pennsylvania association of school business...

2015-2016 Workshop Series

FOOD SERVICE BENCHMARKING AND BEST PRACTICES* January 13, 2016 Webcast (9:00 to 10:30 AM)

Scientific research has linked school meals and healthy diets to academic success. And with nearly 100,000 schools/institutions serving school lunches to 30.4 million students each day, the importance of running an efficient food service operation goes beyond just balancing the bottom line. For the first time, PASBO will conduct a food service benchmarking study to collect and quantify key measures. The data from the fall 2015 study will be presented and discussed in terms of how schools can use the data to compare your LEA to the universe of school districts in Pennsylvania, and create best practices by setting internal goals and objectives, and tracking and measuring progress toward these goals. You will learn about:

The key measures in food service management

Results of the 2015 PASBO Food Service Benchmarking Survey

Interpreting and using data as a management tool

Using data to compare your operation with other LEAs

Case studies of selected best practices

INTENDED AUDIENCE: Food Service Directors & Staff, Business Manager

SPEAKERS: Jeff Ammerman, Director of Member Assistance, PASBO Stephen Amore, Food Service Director, Twin Valley School District Krista Edinger, Food Service Director & Kelly Herr, Assistant Business Manager, Lebanon School District

ANNOUNCEMENTS: All participants must sign-in on the Webcast Attendance Form found at the back of the handout packet

for attendance/credit tracking. The site coordinator is asked to collect and submit information on every participant at your site. For credit to be given, forms must be returned to PASBO by January 20.

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You can submit a question at any time using the “Chat” function at the left side of your screen – type your question in the message box and click on “Enter” to send.

Please track your CEU credits for PASBO Professional Registration. (Professional Registration CEUs = 1)

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This program is being recorded to provide access to those not able to participate in the live program and serve as a review tool. Find information in your handout and check out the PASBO Store at http://www.pasbo.org/store_home.asp for other webcast titles.

Thank you for your participation!

Pennsylvania Association of School Business Officials

Mailing Address: Office Location:

P.O. Box 6993 2608 Market Place

Harrisburg, PA 17112-0993 Harrisburg, PA 17110

Telephone 717-540-9551 www.pasbo.org FAX 717-540-1796

PASBO Webcast Presentation 1

http://www.pasbo.org/store_home.asp

FOOD SERVICE BENCHMARKING AND BEST

PRACTICESJanuary 13, 2016 Webcast

‐ For Internet audio ‐ go to the “Start” tab and click “CONNECT”

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1

Pennsylvania Association of School Business Officials

Presenters

• Jeff Ammerman, Director of Member Assistance, PASBO

• Stephen Amore, Food Service Director, Twin Valley School District

• Krista J. Edinger, Food Service Director, Lebanon SD & St Theresa School

• Kelly E. Herr, Assistant Business Manager and Manager of Grants and Federal Programs, Lebanon School District

2


Presentation of Benchmarking Data

Jeff Ammerman, Director of Member Assistance, PASBO

[email protected]

3

Methodology

• Data survey sent to members

• Combined with State Data from AFR and Food Service reporting

• Summarize what is reported and explore areas for clarification

• 163 responses

• Thank You!

4


Free and Reduced Lunch Measure

• % of Free and Reduced Lunch students increasing

• 2005‐06: 28% Free, 7% Reduced

• 2010‐11: 33% Free, 6% Reduced

• 2014‐15: 44% Free, 4% Reduced

5

Community Eligibility Provision

• Allows for all students in a building or District that qualifies to receive free meals

• Adopted in PA as of 2014‐15

• Stats can be found on PDE link in handout

• Only 11 respondents indicated they used CEP in 2014‐15

• Likely to grow going forward

6


AFR Data

• Different interpretations of what survey data requested

• Reverted to using AFR Data

• Will clarify on next survey

7

Shift from Local Revenue to Federal Revenue

Statewide Food Service Data As Reported on the AFR

10‐11 11‐12 12‐13 13‐14

Local Revenue $339,092,939 $332,918,833 $310,155,599 $301,787,204

State Revenues $44,124,031 $42,421,640 $41,561,709 $44,283,219

Federal Revenue $373,154,622 $386,630,089 $400,843,472 $411,801,913

Total Revenue $756,371,592 $761,970,562 $752,560,780 $757,872,336

8


Shift to Federal Revenue

• 2010‐11: 45% Local, 49% Federal

• 2013‐14: 40% Local, 54% Federal

• Partially driven by increased number of eligible for free/reduced lunch

• Will likely continue to shift as more Districts move to CEP

9

Smart Business + Informed Decisions = Great Schools

Profit/LossStatewide Food Service Data As Reported on the AFR

10‐11 11‐12 12‐13 13‐14

Local Revenue $339,092,939 $332,918,833 $310,155,599 $301,787,204

State Revenue $44,124,031 $42,421,640 $41,561,709 $44,283,219

Federal Revenue $373,154,622 $386,630,089 $400,843,472 $411,801,913

Total Revenue $756,371,592 $761,970,562 $752,560,780 $757,872,336

Total Food Service Expenses without Depreciation $761,646,715 $757,624,200 $757,317,457 $760,660,024

Operating Profit/(Loss) before Depreciation and General Fund Transfers ($5,275,123) $4,346,362 ($4,756,677) ($2,787,688)

Depreciation $12,856,070 $12,684,720 $12,358,830 $12,510,103

Operating Profit/(Loss) after Depreciation but before General Fund Transfers ($18,131,193) ($8,338,358) ($17,115,507)

($15,297,791)

Transfers from General Fund $17,646,488 $10,623,773 $13,653,949 $14,426,194Profit/(Loss) After General Fund Transfers ($484,705) $2,285,415 ($3,461,558) ($871,597)

10


Different Measures of Profit and Loss

• Operational Profit/Loss: Total Revenue (excluding General Fund Transfers to Food Service Fund) minus Total Expenses (excluding Depreciation)

• Only 1 of last 4 years was that a positive number in aggregate

• Varies from $4 million profit to $5 million loss on $756 to $762 million of revenue

11

Profit/Loss

• When Depreciation is accounted for, all 4 years from 2010‐11 to 2013‐14 were unprofitable

• Districts make a transfer from General Fund to cover shortfall

• 145 District show profit before GF Transfer with 354 showing a loss

12


Other Measures

• The median per meal cost from survey participants was $3.90 and the per meal revenue was $3.76. Putting those together the median loss was 14 cents per meal.

• The median markup on A la Carte items was 45%.

13

Areas for Clarification

• Difficult to tell the level of “back charges” for utilities, garbage removal, custodial time, and other related cost

• Consider how you account for these items

• What may appear to be profitable may not be if these charges are not made

• May want to deal with a standard way of handling this going forward

14


Expenses by Type

• Using AFR data is challenging because of the mix of “in‐sourced” and outsourced operations

• Report labor costs in different objects

• Will show % on next slide, but is more of an academic exercise than a number than can be used to benchmark

15

Expenses by Category Using AFR Data

% of Total Expenses in 2013‐14

Salaries 25.4%

Benefits 12.8%

Food and Other Supplies 30.4%

Other Expenses 31.4%

100.0%

16


Better Data for In‐Sourced Operations

• While there were some challenges with the financial data gathered through the survey, used survey data from those who are “in‐sourced” to generate the table on next slide.

17

Expenses by Category Using Survey Data from “In‐sourced” operations

14‐15 Data from Survey Participants who Do Not Outsource

% of Total Expenses in 2014‐15

Salaries 30.9%Benefits 14.6%Food 45.1%Other Expenses 9.4%

100.0%

18


Survey Data by Type

• Labor cost and food cost just about equal accounting for more than 90% of all costs

