Public Works Agency
www.santa-ana.org/pw
Item # 13
City of Santa Ana
20 Civic Center Plaza, Santa Ana, CA 92701
Staff Report
February 17, 2026
TOPIC: Award an Agreement to Creative Outdoor Advertising of America, Inc., for Management of Advertising Services at Bus Stops
AGENDA TITLE
Award an Agreement to Creative Outdoor Advertising of America, Inc., for Management of Advertising Services at Bus Stops (Specification No. 25-107) (General Fund)
RECOMMENDED ACTION
Authorize the City Manager or designee to execute an agreement with Creative Outdoor Advertising of America, Inc., to sell space to advertisers at bus stops throughout the City for a term beginning February 17, 2026, and expiring February 16, 2029, with provisions for two, one-year extensions (Agreement No. A-2026-XXX).
GOVERNMENT CODE §84308 APPLIES: Yes
EXECUTIVE SUMMARY
On January 18, 2022, the City entered into an agreement with Focus Media Group, Inc. (FMG) for bus stop maintenance and advertising, with provisions for the City to receive revenue after deduction for maintenance costs. FMG generally performed contract maintenance well, however, it failed to generate sufficient advertising revenue, resulting in no revenue share to the City. After FMG was acquired by Creative Outdoor Advertising (COA) in June 2024, COA demonstrated strong advertising expertise but limited maintenance capacity. Efforts to increase sales have been successful, yet insufficient to fully cover the maintenance costs.
As a result of a competitive procurement process, Staff recommends the City enter into a new agreement with COA to solely provide advertising at City bus stops throughout the City. The agreement would replace the existing advertising and maintenance agreement with FMG. Staff recommends terminating the existing agreement with FMG (now COA) because: 1) the maintenance service levels provided did not result in sufficiently clean locations, 2) none of the expected revenue materialized because the revenue share was net of FMG’s maintenance costs, and 3) resulted in additional expenditures by the City to pay for enhanced maintenance services.
The new agreement with COA would allow COA to advertise at bus stops in the City and provide the City with guaranteed minimum revenue of $160,000 per year, however, it will
Agreement for Bus Stop Advertising
February 17, 2026
5 5
0 2
not include a maintenance function. Maintenance at the City’s bus stops will be provided separately through the Clean Cities Program; a more comprehensive program provided through the City’s existing refuse agreement with Republic Services, which includes bus stop cleaning services at no additional cost to the City.
Separating advertising services from maintenance responsibilities represents a change from the prior contract structure, however, this approach aligns with industry practice among comparable municipalities and allows each contractor to focus on its core expertise. Under this structure, the City receives guaranteed advertising revenue that is no longer offset by maintenance costs.
DISCUSSION
The City of Santa Ana is a major user of Orange County Transportation Authority (OCTA) bus services, with 24 active bus routes and 648 bus stops located throughout the City. These routes support an estimated 29,000 average weekday passenger boardings. The Public Works Agency (PWA) is responsible for maintaining all bus stop amenities, including shelters, benches, and trash receptacles. Maintenance activities include routine trash collection and power washing, as well as the repair or replacement of damaged furniture, lighting, and decorative or artistic elements at bus stops.
Maintenance needs are not uniform across the City, as certain routes or corridors require more frequent or enhanced maintenance due to higher usage levels and incidents of vandalism.
On January 18, 2022, the City Council awarded an agreement to Focus Media Group, Inc. (FMG) for bus shelter maintenance and advertising services. In June 2024, FMG announced that it had been acquired by Creative Outdoor Advertising (COA), which subsequently assumed all of FMG’s contractual agreements, including the agreement with the City. Under the agreement, advertising revenue was intended to fully offset the cost of bus shelter maintenance with any net revenue being remitted to the City on an established revenue-sharing structure. The revenue share agreement would provide the City 25% of gross revenue advertisement sales minus the cost of maintaining the bus stops.
However, actual maintenance costs exceeded the level of service that could be supported by the advertising revenue alone, and to date, the City has not received any advertising revenue under this agreement.
At the time of the original procurement, the Request for Proposals sought a single contractor to provide bus shelter maintenance, advertising sales, and installation and management of billboards. Under that procurement structure, FMG was effectively the only proposer willing to assume responsibility for the maintenance obligations in addition to advertising services.
