Letters to the Editor
Rodeo event should not create venom in community
June 11, 2014Joyce Holmes penned, or had her ghost writer pen, a letter which has been posted on Facebook and Valley Center Happenings attributed to her. The exact same letter was printed under another name as author in last week's issue of the Roadrunner. As I was mentioned and castigated several times I felt it was necessary to respond in the same print format
Paragraph 3: We did not accuse Joyce of not properly completing the 501(c)(3) application. We implied that she had received correspondence from the IRS within a week of the 1/14/13 mailing regarding addition fees needed for the IRS to complete the processing of the application and failed to inform the rodeo Board of Directors of receipt of this letter.
Paragraph 6: Bob Bishop had no problem with the Optimists and/or Chamber of Commerce benefitting from the rodeo funds. The issue was that all funds were stripped away at the end of the event and there was no seed money to start making payment for obligations for the next years' rodeo. The plan was to put possibly $10,000 per year aside in escrow so that if there was a year with zero sponsors or donors the rodeo could still be funded. All remaining funds were still to go to scholarships for the youth of Valley Center.
Paragraph 8: Until the full operation of the rodeo was witnessed it could not be ascertained that many missing items failed to be included in the budgets from prior years. As the first IRS Revenue Ruling regarding not-for-profit organizations was written in 1954, the fact that the books needed to include all forms of income is not novel. All forms of income are declared to include cash, property and/or services. Complete books must include all forms of income. The prior budgets were generated from cash and checks and failed to disclose the in-kind barter income also required to be declared by the Internal Revenue Service. (IRS Internal Revenue Code 170; Revenue Ruling 67-246; Rev.Rul 1983-163; Revenue Procedure 90-12; Rev.Proc 92-58; Rev.Proc. 92-102; Rev.Proc. 2007-66)
Paragraph 9: There are two schools of thought regarding bylaws – minimalist and all-inclusive. The Board of Directors, all of whom had input on the bylaws during the drafting period, chose to go with the minimalist version for a first draft. The option to change Bylaws and Standing Rules is always available to a Board of Directors. In fact, the indefinite service clause was drafted at Joyce Holmes' choice as she did not wish to leave the rodeo until she chose to leave.
Paragraph 10: We were forced to do the guestimate of ticket income, to which Joyce Holmes objected, because she refused to pay for tickets with bar codes and/or numbers on them. As a result there could not be any accurate tracking possible of the number of tickets sold or redeemed with any degree of confidence. Even though I was acting as Treasurer for the 2013 rodeo, all ticket activities were handled by folks other than me. My sole responsibility was to record the income coming in to me generated by sales. I did not order tickets, receive the printed tickets, nor track which tickets were sold or given away. With what little tightened controls available to me the ticket revenue increased from any other prior year.
a. 2006 ticket income was $23,792
b. 2007 ticket income was $23,824
c. 2008 ticket income was $13,279
d. 2009 ticket income was $23,565
e. 2010 ticket income was $30,979 – which included Western Days admissions
f. 2011 ticket income was $17,295.89
g. 2012 ticket income was $30,616
h. 2013 ticket income was $37,200
Paragraph 10: When invoices were given to me I paid the amount due on the paperwork by check. Joyce Holmes objected vociferously to the amounts that I paid on several occasions, one in particular being the amount paid for rodeo livestock. As I was not privy to any planning meeting nor arrangements made for vendors, I had no information whether the amount present on an invoice was indeed the agreed upon amount. All payments were by check except for:
a. Payment for rodeo contestants. All information regarding to whom the payment was made and for which event (cowboy(s) name, date of contest, event, placement, amount paid) was controlled and provided to the rodeo by the PRCA secretary. A printout of the final amount of received and paid was provided to the rodeo by the PRCA which maintains W-9 information on all registered contestants.
b. Payment for armed security at the rodeo. I was writing out a check and the owner of the corporation asked me to please pay in cash. He had a listing of how much each of his employees should receive and with cash payment they would include the amount in their company payroll but the workers could be paid immediately and not have to wait until the end of the week for payment. As the security personnel were his corporate employees and he would have the responsibility to record payroll I agreed to give him the amount he presented via cash.
