REPORT TO COUNCIL
SUBJECT
Title
Action to Authorize the City Manager to Execute Amendment No. 2 to the Agreement with Z'Onion Creative Group LLC to Provide Marketing and Communications Services, for a Total Not-to-Exceed Compensation of $560,000
Report
BACKGROUND
The City of Santa Clara’s (City) Communications Office, a division within the City Manager’s Office, is the hub of communications for the City and maintains consistency, focus and direction across all platforms to share the City’s unique story, services, and programs.
Through interdepartmental efforts, the City utilizes a variety of communication methods to provide information to our diverse community, including:
• News Releases and Media Advisories
• Media Relations which include responding to inquiries and providing interviews and Statements to the media.
• Speeches and Talking Points for Mayor and City Manager
• Inside Santa Clara, a magazine that is mailed to all residential and business addresses in Santa Clara twice a year
• City Calendar & Annual Report
• Quarterly utility bill inserts
• Monthly City Hall News newsletter (e-version)
• Email updates for City news and events through eNews subscriber lists
• Various social media channels including Facebook, X, Instagram, YouTube, LinkedIn, and Nextdoor
• Content for SantaClaraCA.gov website
• Messaging for internal communications
• Messaging for ballot measures and City campaigns
• Executive communications
The City has historically had a public relations agency of record on contract; however, as the previous contract was set to expire, the City initiated a procurement process to secure a public relations agency for ongoing communications support, potential future rebranding efforts, and crisis communications.
In the fall of 2024, the City issued a competitive Request for Proposals (RFP) based on best value to support the City’s marketing and communications needs, including providing monthly communications support. Subsequently, on July 11, 2025, the City Manager executed an agreement with Z’Onion Creative Group LLC (Z’Onion). Consistent with Section 2.105.300(a) of the Santa Clara City Code, which authorizes the City Manager to execute agreements valued at up to $250,000, the agreement provided an initial one-year term with four one-year renewal options through June 30, 2030.
On August 27, 2025, pursuant to the City Manager’s delegated authority, Amendment No. 1 was executed to remove the option years and extend the initial term to a full five-year period ending on June 30, 2030. To provide greater flexibility in utilizing Z’Onion’s services at the volume needed depending on the current City initiatives planned for each year, Amendment No. 1 also removed the annual limit of $50,000 such that the full not to exceed $250,000 was available over the duration of the five-year term.
DISCUSSION
In anticipation of the City hosting both Super Bowl LX and six FIFA World Cup matches in 2026, the City relaunched the Economic Development and Marketing Committee (Committee) to lead a community engagement campaign focused on outreach to residents and businesses to better understand their interests and concerns related to the City serving as host for these major sporting events. Committee efforts and community engagement began in April 2025, and the official “Where the Mission Meets the Moment” (WTMMTM) campaign launched in October 2025.
To support the timely development and launch of the campaign ahead of the 2026 events, staff utilized the City’s existing agreement with Z’Onion. The WTMMTM campaign services were within the scope of the agreement; however, the level of effort and associated costs increased to support the development and implementation of the campaign.
The City leveraged Z’Onion’s expertise in marketing and brand development to support WTMMTM and worked collaboratively with Z’Onion on the successful development of a slogan, logo, and other branded materials. These efforts were supported through multiple purchase orders (POs) issued under the Agreement. Initial monthly communications support was covered under a PO of $50,000, which was subsequently increased to $86,950 to support early WTMMTM campaign activities. The balance of the PO for monthly communications support as of March 20, 2026, is $1,479.21.
To better track campaign-related expenditures, a separate PO of $150,000 was issued for WTMMTM-related campaign services, with a current balance of $56,061.60. Additional WTMMTM costs for promotional materials total $12,623.36.
To date, $236,950 has been expended or encumbered through POs, and an additional $12,623.36 has been spent on WTMMTM campaign-related promotional and branding services. In total, $249,573.36 of the Agreement has been expended or encumbered, leaving a remaining balance of $426.64. Table 1 below summarizes expenditures to date and the remaining balance under the current Z’Onion agreement.
Table 1: Z’Onion Contract Expenditures
|
Description |
Amount Expended/Encumbered |
Remaining Balance |
|
Total Agreement Amount |
N/A |
$250,000.00 |
|
Communications Support |
$86,950 |
$163,050.00 |
|
WTMMTM Campaign |
$150,000 |
$13,050.00 |
|
WTMMTM Expenditures |
$12,623.36 |
$426.64 |
The additional support services that Z’Onion provided for the WTMMTM campaign and associated projects resulted in the maximum compensation of the Agreement being reached earlier than originally anticipated.
The WTMMTM campaign, launched in October 2025, will continue through December 2026. The City anticipates ongoing support from Z’Onion for upcoming events, including the development of marketing, promotional materials and branded items. Upcoming WTMMTM events include STEM Zone (April 19, 2026) and a series of two-day Night Markets scheduled for May, June, and July.
To ensure continued access to Z’Onion’s services for ongoing communications support and future campaign initiatives, the City is preparing Amendment No. 2 to the Agreement. Amendment No. 2 would increase the maximum compensation by $310,000, for a total not-to-exceed amount of $560,000 through June 30, 2030. This increase includes $200,000 for the remaining four years of communications support, $10,000 for additional WTMMTM-specific communications support, and $100,000 for upcoming WTMMTM campaign needs. Table 2 summarizes how the increased compensation will be utilized.
Table 2: Proposed Use of Additional Compensation
|
Description |
Amount |
|
Monthly communications support for the remaining four years of the agreement |
$200,000 |
|
Additional communications support specific to the WTMMTM campaign |
$10,000 |
|
Marketing and promotional materials for upcoming WTMMTM events |
$100,000 |
|
Total Increase (Amendment No. 2) |
$310,000 |
Under the agreement, compensation is based on either a time-and-materials or fixed-fee basis, as determined by the City for each project. Time-and-materials work is billed at a flat rate hourly rate, while fixed fee projects are based on City-approved cost proposal with defined milestones.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(5) in that it is an administrative activity that will not result in direct or indirect physical changes in the environment.
FISCAL IMPACT
There is no new fiscal impact associated with this item. Funding for Z’Onion’s ongoing communications support was previously approved by City Council and is included in the City Manager’s Office operating budget. In October 2025, City Council allocated $1,000,000 to the City Manager’s Office to implement the City’s WTMMTM campaign. These funds will be used to cover any additional services provided by Z’Onion related to the WTMMTM campaign that are beyond the firm’s ongoing communications support.
COORDINATION
This report was coordinated with the City Manager’s Office, Finance Department, and City Attorney’s Office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
1. Authorize the City Manager or designee to execute Amendment No. 2 to the Agreement with Z’Onion Creative Group LLC (Agreement) to increase the maximum compensation by $310,000 for marketing and communication services, for a revised not-to-exceed maximum compensation amount of $560,000, subject to the appropriation of funds; and
2. Authorize the City Manager or designee to take all actions necessary to implement and administer the Agreement, including negotiating and executing future amendments to (i) add or delete related line item services; (ii) implement rate adjustments on the terms provided in Exhibit B, and (iii) make de minimis changes, provided that the total not-to-exceed maximum compensation is not exceeded, subject to the appropriation of funds and review and approval as to form by the City Attorney.
Staff
Reviewed by: Paulina Morales, Assistant City Manager
Approved by: Jovan Grogan, City Manager
ATTACHMENTS
1. Z’Onion Agreement for Services
2. Z’Onion Agreement Amendment No. 1
3. Z’Onion Agreement Amendment No. 2