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Title:
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Approval of An Amendment to Extend the Existing Memorandum of Understanding (MOU) with the City of Santa Monica to Provide Bus Advertising Services.
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City of Culver City, California
Agenda Item Report
Meeting Date: 6/24/11 Item Number: C-13
CITY COUNCIL AGENDA ITEM: Approval of An Amendment to Extend the Existing
Memorandum of Understanding (MOU) with the City of Santa Monica to Provide
Bus Advertising Services
Contact Person/Dept.: Samantha M.
Blackshire/Transportation
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 (06/18/13)
Department Approval:
Art Ida 6/10/13
City Attorney Approval:
Carol Schwab (by H. Baker) (06/17/13)
Chief Financial Officer Approval:
Jeff Muir (by M. Noller) (06/18/13)
City Manager Approval:
John M. Nachbar (06/18/13)
RECOMMENDATION:
Staff recommends the City Council approve an amendment to the existing
Memorandum of Understanding (MOU) which will add two additional one year
options, with the City of Santa Monica to manage the bus advertising program.
BACKGROUND:
The 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. Since CCB services the Westside of Los Angeles County,
as does Santa Monica’s Big Blue bus (BBB), the City Council 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.
DISCUSSION:
The City initially released RFP #1472 -Transit Advertising on Culver CityBus
Buses/Shelters/Benches (RFP #1472) on December 6, 2010. During this timeframe
CCB was contacted by Santa Monica’s Big Blue Bus (BBB) staff who proposed that
they manage the bus advertising program. By extending their advertising program to
CCB it would allow a broader reach for marketing on the Westside. BBB proposed that
they manage all aspects CCB’s advertising program including the sales and installation
in exchange for a 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 City of Culver City, California
Agenda Item Report
with BBB, the City Manager and the City Attorney’s Office staff decided to pursue the
possibility of a partnership with the City of Santa Monica regarding bus advertising. On
February 22, 2011, staff issued Addendum #2 which suspended the bus advertising
section of RFP #1472.
On June 27, 2011 City Council approved staff’s recommendation to enter into a
Memorandum of Understanding with the City of Santa Monica for BBB to provide
bus advertising services to the City. After both the City of Santa Monica and the City
of Culver City’s City Councils approved the MOU the document was modified
several times by both City’s City Attorney’s until it was finalized a few months later.
At that time, the City of Santa Monica attempted to sell Culver CityBus advertising
space separate from that of Santa Monica’s Big Blue Bus. Due to the size of CCB’s
fleet, very few ads were sold. Thereafter, the CCB advertising space was sold in
conjunction with that of BBB increasing the net revenue received. Also, CCB was
not receiving ads from one of the major movie industry companies. Staff was told
that the broker for this agency decided not to purchase space on CCB with no other
reasoning provided. Staff continued to discuss concerns regarding the low sales of
advertising space on CCB with BBB.
The Transportation Department has received the following net revenue:
Fiscal Year
(FY)
City of Santa Monica’s
Net Revenue
Net Revenue
Received
2011/2012 $195,000.00 $65,899.27
2012/2013 $212,500.00 (estimated)
Thus Far:
$89,622.27
BBB welcomed a new Director of Transportation shortly after the MOU was
approved by the respective City Councils. After carefully monitoring the program, it
was decided to make staffing changes in order to better manage the bus advertising
program. This change allowed CCB to receive ads from the major movie industry
company. However, due to other projects, BBB staff found it very difficult to
maintain their existing work load and sell advertising space. Therefore, they decided
to contract out the sales component of the bus advertising program in hopes of
increasing sales and possibly attracting a larger national market.
Staff recommendation is to approve an amendment to the existing MOU with the
City of Santa Monica to continue the management of all aspects of the CCB
advertising program including sales and installation in exchange for the same 30%
commission on net advertising sales as was indicated in the original MOU. The only
difference from the previous arrangement would be that the City of Santa Monica will
be allowed to sub-contract out the selling of advertisement space on both their
buses and those of CCB to an outside firm. The City of Santa Monica will be issuing
an RFP in the next few months for these services. In the meantime, they will
continue selling advertising space for both agencies until a contract has been
finalized with the new firm. Although an outside firm would sell the advertising City of Culver City, California
Agenda Item Report
space, all ads must still adhere to the very strict policies already established for the
program.
Staff believes it remains beneficial for the City to continue its MOU with the City of
Santa Monica due to the combined fleet size, which is attractive to companies
seeking advertising space. It is also in the City’s best interest since BBB has agreed
to continue the 30% commission as opposed to the 50% traditionally charged by
advertising brokers. CCB would receive quarterly payments along with the
appropriate supporting documentation for all ad sales. In order to continue this
program beyond the expiration of the existing MOU, staff recommends the City
Council approve the proposed amendment to the MOU.
These services are excepted from the formal competitive bidding requirements per
Culver City Municipal Code Section § 3.07.085.A.
FISCAL ANALYSIS:
Approval of the proposed amendment to the MOU would continue the stream of
advertising revenues realized over the past two fiscal years.
MOTION:
That the City Council:
1. Approve an amendment to the existing Memorandum of Understanding with the
City of Santa Monica to provide bus advertising services for up to two additional
years (up to two one year options as approved by the City Manager); and,
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.