1/23 Item #10
Santa Clara Stadium
Authority
Proposed Santa Clara Stadium Authority FY 2023/24
Budget, Stadium Operation and Maintenance Plan,
and 2023 Marketing Plan
Item #10 (23-1479)
March 7, 2023
SCSA
SANTA CLARA STADIUM AUTHORITY
Agenda
1. Budget Development
2. I Methodology and Limitations
3. Budget Flowchart
4. Excess Revenues Distribution
5. Stadium Authority Operating Budget
6. Stadium Authority Debt Service Budget
7. Stadium Authority Capital Budget
8. FY 2023/24 Stadium Operations and Maintenance Plan (SOMP)
9. 2023 Marketing Plan
10. Alternatives
11. Recommendations
2 POST MEETING MATERIAL
1 FY 2023/24 Budget Development
Stadium Authority staff worked with ManagementCo to discuss the annual budget plan which included the October 2022
dates that ManagementCo would provide all necessary documents as required by the Stadium Agreements.
Stadium Authority staff provided the Stadium Authority G&A, Public Safety Capital Expenses, and December 2022
Discretionary Fund costs to ManagementCo for review and incorporation into the annual budget.
At least 45 days prior to the start of the fiscal year (January 31) ManCo provided the required documents per the Stadium Agreements:
Stadium Operations and Maintenance Plan
January 2023 • Annual Shared Expense Budget with Five Year Projection • Annual Stadium Authority Operations Budget, Capital Expenditure Plan with Five-Year Projection Annual Public Safety Budget
• 2023 Marketing Plan and Public Safety Document Updates taff submitted a series of questions to ManagementCo on February 6, 2023, and received responses o February 2023 ebruary 14. Staff and the ManCo met via Zoom to review Shared Expenses budget detail on February 15 Public Hearing to approve the SCSA Proposed Fiscal Year 2023/24 Operating, Debt Service, and Capital March 7, 2023 Budget
March 17, 2023 SCSA Notice of approval/disapproval of the Stadium Manager's Draft Annual Stadium Authority Budget March 21, 2023 Stadium Manager required to submit Adopted Budget to the Trust (10 days prior to start of FY) 3 FY 2023/24 Budget Development (cont.)
• General Information
• Year in Review for both NFL and Non-NFL Events
• Excess Revenues Distribution (New Section)
• Operating Budget
• Stadium Authority General and Administrative Budget
• Stadium Manager Shared Expenses and 5 Year Forecast
• Debt Service Budget
• Capital Budget
• Capital Expenditure Plan and 5 Year Forecast
• Stadium Authority Work Plan
4 2
FY 2023/24 Budget Development (cont.)
Attachments:
1. Proposed Santa Clara Stadium Authority Fiscal Year 2023/24 Operating, Debt Service, and Capital Budget - Original Posted Version
2. Proposed Santa Clara Stadium Authority Fiscal Year 2023/24 Operating, Debt Service, and Capital Budget - Revised Version
3. Annual Public Safety Budget
4. 2023 Marketing Plan
5. Stadium Authority Budget Policy
6. Stadium Authority Compliance and Management Policy
5 Methodology and Limitations
• The Budget is on an accrual basis, which records revenues and expenses when they are incurred, regardless of when cash is exchanged.
• The Budget report was based in part on documentation and responses submitted by ManagementCo. on January 31, 2023 and February 14, 2023.
• The Capital Budget included proposals from both the Stadium Authority and Stadium Manager.
• The Budget is presented in the context of ongoing litigation with StadCo for NFL-SBL Buffet costs and Public Safety Costs and continues the practice of legal contingency from prior budgets. 6 3
Stadium Authority Budget Flowchart
Santa Clara
City of Santa StadCo
Stadium Authority
Clara
(SCSA)
• Owns Land Stadium Owner Leases Stadium
• Ground Leases to Leases Stadium to 49er Football
the Santa Clara to StadCo during Company
Stadium Authority the NFL Season
(6 months)
ManCo receives funding for
managing the Stadium
7 Stadium Authority Budget Flowchart
(cont.)
Stadium Stadium Stadium Transfers Total
Authority Authority Authority Out for Stadium
Operating Debt Service CapEx Capital and Authority
Budget Budget Budget Debt Service Budget
$62.4M $27.8M $20.5M ($29.4M) $81.3M
8 4
Excess Revenues Distribution
Excess Revenues Distribution: If revenues exceeds expenses in a lease year the Excess Revenues are required to be distributed in the order as set forth in Article 14 of the Stadium Lease agreement as shown below.
