Fair, county auditor meet with state officials

Published 4:00 pm Wednesday, March 14, 2007

Auditor says fair funds in dispute are public; greater oversight promised

LANGLEY — After hearing that the Island County Fair Association would need to change its identity if it wants to keep some of its affairs private, association members voted Monday night to abandon the name it adopted nearly 85 years ago.

The surprising move came after an afternoon meeting between fair and county officials and representatives from the state Auditor’s Office and the state Attorney General’s office.

Island County Auditor Suzanne Sinclair told members of the Island County Fair Association at its meeting Monday night that it would need to change its name and take other actions to clear up the cloud of confusion and controversy that has surrounded the troubled nonprofit group.

The fair association has been dogged in recent months over public access to its financial statements and meeting records. The nonprofit came under scrutiny after questions arose about the source it was tapping to pay for a legal battle against the city of Langley over a road easement.

Members of the fair association took the first steps in creating a new identity at its meeting Monday.

The group will now be known as “Friends of the Fair,” and members said they plan to write new bylaws for the organization and request changes to its incorporation status with the state.

The swift shift came after a meeting earlier that afternoon between county and state officials and county fair board chairman Dan Ollis and fair administrator Sandey Brandon.

While fair officials — and more recently, Island County commissioners — have said the public isn’t entitled to know all about the association’s activities and its financial dealings, regulations in the county code indicate the fair association is a public agency, and the rules dictate the set-up of the county fair board that oversees the annual fair.

Sinclair said there was no doubt that the fair board was a public entity.

“It’s an extension of county government,” she said. “It is an arm of Island County government.”

Sinclair said a clear line had to be drawn between an association that’s branded with the name of Island County and a private one that would work on behalf of the fair, but beyond the controls of county government.

Sinclair said a name change would make the difference clear.

“It might be a good idea if the name was changed to make it more distinct, so it’s in some way clear that it’s a separate entity and not a governmental association,” Sinclair said.

Sinclair also made it clear that substantial changes in the relationship between the county and the association were necessary.

Changes coming

County oversight will be increased on how fair money is spent, and the county fair board will be held accountable for the money it taps from the county fair fund.

Sinclair also deflated earlier views held by some county and fair officials about how money from the County Fair Fund could be used.

The fair fund is an account in the county budget that includes all gate receipts, fees and other revenues from the county fair. But county commissioner Mike Shelton recently said he didn’t consider money in the County Fair Fund to be public money, and said the county has “no right, title or interest in that money.”

After her meeting with state officials, Sinclair said the fair fund was entirely under the control of the county, and the money in it, public. Sinclair also indicated that any of the association’s activities related to the fair made the association accountable to county commissioners.

“I would have to say that’s probably true. Because what we established was that the money that is moving through the Island County Fair Fund is public money.

“Public money means that there is going to be some accountability associated with it,” Sinclair said.

Sinclair also said changes would be needed to the fair group’s fundraising efforts, and the county will likely require a contract between the two entities to cover the running of the fair.

The county also needs to sort out if paid employees who help put on the fair will be considered county workers.

“I think you’ll see an actual contract negotiated between Island County and the fair board and the fair association so that everybody is much more clear about who is responsible for what,” Sinclair said.

On future fundraising, Sinclair said if the fair association wants to have a fundraiser on their own it must “very clearly” advertise that it’s an association event under its new name. Sinclair said such funds would then not be considered county money.

The association could always donate money to the county fair fund, she added.

Sinclair made an important distinction, though.

She said that the Island County Fair Fund is part of the county’s current expense fund, which can be tapped by county commissioners to pay for “any proper government purpose.”

“If you wanted it to go specifically to the fair, you would need to say that,” she said.

Such a statement would have to be made at the time of the donation, Sinclair said.

She also said she will examine expenditures from the County Fair Fund with another employee in the auditor’s office to resolve possible bookkeeping problems.

“It was clear that there was confusion in some expenditures, whether they should be recorded under our employer identification number or under the association’s employer identification number,” Sinclair said.

Debate on whether the Island County Fair Association is a public agency or a private association has simmered since January, when The Record submitted requests to review public documents that included the association’s bank statements and donation records. The fair association hired a lawyer and later rejected the records request, saying the agency was a private, nonprofit organization not subject to the state’s open records laws, a view that conflicted with the state Auditor’s Office.

Sinclair said there was a silver lining to press coverage of the dispute.

“To some degree, the good news about the recent controversy is that it has helped get this clarified. And that’s a good thing. Clarity is always a good thing,” Sinclair said.

Later in the association’s meeting, some members had questions about the nature of future Friends of the Fair meetings.

Brandon, the fair administrator, made it clear that records of the Friends of the Fair will be private. Members will be able to review the documents, however.

Meetings will continue to be open to the public.

“There is no reason for them to be closed,” Brandon said.