CITY COUNCIL COMMUNICATION: 02-150 AGENDA: MARCH 18, 2002 SUBJECT: AGREEMENT FOR A SINGLE SOFT DRINK BEVERAGE PROVIDER TYPE: RESOLUTION ORDINANCE RECEIVE/FILE SUBMITTED BY: DONALD M. TRIPP PARK AND RECREATION DIRECTOR

ITEM _____ OFFICE OF THE CITY MANAGER CITY OF DES MOINES, IOWA SYNOPSIS - To approve an agreement for a single soft drink beverage provider between the City of Des Moines Park and Recreation Department and Pepsi Americas. FISCAL IMPACT - Assuming historical sales volume, the total value of the five-year Pepsi proposal is $998,802 in net revenue to the City of Des Moines. Sponsorship and Support $ 182,500 Non-Cash Support 5,000 Commission on Vending Machines 88,725 Concession/Fountain Sales Net Revenue 722,577 In addition, Pepsi has agreed to provide equipment for concession areas and scoreboards valued at $125,000 and $23,500 respectively. A comparison of the two proposals is attached. RECOMMENDATION - Recommend approval and authorize the Mayor to sign an agreement with Pepsi Americas for a single soft drink beverage agreement for a five-year term. BACKGROUND - City Council approved the Request for Proposals (RFP) for a single soft drink beverage provider by Resolution No. 02-043 on January 28, 2002. The Purchasing Division solicited bids by advertisement and mailing, Invitation to Bid V02-105, to three potential bidders with two bids received. A selection committee evaluated the proposals according to RFP evaluation criteria, and City Finance staff provided a financial analysis of the proposals. Both documents are attached. In summary, the composite score of six evaluators rated: Pepsi 87.5 total points Coke 43.7 total points The financial analysis resulted in a comparison of the five-year bids including a commission on vending machines and concession/fountain sales net revenue as follows:   5-Year Pepsi 5-Year Coke Sponsorship and Support $ 182,500 $ 57,500 Non-Cash Support 5,000 0 Commission on Vending Machines 88,725 45,630 Concession/Fountain Sales Net Revenue 722,577 691,681 TOTAL $ 998,802 $ 794,811 Pepsi Americas met the requirements to be recognized as the City of Des Moines' "Soft Drink Partner in Parks." Mid-Atlantic Co. did not meet the minimum stated requirement of $25,000 per year of sponsorship and support funds. Pepsi will have soft drink beverage rights at all events presented within City of Des Moines Park and Recreation Department facilities. Pepsi will be recognized as an affiliate sponsor of Nitefall on the River, Country on the River, Music Under the Stars, and Showmotion Arts Outreach Program in print promotion. The Agreement will begin March 19, 2002, to coincide with the ending date of the current agreement with Pepsi. This will allow a transition to a new Agreement period without interruption of service to customers. Attachments ***************************************** COMPOSITE SCORE OF SIX EVALUATORS Name of Company Combination Product Pricing/ Sponsorship Package (50 points) Service (25 points) Creative Approach to Facility & Event Sponsorship Dollars (20 points) Market Share - Local, Regional, National (5 points) TOTAL POINTS Pepsi Americas 45 25 12.5 5 87.5 Mid Atlantic Company 22.5 13.3 6.6 1.3 43.7 ***************************************** Comparison of Single Soft Drink Beverage Provider Proposals as submitted by Atlantic Coca Cola Bottling Company and Pepsi Americas Total Contract Estimate (Five Year Bid) 5 Yr Pepsi Proposal 5 Yr Coke Proposal Sponsorships & Support $ 182,500 $ 57,500 Non-Cash Support $ 5,000 $ - Commission on Vending Machines $ 88,725 $ 45,630 Concession/Fountain Sales Net Revenue $ 722,577 $ 691,681   Annual Sponsorships & Support   Pepsi Proposal Coke Proposal Golf Course Tournaments $10,500 $10,500 Blank Park Zoo 1,000 1,000 Softdrink Partner in Parks 25,000 (see note 1)   $36,500 $11,500   Non-Cash Support:     Media - radio $ 6,000 $ - Free Product 1,000 - Scoreboards 23,500 23,500 (2) Equipment (see note 3 below)   Request City provide Admissions/passes (6,000) -   $ 24,500 $ 23,500   Notes: (1) Atlantic Coca Cola sumitted an option proposing a higher proportion of 12oz can vendors, and would contribute an additional $5,000 in support annually. The Parks Department preference/selection is 20oz bottle vendors, as stated in the RFP. (2) The Atlantic Coca Cola Bottling bid included a proposal to provide 5 electronic scoreboards to specification; PepsiAmericas included a cash payment for 5 scoreboards --both deemed equivalent in value. (3) Both vendors submitted bids to provide an equivalent undetermined value of equipment, such as, ice makers, coolers, umbrellas, wall clocks, menu boards, and other promotional items.   Annual Commission on Vending Machines   Quantity Units Pepsi Proposal Coke Proposal Pepsi Proposal Coke Proposal Commission on 20 oz / sold for $1.00 2,535 cases $7.00 $3.60 $17,745 $9,126   Annual Concession/Fountain Products Revenues and Expenses   Quantity Units Pepsi Proposal Coke Proposal Pepsi Proposal Coke Proposal Estimated Revenue From Sales $175,243 $175,243   Fountain Product Expenses:             Premix 2,152 gal 2.25 2.80 $4,842 $6,026 Postmix 254 gal 7.00 10.00 1,778 2,540 Packaged Items             20oz Carbonated Drinks (24/case) 806 cases 14.00 14.50 11,281 11,683 Sports Drink 147 cases 14.00 16.50 2,051 2,417 Bottled Water 147 cases 14.00 16.50 2,051 2,417 12oz Carbonated Drinks (24/case) 366 cases 7.50 6.80 2,747 2,491 Cups - 16oz 141 cases 30.00 32.55 4,216 4,574 Lids 141 cases 12.50 33.75 1,763 4,759 $30,728 $36,907   Fountain Products Net Revenue $144,515 $138,336   Note: Estimates used for comparison based upon volume provided in request for proposal and past experience, actual may vary.