Item #5
3/11/25
Santa Clara Stadium
Authority
Public Hearing
Action on the Proposed Santa Clara Stadium Authority
FY 2025/26 Budget, Compliance and Management
Policies, and 2025 Marketing Plan
Item #5 (25-103)
SCSA March 11, 2025
ARTA CLARA STADIUE AUTHORITY
Agenda
1. Budget Development
2. Budget Flowchart
3. Key Summary
4. Updates after Study Sessions
5. Excess Revenues Distribution
6. Stadium Authority Operating Budget
7. Stadium Authority Debt Service Budget
8. Stadium Authority Capital Budget
9. 2025 Marketing Plan
10. Key Summary
11. Recommendations
2 POST MEETING MATERIAL
1 FY 2025/26 Budget Development
)ctober/November 2024 Sould provide aly neat wark docum mas a re dired the Stadium gret plan hich included the dates that Man o December 2024 Fund co to Marce for ever an eduprain he nual say apil Expenses, and Decretionary At least 45 days prior to the start of the fiscal year (January 31) ManCo provided the required documents per the Stadium Agreements:
Stadium Operations and Maintenance Plan
January 2025 Annual Shared Expense Budget with Five Year Projection Annual Stadium Authority Operations Budget, Capital Expenditure Plan with Five-Year Projection Annual Public Safety Budg
2025 Marketing Plan and Public Safety Document Update
February 2025 Sat aul dang is an on March to releSare 021e responses on Fabruary 24.
Zebruary 25 & March 4, ecial Study Session on Fiscal Year 2025/26 Operating, Debt Service, and Capital Budget, Stadium Operati d Maintenance Plan, Public Safety Budget and Marketing Pl March 11, 2025 Public Hearing to approve the SCA Proposed Fiscal Year 2025/26 Operating, Debt Service, and Capital Budget March 14, 2025 SCSA Notice of approval/disapproval of the Stadium Manager's Draft Annual Stadium Authority Budget March 21, 2025 Stadium Manager required to submit Adopted Budget to the Trust (10 days prior to start of FY) 3 FY 2025/26 Budget Development (cont.)
General Information
• Year in Review for both NFL and Non-NFL Events
• Excess Revenues Distribution
• Operating Budget
• Stadium Authority General and Administrative Budget
• Stadium Manager Shared Expenses and 5 Year Forecast
• 10-Year Forecast (New Section)
Debt Service Budget
Capital Budget
• Capital Expenditure Plan and 5 Year Forecast
Stadium Authority Work Plan
2 Stadium Authority Budget Flowchart
Debt CapEx Debt Service Total
Operating Service and Capital
Budget + + Budget - Transfers Out = Budget
Budget $18.6M
$60.9M $20.6M $22.8M $77.3M
5 Stadium Authority FY2025/26 Budget
Key Summary
• Implementation terms of the 2024 Settlement Agreement • Supports major events including 2026 World Cup and Super Bowl LX Net Non-NFL Events Revenue budgeted at $5.3 million
Public Safety Costs (PSC) reimbursements over threshold expenditure is budgeted to be $2.1 million
PSC 2024 Outstanding Balance payment of $3.0 million
Direct payments to the General Fund at $6.4 million
Non-NFL Ticket Surcharge revenue is projected to increase $2.3 million, increase of the surcharge from $4 to minimum of $8 for tickets sold for certain events
6 3
Stadium Authority FY2025/26 Budget
Key Summary (cont.)
Contingent allocation of an additional $1.0 million funding to the CapEx Reserve for potential additional CapEx expenses to maintain aging facility.
Levi's Naming Rights expense of $1.7 million includes Authority's obligations under its Naming Rights Agreement with Levi's to provide suite and tickets to the six 2026 World Cup soccer matches (anticipated additional surcharge of $2.1 million from events in FY 2026/27).
