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SR-042286-6HPU:EOB:jw Santa Monica, California Council Meeting: April 22, 1986 /~ 1'T APR 2 2 1986 TO: Mayor and City Council ,~ ~~~ FROM: City Staff SUBJECT: RECOMMENDATION TO AWARD BID 2048 AND AUTHORIZE THE CITY MANAGER TO EXECUTE A CONTRACT WITH WINSTON NETWORK, INC. FOR TRANSIT BUS ADVERTISING CONCESSION Introduction This report concerns the award of bid for transit bus advertising concession in the amount of $190,000 first year, $200,000 second year, $210,000 third year, and at the City's option, $225,000 fourth year and $240,000 fifth year. Background Notices Inviting Bids were published on March 28 and 29, 1986 for transit bus advertising concession. In addition, proposal forms were mailed to *five vendors. Notices were advertised in accordance with City Charter and Municipal Code provisions. One bidder submitted two proposals which were publicly opened and read on April 8, 1986 as follows: **Winston Network, Inc. - Minimum guarantee of $179,400 per year plus 50 percent of the difference between the minimum monthly rental and the monthly gross billings. Annual increases in the minimum monthly rental would be based on the annual CPI increases. * No WMBE's ** Not WMBE - 1 - !p ! f7 APR 2 2 1985 PU:EOB:jw Santa Monica, California Council Meeting: April 22, 1986 Winston Network, Inc. (Alternative proposal) - Flat fee of $190,000 first year, $200,000 second year, $210,000 third year, also at the City's option, $225,000 fourth year and $240,000 fifth year. Staff has reviewed both proposals and feels the alternative proposal will generate more revenues to the City and reduce the time spent administering the contract. In reviewing advertising revenues for the past two calendar years, the City has received $164,129 in 1985 and $163,323 in 1984. While both proposals guarantee revenues above past receipts, staff feels that the alternative flat rate proposal will provide more revenues to the City. Because of the finite amount of advertising space available it is unlikely that revenues from the proposal, based on the minimum guarantee plus a percentage of any excess, will exceed the flat fee proposal revenues. Winston Network, Inc. has been the City's advertising concessionaire for the past 10 years and has performed well during that time. Based on the above analysis and the past performance of the company, staff recommends that the contract be awarded to Winston Network, Inc. and that their alternative proposal be accepted. - 2 - PU:EOB:jw Santa Monica, California Council Meeting: April 22, 1986 Budgetary/Financial Impact The contract will provide the following revenues to the Municipal Bus Lines for the 12 month period beginning: May 1, 1986 $190,000 May 1, 1987 $200,000 May 1, 1988 $210,000 May 1, 1989 $225,000 at the City's option May 1, 1990 $240,000 at the City's option Recommendation It is recommended that the award for bid 2048 be made to Winston Network, Inc. based on their flat rate proposal and that the City Council authorize the City Manager to execute a contract with Winston Network, Inc. for the transit bus advertising concession. Prepared by: E. O. Barnes, Purchasing Agent - 3 - Reference Contract No. 4665 (CCS).