REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Travis Hopkins, City Manager
VIA: Eric McCoy, Fire Chief
PREPARED BY: Bonnie To, Principal Management Analyst
Subject:
title
Approve and authorize execution of a three-year License Agreement with Rio Media & Advertising Inc. for the Lifeguard Tower Advertisements Program
body
Statement of Issue:
The City of Huntington Beach has a total of 24 oceanfront lifeguard towers within the City’s jurisdiction. As an opportunity for revenue generation, the Huntington Beach Fire Department requested proposals from qualified vendors to implement a Lifeguard Tower Advertisement Program. Vendors submitted their proposals along with revenue projections, and based on the evaluation criteria, Rio Media & Advertising Inc. (Rio) was selected. City Council action is requested to approve and authorize execution of a three-year License Agreement with Rio for the Lifeguard Tower Advertisements.
Financial Impact:
Projected annual revenue to the City of Huntington Beach based on Rio’s Annual Revenue Projection is estimated at $700,000.
The Projected Payment Schedule from the vendor would be quarterly payments to the City, accompanied by comprehensive revenue reports.
Recommended Action:
recommendation
Approve and authorize Mayor and City Clerk to execute a three-year “Lifeguard Tower Advertising License Agreement by and Between the City of Huntington Beach and Rio Media and Advertising Inc.”
end
Alternative Action(s):
Do not approve, and direct staff accordingly.
Analysis:
As part of the City’s ongoing efforts to identify new revenue sources, the Huntington Beach Fire Department (HBFD) identified an opportunity for ad space on the back of the City’s existing lifeguard towers. HBFD issued a Request for Proposal (RFP) looking for qualified vendors to develop and maintain a Lifeguard Tower Advertisement Program. While the HBFD relies upon the expertise and skillset of potential vendors, various guidelines regarding advertisement size, quantity, location, and content were set forth. The vendor would be required to follow any applicable rules, regulations, and guidelines as required by the federal, state, City, local, and other government agencies, including the California Coastal Commission. Advertisements are to be limited in size and incorporated within existing design and layout on the back of towers only. Advertisements are not to interfere with existing tower numbers, municipal codes, and ocean safety information. Currently, there are advertisements on the back of four towers.
Two vendors submitted proposals with revenue projections to the City. Based on the RFP evaluation criteria, the vendor Rio Media & Advertising Inc. was selected. With over two decades of outdoor advertising experience, Rio is a Huntington Beach business focused on balancing community-driven advertising with strong revenue generation.
Rio’s Annual Revenue Projection is $1,000,000, of which the vendor would receive 30% and the City would receive 70%. The estimated breakdown is as follows:
• Tier 1 High-traffic towers $500,000
• Tier 2 Medium-traffic towers $300,000
• Tier 3 Low-traffic Towers $200,000
City Council action is requested to authorize execution of a three-year License Agreement with the ability to extend for one additional year with Rio Media & Advertising Inc. for the Lifeguard Tower Advertisements.
Environmental Status:
The requested action to approve an advertising contract for the display of public information items and advertisements on existing lifeguard towers is covered by Section 15061(b)(3) of the California Environmental Quality Act (CEQA) Guidelines, which exempts activities where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment.
Strategic Plan Goal:
Goal 2 - Fiscal Stability, Strategy A - Consider new revenue sources and opportunities to support the City's priority initiatives and projects.
For details, visit www.huntingtonbeachca.gov/strategicplan
Attachment(s):
1. Lifeguard Tower Advertising License Agreement