REPORT TO STADIUM AUTHORITY BOARD
SUBJECT
Title
Action on the Santa Clara Stadium Authority Financial Status Report for Quarter and Fiscal Year Ending March 31, 2024 and 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 fourth quarter of the 2023/24 fiscal year (FY) which runs from January 1, 2024 - March 31, 2024.
The Adopted Stadium Authority Budget incorporates the estimated revenues and expenses for all Stadium Authority funds. As a part of the Stadium Authority policy to ensure adherence to the budget, a budget/encumbrance control system is used to ensure proper budgetary control. Budgetary appropriation control for expenditures are maintained at the fund level. 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 fourth quarter (January 1, 2024 - March 31, 2024) 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 twelve NFL games held through the fourth quarter of FY 2023/24. Levi’s® Stadium hosted two pre-season NFL games of the 2023 season on August 19th and 25th, eight regular NFL season games and two NFL play-off games in the 2023 season. This resulted in $12.7 million in NFL ticket surcharge revenues for the Stadium Authority and $250,000 of Senior and Youth Program Fees for the City. Public safety costs for NFL games totaled an estimated $6.4 million which will be fully reimbursed to the City by Forty Niners Stadium Management Company LLC (ManCo).
Non-NFL Event Revenue and Expenses
There were eight ticketed Non-NFL events and 53 special events which are detailed in the report. The eight ticketed Non-NFL events generated an average net profit of $716,000 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 $3.5 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 $8.3 million in net revenue (excluding surcharge revenue) through the end of the fourth quarter. This is a decrease of $542,000 from the prior year Non-NFL event net revenue of $8.8 million.
Table 2
Levi’s Stadium
Net Revenue for Non-NFL Events
by Event Type
Historical Year-to-Date Through March 31, 2024
(1) Other Operating Income are income not attributable to a specific event. Examples are interest income and reimbursements unrelated to a specific event.
(2) Other Operating Expenses are expenses not attributable to a specific event. Examples are event selling expenses, administrative expenses and miscellaneous costs.
(3) Net Revenue from Non-NFL Events does not include Non-NFL Event Ticket Surcharge of $1.6m.
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 64,993 currently active SBLs which is 98.3% of the 66,136 total sellable SBL seats. Through the fourth quarter, since inception, the value of the active SBLs amount to $555.0 million of which $529.4 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 $76.5 million representing 118% of the overall budget for revenues and total operating expenses were $21.0 million or 89% of the budget. The debt service fund was able to pay down $16.6 million in debt, bringing total Stadium Authority debt down to $228.7 million. Capital expenses were $7.0 million representing 33% of the overall Capital Expense (CapEx) budget.
FY 2024/25 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 12, 2024, the Stadium Authority Board adopted the Santa Clara Stadium Authority FY 2024/25 Operating, Debt Service, and Capital Budget. The following technical budget adjustments are recommended to true up fund balances to align the balances with FY 2023/24 actual performance:
Operating Budget:
1) Beginning Fund Balance / Ending Fund Balance Adjustment - The FY 2023/24 year-end actual was completed and fund balance adjustments reconciliation are necessary adjustments to the FY 2024/25 beginning and ending fund balances. Because the adoption of budget is conducted in March, estimates are used to determine the beginning and ending fund balances, including reserve amounts.
Debt Service Budget:
1) Beginning Fund Balance / Ending Fund Balance Adjustment - The FY 2023/24 year-end actual was completed and fund balance adjustments reconciliation are necessary adjustments to the FY 2024/25 beginning and ending fund balances. Because the adoption of budget is conducted in March, estimates are used to determine the beginning and ending fund balances, including reserve amounts.
CapEx Budget:
1) Beginning Fund Balance / Ending Fund Balance Adjustment - The FY 2023/24 year-end actual was completed and fund balance adjustments reconciliation are necessary adjustments to the FY 2024/25 beginning and ending fund balances. Because the adoption of budget is conducted in March, estimates are used to determine the beginning and ending fund balances, including reserve amounts.
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
The Stadium Authority FY 2023/24 budget appropriation is maintained at the fund level. At the end of FY 2023/24, spend was within budget as there were sufficient savings in the Operating, Debt Service and Capital Budget to cover any overages within each fund.
From time to time, adjustments to the budget are required to reflect new information and align budgets with actual revenues and expenses. Attachment 2 includes adjustments in the FY 2024/25 Operating Budget to adjust the Beginning/Ending Fund Balance to true up fund balances based on actual FY 2023/24 performance. In the FY 2024/25 Debt Service Budget, a technical adjustment to true up the Beginning/Ending Fund Balance based on actual FY 2023/24 performance is recommended. In the FY 2024/25 CapEx Budget a technical adjustment to true up the Beginning/Ending Fund Balance based on actual FY 2023/24 performance is recommended.
COORDINATION
This report was coordinated with the ManCo 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 and Fiscal Year Ending March 31, 2024; and
2. Approve the FY 2024/25 Budget Amendments in the Operating Budget in the amount of $3,864,901, Debt Service Budget in the amount of $126,179 and Capital Expense Budget in the amount of $78,024 to make technical actions to true up fund balances based on actual FY 2023/24 performance.
Staff
Reviewed by: Kenn Lee, Treasurer
Approved by: Jovan D. Grogan, Executive Director
ATTACHMENTS
1. SCSA Financial Status Report for the Quarter and Fiscal Year Ending March 31, 2024
2. FY 2024/25 Budget Amendments