TO:
Honorable Mayor and Members of the City Council
THROUGH:
Talyn Mirzakhanian, City Manager
FROM:
Michael Codron, Interim Community Development Director
Britny Coker-Moen, Environmental Programs Administrator
SUBJECT:Title
Consideration of a Request from the Oceanographic Teaching Stations, Inc. (OTS) for the City to Contribute Annual Funding for the Next Three Years in the Amount of $110,000 for Roundhouse Aquarium Support and Provide Direction to Staff (Not Budgeted) (Interim Community Development Director Codron).
(Estimated Time: 30 Mins.)
DISCUSS AND PROVIDE DIRECTION
Body
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RECOMMENDATION:
Staff recommends that the City Council consider a request from the Oceanographic Teaching Stations, Inc. for the City of Manhattan Beach to provide ongoing annual funding in the amount of $110,000 each year for the next three years to support the Roundhouse Aquarium with equipment repairs, maintenance, and replacements. If the Council would like to fund the request in whole or in part, then direction should be provided to staff regarding the timing and amount of the funding award.
FISCAL IMPLICATIONS:
This item is not funded in the Fiscal Year (FY) 2025-2026 adopted budget. If the City Council approves the request, the funds would be appropriated from the undesignated General Fund balance. Alternatively, the City Council could direct staff to bring the request back for consideration as part of its mid-year budget review, or during the FY 2026-2027 budget adoption process.
Staff explored additional funding sources, including the State Pier Fund. Per the City's operating agreement with the State of California, parking meter revenues generated from the four Pier parking lots shall be utilized for the operation, care and maintenance of the Pier, four adjacent parking lots and comfort station. A structural inspection and condition assessment of the Pier is currently underway. After completing the inspection and assessment, City staff will have a clearer understanding of the Pier's condition and funding needs for any rehabilitation or capital projects. Until this assessment is complete, staff recommends retaining all State Pier Fund revenues in case there are significant structural needs. Additionally, these funds may only be used for building care and maintenance, which excludes most of the Roundhouse Aquarium's funding request list.
BACKGROUND:
Since 1980, the nonprofit Oceanographic Teaching Stations, Inc. (OTS) has operated the Roundhouse Aquarium at the Roundhouse building, located at the end of the Manhattan Beach Pier, with a goal of teaching students and visitors about marine life and the environment.
On December 4, 2018, following an extensive renovation and expansion of the Roundhouse Aquarium, the City Council approved an amended operating agreement (Attachment 1) between the City and OTS, which addressed the existing and continued occupancy of the Roundhouse Aquarium through July 31, 2028 (the initial term).
After the initial term, the agreement states that the terms of the agreement shall continue subject to the right of either party to terminate the agreement pursuant to “Section 16. TERMINATION OF CONTRACT.” In the agreement, “Section 7. FACILITIES” states that interior maintenance and repairs for the Roundhouse Aquarium are to be provided by OTS.
At the June 3, 2025, City Council meeting, the City Council approved a request by Mayor Howorth and Councilmember Tarnay, with a third vote by Councilmember Charelian, to discuss potential funding options to support the Roundhouse Aquarium.
On July 17, 2025, OTS submitted a letter to the City requesting annual funding in the amount of $110,000 for the next three years (FY 2025-2026 through 2027-2028) (Attachment 2). The funding is requested to provide annual support for repairs and maintenance of the Roundhouse Aquarium interior, including tanks and life support systems, and to fund a reserve for the future replacement of tanks, life support systems, and displays.
Since the completion of the renovation and expansion in 2018, the Roundhouse Aquarium has served more than 1,100,000 guests and students. In 2024, 243,000 guests and students visited the Roundhouse Aquarium, 91 percent of which were visitors not tied to school field trips. These visitors also contribute to the local Manhattan Beach economy – shopping, dining, and enjoying services offered by nearby businesses – making the Roundhouse Aquarium not only an educational cornerstone but also an economic driver for the City.
OTS receives approximately 78 percent of its revenues from private donors such as Skechers USA, Inc. and the Harrison Greenberg Foundation (HGF). OTS is heavily dependent upon the donations and fundraising efforts of HGF, particularly the Splash Gala fundraiser. For the Aquarium’s FY 2025-2026, which began September 1, 2025, there will not be a Splash Gala fundraiser, and OTS projects a negative cash flow of approximately $85,000, before potential equipment replacements.
Over the past three years, the Roundhouse Aquarium has experienced rising operating costs and has spent approximately $389,000 on equipment maintenance, repairs, and replacements, ranging from $60,000 to $249,000 per year. Maintenance and repair costs fluctuate year-to-year due to the unpredictable nature of operating a facility located in a marine environment, which is exposed to continuous saltwater, wind, and weather impacts and challenges.
As a nonprofit entity that provides a free service to the community, OTS is not able to increase prices to offset the rising operating costs of the Roundhouse Aquarium and relies heavily on charitable contributions. While fundraising efforts continue, OTS’ request is intended to ensure that the aquarium remains safe and functional.
According to OTS, ongoing maintenance, repairs, and equipment replacements are necessary to safeguard the marine exhibits and ensure that the Roundhouse Aquarium remains a public resource that will continue to deliver meaningful experiences to visitors and students. OTS is requesting an annual allocation of $110,000 as follows:
- $30,000 for annual maintenance of the Roundhouse Aquarium interior;
- $40,000 for annual tank and life support system maintenance; and
- $40,000 to contribute one third of the annual reserve for the replacement of tanks, life support systems, and displays.
DISCUSSION:
The City Council recently adopted the FY 2025-2026 Budget. Given that the OTS request was not budgeted for FY 2025-2026, if directed by the City Council to do so, the request can only be funded from the undesignated General Fund balance. The current undesignated General Fund balance is $621,637.
Alternatively, the City Council could select to consider the request during the mid-year budget review, or during the FY 2026-2027 budget process. Deferring consideration of the request would give the City Council the opportunity to consider the funding in light of all the other demands on the General Fund.
Staff recommends that the City Council discuss the OTS request and provide direction.
Staff has identified four alternatives for City Council’s consideration:
- Option One: Fund the request in whole or in part from the undesignated General Fund balance. If this option is selected, the City Council shall specify the amount and term;
- Option Two: Direct staff to bring the request forward as part of the City’s mid-year budget review. Include in this direction, what, if any, other information the City Council requires to facilitate a decision on the amount and duration of funding upon mid-year budget review;
- Option Three: Defer the decision to the FY 2026-2027 budget adoption process, at which point City Council may reconsider the request based on availability of funds; or
- Option Four: Deny the OTS request.
If, at any point, City Council appropriates funds for OTS maintenance and repairs, the City Council shall also direct staff to amend the current agreement to correspond with, and memorialize, the decision.
PUBLIC OUTREACH:
Formal public notice is not required for this item; however the item was included in the agenda for this meeting, which was posted in accordance with the law. City staff also met with Oceanographic Teaching Stations, Inc. representatives regarding the repair and maintenance needs of the Roundhouse Aquarium.
ENVIRONMENTAL REVIEW:
The City has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as defined under Section 15378 of the State CEQA Guidelines because it consists of an administrative activity of government that will not result in direct or indirect physical changes in the environment. Therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines the activity is not subject to CEQA. Thus, no environmental review is necessary.
LEGAL REVIEW:
The City Attorney has reviewed this report and determined that no additional legal analysis is necessary.
ATTACHMENTS:
1. Agreement – Oceanographic Teaching Stations, Inc. (2018)
2. Letter from Oceanographic Teaching Stations, Inc.
3. PowerPoint Presentation