STAFF REPORT TO THE CITY COUNCIL
DATE: Regular Meeting of June 13, 2023
TO: Members of the City Council
VIA: Dante Hall, City Manager
SUBMITTED BY: Tim Rood, Community Development Director
SUBJECT: “Eat Local Hercules” Catering Incentive
RECOMMENDED ACTION:
Staff recommends that the City Council approve by minute order the Eat Local Hercules program guidelines and adopt a resolution approving the second amendment to an agreement with the Yiftee Digital Gift Card program in the amount of $50,000 to establish the Eat Local Hercules catering incentive program.
BACKGROUND:
The Council’s Economic Development Committee received a report on the proposed Eat Local Hercules program on April 4, 2023 and recommended it be brought to the full Council for consideration.
On April 26, 2022, the City Council authorized the City Manager to execute an agreement with Yiftee for a Shop Local/Gift Card program for $65,000. At the February 28, 2023 meeting, the City Council authorized the extension of the program and added an additional $75,000 due to the successful launch of the pilot program.
The Yiftee Community Digital Gift Card program is a cost-effective way to stimulate the local economy and assist small businesses in recovery. It also provides additional savings to residents who shop locally.
Yiftee has no set-up or monthly costs, and the additional $50,000 will pay for:
The $1+5% eDelivery fee (purchaser fee) plus a $1 bonus gift fee per card.
A bonus gift card to incentivize the use of the program and provide a benefit to all community members.
Branding costs associated with the development of the “Eat Local Hercules” campaign.
Marketing costs for advertisement and promotion of the program and related point-of-sale signage and posters for participating businesses.
ANALYSIS:
The Eat Local Hercules program is meant to be an incentive to build business-to-business relationships between Hercules restaurants, caterers and food trucks and local major employers in Hercules, as well as major employers located in nearby communities.
Similar to the Shop Hercules program, Eat Local Hercules will be an incentive program to use local restaurant catering services. The proposed Yiftee Gift Card Enterprise program would be a new program with a special type of Yiftee card marketed to large employers in Hercules. This card would have a higher spending limit and would be redeemable only at Hercules small businesses that provide catering services.
For example, a major employer, such as Bio-Rad, could buy a gift card valued at $250 and receive a matched $250 ‘bonus’ card paid by the City, and both gift cards could be used at local participating restaurants or catering businesses.
Staff and consultants recommend the following parameters for the Eat Local Program:
Eat Local Program Budget
Staff recommend a budget of $50,000 to be allocated from the General Fund for the Eat Local Bonus Gift Card pilot program.
Bonus Card Guidelines
100% match for purchase cards with a maximum bonus card value of $250.
A limit of 5 cards per customer (business).
Eligible purchasers must purchase cards with one company email address verified by the City and/or consultant in order to receive bonus cards (i.e., employees cannot use personal email addresses to purchase cards).
Bonus cards expire six months (120 days) after purchase (any expired unspent bonus gift funds would be returned to the City for redistribution after a restocking fee). The purchased Gift Card (original purchase amount) does not expire, per the Yiftee agreement.
The City will pay all purchasing and eDelivery fees during the Pilot Program while funds remain (first come, first serve). The purchase card eDelivery fee is $1+5% of the purchase value per card, and the bonus card eDelivery fee is $1 per card.
Eligible Purchasers
The Eat Local Hercules Program is intended to incentivize local major (large) employers to purchase food from Hercules local restaurants and cafes. Purchasers must meet the following criteria:
Operates from a physical location in Hercules, Pinole, Rodeo or Crockett (zip codes 94547, 94564, 94572, or 94525) Has 21 or more full time equivalent employees as of December 1, 2021.
A preliminary list of eligible purchasers identified by City staff and consultants is attached (Attachment 5). Other eligible businesses may also participate if they meet the criteria.
Eligible Redemption Sites
The eligibility criteria for participants will be the same as the original Shop Hercules Program, as identified below, except for the Eat Local Hercules program is limited to restaurants/cafes, catering companies and food trucks providing catering services. Eligible redemption sites must meet the following criteria:
Is a for-profit business, in one of the following categories:
Restaurant/Café
Catering company
Food truck (with a Hercules business address)
Operates from a physical storefront in Hercules or from a food truck (with a Hercules business address). Home-based businesses are not eligible.
Maintains a current City business license.
Franchises are eligible if the corporation is headquartered in Contra Costa County with six or fewer locations Locally owned chains are eligible if they are headquartered in Contra Costa County with six or fewer locations Eat Local Hercules Program Process
Below is a summary of the process to implement the Eat Local program:
Hercules will set up a Yiftee portal and card program called the Eat Local Hercules Card exclusively for qualified major employers to use at local Hercules restaurants/cafes, caterers and food trucks (with a Hercules business address).
The City specifies the purchaser and redemption site criteria (listed above).
The City will inform merchants that there is a second program exclusively for restaurants, catering businesses and food trucks (with a Hercules business address) for “large” businesses in Hercules.
Merchants currently participating in the Shop Hercules program can be copied over to the new portal without running a new activation card. Merchants not currently participating will sign up through Yiftee’s activation process.
City Staff and consultants will market the Eat Local Bonus Gift Card Program to the large employers.
The businesses purchase up to 5 cards themselves from the Eat Local Card website whenever they’re ready and tells the City when that’s done. HdL will manage the website to watch for purchases, as well.
The City will have to approve the bonus cards based on the purchases and then Yiftee sends the bonus cards (5 max) manually (with the desired expiration date) to the approved purchasers.
The Eat Local gift cards can be redeemed at the select restaurants/cafes/ caterers/food trucks.
Unused bonus gift cards will go back into Eat Local Card Portal after the six-month bonus card expiration date.
FISCAL IMPACT:
A funding allocation of $50,000 for this program is included in the draft FY 23-24 budget and will be appropriated in the General Fund under expenditure account # 100-0000-611.90-00 (Project No. ARP218) for this proposed second amendment to the existing agreement. The proposed second amendment increases the total contract amount under this agreement by $50,000, for a total amount of $190,000.
Contract
Agreement No.
Approval
Contract
Approval Date
Authorized Amount
Original Contract
22-012
Council Resolution #22-032
4/26/2022
$ 65,000
1st Amendment
Council Resolution #23-010
2/28/2023
$ 75,000
2nd Amendment
Recommended
6/13/2023
$ 50,000
Total
$ 190,000
ATTACHMENTS:
Resolution
Second Amendment to the original agreement
First Amendment to the original agreement
Original Agreement
Preliminary list of Eligible Purchasers