Attachment 6
Stadium Authority Budget
Submittal Questions and
ManagementCo Responses to
Questions
SCSA
SAtHA CLARA STADIUM AUTHORITY
Questions for the Stadium Manager
in reference to the
2022/23 SCSA Budget
Per Article 4 of the Management Agreement , RECORDS , ACCOUNTS , BUDGETS AND REPORTS , Section 4.6 states that the Stadium Manager will prepare an annual operating budget for the Stadium for each Fiscal Year (the "Stadium Operations Budget ") to meet the scope of services and objectives under this Agreement; such Stadium Operations Budget may include such other information as may be requested by StadCo and the Stadium Authority .
As a result of the City's revocation of the Executive Director 's authority to procure goods and services on behalf of the SCSA, as of November 8, 2019, the Stadium Manager must now seek approval from the Board and demonstrate that the Stadium Manager has properly and legally procured goods and services before Stadium Authority contracts may be executed.
Note: SCSA may ask additional questions once the information requested below is provided .
Facility Rent
• Stadium Manager's FY2021/22 projection of $24,762,000 is in line with SCSA's cash receipts to date. SCSA does not have any questions.
• Stadium Manager's FY2022/23 proposed budget for $24,762,000 million is in accordance with the rent reset. SCSA does not have any questions.
NFL Ticket Surcharge (10% of NFL Ticket Revenue)
NFL Ticket Surcharge
SCSA Final Budget
SCSA Actuals/Proje ction s
Stadium Man ager' s Projection
Stadium Manag er's Propo sed Budget
$
$
2020/21 2021/22 2022/23
- $ 8,665,000
- $ 9,809,000
$ 9,809 ,000
10,822,000
• Stadium Manager's FY2021/22 projection of $9,809,000 agrees with SCSA's records as all games have completed. SCSA does not have any questions. 1 SCSA
SAtlTA CLARA STADIUM AUTHORITY
Stadium Builder License (SBL) Receivables
SBL Receivables
SCSA Final Budget
SCSA Actual s/P rojections
Stadium Manager's Projection
Stadium Manager's Propos ed Budget
2020/21 2021/22
$ 24 ,213,000 $ 23 ,682,000
$ 24,934,279
$ 26 ,022 ,000
• Stadium Manager's FY2021/22 projection is $26,022,000. 2022/23
$ 24,398 ,000
1. SCSA has received approx. $15 million as of 12/31/2021 leaving approx. $11 million to be collected prior to the end of the year to meet the provided projection. Please provide the assumptions and details behind this projection.
Please see the response in the confidential document.
2. SCSA Board has granted Stadium Manager the authority to setup payment plans for SBL Receivables, and please provide status of Stadium Manager's efforts to secure payment plan compromises with SBL holders, per SCSA's communications, including email on 01/24/2022.
All payment plan agreements have been provided to SCSA staff. • Stadium Manager's FY2022/23 proposed budget of $24,398,000 is $1 ,624,000 lower than Stadium Manager's FY2021 /22 projection of $26,022,000.
3. Please provide the assumptions and details behind this proposed budget and factors led to this decrease.
Prepayments made by SBL holders impact the amortization schedule every year. The amount of SBL payments due March 1st, 2022 is less than that of March 1st, 2021 by approx. $1M.
New Sales Assumptions
o 1,000 new SBLs sold at an average price of $6,000 ($6M new sales) o 3% gross default rate
o Assumed to be financed 90% of the time at the existing 10-year / 8.5% financing terms
- This also assumes that Owners Club SBL holders will make their March 1st, 2022 payment in FY22, subject to action from SCSA staff. The SBL amendment request for these SBL holders has been pending action from SCSA staff since July 2020.
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SANTA CLARA STADIUM AUTHORITY
STR Marketplace (This is an online marketplace where SBL owners can sell their SBLs directly to 3rd parties. Based on an agreement with STR, SCSA receives a portion of these transactions with a minimum $325,000 annual fee due to SCSA).
STR Marketplace
SCSA Final Budget
SCSA Actuals/Projections
Stadium Manager's Projection
Stadium Manager's Proposed Budget
2020/21 2021/22 2022/23
$ 325,000 $ 325,000
$ 325,000
$ 325,000
405,000
• Stadium Manager's FY2021/22 projection of $325,000 is in line with SCSA's cash receipts to date. SCSA does not have any questions .
• Stadium Manager's FY2022/23 proposed budget of $405,000 is $80,000 higher than Stadium Manager's FY2021/22 projection of $325,000.
4. Please provide the assumptions and details behind this proposed budget and factors led to this increase.
Total STR Fees of $438k have been collected through December. The assumptions are that for the period of January through June, we would collect the 5-year average seen over this same period. This equates to total fees of $810k.
The SCSA would receive the guarantee of $325k + a 50% share in fees over $650k (i.e. $80k).
5. We noted that current agreement between SCSA and STR will expire in May 2022. Please confirm if the expiration of agreement with STR was considered with regards to revenue for FY2022/23.
Yes, the assumption is that the agreement will be extended on the same terms listed within the expiring contract. This extension will be submitted to the SCSA Board for approval.
Non-NFL Events (Net)
Note: Stadium Manager provided a cash-based budget (which is required for the Trust), therefore, the FY2022 budget reflects the cash payment for activity occurring between 04/01/2021 through 03/31/2022 (SCSA FY2021/22). FY2021 budget/projection and FY2022 budget are related to SCSA FY2020/21 and SCSA FY2021/22 Non-NFL Events, respectively.
