Item Coversheet

C.1.


Shakopee City Council
AprilĀ 4, 2017


FROM:Jamie Polley
TO:Mayor and Council Members
Subject:
Recreation Facilities Vending Contract
Policy/Action Requested:
Authorize the appropriate staff to enter into a contact with Royal Vending for vending services within the recreation facilities.
Recommendation:

Staff has reviewed the requests for proposals submitted and recommends Royal Vending.

Discussion:
Current Vending Agreements

In 2012, the City entered into agreements with Royal Vending for beverage and snack vending at the Community Center, Ice Arena and Aquatic Park.The agreement with Royal Vending ran for three years. City Council extended the vending agreements for one additional year in 2015 and 2016 due to the construction project at the Community Center.

 

The agreement with Royal Vending specified a commission rate of 25% on beverage items and 20% of snack items. 

 

Proposals

We issued Request for Proposals (RFP) to 8 vending service providers. The RFP requested that proposals provide the following information:

 

1.  Percentage commission amounts for a variety of products.

2.  Wholesale beverage costs for the concession stands at the Aquatic Park, Tahpah Park, 17th Avenue Sports Complex, & Schleper Stadium.

3.  Annual product donation for recreation programs and special events.

4.  Custom wrapped machines in the Community Center and Ice Arena.

5.  An annual financial payment amount in addition to commissions.

 

The proposal specified that the new agreement would be for two years, with an option to renew for one additional year. Service would be provided at the Community Center, Ice Arena, Aquatic Park, 17th Avenue Sports Complex, Tahpah Park, Schleper Stadium, and Huber Park, and an option of providing machines at other parks, should such service be desired.

 

Two companies submitted proposals: Midwest Vending and Royal Vending. Both companies were very comparable and both offered a 20% commission rate on beverage and snack items. Both companies agreed to custom wrap the machines and provide 100 cases of canned soda to department events.

 

 

 

Based on the proposals, the company that appears to provide the best overall service, while providing a consistent revenue source (commission plus annual financial payment), would be Royal Vending. Royal Vending has proposed slightly lower pricing on vending items and wholesale purchases. Also, since the city has had Royal Vending for the past five years, in lieu of putting new custom wraps on all of the machines (new machines will get new wraps) Royal Vending will provide an annual payment of $500 towards the parks and recreation scholarship program. 

 

Staff has also been very satisfied with the service provided by Royal Vending over the past five years.

Budget Impact:
Vending services in the recreation facilities is a revenue generator. The city receives a 20% commission rate on all beverage and  snack products. The vending contact also provides the Parks and Recreation Department with 100 free cases of beverages for programs and special events. Total vending revenue for the most recent calendar year (2016) was $18,269.35.