For several hundred students living at UCSD, renting a refrigerator and microwave on campus — and having the appliances brought to their room — is a convenience too good to pass up. Each year, the students find help from the university’s student government, which runs just such a program, and their elected officials, who staffed tables this move-in day promoting the service.
Food for thought:
In addition to a commission from the rental service offered by Micro 101 Solutions, the company that works in partnership with the A.S. enterprises office, the A.S. Council receives additional perks, which are shared by both the council and other university departments. This past move-in day, the company also paid $10 per hour to the A.S. student officials who staffed the tables and were responsible for marketing the equipment to residents, according to information obtained by the Guardian.
Earlier this summer, Sixth College Senior Senator Matt Corrales raised some doubts about the Micro 101 partnership, questioning whether it provided the best deal for students, according to information acquired by the Guardian. In particular, Corrales wondered whether the A.S. Council generated adequate profits in the transactions, and whether the prices paid by students renting the appliances were reasonable. He wondered if students would be better off simply purchasing their own refrigerators or microwaves.
In a response to Corrales’ concerns, A.S. Commissioner of Enterprise Operations Angela Chen defended the arrangement as a very good deal for all those involved. As part of the arrangement, Associated Students receives $25 for every unit rented, with the total number of rentals potentially exceeding 400, according to information secured by the Guardian. The total profits are split between the council and the university’s residential life offices, with the former keeping 60 percent and the latter retaining 40 percent, according to the information. Chen also argued that Micro 101 offered the lowest cost among potential vendors and that, unlike other retailers, actually delivered the appliances to student rooms.
Chen did not make clear whether the $25 represents the A.S. Council’s share of the profits or whether it is the total figure that is shared between the council and ResLife. When contacted, she requested that questions be submitted via e-mail and did not provide actual figures in her answer.
In her original responses to Corrales’ inquiry, Chen said that Micro 101 also provides a number of “perks” for UCSD and ResLife, listing things like reduced rental prices for residential advisers, an extra $600 contribution to the student government and free refrigerators used in raffles by her enterprises office in marketing efforts and promotions.
In a subsequent interview, Corrales said he now feels satisfied that both students and the A.S. Council are getting a good deal.
“I was just concerned that the costs were just a little high,” he said. “But [I understand] that A.S. gets a good profit out of it anyway.”
In an e-mail to the Guardian, Chen stated that students benefit from all of the money made by the university on the transactions.
“A.S. partners with ResLife and we share the profit,” she stated. “A.S. enterprises are all self-sufficient; the profit earned from Micro 101 goes to A.S., which goes back to the students. Any money ResLife gets is given to ICRA, the Inter-College Residents’ Association and is used for programming for resident students.”
However, ICRA President Meg Gullo said she was unaware that her organization, which puts on programs for campus residents, received any share of the revenue from the deal.
“I know absolutely nothing about it,” Gullo said. “I would assume if we did, I would know something about it.”
Under the current funding scheme, Housing and Dining Services allocates $2 to ICRA for every student living on campus, according to Gullo. In addition, the organization’s nearly $28,000 budget includes $10,000 for travel expenses, an amount Gullo said she believes is a gift from HDS.
Both the general allocation and the travel funding are exactly the same as those included in the ICRA budget last year, and neither appears to be contingent on the number of refrigerator and microwave units rented. In addition, the organization’s constitution provides that “ICRA is funded through an annual monetary allocation from UCSD Housing and Dining Services, based upon the number of undergraduate residents living on campus,” making no mention of the Micro 101 proceeds.
Chen sent her written response after close of business on Sept. 23, after most university staff had left. Neither HDS Director Mark P. Cunningham nor any of the resident deans at UCSD’s six colleges responded to e-mail inquires over the weekend, which asked about the ResLife portion of the profits.
But even the share of profits retained by Associated Students is better than what students were getting out of the deal just several years ago, according to Jeremy Cogan, a 2005 John Muir College alumnus who served as A.S. commissioner of enterprise operations in 2003-04.
That year. the council set up a separate office to manage its profit-making ventures. Previously, the same department that oversees A.S. services, like Student-Run Television and A.S. Safe Rides, ran the enterprises.
