At a loss

A source requested anonymity due to fears of retribution.

Four years ago, the Stanwood-Camano School District hired Chartwells, a management company, to run its food service program.

That decision was made based on a list of supposed advantages.

At the end of this year, the district will have lost almost a half million dollars in its food service program.

Promised advantages didn't pan out

When the school board approved the contract with Chartwells, the members were told the advantages outweighed the cost of the management fee . about $35,000 each year, in addition to paying the company what the district would pay in salary and benefits for an in-house manager.

Those advantages included the ability to replace the Chartwells-employed director at will, a corporate support system, savings in food bids, profit/ loss guarantees and data reporting improvements.

Whereas the district could have Chartwells replace the current food service manager, Kristi Snodgrass, that ability has never been exercised.

The corporate support system provides guidance with food safety and handling, said Gary Platt, the district's executive director of business and operations.

With the peanut recall this year, Chartwells identified purchased products the recall applied to and where those products were sent, he said.

However, in a complaint submitted to the state Department of Labor and Industries (L&I), a district employee was critical of Snodgrass' actions concerning a gas leak in a dishwasher's water heater at Port Susan Middle School, the district's central kitchen.

Snodgrass called district maintenance director Tom Webb concerning the gas leak, which released a strong smell and made multiple employees ill, according to the letter. As the smell worsened, Snodgrass told employees she didn't know if they should leave.

The leak had originally been brought to her attention Sept. 20, 2007. Weeks later, on Oct. 16, 2007, the first time the gas was turned off was when firefighters were called, according to the letter. Webb attempted to find the gas leak first with soapy water, then with a lit flame while students were still in the building.

An L&I investigation resulted in a citation based on the district's lack of direction in its Accident Prevention Program dealing with gas leaks. As an end result, the dishwasher was fixed and the district made changes to its safety procedures.

The gas leak had nothing to do with Chartwells, Platt said. The district is responsible for the facilities, while Chartwells is responsible for the food service program.

Snodgrass' job was to report the issue, he said. According to L&I documents, she did.

The district has also cited the management company's ability to bid in large quantities as a cost and time saver.

However, prior to hiring Chartwells, the district belonged to a group of school districts that bid together to save costs, said a food service employee. In addition to saving money, the district had more food options.

Since the switch, grapes and melon have no longer been options, the employee said. Fresh fruit choices are pretty much limited to apples, bananas and oranges.

Whether or not the district saved money on food by switching to Chartwells is difficult to determine, Platt said.

Before Chartwells, the district had to accumulate the information needed for bidding and determine the size and quality of the food themselves, Platt said.

Another of the advantages was that Chartwells guarantees a profit or loss for the year.

If the guarantee isn't met, Chartwells makes up the difference, Platt said. If the district has more of a profit than predicted, the district keeps the extra funds.

The district received a reimbursement in the 2005-06 school year amounting to $31,633. Without that reimbursement, the program would have been in the negative instead of having a gain of $19,534.

In addition to the reimbursement, the district did not have to pay the management company's costs or reimburse the company for food for the last two and a half months of the school year, Platt said.

But the district lost $104,303 in 2006-07 and lost $178,185 the next year. This year, the district estimates it will lose $195,591, although the guaranteed loss in the contract is $193,169.

Out of the four years Chartwells has been contracted with the district, three had a guaranteed loss.

However, even if the district loses more than the guarantee this year, it is uncertain what Chartwells would pay. The district has not met two of the conditions attached to the guarantee in the current contract. The first was to have at least 5,050 students. Current enrollment is at 5,011. The second was to have lunch served 179 school days and breakfast 176. Because of the three waived days from the snow and flood this winter, lunch will only be served 178 days.

Should the district lose more than the guarantee, they would analyze what the impact was from the missed day of food service, and the district and Chartwells would negotiate a possible refund, Platt said.

Commitments not met

Chartwells has not lived up to some of the promises it made, said Shirley Lanum, Port Susan Middle School kitchen manager, at the May 5 school board meeting.

According to a memo from Chartwells, Chartwells promised to introduce flatbread pizza at the secondary school, have an i-Pod give-away at Stanwood High School (SHS) and develop various promotions that have not materialized, Lanum said.

The company also claimed food service employees would receive nutritional training from Chartwells' dietician and a culinary training workshop from its regional chef.

Those haven't happened either, she said.

Platt received a July 23 memo from Chartwells detailing things they planned to do this year to improve the program. The i-Pod give-away and various promotions and training were on that list.

A number of the upgrades to the program's products and menu offerings listed as commitments to the district's program in the memo are not new, the employee said. Menu choices such as homemade pizza at elementary schools, honey wheat hoagies, Spartan burgers with curly fries, and the fiesta, oriental and burger bars originated prior to the switch to Chartwells.

