REPORT TO THE CITY COUNCIL December 4, 2014 FROM: BRIAN MARSHALL, Director Department of Transportation BY: JEFF LONG, Planning Coordinator II Department of Transportation SUBJECT ..Title Award a five-year revenue contract for bus advertising services to Lamar Transit Advertising for $2,000,000 (RFP No. 9301) ..Body RECOMMENDATION Staff recommends Council award a five-year revenue contract to Lamar Transit Advertising for $2,000,000 for bus advertising services. EXECUTIVE SUMMARY The Department of Transportation ("DOT")/Fresno Area Express has contracted for bus advertising services since 2001. The current contract is with Lamar Transit Advertising (Lamar), which expired on August 27, 2014. The revenue from the advertising contract is received by the DOT and is used to fund the cost of providing public transportation services. Based on the terms of the contract, Lamar will guarantee minimum annual payments of $400,000 for exterior bus advertising services. All advertisements, before being placed on a bus, are subject to review and approval by the Director of the DOT or designee. BACKGROUND In 1999, staff was directed to evaluate bus advertising as a potential revenue source. From this evaluation, a determination was made to enter into a contract for exterior bus advertising that provided a minimum revenue guarantee. Since this time the department has received more than $3 million from bus advertising. These revenues are used to fund the cost of providing public transportation services. On August 27, 2014, a Notice Inviting Bids was advertised in the Business Journal and posted on the City of Fresno website. One bid proposal was received and opened on September 30, 2014. Other potential proposers chose not to provide a bid, citing high guaranteed revenue as a reason for not submitting bids. The bid proposal received by Lamar guarantees an annual minimum payment of $400,000 and included interior bus advertising, as well as schedule guides. In addition, Lamar will prepay the contract revenue guarantee at the beginning of each contract year. The contract will be in effect for an initial period of five years, with provisions for two additional one-year extensions. ENVIRONMENTAL FINDING By the definition provided in the California Environmental Quality Guidelines Section 15378, this item does not qualify as a "project"; therefore, it is exempt from the California Environmental Quality Act requirements. LOCAL PREFERENCE Local Preference was not implemented because the DOT fleet of buses, which are used for advertising, are federally-funded. FISCAL IMPACT Revenue from bus advertising was included in the Department's Fiscal Year 2015 Budget. Attachment: Listing of Proposals Proposal Review Committee Report