CITY OF CARMEL-BY-THE-SEA

CITY COUNCIL
Staff Report

November 7, 2017
ORDERS OF BUSINESS

TO: Honorable Mayor and City Council Members

SUBMITTED BY: Chip Rerig, City Administrator

APPROVED BY: Chip Rerig, City Administrator

Provide direction on the Citys regional destination marketing contract and consider an
SUBJECT: amendment to increase the professional services agreement with Burghardt-Dore
Advertising Inc. by $10,000

RECOMMENDATION:
(1) Receive an update on the Citys regional destination marketing contract and provide direction to staff.
(2) Approve a resolution authorizing an amendment to increase the professional services agreement with
Burghardt-Dore Advertising Inc. for marketing services by $10,000 for a total amount not to exceed $70,000.
BACKGROUND/SUMMARY:
The Citys primary revenue sources include property taxes, sales and use taxes and transient occupancy taxes,
with the latter two sources representing about $11.4 million, or 52% of the Fiscal Year 2017-2018 budgeted
revenue. As tourism contributes to the Citys economic vitality, the City seeks to encourage visitors at certain
times of the year while also balancing the residential and community characteristics of the Village. Marketing is
one avenue to promote tourism and the City has utilized the services of a marketing professional, Jeff
Burghardt, since 2006 to assist in this effort. Since this time, Mr. Burghardt (and his business colleagues) have
created and maintained the City supported travel website; designed seasonal and thematic marketing
campaigns; and coordinated print, television and electronic advertising efforts. The Citys current agreement with
Burghardt-Dore Advertising Inc. expires on December 31, 2017.

While the City has been very satisfied with the services rendered by the consultant, both the Citys Municipal
Code requirements pertaining to purchasing and governmental best practices, warrant that a competitive
process be undertaken to ensure that the City is receiving the best offer for consulting services. Before staff
embark on the development of a competitive process to solicit marketing services, staff seeks direction from
Council regarding its marketing objectives.

Marketing Objectives:
The Citys 2006 agreement with Anda/Burghardt was based on a strategy to create an integrated destination
marketing plan (public relations and advertising) that builds the Carmel-by-the-Sea brand by delivering a
consistent, strategic message surrounding an engaging theme that resonates with the target market and entices
them to visit Carmel-by-the-Sea. The target audience was identified as mid-to-high income consumers,
nationally and regionally (primarily in the California feeder markets) driving them to visit Carmel-by-the-Sea year-
round, and, more specifically, to increase hotel room nights and retail sales between November and April.

Since entering into the 2006 marketing agreement, the City has continued to fund marketing efforts. Part of this
effort includes contracting with Burghardt-Dore Advertising Inc. for regional destination marketing and working
collaboratively with partner agencies, such as the Monterey County Convention and Visitors Bureau, the Carmel
Chamber of Commerce and Visit Carmel. As presented to Council during marketing workshops in July 2016
and May 2017 respectively, these organizations have similar objectives.

The Monterey County Convention and Visitors Bureau has a stated mission to drive business growth through
compelling marketing and targeted sales initiatives that maximize the benefits of tourism to its guests, members
and community. Part of its marketing focus is on increasing overnight visitors and it uses the metric of room
nights booked to gauge the success of its marketing strategies. The mission of the Carmel Chamber of
Commerce is to promote business, marketing, and networking opportunities to benefit its members
professionally and economically. As part of this effort, the Chamber produces a comprehensive visitors guide to
Carmel and operates the Visitor Center, which allows the Chamber to provide information to visitors regarding
lodging, dining, shopping, and events and activities within the City.

Visit Carmel is a nonprofit entity that was formed to serve as the Owners Association for the Carmel Hospitality
Improvement District (CHID), in accordance with State laws pertaining to the formation of such assessment
districts. It is tasked with managing funds and implementing marketing programs as contained within the
Management District Plan. As stated within the CHID Management Plan, the marketing theme is to promote
Carmel as a desirable place for overnight visits, with the goal of increasing overnight visitation and room night
sales at assessed businesses, particularly in shoulder season and mid-week periods.

