GENERAL ACCOUNTING OFFICE ESTIMATE OF COST The General Accounting Office has also made a very detailed estimate of the cost of the pay raise, and they came up with a slightly lower figure than that, but substantially the same, as the cost of this last pay raise in the overall operation of the restaurant. Senator PROXMIRE. Can you answer that question on how much it would cost to give the salary increase, let us say, to those few women first? Mr. GEARY. I would suggest, sir, that since the General Accounting Office has made a very detailed study for the Rules Committee, not at our request but at the committee's request, and have prepared recommendations covering the overall pay scale of the restaurant, including certain changes in the procedures for pay which they believe would be effective in improving the efficiency of the management and the utilization of employees, that we permit them to give us the result of their studies. Senator MONRONEY. We will be glad to hear from them. Mr. BRADY. First, to answer the Senator's question, I think it probably would be about $1,000 a year. Senator PROXMIRE. $1,000? Mr. BRADY. That is 15 cents per person per hour. Senator PROXMIRE. It would be 35 cents, would it not? It would go from $1.15 to $1.50; is that correct or am I wrong? Mr. BRADY. You are right. That would probably be about $1,100 to $1,200 for just the three waitresses. Mr. Chairman, if I may review a little bit of history here— ACCOUNTING SYSTEM AND PAY SYSTEM Mr. BRADY. When the Architect took over the Senate restaurant on August 1, 1961, he installed the same accounting and pay systems which were used by the House restaurant and which he used in the Senate restaurant when they were previously under his jurisdiction from 1942 to 1947. As a result of the first annual audit required by Public Law 87-82 as of June 30, 1962, the General Accounting Office had two main recommendations. The first, that a new accounting system be developed and installed whereby accounting data on new operations could be made available to management on a current basis; and, second, that a new pay system be adopted whereby employees would be paid biweekly on a hourly basis, and that a 4-week accounting period and a 13-period year be adopted, a natural accounting basis for restaurants. The Architect adopted our recommendations for a new accounting system and we developed and installed the system now in effect. However, the staff of the Architect maintained that they either had to use the present pay system, which is the same as used for Senate and all legislative employees generally (but without time reporting), or adopt the wage board pay system. The latter would require a substantial increase in the annual subsidy appropriated for the restaurant. The present pay system was authorized by the act of June 30, 1906. It was used throughout the Government until, I believe, 1945. It works fine when time reporting is + employed. The monthly pay is simply one-twelfth of the annual rate. However, when time reporting is imposed, the employee is docked for the time not worked rather than being paid for the time worked. I won't go into the complications now because it would confuse the issue. STUDY OF MANAGEMENT OPERATIONS In April of last year the chairman of the Subcommittee on Restaurants of the Committee on Rules and Administration requested us to make a study of management operations in areas of internal control, and to furnish certain information with respect to operations of the Capitol dining rooms during certain hours of the day and for night sessions. I believe that our report, dated October 23, 1964, has been made available to this committee. Our recommendations concerning physical protection and accounting matters, including the reorganization of the Accounting Office, were immediately accepted by the Architect, and corrective action was taken. The balance of our suggestions concerned policy matters which the staff of the Architect felt should be considered by the Senate Committee on Rules and Administration. The suggestions fall into two categories. First, the employment or contracting for a food controller to carry out a continuing program of food cost studies, staffing requirements, possible variations in services offered within the present designated hours, and so forth. And, second, replacement of the inappropriate pay system with a biweekly pay system, hourly employees being paid on an hourly basis, with time and a half in excess of 8 hours a day or 40 hours a week, and management and clerical employees on a fixed salary. The chairman of the subcommittee subsequently requested that we develop a specific plan for a revised pay system and furnish the subcommittee with cost estimates to put the restaurant employees on a basis more comparable with employees of similar Government establishments. As a result of the extended study we determined the additional costs to the restaurant would be about $134,000. This amount would include the recognition of length of service by applying a 5-year-stepincrease system similar to that in effect in the District of Columbia. We developed several alternatives which cost less, but because they do not accomplish the goals which we believe are desirable, we do not recommend that they be considered. Neither the chairman-nor the subcommittee on restaurants has had an opportunity to review our proposals. However, I believe we have furnished all the material and data which they have requested of us. EQUAL PAY FOR EQUAL WORK This $134,000 would remove inequities by adopting the principle of equal pay for equal work. A study of this type has never been conducted in the restaurant, and we have some duties which, if standardized, would be equivalent to another person's duties. The present salaries vary. This would adjust them to an equal level. Pay rates would also start at the $1.25 minimum hourly wage or higher if they are getting it now. No one would be cut. The program would recognize longevity, improve employee morale, and it would also give an opportunity to apply to the legislative branch the President's objective to achieve adequate up-to-date and fair-pay systems for all categories of Government personnel. It would facilitate the adoption of a 40-hour workweek, where you could minimize overtime and eliminate unneeded man-hours, Mr. Chairman. I do not know if that gives you a bird's eye picture of our plan, but I do not know since the subcommittee TOTAL PLAN COST Senator MONRONEY. This total plan would cost $134,000? Is that correct? Mr. BRADY. $134,154 a year. Senator MONRONEY. Every year? Mr. BRADY. Yes, sir. In addition to what the Architect has requested. Senator MONRONEY. You mean, in other words, we would double the deficit? Mr. BRADY. Yes, sir. Senator YOUNG. Have you made any calculations as to how much we would have to raise the price of the meals to make up these additional costs? Mr. BRADY. It is a difficult area, Senator, because you could not increase the price of everything. You would have to