Viewpoint: A New Tale of Two Cities

There is more to understanding what it costs to run a school meal program than demographics.

Two school districts are located less than 12 miles apart; they are of similar size, and have similar percentages of low income kids. Their school meal programs operate at the same number of school sites, serve the same number of lunches, and receive the same federal payment for meals served. Both programs are managed by experienced and well-respected nutrition department directors who have spent virtually their entire professional lives in food service. Since Program A is able to operate at break even, does it follow that Program B should also?

Case in Point: A recent study of San Francisco Unified School District's student nutrition department, commissioned by the SF Food Bank, stated "SFUSD and Oakland Unified [OUSD] had roughly the same revenues in 2010-11 -- $15M (not including SFUSD’s $2.7M loss), but Oakland operates at financial break even."

Perhaps comparisons are inevitable when districts of similar size are located so close to each other; but is it really a fair comparison, or more of a false analogy?

There is more to understanding what it costs to run a school meal program than demographics. There are labor costs, policies on allowing students to charge meals, whether the campuses are open or closed, and commodity programs—just a few of the many factors that can vary from district to district, or even from school to school, and which complicate comparisons.

To find out just how comparable Oakland and San Francisco really are, I asked the experts - OUSD's student nutrition director Jennifer LeBarre, and SFUSD's counterpart, Ed Wilkins.

Consider the labor environment

The most striking difference between OUSD and SFUSD is the cost of labor. In Oakland, cafeteria workers belong to the American Federation of State, County & Municipal Employees union (AFSCME); wages run from $9.65 to $11.71 an hour for regular employees, with substitute workers receiving $8.80 an hour.

In San Francisco, cafeteria workers are represented by the Service Employees International Union (SEIU); wages, reflecting SF's higher cost of living, range from $14.10-$27.71 per hour; substitute workers receive $14.10 per hour. Full benefits for those qualifying add about 44% in both districts.
The contract between AFSCME and OUSD allows the use of non union labor, including parent volunteers, for any shift of less than three hours. There is no such provision in the contract between SEIU and SFUSD. OUSD is also able to hire students 14 years of age and older. LeBarre told me, "We pay them minimum wage and they typically work for 1-1 1/2 hours. They serve, clean dishes, work the POS [electronic payment system], basically everything except cook."

In 2011-12, Oakland and San Francisco spent roughly similar percentages of their budget on labor and benefits. Labor and benefits represent about 43% of OUSD's nutrition department expenses. SFUSD spends about 36% on its own labor; about another 4% is included in the meal contract for warehouse labor (which includes labor for dividing up meals into individual school deliveries), according to SFUSD's Wilkins. That brings the SFUSD labor and benefits total to about 40% of expenditures.

The lower salaries in Oakland mean that even though labor costs represent similar portions of each district's expenditures, Oakland is getting far more hours of labor for its money. The additional hours enable Oakland to do more time-consuming scratch cooking, and more on site food assembly, than SFUSD can afford to do.

The impact of "no-pay" and open campus policies

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Every day, in every cafeteria in America, a few kids show up in the lunch line who are not qualified for free or reduced price lunch, but also do not have money to pay for their meal. Many school districts feed these kids something, although some offer only a "meal of shame" (for example, a cold cheese sandwich, or a bowl of cereal). Others allow students to charge at least a few meals, and then try to collect the outstanding balance from parents.

Official OUSD lunch policy states that students not qualified for free or reduced price meals may only "charge" a meal three times, after which they will be cut off until the family begins paying for meals. LeBarre explained that this policy, dating back to 2002, "is not always enforced and, quite frankly, is not what we want to do as a district. We are in the process of changing it." For the period from August 2011 through April 2012, OUSD's unpaid meal charges totaled about $87,000, she said.

In contrast, SFUSD has a long history of feeding every child who comes through the lunch line, regardless of ability to pay. In 2009, the SF Board of Education passed the "Feeding Every Hungry Child" policy, ensuring that all students are fed. However, this policy entails a cost. In the same period, August 2011 through April 2012, SFUSD's unpaid meal charges were well in excess of $300,000 accrding to SFUSD nutrition director Ed Wilkins.

As a supporter of feeding hungry kids, not embarrassing them with a meal of shame, I believe that SFUSD's policy is the right thing to do, and clearly OUSD's LeBarre would like to move in that direction too. But for 2011-12, the financial hit her department took for unpaid meals was only about 25% of SFUSD's loss.

