Supt. Sns Financial Powerpoint

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a quick elevator talk to the Supt. of Schools on status of SNS

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Supt. Sns Financial Powerpoint

  1. 1. SNS FINANCIAL PERFORMANCE ACTION PLAN 2009-10 Henrico School Nutrition Services August 2009
  2. 2. Objective: <ul><li>To define the 2 nd year of a multi-year strategy to return SNS to financial stability (after returning the high schools back to the NSLP) by: </li></ul><ul><li>reducing operational expenses </li></ul><ul><li>continue increasing revenue </li></ul>
  3. 3. Background Information: <ul><li>HCPS took its 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 previously 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>
  4. 4. 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 needy children, the Superintendent, with input from the Student Congress, recommended to the School Board to return the high schools back to the NSLP in the 2007-08 school year. </li></ul>
  5. 5. Background Information: <ul><li>SNS estimated losses of over a million dollars in revenues/expenses as a result of the changeover: </li></ul><ul><li>a) the elimination of profitable soda sales </li></ul><ul><li>b) a major reduction in vending sales </li></ul><ul><li>c) the implementation of new nutrition standards in the wellness policy which are more costly </li></ul><ul><li>d) additional food costs due to Type A lunch requirements </li></ul>
  6. 6. Background Information: <ul><li>The HS point of sale system had to be updated as those registers did not track Type A lunches. ES & MS had 10+ year old computers & software. All cafeterias were then upgraded. The replacement cost was almost $900,000. </li></ul><ul><li>Other factors such as labor, equipment, etc. did remain constant. </li></ul>
  7. 7. FINANCIAL IMPACT ON SNS: <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 when factoring out student population growth & federal reimbursement increases. </li></ul>
  8. 8. FINANCIAL IMPACT ON SNS: <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>$610,496 $359,464 $343,842 $290,418 $144,194 $187,860 </li></ul><ul><li>Note: Just changing vending to all diet sodas in 04-05 resulted in a whopping $251,000 reduction in vending revenue in 8 HS & 174 school days!!! </li></ul>
  9. 9. FINANCIAL IMPACT ON SNS: <ul><li>INCREASED FOOD COST </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 $5,189,340 $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>All Food Costs increased significantly more than revenue in returning the HS back to NSLP. </li></ul>
  10. 10. 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 & school staff. </li></ul><ul><li>Be 100% self-supporting </li></ul>Financial Solvency Quality Nutrition Value Customer Service
  11. 11. Balancing All Needs <ul><li>Paid Child : Low meal price, variety of choices, ala carte offerings, & higher USDA nutrition requirements. </li></ul><ul><li>Free/Reduced Child: Variety, short lines, nutrition, ala carte offerings. </li></ul><ul><li>SNS: Lower food & labor costs while increasing revenue to offset the HS NSLP implementation and remain 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
  12. 12. Cost Analysis <ul><li>Chart shows change in food costs & revenue for 2 years prior & 2 years after the HS implementation. </li></ul><ul><li>NOTE: 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>
  13. 13. THE NEXT STEP: <ul><li>2009-10 School Year Action Plan: </li></ul><ul><li>The following actions will decrease SNS operational costs by over $500,000. </li></ul>
  14. 14. THE NEXT STEP: <ul><li>2009-10 School Year Action Plan: </li></ul><ul><li>Labor </li></ul><ul><li>a) Reduce PPT labor hours by 5%. </li></ul><ul><li>b) Not fill SNS Office positions: Dietitian & Assistant Catering Manager. </li></ul><ul><li>c) Reduce 5 Manager Trainee Positions. </li></ul><ul><li>d) Revise Free Lunch Application Process to 3 days. </li></ul>
  15. 15. THE NEXT STEP: <ul><li>2009-10 School Year Action Plan: </li></ul><ul><li>Food </li></ul><ul><li>a.) Revamp menus. </li></ul><ul><li>b.) Increase ala carte prices. </li></ul><ul><li>c.) Apply stricter management control on inventories/food costs in cafeterias. </li></ul><ul><li>d.) Re-bid staple food contract to offset last year’s 14.3% price increase. </li></ul>
  16. 16. THE NEXT STEP: <ul><li>2009-10 School Year Action Plan: </li></ul><ul><li>Administration </li></ul><ul><li>a.) Suspend the 5 Star Program. </li></ul><ul><li>b.) Suspend two Employee Incentives: </li></ul><ul><li>Perfect Attendance & Job Referral. </li></ul><ul><li>c.) Start monthly P&L financial meetings. </li></ul><ul><li>d.) Shift USDA food processing </li></ul><ul><li>payment system. </li></ul>
  17. 17. THE NEXT STEP: <ul><li>2009-10 School Year Action Plan: </li></ul><ul><li>Operations </li></ul><ul><li>a.) Reduce SNS travel. </li></ul><ul><li>b.) Reduce issued uniforms. </li></ul><ul><li>c.) Suspend equipment replacement. </li></ul><ul><li>d.) Expand USDA Programs: After School </li></ul><ul><li>Snacks and Summer Feeding. </li></ul>

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