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HomeMy WebLinkAboutMinutes - December 7, 1999 SS256 CITY OF LODI INFORMAL INFORMATIONAL MEETING "SHIRTSLEEVE" SESSION CARNEGIE FORUM 305 WEST PINE STREET TUESDAY, DECEMBER 7, 1999 An Informal Informational Meeting ("Shirtsleeve" Session) of the Lodi City Council was held Tuesday, December 7, 1999 commencing at 7:00 a.m. ROLL CALL Present: Council Members — Hitchcock, Land, Nakanishi, Pennino and Mann (Mayor) Absent: Council Members — None Also Present: City Manager Flynn, Deputy City Manager Keeter, Fire Chief Kenley, Parks and Recreation Director Williamson, City Attorney Hays and City Clerk Reimche Also in attendance was a representative from the Lodi News Sentinel and The Record. TOPIC(S) 1. Concessions Exclusives — Presentation by DD Marketing 2. Automatic Aid with Mokelumne Rural Fire District 3. Joint Use Agreement with Lodi Unified School District (LUSD) ADJOURNMENT No action was taken by the City Council. The meeting was adjourned at approximately 8:37 a.m. ATTEST: AAceZURelchrrf e� City Clerk Executive Summary City of Lodi About DD Marketing... DD Marketing is the premier exclusive beverage consultant in the country: • Entire division of DDM staff is exclusively working with beverage agreements • Negotiated public and private sector contracts • Skilled staff pertaining to guiding a public process • A major beverage company referred to recent DD Marketing's Requcst for Proposal (RFP) as "the most extensive and best prepared RFP that they had ever seen. " Services We Provide... DD Marketing coordinates the turnkey process that enables all key members of the public entity to provide input on the objectives of a beverage contracL Included in this process are the following DD Markedng responsibilities: • Assist in the coordination of a team that will oversee and provide feedback on the entire process • Analyze and collect data on current city wide beverage arrangements • Develop (with team input) and distribute a Request of Proposal (RFP) to the beverage community • Work with the city to establish and train a panel thit will evaluate responses generated by the RFP • Lead negotiations with the RFP respondents to ensure the best possible contract • Assist in the creation of the contract document that will be signed by the successful vendor • Assist personnel with the contract approval process • Coordinate public relations to ensure successful start-up of the program • Audit and manage the program to ensure contract adherence and keep abreast of opportunities to continue to maximize program revenue Results You Will Realize... • Creation of revenue stream that is currently not being realized by the city - initial review estimates 5300,000 annually (conservative) can be generated with an exclusive program • Audit and program administration expenses set at a flat rate with total revenue cap DDM fee calculated on 25% of program revenue not to exceed $100,000 annually. As program grows and is maximized by DDN fs expertise, the fee is capped City buildings and property have a tremendous opporhmity to generate revenue due to the city traffic that frequents the sites. • The contract organizes the vending revenues generated by machine by product line making distribution of revenue much more accurate and justified • Typically, individual sites and/or employees have had some responsibility with pre-existing vending arrangements; our program centralizes these responsibilities to create and efficient and effective program and relieve staff. OF �-,00' X91 FI jt' rr� , CITY OF LODI 1-4 FIRE DEPARTMENT R2. MEMORANDUM DATE: November 30, 1999 TO: H. Dixon Flynn, City Manager FROM: Scott W. Kenley, Fire Chief SUBJECT: Automatic Aid with Mokelumne Rural Fire District I have received a request from the Chairman of the Mokelumne Rural Fire District, Mike Young, for coverage of medical aid calls in the extreme north/west end of their district. This request is the result of an inability to occasionally staff the district's station one on Victor Road due to a decrease in full-time and volunteer firefighters. The district's policy is to staff station one with a minimum of one firefighter and station two on Brandt Road with a minimum of two personnel. When staffing falls to two personnel, the district attempts to hire back on overtime an off-duty firefighter or a district volunteer. There are approximately twelve times per year that the district is unable to hire back sufficient personnel to cover both stations, when this happens the district closes station one and staffs station two with two personnel. This has caused concern on the part of residents who live in the first -in district of station one. As you will see from Chairman Young's letter, the), are requesting that the Lodi Fire Department respond to medical aids in the area bordered by Harney Lane on the south, Alpine Road on the east and the Mokelumne River on the north. In reviewing past run history, this would amount to ten -twelve additional calls for Lodi Fire. Mokelumne would respond from station two and relieve our personnel usually within twenty minutes. Presently, Mokelumne has been responding into the city limits of Lodi on second alarm calls to provide the department with additional breathing air support. Since January 1, 1999, the Mokelumne Fire District has responded six times inside the city limits of Lodi. The average time spent on -scene is approximately one hour, for a total of six hours. If the city were to agree to this request, it is estimated that the Lodi Fire Department will respond to approximately 10 calls and remain on -scene for approximately twenty minutes for a total commitment of three hours and twenty minutes. I personally feel that agreeing to this request is the right thing to do. It is neighborly and reciprocal based on their response into our city on an occasional basis. I have also received a letter from the United Firefighters of Lodi stating their concern that this item is a change in wages, hours and working conditions, therefore subject to meet -and -confer. I personally do not feel that this is a meet-and-confer issue. However, I will meet with the UFL to discuss their concerns should Council decide to pursue providing this service to Mokelumne. Scott W. Kenley, Fire ief Attachment Mohelumne Ru ral Fire Disfr; ci 13157 East Brandt Road/P.O. Bos 1357, Lockeford. Ca. 95237 (209)727-0564 Fax: (209)727-0863 Directors Mike Young, Bernie Mettler, Gersh Rosen, Ron Valinoti. Jere Freeman. Chief Dan Lean October 27, 1999 CHIEF SCOTT KENLEY LODI FIRE DEPARTMENT 217 W ELM ST LODI CA 95240 RE: MUTUAL AID COVERAGE REQUEST Dear Chief Kenley: The Mokelumne Rural Fire District would like to request coverage from THE Lodi Fire Department in the Victor area for EMS calls only when our Station #1 is put into volunteer status. This occurs only when we have exhausted all means for staffing. Volunteer status happens approximately twelve times per year and averages nine runs within the twelve shifts. Our Station 1,2 will be manned and upon our arrival on scene, Lodi Fire Department will be immediately released. The area of coverage, if possible, would be from Harney Lane North to Mokelumne River and from Alpine Road West to the Lodi City limits. Prior to receiving EMS calls in the specified area, the Mokelumne Fire District will notify Lodi Fire Department by calling as soon as possible when Station #1 is in Volunteer Status. San Joaquin County will dispatch Mokelumne Fire Station #2 and relay call to Lodi Fire Department. Thank You for considering our request. If any further information is needed, please contact Fire Chief Dan Leary at the above number. Sincerely, Mike Young Chairman Mokelumne Rural Fire District Board of Directors KS:mv LF%iL7A1D.99 DRAFT#9 Includes Approved Revisions - October 27, 1999 AGREEMENT FOR RECIPROCAL USE AND MAINTENANCE OF PUBLIC FACILITIES LODI UNIFIED SCHOOL DISTRICT AND CITY OF LODI THIS AGREEMENT ("Agreement"), is entered into this _____day of , by and between the CITY OF LODI ("City"), and LODI UNIFIED SCHOOL DISTRICT OF SAN JOAQUIN COUNTY ("District"). WITNESSETH: WHEREAS, District and City have a mutual interest in the provision of adequate and attractive public facilities for education and recreation for the residents of Lodi and its environs; and WHEREAS, both District and City have certain physical facilities, including pools, parks, stadiums, gymnasiums, indoor meeting rooms, play areas, and athletic fields which may be beneficially used by the other in a comprehensive program of serving the community; and WHEREAS, District and City have in the past, executed a series of agreements for the mutual benefit and use of facilities and services; and WHEREAS, District and City desire to consolidate and incorporate into a Master Agreement, provisions of joint use of facilities. NOW, THEREFORE, BE IT AGREED between District and City as follows: I. PREVIOUS AGREEMENTS SUPERSEDED Those agreements between District and City, identified below in this section are superseded in their entirety. 1. Agreement for Reciprocal Use of Recreational Facilities, executed April 19, 1969. 2. Agreement for Reciprocal Use of Lodi Grape Bowl, effective September 1, 1988. 3. Agreement for Mowing Services at District Athletic Fields, effective October 15, 1984. 4. Agreement for Reciprocal Use of Tokay High School Pool, dated December 21,1971. 5. Agreement for Reciprocal Use and Maintenance of Public Facilities, City of Lodi and Lodi Unified School District, dated July 1, 1990. 