HomeMy Public PortalAbout06) 7C Agreements for Vending Services at LOPCity Council
June 17, 2014
Page 2 of 3
ANALYSIS:
For over 15 years the City has allowed, through various vending agreements, vending
machines at Live Oak Park, in both the Community Center and the Annex. Initially the
vending machines provided only beverages. In 2010, staff worked with a local vending
company, McNevin 3 in 1 Vending, Inc. to provide a snack and beverage combination
vending machine in the Annex, primarily for use by the teens involved in the City's Teen
Zone program.
Due to the popularity of the snack/beverage vending machine in the Annex, as well as
requests from park patrons, staff solicited proposals for combination vending machines
for both the Community Center and the Annex in August 2012. A total of three
proposals were received by the deadline with staff recommending, and City Council
approving, an agreement with Premier Vend Group, Inc. for the period from October 1,
2012-June 30, 2014.
In April 2014, staff was contacted by the prior vendor, McNevin 3 in 1 Vending, Inc. as
to the status of the vending services at live Oak Park and whether or not the City would
issue a Request for Proposals (RFP) for vending services this year. Because this type
of service is not covered under the City's purchasing policy, and because a formal RFP
was solicited less than two-years ago, staff decided to rely on the informal bid process
instead of issuing a formal RFP this year. Staff requested proposals from both Premier
Vend Group, Inc. and McNevin 3 in 1 Vending, Inc. Both companies submitted a
proposal for vending services. Premier Vend Group, Inc. is offering 22.5% commission
and McNevin 3 in 1 Vending, Inc. offering 18% commission. Because McNevin 3 in 1
Vending is considered a local vendor under the City's local Vendor Preference
Program (TCMC 2-5-17) their bid is comparable to Premier Vend Group, Inc.
To provide for a greater variety of vending products, and to be supportive of local
businesses, staff is recommending the contracts for vending services at Live Oak Park
be awarded to two vendors as follows:
Live Oak Park Community Center (2 machines)
Live Oak Park Annex (1 machine)
The City Attorney has reviewed the Agreements.
CONCLUSION:
Premier Vend Group, Inc.
McNevin 3 in 1 Vending, Inc.
City Council is requested to review and approve the Vending Machine Agreements for
Premier Vend Group, Inc. and McNevin 3 In 1 Vending, Inc. to provide vending services
at live Oak Park from July 1, 2014-June 30, 2016.
City Council
June 17, 2014
Page 3 of 3
FISCAL IMPACT:
Revenue from vending machines has already been included in the Fiscal Year (FY) 2014-
15 City budget.
ATTACHMENTS:
A. Vending Machine Agreement-Premier Vend Group, Inc.
B. Vending Machine Agreement-McNevin 3 in 1Vending, Inc.
City of Temple City
Vending Machine Agreement
ATTACHMENT A
This agreement is entered into by, and between, the City of Temple City, located at
9701 Las Tunas Drive, Temple City, California, 91780 (hereinafter referred to as
"Proprietor") and Premier Vend Group, Inc (also known as Downey Vendors, Inc.)
(hereinafter referred to as "Operator").
RECITALS
Operator is a proprietor with principal place of business at 6814 Suva St., Gel! Gardens,
California, 90201. Operator is engaged in the business of installing and operating
automatic vending machines at various business locations and of selling articles of food
and beverages to the public through such machines. Proprietor is a municipal
corporation and charter law city and is the owner and operator of a parks and recreation
facility referred to as Live Oak Park, 10144 Bogue Street, Temple City, which includes
the Live Oak Park Community Center (Community Center). Operator desires to install
automatic vending machines on the premises of Proprietor for the sale of food, snacks
and beverages, and Proprietor desires to grant Operator a license for such purposes on
the terms .and conditions contained in this agreement. Operator understands that
Proprietor is entering into this agreement primarily for the purpose of making revenue.
Therefore, in consideration of the mutual covenants and promises contained herein, it is
hereby agreed as follows:
ARTICLE 1.
