Wednesday, 12 December 2012 13:39
In appreciation of all those who worked so hard to make Great Canadian Bike Rally a success, we feel compelled to make the follow public statement:
There have been accusations that Mike and Paul Fairfield have received unjust compensation and benefits from GCBR. This is not true. The following is a statement regarding those accusations.
The intent of the Great Canadian Bike Rally and the documents for incorporation state:
“The Purpose of the Society is to host events that produce funds to be used to support children’s charities or establish programs for the benefit of children”
The constitution and bylaws are those set out in Schedule B of the Society Act. These bylaws are very basic and simple. There have been no changes to these bylaws. These bylaws do not contain anything to do with ‘conflict of interest’ rules and therefore conflict of interest rules (mainly for governments) do not apply, as there are no bylaws stating what would constitute a conflict of interest.
The Society Act does give direction for the payment of director’s wages when winding up a society. The only other reference regarding the act states: Any wages must be for actual services provided and authorized by the Board.
The act states that a director may not be compensated for being a director but should be compensated for any expenses incurred in the performance of duties.
A society cannot give any of the profits to members.
Any wages to directors should not exceed what would be paid to a person in a similar, arms length position while dealing with the society.
The budgets for the GCBR included wages for management (Mike as CEO and Paul as VP/Controller). Although permissible, NO WAGES WERE PAID TO MIKE & PAUL FAIRFIELD
A bylaw was legally passed for borrowing, but every loan required a personal guarantee. Mike and Paul provided those guarantees. No other directors were involved.
Four loans were received by GCBR from Community Futures, all authorized by the Board.
A) A $10,000 loan for working capital, Feb. 2011.
B) A $50,000 loan for deposits to entertainers, May 2011.
Loans A & B became one loan for $60,000.
C) A $10,000 loan to cover obligations for July 2011.
In addition to this, Paul provided a credit card with a $15,000 dollar line of Credit for exclusive use of GCBR and MMG (rally related). (Maxed out & still outstanding.)
Also, Paul paid the beer invoice the first year on another credit card. (This was paid in full.)
D) A $30,000 loan to purchase beer for the 2nd rally. This loan was secured by Paul’s truck and Mike’s Harley Davidson motorbike. Also, it was agreed that CFDC could receive cash payments from the sale of beer at the Rally. Due to far fewer sales than expected, some of the payment was applied from refunds of unsold beer. A few weeks later, this loan was paid in full. On November 9th a Bailiff seized the truck and motorcycle, although the loan, which the assets were securing, was paid in full. The seizure was applied to the other loans. We question if this is legal. We are certain it is not moral.
Reasons for doing the Great Canadian Bike Rally.
There was a great need to help the local economy. Mike had worked under contract with the city to promote tourism. Because of his position and knowledge of tourism, he was very aware of the consequences of the cancellation of Mountain Music Fest and came up with the idea of the motorcycle rally. Attracting a demographic of professionals that love to ride to our beautiful western theme community (as apposed to a private event held on private land) and for the benefit of the local businesses.
City council enthusiastically approved of the concept. This took place prior to the news that a competing event would take place in Salmon Arm on the same dates. 2) Paul was involved with Circle Square Ranches and when the decision was made to sell the Armstrong ranch, he worked with the organization to find suitable land in the Merritt area. When Michael told him about the rally idea he was 100% on board.
3) The Rally was promoted as a community driven event – promoting Merritt as the Country Music Capital and a community that welcomes motorcycle enthusiasts.
4) Budgets approved by directors and presented to the City and Community Futures, included a figure for management wages and showed the amount allocated for management costs. All of the remaining profits of the society were to be divided among the charities.
The first year was a great success.
The first year, prior to making any commitment, the organizers met with the Mayor and Staff Sgt Todd. They shared their concerns regarding police costs and conduct and asked for a cost estimate for police services. Reports were shared from organizers of the Ocean Shores Motorcycle Rally in Washington as they were using a similar model. Businesses in that community said that the rally had a positive impact on their community. Ocean Shores do not hire extra police. Staff Sgt. Todd did not think there would be any police costs to the rally and he assured us that the conduct of the police would not be a concern. The first year there were no negative reports regarding the policing.
Mike and Paul made a commitment to transparency and agreed to provide interim statements and budgets as the GCBR progressed through the planning stages. They met with the city department heads, RCMP, fire department and others on a regular basis. Some numbers were suggested not only for policing but also for fire protection. A few weeks before the first rally Matt Noble, City Administrator, said that they needed to sign a personal guarantee for the estimated costs of $23,000. They were told that without this guarantee the City would withdraw all permits. They told Matt that was blackmail. They could not pull out at that late date without losing prepayment to all the artists (about $100,000) and the cancellation of the rally would be devastating. Mike and Paul signed the contract under duress.
