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2000-958-Minutes for Meeting October 02,2000 Recorded 10/19/2000VOL: CJ2000 PAGE: 958 RECORDED DOCUMENT STATE OF OREGON COUNTY OF DESCHUTES *02000-958 * Vol -Page Printed: 10/20/2000 10:44:51 DO NOT REMOVE THIS CERTIFICATE (This certificate constitutes a part of the original instrument in accordance with ORS 205.180(2). Removal of this certificate may invalidate this certificate and affect the admissibility of the original instrument into evidence in any legal proceeding.) I hereby certify that the attached instrument was received and duly recorded in Deschutes County records: DATE AND TIME: DOCUMENT TYPE: Oct. 19, 2000; 4:47 p.m. Special Meeting (CJ) NUMBER OF PAGES: 22 MARY SUE PENHOLLOW DESCHUTES COUNTY CLERK KEYPU HE OCT 2000 cjway." 95A MINUTES MEETING OF MEMBERS OF DESCHUTES COUNTY FAIAdA;& A 8N, FAIR BOARD, BOARD OF COUNTY COMMISSION S. i J-�i i. AND INTERESTED CITIZENS COUN1 Y CLERK MONDAY, OCTOBER 2, 2000 DESCHUTES COUNTY ADMINISTRATION BUILDING 1130 NW HARRIMAN ST., BEND David Bishop, Chair of the Deschutes County Fair Board, opened the meeting at S: 30 p. m. See Exhibit I - Copy of Meeting Sign -in Sheets (2) Present at the meeting were David Bishop, Don Miltenberger, Lee Smith, Jim Diegel and John Leavitt, Deschutes County Fair Board; Elton Gregory, Barry Slaughter, Ron Nelson, Chris McMullen and Rachel McIntosh, Deschutes County Fair Association; Greg Lynch, Attorney for the Fair Association; Deschutes County Commissioners Linda Swearingen, Dennis Luke and Tom DeWolf. Also in attendance were Mike Maier, County Administrator; Rick Isham, County Legal Counsel; Marty Wynne, Deschutes County Treasurer; Dick Donaca, CPA for the Fair Association; Barney Lerten, Mark Toy and Anne Aurand, representatives of the media; and Larry Kimmel, Larry and Karen Walker, Pamela Watkins, Mike Daly, Andrea Blum, Diana Beathe and Charles Brewer, citizens. BISHOP: There are two things we need to talk about tonight. Dick Donaca will give us -the budget report on the Fairgrounds. Also, we want to give you all an update of where we are on the Family Motor Coach Association issue. I spoke with Jerry Yeatts (of the Family Motor Coach Association) last week, and contingent upon the approval and commitment of the Deschutes County Board of Commissioners to build the parking lots, and identifying and clarifying the terms of the contract, they are willing to move forward. I suggested that perhaps he visit here, and he appeared interested in coming here. Linda Swearingen has had contact with him, too. Minutes of Meeting: Fair Board, Fair Association, Page I of 20 Pages Board of County Commissioners and Others S WEARINGEN: I had a very positive conversation with him. They're excited about coming. One of their concerns is that we need to put together a timeline and need to abide by it. I stressed to him our belief that we would be able to perform, and that we would love to have them here; and that we have a tentative commitment from the Oregon Economic Development Department and a strong commitment from the community to back the rest of the loan. He seems ready to come, and is willing to work on renegotiating the contract so that we can have a successful event in August 2001. LUKE: Did Rick talk about where he might be on the RFP (for the engineering and construction of the parking lot)? ISHAM: The RFP is out. I've spoken with one person regarding it, and it's due in on Friday at 4 p.m. LUKE: Representative Westlund called and left a message for us, too, about OEDD. He said they don't need the engineering study, but we do. We don't know how much to ask for until we know what it's going to cost. BISHOP: The only two things that we have put on the timeline clock is this Friday, October 6, to have the RFP submitted, returned, and the vendor selected; and by November 1 we would have a contractor selected. ISHAM: There's a preliminary application that's been submitted. The City of Redmond asked me when we wanted a response; I told them we wanted a response as soon as possible, but Bob Quitmeier (City of Redmond) said it would take two weeks, and as of last Friday it was ten days. I told them I was expecting their response by October 14. I was told that they aren't sure that they would have information from other people, so I requested that they call them and ask them to respond, because of the tight timeline. If there's a contractor selected, the application could be submitted as early as November 1. BISHOP: Any other comments about the parking lot construction project or the Family Motor Coach Association? Minutes of Meeting: Fair Board, Fair Association, Page 2 of 20 Pages Board of County Commissioners and Others (No further comments were offered.) BISHOP: I would like to thank Dick Donaca and his staff for being able to step into a situation that was very timely, and their efforts are appreciated. I understand that the Commissioners really put the heat on for you (Mr. Donaca) to do an accurate and timely job. Thank you for your prompt response in moving forward and getting us to where we are. DONACA: (Passed out copies of his financial report, Exhibit 2). What we had been asked to do was to find out where the Fair Association is presently. The date on the letter is September 26, which is the last time we spoke with anyone at the Association and were actually