COUNCIL Special Meeting November 5, 1997
Debate and Action on Consultation and on Outsourcing
At the November 5 Special Meeting of the University Council, attended by some 50 members and a large number of observers, the Moderator, Dr. Samuel Preston, opened by noting, "There is only one item on the agenda for this meeting, and discussion of any other issue is going to be considered out of order." He also reported that the Steering Committee asked speakers to limit themselves to three minutes, and had set an order for initial speakers. As Chair of Steering, Dr. Vivian Seltzer then verified the procedure followed to call the meeting.
Statements of speakers have been transcribed from a Council tape recording and lightly edited to remove false starts and repetitions. Annotations in bracketed italics show where matter has been omitted or summarized. As noted at the end, this account is not complete because either the master or the dubbed tape received by Almanac did not go all the way to the end of the discussion. -Ed.
President's Opening Statement
Dr. Judith Rodin: I'd like to comment on three areas as a way of beginning the conversation-first, the goal of the Trammell Crow contract; secondly the issue of consultation; and third the issue of treatment of employees.
Beginning with the goal: There really are two goals, they are as important as they are simple. First ,to enhance service in our facilities and our residences for the entire University community; and second, to control costs in our facilities management, so that more of our resources can be devoted to the core academic missions of the University.
These goals have been high on our institutional agenda since I came to Penn. In conversations with faculty, students, trustees and some staff, before my inauguration everyone made the same point in different ways: Penn had to do a better job of providing administrative services, and at the same time do it less expensively.
More formally, in 1993, the year before my arrival, the University's Cost Containment Committee, appointed by the Faculty Senate, issued a report that called for administrative improvement and cost-effectiveness in the service of our academic mission. For well over a year in the University-wide strategic planning process that led to the Agenda for Excellence, people from across this institution amplified the same points. More than any other point in the agenda, there was consensus that if we could find the opportunity to improve administrative service, and simultaneously control costs, then we should take it eagerly.
Let me move to consultation. A number of people have complained that there was inadequate consultation before the Administration signed a letter of intent with Trammell Crow. Let me say something about that. First, we signed what was called a non-binding Letter of Intent, which simple enabled us to begin negotiating an agreement. This was not and is not a final agreement. It was the beginning of the negotiating process. That was the point. We wanted to give the campus community an opportunity to think and to comment. A month has now passed since the letter of intent was signed-a month in which, as was intended, a great deal of comment has been voiced and a great many good suggestions have been made. Later I hope that you will ask John Fry to list the number of meetings and consultations that he has personally participated in over the past four weeks. The proposed agreement with Trammell Crow has been improved as a result in response to the many useful suggestions received. Again, that was the point of opening up this month-long process.
Before we ever spoke to Trammell Crow, the Administration had a mandate from all corners of the University to enhance administrative services across the board and to control their costs. Let me reemphasize this point, only to note that there has been a great deal of consultation over a long period of time that led to the mandate to control administrative costs. This is one end re-sult of that consultative process. While we may not be able in all cases to wholly satisfy the desire for consultation across every constituency of the University, I want you to know that I take the need for consultation seriously. I have spent my life, as many of you have, at universities. I respect them as communities and I understand and value the need for inclusion. We are trying to be respectful of that process while running a university.
Third, treatment of employees. I understand why staff affected by the Trammell Crow agreement feel so strongly. Your lives and your jobs are affected by that decision and I do not take that at all lightly. But I want to assure all of you that fair treatment of Penn employees in our facilities operations has been a paramount concern in this process. I'm sure there will be much more discussion of this today, but I would like to make only a few points before relinquishing the floor. It is simply not the case that the affected facilities employees are going to lose their jobs. It will be a contractual provision in the final agreement if signed that a large majority of them will be offered comparable or better jobs with Trammell Crow. It is also not the case that employees who go to work for Trammell will suffer major losses in their employee benefits. While Trammell's benefits package is not the same as Penn's, Trammell has made adjustments to make it close. Domestic partner benefits are now included, employee salaries will be increased to cover any losses that they might experience in dental, medical or vision benefits. In addition, for employees who go to work for Trammell, Penn will continue to provide tuition benefits for the employees and their dependent children as long as they continue to work for Trammell on the Penn account. For the minority of affected employees who do not ultimately find jobs with Trammell or elsewhere within the University, we will provide a range of transitional services to help in their search for work elsewhere. In my judgment this is not at all a case in which the University has shown no regard for its employees. We value our staff very highly and we are taking every possible step to show this as we work through the agreement.
GAPSA's Initial Resolution
Matthew Ruben: I'm addressing you now not as myself but on behalf of the 27 petitioners requesting this meeting. The resolution was brought by GAPSA in response to the obvious recognition based on the reaction to the announcement of the non-binding agreement that something is wrong. And the evidence for that was that a lot of people, including people who are not directly affected by this arrangement, had very extreme reaction and showed their concern immediately and unequivocally. We thought this would be a good way to get those concerns vetted. While it's not a substitute for consultation, it helps to operate upon the recognition that there is a problem with consultation as perceived by many people in the University community and so it's upon their behalf that we bring this resolution.
