REPORTS
FAIR OPERATIONS COMMITTEE – Frederick Schenk, Chair
PUBLIC COMMENT • Mary Talley, President of State Fair Spectaculars and Vice President of Talley Amusements and independent ride operator at the San Diego County Fair for the past 18 years feels that now is the worse time for the San Diego County Fair (SDCF) to change to a single-source carnival. • Michael Wood, a participant at the SDCF since 1984 said that he is not in favor of the single-source carnival. • Brian Vandervorste said that he and his family have been involved with the SDCF since 1986 and said he would like to be part of the change. • Corey Oakley, Vice President of Helm & Sons Amusements said news of the change to a single-source carnival was news to them and that was disappointed that as partners no one from the SDCF reached out to them to see what impact this would have or to find out their thoughts. • Michael Winchester, a vendor for over 30 years said he supports an independent midway. • Adam West said that All State 38 asked that whatever the Fair decides that it be done in a fair, open and transparent way. • John Taggart, Big T Concessions, said he would like to see the SDCF keep the independent midway. • Davey Helm, third generation showman who partnered with the SDCF for over half his life hopes to be part of Del Mar for years to come.
Committee Report Katie Mueller, Business Services Officer gave an overview of the report on page 22 of the Board packet and the recommendation to issue an RFP for a “single source carnival”. Ms. Mueller added that having a single source carnival is not new to California and the vast majority of fairs across the country have a single carnival operator. Director Schenk encouraged everyone that spoke during public comment to take a look at the RFP that will be sent out to everyone in the industry, it will be a fair and unbiased process.
San Diego International Beer Festival Update Exhibits Director Jacky Eshelby gave an overview of the San Diego International Beer Festival process and announced the winners. There were over a thousand entries; 162 breweries, meaderies, and cideries that participated. The gross revenue was $62,550.
DMTC LIAISON/SATELLITE WAGERING COMMITTEE – Richard Valdez, Chair
DMTC Race meet report President of DMTC Josh Rubinstein announced that the Fall Race Meet begins on October 31st and runs through November 29. It will be a 15-day race meet over five weekends without patrons. They are operating underPage the 6 22nd DAA Board Meeting Minutes October 20, 2020 Page 3 same guidelines they used during the summer meet which includes daily health screens for everyone on the property, on-site medical professionals, and mask wearing and social distancing are required.
Satellite Wagering Report Please see page 24 of the Board packet.
PUBLIC COMMENT • Martha Sullivan emphasized to the board that so far this year California racetracks have killed one horse every three days and that there were five horses that died in the summer. • Jane Cartmill says that jockeys continue to whip their horses because racing is about pushing the horse to the limit to run faster and to place better to make more money, it is not about the safety of the horse. • Jim Coleman, speaking on behalf of the Del Mar business community, said they are looking forward to the Fall Race Meet. • Oscar de la Torre, worker advocate, said that all of the workers he has spoken to feel very safe working at Del Mar and our appreciative of the safety protocols that have been implemented.
CONTRACTS OVERSIGHT COMMITTEE – Richard Valdez, Chair Revised Delegation of Authority Interim CEO Carlene Moore explained that the Local Agency Investment Fund (LAIF) requested that the District use their resolution form to update the signers on the account hence the need to revise the Delegation of Authority as included in the Board packet on pages 26-28. Director Joyce Rowland moved to approve the revised Delegation of Authority. Director Kathlyn Mead seconded the motion. President Richard Valdez, Vice-President Lisa Barkett, Directors Michael Gelfand, Kathlyn Mead, Don Mosier, Sam Nejabat, Joyce Rowland, Frederick Schenk and Pierre Sleiman were in favor and the motion carried.
Recycled Water Amendment Interim CEO Carlene Moore reviewed the agreement on pages 29-33 in the Board packet. Director Don Mosier moved to approve the Reclaimed Water Sales Agreement. Vice President Lisa Barkett seconded the motion. President Richard Valdez and Vice President Lisa Barkett and Directors Michael Gelfand, Kathlyn Mead, Don Mosier, Sam Nejabat, Joyce Rowland, Frederick Schenk and Pierre Sleiman were in favor and the motion carried.
FOOD & BEVERAGE COMMITTEE – Kathlyn Mead, Chair Premier P&L Statement – August 2020 General Manager of Premier Food Services Mark Wiggins reviewed the August food and beverage report on page 35 of the board packet.
COMMUNITY RELATIONS COMMITTEE – Don Mosier, Co-Chair Committee Report Director Don Mosier reported that the committee met with the representatives from the City of Del Mar and Solana Beach. The major topic of discussion was the draft memorandum of understanding that was passed at the Del Mar City Council meeting regarding affordable housing units to be potentially built at the Fairgrounds. It is a draft MOU made without input from the Fairgrounds. After discussion President Valdez said he will take the request into consideration to assign to the appropriate committee. Director Mosier suggested the topic be moved to the Land Use Committee.
LAND USE/ENVIRONMENTAL COMMITTEE – Don Mosier & Michael Gelfand Co-Chairs Committee Report Director Michael Gelfand said that two companies have offered pro bono services one is a landscape architecture planning firm, Spurlock, and the other is a financial feasibility analysis company, London Moeder. They have both offered their services to help in evaluating future planning, including financial analysis, of the Fairgrounds property. Director Gelfand said he submitted the proposals to Interim CEO Carlene Moore.
SUSTAINABILITY COMMITTEE – Don Mosier, Chair Committee Report Supervising Environmental Planner Dustin Fuller gave an overview of the report on the proposed alternative energy project listed on pages 39 and 40 of the Board packet. CCA will be overseeing the project from the RFP process all the way through to construction. The RFP should be out on Wednesday, October 21, 2020. Page 7 22nd DAA Board Meeting Minutes October 20, 2020 Page 4
SURFSIDE RACE PLACE (SSRP) (aka The Center) – AD HOC COMMTTEE – Lisa Barkett, Chair Committee Report Interim CEO Carlene Moore gave a PowerPoint presentation showing the construction progress made on The Center. Construction should be completed sometime in early February.
FINANCE COMMITTEE – Richard Valdez, Chair Financial Reports Interim CEO Carlene Moore reviewed the report on pages 43-46 of the Board packet. Ms. Moore is in close communications with CDFA and hopes to have more information to report out next month.
PUBLIC COMMENT • Martha Sullivan said it is shocking to see what the Del Mar Thoroughbred Club does not contribute to the Fairgrounds and she is flabbergasted that the Fairgrounds continue to have horse racing.
STRATEGIC PLANNING COMMITTEE – Pierre Sleiman, Chair Director Pierre Sleiman explained that for the last several months during the pandemic the focus was on how to survive and stabilize so there was not a lot of time to focus on a strategic plan. The goal is to once again reengage the process in a way applicable to the environment that we live in today. Director Sleiman wanted to assure the community that Strategic Planning is even more important today and will start to reassemble.
PUBLIC COMMENT • Martha Sullivan encouraged the board to not step away from considering cannabis events because everything needs to be on the table.
LEGAL COMMITTEE – Richard Valdez, Chair Nothing to report.
