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SR-030475-11A. ~~~ _ 'Santa Monica, 'Califor -ry ~ , ->1975 ~~ ~~` `. TQ: lblayor and City Council V~~'ti ~ !~~~~ ~~&8~~3~Y3 '~`~ ~ ,--FROM: City Staff ~37'~eg~q,'~~g922Rt.t':~ \ SiiBTECT: 'Proposed Acquisition of Mausoleum Property at ZhToodlawn Cemetery j v 1 Introduction T}us .report discusses the proposed acquisi~ on of the Mausoleum .(building and j property) located at the Cityis Woodlawn Cemetery and its potential {financial and long-range operational impacts on the City, Background The Mausoleum located at the City~s Woodiawn Cemetery is owned and operated by Service Corporation International (SCI) of Houston, Texas. This company is an international funeral and cemetery service company. During a meeting with City staff and the Mayor during the week of No<remoer 4, 1974, SCI offered to sell the Mausoleum to the City {or $309, 061. Apparently, SGI's reason for wishing to sell the Mausoleum is that their cost of opera ng this facility exceeds their revenue frem this facility. At this point the City staff proceeded with its analysis of the proposed acquisition, First, it requested a title report from Title Insurance and Trt:s't Company to determine ~,vhether clear title e,Yists. The title report vvas received on February 10, .1975 and is now being revieY=red by City staff as to the accuracy o{ the metes and bounds description of the subject property, Secondly, City staff retained Mr. ~rlyron I~'ields, one of the few consultants in the field of cemetery management and T,o: Mayor and Council' -2- 'February 24, 1975 ' ` operations, to report to us on the advisability of acquiring the Mausoleum based on the proposed purchase price of $309, Obl. Thirdly, the staff re- quested, received (from SCI) and reviewed various schedules of information relating to; 1. Balance sheet and income statements.. 2. Number. of empty crypts and niches and .rate of sale.. 3. Average cost per crypt. and niche. 4. Mausoleum 13erpetual Care Fund--xate of return and earnings. vs. maintenance expenses. 5. Inventory of furniture, equipment and fixtures. This information was. also mzde available to the consultant for his analysis. Analysi s A. Potential Revenues'--The following table represents a summary of the minimum total potential revenues from the sale of the Mausoleum facil- hies based on todayts current prices as submitted by the Consultant. __Inventory Item No. of Units Total Sales Mausoleum Crypts 467 $525, 785 ($1, 125.00. ea) Mausoleum Niches 635 $123, 070 ($ " 195. 00 ea) Crypt Entombments 615 $ 73, 800 ($ 120.00 ea) Niche Interments 1, 313 $ 32, 825 ($ 25.00 ea) Crypt plaques 615 $ 36,.900 ($ 60.00 ea) Niche Plaques 1 313 $ 65, b50 ($ 50.00 ea) 9 Total potential revenue = $858, 030 It is estimated %hat based on the current rate of sales of crypts and niches, the Mausoleum would not reach capacity (in terms of units sold) for approxi- mately ten (10) years. ` To: Mayor and Council _g_ February 24, 1975 ~ e i B. Assets to be Acquired--SCI proposes that 'the City acquire the following physical assets: Mausoleum Buildin (photos tivill be available at Council meeting}, A plot plan of the Mausoleum building in relation to the property is attached. The building is essentially constructed of reinforced concrete and built in seven stages or "units" between about 1928 and 1970-71• Units 1 through 6 are ~~ one-story in height and unit 7 is 3 stories , composed of a basement ("lower terrace'!); ground floor and second story. The interior is of marble and/cr terrazzo and contains 467 available crypt spaces (made up of 335 single spaces, 118 .double. spaces, and 7 quadruple spaces) and 635 niche spaces. The building also contains two offices separated by a fire- proof vault, The building contains about 34, 350 sq. ft. at the ground level Mausoleum Property--.Attached is a plot plan of the Mausoleum property proposed to be purchased. it is comprised of parcels 2 and 3 of Block 11 of iUIap 335 (County Recorder) and contains approximately 40, 850 sq, ft. Mausoleum Equipment Furn~.ture and Sunnlies--The Mausoleum also con- tains avariety of office furniture (desks,. filing cabinets, electrictvpe_ writers, etc. }; a bier {cofi;n stand); a hydraulic lift,. cement mixer; etc. (Staff has a complete list of current physical inventory of the items.) Further, the Finance Department recommends that SCI liquidate current Mausoleum liabilities reported in the amount of $24, 678 on its 9/30 74 1 -- To: Mayor ard;Gouncil -4- - February 24, 1975. 