2/27/24 Item #2
Santa Clara Stadium
Authority
Study Session
Proposed Santa Clara Stadium Authority FY 2024/25
Budget, 2024 Marketing Plan, and Compliance and
Management Policies
Item #2 (24-1340)
SCSA February 27, 2024
SANTA CLARA STADIUM AUTHORITY
Agenda
1. Budget Development
2. Methodology and Limitations
3. Budget Flowchart
4. Key Summary
5. Excess Revenues Distribution
6. Stadium Authority Operating Budget
7. Stadium Authority Debt Service Budget
8. Stadium Authority Capital Budget
9. FY 2023/24 Stadium Operations and Maintenance Plan (SOMP)
10. 2024 Marketing Plan
11. Key Summary
2 12. Recommendations
POST MEETING MATERIAL
1 FY 2024/25 Budget Development
October/November 2023 Stadium Authority staff worked with ManCo to discuss the annual budget plan which included the dates that ManCo 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 Discretionary December 2023
Fund costs to ManCo 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 2024 • Annual Shared Expense Budget with Five Year Projection Annual Stadium Authority Operations Budget, Capital Expenditure Plan with Five-Year Projection Annual Public Safety Budget
2024 Marketing Plan and Public Safety Document Updates
February 2024 head a meeting wities of un frontay a Co review ared 3p24 udget e responses on February 19, Staff ecial Study Session on Fiscal Year 2024/25 Operating, Debt Service, and Capital Budget, Stadium Operatic February 27, 2024 d Maintenance Plan, Public Safety Budget and Marketing Pla March 12, 2024 Public Hearing to approve the SCSA Proposed Fiscal Year 2024/25 Operating, Debt Service, and Capital Budget March 14, 2024 SCSA Notice of approval/disapproval of the Stadium Manager's Draft Annual Stadium Authority Budget March 21, 2024 Stadium Manager required to submit Adopted Budget to the Trust (10 days prior to start of FY) 3 FY 2024/25 Budget Development (cont.)
• General Information
• Year in Review for both NFL and Non-NFL Events
• Excess Revenues Distribution
• Operating Budget
• Stadium Authority General and Administrative Budget
• Stadium Manager Shared Expenses and 5 Year Forecast
0 l Debt Service Budget
• Capital Budget
• Capital Expenditure Plan and 5 Year Forecast
• Stadium Authority Work Plan
4 2
FY 2024/25 Budget Development (cont.)
Attachments:
1. Proposed Santa Clara Stadium Authority Fiscal Year 2024/25 Operating, Debt Service, and Capital Budget
2. Annual Public Safety Budget
3. 2024 Marketing Plan
4. Stadium Authority Budget Policy
5. 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 ManCo. on January 31, 2024 and February 19, 2024.
• 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-Stadium Builder License (SBL) Buffet costs and Public Safety Costs and continues the practice of legal contingency 6 reserves from prior budgets.
3 Stadium Authority Budget Flowchart
Santa Clara
City of Santa StadCo ManCo
Stadium Authority
Clara
(SCSA)
• Owns Land Stadium Owner • Leases Stadium • Manages
Ground Leases to Leases Stadium for 49er Football Stadium for SCSA to StadCo during Company StadCo and
the NFL Season SCSA
(6 months)
Stadium Authority Budget Flowchart
(cont.)
Stadium Authority Board
Stadium Authority Counsel 2.05 FTE
City Altomey's Office
0.42 FTE
Executive Director
Executive Director's Office Treasurer
523 FIE
Human Resources
0.07 FTE
Secretary
Public Works
0.02 FTE
Assistant City Clerk's Office
0.60 FTE
Community Development
Information Technology
0.06 FTE
8 4.
Stadium Authority Budget Flowchart
(cont-)
ManCo
Security Guest Services
6 Positions (50% SCSA Funded) 3 Positions (50% SCSA Funded) Stadium Ops Groundskeeping
26 Positions (50% SCSA Funded) 3 Positions (30% SCSA Funded) Engineering SBL Sales and Service
17 Positions (50% SCSA Funded)
Service
10 Positions (150% SCSA Funded) 9 Positions (50% SCSA Funded) *Position count is provided by ManCo and does not include positions in Other Expenses 9 Stadium Authority Budget Flowchart
(cont.)
