02-1181Council File # � �
Green Sheet # �\'�'J.��\
Presented By
Referred to
RESOLUTION
CITY OF SAINT PAUL, MINNESOTA
Coamv_ttee: Date
1 WHEREAS, the Division of Parks and Recreation issued a Request for Proposal soliciting
2 proposals to create an exclusive soft drink supplier relationship with the Division; and
3 WHEREAS, the Division of Pazks and Recreation, based upon its review of all of the
4 proposals received, wishes to enter into an agreement with Midwest Coca-Cola to provide t�is
5 service; and
6 WHEREAS, as a result of this five-year agreement, Midwest Coca-Cola will have
7 exclusive right to supply soft drivks, bottled water, juice drinks and sports drivks for Division of
8 Pazks and Recreation facilities aud programs; and
9 WHEREAS, as a result of this agreement the Midwest Coca-Cola will provide the
10 Division of Parks and Recreation with guazanteed unit pricing and comtnissions, and additional
11 partnering benefits valued at over $50,000 annually, now therefore, be it
12 RESOLVED, that proper City officials and staff are hereby directed and authorized to
13 enter into the attached agreement with Midwest Coca-Cola establishing them as the Division of
14 Parks and Recreation's exclusive soft drink supplier.
Adopted by Council: Date �e�. �� vvba—
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Requested by:
Divi ion of Parks and Recreation
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Form Ap �oved by Citr'y Attorney
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Mayor for
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Adoption Certified by Council Secretary
DEPARTMEM/OFFICE/COUNCIL DATEINITIATED GREEN SHEET NO. 113221
Parks and Recreation December 10, / � j
2002 V p.�'�r�
CAMACT PERSON AND PHONE INRIAUDA INRIAUDATE
Mike Hahm - 266-6444 � DEPARTMENT DIRECf, � tA�C ¢ crzr couNa�
ASSIGN <
NUMBEfl FOfl Z CrtV ATTOPNEV V'�� _CRV CLERK
MUST EE ON COUNCIL AGENDA BY IDATEI ROUi1NG ,
OFDEH _FINANCIAL SFAVICES DIR.
12/18/02 3 MAYOR (OR ASSISTANT) 5 Parks - Hahm
TOTAL # OF SIGNATURE PAGES � IpJP ALL LOCATONS WR $IGNANREI
ALTION REQUESrED:
Authorize City officials and staff to enter into five-year agreement with Midwest Coca-Cola as The Division of Parks and
Recreation's exclusive supplier of certain beverages, including soft-drinks, bottled water, juice, juice drinks and sports
drinks.
RECOMMENDATIONS: ApO�ove (A1 or qeject IA) PEHSONAL SERVICE CONTRACTS MUST ANSWER THE FOLLOWING QUFSTIONS:
_PLANNING GOMMISSION _CIVIL SERVICE COMMISSION � Has this person/tirm ever worked unde� a canttact for this tleDartment?
CIB COMMITTEE YES NO
A STAFF 2. Has this persoNtirm ever been a ci[y employee?
VES NO
DISTRICT COUNCIL
— — 3. Does this Derson/firm possess a skill not normally possessetl by any curteM ci[y em0�oyee?
SUPPORTS WHICH COUNCIL OBJECTNE? YES NO
Ezplain all yes anawers on separa[e aheet and attleh to 8��� �heet.
INITIATING PROBLEM, ISSUE, OPPORTUNITY (Who, What When, Where, Why).
The Division of Parks and Recreation issued a RFP to create an exclusive beverage supplier relationship. Resulting from
this process, the Division wishes to enter into an agreement with Midwest Coca-Cola.
ADVANTAGES IG APPftOVED:
The Division will derive a variety of additional benefits from Midwest Coca-Cola in exchange for granting them
exclusivity, including annual cash contribution, donated product, use of specialized equipment and marketing support.
The annual value of these benefits is estimated as over $50,000.
DISADVANTAGES IF APPROVED
None
DISADVANTAGES IF NOT APPROVED:
The current opportunity to derive additional financial and marketing benefits related to soft drink/beverage services will
be lost.
