Higher salaries and decreased revenue have taken their toll on the Steamboat Springs School District's Nutritional Services Department.
After years of generating enough revenue to support itself, the 11-employee department will need to be subsidized by the district's general fund to continue operating, Superintendent Donna Howell told the School Board at its Monday study session.
The department, which is headed by Roberta Gill, typically generates about $500,000 a year in revenue, mostly from student-purchased lunches at district schools, Finance Director Dale Mellor said.
Annual revenue is expected to hold steady, if not decrease, in light of decreasing district enrollment and lost catering contracts with two area preschools.
But the biggest factor behind the department's inability to remain self-supporting is the dramatic increase in salaries and benefits for nutritional services employees over the past several years, Mellor said.
In 1999, total payroll for the department was $234,000. When the district analyzed the department's salaries several years ago, it discovered they weren't competitive with those of food service employees in similar districts, Mellor said. The department's salaries have increased an average of 12 percent since the competitive market adjustment, and total payroll expenditure is projected to exceed $323,000 this year.
With its lunch prices already the second highest in the state, the nutritional services department is reluctant to raise prices to pay for the increase, particularly given the typical 15 percent drop-off in lunch purchases after price increases, Gill told the School Board on Monday.
Still, the district is fortunate it hasn't had to subsidize the department before, as most rural school districts must do, Gill said. The department formerly was able to support itself primarily because of its catering work, she said.
The nutritional services department will need about $45,000 from the district's general fund to operate this year, Mellor said. Gill said it's unlikely the department can reduce its number of employees.
The district also will look to increase catering opportunities, and thus, revenue, for the department. Last week, nutritional services employees catered a multi-day trip for seventh-graders to Dinosaur National Monument. Using the department for more of the district's catering needs will increase revenue while decreasing the cost to the district to have food and drink provided at events, Howell said last week.
The School Board will vote next week whether to subsidize the nutritional services department.
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