At What Cost?
Balancing Kenyon’s Community Values and Fiscal Restraints
By Gabriel Rom
Kenyon’s proposed partnership with an external corporation to manage building and grounds operation demands our attention. Kenyon students are told to investigate and scrutinize the world from afar — to be conscious citizens — but how hollow does our education become if we cannot train our focus on what lies right in front of us? If an equitable solution to the Sodexo controversy is to be found, it will come from suspending judgment and empathizing with narratives not our own. This article will articulate arguments from both sides of the picket line.
In response to public outrage at the news that Kenyon would be outsourcing maintenance work to Sodexo, the administration formed the Maintenance Management Advisory Panel (MMAP). The panel, made up of Kenyon professors, administrators, trustees, students, and one representative of United Electrical Local 712, has been charged to “recommend to the administration a plan of action in the best interest of Kenyon.” All options are being discussed within the panel, from outsourcing (either with Sodexo or another entity), outsourcing through a system of phases, to not outsourcing at all. The panel has met with consulting experts, Sodexo officials, union representatives and others in an attempt to give a comprehensive and transparent analysis on how Kenyon needs to move in the future.
A distinction must be made between the way in which Kenyon told its maintenance staff that they would no longer be employed by Kenyon, and the merits of the decision itself. It is unconscionable that the panel was only convened after public outrage in the face of a decision many felt strongly opposed to. When asked if the issue of communication failures would be addressed, Larry James Esq., a Kenyon trustee and member of the panel, told the Observer “that may not be within our charge…we have to sit down and try to be transparent and open.” When pushed Mr. James stated, “I can say emphatically: communications could have been better handled” adding that there was a “mutuality of failure of communication, from my perspective.”
A full historical inquiry by the MMAP is unrealistic. The panel cannot be beholden to past analysis and be bogged down by recrimination. As Mr. James said, “you don’t chase ghosts.” But to ignore the historical context of this decision is to examine it with one eye shut. The committees’ insistence to only look forward comes across as an unwillingness to acknowledge the past; a fear that stones turned over will cause incurable headaches.
In another MMAP exchange between Dennis Painter, a representative of Kenyon’s skilled trades union, and Mr. James, Mr. Painter claimed that “union members were not aware of problems that the administration may have had at that time, nor are they currently aware of problems” Mr. James responded by asking how Mr. Painter might address the $300,000 Kenyon must pay in contracting services. Mr. Painter questioned the cause of the expenses, while Mr. James responded that based on prior data, “it seems to be that we don’t currently have the expertise needed.” Mr. Painter claimed that he has not yet seen evidence to support such a claim. It goes without saying that relevant evidence must be given to all, ensuring that there is no privileged information, and that the panel maintains its fairness and transparency.
The Financial Rationale for Outsourcing
In the past, Kenyon management has dictated where and how maintenance will spend money while maintenance has raised many objections, which, according to maintenance, have often gone unresolved. Can Kenyon save money by implementing a better workflow? Or, are there costs that Kenyon will incur no matter how efficient workflow is — for example, projects that Kenyon must outsource because of core competency? By partnering with Sodexo, Kenyon would be able to pull most of these contracts under one umbrella, save money and reduce inefficiency.
As Kenyon continues to raise money through capital projects and continues to build more technologically advanced buildings (such as the KAC and Gund Gallery), Kenyon’s maintenance staff will be forced to update and revamp its workflow systems and technologies. For example, the new North Campus Apartments utilize geothermal pumps that require extensive expertise to maintain.
According to Mark Kohlman, Kenyon will begin next year with an $800,000 deficit in operating expenses. Such a shortfall must be accounted for. In 2004 an outside consultant, Owen Pruden, conducted a Buildings and Grounds Operational Assessment for Kenyon. Mr. Pruden summarized his testimony to the panel saying, “there is no doubt Kenyon can continue with services being provided by our own departments, but we must be willing to invest extra resources.” In short, we can do it, but it’s going to take large amounts of time and capital. No cumulative costs of in-house training have yet been stated by the MMAP.
Outsourcing allows Kenyon to mitigate the costs of internal training as well as offering Kenyon ready-made management systems, expanded preventive capacity, a reduction in outsourcing costs (Kenyon currently spends upwards of $600,000 on single-time outsourcing jobs) and a host of other efficiency-boosting benefits. In addition, no current Kenyon employees will lose their jobs nor will their wages and benefits reduced, at least until the expiration of the recently signed union-negotiating contract, a contract that Sodexo (or any other external entity) must honor for two years. When asked if Kenyon employees’ wages could be renegotiated, Mr. James responded saying, “maybe, but you usually don’t see a reduction in salaries.” He emphasized that such a discussion is “premature, premature, and premature.”
Where else do savings from outsourcing come from? Firstly, through Sodexo’s reach. Sodexo has access to discounts from outside vendors, and a relationship with other schools. Secondly, a two-tier wage model will be implemented, meaning current Kenyon employees will have their wages maintained while new hires will receive less. Currently, GLCA tuition benefits will not be included for new hires either, although this is a budgetary issue that could be sorted out at a later date. Thirdly, jobs will be reduced. Sodexo has incorporated an attrition rate into their model for Kenyon — meaning they expect some Kenyon employees to quit, and thus can consolidate job positions.
