Amid widespread budget shortfalls, why did New College give Metz $180,000 in December?

The recent initiatives unveiled to improve hours and food variety reveal only part of a broader story about meal plans, contracts and commissions.

To contend with declining enrollment and the COVID-19 pandemic, Metz Culinary Management leveraged a deal with New College last year to guarantee the company a minimum 6% profit. Despite service and staffing cuts at the beginning of the fall semester, Metz ran at a loss: to hold up their end of the contract, the college paid out nearly $180,000 to Metz in December. Now, students and administrators are demanding more from Metz, which is why a series of new initiatives — from an all-you-can-eat pasta to a produce station — are being unveiled. 

In the original contract between Metz and New College signed in May 2014, Metz is obligated to pay a 17% commission to the college on all meal plan sales. The contract also includes a provision that if meal plan sales drop below $1.3 million, the college and Metz will enter good faith negotiations to rectify the balance, but the college bears the burden of financial responsibility. 

“Metz knows they’re going to get a gross amount of $1.3 [million] and then less whatever they have for cost,” Vice President of Finance and Administration Chris Kinsley said. “So whether the students use their meal plan, or don’t use the meal plan, it’s basically the same from a Metz perspective.” 

Metz Culinary Management is a private food service corporation that contracts with schools, corporations and hospitals around the country. According to Bill Moore, the general manager of Metz’s New College operations, the company’s CEO lives in Sarasota. 

Kinsley said that the profit guarantee was written into the contract because New College is such a small school: without a measure of control and stability, Kinsley argued that it would be difficult to find a credible vendor. 

“With being a smaller school, we can’t do a lot of things that other big schools do, but we want to try to do as much as we can,” Moore explained. “It has to be a partnership between the college and between Metz, and that partnership’s got to be, ‘Okay, this is what you want, this is what you want to spend,’ because it all comes down to finances.”

Meal plans — obligatory for most students, with few exceptions — are paid in full at the beginning of the semester. Revenues are directly tied with enrollment numbers: when more students are enrolled, Metz has the chance to turn higher profits and the school stands to collect hundreds of thousands of dollars in commissions.

For the first few years of their time on campus, Metz was able to exceed the minimum sales goal established in the contract and make some profits. The college also benefited from the hefty 17% commission, which Kinsley said was spent on equipment upgrades, subsidizing special meals or even as an auxiliary fund to subsidize the student activities budget.

However, things took a turn for the worse in the fall of 2019, when total undergraduate enrollment dropped from 808 to 702 and Metz’s sales slipped below the $1.3 million minimum established in the original contract. 

“Pursuant to the original contract, basically, the college is liable for any losses or revenue shortfalls that may occur for Metz,” Associate Vice President of Administrative Affairs Christie FitzPatrick explained. “And so in order to make up for those losses, the decision was made for Metz to receive the commission amount that the college typically would receive in order to cover those losses.” 

A memorandum of understanding was enacted between the college and Metz “given certain conditions out of the control of Metz that have negatively affected the profitability of Metz” that eliminated commission payments to the college until Metz could achieve 6% profitability.

General Counsel David Fugett first approved the memorandum of understanding in January 2020 because of the overall decline in enrollment. However, it was signed in June by Vice President of Finance and Administration Chris Kinsely, after the pandemic hit and Metz had incurred more losses. 

“In a normal year, [Metz] would be responsible for essentially cutting a check or deducting that commission amount from the invoice because we get an invoice from them monthly,” FitzPatrick explained. “They would deduct that from the invoice showing a credit towards the college.”

But this has not been a normal year. Per the memorandum of understanding, commissions were withheld throughout the fall. Instead of the college getting monthly credits and payments from Metz, New College paid Metz in December so that the corporation could preserve a 6% profitability margin. The $179,741.94 payment was a combination of $63,340.94 in withheld commissions and checks totalling $116,401. 

However, Kinsley hopes that the college will not have to pay Metz to make up for lost profits this upcoming semester, even if they have to forfeit commissions. 

Food Representative and third-year Dominic Grijalva said that the agreement is “ridiculous” and questioned why the college is bending over backwards for Metz.  

“Why are we foregoing more money and Metz is just able to continue to pass by with the bare minimum for just showing up and serving something on a plate?” Grijalva said. “This is a restaurant’s dream come true. Like, you know exactly how many students have to eat every single day. This is not like a restaurant that goes through a slow period in the summer where you’re like, ‘Oh man, I hope I get three people to come into today just so I can stay open.’ We know how many students have to eat, so I think it’s complacency.”

