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OC Fairgrounds Organizational Needs Assessment Report
OC Fairgrounds Organizational Needs Assessment Report
OC Fairgrounds Organizational Needs Assessment Report
SUBJECT:
DATE:
FROM:
32nd District
Agricultural Association
An Organizational Needs
Assessment of the Orange
County Fair and Event
Center
June 26, 2014
Prepared by
Community Relations
Transparency
Governance
We appreciate the opportunity to serve the 32nd District Agricultural Association and are prepared to
assist in any follow-up actions the Board may wish to pursue.
Sincerely,
KELLY ASSOCIATES MANAGEMENT GROUP LLC
William R. Kelly
President/CEO
Board of Directors
Stan Tkaczyk, Board Chair
Ashleigh Aitken, Vice Chair
Douglas La Belle, Member
*Former Members
Staff
Doug Lofstrom, Chief Executive Officer
Roger Grable, 32nd DAA Counsel - Manatt, Phelps and Phillips
Consultants
Kelly Associates Management Group LLC
William R. Kelly, President/CEO
Christine E. Kelly, Executive Vice-President
David A. Gruchow, Principal
Table of Contents
Executive Summary ............................................................................................. i
Section I Introduction and Overview ...............................................................1
Scope of Work ..................................................................................................1
Background ......................................................................................................2
Financial Overview ...........................................................................................4
Section II Proposed Sale of Fairgrounds ...........................................................7
Overview of Proposed Sale ...............................................................................7
Sale of State-Owned Property .......................................................................7
Sale of OC Fairgrounds Moves Forward ........................................................8
Fair Sale Review Committee .............................................................................9
Establishing the Fair Sale Review Committee ................................................9
FSRC Findings and Recommendations ..........................................................9
Section III Survey Input/Participant Feedback .................................................12
SWOT Analysis ..................................................................................................12
Executive Staff and Employees .........................................................................13
Stakeholders.....................................................................................................15
Community Meeting Participants .....................................................................16
Fair Sale Review Committee .............................................................................19
Section IV Issues, Findings and Recommendations ..........................................21
Board of Directors/Chief Executive Officer .......................................................22
Recommendations ........................................................................................22
Organizational Issues ........................................................................................23
Organizational Impacts of Employee Perceptions .........................................23
Lack of Executive Leadership ........................................................................23
Staff Motivation ............................................................................................24
Organizational Structure ...............................................................................24
Recommendations ........................................................................................26
Financial Issues .................................................................................................27
Recommendations ........................................................................................28
Facility Issues ....................................................................................................29
Recommendations ........................................................................................30
Table of Contents
Community Relations .......................................................................................30
Recommendations ........................................................................................31
Transparency ....................................................................................................31
Recommendations ........................................................................................32
Governance ......................................................................................................32
Recommendations ........................................................................................32
Section V Implementation ................................................................................33
Tier 1 - Immediate Action .................................................................................33
Tier 2 - Defer Until CEO Appointment...............................................................33
Tier 3 - Long-Term Initiatives ............................................................................34
Tier 4 - On-Going ..............................................................................................34
Appendices
Appendix A
Appendix B
Appendix C
Documents Reviewed
Executive Summary
On October 4, 2013, the 32nd District Agricultural Association (Association) issued a Request
for Proposal to interested bidders/proposers to conduct an organizational needs assessment of
the Orange County Fair & Event Center (OCFEC). This needs assessment was intended to
coincide with the Associations recruitment for a new Chief Executive Officer and to address a
number of organizational and staffing challenges the Association had been dealing with during
the past five years including the potential sale of the OCFEC site by the State of California.
The attached report begins by providing an Introduction regarding the purpose and scope of
the study as well as pertinent background information about the OCFEC. The Introduction is
followed by a summary of input received from our surveys and interviews with Board members,
staff, stakeholders and the community. We then document our findings and recommendations
in the following categories:
Board of Directors/Chief Executive Officer
Organizational
Financial
Facility
Community Relations
Transparency
Governance
Board member training of applicable governing policies and procedures (i.e., BagleyKeene Act, conflict of interest, etc.).
Greater Board oversight of financial transactions
Repealing the existing State statutes that permit the sale of the OC Fairgrounds.
Clarifying the duties and authority of the Chief Executive Officer as well as his/her
relationship with the Board.
