The University of Kentucky will begin negotiations with Aramark Corp. to take over the school's dining services, President Eli Capilouto announced Friday.
The surprise announcement came just two hours after students spoke to the finance committee about their opposition to the privatization, which has been contested for more than a year.
Eric Monday, vice president of finance and administration, said the negotiations would begin immediately, with details to come before the board's June meeting. If successful, Aramark would take over dining this summer and be open in the fall.
"We see tremendous opportunity on the meal plan and meal plan value," with costs going down, Monday said. "We also see amazing opportunities for facilities investment and transformation."
UK started looking to privatize dining after it became clear that new dining rooms would need to be built to accommodate thousands of students living on campus in new residence halls, also built by a private developer. But dining areas weren't provided for in the contract by Education Realty Trust, so UK had to look elsewhere, without raising its debt limit too much.
The negotiations with Aramark would guarantee that:
■ The current 107 dining employees will remain UK employees with benefits.
■ The company will increase current sales of Kentucky Proud and local farm food, which totals $1 million and $800,000 respectively.
■ The company will commit to millions of dollars in renovation and construction of new dining areas. The original request for proposals called for a private vendor to spend as much as $50 million on new facilities.
■ The company will finance a Food Institute on sustainability to be run with the College of Agriculture, Food and Environment.
Aramark provides services to more than 1,000 colleges, universities and K-12 schools across the country, and it has 2,500 employees.
It has a troubled history in Kentucky. In 2009, inmates at the Northpoint Training Center rioted against lockdown conditions, along with reports of general concern about the food provided by Aramark. The prison kitchen and five other buildings were destroyed.
The riot triggered a 2010 examination by State Auditor Crit Luallen, who found that Aramark skimped on food, had food-safety problems, overbilled the state and refused to provide records on food and personnel costs.
After the meeting, Monday said UK officials had held meetings with several state corrections officials about Aramark.
"We're aware of that matter ... and evaluated that audit in great detail," Monday said. State corrections still has a contract with Aramark, and corrections officials speak highly of their service and how much money the state has saved, Monday said.
"Our contract will have appropriate terms and conditions," he said.
The two students — Autumn Murphy and Brock Meade — who spoke at the finance committee against privatization did not know the decision had already been made.
Their organization, UK-United Students Against Sweatshops, sent a statement after Capilouto announced the Aramark choice.
"United Students Against Sweatshops continues to oppose this privatization process," the statement said. "We believe that before finalizing the contract with Aramark, there should be another public forum held on this issue. We call upon the Board of Trustees to delay this issue until the beginning of the fall semester to ensure student awareness and support. While we support the removal of Sodexo from consideration, the least President Capilouto can do is provide one more opportunity to give students a voice."
The Board of Trustees also voted to approve a 5 percent tuition increase for in-state students next fall. That brings the average annual cost of tuition for in-state students to about $10,616.
Out-of-state students would see an 8 percent increase. The changes will have to be approved by the Council on Postsecondary Education.
The total "cost of attendance," which includes tuition, fees, books, housing, dining and other costs, is estimated to be $26,000 next fall, UK officials said.
Housing charges varied. New housing would go up 3 percent, while single rooms in older residence halls would go down by 19 percent. Dining changes were scheduled to go up slightly, but officials said they hope they will actually go down as the Aramark contract is worked out.
Most trustees said little about the tuition issue, as trustee David Hawpe pointed out there had already been "deep discussion" about it, apparently outside of any official trustees meetings.
UK spokesman Jay Blanton said administrators met with small numbers of trustees for briefings on the tuition increase, but he said he didn't know the size of the groups.
"We made the appropriate officials available to board members prior to the meeting to address their questions and provide the appropriate background and context about the substantive issues they are considering," he said.
Faculty trustee Irina Voro was the only person to speak at length on tuition hikes, which she opposes. She said too much money is being spent on administrative costs and not enough on teaching.
"Let me put it bluntly today," she said. "I doubt the administration's explanation of the necessity of the tuition raise. I seriously doubt their numbers, and I am not convinced by the rest of their claims."
Linda Blackford: (859) 231-1359. Twitter: @lblackford.