Paragraph 11: In no way did any person with whom I had any conversation object to handing out tickets as inducement to coming to the rodeo. These benefits are common business practice. What I and Bob Bishop objected to was the Joyce Holmes adamantly refused to document how many tickets had been given away to which persons. Part of operational procedure for any not-for-profit is to send donor letters. The recipients are told in print via these letters that they made a donation worth $X dollars, which represents their donation of cash, property, and/or services minus the value of items given to them. To the best of my knowledge the Stampede Rodeo has never sent any donor letters in any year.
The guestimate for potential ticket revenue discrepancy was based on bodies within the rodeo grounds, our only way of guessing at attendance. The bleachers were rated for 2,200 seats. The Friday night attendance was nearly full. Saturday night was standing room only with substantial overflow of standing folks. Sunday had nearly 1,000 folks in the bleachers. If you guess at only 2,200 full seats for Friday and Saturday times $15 a head, the ticket revenue should have been at minimum $66,000. Instead, I handled only $37,200. That large discrepancy had Bob Bishop and me strongly questioning the "missing" revenue. Any start-up function will give away tickets to generate loyalty to the event. Surely, however, after more than 10 years of the rodeo in our town, it would strain the credibility of a business plan to condone giving away more than half the revenue for tickets in gifts? Or, if the tickets were given away as part of sponsorship of the event or other trade situations, this too should be documented and reported in the State and Federal taxes.
Paragraph 12: At the Rodeo Board of Directors' meeting on June 7, 2013 I had my cell phone placed in front of me in full view, set to record the Board meeting. Earlier that day I had been telephoned by Joyce Holmes and instructed to bring all my rodeo paperwork to the meeting. I sat through the entire meeting of the Board of Directors and there was not a vote to remove me from office. My banker's box of documents was in my arms as I walked to my truck after the meeting. There were three persons with me at that time: Frank Holtz, Keith Wheeler and Bob Niederost. They witnessed Joyce running up to me, shoving me, and grabbing the box, sprinting to her vehicle and roaring out of the parking lot. We just stood there staring at one another wondering what had just happened. The box contents had been stored in an accordion file folder and were in alphabetical order (the order of placement into the banker's box.) There were several emails from Joyce in subsequent days stating that I had retained the unused checks and that 91 were missing. My first question was how did she know that 91 checks were "missing" if she didn't count the unused checks that were nestled in the bottom of the box?
Paragraph 14: I never stated in any fashion that I did not know what was owed regarding sales tax. Before the rodeo event I telephoned the California Board of Equalization inquiring whether a not-for-profit agency needed to pay sales tax on sales of beer, wine, or t-shirts. I was firmly informed that those items would need to have sales tax collected and sent to their agency. As this was a once-a-year event, a temporary sales tax permit was issued with the stipulation that the tax return and sales tax collected were to be submitted by 7/31/13. Many emails were sent to the Rodeo Board members regarding this issue after my removal from office. With multiple subsequent telephone conversations with employees of the California Board of Equalization I was informed that no sales taxes have ever been paid by any prior rodeo event in Valley Center. My permit was the very first ever pulled for a rodeo event in our town.
Year Beer/wine t-shirts Sum Tax due
2006 7,287.00 1,345.00 8,632.00 620.86
2007 7,053.00 1,559.19 8,652.19 622.32
2008 3,176.00 766.02 3,942.02 283.53
2009 3,828.31 4,119.00 7,947.31 639.44
2010 13,751.00 3,618.00 17,369.00 1,397.51
2011 6,325.00 2,382.00 8,707.00 700.56
2012 8,634.00 800.00 9,434.00 678.56 2013 18,808.26 1,184.19 17,992.45 1,332.77
I had great details on the items about which I was allowed knowledge. The great void of missing information, about which I repeatedly asked verbally and in writing is the issue at hand. It is difficult to continue to have my professional reputation sullied and dragged through the arena mud and dust without finally (partially) explaining my position.
It is a great shame that this fabulous community event should generate such venom. The rodeo was intended to be a fun and entertaining event which generated revue for vendors, contestants, and scholarships for the youth of the community. The vitriol from my experience has been a learning curve to me about associating with folks who do not wish to run an event with complete transparency.
David Ross, formerly with the Roadrunner, ran a four part piece on these events online last year, for those who wish to search and read more.