REPORT TO STADIUM AUTHORITY BOARD
SUBJECT
Title
Action on an Amendment No.1 to the Agreement with Advanced Integrated Pest Management for Pest Control Services at Levi’s Stadium to Extend the Term by One Year, Increase the Total Agreement Amount by $82,500, Update the Compensation and Fee Schedule, and Delegate Authority to the Executive Director for Future Amendments
Report
BACKGROUND
Pursuant to Section 2.9 of the Stadium Management Agreement between the Santa Clara Stadium Authority (Stadium Authority), Forty Niners SC Stadium Company LLC (StadCo), and Forty Niners Stadium Management Company LLC (Stadium Manager), the Stadium Manager is responsible for maintaining Levi’s Stadium (Stadium) “in the Required Condition and operate the Stadium as a quality NFL and multi-purpose public sports, public assembly, exhibit and entertainment facility.…”
On January 7, 2023, the Stadium Manager issued a Request for Proposals (RFP) to solicit qualified firms to provide pest control services at Levi’s Stadium. Three firms submitted proposals by the established deadline. Following a review and evaluation of the proposals, Advanced IPM was determined to be the most qualified firm based on its experience, quality of service, and cost. The Stadium Manager subsequently conducted a Best and Final Offer (BAFO) process, resulting in a negotiated not-to-exceed contract amount of $250,000 for a three-year term.
On March 7, 2023, the Stadium Authority approved the Stadium Manager’s request to enter into a three-year agreement with Advanced Integrated Pest Management (Advanced IPM) to provide pest control services at Levi’s Stadium for the period of April 1, 2023 through March 31, 2026, in an amount not to exceed $250,000 (Attachment 1).
To ensure continuity of pest control services at Levi’s Stadium in advance of the initial three-year term expiring on March 31, 2026, the Stadium Manager is requesting approval for the following actions related to the Agreement with Advanced IPM:
1. Approve and authorize the Stadium Manager to execute an Amendment No. 1 to the agreement with Advanced IPM to increase the maximum compensation by $82,500 to cover services from April 1, 2026 to March 31, 2027.
2. Authorize the Executive Director to approve future amendments to the Agreement with Advanced IPM to: (a) exercise the final one-year option for the fifth contract year and increase the not-to-exceed amount by $86,625 to cover services from April 1, 2027 to March 31, 2028, and (b) increase the total not-to-exceed amount by up to an additional $25,000 as contingency for unanticipated services, which may be utilized in during the fourth or fifth contract years, all subject to the same basic terms and conditions and budget appropriations.
3. Authorize the Executive Director to approve future amendment of the Agreement with Advanced IPM, under the same basic terms and conditions, on a month-to-month basis for a period not to exceed six months beyond the fifth contract year through September 30, 2028 and increase the not-to-exceed amount by $45,478 to cover up to six months of services and increase the compensation and fee schedule to reflect rate increases not to exceed 5% over the prior year upon providing reasonable justification of rate increases, provided the Stadium Manager is engaged in an active competitive solicitation process and subject to budget appropriations. This extension is intended to support the transition to a recommended contractor and maintain continuity of business, with thirty (30) calendar days’ notice to the contractor to terminate the agreement.
4. The total not-to-exceed maximum compensation for the Agreement with Advanced IPM, inclusive of contingency and all contract years, shall not exceed $489,603.
A Recommendation Memo was submitted describing the Stadium Manager’s request in more detail (Attachment 3).
DISCUSSION
Continued pest control services are necessary to ensure the facility remains in optimal condition for daily staff activities and events. Pest management at a large-scale, multi-use facility requires familiarity with the site’s infrastructure, food service areas, and event operations. Extending the current agreement ensures continuity of service, operational stability, and regulatory compliance.
By exercising the first of two one-year extension options, Stadium Manager will have continuity with Advanced IPM, maintaining the cleanliness and pest management required for Levi’s Stadium. To ensure the Stadium remains fully operational, Stadium Manager requires flexibility to manage vendor transitions effectively. As such, the Stadium Manager is also requesting for delegated authority to the Executive Director to approve future amendments to the agreement to respectively 1) approve future amendments to the Agreement to: (a) exercise the final one-year option for the fifth contract year and increase the not-to-exceed amount by $86,625 (reflective of a 5% increase) to cover services from April 1, 2027 to March 31, 2028 and increase the compensation and fee schedule to reflect rate increases not to exceed 5% over the prior year upon providing reasonable justification of rate increases, and (b) increase the not-to-exceed amount by up to an additional $25,000 as contingency for unanticipated services, which may be utilized during the fourth or fifth contract years, all subject to the same basic terms and conditions and budget appropriations, and 2) approve future amendment to the Agreement, under the same basic terms and conditions, for a period not to exceed six months beyond the fifth contract year through September 30, 2028 and increase the not-to-exceed amount by $45,478 (reflective of a 5% increase) to cover up to six months of services and increase the compensation and fee schedule to reflect rate increases not to exceed 5% over the prior year upon providing reasonable justification of rate increases, provided the Stadium Manager is engaged in an active competitive solicitation process and subject to budget appropriations.
The requested month-to-month authority would allow for an orderly transition to a recommended contractor following a competitive procurement process, flexibility to prevent any lapse in critical pest control services, and sufficient time for contractor mobilization and knowledge transfer, with thirty (30) calendar days’ written notice to terminate the agreement. Table 1 below provides a summary of the costs under the agreement.
