HomeMy WebLinkAbout02-189 Resolution No. 02-189
RESOLUTION
AUTHORIZING EXECUTION OF A BEVERAGE MARKETING AGREEMENT WITH
PEPSI AMERICAS, INC.
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN,
ILLINOIS, that Olufemi Folarin, Interim City Manager, and Dolonna
Mecum, City Clerk, be and are hereby authorized and directed to
execute a Beverage Marketing Agreement on behalf of the City of
Elgin with PepsiAmericas, Inc . for beverage vending at The Centre
and the Wing Park and Lords Park Family Aquatic Centers, a copy
of which is attached hereto and made a part hereof by reference.
s/ Ed Schock
Ed Schock, Mayor
Presented: May 22 , 2002
Adopted: May 22 , 2002
Vote: Yeas : 7 Nays : 0
Attest :
s/ Dolonna Mecum
Dolonna Mecum, City Clerk
BEVERAGE MARKETING AGREEMENT
This Beverage Marketing Agreement(the"Agreement")is made on this 2.274 day of
2002, by and between the City of Elgin, an Illinois municipal corporation (the
"Ci ') and PepsiAmericas,Inc. ("PepsiAmericas").PepsiAmericas and City hereby agree
as follows:
1. The City, after independently seeking proposals from all interested persons and
entities, has independently selected PepsiAmericas to provide the services and
products as set forth in this Agreement.
2. The use of the term"Beverages" within this Agreement shall mean any and all non-
alcoholic drinks except milk and hot beverages.
3. The use of the term "Brands" within this Agreement shall mean any and all
Beverages sold and distributed by PepsiAmericas and any and all Beverages
PepsiAmericas may sell or distribute in the future including, but not limited to,
carbonated soft drinks, non-carbonated soft drinks, juices, juice-containing
beverages, teas, sports or isotonic drinks, bottled waters and bottled coffees.
4. The use of the term "Facilities" within this Agreement shall collectively mean the
City's Lords Park Family Aquatic Center,the Wing Park Family Aquatic Center and
The Centre of Elgin.
5. The term of this Agreement shall commence on 23 May 2002 and terminate on
22 May 2003 unless it is terminated earlier pursuant to the provisions of this
Agreement. The Agreement shall be automatically extended for four consecutive
one-year terms unless the City notifies PepsiAmericas of its intention not to renew
the Agreement in writing not less than thirty (30)days before the expiration date of
the current term.
6. During the entire term of this Agreement,PepsiAmericas shall provide and supply
City with all necessary equipment to dispense the Brands at the Facilities without
charge; provided that all Beverages are supplied to City at the Facilities by
PepsiAmericas as set forth in this Agreement and that the only products dispensed
from such equipment are the Brands. PepsiAmericas will provide service on all
equipment without charge to City. All rights,title and interest in all PepsiAmericas
equipment supplied to City shall at all times remain with PepsiAmericas.
7. PepsiAmericas shall provide the City with not less than six(6)vending machines to
be used for dispensing Brands at The Centre. The vending machines shall be
installed at The Centre in locations determined by the City.The City shall stock the
vending machines with Brands purchased from PepsiAmericas and the City shall
retain the proceeds from all Brands sold from the vending machines.
8. During the first term of the Agreement,the City shall purchase from PepsiAmericas
not less than one thousand(1000)cases of the following Brands in any combination
as determined by the City: Soda in twenty (20) ounce containers; sport drink in
twenty (20) ounce containers; water in twenty (20) ounce containers, or; juice in
eleven and one-half(11.5)ounce containers.During each of the four one-year terms
that may be extended pursuant to the terms of this Agreement, the City shall
purchase from PCBG not less than two thousand five hundred (2500) cases of the
following Brands in any combination as determined by the City: Soda in twenty
(20) ounce containers; sport drink in twenty(20)ounce containers;water in twenty
(20) ounce containers, or;juice in eleven and one-half(11.5) ounce containers. The
price at which City will purchase said quantities of Brands in cases from
PepsiAmericas shall be fixed at the following rates during the first term of the
Agreement Soda in twenty (20) ounce containers—$12.15 per case; sport drink in
twenty (20) ounce containers—$12.65 per case; water in twenty (20) ounce
containers—$7.00 per case;juice in eleven and one-half (11.5) ounce containers—
$12.50 per case. During each of the four one-year renewal terms that may be
exercised by the parties pursuant to the terms of this Agreement, PepsiAmericas
may increase the per case price of the Brands purchased by City in an amount equal
to the April consumer price index(CPI) or three(3)percent,whichever is less,over
the per case price of Brands being paid by the City to PepsiAmericas during the
immediately preceding term of the Agreement.