Stadium Authority FY2025/26 Budget
Updates after Study Sessions
SBL Sales and Service expenses ($3.3 million)
• Complementary buffet costs of $927,000 were separated from SBL Sales and Service Expenses
SBL Sales Team - 10 staff
SBL Revenue Budget of $5.16 million
~ $4.68 million collections from sales in prior years
• $0.48 million collections from New Sales:
New Sales goal of $4.50 million in total contracted
business; $0.48 million collected in current year and
remainder (~$4.02 million) would be collected in future years (SBL payment plan)
8 4
Stadium Authority FY2025/26 Budget
Updates after Study Sessions (cont.)
SBL Service Team - 9 staff
Service Responsibility Time Charger
tadium Authorit
SBL Invoicing and Collections 20% 20% (all SCSA)
Game/Event Days and SBL Member Events 10% 5% (50% SCSA) Face-to-Face/Virtual Meetings 15% 7.5% (50% SCSA)
General Customer Service 25% 12.5% (50% SCSA)
49er Season Ticket Invoicing and Collections 30% 0% (none SCSA) Total 100% 45%
9 Stadium Authority FY2025/26 Budget
Updates after Study Sessions (cont.)
SBL Sales and Service expenses
Stadium Authority staff discussing appropriate staffing levels with ManCo
• Recommending that the Board's budget approval reserves the right to modify this budget line based on continued discussions and assessment
10 5
Stadium Authority FY2025/26 Budget
Updates after Study Sessions (cont.)
• New Stadium Manager office space expense
• Stadium Manager moved into off-site office space
• Stadium Authority's share of $620,000 was proposed to be included under Other Expenses by Stadium Manager
• Staff is not recommending the acceptance of ManCo's request in this year's budget
• Staff will continue to evaluate ManCo's use of office space at the Stadium and at other facilities. If, at any point, there is a determinatior that Stadium Authority funding for any portion of the off-site office space is appropriate, staff would bring that back to the Board for their consideration as a budget amendment.
11 Stadium Authority FY2025/26 Budget
Updates after Study Sessions (cont)
• Additional Contribution to the CapEx Reserve Account
• Proposed budget includes an allocation of $1.0 million above contractual requirements
• Provides contingent allocation for the CapEx Reserve Account for unanticipated expenses
• Stadium Authority staff is working with ManCo on the legal mechanism to implement this additional funding and the additional $1.0 million will only be transferred when agreement is reached with ManCo 12 6
Stadium Authority FY2025/26 Budget
Updates after Study Sessions (cont.)
Summary of Changes to Expenses From
Study Session
($ in thousands)
•Expense Line Item Study Current Change
Session
SSE Stadium Ops $3,499 $3,489 ($10)
SBL Sales and Service $3,251 $2,324 ($927)
Buffet Costs $0 $927 $927
Naming Rights Expense $1,699 $1,724 $25
Other Expenses $1,383 $763 ($620)
PSC 2024 OS Balance $2,820 $2,972 $152
Transfer to GF $2,820 $2,972 $152
Total Changes to Expenses ($301)
13 Excess Revenues Distribution
Excess Revenues Distribution: If revenues exceeds expenses in a lease year the Excess Revenues are required to be distributed in the order as set forth in Article 14 of the Stadium Lease agreement as shown below
1. Payoff any . Fund Operating Expens 7. Fund Renovation / outstanding ManCc Reserve up to $20M. Demolition Reserve Revolving Loan - N/A ompleted in FY2022/2 (50% if less than $70M) nnual 3% Contribution Ongoir - In progress
2. Fund Future
Stadium Authority 5. Repay any outstandin!
Expenses up to $2M- principal balance ol
Completed in FY
Subordinate Loan - Completec
2014/15 in FY 2022/23
4. Fund Operating Expense
eserve up to $10M
ompleted in FY 2014/1
14 Future Allocation
Excess Revenues Distribution (cont.)
