The Portland State Administrator overseeing PSU Eats’ exclusive contract with the university has acknowledged his role in a miscommunicated increase in catering prices for students, and elaborated on issues surrounding catering exclusivity and liability.
The 300 percent increase incident
A recent 300 percent price increase to the PSU Eats student snack menu was actually a price correction, said Michael Walsh, director of housing and residence life and contract administrator for Chartwells, the parent company of PSU Eats.
Although PSU Eats rolled the price increases back on Jan. 31, the prices on the snack menu still need to be corrected, and Walsh is currently working with Chartwells to introduce the changes slowly over a longer period of time.
“In this particular situation they had loaded the numbers in incorrectly,” Walsh said. “Which was [Chartwells’] fault, and then they wanted to correct it. That’s not an increase. I could have said no, but I actually said yes.”
Chartwells had accidently submitted wholesale prices for their 14-item snack menu, asking Walsh afterward if they could correct it to reflect the actual retail price. Walsh agreed, assuming the price correction would be small.
Walsh said if he had known how large the increase would be, he would have said no.
“If I had been more diligent, I would have asked for a side-by-side,” Walsh said. “I just kind of assumed it was a small correction…so I learned my lesson there.”
There was no announcement of the price changes, and student leaders expressed alarm when they noticed costs for some events had doubled from the previous year.
“We thought it was a mistake because it was so much more expensive,” said PSU Programming Board Co-director Lindsey Pham. “But they said it’s not.”
“For a year and a half, student groups have been getting the most incredible deal ever, which is great,” Walsh said. “But then [Chartwells] put their prices back up to the normal retail prices which is, you know, shocking because there is such a huge change.”
“I’m working [the correction] out so that it will [increase] slowly over the next 18 months,” Walsh said. “I’ve already told [Chartwells] about the whole budget issue—budgets are done 12–18 months in advance—so we’re trying to work it out so that they’re able to plan for [it] a little bit better.”
Chartwells also has another 3 percent price increase approved for next year based on inflation and increased food service costs, which Walsh said is a little below typical year-to-year increases.
Associated Students of Portland State University recently released a survey in response to the price increase and rollback to gather student experiences with Chartwells.
The Exclusive Contract
PSU currently has a 10-year contract with PSU Eats, which guarantees them exclusive catering rights for any event taking place in Ondine Residence Hall, University Place Hotel, Smith Memorial Student Union and Viking Pavilion, as well as exclusive rights to alcohol service in Lincoln Hall.
“To do a contract, there’s pretty much no other way you’re going to get a company to come and [provide services],” Walsh said. “You have to grant exclusivity. A lot of schools are exclusive on their entire campus, so we were able to limit it to just a certain number of areas.”
The contract includes a requirement that all freshman students living in residence halls purchase a meal plan, a pledge from Chartwells to contribute $2 million toward a new dining hall if a new student residence building were ever constructed and a 12.5 percent commission for all catering services to PSU.
Walsh said the commission money—which is estimated at $12.5 million a year—goes toward maintenance and repair costs for all catering and food service operations.
“So the commission goes to pay for things like that,” Walsh said. “Everything from the forks that people eat off of to the dishwashers to the ovens, everything that we provide, we have to pay for that stuff.”
PSU does not receive any commission for the PSU Eats meal plans.
Students or any other party hoping to host their event with outside catering are permitted to do so with a waiver. However, the waiver also removes any liability for PSU and Chartwells if something goes wrong.
“What they take on is all the liability for not using our food service provider,” Walsh said. “So they’re accepting liability for any food-borne illnesses, any damages caused by people providing the food, anything like that. It completely waives Chartwells and PSU for liability, so it’s actually a big responsibility.”
This means the student groups themselves are open to being sued, among other things, by injured parties who attend non-Chartwells catered events.
“We ask to see proof of insurance by the provider and we have to see their health permits so they’re permitted by the county to operate,” Walsh said. “And then we also have to make sure we see their food handlers cards. So we’re very careful about that, but it’s ultimately up to the student group to make sure all of those things are in place.”
According to Walsh, there have not been any cases of foodborne illness or damage relating to an outside catering service.