9. During the first term of the Agreement,the City shall purchase from PepsiAmericas
not less than four hundred (400) gallons of"bag-in-the-box" soda. During each of
the four one-year terms that may be extended pursuant to the terms of this
Agreement, the City shall purchase from PepsiAmericas not less than six hundred
(600) gallons of"bag-in-the-box" soda. The price at which City will purchase said
gallons of "bag-in-the-box" soda from PepsiAmericas shall be fixed at the rate of
thirty-nine and 10/100 dollars($39.10)per five(5) gallon container during the first
term of the Agreement.During each of the four one-year renewal terms that may be
exercised by the parties pursuant to the terms of this Agreement, PepsiAmericas
may increase the per case price of soda purchased by City in an amount equal to the
April consumer price index (CPI) or three (3) percent, whichever is less, over the
per case price of soda being paid by City to PepsiAmericas during the immediately
preceding term of the Agreement.
10. PepsiAmericas shall provide the City with an annual marketing fund in the amount
of two thousand dollars ($2000.00) upon the parties' execution of this Agreement.
During each of the four one-year terms that may extended pursuant to the terms of
this Agreement, PepsiAmericas shall provide the City with an annual marketing
fund in the amount of six thousand dollars ($6000.00), payable to the City at the
commencement of each one-year term.
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11. PepsiAmericas shall provide to the City at no cost two hundred and sixteen (216)
shirts to be used for marketing purposes upon the parties' execution of this
Agreement. During each of the four one-year terms that may extended pursuant to
the terms of this Agreement,PepsiAmericas shall provide to the City at no cost two
hundred and sixteen (216) shirts to be used for marketing purposes at the
commencement of each one-year term.
12. The City or PepsiAmericas may terminate this Agreement by providing the other
not less than sixty(60) days'written notice of its intent to terminate this Agreement.
Sixty (60) days' written notice shall be required except for PepsiAmericas' or the
City's breach of any condition in this Agreement. Upon the termination of this
Agreement, the City shall return all PepsiAmericas equipment on the Facilities to
PepsiAmericas.
13. Notwithstanding the provisions of Paragraph 12 of this Agreement,should the City
or PepsiAmericas violate or breach any term of this Agreement, such violation or
breach shall be deemed to constitute a default, and the other party has the right to
seek such administrative, contractual or legal remedies as may be suitable to the
violation or breach; and in addition, if either party, by reason of any default,fails
within fifteen (15) days after notice thereof by other party to comply with the
conditions of the Agreement, the other party may terminate this Agreement.
14. The City hereby appoints PepsiAmericas, through its Brands, as the official
Beverage supplier, distributor and advertiser for Beverages at the Facilities. The
City further recognizes and sanctions PepsiAmericas to use,on a royalty-free basis,
the City's name and location of the Facilities in any and all Brand advertising,
promotional and merchandising materials that PepsiAmericas may develop or
produce,if any,in connection with this Agreement.The City shall cause the Brands
to be available at the Facilities and no Beverages or Beverage-related items
including but not limited to, cups or premium items, that compete with or are the
same as or similar to the Brands shall be made available,advertised or promoted at
the Facilities or by City.
15. PepsiAmericas shall be afforded space in a prominent location at various locations
at the Facilities, as determined by the City, for exclusive Brand identification
including, but not limited to, any and all menu and message boards in the event
any space is provided on such menu and message boards for Brand identification.
PepsiAmericas shall purchase all signs for Brand identification and shall install all
signs under the direction and supervision of the City in compliance with all
applicable ordinances and other requirements of law.The installation of any Brand
identification signs shall be limited to the interior of the Facilities. PepsiAmericas
shall be responsible for the maintenance of all Brand identification signs erected at
the Facilities.Any and all space afforded to PepsiAmericas shall be clearly visible to
the purchasing public. The City agrees that it will be responsible for policing those
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locations in the immediate vicinity of the Facilities under its control to insure that
assigned areas for Brand-identified advertising are maintained and further agrees
that it will prohibit the placement of any and all advertising or promotional
materials of any Beverages that compete with or are the same as or similar to the
Brands at all areas in and around the Facilities.
16. Notwithstanding the provisions of Paragraphs 14 and 15 of this Agreement,the City
reserves the right to honor national sponsorship agreements with soft drink
companies for special events or tournaments conducted at the Facilities.
17. The City represents and warrants to PepsiAmericas that all appropriate approvals
required to enter into this Agreement have been granted and the individual
executing this Agreement on behalf of the City has been duly authorized to enter
into this Agreement on behalf of City. The City also agrees that at no time will it
challenge, contest, disclaim or deny the authority of the individual signing this
Agreement on behalf of City or use as a basis to void, cancel or nullify this
Agreement or claim that the individual signing below was not authorized to sign
this Agreement on behalf of City. Further,the City guarantees and warrants that the
execution, delivery and performance of this Agreement by City will not and does
not violate any agreements with or the rights of third parties.No official,director,
officer, agent or employee of the City shall be charged personally or held
contractually liable under any term or provision of this Agreement or because of
their execution, approval or attempted execution of this Agreement.
