By David Riddle and Patrick Burkart
May 1994; Volume 1, Issue #1
(sub)TEX

PSSST! Wanna buy a student union?

Alumni built the Texas Union during the Great Depression for use and enjoyment by future students. If those alumni could see their gift being auctioned off to the highest bidders today, they might reconsider the worthiness of the students entrusted with their gift.

A general lack of student concern with the replacement of Union Dining Services (UDS) with private venues has been an essential condition for the Texas Union Board of Directors' passage of the privatization plan. Ignorance of the purported reasons for the plan and of implications of the plan, shared by students and the "experts" on the Board of Directors alike, has been another condition favoring the few supporters of the plan.

Last semester, Students and Workers Against Privatization (SWAP) members politicized the increased franchising at the Student Union. Even before the Board of Directors voted to push a permanent franchising deal to a decision before students could know what hit them, SWAP members met with voting student representatives to the Board, Andy Smith (the Director of the Union), Union administrators, the UT Office of Business Affairs, and the Director of Union Dining Services. We report our findings.

Misinformation about the naturalness and inevitability of privatization of public spaces in the Union was taken as a brute fact by The Daily Texan, which focused its attentions upon the opinions of Jaspreet Pal and Eric Bradley, the only pro-privatization student representatives on the Board with votes. Andy Smith, the Texas Union Manager who "advises" the Texas Union Board of Directors but who does not vote, convinced the Union Board of Directors that the Texas Union was in the throes of a severe debt crisis and that the only possible solution to the debt required the abolition of Union Dining Services and a nearly complete privatization of Texas Union space.

The debt problem serves several important functions to those who would "reinvent government" for the service of exclusively private interests. The proposed solution to the debt is a hoax, and the debt itself is a hoax: it is part of a plan to deceive the Union Board of Directors into selling off public space to private profiteers, trading state jobs for unsecured, half-time, no-benefits jobs. A bogus financial crisis was cooked up by a crooked Union Director with a history of privatizing other student unions, and who pushed a bad financial plan through to a gullible Texas Union Board of Directors.

Smith never released research into privatization to the Board of Directors, developed or discussed these plans with the Board, or with the public except in the three hastily scheduled "informational forums" held during the final weeks of last semester. During these forums, SWAP members repeatedly called upon the Board to explain how and why students have accrued a $300,000 debt, and to demonstrate the accuracy of this figure. The $300,000 debt was the bottom-line justification for privatization offered by the Board. Neither Andy Smith, who ran the deficit, nor a single Board member offered to explain how the figure emerged from the mysterious accounting books. During the last public forum, board members left the forum one by one until only Eric Bradley remained to answer the question, "Where's the debt? Explain the debt." Bradley said only that he could not explain it, and then himself left the meeting, leaving behind an exasperated audience. Only Karen McCloud has bothered in the past to ask Board members why the debt figure should force Board members to choose privatization as the only financial plan deserving attention.

SWAP members have reviewed UDS financial statements, the contract negotiated with Wendy's (so far, the only private dining contract in the Union), budgetary figures, the UT Operating Budget ending fiscal year 1994 adopted by the UT Board of Regents in August, 1993, and the Union's own financial statements published by Andy Smith's Union Director's office. What emerges from all the documents released by the Director's office is that $590,000--20 percent of its net income--is transferred yearly out of the net income of UDS to cover overhead costs. UDS carries the bulk of the operating expenses for the entire Union, including Wendy's expenses. UDS pays for fifteen other units' costs of accounting, personnel, training, advertising, and the larger portion of their administrators' salaries. This financial arrangement, however unjustified in principle, has nevertheless made it possible for Smith, Bradley, and Pal to argue that UDS is losing money.

However, SWAP has discovered that despite the unjust tax levied against UDS for the upkeep of the entire Student Union building, it is impossible to find a statement of the debt in any of the paperwork released to the public so far. In an interview, Andy Smith claimed that the Union debt figure was calculated according to tables based on UDS's projected losses 1992/1993 of $134,000. 1992/93 was projected to be a slower year than 1991 because of the remodeling and construction in the Union (construction which made space for the unwanted Wendy's). This makes it easier to understand why 1992/93 was the first year of UDS losses in fifteen years. However, this figure is never derived from any budget tables or bookkeeping reports.

According to the December, 1993 report issued by his own office, UDS is making money. Its costs are under budget and its actual income and profits are above projected income. Where's the debt? In the minds of the Board of Directors. Even the simplest restructuring in the way the student union pays for itself could cover the mysterious debt with existing resources.

The Consequences of Privatization

What has been overlooked by our student representatives to the Board of Directors, The Daily Texan, and the few, humorous student supporters of privatization are the long-term consequences of privatization traded for a short-term pseudo-solution to a bogus debt problem.

The Union will be a very changed place. Students will suddenly find themselves in a shopping mall, surrounded by two levels of venues once occupied by a full-service cafeteria, theater, recreational center, and student spaces. Students will become clients of their own student union, there for the pleasure of the store owners who may kick out anyone not buying something. Union workers will lose their jobs and their benefits, to be replaced by part-time and temporary workers.

During the last public forum, SWAP members raised the question, "How much will it cost to buy back our student union after your privatization plans are carried through?" to which the board answered with only blank and bored looks. Most had never considered the possibility. Thus SWAP has had to reconstruct a "publicization" scenario in which previously public spaces that will be privatized under the plan are returned to the students.

In the contract signed between the Associate Vice President for Business Affairs and the Vice President for Wendy's International, Inc., there is no clause covering the expulsion of Wendy's from student space. Remember, students voted overwhelmingly against privatization of food services in 1991, and Wendy's was surreptitiously installed into the Student Union that summer anyway. Because no clause exists providing for the procedural removal of Wendy's, in order to terminate Wendy's, students would have to reimburse Wendy's for any renovation and equipment costs and compensate for lost profits.

The expense of de-privatizing the student union would be extraordinary as it stands, with only one private company installed. But buying out an entire union full of private interests would be utterly unaffordable to future students. The long terms of the contracts will outlast most students' careers at the University. These factors make the decision to privatize nearly irrevocable.

For more information about privatization, contact SWAP at 512-370-4687 or stay URLed right here at SubTEX.