Title
Transit Advertising Sales Representative Services
Action
Action:
Approve contract amendment #3 for $1,250,000 to the contract with Section 140 LLC for transit advertising sales representative services.
Body
Staff Resource(s):
Brent Cagle, CATS
Elizabeth Presutti, CATS
Catherine Kummer, CATS
Explanation
§ Section 140 LLC, an independent contractor, provides services involving the management and execution of the Charlotte Area Transportation System’s (CATS) advertising sales for transit-related assets.
§ On July 15, 2022, the city entered into a one-year contract for $202,000 with Section 140 LLC for transit advertising sales representative services.
§ On April 4, 2023, the parties agreed to contract amendment #1 to increase the contract amount by $110,000 and to amend the scope of services, extend the term of the contract by the first of four one-year renewals, and incorporate certain other changes.
§ On May 23, 2024, the parties agreed to contract amendment #2 to increase the contract amount by $180,000, amend the scope of services, and extend the term of the contract by the second of four one-year renewals.
§ This action will increase the contract amount by $1,250,000 to fund the remainder of the contract terms through June 30, 2027.
§ Key responsibilities include identifying potential advertisers, building and maintaining relationships with local and national clients, and creating customized advertising solutions that align with the CATS Advertising Policy.
§ The goal of this contract is to maximize revenue for the city's transit system while enhancing the visibility of businesses within the community, ultimately contributing to the city's economic development.
§ The services provided by Section 140 LLC have resulted in increased revenues from advertisements. With the prior contractor, CATS earned $1.5 million in revenues from advertisements in fiscal year (FY) 2019, the highest producing pre-pandemic year. With Section 140 LLC, CATS’s revenues from advertisements were:
- $1.95 million in FY 2023,
- $2.84 million in FY 2024, and
- $908,978 for the first quarter of FY 2025.
§ Section 140 LLC meets the city’s needs in terms of qualifications, experience, and cost, and has exceeded sales forecasts and revenue projections.
§ Waiver of a competitive solicitation process for services may be granted on a limited basis when deemed appropriate and in the city’s best interest. A waiver has been approved for these services based on continuity of service.
§ The current vendor's familiarity with the local market, existing clients, and the unique needs of CATS is significant to maintain the current level of revenue.
§ The new estimated value of the contract, including amendment #3, is $1,742,000.
Charlotte Business INClusion
Contract goals were not established for this Contract because the scope of work or goods required does not present viable subcontracting opportunities. Section 140 LLC will be responsible for 100% of the work or goods, and there are no opportunities to include subcontractors. This assessment was confirmed by CBI and the respective department after reviewing the project’s scope and potential for division into subcontracting opportunities.
Fiscal Note
Funding: CATS Operating Budget