6. All other written agreements not noted herein between District and City for reciprocal use of facilities are declared void except those pertaining to specific individual facilities. -1- DRAFT#9 Includes Approved Revisions - October 27, 1999 II. FACILITIES INCLUDED IN THIS AGREEMENT A. Unless otherwise specified, this Agreement covers the following City facilities: Zupo Field; Kofu Park; Softball Complex, Chapman Field; Blakely Park; Lodi Grape Bowl; Blakely Field/Enze Swim Complex; Lodi Lake Park B. Unless otherwise specified, this Agreement covers the following District facilities: Tokay High School Pool; Lodi High School Pool; all school athletic fields and school indoor facilities within the City of Lodi area and surrounding rural areas (Woodbridge, Lockeford, Houston, Clements, Victor, Henderson, and Tokay Colony). C Facilities not covered by this Agreement: 1. District -owned facilities not specifically covered by this agreement may be scheduled for use under the use of facilities provisions of District policy, and must be requested through the site using the District's 'Request for Use of Facilities" form. Provisions of this Agreement do not extend to those facilities. 2. City -owned facilities, not specifically covered by this agreement, are subject to use pursuant to the applicable provisions of City Ordinance, and/or policy, and the terms of the "Application for Use of City of Lodi Parks and Recreation Facilities." Provisions of this Agreement do not extend to those facilities. III. SCHEDULING A. Scheduling Authorization 1. All scheduling for facilities under the provisions of this agreement, must be done by, and with the approval of, the authorized entity. a. The authorized entities for the City of Lodi are the Parks and Recreation Department and the Office of the City Manager. b. The authorized entity for school -related activities and school sites (except for field use) is the school principal, -2- DRAFT#9 Includes Approved Revisions - October 27, 1999 vice-principal, or applicable assistant superintendent. The authorized entity for all other sites is that site's administrator or the applicable assistant superintendent. The authorized entity for all use of school fields is the Maintenance and Operations Department. C Requests for use of facilities at schools on a Modified Traditional Calendar must be submitted in sufficient time before scheduled breaks to allow for processing._ 2. All request for facilities are to be submitted on the appropriate form(s) and must be signed by the designated representative of the authorized entity. B. Advance Scheduling 1. Events which - require advance scheduling, such as meets or tournaments, may be scheduled up to one (1) year in advance. 2. Requests for advance reservations by the City or District will be confirmed or denied by the authorizing entity within 15 working days of submittal. a. All denials must include the reason(s) for denial. b. If disagreements over proposed fees or charges, or use provisions, are not resolved within the 15 day period, the use shall be deemed denied, unless the period is extended by mutual consent. C. Regular Scheduling 1. Swimming Pools (Blakely/Enze, Tokay High, Lodi High) a. District and City representatives shall meet in January of each year to coordinate and confirm the year's schedule of uses, the appropriate reservation forms, the designated contact persons, location/ procedure for filing the reservation forms, and to establish procedures for notifying users of emergency closure(s). b. District pools are available when they are not being used for District purposes. -3- DRAFT#9 Includes Approved Revisions - October 27, 1999 i) The Tokay High Pool and Lodi High Pool will be closed for maintenance at District discretion following the schools' last scheduled use (usually in November). ii) Ninety days (90) prior to the anticipated closure, the City of Lodi Parks and Recreation Department will be notified to allow for coordination with the City's aquatics program. Except for extraordinary circumstances, the District shall close only one pool at a time. C. City pools are not available for scheduled District use during June, July and August. d. City or District pools will be closed immediately by authorized staff if there is any health or safety concern, or if the water quality falls below acceptable minimum standards as defined by San Joaquin Public Health Services, and/or any regulating state agency, and shall remain closed until use is authorized. e. In the event of a closure of a District or City pool, designated staff of both entities will be notified of the closure immediately. Every attempt shall be made to accommodate alternative scheduling of events, or a rescheduling of canceled events. 2. Lodi Grape Bowl a. District shall have preferential use of the Lodi Grape Bowl for football games and graduation events, except when pre-empted by the Lodi Grape Festival and National Wine Show (generally in mid-September of each year). i) District shall provide to City the schedule of football games and related events no later than May 1 preceding the season for which the schedule applies. ii) The schedule for graduation events shall be provided not later than four months preceding the graduation (generally February 1 for events occurring the last week of May/first week of June). 4- DRAFT#9 Includes Approved Revisions - October 27, 1999 b. The Grape Bowl is otherwise available for District events when it is not being used for City purposes, or other events approved and pre -scheduled by the City. C. Except for events scheduled in -advance per paragraph B. of this section, the City shall confirm or deny District requests for use of the Grape Bowl within fifteen (15) working days of the receipt of the request. d. All requests for use are to be submitted by the school principal, or authorized designee, on the forms, and in the manner proscribed by the City. 3. Athletic Fields, Complexes, Indoor Facilities a. All fields, both City and District, that are to be used for seasonal play, must be scheduled 60 days prior to the start of the season, using the appropriate forms of each jurisdiction. b. All requests are to be confirmed or denied within 15 working days of the submittal of the request. C. All requests for District fields shall be submitted to the designated District representative in the Maintenance and Operations Department. The Department shall coordinate such use requests with the subject school sites. d. City fields shall be reserved and scheduled for use by City - sponsored teams and groups prior to reservation of District fields. e. District fields shall be reserved and scheduled for District events prior to reservation of City fields. f. All other school or District facilities to be used by the City shall be scheduled directly with the site administrator, using the appropriate facilities use form._ g. All other City facilities to be used by the District shall be scheduled directly with the appropriate site administrator, using the appropriate facilities use form. -5- DRAFT#9 Includes Approved Revisions - October 27, 1999 h. All athletic fields (both City and District)_ are subject to closure when the fields are wet to the extent that team use could result in significant damage. i) This is to be determined by the City's designated representative for City fields, and the District's designated Maintenance and Operations representative for District fields. ii) Rain call procedures for fields are to be mutually agreed-upon at the start of each season, or when the use agreement is approved if it is for singular events. L In the event that an extraordinary circumstance necessitates the closure of a City or District field, complex, or indoor facility, the using agency's representative shall be notified as soon as possible. It is that person's responsibility to notify all other affected parties. i) Whenever possible, disrupted events shall be relocated to other facilities in -lieu of cancellation. ii) Every attempt shall be made to accommodate a rescheduling of canceled activities. 4. If disagreements over proposed fees or charges, or use denied unless the time period if extended by mutual consent. IV. OPERATIONS A. If operational staff are required by the owner as a condition of using any� facility peal we, f#ey the assigned personnel shall be readily available at all times they are on -duty, to provide operational, maintenance and emergency assistance to the users. B. Food and Beverage Concessions a- User and/or associated organizations, may operate food and/or beverage concessions during scheduled events under the following criteria. Es DRAFT#9 Includes Approved Revisions - October 27, 1999 a. If food and beverages are permitted in the facility. b. When there are no other proprietary or exclusionary agreements for concessions at the facility. b-2. If food concessions are to be a part of the event, it should be so - noted on the use of facilities form and must be approved by owner. Q. During such events, user and/or associated organizations, shall have an exclusive right to the operation of the concession stands and the proceeds of sale. 4.4. User may assign the right to operation of the concession stand(s) only as agreed -to by the owner of the facility. 