SM PIER — Facing an 80 percent decline in corporate sponsorships, Pier Restoration Corp. officials announced in March the Twilight Dance Series was in jeopardy and rallied City Hall officials and Santa Monica residents to pitch in to save the annual free summer concerts.

What they didn’t mention was the other side of the ledger.

While the decline in revenue was real, records of the concert series’ budget between 2004 and 2009 provided by the PRC show the deficit may have had as much to do with sharply increased spending on the concerts as it did with fewer sponsorship deals.

Holding the event cost an average of $202,000 for the years 2004 through 2007, but by last year the series’ budget had ballooned to $359,000, a 78 percent spike, the records show.

The higher price tag was mostly the result of increased spending on talent, which in turn brought in bigger crowds that required more spending on police supervision, private security and sound and lighting equipment, pier officials said.

Ben Franz-Knight, the PRC’s executive director, said the higher spending on the concerts was driven by a big fundraising year in 2008, when pier officials brought in $140,500 in sponsorship money, nearly triple the average figure for the previous four years.

That bounty led to an increased investment in the quality of the shows, he said.

The PRC spent $175,005 on “talent and producer” costs alone in 2008, a 54 percent increase from the $114,000 it spent the year before.

In 2009, though, fundraising from sponsorship deals took a nose dive along with the rest of the economy, and the pier brought in just $29,218 in corporate underwriting.

Officials balked at reigning in spending on the concerts, in part because 2009 marked the 25th year of the series, as well as the pier’s centennial anniversary, and there was a feeling the concerts should be part of the celebration. There was also hope fundraising would improve in 2010 and a reluctance to scale back an event that seemed to be gaining momentum.

“We weren’t in a position where we wanted to back off what we were doing,” Franz-Knight said. “And that’s one of the things that contributed to the position we were in in January.”

Franz-Knight said the PRC didn’t spend recklessly in 2009, it simply tried to keep the popular event from declining.

“I would say any time you’re working on a project and you attain a new level, the goal is always to build on that level,” he said.

In 2009, one way officials tried to improve the event was by adding a wine garden during the concerts, which was paid for with $26,000 budgeted for miscellaneous expenses. While the wine bar didn’t turn a profit last year, Franz-Knight said pier officials hope it will become a revenue generator for the concert series.

Even though 2008 was a standout year for fundraising, Franz-Knight said it was the first time the PRC had “fully leveraged the concerts” to bring in sponsorship money, so it was realistic to expect underwriting levels would soon return to or exceed that benchmark.

Since the call for fundraising help in March, the PRC has already raised $156,000 in sponsorships and donations, Franz-Knight said, though $85,000 came from City Hall and $20,000 came from the Bayside District Corp., the public private organization that oversees Santa Monica’s Downtown commercial district.

The PRC’s board, meanwhile, has set up an ad hoc committee tasked with developing a 3- to 5-year plan for keeping the concert series financially viable.

PRC Board Chairperson Kent Smith said the committee will be looking at a range of options for putting the series on firm financial ground, including examining ways to partner with a radio station to put on the shows more cheaply.

CBS Radio this year proposed sponsoring nine concerts while saving the PRC money, but pier officials opted to stay with longtime Twilight Dance Series producer Katharine King. Instead of working on a deal with CBS, the PRC approached City Hall with an increased funding request, which was granted, and started soliciting donations from the public.

Smith said rushing into a deal with a radio station would have been a mistake.

“Our minds are open to that but we want to examine it really closely,” he said. “When you look at other ways of having the Twilight Dance Series, there’s nothing that doesn’t have some strings attached.”

The ad hoc committee will begin holding meetings in May to discuss ways to fund the concert series. Its plan will be presented to the PRC board and then to the City Council.

While noting the need for a long-term plan to keep the concert series going, Smith denied the budget deficit this year was the result of poor decision making.

“I think the money has been well spent. We just have to find a way to do this where we’re not at the 11th hour on our knees pleading with the community to find the dollars,” he said.

King, who has produced the series since its beginning 25 years ago, said the fee she charges is a bargain for the community.

She declined to say how much of the “talent and producer” fee is profit for her company, but said the event’s overall production budget is a quarter or less of what other similar events cost.

“It is just so fractional compared to other like concert series around the country,” King said. “We get far more people and spend a lot less money.”

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