Attorney General's Opinion

Attorney General, Richard Blumenthal

December 19, 2007

Brian S. Sigman

Executive Director

Board of Education and Services for the Blind

184 Windsor Avenue

Windsor, CT  06095

Dear Mr. Sigman:

You have asked for my opinion on the authority of the Board of Education and Services for the Blind (BESB) to choose the brand name products to be sold in vending machines placed on public property by BESB pursuant to Conn. Gen. Stat. § 10-303.  BESB has five vending machine locations on Town of Ridgefield property.  The Town acknowledges that BESB has the right to place and maintain the vending machines, but contends that Ridgefield, not BESB, has the authority to determine which brands of products may be sold from those machines.  In particular, Ridgefield believes that it and other towns should have the option to have Pepsi Cola products sold from BESB vending machines located on town property, instead of the Coca Cola currently sold in the BESB vending machines.

While the statute gives BESB broad discretion in placing and stocking vending machines with particular products, we recognize that the current contract, which will end on June 30, 2009, imposes constraints on this discretion. Our opinion urges review of the present product offerings and looks to future contracts in urging more responsive and consumer conscious conduct.

There are two sets of answers to this question.  As a purely legal matter, BESB's statutory power encompasses product or brand decisions.  As a matter of sound public policy, we strongly recommend that BESB consult with the towns, which reflect consumer preferences in products, and heed their view as to specific brand names to be offered.

We reach the following conclusions: 

1.                       BESB has statutory authority to operate vending machines at any municipal or state vending machine location.  Once BESB exercises its statutory authority to operate vending machines pursuant to Section 10-303, and negotiates with a municipality the types of articles that will be sold in the vending machines, BESB has the authority to decide the specific brand names of articles sold at the location.  As a matter of policy, however, we recommend that BESB consult with municipalities, consistent with its contractual obligations, on the specific brand names of products that will be sold in each town.

2.  In this case, as a result of a public, competitive bidding process, the Coca Cola Bottling Company of New England was awarded the exclusive right to sell and distribute vended products at BESB vending locations.  Under the contract, no "competitive products" can be sold, dispensed or served at BESB vending locations. You have informed this office that Pepsi-Cola, apparently as a business decision, did not bid for that contract. 

3.  BESB receives significant revenues from its vending contract with Coca Cola and uses those revenues to support programs for blind and visually impaired children and adults, including in its Business Enterprise Program, which enables blind entrepreneurs to operate food service facilities.  In addition, BESB has allowed the proceeds from vending sales at locations associated with children and students in Ridgefield and in other municipalities to be placed in town controlled student activity funds.

4.  The sale of Pepsi Cola at any BESB vending location could lead to legal action over BESB’s current contract with Coca Cola, possibly jeopardizing this source of funding for its programs.

5.  There is no statutory requirement that BESB have an exclusive contract with a vendor to sell and distribute products at BESB’s vending locations.  We recommend that BESB consider issuing an RFP for multiple contractors to sell and distribute products at BESB vending locations when the current contract with Coca-Cola expires.  The use of multiple contractors or other different arrangements could allow BESB to give each municipality the choice of a vendor for the products to be sold in each town while maximizing revenues to BESB and school funds.

Since 1959, BESB has been authorized under Conn. Gen. <st1:country-region>Stat.</st1:country-region> § 10-303 to operate vending machines in state and municipal buildings to raise revenue for programs to assist the blind.  For many years, BESB administered the program using a variety of vendors, each of whom served a small geographic area.  By 1996, BESB had contracts with 70 vendors operating 650 vending machines in 200 locations.  In 1997, in an effort to increase revenue and improve oversight of contract performance, BESB began to consider increasing the number of installed vending machines and reducing the number of vendors under contract. 