6. Please provide the projected Non-NFL Event activity at the gross level (revenues and expenses) for the Stadium Authority's 2021/22 Fiscal Year (April 1, 2021 - March 31, 2022).
a. We noted that activities related to Non-NFL Events were budgeted at a loss of $1,304,000 in Stadium Manager's FY2021/22 budget 3 SCSA
SAtlTA CLARA STADIUM AUTHORITY
which is higher than expected loss of $600,000 communicated in March 2021 and included per SCSA's adopted budget. When and how did this budget get developed? This was not approved by the SCSA Board.
As mentioned in prior correspondence , the budget submitted is on a cash basis. The apples-to-apples budget of cash that is being funded for Non-NFL Events during FY21 is $1,304,000.
This includes the following :
■ FY20 $600k loss
■ FY21 $600k loss
■ FY21 $104k budget amendment for added headcount
All three of these items were approved by the SCSA Board. b. We also noted that projected loss for FY2021/22 Non-NFL Events were reduced to $1,060,000 from budgeted loss of $1,304,000.
Please note that it is Stadium Manager's duty to disclose material changes in the budget, and please provide details behind Stadium Manager's FY2021/22 budget and projected actuals.
There are no material changes in the budget. Please see above for details of the budget listed. The projected actuals include $510k loss for FY20 NNE activity+ a projected loss of $550k for FY21 NNE activity (this projection includes costs associated with Board approved added headcount).
7. Please provide the budgeted Non-NFL Event activity at the gross level (revenues and expenses) for the Stadium Authority's 2022/23 Fiscal Year (events that will occur April 1, 2022 - March 31, 2023). a. We have noted the comment explaining the anticipated net profit may range from $250k to $1.75 million. Please provide the assumptions and details (including number of events) behind this estimate.
The range assumes that we host 3.5 ticketed events at Levi's Stadium (3 concerts on the low end and 3 concerts + 1 soccer event on the high end). This also assumes approx. 10-50 special events at an average revenue of $70-$90k per event. There is still a tremendous amount of uncertainty around the continual impact of Covid on the special events business (i.e. additional variants, company policies , health and safety concerns, etc.). ·
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SANTA CLARA STADIUM AUTHORITY
Non-NFL Ticket Surcharge (Proposed budget calculated using mid-point of estimated range of Ticket Surcharge for Non-NFL Events anticipated to occur between 04/01/2022 - 03/31/2023) Non-NFL Ticket Surcharge
SCSA Final Budget
SCSA Actuals/P rojections
Stadium Manager' s Projection
Stadium Manager's Proposed Budget
$
$
2020/21
- $
$
2021/22
150,000
2022/23
574,000
• Stadium Manager's FY2021/22 projection is $0 and corresponds to SCSA's projection given no ticketed events were held at the Stadium.
• Stadium Manager's FY2022/23 proposed budget is $574,000.
8. Please provide the detailed assumptions by event category used to calculate this number. Please also include number of events. These assumptions should tie to the Marketing Plan.
As noted on the Annual Stadium Authority Budget, the NNE ticket surcharge of $574,000 is the midpoint assumption for the low and high assumptions for Non NFL Events. This assumes 3 concerts on the low end at an average of approx. 31 k tickets sold per event and 3 concerts + 1 soccer event on the high end at an average of approx. 48k tickets sold per event.
Naming Rights
• Stadium Manager's FY2021/22 projection and FY2022/23 budget are in accordance with Naming Rights Contract. SCSA does not have any questions.
Senior/Youth Fee ($0.35 per NFL ticket sold)
Senior/ Youth Fees
SCSA Final Budget
SCSA Actuals/Projections
Stadium Manager's Projection
Stadium Manager's Proposed Budget
$
$
2020/21
- $
$
2021/22
232,000
236,000
2022/23
237,000
• Stadium Manager's FY2021/22 projection is $236,000 and corresponds to SCSA's projection. SCSA does not have any questions.
• Stadium Manager's FY2022/23 proposed budget is $237,000.
9. Please confirm if this proposed budget includes the additional home game added by the NFL.
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SANTA CLARA STADIUM AUTHORITY
The assumptions do not include an additional home game. The assumptions · include an additional regular season game versus a pre-season game.
10. Please provide the assumptions and details behind this proposed budget.
The proposed budget assumes $0.35 per ticket sold for nine (9) regular season games and one (1) preseason game.
Interest Income
Interest Income
2020/21 2021/22 2022/23
SCSA Final Budget $ 896,000 $ 56,000
SCSA Actuals/Projections $ 31,645
Stadium Manager's Projection $ 9,000
Stadium Manager's Proposed Budget 15,000
• Stadium Manager's FY2021/22 projection is $9,000.
11. Please provide assumptions and details behind this projection.
This assumes an average of approx. $750 per month in interest income. • Stadium Manager's FY2022/23 proposed budget is $15,000 .
12. Please provide assumptions and details behind this proposed budget.
The assumptions for the $15,000 proposed budget includes estimated cash balances for the Capex Reserve, Operating Reserve, and Waterfall Accounts at approx. 0.2% interest rates. If there are different interest rates or cash balances you prefer, please advise.
SCSA Stadium Manager Shared Expenses
Stadium Manager Shared Expenses
Stadium Manager's Projection
Stadium Manager's Proposed Budget
2021/22
$ 6,750,000
• Stadium Manager's FY2021/22 projection is $6,750,000. 2022/23
9,027,000
13. Please provide the detailed breakout for FY2021/22 projection in the same manner as the SCSA Annual Shared Stadium Expense Budget (by department and expense type).
6 SCSA
SANTA CLARA STADIUM AUTHORITY
Please see the attached.
