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2001-34-Minutes for Meeting December 15,2000 Recorded 1/11/2001VOL: CJ2001 PAGE: 34 RECORDED DOCUMENT STATE OF OREGON COUNTY OF DESCHUTES *CJ2001-34 * Vol -Page Printed: 01/16/2001 08:50:34 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: Jan. 11, 2001; 4:35 p.m. Regular Meeting (CJ) NUMBER OF PAGES: 6 MARY SUE PENHOLLOW DESCHUTES COUNTY CLERK KEYP OCHD .JAN 01 M►CROFI ED JAN 1�7 ZO C.1.zdDl 3q Board of Commissioners 1130 N.W. Harriman St., Bend, Oregon 97701-1947 (541) 388-6570 • Fax (541) 388-4752 www.deschutes.org Tom De Woff Dennis R. Luke MINUTES OF SPECIAL MEETING Mike Daly Board of County Commissioners Regarding the Financial Situation and Contracts Involving the Deschutes County Fairgrounds and Expo Center Friday, December 15, 2000 Chair Linda Swearingen opened the meeting atl1: 00 a.m. Present were Board of County Commissioners Linda L. Swearingen, Dennis R. Luke and Tom De Wolf. Also present were Mike Maier, County Administrator; Mike Daly, Commissioner -elect; Rick Isham, County Counsel; Jeanine Faria, Finance Department; and members of the media. Chair Linda Swearingen explained that this meeting has been called on behalf of a request from the Fair Board. They have expressed, and the County Commissioners also feel, a serious concern regarding the lack of progress in bringing to a conclusion the problems with the Deschutes County Fair Association and the Fairgrounds and Expo Center. In particular, the two exhibits to the agreement having to do with debts and assets need to be completed. The Fair Association has not yet provided any information as requested by the Board of Commissioners and the Fair Board. It was concluded that they probably don't have the ability to put this information together, as the organization is very dysfunctional at this point in time. Perhaps the County should offer what it has put together, and tell them that unless there is anything else, this is the list of payables that we're going to consider, and let's just get this over with. Minutes of Meeting - Board of County Commissioners Page 1 of 6 Pages Subject: Finalization of AgreemJhWt §%rA0icestPerformed with Pride Friday, December 15, 2000 Chair Linda Swearingen said that the Fair Board moved and approved a motion yesterday that would require that the FairAssociation is to have all exhibits signed and attached to the agreements by December 26, 2000. Commissioner Luke asked "or what?" at this point. Commissioner DeWolf said that if the Association wants to operate the 2001 Fair, they will not even be considered unless they take care of this. Commissioner Luke asked what would happen if a bill came in on December 28th Commissioner DeWolf said this action ties things up prior to the Board of Commissioners' last meeting of the year scheduled for December 27th, and the three current Commissioners wish to put this whole thing to bed at long last. Anything coming in later would be addressed at that time. Commissioner DeWolf stated that the other thing is that the County already has what can become the exhibit in the form of the accounts payable list that Jeanine Faria has put together. Also, because the County now gets the Association's bank statements, the County can put together the other exhibit. He stated that it is the County's assumption that when they sign the agreements with these exhibits attached, that they are agreeing that these are the correct exhibits. Rick Isham stated that the prepared agreement says that if something is not on the list, it will become the responsibility of the Fair Association. He indicated his hope that there would be some kind of meeting of representatives of the Fair Association and the County to review the list for accuracy. Commissioner Luke asked if they haven't gone through them, how does the County know which should be paid. Commissioner DeWolf stated that there is a need for persons who should know to review these bills. Chair Swearingen said a few bills need explanation, such as the Sun Country parking lot for about $13,000; what agreement did they have with Sun Country to do that, especially in light of the fact that the County has had to hire outside engineering to go over that work. Chair Swearingen stated that the Fair Board has given them until December 26 to sign. The County is ready to bring this to a conclusion, and they are not putting forth any efforts in that regard. Also, there has been an additional bank account at the Bank of the Cascades discovered. Minutes of Meeting - Board of County Commissioners Page 2 of 6 Pages Subject: Finalization of Agreements with Fair Association Friday, December 15, 2000 Jeanine Faria stated that she would get bank statements from all known accounts to assure that the information is totally up to date. She said that her department is reasonably satisfied that all the bills that are out there are now known to the County. She also said that there is no real incentive for the Association to delete any bills. Rick Isham said that it is not his belief the County can write the other exhibit. There is a question regarding an amount in an account; part may have been paid to Express Personnel and maybe to the rodeo queen. Commissioner DeWolf explained that the County should be able to match bank statements, checks, etc. to determine a bottom line. Chair Swearingen said that January 15th is the drop -dead date for a business plan and budget for operating the 2001 Fair. Vendors, acts and other things must be booked in early January at the latest. Beyond January 15th, it is much more difficult to retain the same quality acts and vendors. Commissioner DeWolf spoke regarding providing consultant services; i.e. Lindsay Stevens from Central Oregon Community College, to help. All that is needed is for the Fair Association to come forward, agree on the exhibits and sign the contracts so they can begin working with Lindsay. Commissioner Luke asked if Greg Lynch is still representing the Fair Association. Jeanine