State Center Community College District officials say turning to a private company to run its bookstores will save students money, while adding to the district’s bottom line.
District management wants to turn over operations to Follett Higher Education Group, a national firm based in Illinois.
The board wasn’t ready to make the change. Expressing doubt over cost control and concern over job protection, the proposal failed Tuesday (May 7).
While 15 full-time equivalent jobs, as well as 26 seasonal employees at the bookstores, are safe for now, the plan will come back to board at another meeting.
Deal Voted Down
The SCCCD board’s vote at its monthly meeting on privatizing the bookstores was 3-3 — one vote short of passage. John Leal, Deborah Ikeda and Bobby Kahn voted in favor. Eric Payne, Annalisa Perea and Magdalena Gomez voted against. Board member Richard Caglia did not attend the meeting, saying he couldn’t make it to Oakhurst that day.
The district will hold a special board meeting in the near future to vote on the issue again. No date has been set.
Privatization Would Save Money
“It is an up and down affair. It doesn’t serve our students as well as we want.” — SCCCD Chancellor Paul Parnell
District officials said they would not provide a copy of the proposed contract with Follett because it has not been signed.
However, based on other documentation, the contract would run for six years, with a one-year optional renewal, starting July 1.
The district looked into privatizing the bookstores in 2013, but opted not to do so.
Chancellor Paul Parnell said the district running the bookstores is a financially shaky enterprise.
“It is an up and down affair. It doesn’t serve our students as well as we want,” he said.
In 2018, the bookstore made $160,000. The year before, it lost $320,000, according to Parnell.
The district set “student cost and affordability” as the top priority when seeking companies to run the bookstores on the districts’ four campuses. Of the two companies that applied, a committee chose Follett over Barnes and Noble College.
“The college bookstore industry is a very challenging business right now,” Tom Byrne, president of Campus Bookstore Consulting, told the board. He noted the competition from online retailers and students renting books instead of buying.
Cost control measures include capping the margin a bookstore can profit off a sale, not passing some expenses (such as freight costs) to students, and the district’s right to audit financial records.
Follett also would price-match textbooks, including online retailers like Amazon. The current bookstore does not match prices.
In addition to a $900,000 fee, Follett would provide commissions to the district and $470,000 in capital investments to renovate the facilities. The company also agreed to purchase the current inventory.
Byrne said the company would also set aside a $100,000 “student success payment” yearly to help students pay for textbooks.
Trustees Evenly Divided
“We were ready to make that change,” Leal said of his support. “It would benefit our students in a number of ways.”
Leal said current bookstore employees would be absorbed into other district positions.
“We have to care about our people,” Leal said.
Trustee Eric Payne had many questions, and wants the district to come back with a new plan with more details.
“(My main concerns were) how we address our human capital in the system to make sure we are doing our due diligence,” Payne said.
When Payne asked during Tuesday’s debate about job safety, Cheryl Sullivan, the district’s vice chancellor of finance and administration, said Follett would offer first right of hire for any displaced employee.
Payne feels the current operation of the bookstore works.
“There are a number of bookstores within the California community college system that are successful. If you want to look at price matching, that is something that our system has the ability to do … Ultimately, we are looking at the bottom line, which is our students. We want to ensure our students have a number of options to ensure they are successful in our system,” Payne said.
Caglia ultimately will be the swing vote. He says he still has unanswered questions.
“The job of a trustee is making the best decision for our kids. I need to dig deeper in the issue before offering an opinion,” Caglia said.
“We are not quite comfortable … A lot of us don’t feel we would have a position with Follett.” — Bookstore employee Christopher Cupp
As the semester wraps up in a few weeks, students buzzed in and out of the Fresno City College bookstore. The textbook section was quiet.
Christopher Cupp is a sales associate on the Fresno campus. He spoke with GV Wire as many of colleagues looked on.
“We are not quite comfortable. … A lot of us don’t feel we would have a position with Follett,” Cupp said.
Based on contracts Cupp has seen, he’s not sure a transition elsewhere on campus would match with bookstore workers’ skills.
“Our positions here are so specialized, they would feel it would be hard to fit in with the rest of campus. A lot of us have skills that can easily slide in with some learning,” Cupp said.
Cupp realizes this week’s vote saves them for now.
“We felt (the vote) was a temporary victory,” he said. “We felt like we won the battle, but we have more to do.”
Follett Takes Over at Fresno State
According to Follett’s website, it operates 1,200 bookstores in the country.
As of last month, that also includes Fresno State.
Follett took over the Kennel Bookstore on campus, through a deal with the CSU, Fresno Association, Inc., the auxiliary entity that ran the business.
Details of the transaction were not available by time of publication.