5. Exclusive Product Contracts a. If a facility is covered under an exclusive product contract, the user shall abide by the provisions of the contract. - b. It is the responsibility of the using agency to obtain a copy of any pertinent contract provisions from the owner. Signature on the facility use agreement shall constitute understanding and acceptance of the provisions. C. It is the responsibility of the using agency to inform all affiliated users of the contract provisions and to monitor compliance. e:6. All concessions stands or areas used for concession, are to be completely vacated at the conclusion of the event, and are to be left in a clean and usable condition. €.7. All concessions must meet Department of Health Services standards and requirements. g8. Concessions may remain for the duration of the event unless other arrangement are agreed-upon at the time that the use agreement is approved; however, they are the sole responsibility of the user. A -C Pools (Blakely/Enze, Tokay High and Lodi High) The areas around all pools are to be kept clean by users. -7- DRAFT#9 Includes Approved Revisions - October 27, 1999 2. Pool covers are to be used. They are to be placed as directed by operational personnel. -9 D Grape Bowl 1. City agrees to staff the Lodi Grape Bowl with appropriate maintenance/ standby personnel to coordinate and operate the facility when it is being used by District. 2. District shall furnish all security and event personnel as required by the City. I A District administrator and/or a school athletic director, shall be present during school or District events. 4. All personnel requirements, including applicable costs, fees, or charges, are to be included on the appropriate use form. at the time the application for use is approved. 5. During District's use of the Grape Bowl, District or associated student organizations may operate food concessions during any games or events scheduled by District. a. During such events, District shall have an exclusive right to the operation of the concession stands and the sale of food, beverages, etc. during all games or performances scheduled by District. b. District shall be entitled to retain all proceeds from the operation of said concessions. c District may assign the right to operation of the concession stands only as agreed -to by the City. d 411 .+rt..nncn:.�.•.e• r•L.�ads i.se by the Piss iet its agents, u. r event in a elean and usable Eandifien. M DRAFT#9 Includes Approved Revisions - October 27, 1999 G EE Athletic Fields, Complexes, and Indoor Facilities 1. Owners will staff the facility with the appropriate maintenance/standby personnel to coordinate and operate the facility: with all costs to be born by the by pursuant to the provisions of the facility use agreement and Exhibit A of this agreement. 2. User shall furnish all security and event personnel as required by the owner. 3. All personnel requirements, including applicable costs, fees, or charges, are to be included on the appropriate use form at the time the application for use is approved. 4. Food and ,oma Gen essiens D.F. Users will monitor facilities during use, and maintain all facilities in a safe and clean condition. V. FEES AND CHARGES A. Charges for facility use are intended to reflect actual costs for use of the facility, above and beyond the cost for operation and maintenance that would otherwise be incurred by the owner. B. The initial schedule of charges pertinent to this agreement are to be established negmea prior to execution of the agreement, and are to be attached to the executed agreement as Exhibit A. 1. All potential fees, charges, or cost schedules are to be included in Exhibit A. 2. At the time a facility is scheduled, the user is to be advised of all applicable and potential fees or costs. a. These are to be noted on the use agreement form. b. All cost notations on the use form(s) are to be initialed by the user's authorized representative. C. Disagreement with proposed charge -items must be resolved between the agencies prior to final approval of M1 DRAFT#9 Includes Approved Revisions - October 27, 1999 the use agreement. Final authority for charge -items rests with the owner. 3. The District's fees to be included in Exhibit A will be established by the District pursuant to statute and applicable Board polio 4. The City's fees to be included in Exhibit A will be established by 33. Facility use charges to be reflected in Exhibit A, may be adjusted annually by either, or both, agencies, based on actual and/or projected costs. 4.5. Adjustments to facility use charges shall be effective at the beginning of each fiscal year (July 1). a. City and District representatives shall confer by January of each year regarding proposed adjustments for the forthcoming fiscal year. b. All adjustments shall be confirmed by both parties in writing by February 1. If this does not occur, the fee schedule for the previous year shall remain in effect. C. All services or requirements beyond the scope of this agreement, are to be assessed and billed pursuant to the provisions of District and/or City policy and/or ordinance. To the maximum extent possible, these shall be mutually agreed-upon prior to the costs being incurred. D. Damage to Facilities 1. When damage to a facility or field does occur, the owner will notify the user agency immediately. 2. Representatives of both agencies, and insurance agency representatives if appropriate, will evaluate and review the damages, preferably together, to assess necessary mitigation, appropriate cost, scheduled repair, and final work product. 3. The user agency will be responsible for costs incurred to repair the damaged property. - E. Billing and Payment -10- DRAFT#9 Includes Approved Revisions - October 27,1999 1. Prior to the start of the each fiscal year, representatives from both agencies shall establish an "in-kind" match of funds. No dollars shall be exchanged until such time as the match has been exceeded by either agency, at which time the amount exceeded shall be billed and paid based on the charge -items on the approved use agreement, and at the rates in effect at that time. 2. Each agency will exchange quarterly reports on a quarterly basis, or as agreed-upon by the finance agents of both agencies, _ which detail facility usage including dates of use, names of users, facilities used, and fees associated with the usage. The reports will include total fees to date. VI. AMENDMENT TO AGREEMENT A. This agreement may be amended at any time by agreement of both parties. B. This agreement shall be amended if it is determined that there is an ongoing use of one or more facilities not covered by this agreement, or there are use or fee provisions which can best be addressed through mutual agreement. VII. HOLD HARMLESS A. The user of the facility hereunder agrees to save, defend and hold harmless the owner of any facility for any and all damages arising from such reciprocal use by District or City, except for those damages or portion of damages directly attributable to the owner's negligence. B. Each party hereto is charged with the duty to inspect for apparent defects prior to the use of any facilities demised hereunder, and to provide appropriate notification to the owner. C. During any use of any facility demised hereunder, the user shall be liable to the owner for any damage to such property caused by the user, or third parties present at the invitation or suffrage of the party using the property.- -11- . ....... . ........ VI. AMENDMENT TO AGREEMENT A. This agreement may be amended at any time by agreement of both parties. B. This agreement shall be amended if it is determined that there is an ongoing use of one or more facilities not covered by this agreement, or there are use or fee provisions which can best be addressed through mutual agreement. VII. HOLD HARMLESS A. The user of the facility hereunder agrees to save, defend and hold harmless the owner of any facility for any and all damages arising from such reciprocal use by District or City, except for those damages or portion of damages directly attributable to the owner's negligence. B. Each party hereto is charged with the duty to inspect for apparent defects prior to the use of any facilities demised hereunder, and to provide appropriate notification to the owner. C. During any use of any facility demised hereunder, the user shall be liable to the owner for any damage to such property caused by the user, or third parties present at the invitation or suffrage of the party using the property.