The University of Utah will explore turning over its in-house University Dining Service - now more than $500,000 in the red - to a private management company.
Next week, U. officials plan to begin seeking proposals from private management firms to manage the dining services for a five-year period beginning in July. The food service operation includes the Union Terrace restaurants, the Panorama Room, vending, catering and snack bars.In January, an internal audit revealed the food services department lost at least $919,000 in the 1997 fiscal year. The bulk of the losses were attributed to poor management practices, although at least one vending employee stole about $4,700. The audit determined some $45,000 in student meal-plan payments hadn't been deposited. During one month, $170,000 in undeposited checks were held in the department's safe, according to the review.
The U. hired Sodexho Marriott Services Inc. managers as contract consultants following the audit. While the reorganized University Dining Service has made progress in erasing the debt and expected to clear an estimated $35,000 in fiscal year 1999, the recovery was apparently not fast enough to satisfy key U. administrators. The debt could be as high as $592,953 by the end of the current fiscal year.
"It's progressing (debt reduction), but we're trying to see if there's any other way to solve it," said Dan Adams, assistant to Richard Wiegel, interim vice president of student affairs.
The proposal to seek outside management was presented to the University Board of Trustees Monday morning.
"We're convinced we can't do it on our own?" queried John Price, U. trustee.
"We could do it on our own. The question is how long we want the exposure," Wiegel said. "We're convinced it's a better decision not to do it on our own."
Once services are privatized, they are rarely taken back in house, Price said.
"Don't look at as a five-year window," Price cautioned fellow trustees. The trustees voted unan-i-mous-ly to issue a "request for proposals."
The dining services department receives no tax dollars and is expected to be self-supporting. The 1997 losses were covered by a previous year's reserves.
However, dining service books are still in the red because of carry forward "bad debt." Other factors contributing to the debt were unbudgeted consultant fees, "costs associated with the reduction in force of past dining service management," and an adjustment in the books regarding inventory to reflect wholesale vs. retail cost of the food stuffs.
About 300 people work in food service on the U. campus. Proposals from private vendors could contemplate using privately paid workers.
Sodexho Marriott could bid on the job. The food service company directs dining services on 800 school campuses nationwide, said Thomas Wilson, managing director of University Dining Services. Wilson is a Sodexho Marriott employee in contract with the U.