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#3 Proposed Agreement with The Active Network for advertising
CITY MANAGER’S OFFICE MEMORANDUM February 1, 2010 TO: City Council FROM:Thomas E. Malone, Management Analyst SUBJECT: Authorization for the City Manager to Enter into an Agreement with The Active Network, Inc. for Advertising on City-Owned Property. Request Eric Levitt (City Manager) has requested Council consideration of contracting with Active Network. Suggested Motion If the City Council wishes to authorize the City Manager to enter into an agreement with The Active Network, Inc. for advertising on City-owned property then the following motion should be made. I move to authorize the City Manager to enter into the agreement between The City of Janesville and Active Network, Inc. in which Active Network, Inc. will advise the City on advertising opportunities on City-owned property to generate revenue. Background During the budget study sessions there was discussion regarding the City looking into additional sources to generate revenue. Staff projected that this advertising concept would generate $100,000 in advertising revenues from entering into an agreement with The Active Network, Inc. The purpose of the agreement will be to have The Active rd Network, Inc. advise and assist in entering into advertising agreements with 3 party rd entities. The 3 party entities would advertise on City-owned assets.. The City would have the final determination in deciding if the advertisements are appropriate. Attached is a copy of the agreement between the City and the Active Network, Inc. A description and time line of the services is included in Exhibit 1 with the agreement. Also included is a flyer on the services Active Network, Inc. provides. Ivan Gearhart, from the Active Network, Inc. will be available to answer any questions the Council has regarding the agreement. City Manager Recommendation As I evaluated the budget for 2010, my assessment of City Council goals and direction was to limit the property tax increase and minimize service reductions. Due to the fact that the property tax is the major revenue source for the General Fund, I determined that evaluating other revenue options was one possible alternative. This concept has a major positive impact in that it does not increase taxes or fees on residents and local businesses. However, the downside is that it enters an area that traditionally has not been embraced as a source of revenues. In weighing the upside and downside, I recommend moving forward with this contract for the following reasons: ? This company has a proven track record in working with other cities and public entities to increase advertising revenue. ? The upfront cost is low in comparison to the possible return. ? The City Council has veto authority over all advertisements and the City has the ability to establish the parameters. ? The revenues moving forward could be a growth area for the City which would provide some stabilization moving forward. ? I foresee challenging budgets moving forward and creativity will need to be used to get the City through these times. ? The $100,000 should be on the conservative side long-term. CC: Eric Levitt, City Manager Jacob J. Winzenz, Assistant City Manager/Director of Administrative Services PROFESSIONAL SERVICES AGREEMENT Agreement This Professional Services Agreement (“”) is made and entered into as of Effective Date _________________, 20___ (the “”) between the City of Janesville CityTHE ACTIVE (“”), a municipal corporation located in Rock County, Wisconsin and NETWORK, INC.Active (“”), a Delaware corporation with its principal place of business at 10182 Telesis Court, Suite 300, San Diego, CA 92130 (each of City and Active being a PartyParties “” and collectively “”). WHEREAS : A. Active maintains sports-related Web sites on the Internet and is engaged in a variety of businesses including, but not limited to, municipal marketing, online registration for participatory sporting events, Web-based team and league tools and management utilities; custom Website design services; e-commerce; database management; event promotion, production and sponsorship marketing; product sampling and other field marketing services; and other services relating to Active Business recreational and participatory sports (the “”); B. Citydesires to obtain professional consulting services to assist in the development and implementation of a marketing program between the City and private companies ; and C. Active provides such services and is willing to undertake such services for City pursuant to the terms and conditions as more specifically set forth herein. NOW THEREFORE , in consideration of the above premises and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged by Active and City, the Parties, intending to be legally bound hereby, agree as follows: Services. Services 1. Active shall perform the services and obligations (the “”) and City shall fulfill the obligations more specifically set forth in Exhibit 1 attached hereto. Additional Services may be added to the Agreement by a statement of work mutually agreed upon and signed by both Parties and the terms of this Agreement shall apply to such future Services. Compensation. 2. City agrees to pay Active the amounts for the Services as agreed upon by the Parties more specifically set forth in Exhibit 2 attached hereto. Active will invoice City for all such amounts, provided that City will pay all amounts described above as being payable on or before a specific date (or for which the payment due date can be determined) on or before such dates, whether or not any invoice with respect thereto has been received, and each such amount will be overdue upon the day following such due date. Otherwise, all invoices are due th upon receipt and overdue on the 30 day after date of receipt. To the extent any amount is not paid prior to becoming overdue, such amount will bear interest from the date of initially becoming due, at a rate equal to the lesser of One Percent (1.0%) 1.5% per month, compounded monthly, or the maximum rate permitted by law. Further, if any amount payable remains unpaid thirty (30) 15 days after becoming overdue, Active shall have the right upon ten (10) days’ prior written notice to City to (i) immediately terminate this Agreement and/or (ii) accelerate any unpaid portion of the Compensation so that it will be due and payable to Active as of the termination date. City is responsible for all taxes, duties, and other charges in the nature of taxes and duties (excluding taxes on the net income of Active) eligible in relation to the Services and the Compensation. Expenses. 