The COVID-19 pandemic has caused unforeseen problems for New College’s branch of Metz Culinary Management since March 2020. After campus suddenly closed before spring break, Metz had to throw away a lot of the food inventory they had in stock because they stopped operating. 

The drop in enrollment and on-campus students didn’t help, either. Their side hustle as a catering company also ground to a halt and very few faculty and staff, who used to swing by for lunch, bought food from Metz. 

Over the summer, negotiations between the school and corporate Metz contended with what to do about a projected 50% drop in on-campus residency. 

“We were trying to keep the prices the same and still offer reasonable service,” Kinsley said. “You can’t increase prices, so you have to cut costs.” 

In lieu of raising prices for students, the college and Metz decided to cut hours and reduced the amount of staff by half. 

“Last year, we had myself, a chef and 20 staff members,” Moore said. “This year, we have just me and 11 staff members. The reason being is because all that costs money. If there’s a loss on my bottom line, somebody’s got to pay for that, either Metz or the college.” 

However, Kinsley noted that because most students are required to purchase meal plans, it doesn’t matter to Metz’s bottom line if students actually spend them or not. Approximately $93,000 in meal plan dollars were unspent at the end of last semester, which prompted discussions with Metz about how to improve food quality and encourage students to purchase food. 

“In talking to the Metz management, I said, you know, there’s got to be some way — since it’s the same to you — what can you do to encourage students to use these meal plan balances?” Kinsley said. “Essentially, what Metz needed to know was that the college was willing to make up any true loss. So, let’s say, between all the meal plan sales and everything they did, their costs were in excess of this $1.3 million and the 6% profit — that the college would use other college funds to make up the loss.” 

The new initiatives hoping to boost variety and sales are subs and pizzas on weekday afternoons, a farmer’s market station with fresh produce and a weekly all-you-can-eat pasta bar. Additionally, a replica of the Popeye’s chicken sandwich will be available starting next week. 

The author’s dish from Metz’s new all-you-can-eat pasta bar on March 8, 2021. The vegan meatballs offset the inevitable carb crash from the buttery breadstick andslightly overcooked pasta. She opted for a single serving because that was, indeed, all she could eat. 

The C-Store, where students in previous years could get subs and snacks until 10 p.m. during the week, was closed because social distancing measures would have been difficult to enact and to keep operating costs low. 

“It’s just too small,” Moore said. “And I tried every way I could to keep it open, but the lines get too long around the C-Store area that we figured you could only have three students in there at a time.”

But after Moore got lots of feedback from students about missing the subs and needing access to food in the afternoon amid busy schedules, he got the idea to make a subs-and-pizza station inside the main area of the dining hall. 

“What I heard a lot last year is the students wanted subs and pizza back, so that’s why I came up with that station in there, to try to get students some sense of normalcy,” Moore said. 

While the sales have been slow so far, Moore said that they should improve over time as more students become aware of the option.

Another initiative is the Farmer’s Market, which repurposes the space for the former salad bar as a counter to sell fresh vegetables. This benefits some students with allergies that prevent them from eating regularly at Metz because of cross-contamination concerns. 

Grijalva noted that students without cars to go grocery shopping off-campus also benefit, but is still concerned about students with dietary restrictions and allergies. 

“I think all-you-can-eat pasta is great and the farmers market is great, like, cool! Thank you for that,” Grijalva said. “But I’m still worried about making sure that every student can eat.” 

Third-year Hannah Nations usually avoids purchasing prepared food because of food allergies. In previous years, Nations has not used most of her points, so she appreciated being able to use her points on grocery items. 

“It got to the point [my first] year where I was literally standing outside of Ham offering to pay for peoples’ meals because I didn’t know what else to do with my points,” Nations recalled. 

However, Nations said that she still has underlying concerns about cross contamination.   

“Even though the new initiatives are good progress, it doesn’t change the core issue with allergies,” Nations said. “They’re still serving the top 10 allergens and there’s still massive cross contamination issues. Cross contamination doesn’t just affect me and other peoples’ severe allergies, it also affects people with Celiac’s, it affects people who don’t eat meat.”

Although Metz will turn a profit whether or not students eat food from the dining hall — or enjoy what they are served — Kinsley said he hoped that the new initiatives would bring in more students to eat. 

“The key part is understanding that Metz is going to make the profit we have guaranteed whether the students use the plans or not,” Kinsley said. “The key from my perspective is to make things appealing — to make things better so students will actually use their plan. For me, it’s not the same for them to use those meal plan dollars and buy dry goods from the store at the end of the year. That may come to the same thing from a money perspective, but I think from a student’s satisfaction standpoint, that’s pretty poor.”

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