UCA studies new food-vendor pact

Audiotape reveals advice to trustees

— The University of Central Arkansas board of trustees will consider approving a 10-year contract Monday with Aramark, just as a police investigation of the food vendor’s $700,000 offer to renovate the UCA-owned president’s house last year is nearing an end.

The offer led to the Sept. 2 resignation of UCA President Allen Meadors after he and then-board Chairman Scott Roussel described the money as a donation and did not tell other trustees that it was contingent on the renewal of Aramark’s contract for seven years.

Both men later said they had been aware of the condition but failed to mention it.

Under the proposed pact, which UCA President Tom Courtway negotiated, a major benefit to UCA would be Aramark’s agreement to waive about $2.2 million in past interest that UCA has accumulated.

In another development, an audio recording of the Aug. 26 meeting when Roussel announced the renovation offer further reflects the lack of accurate and complete information given to trustees and the public that day.

According to the recording, obtained under the Arkansas Freedom of Information Act, UCA’s chief financial officer, Diane Newton, told trustees that some state guidelines would not apply to a major renovation of the house because state funding would not be used. She also said UCA would not need to take bids if the renovation was privately funded.

Yet Newton, vice president for finance and administration, had learned in an Aug. 12 letter Aramark sent to her that the $700,000 offer was part of the vendor’s contract proposal. That meant the money would have been public, or state funds, had it been accepted. UCA declined the offer after the Arkansas Democrat-Gazette exposed the letter.

According to the recording, Trustee Bobby Reynolds asked, “Even though this project will be funded with private money, do we still have state guidelines that we will have to follow on this facility since it does belong to the state?”

Newton responded: “We do have some state guidelines, but we don’t have to jump through all the hoops that we would if it was funded by state dollars. But we do have to get some approvals.”

Another trustee then asked Newton, “What about the bid process? Do you have to take it out to bid and all that?”

Newton replied, “If it’s on private money, we can, we can just continue on with the existing architect if you want to.”

Newton declined to comment extensively Thursday on her remarks because the investigation by the Arkansas State Police is still under way. She said, however, that when she made the comment on bids, she was talking only about the board seeking preliminary information, such as cost estimates. UCA had an on-call architect that it already had previously consulted.

While talking generally and not specifically about the Aramark matter, Newton also said Thursday that if work “goes through an external source such as a foundation” or a third party, such as a vendor, “then those [projects] are not subject to the same bid process that [they] would be if those invoices were just running through the school like normal.”

Asked about Newton’s reply to his question on Aug. 26, Reynolds said Thursday, “I don’t really have a problem with it. ... I don’t know what her thinking was. Through all this stuff, I do feel like she was going to be led to be the scapegoat when I think she was probably doing what she was told to do. When your boss tells you to do something, you’d better do it.”

Newton has “always been aboveboard” and is “very capable,” Reynolds said.

Newton’s Aug. 26 comments came after more than one trustee, including Roussel, said they understood the sentiment was that money spent on further house renovations should come from primarily private funds.

More than $400,000 in mostly public funds had already been spent to repair and renovate the house since Meadors became president in July 2009.

According to the recording, Roussel said, “What I’m hearing is, one ... let’s try to keep as little tuition and state money going toward that as possible. And two, that basically, if we do something, let’s make sure we’re doing something that will take care of it for many years ... and also not take resources away where ... where maybe we could spend our resources raising money for something else.”

Yet, he later said, “There might be some additional money come in, too.”

The recording shows that Roussel also stated in his announcement, “I’m not going to get into the details of how this [Aramark offer] happened. But it happened pretty quickly; it happened here just recently.”

The staff senate has urged Roussel to recuse from any action related to the Aramark investigation, food-vendor selection and the president’s house until the state police investigation ends. The faculty senate has urged him to recuse from any Aramark-related action pending the investigation.

Roussel did not return a phone message or e-mail requests for comment on whether he plans to recuse from any Aramark vote Monday.

Prosecuting Attorney Cody Hiland said Thursday that the state police investigation, which he requested, is nearing a conclusion.

Asked if investigators were aware of Newton's Aug. 26 comments, Hiland said, “The investigators have access to all of those recordings ... and are fully aware of what was stated by the persons involved.”

The Democrat-Gazette requested the audio recording after seeing an e-mail Meadors sent to Courtway on March 11. In that e-mail, also obtained under the Freedom of Information Act, Meadors said he had read the Aug. 26 board minutes and had two questions.

In the e-mail, Meadors wrote, “I have two questions, first my remarks are not included (no big deal) and the sentence regarding Chair Roussel statement regarding the offer from Arkmark says ‘told board that Aramark had given a gift of $700,000 to the University for renovation of the President house’. You might want to check with Mr. Roussel and the tapes, I don’t remember the statement being that straight forward.” A review of the recording found no reference by Roussel to a “gift.” He did, however, call the offer “a very generous donation” and “a godsend.”

Meadors could not be reached for comment. His new phone number is not listed in directory assistance, and he did not immediately respond to an e-mail seeking comment.

Courtway said he believes the proposed contract is much better than the current one with Aramark, UCA’s food vendor for 36 years.

Under the proposed deal, he said, either party could cancel the agreement with 90 days notice. Even if a cancellation took place, UCA would not owe any interest unless it failed to pay Aramark within 30 days the remaining balance of any investments or capital projects the company financed at UCA.

Vendors routinely seek to recover the costs of such projects through various ways, such as declaring them operating expenses and sometimes charging interest.

UCA would, however, have to pay the remaining principal balance on any Aramark investments if the contract were severed before its scheduled end. UCA already owes about $4.4 million in unrecovered Aramark investments.

Another change from the current Aramark contract, which ends in May, is that the rate at which Aramark recovers its investments would not extend past the length of the new contract. The current seven-year contract extended that amortization over 20 years, long past the end of the pact, Courtway said.

Courtway said the contract would also mean an increase of 1 percent or less on students’ meal charges.

Sodexo was the only other vendor competing for the UCA contract.

Front Section, Pages 1 on 03/30/2012

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