JOINT BOARD OF COMMISSIONERS'

FAIR BOARD MEETING

July 10, 2001

11:30 a.m.

Convention Center, Meeting Room 2, Fairgrounds

APPROVED 8/1/01

 

Dean Hansen, Chair, Fair Board, presided with Francisca Johnson, Vice Chair, Charles Warren, Jon Jaqua, Tom Hunton, and Mike Gleason, Executive Director

 

Commissioner Anna Morrison presided with Commissioners Bill Dwyer, Bobby Green, Peter Sorenson and Cindy Weeldreyer present.  County Administrator Bill Van Vactor, County Counsel Teresa Wilson and Recording Secretary Melissa Zimmer were also present.

 

OPENING REMARKS

 

Dean Hansen explained the fairgrounds is unique in that it serves a greater mission than any other fairground in Oregon, as well as a convention center.  He asked the Board to consider three motions: to continue to support their mission: apply programs that support family, youth and community values, support the visitor and convention industry and provide a venue for community celebrations and events.  He added they would ask the Board to extend the Board Order that authorized all funds from 2% to 5% transient room tax to be used on the capital side to be used for capital improvements and allowing the Fair Board to refinance the 1998 bond.  He noted the Fair Board received no operating subsidies, unlike other convention centers.  He said they offer the fairgrounds as a business and the Fair Board had no plans to ask for any subsidies but needed the Boardís help with transient room tax.

 

KEY REMARKS

 

Mike Gleason, Executive Director, stated that the facility is a countywide facility.  He noted the Fair Boardís mission came about as a part of a discussion that included CVALCO.  He said they believe they are about a C plus grade convention facility.  He thought it would take about ten years to get an A grade.  He said they made major changes in improvements in infrastructure, storm water and sanitary sewer and fixing roofs.  He said they went through a master planning effort making the repairs in three phases and worked with CVALCO and commissioned a report.  He added out of that report came the remodeling (including refinancing all the bonds) under one umbrella, plus they continued the business agreement that any surplus would be invested in fixing the existing buildings.  He said a bond council did the bond perspective and projected room tax to be approximately a 3% compounded with interest to be at a 4% compounded.  He said the model the County had been using had been about 2% compounded with a 3% interest rate.  He said they are on the edge of having to make business decisions around capital reinvestments and refinancing the bonds to utilize the money to shore the payments and existing bond debt structure.  He said it would be refunding  the bond, not new debt.

 

Gleason noted the roof on the fairground building was not completed and they hoped to put on a new roof.  He added when they were doing repairs, the hot water pipes were full of sludge because of poor maintenance practices in the past.  He thought it would cost about $200,000 to fix the roof.

 

Gleason said they had used road fund money to repair the parking lot.  He said there are investment needs with plates and glasses.  He said they had made a rent raise and are at the top end of their market.  He added they donít get 100% capital subsidy as other convention centers do.  He said they are able to leverage room tax investments.  He noted the most important issue was pollution.

 

POLLUTION ISSUES

 

Tom Hunton explained there was need for improvement for the storm water situation.  He noted the main issue was all of the storm water from going into Amazon Creek.  He stated it had already been listed in violation of temperature, water quality and E-coli level.  He said the fairgrounds had been cited by the City of Eugene and threatened with a lawsuit for past pollution occurrences.  He announced the Fair Board had adopted a zero discharge policy for any future events.  He said staff was working with each user group, educating them about the storm water problems.

 

Hunton said the Fair Board formed a subcommittee which they would prepare a recommendation for the number and types of animal activities.  He said the subcommittee would be coming back with capital improvement options, estimating costs at $300,000 to $400,000.  He said they were looking to the County and room tax as part of the seed money for state and federal matching dollars.  He said if livestock was no longer a part of the fair,  that segment loses. 

 

ENTREPRENURALSHIP

 

Jon Jaqua said it was not true that the Fair Board was going to use the transient room tax to build the planetarium.  He said that it was a private/public partnership identifying economic development resources that would be available as defined by County policy.  He said the Fair Board did not want to move forward with the planetarium until there were substantial additional resources committed.

 

Jaqua said the community facilities program acts like a special public works program where bond requests are consolidated for public infrastructure and the issuance costs were picked up by the state.  He said it would be used for the public facility but a requirement was that the County would have to back the obligation.  He said it seemed prudent that if the County were allowing the refinancing of their existing bond and pledged the transient room tax to the fairís capital projects (as committed in the past) then future room taxes could back the obligation.  He said the intent was not to use the room tax to make any of the payment, but to become collateral to make the deal.  He said their intent was to raise the funds for the project over time.