- -11- DRAFT#9 Includes Approved Revisions - October 27, 1999 D. Documentation of insurance coverage of user shall be provided as - required by each agency. E. The prevailing party in any dispute arising under this agreement shall be entitled to reasonable attorney's fees incurred in the litigation or adjudication of such disputes. VII. TERMS OF AGREEMENT A. The term of this agreement shall be "evergreen' with a biannual review by the City Council and the Board of Education. B. All fees, charges, or other specifics requiring annual periodic review and/or modification, are to be considered by bei eaeh yea. - within the herein described timeframes. C. This agreement maybe canceled at any time by either party, by giving to the other party six (6) months written notice, or by mutual consent. In the event of cancellation, all approved use of facilities shall continue uninterrupted to the end of the term approved on the facilities use agreement. IN WITNESS WHEREOF, the parties hereto have set their hands the day and year first hereinabove mentioned. CITY OF LODI, a municipal corporation LODI UNIFIED SCHOOL DISTRICT OF SAN JOAQUIN COUNTY By By H. DIXON FLYNN MARILYN DOMINGO City Manager Assistant Superintendent, Business Attest: ALICE M. REIMCHE City Clerk Approved as to Form: RANDALL HAYS City Attorney Attest: Clerk of the Board of Education Approved as to Form: ROBERT H. THURBON Counsel to the District -12- DRAFT#9 Includes Approved Revisions - October 27, 1999 AGREEMENT FOR RECIPROCAL USE AND MAINTENANCE OF PUBLIC FACILITIES LODI UNTIED SCHOOL DISTRICT AND CITY OF LODI Exhibit A Schedule of Fees and Charges Effective [List new date each time this is revised - retain old dates for documentation] Fees and Charges for City of Lodi Facilities Approved by the City of Lodi, [Note: to be determined by the City of Lodi] Fees and Charges for Lodi Unified School District Facilities Approved by the District, [Note: to be determined by the District] -13- AS SEEN IN �;hr, 1Teut Hark "ime� Friday, May 21, 1999 BUSINESS DAY C1 Dan DeRose, right, addresses a Newark schools committee on how best to structure an exclusive soft-drink contract. Today's Lesson: Soda Rights Consultant Helps Schools Sell Themselves to Vendors by: Constance L. Hays NEWARK - Dan DeRose, marketing consultant, was busy doing the math for his new client, the Newark Public Schools. The question on everyone's mind: how much money could the district make if it sold a soft-drink company the exclusive right to vend its products on school grounds? The answer, according to Mr. DeRose: a lot more than it gets right now. "Let's just say everyone drinks one product a day, and let's just count the stu- dents;' he said. "At 45,000 times 180 days of school, that's 8.1 million cans. At 75 cents apiece, that's $6 million walking out the front door of your school every year in quarters and dollars. "Let's get a lot of it," he told his audi- ence, a collection of school principals, ath- letic directors, P.T.A. officials and one stu- dent. "Let's get some of it back to the schools." Even $5 million would make a difference in the district's $550 million bud- get. With his square shoulders, steady smile and conscientious use of the first - person plural, Mr. DeRose and his com- pany, DD Marketing, are storming a once - quiet backwater in the soft-drink business. Schools regard him as a font of informa- tion. Soft-drink companies, which used to make low-key deals on their terms with local school districts, hate him with a pas- sion. One of the best-known consultants in a rapidly growing specialty, Mr. DeRose, who is based in Pueblo, Colo., says he has obtained exclusive contracts, or is negoti- ating them, for 63 school systems nation- wide. The exclusive contract, a winner -take - all creation of the soft-drink companies themselves, eliminates rivals' products from a school, a hotel, an airline. Thanks to Coca-Cola and Pepsico's desire to mar- ket to children, and the eagerness of schools for the income, Mr. DeRose has found a niche. Almost evangelical in his zeal, he primes school officials to take on the soft- drink companies, raising the stakes for all concerned and profiting handsomely from the deals that go through. "Dan DeRose is probably the person most responsible for this current feeding frenzy," said Alex Molnar, a professor of education at the University of Wisconsin who has debated Mr. DeRose. Others say there is a need for his ser- vices. "Most educators don't have a back- ground in food management," said Barry Gaskins, a spokesman for the Pitt County schools in Greenville, N -C., which hired Mr. DeRose last year. "They're trained in the three R's, and the R's don't include retail! While demand for exclusive contracts has never been greater, there is a distinct downside. Some lawmakers want to ban the sale or giveaway of soft drinks during the school day, citing nutrition concerns and the ubiquity of ads and vending ma - First Impressions: getting 67 cents a kid before, and now they're getting $27." Then he went to the heart of the is- sue: how much Newark's kids could be worth. As in hundreds of school systems around the country, Newark officials are unable to pay for every program on their agen- das. The system was so badly misman- aged that in 1995, the state took control and still runs it. To make the most of its assets, Mr. DeRose said, Newark should make a deal with just one soft-drink giant. "We're go- ing to get what we call a rights fee," he said, adding that companies like Coke and With 50 million children of school age spending at least $50 billion each year, some companies are interested in capturing that market early through exclu- sive deals like one Coke signed with School District 20 in Colorado. Totais School districts with Sc:10ol districts that have States where as of: — — — exclusive marketing deals — — — — — — — — refused solicited deals — — — — — deals exist Apnl'98 ------------------------- illi 46 — — — ] t — — — — — — = 16 Oct. '98 — — — X108 — — — — — — — — M10 — — — — — — — — 23 — — — — — — May'99 140 ' 15 26 — — — — — — — — — — — — — — — — — — — — — — — — — Scurca: The Canter for Commercial Free Public Education. National Institute on Meeta and the Family. chines. And advocates for education say students are captive audiences who should not be sold to the highest bidder. even to finance school programs. Mr. DeRose is working closely with Valerie Wilson, the food -services manager for Newark schools, who wants to consoli- date the system's patchwork arrangement — some Coke here, some Pepsi there, plus other brands. Whoever wins the con- tract would supply not only sodas for vend- ing machines but also juices in 82 school cafeterias and water and other drinks for athletic events. After some discussion about the mer- its of the idea, officials decided to go ahead, Ms. Wilson said, and solicited bids from three marketing consultants, settling on Mr. DeRose. Earlier this month, nattily dressed in a gray suit, blue silk tie and shiny black alligator loafers, he met with the committee Ms. Wilson assembled to discuss the fine points. He warmed up by discussing deals he has orchestrated for school systems in Colorado and Kansas — one for $11. t million, the other for roughly $5.3 million. "In Kansas City," he noted, "they were Pepsi love exclusive contracts because they imprint brand loyalty on young minds. As an example, Mr. DeRose cited his own first grader, Anna, whose school in Pueblo has an exclusive contract with Coca-Cola, the work of DD Marketing. "From now until she's graduated, all she'll drink is Coke," he said. "She goes out for pizza and we ask, What do you want to drink, honey? Coke. She doesn't even know how to spell Pepsi:' The Newark group seemed impressed by Mr. DeRose's presentation, which in- cluded frequent pauses to answer ques- tions. "it's a first time for us" said Roger Jones, a spokesman for the Newark Pub- lic Schools, when asked why the system needed a consultant. "It's an opportunity to bring together all the people involved in vending so we have one voice speaking for everyone" and help generate a wind- fall "that ultimately goes back into our sys- tem so students benefit" With their costs rising, Coke and Pepsi say they want to avoid deals that involve marketers like Mr. DeRose. "I'm surprised that during his presentation, the high school band didn't break into a spontane- ous version of 'Seventy -Six Trombones,"' said Lauren C. Steele, a spokesman for Coca-Cola Consolidated, a bottler in Char- lotte, N.C. Pepsi also views consultants with dis- taste. "We tend not to love working with these guys," said a spokesman, David DeCecco. In the past, soft-drink companies would make low offers and schools would usually accept them, lacking the time and inclination to pursue alternatives. Now, the word is out. "Coke came to the table with an offer last week, and I said, 'based on what you did in Manteca and what you did in Wyoming, this isn't good enough,' " said Bill Erlendson, an official with the San Jose, Calif., school district, who used information Mr. DeRose pro- vided. He was expecting a revised bid from Coke this week. Mr. DeRose's plan for Newark calls for installing eight vending machines at each of the city's 13 high schools; two to four at each of the 69 lower schools. "Typically, we like to add a machine in a hall, to give the company a presence," he said. Com- mittee members were asked to sign confi- dentiality agreements, to keep the offers secret from competing bidders. Mr. DeRose said. The Newark group next meets June 1 to discuss the proposal Mr. DeRose puts together, before soliciting bids from the beverage companies. if all goes accord- ing to plan, Newark will sign an exclusive contract by the time school opens in Sep- tember. At its last meeting, the committee did express several reservations, including whether one old high school would be able to support eight vending machines on its existing electrical work, and whether the girls' basketball team would still be able to sell drinks at football games. Mr. DeRose smiled, fixed his gaze on the group and said: "All of your concerns, I've heard them 500 times before. All of your peers across the country have the same concerns. Organizations mentioned in this article: DD Marketing; Coca-Cola Co; Pepsico Inc "OSA IODAY hopc1El IIJr{a M1lutp11CI1J lu serve as a lorunl Iillilor for trifler IlndelSlanding Efitell.1144kcilsr•11 W10 unity to hell) snake lidilol of the It,,: I ISA Indy one nation." Iililulial P4W -..