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State, Fair Association, County in Standoff Over Sunshine Laws

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Some nine months after the Humboldt County Fair Association and the county of Humboldt entered into an eight-year lease agreement for the association to operate the county-owned Humboldt County Fairgrounds in Ferndale, the lease still hasn't been ratified by the state, the last step toward making it official.

The county, HCFA and California Department of Food and Agriculture have all been rather tight-lipped about the situation, so it's hard to be certain what's causing the months-long impasse. But it is certainly clear that the state wants to see the HCFA bound by the provisions of California's government transparency laws, the Ralph M. Brown Act and the California Public Records Act, which would require it to conduct its business in public and open up its records to public review, respectively. The HCFA, on the other hand, has argued that as a nonprofit entity it shouldn't be bound to those laws, despite the fact that it maintains and operates 65 acres of county-owned land and is the recipient of public funds.

The situation has grown so dire that North Coast state Sen. Mike McGuire has attempted to mediate the dispute.

"We committed to join a conversation to connect fair representatives directly with the California Department of Food and Agriculture, the agency that oversees fairs in the state," McGuire said in a statement sent to the Ferndale Enterprise. "The goal was to ensure both sides were able to have a conversation and for the department to share why they believe the fair must comply with the Brown Act. I support the department's findings."

HCFA operated as an "affiliate of a government unit" for decades and, thus, was subject to state transparency laws. In 2013, a divided board voted not to renew then-General Manager Stuart Titus' contract and the following year Titus and his wife, Ferndale Enterprise owner, editor and publisher Caroline Titus sued the association, alleging it fired Stuart Titus in retaliation for his unwillingness to keep Caroline from writing pieces in the paper that made board members "look bad," as well as his repeated reminders that the board should abide by open meeting laws. In court filings, the fair association countered that Stuart's job performance and the way he interacted with board members were the catalysts for the decision to let him go. Ultimately, the association agreed to settle the lawsuit, paying the couple $150,000, but did not admit liability.

But in 2014 the fair association did switch its operational status to that of a nonprofit and began arguing that it was no longer bound by state open meeting and records laws. The problem was that the association's lease with the county stated that "all books, records and documents" pertaining to the management of the fairgrounds "shall be preserved by the association and be and remain public records."

Yet the association repeatedly refused requests from the Ferndale Enterprise to turn over what should have been public records under the lease agreement, including meeting minutes, financial records and an audit. These refusals spawned four lawsuits — one that resulted in a judge awarding the Enterprise's attorney $44,000 and two others ending with $31,000 in combined settlement payments.

The Ferndale Enterprise has repeatedly argued — both in editorials and in court filings — that there's an obvious public interest in the association's business, as it's governing 65 acres of public land in the middle of Ferndale, spending public funds on projects to improve public property and making decisions that reverberate through the small town.

When the lease came up for re-negotiation, some members of the public, the Enterprise and a Journal editorial ("County of Humboldt, Please End the Madness in Ferndale," Aug. 1, 2018) urged the county to include specific language in the new lease making plain that the HCFA should be subject to state transparency laws. With little explanation — perhaps other than then-board Chair Ryan Sundberg making a vague reference to a small newspaper "bullying" the association — the board voted 4-1, with Third District Supervisor Mike Wilson dissenting, in October to approve the new lease, which not only didn't include any new language binding the HCFA to transparency laws but also stripped the public records clause that had been in the old lease.

The CDFA, it turns out, was not pleased with this development and has so far refused to sign off on the lease. And in March, the department sent Board of Supervisors Chair Rex Bohn a letter warning that the HCFA's continued refusal to operate under the Brown and Public Records acts will have consequences.

The department noted that the county fairgrounds play an important role in the community as a place to "celebrate successes, be entertained and learn about California agriculture," and that the state has played a notable role in maintaining them through annual "operational and training allocations and grant funds for qualified deferred maintenance projects."