TOTALAMOUMOFTRANSACTION S_SZH OOO - S4O,000 (8f1f1U8I) COST/flEVENUEBUDGEfEDIpRCLEONEI YES NO
FUNDINGSOURCE Midwest Coca-Cola ACTIVITYNUMBER 325-23141
FlNANCIAL INFORMATION (EXPLAIN)
CITY OF SAIN'T PAUL
Randy C. Kelly, Mayor
DIVISION OF PARKS AND RECREATION
m3, -lly��
300 City Hall Annex Telephone: 651-266-6400
25 West Fourth Strcet Facsimite: 651-292-7405
Saint Paul, Minnesota 55102 TTY: 651-266-6378
wvrv�.cistpaul.am.us/dept/puks
December 9, 2002
To: City Council President Dan Bostrom
City Councilmember Jerry Blakey
City Councilmember Chris Coleman
From:
Subject:
City Councilmember Pat Harris
City Councilmember Jay Benanav
City Councilxnember Jim Reiter
City Councilxnember Kathy Lantry
Bob Bierscheid, CPRP ��
Director of Parks and Recreation
Beverage Pouring Rights
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The Division of Pazks and Recreation is in the final stages of contract negotiations with
Midwest Coca-Cola. The agreement is a result of a Request for Proposal process that has
been in progress over the past six months. When approved, Saint Paul Parks and Recreation
will exclusively sell Midwest Coca-Cola products, and in turn, will be provided new benefits
valued at over $250,000 over the life of the 5 year agreement.
I anticinate that the com leu ted aereement will be presented to the Council for consideration
at its December 18�' meetine.
The extent of the benefits that Midwest Coca-Cola will be providing to the Division in order
to establish this 5 year relationship is a reflection of the high quality of programs and variety
of recreational services that ase assets to the City and its citizens. The agreement will also
serve as a model for future partnering efforts with vendors interested in establishing
relationships that can generate additional resources to benefit Division facilities and
programs.
Attached is a sununary of the agreement, including an outline of the new benefits available to
the Division. I enthusiastically recommend this agreement as one that will bring new
benefits to the enrire Parks and Recreation system at a time when they will surely be needed.
ca Mayor Kelly
Dennis Flaherry
AA-ADA-EEO Employer
City of Saint Paul - Midwest Coca-Cola
Agreement Summery dl_1lYl
Citv Objectives Defined in Rer�uest for Proposal
I) Meet or exceed current unit pricing
2) Meet or zzceed current service support
3) Mazimize annual "cash rights " financial contribution
4) MaximiZe marketing support and partnering opportunities
Term
5 yeazs/2003-2007
Exclusivitv
Midwest Coca-Cola products will be exclusively sold at St. Paul Parks and Recreation
facilities and events during the terxn of the agreement.
Annual "cash rights" sugport
2003 - $28,000
2004 - $30,000
2005 - $32,000
2006 - $34,000
2007 - $40,000
Total - $164,000
Full Service Vending Commission Rates
25% - 12 oz products @.75 pricing
35% - 20 oz products @$1 pricing
The local Division facility managers retain authority to set pricing. A higher vend rate
will yield a higher comxnission and a lower vend rate will yield a lower commission. The
listed vend rates haue been recommended by Coke, based on research and experience, as
those that will yield the highest net commissions to the local facility. Local facilities will
continue to direct the commissions proceeds for their use. Commissions from full service
vending are forecasted to generate $55,000 annually.
Recreation Center Marketing BeneTits
10 free cases of 12 oz producUper center/per year =$2,808.50 annual value (division-wide)
2 custom banners/per center/per year =$2,460 annual value (division-wide)
1 Powerade beverage kit for use at each center =$33,750 one time value (division-wide)
City of Saint Paul - Midwest Coca-Cola
Agreement Summery 0?.- i l Yl
pagetwo
Golf Facilitv Marketing Benefits
4 display coolers for non-beverage use =$3,000 one tune value
City-wide Marketing Benefits
490 free cases of 12 oz product/per year =$3,356.50 annual value.
Access to 1 Special Events wagon for the Division's use.
Other Potential Marketing Benefits
An aggressive rebate program for special events product sales, retuming a$2-$5 per case
dividend to the City for products purchased for sales at Special Events located in City of
Saint Paul parks. It is conservatively estimated that this can create a$5,000 annual value
to the Division and our event partners.
