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HomeMy WebLinkAbout2001-023RESOLUTION NO. 2001-23 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AUTHORIZING THE MAYOR TO EXECUTE AN AGREEMENT WITH BCI COCA-COLA BOTTLING COMPANY OF LOS ANGELES, DOING BUSINESS AS THE COCA-COLA BOTTLING COMPANY, FOR THE PURPOSE OF ESTABLISHING A PUBLIC PRIVATE PARTNERSHIP. BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS: SECTION 1. The Mayor and Common Council of the City of San Bernardino is hereby authorized and directed to execute on behalf of said City an agreement with Coca- Cola Bottling Company, a copy of which is attached hereto, marked Exhibit "A" and incorporated herein by reference as fully as though set forth at lengtiI. SECTION 2. This resolution is rescinded if the parties to tiIe Agreement fail to execute it within sixty days of the passage of this resolution. III III III III III III III III 23 III 24 III 25 26 27 III 28 III . " 2001-23 1 2 3 4 5 6 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY, OF SAN BERNARDINO AUTHORIZING THE MAYOR TO EXECUTE AN AGREEMENT WITH BCI COCA-COLA BOTTLING COMPANY OF LOS ANGELES, DOING BUSINESS AS THE COCA-COLA BOTTLING COMPANY, FOR THE PURPOSE OF ESTABLISHING A PUBLIC PRIVATE PARTNERSHIP. I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor Joint and Common Council of the City of San Bernardino at a Regular meeting tl1ereof, held on the 7 22nd day of January, 2001, by the following vote, to wit: 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Council Members: AYES NAYS ABSTAIN ABSENT x ESTRADA x LIEN x MCGINNIS x SCHNETZ SUAREZ x ANDERSON ---.lL- x MCCAMMACK ~h.~ Cit lerk The foregoing resolution is hereby approved this 25 th day of January 2001. ~~ 23 24 Approyed as to Form and legal content: 25 26 Esther Estrada Mayor Pro Tern JAMES F. PENMAN, City A orney 27 By: a;YJAf';l"7. ;L?7L.&.... (j 28 2001-23 Exhibit A LONG TERM PARTNERSHIP AGREEMENT BETWEEN THE CITY OF SAN BERNARDINO AND BCI COCA-COLA BOTTLING COMPANY OF LOS ANGELES DOING BUSINESS AS THE COCA-COLA BOTTLING COMPANY THIS AGREEMENT entered into this 22nd day of January ,2001, by and between BCI COCA-COLA BOTTLING COMPANY OF LOS ANGELES DOING BUSINESS AS the COCA-COLA BOTTLING COMPANY of Southern California, a Delaware Corporation ("COMPANY") and the CITY OF SAN BERNARDINO ("CITY"). WITNESSETH: WHEREAS, CITY owns, operates or is responsible for libraries, police and fire stations, and other facilities such as sports and recreation facilities, parking lots, bus shelters and city events; and WHEREAS, COMPANY wishes to establish a strategic alliance and long-term partnership with CITY for funding of amenities, security, and improvements, and the promotion and sale of COMPANY'S beverage products. NOW, THEREFORE, the parties hereto agree as follows: Section 1. General Scope of Services. The City shall grant to Coca-Cola the exclusive beverage sales and vending rights at all City locations as these may be defined in this Agreement. In consideration for the exclusive beverage sales and vending rights to the City, Coca-Cola shall provide, install, I 2001-23 and maintain all equipment necessary to facilitate the continued sale of beverage products, and shall pay commissions as set forth herein. Section 2. Territorv/Catel!orv Exclusivity. City grants to Company the right of "Territory Exclusivity," for non-alcoholic beverage rights subject to the limitations set forth herein. For the purposes of this Agreement, "Territory Exclusivity" is defined as exclusivity as to all properties owned by City and within the City limits, including City parks & recreation facilities, City offices, other public and municipal facilities. City grants to Company the right of "Category Exclusivity," subject to the limitations set forth herein. For the purposes of this Agreement, "Category Exclusivity" is defined as insuring that Company is the only company provided exclusivity with respect to all carbonated and non-carbonated, non-alcoholic beverages of any kind, including without limitation soft drinks, juices, juice drinks, teas, isotonics, water and frozen beverages. Section 3. Al!reement Monitorinl! Company designates the Coca-Cola Los Angeles Southern California Rancho Cucamonga Office shall represent it and be its sole contact and agent in all consultations with City during the performance and implementation of this Agreement throughout the entire term of the Agreement. Company also designates the Coca-Cola Los Angeles Southern California Rancho Cucamonga Office will be available to answer all questions regarding maintenance and repairs and who will visit the City of San Bernardino on a monthly basis. The Rancho Cucamonga Office will supervise the delivery and service 2 2001-23 personnel assigned to the City and will be responsible for maintaining all vending machines in an aesthetically pleasing and operable condition. City hereby designates the City Administrator of San Bernardino, or his/her designee, who