As presented during the July 2016 workshop, the Citys funding is leveraged with Visit Carmel funds for a
regional destination marketing efforts spearheaded by Burghardt-Dore. These objectives include:
Increase mid-week and off-season room nights
Promote a world-class destination image
Build opt-in email lists and social audiences
Integrate marketing, advertising and public relations

In addition to promoting tourism, many governments also utilize marketing strategies to promote economic
development (business development/relocation in particular) and/or attract new residents. Often these different
foci may be intertwined. For example, attracting new businesses is also likely to result in additional new residents
brought to the area as part of job creation. Or, an individual visiting a town on vacation may have a positive
experience and consider relocating to that jurisdiction permanently. Another aspect of marketing is branding,
which is the development and communication of an image to a targeted audience, which may include the
citizenry itself. This approach often involves the creation of a City logo and/or motto and messaging of the image
to external and internal audiences.

The first part of this agenda item therefore is for Council to determine its marketing objectives. While the
overarching goal thus far has been broad in terms of increasing visitors to Carmel-by-the-Sea during off-
season, it has often included the specific objective to also increase overnight stays within the Village. A logical
premise of this marketing effort is to increase lodging stays and the associated transient occupancy tax as well
as attempting to enhance sales and use taxes as overnight visitors are likely to purchase goods and services as
part of their stay. Staff seeks Council direction on:
(1) Increasing overnight stays and enhancing spending within the Citys boundaries remains the Citys marketing
objectives and/or:
(2) Provide direction to staff regarding other marketing objectives to incorporate into future marketing efforts.

Service Delivery Approaches:

In addition to receiving direction pertaining to objectives, staff seeks Council input into the process for soliciting
marketing services. Option #1: The City uses a marketing professional or consultant to continue promoting the
City as a world-class destination and actively engage in marketing and advertising efforts to promote tourism,
should Council determine this to be its marketing objectives. Implementation of Option #1 involves staff
developing a competitive process to select a marketing consultant including: the development of a Request for
Proposals document; public noticing and outreach to potential firms, creating evaluation criteria and an
evaluation process to review proposals and interview potential firms, including the use of a panel of
community/subject matter experts; and a recommendation and awarding of a contract by City Council. An RFP
would assess a consultants understanding of Councils marketing objectives; relevant experience and approach
to developing campaigns and creating and disseminating marketing collateral to achieve Councils marketing
objective(s).

By using this approach, the City would be able to compare services among consultants that are interested in
providing services to the City and evaluate these services in terms of the best offer as judged against proposal
evaluation criteria (Carmel Municipal Code 3.12.160). This method also allows the City to retain control of its
marketing dollars and ensure that its marketing dollars are utilized more holistically and to promote citywide
businesses in the areas of lodging, food/dining and retail. However, City staff are not marketing experts and the
scope of potential services being rendered to the City would be largely driven by the consultant proposals.

Option #2: The City utilizes an entity to serve as the administrator of the marketing funds. This approach was
used by the City in the past. A possible benefit is that an agency with subject matter expertise determines the
specific marketing tactics and best use of the funds as long as the marketing messaging achieves the Councils
objectives. Leveraging of funds and increased coordination of marketing strategies are also possible benefits
associated with this approach. A process to select an entity will need to be developed if Council is interested in
pursuing this option.

At this time, staff is seeking Council direction on the options regarding the existing marketing contract. Such
direction includes determining which approach to utilize as well as providing feedback regarding the criteria and
process to select either a marketing consultant or marketing administrator. Staff recommends Council direction
to seek a marketing administrator, in coordination with the City Attorney, to best amplify the Council marketing
objectives.

As part of the current marketing effort, Council has awarded a short-term contract to Burghardt-Dore Advertising
Inc. for marketing and advertising. The production of a Carmel brochure that includes a City map has been a
popular marketing tool. Burghardt-Dore has facilitated the reproduction of additional brochures that are provided
to the City (available at City Hall), hotels/inns and other interested organizations. When the cost of these
brochures are factored into the payments to the vendor, an augmentation of the City contract with Burghardt-
Dore is necessary to increase the amount of the contract to avoid exceeding the total contract amount.