Free access to the "teamidentity.com" program, aliowing the City facilities and programs
to create and market custom logo athletic apparel with the City's brand images direct to
customers via the Internet. This can provide both an opportunity for citizens to purchase
apparel the is idenrifiable with the City's facilities and programs as well as a new revenue
opportunity for the Division.
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CTTY OF SAINT PAUL
Randy C. Kelly, Mayor
December 16, 2002
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DIVISION OF PARKS AND RECREATION
300 City Hatl Annex Telephone: 651-266-6400
25 West Fowth Street Facsimile: 6A-292-7405
SaintPaul,Minnuota5A02 TIY:651-2656378
www.cistpaul.�.us/depUpazks
To: City Council President Dan Bostrom
City Councilmember 7erry Blakey
City Councilmember Chris Coleman
City Councilmember Pat Harris
From:
Subject:
City Councilxnember Jay Benanav
City Councilmember 7im Reiter
City Councilmember Kathy Lantry
Bob Bierscheid, CPRP ,� f�
Director of Parks and Recreation
Beverage Pouring Rights - CR O1-1181
Attached is the proposed agreement between the Division of Parks and Recreation and
Midwest Coca-Cola.
The Division is requesting City Council approval to enter this agreement as item 21 of its
December 18, 2002 agenda.
As noted in my earlier memarandum dated December 9, 2002, I enthusiastically recommend
this agreement as one that will bring new benefits to the enrire Pazks and Recreation system
at a time when they will surely be needed. Please contact me at 266-6409 if you haue any
questions regarding tlus agreement.
cc: Mayor Kelly
Dennis Flaherty
AA-ADA-EEO Employer
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AGREEMENT
This Agreement, entered into the day of , 200� by and beriveen the
City of Saint Paul, a municipal corporation of the State of Mivnesota (hereinafter "Cit}�') and
Coca-Cola Enterprises, Inc., d/b/a Midwest Coca-Cola Bottling, Company, a Delawaze
corporation (hereinafter "MidwesY') .
WHEREAS, the Division of Parks and Recreation for the City of Saint Paul desires to
enter into an exclusive beverage agreement for its various facilities and special events; and
WHEREAS, Midwest submitted a proposal to be the exclusive vendor ofbeverages for
those various facilities and special events under the control of and sponsored by the Parks and
Recreation Division;
NOW, THEREFORE, in considerafion of the mutual promises and covenants contained
herein, the parties agree as follows:
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1. `Beverages" shall mean all beverages currently sold by Midwest or sold during the
term of the Agreement, including but not lunited to, carbonated and non-carbonated non-
alcoholic beverages, carbonated soft drinks, flavored and unflavored packaged waters, fruit
juices, fruit drinks, teas, energy drinks and sports drinks.
2. "Special EvenY' shall mean a Parks and Recreation sponsored event of limited
duration, occurring in whole or in part on city-owned property, which is targeted to a city-wide
and /or regional audience and occurring at locations where the sale of beverages or beverage
service is not offered to the public as part of ordinary business.
3. "Proposal" shall mean the Revised Partnership Proposal from Midwest Coca-Cola
Bottling Company dated November 12, 2002.
II. RESPONSIBILITIES OF MIDWEST.
1. Midwest shall make annual payments in each of the five years of the contract in
the amounts set forth below. The first annual payment shall be made within thirty (30) days of
the execufion of the contract. Each of the remaining payments shall be made on the anniversary
date of the execurion in each subsequent year.
Year 1: $28,000
Yeaz 2: 30,000
Yeaz 3: 32,000
Year 4: 34,000
Year 5: 40,000
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2. Midwest shall set the initial vend rates for the various products to be sold pursuant
to this Agreement as set forth in the Proposal, page 22. Any changes to the vend rate shall be
mutually a�eed upon by both Midwest and the City. The Division's £acility managers will
maintain authority to determine vend zates in the event that the City and Midwest cannot a�ee.
Midwest shall pay the City a commission on each product sold, as set forth in the Proposal, page
22. Parties shall annually review the amount of the commissions on sales to detemiiue if a
vending rate change is appropriate.
3. Begimiuig in Year 3 of the A�reement, Midwest will pay City a growth incentive
of $1.00 per case for sales of 20 ounce cazbonated soft drink and non-carbonated beverages over
the annual goal, provided that the total volume goal is also met. Total volume goals do not
include special event or fountain sales, and growth incentives are not paid on fountain product,
special event cases or cazbonated soft dtv�k, 12-ounce cans.
