Recommendation to authorize City Manager to execute a five-year Agreement with CBS-Decaux to construct and maintain ad-bearing bus shelters, with an option to extend the agreement for two (2) additional five-year terms.  (Citywide)
So I'm not making a motion right now. Oh, okay. I want to talk all my. I'll make the most sense of it. All right. Just so we might. Make a substitute, I'm not sure. So. Okay. When we started putting ads on bus shelters, there was a larger discussion within the city about these should be intended to provide a benefit to the city. So the first time this happened, and I'm going to ask city staff to elaborate a little bit when this happened initially they purposed , I think like the first five years of this two of these resources, which were about $360,000 a year to go to youth services. The way that the city met that that sort of idea was they purposely it to pay for the rent on the power center power centers long gone. That's fine. And I don't want to beat a dead horse, but we're we're at the we're at a place where we're renegotiating and we're executing another five year agreement on these shelters. And I think there's a few questions that need to be asked. I think, one, where are the shelters going to be located? Right. I'm going to run off a list of them where the shelters are going to be located. What's the condition of these shelters? Many of these bus shelters are rundown. The Long Beach Transit doesn't have the means to update a lot of these shelters. A lot of them get painted and spruced up. But really, it comes from project costs in one time costs to spruce up a bus shelter. Are we taking that into consideration here? Just a question for me. And and then lastly, should we have a discussion about like if we're going to renew this contract, are we receiving some larger public benefit rather than just placing blight on our our bus shelters? So those are some questions for city staff. Mr. WEST. I'm going to turn this over to our budget manager, Leah Erickson. And then we also have Ara Malloy in to help out. To the council member, we are receiving approximately $350,000 a year for this contract in the past, and that is the amount approximately that we're going to be receiving going forward. And that amount is deposited into the general fund and it is used as all general fund resources are used for the services that City Council has prioritized as part of the annual budget appropriation. So it is not specifically earmarked, which would be a bad financial policy to earmarks, dollars that could be going to the general priorities of the city council. So right now, if it were to be earmarked, it would be a it would be cause a resource allocate reallocation from other. Respectfully, I'm. Not asking for an opinion on I have specific questions, I'm not asking for an opinion. But over to our Malloy and for the other questions. Honorable Richardson In regards to bus shelter, these are existing bus shelters. They're not putting any new ones. And they're basically it's the advertisements on these bus shelters. If you and they are supposed to maintain those bus shelters, if there is any issue with any of those bus shelters, I would like you to bring it to my attention . I'll have them fix it. But that's part of the contract for them to maintain those bus shelters as much as possible. And that's that's my answer to your first question. So Mr. Malloy and I wanted to weigh in a little bit of Councilmember Richardson will allow me to. So in Santa monica, we don't have bus shelters, but we have them outside of the city of Santa monica. So in all the bus stops where some of the bus stops in Los Angeles, and so depending on who the contractor is, if there's a problem with cleanliness or the the condition of the bus shelter, we ask constituents to call CVS directly if they're the vendor, if they're the installer or another company. Or we ask them to call the transit agency. So I get calls at the big blue bus for bus stops outside. And so there are ways to have these bus shelters addressed if they're not in the right condition. And they should be. My recommendation to staff is ensure that Long Beach Transit is part of that, that tree of complaint process. Otherwise it shouldn't. I understand that it's an on city property, but it should not be just the city's responsibility to ensure that they're in good condition, whether the revenue comes here or not. So I would appreciate knowing from our public works director what his thoughts are and how these complaints can be processed. Because there are I don't know them specifically, but bus shelters aren't maintained unless someone points that out. I wish they were, but they're not always. My vice mayor. I think we should get to those. But my questions were not answered by city staff and I'm still so forgive me. I just know I interjected. I don't think you're finished answering your questions. Interjected on that bus stop. I want to. I want to restate and thank you very much. And I'm fine. But the question was where are they located? What is the public what is the perceived public benefit of renewing this contract? There's obviously like putting we're going through a whole discussion about billboards because there's a perception that these advertisements are blight. There's a public benefit to like, they're contributing money to our cities. So I think we should have a discussion about what's the benefit there, and then why are we negotiating the same value as we did five, ten years ago? Like, has the value of these ads increased over the last decade? Right now, we're negotiating for the same amount of money today that we negotiated last time. So I would like those