Editor's note: This is the second in a three-part series focusing on the proposed DDS changes next year. This part examines the DDS cost infrastructure.
The recent campus-wide outcry over proposed meal plan changes has brought increased attention to Dartmouth Dining Services' current unfavorable financial status, which is caused largely by the high costs involved in running diverse on-campus dining facilities.
DDS Director Tucker Rossiter said student criticism, athletes' concerns and parent feedback led DDS to review its current dining program and propose these changes. He approached the Student Assembly last winter to recruit students for the committee that conducted the review, the first assessment conducted in nine years. The move was spurred in large part by feedback from students, he said, who wanted to see the surcharges on the two smallest meal plans disappear and have dining dollars roll over to subsequent terms and interim periods.
While DDS is offering these changes in its plan, the service is also seeking to balance revenue after a bad fiscal year by curtailing student spending at Topside, where profit margins are significantly lower than at the dining halls. DDS also plans to increase the price of the least expensive meal plans.
Item costs at Topside are higher than in the 12 dining venues because DDS buys the store's 1,800 products in small quantities from major suppliers. The cost of the products eats up between 60 and 65 percent of the price students pay at Topside, while in the dining halls only 30 to 35 cents of every dollar spent by students go to food cost.
That mark-up constitutes a "contribution margin" that needs to cover $9 million in operating expenses including labor, insurance and maintenance, Rossiter said.
At an open meeting with students last Monday, DDS Fiscal Manager Don Blume said the Topside cap was put on the table as a matter of compromise.
"The question becomes what is the trade-off? What do we do to pay the bills? We gave some things but we had to take some back," Blume said.
Rossiter said that although the committee considered cutting back hours -- there are campus dining services open from 7 a.m. until 2 a.m. every day -- DDS does not want to curtail hours or customer service in order to cut costs.
"The thing that we heard very clearly and very loudly is we don't want to see a reduction in services," Rossiter said of students' disapproval of hours cuts.
Students spent an average of $158 at Topside Fall term, according to DDS. Most students, 72.6 percent, spent less than $200 at Topside and 85 percent of students spent under $300.
Rossiter told students at the meeting that "$100 was manageable and became fair and consistent for all students."
Dean of Residential Life Martin Redman, who supervises the DDS director and sits on the committee, rejected the Assembly's recent recommendation that the Topside cap be $300.
DDS' proposal includes a new 10 percent discount on all dining for students who buy the "Big Green" plan at $1,500. The new discount for "large eaters" is "no different than frequent flyer miles or hotel stays," Rossiter said.
"If you're a loyal customer to [DDS] and spending quite a lot a money, then we have an incentive for you," he said.
The committee that shaped the proposed DDS changes, which included Senior Associate Director of Athletics Brian Austin, received a lot of concern from varsity coaches and athletes, who Rossiter said have been receptive to the proposed plan.
Many athletes, who are often given specific nutritional requirements, were concerned about food costing too much.
"It's a group that we hear from often in regards to meals and meal plans for their athletes. There's certainly a large portion of varsity athletes at Dartmouth so that's a constituency we wanted to address from an administrative point for sure," Rossiter said.
While DDS' proposal eliminates surcharges on the off-campus and Mini Green Declining Balance Account plans, the least expensive plans would be bumped up to $600 for off-campus students and $950 for on-campus students.
"We fully recognize that some on-campus students will not like the fact that we will soon have a $950 on-campus, minimum dining plan, but we feel that the new requirement will adversely affect only a small number of on-campus students," the DDS proposal stated.
Campuswide, between 15 and 20 percent of students have the Mini Green plan, which this year cost $755 for 705 dining dollars. At the same time, the average Dartmouth student spent $1,085 in dining last term, and nearly 80 percent spent more than $900, according to DDS.
"This is not going to impact as any people as you might think, coming off of the blocks," Blume said.
Overall, students are currently underpaying for the services DDS offers, Redman said, and those who purchase the Mini Green and off-campus dining plans simply need to pay more to help cover the fixed costs of the program.
The second biggest plan, and the one freshmen would be assigned to automatically for Fall term, carries a $1,200 DBA, which Blume said is a number closer to what students are expected to spend, given an average annual increase in DBA spending of 6.7 percent in the last couple of years. DDS wants students who typically spend beyond their DBA plan to pay a higher level up-front instead of charging food at the end of the term.
The DDS proposal was also driven by feedback from parents, who Redman said sometimes do not understand the charges that appear on College bills when their children charge food because they have exceeded their pre-loaded DBA.
"For a lot of parents this is so unusual to them," Redman said. "It's a huge PR issue for us because they think we're screwing them right and left."
Last year, the skyrocketing cost of fuel and volatile raw food prices caused a $250,000 DDS shortfall, Rossiter said.
Rossiter noted that the College gives DDS some latitude in meeting its budget targets because of difficult market conditions.
"The College understands that that's part of food service here," Rossiter said.
Redman said at last week's open meeting that he has been impressed with DDS's ability to maintain a high quality of service despite unpredictable food prices.
"Where my daughter's going, she hasn't seen a green pepper in months," Redman said of his daughter's school, Skidmore College.
DDS has asked the Board of Trustees for a 5.2 percent increase in dining fees overall, Redman said, but will still be considering the specifics of the meal plans at the start of the Spring term, when it could adopt the proposal, choose a compromise or elect not to change the program. Although keeping the current five dining plans the same remains an option, he said, DDS will have to find some way to handle increasing costs in the future.
"We're going to cross a $10 threshold, at some point in time, for a hamburger -- I can't tell you when it is," Redman said.