Excess Revenue Cash Reserves Summary
FY 2023/24 FY 2024/25 FY 2025/26
Reserve Category Actual Projected Budget
Capital Expenditure Reserve $19.3M $14.7M $2.8M
Operating Reserve $26.1M $26.9M $27.7M
Renovation/Demolition Reserve $31.4M $43.2M $49.1M
Total $76.8M $84.8M $79.6M
15 Stadium Authority Operating Budget
Key Assumptions in Proposed Operating Budget:
• General and Administrative Expenses - $4.6 million, includes 8.7 full time equivalent positions as a baseline level of support • Cost increased by $399,000 or 8%
16 8
Stadium Authority Operating Budget
(cont.)
Key Assumptions in Proposed Operating Budget:
Net Non-NFL Events - $5.3 million projected for FY2025/26 • Stadium Manager is projecting four (4) concerts and two (2) soccer events for FY2025/26
Net Non-NFL Events Revenue Summary
FY 2023/24 FY 2024/25 FY 2025/26
Actual Projected Budget
$8.3M $9.3M $5.3M
17 Stadium Authority Operating Budget
(cont.)
Key Assumptions in Proposed Operating Budget:
Stadium Manager Shared Expenses - $14.0 million, includes 72 full time equivalent positions
• Costs increased by $445,000 or 3%
Groundskeeping due to higher outside services
• Security due to higher compensation costs
• SBL Sales and Service - $2.3 million
• Includes 19 positions that track time spent on Stadium Authority activity
18 9
Stadium Authority Operating Budget
(cont.)
Revenues:
Facility Rent $ 24,762,000
NFL Ticket Surcharge 15,034,000
Naming Rights 8,065,000
Non-NFL Event Net Revenue 5,300,000
SBL Proceeds 5,156,000
Non-NFL Event Ticket Surcharge 3,426,000
Interest 3,421,000
Sponsorship Revenue (STR) 722,000
Senior & Youth Program Fees 270,000
Non-NFL Events PSC Depreciation 89,000
19 Total Revenues $66,245,000
Stadium Authority Operating Budget
(cont.)
Expenses:
$13,989,000
4,687,000
2,324,000
927,000
Public Safety Costs (PSC) 2024 Outstanding Balance 2,972,000 Transfer to City General Fund from Excess Revenues 2,972,000 - $6.4 Performance Rent 2,150,000 million
PSC Over Threshold 2,143,000 projected
Utilities 1,796,000
Naming Rights Expenses 1,724,000 to the
Other Expenses 763,000 City's
Ground Rent 1,000,000 → General
Senior and Youth Program Fees 270,000 → Fund
Discretionary Fund Expense 250,000
Use of StadCo Tenant Improvements 106,000
Subtotal Expenses $38,073,000
Transfers Out:
Debt Service $17,646,000
Capital Expenditure Reserve 5,153,000
20 ubtotal Transfers Ou $22,799,000
Total Use of Funds S60,872,000
10 Stadium Authority Operating Budget
(cont.)
Discretionary Fund
50% of FY
2025/26 Base
Projected Non-NFL Event FY 2025/26 Public Safety Projected eginnin! Ticket Discretionary Costs Over Balance
alanc Surcharge Fund Expense
$849,000 $701,000 $250,000 $120,000 $1,180,000
• The Discretionary Fund will be used to cover NFL public safety costs above the public safety cost threshold, public safety capital expenses, and other items at the Stadium Authority's discretion.
21 Stadium Authority Operating Budget
(cont.)
Performance Rent Calculation (cont.)
Non-NFL Event Net Revenue (in millions)
$10.0 $8.8 $8.3
$9.0
$6.1
$6.0 $5.2 $5.3 $5.2 $5.3
$4.0
$2.0
$-
S105) 5003)
3420)
$(2.7)
S(4.0)
March Mort Most Mar March March 2022 2023 More March March 2015 2020 2021 2023 2025 2026
(Forecast) (Budget)
22 11
Stadium Authority Operating Budget
(cont.)
Performance Rent Calculation (cont.)