One team-building workshop was done in January.

Nothing substantial has been added to the food service program with Chartwells, the employee said.

"We are paying $35,000 for a management company that has brought us nothing," the employee said.

In-the-black program turns red

The total number of meals served under Chartwells has been less than previous years under an in-house manager.

Since the switch, multiple changes have occurred, according to an April 21 memo from Platt to the school board.

Contractual agreements have caused increased pay and benefits for food service employees. State funding changed for the breakfast program.

The first year Chartwells managed the food service program, the district implemented the federally required healthy foods policy, Platt said. The policy changed the selection of food the district offered, especially when it came to the a la carte choices at secondary schools. The district also pulled the pop machines and replaced them with water and juice.

When the district had an inhouse manager from the 2002- 03 school year to 2004-05, it lost money only one of the three years. Over the three years it gained $35,171.

Under Chartwells, from the 2005-06 school year to 2007- 08, the district lost a total of $262,954. Two of the years were in the negative, and the saving grace of the third was Chartwells' reimbursement and discount.

The bulk of the district's revenue comes from meal sales, and the second largest chunk, from the federal government, Platt said. The state revenue for the program is actually relatively small.

This year, local revenue from meal sales makes up about $1 million of the district's estimated $1.5 million in revenue. Only about $30,000 comes from the state, and the rest of the revenue is federal.

Stanwood-Camano falls behind other districts

In comparison to other local school districts, Stanwood- Camano's food service program doesn't look so hot.

Stanwood-Camano's program deficitin the years it has had Chartwells range from $104,303 to the estimated $195,591 for this year, with one year in the positive. Widening the range to six years, including three district operated years, the district averaged a loss of $37,963 each year.

In comparison, Arlington Public Schools, which has a similar number of students and is self-managed, was in the black all six years, with an average yearly gain of $81,928.

Oak Harbor, which contracts with Chartwells, has also been all in the positive, with an average yearly gain of $90,661.

Mount Vernon, which is selfmanaged, had three years in the red but an average yearly loss of $1,692.

Both Snohomish and Monroe school districts contract with Sodexo. Snohomish, with 4,000 more students than Stanwood- Camano, averages a $338 gain each year.

Monroe, with 2,000 more students, averages a yearly loss of $12,445 loss. Still, Monroe lost less money than Stanwood- Camano.

Stanwood-Camano's change in revenue and expenses doesn't appear remarkably different from other area school districts. In fact, its expenses in the last three years have increased at much the same rate as Lake Stevens, which has 2,000 more students and does not use a management company. And like Lake Stevens, Stanwood-Camano's expenses have grown more rapidly in the last six years than its revenue. Still, Lake Stevens has a six-year average of a $28,479 gain each year.

Comparing district's food service programs is difficult, Platt said, because each district has a different percentage of students in the federal free and reduced lunch program.

Last year, Arlington, Monroe and Snohomish had lower percentages of students in the free and reduced program than Stanwood Camano, according to the state Office of the Superintendent of Public Instruction's Web site. Lake Stevens, Oak Harbor and Mount Vernon had more.

When it comes to numbers, Stanwood-Camano's program is on the bottom of the heap.

The future of Stanwood/ Camano food service

On May 5, the Stanwood- Camano School Board unanimously authorized the district to seek proposals from food service management companies.

"The final recommendation for determining if the district should continue to contract for management services or advertise an opening for a districtemployed director will be made after reviewing the proposals," according to the April 21 memo from Platt to the school board.

According to the same memo, more meals were served in general and per student since the switch. However, the memo only compares the last year of district-operated food service to the four years Chartwells has run the program.

Whereas it is true that more meals were served per student, more meals served in total is false.

Not including the current school year, which is only a budgeted amount, the district food service program served an average of 12,866 less meals each year under Chartwells in the three years it employed the management company than it did the three years prior with a district-operated program.

Student enrollment has decreased during that period, from 5,255 students in 2002-03 to 5,089 students last year. However, the number of meals sold per student has increased from 77 to 81 meals.

At the May 5 school board meeting, Lanum asked the school board to consider returning to an in-house manager. She pointed out that to balance next year's budget, the district plans to cut $28,192 by no longer offering food service at the Church Creek campus and reducing the staffing at the district's main kitchen by three hours each day. Students will go to the main SHS campus for meals next year.

The district needs to look at hiring an in-house food service director, the employee said. The management fee could be used to preserve jobs within the district.

As of last week, the district had met with potential bidders, Platt said. Friday was the deadline for proposals.

Now that the proposals have been received, the district will analyze them and make a decision on what to recommend to the school board, he said.

Much of the information analyzed for this article came from public record requests submitted to seven local school districts and the state Department of Labor and Industries.