[Mr. Ruben read into the record the resolution as published November 4; note that a friendly amendment is made immediately after it, and that later in the meeting the motion after "Therefore" is divided into two parts.]
Whereas, Statutes of the Trustees have established University Council, and have empowered this body to "consider the activities of the University broadly in all of its phases[and] recommend general policies and otherwise advise the President, the Provost, and other officers of the University", and
Whereas the Undergraduate Assembly (UA), and the Graduate and Professional Student Assembly (GAPSA) have been established by the Statutes of the Trustees to "discuss and express their views upon any manner they deem to be of general University interest, and to make resolutions and pass resolutions with respect there-todirectly to the President, the Provost and the Trustees"; and
Whereas GAPSA has passed resolutions recommending that the Trammell Crow contract not be approved, and a special committee be appointed by the Trustees to examine the consultative and decision making process at the University; and the UA is considering similar resolutions; and
Whereas both the employee organizations (Penn Professional Staff
Assembly (PPSA), and the A-3 Assembly) recognized by Council as thelegitimate
voices of thousands of University employees, have issued statement strongly
critical of the Trammel Crow contract, and the Black Student League (BSL)
and the African American Association of Faculty, Staff and Administrators
(AAA) have also objected to this deal; and
Whereas, in December 1996, University Council requested that the administration report back to Council on many issues raised by the Trammell Crow contract; and to date the administration has not done so;
University Council strongly recommends that the Trustees act in a manner wholly consistent with the resolutions of the Graduate and Professional Student Assembly, and the expressed views of the PPSA, A-3 Assembly, the BSL, and AAA.
Before we move on I should note that this resolution was written a little over a week ago, and since then the UA has finished considering a similar resolution; and at this time if anyone is willing to offer a friendly amendment... [Amendment is made and accepted.]
Statement of SEC
Dr. Seltzer: The position of the Senate Executive Committee is found in a column in the November 4 Almanac. In essence, it states that the SEC is concerned by tensions which have resulted from the impact of the Trammell Crow outsourcing decisions. SEC encourages reactivation of broad consultation to seek varying and divergent views and particularly asks that the Senate leadership be taken into confidence before the fact.
Statement of GAPSA
Victoria Tredinnick: GAPSA organized this meeting because we felt it was important that some community discussion take place before the trustees met to sign a contract that has very far-reaching consequences. People sometimes, various times, various people, have asked why we have an opinion about something that doesn't concern graduate and professional students. But we feel that it does concern us, and we take very seriously the assertion that we are a community. We have submitted, prior to this meeting, a series of questions to EVP John Fry, and while we have not yet gotten responses in writing, we are expecting a response soon. We feel they're basic questions regarding this Trammell Crow contract and they shouldn't pose too great a problem to answer.
On October 22, GAPSA General Assembly passed unanimously two resolutions. One was about community and the process of consultation at Penn, which I won't read (they're both available on our website, www.gapsa.upenn. edu). The second resolution, which was specifically about the outsourcing of facilities management, reads:
GAPSA urges the trustees not to approve the proposed contract to outsource the management of Penn's facilities. Proper public disclosure and discussion of the details is absolutely necessary for such a major decision to made with confidence and credibility.
Statement of PPSA
James Bean: Our comments also appeared in Almanac November 4, and to briefly capsulize them:
The Penn Professional Staff Assembly has added its voice to the many that have expressed concern over the recent announcement of the outsourcing of facilities planning to Trammell Crow. Many of those affected employees are those who make up our constituency, the A-1 employees.
For years Penn has fostered among its employees a feeling of community and family. The suddenness of the Trammell Crow announcement has virtually shattered that mindset. Executive Vice President Fry has met with PPSA -as a matter of fact we met this past Monday in this room-at that time Mr. Fry offered an excellent insight into his decision-making process. This was something many of us needed to hear. Each of us has been told to do more with less. We all feel we are doing just that. So how do we judge whether our efforts will save our jobs or not? We as administrators deserve to know how we are being adjudged. This is the type of communication which has been lacking during this entire process, but Monday's session and today's hopefully represent significant steps towards correcting that process.
The Penn Professional Staff Assembly supports the proposal made by the A-3 Assembly, calling for scheduled updates before University Council from the EVP on his ongoing evaluative process. We'd like to be kept informed what other areas are prime targets for outsourcing. The PPSA feels it is important for more staff to be included in understanding information on benchmarks used to determine what gets outsourced-in terms of customer service, financial return, and cost avoidance-so that each unit at least knows what they are trying to accomplish relative to the market.
We believe the EVP has heard this call. We are pleased to see the prompt scheduling of resume-writing workshops and job interview training; we would like to see both of these programs, as well as programs centered around enhanced change management and/or career planning seminars, to become part of the overall program offered by the University's Office of Training and Organizational Development.
We have brought these suggestions and some others to the Executive Vice President. He has made himself very open to us, we feel he has heard what we have brought to the table, and we are confident that each of these issues are going to be addressed.
Statement of the A-3 Assembly
Donna Arthur: The A-3 Executive Board made their statement at the last Council meeting and we stand firm on that statement. We feel that the consultative process currently in use here at Penn is in sad shape.