1. Payoff any 6. Fund Operating Expense 7. Fund Renovation / outstanding ManCo Reserve up to $20M- Demolition Reserve if Revolving Loan - N/A Estimated to be completed by the balance is less end of FY 2022/23 than $70M - In
progress
2. Fund Future Stadium 5. Repay any outstanding
Authority Expenses up principal balance on 8. Additional to $2M - Completed in FY Subordinate Loan - To be disbursements can be 2014/15 completed by the end of FY used to pay Stadium
2022/23 Authority
Discretionary
Expense, including
3. Fund Stadium 4. Fund Operating the City's general fund Capital Expenditure Expense Reserve up to - Future Allocation Reserve up to $1M- $10M - Completed in
9 Completed in FY 2014/15 FY 2014/15
Excess Revenues Distribution (cont.)
Excess Revenue Reserves
Summary
Reserve Category FY 2023/24 Budget
Capital Expenditure Reserve $5.1M
Operating Reserve $20.6M
Renovation/Demolition Reserve $12.7M
Total $38.5M
• The Stadium Authority anticipates to pay off the StadCo Subloan ($19.8 million) at the end of FY 2022/23 and begin to fund the Renovation/Demolition Reserve starting in FY 2023/24.
10 5
Stadium Authority Operating Budget
Key Assumptions in Proposed Operating Budget:
• General and Administrative Expenses - $3.6 million, includes 7.8 full time equivalent positions as a baseline level of support • Cost decreased by $633 thousand or 15% based on projected legal expenses
• Net Non-NFL Events - profit of $4.5 million projected for FY2023/24 • Five (5) concerts and two (2) soccer events scheduled for FY2023/24 • Legal Contingencies - $3.1 million for NFL-SBL Buffet costs ($1.1 million) and Public Safety Costs ($2.0 million)
• Amounts reflect disputed liabilities, costs or credits that are subject of ongoing litigation
11 Stadium Authority Operating Budget
(cont.)
Key Assumptions in Proposed Operating Budget:
• Stadium Manager Shared Expenses - $13.8 million, includes 55 full time equivalent positions
• Costs increased by $1.3 million or 10% due to increased in Engineering and Groundskeeping outside service costs, Guest Services uniform costs, and additional full-time positions requested • The Stadium Manager proposes three (3) additional full-time positions to support its operational needs
• SBL Sales and Service (excluding NFL-SBL Buffet) - $2.3 million, includes 20 full time equivalent positions
12 6
Stadium Authority Operating Budget
(cont.)
Revenues:
NFL Ticket Surcharge $ 12,178,000
SBL Proceeds 12,589,000
Interest 1,249,000
Non-NFL Event Net Revenue 4,500,000
Naming Rights 1,002,000
Sponsorship Revenue (STR) 475,000
Rent 24,762,000
Senior & Youth Program Fees 234,000
Non-NFL Event Ticket Surcharge 1,296,000
Total Revenues $64,885,000
13 Stadium Authority Operating Budget
(cont.)
Expenses:
Shared Stadium Manager Expenses $13,784,000
Legal Contingency 3,079,500
2,333,000 Paid to
SBL Sales and Service
Senior and Youth Program Fees 234,000 € the
Ground Rent 495,000 ≤ City's
Performance Rent General
250,000 Fund
Discretionary Fund Expense
Utilities 1,391,000
Use of StadCo Tenant Improvements 108,000
Stadium Authority General & Administrative 3,572,000
Naming Rights Commission 94,000
Other Expenses 734,000
Contribution to Operating Reserve 36,313,000
14 Total Expenses $62,387,500
7 Stadium Authority Operating Budget
(cont.)
Stadium Authority FY2023/24 G&A Proposed Budget
Expense Type Budget Comments
Staff support 2,472,000 To support the Stadium Authority with its oversight duties of stadium activities
Legal Services 300,000 As needed for outside legal services Audit Services 275,000 Financial and performance audits performed by external auditors including KPMG, J.S. Held, and the Pun Group
Consultants
- Community Outreach/ 100,000 Community engagement efforts and/or Board initiatives Communications/Engagement consistent with the work plan - Noise Monitoring 62,000 Continued noise monitoring of Levis Stadium Executive Director & Board Directives 174,000 Funding for unanticipated Board directives, Executive Director assignments, etc
Administrative Services 157,000 Laserfiche Repository and Financial Management System Other Expenses 20,000 Routine office expenses
Board Stipends 12,000 Stadium Authority meetings
Total $ 3,572,000
15 Stadium Authority Operating Budget
(cont.)
Discretionary Fund
50% of FY
2023/24 Non-NFL FY 2023/24 Projected
Projected Event Ticket Discretionary Ending
Beginning Balance Surcharge Fund Expense Balance
$1,669,850 $648,000 $250,000 $2,067,850
• The Discretionary Fund has been used to cover NFL public safety costs above the public safety cost threshold, public safety capital expenses, and other items at the Stadium Authority's discretion.
16 8
Stadium Authority Operating Budget
(cont.)