14. Please provide invoices for other consultants and contractors contain hourly billing information such as duties performed and rates of pay. For staffing costs, please provide salaries by position title (without names), actual hours charged to Shared Expenses, hourly rates, benefits, and related costs.
The de-identified staffing cost information requested should not implicate any confidential personnel information. SCSA looks to provide some level of detail to the Board in a timely manner to support these costs, and SCSA is open to getting on a Zoom meeting to review salary details with unique identifier associated with each budgeted position
We are happy to provide all of this info to you and your auditors as we have in prior years. These details can be viewed during the Shared Stadium Expenses year-end audit and review. This includes the names and actual pay for every single Shared Stadium employee. This has been consistent with past practice.
15. For Outside Services cost, please provide the details supporting each expense, including payments, contracts, and invoices.
There is a separate process for providing copies of contracts, invoices, etc. for prior year expenses . We will follow that process.
16. As a reminder, based on Stadium Board direction, supporting documentation is required prior to payment.
• Stadium Manager's FY 2022/23 budget submittal of $9,027,420 is higher than FY2021/22 budget submittal of $7,988,680 by $1 ,047,740. The table below shows the change of shared stadium expenses at the department level:
Stadium Manager
2021/22 to 2022/23 Change in Budget Submittal of Shared Stadium Expenses Category Security Stadium Ops Engineering Guest Grounds Total $ % $ % $ % $ % $ % $
Total Compensatio n 11,3 13 3% 486,830 24% 17 8,5 43 12% 133, 069 55% (1,871 ) -2% 807,884 Travel, M ea ls & Entertai nment 7,8 00 n/a 49,100 78% 498 25% 2,00 6 14% 1,695 419% 61 ,099 Outside Services 96,528 9% 65,30 0 8% (32,5 05) -4% (19,687 ) -75% 189,300 113% 298,936 Genera I Supp li es 6,268 36% {26,850 ) -57% 0% (17,2 09 ) -22% 2,40 0 7% (35,391) Telephone {1,2 00) -20% 24,736 11% {60 0} -7% 2,832 190% 0% 25,768 %
19%
77%
11%
-20%
10%
Equipm ent (28,732 ) -35% {99,835 ) -65% 13,106 249% 10,200 31% 4,500 250% (100,761) -36% Unifo rm s 350 5% n/a 2,75 0 22 0% 1,872 4% 0% 4,972 9% Oth er 22 ,25 0 nLa (22 ,500 ) -73% (1,97 0) -26% (11,5 47} -27% nLa (13,767) -17% Total Compensation 114,577 8% 476,781 14% 159,822 7% 101,536 21% 196,024 65% 1,048,740 13% # of FT Headcount 0% 4 20% 1 7% 1 50% 0% 6 13%
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SAtHA CLARA STADIUM AUTHORITY
17. Please provide an explanation for both the amount changes and headcount changes between department budgets that changed by more than 5%.
Please also provided job descriptions for the 6 new FTE's added for FY2022/23.
The overall increase in Shared Stadium Expenses is largely due to six (6) new full time positions being added to the budget, and field replacement cost assumptions.
The six positions included in the budget are as follows:
Coordinator , Stadium Operations & Logistics
o As events start to come back to Levi's Stadium , this position will support the operations and logistics needs associated with these events. This role is responsible for creating layouts, task lists, and timelines for logistical staff for events .
Procurement Contracts Administrator
o This position will be a key contributor in leading and supporting specific business functions of the procure to pay process in the Procurement Department. This role not only provides support and guidance for procurement and contracting activities, as well as assists with market research and supplier offerings, but also confers with suppliers and manufacturers to acquaint them with procurement policies and procedures.
- Associate Counsel
o This position will support Levi's Stadium operations and events departments in legal and compliance matters. This includes drafting, negotiating, and reviewing contracts and commercial agreements with vendors and clients.
Senior Counsel, Stadium Capital Projects
o This position will support Levi's Stadium operations units in legal and compliance matters, with a primary focus on capital projects. This includes working closely with the legal, procurement, operations , engineering , and finance teams on various construction , repair, and maintenance projects at Levi's Stadium, from concept through project closeout. This position will also coordinate with other team members involved at various points in the procurement and construction process.
Director of Engineering
o This position will provide guidance and day-to-day oversight of the Engineering team, which is primarily made up of Local 39 engineers.
Someone was dedicated to this role in years past, but it has remained vacated over the past few years in an effort to reduce costs brought on by the financial challenges of the pandemic.
Coordinator , Guest Services
8 Utilities
SCSA
SANTA CLARA STADIUM AUTHORITY
o This role will help oversee the guest services inbox, scheduling of Guest Service Representatives and be the first point of contact for any incoming requests, questions and concerns .
The proposed 2022-23 budget also includes three (3) field replacements, as a result of three scheduled or anticipated concerts , versus one (1) field replacement + one (1) partial replacement that was budgeted in 2021-22 .
18. For staffing costs, please provide salaries by position title (without names), actual hours charged to Shared Expenses, hourly rates, benefits, and related costs. SCSA is open to getting on a Zoom meeting to review salary details with unique identifier associated with each budgeted position.
As we did last year, we would be happy to meet over Zoom to discuss the details and assumptions for compensation of Shared Stadium Expense employees in the 2022-23 budget.
Utilities
SCSA Final Budget
SCSA Actuals/Projections
Stadium Manager's Projection
Stadium Manager's Proposed Budget
2020/21 2021/22 2022/23
$ 1,264,000 $ 1,586,000
$ 695,999
$ 1,310,000
1,444,000
• Stadium Manager's FY2021/22 projection of $1,310,000 is higher than SCSA's projection.