Year 3 volume goal:
Year 4 volume goal:
Yeaz 5 volume goal:
20 oz CSD/NCB ro oduct
14,200 cases
14,500 cases
14,800 cases
Combined products
Total volume goal: 19,000
Total volume goal: 19,400
Total volume goal: 19,800
4. Midwest shall provide products at the pricing set forth in the Proposal, pages 17
and 19, which shall be guaranteed prices for the first three years of the Agreement. Yeaz 4 will
have a 3% cost increase and year 5 will not be increased.
5. Midwest shall provide product beverages for sale at Special Events at the prices
listed in the Proposal, page 24. These prices are guazanteed for three yeazs, and will increase no
more than 3% in year four of the Agreement. There will be no price increase in Year 5.
Additionally, Midwest shall pay rebates to the City for each case of beverage purchased for
Special Events, as set forth on page 25 of the Proposal. One Coke� Special Events wagon will
be made available for use by the Parks and recreation Division for all spec3al events upon a two-
week notice to Midwest.
6. Midwest shall provide two pre-printed banners to each recreation center for every
year of the contract, for a total of 82 banners per year. Banners will carry the Coca-Cola� logo
and contain messages as determined by the City.
7. Midwest will donate 900 cases of 12-ounce soft drinks or Dasani water each yeaz
of the Agreement. Rebates do not apply to donated cases. Donated cases do not count towards
the City's total volume incentive goals.
Midwest will provide 45 Powerade kits and four golf course coolers to the City in
the first yeaz of the Agreement.
9. Midwest will, if the City chooses, offer access to Teanudentity.com, an on-line
store technology set forth in the Proposal on pages 11 through 14.
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10. Midwest will provide new or refurbished vending and non-vending retail equipment at
the onset of this Agreement to the locarions that have been mutually agreed upon by parties, and shall
fiimish all bevera�es necessary to offer a complete selection of products readily available at all
facility's vending machines, concessions, coolers and other beverage sales areas as specified in
the A�eement.
11. Midwest agrees to regulazly monitor and maintain appropriate levels of stock in all
vending machines, concessions, cooleis and Beverage sales and machines and azeas at the facilities
covered under this Agreement, and to develop, implement and maintain a delivery and inventory
schedule based upon the needs of the individual sites covered under this Agreement. Midwest agrees
that it will fulfill orders with a minimuxn order of ten (10) cases.
12. Midwest will work with the City prior to a special event to ensure that adequate
inventory wiil be available to accommodate the anticipated numbers attending the event.
III. RESPONSIBILITIES OF CITY.
1. The City will insure that Midwest beverages, including carbonated soft drinks,
non-carbonated beverages, fiuit juice, fiuit drinks, flavored and unflavored water, sport drivks,
teas and energy diivks aze exclusively available the Parks and Recreation facilities covered by
this A�reement, including all concessions, coolers and vending machine locations. No
competi6ve products shall be made auailable in the facilities, coolers, vending machines, or at
Special Events as covered in this Agreement. Specific exceptions to this aze noted in the RFP.
2. The City will utilize direct service from Midwest in the provision of full-service
vending, concessions, Special Events, and other beverage sales covered under this Agreement,
and shall not place any non-Midwest beverages in those locarions or in the equipment that
Midwest provides to the City.
3, A limited number of vending machines will remain in service at Division facilities
that will continue to be self-serviced by Division affiliated booster organizations. The City will _
require that these organizations purchase their product directly from Midwest.
IV. BILLW GS AND PAYMENT. Midwest shall submit invoices in triplicate to the City
department making the purchase clearly itemizing all goods and/or services provided. The City of
Saint Paul will make payment in accardance with Chapter 471.425. Such payment may be made
using a pay voucher, purchase order, or authorized procurement card, or department shall notify
Contractor of any problems, omissions, or defects in the goods and/or services received.
V. RECORDS, DISSENIINATION OF INFORMATION. Unril the expiration of six (6)
years after the fu.tvishing of goods, supplies or services pursuant to this contract, upon written
request, Midwest shall make available the books, documents, records, and accounting procedures
at its offices at all reasonable tunes for inspection or audit by the City, the State Auditor, or other
duly authorized representative. Contractor agrees to abide strictly by the statutes, rules and
regulations of the Minnesota Government Data Practices Act, Statute Ch. 13, as well as any other
applicable state or federal statutes, rules or regulations.
