SR-09-17-1985-6W6
SEP 1 4 1985
GSsSES'SNI:JMaak
Council I"leeting; Septeriber 17, 1985 Santa ,Monica, CA ~~fs~7 c,~
10. hlayv'^ and City Caunail
PROh}: City Siat'f
SUBJECT; Recommendation to Apprave Select,_on of Dan Horenberger,
dba Brass Ring Entertainment, as Carousel Operatar and
to Authorize City f~Ianager to Plegotiate and E:~:ecute +, he
Agreement far Operation of the Santa Monica Pier
Carousel.
lr.troduction
?his epart presents a summary of the selection pracess used to
identify a gualifiad fire to operate and maintain the Santa Manica
Pier Carausal. The report recur*~mends that the Council approve the
selection es" Dan Harenbergar, dba Brass Ring Er;tartainment, and
autharize the City P'fa Hagar tc, negotiate and e'n ecute a contract
with Horenberger, dba Bras=_ Ring Enter~tainhent.
Back.oraund
The City of Santa Monica purchased the Santa "or~ica Pier Carousel
ir; i'lay, 1977, Since that time; the City has operated the Carousel
under two types of arrangements- nar;ely, the use cf City farces
and private centractcrs, ?he roost recent contract was with
GayliniWilliams Carousel Enterprisesg this ..cntract was
terminated January, ':965, upon r~utual agreemet-it, The City
- collected gross ~~venues under this contract and paid the
oar;t;~actor's salaries and expenses. Since the termination of the
6aylinlWilliams contract, City staff has operated and maintained
the Carousel as well as coordir:ated and supervised private party
rental, Efforts by City staff during this period have been
b-
SEP 1 '~ ~sa5
extraordinary ar~d ha=:e enabled the .,ity to provide uninterrupt~=d
~~..ice
Carousel QOBratian
The o,usiness a` running and Maintaining tie Carausei ~~ a highly
specialized operation requiring a skilled and professional
opcr afar. l.n the past the City has used iecameal appro..=,ch to
the management of the Carousel: The City hired one set of
cantrac+,ors to operate the Carousel for the public, other
centraators were hired to maintain the machine and horses: and
another aantactar serviced the band organ, City staff
administered and coordinated all These functions. During the pas:.
year., the City has initiated a program to promote on vote rental
of the Carousel as a mear,e to generate additional re~~;enu::. A
great deal of City staff time has been devoted to aaardinating,
m o~nitoring; and ir~p ,'.amantiHg p;~i vote events in the Car a._rsal.,
It is staft''s ~ecommeHdatioH +,hat the Mast effecti--/e and efficient
arrangement, for operation of the Carousel is to provide for all
,ervicas under one contract, including administration,
supervision, maintenance, and promotion. The expertise to do all
of these functions is not, available iH the Gity. Zf the City were
to run 'the Carousel, it i,~ould relquire hiring ar~dfcr training a
Carousal ""'.`}Hager and th ra u;ould so/l~i L',e need to contr act out ro!'
o0me 5e7"'V iC85 sLiCn as malnteria nCe, Dyer trig past thi"@e years, tffc•
City eras made a substantial investment to r=stare the machinery,
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~~orses and the building, The City has e,lso mad= a commitment +,c
providing l.cw-cost public access to the Carousel. The combination
of specialized skill requirements ar.d Low p~ctential revenue=, a= a
result oP Pee iimtatiens--, creates a limited market for qualified
opera ors. Staff 6elie•,~zs that the contractor selected has the
required mi:-: cf techni•;al. sl<.i11s, business e:<peri.ence, and
entrepreneurial drive.
Selection =rocess for n~e.:~ Ooarai_ar
In February, 1985, a Request Por• Proposals (KEPI was distributed
tc ;.nteres~ted firms. The RFP a~as advertised in the Los Anueles
l ia;es and Arr:u se~~e rit Business, a monthly ~.~.u cement publicatio~•.
Seven (7i proposals were received and reviau~ed by the si.x-r-~rabar
Selection Committee. Selection Committee members included th,z
Acting Uirecter cf Community a Fcanomic Le~zlepment, the Pizr
Qper ations Pla Hager, the Pier 6evalopraent h;a ngar, the Executive
Director cf the Pier Restoration Corporation, and David Bradley of
6radley and Kaye, a carousel. restoration and npzration specialist.