questions answered. I'd like this question answered today, otherwise I'll probably make a. Motion or something. Mr. Malone. Honorable Richardson, I can't tell you where they are exactly at this point. I don't have a list of all those locations. I can get it to you as soon as possible, if that will satisfy you. As far as your second question, what is the public benefit? Obviously, we're receiving 300,000 or 350,000 cars, as Ericsson mentioned, that goes into the general fund. I guess that's the nexus as far as the public benefit is concerned. And this went to RFP. There's only nobody responded, but except the same company. So we did try to find a competitive bidding process, but unfortunately nobody else was interested except the same company who was incumbent. If I might ask. This relationship started in 1998. Do you have. Do you have knowledge of what the revenue was to the general fund, say, in the last five years? I think because the way this is written, it's either $140 per bus shelter or 20% of gross revenue, whichever is greater. I'd like to believe that we've been leaning on the 20% side rather than $140. So if this Ericsson or Mr. Malone can answer that question, I think that would help move this conversation a little bit further. Unfortunately, I don't have that data since I was not around in 1998, but we can get that information to you. So I think it would be very important before this council makes a decision, because it's it's a it's a very unique industry. There aren't there are not a lot of there are not even many there are barely a few companies that actually can respond to this type of RFP. I'm curious why only one responded and why. Similar to Mr. Councilmember Richardson, why we would negotiate the same rates. It may be that that $140 or 20% of gross revenue, whichever is higher, is the industry standard. If that is, I think we need to be told that confidently. Otherwise, we are creating a subset of a billboard policy that I don't think this council intended. And I appreciate the revenue, Ron. We all are council members and in a city that struggles with revenue and preserving revenues, I don't think any one of us is looking to erode a revenue source, but we do have an approach toward billboards and bus advertisements are no different. And I will. I will. Mention my I'll mention Santa monica one more time. There are no billboards in Santa monica except for one that's been grandfathered. And that's why they don't allow bus advertising. I mean, advertisements at the bus shelters because it's technically outdoor advertising. So how we have that two tiered policy without the council weighing in on it, I think is interesting at best. But we should have that conversation. Councilmember Richardson. So that said, what I'd like to do is I'd like to add a subject to motion to and I might want needs to return to weigh in on this but to come back. With this after you've like considered either, you know what I'm going to say? Recirculate the RFP with a specific intent to have a larger benefit. A greater benefit. And I'd like to see if there's a way to see if, like, we can improve the general condition of our bus shelters through this process if we're going to advertise, they need to be the best bus shelters in Southern California if we're going to advertise in our neighborhoods on it. So I would say, like, go back to the table. Go back to the table. Recirculated RFP. Or maybe I'll say maybe I'll put it as a question for our the motion if we wanted to go back and get a better deal. What will be our methods, our triggers to do that? Well, obviously this was a competitive process and nobody else is interested besides this company we can recirculate. I'm not confident you're going to get any better deals. What do you think the issue is? I think I would like to know if the council is interested in having bus shelters or not, because basically the nexus is they're providing bus shelters with the ad. So they're providing a service to the city, providing a shelter for the residents and users of the transit. And the benefit that we're getting is the advertising plus some cash counts. If I can interrupt, Councilmember and Mayor, you certainly could increase the monetary benefit by going digital, and we don't allow that at this time. I'm sorry, what did you say. To go digital? Right. So, Councilmember Richardson, just so I can clarify. There is a benefit to the shelter it provides. Certainly, it provides shelter from the inclement weather that we have here. But there is that benefit. But it does need to be maintained. Well, so that that's not. I mean, I think, you know, where I want to go here. I want to and I'm going to make you know what? Let me just make this motion I want to direct it to. Yes. I'm sorry. I want I want to I would make a motion to receive and file this and come back with a greater plan on how we can utilize the opportunity to provide bus shelters for greater benefit, including improved conditions of bus shelters. That's that's what I that's what I want to do. So there's a motion I have to councilmembers cued up. Is there a second for that motion? I got a second. Okay. Councilmember Mongo. Could could finance answer for me when the current agreement ends and if there'll be a loss of revenue if we don't, what are the implications of not approving tonight? How far of a lead time where we give in as a council to discuss this? The original agreement expired on December 31st, 2013. So. Okay. Let me let me take a side note. I'd like to find out if in open new business, I need to make an item. I'd like to know all of our expired agreements that are currently in effect, but not on the back burner for a quick second. That