Addressing the specific issues associated with the Fairgrounds sale controversy (avoiding
any Attorney General conflict of interest and exercising greater control over contracts
for political advocacy).
Implementation
This report suggests 25 structural, programmatic, administrative, and cultural changes for the
OCFEC in order to help it address the current and future challenges facing the organization.
Some of these recommendations involve changes that could be addressed immediately while
others should be held in abeyance pending the appointment of a new Chief Executive Officer.
Many of the proposed changes could be accomplished in a one to two year timeframe while
others would be long-term. Finally, some of KAMGs recommendations, especially those dealing
with staffing allocations and employee classification issues, would require further study.
The next step in the process would be to review all of the recommendations, evaluate and
prioritize those changes that would have the greatest impact, and develop measurable goals
and objectives for implementation. Such an implementation plan would establish specific
timeframes for completing objectives as well as designating specific responsible staff members.
iv
Scope of Work
On October 4, 2013, the 32nd District Agricultural Association (Association) issued a Request
for Proposal to interested bidders/proposers to conduct an organizational needs assessment of
the Orange County Fair & Event Center (OCFEC). This needs assessment was intended to
coincide with the Associations recruitment for a new Chief Executive Officer and to address a
number of organizational and staffing challenges the Association had been dealing with during
the past five years including the potential sale of the OCFEC site by the State of California.
Kelly Associates Management Group LLC (KAMG) submitted its proposal to the Association on
November 15, 2013 and was awarded a contract by the OC Fair Board of Directors on
December 19, 2013. Actual work began in January 2014. Under the terms of this contract,
KAMG was tasked to evaluate the efficiency and effectiveness of the current OCFEC
organization in terms of its staffing, workload, processes and procedures, management,
communications, flow of information, and other matters and to make recommendations for
possible changes. The scope of KAMGs engagement with the Association reflects the following
tasks:
Monthly Status Meetings KAMG Project Manager will meet with Association staff on a
monthly basis to provide status updates.
Data Collection Conduct meetings with OC Fair Board members, OCFEC staff,
stakeholders and the community to solicit input on organizational needs (including a
SWOT-type analysis). Also, gather and review data sources such as budgets, workload
indicators, policies and procedures, etc.
Data Analysis From the data and information collected, perform an analysis of
organizational strengths and weaknesses, evaluate current practices and procedures,
and assess perceived and actual communication shortcomings (internally, publicly and
with the Board).
CEO Profile - Develop a management profile for a new Chief Executive Officer including
follow-up interviews with each member of the OC Fair Board of Directors.
Background
The OCFEC is located on a 150-acre site in the City of Costa Mesa, California, and serves as the
site for the Orange County Fair, Centennial Farm and Pacific Amphitheatre. In all, some 150
different events are staged at the facility each year, attracting over four million visitors. The
Orange County Fair runs for 23 days each summer with an
average attendance of 1,103,233. 1
In 1890, the original Orange County Community Fair
Corporation organized the first fair in the City of Santa Ana.
While the early focus was on agricultural/livestock exhibits
and horse racing, organizers began introducing carnival
entertainment after 1900. With the exception of brief stints
in Huntington Beach and Anaheim, the Fair remained in
Santa Ana until 1949 when it was moved to its present
location, the site of the former Santa Ana Army Air Base.
The property had been purchased by the State of California after it had established the 32nd
District Agricultural Association to operate the fair.
The California Department of Food and Agriculture (CDFA), through its Division of Fairs &
Expositions, oversees the 52 active state-wide District Agricultural Associations (DAAs) and the
network of 79 annual fair events. The purpose of these Associations is to (hold) fairs,
expositions and exhibitions for the purpose of exhibiting all of the industries and industrial
enterprises, resources and products of every kind or nature of the state with a view toward
improving, exploiting, encouraging, and stimulating them and for "Constructing, maintaining,
and operating recreational and cultural facilities of general public interest. 2 The nine-member
Boards of Directors in these Associations are appointed by the Governor of California to fouryear overlapping terms. The essential duties and responsibilities of the Board are:
History Past 12 Years: Themes and Attendance, Orange County Fair & Event Center, accessed April 23, 2014
http://www.ocfair.com/ocf2/about/History.aspx
2
California Food and Agricultural Code 3951
Financial Overview
The Associations fiscal year begins on January 1st and ends on December 31st. For the 2014
fiscal year, the adopted operating budget is $29.7 million against estimated operating revenue
of $32.9 million. In addition, the Board has authorized some $1.5 million for major projects and
capital expenditures, leaving an operating cash balance of $1.7 million for the year. Exhibit 1
shows actual and budgeted operating revenues and expenditures since 2010.