Major outdoor advertising and billboard companies expressed limited interest in submitting proposals because the solicitation required firms to provide both maintenance and advertising services to bus stops as well as to billboards, whereas many advertising firms specialize solely in advertising sales and asset management at bus stops or at billboards and do not operate maintenance programs.
Agreement for Bus Stop Advertising
February 17, 2026
5 5
0 2
As a result, competition for the contract was limited, and the City’s options were constrained by market realities at the time. Staff’s subsequent experience demonstrated that combining maintenance and advertising responsibilities under a single vendor reduced competition and ultimately contributed to performance challenges.
Maintenance service levels ultimately proved insufficient to meet community expectations.
On April 1, 2023, the City Council approved a supplemental agreement with FMG to provide expanded maintenance services at a cost not to exceed $250,000 over a two-year term ending on April 1, 2025. Despite these efforts, the City continued to receive more than 200 service requests annually, most related to excessive trash accumulation and unsanitary conditions. As a result, no additional funding was granted to continue this service model, and the supplemental agreement was allowed to expire.
In response to these lessons learned, the current procurement intentionally separated maintenance from advertising services. This approach allowed firms specializing in advertising sales to compete without assuming maintenance risk and resulted in proposals better aligned with each firm’s operational strengths while ensuring that maintenance services are provided separately through the City’s existing maintenance programs. COA will be responsible for labor associated with replacing plexiglass panels, while the City will supply the replacement materials, remove graffiti, service the refuse bins, and ensure the bus stops are in clean and sanitary condition.
PWA subsequently implemented a revised maintenance strategy focused on improving service delivery while reducing costs. Bus stop maintenance responsibilities were absorbed by existing public works programs, namely, the Clean City Program under the existing refuse agreement with Republic Services at no additional cost to the City, resulting in approximately $125,000 in annual savings. With maintenance services reassigned, PWA issued a Request for Proposals focused solely on bus shelter advertising sales in order to maximize the revenue to the City.
Request for Proposals (RFP) No. 25-107 was issued on August 4, 2025 on the City’s online bid management and publication system, PlanetBids. A summary of vendor participation and results is as follows:
859 Vendors notified
1 Santa Ana vendor notified
21 Vendors downloaded the RFP packet
2 Responsive proposals received
0 Responsive proposals received from Santa Ana vendors
Proposals were solicited, opened on August 19, 2025, and evaluated. Two proposals were submitted by the RFP deadline and were determined to be responsive to the specifications and they met the City’s requirements.
Agreement for Bus Stop Advertising
February 17, 2026
5 5
0 2
Local Outreach Efforts
The Purchasing Division advertised RFP No. 25-107 on the City’s online bid management and publication system, which directly notified two Santa Ana vendors. No Santa Ana vendors downloaded the RFP or submitted a bid for consideration.
An evaluation committee reviewed and rated the proposals based on qualifications, experience with bus shelter advertising, proposed profit-sharing structure, and references.
Based on this evaluation, the firms were ranked as follows:
Firm City Rank
Creative Outdoor Advertising of
America Inc. Sherman Oaks, California 1
My Emerald Hands LLC San Diego, California 2
Staff recommends awarding an agreement to the highest ranking firm, Creative Outdoor Advertising of America, Inc. (COA) (Exhibit 1). COA, a privately held company established in 1984, employs approximately 120 full- and part-time staff and operates public amenity advertising programs across more than 300 municipalities in North America. The company manages over 45,000 advertising units and serves thousands of clients across local, regional, and national markets. Company materials and investor statements indicate that COA has expanded significantly over the past decade, managing tens of thousands of advertising units across more than 300 municipalities and achieving notable financial performance improvements under previous ownership, including an increase in Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA).
COA’s proposal emphasizes maximizing advertising revenue through data-driven sales strategies. The firm will proactively identify and pursue potential advertisers and provide auditable monthly reports detailing advertising sales, occupancy rates, and total revenue generated. In addition, COA will implement a comprehensive digital management system to oversee advertising operations, including the use of barcodes and scanners to uniquely identify and track each advertising location and asset citywide.
COA’s revenue projections are based on 160 advertising units with 320 advertising faces.
