Opinion: Del Mar getting in over its head with fairgrounds purchase
Based on recent statements and actions from our City Council, it seems as though the council is quite anxious to purchase the fairgrounds. However, in my opinion, the City Council has not been completely forthcoming with the current financial performance of the fairgrounds. The plain and simple fact is that the 22nd District Agricultural Association has lost money in each of the past three years (2007, 2008, and 2009). In 2008, the losses were more that $3,000,000. These are the facts as they appear in the audited financial statements for the 22nd District Agricultural Association. If you would like to see a copy of this report, you can either request a copy from the city or I can email you a copy (send your request to preston.vorlicek@gmail.com).
Please note that should the City of Del Mar purchase the fairgrounds, there will be an additional financial burden on the fairgrounds to repay loans that will be used for the purchase. This will add several million dollars to the annual operating expenses of the fairgrounds.
To be fair, Councilman Carl Hilliard has stated that the City of Del Mar has looked at the fairgrounds’ financial statements “upside down and inside out,” and he has concluded, “I know we can do a much better job.” I, for one, would like to hear more about the details of how “we can do a much better job.”
I am quite concerned that the City of Del Mar is getting in over its head with this purchase. The end result being that the fairgrounds becomes a real financial burden to the City of Del Mar. To this end, I have identifying some guiding principles that I hope that the City Council will seriously consider going forward. Here they are:
There should be a hard, impenetrable wall between the City of Del Mar finances and the fairgrounds finances. Absolutely NO bailouts, rescues, loans, investments of ANY kind from the City of Del Mar if the fairgrounds gets into financial trouble. Let the fairgrounds go bankrupt if necessary before they drag the City of Del Mar with them.
The City of Del Mar should maintain control of the fairgrounds (51 percent or more of the fair board). Majority ownership without control makes absolutely no sense in this situation. Imagine if we had less than 50 percent control and the rest of the fair board decided to build a mega-hotel on the property. We would be in the EXACT same position we are in today (a voice, but no control). We want control of the property to make sure any development is “ecologically sensitive” among other things. Do you think the City of San Diego cares if a mega-hotel is developed on this property? Think again. True local control (Del Mar) is required.
Fair board positions should not be used for political patronage. The City Council should commit that the citizens will elect all fair board members. There should be strict term limits, “reasonable” compensation, and a strict code of ethics.
The final decision to purchase the fairgrounds should be put to a city-wide vote. The Del Mar City Council has a history of mis-reading the public when it comes to financial matters. Do you remember the real property transfer tax, the cottage tax, and undergrounding? All issues supported by the council and rejected by the voters and constituents. The City Council seems to believe that the five or 10 people who stand up at the City Council meeting represent the community. They do not. They represent less than 1 percent of the community. On such an important matter as this purchase, the Council should know EXACTLY where the community stands. The only way to do this is by a vote.
No defined benefit pension plan and “real world” benefits for all fairgrounds employees. This is exactly why the State of California and City of San Diego are bankrupt. A “401K like” defined contribution plan would solve this problem (the City of Del Mar should move in this direction as well).
I encourage you to communicate to the City Council about your concerns regarding the rush to purchase this property.
Preston Vorlicek, Del Mar