By Tina Richards

The Orange City Council is deferring approval of a one-year extension to its contract with the Orange International Street Fair, Inc. (OISF), pending the results of an audit slated to be presented at the March council meeting.

OISF produces the annual street fair, held over the Labor Day weekend, under a partnership agreement with the City of Orange. The city supports the fair because it offers a significant fundraising opportunity for local nonprofit organizations that benefit from food and beer sales. The city’s contract with OISF expired in 2017, but was extended for one year to allow the 2018 fair to proceed. OISF is requesting another extension through 2019 to allow preparations for this September’s event.

The audit of OISF policies, procedures and financial management was initiated by Councilman Mike Alvarez last fall, in response to complaints from local nonprofits and questions about OISF’s finances.  “We don’t know how much is coming in or going out,” Alvarez said. “Orange nonprofits get turned away. There is little oversight or full disclosure into what the OISF organization is doing.”

The books are closed
Previous requests for an audit, going back to 2014 when the city signed a four-year contract with OISF, have been rebuffed. In a statement issued in February of that year, OISF said, “We are respectfully opposed to the suggestions that the city appoint a nonvoting representative to our board of directors, and to require OISF to provide a financial audit to the city. These suggestions are inefficient and an expense the city should not incur.”

The questions mounted. Are specific nonprofits given preference over others? How are beer booths rotated? Should out-of-city nonprofits get space when Orange organizations are denied?  Who decides? In December, the city hired an accounting firm, Nigro and Nigro, to conduct the audit. Its requests to the OISF board for documents were largely ignored.  

The city gave the board a January deadline for the documents. The day before they were due, board members Mike, Jody and Courtney Winger resigned. Mike Winger and his family have been controlling OISF and street fair operations for the last 15 years.

Fair or fare enough
Since then, the requested documents have been provided, and Nigro and Nigro expects to deliver the audit results next month. Meanwhile, OISF has asked for a contract extension enabling it to start preliminary work for the 2019 event. OISF cites the audit, the loss of board members, and increased city reimbursements that may require 2019 fees to be raised.

The city’s reimbursement increased in 2018 by nearly $60,000 because it included staff time, equipment and materials heretofore unclaimed.

The council was asked to approve the contract extension at is Feb. 12 meeting. Alvarez said that he wanted to see the audit results before approving the contract. “We need to put Orange first,” he said.   “We need to incorporate the audit findings into an agreement for September. I see this as a transition year. There are going to be changes that haven’t been made before.”

Mayor Mark Murphy agreed. “We asked for an audit last year,” he reminded OISF President Adam Felix.  “I’m not inclined to an extension until we get audit results back. This is eerily like last year. Maybe,” he suggested, “the OISF board will agree to changes for this year, rather than wait until 2020.”

Orange first
Felix assured the mayor and council that OISF could implement some changes for this year, “depending on what they are.”

Councilman Chip Monaco reported that he had met with Felix, and suggested that open seats on the OISF board be filled with members from local nonprofits and an ex officio member from Orange. “I want to keep the fair going,” he said, “but with oversight from the city.”

Kim Nichols confirmed that she, too, would like to see the audit. “I’d like to discuss this in March, and then take the final product for approval in April.”

Noting that last year’s extension wasn’t approved until June, the council was satisfied that a delayed contract would not seriously impact OISF and the 2019 fair.

March 2019

Orange street fair contract delayed pending audit