The School Board approved raising lunch prices for the coming year and purchasing two new ovens to replace failing equipment at Londonderry Middle School. School District Business Administrator Peter Curro presented an update on food service numbers at the school board meeting on Tuesday, May 7. Curro reminded the board that the federal government has said the school district price for meals should reach an average of $2.59. “Federal law requires a gradual increase to reach federal reimbursement rates,” he said. “The federal target is $2.59, with a calculated minimum price increase of 10 cents. We anticipate an amendment which will give local school districts control of pricing once the program is ‘financially stable.’”
Curro said Londonderry high school lunch currently costs $1.95, middle school lunch is $1.90 and elementary school lunch is $1.60. Curro said the recommendation for FY 14 prices is $2.10 for the high school, $2 for the middle school and $1.75 for the elementary schools. Curro said that “if everything goes according to plan,” the program would earn $28,000 at the end of the year. Usingcurent projections, it would ake until FY 17 for the program to be considered financially stable. Curro explained that the benchmark of meals served per labor hours should be 18. He said that currently the high school was at 24 and Matthew Thornton Elementary School was at 21, but the middle school, North School and South School came in at just under at 16 hours per meal served, although North School now stands at or slightly above the 18 mark. Hesaidthatatthemiddle school, the use of an additional room adds labor costs. But if enrollment holds as projected, in the upcoming school year the middle school lunch program can stop using the Multi Purpose Room, and reduce labor by $10,000.
An additional benchmark of “Cost of Food as a Percentage of Revenue” should be at 48 percent, and Curro said the percentage was 51 percent.“Cost of Labor as Percentage of Revenue” was allocated at 50 percent and was currently at 40 percent. “As it has shown in the last few years, we are putting the money into the product and the quality of
the food,” Curro said. He noted that current total reimbursable meals for 2012 stand at 410,120, with a breakdown of 45,985 free and 13,724 reduced, and 350,311 paid lunches. The district also had 156,144 a la carte and second meals served.
The projected 2013 school year numbers are 375,853 total meals, with 50,198 free, 9,251 reduced, 316,404 paid, and a la carte meals and second meals at 172,729. Curro said Londonderry lunches are lower than Concord, Derry, Exeter and Hudson and higher than Manchester, Merrimack, Nashua, Rochester, Salem and Keene. Board member Leitha Reilly asked if the food service program was in the black or in the red. “The program this year will be in the black by about $2,000 to $4,000,” Curro responded.
She then asked why making a profit was not considered “financially stable.”
Curro said that to be financially stable, there must be a reserve. Board member John Robinson asked what the pricing would be to get to a zero profit and loss in the coming year. Curro said that this year was as close as he could come without showing a loss. Robinsonaskedifincreasing the price by 15 cents would yield a $28,000 profit and Curro said it would. Robinson then asked what would be the loss if there were no price increase, and Curro said it would be $70,000 to $75,000, with that money coming out of the operating budget. Robinson said that would be paid by every taxpayer rather than just the participants of the lunch program, and Curro said that it would be essentially a cut of the operating budget.
HesaidthatforFY14, no new equipment purchases were planned. In FY 15 they plan to purchase two double ovens for the middle school, a serving line for Matthew Thornton in FY 16, a serving line for the middle school in FY 17, and kitchen renovations at the high school in FY 18. But he raised the question of the purchase of two ovens for the middle school, which he said were failing and in need of repair on a regular basis. He said the 15 cent increase in meal pricing would allow for the purchase of two gas-fired ovens.
“Parts are getting increasingly hard to find, there’s more frequent need for repairs and when the ovens are down for repairs it causes a hardship on the kitchen staff to prepare the meals. And because the ovens are electric, it is causing a burden on the available power system,” Curro said.
Curro said they were “99 percent sure” that the ovensareoriginaltothe school, which would make them nearly 30 years old. Curro said new double ovens would require less pull on the electrical needs and might be less costly to run. They come with a $1,000 per oven rebate. He noted the cost increase in the school lunches would provide the $28,000 needed to purchase the ovens.
Board member John Laferriere asked if by taking the money out of the operating budget instead of the food service budget, food service would be stabilized a year earlier.
“Keep in mind that there is no food service budget so you would be essentially cutting the operating budget by the $28,000,” Curro said. Superintendent of Schools Nathan Greenberg explained there is essentially a firewall between food service and the operating budget, so even if parents are saving money on the purchase of a lunch, the district isn’t saving money because it is spending the general fund to support the lunch program.
“You’re saving the people who use the lunch program money but you’re not saving the district money,” Greenberg explained. The board voted unanimously to increase the high school lunch price by the recommended 15 cents and to increase the middle school and elementary schools by 10 cents each per federal guidelines. and to use the increases to purchase two gas ovens, with any shortfall taken from the operating budget.