Santana: OC Fairgrounds Needs Strong Auditing After Horse Fiasco

SPENCER CUSTODIO, Voice of OC

Horses inside stables at the OC Fairgrounds equestrian center April 26, 2018.

The recent exposure of a quiet lobby effort by OC Fairgrounds executives to downsize community horse stables at the 150-acre state fairgrounds in Costa Mesa is prompting questions about whether the OC Fairgrounds needs an independent performance auditor.

Fair board members have put a discussion about a performance auditor on the agenda for their next board meeting, scheduled for Thursday morning, May 24th at the OC Fair and Event Center (OCFEC) in Costa Mesa.

As Orange County gears up for it’s summer fair in July, it’s perfect timing for this kind of a discussion, asking ourselves what kind of a fairgrounds experience do we really want.

Do we want a commercial operation, focused on crowds, traffic and revenue generation?

Or do we want a fairgrounds operation guided more by offering year-round, low cost, recreational and cultural opportunities for our local community…like horses?

They really are two different paths.

I thought this had been resolved back in 2011 when Gov. Jerry Brown started appointing fair board members who favored a community-focused fairgrounds.

Indeed, when I was last at the fairgrounds for the Kid’s OC Marathon earlier this month, I was impressed by the sprawling rows of planters at Centennial Farms, the Workers’ Memorial, the amazing Heroes Hall veterans museum, the cool modernistic front to the Pacific Amphitheater.

But last month, when we saw controversial plans unveiled to get rid of onsite equestrian facilities in favor of expanded RV parking, questions started to mount.

I thought keeping horses at the fairgrounds – community arenas that are quickly disappearing across Orange County –were the kinds of community services that were central to the post-privatization OC Fairgrounds.

I got a huge response to my column last week, which led to me connecting with the community group, Friends and Neighbors of the Orange County Fairgrounds. Our ensuing discussion is featured in next week’s podcast about the future of the OC Fairgrounds.

There seem to be a lot of people asking themselves the same question.

Does the Fair Board or the fair industry run our fairgrounds?

Nearly a decade ago, when Gov. Arnold Schwarzenegger’s fair board appointees moved hard toward a commercial vision for that property – arguing it was underutilized – more than 50,000 residents signed petitions against privatization.

When Gov. Brown took office in 2011, there was a seeming change in the types of fair board members that Brown appointed, with more of a focus on community leaders and less on the traditional appointment approach…campaign donors.

There was a lot of discussion at the time about the need to completely change the management staff and focus at the OCFEC — based on what so many activists found out about the fair industry during their battle against privatization.

Board members ignored those suggestions.

Yet it seems that while management names have changed, the tilt toward a fair industry focus continues.

That’s a shame.

I keep hearing about potential OCFEC plans to float bonds to expand operations – which should be a huge red flag about where the executives and industry want to take the property.

Once debt is incurred, the fairgrounds will be permanently stuck on a Jr. Disneyland development ride – in the sense that commercial operations will have to ramp up to keep up with bond payments and reserves.

Keep in mind that the OC Fairgrounds now sits on more than $40 million in reserves.

Fair board members should be wary of any plans to issue debt.

Instead, they should focus like a laser on the establishment of a Performance Auditor.

An executive consultant who reports directly to the board of directors would allow them to really analyze business operations at the fairgrounds on a regular basis with an independent lens.

Yet OCFEC executives seem to have skillfully delayed implementation of such a plan.

Because of the manner that the item was listed on the agenda – as a discussion item as opposed to an action item – OCFEC board members next week can only talk about the concept of a Performance Auditor. They can’t take action.

Now, I have written previously about the importance of considering part-time county supervisors as a way of avoiding politicization of our public sector budgets.

Yet the biggest challenge facing part-timers in government is that bureaucracy often defines debates and policy issues in a way that can limit the oversight ability of a board of directors.

Take for example, the controversial master site study that was unveiled last month by fairgrounds consultants.

The community group – Friends and Neighbors of the Orange County Fairgrounds – did some public records requests about the interaction between staff and consultants and they found an interesting nugget they shared – about who really decides what fairgrounds uses stay or go.

It seems that VP of Operations Ken Karns communicated with consultants about his “wish list” for the property — ahead of any public meetings.

Virtually all of Karns suggestions were adopted by consultants – even those that were met with significant public opposition, such as realigning the main traffic entrance to the facility.

Fair Board Spokesperson Terry Moore defended Karns’ early interaction with consultants.

“In March 2017 Ken Karns, VP of Operations, provided the consultants with a list of potential opportunities that might be considered in the Master Site Plan. The list was based on his observations on the condition and use of the grounds during his first eight months on the job. There were many items on that list that the public might not know were needed such as restroom upgrades and storm water management. Based on input from stakeholder groups, the Board and the public, some items on the list were ultimately included in the various draft versions of the plan and others were not. The Board of Directors also provided initial input to the consultants when the project was initiated since this is a Board of Directors’ project. The consultants take direction on the plan from the Board’s Master Site Plan Task Force members Douglas La Belle and Robert Ruiz who have worked collaboratively with consultants and staff through the entire process.”

Moore concluded by noting, “Decisions on the plan are made by the Board of Directors.”

While that is technically correct, the controversy over the equestrian stables shows how government staff can often influence their elected or appointed overseers.

A performance auditor – reporting directly to the board of directors – can really kick the tires at the OC Fairgrounds, reviewing management and policy questions in real time.

That kind of auditor should be in play by the time the July fair comes along to allow for a real time analysis of those operations.

That’s why it should be more than just a discussion item on May 24.

It’s time for action.