Former Fair Board Members, Officers Speak Out About Lawsuit
June 5, 2019 at 8:46 p.m.
By -
There has been a lot of conversation on social media outlets, local papers and regional TV stations about how the Kosciusko County Community Fair, Inc (Fair Board) is losing money and might have to close the fairgrounds. This makes us wonder about the Fair Board's current management capabilities. They claim that racing has become their "main source of revenue," and without racing, the fairgrounds are basically doomed. If these claims are true, then how did past board members keep the doors open and pay off old debt while saving enough money back to start the following years fair? Why is it all the sudden an issue? Facts:
• With the exception of 2 years, the Fair Board has had a positive net income for nearly 30 years without racing. (Source:IRS 990's-1999 and 2015)
• However, once they started racing again in 2015, their growth in expenses started increasing at a higher rate than their revenue growth, which flat lined.
• After failing to file tax forms for 2 years, (they showed a payment to their accountant for $7,531 and got current last September.) They paid $85 to their accountant the year before. (Source: Fiscal Year 2017- 990)
• It's true, these past 2 years of filings, showed that this Fair Board has been losing money. A loss of $63,091 in FY2016 and a loss of $83,855 in FY017.
• When the Fair Board signed a contract in 1990 it bound them legally to an agreement that said they would never have motorized racing again.
Is the racing lawsuit to blame? Or is poor management to blame?
• They spent $10,000 in FY2016 (summer of 2017) on legal expenses and $58,536 in
FY201 7 (summer of 2018).
• While they typically spend a small amount on Information Technology, why did they spend $16,086 on Information Technology in FY2016 and increased it to $37,129 in FY2017 with $18,441 going to "management and general expenses?"
• Did the entire Fair Board vote to willfully breach the 1990 agreement? Or did the executive team make the decision?
• Who really runs the Fair Board and the fairgrounds?
• Who is the Fair Board accountable to?
No doubt, lawsuits are extremely expensive, particularly if you are the party who decides to break a 30-year-old a agreement without regard to consequences. This raises a question of the current leadership capabilities. One might also ask how many directors in the past few years have been appointed vs. elected, then ask why has there been such a drastic turnover of capable individuals? Is it to “stack” the board with folks that will go along with the same agenda as those that are leading the organization? Clearly, the current administration puts no merit into the experience of past members and association members who are willing to offer advice on matters such as this. They certainly do not operate like most non-profit organizations. They don't seek advice from professionals in the community or use resources available to them. They have never run an annual operating campaign, nor have they ever hosted a capital campaign to become ADA compliant. There is no transparency with this organization and certainly no long-range plan.
Typically, a non-profit organization is accountable to the association members, the corporate bylaws and their mission statement. The current administration seems to have no regard for any of the above.
Will motorized racing bring more money to the fairgrounds?
• The only time the Fair Board reported any revenue from "motorsports" was in their FY2017 IRS 990 form. The revenue was $7,946 in gross receipts with $1,800 in expenses. That means that they profited $6,146 for 2 races in 2018. That is less than 2% of their overall revenue! Hardly a "main source" of revenue!
• Unfortunately, the social media posts of the events clearly show the poor attendance for their races. The documented lack of attendance to the most recent races makes one question the validity of recent statements by Fair Board spokespersons.
• If you look at their financials from other years, they don't list "motorsports" as a revenue generator at all.
• They do list Fair revenue, which was 89% of their overall revenue in FY2014 and
77% in FY2017, as a main source of revenue. That figure is falling because it appears that their fair admissions are dropping.
• Why don't they list "motorsports" on their revenue line in their IRS forms? Is it because Indiana has zero non-profit race tracks? Are they putting their own IRS non-profit status at risk? Is it because, they want to convince the community that more people support these events than photos show?
What about 4-H?
Many don't realize that the 4-H organization is a separate 501c3 entity from the fair. It is supported by the Purdue extension and the local community. They typically make about $115,000 per year and they spend about $94,000 with a net income of approximately $21,000. Through a mutually agreed upon memorandum of agreement, 4-H actually rents the facilities from the Fair Board for approximately $40,000 per year. Please note that 4-H financials are separate from the Kosciusko County Community Fair organization. At the end of the day the 4-H does not need racing to be successful with the projects they display at the fair. In fact, racing has become a distraction for what the fairs mission is.
What is the bottom line?
There needs to be a new focus on the Fair. The Fair brings the community together, like a huge family reunion, where lifelong memories and friends are made and, in some cases, decades long love stories. The fair needs to be a place where we can teach our youth the values, morals, and how to be examples of strong, respectable community leaders. The Fair Board has unfortunately used the racing issue for personal agendas while dividing the community. This is about our kids, our community, and our future. The Fair Board needs to revisit the mission of the fair.
