RESPONSE TO COUNCIL QUESTIONS RE: 3/19/24 AGENDA
Agenda Item 4.C RTC 24-60: Action on the Santa Clara Convention Center FY 2023/24 2nd Quarter Financial Status Report
Council Question:
My question is where does the Net-Income of $863K for Q2 go. To OVG to City? If to the City, what incentives does OVG have to perform better?
Staff Response:
The Net Income of $863K for Q2 from the Convention Center goes to the City. All dollars used to operate the Convention Center are City funds.
OVG has both quantitative and qualitative financial incentives built into it Management Agreement. The quantitative incentive is tied to improvement in the Net Operating Income (NOI) and qualitative incentive is based on OVG’s overall performance vs. its Key Performance Indicators (KPIs). These qualitative and quantitative incentives are designed to encouraged OVG to meet or exceed specific performance targets related to operational efficiency, customer satisfaction, and other key metrics that contribute to the success of the Convention Center.
Incentives that potentially can be earned by OVG are forecasted to hit following the end of the fiscal year, so that’s another reason why the indirect costs are higher than the first half of the year. Also Workers Comp and General Liability insurance increased in April.
Council Question:
How is the following revenue different from the chart above which shows a Q2 profit of $2.17M versus $863K?
2 Staff Response:
The $2.17M is net income from events before indirect expenses have been deducted.
Council Question:
Is partner revenue the profits that go to the partners?
Staff Response:
Based on OVG’s agreements with Encore and Smart City, OVG retains a certain percentage of the net revenue while the vendor retains the rest.
Council Question:
Do we also pay them a fixed contracted amount?
Staff Response:
No, they are not paid a contracted amount. OVG receives a certain percentage of Encore’s and Smart City’s net revenue. The City contracts directly with Levy and the City retains 92% of net revenues.
Council Question:
Where is public safety costs accounted for?
Staff Response:
If public safety officers are requested or required for events, the cost for such services are paid for client.
Information for any public safety costs are in the event agreement between OVG and the client.
Council Question:
I see City Budget for CIP is $4.2M. Where does that come from? GF?
Staff Response:
The Convention Center CIP projects were initially funded in FY 2019/20. Prior to that the City had not invested funds for a capital program for at least seven years. A total of $4.15 million was allocated to support approximately 13 projects ($1.15 million capital investment from OVG and $3.0 million capital investment from the City).
In September 2021, Council approved the transfer of $40,000 from the Convention Center CIP Fund to the General Fund to partially fund temporary staffing in City Manager’s Office reducing the Convention Center CIP budget to $4.11 M.
3 In March 2024, Council approved the transfer of $90,000 from the Convention Center Enterprise Fund to the Convention Center CIP Fund to fund a roof assessment, bringing the total of the CIP Fund back up to $4.2 M.
In addition, Levy, through its agreement with the City, has committed additional funds for capital associated with food service. It should be noted that these contributions from OVG and Levy were the result of the bid processes to secure a new Convention Center operator and food & beverage partner.
Council Question:
Why did we have net profit of $1.18M for Jul-Dec but projecting a deficit for Jan-Jun?
Staff Response:
This is primarily due to a couple of large, non-budgeted events that were booked and took place in Q2 that led to the profitability. The deficit projected for Jan-June is due to having fewer events booked, higher than anticipated costs for property insurance, and the cancellation of a very large event that was to take place in May.
Council Question:
I see Anclillary income is less and Operations and indirect expenses are up. Why?
Staff Response:
Ancillary income is lower because there are fewer events budgeted for the final two quarters. Expenses are up
4 due to more pay periods in Dec and June and due to the inflation of events costs.
Agenda Item 4.G RTC 24-1287: Action on an Agreement with Alternative Energy Systems Consulting, Inc. for a Third Party Commercial Strategic Energy Management Program for Silicon Valley Power
Council Question:
I’ve noticed that schools have programmable thermostats for the PTACs in the portables but most teachers override the programming and heating is left on over the weekend. This is the case at Wilcox High. Would this program allow for networked thermostats that can be turned off on evenings, weekends and holidays from a central computer? Of course exceptions could be made if there are pet animals in the rooms.
Staff Response:
Networked thermostats controlled by a central computer is one example of a potential project that could be identified and implemented under this program.
Council Question:
According to Project Drawdown, changing refrigerants is the most effective mechanism for reducing global heating. Would this program proactively work with grocery stores to reduce leakage in their refrigeration systems OR better yet swap out the old equipment with newer equipment with refrigerants with much lower GWP?