involved in the records. I did go down last Friday (September 27) and talked with Elton; he looked at the list, and he couldn't think of anything more. The detail is shown on the back pages. What it really comes down to is a current accounts payable of $554,000. Money in the bank as of that date was about $90,000. This left a liability of about $462,000 as of September 26. Other things that I feel you should be aware of are the long- term contracts. There's a contract for $163,000 for rock crushing; some contracts for equipment leases for about $70,000; and of course there's the monthly operating costs and payroll for the Fair Association. In addition to that, in the last paragraph I talked about the County's Fairground construction. There is an $800,000 loan due plus interest; and the cash deficit in that fund is $255,000. There's a long-term contract with the City of Redmond for street improvements - an LID, I think 19th Street. Theoretically there is property available that may take care of all these debts. But there are potential commitments on the land sale. (A general discussion then ensued about outstanding checks that cannot be paid; additional accounts and contracts; and the possible income received and expenses incurred since the review was completed.) DONACA: Basically this is a moving target; and the review is a snapshot in time. This is all the information we're aware of, all that we could find. Minutes of Meeting: Fair Board, Fair Association, Page 3 of 20 Pages Board of County Commissioners and Others LUKE: Friday the Board of Commissioners agreed to back the Fair Association payroll through next Sunday at midnight. SWEARINGEN: We didn't take any specific action on that. It was discussed, but I feel this is something the Fair Board needs to consider. (Further discussion ensued about the Cameron Clark contract and the Columbia River Pro Rodeo contract, and the entertainment account.) DONACA: The Cameron Clark contract is a convoluted relationship with no simple answers. The contract embraces other issues, and there is no simple resolution. There are things in the relationship that are hard to quantify in dollar terms. LUKE: What is the status of the rock -crushing contract? BISHOP: The Fair Board is not directly involved with this. I would hope it is a negotiable item, but I don't know if it will be absorbed by the County or the Fair Board as it has been authored. Can Rick (Isham) or Greg (Lynch) comment on this? ISHAM: One of the items - the scope of work - that I indicated verbally with the one person who called is an evaluation of that contract in the overall project and the recommendations of the engineering perspective. One of the comments made to me today was that in terms of topography out there and the number of spaces needed for the motor coaches and extra areas, to take that template and put it over the site may show that a different sizing of those areas is needed. (A general discussion ensured regarding whether the overburden could be crushed and used for fill.) DALY: The original contractor was to use the rock that is there, but more rock might have to be blasted or brought in. Minutes of Meeting: Fair Board, Fair Association, Page 4 of 20 Pages Board of County Commissioners and Others MAIER: This afternoon we got a fax from Express Personnel, saying they are owed around $54,000. DONACA: Most of that is shown in the NSF checks returned. SWEARINGEN: Based on this contract, I've just added up about $15,000 potential revenue for October. And you've said that you're looking at $60,000 in employee costs and $30,000 to $40,000 in overhead in an average month. DONACA: Yes, we've gone back over prior years and that's an average figure. S WEARINGEN: So is it safe to say that they are losing about $75,000 a month, or at least in October? DONACA: In October, yes. I don't recall any significant events that are scheduled for October. Getting back to that point. The audit that Dick completed as of December 31, 1999, showed $125,000 available cash. So you take $125,000 at January 1, and then deduct $460,000 - the deficit that we're at now - it's not far off $70,000. BISHOP: On the entertainment account, the $82,000, other than all the other expenditures, are there any other unmeasurable strings attached to that money? Is that just a checking account that's earmarked "entertainment"? DONACA: Yes. BISHOP: For example, are there any receipts or withdrawals from the account for any future event, maybe the rodeo or FMCA or anything else? Minutes of Meeting: Fair Board, Fair Association, Page 5 of 20 Pages Board of County Commissioners and Others DONACA: I believe the money that's in that entertainment account as of this date is mostly from the Brooks & Dunn sale. I don't think they started selling tickets to the rodeo. DEWOLF: This is a big concern since tickets are now for sale. Based on the phone calls I've gotten, tickets are available through Ticketmaster and at the Fairgrounds. They are wondering how the event will take place, and how they get the money that's owed to them, and there is quite a bit owed to the local media - who are now unwilling to do the advertising for the rodeo until they are paid. CHARLIE BREWER (with the PRCA Columbia River Circuit): Box office sales as of September 29 for a Thursday is 74 tickets. The money is at outlet sales and the secondary box office, and