SR 06-22-2021 3D
City Council Report
City Council Meeting: June 22, 2021
Agenda Item: 3.D
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To: Mayor and City Council
From: David Martin, Director, Administration
Subject: SM Pier Corporation FY21/22 – Adopt Proposed Budget and Work Plan;
Extend Annual Services Agreement
Recommended Action
Staff recommends that the City Council:
1. Approve the Santa Monica Pier Corporation Fiscal Year 2021-22 Budget and Work
Plan;
2. Authorize the City Manager to negotiate and execute a second modification to
agreement #10101 with the Santa Monica Pier Corporation to extend the term through
June 30, 2022.
Summary
The City contracts with the Santa Monica Pier Corporation (SMPC), through a Services
Agreement, to manage certain programs, services, and operations at the Pier including
street performer monitoring, filming, event rentals, marketing/social media, and the
production of community programing. The Council-appointed board is also charged
with the development of guidelines pertaining to sponsorship, marketing, events and
leasing for Council approval. The Services Agreement requires the SMPC to prepare
an annual budget and business work plan to set forth the goals and objectives of the
SMPC for the ensuing fiscal year, subject to Council approval. In accordance with
Section 4 of the Services Agreement, the SMPC is submitting its FY 2021-22 work plan
and budget to Council for its review and approval.
Discussion
The SMPC’s main sources of income are event rentals and filming followed by the City’s
annual grant – all of which have been significantly impacted due to the prolonged
effects of the ongoing COVID-19 pandemic. The loss of revenues and the uncertainty
regarding when events and promotions would be permitted to return, and under what
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restrictions, has necessitated that the SMPC refocus its FY 2021-22 budget and work
plan on stabilizing the organization’s financial footing and focus on service priorities
requested by the City.
Even as the State continues to reopen all sectors of the economy, the City’s budget
projections for FY 2021-22 still reflect the substantial and ongoing impacts triggered by
the global pandemic. Accordingly, the City’s funding for the SMPC has been reduced
from $250,000 for FY 2020-21 to $200,000 for FY 2021-2022. For the coming fiscal
year, SMPC’s work effort will continue to provide essential service priorities such as
street performer monitoring, supporting the economic recovery efforts for pier
merchants, and coordinating filming and event rentals that comply with County
Department of Public Health orders and protocols. Should the SMPC see an
improvement in its revenue producing activities or receive arts and culture grants, then
reinstituting compliant community programing would be possible under the proposed
work plan.
The SMPC FY 2021-22 Budget (Attachment A) and Work Plan (Attachment B) describe
the modified activities and programs SMPC will undertake in the upcoming fiscal year.
In addition, because the Service Agreement between the City and SMPC (Contract No.
10101 CCS) will expire on June 30, 2021, staff seeks authorization to amend the
Service Agreement and extend the term through June 30, 2022 to coincide with the
2021-22 Fiscal Year.
SMPC Budget
SMPC’s FY 2021-22 Budget projects total revenues in the amount of $705,000 and
estimated total expenditures in the amount of $790,000 which results in a projected
shortfall of $85,000. The budget incorporates the reduction in City funding and the
expectation that the COVID-19 pandemic related restrictions will continue to negatively
impact revenue-generating events and rentals in the coming year. In addition, the
SMPC’s budget comparison from the previous year indicates that FY 2020-21 year-end
actuals are projected to close with a $408,781 deficit. SMPC intends to use its reserves
to cover the deficits.
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Revenues
Projected revenues include: grant funding from the City in the amount of $200,000;
facility rentals revenues (deck and carousel rentals and corporate promotions) in the
amount of $375,000; filming fees in the amount of $100,000; grant and loans in the
amount of $20,000; and other miscellaneous revenues (food and beverage) in the
amount of $10,000.
Expenditures
Projected expenses include: $615,000 for personnel expenses comprised of salaries,
benefits and related services; $125,000 for expenses related to facility charges (e.g.
Pier Deck and Carousel rentals) including payments to the City; $20,000 for marketing;
and $30,000 for contingencies. No funds are budgeted for SMPC-produced Pier
programming such as Pier 350, Pride, ROGA (a yoga and running fitness event) and
Twilight 2022 Concert Series. SMPC staff will evaluate reinstituting such programming if
additional funding sources such as grants or sponsors are identified or if revenue
producing rental activities exceed budget projections.
SMPC Work Plan
The attached FY 2021-22 Work Plan describes the activities and strategies SMPC plans
to perform during the fiscal year. Due to the SMPC’s financial challenges, the work plan
concentrates on street performer management and revenue generating activities, such
as the booking and management of filming, event deck rentals, merry go-round parties
and promotional activations on the Pier. Another major focus of the SMPC Board will be
continuing to lead three subcommittees focused on Governance & Revenue,
Community Engagement, and Programming Priorities, which are assessing
recommendations on policy and governance matters related to the Pier.