Performance Rent Calculation
• Stadium Authority pays the City performance-base rent on top of the fixed ground rent
• Performance-base rent is equal to 50% of the net income from Non-NFL events less 50% of the ground rent and any credited public safety costs
• Credited public safety costs is the amount by which public safety costs exceed the public safety costs threshold
17 Stadium Authority Operating Budget
(cont.)
Performance Rent Calculation (cont.)
Net Income from Non-NFL Events (in
millions)
$7.3
$8.0 $6.1
$5.2 $5.3 $5.2 $4.5
$6.0
$4.0
$2.0 $0.0 $(0.5) $(0.3)
$-
$(2.0)
$(4.0) $(2.7)
March 2015 March 2016 March 2017 March 2018 March 2019 March 2020 March 2021 March 2022 March 2023 (Forecast) March 2024 (Forecast) 18 9
Stadium Authority Operating Budget
(cont.)
Performance Rent Calculation (cont.)
Fiscal Year Fiscal Year
2022/23 2023/24
Performance Rent Calculation Projection Budget
Ground Rent $ 460,000 $ 495,000
Net Non-NFL Event Revenue (Expense) 7,262,000 4,500,000 50% of Net Non-NFL Event Revenue (Expense) $3,631,000 $2,250,000 Performance Rent Credit from Ground Rent (50% of Ground Rent) (230,000) (247,500) Net Performance Rent after Ground Rent Credit $3,401,000 $2,002,500 Reserve for Litigation Contingency - Public Safety Costs (3,401,000) (2,002,500) Final Performance Rent paid to the City of Santa Clara
Per Stadium Lease Paragraph 7.5.3(a), credited public safety costs is the amount by which public safety costs exceed the public safety costs threshold.
Stadium Authority Operating Budget
(cont.)
Shared Stadium Manager Expenses
Stadium
Security Operations Engineering Guest Services Groundskeeping Total Total Compensation $ 385,519 $ 2,958,779 1,726,317 $ 332,431 $ 83,145 $ 5,486,191 Travel, Meals & Entertainment 8,527 227,275 2,810 8,470 2,415 249,497 Outside Senices 999,190 928,996 896,117 1,100 514,190 3,339,593 General Supplies 80,925 86,675 330 68,753 46,578 283,261 Telephone 9,750 240,750 8,400 3,600 432 262,932
Equipment 77,260 98,300 49,796 41,502 2,700 269,558
Uniforms 3,300 8,806 132,664 900 145,670
Other 8,450 1,500 56,666 66,616
Subtotal $ 1,564,471 $ 4,549,225 2,694,076 645,186 $ 650,360 $ 10, 103,318 Insurance 3,327,000
Management Fee 354,000
Total $ 13784,318
20 10
Stadium Authority Operating Budget
(cont.)
Shared Stadium Manager Expenses (cont.)
There are net three (3) additional full-time positions added to support Stadium Operations:
• Director, Parking and Traffic Operations: Provides leadership, direction, and oversight of venue parking and transportation operations for Levis Stadium. This position will develop and enhance the traffic safety and security associated with parking and traffic surrounding Levi's Stadium.
Senior Manager, Parking and Traffic Operations: Assist in the oversight of the venue parking and transportation operations for Levi's Stadium. This position will manage and control the inventory of uniforms, radios and other parking equipment used for parking and transportation operations. 21 Stadium Authority Operating Budget
(cont-)
Shared Stadium Manager Expenses (cont.)
• Coordinator, Parking and Traffic Operations: Manage the onboarding of new employees and handle the staff scheduling requirements for event day, including pre and post work teams.
• Vice President, Hospitality: Provides leadership and direction to maintain and improve the guest experience for all events at Levi's Stadium. This position will also build strong partnerships with out onsite partners, such as Levy, to develop a shared hospitality vision for the venue. • Coordinator, Stadium Operations: This position was eliminated from the Budget.
22 11
Stadium Authority Operating Budget
(cont.)
Shared Stadium Manager Expenses (cont.)
There is one additional full-time position added to support SBL Sales & Services. • Membership Service Consultant: To assist as the first point of contact for SBL members on a daily basis, respond to phone calls and emails in a timely manner, and collect outstanding SBL payments.
23 Stadium Authority Operating Budget
(cont.)
Proposed Budget Differences from ManCo Submittal
• Accounting differences (Cash vs. Accrual) are noted and adjusted for in the SCSA Proposed Budget.
• NFL - SBL Buffet Costs is the subject of ongoing litigation. SCSA placing in legal contingency.
• Performance Based Rent / Public Safety Costs is the subject of ongoing litigation. SCSA placing in legal contingency.
