City of Santa Clara says 49ers using general funds for stadium operations

Image 1 of 2

(AP Photo/Ross D. Franklin)

SANTA CLARA (KTVU/BCN)— Santa Clara city officials are alleging the San Francisco 49ers of not providing financial documents for an audit that has found the team is spending general fund money on Levi's Stadium operations.
The team hasn't submitted records to the city such as a shared expense budget, stadium parking plan and five-year capital improvement plan required under Measure J, Mayor Lisa Gillmor said.

Late Monday night, the 49ers blasted the city-hired independent auditor calling his findings "disappointing."

The 49ers issued a memo to the auditor claiming he's acting more "as a consultant to the mayor looking to give credence to her unfounded allegations of financial malfeasance on the part of the 49ers, all timed to coincide perfectly with the mayor's election season goals." The memo went on to say no general fund money or other city funds have been used for Stadium Authority Operations as the team is in the process of sending and reformatting budget documents as requested.

The 49ers were in the process of sending the requested documents this afternoon, while a small amount of other records have to be formatted as requested by the auditors and will be submitted in the next few days, team spokesman Bob Lange wrote.

The 2010 Measure J passed by 60 percent of votes approved a proposal to build the 68,500-seat stadium, which opened in 2014 as a publicly owned facility built next to California's Great America theme park.

A report released in June by the Santa Clara County Civil Grand Jury investigating stadium operations found there were no financial reports or audits to make sure stadium expenditures were following Measure J.

A month later, the city hired San Francisco-based auditor Harvey Rose Associates LLC to audit the stadium management company, which is affiliated with the team, Gillmor said.
A preliminary audit report on Oct. 12 showed general fund money was being used on the stadium for public safety in violation of the measure, but it's still unclear how much was spent, Gillmor said.
The auditor told the city's Ad Hoc Stadium Audit Committee, comprised of the mayor and two City Council members, at its Thursday meeting that the 49ers haven't been cooperative or responsive with the review by not providing the required documents requested more than a month ago, Gillmor said.
"I'm curious to see what they submit to the city and our auditors because we were told last Thursday that these documents didn't exist," Gillmor said.
"It's two-and-a-half years of documents that provide the basis for the Stadium Authority budget and a level of detail of expenditures and revenue that we haven't seen in the past," she said.
The council is expected to discuss the team's potential breach of contract at its next public meeting on Nov. 15 under a referral by the ad hoc committee, according to Gillmor.
The council could find the 49ers violated its contract under Measure J and give the team 30 days to cure the breach, Gillmor said.
The mayor said she hasn't heard back from the team on whether or not they plan to send the required documents this afternoon.

If the team doesn't turn in the needed reports, it could delay the results of the audit that was estimated to be finished in January, Gillmor said.
The city manager has addressed the violation by telling city employees to make sure general fund money isn't being spent on the stadium, she said.
"The Mayor's accusations that money is going from the City's General Fund into the stadium are false and irresponsible," 49ers officials said in a statement issued over the weekend.
In the past two years, the team stadium management company has collected more than $5.5 million for the city's general fund and paid fees adding up to another $2 million, team officials said.

"The fact that we have two and half years and they haven't provided what they are supposed to provide in their agreements or dealt with us in a professional or respectful manner," said Gillmor. "We are standing up for ourselves and we are fighting for our city."
The stadium, hotels and other businesses have helped boost tax revenues that are added in the city's general fund, according to the team.

The 49ers first ruffled feathers with the City of Santa Clara over taking over neighboring soccer fields. Now, it's in a deeper hole after a preliminary audit suggests taxpayers are footing the bill to help operate Levi's Stadium.

"If we find out how much general fund money is being used, the 49ers are going to pay it back to our community," said Santa Clara Mayor Lisa Gillmor. "It could be tens of thousands, hundreds of thousands or in the millions. We just don't know."

"I think it was just a matter of time when the whole thing was going to up like this," said Deborah Bress of Santa Clara Plays Fair.

Bress is with "Santa Clara Plays Fair," a group of concerned citizens. In light of the audit, she's calling for more financial transparency.

"It's a public building in a public situation and we have a right as the public to know what's going on," said Bress.

The mayor has threatened to take over management of the stadium if the 49ers don't play ball and comply with their agreement with the city.