PUBLIC COMMENT – NON-AGENDA ITEMS • Martha Sullivan expressed her appreciation for what the 22nd DAA has been going through this year and for working their way through these challenging times. • Jane Cartmill was surprised to hear about Fairgrounds’ financial strain. • Jacalyn Horton Toft, an exhibitor at the fair for several years, would like to see the non-smoking policy enforced at the next Fair and would like to see the sponsors be monitored more because she feels they are not honest with the public.
CLOSED EXECUTIVE SESSION The Board adjourned to Executive Session at 4:40 p.m.
RECONVENE TO OPEN SESSION The Board reconvened to Open Session at 6:31 p.m. President Valdez said the Board conferred with and received advice from counsel on the items listed on the closed-session portion of the agenda and have nothing to report.
DIRECTORS REQUESTS Committee Updates President Valdez pointed out the change to the Committees. Director Michael Gelfand is now on the Strategic Planning Committee in place of Vice President Lisa Barkett.
ADJOURNMENT There being no further business to discuss, Director Frederick Schenk moved to adjourn the meeting, Director Joyce Rowland seconded, all were in favor and the meeting was adjourned 6:33 p.m.
______Carlene Moore Interim Chief Executive Officer
Page 8 4. MANAGEMENT REPORT
A. CEO’s Report Informational: Interim CEO Carlene Moore will
B. Employee Recognition provide verbal report. Informational: Interim CEO Carlene Moore will present Employee Recognition to Sean Mc voy for his 20 years of service.
C. Scream Zone Final WrapA -up Informational: Business Services Officer Katie Mueller will present wrap-up report.
D. Events Report Informational: Business Development Officer Melinda Carmichael will review the event schedules for the months of November and December 2020 (refer to attached information).
E. Don Diego Scholarship Foundation Report Informational: Executive Director Chana Mannen will give verbal report.(refer to attached information)
Page 9 Employee Recognition for “Years of Service”
Sean McAvoy, 20-years of service. Sean was hired as a Maintenance Worker in our Operations Department on November 16, 2000. While he was pursuing his AA degree in AC Repair, he was promoted to Maintenance Mechanic on May 1, 2014. Sean has been a dedicated and valuable member of our team and is an all around team player. In addition, Sean also provides support to the Del Mar Thoroughbred Club and Premier Food Services. Sean is always friendly and is a pleasure to work with!
Page 10 EVENTS DEPARTMENT November 2020
DATE: EVENTS: CONTRACT VENUE: AMOUNT:
11/1-12/31 CBF Productions (varies per car) West Lot Concert Drive In Approx. $20,000/mo
10/31-11/29 DMTC (DMTC sponsored) Fairgrounds Fall Race Meet
11/2-8 County Show Est. Stall: $ 15,000.00 Horsepark Horse Show 150
11/13-15 Snow Jam, LLC $ 12,300.00 Exhibit Hall Ski Show
11/16-22 West Palms Events Est. Stall: $ 20,000.00 Horsepark Horse Show 200
11/21-12/18 Pinery Tree Farms $ 12,915.00 Horsepark Christmas Tree Sale
11/16-12/12 Purdy Tree Farms $ 9,700.00 Main Lot
Page 11 EVENTS DEPARTMENT December 2020
DATE: EVENTS: CONTRACT VENUE: AMOUNT:
12/1-12/31 CBF Productions (varies per car) West Lot Concert Drive In Approx. $20,000/mo
12/5-1/2/21 CBF Productions Holiday of Lights Approx. $50,000/mo Fairgrounds
12/1-6 County Show Horse Show Est. Stall: $ 15,000.00 Horsepark 150 12/12-13 B & L Productions Gun Show $ 11,060.00 O'Brien Hall
11/21-12/18 Pinery Tree Farms (Revenue of $12915 Christmas Tree Sale Listed in November) Horsepark
11/16-12/12 Purdy Tree Farms (Revenue of $9700 Christmas Tree Sale Listed in November) Main Lot
Page 12 Page 13
5. COMMITTEE REPORTS
A. DMTC Liaison Committee– Richard Valdez, Chair
1. DMTC Race Meet Report Informational/Action: A verbal report will be given by a representative of DMTC management. (see attached report)
Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 5. COMMITTEE REPORTS
B. Contracts Oversight – Richard Valdez, Chair
Consideration and vote on whether to approve the Grant for General Support Memorandum of Understanding between the 22nd District 1. Agricultural Association and the California Department of Food & Agriculture. Action item:
Interim CEO Carlene Moore will give a verbal report.
Page 26 5. COMMITTEE REPORTS
C. Food & Beverage – Kathlyn Mead, Chair
1. Premier P&L Statement – September 2020 Informational: Mark Wiggins, General Manager for Premier Food Services, will review the September report.
Page 27 Food & Beverage Report September 2020
September 2020 Food Service Revenues were $77,252. Budgeted Revenues for September were $2,241,890.
Net distribution to the District for September was ($39,305) or (50.88%). Budgeted distribution for September was $598,259 or 26.69%.
Year-to-date distribution to the District is ($1,087,372) or (110.52%). The budgeted distribution for 2020 was $5,744,901 or 27.20%.
2020 % 2020 % 2019 % Sep-20 ACTUAL BUDGET ACTUAL
TOTAL REVENUE 77,252 100.00% 2,241,890 100.00% 913,949 100.00%
TOTAL COGS 10,544 13.65% 472,018 21.05% 161,872 17.71%
GROSS MARGIN 66,708 86.35% 1,769,872 78.95% 752,077 82.29%
TOTAL PAYROLL 63,198 81.81% 897,786 40.05% 672,998 73.64%
OPERATING EXPENSES 48,430 62.69% 178,714 7.97% 145,467 15.92%
NET PROFIT (44,920) -58.15% 693,372 30.93% (66,388) -7.26%
CLIENT DISTRIBUTION (39,305) -50.88% 598,259 26.69% (58,090) -6.36%
2020 % 2020 % 2019 % YTD ACTUAL BUDGET ACTUAL
TOTAL REVENUE 983,895 100.00% 21,122,739 100.00% 20,207,136 100.00%
TOTAL COGS 143,681 14.60% 4,330,758 20.50% 4,137,615 20.48%
GROSS MARGIN 840,214 85.40% 16,791,982 79.50% 16,069,521 79.52%
TOTAL PAYROLL 1,590,216 161.62% 7,972,400 37.74% 8,060,145 39.89%
OPERATING EXPENSES 492,708 50.08% 2,205,743 10.44% 2,196,525 10.87%
NET PROFIT (1,242,711) -126.31% 6,613,838 31.31% 5,812,852 28.77%
Y-T-D CLIENT DISTRIBUTION (1,087,372) -110.52% 5,744,901 27.20% 5,086,246 25.17%
J:\BOARD MEETINGS\Incoming Backup Materials\7 Committee Reports\D Food & Bev\Copy of Food Beverage Report 2020 - Sep 2020Page 1 Page 28
5. COMMITTEE REPORTS
D. Community Relations Committee – Don Mosier, Chair
1. Committee Report: Meeting with representatives from the cities of Del Mar & Solana Beach. Informational: Director Don Mosier, Committee Chair, will provide a verbal report.
