Increased Free & Reduced Price Eligibility vs Cost of Preparing & Serving a Lunch

Currently unemployment nationwide is at its highest point in 60 years and it is estimated that the number will continue to grow in the year(s) to come.  As you know, families that are being impacted by unemployment immediately become eligible to receive a free or reduced price meal at school.  So my question, "will this increase have a positive or negative impact on your cafeteria budget?" 

Traditionally, every school food service director and Business Official hoped for an increase in free and reduced price eligibility, for with it came increased State and Federal Assistance and added revenues for struggling cafeteria budgets.  Although an increase in free and reduced price eligible students will result in increased Aide to the district, I am not sure (at least with respect to the cafeteria) that an increase in the number of eligible students will benefit the food services program financially.  Consider the following: 

1.    Currently each free and reduced price lunch generates $2.57 in Federal revenue for the program (plus whatever your State contributes). In New York State this amounts to approximately $2.63.  How does this amount compare with the fully accrued cost of preparing and serving a reimbursable lunch in your district?  At one time the difference was a positive number.  I am not sure that is true any more.  The increased cost of food, labor, and benefits has driven the full cost of preparing and serving a school lunch to $3.00 or more in some districts.  What is it in your siatrict?  Will your program benefit or lose money from an increase in free and reduced price students? 

2.    If we assume that an increase in the local unemployment rate will translate into an equivalent increase in free and reduced price applications, how will the increase impact your 2009-2010 cafeteria budget?  Will processing additional applications cost the program more time, and labor?  Will the added applications result in a greater operational loss on the program? 

3.     Recognizing that Wellness Plans have resulted in reduced revenues in many districts, and many States are planning additional restrictions on what can be sold in a school cafeteria, how will a disparity between the cost of preparing and serving a meal be balanced with reduced program revenue?  Specifically the loss that results from a decline in ala Carte and snack sales, combined with the possibility of a negative cost per meal versus the free and reduced price reimbursement rate?  Will your district subsidize the program, request voter approval for a subsidy, or consider other options (the food service management company (FSMC))? 

4.    Will newly eligible free and reduced price students participate, or will they feel embarrassed and choose not to participate?  If they do not participate, will this result in a drop in “paid lunch” revenue because of their family’s lack of money? 

5.    Will newly eligible free and reduced price families still have money for their child(ren) to spend on ala Carte, or snack items in the cafeteria? 

This issue is an important one and one that I do not hear being discussed by State Education officials, or addressed in this media, or by food service managers/directors.  I have committed myself to working with Child Nutrition Programs for over 30 years providing training, and technical assistance to districts (formerly) as a member of the State Education Department Child Nutrition Administrative team, and (currently) as a private consultant.  Please know that my intent in writing this article is not to be “self-serving”, rather that I want to see school food service programs that are intended to operate on a self-supporting basis succeed.  Moreover success may be predicated on the preparation of a realistic and accurately prepared 2009-2010 budget.   I also want programs to succeed because of:  

§       My belief that every program has the ability to operate on a self-sustaining basis.  Of course this often requires change, and often the change necessary requires a paradigm shift, and that involves making some difficult decisions. 

§     My commitment to helping districts retain a district operated program, which means keeping the food service management company out of school cafeterias.  While there is a time and a place for everything (including the FSMC), it is normally the hard working, dedicated food service staff (taxpayers and members of the school community) that is impacted when a management company enters a district. 

§       The fact that many of the state’s food service directors and managers are known to me, and they are hard working, caring members of the district’s total educational process.  Unfortunately, we are in very  difficult financial times and food service managers/directors do not make many of the decisions that impact so forcefully on the financial status of the program they manage. 

In closing, it is my hope that the issues I have brought forward here will be addressed in your cafeteria budget this year.  Perhaps more importantly it is my hope that they become an argument for increases in State Assistance to Child Nutrition Program, instead of the reductions that we have already seen. If not, the food services program could find itself operating at a significant loss next year placing the Business Office and the Board in the position of having to make some very difficult decisions.