3. City shall reimburse Active for reasonable travel costs, not to exceed two (2) round trips from Active’s Home office to Janesville and in no event shall the aggregate of Active’s travel expenses during the initial term of this Agreement exceed Eight Hundred Dollars ($800.00). Press Release/Publicity. 4. Upon written approval of the other Party, Active or City may issue a formal press release relating to the entry and general terms of the Agreement. Confidentiality. 5. The Parties recognize that confidentiality is of the essence of this Agreement. Except as otherwise expressly permitted in this Agreement, neither Party shall disclose to any person or entity (except such recipient Party’s own employees and agents with a need to know such information in order to permit execution and completion of the Agreement who are aware of and have agreed to maintain the confidentially of the information, and such recipient Party’s legal counsel and/or accountants/auditors) any information of the other Party Confidential Information obtained in connection herewith (the ""). Confidential Information does not include information which: a) is at the time of disclosure or subsequently becomes generally available in the industry and/or to the public through no act of the receiving Party, b) was rightfully in the receiving Party's possession prior to the date of the disclosure of such information to such Party, c) is supplied to the Party without restriction by a third party who was under no obligation to the disclosing Party or any other person or party to maintain such information in confidence, d) is independently developed by the receiving Party, e) the receiving Party is or shall become required by law or court order to disclose. Further, the Parties shall treat the terms (but not the existence) of this Agreement as Confidential information, provided that paragraphs b) and d) shall not apply to render such terms non-confidential. Indemnification by Active 6. . Active shall defend, indemnify, and hold harmless the City and each of the City’s elected and appointed officials, officers, directors, employees, agents, subcontractors, representatives, successors and assigns from and against any and all third party claims, losses, liability, costs and expenses (including reasonable attorneys' fees) incurred by the City or any of the other 2 above enumerated City persons arising out of or in connection with (i) the gross negligence, or intentional misconduct, of Active or any of Active’s directors, officers, employees, representatives, agents, or affiliated others; (ii) violation by Active of any applicable federal, state or local law, rule or regulation; (iii) intellectual property claims by third parties of materials provided by Active hereunder; or (iv) breach by Active of its representations, warranties or obligations hereunder; provided however, that Active’s obligation to indemnify the City and above others hereunder shall not apply to any loss, liability, damage or expense to the extent that is caused by or arises out of the negligence or willful misconduct of the City (any of its employees or agents) or by any breach by the City of any of its representations, warranties or obligations hereunder and further provided that City provides to Active written notice, within thirty (30) days after its receipts of any claim or complaint, of any claim or lawsuit arising from the term of this Agreement. Indemnification by City 7. . Except where precluded by applicable law, City shall defend, indemnify and hold harmless Active and its directors, officers, employees, agents, subcontractors, representatives, successors and assigns from and against any and all claims, losses, liability, costs and expenses (including reasonable attorneys' fees) incurred by Active arising out of or in connection with (i) the gross negligence or intentional misconduct of City; (ii) violation by City of any applicable federal, state or local law, rule or regulation; (iii) intellectual property claims by third parties of City IP (as defined below) provided by City herein; or (iv) breach by City of any of its representations, warranties, or obligations hereunder, which shall include defaulting on any payment obligation; provided however, that City’s obligation to indemnify Active hereunder shall not apply to any loss, liability, damage or expense to the extent that is caused by or arises out of the negligence or willful misconduct of Active (any of its employees or agents) or by any breach by Active of any of its representations, warranties or obligations hereunder and further provided that Active provides to City written notice, within fifteen (15) working days after its receipts of any claim of complaint, of any claim or lawsuit arising from the term of this Agreement. In no event shall the City’s liability hereunder, nor shall Active and/or any others in aggregate receive from the City an amount to Fifty Thousand and 00/100 Dollars ($50,000.00). EXCLUSION OF WARRANTIES AND LIMITATIONS OF LIABILITY. 8. NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT: TO THE EXTENT PERMITTED BY LAW, ACTIVE EXPRESSLY A) DISCLAIMS ANY AND ALL WARRANTIES AND CONDITIONS THAT ITS SERVICES WILL BE UNINTERRUPTED OR ERROR FREE. ACTIVE’S SERVICES ARE PROVIDED TO CITY ON AN “AS-IS” BASIS WITHOUT WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE; NEITHER PARTY SHALL BE LIABLE FOR ANY SPECIAL, INDIRECT, B) INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING BUT NOT 3 LIMITED TO ANY SUCH DAMAGES ARISING FROM BREACH OF CONTRACT OR WARRANTY OR FROM NEGLIGENCE OR STRICT LIABILITY), OR FOR INTERRUPTED COMMUNICATIONS, LOSS OF USE, LOST BUSINESS, LOST DATA, OR LOST PROFITS, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT; AND ACTIVE’S MAXIMUM AGGREGATE LIABILITY UNDER THIS C) AGREEMENT IN ANY CASE WHATSOEVER SHALL NOT EXCEED AN AMOUNT GREATER THAN THE AMOUNT ACTUALLY RECEIVED BY ACTIVE FROM CITY UNDER THIS AGREEMENT. Intellectual Property 9. . City hereby grants to Active a royalty-free, non-exclusive license to use to all intellectual property of City (including without limitation any City IP trademarks, trade names, trade dress and copyrights) (collectively, "") necessary for Active to use and provided by City for the sole purpose of carrying out Active’s obligations under this Agreement. No right, property, license, permission or interest of any kind in or to the use of City IP is or is intended to be given to, transferred to, or acquired by Active by the execution, performance or nonperformance of this Agreement or any part thereof other than the express non- exclusive licenses set forth in this Agreement. Any intellectual property developed by Active separate and apart from the City IP pursuant to this Agreement shall be the sole property of Active. Term and Termination.Term 10. The term of this Agreement (the “”) shall commence upon the Effective Date and continue until terminated in accordance with the remainder of this provision. The Agreement may be terminated as follows: a) by either Party upon the material breach of this Agreement by the other Party, if such breach remains uncured for thirty (30) days following written notice to the breaching Party; b) by either Party upon the bankruptcy, insolvency, or appointment of a receiver or receiver-manager in relation to the business and/or assets of, the other Party; or c) by either Party with thirty (30) days prior written notice. If this Agreement is terminated prior to its completion either (i) by Active under either of paragraphs or above, or (ii) by City other than under paragraph or above, City will indemnify Active for any non-cancelable commitments properly entered into by Active prior to termination, hereunder and shall reimburse Active for any unbilled incomplete work previously authorized by City. Active Promotion. 11. Upon written approval by City, Active may use the existence of this Agreement, and descriptions of the Services Active provides hereunder, to promote Active’s services to other entities during and after the Term of this Agreement. In relation thereto, City grants to Active a, non-exclusive, perpetual, royalty-free license to display and distribute in its marketing and case study 4 materials and efforts samples of any promotional materials generated in the course of this Agreement, and any logo, trademark or service mark provided by City in association with this Agreement (provided that Active may not modify any such marks in any way other than to resize them), for the limited purposes of demonstrating and promoting Active’s own services and the Active Business. Such license shall, without limitation, include the right to display and distribute such material and information on Active’s internet sites but will expressly exclude paid advertisements without further written approval from City. Miscellaneous. 12. Entire Agreement. a) This Agreement and the Exhibits attached hereto, as amended, set forth the entire understanding and Agreement of the Parties as to the subject matter hereof, and supersede any and all prior representations, warranties, negotiations, agreements, and arrangements, and may be changed only by a written agreement signed by both Parties. Headings are inserted for the convenience of the Parties only and shall not be interpreted to modify the contractual language within each section or Exhibit. Notice. b) All notices or other written communication required under this Agreement shall be in writing sent to the addresses provided in this provision (as changed from time to time upon noticed as provided in this provision) and shall be deemed properly given by sender and received by the addressee if on (i) the date of personal service or courier delivery, (ii) the fifth (5th) business day following first class, registered or certified, postage prepaid mailing, or (iii) one (1) business day after being sent by facsimile, provided that the sender retains confirmation of delivery. If to Active: The Active Network, Inc. 10182 Telesis Court San Diego, CA 92121 Attn: Stephen Kehle Fax: 858-430-3464 With a copy to: General Counsel If to City: Jean Ann Wulf City Clerk-Treasurer Municipal Building 18 North Jackson Street Janesville, WI 53547-5005 Fax: 608-755-3207 With a copy to: City Attorney No Joint Venture. c) Nothing contained in this Agreement or performed pursuant to this Agreement shall be construed as creating a partnership, agency or joint venture between City and Active. The employees of one 5 Party hereto shall not be deemed to be employees or agents of the other Party for any purpose whatsoever. Accordingly, each Party is responsible for payment of all employment taxes, benefits, insurance, and the like for all work performed by its employees in connection with the performance of this Agreement. Damages d) . In addition to any other damages that either party may be entitled to at law or in equity, should either party breach this Agreement, the non-breaching party shall be entitled to recover reasonable attorney's fees, costs, and expenses incurred in successfully enforcing the terms of this Agreement. Governing Law; Submission to Jurisdiction e) . This Agreement and any disputes arising under or related thereto (whether for breach of contract, tortious conduct or otherwise) shall be governed by the laws of the State of Wisconsin and the only forum shall be the circuit courts located in the County of