Page 29
5. COMMITTEE REPORTS
E. Horsepark/Horse Show Committee – Sam Nejabat & Michael Gelfand, Co-Chairs 1. Del Mar National Horse Show Update Informational/Action item: Business Services Officer Katie Mueller will give an update.
Page 30
Horsepark/Horse Show Committee
To: 22nd District Agricultural Association Board of Directors From: Katie Mueller, Chief Business Services Officer Date: November 6, 2020 Subject: Item 5-E-1, 75th Anniversary Del Mar National Horse Show
Discussion / History: The Del Mar National Horse Show (DMNHS) started in 1946 as an event at the San Diego County Fair. It remained that way until 1979, when it outgrew the county fair and became a stand-alone event taking place each late April through early May. Over the years, it has been a competition for different equestrian disciplines and currently hosts three distinctive weeks: Western, Dressage and Hunter/Jumper. The competitions are Olympic and World Cup qualifiers. Guenter Seidel, Steffen Peters, Hap Hansen and Rich Fellers are just a few athletes that have competed at the DMNHS over the years. In 2020, the DMNHS would have celebrated its 75th anniversary with the United States Equestrian Federation designating it a Heritage event. Due to the outbreak of COVID-19 and subsequent shut down implemented by state and county public health officials this past March, the 75th anniversary DMNHS was postponed to 2021.
Recommendation: The Committee met to discuss the prospect of a 2021 return of the DMNHS, typically taking place in late April through early May, but the planning and investment of which begins now. It is a three-week event that highlights one of the three disciplines each week. In addition, and unlike most other horse shows, there is a publicly attended component each Saturday night: Night of the Horse, Musical Freestyle and the Grand Prix. It is the public attendance at this historic show that helps to financially sustain the show. The planning and programming for the undertaking of an event this size begins now, in the Fall, with contract negotiations for various services, website updates, the creation of entry materials, hiring of temporary staff, design of advertising, etc.
Due to the ongoing restrictions on mass gatherings and public attendance at sporting events, uncertainty as to those restrictions remaining in effect through Spring 2021, and the lack of current financial resources and limited human resources to properly produce the show, once again the committee recommends postponing the 75th Anniversary Del Mar National Horse Show.
Fiscal Impact: Minimal. By postponing now, the 22nd DAA retains the DMNHS dates and, therefore, has the opportunity to lease them to another promoter that can produce a more traditional horse show without patrons.
Page 31 5. COMMITTEE REPORTS
F. Finance Committee – Richard Valdez, Chair
Finance Report Informational/Action: Interim Chief Executive Officer 1. will give the District’s financial update. Carlene Moore
Page 32
Finance Committee Report
To: 22nd District Agricultural Association Board of Directors From: Carlene Moore, Interim Chief Executive Officer Date: November 4, 2020 Subject: Item 5-F, Financial Report
Discussion / History: The Network of California Fairgrounds (Network) is a self-funded industry that is part of the State’s 16 critical infrastructures of government, operating under the guidance of the California Department of Food & Agriculture (CDFA). The entire Network, of which the 22nd DAA is the largest, is predicated on a business model that is almost exclusively reliant upon events and mass gatherings. The current COVID-19 crisis has obliterated this model due to State and local prohibitions on events and mass gatherings in order to advance public health and safety.
The 22nd DAA’s economic impact on the greater San Diego County region is over $680 million, including nearly 5,000 FTE jobs created from all of the activities that take place on the Del Mar Fairgrounds. It is imperative that this vital resource be preserved and even advanced for future generations.
Efforts to-date to mitigate this financial crisis have included correspondence to Governor Newsom and State legislators in May notifying them of our anticipated shortfall by year end, reductions in temporary and seasonal employees, termination or renegotiation of service agreements, significant reductions in energy and utility needs, and cancellation of capital improvement projects not yet underway.
On June 29, 2020, the Governor approved a budget augmentation under AB 75, which provided $40.3 million in General Fund support for District Agricultural Associations and Cal Expo for those “Affected Fairgrounds” that are projected to have insufficient reserves to pay legally mandated costs that may be incurred during the state civil service layoff process.
Approach: The 22nd DAA Finance Committee and executive leadership continue to work to identify means of streamlining operational expenses while exploring additional funding streams.
On June 18, 2020, the 22nd DAA notified all employees of proposed layoffs and the start of the State Restriction of Appointment (SROA) process. Currently, the CDFA funds only paid the wages of the 22nd DAA’s state civil service workers and employer portions of benefits, retirement contributions, and leave liability payouts through the layoff process, along with unemployment benefits upon separation following the layoff process.
Page 33
On the federal level, Representative Jimmy Panetta (D-California) introduced the Agricultural Fairs Rescue Act, H.R. 7883, on July 30, 2020 to direct the Secretary of Agriculture to establish a program under which the Secretary awards grants to State or State departments of agriculture for the purposes of providing support to agricultural fairs for losses sustained due to COVID-19.
On August 7, 2020, a letter of support was sent to Speaker of the House Nancy Pelosi and Minority Leader Kevin McCarthy to request their consideration for the inclusion of relief measures in any future COVID-19 relief packages.
In addition to the elimination of seasonal and temporary employees early this Spring, layoffs of a majority of the permanent civil servant employees was completed on October 15, 2020. Ultimately, permanent employees were reduced from 153 to 62 retained, in large part due to 15 employees transferring to other agencies or accepting jobs in the private sector, and 19 retiring either pre- or post-layoff.
Due to the start date of the 22nd DAA’s layoff process, CDFA retroactively reimbursed the DAA for the legally mandated payroll expenses for the months of May and June. To date, the 22nd DAA has received $5,432,350 for payroll reimbursement, $2,012,402 for leave liability payouts, and $1,275,552 for unemployment insurance reimbursements, for a total of $8,720,304.
This is $5 million lower than originally stated by CDFA of eligible payroll-related expenses and $12 million short overall, including operating expenses, of what was requested and anticipated through AB 75, the $40.3 million state budget allocation for DAAs.
Under CDFA’s current interpretation of the funding, the 22nd DAA is no longer eligible to receive additional funding since the layoff has concluded. Monthly revenues are still short of ongoing operating expenses and payroll. However, personnel has been reduced to the bare minimum needed to maintain and secure the property from becoming a public nuisance, remain available to the community for emergency and natural disaster responses, and have a viable organization going forward, one that is ready to capitalize on revenue streams that are still in the works and others that were put on hold due to the prohibition against mass gatherings.
Through efforts to reduce spending and control costs through layoffs and deferred payment plans while simultaneously creating new business opportunities, the 22nd DAA has reduced its financial support needs from the April estimation of $25 million to survive until the end of the calendar year, December 31, 2020, to less than $24 million through the end of the entire fiscal year, June 30, 2021, should restrictions on mass gatherings remain in effect, jeopardizing the county fair and no additional business opportunities present themselves.
On October 9 and 28, 2020, the committee met with CDFA leadership to discuss ongoing support needed. The request was made for $12 million in funding support through the fiscal year, June 30, 2021, in addition to the unemployment insurance and leave liability payouts that the 22nd DAA remains eligible to receive.