18. In all hiring or employment made possible or resulting from this Agreement,there
shall be no discrimination against any employee or applicant for employment
because of sex,age,race,color,creed,national origin,marital status,or the presence
of any sensory, mental or physical handicap, unless based upon a bona fide
occupational qualification, and this requirement shall apply to, but not limited to,
the following; employment advertising,layoff or termination,rates of pay or other
forms of compensation and selection for training, including apprenticeship. No
person shall be denied or subjected to discrimination in receipt of the benefit of any
services or activities made possible by or resulting from this Agreement on grounds
of sex, race, color, creed,national origin, age except minimum age and retirement
provisions, marital status or the presence of any sensory, mental or physical
handicap. Any violation of this provision shall be considered a violation of a
material provision of this Agreement and shall be grounds for cancellation,
termination or suspension, in whole or in part, of the Agreement by the City.
19. As a condition of this contract, PepsiAmericas shall have a written sexual
harassment policies that include, at a minimum, the following information:
A. The illegality of sexual harassment.
B. The definition of sexual harassment under state law.
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C. A description of sexual harassment, utilizing examples.
D. The vendor's internal complaint process including penalties.
E. The legal recourse, investigative and complaint process available through the
Illinois Human Rights Commission.
F. Directions on how to contact the department and commission.
G. Protection against retaliation, as provided to the Department of Human
Rights upon request.
20. This Agreement and each and every portion thereof shall be binding upon the
successors and the assigns of the parties hereto; provided, however, that no
assignment shall be made without the prior written consent of the City.
21. It is understood and agreed that nothing herein contained is intended or shall be
construed to, in any respect, create or establish the relationship of co-partners
between the City and PepsiAmericas or as constituting PepsiAmericas as a general
representative or general agent of the City for any purpose whatsoever.
22. This Agreement shall be deemed to have been made in, and shall be construed in
accordance with the laws of the State of Illinois. Venue for any legal proceedings
shall be in the Circuit Court for the Sixteenth Judicial Circuit,Kane County,Illinois.
23. In the event any of the covenants,agreements,terms or provisions contained in this
Agreement shall be invalid, illegal or unenforceable in any respect, the validity of
the remaining covenants,agreements,terms and provisions contained herein shall
not in any way be affected, prejudiced or disturbed thereby. Any failure by either
party hereto to enforce one or more of the terms or conditions of this Agreement
shall not constitute a waiver of such terms or conditions or of either party's right to
thereafter enforce this Agreement.
24. This Agreement fully expresses the entire understanding of PepsiAmericas and the
City. Any and all understandings are hereby canceled. No future changes in the
terms of this Agreement shall be valid unless reduced to writing and signed by both
PepsiAmericas and the City by their legally authorized officials.
IN WITNESS WHEREOF,the parties have executed this Agreement on the date and
year first above written.
CITY OF ELGIN PEPSIAMERICAS, INC.
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N,ti Agenda Item No.
City of Elgin
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May 17, 2002 �_ ----
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TO: Mayor and Members of the City Council RECREATIONALLEISURE
AND CULTURAL OVP EINIS TIES
FOR ALL CITIZENS
FROM: Olufemi Folarin, Interim City Manager
SUBJECT: PepsiAmericas Beverage Vending Proposal for
The Centre and Outdoor Family Aquatic Centers
PURPOSE
The purpose of this memorandum is to provide the Mayor and members
of the City Council with information regarding a 5-year contract
for beverage vending at The Centre and the two outdoor Family
Aquatic Centers .
tew BACKGROUND
Four firms were solicited to provide information on beverage
service for The Centre and the Wing and Lords Park Family Aquatic
Centers . Several meetings were held with Coca Cola and
PepsiAmericas from April 2001 thru March 2002 . Neither American
Bottling Company that serves the Dr. Pepper/7Up brand nor the RC
Bottlers responded with information to provide service.
At these meetings, options for full-service and self-service
operations were addressed as well as return of marketing dollars
and other support in receipt for an exclusive contract . A full-
service operation provides the vending equipment at no charge and
will have their representative fill the machine with their product .
The City will receive a commission on the machine in addition to
non-cash promotional items; 5 gallon sport coolers, t-shirts,
banners, etc. A self-service operation provides the vending
equipment at no charge and designated City staff will fill the
machine with product purchased from that bottling company. The
City, in turn, will get all the proceeds from product sold in the
vending machines . The City would also receive non-cash promotional
items in addition to marketing dollars .