Commission Action
The SMPC Board of Directors approved the FY 2021-22 budget and Work Plan on
May 17, 2021.
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Past Council Actions
Meeting Date Description
07/14/2020 Approval of FY 2020-21 Budget and Work Plan and extension of
Services Agreement through 6/30/2021
07/14/2015 Council Authorization of five-year Services Agreement with SMPC.
Contract No. 10101 (CCS)
Financial Impacts and Budget Actions
Pier Funds of $200,000 for the Services Agreement with the SMPC are included in the
FY 2021-22 Proposed Budget in the Community Development Department. No
additional financial impact or budget action is necessary.
Prepared By: Elana Buegoff, Pier Administrator
Approved
Forwarded to Council
Attachments:
A. SMPC FY2021-22 Budget
B. SMPC FY2021-22 Work Plan
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3.D.a
Packet Pg. 42 Attachment: SMPC FY2021-22 Budget [Revision 1] (4579 : SM Pier Corporation FY21/22 – Adopt Proposed Budget and Work Plan; Modify
FY2021-2022 Work Plan
This document lays out our strategic work plan for Fiscal Year 2021-2022, a year of
recovery from an unprecedented pandemic; reimagination of how the Pier is
governed; and working collectively with the City, the Pier’s stakeholders and the
local and regional community toward a bright post-pandemic future with a specific
emphasis toward presenting and maintaining a clean and safe Santa Monica Pier.
The Pier is approximately the size of a 3-block city street, upon which are an
amusement park, an aquarium, a trapeze school, 8 restaurants, 13 vendor carts, 4
retail shops and a 99-year-old antique carousel that is housed within an official
Nationally landmarked building. Fishing and street performance add to the daily
scope of activities on the Pier, as well as frequent brand activations, art installations
and free-and-open-to-the-public programming. In pre-pandemic years the Pier
welcomed approximately 10-12 million visitors, which dropped drastically as the
country (and world!) quarantined and exercised strict health and safety precautions
for more than a full year. As we recover and cautiously enter life after the pandemic,
the Pier is already experiencing the return of attendance levels on a trajectory
toward that pre-pandemic level of popularity.
This new fiscal year will see the return of our traditional revenue sources – event
rentals, activations, filming and sponsorships – all of which were severely impacted
during the 2020-2021 fiscal year. This next year presents new challenges, however,
in that the level of immediate return of these sources is very difficult to predict as
they are dependent upon the broader level of economic recovery for southern
California and, ultimately, the country. An added challenge will be a much-needed
major construction project impacting the use of the west half of the Pier Parking
Deck, our largest source of event rental income. Also, our other highly significant
revenue source – a grant from the City of Santa Monica which was drastically cut a
year ago – has been further reduced as the City faces its own budgetary constraints.
Regardless, the Pier Corporation looks forward to embracing these challenges and
remains optimistic about the year ahead.
With those financial challenges at the forefront, the Pier Corporation’s primary
areas of focus will be in the operations of street performer management and the
booking and management of event deck rentals, merry go-round parties, filming and
promotional activations. Pier Corporation-produced programming (2021 Twilight
on the Pier, 2021 ROGA, 2021 Wake Up with the Waves, 2021 Holiday Window
Displays, 2022 Pier 360, and 2022 PRIDE) will largely be put on hold for the next
3.D.b
Packet Pg. 43 Attachment: SMPC FY2021-22 Work Plan (4579 : SM Pier Corporation FY21/22 – Adopt Proposed Budget and Work Plan; Modify Annual
year due to lack of funding. It is also forefront in mind that planning for the 2022
Twilight on the Pier is in jeopardy as that event is largely planned during the full
year prior to its kickoff. Staff will diligently continue to pursue funding sources in
order to create the ability to resurrect as many of these programs as possible.
Beyond regular operations, the Pier Corporation’s area of focus for FY2021-2022
will be directed toward sharpening the core of how the Pier operates and how it can
best serve both the local community and our millions of visitors.
As a result of the struggles collectively faced throughout the past year, perhaps the
Pier Corporation’s brightest emerging highlight was the development of three study
groups designed to address specific issues which became elevated – sometimes
dramatically - during the pandemic. The purpose of the study groups was to bring
together representative voices from Pier Corporation’s Board of Directors, its staff,
representatives of Pier businesses, City staff and members of the community. The
study groups’ individual areas of focus are:
1. Governance & Revenue
2. Community Engagement
3. Programming Priorities
The work of these three study groups has only recently begun, yet each has already
produced great dialogue and, in some cases, immediate results. The next fiscal year
will include much more work through these groups and will be integral in shaping
not only the Pier’s recovery, but how the Santa Monica Pier operates internally,
integrates the community, and celebrates its visitors for the ongoing future.
