HomeMy WebLinkAboutPR 18453: HOUCK TRANSIT ADVERTISING interoffice
MEMORANDUM
AOF
To: Mayor, City Council, and City Manager
From: Valecia R. Tizeno, City Attorney •
Date: August 15, 2014
Subject: P. R. No. 18453; Council Meeting August 19, 2014
I am writing with regard to Proposed Resolution No . 18453 .
This is a proposal to enter into a five (5) year contract with
Houck Transit Advertising of St . Paul, Minnesota, to pursue
advertising revenue for Port Arthur Transit. The contract does not
require an expenditure of City funds because the vendor will be
paid a percentage of the income produced through the sale of
advertisements .
I would recommend that the City clarify the percentages to be
paid to the vendor, along with any additional commissions .
Additionally, a clause needs to be added which allows the City
Manager the authority to pre-approve all advertisements to insure
the suitability for display on City property. In the alternative,
a pre-approved list of the types of advertisements may be approved
by the City Manager.
The proposed resolution does not indicate the method of source
selection used to determine the chosen vendor. We have had similar
contracts whereby the vendor receives payment based upon the amount
of sales incurred. However, these items underwent a competitive
process pursuant to Chapter 252 of the Local Government Code and
Chapter 3 of the City' s Procurement Policy.
Therefore, it is necessary to make certain that these rules
have been followed. Please provide clarification of the selection
provided and the percentage to be paid to the vendor (including
commissions) , in order to obtain approval on the ability of the
City to award the proposed five (5) year contract .
VRT: gt
s.pr18453 memo
CITY OF PORT ARTHUR
TRANSIT DEPT.
TO: JOHN A. COMEAUX, P.E, INTERIM CITY MANAGER
FROM: COLLEEN W. RUSSELL, TRANSIT DIRECTOR
SUBJECT: PROGRAM INCOME(ADVERTISING REVENUE) FOR PORT ARTHUR TRANSIT
DATE: 07/25/2014
RECOMMENDATION:
PAT recommends approval of PR 18453 so that Transit may obtain a means
to get program income
BACKGROUND:
Port Arthur Transit(PAT) requires to defray some expenses that would otherwise be
accounted to the grants or the City's matching funds. In 2011 Transit requested
permission from the Council to pursue this means of additional revenue with Resolution
11-498. When the Fixed Route buses were positioned out of service this mission was
placed on hold until alternative vehicles were found to be leased or purchased.
Thereafter, transit can consider this goal based on panels or slots to hold such displays.
BUDGETARY/FISCAL EFFECT
Increased revenue
STAFFING/EMPLOYEE EFFECT:
None
SUMMARY:
The Houck Transit Advertising, of Saint Paul, Minnesota with the resources
and experience is willing to provide the vendors, negotiate contracts and
pricing on PAT's behalf and share the revenue 50/50
Colleen W. Russell, ransit ector
P.R. No. 18453
08/02/2014CWR
RESOLUTION NO
A RESOLUTION AUTHOURIZING THE CITY
MANAGER TO ENTER INTO A CONTRACT
WITH HOUCK TRANSIT ADVERTISING TO
PURSUE PROGRAM INCOME ON BEHALF OF
TRANSIT SUCH THAT THE REVENUES WILL
BE SHARED 50/50 AND THE MARKETING ,
ACCOUNTING AND CLIENT SERVICES WILL
BE HANDLED BY HOUCK TRANSIT
ADVERTISING OF SAINT PAUL, MINNESOTA
WHEREAS, The City of Port Arthur by Resolution 11-498, requested of the
City Council in 2011 to allow transit to pursue program income in order to create more
revenue; and,
WHEREAS, after discussions with many solicitors to transit, and noting a
lack of staff and other resources to promote advertising a promoter on PAT's (Port Arthur
Transit) behalf was considered the best route; and
WHEREAS, the City was contacted by HOUCK owner Tom Houck, who
proposed to find advertisers, set up the advertisements time and cost and represent Transit
with staff and said resources; and
WHEREAS, Resolution 11-498 authorized the pursue, the City Manager is
therefore being asked to enter into a contract with Houck Transit Advertising for program
income and said revenues will be shared for said services;
WHEREAS, the City Council is being asked to approve a contract with HOUCK
Transit Advertising to provide said services as specified by agreement attached hereto as
EXHIBIT "A" for revenue sharing (50/50), to provide resources (time and staff) to get
advertisers and yield some program income for PAT.