"Over the past five years, the department has provided the county, through the association, over $190,000 in yearly allocations plus nearly half a million dollars in deferred maintenance funding," the letter states. "Before allocating state funds to any fair, the department must be confident that its use will be deliberated during open, public meetings and all records available to the public. Therefore, the association, pursuant to its agreement with the county to operate the fairgrounds, must comply with the Brown Act and the California Public Records Act if the county wishes its fairgrounds be considered for further allocations or deferred maintenance grant money."

Responding to an email from Caroline Titus inquiring if this letter was a cause for concern, Bohn responded simply: "Always concerned." He offered no further explanation.

Last month, the board of supervisors considered an agenda item allocating grants from the Headwaters Fund, which included one of more than $40,000 to the HCFA to make Americans with Disabilities Act improvements to the fairgrounds and improve the fairground's internet connection, in part for the property's role in emergency services plans. Fifth District Supervisor Steve Madrone asked whether the board should take some action to ensure the HCFA was going to follow the Brown Act before giving it public funds.

County Chief Administrative Officer Amy Nilsen said staff would be bringing a report on the HCFA to the board next month, implying the issue would be better discussed then. Bohn also pointed out that because the county owns the fairgrounds, it was its responsibility to make sure ADA improvements were made, which seemed to quash the discussion for the time being.

County spokesperson Sean Quincey declined to comment on the substance of current negotiations between the state, the county and HCFA.

"The discussions around the lease agreement are ongoing, and before talking about those negotiations in the press, the county is going to respect the process and allow stakeholders the opportunity to sit at the table together and figure this out," he said in an email to the Journal. He later added that a clause in the former lease agreement keeps it in place until a future agreement is reached or it's officially terminated by the county, meaning the current impasse will have no impact on the HCFA's ability to put on the fair next month.

HCFA General Manager Richard Conway similarly declined to comment as long as negotiations are ongoing.

HCFA board member Andy Titus, who is not on the lease negotiation committee and therefore says he only knows what's been reported back to the entire HCFA board, says he's been told lease discussions have been put on hold until after the fair, which starts Aug. 15.

Regarding open meeting laws, Andy Titus said he asked HCFA staff months ago to begin posting board agendas, minutes and financial balance sheets to the association's website, which as of last October didn't even include board meeting dates on its public calendar.

"I asked for those things to be posted," he said. "I was like, 'If we don't have anything to hide, why wouldn't we do this? And if we do have something to hide, as a board member, I'd sure like to know what it is.'"

While the posted agendas seem like a large step toward transparency, they also don't seem like they would pass muster under the Brown Act. A brief Journal review of recent agendas indicates the board's closed session agenda has been vague and remained identical for months — with approval of executive session minutes, matters that relate to potential litigation, "executive committee report" and "review correspondence," which would be insufficient under the agenda requirements of the Brown Act. And as of last June, the board was clearly discussing things in closed session that the Brown Act would have demanded be discussed in public — like "building and grounds," "2018 fundraiser" and "general manager goals."

While it remains to be seen if compliance with sunshine laws is in the HCFA's future, it seems pretty clear the CDFA is drawing a line in the sand that the HCFA's digging in on its current stance would have consequences.

Andy Titus said the potential loss of state funds is certainly cause for alarm for the association, which has depleted its financial reserves in recent years — ironically in part through legal battles with the Enterprise over its financial records — and is in further hot water with the CDFA over a delinquent $56,000 loan.

"I definitely think that's a concern," he said. "With our financial state, we just can't afford to not be getting those funds. The grant funds are huge. They're crucial."

Andy Titus, who is relatively new to the board, said he can't concentrate on what happened before his arrival but said he's intent moving forward on making the decisions necessary to make sure the fair, now in its 123rd year, is around for 123 more.

"It's about keeping these things alive for generations to come," he said, adding that for the next five weeks he'll be consumed with just making sure everything is in line for opening day. "Right now, I'm just focusing on the task at hand, which is putting on the best fair possible for the county of Humboldt."

Thadeus Greenson is the news editor at the Journal. Reach him at 442-1400, extension 321, or thad@northcoastjournal.com. Follow him on Twitter @thadeusgreenson.

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