EXCLUSIVE GRANT
Proprietor hereby grants to Operator the exclusive right and privilege to install, operate
and maintain up to three (3) vending machines which dispense food, snacks and
beverages in the Community Center. Proprietor additionally grants to Operator the
exclusive right and privilege to sell food, snacks and beverages on the aforementioned
premises of proprietor by means of the vending machines installed and operated by
Operator. Proprietor shall not cause or permit the sale of these or similar items by or
through the operation of vending machines by any other person, firm or corporation,
with the exception of food, snacks and/or beverages sold by Proprietor in connection
with City-sponsored programs and/or events held in the Community Center.
ARTICLE 2.
COMPENSATION
Operator shall pay to Proprietor for the exclusive right to sell assorted food, snack and
beverage items on the described premises 22.5% of the Adjusted Gross Receipts from
sales through the vending machines. "Adjusted gross receipts" shall be defined as gross
receipts less federal, state and local sales and excise taxes existing at the time payment
is due, including California Redemption Value (CRV). Payment shall be by check made
payable to "City of Temple City" and shall be mailed to: Mike Koski, Parks & Recreation
Supervisor, 9701 Las Tunas Drive, Temple City, CA 91780; or hand delivered to Mike
Koski, 10144 Bogue Street, Temple City. Payment shall be made, at a minimum, once
every three months (October, January, April, July). Operator shall provide sufficient
documentation to corroborate payment
ARTICLE 3.
INSTALLATION OF MACHINE
Operator shall install the aforementioned machines on the premises of the Proprietor in
such location as is mutually agreeable by the parties. Machine shall not be permanently
mounted or otherwise affixed to Proprietor's property.
ARTICLE 4.
REMOVAL AND REPLACEMENT OF MACHINE
Operator shall have the right to remove the machine installed on the premises of the
Proprietor under this Agreement and to replace it with a vending machine of similar
type, quality and appearance.
ARTICLES.
INCREASE OR DECREASE IN THE NUMBER OF MACHINES
Operator, with prior written approval of Proprietor, shall have the right to increase or
decrease the number of machines installed on the premises of Proprietor to adjust to
changes in demand, sales or economic conditions, provided, however, that at least one
machine shall be provided at all times during the term of this agreement. Proprietor shall
have the right to impose restrictions on the number or placement of machine(s) where
such number or placement would interfere with the normal operation of Proprietor's park
and recreation activities. At no time shall there more than three (3) machines located in
the Community Center (including inside and outdoor patio area).
ARTICLE 6.
TERM
The term of this Agreement shall commence on July 1, 2014 and shall continue through
June 30, 2016.
ARTICLE 7.
OWNERSHIP OF MACHINE
It is understood and agreed by and between the parties that the vending machines
installed on the premises of Proprietor by Operator is and shall remain the property of
Operator. Upon termination of this Agreement by any means, Operator shall remove
said machine from the premises of Proprietor within ten (1 0) days of termination.
ARTICLE 8.
SELECTION AND PRICING
Operator shall keep the machines stocked at all times with sufficient quantities of
assorted food, snack and beverage items to insure continuous service to patrons of
Proprietor. Operator shall have sole control over the selection of the brands of such
items to be offered for sale through the vending machine, and of the prices at which
they are offered for sale, but Operator shall, to the extent possible, seek to offer the
patrons of Proprietor a selection of brands at competitive prices.
ARTICLE 9.
RISK OF DAMAGE TO MACHINE
Except as may be attributable to proprietor by reason of intentional acts or active
negligence of its officers, contractors or employees, Operator assumes risk and
responsibility for any loss, destruction or damage occurring to the vending machine.
Operator reserves the right to seek compensation from Proprietor for losses incurred as
the result of damage to machines due solely to the intentional acts or active negligence
of Proprietor's officers, contractors or employees.
ARTICLE HI.
