SUBJECT: Recommendation to the City Council Regarding a Proposed Advertising Fee Schedule for the Merced Yosemite Regional Airport REPORT IN BRIEF The Regional Airport Authority is being asked to review proposed Advertisement Fee Schedule for the Merced Yosemite Regional Airport and provide a recommendation to the Merced City Council. RECOMMENDATION Regional Airport Authority - Adopt a motion recommending the Merced City Council approve the Advertising Fee Schedule are recommended by staff. ALTERNATIVES 1. Recommend approval to the City Council as recommended by Staff; or, 2. Recommend approval to the City Council (with modifications as specified in the motion); or 3. Recommend denial to the City Council; or, 4. Continue to a future meeting (date and time to be specified in the motion) DISCUSSION City staff proposes to permit commercial advertising within the Merced Yosemite Regional Airport (MCE) as a means of generating a new revenue stream to enhance airport services and improve facilities. Because advertising is a new concept for MCE, staff recommends launching a two-year Pilot Program, with the option to extend it for one additional year. This pilot period will allow staff to fully test the program, evaluate demand, and make adjustments as needed after the pilot period ends. To support this effort, staff is proposing a Tiered Advertising Fee Schedule (Attachment 1 and Table 2.0). Options include: · Custom displays ranging from large formats (up to 4 ft × 5 ft) to small formats (5 in × 5 in). · Digital advertising options at separate rates. · Reduced rates for qualified 501(c)(3) nonprofit organizations (excluding higher-education institutions). · Temporary advertising opportunities, ranging from 1 week to 1 month, commonly used for local festivals or special events. Airport Advertisement Fee Study Staff conducted a fee analysis comparing advertising rates at airports of similar or slightly larger size. The airports reviewed include Modesto (MOD), Sonoma County (STS), Asheville (AVL), and general industry standards for small airports with approximately 50,000 enplanements. Many nearby airports were considered but most do not offer advertising. The comparative fee analysis is summarized below under Table 1.0 (full proposed Advertisement Options and Rates shown at Attachment 1): Table 1.0 - Comparative Analysis Airport Enplanements Product Annualized Rate MCE PROPOSED Tier A ~5,000 Bundle: 2 prints + :30 digital $3,500 MCE PROPOSED Tier C ~5,000 Digital only :30 $2,500 Modesto MOD ~1,800 Callboard 19x21 + telephone $888 Modesto MOD ~1,800 Callboard 7.5x9.5 $252 Asheville AVL ~1.65M Front-lit poster, single $4,800 Asheville AVL ~1.65M LCD scroller :10 single $2,400 Asheville AVL ~1.65M Cube wrap (baggage/gate) $3,000 Sonoma STS ~225K Backlit terminal 60x41 $14,400 Industry small airport (>50K pax) 50K+ Static wall display $30K-$60K MCE’s pricing is higher when measured against the directly comparable Modesto City-County Airport callboard schedule, but is reasonable when the bundle is weighted for the digital screen network, the dual-location physical placement, and the Yosemite tourism demographic. Industry pricing guidance for small regional airports cites $2,500-$5,000 per month for static displays at airports with 50K+ passengers, so on a per-impression basis Merced's annual rate is in line with the market once enplanements grow. Proposed Advertisement Rates and Packages Staff is proposing a tiered fee system in which costs are proportional to the type of advertising permitted. Options would also allow partners to combine physical advertisements with digital advertisements. The highest tier, Tier AA, would be limited to two positions. Discounted rates would be offered to non-profit organizations. Additionally, temporary advertising options would be available for short-term needs such as festivals, conferences, and similar events. Below is the complete table of the proposed advertisement fee schedule (also provided in Attachment 1). Table 2.0 - Proposed Advertisement Fee Schedule Tier / Product Year 1 Annual Fee Notes Tier AA - Institutional Anchors $10,000 In three terminal zones including baggage claim + 1 minute digital spot. Custom display up to 4 ft × 5 ft (20 square feet maximum). Tier A - Premium $3,500 Dual-location 10 inch × 10 inch print + :30 second digital spot Tier B - Standard $3,000 Dual-location 5 inch × 5 inch print + :30 second digital spot Tier C - Digital only $2,500 :30 second digital spot on waiting-area screens Tier D - Community / Non-profit $750 Qualified 501(c)(3) organizations (excluding higher-education institutions); fills empty inventory, builds goodwill Premium Add-On: Baggage / Wall Wrap $2,500 Custom large-format wrap, limited inventory Premium Add-On: Restroom / Door Decal $1,500 Vinyl decal in high-dwell location Category Exclusivity Surcharge +25% on A or B Hotel, rental car, lodge upsell Short-Term Event - 1 week $250 Tourism / festival placements Short-Term Event - 1 month $500 Tourism / festival placements Note: Fees will be updated at the beginning of each calendar year based on the annual Consumer Price Index (CPI) adjustment. Advertisement agreements would be reviewed and approved by Airport staff and last a period of two years. There will be a total of 18 advertisement slots, and they will be located inside of the Merced Yosemite Regional Airport Terminal. ATTACHMENTS 1. Proposed Advertising Options and Rates 2. Presentation

Action Items Agenda Ready Introduced July 29, 2026

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