Input after the fact is no good when the morale of the employees has already been compromised. We realize that a letter of intent is not legally binding, but the headlines we saw said University Hands Over Facilities Management to Outside Firm- in the past tense. As support staff, we're not usually involved in decisions of this kind, and we feel that it's as good as done a lot of time.
Many A-3s wonder how a company that has no knowledge of how to manage these facilities will be more efficient, cost-effective and increase quality. The only way this could even dream of becoming a reality is if the key personnel employed there accept offers from Trammell Crow. We don't understand how not inviting their input into solving the problems of the practices of facilities management is a way to encourage these employees to accept these offers. Or is it that they feel they don't have a choice?
The A-3 staff of this university is very afraid, anxious, and in serious doubt that the intentions are aimed to include their welfare. Many are talking of unionization because they feel they're being ignored, that their opinions don't matter.
On October 11 of 1995, EVP Fry said at University Council, "You will never come in here and pick up the D.P. and find out that hundreds or thousands of jobs have been eliminated. There'll never be a broad, across-the-board cut of X number of employees." However, the October 9, 1997, headline about handing over Facilities Management is in fact laying off almost 200 employees. That would have to be. The employees feel now that we need to establish, reestablish trust between the staff and the administration. And we need to have effective communication between all constituencies. We need to know when we're being reviewed and given a chance to make solutions that work. We also very, very badly need to remedy the morale of employees here at the University, because they're feeling that they're overlooked, unheard, overburdened, and just plain ignored; and we feel that not just the 175 employees are being affected, we are all being affected by this, over time, and we feel that this can be accomplished by voting in favor of the proposed resolution.
Statement of UA
Noah Bilenker: This year's UA is concentrating on fostering discussion within the undergraduate community. We feel that collaboration and discussion are the best ways for us to effectively represent our undergraduate constituency. Such practices hold true for the entire University community as well. That is why the meeting today of University Council is a big step for Council. It is a step to restore it to its once influential status as an advisory body, rather than the current technicality that hears announcements and suffers from low attendance.
In the future I hope that it can be a vehicle for consultation, preventing matters of central concern to students, such as residential living, from passing through the University without our input. It is vitally important for us to have sustained and meaningful input on major structural changes with regards to a sector of the University that encompasses our entire residential and classroom experiences here. Such disregard for our input in the past and recent past raises questions about the future. Residential Facilities has traditionally been separate from the rest of Facilities Management in order to ensure that services are responsive to the students who are paying for them. How are we to assure such input when the departments were merged without our knowledge? How are we to assure any input when the administration blocked attempts to appoint a search committee for leadership of the merged departments? Will a delay of the outsourcing deal, until groups can be consulted, hurt this school any more than the atmosphere of skepticism and low morale that secret practices have already created? It is for this reason that the UA recommends that the trustees look into the consultative process and work with us to develop strong lines of communication between students and trustees. That's why the proposal today is so important.
[Dr. Preston calls upon the organizations noted in the GAPSA resolution; AAA responds.]
Statement of the AAA
James Gray: I represent the African American Association of Faculty, Staff and Administrators here at the University, and I'm going to read to you a letter that we are submitting to Almanac, and also to The Daily Pennsylvanian with a few extra comments.
We, the Executive Board of the African American Association (Triple A), the organization representing African American administrators, faculty and staff at the University of Pennsylvania, wish to register our deepest concerns over the University's recent decision to outsource Facilities Management, Residential Operations, and University City Associates to the Dallas-based property management firm of Trammell Crow. As has been our past experience, we see this as yet another indication of the University Administration's willingness to cut costs on the backs of loyal employees.
While Mr. Fry claims that a significant majority of the Penn employees would be retained by Trammell Crow, experience has proven otherwise. When Barnes and Noble took over the management of the Bookstore, a significant number of African American employees lost their jobs or were forced to accept retirement packages even though they were reluctant to do so. We know that a large number of employees in Facilities Management are African Americans, and we are deeply concerned about their future, despite Mr. Fry's pronouncements.
The University has demonstrated once again a refusal to involve the members of the African American Association in negotiating with potential business partners to arrive at a fair and equal agreement for all. It would have been in the University's interest to do so, in good faith and in the interests of its employees. After all, is that not the mission of this University? The question is, when will this gross, cancerous greed stop? When will this institution value its long career employees and the young people who are students here? Aren't their human needs more important?
Statement of the Chair of Council Facilities Committee
Dr. Anthony Tomazinis: The University Council established the Facilities Committee as an instrument of the Council with an advisory function for the Council on matters of facilities development and maintenance on the campus. The Committee includes faculty members, students, administrators, and an A-3. .
I don't have very much to say because we were never asked to express an opinion, never asked to advise one way or another, or to discuss the matter. Last year we discussed the matter of safety, the matter of transportation and recycling, and we had also the physical plant director to discuss things with us. We produced a report, published in Almanac (October 14, 1997). There is no evidence that there was any functional role for the Facilities Committee; therefore I can say that although we see three situations, only the third situation obtains: It's advice or consultation before a decision is made; or advice or consultation after the decision was made, or no advice and consultation whatsoever. Only the third took place.
