Title
Consider a memorandum/resolution approving an agreement with First National Bank Texas awarding naming rights for the Family Recreation Center.
Body
DATE: May 6, 2025
TO: Kent Cagle, City Manager
FROM: Antonio Murphy, Executive Director of Parks and Recreation
SUBJECT: Award naming rights to First National Bank Texas for the Family Recreation Center.
BACKGROUND AND FINDINGS:
On January 21, 2025, the City Council awarded RFP-25-03, Consultant for City Park Facilities Sponsorship agreements, to Sportsman Solutions. The scope of services includes evaluating the City’s facilities to determine their naming rights values and documenting the methodology used for these assessments. A flat commission pricing structure applies to all service phases, with 20% of the gross commission allocated to Sportsman Solutions and 80% to the City. All agreements proposed by Sportsman Solutions would be submitted for a vote and must receive approval from the City Council.
Sportsman Solutions engaged in discussions with First National Bank Texas about securing naming rights for the Family Recreation Center. The proposed agreement entails a commitment of $60,000 per year for seven years, with the option for two additional seven-year terms. The City would retain $48,000 annually, potentially totaling $1,008,000 after the commission to Sportsman Solutions is deducted. Additionally, the estimated cost for signage is $40,000, which will be shared equally between the City and First National Bank Texas, resulting in a cost of $20,000 for the City.
After careful review, the staff has concluded that this initiative will generate valuable revenue for the Parks Department. It will facilitate enhancements to facilities and parks, enabling upgrades and the development of new projects. Additionally, these funds can be used to expand community programs and services.
THE ALTERNATIVES CONSIDERED:
N/A
Which alternative is recommended? Why?
N/A
CONFORMITY TO CITY POLICY:
This item conforms to state and local policies.
FINANCIAL IMPACT:
What is the amount of the revenue/expenditure in the current fiscal year? For future years?
The City will receive $60,000 annually for seven years, with the option to renew for two additional seven-year terms. After paying a 20% commission to Sportsman Solutions, the City will retain $48,000 each year. If both optional seven-year renewals are exercised under the same terms, the agreement could generate up to $1,008,000 in net revenue to the City over 21 years.
The City’s share of one-time signage costs is $20,000 (50% of the total - $40,000).
Is this a one-time or recurring revenue/expenditure?
Recurring: Annual sponsorship revenue ($60,000) and commission expense (20%)
One-time: City’s estimated portion of signage costs ($20,000 in FY 2025)
Is this revenue/expenditure budgeted?
No. This program was not included in the FY 2025 budget.
If not, where will the money come from?
Revenue and expenditure appropriations will be included in the year-end budget amendment based on this contract.
Is there a sufficient amount in the budgeted line-item for this revenue/expenditure?
Upon approval of this resolution, funding will be added through the year-end budget amendment in the Parks & Recreation Special Revenue Fund as follows:
Revenue: Naming Rights Account 260-44120-300-301-660010
Commission to Sportsman Solutions: Professional Services Account 260-54250-300-301-660010
City’s share of signage costs: Capital Outlay Account 260-56415-300-301-660010
RECOMMENDATION:
Staff recommends City Council approve the agreement awarding naming rights to First National Bank Texas for seven years with the option for two additional seven-year terms, and that the City Manager or designee be authorized to execute all contract documents and any and all change orders as allowed per State law.
DEPARTMENTAL CLEARANCES:
Purchasing
Finance
Legal
ATTACHED SUPPORTING DOCUMENTS:
Agreement
Contract Verification
Resolution 25-009R
Certificate of Interested Parties
Presentation