In 1999, BESB issued Request for Qualification (RFQ) 9899-2 to determine which vendors would be eligible to bid for RFP 9899-23 for a single, statewide vending machine contract.¹  The contracting process was open, competitive and well publicized.  Four pre-qualified vendors were offered the opportunity to submit proposals and three did so.  You have informed this office that BESB twice contacted Pepsi in an attempt to get Pepsi to bid on the contract, but Pepsi, because of particular business conditions at the time, did not do so.  As a result of that process, on June 29, 1999, BESB signed a 10-year contract with Coca Cola Bottling Company of New England.²  The contract terminates June 30, 2009.

The contract gives Coca Cola the exclusive right to sell and distribute vended products through vending machines at facilities chosen by BESB pursuant to Section 10-303.  According to the contract, no competitive products are to be sold, dispensed or served anywhere at a BESB managed facility. Products vended are to be nationally known brands unless prior approval is received from BESB.  Under the terms of the contract, Coca Cola pays BESB thirty-five cents of every dollar of gross sales from the vending at BESB locations.  You have informed this office that the revenue BESB collects under this contract from more than1600 vending machines in Connecticut provides a significant amount of money to support BESB’s programs for blind and visually impaired children and adults, including its Business Enterprise Program (BEP), enabling blind entrepreneurs to operate food service facilities in government buildings.  Conn. Gen. <st1:country-region>Stat.</st1:country-region> §10-303(c).  You have also informed this office that BESB, pursuant to Conn. Gen. Stat. § 10-303(d), regularly waives its right to receive all income from vending machines that are located in facilities associated with children and students, such as schools, colleges and recreational facilities, allowing such income to be placed in town, school or college activity funds.

In 2006, BESB decided to exercise its statutory right to operate vending machines at locations in Ridgefield Town Hall, the police department and the recreation center.  This was accomplished in February 2007.  BESB also agreed with the town in the spring of 2007 that BESB would operate vending machines at three seasonal recreational locations. Consistent with BESB’s practice, any revenue from the machines in Ridgefield’s recreation facilities is deposited in a related activity fund under the town’s control.  The income from the machines in Town Hall and the police department is paid to BESB.  In May and June 2007, vending machines at those two locations provided BESB with $327.98 in revenues for its BEP program.

The Town of Ridgefield has submitted a legal memorandum from the law firm of Cummings & Lockwood prepared for The Pepsi Bottling Group.  That memo asserts that a municipality can determine the “brand” of products sold at the BESB locations because, under section 10-303, the municipality or state authority owning a facility must approve “articles” that are to be sold at BESB locations. It further argues that Conn. Agencies Reg. § 10-303-18 states that a written agreement is to be entered into between BESB and the municipality authority.  One of the terms and conditions of the agreement is to be “the types of articles to be sold” and services to be provided by the vending facility.  The memorandum concludes that BESB does not have the right to dictate what brands of articles are to be sold in the machines, and the municipality has the right to participate in determining the brands of such articles. Finally, it claims that since the revenues from the gross sales of BESB vending locations in schools go into student activity accounts and are not utilized for the blind, there is a sound public policy reason BESB should not be permitted to impose its brand selection upon municipalities.   

This office does not agree with the legal conclusions contained in the memorandum prepared by Cummings & Lockwood.

           

Conn. Gen. <st1:country-region>Stat.</st1:country-region> § 10-303 states, in pertinent part:

(a) The authority in charge of any building or property owned, operated or leased by the state or any municipality therein shall grant to the Board of Education and Services for the Blind a permit to operate in such building or on such property a food service facility, a vending machine or a stand for the vending of newspapers, periodicals, confections, tobacco products, food and such other articles as such authority approves when, in the opinion of such authority, such facility, machine or stand is desirable in such location….

(d)        The Board of Education and Services for the Blind may disburse state and local vending machine income to student or client activity funds, as defined in section 4-52 (emphasis added).³

Conn. Gen. <st1:country-region>Stat.</st1:country-region> §10-303 gives municipalities and state agencies the authority to decide whether to place vending machines at particular locations on municipal and state property.  When a municipal authority or state agency decides that a vending machine is desirable in a particular location, section 10-303 requires that priority be given to BESB to operate the machine. 