. . . ,
r°'' Pepsi Cola Beverage Vending Proposal for The Centre and Outdoor
Family Aquatic Centers
May 17, 2002
Page 2 .
Both responsive bottling companies prepared proposals based on the
City' s historical data of sales at both aquatic centers as well as
current, like, facilities that the vendors serve. Within their
proposals they outlined the following: terms of the contract,
product lines, case pricing, non-cash promotional items, available
equipment and the estimated projection of volume sales at the
proposed city facilities . Coca Cola presented a 3-year full-
service only proposal and PepsiAmericas presented a 5-year full and
self-service proposal . (Attachment A shows the details of both
proposals . )
Attachment B outlines the price breakdown between Coca Cola and
PepsiAmericas by the various products . PepsiAmericas has submitted
the most profitable self service option for the City. Furthermore,
the City will service the vending machines, ensuring the machine
will be stocked appropriately to service our customers. Coca Cola
was asked to provide a self service price and declined as they no
longer offer that option.
This annual contract with four consecutive one-year renewable terms
with PepsiAmericas locks in the City' s revenue for marketing cash
dollars and non-cash promotional items . Estimated net sales will
vary annually based on gross sales and product cost . This
agreement does contain a 60-day out clause. At The Centre, this
agreement only addresses vending machines. The Café, Aquatic
Concessions and Banquet operations will be coordinated through the
vendor of those areas . The annual contract period is May 23 , 2002
- May 22, 2003 .
GROUPS/INTERESTED PERSONS CONTACTED
None.
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Pf FINANCIAL IMPACT
Sufficient funds are budgeted and available in the following 2002
accounts to cover the purchase of beverage products cost : 296-5051-
762 . 22-99, Recreation Center Other Merchandise, $2, 452; 296-5013-
762 .22-99, Lords Park Family Aquatic Center Other Merchandise,
$17, 467; 296-5014-762 . 22-99, Wing Park Family Aquatic Center Other
Merchandise, $23 , 438 .
r The anticipated 2002/2003 net annual revenue from beverage sales is
$29, 910 ; $17, 678 from The Centre and $12 , 232 from the Family
Aquatic Centers . Additionally, $26, 000 will be provided in
Pepsi Cola Beverage Vending Proposal for The Centre and Outdoor
Family Aquatic Centers
May 17, 2002
Page 3 .
Marketing Cash dollars over the term of the contract . Expenditures
for the years 2003-2006 will need to be included as part of future
years' budgets.
EGAL IMPACT
WNone.
ALTERNATIVES
1 . Award a contract as recommended to PepsiAmericas .
2 . Not to award the contract and allow staff to purchase at
alternative stores; Sam' s Club, Jewel, etc. and eliminate the
opportunity for marketing cash dollars and non-cash support .
RECOMMENDATIONS
It is recommended that the City Council approve a contract with
Pepsi Cola Bottling Company for The Centre and Wing and Lords Park
Family Aquatic Centers.
Respectful submitted,
Olufemi Fo
Inter' Cit _ - _ .er
LAR
Attachment
r
Pepsi Cola Beverage Vending Proposal for The Centre and Outdoor
Family Aquatic Centers
May 17, 2002
Page 4 .
PROPOSAL DETAIL
COCA COLA PEPSIAMERICAS
Marketing Cash Dollars
2002 $5, 000 $2, 000
2003 $4, 000 $6, 000
2004 $3, 000 $6, 000
2005 $6, 000
2006 $6, 000
TOTAL $12, 000 $26, 000
Commissions
2002 30% of gross or an estimated 30% of gross
$4,195
2003 30% of gross or an estimated 30% of gross
$4,195
2004 30% of gross or an estimated
$4,195 30% of gross
TOTAL 12, 585
Estimated Net Sales The Centre Family Actuatic Centers
2002 N/A $17, 678 $12,232
2003
2004
2005
2006
TOTAL
Non-Cash Support
2002 $1,310 $5, 680
2003 $1, 310 $5, 680
2004 $1, 310 $5, 680
2005 $5, 680
2006 $5, 680
TOTAL $3, 930 $28,400
Pepsi Cola Beverage Vending Proposal for The Centre and Outdoor
ATTACHMENT A
Family Aquatic Centers
May 17, 2002
Page 5 .
2002 PRODUCT COSTS
COCA COLA PEPSIAMERICAS
SODA (20 oz . Bottles) $14 . 00/case $12 . 15/case
SODA (Bag in the Box) $43 . 80/5 gal . $39 . 10/5 gal .
Sport Drink (20 oz . Bottles) $14 . 00/case $12 . 65/case
Water (20 oz . Bottles) $15 . 75/case $7 . 00/case
Juice (11.5 oz cans) $11 . 95/case $12 . 50/case
ATTACHMENT B