Cindy Hobbs Executive Director

Cindy HobbsExecutive Director

The Mission of Child Nutrition Servicesis to contribute to a successful academic experience and encourage a lifetime of healthy eating for each student by providing affordable meals that are nutritious,

appealing, and served by caring professionals in a pleasant environment.

CMS Child Nutrition ServicesOverview & Scope

• Responsible for providing breakfast, lunch, and snacks for students, including economically disadvantaged students who receive free or reduced-price meals

• 1,376 employees • serving 140,963 students• 153 full service cafeteria operations• > 32,000 breakfasts daily• > 83,000 lunches daily• > 9,500 snacks daily (ASEP)

• In addition to daily meal services, Child Nutrition provides other value-added services, such as:

• Catering for school functions• Chefs Move to Schools• Fresh Fruit and Vegetable Grant• Special Diet and Allergy Management• After School Program Snacks • Equipment Repairs

• Equipment Replacement• Data Request and Athletic Fee Waivers • Summer Feeding Program that delivers meals to community sponsored programs

• Support district goals and contribute to academic success of our students

• Compliance with nutrition standards and federal regulations

• Free and reduced meal application and verification process

• Procurement and inventory control• Nutrition education and special diets• Menu Planning and nutrient analysis• Marketing and promotions• Meal accountability• Staff development • Summer Food Service Program

CMS Child Nutrition ServicesBusiness Functions

CMS Child NutritionStaffing Overview

1,376 Dedicated Employees

Racially Diverse

52%

26%20%

2%0%

10%

20%

30%

40%

50%

60%

AfricanAmerican

Caucasian Hispanic All Other

Annual TurnoverCommitted to CMS

9 Years

• 1,340 School Based Cafeteria Employees• 36 Central Office Employees

4 Registered Dietitians 7 Certified Dietary Managers 3 Certified Chefs 31 Cafeteria Managers with BS degree All Cafeteria Managers are ServSafe Certified

• What it Means to Be An Enterprise Fund• Must create enough revenue to cover all cost of operation• Operation is profit and loss based • Service levels must be maintained to retain customer loyalty

• Federal Funding is based on number of meals served in each eligibility category

• Other sources of income are interest on savings, contributed capital from bonds, and transfer from a state block grant

• Financial Goals• Be self-supporting by operating at breakeven or better

• Return 100% of allowable indirect costs to the general fund• Indirect cost rate is determined by a state formula• Indirect cost rate for 2011-12 is 12.7870%• Indirect cost rate is applied to operating expenses excluding food and supplies•$3,799,241 paid to the CMS general fund for indirect cost for 2010-2011

• Keep meal prices as low as possible

CMS Child Nutrition ServicesOur Business Model: An Enterprise Fund

CMS Child Nutrition Services2011-12 Adopted Operating Budget

$66.5 Million

CMS Child Nutrition ServicesCost Incurred in Support of CMS Budget Cuts

SERVICE AMOUNT

Maintenance staff transferred to CN budget annually

$40,000

Equipment purchases for new construction projects for past 5 years

$950,000

Annual savings to district for warehouse salaries due to outsourcing delivery of food and moving one salary to CN budget

$200,000

Contribution to CMS Kronos time tracking project

$500,000

Indirect Cost Payment to District over past 5 yrs

$18,662,490

Food SafetyFood Safety

Cost EfficientCost Efficient

Consistently SatisfiesConsistently Satisfiesthe nutritional needs of our studentsthe nutritional needs of our students

CompliantCompliant

CMS Child Nutrition ServicesHow We Define and Measure High Quality Child Nutrition

Services That Support Academic Achievement




CompliantCompliant



Average Sanitation Score 100.01%




CompliantCompliant



$22 million fund balance100% of allowable indirect cost paid to district

Food Safety Food Safety



CompliantCompliant



Meals exceed USDA nutritional standards and all ala carte items comply with Institute of Medicine recommendations




CompliantCompliant



Coordinated Review Effort(CRE) Results: The results of the review indicate the Child Nutrition Program in Charlotte-Mecklenburg Schools is operating with maximum efficiency, effectiveness and accountability. The review also reflected a high level of nutritional, operational and financial integrity in the program.