Figure 1
OCFEC Operating Revenue and Expenses
Source: Orange County Fair & Event Center 2014 Operating Budget and Capital
& Major Projects Expenditure Plan
Revenue projections are based on a rolling four-year average and are adjusted for any known
variations from the previous year. Budgets for full-time staff reflect the anticipated full year
costs for these positions while part-time temporary staffing is budgeted at the previous fiscal
years actual cost. Non-personnel related expenses are based on a 3% increase over the
previous fiscal years estimated actual cost. All budgeted expenses that are based on previous
years experience have been adjusted for any known variations in the new fiscal year.
Exhibit 2 shows the distribution of 2014 operating expenses by major category:
Source: Orange County Fair & Event Center 2014 Operating Budget and Capital & Major Project
Expenditure Plan
For 2014, the OCFEC has budgeted 92 full-time and 147 full-time equivalent seasonal part-time
employees. In addition, over 1,500 individuals are hired each year to support the Orange
County Fair events. Based on the 2014 organization chart, the OCFEC functions are divided into
two major management levels reporting to the Chief Executive Officer with a series of
department charters at the next level. Management and departmental levels are depicted in
Table 1 below:
Table 1
OCFEC Management Levels
Chief Financial Officer
Director of Accounting
Director of Events
Director of Human Resources
Director of Facilities
Admissions
Business Services
Source: Orange County Fair & Event Center 2014 Operating Budget and Capital & Major Projects
Expenditure Plan
Much of this Overview is excerpted from the report by the Fair Sale Review Committee, submitted to the OC Fair
Board on January 14, 2013.
10
11
SWOT Analysis
In order to assess the factors that both constrain and enable the OCFEC organization, KAMG
employed a SWOT analysis approach to the participant interviews and community meeting. The
goal of a SWOT analysis is to help specify organizational or project goals, identify internal and
external factors that can help or hinder goal achievement, match strengths and opportunities,
and convert weakness and threats to strengths and opportunities. While most of the comments
and observations generated through this process tended to
focus on the issues surrounding the proposed fairground
sale, it was not uncommon to hear input regarding the
streamlining of OCFEC processes, strengthening
interpersonal relationships and community outreach,
controlling costs, improving communications (both internal
and external), and dealing with the Fairs impacts on the
surrounding community (i.e., noise, traffic, etc.). Many of
the Opportunities identified were largely viewed by the
participants as actions that the organization should take to
address current challenges and threats.
12
The following will present the perceptions and viewpoints of the OCFECs strengths,
weaknesses, opportunities and threats as expressed by the participants. It is organized by major
group.
13
Stakeholders
This group represented the vendors at Market Place, amusement operators, show and event
producers, the operators of the equestrian center and concessionaires.
15
STRENGTHS
Staff has significant institutional history
Employees are great to work with
Employees go the extra mile
Family oriented facility
Location/Location/Location
WEAKNESSES
Get mixed messages periodically i.e. make a decision then it gets changed up the line
Changing executives and then changing directions/policies
Micro management of issues
Conflicts between Board Members
OPPORTUNITIES
Implement the Master Plan
Close Gate 8
Move the Farm closer to the equestrian center
Think outside the box
Be more creative
THREATS
Not being open to outside input from users/vendors
Not thinking from a private business viewpoint
17
19
20
21
Bennis, Warren G., and Burt Nanus. Leaders: The Strategies for Taking Charge. New York: Harper & Row, 1986,
pg. 29
22
Organizational Issues
KAMGs assessment of organizational issues stemmed from the comments received during the
outreach efforts, its review of existing policy and procedure documents, and its analysis of
industry best practices as compared with current OCFEC operations. The following are KAMGs
findings and observations followed by specific recommendations for changes.