Rock, State of Wisconsin; without reference to principles of conflicts of law and shall have exclusive jurisdiction and venue to hear and decide any and all legal actions, suits or proceedings arising out of this Agreement (whether for breach of contract, tortious conduct or otherwise), and the parties to this Agreement each hereby irrevocably accept and submit to the personal jurisdiction of such court with respect to any legal actions, suits, or proceedings arising out of this Agreement. No Assignment f) . This Agreement may not be assigned by either Party without first securing the written consent of the other Party, which consent shall not be unreasonably withheld, except that such consent shall not be necessary in the event of an assignment by way of merger or acquisition involving fifty-one percent (51%) or more of a Party’s assets or voting shares or where Active assigns its rights, but does not delegate its performance obligations, created by this Agreement. Further Assurances g) . Each of the Parties agrees to take such further action to execute and deliver such additional documents as may be reasonably required to them to effectuate the purpose and intent of this Agreement. Force Majeure. h) Each party will promptly notify the other upon becoming aware that a Force Majeure Event has occurred or is likely to occur and will use commercially reasonable efforts to minimize any resulting delay in or interference with the performance of its obligations hereunder. Subject to the foregoing, neither party will be liable for any delay resulting from a Force Majeure Event and relevant performance dates will be extended to the extent of any such delay. For purposes hereof, "Force Majeure Event" means, with respect to either party, any strike or other labor dispute, riot, war, act of terrorism, any natural disaster, fire, explosion, act of government or governmental agency or instrumentality, or other 6 contingency beyond the reasonable control of either party, which in any such case interferes with, or prevents, the fulfillment by such party of its obligations hereunder. Survival. i) Sections 6 though 12 of this Agreement (expressly excluding the license granted by City in section 9), as well as all obligations of City to pay outstanding amounts, shall survive the expiration or termination of this Agreement for any reason. Counterparts; Delivery j) . This Agreement shall be executed in separate counterparts, which may be delivered by facsimile or such other electronic means as are available to the Parties, and such counterparts taken together, shall constitute one and the same original document. Severability. k) If any provision of this Agreement is held by a court of competent jurisdiction to be invalid, unenforceable, or void, the remainder of this Agreement and such provisions shall remain in full force and effect. IN WITNESS WHEREOF , each Party, by its duly authorized representative, has executed this Agreement as of the Effective Date. THE ACTIVE NETWORK, INC.CITY , , by its by its authorized signatory authorized signatory _____________________________________ _____________________________________ _____________________________________ _____________________________________ Print Signatory Name Print Signatory Name _____________________________________ _____________________________________ Print Signatory Title/Office Print Signatory Title/Office _____________________________________ _____________________________________ Date Date 7 EXHIBIT 1 Description of Services SCOPE OF SERVICES PHASE ONE: CONSULTATION STEP I: Analyze the Revenue Potential ?? Active will meet with designated City Staff in order to develop and submit an audit inventory list and a prospective sponsor target list. This process will assist Active to better gauge the size of the City’s revenue opportunities. ?? Active will review all current contracts and assist the City in the development of a set of program policies to guide the work of the City in pursuit of sponsorships. ?? Active will conduct a creative "Blue Sky" session with City staff. Knowledge from this session will aid in analyzing and prioritizing the sponsorship categories. ?? Site Visitation/Inventory Assets: Active staff will inspect and evaluate City facilities in search of assets offering promising marketing opportunities. ?? Provide a Creative Session Report and a Status Report. STEP 2: Develop Strategic Marketing Plan ?? Based on the work completed in Phase I, a Strategic Marketing Plan will be developed defining potential categories and outlining the benefits and policy considerations for each opportunity. The plan will include an inventory of existing assets and projections for revenue generating opportunities for top categories. ?? Create a Strategic Marketing Plan ?? Develop and prioritize sponsorship categories ?? Define category specific policies and procedures ?? Develop prospective sponsorship target lists for each category of interest ?? Target Sponsor List Time Frame: 4-6 Months 8 PHASE TWO: AGENCY STEP I: Development of Marketing Packages ?? Active will help prioritize and pursue the top sponsorship categories. Active will develop a Corporate Sponsorship Package for each designated category that reflects an agreed- on price/value strategy, and includes the customized rights and benefits for each category. ?? Develop sales and marketing collaterals; including sales materials and presentations. ?? Next Active will guide the City in formulation of category specific Request for Proposals. Also included is the management of the RFP process, allowing the City to select opportunities that meet their marketing needs and confirm the ability of the City to deliver prospects requests. STEP 2: Solicitation of Sponsorships & Partnerships ?? Active will initiate a multilevel marketing sales campaign for priority prospects. ?? Active will conduct presentations at multiple executive levels within the corporate structure and escort the prospects on site visitations as needed. Active will provide them with all of