Orange City Council asks for audit of International Street Fair

November 18

By Tina Richards

The Orange International Street Fair, lauded as the year’s best fundraising opportunity for local nonprofits, has not undergone a management, financial or operational audit for as long as anyone can remember. Councilman Mike Alvarez thinks it is long overdue and asked his colleagues, Oct. 9, to agree to a third party review.

The street fair, held every Labor Day weekend, is operated by the Orange International Street Fair Inc. (OISF), a nonprofit that partners with the City of Orange. The city provides the venue, but OISF has sole responsibility for the three-day event. The city is reimbursed for all of its associated expenses – police, fire, utilities -- but does not make money from the event. Orange supports it because the proceeds from food and beer sales go to the nonprofits that staff, manage and stock the booths.

Behind the scenes
“The fair used to be audited every year, but that hasn’t happened since Mike Winger and his family took it over,” Alvarez says. “Our contract with them states we are entitled to an audit, that we can review all the records, but when we ask for the information, we’re put off.”

He says an audit is warranted because while the OISF is a separate, independent entity, people still think of the street fair as “being Orange.” “We have a duty to understand how it is being operated and managed,” he says. “It’s a cash business. We don’t know how much is coming in or going out. The forms filed to the IRS are ambiguous.”

Alvarez also reports that he’s “received numerous complaints from nonprofits, school groups, and community groups in Orange who feel they have been slighted by the family that controls and profits from the street fair.” This past Labor Day, for example, several Orange-based nonprofits were denied booth space because “there is no room.”  Yet, the Anaheim Hills Little League and Esperanza High School were there.

All about Orange
Alvarez brought up the street fair audit at the city council meeting last June, but didn’t get any traction.  This time, however, his colleagues agreed to take a closer look. He wants the audit done before next April, when the OISF contract is due to be renewed. And beyond the audit, he’d like to see a clause inserted that stipulates Orange nonprofits get priority to sell at the fair.

He also noted that downtown merchants (where the fair takes over the streets) are most affected by the event, but have no voice. He recommends forming an ad hoc committee of downtown property owners who would serve as an advisory group.

Silent partners speak up
“Like it or not, we’re partners with the street fair,” City Manager Rick Otto said. “We have to make sure Orange looks good.”

Councilman Fred Whitaker asked about the cost of an audit, and how much staff time would be involved. Otto reported it should cost about $20,000.

“It should be a shared cost,” Mark Murphy asserted. “We’re partners. The fair’s identity is with the City of Orange. It should be considered a cost of doing business in the next contract.”

“I’m interested in the distribution of funds,” Mayor Tita Smith added. “The fair used to share with the other nonprofits. Does it still do that?”

“We invest a lot in the street fair,” Kim Nichols agreed. “The whole picture would be helpful. The value of an audit goes beyond the finances.”

City staff met with Jody Winger, OISF president, in mid-October and broached the subject of an audit.  She indicated that the organization would cooperate.