(originally published in the Stony Brook Press, October 1, 1997)

By Stephen Preston

As you've probably noticed, you can't eat breakfast in the dining halls. Breakfast, being a fairly standard part of one's expected diet (and formerly guaranteed by your contract), you may be wondering what happened. As usual when this sort of thing happens, the Kenny Administration seems to have been responsible. As we struggle to get a better meal plan this year, it will be useful to know exactly how the situation got so bad.

Those of you who were here last year (or who have read the rest of this newspaper) have noticed that hours of operation have been cut at most facilities. The contract had to be modified to make this possible. The primary reason it was changed was the impact of the Student Activities Center (SAC).

The Kenny Administration had planned and built the SAC largely without the input of students. The primary student concern was always that the SAC cafeteria would not be large enough to accommodate the expected student crowd, and the Kenny Administration seems to have ignored this concern. Thus the campus ended up with a Student Activities Center irrelevant to most students.

The contract between FSA and Aramark gives Aramark exclusive rights to all facilities in the meal plan. But there is no mention of the SAC in the original contract, because apparently both FSA and Aramark believed that the SAC would not be on the meal plan. The decision to put SAC on the meal plan, at least for breakfast and dinner, was made by the Administration during Summer 1996, though it was not officially announced until Fall. In other words, less than two months after the original contract had taken effect (June 30, 1996), the Kenny Administration was already forcing FSA to rewrite it.

The SAC was originally planned to be open in Fall 1996, but Aramark already suspected during the bidding process that the opening might be delayed until Spring 1997. Aramark expected that non-residential students would go to the SAC instead of to Aramark's facilities, and so it was planning to increase the price of the meal plan to make up the lost revenue. It actually proposed two versions of the then-current meal plan. It proposed that the meal plan cost would have to be raised from $999 to $1047 if the SAC were opened in the Fall, but that it would only be $1028 if the SAC were opened in the Spring. FSA refused to consider the latter proposal, feeling it was unfair to the competitor, who had been unable to offer a similar proposal.

Now Aramark's other proposals, especially their Advantage plan, were all based on the assumption of SAC opening in Fall 1996. Since overall costs and expenditures would have been similar for any of the meal plans, this suggests that Aramark could have actually lowered the Fixed Cost portion of the meal plan (currently $680) by $19 per semester and still made a profit, based on its own projections. Since the SAC did eventually open in Spring 1997, this would imply that Aramark may have made an extra profit of $19 per student (approximately $170,000 per semester) because of the delay. $19 doesn't seem like much, but this factor alone would nearly double Aramark's planned profit.

By the time it was decided that Aramark would control the SAC, Aramark could demand even more because it was already in place at the University. FSA seemed concerned that if Aramark did not make enough of a profit, it would cancel the contract and leave the campus. The FSA and Aramark decided that the SAC would be incredibly unprofitable, due to the heavy labor demands. Thus Aramark demanded that either the meal plan price be increased by about $50 per semester, or that the other campus facilities be closed during certain hours to force students into the SAC.

Now Aramark had already adjusted for the projected revenue decrease at all its other facilities (the $19 profit). Also, the SAC attracted commuters, grad students, faculty, and staff who had been going off campus to eat. So overall, Aramark's revenue clearly increased with the opening of the SAC. Costs increased as well in the SAC, but it is not at all obvious that they increased so drastically as to demand an extra $50 per semester just to keep up.

FSA, knowing students would not accept the price increase, submitted to Aramark's demands and closed breakfast at Kelly and H, reduced services at Humanities, etc., rewriting the contract to allow it.

Here we start to see who actually has the advantages. The problem with forcing students to prepay the meal plan cost based on projected sales and costs is that, at least on this campus, the projections have consistently underestimated Aramark's success. Every time Aramark exceeds its projections, it can pocket the difference.

The above analysis completely ignores several other very important factors which contribute to Aramark's profits. For example, all students this year are required to pay a fixed cost of $680 which was calculated on the basis of 4400 students per semester on the meal plan. Thus, when more students were admitted than anticipated, all of the additional money from the extra students became pure profit. While it is true that if enrollment had dropped, Aramark would have taken a loss, it seems clear the administration will ensure that never happens.

Still, we are neglecting the question of why Aramark's Advantage prices seem so much higher than the wholesale prices available at, say, the Price Club. Or why Advantage prices are effectively higher than retail prices (see Miriam Schussler's article in this issue). Or why Aramark consistently charges more for retail items than off-campus competitors. These concerns are currently held also by the FSA, but so far only the Union Deli and Bleacher Club are being actively investigated.

Another concern is the 10% markup of food cost inherent in the Advantage system. Supposedly this is to cover things such as employee meals and waste, but Aramark has never explained why these should be factored into the food prices rather than the fixed cost. The amount that employees eat does not depend on how much food students purchase, but on how many employees there are. So why are employee meals not simply factored into labor costs?

A lot of questions have been raised in the above, and I have not been able to answer many of them. NYPIRG is currently conducting a lot of research on its own, and needs volunteers to help. If you are concerned about this issue (and you should be), I invite you to join NYPIRG's Consumer Advocacy team. Not only do we need to document the problems with the meal plan here, but we also need to find out how other schools have solved their problems. Call me at NYPIRG at 2-6457 to find out what you can do. Also, you may want to see if you can get involved in the Dining Services Committee, which will be selecting the food service for next year. Contact Kevin Kelly or Diane Lopez to get on it. Keep watching for more information on Aramark... It will be a long campaign.