House officials have committed to spending millions on greening efforts in the chambers restaurants without Members required stamp of approval, according to the ranking member on the House Administration Committee.
Rep. Vernon Ehlers (R-Mich.) sent a letter to Chief Administrative Officer Dan Beard on Wednesday, claiming that the Houses contract with Restaurant Associates underwent substantive changes in the time period between Committee approval and the contracts execution.
As a result, the House has lost significant revenue to date and will forfeit millions of dollars of commissions over the length of the contract, he said.
The letter comes days after Beards office announced that the House is set to make an annual profit of almost $1 million from the cafeterias. But more than $600,000 of that will be invested back into the restaurants to pay for greening efforts, such as biodegradable cups and local food.
That payback was never cleared with the committee.
By not getting the committees approval, Beard violated House guidelines that require the CAO to clear any purchases that cost more than $250,000, Ehlers spokeswoman Salley Collins said.
But House Administration Committee spokesman Kyle Anderson said the change wasnt a purchase because it wasnt paid out of the Houses revolving fund. Instead, he said, it was a change that was consistent with the approved contract.
A statement from the Democratic side of the committee called such modifications commonplace and within the purview of the CAO.
The minoritys ongoing opposition on this issue ignores the value of environmental efforts and greening initiatives, two factors that are central to the RA relationship, it reads. Since they cant dispute the success of the Houses new restaurants and the overall Capitol Greening Initiative, theyve chosen to focus on contract details.
But its more than details, Collins contends, pointing to the millions of dollars that will be spent on greening over RAs seven-year contract.
Because the committee was bypassed, Members have no idea how Restaurant Associates computes the cost of the greening effort or what the money specifically goes to, she said. For example: Is RA charging the House for the most cost-efficient biodegradable cups?
In his letter to Beard, Ehlers asked for a comprehensive report about the execution and management of the contract by July 31.
At this point, the greening of the cafeterias is irrelevant, Collins said. What concerns us is Mr. Beards carte blanche approach to squandering millions of dollars without seeking approval from the oversight committee those ultimately held accountable for spending at the end of the day.
Restaurant Associates took over the management of the House cafeterias in December with the promise of better food and more environmentally friendly practices. And like private vendors in the past, RA signed a contract ensuring that a certain percentage of their profit would go into the Houses revolving fund.
But the House wanted more greening measures than any other cafeteria RA runs, such as composting, biodegradable utensils and local food. So the CAO and RA made an agreement: RA could subtract the cost of such measures from the profit they handed over to the House.
That agreement has ensured that the cafeterias are environmentally friendly without any extra money from taxpayers, said Jeff Ventura, spokesman for the CAO. In fact, he said, the House is making more profit from the cafeterias than it did before bringing in RA.
He called the agreement to pay RA for greening efforts an administrative change that allowed the House to install a waste reduction program in our cafeterias that is a key element of the Speakers Green the Capitol Initiative.
The cafeterias have undergone dramatic change. All cups and utensils are made from materials that break down easily, food is composted, and some of the produce and meat is bought locally.
But it all costs more than the cheap stuff.
In RAs first four and a half months, the House earned $362,308. About $227,000 of that went back to RA for the greening efforts, and another $38,000 was subtracted to help pay for Quick Pay (a payment system for staffers).
That means about $96,000 of the original $362,000 went into the Houses revolving fund, which is used to make various House improvements.
Still, it puts the projected annual House profit after greening costs at about $256,000, or about $100,000 more than the House received annually from the previous vendor, General Services Inc.
The CAOs office has emphasized this expected increase in profit.
But Collins questioned why the CAO didnt come to the committee to approve the plan, if only so Members could see for themselves whether it was effective and fiscally responsible.
Had the CAO sought the required authorization before making unilateral changes, our Members would have ensured that any terms were structured to provide the best value for the House, she wrote in an e-mail. However, there is still a great deal of uncertainty regarding modifications.