Review of the Rose Bowl Operating Company

City Manager’s Office
Review of the Rose Bowl Operating
Company (RBOC)
City Council
February 3, 2014
(Finance Committee, Oct 28 & Nov 18, 2013)
City Manager’s Office
• The City of Pasadena has three operating companies
> Rose Bowl Operating Company (RBOC)
> Pasadena Center Operating Company (PCOC)
> Pasadena Community Access Corporation (PCAC)
• Established by Title 2 of the Pasadena Municipal Code
• Operate independently within parameters established by City
> Municipal Code
> Operating Agreements
 PCAC’s is currently in development
Creation of the RBOC
City Manager’s Office
• May, 1991 Organizational Study of Arroyo/Seco
Rose Bowl Department
Lack of management hierarchy
Lack of essential business functions
Lack of accountability and authority
Options: 1) Status quo, 2) Not-for-Profit, 3) Contract-out
• September, 1991 Analysis of Operating
• November, 1991 Financial Operations Review
Creation of the RBOC
City Manager’s Office
• September, 1992 Council approves in concept
• September, 1993 Council approves ordinance
• May, 1995 Operating Agreement between City
and RBOC executed
• Purpose and Function of the RBOC:
> “…to return economic and civic value to the City of
Pasadena by managing a world-class stadium and a
professional quality golf course complex in a residential
open-space environment.” (P.M.C. 2.175.110)
RBOC Operations
City Manager’s Office
• FY14 operating budget $32.4m, 24 FTEs
> Number of FTEs compares well to other stadiums
> Employees are “at-will” but participate in CalPERS
> Salaries compare favorably to comparable City
> Lower overhead than City departments; no cost
allocation except for charges from City Attorney’s Office
RBOC Oversight
City Manager’s Office
• Appointment of RBOC Board. Pursuant to Pasadena
Municipal Code Chapter 2.175.030 The RBOC’s thirteenmember board is appointed as follows:
> 1.Each Councilmember and the mayor shall nominate 1 member of a total of 8 members.
> 2.The Mayor shall nominate 1 member from persons recommended by the 7
Councilmembers and 1 member who is a voting member of the City Council.
> 3.The Tournament of Roses Association shall nominate 1 member.
> 4.The City Manager, or his/her authorized representative at the election of the City
Manager by written notice to the City Clerk, shall be appointed.
> 5.The Chancellor of the University of California, Los Angeles shall nominate 1 member.
> 6.All nominations, except the City Manager, or his or her authorized representative, are
subject to ratification by the City Council.
RBOC Oversight
City Manager’s Office
• The qualifications for board members is set forth in Section
2.175.040 subsections A and B, as follows:
> A. All seven members nominated by City Councilmembers shall be residents of the city,
and the members nominated by Councilmembers from Districts 1 and 6 shall be
residents of those districts, respectively.
> B. Each member shall have recognized competence and wide experience as evidenced
by but not limited to any of the following fields: banking; financial services; venture
capital; real estate development or financing; real estate leasing and/or property
management; senior management of a business; project management; accounting;
business law; economic development; community service. Considered as a whole, the
board should reflect experience in all these areas. Appointed members must be willing
to serve actively for the full term.
Section 2.175.045 Appointment of Tenant Representatives – was
intended to resolve any appearance of conflict of interest
RBOC Oversight
City Manager’s Office
• RBOC Board
> Well qualified and diverse backgrounds
> Standing sub-committees
 Finance
 Operations
> Able to focus in-depth on Stadium and Golf Course
RBOC Financial Results
City Manager’s Office
• Between FY95 – FY04 combined net earnings of
stadium & golf course were positive in all but one
> Ten year average of $1 million per year
• From FY05 to beginning of renovation project
combined net earnings have been stronger
> No less than $1 million annually
> High point of $3.6 million in FY06
Findings & Recommendations
City Manager’s Office
• RBOC structure has been successful
> Stadium is being operated better today than prior to
establishment of the RBOC
> Operations are cost-efficient
> Functions in a business-like fashion
> Decision making is streamlined
> Well-qualified Board of Directors provides oversight
• Financial results may have been less than
originally hoped
> Function of the marketplace, limits on events and not
Findings & Recommendations
City Manager’s Office
• RBOC operating agreement
> Executed in 1995
> Many terms are outdated – dealing with transition from
Department to Operating Company
> Review of entire agreement may be appropriate
• Recommendations for consideration by Council
> Aimed mainly at enhancing oversight of all operating
> Several would necessitate amendments to existing
operating agreements
Recommendations to City Council
City Manager’s Office
• Present information, during annual budget review
regarding anticipated adjustments in salary and
benefit line-items (revised from that presented to Finance
• Quarterly reporting to the City Council through
General Managers and/or Board Chairs
• Submit monthly financial information to the City’s
Finance Director for inclusion in Quarterly Financial
Monitoring Report to Finance Committee
Recommendations to City Council
City Manager’s Office
• Direct the City Manager to work with the GMs to
develop a policy for capital project construction
management and return to City Council for
• Direct City staff and RBOC to jointly undertake an
analysis of event coordination in the Arroyo
• Direct the City Manager to work with RBOC to
develop other proposed amendments to update the
operating agreement between the two entities
Additional thoughts
City Manager’s Office
• Staff considered merger of RBOC and PCOC into
a sports and tourism agency
> Perceived benefits: marketing, economies of scale
> Perceived challenges: disruption, merging totally
different personnel systems, disaffecting key
• General Managers are jointly exploring ways to
enhance coordination