By Valley Ag Voice Staff
On May 18th, the Kern County Fair Board convened their monthly meeting. After releasing recent news that they may be out of operating cash in June, many in the community had questions about whether Kern County was going to have a fair this year or ever again.
Lucas Espericueta, who chairs the finance committee for the Kern County Fair as a member of the board of directors, gave a lengthy and detailed presentation on the fair’s finances showing profits every year since 2013. “A profitable operation is a good operation. I can assure you the fair is profitable. Our revenues have been above our expenses. This shows the strength of our staff and our business model.”
Yet, as he pointed out the fair does not receive government funds to operate. This is a common misconception even one Espericueta held prior to being appointed to the fair’s board. Furthermore, he pointed out the precarious nature of being reliant on the annual fair for 70% of the revenue is a potential risk. The fair makes the rest of their revenue from other events and site rentals throughout the remainder of the year. With the COVID-19 pandemic, the interim events are not taking place. These events provide needed revenue to keep the operations funded throughout the year.
Permanent fair employees make up most of the monthly expenses running approximately $240,000 in costs.
The problem can be further highlighted by looking at the numbers. At the beginning of 2020, the organization had over $800,000 in cash reserves. When you compare that to the expenses from April of $270,000, it is roughly three months operating costs. Permanent fair employees make up most of the monthly expenses running approximately $240,000 in costs. Apparently, this is part of the problem as the permanent staff are state employees covered by collective bargaining agreements. Espericueta pointed out that in unique times this makes reducing staff a lengthy process.
The April financials also revealed that fair annual losses are nearly $600,000, with approximately $276,000 coming in April alone. Leaving the Fair with just over $300,000 in cash on hand to fund the future operations, with the likelihood of hosting zero events before the Great Kern County Fair in September.
So, will there be a fair this year?
While the board has not made a final determination, it is clear the event as we know it will not happen. The interim plans are to host a fair with less attractions but still have performers enabling social distancing for attendees. Questions about the future of the livestock auction have not been resolved either. This will impact many FFA and 4-H participants that look forward to the experiences they gain at the fair annually.
Many critical decisions will be made in the coming months with dark financial clouds forming. Debt for the fair has changed dramatically over the last few fiscal years. Debt in 2017 and 2018 was minimal at approximately $200,000. Yet, in 2019 the debt more than doubled and was above $400,000. This increase in debt was due to the a bill that passed the state’s legislature. The bill requires the fair to show state pension costs on their balance sheet.
According to April’s financials the fair has unpaid bills of more than $118,000. The organization’s accounts payable is nearly one third of the operating cash on hand. Espericueta reassured those watching the fair board meeting that there is enough cash to last to June: “We will make it to our next board meeting intact.”
Additionally, the board considered other items on the agenda. Most notably, a five-year contract with Speeda Sound Inc was approved for $754,000. Considering the current state of finances, one member of the board questioned the CEO, Mike Olcott, if this was necessary to approve today. Olcott’s quick response was “yes.” The agreement was approved.
