City Council
Report
City Council Meeting: June 14, 2022
Agenda Item: 3.I
1 of 5
To: Mayor and City Council
From: David Martin, Director, Administration
Subject: Approval of Pier Corporation Fiscal Year 2022-23 Budget and Work Plan Recommended Action
Staff recommends that the City Council:
1. Approve the Santa Monica Pier Corporation Fiscal Year 2022-23 Budget and Work Plan;
2. Authorize the City Manager to execute a third modification to agreement #10101 with the Santa Monica Pier Corporation to extend the term through June 30, 2023;
3. Authorize the one-day reduction of Carousel Ticket Fare Rate to 5 Cents on September 15, 2022, in conjunction with the Santa Monica Pier Carousel Centennial Celebration.
Summary
The Santa Monica Pier has been welcoming visitors for over 113 years and is one of the region’s top visitor destinations. Annually over 9 million guests visit the pier, from Santa Monica locals, to visitors from around the region and world. The City contracts with the Santa Monica Pier Corporation (SMPC), through a Services Agreement to manage certain programs, services, and operations at the Pier including street performer monitoring, filming, event rentals, marketing/social media, and the production of community programing. The Council-appointed board is also charged with the development of guidelines pertaining to sponsorship, marketing, events and leasing for Council approval. The SMPC is required to prepare an annual budget and business work plan to set forth its goals and objectives for the ensuing fiscal year. In accordance with the Services Agreement, the SMPC is submitting its FY 2022-23 work plan and 2 of 5
budget to Council for its review and approval. If approved, the SMPC’s Services Agreement is to be extended to June 30, 2023.
Additionally, this year the historic Santa Monica Pier Carousel is celebrating its 100th anniversary. To mark this special occasion, the Santa Monica Pier Corporation is planning a celebration on September 15, 2022. Staff requests Council authorization to roll back carousel ticket fares for one day, to the ticket price charged in 1922 --- to 5 cents per ride. If approved, the cost to the public to ride the Carousel on that day would be 5 cents per ride from the current fare of $3 per ride.
Discussion
The SMPC’s main sources of income are event rentals, filming, corporate promotions and partnerships, followed by the City’s annual grant – all of which were significantly impacted due to the prolonged effects of the ongoing COVID-19 pandemic. Economic activity on the Pier has begun to rebound and, while there are still ongoing impacts and uncertainties, SMPC has seen an improvement in its revenue producing activities. This has enabled the organization to reinstitute free community-focused programing and activities in the current and upcoming fiscal years. The SMPC FY 2022-23 Budget (Attachment A) and Work Plan (Attachment B) describe in detail the activities and programs SMPC will undertake.
SMPC Budget
SMPC’s FY 2022-23 Budget projects total revenues in the amount of $1,610,000 and estimated total expenditures in the amount of $1,625,000. This will result in a projected shortfall of $15,000 which will be covered by SMPC reserve funds. The SMPC’s budget comparison from the previous year indicates that FY 2021-22 year-end budget was projected to close with an $85,000 deficit but due to a faster than anticipated recovery of revenues, SMPC year-end actuals for FY 2021-22 are projected to end with a surplus of $27,000.
3 of 5
Revenues
Projected revenues include: City grant funding of $150,000; revenues of $1,100,000 from deck and carousel rentals, corporate promotions and partnerships; filming fees of $275,000; grant and loans of $30,000; and other miscellaneous revenues (food & beverage, licensing and registration fees) in the amount of $55,000.
Expenditures
Projected expenses include: $870,000 for personnel expenses comprised of salaries, benefits and related services; $375,000 for expenses related to facility charges (e.g.
Pier Deck and Carousel rentals) including payments to the City; $300,000 for SMPC produced Pier programing such as Pier 360, Locals' Night series, Wellness & Waves series, Dia de los Muertos, holidays, PRIDE; $30,000 for marketing; and $50,000 for contingencies.
SMPC Work Plan
The attached FY 2021-22 Work Plan describes the activities and strategies SMPC plans to perform during the fiscal year. Efforts include continuing the work of its various study groups, bolstering its revenues, and producing new and returning free public programming to the Pier. SMPC will also continue to advocate for the continued public safety and legislative efforts addressing activities operating outside of local, County and State regulations.
Extension of Service Agreement
The Service Agreement between the City and SMPC (Contract No. 10101 CCS) will expire on June 30, 2022. Staff seeks authorization to extend the Service Agreement term through June 30, 2023, to coincide with the 2022-23 Fiscal Year.
Carousel Ticket Fare Roll Back
The Santa Monica Pier Carousel, a classic 3 row carousel with 44 hand carved horses (16 standing horses, 28 jumpers) was built in 1922 by the Philadelphia Toboggan Company (PTC) and given the designation of PTC No. 62. Originally installed in Cumberland Park in Nashville, Tennessee, the PTC No. 62 has resided inside the Looff 4 of 5
Hippodrome on the Santa Monica Pier since 1947. The City of Santa Monica owns the Carousel and operates it for the public’s enjoyment and benefit. The Carousel ride fare is set by Council with ticket fare revenues used to support the continued operation and maintenance of this historic machine so that it can be enjoyed by future generations.
To commemorate the 100th anniversary of the PTC No. 62, the SMPC intends to host a public celebration. Staff recommends Council temporarily adjust the Carousel ride fee from $3 a ride to 5 cents per ride on September 15, 2022, to reflect the ride fee charged in 1922.
Commission Action
The SMPC Board of Directors approved the FY 2022-2 budget and Work Plan on April 18, 2022.
Past Council Actions
Meeting Date Description
06/22/2021 Approval of FY 2021-22 Budget and Work Plan and extension of Services Agreement through 6/30/2022 (Attachment C)
07/14/2020 Approval of FY 2020-21 Budget and Work Plan and extension of Services Agreement through 6/30/2021 (Attachment D)
07/14/2015 Council Authorization of five-year Services Agreement with SMPC. Contract No. 10101 (CCS) (Attachment E)
Financial Impacts and Budget Actions
Pier Funds of $150,000 for the Services Agreement with the SMPC are included in the FY 2022-23 Proposed Budget in the Community Development Department. Staff does not anticipate that the special one-day promotion to roll back the carousel ticket fares to 5 cents would substantially impact the City’s carousel revenue projections for FY 2022-
23. No additional financial impact or budget action is necessary. 5 of 5
Prepared By: Elana Buegoff, Pier Administrator
Approved Forwarded to Council
Attachments:
A. SMPC Budget 2022-23
B. SMPC WorkPlan 2022-2023
C. Authorization for Second Modification of Services Agmt (Web Link) D. Authorization for First Modifictaion of Services Agmt (Web Link) E. Services Agreement Authorization (Web Link)
F. Second Mod Services Agmt No. 10101
G. First Mod Services Agmt No. 10101
H. Services Agmt No. 10101