Agenda #: 5.9
Meeting Date: November 15, 2022
TO: Honorable Mayor and Members of the City Council
FROM: Daniel Fox, City Manager
TITLE: FRANCHISE AGREEMENT WITH FOCUS MEDIA GROUP, INC. FOR
THE REPLACEMENT AND MAINTENANCE OF BUS STOP
AMENITIES CITYWIDE AND FOR THE BUS SHELTERS
ADVERTISEMENT PROGRAM THROUGH JUNE 30, 2027.
STRATEGIC
GOAL: Safe, Sustainable & Healthy Community
RECOMMENDATION:
A. Determine that approval of the proposed Franchise Agreement is Categorically Exempt (Class 2) from the California Environmental Quality Act pursuant to section 15302 of the CEQA Guidelines; and
B. Approve, and authorize the Mayor to sign a Bus Shelter Franchise Agreement with Focus Media Group, Inc., through June 30, 2027 that will provide for:
1. Procurement and installation of bus stop amenities, in the amount of $1,099,657.11, plus a contingency amount of $100,300 for contract change orders, to be approved by the City Manager, for a total authorization amount of $1,199,957.11;
2. Administration and revenue sharing of a Bus Shelter Advertising Program; and
3. Maintenance Services for all bus stop amenities and shelters citywide.
FINANCIAL IMPACT:
The Franchise Agreement with Focus Media Group, Inc. (FMG) has three (3) components: Construction, Advertising, and Maintenance.
Construction
The City Council allocated a total of $1,200,000 in Proposition A (Prop A) Funds for the Citywide Bus Shelters Replacement Project (CIP No. TI22300) as part of the City’s Capital Improvement Program (CIP) in FYs 2021/22 and 2022/23. The construction contract as proposed will cost $1,099,657.11. The proposed contingency amount is $100,300, which brings the total allocation to $1,199,957.11.
The proposed contingency will only be used in the event of unforeseen circumstances that will warrant a contract change order.
Citywide Bus Shelters Replacement
Program (CIP # TI22300) Budget
Encumbrance/
Expenses Balance
Proposition A $1,200,000 $1,200,000
Contract Amount ($1,099,657.11) $100,342.89
Contingency ($100,300) $42.89
Balance $42.89
Advertising
Quarterly, FMG will pay the City a fee of 20% of the gross advertising revenue or $240 per advertising bus shelter per year (currently there are 30 advertising bus shelters, hence $7,200 per year) whichever is greater. Based on the current market condition the total annual City revenue share calculated based on 20% of the gross revenue by FMG is estimated at $32,000 per year. Due to the use of Prop A funds for the replacement/installation of the shelters, all advertisement revenue sharing generated will be returned to the City’s Prop A Local Return Funds, as required by Prop A.
Maintenance
All costs associated with routine maintenance works will be covered by FMG. FMG will be reimbursed by the City for pre-approved “Major Repairs,” as defined in the attached Agreement. The cost of the reimbursement will be primarily paid by deduction from the City’s advertising revenue share.
BACKGROUND:
On November 16, 2021, the City Council approved the design concept for replacing the existing original bus shelters with advertising panels and incorporating the City’s logo into the new shelters’ back panels.
The City’s current Bus Shelters Advertisement Franchise Agreement will expire by the end of the current fiscal year. As part of the Citywide Bus Shelters Replacement Project, staff was tasked with soliciting proposals for, and negotiating, a new franchise agreement, which includes a comprehensive maintenance and advertising program.
On April 8, 2021, staff released a request for proposal (RFP), and on May 12, 2021, the process closed. The City received two proposals that did not meet the requirements of this program/project. Neither of the two proposals included the full scope of the construction component of the work or included the full scope of the maintenance work as detailed in the RFP. Also, one of the proposals did not include advertising program on bus shelters. As such, both proposals were considered non-responsive and eventually were rejected. Since all the requirements of the City’s procurement process were met, after consulting with the City Attorney, staff started the process of soliciting companies directly, in order to have the flexibility to find a business partner who is qualified to take on this unique program/project.
DISCUSSION:
After soliciting proposals from multiple firms, and through the evaluation process, Focus Media Group, Inc. (FMG) was determined to be the most qualified company to perform the tasks associated with this program/project, including construction, advertising, and maintenance. Its final proposal met all of the requirements of the City.
