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CC - Approval of a Three-Year Memorandum of Understanding, with Two Additional One-Year Options, with the City of Santa Monica to Continue Providing Bus Advertising Services.
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Meeting Date: December 10, 2021
Contact Person/Dept: Samantha M. Blackshire/Transportation Department
Phone Number: (310) 253-6535
Fiscal Impact: Yes [X] No [] General Fund: Yes [] No [X]
Public Hearing: [] Action Item: [] Attachments: []
Commission Action Required: Yes [] No [X] Date:
Public Notification: (E-Mail) Meetings and Agendas - City Council (12/07/2021); City of Santa Monica (12/07/2021)
Department Approval: Rolando Cruz, Chief Transportation Officer (11/18/2021)
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RECOMMENDATION
Staff recommends the City Council approve a three-year Memorandum of Understanding (MOU), with two additional one-year options, with the City of Santa Monica to continue managing the bus advertising program.
BACKGROUND
The City of Culver City’s Transit Operations Division, known as Culver CityBus (CCB), is responsible for providing public transit service within the City of Culver City and surrounding communities. CCB’s friendly bus operators drive 50 Compressed Natural Gas (CNG) buses and three Battery Electric Buses (BEB) in-service carrying approximately five million riders annually pre-COVID and approximately one million riders currently. Currently, the BEBs are not collecting advertising revenue because they are fully wrapped in promotion of CCB’s fleet electrification efforts. The buses travel over an area encompassing 25.5 square miles. Since CCB services the Westside of Los Angeles County, as does Santa Monica’s Big Blue Bus (BBB), the City Council previously concluded that allowing revenue-generating advertisements on the exterior surfaces of its buses is a reasonable means of maximizing use of Culver CityBus capital investments and providing additional revenue to the Transit Fund.
The City of Culver City originally entered into an MOU with the City of Santa Monica to provide bus advertising services in 2011. This was after the City of Culver City had released an RFP #1472 - Transit Advertising on Culver CityBus Buses/Shelters/Benches on December 6, 2010. During this timeframe CCB was contacted by BBB staff who proposed that they manage the bus advertising program. By extending their advertising program to include CCB it would allow a broader reach for marketing on the Westside. BBB proposed that they manage all aspects of CCB’s advertising program including the sales and installation in exchange for 30% commission on net advertising sales as opposed to up to a 50% commission charged by some advertising brokers. As a result of staff’s discussions with BBB, the City Manager and Transportation Department staff, in consultation with the City Attorney’s Office, decided to pursue the possibility of a partnership with the City of Santa Monica regarding bus advertising. The City of Culver City then suspended RFP #1472. On June 27, 2011 City Council approved staff’s recommendation to enter into an MOU with the City of Santa Monica allowing BBB to provide bus advertising services.
DISCUSSION:
The original agreement was for two years with a first, second, and third modification of the agreement to extend the terms by one additional year. The latest agreement was approved by City Council on June 13, 2016 for a three-year term and two one-year extensions, which expired on June 30, 2021. Although the existing agreement has expired, CCB has agreed to the continuation of the same terms and conditions with BBB on an informal basis as we work to obtain current City Council authorization. The gap in coverage was due to staffing changes associated with the budget restructuring process, which has been addressed, on the part of BBB. On November 9, 2021 the Santa Monica City Council approved establishment of a new MOU that would extend the bus advertising program for three-years with two one-year extensions.
The Transportation Department has received the following net revenue over the duration of the previous MOU:
Staff believes it remains beneficial for the City of Culver City to enter into another MOU with the City of Santa Monica due to the combined fleet size of approximately 245, which is attractive to companies seeking advertising space. The advertisements would be consistent in content with those placed on BBB buses. It is also in the best interest of the City of Culver City since BBB has once again agreed to continue the 30% commission rate. CCB will continue to receive quarterly payments along with the appropriate supporting documentation for all ad sales. In order to continue the existing bus advertising program staff is recommending the establishment of a new three-year MOU with two one-year extensions. This would allow BBB to continue its management of the City of Culver City’s bus advertising program which has proven to be beneficial.
Culver City Municipal Code Section 3.07.055.F exempts from competitive bidding requirements any contract involving the purchase of equipment, goods, supplies, or services entered into with another governmental entity. This MOU with the City of Santa Monica falls within this exemption.
FISCAL ANALYSIS
The Transportation Department accounts for bus advertising revenue during the annual budget process and there are no fiscal impacts to the approval of this agreement. All revenue derived from this agreement from this will be recorded in account 20370200.365655 (Bus Operations Advertising Revenue).
ATTACHMENTS
None
MOTIONS
That the City Council:
1. Approve a Memorandum of Understanding, for a three-year term and two one-year extensions, with the City of Santa Monica to provide bus advertising services;
2. Authorize the City Attorney to review/prepare the necessary documents; and
3. Authorize the City Manager to execute such documents on behalf of the City.