24 12
Stadium Authority Debt Service Budget
Debt Type Budget
CFD Advance $2,379,000
Term A Loan $25,457,000
StadCo Subloan $0
Total $27,836,000
• Debt service amount of $27.8 million includes principal payment of $16.1 million and interest payment of $11.7 million
• Total outstanding debt is projected to decrease by $16.1 million from $245.2 million to $229.1 million
25 Stadium Authority Debt Service Budget
(cont.)
Total Outstanding Debt (in millions)
$700
$653.4
65% reduction in
$600
$561.6 outstanding debt
from March 2014
$500 $464.7
$429.8
$396.1
$400 $382.7
$340.2 $325.3
$296.8
$300 $280.3
$245.2 $229.1
$200
$100
$41.1
$-
March March March March March March
26. (forecast) (forecast)
13 Stadium Authority Capital Budget
Total Capital Budget of $20.5 million
• Stadium Improvements - $19.0 million
• New Projects ($3.3 million)
• Construction ($1.6 million): new padded seating replacement and aesthetic improvements in premium areas/special event spaces
• Equipment ($1.5 million): public safety and security
• Contingency ($156 thousand)
• Carryover Projects ($15.7 million)
• Construction ($9.3 million): Stadium wayfinding signage, women's locker room • Equipment ($5.7 million): public safety, cooling tower repairs • Contingency ($747 thousand)
• Stadium Warranty-Related Construction - $1.5 million
• Part of the original Stadium Development/Construction Budget 27 Stadium Authority Capital Budget
(cont.)
New Capital Expenditure Projects
• Field Turf Equipment ($420,000) - installs
field turf ventilation and vacuum system to
improve the turf system
• Lighting Systems ($446,250) - installs
field/sport lights with LED retrofit and a
controls system
• Security General Allowance ($367,500) -
equipment purchases for security
enhancements throughout the Stadium
28 14
Stadium Authority Capital Budget (cont.)
Santa Clara Stadium Authority
Capital Expense Plan Summary - 5 Year Forecast
2023/24 2024/25 2025/26 2026/27 2027/28
Budget Budget Budget Budget Budget
Electrical $ 1,350,138 $ 2,950,000 225,000 300,000 $ 500,000 General Building 8,795,329 5,250,000 1,120,000 850,000 800,714 Plumbing 249,734 100,000 600,000 35,000 70,000
Security 500,000
500,979 275,000
Site
10,896,180 8,300,000 1,945,000 1,685,000 1,645,714
Subtotal CapEx Construction Costs
Audio/Visual $ 628,708 $ 870,000 $
1,501,429 61,669 60,000
FF&E
Food & Beverage 584,318 1,200,000 1,000,000
680,961 75,000 200,000 175,000 650,000
HVAC/Mechanical
Life Safety/Fire 39,770 225,000 150,000
Security 1,501,535 300,000 500,000 100,000
Public Safety Equipment 2,208,031 252,500 115,000 22,500 7,000 20,000 400,000 250,000
Vertical Support
Subtotal CapEx Equipment Costs 7,164,752 $ 627,500 $ 1,746,669 $ 2,022,500 $ 2,217,000 903,052 446,375 184,583 185,375 193,136
Contingency (5%)
Total CapEx Project Costs" $ 18,963,984 9,373,875 3,876,252 $ 3,892,875 $ 4,055,850 (* Total CapEx Project Costs in table above do not include budget requested for Stadium Warranty Related Construction. 29 Stadium Operations and
Maintenance Plan (SOMP)
• Required by the Stadium Lease and Management Agreement. • Contains a plan for the operation and maintenance of Levis Stadium which includes confidential information on the stadium building. • Staff is reviewing this confidential document and will share the City and Stadium Authority's comments with the Stadium Manager directly. • SOMP document is approved administratively.
30 15
2023 Marketing Plan
• The Stadium Manager submitted the 2023 Marketing Plan as part of annual Budget process.
• Staff plans to work with the Stadium Manager in the upcoming year to continue to refine and implement the Marketing Plan.
• It is recommended that the Board note and file the 2023 Marketing Plan submitted by the Stadium Manager.
31 Alternatives
1. Adopt the Santa Clara Stadium Authority Fiscal Year 2023/24 Operating, Debt Service, and Capital Budget;
2. Note and file the 2023 Marketing Plan; or
3. Take any other Action the Board deems appropriate.
32 16
Recommendations
1. Adopt the Santa Clara Stadium Authority Fiscal Year 2023/24 Operating, Debt Service, and Capital Budget;
2. Note and file the 2023 Marketing Plan.
33 Santa Clara Stadium
Authority
Proposed Santa Clara Stadium Authority FY 2023/24
Budget, Stadium Operation and Maintenance Plan,
and 2023 Marketing Plan
Item #10 (23-1479)
March 7, 2023
SCSA
SANTA CLARA STADIUM AUTHORITY
17