phone sales are at Ticketmaster. This money won't be sent to the Fair Association until the event is completed. This is the only money I'm concerned about, the box office sales. $82,000 worth of tickets needs to be sold. Payment of $18,000 is due on October 26, and the balance is due on November 9. (General discussion occurred regarding when the tickets were sold, the amount, advertising, and how the sales are handled.) BISHOP: The spirit is to get good answers. Advertising needs to happen now, and the PRCA needs to make it fly. I've asked before and still don' know if there is any Brooks & Dunn money in the account. Did this make money or break even? GREG LYNCH: I don't see this as the critical issue. Efforts are being directed toward other things. BISHOP: In fairness, and with all due respect, this is a financial inquiry. We are trying to get our hands on any potential contingent liabilities, and written liabilities, any contracted liabilities, and assets, and if there are any other contingent liabilities. First of all, it's not a function of making or breaking money on that contract. It's a function of whether there are other liabilities out there that Dick or we don't know about. It's like the rodeo contract. It's like the Cameron Clark contract. BISHOP: Minutes of Meeting: Fair Board, Fair Association, Page 6 of 20 Pages Board of County Commissioners and Others BISHOP: Everybody else but the Fair Board seems to know what's going on behind the scenes, and we have a financial inquiry here, and we're trying to put to rest a line in the sand to where we have accurate numbers. LYNCH: Like I told you earlier today, the Fair Board is essential to the resolution of all of the issues between the Fair Association and the Deschutes County Commission right now. There is no way that we can do anything finally without the Fair Board's involvement. The financial issues are compelling right now. There are bills that need to be paid right now, and there are relationships between the Deschutes County Commission and the Fair Association that require discussions so that we can decide how we are going to identify assets, resources, converting resources into cash to pay these bills; and then move forward. That is not something I thought the Fair Board is a necessary party to this. Clearly, in terms of where this Expo Center goes and who is going to be running it, there's no way to do this without the Fair Board's involvement. At the same time, we, the Fair Association, has been spending a lot of time determining precisely what contracts are out there and what contracts have been signed, what contracts are out for signature, and what the commitments are, our contingent liabilities if you will. I was hoping that the information would be available before today. We have the same interest in getting that quantified as you do. At the same time - correct me if I'm wrong - Rick (Isham) has been out there and has spent an inordinate amount of time trying to get a handle on our contract situation. This is so that the powers that are ultimately going to be the driving force can determine what contracts they want to honor and what contracts they don't, and what contracts they have to honor, and what contracts they don't. BISHOP: In commenting as we talked today at 3:30 today, this Board has a fiduciary obligation to the taxpayers of Deschutes County. Today is the deadline that we were under the assumption we'd have an agreement to pass the baton or to do whatever we are supposed to do. That's been confirmed by the attorneys, and we are supposed to be moving forward on that issue. We don't have a contract and we don't have guidance here. We have a fiduciary obligation to the community, and tonight was the night, and has been the night for a while, that we were going to receive Dick's presentation and hopefully were going to have all of this information. Minutes of Meeting: Fair Board, Fair Association, Page 7 of 20 Pages Board of County Commissioners and Others LYNCH: I wish we had it too, as it would be a lot easier to hand it over and say "here it is". It's not for lack of trying, and it's not for a lack of effort. We're going to have it real soon. Two weeks ago you had two ships passing in the night. Now you have an Association and you have a Commission that are working together to bring order to a situation which I believe was not where it should be with respect to the operation and management of the Expo Center, and they are quantifying the liabilities that were in existence as of two weeks ago. I am committed to getting the agreement together, as I believe Deschutes County is; and I think that we are within millimeters to having that agreement moralized. But it took a lot of effort to get to that point, because the relationship between the Deschutes County Association and the Commission is not that simple. Honestly, we're not dodging this. I can see where you would be somewhat offended by not having been in that loop, but, trust me, we spent an inordinate amount of time trying to resolve these logistical and relationship issues. We've come a long, long way, and I don't think there's a Commissioner here who would deny that. BISHOP: I would think that would be very good. But maybe I'm misunderstanding, Greg. But from the financial inquiry, are you saying that - the contract's not on the table tonight - but