Bookstore Discussion 5-15-2015

On Friday, May 15th, the Executive Board convened for a meeting with the orders of business being the confirmation of appointments of officers and committee chairs, and a report on the bookstore. All of the appointments were approved swiftly, and the discussion turned to the bookstore.

125th President of the Union Erin Amarello started the discussion by giving background on the work that has already been done. She made us aware that the idea of bringing in a third party to manage the bookstore is not a new one. Starting with John Stack, four Presidents of the Union (myself included) have been involved with this project. After several years of analysis of our current operations, and a downward trend in revenue becoming apparent, invitations were sent out to national companies to propose ideas for collaborative operation of the bookstore. Representatives from Barnes & Noble and Follett visited the Union and extended offers for future work. Following those offers, Gretchen Sileo formed a committee of 4 Executive Board members to take trips to stores managed by each of these companies to see what could be done with spaces similar to ours. That committee was particularly impressed by UMass Amherst’s bookstore. That store, like ours, had low ceilings and a lack of natural light that made it difficult to be attractive and appealing to customers. Operated by Follett, they managed to solve those problems and create a clean, inviting store environment. At this point, no formal decision had been made.

In the spring of 2014, the 2013-2014 Executive Board supported the contracting of outside consultants to evaluate the current operations in the bookstore and advise the Board in its future endeavors. The consultants were contracted through Procurement Services, and their expenses were paid from the bookstore budget. They compared us to other collegiate bookstores, and also compared the options of contract management against continued self-operation. Hiring the consultants required the first of the three non-disclosure agreements (NDAs) that were eventually entered into. This was required by the consultants so as to protect their intellectual property (as similar advice can be given to most college bookstores, they believed that allowing their report of our bookstore to become public could hurt their business). Their report gave recommendations if self-management were to be chosen, but it also gave estimates showing that contract management would be much more profitable. In addition, maintaining expected profit levels under continued self-management would require large capital investments that the Union could not afford to make without outside intervention.

Based on this information, the 2014-2015 Executive Board had a Request for Proposal (RFP) drafted and sent out by Procurement Services on behalf of the Union and Institute. After receiving proposals from several companies, the Executive Board reviewed their options and made a nomination to work with Follett. This required a “Letter of Intent” to be issued to Follett to confirm the Union’s desire to accept Follett’s proposal. This Letter of Intent was also drafted and issued by Procurement Services. Director of the Union Joe Cassidy commented this is Standard Operating Procedure (SOP) for campus departments. When the Executive Board voted to support the Letter of Intent, the letter had not yet been signed; without an official agreement in place stating the Union was working with Follet, it could not be publicized. Instead, the decision to go forward with the letter was approved via a straw poll at a closed Executive Board meeting instead of through the normal motion process (as motions immediately become public). This was the infamous “official, non-motion decision”. Throughout this process, Joe Cassidy, members of the Institute’s financial departments, representatives from Follett, and other relevant parties were brought to present to the Executive Board and answer its questions. The Executive Board expressed their requirements for contract negotiations to Cassidy in great detail, and he has provided feedback to the Board throughout the process including the RFP and contract negotiations.

At the present point in time, the Executive Board (both the outgoing and the incoming one) is under three separate NDAs. First, one with the consulting company to not allow their report to be public. Second, one between us and Follett to not release details of the contract. This is for negotiating leverage, and to avoid a bidding war between them and a competitor. It also stops their competitors from “sniping” the deal, or interfering with their negotiations at other schools. The Executive Board has been advised that this is standard practice. Third, NDAs were made regarding the RFP sent out by the Union. This ensured that the Union would not release any proposals that were received, and is also standard practice. Erin Amarello has said that were she to be in the same situation again, she would write a motion vague enough as to speak to the situation as well as not violate the agreement.

After she was finished detailing the history recounted above, Erin Amarello urged the Executive Board to publicly show support for the contract management of the bookstore and finish the project. Kyle Keraga, 149th Grand Marshal, raised a question about a rumor that revenue would be split between the Union and the Institute. Director of the Union Joe Cassidy replied that the split in revenue would come from the inclusion of the campus computer store, run by the Division of the Chief Information Officer (DotCIO), in the bookstore’s location. Cassidy stated that it is outside of the scope of the Follett contract, and that it remains an unresolved question until a contract is signed. This is due to the ongoing contract negotiations, and the fact that specific figures relating to revenue will not be known until the contract is finalized. Director of Procurement Services for the Institute Ron Moraski (who is serving as one of the contract negotiators) confirmed that any internal determination of how revenues are used is not part of the contract. Members of the Executive Board raised concerns about any split in revenue. Graduate Council Representative Nicholas Thompson is currently seeking more information.

Club/ICA Representative Gregory Bartell asked who is party to the NDAs, and requested copies of the NDAs. Moraski said they were standard NDAs, and Cassidy said he would make them available to Bartell through Procurement Services. Cassidy stated that he has been involved with negotiations on behalf of the Executive Board, and has been keeping the Board updated with weekly reports. Bartell is currently seeking those documents.