ORGANIZATIONAL IMPACT OF EMPLOYEE PERCEPTIONS
When identifying organizational strengths, the SWOT analysis consistently noted the exemplary
work of both the full-time, part-time/seasonal OCFEC employees.
Despite the changes in the chief executive and certain upper level staff positions, there is an
accepted belief among a segment of the staff that favoritism, unfair treatment, and ongoing
whistleblower lawsuits are continuing to inflame negative feelings and opinions throughout the
organization. While KAMG could not establish the credibility of allegations, appropriate review
needs to occur to address the underlying issues.
LACK OF EXECUTIVE LEADERSHIP
Because of the changes at the CEO level, there has been a noticeable lack of consistent
leadership. As a result, the team continued to functioned but with no vision resulting in a
ebbing of confidence and commitment. The Board realized it needed an interim solution while
the ONA was being conducted and while a new CEO was being recruited. The present CEO
(former VP of the OCFEC) was retained by the Board to calm the waters, improve the
professionalism of the relationship with the Board and give the employees a seasoned,
respected executive. From all indications during the outreach process, this goal has been
achieved.
Given all of the changes occurring at the executive levels, organizational processes have
become somewhat reactionary and incremental with several new rules and procedures being
promulgated in direct response to immediate issues without benefit of discussion or input from
those affected. This has sometimes resulted in the perception that change was occurring for
changes sake alone without any reason or rationale. This situation has been exacerbated by
the fact that the organization has come to rely on position knowledge of operational
practices and methods without adequate written rules or procedures.
23
Division
Chief Executive Officer
Functions
Administration
Human Resources
Business Development
Public and Customer Relations
Communication Designs
Government Relations
Education
Vendor/Entertainment Coordination
Accounting
Budget
Purchasing/Contracts
Information Technology
Public safety
Parking
Facility Management and Maintenance
Food & Beverage Administration
Based on the employee feedback received during the outreach process, there is a notable
perception that the current placement of Human Resources under the Chief Financial Officer
has created a sense of disconnection between the employees and the CEO.
The proposed allocation of functions enumerated above would produce the following
organization chart:
25
Figure 5
Orange County Fair and Event Center
Proposed Functional Organization
Since most of the subordinate managers of the functions beneath each Division are already
classified as Director, it is recommended that head of each of these Division be assigned a
new classification title as follows:
Executive Director of Finance & Administration
Executive Director of Marketing & Communication
Executive Director of Maintenance & Facility Operation.
RECOMMENDATIONS
Recommendation ORG 1: Implement the proposed organizational structure as outlined.
With the implementation of the new structure, review each of the Executive Director
and subordinate Director position descriptions and make amendments as necessary to
26
Financial Issues
According to the California Department of Food and Agriculture (CDFA) there are 79 fairs and
76 fairgrounds throughout the State. The CDFA monitors the District Agricultural Associations
(DAAs) which constitute about two-thirds of the network. Until recently, the CDFAs Division of
Fairs and Expositions annually provided financial assistance to fairs whose income was
insufficient to meet operating and capital expenditures. The money came from the Fairs &
Expositions Fund which was largely supported by the States General Fund through the
allocation of pari-mutuel horse racing revenues. However, beginning in fiscal year 2011-12, this
funding was eliminated and fairs will have to depend completely on their self-generated
revenues to operate beginning January 1, 2012. 7 Consequently, a significant number of
California fairs are currently at risk of insolvency.
The CDFA utilizes a system for classifying fairs based on a five-year average of total operating
California Department of Food and Agriculture, Network of California Fairs 2011 /2012 Expenditure Plan, April 28,
2011, pg. 2
27
28
Facility Issues
A Master Plan was
adopted in 2003 which
set forth the vision for
the physical
improvements to the
OCFEC property. During
the development of the
Plan, a high priority was
given to reaching out
and including the
community. An
important element of
the Plan was to emphasize the Fairs agricultural/historical importance. Presently, the OCFEC
Board has focused on creating community-oriented monuments to Orange Countys veterans
and workers and encouraging additional outreach initiatives for the Centennial Farm, a
signature element of the OCFEC.