In this particular case we were surprised because the letter of intent for us was a matter of decision from the administration to proceed. The matter of the corporate decision, which is the trustees', has not taken place yet, and the appeal of the campus will I guess produce some consultation on this case, although the trustees for one reason or another did not ask for additional consultation, and they have this afternoon that meeting that probably will be discussing and decide about it. Whether they will show an interest in hearing from someone is something to be found, before or after they decide and they vote. However, the truth is that as far as an instrument of the University Council, the Facilities Committee which I guess was established to be part of the discussion, has played no role and there is no indication that anyone wanted it to exist or to play any role.
GAPSA Motion to Divide
Alex Welte: [noting that he moves to divide the question for clarity, and that "the whereases remain the same," Mr. Welte reads the amended motion]:
The University Council calls upon the trustees to act in a manner consistent with the stated needs of the campus community, by taking active steps to rehabilitate the culture of consultation at the University. The Council recommends appointing a committee composed of trustees, faculty, students, administrators, and support staff, which is charged to examine the problems that have been raised about the consultative process, and authorized to make binding recommendations to facilitate improvements.
* * *
The University Council calls upon the trustees to act in a manner consistent with the stated needs of the campus community, by withholding approval of the proposed outsourcing of facilities management at this time.
[Dr. Preston explains that a division of the question is an incidental motion, and not debatable. On a show of hands the Moderator declares that the 'ayes' have it.
[Dr. Preston also rules that the parts will be discussed together, but separated for voting.]
Mr.Welte: The President and the EVP have told us several times about the process that has been behind this and that when the letter of intent was announced on October the 8th, that a lot of discussion has in fact occurred, and they would like us to consider this as being in fact the natural process of consultation that is to take place around this.
I think a fundamental point that needs to be understood is that one very large decision is already effectively made-and that it is one thing to discuss some details of how one might out-source or under what circumstances people will be employed by TC if they are, and so on, but there is a very fundamental decision that has been made to proceed with outsourcing, which took everyone by surprise because it had not only not been hinted that this was coming but we had been told that these kinds of things actually wouldn't happen. It's really more the question of how does a major decision get made just out of the blue; I think it's a quite different matter to talk about the response that is provoked around the details and to talk about the process that led to the big, well-defined decision that was, essentially, handed down.
Dr. Tomazinis: I was very delighted hearing the President at the beginning of this meeting, and it seems to me the first resolution is very much in the spirit of what the President said. The President does want consultation, and it is important to remove that very explosive issue from the midst of the campus. It is therefore very wise to have the President work with the trustees, and with some consultation from the Council, and establish a mechanism of consultation which will have some transparency, and can stop the conversation about whether or not there is any consultation, as the first step.
Therefore I find this division and this wording very comforting. I hope the students agree that a mechanism that is transparent and that advises before the fact is important, with the byproduct of information flowing.
For example, on this campus for three years now we don't have any budget information on where the money goes-even misinterpretation or different interpretations exist as to what is meant by administrative costs. We have different impressions from what the President indicated earlier: running the campus, cleaning the campus, is not an administrative cost, it's a basic function that the University needs to carry out. So we need to know how much it costs, whether it went up or down, how many people, and so on. In many areas of the University information does not flow any more and is communicated only on a need-to-know basis, which is inappropriate for a consultative community.
As for the second part, on the basis of experience in many organizations, the choice is not a binary choice; outsourcing is a legitimate choice and in this case may prove to be the best. But there are different forms of outsourcing, as well as different measures that internally can be taken. Obviously the administration has taken absolutely no measures; they kept talking but even the Facilities Committee has never been informed there was any complaint.
Four years ago the Committee on Administration reported on the cost of the Administration-the President's Office, the Provost's Office, all of the paraphernalia of the Admissions and Development-that was the topic of that committee three years ago. Things changed. At that time, I remember, we had in the School of Fine Arts, the thing which now the new organization of Trammell Crow proposes, cleaners by building-but we were finding them in the closet sleeping, and we had to call and bring the police and do something because the bathrooms were smelling and something had to be done and the people could not be found. Obviously solutions of that type are not going to work. A much more sincere and extensive analysis of the problem needs to be made. This second resolution has the promise of such an analysis, and I am for this purpose in favor of it.
David Bowie: [He identifies himself as a member both of GAPSA and of GSAC, the Graduate Student Associations Council, which represents graduate students of SAS plus others pursuing the Ph.D. in the University]
Discussions within GSAC executive board show a great bit of concern that there seems to be some sort of culture of, for lack of a better word, secrecy, within the administration-on issues ranging from vending to health insurance, to the delay in finding out how the general fee is broken down, to this current issue of downsizing and outsourcing. It's been very difficult to have any feeling that there's allowed to be any sort of input from those affected by administrative decisions.
Even if this is not the case, this is the way it appears. And something needs to be done to correct this feeling. Therefore I feel that both of these resolutions should be passed by Council because they will in any event help to counter this feeling that the administration makes decisions unilaterally without caring what any of the constituents have to say about anything.