shall represent it and be its sole contact and agent in all consultations with Company during the performance and implementation of this Agreement tiIroughout tiIe entire term of the Agreement. Section 4. Term. The term of this Agreement shall be for 10 years unless sooner terminated as herein provided. The term shall commence upon placement of all vending machines and equipment within the City. All vending machines and equipment shall be delivered, installed, and operational within forty five (45) days from the execution of this Agreement. Section 5. Points of Sale. City shall make its best effort to proyide Company with the following points of sale for its beverage products: · All designated vending locations by City, with a minimum of ninety (90) vending locations throughout the Term; a). Vending machine locations: Company shall have access to all vending machine locations designated by City. WitiI regard to vending machine locations, Company will provide the power hook-up of electrical utility to all vending machine locations (at a cost not to exceed $300), which do not already have available electrical hookup. Company shall have tiIe responsibility to connect the vending machines to the stub-out sites and City shall pay for any electrical/utility charges incurred for tiIe operation of the vending machines. Vending machines will be installed by Company at no cost to the City. Company will provide one Powerade Parks & Recreation Athletic Kit, with a retail value of$500.00, for every Powerade vending machine (sport drinks) placed (while supplies last). Company will provide 100 free cases of 12 oz. cans on a yearly basis to City. 3 2001-23 Company will also provide one recycling barrel for every pair of vending machines placed. b). City Locations: During tlIe term of this Agreement, Company shall have tlIe exclusive right to sell beverages at City locations excluding those locations where the City is currently under contract witlI a third party for the supply of beverages. No other third party agreements shall be entered into during the Term of this Agreement. Upon expiration of any such third party agreement, the City shall include those locations and/or facilities as part of the locations for purposes of this Agreement. c) Exclusivity exclusions: This exclusive right to sell beverages at City locations shall not include the right to sell such beverages at events, which are not solely sponsored by the City. NotwitlIstanding the language in this section or this Agreement, regardless of sponsorship this exclusion specifically applies to the Route 66 Rendezvous. Section 6. Friends of the Park Proeram Coca- Cola will implement a "Friends ofthe Park Program", under which Coca- Cola will, at minimum, and subject to prior approval by the City, improve one (I) park per year by replacing basketball backboards. Section 7. Annual Commission. In consideration of the rights and privileges provided to Company under this Agreement, Company agrees to pay City guaranteed annual commission of $40.000. paid in quarterly payments of$IO,OOO, for the first two (2) years of this Agreement. The guaranteed payments shall commence the first qmuter after all vending machines are in place, as provided in Section 2. Coca-Cola will pay the remaining amount of earned commissions "Other Commission" at the end of the quarter based upon actual sales. Commencing in the third year, and continuing through the remainder oftlIis agreement, Coca-Cola agrees to pay to the City upon the beginning of each quarter one half of the estimated commissions ("Up Front Commission"). Additionally, Coca-Cola will continue 4 2001-23 to pay the remaining amount of "Other Commission" at the end of the quarter based upon actual sales. Total commission to the City is set at 40% of actual sales, net of taxes and CRV. Company estimates that City's commission will total $744,768 over the term of this agreement, as set forth in the formula provided in attachment A, which is incorporated herein in its entirety by reference. Company will take out CRV and sales tax before tlIe commission is calculated. The commissions specified in this Section shall be paid by Company to tlIe City Treasurer at 300 North 'D' Street, San Bernardino, CA. 92418-0001 or at such otlIer place or places as City may from time to time designate by written notice delivered to Company. The quarterly guaranteed payments for the first two years of this agreement and "Up Front Commission" for the remaining eight years of this agreement shall be due on December 15, March 15, June 15, and September 15 of each year until the agreement term is completed. "Other Commission" payments shall be calculated and due at the end of each quarter. Quarterly growt\1 incentive payments shall be due on January 30, April 30, July 31, and October 31 of each year until this agreement is fully executed. Commission payments are calculated as set forth in the formula provided in Attachment A; which is