19. Please provide assumptions and details behind this projection.
The YTD Utilities expenses charged to the SCSA through December are approx . $800k. The assumptions for the remaining months of February and March are approx. $250k each month. It is important to note that this projection excludes any utilities costs associated with the Vaccination Site as those have already been removed from any utility costs charged to the SCSA.
• Stadium Manager's FY2022/23 proposed budget of $1,444,000 is higher than FY2021/22 projection of $1,310,000 by $134,000.
20. Please provide assumptions and details behind this proposed budget and the factors led to the increase.
The budget of $1,444,000 assumes a rate increase on utilities of 3% and an overall increase in usage and consumption versus Fiscal Year 2021-22. 9 t-
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SANTA CLARA STADIUM AUTHORITY
SBL Sales and Service Expenses
SBL Sales and Service Expenses
SCSA Final Budget
SCSA Actual s/Projections
Stadium Manager's Projection
Stadium Manage r's Proposed Budget
2020/21 2021/22
$ 1,967,000 $ 3,448,000
$ 913 ,471
$ 2,600,000
• Stadium Manager 's FY2021/22 projection is $2,600,000. 2022/23
3,351 ,000
21. Please provide a detailed breakout for this projection similar to Stadium Manager Expenses (Compensation, Travel, Outside Services, General Supplies, etc.).
Please see the attached .
• Stadium Manager 's FY2022/23 proposed budget of $3,351 ,000 is higher than FY2021/22 projection of $2,600,000 by $751,000.
22. Please provide a detailed breakout for this proposed budget similar to Stadium Manager Expenses (Compensation, Travel, Outside Services, General Supplies, etc.) and factors led to this increase.
Please see the attached .
23. Please provide budgeted full-time staff headcounts in FY2021/22 and FY2022/23 for SBL Sales and Service.
Please see the attached.
24. Please provide a detailed breakout for buffet related expenses.
The breakout of buffet related expenses can be viewed on the attached supporting document for the 2022-23 budget.
Use of StadCo Tenant Improvements (based on Exhibit R to the Stadium Lease the Stadium Authority is charged for the use of StadCo assets during Non-NFL events) 10 SCSA
SANTA CLARA STADIUM AUTHORITY
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Use of StadCo Tenant Improvements
2020/21 2021/22 2022/23
SCSA Final Budget $ - $ 26,000
SCSA Actuals/Projections $
Stadium Manager's Projection $ 3,000
Stadium Manager's Proposed Budget 48,000
• Stadium Manager's FY2021/22 projection of $3,000 is higher than SCSA's projection considering there was no event in FY2021/22.
25. Please provide a detailed breakout for this projection similar to Stadium Manager Expenses (Compensation, Travel, Outside Services, General Supplies, etc.).
This is incorrect. There were catered events held at the stadium during Fiscal Year 2021-22. The projected actuals of $3k are the costs that would be associated with those events per Exhibit R of the Stadium Lease Agreement. • Stadium Manager's FY2022/23 proposed budget of $48,000 is higher than FY2021/22 projection of $3,000 by $45,000.
26. Please provide assumptions and details behind this proposed budget and factors led to this increase.
This increase is due to the assumption of more ticketed and catered events in 2022-23 versus 2021-22.
Stadium Authority G&A Costs
Stadium Authority General and Administrative Costs (G&A) SCSA Final Budget
SCSA Actual s/Projections
Stadium Manager's Projection
Stadium Manager's Proposed Budget
2020/21 2021/22
$ 3,581,000 $ 5,115,000
$ 2,792,128
$ 5,115,000
2022/23
4,205,000
• Stadium Manager's FY2022/23 proposed budget of $4,205,000 agrees with SCSA's submittal. SCSA does not have any questions.
Management Co Base Fee
• Stadium Manager's FY2021/22 projection of $246,000 and FY2022/23 proposed budget of $253,000 are based on the Management Agreement of 3% increase. SCSA does not have any questions.
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SANTA CLARA STADIUM AUTHORITY
Non-NFL Ticket Fee $2 Discretionary Fund Deposit
• Stadium Manager's FY2021/22 projection and FY2022/23 budget is the full $2 per non NFL event ticket that is deposited into the discretionary fund, not the actual discretionary fund expense.
• The FY2021/22 discretionary fund deposit is projected to be $0. • The FY2022/23 discretionary fund deposit is budgeted at $287,000.
27. Once the questions noted under Non-NFL Ticket Surcharge are answered, additional questions about the discretionary fund expense may follow.
Ground Rent - Base
• Stadium Manager's FY2021/22 projection and FY2022/23 budget both agree with Ground Lease Agreement. SCSA does not have any questions .
Ground Rent - Performance
28. Once the questions noted under the Non-NFL Events (net) section are addressed, additional questions on the performance rent may follow.
SeniorNouth Fee Expense
• Stadium Manager's FY2021/22 projection of $236,000 is in line with SCSA's projection .
SCSA does not have any questions .
• Stadium Manager's FY2022/23 proposed budget is $237,000.
29. Please confirm if this proposed budget includes the additional home game added by the NFL.
As noted above, this does not assume an additional home game. This assumes an additional regular season game versus a pre-season game .
30. Please provide the assumptions and details behind this proposed budget.
Please see answer to this identical question above regarding these assumptions.
Capital Expenditures
• Please see separate document with questions related to Capital Expenditures.
Insurance Expense
• Stadium Manager's FY2021/22 projection and FY2022/23 proposed budget both calculated according to Stadium Lease Agreement.
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' 31. Please provide insurance documents for all Stadium-related policies with supporting invoices for premiums.