Proposals r~:ere evaluated upon a number cf criteria inc.tuding (1)
expertise in the mechanical maintenvnce of a careuszl, (7} +, he
proposzd rv~~zthod of aparaticn and (5) financial return to the City.
Aftt"iemative action and minority hir~i~ng practices were considered
as ~,~e11, TF!z primary consideratior, in selection of an operator
was the demonstr--atsd ability to ~, ,ate and r+:aintain the Carou~-el
in a highly Professional and mechanically 4:noual.edgeaLle ma~nnzr.
J
The Cor•mittee selected three (3? proposers for interviews. Dan
.Horenberger, dba Brass Ring Entertainment; was judged by the
C+~r*im:i'+ee to haue the mo=t direct e~:.per^ience and tc 6e the mos+.
res,:.onsive to the requirements of the i.it,y, The other two fira:s,
Ringwelsl:.i and Rustuen; Dodd and Flores, had soma experience in
carouse]. operation but nc maintenance experience. Maintenance
atility was ~udgad by the Selection t~emmit±ee to be a c,^itical
issue oince the Carousel machine is invaluable ar,d if not properly
cared Por !:ii11 deteriorate and becor~e inoperable. Mr, Horenberger
has ~::=rtensive a:<per'ience restoring ar,d maintaining c:ar^eusel
her=see, o-iachinery and carousel band organs. Fie performed the
ir~iti.al r~asioration of the City's band organ and has r*~aintained it
for the past three years, In addition, i`r, Hcrenbarger Sias
assa,;iatad with Saranger Studi_-s for the past four years during
~thich time he ccardinated private parties and fiimings, "ir,
Fiorenberger has been highly recommended by the Friends of the
Santa Monica Pier Carousel.
Proposed Contract
Ci'.-~ staff has endeavored tc ensure that presar•,saiion ,P the
., _..cusel ~e.s well as public enjoyment and accessibility be achieved
through the +.erms of the cantrac+. The recommended terms incl,_ide
the follot:~ing',
I. lean
Tt-~e term is for two (2t years. Upon expirar,ion, the City
shall have the cpti.^Un to e;<ter~d the terr*~ on a month-to-month
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basis, A two-year ter-ra is r?commended to allow Ccntr.sctor
sufficient time tc establish and build his business,
TI, Services +,~ be °erformed ~ Contractor
fi. Goeration
?he Contractor shall operate the Carousal in ..empliance
with the schedule, -aet by the City nihich .u the same as
past soh?d!,tes, ?his schedule alio6ts for the mere
extensive annual maim?n.ance to be done on n:eekdays
d~_iri~^g the winter seascr~ ar~d the light !routine
maintenanc?. to be done an Monde,ys durir;g the summer
season, ?he o-~inimur! hour's o4 operation are.
Summer Memorial Day to Labor Day - iq wee,~:.s.
Six i6) days per iaa_el: Tuesday-SurdaY,
1C:CiD a.m, tc 9.rD p.m.
4:inter: Labor Da;~ to Memorial Day - a8 weeks,
Two i< days •rer iu80t;, Saturday & Sunday,
?L?Dd a.m. to 5:~3D p.m.
Holidays: Christmas and PJew Years ~;e<,k,
Than4:sgirir~g Day ;k following Friday,
Easter idee4:, 1D,C~ a.m, to S:@EJ p.m,
The Contractor shall :?bser~~e and enforce the general
rule. and regulations included as an exhibit to the
agreement, At least three t3) Carousel operators shaJ.l
6e presen±. at all times while Caro~_isol ..a open to the
cublic,; and at least two (C) operators shial.l be present
foe any s'uecial event, inrludi~ng filming.
B. Maintenance
Since the City I~as made a substantial investmer.± to
res+,or•e ':; ho Carousel to its former grandeur, it is
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critical that the machine and horses he :;artfully and
proftssianally maintained, "fhe Cantrac'tor shall perform
rautine mai;~ttnance on the mechanical and 4~oaden
p anti orrs cF the machine and band organ in accardanct
wi`h the maintenance sahz dolt aravided by the Ci,+y, Thz
major ma?.nttr,ance ierojtots wi1.1 6t pzrfori-red during the
:-~,intzr mant..h=,
C, °remctian
]~rar;aticn of the Carauzat far filming and pri~~ate
parties shall bz heavily tmphasi~zd since these revenues
are rsc,rvired for the Carousel aptratian to break-e•-Jen.
