Agenda packet — City Council and Authorities Concurrent, May 28, 2024 (part 4 of 5)

Issued March 2009 Page 1 of 3
ADMINISTRATIVE CODE CMD NUMBER 42

CITY MANAGER’S DIRECTIVE-PROCEDURE DATE: March 2, 2009

CANCELS: None

SUBJECT :

EMAIL RETENTION POLICY

POLICY :

Electronic telecommunications systems (ema il, voice mail, fax systems, PDA’s, the Internet, etc.) are tools to send or receive communications. City email is a business tool that should only be used to provide an efficient and effective means of intra-agency and inter-agency communications on City business.

Email is subject to the same laws, po licies and practices that apply to other means of communication, including th e California Public Records Act and discovery statutes. Therefore, em ployees must determine when these communications constitute records which should be retained and how to retain them.

City email and City email systems are for communication and not for the permanent storage of records. As such, City emails are generally deemed to be preliminary drafts, notes or interagency or intra-agency memoranda that are not retained by the City in its ordinary c ourse of business and are therefore not public records. However, email that is a public record should be retained and accessible for the appropriate time period before destruction. Email which is public record is open to inspection by the public upon request, unless exempt from disclosure. See the list of Definitions at the end of this CMD for additional clarification.

RESPONSIBILITY :

ACTION

Human Resources Department,
IT Department, and Supervisors
in all Departments

1. When an employee separates from City service (through retirement, resignation or termination), the HR Department will notify IT, and the email account for the departing employee will be set up as a “proxy” account to the separating employee’s direct Supervisor. The Supervisor is responsible for ensuring all public records are properly managed, including, but not limited to, migrating appropriate records to a successor employee.

All personnel

2. All Email Users must manage their own email boxes following the below policies and procedures. The User ’s Supervisor, Division Manager and Department Head are responsible for en suring that their employees are in compliance with this policy.

CMD NUMBER 42

Issued March 2009 Page 2 of 3

3. Email Inboxes and Sent Items folders (i ncluding their subfolders) shall be emptied on a regular basis, after reco rds have been appropriately saved, as outlined below.

4. Email messages which contain any info rmation relating to the conduct of the public’s business that are prepared, owned, used or retained by the City may be deemed to be public records under the California Public Records Act.

The email system is not to be used for long term storage.

5. Emails contained within a User’s I nbox and Sent Items folders (including their subfolders) that are more than ninety (90) days old are considered duplicate copies or preliminary drafts and will be automatically deleted.

6. Users may place emails into User-created folders to organize email. Items in these folders may be public record and are discoverable through legal means.

7. Emails that are retained shall be main tained in accordance with the City’s document retention manual and the User ’s Department Records Retention Schedule.

8. Unless set by the User to empty the Deleted Items (trash) folder upon exiting, the system will permanently de lete email seven (7) days after items are placed within the Deleted Items (trash) folder.

9. Users’ email mailbox storage capacity and the size of an outbound email in the email system (including file/document attachments) will be capped at a size/rate set by the IT Department.

10. All City policies (e.g. Use of City Re sources, anti-harassment policies, etc.) apply to electronic media including email. Users must ensure that all communications are appropriate and comport with City policies.

11. Email from the City Attorney’s Office or outside counsel should not be filed with public records. These emails may be subject to Attorney-Client and/or the Attorney Work Project privilege s, and the contents should not be disclosed without first checking with the City Attorney’s Office. Other exemptions may also apply.

12. If the City Attorney’s Office informs departments and/or users that litigation, administrative or other pr oceedings exist, all emails, including duplicate copies, must be retained from the time of notice as they may be CMD NUMBER 42

Issued March 2009 Page 3 of 3
subject to disclosure in the course of the proceeding.

IT Department 13. To instruct recipients of email sent from the City of Santa Clara about the City’s policies, an email disclaimer will automatically be attached to every email leaving the City’s system.

14. Frequently Asked Questions and Trai ning Tips about the City’s Email Retention Policy are available on the City’s Intranet Site.

Cross-Reference:

CMD 13 – Public Record Requests
CMD 116 – Use of City Resources & Non-Confidential Nature of Information CMD 131 – Equal Employment Opportunity Policy & Discrimination Complaint Procedure

Definitions:

A. “Emails” are messages sent and received electroni cally through an email system and also known as electronic mail. Messages include the text of the email, along with any metadata or attachments affixed thereto.

B. “Duplicate copy” is an email on which the recipient is listed as a “cc:” (copied recipient), or which another department or employee is responsible for the record’s retention.

C. “Public records” are “any writing containing informat ion relating to the conduct of the public’s business prepared, owned, used, or retained by any state or local agency regardless of physical form or characteristics.”
D. “User” is any City employee, advisory body member, Council Member, contractor, intern, or volunteer who uses City-owned or City-provided electronic technology.

E. “Writing” includes electronic mail.

F. “Preliminary Drafts” are preliminary versions of a written document, such as a staff report or draft agreement that is ready for revision or correction and not a final document of record. It also includes email that does not contain substantive informat ion concerning City policies, decision-making, proceedings, projects, contractors, or practices; and does not relate to threatened or active litigation.

RECORDS RETENTION SCHEDULE: MAYOR & CITY COUNCIL
SANTA CLARA, CA.

Page MCC-1
MCC-No. Office of
Record Record Type Records Description Retention / Disposition Comments / Reference (OFR) Active
(in office)
Inactive
(Records
Center)
Total
Retention
If the record is not listed here, refer to the Retention for City-Wide Standards Retentions begin when the act is completed, and imply a full file folder (e.g. last document + 2 years), since destruction is normally performed by file folder.

Litigation, complaints, claims, public records act requests, audits and/or investigations suspend normal retention periods (retention resumes after settlement or completion).

MCC-001 Mayor &
City Council
Awards &
Mementos
AWARDS & MEMENTOS: Received by the
City (Physical Item) P p Department preference; GC §34090 MCC-002 Mayor &
City Council Reference
REFERENCE: Significant Historical Value
Awards/Mementos List (received by the City),
Proclamations List (given by the City) etc
current + 4
years P P Department preference; GC §34090
MCC-003 Mayor &
City Council Routine
ROUTINE: Copies of originals created in the
Mayor and Council offices
Recognition Items given by the City: Proclamations,
C
ertificates, Letters of Recognition, Appreciation
Plaques Listing; timekeeping entries
4 years 4 years Department preference; GC §34090
MCC-004 Mayor &
City Council Correspondence
CORRESPONDENCE: Incoming/outgoing,
general information (copies)
Mayor and Council Chron, Complaints/Concerns,
C
alendars, Condolences, Adjournments, Schedule
of Events, Council Reading, City Depts & Agencies,
49ers, etc
current + 2
y
ears 2 years Department preference; GC §34090
MCC-005 Mayor &
City Council Non-Record
NON-RECORD: Organizations,
Commissions, Committees, Districts, Social
Organizations
Council Committees (internal and external), City
C
ommissions, League of California Cities, State,
Federal and County, Miss Santa Clara Pageant,
Sister Cities, Awards/Mementos (received by
individuals), Copies of Newspaper Clippings, DVD's
of City Council Meetings (copies), etc
None N
one Department preference; GC §34090
This material is protected by a copyright held by Gladwell Governmental Services Inc., but is also a public record, and will be duplicated and distributed upon a valid request for public records pursuant to state law. Adopted: 08/28/12 Revised May 2017 Council Policy 046 Page 1 of 1
City of Santa Clara
Council Policy Manual

Mayor and Council Public Records Policy

POLICY As technology has evolved, the creation and retention of public records has changed. In order to make clear what records created, received or retained by the Mayor and the Councilmembers are considered public records available for disclosure, the City Council hereby establishes the following policy.

Any communications, including emails, texts, messages or comments on social media, to or from the Mayor or City Council member that pertain to the conduct of public business, regardless of whether or not they were created or sent to a private or public account, are public records that may be disclosed unless otherwise exempt from disclosure.

PROCEDURE 1. The Mayor and the Councilmembers shall only use official City email and text accounts to conduct City business.

2. The City shall provide the Mayor and the Councilmembers with separate publicly owned devices such as cell phones and tablets for the conduct of City business.

3. The Mayor and the Councilmembers shall endeavor to keep communications regarding City business out of their personal accounts and shall forward any communications regarding City business that they receive in their personal accounts to their official City accounts.

4. Any communications, including emails and texts that relate to an Agenda item received before or during a Council meeting by a majority of the Council must be disclosed in accordance with Government Code Section 54957.5.

5. No campaign activity may be conducted on City accounts or City devices.

6. If a request for records is received, a search that is reasonably calculated to locate responsive records will be conducted. Privacy concerns can and should be addressed on a case-by-case basis.

Communications that are primarily personal, containing no more than incidental mentions of City business are generally not considered public records.

7. City Email Storage and Retention: Emails contained within a Councilmembers’ City Inbox and Sent Items folders (including any subfolders) shall be retained by the City for a period of two years from receipt or transmission. This hold follows a two-year retention policy for all Correspondence Record Description as defined in the Mayor and City Council Retention Schedule. Thereafter, unless City of
Santa Clara
The Center of What's Possible
Revised May 2017 Council Policy 046 Page 2 of 1
City of Santa Clara
Council Policy Manual

Reference:

Council Policy 046 Approved - May 2017
Council Policy 046 Amended – May 28, 2024

the City Councilmember places emails into User-created folders, any emails within a Council Members’ City Inbox and Sent Items folders (including any subfolders) that are more than two (2) years old shall be considered transitory and/or nonpermanent are subject to destruction per City’s Retention Schedule policies and will be automatically deleted.

City of
Santa Clara
The Center of What's Possible
Resolution/Mayor and Council Public Records Policy Page 1 of 2 Rev: 7/27/2023
RESOLUTION NO. _____

A RESOLUTION OF THE CITY OF SANTA CLARA, CALIFORNIA
AMENDING COUNCIL POLICY 046 “MAYOR AND COUNCIL
PUBLIC RECORDS POLICY”

WHEREAS, Council Policy 046, “Mayor and Council Public Records Policy” was established to make clear what records created, received, or retained by the Mayor and City Councilmembers are considered public records available for disclosure; WHEREAS, Council Policy 046 outlines that any communications including emails, texts, messages, to or from the Mayor or City Councilmember that pertain to the conduct of the public’s business may be disclosed unless otherwise exempt from disclosure; and, WHEREAS, the amended Council Policy 046 revises the 90 -day email deletion policy to two years for City Councilmembers emails to minimize the risk of records being inadvertently deleted and maximize compliance with the requirements under the City’s retention schedule.

NOW THEREFORE, BE IT RESOLVED BY THE CITY OF SANTA CLARA AS FOLLOWS:

1. That the amended Council Policy 046, entitled “Mayor and Council Public Records Policy,” attached here as Attachment 1, is hereby approved and adopted.

2. Effective date. This resolution shall become effective immediately.

I HEREBY CERTIFY THE FOREGOING TO BE A TRUE COPY OF A RESOLUTION PASSED

AND ADOPTED BY THE CITY OF SANTA CLARA, CALIFORNIA, AT A REGULAR MEETING THEREOF HELD ON THE 28Th DAY OF MAY, 2024, BY THE FOLLOWING VOTE:

AYES: COUNCILORS:

NOES: COUNCILORS:

ABSENT: COUNCILORS:

ABSTAINED: COUNCILORS:

ATTEST: ______________________________

NORA PIMENTEL, MMC

ASSISTANT CITY CLERK

CITY OF SANTA CLARA
Resolution/Mayor and Council Public Records Policy Page 2 of 2 Rev: 7/27/2023

Attachments to be incorporated by reference:

1. Council Policy 046 entitled “Mayor and Council Public Records Policy” City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
24-436 Agenda Date: 5/28/2024

REPORT TO COUNCIL

SUBJECT
Action on Authorizing the Use of City Electric Forces for Public Works Projects at Various Locations

COUNCIL PILLAR
Deliver and Enhance High Quality Efficient Services and Infrastructure

BACKGROUND
Section 1310 of the Santa Clara City Charter (Contracts on Public Works) states “that every contract involving an expenditure of more than one thousand dollars ($1,000) for the construction or improvement (excluding maintenance and repair) of public buildings, works, streets, drains, sewers, utilities, parks and playgrounds shall be let to the lowest responsible bidder.” The section further states that “the City Council may declare and determine that, in its opinion, the work in question may be performed better or more economically by the City with its own employees, and after the adoption of a resolution to this effect by at least four affirmative votes, it may proceed to have said work done in the manner stated, without further observance of the provisions of this section.”

DISCUSSION
Staff believes that the work described below is better performed with City forces based upon the following factors: (1) the work is limited in size and scope; (2) City forces have knowledge and training in operating and maintaining the electric system that can be leveraged to more economically perform this work; and (3) bidding out the work and contracting with a private entity would not likely result in a lower overall cost or time savings. Therefore, staff recommends that the City Council declare and determine that City forces can better perform the installation of the following electric facilities and approve the use of City forces.

Estimate Number: 39232
Location: 2865 Uranium Drive
Type of Service: New Business
Description of Work: Remove and install 3 electric service meters.

Estimated Cost: $9,332
Appropriation: Electric Utility Capital Fund (591) Project 2005 - New Business Estimate Work
Source of Revenue: Customer/Developer Contribution
Estimate Number: 39283
Location: 2991 Jerald Avenue
Type of Service: Capacity
Description of Work: Installation of a new wooden electric utility pole to relocate an existing electric service drop.

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24-436 Agenda Date: 5/28/2024
Estimated Cost: $5,333
Appropriation: Electric Utility Capital Fund (591) Project 2005 - New Business Estimate Work
Source of Revenue: Customer/Developer Contribution
Estimate Number: 36014
Location: 2310 Calle del Mundo
Type of Service: New Business
Description of Work: Install 1 padmount switch, 2 padmount transformers, ± 400' high voltage conductor, ± 400' low voltage conductor, 1 streetlight and pole, 151 residentials meters, and 4 commercial meters.

Estimated Cost: $185,313
Appropriation: Electric Utility Capital Fund (591) Project 2005 - New Business Estimate Work
Source of Revenue: Customer/Developer Contribution
Estimate Number: 38816
Location: 3193 Cabrillo Avenue
Type of Service: New Business
Description of Work: Remove existing streetlights to be replaced by AT&T and install underground wires to new streetlight.

Estimated Cost: $3,353
Appropriation: Electric Utility Capital Fund (591) Project 2005 - New Business Estimate Work
Source of Revenue: Customer/Developer Contribution
Estimate Number: 38817
Location: 3345 Cabrillo Avenue
Type of Service: New Business
Description of Work: Remove existing streetlights to be replaced by AT&T and install underground wires to new streetlight.

Estimated Cost: $2,577
Appropriation: Electric Utility Capital Fund (591) Project 2005 - New Business Estimate Work
Source of Revenue: Customer/Developer Contribution
Estimate Number: 38822
Location: 3061 Monroe Street
Type of Service: New Business
Description of Work: Remove existing streetlights to be replaced by AT&T and install underground wires to new streetlight.

Estimated Cost: $3,606
Appropriation: Electric Utility Capital Fund (591) Project 2005 - New Business Estimate Work
Source of Revenue: Customer/Developer Contribution
Estimate Number: 39231
Location: 1821 Bowers Avenue
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24-436 Agenda Date: 5/28/2024
Type of Service: New Business
Description of Work: Remove existing streetlights to be replaced by AT&T and install underground wires to new streetlight.

Estimated Cost: $3,440
Appropriation: Electric Utility Capital Fund (591) Project 2005 - New Business Estimate Work
Source of Revenue: Customer/Developer Contribution
Estimate Number: 39344
Location: 1962 Lafayette Street
Type of Service: New Business
Description of Work: Installation of a foreign asset on an existing wooden pole.

Estimated Cost: $1,497
Appropriation: Electric Utility Capital Fund (591) Project 2005 - New Business Estimate Work
Source of Revenue: Customer/Developer Contribution

ENVIRONMENTAL REVIEW
Staff recommends that the City Council determine that the action being considered is exempt from the California Environmental Quality Act (“CEQA”) pursuant to the section 15303 (Class 3 - New Construction or Conversion of Small Structures) of Title 14 of the California Code of Regulations: as the proposed work involves the construction or installation of a limited number of small electric utility facilities.

FISCAL IMPACT
The funds to support the staff time for work performed by SVP and related construction materials for the work detailed in this report totaling $214,451, are included in the Fiscal Year 2023/24 Capital Budget, New Business Estimate Work, in the Electric Utility Capital Fund. All referenced work will be performed with City Silicon Valley Power staff. Some work associated with encroachment permits may be performed by the Department of Public Works (DPW). DPW costs are recovered through payment of permit fees.

COORDINATION
This report has been coordinated with the Finance Department and City Attorney’s Office.

PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, [email protected] <mailto:[email protected]> or at the public information desk at any City of Santa Clara public library.

RECOMMENDATION

1. Determine the proposed action is exempt from CEQA pursuant to Section 15303 (Class 3 - New Construction or Conversion of Small Structures) of Title 14 of the California Code of Regulations; and
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24-436 Agenda Date: 5/28/2024

2. Declare and determine in accordance with Section 1310 of the City Charter that the public works projects proposed at 2865 Uranium Drive, 2991 Jerald Avenue, 2310 Calle Del Mundo, 3193 Cabrillo Avenue, 3345 Cabrillo Avenue, 3061 Monroe Street, 1821 Bowers Avenue, and 1962 Lafayette Street are better performed by the City with its own employees based on the information set forth in this Report to Council and authorize the performance of these public works by City electric utility forces consistent with this authorization.

Reviewed by: Manuel Pineda, Chief Electric Utility Officer Approved by: Jovan D. Grogan, City Manager
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City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
24-231 Agenda Date: 5/28/2024

REPORT TO COUNCIL

SUBJECT
Action on Appointing a City of Santa Clara Bicycle and Pedestrian Advisory Committee Member to Serve as the City's Representative on the Santa Clara Valley Transportation Authority Bicycle Pedestrian Advisory Committee

COUNCIL PILLAR
Deliver and Enhance High Quality Efficient Services and Infrastructure

BACKGROUND
The Santa Clara Valley Transportation Authority (VTA) requests that cities appoint members to the VTA Bicycle and Pedestrian Advisory Committee (VTA BPAC). The VTA BPAC is comprised of one representative from each of the sixteen member agencies, which includes the City of Santa Clara.

VTA BPAC members serve two-year terms starting on July 1 and ending on June 30 of the second year and may serve successive terms.

The VTA BPAC advises the VTA Board of Directors on matters pertaining to funding and planning issues for bicycle and pedestrian projects and serves as the countywide bicycle advisory committee for Santa Clara County. Typical duties involve review of regional plans related to bicycling and walking, review of funding proposals for projects and consideration of specialized issues of regional or cross-jurisdictional significance.

DISCUSSION
The VTA has notified the City that the term for the City’s current VTA BPAC representative, Betsy Megas, will end on June 30, 2024. Therefore, the City must appoint a new VTA BPAC representative.

The City’s VTA BPAC representative must live and/or work in Santa Clara County during their term.

The VTA also requires that the representative be either a member of the City’s BPAC or an individual interested in bicycle or pedestrian issues and not a City or VTA staff person.

At the April 1, 2024 Santa Clara BPAC meeting, the BPAC voted to recommend to Council that member Betsy Megas continue to serve as the City’s VTA BPAC representative. Betsy Megas’ membership on both the City and VTA BPAC facilitates communication between the City and the other member agencies. If appointed, she will serve a term which will end on June 30, 2026.

ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines section 15378(b)(5) in that it is a governmental organization or administrative activity that will not result in direct or indirect changes in the environment.

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24-231 Agenda Date: 5/28/2024

FISCAL IMPACT
There is no additional cost to the City other than staff time and expense.

COORDINATION
This report was coordinated with the City Manager’s Office, City Attorney’s Office, and City Clerk’s Office.

PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email [email protected] <mailto:[email protected]> or at the
public information desk at any City of Santa Clara public library.

RECOMMENDATION
Appoint the City of Santa Clara Bicycle and Pedestrian Advisory Committee member Betsy Megas to serve as the City’s representative on the Santa Clara Valley Transportation Authority Bicycle and Pedestrian Advisory Committee.

Reviewed by: Craig Mobeck, Director of Public Works
Approved by: Jovan Grogan, City Manager
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City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
24-487 Agenda Date: 5/28/2024

REPORT TO COUNCIL

SUBJECT
Action to Approve Revisions to the Existing Staff Analyst I Class Specification; Approve a New Senior Counsel for Silicon Valley Power Class Specification; Approve a Resolution Adopting the Amended Unclassified Salary Plan

COUNCIL PILLAR
Manage Strategically Our Workforce Capacity and Resources

BACKGROUND
Sections 4 and 6 of the Personnel and Salary Resolution require City Council approval of new or revised classifications. The proposed Council action satisfies these applicable requirements.

Revisions to Staff Analyst I (Job Code 796):

The Human Resources Department modified the class specification for Staff Analyst I (Job Code 796) to clarify the post-secondary degree and/or units requirements needed to meet the minimum qualifications for the classification.

The modification to Staff Analyst I (Job Code 796) was approved by the Civil Service Commission on April 11, 2024. The requested approval does not modify salary range for this classification.

Create the Senior Counsel for Silicon Valley Power (Job Code 179) Class Specification:

The City Attorney Office’s and Human Resources Department coordinated to create a new classification titled Senior Counsel for Silicon Valley Power (Job Code 179) to better support the legal needs of Silicon Valley Power. The position has a salary range slightly higher than that of an Assistant City Attorney. The proposed Resolution satisfies the requirement for an updated Salary Plan reflecting the new position and its associated salary range.

DISCUSSION
Revisions to Staff Analyst I (Job Code 796) Class Specification The Human Resources Department proposed revisions to the Staff Analyst I (Job Code 796) class specification to clarify the degree and/or units requirements needed to meet the minimum qualifications for the classification. This revision is intended to make it clearer to applicants what educational units are accepted for the position. The specification proposes a standard of completion of 120 semester units or 180 quarter units, with a requirement for at least one course in particular fields of study.

Staff Analyst I (Job Code 796)
- with an annual salary range of $102,267.48- $130,801.20.

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24-487 Agenda Date: 5/28/2024
The Staff Analyst I (Job Code 796) is responsible for program analysis and administrative duties in support of assigned programs and activities.

Create the Senior Counsel for Silicon Valley Power (Job Code 179) Class Specification:

The City Attorney’s Office and Human Resources Department coordinated to create the new class specification of Senior Counsel for Silicon Valley Power (Job Code 179). This position is dedicated to providing legal support (essentially in a general counsel capacity) for Silicon Valley Power. It requires significant experience in, and knowledge of, legal requirements particular to municipal electric utilities in California. For example, the position requires: expertise with renewable energy procurement including experience with wind, geothermal, solar, and hydroelectric; expertise with CPUC Rules and Regulations, including, but not limited to General Orders 95, 128, and 165 and experience with managing and responding to CPUC audits and FERC Rules and Regulations; BAAQMD Rules and Regulations as they pertain to generation resources and their emission regulations within the City.

Creating this new position allows the City to include these necessary and specific areas of expertise in the job specification, such that the skills of the incumbent can be more closely tailored to the needs of the client. This would otherwise not be possible in the standard Assistant City Attorney job specification, which applies to attorneys representing all departments in the City.

Senior Counsel for Silicon Valley Power (Job Code 179)
- with an annual salary range of
$229,913.30 - $296,588.16. The Senior Counsel for Silicon Valley Power (Job Code 179) performs the most complex work for Silicon Valley Power. Duties include providing general counsel services on a variety of matters, negotiating and drafting contracts, managing regulatory compliance issues, and managing litigation. The proposed salary is in alignment with the internal equity of the workgroup.

The salary range is higher than that of the Assistant City Attorney classification in recognition of the additional years of experience required for the position (a minimum of ten years for the SVP position, as opposed to a minimum of six years for the standard Assistant position).

Section 9 of the Personnel and Salary Resolution requires City Council approval of compensation plans for unclassified positions. California Code Regulations Section 570.5 governs and requires the adoption of updated publicly available salary schedules by the governing body. The proposed Resolution satisfies these applicable requirements. The updated salary plan reflects the salary range for the new position.

ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(5) in that it is a governmental organizational or administrative activity that will not result in direct or indirect changes in the environment.

FISCAL IMPACT
There is no fiscal impact for the class specification modification for Staff Analyst I (Job Code 796).

The City Attorney’s Office intends to reclassify a 1.0 Assistant City Attorney (Job Code 015) classification to a 1.0 Senior Counsel for Silicon Valley Power (Job Code 179). The Senior Counsel for Silicon Valley Power position has an annual salary range of $229,913.30 - $296,588.16 while the City of Santa Clara Printed on 5/24/2024Page 2 of 3
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24-487 Agenda Date: 5/28/2024
Assistant City Attorney position has an annual salary range of $213,185.04 - $275,895.96. When considering salary and retirement costs, the average cost differential is approximately $25,000 per year. The additional cost is expected to be absorbed in FY 2023/24 and any necessary budget adjustments will be brought forward in FY 2024/25 based on actual expenditures. Through the cost allocation process, the full cost of this position would be allocated to Silicon Valley Power.

COORDINATION
This report was coordinated with the City Attorney’s Office and the Finance Department.

PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email [email protected] <mailto:[email protected]> or at the
public information desk at any City of Santa Clara public library.

RECOMMENDATION

1. Approve revisions to the existing Staff Analyst I (Job Code 796) class specification to clarify the acceptable level of educational units for the position;

2. Approve the creation of the Senior Counsel for Silicon Valley Power (Job Code 179) class specification; And

3. Approve the Resolution Adopting the Amended Unclassified Salary Plan to reflect the new Senior Counsel for Silicon Valley Power position.

Reviewed by: Aracely Azevedo, Director of Human Resources Approved by: Jovan Grogan, City Manager

ATTACHMENTS

1. Class Specification (clean), Staff Analyst I (Job Code 796)

2. Class Specification (track changed version, Staff Analyst I (Job Code 796)

3. Class Specification, Senior Counsel for Silicon Valley Power (Job Code 179)

4. Resolution Updated Salary Plan for Council 05-28-2024 (eff 06-09-2024)

5. Unclassified Salary Plan Approved 05-28-2024 (eff 06-09-2024) City of Santa Clara Printed on 5/24/2024Page 3 of 3
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CITY OF SANTA CLARA, CALIFORNIA

CLASS SPECIFICATION

Page 1 of 4 ends

TITLE: STAFF ANALYST I (JOB CODE 796)

DEPARTMENT ACCOUNTABLE TO FLSA STATUS
Various Various Non-exempt

CLASS SUMMARY
The Staff Analyst I is responsible for program analysis and administrative duties in support of assigned programs and activities. Assigned programs could include housing development, community development, community outreach, historic preservation, advanced planning, public/private housing rehabilitation, management analysis, building services, human services, criminal statistics, solid waste, recycling, waste prevention, sustainability, urban runoff pollution prevention, and federal/state grant programs and activities. Performs related duties as assigned.

DISTINGUISHING CHARACTERISTICS
The Staff Analyst classifications are bridge classifications between the Staff Aide classifications and the Management Analyst classifications. The Staff Analyst I works under general supervision and is expected to work within established procedures and policies of the work unit.

This classification differs from the lower-level Staff Aide classifications in that the latter perform advanced clerical duties and project-based support. The classification differs from the higher- level Staff Analyst II classification in that the latter performs more complex program analysis and administrative duties. A Staff Analyst II may also provide lead or supervision to a Staff Analyst I.

MINIMUM QUALIFICATIONS

EDUCATION AND EXPERIENCE
Completion of 120 semester units or 180 quarter units which, irrespective of the preceding requirement, shall include one (1) or more courses in, or a Bachelor's degree in, public or business administration, urban planning, information management, criminal justice, environmental studies, finance, or related field from an accredited college or university.

ACCEPTABLE SUBSTITUTION
None

LICENSES/CERTIFICATIONS
Possession of a valid California Class C driver's license is required at time of appointment and for duration of employment.

DESIRABLE QUALIFICATIONS
Experience in electronic spreadsheets, on-line financial systems, social media outreach techniques, accounting, record-keeping, and mortgage financing.

OTHER REQUIREMENTS
• Must be able to perform all of the essential functions of the job assignment.

STAFF ANALYST (796)

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• Incumbents of this classification may be required to occasionally work overtime and odd and unusual hours.

TYPICAL DUTIES
This description may not include all the duties listed below, nor do the examples cover all duties that may be performed.

The Staff Analyst I may be assigned to work in the any of the following Departments, including but not limited to: Community Development Department, City Manager's Office, Housing and Community Services Division, Department of Public Works, or the Police Department.

Under general supervision, the incumbent:
• Performs administrative duties related to all facets of assigned programs • Maintains liaison with grantor agencies, citizen advisory committees, public services agencies, program applicants, and/or the general public • Prepares necessary reports including program planning reports, program performance reports, and grant reports
• Coordinates data collection and performs data entry
• Prepares evaluation reports
• Maintains financial records and budgets
• Monitors financial accounts
• Prepares appropriate correspondence, applications, and reports • Assists in developing policies and procedures relative to assigned programs • Seeks state and federal grant opportunities and develops grant applications for same • Prepares and distributes reports, charts, publications, and related materials to track, display, and explain trends
• Monitors program procedures and works with public when necessary and as directed • Responds to requests for analysis information related to specific programs, grants, or projects
• Performs necessary duties to implement community-oriented programs as directed • Performs other related duties as assigned

For the City Manager's Office and Housing and Community Services Division:
• Develops and assists in the negotiations of contracts and budgets for human service providers
• Monitors performance by contractors to service agreements and makes recommendations for improved delivery of goods and services
• Reviews and analyzes payment requests received from contractors to recommend payments based on performance accomplishments
• Coordinates the provision of financial assistance to property owners and preparation of loan packages
• Initiates contractor payments
• Monitors contractor performance on construction projects to ensure federal contract compliance standards are met
• Performs environmental review of programs and projects to evaluate compliance with federal environmental regulations, policies, and procedural requirements STAFF ANALYST (796)

Page 3 of 4 ends

• Compiles performance data and prepares drafts of reports to the City Manager and grantors

For the Police Department:
• Analyzes data and determines trends in criminal activity for the Police Department • Coordinates Citizens' Police Academy program

For the Community Development Department:
• Performs research and analysis related to Department programs and initiatives • Administers and manages contracts for the Department
• Coordinates the initiation and operation of Committees formed by the City Council • Analyzes development activity, maintains information, and creates reports for Department management and the City Manager's Office
• Maintains websites, applications, and Social Media accounts for the Department

For the Department of Public Works:
• Maintains websites, applications and social media accounts for the department • Represents the City at various countywide committees and subcommittees • Assists with the coordination of the City's annual Arbor Day/Earth Celebration and other special events
• Prepares service and solid waste hauling agreements
• Assists in solid waste and storm drain rate setting processes • Monitors performance of solid waste and recycling service providers and facilitates successful resolution of service issues
• Administer the City's Adopt-a-Spot community-based beautification program • Coordinates the sign-off of stormwater treatment measure inspection and maintenance agreements and third-party stormwater treatment measure installation verification sign- off for building occupancy
• Implements the construction & demolition debris recycling online reporting system

KNOWLEDGE, SKILLS, & ABILITIES

Knowledge of:
• The principles, methods, and practices of public administration • Analytical techniques needed to review and analyze information to determine options and recommend viable solutions
• Report writing to accurately and effectively communicate job related information • Principles and techniques used in working with different individuals and citizen groups • Federal, state, and local regulations dealing with housing, neighborhood conservation, solid waste planning and management
• Municipal and private sector finances and financial institutions • Property title research methods
• Basic research techniques
• Business English and statistical mathematics
• Office safety practices, procedures and standards
STAFF ANALYST (796)

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• Federal grants management

Ability to:
• Analyze and apply complex governmental instructions, regulations and legislation • Perform basic financial accounting tasks
• Formulate conclusions based on analysis of data
• Read and interpret maps and geological information
• Exercise tact, resourcefulness, and persuasion in dealing with individuals and groups of varied ethnic, social, and economic backgrounds
• Effectively handle multiple priorities, organize workload and meet strict deadlines • Spell correctly and to communicate effectively, both orally and in written form, using proper English
• Prepare comprehensive, clear and concise reports
• Understand and carry out written and oral instructions • Make presentations to large groups of people
• Speak clearly and effectively
• Interpret and apply legal requirements
• Deal tactfully with those contacted in the course of work, including co-workers and the general public
• Lift, carry, and relocate a variety of files or materials weighing up to 25 pounds • Walk or stand for extended periods of time and bend, stoop, reach, carry, climb and lift as necessary to perform assigned duties
• Work with personal computers and perform data entry

SUPERVISION RECEIVED
Works under the general supervision of a Management Analyst, Division Manager, Assistant Director, Director or other manager as assigned.

SUPERVISION EXERCISED
May supervise clerical and/or administrative support staff, volunteers and/or interns. May assist in the training of other personnel.

CONFLICT OF INTEREST
Incumbents in this position are required to file a Conflict of Interest statement upon assuming office, annually, and upon leaving office, in accordance with City Manager’s Directive 100.

CLASSIFICATION HISTORY
Established 01/2013; Rev. 12/2016; Rev. 11/2023; Rev. 04/2024 Rev. 11/202304/2024

CITY OF SANTA CLARA, CALIFORNIA

CLASS SPECIFICATION

Page 1 of 4 ends

TITLE: STAFF ANALYST I (JOB CODE 796)

DEPARTMENT ACCOUNTABLE TO FLSA STATUS
Various Various Non-exempt

MINIMUM QUALIFICATIONS

EDUCATION AND EXPERIENCE
Completion of 120 semester units or 180 quarter units which, irrespective of the preceding requirement, shall include one (1) or more courses in, or a Education equivalent to Bachelor's degree in, public or business administration, urban planning, information management, criminal justice, environmental studies, finance, or related field from an accredited college or university.

ACCEPTABLE SUBSTITUTION
None

LICENSES/CERTIFICATIONS
Possession of a valid California Class C driver's license is required at time of appointment and for duration of employment.

DESIRABLE QUALIFICATIONS
Experience in electronic spreadsheets, on-line financial systems, social media outreach techniques, accounting, record-keeping, and mortgage financing.

OTHER REQUIREMENTS
 Must be able to perform all of the essential functions of the job assignment.

STAFF ANALYST (796)

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 Incumbents of this classification may be required to occasionally work overtime and odd and unusual hours.

TYPICAL DUTIES
This description may not include all the duties listed below, nor do the examples cover all duties that may be performed.

Under general supervision, the incumbent:
 Performs administrative duties related to all facets of assigned programs  Maintains liaison with grantor agencies, citizen advisory committees, public services agencies, program applicants, and/or the general public  Prepares necessary reports including program planning reports, program performance reports, and grant reports
 Coordinates data collection and performs data entry
 Prepares evaluation reports
 Maintains financial records and budgets
 Monitors financial accounts
 Prepares appropriate correspondence, applications, and reports  Assists in developing policies and procedures relative to assigned programs  Seeks state and federal grant opportunities and develops grant applications for same  Prepares and distributes reports, charts, publications, and related materials to track, display, and explain trends
 Monitors program procedures and works with public when necessary and as directed  Responds to requests for analysis information related to specific programs, grants, or projects
 Performs necessary duties to implement community-oriented programs as directed  Performs other related duties as assigned

For the City Manager's Office and Housing and Community Services Division:
 Develops and assists in the negotiations of contracts and budgets for human service providers
 Monitors performance by contractors to service agreements and makes recommendations for improved delivery of goods and services
 Reviews and analyzes payment requests received from contractors to recommend payments based on performance accomplishments
 Coordinates the provision of financial assistance to property owners and preparation of loan packages
 Initiates contractor payments
 Monitors contractor performance on construction projects to ensure federal contract compliance standards are met
 Performs environmental review of programs and projects to evaluate compliance with federal environmental regulations, policies, and procedural requirements STAFF ANALYST (796)

Page 3 of 4 ends

 Compiles performance data and prepares drafts of reports to the City Manager and grantors

For the Police Department:
 Analyzes data and determines trends in criminal activity for the Police Department  Coordinates Citizens' Police Academy program

For the Community Development Department:
 Performs research and analysis related to Department programs and initiatives  Administers and manages contracts for the Department
 Coordinates the initiation and operation of Committees formed by the City Council  Analyzes development activity, maintains information, and creates reports for Department management and the City Manager's Office
 Maintains websites, applications, and Social Media accounts for the Department

For the Department of Public Works:
 Maintains websites, applications and social media accounts for the department  Represents the City at various countywide committees and subcommittees  Assists with the coordination of the City's annual Arbor Day/Earth Celebration and other special events
 Prepares service and solid waste hauling agreements
 Assists in solid waste and storm drain rate setting processes  Monitors performance of solid waste and recycling service providers and facilitates successful resolution of service issues
 Administer the City's Adopt-a-Spot community-based beautification program  Coordinates the sign-off of stormwater treatment measure inspection and maintenance agreements and third-party stormwater treatment measure installation verification sign- off for building occupancy
 Implements the construction & demolition debris recycling online reporting system

KNOWLEDGE, SKILLS, & ABILITIES

Knowledge of:
 The principles, methods, and practices of public administration  Analytical techniques needed to review and analyze information to determine options and recommend viable solutions
 Report writing to accurately and effectively communicate job related information  Principles and techniques used in working with different individuals and citizen groups  Federal, state, and local regulations dealing with housing, neighborhood conservation, solid waste planning and management
 Municipal and private sector finances and financial institutions  Property title research methods
 Basic research techniques
 Business English and statistical mathematics
 Office safety practices, procedures and standards
STAFF ANALYST (796)

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 Federal grants management

Ability to:
 Analyze and apply complex governmental instructions, regulations and legislation  Perform basic financial accounting tasks
 Formulate conclusions based on analysis of data
 Read and interpret maps and geological information
 Exercise tact, resourcefulness, and persuasion in dealing with individuals and groups of varied ethnic, social, and economic backgrounds
 Effectively handle multiple priorities, organize workload and meet strict deadlines  Spell correctly and to communicate effectively, both orally and in written form, using proper English
 Prepare comprehensive, clear and concise reports
 Understand and carry out written and oral instructions  Make presentations to large groups of people
 Speak clearly and effectively
 Interpret and apply legal requirements
 Deal tactfully with those contacted in the course of work, including co-workers and the general public
 Lift, carry, and relocate a variety of files or materials weighing up to 25 pounds  Walk or stand for extended periods of time and bend, stoop, reach, carry, climb and lift as necessary to perform assigned duties
 Work with personal computers and perform data entry

SUPERVISION RECEIVED
Works under the general supervision of a Management Analyst, Division Manager, Assistant Director, Director or other manager as assigned.

SUPERVISION EXERCISED
May supervise clerical and/or administrative support staff, volunteers and/or interns. May assist in the training of other personnel.

CLASSIFICATION HISTORY
Established 01/2013; Rev. 12/2016; Rev. 11/2023; Rev. 04/2024 Rev. 05/2024

CITY OF SANTA CLARA, CALIFORNIA

CLASS SPECIFICATION

Page 1 of 4 ends

TITLE: SENIOR COUNSEL FOR SILICON VALLEY POWER (JOB CODE 179)

DEPARTMENT ACCOUNTABLE TO FLSA STATUS
City Attorney’s Office City Attorney Exempt

CLASS SUMMARY
Under general direction, this classification performs the most complex work of considerable difficulty for Silicon Valley Power (SVP). Primary responsibilities include providing general counsel services on a variety matters, negotiating and drafting contracts for City Council approval, managing regulatory compliance issues, and managing litigation. Performs related duties as assigned.

DISTINGUISHING CHARACTERISTICS
This is a professional legal advisory and managerial position in the Unclassified Service . An incumbent in this classification must: exercise independent judgment and discretion to provide legal and policy advice; manage, control, and direct outside legal counsel and employees; and formulate administrative policies for the effective management of City utility and other operations and use of assigned personnel. The position requires a demonstrated ability to work well with management, professional and administrative support employees in the Office; with clients, professionals, managers, City’s executive management team and all City Departments and elected and appointed officials from the City and various boards, commissions, and committees.

As a member of the City’s unclassified service, this is an “at -will” position and the incumbent serves at t he discretion of the City Manager and City Attorney. An incumbent in this position demonstrates strong ethical, professional, and service-oriented leadership and interpersonal skills, sets a good example, and correctly applies the tenets of the City’s Code of Ethics and Values.

MINIMUM QUALIFICATIONS

EDUCATION AND EXPERIENCE
J.D. or L.L.B. from an accredited law school AND ten (10) years recent experience in the practice of law. Six (6) years of the qualifying experience must include advising dealing with electric utilities in the State of California. Two (2) years of the qualifying experience must include advising dealing with municipal, county or state governmental agencies in the State of California.

ACCEPTABLE SUBSTITUTION
None.

LICENSES/CERTIFICATIONS
• Possession of an appropriate California driver's license is required. • Active member in good standing of the State Bar of California is required.

DESIRABLE QUALIFICATIONS
• Admission to the Federal District Court and Federal Appeals Court Bar is desirable. • One year of supervisory experience is desirable.

SENIOR COUNSEL FOR SILICON VALLEY POWER (JOB CODE 179)

Page 2 of 4 ends

OTHER REQUIREMENTS
• Must be able to perform all of the essential functions of the job. • May be required to work odd and unusual hours.

TYPICAL DUTIES

This description may not include all the duties listed below, nor do the examples cover all duties that may be performed.

Under general direction, the incumbent will:
• Act as General Counsel to Silicon Valley Power;
• Give legal counsel to elected and appointed officials, boards, commissions, committees and City departments (primarily to Silicon Valley Power) on a broad variety of legal topics, including but not limited to, interpretation of Federal, State, regional and local constitutions, charters, statutes, ordinances, resolutions, rules, regulations, court decisions, administrative law decisions, and other applicable legal authority; • Assist in developing specifications for permitting and implementing electric public works projects including procurement of necessary electric equipment (transformers, switchgear, etc.), awarding and managing public works contracts, and resolving issues/disputes with contractors, bonding agencies, regulatory agencies, etc.; • Negotiate and draft contracts for financing, acquisition and disposition of real estate interests, including fee simple, easements and rights of way, leasing, power purchases, power service and supply agreements and any and all other contracts and agreements related to the operation of a municipal electric and telecommunications utility; • Appear before, obtain approvals from and otherwise works closely with regulatory agencies including FERC, NERC, CPUC, CEC, and CAISO on power acquisition, transmission, distribution, and related operational issues; • Make appearances and conduct litigation on legal matters before State and Federal courts, boards, administrative agencies, and commissions;
• Participate in the selection of and manage outside legal counsel engaged by the City for specialized legal matters;
• Prepare drafts and/or review the legality of legislation, ordinances, resolutions, administrative policies, and other legal documents and instruments; • Confer with the City Attorney to ascertain legal policy and then make decisions with respect to prosecution, compromise and/or dismissal of civil litigation; • Oversee or prosecute eminent domain proceedings;
• Monitor and assist in the collection of debts and damages due to the City; • Monitor and assist in the investigation of claims and complaints by and against the City; • Be available to attend meetings of the City Council, JPAs, boards and commissions as assigned by the City Attorney to render legal advice and counsel; • Manage the training and supervision of subordinate attorneys and support staff; • Perform any and all other tasks required to provide legal support for SVP or City operations as assigned; and
• Perform other related duties as required.

SENIOR COUNSEL FOR SILICON VALLEY POWER (JOB CODE 179)

Page 3 of 4 ends

KNOWLEDGE, SKILLS, & ABILITIES

Knowledge of:
• Principles and practices of civil, criminal, constitutional, and administrative law specific to an electric utility and a municipality;
• Principles and practices of government organizations, powers and limitations of governmental functions, organizational management and supervision; • Office safety practices, procedures and standards;
• Organization and operating procedures of a municipal attorney’s office; • Computer technology, i.e. Microsoft 360 Office Suite programs (including but not limited to Word, Excel, PowerPoint, Teams, Sharepoint, etc.);
• Legal research techniques;
• General statutory and case law, with specific knowledge of law related to municipal government functions and law specific to an electric utility. Specific areas of knowledge may include, but are not limited to, the following:
o General expertise in the legal aspects of California municipal electric utility operations including market knowledge, industry standards, stakeholders, regulatory schemes, and risk management related issues; o Expertise with renewable energy procurement including experience with wind, geothermal, solar, and hydroelectric;
o Expertise with California Public Utilities Commission Rules and Regulations, including, but not limited to General Orders 95, 128, and 165 and experience with managing and responding to CPUC audits and Federal Energy Regulatory Commission Rules and Regulations;
o Knowledge of transmission, substation, and electric system development; o Expertise with rates and fee development, including, Proposition 26, Proposition 218, and applicable case law;
o Resource Adequacy procurement and sale (local, system, flexible, and contingent resource adequacy products) through purchase agreements; o Bay Area Quality Management District Air Resources Board Rules and Regulations as they pertain to generation resources and their emission regulations within the City;
o Knowledge of telecommunications law (small cell and fiber optic) and negotiate and prepare related lease agreements;
• US Constitution, California Constitution, Brown Act, Public Records Act, Political Reform Act, CEQA.

Ability to:
• Communicate both orally and in writing in a highly effective manner; • Prepare analysis of law, fact, and argument, clearly and logically; • Analyze, appraise and apply legal principles and precedents to difficult legal problems and use independent judgment;
• Present statements of law, fact, and argument clearly and logically; • Make presentations to executive leadership, City Council, City Manager; • Prepare complex legal opinions and a wide variety of sophisticated legal documents; SENIOR COUNSEL FOR SILICON VALLEY POWER (JOB CODE 179)

Page 4 of 4 ends

• Have a common-sense approach to decision making and balancing the needs of the requesting City client;
• Work both collaboratively and independently as a member of SVP and City senior leadership team using sound judgment, initiative, creativity and discretion in responding to sensitive community and organizational issues, concerns, and needs; • Effectively manage, organize, train and supervise assigned staff; • Build credibility, trust and strong working relationships with internal and external clients by working cooperatively and collaboratively, by working in a team environment, by seeking input from others, by listening and communicating, by using tact and discretion and by communicating, when appropriate, technical information in non-technical terms; • Handle stressful or sensitive situations with tact and diplomacy; • Establish and maintain effective working relationships with those contacted in the course of work;
• Work effectively in time-sensitive situations and meet deadlines and coordinate multiple projects and complex tasks simultaneously;
• Select and manage outside legal counsel on complex matters; • Handle a range of assignments from routine to complex; and • Bend, stoop, reach, carry, crawl, climb, and lift as necessary to perform assigned duties.

SUPERVISION RECEIVED
Works under the general direction of the City Attorney or designee.

SUPERVISION EXERCISED
May supervise subordinate or administrative staff, as assigned.

CLASSIFICATION HISTORY
Created 05/2024
Resolution/Update Unclassified Salary Plan (eff 06-09-2024) Page 1 of 2 Rev: 7/27/2023
RESOLUTION NO. _____

A RESOLUTION OF THE CITY OF SANTA CLARA, CALIFORNIA

TO ADOPT THE AMENDED UNCLASSIFIED SALARY PLAN FOR

SENIOR COUNSEL FOR SILICON VALLEY POWER (JOB CODE
179) WITH AN APPROVAL DATE OF MAY 28, 2024 AND AN
EFFECTIVE DATE OF JUNE 9, 2024

WHEREAS, the City of Santa Clara contracts with CalPERS to provide retirement benefits; WHEREAS, to comply with the California Code Regulations section 570.5, the City of Santa Clara shall among other things, have publicly available pay schedules approved and adopted by the City Council which shall indicate an effective date and date of any revisions; and, WHEREAS, as required by the California Code Regulations section 570.5 and as mandated by CalPERS, the City Council deems it to be in the best interests of the City to adopt the Amended Unclassified Salary Plan for City of Santa Clara classifications when there are salary modifications to existing classifications, and when new classifications are created and salary ranges need to be established or when existing classifications are deleted, with an approval date of May 28, 2024, and an effective date of June 9, 2024.

NOW THEREFORE, BE IT RESOLVED BY THE CITY OF SANTA CLARA AS FOLLOWS:

1. That the City hereby adopts the Amended Unclassified Salary Plan reflecting the creation of the Senior Counsel for Silicon Valley Power (Job Code 179) class specification.

2. Effective date. In accordance with the California Code Regulations section 570.5 and to comply with CalPERS, the attached salary schedule for unclassified positions, shall be effective June 9, 2024 and adopted with an approval date of May 28, 2024.

I HEREBY CERTIFY THE FOREGOING TO BE A TRUE COPY OF A RESOLUTION PASSED

AND ADOPTED BY THE CITY OF SANTA CLARA, CALIFORNIA, AT A REGULAR MEETING THEREOF HELD ON THE ___ DAY OF _________, 2024, BY THE FOLLOWING VOTE:

AYES: COUNCILORS:

NOES: COUNCILORS:

ABSENT: COUNCILORS:

Resolution/Update Unclassified Salary Plan (eff 06-09-2024) Page 2 of 2 Rev: 7/27/2023
ABSTAINED: COUNCILORS:

ATTEST: ______________________________

NORA PIMENTEL, MMC

ASSISTANT CITY CLERK

CITY OF SANTA CLARA

Attachments incorporated by reference:

1. Unclassified Salary Plan Approved 05-28-2024 (eff 06-09-2024) City of Santa Clara
Unclassified/Elected Salary Plan
Effective 6/9/2024
Approved 5/28/2024
Minimum Salary Maximum Salary
Job Title Job Code Union Code Hour ly Monthly Annual Hourly Monthly Annual Accounting Division Manager 109 9 82.735962$ 14,340.90$ 172,090.80$ 107.068904$ 18,558.61$ 222,703.32$ Asst Building Official 222 9 88.186096$ 15,285.59$ 183,427.08$ 114.132288$ 19,782.93$ 237,395.16$ Asst City Attorney 015 9 102.492808$ 17,765.42$ 213,185.04$ 132.642288$ 22,991.33$ 275,895.96$ Asst City Clerk 010 9 68.551327$ 11,882.23$ 142,586.76$ 88.713115$ 15,376.94$ 184,523.28$ Asst City Librarian 012 9 89.304462$ 15,479.44$ 185,753.28$ 115.571885$ 20,032.46$ 240,389.52$ Asst City Manager 016 9 138.876519$ 24,071.93$ 288,863.16$ 179.714250$ 31,150.47$ 373,805.64$ Asst Dir Of Community Dev 038 9 100.938519$ 17,496.01$ 209,952.12$ 131.219769$ 22,744.76$ 272,937.12$ Asst Dir Of Electric Util 021 9 120.989942$ 20,971.59$ 251,659.08$ 156.576692$ 27,139.96$ 325,679.52$ Asst Dir Of Finance 022 9 96.290654$ 16,690.38$ 200,284.56$ 124.614865$ 21,599.91$ 259,198.92$ Asst Dir Of Human Resources 018 9 96.290654$ 16,690.38$ 200,284.56$ 124.614865$ 21,599.91$ 259,198.92$ Asst Dir Of Pub Works/City Eng 071 9 106.188404$ 18,405.99$ 220,871.88$ 137.424058$ 23,820.17$ 285,842.04$ Asst Dir Of Water & Sewer Util 014 9 95.307346$ 16,519.94$ 198,239.28$ 123.348692$ 21,380.44$ 256,565.28$ Asst Fire Chief 024 9B 141.201404$ 24,474.91$ 293,698.92$ 182.740500$ 31,675.02$ 380,100.24$ Asst Fire Marshal 026 9B 108.300346$ 18,772.06$ 225,264.72$ 140.153423$ 24,293.26$ 291,519.12$ Asst Police Chief 027 9A 147.198635$ 25,514.43$ 306,173.16$ 183.163154$ 31,748.28$ 380,979.36$ Asst T
o The City Manager 028 9 94.131115$ 16,316.06$ 195,792.72$ 121.812635$ 21,114.19$ 253,370.28$ Audit Manager 201 9 79.650981$ 13,806.17$ 165,674.04$ 103.077635$ 17,866.79$ 214,401.48$ Battalion Chief 036 9B 116.678712$ 20,224.31$ 242,691.72$ 150.987577$ 26,171.18$ 314,054.16$ Battalion Chief 24 Hrs 036S 9BS 79.373283$ 19,261.25$ 231,135.00$ 102.712624$ 24,924.93$ 299,099.16$ Budget & Treasury Division Mgr 113 9 82.735962$ 14,340.90$ 172,090.80$ 107.068904$ 18,558.61$ 222,703.32$ Building Maintenance Manager 041 9 73.268827$ 12,699.93$ 152,399.16$ 94.818865$ 16,435.27$ 197,223.24$ Building Official 042 9 97.010481$ 16,815.15$ 201,781.80$ 125.540365$ 21,760.33$ 261,123.96$ Cemetery Operations Manager 045 9 58.589308$ 10,155.48$ 121,865.76$ 75.820442$ 13,142.21$ 157,706.52$ Chief Asst City Attorney 037 9 117.866423$ 20,430.18$ 245,162.16$ 152.538635$ 26,440.03$ 317,280.36$ Chief Electric Utility Officer 108 9 159.713192$ 27,683.62$ 332,203.44$ 206.682346$ 35,824.94$ 429,899.28$ Chief Operating Officer 311 9 159.713192$ 27,683.62$ 332,203.44$ 206.682346$ 35,824.94$ 429,899.28$ All classifications on the Unclassifed/Elected Salary Plan are FLSA "Exempt" 1 of 5 City of Santa Clara
Unclassified/Elected Salary Plan
Effective 6/9/2024
Approved 5/28/2024
Minimum Salary Maximum Salary
Job Title Job Code Union Code Hour ly Monthly Annual Hourly Monthly Annual City Attorney 060 Appointed 165.865385$ 28,750.00$ 345,000.00$ City Auditor 067 9 96.290654$ 16,690.38$ 200,284.56$ 124.614865$ 21,599.91$ 259,198.92$ City Clerk 063 Elected 1,500.00$ 18,000.00$
City Council Member CNCL Elected 2,000.00$ 24,000.00$ City Librarian 066 9 111.619327$ 19,347.35$ 232,168.20$ 144.448846$ 25,037.80$ 300,453.60$ City Manager 069 Appointed 201.067673$ 34,851.73$ 418,220.76$ Communications & Outreach Mgr 083 9 66.513981$ 11,529.09$ 138,349.08$ 86.071615$ 14,919.08$ 179,028.96$ Communications Operations Mgr 068 9 75.370500$ 13,064.22$ 156,770.64$ 97.537500$ 16,906.50$ 202,878.00$ Compliance Manager 081 9 67.561558$ 11,710.67$ 140,528.04$ 87.427731$ 15,154.14$ 181,849.68$ Contracts Manager 342 9 74.477135$ 12,909.37$ 154,912.44$ 96.374250$ 16,704.87$ 200,458.44$ Deputy City Attorney I 170 9 64.052365$ 11,102.41$ 133,228.92$ 82.890173$ 14,367.63$ 172,411.56$ Deputy City Attorney II 172 9 74.727808$ 12,952.82$ 155,433.84$ 96.708404$ 16,762.79$ 201,153.48$ Deputy City Clerk 178 9 57.689596$ 9,999.53$ 119,994.36$ 74.663538$ 12,941.68$ 155,300.16$ Deputy City Manager 079 9 103.546846$ 17,948.12$ 215,377.44$ 133.991942$ 23,225.27$ 278,703.24$ Deputy Fire Chief 080 9B 128.364288$ 22,249.81$ 266,997.72$ 166.129038$ 28,795.70$ 345,548.40$ Deputy Parks & Rec Director 175 9 83.674327$ 14,503.55$ 174,042.60$ 108.283615$ 18,769.16$ 225,229.92$ Deputy Public Works Director 176 9 83.822077$ 14,529.16$ 174,349.92$ 108.476423$ 18,802.58$ 225,630.96$ Development Project Manager 158
9 83.816596$ 14,528.21$ 174,338.52$ 108.467135$ 18,800.97$ 225,611.64$ Development Review Officer 144 9 81.090635$ 14,055.71$ 168,668.52$ 104.941500$ 18,189.86$ 218,278.32$ Director Of Community Developm 090 9 122.712462$ 21,270.16$ 255,241.92$ 158.806962$ 27,526.54$ 330,318.48$ Director Of Finance 087 9 122.468250$ 21,227.83$ 254,733.96$ 158.485615$ 27,470.84$ 329,650.08$ Director Of Human Resources 088 9 112.898250$ 19,569.03$ 234,828.36$ 146.100635$ 25,324.11$ 303,889.32$ Director Of Inf Technology/CIO 089 9 116.497385$ 20,192.88$ 242,314.56$ 150.766615$ 26,132.88$ 313,594.56$ Director Of Public Works 091 9 129.801519$ 22,498.93$ 269,987.16$ 167.978365$ 29,116.25$ 349,395.00$ Director Of Wtr & Sewer Utils 102 9 117.647885$ 20,392.30$ 244,707.60$ 152.244865$ 26,389.11$ 316,669.32$ Elec Div Mgr - Engineering 104Q 9 99.986250$ 17,330.95$ 207,971.40$ 129.402981$ 22,429.85$ 269,158.20$ All classifications on the Unclassifed/Elected Salary Plan are FLSA "Exempt" 2 of 5 City of Santa Clara
Unclassified/Elected Salary Plan
Effective 6/9/2024
Approved 5/28/2024
Minimum Salary Maximum Salary
Job Title Job Code Union Code Hour ly Monthly Annual Hourly Monthly Annual Elec Div Mgr - Generation 104R 9 99.986250$ 17,330.95$ 207,971.40$ 129.402981$ 22,429.85$ 269,158.20$ Elec Div Mgr - Operations 104P 9 99.986250$ 17,330.95$ 207,971.40$ 129.402981$ 22,429.85$ 269,158.20$ Elec Div Mgr - Substations 104M 9 99.986250$ 17,330.95$ 207,971.40$ 129.402981$ 22,429.85$ 269,158.20$ Elec Div Mgr - Transm, Distrib 104S 9 99.986250$ 17,330.95$ 207,971.40$ 129.402981$ 22,429.85$ 269,158.20$ Elec Div Mgr-Mkt A & P 107F 9 99.986250$ 17,330.95$ 207,971.40$ 129.402981$ 22,429.85$ 269,158.20$ Elec Division Manager 104 9 99.986250$ 17,330.95$ 207,971.40$ 129.402981$ 22,429.85$ 269,158.20$ Elec Program Manager 424 9 86.952115$ 15,071.70$ 180,860.40$ 112.519096$ 19,503.31$ 234,039.72$ Elec Util Chief Oper Officer 116 9 133.092173$ 23,069.31$ 276,831.72$ 172.239577$ 29,854.86$ 358,258.32$ Elec Util Risk Control Analyst 697 9 77.870596$ 13,497.57$ 161,970.84$ 100.776750$ 17,467.97$ 209,615.64$ Emergency Services Officer 106 9 90.512712$ 15,688.87$ 188,266.44$ 117.127269$ 20,302.06$ 243,624.72$ Environmental Programs Mgr 461 9 67.561558$ 11,710.67$ 140,528.04$ 87.427731$ 15,154.14$ 181,849.68$ Executive Assistant 187 9 56.821904$ 9,849.13$ 118,189.56$ 73.532365$ 12,745.61$ 152,947.32$ Field Foreperson 114 9 81.829673$ 14,183.81$ 170,205.72$ 105.892731$ 18,354.74$ 220,256.88$ Fire Chief 117 9B 153.565904$ 26,618.09$ 319,417.08$ 198.721904$ 34,445.13$ 413,341.56$ Fire Marshal 120 9B 116.678019$ 20,224.19$ 242,690.28$ 150.983423$ 26,170.46$ 314,045.52$ Fleet Manager 034
9 69.811038$ 12,100.58$ 145,206.96$ 90.339173$ 15,658.79$ 187,905.48$ Housing & Comm Svc Div Mgr 075 9 83.892808$ 14,541.42$ 174,497.04$ 108.572827$ 18,819.29$ 225,831.48$ Housing Development Officer 749 9 65.884096$ 11,419.91$ 137,038.92$ 85.261788$ 14,778.71$ 177,344.52$ Human Resources Div Mgr 139 9 82.735962$ 14,340.90$ 172,090.80$ 107.068904$ 18,558.61$ 222,703.32$ Information Technology Svc Mgr 112 9 77.652058$ 13,459.69$ 161,516.28$ 100.481135$ 17,416.73$ 209,000.76$ Inspection Manager 134 9 83.095846$ 14,403.28$ 172,839.36$ 107.544462$ 18,641.04$ 223,692.48$ Legal Executive Assistant 185 9 56.821904$ 9,849.13$ 118,189.56$ 73.532365$ 12,745.61$ 152,947.32$ Library Div Mgr -Support Svcs 127G 9 69.759635$ 12,091.67$ 145,100.04$ 90.287769$ 15,649.88$ 187,798.56$ Management Analyst 008 9 57.689596$ 9,999.53$ 119,994.36$ 74.663538$ 12,941.68$ 155,300.16$ Mayor MAYOR Elected 2,500.00$ 30,000.00$
Municipal Services Div Mgr 110 9 82.735962$ 14,340.90$ 172,090.80$ 107.068904$ 18,558.61$ 222,703.32$ All classifications on the Unclassifed/Elected Salary Plan are FLSA "Exempt" 3 of 5 City of Santa Clara
Unclassified/Elected Salary Plan
Effective 6/9/2024
Approved 5/28/2024
Minimum Salary Maximum Salary
Job Title Job Code Union Code Hour ly Monthly Annual Hourly Monthly Annual Park Maint & Operations Superv 131 9 68.956269$ 11,952.42$ 143,429.04$ 89.227327$ 15,466.07$ 185,592.84$ Parks & Recreation Director 132 9 113.753077$ 19,717.20$ 236,606.40$ 147.199615$ 25,514.60$ 306,175.20$ Parks Const, Mtc & Repair Mgr 130 9 68.956269$ 11,952.42$ 143,429.04$ 89.227327$ 15,466.07$ 185,592.84$ Performance Auditor I 203 9 48.074654$ 8,332.94$ 99,995.28$ 62.219596$ 10,784.73$ 129,416.76$ Performance Auditor II 204 9 57.689596$ 9,999.53$ 119,994.36$ 74.663538$ 12,941.68$ 155,300.16$ Plan Review Manager 629 9 83.989212$ 14,558.13$ 174,697.56$ 108.682096$ 18,838.23$ 226,058.76$ Planning Manager 072 9 87.588346$ 15,181.98$ 182,183.76$ 113.348135$ 19,647.01$ 235,764.12$ Police Captain 138 9A 144.246231$ 25,002.68$ 300,032.16$ 174.454212$ 30,238.73$ 362,864.76$ Police Chief 141 Elected 28,755.00$ 345,060.00$ Police Records Manager 647 9 59.424865$ 10,300.31$ 123,603.72$ 76.906558$ 13,330.47$ 159,965.64$ Power System Scheduler/Trader 674 9 74.573538$ 12,926.08$ 155,112.96$ 96.509192$ 16,728.26$ 200,739.12$ Power Trader 673 9 95.307346$ 16,519.94$ 198,239.28$ 123.348692$ 21,380.44$ 256,565.28$ Principal Accountant 148 9 74.477135$ 12,909.37$ 154,912.44$ 96.374250$ 16,704.87$ 200,458.44$ Principal Electric Utility Eng 145 9 95.236615$ 16,507.68$ 198,092.16$ 123.245827$ 21,362.61$ 256,351.32$ Principal Eng - Water & Sewer 142W 9 92.344385$ 16,006.36$ 192,076.32$ 119.505288$ 20,714.25$ 248,571.00$ Principal Eng/City Survey
or 140 9 96.961731$ 16,806.70$ 201,680.40$ 125.482442$ 21,750.29$ 261,003.48$ Principal Engineer 142 9 92.344385$ 16,006.36$ 192,076.32$ 119.505288$ 20,714.25$ 248,571.00$ Principal Financial Analyst 149 9 74.477135$ 12,909.37$ 154,912.44$ 96.374250$ 16,704.87$ 200,458.44$ Principal Planner 143 9 74.477135$ 12,909.37$ 154,912.44$ 96.374250$ 16,704.87$ 200,458.44$ Principal Power Analyst 154 9 74.477135$ 12,909.37$ 154,912.44$ 96.374250$ 16,704.87$ 200,458.44$ Principal Util Info System Mgr 146 9 95.307346$ 16,519.94$ 198,239.28$ 123.348692$ 21,380.44$ 256,565.28$ Public Information Officer 077 9 90.512712$ 15,688.87$ 188,266.44$ 117.127269$ 20,302.06$ 243,624.72$ Public Records Manager 082 9 57.689596$ 9,999.53$ 119,994.36$ 74.663538$ 12,941.68$ 155,300.16$ Purchasing Division Manager 147 9 79.650981$ 13,806.17$ 165,674.04$ 103.077635$ 17,866.79$ 214,401.48$ Recreation Manager 150 9 75.184096$ 13,031.91$ 156,382.92$ 97.293231$ 16,864.16$ 202,369.92$ Risk Manager 700 9 79.650981$ 13,806.17$ 165,674.04$ 103.077635$ 17,866.79$ 214,401.48$ All classifications on the Unclassifed/Elected Salary Plan are FLSA "Exempt" 4 of 5 City of Santa Clara
Unclassified/Elected Salary Plan
Effective 6/9/2024
Approved 5/28/2024
Minimum Salary Maximum Salary
Job Title Job Code Union Code Hour ly Monthly Annual Hourly Monthly Annual Sr Counsel for SVP 179 9 110.535231$ 19,159.44$ 229,913.28$ 142.590462$ 24,715.68$ 296,588.16$ Sr Deputy City Attorney 161 9 79.432385$ 13,768.28$ 165,219.36$ 102.801346$ 17,818.90$ 213,826.80$ Sr Elec Div Mgr 173 9 109.980346$ 19,063.26$ 228,759.12$ 142.340769$ 24,672.40$ 296,068.80$ Sr Elec Div Mgr-Mkt A&P 174A 9 109.980346$ 19,063.26$ 228,759.12$ 142.340769$ 24,672.40$ 296,068.80$ Sr Information Tech Svcs Mgr 743 9 85.088250$ 14,748.63$ 176,983.56$ 110.115346$ 19,086.66$ 229,039.92$ Sr Management Analyst 742 9 63.458365$ 10,999.45$ 131,993.40$ 82.129673$ 14,235.81$ 170,829.72$ Sr Performance Auditor 202 9 67.561558$ 11,710.67$ 140,528.04$ 87.427731$ 15,154.14$ 181,849.68$ Sr Power System Schedlr/Trader 772 9 80.152269$ 13,893.06$ 166,716.72$ 103.733192$ 17,980.42$ 215,765.04$ Street Superintendent 159 9 76.199596$ 13,207.93$ 158,495.16$ 98.617269$ 17,093.66$ 205,123.92$ Transportation Manager 171 9 93.186404$ 16,152.31$ 193,827.72$ 120.597865$ 20,903.63$ 250,843.56$ Utility Business Systems Mgr 898 9 74.355000$ 12,888.20$ 154,658.40$ 96.219981$ 16,678.13$ 200,137.56$ Utility Operations Engineer 155 9 78.494019$ 13,605.63$ 163,267.56$ 101.573712$ 17,606.11$ 211,273.32$ Water & Sewer Operations Mgr 180 9 77.150827$ 13,372.81$ 160,473.72$ 99.851250$ 17,307.55$ 207,690.60$ Water & Sewer Superintendent 029 9 69.759635$ 12,091.67$ 145,100.04$ 90.287769$ 15,649.88$ 187,798.56$ Web & Digital Media Manager 073 9 66.513981$ 11,529.09$ 138,349.08$ 86.071615$ 14,919.08$ 179,028.96$ All classifications on the Unclassifed/Elected Salary Plan are FLSA "Exempt" 5 of 5 City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
24-364 Agenda Date: 5/28/2024

REPORT TO STADIUM AUTHORITY BOARD

SUBJECT
Informational Report on Stadium Authority and Stadium Manager Meetings for the Period of January 1 to March 31, 2024

BOARD PILLAR
Enhance Community Engagement and Transparency

BACKGROUND
On August 24, 2017, the Stadium Authority approved the Harvey Rose Audit titled “Comprehensive Audit of Stadium”. Audit recommendation 1.Q states that “the Stadium Authority Board should direct the Executive Director to require that all meetings, including the date and purpose of the meetings, between Stadium Authority and Stadium Manager staff be documented and reported quarterly or annually to the Stadium Authority Board.” Staff has implemented this audit recommendation on a quarterly basis.

