late item telstra advertising proposal …...(confidential) in brief: telstra intend to upgrade...

Late Item Telstra Advertising Proposal for Smart City Payphones Late Item

LATE ITEM TELSTRA ADVERTISING PROPOSAL FOR SMART CITY PAYPHONES

PROGRAM: Canning Environment

SUB PROGRAM: Build Canning

FILE REF: Q19/307

REPORT DATE: 10 September 2019

REPORTING OFFICER: John Radaich - Special Projects Engineer

RESPONSIBLE OFFICER: Warren Bow - Director Canning Environment

Strategic Plan Theme: LEAD - Accountable, responsible and forward-thinking administration.

Community Goal: Effective leadership and good governance. Council Strategy: Prudent financial management and long term financial

sustainability.

Authority/Discretion: Executive: The substantial direction setting and oversight role

of the Council eg adopting plans and reports, accepting tenders, directing operations, setting and amending budgets.

Attachments: 1. Brochure - Telstra Smart City Payphone (D19/117517).

2. Third Party Advertising Offer - Telstra Smart City Payphones (D19/119768). (Confidential)

In Brief:

Telstra intend to upgrade their payphone infrastructure across the City of Canning, including at Cecil Avenue as part of the City’s first Smart Street redevelopment in the Canning City Centre.

A new type of payphone is proposed (Smart City Payphone) by Telstra at various locations, including Cecil Avenue. This new payphone is smart-enabled and facilitates rolling electronic advertising which remains the sole domain of Telstra, unless third party advertising is suitably approved by the relevant local government authority.

This report seeks Council approval for Telstra to allow third party electronic rolling advertising panels on their Smart City Payphone infrastructure in exchange for limited City advertising and community messages.

OFFICER RECOMMENDATION

That Council:

1. Accepts the offer submitted by JCDecaux Australia Pty Ltd, on behalf of Telstra, to allow third party rolling advertising on Telstra Smart City Payphones in exchange for limited City advertising and community messages, with a contract term of up to 15 years.

2. Authorises the Chief Executive Officer to execute the contract agreement, subject to the negotiation process being completed including any variations (of a minor nature).

Relevant Council Resolutions

Council Meeting and Date Report No Decision

Not applicable.

AGENDA BRIEFING AGENDA 10 SEPTEMBER 2019


BACKGROUND

1 Telstra have partnered with JCDecaux, a large international outdoor communication company, to provide, operate, service and maintain over 1,800 new Smart City Payphone sites across Australia.

2 A Smart City Payphone (refer Attachment 1) is a smart-enabled public payphone facility that will incorporate the latest electronic technology and communications, including (but not necessarily limited to):

a) Near-field communication for mobile phone interaction;

b) 32’ Inch communication and electronic display screen;

c) USB charging outlet;

d) Telstra WiFi for citizens at selected locations; and

e) Ability to display over-riding emergency warnings and messaging.

3 This new payphone facilitates rolling electronic advertising and messaging, which remains the sole domain of Telstra, unless third party advertising is suitably approved by the relevant local government authority.

4 Telstra intend to upgrade their payphone infrastructure across the City of Canning, including at Cecil Avenue as part of the City’s first Smart Street redevelopment in the Canning City Centre.

5 JCDecaux are liaising with local governments to secure third party advertising at Smart City Payphones.

DETAILS

6 Telstra, under the provisions of the Telecommunications Act retain the authority to install payphone infrastructure in the public realm.

7 Telstra currently have 24 street payphones located throughout the City of Canning (‘the City’). They have embarked on a program to rationalise and upgrade these payphones to Smart City Payphones.

8 Telstra has no restrictions on advertising its own products at these Smart City Payphones. However third party advertising at selected sites is required to be approved by the local authority. Revenue from the third party advertising will help fund the upgrade of the payphone infrastructure to the new Smart City Payphones and offset on-going maintenance costs.

