Privatization of ISU Dining considered to reduce costs
June 1, 2005
ISU administrators are considering privatizing ISU Dining as a cost-saving measure, a move that has dining employees worried about the future of their jobs.
No decisions have been finalized, and administrators are busy studying the costs and benefits of such a move.
ISU Dining Director Jon Lewis said a private business could be in place by spring 2006.
Vice President for Business and Finance Warren Madden said he is studying whether privatization could increase efficiency or save money, which could help accommodate the tight university budget.
“We are trying to continue to provide high quality food services and food activities,” he said. “With the past couple years of financial challenge, we had to look at outside process evaluation.”
Dining service would not be the first food service operation to be privatized at Iowa State.
Vending machines were privatized in the past, and now food services at Reiman Gardens, the Iowa State Center, the Memorial Union and Jack Trice Stadium are all contracted to bidders.
Lewis, who previously worked for University of Pacific in California, experienced privatizing in the food service first hand and said there are several possible negative results of privatization.
He said food quality could decline.
“One of the major areas for a contract company to cut costs and make money is to cut the quality of the food served,” Lewis said.
Full-time staff and student employees could also be hurt, he said.
“ISU Dining starting student wage is $7.25, very competitive for the Ames area. The federal and Iowa minimum wages are $5.15, likely the starting wage for a contract company,” Lewis said. “For full-time staff, the level of benefits paid by contract management companies can average as much as 50 percent less than those offered by a self-operated campus dining programs.”
Iowa State plans to hire an outside consultant during the week of June 13th to begin the bidding process, according to a timeline provided by Lewis. Finalist bidders are planned to be announced in mid-October, and ISU President Gregory Geoffroy could make a decision in November.
Madden said the amount of money privatization could save has not been determined and could be made during the bidder evaluation process when bids from businesses can be compared to a budget proposal from dining services.
The possibility of privatization has ISU Dining Service employees feeling uncertain about their future job status.
“Everyone here is in limbo and nervous,” said Cindy Bell, a cook.
Cook Nancy Anderson said a pay cut of even a few dollars could be difficult to handle.
“I have to have insurance and need more than $5 to $7 to live,” she said.
Cook Ben Ingham said workers are also worried about benefit cuts.
“A lot of people put in a lot of time here and are worried about retirement benefits,” he said.