City Council Memorandum
TO: HONORABLE MAYOR AND CITY COUNCIL DATE: APRIL 25, 2023 FROM: COMMUNITY & ECONOMIC DEPARTMENT WARD: 1
DEPARTMENT
SUBJECT: FINANCIAL UPDATE FOR THE FIRST SIX MONTHS OF OPERATION FOR THE CHEECH MARIN CENTER FOR CHICANO ART AND CULTURE OF THE RIVERSIDE ART MUSEUM ISSUE:
This is a financial update for the first six months of operation of The Cheech.
RECOMMENDATION:
That the City Council receive and file a financial update on the first six months of operation of The Cheech Marin Center for Chicano Art and Culture of the Riverside Art Museum.
BACKGROUND:
On January 19, 2021, the City Council approved the Management Agreement for The Cheech Marin Center for Chicano Art and Culture with the Riverside Art Museum (“RAM”) for an initial term of 25 years with two optional five-year terms.
On June 18, 2022, The Cheech Marin Center for Chicano Art and Culture (The Cheech) opened to the public. Activities to highlight this new Museum included receptions, a gala, concerts, and the civic dedication. The Cheech is currently open six days per week but modifies the schedule for holidays, school schedules, special events, and programs. The exhibition of Cheech Collects continues through spring. The new exhibit of Mexicali Biennial: The Land of Milk and Honey opened in February.
City staff and RAM have met regularly to discuss programming, administration, marketing, and financial aspects of the Management Agreement.
The Management Agreement outlines a structure for RAM and the City to provide, discuss, and report on accounting and financial aspects. The structure and information that is required and responsibilities of both parties are clearly outlined for accounting, financial records, reporting, payment of Facility Fee, the responsibility of operating expenses, budget, and audit between RAM and the City.
Highlighted in the Management Agreement are the following with the status of each:
Maintain a separate account for Facility Fees collected – Complete Maintenance of Financial Accounts – Complete
Payment of Facility Fees in a timely manner – Complete
Responsibility of Operating Expenses by RAM – Complete
Records and Annual Audit:
First Six (6) Month period, mid-year – Complete
Annual Audit – Not applicable until after the first year is finished Annual Budget – Complete
Diversified Revenues – Complete
RAM has met the terms of the Management Agreement with reporting and submittals for the first six months.
In January 2023, the team agreed to final reporting details in compliance with the Management Agreement. These components include:
timing and format;
financial and operational content;
format of the report; and
information required and format for reporting to the City.
DISCUSSION:
A responsibility for RAM in the Management Agreement is to provide, within forty-five days after the first six-month period, a mid-year report to the City. RAM provided that information prior to the end of the forty-five days. Staff from the Finance and Community and Economic Development Departments have reviewed the report. Below is a synopsis of the information provided.
Attendance
June – January 31, 2023
(6 months)
Individual Attendance
Attendance including Facility Maintenance Fee (FMF)
Percentage of Attendance including FMF
Total Admissions
80,142
57,314
72%
Total Facility Rentals
1,899
1,899
100%
Total Tours (teen + adult)
1,872
1,872
100%
Total Education Program (including Walk and Wonder, education, etc.) 4,873
0 0
Grand Total
88,786
61,085
69%
The total number of attendance includes programs and events (e.g., Artswalk, First Sundays, etc.) that are called out in the agreement and does not pay a facility fee.
Admissions and Revenue
Projected Attendance
Six Months
Projected
Attendance
Year One
Delta
Actual
June 14, 2022 – January 31, 2023
Admissions
50,000
100,000
11,214
88,786
Revenue
$125,000
$250,000
$98,401
$151,599
Facility Maintenance Fee
The Facility Maintenance Fee is added to the price of admissions to the Center and for Facility Rental Events to help underwrite the maintenance and operation. The Facility Maintenance Fees are as follows:
Adults $3.00
Children (0-13) $1.00
Seniors (65+) $1.00
Facility Rental Participant $1.00
Free Admission Programs that do not require a Facility Maintenance Fee are RAM Trustee and Art Alliance functions; RAM sponsored events open to the public, such as Arts Walk, Artists Talks, First Sundays; Youth Education; Active-Duty Military and Family; Voices for Children; Big Brothers and Sisters; and North American Reciprocal Museum.
Outlined in the January 2021 City Council report was a revenue estimate of Facility Maintenance Fees of $250,000 and attendance of 100,000. As depicted in the tables above, both the revenue and attendance estimates have been exceed at the halfway or 6-month mark.
Statement of Activities
Staff received the unaudited Statement of Activities through November in compliance with the terms of the Agreement. Revenue categories include: Admission; Donation; Exhibition; Education; Fundraising; Grant; Rent; Sales; and City Management Fee. The revenue categories show the diversity of income sources that RAM is using, not solely relying on the management fee for the operation of The Cheech.
Future Plans
Arts and culture play an essential role in the quality of life for the community, beyond that, arts and culture positively contribute to our economy by generating revenue, creating jobs, and attracting visitors. City staff are currently in the process of developing a Request for Proposal for an economic impact analysis on The Cheech. The economic impact of the study will include:
Direct impact, which measures the economic benefit of museum operations and activities; Indirect impact, activity that is generated as museums makes purchases/services from a wider supply chain; Induced impact, monies spent by employees/visitors/etc. in the community (coffee, gifts, hotel, etc.); Tax revenue at the local, state, and federal levels; and Equivalent full-time employees
As we move forward, City Staff and RAM staff will continue to meet and regularly be evaluating and assessing the agreement, financial obligations, programming, and marketing between the two organizations per the benchmarks, dates, and information required as outlined in the agreement.
STRATEGIC PLAN ALIGNMENT
This item contributes to Strategic Priority 1 – Arts, Culture and Recreation and Goal 1.1 - Strengthen Riverside’s portfolio of arts, culture, recreation, senior, and lifelong learning programs and amenities through expanded community partnerships, shared use opportunities, and fund development.
This item also contributes to Strategic Priority 5 – High Performing Government, and Goal 5.4 - Achieve and maintain financial health by addressing gaps between revenues and expenditures and aligning resources with strategic priorities to yield the greatest impact.
The item aligns with each of the five Cross-Cutting Threads as follows:
Community Trust – Staff and RAM will present an annual update to City Council to convey updates, trends, and programs on the investment that the community has made to The Cheech.
Equity –The Riverside Art Museum will continue to provide diverse programming as outlined in the original agreement.
Fiscal Responsibility – The First Amendment provided clear language and consistency within the agreement for the prudent and fiscal use of the facility fee revenue.
Innovation –The Cheech is innovative, original, and exciting with programming and opportunities as the only Chicano Museum in the country.
Sustainability & Resiliency – Regularly scheduled presentations on the financial and programmatic elements of the agreement aligns resources efficiently and productively for the City and Riverside Art Museum.
FISCAL IMPACT:
There is no fiscal impact associated with this report.
Prepared by: Jennifer Lilley, Community & Economic Development Director Certified as to
availability of funds: Edward Enriquez, Interim Assistant City Manager/Chief Financial Officer/City Treasurer
Approved by: Rafael Guzman, Assistant City Manager
Approved as to form: Phaedra A. Norton, City Attorney
Attachment: Presentation
The Cheech Six Month Financial Update