Denver Public Schools s2

DENVER PUBLIC SCHOOLS INTERDEPARTMENTAL COMMUNICATION

TO: Area Superintendents, Asst Area Superintendents, Principals, Department Heads FROM: Andre Pettigrew, Asst. Superintendent Administrative Services THRU: Leo Lesh, Executive Director, Food and Nutrition Services DATE: September 12, 2005 SUBJECT: Pepsi Contract

Effective July 1st of last year, the Food and Nutrition Services Department has agreed to manage the Pepsi contract. We are in the third year of a five year contract. The contract will provide the General Fund $500,000 a year through the five-year contract period, plus, commissions from the sales of Pepsi products from the vending machines are paid directly to the schools. There have been several legislative bills passed last year that pertain to beverage vending and also the Board approved recommendations from the Commission on Nutrition and Physical Activity and the federal requirement that all school districts adopt a wellness plan by the start of the school year 2006 have and continue to impact the Pepsi contract. Some important features of the contract are:

1. Pepsi beverage machines (this includes water) are not allowed in the Cafeteria or the Library. 2. Only water can be sold in public areas in elementary schools. 3. Pepsi will install and maintain battery operated timers on all Pepsi beverage machines one-half (1/2) hour before, during and one-half (1/2) hour after the breakfast and lunch period. This complies with the state and federal competitive food rule. Adult-only areas in schools and all DPS administrative buildings are excluded from timers. We will be giving Pepsi a list of all breakfast and lunch times so they can be in compliance in the near future. 4. All Pepsi products sold in the vending machines will be priced consistently throughout the District. 5. Pepsi beverage products cannot have a selling price less than the selling price of water. 6. Any new or upgraded Pepsi beverage machines will have Aquafina fronts or fronts or images depicting athletic activities. 7. 50% of all Pepsi products must be “healthy” as defined by SB 04-103, we are in the process of changing the product mix to comply with this bill and hope to have that accomplished this year.

Commissions to schools will be paid directly to the schools from Pepsi. You should receive a check, along with a commission advice sheet that shows among other things, the commission amount paid to your school. Elementary School Commissions are paid on a 90 day cycle and Secondary School commissions are paid on a 28 day cycle. There are thirteen 28 day cycles in a year. The year end bonus will remain the same as last year and we will try to get them out in February of 2006.

As a reminder, all commissions from Pepsi and other vending machines are considered Incidental Accounts and should be used for the benefit of the school. Please use discretion on how the money is spent as the Internal Auditing Department audits these accounts on a regular basis. You can refer to: http://internalauditing.dpsk12.org/ for further rules and regulations about establishing and using Incidental Accounts.

Additional information:

1. If the machine is malfunctioning, the timer is not working or if the machine is out of product, calls Lani Chambers at 303- 715-5618. Please give her the serial number or bar code number or machine number. Our food services staff will also be checking the machines for repair, out of stock items, and to make sure the timers are on. 2. For the value added products (the contract calls for the District to receive a limited amount of free products for District promotions), contact Leo Lesh at 303-715-5609. These value-added promotional products do not carry forward from year to year and are for the entire District, not just schools. Food Services will determine the validity and the amount of the request. This year all Pepsi free products will need to be picked up at there plant at 3801 Brighten Blvd, there hours are Monday – Thursday 7:00 a.m. to 3:30 p.m. 3. If, for any reason you need a machine moved, please call Lani Chambers at 303-715-5618. Please do not have the Facility Manager move the machines as all Pepsi beverage machines will be mapped in each school and should have a machine number, a serial number, or a bar code number clearly visible. Machine moves take about 4 – 6 weeks to move depending on the time of the year. 4. Commissions from sales vary from 57% - 30% depending on the product. 5. The District shall have the right to sell/vend MILK products through its school lunch program. 6. Pepsi beverage machine refunds will be handled the same way as occurred in the past. 7. Food and Nutrition Services is not receiving any monies from Pepsi, or from the General Fund monies or from school commission monies to manage the contract.

The District seeks to balance its interest in generating discretionary income for schools and its overriding concern about overweight and obesity among DPS students. The goal is to maximize revenues to the schools while maintaining nutritional integrity. We look forward to working with you. If you have any questions, please call Leo Lesh at 303-715-5609.