MAINTENANCE AND SERVICE
Operator shall regularly inspect, service, clean and maintain the vending machines and
shall keep them operating and in good working order at all times, promptly maintaining
them in a clean and sanitary condition in accordance with all applicable federal, state
and local laws. Proprietor shall supply suitable waste disposal containers for the
convenience of users of the vending machines and shall provide and bear the expense
of garbage removal and disposal on a schedule to be determined by Proprietor.
ARTICLE 11.
NOTIFICATION OF MACHINE FAILURE
Proprietor agrees to notify Operator promptly of any failure of the vending machines to
function properly and further agrees to permit only authorized agents of the Operator to
remove, open, or in any way tamper with the machines. Operator agrees to promptly
refund any money lost by patrons and reported in a timely manner to the on-duty staff of
the Community Center.
ARTICLE 12.
UTILITIES
Proprietor shall furnish and bear the cost of all utilities necessary for the operation of the
vending machines installed under this Agreement and shall furnish suitable utility outlet
for use by the machine. Proprietor shall provide continuous service to the machines and
shall not cause or permit the interruption of such service except in the event of
emergency or other service interruptions not under the control of the Proprietor.
ARTICLE 13.
FEES AND TAXES
Operator shall be responsible for and shall pay all state, county and city license fees
and sales or other merchandising taxes that may be imposed on the sales of food,
snack or beverage items through the vending machines. Operator shall procure and
maintain throughout the term of this agreement, a valid business license from the City of
Temple City.
ARTICLE 14.
RELATION OF PARTIES
It is the intention of the parties that Operator be an independent contractor hereunder,
and that no agency or employment relationship be created by this agreement.
ARTICLE 15.
COMPLIANCE WITH lAWS
Each party shall comply with all federal, state, local or other laws or regulations
applicable to the sale of merchandise through vending machines.
ARTICLE 16.
TERMINATION OF AGREEMENT
16.1 If at any time during this Agreement, the Proprietor should determine that the
Operator's service is unsatisfactory, proprietor shall advise Operator by registered mail
and Operator agrees to correct such unsatisfactory condition(s) within 15 days. If
Operator should fail at such corrective action as necessary to return the level of service
to satisfactory within the 15 day period, Proprietor may cancel this Agreement with a 30
day written notice by registered mail.
16.2 If circumstances change significantly that alter the intended economic value of
this Agreement, Operator reserves the right to cancel this Agreement with a 30 day
written notice.
16.3 Notwithstanding any other prov1s1ons of this Agreement to the contrary, this
Agreement may be terminated at any time by either party hereto by a 30 day written
notice.
ARTIClE 11.
ASSIGNMENT
This Agreement shall not be assignable by either party without the prior written consent
of the other party. Subject to the foregoing limitation, this Agreement shall enure to the
benefit of and be binding upon the successors and assigns of the respective parties.
ARTICLE 18.
ENTIRE AGREEMENT
This Agreement constitutes the entire Agreement of the parties with respect to the
subject matter hereof and supersedes any and all agreements, understandings,
statements or representations either oral or in writing.
ARTIClE 19.
ATTORNEYS' FEES
Should any litigation be commenced between the parties hereto or their personal
representative concerning any provisions of these Articles, or rights and duties of any
person in relation thereto, the party or parties prevailing in such litigation shall be
entitled, in addition to such other relief as may be granted, to a reasonable sum as and
for their or his attorneys' fees in such litigation, which shall be determined by the court in
such litigation, or in a separate action brought for that purpose.
ARTICLE 20.
GOVERNING LAW
The validity of this Agreement and of any of its terms or provisions as well as the rights
and duties of the parties hereunder shall be interpreted and construed to and in
accordance with the laws of the State of California.
ARTICLE 21.
INSURANCE REQUIREMENTS
Operator shall provide and maintain insurance acceptable to the City Manager or City
Council, in full force and effect throughout the term of this agreement, against claims for
injuries to persons or damage to property which may arise from or in connection with
this Agreement by Operator, its contractors, representatives or employees. Insurance is
to be placed with insurers with a current AM. Best's rating of no less than A:VII.