The first year the losses were $160,000. Management took no wages. One director was paid $6000, due to taking time off work to help. A large part of the loss was due to the thunderstorm on Saturday, which caused many people to leave, and turned back many who were planning to come.
All indicators, except the financial ones, showed the first rally to be a huge success. They approached the City with a proposal and paid $5000 of the $23000 Police and Fire bill
During in- camera meetings with the City on Sept. 1 and Oct. 2011, they provided financial statements, explained why the first rally had lost money and how, by planning immediately, they were sure that a second year could be profitable. They believed they had provided everything the City needed to make a reasonable decision regarding the second year. Surveys of local businesses indicated that they had done extremely well during the rally. They then continued preparations for the 2012 event.
When they learned from the newspaper that the City had not received the required information, they prepared a whole business plan package. Having received no feedback from the City regarding police and fire costs they estimated these at $25,000 although that figure was higher than they were comfortable with. However, they could not wait any longer if a 2012 event was going to happen.
In the New Year the RCMP told them that they estimated the Police costs at $42,000, (later that figure was reduced to $38,000). They made it clear to the RCMP and to the City that such a high figure was totally out of the question. By then they were six months into the rally planning. Mayor Susan Roline said that she would be meeting with regional office RCMP regarding the costs. They did not hear back from the City regarding costs for fire & police until after the event.
The City owns a number of assets (Civic Centre, parking lots etc), which could and should be made available to help organizations whose events are filling every hotel, all the bars and the restaurants. The City provided $10,000 as a rally sponsor and received a substantial sponsorship package, then charged the rally for the use of city assets.
The 2012 Rally was on the track to success with pre-registration in the 20% range and double the number of vendors and sponsors from the previous year. The weather was a bit hot but clear with great entertainment starting and enthusiastic crowds. Then the organizers started receiving horror stories of police harassment, road blocks (often rude and harassing), tickets being issued for very minor issues, especially on custom- built bikes, and a general negative attitude. They contacted the RCMP brass and requested a reduction in police presence, as attendee numbers were not as high as expected. They learned later that people were leaving the rally in droves, checking out of hotels and warning others not to come. Within days of the rally they filed a complaint with the Attorney General, met with the City and provided many testimonies of complaints. The RCMP was invited to the meeting and denied any wrongdoing.
A few weeks later Mike and Paul met with Staff Sgt Sheila White. The meeting was a disappointment as the Staff Sgt told them that the reports, including many testimonies from the public, had not been read. She didn’t believe the complaints and the police had done nothing wrong. Mike and Paul felt she was OK with a police state attitude and she refused to take any responsibility for the damage done.
The Rally had marketed the city and the rally as a community driven event and spent over $100,000 telling people what a great place Merritt is to visit and to live.
At a motor sports event attended by Paul he asked participants, vendors and bikers to fill out a questionnaire. The major question was: “Is there anything that would stop you from coming to another GCBR?” The consistent response was: “Yes, the negative Police action.”
GCBR has made a proposal to the city for a 2013 event, with a commitment to pay any reasonable prior cost over a three-year period. They have stated that they are not willing to pay, nor should the city pay, the 2012 Police bill. The police actions and their lack of responsibility for them make it difficult to do even a small rally to pay off debt.
In early November the City asked for bank statements for both before and after the rally. GCBR provided a summary of the balance sheet and profit & loss statement as well as 5 months of statements. They asked what information the City was looking for as a number of payments to entertainers were in the form of bank drafts, which only show as withdraws. Mike and Paul offered the City and Community Futures access to bike rally and personal finances through direct access to their computer. They stressed that 90% of rally income was through by credit cards, which are paid direct to the bank. Volunteers handled all cash transactions. Mike and Paul did not handle cash other than small petty cash transactions.
There has been no response from the City. Community Futures are suing for Paul’s home.
A similar event on the east coast provided an economic impact study of their motorcycle rally. After experiencing a loss in the first 3 years, the result of their continuing efforts in their 7th year is a ten million dollar injection to their economy and close to one million dollars a year in tax revenue.
What could Merritt do with that?
If there were any chance of seeing this kind of success in this community, some serious changes would have to take place. Most importantly, the powers that be need to determine whether or not they want to welcome visitors to the community and if so, be willing to invest in it. After all, that’s what tourism and economic development is all about.