Faria answered that she has received a total bill from him for $18,000 for October and November. Commissioner Luke asked why this is not a final bill; Rick Isham said it's because the issue hasn't been finalized yet. The Commissioners said that is one reason why there is a drop -dead date. Rick Isham said that the Fair Board would make a recommendation to the Board of Commissioners regarding the operation of the 2001 Fair. Commissioner Luke asked if the paperwork isn't signed by December 26th, what about the bills? These need to be tied together. Commissioner Swearingen said that the Association will not be considered to run the 2001 Fair, and the bills won't get paid. They cannot be paid without the appropriate agreements being signed. The creditors would then be referred to the individual membership of the Fair Association. Minutes of Meeting - Board of County Commissioners Page 3 of 6 Pages Subject: Finalization of Agreements with Fair Association Friday, December 15, 2000 Commissioner DeWolf said that this is not meant to be a threat or a heavy-handed action; it merely looks toward some kind of finality to this issue. LUKE: I move that the County set a drop -dead date of December 26, 2000 for the Fair Association's signature to the agreements, including exhibits, or the County will not pay the bills and the Fair Association will have to deal with the creditors. DEWOLF: I second. VOTE: LUKE: Aye. DEWOLF: Yes. SWEARINGEN: Chair votes aye. A discussion then occurred regarding the details of the agreements. Rick Isham said some systems are not in writing and there are some situations where the cash flow cannot be handled through the County's system. Commissioner Luke said that an acceptable cash management plan would be developed with the County according to public law. Rick Isham stated that the Fair Board is expecting the Fair Association to develop this. Commissioner DeWolf replied that is why the County is willing to provide the consulting services of Lindsay Stevens. Chair Swearingen stated that it is unreal to expect the County to believe they would do their plan, when history shows they don't seem capable of doing even the most basic plan or accounting. They had good intentions but obviously cannot perform. Chair Swearingen asked about the situation regarding the loan with Columbia River Bank. Commissioner DeWolf replied that it is a separate issue, and the Fair Association should be negotiated with. Chair Swearingen said she'd like to see the financial statement on which the loan was based; she can't imagine what the bank put in the file. Rick Isham explained the loan became secured to the assets, probably after the loan was made; and that payment to Columbia Bank would release their senior position on the assets. He said that Greg Lynch insists there is a security interest. Minutes of Meeting - Board of County Commissioners Page 4 of 6 Pages Subject: Finalization of Agreements with Fair Association Friday, December 15, 2000 Mike Maier said that some assets might have been purchased by bond money and could not legally have been secured in that manner. Rick Isham explained that the titles for the dump truck and the front-end loader were checked, and these are in the County's name. Jeanine Faria stated that the audit by Donaca showed about $200,000 in value in the buildings; and she can't figure out what these could be. The Fair Association did not use their money for any buildings, and there are no such buildings in existence. Commissioner DeWolf said the president of Columbia River Bank stated the loan was unsecured. Jeanine Faria stated that she doesn't think the Fair Association has any assets. Rick Isham said that the buildings and land can't be given as security interest; but in the operation agreement, if Deschutes County ever sells the Fairgrounds, they'll get a pro rata share of the sale. This is one of the assets they agreed to turn over. (A general discussion occurred regarding the total amount of the bills and how to handle the debt with Columbia River Bank.) Commissioner Luke asked that if the Board of Commissioners is to sign the agreements on December 27, is that adequate time for the Board to review the exhibits. Commissioner DeWolf replied that the Board is already heavily involved with the creation of the list, and the agreements themselves have already been verbally approved by a vote of the Fair Association. Mike Maier said that Elton Gregory is still the President of the Fair Association, with Mike Schiels the Vice President, and Mike is the best, most reliable Association contact at this point. It was decided that a memo be distributed to Board of the Fair Association asking them to have the appropriate persons in the group contact Jeanine Faria as soon as possible to set up a meeting to review the exhibits to the agreements (the list of creditors and information on the bank accounts). Minutes of Meeting - Board of County Commissioners Page 5 of 6 Pages Subject: Finalization of Agreements with Fair Association Friday, December 15, 2000 Commissioner DeWolf said the Fair Association needs to be very clear that if this doesn't come together before the end of the year, the Association is in big trouble. Rick Isham was instructed to fax a memo to Greg Lynch today regarding the meeting with Jeanine Faria (to discuss expenditures and bills); and that if they are not submitted, the creditors will be referred to the members of the Fair Association. Rick Isham said he told Greg Lynch that the Association should have had its own list put together long ago, but as everyone knows they have not responded. Being no further input offered, Chair Linda Swearingen adjourned the meeting at 12:05 p. m. Dated this 15th Day of December 2000 for the Deschutes County Board of Commissioners. ATTEST: XI!! ( V - inda 2Sweringen, cWr nnis R. Luke, Commissioner Minutes of Meeting - Board of County Commissioners Page 6 of 6 Pages Subject: Finalization of Agreements with Fair Association Friday, December 15, 2000