There were plenty of financial hardships after the track closed in the early 1990s. We clearly remember when we had made it through an entire year and did not use the available line of credit. We remember the high fives, the hugs, and tears of joy. We remember when we hit the “magic number” on the midway rides to gain a higher percentage of profit, then saw those numbers increase for many years. We will never forget Becky Thomas dancing on a table that night, or the pride in Steve Trumps eyes. We were truly a team then, with one vision, and one goal.
It was a priority to work together with the community that supports the fair, and to be good and reasonable neighbors to those that felt the effects of the events held on the grounds. We welcomed all to get involved. Some of the projects we were able to accomplish without the support of racing income would be: replace multiple sections of aluminum grandstand bleachers, new sewer throughout the grounds, upgraded water and drain lines, new fair office, new restrooms, upgrade electric on the entire grounds, remodel Shrine and Home and Family Arts Building, and we were able to put money in a CD for “seed Money” for the following years fair, all while paying down old debt, and not using the available line of credit.
Members of the community can help turn this organization around and bring the focus back to our future leaders and create a place for our community and sponsors to be proud of and want to play an active part in. During a conversation with a prominent businessman, he said “there is no reason this property isn’t the focal point of our county”. You can be involved. Simply go to the fair office or the website and sign up for a Fair association membership. You need to be a member in good standing for at least 30 days prior to the Corporate Annual meeting held the third Monday in November. There is an annual $25.00 fee, that includes two weekly passes to the fair.
Please also note the current Fair Board has rejected members who think differently, overwhelm them with applications of hard-working volunteers! Show them that the community cares about the 4-H youth, our community needs you to get involved. This is our community, this is OUR FAIR!
For the record, the past board members are not involved in the “Fair Accuracy” social media and or website campaign, furthermore, we do not condone or support the current goings on with the Kosciusko County Fair Board of Directors.
Regards,
Bill Leininger, Past Fair Board and State Fair President
Brock Ostrom, Past Fair Board Treasurer
Steve Trump, Past Fair Board President
Mike Loher, Past Fair Board President
Paul Kuhn, Past Fair Board President
Jana Gill, Past Fair Board Member
Jerry Secrist, Past Fair Board Member
Jacoba Burbank, Past Fair Board Member
Will Brandt, Past Fair Board Member
Source: https:j/projects.propublica.org/nonprofits/organizations/350449569
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There has been a lot of conversation on social media outlets, local papers and regional TV stations about how the Kosciusko County Community Fair, Inc (Fair Board) is losing money and might have to close the fairgrounds. This makes us wonder about the Fair Board's current management capabilities. They claim that racing has become their "main source of revenue," and without racing, the fairgrounds are basically doomed. If these claims are true, then how did past board members keep the doors open and pay off old debt while saving enough money back to start the following years fair? Why is it all the sudden an issue? Facts:
• With the exception of 2 years, the Fair Board has had a positive net income for nearly 30 years without racing. (Source:IRS 990's-1999 and 2015)
• However, once they started racing again in 2015, their growth in expenses started increasing at a higher rate than their revenue growth, which flat lined.
• After failing to file tax forms for 2 years, (they showed a payment to their accountant for $7,531 and got current last September.) They paid $85 to their accountant the year before. (Source: Fiscal Year 2017- 990)
• It's true, these past 2 years of filings, showed that this Fair Board has been losing money. A loss of $63,091 in FY2016 and a loss of $83,855 in FY017.
• When the Fair Board signed a contract in 1990 it bound them legally to an agreement that said they would never have motorized racing again.
Is the racing lawsuit to blame? Or is poor management to blame?
• They spent $10,000 in FY2016 (summer of 2017) on legal expenses and $58,536 in
FY201 7 (summer of 2018).
• While they typically spend a small amount on Information Technology, why did they spend $16,086 on Information Technology in FY2016 and increased it to $37,129 in FY2017 with $18,441 going to "management and general expenses?"
• Did the entire Fair Board vote to willfully breach the 1990 agreement? Or did the executive team make the decision?
• Who really runs the Fair Board and the fairgrounds?
• Who is the Fair Board accountable to?
No doubt, lawsuits are extremely expensive, particularly if you are the party who decides to break a 30-year-old a agreement without regard to consequences. This raises a question of the current leadership capabilities. One might also ask how many directors in the past few years have been appointed vs. elected, then ask why has there been such a drastic turnover of capable individuals? Is it to “stack” the board with folks that will go along with the same agenda as those that are leading the organization? Clearly, the current administration puts no merit into the experience of past members and association members who are willing to offer advice on matters such as this. They certainly do not operate like most non-profit organizations. They don't seek advice from professionals in the community or use resources available to them. They have never run an annual operating campaign, nor have they ever hosted a capital campaign to become ADA compliant. There is no transparency with this organization and certainly no long-range plan.