9 Telstra, through JCDecaux has identified 10 - 15 existing payphone sites within the City for third party advertising when upgraded to Smart City Payphones. Initially, Telstra will install 10 new Smart City Payphones, but they want to be able to increase it to 15 new Smart City Payphones. Therefore the Agreement with the City is proposed to be for 15 new Smart City Payphones.

10 The current location of payphone sites within the City and the initial Smart City Payphone sites that have been identified for upgrade are listed in the table below:

Selected for New Smart City Payphone

Location

160 George Street, Queens Park

Yes 71 Pinetree Gully Road, Willetton

296 Railway Parade, East Cannington



Selected for New Smart City Payphone

Location

Yes Opposite 12 Cecil Avenue, Cannington

Yes 15 Tribute Street, Shelley

70 Vellgrove Avenue, Parkwood

Yes 189 High Road, Riverton

Yes 42 Rostrata Avenue, Willetton

57 Central Avenue, Rossmoyne

Yes 73 Apsley Road, Willetton

Yes 477 Riverton Drive, Riverton

113 Manning Road, Bentley

2 Lynwood Avenue, Lynwood

193 Hillview Terrace, Bentley

Yes 193 Sevenoaks Street, Cannington

203 Treasure Road, Queens Park

6 Eureka Road, Wilson

Yes 12 Cecil Avenue, Cannington

77 Gerard Street, East Cannington

Yes 2 Lynwood Avenue, Lynwood

30 Dumond Street, Bentley

3 Fern Road, Wilson

328 Wharf Street, Queens Park

39 Pitt Street, St James

11 Telstra is seeking approval in the form of a contract agreement for third party advertising at Smart City Payphone sites, initially at the sites listed in the above mentioned table. In exchange they are offering the City access for City advertising and community messages on the rolling electronic advertising panels. There is also the ability to display over-riding emergency warning and management signage.

CONSIDERATIONS

Legal Compliance

12 Under the Local Government (Functions and General) Regulations 1996 Part 4, Division 2, Clause 11(1), the City is required to publicly invite tenders if the consideration is expected to

be in excess of $150,000. The value of the proposed contract agreement exceeds $150,000; therefore the regulations would normally apply and a tender would be administered.

13 As JCDecaux are Telstra’s nominated provider, the City is unable to select a different supplier to provide the same services and, as such, this meets the requirement of the Local Government (Functions and General) Regulations 1996 Part 4, Division 2, Regulation 11 (2) (f), being that “the local government has good reason to believe that, because of the unique nature of the goods or services required or for any other reason, it is unlikely that there is more than one potential supplier”. Thus, this contract agreement would be deemed to be

exempt from the requirements to tender.

Policy Implications

14 City Policy AF301 Procurement of Goods and/or Services, applies to this procurement process. Clause 7.4 of the policy recognises the Sole Source of Supply situation of third party advertising on Smart City Payphones.



Financial Considerations

Business Plan

15 The provision of street furniture and supporting facilities in public areas is integral to the Build Canning Business Plan.

Internal Budget

16 There will be no annual revenue or costs generated as a result of this contract and will not have an impact on Council’s future expenditure. The value of the contract is contained in the Confidential Attachment.

Asset Management

17 All payphone infrastructure is the responsibility of Telstra and not an asset of the City, and will be maintained by JCDecaux.

Sustainability Considerations

18 Sustainability considerations will be taken into account in negotiating a contract agreement for the third party advertising and controls on its content. This includes not supporting advertising that:

a) Could cause offence or are illegal or immoral;

b) Promotes alcohol or the consumption of alcohol; and

c) Depicts or promotes smoking or any tobacco product.

19 In addition, the City would reserve the right to reject any advertisement of discretionary foods. These foods are encompassed by the term ‘discretionary foods’ as used in the Australian Dietary Guidelines (the ADG).

Consultation

20 Consultation has only been undertaken at Officer level, with the offered marketing and messaging opportunities to the community being strongly supported.