The Pier Corporation is also in the process of updating the Pier’s Brand Guidelines
to best reflect the current priorities: a Clean, Safe and Vibrant Pier for all.
3.D.b
Packet Pg. 44 Attachment: SMPC FY2021-22 Work Plan (4579 : SM Pier Corporation FY21/22 – Adopt Proposed Budget and Work Plan; Modify Annual
3.D.b
Packet Pg. 45 Attachment: SMPC FY2021-22 Work Plan (4579 : SM Pier Corporation FY21/22 – Adopt Proposed Budget and Work Plan; Modify Annual
3.D.b
Packet Pg. 46 Attachment: SMPC FY2021-22 Work Plan (4579 : SM Pier Corporation FY21/22 – Adopt Proposed Budget and Work Plan; Modify Annual
FY2021-2022 AREAS OF FOCUS
Governance & Revenue
Composition:
• 3 Santa Monica Pier Corporation Board Members
• 3 City Staff Members (1 from City Manager’s Office, 1 from City Attorney’s
Office & 1 from Office of Pier Management)
• 4 Representative from Pier Businesses
• 2 Santa Monica Pier Corporation Staff Members
Goal:
To determine and recommend to Council the best governance and revenue
model moving forward.
Developments to Date:
The Governance & Revenue Study Group determined during their first
meeting that the stress and burdens of the pandemic amplified the
shortcomings and tensions of the current model of governance for the Pier as
well as the revenue model for the Pier Corporation.
At present, three organizations play significant roles on the Pier, often with
incongruent and sometimes directly competing interests:
• Santa Monica Pier Corporation - Manages marketing and events,
including Pier-produced programming and rentals by outside entities
for events, filming, private parties and corporate promotions; the
Pier Corporation Board also has an advisory role in new and
extended leases.
• Office of Pier Management - Oversees the day-to-day operations of
the Pier including leasing, maintenance, planning and public safety.
• Santa Monica Pier Lessees Association - Assures that the voices
and concerns of the Pier’s business tenants are heard and
understood.
The study group has begun and will continue to research the governance and
revenue structures of other, similar venues and comparing the specific styles
(BID, City-governed, Non-profit governed, etc.) as well as look deeper into
our current model. Past research projects, including the Pier Corporation’s
3.D.b
Packet Pg. 47 Attachment: SMPC FY2021-22 Work Plan (4579 : SM Pier Corporation FY21/22 – Adopt Proposed Budget and Work Plan; Modify Annual
2011 Governance Study and 2015 Access and Use Study, are also being
reviewed.
Community Engagement
Composition:
• 3 Santa Monica Pier Corporation Board Members
• 1 Member of the City Planning Board
• 6 Representatives from Pier Businesses
• 2 Representatives from the Santa Monica Community
• 2 Santa Monica Pier Corporation Staff Members
Goal:
To explore, identify and implement tactics that will strengthen the
relationship Santa Monica residents and the Santa Monica Pier.
Developments to Date:
The study group has identified seven concepts:
• Local artist installation in Merry Go-Round & windows (with
additional emphasis on youth via schools & youth centers)
• School year kickoff day
• Non-profit go-to meeting space
• Social media community member highlight
• Resident SM Pier shirt design contest
• Happy Hour
• Monthly community gathering tradition (example: “First Tuesdays”)
Focus moving forward is prioritizing those which can best be implemented
as soon as possible and then executing that implementation, with the
ultimate goal of building tradition.
Programming Priorities
Composition:
• 3 Santa Monica Pier Corporation Board Members
• 5 City of Santa Monica Staff Members (1 from Office of Pier Management,
1 from Cultural Affairs, 1 from the Community Events Office, and 2 from
Harbor Patrol)
3.D.b
Packet Pg. 48 Attachment: SMPC FY2021-22 Work Plan (4579 : SM Pier Corporation FY21/22 – Adopt Proposed Budget and Work Plan; Modify Annual
• 3 Representatives from Pier Businesses
• 1 Representatives from the Santa Monica Community
• 2 Santa Monica Pier Corporation Staff Members
Goal:
To identify and prioritize programming that will best serve all stakeholders
in the immediate post-pandemic period and ongoing future.
Developments to Date:
The study group has begun work to formulate a policy for extended events –
those which would have a presence on the Pier for more than 10 days – on
the Pier Parking Deck.
3.D.b
Packet Pg. 49 Attachment: SMPC FY2021-22 Work Plan (4579 : SM Pier Corporation FY21/22 – Adopt Proposed Budget and Work Plan; Modify Annual