19


Survey Data2014‐15 Paid Breakfast and Lunch Prices

Elementary Breakfast

MS Breakfast

High School

BreakfastElementary

LunchMS

Lunch

High School Lunch

Minimum $0.00 $0.00 $0.00 $0.00 $0.00 $0.00

Minimum (exclusive of CEP) $0.40 $0.40 $0.40 $1.05 $1.55 $1.55

Median $1.15 $1.25 $1.25 $2.20 $2.35 $2.40

Maximum $1.90 $2.15 $2.40 $2.95 $3.60 $4.25

20


Breakfast and Lunch Prices

• Median Breakfast prices in the $1.15 to $1.25 range

• Median Lunch prices in the $2.20 to $2.40

• Wide variations across the state

21


Pricing by Free Lunch %

Free Lunch %

Median Paid Elementary School

Breakfast Price

Median Paid

Middle School

Breakfast Price

Median Paid High School

Breakfast Price

Median Paid

Elementary School Lunch Price

Median Paid

Middle School Lunch Price

Median Paid High School Lunch Price

less than 25% $1.25 $1.35 $1.45 $2.40 $2.60 $2.75

25 to 40% $1.20 $1.25 $1.25 $2.20 $2.35 $2.40

40 to 50% $1.00 $1.10 $1.10 $2.00 $2.25 $2.25

greater than 50% $1.00 $0.85 $1.00 $1.95 $2.30 $2.30

22


Outsourcing• 42 out of 163 respondents indicated some sort of outsourcing

• Only 18 did not maintain some employees after outsourcing

• Not possible to draw many conclusions about the pros/cons of outsourcing from submitted data

• Will try to think of other methods in future surveys

23

Lunch Participation Rates

Elementary Lunch Participation Rate

Middle School Lunch

Participation Rate

High School Lunch

Participation Rate

Minimum 20% 13% 10%

Median 60% 60% 55%

Maximum 96% 87% 82%

24


Breakfast Participation Rates

Elementary Breakfast

Participation Rate

Middle School Breakfast

Participation Rate

High School Breakfast

Participation Rate

Minimum 2% 1% 1%

Median 20% 11% 11%

Maximum 96% 79% 79%

25

Participation Rates

• Participation rates varied greatly

• Median Lunch participation was in the 55 to 60% range

• Median Breakfast participation was in the 10 to 20% range

26



Participation Rates by Free Lunch Percentage

Free Lunch %

Median Elementary School

Breakfast Participation

%

Median Middle School


%

Median High School


%

Median Elementary School Lunch Participation

%

Median Middle School Lunch

Participation %

Median High School Lunch Participation

%

less than 25% 20% 15% 14% 52% 52% 51%

25 to 40% 20% 10% 9% 60% 60% 50%

40 to 50% 27% 17% 12% 66% 68% 61%

greater than 50% 41% 31% 24% 68% 72% 67%

27

Meals Per Labor Hour

• Median number is 12.6 meals per labor hour

• Need to review data submission process

• Range numbers did not to appear valid

28


Conclusions

• Difficult situation prior to new Federal Regs being implemented

• More difficult now

• Most Districts lose money on Food Service

• Figure out how to minimize the loss while providing a service to the children

• Review what is and is not reported

• Not likely to get easier any time soon

29

Twin Valley SD Case Study

Stephen AmoreFood Service DirectorTwin Valley School District

30



Knowing our Customers and establishing a Culture of Appreciation

for the various roles we have.

• Students and Parents• Administration, Teachers and Staff, Board Members, and Team Members.

• Community members

• Vendors, Brokers, and Sales Representatives• Federal, State, and local authorities

31


Knowing your Budget in relation to the Strategic Mission of the School.

• Need a vision and the budget will guide all areas of product and service delivery to our customer base.

• Use budget as a monthly reference point− Helps us make good decisions − Provides internal controls − Helps keep team members on same page− Use for benchmarking against historical performance. Focus on your run rate for each budget line and make adjustments early and often to meet the financial objectives.

32



Here are a few key roles that help us maintain profitability at Twin Valley

•Menu Building

• Procurement Habits/Order Guides/Food Storage and Inventory Control

• Planning the Food Production Cycle, Batch Cooking and Waste Reduction. Team Production Meetings.

• Scratch Cooking vs Box Cooking•When to Use Value Added Products

33


Menu Building• Operate a 4 week cycle Menu, that uses variables for seasonal items, cultural celebrations, and Holiday menu’s.− Build the menu starting with your K‐4 age group and work towards the MS and HS menus. It creates a more natural progression and enhanced comfort level for all age groups.

• Focus on incorporating a good balance of scratch/localized recipes and offering of fresh ingredients.

• Incorporating the occasional Chef Choice option, gives us the ability for creativity and monotony breaker for our customers, we only do this for HS and MS locations.

