DEL MAR — In an effort to better compensate management employees, officials at the Del Mar Fairgrounds are trying to modify a payment structure that hasn’t been updated in more than 20 years.
About three years ago the state-owned venue, which is governed by the 22nd District Agricultural Association, was criticized for allowing managers, supervisors and other employees, between 2005 and 2010, to improperly cash out leave balances, such as unused vacation pay, totaling almost $525,000.
The state doesn’t permit such action without approval, which the 22nd DAA did not have. Fairgrounds General Manager Tim Fennell said he and other employees used the money during a tough financial time to pay mortgages, college tuition or medical bills for themselves or family members.
Had any of the employees quit, they would have been entitled to receive whatever money they had accrued in a lump sum, Fennell said.
Last year the board of directors began looking for alternative government structures that would give the 22nd DAA more authority to hire and compensate employees more equitably without state constraints, Director David Watson explained during the March 11 meeting.
One potential solution is to expand class levels, which are based on the operating revenue of each fair.
There are seven levels, with the highest applying to fairs with more than $10 million in revenue. Three fairs currently fall into that category. Del Mar’s is the largest, with about $67 million in revenue from the fair and $34 million from horse racing.
The next largest is the Orange County Fairgrounds, with approximately $36 million in revenue.
In a November 2013 letter to the California Department of Human Resources, board President Fred Schenk notes that Cal Expo is considered a Class VII fair, but the general manager’s salary is not tied to the fair class structure.
The Cal Expo general manager is paid about 15 percent more than the two other Class VII general managers, even though Cal Expo is a much smaller event than the ones they oversee.
Fennell receives an annual salary of about $145,000.
Schenk states in the letter that the board “strongly supports expanding the Fair Class Levels to reflect the current operating revenues of the Fairs,” which would also provide an incentive for fairs to increase.
Schenk said the 22nd DAA would pay an outside consultant to study the proposal, an offer accepted by Rosemary Sidley, head of the personnel management division at CalHR.
The 22nd DAA had been working with the county to form a joint powers authority as a potential means for governing the fairgrounds, however, the governor’s office asked that the proposal be put on hold.
In the meantime, Watson, as part of the 22nd DAA governance committee, and other fairgrounds officials met with the governor’s office to discuss other potential ways to retain and compensate management and other nonunion employees.
Fennell said many in management positions at the fairgrounds are responsible for “tens of millions of dollars but they are not compensated” equitably.
Fennell said other governance models are still being considered, but he would like to find a solution within the current system.
He suggests a 10-level classification, with the 22nd DAA falling somewhere around an eight.
CPS HR Consulting has been hired to review classification levels.