Increased Free & Reduced Eligibilities a Problem?

Sounds crazy doesn't it?  We have often said that districts with a high free and reduced price eligibility rate do better financially than other districts.  But is that still true?  Consider that in an Obama Presidency if taxes on corporations, businesses, and individuals are increased and checks are sent out to those paying no taxes, and his health plan is enacted, and if, and if, and if. Anyway, what if those who choose not to work, or choose to live off the government;  furthermore, what if those who get laid off from their jobs, or who can't find a job eventually end up on welfare, or at the very least having their children now eligible for a free or reduced price meal at school.  And as a result your free and reduced price eligibility increases by 100 or more can your program afford to serve them that free meal?  I don't know but you really need to know.  Let's assume for the sake of this posting that all the above does occur or occurs to some extent.

Currently the "feds" pay $2.57 for a free lunch and have increased reimbursements by about $.03 or $.04 each year.  Does anyone actually see money in the federal budget to increase that amount significantly higher next year?  I don't.  Anyway, let's assume again that next year's free lunch reimbursement is $2.60 per meal will that be enough to cover all of your costs?   

What is your average per meal cost of preparing and serving a meal (lunch and breakfast) at school?  Most districts that I visit today have that average cost in the $3.00 to $3.25 range.  Let's also assume that due to wellness, your ala carte and snack revenue is down from previous years as has occurred in so many districts, and your food brokers have also increased their costs (which has already happened).   Now what if your staff just negotiated a new 3 year contract providing for 4% per year increase.  How much has the cost of preparing and serving a lunch at your school increased?  How much do you project that it will increase next year.  

Now let's go back to the real possibility that your eligibles will increase due to the poor economic times and the effect of promised tax increases.  Will $2.60 in free lunch reimbursement be enough to cover the added cost of providing a free meal to the new program eligibles?  Let's not forget that as your free and reduced price eligibles increase, your paid population will decrease, so increasing selling prices will not generate enough revenue.

 

I know there are a lot of "ifs" and "assumptions" in this posting but we must be prepared for what may come to pass and I don't see the SNA, or any other group out there pushing for full cost reimbursement for our lunch and breakfast programs.  I also don't see anyone out there, really talking about the financial effect that unfunded "wellness plans" have had on our programs.  Lastly, just think what a local school tax increase to support your cafeteria would do in these economic times.

Who do you think is out there "drooling"?  The Food Service Management Company - the ones who have food costs much lower than your and the ones who will not be subject to those new labor contracts.  I could mount an argument that it is time to return to the sale of "snack foods" just to survive.  But that is the topic of another posting.

Be well

Frank

Difficult Times Ahead

My friends, having worked in this business for 30+ years, I am for the first time, worried about funding and jobs.  I never (until now) thought that the feds would ever cut or reduce Child Nutrition Funding, always referring to our profession as "depression proof".  But now I don't know.  (Aside, the feds did reduce funding a few years ago and "tightened up" eligibility requirements but it may be nothing compared to what may lie ahead.)

With the economy falling, promises of tax increases, and hand out checks for those who don't pay their "own way", where is this money to come from?  Entitlement programs will have to be cut, and taxes increased.  By increasing taxes, businesses will "cut back", staff will be laid off, and prices of the goods and services that we use will increase.  Increasing taxes on the big companies like SYSCO, will mean that they will pass those increases on to us in the form of higher costs.  We can't do the same thing, so where will our $$ come from?  

If all this comes to be, then our food costs will increase at a time when funding is being reduced, and more families qualify for free and reduced price meals; unfortunately, I don't see our federal and state funding revenues increasing.  So who will benefit?  The food service management company, that's who.  As I have always said, the "playing field" is not level, they have buying power that we will never have, and they do not have the local business office closely watching their operation of the program.  Business offices simply do not have the time to audit the company operating their food service program.

I had hoped to retire (at least partially) this year but now, I think that my approach and position on some of these issues may be needed more than ever.  

Anyway, if you read this, the decisions that you make in 2 weeks in the election booth may determine the future of  your Child Nutrition Program for years to come.

Some of the Worst of 2007-2008

Speeding up service at the principal's request Serving Pasta with Hands
Food getting cold waiting for the next class

A Senior High School Lunch - not very sophisticated Another H.S. lunch line

Below:  According to Menu "Hot Ham & Cheese on a Pita".  

Not really what I would imagine that menu would look like.

Tight Budgets & Snack Sales

As a Financial Management consultant, I often find myself at odds with the need to help a program make money and the quest for "wellness".  When I am in a district that is having financial difficulties, and a superintendent has confided in me that "the loss must stop", I must first seek ways for the program to make more money.  In doing so, I have no choice but to look at ways to first increase breakfast and lunch sales, and then ala Carte and snack sales.  Some managers and directors find my approach to be "anti-nutrition", but without a program whose operational costs are totally funded, there may be no program. 

My approach is simple, if I were still the VP of a Food Service Management Company, what would I do in this district to make money?  It's that simple.  But the solution often requires the previously mentioned paradigm change for the food service manager, building principals, and the business office.

In these consulting visits, I normally have very little problem with the status-quo at the elementary level, as it is the parent who normally decides if their elementary student will obtain lunch and/or breakfast at school, or bring it from home.  The situation is very different at the secondary level.  At this level, it is the student that decides what they want to eat, and where it will come from - home, the school cafeteria, or outside delivery.  It is these students who have the money to support the program.  However, all to often I find that the quest to "mandate good nutrition", impacts far more heavily on this segment of the student population.  The one group that has the money to spend.  Yet, we tell these same students many of whom drive to and from school with a cup of coffee, or Coke in their hand, smoking a cigarette, that they can't have a potato chip at lunch.

Unless and until the Federal, State, and local governments decide that the school cafeteria is an integral part of the total educational process, and decide to fully fund it as they do the classroom, custodial services, and busing operations, managers and directors must do what they can to ensure adequate revenue to the program.  If that means expanding vending and snack sales, so be it.  The alternative is to cut the operation to the "bone", contract it out to a Food Service Management Company, or incur ever increasing General Fund subsidies.

Welcome

I decided to begin this blog because I wanted a forum to speak to the hard working school food service staff who serve breakfast, lunch, and snacks to our children every day.

This year, as Federal, State, and local governments struggle to increase revenue, and cut spending, the Child Nutrition Programs operating in our schools must more than ever work harder to bring in more money.  More importantly they must do this at a time when many are "screaming" about obese children and the need to focus on "wellness" in the school cafeteria.

School cafeterias are not responsible for overweight children.  In actuality, it is the home, the parent who is never home, the parent who doesn't have time to cook dinner, the shopping mall, and the family who never sits down to a "family dinner" that is responsible.  Good nutrition must be learned, not mandated and that learning must begin in the home.

It is for these reasons that I have decided to start this blog, in an effort to educate the school food service workers of this country, and to better inform all interested parties of the "plight" of the school cafeteria.  For some, my thoughts and comments will require a paradigm change, for other, it will proved support for what they have been saying all along.

I welcome you to this blog and invite your comments, and questions on any aspect of School Food Service.