Other Considerations or Risks

Risk/ Opportunity

Consequences Mitigation/

Actions Consequence

Likelihood X

Consequence Rating

= Overall Risk/ Opportunity

Officer Recommendation approved by the Council (positive outcomes) Opportunity A

Value for money.

Expansion of the City’s public information and communication options.

Facilitate establishment of the Cecil Avenue precinct as a Smart Street.

Execute Deed of Agreement.

Likely Moderate High (Opportunity)

Officer Recommendation approved by the Council (negative outcomes) Risk B

Supplier performance issues.

Ensuring the advertising is in accordance with the City’s requirements and the agreement/ contract.

Possible Moderate Medium (Risk)

Officer Recommendation deferred by the Council Risk C

Loss of expanded advertising opportunity for the community, businesses and the City in the interim.

Current avenues of advertising and community messaging to continue.

Likely Minor Medium (Risk)

Officer Recommendation declined by the Council Risk D

Loss of expanded advertising opportunity for the community, businesses and the City.

Current avenues of advertising and community messaging to continue.

Likely Minor Medium (Risk)

COMMENT

21 Officers believe that the opportunity to display civic, community and Council related advertising at various locations using Telstra Smart City Payphone infrastructure across the City is a significant opportunity; not the least is the Cecil Avenue offering, which aligns with the Smart City objectives of the Canning City Centre. Cecil Avenue will be a transformational piece of new road infrastructure at a key entry as part of the regeneration of the Canning City Centre. Both Cecil Avenue and other projects like the Wharf Street Basin Next Generation Community Park are starting to announce Canning’s City Centre as an emerging Smart City.

22 The payphone infrastructure will complement the new pedestrian environment of Cecil Avenue, which is rapidly nearing completion.

23 In addition, the ability to display over riding emergency warning and management signage at any time represents a further community benefit.

24 It is acknowledged that seeking Council to consider this matter as a ‘Late Item’ is not ideal; however the issue of the location of the pre-existing two public payphones on Cecil Avenue is important to resolve due to the current progress of the Cecil Avenue West project. Presently, two pre-existing, old style Telstra payphones have been temporarily removed from Cecil Avenue whilst construction is on-going on the project.



25 Officers have attempted to negotiate with Telstra in relation to their reinstatement and relocation, to no avail. Telstra were firm that, given their usage, the payphones are required on Cecil Avenue - in addition to the authority conveyed to them via statute. In the event that the Officer’s Recommendation is not endorsed, it is likely that the old style payphones will be reinstated on Cecil Avenue by Telstra. An alternative to this, is that the area on which they existed prior to the commencement of the Cecil Avenue West project is paved over by the City’s contractors, with the City then subsequently required to remove the relevant paving, install footings, communications and electrical and then repave when/if the agreement has been finalised.

26 The offer by Telstra for incorporating provision for limited advertising/messaging for the City’s purposes on the Smart City Payphones translates to a high commercial value as detailed in the Confidential Attachment. There is the alternative option of an annual licence fee without the City’s advertising option; however this translates to a lot less value to the City.

27 Telstra, through JCDecaux, are seeking a 15 year contract agreement on this arrangement. This term can be negotiated in finalising an agreement.

28 In addition, the following can be included in negotiations with Telstra in establishing the agreement:

a) Security of the arrangement between Telstra and JCDecaux over the term of the contract and its effect should such arrangements change; and

b) Restrictions on any third party advertising that is not in the best interests of the community, such as the City’s Sustainability Considerations above.

29 This report seeks to accept the offer made by Telstra, and to authorise the Chief Executive Officer to negotiate and finalise establishment of the contract agreement.

VOTING REQUIREMENT

30 Simple majority.

AGENDA BRIEFING COMMENT

31 Not applicable.

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late item telstra advertising proposal …...(confidential) in brief: telstra intend to upgrade...

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