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Home My WebLink About05/20/2008, C8 - TRANSFER OF COMMUNITY PROMOTIONS PROGRAM FUNDING I Council '"°"`°"° Vgo o� j acenaa nepont "®Nmb� C I T Y OF SAN LUIS OBISPO FROM: Shelly Stanwyck,Assistant City Administrative Officer Brigitte Elke,Principal Administrative Analyst SUBJECT: TRANSFER OF COMMUNITY PROMOTIONS PROGRAM FUNDING CAO RECOMMENDATION Approve an advancement of $22,400 from the 2008-09 Community Promotions budget to fiscal year 2007-08 to cover tourism promotion fulfillment expenditure. DISCUSSION Background The City's proposed annual Community Promotion budget for fiscal year 2008-09 is $442,700. This funding includes the two-year advertising contract with Verdin Marketing Ink in the amount of $197,000 for 2008-09. Part of this contract stipulates that the advertising agency be responsible for advertising "fulfillment" services to respond to requests for visitor information as a result of advertising efforts to attract potential visitors (Attachment 1 —Scope of Work Exhibit A). Current Situation As the fulfillment tool, the agency chose to utilize the Chamber of Commerce Visitors Guide which is currently sent with every request for visitors' information. In order to have the fulfillment tool available throughout the year, the agency asks the Chamber to include the estimated number of guides in its yearly print order commissioned in May with payment due in June. However, in its budget calculations, Verdin Marketing Ink, unaware of this timing, did not anticipate having to cover the fulfillment cost for 2008-09 in the current fiscal year. Sufficient material for requests of visitors' information to cover the 2007-08 fiscal year was obtained and the agency anticipated the expense for the new stock of guides to be due after July 2008. They therefore did not retain the amount needed to pay the print cost and are facing a shortfall of$22,400. Since the Chamber of Commerce operates on cash accounting basis and a fiscal year from July to June, non-payment of this incurred cost in June would result in a shortfall reflecting unfavorably at year end. Verdin Marketing Ink therefore approached the City, asking to receive an advancement on next year's budget allocation. CONCURRENCE The Director of Finance and IT concurs with the recommendation to advance the amount requested from the 2008-09 budget. Council Agenda Report-Transfer of Community Promotions Funding Page 2 FISCAL IMPACT The total amount currently budgeted in the 2008-09 Financial Plan for advertising services is $197,000. The requested amount would be transferred for access in June 2008. Verdin Marketing Ink is aware that, as a result of this transfer,its remaining available budget for the coming fiscal year will be$174,600. ALTERNATIVE Council could deny the request which would leave the Chamber of Commerce with a budgetary shortfall in 2007-08. ATTACHMENTS 1. Community Promotions Advertising Contract—Scope of Work Exhibit A I. Invoice for Visitors Guides EXHIBIT A �-' ATTACHMENT 1 SCOPE OF WORK FOR ADVERTISING SERVICES 1. Assist in implementing the City's Tourism Marketing Plan Goals and Objectives. a. Continue to maintain and improve upon strategic alliances including supporting partnership opportunities with the San Luis Obispo Vintners and their two main events, Cal Poly Open House, and the Arts Community (Symphony, Mozart Festival, Plein Air Festival, etc.) through special events and marketing opportunities. 2. Use the City of San Luis Obispo's Community Promotion's Brand, San Luis Obispo — Experience the SLO Life!in all materials and promote its use by the media. 3. Plan, prepare and implement annual advertising campaign with measurable goals. Provide account services such as but not limited to: a. Development of ad concept. b. Design and production of advertising materials. C. Media buys and placement that meet criteria to reach the defined target audience considering traditional and new media. d. Explore cooperative advertising opportunities, in particular those with the San Luis Obispo County Visitors and Conference Bureau, San Luis Obispo Vintners, Cal Poly and the Arts Community and athletic events (Tour of California, Downtown Criterium, Jeep King of the Mountain, City to Sea Marathon, Mission Christmas Classic, Soccer Club, etc.) driving tourism traffic to San Luis Obispo. e. Provide advertising budget management. Pay placed advertising invoices and account for all such activity conducted on the City's behalf in monthly billing materials. f. Provide additional advertising and consumer relations services as needed. g.. Work with the Marketing Subcommittee to generate new ideas, approaches to advertising, and evaluation of placed campaigns. 4. Consumer Relations. a. Provide "direct marketing" services to consumers through various advertising and promotions efforts. b. Develop targeted themes to attract consumers to the region. Coordinate themes with the Public Relations Contractor and the Promotional Coordinating Committee (PCC) Marketing Subcommittee. C. Pursue other targeted niche opportunities as identified by the Contractor and the PCC Marketing Subcommittee. Evaluate creative focus for success and adjust accordingly. d. Use local events and amenities identified by Contractor and PCC Marketing Subcommittee in consumer oriented email, electronic newsletters, and other web- based promotional opportunities. 3 �'fl ATTACHMENT 9 e. Pursue focuseo-promotional opportunities with locdf organizations to reach target audience as defined. f. Direct mail to electronic database, monthly, an electronic newsletter, promoting events and new visitor opportunities in the City. Provide copies of the newsletter to all City lodging properties and encourage its use by visitors. Make a copy of the newsletter available to the Chamber of Commerce for placement on visitslo.com. g. Explore other creative direct marketing opportunities in defined feeder markets. 5. Provide advertising "fulfillment" services in response to requests for material as a result of advertising and direct marketing to consumers. a. This may be subcontracted to another parry such as a "fulfillment house" or the Chamber of Commerce Visitors Center and may include use of the Chamber of Commerce's Visitors Guide. b. Focus consumers to the website, visitslo.com, for fulfillment as well as for the continued development of the electronic database. 6. Monthly Reports. Monthly, by the first Wednesday, provide written reports on advertising activities to the City's Administration Department to be included in the Promotional Coordinating Committee's meeting packets. At a minimum the reports shall include: a. Evaluation of campaign compared to work scope b. Summary of advertising placed during the reporting period. C. Summary of direct consumer marketing placed during the reporting period. d. Summary of results and responses to materials during reporting period. e. Examples of materials distributed during the reporting period. f. Summary of strategic alliances supported during the reporting period. Once every three months, the contractor will provide an oral report to the PCC to discuss achievements in comparison to the work scope and a 60-day outlook for planned promotions. 4 �' -5/ : ATTACHMENT 2 Invoice VerdinM2rkefiflg14 Verdin Marketing Ink Invoice# 1808 1920 Broad Street San Luis Obispo,CA 93401 Invoice Date 4/30/2008 Phone:805-541-9005 Due Date 511512008 Fax:805-541-9007 Terms Net 15 PCC-City of San Luis Obispo Brigitte Elke 990 Palm Street San Luis Obispo,CA 93401 Project 08-PCC-009-Chamber Fulfillment 2008 Visitor Guides Expenses:$20,640.00 Expense Detail Date Description Quantity Amount 4/30/2008 2008 Visitor Guides-. 12,000.00 $20,640.00 Expense Subtotal: $20,640.00 $20,640.00 ` Invoice Subtotal $20,640.00 Sales Tax $1,599.60 Invoice Total $22,239.60 Less Applied Payments $0.00 Less Advance Billings $0.00 Amount Due $22,239.60 indicates item is taxable All invoices are net 15.A finance charge of 5%per month will be assessed on all outstanding balances after 30 days. 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