LAKEPORT, Calif. – The Lake County Fair has paid off the outstanding loan on its solar collection systems, known as photovoltaic arrays, several years ahead of schedule.
The loan, for approximately $119,171.01, was to have been paid off in 2018, but unexpected income from the use of the facility as a fire camp in 2012, combined with income from a management contract with the Dixon May Fair, has allowed for the early retirement of the debt, fair Chief Executive Officer Richard Persons reported.
The Lake County Fairgrounds has three solar collection systems, known as photovoltaic arrays, according to Persons.
One system was installed in 2001 with financing from the State Department of Food and Agriculture. The note on that system was paid off in 2011, Persons reported.
Two additional systems were installed in 2006, with financing through the California Fairs Financing Authority, doing business as the California Construction Authority, a joint powers authority whose membership is made up of 76 California fairgrounds and the State of California’s Department of Food and Agriculture. Persons said that financing ultimately came from PNC Equipment Finance LLC.
In 2011 Gov. Jerry Brown announced the elimination of all funding from the state of California for the network of California fairgrounds beginning in 2012, including the Lake County Fair, which is a state agency.
Lake County Fair officials scrambled to close a budget gap of nearly $200,000 for 2012 and maintain the day-to-day operation of the county fairgrounds, laying off 50 percent of the full-time staff, cutting a variety of expenses and raising fees to the public for most services, according to Persons.
Prior to 2012, the fair had an annual operating budget of approximately $750,000, Persons said.
Lake County Fair achieved the goal of operating without state funding for 2012 based solely on internal operations, however, two other unusual but financially beneficial things took place in the fair operation that year.
The first was that the fair entered into an agreement with the Dixon May Fair to provide the services of Persons on a limited term basis.
The second was the use of the fairgrounds by Cal Fire as a fire base camp for both the Wye Fire and the Scotts Fire.
Persons said the fair had budgeted for a cash income before depreciation of $5,057 in 2012, and instead had a cash income of $109,766.16.
Paying off the solar loan early will save Lake County Fair nearly $27,000 a year in payments for each of the next five years, of which nearly $30,000 would have been interest, Persons said.
He said the early payoff will reduce the fair's monthly cash expenses by approximately $2,216.
“Since the fair has a yearly cash flow cycle that is similar to a farm or ranch operation, which often has negative cash flow until the crop is sold, this will make a huge difference,” Persons said. “The fair is really lucky to be in the position where it can pay this off, especially in the current economy.”
Solar collection systems on the Lake County Fairgrounds have reduced the power consumption from the electrical grid by approximately 80 percent each year, Persons said.