the necessary information and education to get a clear understanding of the assets that the City is offering in exchange for the opportunity to promote their brand, product and service marketing plans. ?? Active will deliver the designated RFP to qualified prospects and guide them through the RFP process. Active will manage all phases of negotiation with one or more corporate partners. Prior to submission of their proposals, Active will repeatedly contact and encourage participating prospects to compete aggressively in bidding against their leading business rivals. ?? Active shall obtain and evaluate offers from each prospect indicating the willingness to enter into a sponsorship or partnership agreement with the City. STEP 3: Negotiation, selection, and final contract ?? Active will provide the City with an Evaluation Report comparing the benefits offered by each prospect. Active will organize negotiation meetings between Staff and prospects and monitor and advise throughout the selection process. ?? Active will meet with Staff to review their bids, analyze the content and make recommendations for prospect selections. 9 ?? Given preliminary Staff agreement to the selected prospects, Active will organize presentations of the proposal by the recommended prospects to City Staff. ?? Upon selection of a marketing sponsor their offer will be referred to the City Legal Department to complete final stages of a formal agreement. The agreement shall be presented to the City Staff for approval. STEP 4: Implementation of Program ?? Once final contracts have been signed Active will oversee the roll-out of each new sponsorship program. Active will develop performance evaluation protocols to oversee the successful implementation of the new program. Time Frame: 6-9 Months 10 EXHIBIT 2 Compensation COST OF SERVICES Activity Payment 1 Phase One Blue Sky Session ? $10,000.00 Review relevant contracts, policies ? Site visitations ? Audit Assets ? Create a Green Marketing Plan ? Prioritize categories ? Define Policy and Procedures ? Develop Sponsor Target List ? 2 Phase Two 10% Develop Green marketing Packages ? Commission to Active Develop custom RFP’s ? on all revenues it Develop sales and collateral materials ? raises for the City upon Present packages to prospects ? successfully Educate key prospects ? negotiating and closing Conduct site tours with key prospects ? any partnership Manage RFP/Bid process ? contracts Promote high bids ? Evaluate offers ? Negotiation meetings ? Advise Staff Officials ? Selection of Partners ? Final Contracts ? Implementation ? Develop Communication Structure ? Develop Review Process ? Ongoing Partnership Management ? 11 3 Clarifications ? Current sponsorship agreements are exempt from commissions unless a successful renegotiation results in increased revenue to the City. In that case the total of the new contract will be commissionable. During the course of the agreement, the City ? may not enter into a contract with any other marketing firm to pursue sponsorships or partnerships The City has the right to prohibit the marketing ? of any assets it deems off limits During phase 2 the City shall reimburse Active ? for actual and necessary travel expenses that Active incurs on behalf of the City, at net. Active shall obtain advance approval for such expenses from a designated City staff person, and will keep complete and accurate records of all costs and expenses incurred in rendering services. In payment options 1 and 2 the upfront costs ? are non refundable, however in the spirit of partnership The Active Network will waive the first commission fees owed for successful negotiation of municipal marketing agreements not to exceed an amount equal to the upfront cost set forth in this proposal. 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Or Duracell -- the official battery of the Colorado Springs Police Department. These are just some ideas being tossed around as Colorado Springs joins a growing list of cities seeking creative ways to raise revenue. The city council gave the go-ahead this week to award a $50,000 contract to The Active Network Inc., a San Diego- based marketing firm, to find corporate sponsors for certain city property. ''You know these are tough economic times, but certainly for municipal governments that rely so much on revenue from sales tax,'' said Paul Butcher, city director of parks, recreation and cultural services. Colorado Springs' fiscal year 2009 budget faces a $41 million deficit, Butcher said. Officials hope to offset some of that through corporate sponsors. ''Marketing firms indicate a city this size might generate $1.5 million in the first year,'' Butcher said of the city of 360,000. Ad revenue could top $5 million in subsequent years, he said. The Active Network, Inc. sealed its first city-corporate sponsorship deal with Huntington Beach, Calif. in 1999. Nissan now sponsors that city's lifeguard rescue vehicles. Another client, Glendale, Calif., worked out a deal with Viacom to sponsor city bus shelters. Active Network is also developing corporate deals for Pittsburgh; Arlington, Texas; and the counties of Santa Clara in California, Nassau in New York, and King in Washington. ''We're getting many more inquiries now because these cities are turning around and saying, 'We've got to be creative because of the economic situation,''' said Don Schulte, director of Active Marketing Partnerships, a division of The Active Network. ''A lot of these companies are very interested in helping these cities and counties but don't know how.'' But do municipal sponsorships help a company's bottom line? David Wilkinson, president and chief executive of The Wilkinson Group, a San Francisco-based marketing company, says the public sector tends to look at the private sector as a fund raiser and forgets it's about running a business. 