would be that would be city wide, please. This is not just directed to finance and or. Right. And I understand there's many complications and RFP than sole sources and all of those things. I work in this world. I understand it. But more specifically, are we currently operating under the prior agreement receiving revenue today? Allow me to correct myself for continues that conversation. The existing contract expired on December 31st, 2013. There were two extensions that city council approved. So we're at the end of the last extension with expires on December 31st of 2014. And under the agreement as written, were we given an option for an additional extension? We can check into that if if that would be amicable to continue either on a month to month basis or on a short duration, six months or whatever times it takes. It took it took us about six months to get get through this RFP. So yeah, it's not an easy task. There's a lot of steps that we have to go through. But whatever your wishes, if you wish us to go to another RFP, we will do that. If you have additional comments, we can make sure that it's incorporated into RFP. It's. It's up to the city council. How do you want us to do it? Well, I don't want to have a loss of revenue to the general fund. We are already experiencing record well, not record, but near record setting lows in our oil revenue. So I want to be cautious about the revenue coming into the city and protect what we have to ensure that no services need to be cut and that we can afford what we've already committed to. If if we are coming to the end of an extension period, I would. I'd like to at least keep options in place. How long is this extension for? Five years. An additional five years. Correct. What are the opt out options? It's basically a five year contract with options to add another two or more years. Two additional years and also there are termination clauses. So in the termination clauses, either party. Could terminate. For cause or no cause. I, I believe it. You know. It was not. It could be mutual. Okay. I need to think about this for a few minutes. Councilmember Austin. Thank you. And along the same line of questioning and I'm concerned about the potential lost revenue here, I'm actually in support of the staff's recommendation on this this motion, this particular item. But I do appreciate Council Member Richardson's questions on this. If we can get more out of it, I think we should. But understanding that we are in the second extension, I think is a bit concerning. He's talking about community benefit and where's the community benefit here? And I just want to remind the council that this particular contract did have a significant community benefit at one time and that it. Helped provide youth services at the Palin Athletic Center in North Long Beach, and it was dedicated toward that for many, many years. And at some point, I think we lost our way as a council, and particularly when we talk about a community benefit, it's now a general fund item and it's funded toward the general fund . And, you know, yes, it's it's it's it's supporting the entire city in some incremental way. But I would like to get back to that discussion and repurpose this these funds at some point during the budget conversation toward youth services and youth programs and to to to deal with the community benefit component that Councilmember Richardson spoke about. And like I said, I think we we could we could really see a true benefit from from these dollars if we were to put them into youth programs in our districts currently where we were funding our Be Safe summer programs with one time funds. I think this is a structural way to deal with that that issue. So I'm going to go back and just to say, Councilmember Richardson, I think you made some excellent points, but I think the timeliness of this is it would be prudent, prudent for us to support the staff recommendation. Thank you, Councilmember Austin. And I wanted to just share I, I support the staff recommendation as well, but I would like to know from staff and perhaps staff can let us know how quickly they can get this information back to us is what is the industry standard for negotiating the revenue share on bus shelters? I don't while I'm in the industry and in advertising on busses, I don't know that because I don't we don't do bus shelters, so I don't have the answer. And I know we have a couple of speakers lined up or we'll queue up and they can maybe share that. But I think those are valid points is why are we having in the same arrangement that we had in 1998, if that in fact is the industry standard, we need to know that. Councilmember Price. Thank you. I just wanted to say that I agree with council member Austin and I support staff's recommendation as well. I think he makes some excellent points things. Councilmember Richardson. So just quickly. So is there a this is a good question about the revenue where we're based, we're budgeting based on that is our way to continue to receive this revenue before we lock ourselves into another five year deal. Yes. That's what Mr. Malloy had had responded to earlier, that we can we can continue in this extension. No. This is a five year. How to you asking for? I'm sorry. So what I said was come back. Come back, like receive and file these and come back. But I think I'm going to change it because I don't want to like create some unintended consequences. I would say if there's a strategy to go to a month to month basis, why we like renegotiate with them like a month to month contract. And a greater question is like this, 340 $300,000 would receive this $300,000 receive annually. Is it like a monthly check they