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APR 2 7 1999
Purch DH ML rah F \F1NANCE\PURCH\STFRPTS\SRBD2757 WPD
Council Meeting April 27, 1999 Santa MOnica, California
TO Mayor and CIty Council
FROM City Staff
SUBJ ECT Recommendation to Award Bid #2757 and Authorize the City Manager to
Execute a Contract with Gateway Outdoor Advertising for Transit Bus
Advertising Concession
I ntrod uctlon
This report concerns award of bid for a five-year advertising concession on Santa
MOnica's Big Blue Buses with three additional one-year renewal options
Background
On Apnl 13, 1999 t City Council recommended rejection of Bid #2746 to provide transit bus
advertlsmg concession and directed staff to rebid the reqUirement
On Apnl 7 and 8, 1999, m accordance With City Charter and MUnicipal Code provIsions,
Notices Invltmg Bids were published for a five-year conceSSion, With three additional one-
year renewal options, for advertiSing on the Inside and outSide of Santa MOnica's Big Blue
Buses The one-year options may be exercised unilaterally by the City Proposal forms
were mailed to eight potential conceSSionaires
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APR 2 7 &19
Four bidders submitted proposals as follows For the 12-month period beglnnmg
Gateway Mlchael-
Outdoor Allen
Advertlslna TOI Associates Oble Media
May 1, 1999 - April 30, 2000 $1,200,000 $1,250,000 $1,100,000 $1,250,000
May 1, 2000 - April 30, 2001 1,500,000 1,300,000 1,250,000 1,450,000
May 1, 2001 - April 30, 2002 1,800,000 1,700,000 1,625,000 1,550,000
May 1, 2002 - April 30, 2003 2,300,000 1,800,000 1,900,000 1,750,000
May 1, 2003 - April 30, 2004 2,700.000 2.050.000 2.225.000 2.000.000
Total for five-year period $9,500,000 $8,100,000 $8,100,000 $8,000,000
In the event that the City elects to exercise an option for any of the three one-year
extensions, the bidders propose to pay the City the following amounts for advertlsmg
concession For the 12-month period beginning
Gateway Mlchael-
Outdoor Allen
Advertlslna TOI ASSOCiates Oble Media
May 1, 2004 - April 30, 2005 $3,100,000 $2,200,000 $2,225,000 $2,150,000
May 1, 2005 - April 30, 2006 3,400,000 2,350,000 2,350,000 2,350,000
May 1,2006 - April 3D, 2007 3,800.000 2.500.000 2,450.000 2.550.000
Total for 3 additional one-
year renewal options $10,300,000 $7,050,000 $7,025,000 $7,050,000
In addition to evaluating bid proposals, due diligence was conducted on all four firms
submitting proposals City staff contacted clients of each of the firms The results of these
contacts indicated that each of the firms has performed their work responsibly and
professionally In recent years
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Staff has evaluated the bids and fmds that Gateway Outdoor Advertising IS the highest
responsible bidder Gateway Outdoor Advertlsmg has been the current provider of
advertising concessions on Santa MOnica Big Blue Buses since May 1, 1994 Their
operational performance over the past fIve years has been satisfactory DUring thiS
penod, the company has provided quality service and has been very responsive to the
City and the Santa MOnica community They have actIvely participated In and supported a
vanety of community activities and events, Including free transportation for local
elementary school students, an AIDS awareness promotion and "a poetry In motion"
campaign Under the current Gateway contract, transit advertiSing revenues have
Increased by over 75% since 1994 To ensure timely finanCial performance, appropnate
safeguards and procedures, Including a letter of credit and strengthened performance
standards Will be Incorporated Into the contract
BudaetlFlnanclal ImDact
The FY 1998-99 budget was based on the current contract, which expires Apnl 30,1999
The new contract Will Increase monthly revenue from $62,242 to $100,000 begmnmg In
May 1999 Therefore, the FY 1998-99 budget at revenue account 41-600-656-00000-
0421-10000 needs to be Increased by $75,516 ThiS Increase Will be offset by a
corresponding decrease of $75,516 In Transportation Development Act (TDA) revenue at
account number 41-600-656-00000-0275-10000 The FY 1999-00 proposed budget Will
reflect the new contract terms
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Recommendation
It IS recommended that Council take the followmg actions
1 Award Bid #2757 to Gateway Outdoor AdvertisIng and authonze the City Manager to
execute a contract with them for the transit bus advertlsmg concession
2 Approve the budget changes noted above
Prepared By Diane Howell, Buyer
Marganta Lee, Buyer
Stephanie Negnff, TransIt Development Manager
MIke Dennis, DIrector of Finance
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