Typically, a non-profit organization is accountable to the association members, the corporate bylaws and their mission statement. The current administration seems to have no regard for any of the above.
Will motorized racing bring more money to the fairgrounds?
• The only time the Fair Board reported any revenue from "motorsports" was in their FY2017 IRS 990 form. The revenue was $7,946 in gross receipts with $1,800 in expenses. That means that they profited $6,146 for 2 races in 2018. That is less than 2% of their overall revenue! Hardly a "main source" of revenue!
• Unfortunately, the social media posts of the events clearly show the poor attendance for their races. The documented lack of attendance to the most recent races makes one question the validity of recent statements by Fair Board spokespersons.
• If you look at their financials from other years, they don't list "motorsports" as a revenue generator at all.
• They do list Fair revenue, which was 89% of their overall revenue in FY2014 and
77% in FY2017, as a main source of revenue. That figure is falling because it appears that their fair admissions are dropping.
• Why don't they list "motorsports" on their revenue line in their IRS forms? Is it because Indiana has zero non-profit race tracks? Are they putting their own IRS non-profit status at risk? Is it because, they want to convince the community that more people support these events than photos show?
What about 4-H?
Many don't realize that the 4-H organization is a separate 501c3 entity from the fair. It is supported by the Purdue extension and the local community. They typically make about $115,000 per year and they spend about $94,000 with a net income of approximately $21,000. Through a mutually agreed upon memorandum of agreement, 4-H actually rents the facilities from the Fair Board for approximately $40,000 per year. Please note that 4-H financials are separate from the Kosciusko County Community Fair organization. At the end of the day the 4-H does not need racing to be successful with the projects they display at the fair. In fact, racing has become a distraction for what the fairs mission is.
What is the bottom line?
There needs to be a new focus on the Fair. The Fair brings the community together, like a huge family reunion, where lifelong memories and friends are made and, in some cases, decades long love stories. The fair needs to be a place where we can teach our youth the values, morals, and how to be examples of strong, respectable community leaders. The Fair Board has unfortunately used the racing issue for personal agendas while dividing the community. This is about our kids, our community, and our future. The Fair Board needs to revisit the mission of the fair.
There were plenty of financial hardships after the track closed in the early 1990s. We clearly remember when we had made it through an entire year and did not use the available line of credit. We remember the high fives, the hugs, and tears of joy. We remember when we hit the “magic number” on the midway rides to gain a higher percentage of profit, then saw those numbers increase for many years. We will never forget Becky Thomas dancing on a table that night, or the pride in Steve Trumps eyes. We were truly a team then, with one vision, and one goal.
It was a priority to work together with the community that supports the fair, and to be good and reasonable neighbors to those that felt the effects of the events held on the grounds. We welcomed all to get involved. Some of the projects we were able to accomplish without the support of racing income would be: replace multiple sections of aluminum grandstand bleachers, new sewer throughout the grounds, upgraded water and drain lines, new fair office, new restrooms, upgrade electric on the entire grounds, remodel Shrine and Home and Family Arts Building, and we were able to put money in a CD for “seed Money” for the following years fair, all while paying down old debt, and not using the available line of credit.
Members of the community can help turn this organization around and bring the focus back to our future leaders and create a place for our community and sponsors to be proud of and want to play an active part in. During a conversation with a prominent businessman, he said “there is no reason this property isn’t the focal point of our county”. You can be involved. Simply go to the fair office or the website and sign up for a Fair association membership. You need to be a member in good standing for at least 30 days prior to the Corporate Annual meeting held the third Monday in November. There is an annual $25.00 fee, that includes two weekly passes to the fair.
Please also note the current Fair Board has rejected members who think differently, overwhelm them with applications of hard-working volunteers! Show them that the community cares about the 4-H youth, our community needs you to get involved. This is our community, this is OUR FAIR!
For the record, the past board members are not involved in the “Fair Accuracy” social media and or website campaign, furthermore, we do not condone or support the current goings on with the Kosciusko County Fair Board of Directors.
Regards,
Bill Leininger, Past Fair Board and State Fair President
Brock Ostrom, Past Fair Board Treasurer
Steve Trump, Past Fair Board President
Mike Loher, Past Fair Board President
Paul Kuhn, Past Fair Board President
Jana Gill, Past Fair Board Member
Jerry Secrist, Past Fair Board Member
Jacoba Burbank, Past Fair Board Member
Will Brandt, Past Fair Board Member
Source: https:j/projects.propublica.org/nonprofits/organizations/350449569
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