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SR-040886-11BRP:DTA:VR Council Meeting: April 8, 1986 TO: Mayor and City Council FROM: City Staff ~~ APR • 8 14if ~ j~.r ~~ ~ ~ ~- Santa Monica, California SUBJECT: Recommendation to Approve Agreement with Nostrum, Inc. for the Provision and Maintenance of Beach Trash Barrels in Return for Advertising Opportunity INTRODUCTION This report describes the agreement between the City and Nostrum, Inc. in which beach trash barrels were provided to the City in return for Coppertone advertising incorporated in an anti-litter slogan beginning in 1980. The withdrawal of Coppertone from this arrangement is explained, and a recommendation is made to renew the agreement with Nostrum, Inc. with two new advertisers, McDonald's and K-EARTH radio station. In the agreement the City will continue to have the first right of refusal in approving the advertiser displayed on the beach barrels. BACKGROUND In March, 1980 the City Council approved a proposal to allow advertising by Coppertone tanning products with an anti-litter message on beach barrels which were provided and maintained by the company at their cost. 1,000 barrels were provided to the City each year and stored and refurbished during the winter months saving the City approximately $5-10,000 annually in replacement and labor costs. The City was also given the ~~~~ APa - 8 19fl6 - 1 - equivalent of $.50 per barrel (for labeling the receptacles) in the form of beach cleaning equipment. In 1985 the Coppertone Company changed its management priorities and is no longer interested in advertising on the beach. Nostrum, Inc. which managed the program for Coppertone has sought alternative advertisers and has renewed the agreement with several cities in Southern California including Long Beach, Seal Beach, San Diego, Huntington Beach and Del Mar. Nostrum's policy is to seek only non-controversial advertising and excludes tobacco, alcohol and political accounts. Companies sought include soft drinks, radio stations, suntan products and toys. The two advertisers interested in the Santa Monica beach project are McDonald's and K-EARTH radio station. Three 8"x23" stickers bearing the companies' logos and an anti-litter message would be placed on each barrel (see the attached proposed sticker design). The stickers would have a light blue blackground, be placed on tan-colored barrels to blend with the beach environment, and carry an anti-litter slogan which includes the name of the city. The agreement would be entered into on a year-by-year basis. The City would agree that the use of the receptacles by other commercial sources would not be permitted. RECREATION AND PARKS COMMISSION ACTION On March 20, 1986 at the regularly secheduled meeting of the Recreation and Parks Commission the Nostrum, Inc. proposal was agendized. The Commission expressed its disapproval of the staff - 2 - recommendation to utilize trash cans for advertising on the beach and passed a motion that "the Recreation and Parks Department maintain and pay for the purchase, maintenance and placement of trash cans on the beach which shall bear no advertising." The Commission's opposition is based primarily on adding additional clutter to the beach through advertising, as explained in a subsequent letter to the Mayor on this subject: "Our concerns are two-fold. First, we believe that beaches should be kept in their natural beauty to the extent possible; every effort should be made to maintain the beaches in the most non-commercial, aesthetically pleasing state. Bold letter advertising with brightly-colored logos espousing a commercial message has no place on our beaches. Residents and visitors go to the beach to enjoy the recreational pleasures provided, and as a respite from the incessant barrage of advertising and commerce in our cities. While we appreciate the financial benefits that the Beach Fund would realize from the proposed contract (approximately $5,000), we do not believe that the economic considerations override all other considerations, which we also must examine. Our second concern focuses on the particular contract and, specifically, the City's further explicit and implicit support of McDonalds. As you may recall, when the contracts to provide food service at the beach were negotiated and came before the Commission, we expresssed strong opposition to McDonalds. However, based on the fact that McDonalds was the only bidder who - 3 - could withstand the off-season lull and still turn a profit for itself and the City, we acquiesced to its proposal. We did so, however, on our belief that alternative food services also would be made available (particularly of a 'healthy' nature). To further endorse McDonalds by allowing its advertising on beach trash cans is unacceptable to the Commission." The Commission also recommended that the barrels be painted a prominent color which would make it easier to see them at night. STAFF CONCERNS For the past 5 years the City has participated in the Coppertone advertising program with no complaints about the use of trash receptacles for such a purpose. With the new color scheme developed in co-operation with Nostrum, Inc, staff feels that the barrels will be less obtrusive and more visually pleasing by repeating the tan of the beach sand and the traditional blue of the City of Santa Monica. L.A. COUNTY DEPARTMENT OF BEACHES AND HARBORS In discussion with staff of the Los Angeles County Department of Beaches and Harbors, it was learned that the County had difficulty in finding a similar sponsor for barrels on County beaches. County staff suggested that the arrangement with Nostrum, Inc. would be difficult to replicate. - 4 - BUDGET/FINANCIAL IMPACT The program provides a savings of approximately $6,200 per year in the purchase of 500 new barrels at the cost of $12.40 each to replace an average of half the barrels which rust out each year. This does not reflect the labor costs to repaint the barrel which are difficult to calculate. If the city were to forego this arrangement, the city would have to expend approximately $12,400 for the purchase of 1,000 new barrels to be used for the upcoming summer months. In addition to the cost savings of the beach barrel program, increased sales for McDonald's on the beach, a potential side benefit of this arrangement, could produce increased revenue to the Beach Fund for beach maintenance and improvements. RECOMMENDATION Staff recommends that the City Council authorize the City Manager to negotiate a renewal of the City's agreement with Nostrum, Inc. for the provision of beach trash barrels in return for the opportunity to advertise the logo of specifically approved advertisers in the context of an anti-litter message. Prepared by: Don Arnett Director Recreation and Parks Vivian Rothstein Assistant to the Director Recreation and Parks - 5 - Reference Contract No. 4662 (CCS).