ENVIRONMENTAL REVIEW:
There are no potential environmental impacts associated with providing direction on the Citys marketing efforts.
FISCAL IMPACT:
Preparing a RFP process for marketing services will require staff time and minimal costs for publication of the
notice to bidders. The Fiscal Year 2017-2018 Adopted Budget includes $120,000 for regional destination
marketing, of which $60,000 has been allocated to Burghardt-Dore for advertising through December 31, 2017.
In addition, the consultant has incurred costs of nearly $8,500 related to the printing of 30,000 Carmel map
brochures. It is recommended the contract be increased by $10,000 to cover these costs, leaving about
$50,000 remaining in the marketing budget for the rest of the fiscal year.
PRIOR CITY COUNCIL ACTION:
Council held workshops on marketing on July 11, 2016 and May 1, 2017. Council adopted the Fiscal Year 2017-
2018 budget on June 6, 2017, which included funding of $120,000 for regional destination marketing.
Subsequently Council adopted resolution 2017-077 on July 11, 2017 to award a contract to Burghardt-Dore
Advertising Inc. for marketing services for the term of July 1-December 31, 2017 for a not to exceed amount of
$60,000.

ATTACHMENTS:

Attachment 1_Resolution
 Attachment 1
CITY OF CARMEL-BY-THE-SEA
CITY COUNCIL

RESOLUTION NO. 2017-___

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA AUTHORIZING THE

CITY ADMINISTRATOR TO EXECUTE AMENDMENT NO. 1 TO THE PROFESSIONAL SERVICES
AGREEMENT WITH BURGHARDT+DORE ADVERTISING, INC. FOR MARKETING SERVICES FOR A
TERM OF JULY 1, 2017 TO DECEMBER 31, 2017 IN A TOTAL NOT TO EXCEED AMOUNT OF $70,000.00

WHEREAS, the City Council recognizes the value of marketing efforts that promote visits to Carmel-by-
the-Sea and encourage guests to stay overnight within the Village; and
WHEREAS, the Fiscal Year 2017-2018 Adopted Budget includes funding of $120,000 for regional
destination marketing; and

WHEREAS, the marketing firm of Burghardt+Dore Advertising, Inc. has developed specific media
campaigns to support the Citys marketing efforts, including maintaining a website that is identified as the
official travel website of Carmel-by-the-Sea; and

WHEREAS, City Council adopted resolution 2017- 077 on July 11, 2017 to authorize an agreement
with Burghardt+Dore Advertising, Inc. for a term of July 1- December 31, 2017 for an amount not to exceed
$60,000; and

WHEREAS, Burghardt- Dore Advertising Inc. facilitated the production of a brochure that is a popular
marketing tool and the costs of reproduction of this marketing collateral will increase the amount of the Citys
contract with Burghardt-Dore Advertising. Inc. by about $10,000.

NOW THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF CARMEL-BY-
THE-SEA DOES HEREBY:

Authorize the City Administrator to execute amendment no. 1 to the professional services agreement
with Burghardt+Dore Advertising, Inc. for marketing services for an amount not to exceed $70,000 for
the term of July 1- December 31, 2017, as shown in the attached Exhibit A.

PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA this 7th
day of November 2017 by the following roll call vote:

AYES: COUNCILMEMBERS:

NOES: COUNCILMEMBERS:

ABSENT: COUNCILMEMBERS:

ABSTAIN: COUNCILMEMBERS:

SIGNED: ATTEST:

_______________________ ___________________________
Steve G. Dallas, Mayor Ashlee Wright, City Clerk
 Exhibit A Attachment 1

Amendment No. 2 to Agreement

ADM-BURGH-059-17-18
Burghardt-Dore Advertising, Inc.

1. This amendment (the Amendment) is made by the City of Carmel-by-the-Sea and Burghardt-Dore
Advertising Inc. parties to agreement ADM-BURGH-059-17-18 executed on July 14, 2017.

2. The Agreement is amended as follows:

a. The Compensation of the Agreement is amended to read as follows:

CITY shall pay CONSULTANT up to an additional $10,000 for an amount not to exceed Seventy
Thousand ($70,000.00) Dollars, which said sum shall include all costs for services described in Exhibit
A.

3. Except a set forth in this Amendment, the Agreement is unaffected and shall continue in full force and
effect in accordance with its terms. If there is a conflict between this amendment and the Agreement or an
earlier amendment, the terms of this amendment will prevail.

CONSULTANT: DATE:

________________________ ____________________
Jeff Burghardt
Burghardt-Dore Advertising, Inc.

CITY: DATE:

________________________ ____________________
Chip Rerig, City Administrator

ATTEST: DATE:

________________________ ____________________
Ashlee Wright, City Clerk