Dr. Peter Freyd: There is an issue I have trouble with; I'd like to discuss the resolutions from at least two points of view. First, as a faculty member, I have always felt that I should not in any official way even recognize the existence of the trustees. I am very worried about the faculty talking directly to the trustees. I can think of an exception-maybe how to invest, and whether to invest endowment funds in something like bad regimes-but otherwise when it comes to the running of the University, it strikes me as a very dangerous thing. The trustees should do what the administration tells them to do and not anything else. Now, I certainly didn't feel that when I was a student, and indeed I broke the rule I just set. But I would like to point out that the very process that would lead to more consultation between the Administration and the campus community is defeated by going over the Administration's head directly to the trustees. And I think there's a self-defeating aspect of these resolutions as they now stand. This may just be a technical thing...may just mean a rewording so you're not talking directly to the trustees. It's not clear to me at all that you want to. I can't vote for them in the present form.
Dr. Larry Gross: Peter's already begun the comments that I was going to make...
[A turnover of the tape interrupts Dr. Gross's remarks, which agree with Dr. Freyd's concerning the inclusion of the trustees on the proposed committee. Dr. Gross continues.]
I am concerned that the University as a community of scholars, as a community different from other large institutions and large employers, maintain a distinct identity, and therefore my instinct is to work within the community. It's not as if the trustees won't know what we're talking about. This is not as if they won't hear about it-some of them may be present?-or won't learn about it. But when I read a motion that says "recommends appointing," doesn't specify who would appoint, the implication is that the trustees would appoint such a committee-and that worries me enormously. The notion that the Council will ask the trustees to appoint-a precedent strenuously to resist-a committee to "make binding recommendations"? Binding on whom? Enforced by whom? I can imagine circumstances where it would be necessary for Council to resist the intrusion of trustees on issues that are equally important to the life of the University.
So I would like to urge that we find a way to express deep concern that I certainly share, that the consultative process at the University has not been adequately in practice; and contrary to some of the things that have been said, I think that announcing something as a clock ticking for thirty days puts a certain slant on discussions- telling people they can apply for their jobs puts a certain slant on discussions-that I wouldn't quite call consultation. Input, maybe; negotiation, maybe; but not consultation. And I think we do need to try and focus on that.
[Mr. Welte accepts as friendly the comments of Dr. Freyd and Dr. Gross and offers to change "trustees" to "administration" in the first instance, and to remove it in the second. He also accepts Dr. Seltzer's suggestion to strike "auth-orized"and "binding." These amendments pass.
[Additionally, Dr. Larry Gross recommends adding a reporting date of April 1, to allow for Council discussion before the end of the academic year. The chair asks to withhold the motion and reopens discussion.]
Dean Gary Hack: What are we debating? Can we debate substance? I have to say I feel the discussion has been hijacked into a general discussion of the issue of consultative process on the campus. I actually thought the subject was the question of facilities management and whether it made sense or not for us to proceed with an arrangement whereby we made changes to how we do facilities management.
It seems to me that the second half of this motion is I think unnecessary. I would like to argue that in fact the direction that's being proposed is not only the right direction but in fact that the process is probably the only way that one can imagine going about these kinds of debates and discussions.
Let me take the second before the first. It seems to me we would have very little to discuss if we didn't have a concrete proposal on the table. And when we ask our leaders to lead we ask them to bring forward to us proposals about changes that are to be made, and it seems to me that we have such a proposal, and I haven't heard over the last month very much debate over the question of whether change is either necessary, or whether this is the right direction of change. I haven't heard anybody over the last month for example come up to me and say "Gee, we have terrific maintenance on the campus and it costs so little." Or come up to me and say, "The buildings we're building are a real bargain."
I've heard just the opposite of it; that is, a large number of people come forward and say, "We really must do something about maintenance, we must do something about the cost of it." In the Graduate School of Fine Arts, we have about 30 cents of every dollar to spend on education. Seventy percent of it goes to administration, space, and all of the other kinds of needs of running a university of this kind. And it does strike me that every dollar we can save, either on the maintenance of things or on the building of new structures, which is unnecessary, is another dollar that we get to spend in one way or another on education. So I would like to see more discussion on the question of whether we should be proceeding with this kind of arrangement or not. In my opinion it really is in fact the right way to be going. And I can say more reasons for that, but I wrote many of those in the DP today and I suggest you take a look at them.
Dr. Helen Davies: I would like to concern myself with what Dean Hack brought up, the idea of facilities management outsourcing, and what changes need to be made. I will agree that various committees have talked about what changes need to be made, but at no point did we ever say in this discussion, "... and let's out-source."
I'd like to talk first to the morale of the staff that are outsourced. Even if they will stay at Penn, what they are going to lose is being part of Penn. They are no longer part of a community. And what will this do to those not part of the outsourcing? One is a general fear, "When will I be next?" The other is survivor guilt, "How come I stayed when the rest of them were out?" I would like to bring out what happened when the trustees themselves had a committee, the Commission on Strengthening the Community, chaired by Gloria Chisum. We had a sense that there was part of the trustees that said, "This is one community and a very important part." Now comes the problem of our changing managements. Look back at the number of EVPs we've had at the University, and when one made a change and that EVP was out, we had another EVP and another kind of thing. What do we do as we go up the chain, when the next EVP says "Outsourcing wasn't the way, let's start back to having Penn part of it own community."
