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SR-06101986-6F~.~1 JUN 10 1lBi GS:SES:JM:mh Council Meeting: 6/10/86 Santa Monica, California TO: Mayor and City Council FROM: City Staff SUBJECT: Recommendation to Authorize the City Manager to Execute an Agreement with Ray Cammack Shows for the Operation of the Santa Monica Pier Carousel Introduction This report requests that Council authorize the City Manager to execute an agreement with Ray Cammack Shows for the operation of the Santa Monica Pier Carousel for a three-month period (June 16 through September 15, 1986). During this three-month period, staff will seek a permanent operator. The report also requests that Council authorize the City Manager to modify the Services Agreement with the Pier Restoration Corporation (PRC) with regard to the management of the Carousel by deleting reference to a specific operator. Background At its September 17, 1985 meeting, Council approved the selection of Dan Horenberger, dba Brass Ring Entertainment, as Carousel Operator and authorized the City Manager to negotiate and execute an Agreement for operation of the Carousel. This recommendation was made to Council following an extensive search and selection process for a qualified Carousel operator. The execution of the contract with Mr. Horenberger has not been completed as the contractor has been unable to fulfill the liability insurance b-F dUN l d 1946 - 1 - requirement. Mr. Horenberger has been unable to obtain liability insurance from any of the amusement business insurance carriers. Mr. Horenberger has operated the Carousel under a purchase order arrangement during this time. On May 15, 1986, Mr. Horenberger terminated his contractual arrangement as Carousel Operator and indicated that he was unable to secure the necessary insurance under the terms of the contract. Given the timing of Mr. Horenberger's departure in relation to the commencement of the daily summer operating schedule for the Carousel, the City is fortunate to have the services of Ray Cammack Shows available at this time. Ray Cammack Shows is a highly respected amusement company based in Phoenix, Arizona. In April, 1986, the PRC had selected Ray Cammack Shows to operate five (5) children's amusement rides on the deck area south of the Carousel for the three-month 1986 summer season. This operation is scheduled to coincide with the opening of the Carousel Park on June 6, 1986. The PRC had sent an informal request for proposals to twelve (12) amusement companies. Due to the restrictiveness of the project (e.g., short-term operation, space and load limitations) and the capital outlay for the amusement rides required by the operator, only three (3) of the companies contacted indicated an interest. The PRC selected Ray Cammack Shows based upon the high quality of the rides to be provided, the rental offer, insurance coverage, and the firm's ability to be operational by June 1, 1986. The ride operation is covered by a License Agreement between the City and Ray Cammack Shows which - 2 - will be managed by the PRC pursuant to the terms of the PRC Services Agreement with the City. Ray Cammack Shows has been in business for twenty-five (25) years providing travelling amusement shows to cities and counties across the country. The firm services and maintains seventy-five (75) different kinds of rides, including a carousel. The firm has extensive experience in all aspects of carousel operation. Cammack has an outstanding safety record and has won several awards for the high quality of the operation including the 1986 safety award of the American Recreational Equipment Association. The Los Angeles County Fair Association had selected Cammack in 1985 following an extensive search and the Association has renewed the contract with Cammack for 1986. In light of the prior search for a qualified Carousel Operator in 1985, staff believes that the ready services of a highly professional amusement company with a proven track record are indeed welcome and fortuitous. Terms of the Agreement Staff is recommending that a License Agreement, similar to the Agreement for the operation of the children's rides, be approved for a three-month period beginning June 16, 1986. The Agreement will provide for a month-to-month continuation following the initial three months. The Agreement is structured this way to provide for the operation of 'the Carousel during the busy summer season; there is not sufficient time to negotiate a more long-term arrangement now. The PRC and City staff will analyze the best arrangement for a more permanent operation of the - 3 - Carousel over the next several months. The three-month operation of both the rides and the Carousel will also provide a testing time for Cammack. Under the terms of the Agreement, Cammack will operate and maintain the Carousel, coordinate and manage private rental of the Carousel, and sell approved gifts and novelties. The hours and days of operation will remain as currently set, or as otherwise approved by the City. Under this Agreement, the current practice of the City receiving all revenues and reimbursing the Operator for all salaries and expenses will be continued. The City will receive all revenues derived from the operation of the Carousel and private rental of the building, and ten percent (10~) of gross sales from novelties. The City will pay a monthly management fee of $1,200 and reimburse Cammack for eligible salaries, supplies and expenses for the operation and maintenance of the Carousel. The License Agreement sets forth limits for the reimbursable expenses. The salaries, management fee and reimbursable expense limits are consistent with the previously approved contract with Brass Ring Entertainment. Management by the PRC One of the areas of responsibility of the PRC is the management of the operation of the Carousel. It is intended that the PRC will administer the Agreement with Ray Cammack Shows. The Services Agreement between the City and PRC currently specifies Brass Ring Entertainment as Carousel Operator. Staff recommends - 4 - that the City Manager be authorized to modify the Services Agreement to delete reference to a specific Carousel Operator. Budget/Financial Impact The recommended action does not have an impact on the 1985-86 budget or the proposed 1986-87 budget. There are sufficient funds in Account 30-500-625-000-724 to cover expenses for the remainder of the fiscal year. The proposed 1986-87 budget request for Account 30-500-625-000-724 is $122,103. This amount is sufficient to cover the three-month operation of the Carousel under Ray Cammack Shows as well as the remaining nine (9) months of expenditures under the terms of the License Agreement if month-to-month continuation occurs. Recommendation Staff respectfully recommends that Council: (1) Authorize the City Manager to execute an agreement with Ray Cammack Shows for the operation of the Santa Monica Pier Carousel. (2) Authorize the City Manager to modify the Services Agreement with the Pier Restoration Corporation to delete the reference to a specific Carousel Operator. Prepared by: Stan Scholl, Director of General Services Judith Meister, Pier Manager - 5 - Reference Contract No. 4692 (CCS).