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VI. HUMAN RIGHTS/AFFIRMATIVE ACTION.
Midwest must comply with the City of Saint Paul's Human Rights Department's
Affirmative Action Requirements in Employment pursuant to Section 183.04 of the Saint Paui
Legislative Code, the Rules Govemin� Affiiuiative Requirements in Employment, and Chapter
A-17 of the Saint Paul Admiuistrative Code governing racial harassment. The Contractor agrees
to comply with all federal, state and local laws, resolurions, ordinances, rules, re�ulations and
executive orders pertaining to unlawful disci�mination on account of race, creed, religion, color,
sex, sexual or affectional orientation, national origin, ancestry, familial status, age, disability,
marital status, or status with regazd to public assistance and will take affirmative steps to ensure
that applicants are employed and employees aze treated during employment without regard to the
same.
VI. COMPLIANCE WITH APPLICABLE LAW. Midwest agees to comply with all
federal, state and locallaws or ordinances, and all applicable rules, regulations and standazds
established by any agency of such governmental units, which are now or hereafter promulgated
insofar as they relate to the Midwest's performance of the provisions of this Agreement. It shall
be the obligation of Midwest to apply for, pay for and obtain all permits and/or licenses required.
VII. CONFLICT OF INTEREST. MidwesYs acceptance of this ageement indicates
compliance with Chapter 24.03, City of Saint Paul Administrative Code: 'Bxcept as permitted by
law, no city official or employee shall be a pariy to or have a direct financial interest in any sale,
lease, or contract with the City. Midwest also affirms, that to the best of their lrnowledge, theu
involvement in this Agreement does not result in a conflict of interest with any part or enrity
which may be affected by the terms of this contract. Midwest agrees that should any conflict ar
potential conflict of interest become laiown to the contractor, they will immediately notify the
Purchasing Systems Manager of the situation so that a determination can be made about
MidwesYs ability to continue perfornung services under this contract.
VIII. HOLD HARMLESS. Midwest shall indemnify, save and hold harmless, protect and
defend the City of Saint Paul, its officers, agents, and employees from all clauns, actions, or suits
of any character brought for or on account of any claimed or alleged injuries or damages received
by any person or properry, resulting from any act or omission by any person employed by
Midwest in canying out the terms of this Agreement.
IX. ASSIGNMENT. The City and Midwest each binds itself and its successors, legal
representatives, and assigns of such other party, with respect to all covenants of this Agreement;
and neither the City nor the Midwest will assign or transfer their interest in this Agreement
without the written consent of the other.
X. TERM AND TERMINATION.
1. The term of this Agreement shall be for a period of five (5) years from the date of its
execution.
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2_ Either the City or Midwest may tenninate this Agreement if the other party violates
any of the terms or does not fulfill, in a timely and proper manner, its obligations under this
Agreement. Any notice of default in the terms of the Ageement must be given to the other
parry in writin�, by certified mail, rehun receipt requested, and shall give thirty (30) days to cure
the alleged breach.
3. In the event of termination, the City will pay Midwest for all services and/or products,
actually, timely, and faithfully rendered up to the receipt of the notice of termivarion and
thereafter until the date of tein�ination. The City will repay Midwest a prorated portion of the
annual financial contribution equal to the percent of the year remaiuing from the receipt of the
notice of termination. Midwest shall pay the City for any commissions, rebates or other
payments due up to the receipt of the notice of ternunation and thereafter until the date of
ternunation.
XI . AMENDMENTS OR CHANGES. Any alteration, variation, modification or waiver of the
Agreement shall be valid only when reduced to writing and duly signed by the Midwest and the
City.
XII. INTERPRETATION, VENUE. This Agreement shall be interpreted and construed
according to the laws of the State of Minnesota. Alllitigation regarding this agreement shall be
venued in the District Court of the County of Ramsey, Second Judicial District, State of
Minnesota.
