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LTC 271-2017 Healthy Snacks Vending ProgramCity of Mlaml Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachfl gov OFFICE OF THE CITY MANAGER 271 -2017 TO: Mayor Philip Levine and Members 4f the City ommission FROM: Jimmy L. Morales, City Manage DATE: May 18, 2017 SUBJECT: LETTER TO COMMISSION HEALTHY SNACKS VENDING PROGRAM The purpose of this Letter to the Commission (LTC) is to update the Mayor and City Commissioners regarding the healthy snacks vending program for the operation of snack machine at various locations on City properties. BACKGROUND The City of Miami Beach (City) and Bettoli Trading Corp. (Concessionaire) are parties to a concession agreement, dated May 3, 2012, for operation of snack machine concessions at various locations on City of Miami Beach properties (Agreement). The initial term was for five (5) years commencing May 1, 2012 and ending April 30, 2017. The City extended the term for one (1) year commencing May 1, 2017 and ending April 30, 2018. The City may extend the term for four (4) additional one (1) year periods. Under the terms of the Agreement, the snack options offered by Concessionaire shall generally include healthy snacks such as whole grain chips, multigrain chips, vegetable chips, crackers, nuts, reduced fat popcorn, baked or popped chips, sugar free chewing gum, fruit trail mix, nutrition bars, granola bars, trail bars, fresh fruits and yogurt. Subsequent to the commencement of the Agreement, the Administration worked with Concessionaire to develop a specific standard to determine healthy snacks. The Administration considered three (3) existing standards which include 1) Fit Pick, 2) United State Department of Agriculture (USDA) and 3) Miami -Dade County Public Schools (MDCPS). The Fit Pick standard was selected and all snack machines located in the City's parks and youth centers were required to provide at least fifty percent (50 %) Fit Pick items. Snack machines located in "public" locations (i.e. parking garages, office buildings, etc.) provided certain Fit Pick items in an amount less than fifty percent (50 %). All Fit Pick items were clearly identified in the machines with stickers to alert the customer. Due to concerns from residents, the Administration was directed to re- evaluate the healthy standard matter. The Administration presented the three (3) standards referenced above at the October 19, 2016 City Commission meeting. The City Commission directed the Administration to: 1) implement the MDCPS standards, the highest standard of the three (3) options, as Letter to Commission — Healthy Snacks Vending Program May 18, 2017 Page 2 of 3 contained on the chart on the following page (MDCPS Healthy Snacks Standard), for one hundred percent (100 %) of the snack selections in the vending machines located in parks and youth centers, 2) to implement the MDCPS standards for fifty percent (50 %) of the snack selections in the vending machines located in other City structures, such as garages and office buildings, 3) to reduce the annual Minimum Guarantee payment which Concessionaire pays under the Concession Agreement from $12,731 to $11,000 annually and 4) to revisit the item again in six (6) months. SIX (6) MONTH UPDATE For contract year 2015/16, prior to implementing the MDCPS standard, the gross sales for snack machines were approximately $63,250. Since implementing the MDCPS standard, for the six (6) month period from November 1, 2016 to April 30, 2017, the actual sales were $20,335. The Concessionaire expects a larger decrease in sales during the next six (6) month period from May 1, 2017 to October 31, 2017, due to summer, and projects the total sales for the first twelve (12) month period of implementing the MDCPS standard to be approximately $35,000. Since the City receives twenty percent (20%) of Concessionaire's gross sales, the decrease from $63,250 to $35,000 amounts to approximately $5,650 less revenue to the City. The decline in total sales was anticipated as healthy items in vending machines tend to be less popular than typical items; however, the City believes providing healthy vending options is an important part of encouraging a healthy lifestyle for our residents, visitors and employees and is optimistic the healthy options will become more popular over time. J LM /KGB /ES /M del F: \RHCD \$ALL \ECON \$ALL\ASSET \VENDING \LTC - Healthy Options Update (05- 18- 17).docx Letter to Commission — Healthy Snacks Vending Program May 18, 2017 Page 3 of 3 MDCPS Healthy Snacks Standard Brand Item Price Popchips Sea Salt $1.75 Popchips Barbecue $1.75 Popchips Sea Salt & Vinegar $1.75 Popchips Sour Cream and Onion $1.75 Popchips Cheddar & Sour Cream $1.75 Popcorner White Cheddar $1.25 'Non GMO coming soon $1 -50 Kettle $1.25 'Non GMO coming soon $1 -50 Sweet Spicy Chili $1.25 'Non GMO coming soon $1 -50 Jalapeno $1.25 'Non GMO coming soon $1 -50 Sea Salt $1.25 Indiana Popcorn Kettlecorn $1.25 Snyder's Pretzel Old Tyme $1.00 Kar's Nuts Mango Pineapple mix $1.25 Rice Krispies Whole Grain Treat $1,50 Cheez it Whole Grain Cheddar $1.00 Gold Fish Whole Grain Cheddar $1.00 General mills Cocoa Puff Bar $1.25 Nature's Valley Oat & Honey $1.25 Nature's Valley Trail mix chewy $1.25 Frito Lay's Reduced Fat Doritos Nacho $1.00 Frito Lay's Old Tyme $1.00 Frito Lay's Reduced Fat Doritos Sweet Spicy Chili $1.00 Frito Lay's Reduced Fat Cheetos Puff $1.00 Frito Lay's Reduced Fat Cheetos Hot Puff $1.00 Frito Lay's Baked Cheetos $1,00 Frito Lay's Baked Cheetos Hot $100 Frito Lay's Baked lays Sour Cream & Onion $1.00 Frito Lay's Baked Lays BBQ $1.00 Frito Lay's Baked Ruffles Cheddar Sour Cream $1.00 Frito Lay's Fantastix Chili $1.00 Frito Lay's Fantastix Hot $1.00