6/10/09

Suburban News

Khalila Perrin

* The district does not intend to fill the department’s vacant positions following the 2009-10 school year to cut costs.

An outsourced food service department and a lunch price hike are on tap for Columbus City Schools next school year.

With the Columbus school board’s OK June 2, district administration officially inked a one-year contract with Sodexo, an international food service management company.

The company will manage operations of the food service department for a $383,705 fee plus related food purchase and management costs. The total contract is not to exceed $13.2 million, according to the agreement.

The contract includes the option for four one-year renewals, in keeping with federal law.

Layoffs are not a part of the deal, and all food service department workers will continue to be district employees, officials have stressed. The district will continue to pay salaries and benefits to the department’s 400-plus staff.

The administration does, however, plan to trim its labor costs through an attrition schedule created by Sodexo, Chief Operations Officer Larry Hoskins said.

Under Sodexo’s schedule, the administration will refill fewer and fewer of its vacancies over the next five years.

“You’re not laying off anybody — you just don’t fill all of the positions that are vacant when people retire,” Hoskins said, describing the schedule.

The administration aims to fill all the vacancies attrition creates during the upcoming fiscal year, but thereafter, up to 4 percent of vacancies created by attrition won’t be filled.

Each year the district loses about 8 percent of its food service department staff to attrition — most of which occurs through retirement, according to district data.

“Probably the greatest area of opportunity is our labor (cost),” which takes up 50 percent to 58 percent of the department’s revenue, Hoskins said.

“In an organization like this, your labor shouldn’t be any higher than about 45 percent, so that’s where we knew we had some opportunity,” he said.

In light of enrollment that’s expected to decline by 1,500 students each year over the next five years and the administration’s promise to close about six schools in the next four years, the schedule makes sense, Hoskins said.

“If students start coming back to the district and we have to open up more buildings, then we won’t follow this schedule — we may have to add employees. But these (plans) are based on our current trends,” Hoskins said.

The schedule holds labor costs to 50 percent to 51 percent of revenue — and might be part of the reason the district saves an estimated $7.3 million over the next five years, Sodexo officials reported.

It’s the first time the district has outsourced the management of the department, which has logged multimillion-dollar deficits for the last several years.

Officials project a $2.8 million deficit at the close of the fiscal year June 30.

Under its agreement with the district, Sodexo has guaranteed it will keep the department’s neutral budget, even if it means coming out of its pocket to cover deficits.

“It’s an unlimited guarantee depending upon us doing what we’re supposed to be doing” in following Sodexo’s managerial recommendations, Hoskins said.

“We can’t just arbitrarily and capriciously not accept the recommendation that they give us if they make good business sense,” he said; otherwise, the district will have to pay up on the missed savings.

The administration also might have to pay up if Sodexo opts out of renewing its contract in the following fiscal year.

As a part of its contract, the company will invest $811,000 in renovating middle school and high school kitchens throughout the district and the district’s Downtown Food Service Production Center.

The board also approved a 25-cent hike in lunch prices for the 2009-10 school year. Officials aim to raise prices by another 25 cents in the 2011-12 school year.

Tapping Sodexo for the job will mean more variety for students next year.

Middle school and high school students might have 10 entrees to choose from each day compared to the three previously offered.

“Being able to leverage (Sodexo’s) buying power … gives us the ability to offer more choices,” Hoskins said.