the financial wellbeing of the entity is. And if we, as the County Fair Board, come and ask if there is a liabilities number that we can use with confidence in negotiations, but yet what I'm hearing - and maybe I'm misunderstanding - is that is a significant potential for other financial contingent liabilities out there that have not been measured in this report tonight. LYNCH: If I said that, I didn't mean to say that. LUKE: That's how I understood it, too. I was going to ask the question. I sounded as if there are other contracts out there, but you are just talking about the current contract between the Fair Association and the Fair Board. Minutes of Meeting: Fair Board, Fair Association, Page 8 of 20 Pages Board of County Commissioners and Others ISHAM: Kamie from my office and I went up to the Fairgrounds and reviewed the files that were provided to us to try to get an understanding of what is current and what is long-term. There were 40 contracts for events, not including the PRCA contract, that are basically either space rental or space rental plus things like the caterer. Those 40 contracts are listed - 44 contracts - showing about $89,000. That was one of the big questions, because when we met with Elton (Gregory) the previous Thursday, the impression was that there were a lot more contracts out there. There are other contracts that are "listed within that time frame, but there's been no deposit or no contract actually signed. And some of those contracts are gratuities - there's no income expected from them. In addition to looking at those contracts, we determined what the amount of the deposits are to see what the liabilities would be for the deposits that had been received and appeared at that point to have been expended. Additionally, we looked at beyond those contracts to the PRCA contract, the Cameron Clark contract, rock crushing, catering, sessions, a Pepsi proposal, and so on. Some are income contracts where the Fair Association is receiving income from operations. Also, when we were going through the files, there was a large backlog of accounts receivable. For lack of a better term, I came up with the term, "well, it looks like the Fair Association is being the bank for the different providers". The staff told me the caterer would get paid even if the Fair Association hadn't gotten paid. Some of these liabilities were building up and remain unpaid. We put together an aged schedule of all of the accounts receivables for event -type activities that were outstanding. When you look at those longer-term liabilities, there is a significant additional amount of liability that is perhaps another $500,000 worth of long-term liability. Some of this potential could be offset by revenue. When I looked at the Cameron Clark contract, it required that a budget be prepared; and I was told that there was none in the file. Additionally, in looking through that, it appeared that there was no allocation of the operating overhead, direct or indirect costs, to any of the promotional events. So if they are showing a profit, they are showing a profit based on money in/ money out, not with respect to allocation of overhead unless it was like an overtime or extra personnel type of cost. What I did was put that together in a report and gave that to Dick. Minutes of Meeting: Fair Board, Fair Association, Page 9 of 20 Pages Board of County Commissioners and Others DONACA: What we are talking about is a moving target, What I tried to do is a snapshot in time. What the problem has been is a lack of procedures and controls at the Association to be able to have this type of information available on a ongoing basis. What we have here is that if somebody had to write a check today to cover this, it looks like it's about $462,000. There's a bunch of other stuff out there that needs to be considered, but it's kind of a moving target that we can't always hit. BISHOP: I'd like to share a comment from my perspective. Friday morning before the Brooks and Dunn concert, while talking with the staff of the Fair, I was told we needed to sell $13,000 more in tickets before we'd break even. So somebody applied some good business judgment and knew some things there. Then, when the concert was over with, through some of the due diligence and information that Rick brought to the table, I was concerned because I had heard there were some other payables, specifically advertising, that had not been paid from the Fair, as well as Brooks and Dunn. As a Board member, I felt that, well, if we have torched our advertising opportunities and we haven't paid our advertisers - the newspapers, radio stations or whoever - that plays into the role of our decision-making as to whether we can realistically put on a rodeo? Can we realistically move forward and put on another event? Can we realistically do those kinds of things? No, it's not critically important to know whether or not Brooks and Dunn made any money, but somebody has a gut feeling and probably knows with some accuracy. That's a simple question. As you know, it's very convoluted with all kinds of things going on. We are all volunteers trying to get a handle on it, and when we hear these kinds of stories repeated, rather responses, it makes me unnerving. After this evening's meeting, I had hoped to have 100% - not 90% - confidence in having all the financial liabilities and