T F:e Cc ntrac. +,or sha l:t act i=azly pramott the Garouszl,
including attrar_t.ing civic, student and nan-crafit
graups to tha Carousel, advertising the Car-ausel tC a
r~i dt range of t`or-profit ma r!:ets, and promatiny _ts
general acczssibility t<; the public, fll.t planning and
roordirration :.rill bt canducted 5y the Cantrar_tar. City
staff shall review and approve each zvznt and
pramatianal package,
D. Sale of Commemorative Items
The Car, t,;-actor shall bz allo!•~ed to sell commemorative
items r, +, he Carousel Building whi cf: have hetn approved
`~y the City. The City sha11 ~ zczivt ten percent :!!~I7
cf gross sales ~f al1 cammemarativt items.
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III
~athad of Corv~_r=atian. Reveres and E;•:oenses
The recemroended method of accounting and handling
mpensat,.an to the .,ity and the Car:tractcr ~c .,cnsistent.
with the past pract.~,. of the City receiving all revenues
and reimbursing the Contractor For all salaries ar~d
e;:penees. This rrethed has been fcur.d +,o affcr-d the City
.yreatc~~ contr-al ever e-+.anues and ..:x.penditrues,
The City shall receive all revenue derived fro~~i the
oper-~at ion of the Carcusel at~d private r-ental of the facility
pl;as ter• percent !I~~7 of gros=. sales.^f cemmemarative
iteris. Reven!tes are to be submitted by the ..antraatcr to
ha Citf Treasurer each busir;ess day, P,e.enue projection:
fOr 16~~-66 are as ~a110tJe;
R°VeriUe
Ride tic!:.ets. 3~?,~c~i!~ .. ~~ ..ants ¢ ?!;,ru~`~
87oaI: ticket ;ales 51d~
Private Party Fees--
52~ Family events x ?68 ea tapprax7 39,APr~
proraotionai events x 1,5G~ ea P,IOPI
I~ filr~ing ,.,ants 1;62 e.a I6,2G~~
2~ ncnprafit events .. 235 ea ?,?4~~
Coromemcrat ive ite,~rs pe, centage
last. grass 25,6~6~ x 13` ,5~6
Subta+.al ~i?n.?~~
?~he contract requires written approval from the City "1at~ager
shcul.d annual expenditure, exc°ed annual revenues,
Iha .,cntraci also provides for ma,:imum ampur,ts to be paid
for car;tr=aatC•r~ cor*pensatian and for employee salaries. The
Cont.=attar shal.i receive maxirv7um weekly compenstior~ net to
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exceed ~5D~ far perfarmanae of ser=prices under +, he Agreement,
including supervision, maintenance, promotion, private
.ent.al. caardinaticn and adr,inistrativ_e duties. This
salary is camoara6le +, c• costs _neurrad previous years for
s!=.pervision, maintenance cants=attar's and sta;f's time spent
cccrdinating rentals. It else includes iabar far
~~~ainten.anca orajects that must L-e done annually beginning in
'925-25 noi,~ that the rector=at ion ~s five. year_ old. During
eoeratian of the Carousel to the public; opera%crs, limited
±. ;, three; each shall ~ ..~eive maximum of $6.dv"', per hour,
During private rental, operators, limited to three, each
shah r~.=ceive a maximum of X8.68. r^~e :05.52 will serve as
.ncentiva to operators tc be scheduled for private renta?.
a~hi,^h iii r~~ost cases ,_„ _ Frida.~ and 5aturda;~ nights.
The City shad t=eimburse Contractor t'or actual dccumer,ted
*:pansas far utilities and expenses necessary to the
aperatia~ns of the Carousel. The contract shah provide for
r€a:eimum amounts as shown under pra,iacted expenses seeti.r>n
which r"ollow~s,
The Cantr~actar= s!-gall submit a bi-rdeakly invoice and
"Si.e,terrient of ~r:perrditures" tc the City. The City shall
then ,..imburse the Contractor far all approved expendi+,ures.
The cant.ra^.t si~;a11 include an incentive bonus provisiar:
which calls rar• the Car:tractor :~ receive twer.t,y psra~nt
t2m%) of the excess net ~~.enue.