“They were so overburdened with dealing with the co-ops and Triton Taxi and all of those services that Micro 101 was basically overlooked,” Cogan said, referring to the days when a single commissioner oversaw both types of A.S. operations.
At the time, the Safe Rides service was called Triton Taxi; its chronic budget-busting cost overruns have proven to be a headache for A.S. services commissioners in recent years.
Prior to his arrival, students were not seeing a single dime of the Micro 101 profits, Cogan said.
“Before I came in, it was sort of managed by the staff of A.S.,” he said, explaining that the profits were redirected to pay for special staff training of career university employees — including those not officially affiliated with the student government and not on the A.S. Council’s payroll.
At the time, the university had already contracted with Micro 101 for several years, Cogan said. Though he said his staff had considered seeking alternate proposals from approximately six other companies providing similar services, the plan never came to fruition before he left office. During his term, Cogan had instead worked to expand the enterprise office, completing a joint ropes course with the university’s recreation department and starting a short-lived partnership with HDS, which allowed students to use their “dining dollars” at Grove Caffe.
Since then, much of the focus has been on the poor-performing A.S. Lecture Notes and Soft Reserves, with the job of reforming the two enterprises charged to an awkwardly named Associated Students of UCSD Ad Hoc Task Force on Assessing the Common Characteristics of A.S. Soft Reserves and A.S. Lecture Notes.
“It really would not be difficult for A.S. to put together a comparison of different vendors and decide one that is cheapest and has the best service,” Cogan said of the current Micro 101 enterprise.
That is exactly what was done this year, according to Chen, though she said only two companies participated in the bidding, because the others “were unable to accommodate our requests.” However, she said the name of the other company was confidential and could not be released, because it was not selected as the service provider. Micro 101 was again chosen as the vendor because it offered a lower cost, Chen explained, though she would not say how much lower.
Chen also would not release the names of councilmembers who, in addition to ResLife staff, were on the committee that chose Micro 101, though she said none were among those on Micro 101’s payroll on move-in day.
Under UCSD’s official conflict-of-interest guidelines, “it is university policy to separate an employee’s university and private interests and to safeguard the university and its employees against charges of favoritism in the purchase of goods and services.”
Though the policies were developed with career employees in mind, they apply in principle to student employees as well, according to the university’s purchasing manager Linda Collins. Collins forwarded specific questions about the Micro 101 deal to the university’s manager of business contracts Diane Wynshaw-Boris, who was unable to respond by press time.
However, the university’s policies appear to only scrutinize business transactions that involve companies that are at least 10 percent owned by university workers, not those that simply share overlapping employees. It’s also unclear whether the conflict-of-interest policies would even apply to the Micro 101 agreement, since the company provides its services to students, not to the university, and simply gives the council and ResLife a commission.
Chen said councilmembers’ paid role in the marketing of the service does not raise any red flags.
“Micro 101 wanted A.S. students who were familiar with the process, and they worked on move-in day as Micro 101 employees,” she stated in an e-mail.
One such employee, though, John Muir Collge Sophomore Senator John Polkinghorne, said he perceived at the time that he was acting in his capacity as a member of the A.S. Council, not as a Micro 101 employee, but one simply compensated by the company for his time. At the time, he even wore his official A.S. polo shirt. Polkinghorne spoke only reluctantly, explaining that he did not want make to it seem like he was contradicting Chen and that his perception was not in any way an official one.
Polkinghorne said he did not see anything unethical in the deal, since he was simply trying to inform students of a useful service provided by the A.S. enterprises office, one they would not have learned of had he not been there.
“Micro 101 asked for A.S. students familiar with the processes and enterprises of A.S. to help out in order to ensure efficiency,” Chen stated in an e-mail. “Because Micro 101 is an A.S. enterprise, the A.S. member would have been able to answer questions about Micro 101 as an A.S. enterprise and about A.S. itself. If Micro 101 had wanted anyone at all to work, the opportunity would definitely have been open to any student.”
In addition, Chen said that later this year, the enterprises office would for the first time consider whether students could get a better deal by simply purchasing the appliances, as Corrales originally suggested.