-Allc11If. Neubailh Thomas t'wley FauuJcr, &PI. 15, 1982 =1, lhcsilleul and Publisher Today's dabala: Adveilisliva In aoboois -cilia school is brougli t to you by: C'oki? S1ieakers-.? Sure, schools cats use money, but Ilia ad buslness Is gohig too far. The Kollo school district in Texas has de- cidc,l "l"uke's lite one." Al least it's the tine willing tis pay schools $4.2 million over 15 yc.ws to allvelnse Coca-Cola pl"rklocts. The lelfersOrl County school 4141licl in Col- oradu is selling its students as the next Pepsi gcnciation — for the price of $2.1 Million. Boger to build brand loy- alty, soil -drink companies are aficring school districts big bucks for the exclusive right to advertise and sell their products at schools. Schools have raised money selling ad space and halftime snacks for as long US they've had yearlsrsoks and football games. lint these exclusive, multi- million -dollar deals are usher iug in a new and trou- bling age of educational fund-raising. Anyone who doubts that massive financial support from the highest corporate ate bidder can muse a school srhnuls that flays $8 million. I he deals ale file latest twist in the cone nicrci:dil:dion of eduration by big conoµrnics eager to teach studcros. Since 1989, %hell Channel One began proklucing daily news Shows for schools financed through youllr-ori. eine- commercials, in -school advellising gradually has expanded. Bill Iltere's a rlillcrence Iet%een the exclu- sive coulracls companies are now seeking and other forms of advertising in schools. The ex- clusive deals limit student choice and calk re - otrfl Sd000l of8dals werari t amosad by Mike Cameron's PeW shlit. to sell out its independence — and Strdents — need look no further than Greenbrier I ligh schlxwl in Evans. Ga. Senior Alike (Cameron was sus1wilded last Hiday lir interfcting with the school's ellorls to raise $10010 in corporate rash. alis of- fellse111e wore a Pepsi l' -shirt on the school's official Coke Day. According to a survey by the Center for Commercial -Free Public Education. at least 14 school districts have signed exclusive pro- motional deals with Companies selling soil drinks, sneakers and telecommunications equipment. And the marketing firms that bro- ker the contracts say hurulreds more are in file works. The most lucrative to elate: Coke's I(F Year contrall with the ('ololadu spniugs (pure allrcaiional institu- tions to loc the company line. 1'llal's what happened when the University of Wisconsin signed a con, tract with Reebok. Ii barred teachers and slu dents from speaking ill o the shoemaker, a curiou! lesson for an insliluliol that should be teaching it: students that the Consfilu tion guarantees a light U free speech. The clause wasn't removed until law makers complained. In today's ad-sahrrata world. kids don't net nonexposure to MAA Avrinue-style hype. Yet that's what they're (>;fltting in school systems like Texas' Grape- vine-Colleyville district, where Dr Pepper is paying f1.45 million over 10 years lo adver- tis4 fu gyms. stadiums and atop two schouls' roofs. The cola ads are so lucrative that the school systerp is branching out. Now callers phoning the district are informed that the voice mail Nit is "proudly sp ollsorcd by shr oder (l.Jluonlics..• There's plenty that curtorations can do to shpp,:rl schools. from mentoring programs to ads with no swings attached. Bill when the quest for corporate support drowns out a schrusl's cducalional mission, it has gone ton fit - Business, schools both win Corporate Partnerships help education Ily Dan fkRosc Adost people understand fire tremendous pressure on both public and private education to increase student performance and enhance edpcational quality while containing costs. Providing students with a quality education requires adequate funding for leacher and staffsalaries, supplies, maintenance and oper- ation of facilities, and general operating bud- gets. The simple fact is that funding for schools ollen does not provide the necessary prase for achieving high gnalily. Corporate support in edocpption helps school ollicials ova -conic the interrelated is- sues of cost containment anpl quality enhance- menl. Funding provided by corporations en- ables schools to save programs that would otherwise be eliminaled and to purchase State- of-the-art technology when funds otherwise would be unavailable. Various business/school partnerships (ex- change programs, internships and equipment - sharing programs) give stridents learning op- portunities that benefit all involved. To suWst, as some cynics do, that corpo- rate involvement in education is motivaled only by the 'Umom line" is unfair to enter- prises such as Coca-Cola, PepsiCo and Cad- bury Schweppes. l have found that these com- panies are genuinely concerned about making a contribution to educational quality. Partnership agreements. whereby these companies share revenue from vending-nta- chine sales with schools, ease the pressure on taxpayers and elected representatives to con- stantly increase funding. When these compa- nies are allowed to advertise their products in ways acceptable to parents. students, teachers and administrators (on scoreboards, for ex- ample) there is no loss of academic integrity or compromise of principle. The key is in- volvement of all concerned to ensure that the partnership is a "win-win" for both the corpo- satirist and the school. Finally, i think insist would agree that there are limits to fire extent to which corporations can be involved effectively in the schools. That is why both parties should always con- struct relationships basal ultimately on the benefits to be derived by students. My experience has been that business firms such as those cited above, while mindful of their fiscal responsibility to shareholders, real- ize that producing well-educated students is the teal "bottom line" for the good of society. Van Ware is rresidrnr til' VV Alar! ain list., ire lhrrfdu. Chis Ll - Are c:.-Cftlsity hruttti Coill'i iic"S an (f.-wrip1e of ittc•rcused wits -wilt pelrrrterirt,, (W tt sra)II'l-t11711 p c , cull of theCnitlperlriutf b% -cash -rich i,'M17011ties. ' Locking up Revenue... r ckin - ,, t Ch ce ontracts By Karolyn Schuster dininistrators of the University of lowa:(r'e in [lit: I1t1al s1;1_"es of I1L'_(1lGl(- in" an exclusive brand contract with Glca-Cola that will leave the urtiyer- sitv's 27.000 students without access it) their favorite Ni4i1-drink. Nlouniain Derv, a Pep si- Cols produc(. Iii Colorado Sprin_s. the names of high school juniors and seniors with perfect atten- dance records and 3.0 arvde punt( aver._ s will he submitted for a year-end drawinu for a nc•.v iu(onio bile. The pronuition. desi_ncd to improve student achievement. is funded by Coca-Cola ;is part of as exclusive brand contract with the district. L;at year. Coca-Cola introduced its (It"SCSI hC': l'ra_l'. Sur'J.. in a nlarkettlL --vent sta_'_d on the campus of dic University of Minne- sota. A film of the c%en(. which fea- tured ;nriveisity :r(idetirs ,cr::nthtin_ up a .now nuxultain to reach the panned hevcr- t used widely in a nillictty rampai_'n fur flu product's national tltiluut. >5-iniilion tr '.cling ro;:d show Ih;:t fcn- uires frier lights. nlusic.::nd hi_-n:ane athletes ;o (e .Cit kids ailout f iulcss and heaith is spon- orc iby Hv.dthSouth. Ilu :wntr: I;u'ge>t re 11ai1iii(atinn and outpatient ,t.rL'_."•; conivanN. Fuildin_ I it the pro__rant eonles Front Tr;nel- rs Insur;lncc and from Coca-Cola..��ie� ,(_:led a lige-,:ear ..�clusi'.e:�;ntnrrsitip ;nc.^.t '.villi the eomp:aly Iasi June. The cola '.vary are nuthin_ new. 'Tire ,ori drtnk hu.siness is a cer,: loc::i one and there 1%; e beCil excfusi%e betwctn bot - (lea and institutions for fO %cars or more." ;av s Jim Dinkins. managing dir, r -(or of immediate 34 F=-BRUARY 1998 FM consumption development IitrCoca-Cola. Still. the deals in recent years have generated nwnben sta_geang enough to make national headlines. tblanv point to the highly -publicized 'S 14 million Penn State aurcr: lent (with Pepsi- Cola) in 19112 ;is the event that really encour- aged the Ircrid on a national scale. Even that number paled in comparison to the It) -year. S:1.5 million eon(rsct signed in I Y96 between Coca-Cola and the University of Nlinnesoia- going after volume markets Exactly how wide- sprc;:d is the prtcticc". Ron Coleman. a sookesman for Coca- Cola. notes that of the ;.600 colle_es nation- wide. fc%• cr than +Utl have exc!usise brand contracts. While [h;a .vould seem to indicate lull a modest pcnctrati(n. .vitt;( those nurlti"ers doll': say is that almost all )( ;itcse eon- irac:s hu\ e nce:1 Ite_'�II- :oed ,ince :he :111d -90N, and dial 171an': luck up pe_li'ic c;tile_es well into the ue-t decade. Further. the sante k:ilds of eonzracts are now nc_innin_ to;:ppear in the K- I-, school seg- rnen[. as financially - strapped adminis- traors there assess the value or their student,, as an ex- clusive customer base to the same companies. The terms of the contracts are also evolving. arketino dollars The early deals were often described as ..cash and a scoreboard" arrangements be- cause they almost always involved a bever- a_�e company's "contribution" of a hi_,h- tickc,. state-of-the-art lighted scoreboard for the university athletic stadium. Today, anv- thin'.: '_Toes. Bob Moore. the deputy school superinten- dent and chief financial officer for the Colo- mdo Springs district that is staging the auto- ` mobile giveaway, says other revenues from its exclusive dell with Cocl-Cola will fund In annual teacher awards banduet. collC_e scholarships for students and a leadership re- ir a for members of the administration L.nd hoard of education. "GXC!uSiyC cuntractS allow US w make a meaningful contribution to educatiu'n and _lin Some terrific business development op- portunites at the same time." a Pepsi-Cola spokesman told FoodManagement. "This is Pepsi's market. Pepsi focuses on youth. teen. in particular. Students on eolle�e campuses are the heart of Generation Next." "There's a considerable value to these companies in creating a Coke or Pepsi drinker in the 13 to 24 age group,- empha- sizes Barry Scerbo, dining services director at Penn State.'It's a very impressionable time in their lives, and if a company can cre- ate brand -loyal customers at this stage it has a good chance of keeping them for life." "Dollars are what's driving the trend to ex- clusive contracts;" says John Walker, execu- tive assistant in foodservice for the Univer- sity of iNdinneSota. "But what's driving the dollars is the marketing. Coke has ,town the beverage business tremendously on this campus. They've increased the number of machines, added locations, installed new state-of-the-art vending equipment. "Pius," Walker adds, -'thev've backed it up with creat marketins. Richt now we have a fold cap' promotion exclusive to this cam- pus. Under the caps of the 20 -ounce bever- ;i_e are coupons for everything from books and compact discs to free tuition and rnom and board.'