Club/ICA Representative Jeremy Feldman asked if the Executive Board had the authority to approve the contract. Cassidy replied that it is an institutional contract, and that the Executive Board is “part of the institution”, a statement that raised some concern amongst the Board. It should be noted that no one from the Union can directly sign the contract, as all contracts are handles through Procurement Services. Cassidy commented that this is also SOP. Amarello commented that the contract will bring good things for the Union, that the Board very intricately laid out the needs and desires of the Union, and that the contract negotiation team has kept those requirements in mind.

Class of 2018 Senator Justin Etzine asked several questions and raised a few concerns. He asked whether the Union or the Institute would be signing the contract with Follett and who was covered by the various NDAs. He then expressed his concern on behalf of his constituents that the process was not made more public. In response to his first question, it was explained that the Executive Board does not have the authority to enter into contracts. For the second question, who is covered by the NDAs remains an open question until the text of the NDAs is given to the Executive Board. With regards to his concern, it was brought up that it was out of the control of the Executive Board to publicize the change in bookstore management while it is still under the NDAs.

Etzine raised the issue of whether this was a transfer of responsibility out of student hands. Amarello replied that the Union currently hires someone to manage the bookstore and that it is now hiring a company to manage it.

Keraga raised concerns about the term “institute issue”, which was used by Cassidy in his response to Feldman’s question.

Outgoing Executive Board member and former Senate-Executive Board Liaison Shoshana Rubinstein commented on the fact that the Board was very thorough and specific as to what their requirements were. Keraga felt his concerns were addressed appropriately, and he urged the new Board to do everything in its power to preemptively alert the public about issues like this in the future.

Rubinstein requested that Cassidy provide the Executive Board with the list of focus groups that Follett met with while seeking student input. She is currently seeking this information.
Feldman then introduced a motion. The text of the motion read:

I move that the Rensselaer Union Executive Board:

1. Issue a formal apology to the Student Body for willfully subverting the Executive Board Bylaws by holding an unofficial and secret vote to pursue the negotiation of contract management of the Union Bookstore.

2. Authorize the Director of the Union to negotiate the terms of contracts, on behalf of the Rensselaer Union Executive Board, relating to the operation and management of the Union Bookstore by an outside company; such contracts shall only be valid and binding upon an affirmative vote by this Board once the terms of the contracts are finalized.

3. Release all relevant and pertinent information regarding the current state of such contracts to the Student Body that does not violate any non-disclosure agreements entered into by the Union or their representatives.

Etzine encouraged the Executive Board to make any and all information available as soon as possible to the student body.

Cassidy gave an overview of the situation, stating that advantages from partnership would include more used and rental books, lowered expenses for students, a consistent income for the Union, and a better bookstore all around. He stated that there would be a “$200,000 problem” next year if the contract does not go through and that the Union does not have the capital to match the improvements that would be brought through contract management. Finally, bookstore employees are being treated better than the industry standard.

Feldman commented that his motion ensures that the Board knows all details of the contract before approving it, that they are selecting who negotiates on their behalf, and that the Board chooses the results of negotiations.

Keraga commented that there needs to be a balance between authority and accountability to constituents, and that he does not believe what was done was right. He believes a motion should have preceded a letter of intent, and showed his support for Feldman’s motion.

Moraski commented that there can be other options down the road, and that this contract is not the “be-all and end-all”. He stressed that this contract is relatively short term, and that provisions exist to cancel it should the Institute and Executive Board not be satisfied with the results.

No further discussion was sought. The motion was reread and voted upon, and passed 12-0-0.

General discussion of the bookstore situation was reopened. It was commented by Cassidy and Moraski that it is late in the progression of contract negotiations, and that the contract will be finalized soon. Moraski confirmed the Board will be allowed to read through the pertinent points of the contract as it relates to the Union. The term “collegiate store” was brought up as a point of concern, but was explained as just a name change (a comparison was made to Pizza Bella becoming Big Apple Pizzeria). Moraski commented that he is looking into having the original consultants that evaluated the bookstore under the 2014-2015 Executive Board review the final contract, as they are experts in the field of collegiate bookstores. It was confirmed that this review would come at no additional cost to the Union. It was stated that employees will continue to be treated above industry standard and that most, if not all, positions of existing staff will carry over under Follett’s management unless those staff members choose to quit. Cassidy stated they are aiming to keep the Union as the largest employer of students on campus.

Cassidy commented that there was a public forum held to discuss the business management plans within Student Life, and that the plans for the bookstore were covered. Keraga and Amarello attested to being in attendance, and Keraga commented that it was less organized than it normally would be due to the position of Vice President of Student Life being vacant. The position was filled as of Friday.

The final comment in the discussion came from Bartell, making it known he did not want to be required to check his bag into a cubby hole while shopping.

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