potential assets here before us. I'm not getting that feeling. LYNCH: First of all, we are relying on Dick Donaca, who put in a significant effort to uncover every rock and make sure these numbers are as accurate as they can be. In addition to that, I can tell you that my clients spent a significant amount of time providing him with the information he needed in order to make a credible report to the Commissioners and to your Board. I also know that County Counsel spent a tremendous amount of time up there, reviewing and evaluating contracts for contract liabilities, contingent or otherwise. Minutes of Meeting: Fair Board, Fair Association, Page 10 of 20 Pages Board of County Commissioners and Others LYNCH: All of this was done with the purpose of being able to answer to the Commissioner, to you and to your Board, and to ourselves, how much money is owed as a result of the operation and management of the Expo Center to date. All I can do is tell you that everybody was going in the same direction, and everybody had the same goal in mind, and at least the numbers that you have in the report are credible. So, can I swear on a stack of Bibles that there isn't a nickel more owed? No. There might not even be that much, I can tell you that as well. The Brooks and Dunn concert, in my way of thinking, is just another example for all of us to look at in terms of how to, or not to, put on an event at the Expo Center. Whether it was a moneymaker or it wasn't, is not in my way of thinking going to ultimately determine whether or not you all wish to put on the PRC rodeo. I think that's going to have to stand on its own merits. I've heard some concerns expressed in respect to that function as to whether it will be a break-even, be a moneymaker, or cost the facility money. BISHOP: Let me rephrase it. A Redmond School Foundation member asked me the question. He said that was a lot of fun, we made some money, did the Fair make money? And here is a Fair Board member some weeks after this event, and my only answer is, I don't know, because they told me they don't know. LYNCH: And what Rick said also, and I hate to say it because I'm a lawyer, it depends on how you look at it. It depends on how you account for the money. And there has been a significant amount of discussion between my clients and the Commissioners and County Counsel with respect to accounting principles, and how money is accounted for on an event by event basis. BISHOP: It's been an item of discussion at numerous Board meetings, by the way. LYNCH: It is not something that hasn't been discussed, and it is not something that our Board has said, we're going to do it our way, and it's the only way we're going to do it. We have said in response to that, oh, we see what you mean. I can see where this could cause us some problems in terms of believing in the short run that we made money when we really didn't. Minutes of Meeting: Fair Board, Fair Association, Page 11 of 20 Pages Board of County Commissioners and Others BISHOP: Thank you. SWEARINGEN: I'd like to identify really quickly that we all agree that we have $462,285 worth of immediate debt. We all know it has to be restructured. Those people have to be paid. We know that we have a hemorrhage of $75,000 per month. As prudent businesspersons, we've got to stop the hemorrhage right now. We can't afford to continue building up a liability of $75,000 a month. We need to meet immediately with Charlie and renegotiate the Columbia River Pro Rodeo contract. And I'd like to know when the Fair Association is going to turn over the keys to the facility to the Fair Board. LYNCH: That's never been an issue. It's just a question of how we're going to do it and who is going to be there. A discussion we had last week was looking at personnel changes in respect to the Association, in terms of who is going to be there and what you want us to do. I don't think there was ever defined what role you want the Association to play, if any, on an interim basis. DEWOLF: I'm going to make a small leap of faith and say that the Brooks and Dunn bottom line is irrelevant at this point. It's been identified that we don't have proper accounting procedures in place, and there's probably no way to easily account for indirect costs and overhead costs and all that. We're not going to know tonight and I'm not sure how relevant it is. My question is that we have a large list of vendors. Have these folks all been contacted directly to see if what we're saying is owed to them agrees with their records? DONACA: Not 100%. We've done some tests and verified some by invoices and/or statements that have come in from the vendors. DEWOLF: It seems to me that's something - if we're wanting to be more assured - we can assign a couple of people to contact these vendors. Perhaps there are some that we're not aware of, but I'm sure we will learn of them in pretty short order. To me, hat seems like a logical thing to do. The other question is if there are any other outstanding contracts out there - my understanding was that as of a few weeks ago there were 300 contracts for events that were coming, that's what was reported to us; and now there's 44. Minutes of Meeting: Fair Board, Fair Association, Page 12 of 20 Pages Board of County Commissioners and Others GREGORY: I think the 300 number was based on an annual number of events. There's now none