With the exception of the Pacific Amphitheatre, the various exhibit halls, the Administration
Buildings and other appurtenant facilities, the site is predominately made up of asphaltic
concrete used for parking. The Master Plan divides the 150-acre property into the following
areas:
EQC
Amphitheatre
Northwest Village
Central Village
South Village
Festival Grounds
Southwest Village and
Northeast Village
In addition, the Master Plan approved by the Board addressed parking, circulation, signage and
infrastructure issues and provided for a phased implementation. Plan improvements have been
29
Community Relations
The OCFEC property is both a local and regional community asset. It is widely known for its
annual Orange County Fair and Imaginology and the weekly Market Place, as well special
concert events at the Pacific Amphitheatre and other unique sporting and sales events.
Ironically, despite its historical roots the Fairgrounds are less known for agricultural,
educational or equestrian uses. Recently, the OCFEC has engaged in significant marketing
efforts to promote these last identified uses, generating very positive community and regional
interest.
Marketing and exposure is the key to adding success and value. This is especially important now
that California fairs must be financially self-supporting. A good recent example is the OCFECs
invitation to elected and appointed officials from Orange County cities and the County to tour
the facility, learn about the Fairs operations and discuss future opportunities. Such outreach
allows for greater exposure and solidifies connections to local government. Additional proactive
efforts to the community and stakeholders should be explored.
30
There is a concern expressed by external parties that 4-H and Future Farmer activities are
receiving less attention. Although this could not be substantiated, it needs to be addressed.
RECOMMENDATIONS
Recommendation COM 1: Create a Community Advisory Committee comprised of HOA
representatives, neighbors and interested citizens.
Recommendation COM 2: Create a Civic Advisory Committee comprised of
representatives (elected and appointed) from the City of Costa Mesa, the Costa Mesa
School District, the Orange County
Community College District (OCC) and
the County of Orange.
Recommendation COM 3: Create a
User Advisory Committee comprised of
representatives from the Fair
Preservation Society, Equestrian Users,
Wine Society, Vendors, nonprofits (4H
and related).
Recommendation COM 4: Create an
Educational Advisory Committee
comprised of representatives from the Costa Mesa School District, the OCC, the
University of California Irvine, Cal State Fullerton, Chapman University and other Fairs
and institutions.
Transparency
Public transparency websites allow public administrators and elected officials to be held to a
higher standard of accountability; not only among citizens but also amongst themselves. The
access afforded by online reporting promotes scrutiny and analysis which can ultimately help
combat financial mismanagement and fraud. In the long term, public transparency drives
improvements in the quality of governance, making a lasting impact across social, economic,
and political boundaries.
In light of the observations above, the OCFEC web pages are effective within the context of
marketing events and activities on the property. Most of the feedback KAMG received indicated
that users are able to navigate the events and activities pages very well. What is not so easy to
locate is information about the OCFEC organization. Board meeting dates and agendas could be
found, but information pertaining to financial/budget data, organization charts/structures,
salaries, etc. was either not accessible or very difficult to obtain.
31
Governance
The issues associated with the proposed Fairgrounds sale, along with the resultant Fair Sale
Review Committee Report, generated serious mistrust of the previous Board of Directors and
Executive staff by both the public and other OCFEC stakeholders, including employees. The
major themes that eventually came out of this situation focused on the need for the OCFEC
Board of Directors to conform to state meeting laws and to address a lack of transparency from
a public policy perspective. Since that time, a new Board has been put into place, recruitment
has begun for a new CEO and an organizational needs assessment was ordered to hopefully
begin in a positive direction. Further, as recommended in the Fair Sale Review Committee
Report, the Boards relationship with the CEO has been redefined and his/her approval
authority for retaining professional services and approving contracts has been clarified.
RECOMMENDATIONS
Recommendation GOV 1: Implement the recommendations in this report.
Recommendation GOV 2: Follow-up on the recommendations contained in the Fair Sale
Review Committee Report including the on-going training of Board Members about
their legal responsibilities as to the Bagley Keene laws, financial reporting, conflicts of
issue, ethics, etc.
Recommendation GOV 3: In the past, the OCFEC Board utilized a system of committees
whereby three members were appointed to address various topics and issues facing the
OCFEC. KAMG recommends that the Board evaluate the benefit of returning to this
practice in order to vet issues with the CEO, provide the Board with additional oversight,
and to expedite OCFEC business. Possible Board committees may include Finance,
Employee Relations, Legislation, and Construction.
