Item Coversheet

New Business and Commission Requests - R9  Y




COMMISSION MEMORANDUM

TO:Honorable Mayor and Members of the City Commission 
FROM:Jimmy L. Morales, City Manager 
DATE:May  17, 2017
 



SUBJECT:AN UPDATE REGARDING THE HEALTHY SNACKS VENDING PROGRAM REGARDING THE CONCESSION AGREEMENT BETWEEN THE CITY AND BETTOLI TRADING CORP. (CONCESSIONAIRE), DATED MAY 3, 2012 (CONCESSION AGREEMENT), FOR OPERATION OF SNACK MACHINE CONCESSIONS AT VARIOUS LOCATIONS ON CITY PROPERTIES.

RECOMMENDATION

BACKGROUND

The City of Miami Beach (City) and Bettoli Trading Corp. (Concessionaire) are parties to a concession agreement, dated May 3, 2012, for operation of snack machine concessions at various locations on City of Miami Beach properties (Agreement).  The initial term was for five (5) years commencing May 1, 2012 and ending April 30, 2017.  The City extended the term for one (1) year commencing May 1, 2017 and ending April 30, 2018.   The City may extend the term for four (4) additional one (1) year periods.

ANALYSIS

Under the terms of the Agreement, the snack options offered by Concessionaire shall generally include healthy snacks such as whole grain chips, multigrain chips, vegetable chips, crackers, nuts, reduced fat popcorn, baked or popped chips, sugar free chewing gum, fruit trail mix, nutrition bars, granola bars, trail bars, fresh fruits and yogurt.

 

Subsequent to the commencement of the Agreement, the Administration worked with Concessionaire to develop a specific standard to determine healthy snacks.  The Administration considered three (3) existing standards which include 1) Fit Pick, 2) United State Department of Agriculture (USDA) and 3) Miami-Dade County Public Schools (MDCPS).  The Fit Pick standard was selected and all snack machines located in the City’s parks and youth centers were required to provide at least fifty percent (50%) Fit Pick items.  Snack machines located in “public” locations (i.e. parking garages, office buildings, etc.) provided certain Fit Pick items in an amount less than fifty percent (50%).  All Fit Pick items were clearly identified in the machines with stickers to alert the customer.

 

Due to concerns from residents, the Administration was directed to re-evaluate the healthy standard matter.  The Administration presented the three (3) standards referenced above at the October 19, 2016 City Commission meeting.  The City Commission directed the Administration to implement the MDCPS standards, as contained on Exhibit A (MDCPS Healthy Snacks), for one hundred percent (100%) of the snack selections in the vending machines located in parks and youth centers; to implement the MDCPS standards for fifty percent (50%) of the snack selections in the vending machines located in other City structures, such as garages and office buildings; to reduce the annual Minimum Guarantee payment which Concessionaire pays under the Concession Agreement from $12,731 to $11,000 annually; and to revisit the item again in 6 months.

 

For contract year 2015/16, prior to implementing the MDCPS standard, the gross sales for snack machines were approximately $63,250.  Since implementing the MDCPS standard, for the six (6) month period from November 1, 2016 to April 30, 2017, the actual sales were $20,335.  The Concessionaire expects a larger decrease in sales during the next six (6) month period from May 1, 2017 to October 31, 2017 due to summer and projects the total sales for the first twelve (12) month period of implementing the MDCPS standard to be approximately $35,000.  Since the City receives twenty percent (20%) of Concessionaire’s gross sales, the decrease from $63,250 to $35,000 amounts to approximately $5,650 less revenue to the City.

Legislative Tracking
Tourism, Culture and Economic Development
Sponsor
Commissioner Micky Steinberg

ATTACHMENTS:
Description
Exhibit A - MDCPS Healthy Snacks