Albany’s food service program continues to run in the red, despite wrapping up a three-year plan designed to make the program self-sufficient.
Albany contracts with Sodexo for its food service program. Sharon Short, the program’s general manager, and John Stone, district manager, updated its financial status Monday for the Albany School Board.
The report shows the program kept expenditures well in check last year but didn’t meet its revenue expectations. The result landed the program a net loss of $89,455 for 2011-12.
Sodexo has subsidized deficits in the past and will do so again, Short said, with a $35,000 check this year.
Business Director Russell Allen said he plans to meet with Stone later this month and the payment will be part of the discussion.
Lunch purchases dropped well below where they had been for the previous two years and federal reimbursements for commodities were slashed late in the year. Stone said a drop in enrollment, furlough days and a couple of unexpected weather closures also contributed to last year’s loss.
“We look at budgeting in the best-case scenario,” Stone said. “The program would have made money and should have made money this year. We couldn’t assume that these things would happen.”
The program representatives faced sharp questioning, however, from board member Jerry Boehme, who asked for more conservative budgets and said the board should have been notified earlier of the program’s struggles.
Frank Bricker said the report leaves board members with the question of whether to continue to expect the program to get back in the black, or accept that it will need to be supported.
Board Chairwoman Sandi Gordon asked the Sodexo representatives to rework this year’s budget in light of the potential for fewer lunch purchases, and to continue monthly updates for the board, with the next expected for October.
The lunch program has cut back on expenses in the past few years in an attempt to erase a series of negative ending fund balances.
In 2008-09, expenses were higher than revenues by $404,482. However the program began the year with a positive fund balance, leaving it $294,056 in the hole, according to the district office.
By the beginning of the 2010 school year, the program worked to build revenue and cut back expenses, swinging that balance $327,079 toward the black. Still, expenses outweighed revenue by $77,403.
The program moved into the black for 2010-11, with a positive ending fund balance of $9,049. Last year’s deficit, however, pulls the program back into negative territory.
Allen has said at past meetings that legally, a loss can be carried on the books, as long as the district has a plan to fix the negative balance.
Sodexo had a three-year plan to be self-sufficient, which wrapped up with last year. Allen said he knows of no consequences for not making that plan outside of the guarantees included in the contract with the district. He said those guarantees will be part of his conversation with Stone later this month.