. New horizons "It's a new horizon to realize that everv- thin__,'z for sale." admits Steve Bowers, di- rector of dininu services at the University of Iowa, which is nc_otintin_ an ex- clusive brand deal with Coke. And whether foodservice directors like these con- tracts or not. manv are find- in-, the revenue streams too large to resist. "We've all become en- trepreneurs nn college cam- puses, says Julatlle kiehn. campus dininu, services di- rector of the University of iVl issouri-Columbia. "We*rc all looking for ways of __tting funds we're not getting from the state anymore. Colleges and uni- versities ne--d those rev - The contract Penn State signed with Pepsi -Cala in 1992 increased the visibility of and interest in opportunities represented by exclusive brand contracts. The early deals could often be summarized as "cash and a scoreboard"... Today, anythin. oes. FM FEBRUARY 1998 35 Brand 1 '3 Contracts enues to support our academic pro - Echoing that point of view in Colo- rado Springs. School District I i', Wloore refers to an Education Wee'; report that showed Colorado funding per pupil had fallen to 48th place among the 50 states. "The public expects us to be more entrepreneurial in looking for other sources of revenue."saysNloore. -We can't expect new revenues from tax increases anymore." Grades h-l_'sign on The exciu>n'c deal with Coca-Cola that Moore', distric[ put in plac:: this :cilool year will add a minimum of j7(i .i 00 to rho distric:': 56 -school oreruting bud -_,e,. "Tile fact is that principals need ad- ditional revenues to run programs Ill:;[ aren't _vain_ financial suopurt." s;rvs fill 3enza. (oodser:ice director or the Mesa. AZ. school district. "C:ubonatzd i�evcrages already arc heing sold on hi_h school c:unpuscs. whether by the athletic department or foodservice or through a contract Q.:ch principal ne uotiates for his ,c:1o4)1. If esciusiv]ty can increase revenues tor each school and princi- pal. then it is groin_ to he considered." ,he says. "There have been maior concern, In the past about extendin, such deals to the K-1'_ market and the influence in :crave companies might gain as a "Csalt" ,av, Dan DcRuse. founder ;;ci nrestdc�t of DD inc.. the nsuir.r.= '")moan . teeniiate the Sorrm,_-, adrr,ini,tra- ars n;: •:e •gone to re not io hecolne .)e:. ::a •0ose. "Thea I'oolbaIt teat" uni- forms won't have a big Coke logo on the shirts. "What dues happen is that admin- istrators now have nxmey for some very worthwhile programs that wouldn't hay. been funded other- wise. And the beverage company gets to be a big local hero by support- ing school programs that have a lot of visibility." Coca-Cola spokesman Scott Ja- cobson says. "Murc and more it's not about Coke signage or a scoreboard in the stadium We've funded locker rooms and athletic equipment and a lecture series. We've eveirrenovated campus buildings." Still. from the vendor's point of view. these agreements ";:re not about building a parking deck on campus." says Coke's Dinkins. "We're interested in the opportunity to market our total brand portfoli(. You I'ee! like an I"d test today.) A fruit drink". Try our brands. T;tat'. What h::s valve to us." Such deais also have their sh;:re of detractors. inc!udin_ operators who are reluctant to Bice tip product vari- ety and manufacturers who ,c:: such practices as monopolistic. Upfront money 'The problem with these arrrn_e- ments is the upfront money.- says one manufacturer. whose company offers customers tuntkev retail-stvle bi anded concepts. While agreeing that an exchange of value is an essential part of all brand- ing contracts. upfront cash payments "lead our customers to expect suppli- ers to buy their business. and to be- lieve that we're all willing to do so. "Our company prefers to move a sale awav from the idea of handing over a check. We'd rtther see an em- phasis on how much we are willing to spend on support services over the time of the contract." One fact that's often overlooked is that only a portion of the advertised promotional dollars are in hard cash. In most deals. for example. the beverage supplier takes over all vending responsibilities. ibluch of the calculated value reflects an estimate of future savings the institution will have: from no lun_er Navin_ to make the capital investment in vending ma- chines or having to employ stuff* to service. stock and maintain them. Other savings come from "selling ort-' existing vending equipment. The profits From increased hever- age ,ales and the extensive marketing programs that a manufacturer tvpi- cally brines to generate those sales are also valued in the deal. Coke's Dinkins says overall campus bever- age sales typically increase from 15 to 50 percent as a result of such pro- motional aetivities. On -campus promotional signage rights are a key aspect of mast exclusive brand contracts. Below: a wall mural in the tut] Cate at the Goizueta Business School at Emory University. "�r. A :_ - I'v zB.-rand titCir i�a.yn �nit- Rut incr ;;sin_!s. ill."ta uiuns .i:;:C :u in�!ttile ilnesttnents that a C:un- ;xa nr I•U,1ll1e: ie:: JCp:u-[IIICm ,ne i - lies. Csc:i it the: Llon't Jirecthr rc!:ue to :Le hea.vra_e pro_r:utt. in :lie Universav tit' Rhotic (slant!"; ::e1.1. Cnnu:;C: with f Cnsl-Gtla. the `'c•:. _. :n anulaC:ur.r is j;rne ittin; tlCrlm- .,..::lot of ;;sit tali ul .y itiLAI is ..,- n;;:r'.:Cti for the libr::rvr. snide u C:'•: iC�s t inC!u�!in_ C::r�er;uul lin:utcial u�i ,..:ices 1. ,_nnunuer solhvare. and :rJ .vas. st[Ch s debit C::r(l rcatlCt�. 71ie.i7(1).(11;11 :out« :I Cash disu•ii1ti- W nt ;urCuiur::Uu'; 1)INWICt I I tys etls- :: to prn, idc: = .i!i111cach to the ...,a.e!Il:'� ;lllll n:nU\�:": Il;e t1e11;Ilalle:lt�. iU_h cttuul. 'i i x.01111 :::C 11 in iilUl� ,e!uu,l -111d 'S 3.000 lu ..._a eie:nern;;r �Chuui. i'•'C•. iuusi•..:n:;n•� �I I)Isq'ilt 1 I'. 4n r r::C r.,. "Thcvk: ntd :roti nut-;u- _.nt,l untr:lets Intl there ; ;vs �luure. "�b�itlt ,tic distriQt v-itle •.viii he _ellin_ Illi), 100. or 1111';. iner,a>.:, in rev caue 1 runt theirhea:c:'a_e tentJin_.'. Many contracts are accompanied by a commitment to special promotions to help increase overall beverage sales. Above: festivities at the University of Minnesota where Cake staged the national roll-out of its new Surge campaign. There's no Crue lunch One Cu;t to lite instittttiolt with these eUlltl,;c:" i; a loss ol,Cht,icC I'Vr C:utnnter>. "We h;;d <ontr :•c;a ,lie h:utl 1.loun- i::in I)ew Dans—it was one o(nut• tolt- sellin_ heve: __s." says the Univet-sity of Nlissouri's Kichn. "When they cnuldiCt their Dew. w•e saw ;i /Iron in husittess. But slowly i['; Conlin_ hack.. " 1Cs haul it IItink ul' it ;;s a total tyin- ,ti in 1itu:ttio11 IIC:.RINC by cnnunit(in_ to one hr:inti. %ochre _oin_ rn ntakC flail h B of s de l l ii J i ih iJ i%"en ;r ::oines :'o exCtusive �rwid con:ra,c:s :vi:ft 2cucz,- r bers." says Roumph. "A typical sc: col district contract Pro - non Oehose .Ind MA -d .iourrUli. 7raS;danr vides :SCO to 5C5 per student per year. That means a district ) .;r;c 1tce-ore_;aanr or _aD b1.;r1`erJnn !ac...;now ;;;e inside .vith ?0.000 kics may be abie :o realize X900.000 Der year." _. 1. As xtVenc direr:or a1r Sourlrern ,r,Jicrjco Universav- .`n daveiooed a; crocr:im ,-jr.orcorz7ie soonsor- Does a smaller school get lower numbers? �.as .;nd ,;n exc:us;ve ceol :wtr/7 Co;e'hzr:, cra. Sao rho ie.6' here s little variation for volume or anrollment." says -unds :Dison :rom .3.30.000 'O S-r0U.CCC onnu;Jly :n ;usr GeRose. Deinograchics—:n terms of income !e:reis in a dis- <J c;ir ; e.;rs. trc:—are more !ike!v to affect 'Me revenue !eve! ;flan size.' � :'/tie^ Rcumen :vas mzrxerrng caordin; rcr for Sc. -mai Ois- "' ;. J !il ,=.onto. rha sc;rol dcara 'hrazraned :o cis.Tanile What formulas are used to establish the revenue level for .,, ';inn sc:;aci ;r1,!avc arogrrr unless'; 7,incr.;l succor,* the scaaol district? =; ;c(iid::e,CurJc. Curr/crl;;e_^.ariaredwnx,,aaeiie:ras:vasrhe "Our ;ompany has its own .vay of struc,uring thase, or;,no sort dr;+..t Jea! 1r r,`a X - 1S !eva', dna deals."says Roumoh. "'Ne negoriate three things. Firs.. the � /�0 0 1 fJt,O r� / rrr :h.,n.�G00.0GG:iJiJe:i L. iiesalnnr.�.11(:. ! :e that Jr be "D90.900al ') hexa usive rights 'v. r year or mare. -.:;.;:-.:Ira ::vv ccnsuit;rrrs :nzrkef .his concaur ro _--mver- decenc;nc on the ;istr;c:'s size. Then there :s a guaranteeu :r`31:^0(1!(1. ger@ is :i/,.r,11e:7 Ininlmum c0mmission on ?