REPORT TO COUNCIL
SUBJECT
Title
Action on the Santa Clara Convention Center FY 2021/22 3rd 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 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.
Staff is transmitting Spectra’s SCCC status report to Council for compliance with agreement terms.
DISCUSSION
This report transmits for Council information, the Santa Clara Convention Center Financial Status Report for the 3rd quarter ending March 31, 2022, as submitted by Spectra. This report is unaudited and, therefore, subject to change.
As Spectra’s 3rd quarter report indicates, there were 46 events hosted by the Santa Clara Convention Center. There were 10 events in January 2022, 16 events in February 2022, and 20 events in March 2022.
The resurgence of COVID variants in late 2021 and early 2022 impacted the actual revenues vs. projected budget during the 3rd quarter. Both Spectra and Levy (Convention Center food and beverage manager) continue to review staffing levels and expenditures. Based on event needs, staffing levels varied from 10 to 17 throughout the quarter.
Based on bookings in the 4th quarter, both Spectra and Levy are optimistic that the Convention Center will meet its annual projections by the end of FY 21/22.
As discussed in the Quarterly report, budget to actual financial results are as follows:
Financial Summary - 3rd Quarter ended March 31, 2022
|
|
Projected in Budget |
Actual |
Budget Overage (Underage) |
|
Gross Revenue |
$2,731,735 |
$1,318,218 |
($1,413,517) |
|
Total Expense |
2,599,936 |
1,401,425 |
(1,198,511) |
|
Net Income |
$131,799 |
($83,207) |
($215,006) |
For the 3rd quarter ending March 31, 2022, Spectra reported a net operating loss of $83,207. Total expenses for the quarter were $1,401,425, or $1,198,511 less than the budgeted amount of $2,599,936. Total revenues were $1,318,218, or $1,413,517 less than the budgeted revenues of $2,731,735. Additionally, Spectra recognized $27,205 of other revenues in the 3rd quarter from cancelation fees.
As of March 31, 2022, Spectra reported a year-to-date net operating loss of $405,049, which consists of $3,280,265 in revenues and $3,685,314 in expenses.
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)(4) in that it is a fiscal activity that does not involve any commitment to any specific project which may result in a potential significant impact on the environment.
FISCAL IMPACT
The net operating loss incurred by the Convention Center for the 3rd quarter of FY 2021/22 is $83,207. This amount does not include any fiscal impact related to TOT, TID, and/or sales tax activity. As projected in the FY 2021/22 Adopted Operating Budget, any operating loss is anticipated to be fully covered by existing ending fund balance in the Convention Center Enterprise Fund.
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 3rd Quarter ending March 31, 2022, as submitted by Spectra.
Staff
Reviewed by: Kenn Lee, Director of Finance
Approved by: Rajeev Batra, City Manager
ATTACHMENTS
1. SCCC Activity Report for Third Quarter FY 2021/22