Operator shall provide the following scope and limits of insurance:
21.1 Minimum Scope of Insurance. Operator shall maintain professional liability
insurance appropriate to the Operator's profession. This coverage may be written on a
"claims made" basis, and must include coverage for contractual liability. The
professional liability insurance required by this Agreement must be endorsed to be
applicable to claims based upon, arising out of or related to services performed under
this Agreement.
21.2 Minimum limits of Insurance. Operator shall maintain limits of professional liability
insurance no less than $1,000,000 per occurrence.
21.3 Other Provisions. Each insurance policy required by this Agreement shall be
endorsed and state the coverage shall not be suspended, voided, cancelled by the
insurer or either party to this Agreement, reduced in coverage or in limits except after 30
days prior writ!en notice by Certified mail, return receipt requested, has been given to
the City.
21.4 Other requirements. Operator agrees to deposit with City, at or before the
effective date of this contract, certificates of insurance necessary to satisfy City that the
insurance provisions of this contract have been complied with. The City Attorney may
require that Operator furnish City with copies of original endorsements effecting
coverage required by !his Section. The certificates and endorsements are to be signed
by a person authorized by that insurer to bind coverage on its behalf. City reserves the
right to inspect complete, certified copies of all required insurance policies, at any time.
Any deductibles or self-insured retentions must be declared to and approved by City. At
the option of City, either the insurer shall reduce or eliminate such deductibles or self-
insured retentions as respects City or its respective elected or appointed officers,
officials, employees and volunteers or the Operator shall procure a bond guaranteeing
payment of losses and related investigations, claim administration, defense expenses
and claims.
Executed in Temple City, California on the day and year indicated beneath the signature
of each party.
PROPRIETOR
City of Temple City
9701 las Tunas Drive
Temple City, CA 91780
By:
Date:
OPERATOR
Premier Vend Group, Inc.
6814 Suva St.
Bell Gardens, CA 90201
By:&EP_L_
Date: S/zz;jy ( ;
City of Temple City
Vending Machine Agreement
ATTACHMENT B
This agreement is entered into by, and between, the City of Temple City, located at 9701 Las Tunas Drive,
Temple City, California, 91780 (hereinafter referred to as "Proprietor") and McNevin 3 In 1 Vending, Inc.
(hereinafter referred to as "Operator").
RECITALS
Operator is a proprietor with principal place of business at 9420 Daines Dr., Temple City, California,
91780. Operator is engaged in the business of installing and operating automatic vending machines at
various business locations and of selling articles of food and beverages to the public through such
machines. Proprietor is a municipal corporation and charter law city and is the owner and operator of a
parks and recreation facility referred to as Live Oak Park, 10144 Bogue Street, Temple City, which
includes the Live Oak Park Annex/Teen Zone (Annex) located in the northwest corner of Live Oak Park.
Operator desires to install automatic vending machines on the premises of Proprietor for the sale of food,
snacks and beverages, and Proprietor desires to grant Operator a license for such purposes on the terms
and conditions contained in this agreement. Operator understands that Proprietor is entering into this
agreement primarily for the purpose of making revenue.
Therefore, in consideration of the mutual covenants and promises contained herein, it is hereby agreed
as follows:
ARTICLE 1.
EXCLUSIVE GRANT
Proprietor hereby grants to Operator the exclusive right and privilege to install, operate and maintain one
vending machine which dispenses food, snacks and beverages in the Annex. Proprietor additionally
grants to Operator the exclusive right and privilege to sell food, snacks and beverages on the
aforementioned premises of proprietor by means of the vending machine installed and operated by
Operator. Proprietor shall not cause or permit the sale of these or similar items by or through the
operation of vending machines by any other person, firm or corporation, with the exception of food,
snacks and/or beverages sold by Proprietor in connection with City-sponsored programs and/or events
held in the Annex.
ARTICLE 2.
COMPENSATION
Operator shall pay to Proprietor for the exclusive right to sell assorted food, snack and beverage items on
the described premises 18% of the Adjusted Gross Receipts from sales through the vending machines.