-8-
Pro.lected 1985-86 a:,;penses are. as- follaws~
Qt j3 ,854
Salaries and wanes ~,5pp
Utilities E=ppp
Maintenance Supplies a,5pp
!Promot;on B,Opp
Advertising c•.;pen>as
lnsuranca and Business 1 ppp
Capital EGUipment
Subtotal 3f38=85~
2p~ of net profit-incentive bonus , Spa
k? 5,-16 2p' ~
(est, net profit ..
TpTAL 'S!A.p,J6.5
Bltbre____~,. t~~ i~farY5i5
Ti,e reoammended action does have a budget impact due to a
The
ff during b!rdget areoaration,
±echnicai oversight by ste.
f the Centrac±or-'s
-:-,pendit,ure praiection o~litted a oar-~ian o
salary. Therefore, additional. appropriation authority of ~~p.~2`2
must ba added tc ;locount dp-Spp-625-ppGJ-72'1. to bring fatal
q{P,p, Revsn:aes in the amount of
t author;ty 'B'"
ap6roprlativon O
*~t~c;~pp trace beer, budgeted to be receive in Account
3p-931-2pa-ppp-ppp' In ',ecogn>tian that the small profit margin
r been s.^:oected wit; new ba samawhat smaller
the':. had origir~al.y
i.l
tc, ±hi.s addi+,ienal appr-opr~•iation, staff is currer, Y'
due to
fir the benefits of .wising rider fees as a Means
invsstiga -g +
~ ~',• to Council un his
revenues. Staff will reper~ bay,
increase
t date.
issue at a la er
Since the Pier Fund relies upon a loan from the Ganarai Fund `o
cove^ the Pier's operating deficit, it, follows that an additional
~,moun+ would he necessary tc cover the increased appropriation,
However, since Pie, re~••anues and expenses ara in flux ar~d wi.tl be
re•--d ewed at raid-Year, a comprehensive budget update :~i.ll be
prepared a'~ that time ~,itrich will include all necessary
adjustr,ents.
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This contract will result in a savings of approximately fifteznto
t~.;enty-five hours per w~ek cf staff ~-.ne that previously was spent
piar.ning, ~cordinating and managing ail private parties. Under
the prop;. sed contract, the contr'actcr wi11 assume all of tflese
reepG!la lb l!lties.
The proposed contract projects a very small profit to the City,
r~ore nearly a brea4;-even position. This is based upon the
expectation of a fu11 year of operation of the Carousel and a
concerted effort by the Contractor to pror~ote the carousel for
private rental. Rz~,~enues during the past ;ears have 6ezn lower
thar, these projected for 1985-86; this is ~r-imarily due to
interruption of operations as a result, of res~taratian ~,~ort::. and the
:-eli epee on ride ticr.et sales as the primary source of r;;venue.
Since this will be the first full year of promotion, privet>_ party
reVenUes are ~i7 deed Dii St aff'_ aaT ]. i:iate5, It sll ,iU ld h.,B nOtad thlt
~~ fu11 private party revenues arz not generated, there will he a
Corr-sponding ~ar_rease iri _;~:pznditures ~~ staff +, he _,ents, A
total of 'W18,49~ is inc'_uded under saJ.arias tc staff private
par ties.
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The net profit bonus incentive is seen as the best mzans to
motivate the Contractor to aggrzssivzly promote the Carousel and
gzneratz additiana; rzvznues, The tiro-yea. tzrm of contract will
provid:: a rza.scnabie amount a` enozri.enca with which to e`v'aluate
the financial. arrangement, Sta~° belizvzs that the arapa,ed
contract !f~i1.1 prcvidz far the ecr~tinuatien ot" low-cast public
,enjoyment as weal ~,~ the e.~cncr*:ic viability oP the Cara:uszl.
operation acid ensure thz pr?nervation o` this .?ant valuable
rzsour~e,
"ecommendzd A^tio~n
Staff r~zspzatfully recommends that Council apprave the ~~.~ction
of Dan Haren(serger, dba grass Ring ~ntertai.nmzr~t, :und authorize
the City ~°lanager tc r~egetiate and e>:zcut~ a contract with Dan
4arznbergzr dba grass Ring cntzrtain~,ent for opzra4ian and
maintenance of the ,anta P;crica Pizr Darcusel,
Prepared b-_,~. Susan Mu1J.i.n, 5erior Administrative Analyst
.7uditF,!`1eist,ar, Senior Adminisirati~fz Ar:alys-t
Stan Scholl, Director-6enaral Services