Debt Debt Service Total
Operating CapEx and Capital
Service = Budget
Budget + Budget + Budget Transfers Out
$47.3M $22.0M $65.9M
$19.7M $23.1M
10 5
Stadium Authority FY2024/25 Budget
Key Summary
• Budgeted revenues decreased by $2.6 million or - 4%
• SBL initial 10-year payment plans came to an end
• Budgeted expenses decreased by $5.6 million or -11%
• Lower principal payment due on Term A Loan
• Renovation/Demolition Reserve balance is projected to be $35.5 million • Funded by excess revenues in FYs 2022/23, 2023/24 and 2024/25 • Capital Reserve Fund balance is budgeted to have a balance of $3.4 million • Limited source of funding
• Stadium Authority will work with ManCo to prioritize projects 11 Stadium Authority FY2024/25 Budget
Key Summary (cont.)
• Net Non-NFL Events Revenue budgeted at $5.5 million
• Lower than prior two FYs
• FY 2022/23 Actual: $8.8 million
• FY 2023/24 Projection: $7.8 million
• First Amendment to the Naming Rights Agreement 2.
• Extends original terms an additional 10 years (ending February 2044) • Levi's signage ($1.2 million CapEx/$1.5 million Naming Rights revenue) • Super Bowl LX and World Cup events at Levi's Stadium in 2026 • Stadium Authority is negotiating with Bay Area Host Committee • Stadium Authority FY2024/25 budget does not include full costs for these events, staff will bring forth agreements and budget amendments for review and approval in future
12 6
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 7. Fund Renovation /
outstanding ManCo 6. Fund Operating Expense
Reserve up to $20M - Demolition Reserve if
Revolving Loan - the balance is less than
N/A Completed in FY2022/23,
Annual 3% Contribution Ongoing $70M - In progress
2. Fund Future
Stadium Authority 5. Repay any outstanding 8. Additional Expenses up to $2M disbursements can be
principal balance on used to pay Stadium
Completed in FY Subordinate Loan - Completed
2014/15 in FY 2022/23 Authority Discretionary
Expense, including the
City's general fund -
3. Fund Stadium Future Allocation
Capital Expenditure 4. Fund Operating Expense
Reserve up to $1M- Reserve up to $10M -
Completed in FY 2014/15
13 Annual contribution
Excess Revenues Distribution (cont.)
Excess Revenue Cash Reserves Summary
FY 2022/23 FY 2023/24 FY 2024/25
Reserve Category Actual Projected Budget
Capital Expenditure Reserve $22.5M $18.2M $3.4M
Operating Reserve $25.4M $26.1M $26.9M
Renovation/Demolition Reserve $5.3M $24.1M $35.5M
Total $53.2M $68.4M $65.8M
14 7
Stadium Authority Operating Budget
Key Assumptions in Proposed Operating Budget:
• General and Administrative Expenses - $4.2 million, includes 8.5 full time equivalent positions as a baseline level of support • Cost increased by $268,000 or 7%
15 Stadium Authority Operating Budget
(cont.)
Key Assumptions in Proposed Operating Budget:
Net Non-NFL Events - $5.5 million projected for FY2024/25 • Stadium Manager is projecting three (3) concerts and four (4) soccer events for FY2024/25
Net Non-NFL Events Revenue Summary
FY 2022/23 FY 2023/24 FY 2024/25
Actual Projected Budget
$8.8M $7.8M $5.5M
16 8
Stadium Authority Operating Budget
(cont.)
Key Assumptions in Proposed Operating Budget:
• Legal Contingency Reserves - $1.1 million for NFL-SBL Buffet costs and $2.3 million for Public Safety Costs
• Amounts reflect disputed liabilities, costs, or credits that are subject of ongoing litigation
Legal Contingency Reserves Summary
FY 2022/23 FY 2023/24 FY 2024/25
Reserve Category Actual Projected Budget
NFL-SBL Buffet Costs $2.1M $3.3M $4.4M
Public Safety Costs $4.2M $7.8M $10.1M
Total $6.3M $11.1M $14.5M
17 Stadium Authority Operating Budget
(cont.)
Key Assumptions in Proposed Operating Budget:
• Stadium Manager Shared Expenses - $13.6 million, includes 55 full time equivalent positions
• Costs decreased by $393,000 or 3%
• Groundskeeping outside services lower due to fewer projected field turf replacements
• Guest Services uniform costs due to updating a large portion of uniforms in FY2023/24
SBL Sales and Service (excluding NFL-SBL Buffet) - $2.4 million, includes 19 full time equivalent positions
18 9
Stadium Authority Operating Budget
(cont.)