So I do think before we should have gone to outsourcing, if there had been widespread consultation, we would have said, "There are changes that need making within the structure that we now have," and that's what I would like to see us go back to. Certainly as a member of the Senate I was very unhappy to know that the Senate leadership had not been consulted on any of this.
[An unidentified speaker indicates the second part of the motion is also a matter of process "... to slow it down so people become informed through proper channels."]
Statements by Non-Members
Paul Lukasiak: [After identifying himself as part-time administrative assistant to GAPSA, commending Mr. Welte, Ms. Arthur and others, and passing out several documents.]
Dr. Rodin, do you know if Trammell Crow has a policy of nondiscrimination and provides equal opportunity to its lesbian and gay employees, for the 3000 people who work for Trammell Crow? [Dr. Rodin tells the moderator she will take questions at the proper time.]
Let me put it this way: They don't. And Trammell Crow has tried to hide this fact from people, including two other members of the University community. In one of the documents you are looking at right now, you can read what TC is telling Penn's employees. In the second is Trammell Crow's EEO/AA policy, faxed to the Philadelphia Gay News; it does not mention sexual orientation as a protected class. I called on Tuesday to confirm this, and spoke to the assistant of the Vice President of HR [at Trammell Crow], and she confirmed this as accurate.
Why has this University had for 14 months a contract with a company that does not provide equal rights for lesbians and gays, and hasn't bothered to tell its lesbian and gay community that this is what is happening?
[Mr. Lukasiak begins to introduce Rich Cipollone, whose remarks are further below, but is interrupted by the Moderator, who notes that Mr. Fry wishes to answer.]
Response from the EVP
John Fry: Paul's raised an important issue and we have done some further checking. It is the policy of the Trammell Crow Company that their policy and practice is to comply with all federal, state and local laws where they operate. Therefore they would operate within the laws and statutes of the Commonwealth of Pennsylvania and the City of Philadelphia, which I believe provides the kind of protections that you're talking about. If they don't, this is simply something we will insist upon before signing that contract.
[To questions of Dr. Peter Freyd, Mr. Fry responds that New Bolton Center, which is outside the protection of the Philadelphia law, is not to be managed by Trammell Crow because of its specialized needs.
[The moderator calls on Mr. Cipollone.]
Statement of a Member of Facilities Management
Rich Cipollone: I'd like to thank University Council for providing the first, and only, public forum in which the people whose jobs are at stake actually have an opportunity, however brief, to present their side of the story themselves.
I am handing around this table the Facilities Management of the original Coopers and Lybrand report, written by John Fry [Almanac Supplement January 15, 1995]. Some day you should read it, because it contains a lot of good ideas. The problem is, the implementation of most of these ideas was never discussed with the employees.
When John Fry first came to this University, he told us-he told you-that he was hired to restructure the way the University delivers services. He told us-he told you-that some jobs would be lost as a result, because the goal of restructuring was to improve services while increasing efficiency and cutting waste.
As employees we accepted that, because we knew better than anyone how inefficient much of Penn's administrative bureaucracy had become, and we knew that there were quite a few jobs that supported administrative bloat. In the Facilities Management Department, for the last two and a half years we have been waiting for restructuring efforts to begin. We were told-and you were told-that we would be participants in the process, that our knowledge, experience, and expertise were valued and necessary in order to create more responsive and efficient systems.
That never happened. Instead, the only "efficiencies" that were achieved were done through a hiring freeze. Facilities lost a fairly large number of employees over the past few years. But our jobs were not redesigned to make them more efficient. Instead, the work being done by the people who left the department was thrown on the rest of the staff.
We tolerated this, first because we are dedicated to this University, and secondly because we knew that when restructuring finally did hap-pen, that there would be fewer jobs to go around.
Most of the people who are affected by the Trammell Crow deal have been here for years and years. We've been doing our jobs. But John Fry has not been doing his. Instead of finding ways to make Penn more efficient, John Fry has been making deals. This is not the job that he told us, and that he told you, that he was hired to do. And the loyal, hardworking employees of this university should not be sold off to a Texas company because John Fry did not do his job.
That is a moral issue, but there is a practical side to this for you as well, and it is this:
Our departments are already overworked, with too few people doing way too much. Some of that work is wasteful-I can't tell you how much time we spend compiling reports for people in John Fry's office to look at. But a lot of the work we do is necessary if you are to receive the kinds of services that students are paying for, and that faculty need to do their job. And quite frankly, I don't think that Trammell Crow can do the job that needs to be done by making further cuts of 20-40% in its workforce. And if they can do it, then why can't John Fry figure out how, and tell us?
The Trammell Crow deal is designed to do two things. First it's designed to bring in $32 million by selling the expertise of loyal Penn employees to a company that has no experience whatsoever in the management of academic facilities-in fact, they aren't even experts in the management of residential facilities. All that Trammell Crow claims leadership in is commercial real estate management. This is not a normal business deal. This is white-collar flesh peddling.
The other thing this deal is designed to do is reduce accountability, and make the faculty and students of this university accept a lower level of services by bringing in an outside company to perform those services. Right now you are the client, and our job is to meet your needs. If Trammell Crow takes over, John Fry will be the client, and you will just be the tenant. Real estate management companies exist, and make money, by satisfying the landlord and not the tenant. In an open market, tenant satisfaction is necessary. But Penn is not an open market, it is a restricted market, and the client doesn't have to worry about tenant satisfaction.
