REPORT TO STADIUM AUTHORITY BOARD
SUBJECT
Title
Action on the Santa Clara Stadium Authority Financial Status Report for Quarter Ending December 31, 2023 and Approve Related Budget Amendments
Report
BOARD PILLARS
Ensure Compliance with Measure J and Manage Levi’s® Stadium
Enhance Community Engagement and Transparency
BACKGROUND
In Fiscal Year 2014/15 the Stadium Authority Board (Board) requested that staff prepare quarterly Santa Clara Stadium Authority (Stadium Authority) Financial Status Reports. These reports provide an update on the events held at Levi’s® Stadium, Stadium Authority finances, and the impact of Stadium Authority activity on the City of Santa Clara (City).
This report provides information covering the Stadium Authority’s first three quarters of the 2023/24 fiscal year (FY), which runs from April 1, 2023 - December 31, 2023.
The Adopted Stadium Authority Budget incorporates the estimated revenues and expenses for all Stadium Authority funds. The attached Financial Status Report provides the budget to actual revenue and expense summaries for the operating, debt service, and capital funds. Analysis of the financial activity through the fiscal year measures the adherence to the budget and allows the Stadium Authority to monitor and project revenues and expenses. Any significant variances are explained in the report.
DISCUSSION
The attached financial status report provides information covering the Stadium Authority’s first three quarters (April 1, 2023 - December 31, 2023) of FY 2023/24. The report summarizes National Football League (NFL) and Non-NFL event activity at Levi’s® Stadium and describes the financial impact of these events on the Stadium Authority and City since FY 2014/15. The report also provides the budget to actual revenue and expense summaries for the operating, debt service, and capital funds. Analysis of the financial activity through the fiscal year measures the adherence to the budget and allows the Stadium Authority to monitor and project revenues and expenses. Any significant variances are explained in the report.
NFL Event Revenue and Expenses
There were nine NFL games held in the first three quarters of FY 2023/24. Levi’s® Stadium hosted two pre-season NFL games of the 2023 season on August 19th and 25th and seven regular NFL season games through the third quarter of the 2023 season. This resulted in $11.5 million in NFL ticket surcharge revenues for the Stadium Authority and $216,000 of Senior and Youth Program Fees for the City. Public safety costs for NFL games totaled an estimated $4.4 million which will be fully reimbursed to the City by ManCo.
Non-NFL Event Revenue and Expenses
There were eight ticketed Non-NFL events and 37 special events which are detailed in the report. The eight ticketed Non-NFL events generated an average net profit of $738,000 per event. Table 1 below summarizes revenues and expenditures for the eight ticketed events.
Table 1
The Non-NFL event ticket sales generated $1.6 million in ticket surcharge revenue, half of which will fund the discretionary fund. Public safety costs for these events totaled an estimated $3.3 million which will be fully reimbursed to the City by ManCo on behalf of the Stadium Authority.
When combining ticketed and non-ticketed Non-NFL revenues to date, Table 2 below shows approximately $7.8 million in net revenue (excluding surcharge revenue) through the end of the third quarter. It should be noted the financial information provided is a draft and subject to change as additional revenues and/or expenditures are recorded.
Table 2
Stadium Builder Licenses (SBLs)
SBLs account for 19% of the Stadium Authority’s annual budgeted revenue in FY 2023/24. There is a total of 64,090 currently active SBLs which is 96.9% of the 66,136 total sellable SBL seats. Through the third quarter, since inception, the value of the active SBLs amount to $552.0 million of which $524.8 million has already been collected.
Stadium Authority Budgets
The detailed analysis of Stadium Authority budget to actual financials is provided in the attached Financial Status Reports. In summary, total operating revenues were $52.8 million representing 81% of the overall budget for revenues and total operating expenses were $16.4 million or 70% of the budget. The debt service fund was able to pay down $16.3 million in debt, bringing total Stadium Authority debt down to $229.0 million. Capital expenses were $5.9 million representing 28% of the overall CIP budget.
FY 2023/24 Stadium Authority Budget Adjustments
From time to time, budget adjustments may be necessary to align revenues or expenditures to actual or unexpected activity during the course of a fiscal year, known after the adoption of the Stadium Authority Budget. On March 7, 2023, the Stadium Authority Board adopted the Santa Clara Stadium Authority FY 2023/24 Operating, Debt Service, and Capital Budget. As of the timing of the publication of this report, additional information from FY 2023/24 has resulted in the recommended budget adjustment as follows:
Operating Budget:
1) Senior and Youth Program Fees - Two (2) additional NFL playoff games were held at Levi’s Stadium beyond the ten (10) regular season games resulting in the collection of additional Senior and Youth Program Fees (based on $0.35 per NFL game ticket). It is projected that the Stadium Authority will collect $250,000 of Senior and Youth Program Fees which is $16,000 higher than budgeted. A budget adjustment is needed to reflect the increase in the payment to the City’s’ General Fund by $16,000.
2) Use of StadCo Tenant Improvements - The Stadium Authority is charged fees for the use of StadCo assets during Non-NFL events. Use of StadCo Tenant Improvements is projected to be higher than anticipated by $11,935. A budget adjustment is needed to reflect the increase in Use of StadCo Tennant Improvements of $11,935.
Debt Service Budget:
1) Contribution from Community Facilities District (CFD) - Due to a continued improvement in the economy post COVID, hotel stays have been higher than anticipated, therefore CFD revenue is projected to be higher which allows for additional debt payment on the CFD Advance. A budget adjustment of $521,000 is needed to reflect the increase in Contribution from CFD and the paydown of the CFD Advance.
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 an administrative activity that will not result in direct or indirect physical changes in the environment.
FISCAL IMPACT
As discussed, staff recommends the budget amendments detailed in the tables below:
Operating Budget
|
Description |
Current |
Increase / (Decrease) |
Revised |
|
Senior & Youth Program Fees Revenue |
$234,000 |
$16,000 |
$250,000 |
|
Senior & Youth Fees (paid to City) Expense |
$234,000 |
$16,000 |
$250,000 |
|
Use of StadCo Tenant Improvements Expense |
$121,065 |
$11,935 |
$133,000 |
|
Ending Fund Balance - Renovation/Demolition Reserve |
$10,840,810 |
$(11,935) |
$10,828,875 |
Debt Service Budget
|
DescriptionCurrentIncrease / (Decrease)Revised |
|
|
|
|
Contribution from CFD Revenue |
$2,696,000 |
$521,000 |
$3,217,000 |
|
CFD Advance Expense |
$2,379,000 |
$521,000 |
$2,900,000 |
COORDINATION
This report was coordinated with the Stadium Manager per section 4.6 of the Management Agreement as well as the Stadium Authority Counsel’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 <mailto:clerk@santaclaraca.gov> or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
1. Note and file the Santa Clara Stadium Authority Financial Status Report for the Quarter Ending December 31, 2023.
2. Approve a budget amendment in the Operating Budget to increase the Senior & Youth Fee Expense in the amount of $16,000, offset by an increase in the Senior & Youth Program Fees Revenue;
3. Approve a budget amendment in the Operating Budget to increase the Use of StadCo Tenant Improvements Expense in the amount of $11,935, offset by a decrease in the Renovation/Demolition Reserve fund balance; and
4. Approve a budget amendment in the Debt Service Budget to increase the CFD Advance Expense in the amount of $521,000, offset by an increase to the Contribution from CFD Revenue.
Staff
Reviewed by: Kenn Lee, Treasurer
Approved by: Jovan D. Grogan, Executive Director
ATTACHMENTS
1. SCSA Financial Status Report for the Quarter Ending December 31, 2023