Montgomery College: A Destination Employer?

Montgomery County is the richest county in the state of Maryland, yet many of its residents are lower to middle class earners. Therefore, it is essential that quality education be available for an affordable rate. While Montgomery College strives to provide that quality for its students, it is in the process of terminating its entire staff from the bookstores on all three campuses. These staff employees will likely be jobless, and therefore, impose a
burden on the county. At the same time, MC is hiring more and more senior administrators at higher salaries. It has been apparent, as new administrators have been hired to replace those leaving, that additional positions have been created, and some current administrators have had their positions upgraded.

Lower-grade employees, such as bookstore staff, stand on the front lines of student and community interaction. The services to the students and community are directly provided by these staff employees of the college. Now, it has been determined that these employees will be terminated without any promise of replacement positions within Montgomery College. While other college bookstores may use services provided by outside vendors, the process of arriving at this decision at Montgomery College has been one of mismanagement and deception on the part of the Auxiliary Services administrators.

By way of history, the former Auxiliary Services Director, whose background is in early childhood education (and one of those administrators whose position was upgraded) determined that the bookstores undergo a re-organization in 2007. That process did not meet the needs of the unit and it was again re-organized in FY09. This resulted in the hiring of more upper level managers, and of course, an increase of payroll. At the time of the second re-organization, the staff employees were promised pay and grade increases, which they did not
receive until a full fiscal year after the Auxiliary Services Administrators received theirs. They were then paid a lump sum of back pay, which after taxes was a very modest sum. When asked why staff employees had not yet received their pay and grade raises, the director responded with, “you know how slow HR is”.

In line with the nature of the book industry, sales were decreasing. Along with a decrease in enrollment, the bookstores’ contributions to the college began to fall. The bookstores responded by offering technological resources for students along with other services to increase sales. Auxiliary Services management hired CBC, an outside firm that specializes in college bookstore operations, at a cost of $30,000 to determine how bookstore operations could remain viable. The overview provided by that study indicated that customer service was rated 100%. There are also many services currently provided by MC Books & More operations that will probably not be permanently retained by an outside vendor. CBC also determined that our payroll expenses were at 28%, while the national average was only about 13%. CBC consulting said that if senior management payroll was cut, the bookstores would be able to contribute $600,000-$800,000 per year to the college, in addition to meeting their operating expenses. CBC delivered these findings at the same meeting on February 24, 2014 in which the current Senior Vice President for Administration and Fiscal Services specifically told Bookstore staff that “no one is going to lose their job”.

Once the findings were presented, the director announced that “this is no one’s fault”. It was determined afterward by A. S. administrators that in order to cut costs, student payroll would be cut. These minimum wage employees on the front line of customer service incur less than 2% of the total payroll expense. This left the stores in a position of having less staff to maintain high customer service levels. The advice of the consulting company was disregarded completely.

The Senior Vice President for Administration and Fiscal Services requested that bookstore managers and staff to create a business plan to submit for consideration. Bookstore managers were told that they could not consider personnel payroll costs while developing a plan. On May 21, 2015, the AFSCME president sent an email stating that the Senior V.P. had four model plans under consideration, none of which involved outsourcing. The email stated, “the purpose of the RFP is to assess as an option compared to the others in addressing the bookstore and aux services issues of sustainability an(sic) services and function.. Again, outsourcing is not a finalized determination…”

It is critical to note that the bookstores were being administered by people who had no background in retail management. CBC Consulting had offered MC Bookstores a way forward. The bookstore staff was fully prepared to implement this plan. One employee of A.S. requested a copy of the CBC report and was actually suspended for two days in April 2014 for persisting with his request. He eventually filed a FOI and was finally given access.

The mismanagement of the administrators and the lack of a response to the financial setbacks of the unit were allowed by administrators who paid little attention to the operation of the unit. After expending funds on obtaining a consultation, the Senior V.P. of Administrative and Fiscal Services determined to suppress and ignore the CBC recommendations and instead made the decision to outsource. She made this announcement at a College Council meeting on September 8, 2015, before the Request for Proposal (RFP) had even been sent out to solicit bids. The Office of Business Services called a meeting on April 30, 2015 with bookstore staff to announce the decision that the college would be soliciting outside vendors to take over bookstore operations. At that time, employees were told that their positions would terminate on June 30, 2016. At the second meeting, July 23, staff was told their positions would terminate on March 31, 2016. When asked why the date had been changed, the Vice President of Finance/CFO Office of Business Services/Finance, repeatedly said, “Sorry for the misunderstanding”. She continued by explaining the need to have the new vendor up and running by the new fiscal year.

Eligible employees were offered early retirement and the remaining staff was offered a voluntary separation package. Newer employees were offered the same severance as those with more years of service, with an added $200.00 per year of service. The agreement would also prevent any staff from working at the college for a year after termination. Some employees are only a few years from retirement, early or otherwise, and will have difficulty finding comparable employment. At this time, the RFP for an outside vendor includes a clause that they hire some of
those employees who did not sign the Voluntary Separation Proposal (VSP) for a minimum of six months at current pay while offering benefits. However, as the Senior V.P. for Administrative and Fiscal Services has said several times, “Everything is negotiable”. So, as the termination date fast approaches, there is no guarantee that an outside vendor will accept these terms, and if they do, continued employment beyond six months is subject to the same uncertainties.

College administrators have determined to campaign to make Montgomery College a
“Destination Employer”. The question is, what type of employees? Only administrators? It is most likely that once the bookstores are outsourced, that other departments of staff employees will be outsourced as well. The college will then need more and more funds from the county for rising costs and to cover raises for the higher grade employees. Tuition will rise, resulting in a further decrease of enrollment. It seems, at some point, there will not be enough students to cover the rising costs of administration.

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