Kentucky State University has annually budgeted $5.5 million for campus facilities, maintenance, and custodial services; however, the University has consistently overrun the budget, with actual expenses exceeding $7 million, as evidenced by historic data trends.
The Sodexo Personal Service Contract and Management Agreement are for the period from January 2023 to December 2023, which straddles the second half of FY 2023 and the first half of FY 2024. The costs incurred by the University during the contract period will depend on the actual services performed by Sodexo (professional leadership, work order tracking system, labor, technology, and in-house staff training). However, per the PSC and Management Agreement, the total cost for first-year services shall not exceed $3,200,000. Sodexo has projected a first-year total cost of $3,068,784.46.
The trend toward budget overrun—along with the additional expense of the Sodexo services and the unbudgeted expenditure of $676,507.23 for payment of an energy savings performance contract—requires KSU to seek additional financial resources to support its facilities. As such, Dr. Aaron Thompson, the President of the Council on Postsecondary Education (CPE), has agreed to seek the Council's approval to provide the University with Management Improvement Plan funding of $1,200,000 in FY 23 to support its facilities and infrastructure expenditures. He will request the Council's approval at its January 27, 2023, meeting. Dr. Johnson will use funds from the $23.0 million loan to finance Sodexo's remaining FY 23 balance of $373,097.40.
University staff members, in partnership with CPE and Your Part-Time Controller consultants, are working to create a revised FY 23 budget to present to the Board based on up-to-date reconciled expenditures, spring semester tuition revenue projections, and projected expenditures needed to complete the current fiscal year. This will also provide a firm basis for a balanced FY 24 budget presentation to the Board in June. During the remainder of this fiscal year and the first half of the next, KSU will further refine its Facilities and Infrastructure budget and approach to managing those functions to ensure they align with the recurring budgetary framework, and without reliance on outside resources.
Any facilities, maintenance, transportation, and custodial services required beyond the proposed Sodexo contract period will follow the University's standard procurement policies, procedures, and practices. Such services will be acquired through the issuance of an RFP, which must be approved by the Board of Regents.
Interim President Ronald A. Johnson recommends that the Board of Regents approves the Sodexo Personal Service Contract and Management Agreement.
Approve the Sodexo Personal Service Contract and Management Agreement.