But it remains to be seen whether the Board of Supervisors will support the Fair Board’s efforts to create a special district and seek voter approval of a sales tax increase to generate revenue.
Fair officials say they hope to create a district through the Local Agency Formation Commission with directors elected by the public in November 2014. They also hope to put a seven-year, 0.25 percent sales tax measure on the 2014 ballot.
On Tuesday, four supervisors voted to authorize county staff to assist the Fair Board as it explores ways to keep the fair up and running, including creating a special district and seeking a sales tax increase. Supervisor David Finigan was absent.
Supervisors also voiced their support for a bill currently in the California Assembly that would relax state control over county fairs but does nothing to increase funding.
“The fair’s very important,” said District 4 Supervisor Gerry Hemmingsen, grouping the fair’s future with other important issues concerning the county, including hospital regionalization and Last Chance Grade on U.S. Highway. “They’re all very important. Without any one of them we diminish ourselves in some capacity.”
Since the state stopped funding fairgrounds in early 2011, the Del Norte County Fair has experienced an annual deficit of about $90,000, said Fair CEO Randy Hatfield. To help make ends meet, and keep the grounds open, the Fair Board cut its budget and cut its staff. It also created a rainy-day fund to help the fair survive, Hatfield said.
The fairgrounds are currently staffed by part-time personnel, Hatfield said. He serves as a jack-of-all-trades, helping to balance the books, manage contracts and make repairs.
The Fair Board’s biggest challenge is making up the roughly $180,000 in annual state revenue it lost, Hatfield said. Forming a non-profit organization, a joint powers authority or a special district alone won’t do that, he said.
“If nothing happens we project that in 2016 our fair and fairgrounds will close,” Hatfield told supervisors. “We’re not only talking about the fair, we’re talking about the fairgrounds itself.”
Site of numerous events
The fairgrounds, part of the 41st District Agricultural Association, is one of 76 fairgrounds in California that were state-supported, said Stephen Chambers, executive director of the Western Fairs Association, a trade organization that represents 72 fairs.
Numerous community events are held there every year.
Starting in 1933, California’s fairs were funded through horse racing to the tune of $30 million to $40 million a year, Chambers said. But since then, lotteries, card rooms and tribal gaming changed the face of gambling, he said. Betting on horses lessened in popularity, and in 2009 the state decided to fund fairs through its general fund.
“The state’s thinking was we do make money off fairs,” Chambers said, adding that fairs generated more than $150 million in sales and income tax revenue. “But two things changed two years later and the two were that a new government was taking over in probably the most serious financial crisis in the state of California. Some tough decisions made by the Legislature (included) the complete elimination of funding for fairs.”
In Del Norte, even though the Fair Board set aside money and received donations from the community, officials still had to defer capital projects, Fair Board Director Kevin Hartwick told the supervisors. So they reached out to the community for input on whether they would support a tax increase to help the fair continue to exist, he said.
The result was a survey conducted by Oakland firm EMC Research, which interviewed 300 Del Norte residents over the phone for their opinions on the fair in general and the possibility of a sales tax increase.
According to the survey, which was presented to the Fair Board in April, 63 percent of respondents strongly or somewhat agreed that saving the fair was important even if it meant higher taxes.
However, in response to another question, 44 percent strongly or somewhat agreed that taxes are high enough and said they’d vote against any tax increase on the ballot regardless of what the money is used far.
Passage of a sales tax increase for the fairgrounds would require support of at least two-thirds of voters, the survey said.
Tax gets mixed reviews
Hartwick said the Fair Board consulted three attorneys who provided free assistance on creating a special district.
Hartwick asked for help from the county counsel as the Fair Board goes through the LAFCO process to create a special district. He said he wasn’t sure if legislation at the state level would be necessary to create a special district or place a tax measure on the ballot, but asked supervisors to instruct their lobbyist to provide assistance as well.
“As we tiptoe through the process, it became very apparent to me that we aren’t very important here,” Hartwick said, referring to conversations the Fair Board has had with state officials. “It appears from all discussions that we’re just not a priority. We got to help ourselves.”
Hartwick also spoke about State Senate Bill 741, which would allow more local control of fairs. SB 741 would remove an enormous amount of red tape, he said.
“SB 741 is the only thing that is going to help the fair,” Hartwick said. “There’s no other effort afoot to help any fair.”
The Fair Board’s proposal to pursue a sales tax increase got mixed reviews from supervisors. District 1 Supervisor Roger Gitlin said he probably could support a tax increase, but it wouldn’t be his first choice. He said he’d prefer a private model in which a corporation was formed.
“You’re talking about the best location in the community — 700,000 cars a year drive by there,” Gitlin said. “You could have a whole revitalization of our community by putting in new stores and new restaurants and para-mutual dog racing, horse racing, satellite betting. I don’t want to see something which merely sustains a model for seven years. You don’t address the long-term problem.”
Hemmingsen said it would likely take more than three years to completely privatize the fair. And while he may not be in favor of a tax increase, he did agree with the idea of putting a tax measure to a vote and letting local residents decide.
District 2 Supervisor Martha McClure suggested other ways of trying to obtain local control for the fair, including sitting down with Assemblyman Wes Chesbro, state Secretary of Agriculture Karen Ross, county supervisors and the Fair Board and negotiating a land swap or a long-term lease from the state. McClure also said that forming a joint powers authority is easier than trying to form a locally-governed special district.
“We need to start thinking a little bit out of the box and make some — for lack of a better term — horse deals,” she said, adding she has already been working with staff from Chesbro’s office.