$500 awards to Del Mar fairgrounds employees put on hold

By Joe Tash

The president of the Del Mar fairgrounds board has instructed fairgrounds staff to postpone an awards program under which workers would receive $500 gift cards as a reward for the fairgrounds’ financial performance in 2011, after state officials said the program may violate personnel regulations.

The 2011 Superior Accomplishment Awards Program was approved unanimously by the fair board at its Feb. 15 meeting. The program dates back to 1998, when the fairgrounds began giving workers annual awards of up to $500 apiece.

The state-owned fairgrounds are operated by the 22nd District Agricultural Association, whose nine-member board of directors is appointed by the governor. The 22nd DAA — and other similar districts around the state — fall under the jurisdiction of the California Department of Food and Agriculture (CDFA), and its Division of Fairs and Expositions.

Fairgrounds CEO and general manager Tim Fennell told the board at its meeting — and affirmed in an interview — that he believed the awards program complies with state regulations.

But based on an inquiry from this newspaper, state officials notified the fairgrounds that the program may violate state personnel rules.

In light of state officials’ concerns, fair board president Adam Day directed staff on Tuesday (Feb. 28) not to move forward with the program.

“I’ve asked the 22nd DAA staff to not implement the program until we sit down with (CDFA officials) and make sure our program is in full compliance. We’re looking forward to talking with them at the end of this week,” Day said.

Fennell did not respond by presstime to a request for comment on the state officials’ concerns. But in an interview last week, he said the fairgrounds generated a record net profit of $2.7 million in 2011, which will be used to make improvements at the facility. The fairgrounds’ operating budget for 2011 was $56.5 million.

Fennell said he expected to disburse the maximum $500 award to most of the district’s 175 employees, at cost of $70,000 to $75,000. Neither Fennell nor his assistant general manager are eligible, he said.

“When you win the Super Bowl, you get a Super Bowl ring. Our folks won the Super Bowl as far as fairgrounds are concerned, and this is a way of recognizing them for their efforts,” Fennell said.

In a memo to the fair board included on the Feb. 15 board agenda, Fennell noted that the Superior Accomplishments Awards program was established in 1998 under state personnel rules, and that the 22nd DAA received permission from CDFA to use the program.

“CDFA advised us that we could administer the program ourselves with no Sacramento approval needed,” wrote Fennell in the memo. The district has given awards to its employees under the program every year between 1998 and 2010, except for 2008, when the poor economy caused some events to be cancelled and others downsized, and Fennell felt the fairgrounds’ financial performance did not merit the employee awards.

In response to an inquiry last week, CDFA officials said, however, they were concerned the 22nd DAA program violates state rules governing employee awards.

“Superior Accomplishment Awards are intended for individuals or teams of state employees who, through specific recognizable actions, make significant improvements to government. CDFA is concerned that the awards at the Del Mar Fair do not meet that standard. If the fair persists with plans to make the awards, CDFA will review its options for next steps.” wrote Steve Lyle, CDFA spokesman, in an email.

Such awards may be given for “specific actions that improve state government,” wrote Lyle.

Rules for the Superior Accomplishment Awards Program are listed on the website of the state Department of Personnel Administration, which lists three examples of performance that would merit an award:

•An important contribution to science, research or development.

•An unequaled personal effort in overcoming unusual difficulties or obstacles in the completion of a major project or task with substantial benefits to the State.

•Completion of a major project or task in a significantly shorter period of time with substantial benefits to the State.

Fennell said the Del Mar fairgrounds, which hosts hundreds of events each year, including the San Diego County Fair and the summer horse-racing season, is the most successful in the state and one of the most successful in the nation.

While other government agencies are laying off workers, the Del Mar fairgrounds is creating jobs, Fennell said, and gave a large part of the credit to the fairgrounds employees, who have continued to do excellent work even though they have not received raises in recent years and, along with other state employees, have had to take unpaid furlough days.

If the program does go forward, workers who qualify will receive their choice of $500 gift cards for Albertson’s, ARCO gasoline or Costco, Fennell said.

“I will tell you it has paid dividends over the years. This program has contributed to our success year after year after year,” Fennell said. “The question should be, why are we so successful? And part of it is because of this program.”