that you don't know about, that we're aware of. ISHAM: I thought I'd make a comment to put a couple of things in context. I met with the Fair Association and the Board about ten days ago at their Board meeting in Redmond. We had met with Elton the previous week, when he gave us the bad news with respect to the situation. During that time there was a lot of discussion about the Family Motor Coach Association, even though that's a separate and distinct issue, clearly it was a huge concern and the FMCA was making their situation a front -burner issue. We started out with a large community meeting in Redmond, and it became FMCA week; but by the end of the week the FMCA at least had a direction that the Board supported. Last week what I had promised, for my role in this, was to provide Greg Lynch with at least a preliminary list of issues that I saw, both short-term and long-term, with respect to the relationship of the parties who are affected by the current financial considerations and by operations. I did this. Greg and I have worked on this list a couple of times since then. The crux of the whole meeting to go forward with anything is this meeting tonight. This is the first time that the actual financial situation, albeit a snapshot in time, is basically on the table. There's been some supposition, and there were comments in the paper that said it could be up to $300,000. Well, they were $162,000 short of the actual snapshot. For the first time we have some hard numbers, and we have the start of a list of things; in the meantime we have put out a request for proposals for the FMCA capital improvements. David probably knows that FMCA contract better than anybody in terms of what it says. We discovered there are a lot of agreements on other things that are not set forth in that contract. Our full purpose is to end up with a contract that is complete, and everything that we can and can't do should be in it. If there is a sense that things have not been forthcoming, from my perspective is that this meeting is really the starting point to that final relationship. There are different ways that these relationships can end up. Everybody in this meeting could get mad at each other and walk out the door. Or there may be some preliminary decisions. Minutes of Meeting: Fair Board, Fair Association, Page 13 of 20 Pages Board of County Commissioners and Others ISHAM: There are a number of people who are looking at the Board of Commissioners to somehow fix this situation. I think the Commissioners are going to have to have certain understandings and be comfortable with whatever they are before that's going to happen. We have a new Fair Board who has probably for the first time in the twenty years I've been with the County have actually met and acted as a independent Fair Board, making decisions independent of the Fair Association and of the Board of Commissioners. Now, with an active Fair Board, the Board of Commissioners has to respond much differently than they did in the past, so you're kind of an unknown. The Fair Association has had a long-term relationship with the Fairgrounds, and what their feelings are, individually or as a group, are really unknown. It's kind of like a cosmic soup. At the right point in time it will come together and there's going to be a whole series of things that will fall into place. BISHOP: One of the things that we as the Fair Board and whatever the new operational entity is going to do is to try to promote and develop a culture to make that facility a success. I'll still disagree with Greg's position; it's not a matter of dollars and cents on the Brooks and Dunn concert, it's a matter of whether we can partner with another school district, another foundation, another community group. We need to have the right message to take back to our customers - and the Redmond School Foundation is a customer - and need to be able to give them an adamant round of "you know, we didn't make money; but next time we think we will", or whatever. It's not the dollars and cents; it's the spirit of that kind of arrangement that we must be held accountable to. To have the position of not saying whether we are up or down, you're missing the picture here. It's the partnering with other Deschutes County citizens, foundations and businesses that are most important. LYNCH: What you are saying is that before you decide whether you want to go to the dance, you want to know with whom you're going. I think it's important to recognize that the Fair Association is an association that is run by a board. I will tell you that the Fair Association board is absolutely committed to accomplishing three things. Minutes of Meeting: Fair Board, Fair Association, Page 14 of 20 Pages Board of County Commissioners and Others LYNCH: One is to get the short-term, acute problems resolved. Two, to cultivate a relationship with all entities that are going to be involved in the development of a management plan and ultimately the management of the Expo Center. Three, making it simple to facilitate a transition from the current group to whomever or whatever it is that will be responsible for the management duties. At the same time, the Association has a goal to preserve and protect those 70+ years of tradition of putting on the Fair. That having been said, there is going to be a changing of the guard. We've already discussed