One final thought. No doubt each and every one of you has received assurances that your needs will be met. Well, the employees of Facilities Management are here to tell you that the promises made by John Fry are worthless. Remember, what John Fry is asking you to do is believe that a company with a ten-year contract will not betray its commitment in order to make a fast buck to meet the demands of stockholders for high quarterly profits. If John Fry is willing to break the promises that he made to you for a fast buck, do you really think the company that he wants to hire will be any different?
[Dr. Preston opens discussion to anyone who wishes to speak.]
Statements from Observers
Dr. Patrick Harker: I'm a faculty member who was a member of the Cost Containment Committee. I am not here to talk about the qual-ity or the benefits and costs of the Trammell Crow agreement but really to put on the table the consultative nature of the process. The Cost Containment Committee was formed in 1993. It consisted of faculty and administrators at the University. Our purpose-the official name was the Cost Containment Oversight Committee-was to raise issues to the administration. The Committee met, at least twice that I was in the room, with the Faculty Senate [on issues raised in the Cost Containment Committee].
What I want to say is there was some consultation through that Committee, as to issues-not solutions. And one issue that was raised continually was the quality of facilities management. We were not in a position, nor did we think it was our charge to make suggestions of solutions. That was the role of the administration.
But I did just want to bring to the table the fact that this had been going on since 1993. This is not something that was made up in the last month or two years. It's a long effort of people looking at this and raising this question both in terms of administrators-I've been a chairman both in the Wharton School and in the School of Engineering-there are other people who are faculty members, chairs of departments, deans-this was a question that was continually raised in these meetings. Again, I don't want to comment personally, because I don't know the details of the Trammell Crow agreement, but I do think it's worthy of your consideration to think about the fact that there was consultation about the problem. And I think we have to separate out the consultation on the solution versus the consultation on the problem.
Dr. Tomazinis: I think we are coming back to what Noah pointed out from the UA, the matter of producing solutions has not been tackled well. With all due respect to Dean Hack's comments, and to John Fry's efforts, the solution is not that easy to come by. And the investigation, the comparative analysis, could have been in Almanac-those are not secrets. Technical work here is technical work. All the technical things are not in Almanac, not in publication.
You want to close your eyes and jump into it, you're welcome. You want to keep open your eyes and see where you are jumping, that would be the advisable thing at this moment. But as of now, things are not really investigated sufficiently, with alternative solutions and comparative analysis to see the cost and the benefits of the solution and conclude what's best for the University even if it involves hurt or harm to certain individuals. But we produce harm without certain benefits. I submit that the discussion really finally indicates the extent to which the analysis has not taken place.
Rev. Beverly Dale: [The Director of Christian Association explains that she was invited by GAPSA as an observer of the Penn culture. She recalls the study on Strengthening the Community, and continues.]
What does community require of you? It requires that you do justice, that you show kindness, and you walk humbly.
Trust has been broken significantly. What is going to be fair?
You have an administration that is under the gun. They are supposed to make this an efficient, cost-effective organization within a reasonable timeframe. You have to understand that that's part of why they're here. On the other hand, we have to be fair to the people who right now are feeling as if they've been kicked in the stomach, who have been loyal employees for decades, and who now are questioning whether or not they are going to have a job in a couple of months. What is fair and how do we do justice?
How are we to show kindness in the midst of all this, in this unfortunate reality? It's not just the action of whether or not a negotiation paper should have been signed. Who is talking to who?
Trust is the key. We don't have trust. Openness is the key, and there are severe problems with openness. So finally how are we going to bring about justice and with some kindness? We are going to have to approach this with some humility. That means on both sides. I would suggest to you it's going to take some time to really get at some core issues that underlie this current debate. We have a culture of suspicion and we've got to create a culture of trust. So does the resolution encourage some time for some healing to occur? Can you put in motion actions that will prevent further problems such as this? If we can, I would suggest that that is a compassionate way to respond to this, and it is a fair way to respond to this, and hopefully we can do this with a little bit of humility on everybody's side.
Dr. Marshall Blume: I've been on the Cost Containment Committee, I think for generations. The first one was appointed by Sheldon Hackney and when Judy Rodin became president she appointed another Cost Containment Committee. There were four faculty members who were appointed in consultation with the Faculty Senate. We met with John Fry almost every month for quite a while. Every major organization that reports to John made presentations to us. We listened to these. In Almanac we published a report which we also gave to the Council. One of the areas which we identified as having very bad possibility of success in the future was the Facilities Management area. We thought that some major restructuring should be done in that area.
That was reported, it was in Almanac [September 3, 1996], it was clearly visible to everybody. In that Committee we listened to the presentations. In my view if the deans and the faculty had said "no," nothing would have been done. We talked generally about outsourcing and we thought it was a good idea but each case of outsourcing had to be examined on its own merits. We were involved in that committee in overviewing the outsourcing of the Bookstore, and we thought that was a good thing to go ahead with.