Revenues:
Facility Rent $ 24,762,000
NFL Ticket Surcharge 13,700,000
Naming Rights 7,830,000
Non-NFL Event Net Revenue 5,500,000
SBL Proceeds 5,057,000
Interest 3,534,000
Non-NFL Event Ticket Surcharge 1,149,000
Sponsorship Revenue (STR) 519,000
Senior & Youth Program Fees 233,000
Total Revenues $62,284,000
19 Stadium Authority Operating Budget
(cont.)
Expenses:
Shared Stadium Manager Expenses $13,554,000
Stadium Authority General & Administrative 4,188,000
SBL Sales and Service 2,448,000
Utilities 1,488,000
Ground Rent 1,000,000 —
Performance Rent* Paid to
the City's
Other Expenses 748,000 General
Discretionary Fund Expense 250,000 Fund
Senior and Youth Program Fees 233,000-
Use of StadCo Tenant Improvements 151,000
Naming Rights Expenses 136,000
Total Expenses $24,196,000
20 * Pending resolution of litigation
10 Stadium Authority Operating Budget
(cont.)
General and Administrative Budget
FY 2024/25 FY 2023/24
Proposed Amended
Expense Type Budget Budget Variance
Staff Support $ 2,868,000 $ 2,820,000 $ 48,000
Legal Services 395,000 300,000 95,000
Audit Services 193,000 275,000 (82,000)
Consultants
- Community Outreach/Communications/Engagement 100,000 100,000 87,000 62,000 25,000
- Noise Monitoring
Special Projects 289,000 174,000 115,000
Administrative Services 208,000 157,000 51,000
Other Expenses 40,000 20,000 20,000
Board Stipends 8,000 12,000 (4,000)
Total $ 4,188,000 $ 3,920 000 $ 268,000
21 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
$2,464,000 $575,000 $250,000 $2,789,000
• 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.
22 11
Stadium Authority Operating Budget
(cont.)
Performance Rent Calculation
• Stadium Authority pays the City performance-based rent on top of the fixed ground rent
• Performance-based 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
23 Stadium Authority Operating Budget
(cont.)
Performance Rent Calculation (cont.)
Non-NFL Event Net Revenue (in millions)
$10.0 $8.8
$7.8
$8.0
$6.1 $5.5
56.0 $4.0
52.0 $-
$(0.5) S10.3)
s(2.0)
$(4.0) $(2.7)
March March March March March March March
2017
(Forecast) (Budget)
24 12
Stadium Authority Operating Budget
(cont.)
Performance Rent Calculation (cont.)
Fiscal Year Fiscal Year
2023/24 2024/25
Performance Rent Calculation Projection Budget
Ground Rent $ 495,000 $ 1,000,000
Net Non-NFL Event Revenue (Expense) 7,756,000 5,500,000 50% of Net Non-NFL Event Revenue (Expense) $3,878,000 $2,750,000 Performance Rent Credit from Ground Rent (50% of Ground Rent) (247,500) (500,000) Subtotal $3,630,500 $2,250,000
Public Safety Credits TBD TBD
Other Credits N/A N/A
Reserve for Litigation Contingency - Public Safety Costs (3,630,500) (2,250,000) Net 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 2) $ 448,578 $ 2,852,572 $ 1,879,350 $ 357,070 80,119 $ 5,617,689 Travel, Meals & Entertainment 22,100 156,840 27,375 78,000 2,837 287,152 Outside Services 968,000 13,650 1,934,311 2,505 181,800 3,100,266 General Supplies 25,200 12,846 375 70,137 47,700 156,258 Telephone 16,800 194,984 8,820 2,880 432 223,916
Equipment 97,740 120,899 74,271 52,270 2,700 347,880
Uniforms 14,000 8,806 37,375 900 61,081
Other 9,250 32,156 1,900 20,325 63,631
$ 1,601,668 $ 3,383,947 $ 3,935,208 $ 620,562 $ 316,488 $ 9,857,873 Subtotal
Insurance i 3,427,000
Management Fee (4) 269,000
Total $ 13,553,873
26 13
Stadium Authority Operating Budget
(cont.)
Shared Stadium Manager Expenses (cont.)
