Pp Back To School 2009 Financial

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A State of the Deparment speech for SNS employees

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Pp Back To School 2009 Financial

  1. 1. SNS FINANCIAL REPORT Action Plan 2009-10
  2. 2. HENRICO SNS 08-09 BUDGET <ul><li>WE LOST A WHOPPING </li></ul><ul><li>$333,579. </li></ul><ul><li>LAST YEAR… </li></ul>
  3. 3. HENRICO SNS 08-09 BUDGET <ul><li>Not good news… </li></ul><ul><li>Our Paid Lunches were down 11.3% or 197,000 from last year resulting in $611,200 in lost revenue. </li></ul>
  4. 4. HENRICO SNS 08-09 BUDGET <ul><li>Our ala carte sales were down $181,515. </li></ul>
  5. 5. HENRICO SNS 08-09 BUDGET <ul><li>Our food expenses were up 7.4%, or $562,802. </li></ul>
  6. 6. HENRICO SNS 08-09 BUDGET <ul><li>OUR TOTAL </li></ul><ul><li>LUNCHES WERE DOWN </li></ul><ul><li>1.2% = $50,387 </li></ul>
  7. 7. HENRICO SNS 08-09 BUDGET <ul><li>THIS YEAR WE HAVE TO PAY C&M UTILITIES AGAIN = approx. </li></ul><ul><li>$500,000. </li></ul>
  8. 8. HENRICO SNS 08-09 BUDGET <ul><li>SO HOW ‘BOUT SOME GOOD NEWS? </li></ul>
  9. 9. HENRICO SNS 08-09 BUDGET <ul><li>THERE AIN’T NONE!!!! </li></ul>
  10. 10. HENRICO SNS 08-09 BUDGET <ul><li>JUST KIDDING! </li></ul>
  11. 11. HENRICO SNS 08-09 BUDGET <ul><li>FREE AND REDUCED LUNCHES WERE UP 13.2%, RESULTING IN INCREASED REVENUE OF $601,097. </li></ul>
  12. 12. HENRICO SNS 08-09 BUDGET <ul><li>FREE AND REDUCED BREAKFASTS WERE UP 27.1%, RESULTING IN INCREASED REVENUE OF $266,991. </li></ul>
  13. 13. HENRICO SNS 08-09 BUDGET <ul><li>AND… </li></ul><ul><li>PAID BREAKFASTS WERE UP 3.6%, RESULTING IN INCREASED REVENUE OF $10,251. </li></ul>
  14. 14. HENRICO SNS 08-09 BUDGET <ul><li>VENDING WAS UP 30.3% to $187,860. </li></ul>
  15. 15. HENRICO SNS 08-09 BUDGET <ul><li>TOTAL REVENUE WAS UP AN AMAZING $1.6 MILLION !!!! </li></ul>
  16. 16. HENRICO SNS 08-09 BUDGET <ul><li>SO WHAT THE HECK HAPPENED?? </li></ul>
  17. 17. HENRICO SNS 08-09 BUDGET <ul><li>OUR EXPENSES WERE HIGHER THAN OUR INCOME… </li></ul>
  18. 18. HENRICO SNS 08-09 BUDGET <ul><li>DISCERNMENT </li></ul><ul><li>Discernment can be described as the ability to find the root cause of the matter, and it relies on intuition as well as rational thought. </li></ul><ul><li>Discover the root cause to the issue </li></ul><ul><li>Problem solve </li></ul><ul><li>Evaluate your options </li></ul><ul><li>Multiply your options </li></ul><ul><li>FINALLY -- REFLECT </li></ul>
  19. 19. HENRICO SNS 08-09 BUDGET <ul><li>SO WHAT WILL WE DO? </li></ul>
  20. 20. Objective: <ul><li>To define to all SNS employees that we have and are in the 2 nd year of our multi-year strategy to return SNS to financial stability by: </li></ul><ul><li>reducing operational expenses </li></ul><ul><li>further increasing revenue </li></ul>
  21. 21. Background Information <ul><li>HCPS took the high schools off of the NSLP in 1981 due to major budget cuts by the Reagan administration. </li></ul><ul><li>Henrico’s free/reduced population was less than 20%. </li></ul><ul><li>HS were had been unprofitable. </li></ul><ul><li>The HS quickly became very profitable by adding sodas & french fries, ala carte pricing , and dropping vegetables/fruits. </li></ul>
  22. 22. Background Information <ul><li>By 2006-07, the HCPS free/reduced population had grown to 40% due to a worsening economy, major increase of child obesity awareness, & the implementation of a new School Board wellness policy. </li></ul><ul><li>To better serve the needy child, the Superintendent recommended to the School Board to return our high schools to the NSLP for the 2007-08 school year. </li></ul>
  23. 23. Background Information <ul><li>SNS estimated that this change would cost over 1 million dollars in lost sales and to implement: </li></ul><ul><li>a) the elimination of very profitable soda sales </li></ul><ul><li>b) reduced vending sales </li></ul><ul><li>c) new costly and less popular nutrition standards in the wellness policy </li></ul><ul><li>d) higher food costs due to Type A lunch requirements </li></ul>
