Ag society looks to restructure
It’s not the stock market crash of 1929, but news of a potential share dissolution has brought on a flurry of emotions from many shareholders of the Harrison County Agricultural Society.
According to a letter sent by the HCAS last week to members, the organization recently learned that its current structure as a nonprofit entity will not allow it to continue to qualify for ‘needed grants to repair and upgrade the fairgrounds infrastructure.’
Todd Uhl, vice president of the HCAS, said the organization’s governing documents must be brought up to date under a 1991 Indiana law covering not-for-profit organizations like the HCAS. Specifically, the issue at point is how the society is viewed by funding agencies as well as the Internal Revenue Service.
‘By itself, the law that changed in 1991 is not a concern. But, about 2001, the IRS started tightening up nonprofits and public charities,’ Leslie Vidra, a New Albany attorney specializing in nonprofit entities advising the fair board, said. ‘Public charities cannot have shareholders. They’ve been able to do a lot of renovation and upgrading of the fairgrounds and would like to seek larger grants, but to get those grants they have to be sure they fall into compliance. Why run the risk for a grant-maker to look at them and say that how they operate is fuzzy? The IRS looks at grant-makers and who they give money to. How is their public charity status? What’s the public benefit? What kinds of organizations are you giving grants to? If an organization like the Harrison County Community Foundation gives them a grant under the way they currently operate, it opens them up to be audited.’
On Tuesday at 7 p.m. in the Farm Bureau Insurance meeting room, located at 270 Federal Drive in north Corydon, the annual shareholders’ meeting will take place, with a vote on whether the HCAS should continue as it has been ‘ with the likelihood that it would no longer receive any type of grants for renovations and upgrades ‘ or to revise the Corporate Charter and bylaws to change from a shareholder corporation to a membership organization.
If accepted, all former shareholders would be recognized as ‘Emeritus Members’ and their stock certificates would be retired. The new system would then be based on a yearly membership (in the case of HCAS, $25) as dictated by Indiana state law. If accepted, the $25 fee would include one pass and grandstand admission to the week-long fair, a value of $60.
For many years, shares of stock in the agricultural society have been sold, with shareholders receiving nothing more than a couple of free passes for the longest consecutive-running county fair in the state. Shares were sold for various prices through the years.
Uhl said informational letters were sent to every known address for shareholders, which covered about two-thirds of the membership. Anyone who didn’t receive a letter can contact the HCAS to get one. Members are free to vote by proxy if they can’t attend Tuesday’s meeting.
‘We don’t want to have to do this. We’ve put in a lot of hours debating it,’ Uhl said. ‘But the truth is we have to do this or we don’t have any possibility of getting any grant money from the (HCCF).’
Uhl said he’s heard some of the grumbling already. He said there will be a percentage of shareholders who will be ‘mad as hornets, and a large percentage a change wouldn’t affect.’
‘To be perfectly honest, the value in the shares is the history behind it. It isn’t to get money back. It was an investment in the community,’ Uhl said. ‘I know for those people who have shares and who have been at the fair every year for the past 72 years, I realize the personal value. If this passes, they’ll have some of that historical stock that they can hang on their wall. It would be a nice momento, and, in fairness, that’s all they had before.’
Lafe Curts, a stockholder for more than 20 years, said he believes the fair board is resorting to half-truths to get the change made.
‘They want to do this change to get grants, but, on the other side of that, people paid money for this stock and now it’s not worth anything? Something’s not right,’ Curts said. ‘They’ve already gone out and gathered a bunch of proxies, and they never told those people what was going on. If people want it and it’s done right, then that’s fine, but they aren’t telling people what’s going on.’
Steve Haggard, who was chairman at the fairgrounds for 14 years and served on the fair board for 16 years, is against the change.
‘I think they should have done this right after the fair instead of waiting until the last minute,’ he said. ‘I like the people who are on the fair board, but I don’t like the way this is being done.
‘I’ve always thought a lot of that place, and I have shares given to me by my father, and I bought extra shares to give to my kids,’ Haggard continued. ‘It’s a family tradition kind of thing, and I’m disappointed in what I’m hearing. I urge anyone who owns stock to be there that night.’
Another letter sent to shareholders this week attempts to clarify some things from the first letter. The more recent letter says the HCAS has received more than $100,000 in the last three years to maintain the harness-racing track, barn and grounds.
‘We have drainage problems at the north end of the track, and we need a major repair at the front entry with new drainage and culverts. These two repairs will cost approximately $15,000. If we can no longer qualify for grants, these repairs, all track maintenance, rock for the track, equipment, drainage issues, insurance and further repairs will be paid out of our pocket,’ the letter states. ‘Our shows are sponsored by businesses and individuals who support our events as a tax-deductible donation, because we are a public charity. This option will no longer be available if we lose our charity entity status … Our $32,000 monies received from the Harrison County government could be affected in the future.
‘Considering the state and age of our buildings, along with the cost of insurance and maintenance, our organization cannot continue to support its mission without outside assistance.’
‘It comes down to whether individuals in the community want to put community interest ahead (of) personal interest,’ Vidra said.