NOW THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF PORT ARTHUR:
THAT the facts and opinions are true and correct.
THAT the City Council hereby approves the contract between the City of Port
Arthur and Houck Transit Advertising for program income and the resources will be
provided by HOUCK at no cost, however revenue will be shared.
THAT a copy of the caption of this Resolution be spread upon the Minutes of the
City Council.
READ, ADOPTED AND APPROVED this day of August, A.D., 2014, at a Regular
Meeting of the City Council of the City of Port Arthur, Texas, by the following vote:
AYES:
MAYOR
COUNCIL
MEMBERS:
NOES:
Mayor
ATTEST:
City Secretary
APPROVED AS TO FORM:
(SEE MEMO)
City Attorney
APPROVED FOR ADMINISTRATION:
Interim City Manager
Director of Finance (Re nue Account-
APPi■_
Director of Tran t
EXHIBIT "A"
TRANSIT ADVERTISING CONTRACT
This CONTRACT is made this day of , 20_, between the City of Port
Arthur, (hereinafter called"City"), and Houck Transit Advertising, Inc. (hereinafter called
"Contractor").
The City and Contractor in consideration of the mutual covenants contained herein, and for
valuable consideration exchanged between the parties hereto, hereby agree as follows:
1. DEFINITIONS
Advertising -the removable panel and the words, pictures and symbols visible to the public
which are put on the panel.
Billing - The total of all payments that the Contractor requests from clients in a calendar
month.
Bus -A standard transit coach for transporting passengers that is either in use or standing by
as a spare on a daily basis.
Client- The person or company paying the Contractor to install advertising.
Eliminate buses - Selling a bus or assigning a bus to a contingency status in long-term storage.
2. CONTACT DURATION
The duration of this CONTRACT shall be for 5 years beginning on , 20_,
unless otherwise terminated under the provisions of this CONTRACT and continue
until , 20 .
3. OBLIGATIONS OF CONTRACTOR
A. The City hereby grants to the Contractor the exclusive right and privilege to solicit, sell,
and display advertising on the interior and exterior of buses operated by the City. The Contractor ,
shall operate to maximize the revenue generated from such advertising. The Contracto _•.
provide this service in accordance with this contract.
B. Advertising displayed under the terms of this e - .ct shall be of a reputable character,
shall conform to recognized bu •i-_ t. • :. . and shall not conflict with the laws or regulations
of the United States, State of, ou• a a . political subdivision thereof having jurisdiction over
the City. The City shall have .- •• - to require the removal any advertising that brings
disrepute upon the City and the Contractor shall remove such advertising immediately or within
a reasonable time frame.
C. All advertising shall be provided, installed, changed, repaired and removed at the sole
expense of the Contractor, except when it is removed by the City for purpose of repairing or
cleaning the bus and frames.
D. In consideration of the rights and privileges granted under this contract,the Contractor
shall pay to the City each month an amount equal to 50% of the gross monthly amount of
advertising billing that the Contractor sells, less agency commission.
E. In all cases,the percentage payment will be based upon the monthly billing by the
Contractor and not upon monthly receipts. Contractor bears responsibility for all uncollectible
billing, except in the case of legally filed bankruptcies.
The Contractor shall furnish to the City each month a copy of the client billing and at the same
time remit to the City the percentage payment for that month.
This contract may be renewed for two additional 5-year terms by mutual agreement.