Fiscal Year
2024/25 Fiscal Year
Performance Rent Calculation Projection 2025/26 Budget
Ground Rent $ 1,000,000 $ 1,000,000
Net Non-NFL Event Revenue (Expense) 9,250,000 5,300,000 50% of Net Non-NFL Event Revenue (Expense) $ 2,650,000
Performance Rent Credit from Ground Rent (50% of Ground Rent) 500.00 Subtotal $ 125,000 150,00
NIA
2024 Settlement Agreement Payout for Performance Rent 7,325,000 Net Performance Rent paid to the City of Santa Clara $ 11,450,000 $ 2,150,000 peed the us a 0 752%, reted pule are ost the amount with pull atly coas.
Stadium Authority Operating Budget
(cont.)
Performance Rent Calculation
• Stadium Authority pays the City performance-based rent on top of the fixed ground rent
• Performance-based rent is equal to 50% of the net income from Non-NFL events less 50% of the ground rent and any credited public safety costs
• Credited public safety costs is the amount by which public safety costs exceed the public safety costs threshold
• Performance-based rent is remitted to the City in July following the Stadium Authority's fiscal year-end.
24 12
Stadium Authority Operating Budget
(cont.)
Shared Stadium Manager Expenses
There are twenty (20) positions added to Security, two (2) positions removed from Stadium Ops and one (1) position removed from Engineering:
• Security: FTE is increasing by 20 positions
• Security is transitioning operations in-house. Budget includes three months of security under outside services and nine months for in-house personnel. • Improve quality and consistency of security personnel, enhanced operational control, and improved customer and stakeholder experience 25 Stadium Authority Operating Budget
(cont.)
Shared Stadium Manager Expenses (cont.)
• Stadium Operations: FTE is decreasing by two positions • Coordinator position was eliminated
• Associate Counsel position transition out of SSE and will track actual time spent on SCSA related work and chare to Non-NFL Events, SBL Sales and Service and Other as ncessary
• Engineering: FTE is decreasing by one position
• Director of Engineering position was eliminated
26 13
Stadium Authority Ten-Year Forecast
Excess revenues projected in each year, $14.1 million in FY2025/26 to $9.0 million in FY2034/35
Excess revenue transfers to City's General Fund in each year fluctuates from $2.4 million to $7.0 million, will be factored into City General Fund Forecast update
Public Safety Cost 2024 Outstanding Balance paid off in three years Renovation/Demolition Reserve filled to $70 million by FY2030/31 Overall Stadium Authority Reserves increase from $96.3 million in FY2025/26 to $122.3 million in FY2034/35
Direct impact to City's General Fund including rent, Senior and Youth Fees and Stadium Authority Excess revenue fluctuates from $5.8 million to $10.8 million 27 Stadium Authority Debt Service Budget
FY 2025/26
Debt Type Budget
CFD Advance $3,565,000
Term A Loan $17,080,000
Total $20,645,000
• Debt service amount of $20.6 million includes principal payment of $9.9 million and interest payment of $10.7 million
• Total outstanding debt is projected to decrease by $9.9 million from $219.7 million to $209.8 million
28 14
Stadium Authority Debt Service Budget
(cont.)
Total Outstanding Debt (in millions)
$700
S6534 68% reduction in
$600 outstanding debt
$561.6 rom March 2014
$500 $464.7
$429.8
$400 $396.1 $382.7
$340.2 5325,3
$300 S296.8 S280.3
5245.3 $228.7 $2197$209.8
$200
$100
$41.1
s-
March March
2017
*Construction Loan # StadCo Agency Advance Term B Loan a Term A Loan • StadCo CFD Advance = StadCo Subordinated Loan 29 Stadium Authority Capital Budget
Total Capital Budget of $18.6 million
• Stadium Improvements: $17.1 million
• New Projects: $5.2 million
• Construction ($4.0 million): LED Retrofit, Structural Steel Coating, Boilers, Escalator Canopies Bird Proofing
• Equipment ($907,000): Medical Equipment, Kawasaki ATVs • Contingency ($248,000)
• Carryover Projects: $11.9 million
• Construction ($8.5 million): Lighting Systems, Waterproofing/Caulk/Joint Replacements • Equipment ($2.8 million): Radio Booth Cabling, Main Kitchen Equipment • Contingency ($565,000)
• Stadium Warranty-Related Construction: $1.5 million
• Part of the original Stadium Development/Construction Budget 30 15
Stadium Authority Capital Budget
(cont.)
