COUNTY OF SAN MATEO

Inter-Departmental Correspondence

County Manager’s Office

DATE:

August 12, 2011

BOARD MEETING DATE:

September 13, 2011

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

Majority

TO:

Honorable Board of Supervisors

FROM:

David S. Boesch, County Manager

SUBJECT:

2010-11 Grand Jury Response

RECOMMENDATION:

Accept this report containing the County’s response to the 2010-11 Grand Jury report: It’s Not the Same Old County Fair.

BACKGROUND / DISCUSSION:

The County is mandated to respond to the Grand Jury within 90 days from the date that reports are filed with the County Clerk and Elected Officials are mandated to respond within 60 days. To that end, included is the County’s response to the “It’s Not the Same Old County Fair” report issued on June 30, 2011.

Acceptance of this report contributes to the Shared Vision 2025 outcome of a Collaborative Community by ensuring that all Grand Jury findings and recommendations are thoroughly reviewed by the appropriate County departments and that, when appropriate, process improvements are made to improve the quality and efficiency of services provided to the public and other agencies.

FISCAL IMPACT:

There is no Net County Cost associated with accepting this report.

It’s Not the Same Old County Fair

Findings:

Grand Jury Finding Number 1. The Expo Association retains all revenues generated from all operations of the Event Center, as well as those from pari-mutuel wagering. Revenues generated by the Jockey Club are projected to increase if wagering is expanded with the passage of legislation legalizing wagering on sporting events.

Response: Partially agree. The Event Center does retain all revenues from the Event Center and the Jockey Club. However, we are not aware of any proposed legislation that would allow wagering on sporting events at the Jockey Club, so we disagree that revenues are projected to increase due to the addition of this new source.

Grand Jury Finding Number 2. San Mateo County shares responsibility with the Expo Association for building maintenance and capital improvements over $100,000; yet it does not share in any revenues generated,

Response: Agree. While the finding accurately states the agreement between the County and the Expo Center, it does not reflect the reality that over the past ten or more years the County has not contributed direct funding to building maintenance or capital projects at the Center. The most recent Expo Center capital project, the Jockey Club, included a County loan of $900,000, which the Expo Center is repaying on time and with interest.

Grand Jury Finding Number 3. Commercial and residential development projects slated for land adjacent to the Event Center could provide further opportunities for increased revenue generation.

Response: Partially agree. Since the areas to be developed adjacent to the Event Center are in the City of San Mateo, property and sales tax would go the City, not the County. However, there may be opportunities for the Event Center to market their meeting space and other services to their new neighbors. We are confident that the Expo Center Board will explore all marketing options.

Grand Jury Finding Number 4. The Board of Supervisors has significant control over the Association since the Board appoints the Association’s Board of Directors who serves at the pleasure of the Board of Supervisors. The Board of Supervisors is required to approve the Association’s budget.

Response: Agree.

Grand Jury Finding Number 5. An “internal audit” of the Association has historically been performed by the County Controller’s Office.

Response: Agree.

Recommendations:

The 2011 San Mateo Civil Grand Jury recommends the Board of Supervisors:

1. Direct the County Manager and County Counsel to work with San Mateo County Exposition and Fair Association on an amendment to the operating agreement that would provide for new revenue opportunities for the County.

Response: Disagree. The current agreement requires the Expo Center to be a self-supporting non-profit. Any revenues realized by the Expo Center are reinvested into the facility or set aside for future projects. Most event centers across the country require operating subsidies. Therefore, the County reaps the economic benefits of the activities at the Event Center without any direct investment. We see no need to change the agreement at this time.