As discussed with your predecessor, the Stadium Authority's rates are fixed per Section 8.3.1 of the Stadium Lease Agreement that states the Stadium Authority Insurance Share shall be calculated as follows: (i) for the first lease year the Stadium Authority Insurance Share shall equal two million five hundred fifty thousand dollars ($2,550 ,000) and (ii) on the commencement of the second and each succeeding lease year, the insurance shall be increased by three percent (3%). This fixed rate for insurance was included in the Facility Rent calculation as part of Exhibit J.
Each year the SCSA receives a summary of insurance coverages and certificates of coverage.
32. These costs are not reconciled against invoices. How are potential savings of public funds being expended?
Please see answer above. The Stadium Authority 's rates are fixed per Section
8.3.1 of the Stadium Lease Agreement.
Naming Rights
• Stadium Manager's FY2022/23 proposed budget is $91,000 and agrees to the commission schedule.
33. Please indicate if the liquidated damages amount payable to the Stadium Authority and subsequent payment to Levi's has been included in the submitted budget. In addition, provide the calculation for liquidated damages.
Please refer to Section 9 (b) of the Naming Rights Agreement. These calculations are performed "at the end of every three Contract Years during the Term." Other Expenses
• Stadium Manager's FY2022/23 proposed budget of $723,000 is higher than FY2021 /22 projection of $460,000 by $263,000.
34. Please provide details including a breakdown of staff costs and lender fees and an explanation why it has increased by 57% For staffing costs, please provide salaries by position title (do not provide names), actual hours charged, hourly rates, benefits, and related costs.
This budget is broken out by the following:
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SMHA CLARA STADIUM AUTHORITY
$623k of Staff Time charged
- $100k of Bank and Admin Fees
We would be happy to meet over Zoom to discuss these details and review salary information of employees who charge to the "Other Expenses" line item. This increase is due to a full year of costs associated with the three (3) positions that were approved by the Board on August 241\ 2021 (Manager, Accounting I Staff Accountant I Sr. Financial Analyst).
35. Please note that the Stadium Authority has reserves all rights to recoup funds and other costs based on Stadium Manager 's breach of its obligations under the Management Agreement, including any payments associated with the Financial Management System Implementation.
Prior Year True Ups
36. Please note that prior year true ups are not related to FY2022/23 proposed budget, and inclusion of prior year true ups resulted in lower than expected of Net Cash Flow Available for Debt amount. Please remove amounts related prior year true ups from FY2022/23 proposed budget.
Debt Service
There are no prior year true ups included in the proposed 2022-23 budget. The prior year true ups are included in the 2021-22 projected actuals, and are associated with differences in actual expenses versus the funding of those expenses during the 2020-21 fiscal year. Additionally , these true ups do not result in a lower cash available for debt, but actually increase the cash available for debt payments by reducing the amount of funding needed to cover expenses as prior year expenses were over-funded. By including the true ups, the SCSA actually has an additional $2.5M in cash to pay debt in 2021-22 that would not be available if the true ups were not included.
• Term A Loan Interest:
o Stadium Manager's FY2020/21 projection of $12,208,000 and FY2021/22 budget of $11,507,000 is in line with SCSA calculations. SCSA does not have any questions.
• Term A Loan Principal:
o Stadium Manager's FY2021/22 projection of $14,723,000 is higher than the $14,022,000 scheduled principal payment.
o Stadium Manager's FY2022/23 proposed budget of $15,549,000 is higher than the $14,723,000 scheduled principal payment.
37. We understand from prior years that this is a timing issue. As a reminder, the SCSA's budget is on accrual basis.
• Subloan Current Interest:
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o Stadium Manager's FY2022/23 proposed budget do not match the schedule SCSA has on file.
• Subloan Scheduled Principal:
o Stadium Manager's FY2021/22 projection and FY2022/23 proposed budget do not match the schedule noted in the original agreement SCSA has on file.
38. We noted that the scheduled principal payment amount for Subordinated Loan is lower than SCSA's expectation. This item was brought up in prior years which has not been resolved. Please provide a copy of the adjusted amortization schedule for our reference.
We consider this to be resolved. Please refer to Jeff Fong's email to Kenn Lee on February 19th, 2021 in which a copy of the amortization schedule was provided.
CapEx Reserve
• Stadium Manager's 2022/23 budget is based on the annual $1,000,000 (plus 3% annual inflater) increase to the CapEx reserve described in Article 14 of the Stadium Lease for use of excess revenues for the purposes of the trust cash flow. This contribution is dependent on excess cash. We understand that Manco has pulled excess revenue to pay down the Revolving Loan; however, the Stadium Authority stands behind its position in the pending litigation that draws on the Revolving Loan, as well as any subsequent payments, are unauthorized.