incorporated herein in its entirety by reference. Section 8. Financial Statements On or before the 25th day of each calendar month during the term hereof, commencing upon execution of this agreement, and extending through the remainder of this agreement, Coca-Cola shall submit to the City at the place where payments are to be 5 2001-23 made under tiIis Agreement, a written statement, on a form approved by the City and subscribed and certified to by Coca-Cola, showing an itemization of gross beverage and vending sales for the preceding calendar month, together with a certified statement as to all items of inventory. Coca-Cola agrees to permit the City and its agents and representatives at reasonable intervals at any and all times upon reasonable advance notice during Coca-Cola's usual business hours, to inspect all books, records and accounts for the gross sales and inventories provided to City locations. Section 9. Maintenance ofvendine machines and other eQuiument. Company agrees to maintain its vending machines, signs and other equipment installed and/or operated pursuant to this Agreement in good order and repair at Company's own cost and expense during the entire term of this Agreement. Company shall perform at its own cost and expense (within 48 hour response time) any required maintenance and repairs, and should Company fail, neglect or refuse to do so, City shall have the right to perform such maintenance or repairs for Company, and Company agrees to promptly reimburse City for the cost thereof, provided, however, that City shall first give Company seven (7) days written notice of its intention to perform such maintenance or repairs for Company for the purpose of enabling Company to proceed with such maintenance or repairs at its own expense. City shall not be obligated to make any repairs to, nor maintain, any vending machines, signs or other equipment installed and/or operated by Company pursuant to this Agreement. City will assist the Company in expediting the required permit and inspection process that may be necessary for installation of the yending machines. Company agrees that vending machines shall be specially designed for outdoor service, and are vandal resistant. Company agrees to re- 6 2001-23 stock vending machines as often as needed and to adjust route service as necessary during peak business periods. Company agrees to remove any graffiti on vending machines on a weekly basis. City shall be responsible for any damage to machines directly caused by its employees or contractors. Section 10. Insurance. While not restricting nor limiting the foregoing, during fue term of this Agreement, Company shall maintain in effect policies of comprehensive public, general and automobile liability insurance, in the amount of$I,OOO,OOO.OO combined single limit, and statutory Worker's compensation coverage, and shall file copies of said policies with the City's Risk Manager prior to undertaking any work under fuis Agreement. City shall be set forth as an additional named insured in each policy of insurance provided hereunder. The Certificate of Insurance furnished to the City shall require the insurer to notify City of any change or termination in the policy. Section 11. Indemnitv. Company shall indemnify, defend and hold harmless the City, its officers, employees and agents (including, without limitation, reasonable costs of defense and reasonable attorney's fees) arising out of or related to Company's negligence in its performance of this Agreement, except that such duty to indemnify, defend and hold harmless shall not apply where injury to person or property is caused by City's willful misconduct or negligence. The costs, salary and expenses ofthe City Attorney and members of his office in enforcing this Agreement on behalf of City shall be considered as "attorney's fees" for the purposes ofthis paragraph. 7 2001-23 Section 12. No emplovment. Company shall perform work tasks provided by iliis Agreement; but for all intents and purposes, Company shall be an independent contractor and not an agent or employee ofilie City. Company shall not receiye any salary, bonuses, nor employment benefits from the City. Section 13. Termination Provisions. A) The term of this Agreement shall be for ten (10) years, from the date above. B) Any time after ninety (90) days following the execution of this Agreement, this Agreement may be terminated without cause upon ninety (90) days written notice by either Company or City. C) In the event Company or any employee of Company breaches this Agreement, City shall have the right to terminate this Agreement immediately upon written notice to Company. City shall have no obligation to pay any costs to Company (i.e. removal of equipment). Termination of this Agreement by City shall not limit any oilier right or remedy which City may have under this Agreement, at law or in equity. D) In the event of any early termination of this Agreement by ilie CITY, CITY shall pay to