Table 1 - Cost Summary
|
Description |
Amount |
|
Initial Three-Year Term (4/1/23 - 3/31/26) |
$250,000 |
|
Optional Year 4 (4/1/26 - 3/31/27) |
$82,500 |
|
Optional Year 5 (4/1/27 - 3/31/28) |
$86,625 |
|
6-Month As-Needed Extension (4/1/28 - 9/30/28) |
$45,478 |
|
Contingency |
$25,000 |
|
Total Not-to-Exceed Maximum Compensation |
$489,603 |
Optional Years 4 and 5 assume an annual price increase of 5%. A contingency is included to account for unanticipated service requirements. The Stadium Manager has provided the following reason for the increased agreement amounts that reflect a 5% increase and maximum 5% for rate increases, “This percentage is based on the potential rate increases exceeding the prior year fees given the overall lack of market certainty due to current economic and political factors.” The Stadium Manager or vendor is responsible for providing reasonable justification for any rate increases for future amendments. If the Stadium Manager’s requests are approved, the Executive Director will have delegated authority to approve such rate increases, up to 5%, and anything higher will have to go to the Stadium Authority Board for additional approval. The Stadium Manager will be responsible for managing expenditures throughout the term of the agreement based on operational needs, provided the overall maximum compensation is not exceeded. This approach allows for continued Stadium Authority oversight, while streamlining the approval process for future amendments.
Based on the review of the Stadium Manager’s request, the provided information, and the draft Amendment No. 1, staff recommends approval of the Stadium Manager’s requests related to the Agreement with Advanced IPM to continue pest control services at Levi’s Stadium with minor modifications - with respect to the recommendation to approve Amendment No. 1 also include reference to the updated compensation and fee schedule; and update the word “increase” to “adjust” relating to the contract year five and six-month extension’s compensation and fee schedules in the recommendation language. For clarity, the Executive Director will have delegated authority to approve rate increases of up to 5%, subject to the maximum compensation.
The Stadium Authority Counsel’s Office has reviewed the Amendment No. 1 to the Agreement for comparison to the Stadium Authority’s customary language. Nothing in the proposed Amendment No. 1 or Agreement changes the Stadium Authority’s rights under the Management Agreement and specifically with respect to any dispute that may arise from the Stadium Manager’s obligations under the Management Agreement.
The Stadium Authority reserves all rights to confirm and dispute charges by and payments to the Stadium Manager during a fiscal year-end reconciliation/true-up, 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. The Stadium Authority may raise related questions before the fiscal year-end reconciliation/true-up, which the Stadium Manager agrees to assess and respond to in good faith.
ENVIRONMENTAL REVIEW
The action being considered is exempt from the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15301 “Existing Facilities” as the activity consists of the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing public or private structures, facilities mechanical equipment or topographical features involving negligible or no expansion of use beyond that existing at the time of the lead agencies determination. Additionally, the action being considered is exempt from the CEQA pursuant to CEQA Guidelines section 15061(b)(3) as the activity is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA.
FISCAL IMPACT
The requested Amendment No. 1 will increase the Agreement’s total not-to-exceed amount by $82,500, from $250,000 to $332,500 over the four-year term. Future amendments to the Agreement, as requested through delegated authority to the Executive Director for approval, may increase the agreement’s total not-to-exceed amount to $489,603 through September 30, 2028.
The Stadium Authority Fiscal Year (FY) 2026/27 Budget includes Shared Stadium Expenses, such as Security, Stadium Operations, Engineering, Guest Services, and Groundskeeping. In accordance with the Stadium Lease, most Shared Stadium Expenses are allocated 50/50 between the Stadium Authority and StadCo.
There are sufficient funds in the FY 2026/27 Shared Stadium Expenses Engineering line item to cover the Stadium Authority’s fifty percent (50%) share of the agreement cost for the fourth contract year. As the requested action for the fifth contract year and additional six-month extension covers FY 2027/28 and FY 2028/29, those agreement amendments will be subject to future budget appropriations.
COORDINATION
This report has been coordinated with the Stadium Authority Counsel and 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 clerk@santaclaraca.gov or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
1. Approve and authorize the Stadium Manager to execute an Amendment No. 1 to the Agreement with Advanced Integrated Pest Management for pest control services at Levi’s Stadium to increase the maximum compensation by $82,500 to cover services from April 1, 2026 to March 31, 2027 and update the compensation and fee schedule to reflect Exhibit B-2.
2. Authorize the Executive Director to approve future amendments to the Agreement with Advanced Integrated Pest Management to: (a) exercise the final one-year option for the fifth contract year, increase the not-to-exceed amount by $86,625 to cover services from April 1, 2027 to March 31, 2028, adjust the compensation to reflect rate increases not to exceed 5% over the prior year upon providing reasonable justification of rate increases, and (b) increase the total not-to-exceed amount by up to an additional $25,000 as contingency for unanticipated services, which may be utilized during the fourth or fifth contract years, all subject to the same basic terms and conditions and budget appropriations.
3. Authorize the Executive Director to approve future amendment to the Agreement with Advanced Integrated Pest Management, under the same basic terms and conditions, for a period not to exceed six months beyond the fifth contract year through September 30, 2028, increase the not-to-exceed amount by $45,478 to cover up to six months of services, and adjust the compensation and fee schedule to reflect rate increases not to exceed 5% over the prior year upon providing reasonable justification of rate increases, provided the Stadium Manager is engaged in an active competitive solicitation process and subject to budget appropriations.
4. The total not-to-exceed maximum compensation for the Agreement with Advanced Integrated Pest Management, inclusive of contingency and all contract years, shall not exceed $489,603.
Staff
Reviewed by: Christine Jung, Deputy City Manager
Approved by: Jovan D. Grogan, Executive Director
ATTACHMENTS
1. Agreement with Advanced Integrated Pest Management
2. Draft Amendment No. 1 to Agreement with Advanced Integrated Pest Management
3. Stadium Manager’s Recommendation Memo