As Paul Harvey would say, “And now, the rest of the story.”
Santa Clara has been embroiled in an audit of our Stadium operations for the past seven months. An audit suggested by the Grand Jury, not ordered.
During the election, audit update meetings were conducted by the Mayor, with the press present. She often asked the Harvey M. Rose Associates (HMR), the auditors, if they had discovered any ticking time bombs.
HMR would use words like “inconsistencies”, and “irregularities” which were intended to lead voters to believe there was a smoking gun at Levi’s.
When the completed confidential draft audit report was discussed with the S.F. Chronicle by the Mayor a couple weeks ago, they took the bait. The Mayor led the newspaper to report alleged costs owed by the SF 49ers to the City of Santa Clara. However, there were no supporting facts.
Notice the Mercury News was not a participant. The SC Weekly reported on the 169-page audit conclusions that same week denoting numerous assumptions…absent documentation.
Now, it is the 49ers turn. In a 10-page legal response, ManCo, our Stadium Management Company, has decimated the conclusions of the HMR audit. One response question, “how can a non-qualified consulting company draw legal and accounting conclusions when they are neither a CPA nor an attorney firm?” That set the tone.
ManCo’s response succinctly challenges the extrapolations and estimates of the HMR audit, pointing out they do not understand the stadium contracts, their intent, or how they work.
This is very frustrating for several reasons. 1) The auditors could not produce any supporting documentation which led to their assumptive conclusions. 2) The audit makes allegations intended to inflame rather than inform. 3) The audit omitted any reference to the 49ers $1 million parking charge overpayment dispute, which they filed with the City last November and 4) The Council has spent over $200,000 of City money (plus staff time) without producing anything of substance that would withstand a court challenge.
It is apparent that Santa Clarans are becoming disenchanted with the Mayor’s “transparency” campaign. The live streaming “Town Hall” meetings, the City Hall Circus, and now this awful audit advocating audacious assumptions.
These items added to the “generous” 11.5% salary increase for our police force have raised serious questions on the direction our City is headed. The $50 million surplus we had last year will be disappearing at an alarming rate and we are now on track for a multi-million-dollar structural deficit beginning in 2019.
If you have followed local news in the Weekly, you are also aware Santa Clara has a $490 million unfunded pension liability. This works out to a $4,004 bill for every Santa Clara resident.
While the Mayor’s campaign against the 49ers during the election worked for the short term, the long-term effects are looking bleak for Santa Clara and very bright for the 49ers.
If our City was being run as efficiently as our stadium, you can bet we wouldn’t be facing the financial and legal issues now on the table.
That’s a story we would all enjoy.