After the surprising ouster of 11-year CEO Dave Kegebein earlier this month, the two board members who opposed the termination were told they themselves were being fired, via a brusque call from California Gov. Gavin Newsom’s office. The well-established and well-loved Santa Cruz County Fair now finds itself in disorder, the man who is given credit for its good run gone. How did the state compliance audit of Kegebein lead to the chaos?
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They showed up at the Santa Cruz County Fairgrounds with muscle — five uniformed members of the California Highway Patrol and Santa Cruz County Sheriff’s Office.
Somebody, obviously, was expecting trouble.
This is not standard operating procedure for a board meeting of the Santa Cruz County Fair, to say the least. But on Oct. 4, representatives of the California Department of Food & Agriculture came from Sacramento to conduct some ugly business. With them, they brought a report of a compliance audit covering two years of the fair’s operations, and inside that report was a lot of seemingly damning evidence aimed like a gunsight at “Employee A” — in this case, the Fair’s CEO of 11 years, Dave Kegebein.
The Sacramento officials and their law-enforcement escort gave the nine-member fair board a simple choice: fire Kegebein or else. The uniforms on site represented the “or else.”
Faced with the possibility of being escorted off the property themselves at that very moment, the board members voted to can Kegebein, a man many of them admired. Only two board members voted against the action.
Kegebein, who had put off a planned trip to Idaho for this specially scheduled meeting, left the premises shortly after the decision and hit the road out of town, a suddenly former state employee.
On Friday, the fallout from that Oct. 4 vote continued to spread. Lookout has learned that the two members who voted against the firing of Kegebein — Loretta Estrada and Jody Belgard — were themselves fired.
“I got the phone call from the governor’s office today,” said Estrada, who had served on the board for 34 years. “I didn’t even get a goodbye. They just hung up.”
Belgard, who had served on the board for 16 years, also confirmed that she had received a phone call from Sacramento informing her that she was terminated from the fair board. Late Friday afternoon, the governor’s office confirmed the terminations and announced that it had appointed Nicolas Calubaquib, 42, of Aptos, and Rachel E. Bickert Wells, 29, of Felton to the board.
The apparent departures of Estrada and Belgard come on the heels of the resignation of board member Bill Barton, who voted in favor of Kegebein’s dismissal. That means that after the immediate dismissal of its key CEO and three veteran board members, the county fair is in disarray at its long-stable leadership level.
Despite the fact it’s called the Santa Cruz County Fair, our local fair and all the other county fairs in California operate under the purview of the state. The state owns the property and has full authority in how the fairs are managed under the California Department of Food & Agriculture.
It was, in fact, the CDFA that conducted the audit that led to Kegebein’s firing. The governor’s office, in fact, appoints and controls who sits on the boards of the various county fairs. And though the fair’s on-site manager, called the CEO, is officially a state employee, he/she is paid through the fair’s own budget subject to its own fundraising. It’s an awkward arrangement that has caused a lot of turmoil over the years, though none quite as explosive as what’s unfolded this month.
In the case of Kegebein’s dismissal, the state’s point of view is that Kegebein either ignored, flouted or otherwise disregarded basic rules in accounting for expenses he charged to his state-issued debit card. It was all documented in the audit report covering two calendar years under Kegebein’s management, 2019 and 2020.
Unauthorized gasoline or automobile-maintenance charges, missing receipts, improper purchases of food and beverages — at issue were questionable purchases by Kegebein for more than $160,000 over the course of four years — along with an array of accountability and communications failures and misdeeds.
Among Kegebein’s wrongdoings, for instance, was traveling to Texas. California law prohibits any state-sponsored travel to a list of states the legislature has determined discriminate against LGBTQ people. Texas is one of 22 states on that list. In 2019, Kegebein attended a convention of fair managers in San Antonio. Busted.
Usually, boards are afforded some time to respond to audits such as this one and take appropriate action. But most of the fair board’s members had not even seen the audit report until the day Sacramento showed up at the fairgrounds with cops.
One board member who voted for Kegebein’s dismissal told me that the board “was kept in the dark until the last minute.” Another board member, who had voted against the dismissal, said that, after the fact, she had found the audit report in an unopened email, in a state-issued email box she never uses. At the moment, however, she was completely taken by surprise.
For many people close to the Santa Cruz County Fair — and the fair depends on a phalanx of volunteers to put on the event every September — you could not have designed in a lab a more effective fair manager than Dave Kegebein. For one thing, there might be no person alive or dead more intimately familiar with the 100-plus acres of the county fairgrounds, located just north of Watsonville on Highway 152. The fair itself draws thousands of locals and out-of-towners for its five-day event every September, and hosts other events throughout the year.
