REPORT TO STADIUM AUTHORITY BOARD
SUBJECT
Title
Action on Stadium Manager’s Request to Approve an Amendment No. 3 to the Agreement with Bear Electrical Solutions, Inc. to Extend the Term and Increase Rates for Electrical Maintenance and Repair Services at Levi’s Stadium
Report
BOARD PILLAR
Ensure Compliance with Measure J and Manage Levi’s Stadium
BACKGROUND
As the Stadium Manager of Levi’s Stadium, Forty Niners Stadium Management Company LLC (Stadium Manager) 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 Stadium Management Agreement between the Stadium Authority, Forty Niners SC Stadium Company LLC (StadCo), and Stadium Manager.
As described in an April 20, 2021 report to the Stadium Authority Board (Board), the Stadium Manager conducted a Request for Proposal (RFP) process for electrical and maintenance repair services for the Stadium. Four proposals were received and after the evaluation process, Bear Electrical Solutions, Inc. and Cupertino Electric, Inc. were selected as the most competitive and responsive bidders to perform the required scope of work. The Stadium Manager recommended award to both vendors for the purpose of having master agreements in place for electrical and maintenance repair services and planned to use the vendors for specific task orders and award work based on responsiveness, availability, cost, and expertise. On April 20, 2021, the Stadium Authority Board approved the Stadium Manager’s request to execute agreements with both vendors to perform electrical maintenance and repair services at Levi’s Stadium.
The Agreement with Bear Electrical Solutions, Inc. (Agreement) (Attachment 1) includes an initial term of three years with the option to extend for two additional one year periods, in an amount not to exceed $250,000 per contract year, for a total not to exceed amount of $750,000 over the three year period beginning May 5, 2021 through May 4, 2024.
On September 7, 2021, the Board approved the Stadium Manager’s request to execute an Amendment No. 1 to the Agreement with Bear Electrical Solutions, Inc. (Attachment 2) to increase the not to exceed amount from $250,000 to $500,000 for the first year of the agreement term, for a total not to exceed amount of $1,000,000 over the initial three-year term, to cover costs associated with the Levi’s Signage Repairs CapEx Project.
On May 10, 2022, the Board approved the Stadium Manager’s request to execute an Amendment No. 2 to the Agreement with Bear Electrical Solutions, Inc. (Attachment 3) to increase the not to exceed amount for the second year of the agreement term from $250,000 to $670,000, for a total not to exceed amount of $1,420,000 over the three-year term, to cover costs associated with the Levi’s Naming Rights Existing Signage Lighting and Driver Repair CapEx Project.
The Stadium Manager is now requesting approval to execute an Amendment No. 3 to the Agreement with Bear Electrical Solutions, Inc. (Attachment 4) to extend the term for one year beginning May 5, 2024 through May 4, 2025, with an option to extend for one additional year, in an amount not to exceed $350,000 for the fourth contract year and a total not to exceed amount of $1,770,000 over the entire four year term. The proposed Amendment No. 3 to the Agreement also increases the compensation rates that are outlined under Exhibit G-1.
A Recommendation for Award Memo was submitted describing the Stadium Manager’s request in more detail (Attachment 5).
DISCUSSION
The Stadium is a 1.8 million square foot facility that utilizes complex electrical systems that requires a contractor’s expertise, on-call, and as needed services to provide the required maintenance and repair of the electrical components throughout the Stadium. There is a continued need for these services from a contractor capable of handling the wide range of electrical repairs and maintenance required for the Stadium.
As described in the Stadium Manager’s Recommendation Memo, the Stadium Manager originally sought to exercise one-year extensions to the agreements with Bear Electrical Solutions, Inc. and Cupertino Electric, Inc. Bear Electrical Solutions provided a rate increase of 3.2%, which is within the Consumer Price Index (CPI) increase experienced by the region since the original rates were approved in 2021. Cupertino Electric, Inc. provided higher rate increases that ranged between 20-33%. As such, the Stadium Manager is proposing to move forward with only extending the Agreement with Bear Electrical Solutions, Inc., which will increase the compensation rates to those reflected in Exhibit G-1 and increase the not to exceed amount for the fourth contract year accordingly to ensure there are sufficient funds to cover the required services that will now be performed by one vendor.
The rates for the Agreement’s initial three-year term (Years 1-3) and the proposed extension (Year 4) are summarized in the table below:
Based on the information above and review of the Stadium Manager’s request, staff recommends approval of the Stadium Manager’s request to execute an Amendment No. 3 to the Agreement with Bear Electrical Solutions, Inc. to ensure continuity of electrical maintenance and repair services at Levi’s Stadium. The Stadium Manager plans to issue a formal solicitation for electrical maintenance and repair services in the coming months.
The Stadium Authority Counsel’s Office has reviewed the Amendment No. 3 to the Agreement with Bear Electrical Solutions, Inc. for comparison to the Stadium Authority’s customary language. Nothing in the proposed Amendment No. 3 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 actions being considered do 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 or 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 Stadium Authority Fiscal Year (FY) 2024/25 Budget contains Shared Stadium Expenses such as Security, Stadium Operations, Engineering, Guest Services, and Groundskeeping. Shared Stadium Expenses are split 50/50 between the Stadium Authority and StadCo per the Stadium Lease. There are sufficient funds in the FY 2024/25 Shared Stadium Expenses Engineering line item to cover Stadium Authority’s fifty percent (50%) of the Shared Stadium Expenses portion of the agreement cost for the fourth contract year (up to $175,000). As the agreement term covers multiple fiscal years (FY 2024/25 and FY 2025/26), the term for FY 2025/26 is conditioned upon approval of the Stadium Authority budget for that fiscal year.
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.
RECOMMENDATION
Recommendation:
Approve the Stadium Manager’s request to execute an Amendment No. 3 to the Agreement with Bear Electrical Services, Inc. to extend the term for one year beginning May 5, 2024 to May 4, 2025 with an option to extend for one additional year, in an amount not to exceed $350,000 for the fourth contract year and a total not to exceed amount of $1,770,000 over the four year term, subject to budget appropriations.
Staff
Reviewed by: Chuck Baker, Assistant City Manager
Approved by: Jovan D. Grogan, Executive Director
ATTACHMENTS
1. Agreement with Bear Electrical Solutions, Inc.
2. Amendment No. 1 to the Agreement with Bear Electrical Solutions, Inc.
3. Amendment No. 2 to the Agreement with Bear Electrical Solutions, Inc.
4. Proposed Amendment No. 3 to the Agreement with Bear Electrical Solutions, Inc.
5. Stadium Manager’s Recommendation Memo