Rumors of outsourcing the Food and Beverage Department at Ho-Chunk Casino and Convention Center in Wisconsin Dells had been circulating for a while among the employees.
As a result, informational meetings about Food and Beverage and Group Sales outsourcing were held at 9 a.m., 11 a.m. and 1 p.m. on Monday, Jan. 16, at Ho-Chunk Casino.
It became a hot topic on social media, with Ho-Chunk tribal member Kelly Logan often being at the forefront of the discussion.
“People are coming to me with their concerns,” he said. “We needed to have a discussion with management about this.”
In reaction to that concern, Ho-Chunk Nation Business Department Executive Director Robert Mudd issued a memo on Jan. 9, confirming that outsourcing is a possibility and explaining that rumors of employees losing their jobs are false.
“Why outsourcing? First and foremost is the lack of positive cash flow from this area. Net income has been in the negative for a very long time. Who is at fault for this consistent loss of positive revenue is anyone’s guess,” the memo stated.
As a result of the confusion regarding a possible outsourcing move, Mudd offered informational briefing and comment meetings on Jan. 16 at the Lower Ball Room at the convention center.
Also present to answer questions at the meetings were President Wilfrid Cleveland, HCN attorney Mike Oeser, Executive Director of HCG-WD Casey Fitzpatrick and Senior Marketing Manager Rob Reider.
At the 1 p.m. meeting, Mudd said the sessions were held because he didn’t have enough information to make a decision and needed input from the employees.
A graph from 2003 to 2016 was displayed which showed the profit and loss of the Food and Beverage Department. Only two years, 2005 and 2008, show a profit. In the year 2005, a profit of $55,229 was shown and, in 2008, the department gained $221,809. All the rest of the years showed a combined loss of $11,977,881.
If a contract is to be signed for outsourcing, it won’t be for another two months, Mudd said.
On the list of possible vendors were Spectra (formerly Ovations), Compass Group, Sodexo, and Lancer Hospitality.
A statement by Spectra, the leading contender in the possible agreement, was projected, which lays the foundation of their policies toward employees.
“Spectra will keep each of the employees, except any that have red flags, at the current rate of pay. When new employees are hired, pay scales will be established. Also, employees will be transferred to health insurance that Spectra provides and pay will be adjusted to account for additional healthcare costs for tribal members.
“It’s important to maintain status quo for them, we can adjust pay. About $1 million in savings for nontribal members to move them off your (Ho-Chunk) plan and onto ours (Spectra) with the only significant change is the mostly free clinic access … but they still have good coverage for these services.”
The plan is to have the incoming company in place for five years, then revert back to being run by the Ho-Chunk Nation.
Some people in attendance questioned whether the new company would also retain employees if they had a felony conviction.
“That would be a red flag,” Mudd said.
Many people waited their turns to ask questions or make comments on the proposed outsourcing.
“We all worked hard, but never had a say so,” Logan said. “Am I supposed to believe in you? Management keeps calling the shots.”
Another person asked why outsourcing was necessary.
“Why can’t you have people show us what we are doing wrong? What do they do different than us and why can’t we do that?”
Another employee questioned the lack of analysis.
“Why do you not know why we failed or succeeded?”
Other people said the issue goes beyond the department.
“It’s not just Food and Beverage. Because the Rewards Club doesn’t offer anything anymore, they’re not coming back. It’s the whole casino.”
“No coupons, no marketing,” said a young woman. “People come from Milwaukee and they don’t come back. They go to Potawatomi because they gave them free rooms. It’s all about marketing. You got to bring them into the casino to get them to eat.”
Lisa Mendez said she understands the concept of bringing in an organization to bring a profit. But she wanted to know how much marketing dollars are being put into the casino. They are looking into Food and Beverage and Group Sales losing money but other parts are losing as well. Slots have been down more than seven years, she said.
“The casino, as a whole, is failing,” she said.
That spurred other people to question the overall operation.
“As a business, are all other areas in the casino doing just as bad?” an employee asked.
Some employees questioned why there isn’t money for marketing for the buffet and restaurants.
“At the end of every year, marketing has a lot of money left over and they quick have to spend it. Why isn’t some of that money used for Food and Beverage?”
One of the people to speak on that subject was Sherman Funmaker, who emphasized making changes that offered support to all components of the business.
“I used to work in the Marketing Department and one of the things that stood out to me is that they only marketed the floor and they didn’t really do a good job of that,” Funmaker said. “They didn’t market Food and Beverage, they didn’t market the hotel, they didn’t market Wo-zha-wa, they didn’t market Copper Oak. These are all part of this facility. And that’s what really used to get to me is that they really didn’t put a big effort into doing this.
