REPORT TO STADIUM AUTHORITY BOARD
SUBJECT
Title
Action on an Agreement with CliftonLarsonAllen LLP for Auditing Services for the Santa Clara Stadium Authority
Report
BACKGROUND
The Credit Agreement dated June 19, 2013, entered into between the Santa Clara Stadium Authority (Stadium Authority), Stadium Funding Trust (FinanceCo), and Goldman Sachs Bank USA (Goldman Sachs) requires that the Stadium Authority file audited annual financial statements within 180 days after the end of each fiscal year as described in section 5.1(b). It further requires that the financial statements be audited by an independent Certified Public Accountant (CPA) firm selected by the Stadium Authority and satisfactory to Upper Tier Co-Lead Arrangers. Upper Tier Co-Lead Arrangers is further defined as “Co-Lead Arranger” as defined in the Upper Tier Credit Agreement. In the June 19, 2013 Credit Agreement between Stadium Funding Trust and Various Lenders (the Upper Tier Credit Agreement), the preamble defines the Co-Lead Arrangers as Goldman Sachs, Merrill Lynch, Pierce, Fenner & Smith Incorporated (MLPFS), and U.S. Bank National Association (U.S. Bank).
Section 8.6.3 of the Amended and Restated Stadium Lease Agreement (Stadium Lease) between the Stadium Authority and Forty Niners SC Stadium Company LLC (StadCo) dated June 19, 2013 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.
The Stadium Authority is in contract with its current CPA firm (KPMG, LLP) for these audit services through March 31, 2026. With KPMG, LLP’s contract coming to an end, the Stadium Authority went through a competitive bid process for its future CPA firm.
DISCUSSION
Staff issued a formal Request for Proposal (RFP) in April 2025 for the annual financial statement audit and the agreed upon procedures (AUP) audit of the Shared Stadium Expenses. The RFP specifically requested that the auditing firm performing the audit to verify the transaction balances against supporting source documents for all items selected for testing based on the firms’ audit procedures. The Stadium Authority wants to ensure that the recorded transactions have proper source documentation and are supported. The RFP was published on DemandStar and noticed on Bidnet with a referral to DemandStar to maximize outreach. Both DemandStar and Bidnet are online platforms that allow government agencies to distribute RFPs to businesses. When the RFP closed in May 2025, the Stadium Authority had received proposals from the following six CPA firms:
• Baker Tilly US, LLP (Baker Tilly)
• CliftonLarsonAllen LLP (CLA)
• Crowe LLP (Crowe)
• Eide Bailly LLP (Eide Bailly)
• Macias Gini & O’Connell LLP (MGO)
• Moss Adams LLP (Moss Adams)
The procurement process was led by the City’s Purchasing Division within the Finance Department. The written proposals were evaluated and scored independently by a three-member evaluation committee against the criteria and weights demonstrated in the table below.
|
Description |
Point Range |
|
Responsiveness |
Pass/Fail |
|
Quality and completeness of proposal |
0-15 |
|
Proposer’s qualifications and experience, including the experience of staff to be assigned to the project with engagements of similar scope and complexity |
0-30 |
|
Technical experience of the proposer and quality of services to be provided by the proposer |
0-30 |
|
Size and structure of the firm and ability to perform the work within the time specified |
0-15 |
|
Cost |
0-10 |
|
Total Maximum Points |
100 |
After evaluating the written proposals, the top three proposers (CLA, Crowe and MGO) were invited to vendor oral presentations. The results of the interviews were then used to adjust proposal scores as outlined in the RFP.
After thorough review and evaluation of the proposals, staff selected CLA. This firm submitted a comprehensive response containing all required elements and provided a detailed breakdown of hours by audit phase which demonstrated both transparency and a well-structured approach. This level of detail gives staff confidence in the firms planning capabilities and its commitment to delivering an organized and efficiently managed engagement.
