Talk of termination of the 40-year contract with College Housing Northwest circulated for months before it was finalized on Feb. 28, when Auxiliary Services notified the private nonprofit organization that their contract would end in March 2007.
Because of the company’s privacy, Auxiliary Services was not able to openly discuss the contract termination before Feb. 28, according to John Eckman, associate director of Auxiliary Services.
Eckman announced the contract’s end during a March 8 meeting discussing cuts to housing operations among other drastic changes, particularly the $300,000 cut to the Residence Life budget. He said the decision was due to the general lack of funds the school is encountering.
“We’re continuing to look for savings everywhere,” he said. “We’re cut down to the bone already.”
Eckman said Auxiliary Services pays CHNW for a housing management team, which will be replaced by one operated though PSU. Savings will not incur until the 2008 fiscal year, according to Eckman, who said this coming year’s budget will likely break even.
“Big savings won’t be this coming year, but the following,” Eckman said. “As you bring in new employees and get them trained, there are some startup costs.”
Eckman said while CHNW remains the housing manager, many positions are duplicated because the university has a management team. He said cutting CHNW would remove that duplication, along with the management fee being eliminated, and save money, which will be more than $750,000 a year.
Housing Northwest CEO Darcy Vincent said that while she is disappointed with the news, CHNW understands and will continue working with PSU even after the contract expires in March.
“Our history is steeped in it [PSU],” she said. “We will continue to work with them. They have developed a budget where they think they will be able to do it themselves. It is untested, but they think they will be able to do it.”
Though Vincent does not know what will happen to the relationship with PSU, she said owning the college-type housing buildings near campus will help keep them tied to one another.
Vincent, who took over for longtime CEO Gary Meddaugh in January after his retirement, said she does not believe the cuts to Auxiliary Services and the termination of the contract will have any impact on the buildings they own. After the contract termination, College Housing Northwest will remain in control of seven out of 18 buildings they currently have a role in managing.
Though the buildings will no longer be directly connected to the university, they will be used primarily as student housing, as well as affordable housing, Vincent said.
“Unfortunately it is just impacting all areas of the university and Auxiliary Services is one of them,” she said. “We are fortunate that the housing we provide isn’t tied to such financial restrictions.”
Vincent said even with these changes, there should not be any kind of employee turnover, but does not know for sure.
“One of our other big concerns is that through this transition, a lot of their employees have worked with PSU for over 40 years,” Eckman said. “We’re going to work with them to help them find ways to stay on as PSU staff.”
Eckman said along with hiring and training new employees, savings will be delayed as Auxiliary Services looks to purchase additional housing software. He said the new software could cost anywhere from $150,000 to $250,000, but it is important to replace the current software, which “fits more of an apartment system” than the university housing system Auxiliary Services is looking to engage.
Eckman said the new system makes work easier for employees, is a program more like a traditional university program, and is more manageable for students.
College Housing Northwest was established in 1969 by students in a PSU urban studies class who wanted to bring student housing to the university, which was at that time considered a commuter college.
The nonprofit organization originally had a contract until July 2008, but both CHNW and PSU had the option to terminate the contract early with 12 months notice.
“It is losing a little bit of a piece of our history,” Vincent said. “For so long we have been connected to university in the facets of our housing. We will continue to be friendly and collaborative, because for so long we have been responsible for every bed a student has slept on at PSU.”