At the August 25, 2020 meeting, the Stadium Authority Board provided additional direction to staff to prepare minutes for all future Stadium Authority and Stadium Manager staff meetings.

DISCUSSION
In accordance with the Board approved audit recommendation, meetings between Stadium Authority and Stadium Manager staff for the period of January 1 to March 31, 2024 are listed below. The attendees and topics discussed at these meetings are included in this report as Attachment 1.

Date Meeting Purpose
01/03/2024 Weekly Accounting Status Meeting (via Teams) 01/04/2024 Introduction to Events Team (in person)
01/05/2024 Biweekly Stadium CapEx Permit Meeting (via Zoom) 01/09/2024 Naming Rights Proposal Meeting (in person)
01/10/2024 SCSA Permit Meeting (via Zoom)
01/10/2024 Jumbotron Project Meeting (via Teams)
01/10/2024 Weekly Accounting Status Meeting (via Teams) 01/11/2024 Outstanding Arbitration and Naming Rights Issues Meeting (via phone) 01/17/2024 SCSA/Guidepost/Stadium Manager Check-In (via Teams) 01/17/2024 Weekly Accounting Status Meeting (via Teams) 01/17/2024 SCSA/Stadium Manager Monthly Coordination Meeting (via Teams) 01/17/2024 Levi’s Naming Rights Meeting (in person)
01/19/2024 Levi’s Naming Rights Meeting (via Teams)
01/22/2024 Levi’s/49ers/SCSA Comms Discussion (via Zoom) 01/22/2024 Procurement Discussion (via Teams)
01/22/2024 Various Issues Meeting (via Teams)
01/24/2024 Weekly Accounting Status Meeting (via Teams) 01/25/2024 Jumbotron Project Meeting (via Teams)
01/26/2024 Biweekly Stadium CapEx Permit Meeting (via Zoom) 01/26/2024 SCSA/ManCo Budget/Finance Check-In (in person) 01/31/2024 Ticketmaster License User Agreement Discussion (via Teams) 01/31/2024 Weekly Accounting Status Meeting (via Teams) 02/09/2024 Biweekly Stadium CapEx Permit Meeting
02/14/2024 Weekly Accounting Status Meeting (via Teams) 02/21/2024 SCSA Open Budget Items (via Teams)
02/21/2024 Financial Management System Managed Services Status Meeting (via Zoom)
02/21/2024 Weekly Accounting Status Meeting (via Teams) 02/22/2024 Budget Meeting (via Zoom)
02/26/2024 Assignment and Assumption Letter Meeting (via Zoom) 02/27/2024 Shared Stadium Expenses Budget Review Meeting (via Zoom) 02/27/2024 SCSA/Stadium Manager Monthly Coordination Meeting (via Teams) 02/28/2024 Weekly Accounting Status Meeting (via Teams) 02/28/2024 Various Stadium Operations Claims and Issues Meeting (via Teams) 03/06/2024 Weekly Accounting Status Meeting (via Teams) 03/08/2024 Biweekly Stadium CapEx Permit Meeting (via Zoom) 03/08/2024 Various Stadium Operations Claims and Issues Meeting (via Teams) 03/11/2024 Janitorial Services Meeting (via Teams)
03/13/2024 Assignment and Assumption Letter Meeting (via Zoom) 03/13/2024 Weekly Accounting Status Meeting (via Teams) 03/13/2024 Arbitration Issues Meeting (via Teams)
03/18/2024 Stadium Capital Projects Update Meeting (via Teams) 03/19/2024 Arbitration Issues Meeting (via Teams)
03/22/2024 Biweekly Stadium CapEx Permit Meeting
03/26/2024 SCSA/Stadium Manager Quarterly Status Meeting (in person) 03/28/2024 Various Stadium Operational Claims and Issues Meeting (via phone) City of Santa Clara Printed on 5/24/2024Page 1 of 3
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24-364 Agenda Date: 5/28/2024
Date Meeting Purpose
01/03/2024 Weekly Accounting Status Meeting (via Teams) 01/04/2024 Introduction to Events Team (in person)
01/05/2024 Biweekly Stadium CapEx Permit Meeting (via Zoom) 01/09/2024 Naming Rights Proposal Meeting (in person)
01/10/2024 SCSA Permit Meeting (via Zoom)
01/10/2024 Jumbotron Project Meeting (via Teams)
01/10/2024 Weekly Accounting Status Meeting (via Teams) 01/11/2024 Outstanding Arbitration and Naming Rights Issues Meeting (via phone) 01/17/2024 SCSA/Guidepost/Stadium Manager Check-In (via Teams) 01/17/2024 Weekly Accounting Status Meeting (via Teams) 01/17/2024 SCSA/Stadium Manager Monthly Coordination Meeting (via Teams) 01/17/2024 Levi’s Naming Rights Meeting (in person)
01/19/2024 Levi’s Naming Rights Meeting (via Teams)
01/22/2024 Levi’s/49ers/SCSA Comms Discussion (via Zoom) 01/22/2024 Procurement Discussion (via Teams)
01/22/2024 Various Issues Meeting (via Teams)
01/24/2024 Weekly Accounting Status Meeting (via Teams) 01/25/2024 Jumbotron Project Meeting (via Teams)
01/26/2024 Biweekly Stadium CapEx Permit Meeting (via Zoom) 01/26/2024 SCSA/ManCo Budget/Finance Check-In (in person) 01/31/2024 Ticketmaster License User Agreement Discussion (via Teams) 01/31/2024 Weekly Accounting Status Meeting (via Teams) 02/09/2024 Biweekly Stadium CapEx Permit Meeting
02/14/2024 Weekly Accounting Status Meeting (via Teams) 02/21/2024 SCSA Open Budget Items (via Teams)
02/21/2024 Financial Management System Managed Services Status Meeting (via Zoom)
02/21/2024 Weekly Accounting Status Meeting (via Teams) 02/22/2024 Budget Meeting (via Zoom)
02/26/2024 Assignment and Assumption Letter Meeting (via Zoom) 02/27/2024 Shared Stadium Expenses Budget Review Meeting (via Zoom) 02/27/2024 SCSA/Stadium Manager Monthly Coordination Meeting (via Teams) 02/28/2024 Weekly Accounting Status Meeting (via Teams) 02/28/2024 Various Stadium Operations Claims and Issues Meeting (via Teams) 03/06/2024 Weekly Accounting Status Meeting (via Teams) 03/08/2024 Biweekly Stadium CapEx Permit Meeting (via Zoom) 03/08/2024 Various Stadium Operations Claims and Issues Meeting (via Teams) 03/11/2024 Janitorial Services Meeting (via Teams)
03/13/2024 Assignment and Assumption Letter Meeting (via Zoom) 03/13/2024 Weekly Accounting Status Meeting (via Teams) 03/13/2024 Arbitration Issues Meeting (via Teams)
03/18/2024 Stadium Capital Projects Update Meeting (via Teams) 03/19/2024 Arbitration Issues Meeting (via Teams)
03/22/2024 Biweekly Stadium CapEx Permit Meeting
03/26/2024 SCSA/Stadium Manager Quarterly Status Meeting (in person) 03/28/2024 Various Stadium Operational Claims and Issues Meeting (via phone)

ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California City of Santa Clara Printed on 5/24/2024Page 2 of 3
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24-364 Agenda Date: 5/28/2024
Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(5) in that it is a governmental organizational or administrative activity that will not result in direct or indirect changes in the environment.

FISCAL IMPACT
There is no fiscal impact related to this report.

COORDINATION
This report has been coordinated with the Stadium Authority Counsel and Treasurer’s Offices.

PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email [email protected] <mailto:[email protected]> .

RECOMMENDATION
Note and file the quarterly report on Stadium Authority and Stadium Manager staff meetings and corresponding summaries for the period of January 1 to March 31, 2024.

Reviewed by: Chuck Baker, Assistant City Manager
Approved by: Jovan D. Grogan, Executive Director

ATTACHMENTS

1. Stadium Authority and Stadium Manager Meeting Summaries for the Period of 1/1/24 to 3/31/24
City of Santa Clara Printed on 5/24/2024Page 3 of 3
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Weekly Accounting Status Meeting
Date: 1/3/2024; 2:30pm to 2:45pm
Teams Meeting: Tyler Cook, Brenda Lee (City/SCSA); Brent Ghan, Caitlin Ritchie (Stadium Manager)

1. Agreed Upon Procedures report work with KPMG

2. Status of Fiscal Year 2021/22 true-up for Groundskeeping in Shared Stadium Expenses

3. Stadium Builder License (SBL) monies to be transferred on January 12, 2024 Introduction to Events Team
Date: 1/4/24; 10AM to 11AM
In-Person - Levi's Stadium: Chuck Baker (City/SCSA), Brent Schoeb, Emily Eskin, Catherine Lentz, Peter Wilhelm, and Francine Hughes (Stadium Manager)

1. Met with marketing and sponsorship team to discuss the FY23/24 Marketing Plan Biweekly Stadium CapEx Permit Meeting
Date: 1/5/2024; 11:30am to 12:00pm
Zoom Meeting: Elycia Knight (SCSA), Ryan Van Maarth (ManCo)

1. Discuss
ed SCSA Budget – OpEx /CapEx due 1/31.

2. Planning meeting to discuss Jumbotron Project submission.

3. Update on the status of Verizon rights for DAS system.

Date: 1/9/2024, 1:30 p.m.

In Person Meeting – Levi’s Stadium
For Santa Clara Stadium Authority:

Jovan D. G
rogan, Executive Director
Chuck Baker, Assistant City Manager
Glen R. Googins, Stadium Authority Counsel
For Stadium Manager:

Al Guido
Jihad Beauchman
Peter Wilhelm

1. Naming Rights Proposal
SCSA Permit Meeting
Date: 1/10/2024; 11:00 am to 11:30 am
Zoom Meeting: Elycia Knight (SCSA), Ryan Van Maarth (ManCo)

1. Projects SCSA
and ManCo Projects in critical path
a. Naming Rights Si
gnage Permit Requirements
b. Video Boards Permit Requirements
c. FIFA Super Bowl Capital Improvement Projects
Jumbotron Project Meeting
Date: 1/10/24; 1:30PM to 2:30PM
Teams Meeting
: Chuck Baker, Elycia Knight, Reena Brilliot (City/SCSA), Ryan Van Maarth, and Francine Hughes
(Stadium Manager)

1. Update on current status of Jumbotron CapEx project and control room expansion proposal Weekly Accounting Status Meeting
Date: 1/10/2024; 2:30pm to 2:37pm
Teams Meeting: Brenda Lee (City/SCSA); Brent Ghan, Caitlin Ritchie (Stadium Manager)

1. Agreed Upon Procedures report work with KPMG

2. Stadium Builder License (SBL) monies to be transferred on January 12, 2024 Date: 1/11/2024, 12:00 p.m.

Phone Call
For Santa Clara S
tadium Authority:

Glen Googins, Stadium Authority Counsel
For Stadium Manager:

Jihad Beauchman

1. Outstanding Arbitration Disputes

2. Naming Rights Issues
Date: 1/17/2024, 1:00 p.m.

Teams Meeting
For Santa Clar
a Stadium Authority:

Chuck Baker, Assistant City Manager
Christine Jung, Assistant to the City Manager
Glen Googins, Stadium Authority Counsel
For Stadium Manager:

Francine Hughes
Jeremy Vaux
For Guidepost Solutions:

Jim Hayes

1. Check -in with Guidepost and Stadium Manager Regarding Security Assessment Weekly Accounting Status Meeting
Date: 1/17/2024; 2:30pm to 2:40pm
Teams Meeting: Tyler Cook, Brenda Lee (City/SCSA); Brent Ghan, Caitlin Ritchie (Stadium Manager)

1. Stadium Builder License (SBL) deposit to US Bank

2. Fiscal Year 2021/22 true-up of $1,493.30 for Groundskeeping in Shared Stadium Expenses to be transferred on January 19, 2024

3. Stadium Manager aiming to have Financial Management System (FMS) payroll request completed before March 31, 2024

MEETING MINUTES FOR

STADIUM AUTHORITY/STADIUM MANAGER

MONTHLY COORDINATION MEETING
January 17, 2024 | 3:00 p.m. – 4:00 p.m.

Microsoft Teams Meeting

ATTENDEES
City/Stadium Authority
• Chuck Baker, Assistant City
Manager/ Assistant Executive
Director
• Christine Jung, Assistant to the
City Manager/Assistant to the
Executive Director
49ers/Stadium Manager
• Francine Melendez Hughes,
Executive Vice President &
General Manager
• Peter Wilhelm, Chief Financial
Officer

MEETING MINUTES

1. Parking
Spots and Parking Access (Stadium Authority)
The City/Stadium Authority and Stadium Manager shared their respective updates related to the status of pending agreements for Yellow Lot 1 (public vehicle access) and Yellow Lot 3 (parking). The City planned to execute the agreement for Yellow Lot 1 the following day.

2. Jumbotron (Stadium Authority)
The jumbotron is a StadCo capital project that is being funded by StadCo. This item was discussed with the following item (Levi’s Stadium Naming Rights Signage).

3. Levi’s Stadium Naming Rights Signage (Stadium Authority) The Stadium Authority and Stadium Manager discussed the Levi’s Stadium Naming Rights signage in relation to the proposed extension of the Stadium Authority’s Naming Rights Agreement with Levi Strauss & Co. The Stadium Authority asked questions regarding maintenance and repairs costs related to the existing and proposed Naming Rights signage enhancement, including existing FY 2023/24 CapEx funding and potential cost sharing for the proposed Naming Rights signage enhancement. The Stadium Manager confirmed that no FY 2023/24 CapEx funds had been expended on maintenance for the existing signage. It was agreed that the proposed extension of the Naming Rights Agreement would go on the January 30, 2024 meeting agenda for the Stadium Authority Board’s consideration.

4. City/Stadium Authority Participation in Key Upcoming Solicitations – Follow Up (Stadium Authority)
As a follow up from prior discussions regarding the upcoming janitorial and event security solicitations, the Stadium Manager shared that their Director of Procurement would share a timeline for the Request for Proposals (RFP) and the RFPs for the City and Stadium Authority’s review.

5. Additional Endzone Field Level Seats – Follow Up (Stadium Authority) As a follow up from prior discussions regarding the Stadium Manager and StadCo’s proposal to move forward with adding SBLs to additional field seats, the Stadium Authority confirmed that the Stadium Authority Counsel Office’s direction was that SBLs for any seats above the 70 field seats that were approved by the Stadium Authority Board in June 2022 would require additional Board approval. The Stadium Authority and Stadium Manager discussed the requirement for the NFL’s approval of the field seats and number of seats being added. The Stadium Manager shared that a building permit was submitted for additional field seats.

6. Complaints Discussion (Stadium Authority)
The Stadium Authority shared recent complaints related to ADA seating and season ticket price increases. The Stadium Manager explained their process for seating ADA patrons and clarified that they cannot ask someone who is requesting ADA seating to show proof of their disability. They also shared their process for getting ADA patrons and mobility groups to the gate or seat. The Stadium Manager described their internal process for handling season holder ticket complaints and shared information about the benefits that attributed to the recent price increases. The Stadium Authority and Stadium Manager confirmed that the current process for sending/forwarding complaints should be continued.

Levi's Naming Rights Meeting
Date: 1/17/24
; 6:00PM to 8:30PM
In-Person - Selby’s Restaurant: Chuck Baker (City/SCSA), Al Guido (49ers), Chip Bergh, and Michelle Gass
(Levi’s)

1. Discuss specific Levi’s naming rights deal points
Date: 1/19/24 2:30pm-3:00pm
Meeting Title: Levi’s Naming Rights
Meeting Location: Teams link provided by Janine De la Vega Attendees:
• From 49ers
- Ellie Caple (Director Communications and Public Affairs), Josh Stephens (Manager Communications and Public Affairs)
• From City/SCSA - Janine De la Vega, Michelle Templeton, Chuck Baker Discussion: Potential for a joint press release on the Levi’s Stadium Naming Rights Agreement pending Board approval.

Date: 1/22/24 11:30am-Noon
Meeting Title: Levi’s/49ers/SCSA Comms Discussion
Meeting Location: Zoom link provided by Ellie Caple
Attendees:
• From 49ers - From 49ers - Ellie Caple (Director Communications and Public Affairs), Josh Stephens (Manager Communications and Public Affairs)
• From Levi’s – Marie-Helene Azar (Director of Commuinations Levi’s Strauss & Co.) • From City/SCSA - Chuck Baker (Assistant City Manager), Michelle Templeton (Acting Assistant City Manager), Janine De la Vega (City Communications Director), Discussion: Potential for a joint press release on the Levi’s Stadium Naming Rights Agreement
pending Board approval including Levi’s staff.

Procurement Discussion
Date: 01/22/2024; 3:00pm to 3:15pm
Teams Meeting: Grace Dougherty (City/SCSA) and Jenti Vandertuig (Stadium Manager)

1. Discuss upcoming agreement extensions that will go to the Board for approval Date: 1/22/2024, 5:00 p.m.

Teams Meeting:

For Santa Clara Stadium Authority:

Glen R. Googins, Stadium Authority Counsel
For Stadium Manager:

Jihad Beauchman

1. Touch Base Regarding Various Issues, Including Proposed Naming Rights Extension and Stadium Operations
Weekly Accounting Status Meeting
Date: 1/24/2024; 2:30pm to 2:44pm
Teams Meeting: Linh Lam, Tyler Cook, Brenda Lee (City/SCSA); Brent Ghan, Caitlin Ritchie (Stadium Manager)

1. Status of outstanding public safety costs

2. Fiscal Year 2022/23 Shared Expense payroll review
Jumbotron Project Meeting
Date: 1/25/24: 11AM to 12PM
Teams Meeting: Chuck Baker, Elycia Knight, Reena Brilliot (City/SCSA), Ryan Van Maarth, and Francine Hughes (Stadium
Manager)

1. Review planning/permitting
process with Stadium Manager staff
Biweekly Stadium CapEx Permit Meeting
Date: 1/26/2024; 11:00 am to 11:30 am
Zoom Meeting: Elycia Knight (SCSA), Ryan Van Maarth (ManCo) StadCo

1. FIFA Bowl Modifications Field Seats – Confirmation of submittal to Planning. Redirection for building permit intake.
a. Need to generate drawings for a building permit.
b. Feb 1st, 2025, to begin renovations

2. Video Boards – (weekly meetings scheduled)
a. David J Wright - Shannon George worked on the original EIR. b. ManC o working on preliminary CEQA analysis.
c. Integrator is studying the media room. There will be a deferred submittal for the equipment layout.

3. Installation of (20) additional Verizon 5G radios
SCSA – CapEx

1. Stadium canopies and cameras

2. Kitchen equipment
Budget items going before the Board.

1. Replace Furniture: Going before the Board on 2/20.

2. Aesthetic Improvements – Premium Areas and Special Events: Budget amendment before Board 12/12/2023
Other

1. Anticipated dates for critical path permit submittals.

2. Anticipated budget amendment items to be submitted.

3. SCSA CapEx tracking reconciliation.

4. FY23 Budget.

5. Any other permits in the queue.

Date: 01/26/2024; 2:30pm to 4:00pm
In Person Meeting at Starbucks, 2030 Wyatt Drive, Santa Clara: Kenn Lee (City/SCSA); Jeff Fong, Alex Acton (Stadium Manager)

1. Fiscal Year 2024/25 Budget

2. Trust Budget
Date: 1/31/2024, 1:00 p.m.

Teams Meeting
For Santa Clar
a Stadium Authority:

Elizabeth Klotz, Assistant City Attorney
For Stadium Manager:

Jihad Beauchman

1. Ticketmaster Licensed User Agreement Discussion
Weekly Accounting Status Meeting
Date: 1/31/2024; 2:30pm to 2:41pm
Teams Meeting: Tyler Cook, Brenda Lee (City/SCSA); Brent Ghan, Caitlin Ritchie (Stadium Manager)

1. Status of outstanding public safety cost and parking fees – Fiscal Year 2022/23 invoices to be paid by February 2, 2024

2. December bank reconciliations
Biweekly Stadium CapEx Permit Meeting
Date: 2/9/2024; 11:00 am to 11:30 am
Zoom Meeting: Elycia Knight (SCSA), Ryan Van Maarth (ManCo)

1. Open Submittals in Review
a. SCSA
b. ManCo

2. Reoccurring M
eeting Status
a. Devcon
b. Building
c. Video Boards
/ Naming Rights

3. Anticipated Submittals
a. Level 700 Expansion
b. Field Lights
c. Naming Rights

4. Other Misc.
a. ManCo to provide updated schedule
b. ManCo to
provide breakout schedule for Video Boards
c. ManCo to
provide breakout schedule for projects in critical path d. Site walk
to be scheduled
e. Facilities Condition Assessment
Weekly Accounting Status Meeting
Date: 2/14/2024; 2:30pm to 2:50pm
Teams Meeting: Tyler Cook (City/SCSA); Brent Ghan, Caitlin Ritchie (Stadium Manager)

1. Status of 3rd Quarter Non-NFL Events and Stadium Builder License reports

2. Trust Budget update for year-end reserves

3. Status of outstanding public safety costs for Fiscal Year 2023/24

4. Capital expenditure cutoff date for year-end close

5. Agreed Upon Procedures report work with KPMG
SCSA Budget Open Items
Date: 2/21/24; 11AM to 1PM
Teams Meeting: J
ōvan Grogan, Chuck Baker (City/SCSA), Peter Wilhelm, and Francine Hughes (Stadium Manager)

1. Get clarity on answers to FY24/25 open budget items
Financial Management System
Managed Services Status Meeting
Date: 2/21/202
4; 2:00pm to 2:19pm
Zoom Meeting: Tyler Cook, Brenda Lee, David Presley (City/SCSA); Brent Ghan (Stadium Manager); Chad
Hundley, Rebecca Bunas, Giles Zollar (Armanino)

1. Available
system review, available support hours and academy courses

2. Smartview access for SCSA team

3. ManCo open support tickets with InTwo

4. Bulk import for processing vendor refunds using Integration Manager

5. Coupa/Scribe to load AP invoices into Great Plains

6. System upgrade for Great Plains to upgrade from 18.4 to 18.6

7. SCSA trainings using available academy courses
Weekly Accounting Status Meeting
Date: 2/21/2024; 2:30pm to 2:42pm
Teams Meeting: Tyler Cook, Brenda Lee (City/SCSA); Brent Ghan, Caitlin Ritchie (Stadium Manager)

1. Monthly Operating and Maintenance and year-end reserve deposit to US Bank

2. Status of 3rd Quarter Non-NFL Events and Stadium Builder License reports

3. Agreed Upon Procedures report work with KPMG

4. Naming Rights Fee Credit reimbursement to SCSA
Date: 02/22/2024; 1:00pm to 1:30pm
Zoom Meeting: Kenn Lee (City/SCSA); Jeff Fong, Alex Acton (Stadium Manager)

1. Fiscal Year 2024/25 Budget
Date: 2/26/2024, 11:00 a.m.

Zoom:

For Santa Clara S
tadium Authority:

Jovan D. Grogan, Executive Director
Christine Jung, Assistant to the City Manager
Glen Googins, Stadium Authority C
ounsel
Elizabeth Klotz, Assistant City Attorney
For Stadium Manager
:

Jihad Beauchman
For Bay Area H
ost Committee:

Zaileen Janmohamed
Ruth Shikada
Becca Smith
Sonia Nayak
Matt Richards
Robert Weikert

1. Process, Terms and Issues for World Cup 2026 Assignment and Assumption Agreement Shared Stadium Expenses Budget Review Meeting
Date: 02/27/2024; 10:00am to 12:00pm
Zoom Meeting: Kenn Lee, Linh Lam, Tyler Cook, Chuck Baker (City/SCSA); Alex Acton, Chris Steele, Harshil Bhavsar, Brent Ghan (Stadium Manager)

1. Team Introductions

2. Overview of Shared Stadium Expenses Compensation for Fiscal Year (FY) 2024/25 Budget
a. Methodology for Shared Stadium Expenses Compensation and the assumptions behind general annual salary increase

3. Sampling of Shared Stadium Expenses Compensation for FY 2024/25

4. Overview and Sampling of Other General and Administrative Expenses for FY 2024/25

MEETING MINUTES FOR

STADIUM AUTHORITY/STADIUM MANAGER

MONTHLY COORDINATION MEETING
February 27, 2024 | 3:00 p.m. – 4:00 p.m.

Microsoft Teams Meeting

ATTENDEES
City/Stadium Authority
• Chuck Baker, Assistant City
Manager/ Assistant Executive
Director
• Christine Jung, Assistant to the
City Manager/Assistant to the
Executive Director
• Elycia Knight, Development
Project Manager
49ers/Stadium Manager
• Francine Melendez Hughes,
Executive Vice President &
General Manager
• Peter Wilhelm, Chief Financial
Officer

MEETING MINUTES

1. Exhibit
C (Stadium Manager)
The Stadium Manager referred the Stadium Authority to look at Stadium Lease Exhibit C for the Stadium site plan. There was discussion about the ambiguity of a few proposed Capital Expense (CapEx) projects and whether they were more operational in nature than capital.

2. Response to Q4 2022 Proposal (Stadium Manager)
Confidential discussion.

3. Discussion on the Tuesday (2/27) Council Meeting (Stadium Manager) The Stadium Manager shared that two representatives would be present via Zoom to respond to questions for the February 27, 2024 Council/Board meeting, in which included a Study Session on the proposed Stadium Authority FY 2024/25 Budget.

4. Marketing Plan (Stadium Authority)
New Stadium Authority staff is learning the Stadium Manager’s business model for Non-NFL Events and would like to sit down with key Stadium Manager staff to learn more about ticketed Non-NFL Event strategies and bookings.

5. Community Grants (Stadium Authority)
The Stadium Manager shared that StadCo was still working on the approach for community grants that were connected to the recent Amendment to the Naming Rights Agreement and would provide updates at a later time.

6. Facilities Condition Assessment
The Stadium Authority and Stadium Manager discussed having Stadium Authority staff participate in the Facilities Condition Assessment. The Stadium Manager also provided updates on the solicitation process and what the assessment would entail (walk through, report, etc.).

7. SBLs (Stadium Authority)
The Stadium Authority confirmed that the proposed field seat SBLs that were previously discussed would require Stadium Authority Board approval. The Stadium Authority and Stadium Manager discussed outstanding issues related to the request, including number of additional seats and proposed pricing.

8. Guidepost Invoicing (Stadium Authority)
The Stadium Manager provided an update that they were ready to schedule time with Guidepost Solutions to go over a pending request. The Stadium Authority and Stadium Manager also discussed and agreed on a process for which StadCo will pay for its respective portion of the Guidepost Agreement.

Weekly Accounting Status Meeting
Date: 2/28/2024; 2:30pm to 2:43pm
Teams Meeting: Linh Lam, Tyler Cook, Brenda Lee (City/SCSA); Brent Ghan, Caitlin Ritchie (Stadi
um Manager)

1. Financial
Management System (FMS) payroll selections

2. Status of 3rd Quarter Stadium Builder License report

3. 4th Quarter SBL monies to be transferred on March 8, 2024

4. Status of outstanding public safety costs for Fiscal Year 2023/24

5. January bank statements uploaded to One Drive
Date: 2/28/2024, 4:00 p.m.

Via Teams:

For Santa Clara Stadium Authority:

Glen Googins, Stadium Authority Counsel
For Stadium Manager:

Jihad Beauchman

1. Various Stadium Operations and Claims Issues
Weekly Accounting Status Meeting
Date: 3/6/2024; 2:30pm to 2:40pm
Teams Meeting: Tyler Cook, Brenda Lee (City/SCSA); Brent Ghan, Caitlin Ritchie (Stadium Manager)

1. Status of outstanding public safety costs for Fiscal Year 2023/24

2. Status of payment for Naming Rights Fee Credit invoice

3. 4th Quarter Stadium Builder License monies to be transferred on March 8, 2024

4. Capital expenditure cutoff date for year-end close
Biweekly Stadium CapEx Permit Meeting
Date: 3/8/2024; 11:00 am to 11:30 am
Zoom Meeting: Elycia Knight (SCSA), Ryan V an Maarth (ManCo)

1. Incomi
ng submittals
• Level 100 ADA Modifications
• Level 100 Club Access
• Bowl Modifications
• Video Board/Naming Rights (progress)
• South Field Seats Corners - anticipated end of next week • LED Field Lights (April)

2. Submittals Under Review
• Yahoo Wings (demo)
o 3/18 comments back to StadCo
o Mobilization late March /early April
• Yahoo building permit
o Resubmittal next week 3/12
o Health department permit to go in.

3. Site Walk

4. Meeting Cadence
Date: 3/8/2024, 4:00 p.m.

Via Teams:

For Santa Clara Stadium Authority:

Glen Googins, Stadium Authority Counsel
For Stadium Manager:

Jihad Beauchman

1. Various Stadium Operations and Claims Issues
Janitorial Services
Date: 03/11/2024; 6:30pm to 7:00pm
Teams Meeting: Chuck Baker, Christine Jung (City/SCSA), and Francine Melendez Hughes (Stadium Manager)

1. Procurement and operational questions regarding janitorial services agreement

2. Upcoming Request for Proposal process for janitorial services Date: 3/13/2024, 11:00 a.m.

Via Zoom:

For Santa Clara Stadium Authority:

Jovan D. Grogan, Executive Director
Chuck Baker, Assistant City Manager
Christine Jung, Assistant to the City Manager
Glen Googins, Stadium Authority
Counsel
Elizabeth Klotz, Assistant City Attorney
For Stadium Ma
nager:

Jihad Beauchman
For Bay Area H
ost Committee:

Zaileen Janmohamed
Sonia Nayak
Matthew Richards
Ruth Shikada
Becca Smith
Robert Weikert

1. Assignment and Assumption Agreement Issues
Weekly Accounting Status Meeting
Date: 3/13/2024; 2:30pm to 2:39pm
Teams Meeting: Linh Lam, Tyler Cook, Brenda Lee (City/SCSA); Brent Ghan, Caitlin Ritchie (Stadium Manager)

1. Request for facility fee to be broken out in the 45-Day Non-NFL reports

2. Status of supporting backup in the Financial Management System for Fiscal Year 2023/24 – data through September 2023
Date: 3/13/2024, 5:00 p.m.

Via Teams:

For Santa Clara Stadium Authority:

Glen Googins, Stadium Authority Counsel
For Stadium Manager:

Jihad Beauchman

1. Arbitration Issues
Stadium Capital Projects Update Meeting
Date: 3/18/24
; 9AM to 10AM
Teams: Chuck Baker, Elycia Knight, Reena Brilliot, Nimisha Agrawal, Armand Lobao (City/SCSA Staff),
Francine Hughes, Ryan Van Maarth, Joseph Crummett, and Shannon George (Stadium Manager)

1. Update on current and planned stadium capital projects Date: 3/19/2024, 3:00 p.m.

Via Teams:

For Santa Clara Stadium Authority:

Glen Googins, Stadium Authority Counsel
For Stadium Manager:

Jihad Beauchman

1. Arbitration Issues
Biweekly Stadium CapEx Permit Meeting
Date: 3/22/2024; 11:00 am to 11:30 am
Zoom
Meeting: Elycia Knight (SCSA), Ryan V an Maarth (ManCo)

1. Incomi
ng submittals
• Bowl Modifications anticipated intake 4/30/24.
• LED Video Boards anticipated intake 4/30/24 (Architectural / Mechanical, Engineering and Plumbing (MEP))
• Tech Room anticipated intake 4/30/24.
o Deferred submittal for catwalk and screen technology
• Naming Rights Signage x 4 (Exterior Façade, Video Board and Suite Tower) anticipated intake 4/30/24.
• Field Lights - Public Funds (Prevailing wage) anticipated intake 4/30/24.

MEETING MINUTES FOR

STADIUM AUTHORITY/STADIUM MANAGER

QUARTERLY STATUS MEETING
March 26, 2024 | 3:30 p.m. – 5:00 p.m.

Santa Clara City Hall, CMO Staff Conference Room

ATTENDEES
City/Stadium Authority
• Jōvan D. Grogan, City
Manager/Executive Director
• Chuck Baker, Assistant City
Manager/Assistant Executive
Director
• Christine Jung, Assistant to the
City Manager/Assistant to the
Executive Director
49ers/Stadium Manager
• Francine Melendez Hughes,
Executive Vice President &
General Manager
• Peter Wilhelm, Chief Financial
Officer

MEETING MINUTES

1. Quarterly Status Meeting Updates from Stadium Manager (Required by Management Agreement)
a. Financial Performance of Past Non-NFL Events
b. Status of Future Non-NFL Events
i. Booked Events
ii. Pipeline E vents
The Stadium Manager provided an update that reconciliation for the FY 2023/24 Non- NFL Events will occur in the May or June timeframe. Stadium Authority and Stadium Manager discussed scheduling separate meetings to discuss review previous and upcoming ticketed and non-ticketed Non-NFL Events and who would participate in those meetings, which will include the Executive Director’s Office. c. Private Parking Agreements
i. Executed Private Parking Agreements
ii. Ongoing Negotiations for Private Parking Agreements The Stadium Manager provided an update on the Stadium Authority’s prior request related to the Stadium Manager’s off-site parking agreements and would complete the request in the upcoming weeks. The Stadium Authority and Stadium Manager also discussed the number of required parking spaces and how future development in the area may impact parking availability for events, which the Stadium Authority agreed to keep the Stadium Manager in the loop about.

2. Stadium Operations Oversight Improvements (Stadium Authority) a. Community Outreach & Engagement (Requests Timing, Board Meeting Appearance)
b. Marketing Plan KPIs
c. SOPs/Best Practices
The Stadium Authority and Stadium Manager acknowledged processes that have improved over time due to communication and close coordination and discussed other areas that both sides would further open lines of communication, partner, and collaborate on such as community outreach/engagement, especially for the neighborhood adjacent to the Stadium, and the Marketing Plan. There was also discussion regarding the Stadium Manager making quarterly appearances at Stadium Authority Board meetings.

3. Stadium Builder’s Licenses (SBLs) (Stadium Authority and Stadium Manager) a. Approval Status/Protocols
b. Staffing Levels and Roles
c. Pricing Methodology
d. End Zone Seats
The Stadium Manager confirmed that the total number of field seats being added to the existing 70 field seats was 24, bringing the total number of field seats to 94 (47 each in the North and South end zones). The Stadium Authority and Stadium Manager agreed that a separate workstream was required to discuss and coordinate the proposal to assign SBLs to the additional 24 field seats for the Stadium Authority Board’s consideration at the April 23 or May 7, 2024 Board meeting.

4. Settlement (Stadium Manager)
Confidential discussion.

5. Facility Conditions Assessment (Stadium Manager)
The Stadium Manager provided updates on the Facility Conditions Assessment solicitation process. The Stadium Authority and Stadium Manager discussed the scope of work and the Stadium Authority’s participation in the assessment.

6. Foundation (Stadium Manager)
The Stadium Manager shared that a proposal was provided to City Attorney Glen Googins regarding the grant funds in connection with the Naming Rights Agreement extension that would be provided through the Forty Niners’ Foundation.

7. 24/25 Budget (Stadium Manager)
This item was not discussed during the meeting.

8. Inventory (Stadium Manager)
The Stadium Manager previously provided the Stadium Authority with inventory list of salvaged assets that they would like to sell. Those items are in storage and they plan to start selling items in the next 90 days. Due to recent transition of staff, the Stadium Authority no longer has the inventory list and the Stadium Manager will reshare the inventory list.

9. Security RFP (Stadium Manager)
The Stadium Authority and Stadium Manager discussed the timeline for the Event Security Services Request for Proposals (RFP), including the City and Stadium Authority’s review of the draft RFP (early April), release of the RFP (April), evaluation process with the City’s Police Department’s participation (May), and anticipated recommendation to the Stadium Authority Board (July).

10. Video
Control Room – 8th Floor (Stadium Manager)
The Stadium Authority and Stadium Manager discussed this capital project, including costs and labor, that is connected to the Video Board Enhancement project. The Video Board Enhancement project is a StadCo project and StadCo will be responsible for the costs.

11. Miscellaneous Items, If Needed
No additional items were discussed.

Date: 3/28/2024, 3:00 p.m.

Phone Call:

For Santa Clara Stadium Authority:

Glen Googins, Stadium Authority Counsel
For Stadium Manager:

Jihad Beauchman

1. Various Stadium Operational and Claims Issues
City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
24-401 Agenda Date: 5/28/2024

REPORT TO STADIUM AUTHORITY BOARD

SUBJECT
Action on Amendment No. 1 to the Agreement with KPMG LLP for Auditing and Consulting Services for the Santa Clara Stadium Authority

COUNCIL PILLAR
Ensure Compliance with Measure J and Manage Levi’s Stadium

BACKGROUND
The Credit Agreement, entered into between the Santa Clara Stadium Authority (Stadium Authority), Stadium Funding Trust (FinanceCo), and Goldman Sachs Bank USA on March 28, 2012, requires that the Stadium Authority file audited annual financial statements within 180 days after the end of each fiscal year. It further requires that the financial statements be audited by a nationally recognized independent certified public accounting (CPA) firm (also known as the "Big Four") selected by the Stadium Authority.

Section 8.3.3 of the Amended and Restated Stadium Lease Agreement (Stadium Lease) between the Stadium Authority and Forty Niners SC Stadium Company LLC (StadCo or Tenant) dated June 19, 2013, requires the Stadium Authority to furnish (or cause the Forty Niners Stadium Management Company LLC to furnish) to the Tenant a Statement of Operations within 90 days following each lease year. The Statement of Operations shall be prepared by a qualified, third party independent certified public accountant selected by Landlord and approved by Tenant, of the following: Stadium Authority Revenue, Tenant's Proportionate Share, Shared Stadium Expenses, the amount of Tenant's payments for Estimated Shared Stadium Expenses, Stadium Authority Expenses, Capital Expenditures, Net Income from Non-NFL Events, and distributions to and from the Operating Expense Reserve, Stadium Capital Expenditure Reserve and Renovation/Demolition Reserve. This reporting requirement was also noted in the Harvey Rose Measure J Audit under audit finding item

1.I.

In addition, Section 8.6.3 of the Stadium Lease allows for the Stadium Authority to conduct an audit of the Stadium Records within 180 days following the Stadium Authority's receipt of any Annual Statement of Stadium from the Tenant. The Stadium Authority desires to have an independent CPA review of the Shared Stadium Expenses between the Stadium Authority and StadCo.

DISCUSSION
On June 25, 2021, the Stadium Authority entered into an agreement with KPMG to provide audit services. The current agreement with KPMG has a term of five years through March 31, 2026 and includes annual financial audit and agreed upon procedure services on the Shared Stadium Expenses. The agreement’s maximum compensation of $754,554 covers these services. Since the execution of this agreement, other finance-related ad hoc projects have been identified which require City of Santa Clara Printed on 5/24/2024Page 1 of 2
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24-401 Agenda Date: 5/28/2024
KPMG’s expertise and services. Therefore, staff is seeking authorization to execute Amendment No. 1 to the Agreement to increase the compensation by $100,000 for a revised not-to-exceed amount of $854,554. The additional funding will cover for these new ad hoc projects identified.

ENVIRONMENTAL REVIEW
The action being considered does not constitute a "project" within the meaning of a California Environmental Quality Act ("CEQA") pursuant to the CEQA Guidelines section 15378(a) as it has no potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment.

FISCAL IMPACT
The proposed Amendment No. 1 to the Agreement with KPMG will increase the not-to-exceed compensation by $100,000 to a total of $854,554. The cost of the fiscal year 2023/24 audit and services are budgeted in fiscal year 2024/25 Stadium Authority Operating Budget. Appropriations in future year will be requested and approved through the annual budget process.

COORDINATION
This report has been coordinated with the Stadium Authority Counsel and Executive Director.

PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email [email protected] <mailto:[email protected]> or at the
public information desk at any City of Santa Clara public library.

RECOMMENDATION
Authorize the Executive Director or designee to execute an Amendment No. 1 to the Agreement with KPMG LLP for audit and consulting services to increase the compensation by $100,000 from $754,554 to $854,554 in a final form approved by the City Attorney.

Reviewed by: Kenn Lee, Treasurer
Approved by: Jovan D. Grogan, Executive Director

ATTACHMENTS

1. Original Professional Services Agreement with KPMG LLP

2. Amendment No. 1 to the Professional Services Agreement with KPMG LLP City of Santa Clara Printed on 5/24/2024Page 2 of 2
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EBIX Insurance No. *S200002724

AGREEMENT FOR SERVICES

BETWEEN THE

SANTA CLARA STADIUM AUTHORITY AND

KPMG LLP

PREAMBLE
This Agreement is entered into between the Santa Clara Stadium Authority, a joint powers agency created pursuant to Section 6532 of the California Government Code, with its primary business address at 1500 Warburton Avenue, Santa Clara, California 95050 ("Authority"), and KPMG LLP, a Delaware registered limited liability partnership, with a place of business located at 55 Second Street, Suite 1400, San Francisco, California 94105, (Contractor). Authority and Contractor may be referred to individually as a "Party" or collectively as the "Parties" or the "Parties to this Agreement."

RECITALS
A. Authority desires to secure the services more fully described in this Agreement, at Exhibit A, entitled "Scope of Services";
B. Contractor represents that it, and its subcontractors, if any, have the professional qualifications, expertise, necessary licenses and desire to provide certain goods and/or required services of the quality and type which meet objectives and requirements of Authority; and,
C. The Parties have specified herein the terms and conditions under which such services will be provided and paid for.

The Parties agree as follows:

AGREEMENT TERMS AND CONDITIONS

1. AGREEMENT DOCUMENTS
The documents forming the entire Agreement between Authority and Contractor shall consist of these Terms and Conditions and the following Exhibits, which are hereby incorporated into this Agreement by this reference:

Exhibit A - Scope of Services
Exhibit B - Schedule of Fees
Exhibit C - Insurance Requirements
This Agreement, including the Exhibits set forth above, contains all the agreements, representations and understandings of the Parties, and supersedes Agreement with KPMG LLP
Rev. 07-01-18

Page 1 ends

and replaces any previous agreements, representations and understandings, whether oral or written. In the event of any inconsistency between the provisions of any of the Exhibits and the Terms and Conditions, the Terms and Conditions shall govern and control.

2. TERM OF AGREEMENT
Unless otherwise set forth in this Agreement or unless this paragraph is subsequently modified by a written amendment to this Agreement, the term of this Agreement shall begin on the Effective Date of this Agreement and terminate on March 31, 2026.

3. SCOPE OF SERVICES & PERFORMANCE SCHEDULE
Contractor shall perform those Services specified in Exhibit A within the time stated in Exhibit A. Time is of the essence.

4. WARRANTY
Contractor expressly warrants that all materials and services covered by this Agreement shall be performed in accordance with the applicable professional standards.

5. QUALIFICATIONS OF CONTRACTOR - STANDARD OF CARE
Contractor represents and maintains that it has the experience in the professional calling necessary to perform the Services, and its duties and obligations, expressed and implied, contained herein, and Authority expressly relies upon Contractor's representations regarding its skills and knowledge.

Contractor shall perform such Services and duties in conformance to and consistent with the professional standards.

6. COMPENSATION AND PAYMENT
In consideration for Contractor's complete performance of Services, Authority shall pay Contractor for all materials provided and Services rendered by Contractor in accordance with Exhibit B, entitled "SCHEDULE OF FEES." The maximum compensation of this Agreement is seven hundred fifty-four thousand five hundred and fifty-four dollars, subject to budget appropriations, which includes all payments that may be authorized for Services and for expenses, supplies, materials and equipment required to perform the Services.

7. TERMINATION
A. Termination for Convenience. Authority shall have the right to terminate this Agreement, without cause or penalty, by giving not less than Thirty (30) days' prior written notice to Contractor.

Agreement with KPMG LLP
Rev. 07-01-18

Page 2 ends

B. Termination for Default. If Contractor fails to perform any of its material obligations under this Agreement, in addition to all other remedies provided by law, Authority may terminate this Agreement immediately upon written notice to Contractor, after providing reasonable notice and opportunity to cure.

C. Upon termination, each Party shall assist the other in arranging an orderly transfer and close-out of services in accordance with professional standards. Contractor may retain a copy of all information necessary to comply with its applicable professional standards and contractual obligations. Upon termination, Contractor shall discontinue further services as of the effective date of termination, and Authority shall pay Contractor for all Services satisfactorily performed up to such date.

8. ASSIGNMENT AND SUBCONTRACTING
Authority and Contractor bind themselves, their successors and assigns to all covenants of this Agreement. This Agreement shall not be assigned or transferred without the prior written approval of Authority. Contractor shall not hire subcontractors without express written permission from Authority.

Contractor shall be as fully responsible to Authority for the acts and omissions of its subcontractors, and of persons either directly or indirectly employed by them, as Contractor is for the acts and omissions of persons directly employed by it.

9. NO THIRD PARTY BENEFICIARY
This Agreement shall not be construed to be an agreement for the benefit of any third party or parties and no third party or parties shall have any claim or right of action under this Agreement for any cause whatsoever.

10. INDEPENDENT CONTRACTOR
Contractor and all person(s) employed by or contracted with Contractor to furnish labor and/or materials under this Agreement are independent contractors and do not act as agent(s) or employee(s) of Authority. Contractor has full rights to manage its employees in their performance of Services under this Agreement.

11. CONFIDENTIALITY OF MATERIAL
All ideas, memoranda, specifications, plans, manufacturing procedures, data, drawings, descriptions, documents, discussions or other information developed or received by or for Contractor and all other written information submitted to Contractor in connection with the performance of this Agreement shall be held confidential by Contractor and, except as permissible under applicable professional standards or use other permitted by this Agreement, shall not, without the prior written consent of Authority, be used for any purposes other than the performance of the Services nor be disclosed to an entity not connected Agreement with KPMG LLP
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with performance of the Services. Nothing furnished to Contractor which is otherwise known to Contractor or becomes generally known to the related industry shall be deemed confidential.

12. OWNERSHIP OF MATERIAL
All deliverables under this Agreement shall be the property of Authority but Contractor may retain and use copies thereof. Authority shall not be limited in any way or at any time in its use of said material. No ownership rights of the Authority's information shall transfer to the Contractor. Contractor's working papers shall remain the Contractor's exclusive property. Contractor retains ownership rights of all its pre-existing property.

13. RIGHT OF AUTHORITY TO INSPECT RECORDS OF CONTRACTOR Authority, through its authorized employees, representatives or agents, who are subject to our consent, shall have the right during the term of this Agreement and for four (4) years from the date of final payment for goods or services provided under this Agreement, to audit the timekeeping and expense records of Contractor for the purpose of verifying any and all charges made by Contractor in connection with Contractor compensation under this Agreement, including termination of Contractor. Contractor agrees to maintain sufficient timekeeping and expense records to establish the correctness of all charges submitted to Authority. Any expenses not so recorded shall be disallowed by Authority.

Contractor shall bear the cost of the audit if the audit determines that there has been a substantial billing deviation in excess of five (5) percent adverse to the Authority.

Contractor shall submit to Authority any and all reports concerning its performance under this Agreement that may be requested by Authority in writing.

Contractor agrees to assist Authority in meeting Authority's reporting requirements to the State and other agencies with respect to Contractor's Services hereunder.

14. HOLD HARMLESS/INDEMNIFICATION
A. To the extent permitted by law, Contractor agrees to protect, defend, hold harmless and indemnify Authority, its governing board, commissions, officers, employees, volunteers and agents from and against any claim, injury, liability, loss, cost, and/or expense or damage, including all costs and reasonable attorney's fees in providing a defense to any such claim arising out of, pertaining to, or relating to the negligence, recklessness, or willful misconduct of the Consultant, its employees, subcontractors, or agents in the performance or non-performance, of services under this Agreement. The Contractor is not required to provide indemnification under this section where doing so would violate the Contractor's independence requirements or other applicable professional standards.

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B. Contractor's obligation to protect, defend, indemnify, and hold harmless in full Authority and Authority's employees, shall specifically extend to any and all employment-related claims of any type brought by employees, contractors, subcontractors or other agents of Contractor, against Authority (either alone, or jointly with Contractor), regardless of venue/jurisdiction in which the claim is brought and the manner of relief sought.

C. To the extent Contractor is obligated to provide health insurance coverage to its employees pursuant to the Affordable Care Act ("Act") and/or any other similar federal or state law, Contractor warrants that it is meeting its obligations under the Act and will fully indemnify and hold harmless Authority for any penalties, fines, adverse rulings, or tax payments associated with Contractor's responsibilities under the Act.

15. INSURANCE REQUIREMENTS
During the term of this Agreement, and for any time period set forth in Exhibit C, Contractor shall provide and maintain in full force and effect, at no cost to Authority, insurance policies as set forth in Exhibit C.

16. WAIVER
Contractor agrees that waiver by Authority of any one or more of the conditions of performance under this Agreement shall not be construed as waiver(s) of any other condition of performance under this Agreement. Neither Authority's review, acceptance nor payments for any of the Services required under this Agreement shall be constructed to operate as a waiver of any rights under this Agreement or of any cause of action arising out of the performance of this Agreement.

17. NOTICES
All notices to the Parties shall, unless otherwise requested in writing, be sent to Authority addressed as follows:

Santa Clara Stadium Authority
Attention: Finance Department
1500 Warburton Avenue
Santa Clara, CA 95050
and by e-mail at [email protected], and
[email protected]
And to Contractor addressed as follows:

KPMG LLP
55 Second Street, Suite 1400
San Francisco, CA 94105
or by facsimile at (415) 963-8100
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The workday the e-mail was sent shall control the date notice was deemed given.

An e-mail transmitted after 1 :00 p.m. on a Friday shall be deemed to have been transmitted on the following business day.

18. COMPLIANCE WITH LAWS
Contractor shall comply with all applicable laws and regulations of the federal, state and local government, including but not limited to "The Code of the City of Santa Clara, California" ("SCCC"). In particular, Contractor's attention is called to the regulations regarding Campaign Contributions (SCCC Chapter 2.130), Lobbying (SCCC Chapter 2.155), Minimum Wage (SCCC Chapter 3.20), Business Tax Certificate (SCCC section 3.40.060), and Food and Beverage Service Worker Retention (SCCC Chapter 9.60), as such Chapters or Sections may be amended from time to time or renumbered. Additionally Contractor has read and agrees to comply with City's Ethical Standards (http://santaclaraca.gov/home/showdocument?id=58299 ).

19. CONFLICTS OF INTEREST
This Agreement does not prevent either Party from entering into similar agreements with other parties. To prevent a conflict of interest, Contractor certifies that to the best of its knowledge, no Authority officer, employee or authorized representative has any financial interest in the business of Contractor and that no person associated with Contractor has any interest, direct or indirect, which could conflict with the performance of this Agreement in accordance with applicable professional standards. Contractor is familiar with the provisions of California Government Code section 87100 and following, and certifies that it does not know of any facts which would violate these code provisions. Contractor will advise Authority if a conflict arises.

20. FAIR EMPLOYMENT
Contractor shall not discriminate against any employee or applicant for employment because of race, sex, color, religion, religious creed, national origin, ancestry, age, gender, marital status, physical disability, mental disability, medical condition, genetic information, sexual orientation, gender expression, gender identity, military and veteran status, or ethnic background, in violation of federal, state or local law.

21. NO USE OF AUTHORITY NAME OR EMBLEM
Contractor shall not use Authority's name, insignia, or emblem, or distribute any information related to services under this Agreement in any magazine, trade paper, newspaper or other medium without express written consent of Authority.

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22. GOVERNING LAW AND VENUE
This Agreement shall be governed and construed in accordance with the statutes and laws of the State of California. The venue of any suit filed by either Party shall be vested in the state courts of the County of Santa Clara, or if appropriate, in the United States District Court, Northern District of California, San Jose, California. In the event of a dispute, the parties agree to use non-binding mediation prior to commencing litigation in a court of competent jurisdiction.

23. SEVERABILITY CLAUSE
In case any one or more of the provisions in this Agreement shall, for any reason, be held invalid, illegal or unenforceable in any respect, it shall not affect the validity of the other provisions, which shall remain in full force and effect.

24. AMENDMENTS
This Agreement may only be modified by a written amendment duly authorized and executed by the Parties to this Agreement.

25. COUNTERPARTS
This Agreement may be executed in counterparts, each of which shall be deemed to be an original, but both of which shall constitute one and the same instrument.

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The Parties acknowledge and accept the terms and conditions of this Agreement as evidenced by the following signatures of their duly authorized representatives.

CITY OF SANTA CLARA, CALIFORNIA
a chartered California municipal corporation
"CITY"
~DEANN A _. ANTANA
City Mana ,
1500 Warburton Avenue
Santa Clara, CA 95050
Telephone: (408) 615-2210
Fax: ( 408) 241-6771

KPMG LLP
a Delaware Registered Limited Liability Partnership
Dated: 5/11/2021
By (Sig nature): __,.,.@~tfl~L~ /4_ ,'2-~ ---- ----- - Name: Lisa Avis
Title: Managing Director
Principal Place of 500 Capitol Mall, Ste. 2100
Business Address: Sacramento, CA 95814
Email Address: [email protected]
Telephone: (916) 551-3115
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Fax: (916)554-1199
"CONTRACTOR"

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EXHIBIT A

SCOPE OF SERVICES
The Services to be performed for the Authority by the Contractor under this Agreement are fully described in the Contractor's proposal entitled, "Engagement Letter" dated March 29, 2021 and March 30, 2021, which is attached to this Exhibit A and incorporated by this reference.

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March 30, 2021
Santa Clara Stadium Authority
1500 Warburton Avenue
Santa Clara, California 95050
Attention: Finance Director
Ladies and Gentlemen :

KPMG LLP
500 Capitol Mall, Ste 2100
Sacramento, CA 95814-4754
Telephone +1 916 448 4700
Fax +1916554 1199
kpmg.com
This letter (Engagement Letter) c,onfirms our understanding of our engagement to provide professional services to the Authority.

Objectives and Limitations of Services
Audit Services
You have requested that we audit the Authority's financial statements as set forth in Appendix I.

We have the responsibility to conduct and will conduct the audit of the financial statements in accordance with auditing standards generally accepted in the United States of America and the standards for financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States (Government Auditing Standards), with the objectives of obtaining reasonable assurance about whether the financial statements as a whole are free from material misstatement , whether due to error or fraud, and issuing an auditor 's report that includes our opinion as to whethe r the presentation of the financial statements conforms with U.S. generally accepted accounting principles.

Reasonable assurance is a high level of assurance but it is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with auditing standards generally accepted in the United States of America and Government Auditing Standards will always detect a material misstatement when it exists . Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users made on the basis of these financial statements.

As part of an audit in accordance with auditing standards generally accepted in the United States of America and Government Auditing Standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also will :
e Identify and assess the risks of material misstatement of the financial statements, whether due to error or fraud, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion on the financial statements. o Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall financial statement presentat ion, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
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11 ~. I '.~I • I I
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o Conclude, based on the audit evidence obtained, whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Authority ability to continue as a going concern for a reasonable period of time.

Because of the inherent limitations of an audit, together with the inherent limitations of internal control, there is an unavoidable risk that some material misstatements, fraud, and noncompliance with laws and regulations may exist and not be detected by an audit of financial statements even though the audit is properly planned and performed in accordance with auditing standards generally accepted in the United States of America and Government Auditing Standards. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions , misrepresentations, or the override of internal control. Also, an audit is not designed to detect matters that are immaterial to the financial statements.

We will also perform certain limited procedures to the required supplementary information as required by auditing standards generally accepted in the United States of America. However, we will not express an opinion or provide any assurance on the information . Our report relating to the financial statements will include our consideration of required supplementary information .

We also understand that the financial statements will include supplementary information which is presented for the purpose of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements . The information will be subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America with the objective of expressing an opinion as to whether the supplementary information is fairly stated, in all material respects, in relation to the financial statements as a whole.

Subject to the remainder of this paragraph, we will issue a written report upon completion of our audit of the Authority's financial statements addressed to the Board of Directors of the Santa Clara Stadium Authority.

Circumstances may arise in which our report may differ from its expected form and content based on the results of our audit. Depending on the nature of these circumstances, it may be necessary for us to modify our opinion, add an emphasis-of -matter paragraph or other-matter paragraph to our auditor's report, or, if necessary, withdraw from the engagement. If, during the performance of our audit procedures such circumstances arise, we will communicate to the audit committee our reasons for modification or withdrawal.

Internal Control over Financial Reporting and Compliance and Other Matters We will obtain an understanding of the Authority's internal control relevant to the audit in order to determine the nature, timing, and extent of our audit procedures for the purpose of expressing an opinion on the financial statements but not for the purpose of expressing an opinion on the effectiveness of the Authority's internal control.

The objective of our audit of the financial statements is not to report on the Authority's internal control and we are not obligated to search for material weaknesses or significant deficiencies as part of our audit of the financial statements. A material weakness is a deficiency, or combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the financial statements will not be prevented or detected and corrected on a timely basis. A significant deficiency is a deficiency, or combination of Santa Clara Stadium Authority
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deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, we will perform tests of the Authority's compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, our objective is not to provide an opinion on compliance with such provisions.

In accordance with Government Auditing Standards , we will prepare a written report, Report on Internal Control Over Financial Reporting and Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards (GAGAS report), on our consideration of internal control over financial reporting and tests of compliance made as part of our audit of the financial statements . This report will include any material weaknesses and significant deficiencies identified during the audit. This report will also include any of the following that we identify or suspect:
o Instances of noncompliance with provisions of laws, regulations, contracts , or grant agreements that have a material effect on the financial statements or other financial data significant to the audit objectives; o Instances of fraud that are material, either qualitatively or quantitatively, to the financial statements or other financial data significant to the audit objectives.

The report will describe its purpose and will state that it is not suitable for any other purpose.

In accordance with Government Auditing Standards, we will also communicate in writing when:
0 Identified or suspected noncompliance with provisions of laws, regulations, contracts, or grant agreements comes to our attention during the course of our audit that has an effect on the financial statements or other financial data significant to the audit objectives that is less than material but warrants the attention of those charged with governance, or
o We obtained evidence of identified or suspected instances of fraud that have an effect on the financial statements or other financial data significant to the audit objectives that are less than material but warrant the attention of those charged with governance.

In accordance with Government Auditing Standards, we are also required in certain circumstances to report identified or suspected noncompliance with provisions of laws, regulations, contracts, or grant agreements, or instances of fraud directly to parties outside the auditee.

Offering Documents
In the event the Authority requests our involvement with a future exempt filing that will include or incorporate by reference these financial statements and our audit report(s) thereon, professional standards require us to be separately engaged. The specific terms of our future services with respect to future exempt offerings will be determined at the time the services are to be performed and will be subject to the negotiation, agreement, and execution of a specific engagement letter or contract.