"Adjusted gross receipts" shall be defined as gross receipts less federal, state and local sales and excise
taxes existing at the time payment is due, including California Redemption Value (CRV). Payment shall
be by check made payable to "City of Temple City" and shall be mailed to: Mike Koski, Parks &
Recreation Supervisor, 9701 Las Tunas Drive, Temple City, CA 91780; or hand delivered to Mike Koski,
10144 Bogue Street, Temple City. Payment shall be made, at a minimum, once every three months
(October, January, April, July). Operator shall provide sufficient documentation to corroborate payment.
ARTICLE3.
INSTALLATION OF MACHINE
Operator shall install the aforementioned machine on the premises of the Proprietor in such location as is
mutually agreeable by the parties. Machine shall not be permanently mounted or otherwise affixed to
Proprietor's property.
ARTICLE4.
REMOVAl AND REPLACEMENT OF MACHINE
Operator shall have the right to remove the machine installed on the premises of the Proprietor under this
Agreement and to replace it with a vending machine of similar type, quality and appearance.
ARTIClE 5.
INCREASE OR DECREASE IN THE NUMBER OF MACHINES
Operator, wah prior written approval of Proprietor, shall have the right to increase or decrease the number
of machines installed on the premises of Proprietor to adjust to changes in demand, sales or economic
conditions, provided, however, that at least one machine shall be provided at all times during the term of
this agreement. Proprietor shall have the right to impose restrictions on the number or placement of
machine(s) where such number or placement would interfere with the normal operation of Proprietor's
park and recreation activities. At no time shall there more than two (2) machines located in Annex
(including inside and outdoor patio area).
ARTIClE 6.
TERM
The term of this Agreement shall commence on July 1, 2014 and shall continue through June 30, 2016.
ARTICLE 7.
OWNERSHIP OF MACHINE
It is understood and agreed by and between the parties that the vending machine installed on the
premises of Proprietor by Operator is and shall remain the property of Operator. Upon termination of this
Agreement by any means, Operator shall remove said machine from the premises of Proprietor within ten
(1 0) days of termination.
ARTICLES.
SELECTION AND PRICING
Operator shall keep the machines stocked at all times with sufficient quantities of assorted food, snack
and beverage items to insure continuous service to patrons of Proprietor. Operator shall have sole control
over the selection of the brands of such items to be offered for sale through the vending machine, and of
the prices at which they are offered for sale, but Operator shall, to the extent possible, seek to offer the
patrons of Proprietor a selection of brands at competitive prices.
ARTIClE 9.
RISK OF DAMAGE TO MACHINE
Except as may be attributable to proprietor by reason of intentional acts or active negligence of its
officers, contractors or employees, Operator assumes risk and responsibility for any loss, destruction or
damage occurring to the vending machine. Operator reserves the right to seek compensation from
Proprietor for losses incurred as the result of damage to machines due solely to the intentional acts or
active negligence of Proprietor's officers, contractors or employees.
ARTIClE 10.
MAINTENANCE AND SERVICE
Operator shall regularly inspect, service, clean and maintain the vending machine and shall keep it
operating and in good working order at all times, promptly maintaining it in a clean and sanitary condition
in accordance with all applicable federal, state and local laws. Proprietor shall supply suitable waste
disposal containers for the convenience of users of the vending machine and shall provide and bear the
expense of garbage removal and disposal on a schedule to be determined by Proprietor.
ARTICLE 11.
NOTIFICATION OF MACHINE FAILURE
Proprietor agrees to notify Operator promptly of any failure of the vending machine to function properly
and further agrees to permit only authorized agents of the Operator to remove, open, or in any way
tamper with the machine. Operator agrees to promptly refund any money lost by patrons and reported in
a timely manner to the on-duty staff of the Annex.
ARTICLE 12.