32
Section V Implementation
This report suggests 25 structural, programmatic, administrative, and cultural changes for the
OCFEC in order to help it address the current and future challenges facing the organization.
Some of these recommendations involve changes that could be addressed immediately while
others should be held in abeyance pending the appointment of a new Chief Executive Officer.
Many of the proposed changes could be accomplished in a one to two year timeframe while
others would be long-term. Finally, some of KAMGs recommendations, especially those dealing
with staffing allocations and employee classification issues, would require further study.
Recommendation GOV 1: Implement the recommendations in this report, reflects the overall
direction suggested by KAMG for the OCFEC. The next step in the process would be to review all
of the recommendations, evaluate and prioritize those changes that would have the greatest
impact, and develop measurable goals and objectives for implementation. Such an
implementation plan would establish specific timeframes for completing objectives as well as
designating specific responsible staff members.
Recommendation ORG 8:
Recommendation FIN 1:
Recommendation TRAN 1:
Recommendation GOV 3:
Recommendation ORG 3:
Recommendation ORG 4:
Recommendation COM 1:
Recommendation COM 2:
Recommendation COM 3:
Recommendation COM 4:
Recommendation ORG 5:
Recommendation ORG 7:
Recommendation ORG 9:
Recommendation FAC 2:
Recommendation FAC 3:
Recommendation FAC 4:
Tier 4 On-Going
The Tier 4 Recommendations represent shifts in organizational cultural that should be
encouraged on an on-going basis:
Recommendation BD/CEO 3: Board member review of governing documents
Recommendation FAC 1:
Recommendation GOV 2:
34
Appendix A
List of Participants and Correspondence Received
Appendix A
List of Participants and Correspondence Received
OCFEC Employees1
Sharon Augenstein , CFO
Nick Buffa, Guest Relations Supervisor
Jerry Eldridge, Director of Facilities
Dan Gaines, Director of Entertainment
Roger Grable Legal Counsel (Manatt, Phelps and Phillips)
Tamara Goddard, New Business Development
Joan Hamill, Director of Community Relations
Jason Jacobson, Director of Planning/Presentations
Bianca Kulbrick, Director of Human Resources
Elaine Kumamoto, Director of Accounting
Ruby Lau, Marketing Director
Teresa Mason, Events Coordinator
Jason Pope, Plumber
Michelle Richards, Chief Business Development Manager
Sabrina Sakaguchi, Communications Coordinator
Howard Sandler, Director of Events
Robin Wachner, Communications Director
Jeff Wilson, Executive Assistant to the CEO
Evy Young Guest Relations Supervisor
Stakeholders
Rick Hanson, EQC
Tom Hatch, City of Costa Mesa CEO
Guy Leavitt, Ray Cammack Shows
Tamara Letourneau City of Costa Mesa Asst. CEO
Andre Lopez Lopez Works
Ryan Miller, OC Market Place
Mike Robbins, Paradise Cigars
Jeff Thornberry, Pristine Systems
Fair Sale Review Committee
Sandra Genis
Lisa Reedy
Mike Robbins
Lisa Sabo
Theresa Sears
Others Interviewed
James Henwood, President/CEO, Los Angeles County FAIRPLEX
Vern Kimball, CEO, Calgary Stampede
Appendix A
List of Participants and Correspondence Received
Letters Received2
Debbie Cook
Friends of Harbors, Beaches and Park
Community Meeting
SEE APPENDIX B
1
2
Appendix B
Community Meeting Notice and Attendees
Appendix C
Documents Reviewed
Appendix C
Documents Reviewed
By-Laws of the 32nd District Agricultural Association
California Food and Agricultural Code 3001 et. seq.
California Department of Food and Agriculture, Network of California Fairs 2011/2012 Expenditure
Plan
California Department of Food and Agriculture, Division of Fairs and Expositions, Recommended
Guidance for Fair Directors
California Department of Food and Agriculture, Division of Fairs and Expositions, 2013 Rules for
California Fairs
Fair Sale Review Committee Report January 2013
Los Angeles County FAIRPLEX 2030 Strategic Vision
OCFEC Board of Directors Governing Policy Manual
OCFEC Master Plan 2003
OCFEC 2014 Operating Budget and Capital and Major Projects Plan
OCFEC Organizational Charts 2011 to 2014