XIIL INDEPENDENT CONTRACTOR It is agreed by the parties, that at a11 times and for
all purposes, within the scope of the Agreement resulting from this solicitation, the relationship
of Midwest to the City is that of independent contractor and not that of employee. No statement
contained in the specification or resulting Agreement shall be construed so as to find the
Midwest an employee of the City, and Midwest and its employees, officers and agents shall be
entitled to none of the rights, privileges, or benefits of Saint Paul employees.
XIV. NON-CONFORMING SERVICES. The acceptance by the City of any non-conforming
services under the terms of the Agreement or the foregoing by the city of any of the rights or
remedies arising under the terms of this Agreement shall not constitute a waiver of the City's
right to conforming services or any rights and/or remedies with respect to any subsequent breach
or default of the terms of the contract. The rights and remedies of the City provided or referred
to under the terms of the contract are cumulative and not mutually exclusive.
XV. ENTIRE AGREEMENT. The specifications and other solicitation materials
associated with this Contract and these General Terms and Conditions shall constitute the entire
Agreement between the parties and shall supersede all prior oral or written negotiafions.
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XVI. INSURANCE.
Midwest shall be required to carry insurance of the l�nd and in the amounts shown below for the
life of the contract. Insurance certificates should state that the City of Saint Paul, its officials,
employees; a�ents and representatives are named as Additional Insureds.
1. Public Liability Insurance
a) Bodily Injury
$ 1,000,000
$ 2,000,000
each occurrence
aggregate
b) Property Damage
� 1,000,000
$ 2,000,000
each accident
aggregate
c) Policy must include an"all services, products, or completed operations"
endorsement.
2. Automobile Insurance
a) Bodily Injury $ 750,000 per person
$ 1,000,000 per accident
b) Property damage not less than $50,000 per accident
3. Workers Compensation and Emplover's Liabilitv
a) Worker's Compensation per Minnesota Statute
b) Employer's Liability shall have minimum limits of $500,000 per accident;
$500,000 per employee; $500,000 per disease policy lunit.
c) Contractors (Providers) with 10 or fewer employees who do not have Worker's
Compensation coverage are requued to provide the City with a letter verifying their
number of employees.
4. Professional Liability Insurance
$1,000,000 per occurrence
$2,OOO,QOQ aggregate
5. GeneralInsurance Requirements
a) The policy is to be written on an occurrence basis or as acceptable to the City.
Certificate of insurance must indicate if the policy is issued on a claims-made or occunence
basis. All certificates of insurance shall provide that the City's Division of Contract and
Analysis Services be given not less than thirty (30) days prior written notice of cancellation,
non-renewal or any material changes in the policy, including, but not limited to, coverage
amounts. Agent must state on the certificate if policy includes enors and omissions coverage.
b) Midwest shall not commence work until a Certificate of Insurance covering ali of the
insurance required for this project is approved and the project manager has issued a norice to
proceed. Insurance must remain in place for the duration of the original contract and any
extensions periods.
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c) The City reserves the right to review Contractor's insurance policies at any time, to
verify thaf City requirements have been met.
d) Nothing shall preclude the City from requiring Contractor to purchase and provide
evidence of additional insurance.
XVIII. ADi�'IIIVISTRATION, NOTICES.
1. Both Midwest and the City shall desi�ate a contact person to administer this
Agreement. For the City the contact shall be the Special Sezvices Manager:
For Midwest the contact person shall be: Cold Drink District Sales Manager
2. All notices pertaining to this Agreement shall be in writing and shall be sufficient if
personally delivered or sent by United States Mail, certified, rehun receipt requested to City at:
Division of Parks and Recreation
300 City Ha11 Annex
25 West 4"' Street
Saint Paul, MN 55102
and to Midwest at:
Midwest Coca-Cola Bottling Company
2750 Eagandale Boulevard
Eagan, MN 55121-1292
XIX. SEVERABILITY.
If any provision of this Agreement shall be declared invalid for any reason and such
provision does not destroy the putpose of this Agreement, or make the performance of the
rema.ining terms and conditions unfeasible, then such provision shall be deemed severable and
the remaining terms and conditions of the Agreement shall be enforced in accordance with their
terms.
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IN 4VITNESS WHEREOF, the parties hereto have signed this Agreement as of the date
first written above.
1V�WEST COCA-COLA BOTTLING, INC CTTY OF SAINT PAUL
Its
Its Mayor
Director of Pazks and Recreation
Directar, Department of Finance
APPROVED AS TO FORM: