7 Habits of Highly Effective SNS Departments

by Dana Woldow

As school districts scramble to address what is projected to be the most painful budget cuts in memory, Student Nutrition departments are coming in for increased scrutiny, because unlike most other departments, they do have the potential to bring in more money than they spend. Some school districts, such as Hayward Unified and Oakland, operate their Student Nutrition Services (SNS) department in the black, although many others, like San Francisco, lose money. A combination of factors including low reimbursement for subsidized meals; a cutoff for qualification for reimbursable meals which excludes many SF children whose families are nonetheless very low income, given our high cost of living; higher labor costs than anywhere else in California; and aging infrastructure are just some of the factors which drive our SNS into the red. In San Francisco, SNS staff have been studying how other districts run their food service operations, especially nearby districts which break even or run at a profit. Some factors profitable districts have in common:

1. No a la carte lunch lines

Long ago, school cafeterias offered only a hot lunch choice (called the mainline), take it or leave it. Students who didn’t want the mainline meal brought a bag lunch from home. Over time, junk food and snacks proliferated in the marketplace, and the lobbying power of the food companies which produced them targeted the federal government. Pressure was put on the USDA to encourage schools to provide a second kind of meal service, the a la carte option, which tempted students to spend their lunch money on soda, candy, French fries, or chips.

Eventually, the rising obesity crisis resulted in a backlash against this kind of food being sold in schools; the movement reached critical mass in San Francisco in January 2003 when the Board of Education passed a resolution to remove soda and junk food from schools and replace it with healthier choices. A la carte operations in SFUSD now offer soups, salads, deli sandwiches, lowfat-cheese pizza, and other popular student-requested choices, not junky snacks.

The belief has been that these additional sales would help boost revenues for SNS, and underwrite the cost of the woefully under funded mainline. However, the flip side is that students who might otherwise choose to eat the mainline hot lunch are instead lured to the a la carte to spend their money.

Does the a la carte line still underwrite the cost of the mainline? As it turns out, not so much. As labor and benefit costs have gone through the roof, the extra labor required to run two competing food operations eats up an increasing share of the a la carte dollar. Combined with food prices which have spiraled out of control in the past 2 years, and the reluctance of students to support price increases for a la carte choices, the result is a la carte has become more expensive to operate than is justified by the revenue it brings in.

Financially stable SNS departments have eliminated a la carte sales. Students are offered several choices within the mainline menu, but all of the choices are the same for all students, whether they are qualified for free meals or paying cash. Nearly all SFUSD middle and high schools still offer a la carte sales in addition to mainline.

2. All closed campuses

The necessary corollary to eliminating a la carte sales is closing campuses so that students do not have the option of leaving to buy lunch elsewhere. Financially successful districts like Hayward Unified have closed campus at all middle and high schools. In San Francisco, four high schools including 3 of the largest (Lowell, Lincoln, Washington, and the smaller SOTA/The Academy) have completely open campus for all students at lunchtime. Several other schools including Balboa and Galileo, have partially open campus which allows certain students (for example, seniors with a designated GPA) to leave campus for lunch a few days a week.

3. Only qualified students eat free

At the start of the school year, all families are asked to fill out a meal application form to qualify their children to receive free breakfast and lunch; families on government assistance qualify even without the form. Although 53% of SFUSD students qualified for free meals this year, many more are believed to be low income, just not low enough to make the cutoff for qualification (about $38,200 a year for a family of 2 adults and 2 children.) Because many studies show that hungry students cannot learn the way their well-fed classmates can, students coming through the lunch line with no money to pay for their meal, and unqualified for free meals, are fed and SNS absorbs the loss. Over time, some families have stopped filling out the form because their child will be fed anyway. Other families dutifully give their child $2 for lunch, but the students themselves figure out that they can pocket the money, get a free lunch, and have $2 to spend after school. Losses from feeding students with no money have mushroomed from about $350,000 per year in 2003-04, to an estimated $800,000 or more for the current school year.

In districts with solvent SNS departments, students with no money are fed only three times at district expense; after that, they are turned away and allowed to go hungry. Occasionally a district will provide a package of saltines or small bowl of cold cereal, but rising food costs have led most to abandon even the “meal of shame” (cheese sandwich and milk) which many used to offer to penniless students. Most commonly, nothing at all is provided after the initial three free meals; this is policy in Oakland and Hayward. This has the effect of weeding out those “freeloading” students who are trying to hoard their lunch money, and also those who might otherwise not bother to fill out the meal form. Schools with Principals who insist that students be fed even without money are billed for the cost of those meals.

4. School staff are held responsible

Most school districts use lunch cards, often in combination with a computerized Point of Sale (POS) system, to record the number of meals eligible for government reimbursement. Effective school districts ensure that cards are distributed at the start of school and are used consistently, so that every eligible meal will be paid for by the government. Schools are billed for cash shortages which occur when meal cards are not used properly. In San Francisco, some Principals think meal cards stigmatize students and refuse to distribute them. Others, trying to rush students through the lunch line, set up cafeteria procedures which preclude the use of cards. Even Principals who are otherwise supportive often mistakenly believe that “everyone eats free” for the first 6 weeks of school. Without proper use of meal cards, thousands of meals are served without the possibility of collecting even a penny.

Effective school districts enforce strict policies requiring teachers to notify the cafeteria in advance if their class will be off campus at lunchtime, so that the cafeteria staff can adjust the number of meals they expect to serve. This reduces waste and saves money; teachers can also request bag lunches for their students qualified for free meals, which benefits the student by providing a field trip lunch, and benefits SNS by allowing reimbursement to be collected. Schools are billed for the cost of wasted school meals. SFUSD teachers are supposed to notify their cafeteria in advance of a field trip, but many say they have never been informed of this rule by their Principal, or of the availability of bag lunches for qualified students.

Federally subsidized meal programs are intended to benefit students, not adults. Adults are never allowed to eat free in the solvent cafeterias. In the SFUSD, adults are supposed to pay, but there is a widespread (and incorrect) belief, especially at the elementary level, that teachers and school staff get a free lunch. The school district cannot receive any government reimbursement for meals served to adults; when school staff insist on being fed for free, the full cost comes out of the SNS department budget.

5. No competitive sales

The SFUSD Wellness Policy sets limits on when parent or student groups can sell food at school; the main rule is that competitive sales are never allowed at lunchtime (the only exception being high schools which have in the past been allowed a few days to sell at lunch during school festivals.) Prior to the Wellness Policy, there were high schools which ran student-operated competitive sales of pizza, or Chinese food, or chips and soda, every single day at lunchtime. Needless to say, such sales, while lucrative for student groups, wreaked havoc with the cafeteria’s lunchtime business.

In school districts with solvent student nutrition departments, these sales are absolutely prohibited. In San Francisco, unauthorized sales continue to pop up at middle and high schools, and often it is left to SNS to initiate action to end them.

6. Administration supports SNS department

The natural corollary to having rules prohibiting competitive sales is that the district administration must enforce the rules. Districts like Oakland and Hayward support their nutrition departments in enforcing ‘no competitive sales’ policies; Oakland’s acting assistant director has said that if she hears of a school doing a competitive sale, she makes one phone call and the sale is stopped. While no district is ever likely to be able to completely eliminate competitive sales, support from central district administration is key to getting this under control. Within the SFUSD, enforcement has been sporadic at best; some Principals do a good job of monitoring their schools to eliminate competitive sales, while others encourage such sales.

7. Low labor costs

Districts with Student Nutrition Departments running in the black all have lower labor costs than SFUSD. This is not to say that SFUSD should pay their workers less, as it is expensive to live here, but rather to point out that lower wages are a contributing factor to fiscal solvency. The acting assistant director of Oakland’s department indicated that beginning workers in Oakland earn $8-$9 per hour; in SF, beginning caf workers make $16.28 per hour.

Moving San Francisco’s school food operation from its current deficit (expected to be about $1.5 million in 07-08) to a break even status will require some very hard choices, which historically SFUSD has been unwilling to make. Eliminating a la carte sales is likely to be unpopular with students, and will not be successful unless accompanied by a closure of all school campuses. Campus closure may require a second lunch period for larger high schools. While unpopular, it was demonstrated that this is not impossible when Lincoln principal Ron Pang ordered his campus closed for a period of several weeks in spring 2007, in reaction to complaints from neighbors that Lincoln students were leaving garbage from their off campuses lunches throughout the neighborhood. During the several weeks that Lincoln operated a closed campus, a second lunch period was in operation and cafeteria revenues soared.

It seems unlikely that SF’s progressive majority on the Board of Education would support turning away hungry students from the lunch line, but an increased effort to get families to fill out the meal application form at the start of the year could qualify more of these students for free meals. Mandatory use of lunch cards for all students, as required by federal meal program policy, should also be enforced at all schools at all times, so that reimbursement for every qualified meal can be claimed. These two steps, which cost nothing, could help reduce the amount of money lost to meals served to unqualified students. It is unrealistic to hold up the example of other solvent districts without acknowledging their draconian policy of allowing students to go hungry at school, and the financial toll the “No Child Left Hungry” policy exacts in SF.

Labor costs are the elephant in the room – everyone knows they are there, no one wants to talk about it. While it is not realistic to expect that SF could slash the amount it pays its workers, it must be acknowledged that this amount is far higher than what neighboring districts pay. Again, it is unreasonable to hold up the example of Hayward or Oakland as “solvent” operations that SFUSD should be emulating without mentioning their vastly lower labor costs.

Finally, it is time for district administrators to get serious about enforcing the SFUSD’s Wellness Policy ban on competitive sales, which drain money away from cafeterias, and insist that federal regulations around meal cards be followed to the letter. At a time when every dollar is precious to our students’ educational needs, there is just no excuse for lax administrators to turn a blind eye to catering trucks, or student (or teacher) run sales, or to expect that adults will be fed at the expense of our students. If SFUSD is ever to operate a school food service with minimal losses, someone will have to make the hard choices.