  24. 24. Background Information <ul><li>The point of sale system in the HS was different because it did not track Type A. The Elem and MS had a 10+ year-old cash register system making it necessary to change all cafeteria point of sale computers to one up-to-date system. </li></ul><ul><li>The upgrade cost almost $900,000. </li></ul><ul><li>NOTE: Other factors such as labor, equipment, etc did remain constant. </li></ul>
  25. 25. FINANCIAL IMPACT <ul><li>REVENUE (in 000s) </li></ul><ul><li>PRE-NSLP NSLP </li></ul><ul><li>04-05 05-06 06-07 07-08 08-09 </li></ul><ul><li>$13,612. $14,220. $14,915. $15,272. $16,937. </li></ul><ul><li>Going back on the NSLP clearly did not significantly increase SNS revenue (w/o factoring in student population growth or reimbursement rate increases). </li></ul>
  26. 26. FINANCIAL IMPACT <ul><li>VENDING </li></ul><ul><li>PRE-NSLP NSLP </li></ul><ul><li>03-04 04-05 05-06 06-07 07-08 08-09 </li></ul><ul><li>$610,495 $359,464 $343,842 $290,418 $144,194 $187,860 </li></ul><ul><li>Note: Changing all vending machines to diet sodas in 03-04 resulted in a whopping $251,000 reduction in vending sales for the 04-05 school year! </li></ul>
  27. 27. FINANCAL IMPACT <ul><li>FOOD COSTS </li></ul><ul><li>PRE-NSLP NSLP </li></ul><ul><li>04-05 05-06 06-07 07-08 08-09 </li></ul><ul><li>$5,162,330. $5,189,34. $5,892,896. $7,560,332. $8,123,134. </li></ul><ul><li>Example: MILK COSTS </li></ul><ul><li>PRE-NSLP NSLP </li></ul><ul><li>05-06 06-07 07-08 08-09 </li></ul><ul><li>$623,603 $680,159 $946,859 $933,991 </li></ul><ul><li>Total food costs increased significantly more over revenue since returning HS back to NSLP. </li></ul>
  28. 28. Cost Analysis <ul><li>Chart shows change in food costs & revenue for 2 years prior and 2 years after the HS implementation </li></ul><ul><li>07-08 food cost was also due to hyper-inflation of food, fuel costs and replacement of profitable soda sales w/higher cost beverage offerings. </li></ul><ul><li>08-09 (1 st year of plan) revenue increased at a greater rate than food cost. </li></ul>
  29. 29. FINANCAL CHANGE <ul><li>So what’s </li></ul><ul><li>the fix? </li></ul>
  30. 30. First- 0ur SNS Requirements: <ul><li>To continue to provide quality and nutritious foods that kids will actually eat- free or paid! </li></ul><ul><li>Keep the cost of lunch as low as possible </li></ul><ul><li>To provide outstanding customer service for students and school staff. </li></ul><ul><li>Be 100% self-supporting </li></ul>Financial Solvency Quality Nutrition Value Customer Service
  31. 31. With Balancing Our Needs <ul><li>Paid Child : Meal price, variety of choices, good ala carte offerings, & parents demanding nutrition. </li></ul><ul><li>Free/Reduced Child: Variety, short lines, nutrition, good ala carte offerings. </li></ul><ul><li>SNS: Lower food & labor costs while increasing revenue to offset HS NSLP implementation and become self-supportive. </li></ul>Free/Reduced Meals Vending Time Constraints Quality Food Nutrition Ed Nutrition Requirements Price of Lunch Variety Ala Carte Labor Food Costs Expenses
  32. 32. Budget Drivers: <ul><li>INCOME </li></ul><ul><li>1. Paid Lunches </li></ul><ul><li>2. Federal Reimbursements </li></ul><ul><li>3. Outside Sales (Catering & Vending) </li></ul><ul><li>4. Ala Carte Sales </li></ul><ul><li>EXPENSES </li></ul><ul><li>1. Payroll/benefits </li></ul><ul><li>2. Food/Supplies </li></ul><ul><li>3. Direct/Indirect Costs </li></ul><ul><li>HIDDEN: USDA FOODS! </li></ul>
  33. 33. THE NEXT STEP: <ul><li>2009-10 School Year Action Plan </li></ul>
  34. 34. THE NEXT STEP: <ul><li>2009-10 School Year Action Plan </li></ul><ul><li>The following actions will decrease operational costs by over $500,000: </li></ul>