• Keep the menu Simple. What sounds good to us, may not relate well to the student. Talk to the students and staff often about the tastes and preferences of all grade levels.

• Know your menu costs for each center of the plate item.

34



Procurement • Most important area for having a positive financial impact.

• Keep a tight inventory and highly discourage any long term storage of products

• Vendor relationships‐work with your suppliers and food brokers‐ they are a great resource.

• Execution of Commodity Buying‐ shoot for 100 percent utilization‐ work with suppliers, brokers, and the food authorities. Have a plan of action well in advance and make sure it connects back to your menu building.

• Develop Par levels and using good discipline when ordering, keep organized with food storage habits, keep a good pulse on what food is currently in storage.

35


Manage your Food Production and employ batch cooking techniques

• Keeping historical documentation is proven to be an effective way to mitigate over‐ production and unnecessary ordering.

• Implement a daily production meeting with staff, review the menu and targets for each service line, use your forecast counts.

• Review results at the end of the day and use for the planning process the next time the menu comes around. Production workers have a tough job, keep them involved and it will guarantee have a pay back.

•Waste Reduction =$$$$$$$$$$

36



The Balancing Act of Scratch Cooking, Value added products,

and Maximizing Labor Efficiency.• Know the limitations of your crew and equipment, while being mindful the profitability that exists when we Scratch cook and Batch cook!

• There is a time and place for using value added. Learn your market reports and produce seasons. In the middle of winter, it makes good financial sense to revert to value added produce. Less likeliness for market fluctuations, less waste, and more time for staff members to do more scratch preparation, things like comfort foods during the doldrums of winter.

• We have had great results working on making our own vs opening a pre‐made box. We have found a favorable outcome from our customer base as well. Pizza, Quesadilla's, homemade soups, ect….

37


In closing here are a few of my takeaways.

• Focus on developing good purchasing habits, implement those order guides, par levels and emphasize having good utilization of the existing products that sit on the shelves.

• Focus on the reduction of waste by minimizing over‐production and keep those production sheets accurate and updated.

• Staff Involvement is paramount.• Get creative with some scratch cooking and keep your average portion costs in check.

• Most importantly, Know your customers, what they want, and treat them well so they keep coming back. Profitability does not exist without loyal patrons.

38


Lebanon SD Case Study

Krista J. EdingerFood Service DirectorLebanon SD & St Theresa School

Kelly E. HerrAssistant Business Manager andManager of Grants and Federal ProgramsLebanon School District

39


2014‐15 Food Service Profile

• Enrollment = 4882 students

• 5 Elementary Buildings, 1 Middle School, and 1 High School

• Eligibility Free 76%

Reduced 5%

Paid 19%

40



2014‐15 Food Service Profile

• Participation− Breakfast = 39.9%− Lunch = 82.2%

• Programs−National School Breakfast and Lunch Programs− Fresh Fruit and Vegetable Program− After School Snack Program− Summer Food Service Program

• Contracted Food Service Management− The Nutrition Group, since 2005.06

41


Why Contracted Food Service?

• Food Service Director retired with no transition plan− Lost all internal expertise in

• Meal counting & claiming• Financial reporting

• Completely manual operation with no computerization of either meal counting or financial reporting

• Needed quality management skills− Menu planning− Safety practices− Meal counting and financial reporting − Understand and implement changing Federal guidelines

• District & Contracted Employees− Transitioning to contracted employees as District employees leave or retire

42



Program Successes• Healthy, quality meals with a variety of choices

− Fresh fruits and vegetables

− Attractive to both students and staff

• Showcase Program− Recognized in the county and within The Nutrition Group

− Host school district and corporate events

• Grab and Go Breakfasts – new for 2015.16− Increased LMS participation by 400%

− Increased LHS participation by 100%

• Profitable Program since 2006.07

43


How Did We Do It?• Solid Management Team

− Director, Asst. Director, Chef and Food Safety Manager

− Training site for new Directors

− Taste testing site for The Nutrition Group

• Student Council Meetings & Consumer Input− Taste testing of new recipes

• Satellite Contracts− IU‐13

• Fun Promotions and Fresh Fruit and Vege Grant

44



How Did We Do It?• Profits Used to Enhance Program

− Equipment Purchases

− High Quality Products

• High Meal per Hour Production Rate− 19‐20 meals per productive hour

• Utilize Seasonal Produce & Government Commodities − Ensures the target average food cost per 10‐week cycle is achieved

• State and Federal Grants

45


Where are we going from here?

