Attachment 4
Stadium Authority Budget Policy
SCSA Board Policy Manual
Proposed
March 15, 2022
Stadium Authority Board Budget Policy
The Santa Clara Stadium Authority (Stadium Authority) has a responsibility to the Santa Clara community, its financing agencies, the Forty Niners Stadium Management Company (ManCo), and other stakeholders to manage the Stadium finances wisely and with transparency and to plan for the provision of services desired by, and in the best interest of, the public.
The Proposed Operating, Debt Service, and Capital Budget fo r the Stadium Authority is developed as required in the Stadium Aut hority Management Agr eement, Section 4.6:
Annual Operating Budget. The budget provides the necessary funding to administer the duties of the Stadium Authority, including:
Funding for operating the Stadium for Non-NFL events through ManCo, Advancement of the FY 2021/22 Work Plan;
Payment of debt service obligations; and,
Maintenance of a five-year capital plan.
Through the Management Agreement, ManCo is held to a Standard of Care as outlined in Section 2.9 of the Management Agreement, which states:
2.9 Standard of Care. Subject to the limitations set forth in this Agreement, the Budget, and the Stadium Lease, the Stadium Manager shall exercise prudent, commercially reasonable good faith efforts in managing and operating the Stadium in accordance with the terms hereof so as to (a) maintain the Stadium in the Required Condition and operate the Stadium as a quality NFL and multi-purpose public sports, public assembly, exhibit and entertainment facility, to a standar d of quality comparable to other similar facilities (except that the parties recognize that portions of the Stadium may be in need of capital upgrades); (b) control Manager Operating Expenses, StadCo Operat ing Expenses and Stadium Authority Operating Expenses; and (c) maximize Operating Revenues.
This policy is designed to provide standards for financial decision-making consistent with applicable law, agreements, and debt covenants and establish parameters for directing the financial affairs of the Stadium.
This policy is meant to be dynamic and is su bject to change as the needs arise or when additional information is available. All amendments will be approved by the Stadium Authority Board (Board) at a public meeting.
A. Budget Objectives:
1. Ensure proper governance and accountabilit y as reflected in the annual budget.
2. Identify needs of the community, ManCo, and key stakeholders (such as Stadium Builder Licens e holders/season ticket hol ders, fans, and event attendees).
3. Inform and communicate clearly and t horoughly to the comm unity as a whole the Stadium Authority’s fiscal position and budget schedule/hearings to actively SCSA Board Policy Manual
Proposed
March 15, 2022
participate in the Stadium Board’s budget deliberations.
4. Align the budget wit h Stadium Authority Board priorities and duties, as proposed by the ManCo, Stadium Authority staff, and/or Board members.
5. Identify and budget the resources requir ed to perform services and accomplish policy objectives.
6. Ensure the long-term upkeep and maintenance of the Stadium.
7. Set standards to measure, monitor, and evaluate the Stadium Authority’s accomplishment of budget objectives and expenditure of appropriations:
Quarterly Financial Reports
Annual Budget Review and Adoption
Annual Financ ial Statements
8. Focus on business process redesign in order to improve productivity and quality, flexibility, and cost-effectiveness of service delivery (e.g., streamlining, simplifying, reorganizing functions, and reallocating resources).
B. Budget Policy Statements:
1. Stadium Authority Staff will submit a st ructurally balanced budget (revenues will equal or exceed expenses) for Stadium Au thority Board approval to cover annual debt requirements and operating and main tenance expenses. If a structural imbalance occurs, a plan will be devel oped and implemented to correct the imbalance.
2. Stadium Authority Ex ecutive Director will submit the annual proposed budget to the Board in compliance with the relevant provisions of the Stadium Management Agreement in late February/early March for Board review and public input and the Board will adopt t he annual budget before March 31 st of each year.
3. The Stadium Authority Budget will comply with all local, including Measure J, State, and Federal legal requirements.
4. The Stadium Authority Budget will provide for adequate maintenance and repair of capital and equipment for the Stadium:
a. An annual capital budget will be prepar ed and approved by the Board as part of the annual budget.
b. A five-year capital plan will be prepared and updated annually. The plan will prioritize all anticipated capital projects.
5. The Stadium Authority will maintain a budgetary control system to ensure adherence to the budget and will use a budge t/encumbrance control system to ensure proper budgetary control. Budgetary appropriation control for expenditures shall be at the fund level.
6. Stadium Authority st aff will prepare quarterly r eports comparing actual revenues and expenses to budgeted amounts.
7. Stadium Authority staff will bri ng forward budget amendments for Board consideration during the year in order to address unanticipated needs, emergencies, or compliance with Stadium agreements.
8. The Stadium Authority Budget will be prepared using the accrual basis.
9. The Stadium Authority Tr easurer is responsible for coordinating the overall preparation of the Stadium Authority’s budget and analyzing its content, reflective SCSA Board Policy Manual
Proposed
March 15, 2022
of expenses for operations of ManCo and Stadium Authorit y staff, debt requirements, and capital expenses.
Budget Development Process:
The Stadium Authority Treas urer is responsible for coordinating the overall preparation of the Stadium Au thority’s budget and analyzi ng its content. The goal of each budget development proc ess is that the Budget is presented to the Board and the public at one Study Se ssion and one Public Hearing before its final approval of the annual budget. The following are key steps to the budget development process:
1. In November of each y ear (or before), Stadium Aut hority staff will meet with the ManCo and develop the an nual budget development plan which includes the date that the ManCo w ill provide all necessary documents as required by the Stadium Lease and Stadi um Management Agreement.
2. No later than 45 days prior to the star t of the upcoming fiscal year, the ManCo will provide annual documents as outlined in the Stadi um Agreements, which will be used in the Budget Development Process.
Stadium Operations and Management Plan ( Source: Stadium Management Agreement)
• Annual Shared Expense Budget w/ Five Year Projection (Source: Stadium Management Agreement)
• Annual Stadium Op erations Budget ( Source: Stadium Management Agreement)
• Annual Public Safety Budget (Source: Stadium Management Agreement) • Capital Expenditure Plan with Five Year Projection ( Source: Stadium Management Agreement)
Non-NFL Event Marketing Plan ( Source: Stadium Management Agreement)
3. Stadium Authority staff will fully analyze the ManCo’s budget submission including but not limited to the number of FTEs reco mmended and related personnel costs; line item recommended expenses; and strategic fo cus of recommended resources using various tools such as historical expense analysis, incremental increases, and base budget review.
4. Stadium Authority staff will calculate the budget for Stadi um Authority General and Administrative costs (such as staff costs, consulting, audit, legal, and any reasonable and necessary expenses to uphold its support of the Board).
5. Stadium Authority st aff will calculate any necessary funding to be used for the Stadium Authority’s Discretionary Fund.
6. Stadium Authority staff will compile a draft budget incorporating the items provided by the ManCo (see step 2 on the previous page) and calculated by staff and will submit the document to the Stadium Authority Board at a Study Session or Public Hearing for review and seeking input from the public and the Board.
7. Prior to March 31st, staff will submit th e proposed Annual Stadium Authority Budget to the Board for final approval.