  35. 35. THE NEXT STEP: <ul><li>2009-10 School Year Action Plan </li></ul><ul><li>Labor: </li></ul><ul><li>Reduce PPT hours by 5% </li></ul><ul><li>1. NO LAYOFFS. </li></ul><ul><li>2. New Labor Allotment Chart w/5% reduction. </li></ul><ul><li>3. Monitor monthly for labor hours. </li></ul><ul><li>4. Encourage cafes to increase counts for more labor hours. </li></ul><ul><li>5. No Overtime (except catering). </li></ul><ul><li>6. Saves approx. $150,000+. </li></ul>
  36. 36. THE NEXT STEP: <ul><li>2009-10 School Year Action Plan </li></ul><ul><li>Labor: </li></ul><ul><li>Not fill Dietitian-SNS Office position </li></ul><ul><li>1. Nutrition Ed program be reassigned to </li></ul><ul><li>Marketing Manager: CHO counts, </li></ul><ul><li>Menu Ingredients and Food Explorers </li></ul><ul><li>Programs. </li></ul><ul><li>2. Not fill Asst. Catering Manager. </li></ul><ul><li>3. Saves approx. $76,000. </li></ul>
  37. 37. THE NEXT STEP: <ul><li>2009-10 School Year Action Plan </li></ul><ul><li>Labor: </li></ul><ul><li>Reduce Manager Trainee Positions </li></ul><ul><li>1. With lower café turnover rate, not as </li></ul><ul><li>many manager trainees are needed. </li></ul><ul><li>2. Vending manager will help cover </li></ul><ul><li>schools. </li></ul><ul><li>3. Saves approx. $38,000, eventually over </li></ul><ul><li>$90,000. </li></ul>
  38. 38. THE NEXT STEP: <ul><li>2009-10 School Year Action Plan </li></ul><ul><li>Labor: </li></ul><ul><li>Revise Free Lunch Application Process </li></ul><ul><li>1. Change processing time of applications </li></ul><ul><li>from 2 to 3 days thus reducing </li></ul><ul><li>overtime. </li></ul><ul><li>2. Schedule retirees to work with </li></ul><ul><li>applications at the start of year. </li></ul><ul><li>3. Saves approx. $2,000. </li></ul>
  39. 39. Next Steps <ul><li>2009-10 School Year Action Plan </li></ul><ul><li>Food: </li></ul><ul><li>Revamp menus </li></ul><ul><li>1. Revamp menus to lower food cost without sacrificing service or menu quality. </li></ul><ul><li>2. Adjust menus to accommodate new labor. </li></ul><ul><li>3. Eliminate higher costing specialty Fruit 66/Slushies on fruit trays. </li></ul>
  40. 40. Next Steps <ul><li>2009-10 School Year Action Plan </li></ul><ul><li>Food: </li></ul><ul><li>Slightly Increase Ala Carte prices </li></ul><ul><li>1. All food items to be sold at a minimum of 40% food cost or more. </li></ul><ul><li>2. Only approved ala carte items will be allowed to be sold in schools. </li></ul>
  41. 41. Next Steps <ul><li>2009-10 School Year Action Plan </li></ul><ul><li>Food: </li></ul><ul><li>Stricter management of food inventories </li></ul><ul><li>1. Managers with high inventories/food cost will do a perpetual inventory until in acceptable range. </li></ul><ul><li>2. New, easier to read P & L’s for manager. </li></ul><ul><li>3. Additional inventory audits in cafeterias. </li></ul>
  42. 42. Next Steps <ul><li>2009-10 School Year Action Plan </li></ul><ul><li>Food: </li></ul><ul><li>Re-bid Stable Food Bid </li></ul><ul><li>1. Counter the 14.3% increase in food cost last school year. </li></ul><ul><li>2. Market is soft and expected to lower food costs by over 5%! </li></ul><ul><li>3. Should save approx. $184,000! </li></ul>
  43. 43. Next Steps <ul><li>2009-10 School Year Action Plan </li></ul><ul><li>Administration: </li></ul><ul><li>Suspend the 5 Star Program </li></ul><ul><li>1. Reassign 5 Star supervisor to schools reducing number of schools per supervisor to 16 to better serve you. </li></ul><ul><li>2. Revise # of Administrative Reviews & include evaluation items from 5 Star. </li></ul><ul><li>3. Increased unannounced visits from SNS: Oh no, Meal reviews from Tim, Shirley, Roni, and Bryan! </li></ul><ul><li>4. Will save over $51,000. </li></ul>
  44. 44. Next Steps <ul><li>2009-10 School Year Action Plan </li></ul><ul><li>Administration: </li></ul><ul><li>Suspend Employee Incentives </li></ul><ul><li>1. Suspend Savings Bonds for Perfect Attendance. </li></ul><ul><li>2. Suspend Employee Recruitment Program. </li></ul><ul><li>3. Will save a total of $23,000. </li></ul>
