Presented by: The Rock on Café Coalition The Perfect Storm… A forecast for the Child Nutrition Programs in Broome & Tioga County Created for ASBO May 21,

Presented by: The Rock on Café Coalition

The Perfect Storm…The Perfect Storm…A forecast for theA forecast for the

Child Nutrition Programs in Child Nutrition Programs in Broome & Tioga CountyBroome & Tioga County

Created for ASBOCreated for ASBOMay 21, 2008May 21, 2008

Is the Child Nutrition Program Is the Child Nutrition Program about to be caught inabout to be caught in the the Perfect StormPerfect Storm??

Several factors have begun

to circulate in the Country

that have the potential to

converge upon the Child

Nutrition Program at one time.

If these factors collide with no

“rescue” efforts, the program’s

future will be in jeopardy.

Are conditions favorable for Are conditions favorable for the Perfect Storm?the Perfect Storm?

The Child Nutrition Program was the first “homeland

security” program; it was authorized during Post WW ll era with the intent of “safeguarding the well-being and security of the nation.”

The Child Nutrition Program thrived for nearly 6 decades under the guiding principle of “this is the right thing to do for students.”

Are conditions favorable for Are conditions favorable for the Perfect Storm?the Perfect Storm?

In the early 80s, the massive Federal budget cut threatened the program.

Nationwide, the program struggled to operate and began to expand the sale of “extra foods and beverages to students” to meet financial obligations; A la Carte meal service began to produce relief from the budget cuts.

Are conditions favorable for Are conditions favorable for the Perfect Storm?the Perfect Storm?

A la Carte program has thrived. Schools made money selling foods

and beverages to students. Students developed an appetite for

A la Carte/competitive foods. Schools developed an appetite

for revenues from the sale of

A la Carte/competitive foods. Stigma associated with free or reduced price meals Indirect costs have been assessed to the program

Over the past 20 years, there has been a cultural, nutritional, operational and financial

shift in priorities surrounding the Child Nutrition Program.

In many school districts, the philosophy of“It’s the right thing to do for children” had been replaced with the priority of

“How much revenue can be generated?”

Are conditions favorable for the Perfect Storm?

What are the factors that may What are the factors that may converge to create converge to create the Perfect Storm the Perfect Storm

in thein the Child Nutrition Program? Child Nutrition Program?

Factor 1:Factor 1:Operating costs are increasing.Operating costs are increasing.

Food Costs Fuel/Delivery Costs Service/maintenance Labor Costs Employee Benefits More Districts are being

charged indirect costs Other costs

On the School Lunch TrayOn the School Lunch Tray

Bread

Up 12%

Milk

Up 17%

Pasta

Up 13%

Fresh Produce

Up 15%

What Does it Cost to Prepare What Does it Cost to Prepare a School Meal?a School Meal?

Cost Type Cost

Food Costs $1.15

Non-Food Costs $0.14

Labor Costs $1.26

Indirect Costs $0.11

TOTAL COSTS $2.70

(national school lunch cost average: $2.60 to $3.10)

**Preliminary Figures**

Source: SNA Preliminary

Factor 2:Factor 2:Program revenues are decreasing.Program revenues are decreasing.

Federal Reimbursement, has not kept pace with cost of living.

Commodities/entitlement dollars remain limited. A la Carte Sales have plummeted as less healthful

foods and beverages have been replaced with more

healthful options. Adult Meal Sales are declining

as districts are required to increase

adult meal prices to ensure CN funds

are used only to benefit students.

Factor 3:Factor 3:Program revenues are decreasing.Program revenues are decreasing.

Catering (where permitted) generates minimal revenues

State Reimbursement has not seen an increase in 20 years

Enrollment Numbers are down leading to a smaller customer base

Vending and ala carte sales are decreasing

Factor 4 :Factor 4 :Student meal charges are on the rise.Student meal charges are on the rise.

Student meal charges have typically been absorbed by the cafeteria fund.

In the past, a considerable amount of student meal charges were the result of issues not related to hunger.

On average charges add up to $1,200 per building of unpaid charges add end of the school year.

Factor 5:Factor 5:Child Nutrition Administrators are Child Nutrition Administrators are

being held to an impossible standard.being held to an impossible standard. Example: Average cost to produce a school lunch is $2.70 Average cost to a paying student is $1.75

Free reimbursement falls short by $ .14 Reduced reimbursement falls short by $ .14 Paid rate falls short by $.64 Breakfast- Ave Food Cost alone approx. $1.00Where will the revenues to offset the losses come from?

Is the Perfect Storm in the forecast?Is the Perfect Storm in the forecast?

If the Child Nutrition Program continues on its current course…

Increased operating costs Increased indirect costs for many districts Revenue sources are limited Other Sales are decreasing Current market conditions/higher food costs No State reimbursement increase in over 20 years Federal reimbursement is not adequate to support

program costs Many Programs are already under-staffed

Unlike the Unlike the real real Perfect Storm, where noPerfect Storm, where noperson or thing could control or prevent it, person or thing could control or prevent it,

collectively we collectively we cancan minimize the damage of minimize the damage of this Perfect Storm for our programs!this Perfect Storm for our programs!

RecommendationsRecommendations

Continue to exercise due diligence to prevent the

Perfect Storm.

Examine costs (labor, food, other) and make

changes in areas that do not compromise the

quality of service or participation. Maximize reimbursable meals. Continue to improve our cooperative purchasing. Significant meal price increases will be needed. Charge policy that is consistent among schools.

We need to be Proactive!We need to be Proactive!

Let’s consider these factors as opportunities rather than obstacles.

We appreciate your time and support-to insure that Nutrition continues to play an integral part of our students educational process!

THANK YOU!

ROCK ON!!