The Free Press, Mankato, MN

November 14, 2013

Blue Earth County Fair faces fight for SURVIVAL

Falling attendance, financial troubles may lead to closing one of state's oldest county fairs

By Josh Moniz
jmoniz@mankatofreepress.com

---- — MANKATO — After 154 years serving the surrounding community, the Blue Earth County Fair suddenly finds itself fighting for survival due to plummeting attendance and allegations of financial mismanagement.

The Blue Earth County Agricultural Society, which organizes the fair, plans to respond by proposing to move the county fair to Mankato and selling the Shady Oaks Campgrounds.

On Tuesday, the fair board held both its annual and monthly meetings to discuss the proposal. Several of the fair's shareholders attended the meetings to voice opposition to moving the fair from its agricultural home in Garden City. The debate is poised to shape the future of one of Minnesota's longest running county fairs.

Low attendance, low funds

Newly elected Fair Board President Kelly Marks, a station manager with Three Eagles Communications, and board member Matt Little, owner of Buster's Sports Bar, laid out their views of the situation to the audience: They must move or it will die.

Marks said the fair has institutional problems with its location. She said attendance plummeted from roughly 15,000 visitors per year just six years ago to barely 5,000 visitors this year. She said the fair has also been running a deficit for several years. The organization lost $2,472 in 2010, $11,410 in 2012 and $3,102 in 2013. The Fair Board no longer has any reserve funds.

She said that even with the attendance boost to just over 8,000 visitors during the 150th anniversary, the fair lost money. She said the organization would have gone out of business last year if it had not taken out a $30,000 loan.

In the most dramatic example, a former board member sued the fair board and the former president last year over bounced checks that were supposed to pay for her work for the fair. The case was settled for $1,700 last October.

"We had perfect weather this year, but we still only had 5,000 people. We're one day of bad weather away from going out of business," said Marks. "With the loan we have, we are at risk of losing the campground."

Little said people do not want to drive 20 minutes outside of Mankato to visit the fair. He said a series of high profile drunk driving stings have worsened this perception. He said the limited funds from the limited attendance has prevented them from offering more robust events. He said people end up believing there is nothing to do at the fair.

“It's ridiculous to have this (attendance) in a big county like Blue Earth. We gave out some free admission passes and people still didn't show up," said Little. “People want to drink and have fun (in Mankato) without having problems.”

Marks also said the Garden City limitations made it worse when the only financially viable weekend for the fair was during the same time as the highly popular RibFest event. She said the only other weekends either lacked availability for their grandstand events, which are the fair's only money making activities, or forced them to fight several other local county fairs at the same time.

“If it wasn't for the grand stand events, we would have gone out of business years ago. We don't have options for other weekends,” Marks said.

Financial Fiasco

Little said the Board is also planning to hire a firm to conduct a comprehensive audit of the fair's financial records. He said they are worried about the disorganized nature of the records. He also said they are concerned that serious fraud or theft.

“We have needed a review of finances for years. Even if there is no theft, we need to account for where the money has gone,” Little said.

Mark and Little directly accused two former board members that resigned Tuesday of possible mismanagement: Jerry Kramer, who served as fair board president, and Karen Malchow, who served as vice-president and treasurer. Kramer and Malchow both denied any wrongdoing and said the audit would prove they acted correctly.

"Some of the board members are just paranoid and they have grudge against Jerry. The audit will prove us," said Malchow

Marks said they will seek legal action if any financial mismanagement is found in the audit. However, she said the audit may have to wait until next year because no funds are currently available to cover the $3,000 cost.

Additionally, Marks said the Fair Board recently learned it has never held a non-profit classification and will have to work with previous sponsors to clarify any issues.

“The board took it for granted for years that we were a 501c3 organization. We were selling ourselves to sponsors as something they could write-off on their taxes,” Marks said.

The Blue Earth County Agricultural Society addressed the issue for its side earlier this year by splitting the Fair Board off into a non-profit named the Blue Earth County Fair Association. The campground was turned into its own business organization. Marks said the fair shareholder rights were transferred over for both organizations.

Battle on the horizon

Marks and Little said their plan is to move the fair to Mankato by 2015 and finance the cost by selling the campgrounds. They hope to raise at least $250,000 with the sale and cover the remaining costs through grants and donations.

They have been looking into land around the Mankato Regional Airport as a possible site. Marks said they are hoping Blue Earth County would be interested in buying the site, though they have not yet created a formal proposal.

For 2014, a minimal version of the county fair will be held in Garden City to help prevent further fund loss.

But the Fair Board's organizational rules require they obtain a majority of support of shareholders in a vote before the campgrounds can be sold. Marks said the fair board also wants majority support from shareholders before they are willing to move the fair.

The idea already faced serious opposition from the 15 shareholders that attended Tuesday's meeting, which is the largest turnout for a Fair Board meeting in years. Shareholders objected to moving the county fair from its historic, agricultural home and criticized the Fair Board's lack of communication with shareholders about big changes in recent years.

In the most dramatic instance, former president Kramer spoke at a Garden City township meeting and suggested they could buy enough shares to force the county fair not to move. But, the action was never taken after the Fair Board bylaws showed each person can only have one share.

An official shareholder vote on moving the event will be held in January. Marks and Little said they will join other board members in resigning if their plan is voted down. This would leave the Fair Board with three or fewer members to run the event.

Despite all the problems facing the county fair, Marks and Little said they are still intensely optimistic they will be able to revive the fair after the move.

“I was in 4-H as a kid. It would absolutely break my heart if we couldn't keep something like the fair running (in Blue Earth County),” said Marks. “I'm going to do everything I can on this end to make this work.”