“So, I agree with the Food and Beverage people here that it’s not all on them,” Funmaker said. “You have a really good crew that’s really dedicated to making this right. I think we all know that change really does have to come. As a tribal member, change has to come. This might not be the right way but at least we bring a dialogue or a conversation to everybody so we can tell our coworkers that these are the kinds of things that we need to move forward.
“Yes, marketing. Marketing is really terrible here. I’d sit through these meetings here and it was just ‘market the floor,’ ‘market the floor.’ Try to get people in. Yes, we should try to do that but you know if we have good food, we have good service, our hotel rooms are clean, our convention centers are clean, and were serving good food, there they’re going to come in. If we don’t do that, they’re not to come in,” he said.
“Marketing needs to step up. And that’s where a lot of this goes, but there’s all kinds of other different stuff. There is much more to the success of this facility than just Food and Beverage,” Funmaker said. “There’s a lot of stuff that needs to be looked at. And there’s not a quick fix but at the same time hopefully, with this information you’ll be able to move forward. Maybe with this, we can step forward and accomplish something really good to here.”
Other people questioned management and its ability to analyze the situation.
“Have you once come into a kitchen to talk with a supervisor? Did you ever see through the process?” an employee asked Mudd.
Mudd said he had visited the kitchen and facilities, but not on a busy night.
He reassured them that there would be no layoffs, then after 5 years, they would be taken back in with the Nation.
People who wished not to continue with the new company could transfer to another position within the Ho-Chunk Nation, but it would have to be something outside the Food and Beverage or Group Sales departments.
Someone asked if Mudd owned a consulting company, which he replied that he did, and then why he couldn’t figure out why they were losing money by looking at the data.
He said he hasn’t done any consulting work since 2005.
“I could figure it out, if I put the time into it, but I can’t change it,” he said.
Some people were concerned about sick time and annual leave when they are transferred to the new firm.
“I’m trying to get your sick and annual time banked, which will be available when they return to the Nation in five years, however, it won’t accrue with the other company.
It was mentioned by an employee that there are 39 tribal members who work in the department, but said it affects more tribal members than that. There are many family members of employees who are Ho-Chunk, she said.
Some people questioned the timing of the move, especially since the expansion projects are nearing completion, employees were wondering if the new facilities would attract more customers and, therefore, the new company would be given all the credit for the improvement.
“So, they are building a new buffet and restaurant for Spectra,” she said. “Give us a chance to bring them in the door and turn this around.”
When it comes to marketing, all they hear on the radio is about the Ho-Chunk casino in Madison, someone said.
“Why can’t we turn it around without bringing in the white man?” a young woman asked.
“Can I fix the problem? I don’t know,” Mudd said.
“Decisions come down from up above and we do what we are told to do,” an employee said. “For instance, they are told to have specials on Bloody Marys, a drink with tomato juice. They lose potential money on it because people would buy the drinks anyway, regardless of price,” said an employee.
“People who barely step on the floor are making the decisions,” Why isn’t it just replace the management?” asked another employee.
“It’s a trickle-down effect when people are not doing their jobs. They should have disciplinary action,” an employee said.
One person said there used to be 1,000 people attending the buffet on a regular night, 1,500 on a Saturday night. Now, there are only 250 to 350 people attending, with another 100 people on a concert night. This is due to raised prices, he said.
Another attendee said the food quality needs to be improved to bring back a larger crowd.
Someone questioned why $2 million was spent on recently remodeling the Grill, now removing it to put in the buffet. Mudd said he can’t explain it because it was a decision made by Legislature, not his department.
“There’s a lot of changes that could take place,” President Wilfrid Cleveland said. “Food and Beverage is seen as an amenity, but still it shouldn’t lose as much money as we are. I’m disappointed it has come to this. This casino is our flagship and we need to make sure it is solid for our children and grandchildren. It is their future.”
Cleveland looked at the issue from a historical perspective.
“Sometimes people are afraid of change. If you look at the Ho-Chunk people, we have been changing for years. Some types of changes are made so that we are more secure. When we started with the Smoke Shop, we relied heavily on state and federal grants. Then we added a bingo hall which provided employment for our Ho-Chunk members. We realized that we could make a few dollars, so we took the opportunity to construct a casino. We made a lot of steps for the Ho-Chunk people.”
He said the plans to organize outsourcing were in place when he took office.
“In other businesses, they would have made decisions without meeting with the employees,” Cleveland said.
Oeser provided some legal information during the meeting, however Reider and Fitzpatrick did not add any information during the meeting.
Mudd thanked the employees for attending the sessions, telling them their input is valuable to the decision-making process. He said there would be more informational sessions in the future, so the employees could be kept up-to-date, as well as to offer their suggestions and ideas.