There is one (1) position that was removed from Stadium Operations and one (1) position was added to Engineering:
• Stadium Operations: As the Stadium Manager assessed its operations, the Director of Stadium & Event Operations position was eliminated. • Engineering Position: A Director for Public Works Project Management position was created to organize and direct capital projects at Levi's Stadium through all phases. This position will be responsible for communication with all project stakeholders to allow for the orderly progression of work. 27 Stadium Authority Debt Service Budget
FY 2024/25
Debt Type Budget
CFD Advance $2,754,000
Term A Loan $16,933,000
Total $19,687,000
• Debt service amount of $19.7 million includes principal payment of $8.4 million and interest payment of $11.3 million
• Total outstanding debt is projected to decrease by $8.4 million from $228.8 million to $220.4 million
28 14
Stadium Authority Debt Service Budget
(cont.)
Total Outstanding Debt (in millions)
$700
$653.4 66% reduction in
$600 $561.6 outstanding debt
from March 2014
$500 $464.7
$429.8
$396.1 $382.7
$400
$340.2 S325.3
$296.8 $280.3
$300
$245.3$228.8$220.4
$200
$100
$41.1
$-
March March March
2025
(forecast) (forecast)
29 • Construction Loan • StadCo Agency Advance Term B Loan Term A Loan StadCo CFD Advance • StadCo Subordinated Loan Stadium Authority Capital Budget
Total Capital Budget of $22.0 million
• Stadium Improvements: $20.5 million
• New Projects: $8.4 million
• Construction ($7.2 million): Lighting Systems, Waterproofing/Caulk/Joint Replacements • Equipment ($784,000): Stadium Camera Coverage Upgrade, Command Post Video Wall Upgrade
• Contingency ($400,000)
• Carryover Projects: $12.1 million
• Construction ($6.4 million): Naming Rights Signage, Aesthetic Improvements • Equipment ($5.1 million): Street Signage, Replace Furniture in Club and Special Event Spaces
• Contingency ($573,000)
Stadium Warranty-Related Construction: $1.5 million
• Part of the original Stadium Development/Construction Budget 30 15
Stadium Authority Capital Budget
(cont.))
New Capital Expenditure Projects
• Lighting Systems ($4.5
million) - installs field/sport
lights with LED retrofit and a
controls system
• Waterproofing/Caulk Joint
Replacements ($1.3 million)
- traffic deck recoating
Traffic Deck Recoating
31 Stadium Authority Capital Budget
(cont.)
Carryover Capital Expenditure Projects
• Naming Rights Signage
($2.7 million) - Replacement
of Levi's Signage under First
Amendment to the Naming
Rights Agreement
• Aesthetic Improvement
($1.2 million) - Replace
finishes
BNY Club East and West
Floor Refinishing
32 16
Stadium Authority Capital Budget
cont.)
FY2023/24 Projects
Gold Lots 4 & 5 LED
Lighting Retrofit
Bowl Padded Seat
Replacement
Stadium Operations and
Maintenance Plan (SOMP)
The Management Agreement requires the Stadium Manager to prepare a SOMP designed to achieve a safe and well-maintained Stadium.
Staff is reviewing this confidential document and will share the City and Stadium Authority's comments directly with the Stadium Manager.
The SOMP is approved administratively.
34 17
2024 Marketing Plan
• The Stadium Manager submitted the 2024 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. Three key focus areas.
• Leverage Niner's strong season performance to build Levi's stadium and Santa Clara reputation to attract non-NFL public and private events. • Develop integrated marketing plan with Discover Santa Clara to increase sales and improve organizational efficiency.
• Establish KPIs and performance metrics specific to each marketing initiative
35 Stadium Authority FY2024/25 Budget
Key Summary
• Budgeted revenues decreased by $2.6 million or -4%
• Budgeted expenses decreased by $5.6 million or - 11%
Renovation/Demolition Reserve balance is projected to be $35.5 million Capital Reserve Fund balance is budgeted to have a balance of $3.4 million Net Non-NFL Events Revenue budgeted at $5.5 million
First Amendment to the Naming Rights Agreement
Super Bowl LX and World Cup events at Levi's Stadium in 2026 36 18
Recommendations
1. Review and Provide Input on the Proposed Santa Clara Stadium Authority Fiscal Year 2024/25 Operating, Debt Service, and Capital Budget, Draft 2024 Levi's Stadium Events Marketing Plan, and Proposed Stadium Authority Budget, Compliance and Management Policies
37 Santa Clara Stadium
Authority
Study Session
Proposed Santa Clara Stadium Authority FY 2024/25
Budget, 2024 Marketing Plan, and Compliance and
Management Policies
Item #2 (24-1340)
SCSA February 27, 2024
SANTA CLARA STADIUM AUTHORITY
19