City Council
Report
City Council Meeting: June 13, 2023
Agenda Item: 5.H
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To: Mayor and City Council
From: David Martin, Director, Administration
Subject: Approval of the Pier Corp FY 2023-24 Budget and Work Plan Recommended Action
Staff recommends that the City Council:
1. Adopt a finding of no possibility of significant effect pursuant to Section 15061(b)(3) (Common Sense Exemption) of the California Environmental Quality Act (CEQA) Guidelines;
2. Approve the Santa Monica Pier Corporation Fiscal Year 2023-24 Budget and Work Plan;
3. Authorize the City Manager to execute a fourth modification to agreement #10101 with the Santa Monica Pier Corporation to extend the term through June 30, 2024.
Summary
The Santa Monica Pier is an iconic landmark drawing millions of visitors each year to enjoy one-of-a-kind experiences while strolling above the ocean waves. The City contracts with the Santa Monica Pier Corporation (SMPC) through a Services Agreement to manage certain programs and services at the Pier including marketing, production of community programming such as the highly popular Locals’ Night series, as well as coordination of filming and private event rentals and proctoring the daily street performer lotteries. The Council-appointed SMPC board is also charged with the development of policy guidelines pertaining to sponsorship, marketing, events and leasing, subject to 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 2023-24 work plan and budget to Council for its 2 of 4
review and approval. If approved, the SMPC’s Services Agreement is to be extended to June 30, 2024.
Discussion
The SMPC FY 2023-24 Budget (Attachment A) and Work Plan (Attachment B) describe in detail the activities and programs SMPC will undertake in the upcoming fiscal year.
SMPC Budget
The SMPC’s main sources of income are event rentals, filming, corporate promotions and partnerships, followed by the City’s annual grant. SMPC’s FY 2023-24 Budget projects total revenues in the amount of $1,912,000 and estimated total expenditures in the amount of $1,945,000. This will result in a projected shortfall of $33,000 which will be covered by SMPC reserve funds. The SMPC’s budget comparison from the previous year indicates that FY 2022-23 year-end budget was projected to close with an $15,000 deficit but due to a faster than anticipated recovery of revenues, SMPC year-end actuals for FY 2022-23 are projected to end with a surplus of $52,000. An explanatory memo highlighting certain budgetary changes and expectations is detailed in Attachment C.
Revenues
Projected revenues include: City grant funding of $150,000; revenues of $1,415,000 from deck and carousel rentals, corporate promotions and partnerships; $200,000 from filming; $60,000 from other grants and donations; and $87,000 from licensing, guided tours, registration fees and food/beverage and merchandise sales.
Expenditures
Projected expenses include: $980,000 for personnel expenses comprised of salaries, benefits and related services; $430,000 for expenses related to facility charges (e.g. Pier Deck and Carousel rentals) including payments to the City; $430,000 for SMPC-produced Pier programming such as Pier 360, Locals' Night series, Wellness & Waves, Dia de Los Muertos, Save the Pier play, Samo PRIDE and seasonal holidays; $35,000 for marketing; $20,000 for merchandise; and $50,000 for contingencies. 3 of 4
SMPC Work Plan
The attached FY 2023-24 Work Plan describes the activities SMPC plans to perform during the fiscal year. Efforts will focus on continuing and growing its popular free public programming and community engagement including a new, in-person historical walking tour of the Pier. In addition, given the financial stress placed upon the organization following the impacts of COVID pandemic, the SMPC seeks to also explore other models and methods of fiscal sustainability for its organizational future. SMPC intends to embark on a 3-5 year strategic plan with a 10 year “north star” vision.
Extension of Service Agreement
The Service Agreement between the City and SMPC (Contract No. 10101 CCS) will expire on June 30, 2023. Staff seeks authorization to extend the Service Agreement term through June 30, 2024, to coincide with the 2023-24 Fiscal Year.
Commission Action
The SMPC Board of Directors approved the FY 2023-24 budget and Work Plan on April 17, 2023.
Environmental Review
The approval of the SMPC FY 2023-24 budget and work plan is exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3) (Common Sense Exemption) of the CEQA Guidelines, which states that CEQA does not apply, “where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment”. The work plan provides activities and programs that would not result in a significant adverse physical impact on the environment, and therefore, is exempt from CEQA.
Past Council Actions
Meeting Date Description
6/14/2022 Approval of FY 2022-23 Budget and Work Plan and extension of Services Agreement through 6/30/2023
6/22/2021 Approval of FY 2021-22 Budget and Work Plan and extension of Services Agreement through 6/30/2022
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7/14/2020 Approval of FY 2020-21 Budget and Work Plan and extension of Services Agreement through 6/30/2021
7/14/2015 Council Authorization of five-year Services Agreement with SMPC. Contract No. 10101 (CCS)
Financial Impacts and Budget Actions
Funds of $150,000 for the Services Agreement with the SMPC are included in the FY 2023-25 Proposed Biennial Budget in the Community Development Department. No additional financial impact or budget action is necessary.
Annual Services Agreement Extension
Agreement FY 2023-24
Amount
Account Number Annual Agreement
Amount
10101 150,000 53700002.540150 $150,000
Prepared By: Elana Buegoff, Pier Administrator
Approved Forwarded to Council
Attachments:
A. SMPC 2023-24 Budget
B. SMPC FY2023-2024 Work Plan
C. SMPC Budget Memo