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In the event the Authority does not engage us to be involved with the offering document, then the Authority agrees to include the following language in the offering document:
"KPMG LLP, our independent auditor, has not been engaged to perform and has not performed, since the date of its report included herein, any procedures on the financial statements addressed in that report.

KPMG LLP also has not performed any procedures relating to this official statement." Our Responsibility to Communicate with the Audit Committee We will communicate our planned scope and timing for our audit with the audit committee, including significant risks identified in planning our audit.

We will report to the audit committee or those charged with governance the following matters:
o Material, corrected misstatements that were brought to the attention of management as a result of audit procedures.
• Uncorrected misstatements accumulated by us during the audit and the effect that they, individually or in the aggregate, may have on our opinion in the auditor's report, the effect of uncorrected misstatements related to prior periods, and that uncorrected misstatements or matters underlying those uncorrected misstatements could potentially cause future-period financial statements to be materially misstated, even if the auditor has concluded that the uncorrected misstatements are immaterial to the financial statements under audit.
o Our views about qualitative aspects of the Authority's significant accounting practices, including accounting policies, accounting estimates, and financial statement disclosures. o Significant unusual transactions, if any.
o Significant difficulties, if any, encountered during our audit. o Disagreements with management, if any.
o Circumstances that affect the form and content of our auditor's report, if any. o Matters that are difficult or contentious for which the auditor consulted outside the engagement team and that are, in the auditor's judgment, significant and relevant to those charged with governance regarding their responsibility to oversee the financial reporting process. o Other matters required to be communicated by auditing standards generally accepted in the United States of America and Government Auditing Standards .

We will also read minutes, if any, of relevant committee meetings for consistency with our understanding of the communications made to the audit committee and determine that the audit committee has received copies of all material written communications between ourselves and management. We will also determine that the audit committee has been informed of i) the initial selection of, or the reasons for any change in, significant accounting policies or their application during the period under audit, ii) the methods used by management to account for significant unusual transactions, and iii) the effect of significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus .

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To the extent that they come to our attention, we will inform the appropriate level of management about any instances of noncompliance or suspected noncompliance with laws and regulations, unless they are clearly inconsequential, material errors in the financial statements and any instances of fraud. Further, to the extent they come to our attention, we also will communicate directly to the audit committee any instances of noncompliance or suspected noncompliance with laws and regulations, unless they are clearly inconsequential, material errors in the financial statements, and any instances of fraud that involve senior management or that, in our judgment, cause a material misstatement of the financial statements .

Management Responsibilities
The management of the Authority acknowledges and understands that they have responsibility for the preparation and fair presentation, in accordance with U.S. generally accepted accounting principles, of the financial statements and all representations contained therein. Management also is responsible for identifying and ensuring that the Authority complies with laws, regulations, contracts, and grant agreements applicable to its activities, and for informing us of any known instances of noncompliance or suspected noncompliance with laws, regulations and provisions of contracts and grant agreements . Management also is responsible for the design, implementation, and maintenance of programs and controls to prevent, deter, and detect fraud, for adopting sound accounting policies, and for the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of the financial statements and to provide reasonable assurance against the possibility of misstatements that are material to the financial statements whether due to error or fraud. Management is also responsible for informing us, of which it has knowledge, of all material weaknesses and significant deficiencies in the design or operation of such controls. The audit of the financial statements does not relieve management or those charged with governance of their responsibilities.

The management of the Authority also acknowledges and understands that they have responsibility for the preparation of the supplementary information in accordance with the applicable criteria. Management is also responsible for providing us written representations regarding the supplementary information. Management is also responsible for including our report on the supplementary information in any document that contains and indicates that we have reported on the supplementary information, and for including the audited financial statements with any presentation of the supplementary information that includes our report thereon or making the audited financial statements readily available to intended users of the supplementary information no later than the date the supplementary information is issued with our report thereon.

Management of the Authority also acknowledges and understands that it is their responsibility to provide us with: i) access to all information of which management is aware that is relevant to the preparation and fair presentation of the financial statements such as records, documentation, and other matters; ii) additional information that we may request from management for purposes of the audit; and iii) unrestricted access to persons within the entity from whom we determine it necessary to obtain audit evidence. As required by auditing standards generally accepted in the United States of America, we will make specific inquiries of management about the representations embodied in the financial statements and the effectiveness of internal control, and obtain a representation letter from management about these matters . The responses to our inquiries, the written representations, and the results of audit tests, among other things, comprise the evidential matter we will rely upon in forming an opinion on the financial statements .

To facilitate our audit planning, in accordance with Government Auditing Standards, management agrees to identify and provide copies of reports, if applicable, of previous audits, attestation engagements, or other studies that directly relate to the objectives of the audit, including whether related recommendations have been implemented, prior to April 1, 2021.

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Management is responsible for adjusting the financial statements to correct material misstatements and for affirming to us in the representation letter that the effects of any uncorrected misstatements aggregated by us during the current engagement and pertaining to the latest period presented are immaterial, both individually and in the aggregate, to the financial statements being reported upon, taken as a whole . Because of the importance of management's representations to the effective performance of our services, the Authority will release KPMG LLP (KPMG) and its personnel from any claims, liabilities, costs and expenses relating to our services under this Engagement Leiter attributable to any misrepresentations in the representation letter referred to above. The provisions of this paragraph shall apply regardless of the form of action, damage, claim, liability, cost, expense, or loss asserted, whether in contract, statute, tort (including but not limited to negligence) or otherwise.

Management is also responsible for providing us with written responses in accordance with Government Auditing Standards to the findings included in the GA GAS report within 10 days of being provided with draft findings . If such information is not provided on a timely basis prior to release of the report, the GAGAS report will indicate management did not provide written responses .

Management is responsible for the distribution of the reports issued by KPMG.

Non-audit service - Assistance in Preparing Financial Statements We will assist management in preparing the financial statements and related notes in accordance with U.S. generally accepted accounting principles. We will use information from the trial balance and/or other source documents provided by management to assist management in preparing the financial statements and related notes.

We may also provide advice and recommendations to assist management of the Authority in performing its responsibilities. We will not assume management responsibilities on behalf of the Authority .

The Authority agrees to:
o Assume all management responsibilities, including determining the accuracy and completeness of the financial statements and notes.
o Assign a suitable employee with appropriate sl<ills, knowledge and/or experience to oversee the financial statement preparation assistance and evaluate the adequacy and results of the services . • Accept responsibility for the results of the financial statement preparation assistance.

Dispute Resolution
The parties agree that any dispute or claim arising out of or relating to the Engagement Letter and the related contract or the services provided thereunder shall first be submitted to non-binding mediation as a prerequisite to litigation. Mediation may take place at a location to be designated by the parties using the Mediation Procedures of the International Institute for Conflict Prevention and Resolution, with the exception of paragraph 2 (Selecting the Mediator). If, after good faith efforts, the parties are unable to resolve their dispute through mediation within ninety (90) days after the issuance by one of the parties of a request for mediation, then the parties are free to pursue all other legal and equitable remedies available to them. Nothing herein shall preclude a party from filing a timely formal claim in accordance with applicable California law provided, however, that the party shall, if permitted, seek a stay of said claim during the pendency of any mediation.

Either party may seek to enforce any written agreement reached by the parties during mediation in any court of competent jurisdiction.

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other Matters
In the event that any term or provision of this Engagement Letter shall be held to be invalid, void or unenforceable, then the remainder of the Engagement Letter shall not be affected, and each such term and provision shall be valid and enforceable to the fullest extent permitted by law.

In an effort to facilitate efficient communication between KPMG and the Authority related to the audit and to track engagement progress during the course of the engagement, KPMG may provide the Authority with access to certain on line tools. If such access is provided to the Authority, the Authority shall be responsible for:
(i) its users' access and use of such tools (including the information its users may upload to such tools and compliance with all laws and regulations applicable to use or access by the Authority's users outside of the United States (e.g. export control and data privacy laws and regulations)), and (ii) protecting the security of the account credentials in its possession for each user including timely informing KPMG when the Authority individuals' access should be removed. The Authority acknowledges that it shall not provide third parties (agents or contractors) with access to such tools without KPMG's written consent, use such tools as a system of record, nor use such tools other than for purposes of the audit engagement.

Except as permitted by law or as set forth in this paragraph, neither party shall acquire hereunder any right to use the name or logo of the other party or any part thereof, and any such use shall require the express written consent of the owner party. The Authority agrees that KPMG may list the Authority as a client in KPMG's internal and external marketing materials, including KPMG websites and social media, indicating the general services rendered (e.g., "[the Santa Clara Stadium Authority] is an Audit client of KPMG LLP"). Further, for purposes of the services described in this Engagement Letter only, the Authority hereby grants to KPMG a limited, revocable, non-exclusive, non-transferable, paid up and royalty-free license, without right of sublicense, to use all logos, trademarks and service marks of the Authority solely for presentations or reports to the Authority or for internal l<PMG presentations and intranet sites.

The Authority and l<PMG acknowledge and agree that each shall comply with all applicable United States export control laws and regulations in the performance of each party's respective responsibilities under the Engagement Letter. Unless requested by KPMG to allow it to complete its audit, the Authority will not provide KPMG, or grant KPMG access to, (a) information (including technical data or technology), verbally, electronically, or in hardcopy, (b) software or (c) hardware, that is controlled for export by the United States government under the Arms Export Control Act of 1976, Export Control Reform Act of 2018, the International Traffic in Arms Regulations ("ITAR"), Export Administration Regulations ("EAR"), Department of Energy Part 81 0 Regulations or Nuclear Regulatory Commission Part 11 0 Regulations, except information, software or hardware that is classified as EAR99 under the EAR ("Export Controlled Information") . If KPMG requests Export Controlled Information from the Authority, the Authority shall provide l<PMG with notice of provision of Export Controlled Information at least 48 hours prior to providing such Export Controlled Information to KPMG.

KPMG is a limited liability partnership comprising both certified public accountants and certain principals who are not licensed as certified public accountants. Such principals may participate in the engagements to provide the services described in this Engagement Letter.

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The audit documentation for this engagement is the property of KPMG. If KPMG receives a subpoena; other validly issued administrative, judicial, government or investigative regulatory demand or request; or other legal process requiring it to disclose the Authority's confidential information ("Legal Demand"), KPMG shall, unless prohibited by law or such Legal Demand, provide prompt written notice to the Authority of such Legal Demand in order to permit it to seek a protective order. So long as KPMG gives notice as provided herein, KPMG shall be entitled to comply with such Legal Demand to the extent required by law, subject to any protective order or the like that may have been entered in the matter. In the event KPMG is requested or authorized by the Authority, or is required by law, rule, regulation or Legal Demand in a proceeding or investigation to which KPMG is not a named party or respondent, to produce KPMG's documents or personnel as witnesses or for interviews, or otherwise to make information relating to the service under the Engagement Letter available to a third party, or the Authority, the Authority shall reimburse l<PMG for its professional time, at its then-current standard hourly rates, and expenses, including reasonable attorneys' fees and expenses, incurred in producing documents or personnel or providing information pursuant to such requests, authorizations or requirements.

Pursuant to Government Auditing Standards, and subject to applicable provisions of laws and regulations, we are required to make appropriate individuals and certain audit documentation available in a timely manner to others, including Regulators, upon request. In addition, we may also be requested to make certain audit documentation available to Regulators pursuant to authority provided by law or regulation . If so requested, access to such audit documentation will be provided. Furthermore, Regulators may obtain copies of selected audit documentation. Such regulators may intend, or decide, to distribute the copies or information contained therein to others, including other government agencies.

KPMG, as an accounting firm, has an obligation to comply with applicable professional standards . Certain professional standards, including AICPA Code of Professional Conduct Section 1.700, "Confidential The Authority Information Rule," adopted by the American Institute of Certified Public Accountants and similar rules adopted by the boards of accountancy of many states, prohibit the disclosure of the Authority confidential information without the Authority consent, except in limited circumstances . l<PMG represents to the Authority that KPMG will treat the Authority's confidential information in accordance with applicable professional standards.

KPMG may work with and use the services of other members of the international KPMG network of independent firms and entities controlled by, or under common control with, one or more KPMG member firms (together with KPMG, the "KPMG Firms") to provide services to the Authority. The l<PMG Firms, together with the entities comprising l<PMG International, shall be referred to herein as the "KPMG Parties." In connection with the performance of services under this Engagement Letter, the KPMG Firms may, in their discretion, utilize the services of third party service providers within or outside of the United States to complete the services under this Engagement Letter. KPMG Parties and such third parties may have access to your confidential information from offshore locations. In addition, KPMG uses third party service providers within and outside of the United States to provide, at its direction, back-office administrative and ,clerical, or analytical services to KPMG and these third party service providers may in the performance of such services have access to your confidential information. In particular, l<PMG's audit technologies, software productivity tools and certain technology infrastructure and, necessarily, your confidential information, may be hosted in cloud environments operated by KPMG Parties or such third party service providers. In addition, for purposes of fulfilling our professional responsibilities, such as maintaining independence and performing conflict checks, the Authority will be listed as a client in internal KPMG Parties' systems accessible on a need to know basis to l<PMG Parties. KPMG represents that it has technical, legal and/or other safeguards, measures and controls in place to protect your confidential information from unauthorized disclosure or use.

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You also understand and agree that the KPMG Parties, with the assistance of third parties as outlined above, may use all the Authority information for other purposes consistent with our professional standards, such as improving the delivery or quality of audit and other services or technology to you and to other clients, thought leadership projects, to allow you and other clients to evaluate various business transactions and opportunities, and for use in presentations to you, other clients and non-clients . When your information is used outside of the KPMG Parties or such third parties assisting them as outlined above, the Authority will not be identified as the source of the information .

It may be necessary or convenient for the Authority to use KP MG-owned or -licensed software, software agents, scripts, technologies, tools or applications (collectively "KPMG Technology ") designed to extract data from The Authority's electronic books and records systems or other systems (collectively , "Systems"), in connection with the audit. The Authority understands and agrees that it is solely responsible for following appropriate change management policies, processes and controls relating to use of such technology (including without limitation appropriate backup of the Authority's information and Systems) (collectively, "Change Management Processes") before such KPMG Technology is utilized to extract data from the Systems . In the event the Authority fails to use such Change Management Processes or if such Change Management Processes prove to be inadequate, the Authority acknowledges that the Systems and/or KPMG Technology may not function as intended. In consideration of the foregoing, KPMG hereby grants the Authority the right to use KPMG Technology solely to facilitate the Authority's necessary or convenient provision of information to KPMG in connection with the audit, and this grant does not extend to any other purposes or use by third parties outside of your organization without our prior written approval, provided that third party contractors of the Authority having a need to know in order to perform their services to the Authority are permitted to use KPMG Technology to the extent necessary for such parties to perform such services, so long as the Authority exercises the same level of care to protect such KPMG Technology and KPMG confidential information as it uses to protect its own confidential information, but in no event less than reasonable care. Other than as expressly permitted hereby, the Authority agrees to keep KPMG Technology confidential, using no less than a reasonable standard of care to protect it from unauthorized disclosure or use, and to notify KPMG of any legal compulsions to disclose it, in accordance with the provisions governing legal demand of confidential information which appear in this engagement letter with respect to which the KPMG Technology is being used, mutatis mutandis. If the KPMG Technology is subject to any third party license terms and conditions before being provided to the Authority, the Authority may be required to accept such terms and conditions before using the KPMG Technology, in which case KPMG will provide such license terms and conditions to the Authority in writing before the Authority elects to use the KPMG Technology .

As required by Government Auditing Standards, we have attached a copy of l<PMG's most recent peer review report.

Reports, Services and Associated Fees
Appendix I to this Engagement Letter lists the reports we will issue and the services we will provide as part of this engagement and our fees for professional services to be performed under this Engagement Letter.

Santa Clara Stadium Authority
March 30, 2021
Page10of10
In addition, fees for any special audit-related projects, such as research and/or consultation on special business or financial issues, will be billed separately from the audit fees for professional services set forth in Appendix I and may be subject to written arrangements supplemental to those in this Engagement Letter. *** * ***
Our engagement herein is for the provision of annual audit services for the financial statements for the periods described in Appendix I, and it is understood that such services are provided as a single annual engagement.

Pursuant to our arrangement as reflected in this Engagement Letter we will provide the services set forth in Appendix I as a single engagement for each of the Authority's subsequent fiscal years until either those charged with governance or we terminate this agreement, or mutually agree to the modification of its terms.

The fees for each subsequent year will be annually subject to negotiation and approval by those charged with governance.

We shall be pleased to discuss this Engagement Letter with you at any time. For your convenience in confirming these arrangements, we enclose a copy of this Engagement Letter. Please sign and return it to us to indicate your acl<nowledgement of, and agreement with, the arrangements for our audit of the financial statements including our respective responsibilities .

Very truly yours,
l<PMG LLP
Lisa Avis
Managing Director

ACCEPTED
Santa Clara Stadium Authority
Authorized Signature
s~Q,., . ._. IL\u+klir~ T f}JI-C8v r 2--,
Title
Date
Appendix I
Reports, Services and Associated Fees
Based upon our discussions with and representations of management, our fees for services we will perform are estimated as follows:

Audit of financial statements and related notes to the
financial statements of the Authority as of and for the year ended March 31, 2021 and Agreed-Upon
Procedures Reports $142,120
The above estimates are based on the level of experience of the individuals who will perform the services. Circumstances encountered during the performance of these services that warrant additional time or expense could cause us to be unable to deliver them within the above estimates. We will endeavor to notify you of any such circumstances as they are assessed.

Instead, KPMG applies such payments to reduce its overhead costs, which costs are taken into account in determining KPMG's standard billing rates and certain transaction charges which may be charged to clients.

All fees, charges and other amounts payable to KPMG under the Engagement Letter do not include any sales, use, excise, value added, income or other applicable taxes, tariffs or duties, payment of which shall be the Authority's sole responsibility, excluding any applicable taxes based on KPMG's net income or taxes arising from the employment or independent contractor relationship between KPMG and its personnel.
1-1

KPMG LLP
500 Capitol Mall, Ste 2100
Sacramento, CA 95814-4754
March 29, 2021
Santa Clara Stadium Authority
1500 Warburton Avenue
Santa Clara, California 95050
Attention: Finance Director

PRIVATE
This Engagement Letter (Engagement Letter) sets forth our understanding of the terms and objectives of our engagement and the nature and limitations of the services l<PMG LLP ("KPMG") will provide.

We will apply the following agreed-upon procedures to the Shared Stadium Expenses and Statement of Operations of Santa Clara Stadium Authority (the Authority) for the year ended March 31, 2021. The Authority is responsible for the Shared Stadium Expenses. The sufficiency of the procedures is solely the responsibility of the specified users of the report: the Santa Clara Stadium Authority. Consequently, we make no representation regarding the sufficiency of the procedures either for the purpose for which our report is being prepared or for any other purpose. Execution of this Engagement Letter will signify the Authority's agreement to the procedures and to its responsibility for the sufficiency of the procedures for its purposes. 1) Obtain the Stadium Lease Agreement by and between the Santa Clara Stadium Authority and Forty Niners Stadium Company LLC dated as of March 28, 2012, as amended and restated as of June 19, 2013 (Lease Agreement) .
2) Obtain the following Shared Expense categories utilized by ManagementCo and agree them to the Lease agreement in Procedure 1.
a. Day to day expenses (StadCo's share of 50%)
b. Capital repairs and capital expenditures (StadCo's share of 50%) c. Stadium management fees (StadCo's share of 50%)
d. Other specified shared expenses (StadCo's share of 50%) e. Groundskeeping services (StadCo's share of 70%)
f. Insurance expenses (1 st lease year $2,550,000, 2nd lease year onwards $2,550,000 increased by 3% each year, tenant expansion period 0%)
3) Determine if SCSA properly charged StadCo for its proportionate share of the Shared Stadium Expenses by obtaining the final Shared Stadium Expenses reconciliation prepared by ManagementCo and comparing it against the Estimated Shared Stadium Expenses paid by StadCo. If there is a difference between the estimated and final amount, then ensure that ManagementCo properly credit or invoice StadCo for the difference on behalf of SCSA.
4) Agree the Stadium Authority's Revenues, Expenses, Capital Expenditures, and Net Income (Loss) from Non-NFL Events to the Stadium Authority's March 31, 2020's general ledger '<PMG LLP. ;1 02l ;;•,·. ~1t: !ir111le:I htb1lrly 11::rlne 1~h1p anti ~ 11\t.)llll>cr 111 111 t1! 'llC' KPfdG g\,)bal c,r1__p:1i!,1;i,)11 ,if ir ·d~'f 'e1;dunl n1e1r,her li11 11:l allllr,11 1:·J ,•1ilh ,. PMG lni.:m,1tic-n:1I l 111:it.;d, ;i pri•:,11,, E111__ili~h ("f •!l1Jl.l1\' ,' lim,i-:d Ii'/ (J'l iH:111 t,~;:

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5) Recalculate the distributions to and from the Operating Expense Reserve, Stadium Capital Expenditure Reserve and Renovation/Demolition Reserve and agree it to the general ledger.

The Authority acknowledges its responsibility for determining the scope of the engagement, including the subject matter and criteria used in evaluating the subject matter, agreeing to the procedures and the sufficiency of such procedures for the Authority's purposes. At the conclusion of the engagement, the Author ity agrees to supply us with a representation letter that will include the Authority's assertion about the Shared Expenses based on the criteria and will include:
a. a statement that all known matters contradicting the subject matter or assertion and any communication from regulatory agencies or others affecting the subject matter or assertion have been disclosed to us including communications received between the end of the period addressed in the written assertion and the date of our report,
b. a statement acknowledging its responsibility for the subject matter and the assertion, selecting the criteria, when applicable, and determining that such criteria are appropriate for its purposes , c. a statement that it has provided us with access to all records relevant to the subject matter and the agreed- upon procedures, and
d. other matters as we may deem appropriate .

If such a representation letter is not provided, which includes the aforementioned assertion, it may be necessary for us to withdraw from the engagement.

Our engagement to apply agreed-upon procedures will be performed in accordance with the attestation standards established by the American Institute of Certified Public Accountants. Because the agreed-upon procedures referred to above do not constitute an examination or review, we will not express an opinion or conclusion on Shared Expenses of the Authority. Our report will include a statement to that effect. In addition, we have no obligation to perform any procedures beyond those referred to above.

Our written independent accountants' agreed-upon procedures report will include a list of the procedures performed (or reference thereto) and the related findings. Our report will also contain a paragraph indicating that had we performed additional procedures, other matters might have come to our attention that would have been reported to you. We have no responsibility to update our report for events and circumstances occurring after the date of such report.

Our report is intended solely for the use of the Authority , and is not intended for use by those who have not agreed to the procedures and taken responsibility for the sufficiency of the procedures for their purposes. Our report will include a statement to that effect. If you request that additional specified users of the report be added, we will require that they acknowledge, in writing , their agreement with the procedures and their responsibility for the sufficiency of the procedures for their purposes.

If we are unable to complete the agreed-upon procedures referred to above, we will discuss the matter with you during the engagement. In such circumstances, we may conclude that we will not issue a report as a result of this engagement.

Because of the importance of management 's representations to the effective performance of our services, the Authority hereby releases KPMG and its personnel from and against any and all claims, liabilities, costs, and KPtdG LL P IS ,1 Dc1,1.•:;11t,! l,W,lll'd liJ t ,1h1y p,H111:1sl; JI and II H? U.S. llh~lll h,·, 111 ,n ,ii th~ KFf1lG 1,c h '- l•ri-: c,I 1/1fli:TC1l:l,111 1 rn,1,nhm firrn'i .if11ri .il<!ti .,.~,1h IT!, \f; 1111,,ri ,, ;1:,_,1 , 11 f.h•r ··,1,1\, •/ •, / !:Pl 1G li,(, 1 11) 11 1.1,1 ,r I, :t '.~\'.1•>; ,;n l1I ,'.

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expenses relating to our services under this Engagement Leiter attributable to any misrepresentations in the representation letter referred to above. The provisions of this paragraph shall apply regardless of the form of action, damage, claim, liability, cost, expense , or loss asserted, whether in contract , statute, tort (including but not limited to negligence) or otherwise.

The Authority will indemnify, defend, and hold l<PMG and its personnel harmless from and against any and all claims, liabilities, costs, and expenses asserted against l<PMG by any third party to the extent resulting from or attributable to (i) that party's use or possession of, or reliance upon, l<PMG's report or reference to l<PMG's services hereunder as a result of the Authority's disclosure of such report or reference thereto other than to the specified user(s) or (ii) any misrepresentations in the representation letter referred to above. The foregoing indemnification obligation shall apply regardless of whether the third party claim alleges a breach of contract, violation of statute or tort (including without limitation negligence) by KPMG.

The Authority hereby releases l<PMG and its personnel from and against any and all claims, liabilities, costs, and expenses relating to our services under this Engagement Letter, except to the extent determined to have resulted from the gross negligence of l<PMG personnel.

Dispute Resolution
The parties agree that any dispute or claim arising out of or relating to the Engagement Letter and the related contract or the services provided thereunder shall first be submitted to non-binding mediation as a prerequisite to litigation . Mediation may tal<e place at a location to be designated by the parties using the Mediation Procedures of the International Institute for Conflict Prevention and Resolution, with the exception of paragraph 2 (Selecting the Mediator). If, after good faith efforts, the parties are unable to resolve their dispute through mediation within ninety (90) days after the issuance by one of the parties of a request for mediation , then the parties are free to pursue all other legal and equitable remedies available to them. Nothing herein shall preclude a party from filing a timely formal claim in accordance with applicable California law provided, however, that the party shall, if permitted, seel< a stay of said claim during the pendency of any mediation.

Either party may seel< to enforce any written agreement reached by the parties during mediation in any court of competent jurisd iction.

Other Matters
In the event that any term or provision of this Engagement Letter shall be held to be invalid, void or unenforceable, then the remainder of the Engagement Letter shall not be affected, and each such term and provision shall be valid and enforceable to the fullest extent permitted by law.

This Engagement Letter shall serve as the Authority's authorization for the use of e-mail and other electronic methods to transmit and receive information, including confiden tial information , between KPMG and the Authority and between KPMG and outside specialists or other entities engaged by either KPMG or the Authority. The Authority acknowledges that e-mail travels over the public Internet, which is not a secure means of communication and, thus, confidentiality of the transmitted information could be compromised through no fault of KPMG. KPMG will employ commercially reasonable efforts and tal<e appropriate precautions to protect the privacy and confidentiality of transmitted information . i;PMG Llr 1.-; ,1 Oda·.•:i11~ li:1,itcd I ,1l•i!11 v µ ,u l11,:1~lup ,111rl th" U.S. 111-~ 1nh,~1 fi1 rn ,>I 11.u KPt~IG 11,!h \L•1I: r•f 111rl.::1.,•r1:b111 m,•mli\"!1 fi11noc; ,1 1f1li,1h·d ·.-111h IT!Nl l:11,n11 d•l•l.-.1 C,• 'I JI. fir I !:r r i(; 11,l dll !111\ 1,\, .. i, :. '.:•:. 1•:~ ,m111 /. ~
Santa Clara Stadium Authority
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In an effort to facilitate efficient communication between KPMG and the Authority related to the attest engagement and to track engagement progress, KPMG may provide the Authority with access to certain on line tools . If such access is provided to the Authority , the Authority shall be responsible for : (i) its users' access and use of such tools (including the information its users may upload to such tools and compliance with all laws and regulations applicable to use or access by the Authority's users outside of the United States (e.g. export control and data privacy laws and regulations)), and (ii) protecting the security of the account c redentials in its possession for each user including timely informing KPMG when the Authority individuals' access should be removed. The Authority acknowledges that it shall not provide third parties (agents or contractors) with access to such tools without KPMG's written consent, use such tools as a system of record, nor use such tools other than for purposes of the attest engagement. The KPMG online tools include technology licensed from Microsoft, and the Authority's use of such Microsoft technology is subject to the Microsoft End-User Terms available at http://www.kpmginfo.com/NDPPS/media/docs/144210-1A NAS MicrosoftEnd-UserTerms.pdf .

Except as permitted by law or as set forth in this paragraph, neither party shall acquire hereunder any right to use the name or logo of the other party or any part thereof , and any such use shall require the express written consent of the owner party . The Author ity agrees that KPMG may list the Authority as a client in KPMG's internal and external marketing materials, including KPMG websites and social media, indicating the general services rendered (e.g., "[the Santa Clara Stadium Authority] is an Audit client of KPMG LLP"). Further, for purposes of the services described in this Engagement Letter only, the Authority hereby grants to l<PMG a limited, revocable, non-exclusive, non-transferable, paid up and royalty-free license, without right of sublicense, to use all logos, trademarks and service marks of the Authority solely for presentations or reports to the Authority or for internal KPMG presentations and intranet sites.

The Authority and KPMG acknowledge and agree that each shall comply with all applicable United States export control laws and regulations in the performance of each party's respective responsibilities under the Engagement Letter . Unless requested by KPMG to allow it to complete its audit, the Authority will not provide KPMG, or grant KPMG access to, (a) informat ion (including technical data or technology), verbally, electronically, or in hardcopy, (b) software or (c) hardware, that is controlled for export by the United States government under the Arms Export Control Act of 1976, Export Control Reform Act of 2018 , the International Traffic in Arms Regulations ("ITAR"), Export Administration Regulations ("EAR"), Department of Energy Part 810 Regulations or Nuclear Regulatory Commission Part 110 Regulations, except information, software or hardware that is classified as EAR99 under the EAR ("Export Controlled Information") . If KPMG requests Export Controlled Information from the Authority , the Authority shall prov ide KPMG with notice of provision of Export Controlled Informatio n at least 48 hours prior to providing such Export Controlled Information to KPMG .

KPMG is a limited liability partnership compris ing both certified public accountants and certain principals who are not licensed as certified public accountants . Such principals may participate in the engagements to provide the services described in this Engagement Letter.

The documentation for this engagement is the property of KPMG. If l<PMG receives a subpoena; other validly issued administrative, judicial, government or investigative regulatory demand or request; or other legal process requiring it to disclose the Autho rity's confidential information ("Legal Demand"), KPMG shall , unless prohibited by law or such Legal Demand, provide prompt written notice to the Authority of such Legal Demand in order to permit it to seek a protective order . So long as l(PMG gives notice as provided here in, KPMG shall be entitled to comply with such Legal Demand to the extent required by law, subject to any protective order or the like that may have been entered in the matter . In the event KPMG is requested or authorized by the Authority , or is required by law, rule, regulation or Legal Demand in a proceeding or investigation to which l<PMG is not a named party or respondent, to produce KPMG's documents or personnel as w itnesses or for interviews, or M'i· .. IG LLF' 1$ a Dcl.1-.-.-.:i ,,; 111 1.IIL'd l1;1 t,i ,;y p.i rllL' b lt1p ,11vl llm U.S. 1111,rnb.:-1 !i11 11111 tl m KPJ...1G n,'l\' ,;,J I; <•I ind ~p ,1 ndi~n1 111dnbm li1m <: ,1 ll11it1 l,1d \':11h ,P l .,n fq t,:••1 ,1:,,, , .. , (,, 'f•: ,1 ,1111, \ I ,.ri IG h 1•,:rP 1t1,,11,,l 0 ), d :l,·. 1·::- ,;1 1!tl·,·
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Santa Clara Stadium Authority
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otherwise to make information relating to the service under the Engagement Letter available to a third party, or the Authority, the Authority shall reimburse KPMG for its professional time, at its then-current standard hourly rates, and expenses , including reasonable attorneys' fees and expenses, incurred in producing documents or personnel or providing information pursuant to such requests , authorizations or requirements.

KPMG , as an accounting firm, has an obligation to comply with applicable professional standards . Certain professional standards, including AICPA Code of Professional Conduct Section 1. 700, "Confidential Client Information Rule," adopted by the American Institute of Certified Public Accountants and similar rules adopted by the ooards of accountancy of many states, prohibit the disclosure of client confidential information without client consent, except in limited circumstances . KPMG represents to the Authority that KPMG will treat the Authority's confidential information in accordance with applicable professional standards .

KPMG may work with and use the services of other members of the international KPMG network of independent firms and entities controlled by, or under common control with, one or more KPMG member firms (together with KPMG, the "KPMG Firms") to provide services to the Authority . The KPMG Firms, together with the entities compris ing KPMG International, shall be referred to herein as the "l<PMG Parties." In connection with the performance of services under this Engagement Letter, the l<PMG Firms may, in their discretion, utilize the services of third party service providers within or outside of the United States to complete the services under this Engagement Letter. KPMG Parties and such third parties may have access to your confidential information from offshore locations. In addition, KPMG uses third party service providers within and outside of the United States to provide, at its direction, back-office administrative and clerical, or analytical services to KPMG and these third party service providers may in the performance of such services have access to your confidential information . In particular, KPMG's audit technologies, software productivity tools and certain technology infrastructure and, necessarily, your confidential information, may be hosted in cloud environments operated by KPMG Parties or such third party service providers . In addition, for purposes of fulfilling our professional responsibilities, such as maintaining independence and performing conflict checks, the Authority will be listed as a client in internal KPMG Parties' systems accessible on a need to know basis to KPMG Parties. KPMG represents that it has technical, legal and/or other safeguards , measures and controls in place to protect your confidential information from unauthorized disclosure or use.

You also understand and agree that the KPMG Parties, with the assistance of third parties as outlined above, may use all the Authority information for other purposes consistent with our professional standards, such as improving the delivery or quality of audit and other services or technology to you and to other clients, thought leadership projects, to allow you and other clients to evaluate various business transactions and opportunities, and for use in presentations to you, other clients and non-clients. When your information is used outside of the KPMG Parties or such third parties assisting them as outlined above, the Authority will not be identified as the source of the information .

Except as otherwise provided for in this Engagement Letter, neither party may assign, transfer or delegate any of its rights, obligations, claims or proceeds from claims arising under or relating to this Engagement Letter (including by operation of law, in which case the assigning party will, to the extent legally permissible, give as much advance written notice as is reasonably practicable thereof) without the prior written consent of the other party, such consent not to be unreasonably withheld. Any assignment in violation hereof shall be null and void. ***** **
Our engagement herein is for the provision of annual audit services for the financial statements for the periods described in Appendix I of the financial statement audit engagement letter, and it is understood that such !~ F'/--,IG LLP 1s ,1 Dl•l,r:.',11,! l11 r,ited /1 ,1bil1!y f.•,11t111;1::l11p .irhl llw U.S 111l·1 1,l i. •r fir1n ,>f the J<Pl,IG 1101·., , ,r !; r,I uHl::pt:ud:int lll1' 11 ,l1£•r li,1n·• ;il! ili:lkd vnth !,Pi.Ki lnh:•11 ,11 u•I C,·,· 1 \ IJl1 ," I \,, fl.! (1 lt ,1 ,:rn 1!1,-11,01 ·; ,.. •;v. 1•:~ ,,111,1:
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Santa Clara Stadium Authority
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services are provided as a single annual engagem ent. Pursuant to our arrangement as reflected in this Engagement Letter we will provide the services set forth in Appendix I of the financial statement audit engagement letter as a single engagement for each of the Authority's subsequent fiscal years until either those charged with governance or we terminate this agreement, or mutually agree to the modification of its terms.

The fees for each subsequent year will be annually subject to negotiation and approval by those charged with governance.

Based upon our discussions with and representations of the Authority, we estimate that fees for these services is $15,000. This estimate is based on the level of experience of the individuals who will perform the services. In addition, expenses are billed for reimbursement as incurred. Circumstances encountered during the performance of these services that warrant additional time or expense could cause us to be unable to deliver the services within the above estimates . We will endeavor to notify you of any such circumstances as they are assessed .

Our fees and expenses will be billed every two weeks as charges are incurred . All invoices shall be paid within 30 days after the date thereof. In the event any invoice is not timely paid as set forth herein, then upon five days prior written notice to you, KPMG may terminate its performance hereunder and will not be responsible for any loss, costs, or expense thereby resulting. It is understood that neither our fees nor the payment thereof will be contingent upon the results of our engagement.

Where KPMG is reimbursed for expenses, it is KPMG's policy to bill clients the amount incurred at the time the good or service is purchased . If KPMG subsequently receives a volume rebate or other incentive payment from a vendor relating to such expenses, l<PMG does not credit such payment to the client. Instead, KPMG applies such payments to reduce its overhead costs, which costs are taken into account in determining KPMG's standard billing rates and certain transaction charges which may be charged to clients .

KPklG LLP ,-; a D,,1_w1arl, li11 1i1..: d l1 ,\;1ih!y p,111n~1,::h1r> .i11,1 lh,? U.S 11 h'1nl>~·1 l 1r rn LJ ! the r:Pr..lG 1,tll•:.c,1 I: r,f nvJ !~~' IHI.wt 111>.: 1111,cr fii 111-; ,1flil1ale d ·:11th f~:"J:.-1r, 111 1, 111 1 ,t: -1111 c.i,,i ,- , .1 11•, : 1 i r·1 1G l1:1t:111 11m,,., r 1 ,I ~h- ,-::- ,•11 111 .-.

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Very truly yours,

KPMG LLP
/j!J1)J,1.., /!, 11-,
Lisa Avis
Managing Director
This Engagement Letter correctly sets forth the understanding of the Santa Clara Stadium Authority .

ACCEPTED
Santa Clara Stadium Authority
~L
Authorized Signature
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Title
Date
KPMG UP 1s a Dt1!awart1 limited habihly pa11ne1sh1p and the U.S. memhe1 firm 1Jf lhe KPMG fhJl\\ 011: uf mdepiJndent ml!rtibe, firms alf1lialt1d with f~PMG l11tv111;ili<!1t1l Cunr,m.1t/l/,) n:Pl,IG lr1to1rn11i,,n;l\"j a Sv.-i:.~ ,1n1i1 y. ~
March 29, 2021
Santa Clara Stadium Authority
1500 Warburton Avenue
Santa Clara, California 95050
Attention: Finance Director

PRIVATE

KPMG LLP
500 Capitol Mall, Ste 2100
Sacramento, CA 95814-4754
Telephone + 1 916 448 4700
Fax +19165541199
kpmg .com
This Engagement Letter (Engagement Letter) sets forth our understanding of the terms and objectives of our engagement and the nature and limitations of the services KPMG LLP ("KPMG") will provide .

We will apply the following agreed-upon procedures to the Shared Stadium Expenses of Santa Clara Stadium Authority (the Authority) for the year ended March 31, 2021. The Authority is responsible for the Shared Stadium Expenses. The sufficiency of the procedures is solely the responsibility of the specified users of the report : the Santa Clara Stadium Authority . Consequently, we mal<e no representation regarding the sufficiency of the procedures either for the purpose for which our report is being prepared or for any other purpose .

Execution of this Engagement Letter will signify the Autho rity's agreement to the procedures and to its responsibility for the sufficiency of the procedures for its purposes .

1. Obtain the Stadium Lease Agreement by and between the Santa Clara Stadium Authority and Forty Niners Stadium Company LLC dated as of March 28, 2012, as amended and restated as of June 19, 2013 (Lease Agreement).

2. Obtain the following Shared Expense categories utilized by Management Co, select 100 non-labor expenditures, and agree them to the original source documents (i.e. vendor invoice, agreements, etc.) and to the Lease agreement in Procedure 1.
a. Day to day expenses (the Authority's share of 50%)
b. Capital repairs and capital expenditures (the Authority 's share of 50%) c. Groundsl<eeping services (the Authority's share of 30%)

3. For SSL Sales and Services, select 20 Commission and 10 Bonus payouts , trace and agreed the amount to the payroll report, employment agreement or payout approval, and verify that the expenditure was reasonable and properly allocated to the Stadium Authority as agreed in Procedure 1.

4. For non-SSL Sales and Services transactions , selec t 20 Bonus and/or Commission payouts, trace and agreed the amount to payroll report, employment agreement or payout approval, and verify that the expenditure was reasonable and properly allocated to the Stadium Authority as agreed in Procedure 1.

5. For fulltime labor transactions, select 30 payouts and 10 accruals , trace and agree the sample to the original source documents, verify that the expense was properly charged and allocated to the Stadium Authority as agreed in Procedure .
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Santa Clara Stadium Authority
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6. Review the Shared Expense details and determine if there are any Related Party transactions. If so, then select 10 samples, trace the payout to the original source documents or agreements, verify that there is no conflict of interest and that the expenditure was reasonable and properly allocated to the Stadium Authority as agreed in Procedure 1.

The Authority acknowledges its responsibility for determining the scope of the engagement, including the subject matter and criteria used in evaluating the subject matter, agreeing to the procedures and the sufficiency of such procedures for the Authority's purposes. At the conclusion of the engagement, the Authority agrees to supply us with a representation letter that will include the Authority's assertion about the Shared Expenses based on the criteria and will include:
a. a statement that all known matters contradicting the subject matter or assertion and any communication from regulatory agencies or others affecting the subject matter or assertion have been disclosed to us including communications received between the end of the period addressed in the written assertion and the date of our report,
b. a statement acknowledging its responsibility for the subject matter and the assertion, selecting the criteria, when applicable, and determining that such criteria are appropriate for its purposes, c. a statement that it has provided us with access to all records relevant to the subject matter and the agreed-upon procedures, and
d. other matters as we may deem appropriate.

If such a representation letter is not provided, which includes the aforementioned assertion, it may be necessary for us to withdraw from the engagement.

Our engagement to apply agreed-upon procedures will be performed in accordance with the attestation standards established by the American Institute of Certified Public Accountants . Because the agreed-upon procedures referred to above do not constitute an examination or review, we will not express an opinion or conclusion on Shared Expenses of the Authority. Our report will include a statement to that effect. In addition, we have no obligation to perform any procedures beyond those referred to above.

Our written independent accountants' agreed-upon procedures report will include a list of the procedures performed (or reference thereto) and the related findings. Our report will also contain a paragraph indicating that had we performed additional procedures, other matters might have come to our attention that would·have been reported to you. We have no responsibility to update our report for events and circumstances occurring after the date of such report.

Our report is intended solely for the use of the Authority, and is not intended for use by those who have not agreed to the procedures and taken responsibility for the sufficiency of the procedures for their purposes. Our report will include a statement to that effect. If you request that additional specified users of the report be added, we will require that they acknowledge, in writing, their agreement with the procedures and their responsibility for the sufficiency of the procedures for their purposes.

Santa Clara Stadium Authority
March 30, 2021

Page 3 of 7 ends

Because of the importance of management's representations to the effective performance of our services, the Authority hereby releases KPMG and its personnel from and against any and all claims, liabilities, costs, and expenses relating to our services under this Engagement Letter attributable to any misrepresentations in the representation letter referred to above. The provisions of this paragraph shall apply regardless of the form of action, damage, claim, liability, cost, expense, or loss asserted, whether in contract, statute, tort (including but not limited to negligence) or otherwise.

The Authority will indemnify, defend, and hold KPMG and its personnel harmless from and against any and all claims, liabilities, costs, and expenses asserted against KPMG by any third party to the extent resulting from or attributable to (i) that party's use or possession of, or reliance upon, KPMG's report or reference to KPMG's services hereunder as a result of the Authority's disclosure of such report or reference thereto other than to the specified user(s) or (ii) any misrepresentations in the representation letter referred to above. The foregoing indemnification obligation shall apply regardless of whether the third party claim alleges a breach of contract, violation of statute or tort (including without limitation negligence) by KPMG.

The Authority hereby releases KPMG and its personnel from and against any and all claims, liabilities, costs, and expenses relating to our services under this Engagement Letter, except to the extent determined to have resulted from the gross negligence of KPMG personnel.

Either party may seek to enforce any written agreement reached by the parties during mediation in any court of competent jurisdiction.

Other Matters
In the event that any tern, or provision of this Engagement Letter shall be held to be invalid, void or unenforceable, then the remainder of the Engagement Letter shall not be affected, and each such term and provision shall be valid and enforceable to the fullest extent permitted by law.

Page 4 of 7 ends

fault of KPMG. KPMG will employ commercially reasonable efforts and take appropriate precautions to protect the privacy and confidentiality of transmitted information .

In an effort to facilitate efficient communication between KPMG and the Authority related to the attest engagement and to track engagement progress, KPMG may provide the Authority with access to certain online tools. If such access is provided to the Authority, the Authority shall be responsible for: (i) its users' access and use of such tools (including the information its users may upload to such tools and compliance with all laws and regulations applicable to use or access by the Authority's users outside of the United States (e.g. export control and data privacy laws and regulations)), and (ii) protecting the security of the account credentials in its possession for each user including timely informing KPMG when the Authority individuals' access should be removed. The Authority acknowledges that it shall not provide third parties (agents or contractors) with access to such tools without KPMG's written consent, use such tools as a system of record, nor use such tools other than for purposes of the attest engagement. The KPMG online tools include technology licensed from Microsoft, and the Authority's use of such Microsoft technology is subject lo the Microsoft End-User Terms available at http://www .kpmqinfo.com/NDPPS/media/docs/144210-1 A NAS MicrosoftEnd-UserTerms .pdf.

Except as permitted by law or as set forth in this paragraph, neither party shall acquire hereunder any right to use the name or logo of the other party or any part thereof, and any such use shall require the express written consent of the owner party. The Authority agrees that l<PMG may list the Authority as a client in KPMG's internal and external marketing materials, including KPMG websites and social media, indicating the general services rendered (e.g., "[the Santa Clara Stadium Authority] is an Audit client of KPMG LLP"). Further, for purposes of the services described in this Engagement Letter only, the Authority hereby grants to KPMG a limited, revocable, non-exclusive, non-transferable, paid up and royalty-free license, without right of sublicense, to use all logos, trademarks and service marks of the Authority solely for presentations or reports to the Authority or for internal KPMG presentations and intranet sites.

The Authority and KPMG acknowledge and agree that each shall comply with all applicable United States export control laws and regulations in the performance of each party's respective responsibilities under the Engagement Letter. Unless requested by KPMG to allow it to complete its audit, the Authority will not provide KPMG, or grant KPMG access to, (a) information (including technical data or technology), verbally, electronically, or in hardcopy, (b) software or (c) hardware, that is controlled for export by the United States government under the Arms Export Control Act of 1976, Export Control Reform Act of 2018, the International Traffic in Arms Regulations ("ITAR"), Export Administration Regulations ("EAR"), Depariment of Energy Part 810 Regulations or Nuclear Regulatory Commission Part 110 Regulations, except information, software or hardware that is classified as EAR99 under the EAR ("Export Controlled Information") . If KPMG requests Export Controlled Information from the Authority, the Authority shall provide KPMG with notice of provision of Export Controlled Information at least 48 hours prior to providing such Export Controlled Information to KPMG .

The documentation for this engagement is the property of KPMG. If KPMG receives a subpoena; other validly issued administrative, judicial, government or investigative regulatory demand or request; or other legal process requiring it to disclose the Authority's confidential information ("Legal Demand"), l<PMG shall, unless prohibited by law or such Legal Demand, provide prompt written notice to the Authority of such Legal Demand in order to permit it to seek a protective order. So long as KPMG gives notice as provided herein, KPMG shall be entitled to comply with such Legal Demand to the extent required by law, subject to any protective order or the like that may have been entered in the matter. In the event KPMG is requested or authorized by the Authority, or is Santa Clara Stadium Authority
March 30, 2021

Page 5 ends

required by law, rule, regulation or Legal Demand in a proceeding or investigation to which KPMG is not a named party or respondent, to produce KPMG's documents or personnel as witnesses or for interviews, or otherwise to make information relating to the service under the Engagement Letter available to a third party, or the Authority, the Authority shall reimburse KPMG for its professional time, at its then-current standard hourly rates, and expenses, including reasonable attorneys' fees and expenses , incurred in producing documents or personnel or providing information pursuant to such requests, authorizations or requirements.

KPMG, as an accounting firm , has an obligation to comply with applicable professional standards . Certain professional standards, including AICPA Code of Professional Conduct Section 1.700, "Confidential Client Information Rule," adopted by the American Institute of Certified Public Accountants and similar rules adopted by the boards of accountancy of many states, prohibit the disclosure of client confidential information without client consent, except in limited circumstances. KPMG represents to the Authority that KPMG will treat the Authority's confidential information in accordance with applicable professional standards.

KPMG may work with and use the services of other members of the international KPMG network of independent firms and entities controlled by, or under common control with, one or more KPMG member firms (together with KPMG, the "KPMG Firms") to provide services to the Authority. The KPMG Firms, together with the entities comprising l<PMG International, shall be referred to herein as the "KPMG Parties." In connection with the performance of services under this Engagement Letter, the KPMG Firms may, in their discretion, utilize the services of third party service providers within or outside of the United States to complete the services under this Engagement Letter. KPMG Parties and such third parties may have access to your confidential information from offshore locations. In addition, l<PMG uses third party service providers within and outside of the United States to provide, at its direction, back-office administrative and clerical, or analytical services to KPMG and these third party service providers may in the performance of such services have access to your confidential information . In particular, KPMG's audit technologies, software productivity tools and certain technology infrastructure and, necessarily, your confidential information, may be hosted in cloud environments operated by KPMG Parties or such third party service providers . In addition, for purposes of fulfilling our professional responsibilities, such as maintaining independence and performing conflict checks, the Authority will be listed as a client in internal KPMG Parties' systems accessible on a need to know basis to KPMG Parties. KPMG represents that it has technical, legal and/or other safeguards, measures and controls in place to protect your confidential information from unauthorized disclosure or use.

You also understand and agree that the KPMG Parties, with the assistance of third parties as outlined above, may use all the Authority information for other purposes consistent with our professional standards, such as improving the delivery or quality of audit and other services or technology to you and to other clients, thought leadership projects, to allow you and other clients to evaluate various business transactions and opportunities, and for use in presentations to you, other clients and non-clients. When your information is used outside of the KPMG Parties or such third parties assisting them as outlined above, the Authority will not be identified as the source of the information.

Page 6 ends

Our engagement herein is for the provision of annual audit services for the financial statements for the periods described in Appendix I of the financial statement audit engagement letter, and it is understood that such services are provided as a single annual engagement. Pursuant to our arrangement as reflected in this Engagement Letter we will provide the services set forth in Appendix I of the financial statement audit engagement letter as a single engagement for each of the Authority's subsequent fiscal years until either those charged with governance or we terminate this agreement, or mutually agree to the modification of its terms .

The fees for each subsequent year will be annually subject to negotiation and approval by those charged with governance.

Based upon our discussions with and representations of the Authority, we estimate that fees for these services is $20,000. This estimate is based on the level of experience of the individuals who will perform the services. In addition, expenses are billed for reimbursement as incurred. Circumstances encountered during the performance of these services that warrant additional time or expense could cause us to be unable to deliver the services within the above estimates. We will endeavor to notify you of any such circumstances as they are assessed.

Our fees and expenses will be billed every two weeks as charges are incurred. All invoices shall be paid within 30 days after the date thereof. In the event any invoice is not timely paid as set forth herein, then upon five days prior written notice to you, KPMG may terminate its performance hereunder and will not be responsible for any loss, costs, or expense thereby resulting. It is understood that neither our fees nor the payment thereof will be contingent upon the results of our engagement.

Where KPMG is reimbursed for expenses, it is KPMG's policy to bill clients the amount incurred at the time the good or service is purchased. If KPMG subsequently receives a volume rebate or other incentive payment from a vendor relating to such expenses, KPMG does not credit such payment to the client. Instead, KPMG applies such payments to reduce its overhead costs, which costs are taken into account in determining KPMG's standard billing rates and certain transaction charges which may be charged to clients.

All fees, charges and other amounts payable to l<PMG under the Engagement Letter do not include any sales, use, excise, value added, income or other applicable taxes, tariffs or duties, payment of which shall be the Authority's sole responsibility, excluding any applicable taxes based on KPMG's net income or taxes arising from the employment or independent contractor relationship between KPMG and its personnel.

Santa Clara Stadium Authority
March 30, 2021

Page 7 of 7 ends

Very truly yours,
l<PMG LLP
a,4& A,'tv
Lisa Avis
Managing Director
This Engagement Letter correctly sets forth the understanding of the Santa Clara Stadium Authority.

ACCEPTED
Santa Clara Stadium Authority
Authorized Signature
s+~.v~ fh_th~r6 jQ.'1c,s\) ,r£r
Title
Ara·, l 23 1 '21' 2 l
Date

EXHIBIT B

SCHEDULE OF FEES
Contractor will bill Authority on a monthly basis for Services provided by Contractor during the preceding month on an invoice and in a format approved by Authority and subject to verification and approval by Authority. Authority will pay Contractor within thirty (30) days of Authority's receipt of an approved invoice.

Fee Schedule is per Appendix I in the Contractor's proposal entitled, "Engagement Letter" dated March 30, 2021, which is attached to this Exhibit Band incorporated by this reference. In no event shall the amount billed to Authority by Contractor for services under this Agreement exceed seven hundred fifty-four thousand five hundred and fifty four dollars (including expenses) for audit services for fiscal year ending March 31, 2021 thru March 31, 2025. All fees are subject to annual budget appropriations.

Agreement with KPMG LLP/Exhibit B-Schedule of Fees
Rev. 07-01-18

Page 1 ends

EXHIBIT C

INSURANCE REQUIREMENTS

INSURANCE COVERAGE REQUIREMENTS

FOR PROFESSIONAL SERVICES
Without limiting the Consultant's indemnification of the Santa Clara Stadium Authority ("Stadium Authority"), and prior to commencing any of the Services required under this Agreement, the Consultant shall provide and maintain in full force and effect during the period of performance of the Agreement and for twenty-four (24) months following acceptance by the Stadium Authority, at its sole cost and expense, the following insurance policies from insurance companies authorized to do business in the State of California. These policies shall be primary insurance as to the Stadium Authority so that any other coverage held by the Stadium Authority shall not contribute to any loss under Consultant's insurance. The minimum coverages, provisions and endorsements are as follows:

A. COMMERCIAL GENERAL LIABILITY INSURANCE

1. Commercial General Liability Insurance policy which provides coverage at least as broad as Insurance Services Office form CG 00 01. Policy limits are subject to review, but shall in no event be less than, the following:
$1,000,000 Each Occurrence
$2,000,000 General Aggregate
$2,000,000 Products/Completed Operations Aggregate
$1,000,000 Personal Injury

2. Exact structure and layering of the coverage shall be left to the discretion of Consultant; however, any excess or umbrella policies used to meet the required limits shall be at least as broad as the underlying coverage and shall otherwise follow form.

3. The following provisions shall apply to the Commercial Liability policy as well as any umbrella policy maintained by the Consultant to comply with the insurance requirements of this Agreement:
a. Coverage shall be on a "pay on behalf' basis with defense costs payable in addition to policy limits;
b. There shall be no cross liability exclusion which precludes coverage for claims or suits by one insured against another; and c. Coverage shall apply separately to each insured against whom a claim is made or a suit is brought, except with respect to the limits of liability.

Agreement with KPMG LLP/Exhibit C-lnsurance Requirements Rev. 07-01-18

Page 1 ends

B. BUSINESS AUTOMOBILE LIABILITY INSURANCE
Business automobile liability insurance policy which provides coverage at least as broad as ISO form CA 00 01 with policy limits a minimum limit of not less than one million dollars ($1,000,000) each accident using, or providing coverage at least as broad as, Insurance Services Office form CA 00 01. Liability coverage shall apply to all owned (if any), non-owned and hired autos.

In the event that the Work being performed under this Agreement involves transporting of hazardous or regulated substances, hazardous or regulated wastes and/or hazardous or regulated materials, Consultant and/or its subcontractors involved in such activities shall provide coverage with a limit of one million dollars ($1,000,000) per accident covering transportation of such materials by the addition to the Business Auto Coverage Policy of Environmental Impairment Endorsement MCS90 or Insurance Services Office endorsement form CA 99 48, which amends the pollution exclusion in the standard Business Automobile Policy to cover pollutants that are in or upon, being transported or towed by, being loaded onto, or being unloaded from a covered auto.

C. WORKERS' COMPENSATION

1. Workers' Compensation Insurance Policy as required by statute and employer's liability with limits of at least one million dollars ($1,000,000) policy limit Bodily Injury by disease, one million dollars ($1,000,000) each accident/Bodily Injury and one million dollars ($1,000,000) each employee Bodily Injury by disease.

2. The indemnification and hold harmless obligations of Consultant included in this Agreement shall not be limited in any way by any limitation on the amount or type of damage, compensation or benefit payable by or for Contractor or any subcontractor under any Workers' Compensation Act(s), Disability Benefits Act(s) or other employee benefits act(s).

3. This General Liability policy must include a Waiver of Subrogation in favor of the Stadium Authority, its governing board, subordinate boards, officers, employees, volunteers and agents.

D. PROFESSIONAL LIABILITY
Professional Liability or Errors and Omissions Insurance as appropriate shall be written on a policy form coverage specifically designed to protect against negligent acts, errors or omissions of the Consultant. Coverage shall be in an amount of not less than one million dollars ($1,000,000) per claim or two million dollars ($2,000,000) aggregate. Any coverage containing a deductible or self retention must first be approved in writing by the Stadium Authority General Counsel's Office.

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E. COMPLIANCE WITH REQUIREMENTS
All of the following clauses and/or endorsements, or similar provisions, must be part of each commercial general liability policy, and each umbrella or excess policy.

1. Additional Insureds. The Santa Clara Stadium Authority, its governing board, officers, employees, and agents ("Indemnified Parties") are hereby added as additional insureds in respect to liability arising out of Consultant's work for the Stadium Authority.

2. Each insurance policy provided by Consultant shall contain language or be endorsed to contain wording making it primary insurance as respects to, and not requiring contribution from, any other insurance which the Indemnified Parties may possess, including any self-insurance or self insured retention they may have. Any other insurance that the Indemnified Parties may possess shall be considered excess insurance only and shall not be called upon to contribute with Consultant's insurance.

3. Cancellation.
a. Each insurance policy shall contain language or be endorsed to reflect that no cancellation or modification of the coverage provided due to non-payment of premiums shall be effective until written notice has been given to the Stadium Authority at least thirty (30) days prior to the effective date of such modification or cancellation.

In the event of non-renewal, written notice shall be given at least ten (10) days prior to the effective date of non-renewal. b. Each insurance policy shall contain language or be endorsed to reflect that no cancellation or modification of the coverage provided for any cause save and except non-payment of premiums shall be effective until written notice has been given to the Stadium Authority at least thirty (30) days prior to the effective date of such modification or cancellation. In the event of non-renewal, written notice shall be given at least thirty (30) days prior to the effective date of non-renewal.

4. Other Endorsements. Other endorsements may be required for policies other than the commercial general liability policy if specified in the description of required insurance set forth in Sections A through E of this Exhibit C, above.

F. ADDITIONAL INSURANCE RELATED PROVISIONS
Consultant and the Stadium Authority agree as follows:

Agreement with KPMG LLP/Exhibit C-lnsurance Requirements Rev. 07-01-18

Page 3 ends

1. Consultant agrees to ensure that subcontractors, and any other party involved with the Services, who is brought onto or involved in the performance of the Services by Consultant, provide the same minimum insurance coverage required of Consultant, except as with respect to limits. Consultant agrees to monitor and review all such coverage and assumes all responsibility for ensuring that such coverage is provided in conformity with the requirements of this Agreement. Consultant agrees that upon request by the Stadium Authority, all agreements with, and insurance compliance documents provided by, such subcontractors and others engaged in the project will be submitted to the Stadium Authority for review.

2. Consultant agrees to be responsible for ensuring that no contract used by any party involved in any way with the project reserves the right to charge the Stadium Authority or Consultant for the cost of additional insurance coverage required by this Agreement. Any such provisions are to be deleted with reference to the Stadium Authority. It is not the intent of the Stadium Authority to reimburse any third party for the cost of complying with these requirements. There shall be no recourse against the Stadium Authority for payment of premiums or other amounts with respect thereto.

3. The Stadium Authority reserves the right to withhold payments from the Consultant in the event of material noncompliance with the insurance requirements set forth in this Agreement.

G. EVIDENCE OF COVERAGE
Prior to commencement of any Services under this Agreement, Consultant, and each and every subcontractor (of every tier) shall, at its sole cost and expense, provide and maintain not less than the minimum insurance coverage with the endorsements and deductibles indicated in this Agreement. Such insurance coverage shall be maintained with insurers, and under forms of policies, satisfactory to the Stadium Authority and as described in this Agreement.

Consultant shall file with the Stadium Authority all certificates and blanket endorsements for the required insurance policies for the Stadium Authority's approval as to adequacy of the insurance protection.

H. EVIDENCE OF COMPLIANCE
Consultant or its insurance broker shall provide the required proof of insurance compliance, consisting of Insurance Services Office (ISO) endorsement forms or their equivalent and the ACORD form 25-S certificate of insurance (or its equivalent), evidencing all required coverage, and be delivered to the Stadium Authority through its representative as set forth below, at or prior to execution of this Agreement. Unless otherwise required by the terms of this Agreement, all certificates, endorsements, coverage verifications and other items required to be delivered to the Stadium Authority pursuant to this Agreement shall be mailed to:

Agreement with KPMG LLP/Exhibit C-lnsurance Requirements Rev. 07-01-18

Page 4 ends

Santa Clara Stadium Authority [Finance Department]
c/o Ebix, Inc.

P.O. Box 100085 - S2
Duluth, GA 30096
Telephone number: 951-766-2280
Fax number: 770-325-0409
or 1 Ebix Way
John's Creek, GA 30097
Email address: [email protected]
I. QUALIFYING INSURERS
All of the insurance companies providing insurance for Consultant shall have, and provide written proof of, an A. M. Best rating of at least A minus 6 (A- VI) or shall be an insurance company of equal financial stability that is approved by the Stadium Authority or its insurance compliance representatives.

Agreement with KPMG LLP/Exhibit C-lnsurance Requirements Rev. 07-01-18

Page 5 ends

Amendment No. 1 to Agreement/*insert Contractor’s name Page 1 Rev. 10/25/19
Ebix Insurance No. *S200002724

AMENDMENT NO. 1

TO THE AGREEMENT FOR SERVICES

BETWEEN THE

SANTA CLARA STADIUM AUTHORITY
AND

KPMG LLP

PREAMBLE
This agreement (“Amendment No. 1”) is entered into between the Santa Clara Stadium Authority (Authority), a joint powers agency created pursuant to Section 6532 of the California Government Code (Authority) and KPMG LLP, a Delaware registered limited liability partnership, (Contractor). Authority and Contractor may be referred to individually as a “Party” or collectively as the “Parties” or the “Parties to this Agreement.”

RECITALS
A. The Parties previously entered into an agreement entitled “Agreement for Services Between the Santa Clara Stadium Authority and KPMG LLP, dated June 25, 2021 (Agreement); and
B. The Parties entered into the Agreement for the purpose of having Contractor provide financial statement and agreed-upon procedures audits, and the Parties now wish to amend the Agreement to include ad hoc audit projects and increase the maximum compensation by One Hundred Thousand Dollars ($100,000) for a new revised not to exceed amount of Eight Hundred Fifty-Four Thousand Five Hundred and Fifty-Four Dollars ($854,554).

NOW, THEREFORE, the Parties agree as follows:

AMENDMENT TERMS AND CONDITIONS

1. Section 3 of the Agreement, entitled “Scope of Services & Performance Schedule” is amended to read as follows:
“3. SCOPE OF SERVICES & PERFORMANCE SCHEDULE
Contractor shall perform those Services specified in Exhibit A within the time stated in Exhibit A and other ad hoc audit projects. Time is of the essence.”

