Some changes will be coming to school cafeterias next year.
For the past few years, Brown County Schools’ food service department’s budget has been running $150,000 to $200,000 in the negative. That affects the district’s bottom line as it continues to lose funding while student enrollment declines.
On May 16, the Brown County Schools Board of Trustees approved a contract with Compass Group USA Inc. to take over the food service department through its Chartwell division.
“This was not a decision that was made without a lot of work and thought and research,” said Superintendent Laura Hammack.
Under this contract, the school district will relinquish management of its food service program to Chartwell, which pledges to close the budget gap and have $25,000 in a reserve fund within the first year.
All current local employees will be rehired at their current rates of pay.
Food service management companies like Chartwell have larger purchasing power than a school district like Brown County would have. “They (Chartwell) are able to get the highest quality food for a much reduced price and the food is exciting, very tasty, fresh and healthy food,” Hammack said.
All food will be made from scratch, too. “This model of heating up things and serving, that’s not where food service is headed,” Hammack said.
Participation rates for school meals for both students and adults have been low, Hammack said.
“That has been a struggle, because we’re trying to get those food costs down, but we don’t have the purchasing power we need, so you end up not getting the best quality and not as many students are eating,” she said.
The hope is that as the schools serve meals with healthier, better tasting ingredients, more families will choose to buy lunch at school.
Teachers also will be able to use an app to pre-order an adult meal, like a salad. An app will also be available to students beginning in January 2020 for them to pre-order meals as well.
The company will also create “retail minded” cafeteria spaces. For example, at Brown County High School, there will be four different areas students can visit, like Grill Nation where they can pick up sandwiches or “2.mato” where they can find Italian dishes. Brown County Junior High School will have three different areas.
The contract also allows for a “student choice” program, where students and staff can sample different foods and vote on their favorites. The results will form future menu options, Hammack said.
Lunches currently cost $2.90 and breakfasts cost $1.80 for students. Students who qualify for reduced price meals pay 40 cents for lunch and 30 cents for breakfast.
Raising or lowering the price of school meals is out of the district’s and the food service management company’s control, Hammack said. The price is determined by a formula provided by the Indiana Department of Education.
“That has been our standard for years and years, to just hit that number. That would be the same model that a food service management company would use, because that’s the state regulation,” she said.
The school district receives a reimbursement for providing meals to students who qualify for free or reduced price lunch. That’s not something that’s widely understood, Hammack said. During a meeting with the food service employees, employees asked if the department was losing money because they were serving a higher percentage of free and reduced meals.
Districtwide, 53.2 percent of students qualify for free or reduced lunches.
“The perception was we aren’t getting those dollars. Those dollars are receipted back, so that the full cost of the price of lunch is realized,” Hammack said.
What about employees?
This contract allows for all food service department employees, including Food Service Director Jason Kirchhofer, to be hired by the new company, keeping their same wages and benefits. Kirchhofer will assume an assistant director role.
Under the contract, two additional food service employees and an on-site director of dining services also will be hired. Kirchhofer and the new on-site director will work as partners, Hammack said at the May 16 meeting.
Before the decision was made, about 12 food service employees attended the May 2 school board meeting to express their concerns about a company taking over the department.
Kathy Pitcher, cafeteria manager at Brown County Intermediate School cafeteria, spoke on behalf of the group. Pitcher and the other employees had spoken with one of the companies which visited the school. Their concerns included being rehired by the new company, especially those close to retirement age; sick and personal day compensation; and keeping their insurance.
Hammack said it was important to hear the concerns and suggestions from the employees throughout the process. “We have a massive deficit, and this is why we’re looking at it in a different way that would take care of our people. We’re only looking out for your best interest,” she said during the meeting.
Kirchhofer said that making sure the food service management company would provide benefits was a “huge deal” when going through the different bids. Kirchhofer served on the bid review committee.
“Some of the people we have on the staff have been here for many, many years. Their families depend on them to have the insurance,” he said.
“I think that they’re going to be very, very pleased that many of their concerns are being addressed,” Hammack said.
Employees will also receive paid holidays and sick days as they do now.
The contract with Compass Group USA will begin on July 1 and end on June 30, 2020, with up to four one-year renewals.
How did we get here?
As student enrollment across the district has declined, the number of food service employees has remained the same, and 13 of them receive full-time benefits. As of last fall, Brown County Schools counted 1,792 students enrolled in the district, a decrease of 86 students.
For comparison, the Metropolitan School District of Martinsville has more than 4,300 students, and nine of its food service staff receive benefits, including the food service director, Kirchhofer said.
“We had more students and lower insurance; now we have higher insurance and we have lower students. They have kind of flipped, which has kind of created this ripple effect,” he said.
Contracting with a food service management company was one of two strategies the district considered after looking at other districts.
The other strategy was be to lay off the entire food service team and rehire them as part-time employees, thus making them not eligible for benefits, which is one of the department’s biggest expenses.
This past school year, the food service department lost two employees through attrition — when they leave on their own accord and their position is not filled — and that helped to remedy the issue.
“We’re to a point now where we feel pretty good about the number of staff we have in place because the food service management companies almost all bid to keep the whole team,” Hammack said.
Any dollars from the purchase of school meals must be spent within the food service department only, with the goal of having the department be self-sustaining. But in recent years, that hasn’t been the case. Whenever the food service department had a deficit, it was absorbed by the general fund, which also pays the salaries of teachers and staff.
Aging and outdated equipment is another reason the budget is experiencing a deficit. The food service fund hasn’t had enough in it to cover those kinds of costs, like having a dishwasher burn out, she said.
When Hammack worked as the assistant superintendent for Beech Grove schools, the food service department budget there faced a similar deficit situation until it contracted with a food service management company.
“By the time I left, we had deployed the model for about three years. We had done a full kitchen remodel, new equipment. We have some pretty significant aging equipment, like dishwashers, freezers and things like that. You’re ultimately able to just have a balance that is super healthy and allows for this whole program to get back on its feet,” Hammack said.
Looking ahead to the next fiscal year, Hammack hopes to cut an additional $750,000 from the entire budget — including the operations and education funds — due to declining enrollment. She’s including the $200,000 deficit Chartwell plans to fix in that total, leaving about $550,000 worth of other cuts to make elsewhere.