6 Balance Sheet to the extent of available assets, to insure that the City is - purchasing only the assets and not potential problems or dafficulties. C. Operational/Maintenance Costs to City if Mausoleum is Acquired--The Cemetery Superintendent concludes that Y.lae maintenance and operation of the Mausoleum can-be accomplished with the current number of ceme- . tery personnel. .The building's interior is extreraiely easy to maixatain, Further, the sales effort can easily be absorbed by existing staff who are already on the site and knowledgea'ole in this field. Current annual costs for Mausoleum utilities and supplies are approximately $3, OOOo 00; how- .ever, these expenses are more than offset by other revenues, discussed below, Further, the current annual utility and supply expenses of approxs imately ~2, 000, 00 attributable to the existing cemetery office will. be .eliminated when this office is moved. to the Mausoleum. D. Endowment/Perpetual Care Fund Attributable to Mausoleum Sales--The Consultant assumed a lOQ/o of total potential revenue contribution towards the endowment fund for perpetual care: Total Revenue. Endowment Care Mausoleum Crypts $525, 785.00 $52, 578. 50 Mausoleum. Niches $123, 070.00 $12, 307. 00 Total ~b4, 885. 50 Therefore, this total amount can be added to the City's Perpetual Care Fund. The impact of adding _~hi.s amount to the Fund an an incremental basis as Mausaleum crypts or niches are sold, is now being analyzed by the staff to determsne its effect on the Fund in 3994-95. To Mayor and Council i -5= F'ebruary24, 1975. _ E, Income from Endotivxr,ent/Perpetual Care Fund for Mausoleum--According to SCI's statements, the current (as of 9/30/74) worth of thz Pe--rpetual Care Fund for the Mausoleum is $128, 67I. 87 which is totally invested in time deposits. Income on this invested amount is estimated at $13, 0~1, 24. Benefits of Acquiring Mausoleum A. Purchase of the Mausoleum opens many potential options for providing additional cemetery space for Santa Monica citizens far into the future. 1. Purchase of the Mausoleuxri postpones the need to build additional crypts for at least ten (10) years, as pointed out previously in this report. 3200 crypts. were projected to be built in Block 19 of the cemetery at an average rate of approximately 175 per year for 20 years and at a total cost of approximately $1, 056,'000. The Council has $150, 000 budgeted this fiscal year to provide for the construction of the initial increment of these crypts. Thins, this $150,000 is immediately available to finance almost one-half of the proposed pur- chase price of the Mausoleum. 2. Relocation of the present cemetery offices to the. Aausoleum offices and subsequent demolition of the office structure and maintenznce building releases additional property for development as land inter- ment property. Approximately 675 additional grave sites could be Tq:. Mayor and-;Council; '-6_ - February 24, 1975 accornasxodated in this arez. Depending upon whether single or mul#i- ple vaults are utilized, additional total revenue of $560, 000 to $650, 000 can be realized.. Fiixtlaer, total addit°;.onal revenue to the Perpetual Care Fund of between $56, ©00 and $65, 000 can be realized.. _The addition of these sites to those already available in Block 19 {but prevsously set aside £or crypt construction} could mean #hat comple#ed sales would not be realized for 20 years {1995). 3. SCI has had preliminary plans prepared for the expansion of tha Mausoleum.. {6, 572 sq. fts of land available for soecalied "8th Addition":) A minisxium of 2600 additional crypt spaces can be pro- vided in this addi#ion. The value of this proper#y, if used oxsly for. ground interments {ia e. , not constructing the "8th Addifaon"), is approximately $131, 440 {at $20 per square foo#). B> Alrchase of the Mausoleum provides an opportunity to develop freely a long-range mas#er plan for. cemetery development. C. Establishment of cemetery administrativejsales office into the Mausoleum structure consolidates cemetery operations and provides for better control. D. Acquisition of the Mausoleum will reduce, osier the. long run, tha annual contribution necessary from the General Fund, to support the Perpetual' Care. Fund. The staff is cur ren#ly preparing an analysis of ±hi s impact as a supplement to its Perpetual Care Fund Report. To: May©~ and :Council -7- February 24, 1975; Recommendation _ __ - It is recommended-that the Council authorize City staff to begin negotiations - with Service Corporation International for the purchase of the Mausoleum located at ~^Ioodlativn Cemetery subject to future City Council approval of the terms and conditions of fhe sale. - Prepared by: Dave Dolter Doug McAteer Ralph Wilson Roy Alioth Pdyron Fields DPD: j s attachments (2j i'._Vl. zz uJ taJ ~ ~"a ~ ~ i ~ ~ i ~~~ ~ I a~ I : ~~ ' i °~ ~ ~' t ; ,~ 7, ~ ~., ~ G F v. ' - .~r.T ~/. 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