So there has been a large amount of consultation. I think there's a debate about whether the implementation of our consultation, which was that there was a real problem in there, should have been revealed, maybe a week or two before it was announced publicly, to the Faculty Senate; I personally think it should. Having said that, I think that we have such a severe problem in this area that we should be going forward and relying on the administration for doing the right thing at this point.
Dr. Seltzer: I would like to respond to the members of the Cost Containment Committee by merely letting you know that certainly since the beginning of this academic year, we haven't heard from you, and I'm wondering if you are members of a current Cost Containment Committee; and if not, if you could please help us out by identifying the period of time where you were serving?
Dr. Blume: The Cost Containment Committee as I understand it was not reappointed for this current year.
Dr. Preston: When was it in fact operative?
Dr. Blume: It was operative from 1993 through our final report in the fall of 1996.
Dr. James Galbally: I'm Associate Dean of the Dental School and I'd like to talk a little bit about the contract.
At the School of Dental Medicine like the other schools and units at Penn we're concerned about the cost of goods and services. We understand as President Rodin has said that traditional sources of revenue from tuition, patient fees and research will not continue to keep pace with the projected increases in our costs and we are regularly looking at ways to find new sources of revenue and to control costs in order to reallocate funds to our core academic programs.
The proposed agreement with Trammell Crow provides a way to control growth of one of our major expenditures-the cost of operating and maintaining facilities and constructing new facilities. We appreciate the efforts of John Fry and his colleagues in crafting this pioneering agreement that not only promises to reduce our costs, but also enhance services, and most importantly assure the humane treatment of University employees. Thank you.
Barry Stupine: I'm Associate Dean for Administration of the Veterinary School, and a customer of Facilities Management. In my opinion the Facilities Management process here at Penn is broken. It's very much broken.
There are a lot of good people there. It's not a criticism of them. But there are delays-delays of sometimes over a year in getting feasibility studies and engineering studies done. Sometimes the quality of work is less than adequate. Faulty estimates range between 50 and 100 percent. It's not only very frustrating and demoralizing but alienates some donors when we ask for funds and then the estimates turn out to be wrong. And the costs, they just seem to be far too high. Those problems tend to demoralize the faculty and staff. They waste their time, and University resources.
We've had grants rejected from the federal government where the most severe criticism had to do with the cost of construction; it said in a particular case it was more than twice the national average. We recently put in a door-it was $3500. This sends a message to the faculty; it demoralizes them; it sends a message that the University is not well managed-it's not true, but that's the message that sometimes goes out to the faculty. That's their contact-when you put in a door and it costs that kind of money.
The truth is the University is very good; it excels at many things. Facilities Management is not one of them. If that's the case, why not turn over that function to a firm that does specialize and hopefully excels. And that way we can use our resources for what we are here for...
[The tape made for Council ended here, and we have not yet been able to determine whether additional material from a usable tape exists.
[From notes, we can indicate that debate continued with an extended statement by Matthew Ruben of GAPSA, which received a round of applause from Council and observers. Almanac will publish his statement if it can be reconstructed with Mr. Rubin's assistance.]
[The following approximate exchange took place between Dr. Gross and Mr. Fry, reconstructed from notes.]
Dr. Gross: I want to get back to the non-discrimination policy and the idea that when you step across City Line Avenue you have no protection. And to the larger question: What happens when two communities overlap? What will be the influence of Trammell Crow on our community of tenants, clients and landlords?
The University could have a beneficial effect on Trammell Crow-we could say that if they want to play ball with us they have to discharge these responsibilities. I'm not impressed with "We observe all federal, state and local laws." I hope so! Or it could be like the times when an American company doing business in Saudi Arabia would be asked not to allow any any Jewish employees to be hired on their job.
What about the employee who moves to Trammell Crow but later is no longer on the Penn account and loses the domestic partner benefit? Or who not only loses the sexual preference protection we have but is moved to Texas where there is still a sodomy law on the books? It seems to me that we could not only ask for cash up front but ask them to make these accommodations, to influence their organizational culture and bring it closer to the University's.
Mr. Fry: First, it's in the agreement that transfers will be only with the consent of the employee. Second, on domestic partners, they are willing to learn from us and will respond appropriately. And third, on Paul's documents, this will be clarified or we won't go forward.
[Final speakers included Ms. Arthur of the A-3 Assembly, who noted Residential Facilities was left leaderless for 18 months; and GAPSA's Mr. Welte and Ms. Tredinnick, who urged that the agreement was not ready for a trustees vote.]
[Dr. Gross's motion to amend the first part of the resolution, giving a reporting date of April 1, 1998, for the work of the proposed committee, passed. The resolution's first part then read as follows.]
The University Council calls upon the Administration to act in a manner consistent with the stated needs of the campus community, by taking active steps to rehabilitate the culture of consultation at the University. The Council recommends appointing a committee composed of faculty, students, administrators, and support staff, which is charged to examine the problems that have been raised about the consultative process, and to make recommendations by April 1, 1998, to facilitate improvements.
[The motion passed on a show of hands with no dissenting votes. The second part, which passed with a show of hands and a scatteing of dissenting votes, read as before.]
The University Council calls upon the trustees to act in a manner consistent with the stated needs of the campus community, by withholding approval of the proposed out-sourcing of facilities management at this time.