 

Jaqua noted the cost for the first phase of the project was $1.3 million with subsequent phases estimated at $3.2 million, fitting it into the Wheeler Pavilion. He said the Fair Board thought it would be best to try for a freestanding dome and attempt to find the resources for a first class facility.  He said the private commitment of $450,000 is non-wavering.  He noted the planetarium was still operating near Autzen Stadium and the current plan was to have the new skyvision equipment installed in that facility and then moved into the new facility once it is completed.

 

Jaqua said the success of this project was critical to the viability of the fair, if it is to continue without help from the general fund.  He said economic development resources at the local, state and federal level should fund one-third of this project.  He said they had been working with the state on locating resources.  He asked the County to help them find economic development resources for legitimate economic development projects as defined by County policy.

 

Dwyer stated that the video lottery dollars may be a source of revenue and encouraged the Fair Board to apply.

 

Morrison noted the fairgrounds were on a seven-year plan.  She asked why they were refinancing again.

 

Jaqua responded that it would free up money.  He said based on their projections, there was a possibility that there wouldnít be the additional room tax money for the capital project.  He added there was a substantial risk that they might not be able to make the bond under the current structure.  He said by refinancing, they were freeing up money to do repairs beyond 2009.

 

Van Vactor recommended that the Board of Commissioner ask the Fair Board to address those requests in writing in an agenda packet that would come at the same time as the Board Orders to answer their questions.

 

Gleason said they were not taking on more debt, they were taking on more time to reduce the payment and free up money for repairs and maintenance.

 

Wilson stated it would actually be the Countyís debt and it would be the County which would do the refinancing.  She said under the sweep order, more money becomes available to do some of the work, and the overall annual debt payment is reduced so the risk of not making the debt payment is lessened.

 

Gleason said the Fair Board was committed to operating the Fairgrounds as a business in the operating account.  He said if they raise their rates for events, they calculated that 80% of the 600 events they have annually would leave.  He said they need to meet with CVALCO to track what would generate room nights.

 

Kari Westlund, CVALCO, reported she spent time looking at generating room nights.  She passed out a letter (copy in file) addressing refinancing the debt and a recommendation from the CVALCO Board  to the Board of  Commissioners, extending the authorization and offering the refinancing (with the provision they have discussions about cash flow) and whether it should be put to use at the fairgrounds or around the County.  She said CVALCO wanted the transient room tax for projects that are an investment by room tax.  She said it was not realistic for the Fair Board to do all of the capital projects by transient room tax as they do not have a large enough revenue stream.  She added CVALCO recommended exploring the Springfield convention center idea and encouraged the County to participate in a feasibility study.

 

Bob Zagorin, CVALCO Board,  said the vision for the facility with families, convention and cultural events was the first thing he had seen in 20 years that could benefit the convention and visitors industry throughout the entire county.  He supported it.   With regard to the planetarium, he said the CVALCO board identified the primary needs in developing a destination attraction.  He said there was a need for a major destination attraction.  He said the CVALCO board is committed to insuring that room tax continues to grow and is not diverted to non-visitor related things.  He said it was a win-win proposition.

 

Weeldreyer asked if Lane County was large enough to sustain two conference centers.  She looked forward to an additional work session because the economy is changing and the visitor industry is one of the most important in Lane County.  She concurred with Zagorin on going forward.

 

Mike Drennan, CVALCO, noted his Board was supportive of the planetarium and they separated the planetarium discussion on refinancing the debt because they were two separate issues. He said the majority of the Board realized that the refinancing made fiscal sense, as it gives the Board of Commissioners an opportunity to look for alternative uses for the tax money.  He recommended the Board of Commissioners review this in 2003 while the bonds were in effect.  He thinks there could be two conference centers as they would not be competing, they would be serving different markets.

 

ACTION

 

Morrison said the future action was for the Board of Commissioners to go to agenda setting, and setting up a future work session with information from staff file notes and the Board Order.

 

MOTION: to continue to support the Lane County Fairgroundsí mission.

 

Green MOVED, Sorenson SECONDED.

 

Dwyer wanted the information with the concerns addressed so they could have a proper discussion

 

Green stated that the motion demonstrated commitment and support for the fairgrounds by the Board of Commissioners.

 

VOTE: 5-0.

 

There being no further business, Commissioner Morrison adjourned the meeting at 12:30 p.m.

 

 

Melissa Zimmer

Recording Secretary