The number of low-income kids who qualify for free or subsidized school lunches has surged by 41 percent and now accounts for about 58 percent of the students in the district.
“I think that’s a reflection of what’s happening in the community,” as a result of the continuing economic downturn, said Assistant Superintendent for Business Services Bobette Sylvester at Monday’s school board meeting.
The surge in students who qualify for the federal anti-poverty program may have a silver lining —since the federal government will soon raise the rate and since the district generally makes a bigger profit on meals served to students in the program.
The program offers free lunches and breakfasts to students from families with up to 130 percent of a federal poverty-level income — which is about $22,000 for a family of four. Students from families with incomes about 185 percent of the poverty line can get reduced-cost meals, with a maximum charge of 40 cents per meal.
The number of students who qualified for the program rose from 991 last year to 1,300 this year, Sylvester reported.
The district contracts with SEDUCTO to provide the school lunches, but the food service company has struggled to break even.
Overall, the number of students buying their lunches or breakfasts at school has fallen, with most of that decline among students not in the school lunch program.
The decline has proven especially pronounced when it comes to the high-profit extras — like cookies, slushies and snacks. Revenue from sales of such items have fallen by about $279 a day — which will cost the district about $49,000 for the year.
In addition, the number of meals sold to adults has dropped by a worrisome 30 percent, reflecting a growing number of faculty, staff and volunteers that pack a lunch from home rather than spending the money in the cafeteria, said Sylvester.
The district and the food service company have worked to reduce costs to compensate for the dwindling revenue.
All told, the food service provider cut costs by about 46 cents per meal.
As a result, despite the big drop in revenue the district will likely end up with a deficit of $18,000 for the year — an improvement of about $1,000 over last year.
Sylvester said the contract with SEDUCTO requires the company to waive some management fees if the district runs a deficit in the program.
However, Sylvester said the district is anxious to keep the company happy, as evidenced by the agreement earlier this year to remove vending machines that effectively competed with the food service offerings.
Other food service companies “don’t want to come to Payson,” partly because the district historically hasn’t had as many students on the relatively profitable National School Lunch Program. Moreover, the contract requiring the company to waive some fees if the program runs a deficit isn’t common in other districts, she said.
“It’s always a challenge whether we can draw people up into our market.”
“Is there any kind of audit of their costs, or do we have to take their word for it?” asked board member Matthew Van Camp.
Sylvester responded that the district doesn’t audit the company’s books, but that she does track their spending and expenses through regular reports.
However, Superintendent Casey O’Brien said a promised rise in reimbursement rates for the National School Lunch Program offered hope that the bottom line for the food service budget will improve — especially in light of the steep rise in low-income students in the district.
The program nationally provides free or subsidized lunches and breakfasts to 31 million children, at a cost of nearly $10 billion.
The Obama administration last year pushed through a major increase in eligibility and in the rates paid to schools.
The changes also required districts to increase the number of fruits and vegetables and reduce the mix of high-fat foods.
The new rules also restricted the number of bake sales and other fund-raisers that raised money by selling candy, cake, brownies and other high-fat food.