Page 34 22nd District Agricultural Association Balance Sheet Unaudited
9/30/2020 12/31/2019 (Unaudited) (Audited) ASSETS
Current Assets: Cash & Cash Equivalents $923,761 $5,486,680 Restricted Cash - RTA 3,437,157 Restricted Cash -Premier 597,801 Restricted Cash - IBank WQI 490,065 3,825,813 Restricted Cash - IBank Ent. 7,336,133 10,317,176 Restricted Cash - Premier Ent. 1,506,000 622,473 Restricted Cash - F&B & JLA 422,632 336,166 Total Cash and Cash Equivalents 10,678,591 24,623,266
Accounts Receivable, Net 608,470 644,980 Prepaid Expenses and Other Current Assets 372,223 731,749 Total Current Assets 11,659,284 25,999,995
Property and Equipment, Net 42,729,605 36,258,087 Deferred Outflow Pension & OPEB 5,193,040 5,193,040
Total Assets $59,581,929 $67,451,122
LIABILITIES
Current Liabilities: Accounts Payable $1,240,429 $1,935,032 Deferred Revenue 1,747,716 1,131,213 Accrued Liabilities 5,777,490 2,444,929 Accrued Employee Leave 2,519,123 2,995,733 Other Current Liabilities 1,093,276 1,375,251 Current LT Debt - IBank WQI 0 364,974 Current LT Debt - IBank Ent. 302,820 Current LT Debt-Energy Loan 164,021 164,021 Total Current Liabilities 12,542,055 10,713,973
Deferred Inflow Pension & OPEB 1,283,146 1,283,146 Net Pension & OPEB Liability 37,706,271 37,706,271 Long Term Debt - IBank WQI 8,180,683 8,180,683 Long Term Debt -IBank Ent. 14,697,180 14,697,180 Long Term Debt -Premier Ent. 2,000,000 750,000 Due to Other Funds 22,663 Total Liabilities 76,431,998 73,331,253
FUND EQUITY
Contributed Capital 44,222,421 44,222,421 Less Contributed Capital to RTA (37,230,665) (36,670,665) Retained Earnings (Deficit) (13,431,888) (10,290,992) Current Year Income/(Loss) (10,409,937) (3,140,896) Total Fund Equity (16,850,069) (5,880,132)
Total Liabilities & Fund Equity $59,581,929 $67,451,121
Page 35 22nd District Agricultural Association Statement of Operations For the Nine Months Ending Wednesday, September 30, 2020 Unaudited Actual vs Actual Current Yr Current Yr 2020 2020 Variance Budget Prior vs Prior Yr vs Prior Yr Actual Budget Fav/(Unfav) Var % Year Fav/(Unfav) % Var Revenues Admissions - Fair $9,448,832 ($9,448,832) (100.00%) $9,404,639 ($9,404,639) (100.00%) Admissions to Concerts 3,431,815 (3,431,815) (100.00%) 2,077,562 (2,077,562) (100.00%) Carnival Rides 11,051,000 (11,051,000) (100.00%) 10,022,476 (10,022,476) (100.00%) Carnival Games/Space Rental 4,579,000 (4,579,000) (100.00%) 4,343,614 (4,343,614) (100.00%) Commercial Space 5,100 3,850,260 (3,845,160) (99.87%) 3,779,266 (3,774,166) (99.87%) Concessions 2,750 4,265,000 (4,262,250) (99.94%) 4,064,701 (4,061,951) (99.93%) Entry Fees 198,801 852,400 (653,599) (76.68%) 668,568 (469,767) (70.26%) Food & Beverage 983,895 20,706,458 (19,722,563) (95.25%) 20,956,224 (19,972,329) (95.30%) Parking 501,972 6,702,010 (6,200,038) (92.51%) 5,945,722 (5,443,750) (91.56%) Surf & Turf 1,883,582 1,509,022 374,560 24.82% 1,509,726 373,856 24.76% Sponsorships 156,217 2,867,889 (2,711,672) (94.55%) 2,412,161 (2,255,944) (93.52%) Facility Rentals 1,595,827 3,096,652 (1,500,825) (48.47%) 3,007,494 (1,411,667) (46.94%) Reimbursement Costs 626,551 1,406,163 (779,612) (55.44%) 1,916,022 (1,289,471) (67.30%) Admissions - OTB 14,620 56,519 (41,899) (74.13%) 44,825 (30,205) (67.38%) Track Commissions 71,800 285,200 (213,400) (74.82%) 263,538 (191,738) (72.76%) Account Wagering 282,414 369,000 (86,586) (23.47%) 355,819 (73,405) (20.63%) Program Sales 27,225 88,000 (60,775) (69.06%) 77,715 (50,490) (64.97%) Lottery 20,014 115,000 (94,986) (82.60%) 100,745 (80,731) (80.13%) Other - OTB 916 113,150 (112,234) (99.19%) 1,115 (199) (17.85%) Del Mar National Horse Show 2,500 1,143,870 (1,141,370) (99.78%) 1,052,535 (1,050,035) (99.76%) Merchandise 246,208 689,295 (443,087) (64.28%) 594,398 (348,190) (58.58%) Leases 470,427 468,507 1,920 0.41% 442,365 28,062 6.34% Interest 103,919 261,125 (157,206) (60.20%) 482,690 (378,771) (78.47%) Race Track 500,000 500,000 0.00% 500,000 0.00% State Apportionment 5,181,101 5,181,101 0.00% 5,181,101 0.00% Other 130,185 336,200 (206,015) (61.28%) 281,433 (151,248) (53.74%) Total Revenues $13,006,024 $78,192,367 ($65,186,343) (83.37%) $74,305,353 ($61,299,329) (82.50%)
Expenses Payroll Related & Benefits 14,020,820 22,828,920 8,808,100 38.58% 22,655,612 8,634,792 38.11% Temporary Payroll Services 129,834 504,006 374,172 74.24% 653,122 523,288 80.12% Professional Services 602,387 3,313,576 2,711,189 81.82% 2,621,656 2,019,269 77.02% Entertainment & Show Expenses 4,000 5,499,000 5,495,000 99.93% 4,582,674 4,578,674 99.91% Carnival Rides/Games Owner Split 8,905,678 8,905,678 100.00% 8,434,558 8,434,558 100.00% Food & Beverage Expense 2,071,267 15,089,427 13,018,160 86.27% 15,120,890 13,049,623 86.30% Advertising 90,991 1,192,651 1,101,660 92.37% 1,037,457 946,466 91.23% Prizes/Premiums 53,869 813,504 759,635 93.38% 882,366 828,497 93.89% Supplies 899,359 1,770,292 870,933 49.20% 1,729,164 829,805 47.99% Printing 85,021 542,310 457,289 84.32% 479,651 394,630 82.27% Parking 2,000 2,000 100.00% 1,637 1,637 100.00% Surf & Turf 1,005,392 958,190 (47,202) (4.93%) 1,077,063 71,671 6.65% Transportation 528,000 528,000 100.00% 406,138 406,138 100.00% Contract Security & Medical 166,628 2,709,100 2,542,472 93.85% 2,544,858 2,378,230 93.45% Telephone 89,819 106,472 16,653 15.64% 94,762 4,943 5.22% Utilities 1,358,058 1,824,575 466,517 25.57% 1,988,481 630,423 31.70% Repairs & Maintenance 311,471 623,504 312,033 50.05% 565,333 253,862 44.90% Insurance 950,444 897,748 (52,696) (5.87%) 828,932 (121,512) (14.66%) Equipment Rental 130,492 1,153,684 1,023,192 88.69% 1,328,771 1,198,279 90.18% Other Administration 52,498 282,803 230,305 81.44% 268,217 215,719 80.43% Merchandise 30,740 290,800 260,060 89.43% 252,296 221,556 87.82% Lottery 18,950 111,000 92,050 82.93% 95,762 76,812 80.21% Depreciation Expense 811,257 1,227,500 416,243 33.91% 1,066,030 254,773 23.90% Interest/Other Expense 532,268 1,680,339 1,148,071 68.32% 1,217,288 685,020 56.27% Total Operating Expenses $23,415,565 $72,855,079 $49,439,514 67.86% $69,932,718 $46,517,153 66.52%
Net Operating Income ($10,409,541) $5,337,288 ($15,746,829) (295.03%) $4,372,635 ($14,782,176) (338.06%)
Net Income/(Loss) ($10,409,541) $5,337,288 ($15,746,829) (295.03%) $4,372,635 ($14,782,176) (338.06%)
*--In addition to the Pledged Revenues, previous year transfers from the District to RTA as paid-in-capital include $1,135,000 in 2015, $1,165,000 in 2014, $5,240,000 in 2013, $1,090,041 in 2012, $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 $26,059,914