center on certain products, certain meals, and this is one of the duties that we think the food comptroller should have. Senator PROXMIRE. Why couldn't you just make a proportional increase to take care of it? If this is a 20-percent increase in your costs or a 50 percent, make a corresponding increase in the price of meals. Why wouldn't that bring in whatever you need. Your only revenue is from what you charge for meals, is it not? Mr. BRADY. And the appropriation. Senator PROXMIRE. And the appropriation. Senator MONRONEY. We are not supposed to be appropriating. This is always to pick up a deficit, the part-time operation of the cafeterias. Of course, it is hard to make money on a one-meal service, which is the main bulge of income, but it seems like the more we sell the more we go in the hole. Senator YOUNG. I think that often when the public criticize us they are not justified in doing so. But this is one case where they certainly would be entitled to severely criticize us. If on our salaries and the salaries of our employees, we cannot run a restaurant and pay the restaurant employees a decent salary, we ought to do something about it or let someone else handle the business. COST OF MEALS Senator PROXMIRE. I wonder if they can get us an analysis from another standpoint, which would be available, or maybe it would be too much work, but could you compare the cost of a similar meal here and at a commercial establishment outside? You see, we could say we are subsidizing Senators because we have an appropriation to make. I think the chairman is right when he says we cannot compete very well because we are not open for dinner or for breakfast, more expensive meals. But I think you can argue that the subsidy is Mr. BRADY. We can make an attempt at it, at least, Senator. Mr. BRADY. Not only that, but the quantity is quite a factor here. I think the portions served here are larger than those normally served outside. Senator PROXMIRE. It is a matter of convenience for the public in a sense in that we are more available to them and more available to our work than if we had to go downtown and take an hour and a half for lunch. Senator YOUNG. The public cannot understand why, with the big salary increase, we cannot pay for the cost of our meals. FACILITIES FOR THE PUBLIC Mr. ROOF. You serve the public too. About half of your facilities are given over to the public. Senator MONRONEY. I think more than that in the public dining rooms. Mr. ROOF. We had a meal count last year of 1,450,000. You know this would include a large volume of visitors. Senator YOUNG. Are any of the people at the Capitol complaining about the prices they pay for meals? I have never heard any complaints. It seems to me that they pay less here than they would for comparable food elsewhere. SUBSIDIZED FOOD OPERATIONS Mr. GEARY. I would like to make one comment, Senator, on the comparative cost of meals. The standard for judgment of meal prices generally, both outside and commercial operations and in subsidized operations of the various kinds, is the ratio of the food costs to the total sales of food. The food costs of the Senate restaurant for the past fiscal year have been maintained at a very consistent level, and that ratio was comparable to outside commercial operations of the same kind, and is substantially better than the cost ratio of subsidized operations which might be compared with the operation of the Senate restaurant. Subsidized food operations are very common in industry, particularly where in-plant feeding is provided as a device to keep factory and other personnel in the plant, and to provide a reasonably good meal at a fair price. FOOD COST RATIOS Our food cost ratios for this year to date for the overall operations for various months have been 44.1, 46.7, 45, 45.7, and 43.9 percent. Beginning in January, because of the increased volume which always has a beneficial effect on food costs, they have been reduced to 41, 41.6, 42.4, and 43.1 percent. Now, these figures simply mean that for every dollar that you, as a Senator or any other guest in our restaurant spends, 41 cents of that dollar, or 42 cents, actually is the cost of food which he is served. This is considered a very good cost. The point I am trying to make is that if we increase the cost of meals what we are, in effect, doing is giving each Senator and each other guest of the restaurant less in food for his dollar. We are already giving him a fair amount of food for his dollar, and any reduction on that food cost would mean that he is actually paying more than he should for food. Senator YOUNG. Your argument does not impress me one bit. The important thing is that the taxpayer should not have to subsidize the cost of meals for visitors to the Capitol, Members of the Congress, or their employees. If it costs a little more for food or, if the costs run a little higher here than some other place, so what? Mr. ROOF. Senator, this has always been a subsidized proposition back through the years, you can go back through the history Senator YOUNG. It will never be subsidized by my vote. Mr. RooF. You have to lose money as long as you have the operations the way you do now, and geared to the operation of the Senate. You do not have any dinner, any regular dinner, service. You do not serve cocktails, and that is where the restaurant industry makes considerable money. PROPOSED INCREASE IN FOOD PRICES Senator YOUNG. Can't you charge a little more per meal? Mr. ROOF. You can charge more, but what will it do to the volume? Senator YOUNG. You would not lose any business. The business will run the same even if prices were increased somewhat. Mr. ROOF. You can charge a little more, but you remember the last time this was considered, in July 1963, we made the price increase, and we went up at that time on certain items which, I believe, averaged out to about 4 to 5 percent, and we did not lose business as a result of that change, but we estimated it would save only about $30,000. Senator YOUNG. You have a captive business, so an increase in price will not cause a loss of customers. Mr. RooF. There is a limit, we think, to how far you can change it. We feel Senator YOUNG. Nevertheless, I think that with a $30,000 salary, it is pretty hard to explain on the stump why in addition to that we have to subsidize ourselves, even though the subsidy does not amount to very much; a few extra dollars a month or a year that we would have to pay for our meals are a small price for more respect for the Congress. INCREASE REQUIRED TO OVERCOME DEFICIT Senator MONRONEY. What would be the approximate increase in your gross sales per day percentagewise to make up for the $134,000 increase in pay to bring it up to standard? Mr. Roor. If you want to take it overall, we have roughly $1 million volume. A 10-percent increase would be $100,000, but this is simply a mathematical computation. Senator MONRONEY. Ten percent would be the increase in the cost of the sales of the food, is that correct? Assuming you had the 10 |