A gift - if UCA keeps vendor on

Proviso on $700,000 for revamp of house surprises some trustees

— The University of Central Arkansas, whose board chairman last week announced a $700,000 donation from food vendor Aramark to renovate the UCA president’s home, will not get the money unless it renews a contract with the company, a letter obtained Tuesday shows.

The condition attached to the donation caught at least three members of UCA’s board of trustees by surprise, angering one of them.

“I am livid,” trustee Bobby Reynolds of Searcy said Tuesday evening. “If I had any knowledge of this prior to our board meeting last Friday, my opinion would have changed dramatically.

“I am very unhappy, and I promise you we will get to the bottom of this,” he said. “This will be investigated, and it will be straightened out.”

Reynolds was the trustee who made a motion during Friday’s meeting authorizing two UCA executives to contact a Little Rock architectural firm to seek preliminary cost estimates for the renovations.

Aramark provides food services for UCA under a competitively bid contract.

In an Aug. 12 letter to Diane Newton, UCA vice president for finance and administration, an Aramark official wrote, “With this unrestricted grant, we request an extension of our contract by 7 years, to May 31, 2019, and request buyback protection.

“This grant will be amortized over the term of this extended agreement,” added Brad Crosson, Aramark district manager for higher education. “The funding would be presented to the university immediately upon contract execution.”

When Scott Roussel, chairman of the UCA board of trustees, announced the donation Friday to the private, nonprofit UCA Foundation, he said nothing about any conditions. He also said he would not give many details.

“It’s a godsend that Aramark stepped forward,” Roussel said at the time.

Roussel did not return a phone message or e-mail late Tuesday evening.

UCA released a copy of the letter and other documents to the Arkansas Democrat-Gazette on Tuesday afternoon in response to a request under the Arkansas Freedom of Information Act.

Reynolds said he saw that letter for the first time Tuesday afternoon after someone at UCA e-mailed it to him.

Trustee Victor Green said he, too, had been unaware that the donation was contingent upon a contract extension.

“That is something I did not know,” Green said. “I would think that would have been some information we [trustees] would have wanted to know. This is my first time hearing about it.”

Green said he often travels and may have not seen an email about the matter.

Trustee Harold Chakales said, when contacted by phone Tuesday evening, “I know nothing about that.”

Trustees Rush Harding III and Kay Hinkle did not return messages late Tuesday night. A phone number was unavailable for trustee Randy Sims.

During Friday’s meeting, Roussel and Harding expressed relief that private funds could be used for the house renovation, which had stirred discontent among some faculty and staff members who didn’t want more public money spent on such work.

The board also voted Friday to allow UCA President Allen Meadors and his wife, Barbara, to find a home suitable for them to live in during the renovations. The board agreed that $1,500 monthly in state funds could go for that house and that any additional money needed would come from private money raised by Harding.

Aramark, a Philadelphiabased company, has been UCA’s food-service provider since 1976.

On Tuesday, Jack Gillean, UCA’s chief of staff, said the university had not decided whether to issue a request for proposals from companies for the food-service contract or to go ahead and just renew Aramark’s.

“No decision has been made about whether to extend the contract with Aramark or to go back out with [a request for proposals],” Gillean said.

That decision would come this fall, he said.

Asked if a company that has a university’s food-service contract can legally make donations to that school, Robin Rogers, deputy director of the state Office of Procurement, said, “They can donate ... if the food services that they offer to that university are bid on a competitive-bid basis. Then there would not be a conflict. ... There could be a conflict if it was not a competitive bid.”

In Philadelphia, an Aramark spokesman said the company did not have to answer questions about money it gives to universities because it is a private business. She said, though, that its donations are “usually part of contracts.”

Aramark spokesman Karen Cutler did not answer specific questions later e-mailed to her.

“As part of our partnerships with our college and university clients, we occasionally make investments to help finance improvements or renovations to facilities that support the campus community,” she wrote.

Reynolds said trustees “should have been notified of this [contract condition] prior to our board meeting last Friday.” “I don’t know who is responsible for not notifying us of this,” he said. Reynolds said he did not think it was unethical for the donation to be tied to a contract extension. Still, he said, “Had we known of this prior to the board meeting, this would have probably changed most of the members’ opinions of this deal.”

He said he would not have favored spending any of the money until it was “in our hands.” But he said that even if Aramark “had never offered this money, they probably would have been on campus for several years past that.”

Meadors and UCA spokesman Jeff Pitchford did not return phone messages seeking comment on the letter Tuesday evening.

The total value of the 2005 Aramark contract was unclear Tuesday.

Newton, UCA vice president for finance and administration, said through Pitchford that Aramark has invested more than $6.7 million in UCA, including $3.6 million for cafeteria renovation and $1.6 million for the student center’s expansion and food court.

“These investments are amortized over a number of years as an expense to the food service provider,” she said in an e-mail through Pitchford. “This is a common practice throughout the country with not only food service providers, but drink vendors, bookstores and others. For example, on the UCA campus, PepsiCo invested in an indoor practice facility and Barnes and Noble has invested in renovating the bookstore.”

She also said the “unrestricted $700,000” funding “is not tied to [students’] board rates,” referring to what students pay for meals.

Newton said that, by law, the Aramark contract “does not require a competitive bid. The Board of Trustees will ultimately make the decision on the renewal of the contract.”

Further, she said, $4.7 million is outstanding on the investment account held by Aramark. “If another vendor took over, that amount would be required to be bought out,” she added.

The Aug. 12 letter from Aramark to Newton said that Aramark was prepared to offer the “unrestricted grant” of $700,000 for renovations to the president’s home in “an effort to continue our partnership and align with the visions of the University.”

The letter noted that the proposal required full corporate approval “but we are confident that this will happen in a timely manner.”

Front Section, Pages 1 on 08/31/2011

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