Page 36
5. COMMITTEE REPORTS
G. Legal Committee – Richard Valdez, Chair
1. Committee Report Informational/Action: To be discussed in Executive Session.
Page 37 10. FOR YOUR INFORMATION
A. Correspondence: Copies of correspondence received: Informational http://www.delmarfairgrounds.com/board
Page 38 CALIFORNIA DEPARTMENT OF FOOD & AGRICULTURE Koren Ross, Secretory
October 27, 2020 F2020-14
TO: All Fairs
SUBJECT: 2020 Facility Condition Assessment and Proposition 68 – SB 5 Bond Measure (SB 5) Cycle 2 Funds
The California Department of Food and Agriculture (CDFA), Fairs and Expositions Branch (F&E) is pleased to announce that Cycle 2 facility improvement projects have been pre-selected to advance to the next step of the SB 5 award process. A total of 248 fairground facility improvement projects were submitted by the 64 fairs that participated in the 2020 Facility Condition Assessment conducted by the California Construction Authority (CCA). The top priority project for each fairground that participated in the 2020 Assessment was scored and ranked by a selection committee comprised of CDFA and fair industry representatives that were charged with the responsibility of evaluating the projects submitted for consideration. The seven projects that were pre-selected ranked the highest through the first round of scoring and will move onto the next step of the process, the deep dive.
Pre-Selected Fairs Facility Improvement Estimated Project Cost Fairgrounds Name Project (Pre-Deep Dive) /1 18th DAA - Eastern Sierra Charles Brown Heating $400,400 Tri-County Fair and Air System 24th DAA - Tulare County Building 3 Repairs $1,250,000 Fair 31st DAA - Ventura County Santa Cruz Hall Roof $468,000 Fair Replacement 39th DAA - Calaveras Sewer System Upgrade - $1,375,000 County Fair Phase 2 45th DAA - California Mid- Electrical System Upgrade $1,500,000 Winter Fair & Fiesta Emergency Facility Butte County Fair $934,076 Upgrade Exposition Building Salinas Valley Fair Improvements for $321,750 Emergency Use
/1 The estimated project cost will be adjusted based on the results of the deep dive.
Fairs & Expositions Branch ● 1220 N Street ● Sacramento, California 95814 State of California Telephone: 916.999.3000 ● www.cdfa.ca.gov/fe Gavin Newsom, GovernorPage 39 F2020-14 Facility Condition Assessment October 27, 2020 Page 2
The deep dive process will consist of a more thorough review of the project, conducted by CCA or the Department of General Services (DGS). The purpose of the deep dive is for CCA and DGS to perform an in-depth inspection to determine an accurate scope of work (SOW), budget, and estimated timeline for each pre-selected project. Once the deep dive process has been completed, the seven pre-selected projects will undergo a second round of scoring to help identify which projects will be awarded funds from Cycle 2 of SB 5. There are about $6.2 million available in Cycle 2 and funds are expected to be awarded in early 2021.
If your fairground participated in the two previous Facility Condition Assessments, but has not been awarded funds, or been pre-selected, please be advised that during Cycle 3 (the last funding cycle for Prop 68 – SB 5) there will be one additional opportunity for your projects to be funded. There are $6 million available for Cycle 3 allocation, but F&E has decided to reserve $1.5 million for projects that go over the original estimated budget. This leaves about $4.5 million to be awarded in Cycle 3. In order to expedite Cycle 3 allocations, we anticipate using the Facility Condition Assessments and scores that we already have on file. Cycle 3 funding is expected to be awarded in Spring 2021. Please continue reading for information on opportunities to receive future funding.
As a reminder, the goal of the Facility Condition Assessment is to create a Fairground Facility Condition Improvement Project List that can be updated periodically to make sure it remains as current and relevant as possible. If you did not submit up to five projects during the past two Facility Condition Assessment periods conducted by CCA, you still have the opportunity to do so. Please contact F&E deferred maintenance staff, Sofia Goss at [email protected], or Greg Ferrero at [email protected] for information on the process to submit additional projects. Finally, if your fair previously submitted projects that have been, or will be initiated prior to receiving funding from CDFA, please let us know so we can update the project list.
We are excited to continue awarding SB 5 funds and look forward to completing more facility improvement projects on fairgrounds across the state.
If you have any questions, please contact Mike Francesconi with Fairs and Expositions at (916) 900-5365.
Sincerely,
John Quiroz Branch Chief
Page 40 Donna O'Leary
From: adam
October 27, 2020
Board of Directors 22nd DAA 2260 Jimmy Durante Blvd. Del Mar, CA
Board of Directors,
This letter is a call to your attention, what I believe is a substantial violation of the Bagley-Keene open meetings act. Such actions jeopardize the fairness of the publics examination of the people’s business and for the unfair biased against myself and others in future business opportunities with the 22ND District Agriculture Association.
The board of directors, from the direction of the board, is presented with parameters of public comment at public board meetings; dated August 11, 2020 by council for the district, Josh Caplan. Mr. Caplan advised the board on multiple aspects of public comment. The two in question today and the three not addressed are directly prohibited by the Bagley-Keene act and public records act. The boards ability to interact with the public during public comment, the administrative regulations guiding public comment, the boards discretion to criticize public speakers, deprive the public of information, and falsifying public records request.
Mr. Caplan advised the board that they can interact with a public speaker on an agenda item. However, the board should not interact with a public speaker on a non agenda item. The board was also advised that any regulations set on one public speaker must be consistent, from the start of the meeting, throughout the meeting i.e. if one public speaker is limited to two minutes then every speaker must follow the same guideline of two minutes or if one speaker is allowed to speak after a committee report than all must be allowed to speak after hearing a committee report.
