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Pepsi May Land A 10-Year Deal At Convention Center Through No Bid Process

Fresno City Hall

Pepsi May Land A 10-Year Deal At Convention Center Through No Bid Process

Consent calendar item may give Pepsi exclusive deal to sell non-alcoholic beverages at all Convention Center events without bidding process if no council member pulls the Pepsi agenda item.

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The Fresno City Council on Thursday will decide whether to give Pepsi an exclusive 10-year deal to sell non-alcoholic beverages at all Convention Center events.

Near as I can tell, the proposed deal comes from a non-competitive bid process. If so, it’s my opinion that this is odd. After all, it was Lee Brand who burnished his budget-fixing image some years ago by insisting that Convention Center operations deliver every dime possible to offset the funding burden on city taxpayers.

Brand did this (quite successfully, I might add) as a council member. Today, he is Mayor.

The proposed deal, according to a report from Convention Center General Manager Bill Overfelt, essentially is this:

  • 1.) Pepsi Beverages Company will pay a $20,000 annual sponsorship fee for 10 years.
  • 2.) Pepsi also will pay a 25% commission for vending machine sales and a $3 rebate per case or gallon sold.
  • 3.) Pepsi gets a monopoly on non-alcoholic beverage sales at the Convention Center through Aug. 31, 2028.
  • 4.) The payments generated by the deal will go toward funding Convention Center operations.

The Convention Center can use every penny it gets. This year’s city budget says of Convention Center operations:

“The anticipated (Convention Center) operating deficit for FY 2019 is projected to be $761,500. In FY 2018 due to excess earnings in the prior fiscal year, (the Convention Center) was able to offset $100,000 of the deficit with carryover. In FY 2019 this will not be the case and the City will be covering the entire shortfall.”

According to the proposed contract going to the council, Pepsi “submitted” a bid to SMG (which operates the Convention Center for City Hall) “in response to an invitation to bid issued” by SMG.

Sounds like a one-bid deal to me. If so, it wouldn’t be the first such non-competitive Convention Center deal coming from City Hall in the past year. In October 2017, the council gave Pardini’s Inc. another five years as the Convention Center’s No.  1 caterer. Pardini’s had been the Convention Center’s caterer for the previous 17 years.

Pepsi is a fine outfit. I just can’t tell from Overfelt’s report why it appears the deal wasn’t thrown open to competitive bids. Perhaps the council on Thursday can enlighten Fresno’s taxpayers.

If there was a competitive bid, it’s my opinion that Overfelt’s report should have reflected this in a clear manner and given details on the other proposals. Overfelt’s report is on the City Clerk’s Website. For many Fresnans, their only access to what’s going on at City Hall is this Website.

This is especially true for the Pepsi deal on Thursday. It’s on the consent calendar. If no council member pulls the Pepsi deal for further discussion, the typical Fresnan has only Overfelt’s report to go by.

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George Hostetter

George Hostetter is a contributor to CVObserver.

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