In a September 19th conversation between panel members Mark Kohlman and Professor Baumann, Mr. Kohlman stated that “Sodexo may have different processes which may not include certain positions”. In response, Professor Baumann asked if “this then shows that the whole burden of cost savings is on labor?” Mr. Kohlman responded by mentioning, “65% of Kenyon’s costs across the entire college are salary and benefits.” Professor Baumann then rephrased, “this comes down to labor.”
A Fork in the Road
According to the minutes from a September 19th MMAP meeting a member asked if “we have been ‘asleep at the wheel’, or are we addressing needs as they come up during an audit?” Such a concern was echoed by Professor Baumann, who said, “failure to invest in maintenance change has left us penny wise and pound foolish…it is our own short-sighted decisions that we need to correct.” Mr. James, upon hearing this statement, responded, “I can tell you [The Observer] that the foundation of [Professor Baumann’s] statement is not in the record…I would push back and say to look at the business model from the educational side of it.” When asked if he felt that there was a lack of proper prioritization in the past Mr. James stated that “there is always that fork in the road…it comes to that point where you say ‘okay, we’ve put the decision off as long as we can…we’ve got this window of opportunity that we now have to move on.” Do we now trust our administration enough to believe they will allocate these resources in a legitimate and efficient manner? How deep does our mistrust of the administration cut?
Is Kenyon a Business?
The idea of Kenyon as a business seems repulsive to some. We often imagine that business and higher education are antithetical to each other. Such an outlook might have some philosophical credence, but in pragmatic terms, the success of Kenyon’s business model is what allows the school to exist.
Kenyon is indeed a community, but we’re an astronomically exclusive and expensive one.
The average college tuition is $17,000, while Kenyon costs $53,000, without including room and board. To put this in perspective, the median income of an American family is $50,000.
There might soon be a day when Kenyon’s tuition costs $65,000. A four year education at Kenyon will cost nearly a quarter of a million dollars. As one Kenyon student currently on financial aid stated to the Observer “[Kenyon] students need to get off their high grass-roots political activism horses and realize that in this economy everyone has to make sacrifices…I’m not saying that I agree with the Sodexo corporation but people have seriously overreacted.”
At what point does outsourcing become legitimate? Is there a price at which this idea works? Or on the other hand, was the correlation between high tuition and profligate labor costs, one made by President Nugent, just a cynical ploy to deflect criticism and outrage from the community?
The recession has only increased the amount of financial aid requests in recent years. In conjunction, both state and federal aid grants are being reduced, putting more financial responsibility on educational institutions themselves. The savings from outsourcing, estimated between $200,000 and $500,000 a year — in addition to a reduced maintenance budget, could offer increased need and merit based aid to dozens of students per year. Does this then present a false choice – that community members must be locked out in order for others to be let in?
The cost of higher education is an epidemic. The average student graduates with $20,000 in student loans. This is not an imagined scapegoat by the administration. That is not to say that cost cutting can excuse disrespect and a lack of dignity afforded to our maintenance staff. The way the college handled its initial decision was inexcusable. Are there other ways to cut down on college costs? Absolutely. According to a 2009 report from The Chronicle of Higher Education, President Nugent is paid over $500,000. Shared sacrifice rings hollow when those at the top skirt responsibility. According to notes from a September 12 MMAP meeting, Mr. Smith stated “ he has no problem with sacrifices…and would like to think that the whole college would be willing to make sacrifices to keep one group from shouldering the burden.”
A Living Fossil
What makes Kenyon a place where Amy Goodman and John Abrams can speak in consecutive years? Where Bill Kristol and E.J. Dionne can stand side by side and argue in front of a crowd of hundreds? There is a spirit on this campus that deeply embraces the free exchange of ideas. It is this spirit that gave birth to, and nurtured, the publication I am writing for now. It is this spirit that allows ideas which are wildly out of vogue beyond the Kenyon bubble to find expression in our hallowed halls. And while a partnership with an external corporation might seem to have little direct connection to such a spirit — the introduction of outside influences add a level of distance between Kenyon and its community. The financial realities of cost cutting are not lost on me, but the spirit of our school cannot become a bargaining chip.
As one professor put it, Kenyon is a “living fossil”, and a delicate one at that. If we move the equilibrium too far in one direction, the fossil crumbles and Kenyon’s spirit becomes sanitized. ‘Open intellectual discourse’ becomes a pithy marketing ploy emblazoned on two-page brochures rather than a statement of truth.
It is too early for definitive answers, but the evidence thus far shows that Kenyon can meet future challenges without outsourcing. Yet there are also legitimate financial benefits that will be afforded to Kenyon by outsourcing. Both narratives are compelling and both must be taken seriously. UE712 will present a workflow plan at the September 29th MMAP meeting. This system, titled the I.A.M. High Performance Work Organizational Partnership, has been credited with solving efficiency problems at major institutions around the world, and economic analyses from MIT and The University of Chicago have shown its effectiveness. The MMAP should afford this plan the seriousness it deserves. Ultimately, I believe Larry James got it right when he said that some of the campus debates were simply ‘premature’. I urge all Kenyon community members to follow the MMAP minutes posted on the Kenyon website, to talk with the maintenance members, and to attend any future public forums. The first of which is tentatively set for October 3rd. The conversation is not over.