Some people who attended school prior to the mid 1970's are surprised to learn that many high schools across America have an "open campus" policy that allows students to leave at lunchtime. In Oakland, only Oakland Technical High School has "open" lunch. That school enrolls about 15% of OUSD's high school students; the other 85% must remain on their campuses during the lunch period. Predictably, schools with a closed campus have far more kids eating in the cafeteria than schools with an open campus, and more students eating school lunch means more revenue for the nutrition department.

By comparison, in San Francisco, only about 18% of high school students attend schools with a closed campus. Burton HS (enrollment about 1300) and Thurgood Marshall HS (enrollment about 770) are the largest closed campus high schools; the others are very small schools, nearly all with less than 250 students each. While all of the largest SF high schools, with enrollments over 2,000 students each, are fully open campus, most of the mid-sized schools (with enrollments from about 500 -1400 students) allow some students to leave at lunchtime. Overall, about 55% of SFUSD HS students attend school on a fully open campus, with another 27% on partially open campuses.

There are many reasons why SFUSD allows so many high school students to leave school at lunchtime, including cafeterias which are too small to accommodate all students during one lunch period, and pressure from students and parents to give kids more freedom during their one break of the day. However, it is clear that when students leave school for lunch, cafeteria patronage drops, meaning less revenue for the nutrition department. Although it is not the nutrition departments that make the decision about whether a high school will be open or closed, clearly OUSD's nutrition department, with 85% of their HS students on closed campuses, has a financial advantage in this area over SFUSD's.

Beat the CLOC

Another difference between Oakland's school lunch program and SF's centers around the use of government commodities. Since the start of the National School Lunch Program over 60 years ago, one of the goals has been to use up government surplus foods; for every lunch served, school districts receive about .20 worth of commodity credits. These can be redeemed later for a variety of surplus goods, including meat, chicken, rice, cheese, pasta and canned goods.

However, commodity foods carry a certain stigma for some, deserved or not, conjuring up images of soup kitchens, the free government cheese giveaway of the 1980s, and perceived low quality.

Some parents don't want their children eating food which they believe is of low quality. Other blame the commodity program for the increase in fast-food type school lunches. But because they represent another form of financial support for school meals, most districts use them.

In contrast, Oakland is one of just eight school districts nationwide which, because of participation over 40 years ago in a federal pilot project, is allowed to receive "cash in lieu of commodities" (CLOC). This extra revenue coming into the school lunch program in Oakland allows both the flexibility to seek out local fresher versions of commodity foods which other school districts are forced to use, and also the advertisement to its community that a growing percentage of the school food budget is used to purchase locally grown fruits and vegetables. OUSD's cash purchases from local farms are "providing a steady market for local farmers; keeping money in our local economy. And hopefully inspiring a new generation of farmers, chefs, and healthy eaters!" That kind of message resonates with today's health- and environmentally-focused families.

A follow up study of the original pilot found that food costs were also slightly lower for districts using cash in lieu of commodities: as well, the participating districts benefited from lower state and federal administrative expenses.

San Francisco was also chosen to participate in the pilot project, but only as a "control" to which the Oakland project could be compared. So SF, like virtually every other school district in the country apart from the few pilot districts (and the state of Kansas, which since 1975 has, by act of Congress, been permanently eligible for cash in lieu of commodities), cannot receive cash in lieu of commodities, or any of the benefits associated with it.

Planning for the Future

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None of this is to disparage the fine work that Jennifer LeBarre is doing to improve school food in Oakland. By all accounts she has done an amazing job of building support for her program both within OUSD and also in the surrounding community. The fact that she has 14 managers within her department, while SF has 8, allows her to spend between 5-10 hours weekly in meetings with district stakeholders and other OUSD staff,  and networking with the community.

"A lot of my time is in planning meetings," she told me. It has been time well spent, as OUSD now has a clear plan for improving its school meal program, developed in conjunction with the Center for Ecoliteracy.

It has long been clear that SFUSD badly needs a similar plan, but for years there was no funding available to pay for it. That changed in autumn 2012, when private funding was found to enable SFUSD to lead its own initiative to "develop a visionary road map that outlines the strategies, tactics, costs, and estimated timeline associated with comprehensively reforming school food in San Francisco’s public schools." The study is scheduled for spring 2013 and by September 2013, SFUSD hopes to have the information necessary to choose a course of action and move forward.

