REPORT TO STADIUM AUTHORITY BOARD
SUBJECT
Title
Report from the Stadium Authority for Action Regarding Stadium Manager’s Request to Execute Second Amendment to Agreement with Bear Electrical Solutions, Inc. for Levi’s Naming Rights Existing Signage Lighting and Driver Repair CapEx Project and Agreements with HY Floor and Gameline Painting, Inc. for Club Space Flooring CapEx Project and Bear Insulation, Inc. for Stadium Insulation CapEx Project and Approve Related Budget Amendment
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approved Ordinance No. 2005 amending Chapter 17.30 of the City Code (Stadium Authority Procurement Policy), which rescinded the delegation to the Executive Director to enter into agreements without prior Board approval.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 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 the Stadium Authority and ManCo.
The Stadium Manager is requesting approval for the following actions:
Levi’s Naming Rights Existing Signage Lighting and Driver Repair CapEx Project
1. Execute an Amendment No. 2 to the agreement with Bear Electrical Solutions, Inc. to increase the not to exceed amount for the second year of the agreement term by $420,000 to $670,000. The $420,000 will be used to cover the cost of the Levi’s Naming Rights Existing Signage Lighting and Driver Repair CapEx Project.
This project is included in the Stadium Authority FY 2022/23 CapEx Budget under the Levi’s Naming Rights Existing Signage and Driver Repair line item, which is budgeted for $420,000.
Club Space Flooring CapEx Project
1. Award a one-time agreement to HY Floor and Gameline Painting, Inc. in the amount of $48,300 for refinishing engineered hardwood flooring surfaces in both BNY Mellon East Club and BNY West Club at Levi’s Stadium;
2. Authorize Stadium Manager to execute any and all documents associated with, and necessary for the award, completion, and acceptance of this Project; and
3. Authorize Stadium Manager to execute change orders up to approximately 10% of the contract cost, or $4,830, for a total not to exceed amount of $53,130.
This project is included in the Stadium Authority FY 2022/23 CapEx Budget under the Club Space Flooring line item, which is budgeted for $89,250.
Stadium Insulation CapEx Project
1. Award a one-time agreement to Bear Insulation, Inc., in the amount of $505,023 to furnish and install new insulation sheeting at Levi’s Stadium;
2. Authorize Stadium Manager to execute any and all documents associated with, and necessary for the award, completion, and acceptance of this Project; and
3. Authorize Stadium Manager to execute change orders up to $12,477 for a total not to exceed amount of $517,500.
This project is not included in the Stadium Authority FY 2022/23 CapEx Project and a budget amendment would be required to approve the Stadium Manager’s request.
DISCUSSION
Stadium Authority staff reviewed the Recommendation for Award memos, supporting procurement documents, and agreements with Bear Electrical Solutions, Inc., HY Floor and Gameline Painting, Inc., and Bear Insulation, Inc. (these documents are attached to corresponding report #22-484). The following comments are to advise the Board of noteworthy items that it should be aware of while considering the requests:
Levi’s Naming Rights Existing Signage Lighting and Driver Repair CapEx Project
On April 20, 2021, the Stadium Authority Board approved a three-year agreement with Bear Electrical Solutions, Inc. for electrical maintenance and repair services at Levi’s Stadium, in an amount not to exceed $250,000 per contract year and subject to budget appropriations for every contract year. On September 7, 2021, the Board approved a budget amendment of $250,000 to the Stadium Authority FY 2021/22 CapEx Budget for the Levi’s Signage Repairs project and an amendment to the agreement with Bear Electrical Solutions, Inc. to increase the not to exceed amount from $250,000 to $500,000 for the first year of the agreement term to cover the cost of interim signage repairs. The agreement’s not to exceed amount will total $1.42 million over the three-year term, subject to budget appropriations, if this second amendment to the agreement with Bear Electrical Solutions, Inc. is approved.
It is staff’s understanding that ongoing repairs are needed for the Levi’s Naming Rights signage and this CapEx project will take care of those immediate needs in accordance with Board direction. Staff will bring back additional information to the Board in May and will work with the Stadium Manager and Naming Rights Sponsor on a longer-term plan for the signage including possible options for repairing or replacing the signage, again in accordance with Board direction.
Club Space Flooring CapEx Project
The description for this project in the FY 2022/23 CapEx Budget includes hardwood flooring work for BNY East & West and the Levi’s 501 Club spaces. As noted in the Stadium Manager’s Recommendation for Award memo for this project, it was determined that no hardwood flooring work in Levi’s 501 Club is required at this time. If any additional work is needed for Levi’s 501 Club in the future, a new CapEx project budget request will be submitted at that time.
Stadium Insulation CapEx Project and Related Budget Amendment
The project was included in the Stadium Authority FY 2021/22 CapEx Budget under the Stadium Insulation line item, which was originally budgeted for $157,500. On January 11, 2022, the Board approved a budget amendment to increase the budget for the project by $360,000 to a total of $517,000. At the time, the Stadium Manager communicated that it wanted to begin the work in February 2022.
As described in the Stadium Manager’s Recommendation for Award for this project, the Stadium Manager’s Request for Bids process did not close until March 30, 2022. This project was not carried forward from the FY 2021/22 CapEx Budget, therefore a budget amendment is required to add the project to the FY 2022/23 CapEx Budget if the Board decides to approve the Stadium Manager’s request to award an agreement to Bear Insulation, Inc. and a 2.5% contingency for change orders.
