Eastern Kentucky University has decided to pay Aramark Corp. $7.6 million a year over the next five years to operate its custodial and grounds services, cutting 180 employees in those departments.
Aramark secured the contract, effective Aug. 1, with the promise of a $3 million “one-time grant” to EKU, “in consideration of the university’s agreement to award this agreement to Aramark.” The company also will pay $400,000 to buy custodial equipment and $300,000 for grounds equipment.
EKU officials said there will be a positive financial impact of $5 million for the university. Fired employees will be offered severance agreements that include a one-year extension to apply for a tuition waiver benefit, an extension of health insurance benefits and a cash payment.
“As the university seeks to remain competitive in the higher education landscape, efficiencies must be sought from every university area and unit. One area identified that will be operated more effectively and efficiently if privatized is custodial and grounds maintenance operations,” Barry Poynter, vice president for finance and administration, said in a campus-wide message Monday. “We value the contributions the custodial and grounds staff have made to the university and thank them for their years of service to the students, faculty and staff at EKU.”
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Aramark spokeswoman Karen Cutler said all former EKU employees would be invited to apply for jobs at Aramark, which has operated EKU dining since 1999. Last year, EKU and Aramark signed a new five-year dining deal. The $37 million contract requires Aramark to pay for a new dining center.
Aramark was hired to handle dining at the University of Kentucky under a similar arrangement. That $245 million contract included the construction of a new dining center and $5 million for a food institute.
“We value the skills and expertise of the existing staff and encourage everyone to apply so we can keep all of these jobs in the local community,” Cutler said.
Aramark is holding a job fair this week from 9:30 a.m. to 4:30 p.m. in the Martin Conference Room.
Aramark offers health benefits to all employees, but employees would participate in a 401K plan, rather than the Kentucky Employees Retirement System to which they currently belong. Also, Aramark employees will be subject to required background screening, which is standard for any employee working at the university. EKU officials said part of the savings will include fewer pension payments and benefits.
Stephanie King, chairwoman of the EKU Staff Council, said her group did not have any input into the deal.
“It did affect 180 of our staff members,” she said. “I understand why the decision was made, but I don’t know if it could have been prevented because of the budget situation right now.”
Last December, EKU was facing an $11 million budget deficit, which also resulted in cutting several academic programs. EKU spokeswoman Kristi Middleton said that number is now at $3 million.