1 ''You have to commercialize to get a return. You can't go, 'Give me a million dollars and I'll put a little plaque honoring you in front of city hall,'' he said. Still, Wilkinson predicts public-private marketing deals will grow in popularity. Local governments hold a lot of equity, offering good opportunities for the private sector, he said. Some activists, however, are wary of branding public property. ''Nobody wants to go to our city parks to get away from daily pressures and suddenly be inundated with advertisements,'' said Roger Singer, the Sierra Club's regional representative in Boulder. ''Open spaces are not the same as sports stadiums.'' ''School districts went that route and some of the contracts have actually lapsed because of the public outcry,'' said Jane Ard-Smith, chair of the Sierra Club chapter in Colorado Springs. Ard-Smith referred to parental outrage following a 1997 deal to stock Coca-Cola in some Colorado Springs public schools. That contract expired in 2007. Schulte points out that many cities are careful to avoid advertising that would draw criticism. ''It's not about signage or naming rights,'' he said. ''A lot of companies don't want to spend money in the community to have people get mad at them.'' Butcher is excited about the possibilities for Colorado Springs. ''What would be wrong with talking to Evian and giving them exclusive rights to distribute their product in Red Rock?'' he said, referring to an open space park known for its rock formations. Other ideas: Stocking park kiosks with brochures from companies like REI, or negotiating with Purina Pet Food, for example, to sponsor the city's four dog parks, Butcher said. Colorado Springs wants low-key marketing solutions, like installing a corporate-sponsored webcam at a new skate park so skaters can check out the weather. In exchange, the city would sell ad space on the Web page. Active Network worked out a similar deal for a Costa Mesa, Calif., skate park with Volcom, a skating apparel company. Volcom pays for park maintenance and design; the company erected a shade shelter and held an art contest among its customers to decorate it. Ads could start popping up in Colorado Springs later this year. It plans to fund the $50,000 contract with money from city golf courses, a cemetery and city parking. 2 The City of Arlington, TX, Selects The Active Network to Develop Additional Revenue Stream Opportunities Corporations and Communities Help Each Other Through Active’s Marketing Partnership Program SAN DIEGO, CA - June 9, 2008 - In searching for additional revenue stream opportunities for their cities and counties, local governments are exploring new methods to utilize existing assets within their (Active), a company that communities. The City of Arlington, TX, has selected The Active Network, Inc. delivers software technology and marketing solutions for community service organizations, to evaluate its assets and design a municipal marketing partnership program. Active’s Marketing Revenue Services program develops innovative, revenue-generating partnerships between communities and companies. Local governments benefit from the additional income by utilizing the funds to strengthen their community’s marketability, improve existing services, and provide additional assets for the citizens to enjoy. The Marketing Partnership program also rewards corporate sponsors for participating by giving them access to new markets segments to promote their brands in a positive manner. Active will perform a thorough analysis of The City of Arlington’s community resources to decide what assets, such as parks, signage and administration buildings, they want to market; which categories of assets to target first; and which corporate sponsorships are a fit for their community. This analysis is conducted during an extensive 90-day audit. “Active has a successful track record of developing mutually beneficial partnerships with companies and communities that have created additional revenue sources for both parties,” said Trudy Lewis, revenue enhancement specialist, City of Arlington. “Having the opportunity to review and utilize the findings presented by Active will enable the city to continue its proactive approach and pursue the best opportunities to provide new revenue sources to the community.” Active’s results will be presented in the next three months to the Arlington city council in a strategic marketing plan that outlines goals, objectives, and sponsorship options. Past sponsorship solutions provided by Active for other cities have included beverage and snack concessions in city parks, official vehicles, banking kiosks, and the naming rights to city properties. Once presented with the strategic marketing plan, Arlington will have the opportunity to choose what options best fit their needs and proceed with the negotiation process, under the guidance of Active, with various potential corporate sponsors. “As the slumping economy continues to affect cities and counties throughout the U.S., local governments are looking for ways to raise their revenue without raising taxes for their citizens,” said Don Schulte, director of business development, The Active Network, Inc. “These same communities that are in search of additional revenue streams are filled with assets that they can utilize to attract corporate partners to join in a partnership program that will be beneficial for both parties.” To learn more about Active’s marketing services, partnerships and promotional solutions for state and local governments, visit www.ActiveGovernment.com. About The Active Network, Inc. The Active Network delivers integrated technology solutions, marketing services and online media properties that enable and encourage participation in activities and events. For more information, please visit www.ActiveNetwork.com. Media Contact Jake Gonzales, The Active Network, Inc. jake.gonzales@activenetwork.com or 858-652-6133 May. 12, 2008 Copyright © Las Vegas Review-Journal Las Vegas looks to capitalize on cachet City hires company to build marketing plan By ALAN CHOATE REVIEW-JOURNAL Las Vegans are used to extra doses of advertising. This is a place, after all, that has lingerie models on