REPORT TO COUNCIL
SUBJECT
Title
Action on the Santa Clara Convention Center FY 2019/20 2nd Quarter Financial Status Report [Council Pillars: Promote and Enhance Economic and Housing Development, Enhance Community Engagement and Transparency, and Sustainability]
Report
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 SCCC on March 18, 2019.
Staff is transmitting Spectra's SCCC status report to Council for compliance with agreement terms. This report has not been separately audited.
DISCUSSION
Submitted for Council information is a Financial Status Report for the 2nd quarter ended December 31, 2019, as submitted by Spectra. This report is unaudited and, therefore, subject to change.
As part of the management transition, there are several reporting additions and changes that are aligned with Spectra's accounting system. Some revenue and expenditure reporting groups are combined differently, and a new revenue recognition policy related to food and beverage activities has been implemented.
As discussed in the attached Quarterly Report, budget to actual financial results are as follows:
Table 1 - 2nd Quarter Summary Financial Summary
Projected in Budget
Actual
Difference
Gross Revenue
$5,514,011
$5,506,510
($7,501)
Total Expenses
$4,850,353
$4,604,309
($246,044)
Net Income
$663,659
$902,202
$238,543
As detailed in Table 1, gross event revenue was close to budgeted projections. Revenue performance in food and beverage (+$715,620 variance) was offset by lower rental (-$550,751 variance) and audio-visual rental needs (-$248,847 variance). Remaining categories generated higher than budgeted net revenue proceeds (+$76,477 variance).
Net expenses were under budget by $246,044. This was due to savings in audio-visual and IT services costs (+$243,181 variance) and indirect expenses (+$277,991 variance...
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