HomeMy WebLinkAboutIR 7100 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 7100
To the Mayor and Members of the City Council
March 18, 1986
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Subject:PRICE CHANGE REQUEST BY GOLF COURSE VENDING MACHINE CONCESSIONAIRE
The City Council , on April 23, 1985 (M&C P-1478) authorized City Secretary
Contract No. 14469 with Star Vending Company, Inc. for the vending machine
rights at the municipal golf courses for a two year period with a one year
option for renewal . Paragraph IV of the contract limits Star Vending to price
increases no more than twice per year, and requires City Council approval to
make the price adjustments. On August 6, 1985, (M&C G-6399) the City Council
approved the adjustment of cigarette prices under this contract from $1 .35
to $1 .40, and increased the commission paid to the City from 15% to 16.6%.
The vendor has informed the City staff that they have incurred a 22 cents per
cigarette pack and a 3-14- cents per candy bar increase in the wholesale prices.
Therefore, the vendor has requested authorization to increase the price of
these two items as allowed under Paragraph IV of the City Secretary Contract.
The Park and Recreation Board has recommended that the vendor be allowed to
raise the price of cigarettes from $1 .40 per packet to $1 .50 and the price
of candy from $0.45 to $0.50 per candy bar.
The City Council may consider one of the following three options:
Op"I Option 1 Approve the price increases as recommended, which would allow the
vendor to recover the increased price and would increase the City's revenue.
Option 2: Leave the current price of the two items as they are, but allow
the vendor to recover their increased cost from the current price. This option
would mean that the City's revenue would be reduced.
Option 3: Require the prices to remain the same for the remaining term of
the contract. The vendor would have to absorb the added cost of these two
items.
The cost of products do change within the term of a contract and that is why
the option to request a price increase was included in the contract.
The city staff requests guidance from the City Council on the options that
should be included in these types of contracts.
M&C G-6596 is included on the City Council agenda for your consideration.
Douglas Z 2tH a r7a
City Manager
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ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
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