2. Section 6 of the Agreement, entitled “Compensation and Payment” is amended to read as follows:
“6. COMPENSATION AND PAYMENT
Amendment No. 1 to Agreement/KPMG LLP Page 2
Rev. 10/25/2019
In consideration for Contractor’s complete performance of Services, Authority shall pay Contractor for all materials provided and Services rendered by Contractor in accordance with Exhibit B, entitled “SCHEDULE OF FEES.” The maximum compensation of this Agreement is Eight Hundred Fifty-Four Thousand Five Hundred and Fifty-Four Dollars ($854,554), subject to budget appropriations, which includes all payments that may be authorized for Services and for expenses, supplies, materials and equipment required to perform the Services.”

3. Exhibit B of the Agreement, entitled “Schedule of Fees” is amended to read as follows:
“EXHIBIT B SCHEDULE OF FEES
Contractor will bill Authority on a monthly basis for Services provided by Contractor during the preceding month on an invoice and in a format approved by Authority and subject to verification and approval by Authority. Authority will pay Contractor within thirty (30) days of Authority’s receipt of an approved invoice.

Fee Schedule is per Appendix I in the Contractor’s proposal entitled, “Engagement Letter” dated March 30, 2021, which is attached to this Exhibit B and incorporated by this reference. In no event shall the amount billed to Authority by Contractor for services under this Agreement exceed Eight Hundred Fifty-Four Thousand Five Hundred and Fifty-Four Dollars ($854,554), including expenses, for audit and other ad hoc audit projects for fiscal year ending March 31, 2021 thru March 31, 2025. All fees are subject to annual budget appropriations.”

4. Except as set forth herein, all other terms and conditions of the Agreement shall remain in full force and effect. In case of a conflict in the terms of the Agreement and this Amendment No. 1, the provisions of this Amendment No. 1 shall control.

The Parties acknowledge and accept the terms and conditions of this Amendment No. 1 as evidenced by the following signatures of their duly authorized representatives.

Amendment No. 1 to Agreement/KPMG LLP Page 3
Rev. 10/25/2019

SANTA CLARA STADIUM AUTHORITY
a Joint Exercise of Powers Entity, created through Government Code sections 6500 et seq.

Approved as to Form: Dated:

GLEN R. GOOGINS
Stadium Authority Counsel

JŌVAN D. GROGAN
Executive Director
1500 Warburton Avenue
Santa Clara, CA 95050
Telephone: (408) 615-2210
Fax: (408) 241-6771
“AUTHORITY”

KPMG LLP
a Delaware Registered Limited Liability Partnership

Dated:

By (Signature):

Name: Lisa Avis
Title: Managing Director
Principal Place of
Business Address:
500 Capitol Mall, Ste.2100
Sacramento, CA 95814
Email Address: [email protected]
Telephone: (916) 551-3115
Fax: (916) 554-1199
“CONTRACTOR”

City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
24-201 Agenda Date: 5/28/2024

REPORT TO COUNCIL

SUBJECT
Public Hearing: Action on Resolutions Approving Water, Sewer and Recycled Water Amended Rates to be Effective July 1, 2024

COUNCIL PILLAR
Deliver and Enhance High Quality Efficient Services and Infrastructure

BACKGROUND
In November 1996, California voters approved Proposition 218, which amended the State Constitution to establish a new category of fees and charges referred to as “property-related fees and charges” and created new procedural requirements for their adoption. Under these requirements, proposed fees or charges for water, sewer, and recycled water service are subject to a written notice and public hearing not less than 45 days after the mailing of the notice as well as an explanation of the protest procedure for customers who may wish to formally protest their adoption. At the public hearing, all protests against the proposed fees or charges are tabulated and if protests are presented by a majority of utility customers (50% plus 1), the fees or charges cannot be imposed. If there is not a majority of utility customers protesting the proposed fees or charges, Council can make and act on a motion to approve increases. The required number of protests needed to deny Council the option to approve rate increases is 13,888.

The City updates the rates it charges Santa Clara residents and businesses for water, sewer, and recycled water services on an annual basis. Each of these three utilities are self-sustaining and rates are adopted to pay for revenue requirements associated with operations and maintenance (O&M) costs, capital improvement program (CIP) projects and, when possible and feasible, the funding for reserves associated with the respective utility systems.

Staff is seeking approval of the attached resolutions assigning water and recycled water rates (Attachment 1), and sewer rates (Attachment 2) to be effective July 1, 2024.

The Water & Sewer Utilities Department engaged Black & Veatch Management Consulting, LLC (Black & Veatch) to conduct an ongoing cost-of-service study of water, sewer, and recycled water rates charged to City residents and businesses.

DISCUSSION
In the fall of 2021, the City conducted a competitive procurement, and in December 2021, entered into a new agreement with Black & Veatch for consulting services related to rate setting for the next five (5) years.

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three years of rates and created a ten-year financial plan to fund O&M and capital expenditures with adequate reserves. Black & Veatch also updated the Rate Study (Attachment 3) to reflect funding reserves analysis and financial plans on cost-of-service analyses. The methodology in the rate study allocates cost components of each utility’s operation and capital costs to customers and customer classes within each utility based on their use of the respective utilities.

Water Rates
The potable water rates charged to Santa Clara residents and businesses are primarily driven by wholesale water purchases, O&M costs, and capital improvements for rehabilitation and replacement of aging infrastructure. The San Francisco Public Utilities Commission (SFPUC) voted on May 14, 2024 to raise the rates it charges to its wholesale customers by 8.8% for FY 2024/25. On May 14, 2024, the Santa Clara Valley Water District (Valley Water) Board adopted a 12.9% increase of wholesale water rates for FY 2024/25. The City’s Water Utility is proposing to complete approximately $25.7 million in CIP projects over the next five years to address aging infrastructure and ensure ongoing water quality standards are met. These costs, including O&M costs, have resulted in the need to propose an 11.6% increase in the potable water rate. For an average residential customer that uses 12 units (1 unit=1 HCF=748 gallons) of water, the monthly water bill will increase by $11.16.

In addition, there is an 8.8% average increase in minimum monthly charges for the water meter based on its size.

Sewer Rates
The sewer rates charged to Santa Clara customers are primarily driven by the City’s contribution to the capital and O&M costs at the San José-Santa Clara Regional Wastewater Facility (RWF), of which the City is a co-owner. O&M and capital costs on the City’s collection system are also drivers of sewer rates. The RWF has been undergoing a large rehabilitation/replacement project that may last upwards of 30 years. Santa Clara’s share of this project’s costs is currently budgeted to be approximately $86 million over the next five (5) years. The Sewer Utility issued $35 million in installment sale financing Certificates of Participation (COPs) in October of 2023 in an effort to mitigate the rate impacts of the RWF capital project and to ensure generational equity as the project is funded. The costs associated with the Sewer Utility have resulted in the need to propose an 8.5% increase for single family residential customers. Based on the cost-of-service analysis, multi-family residential customers will see a proposed 7.5% increase to their sewer rates. Non-residential customers will see a proposed average 13.7% increase to their sewer rates, however the actual increase for individual customers will be based on their customer class.

If proposed rates are adopted, single family residential customers will see their monthly sewer bill increase by $4.09 and multi-family residential customers will see their monthly sewer bill increase by $3.43.

Recycled Water Rates
The recycled water rates charged to City customers are primarily driven by wholesale rates charged by the City of San José through South Bay Water Recycling (SBWR). SBWR’s rates are tied to the groundwater charge levied by Valley Water. The rate charged to the City of Santa Clara to purchase recycled water will increase by 13.6%. These costs along with O&M costs, have resulted in the need to propose an 11.8% increase in the recycled water rate. Recycled water is used by non-residential customers for irrigation, dual plumbing, and various industrial processes.

ENVIRONMENTAL REVIEW
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24-201 Agenda Date: 5/28/2024
The action being considered is not subject to the California Environmental Quality Act (“CEQA”) pursuant to Public Resources Code section 21080(b)(8) and CEQA Guidelines section 15273 as it concerns the establishment, modification, structuring, restructuring, or approval of rates, tolls, fares, or other charges that are for the purpose of (A) meeting operating expenses, (B) purchasing or leasing supplies, equipment, or materials, (C) meeting financial reserve needs and requirements, or (D) obtaining funds for capital projects necessary to maintain service within existing service areas.

As described above, the proposed rate increases will cover operations and maintenance (O&M) costs, capital improvement program (CIP) projects and the funding of reserves associated with the respective utilities’ systems.

FISCAL IMPACT
The proposed rates are reflected in the FY 2024/25 amended Water & Sewer Utilities operating budget, recommended as part of the FY 2024/25 and FY 2025/26 Proposed Capital Improvement Budget. Failure to adopt the proposed rates will result in lower than expected revenues and the need to amend the upcoming budgets by further drawing down reserve funds for the three utilities and to change the ten-year financial outlook for each of the utilities.

COORDINATION
This report has been coordinated with the Finance Department, City Manager’s Office and the City Attorney’s Office.

PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email [email protected] <mailto:[email protected]> .

Additionally, on April 8, 2024, which is not less than 45 days before the public hearing, as required by Article XIII D of the California Constitution (Proposition 218), notices were mailed to all 27,773 current utility customers in the City Utility Billing System. Also, staff reached out to utility customers via social media platforms and through the utility rates page on the City’s website.

ALTERNATIVES

1. Adopt the Proposed Resolutions Establishing Water Rate Schedule 2024-01, Recycled Water Rate Schedule 2024-02 and Sewer Rate Schedule S-24

2. Do Not Adopt the Proposed Resolutions Establishing Water Rate Schedule 2024-01, Recycled Water Rate Schedule 2024-02 and Sewer Rate Schedule S-24 and Direct Staff to Return to Council with Necessary Budget Amendments.

RECOMMENDATION
Alternative 1: Adopt the Proposed Resolutions Establishing Water Rate Schedule 2024-01, Recycled Water Rate Schedule 2024-02 and Sewer Rate Schedule S-24 Reviewed by: Gary Welling, Director, Water & Sewer Utilities Approved by: Jovan D. Grogan, City Manager
City of Santa Clara Printed on 5/24/2024Page 3 of 4
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24-201 Agenda Date: 5/28/2024

ATTACHMENTS

1. Proposed Resolution Establishing Water Rate Schedule 2024-01 & Recycled Water Rate Schedule 2024-02

2. Proposed Resolution Establishing Sewer Rate Schedule S-24

3. Draft 2024 Water and Sewer Rate Study Report by Black & Veatch Management Consulting, LLC City of Santa Clara Printed on 5/24/2024Page 4 of 4
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Resolution/Establishing Water Rate Schedule 2024-01
& Recycled Water Rate Schedule 2024-02
Rev: 11/22/17

Page 1 of 3 ends

RESOLUTION NO. 24-XXX

A RESOLUTION OF THE CITY OF SANTA CLARA, CALIFORNIA,
ESTABLISHING WATER RATE SCHEDULE 202 4-01 AND
RECYCLED WATER RATE SCHEDULE 202 4-02 FOR CITY

SERVICE

BE IT RESOLVED BY THE CITY OF SANTA CLARA AS FOLLOWS:

WHEREAS, all water furnished to utility customers by the City of Santa Clara shall be charged, paid for and supplied only in accordance with such applicable schedules, rules and regulations as the City Council shall adopt pursuant to the provision of Section 13.15.020 [entitled "Water Rates to be Determined by City Council"] of "The Code of the City of Santa Clara, California" ("SCCC") and the Rules and Regulations for Water Service of the City of Santa Clara; WHEREAS, Article XIII D of the California Constitution requires that increases to property related fees and charges, including water service rates, be approved by the City Council at a Public Hearing conducted not less than 45 days after mailing notice of the proposed rate increase;
WHEREAS, notice of a Public Hearing to be held on May 28, 2024 was mailed to water utility customers on April 8, 2024, which is more than 45 days prior to the Public Hearing; WHEREAS, the notice was sent to 27,773 utility customers; WHEREAS, the Council has reviewed the Water Rate Schedule 2024-01 and Recycled Water Rate Schedule 2024-02 (the "Rate Schedules") attached and incorporated into this Resolution by reference;
WHEREAS, the amounts shown on the Rate Schedules reflect the actual costs to provide utility services; and,
WHEREAS, on May 28, 2024, the Council conducted a Public Hearing, at which it reviewed all protests regarding the proposed rate increases.
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Resolution/Establishing Water Rate Schedule 2024-01
& Recycled Water Rate Schedule 2024-02
Rev: 11/22/17

Page 2 of 3 ends

NOW THEREFORE, BE IT FURTHER RESOLVED BY THE CITY OF SANTA CLARA AS FOLLOWS:

1. That based on a tabulation of all the protests received prior to the close of the Public Hearing, XX protests were received, which does not constitute a majority of affected water utility customers.

2. In accordance with Article XIIID § 6 of the California Constitution and as set forth in the accompanying Agenda Report, incorporated herein by this reference, the City Council finds:

A. The revenue derived from the Water Rates and Recycled Water Rates, as stated in the attached Rate Schedules, do not exceed the funds required to cover the operating and capital improvement project expenses for the provision of water; B. The revenue derived from the Water Rates and Recycled Water Rates will not be used for any purpose other than the provision of water and recycled water and related capital improvement projects;
C. The Water Rates and Recycled Water Rates will not exceed the proportional cost of the service attributable to each parcel;
D. The Water Rates and Recycled Water Rates are only charged for water service and programs that are currently available;
E. The Water Rates and Recycled Water Rates are not charged for general governmental services.

3. That Water Rate Schedule 2024-01 and Recycled Water Rate Schedule 2024-02, attached to this Resolution and incorporated by this reference, are hereby adopted and shall be effective per Section 4 of this Resolution.
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Resolution/Establishing Water Rate Schedule 2024-01
& Recycled Water Rate Schedule 2024-02
Rev: 11/22/17

Page 3 of 3 ends

4. All previously adopted water rate schedules, to the extent that they are inconsistent with those contained herein, are superseded by those charges provided for hereinabove as follows:

Commencing with the billing cycle for water service provided on or after July 1, 2024, and each subsequent billing cycle thereafter as set forth in Water Rate Schedule 2024- 01 and Recycled Water Rate 2024- 02.

5. Effective date. This resolution shall become effective immediately.

I HEREBY CERTIFY THE FOREGOING TO BE A TRUE COPY OF A RESOLUTION PASSED

AND ADOPTED BY THE CITY OF SANTA CLARA, CALIFORNIA, AT A REGULAR MEETING THEREOF HELD ON THE 28TH DAY OF MAY, 2024, BY THE FOLLOWING VOTE:

AYES: COUNCILORS:

NOES:

ABSENT:

COUNCILORS:

None
None
ABSTAINED: COUNCILORS: None

ATTEST:

Attachments incorporated by reference:

1. Water Rate Schedule 2024-01

2. Recycled Water Rate Schedule 2024-02
City of Santa Clara Water Rate Schedule 2024-01 Page 1 of 2

CITY OF SANTA CLARA
WATER RATE SCHEDULE 2024-01
(Replaces Water Rate Schedule 2023-01)
ADOPTED BY RESOLUTION NO. 24-XXX, May 28, 2024

RATE W-1, METERED POTABLE WATER SERVICE

Applicable to all metered potable water service provided by the City of Santa Clara

(1) MONTHLY QUANTITY CHARGES:

All potable water use, $8.90 per Hundred Cubic Feet (HCF). The Monthly Quantity Charge recovers the annual cost to operate the Water Utility, including groundwater charges, treated water purchased from others for resale, and energy for pumping. (2) MINIMUM MONTHLY METER RATES:

The minimum monthly meter rate includes a consumption allowance to recover fixed cost elements and accommodate water considered essential for health and safety.

WATER METER SIZE MINIMUM CHARGE($)
5/8 x 3/4 inch 23.42
1 inch 36.67
1 ½ inch 69.78
2inch 109.51
3inch 215.46
4inch 334.66
6inch 665.77
8 inch 1,063.09
10inch 1,592.86

RATE W-2, F IRE SERVICE

(1) MONTHLY FIRE SERVICE CHARGE:

SERVICE SIZE

MONTHLY CHARGE($)
2 inch 3.15
4 inch 17.84
6 inch 52.48
8 inch 111.78
10 inch 201.00
12 inch 324.85
City of Santa Clara Water Rate Schedule 2024-01 Page 2 of 2 (2) SPECIAL CONDITIONS:

Fire Service charges are imposed for maintenance and operation of the metering components, including capital replacement. No charge will be made for water used to extinguish fires or for testing. Any other usage of water through leakage or for general use shall result in the imposition of regular water service rates (RATE W -1) for a minimum of three (3) billing cycles or longer, until such time as illicit use of water through the fire service connection has ceased.

Continued water usage through a fire service is a violation of City's Rules and Regulations and may cause interruption of service.

RATE W-3, C ROSS CONNECTION CONTROLS

Applicability - Applicable to all service connections where a public cross connection control device has been required by the City or County Health Department. (1) MONTHLY CHARGE:

SIZE OF SERVICE MONTHLY CHARGE ($)
1 inch 8.60
2 inch 13.76
3 inch 27.53
4 inch 43.01
6inch 86.02
8 inch 137.63
10 inch 206.44
City of Santa Clara Recycled Water Rate Schedule 2024-02 Page 1 of 2

CITY OF SANTA CLARA
RECYCLED WATER RATE SCHEDULE 2024-02
(Replaces Recycled Water Rate Schedule 2023-02)
ADOPTED BY RESOLUTION NO. 24-XXX, May 28, 2024

RATE RW-1, METERED RECYCLED WATER SERVICE

Applicable to all metered service connections served by the City of Santa Clara Recycled Water System, except for those specified recycled water uses described in Rate RW-2.

(1) MONTHLY QUANTITY CHARGES:

All use: $5.06 per Hundred Cubic Feet (HCF).
(2) MINIMUM MONTHLY METER RATES:

The minimum monthly meter rate includes a consumption allowance to recover fixed cost elements and accommodate water considered essential for health and safety.

WATER METER SIZE MINIMUM CHARGE($)
5/8 x 3/4 inch 17.44
1 inch 28.43
1 ½ inch 55.91
2inch 88.88
3inch 176.80
4inch 275.71
6inch 550.46
8 inch 880.16
10inch 1,319.76
12inch 1,855.53
RATE W-2, FIRE SERVICES

Applicable to separate fire services (automatic sprinklers, private fire hydrants, etc.) required by the City of Santa Clara or insurance underwriters.

(1) MONTHLY FIRE SERVICE CHARGE:

SERVICE SIZE

MONTHLY CHARGE($)
2 inch 3.15
4 inch 17.84
6 inch 52.48
8 inch 111.78
10 inch 201.00
12 inch 324.85
City of Santa Clara Recycled Water Rate Schedule 2024-02 Page 2 of 2 (2) SPECIAL CONDITIONS:

Continued water usage through a fire service is a violation of City's Rules and Regulations and may cause interruption of service.

RATE W-3, C ROSS CONNECTION CONTROLS
Applicable to all service connections where a public cross connection control device has been required by the City or County Health Department.

(1) MONTHLY CHARGE:

SIZE OF SERVICE MONTHLY CHARGE ($)
1 inch 8.60
2 inch 13.76
3 inch 27.53
4 inch 43.01
6inch 86.02
8 inch 137.63
10 inch 206.44

Resolution No. 24-xxx/Sewer Rate Schedule (S-24)
Rev: 11/22/17

Page 1 of 3 ends

RESOLUTION NO. 24-XXX

A RESOLUTION OF THE CITY OF SANTA CLARA, CALIFORNIA,

ESTABLISHING MONTHLY SEWER SERVICE CHARGES AND
SEWER RATE SCHEDULE S-24

BE IT RESOLVED BY THE CITY OF SANTA CLARA AS FOLLOWS:

WHEREAS, Section 13.10.090, entitled “Rates – Users Within the City”, of "The Code of the City of Santa Clara" (“SCCC"), provides that the City Council may by resolution establish and amend the monthly sewer service charges;
WHEREAS, Article XIII D of the California Constitution requires that utility customers be given a minimum of 45 days notice of any proposed rate increase; WHEREAS, notice of a Public Hearing to be held on May 28, 2024 was mailed to utility customers on April 8, 2024, which is more than 45 days prior to the Public Hearing; WHEREAS, the notice was sent to 27,773 utility customers; WHEREAS, the Council has reviewed the Sewer Rate Schedule S-24 (attached) and incorporated into this Resolution by reference;
WHEREAS, the amounts shown on the Schedule S-24 reflect the actual costs to provide utility services; and,
WHEREAS, on May 28, 2024, the Council conducted a Public Hearing, at which it reviewed all protests regarding the proposed rate increases.

NOW THEREFORE, BE IT FURTHER RESOLVED BY THE CITY OF SANTA CLARA AS FOLLOWS:

1. That based on a tabulation of all protests received prior to the close of the Public Hearing XX protests were received, which do not constitute a majority of affected utility customers.
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Resolution No. 24-xxx/Sewer Rate Schedule (S-24)
Rev: 11/22/17

Page 2 of 3 ends

2. That, in accordance with Article XIIID § 6 of the California Constitution and as set forth in the accompanying Agenda Report, incorporated herein by this reference:

A. The revenues derived from the Sewer Rates, as stated in the attached Schedule S-24, do not exceed the funds required to cover the operating and capital improvement project expenses for the provision of sewer services;
B. The revenues derived from the Sewer Rates will not be used for any purpose other than the provision of sewer services and related capital improvement projects; C. The Sewer Rates will not exceed the proportional cost of the service attributable to each customer class;
D. The Sewer Rates are only charged for sewer programs that are currently available;
E. The Sewer Rates are not charged for general governmental services.

3. That Sewer Rate Schedule S-24, attached to this Resolution and incorporated by this reference, are hereby adopted and shall be effective per Section 4 of this Resolution. //
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Resolution No. 24-xxx/Sewer Rate Schedule (S-24)
Rev: 11/22/17

Page 3 of 3 ends

4. All previously adopted sewer rate schedules, to the extent that they are inconsistent with those contained herein, are superseded by those charges provided for hereinabove as follows:

Commencing with the billing cycle for sewer service provided on or after July 1, 2024, and each subsequent billing cycle thereafter as set forth in Sewer Rate Schedule S-24.

5. Effective date. This resolution shall become effective immediately.

I HEREBY CERTIFY THE FOREGOING TO BE A TRUE COPY OF A RESOLUTION PASSED

AND ADOPTED BY THE CITY OF SANTA CLARA, CALIFORNIA, AT A REGULAR MEETING THEREOF HELD ON THE 28TH DAY OF MAY, 2024, BY THE FOLLOWING VOTE:

AYES: COUNCILORS:

NOES:

ABSENT:

COUNCILORS:

ABSTAINED: COUNCILORS:

ATTEST:

Attachments incorporated by reference:

1. Sewer Rate Schedule S-24
Sewer Rate Schedule S-24 Page 1 of 3
SCHEDULE S-24

MONTHLY SEWER SERVICE CHARGES
EFECTIVE JULY 1, 2024
(REPLACES SCHEDULE S-23)

A. Residential Users:

Single Family dwelling units including accessory dwellings: $52.37 per month

Multiple dwelling unit structures including, but not limited to, duplexes, retirement homes, mobile home courts, college dormitories, and apartments: $49.31 per month per dwelling unit

B. Miscellaneous Users:

For all users other than residential users and major commercial and industrial users, the monthly service charges per month shall be as follows, depending on the appropriate North American Industrial Classification System (NAICS) class:

NAICS CLASS

DESCRIPTION

SERVICE
CHARGE
$/HCF1
SEWAGE

VOLUME AS A

PERCENTAGE

OF METERED

WATER USE
111998, 311XXX, 3121XX Food and Kindred Products $15.74 70% 322:XXX Paper $4.44 80%
211112, 325:XXX Industrial Chemical $11.58 90%
332812, 332813 Metal Plating $5.05 90%
332XXX, 333:XXX,
3341 IX, (excepting 332812,
332813, 333314)

Machinery Manufacturers

$9.33

90%
334XXX, 335XXX, 33632X
(excepting 33451X, 33411X,
334611)

Electric & Electronic Equip.

$6.18

90%
4411XX, 4412XX, 4471XX Auto Dealers & Service Station $7.80 90% 722110, 722410 Restaurants $16.01 90%
721XXX Motels & Hotels $8.09 90%
561740, 811490, 8123XX Laundries $6.80 90%

1 References the volume of sewage discharged. HCF=one hundred cubic feet=748 gallons Sewer Rate Schedule S-24 Page 2 of 3
811lXX, 812930 Repair Shops & Car Washes $5.90 90%
713:XXX Amusement Parks $6.93 90%
621:XXX, 622XXX,
623:XXX Hospitals & Convalescent Homes $7.60 90%
611:XXX Schools & Colleges $7.31 24%
8131XX Churches $6.12 35%
Commercial/Industrial/Miscellaneous not otherwise specified in this schedule of charges
$6.61 90%

In no case shall the minimum charge be less than $52.37 per month.

C. Major Commercial and Industrial Users are those having (1) a sewage discharge of at least 25,000 gallons per day, or (2) having a daily discharge which is intermittent or irregular in strength, amount or nature. Major Commercial and Industrial Users shall have monthly sewer charges, which may consist of any or all of the following charges:

Annual Capital Cost Recovery:

Volume: $1,306,599 per million gallons per day of flow capacity BOD2: $124,262 per 1,000 pounds per day of BOD removal
capacity SS3: $114,880 per 1,000 pounds per day of SS removal capacity NH3 4: $538,093 per 1,000 pounds per day of NH3 removal capacity

Operating and Maintenance Cost Recovery:

Volume: $3,671.11 per million g al
BOD: $561.28 per 1,000 pounds
SS: $651.81 per 1,000 pounds
NH3: $4,980 per 1,000 pounds

2 Biochemical Oxygen Demand: This is the quantity of oxygen utilized in the biological oxidation of organic matter under standard laboratory conditions for 5 days at a temperature of 20 degrees Centigrade. The determination of the charge for BOD is as follows: BOD in parts per million x 8.34 x volume in million gallons = pounds of BOD. 3 Suspended Solids – That which either floats on the surface or is in suspension in sewage and which is determined by laboratory filtering. The determination of the charge for Suspended Solids is as follows: SS in parts per million x

8.34 x volume in million gallons = pounds of Suspended Solids 4 Ammonia is that form of nitrogen in the tri-negative oxidation state which is chemically definable as the compound NH3. The determination of the charge for Ammonia is as follows: NH3 in parts per million x 8.34 x volume in million gallons = pounds of Ammonia.

Sewer Rate Schedule S-24 Page 3 of 3
The volume of sewage shall be based upon a fixed percentage of water usage noted, or based on standard methods acceptable to the Director.

The City may require the installation of special metering and sampling devices whenever the Director deems that such devices are required to determine the volume and/or strength of the sewage discharge. A customer may also request the installation of a special metering device.

Whenever special metering devices are installed, they shall be devices approved by the Director, and the cost of furnishing and installing said devices shall be borne by the customer.

DRAFT

WATER AND SEWER RATE STUDY
BLACK & VEATCH PROJECT NO. 410918

PREPARED FOR
City of Santa Clara, CA
28 MAY 2024
~ -BLACK&VEATCH
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Table of Contents i

Table of Contents
Legal Notice ................................................................................................................................................. 1

1.0 Executive Summary .................................................................................................................... 1-1

1.1 Water System ................................................................................................................... 1-1

1.2 Recycled Water System ................................................................................................... 1-1

1.3 Sewer System .................................................................................................................. 1-1

1.4 Financial Plan ................................................................................................................... 1-2

1.4.1 Water Utility ...................................................................................................... 1-2

1.4.2 Recycle Water Utility ........................................................................................ 1-3

1.4.3 Sewer Utility ...................................................................................................... 1-5

1.5 Adequacy of Existing Rates to Meet Costs of Service ..................................................... 1-6

1.6 Cost of Service Analysis .................................................................................................. 1-7

1.7 Rate Design ..................................................................................................................... 1-7

1.7.1 Water and Recycled Water Utilities .................................................................. 1-7

1.7.2 Sewer Utility .................................................................................................... 1-10 Water and Recycled Water Utilities ........................................................................................................ 1-1

2.0 Revenue and Revenue Requirements ....................................................................................... 2-1

2.1 Customer and Water Consumption .................................................................................. 2-1

2.1.1 Customer Classes ............................................................................................ 2-1

2.1.2 Minimum Bills ................................................................................................... 2-1

2.1.3 Water Consumption .......................................................................................... 2-2

2.2 Revenue under Existing Rates ........................................................................................ 2-3

2.3 Other Revenue ................................................................................................................. 2-5

2.4 Operating and Maintenance Expenses ............................................................................ 2-5

2.5 Capital Improvement Program ......................................................................................... 2-6

2.5.1 Capital Improvement Financing Plan ............................................................... 2-7

2.6 Transfers .......................................................................................................................... 2-8

2.7 Reserves .......................................................................................................................... 2-8

2.8 Projected Operating Results ............................................................................................ 2-9

3.0 Cost of Service Analysis ............................................................................................................ 3-1

3.1 Functional Cost Components ........................................................................................... 3-2

3.2 Allocation to Cost Components ........................................................................................ 3-3

3.2.1 System Base, Max Day, and Max Hour Allocations ......................................... 3-3

3.2.2 Allocation of Operating and Maintenance Expenses ....................................... 3-4

3.2.3 Allocation of Capital Investments ..................................................................... 3-5

3.3 Units of Service ................................................................................................................ 3-5

3.4 Cost of Service Allocations .............................................................................................. 3-6

3.4.1 Units Costs of Service ...................................................................................... 3-6

3.4.2 Distribution of Costs of Service to Customer Classes...................................... 3-6

4.0 Rate Design ................................................................................................................................. 4-1 City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Table of Contents ii

4.1 Existing Rates .................................................................................................................. 4-1

4.2 Proposed Rates ............................................................................................................... 4-1

4.2.1 Monthly Service Charge ................................................................................... 4-1

4.2.2 Fire Service ...................................................................................................... 4-3

4.2.3 Cross Connection ............................................................................................. 4-3

4.2.4 Consumption Charge ....................................................................................... 4-4

4.3 Typical Monthly Costs under Proposed Charges ............................................................ 4-4

4.4 Neighboring Water Utilities .............................................................................................. 4-5 Sewer Utility .............................................................................................................................................. 4-1

5.0 Revenue and Revenue Requirements ....................................................................................... 5-1

5.1 Customer and Water Consumption Projections ............................................................... 5-1

5.1.1 Customer Classes ............................................................................................ 5-1

5.1.2 Equivalent Dwelling Units ................................................................................. 5-1

5.1.3 Minimum Bills ................................................................................................... 5-2

5.1.4 Contributed Sewage Flow ................................................................................ 5-2

5.1.5 Major Users ...................................................................................................... 5-3

5.2 Revenue under Existing Rates ........................................................................................ 5-3

5.3 Other Revenue ................................................................................................................. 5-5

5.4 Operating and Maintenance Expenses ............................................................................ 5-5

5.5 Debt Service Requirements ............................................................................................. 5-6

5.6 Capital Improvement Program ......................................................................................... 5-6

5.6.1 Capital Improvement Financing Plan ............................................................... 5-7

5.7 Transfers .......................................................................................................................... 5-7

5.8 Reserves .......................................................................................................................... 5-8

5.9 Projected Operating Results ............................................................................................ 5-8

6.0 Cost of Service Analysis ............................................................................................................ 6-1

6.1 Functional Cost Components ........................................................................................... 6-1

6.2 Allocation to Cost Components ........................................................................................ 6-2

6.2.1 Volume and Strength Allocations ..................................................................... 6-2

6.2.2 Allocation of Operating and Maintenance Expenses ....................................... 6-2

6.2.3 Allocation of Capital Investments ..................................................................... 6-3

6.3 Units of Service ................................................................................................................ 6-3

6.4 Cost of Service Allocations .............................................................................................. 6-4

6.4.1 Units Costs of Service ...................................................................................... 6-4

6.4.2 Distribution of Costs of Service to Customer Classes...................................... 6-4

7.0 Rate Design ................................................................................................................................. 7-1

7.1 Existing Rates .................................................................................................................. 7-1

7.2 Proposed Rates ............................................................................................................... 7-1

7.2.1 Monthly Service Charge ................................................................................... 7-1

7.2.2 Consumption Charge ....................................................................................... 7-2

7.2.3 Major Users ...................................................................................................... 7-2 City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Table of Contents iii

7.3 Typical Monthly Costs under Proposed Charges ............................................................ 7-3

7.4 Neighboring Sewer Utilities .............................................................................................. 7-4 Appendix A – Ten-Year Financial Plan .................................................................................................. 7-1 Water Utility ................................................................................................................................... 7-1 Recycled Water Utility ................................................................................................................... 7-2 Sewer Utility .................................................................................................................................. 7-3

LIST OF TABLES
Table 1-1 Proposed Revenue Adjustments ..................................................................................... 1-7 Table 1-2 Proposed Three-Year Water Rate Schedule ................................................................... 1-9 Table 1-3 Proposed Three-Year Recycled Water Rate Schedule ................................................. 1-10 Table 1-4 Proposed Three-Year Sewer Rate Schedules ............................................................... 1-11 Table 2-1 Minimum Bills ................................................................................................................... 2-1 Table 2-2 Billed Water Consumption ............................................................................................... 2-3 Table 2-3 Existing Water and Recycled Water Rates ...................................................................... 2-4 Table 2-4 Projected Revenue under Existing Rates ........................................................................ 2-5 Table 2-5 O&M Expenses ................................................................................................................ 2-6 Table 2-6 Capital Improvement Projects .......................................................................................... 2-7 Table 2-7 Construction Fund Financing Plan (Water) ...................................................................... 2-7 Table 2-8 Construction Fund Financing Plan (Recycled Water) ...................................................... 2-8 Table 2-9 Operating Fund (Water) ................................................................................................. 2-12 Table 2-10 Operating Fund (Recycled Water) ................................................................................. 2-13 Table 3-1 Cost of Service Revenue from Rates (Water) ................................................................. 3-1 Table 3-2 Cost of Service Revenue from Rates (Recycled Water) .................................................. 3-2 Table 3-3 Allocation of O&M Expenditures (Water) ......................................................................... 3-4 Table 3-4 Allocation of O&M Expenditures (Recycled Water) ......................................................... 3-4 Table 3-5 Allocation of Capital Costs (Water) .................................................................................. 3-5 Table 3-6 Allocation of Capital Costs (Recycled Water) .................................................................. 3-5 Table 3-7 Units of Service (Water and Recycled Water) ................................................................. 3-1 Table 3-8 Units Cost of Service (Water) .......................................................................................... 3-1 Table 3-9 Distribution of Costs to Customer Classes (Water) ......................................................... 3-2 Table 3-10 Units Cost of Service (Recycled Water)........................................................................... 3-3 Table 3-11 Distribution of Costs to Customer Classes (Recycled Water) ......................................... 3-3 Table 4-1 Costs within the Minimum Monthly Service Charge for FY 2025 (Water) ....................... 4-1 Table 4-2 Proposed Minimum Monthly Service Charge (Water) ..................................................... 4-1 Table 4-3 Costs within the Minimum Monthly Service Charge for FY 2025 (Recycled Water) .............................................................................................................................. 4-2 Table 4-4 Proposed Minimum Monthly Service Charge (Recycled Water) ..................................... 4-2 Table 4-5 Costs within the Fire Service Charge for FY 2025 ........................................................... 4-3 Table 4-6 Proposed Fire Service Charge ......................................................................................... 4-3 Table 4-7 Costs within the Cross-Connection Charge for FY 2025 ................................................. 4-4 City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Table of Contents iv

Table 4-8 Proposed Cross Connection Charge ............................................................................... 4-4 Table 4-9 Proposed Consumption Charges ..................................................................................... 4-4 Table 4-10 Typical Monthly Bill (Water) ............................................................................................. 4-5 Table 4-11 Typical Monthly Bill (Recycled Water) ............................................................................. 4-5 Table 5-1 EDUs ................................................................................................................................ 5-1 Table 5-2 Minimum Monthly Service Bills ........................................................................................ 5-2 Table 5-3 Contributed Sewage Flow ................................................................................................ 5-3 Table 5-4 Existing Sewer Rates ....................................................................................................... 5-4 Table 5-5 Projected Revenue under Existing Rates ........................................................................ 5-5 Table 5-6 O&M Expenses ................................................................................................................ 5-6 Table 5-7 Long-Term Debt Service .................................................................................................. 5-6 Table 5-8 Capital Improvement Projects .......................................................................................... 5-7 Table 5-9 Construction Fund Financing Plan ................................................................................... 5-7 Table 5-10 Operating Fund (Sewer) ................................................................................................ 5-11 Table 6-1 Cost of Service Revenue from Rates............................................................................... 6-1 Table 6-2 Allocation of O&M Expenditures ...................................................................................... 6-3 Table 6-3 Allocation of Capital Costs ............................................................................................... 6-3 Table 6-4 Units of Service ................................................................................................................ 6-1 Table 6-5 Units Cost of Service........................................................................................................ 6-1 Table 6-6 Distribution of Costs to Customer Classes ...................................................................... 6-1 Table 7-1 Proposed Monthly Service Charge .................................................................................. 7-1 Table 7-2 Proposed Consumption Charges ..................................................................................... 7-2 Table 7-3 Proposed Major User Charges ........................................................................................ 7-3 Table 7-4 Typical Monthly Bill .......................................................................................................... 7-3

LIST OF FIGURES
Figure 1-1 Water Operating Cashflow ............................................................................................... 1-3 Figure 1-2 Water Reserves ............................................................................................................... 1-3 Figure 1-3 Recycled Water Operating Cash Flow ............................................................................. 1-4 Figure 1-4 Recycled Water Reserves ............................................................................................... 1-5 Figure 1-5 Sewer Operating Cash Flow ............................................................................................ 1-6 Figure 1-6 Sewer Reserves ............................................................................................................... 1-6 Figure 2-1 Water Sales ...................................................................................................................... 2-2 Figure 2-2 Status Quo Operating Cash Flow (Water) ....................................................................... 2-9 Figure 2-3 Status Quo Operating Cash Flow (Recycled Water) ..................................................... 2-10 Figure 2-4 Water Operating Cash Flow ........................................................................................... 2-14 Figure 2-5 Recycled Water Operating Cash Flow ........................................................................... 2-14 Figure 4-1 Comparison to Neighboring Water Utilities ...................................................................... 4-6 Figure 5-1 Status Quo Operating Cash Flow .................................................................................... 5-9 Figure 5-2 Sewer Operating Cash Flow .......................................................................................... 5-12 Figure 7-1 Comparison to Neighboring Sewer Utilities ..................................................................... 7-4 City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Legal Notice LN-1

Legal Notice
Black & Veatch has prepared this report for the City, and it is based on information not within the control of Black & Veatch. The City has not requested Black & Veatch to make an independent analysis, verify the information provided to us, or render an independent judgment of the validity of the information provided by others. Because of this, Black & Veatch cannot, and does not, guarantee the accuracy thereof to the extent that such information, data, or opinions were based on information provided by others.

In conducting these analyses and in forming an opinion of the projection of future financial operations summarized in this report, Black & Veatch made certain assumptions on the conditions, events, and circumstances that may occur in the future. The methodology utilized in performing the analyses follows generally accepted practices for such projections. Such assumptions and methodologies are reasonable and appropriate for the purpose for which they are used. While we believe the assumptions are reasonable and the projection methodology valid, actual results may differ materially from those projected, as influenced by the conditions, events, and circumstances that occur. Such factors may include the utilities’ ability to execute the capital improvement program as scheduled and within budget, regional climate and weather conditions affecting the demand for water, discharge of sewage flow, and adverse legislative, regulatory, or legal decisions (including environmental laws and regulations) affecting the utilities’ ability to manage the system and meet water quality requirements.

City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Executive Summary 1-1

1.0 Executive Summary
The City of Santa Clara (City) commissioned Black & Veatch Management Consulting, LLC (Black & Veatch) to perform an update of the Water and Sewer Rate Study (Study) for its Water, Recycled Water, and Sewer Utilities. The Study included the development of a three-year financial plan, a cost-of-service analysis, and the design of rates. In addition, a ten-year financial plan was developed to provide the City with a high-level view of each utility’s operations. The specific objectives of the Study were to:
 Evaluate the adequacy of projected revenues under existing rates to meet projected revenue requirements.
 Develop sound financial plans for the utilities covering a three and ten-year period for both ongoing operations and planned capital improvements.
 Allocate the utilities’ projected revenue requirements to the various customer classes in accordance with their respective service requirements.
 Develop a suitable rate schedule that produces revenues adequate to meet financial needs while recognizing customer costs of service and regulatory considerations such as Proposition 218 and applicable judicial decisions.

1.1 W ater System
The Water Utility provides water services to over 26,415 residential, commercial, irrigation, schools, and agricultural customers. The City obtains potable water from three primary sources: local groundwater, surface water from the Santa Clara Valley Water District (Valley Water) and imported water from the Hetch Hetchy watershed through the San Francisco Public Utilities Commission (SFPUC). The water system infrastructure consists of 335 miles of transmission and distribution mains, 7 storage tanks totaling

28.8 million gallons of storage capacity, 21 wells, and 3 booster pump stations. The City has a target of obtaining 68% of the 5.8 billion gallons of water that flows to its customers each year from the City’s wells.

1.2 Recycled Water System
The Recycled Water Utility, operating since 1989, provides recycled water services to over 361 commercial, irrigation, and industrial customers. The City obtains recycled water from South Bay Water Recycling. The recycled water comes from the San Jose-Santa Clara Regional Wastewater Facility (RWF), an advanced tertiary treatment facility located in San Jose, of which the City is a co- owner. The recycled water infrastructure within the City limit boundary mainly consists of 34 miles of recycled water pipelines. A portion of the recycled water from the RWF supplies the Valley Water’s Silicon Valley Advanced Water Purification Center for advanced treatment (microfiltration, reverse osmosis, and advanced oxidation) to create a mix of high-quality recycled water that is blended back into the recycled water system.

1.3 Sewer System
The Sewer Utility provides sewer services to over 25,547 residential, commercial, industrial, and municipal customers. Services include the construction and maintenance of the sewer system and installing sewer lateral clean-outs at the property line. Sanitary sewer flows in the City are collected and transported through more than 288 miles of sewer main by way of six pumping stations to the San Jose- Santa Clara Regional Wastewater Facility. The RWF is a regional treatment facility that receives waste from seven agencies in Santa Clara County and can treat 167 million gallons a day (MGD) of liquid waste.

City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Executive Summary 1-2

1.4 Financial Plan
The City operates the utilities as individual self-supporting enterprises. Therefore, the utilities must develop financial plans that provide sufficient revenues to meet all operation and maintenance expenses, water purchases, wastewater treatment, debt service requirements, capital improvements funded from current revenues, and other expenditures.

The Study develops financial plans that project operating revenue, expenses, and capital financing costs for the utilities over a ten-year planning period beginning July 1, 2024 and ending June 30, 2034. This report will focus on a three-year planning period for discussion, beginning July 1, 2024 and ending June 30, 2027. The full ten-year financial plans can be found in Appendix A.

The financial plans project future rate revenues under existing rates, operations, and maintenance (O&M) expenses, principal and interest expense on debt, transfers, and capital improvement program (CIP) requirements. In the projection of rate revenues, annual projections of customers and water consumption rely upon the City’s historical data and estimates of growth. In addition, the Water Utility’s forecast incorporates efforts to continue to encourage conservation measures of maintaining a 15% voluntary water use reduction and the City’s Water Shortage Contingency Plan.

1.4.1 Water Utility
The Water Utility’s revenue requirements are summarized below:
 Operation and Maintenance Expenses: The Water Utility anticipates O&M expenses to increase from $59.0M in FY 2025 to $68.5M in FY 2027. Water production and water purchases account for most of this increase, representing an average of 65% of O&M expenses.  Debt Service: The Water Utility has no existing debt service, and no future debt is planned.  Capital Improvements: The Water Utility plans to execute an average of $6.1M per year in capital projects from FY 2025 to FY 2027.
 Reserves: The Water Utility plans to continue funding the operating fund reserve, construction fund reserve, rate stabilization fund reserve, and pension stabilization reserve. ● The operating fund reserve is to help cover fluctuations in day-to-day expenses. The scheduled target is 90 days of O&M expenses.
● The infrastructure fund reserve is to help maintain enough funds on hand to help mitigate unexpected capital costs. The scheduled target is 12-months of the following year’s CIP. ● The rate stabilization fund reserve is to help mitigate future increases in drought-stricken years. The scheduled target is 10% of the prior year’s rate revenues. ● The pension fund reserve is to pay for the unfunded pension liabilities and the increase in the City’s share of pension costs due to factors such as higher CalPERS rates and negotiated pay increases.

The Water Utility is proposing revenue adjustments to allow it to operate the enterprise on a revenue- neutral basis and meet reserve targets by FY 2027, as shown in Figure 1-1 and Figure 1-2.

City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Executive Summary 1-3

Figure 1-1 Water Operating Cashflow

Figure 1-2 Water Reserves

1.4.2 Recycle Water Utility
The Recycled Water Utility’s revenue requirements are summarized below:
 Operation and Maintenance Expenses: The Recycled Water Utility anticipates O&M expenses to increase from $9.2M in FY 2025 to $11.7M in FY 2027. Recycled water purchase costs constitute most of the increase, averaging 84% of O&M expenses.
 Debt Service: The Recycled Water Utility has no existing debt service, and no future debt is planned.
 Capital Improvements: The Recycled Water Utility plans to execute an average of $174.6k per year in capital projects from FY 2025 to FY 2027.
$9{),000,000
$80,000,000
$70,000,000
$60,000,000
SS0,000,000
$40,000,000
$30,000,000
s20,ooo,ooo
Sl0,000,000
so
2025
Water Utility - Ope rating i= und
-
2026 2027
- O&M - Debt Service - Capit al Projects - Rate St abililct:ion -a- Re.1enue -e-- Cash Balance - Target Cash Balance
$40,000,000
$35,000,000
$30,000,000
$25,000,000
s20,ooo,ooo
$15,000 ,000
Sl0,000,000
SS,000,000
so
Water Utility - Reserves
-- -
2025 2026
- Operat ions and Maintenance REHve - Infrastructure Reserve - Rct:eStabililct:ion Reserve - Pension Stabilil atbn Reserve - ,.,.. Target Cc6h Balance
2027
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Executive Summary 1-4

 Reserves: The City plans to continue funding the operating fund reserve, construction fund reserve, rate stabilization fund reserve, and pension stabilization reserve. ● The operating fund reserve is to help cover fluctuations in day-to-day expenses. The scheduled target is 90 days of O&M expenses.
● The infrastructure fund reserve is to help maintain enough funds on hand to help mitigate unexpected capital costs. The scheduled target is 12-months of the following year’s CIP. ● The rate stabilization fund reserve is to help mitigate future increases in drought-stricken years. The scheduled target is 10% of the prior year’s rate revenues. ● The pension fund reserve is to pay for the unfunded pension liabilities and the increase in the City’s share of pension costs due to factors such as higher CalPERS rates and negotiated pay increases.

The Recycled Water Utility is proposing revenue adjustments and drawing down on reserves to allow it to operate the enterprise on a revenue-neutral basis and meet reserve targets, as shown in Figure 1-3 and Figure 1-4.

Figure 1-3 Recycled Water Operating Cash Flow

$14,000,000
$12,000,000
$10,000,000
$8,000,000
$6,000,000
$4,000,000
$2,000,000
so
- O&M
-e- Re.-enue
Recycled Water Utility - Ope rating fund
- -
20 25
- Debt Servic e
~ Cash Balance
2026 2027
- Capital Projects - R i:i:e St abilili:i:ion
-e- Target Cash Balance
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Executive Summary 1-5

Figure 1-4 Recycled Water Reserves

1.4.3 Sewer Utility
The Sewer Utility’s revenue requirements are summarized below:
 Operation and Maintenance Expenses: The Sewer Utility anticipates O&M expenses to increase from $30.1M in FY 2025 to $32.3M in FY 2027. RWF-related costs represent an average of 69% of O&M expenses.
 Debt Service: The Sewer Utility anticipates an average debt service payment of $ 3.6M per year from FY 2025 to FY 2027 associated with existing and proposed debt issuances. The City anticipates a new revenue bond for $18.0M to be issued in 2027.  Capital Improvements: The Sewer Utility plans to execute an average of $13.9M per year in capital projects from FY 2025 to FY 2027.
 Reserves: The Sewer Utility plans to continue funding the operating fund reserve, construction fund reserve, rate stabilization fund reserve, and pension stabilization reserve. ● The operating fund reserve is to help cover fluctuations in day-to-day expenses. The scheduled target is 90 days of O&M expenses.
● The infrastructure fund reserve is to help maintain enough funds on hand to help mitigate unexpected capital costs. The scheduled target is 12-months of the following year’s City CIP and 6-months of the following year’s SJSCRWF CIP.
● The rate stabilization fund reserve is to help mitigate future increases in drought-stricken years. The scheduled target is 10% of the prior year’s rate revenues. ● The pension fund reserve is to pay for the unfunded pension liabilities and the increase in the City’s share of pension costs due to factors such as higher CalPERS rates and negotiated pay increases.

The Sewer Utility is proposing revenue adjustments and drawing down on reserves to allow it to operate the enterprise on a revenue-neutral basis and meet reserve targets, as shown in Figure 1-5 and Figure 1-6.

S5,ooo,ooo
SS,000,000
$4,000 ,000
$3,000,000
S2,ooo,ooo
Sl,000,000
so
Recycled Water Utility - Reserves
2025 2026 2027
- 0 perat ions and Maintenance Reserve - lnfrastructu re Reserve - Rat:eStcbili2at:ion Reserve - Pension Stabiiz.atb n Reserve - ,e- Target Ca;h Balance
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Executive Summary 1-6

Figure 1-5 Sewer Operating Cash Flow

Figure 1-6 Sewer Reserves

1.5 Adequacy of Existing Rates to Meet Costs of Service Based on the financial plans, Black & Veatch recommends the revenue adjustments shown in Table 1-1 to meet the projected revenue requirements for FY 2025 to FY 2027. These do not represent proposed rate increases to customers. Rather, these represent the overall revenue increases the utilities need to meet their overall obligations and maintain current service levels.

$70,000,000
S60,ooo,ooo
sso,000,000
$40,000,000
$30,000,000
s20,ooo,ooo
Sl0,000,000
so
2025
Sewer Utility - Ope rating Fund
2026 2027
- O&M - Debt Service - Capital fl roj ects - Rat:eStabilizat:ion -a- Re.1enue -a- Cash Balance -.. Target Cash Balance
$60,000,000
sso,000,000
$40,000,000
$30,000,000
s20,ooo,ooo
Sl0,000,000
so
Sewer Utility - !Reserves
----
2025 2026
- Operat ion.sand Maintenance R EHve - lnl'rastructu re Reserve - Rate St abiliz.at:ion Reserve - flension Stabiilatb n Reserve -.- Target Cash Balance
2027
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Executive Summary 1-7

Table 1-1 Proposed Revenue Adjustments

1.6 Cost of Service Analysis
The cost-of-service analysis allocates the costs to the various customer classes of service in a fair and equitable manner. The methodologies used in the Study are specific to the respective utility operations.

The following is a brief description of the methodologies.

The water and recycled water cost-of-service allocation performed in this Study uses the Base-Extra Capacity Method endorsed by the American Water Works Association (AWWA) Principles of Water Rates, Fees, and Charges, M1 (M1) manual. Under cost-of-service principles, costs are allocated to the different customer classes in proportion to their water system use. As recommended by AWWA, Black & Veatch distributed functional costs to the base (average load conditions), extra capacity (peaking), and customer-related parameters. This allocation methodology produces unit costs for allocation to individual customer classes based on the projected customer service requirements.

The sewer cost-of-service allocation performed in this Study follows the Functional Cost Allocation Method endorsed by the Water Environment Federation (WEF) Financing and Charges for Wastewater Systems, Manual of Practice 27 (MoP27) manual. Like the methodology used for water systems, the sewer cost of service analysis allocates costs to the different customer classes in proportion to their use of the sewer system. As recommended by WEF, Black & Veatch distributed functional costs to volume, strength, and customer-related parameters. This allocation methodology produces unit costs for allocation to individual customer classes based on the projected customer service requirements.

1.7 Rate Design
The Right to Vote on Taxes Act, also known as Proposition 218, was passed by California voters in 1996 and added Article XIIIC and Article XIIID to the California Constitution. These articles provide the regulatory framework that guides and informs the rate-setting process. The cost-of-service analyses provide the cost nexus for the proposed rate structures. The regulatory framework helps ensure cost recovery is proportionate to the cost of providing the service.

1.7.1 Water and Recycled Water Utilities
To minimize impacts, retain simplicity, and ensure the reasonable stability of revenue, Black & Veatch recommends the following rate structure.
 Monthly Service Charge: The Water and Recycled Water Utilities should retain the minimum monthly service charge based on meter sizes for all customer classes. The minimum monthly service charge includes a minimum consumption allowance and recovers portions of fixed cost elements such as operating and capital components, meter maintenance and services, meter reading, issuing bills, and maintenance and capacity costs associated with public fire protection.

The minimum consumption allowance accommodates water considered essential for health and safety.
 Consumption Charge: The Water and Recycled Water Utilities should maintain the uniform consumption charge for all customer classes. The consumption charge recovers costs associated with the base and extra capacity demands.

FY 2025 July 15.30% 15.00% 12.15%
FY 2026 July 15.30% 15.00% 12.15%
FY 2027 July 15.30% 15.00% 12.15%
Recycled
Water
Sewer
UtilityFiscal Year
Water
Utility
Effective
Month
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Executive Summary 1-8

 Fire Service Charge: The Water Utility should continue to utilize the fire service charge based on meter size for private fire service connections. The fire service charge will recover maintenance and capacity costs associated with private fire protection costs.  Cross Connection Charge: The Water Utility should continue to utilize the cross -connection charge based on meter size for backflow connections. The cross-connection charge will recover the costs of maintenance associated with backflow devices.

Table 1-2 summarizes the recommended three-year rate schedules for all Water Utility components.

City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Executive Summary 1-9

Table 1-2 Proposed Three-Year Water Rate Schedule

Table 1-3 summarizes the recommended three-year rate schedules for all Recycled Water Utility components.

Mrrn'i1m1m Montihliy M'ete r Ra1tes ,[$/Mon tihl $/ mont h $/ mont h $/ month 5/ 8 '"x. 3/ 4" 23 .42 25.89 30 .90
1" 36 .. 57 4 2.2 48 .66
1-1/ 2'" 69.78 80.51 93 .0 6
2" 109.51 1 25.55 14533
3 " 215.46 2 9 . 3 28,8.41
4 " 33 4.65 387 .55 448 .24
611 665 .77 77 1.25 892 .22
8 " 1,0 6,3.0 9' 1,23 1.59 1;425.0 0
10"' 1,592.85 1,84 5.60 2,13 537
1 2"' 2,238 .52 2,593 ,80 3,001. 13
Fiire Se rvfoe 1($/M'or11t:h1l1 $/ mont h $/ mont h $/ month 2" 3 .15 3 .55 .3.9 5
4 " 17.84 20.0 9' 2239
6" 52.48 59 .09' 6,5,86 ,
8 " 111 .78 1 25.85 140.28
10 "' 201 .0 0 2253 1 252.23
1 2"' 32 4.85 355.75 407 .66
Cr,oS-s uo-rn.1iectJion •($/Momithi'I· $/ mont h $/ mont h .$/ month 1" 8 .60 9 .45 10.4 2
2" 13.76 1 5.11 15.68
3 " 27 .53 3336
4 " · 3.0 1 52.12
611 86 .02 104.25
,gn 137 .53 165 .79
10"' 206 .44 225 .71 250 .19
uom.~m;nptir.on 10h,a1riges ,($/HCFt
General Custome r 8 ,90 10 .27 11.87
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Executive Summary 1-10

Table 1-3 Proposed Three-Year Recycled Water Rate Schedule

1.7.2 Sewer Utility
To minimize impacts, retain simplicity, and ensure the reasonable stability of revenue, Black & Veatch recommends the following rate structure.
 Monthly Service Charge: The Sewer Utility should retain the monthly service charge based on equivalent dwelling units (EDUs) for all residential customer classes. In addition, the monthly service charge serves as the base amount, or minimum, for all non-residential customer classes.  Consumption Charge: The Sewer Utility should retain its uniform consumption charges for each non-residential customer class. The recommended rate structure should be based on customer class.
 Major Commercial and Industrial Users: The Sewer Utility should retain the major commercial and industrial user charge for customers with high discharge quantities and/or high strength loadings.

Table 1-4 summarizes the recommended three-year rate schedules for all Sewer Utility components.

Mrrn'i1m1m Montihliy M'et e r Ra1tes 1($./Mon tihl $/ mont h $/ mont h $/ mont h 5/ .S'"x. 3/ 4" 17 .44 20.0 5 23 .11
1" 28,43 32 .77 37..S3
1-1/ 2'" 55 :91 64.57 74.6,3
2" 88.88 102.72 U 8.79
3 " 17 6,80 20 7 235 .55
4 " 27 5.71 318 .93 36,9 .04
611 550 .46 535.89 737 .0 5
8 " 8 80 .16, 1,0 18 .4 1,178.66
10"' 1,3 19:76 1,527 .17 1,76,7 . .47
1 2"' 1,855 .53 2,147.18 2,485.0 9
Consumpt ir.on ,CJh.,a1riges ,($,/Her t
General Custo mers 5.0 6 5,82 5.59
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Executive Summary 1-11

Table 1-4 Proposed Three-Year Sewer Rate Schedules

Customer Class
M omtllrliy Servi~e 10llit1rge 1($/EOU I· $/ mont h $/ mont h $/ mont h 1 Single Family 52 .37 59.79 66.30
2 M ult i-Fam ily 9 .31 56.09 62 a30
Mimim111111 Commerdia 1I Biilll Oha1rge 1($/Mont lt.J, $/ mont h $/ mont h $/ mont h 3 Al I Custome rs 52 .37 59.79 65,30
Commodirty 1Charge 1($/HCFI· $/ HCF $/ HCF $/ HCF
1 Amus,ement Parks 6.93 7. 6, 8 .59
2 Auto Dealers & Servi,c,e St at io n 7,80 S.70 9.81
3 Chu r,ches 6.12 6.5 4 7.56
0om/ lnd/ M isc 5.51 7.11 8.19
5 Electr i,c ,& Electro n i,c Eiq u i p. 5.48 7.59
5 Fiood and Kind red Pro du cts 1.8.89 20.38
7 Hos.pita ls & Convalesce nt Homes 7.60 .8.35 9 .5 0
8 Indu str ial Chemk al 11.58 13.53 14.83
9 Laund ries 5.,80 7.32 8 .43
10 M achinery M anufact urers 9.33 10.73 11 ..88
11 Meta I Pl at i ng 5.0 5 5.12 6.12
12 M ot els & Hote ls 8 .0 9 8 :96, 10.1
13 Paper 5.67 6.67
14 Ftepa i r Sh ops ,& Car W ashes 5.47 7.37
15 Resta urants 15.0 1 1 9 .27 20.75
16 Schools & Colleges. 7.3 1 S.05 9 .16
Maj:or 1Commerdia 'II amd ltm,d111.stri11II U.sers
Operat ing a nd M ai ntenance Cost Fteoovery
1 Volume ($/ M G) 3,67 1.11 4,020.89 ,192 .10
2 BOD 1$/ 1,000 lbs) 551.28 773.87 ,807 .45
3 ss (.$/ 1poo I bs) 65 L 81 8:98.619 937 .67
NH3 ($/ 1,000 l bs) ,980.00 6,86522 7,164.09
Annu al Capita l Cost Ftecovery
5 Volume ($/ M GD) 1,305,599 1,212 ,316 1,573 ,,838
5 BOD ($/ 1,000 lbs/ ,day) 124,.252 144,032 14 ,561
7 ss (.$/ 1,000 l bs/d ay) 114,.SS.O 131,16,2 131,.597
8 NH3 ($/ 1,000 lbs/ d ay) 538,093 585,442 586,786
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Water and Recycled Water Utilities 2-1

Water and Recycled Water Utilities

2.0 Revenue and Revenue Requirements
To meet the costs associated with providing water services to its customers, the Water and Recycled Water Utilities derive revenue from a variety of sources, including water user charges (rates), developer contributions, solar water heating, interest earned from the investment of available funds, engineering fees, and other miscellaneous revenues. Both utilities are constantly looking for other sources of revenue, such as grants, to fund infrastructure investments. Black & Veatch has projected the level of future revenue generated in the Study through an analysis of historical and future system growth in terms of the number of bills and water consumption. This section also projects the expenses, or revenue requirements, necessary to operate and maintain the system, invest in capital improvements, make debt service payments, and cover other water and recycled water systems expenses.

2.1 Customer and Water Consumption

2.1.1 Customer Classes
The Water Utility’s customer base includes both residential and non-residential accounts. The City has three distinct customer classes: General Customer, Fire Service, and Cross Connection.

The Recycled Water Utility’s customers are mainly non-residential. The City has two distinct customer classes: General Customer and Industrial Process. The City is working on transitioning Industrial Process to General Customer.

2.1.2 Minimum Bills
The City provides potable water services to 26,804 customers and recycled water services to 272 customers. All customers connected to the water and recycled water systems do so through metered connections. The City bills customers based on water consumption, but several bills do not meet the consumption allowance identified by meter size. Therefore, the City refers to these bills as minimum monthly service bills. Since the City bills customers based on minimum bills generated, the analysis included a review of historical bill patterns for customers and anticipated growth within the City. The projected total number of bills is expected to remain constant each year for the Water Utility and increase by an average of 1.0% for the Recycled Water Utility.

Table 2-1 summarizes the projected number of minimum bills for the Water and Recycled Water Utilities.

Table 2-1 Minimum Bills

Wait er utiitity
1 Gener al Cust om ers. 5 ,607 54,607 5 ,607
2 T,ot al 5 ,607 54,607 5 ,607
Recyded W ait er Utirlity
3 Gener al Cust om ers 90 4 913 922
Tot al 90 9 13 922
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Revenue and Revenue Requirements 2-2

2.1.3 Water Consumption
Table 2-2 shows the projected water and recycled water consumption for the Study period. In determining the projected water and recycled water consumption, Black & Veatch analyzed historical water consumption patterns in conjunction with future water conservation requirements set by the City’s Water Shortage Contingency Plan. In 2017, the State of California formally lifted the water restrictions as it declared the drought over. Unfortunately, in 2022 after another three year of dry weather, Governor Newsom called for local water suppliers to move to Level 2 of their Water Shortage Contingency Plans to drive water conservation. The City then moved to Level 2 in conjunction with Valley Water. In July 2023, after increased rainfall, the City rescinded Level 2 and have returned to normal. Despite this, the City and Valley Water work together to maintain a 15% voluntary water use reduction.

Figure 2-1 below represents the population growth and a decline in water consumption. Many factors have contributed to the City’s steady decline in consumption despite the increase in population. The City’s primary conservation goals can be found in the Water Shortage Contingency Plan, and Santa Clara’s Council codified the continuing goal to conserve in July of 2017. The City offers a rain barrel rebate program and works with the Valley Water on other outreach and rebate programs for water conservation.

Expanding the use of recycled water to existing and new customers has also been important for the City in supplementing the use of potable water. Overall, customers have done well to increase efficiency in the use of water resources.

Figure 2-1 Water Sales

Recognizing that the City’s water conservation goals, the City anticipates flat consumption for the Water Utility and 1.0% per year for the Recycled Water Utility over the Study period. The City currently bills water consumption in hundred cubic feet (HCF) and only charges for consumption more than the allowance.

City Water Demand 2023
130,0XI
125,0XI
85J
Lowest Water Use
-l-..- ==-----------------1 During, 14-17 Drought
~ ~
11,000
10,000
-9,000 C)
~
-en
8,000 z
g
..J
<
7,000 C)
z
0 :J
..J
6,000 ~
5,000
4,000
~ · - Popul lion
'),,::)I - W .or ~
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Revenue and Revenue Requirements 2-3

Table 2-2 Billed Water Consumption

2.2 R evenue under Existing Rates
Water and recycled water user rates serve as the primary source of revenue for the Water and Recycled Water Utilities. Therefore, the level of future rate revenue is important in developing a long- range financial plan. To determine rate revenue, the projected system growth in terms of the number of minimum bills and billed water consumption is multiplied by the applicable rates to determine water and recycled water rate revenue.

Table 2-3 shows the current Water and Recycled Water Utilities rate schedules. It is important to note that the minimum monthly service charge applies to customers that do not exceed the consumption allowance within the meter sizes. Therefore, the minimum monthly service charge serves as a baseline cost that the City needs to recover.

(Section left intentionally blank)

Wait er Utiility
1 Gener al Cust omers. 6,,300, 68 6,300,168 5,300,1 58
2 Tota I Usage ( H CF) 6,,300,1 68 6,300,168 5,.300,1 68 3 Tota I Usage !AF) 14, 53 14,46,3 1 ,463
11:ecyd!ed Water Utiility
Gener al Cust ome rs 1,565,3 35 1,581,998 1,597,8 1.S
5 Total 1,565,33 5 1,581,99•8 1,597,.Sl .S
5 Tota I Usage (AF) 3,595 3,532 3,&58
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Revenue and Revenue Requirements 2-4

Table 2-3 Existing Water and Recycled Water Rates

Table 2-4 summarizes projected water and recycled water rate revenue under existing rates. As shown, the revenue generated is projected to increase for recycled water over the Study period in conjunction with the increase in the number of minimum bills and water consumption. The projected Water Utility revenues will remain constant at $53.0M from FY 2025 to FY 2027, while the projected Recycled Water Utility revenue increases from $7.0M in FY 2025 to $7.1M in FY 2027, reflecting an overall increase of

2.0% over the three-year Study period.

De~ri tion --------
Mrrn'i1m1m Montih'liy M et e r Ra,tes
5/ ,8'" x. 3/ 4"
1"
1-1/ 2'"
2"
3 "
4"
,811
10"'
1 2"
Fiire Servfoe Charges
2"
4"
6,"
10"'
1 2"
Cr,os.-s uo-iirn.ectii'on Cha rges
1"
2"
3"
4"
,Sn
10"'
All City I
21 .48
33 .. 66

64.10 100.64
198.07
307 .67
612.14
977 .49
1,464.63
2,0 58.33
(.$/ mo)
2:95

16.71 49 .15
10 4.68

1.S8.23
304-21
(.$/ mo)

6.73 10.7,8
21 .55
33 .67

67.3 4
107 .75
16,1 .63
I
All City
Des.cri tion
Corn,S'l!lmptfon Cha,rges
Wat er UJtiit irty
Gener al Cust omers
Recyded Water UJt itl'ity
Gener al Cust omers
1$/ HCFl

7.97 1$/ HCF)
4 .53
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Revenue and Revenue Requirements 2-5

Table 2-4 Projected Revenue under Existing Rates

2.3 O ther Revenue
Other sources of operating revenue include charges for hydrant flow tests, meter tests, engineering plan review, water installation and relocation, interest on investments, and other miscellaneous revenues. In total, other operating revenues represent 3.5% of the Water Utility’s total revenue and 8.4% of the Recycled Water Utility’s total revenue. The City anticipates that these revenues will remain relatively constant for the duration of the Study period.

2.4 O perating and Maintenance Expenses
Table 2-5 summarizes the Water and Recycled Water Utilities’ projected O&M expense for the Study period. These expenses include costs related to salaries and benefits, materials and supplies, contract and professional services, water supply costs, indirect and direct costs, and routine capital outlay. The City anticipates that all O&M expenditures, excluding water supply costs, will increase on average by

3.9% annually for the Water Utility and an average of 6.1% annually for the Recycled Water Utility from the FY 2025.

Water supply costs include water produced and water purchased costs. In the case of the Water Utility, the City has three main sources of water: 1) groundwater pumped from City-owned wells; 2) surface water from the Valley Water and 3) imported water from the Hetch Hetchy watershed from SFPUC. The City operates 26 groundwater wells that tap the underground aquifers, which make up a targeted amount of approximately 60% of the City's water supply. The City imports the remainder of its water supplies from the two wholesale water agencies. Based on estimates of groundwater and wholesale rates provided by Valley Water and SFPUC, the City expects water production and purchased water costs to increase by at least 21.0% over the Study period.

Recycled water is a reliable drought-proof source of water that helps offset the use of potable sources, especially in drought-prone years in California. In the case of the Recycled Water Utility, the City has one main source of recycled water: The San Jose-Santa Clara Regional Wastewater Facility. This facility produces highly treated water delivered through separate pipelines. Based on estimates from the facility, the City expects purchased recycled water costs to increase by at least 30.2% over the Study period.

(.$) l$l (.$)
Wait er Utiility
1 Gener al Cust ome rs. 50,893 ,400 50,8:93,400 50,893 ,400 2 f ire Servke 1,000,700 1,001 ,600 1,002 ,600
.3 Cr,oss. Oon ne.ctio n 1,0 58,200 1,0 59,300 1,0 60 ,500 Tot al $ 52,952 ,300 $ 52,954,300 $ 52,9 56,500
Recyd!ed Waiter Utiility
5 Gener al Cust om ers 6,990,300 7,060,200 7,130,700
6 Tot al $ 6,990,300 $ 7,060 ,200 $ 7,130,700
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Revenue and Revenue Requirements 2-6

Table 2-5 O&M Expenses

As shown in Table 2-5, the Water Utility’s O&M expenses increase from $59.0M in FY 2025 to $68.5M in FY 2027, while the Recycled Water Utility’s O&M expenses increase from $9.2 M in FY 2025 to $11.7M in FY 2027.

2.5 C apital Improvement Program
The Water and Recycled Water Utilities develop five-year Capital Improvement Plans annually to identify water and recycled water system needs, including assessments, inspections, maintenance, and rehabilitation and replacement requirements.

Table 2-6 summarizes the Water and Recycled Water Utilities CIP for FY 2025 through FY 2027. The Water Utility is projecting $18.4M in CIP, and the Recycled Water Utility is projecting $523.8k in CIP over the Study period, which includes both capital and replacement projects. The City has posted the CIP Budget on its website for complete details associated with each CIP project.

(.$) 1$) (.$)
Wait er Utii I ity
1 Salarie.s 6,119,600 6,42 5,700 6,727 ,700
2 Benefits 3,519,,800 3,674,100 3,67 ,100
3 M at eri a ls} Servk e.s} Su ppl ie.s .3,76B,,300 3,8 43,600 3;920,400 4 I nt erfu n d Servioe.s 8,206,000 8,661,460 9,030,1,80 5 Re.sou r,ce & Produ ct io n 37,359, 0 40;910,200 45,187,.500 6 Capit al Out lay 0 0 0
7 T,ot al $ SB,973 ,100 $ 63,51 5,0 60 $ 68,539,880
Recyded W at er Utirlity
,B Salarie.s 614,000 643,400 674,900
9 Benefit s 353 ,300 368,300 36B,300
10 M at eri a ls} Servi,ce.s}Su ppl ie.s 39,100 39,9 00 40,.700 11 I nterfu n d Servk ,e.s 52 2,300 577 ,0 50 637 ,380
12 Re.sour,c,e & Produ ctio n 7,636,200 8,716,200 9,942 ,,800 13 Ca pit a I Out lay 0 0 0
14 Tot al $ 9,1 64;900 $ 10,344,850 $ 11,66 4,080
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Revenue and Revenue Requirements 2-7

Table 2-6 Capital Improvement Projects

2.5.1 Capital Improvement Financing Plan
The City funds annual expenditures for the CIP from a combination of available funds on hand, connection charges, developer contributions, and revenues derived from user rates. As shown in Table 2-7 and Table 2-8, the average annual CIP expenditure is $6.1M for the Water Utility and $174.6k for the Recycled Water Utility. There is no planned annual CIP contribution from the Water Utility Operating Fund and Recycled Water Utility over the Study period. The CIP will be funded through funds on hand.

Table 2-7 Construction Fund Financing Plan (Water)

(.$) 1$ ) (.$)
Waiter Utii I ity
1 7005 Buil,di ngs. and Ground s 1,0 &8,100 2,41 6,100 55,600 705 4 Distri but io n Sy.stem
2 Rep I a c,em ent/Re.st,orati<on 3,419,600 3r221 ,400 3,338,.200 3 7057 Asset M anagement Progr am 0 0 0
7058 SCADA Improv ements 253 ;900 349,000 389,.500
5 7059 New and Replacement W ells 1r24.3,500 644,300 2,002 ,9 00 6 T,ota l $ 6,005,100 $ 6,630,800 $ 5,7,86,.200
Recyd ed Water Utirlity
7 50 5 Recycle d W ater Sy.stem M ai n.s and
7 Servi,ce.s 414,500 53,700 55,600
,8 Tot al $ 414,500 $ 53,700 $ 55,.600
Fi~II Year Ending June 30, I
Line No. _ Des.cr[S?tion ___ _
!.$) (.$) 1$ )
[email protected] of F<tm ells
1 lntr.a Transfer In - Debt Financing 0 0 0
2 lntr.a Transfer In - Customer Servi,ce Charge 4,550,000 5,750,000 5,750,000 3 Oon nect io n Ch a rge.s 0 0 0
Develop er Oontri but io n.s 0 0 0
5 Tota l Sour,c,e.s $ 4,.550,000 $ 5,750,000 $ 5,750,000 Use of Ft.mdls
6 lmp,rovement.s Projects 6,005,100 6,630,,800 5,7.S,6r200 7 Tota l Uses $ 6,005,100 $ 6,.630,800 $ 5,7.S,6r200
,8 Net Annu al Cash Bal ance 11,455,100) I.S80,.SOO) (.36r200 ) 9 Begi nn ing Unre.strided Fund Bal ance 8r258,81,8 6,803 ,.718 5,922 ,9 18 10 Net Cumulat ive Fund Balance $ 6,803 ,718 $ 5;922 ,9 18 $ 5,666,718 11 M i nimum Oon.stru ct io n Re.s,erve.s $ 6,630,800 $ 5,7.SSr200 $ 5,680,70 0 City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Revenue and Revenue Requirements 2-8

Table 2-8 Construction Fund Financing Plan (Recycled Water)

2.6 T ransfers
The Water and Recycled Water Utilities will each conduct transfers from their respective Operating Funds and other funds over the Study period. Table 2-9, Lines 18 to 21 for the Water Utility and Table 2-10, Lines 13 to 15 for Recycled Water Utility summarize these associated amounts, respectively. The other funds consist of the Rate Stabilization Fund, Pension Stabilization Fund, and Construction Fund. See Section 2.7 for further explanation on Rate Stabilization and Pension Stabilization Funds. The Construction Fund transfers represent money to cover planned CIP project expenditures. These transfers do not represent direct operating expenses for either enterprise; therefore, Black & Veatch includes these costs as “below-the-line” cash flow items and does not include them as O&M expenses.

2.7 R eserves
A utility typically establishes reserves for several reasons, such as covering shortfalls in operating revenues, maintaining strong bond ratings, covering day-to-day operating costs, and easing the burden on ratepayers associated with large rate increases. Per the reserve level recommendations , the Water and Recycled Water Utilities will maintain the following four reserves:
 Operating Reserve represents working capital maintained by the Operating Fund to cover day -to- day expenses and maintain enough funds to cover accounts receivables if there are supplier issues, periods of lower-than-expected water sales, or unforeseen cost increases. The reserve will maintain a minimum balance of 90 days of operating expenses once fully funded.  Construction Reserve represents funds used for unforeseen and unbudgeted capital costs. Once fully funded, this reserve will maintain a minimum balance of 12-months of the following year’s planned CIP.
 Rate Stabilization Reserve represents funds used to absorb revenue shortfall due to short -term decreases in water sales. This reserve stabilizes water and recycled water rate revenue and is an effort to avoid wide swings in rates charged to customers over time. The reserve will maintain a minimum balance of 10% of water and recycled water sales revenue when fully funded . ,.$) (.$) l$l
Sm.1 roe of Fimulis
1 Intra Transfer In - Debt Financing 0 0 0
2 Int ra Transfer In - Cust,omer Servke Charge 0 0 0
3 Oon nectiion Ch a rge.s 0 0 0
4 Develo p er Oont ri but io ns 0 0 0
5 Tota l Sour,ces $ 0 $ 0 $ 0
U:se of Fiu Iii.dis
6 lmp,rovements Projects 414,500 53,700 55,600
7 Tota l Uses $ 14,500 $ 53,700 $ 55,600
,8 Net Annu al Cash Ela l ance 1414,500) (53,700 ) (55,600) 9 Begi nn ing Unre.strk ted Fund B,al ance 587,400 172,900 119,200 10 Net Cumulat iv,e Fund Balance $ 172;900 $ 119,200 $ 63,60 0 11 M i nimum Oonst ru ct io n Re.serves $ 53,70 0 $ 55,600 $ 57,70 0 City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Revenue and Revenue Requirements 2-9

 Pension Stabilization Reserve represents funds used to pay for the unfunded pension liabilities and the increase in the City’s share of pension costs due to factors such as higher CalPERS rates and negotiated pay increases. The reserve target is $3.0M for the Water Utility and $150,000 for the Recycled Water Utility by FY 2030.

Appropriate reserve levels help the Water and Recycled Water Utilities with liquidity, provide operational flexibility, and demonstrate fiscal responsibility to the rating agencies, which allows the City to access lower-cost funds.

2.8 P rojected Operating Results
The revenue requirements of the Water and Recycled Water Utilities consist of O&M expenses, debt service, capital expenditures, and reserve requirements.

To fully understand the current condition of the Water and Recycled Water Utilities, it is important to examine the cash flow projections under the status quo scenario. As shown in Figure 2-2 and Figure 2-3, the status quo conditions would project that both utilities would operate from an annual deficit position, thus requiring the use of reserves to keep operating. In this scenario, the Water and Recycled Water Utilities would not impose any revenue increases over the Study Period and continue to incur O&M expenses, pay for the execution of the planned CIP, and transfer to reserves.

Figure 2-2 Status Quo Operating Cash Flow (Water)

$100,000,000
$80,000,000
$60,000,000
$40,000,000
$20,000,000
so
-$20,000,000
-$40,000,000
-$60,000,000
- O&M
--e- R e.1 enue
Wat er Utility - Opera ting f und
- - - -
2025 2027
- Debt Service - Capita l Projects - Ri'i:eStabilili'i: ion -e- Cash Balance -., Target Cash Balance
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Revenue and Revenue Requirements 2-10

Figure 2-3 Status Quo Operating Cash Flow (Recycled Water)

The analyses performed for the Study indicate that the City should implement the proposed revenue increases shown in Table 2-9 and Table 2-10 if it wishes to keep the Water and Recycled Water Utilities in a balance financial condition. The revenue increases represent the overall total revenue adjustment needed to meet revenue requirements. The revenue adjustment does not represent adjustments to the individual rates but reflects the overall level of revenue needed to meet the Water and Recycled Water Utilities’ obligations.

The suggested revenue increases help the Water and Recycled Water Utilities meet the following goals:
 Meet budgeted operating obligations in the three FYs.  Meet planned capital investments in the three FYs.
 Maintain an operating reserve of 90 days of operating expenses.  Maintain construction reserve of 12-months of next year’s CIP.  Continue transfers for the rate stabilization reserve to meet the goal of 10% of rate revenues.  Continue transfers for the pension stabilization reserve to meet the FY 2030 goal.

Table 2-9 and Table 2-10 summarize proposed Operating Funds for the Study Period. The Operating Funds consist of 1) Revenue and 2) Revenue Requirements.

Revenue
 Line 1 is the revenue under existing rates.
 Lines 2 through 4 are the additional revenues generated from the required annual revenue increases. The additional revenue generated is a direct reflection of the number of months the increase is effective for, and therefore amount might calculate at less than that stated amount.  Line 6 is the total revenue generated from user charges.  Line 14 for the Water Utility and Line 9 for the Recycled Water Utility represent other operating revenues.
$14,000,000
s12,ooo,ooo
Sl0,000 ,000
SS,000,000
$6,000 ,000
$4,000,000
s2,ooo,ooo
so
-s2,ooo,ooo
-$4,000,000
-$6,000,000
- O&M
-a- Re.1enue
Recycled Wat er Utility - Opera ting i= und
- - -
2025 2027
- Debt Service - Capita l Projects - Rate St abililct: ion -e-- Cash Balance -.. Target Cash Balance
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Revenue and Revenue Requirements 2-11

 Line 15 for the Water Utility and Line 10 for the Recycled Water Utility represent total revenues for the enterprises.

Revenue Requirements
 Line 17 for the Water Utility and Line 12 for the Recycled Water Utility represent O&M expenses.

The O&M expenses include water production and water purchase.  Line 22 for the Water Utility and Line 16 for the Recycled Water Utility represent transfers. The transfers include money to the Rate Stabilization Fund, Pension Fund, and Construction Fund.  Line 23 for the Water Utility and Line 17 for the Recycled Water Utility represent total revenue requirements for the enterprises.

Line 26 for the Water Utility and Line 20 for the Recycled Water Utility represent the net cumulative cash balance within the Operating Funds. The net cumulative cash balance intends to match, to the extent possible, Line 27 for the Water Utility and Line 21 for the Recycled Water Utility. The cash balance reserve is required to ensure the Operation Fund can continue in the event of a supplier interruption, market price fluctuations of critical equipment or supplies, or an abrupt drop in account receivables. The reserve target minimum is 90 days of O&M expenses.

(Section left intentionally blank)

City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Revenue and Revenue Requirements 2-12

Table 2-9 Operating Fund (Water)

(.$) (.$) l$l
Revem,ue
Rate Revenue
1 Reve nue from Existi ng Rate.s 53,32 6,400 53,328,400 53,330,600 Ye,ar M ont hs E e.ctive Rate Adj
2 FY 202 5 1 2 1 5.30% 8,1 58,900 8,159,200 8, 59,600
3 FY 2026 , 2 1 5.30% 9,.407,.600 9,408,000
FY 2027 1 2 1 5.30% 10,847, 0
5 lncre,as,e.d Revenue Due to Adj ustments. 8,1 58,900 17,566,SOO 28,41 5,000 6 Su b,t ot a I Rate Revenue $ 61, 85,300 $ 70,895,.200 $ 8 1,7 45,600 Ot her Operat ing Reve nue
7 Sol ar Syste m M aint enance 85,000 85,000 8 5,000
8 W ater Syst em M ai ntenance 1,102,500 1,102,5 00 1, 02,500 9 W ater 0onst r u ctio n 0 0 0
10 W ate r System Op eratiions 0 0 0
11 Adm in istratiion De.sign 1,396,200 1,403 ,.200 1,41 0,300 12 W at,er 1Quality 0 0 0
13 W ater Re:s.ou r,ce.s 0 0 0
14 Su b,t ota I Ot her Operat i ng Reve nue $ 2,583 ,700 $ 2,59 0,700 $ 2,597,800 15 T otall Revem:ILll e $, 64,1069,10@0 $ 73,4 8.5,'900 $, ,8.4,343,400 Revem1 e Req ILll irem elilts
Operat ing & M aint enance
16 O&M Expense.s 58,973 ,100 6,3,51 5,100 6-S,539,900
17 Su b,t ota I O&M $ 58,973,100 $ 6,3,51 5,100 $ 68,539,900 Transfers
18 Tr ansfer to Other Fund s 27.8;900 278,900 278,900
19 Tr ansfer to Rate St abili zat io n Fund 0 0 6,3 50 ,000 20 Tr ansfer to Pens i,o,tn St abili zat io n Fund 199,400 199,400 199,400 21 Tr ansfer t,o, W ater 0onstruct io n Fund 4,550,000 5,750,000 5,750,000 22 Tot al Transfers $ 5,028,300 $ 6,228,300 $ 1 2,578,300 23 Tota11 Reve,me Resq11'ir,emeats $ M ,10@1,.400 $ 69,743,400 $ 81,.118,200 24 Net Annu al Cash Bal ance 6,7,600 3,742 ,5 00 3,22 5,200 25 Beginn ing Fund Bal ance 9,891,600 9,959,.200 13,701,700 26 Net Cumul,at iv,e Fund Bal ance $ 9;959,200 $ 13,701,700 $ 1 6,,926,900 27 M i nimum Ope rat ing Re.serves (9 0 Days) $ 14,541,300 $ 1 5,66,1,300 $ 1 6,900,20 0 City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Revenue and Revenue Requirements 2-13

Table 2-10 Operating Fund (Recycled Water)

Figure 2-4 presents the proposed Water Utility Operating Fund, and Figure 2-5 presents the Recycled Water Utility Operating Fund.
(.$) (.$) l$l
Revem,ue
Rate Revenue
1 Revenue from Exist i ng Rate.s 6;990,300 7,0 60,200 7,130,700 Ye,ar Mont hs E e.ctive Rat e Adj
2 FY 202 5 12 1 5.00% 1,048,500 ,0 59,000 1,069,600
3 FY 2026 2 1 5.00% ,217 ,900 1,230,000
FY 2027 1 2 1 5.00% 1, 14,500
5 lncre,as,e.d Revenue Due to Adj ust ments. 1,048,500 2,276,9 00 3,7 14,100 6 Su b,t ot a I Rate Revenue $ 8,0 38,800 $ 9,337 ,100 $ 10,844,800 Other Operat ing Revenue
7 System M aint enance 97,600 99,600 01,600
8 Sout h Bay W ater Recycl ing Sy.stem M ai nten an 728,400 760,.200 782 ,800 9 Su b,t ot a I Other Operat i ng Revenue $ 826,000 $ 859,,800 $ 6 84,400 10 Tota'II Revemme $ s;Bi64,;&@o $ 10, 196,:900 $, 11,729~200 Revem1e Req11iremelilt:s
Operat ing ,&. M aint enance
11 O&.M Expen.se.s 9,1 64;9 00 10,3 44,9 00 11,664 , 00 12 Su b,t ot a I O&M 9,1 64 ,9 00 10,34 ,9 00 11,664 ,100 Transfers
13 Tr an.sfer t o Rate St abili zat io n Fund 0 0 0
14 Tr an.sfer t o Pensiot n St abili zat ion Fund 0 9,800 9,800 15 Tran.sfer t o Recycl ed W at er Const Fund 0 0 0
16 Tot al Transfers 0 9,800 9,800
17 Total l Revei1111e Requ'ir,ement:s $, 9,1'64~900 $ 10,.3,54,700 $ 11,i673;900 18 Net Annu al Cas h Balanc,e (300,100) (157,800 ) 55,300 19 Beginn ing Fund Balance 3,295,300 2,995 ,200 2,837 ,400 20 Net Cumulat ive Fund Bala nce $ 2;995 ,200 $ 2,837 ,400 $ 2,892 ,700 21 M i nimum Operat ing Reserve.s (9 0 Days) $ 2,259,800 $ 2,.550,800 $ 2,876 ,100 City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Revenue and Revenue Requirements 2-14

Figure 2-4 Water Operating Cash Flow

Figure 2-5 Recycled Water Operating Cash Flow
$9{),000,000
$80,000,000
$70,000 ,000
$60,000,000
SS0,000,000
$40,000,000
$30,000,000
s20,ooo,ooo
Sl0,000,000
so
- O&M
-a- Re.1enue
$14,000,000
S12,ooo,ooo
Sl0,000,000
SS,000,000
$6,000,000
$4,000,000
S.2,000,000
so
- O&M
-a- Re.1enue
Water Utility - Ope rating i= und
-
2025 2026 2027
- Debt Service - Capit al Projects - Rate St abililation -e-- Cash Balance - Target Cash Balance
Recycled Water Utility - Operating Fund
- -
2025 2026 2027
- Debt Service - Capita l Projects - Rate St abililation -e-- Cash Balance -e- Target Cash Balance
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Cost of Service Analysis 3-1

3.0 Cost of Service Analysis
The cost-of-service analysis requires recovery of the City’s needed revenues from water and recycled water service rates, allocated to customer classes according to the service rendered. An equitable rate structure allocates the capture of revenue requirements to customer classes based on the quantity of water consumed, peak flows, the number of customer connections, and other relevant factors.

In analyzing the Water and Recycled Water Utilities’ cost of service for allocation to its customer classes, Black & Veatch selected the annual revenue requirements for FY 2025 as the Test Year (TY) requirements to demonstrate the development of cost-of-service water and recycled water rates. Table 3-1 summarizes the total costs of service that need to be recovered from water user rates. Table 3-2 summarizes the total costs of service that need to be recovered from recycled water user rates. Both tables represent TY 2025.

Table 3-1 Cost of Service Revenue from Rates (Water)

Line No. De~cri tion
Reve1i111e Req1ll'iiriemeats
1 O&.M Expense.s.
2 Debt Servke
3 Tr ansfers
Sub,t ota l
Op,erating
Expense
l-$1
58,973 ,100
0 478,.300
59,451,400
Less Reven11e Req11iir,emelil 1ts Met from Ot:lier Souroe .s 5 Solar Syst em Ma i ntenance 85,000
5 W ater System Ma int enance 1, 02,500
7 W ater Constr uctio n 0
8 W ater System Operat io ns 0
9 Admi nistrat ion Design 1,3 95,.200
10 W ater Quality 0
11 W ater Re.s.ou r,ce.s. 0
12 Sub,tot al 2,583 ,70 0
Adj:11&1:m ent..'S
13 Adj ustm ent for Annu al Cash Balance (57,600 )
14 Subtot al (57,600)
15 Cost of Servi,ce t o be Re.covere d fro m Rate.s. $ 55,935 ,300 $ Capital
Cost
1$ )
0 0
4,550,000
4,550,000
0 0
0 0
0 0
0 0
0 0
4,
550,000
Total
Cost
1-$1
58,973 ,100
0 5,028,300
64,00 ,400
85,.000
,102,.500
0 0
,395,200
0 0
2,58.3,700
16,7,600 )
167,600 )
$ 6 , 85,300
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Cost of Service Analysis 3-2

Table 3-2 Cost of Service Revenue from Rates (Recycled Water)

The total revenue requirement is shown in Line 4, which corresponds with Table 2-9, Line 23, and Table 2-10, Line 17. As shown in Line 12 for the Water Utility and Line 7 for the Recycled Water Utility, we deduct revenues from other sources to derive the net revenue requirement recovered through rates, which correspond with Table 2-9, Line 14 and Table 2-10, Line 9, respectively.

Line 13 for the Water Utility and Line 8 for the Recycled Water Utility represent the net annual cash balance during the TY. If the enterprise is drawing down funds already in the Operating Fund, this number is positive. The number will be negative if the enterprise is replacing funds. In the case of the Water Utility, the $67.6k figure indicates that the forecast is projecting a positive cash balance for the year. In the case of the Recycled Water Utility, the $300.1k figure indicates that the forecast is projecting a negative cash balance for the year.

3.1 F unctional Cost Components
The first step in conducting a cost-of-service analysis involves analyzing the cost of providing water and recycled water service by system function to properly allocate the costs to the various customer classes and, subsequently, design rates. As a basis for allocating costs of service among customer classes, the study separates costs into the following four basic functional cost components: (1) Base; (2) Extra Capacity; (3) Customer; and (4) Direct Assignment, described as follows:
 Base costs represent operating and capital costs of the system associated with service to customers to the extent required under constant or average annual load conditions without the elements necessary to meet water consumption variations or peak demands.  Extra Capacity costs represent those operating and capital costs incurred in meeting peaking demands. Peaking demands represent water consumption more than the average rate of use.  Customer costs are those expenditures that tend to vary in proportion to the number of customers connected to the system. These include meter reading, billing, collecting, accounting, maintenance, and capital costs associated with meters and services.

Line No. De~cri tion
Reve,rn e Req 1J11ir,em eililt:S
1 O&.M Expenses
2 Debt Servke
3 Tr ansfers
Sub,t ot al
Operating
Expense
(.$)
9,1 6 4;900
0 0
9,1 6 ;900
Less Rev enu e Requiir,ements Met from Otli er Sou roes 5 System M aint enance 97,600
6 Sout h Bay W ater Recyd i ng Syst em M ai nte 728, 0
7 Sub,t ot al 826,000
Adj:1J1st:m ent:s
8 Adj ust ment for Annu al Cash Balance 300,100
9 Sub,t ot al 300,100
10 Oost of Servi,ce t o be Recovered fro m Rates $ 8,0 38,,800 $ Capital
Cost
l$l
0 0
0 0
0 0
0 0
0 0 $
Total
Cost
(.$)
9,.1 6 ,900
0 0
9,1 6 ,900
97,600
728,400
826,000
300,100
300,100
8,0 38,,800
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Cost of Service Analysis 3-3

 Directly assigned costs are specifically identified as those incurred to serve specific customers.

These costs include fire protection and cross-connections for the Water Utility. The Recycled Water Utility has no direct assigned categories.

3.2 A llocation to Cost Components
The next step of the cost-of-service process involves allocating each cost element to functional cost components based on the parameter or parameters having the most significant influence on the magnitude of that cost element. O&M expenses are allocated directly to appropriate cost components. A detailed allocation of related capital investment is used as a proxy for allocating capital and replacement costs. The separation of costs into functional components provides a means for distributing such costs to the various classes of customers based on their respective responsibilities for each type of service.

3.2.1 System Base, Max Day, and Max Hour Allocations
The water and recycled water systems consist of various facilities designed and operated to fulfill a given function. For the systems to provide adequate service to its customers, it must be capable of meeting the annual volume requirements and the maximum demand rates placed on the system. Because not all customers and types of customers exert maximum demand at the same time, the capacities of the various facilities must meet the maximum coincidental demand of all classes of customers. Each water and recycled water service facility within the systems has an underlying average demand exerted by the customers for whom the base cost component applies. For those facilities designed solely to meet average day demand, 100% of the costs go to the base cost component. Extra capacity requirements associated with coincidental demands more than average use consist of maximum daily and maximum hourly demand subcomponents.

The first step in determining the allocation percentages for volume-related cost allocations is to assign system peaking factors. The base element is equal to the average daily demand (ADD) and assigned a value of 1.0. Based on the City’s 2002 Water Master Plan, the Water Utility’s maximum day (max day) demand is 1.5 times the ADD. The maximum hourly (max hour) demand is 1.8 times the ADD. Based on the City’s 2014 Strategic and Master Planning Report, 2002 Water Master Plan, the Recycled Water Utility’s max day demand is 1.7 times the ADD. The max hour demand is 2.38 times the ADD.

The costs associated with facilities required to meet maximum day demand are allocable to base and maximum day extra capacity as shown below for the Water Utility. Recycled Water Utility would use a similar allocation based on its respective max day and max hour ratios.  Base = (1.0/1.5) x 100 = 66.7%
 Max Day = (1.5 – 1.0)/1.5 x 100 = 33.3%
These calculations indicate that the average or base use requires 66.7% of the capacity of fac ilities designed and generated to meet maximum day demand, and the remaining 33.3% meets maximum day extra capacity requirements.

The costs associated with facilities required to meet maximum hour demand are allocable to base, maximum day extra capacity and maximum hour extra capacity as follows:
 Base = (1.0/1.8) x 100 = 55.6%
 Max Day = (1.5 – 1.0)/1.8 x 100 = 27.7%
 Max Hour = (1.8 – 1.5)/1.8 x 100 = 16.7%
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Cost of Service Analysis 3-4

3.2.2 Allocation of Operating and Maintenance Expenses
In allocating O&M expenses for TY 2025, costs are directly allocated to the cost components to the extent possible. The Water and Recycled Water Utilities book operating costs by functional categories.

Therefore, Black & Veatch used the factors noted in Section 3.1 to allocate the operating expenses to the cost components. The study based the allocation of Administration and Transfer cost elements on the average of all other costs. The direct assignment represents fire protection and cross -connections for the Water Utility. Table 3-3 and Table 3-4 represent the allocation of O&M to the cost components. Next, revenues are subtracted from other sources as shown in Table 3-1, Lines 12 and 14 and Table 3-2, Lines 7 and 9. The analysis deducts any drawdown of available cash balances and normalizes the rate adjustments for a full year to determine the net O&M costs for each utility.

Table 3-3 Allocation of O&M Expenditures (Water)

Table 3-4 Allocation of O&M Expenditures (Recycled Water)

Descri tion

IS) IS) IS) IS) IS) IS) IS)
Water Uti lity
Operating Expenses
1532 Solar System M aintenance 274,500 0 0 0 27 4,500 0 0 0 1422 W ater System M aintenance
Customer Service 470,900 0 0 0 0 470,900 0 0
3 Backflow Prevention 1,222 ,500 0 0 0 0 0 0 1,222 ,500 4 All othe r 99 7,400 544,800 27 6,400 1 66,200 0 0 10,000 0 1423 W ater Construct ion 3,938,100 2,150,900 1,091,400 656,400 0 0 39,400 0 1424 W ater System Operations
6 Generation & Pumping 1,268,500 833,900 4 21,900 0 0 0 1 2,700 0 Customer Billi ng & M eter Reading 79 2,800 0 0 0 0 792,800 0 0 8 M eters 371,700 0 0 0 3 71,700 0 0 0
Hydrants 1,424,300 0 0 0 0 0 1,424,300 0
9 All othe r 7,100,800 3,878,400 1,967,900 1,1 83,500 0 0 71,000 0 10 1411 Administration Design 3,9 46,800 2,663,900 269,500 143,900 55 2,800 90,600 13 8,400 87,700 11 141 2 W ate r Qua lity 579,600 463,700 0 0 110,100 0 5,800 0 1 2 141 3 W ater Re.sources
W ater Purchase 36,090,900 28,872,700 0 0 6 ,85 7,300 0 3 60,900 0 13 All othe r 49 4,300 395,500 0 0 9 3,900 0 4,900 0
14 Transfers 478,300 322,800 3 2,700 1 7,400 67,000 11,000 1 6,800 10,600 1 5 Total O& M Ex penses S 59,451,400 S 40,1 26,600 4,0 59,800 2,1 67,400 s 8,327 ,300 1,365 ,300 2,084,200 s 1,320,800 Less Other Revenue
16 M iscell aneous Revenues 2,58 3,700 1,743,900 176,400 9 4,200 361,900 59,300 90,600 57,400 17 Other Adj ustments 167,600) 145,500) 14,600) 12,500) 19,500) 11,600) 12,400) 11,500) 18 Net Operating Expenses S 56,935 ,300 $ 38,428,200 3,888,000 2,07 5,700 s 7,9 74,900 1,307,600 1,996,000 s 1,264,900 (Sl ($) ($) ($)
Recyd ed Wat er Utility
Operat ing Ex penses
1 1522 Syste m Ma inte na nce
2 W ater Purchase 7,636,200 7,636 ,200 0 0 0 0
3 Custo me r Billi ng & Mete r Rea ding 3,600 0 0 0 0 3 ,600 4 Meters 533 ,600 0 0 0 533 ,600 0
5 All other 283 ,100 11 8,9 00 83,300 80,900 0 0
6 1525 Sout h Bay W ater Recycl ing Syste m 70 8,400 41 6,700 291,700 0 0 0 7 Tra nsfers 0 0 0 0 0 0
8 Tot a l O&M Expenses $ 9,1 64,900 $ 8,171,800 $ 375 ,000 $ 80,900 $ 533 ,600 $ 3,600 Less Othe r Revenu e
9 Misce lla neous Reve nu es 826,000 736 ,500 33,800 7,300 48,100 300 10 Ot her Adj ust ments 300,100 267 ,600 1 2,300 2,600 17,500 100 11 Net Operat ing Expenses $ 8,0 38,800 $ 7,167,700 s 328,900 s 71,000 $ 468,000 $ 3,200 City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Cost of Service Analysis 3-5

3.2.3 Allocation of Capital Investments
In allocating the capital investment for TY 2025, the existing fixed assets (which serve as a proxy for the current capital investments) are allocated directly to cost components to the extent possible. The allocation of costs in this manner provides a basis for annual investment in water and recycled water system facilities. Plan capital costs can be allocated using the distribution of total net system investment across the functional cost components. Table 3-5 and Table 3-6 show the total allocation of existing system investment serving water and recycled water customers. The total net system investment of $61.2M shown on Line 11 for the Water Utility and $1.1M on Line 9 for the Recycled Water Utility represents the Test Year original cost less accumulated depreciation of the system in service. The total net system investment reflects the Water and Recycled Water Utilities fixed asset listing ending June 30, 2023. This value represents the original cost (book value) of the assets.

Table 3-5 Allocation of Capital Costs (Water)

Table 3-6 Allocation of Capital Costs (Recycled Water)

3.3 U nits of Service
To properly recognize the cost of service, each customer class receives its share of base, maximum day, peak hour, and customer costs. Following the allocation of costs, the total cost responsibility for each customer class is developed using unit costs of service for each cost function and subsequently assigning those costs to the customer classes based on the respective service requirements of each. The number of units of service required by each customer class provides a means for the proportionate distribution of costs previously allocated to respective cost categories.

I I Fire I Cross I
L N D · t· T t IC t Protection Connection

IS) IS) IS) IS) IS) IS) IS) IS)
Water Utility
Plant Assets
Wa ter Production 19,000,900 1 5,200,700 0 0 3 ,6 10,200 0 190,000 0 2 Pumping 2,891,300 1,900,900 961,500 0 0 0 28,900 0
3 Treatment 1,790,700 1,177,300 595 ,500 0 0 0 17,900 0 4 Transmission & Distribution 28,759,500 1 5,708,400 7,9 70,200 4,793 ,300 0 0 287 ,600 0 M eters & Services 6,60 4,100 0 0 0 6,604,100 0 0 0
6 Fire Hydrants 589,900 0 0 0 0 0 589 ,900 0
General Pla nt 1,542,700 879,200 246,500 1 24,000 264,200 0 28,800 0 8 Total Plant Assets S 61,1 79,100 S 34,866,500 9,773 ,700 4,9 1 7,300 S 10,478,500 0 s 1,143,100 s 0 Less Other Revenue
g M iscell aneous Revenues 0 0 0 0 0 0 0 0
10 Other Adj ustments 0 0 0 0 0 0 0 0
11 Net Capital Expenses S 61,1 79,100 S 34,866,500 9,773 ,700 4,9 1 7,300 S 10,478,500 0 s 1,143,100 s 0 Line No. Description Base Max.Day M ax. Hour Met ers Cust/B iTI. ($) ($) ($) ($) ($) ($)
Recycled Wat er Utility
Plant Assets
1 W ater Product i on 0 0 0 0 0 0
2 Pumping 0 0 0 0 0 0
3 Treat ment 0 0 0 0 0 0
4 Transmission & Dist ri but i on 1,072 ,600 450,600 315,500 306,500 0 0 5 Meters 0 0 0 0 0 0
6 Tot al Plant Assets $ 1,072 ,600 $ 450,600 s 315,500 $ 306,500 s 0 $ 0 Less Other Revenue
7 M iscell aneous Revenues 0 0 0 0 0 0
8 Ot her Adj ust ments 0 0 0 0 0 0
g Net Capit al Expenses $ 1,072 ,600 $ 450,600 s 315,500 $ 306,500 s 0 $ 0 City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Cost of Service Analysis 3-6

Table 3-7 summarizes the estimated TY 2025 units of service for the various customers. Base costs vary with the volume of water consumed and distributed to the customers on that basis. Extra Capacity c osts are those associated with meeting peak demand rates of water use and distributed to the customers based on the respective class capacity requirements more than average rates of use. Black & Veatch followed the capacity factor methodology outlined in Appendix A of the AWWA M1 Manual to derive peak consumption information from the monthly consumption records in the City’s Customer Information System which helps provide the basis for estimating maximum day and peak hour ratios. The number of bills for each customer serves as the basis for distributing customer billing requirements. Customer meter requirements are allocated on an equivalent meter’s basis for each customer. The estimated number of equivalent meters for each customer relies on the total number of meters serving respective classes and the hydraulic capacity ratio of the meters to the 5/8 x 3/4-inch meter. The equivalent meter ratios adopted in this analysis are consistent with the AWWA M1 Manual. Private fire-protection costs allocations use equivalent fire hydrants.

3.4 C ost of Service Allocations
The Study applies the unit costs of service to each customer class’s respective service requirements to determine the cost of service for each customer class. The total unit costs of service applied to t he respective requirements for each customer class results in the total cost of service for each customer class.

3.4.1 Units Costs of Service
The TY 2025 unit cost of service for each functional cost component is simply the total cost divided by the applicable units of service, as shown in Table 3-8 and Table 3-10. On Line 4, the total costs represent the cost that rates need to recover, as demonstrated in Table 3-1, Line 16 for the Water Utility, and Table 3-2, Line 11 for the Recycled Water Utility. The net O&M cost includes O&M (including water purchase) less revenue from other sources and adjustments. The total capital cost includes debt service payments and transfers to the Construction Fund. Line 6 represents the unit costs for the entire water and recycled water systems regardless of customer classes. After that, the unit costs are used to allocate the costs to the specific customer classes.

3.4.2 Distribution of Costs of Service to Customer Classes Applying the unit costs to the units for each customer class produces the customer class costs. This process is illustrated in Table 3-9 and Table 3-11, in which unit costs are applied to the customer class units of service for TY 2025. The costs attributable to each customer class reflect the functional cost components described in Section 3.1. Each customer class places a burden on the system in different ways, and thus the allocation of the units is representative of this burden.

An example of the application of unit costs is shown below for illustrative purposes.

Base Component
Uni t Cost (Tabl e 3-5, Li ne 6) 6.45$ per HCF G
eneral Customer Consumption (Table 3-6, Line 2) 6,358,416 HCF Total Allocated Cost 41,021,300$
Please note that the numbers within the tables are rounded, yet the calculations are done based on non-rounded values; therefore, results might vary.

City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Cost of Service Analysis 3-1

Table 3-7 Units of Service (Water and Recycled Water)

Table 3-8 Units Cost of Service (Water)

,_ Fire
Annual Avg. Day Factor Total Extra Fact or Total Extra Cust/Bills. Protection Column Refer ence (1) (2) (3) (4) (5) (6) (7) (8) (9 ) (10 ) (11 ) (12 ) Units of M eas ure (HCF) (HCF/day) (HCF/ day) (HCF/da y) (HCF/day) ( HCF/ day) (EMs) (bi lls) (EHs) (EMs) Water Uti lity
1 General Customer 6,358,416 17,420 166% 2 8,9 18 11,497 249% 43,377 14,459 45,352 3 16,98 5 0 0 Subtot al 6,358,416 17,4 20 28,9 18 11,497 43,377 14,459 45,352 316,985 Fire Serv ice
Publi c Fire 0 0 558 558 4,468 3,909 0 0 3,437 0
4 Private Fire 0 0 28 4 284 2,270 1,987 0 15,28 5 1,747 0 Subtota l 0 0 842 842 6,738 5,896 0 15,285 5,1 84 0
Cross Connect ion
6 Cross Connect ion 35,556 0 8,424
Subtot a l 0 0 0 0 0 0 0 35,556 0 8,424
8 Total W ater System 6,358,41 6 17,420 29,760 1 2,340 50,11 5 20,355 45,352 367 ,826 5,1 84 8,424 Recycled W ater Ut ility
9 General Custo mer 1,56 6,335 4,29 1 130% 5,579 1,287 195% 8,368 2,789 2,366 3,341 0 0 10 S ubt ota l 1,566,335 4,29 1 5,579 1,287 8,368 2,789 2,366 3,341 0 0 ($ ) ($) ($) ($) ($)
W at er Ut:ility
1 Net O perat i ng Expense 56;935 ,300 38,42 8,200 3,.888,000 2,07 5,700 7;97 4;900 1,307 ,600 1,996,000 1,264,900 2 Debt Servi ce 0 0 0 0 0 0 0 0
3 Capita l Costs 4,550 ,000 2,593 ,100 726;900 365 ,700 779 ,300 0 85,000 0 4 Tot al Cost of Servi ce $ 61,485,300 $ 41,021 ,300 $ 4,614,900 $ 2,441,400 $ 8,754,200 $ 1,307 ,600 $ 2,0 8 1,000 $ 1,264 ,900 5 Units of Servi ce (Tota l ) 5,358,41 6 1 2,340 20,355 4 5,3 52 367 ,825 5,184 8 ,4 24 HCf HCF/ Day HCIF/ Day Eq. M eters Bill s Eq. Hydr ants Eq. M eters 5 Cost per Unit $ 6.45 $ 373 _99 $ 119 .9 4 $ 19 3.0 3 $ 3.55 $ 401 .. 46 $ 150.15 per HCF per HCF/ Day per HCF/Day per Eq. Meter per Bill per Eq. Hydr ant per Eq. M eter City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Cost of Service Analysis 3-2

Table 3-9 Distribution of Costs to Customer Classes (Water)

Common to All Customers
Base Extra capacity Customer Fire Cross
Line No. Description Total Costs • Protection Connection ($) ($) ($) ($) ($) ($) ($)
W at er Ut:i'lity
General Cust ome r
1 Units 5,358,41 5 11,497 14,4 59 4 5,352 31 5,985 0 0
2 All ocat ion of cost s of service 55;935,500 41,021 ,300 4,299,900 1,734,200 8,754,200 1,1 25,900 0 0 Publ i,c Fire
3 Units 0 558 3,9 09 0 0 3,437 0
4 All oca t ion ,of c,osts of service 2,0 57,600 0 208;900 4 58;9 00 0 0 1,379,.800 0 Private Fi re
5 Units 0 284 1;987 0 1 5,285 1,747 0
5 All oca t ion of costs of service 1,0 99,900 0 106,100 238,300 0 54,300 701,200 0 Cross Connect i on
7 Units 0 0 0 0 35,555 0 8,424
8 All oca t ion of costs of service 1,391,300 0 0 0 0 1 25,400 0 1,264,900 7 TOTAL COSTS OF SERVICE $ 51,485,300 $ 41,021 ,300 $ 4,614;900 $ 2,441 ,400 $ 8,754,200 $ 1,307 ,600 $ 2,0 81,000 $ 1,264 ,900 City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Cost of Service Analysis 3-3

Table 3-10 Units Cost of Service (Recycled Water)

Table 3-11 Distribution of Costs to Customer Classes (Recycled Water)

($) !$) (.$) !$) (.$)
Recyded Waiter Utirlity
1 Net Oper ati ng Ex.pense 8,038,.SOO 7,1 57,700 328,900 71,000 468,000 3,200 2 Debit Servi,ce 0 0 0 0 0 0
3 Ca pita I Oosts 0 0 0 0 0 0
4 Tota I Oost of Servi,ce $ 8,0 38,800 $ 7,1 57,700 $ 328;900 $ 71PQO $ 468,000 $ 3,200 5 Un its of Servi,ce (Tota I l 1,566,335 1,287 2,78:9 2,365 3,341 HCF HCF/ Day HCF/ Day 6q. Mete rs Bill s
5 Oost per Unit $ 4 ..58 $ 255 .48 $ 25 .45 $ 197,82 $ 0 .96, per HCF per HCF/ Day per HCF/ Day per 6q. Met er per Bill Une .J j Total Costs .

Common to All Curtomers
B.ase Extra C.ap.adty Cusiomer
Des-criptlon ••
!$) l$l (.$) !$)
Recyded Water Utiilirty
General Custome r
1 Units 1,565,335 1,287 2,789 2,366, 3,341
2 Allocat io n of ,costs of serv k e 8,038,800 7,1 57,700 328;900 71,000 468,000 3,200 3 TOTAL OOSTS OF SERVICE $ .S,038,800 $ 7,1 57,700 $ 32.8;900 $ 71,000 $ 68,000 $ 3,200 City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Rate Design 4-1

4.0 Rate Design
The initial consideration in the derivation of rate schedules for water and recycled water service is establishing equitable charges to the customers commensurate with the cost of providing that service.

While the cost-of-service allocations to customer classes should not be construed as literal or exact determinations, they offer a guide to the necessity for, and the extent of, rate adjustments. Practical considerations sometimes modify rate adjustments by considering additional factors such as the extent of bill impacts, existing contracts, and historical local policies and practices.

4.1 E xisting Rates
The existing rates of the Water and Recycled Water Utilities consist of a fixed component in the form of a minimum monthly service charge and a variable component in the form of a consumption charge. The minimum monthly service charge is based on meter size and applied when consumption does not exceed the consumption allowance. The consumption charge is based on units of consumption (1 unit = 1 HCF = 748 gallons). The City has separate fixed charges for fire services and cross -connections. Table 2-3, presented earlier in this report, summarizes the existing water and recycled water rates.

4.2 P roposed Rates
The cost-of-service analysis described in the preceding sections of this report provides a basis for the design of water and recycled water rates.

4.2.1 Monthly Service Charge
Black & Veatch used meter ratios based on maximum operating capacities by meter size as shown in AWWA M1, Table B-1, which recognizes that as meter size increases, so does the capacity. For example, customers with a 4” meter expects to be able to use more water (at a higher flow capacity) than customers with a ¾” meter. Consequently, the City’s water system must maintain assets sized accordingly and capable of providing customers the level of service expected from their meter connection when the tap turns on. The minimum monthly service charge recovers a portion of the costs associated with wholesale water purchase, meter maintenance and services, meter reading, bill issuance, and maintenance and capacity costs associated with public fire protection regardless of the level of water consumed.

Table 4-1 demonstrates the water cost elements incorporated into the minimum monthly service charge for FY 2025. Table 4-2 shows the Water Utility three-year fixed service charge rate schedule.

Table 4-1 Costs within the Minimum Monthly Service Charge for FY 2025 (Water)

Table 4-2 Proposed Minimum Monthly Service Charge (Water) Meter & Public Fire Protection
Mt r l'Jnit FP l'Jnit Mete r Adju.sted Adjusted
Cost Co,st Ratio l'Jnit Cost l'Jnit Cost Bill Rat i.o l'Jnit Co,st per EM per EM s per Bill s $/ Month
5/ 8" X 3/ 4" 1 6.09 3.78 1.0 0 19B7 3.55 1.00 3.55 23 .42 1" 1 6.0 9 3.78 1.67 33 .11 3.55 1 .00 3.55 36 .67
1-1/ 2" 1 6.09 3.78 3.33 66.22 3.55 1.00 3.55 69.78
2" 1 6.0 9 3.78 5.33 10 5:95 3.55 1.00 3.55 10 9.5 1
3" 1 6.09 3.78 10 .67 21L91 3.55 1 .00 3.55 21 5.46
4" 1 6.0 9 3.78 1 6.67 33 1.11 3.55 1 .00 3.55 33 4.66
6-" 1 6.09 3.78 33 .33 662 .21 3.55 1 .00 3.55 655 .77
8" 1 6.0 9 3.78 53 .33 1,0 59 .54 3.55 1.00 3.55 1,0 5,3.0 9 10 " 1 6.09 3.78 80 .00 1,589 "31 3.55 1.00 3.55 1,592 .86 1 2" 1 6.0 9 3.78 11 2.50 2,234.96 3.55 1 .00 3.55 2,238 .52 City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Rate Design 4-2

Table 4-3 demonstrates the recycled water cost elements incorporated into the minimum monthly service charge for FY 2025. Table 4-4 shows the Recycled Water Utility three-year fixed service charge rate schedule.

Table 4-3 Costs within the Minimum Monthly Service Charge for FY 2025 (Recycled Water)

Table 4-4 Proposed Minimum Monthly Service Charge (Recycled Water)

FY 202.5
@M,t.fM•~
FY 20 2 6 FY 20 27
Mlrn'inn1m M'ontililiy M'et e r Ra1tes 1($./M'on tihl' $/ mont h $/ mont h $/ mont h 5/ 8 " x 3 / 4" 2.3_42 26,89 30 _90
1" 36 . .57 4 2.2 4 3 _55
1-1/ 2'" 69 :78 ,80_61 93 .0 6
2" 109_51 1 26_65 14633
3 " 21 5 _46 2 9 _43 288 . .41
4 11 33 4 _55 387 -5 6 448.24
66,5:77 77 1.26 892 _22
8 " 1,0 6,;:!_09 1,23 1.69 1,4 25.0 0
10"' 1,592 ,8,6 1,8 4 5 _60 2,13 537
1 2"' 2,238 _5 2 2,593B.O 3,0 01 _13
Mt r UJ niit Mete r Adju st ed Adj1Jsted
Co.>t Ra,tfo Unit Co.>t Uniit Co.st Rnll Ratio UniitCo>l per EM $ per Bill $ $/ Mont h
5/ 8"' X 3/ 4"' 15_49 1_00 16-.49 0 _96 1.00 0 _95 17_44 1" 15_49 1_57 27 _48 o_95 1.00 0 _95 28_43
1-1/ 2" 15_49 3.33 54:95 0 _95 1_00 0 _95 55 _9 1
2"' 15_49 5.33 87:92 0 :96, 1.00 0:96 88-88
3" 15_49 10_57 175.84 0 :96, 1.00 0 _95 176 _80
4" 15_49 16-67 27 4.75 0 :96 1_00 0 _95 275_71
6,11, 15_49 33.33 549 .50 0 _96 1.0 0 0 _95 550 _46
8" 15_49 53.33 879 -20 o_95 1.00 0 _95 880 _16
10" 15_49 .80_00 1,318.,81 0 :96 1_00 0 _95 1,319 _75
12" 15_49 11 2_50 1,854-57 0 :96, 1.00 0:96 1,855 _53
FY 20 25
YM-hM·~
FY 202 6 FY 20 27
Milllm1.1m M'ontih'liy M'et e r Rates 1($./M'on tih} $/ mont h $/ mont h $/ mont h 5/.8" x 3 / 4" 17 _44 2o_o5 2.3_11
1" 2.8_4 3 32 _77 37_,33
1-1/ 2"' 55 :91 54_57 7 4 _5,3
2" .S8_,88 102 _72 11.8_79
.3 " 176,80 204A7 236 . .55
27 5 _71 3 18 _93 369 .04
550 _46 636-89 737 _0 5
,gn 880 _16 1,018 _44 1,178_66,
10"' 1,3 19 :76 1,5 27 _17 1,76,7 _47
1 2"' 1,8 55 _53 2,147 _18 2,48 5 _0 9
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Rate Design 4-3

4.2.2 Fire Service
The fire service charge includes costs of issuing bills and maintenance and capacity costs associated with private fire protection. The fire service charge increases as pipeline diameter size increases. The Water Utility provides fire service to approximately 1,274 private fire service accounts. These customers have a water line connection to the water system specifically for fire protection. The Water Utility must design, operate, and maintain a water system that can meet peak fire demand requirements to meet fire protection demands. The Water Utility charges these accounts a fire service charge based on the diameter of the line that connects their fire protection system to the water system. Table 4-5 demonstrates the costs incorporated into the fire service charge, and Table 4-6 shows the three-year rate schedule based on unit costs in future years.

Table 4-5 Costs within the Fire Service Charge for FY 2025

Table 4-6 Proposed Fire Service Charge

4.2.3 Cross Connection
The cross-connection charge includes costs of issuing bills and maintenance and replacement costs associated with backflow devices. The cross-connection charge increases as pipeline diameter size increases. The Water Utility provides backflow services to approximately 2,963 accounts. These customers have a backflow device that prevents possible contaminated water from entering the water system. The Water Utility maintains and replaces the devices accordingly to ensure that the devices are working properly. The Water Utility charges the accounts a cross-connection charge based on the diameter of the line that connects their service to the water system. Table 4-7 demonstrates the costs incorporated into the cross-connection charge, and Table 4-8 shows the three-year rate schedule.

- . • -
M et er
Ratio UniitCo.st
per EH $/ Month
2" 52 .48 0.05 3.1 5 3 .1 5
4" 52 .. 48 0.3 4 1 7,8,4 17.84
Gill 52.48 1.00 52.48 52.48
a" 52.48 2.13 111 .78 111. 78
10"' 52 .48 3..83 201 .0 0 201.00
12" 52.48 5.19' 32 ..85 32 4..85
Proposed I
Fiire Servfoe 1($,/Molilt:h1l· $/ mont h $/ month $/ mont h 2" 3 .1 5 3 .55 3 .95
4 11 1 7..84 20.09' 22 ,39
6i" 52 .48 59.09' 65,8,6
8 " 11 .78 1 25,85 140 . .28
10 '" 201.00 225.3 1 252 . .23
12'" 32 4..85 355 .75 407.66
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Rate Design 4-4

Table 4-7 Costs within the Cross-Connection Charge for FY 2025

Table 4-8 Proposed Cross Connection Charge

4.2.4 Consumption Charge
This consumption charge is designed to recover costs associated with the base and extra capacity demands. These costs include fixed and variable costs incurred by the water and recycled water system while providing the average annual usage and peaking demands. While most of the costs are fixed, such as personnel and direct and indirect charges, variable costs represent most of the costs through water production and water purchase. Table 4-9 shows the three-year rate schedule for both the Water and Recycled Water Utilities. For the Recycled Water Utility, the industrial process is part of general customers.

Table 4-9 Proposed Consumption Charges

4.3 T ypical Monthly Costs under Proposed Charges
Table 4-10 and Table 4-11 compare typical monthly costs under existing rates and the proposed schedule of water and recycled water user rates derived in this study.

Cost Raitfo UniitCost
per EM $/ Mont h
1" 1 3.76 0 .63 8 .. 60 8 .60
2" 1 3.76 1.00 1 3 . .76 13 .76
.3" 1 3.76 2D0 27 . .53 27 .53
4" 13 .76 3.13 43 .01 3 .01
fill 1 3.76 5.25 ,8,6.02 ,8i6D2
,8" 1 3.76 10D0 137 .6,3 137 .63
10"' 1 3.75 1 5DO 206 .44 206,.

Proposed I
~-
Cms.s uolil1iectiio n 1($/M'orn,tlh,J $/ mont h $/ mont h $/ mont h 1" 8 .. 60 9 .45 10.42
2" 1 3.76 1 5.11 1 6 .. 68
.3" 27 . .53 30.23 33 a36
4 " 43 .01 47 .23 52 .12
Gill ,86.02 94. 6 10 .25
all 137 .63 1 51.14 166.79'
10"' 206 .44 226,.71 250. 19'
I Proposed I
--$/ HCF $/ HCF $/ HCF
uorwumptir.on 11Jha11"1ge:s ,($,/HCFJ
W a,t er Utillity
General Custome r 8.90 10.2 7 11 .87
Recyded W art,er Utilirty
General Customers 5.06 5.82 6.69'
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Rate Design 4-5

Table 4-10 Typical Monthly Bill (Water)

Table 4-11 Typical Monthly Bill (Recycled Water)

4.4 N eighboring Water Utilities
Presented in Figure 4-1 are the proposed rates compared to rates of neighboring cities for a single- family residential customer with a 5/8” x ¾” meter consuming 12 units of water. Based on the comparison, the City is currently one of the lowest water providers in the area. With the proposed rate increases, the City remains the lowest water provider of the surveyed communities. All surveyed community rates are current as of April 2024.

Typical
Monthly
Customer Class Usage
Genera l Customer
Recyd ed W aile r Utiility
Genera l Customer
(HCF)
0 3
5 10
12 20
30 40
50 Typical
Monthly
Usage
(HCFI
0 3
5 10
12 20
30 40
50 FY 2024
Existing
Rates
(.$)
$2 1.
$2 1.
8 8
$39,8 5
$79 .70
$95.6
$1 59 .40
$239 .10
$3 18 ,80
$398 .50
I ,
$5 .36
$90 .60
$13 5.9 0
$ 18 1 .20
$226 .50
FY 2025
Proposed
Rates
$23 .42
$23 .42
$44.48
$&8 :97
$106.76,
$177 .94
$2 66:9 1
$3 55 B8
$444B 5
-l$l
$ 17.44
$ 17.44
$2 53 1
$ 60.7 5
$101 .2 5
$1 51 B8
$202 5 0
$2 53.13
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Rate Design 4-6

Figure 4-1 Comparison to Neighboring Water Utilities

$250 .00
$200 .00
$150 .00
$100 .00
$50 .00
$0 .00
Water Rate 12 HCF
Sewer Rate
Combined
Sunnyvale
$86 .50
$67 .95
$1 54.45
~ nta Clara SJWC
$106.80 $125.44
$52.37 $49 .59
$159.17 $175.03
I I
Mountain View San Jose (Muni) Milpitas Palo Alto
$122 .86 $132.25 $116.72 $152. 19
$54 .60 $49.59 $66.79 $55 .93
$1 77.46 $181.84 $183.51 $208.12
*All rates are proposed for FY24-25
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Sewer Utility 5-1

Sewer Utility

5.0 Revenue and Revenue Requirements
To meet the costs associated with providing sewer services to its customers, the Sewer Utility derives revenue from a variety of sources, including sewer user charges (rates), outlet charges, conveyance fees, connection charges, interest earned from the investment of available funds, engineering fees, and other miscellaneous revenues. The Sewer Utility is constantly looking for other sources of revenue, such as loans, bonds, and grants. Black & Veatch has projected the level of future revenue generated in the Study through an analysis of historical and future system growth in terms of the number of EDUs, bil ls, and contributed sewage flow. This section also projects the expenses, or revenue requirements, necessary to operate and maintain the system, invest in capital improvements, make debt service payments, and cover other sewer system expenses.

5.1 C ustomer and Water Consumption Projections

5.1.1 Customer Classes
The Sewer Utility’s customers include both residential and non-residential customers. The City has the following customer classes:
 Residential: Single-family residential and multi-family residential.  Non-Residential: Amusement Parks; Auto Dealers & Service Stations; Churches; Electric & Electronic Equipment; Food & Kindred Products; Hospitals & Convalescent Homes; Industrial Chemical; Industrial Water Treatment; Laundries; Machinery Manufacturers; Metal Plati ng; Motels & Hotels; Paper; Repair Shops & Car Washes; Restaurants; Schools & Colleges; and Commercial/Industrial/Miscellaneous (catch-all for remainder of non-residential customers).  Major Users: Major Users customer class is composed of major commercial and industrial users who are identified based on the following:
1 ● Have a sewage discharge of at least 25,000 gallons per day; or ● Have a daily discharge that is intermittent or irregular in strength, amount, or nature.

5.1.2 Equivalent Dwelling Units
The City provides sewer services to over 25,547 customers. All customers generating sewage flow connect to the sewer system. Since the City bills residential customers based on EDUs, a review of historical EDUs patterns for customers, and anticipated growth within the City, the projected total number of EDUs is expected to grow at 0.2% annually over the Study period. An EDU represents a single-family residential customer equivalent with a flow of 245 gallons per day and strengths of 250 mg/L of Biological Oxygen Demand (BOD), 250 mg/L of Total Suspended Solids (TSS), and 35 mg/L of Ammonia (NH3).

Table 5-1 summarizes the projected number of EDUs for the Sewer Utility.

Table 5-1 EDUs

1 City Website, Schedule S-16 Monthly Sewer Service Charges, <http://www.santaclaraca.gov/government/departments/water- sewer-utilities/water-sewer-and-recycled-water-rates/sewer-rates> City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Revenue and Revenue Requirements 5-2

5.1.3 Minimum Bills
The City bills non-residential customers primarily on contributed sewage flow and imposes a minimum bill on those whose flow charges do not exceed the included volume allowance within the monthly service charge. The City refers to these bills as minimum monthly service bills. Therefore, a review of his torical minimum bills patterns for non-residential customers and anticipated growth within the City, the projected total number of minimum bills is expected to remain constant over the Study period.

Table 5-2 summarizes the projected number of minimum monthly service bills for the Sewer Utility.

Table 5-2 Minimum Monthly Service Bills

5.1.4 Contributed Sewage Flow
The City charges all its non-residential customers based on contributed sewage flow, which is determined by multiplying water consumption by a return factor. In determining the projected sewage flow, Black & Veatch analyzed historical sewage flow patterns in conjunction with a projected estimate of future water consumption. In conjunction with water consumption, contributed sewage flow has fluctuated based on drought conditions in the state. In addition, the City’s Water Shortage Contingency Plan remains in effect, and customers have made conservation a way of life. Therefore, the City projects that sewage flow will remain flat over the Study period.
1 Single Family 256r9 44 257,58,6 258r230
2 M ult i Family 318, 49 3 19,2 5 320,0 43
3 T,otal 575,393 576,63 1 578r273
(Bill s)
1 Amusem ent Parks 1 5 11 5 11 5
2 Auto Dealers & Servk e Stat io n 38,6 38,6, 386
3 Chu r,ches 268 268 268
Oomme r,ci al/ lndu st rial/ M isc,ell aneous 10,.262 10,262 10,262 5 Elect ri,c & Elect ro n i,c 6q u i p. 425 42 5 425
6 Fiood and Kind red Pro du cts 29 29 29
7 Hosp it als & Convalescent Homes 31 6 316, 31 6
8 Ind ustr i.a I Chem i,c a I 43 43 43
9 Laund ries 138 138 13 8
10 M achinery Ma nufact urers 72 1 72 1 72 1
11 Metal Plat i ng 93 9 3 93
12 Mot els & Hote ls 53 53 53
13 Paper 13 13
14 Repai r Shops& . Car W ashes 469 469
15 RJesta u rants 264 26 4
16 Schools & Co lleges 533 533 533
17 Tot al 14,1 28 14,1 28 14,.1 28
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Revenue and Revenue Requirements 5-3

Table 5-3 shows the projected sewage flow generated for the Study period. The City contributed sewage flow in units of HCF for non-residential customers.

Table 5-3 Contributed Sewage Flow

5.1.5 Major Users
The City charges major commercial and industrial sewer customers based on contributed sewage flow and strength loadings. Major users are identified individually, as each customer places different burdens on the sewer system. In the 2023, the City’s last major user customer left the City, therefore there are no major users for the duration of the Study period.

5.2 R evenue under Existing Rates
Sewer user rates serve as the primary source of revenue for the Sewer Utility. Therefore, the level of future rate revenue is important in developing a long-range financial plan. Rate revenue is determined by multiplying the projected system growth in terms of the number of EDUs, minimum monthly service bills, contributed sewage flow, and major user flow and loadings by the applicable rates to determine sewer rate revenue.

Table 5-4 shows the Sewer Utility’s current schedule of charges. It is important to note that the minimum monthly service charge applies to non-residential customers that do not exceed the base amount.

Therefore, the minimum monthly service charge serves as a baseline cost that the City needs to recover.

The City maintains a separate schedule of rates based on the customer classes identified in Section 5.1. 1 Amus,ement Parks 67,629 67,6,29 67,629
2 Auto Dealers & Servi,ce St at io n 27,0 29 27,0 29 27,0 29 3 Chu r,ches 14;991 14r99'1 1 ,991
Oom mer,c i a 1/ 1 n d ustri a 1/ M isc,el I a neous 1,273 ,399 l r273,399 1,273 ,39'9 5 Elect ri,c & Elect r,on i,c 6q u i p. 454,347 454,3 47 45 ,347 6 Fiood and Kind red Pro du cts 1 6,.571 16,,57 1 1 6,571 7 Hos.pit a ls & Co nvalesce nt Homes 90,459 90, 59
8 Indu st rial Chem i,cal 14,7 8 14,718
9 Laund ries 24,247
10 M achinery Ma n ufa ct u rers 36,85 4
11 Met al Pl at i ng 6,441
12 M ot els & Hotels 10 1,779 10 1,779 10 1,.779
13 Paper 45 4 5 45
14 Repai r Sh ops &. Ca r W ash es 11,07 6 11,0 76 11,0 76 15 Rest a u ra nt.s 72,265 72r265 72,265
16 Schools &. Co lleges 44,6-83 44,68.3 4 ,683
17 Total !HCF) 2,256,533 2,256,,533 2,256,533
18 Total !AF) 5,1.8-0 5,18.0 5,1.80
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Revenue and Revenue Requirements 5-4

Table 5-4 Existing Sewer Rates

Table 5-5 summarizes projected sewer rate revenue under existing rates. As shown, the revenue generated stays relatively flat over the Study period in conjunction with the number of EDUs, minimum bills, billed sewage flow, and major user volume and loadings. The projected Sewer Utility revenues increase from $41.0M in FY 2025 to $41.1M in FY 2027.

(Section left intentionally blank)

Existing
______ Description _____ _
Resident 1a'II (-S/ EDU)
Si ngle Family 48.28
Mu lt i-Family 45.88
Nonr-Resident i!a'II [1] (-S/ HCF)
Amus,ement Parks 6.1 5
Auto Dealers & Service St at io n 6.76
Chu rches 5.55
Com/ Ind/ M isc 5.87
Electri c &. Electro nic Equ i p. 5.55
foo d and Ki nd red Produ cts 13 .45
H ospit a l:s -&. Convalesce nt Hom es 6.72
Industria l Chemica l 10.0 2
Laund ries 6.0 2
M achi nery M anufact urers 8 .1 6
Met a I Pl at i ng .50
M otels & Hote ls 7 .0 9
Paper 1 3.82
Repa ir Shops &Ca r W ashes 5.1 5
Rest aurants 13 .70
Schools & Col leg-es 6.54
I
Existing
_ Des.cription
MaJor Comm e rcia II a n.d 11'. nd u:stnia II llsers
Annu al Capit al Cost Recovery
Volume (per MG D)
BOD [2] (per 1,000 l hs/ ,day)
SS [3] (per 1,000 lhsj,day)
NH3 [4] (per 1,000 l hsj,day)
Operat i ng a nd M ai ntenance Cost Recovery
Volume (per MG)
BOD [2] (per 1,000 l hs)
SS [3] (per 1,000 lhs.)
NH3 [4] (per 1,000 l hs)
1,147,617
85,145
77,042
466,740
3,315.00
502 .00
625 .0 0
5,1 25 .00

1. In n o ,case :shall t he mi nimum c harge be less t han $ 8 . .28 per month .

City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Revenue and Revenue Requirements 5-5

Table 5-5 Projected Revenue under Existing Rates

5.3 O ther Revenue
Other operating sources include charges for revenue from other agencies served by Santa Clara, sewer lateral video inspections, sewer clean-out installations, interest on investments, and other miscellaneous revenues. In total, other operating revenues represent 2.9% of the Sewer Utility’s total revenue. The City anticipates that these revenues will remain relatively constant for the duration of the Study period.

5.4 O perating and Maintenance Expenses
Table 5-6 summarizes the Sewer Utility’s projected O&M expenses for the Study Period. These expenses include costs related to salaries and benefits, materials and supplies, contract and professional services, RWF costs, indirect and direct costs, and routine capital outlay. The City anticipates that all O&M expenditures, excluding Water Pollution Control Plant costs, will increase on average by 5.1% annually from the FY 2025.

The Sewer Utility receives treatment services from the RWF operated and maintained by the City of San Jose. While the City has an ownership stake in the RWF, the City must still pay for O&M associated with operating the facility. Based on the City of San Jose estimates, the City expects RWF O&M costs to increase by approximately 3.0% annually over the Study period.

(.$) 1$) (.$)
1 Single Family 12r270r9 0Q 1 2,301,600
2 M ult i-Family 14r297,70Q 14,333 ,400
3 Amusiement Parks 411 ,400 11,400 411 ,400
4 Auto Dealers & Servi,ce Stat io n 196,600 196,600 196,600 5 Chu r,ch,es 93,.SOO 93,800 93,800
6 Oom/ lnd/ M isc 7,7,80,000 7,780 ,000 7,7,80,000
7 Elect r k & Electron k 6q u i p. 2,48 1,400 2, 8 1,400 2,481,400 8 Fiood and Kind red Pro ducts 19 1,500 19 1,500 19 1,500 9 Hospita ls & Convalescent Hom es 608,300 60 8,300 60 8,300 10 Industri al Chem i,cal 104,600 104,600 10 ,600
11 Laund r ies 1 9,0 00 1¢9,000 149,0 00
12 M achinery M anu fa ctu rers 3 27,50 0 3 27,500 3 27,500 13 Meta l Pl ati ng 3 2,70 0 32,700 3 2,700
14 Motels & Hote ls 70 6;900 70 6r9 0Q 70 6,9 00
15 Pape r 1 20 0 1r2QQ 1,200
16 Repai r Shops &. Car W ashes 77,,800 77,800 77,800
17 Restau rants 9 78,,800 97.S,800 978,800
18 Schoo ls &. Co lleges 310,400 310,400 310,400
19 M ajor Users - Cust omer 1 0 0 0
20 Tot al $ 40r95 4,30 0 $ 41,020,500 $ 41,0 8'6;900
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Revenue and Revenue Requirements 5-6

Table 5-6 O&M Expenses

As shown in Table 5-6, the Sewer Utility’s O&M expenses increase from $30.1M in FY 2025 to $32.3M in FY 2027.

5.5 D ebt Service Requirements
Table 5-7 represents the Sewer Utility’s existing and proposed debt service obligations. This table shows the combined principal and interest requirements on the existing debt over the Study period. It is common practice for utilities to debt finance large capital improvement projects, such as in the case of Trimble Road sewer trunk line replacement in Santa Clara. By financing the cost of the projects, the City can fund large projects immediately and spread the payment over a specified time frame, thereby helping to offset the impact on ratepayers.

Table 5-7 Long-Term Debt Service

5.6 C apital Improvement Program
The Sewer Utility annually develops a five-year Capital Improvement Plan to identify sewer system needs, including ongoing assessments, maintenance, and renewal and replacement requirements.

Table 5-8 summarizes the Sewer Utility’s CIP for FY 2025 through FY 2027. The Sewer Utility is projecting $41.6M in CIP over the Study period, including capital and replacement projects. The City has posted the CIP Budget on its website for complete details associated with each CIP project.

(.$) ($) (.$)
1 Salaries 3,1 29,600 3,29 2,700 3, 6 7,300
2 Benefits 1,79 0,500 1,876,100 1,.S81,500
3 M at eri a lsf Servk e.sf Suppl ie.s 60 3,700 6,15,700 627,900 4 I nt erfu n d Servi,ce.s 3,525;965 3,817,140 4,0 1 7,030 5 R,e.sou r,ce & Pro du ct io n 21,0 24,700 21,655 ,500 22,3 0 5,000 6 Ca pit a I Out lay 0 0 0
7 Tot al $ 30,07 ,665 $3 1,2 57,140 $ .32,298,730
($) ($ ) ($)
1 Existi ng Short and Lo ng-T,erm Loa n 3,298,500 3,296,,800 3,298,300 2 Pro pos,ed Short-T,erm and Rev Bonds 0 0 9 72,300
3 Tot al $ 3,298,500 $ 3,296,800 $ 4,270,600
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Revenue and Revenue Requirements 5-7

Table 5-8 Capital Improvement Projects

5.6.1 Capital Improvement Financing Plan
The City funds annual expenditures for the CIP from a combination of available funds on hand, outlet charges, conveyance fees, debt financing, connection charges, developer contributions, and revenues derived from user rates. As shown in Table 5-9, the average annual CIP expenditure is $13.9M for the Sewer Utility. The planned average annual CIP contribution from the Sewer Utility Operating Fund is $17.4M per year over the Study period.

Table 5-9 Construction Fund Financing Plan

5.7 T ransfers
The Sewer Utility will perform transfers over the Study period from the Operating Fund and other funds.

The other funds consist of the Rate Stabilization Fund, Pension Stabilization Fund, and Construction Fund. See Section 5.8 for further explanation on Rate Stabilization and Pension Stabilization Funds. The (.$) 1$) (.$)
1 1908 SJ-SC Regio nal W astewat er Facili ty 9,290 ,500 13,9 18,400 5,.295,.500 1909 Sanit ary Sewer Capac ity
2 I mpr,ovem ents 0 0 0
19 11 Sanit ary Sewer System Oon d itiion
3 As,sess ment 1,035,200 1,073 ,800 ,11 2,700
191 2 Sanit ary Sewer System Improvem ents 3,21 2,400 1,18 1,200 2,.225,500 19 19 Sanit ary Sewer Hydraul k Mode li ng As
5 Needed Su p,p ort 1 27,600 322 ,100 137 ,.000
5 Tot al $ 1 ,1,8.3,20 0 $ 17,0 52,900 $ 10, 355 ,200
S011.1 roe of Fiu Iii.dis
1 Sanit ary Out let Ch a rge 0 0 0
2 Sewer Oonv,eya n c,e fiee 0 0 0
3 Intra Transfer In - Debt Financing 0 0 18,000,000
4 Intra Transfer In - Custom er Servi,ce Charge 1 5,250,000 1 5,000,000 20,000 ,000 5 Rcefun d from San Jose/ Cupertino 0 0 0
5 Tot al Sour,ces $ 1 6,250,000 $ 1 5,000,000 $ 38,000,000 U~e of Fiu Iii.dis
7 lmpr,oveme nts Projects 1 4, t.s3 ,.200 1 7,0 52,900 10,365,200 8 Tot al Uses $ 14,1.S3,.200 $ 1 7,0 52,900 $ 10,36,5,200 9 Net Annu al Cash 6al ance 2,066,800 (1,0 52,900 ) 27,634,800 10 6egi nn ing Unrestri,cted Fund 6al ance 8,1'90,,827 10,257,527 9,.204,727 11 Net Cumulat ive Fund Bal ance $ 10,.257 ,.627 $ 9,204,727 $ 36,839,527 12 M i nimum Oonstru ctiion Res,erves $ 10,093 ,700 $ 7,21 6,,950 $ 23 ,6,7 5,000 City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Revenue and Revenue Requirements 5-8

Construction Fund transfers represent money to cover planned CIP project expenditures. All these transfers do not represent direct operating expenses for the enterprise. Therefore Black & Veatch includes these costs as “below-the-line” cash flow items and not included as O&M expenses. Table 5-10, Lines 19 to 23 for the Sewer Utility reflect these associated amounts.

5.8 R eserves
A utility typically establishes reserves for several reasons, such as covering shortfalls in operating revenues, maintaining strong bond ratings, covering day-to-day operating costs, and easing the burden on ratepayers associated with large rate increases. Per the reserve policy, the Sewer Utility will maintain the following four reserves:
 Operating Reserve represents working capital maintained by the Operating Fund to cover day -to- day expenses and maintain enough funds to cover accounts receivables if there are supplier issues, periods of lower-than-expected sewer revenues, or unforeseen cost increases. The reserve will maintain a minimum balance of 90 days of operating expenses once fully funded.  Infrastructure Reserve represents funds used for unforeseen and unbudgeted capital costs. Once fully funded, this reserve will maintain a minimum balance of 12-months of the following year’s planned City CIP and 6-months of the following year’s planned RWF CIP.  Rate Stabilization Reserve represents funds used to absorb revenue shortfalls due to short -term decreases in sewer sales. This reserve is designed to stabilize sewer rate revenue and avoid wide swings in rates charged to customers over time. The reserve will maintain a minimum balance of 10% of sewer rate revenue when fully funded.  Pension Stabilization Reserve represents funds used to pay for the unfunded pension liabilities and the increase in the City’s share of pension costs due to factors such as higher CalPE RS rates and negotiated pay increases. The reserve target is $1.2M for the Sewer Utility by FY 2030.

Appropriate reserve levels help the Sewer Utility maintain liquidity and demonstrate to the rating agencies that the City’s financial policies and practices are focused on maintaining a balanced financial position.

5.9 P rojected Operating Results
The revenue requirements of the Sewer Utility consist of O&M expenses, debt service, capital expenditures, and reserve requirements.

It is important to examine the cash flow projections under the status quo scenario to fully understand the current condition of the Sewer Utility and the need for revenue adjustments. As shown in Figure 5-1, the status quo conditions would project that the Sewer Utility would operate from an annual deficit position, thus tapping into its reserves. In this scenario, the Sewer Utility would not impose any revenue increases over the Study Period and continue to incur O&M expenses, pay for the execution of the planned CIP, and transfer to reserves.

City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Revenue and Revenue Requirements 5-9

Figure 5-1 Status Quo Operating Cash Flow

The Sewer Utility will fall into a deficit position if the City does not implement the revenue increases, as shown in Figure 5-1. The revenue increases represent the overall total revenue adjustment needed to meet revenue requirements. The revenue adjustment does not represent adjustments to the individual rates but reflects the overall level of revenue needed to meet the Sewer Utility’s obligations.

The suggested revenue increases help the Sewer Utility meet the following goals:
 Meet budgeted operating obligations in the three FYs.  Meet planned capital investments in the three FYs.
 Maintain an operating reserve of 90 days of operating expenses.  Maintain construction reserve of 12-months of next year’s CIP for City projects and 6-months of next year’s CIP for the RWF.
 Continue to fund the rate stabilization reserve to reach its goal of 10% of rate revenues.  Continue transfers for the pension stabilization reserve to meet the FY 2030 goal.

Shown in Table 5-10 is a summary of the proposed Operating Fund for the Study Period. The Operating Fund consists of 1) Revenue and 2) Revenue Requirements.

Revenue
 Line 1 is the revenue under existing rates.
 Lines 2 through 4 are the additional revenue generated from the required annual revenue increases. The additional revenue generated is a direct reflection of the number of months the increase is effective for, and therefore amount might calculate at less than that stated amount.  Line 6 is the total revenue generated from user charges.  Line 12 represents other operating revenues.
 Line 13 represents total revenues for the enterprise.

$80,000,000
$60,000,000
$40,000,000
$20,000,000
so
-$20,000,000
-$40,000,000
- O&M
-a- Re.1enue
Sewer Utility - Operating Fund
- --
202.5 2027
- Debt Service - Capita l fl roj ects - Rat:eStab ililat: ion -a- Cash Balance -.. Target Cash Balance
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Revenue and Revenue Requirements 5-10

Revenue Requirements
 Line 15 represents O&M expenses. The O&M expenses include RWF costs.  Line 18 represents debt service payments.
 Line 24 represents transfers. The transfers include money to the Rate Stabilization Fund, Other Fund, Pension Fund, and Construction Fund.
 Line 25 represents total revenue requirements.

Line 28 represents the net cumulative cash balance within the Operating Funds. The net cumulative cash balance intends to match, to the extent possible, Line 29. The cash balance reserve is required to ensure the Operation Fund can continue in the event of a supplier interruption, market price fluctuations of critical equipment or supplies or an abrupt drop in account receivables. The reserve target minimum is 90 days of O&M expenses. Line 30 represents the debt service coverage. Currently, the City does not have debt coverage requirements for the short-term loans, but the operating cash flow is set up to achieve a debt service coverage of 1.25x requirement is met in all years. The requirement will come into effect when long-term debt is used to refinance the short-term loans. The lending financial institution sets the debt service coverage ratio via a rate covenant that will also obligate the City to increase revenues as needed to meet the minimum debt service coverage requirement.

(Section left intentionally blank)

City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Revenue and Revenue Requirements 5-11

Table 5-10 Operating Fund (Sewer)

Des-cri tion Rf 2025 Rf 2026 FY 2027
Revem.ue
Rate Revenue
1 Revenue fro m Exist i ng Rates 40,95 4,30 0 41,0 20,500 41,0 S6,,9 00 M ont hs
Ye,ar Effect iv,e Rate Adj
2 2 0 25 12 12.1 5% 4;975 ,90 0 4,984,0 00 4,992 ,100
3 202 6, 12 12.1 5% 5,58:9,500 5,.598,600
20 27 12 12.1 5% 6,278,800
5 lncre.as,e.d Revenue Due to Adj ustme nts. 4,975 ,90 0 10,573 ,500 16,S619•,50 0 6 Su b,t ota I Rate Revenue $ 45;930,200 $ 51,594,0 00 $ 57,956,400 Other Ope rating Revenue
7 Syste m Administrat io n !Int erest Income) 636,70 0 6 8,500 660 ,600 8 System Ma int enance 20,0 00 20,000 20,0 00
9 Oper atio ns 1,750,0 00 375 ,000 375 ,0 00
10 SJ SC W ate r Paoll utiion Oontro l Pl.ant 0 0 0
11 Storm Pump M ai ntenance 0 0 0
12 Su b,t ota I Other Ope r at i ng Revenue $ 2,406,700 $ 1,043,500 $ 1,0 55,600 13 Tota11 Reve1u1e $ 48,33 6,:900 $, .52J63,7,500 $ 5·9,[email protected])(}(])0 Revem.ue Req Ill iirem ent:s
Ope rat ing & Ma intenance
1 O&M Expenses 31,605 ,200 32,8 18,20 0 33,891,000
15 Su b,t ota I O & M $ 3 1,605 ,20 0 $ 32,818,20 0 $ 33,891,000 Debit Servi,ce
16 Exist ing Loa ns/ Bonds 3,298,500 3,296,800 3,298,30 0 17 Pro pose d Loa ns/ Bonds 0 0 972 ,30 0
18 Tota I Debit Servk e $ 3,.298,5 0 0 $ 3,296,800 $ 4,270,60 0 Transfers
19 Trans er t o Other Fund 50,300 50,300 50,30 0
20 Transfer t o Sett lement Re.serve 3,0 00,0 00 0 0
21 Transfer t o Rate Sta bili zat io n Fun d 2,0 00,0 00 50 0,000 50 0,000 22 Transfer to Pens io n Sta bili zat io n Fun d 78,200 78,200 78,20 0 23 Transfer to Sew-er Oonstruct io n Fun d 1 6,250,0 00 1 6,000,000 20,0 00,0 00 24 Tota l Transfers $ 21,378,5 0 0 $ 1 6,628,500 $ 20,628,50 0 25 Tota 'II Reverme Req11'ir,emelillt:s $ 56,.2.82,.20(]) $, 5.2,. 743,.500 $ 5:8,790, 1'@(]) 26 Net Annu al Cas h Bal ance P ;945,300J (106,,0 00) 22 1,9 00 27 Beginn ing Fun d Bal ance 1 6,233 ,478 8,288,1 78 8,182,178 28 Net Cumul at ive Fund Bal ance $ 8,2.S8,178 $ 8,182,1 78 $ 8,404,0 78 29 M i nimum Ope rat ing Reserv,e.s (90 Days] .$ 7,793 ,100 $ 8,092 200 $ 8,356,70 0 30 Debit Servi,ce Ooverage IM i n 1.2 5) 5.0 7 6.0 1 5,88 City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Revenue and Revenue Requirements 5-12

Figure 5-2 presents the proposed Operating Fund.

Figure 5-2 Sewer Operating Cash Flow

$70,000,000
$60,000,000
$50,000,000
$40,000,000
$30,000,000
$20,000,000
$10,000,000
$0
- O&M
~ Revenue
Sewer Utility- Operating Fund
2025
- Debt Service
~ Cash Balance
2026
- Capital Projects
~ Target Cash Balance
2027
- Rate Stabilization
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Cost of Service Analysis 6-1

6.0 Cost of Service Analysis
The cost-of-service analysis requires that the utility recover needed revenues from rates for sewer service, which are allocated to customer classes according to the service rendered. An equitable rate structure allocates the capture of revenue requirements to customer classes based on contributed sewage volume, strengths, number of customer connections, and other relevant factors.

In analyzing the Sewer Utility’s cost of service for allocation to its customer classes, Black & Veatch selected the annual revenue requirements for FY 2025 as the Test Year requirements to demonstrate the development of cost-of-service sewer rates. Table 6-1 summarizes the total costs of service that need to be recovered from sewer user rates. The table represents TY 2025.

Table 6-1 Cost of Service Revenue from Rates

To derive the net revenue requirement recovered through rates, it is necessary to deduct revenues from other sources as shown in Line 10 which corresponds with Table 5-11, Line 12. Shown in Line 4 is the total revenue requirement that corresponds with Table 5-11, Line 25. Line 11 represents the net annual cash balance during the TY. If the enterprise is drawing down funds already in the Operating Fund, this number is positive. The number will be negative if the enterprise is replacing funds. In the case of the Sewer Utility, the $7.9M figure indicates that the forecast is projecting a negative cash balance for the year.

6.1 F unctional Cost Components
The first step in conducting a cost-of-service analysis involves analyzing the cost of providing sewer service by system function to properly allocate the costs to the various customer classes and, subsequently, design rates. As a basis for allocating costs of service among customer classes, costs are separated into the following four basic functional cost components: (1) Base; (2) Strength; (3) Customer; and (4) Direct Assignment, described as follows:
1 2
3 5
6 7
,8
9 10
11 12
Descrip,tion
R,even ue R,eq u i rem ent s.

O&M Expense
Debt Servioe Requirement s.

Transfers
Sub,t ota l
Operating
Expense
31,605 ,20 0
0 5,12.8,500
$ 36',733 ,700
Less Revenue Requ irements Met from Ot her Sour,ces
System Administrat io n 636,700
System M aintenance 20,000
Op erat ions 1,750,000
SJ SC W ater Pioll ut io n Contro l Plant 0
Storm Pump M ai ntenance 0
Sub,t ota l $ 2,406,700
Adj ustments
Adj ust ment for Annu al Cas h Balance 7,9 45,300
Sub,t ota l $ 7,9 5,300
·• I ·•
!Sl
0 3,298,500
1 6,250,000
$ 19,548,500
0 0
0 0
0 $ 0
0 s 0
Total
Cost
31,605 ,200
3,298,500
2 ,37.8,500
$ 56,282 ,200
636,700
20,000
,750,000
0 0
s 2,406,700
7,945 ,300
s 7;9145,300
13 Oost of Servioe to be Recovered rom Rates .$ 26,381,700 $ 19,548,500 .$ 45,930,.200 City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Cost of Service Analysis 6-2

 Base costs represent operating and capital costs of the system associated with collection. The collection costs vary directly with the quantity of sewage flow.  Strength costs represent those operating and capital costs associated with treatment. The treatment costs are specifically related to strength parameters such as Biological Oxygen Demand, Total Suspended Solids, and Ammonia.
 Customer costs are those expenditures that tend to vary in proportion to the number of customers connected to the system. These include meter reading, billing, collecting, accounting, maintenance, and capital costs associated with meters and services.  Directly assigned costs are specifically identified as those incurred to serve specific customers.

The Sewer Utility has no directly assigned categories.

6.2 A llocation to Cost Components
The next step of the cost-of-service process involves allocating each cost element to functional cost components based on the parameter or parameters having the most significant influence on the magnitude of that element of cost. O&M expense items are allocated directly to appropriate cost components. A detailed allocation of related capital investment is used as a proxy for allocating capital and replacement costs. The separation of costs into functional components provides a means for distributing such costs to the various classes of customers based on their respective responsibilities for each type of service.

6.2.1 Volume and Strength Allocations
The sewer system consists of various facilities designed and operated to fulfill a given function. For the system to provide adequate service to its customers, it must be capable of meeting not only the annual volume requirements but also the strength loading demands placed on the system. Because not all customers and types of customers exert volume and strength loading demands similarly, the capacities of the various facilities must be designed to accommodate the demands of all classes of customers. Each sewer service facility within the system has an underlying volume demand exerted by all customers for whom the base cost component applies. For those facilities designed solely to meet volume demand, 100% of the costs go to the base cost component. For facilities designed to meet strength loading demands, the percentage of the costs is allocated to the different strength cost components based on their specific function.

6.2.2 Allocation of Operating and Maintenance Expenses
The Sewer Utility books operating costs by functional categories. Therefore, Black & Veatch used the factors noted in Section 5.1 to allocate the operating expenses to the cost components. In allocating O&M expenses for TY 2025, the costs are directly allocated to the cost components to the extent possible. The allocation of Administration and Transfer cost elements is based on the average of all other costs. Table 6-2 represents the allocation of O&M to the cost components. Revenues are subtracted from other sources as shown in Table 6-1, Lines 10, and any drawdown of the cash balance is deducted and normalized for partial rate adjustments as shown in Line 13 to determine the net O&M costs.

City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Cost of Service Analysis 6-3

Table 6-2 Allocation of O&M Expenditures

6.2.3 Allocation of Capital Investments
In allocating the capital investment for TY 2025, the existing fixed assets (which serve as a proxy for the current capital investments) are allocated directly to cost components to the extent possible. Plan capital costs can be allocated using the distribution of total net system investment across the functional cost components. The allocation of costs in this manner provides a basis for annual investment in sewer system facilities. Table 6-3 shows the total allocation of existing system investment serving sewer customers for the TY 2025. The total net system investment of $1.3M shown on Line 7 represents the Test Year original cost less accumulated depreciation of the system in service. The total net system investment reflects the Sewer Utility’s fixed asset listing ending June 30, 2023. This value represents the original cost (book value) of the assets.

Table 6-3 Allocation of Capital Costs

6.3 U nits of Service
To properly recognize the cost of service, each customer class receives its share of base, strength, and customer costs. Following the allocation of costs, the total cost responsibility for each customer class is developed using unit costs of service for each cost function and subsequently assigning those costs to the customer classes based on the respective service requirements of each. The number of units of service required by each customer class provides a means for the proportionate distribution of cos ts previously allocated to respective cost categories.

Table 6-4 summarizes the estimated Test Year units of service for the various customer classes. Base costs vary with the volume of sewage flow produced and distributed to customer classes on that basis.

Volume BOD TSS NH3 Cu,stom e r
(Sl (Sl (Sl (Sl (Sl (Sl
Operat ion & Ma intena nce
1 1511 Syste m Administr at ion 5,41 6,900 2,553 ,500 9 17,600 926,500 9 42,100 77,200 2 151 2 Syste m Ma int ena nce 2,201,200 2,201,200 0 0 0 0 3 1514 Operat ions 1,737 ,400 1,737 ,400 0 0 0 0
4 1515 SJ SC Wate r Pollut ion Contro l Pla nt
5 Trea tm ent 20,482,100 7,0 11,9 00 4,436,200 4,479,400 4,55 4,600 0 6 Cust ome r Billi ng & Mete r Rea ding 373 ,0 00 0 0 0 0 373 ,000 7 A ll other 1,206,700 1,206,700 0 0 0 0
8 1516 Storm Pump Ma intena nce 187,900 187,900 0 0 0 0 9 Tra nsfers 2,078,200 979 ,700 352 ,000 355 ,500 36 1,400 29, 600 10 Tot a l O&M Ex penses $ 33,683,400 $ 15,878,300 s 5,705 ,800 s 5,761,400 s 5,858,100 s 479,800 Less Ot he r Revenu e
11 Misce lla neous Reve nues 2,406,700 1,134,400 407 ,700 411 ,700 41 8,600 34,300 12 Ot her Adjustments 7,945,300 3,745,400 1,345,900 1,359,000 1,38 1,800 11 3,200 13 Net Operat ing Ex penses $ 23,3 31,400 $ 10,998,500 s 3,95 2,200 s 3,990,700 s 4,057 ,700 s 332 ,300 (Sl (Sl (Sl (Sl (Sl (Sl
Pla nt Assets
1 Collect ion 95 6,600 956,600 0 0 0 0
2 Lift Stat io n 27 5,800 275,800 0 0 0 0
3 Genera l Pla nt 101,100 101,100 0 0 0 0
4 Tota l Pla nt Assets s 1,3 33,500 s 1,3 33,500 s 0 s 0 s 0 s 0 Less Ot he r Revenue
5 Misce lla neous Reve nues 0 0 0 0 0 0
6 Ot her Adjustm e nts 0 0 0 0 0 0
7 Net Operat ing Ex penses s 1,333 ,500 s 1,333 ,500 s 0 s 0 s 0 s 0 City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Cost of Service Analysis 6-4

Black & Veatch derived sewage flow information from the monthly water consumption records in the City’s CIS multiplied by a return factor. Strength costs are those associated with pollutant characteristics, and the Study allocated these costs to customer classes based on loadings. The pollutant loadings for each customer class come from recommendations of the State Water Resources Control Board, Revenue Program Guidelines, Appendix G, and the City of San Jose. The City’s commercial and industrial class consists of 17 distinct types of businesses such as retail, offices, restaurants, and hospitals. Since sampling is not an immediate possibility, the City has relied on industry standards used by the State of California. The number of bills for each customer class serves as the basis for distributing customer billing requirements.

6.4 C ost of Service Allocations
Unit costs of service are applied to each customer class’s respective service requirements to determine the cost of service for each customer class. The total unit costs of service applied to the respective requirements for each customer class results in the total cost of service for each customer class.

6.4.1 Units Costs of Service
The TY 2025 unit cost of service for each functional cost component is simply the total cost divided by the applicable units of service, as shown in Table 6-5. The capital costs on Line 3 and 4 are associated with City projects and RWF projects. These costs have been separated to determine the collection and treatment costs independently. On Line 5, the total costs represent the cost that rates need to recover, as demonstrated in Table 6-1, Line 14. The net O&M cost includes O&M (including the RWF) less revenue from other sources and adjustments. The total capital cost includes debt service payments and transfers to the Construction Fund. Line 6 represents the unit costs for the entire sewer system regardless of customer classes. After that, these unit costs are applied in allocating the costs to the specific customer classes.

6.4.2 Distribution of Costs of Service to Customer Classes Applying the unit costs to the units for each customer class produces the customer class costs. This process is illustrated in Table 6-6, in which the study applies the unit costs to the customer class units of service. The costs attributable to each customer class are based on the functional cost components described in Section 6.1. Each customer class places a burden on the system in different ways, and thus the allocation of the units is representative of this burden.

An example of the application of unit costs is shown below for illustrative purposes.

Vol Component
Uni t Cost (Tabl e 6-5, Li ne 7) 5.36$ per HCF General Customer Consumption (Table 6-6, Line 5) 67,629 HCF Total Allocated Cost 362,500$
Please note that the numbers within the tables are rounded, yet the calculations are done based on non-rounded values; therefore, results might vary.

City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Cost of Service Analysis 6-1

Table 6-4 Units of Service

Line 1¥ffidiffili¥11¥ffiftiMit¥1 BOD Loadings TSS Loadings _ No. Description ___________ _ Unit.s Volume Fa.ctor Loading Fa.ctor Loading Fa.ctor Loading Units of Measure (EDUs/ M Bill s) ( HCF) ( mg/L) ( lbs) (mg/L) (lbs) (mg/L) (lbs) (bill s) 1 Single Family 260,659 1,361,85 1 250 2,124,100 250 2,124,100 35 297,400 247,20 3 2 M ulti-Family 318,461 1 ,61 8,39 0 250 2,524,200 250 2,52 4,200 35 353,400 27,543 3 Amusement Parks 11 5 67,629 1 30 54,80 0 80 33,800 11 4,600 27 1 4 Aut o Dealers & Servi ce St ati on 386 27,0 29 tao 30,400 280 47,200 11 1,90 0 719 5 Churches 268 14,99 1 1 30 1 2,200 80 7,500 11 1,000 590 6 Com/ Ind/ M isc 10,262 1,273 ,399 1 30 1,0 32,800 80 635 ,600 11 87,400 21,0 38 7 Electri c & Electroni c Equip_ 42 5 454,347 30 85,000 15 42,500 15 42,500 1,553 8 Food and Kindred Products 29 16,571 1,1 20 11 5,800 69 0 71,300 0 0 1 65 9 Hospit als & Convalescent Homes 316 90,459 230 129,800 85 48,000 15 8,500 787 10 Indu st ri al Chemi cal 43 14,71 8 360 33,100 720 66,100 0 0 111 11 Laund ries 1 38 24,2 47 1 50 22,700 110 1 6,600 5 800 353 1 2 M achinery M anufact urers 72 1 36,85 4 290 66,700 550 126,500 0 0 1,667 1 3 Met al Pl at ing 93 6,441 10 400 60 2,400 1 0 19 4
14 M otels & Hotels 53 10 1,779 310 196,800 1 21 76,800 7 4,400 514 1 5 Paper 12 45 1,250 400 560 200 10 0 14
1 6 Repair Shops & Car W ashes 469 11,0 76 180 1 2,400 280 19,300 0 0 659 1 7 Rest aurants 264 72,265 1,250 563 ,600 560 252 ,500 10 4,500 2,0 50 1 8 Schools & Colleges 533 44,683 1 30 36,200 100 27,900 30 8,400 1,0 81 19 M aj or Users - Cust ome r 1 0 0 0 0 0
20 Tot al 5,236,77 4 7,041,400 6,122,500 814,800 30 6,512 City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Cost of Service Analysis 6-1

Table 6-5 Units Cost of Service

Table 6-6 Distribution of Costs to Customer Classes

Line I . . I Total Common to All Customers
No. Description Cost
1 Net Operat ing Expense 26,381,700 14,048,800 3,95 2,200 3,990,700 4,0 57,700 332 ,300 2 Debt Service 3,298,500 1,129,200 714,400 72 1,400 733 ,500 0 3 Capit al Costs (City) 5,60 5,700 5,605,700 0 0 0 0
4 Ca pit a I Costs (SJSC) 10,644,300 7,28,8,200 1,6,82,800 1,205,600 467,700 0 5 Tot al Cost of Servi ce $ 45,930,200 $ 28,071 ,9 00 s 6,349,400 s 5,917,700 s 5,258,900 s 332 ,300 6 Units of Serv ice 5,236,77 4 7,041 ,400 6,1 22, 500 814,800 306,541 HCF lbs lbs lbs bill s
7 Cost per Unit s 5.36 s 0 .90 s 0 .. 97 s 6.4 5 s 1.0 8 per HCF per lbs per lbs per lbs per bill
Description Volum e BOD TSS NH3 Cu-stom er
1 Cost per Unit s 5.36 s 0 .90 s 0 .97 s 6.45 s 1.0 8
per HCF per lbs per lbs per lbs per bill
Single Family
2 Units 1,361,85 1 2,124,100 2,124,100 297,400 247,203
3 Allocat ion of costs of service 13,456,100 7,300,300 1,9 15,500 2,0 53,000 1,919,400 267,900 Mu lt i-Family
4 Units 1,618,390 2,524,200 2,524,200 353 ,400 27, 543
5 Allocat ion of costs of service 15,70 2,100 8,67 5,400 2,27 6,100 2,439,800 2,280,900 29, 900 Amusement Parks
6 Units 67 ,629 54,800 33,800 4,600 271
7 Allocat i on of costs of service 474,600 362 ,500 49,400 32,700 29, 700 300 Auto Dealers & Serv ice Stat ion
8 Units 27,02 9 30,400 47,200 1,900 719
9 Allocat i on of costs of service 23 1,000 144,9 00 27,400 45,600 1 2,300 800 Chu rches
10 Units 14,99 1 12,200 7,500 1,000 59 0
11 Alloc at i on of costs of service 105,700 80,400 11, 000 7,200 6,500 600 Com/Ind/ M isc
12 Units 1,273 ,399 1,0 32,800 635 ,600 87,400 21,03 8
13 Allocat i on of costs of service 8,958,600 6,826 ,100 9 31,300 614,300 56 4,100 22, 800 Elect ric & Elect ronic Equ i p.
14 Units 454,347 85,000 42,500 42,500 1,553
15 All ocat i on of costs of service 2,829,200 2,435,500 76,600 41,100 27 4,300 1,700 Food and Ki nd red Produ cts
16 Units 16,571 11 5,800 71,300 0 165
17 All ocat i on of costs of service 262,300 88,800 10 4,400 68,900 0 200 Hospit als & Convalescent Homes
18 Units 9 0,459 1 29,800 48,000 8,500 787
19 All ocat ion of costs of service 704,100 484 ,9 00 11 7,000 46,400 54,900 900 City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Cost of Service Analysis 6-2

Table 6-6 Distribution of Costs to Customer Classes (Con’t)

Line I I Total ~
____1110._J____ De~iptio ~ ost __ ~
1 Cost per Unit s 5.36 s 0 .90 s 0 .9 7 s 6 .4 5 s 1.08 per HCF per IDs per IDs per IDs per Dill
Indu st rial Chemi cal
20 Units 14,71 8 33,100 66,100 0 111
21 Allocat i on of costs of service 172,700 78,9 00 29,800 63,900 0 100 Laund ries
22 Units 24,247 22 ,700 1 6,600 800 35 3
23 Allocat ion of costs of service 172,100 130,000 20,500 1 6,000 5,200 400 M achi nery M anufa ct urers
24 Units 36,85 4 66,700 1 26,500 0 1,667
25 Allocat ion of costs of service 381,800 197,600 60,100 1 22,300 0 1,800 M et al Plat ing
26 Units 6,441 400 2,400 0 194
27 Allocat i on of costs of service 37,400 34,500 400 2,300 0 200 Motels & Hotels
28 Units 101,77 9 196,800 76,800 4,400 514
29 Alloc at ion of costs of service 826,300 545,600 1 77 ,500 74,200 28,400 600 Rep.ai r Shops & Car W ashes
30 Units 11,07 6 1 2,400 19,300 0 659
31 Allocat i on of costs of service 90,000 59,400 11,200 1 8,700 0 700 Rest aurants
32 Units 72,265 56 3,600 252,500 4,500 2,0 50
33 Allocat i on of costs of service 1,170,900 387,400 50 8,200 244,100 29,000 2,200 Schools & Colleges
34 Units 44,683 36,200 27,900 8,400 1,0 8 1
35 All ocat i on of costs of service 354,500 23 9,500 32,600 27,000 54,200 1,200 36 TOTAL COSTS OF SERVICE $ 45,930,200 $ 28,0 71,9 00 $ 6,3 49,400 $ 5,91 7,700 $ 5,258,900 $ 332 ,300 City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Rate Design 7-1

7.0 Rate Design
The initial consideration in the derivation of rate schedules for sewer service is establishing equitable charges to the customers commensurate with the cost of providing that service. While the cost -of-service allocations to customer classes should not be construed as literal or exact determinations, they offer a guide to the necessity for, and the extent of, rate adjustments. Practical considerations sometimes modify rate adjustments by considering additional factors such as the extent of bill impacts, existing contracts, and historical local policies and practices.

7.1 E xisting Rates
The Sewer Utility’s existing rates consist of a fixed component in the form of a monthly service charge and a variable component in the form of a consumption charge. The monthly service charge is a flat fee based on EDUs and is applied to residential customers. The monthly service charge also is a minimum for non-residential customers and applies when the consumption charge is less than the monthly service charge. Non-residential customers also have a consumption charge based on units of water consumption (1 unit = 1 HCF = 748 gallons) multiplied by a return factor. The City has separate charges for major users consisting of O&M and capital components. Table 5 5, presented earlier in this report, summarizes the current sewer rates.

7.2 P roposed Rates
The costs of service analysis described in the preceding sections of this report provide a basis for designing sewer rates.

7.2.1 Monthly Service Charge
The monthly service charge is designed to recover residential costs associated with contributed sewage flow, strength loadings, billing, collecting, accounting, and maintenance and capital costs. The charge is a flat monthly fee based on EDUs. An EDU is defined in Section 5.1. In FY 2023, the multi -family rate was separated from single-family and became a stand-alone customer class.

The monthly service charge also serves as the minimum monthly service charge for non- residential customers. The minimum service charge will recover non-residential costs associated with volume, strength, meter reading, billing, collecting, accounting, and maintenance and capital costs. The minimum monthly service charge incorporates an allowance for sewage flow. Once a customer exceeds the allowance, the minimum monthly service charge goes away.

Table 7-1 shows the forecasted proposed three-year monthly service charge rate schedule.

Table 7-1 Proposed Monthly Service Charge

Customer Class
Molilt:h iY Serwfoe Oha1rge ,[$/EiDUJ, $/ month $/ mont h $/ month 1 Single Fa mily 52.37 59.79 66.30
2 Mult i-Fa mily 49.3 1 56.0 9 62 a30
M i'1i1'im11m Comm erd a1ll 6ill 1Charge 1($/Mo lilthl· $/ month $/ mont h $/ month 3 All Cust omers 52.37 59.79 66.3 0
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Rate Design 7-2

7.2.2 Consumption Charge
The consumption charges are designed to recover the remainder of the cost component costs not recovered through the monthly service charge for non-residential customers. Table 7-2 shows the forecasted proposed three-year rate schedule for the Sewer Utility.

Table 7-2 Proposed Consumption Charges

7.2.3 Major Users
The major commercial and industrial user charge is designed to recover the costs associated with O&M and capital for major users. Major users are classified based on requirements in Section 5.1. These customers are monitored monthly for volume and strength loadings. Major users are charged the unit charges identified in Table 6-5, Line 7. Note that the major user charges are specifically identified O&M and capital components. Charges for all other customers incorporate these charges, but the City has combined them into a single rate for simplicity. Table 7-3 shows the three-year rate schedule based on unit costs in future years. The City does not have any major users left within the City; therefore, these rates will be for any future customer.

Commoo irty ,CJti:arge ,($/HCF} $/ HCF $/ HCF $/ HCF
1 Amusement Parks 5.93 7 _45, 8 _59
2 Auto Dealers & Servk e St at io n 7_,SQ ,8_70 9-8 1
3 Chu r,ches 5_12 5..54 7 _55
Oom/ 1 n d/ M isc 5 _51 7 _11 8 _19
5 Elect ri,c & Elect ro n i,c 6q u i p_ 5 _43 7 _59
5 Fiood and Kindred Pro du cts 18-89 20 _38
7 Hospit als & Convalesce nt Homes 7 _60 ,8_35 9 _50
8 Ind ust ri.a I Chem i,c a I 11- 58 13 ..53 1 -83
9 Laund ries 5,SO 7-32 8 . .43
10 Mac hinery Ma nufa cturers 9-33 10_73 11 ,8,8
11 Met al Plat i ng 5 _0 5 5_12 6 _1 2
12 Mot els & Hotels g _og, .S..96 10_14
13 Paper _4 5 _57 6,_6,7
14 Rcepa i r Sh ops &. Ca r W ashes 5 _90 6 . .47 7a37
15 Rcest a u rants 15_o1 19 . .27 20_75
15 Schools & Co lleges 7 _31 ,8_0 5 9 _1 5
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Rate Design 7-3

Table 7-3 Proposed Major User Charges

7.3 T ypical Monthly Costs under Proposed Charges
Table 7-4 compares typical monthly costs under existing rates and the proposed schedule of sewer user rates derived in this study for residential and non-residential customers.

Table 7-4 Typical Monthly Bill

Customer Class
Maj,or Comm e rda'I a ml ltnd 11,striia'II U.sers
Ope r at i ng and Ma intenance Oost Recovery
1 Vol ume ($ / MG)
2 BOD (.$/ 1,000 I hs)
3 ss (.$/ 1,000 lhs)
4 NH 3 (.$/ 1,000 lhs)
Annu al Cap it al Oost Rec,overy
5 V,ol ume (.$/ MGD)
6, BOD (.$/ 1,000 l hs/ d ay)
7 ss (.$/ 1,000 lhs/,day)
8 NH3 ($/ 1,000 lhs/ d ay)
I •
(HCF)
Rcesident i a I
N on-Resident i a I 0
10 20
30 40
50 100
250
3,67 1.11
561.28
651,81
,.980 .00
1,306,.599
1 24,26,2
114,8.80
538,093
FY 2024
Existing
Ra,tes.
(.$)
$ 8 .28
$48.28
$64 .0
$1 28.09
$192 .13
$2 56.18
$320 .22
$640 . 5
$1,60 1.1 2
4,020,89 4,192 .10

77.3,37 8-07. 5
898 .69 937 .67
6,&66.22 7,1 64 .09
1,.21 2,31 6 1,673 ,8.38
144,032 1 ,561
13 ,1 62 131 ,597
585,442 58'6,786
-($ )
$52.37
$ 52.37
$74.33
$148.65
$222 .98
$297.3 1
$371 .6,3
$743 .27
$ 1,8 58.17
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Rate Design 7-4

7.4 N eighboring Sewer Utilities
Presented in Figure 7-1 is the proposed rates compared to rates of neighboring jurisdictions, for a single- family residential customer. Based on the comparison, the City is currently a higher cost sewer provider in the area. With the proposed rate increases, the City remains one of the higher sewer providers of the surveyed communities. All surveyed community rates are best estimates as of April 2024.

Figure 7-1 Comparison to Neighboring Sewer Utilities

$250 .00
$200 .00
$150 .00
$100 .00
$50 .00
$0 .00
Wate r Rate 12 HCF
Sewer Rate
Combined
Sunn yvale
$86 .50
$67 .95
$1 54.45
Santa Clara SJWC
$106 .80 $125.44
$52.37 $49 .59
$159.17 $175.03
I I
Mounta in View San Jose (Mun i) Milp itas Palo Alto
$122.86 $132.25 $116 .72 $152.19
$54 .60 $49.59 $66 .79 $55 .93
$1 77.46 $181.84 $1 83.51 $208.12
* All rates are proposed for FY24-25
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Appendix A – Ten-Year Financial Plan 7-1

Appendix A – Ten-Year Financial Plan
City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Appendix A – Ten-Year Financial Plan 7-1

Water Utility

FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 FY 2034 ($) ($) ($) ($) ($) ($) ($) ($) ($) ($)
Revenue
Ra te Reve nu e
1 Reve nu e fr om Exist ing Rates 53,32 6,400 53,328,400 53,330,600 53,460,600 53,59 1,100 53,72 1,600 53,85 2,800 53,98 4,300 54,11 5,900 54,247,900 2 Increase d Reve nu e Due t o Adjust ments 8,158,.900 17,566,800 28,41 5,000 32,1 71,800 35,683,900 39,350,600 43,1 78,600 47,1 74,700 51,345,900 55,700,000 3 S ubtot a l Rat e Revenu e $ 61,485,300 $ 70,895 ,200 $ 81,745,600 $ 85,632,400 $ 89,.275,000 $ .93,072 ,.200 $ 97,0 31,400 $ 10 1,1 59,000 $ 105,461,800 $ 10 9,947,900 Othe r Ope rat ing Reve nu e
4 So lar System Maintenance 85,000 85,000 85,000 85,000 85,000 85,000 85,000 85,000 85,000 85,000 5 W ate r Syst em Ma inte na nce 1,102,500 1,10 2,500 1,102,500 1,102,500 1,102,500 1,102,500 1,102,500 1,102,500 1,102,500 1,102,500 6 W ate r Const ruct io n 0 0 0 0 0 0 0 0 0 0
7 W ate r Syst em Operat ions 0 0 0 0 0 0 0 0 0 0
8 A dm inist ration Des ign 1,396,200 1,403,200 1,410,300 1,41 7,600 1,4 25,000 1,432,600 1,440,300 1,448,200 1,4 56,200 1,464,400 .9 Wate r Qua lity 0 0 0 0 0 0 0 0 0 0
10 W ater Resources 0 0 0 0 0 0 0 0 0 0
11 Subt ot a l othe r Oper at ing Reve nu e $ 2, 58 3,700 $ 2,59 0,700 $ 2,59 7,800 $ 2,60 5,100 $ 2,61 2,500 $ 2,620,100 $ 2,627,800 $ 2,635,700 $ 2,643,700 $ 2,65 1,900 12 Total Revenue $ 64,069,000 $ 73,485,900 $ 84,343,400 $ 88,237 ,500 $ 91,887,500 $ 95,692,300 $ 99,659,200 $ 103,794,700 $ 108,105 ,500 $ 11.2,599 ,800 Revenue Requiremen t s.

Ope rat ing & Ma inte na nce
13 O &M Expenses 58,.973,100 63,51 5,100 68,539 ,900 74,474,200 80,77 0,600 87,518,300 92,310,800 97,40 7,700 101,676,200 10 6,147,500 14 Su bt ot a I o & M $ 58,9 73,100 $ 63,51 5,100 $ 68,539 ,900 $ 74,474,200 $ 80,77 0,600 $ 87,51 8,300 $ 92,310,800 $ 9 7,407,700 $ 101,676,.200 $ 10 6,147,500 De bt Service
15 Exist ing Loa ns/ Bond s 0 0 0 0 0 0 0 0 0 0
16 Propose d Loa ns/ Bond s 0 0 0 0 0 0 0 0 0 0
17 Tot a l De bt Se rvice $ $ $ $ $ $ $ $ $ $
Tra nsfe rs
1 8 Tra nsfe r t o Rate St a bili zat ion Fund 0 0 6,350,000 1,000,000 500,000 500,000 500,000 500,000 500,000 600,000

1.9 Tra nsfe r t o Pe ns iot n Sta bil izat io n Fund 199,400 199,400 199,400 1.99,400 199,400 199,400 199,400 199,400 199,400 199,400 20 Tra nsfe r t o W at er Construct ion Fund 4, 550,000 5,7 50,000 5,750,000 5,000,000 5,000,000 5,500,000 6,000,000 6,500,000 6,500,000 6,500,000 21 Tot a l Tra nsfe rs $ 4,749,400 $ 5,9 49,400 $ 1 2,299,400 $ 6,199,400 $ 5,699,400 $ 6,199,400 $ 6,699 ,400 $ 7,199,400 $ 7,199,400 s 7,299,400 22 Total Revenue Requi remen t s $ 63,722 ,500 $ 69,464,500 $ 80,839,300 $ 80,673,600 $ 86,470 ,000 $ 93,717,700 $ 99,010,200 $ 104,607 ,100 $ 108,875,600 $ 113,446,900 23 Net Annu a l Cas h Bala nce 346,500 4,021,400 3,50 4,100 7,563,.900 5,41 7,500 1,.974,600 649,000 (812,400) ( 770,100) ( 847,100) 24 Beginn ing Fund Ba la nce 9,89 1,600 9,959,200 1 3,70 1,700 16,9 26,900 24,211,900 29,3 50,500 31,0 46,200 31,41 6,300 30,32 5,000 29,276,000 25 Net Cumu lat ive Fund Bala nce $ 10,238,100 $ 13,980,600 $ 1 7,20 5,800 $ 24,490,800 $ 29,629,400 $ 31,3 25,100 $ 31,695 ,200 $ 30,603,900 $ 29,55 4,900 $ 28,42 8,.900 26 Minimum Operat ing Rese rves (90 Days ) $ 14, 541,300 $ 15,66 1,300 $ 1 6,.900,200 $ 18,363 ,500 $ 19,91 6,000 $ 21,579 ,900 $ 22, 761,600 $ 24,0 18,300 $ 25,0 70,800 $ 26,1 73,400 City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Appendix A – Ten-Year Financial Plan 7-2

Recycled Water Utility

FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 FY 2034 ($) ($) ($) ($) ($) ($) ($) ($) ($) ($)
Revenue
Rate Revenue
1 Revenue from Exist ing Rates 6,990,300 7,0 60,200 7,130,700 7,201,9 00 7,273 ,900 7,346,500 7,41 9,700 7,493,.9 00 7,568,700 7,644,200 2 Increased Revenue Due t o Adj ustm ents 1,0 48,500 2,27 6,900 3,71 4,100 5,421,700 7,420,400 9,497,900 10,44 3,100 11,44 9,500 1 2,520,300 13,253,900 3 Subt ot al Rat e Revenue $ 8,03 8,800 $ 9,337 ,100 $ 10,844,800 $ 1 2,623,600 $ 14,694,300 $ 16,8 44,400 $ 17,862,800 $ 18,943,400 $ 20,0 89,000 $ 20,898,100 Other Operat ing Revenue
4 System M aint enance 9 7,600 99,600 10 1,600 103,600 10 5,700 107,800 110,000 112,200 114,400 11 6,700 5 Sout h Bay W ater Recycl ing System M ainten, 72 8,400 760,200 78 2,800 81 2,600 84 6,800 87 3,900 9 01,800 9 30,600 960,300 99 1,100 6 Subt ot al Other Operat ing Revenue $ 826,000 $ 859,800 $ 88 4,400 $ 9 16,200 $ 95 2,500 $ 981,700 $ 1,0 11,800 $ 1,0 4 2,800 $ 1,07 4,700 $ 1,107,800 Transfers From
7 RW Capit al Fund 0 0 0 0 0 0 0 0 0 0
8 Subt ot al Transfers From $ $ $ $ $ $ $ $ $ $
9 Tot al Revenue $ 8,864 ,800 $ 10,196,900 $ 11,729 ,200 $ 13,539,800 $ 15,646,800 $17,826 ,100 $ 18,874,600 $ 19,986 ,200 $ 21,163 ,700 $ 22,005 ,900 Revenue Requiremen t s.

Operat ing & M aintenance
10 O& M Expenses 9,164,9 00 10,344,900 11,66 4,100 13,167,600 14,877 ,700 16,748,500 18,0 41,300 19,43 5,500 20,58 2,.900 21,798,400 11 Su bt ot a I o & M 9,164,9 00 10,344,900 11,66 4,100 13,167,600 14,877 ,700 16,748,500 18,0 41,300 19,43 5,500 20,58 2,900 21,798,400 Debt Service
12 Exist ing Loa ns/ Bonds 0 0 0 0 0 0 0 0 0 0
13 Proposed Loans/ Bonds 0 0 0 0 0 0 0 0 0 0
14 Tot al Debt Serv ice 0 0 0 0 0 0 0 0 0 0
Transfers
15 Transfer t o Rat e St abili zat ion Fund 0 0 0 0 0 0 0 0 0 0 16 Transfer t o Pensiot n St abili zat ion Fund 0 9,800 9,800 9,800 9,800 9,800 9,800 9,800 9,800 9,800 17 Transfer t o Recycl ed W ater Const Fun d 0 0 0 100,000 200,000 200,000 200,000 200,000 200,000 200,000 18 Tot al Transfers 0 9,800 9,800 10 9,800 209,800 209,800 209,800 209,800 209,800 209 ,800 19 Tota.I Revenue Requi remen t s $ 9,164 ,900 $ 10,354,700 $ 11,67 3,.900 $ 13,277 ,400 $ 15,087,500 $ 16,958,300 $ 18,251,100 $ 19,645,300 $ 20,792 ,700 $ 22,008,200 20 Net Annu al Cash Bal ance (300,100) ( 157,800) 55,300 262,400 559,300 867 ,800 623,500 340,9 00 371,000 (2,300) 21 Beginn ing Fund Balance 3,295,300 2,995,200 2,837 ,400 2,89 2,700 3,155,100 3,71 4,400 4,58 2,200 5,20 5,700 5,546,600 5,917,600 22 Net Cumulat ive Fund Bal ance s 2,995 ,200 s 2,837,400 s 2,89 2,700 s 3,155,100 s 3,71 4,400 s 4,58 2,200 s 5,205,700 s 5,546,600 s 5,9 17,600 s 5,915,300 23 M inimum Oper at ing Reserves (90 Days) s 2,2 59,800 $ 2,550,800 $ 2,876,100 $ 3,246,800 $ 3,668,500 $ 4,129,800 $ 4,448,500 $ 4,79 2,300 $ 5,07 5,200 $ 5,37 4,900 City of Santa Clara, CA | Water and Sewer Rate Study
BLACK & VEATCH | Appendix A – Ten-Year Financial Plan 7-3

Sewer Utility

-
Revenue
Rate Revenue
Descri t,on
1 Revenu e fr om Exist ing Rates
2 Increase d Revenue Due t o Adj ustm ents
3 S ubt ot al Rate Revenue
Oth er Operat ing Revenue
4 System Admi nistrat i on (Interest Income)
5 System M aintenance
6 O per at i ons
7 S J SC W at er Poll uti on Contr ol Pl ant
8 S t orm Pump M aintenance
9 Subtota l Oth er Operating Revenu e
10 Total Revenue
Revenue Requirements
Oper at ing & M aint enance
11 O& M Expenses
1 2 Subt ot al O& M
Debt Servi ce
13 Existing Loans/ Bond s
14 Pr oposed Loans/ Bond s
1 5 Tot al Debt Servi ce
Transfers
16 Tr ansfer t o Rat e St abili zat i on Fund
17 Transfer t o Pensi on St abili zat ion Fund
18 Transfer t o Sewer Construct i on Fund
19 Tot al Transfers
20 Tota l Revenue Requi r ement.,
21 Net Annu al Cash Balance
22 Beginn ing Fund Balance
23 Net Cumu lat ive Fund Ba lance
24 M inimum Operat ing Reserves (90 Days)
2 5 Debt Servi ce Cover age (M in 1.25 )
FY 2025
40,95 4,300
4,975 ,900
$ 45,9 30,200
636 ,700
20,000
1,75 0,000
0 0
s 2,406,700
$ 48,336,900
31,60 5,200
$ 31,60 5,200
3,298,500
0 s 3,298,500
2,000,000
78,2 00
16,2 50,000
$ 18,32 8,200
$ 53,231,900
(4,895 ,000)
16,233,478
S 11,338,4 78
7,793 ,100

5.0 7
FY 2026 FY 2027 FY 2028
41,0 20, 500 41,0 86,900 41,189,500
10,573 ,500 16,869 ,500 19,23 5,600
$ 51,59 4,000 $ 57,956,400 $ 60 ,42 5,100
648,500 660,600 672,900
20,000 20,000 20,000
375 ,000 3 75,000 375 ,000
0 0 0
0 0 0
s 1,0 43, 500 s 1,0 55,600 s 1,0 67 ,9 00
$ 52,637 ,500 $ 59,012,000 $ 61,493,000
3 2,818,200 33,89 1,000 35,043 ,100
$ 3 2,818,200 $ 33,89 1,000 $ 35,0 43,100
3,296,800 3,298,300 3,297 ,800
0 972 ,300 1,35 1,800
s 3,296,800 s 4,2 70,600 s 4,649,600
500,000 500,000 500,000
78,200 78,200 78,200
16,000,000 20,000,000 20,000,000
$ 16,578,200 $ 20,578,200 $ 20,578 ,200
$ 52,693 ,200 $ 58,739,800 $ 60,270,900
(55,700) 272 ,200 1,222 ,100
8,288,178 8,182,178 8,404,0 78
s 8,232,478 s 8,4 54,378 s 9,626,178
8,0 92,200 8,356,700 8,640,800
6 .0 1 5.88 5.69
I
FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 FY 2034
41,292,500 41,395 ,900 41,499,100 41,60 2,800 41,70 6,700 41,810,9 00 19,283,700 19,33 2,000 19,380,200 19,4 28,700 19,477,200 19,525 ,800 $ 60,576,200 $ 60,727 ,900 $ 60,879,3 00 $ 61,0 31,500 $ 61,183,900 $ 61,336,700 685 ,400 698,200 711,200 72 4,500 738,100 75 1,9 00
20,000 20,000 20,000 20,000 20,000 20,000
375 ,000 37 5,000 375 ,000 375 ,000 37 5,000 375 ,000
0 0 0 0 0 0
0 0 0 0 0 0
s 1,0 80,400 s 1,09 3,200 s 1,106,200 s 1,119,500 s 1,13 3,100 s 1,146,9 00 $ 61,656,600 $ 61,821,100 $ 61,985,500 $ 62,151,000 $ 62,317,000 $ 62,483,600 36,23 1,500 37,493,700 38,800,800 40,155,300 41,558,500 4 3,0 1 2,400 $ 3 6,231,500 $ 37,493,700 $ 38,800,800 $ 40,155,300 $ 41,558,500 $ 4 3,012 ,400 3,300,300 3,3 00,500 3,298, 500 2,361,800 2,360,100 2,360,800 1,35 1,800 1,351,800 1,35 1,800 1,35 1,800 1,35 1,800 1,35 1,800 s 4,65 2,100 s 4,652 ,300 s 4,650,3 00 s 3,71 3,600 s 3,711,900 s 3,71 2,600 250,000 0 0 0 0 0
78,200 7 8,200 78,200 78,200 78,200 78,200
20,000,000 1 2, 500,000 10,000,000 10 ,000,000 10,000,000 10,000,000 S 20,328,200 $ 1 2, 578,200 $ 10,0 78,200 $ 10,0 78,200 $ 10,0 78,200 $ 10,0 78,200 $ 61,211,800 $ 54,724,200 $ 53,529,300 $ 53,947,100 $ 55,348,600 $ 56,803,200 444,800 7,09 6,900 8,456,200 8,203,900 6,968,400 5,680,400 9,575 ,878 9,97 0,378 17,0 16,978 25,4 22,878 33,576,478 40,49 4, 578 S 10,020,678 S 17,0 67,278 S 25,473,178 S 33,626,778 S 40,544,878 S 4 6,174,9 78 8,.933 ,800 9,245 ,000 9,567 ,300 9,9 01,300 10,24 7,300 10,60 5,800 5 .47 5.23 4.99 5.9 2 5.59 5.24
City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
24-578 Agenda Date: 5/28/2024

REPORT TO CITY COUNCIL AND STADIUM AUTHORITY BOARD

SUBJECT
Action on Amendment No. 2 to the Ground Lease, and Amendment No. 1 to the Restated and Amended Stadium Lease, to Implement the Settlement Agreement and Mutual Release (Buffet and Public Safety Cost Arbitration) with Forty Niners SC Stadium Company LLC and Forty Niners Stadium Management Company LLC, and Approve Related Budget Amendments

COUNCIL AND BOARD PILLAR
Ensure Compliance with Measure J and Manage Levi’s Stadium

EXECUTIVE SUMMARY
After many months of negotiations, at the recent May 20, 2024 Closed Session, the Santa Clara Stadium Authority Board and City Council accepted terms for settlement of longstanding disputes with the 49ers over Stadium Authority obligations to reimburse the 49ers for “buffet costs” for certain NFL game ticket holders, and to reimburse “public safety costs” paid by the 49ers to the City above a contractual public safety costs “threshold”. Council/Board action included direction to the Authority Executive Director/City Manager to finalize and execute a Settlement Agreement consistent with those terms in a final form approved by the Authority Counsel/City Attorney. That agreement was finalized and executed by all parties on May 23rd. A copy of the agreement was provided to the public that same evening.

Tonight’s item presents for Authority Board and City Council consideration two lease amendments that are necessary to implement a number of the key terms in the Settlement Agreement. The first lease amendment is to the Stadium Lease between the Stadium Authority and the 49ers entity known as “StadCo.” The second lease amendment is to the Ground Lease between the Stadium Authority and the City which owns the Stadium property. Authority Board/City Council approval is also sought for delegation to the Executive Director/City Manager to amend any other agreements required to implement the Settlement Agreement. Finally, approval is also requested for the necessary, related budget amendments.

In order to provide the public with an understanding of the context for these actions, this staff report first presents a brief history and summary of the terms for the development and operations of Levi’s Stadium. A brief history and summary of the public safety costs and buffet costs disputes is then provided, followed by a summary of the terms in the Settlement Agreement that resolve these disputes. Finally, the terms for the required lease amendments and budgetary actions are presented.

BACKGROUND
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24-578 Agenda Date: 5/28/2024
On June 8, 2010, Santa Clara voters approved Measure J which provided for the development and operation of a stadium suitable for professional football games and other events on City-owned property and called for the creation of the Santa Clara Stadium Authority (Stadium Authority), a joint powers authority. Measure J’s terms include, but are not limited to, the following pertinent terms:
· The City of Santa Clara (City) shall not use or pledge any money from the City’s general fund or enterprise funds for the development of the stadium. · The ground lease shall require payment by the Stadium Authority to the City’s general fund of fixed base rent totaling $40,875,000, in nominal dollars, over the initial forty (40) year term of the ground lease, with annual fixed base rent commencing in the first year of stadium operations and increasing periodically over the term of the ground lease to a minimum of $1,000,000 beginning in the eleventh (11th) year of stadium operations. · In addition to the fixed base rent, the ground lease shall require payment by the Stadium Authority into the City’s general fund of performance-based rent which, together with the fixed base rent, the City Council has determined is projected to provide fair market rent to the City.

Performance-based rent shall be pursuant to a formula that provides for sharing of the revenues less expenses of non-NFL events at the stadium. · Neither the City nor its Redevelopment Agency shall be liable for the obligations of the Stadium Authority, including operating and maintenance expenses of the stadium .
· The private tenant’s lease shall require the private tenant to pay rent to the Stadium Authority that will provide the Stadium Authority with funds to pay the ground rent and operating and maintenance expenses of the stadium.
· For the first season of NFL Games at the Stadium, Public Safety Costs attributable to NFL Games, including a charge for capital expenditures, will include a “Threshold” of $170,000 per game. The Threshold increases every year by 4%. Public Safety Costs attributable to NFL Games that exceed the Threshold will be reimbursed by Stadium Authority from its Discretionary Fund or through “Credits” which reduce Performance-Based Rent payments to the City.
· If Public Safety Costs attributable to NFL Games exceed the Threshold for 3 consecutive seasons, the Parties may engage in good faith negotiations with respect to a possible increase in the Threshold, however, 49ers will not be obligated to agree to any increase. · The ground lease shall require that following the opening of the stadium the City shall receive, in addition to the ground rent, a fee equal to thirty-five cents ($0.35) per ticket on each ticket for professional football games in the stadium up to a maximum of $250,000 per year (the “senior and youth program fee”). The senior and youth program fee is to be used for City programs for parks and recreation and libraries, such as senior activities and the youth championship team fund.

On March 28, 2012, the City and Stadium Authority entered into a Ground Lease that provides the Stadium Authority, as the Tenant, the exclusive right to use the Stadium Site (i.e., the ground under Levi’s Stadium) for the development and operation of the Stadium for the hosting of NFL games and other events, use and permit Forty Niners SC Stadium Company LLC (StadCo) to use the Stadium Site for the permitted uses outlined in the Stadium Lease Agreement for an initial term of forty (40) years. The Ground Lease requires the Stadium Authority to make Fixed Ground Rent and City of Santa Clara Printed on 5/24/2024Page 2 of 16
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24-578 Agenda Date: 5/28/2024
Performance Based Rent payments to the City, among other things. The City and Stadium Authority amended the Ground Lease on June 19, 2023, to modify certain definitions and terms.

On June 19, 2013, the Stadium Authority entered into a Reinstated and Amended Stadium Lease Agreement (Stadium Lease) with StadCo as the Tenant to use and occupy Levi’s Stadium for the operations of an NFL franchise for an initial term of forty (40) years. Per the terms of the Stadium Lease Agreement, StadCo leases the Stadium from the Stadium Authority for half of each fiscal year and is responsible for the Stadium Manager’s operating expenses during that period.

Through the Stadium Management Agreement (Management Agreement), the Stadium Authority and StadCo each engaged Forty Niners Stadium Management Company LLC to act as the Stadium Manager and to provide management services for the Stadium on its respective behalf in accordance with the Stadium Lease, including oversight of the day-to-day operations and maintenance of the Stadium. The Management Agreement also provides the Stadium Manager the responsibility of handling the marketing and booking of Non-NFL Events at the Stadium on behalf of the Stadium Authority.

In addition to the Management Agreement, the Stadium Authority and StadCo also entered into a Stadium Operations Agreement with the Stadium Manager which outlines Stadium operational terms including, but not limited to, procedures for scheduling Stadium events; the preparation and approval of the annual Stadium Operation and Maintenance Plan, Annual Shared Stadium Expense Budget, the Annual Stadium Capital Expenditure Plan and the Annual Statement of Stadium Operations; procurement guidelines; and rules and regulations regarding Stadium access by Suite licensees of their Suites and Premium Stadium Areas.

For reference, the table below shows the different stadium entities and roles:

There are many other Stadium Authority agreements that are connected to operations and financing of the Stadium that are not discussed above, but the agreements discussed above as well as some City of Santa Clara Printed on 5/24/2024Page 3 of 16
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City of Santa Clara
• Owns the land .

Santa Clara Stadium Authority
(Authority)
• Ground leases the land to Aut hority. • Ow ns t he Stadium . 49ers Football
Company (TeamCo)
• Owns and operates 49ers
Football team.
• Not a party to City or
Author ity contracts.
• Leases to StadCo for NFL Season (6 months) .
• Receives net reve nues from Non-NFL events.
49ers Stadium
Company (StadCo)
• Tenant of the Stadium for
NFL Season (6 months) .
• Lease w ith Authority.
• Sub-leases the Stadium to
TeamCo.
49ers Management
Company (Manco)
■ Management Agreement
w/StadCo and Author ity.
• Manages the Stadium,
year-round for both NFL
and non-NFL events.
24-578 Agenda Date: 5/28/2024
additional documents that are pertinent to day-to-day operations at the Stadium are available for reference on the Stadium Authority website at
<https://www.santaclaraca.gov/our-city/santa-clara-stadium-authority/leases-and-agreements>. 49ers and Stadium Authority Litigation Disputes
Disputes over the interpretation and implementation of a number of terms in the various Stadium agreements and the parties’ actions related to the management and operations of the Stadium occurred over a four-year period, 2014-2019. Issues under dispute included accounting transparency, procurement procedures, fiscal and operational management of non-NFL events, and public safety and buffet costs calculations and payments. These management and operations disputes led to a 2019 Superior Court lawsuit and also arbitration proceedings between StadCo, Stadium Manager and Stadium Authority. Separately, in June 2019, StadCo initiated the Public Safety Costs Arbitration, which was followed by the Buffet Costs Arbitration in September 2020. The City is not a party to the arbitration claims.

Since 2018, because of the pending disputes, Stadium Authority has not reimbursed StadCo any NFL Public Safety Costs. That resulted in Performance-Based Rent to the City during this time period also being put on hold until the disputes were resolved. Starting in Lease Year 2021/22, an estimated amount of what could be Performance-Based Rent to the City (that might also be needed to pay StadCo for Public Safety Credits depending upon the outcome of the pending disputes) was held by Authority as a Legal Contingency Reserve. Separately, because of the pending disputes, Authority also did not pay StadCo eight of ten years worth of claimed Buffet Costs. Starting in Lease Year 2021/22, Stadium Authority also held in its Legal Contingency Reserve the claimed amounts of Buffet Costs that would have been due to StadCo.

On August 31, 2022, the City, Stadium Authority, StadCo and Stadium Manager reached a settlement agreement that resolved the management and operational disputes claimed in the 2019 Superior Court lawsuit and arbitration claims. Notably, however, that settlement did not resolve the Public Safety Costs and Buffet Costs disputes and arbitrations. Instead, as part of the settlement, the parties agreed to “stay” (put on hold) the arbitration proceedings for the Public Safety Costs and Buffet costs disputes to give the parties the opportunity to resolve those claims. While resolution efforts were ongoing, the parties agreed that no interest would accrue on the parties’ claimed amounts or balances due.

Background of Public Safety Cost Dispute (NFL events)
The existing contracts between the parties require that the City provide public safety services for stadium events. StadCo, in turn, is obligated to reimburse the City in full for all such costs for NFL events. As provided in Paragraph 7.5.2(a) of the Stadium Lease, “StadCo is obligated to pay city actual and reasonable public safety costs.” Public safety costs include police, fire, traffic management, and parking support.

To the extent the public safety costs for NFL events exceed a contractually determined “Threshold,” StadCo is contractually entitled to be reimbursed the costs over such Threshold by the Stadium Authority, either through payments out of the Stadium Authority’s “Discretionary Fund” or through credits against StadCo’s future Facility Rent obligations. (Stadium Lease, Paragraph 7.5.3(a)) The Discretionary Fund is partially funded by non-NFL event ticket surcharges. (Stadium Lease, Paragraph 12.1.) Notably, any credits issued for public safety costs in excess of the public safety City of Santa Clara Printed on 5/24/2024Page 4 of 16
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24-578 Agenda Date: 5/28/2024
costs “Threshold” not only reduce StadCo’s payment of Facility Rent to Authority, they also reduce the amount of Stadium Authority’s Performance-Based Rent payments owed to the City by the Stadium Authority under the Ground Lease. (Stadium Lease, Paragraph 7.5.3 (a)) As noted above, these terms follow the terms of Measure J terms which establish a public safety cost Threshold and provide that costs that exceed the Threshold are to be paid from Stadium Authority funds.

Importantly, the Public Safety Costs dispute is only related to NFL events. For Stadium Authority’s non-NFL events, the City is reimbursed by the Stadium Authority for public safety costs and there is no applicable Threshold.

The Public Safety Costs “Threshold” described above (as initially set in Measure J and in Stadium Lease Section 7.5.3 (b)) was set at $170,000 per game for the Stadium’s first NFL season (2014-15).

Thereafter, it was set to increase at the rate of 4% per year. By the most recent (2023-24) football season, the Threshold had grown to $241,963 per game. The yearly threshold amount, which is calculated by multiplying the per game threshold by the total number of pre-season, regular season and post-season NFL games played at the Stadium during the lease year, is the aggregate number used to calculate the total threshold amount, and any public safety credits for that year.

On September 14, 2014, the 49ers hosted their first regular-season game at Levi’s Stadium. By the end of the first season, 2014-15, the public safety costs exceeded the $170,000 per game threshold by $75,514 per game.

Public safety costs in the subsequent eight seasons (seasons 2-9) also exceeded the threshold, with the exception of the seventh season, 2020-21, which was impacted by COVID (see chart below). In 2023-24 (season 10), public safety costs, estimated at $521,494 per game, are expected to exceed the $241,963 threshold by $279,531 per game (see diagram below). Under the terms of the agreements, this difference, from the very beginning and increasing over time, between the Public Safety Costs Threshold and the amount of actual public safety costs billed has had material adverse impacts on Stadium finances and the ability of the Stadium to generate Performance Based Rent for the City.

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24-578 Agenda Date: 5/28/2024
The Stadium Lease does provide for a process to adjust and increase the Threshold after any three consecutive years of public safety costs exceeding the threshold (Paragraph 7.5.4(b)). However, under the terms of the contract, after good faith negotiations, StadCo retains “sole discretion” as to whether or not to increase or not increase the Threshold. The appropriate interpretation, performance and enforcement of this provision has been at the center of the parties’ public safety costs dispute.

In 2017, Stadium Authority and City initiated the Threshold adjustment process under the Stadium Lease with StadCo requesting an increase in the Threshold starting in Year 4. Stadium Authority disputed StadCo’s negotiations and handling of this request for the Year 4 threshold adjustment which ultimately lead to the 2019 Arbitration filing by StadCo against the Authority. Stadium Authority and StadCo also had other disputes pertaining to the interpretation and obligations of related PSC Threshold terms in the Stadium Lease (such as off-site parking permit fees and Capital Expenditure depreciations).

Since 2019, StadCo has continued to fulfill its obligations to pay the City for public safety costs incurred by the City in providing security for NFL Games. However, in light of the pending disputes between the parties regarding the appropriate adjustment to the Public Safety Costs Threshold, over that same time period the Stadium Authority has not reimbursed StadCo for any such Public Safety Costs payments over that Threshold.

StadCo’s public safety costs claim against Stadium Authority for the period spanning years 4 through 10 (2017-18 through 2023-24) amounts to approximately $15.4M. This claim includes unresolved adjustments and fees that StadCo believes are owed under the terms of the agreements. Meanwhile, in light of the pending disputes over the correct amount of Public Safety Costs Threshold, and the related Performance Based Rent Credit amount that might need to go to StadCo, the City was not City of Santa Clara Printed on 5/24/2024Page 6 of 16
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$600,000
$500,000
$400,000
$300,000
$200,000
$100,000
$-
1st Season
(2014-15)
2nd Season
(2015-16)
Public Safety Costs - Threshold
$546,204
$517,186
$145,132
$215 104
3rd Season
(2016 -17)
4th Season
(2017 -18)
5th Season
(2018-19)
6th Season
(2019 -20 )
I
I
7th Season
(2020 -2 1)
- Total PSC Costs - Lease Threshold ( 4%)
8th Season
(2021-22 )
9th Season
(202 2-23)
lath Season
(2023 -24) EST
24-578 Agenda Date: 5/28/2024
paid any Performance-Based Rent for years 2021/22 through 2023/24. Essentially, any Performance- Based Rent that might have been earned by the City during this time period could be negated by the accruing Public Safety Costs credits, hence the need for the creation of the litigation reserve, described in more details below.

Background of Buffet Costs Dispute
The Stadium Authority sells Stadium Builders’ Licenses (SBLs) on all seats within the stadium. SBL holders are required to purchase season tickets for each season (i.e., all season ticket holders are also SBL holders). The cost of an SBL depends upon the location of the seat as well as the benefits associated with that seat. There are approximately 942 Legacy SBL holders, which are more expensive SBLs, that provide the SBL holders with a complimentary buffet on game days. The initial sale of the Legacy SBLs generated around $75M for Stadium Authority. Because that access was “purchased” by the patron through their SBL, the cost of the buffet is allocated to the Stadium Authority in the Stadium Lease.

The Stadium Lease (Paragraph 4.6.1) provides that Authority will reimburse StadCo for the costs associated with the complimentary buffets provided to these SBL holders within 30 days of invoice.

While SBL revenues are fixed, and resales and financing revenue decline over the lease term, the Stadium Lease does not contain provisions that cap, or provide Stadium Authority with any operational control over, buffet costs. Therefore, there is significant financial exposure to the Stadium Authority associated with the buffet costs. Projected buffet costs through the lease term, without a cap, can range from $70M to over $100M, with uncertain revenue sources to cover this expense.

For the first five years, StadCo did not invoice Authority for buffet costs and Stadium Manager did not include these costs in any Stadium Authority budget. 2019 was the first year StadCo invoiced Stadium Authority for these costs, which totaled approximately $4.39M. In 2020, Stadium Authority paid $1.39M for buffet costs related to the FY2019/20 season. In 2022, Stadium Manager paid through the Revolving Credit Agreement the $902K of buffet costs due for FY 201/22. (The parties’ disputes regarding Stadium Manager’s use of the Revolving Credit Agreement was resolved in the August 2022 Settlement Agreement; including no charge of interest to the Stadium Authority.) For years other than Season 6 and Season 8, due to the pending litigation, the Stadium Authority has not paid the full invoiced amount of accrued annual buffet costs. Currently, accrued buffet costs total $6.8M (see table below).

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24-578 Agenda Date: 5/28/2024
Funds Held in Litigation Reserve
Due to ongoing legal disputes, in 2021/22 Stadium Authority started to hold funds in a litigation reserve to offset accrued potential liability. The Finance department coordinated with the City Manager’s Office and the City Attorney’s Office to calculate the potential liability of the Stadium Authority, which is was estimated at $11.1M and reflects the current balance in the litigation reserve.

The proposed budget amendments address, in part, the allocation of the litigation reserve funds to implement the terms of the Settlement Agreement.

DISCUSSION
On May 20, 2024, the Stadium Authority, City of Santa Clara, StadCo and Stadium Manager reached an agreement to settle the public safety and buffet cost disputes. This agreement was finalized on May 23
rd, with a copy of the agreement released to the public that day. The Settlement Agreement is also attached here. This settlement concludes all pending litigation between the parties.

In addition to resolving disputes over the claimed prior balances (described above) for buffets and public safety costs, the settlement also takes a forward-looking approach to these issues with the aim of mitigating future disputes. To achieve this goal, the settlement restructures cash flows into the City’s General Fund, increases ticket surcharge revenue, increases the senior and youth program fee, and includes a mutual release of claims except as expressly reserved. Some of these settlement terms require formalization in amendments to the Ground Lease and Stadium Lease because they arise from disputes over existing contract terms, and modify the terms and processes set forth therein.

The actions before City Council and the Stadium Authority Board at this time are to Approve the Amendment No. 2 to the Ground Lease, and to Approve the Amendment No. 1 to the Restated and City of Santa Clara Printed on 5/24/2024Page 8 of 16
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2014-15 1st 10 $ 760,847
2015-16 2nd 10 $ 766,070
2016-17 3rd 10 $ 871,948
2017-18 4th 10 $ 989,862
2018-19 5th 10 $ 999,979
2019-20 6th 12 $ 1,391,015
2020-21 7th 5 $
2021-22 8th 10 $ 902,081
2022-23 9th 12 $ 1,164,667
2023-24 10th 12 $ 1,254 ,367
TOTAL 101 $ 9,100,836
(1) Paid by SCSA
(2) Paid by RCA
$ $
$ $
$ $
$ $
$ $
$ 1,391,015 (lj .$
$ $
$ 902,081 {2) $
$ $
$ $
$ $
76,085 $
76,607 $
87,195 $
98,986 $
99,998 $ ...
115,918 $
$
90,208 ,.. $
97,056 $
104,531 $
846,583 $
760,847
766,070
871,948
989,862
999,979
1,164,667
1,254,367
6,807 ,740
Litigation
Contigency
Reserve
$ 902,081
$ 1,164,667
$ 1,254,367
$ 3,321,115
24-578 Agenda Date: 5/28/2024
Amended Stadium Lease in order to implement the related terms in the Settlement Agreement.

Delegated authority is also requested for the City Manager/Executive Director to make modifications to any related agreements among the parties that require conforming changes in order to implement the terms of the Settlement Agreement. In addition, in order to effectuate the transfer of funds currently in the litigation reserve and to make other related money transfers contemplated by the Settlement Agreement, certain budget amendments are also required.

As described above, in order to settle the outstanding disputes and simultaneously increase revenue and financial stability for the City and Stadium Authority Agreement, a number of settlement terms were negotiated. Such terms related directly to the disputes at issue, and went beyond. Many of these deal points must also be included in amendments to the Ground Lease and Stadium Lease.

Each key required lease amendment term is discussed below.

Public Safety Costs Terms
Carryforward and Payment of Accrued Public Safety Costs Credits out of Excess Revenues.

Under the Settlement Agreement, the approximate settlement amount of $14.9M in accrued but unpaid Public Safety Cost Credits are partially paid down using approximately $3.3M in litigation contingency funds. The remaining $11.6M amount is redefined as the “Stadium Lease for Public Safety Costs - 2024 Outstanding Balance,” and will be repaid through new provisions added in Section 14.7 of the Stadium Lease. Specifically, this amount will be paid over time out of “excess revenues” that, under existing terms of the Stadium Lease, would otherwise have gone into the Stadium Renovation/Demolition Fund. The lease amendment provides a restructuring of the Stadium Lease “waterfall” provisions governing the distribution of “Excess Revenues”. Instead of 100% of excess revenues going into the Renovation/Demolition Fund until a $70M balance is reached, “Excess Revenues are now distributed 50% to the demolition reserve fund, 25% to repay the balance of the Public Safety Costs 2024 Outstanding Balance, and 25% available for distribution to the City’s General Fund. Once the Public Safety Costs 2024 Outstanding Balance is fully repaid, the waterfall will be restructured on an on-going basis with 50% of excess revenues to the demolition reserve fund and 50% available for distribution to the City’s General Fund. With these modifications, the City’s General Fund directly benefits by receiving “excess revenues” sooner during the lease term than otherwise projected. This restructuring is reflected in amendments to Paragraphs 14.7 and 14.8 of the Stadium Lease.

Increase in the Public Safety Cost Threshold.

Another key settlement term increases the Public Safety Costs Threshold starting in Fiscal Year 24/25 from $251k/game to $360k/game (an increase of approx. $108,000/game). Over the course of ten games, this increase would equate to an additional $1.09M in value. The existing 4% escalator remains in place. This is reflected in amendment to Paragraph 7.5.3 of the Stadium Lease.

Increase in the Non-NFL Ticket Surcharge
.

The settlement also creates a new revenue source to address public safety costs that may exceed this new public safety cost threshold. The Non-NFL ticket Surcharge is currently $4 per ticket and, as explained above, Measure J and the Stadium Lease always provided that this Stadium Authority’s Discretionary Funded (which is partially funded by this surcharge) will be used to reimburse StadCo City of Santa Clara Printed on 5/24/2024Page 9 of 16
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24-578 Agenda Date: 5/28/2024
for public safety costs that exceed the threshold. Under the settlement agreement, this ticket surcharge will increase to $8 per ticket starting for events not yet booked in fiscal year 25/26, with a $1.00 escalator every four years thereafter. The Stadium Manager will consider further one-time increases on an event-by-event basis. The “new” additional surcharge revenue (“Additional NNE Surcharge Revenues”) will be used to reimburse Public Safety Costs that exceed the Threshold.

Once these costs-over-threshold are repaid, the remaining new ticket surcharge revenue will be used first to fund a $2M Public Safety Costs offset reserve. If there are any remaining surcharge revenues, the parties will meet and confer to determine how to apply the monies. If no agreement is reached, any such excess funds will go into the Stadium Capital Expenditure reserve fund. These changes are reflected in amendments to Paragraphs 12.1 of the Stadium Lease as well as 8.4 and

8.5 of the Ground Lease. Using the current fiscal year 2024-25 projected budget for surcharge revenues as a reference point, this additional ticket surcharge could generate an additional $1.35M annually once all the non-NFL events in the fiscal year are subject to the new surcharge.

Modifications to the Performance-Based Rent Credits Formula .

The Settlement Agreement also modifies the existing formula for the payment of Performance-Based Rent to the City to make such payments more likely. Going forward, in any given year where there are sufficient Stadium Authority non-NFL net revenues, the City can now receive 50% of performance -based rent as if no public safety costs credits were applied. This is accomplished through modifications to the Stadium Lease. Under its existing terms, public safety credits that reduce performance-based rent are capped at 50% of non-NFL events' net revenue. Under the settlement agreement, the that cap will be reduced 25%. This lower cap can result in higher Performance-Based Rent to the City even when public safety credits are due. Deferred public safety credits are still carried forward and available to reduce StadCo’s future Facility rent obligations. This is reflected in amendment to Paragraph 7.5.3 of the Stadium Lease and 1.94 of the Ground Lease. In exchange, the City/Stadium Authority agree to modify the Facility Rent credit carryforward expiration date from 5 years to 10 years in Paragraph 1.95 of the Ground Lease.

Other Public Safety Cost Related Terms
.

Lastly, some other public safety cost related settlement terms are not reflected in any amendments to lease terms. The Capital Expenditure (CapEx) depreciation expenses on Non-NFL events will not be deducted from Non-NFL event revenue on an on-going basis. This avoids a double-charge because the Stadium Authority already accounts for the full value of Cap Ex expenditures in its fiscal budget as a Stadium Authority expense. Next, the City will engage its consultant to assess the overhead calculation for double-badgers (e.g. temporary police officers employed by the City to provide necessary supplemental public safety services for NFL games). StadCo will be consulted regarding the scope of the assessment, but the City and its consultants will have sole discretion over the findings and the overhead to charge. If the City concludes that these overhead rates should be reduced, the reduction will become effective for the 2024/25 Lease Year. Additionally, StadCo has agreed to pay for cancellation fees as long as they are included as public safety costs under the Stadium lease.

It is worth noting that a number of fundamental public safety terms in the original agreements have not been altered by the Settlement Agreement or the Lease Amendments. These include:
-- StadCo remains obligated to pay the City its “actual and reasonable” public safety costs; City of Santa Clara Printed on 5/24/2024Page 10 of 16
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24-578 Agenda Date: 5/28/2024
and
-- Santa Clara Police Department will continue to determine public safety needs and make deployment decisions.

Buffet Costs Terms
The settlement of the Buffet Costs claims includes two components: (1) resolving the accrued buffet costs balance to date; and (2) setting a fixed payment of buffet costs going forward to limit Stadium Authority’s liability for these expenses and establishing an accounting and verification process. Only the second component requires an amendment to the Stadium Lease (Paragraph 4.6.1).

As described above, the Stadium Authority has not paid all of the buffet costs over the past few years, due to pending litigation. The 49ers’ claim against the Stadium Authority for accrued buffet costs through Fiscal Year 2023/24 totaled $6.8M. Through the settlement, the 49ers have waived this balance in its entirety. Stadium Authority’s obligations to reimburse buffet costs from Fiscal Years 2018/19 through 2023/24 is now confirmed as completed.

Going forward, Stadium Authority has confirmed its obligation to reimburse these Legacy SBL buffet expenses to StadCo. But starting on and after Fiscal Year 2024/25, these costs allocated to Stadium Authority will be fixed and limited, which reduces Stadium Authority’s financial liability and exposure.

As referenced in the Background Section, the Stadium Lease does not include a cap or limit on Buffet Costs charged to the Authority. As a result of the settlement, Stadium Authority will now pay a flat fee of $90k per game for the buffet, with an increase of 3% annually.

Here’s a financial analysis on how this flat fee will help mitigate risks and reduce costs to the Stadium Authority on an on-going basis vs. the terms stipulated in the Stadium lease:
· Actual buffet costs have exceeded $90k per game in 6 of the last 9 years (no buffet provided in FY 2020-21 due to the pandemic).
· In the most recent season, the average buffet costs per game was $104.5K per game. This equaled a $1.2M Stadium Authority’s liability the for 12-games season. · If there was a limit of $90K/game in the most recent season, the 12-games season would cost $1.1M. Authority would have saved $14.5K a game and $174K for the year.

As shown, actual buffet expenses for the past few seasons have been higher than the $90k a game fixed payment amount. Also, as part of the Settlement Agreement, StadCo provided a representation and warranty that all prior invoices were only related Legacy SBL buffet costs.

Nevertheless, the Settlement Agreement also provides Stadium Authority the rights to initiate an accounting process to verify that the $90k per game flat payment obligation is not greater than actual buffet costs. The Authority also retains the right to audit such accounting. Based on that request, the 49ers will implement a system to track buffet expenses incurred for Legacy SBL Holders for NFL Games, and provide documents demonstrating the buffet expenses incurred for those SBL holders.

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24-578 Agenda Date: 5/28/2024
For any year in which the Authority requires the accounting process, an additional 5% accounting fee is added to the fixed payment to cover the administrative costs. (e.g., In a year where the total fixed payment owed is $1M, the accounting fee would be $50,000.) If the year-end accounting shows that buffet costs attributable to Legacy SBLs is less than the flat payment, then StadCo will refund to Stadium Authority the greater of the (i) Difference of actual costs v. fixed payment, or (ii) the 5% accounting fee.

To implement these terms, Paragraph 4.6.1, is proposed to be amended. The amendment implements the fixed payment for buffet costs at $90K per game with a 3% annual escalator, and the Authority’s optional accounting process.

Additional Revenues - Senior and Youth Program Fee.

As stated above, through the Settlement Agreement, the City and Stadium Authority were able to negotiate beneficial terms that would otherwise have been unavailable through the arbitration process. The increase to the Senior and Youth program fee is an example of such a beneficial term.

The fee will undergo several adjustments to increase its contribution to the City. The fee will rise from $0.35 to $0.40 per ticket, with incremental increases of $0.05 every ten years. Additionally, the annual cap of $250,000 will be elevated to $300,000 for the fiscal year 2024-25 and will further increase by $50,000 every ten years. This is reflected in an amendment of Paragraph 12.2 in the Stadium Lease and Section 8.2 in the Ground Lease. This revised fee structure is expected to generate a minimum of $2M in additional funds for the City over the next 30 years, providing further support the City’s senior and youth programs provided by the Parks and Recreation Department.

Additional Revenues - Excess Revenues
.

As stated above, the Settlement Agreement provides for a restructured waterfall of the use of Stadium Authority’s year-end excess revenues (Paragraph 14 of the Stadium Lease). The Stadium Lease waterfall terms required that excess revenues first fill up the $70M Renovation / Demolition Reserve Fund before any excess revenues flow to the General Fund. The Settlement Agreement provides for a restructured waterfall, so that excess revenues will continue to fill the Renovation / Demolition Reserve, while also repaying the Public Safety Costs 2024 Outstanding Balance due to StadCo, and also releasing excess revenues to the City’s General Fund. Once the balance to StadCo is fully repaid, the restructured waterfall will then provide for 50% of excess revenues to flow to the Renovation / Demolition Reserve fund, with 50% available for distribution to the City’s General Fund.

It is estimated that these settlement terms will provide $2.8M of funds to the City’s General Fund at the end of this year, and expedite by four or five years the funds flowing to the General Fund in future years. The restructuring is reflected in amendments to Paragraphs 14.7 and 14.8 of the Stadium Lease.

FISCAL IMPACT
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24-578 Agenda Date: 5/28/2024
Senior & Youth Program Fees
The Senior & Youth Program Fee will be increasing from $0.35 to $0.40 per NFL ticket sold starting in FY2024/25. As a result, Stadium Authority is projected to collect an additional $35,000 in Senior & Youth Program Fee revenue which will subsequently be paid to the City’s General Fund to support Senior & Youth Programs in the Parks & Recreation Department.

Public Safety Costs
Through FY2023/24, it is estimated that Stadium Authority will owe StadCo $15.5M as a Public Safety Costs (PSC) 2024 Outstanding Balance. StadCo has agreed to waive $664,000 of these costs related to FY2017/18 and an additional $9,296 of costs related to FY 2018/19. The remaining $14.8M will be owed by Stadium Authority. Stadium Authority will pay $3.4M to StadCo from the balance in the Legal Contingency Reserve and additional funds are projected to be paid to StadCo at the end of the FY2024/25 from Excess Revenue.

Excess Revenue
In accordance with the adjustments to the lease regarding how excess revenues are distributed, the amount that was originally budgeted in FY2024/25 to be deposited into the Renovation/Demolition Reserve, will instead be distributed as follows (1) 50% to the Renovation/Demolition Reserve, (2) 25% to the PSC 2024 Outstanding Balance, and (3) 25% to the City’s General Fund. The amount of Excess Revenue available for distribution to the Renovation/Demolition Reserve at the end of FY 2024/25 is now estimated to total $12.3M. This is an increase from the FY 2024/25 Adopted SCSA Budget of $11.4M due to net revisions in the estimate for FY 2024/25 buffet costs ($221,000 savings) and a ground lease performance-based rent credit ($736,000 savings). Therefore, based on the terms included in this report, it is currently projected that in FY 2024/25, $6.1M will be transferred to the Renovation/Demolition Reserve, $3.1M will be paid to StadCo to pay down the PSC 2024 Outstanding Balance, and $3.1M will be transferred to the City’s General Fund.

Performance Based Rent
Stadium Authority will pay the City a projected $7.1M for performance-based rent related for FYs 2022/23 and 2023/24 from the Legal Contingency Reserve. Additionally, it is projected that Stadium Authority will pay the City $2.5M for performance-based rent related to FY2024/25; this was originally budgeted to go to the Legal Contingency Reserve and based on the terms included in this report a budget amendment is recommended to allocate the estimated payment for FY 2024/25.

Buffet Costs
Stadium Authority originally budgeted $1.1M to be transferred into the Legal Contingency Reserve related to FY2024/25 SBL Complementary Buffet costs. It is now projected that Stadium Authority will pay $900,000 for SBL Complementary Buffet costs. The funding from these savings is now expected to flow through Excess Revenue at the end of the year.

Legal Contingency Reserves
The Legal Contingency Reserves are budgeted with a $14.7M balance at the end of the 2024/25 Fiscal Year. The settlement provides for the Legal Contingency Reserves to be liquidated and these funds appropriated for payments, planned expenditures or Excess Revenue transfers at the end of City of Santa Clara Printed on 5/24/2024Page 13 of 16
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24-578 Agenda Date: 5/28/2024
the year.

Renovation/Demolition Reserve
The Renovation/Demolition Reserve was projected to have a balance of $35.5M at the end of Fiscal Year 2024/25. As noted above, adjustments to the lease provide for Excess Revenue to be distributed differently from how originally budgeted. This, along with the liquidation of the Legal Contingency Reserves result in a net decrease of $5.3M to this reserve.

FY 2024/25 Santa Clara Stadium Authority Operating Budget Amendments Description Current Increase/
Decrease
Revised
Sources
Senior & Youth Program Fees $233,000 $35,000 $268,000
Total Sources $233,000 $35,000 $268,000
Uses
Expenses
Senior & Youth Program Fees (paid to
City)
$233,000 $35,000 $268,000
Performance Rent 2022/23 & 2023/24
(paid to City)
$0 $7,100,000 $7,100,000
Performance Rent 2024/25 (paid to City) $0 $2,500,000 $2,500,000 Public Safety Costs (from Settlement) $0 $3,400,000 $3,400,000 Public Safety Costs (2024/25 Excess
Revenues)
$0 $3,073,000 $3,073,000
Transfer to City General Fund (2024/25
Excess Revenues)
$0 $3,073,000 $3,073,000
SBL Complementary Buffet $0 $900,000 $900,000
Ending Fund Balance
Legal Contingency Reserve - Buffet
Costs
$4,441,801 ($4,441,801) $0
Legal Contingency Reserve - Public
Safety Costs
$10,305,725 ($10,305,725) $0
Renovation/Demolition Reserve $35,476,705 ($5,298,474) $30,178,231 Total Uses $50,457,231 $35,000 $50,492,231

COORDINATION
This report was coordinated between the City Manager’s Office/Executive Director’s Office, City City of Santa Clara Printed on 5/24/2024Page 14 of 16
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24-578 Agenda Date: 5/28/2024
Attorney’s Office/Stadium Authority Counsel’s Office, and Finance Department/Treasurer’s Office.

PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email [email protected] <mailto:[email protected]> .

ALTERNATIVES

1. Staff’s recommendation; or

2. Any other direction from the City Council and Stadium Authority Board.

RECOMMENDATION

1. Authorize the City Manager, on behalf of the City, and the Executive Director, on behalf of the Stadium Authority, to execute a First Amendment to the Ground Lease with the Santa Clara Stadium Authority to in substantially the form presented, in final forms approved by Agency Counsel/City Attorney.

2. Authorize the Executive Director to execute a First Amendment to the Amended and Restated Stadium Lease Agreement with Forty Niners SC Stadium Company, LLC to in substantially the forms presented, in final forms approved by Agency Counsel/City Attorney.

3. Authorize the City Manager, on behalf of the City, and Executive Director, on behalf of Stadium Authority, to negotiate and execute modifications to such other agreements as may be necessary to implement the terms of the Settlement Agreement, in final forms approved by Agency Counsel/City Attorney.

4. Approve the following FY 2024/25 net budget amendments in the Santa Clara Stadium Authority Operating Budget:
a. Increase the revenue estimate and corresponding payment to the City for Senior and Youth fees by $35,000, and
b. Increase the Performance-Based Rent expense to the City by $9,600,000, increase the Public Safety Cost expense by $6,473,000, increase the transfer to the City’s General Fund by $3,073,000, increase the SBL Complementary Buffet expense by $900,000, offset by the elimination of Legal Contingency Reserves in the amount of $14,747,526 and a decrease to the Renovation/Demolition Reserve by $5,298,474.

Reviewed by: Chuck Baker, Assistant City Manager
Approved by: Jovan D. Grogan, City Manager/Executive Director and Glen R. Googins, City Attorney/Stadium Authority Counsel

ATTACHMENTS

1. Proposed Amendment No. 2 to the Ground Lease (Stadium Site)

2. Proposed Amendment No. 1 to the Restated and Amended Stadium Lease

3. May 23, 2024 Settlement Agreement and Mutual Releases (Buffet Arbitration and PSC Arbitration)
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20868231.2 1

SECOND AMENDMENT TO GROUND LEASE
(STADIUM SITE)

THIS SECOND AMENDMENT TO GROUND LEASE (this “Second Amendment”) is dated for reference purposes only as of ______________________, 2024, by and between the City of Santa Clara, California, a California municipal corporation (the “City”), as ground lessor, and the Santa Clara Stadium Authority, a joint exercise of powers entity, created through Government Code Section 6500 et seq. (“Lessee”), as ground lessee.

RECITALS
A. City and Lessee are parties to that certain Ground Lease (Stadium Site) dated as of March 28, 2012 (the “Original Ground Lease”), as amended by that certain First Amendment to Ground Lease (Stadium Site) dated as of June 19, 2013 ( collectively, the “Existing Ground Lease”), pursuant to which City leases to Lessee certain premises generally located at the southwest corner of Tasman Boulevard and Centennial Drive in Santa Clara, California as more particularly described in Exhibit A, attached to the Existing Lease (the “Stadium Site”).

B. Lessee and Forty Niners SC Stadium Company LLC, a Delaware limited liability company (“Stadium Tenant”), are parties to that certain Amended and Restated Stadium Lease Agreement dated as of June 19, 2013 (the “Existing Stadium Lease”), pursuant to which Lessee leases to StadCo the Stadium Site and other improvements more particularly described therein.

Concurrently herewith, the Existing Stadium Lease is being amended in accordance with the terms and conditions set forth in that certain First Amendment to Amended and Restated Stadium Lease Agreement dated as of even date herewith, by and between Lessee and Stadium Tenant (the “Stadium Lease First Amendment”).

C. The City and Lessee are parties to that certain Settlement Agreement and Mutual Release (Buffet and PSC Arbitration), dated May 23, 2024, pursuant to which City and Lessee are entering into this Second Amendment for the purposes of implementing certain terms of that Settlement Agreement.

D. Accordingly, the City and Lessee now desire to make certain amendments to the Existing Ground Lease, subject to, and on the basis of, the terms, covenants and conditions hereinafter set forth. The Existing Ground Lease, as amended by this Second Amendment, is sometimes referred to herein as the “Ground Lease.”

AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the agreements of City and Lessee herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, City and Lessee hereby agree as follows:

1. Use of Defined Terms; Recitals; Effective Date.

1.1 Definitions; Recitals . All capitalized terms used and not defined herein shall have the defined meanings ascribed to them in the Existing Ground Lease or other agreements

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20868231.2 2
as specifically cited herein. The provisions of the Recitals above are fully incorporated herein by this reference.

1.2 Effective Date. Unless otherwise specifically provided herein, all provisions of this Second Amendment shall be effective as of the last date of the last signature herein, provided that the National Football League’s (NFL) and Stadium Lenders’ consent of this Second Amendment has been received (“Effective Date”).

2. Performance-Based Rent Credits Definition. Effective as of the commencement of Lease Year 11 (i.e., April 1, 2024 – March 31, 2025; and, for clarity. Such Lease Year and other Lease Years shall sometimes hereinafter be referred to in this Second Amendment and in the modified provisions of the Existing Ground Lease set forth herein as, for example, “Lease Year 24/25”), Section 1.94 of the Existing Ground Lease is hereby deleted and replaced in its entirety with the following:
“1.94 “ Performance Based Rent Credits” means, for any Lease Year, the sum of the following:
(a) Fifty percent (50%) of the Fixed Ground Rent (including the increase in Fixed Ground Rent specified in this Lease in the event that a Second Team plays and hosts NFL Home Games in the Stadium) payable for such Lease Year, plus (b) The Credited Public Safety Costs (as defined in the Stadium Lease) for such Lease Year, provided that, if the Credited Public Safety Costs for such Lease Year exceed twenty-five percent (25%) of the Net Income from Non-NFL Events for such Lease Year, the amount of Credited Public Safety Costs exceeding twenty- five percent (25%) of the Net Income from Non- NFL Events for such Lease Year shall not be included in the calculation of Performance Based Rent Credits for such Lease Year and instead shall constitute a Permitted Credits Carry -forward (as defined below) applicable to subsequent Lease Years, plus € Following the Tax Allocation Termination Date, the amount of the Received PIT, plus
(d) The amount of any credit for Disproportionate Taxes for such Lease Year, as provided in Section 4.7; pl€(e) Any Permitted Credits Carry -forward (as defined below) applicable to such Lease Year.”

3. Permitted Credits Carry -forward. Effective as of the commencement of Lease Year 24/25, the reference to “the next five (5) succeeding Lease Years ” in Section 1.95 of the Original Ground Lease is hereby deleted and replaced with “the next ten (10) succeeding Lease Years”.

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4. City of Santa Clara Senior and Youth Program Fee . Effective as of the commencement of Lease Year 24/25, Section 8.2 of the Original Ground Lease is hereby deleted and replaced in its entirety with the following:
“8.2 City of Santa Clara Senior and Youth Program Fee . Effective as of the commencement of Lease Year 24/25 and continuing through Lease Year 33/34, Lessee agrees to charge (or require StadCo or its Subtenants to charge) a fee of forty cents ($0.40) on each Ticket for each NFL Game held in the Stadium (the “City of Santa Clara Senior and Youth Program Fee ”), and to pay the annual proceeds collected, up to a maximum of Three Hundred Thousand Dollars ($300,000) per Lease Year, to City as Additional Rent. Effective as of the commencement of Lease Year 34/35 and every ten (10) Lease Years thereafter, (a) the City of Santa Clara Senior and Youth Program F ee shall be increased by five cents ($0.05) and (b) the maximum amount of the City of Santa Clara Senior and Youth Program Fee per Lease Year shall be increased by an additional Fifty Thousand Dollars ($50,000.00). City agrees to use the funds received from the City of Santa Clara Senior and Youth Program Fee to fund City programs for parks and recreation and libraries, including, without limitation, senior activities and the Youth Championship Team Fund. To the ext ent Lessee receives in excess of the maximum amount of the City of Santa Clara Senior and Youth Program Fee applicable to any Lease Year from such fees, the excess will be refunded to StadCo, unless the Stadium Lease provides otherwise.”

5. Discretionary Fund. Effective as of the commencement of Lease Year 24/25, Sections 8.4 and 8.5 of the Original Ground Lease are hereby deleted and replaced in its entirety with the following ; provided, however, that the increase in the Non- NFL Ticket Surcharge described in the following provision shall be implemented only for Non- NFL Events booked following the Effective Date of this Second Amendment (and, for purposes of the foregoing, “booked” means the time at which economic terms are agreed upon and ac cepted by the Stadium Manager and the promoter, and any other parties whose consent is needed to book the Non-NFL Event, regardless of whether a contract has been executed or not):
“8.4 Discretionary Fund. As additional consideration for City to enter into this Lease, Lessee shall impose, and will require the promoter or sponsor of any Non-NFL Events to collect on its behalf, a surcharge of Eight Dollars ($8.00) per Ticket to all Non -NFL Events for which Tickets are sold or otherwise offered to the general public (the “Non-NFL Ticket Surcharge ”); and, for Lease Year 28/29 and every four (4) Lease Years thereafter, the “Non-NFL Ticket Surcharge” shall increase by One Dollar ($1.00) per Ticket. For every Le ase Year, (a) the “Base Non-NFL Ticket Surcharge Proceeds ” shall equal Four Dollars ($4.00) per Ticket to all Non-NFL Events in such Lease Year for which Tickets are sold or otherwise offered to the general public; and (b) the “Additional Non-NFL Ticket Surcharge Proceeds” shall equal the amount by which the proceeds of the Non- NFL Event Ticket Surcharge in such Lease Year exceeds the Base Non-NFL Ticket Surcharge Proceeds. The Base Non -NFL Ticket Surcharge Proceeds and the Additional Non-NFL Ticket Surcharge Proceeds applicable to any Lease Year are,

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collectively, herein referred to as the “Non-NFL Ticket Surcharge Proceeds ”.

Notwithstanding the foregoing, Lessee and StadCo have agreed in the Stadium Lease First Amendment that the Stadium Manager shall be permitted to increase the Non-NFL Ticket Surcharge for one or more Non- NFL Events if the Stadium Manager determines, pursuant to the authority granted to it in Article 3 of the Initial Stadium Management Agreement (as defined in the Stadium Lease), that increasing the Non-NFL Ticket Surcharge will be in compliance with the standards of care set forth in Section 2.9 of the Initial Stadium Management Agreement. Additional proceeds generated by the Stadium Manager’s increasing the Non- NFL Event Ticket Surcharge beyond the amounts set forth above shall constitute Additional Non-NFL Ticket Surcharge Proceeds for purposes hereof.

Lessee shall maintain a separate account under the control of Lessee (the “Discretionary Fund”) that shall be funded annually in the amount of fifty percent (50%) of the Base Non-NFL Ticket Surcharge Proceeds received by Lessee in that Lease Year. Additional Non-NFL Ticket Surcharge Proceeds shall not be deposited into the Discretionary Fund, and shall be treated in accordance with Section 6 of the Stadium Lease First Amendment. Lessee may use the Discretionary Fund to pay Discretionary Expenses. In the event that the Unallocated Amount (as defined below in this Section) of the Discretionary Fund at any time exceeds One Million Dollars ($1,000,000), then, in consultation with the Stadium Manager, Lessee will determine if adequate provision has been made, such as through a sinking fund, for replacement of and upgrades to capital improvements contemplated under the Public Safety Plan; and, if not, Lessee will reserve funds in the Discretionary Fund for such purpose. If the remaining balance in the Discretionary Fund still exceeds One Million Dollars ($1,000,000) after adequate provision has been made for replacement of and upgrades to capital improvements contemplated under the Public Safety Plan, then up to one -half (1/2) of such excess may be transferred i n the discretion of Lessee from the Discretionary Fund to City's General Fund, in which event an equal amount to that transferred to City's General Fund will be transferred from the Discretionary Fund to Lessee's operating fund. As used herein, the “Unallocated Amount ” of the Discretionary Fund means, from time to time during the Term, the portion of the Discretionary Fund, if any, that is not then allocated to pay the costs of a Scheduled Civic Event or other Discretionary Expenses included in the then approved Annual Stadium Authority Budget (as that term is defined in the Stadium Lease) or for Emergency (as that term is defined in the Stadium Lease) expenses.”
“8.5 Discretionary Fund In Event of Transfer of Lessee's Interest. If there is an assignment, termination or other transfer of Lessee's interest under this Lease and the successor of Lessee is not Controlled by City, then following such assignment, termination or other transfer of Lessee's interest, the successor Lessee shall continue to impose the Non-NFL Event Ticket Surcharge and shall pay to City an amount equal to the 50% of the Base Non-NFL Ticket Surcharge Proceeds in each Lease Year as additional Rent.”

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6. Ratification. Except as modified by this Second Amendment, all of the terms, conditions and provisions of the Existing Ground Lease shall remain in full force and effect and are hereby ratified and confirmed.

7. Counterparts. This Second Amendment may be executed in counterparts, and each counterpart shall have the same force and effect as an original and shall constitute a binding agreement on the part of each of the undersigned. A facsimile or scanned (.pdf or .tiff file or equivalent) execution, including digital and electronic signatures, shall be deemed good and valid acceptance of this Second Amendment and shall be reasonably relied upon by all parties.

Photocopies, PDFs, or faxed copies of original signature pages shall have the same force and effect as original signature pages.
[The remainder of this page has been intentionally left blank]

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IN WITNESS WHEREOF, the City and Lessee have entered into this Second Amendment to Ground Lease as of the day and year first written above.

CITY:

CITY OF SANTA CLARA, CALIFORNIA,
a chartered California municipal corporation
APPROVED AS TO FORM:

GLEN R. GOOGINS
City Attorney

JŌVAN GROGAN
City Manager
1500 Warburton Avenue
Santa Clara, CA 95050
Telephone: (408) 615-2210

LESSEE:

SANTA CLARA STADIUM AUTHORITY,
a joint exercise of powers entity,
created through Government Code Sections 6500 et seq.

APPROVED AS TO FORM:

GLEN R. GOOGINS
Stadium Authority Counsel

JŌVAN GROGAN
Executive Director
1500 Warburton Avenue
Santa Clara, CA 95050
Telephone: (408) 615-2210

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FIRST AMENDMENT TO AMENDED AND RESTATED

STADIUM LEASE AGREEMENT

THIS FIRST AMENDMENT TO AMENDED AND RESTATED STADIUM LEASE AGREEMENT (this “First Amendment”) is dated for reference purposes only as of ___________, 2024, by and between the SANTA CLARA STADIUM AUTHORITY, a joint exercise of powers entity, created through Government Code sections 6500 et seq. (the “Stadium Authority” or “Landlord”), and FORTY NINERS SC STADIUM COMPANY LLC, a Delaware limited liability company (“Tenant”).

RECITALS
A. Landlord and Tenant are parties to that certain Amended and Restated Stadium Lease Agreement dated as of June 19, 2013 (the “Existing Stadium Lease”), pursuant to which Landlord leases to Tenant the Stadium and other improvements more particularly described therein.

B. Landlord and Tenant are parties to that certain Settlement Agreement and Mutual Release (Buffet and PSC Arbitration), dated May 23, 2024, pursuant to which Landlord and Tenant are entering into this First Amendment for the purposes of implementing certain terms of that Settlement Agreement.

C. Accordingly, Landlord and Tenant now desire to make certain amendments to the Existing Stadium Lease, subject to, and on the basis of, the terms, covenants and conditions hereinafter set forth. The Existing Stadium Lease, as amended by this First Amendment, is referred to herein as the “Stadium Lease”.

AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the agreements of Landlord and Tenant herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agree as follows:

1. Recitals; Effective Date. The provisions of the Recitals above are fully incorporated herein by this reference. Unless otherwise specifically provided herein, all provisions of this First Amendment shall be effective as of the last date of the last signature herein, provided that the National Football League’s (NFL) and Stadium Lenders’ consent of this First Amendment has been received (“Effective Date”).

2. Defined Terms. All capitalized terms used and not defined in this First Amendment shall have the meanings ascribed to them in the Existing Stadium Lease or other agreements as specifically cited herein; provided, however, that the following terms shall be defined as follows:

2.1.1 “Ground Lease” means the ground lease entered into concurrently with this Lease by the Stadium Authority and the City, pursuant to which the Stadium Authority shall lease the Stadium Site from the City, as the same may be amended, supplemented or modified Final Draft

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from time to time in accordance with the Ground Lease . In no event shall the Ground Lease be amended or otherwise modified without Tenant's prior written approval.

2.1.2 “Public Safety Costs – 2024 Outstanding Balance” means Fourteen Million Eight Hundred Twenty-Three Thousand One Hundred Seventy- Seven Dollars ($14,823,177.00); provided, however, that (a) because the foregoing includes a current estimate of $3,631,648 for Credited Public Safety Costs for Lease Year 23/24, if the Credited Public Safety Costs for Lease Year 23/24 are ultimately determined to be more than $3,631,648, the Public Safety Costs – 2024 Outstanding Balance shall be increased by the amount of such increase, and if the Credited Public Safety Costs for Lease Year 23/24 are ultimately determined to be less than $3,631,648, the Public Safety Costs – 2024 Outstanding Balance shall be decreased by the amount of such reduction; and (b) if and to the extent that Tenant reimburses the City after the Effectiv e Date for Public Safety Costs for Lease Years prior to Lease Year 23/24, the Public Safety Costs – 2024 Outstanding Balance will increase by the amount of any such reimbursement.

3. Complimentary Buffets.

3.1 Annual Buffet Payment. Effective as of the commencement of Lease Year 11 (i.e., April 1, 2024 – March 31, 2025; and, for clarity, such Lease Year and other Lease Years shall sometimes hereinafter be referred to in this First Amendment and in the modified provisions of the Existing Stadium Lease set forth herein as, for example, “Lease Year 24/25” ), the fifth sentence of Paragraph 4.6.1 of the Existing Stadium Lease is deleted and replaced in its entirety with the following sentences:
“Subject to the terms and conditions of the Stadium Lease Documents, including without limitation, the provisions of Paragraph 7.3.1 of this Lease, Tenant shall also be responsible to make available to SBL Holders the amenities described in Exhibit D to each such SBL Agreement to the extent applicable to NFL Events, including providing a complimentary buffet to certain SBL Holders during NFL Games (as defined below) ; provided, however , that, beginning with Lease Year 24/25, and continuing for each Lease Yea r thereafter, the Stadium Authority shall, in consideration for Tenant’s providing such complimentary buffets to the approximate 942 SBL holders in Sections VIP 115, VIP 138, VIP 137 Rows 4, 5, and 6, and VIP 139 Rows 4, 5, and 6 (“Select SBL Holders ”), pay Tenant the “Annual Buffet Payment” (as defined below) applicable to such Lease Year .

Tenant shall invoice the Stadium Authority monthly for the portion of the Annual Buffet Payment applicable to the preceding calendar month (based on the number of NFL Games played du ring such calendar month), and the Stadium Authority shall pay the invoiced amount within thirty (30) days following receipt of such an invoice. For purposes hereof, the “Annual Buffet Payment” for Lease Year 24/25 shall equal the product of (a) Ninety Thousand Dollars ($90,000.00) (the “Per Game Buffet Factor”) multiplied by (ii) the total number of NFL Games played at the Stadium during that Lease Year for which the complimentary buffet is provided to the Select SBL Holders. For example, if there were ten (10) such NFL Games during Lease Year 24/25, the Annual Buffet Payment for that Lease Year Final Draft

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shall equal Nine Hundred Thousand Dollars ($900,000.00). For each Lease Year thereafter, the Per Game Buffet Factor referenced above shall be increased by three percent (3%). This 3% annual increase is applicable only to the Per Game Buffet Factor. As used in this Paragraph 4.6.1 [and in Section 3.2 of this First Amendment below], the term ”NFL Games ” means any pre-, regular, and post -season NFL games played by the Team in the Stadium, in which the Team is designated as the home team by the NFL (excluding League Events [as defined in Article 21 below]).

3.2 Stadium Authority Inspection and Audit Right. The Stadium Authority shall have the right, upon written notice to Tenant, delivered prior to the start of any Lease Year (i.e., April 1) to require that Tenant implement a system to track buffet expenses incurred for the Select SBL Holders during NFL Games played at the Stadium during such Lease Year and also maintain books and records sufficient to document the actual cost of Tenant’s providing complimentary buffet s to the Select SBL Holders during Team Games played at the Stadium during such Lease Year (“Complimentary Buffet Books and Records”). For any Lease Year in which the Stadium Authority timely elects to have Tenant maintain Complimentary Buffet Books and Records, (a) the Stadium Authority shall pay to Tenant, in addition to the Annual Buffet Payment, an administrative fee equal to five percent (5%) of the Annual Buffet Payment for such Lease Year (the “Complimentary Buffet Administrative Fee”, which shall be billed monthly by Tenant, together with the monthly invoice of the Annual Buffet Payment), and (b) by March 15 of that Lease Year, Tenant shall (i) provide to the Stadium Authority a statement for such Lease Year, together with commercially reasonable backup documentation, setting forth the actual cost of Tenant’s providing complimentary buffets to the Select SBL Holders during NFL Games played at the Stadium during such Lease Year (the “Annual Buffet Statement”), and (ii) make available to the Stadium Authority such documents to d emonstrate the reasonabl e allocation of such complimentary buffet costs to the Select SBL Holders. Tenant acknowledges and agrees that the Complimentary Buffet Administrative Fee shall be payable only for Lease Years in which the Stadium Authority timely elects to have Tenant maintain Complimentary Buffet Books and Records. Further, the Complimentary Buffet Administrative Fee is wholly independent of the 3% annual increase to the Per Game Buffet Factor. Within one hundred eighty (180) days following the Stadium Authority's receipt of any Annual Buffet Statement, the Stadium Authority or its representative, which representative must be a qualified, third -party independent certified public accountant, shall have the right to audit such Complimentary Buffet Books and Records at any time during normal Business Hours, upon written notice to Tenant, delivered at least ten (10) Business Days in advance. The Stadium Authority shall not have the right to receive the Annual Buffet Statement, or to exercise its right to review the documents described in clause (ii) above or audit the Complimentary Buffet Books and Records, unless it has paid the Annual Buffet Payment, plus the Complimentary Bu ffet Administrative Fee , for the Lease Year for which the Complimentary Buffet Books and Records were prepared. If it is determined either through Stadium Authority’s review of the documents described in clauses (i) or (ii) above, or as the result of the Stadium Authority's audit, that the Annual Buffet Payment for the particular Lease Year exceeds the actual cost of Tenant’s providing complimentary buffets to the Select SBL Holders during NFL Games played at the Stadium during such Lease Year (“Actual Buffet Costs”), and Tenant does not disagree with such determination, then Tenant shall promptly pay to the Stadium Authority the greater of: (x) the amount by which the Annual Buffet Payment exceeds the Actual Final Draft

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Buffet Costs for such Lease Year or (y) the Complimentary Buffet Administrative Fee charged in that Lease Year. If, however, Tenant disagrees with such determination, then Stadium Authority and Tenant shall resolve such disagreement in accordance with the Dispute Resolution Procedures.

If it is determined as the result of the Dispute Resolution Procedures that the Annual Buffet Payment exceeds the Actual Buffet Costs for such Lease Year, Tenant shall promptly pay to the Stadium Authority the greater of: ( x) the amount by which the Annual Buffet Payment exceeds the Actual Buffet Costs for such Lease Year or (y) the Complimentary Buffet Administrative Fee charged in that Lease Year.

4. Credited Public Safety Costs . Effective as of the commencement of Lease Year 24/25, Paragraph 7.5.3(a) of the Existing Stadium Lease is deleted and replaced in its entirety with the following:
“(a) If the amount of Public Safety Costs, including Public Safety Capital Expenditures (whether funded from the Stadium Capital Expenditure Reserve or otherwise), attributable to NFL Games for any Lease Year (which shall, in the case of Public Safety Capital E xpenditures, include only the amortization thereof applicable to such Lease Year) exceed the Public Safety Costs Threshold applicable to such Lease Year, then, subject to the provisions of Paragraph 7.5.5 below and, except to the extent such excess is paid by the Stadium Authority out of the Stadium Authority Discretionary Fund, or paid from the Public Safety Costs Reserve pursuant to Paragraph 12.1.3 below (as applicable for any Lease Year, the “PSC Reserve Payment ”), or paid from Net Hotel CFD Revenue pursuant to Paragraph 12.5 below, or, in the case of a League Event, paid by third parties, such as the "event host committee", the amount by which such Public Safety Costs exceed the Public Safety Costs Threshold shall constitute "Credited Public Safety Costs." Such Credited Public Safety Costs, up to a maximum of twenty-five percent (25%) of the Net Income from Non- NFL Events for such Lease Year , shall be included among the Performance-Based Rent Credits for purposes of determining the amount of Performance-Based Rent payable by the Stadium Authority for such Lease Year pursuant to the Ground Lease (and, following the Tenant Season Expansion Date if the Stadium Authority Put Right is exercised, the Performance - Based Rent payable by Tenant for such Lease Year in accordance with Paragraph 6.4 above). If such Credited Public Safety Costs for any Lease Year exceed twenty-five percent (25%) of the Net Income from Non- NFL Events for such Lease Year , the additional amount of Credited Public Safety Costs shall constitute a Permitted Credits Carry -forward applicable to future Lease Years .

Until the Tenant Season Expansion Date, if applicable, the Rent payable by Tenant for any Lease Year shall be reduced by the lesser of the following: (1) the amount of Credited Public Safety Costs for such Lease Year plus any Credited Public Safety Costs included among the Permitted Credits Carry-forward for the particular Lease Year or (2) twenty-five percent (25%) of the Net Income from Non- NFL Events for such Lease Year. If, for any reason, such a reduction in the Rent payable by Tenant is not permitted by any Permitted Landlord Financing or otherwise, the Stadium Authority shall, within thirty (30) days following application of the Final Draft

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Stadium Authority's credit against Performance-Based Rent pursuant to the Ground Lease, pay to Tenant the amount by which the Performance -Based Rent is so reduced.”

5. Public Safety Costs Threshold. Effective as of the commencement of Lease Year 24/25, Paragraph 7.5.3(b) of the Existing Stadium Lease is deleted and replaced in its entirety with the following:
“(b) Beginning in and f or Lease Year 24/25, the “Public Safety Costs Threshold” shall equal the product of (i) Three Hundred Sixty Thousand Dollars ($360,000.00) (the “Per Game PSC Factor”) multiplied by (ii) the total number of pre -season, regular season and post -season NFL Home Games played at the Stadium during that Lease Year. For example, if there were ten (10) NFL Home Games during Lease Year 24/25, the Public Safety Costs Threshold for that Lease Year shall equal Three Million Six Hundred Thousand Dollars ($ 3,600,000.00).

For Lease Year 25/26 and each Lease Year thereafter, the Per Game PSC Factor referenced above shall be increased by four percent (4%) per Lease Year, subject to adjustment as provided in Paragraph 7.5.6(b) below.” For the sake of clarity, nothing contained in this Section 5 shall affect the amount of the Public Safety Costs Threshold for Lease Years 14/15 through 23/24.

6. Non-NFL Event Ticket Surcharge. Effective as of the commencement of Lease Year 24/25, Paragraph 12.1 of the Existing Stadium Lease is deleted and replaced in its entirety with the following ; provided, however, that the increase in the Non- NFL Ticket Surcharge described in the following provision shall be implemented only for Non- NFL Events booked following the Effective Date of this First Amendment (and, for purposes of the foregoing, “booked” means the time at which economic terms are agreed upon and accep ted by the Stadium Manager and the promoter, and any other parties whose consent is needed to book the Non-NFL Event, regardless of whether a contract has been executed or not):
“12.1 Non-NFL Event Ticket Surcharge.

12.1.1 The Stadium Authority (or, if the Stadium Authority exercises the Stadium Authority Put Right as provided in Paragraph 5.1, then, effective as of the Tenant Season Expansion Date, Tenant) will impose, and will require the promoter or sponsor of any Non- NFL Events to collect on its behalf, a surcharge of Eight Dollars ($8.00) per Ticket to all Non-NFL Events for which Tickets are sold or otherwise offered to the general public (the “Non-NFL Ticket Surcharge”); and, for Lease Year 28/29 and every four (4) Lease Years thereafter, the “Non-NFL Ticket Surcharge” shall increase by One Dollar ($1.00) per Ticket. For every Lease Year, (a) the “Base Non-NFL Ticket Surcharge Proceeds ” shall equal Four Dollars ($4.00) per Ticket to all Non-NFL Events in such Lease Year for which Tickets are sold or otherwise offered to the general public ; Final Draft

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and (b) the “Additional Non -NFL Ticket Surcharge Proceeds ” shall equal the amount by which the proceeds of the Non- NFL Event Ticket Surcharge in such Lease Year exceeds the Base Non-NFL Ticket Surcharge Proceeds. The Base Non-NFL Ticket Surcharge Proceeds and the Additional Non-NFL Ticket Surcharge Proceeds applicable to any Lease Year are, collectively, herein referred to as the “Non-NFL Ticket Surcharge Proceeds ”. Notwithstanding the foregoing, the Stadium Authority and Tenant agree that the Stadium Manager shall be permitted to increase the Non-NFL Ticket Surcharge for one or more Non-NFL Events if the Stadium Manager determines, pursuant to the authority granted to it in Article 3 of the Initial Stadium Management Agreement, that increasing the Non-NFL Ticket Surcharge will be in compliance with the standards of care set forth in Section 2.9 of the Initial Stadium Management Agreement.

Additional proceeds generated by the Stadium Manager’s increasing the Non-NFL Event Ticket Surcharge beyond the amounts set forth above shall constitute Additional Non-NFL Ticket Surcharge Proceeds for purposes hereof.

12.1.2 Except as expressly provided below in this Paragraph 12.1, the Non-NFL Ticket Surcharge Proceeds will be excluded from Non- NFL Event Revenue, and will be allocated as follows:
(i) One-half (1/2) of the Base Non-NFL Ticket
Surcharge Proceeds will be included in Stadium Authority Revenue in the Lease Year received by the Stadium Authority, but shall not constitute Non- NFL Event Revenue.
(ii) The other one-half (1/2) of the Base Non-NFL Ticket Surcharge Proceeds will be deposited in the Stadium Authority Discretionary Fund, subject to the provisions of Paragraph 12.1.6 below , but shall not constitute Non-NFL Event Revenue.
(iii) All Additional Non-NFL Ticket Surcharge Proceeds
will be deposited in the “Public Safety Costs Reserve” (as defined below), and will not be included in the calculation of Excess Revenues in Article 14 below, and will not constitute Non- NFL Event Revenue. For purposes hereof, the “Public Safety Costs Reserve” means the segregated fund to be held in a separate depository account maintained by the Stadium Authority (or, following the Tenant Season Expansion Date, Tenant) at an Acceptable Bank for the purpose of holding, applying, investing and transferring the Public Safety Cost s Reserve (“Public Safety Cost s Reserve Account”).

The Public Safety Costs Reserve Account shall be separate from, and shall not be a part of, any other fund or account of the Stadium Authority, and the interest earned on the funds held in the Public Safety Costs Reserve Final Draft

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Account shall be retained as part of the Public Safety Costs Reserve, and shall not be Stadium Authority Revenue.

12.1.3 If, for any Lease Year on and after Lease Year 24/25 , there are Credited Public Safety Costs included among the Permitted Credits Carry-forward, the Stadium Authority will pay to Tenant from the Public Safety Costs Reserve an amount equal to the lesser of (1) the amount of such Credited Public Safety Costs included among the Permitted Credits Carry-forward for such Lease Year or (2) the balance of the Public Safety Costs Reserve as of the end of such Lease Year (which, for this purpose and for purposes of Paragraphs 12.1.4 and 12.1.5 below, includes the amount of Additional Non- NFL Ticket Surcharge Proceeds for such Lease Year, whether or not such funds have been actually deposited in the Public Safety Costs Reserve as of the end of such Lease Year).

12.1.4 If, after the payment to Tenant set forth in Paragraph 12.1.3 relating to Credited Public Safety Costs included among the Permitted Credits Carry -forward for a particular Lease Year , there is a remaining balance in the Public Safety Costs Reserve, then such remaining balance shall be utilized as follows:

If the amount of Public Safety Costs, including Public Safety Capital Expenditures (whether funded from the Stadium Capital Expenditure Reserve or otherwise), attributable to NFL Games (which shall, in the case of Public Safety Capital Expenditures, include only the amortization thereof applicable to such Lease Year) exceed the Public Safety Costs Threshold applicable to such Lease Year, then, subject to the provisions of Paragraph 7.5.5 above and, except to the extent such excess is paid by the Stadium Authority out of the Stadium Authority Discretionary Fund, or paid from Net Hotel CFD Revenue pursuant to Paragraph 12.5 below, or, in the case of a League Event, paid by third parties, such as the "event host committee", the Stadium Authority will pay to Tenant from the remaining balance of the Public Safety Costs Reserve as of the end of such Lease Year an amount equal to the lesser of (1) the amount of such excess for such Lease Year or (2) the amount of such remaining balance of the Public Safety Costs Reserve.

If the balance of the Public Safety Costs Reserve as of the end of any Lease Year is not sufficient to pay Tenant (a) the full amount of Credited Public Safety Costs included among the Permitted Credits Carry- forward for such Lease Year pursuant to Paragraph 12.1.3 above and (b) the amount of Public Safety Costs above the Public Safety Costs Threshold that have not been reimbursed out of the Stadium Authority Discretionary Fund, the Net Hotel CFD Revenue or by third parties , pursuant to this Final Draft

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Paragraph 12.1.4, the Rent reduction terms and conditions as fully set forth in the last two (2) sentences of Paragraph 7.5.3(a) above shall apply.

12.1.5 If, after the Stadium Authority ’s payments to Tenant pursuant to Paragraphs 12.1.3 and 12.1.4 above for any Lease Year, there remains a balance in the Public Safety Costs Reserve, the Stadium Authority shall hold such balance in the Public Safety Costs Reserve to cover any Credited Public Safety Cost s in subsequent Lease Year s (including any Credited Public Safety Cost s that may be included in Permitted Credits Carry-forward in subsequent Lease Years); provided, however, that, if, after the Stadium Authority’s payment to Tenant pursuant to Paragraphs 12.1.3 and 12.1.4 above for any Lease Year, the balance in the Public Safety Costs Reserve exceeds Two Million Dollars ($2,000,000) (the “ Excess PSC Reserve Funds”), Tenant and the Stadium Authority shall meet and confer in good faith to mutually determine how the Excess PSC Reserve Funds shall be utilized. If Tenant and the Stadium Authority do not agree on the use of such Excess PSC Reserve Funds within one hundred eighty (180) days after Stadium Authority makes the payment (s) to Tenant pursuant to Paragraphs 12.1.3 and 12.1.4 above , the Stadium Authority shall, in addition to the amounts described in Paragraph 10.2 above, deposit, or cause to be deposited, the Excess PSC Reserve Funds into the Stadium Capital Expenditure Reserve. Upon the Lease Expiration Date or any earlier termination of this Lease, the Stadium Authority shall be entitled to retain any then-remaining Public Safety Costs Reserve and the same shall constitute Stadium Authority Revenue.

12.1.6 In the event that the Unallocated Amount (as defined below in this Paragraph) of the Stadium Authority Discretionary Fund at any time exceeds One Million Dollars ($1,000,000.00), then, in consultation with the Stadium Manager, the Stadium Authority will de termine if adequate provision has been made, such as through a sinking fund, for replacement of and upgrades to capital improvements contemplated under the Public Safety Plan; and, if not, the Stadium Authority will reserve funds in the Stadium Authority Discretionary Fund for such purpose. If the remaining balance in the Stadium Authority Discretionary Fund still exceeds One Million Dollars ($1,000,000.00) after adequate provision has been made for replacement of and upgrades to capital improvements contemplated under the Public Safety Plan, then up to one -half (1/2) of such excess may, upon at least twenty (20) days ’ prior notice to Tenant, be transferred in the discretion of the Stadium Authority from the Stadium Authority Discretionary Fund to the City’s General Fund, in which event an equal amount to that transferred to the City ’s General Fund will be transferred from the Stadium Authority Discretionary Fund to the Stadium Authority’s operating fund and will be included in Stadium Authority Revenue in the Lease Year transferred. The amount so included in Stadium Authority Final Draft

9 20868730.1
Revenue will be available to pay Stadium Authority Expenses. As used herein, the “Unallocated Amount” of the Stadium Authority Discretionary Fund means, from time to time during the Term, the portion of the Stadium Authority Discretionary Fund, if any, that is not then allocated to pay the costs of a Scheduled Civic Event or other Stadium Authority Discretionary Expenses included in the then-approved Annual Stadium Authority Budget or for Emergency expenses.”

7. City of Santa Clara Senior and Youth Program Fee . Effective as of the commencement of Lease Year 24/25, the City of Santa Clara Senior and Youth Program Fee referenced in Paragraph 12.2 of the Existing Stadium Lease shall be increased to forty cents ($0.40) per Ticket, up to a maximum amount of Three Hundred Thousand Dollars ($300,000.00) per Lease Year. Effective as of the commencement of Lease Year 34/35 and every ten (10) Lease Years thereafter, (a) the City of Santa Clara Senior and Youth Program Fee shall be increased by five cents ($0.05) and (b) the maximum amount of the City of Santa Clara Senior and Youth Program Fee per Lease Year shall be increased by an additional Fifty Thousand Dollars ($50,000.00).

8. Use of Excess Revenues . Effective as of the commencement of Lease Year 24/25, Paragraph 14.7 and Paragraph 14.8 of the Existing Stadium Lease are deleted and replaced in their entirety with the following paragraphs:
“14.7 Renovation/Demolition Reserve. Seventh, if, as of the end of the particular Lease Year, the balance of the Renovation/Demolition Reserve is less than Seventy Million Dollars ($70,000,000.00) ( the “Required Renovation/Demolition Reserve Amount”) (as defined below) for such Lease Year (the amount of any such deficiency for a particular Lease Year is herein referred to as the “Renovation/Demolition Reserve Deficiency”), then the Stadium Authority shall, to the extent there remain any Excess Revenues aft er the distributions required pursuant to Paragraphs 14.1 through Paragraph 14.6, disburse such Excess Revenues as follows (the “Renovation/Demolition Reserve Distribution”):

14.7.1 If, as of the end of the particular Lease Year, the Public Safety Costs – 2024 Outstanding Balance has not been fully reimbursed to Tenant, the Stadium Authority shall disburse such Excess Revenues as follows:
(a) The Stadium Authority shall transfer to the
Renovation/Demolition Reserve an amount equal to the lesser of ( i) fifty percent (50%) of the remaining Excess Revenues, or ( ii) the then applicable Renovation/Demolition Reserve Deficiency;
(b) The Stadium Authority shall reimburse Tenant the lesser of the following (for any applicable Lease Year, the “PSC 2024 Balance Reimbursement”): ( i) fifty percent (50%) of the remaining Excess Revenues (i.e., after the transfer of Excess Revenues to the Renovation/Demolition Reserve Final Draft

10 20868730.1
by the Stadium Authority pursuant to clause ( a) above), or (ii) the then remaining unreimbursed portion of the Public Safety Costs – 2024 Outstanding Balance; and (c) The Stadium Authority shall have the right to use the remaining amount of Excess Revenues (i.e., after the transfer of Excess Revenues to the Renovation/Demolition Reserve by the Stadium Authority pursuant to clause (a) above , and the reimbursement of Tenant pursuant to clause ( b) above ) as provided in Paragraph 14.8 below.

14.7.2 If, as of the end of the particular Lease Year, the Public Safety Costs – 2024 Outstanding Balance has been fully reimbursed to Tenant, the Stadium Authority shall disburse such Excess Revenues as follows:
(a) The Stadium Authority shall transfer to the
Renovation/Demolition Reserve an amount equal to the lesser of ( i) fifty percent (50%) of the Excess Revenues, or ( ii) the then applicable Renovation/Demolition Reserve Deficiency; and
(b) The Stadium Authority shall have the right to use the remaining amount of Excess Revenues ( i.e., after the transfer of any Excess Revenues to the Renovation/Demolition Reserve by the Stadium Authority pursuant to clause (a) above) as provided in Paragraph 14.8 below.

14.8 Additional Disbursements . After the distribution of Excess Revenues pursuant to Paragraph 14.1 through Paragraph 14.7, the Stadium Authority shall have the right, subject to any contrary covenants made by the Stadium Authority in connection with the Permitted Landlord Financing, to use the remaining Excess Revenues in such Lease Year, if any, to pay Stadium Authority Discretionary Expenses or for any other purposes, including the distribution of such Excess Revenues to the constituent partners of the Stadium Authority, including to the City’s general fund.

For illustrative purposes only, if, after the distributions of Excess Revenues pursuant to Paragraphs 14.1 through 14.6 above for a particular Lease Year, there remain Excess Revenues of $3,000,000, the then remaining unreimbursed portion of the Public Safety Costs – 2024 Outstanding Balance is $2,000,000 and the balance of the Renovation/Demolition Reserve is $67,000,000, then the following shall apply: (a) pursuant to Paragraph 14.7.1(a), the Stadium Authority shall transfer to the Renovation/Demolition Reserve an amount equal to $1,500,000 (i.e., 50% of the remaining Excess Revenues after the distributions pursuant to Paragraphs 14.1 through 14.6) ; (b) pursuant to Paragraph 14.7.1(b), the Stadium Authority shall reimburse Tenant $750,000 towards the then remaining Public Safety Costs – 2024 Outstanding Balance (i.e., 50% of the remaining Excess Revenues after the transfer to the Renovation/Demolition Reserve pursuant to clause (a) above); and (c) pursuant to Paragraph 14.7.1(c), the Stadium Authority Final Draft

11 20868730.1
shall have the right to use the remaining amount of Excess Revenues equal to $750,000 as provided in Paragraph 14.8 above.

If, however (again for illustrative purposes only), after the distributions of Excess Revenues pursuant to Paragraphs 14.1 through 14.6 above for a particular Lease Year, there remain Excess Revenues of $3,000,000, the Public Safety Costs – 2024 Outstanding Balance has been fully reimbursed to Tenant, and the balance of the Renovation/Demolition Reserve is $67,000,000, then the following shall apply: (a) pursuant to Paragraph 14.7.2(a), the Stadium Authority shall transfer $1,500,000 (i.e., 50% of the remaining Excess Revenues after the distributions pursuant to Paragraphs 14.1 through 14.6) to the Renovation/Demolition Reserve; and (b) pursuant to Paragraph 14.7.2(b), the Stadium Authority shall have the right to use the remaining amount of Excess Revenues equal to $1,500,000 as provided in Paragraph 14.8 above.”

9. Ratification. Except as modified by this First Amendment , all of the terms, conditions and provisions of the Existing Stadium Lease shall remain in full force and effect and are hereby ratified and confirmed.

10. Counterparts. This First Amendment may be executed in counterparts, and each counterpart shall have the same force and effect as an original and shall constitute a binding agreement on the part of each of the undersigned. A facsimile or scanned (.pdf or .tiff file or equivalent) execution, including digital and electronic signatures, shall be deemed good and valid acceptance of this First Amendment and shall be reasonably relied upon by all parties.

Photocopies, PDFs, or faxed copies of original signature pages shall have the same force and effect as original signature pages.
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IN WITNESS WHEREOF, the Landlord and Tenant have entered into this First Amendment to Amended and Restated Stadium Lease Agreement as of the day and year first written above.

LANDLORD:

SANTA CLARA STADIUM AUTHORITY,
a joint exercise of powers entity,
created through Government Code Sections 6500 et seq.

APPROVED AS TO FORM:

GLEN R. GOOGINS
Stadium Authority Counsel

JŌVAN GROGAN
Executive Director
1500 Warburton Avenue
Santa Clara, CA 95050
Telephone: (408) 615-2210

[Signature continued on next page]
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[Signatures to First Amendment to Amended and Restated Stadium Lease Agreement continued from previous page]

TENANT:

FORTY NINERS SC STADIUM COMPANY LLC,
a Delaware limited liability company

By:

Name:

Title:
4949 Marie P. DeBartolo Way
Santa Clara, CA 95054

COVER SHEET

for

Settlement Agreement and Mutual Release
(Buffet and PSC Arbitration)

By and Between:

Forty Niners SC Stadium Company LLC and Forty Niners Stadium Management Company LLC (“Manager”) (collectively, the “Forty Niners”), on the one hand, and the Santa Clara Stadium Authority and the City of Santa Clara, on the other hand

Note from Agency Counsel/City Attorney:

The terms set forth in the attached Settlement Agreement were approved by the Agency Board/City Council in Closed Session on May 20, 2024, with authorization and direction to the Executive Director/City Manager to execute a formal Settlement Agreement reflecting such terms in a final form approved by Agency Counsel/City Attorney. The Board/City Council vote was 5-2 in favor of the settlement terms, with Mayor/Chair Gillmor and Council/Board Member Watanabe opposed.

4865-0071-5454.26 1

SETTLEMENT AGREEMENT AND MUTUAL RELEASE
(BUFFET AND PSC ARBITRATION)

This Settlement Agreement and Mutual Release (the “Settlement Agreement”) is entered into by and among, on the one hand Forty Niners SC Stadium Company LLC (“StadCo”) and Forty Niners Stadium Management Company LLC (“Manager”) (collectively, the “Forty Niners”), and on the other hand, the Santa Clara Stadium Authority (“SCSA”) and the City of Santa Clara (the “City”), with respect to certain provisions specifically related to the City, on the date of the last signature herein (the “Interim Effective Date”). Each of them is referred to herein as a “Party” and collectively as the “Parties.” All defined terms not defined herein have the meanings given to them in the Stadium Lease or the Ground Lease (as defined below).

RECITALS
A. WHEREAS, the City and SCSA entered into a Lease Agreement on or about March 28, 2012, and then subsequently entered into a First Amendment to Ground Lease on or about June 19, 2013 (together, the “Ground Lease”);
B. WHEREAS, StadCo and SCSA entered into the Stadium Lease Agreement on or about March 28, 2012, and then subsequently entered into the Amended and Restated Stadium Lease Agreement (the “Stadium Lease”) on or about June 19, 2013; C. WHEREAS, StadCo, SCSA, and Manager entered into the Stadium Management Agreement on or about March 28, 2012, and subsequently entered into four amendments of the Management Agreement, dated respectively November 13, 2012, May 9, 2013, June 19, 2013 and May 18, 2014 (collectively, the “Management Agreement”); D. WHEREAS, SCSA and StadCo entered into the Stadium Operations Agreement on or about August 18, 2014 (the “Operations Agreement”); E. WHEREAS, on June 14, 2019, StadCo filed with JAMS its initial claim against SCSA pertaining to public safety costs for certain NFL Games played in the Stadium, titled Forty Niners SC Stadium Company LLC v. Santa Clara Stadium Authority. On August 2, 2019, SCSA filed its initial response, which included breach and declaratory relief cross-claims pertaining to the public safety costs claims and Stadium Lease terms. StadCo and SCSA have amended these initial claims several times; which are collectively referred to herein as the “PSC Arbitration”;
F. WHEREAS, on September 4, 2020, StadCo filed with JAMS its initial claim against SCSA pertaining to reimbursement of expenses for buffets provided to certain Stadium Builder License (SBL) holders at certain NFL games, titled Forty Niners SC Stadium Company LLC v. Santa Clara Stadium Authority. On September 25, 2020, SCSA filed its initial response, which included cross-claims against StadCo and Manager concerning the buffet expenses, including claims in regards to buffet expenses in StadCo and SCSA’s prior and concluded arbitration to set StadCo’s Facility Rent under the Stadium Lease. StadCo, Manager and SCSA have amended these initial claims several times, which are collectively referred to herein as the “Buffet Arbitration”;
DocuSign Envelope ID: 72D0A46A-3522-4FAF-9203-47C631E8308D 4865-0071-5454.26 2

G. WHEREAS, on or about August 31, 2022, StadCo, Manager, and SCSA entered into a Stipulation to Stay Arbitration Matters, in order to try to resolve the Buffet Arbitration and PSC Arbitration (the “Stay”);
H. WHEREAS, the Parties hereto desire to compromise and settle, and to fully and finally resolve their claims and cross-claims in the Buffet Arbitration and the PSC Arbitration, and based upon this desire and the covenants, warranties and promises herein, the Parties mutually agree to the following settlement terms.

AGREEMENT
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby agree as follows:

1. RESOLUTION OF THE BUFFET ARBITRATION.
a. StadCo and SCSA agree, and SCSA acknowledges, that Paragraph 4.6.1 of the Stadium Lease obligates SCSA to reimburse invoices from StadCo for all costs and expenses incurred by StadCo in providing any complimentary buffets to certain SBL holders (the “Buffet Reimbursement”). StadCo agrees and acknowledges that SCSA’s obligations under Paragraph

4.6.1 for Lease Years 14/15 through 23/24 are deemed satisfied. b. StadCo represents and warrants that prior invoices sent to SCSA for the Buffet Reimbursement included only expenses attributable to the buffets provided to the “certain SBL holders” described in Paragraph 4.6.1 of the Stadium Lease. c. Starting in Lease Year 24/25, and until the termination or expiration of the Stadium Lease, SCSA shall pay StadCo $90,000 for each NFL Game at which complimentary buffets are provided to approximately 942 SBL holders in sections VIP 115, VIP 138, VIP 137 Rows 4, 5, and 6, and VIP 139 Rows 4, 5 and 6. NFL Games include any pre-, regular, and post- season NFL games played by the Team in the Stadium, in which the Team is designated as the home team by the NFL. However, NFL Games does not include League Events (as defined by Article 21 of the Stadium Lease), regardless of which team is designated by the NFL as the “home” team.
d. The $90,000 payment referenced in the subsection above shall grow at 3% per year, starting in Lease Year 25/26.
e. Buffet Accounting Request.
(i) No later than conclusion of any Lease Year, SCSA may require that StadCo account for the Buffet Reimbursement for the following Lease Year (i.e., SCSA may demand the accounting for Lease Year 28/29 no later than March 31, 2028) (“Buffet Accounting Request”). If such a Buffet Accounting Request is made, StadCo shall implement a system to track buffet expenses incurred for NFL Games for those SBL holders in the seats identified in subsection (c) above, and by March 15 of the Lease Year in which the tracking occurred, provide documents demonstrating the buffet expenses incurred for NFL Games for those SBL holders, and make available documents demonstrating that such expenses were appropriately allocated DocuSign Envelope ID: 72D0A46A-3522-4FAF-9203-47C631E8308D 4865-0071-5454.26 3

(i.e., if a Buffet Accounting Request is made no later than March 31, 2028, then the system will be implemented for the Lease Year 28/29 NFL Season, and the respective documents will be provided and made available no later than March 15, 2029). SCSA reserves the right to audit those provided documents, at SCSA’s own cost.
(ii) In any Lease Year in which StadCo is required to perform the accounting based on the Buffet Accounting Request, the Buffet Reimbursement payment for that Lease Year only will be increased by an additional 5% as an administrative fee (“Buffet Acct Fee”). This Buffet Acct Fee shall be in addition to the 3% annual increase. The Buffet Acct Fee is a one-time fee for any Lease Year a Buffet Accounting Request is made. The Buffet Acct Fee is not included as part of the 3% annual escalator per Section d above. (iii) If, at the conclusion of the accounting, it is determined that the actual expenses attributable to the provision of buffets to the SBL holders identified in subsection (c) for NFL Games were less than the Buffet Reimbursement paid by SCSA for that Lease Year, StadCo will reimburse the greater of either: (1) the Buffet Acct Fee or (2) the difference between the Buffet Reimbursement and the actual cost incurred in providing the buffets described in subsection (c), above.
f. StadCo and SCSA hereby confirm that they will take all necessary steps to cause StadCo’s and SCSA’s approval of an amendment to the Stadium Lease to reflect the terms set forth above. Other than the specific terms stated herein, all other terms and obligations in Paragraph 4.6.1 of the Stadium Lease are not changed and remain in effect. g. Manager’s March 21, 2022 draw under the Revolving Credit Agreement of $902,081.46 to reimburse StadCo for StadCo’s claimed amount of buffet expenses due from SCSA for Lease Year 21/22 will be treated as SCSA’s reimbursement of that amount. StadCo is hereby waiving any claim for the reimbursement of buffet expenses due from SCSA for Lease Years 22/23 and 23/24. StadCo hereby confirms that SCSA has no further obligation to reimburse StadCo for any buffet expenses from Lease Year 14/15 through 23/24, and that SCSA’s buffet expense reimbursement obligations is deemed fully satisfied for Lease Years 14/15 through 23/24.

2. ADJUSTMENT TO PUBLIC SAFETY COSTS THRESHOLD.
a. StadCo agrees to exercise its discretion pursuant to Paragraph 7.5.4(b) of the Lease, and to approve an increase to the Public Safety Costs Threshold. b. For Lease Year 24/25, the Public Safety Costs Threshold shall equal Three Hundred Sixty Thousand Dollars ($360,000) per Team Game. For each Lease Year thereafter, the Per Game Factor of the Public Safety Costs Threshold shall increase by four percent (4%), pursuant to Paragraph 7.5.3(b) of the Stadium Lease.

3. RESOLUTION OF CREDITED PUBLIC SAFETY COSTS FOR LEASE YEARS 17/18 THROUGH 23/24.
a. StadCo’s claim against SCSA for Credited Public Safety Costs for Lease Years 17/18 through 23/24 is in the approximate amount of $15,496,442 (“Pre-Existing Credited Public DocuSign Envelope ID: 72D0A46A-3522-4FAF-9203-47C631E8308D 4865-0071-5454.26 4

Safety Costs”). The Pre-Existing Credited Public Safety Costs includes a current estimate of $3,631,648 for Credited Public Safety Costs for the most recent Lease Year 23/24; as the Parties are continuing their efforts to calculate and confirm that final amount. To the extent that StadCo reimburses the City after the Interim Effective Date for Public Safety Costs for prior Lease Years, the Pre-Existing Credited Public Safety Costs will increase by the same amount. b. StadCo agrees to waive from its Pre-Existing Credited Public Safety Costs claim against SCSA the Credited Public Safety Costs due in Lease Year 17/18 in the amount of $663,969. StadCo also agrees to waive $9,296 of Credited Public Safety Costs due for Lease Year 18/19, with the remaining amounts for Lease Year 18/19 due as Permitted Credits Carry- forwards, which are not waived. Based on these two waivers, the current amount of all outstanding Credited Public Safety Costs through Lease Year 23/24, including all Permitted Credits Carry-forward, is approximately $14.8 million (“PSC 2024 Outstanding Balance”). The Pre-Existing Credited Public Safety Costs will no longer be considered Credited Public Safety Costs, or Permitted Credits Carry-forward. Rather, the PSC 2024 Outstanding Balance is hereby a SCSA contractual obligation arising from this Settlement Agreement, which SCSA shall owe to StadCo and pay from SCSA’s Litigation Contingency Reserve and Excess Revenues, as set forth below.
c. Payment of PSC 2024 Outstanding Balance.
i. Use of SCSA’s Litigation Contingency Reserve: Immediately after the Final Effective Date, SCSA will expeditiously take all steps to implement and perform the terms below, including effectuating SCSA budget amendment(s): First, SCSA agrees to liquidate its Litigation Contingency Reserve, which has a current balance of approximately $7.4 million and is estimated to increase to a balance of approximately $10.4 million in June 2024 based on Lease Year 23/24 final calculations and reconciliations. Any and all accrued interest from the Litigation Contingency Reserve balance has been and will be treated as Stadium Authority Revenue and transferred to the Authority Revenue Account identified in Section 3.13 of the Deposit and Disbursement Agreement. Second, from the remaining balance of that reserve, SCSA will:
(A) Pay to the City approximately $7.1 million for Performance-Based Rent for Lease Years 22/23 and 23/24. The calculation of this Performance-Based Rent payment takes into account approximately $735,000 of Performance-Based Rent Credits under Section

1.94(a) of the Lease (attributable to Fixed Ground Rent previously paid to the City in Lease Years 18/19-22/23), which funds shall be treated as Stadium Authority Revenue. In other words, from the remaining balance of the Litigation Contingency Reserve, approximately $7.1 million shall be paid to the City, and approximately $735,000 shall be retained by SCSA, transferred to the Authority Revenue Account identified in Section 3.13 of the Deposit and Disbursement Agreement and treated as Stadium Authority Revenue.
(B) Pay to StadCo the remaining balance of the Litigation Contingency Reserve as a partial payment of the PSC 2024 Outstanding Balance. ii. Use of SCSA’s Excess Revenues: The remaining balance of the PSC 2024 Outstanding Balance shall be paid to StadCo from SCSA’s Excess Revenues in future years on the terms set forth herein below. Accordingly, StadCo and SCSA agree to take all necessary DocuSign Envelope ID: 72D0A46A-3522-4FAF-9203-47C631E8308D 4865-0071-5454.26 5

steps to cause for StadCo’s and SCSA’s approval of an amendment to Article 14 of the Stadium Lease to provide for the following, for Lease Year 24/25 forward:
(A) Following the Final Effective Date, Excess Revenues shall be distributed according to Article 14 of the Stadium Lease, except for the distributions set forth in Paragraphs 14.7 and 14.8. For all Excess Revenues that would, under the current Stadium Lease, be deposited in the Renovation/Demolition Reserve Account described in Paragraphs 14.7 of the Stadium Lease (the “Reno/Demo Reserve”), the following order of deposits shall occur:
(1) Up to 50% of available Excess Revenues will be deposited into the Reno/Demo Reserve, until the limit currently stated in Paragraph 14.7 of the Stadium Lease is satisfied.
(2) Up to 50% of the remaining available Excess Revenues (after the deposit into the Reno/Demo Reserve set forth in section (1), above) will be transferred to StadCo, to repay the PSC 2024 Outstanding Balance, until that obligation is satisfied. (3) The remaining available Excess Revenues (after the deposits in sections (1) and (2), above) will be available for the Additional Disbursements in Paragraph 14.8 of the Stadium Lease.
(B) Once the PSC 2024 Outstanding Balance is paid in full, the following order of deposits shall occur:
(1) Up to 50% of available Excess Revenues will be deposited into the Reno/Demo Reserve, until the limit currently stated in Paragraph 14.7 of the Stadium Lease is satisfied.
(2) The remaining available Excess Revenues (after the deposits in section (1) above) will be available for the Additional Disbursements in Paragraph

14.8 of the Stadium Lease.

4. ADDITIONAL PUBLIC SAFETY PROVISIONS.
a. Permitted Credits Carry-Forward.
i. Expiration Date: SCSA and City agree to take all necessary steps to cause SCSA’s and City’s approval of an amendment to the Ground Lease to provide for the following intended effect: beginning in Lease Year 24/25 and forward, Permitted Credits Carry-forward shall expire after ten years, not five years (i.e., credits accrued as a result of public safety costs incurred during Lease Year 24/25 must be applied within the next ten succeeding Lease Years, by end of Lease Year 34/35).
ii. Facility Rent and Performance-Based Rent Credits: StadCo agrees to limit the amount of certain Rent credits potentially available to StadCo, which may increase the Performance-Based Rent paid to the City in those years in which the new limit is triggered, assuming such increase is not offset by other credits. Accordingly, StadCo and SCSA agree to take all necessary steps to cause an amendment to the Rent credit described in the second sentence of Paragraph 7.5.3(a) of the Stadium Lease, and, if necessary, SCSA and City agree to DocuSign Envelope ID: 72D0A46A-3522-4FAF-9203-47C631E8308D 4865-0071-5454.26 6

take all necessary steps to cause for SCSA’s and City’s approval an amendment to any related definitions and terms in Ground Lease, to provide for the following intended effect: beginning in Lease Year 24/25 and forward, the Rent payable by StadCo for any Lease Year shall be reduced by the lesser of the following (1) the amount of Credited Public Safety Costs for such Lease Year, (i) less the amount of any Credited Public Safety Costs for that Lease Year paid from the Public Safety Costs Reserve (as defined in this Settlement Agreement, below), plus (ii) any Credited Public Safety Costs included among the Permitted Credits Carry-forward for the particular Lease Year; or (2) twenty-five percent (25%) of the Net Income from Non-NFL Events for such Lease Year.
b. Public Safety Capital Expenditures.
i. NFL Share: SCSA and the City acknowledge and affirm the manner in which NFL Event Public Safety Costs Capital Expenditures are treated in the Stadium Lease, the Stadium Operations Agreement, and any other contracts which bear on those expenses.

Specifically, when the Stadium Capital Expenditure Reserve is used for public safety capital expenditures, StadCo need not reimburse the City for that expenditure (because those expenditures are not paid by the City, but out of the Stadium Capital Expenditure Reserve), but StadCo’s “fair share” of that expenditure, calculated pursuant to Section 3.2 of the Stadium Operations Agreement, is included when calculating whether (and by what amount) Public Safety Costs have exceeded the Public Safety Cost Threshold, and is included when calculating the amount of Credited Public Safety Costs for which StadCo is entitled to be reimbursed, or to receive a Rent credit.
ii. Non-NFL Share: StadCo and Manager acknowledge and affirm that the depreciation for Non-NFL Event Public Safety Capital Expenditures is treated as a non-cash charge against Non-NFL Event revenue for purposes of calculating Performance Based Rent, but Manager does not and should not charge the SCSA for the amortized amounts as actual cash Non-NFL Event expenses. In accordance with this acknowledgement, Manager agrees, within 20 business days of the Final Effective Date, to transfer to the SCSA the Non-NFL Event Public Safety Capital Expenditures that were charged as cash Non-NFL Event expenses in Lease Years 18/19 through 23/24.
c. Off-Site Parking Permit Fees: In consideration for the Settlement Agreement terms, SCSA agrees to waive its claims pertaining to the application of Off-Site Parking Permit Fees, and SCSA hereby acknowledges and accepts StadCo’s interpretation by which Off-Site Permit Parking Fees are treated in the Stadium Lease, Paragraph 7.5.3(a), and any other contracts which bear on those expenses. Specifically, offsite parking permit fees reduce the PSC reimbursement that StadCo pays to the City, but those fees do not reduce the Public Safety Cost total used in calculating whether (and by what amount) Public Safety Costs have exceeded the Public Safety Cost Threshold, and are included when calculating the amount of Credited Public Safety Costs for which StadCo is entitled to be reimbursed, or to receive a Rent credit. d. Overhead for Double-Badgers: The Parties acknowledge that there have been disputes concerning the rate of overhead that the City has included in Public Safety Costs.

Within 60 days after the Final Effective Date, the City agrees to engage, or re-engage, consultants with appropriate expertise in this matter to review the rate of overhead that should be charged on the As-Needed Per Diem Police Officer for NFL Games (who are permanently DocuSign Envelope ID: 72D0A46A-3522-4FAF-9203-47C631E8308D 4865-0071-5454.26 7

employed by other agencies, but are temporary employees of the City for NFL Games), and the City further agrees to move forward in good faith with this analysis. To the extent that the City determines that it is appropriate to reduce the rate of overhead charged on such employees, this reduction will become effective as of Lease Year 24/25. The City further agrees to consult with StadCo regarding scoping of the consultants’ work, and their final analyses. StadCo hereby confirms that the City and its consultants have sole and final discretion in regards to the consultant’s final analyses and City’s charging of these overhead rates. Nothing in this subsection is intended to diminish any of StadCo’s pre-existing rights, including, for example, that Public Safety Costs can include only the “actual and reasonable costs of police, traffic control, fire, emergency services and similar services provided by the City for NFL Games in the Stadium in accordance with the Public Safety Plan, including a fair share of Public Safety Capital Expenditures attributable to NFL Games.”
e. Public Safety Plan: As provided under Stadium Lease Paragraph 7.5.1, SCSA acknowledges that it has coordinated with the City regarding the traffic management, security and public safety at all Stadium Authority Events, and StadCo acknowledges that it has coordinated with the City regarding the traffic management, security and public safety at all Tenant Events. The Parties confirm that they will continue to engage in such coordination in order to provide appropriate levels of such services in accordance with the Stadium Operations Agreement and, for NFL Games, the Public Safety Plan.
f. Cancellation Pay: StadCo agrees not to object to the City’s inclusion of reasonable cancellation pay for public safety personnel in the Public Safety Costs that are reimbursable pursuant to Stadium Lease Paragraph 7.5.2, and subject to the Public Safety Cost Threshold.

5. OTHER SETTLEMENT TERMS AND MATTERS.
a. Non-NFL Ticket Surcharge: StadCo, Manager and SCSA agree to amend the Stadium Lease and any other contracts that bear on these terms, to provide the following intended effect:
i. The Non-NFL Event Ticket Surcharge described in Paragraph 12.1 of the Stadium Lease shall be increased from $4 to $8, and shall be increased by an additional $1 every four Lease Years thereafter (i.e., as of Lease Year 29/30, the Non-NFL Event Ticket Surcharge will be $9). This increased surcharge shall only apply to events booked after the Final Effective Date. For purposes of this provision, “booked” means the time at which economic terms are agreed upon and accepted by Manager and the promoter, and any other parties whose consent is needed to book the event, regardless of whether a contract has been executed or not. ii. The additional revenues generated by the above-described increase in the Non-NFL Event Ticket Surcharge (“Additional NNE Surcharge Revenues”) will be deposited into a newly created SCSA account managed by SCSA (the “Public Safety Costs Reserve”). The Public Safety Costs Reserve shall be used to reimburse StadCo for Credited Public Safety Costs generated on and after Lease Year 24/25. (For clarity, this Public Safety Costs Reserves will not be used to pay StadCo the PSC 2024 Outstanding Balance, which shall be repaid pursuant to Section 3 above.)
DocuSign Envelope ID: 72D0A46A-3522-4FAF-9203-47C631E8308D 4865-0071-5454.26 8

iii. To the extent that the increased surcharge generates revenue above that necessary to reimburse StadCo for the then-current Lease Year’s Credited Public Safety Costs, such revenue, including interest accrued on such revenue, shall be retained in the Public Safety Costs Reserve. If, by the end of the following Lease Year, there is more than $2 million in the Public Safety Costs Reserve, StadCo and SCSA will meet and confer in good faith to mutually determine how those excess funds will be used. In the event that StadCo and SCSA do not reach an agreement by the following July 1, the funds in excess of the $2 million reserve will be transferred to the Stadium Capital Expenditure reserve, described in Paragraph 14.3 of the Stadium Lease. Upon the termination or expiration of the Stadium Lease, any and all amounts remaining in this Public Safety Costs Reserve will be treated as Stadium Authority Revenue. iv. Manager is permitted to increase the Non-NFL Event Ticket surcharge beyond the minimum amounts set forth above, if it determines, pursuant to the authority granted to it in Article 3 of the Management Agreement, that increasing the surcharge will be in compliance with Section 2.9 of the Management Agreement. Additional revenues generated by increasing the Non-NFL Event Ticket surcharge beyond the minimum amounts shall be Additional NNE Surcharge Revenues.
b. Senior / Youth Fee: StadCo and SCSA hereby agree to amend the Stadium Lease and any other contract that bear on these terms, to provide the following intended effect: the amount of the City of Santa Clara Senior and Youth Program Fee, as set forth in Paragraph 12.2 of the Stadium Lease, shall be increased from $0.35 to $0.40 starting in Lease Year 24/25 and shall be further increased by $0.05 every ten Lease Years (i.e., the fee will be $0.45 as of Lease Year 34/35 and $0.50 as of Lease Year 44/45). The “maximum amount” per Lease Year, set forth in Paragraph 12.2 of the Stadium Lease, shall be increased by $50,000 to $300,000 in Lease Years 24/25, and will be increased by another $50,000 every ten years (i.e., the “maximum amount” will be $350,000 in Lease Year 34/35 and $400,000 in Lease Year 44/45). c. Declaratory Relief Decision: After the Final Effective Date, StadCo, Manager and SCSA will make good faith, expeditious efforts to obtain a final binding decision in the PSC Arbitration (“Arbitration Decision”). StadCo, Manager and SCSA agree that the Arbitration Decision will not be confidential and may be made public. StadCo, Manager and SCSA also agree that obtaining the Arbitration Decision is not a condition precedent to the effectiveness of the Settlement Agreement, nor to the effectiveness of the Final Effective Date. Notwithstanding any of the foregoing, StadCo, Manager, and SCSA each reserve the sole discretion not to proceed with obtaining the Arbitration Decision. If any of them opt not to proceed, the PSC Arbitration shall be dismissed with prejudice, with each Party to bear its own fees and costs, within five (5) business days of a notice not to proceed. Upon such dismissal, the Stay will be terminated and have no further effect.

6. STADIUM LEASE AND CONTRACT AMENDMENTS, APPROVALS, AND CONDITIONS OF DISMISSAL OF ARBITRATION ACTIONS.
a. The implementation of this Settlement Agreement will require amendments to the Stadium Lease and the Ground Lease, and possibly to certain other contracts. The Parties have made a good faith effort to identify the specific contracts and provisions that will need to be amended in order to implement this Settlement Agreement, but they acknowledge that it is possible that contracts other than those specifically identified in this Settlement Agreement will DocuSign Envelope ID: 72D0A46A-3522-4FAF-9203-47C631E8308D 4865-0071-5454.26 9

need to be amended. Accordingly, the Parties agree to take all necessary steps to prepare and cause for the approval all contractual amendments that materially conform to this Settlement Agreement in order to implement its provisions. However, except as strictly required to be amended in order to implement the terms and conditions of this agreement, this Settlement Agreement does not obligate the Parties to agree to amend any other terms of the Stadium Lease, the Ground Lease, or any other contract.
b. Such contract amendments require the consent of the National Football League (the “NFL”) and Stadium Lenders (together with the NFL, the “Approving Entities”). The Parties agree to expeditiously seek such consents, and to cooperate in good faith with each other in those efforts.
c. The Stay shall remain in effect while the Parties are seeking said consents. For clarity, the Parties agree that any requirement for StadCo or Manager to submit any claims pursuant to Government Code Sections 810 et seq., or to file new or amended arbitration claims, for any existing or future claims related to buffet or public safety obligations are and have been stayed, subject to the terms of the Stay.
d. The Stay shall not be terminable, other than by mutual consent of the Parties, unless and until one or more of the Approving Entities formally and finally declines to approve the amendments necessary to implement this Settlement Agreement. For purposes of this Section 6, including all subsections thereof, an Approving Entity shall not be deemed to have formally and finally declined to approve any of said amendments by proposing a modification of any such amendment unless, after considering such proposed modification in good faith, the Parties decline to accept such proposed modification.
e. SCSA and the City agree to take all actions necessary to delegate authority to the City Manager and to the Executive Director of the SCSA to negotiate the amendments necessary to implement this Settlement Agreement, on behalf of SCSA and the City, for submission to SCSA Board and City Council for final approval and execution. Similarly, SCSA and the City agree to take all actions necessary to perform its obligations under this Settlement Agreement, on behalf of SCSA and the City, including the preparation and submission of any budget amendments to SCSA Board and City Council for final approval. f. In the event that any of the Approving Parties fully and finally refuses to approve the contractual amendments necessary to implement this Settlement Agreement, or the Parties do not provide final approval and execution of the contractual amendments necessary to implement this Settlement Agreement, then all provisions of this Settlement Agreement as of that date shall be of no force or effect, and this Settlement Agreement and all negotiations and proceedings related thereto shall be deemed to be without prejudice to the rights of any and all Parties, who shall to the extent possible be restored to their respective positions as of the date of this Settlement Agreement.
g. The Parties agree that while they pursue these approvals, and unless and until those approvals are fully and finally rejected by any of the Approving Entities or the Parties do not provide final approval and execution of the amendments necessary to implement this Settlement Agreement, none of them shall take actions inconsistent with this Settlement Agreement, or that would make it impossible or infeasible to implement the terms of the DocuSign Envelope ID: 72D0A46A-3522-4FAF-9203-47C631E8308D 4865-0071-5454.26 10

Settlement Agreement, or that would make it impossible or infeasible to restore any of the Parties to their respective positions as of the Interim Effective Date. For example, SCSA agrees that it shall not withdraw funds from the Litigation Contingency Reserve. h. Assuming the Approving Entities provide their full and final approvals of the contractual amendments, the date upon which the contractual amendments necessary to implement the terms of this Settlement Agreement have been fully and finally approved by and executed by SCSA, the City, StadCo and Manager shall be the “Final Effective Date” of this Settlement Agreement.
i. Within five (5) business days after the Final Effective Date, counsel for StadCo, Manager and SCSA will execute, file and serve a joint dismissal with prejudice of the Buffet Arbitration (with JAMS), with each Party to bear its own costs and fees. j. The Parties hereby confirm that the City is not a party to the Stadium Lease, Management Agreement, and Stadium Operations Agreement, and the Settlement Agreement terms and obligations pertaining to the City are limited to those terms and obligations whereby the City has an underlying contractual right or obligation within the agreements described above.

7. CONDITIONAL MUTUAL RELEASE TERMS. The following release terms are subject to and on condition of the Final Effective Date:
a. Subject to and on condition of the Final Effective Date, SCSA and the City fully and forever release StadCo, Manager, and their respective present and former agents, members, employees, employers, officers, directors, shareholders, direct and indirect parents, related or affiliated corporations and business entities, partners, joint venturers, heirs, administrators, executors, representatives, predecessors, successors, transferees, licensees, assigns, insurers, sureties, and attorneys, and all those claiming by, through, under or in concert with any of them, either in their representative or individual capacities (collectively the “Forty Niners Releasees”) from any and all actual or potential claims, duties, obligations, or causes of action arising from or relating to the Stadium Lease, the Management Agreement, the Ground Lease, the Revolving Credit Agreement, the Disposition and Development Agreement, and any other agreements or obligations arising from or related to the development, management, or operation of the Stadium, arising or accruing at any time prior to the Interim Effective Date, whether presently known or unknown, suspected or unsuspected, that the releasing party may possess, including but not limited to all claims and causes of action that have been or could have been asserted in the PSC Arbitration and the Buffet Arbitration.
b. Subject to and on condition of the Final Effective Date, StadCo and Manager fully and forever release SCSA and the City, and their present and former agents, members, employees, employers, officers, directors, shareholders, direct and indirect parents, related or affiliated corporations and business entities, partners, joint venturers, heirs, administrators, executors, representatives, predecessors, successors, transferees, licensees, assigns, insurers, sureties, and attorneys, and all those claiming by, through, under or in concert with any of them, either in their representative or individual capacities (the “SCSA/City Releasees,” and collectively with the Forty Niners Releasees, the “Releasees”) from any and all actual or potential claims, duties, obligations, or causes of action arising from or relating to the Stadium Lease, the Management Agreement, the Ground Lease, the Revolving Credit Agreement, the DocuSign Envelope ID: 72D0A46A-3522-4FAF-9203-47C631E8308D 4865-0071-5454.26 11

Disposition and Development Agreement, and any other agreements or obligations arising from or related to the development, management, or operation of the Stadium, arising or accruing at any time prior to the Interim Effective Date, whether presently known or unknown, suspected or unsuspected, that the releasing party may possess, including but not limited to all claims and causes of action that have been or could have been asserted in the PSC Arbitration and the Buffet Arbitration.
c. WAIVER OF CALIFORNIA CIVIL CODE SECTION 1542: This Settlement Agreement is intended to be a full and unconditional settlement and compromise of all claims released in Sections 7(a) and 7(b) of this Settlement Agreement. StadCo, Manager, SCSA, and the City expressly agree that, to the extent this Settlement Agreement is interpreted, enforced, governed or applied under California law, they expressly waive and relinquish any and all rights conferred upon them by California Civil Code Section 1542 and expressly consent that this release shall be given full force and effect according to its express terms and provisions, including those relating to unknown and unsuspected claims, demands, and causes of action, if any, as well as those relating to any claims hereinabove specified. California Code Section 1542 provides:
“A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party.” Having been so apprised, the Parties nevertheless hereby voluntarily: (a) elect to and do waive the rights described in California Civil Code Section 1542; (b) elect to accept and to assume all risks for claims that now exist in their favor that are released under this Settlement Agreement, including without limitation all claims not known or not expected at the time of the execution of this Settlement Agreement; and (c) elect to accept and to assume the risk of the facts turning out to be different, and agree that the instant settlement shall be in all respects effective and not subject to termination, rescission or modification by reason of any such change in facts. d. Limitations on Mutual Releases: Notwithstanding the foregoing, the Parties agree that the releases and waivers provided in sections 7(a), 7(b) and 7(c) above shall not apply to:
i. Any increase to Pre-Existing Credited Public Safety Costs to the extent that StadCo reimburses the City after the Interim Effective Date for Public Safety Costs for prior Lease Years, as provided in Section 3(a) above;
ii. StadCo and SCSA’s final calculation of the Pre-Existing Credited Public Safety Costs for Lease Year 23/24;
iii. Payment rights, obligations and terms in regards to Insurance Premiums for Law Enforcement Liability coverage and Accidental Death & Dismemberment (AD&D) Liability coverage, including but not limited to related claims for refunds, reimbursements, reallocations or amounts due by and between StadCo, Manager and SCSA from and after Lease Year 14/15 (except that this carve-out shall not be deemed to revive any claims that are already time-barred);
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iv. SCSA’s rights to confirm and dispute SSE charges and NNE revenue and charges for Lease Year 22/23 and 23/24, including but not limited to changes based on improper allocation, calculation, lack of support, or failure to comply with the Parties’ contracts or California law;
v. Manager’s calculation, documentary support, and payments of non-NFL events ticket surcharge to SCSA for Lease Year 23/24;
vi. The FIFA World Cup 2026 events;
vii. Indemnification and defense obligations pertaining to any third party claims; and
viii. The rights and obligations of this Settlement Agreement.

Except for these exceptions, which shall be strictly construed, the Parties waive all rights pursuant to Section 1542.

8. EACH PARTY TO BEAR ITS OWN FEES AND COSTS. Each Party shall bear all of its own costs, including attorneys’ fees and any other fees, incurred in connection with the Buffet Arbitration, and the PSC Arbitration, pre-litigation activities relating to those matters, and the negotiation and implementation of this Settlement Agreement. Notwithstanding this provision, in the event any action or motion is filed to enforce any of the provisions of this Settlement Agreement, including without limitation, to enforce the releases specified herein, or to interpret any provision of this Settlement Agreement, the prevailing Party in any such action or motion shall be entitled to its actual attorneys’ fees and costs incurred in connection with any such action or motion, to be determined by the court and assessed as part of the costs therein.

10. DISPUTES ARISING FROM THIS AGREEMENT. The Parties agree that any action to interpret or enforce this Settlement Agreement will be resolved pursuant to the procedures set forth in Exhibit L to the Stadium Lease. The City’s agreement to follow and be bound by the Exhibit L of the Stadium Lease dispute resolution procedures is limited solely to actions to interpret or enforce this Settlement Agreement, and this agreement by the City does not constitute any agreement to be a party to the Stadium Lease or to be bound by its Exhibit L terms in any other dispute.

11. SEVERABILITY. Should any provision of this Settlement Agreement be held by a court of law to be illegal, invalid or unenforceable, each of the Parties reserve the right to void the entire Settlement Agreement based on a reasonable determination that such a ruling affects or impairs a material term of this Settlement Agreement. Otherwise, if any non-material provision of this Settlement Agreement is held by a court of law to be illegal, invalid or unenforceable, the legality, validity and enforceability of the remaining provisions of this Settlement Agreement shall not be affected or impaired thereby.

12. INTEGRATION. This Settlement Agreement represents the entire agreement and understanding between the Parties regarding any matters discussed herein, as well as the releases set forth herein, and supersedes any and all prior and contemporaneous discussions, representations or negotiations regarding settlement of the aforesaid claims.

DocuSign Envelope ID: 72D0A46A-3522-4FAF-9203-47C631E8308D 4865-0071-5454.26 13

13. GOVERNING LAW. This Settlement Agreement shall be governed by the substantive laws of the State of California, without reference to choice of law principles.

14. VOLUNTARY EXECUTION OF AGREEMENT. This Settlement Agreement is executed voluntarily by each of the Parties, without any duress or undue influence on the part or behalf of any other Party, and with the full understanding and intent of releasing the claims on the terms as set forth herein. Each of the Parties acknowledges that it has read and understands the terms of this Settlement Agreement, has been provided a reasonable amount of time to consider whether to enter into this Settlement Agreement, has had the opportunity to consult with legal counsel with respect to the terms of this Settlement Agreement, and understands and acknowledges the terms and consequences of this Settlement Agreement and each of the terms thereof.

15. SUCCESSORS. This Settlement Agreement shall be binding on, and inure to the benefit of, the successors and assigns of any of the Parties hereto and, furthermore, shall inure to the benefit of the successors and assigns of any person or entity that is an intended third-party beneficiary of this Settlement Agreement.

16. NO PRESUMPTION. Each of the Parties had an opportunity to draft, review and edit the language of this Settlement Agreement, and no presumption for or against any of the Parties arising out of drafting all or any part of this Settlement Agreement will be applied in any action or proceeding arising out of, relating to, connected to, or involving this Settlement Agreement.

17. AUTHORITY. Each person executing this Settlement Agreement on behalf of a Party hereby warrants that he or she has full authority to do so.

18. NO PRIOR ASSIGNMENT. Each of the Parties represents and warrants that it is the sole and lawful owner of all rights, title and interest in and to all released matters, claims and demands referred to herein, and further represents and warrants that there has been no assignment or other transfer of any interest in any such matters, claims or demands which it may have against the other Parties to this Settlement Agreement. In the event that any of the Parties shall have assigned or transferred, or purported to assign or to transfer, any claim or other matter, that such Party shall indemnify, defend, and hold harmless the other Parties from and against any loss, cost, claim or expense (including, but not limited to, all costs related to the defense of any action, including reasonable attorneys’ fees) based upon, arising out of, or occurring as a result of any such claim, assignment, or transfer.

19. COMPROMISE. This Settlement Agreement, and the documents executed pursuant to it, are the result of a compromise between and among the Parties and shall never at any time or for any purpose be considered an admission of liability, fault or responsibility of any of the Parties to the other with respect to any of the claims or defenses that the Parties have, or could have, asserted against each other in the claims being resolved in this litigation. It is expressly acknowledged and understood by the Parties that all Parties continue to deny all liability, fault or responsibility for the matters being settled by this Settlement Agreement.

20. MODIFICATION AND WAIVER. No amendment, modification or waiver of the provisions of this Settlement Agreement shall be valid and enforceable unless such amendment, modification or waiver is in writing and signed by all the Parties.

DocuSign Envelope ID: 72D0A46A-3522-4FAF-9203-47C631E8308D 4865-0071-5454.26 14

21. COUNTERPARTS. This Settlement Agreement may be executed in counterparts, and each counterpart shall have the same force and effect as an original and shall constitute a binding settlement agreement on the part of each of the undersigned. A facsimile or scanned (.pdf or .tiff file or equivalent) execution, including digital and electronic signatures, shall be deemed good and valid acceptance of this Settlement Agreement and shall be reasonably relied upon by all Parties. Photocopies, PDFs, or faxed copies of original signature pages shall have the same force and effect as original signature pages.

IN WITNESS WHEREOF, the Parties have executed this Settlement Agreement as of the last date set forth below, which constitutes the Interim Effective Date.

DocuSign Envelope ID: 72D0A46A-3522-4FAF-9203-47C631E8308D 4865-0071-5454.26 15

Dated: May 23, 2024 CITY OF SANTA CLARA

By:

JŌVAN D. GROGAN
City Manager for City of Santa Clara

Dated: May 23, 2024 SANTA CLARA STADIUM AUTHORITY

By:

JŌVAN D. GROGAN
Santa Clara Stadium Authority Executive Director

Dated: May 23, 2024 FORTY NINERS SC STADIUM COMPANY LLC, a Delaware limited liability company

By:

BRENT SCHOEB
Chief Revenue and Marketing Officer

Dated: May 23, 2024 FORTY NINERS STADIUM MANAGEMENT

COMPANY LLC,
a Delaware limited liability company

By:

FRANCINE HUGHES
Executive Vice President & General Manager

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APPROVAL AS TO FORM:

Dated: May 23, 2024 COBLENTZ PATCH DUFFY & BASS LLP

By:

CHARMAINE YU
Attorneys for FORTY NINERS SC STADIUM COMPANY
LLC and FORTY NINERS STADIUM MANAGEMENT

COMPANY LLC

Dated: May 23, 2024

HANSON BRIDGETT LLP

By:

MOHAMMAD WALIZADEH
Attorneys for CITY OF SANTA CLARA and the SANTA

CLARA STADIUM AUTHORITY

Dated: May 23, 2024

By:

GLEN R. GOOGINS
Santa Clara Stadium Authority Counsel and City Attorney DocuSign Envelope ID: 72D0A46A-3522-4FAF-9203-47C631E8308D ~
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City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
24-549 Agenda Date: 5/28/2024

REPORT TO COUNCIL

SUBJECT
Action on an Initial Grant Funding Agreement with Forty Niners SC Stadium Company LLC to Provide $200,000 Annually in Grant Funding for an Initial Three Years to the Santa Clara Community and Santa Clara Organizations and Approve the Related Budget Amendments

COUNCIL PRIORITY
Enhance Community Engagement and Transparency

BACKGROUND
On May 9, 2013, the Santa Clara Stadium Authority (Stadium Authority) and Levi Strauss & Co. (Levi’s®) entered into a Naming Rights Agreement. Under the 20-year agreement, Levi’s® provides an annual payment to the Stadium Authority in exchange for exclusive naming rights and branding at the Stadium.

On January 30, 2024, the Stadium Authority Board approved the following actions related to the Naming Rights Agreement:

1. Approve a First Amendment to the Naming Rights Agreement with Levi Strauss & Co. that will provide a 10-year extension and additional Naming Rights revenue to the Stadium Authority on the terms presented, in a final form approved by Authority Counsel;

2. Approve a Levi’s® Stadium Naming Rights Extension and Enhanced Signage Project Implementation Agreement with Forty Niners SC Stadium Company LLC (StadCo) to coordinate the Enhanced Sign Project and the share in the costs for the design, construction, and installation of the signage, and memorialize StadCo’s $4,000,000 charitable commitment over 20 years, on the terms presented, in a final form approved by Authority Counsel; and

3. Authorize the City Manager to negotiate and execute a grants agreement and take other actions as may be required to implement StadCo’s charitable commitment, in final form(s) approved by the City Attorney.

As a result, the Stadium Authority and Levi’s® entered into a First Amendment to Naming Rights Agreement that provided a 10-year extension of the Naming Rights Agreement, which will generate an additional $119,000,000 in revenue over the 10 years for the Stadium Authority. As part of the 10- year extension, Levi’s® required an enhancement of their existing Naming Rights signage (Enhanced Signage Project) by December 31, 2025 at no cost to Levi’s®. The Enhanced Signage Project involves the replacement of all four Naming Rights signs which includes the Suite Tower Marquee Sign, East Façade Marquee Sign, and two interior signs above the Stadium scoreboards.

Concurrently, the Stadium Authority and StadCo entered into the Levi’s® Stadium Naming Rights Extension and Enhanced Signage Project Implementation Agreement (Implementation Agreement) to City of Santa Clara Printed on 5/24/2024Page 1 of 5
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24-549 Agenda Date: 5/28/2024
address each party’s share in the cost for the design, construction and installation of the Enhanced Signage Project and to formalize StadCo’s commitment to contribute $200,000 annually for 20 years to non-profit organizations and community projects serving the City of Santa Clara community.

The City and StadCo have since engaged in subsequent discussions regarding the grants and require additional time to develop a long-term community grants process to distribute the grant funds.

In the interim, to avoid delay in distributing the grant funds, StadCo is prepared to make its annual $200,000 contribution to the Santa Clara community for the initial three years (Years 1-3).

The proposed Initial Grant Funding Agreement (Attachment 1) provides for the distribution of grant funds in the amount of $200,000 annually for Years 1-3 and a process to develop a program to distribute grant funds for the subsequent years during StadCo’s 20-year commitment term. While the City Council authorized the City Manager to negotiate and execute a grants agreement and take other actions that may be required to implement StadCo’s charitable commitment as part of its January 30, 2024 action, the Initial Funding Agreement itself does not reflect the 20-year term that was contemplated as part of the January 30, 2024 agenda item. As such, the Initial Funding Agreement and budget amendments required to implement the agreement are being presented to Council for its consideration and approval.

DISCUSSION
The Initial Grant Funding Agreement sets forth key terms for Years 1-3 of StadCo’s commitment to provide grants and/or donations in the amount of $200,000 annually for 20 years, through its related companies and/or charitable affiliates, to benefit non-profit organizations and community projects directly serving or impacting the Santa Clara community and outlines a process for developing a program for the distribution of StadCo’s remaining commitment for Years 4-20, as summarized below.

Initial Grant Distribution for Years 1-3
The grant distribution for Years 1-3 will be as follows:

Year 1 (April 1, 2024 - March 31, 2025):

Santa Clara Swim Club $100,000
Bill Wilson Center: $50,000
City of Santa Clara Community Grant Program: $50,000
Year 2 (April 1, 2025 - March 31, 2026):

Santa Clara Swim Club $100,000
City of Santa Clara Community Grant Program: $50,000
Qualified Santa Clara Beneficiary To be Determined: $50,000 Year 3 (April 1, 2026 - March 31, 2027):

Santa Clara Swim Club $100,000
City of Santa Clara Community Grant Program: $50,000
Qualified Santa Clara Beneficiary To be Determined: $50,000 Due to the closing of George F. Haines International Swim Center (ISC) earlier this year, which served as a major regional hub for swimming events and a training site for multiple local swim clubs, Santa Clara swim club organizations are looking for alternative sites to support their swim activities.

City of Santa Clara Printed on 5/24/2024Page 2 of 5
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24-549 Agenda Date: 5/28/2024
The grant funds provided to the Santa Clara Swim Club to support their swim program and facility costs.

The Bill Wilson Center is a non-profit organization located in Santa Clara that provides services to children, young adults, and families through their housing, education, counseling, and advocacy programs.

As noted above, the third beneficiary for Years 2 and 3 have not yet been determined. City distribution of amounts designated for any “Qualified Santa Clara Beneficiary To Be Determined” shall be made in the corresponding fiscal year at such times and to such beneficiaries as StadCo, or its designee, shall select through a process it shall determine such beneficiaries, after consultations with and subject to approval from City staff.

City Council and Authorities ConcurrentMay 28, 2024

City Council and Authorities Concurrent
May 28, 2024