He literally grew up at the fairgrounds. His father, John Kegebein, worked at the fair as everything from a maintenance man to the fair’s manager, dating back to 1963. Many times, John told me, he would work 12- to 16-hour days and little David was brought on to help out however he could, “to pick petunia flowers that were dead and stuff like that, so we’d have a good fair.”
The Kegebein family name is fundamental in the culture of the Santa Cruz County Fair. At 87, John Kegebein still serves as the executive director of the Agricultural History project on the fairgrounds. John’s wife and Dave’s stepmother, Jeannie Kegebein, is the executive director of the fair’s foundation, its fundraising arm. There is even a prominent plaque recognizing the contributions of the Kegebein family.
Before Dave Kegebein’s tenure, the fair had had a half-dozen managers over the course of the previous 12 years, and tensions grew between the state and the fair on the consistency of the state’s funding. “I came in once to bail out the fair,” said John Kegebein, “and I volunteered for two years. The second time I came back, I volunteered for six months and then they paid me for six months. David felt that I shouldn’t have to come back and do that all the time, so he volunteered to do it.”
Dave Kegebein developed a number of vital, practical skills, including concrete, electrical wiring and plumbing. In 2012, he put those skills to work in service to the fair as he assumed the job his father once held. The first couple of years, he did the job essentially as a volunteer until he was finally put on the state payroll as CEO.
John Skinner, a fair volunteer who’s known Kegebein for close to 40 years, told me, “He’s very versatile. He’s done paving and grading and farming. He has skills and he has equipment. And he used his own equipment where he needed it, to get the job done. So he was able to do a lot of construction and repair and upgrading with volunteer labor and his own equipment at minimum cost.”
Others close to the situation paint a consistent picture of Kegebein — an effective, whatever-works, hands-on manager who gets stuff done with whatever he might have on hand in a timely and cost-efficient manner. But no one I spoke to could deny what the audit made clear: that Kegebein was obviously casual, even careless, with the accountability and the paperwork that the state requires.
The audit that brought about Kegebein’s dismissal was a compliance audit, focusing on process and procedure, and not a financial audit. And that distinction is key. No one I spoke to suggested that Kegebein might have taken or used money for anything other than fair purposes, nor does the state accuse him of that.
Kegebein did not respond for comment for this story. However, in a defiant open letter after his termination, Kegebein said that when he first assumed control of the fair in 2012, it was close to insolvency. And in his 11 years as CEO, the fair increased its annual revenues threefold and also created a cash reserve, he said.
In the letter, Kegebein claimed that, over his 11-year tenure, he contributed about $650,000 to the fair’s bottom line, including two years of labor without compensation. (Kegebein was paid a state salary as CEO, beginning in his third year on the job.)
Kegebein’s supporters also point to the revenue streams that he created, such as the establishment of a nearby RV park on the grounds that brings in rent revenues for the fair. “There’s not an inch of that fairgrounds that you can walk on where you won’t see Dave’s handprint on it,” said Estrada, one of only two board members who voted against the motion to dismiss Kegebein.
John Kegebein said that, in his nearly 60 years working in various roles at the fair, he had never seen a compliance audit like this one. In his written response, Dave Kegebein said that, for the first 10 years of his tenure as CEO, the state provided no training in process and procedure. Then came the audit that cataloged his many shortcomings.
It’s worth noting that one of the two years under scrutiny in the audit was 2020, the pandemic year during which the fair was shut down, and the fairgrounds was opened to refugees, both human and animal, of the CZU fires. The audit report makes no mention of those extraordinary circumstances.
After Kegebein’s departure, board chair Don Dietrich took over as the fair’s CEO. At least one board member who voted for the dismissal, Bill Barton, has resigned. The fair’s next event is coming up soon, the Holiday Lights drive-thru light show that opens Nov. 25. In years past, it was an event that Kegebein was heavily involved in. But volunteers, many of them loyal to Kegebein, are now building what is needed to make the event happen.
On Tuesday, the fair board will meet again in the aftermath of the Kegebein firing.
Kegebein was not without his antagonists. At public meetings, some volunteers complained about his management style and decisions, and, some insiders believe, those complaints might have reached Sacramento. But in the eyes of many, for more than a decade, the Santa Cruz County Fair had stable, effective, community-minded leadership from a man who always erred on the side of getting the job finished.
That he was lax and/or ignorant of what the state required of him when spending its money, no one seems to dispute. But, Kegebein and his supporters insist, a full accounting of the past decade would find, whatever his sins, the fair is what it is today largely because of a lifetime of devotion from one man and one family.
Because of this meticulous and consequential audit, the fair’s next CEO is likely to be much more attuned to complying with the state’s requirements. The fair’s paperwork might take priority over its construction work. Kegebein’s successor is going to have to prove that each can be done without compromising the other.