  45. 45. Next Steps <ul><li>2009-10 School Year Action Plan </li></ul><ul><li>Administration: </li></ul><ul><li>Start SNS Financial Oversight Committee </li></ul><ul><li>1. Includes managers on committee. </li></ul><ul><li>2. Reviews and determines inventory </li></ul><ul><li>levels/food costs for all schools. </li></ul><ul><li>3. Reviews new food items and prices. </li></ul>
  46. 46. Next Steps <ul><li>2009-10 School Year Action Plan </li></ul><ul><li>Administration: </li></ul><ul><li>Shift USDA Payments </li></ul><ul><li>1. Purchase USDA foods on an “as needed” and not pre-ordered system saving storage fees. </li></ul><ul><li>2. Shift more USDA commodities (such as cheese) to processors with rebates. </li></ul>
  47. 47. Next Steps <ul><li>2009-10 School Year Action Plan </li></ul><ul><li>Operations </li></ul><ul><li>Reduce Travel: </li></ul><ul><li>1. No SNS employee will go to conferences unless </li></ul><ul><li>necessary for recertification. </li></ul><ul><li>2. Employees can attend if pay own expenses. SNS will </li></ul><ul><li>provide work related leave. </li></ul><ul><li>3. DOES NOT AFFECT EMPLOYEE TRAVEL/MILEAGE </li></ul><ul><li>REIMBURSEMENT. </li></ul><ul><li>4. Should save approx. $7,000. </li></ul>
  48. 48. Next Steps <ul><li>2009-10 School Year Action Plan </li></ul><ul><li>Operations: </li></ul><ul><li>Reduce Uniforms for this year: </li></ul><ul><li>1. Only one uniform shirt/slacks will be </li></ul><ul><li>issued this year. </li></ul><ul><li>2. Only two uniforms for new employees. </li></ul><ul><li>3. Uniforms at our cost will be available for </li></ul><ul><li>purchase. </li></ul><ul><li>4. Reducing uniforms should save $15,000. </li></ul>
  49. 49. Next Steps <ul><li>2009-10 School Year Action Plan </li></ul><ul><li>Operations: </li></ul><ul><li>No Equipment Replacement this year </li></ul><ul><li>1. No replacement of large equipment unless needed for operation of cafeteria. </li></ul><ul><li>2. No small equipment unless approved by field supervisor. </li></ul><ul><li>3. Limited PM on any equipment. </li></ul><ul><li>4. Saves approx. $28,500. </li></ul>
  50. 50. Next Steps <ul><li>2009-10 School Year Action Plan </li></ul><ul><li>Operations: </li></ul><ul><li>Expand USDA Programs 1. Increase number of After School </li></ul><ul><li>Feeding sites. </li></ul><ul><li>2. Expand the Summer Feeding Program </li></ul><ul><li>which will increase revenue during the </li></ul><ul><li>summer. </li></ul><ul><li>3. Continue trial of selling USDA lunches to </li></ul><ul><li>outside organizations in Summer Feeding. </li></ul>
  51. 51. Why We Will Succeed! <ul><li>BECAUSE OF US- WE ARE AN INCREDIBLE CAFETERIA </li></ul><ul><li>TEAM! </li></ul>
  52. 52. Why We Will Succeed! <ul><li>Commitment Separates “Doers” </li></ul><ul><li>From The “Dreamers” </li></ul><ul><li>Commitment starts in the heart </li></ul><ul><li>Commitment is tested by action </li></ul><ul><li>Commitment opens the door to achievement </li></ul><ul><li>Four Types of People </li></ul><ul><li>1. Cop-outs </li></ul><ul><li>2. Holdouts </li></ul><ul><li>3. Dropouts </li></ul><ul><li>4. All-outs </li></ul>
  53. 53. Why We Will Succeed! <ul><li>1. NO PAY RAISES SAVED US OVER $500,000 ON OUR BUDGET! </li></ul>
  54. 54. Why We Will Succeed! <ul><li>2. Free and Reduced Counts are up: </li></ul><ul><li>Direct Certification increased this year from 6463 to 8511 students, a whopping 32% increase. This does NOT include any students who have to fill out applications. </li></ul><ul><li>3. Federal Reimbursement rates increased 10 cents: </li></ul><ul><li>Based on last year’s participation, revenue will increase by at least $260,000 dollars. </li></ul><ul><li>4. Paying Child: </li></ul><ul><li>For every NEW customer who participates every day for lunch our overall yearly revenue will increase by over $400! </li></ul><ul><li>5. Incredible SNS Cafeteria Teams: </li></ul><ul><li>With everyone working together, this can and will happen. Remember, all little efforts adds up!!!! </li></ul>

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