UTILITIES
Proprietor shall furnish and bear the cost of all utilities necessary for the operation of the vending machine
installed under this Agreement and shall furnish suitable utility outlet for use by the machine. Proprietor
shall provide continuous service to the machine and shall not cause or permit the interruption of such
service except in the event of emergency or other service interruptions not under the control of the
Proprietor.
ARTICLE 13.
FEES AND TAXES
Operator shall be responsible for and shall pay all state, county and city license fees and sales or other
merchandising taxes that may be imposed on the sales of food, snack or beverage items through the
vending machine. Operator shall procure and maintain throughout the term of this agreement, a valid
business license from the City of Temple City.
ARTICLE 14.
RELATION OF PARTIES
It is the intention of the parties that Operator be an independent contractor hereunder, and that no agency
or employment relationship be created by this agreement.
ARTICLE 15.
COMPLIANCE WITH LAWS
Each party shall comply with all federal, state, local or other laws or regulations applicable to the sale of
merchandise through vending machines.
ARTICLE 16.
TERMINATION OF AGREEMENT
16.1 If at any time during this Agreement, the Proprietor should determine that the Operator's service
is unsatisfactory, proprietor shall advise Operator by registered mail and Operator agrees to correct such
unsatisfactory condition(s) within 15 days. If Operator should fail at such corrective action as necessary to
return the level of service to satisfactory within the 15 day period, Proprietor may cancel this Agreement
with a 30 day written notice by registered mail.
16.2 If circumstances change significantly that alter the intended economic value of this Agreement,
Operator reserves the right to cancel this Agreement with a 30 day written notice.
16.3 Notwithstanding any other provisions of this Agreement to the contrary, this Agreement may be
terminated at any time by either party hereto by a 30 day written notice.
ARTICLE 17.
ASSIGNMENT
This Agreement shall not be assignable by either party without the prior written consent of the other party.
Subject to the foregoing limitation, this Agreement shall enure to the benefit of and be binding upon the
successors and assigns of the respective parties.
ARTICLE 18.
ENTIRE AGREEMENT
This Agreement constitutes the entire Agreement of the parties with respect to the subject matter hereof
and supersedes any and all agreements, understandings, statements or representations either oral or in
writing.
ARTICLE 19.
ATTORNEYS' FEES
Should any litigation be commenced between the parties hereto or their personal representative
concerning any provisions of these Articles, or rights and duties of any person in relation thereto, the party
or parties prevailing in such litigation shall be entitled, in addition to such other relief as may be granted,
to a reasonable sum as and for their or his attorneys' fees in such litigation, which shall be determined by
the court in such litigation, or in a separate action brought for that purpose.
ARTICLE 20.
GOVERNING LAW
The validity of this Agreement and of any of its terms or provisions as well as the rights and duties of the
parties hereunder shall be interpreted and construed to and in accordance with the laws of the State of
California.
ARTICLE 21.
INSURANCE REQUIREMENTS
Operator shall provide and maintain insurance acceptable to the City Manager or City Council, in full force
and effect throughout the term of this agreement, against claims for injuries to persons or damage to
property which may arise from or in connection with this Agreement by Operator, its contractors,
representatives or employees. Insurance is to be placed with insurers with a current A.M. Best's rating of
no less than A:VII. Operator shall provide the following scope and limits of insurance:
21.1 Minimum Scope of Insurance. Operator shall maintain professional liability insurance appropriate
to the Operator's profession. This coverage may be written on a "claims made" basis, and must include
coverage for contractual liability. The professional liability insurance required by this Agreement must be
endorsed to be applicable to claims based upon, arising out of or related to services performed under this
Agreement.
21.2 Minimum limits of Insurance. Operator shall maintain limits of professional liability insurance no
less than $1,000,000 per occurrence.
21.3 Other Provisions. Each insurance policy required by this Agreement shall be endorsed and state
the coverage shall not be suspended, voided, cancelled by the insurer or either party to this Agreement,
reduced in coverage or in limits except after 30 days prior written notice by Certified mail, return receipt
requested, has been given to the City.