Breakfast & Lunch Price Adjustment Report Board Report 5/19/09 Lodi Unified School District Prepared by: Douglas Barge Warren Sun

Breakfast & Lunch Price Adjustment

ReportBoard Report 5/19/09

LodiUnified School District

Prepared by: Douglas Barge Warren Sun


Table of Contents

2


Introduction Food Service operational costs increase at

an average rate of 4% - 6% each year.

The current paid meal prices do not cover the cost of the meal production. (Free and Reduced meals are covered largely by the federal and state reimbursement)

• We need to adjust current meal prices to reduce the projected revenue deficit.

• With a balanced meal price structure, Food Service will maintain the sustainable revenue growth required to Implement the mandated Wellness policy, meet the program needs, and generate funding to eliminate environmentally unfriendly Styrofoam trays in the district.3

LodiUnified School DistrictProgram Challenges

4


Continued Growth

5

Average Daily Lunch & Breakfast Count

9994 10,22711,429

13,269

14,845

16,96117,585

18,989 19,345

2156 2,164 2,3723,204

4,0474,944

5,5506,368

6,927

0

5000

10000

15000

20000

25000

2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009

Average Daily Lunch Count Average Daily Breakfast Count

With a limited market of 29,800 students, our biggest area for potential growth is in Breakfast Participation and Paid Lunch Participation


Future Program Needs

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• Increasing consumption of fresh fruits and vegetables

• Increasing the usage of fresh homemade products

• Expanding the Breakfast program• Expanding the Garden Bars to all school sites

to include transport sites.• Additional emphasis on teaching students to

make healthy choices, as per our Wellness Policy

• “Growing” Green, Living Healthy• Reducing environmental impact by eliminating

Styrofoam Trays,• Replacing old equipment with ‘greener’

equipment, • Increasing the amount of local fresh fruits and

vegetables purchased.


• Stimulate overall participation in both breakfast and lunch by providing a pricing structure that lowers the combined meal price.

• Increase paid lunch prices to reduce the deficit gap between paid prices and cost of production.

• A win-win situation for all parties. Food Service will see increases in participation and revenue leading to program improvements. Greater student meal participation will lead to better attendance and better overall achievement. 7

Strategy –Increasing Revenue through Entrepreneurship


Option 1Increase Elementary breakfast price by $0.25 ($1.00) and lunch by $0.50 ($2.00), increase Secondary breakfast by $0.25 ($1.50) and lunch price by $0.25 ($2.50).

Pros:

Reduces the deficit incurred by insufficient meal prices.

Provides the financial resources to offer a nutritious garden bar.

More equitable meal price structure which will help the long term success of the program.

Cons:

May negatively affect overall meal participation.

May negatively affect overall meal affordability.

May be difficult to retain customers due to price increases

Difficult economic time for parents

8


Lunch Price Comparison

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Option 2Provide Free breakfast for LUSD students. Increase lunch price $0.50 ($2.00) at Elementary and $0.25 ($2.50) at Secondary schools.

May negatively affect lunch participation.

May negatively affect lunch affordability.

There is a risk the deficit incurred by the meal price will remain.

Increased breakfast participation will positively impact student attendance and overall achievement

Reduces the deficit incurred by insufficient meal prices.

Provides the financial resources to offer a nutritious garden bar.

More equitable meal price structure which will help the long term success of the program.

Pros: Cons:

9

LodiUnified School DistrictCombined Meal Price

Comparison

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Recommendation Option #2 offers significant rewards across the board.

11

• Increased breakfast participation will have a very positive affect on student attendance and success.

• Increased breakfast participation and increased lunch prices will increase revenue an estimated $171,000 for the 2009-2010 school year.

• The additional revenue will allow the Food Service Department to pursue program improvements such as the elimination of the undesirable Styrofoam trays.


Conclusion

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In these hard economic times and with so many program cutbacks, it is especially important to give our students every advantage we can.

• Providing convenient, inexpensive and nutritious foods gives our students documented academic advantages. It gives us the opportunity to reinforce healthy eating habits.

• The combined price for breakfast and lunch gives parents some financial relief.

• The additional reimbursement from increased participation will provide opportunities to expand the Food Service programs, further benefiting the students.


Appendix

Lunch Current Proposed ChangeReduced $0.40 $0.40 $0.00

Elementary Paid $1.50 $2.00 $0.50 Secondary Paid $2.25 $2.50 $0.25

Breakfast Current Proposed ChangeReduced $0.30 $0.30 $0.30

Elementary Paid $0.75 $0.00 -$0.75 Secondary Paid $1.25 $0.00 -$1.25

2008-09 Projected Meal Count Lunch2,300,141 Free

452,420 Reduced $180,967.96 $180,967.96 $0.00698,882 Elementary Paid $1,048,323.13 $1,397,764.17 $349,441.04318,760 Secondary Paid $717,209.88 $796,899.86 $79,689.99

3,770,203 Total Lunch Participation $1,946,500.97 $2,375,632.00 $429,131.03

Breakfast 1,049,059 Free

131,413 Reduced $39,423.83 $0.00 -$39,423.83121,298 Elementary Paid $90,973.65 $0.00 -$90,973.65

67,372 Secondary Paid $84,215.18 $0.00 -$84,215.181,369,143 Total Breakfast Participation $214,612.66 $0.00 -$214,612.66

Net Change $2,161,113.62 $2,375,632.00 $214,518.37

Cash Revenue w/ Current

PriceCash Revenue

w/ Option 2

Total Cash Revenue Changes

Local Revenue Projection 2009-10 (Based on 2008-09 Meal Count)Option 2, Cash Revenue

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Lunch Current Proposed Change

Reduced $0.40 $0.40 $0.00 Elementary Paid $1.50 $2.00 $0.50 Secondary Paid $2.25 $2.50 $0.25

Breakfast Current Proposed Change

Reduced $0.30 $0.30 $0.30 Elementary Paid $0.75 $0.00 -$0.75 Secondary Paid $1.25 $0.00 -$1.25

10%

Lunch2,300,141 Free

407,178 Reduced $162,871.17 $162,871.17 $0.00628,994 Elementary Paid $943,490.82 $1,257,987.75 $314,496.94286,884 Secondary Paid $645,488.89 $717,209.88 $71,720.99

3,623,197 Total Lunch Participation $1,751,850.87 $2,138,068.80 $386,217.93

Breakfast 1,049,059 Free

131,413 Reduced $39,423.83 $0.00 -$39,423.83121,298 Elementary Paid $90,973.65 $0.00 -$90,973.65

67,372 Secondary Paid $84,215.18 $0.00 -$84,215.181,369,143 Total Breakfast Participation $214,612.66 $0.00 -$214,612.66

Net Change $1,966,463.53 $2,138,068.80 $171,605.27

Projected Breakfast Count with No Increase in Participation

Local Revenue Projection 2009-10 (with 10% Lunch Reduction)Option 2, Cash Revenue

Cash Revenue w/ Current

Price

Cash Revenue w/ Proposed

Price

Total Cash Revenue Changes

Projected Lunch Count with 10% Reduction in Lunch Participation

Appendix

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Appendix

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Proposed Meal Price Changes

Current 2009-10

Breakfast

K - 6th $0.75 $0.00

7-12th $1.25 $0.00

Adult $1.75 $1.75

Lunch

K - 6th $1.50 $2.00

7-12th $2.00 $2.50

Adult $2.75 $2.75

Documents

Breakfast & Lunch Price Adjustment Report Board Report 5/19/09 Lodi Unified School District Prepared by: Douglas Barge Warren Sun