double-decker buses and an Attack of the 50-Foot Woman-sized picture of Toni Braxton (that dress!) towering over the Strip. Now the city of Las Vegas is considering bringing messages from corporate sponsors to city properties, parks and vehicles, though probably not on the same scale, and, it is hoped, with a bit more modesty. The idea is to capitalize on Las Vegas' cachet -- the phrase "raising revenue without raising taxes" was on everyone's lips -- and bring in millions of dollars to city coffers at a time when revenues are tightening. "The city of Las Vegas is a destination point, with international appeal, so you've got a lot more activity," said Don Schulte, director of business development for The Active Network, which the city hired to build a marketing plan. "Which is wonderful, because the assets are more valuable." Schulte's company has jump-started similar programs in many cities, and the marketing and advertising take many different forms. A pet food maker might build or maintain a dog park in return for exclusive rights to market products there, or simply have its name associated with a community amenity. In Costa Mesa, Calif., a skateboard maker designed a skate park for the city and has its logo displayed on a sunshade there. In Huntington Beach, Calif., Chevrolet provided custom trucks for lifeguards and in return is featured as a "city partner" at events and gets special access for shooting commercials. Las Vegas could also have an "official" or "preferred" airline or rental car company. "Large-brand marketers are interested in working with government entities," Schulte said. "The city has to cause business for the entity. They can't just take a donation." No specific advertisers or joint ventures have been proposed. Schulte's company is still working on the guidelines for the program, which he expects to present to the Las Vegas City Council in three or four months. But revenue estimates were available when he spoke to the council Wednesday based on the company's experience elsewhere. He said revenues and cost savings from the program would generate about $2 million in its first year and as much as $6 million in the third year. Naming rights could bring millions to Nassau. Source: Newsday (Melville, NY) Publication Date: 18-SEP-07 Byline: William Murphy Sep. 18--Let's play a round of golf at the Jiffy Lube course at Eisenhower Park. And let's share a glass of Nestea Iced Tea, the official iced tea of Nassau County. The corporate names may change, but those are the general concepts being kicked around by Nassau County officials as they dream up ways to raise money by capitalizing on the county's parks, buildings and other public areas such as golf courses and roads. The budget proposed yesterday by Nassau County Executive Thomas Suozzi assumes $4.5 million in revenue from new "naming rights" for properties, "pouring rights" for exclusive beverage contracts and other benefits to flow from corporate use of public spaces. The next step in the program is expected to come next week when the county puts out a request for proposals for ads that would go on bus shelters, public trash cans and kiosks. Eileen Krieb, one of Suozzi's executive coordinators, said the county plans to ask banks and financial companies that do business with the county to come up with ideas for sponsoring events or locales, such as a county golf course or a golf tournament. Suffolk County is working on a similar proposal, and plans to issue a request for proposals soon, a spokesman said. Nassau hired a consultant, Active Networks, almost two years ago to develop the concept. "We raise revenue without raising taxes," said Don Schulte, the company's director of active marketing partnerships. To see more of Newsday, or to subscribe to the newspaper, go to http://www.newsday.com Copyright (c) 2007, Newsday, Melville, N.Y. Distributed by McClatchy-Tribune Information Services. For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. FINANCIAL MANAGEMENT Taking a refreshing lookat funding cash guarantee in exchange for a 10-year Like all U.S. cities, Long Beach, Calif., is exclusive agreement to install 226 vending facing a tight economy that forces the city machines on city property. The company to stretch available funds. While traditional would pay the city $300,000 per year for 10 revenue sources still provide for the city's years, and, if it installed more than 226 basic services, they do not generate enough r machines, it would pay $1,000 per year fo cash for supplemental programs. As a each additional machine. result, Long Beach is embracing non- The beverage company would hire an traditional revenue sources to help it illustrator to design two custom-front provide services beyond the basics. graphics for the vending machines That strategy came into play last year, highlighting Long Beach's attractions. One when Long Beach sought funds to expand design would appear on machines at inland its environmental programs. Historically, locations, and, another design would appear the programs had been accessible mainly to on machines at beaches, with fresh graphics residents living near the city's nature center to be installed every five years. (the hub of Long Beach's environmental In September 2001, the city council education), and the city wanted to change approved the proposed partnership, with the that. For example, it wanted to develop a following terms and conditions: Nature Mobile program to deliver Revenue from the agreement would environmental programs to children whose fund the addition of an environmental affairs schools are not near parks. officer to city staff. The city's general fund would not cover No signage would be permitted. such an expansion. (Revenue was down A mix of beverages would be sold sharply, in part because of a utility tax at competitive prices. By Henry Taboada reduction implemented during recent The soft drink company would par- energy shortages.) City leaders explored The author isthe city manager for icipate in city events providing beverage funding alternatives, settling on a marketing Long Beach, Calif. sales and event marketing. partnership with a soft drink company. The company would commit to a The city was aware of similar marketing minimum of three major marketing pro- partnerships in other California cities -such grams annually. as Huntington Beach, San Diego and Sacra- The company would provide free mento -that were successful in producing soft drinks; tickets to major league sporting significant revenue. Local officials events and free sports gear to support city contracted with Huntington Beach, Calif.