Memorandum

City of Lawrence

Parks and Recreation

TO:	David Corliss, City Manager Cynthia Wagner, Assistant City Manager Diane Stoddard, Assistant City Manager
FROM:	Ernie Shaw, Parks and Recreation Director
CC:	Jonathan Douglass Bobbie Walthall
DATE:	November 1, 2013
RE:	Recommendation for Exclusive Beverage Vendor

The Parks & Recreation Department requests the following item be placed on the next available City Commission Agenda.

Project/Item Description.  Parks and Recreation solicited Requests for Proposals from soft drink vendors to serve as exclusive supplier of non-alcoholic beverages for the department.  The winning proposal will encompass beverages in all parks and recreation beverage vending machines and concession stands for a 5-year period beginning January 1, 2014.  The current Beverage Agreement with PepsiCo expires on December 31, 2013.

The concession stand sites include the new recreation center at Rock Chalk Park, Clinton Lake Sports Complexes, Holcom Park Sports Complex, Eagle Bend Golf Course, and the Outdoor Aquatic Center.  There are a minimum of twelve (12) vending machine locations at recreation centers and other locations. 

Support to the department is provided in a number of ways including cash payments, donated goods and services, and commissions and rebates on products sold.  Examples of products include carbonated soft drinks, sports energy drinks and bottled tea and water. 

Overview of RFPs Received

· Coca-Cola Refreshments, Lenexa, KS

o Flat, annual payments of $27,000 for the contract period (5-years)

o Full-service commission at 30% on all vending machines included in annual payment

o Full 5-year contract value:  $135,000 (Coka-Cola)

· PepsiCo, 1775 Kansas City Rd, Olathe, KS, 66061

o Flat, annual payments of $24,000 for the contract period (5-years)

o One-time marketing payment of $4,000

o Rebates on cases sold, totaling an estimated $56,160 over contract period

o Marketing support including brochure advertising, point of sale promotions, gift certificates and program incentives totaling $15,000 over contract period

o Full-service commission at 35% on all vending machines totaling $31,880 over contract period

o Estimated 5-year contract value: $227,040 (PepsiCo)

Action Request.  Authorize the City Manager to sign a 5 years Beverage Agreement with PepsiCo, to be the exclusive supplier of non-alcoholic beverages for the Parks & Recreation Department, beginning January 1, 2014.