COMPANY all pre-paid but unearned commissions or Up-Front commissions. Commissions shall be earned based on formula set out in section 7 above. Unearned or Up-Front Commissions shall be returned to Company within 30 days of City receiving final financial statement from Company, as provided in Section 8 herein. Section 14. Removal ofvendine machines and other equipment and loss of riehts after termination. Within ninety (90) days after this Agreement is terminated for any 8 2001-23 reason, Company shall remove all vending machines, and other equipment or signs that Company installed and/or operated pursuant to this Agreement, if City so desires, except as expressly excepted by City in writing. If Company fails to remove the above vending machines, signs, and equipment within this ninety (90) day period, City may: (a) Continue this Agreement in effect, in which event City shall be entitled to enforce all of its rights and remedies under this Agreement, including the right to recover the annual fee specified in this Agreement; or (b) Remove the above vending machines, signs and equipment at Company's sole cost and expense and recover any amount necessary to compensate City for all detriment proximately caused by Company's failure to perform its obligations under this Agreement. In addition, all rights granted to Company under this Agreement including, but not limited to, Territory Exclusivity, Category Exclusivity, rights to conduct sampling activities within the city limits of San Bernardino, and rights to participate in City events, shall cease upon the termination of this Agreement. Company agrees that immediately after termination of tiIis Agreement, City shall have tiIe right, and Company waives any claims against City, to enter into another similar type contract with a competitor of Company. Section 15. Entire Aereement /Amendment. This Agreement comprises the entire agreement of and between tiIe parties witiI respect to the subject matter hereof. This Agreement may be amended or supplemented only by written agreement of City and Company. Section 16. Waiver of Breach. Any failure of Company and City to comply with any provision of this Agreement may be expressly waived in writing, but such waiver shall not be construed as a waiver of or an estoppel with respect to any subsequent or other breach. 9 2001-23 Section 17. Assienment: Successors and Assiens. Company shall have no right to assign, sell, transfer or delegate, whether involuntary or by operation of law, any right or obligation under this Agreement without tl1e prior written consent of City. Any purported assignment, transfer or delegation in violation ofthis section shall be null and void. Subject to the foregoing limits on assignment and delegation, this Agreement shall be binding and shall insure the benefits of the parties and their respective successors and assigns. Section 18. Controlline Law. The validity, interpretation, and performance of this Agreement shall be controlled by and construed under the laws of the State of California. Section 19. Notices. Any notice to be given pursuant to this Agreement shall be deposited with the United States Postal Services, postage prepaid and addressed as follows: 10 " 2001-23 TO THE CITY: City Administrator's Office 300 North "D" Street San Bernardino, CA 92418 Facsimile (909) 384-5 \38 TO THE COMPANY: Coca-Cola Bottling Company 10607 Sixth Street Rancho Cucamonga, CA. 91730 Facsimile (909) 476-1628 Notice may also be given by facsimile ("fax") during regular business hours to the numbers listed above, and such notice shall be deemed given upon receipt as reflected in a transmission verification. Nothing in this paragraph shall be construed to prevent the giving of notice by personal service. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and date first above written. Date: January 22, ,2001 BCI Coca-Cola Bottling of Los Angeles, Doing Business as the Coca-Cola Bottling Company of South;:.rn~ia By: r ~ City of San Bernardino B~~~~ Date: --:Sf'-NV""'''"t -:?t ) ,-",c \ Date: January 25, 2001 ATTEST: (J,~b.~ Rach~1 Clark, City Clerk Approve As To Form And Legal Content: James F. Penman, City Attorney By: ~/V~ ? ~ (j 11 2001-23 Attachment A COMMISSION BREAKDOWN FOR THE CITY OF SAN BERNARDINO Vend Rate- 2002. $1.00 x 24 Bottles $24.00 7.75% Tax -$ 1.86 CRV -$ .60 $21.54 Commission @ x40% Profit 1 case = $8.62 Net Profit to City Per Case Estimated Commissions: 1. At 8 Cases per month = $68.96 x 12 mo. = $827.52 x 90 vendors = $ 74,476.80 Potential Commissions per year 10 YEARS = $744,768.00 Potential Comm. @ 8 Cases per vendor per month. 2. At 12 Cases mo. = $103.44 x 12 mo. = $1241.28 x 90 vendors = $111,715.20 Potential Commissions per year 10 YEARS = $1,117,152.00 Potential Comm. @ 12 Cases per vendor per month. 3. At 15 Cases mo. = $129.30 x 12 mo. = $1,551.60 x 90 vendors = $139,644.00 Potential Commissions per year 10 YEARS = $1,396,449.00 Potential Comm. @ 15 Cases per vendor per month.