would receive? Have you received it? Received it for this year? Like, what is our real exposure? The contract ends, but like when is when is our budgetary exposure for this window? When? When will we have a deficit if we ended the contract works? If if indeed Councilmember the the contract was over in December 31st, that would begin. We no longer be in receiving a proportion of the $350,000. I was just chatting with Mr. Park and we could postpone this decision that the Council wanted and respond to the Vice Mayor's comments by going back to the company and asking their permission if they would go forward with a month to month. Right now, we don't know that. I suspect they probably would, but their contract expires December 31st and they're kind of in the driver's seat on whether they would go forward with a month to month or whether they want us to pull the trigger. So I would say that what I would say is. Like I don't want like every everything folks brought up makes a lot of sense, but I don't want to lock ourselves in. And when we're in the budget conversation, we're in the middle of a five year contract. Next time we talk about the budget. So as a matter of process, what I'd like to do is change my motion, like change my motion if the second year of the motion would agree or if somebody else wants to rethink seconded, I want to change my motion to say between now and the end of the contract, direct the city manager to go back, see what they if they would be amenable to a month to month until we renegotiate with them. I go through a process to renegotiate, since they're the only ones who responded for greater benefit than what we negotiated 15 years ago. So that would be my my motion. So it doesn't stop us. It doesn't give us any. It doesn't stop our our ability to still our general fund to benefit from this. If I might ask Mr. Parkyn to weigh in, we have gone out to RFP and so there are certain obligations. I think that combined with that. So if you can address. That, right, I think hearing Councilman Richardson's direction, what you would have to do then is reject this proposal and direct staff to see if they could maybe negotiate either a month to month or another short term extension, six months or whatever staff believes is the appropriate time to do a new RFP. And that's assuming you either they bid again or you get other proposals to see if you can make the change, the compensation that you're receiving. So, yes, I think you have to either accept or reject this or direct staff to come back in a short time period if they want to extend that contract. Thank you, Mr. Park and Councilmember Mongo. I think I have even greater concerns with we as a city wrote an RFP and I think we've talked about this as a council in public forum before. Related to maybe we should be a part of that process because what I don't want to do is responding to an RFP is an extensive process that's expensive for a business to participate in. And so if a business in good faith fulfills the requirements of the RFP as we put forward, we need to have some good faith. We hear a lot about how hard it is to do business in Long Beach. We don't want it to also be very difficult to do business with Long Beach. And so I appreciate that there are some ways to step out of this in the future. I think there's a lot of opportunity for our by Long Beach at Long Beach adopt Long Beach shop Long Beach to be incorporated into this in some way with any vacant space, if there is any, that would come to Economic Development Committee. But for the time being, even though I have passion for all of those options, I also don't want to provide that risk to the city in terms of the loss of revenue. So I'm going to support the staff recommendation at this time, and I think we should continue to look at this and be involved a little bit earlier in the RFP processes, because I want businesses who bid to know that we will follow through when they win. Council member, Austin. Point of order. My, my, my motion didn't get a second. Right. So we're on the original motion, right? Okay. You want to just withdraw it because you're in support of the I mean, I would withdraw it if the second do I need a permission to. I'm going to withdraw my motion my sec my substitute motion. Is that in agree is a second in agreement. That's a consensus of the body. Yes. Was there. Who was? Who's the maker of the original motion? I. Of course I was. Jeremy Corbyn. Thank you. And I do support the staff recommendation, but I. Mr. West, I want us to pay close attention to the issues that Councilmember Richardson raised, and that is, we don't know the value of this. And so in this is not a good preparation of our council members. We don't have what industry standards are. We have nothing to compare it with. And so I think that we'd be better served knowing that as opposed to learning staff went out to RFP. Here's our recommendation and there you go. It's very tough to make a decision like that. I work in the industry and I don't feel like I can tell you right now if $140 a shelter or 20% is standard. I don't know. We need to know those things. Okay. There's been a motion and a second public comment. So anyone from the public that was to comment on this item. Okay. The motion is to adopt staff recommendation with a request to city staff to come back with some information to to the council. All those in favor. Please cast your vote. Me? Yes. Motion carries equal tears. Item Pollinators report from public works with a recommendation. To work toward a contract to all American asphalt for improvements on Ocean Boulevard between Livingston Drive and Bayshore Avenue in an amount not to exceed $1.6 million.