Aside from the comments above, staff recommends that the Stadium Manager’s request for delegated authority to execute any and all documents associated with, and necessary for the award, completion, and acceptance of the Club Space Flooring and Stadium Insulation CapEx Projects, and change orders be delegated instead to the Executive Director.
Section 2.1 in the First Amendment to the Management Agreement states that the Stadium Manager only has the ability to enter into contracts with providers to the extent it has authority to enter into such Stadium Procurement contracts pursuant to the Santa Authority Procurement Policy. Currently, the Executive Director has no procurement delegated authority under the Stadium Authority Procurement Policy. As such, if the Board approves staff’s recommendation to provide the Executive Director with such authority to execute any and all documents associated with, and necessary for the award, completion, and acceptance of the project; and change orders up to $12,477, the Stadium Manager would not have the same authority to do so.
The Executive Director recently administratively approved a Change Order #1 to an agreement with R.E. Cuddie Co. with the delegated authority that the Board provided on October 19, 2021 for the Non-Slip Matting CapEx Project. This approach accomplishes the expediency that the Stadium Manager seeks and is compliant with the First Amendment to the Management Agreement.
Staff recommends approval of the Stadium Manager’s remaining requests to authorize execution of:
• Amendment No. 2 to the agreement with Bear Electrical Solutions, Inc. for the Levi’s Naming Rights Existing Signage Lighting and Driver Repair CapEx Project,
• Agreement with HY Floor and Gameline Painting, Inc. for the Club Space Flooring CapEx Project, and
• Agreement with Bear Insulation, Inc. for the Stadium Insulation CapEx Project and related budget amendment.
The Stadium Authority will require full supporting documentation including compliance with prevailing wage laws, if applicable, before 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 Stadium Authority FY 2022/23 CapEx Budget includes $420,000 for the Levi’s Naming Rights Existing Signage Lighting and Driver Repair line item. There are sufficient funds to cover the cost increase that is outlined in the second amendment to the agreement with Bear Electrical Solutions, Inc. ($420,000).
The Stadium Authority FY 2022/23 CapEx Budget includes $89,250 for the Club Space Flooring line item. There are sufficient funds to cover the total cost of agreement ($48,300) and the 10% contingency ($4,830) that the Stadium Manager is requesting (a total of $53,130).
As discussed above, the Stadium Insulation Project is not part of the Stadium Authority FY 2022/23 CapEx Budget and the Board will need to approve a $517,500 budget amendment to add the project. These funds will be offset by a decrease in the Stadium Authority Capital Expense Reserve. The budget amendment will fund the agreement with Bear Insulation, Inc. ($505,023) and a 2.5% contingency ($12,477) that is being requested by the Stadium Manager.
The Stadium Manager advertised the Request for Bids in the San Jose Mercury News publication for a total of $1,443 for the Club Space Flooring and Stadium Insulation projects. On July 13, 2021, the Stadium Authority Board previously approved up to $20,000 for the Stadium Manager to publish legal notices in the San Jose Mercury News and Santa Clara Weekly for various solicitations, which would cover these procurement advertising costs.
The table below summarizes the budget amendment as discussed above:
|
CapEx Project |
Adopted Budget |
Increase/ (Decrease) |
Amended Budget |
|
Stadium Insulation Project |
$0 |
$517,500 |
$517,500 |
|
Capital Expense Reserve |
$4,157,794 |
($517,500) |
$3,640,294 |
COORDINATION
This report has been coordinated with the City’s 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 <mailto:clerk@santaclaraca.gov> or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation:
1. Approve the Stadium Manager’s request to execute an Amendment No. 2 to the agreement with Bear Electrical Solutions, Inc. to increase the not to exceed amount from $250,000 to $670,000 for the second year of the agreement term to cover the cost of the interim repairs (for a total not to exceed amount of $1.42 million over the initial three-year term), subject to budget appropriations for every contract year, and authorize the Executive Director to approve and process the reimbursement of such costs upon receiving final invoices and supporting documentation from the Stadium Manager;
2. Approve the Stadium Manager’s request to execute a one-time agreement with HY Floor and Gameline Painting, Inc. for refinishing engineered hardwood flooring surfaces in both BNY Mellon East Club and BNY West Club at Levi’s Stadium (Club Space Flooring CapEx Project) in the amount of $48,300; authorize the Executive Director to approve the execution of any and all documents associated with, and necessary for the award, completion, and acceptance of the project; authorize the Executive Director to approve the execution of change orders up to approximately 10% of the contract cost, or $4,830, for a total not to exceed amount of $53,130; and authorize the Executive Director to approve and process the reimbursement of such costs upon receiving final invoices and supporting documentation from the Stadium Manager;
3. Approve a budget amendment to include the Stadium Insulation CapEx Project in the Stadium Authority FY 2022/23 CapEx Budget in the amount of $517,500 from Stadium Authority Capital Expense Reserve; and
4. Approve the Stadium Manager’s request to execute a one-time agreement with Bear Insulation, Inc. to furnish and install new insulation sheeting at Levi’s Stadium (Stadium Insulation CapEx Project) in the amount of $505,023; authorize the Executive Director to approve the execution of any and all documents associated with, and necessary for the award, completion, and acceptance of the project; authorize the Executive Director to approve the execution of change orders up to $12,477, for a total not to exceed amount of $517,500; and authorize the Executive Director to approve and process the reimbursement of such costs upon receiving final invoices and supporting documentation from the Stadium Manager.
Staff
Prepared by: Christine Jung, Assistant to the Executive Director
Reviewed by: Office of the City Manager