Chapter One

Background

In 1945, the Connecticut General Assembly adopted legislation to parallel a 1936 federal law (the Randolph-Sheppard Act) giving preference to blind persons, whenever feasible, to operate vending "stands" on government property. In the 1950s, both the state and federal laws were amended to include the operation of vending "machines" within the scope of the program. (See Appendix A for a more detailed history of the federal and state laws.)

Currently, under C.G.S. Sec. 10-303, the Board of Education and Services for the Blind has the right of first refusal to operate vending facilities (i.e., stands) and vending machines in all state and municipal buildings, if the agency in charge of the location decides such services are desired. Under the law, a location that wants vending machines is to contact BESB and offer them the opportunity to operate the machines. If BESB fails to respond to the inquiry or declines the location, the facility is free to make its own arrangements for vending machine services.

Vending facilities operated by BESB must be run by blind individuals. Sites that only have vending machines can be managed by anyone BESB contracts with to perform the required services.

If a location with a vending facility also has on-site vending machines, all proceeds from the facility and the machines go to the blind operator of the facility. At other sites where BESB only operates vending machines, BESB has discretion to use the revenue from the machines for a variety of purposes, including fringe benefits for blind facility operators, training, and equipment. BESB also can allow agencies where machines are located to retain the revenue for student and client activity funds. Figure I-1 presents a flow chart summarizing the distribution of revenue from this program.

FIG. I-1. Distribution of Revenue Under Current Laws.

Food and beverages are the products most commonly dispensed through vending machines operated by BESB. A limited number of machines provide items such as phone cards, gumballs, and pens. A new undertaking being considered is automated teller machines (ATMs).

Separate contracts govern each type of product and specify the commission payment BESB will receive from the sale of each item. In FY 02, revenue from the food and beverage contract totaled $1.5 million, while income from other products totaled $44,000.

For many years, BESB ran its food and beverage vending machine program using a variety of vendors, each of whom served a small geographic area. BESB had a limited presence in school and town facilities because only a few municipalities realized they were required to contact BESB, and BESB did not actively pursue those locations. By 1996, BESB had contracts with 70 vendors, operating 650 food and beverage vending machines in 200 locations, three-quarters of which were state facilities.

In 1997, in an effort to increase revenue and improve oversight of contractor performance, BESB began looking at ways to expand the number of installed vending machines and reduce the number of vendors under contract. On June 29, 1999, after a multi-step process described in detail in Appendix B, BESB signed a 10-year contract with the Coca-Cola Bottling Company of New England.

Under that agreement, Coca-Cola and its approved subcontractors have exclusive rights to supply food and beverage vending machines in state and municipal buildings where BESB operates under C.G.S. Sec. 10-303. As of July 2002, the contract covered 1,376 vending machines in 469 locations; half of the machines were in state facilities. Figure I-2 shows the growth in machines and locations.

Revenue to BESB under the statewide food and beverage contract totaled $1.5 million in FY 02, while local schools received an unspecified amount of money. BESB also receives vending machine revenue through the Department of Transportation (DOT) as a result of an agreement giving BESB the proceeds from machines at rest stops run by DOT in lieu of BESB sponsored blind individuals operating the facilities. FY 02 revenue from this source totaled $383,000.

All of the revenue from BESB operated vending machines located in non-federal buildings is deposited in the nonlapsing fund, referred to as Account 361. Figure I-3 shows the revenue received and dollars expended from the account since state FY 98.

Figure I-4 indicates the value of the Account 361 at the start of each of the past six fiscal years. The amount has tripled since FY 00.

Revenue from machines on federal property is deposited in Fund 1143 to pay the fringe benefit expenses of vending facility operators. Approximately $30,000 was deposited into the fund in both FY 01 and FY 02; earlier deposits were lower.

Appendix C contains information about the range of responsibilities assigned to the Board of Education and Services for the Blind. Per C.G.S. Sec. 10-293, BESB is located within the Department of Social Services for administrative purposes only. The mission of DSS is to serve those who need assistance maintaining or achieving their full potential for self-direction, self-reliance, and independent living.