Background:
Securing Funding for California Fairs: A Collaborative Success StoryAs the Executive Officer tasked with establishing the California Fairs Financing Authority (CFFA), a critical initial objective was securing bond funding to support capital outlay projects at California Fairs. This involved navigating a unique funding source: off-track satellite wagering facilities located on California fairgrounds with many requiring constructions.
Building Trust and Presenting a Strong Case
A key aspect of securing funding was presenting the CFFA’s bond offering to Standard and Poor’s (S&P) for credit rating. While our underwriters advised against requesting a specific rating, we believed in the strength of our case. The presentation team comprised the Director of the California Division of Fairs and Expositions and me, (CFFA Executive Officer). The presentation demonstrated the stable funding source and responsible financial management plan.
A Touch of California Hospitality
In a nod to California’s agricultural heritage, we presented a case of California Fairs Gold Medal Wines labeled “California Fairs Financing Authority AA” to S&P representatives. While this gesture surprised our underwriters, it ultimately fostered a positive collaborative environment during the presentation.
Overcoming Market Challenges
The bond offering coincided with two significant market events: the Soviet Union’s political upheaval on the day of Mikhail Gorbachev’s removal from power, and the Loma Prieta earthquake. Despite these market uncertainties, the CFFA’s bonds were successfully sold.
Conclusion:
Delivering Outstanding Results
The CFFA’s innovative financing model yielded impressive results. California Fairs have benefitted from critical capital projects delivered on time and within budget. Additionally, the CFFA achieved a remarkable return on investment, returning between 5% and 10% of the total funds back to support further projects. During my tenure, more than 2,700 projects were completed on time and within budget. No projects missed a fair’s opening day.