Adam West, owner of All State 38, Inc requested at the October 20, 2020 board meeting if he could make his public comment after the committee report. President Valdez told him he would like to keep all the comments together and to proceed. At previous board meetings public speakers were given the choice to speak before or after the individual committee reports. At this same meeting, Martha Sullivan asked to hear the sustainability committee report first before making a public comment. She was given that opportunity but when Adam West asked to hear the report first he was denied.
Having the ability to hear a committee report before making a public comment gives the public speaker all of the current up to date information to make an educated public comment. In addition, this ability gives the public
1 Page 41 speaker (whom may have a financial interest in the agenda item) the time to evaluate what he or she might want to comment further.
Also, at the board meeting on October 20, 2020 Mr. West addressed the statement by President Valdez that Debraun West made comments that were inaccurate. Mr. West asked Mr. Valdez if he had time to review the letter and attachments that were supplied in the board packet. Mr. Valdez told the public that this wasn’t questions and answers. Mr. West then asked “Is there anything inaccurate that you would like me to elaborate on or explain.”
In the Bagley-Keene open meetings act, The law specifically provides that a state agency may not prohibit public criticism of its policies, programs, or services, or of the acts of omissions of the agency (11125.7(c))
Mr. Caplans parameters explained that the board could engage the public on agenda items. Mr. Valdez made it abundantly clear, for the record, that Mrs. West comments were inaccurate. Hopefully, after reviewing the letter and attachments, Mr. West gave Mr. Valdez the opportunity to retract his previous statement regarding Mrs. West or ask questions that might need to be clarified further.
At the board meetings on March 10, 2020, August 11, 2020 and September 15, 2020, President Valdez publicly critizied Debraun West, an executive of All State, 38 Inc. Mr. Valdez, stated for the record, “that the previous speakers comments were inaccurate”. The board was supplied with Mrs. West comments along with documents showing the accuracy of her comments but the board never addressed the information supplied.
Mrs. West was told, by both Mr. Valdez and Director Watson after addressing fair staff by their names on March 10, 2020, addressing fair staff by their names wouldn’t help her cause.
Retaliation, intimidation and inciting fear into the public speakers will only prohibit speakers abilities from continuing to address the board at future public board meetings.
In the Bagley-Keene open meeting act, The law provides for misdemeanor penalties against individual members of the body if the member attends a meeting in violation of the act with the intent to deprive the public of information to which he or she knows, or has reason to know, the public is entitled to receive (11130.7)
Not withstanding section 6255 or any other provisions of law, agendas of public meetings and other writings, when distributed to all or a majority of all, of the members of a state body by any person in connection with a matter subject to discussion or consideration at a public meeting of the body, are disclosable public records under the California public records act (Chapter 3.5(commencing with section 6250)of division 7 of title 1)
Mr. Valdez requested from Adam West to submit his comments made at the September 15, 2020 board meeting to be included in the next board meeting packet. Mr. West emailed a letter, along with exhibit attachments, to the board for review. The letter was included in the board packet but not all of the important documents that proved the accuracy of previous comments. Mr. West emailed President Valdez, Chairman Schenk, CEO Moore, Donna O’Leary, and Josh Caplan about the attachments not included in the board packet at 8:41 AM, Monday October 19, 2020.
Mr. Valdez, at the beginning of the October board meeting, said that the attachments to the letters submitted were not required to be in the board packet and if anyone wanted to view them they would have to request them as a public records request.
2 Page 42 The letter, along with attachments, submitted by All State 38, Inc was distributed to all the board members and fair staff. The letter submitted was incomplete without ones ability to view the attachments. The information contained in the letter was extremely important to address the public scrutiny by not including this in its entirety in the board packet, therefore, deprived the public of information and the ability of further inspection.
The public records request process through the fair is a lengthy process, anyone wanting to view the information for the committee report could not do so in a fair and timely manner. This information may or may not have been omitted in the board packet to possibly add more obstacles for anyone trying to understand the contracting policies of the 22nd DAA.
A public records request received on August 3, 2019, from Donna Ruhm, seemed inaccurate. The midway food grosses were complied on an excel spreadsheet from Donna Ruhm and are inconsistent with the fairs publicly requested contracts. There may be a fair explanation for this, however, it seems a mistake was made. The contract for the employee food stand, Vivs Cafe, was for a rental rate of 12.5% but on the spread sheet it shows the food stand paying a rental rate of 25%.
Above are serious concerns regarding the Brown act, Bagley-Keene open meetings act, and the public records act. The board of directors and staff serve the public, and the public has right to make sure the people’s business is being done in a fair and transparent way.
All State 38, Inc and others have grave concerns to believe due to the reasons explained in this letter, that they will not receive a fair and unbiased evaluation without prejudice. The district is on their fifth attempt to contract a single vendor for midway purposes and the belief that the RFP process will eliminate competition by narrowing the qualifications to award a predetermined participant are warranted.
This letter asks for the board to cure these reoccurring potential violations of state acts and provide us with a written response. Address the biased conflict of interest claims that have evolved throughout the past midway RFPs for digital ticketing/midway games and recuse any persons associated with previous protested solicitations.
All State 38, Inc hopes the district will offer participates to a fair and equal process that promotes competition without limiting participation by narrowing qualifications.
Sent from my iPhone
3 Page 43 Donna O'Leary
From: adam
****Important, please be sure to open attachments from trusted sources only. If there is any doubt, please contact the helpdesk first.**** September 30, 2020
Board of Directors 22nd District Agriculture Association Del Mar Fairgrounds 2260 Jimmy Durante Blvd. Del Mar, CA 92014
Dear President Valdez and Board Members:
My name is Adam West, owner of All State 38, Inc. All State, like many others, has been a proud vendor of past, current, and hopefully future San Diego county fairs. Over thirty years ago, the San Diego county fair made the difficult decision to transition into a full independent midway format with hopes of establishing a midway that fairs across the country would replicate. I was taught that being mirrored is perceived as a compliment instead of a threat. Unfortunately, the fair that was dreamt of in 1986 is drifting away. This letter is written in responses to President Valdez’s request for public comment submission from the September board meeting.
Fairs across the country have made the shift to independent midways; Minnesota State Fair, Wisconsin State Fair, Ventura County Fair, and the Iowa State Fair have all followed the lead of Del Mar. These fairs independently contract all of their midway vendors while limiting the space that any one company can contract. Limiting space, which was the policy of the San Diego county fair until December 2018, was created to protect both the fair and the vendors. The San Diego county fair policy limiting vendors to no more than two food stands, seven carnival games, or three hundred square feet of commercial space, ensured that the best of each category had the opportunity to participate, thus, producing the best fair possible. These policies ensure the fair that no one company could have negative effects on the fair due to change in circumstances and force the fair to make drastic, and often unforeseen last‐minute changes. [Please Reference Exhibit A]
In 2019, the fair contracted one single vendor to handle the majority of the carnival games in exchange for the use of their digital ticketing system for free. This put the fair in a very vulnerable position. If this, one vendor, decided to make any changes the fair would be compelled to bend to the wants of a single vendor. As we have found out from the controversial RFP that is still ongoing, having a vendor handle the fairs digital ticketing system instead of the fair handling its own digital ticketing system affects the fairs selling of advance tickets, redeeming tickets from year to year, and the fairs ability to use or offer a digital ticketing system at hundreds of other events. In a world post COVID‐19 this is critical for an event venue and the safety of its patrons.