Operating Reserve
• Stadium Manager's 2022/23 budget is based on the annual 3% increase to the Operating Reserve noted in Article 14 of the Stadium Lease for use of excess revenues for the purposes of the trust cash flow. This contribution is dependent on excess cash. We understand that Manco has pulled excess revenue to pay down the Revolving Loan; however, the Stadium Authority stands behind its position in the pending litigation that draws on the Revolving Loan, as well as any subsequent payments, are unauthorized. 15 2022 SCSA Budget Supporting Documentation (CONFIDENTIAL) Shared Stadium Expenses
DRAFT
FY21 Projected Actuals
Category Security Stadium Ops
Total Compensation 313,000 1,723,000
Travel, Meals & Entertainment - 15,000
Outside Services 756,000 817 ,000
General Supplies 13,000 15,500
Telephone 3,500 235,000
Equipment - 16,500
Uniforms 5,000 500
Other 2,500 500
Totals $ 1,093,000 $ 2,823,000 $
DRAFT
Engineering Guest Services Grounds Total
1,490,000 254,000 92,000 3,872,000
2,500 7,500 - 25,000
695,000 - 145,500 2,413,500
1,000 25,000 35,000 89,500
6,000 1,000 1,000 246,500
10,500 35,000 - 62,000
- 29,000 - 34,500
- 2,500 1,500 7,000
2,205,000 $ 354,000 $ 275,000 $ 6,750,000
2/18/2022
2022 SCSA Budget Supporting Documentation (CONFIDENTIAL) SBL Sales & Services
DRAFT
FV21 Projected Actuals
Category Sales
FT Wages (Including Benefits and Overhead) 446,000
Bonuses/ Commissions 436,000
Total Compensation $ 882,000
Sales, General and Administrative:
SBL Member Events
SBL Advertising & Prospecting Events
Sales Enablement
SBL Focus Groups
Sales Training
Travel, Meals & Entertainment
Other
Total Sales, General and Administrative
SBL Finance & Ticket Operations
Compensation
FY21 SBL Sales & Service Team Subtotal
+ All-Inclusive Buff ets
FY21 Projected Actuals
DRAFT
Services Totals
492,000 938,000
35,000 471,000
$ 527,000 $ 1,409,000
Totals
11,000
88,000
22,000
-
15,000
5,000
12,000
$ 153,000
Totals
$ 136,000
$ 1,698,000
$ 902,000
$ 2,600,000
2/18/2022
SCSA
SAtHA CLARA STADIUM AUTHORITY
Questions for the Stadium Manager
in reference to the
FY2022/23 CapEx Budget
Per Article 4 of the Management Agreement, RECORDS, ACCOUNTS, BUDGETS AND REPORTS, Section 4. 8 states that the Draft Capital Expenditure Plan (a) shall contain the Stadium Manager's proposed Capital Repairs to be made to the Premises during the upcoming Fiscal Year, (b) shall describe in reasonable detail anv material discrepancies between the Stadium Manager's proposed Capital Expenditures for such Fiscal Year and the five (5) vear projection of anticipated Capital Expenditures included in the previous vear's Capital Expenditure Plan, and (c) shall include any Capital Expenditures for public safety that the Stadium Manager proposes be made consistent with the then approved Public Safety Plan.
As a result of the City's revocation of the Executive Director's authority to procure goods and services on behalf of the SCSA, as of November 8, 2019, the Stadium Manager must now seek approval from the Board and demonstrate that the Stadium Manager has properly and legally procured goods and services before Stadium Authority contracts may be executed.
Note: SCSA may ask additional questions once the information requested below is provided.
Capital Expenditures
1. Please provide 5 Year Capital Improvement Details through Fiscal Year 2026/27 and description for projects included in the out years.
Please see the attached document showing the detail for the 5-Yr Capital Expenditure Plan.
2. FY2021/22 CapEx Reserve Fund Beginning Balance is listed as $19,473,945 in Capital Expenditure Plan with 5-Yr Forecast. SCSA records show balance of $19,513,719 as of 03/31/2021. Please provide support for $19,473,945.
The Beginning Balance of $19,513,719 was adjusted for the cash timing of payments for projects budgeted in prior years that came after 4/1/2021. The cash balance schedule is pulling all forecasted FY21 expenses for FY21 budgeted projects. Without adjusting this beginning cash balance for the cash timing of prior year projects, the ending cash balance would be overstated. This timing adjustment is approx. $40k.
3. Please provide assumptions and details behind amounts projected and budgeted as CapEx deposit in Capital Expenditure Plan with 5-Yr Forecast. 1 t-
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Please refer to Article 1 0 and Article 14 of the Stadium Lease Agreement.
4. For all projects, what is the SCSA time involvement required to assist with any of the requested projects? Potential time commitments from SCSA staff include, procurement assistance, prevailing wage review, Board reports, etc.
Stadium Manager expects SCSA staff to generate reports to the Board for approval of contracts associated with such projects as a result of the SCSA's modifications to the Stadium Authority Procurement Policy to remove all contracting authority from the Executive Director. Many projects will also require the City to provide typical City services (i.e. permits, fire inspections, etc.).
5. The FY2022/23 proposed CapEx budget includes a significant new project (New Seating - Bowl Padded Seat Replacement Project - Lower and Mid Level Club Seating Bowl) totaling $3.37 million that was not included in prior year submittals of the 5 year plan.
a. Please provide details as to why this significant project was not previously proposed.
This project was included in the 2021-22 5-Year Capital Expenditure Plan as a forecasted cost in 2022-23, but the project budget was increased from $750k to $3.37M. This increase is driven by the recommendation to increase the overall scope of the project to replace the entire seating product in this area versus only replacing the upholstered seat parts. The project is proposed to furnish and install a new seat product that will assist in heat mitigation by using alternate materials.
The current product is over eight years old and is showing wear and tear. The attic stock has been exhausted and there are no more spare parts to replace or reupholster damaged seats. It is important to note that Stadium Manager negotiated the replacement of approximately 55k seats in the stadium at no cost to the SCSA. This resulted in significant cost savings for the SCSA. b. Please send pictures of the area planned for this replacement project.
This project will replace approx. 9.5k seats in Sections 113-117 and 135-141 in the lower level bowl, as well as Sections 212-220 and 236-240 in the middle level bowl. 2 I SCSA
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6. For the FY2022/23 LED Retrofit Project:
a. Please confirm if this is related to "Lighting System - Fixtures replacement of major outdoor lighting/LED Retrofit/Sports Lights" project from prior year's 5-year plan at cost of $500,000.