The proposed CLA audit team for this engagement has extensive governmental auditing experience, including work with cities, counties and special districts. The firm’s public sector experience ensures a strong understanding of the unique requirements of governmental entities. With more than 600 public-sector professional and a history of serving over 4,200 public agency clients, CLA brings expertise to the Stadium Authority. The firm also has a commitment to maintain the same team from year to year to support audit continuity and preserves valuable institutional knowledge.
The Stadium Authority also placed significant weight on the firm’s technical capabilities and the quality of services to be delivered. CLA currently provides auditing services for several National Football League (NFL) stadiums and therefore brings relevant experience related to complex public-private partnerships. Should new people join CLA’s audit team, the firm’s approach to documenting and retaining workpapers minimizes the need for staff to retrain CLA’s team annually. The principal on the proposed audit team has committed to being hands-on, ensuring strong oversight and immediate issue resolution and they are planning for weekly status meetings during the engagement exhibiting a commitment to communication and collaboration. The firm’s willingness to use existing Stadium Authority workpapers speaks to their desire for efficiency and a smooth audit process.
CLA’s size, structure, and capacity to complete the work within the required timeframe contributed to its selection. As the eighth-largest accountancy firm in the United States, the firm offers substantial resources while also maintaining a principal-to-staff ratio similar to that of smaller firms. This structure allows for deep principal involvement and faster decision-making which will streamline the audit. The engagement will be supported by team members located in California, ensuring accessibility and timely responses throughout the audit cycle.
Lastly, the firm’s fee structure was the most cost-effective among the respondents, offering a strong value relative to the depth of experience and quality of services proposed. Collectively, these strengths position CLA as highly capable of meeting the Stadium Authority’s needs and delivering a quality audit within the specified timeline.
The Stadium Authority had previously contracted with a “Big Four” accounting firm through KPMG, LLP. Those accounting firms were notified when the RFP was issued, however none of them responded to the RFP. Staff evaluated the qualifications of CLA and notified the Co-Lead Arrangers of this recommendation and selection. The Co-Lead Arrangers approved and/or did not object to this selection indicating that this firm’s engagement is satisfactory to them. Staff recommends that the Stadium Authority enter into a three-year agreement with CLA for financial statement audit services with two one-year options to extend the agreement at the sole discretion of the Authority for a total of five years ending in 2030. Staff also recommends retaining CLA to perform certain AUP audit services to satisfy Shared Stadium Expenses review.
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 Agreement is for a three-year term. CLA will conduct the external financial statement audit and the AUP audit in the fiscal year ending March 31, 2026 for a not to exceed amount of $97,650 with fixed contractual increases for the following fiscal years. The total cost of the contract over the three years will not exceed $307,944. The cost of the fiscal year 2025/26 audit will be budgeted in the fiscal year 2026/27 Stadium Authority Operating Budget. Appropriations in future years will be requested and approved through the annual budget process.
COORDINATION
This report has been coordinated with the Executive Director and Stadium Authority Counsel’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 clerk@santaclaraca.gov or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
1. Approve and authorize the Executive Director to execute an agreement with CliftonLarsonAllen LLP to provide auditing services for the Santa Clara Stadium Authority for Fiscal Year 2025/26 through Fiscal Year 2027/28 in the amount not-to-exceed $307,944 inclusive of a contingency of 20% for ad hoc projects, subject to appropriation of funds and approval as to final form by Stadium Authority Counsel; and
2. Approve and authorize the Executive Director to negotiate and execute options to extend the agreement for two additional one-year terms at the sole discretion of the Executive Director for Fiscal Years 2028/29 and 2029/30 in the amounts not-to-exceed $113,200 and $118,900 respectively assuming a five percent annual inflation factor, subject to appropriation of funds and maximum compensation not-to-exceed $540,044 if both option years are exercised. Any amounts over these listed will be brought before the Board for approval.
Staff
Reviewed by: Kenn Lee, Treasurer
Approved by: Jovan D. Grogan, Executive Director
ATTACHMENTS
1. Professional Services Agreement with CliftonLarsonAllen LLP