The State fair of Texas was an independent midway before Del Mar and was the first independent midway to implement a digital cashless system. They bought a digital ticketing system that was used exclusively for their carnival games with intentions of using it from fence to fence in the future. I believe the San Diego county fairs concessions director went to Dallas and witnessed the system first hand. Unlike San Diego, the State fair of Texas has implemented the digital ticketing system while creating more confidence with its vendors for the future of the fair. By establishing a solid foundation of trust with its vendors the State Fair of Texas’s game revenue has ballooned to $6,000,000, therefore, generating millions of dollars in revenue for the fair.
Every vendor, at every fair are direct partners with the fair. They share revenue and share in the responsibility of creating an amazing experience for every fair patron. This is what the founders of the independent midway in Del Mar were striving to create. I have been a successful partner with the fair for many years and hope that my participation has been part of the success of the fair as well. All State has strived to give individual experiences of joy and happiness to everyone that participates at our games. Having competition between vendors on your independent midway ensures an atmosphere where the free market gets to pick where they spend their hard‐earned money. Fairs are places where community members get to go to forget about everyday life and disappear into a world of dreams.
At the September board meeting after Debraun West’s public comment, a member of All State, President Valdez made a statement that her comments relating to the previous contracting methods of the district were inaccurate. All State has repeatedly asked for meetings with the district, the fair operations committee, fair staff, and the fair board but continue to be denied and ignored. We have been told that the fair cannot discuss the RFP with potential proposers but we haven’t asked to discuss specifics on the RFP. At the same time, we are being told, that the concessions director is reaching out to our competitors and discussing the exact same thing. We are frustrated and find it unprofessional to call out a member of the public about inaccurate statements when we don’t believe the board is getting all of the information to make that determination. For this reason, we are again requesting a meeting with the fair operations committee and eor th fair board. 1 Page 44
When I started my public comment, at the same meeting, I was stopped and asked to slow down for the reporter, at that time I asked President Valdez for a meeting to discuss his statements concerning Debraun West comments. President Valdez asked me to submit our comments to the board and I believe he said, without getting the transcripts, they would be attached to the next fair board meeting agenda packet. All State is not asking for anything that has not been previously extended to our competition and want nothing more than to be an asset to the fair in the future.
I am submitting the previous public comments by Adam and Debraun West along with supporting documents and explanations relating to the San Diego county fair, thus, demonstrating our accuracy. These are the comments that would have been said if the three minutes of public comment was not reduced to two minutes at the start of the meeting.
Debraun West comments, 22ND DAA BOARD MEETING:
“Good afternoon,
My name is Debraun West, in the board packet, under the fair operations committee report there are two words that seem to jump right out at me, “FAIR AND LEGALLY”. “The most FAIR AND LEGALLY correct course of action”.
I am left speechless, we have been repeatedly denied our requests for a meeting with fair staff, even though RCS has had dozens of meetings. These meetings have given RCS an unfair advantage. Negotiations with RCS have created a biased against anyone trying to compete and these confidential meetings create a noncompetitive atmosphere. [Please Reference Exhibit A]
They had in person meetings where they negotiated themselves a deal to a near monopoly. In various emails things were talked about this way, RCS said, “multiple other unknown variables we are trying to be conscious on this trial year”, [Exhibit B] The previous CEO (Tim Fennell) said, “especially given that the system would not otherwise be in operation and that RCS will experience revenue increases in ride grosses.” [Please Reference Exhibit C]
This wasn’t fair, especially when fair staffs' secret negotiations with RCS are talked about like this,y “dela getting the word out (after IAFE) or go forward assuming board approval, Tony is coming down tomorrow, I don’t think I can't not brief him.” Tony is the concessions manager and was kept in the dark, WHY?! [Please Reference Exhibit D]
RCS had firsthand knowledge of what the fair wanted, its thoughts, its concerns, and built up relationships that All State has been denied over and over again. Even though it's All States legal constitutional right to solicit government. [Please Reference Exhibit E]
The FAIR AND LEGAL thing to do would have been to issue an RFP before negotiating ta contrac and giving a vendor a trial year. In 2019 the district advertised the RCS Fun Pass for 2020 before the proposals had even been submitted. [Please Reference Exhibit F]
FAIR AND LEGAL…………..
The DGS hearing officer that upheld All States protest talked about fairness, in his decision, he says, “to proceed brings uncomfortable questions. What if All State had managed to win the bid or RCS determined to have committed a material deviation in technical or cost evaluation and RCS’s bid rejected? Would All State have been awarded the contract in the interest of fairness? [Please Reference Exhibit G]
The only fair thing to do now, after all this is to give All State the same trail year opportunity that RCS was privileged to and let All State demonstrate its state‐of‐the‐art contactless digital ticketing system. [Please Reference Exhibit H]
Let's finally do what's FAIR AND LEGAL dan level the playing field or accept All States offer of up to $1,000,000 to purchase your own system! [Please Reference Exhibit I]
LETS FINALLY DO WHATS FAIR AND LEGAL!
Thank you”
Adam West comments, 22ND DAA BOARD MEETING:
“Good Afternoon,
My name is Adam West, unfortunately with the understandable complications from COVID‐19, fair staff has been slow to act in releasing a new RFP for midway games. In the past two years there have been two RFP’s that have ended in the same position, having to be withdrawn due to protest and time constraints. The fair and its vendors can't wait until April of next year to know who will handle $15,000,000 worth of carnival tickets.
With previous RFP’s lasting up to seven months it would be unprofessional to proceed with one this late in the year. It is neither fair nor legal to release an RFP that will disadvantage everyone except RCS. This board has the fiduciary responsibility to be FAIR AND LEGAL, what has happened in past RFP’s was just the opposite of that. [Please Reference Exhibit R]
With COVID‐19 even further complicating any pursuit of change, it's the perfect opportunity for all involved to take a pause. If any situation warranted a pause more than ever it would be now. No one knows what next year's fair will bring, if we even have a fair, or what would it look like?
2 Page 45 The uncharacteristic combining of services for the fair, the financial component of a FREE digital ticketing system can't be evaluated on an RFP at this time unless the fair can guarantee the $20,000,000 game gross over the next five years to compensate for a FREE digital ticketing system.
There is no rway fo the district to be FAIR AND LEGAL without giving All State the same trial year as RCS. The requirement of the presentation for RFP 19‐04, section 3.8, was “the demonstration must include a demonstration of proposers digital ticketing equipment and systems”. All State 100% demonstrated live, how to buy, sell, and use digital tickets. On the contrary RCS did no demonstration or did they show how their system worked, WHY? [Please Reference Exhibit J]
Their trial year was their demonstration. RCS’s system is way too complicated and requires so much time to bring online it would haven take days to setup. All State was able to completely become operational in a matter of minutes. [Please Reference Exhibit K]
The evaluators seemed to be using the RCS barcode system as a constant against All States RFID NFC system, which is like apples and oranges different in execution.