%,V! .crvtng sold -1@','s sav :,n- ") ;`d or„nu �.,c:us,,ve.at7eilorr7enon. otner SZO0.000 ., vear—•on ail soca revenues. Tire shirr, nor r� ') is an additional amount if Dr0iec:ec saies are ,xcaeded.' A :J)ry 7idn” we see this :,paroacd 10 year zoo? :Wry note? f} ::uCat;;;nz,i its:ttuttons :retch ' ;n `� ?unuirq :s;s What assurance does the scaoot administrator have that -", i '.n sic -i." toys Roumon. ""'ire :.u.^.ii c :von t r :rise axes serlice won't Soifer? j .....:nit .,.vet r °unrino per ouc,i Is Ja;,trClinq !iverrr rear. !t Jotis do yr to the Fac: ."at'ne ve^aor has ,cmmirtac 7, 41 t .t ,o ce " alive in'i ainq ;r= =auzatr ;haa. nee , a ev s G c�°a. --co venocr :s Goin bIc :aur.< of men,,. ' ;ay., e.. ,.. o t tat - q f ;cCl:!Cna yea:agues. to se.! as :-.iucn pco as he czfl. =nc ^e s going to ce!l water ana ' tea ano scors drnKs as muco is ne an. The :vay ne does ;hat ) :Vhzr'.� the biggest hurdle you have to overcome in selling is ,o mage sure :he customer has 'he irides, variety of pros- ')Jr3naeXC:rJsivecanimc.stoscnoolboardsvndadminrstralors? uc:3 avaiiaote. b make sure tl:at no machine is aver amps) or " iie btagest :lurcle is getting them to :,eiieve ',re num- broken. and to install more macnrres at more locations.' 42 FESRUARY 1993 FM 1 Pros... for the oaerator Revenue generation. Exdusiv theory should increase an opera overall revenues from the sales specific product lines. Signing bonuses. Contracts us carry an upfront Cash conrriburi commitment at the time of slcnin Support is often providea for grams and services that :vouiti not ermse be affordablelavailacie. Labor/equipment savings. The p0er usually assumes responsibdi the servicing, maintenance, re purchase :and replacement of vers and disoens:ng'quipment as :v related refrigeration and ice -ma supplies and equipment. Traffic. Suppliers rout:nety s promotions to attract custcmers generate goodwill. These increase fic for other produc: sales as -,veil. fop the suoalier Site monopoly. The manuiact gets exclusive on-site access fo product caregory specified. Long-term contract. Manufact is freea Irom bids and contract ne ation for ane term of the contrac: has more time to devote to marke promotions and customer service. Enhanced image. Manufacturer lances :ts image -with cus,cmer being associated with hes, organ tions services. athletic;soc:aI eve ac:ivtties and programs. Market research opportunit Nlanufac:Jrer has accass ,a 3 ma audience with .vhich to conduct search. les, products. and solicit i to refine marketing. advertising promotional activities. Cans... �... for the operator Reduced choice. Cus- tomers with alternate brand' preferences are denied on-site �'��-y0'" access to these products. With- out competition, say some, manu- facturers don't have the market pres- sure to perform. Foodservice budgets can be under- . mined. Removing a high-volume., high -margin product group such as d ity in beverages from a department operat-.d tor's ing budget—and moving the revenues s� or the and profits to an overall administration budget—can seriously skew existing uaRv financial ratios and projections. on or Foodservice departmental author- ity can be usurped. In a worst case d pro- scenario, an administrator indepen- oth- dently negotiates the contract with the manufacturer without consulting food- i9 sup- service. which is then required to meet d y for tha terms of the contract after the pair. tact.(Don't kid yourself. It has Mao- ding- ao-ding- pened.) ?l eit as Negotiating handicaps. These con- king tracts can be extremely detailed and difficult to negotiate. Savings and reve- irj ,age nue increases can be exaggerated. and Manufacturers. who have negotiated ;raf similar contracts with other cus- d tomers. have the advantage of expert - encs. Most experts strongly recom- mend hiring a consultant to lead you �. through the process. urer Less room for error.The longer r the terms of these agreements mean mis- takes and oversights can cost the oper- urer ator for a longer period. and for the suaofier d ting. Higher upfront costs. Signing bonuses can be significant and tie up an. funds that might provide more return s by elsewhere. Minimum annual cash out - i -a- lays are committed in advance. d Ws. Market risk. An operator's volume U may not increase to the degree ax- ei les. pected if customers find alternate rker sources or competitors brands. d re- Terms are fixed. Service terms are d in fixed for the length of the contract and d and usually cannot be renegotiated to pass an increased expenses. a yourcusumtets!nad:'s ys the Univcr- sit-v of Iowa's (Bowers, Another cont ol'these contrtcts usu- ally appeals in Qte I'mil ol'higher bev- etagc costs to (tie operator. "Essentially. these cuntcicts Elimi- nate the middleman. The cumpanies charge more for the product and then sive the money back to the university. None of this is dune without an e.e- pense to the students,' Bowen says.' -It can be a wav of charging the customer more and _,ivin_ that money to the uni- versity. it's a redistribution of dollars. a reptnitioning of dollars: '"Pepsi and Coke c:m paint a pretty rosy picture for university administr a- torx. There's all aIIIIUdd of 'What can we do to assist you in your time of ne-dT." says Richard Turnbull. associ- ate director of university housing and dining services for Oregon State Uni- versity, in CUlv:alli?. "It's easv outer why athletic depart- ntents embrace these contracts. Thev don't Cost theta :mvthing. Its aixo e:tsv It) sc;; Why t'4 ,user% ire i. often alarmed by them t>_C uase We do p:ay a price. Orr un State's lung -term a_ro;Lment with Coke was drivel primarily by the athletics drp:artntuu, tvhiclt needed S t million fora new scurehoard. A cam- pus -wide exclusive contract for foun- (Uin :and bottled hevera_es got the scoreboard but foodservice is pitying mon: rorhever•gcs, "Cake is recouping' its upfront muncv from higher product prices." says Turnbull. ..Who pays those highcrprices'' Res- idence hall students. Once we Knew for certain the university was guin_, with an escittsivC brand. our C116CC w;ts M tubby either to minimize the impact on price or u, build something in lOr the residence hall students. The result is Illat we're paying higher prices, but lvtt've got 'S300.000 in renovation muncv t:omin_ in uver.ix years far m>- idenct: hall dining facilities." ' 7ic important thing for toodsen'ic�: directors with these deals is to be in- clude, in every. aspect nr the negotia- tions:"s;tvs Kathleen Gianyuitti.dinin-, service-, director at the University or Rhode Island (UR 1). in Kinston. "We've all heard the stories of col - FM FEBRUARY 1998 43 `J �s:�11 L7 ������•S.t,�3� ,,r��`i,���iit`I!1 i `i�l•i�� Ic••,, • h.k,:-l,resiticut" uhu nIuc>,illculi;ll Ir•,:! hint linnt a hevcracc t:tunp-ally fur ex- ut:•, nuc dtunr, Wt.- ciu,i�.c richly. ;Intl laud>t:rvicc Intl- vic;:� ,lirc�_tur ;11 a n; up Ravin•, ti runt fur tllr sclu)ul Ih;tf nal iu„duct. These deal, ahl•cet sur "INI- vet sitalvd :in vx�la iiy It, tau husiness. TIlQy IITCut the siva hralltl cunu':,c I,ricc '.vc pay I'm- ilio product. what •'The adillitli,u'l- Rru,aucl� we ;n'c 1110%V k.1 to sell :utd tars Ileo it ;:N a vhcrc they c.w l,c .old." windfall ill' ntt,ncy. III 111c nc_„tialiunn at URI lh;;l 11,111 I'.u,tl�crt'icc is I,rn,iu _JCI ::n 1 u,i V tic:iI tViI:I Illc,ult: :lcalin_ with il:,: inclutletl :all ill,. :t[ impel ,.vita iil� ,i;atuuil!i. "L••tn": - . '',��`lcr,: , ntv IW1 hill •.bC ,'ll 111c hc•.; �hc :;t itiN. li al -,,c enultl. "I'lI„1 of ti,:;t!tluittia:int, rcc:>nrnw:nln chat +crviccart:a� I •,vuuld tn,lclu, I,c ipc!wlt:d in ennuaci dis• hk: cel'; ca1'cf11f I„ i,,� Itaain•_ hl'_Ilt'r I,ricc� uuticr IIIc ^,nialin_ the can- „nli:;�l." to I IRI'. c„nn;tel. vcndetl Irata ".ay.l�ichtt incria ctf Irnnt 7i "!'lint_. tiftctclitlry �cln:(lulc.. .:nl� i„ `:I .toll iu,nll:tin i,c`rc:a_c .pcciivin�: whu.tuc!.s Ilt� cnulir�. n:•.. .li,. ,.h,:tinletl iui nit,tic>t in lila „i enln..r v„tl"rc nal _ nn. 1t, I>t ,:,•::,�:•.t,ccra livevc:(rperuul. ahic I„ <lwciiv eveCylltin=. lltc _St„�t I>nclles loon the ht:vcra�c• hl__enl paint i� lu U'`r lu nta6c Iltc 1,c. Ill HeallhSoulli's agreement with Cora -Cala. the organization became the exclusive provider of rehabilitation and other services to Caca•Cola employees. Cake got exclusive access to HeallhSoulh's 1.700 facilities nationwide. Coke is also a sponsor ni HeaUtlSoulh's " Go Fur It!" roadshnw (above). -.which reaches thousands at yuuuq people annually. tati„u.Nhip.1 ,r:tl 1r411nci\1111). "ltulll "ilio. want 14, "Cil nlm-11 h>rutlucl ;1. 111k:” i:ut. R{ -lh .i,icN tt:nn w sali�lw :1.� nl:u(v iunlunlcr�;;. hlc. Y'tnt•sc :)( 1u It,c•m un !Icu.�• li �l in -fine sepinvies tha", ]OCR UM ProduC1 Specs 3,vcit,yls aren't the only Colegory in How it works. Typirolly. a foodser- hers are simply handsil,7l;a. ,,area ,JInI:!1 Ill.- uni, ac, exclusivY seek vice opelatur hires a manuiartur?r to Iments. "Legally. there's nothnul Io pre ->) j .alrrl!;m-ms. A urowinq numbitr of roin- install its htaiided conrept in an opera- vent me from selling anodwr imauilar-• ,):a1111S r+rP ;'Helonq to loc!( up prodiiri hon. The uperalor in turn :agrees That turor's trot dog iron) this supptier's .;;µi::1 canons by designinn h)nikey in- only Hit! manufacturei's pl odnct line station, hot the fact is. I wonldrl't do il." � :uu; elyelr/ ;4,1[10113 that advertise. dis- 'roll he sold at that saivety. Such exchi wil! hilt nun-huldirta a' I)I.ty.;Illi' 8RVW,';1lIIl,1C11fe product lines. Arranyentt,,nis `larl. 5uinelimes the rangemellfs appeil to both mainim.clUr- R -��-, oW:lmor p:ays oilly 3 Ir111111IND'1111011111 171 ers and opkr;ators lot ,7 varwiy 1)t re;a- ?1 ` ih(lsrtvely:anditsprndnetinnPaniputenr. :inns. Flit the opei;Aur. thm) avoid i - lhi! Iiii1111tflftnle! IPUL)IIl)!; Its Capital I;ost 1:0111plew lock ,lilt i)I t:olttpt!