that several times. When you are dealing with the Fair Association, you aren't dealing with Elton now, you're not dealing with Alex, you're dealing with the Board. It's very important that you understand and accept that, and that you believe it. If there is any inclination whatsoever to go back and look at situations that could have been done differently, relationships that have been less than perfect, that's not going to be productive. You have the Deschutes County Fair Association's absolute, unqualified commitment to participate in making the Expo Center a success. I don't think it's productive to look back at things on an item by item basis to see whether you want to go to the dance with the Deschutes County Fair Association. BISHOP: I agree with you whole-heartedly. However, nor is it appropriate to withhold information and try to be guarded on some front when we're all Deschutes County taxpayers and we need to move forward together. LUKE: Back to the financial statement. There are no purchase orders, so we really don't know how to match the invoices with the contracts. DONACA: What we've got here is information from the invoices and/or statements that came in from the vendors. That's part of the problem. This is the best information we have available. There are some problems, as some information could be missing. DEWOLF: It seems in the short term that the biggest event coming up is the rodeo. Just adding up the numbers, it appears there is over $37,000 owed to the local media. don't know if you pay off a few key media so that you can advertise to get things rolling, but somehow, if we're going to honor contracts that have been committed to that require advertising, that's a key component as far as I can tell. Minutes of Meeting: Fair Board, Fair Association, Page 15 of 20 Pages Board of County Commissioners and Others (A general discussion ensued regarding whether the clause in the contract regarding a "calamity" applies in this case. Rick Isham indicated the clause normally applies to acts of God and similar situations, and this would be a real stretch) BISHOP: I would like to reconvene as the Deschutes County Fair Board in executive session when we adjourn. LUKE: I have a question. This is a posted meeting for the Commissioners, and there was a discussion Friday about continuing some payroll through next Sunday so that the doors would be kept open, and to give the Fair Board and the Commissioners some time to figure out what's going to happen there. I'm asking the other two Commissioners their thoughts on this, because I know that there have been some discussions on this. SWEARINGEN: I think we have to realize that we are losing $2,500 a day. If you look at the events that are going to occur in the next nine days, we are looking at $1,000 income. I am not interested in paying $2,500 a day to make a $1,000. (A general discussion occurred regarding staffing changes, and the amounts of income and expenses) LYNCH: When we met last Friday, we talked about an orderly transition. One of the things we spoke about was what it is going to take to get us through the short term. In the context of discussing this short-term transition period, two things were discussed. One was making payroll; the other was who at the Fair Association level would be available to take control of the helm on a short-term, transitional basis. We discussed cutting staff that was not absolutely essential to the short-term operation, and we spoke about doing that today; but I met with the Executive Committee on that regard and we ended up coming to a cut of about $8,000 per month in staff costs. This has been done already. That list was given to County Counsel. Certainly there are other cuts that may need to occur, and there may be people still there who are not absolutely necessary for the short run. This was the best we could do under the circumstances. We did what we said we were gong to do. Minutes of Meeting: Fair Board, Fair Association, Page 16 of 20 Pages Board of County Commissioners and Others LYNCH: In addition to that, I had discussions with Elton and Ron Nelson, and Elton would like to spend his time and energy on other, more productive undertakings like the Fair itself. Ron Nelson has agreed to do whatever you all tell us is appropriate as an interim Association representative in the short run. We've done that as well. I was under the assumption that this was an understanding that we all have. Ron knows the Fair, the Expo Center, and business. DEWOLF: You don't need to sell Ron to us. My question is that we have a payroll in the ballpark of $60,000 a month, and an $8,000 reduction probably isn't going to cut it. Linda, you weren't here, but we made a commitment, just to make sure that we got through this week. It would be my expectation that by the end of this week we, the Fair Board, and the Fair Association will come to terms on what "essential" means, and will finalize where we're going to be in terms of payroll, and try to slow down the bleeding here. ISHAM: Actually, it was in two parts. The first part was Sunday. The statement from the Board was that to the extent that the expenses exceeded income, it would be covered by the Board. The second part was the following week, which was to discuss the issue of staff cuts to get through the next week. And then we know that the following week is