137-01 Ordinance RECORD OF ORDINANCES
Form No. 30043
Dayton Legal Blank,lnc.
Ordinance No. 1 "i7-M Passed •
AN ORDINANCE AUTHORIZING THE CITY MANAGER
TO ENTER INTO AN "EXCLUSIVE PRIVILEGE TO
SELL" AGREEMENT WITH THE AMERICAN
BOTTLING COMPANY (7 UP COLUMBUS), AND
DECLARING AN EMERGENCY
WHEREAS, after conducting a competitive "Request for Proposal" (RFP) process
for the "Exclusive Privilege to Sell" soft drinks in City-owned facilities; and,
WHEREAS, Council has determined that accepting the proposal submitted by the
American Bottling Company (7 UP Columbus) would be in the best interest of the
City of Dublin; and
WHEREAS, Council has determined that the City should enter into a five (5) year
Agreement with the American Bottling Company (7 UP Columbus);
NOW, THEREFORE, BE IT ORDAINED by the Council of the City of Dublin,
State of Ohio, of the elected members concurring:
Section 1. That the City Manager is hereby authorized to enter into a five (5)
year "Exclusive Privilege to Sell" agreement with The American Bottling Company
(7 UP Columbus).
Section 2. That this Ordinance is declared to be an emergency measure necessary
~`y' for the immediate preservation of the public peace, health, safety or welfare, and for
the further reason that the present contract expires on December 31, 2001. The
' ordinance shall therefore take effect upon passage.
Passed this / D-~'~. day of ~~~P~~, 2001.
ayor -Presiding Officer
ATTEST:
Clerk of Council
I hereby cc~Ytify that 1+pies of tlfis OrdnancelResolution were posted in f e
City of Dublin in accordance with Section 731.25 of the Ohia Revised Cod
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Division of Human Resources/Procurement
5200 Emerald Parkway • Dublin, Ohio 43017-1006
Phone: 614-410-4407 • Fax: 614-761-2965 M e m o
To: Members of Dublin City Council
From: Timothy C. Hansley, City Manager
Date: November 14, 2001
Re: Ordinance No. 137-01 Authorizing The City Manager to Enter into an "Exclusive Privilege
to Sell" Agreement with the American Bottling Company (7 UP Columbus)
By: David L. Harding, Director of Human Resources/Procurement
Summary & Action Recommended
Attached for your consideration please find Ordinance No. 137-01 authorizing the City Manager
to enter into a five (5) year Agreement with the American Bottling Company (7 UP Columbus)
governing the "Exclusive Privilege to Sell" soft drinks in City-owned facilities beginning January
1, 2002. Also attached for your reference is a comparative spreadsheet reflecting the projected
revenues associated with the three (3) proposals received by Staff. The proposed Agreement
would allow American Bottling Company (7 UP Columbus) the "exclusive privilege to sell" soft
drinks through vending machines located at the following facilities/locations: Dublin Municipal
Building, 5800 Building, Dublin Justice Center, Dublin Community Recreation Center, Dublin
Service Complex, and Darree Fields Park.
As reflected on the attached spreadsheet, the proposal from the American Bottling Company (7
UP Columbus) for a five (5) year Agreement would offer the City the highest annual revenue of
all proposals submitted. (Based upon a vending price of $1.00 per container, the City is projected
to receive estimated annual revenues of $19,725.00 in commissions, $5,000 in incentive
payments, and $3,600 in free product for special events.) In Staff's judgment, accepting the
proposal for a five (5) year Agreement with the American Bottling Company (7 UP Columbus)
would be in the City's best interest; therefore, Staff recommends that City enter into a five (5)
year Agreement with the American Bottling Company (7 UP Columbus).
Background
In 1997, the City entered into its first ever "Exclusive Privilege to Sell" Agreement governing
this type of vending in City-owned facilities. After a competitive RFP process, this first ever
Agreement was awarded, by Ordinance of Council, to the American Bottling Company (7 UP
Columbus) for a term of three (3) years, with the option of extending the Agreement upon mutual
consent of both parties. (This first ever Agreement was a "commission only" Agreement.) Over
the initial three (3) year term, the contractual relationship was financially productive for both
parties and the Agreement was subsequently extended by mutual consent of the parties through
December 31, 2001. Although the contractual relationship between the City and the American
Bottling Company (7 UP Columbus) was financially productive for both parties, Staff felt it
would be advantageous to the City to once again solicit competitive proposals and consequently
initiated the RFP process in June 2001. (The sales volume and consequently the City's revenue
grew steadily during the four-year period between 1997-2001 and Staff sensed that given the
increasingly lucrative potential this Agreement could represent to a private vendor, a new round
of competition could lead to an enhanced commission schedule or other lump-sum inducements
from which the City would benefit.)
Request For Proposal ~RFP) Process
To obtain proposals from interested parties, Staff published an announcement requesting
proposals from those vendors interested in entering into an "Exclusive Privilege to Sell"
arrangement. In addition, Staff mailed its RFP directly to the American Bottling Company (7 UP
Columbus), Pepsi, and Coca-Cola. Staff identified numerous requirements/conditions in its RFP,
which included the following:
• Proposals were required to identify revenues from avolume-based commission structure,
with the option of a lump-sum payment structure, for both a three and five year
timeframe. (Revenues would be based upon the projected annual sales volume, in cases
of product, which was provided to the vendor in the RFP.)
• Locations at which the vendor could place vending machines would initially be limited to
those specifically listed by the City, with the understanding that other outdoor locations
could be added in the future upon mutual consent of both parties.
• Excluded from the scope of the proposed contract would be any temporary or permanent
concession stands. (Concession stands would be excluded in order to avoid competing
with concession operations of Dublin Youth Athletics and the Dublin Soccer League, who
operate out of City-owned concession stands.)
• Excluded from the scope of the proposed contract would be any City-sponsored special
events. (Special events would be excluded in order to avoid infringing upon the desire of
the Community Relations Division to negotiate separate agreements with other potential
~.~m vendors on an event-by-event basis.)
• Commercial advertising would be prohibited within City facilities other than that which
would appear on the vending machines.
• Vendor would promptly stock and service all vending machines without cost to the City.
• Ownership of the machines would remain with the vendor and the vendor would retain all
liability for property damage to the machines while in place at the specified locations. In
addition, vendor would retain liability for all third party claims arising out of the
operation of the machines, as well as for all product liability claims.
Upon the receipt of the proposals from the American Bottling Company (7 UP), Pepsi, and Coca-
Cola, the Staff evaluation committee comprised of David Harding (Director of Human
Resources/Procurement), Michele Hoyle (Director of Fiscal Administration), and Judy Grosz
(Procurement Technician), analyzed the three (3) proposals to determine which proposal was
most beneficial to the City.
Conclusion
In Staff's judgment, the proposal from the American Bottling Company (7 UP Columbus) for a
five (5) year Agreement, at a total projected annual value of $28,325.60, is the proposal most
advantageous to the City. Staff would, therefore, recommend that Council adopt the attached
legislation authorizing the City Manager to enter into a five (5) year Agreement with the
American Bottling Company (7 UP Columbus). Staff would respectfully request that the
attached Ordinance be adopted as an emergency legislation at the December 10, 2001 Council
Meeting in order that the new Agreement can begin January 1, 2002. Without the emergency
status, there would be a 30-day referendum period. (The existing contract expires December 31,
2001.)
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