REPORT TO COUNCIL
SUBJECT
Title
Action on the Santa Clara Convention Center FY 2023/24 4th Quarter Financial Status Report
Report
COUNCIL PILLARS
Promote and Enhance Economic, Housing and Transportation Development
Enhance Community Engagement and Transparency
Promote Sustainability and Environmental Protection
BACKGROUND
On February 5, 2019, the City of Santa Clara approved an agreement with Global Spectrum L.P. dba Spectra Venue Management (Spectra) to operate the Santa Clara Convention Center (SCCC). Spectra began management of the SCCC on March 18, 2019. In November 2021, Spectra merged with Oak View Group (OVG) but continues to operate under the same legal entity.
Staff is transmitting OVG’s SCCC status report to City Council for compliance with agreement terms.
DISCUSSION
This Report to Council transmits OVG’s SCCC Financial Status Report for the 4th quarter ending June 30, 2024 (attached). This report is unaudited and, therefore, subject to change.
As OVG’s 4th quarter report indicates, there were 77 events hosted at the SCCC, 19 more than the budgeted 58 events. There were 27 events in April, 29 events in May and 21 events in June.
The fourth quarter followed its historical pattern of being the strongest financial quarter of the fiscal year. April was the most lucrative month of the quarter followed by May and then June. Based on event needs, OVG staffing levels varied from 37-38 employees throughout the quarter.
|
|
Financial Summary |
|
|
Quarter Ended June 30, 2024 |
Quarter Ended June 30, 2023 |
|
|
Budget |
Actual |
Overage (Underage) |
Budget |
Actual |
Overage (Underage) |
|
Gross Revenue |
$4,919,974 |
$5,911,139 |
$991,165 |
$3,886,710 |
$6,614,989 |
$2,728,279 |
|
Total Expense |
$4,196,348 |
$4,961,329 |
$764,981 |
$3,706,492 |
$5,421,421 |
$1,714,929 |
|
Net Income |
$723,626 |
$949,810 |
$226,184 |
$180,218 |
$1,193,568 |
$1,013,350 |
For the 4th quarter ending June 30, 2024, OVG reported a net operating gain of $949,810, compared to a net operating gain of $1,193,568 for the 4th quarter of FY 2022/23.
Total revenues for FY 2023/24 4th quarter were $5,911,139, or $991,165 more than the budgeted revenues of $4,919,974. Total expenses for FY 2023/24 4th quarter were $4,961,329 or $764,981 more than the budgeted amount of $4,196,348. Additionally, OVG recognized $379,935 of other revenues in the 4th quarter primarily from cancellation fees and interest income.
FY 2023/24 experienced a reduction of thirty-three event days. The decrease in the number of events led to a decline in overall attendance. Financially, the actual gross revenue for FY 2023/24 was lower than revenue posted in FY 2022/23. Expenses in FY 2023/24 were lower than FY 2022/23. Net income for the quarter was $949,810, compared to $1,193,568 in the previous year.
As of June 30, 2024, OVG, reported a year-to-date net operating income of $2,512,321, which consists of $19,204,756 in revenues and $16,692,435 in expenses.
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Financial Summary -Year to Date June 2024 |
|
|
Budget |
Actual |
Budgeted Overage (Underage) |
|
Gross Revenue |
$15,663,770 |
$19,204,756 |
$3,540,986 |
|
Total Expense |
$15,191,750 |
$16,692,435 |
$1,500,685 |
|
Net Income |
$472,020 |
$2,512,321 |
$2,040,301 |
ENVIRONMENTAL REVIEW
There is no discretionary action being considered under this Report to Council; therefore, there is no “project” within the meaning of the California Environmental Quality Act (“CEQA”) and no further environmental review is required pursuant to section 15060 (c) of Title 14 of the California Code of Regulations.
FISCAL IMPACT
The net operating gain incurred by the Convention Center for the 4th quarter FY 2023/24 is $949,810. This amount does not include any fiscal impact related to TOT, TID, and/or sales tax activity. Any funds generated from operations are allocated and programmed in the Convention Center Enterprise Fund for operations and capital improvement projects as part of the annual budget process.
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 <mailto:clerk@santaclaraca.gov> or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
Note and file the Santa Clara Convention Center Financial Status Report for the 4th Quarter ending June 30, 2024, as submitted by OVG.
Staff
Reviewed by: Kenn Lee, Director of Finance
Approved by: Jovan D. Grogan, City Manager
ATTACHMENTS
1. SCCC Activity Report for 4th Quarter FY 2023/24