LeBarre's efforts have certainly helped build support for her program within the OUSD administration, but  OUSD has another reason to prioritize feeding more kids—or rather, nearly a million more reasons. Oakland qualifies for a state revenue stream called "Meals for Needy Pupils" (MNP), which the Revenue Limit Summary included in the 2010-11 first interim report for OUSD indicates was expected to bring in almost $1 million in extra funding in 2010-11, based on the number of free and reduced price meals served.

Only about 1/3 of California school districts qualify for MNP money, and the decision is based on whether schools had a particular kind of property tax override in place in a particular year in the late 1970s. Oakland had it, San Francisco didn't.

Despite its name, school districts receiving MNP money don't need to spend it on meals; they can add it to their general fund to pay for other programmatic expenses. The ability to bring in extra funding, above and beyond what is already provided by the state and federal government, for every free and reduced price meal served gives every OUSD staffer, from the Superintendent down to the lowest paid part time employee, an incentive to want to improve their meal program and get more kids eating school meals to generate more money for the general fund. It's an incentive that SFUSD lacks.

That said, I believe that Oakland Superintendent Tony Smith feels in his heart that better food for kids is vital, regardless of whether it generates more money for the general fund. When Smith was a deputy superintendent in SFUSD in 2007, I heard him speak passionately about his own experiences growing up as a low income kid eating free school lunch. In a statement released in conjunction with Oakland's school lunch study earlier this year, Smith said, “School food reform is not separate from school reform. It is part of the basic work we have to do in order to correct systemic injustice, pursue equity, and give our children the best future possible.”

SFUSD's recently retired Superintendent Carlos Garcia found the money to pay for installation of an electronic point of sale payment system, a much needed upgrade for cafeterias that has increased lunch money collection and allowed more choices in middle and high schools. Still, with his attention focused on one budget crisis after another, his main focus was on reducing the deficit.

However, with new Superintendent Richard Carranza taking the helm of SFUSD in August 2012, things are changing. Top district brass approved the hiring of two new area supervisors for the Student Nutrition Services department for 2012-13, increasing the number of managers from 6 to 8. More money was added to the 2012-13 nutrition budget to help underwrite the higher cost of better food.

SF school board member Jill Wynns told me, "Sup. Carranza recognizes the importance of better nutrition for our students, and, I believe, will make the continuing improvement of our student nutrition programs a high priority in his new administration. We have discussed the clear advantage both for the students and for the City of finding a way to build a central kitchen that would simultaneously produce tastier,  fresher meals, while providing jobs in a part of town with high unemployment, and making the best use of our local agricultural bounty."

A central kitchen, funded by a bond and kept operational by additional funding from a parcel tax, would enable scratch cooked meals with fresh local ingredients to be prepared right here in San Francisco. It would create good jobs for San Francisco's workforce and better nutrition for our students. A location in the southeast sector would help drive economic recovery in that area, and be ideally located close to both the SF Wholesale Produce Market and to freeways, to facilitate delivery of farm fresh produce to the kitchen and speed delivery of meals to schools. All of this could be possible once the study SF is beginning this spring is complete, and a plan is developed for moving the study's recommendations to reality.

Meanwhile, SFUSD has signed a $9 million contract with Oakland based Revolution Foods to provide freshly prepared meals to all 114 district schools; Rev Foods meal service began January 7th 2013, and as of the end of January, the number of school lunches being served had increased 13%. Still, these healthy lunches come at a steep price, and have the potential to drive an even higher deficit.

Without a full discussion of all of the relevant issues, it is pointless to talk about how Oakland runs its meal program in the black while SF doesn't. More expensive labor, the costs of feeding kids not qualified for free meals, and the SF's open campuses all contribute heavily to SF's program deficit, and these are all costs which SFUSD leaders believe are justified. As SF nutrition director Ed Wilkins told me, "I support paying my cafeteria staff fairly; after all, they have to live in this very expensive city."

However, on one vital point, Oakland and San Francisco are on exactly the same page: top district leadership on the issue is the most essential factor to making better school meals happen.

Dana Woldow has been a school food advocate since 2002 and shares what she has learned at http://PEACHSF.org [6]. Follow her on Twitter @nestwife [7].