SR-802-011 (10)
To: Mayor and City Council
From: City Staff
Subject: Agreement between the City of Santa Monica and Roth
Management for Operation of the Santa Monica Pier Carousel.
Introduction
This report recommends that the City Council authorize the City Manager to
negotiate and execute a two-year agreement with Roth Management for
operation and routine maintenance of the Santa Monica Pier Carousel.
Background
The Looff Hippodrome, built in 1916, is one of the few remaining original carousel
buildings, and the last remaining one on the west coast. The carousel housed in
the hippodrome was built in 1922 by the Philadelphia Toboggan Co. and has
become one of Santa Monica's most popular attractions. In 2001, the carousel
underwent extensive mechanical and cosmetic renovations, which restored the
machine to a near-perfect operating condition.
Open year-round, carousel rides are currently 50 cents for children over five
years and $1.00 for adults; children five years of age and under ride free with a
ticketed adult. During 2004-05, 86,307 adults and 37,056 children rode the
carousel. Revenue from ticket sales are deposited into the Pier Fund. Children
that ride for free are not included in the ridership count. Roth Management
estimates that 70% of all children that ride the carousel ride for free.
Discussion
Roth Management has operated the carousel since September 2001. The most
recent carousel operating agreement expired June 30, 2005 and contains a
month-to-month holdover provision, currently in effect. In the summer of 2005,
staff prepared and issued a Request for Proposals seeking a qualified entity to
operate and maintain the carousel. The RFP was advertised in the Los Angeles
Times, the City?s website and disseminated through direct mailings to persons on
the City?s interested-parties waiting list.
Roth Management was the only respondent to the Request for Proposal. During
the term of its prior agreement, Roth Management has provided excellent service
to the City. It routinely maintains the condition of the carousel and operates and
manages the carousel in a professional manner. The proposed management fee
covers responsibilities that include managing day to day operations, employee
operation training, recording and depositing revenue, payroll management, paint
restoration, repairs, weekly maintenance, and carving and replacing missing
pieces.
The proposed contract term is for a two-year period that would begin upon
execution of the contract by the City Manager. The City will pay Roth
Management an annual management fee of $88,500, and reimburse Roth
Management their costs for staff salaries and maintenance. These are estimated
to be $100,000, based on a six-day per week operation from mid March through
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the end of August (closed Tuesdays), and a five-day per week operation (closed
Tuesdays and Wednesdays) from September through the second week of March
(see Attachment A - Carousel Schedule Hours of Operation).
Roth Management estimates a 36% increase in reimbursement for employee
wages in comparison to the budgeted employee wages from the previous
management agreement. This is largely due to increases in hourly wages to
conform to the City?s living wage policy and to a 3% increase in Workers
Compensation insurance. The management fee increased 8% in comparison to
the fee from the prior management agreement due to an increase in liability
insurance costs.
A recommendation to proceed with selection of Roth Management Company was
approved by the Pier Restoration Corporation Board of Directors at its February
1, 2006 meeting.
Budget/Financial Impact
Funds are available in the proposed budget for fiscal year 2005-06 at Account
30625.577240.
Recommendation
It is recommended that the City Council authorize the City Manager to negotiate
and execute an agreement with Roth Management Company to operate and
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maintain the Santa Monica Pier carousel for a two-year period as summarized
above.
Prepared by: Jeff Mathieu, Director, Resource Management Department
Miriam Mack, Economic Development Manager
Sheela Voleti, Senior Administrative Analyst
Reference Contract No. 8569 (CCS)
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