3/12/24 Item #2
Santa Clara Stadium
Authority
Public Hearing
Action on the Proposed Santa Clara Stadium Authority FY 2024/25 Budget, 2024 Marketing Plan, and Compliance
and Management Policies
Item #2 (24-1342)
SCSA March 12, 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
Staff submitted a series of questions to ManCo on February 9, 2024, and received responses on February 19. Staf February 2024 eld a meeting with ManCo on February 27 to review Shared Expenses budget detail Special Study Session on Fiscal Year 2024/25 Operating, Debt Service, and Capital Budget, Stadium Operation February 27, 2024 and Maintenance Plan, Public Safety Budget and Marketing Plan 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
• Debt Service Budget
• Capital Budget
• Capital Expenditure Plan and 5 Year Forecast
• Stadium Authority Work Plan
4 2
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 5 reserves from prior budgets.
Stadium Authority Budget Flowchart
Debt Debt Service
Operating CapEx Total
Service and Capital
Budget + + Budget = Budget
Budget Transfers Out $65.9M
$47.3M $19.7M $22.0M
$23.1M
3 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 7 Stadium Authority FY2024/25 Budget
Updates after Study Session
• Net Non-NFL Events Revenue
• Increased $500,000 from $5.5 million to $6.0 million
ManCo increased their estimate
Legal Contingency Reserve - Public Safety Costs ending balance increased $250,000 from $10. 1 million to $10.3 million Based on the performance rent calculation
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 Demolition Reserve if
Revolving Loan - Reserve up to $20M -
Completed in FY2022/23, the balance is less than
N/A
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 -
Annual contribution Completed in FY 2014/15
9 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
10 5
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%
11 Stadium Authority Operating Budget
(cont.)
Key Assumptions in Proposed Operating Budget:
• Net Non-NFL Events - $6.0 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 $6.0M
12 6
Stadium Authority Operating Budget
(cont.)
Key Assumptions in Proposed Operating Budget:
• Legal Contingency Reserves - $1.1 million for NFL-SBL Buffet costs and $2.5 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 $10.3M
Total $6.3M $11.1M $14.7M
13 Stadium Authority Operating Budget
(cont.)
Key Assumptions in Proposed Operating Budget:
Stadium Manager Shared Expenses - $13.6 million, 55 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 positions
14 7
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 6,000,000
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 $62,784,000
15 Stadium Authority Operating Budget
(cont-)
Expenses:
Shared Stadium Manager Expenses $13,554,000
Stadium Authority General & Administrative
SBL Sales and Service
Utilities 1,488,000
Ground Rent 1,000,000 m
Paid to
Performance Rent *
the City's
Other Expenses 748,000 General
Discretionary Fund Expense 250,000
Fund
Senior and Youth Program Fees
Use of StadCo Tenant Improvements 151,000
Naming Rights Expenses 136,000
Subtoal Expenses $24,196,000
Transfers Out:
Debt Service $17,471,000
Capital Expenditures Reserve 4,032,000
Capital Expenditures Reserve - Levi's Naming Rights 1,575,000 Subtotal Transfers Out $23,078,000
Total Use of Funds $47,274,000
16 • Pending resolution of litigation
8 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.
17 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
18 9
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 $6.0
$6.0 $5.2 $5.3 $5.2
:I11.
$(0.5) $(0.3)
$(2.0)
$(4.0) $(2.7)
March March March March March March March March March March March 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
19 (Forecast) (Budget)
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 52000.000 50% of Net Non-NFL Event Revenue (Expense) $3,878,000
Performance Rent Credit from Ground Rent (50% of Ground Rent) (247,500) (500,000) Subtotal $3,630,500 $2,500,000
Public Safety Credits TBD TBD
Other Credits N/A
Reserve for Litigation Contingency - Public Safety Costs (3,630,500) Net Performance Rent paid to the City of Santa Clara (2,500,000) $
20 10
Stadium Authority Operating Budget
(cont.)
Shared Stadium Manager Expenses
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. 21 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
22 11
Stadium Authority Debt Service Budget
(cont.)
Total Outstanding Debt (in millions)
$700
$653.4 66% reduction in
$600 outstanding debt
$561.6
from March 2014
$500 $464.7
$429.8
$396.1 $382.7
$400
$340.2
$325.3
$296.8 $280.3
$300
$245.3
$228.8($220.4
$200
$100
$41.1
s-
March March March March March March March March March March March March March 2016 2015 2017 2018 2019 2020 2025
(forecast) (budget)
• Construction Loan StadCo Agency Advance • Term B Loan a Term A Loan • StadCo CFD Advance = StadCo Subordinated Loan 23 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 • Contingency ($573,000)
Stadium Warranty-Related Construction: $1.5 million
• Part of the original Stadium Development/Construction Budget 24 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
25 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
26 13
Stadium Authority Capital Budget
(cont.)
FY2023/24 Projects
Gold Lots 4 & 5 LED
Lighting Retrofit
Bowl Padded Seat
Replacement
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
28 14
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 29 Recommendations
1. Adopt the Santa Clara Stadium Authority Fiscal Year 2024/25 Operating, Debt Service, and Capital Budget;
2. Approve the 2024 Levi's Stadium Events Marketing Plan;
3. Adopt the Stadium Authority Board Budget Policy;
4. Adopt the Stadium Authority Board Compliance and Management Policy.
30 15
Santa Clara Stadium
Authority
Public Hearing
Action on the Proposed Santa Clara Stadium Authority FY 2024/25 Budget, 2024 Marketing Plan, and Compliance
and Management Policies
Item #2 (24-1342)
SCSA March 12, 2024
SANTA CLARA STADIUM AUTHORITY
16