Studies and Research Conducted• 2002 McKinsey Report• 2004 CMS & Charlotte Chamber of Commerce Efficiency and Effectiveness Review• 2006 inTEAM Associates• 2011 Coordinated Review Effort(CRE), NCDPIKey Learnings & Outcomes

All studies consistently assessed CMS Child Nutrition Services as an effective and efficient operation

All identified areas of opportunity have been addressed by integrating those improvements into our internal operation

Areas recommended for outsourcing including food delivery and temporary employees have been accomplished

CMS Child Nutrition ServicesStrategically Pursuing Opportunities

For Continuous Improvement Has Been A Part of Our Business Model

CMS Child Nutrition ServicesWe are currently supporting area businesses with nearly

$18M in Outsourced ServicesSERVICE AMOUNT

Meal application printing and distribution $50,000

Kitchen equipment repairs and maintenance $1, 045,000

Cash Register repairs and cabling $40,000

Purchase and delivery to schools of general groceries, milk, bread, ice cream, produce, snacks items, cleaning supplies by contracted vendors

$16,000,000

Temporary Employment Agency $450,000

Shredding Service $1500

Annual Contracted IT Services $30,000

CMS Child Nutrition ServicesGovernance

• Richard B. Russell National School Lunch Act• Child Nutrition Act of 1966• Public Law 108-265• Healthy, Hunger-Free Kids Act of 2010 • 7 CFR 210 National School Lunch Program• 7 CFR 220 School Breakfast Program• 7 CFR 245 Free and Reduced Price Eligibility• 7 CFR 250 Food Distribution Program• 7 CFR 3016 Uniform Administrative Requirements for Grants and

Cooperative Agreements to State and Local Governments• 7 CFR 3019 Uniform Administrative Requirements for Grants and

Agreements with Institutions of Higher Education, Hospitals and other Non-Profit Organizations

• FNS Instruction 113-2 Civil Rights Compliance and Enforcement - Nutrition Programs and Activities

CMS Child Nutrition ServicesGovernance

• OMB Circular A-87 Cost Principles for State, Local, and Indian Tribe Governments

• OMB Circular A-122 Cost Principles for Non-Profit Organizations• OMB Circular A-133 Audits of States, Local Governments,

and Non-Profit Organizations• NC General Statute 115C-264• NC State Board of Education Policy EEO-S-000• NC Nutrition Standards• 2007 Compliance Supplement• CMS BOE JLCG-R: Students With Food Allergies• CMS BOE JL-R: Student Wellness, adopted November 17, 2006

Federal RegulationsRequires that the School Food Authority:• remains responsible for the overall operation of the school nutrition programs• retains direct involvement in the operation of the food service • monitors the food service operation through periodic on-site visits• Remains responsible for determining eligibility for free and reduced price meals

NC General StatuteRequires that the School Food Authority:• operate the program on a nonprofit basis and that any earnings over and above the cost of operation shall be used

to reduce the cost of food, to serve better food, or to provide free or reduced price meals to indigent children.

NCDPI, Child Nutrition Services Requires that the School Food Authority:• Follows defined procedures included in their guidance document “Contracting with Food Service Management

Companies”

Other Considerations• All value-added services must be included in contract to avoid additional charges to the district• CMS must maintain an adequate staff to monitor each location at least once each quarter• The district must retain Signature Authority on the agreement to participate and claims for reimbursement• The district is responsible for management and accountability for USDA donated foods• The district must review all bids for food and supplies for responsiveness to the bid requirements and make final

awards• Contract will need approval of the State Agency• A reduction in operating cost will mean a reduction in indirect cost payments to the districts general fund

CMS Child Nutrition ServicesGoverned Parameters Which May Pose Potential Challenges

With Outsourcing Considerations

Committee Defined Selection Criteria Option 1: Option 2 Option 3 Option 4 Option 5

PEOPLE

MONEYSERVICE

RISK

MEASUREMENT

What This Is an informed preliminary assessment of the viability of some initial outsourcing options

What This IS NOT a recommended list of areas to outsource

Color Index likely will not satisfy criteria OR risk of failure to CMS is high could meet criteria but more information needed likely will satisfy criteria ? externally driven by bidding process

We Have Developed and Completed A Preliminary Outsourcing Assessment

Understanding the Assessment Tool

Overall assessment for that option

Assessment of each criteria by option

Example: Full Operational Outsourcing

Committee Defined Selection Criteria All Services

Management Services

All Services Pilot

PEOPLE result in CMS employee RIF, salary, benefits; affect significant # employees at scale

MONEYresult in return of ongoing net savings to CMS Op. Budget

MONEYresult in substantial savings at scale N/A

SERVICE impact on service levels

SERVICE impact on service quality

RISK result in significant risk to CMS

RISK ability to return the service in-house

MEASUREMENT can be measured/evaluated

CMS Child Nutrition Preliminary Outsourcing Assessment

Documents

Cindy Hobbs Executive Director