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Supervisors press OEWD on America's Cup $12 million budget and fundraising risks
Summary
OEWD presented a proposed $12 million America's Cup allocation and described mechanisms to hold funds until organizers certify receipts; supervisors raised concern the organizing committee has only secured about $2 million so far and asked about controller safeguards.
The Budget and Finance Committee on Wednesday pressed the Office of Economic and Workforce Development over city costs related to the America's Cup, where the department says the city is budgeting roughly $12 million for the next fiscal year.
Jennifer Matz, director of OEWD, told supervisors the $12 million estimate would cover direct staffing ($819,000), permitting ($1.7 million), port revenue backfill ($2.1 million) and additional event costs. "That being said, we do not expect these dollars to be used to pay existing staffing costs," Matz said, adding that departments must include America's Cup work in their work plans.
Keri McClellan, executive director of the America's Cup Organizing Committee, told the committee the organizers have raised just over $2 million in about 60 days and are working to finalize tax-exempt status and sponsorship programs. "We are exceptionally confident that we'll be able to make our commitment of $12,000,000 by seven days after CEQA," McClellan said.
Committee members sought more certainty about the timeline and whether the city would restrict spending until revenues are certified. "One potential mechanism is putting the America's Cup budget on the controller's reserve, which effectively says that we can't spend revenue associated with this initiative until the controller certifies that those dollars are actually in," Matz said.
Monique Smuda of the Controller's Office said the office would record a receivable against expected revenues and that the appropriation would permit departments to enter contracts and incur expenses; she did not commit to a month-by-month reserve. Budget analysts recommended further discussion and minor reductions to OEWD pending that clarification.
The committee asked OEWD and the city's budget office to return with more detailed creditor protections and a clearer plan for phasing or certifying America’s Cup funds before the Board finalizes the budget.