The ultimate goal of this program/project is to provide clean, safe, and functional bus stop amenities for the community while incorporating design elements from the City’s enhanced streetscape guidelines.
Construction
The construction component of this program/project consists of the removal and disposal of existing amenities, removal and replacement (R&R) of existing damaged concrete, and the procurement and installation of new amenities, i.e. shelters, benches, and trash receptacles, as applicable. The tentative schedule for the construction phase is as follows:
• December 2022 Commence procurement
• February 2023 Commence installation of unsheltered bus stop amenities • April 2023 Commence installation of bus shelters
• June 2023 Complete all improvements
More details on the installation work are provided in Exhibit “A” of the proposed Franchise Agreement (Agreement) in Attachment 1.
Advertising
As proposed in the Agreement, FMG will manage and maintain all aspects of the Bus Shelters Advertising Program, as provided in Exhibit “B” of the Agreement.
FMG will lease advertising space within the bus shelters, and, from the revenue derived from those leases, will pay the City a revenue share. The guaranteed amount of the revenue share paid to the City is 20 percent of the bus shelter advertising revenue or $240 per shelter per year, whichever is greater. Below is a breakdown of the proposed revenue share plan.
Revenue Type Quantity Annual Revenue
to City
GUARANTEED Revenue Share 30 shelters @
$240/year $7,200
ESTIMATED Revenue Share @ 20% based
on current market condition 30 shelters $32,000
The payment to the City will be on a quarterly basis and will be supported by a Statement of Accounts.
The City will have reasonable access to any of the FMG’s books, documents, papers, and records that relate directly to the Agreement. As noted previously, all revenue generated by this Program will go back to the City’s Prop A Local Return Funds.
FMG will, at least two (2) times per year, for at least ten (10) consecutive calendar days, display at least one (1) public service announcement in lieu of paid advertising at each bus shelter. FMG will arrange for the service and installation of the public service announcements. The City will be entitled to specify certain public service messages to be displayed.
Maintenance
Per the proposed Agreement, FMG will perform the following ongoing maintenance services.
Routine Maintenance
- One (1) routine maintenance visit to all locations on Mondays and a second weekly visit to agreed-upon “Hot Spots” per week. “Hot Spots” will be identified through a collaboration between FMG and City staff.
- Perform five (5) days a week maintenance visits to four (4) Diamond Bar Blvd designated locations (bus stops located on Diamond Bar Blvd. between Golden Springs Drive and Palomino Drive)
- Perform pressure washing as needed and steam cleaning to all sites six (6) times annually, or as needed.
FMG will respond to as-needed maintenance requests within three (3) hours of notification by the City. Damage, vandalism, or graffiti will be repaired within two (2) working days. FMG will respond to dangerous conditions exposed to the public within 24 hours and repair in five (5) calendar days.
Repair and Replacement
FMG, at its sole cost and expense, maintain, repair, cleans, and service all street furniture, keeping them, their appurtenances, and the immediately surrounding areas in a safe, neat, attractive, environmentally clean, and sanitary condition. “Major Repairs” is defined as those which require parts, components, or specialty contractor services with a retail value above $250 per replacement or repair, and are subject to City approval.
The City will reimburse FMG for any City-approved “Major Repairs” through a deduction from the quarterly revenue share. Any shelter or bench that requires “Minor Repairs” is defined as any repairs less than $250 per shelter or bench. “Minor Repairs” will not be charged to the City.
FMG will maintain and keep current, a daily report form that records all ongoing work and maintenance functions performed by FMG’s personnel. These daily reports, prepared in a form and content acceptable to the City, will be submitted to the City's Project Manager on a monthly basis.
CEQA Determination
The proposed Franchise Agreement and project is Categorically Exempt (Class 2) from the California Environmental Quality Act pursuant to section 15302 of the CEQA Guidelines. Class 2 exemptions include replacement or reconstruction of existing structures and facilities where the new structures will be located on the same site and have substantially the same purpose and capacity. The project will replace existing bus stop and shelter amenities in the same locations as existing facilities and therefore qualifies for a Class 2 exemption.
LEGAL REVIEW:
The City Attorney has reviewed and approved the Agreement as to form.
PREPARED BY:
REVIEWED BY:
Attachments:
1. 5.9.a Bus Shelters Franchise Agreement