• CEP Participant for 2015.16−High Percentage of identified students = 100% of meals reimbursed at the Federal Free rate

−Elimination of costs associated with the processing of free/reduced applications

• Planning cafeteria renovations at LMS to be paid from Food Service profits

46


• Send text questions using the “Chat” function at the left side of your screen.

• Type message in box and click “Enter” to send.

Time for Questions

47

Thank you for your participation!

REMINDER: Webcast sites are asked to have every participant sign‐in on the Attendance Form and return to the PASBO Office for attendance and credit purposes.

Forms must be received by January 20.

48


Join us for these upcoming programs:

• RECRUITING AND RETAINING SUBSTITUTES ‐ January 22/Webcast

• FOOD SERVICE PROCUREMENT* ‐ January 26/Webcast

• APPLICATIONS IN DATA MANAGEMENT ‐ February 1/Online

• TEN THOUSAND VIEW OF MEDICAL ACCESS ‐ February 4/Webcast

• CONTRACTING FOOD SERVICE ‐ February 9/Webcast

• COMMONWEALTH BUDGET SEMINAR ‐ February 11/ Monroeville; February 12/Grantville; February 16/Webcast

• IT’S YOUR MONEY: MAXIMIZING TRANSPORTATION REIMBURSEMENT* ‐ February 18/Webcast

For info, visit www.pasbo.org/workshops

49


FOOD SERVICE PROCUREMENT REQUIREMENTS AND BEST PRACTICES* January 26, 2016 Webcast (9:00 – 10:30 am) Using proper procurement procedures is not only necessary to comply with federal and state regulations, but it is essential to operating a financially solvent school food service operation. Providing nutritious meals to school children requires an understanding of how to best perform responsibilities in the area of the school meals program procurement, particularly the requirement for free and open competition. During this presentation we will review required procurement practices whether purchasing equipment, food, or services.

50

CONTRACTING FOOD SERVICE: WHEN TO CONSIDER, OPTIONS, AND THE CONTRACTING PROCESS*February 9, 2016 Webcast (9:00 to 10:45 AM)The process of determining if outsourcing is right for your school food service operation is not a simple one. The question begins with an accurate financial picture of your self‐operation so you are able to compare measures and evaluate options. This webcast will overview all the options you have for outsourcing different aspects of your food service operation, as well as take an in‐depth look at the Request for Proposal (RFP) process to ensure that all costs are considered, and that any proposal meets federal and state regulations. Discussion will also include managing a contract once it is in place.


FOOD SERVICE BENCHMARKING AND BEST PRACTICES Webcast Recording & Benchmarking Report Order Form

Scientific research has linked school meals and healthy diets to academic success. And with nearly 100,000 schools/institutions serving school lunches to 30.4 million students each day, the importance of running an efficient food service operation goes beyond just balancing the bottom line. For the first time, PASBO will conduct a food service benchmarking study to collect and quantify key measures. The data from the fall 2015 study was presented and discussed in terms of how schools can use the data to compare your LEA to the universe of school districts in Pennsylvania, and create best practices. You will learn about:

• The key measures in food service management • Results of the 2015 PASBO Food Service Benchmarking Survey • Interpreting and using data as a management tool • Using data to compare your operation with other LEAs • Case studies of selected best practices

A recording of the Webcast Program and the Benchmarking Report will be available for download approximately two weeks after program date. Fill out and send your order form to PASBO today!

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(If tax ID is not provided, add 6% sales tax to your order below)

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Check out other available webcast recordings at http://www.pasbo.org/pasbostore.asp

SPECIAL PRICE FOR WEBCAST PARTICIPANTS – January 27 Deadline! (You must order by January 27 and use this form to get the special price.)

School districts that participated in the webcast can purchase the recording for a $10 processing fee. (Survey respondent discount and non-member fee was applied at time of registration.)


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