Presented by: The Rock on Café Coalition

1. The Perfect Storm…A forecast for the Child Nutrition Programs in Broome & Tioga County Created for ASBO May 21, 2008 Presented by: The Rock on Café Coalition

2. Is the Child Nutrition Program about to be caught in the Perfect 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.

3. Are conditions favorable for 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.”

4. Are conditions favorable for 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.

5. Are conditions favorable for 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

6. Are conditions favorable for the Perfect Storm? 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?”

7. What are the factors that may converge to create the Perfect Storm in the Child Nutrition Program?

8. Factor 1:Operating costs are increasing. • Food Costs • Fuel/Delivery Costs • Service/maintenance • Labor Costs • Employee Benefits • More Districts are being charged indirect costs • Other costs

9. On the School Lunch Tray Bread Up 12% Milk Up 17% Pasta Up 13% Fresh Produce Up 15%

10. What Does it Cost to Prepare a School Meal? Cost TypeCost 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

11. Factor 2: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.

12. Factor 3: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

13. Factor 4 :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.

14. Factor 5:Child Nutrition Administrators are 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. $1.00 Where will the revenues to offset the losses come from?

15. 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 Is the Perfect Storm in the forecast?

16. Unlike the real Perfect Storm, where noperson or thing could control or prevent it, collectively we can minimize the damage of this Perfect Storm for our programs!

17. 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. Recommendations

18. 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!! We need to be Proactive!