So, RCS DIDN’T EVEN demonstrate their ticketing system at the demo but received a 99.5 out of 100 but All State only received a 14.5 out of 100 from the same evaluator while successfully demonstrating their digital ticketing system. [Please Reference Exhibit K]
HOW IS THIS EVEN POSSIBLE? HOW IS THIS DFAIR AN LEGAL, ITS NOT!
All State asks that the district give it the same trail year as RCS to demonstrate its contactless digital ticketing system or return to how they have successfully contracted games in the past.
Thank you”
Previously addressed concerns:
At the August board meeting we spoke, efor som reason the sound had a lot of feedback and I’m not sure if our comments were heard clearly. We discussed two points that were concerning to us; after being advised by President Valdez to submit our comments we wanted to recap our august comments as well.
We made multiple public records requests prior to RFP 19‐04 coming out, our intentions were to see if what we were told about the potential digital ticketing system revenue increases became reality. We also felt that there was a lot of favoritism towards our competition that put All State and other vendors at a disadvantage.
The concessions director seems to be in charge of the public records request. The person in charge of contracting, collecting rent, giving out locations, auditing, developing RFP’s and public oversight seems to be all the same person. This is a lot of work for one person but seems to have a tremendous conflict of interest and leaves large gaps in internal controls.
Leading up to the fair, it was required that non‐RCS vendors purchase expensive red canvas to match that of RCS for the first time in fair history; All State complied. The policy of using styrene in the stuffed animals due to environmental concerns was suddenly changed. This is very odd because the reason for this policy being in place over the last decade was to protect the storm drains and waters around the fair from being contaminated with the fluffy white stuff that comes out of stuffed animals. The styrene material has not changed over the years. However, the toys with styrene cost much less than those that were required in the past. If you are the sole vendor for the games it would save hundreds of thousands of dollars in plush cost. This is an advantage given to RCS that was not given to vendors in previous years.
During the location process in previous years which occurred before the fair game vendors received space numbers from the concession's manager, this last time we had to talk to an employee of RCS to get our space numbers. Our competition was controlling the space allocation. This is a problem that can spiral out of control because RCS is also the largest carnival ride and food vendor on the midway, they use multiple different business names in order to go unnoticed.
On the first Saturday of the fair, during the owners meeting we were given envelopes full of blank report sheets to track our inventory. These are not normal for the San Diego county fair, but are a good way for tracking the cost of sales. It was odd that RCS wasn’t given the same packets as the tres of us. This again was a special privilege given to the majority holder that discriminated the other game vendors from the majority holder.
When we reviewed the public records that we requested and reviewed the proposal submitted by RCS we found some concerning irregularities. The mandatory stock reports that RCS was required to fill out were just a few pages for fifty plus games, while we were required to provide one page, per game, per day. We also noticed that the stock report submitted with their proposal was the same day as one of the records we received during the 2019 fair. There is one problem, they don’t match, the report submitted to the state agency didn’t have the same numbers as the one they submitted with their proposal for the same day. There may be a logical explanation for this but I cannot think of one. [Please Reference Exhibit L]
RCS failed to mention, on their proposal, that they settled a labor lawsuit with employees who were not fairly paid overtime. It is also fair to mention that the concessions department in 2019 required vendors to only pay hourly wage to employees and not commission and/or hourly, which took place in previous years. RCS conveniently, only pays hourly and not commission. [Please Reference Exhibit M]
RCS was very proud of their employee services during their presentation, which can be reviewed from the transcripts. They were also highly questioned about their Christian beliefs and were asked what kind of church groups they hire; their answer was Christian church groups. This presents an obvious problem. [Please Reference Exhibit N]
3 Page 46 The co‐owner of RCS, Charlene Leavitt, told DGS in her response to our protest that RCS‐GDR has never owned or operated carnival games. We find this inaccurate and the fair should find this statement even more concerning because in 2018 the fair contracted RCS‐GDR under contract number 70015. [Please Reference Exhibit O]
RCS went to great lengths in their proposal to state that their digital ticketing system has NEVER had a complete system failure. This was repeated over and over again, unfortunately this again is not true. In the RCS proposal, their “back up” plan was to transition into paper tickets. At the Houston livestock show they had a complete system failure and resorted to paper tickets. When RCS responded to our protest, they denied this and said it was not true. Many people witnessed this failure including Alexander Martos, the windstorm roller coaster ride supervisor, and signed a ndeclaratio to that. [Please Reference Exhibit S]
We also requested the 2019 food revenue for the midway, we wanted to analyze the grosses for different sections of the midway. The midway food was the only part of the midway that did not change; they continued to just accept cash or credit as they had in the past. The concessions director told everyone our grosses would be up 15‐30%. Ride revenue was down to the lowest level in five years, over $900,000 down. Midway game rent to the fair was up but only due to a change in rent structure. Thee gam vendors went from paying a flat, up front, rent to a percentage‐based rent, the concession department failed to raise the flat rate rent to keep up with the increases in grosses. It was not cost prohibitive to buy the digital ticketing system in house but it was cost prohibitive to contract RCS. [Please Reference Exhibit P]
The only area to compare the midway was the food, when examining the food grosses and rental spreadsheets, provided by the concession's director, we again found some very concerning irregularities. We know from a previous public records request that RCS’s Vivs Cafe has a special rental deal with the fair to only pay 12.5% rent compared to the other food concessions at 25%. One of the spreadsheets shows a gross of $49,171 with a rent paid of $12,292, which is 25%, but their special rental deal is 12.5%.
The grosses just don’t seem to add up, this is the employee cafe which is open before and after the fair starts and ends. Viv's Cafe is said to be one of the top 10 producers of revenue at the fair, however, it is showing around $1300 per day in revenue? This is logically impossible. After talking to multiple food vendors, they do not agree that the grosses and rental amounts represented for their concessions on the documents from the concession's director are accurate. [Please Reference Exhibit Q]
All State 38, Inc wishes only the best for the San Diego county fair, its patrons and eth fair industry. We strive every day to entertain the customers we serve better than anyone else. Over the past 24 months a lot of things have been changed and these changes have affected a lot of small family businesses. Everyone welcomes opportunity when the playing field is level, however, when one company is given special treatment and has a separate set of rules, it is only fair to look at the instant replay.
All State has asked, more times than we can count, for meetings with the concessions department, executive fair management, the fair operations committee, and the 22nd DAA rfai board but our requests are repeatedly denied. Our competition continues to be in the conversation with fair staff about the future of digital ticketing and carnival games, while at the same time we are being told its inappropriate.
In the state of California everyone has the legal right to solicit government, for this reason, along with many others, All State, again, requests a meeting with the fair operations committee. Our final hope is that the truth doesn’t fall on deaf ears and we can all participate in the planning of the San Diego county fair, making it better than ever in 2021.
Sincerely,
Adam West
All State 38, Inc. Adam West | President [email protected] 763. 232. 2305
4 Page 47 Agenda Item 10A.
ATTACHMENT TO ADAM WEST Correspondence Dated September 30, 2020
EXHIBITS A-S (37 pages) posted on delmarfairgrounds.com http://www.delmarfairgrounds.com/board
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