Section 10-303 also gives municipalities and state agencies the authority to choose the “articles” to be sold at a particular location. The word “articles,” as used in Section 10-303 refers to a generic class of products as enumerated in Section 10-303 -- “newspapers, periodicals, confections, tobacco products, food and other such articles”  -- and not to the particular brand names of the types of articles to be sold.  In construing a statute, “[i]f two or more words are grouped together, it is possible to ascertain the meaning of a particular word by reference to its relationship with other associated words and phrases.”  State v. Szymkiewicz, 237 Conn. 613, 618, 678 A.2d 473 (1996); Conn. National Bank v. Giacomi, 242 Conn. 17, 33, 699 A.2d 101 (1997).⁴  Section 10-303 does not give municipalities or state agencies the legal right to determine the brand names of the newspapers, periodicals, confections, tobacco products or food or other articles that will be sold by BESB.

On the other hand, the legislature specifically gave BESB the authority “to operate” vending machines at municipal and state locations to collect revenues to assist BESB in fulfilling its statutory responsibilities to blind and visually impaired children and adults.  Conn. Gen. <st1:country-region>Stat.</st1:country-region> §10-303(a), §10-303(c).  In the absence of a statutory definition, words and phrases in a particular statute are to be construed according to their common usage. To ascertain that usage, we look to the dictionary definition of the term.  Considine v. City of Waterbury, 279 Conn. 830, 837, (2006). The word “operate” means “(1) to control or direct the functioning of.  (2) To conduct the affairs of:  MANAGE” “ Webster’s II Riverside University Dictionary, p. 823.  BESB has the statutory authority to control and manage its vending machines. The choice of brand names for the “articles” sold necessarily resides with BESB as manager, not with the towns or state agencies who do not control or manage the vending machines.  Because BESB has the statutory duty to operate its vending machines to obtain revenues for its programs, BESB must necessarily have the authority to choose the brands of products to be sold, which in BESB’s opinion will maximize the revenue it obtains.  “’It is not our practice to construe a statute in a way to thwart its rational and sensible result that bears directly on the purpose the legislature sought to achieve.’  Colonial Penn Ins. Co. v. Bryant, 245 Conn. 7109, 725, 714 A.2d 1209 (1988).”  State v. Reynolds, 264 Conn 1, 32 (2003).

As a matter of policy, BESB may wish to consult with municipalities on the specific brand names that will be sold in each town, consistent with its contractual obligations and authority. Presently, however, the sale of Pepsi Cola at any BESB vending location during its current contract with Coca Cola could lead to legal action, possibly jeopardizing this source of funding for BESB's programs.

Section 10-303(d) specifically grants BESB the authority to disburse state and local vending machine income to local student or client activity funds as defined in section 4-52 rather than utilize it for programs for the blind.  Although the legislature has allowed BESB to assist local school activities with revenue from BESB’s vending machine locations, that legislative grant of authority to BESB in no way affects BESB’s statutory authority to operate or manage its vending machines at any BESB location.  In fact, we understand that BESB’s vending partnership with municipalities and school districts has significantly benefited programs for blind adults and children, while increasing revenues for school activity funds.

Finally, we note that there is no statutory requirement that BESB have an exclusive contract to sell and distribute products at BESB’s vending locations.  As a matter of policy, we recommend that BESB consider issuing an RFP for multiple contractors or other contractual arrangements to sell and distribute products at BESB vending machines when the current contract with Coca Cola expires.  Other contracting arrangements may allow BESB to give each municipality the choice of a vendor for the products to be sold in each town while maximizing its own revenue and revenue for school activity funds from this enterprise.

We trust the foregoing responds to your concerns.

Very truly yours,

RICHARD <st1:country-region>BLUMENTHAL</st1:country-region>

ATTORNEY GENERAL