F. Contractor shall be knowledgeable of and shall comply with all applicable local, state and
federal laws and regulations. Contractor shall be solely responsible for the payroll, insurance
coverage, benefits, personnel administration, and supervision of all personnel hired by the
Contractor to provide the services required by this contract.
G. Throughout the duration of this contract,the Contractor shall obtain and maintain, at the
Contractor's sole cost and expense, the following insurance coverage.:
1. $2,000,000 per occurrence Personal Injury insurance coverage
2. $4,000,000 per year
3. $300,000 automobile liability
The Contractor shall provide the City with certificates of insurance upon request evidencing the
insurance coverage required and shall not perform any services under this contract until such
insurance is secured.
H. In the event of occurrences that are beyond the control of the Contractor or the City, such
as a labor strike, act of war, act of terrorism, or natural disaster,the Contractor shall be able to
pro-rate, re-negotiate or cancel this contract with 30 day notice.
4. OBLIGATIONS OF THE CITY
A. The City agrees to provide, install, and maintain all advertising frames on all buses now
owned or hereafter acquired. The City shall insure that the frames are in proper repair at all
times. All such frames shall be and remain the sole property of the City.
B. The City shall assume the expense of removing, storing and replacing all advertising for
the purpose of repairing or cleaning the buses and frames. The City shall use reasonable care to
protect the advertising and shall exercise due diligence in preventing others from disturbing the
same.
C. The City shall, at no charge, so far as practical and convenient to the City, make available
to Contractor storage and work area for use in connection with its operation hereunder. The
Contractor shall keep the work area clean and neat.
5. RIGHTS OF THE CITY AND CONTRACTOR
A. This contract applies to 10 buses. The City reserves the right to add or eliminate buses from
its fleet without permission from the Contractor. In the event of such addition or elimination of
buses from the fleet,the City shall notify Contractor 30 days in advance in order for the
Contractor to accommodate any client notifications and/or billing modifications, and the
guaranteed and percentage payments by the Contractor shall be appropriately adjusted.
B. The City hereby grants the right to duly authorized and properly identified representatives
of Contractor to enter upon City property, during normal business hours, for the purpose of
operating under this contract.
C. Contractor agrees to permit any accredited representative of the City at any time during
normal and usual business hours, and from time to time,to inspect and examine the books and
records of Contractor.
D. Trades of advertising for merchandise or other concessions may not be made during the
term of this contract without the consent of both parties.
E. Contractor may set rates to be charged for advertising, and terms and conditions, and
manner of payment by clients. Current rate schedules to be charged advertisers shall be available
to City at any time upon request.
F. Contractor agrees that the City may use at no charge any empty advertising frames which
are available from time to time for the purpose of promoting the City's transit business and in
such event, the City shall furnish Contractor such advertising signs at City's expense.
G. While Contractor proposes to exercise every reasonable business effort to install
advertising sold at the maximum rate in every frame, it is recognized by the parties hereto that
Contractor may not at all times during the period of this contract be able to reach the maximum
and Contractor shall have the right to install public, educational, and charitable advertising as
Contractor shall deem proper at a reduced rate. Contractor may also use any vacant sign space to
advertise for clients at no charge.
H. In addition to other rights of the parties contained herein, either party has the right to
terminate this contract at any time on 30 days written notice in the event that the other party has
failed to comply fully with the terms and conditions contained herein.
I. This contract may be extended for subsequent like periods upon agreement of both parties.
6. AMENDMENTS
This contract may be amended or otherwise modified only by written document executed by both
parties and failure on the part of either party to enforce any provision of this contract shall not be
construed as a waiver of the right to compel enforcement of such provision, nor act to relieve
either party of its obligations under this contract.
There are no understandings, contracts, or conditions with respect to this contract except those
contained in this contract and in the documents incorporated by reference.
This contract may not be assigned, transferred, conveyed, or encumbered by either party without
the express written consent of the other party.
In witness whereof, duly authorized representatives of each party execute this contract.
7. Exceptions
In the event of a natural disaster, labor strike, civil unrest, acts of terror, acts of God, or
economic recession, or any other event that the Contractor or the City has no control over, that
would negatively affect the performance of Houck's duties under the contract, certain terms or
conditions of the contract affected by any of the listed events may be renegotiated or temporarily
changed to provide relief to either party.
City of Port Arthur:
Name (Printed) Title
Name (Signed) Date
Contractor: Houck Transit Advertising
Name (Printed) Title
Name (Signed) Date
P.R.#18453
Exhibit"A"
(City of Port Arthur)
(Law Department)
(Required Form)
(07/08/88)
(10/05/89)
(03/15/90)
(p.2 Revised 09/18/90)
CERTIFICATE OF STANDARD FORM CONTRACT FOR LAW
DEPARTMENT REVIEW AND CITY COUNCIL AGENDA
I certify that the contract(hereinafter called "said contract") affixed to the attached proposed City Council
Resolution No. 18453 is an exact duplicate of an applicable standard form contract(the title of which is
shown below) previously approved by the Law Department and adopted as a standard form by City Council
Resolution, except for the blanks that have been filled in with all necessary information and except for the changes
described below.
The title of the applicable standard form contract is:
[ ] Federally Funded Construction Contract,Revised 01/05/88,07/89,08/89
[ ] Non-Federally Funded Construction Contract,Revised 01/05/88,07/89,08/89
[ ] Federal-Professional Services-Engineering Contract,Revised 01/05/88,05/89,07/89,04/91
[ ] Non-Federal - Professional Services - Engineering Contract, Revised 01/05/88, 05/89(§10),
07/89(§8)
[ ] CDBG-Professional Services -Engineering Contract,Revised 01/05/88,05/89,§ 07/89§
[ ] Federal - Professional Services - Non-Engineering (Consultant) contract, Revised 01/05/88,
05/89(§10),07/89(§8)
[X ] Non-Federal - Professional Services - Non-Engineering (Consultant) Contract Revised 01/05/88,
05/89(§10),07/89(§8)
[ ] CDBG - Professional Services - Non-Engineering (Consultant) Contract, Revised 01/05/88,
05/89(§10),07/89(§8)
[] Other Standard Form Contract,described as follows:
The changes are as follows: (Put an"X" in the appropriate [ ]).
[] None.
[ ] The following described provisions at the indicated page, section, etc. of the standard form have been
deleted from said contract:
DELETIONS
Section or Section or
Page Number Paragraph No. Subparagraph No.
Where Deleted and Caption and Caption
Provision is Which Contains Which Contains Description of
Found On Provision Deleted Provision Deleted Provision
Standard Form From Form From Form Deleted
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P.R.#17624
Exhibit"B"
[ ] The following described provisions at the indicated page, section, etc. of the
standard form have been altered,modified,replaced or otherwise changed:
ALTERATIONS,MODIFICATIONS,REPLACEMENTS,ETC.
Sub §or Page, §&caption;
Page No. §or§No. Sub §No. sub §&caption,
Where &Caption of &Caption etc. of said contract
Provision Standard of Standard Description which contains
Found On Form which form which of Provision altered,etc.provision;&
Standard Contains Contains in Standard Description of Alteration
Form Provision Provision Form etc.
[ ] The following provisions have been added to Said Contract:
ADDITIONS
Page, Section and Caption Subsection and
Caption, etc. of said Contract Which
Contains the Added Provision and
Description Thereof
I further certify that said attached proposed City Council Resolution contains the following provision: "That said
contract is an exact duplicate of a City Standard Form Contract except for the changes described in the Certificate of
Standard Form Contract, a copy of which is attached hereto as Exhibit"B" and is hereby incorporated by reference,
and said changes are hereby approved."
I understand that this certificate will be relied on by the Law Department in reviewing and
approving (or rejecting) as to form and by the City Council in reviewing and adopting (or
rejecting)said Resolution and Contract.
Signed this_day of August,2014.
Interim City Manager
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