Agenda Packets - 1998/04/27 - Laserfiche WebLink

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-7K TO: Honorable Mayor and members a City Council FROM: Bruce Kessel, Finance Director DATE: April 24, 1998 Subject: Contract for supplying soft drink products at City facilities History The revenue projections for the Community Center included income from vending machines. The plans have a dedicated area for approximately eight vending machines. While the actual types of vending have not been finalized, it is anticipated that approximately four of the machines will be for soft drinks. At the present time, the golf course sells soft drink products and City Hall has two soft drink vending machines. Several weeks ago, we contacted Coca Cola and Pepsi to determine whether they could provide any discounts based upon our existing volume and the anticipated volume from the Community Center. Both vendors indicated that they could provide discounts and incentives from standard pricing if we would enter into an agreement to only sell their product for a period of time. I requested pricing based upon three scenarios: 1)the City and Community Center; 2) the golf course; and 3)the City, Community Center, and golf course. On April 8th, both Coke and Pepsi made proposals. Highlights of proposals Benefits: • Both vendors have a full range of products available including soft drinks, bottled water, ice tea, sports drinks, and juices. • Both provide free vending machines and coolers. • Both proposals would like to consider installing a vending machine outside at several of the City parks; after several months or the first year, they would evaluate whether it was worthwhile continuing this service in future periods. • Both vendors would provide some free product for the City to use or sell as it saw fit. Coke would provide 100 cases per year for both the City and the golf course for a total of 200 cases per year. Pepsi would provide 25 cases per year. The Coke proposal would provide an additional $15,000 over the term of the proposed contract. • Both vendors would provide up-front rebates or incentives. Coke would provide $10,000 for just the City portion, $10,000 for just the golf course portion, or for scenario 3) above, it would provide$10,000 to the City and$12,000 to the golf course for a total of$22,000. Pepsi would provide $2,000 for just the City portion, $1,500 for just the golf course portion, or for scenario 3) above, the sum of the two options or$3,500. The money could be used as we saw fit. On the City side, one item that was discussed was an electronic message board; Coke indicated that while they would like the City to consider a small Coke logo on the sign, it would not be required. • Both provide some marketing assistance. Coke would provide $100 per year for both the City and golf course in Coke merchandise; we could pick the items and use them as we saw fit; total value $1,000. In addition, Coke would provide umbrellas for tables on the patio at golf course. Pepsi would provide umbrellas for the golf course and could do tie