- marketing events. based Public Enterprise Group to draft a The soft drink company currently is installl- request for proposals (RFP), and, ultimately, ing the vending machines, and it made its to negotiate the marketing partnership. The deal produced a $3 million minimum cash guarantee. In the RFP, the city specified that it wanted first payment to the city in February upon a a comprehensive partnership rather than execution of the contract. The city plans to vending deal. In a vending deal, a company use the money for environmental education typically pays the city a percentage of grossand outreach efforts, environmental volun- sales that result from the partnership,whereas teer programs, and hiring a staff person to a comprehensive partnership includes com-coordinate those efforts. mitments from both parties to engage injointIf local officials can avoid over-commer- marketing efforts. cialization, city assets can provide attractive In response to the RFP, Atlanta-based opportunities for marketers to access the Coca-Cola proposed a $3 million minimumpublic in a mutually beneficial manner. 6 ACC July 2002 MERICAN ITY & OUNTY For one city, Coke is it, officially By Martin Kasindorf line, maybe we’ll talk,” Schulte theorizes. “We USA TODAY can put lifeguards in Klein bathing suits and sweatsuits. We can put beach parking HUNTINGTON BEACH, Calif. – This famed attendants in Nike uniforms.” surfing mecca calls itself Surf City USA. But a Garden Grove, Calif., another Orange County sweeping financial deal the city has just cut city, also has signed up with Schulte. “If you’re with Coca-Cola soon may have beachgoers strapped for money, and you have no practical calling the place Slurp City. way of raising your revenues, you have to be The City Council has named Coke the creative,” Garden Grove City Manager George “official city beverage,” which gives the bottler Tindall says. the exclusive rights for 10 years to plant its Following Huntington Beach’s lead, the logo and vending machines on all city property: neighboring city of Long Beach is looking for beaches, parks, City Hall, even police and fire corporations to finance much-needed youth stations.recreation programs in exchange for gaining Pepsi-cola, Coke’s rival, still can sell its access to city marinas and golf courses. merchandise in supermarkets, restaurants and “It’s a great deal,” says Phil Hester, director convenience stores – anywhere but public of the Long Beach parks department. “You just property. have to make sure you have control so the city Coming next, city officials hope, will be doesn’t become a billboard.” similar exclusive sponsorship deals with a Bob Phillips, spokesman for the regional credit card company, an airline, a carmaker, a Coca-Cola bottler, says the bottler wants to sell film company, perhaps even an Internet service more soft drinks, but not in an environmentally provider.fees. damaging way. “We are not about plastering Strapped civic finances are sparking the sell- Proposition 13, enacted by California voters in signs all over the city,” he says. off. The Coca-Cola Bottling Co. of Southern 1978, requires approval from two-thirds of a Spreading a company emblem city-wide is an California, whose bid beat out Pepsi, will pay locality’s voters to pass a property tax increase. outgrowth of the trend for selling “naming $300,000 a year and kick in another $300,000 It is usually an insurmountable obstacle. rights” to sports stadiums. Anaheim makes to fix up one of the city’s 56 fading parks each Huntington Beach is also getting inquiries money by letting Southern California Edison year for the next decade. The Coke money will from cities outside of California, as far afield as call the city-owned baseball stadium, where the allow Huntington Beach to paint city buildings Cleveland. major league Angels play, Edison International for the first time in two years, city admini- In December, Sacramento took preliminary Field. Arrowhead water pays for naming strator Ray Silver says. steps toward signing a similar contract with Anaheim’s hockey arena Arrowhead Pond. The first new Coca-Cola signs will appear on Pepsi-Cola. “This is an agreement that will On the basis of radio talk shows and lifeguard chairs and beach restrooms near the send a tidal wave of Pepsi over Coke’s newspaper polls, Garofalo estimates that only city’s famed pier in three months. Mayor Pro Huntington Beach deal,” says Jeff Brown, about 25% of local voters object to Huntington Tem Dave Garofalo vows to keep commer-spokesman for Pepsi-Cola at its headquarters in Beach’s innovation. cialization in good taste. There won’t be “signs Purchase, N.Y. Maybe residents are inured to the steady on the back of police cars saying ‘Drive Safely, Don Schulte, the Huntington Beach sports march of commercialization. Or maybe they Have a Coke,’” he says. marketing executive who brokered the Coke figure that a sponsor’s money can’t really turn Other California cities, their budgets equally deal, says there’s no end to the potential for a city’s population into a captive audience. constrained by Proposition 13 are jumping on other products to expand sales through “Anybody who surfs in Huntington Beach,” the sponsorship idea as a way to make up “strategic alliances” with cities. Pepsi’s Brown says, “knows there’s plenty of budget shortfalls without raising taxes or user “If Calvin Klein comes out with a bathing suit places to get a cold Pepsi.”