Staff Response:
This program is not targeted at grocery stores. This is focused on government and school facilities and the workshops will be focused on those types of businesses. We have other programs focused on replacing refrigeration equipment. If one of these sites has refrigeration equipment, it would be recommended for our standard rebate program.
Council Question:
Will this program work with managers of older multifamily housing units to install smart panels or upgrade panels so that L1 EV charging could be provided in the parking areas?
Staff Response:
This program is not targeted at multifamily housing. It only focuses on government and school facilities and does not focus on upgrading to smart panels or EV charging. We do have a technical assistance program run by CLEAResult that addresses multifamily housing. If a property owner is interested in upgrading to smart panels for the individual units, we provide a rebate for that and the technical assistance program could provide some direction.
Council Question:
Who can attend the workshops? I would like to attend.
Staff Response:
Workshops are only open to the customers who are enrolled in the program cohort and are committed to completing the program and implementing identified measures that pass their economic criteria.
Council Question:
The report mentions Green Button in section 3.3.3.2. Does this contract include money to support GBC.
Staff Response:
This contract does not include funding to support the Green Button initiative. AESC has the ability to leverage Green Button data if we make it available, but we do not offer this capability.
5 Council Question:
Can Council get the monthly and annual reports described in section 6?
Staff Response:
The monthly and annual reports on the program have customer-specific energy efficiency opportunities identified and reports on individual efforts, as well as any challenges those businesses face in implementing projects. These should not be made publicly available, as they will include customer confidential information.
Agenda Item 4.L RTC 24-33: Authorize the City Manager to Execute the 3MTM ACCR Terms and Conditions of Sale and to Issue Future Purchase Orders to 3M Company for 3M 715 Aluminum Conductor Composite Reinforced (ACCR) Conductors and Accessories
Council Question:
Is there a second source for this ACCR conductor or are we dependent only on the 3M supply chain?
Staff Response:
Staff has not been able to locate another provider outside of 3M. We have used 3M Aluminum Conductor Composite Reinforced (ACCR) exclusively since 2008. The action tonight is to allow Purchasing the ability to order 3M conductors for upcoming projects.
Council Question:
I heard at the CivicWell Policymakers conference last week that SCE uses covered conductor from Southwire that is made in the US. As far as the SCE person said, SCE didn’t need to add more poles to support the extra weight of the covered conductor. Does 3M have a covered version of this wire?
Staff Response:
Covered conductors are typically used in distribution in high fire hazard areas. The 3M ACCR allows SVP to reconductor lines with higher ampacity (higher capacity) conductors with similar weight, tension and clearances compared to existing conductors.
Council Question:
Palo Alto is upgrading their 4 KV lines to 15 KV lines to support decarbonization. Is there any impact on this wire if we upgrade from 69KV to 115KV in the future? Pole height for 69KV seems to be 50-70 feet and 115 KV is 55-80 feet.
Staff Response:
The conductor would be the same for either 60kV or 115kV. The change would be larger insulators for the 115kV, increase overhead easement requirements (wider insulators), and overall pole height requirements due to spacing between conductors.
If 60kV loops were upgraded significant, capital expenditures were be needed (for example all the distribution substation transformers would need to be replaced).
Agenda Item 4.M RTC 24-168: Authorize City Manager to Negotiate and Execute Amendment No. 4 to the Agreement with N. Harris Computer Corporation for the NorthStar CIS Utility Billing System for Silicon Valley Power
Council Question:
I noticed that the Scope of Work documents attached were from 2017 and 2019 but I didn’t really see a 2024 scope of work document (could not find Amendment #4)
6 Staff Response:
The initial scope of work is attachment number 1 “Scope of Work for Discovery (part of Amendment No. 4)”. As stated in the Council Report “The cost of the discovery scope is $10,857, however, staff is also requesting authorization for an additional $60,000 for any work identified during the discovery phase.” The final scope of work will not be determined until after the discovery phase.
Council Question:
The 2017 document referenced an upgrade to NorthStar CIS version 6.4 and I didn’t see any upgrades to newer versions of CIS in the documents. What version are we on now?
Staff Response:
Version 6.4
Council Question:
Will this provided Green Button Connect? I see the following:
Silicon Valley Power (SVP) is updating its meter data management system. Once the updates are complete, SVP will be able to export 15-minute meter data to other systems,
Staff Response:
Yes, but it will also require two additional upgrades to the Honeywell NetSense System (Data Collection) and Siemens EnergyIP (EIP) System (Data Management). These contracts will be coming to Council for consideration at a later date.