No, this does not replace the project "Lighting System - Fixtures replacement or major outdoor lighting/LED RetrofiU/Sports Lights" project from prior year's Capital Expenditure plan.
b. Please provide reasons for moving this project ahead of schedule (Originally planned for FY2025/26)
This project is a new request.
c. Please provide support for revised amount of $200,000.
It is phase 2 of the exterior lighting replacement in Gold Lot 4 and Gold Lot 5 parking lot areas. This project replaces the existing HID lighting with new, energy efficient, LED lighting to enhance and irrJprove the exterior lighting during stadium event load in and load out. This lighting improves safety conditions for stadium personnel and provides energy cost savings with more efficient fixtures . The current HID lighting is nearing or has reached its end of life.
7. For the FY2022/23 Concrete Replacements project:
a. Please confirm if this is related to "Concrete (Sidewalk, Steps, etc.) major repairs and replacements" project from prior year's 5-year plan at cost of $100,000.
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Yes, this is related to "Concrete (Sidewalk, Steps, etc.) major repairs and replacements" project from prior year's 5-Year Capital Expenditure plan at a cost of $100k.
b. Please provide reasons for moving this project ahead of schedule (Originally planned for FY2025/26)
There is an immediate need to replace I improve concrete at the 700 Level North Plaza Stairwell. This project is being pushed ahead of schedule to address these immediate needs.
c. Please provide support for revised amount of $150,000.
The project was increased by $50k based on the size and scope necessary to address the immediate needs.
d. Prevailing wages have been under discussion due to delays in the past 2 years. Please provide details on plan to improve the tracking and reporting of prevailing wages for capital projects.
Prevailing Wage requirements are identified in all capital project bid packages and all capital project contracts . Contractors are required to comply with all DIR requirements as stipulated in the base contract, including tracking and reporting requirements.
8. For the FY2022/23 proposed CapEx plan and the projects that are being carried over from prior years, please provide a prioritization matrix identifying the needs for the projects such as health and safety, revenue generation, aesthetics/ customer experience, cost savings etc. and additional narrative and justification to further understand the need and importance of the proposed projects.
All of these projects are necessary to maintain the facility in the Required Condition. They are all priority projects and will be implemented based upon stadium availability and in coordination with the stadium event calendar.
9. Given the carryover of capital funds from FY2021/22 to FY2022/23 because funded projects could not be procured or completed, please describe Stadium Manager's plan to procure, bring the plans and request approval from the Board, and , substantially complete the projects during the next fiscal year which are proposed for funding for FY2022/23.
Stadium Manager will put projects through a fair and open solicitation and award, contract, and execution process. The completion for each of these projects will vary based upon solicitation process, permitting process, SCSA Board review, and approval process .
Stadium Manager intends to present these projects to the SCSA Board. 4 SCSA
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a. SCSA's staff count has not been increasing at the same rate as Stadium Manager. To better expedite Stadium Manager's requests, SCSA needs to anticipate when projects commence. What is the timeline for project completion for all carryover projects and new projects? The premise of the question is incorrect. Stadium Manager's headcount has decreased versus pre-pandemic levels. Stadium Manager intends to complete as much work as possible during the next 12 -14 months.
b. We noted that CapEx projects were carried over at the original project amounts. Are there impacts from a cost inflation standpoint? We have contingency in place to cover potential cost increases. If, however , there are projects that exceed the proposed budget, a budget amendment will be proposed to the Board to approve.
10. Please provide pictures for the Replacement Furniture for BNY Field Clubs, United, Levi's 501 & Yahoo clubs and Special Event Spaces project.
Proposed furniture specifications can and will be provided upon receipt of the approved budget and after the project management team can begin with solicitation and proper scope of work specifications . This will be done in stages.
11. Please provide an update to plans for both the Concession Signage and Stadium Event Signage
Project plans are currently in development. An architect is assisting in identifying and selecting the proposed signage. The detailed plans can be provided upon completion.
12. Project name of Levi's Naming Rights Signage Replacement Project has changed to Levi's Naming Rights Signage Refurbishment Project, and project cost increased from $900,000 to $1,200,000. Please provide details behind change in project name from "replacement" to "refurbishment" and an explanation for the increase in cost for this project.
a. Repair cost related to Levi's Naming Rights Signage was estimated at approx. $250,000 annually with the recent purchase order that was approved. Is proposed refurbishment project in substance a replacement project? Since this is a public project, information related to this project should be public records. Please provide commuhications with Levi's and project details related to this replacement/refurbishment project. If any of the documents are confidential, please mark them as such so that PRA requests can be redacted or withheld as appropriate.
We have conveyed multiple times that it is more cost effective and efficient to simply replace the signage. We have decided that continuing to debate this repair vs. replace issue with City Staff is unproductive. Accordingly, the current year budget has been revised to reflect a very rough conceptual estimate to 5 SCSA
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refurbish, rather than replace, the existing signs, which we expect will require that they may be removed from the building and shipped off site for refurbishment.
The estimated cost of $1 .2M is preliminary based on escalating the refurbishment estimate from the AD/S report that was provided to you last year.
That estimate will be refined as we develop a plan for the refurbishment.
Furthermore, the proposed budget does not include the cost of temporary signage which will need to be installed, since the refurbishment plan will require that the existing signs be removed for an extended period of time.
It's also important to note that the refurbishment cost is in addition to the immediate urgent repair cost of $400k, which is required because the lighting in the signs is now experiencing additional failures , which is exactly what we told you would happen last year.
13. Please add "Body Worn Cameras (BWCs) for Special Event Officers (SEO)" project to FY2022/23 proposed budget at the cost of $90,000 per year for 5 years.
