REPORT TO STADIUM AUTHORITY BOARD
SUBJECT
Title
Report from the Stadium Authority Regarding the Stadium Manager’s Request to Execute Agreements with Hellmuth, Obata & Kassabaum, Inc., HKS Architects, Inc., M. Arthur Gensler Jr. & Associates, Inc., and Populous, Inc. for Architectural and Engineering Professional Services
Report
BOARD PILLAR
Ensure Compliance with Measure J and Manage Levi’s Stadium
BACKGROUND
On October 8, 2019, the Stadium Authority Board (Board) approved Ordinance No. 2005 amending Chapter 17.30 of the City Code (Stadium Authority Procurement Policy), which rescinded the delegation to the Executive Director to enter into agreements without prior Board approval. As result of Ordinance No. 2005, the Stadium Manager is also required to request Board approval before entering into agreements on behalf of the Stadium Authority. As of the effective date of the Ordinance (November 8, 2019), all Stadium Authority agreements for services, supplies, materials, and equipment require the approval of the Stadium Authority Board.
As the Stadium Manager, Forty Niners Stadium Management Company, LLC (ManCo), is responsible for maintaining “the Stadium in the Required Condition and operate the Stadium as a quality NFL and multi-purpose public sports, public assembly, exhibit and entertainment facility” as required by the Management Agreement between ManCo and the Stadium Authority.
The Stadium Manager is requesting approval for the following:
1. Execute five-year Master Agreements with Hellmuth, Obata & Kassabaum, Inc., HKS Architects, Inc., M. Arthur Gensler Jr. & Associates, Inc., and Populous, Inc. for architectural and engineering professional services. The aggregate compensation for the four agreements will not exceed an aggregate maximum of $1M per contract year. Collectively, the request is for an aggregate maximum amount of $5M over the five-year period for the four agreements and is subject to the Board’s funding approval as part of the annual budgeting process. The services will be charged to applicable CapEx and Shared Stadium Expense line items; and
2. Issue individual task orders to the four firms for services based on various criteria including demonstrated experience and expertise in specific areas that best meets the needs of a given project and availability of staff for specific projects. Compensation to the firms will be tracked through approved task orders, and total compensation shall not exceed an aggregate maximum of $1M across the four firms per contract year.
Chapter 17.30.070 of the City Code states that, “Except for reserved purchase order numbers assigned by the purchasing officer, the purchasing officer shall not issue any purchase order or award any contract for supplies, materials, or equipment unless there exists an unencumbered appropriation in the proper account of the Stadium Authority to which the purchase is to be charged.” However, the Stadium Manager does note in its Recommendation for Award memo that the term for subsequent fiscal years shall be conditioned upon approval of the Stadium Authority budget for the applicable fiscal year that includes the amounts due under these contracts.
DISCUSSION
On October 5, 2021, Stadium Authority staff received the Stadium Manager’s original Recommendation for Award memo, supporting procurement documents, and agreements with Hellmuth, Obata & Kassabaum, Inc., HKS Architects, Inc., M. Arthur Gensler Jr. & Associates, Inc. (these documents are attached to corresponding report #21-1467). The original Recommendation for Award memo requested five-year agreements with the four firms, each with a not to exceed amount of $1M per contract year and not to exceed amount of $5M over the initial five-year term (for a combined not to exceed amount of $20M over the five years between the four agreements). However, the memo stated that the Stadium Manager did not foresee a situation where it would issue task orders to all four firms for $1M in any single year.
Architectural and engineering design services are normally incorporated into a capital project’s budget and on average are about 15% of the project’s construction cost. The City follows an approach of requesting delegated authority from the Council to amend agreements to increase and/or defund within an approved aggregate amount when there are multiple vendor agreements for identical services. The aggregate amount is based on the anticipated spend. Staff shared this information with the Stadium Manager, asked for information regarding the Stadium Manager’s anticipated aggregate spend, and proposed a modification to the request so that it reflects the actual anticipated aggregate spend.
The Stadium Manager agreed with staff’s recommendation to adjust its request for funding to reflect the anticipated aggregate spend and submitted a revised Recommendation for Award memo and new Master Agreements with Task Order Forms. This approach allows for the flexibility desired by the Stadium Manager, maintains the Stadium Manager’s ability to receive competitive pricing from multiple proposals, streamlines the Board approval process, and does not tie up unnecessary public funds.
Staff recommends approval of the Agreements with Hellmuth, Obata & Kassabaum, Inc., HKS Architects, Inc., M. Arthur Gensler Jr. & Associates, Inc., with maximum compensation up to an aggregate maximum of $1M per contract year and a maximum aggregate amount of $5M over the five years, subject to appropriations of funds for subsequent fiscal years, and delegated authority to the Stadium Manager to issue task orders to the four firms for required services so long as they do not exceed the maximum aggregate of $1M per contract year. Additionally, staff recommends that the Board delegates authority to the Executive Director to approve amendments to the maximum aggregate funding amount as needed, subject to the appropriation of funds, without further Board action. This last recommendation will streamline the approval process if any additional funds are required by the Stadium Manager, while ensuring funding oversight.
The Stadium Authority will require full supporting documentation including compliance with prevailing wage laws, if applicable, before respectively releasing public funds upon completion of work. This requirement is consistent with the Stadium Authority Board’s March 27, 2019 direction to staff to stop payment of any additional invoices for services unless there is substantial documentation of services rendered which must also be in compliance with State law and City Code.
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(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 term of each Master Agreement is five years beginning on November 15, 2021 and ending on November 14, 2026. The Agreements will be funded as tasks are assigned, subject to the appropriation of funds.
FY 2021/22 funding for the agreements is available in specific Stadium Manager capital projects within the FY 2021/2022 Stadium Authority CapEx Budget and Legal Contingency for Shared Stadium Manager Expenses. As part of its March 23, 2021 approval of the FY 2021/22 Budget, the Stadium Authority Board delegated budget amendment authority to the Executive Director for Shared Expenses from the Legal Contingency. The Executive Director will approve budget amendments as needed to reallocate funds from the Legal Contingency to specific Shared Expenses line items upon the Board’s approval of staff’s recommendations and as needed for these services.
COORDINATION
This report has been coordinated with the City’s Director of Public Works and Purchasing Manager, Stadium Treasurer’s Office, and Chief Assistant City Attorney.
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.
RECOMMENDATION
Recommendation:
1. Approve the Stadium Manager’s request to execute Master Agreements with Task Order Forms with Hellmuth, Obata & Kassabaum, Inc., HKS Architects, Inc., M. Arthur Gensler Jr. & Associates, Inc., and Populous, Inc. with a term ending on November 14, 2026 and for a maximum aggregate amount of $1M per contract year and maximum aggregate amount of $5M over the five year term, subject to the appropriation of funds;
2. Authorize the Stadium Manager to execute task orders to the four firms up to a maximum aggregate amount of $1M per contract year without further Stadium Authority Board action and subject to the appropriation of funds; and
3. Authorize the Executive Director to approve amendments to the maximum aggregate funding amount as needed, subject to the appropriation of funds, without further Stadium Authority Board action.
Staff
Prepared by: Christine Jung, Assistant to the Executive Director
Reviewed by: Deanna J. Santana, Executive Director