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sr-032310-8bCity Council Meeting: March 23, 2010 Agenda Item: ~J ~' To: Mayor and City Council From: Andy Agle, Director of Housing and Economic Development Subject: Carousel Fare Adjustment and 2010 Twilight Dance Series Recommended Action Staff recommends that the City Council: 1. approve the attached Resolution to revise ticket prices for carousel rides at the Santa Monica Pier Carousel effective May 1, 2010, 2. appropriate the budget increases as outlined in the Budget/Financial Impact section. Executive Summary In support of the Santa Monica Pier Carousel as an affordable entertainment option for residents and visitors that also generates sufficient revenue to cover its expenditures, staff recommends that the City Council increase the adult Carousel ride fare for persons over 14 years from $1 to $2 and set the fare for children between three years and 14 years of age at $1. Children aged two and under would ride for free if accompanied by a ticketed adult. The proposed rate adjustment will align the ticket prices with other comparable carousels and provide increased revenue that .can be used to offset the Carousel's operating deficit and provide $50,000 in support to the Santa Monica Pier Restoration Corporation for the 2010 Twilight Dance Series. In addition, the City will implement a $10 event parking rate at various beach lots on the Thursday nights of the Twilight Dance Series events. Background Currently, the Santa Monica Pier Carousel ticket rates are $1 for adults over 14 years, and 50 cents for children from 6 to 14 years of age. Children under the age of 6 ride free when accompanied by a paying adult. The Carousel fare is well below what other comparable carousels charge (Attachment B). 1 On March 9, 2010, Council allocated $35,000 in Council Discretionary funds as a matching grant to the Santa Monica Pier Restoration Corporation (SMPRC) to produce a minimum of seven Twilight Dance Series ("TDS") concerts on the Santa Monica Pier and directed staff to return to Council with additional budget-neutral recommendations to support the continuation of the TDS. Staff recommends the proposed increase in carousel rates as a way to support Carousel operating costs and generate financial support for the 2010 TDS. Discussion The Carousel fee structure was last changed in September of 2002. In the eight years since the last fare increase went into effect, overall ridership and revenue has increased, despite the fact that children under six are no longer included in the ridership counts. While Carousel revenue has increased, labor, management, and maintenance costs associated with the Carousel have also increased. In FY2008-09, Carousel revenues totaled $158,700 (including ticket revenue and facility rentals) while expenses budgeted for the Carousel totaled $262,000. The Pier Fund subsidized this operating gap. The General Fund subsidizes the Pier Fund. The Santa Monica Pier Carousel currently has the lowest ticket price among similar carousels. Attachment B compares Santa Monica's ticket fare policy with carousels at Griffith Park, San Francisco's Pier 39, Santa Cruz Beach, Balboa Park, Long Beach and New York's Central Park. These carousels charge riders between $2 and $3 per ride, with some facilities allowing only infants or their parents to ride free. In FY 2008/09, the Carousel sold 93,089 adult tickets and 32,569 children's. tickets to children over the age of six. Based on analysis of current and past ridership, staff estimates that ridership by children between three and six years is approximately 50,000. The proposed fare increase, which would begin May 1, 2010, is expected to generate approximately $150,000 in additional annual revenue. This increase in Carousel annual revenue would offset Carousel operational costs as well as provide an 2 opportunity for the City to allocate a portion of the increased revenues to support SMPRC's 2010 TDS. Staff has examined projected ridership and recommends an additional contribution of $50,000 for the 2010 TDS from the increase in Carousel revenues Seven 2010 TDS concerts will cost $211,000. Of this amount, the SMPRC budget has set aside $96,000 for the program. In addition to the Council's March 9~h commitment of $35,000 and the $50,000 contribution recommended. in this report, SMPRC must to raise an additional $30,000 in sponsorships in order to produce seven concerts. At the time this staff report was prepared, SMPRC had raised $28,000 in sponsorship and individual donations. Funds raised in excess of the $30,000 goal will be used to support additional concerts. SMPRC will meet on March 24, 2010 to review progress on its special sponsorship and fundraising efforts. The SMPRC must enter into contracts with its 2010 TDS vendors and production partners without further delay to keep the event production on target. In addition, the Santa Monica Police Department incurs added costs during the TDS to monitor the large crowds that gather on the beach to the south of the Pier. During the 2009 concert series the SMPD spent approximately $3,600 per concert for officer time. In accordance with Resolution 10307 (CCS), adopted on June 17 2008, the City will implement a $10 event parking rate at various beach lots beginning at 4 p.m. on the seven Thursdays the Twilight Dance Series will be held. Revenue generated will be applied to the Beach Fund. The Beach Fund will pay for public safety, sanitation, and other operating and maintenance costs generated by an influx of visitors to the beach on concert nights. The event parking rate is estimated to generate approximately $3,000 in additional revenue per event. Commission Action The proposed rate Carousel increase was recommended by the SMPRC Board of Directors at its meeting on March 3, 2010. 3 Financial Impacts & Budget Actions It is projected that $20,000 in additional revenue will be generated. from the proposed carousel fee increases during the months of May and June 2010. It is projected that the proposed Carousel fee increases will generate approximately $150,000 in additional annual ticket revenue. The additional revenue will be used to offset the carousel operations and provide funding to the PRC in support of the 2010 TDS.. The annual revenue increase of $150,000 associated with the fee increases and an additional one- time $30,000 in expenditure appropriation in support of the 2010 TDS will be included in the Pier's Proposed FY2010-11 Budget. Projected annual revenues from-TDS parking in the amount of $21,000 will be included in the FY2010-11 Beach Fund's Proposed Budget in account 11522.401260. The following budget actions to Pier's budget are necessary in FY2009-10: increase budgeted revenue in the amount of $20,000 in account 30626.402030; and appropriate an additional $20,000 account 30626.577300 which will be provided to the PRC in support of the TDS. Prepared by: Elana Buegoff, Sr. Development Approved: Andy Agle, Director Housing and Economic Development Forwarded to Council: Rod Gould City Manager Attachment A. Resolution B. Carousel Fare Survey 4 Attachment B. Carousel Comparison Ticket Price Santa Monica Pier Carousel - $0.50 children (ages 6 -14); $1 adults; children under current rate. 6 years of age ride free with paying adult. Griffith Park Merry-Go- Round (Los $2.00 per ride child or adult. Angeles) Pier 39 Carousel (San Francisco) $3 per ride child or adult -everyone pays. Can purchase two rides for $5. Zeum Carousel (San Francisco) $3 per ticket child or adult- two rides per ticket; parents of infants too young to ride on their own ride free. Central Park Carousel (New York) $2 per ride child or adult- children under 1 year of age ride free with paying adult. Santa Cruz Beach Boardwalk Carousel $3 per ride child or adult; children under 36" ride free with paying adult chaperone. Balboa Park Carousel (San Diego) $2 per ride child or adult; children under 1 year of age ride free with paying adult. Shoreline Village (Long Beach) $2 per ride child or adult- infants too young to ride alone ride free with paying adult. Reference Resolution No. 10462 (CCS).