another event. Somebody had to make a decision for Sunday, and somebody now needs to make a decision through this week. SWEARINGEN: That's a decision that the Fair Board needs to make. I think what we're saying is, as Commissioners, if in fact they request money for the week, we are willing to give that. But that has to come from the Fair Board. That's whom we work with and for. DEWOLF: That's great, but the reality is that the finances are coming from God knows where at this point. This is a completely joint effort here. Through this week we've got a preliminary agreement for a cushion. These decisions need to be made rapidly and with the best information that we can gather. SWEARINGEN: The Fair Board needs to give us that direction. Minutes of Meeting: Fair Board, Fair Association, Page 17 of 20 Pages Board of County Commissioners and Others BISHOP: Keep in mind that this is the first time the Fair Board has heard this information. It's not likely to act on it tonight. II, 114 My suggestion of a motion is that we, Deschutes County, will agree to back payroll until next Sunday at midnight, if so asked by the Fair Board. S WEARINGEN: That actually needs to take place after the Fair Board meets. I think it's premature at this time. LUKE: Linda, the problem is that you are gone tomorrow, and our next meeting is not until Wednesday. You've got people sitting down there who don't know if they are even going to be paid. That was the whole discussion we had before. There are events scheduled; there are people who have committed to do events. If you guys don't want to do it, fine. But that's what I would suggest. LYNCH: The Fair Association has been running events for years. They are absolutely essential in getting you from point A - where you are now - to point B - where you want to be. What's the alternative to having the Association in there? That's a no- brainer as far as I'm concerned. KIMMEL: There are some people here from a church group who have been here all evening. They have some questions. LARRY AND KAREN WALKER: We have 1,200 people coming here in eleven days, for an eight-day event. We cannot change this. We don't know if the lights are going to be on, if anybody's going to be there, or what. We have already put down a deposit. We have another check and we don't know to whom it should go, we don't know with whom we are supposed to be talking, and we're really concerned. DEWOLF: The lights will be on. Not just for you, but for the community at large. The one thing that I know I speak for Dennis and Linda on is our commitment to make sure that people in our community do not suffer as a result of anything that's happened here. We will do our absolute best to make sure that the contracts that have been signed are honored if at all possible. Minutes of Meeting: Fair Board, Fair Association, Page 18 of 20 Pages Board of County Commissioners and Others I would like to point out that they are bringing 1,200 people into Redmond in the middle of October, and that will have a very positive financial impact on the area. BISHOP: We will be smarter in 48 hours. In spirit, our commitment is to make sure that you have a successful event, including that if someone has been laid off and needs to be brought back to help out, we hope to be able to determine that. PAMELA WATKINS : I own a company that uses the Fairgrounds for the biggest event in the area, after the Fair. I represent about 800 Central Oregon companies who depend on being able to exhibit at the Fairgrounds. I want you to know that throughout the Fairgrounds' history there is not one person with whom we've worked at the Fairgrounds who hasn't been wonderful. What I'm hoping for is to see some gathering, some joining of forces, as I see too much polarization here. I hope you can work together to facilitate this issue. (A general discussion occurred between Tom De Wolf and Dick Donaca regarding contract commitments and receivables.) DEWOLF: Where are we going now? Is it your plan to discuss in Executive Session where we go from here and how quickly? And under what authority are you meeting under Executive Session? BISHOP: Yes. We're going to discuss real estate issues, contractual issues and employment issues. LUKE: I have a question. Who is unlocking the door at the Fairgrounds tomorrow? Are there events scheduled there tomorrow? •' We were hoping that agreement would be made by today so we'd know the answer. But we don't have that done. I have no idea if there are events there tomorrow. Minutes of Meeting: Fair Board, Fair Association, Page 19 of 20 Pages Board of County Commissioners and Others ISHAM: There is an event on Thursday, and there are events scheduled this weekend. BISHOP: I'd like to adjourn for five minutes, and then have the Fair Board convene in Executive Session. Deschutes County Fair Board Chair, David Bishop, adjourned the meeting at approximately 7: 00 p. m. Respectfully Submitted, Bonnie Baker Acting Recording Secretary Minutes of Meeting: Fair Board, Fair Association, Page 20 of 20 Pages Board of County Commissioners and Others ►a F A A CN coo �►. co 09 cs' � a r I -Y) So' kn .; ON N , �► C coLL V1%A _ C i LL V 3 0 T O W O C^ N .O a E 2 ti F Z a a A �. �� ku � r~ V LE •- .E x2.314 � 0 Q) � aC v 27 � � v co o x o m cr N r LL � _ i O - 30 �c y N V ` v CL � � ts , N �44 1 N •> v\ h O` c u. vi vi L Q tx � oC J .�.o Ec ls