New Capital Expenditure Projects
• LED Retrofit Project -
Phase 2 ($1.1 million) -
inefficient lighting fixtures
• Boilers ($500,000) -
replaces boiler and/or
critical boiler support
components
LED Retrofit
31 Stadium Authority Capital Budget
(cont-)
Carryover Capital Expenditure Projects
• Naming Rights Signage VISTADIUM
($1.6 million) - Replacement
of Levi's Signage under First
Amendment to the Naming
Rights Agreement
• Lighting Systems - ($2.7
million) - Replaces current
metal halide stadium
field/sports lights with Levi's Naming Rights
outdoor LED retrofit. Signage Refurbishment
32 16
Stadium Authority Capital Budget
(cont.)
FY2024/25 Projects
123: 02=
Aesthetic Improvements - Premium Club Levi's Naming Rights Signage Refurbishment Areas / Special Event Spaces
33 2025 Marketing Plan
Staff plans to work with the Stadium Manager in the upcoming year to continue to refine and implement the Marketing Plan. Three key focus areas:
• Evaluating marketing and branding consistency
• Assessing media plans for efficiency and return on investment (ROI) • Interpreting performance data to identify trends and opportunities for improvement
• Authorize the Executive Director to finalize the review of and approve the Levi's Stadium Events Marketing Plan and work in collaboration with the Stadium Manager to implement appropriate changes upon completion of the marketing consultant's work
34 Stadium Authority FY2025/26 Budget
Key Summary
Implementation terms of the 2024 Settlement Agreement
Supports major events including 2026 World Cup and Super Bowl LX Net Non-NFL Events Revenue budgeted at $5.3 million
Public Safety Costs (PSC) reimbursements over threshold expenditure is budgeted to be $2.1 million
• PSC 2024 Outstanding Balance payment of $2.8 million
Direct payments to the General Fund at $6.2 million
Non-NFL Ticket Surcharge revenue is projected to increase $2.3 million, increase of the surcharge from $4 to minimum of $8 for tickets sold for certain events
35 Stadium Authority FY2025/26 Budget
Key Summary (cont.)
Contingent allocation of an additional $1.0 million funding to the CapEx Reserve for potential additional CapEx expenses to maintain aging facility.
Levi's Naming Rights expense of $1.7 million includes Authority's obligations under its Naming Rights Agreement with Levi's to provide suite and tickets to the six 2026 World Cup soccer matches (anticipated additional surcharge of $2.1 million from events in FY 2026/27). 36 18
Recommendations
1. Adopt the Santa Clara Stadium Authority Fiscal Year 2025/26 Operating, Debt Service, and Capital Budget on the terms presented, including (1) a $1 million contingent allocation of revenues to the CapEx Reserve Fund, with direction to staff to implement this allocation once an appropriate legal mechanism is identified, and (2) a reservation of rights to modify the SBL Sales and Service budget line item based on further discussions with the Stadium Manager and future Board action;
Authorize the Executive Director to finalize the review of and approve the Levi's Stadium Events Marketing Plan and work in collaboration with the Stadium Manager to implement appropriate changes upon completion of the marketing consultant's work;
3. Adopt the Stadium Authority Board Budget Policy; and
4. Adopt the Stadium Authority Board Compliance and Management Policy. 37 Santa Clara Stadium
Authority
Public Hearing
Action on the Proposed Santa Clara Stadium Authority
FY 2025/26 Budget, Compliance and Management
Policies, and 2025 Marketing Plan
Item #5 (25-103)
SCSA March 11, 2025
SANTA CLARA STAIN AUTHORITY
19