Information related to this project was provided to Jeff Fong, VP of Finance, on 01/31/2022, and below is project description for your reference:
"Body worn cameras, worn by police officers, improve police accountability and lower reports of misconduct. Body worn cameras provide visual and audio evidence that can independently verify events. Body worn cameras are issued to all Special Event Officers (SEO's) working stadium events. The current agreement expires in September 2022. This estimated yearly cost, subject to change pending final negotiations, would continue the current BWC program."
This project has been added to both the Capital Expenditure budget and the Annual Public Safety Budget.
Annual Public Safety Budget
14. We noted that basis of FY2022/23 projected budget changed from using prior year actuals to using estimated deployments. Please provide details and support for allocated public safety costs between NFL and Non-NFL events. Because some of this information may be confidential, we would be open to a Zoom meeting to review. This is important as we consider potential impacts to labor costs.
We would be happy to meet via Zoom to discuss deployment estimates, but view this as confidential for the safety of officers and public safety personnel. To assist us, please provide a detailed budget estimate for public safety personnel deployments working NFL and Non-NFL Events.
15. Please remove Non-NFL Events related amortization of Public Safety Capital Expenditures from Annual Public Safety Budget as these items were purchased by SCSA through CapEx budget. Instead, please include amount to be reimbursed to SCSA for the usage during NFL Games.
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Please refer to section 2.3 ( c) of the Stadium Operations Agreement. 'The Stadium Authority and Tenant may agree, as part of the Annual Public Safety Budget and Capital Expenditure Plan for a particular Lease Year, to utilize the Stadium Capital Expenditure Reserve either to fund directly, or to reimburse the City, any or all of the Public Safety Capital Expenditures (and/or the annual amortization thereof) included in the Annual Public Safety Budget. If the Stadium Capital Expenditure Reserve is so utilized to fund, or reimburse the City for, the entire cost of any Public Safety Capital Expenditure, then, for the Lease Year in which such Public Safety Capital Expenditure is made, and for each subsequent Lease Year in accordance with the amortization schedule applicable thereto as set forth in the Annual Public Safety Budget, (i) the amount of Public Safety Costs required to be reimbursed by Tenant pursuant to Paragraph 7.5.2 of the Stadium Lease shall be reduced by Tenant's Public Safety Share of the annual amortization allocable to such Public Safety Capital Expenditure , (ii) Tenant's Public Safety Share of the annual amortization allocable to all Public Safety Capital Expenditures in a particular Lease Year shall be characterized as a Tenant Event Expense allocable to such Lease Year under the Stadium Lease, and (iii) the remaining amount of such annual amortization shall be characterized as a Non-NFL Event Expense allocable to such Lease Year under the Stadium Lease.
Any removal would be in direct contravention of the express terms of the agreement. Thus, this charge will remain as part of the budget to ensure that the budgets comply with the terms of the parties' agreements .
16. In Stadium Manager's FY2022/23 Annual Public Safety Budget, total events count for "Events with tickets sold or available for sale > 20k" (83) does not agree with annual data provided (97).
This formula error has been corrected . Please see the attached.
17. In Stadium Manager's FY2022/23 Annual Public Safety Budget, total depreciation split ($384,679) does not agree with FY2022/23 total ($741,410).
This formula error has been corrected. Please see the attached. 7 ~
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From: Mercurio, Jim
To: Christine Jung
Cc: Ruth Shikada; Kenn Lee; Sujata Reuter
Subject: RE: FY 2022/23 Non-NFL Events Marketing Budget Date: Tuesday, March 8, 2022 7:18:51 PM
Attachments: image003.png
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Hi Christine:
Please see below for the proposed Non-NFL Events Marketing Budget for both special events and ticketed events for this upcoming fiscal year:
Special Events
Total Budget of $125k
Event Expenses / Advertising = $55k
Attending Events, Conferences, Client, and Prospect Meetings = $40k Promotional Supplies/Printing/Postage/Phone = $15k
Other/Subscriptions and Software = $15k
Ticketed Events
Total Budget of $55k
Networking /Entertainment = $22.5k
Dues and Subscriptions/Registration Fees = $7.5k
Attending Conferences, Events, and Client/Prospect Meetings = $25k
Thanks,
JIM
JIM MERCURIO
Executive Vice President & General Manager
Forty Niners Stadium Management Company
T 408.562-4944
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M 650 642-4909
Levi’s® Stadium
4900 Marie P. DeBartolo Way
Santa Clara, CA 95054
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#FTTB
49ers.com
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From: Christine Jung <[email protected]>
Sent: Friday, March 4, 2022 12:23 PM
To: Mercurio, Jim <[email protected]>
Cc: Ruth Shikada <[email protected]>; Kenn Lee <[email protected]>; Sujata Reuter <[email protected]>
Subject: FY 2022/23 Non-NFL Events Marketing Budget
Hi Jim,
We noticed there wasn’t a Non-NFL events marketing budget included/called out in the proposed FY 2022/23 budget. The Stadium Manager provided a Non-NFL events marketing budget, including a breakdown of the different line items, for this fiscal year and we have been referencing it as we facilitate the Stadium Manager’s Non-NFL events marketing procurement requests to the Board. Can you please provide a similar marketing budget, which includes a breakdown of the different line items, that we can use for this upcoming fiscal year’s marketing procurement requests?
We appreciate this submittal by next Wednesday, March 9. Thank you.
Sincerely,
Christine Jung | Assistant to the Executive Director
1500 Warburton Avenue | Santa Clara, CA 95050
D: 408.615.2218 | www.santaclaraca.gov/scsa