Staff reviewed the assumptions supporting these projections, including anticipated occupancy rates, market advertising rates, and COA’s demonstrated experience selling advertising in comparable municipal markets. Staff also evaluated current utilization of advertising space in Santa Ana and determined the projections to be reasonable and achievable under current market conditions. Most importantly, the agreement provides the City with a Minimum Annual Guarantee (MAG) of $160,000 regardless of actual advertising performance, ensuring predictable revenue even if projections are not fully realized. The proposed revenue-sharing structure provides the City with either a MAG of $160,000, paid in equal monthly installments, or 55% of gross advertising revenue, whichever is greater, regardless of advertising performance, provided the minimum inventory of 160 advertising units and 320 advertising faces is maintained.
Agreement for Bus Stop Advertising
February 17, 2026
5 5
0 2
Unlike the prior agreement, the proposed agreement does not allow maintenance costs to be deducted from advertising revenues, nor does it reduce payments to the City if COA’s revenue projections are not met, provided the minimum inventory of 160 advertising units and 320 advertising faces is maintained. The City currently meets the minimum inventory and has more bus shelters planned for installation this year, further strengthening our capacity to maintain minimum advertising faces. At minimum, the City will receive $160,000 annually with the potential for higher revenues if advertisement sales exceed the guaranteed amount (MAG).
The proposed agreement structure establishes clear financial incentives for COA to actively pursue advertising sales and maximize program revenue. Under the agreement, COA is responsible for all advertising sales activities and is compensated through advertising revenue, while the City receives either a MAG or a percentage of gross advertising revenue, whichever is greater. Because COA’s financial return increases only when advertising occupancy and rates increase, the agreement inherently incentivizes the contractor to actively market available advertising space, pursue higher-value advertising contracts, and maintain high occupancy rates.
The agreement also requires regular reporting of advertising activity, occupancy rates, and revenue performance, allowing Staff to monitor program performance and address any issues promptly. The contractor’s continued success under the agreement depends on maintaining strong relationships with advertisers, demonstrating reliable service delivery, and consistently filling advertising inventory with paying clients.
By separating maintenance responsibilities from advertising operations, the revised structure allows the contractor to focus exclusively on advertising performance. This focused responsibility, combined with guaranteed payments to the City and performance transparency, creates ongoing motivation for the contractor to innovate marketing approaches, pursue premium advertisers, and maximize revenue generation throughout the term of the agreement.
ENVIRONMENTAL IMPACT
There is no environmental impact associated with this action.
FISCAL IMPACT
Revenues from this agreement will be budgeted in the General Fund-Public Works Revenues, Bus Shelter Fees revenue account (No. 01117002-51004). Future revenues will be budgeted in the General Fund-Public Works Revenues, Bus Shelter Fees revenue account (No. 01117002-51004) and appropriated in the General Fund-Bus Shelter Program-Service Enhancement expenditure accounting unit (No. 01117621).
Agreement for Bus Stop Advertising
February 17, 2026
5 5
0 2
Fiscal
Year
Accounting
Unit-
Account #
Fund
Description
Accounting Unit,
Account Description
Amount
FY 25-26
(Feb-June)
01117002-
51004
Public Works
Revenues
Bus Shelter Fees $65,000
FY 26-27 01117002-
51004
Public Works
Revenues
Bus Shelter Fees $160,000
FY 27-28 01117002-
51004
Public Works
Revenues
Bus Shelter Fees $160,000
FY 28-29
(July-Feb)
01117002-
51004
Public Works
Revenues
Bus Shelter Fees $95,000
Subtotal $480,000
Optional Two, 1-Year Extensions
FY 28-29
(Feb-June)
01117002-
51004
Public Works
Revenues
Bus Shelter Fees $65,000
FY 29-30 01117002-
51004
Public Works
Revenues
Bus Shelter Fees $160,000
FY 29-30
(Jul-Feb)
01117002-
51004
Public Works
Revenues
Bus Shelter Fees $95,000
Subtotal $320,000
TOTAL $800,000
EXHIBIT(S)
1. Agreement with Creative Outdoor Advertising of America Inc.
Submitted By: Rodolfo Rosas, P.E., Acting Executive Director – Public Works Agency Approved By: Alvaro Nuñez, City Manager