(Illtt nl,ll11lei _ ' a -lilt) front nu:reaself Sales of prndtlu,lt ilial 1111 urlijiul111 .ill opelalioll :lim ;muni .1 `l 1 (;,d1U11. fit othul raises• ille opPlatol buys Info(-tertll i:mit11Nmient th:lt C;;II iil5iricf 9 a " 1 ilul,!tpnpnlntU :uul. in lxrlt:lnae lilt axc!n- fioxihihill ii Hit! Oper ;lot dl;I;uiP I:n:; r`, t ;;vliy, lu:ynil:ll .1 l,)+,el!t pl u::! lot Ilii! tnrlus': 11:1,11! ilwil of .t ;periiir, I:nnrcni �Jt) pnxlnrt Irn:r 1111,, hip vl IN! :ulrP!inu!nl. Flo ilio nl,;nllf ;clniilr. 5:;1e!; vninn:l; All suit; III mhor opta)ns nely he in• or Illi! teaillic'd Inndnct Inst.,.;!utosl :n- l ' '�_ ! ,:flllh;t h; II);lllllfarhlll'1'-I)II)4ltlt!!I il';llllllpj `larGlf)I'r of till! -;;If- } tui alit;:;ervory stail, regid;,,iIv ;t:iu;tl WWW! nislat'alon. Thl::n:a(:ni;,rttn,!( '7 "� nicltl i 1W;IVs :Intl plrnnununs• (;:lsll Ilse ill!ntlriis tram s;n ,nupluul rrl:auull �) In•linn and maniltaUUref brand:IatlnOS are ';Ilusidws lot- vollllne IIIr;Pa5;;;; :.hove ti ;1111) that atforlls ollpornitlilits to (I!;' f} another way:unpfiers seek to lock un I;erraill levels, efr. the r)perator's r,U5tonler base for proal- prnuuct:pet:.Above:ASchwansSummit Some arrangements call be /Ply in- act testing, customer surveys. and 11 Sal) mut at Orake Universdy. formal. One healthcare director says market research 44 FEBRUARY 1998 FM ,Oanteca (-Uvizttec gehooP ctsthidt Post 0tfice Box 32 - Manteca. Cali tomia 95.i3b • Telephone (2W) 825-3200 August 16. 1999 To Whom It May Concern: In the spring of 1998, DD 2-_arketing, Inc., met With Manteca unified School District to discuss the scope of services the fire offered in regard to exclusive beverage contracting. Manteca Unified School District had previously negot=aced a five -ye exclusive beyerage contract for its high ;Chools. With the contract coning up for sanewal, the district chose to Engage DDM with the task of coordinating. structuring and negotiating the next cffer. The resuLts of the process that DDM coordinated were phenomenal. The new offer is able to increase like revenues five fold! The a:ccercise that DDM was able to provide co the process was clearly a key component in increasing the value of the of-er. The district had limited experience in negotiating an exclusive beverage contract. By com.uining efforts with DDM, we were able to position ourselves favorably, even after their fee. The district highly reco:rnends this firm to any school d.istr=ct. Sincerely, iANTECA UNIFIED SCHOOL DISTRICT Sti$ A ' stas��P era endent Easiness Services JO:dm Academy School District Twenty Dr. n""aa 1. i! vai : salp"WR MU,ss orsaw& .yzR1k121ff1,tlow !} .ce Frio::: 71"9-4-Mdd 7674 ,tions. d n?aa Boultren4 Coi'drada SprtkSr� W *-911:-3899 Fe= 719.39i -9S34 Z - Mail: ��l�dK"'.l�fiCt•.e9� Web Sit$. -,14ne.d29.ro-edu 1999 To Whom It May Concern, This is a letter of recommendation for DO Marketing to companies or school districts that are considering rights agreements with firms to provide products or services in an exclusive manner to their organization. Academy School District Twenty has c--ntracted with DDM to handle all marketing matters for the district over the Last two years and it is without raszrvaticri and with The highest confidence that 1 recommend them to any organization. Durx:g a short Iwo year �eticd of time, ODU has been rasponsible for initiating and ralrnir atirg an exclusive rights agreement with Coca Cola and a preferred provider agreement with U. 5. Wavz. These Two agreements will biting just short of $6,000,000 in guaranteed funds to the distrix. over the ned ten years and has positioned the dis.rct to FurSue oMer •similarly lucmtive exclusive rights agrearnents which will further erhanca our ability to offer programs and services to cur students that we would other wise be unable to provide. Tnr.:ughcut our ralaticnsi Bio with DCM we have ex eriencsd nothing but the highest professional and ethical c^nduC ci ail of its principals and recrewntatives. They have prrvided cutsanding sarrics beth Ware and after we signed the conaaay for DOM to sarre as cur markeiu:g agents. They have been flexible in meeting our timelines and pec:.,iiar requirements and tf.ey have: been steadfast in representing what was best for the distric.. T:ey have been ex'.rameiy su= ssiul in developing AFP's which have elicitsd responses from competing companies and in negotiating cmuracs with these companies amici have proven extremely kw alive to the district. F:rally. I want to stress that wiih virtually no exceptions, Academy School Districd Twenty has rocsivead far mare per student from its exclusive rights agreements than schcci dist; dt .s who neectiated their own agreements or who used other marketing firms. The district's students, staff, parents and taxpayers have been the beneficiaries cf DOM's outstanding competence and know-how. In closing. I give DOM my highest recommendation. In the Academy Tradition: Donald J. Fielder, Ed.D. Superintendent Our mica's L a prow& a rick --f w key *WWW AwFierhar .t. �......e,.� ,s.+..A&k SMANU are rweoai► 048 r bWW WY*firs sreosst "M October S, 1998 The EducationalAffiance of Pueblo:. . ... apartnership for quality e&cation University a(Sauthem colomo 1=0 9onfarw Blvd. Pueblo. CO 81001-4901 (7191549-2511 Pueblo Schaal Dietrict No. 60 319 \V. l Ith strait Puebla CO 51003-2&M. (719) 549-7loi Dain: Roudebush, Ph -D. Mr. Ted Makarewicz Direntor of Purchasing Fulton County Schoois Coik$e Park, GA 30349 Dear Mr. Makar-wic-, Aisisrant Serricvs .i=6are 1'Ice Prvs:denr,foa,tdmfnisrnatie,+r Son -ice, I .m wricing to you at the revue i of Dan Depose, President of DD Markmingt. Pueblo School Dlstric: has beak associated with DO Marketing for several years. -They are the primary marketing company used by the District. Cv—: the ca4t se"ni years, DD Markc%ing has managed the development of our Corporate Secr:_crsihip Program, ne;ctiared ==.Iusive provider agreemc s for soft drinks, and is rurcitiy assisting .hc Dissc: in pre:: -red pravider agrcr-merKs for teiemmmunications s -,sterns_ The Cxpcmtc Srrertscmbip Program consists of advertising sales and development ofin4vnd serYictsto eahanG .hc :a-=rrirular ac:iritics of the District Through the diligence of DD Nizekeing and ;he support of the ?ueblo community, nc iy 5200,000 is raised eah year. Additionally. DD Niarizarring was instrurn=tal in the den clopahe:ht ora tenegntiared eantract for sod drink vending. Pncr to fie ne.v agzresne-tt, the Dis ict was receiving appra S6.16 per stude•:t. T,ie Heir- pac�ajc is r--;pr_-tc•1 to generate nearly S-27 per sunk-sa ror the next 12 years. �e tenacity and;rcfe=sirnaiism of DD Marl ening were tiro attributes that allac� this to oar. Cu::elationship with DO lyra kering ;has beet positive and has provided a nc:nendous beserit to our stud ata and community. If this we t not the case, I can guatarttr- you that we would not be continuing our relationschip into the arena of telecommunicarions. DD Marketing is the premier firm in the nation for K-12 and higher education marketing programs. 1 would strongly encourage you to cattsidtK establishing a relationship with DD Marketing if )VU have a new to supple.nent. your funding scurt:--� for students. If you would like to talk in greater de*ail, feel frac to call meat 719.549.7101. : Sincerely* David C. RmWebush, RLD. Assistant Superintendent . SCHOOL DISTRICT Kenneth Stephen Burnley, Ph.D., Superintendent N'ovc:nhcr 26, 1997 To Whom It inlay Concern: In the spring of 1997, DD ,Marketin„ Inc., tact with Colorado Springcontract School District Eleven to ciiscass the po,sibility of' bcconlin�c the sole -negotiator of all exclusive soft driu}; coact for our -i :e,000-s:udc:it district. Consic'crtll� the many intricacies involved v.,101 securing .1 multimillion -dollar ;oft drink.dcal. we rc:;!i,.cj tela( coli::in,2 a company twleich specializes in this field would definite!)• tic in our bc:;l Illi \with the talented staff of lily \larkctirg would brim, considerable Specif is cx!:c. knee :and cxll�rtisc to thc: tabic, experience and expertise that wo odicr%Vise Would be Wk- ,a DD \i:;r e;i::g did for our district in the mantles that follor:ccl reinforced its position as in this :: `.\ .:..1 c.Xciull" fic'.d of exclusive seil't drink vending. DD Markcteng' - s staff tel.^. lll�'7i:::::0;1 I:iU e1S i('alel be"i'ming to end, pittir1' Sof, dt•Illl: ;!ants a'iltllst Clch a;!:c:. DD ivLlr c:in� ❑r,: mil.: provided leadership in the rcducst for proposal preparation] but also o! fcrc:i wCt cerin: in;!ustr': resc: rch and exacting detail in other doeumems and the finLt contract. i ilc result \vas c:;Ir,plecc hu`: -in. from site administrators (no mean accomp!Isilmellt)! W11cn all was sa... ,,,,;.+ done ...:d tfic dust Colorado Springs School District Elcvecl found itscll" with the C_.Icr.ai:iL' .:XC:t1S1\"e SCI( drink- colltmct-ill theIl. IlUll: a te-YCI' c..i with Coed -Cola which, ii• saics inee:m%'cs :.. rc::c!icd, will be worth as much as $ I 1 million. That translates into about 534 per sutc!ent pe:r yC:tri Dcspitc the lac; th:u our school district has Ycry strong nlanageni-c t and a highly competent pracurcnle:lt dLaarclne::t, DD \•larketing's thorough knowlcd,c of* raft drink vending and its profcssion::i — alld unyielding, — approach to the negotiations proved to be invaluable. I highly rcco:nrlcad this talcatcd firm to ;Ill)' school district. 1(SBJPIIl 1115 North El Paso Stmt Colorado Springs, CO 80903-2599 (719) 520-2001 Fax: (719) 520-2278 bumlcy@cssdll.kl2-r-o.us