we will receive. How then do we determine the cost of continuing this program for a Board of Education, that is already deeply in debt and is extremely reluctant to go further in debt. They have made many cut backs in the educational program and if relief is not forthcoming they will have to consider further cut backs. With the course of action that the Department of Agriculture is taking at this time, it is a certainty that the school lunch program will be carefully reviewed if further decreases in Board of Education expenditures are required. In the last seven years we have increased participation from 24,000 Type A Lunches a day in 98 locations to 91,000 per day in 269 locations. In June, 1971, 61% of the total lunches served were served free or at a reduced cost compared to 4% of the total participation that were served free seven years ago. Yet we are only reaching about 45,000 of the estimated 127,000 needy children enrolled in the Detroit Public Schools. We still have about 50 schools without food service. None of them are located in the so-called poverty areas, but without a doubt they all have some needy children enrolled. During the 1968-69 and 1969-70 school years we experienced a loss in the operation of the Food Service Department in excess of $500,000. Preliminary reports from the Accounting Department indicate that during the 1970-71 school year we lost less than $25,000. Our prices and menu pattern have remained unchanged since 1967, and our costs have increased. There is no question but that the increased federal funds that we received last year substantially contributed to the decrease in our loss. However, even though we added lunch programs in 60 schools last year we have developed a cost analysis program that has helped identify excess costs and will permit further cost reductions. Unfortunately, not to the extent that will be required if the changes that have been proposed are finalized in their present form. In making specific comments on the proposed changes we avoid direct comment on apportionment of funds to States as this is not one of the areas that we deal with. It stands to reason, however, that unless sufficient monies are apportioned to the State it will not be possible for the State to grant sufficient funds to the school districts. An average of 5¢ of general cash-for-food assistance and 30¢ for each free or reduced price Type A lunch served during the year, will not permit the State to continue our current level of reimbursement without drastically reducing levels of reimbursement in other districts. Drastic cuts in levels of reimbursement for other districts will drive them out of the program, as it also will Detroit. If this happens the base on which the federal payments are based will be eroded and maintenance of current levels will become more difficult. In the process, confidence in feeding programs will also be eroded. If this happens all of the progress that has been made during the last few years, will be reversed and the programs may never recover from this set-back. We are in general agreement with the principle that is trying to be accomplished with the addition of paragraphs (b−1), (b-2) and the addition of paragraph (c). We are assuming that in paragraph (d) that school district could be substituted where the word school is used. If not, we would recommend this change. We know that in certain schools we are losing money by nature of a low membership as participation will never come close to the number needed to break even. Yet the school is located in a poverty area and we would be in violation of a Federal Court Decree if we didn't provide service to these schools. We feel confident that on a district basis we would have no trouble meeting the criteria set forth to obtain more than 30¢ for free and reduced price lunches. However, unless the State receives sufficient funds to grant us this additional reimbursement without detriment to other districts, it does us little good to qualify. There was a time when we could accept a verbal commitment that the funds would be forthcoming, but after the summer feeding funding fiasco, we doubt if this will be possible again. It is for this reason that we are very much concerned with the unrealistic funding ceilings proposed, even though it may be possible for a State to receive additional funds later in the year. We are afraid that needed funds would arrive too late to be of any value in starting or expanding programs and that this feature has a built in self-destruction factor that will in time destroy the program. We had some difficulty in understanding the following sentence "and provided, further, that such combined rate of reimbursement shall not exceed 50 cents for each such Type A lunch unless the number of free Type A lunches being served in the school [district?] represents at least 90 percentum of the total number of free and reduced-price Type A lunches served". We finally determined that what is being said is that a district or school will not be able to receive the same rate of reimbursement for free and reduced price lunches, if this rate is higher than 50 cents unless the free lunches served constitute 90% of the total free and reduced price lunches served. If our understanding is correct we will have a problem in our Astro-Pack or cold lunch program. This program has served as an emergency program for us and has allowed us to provide food in fifty-six schools to 12,000 students; it has permitted us to provide service now, with a minimum expenditure for equipment, and regard for adequate facilities in a school. It is, however, a more expensive program to operate, as we are contracting with a food management firm for the lunches and additional funding will be required if the program is to continue to operate. We don't understand why the State's flexibility should be curtailed in these areas. If there are abuses in this area, then they should be dealt with on an individual basis. When these abuses are handled by a broad change in flexibility some good as well as some poor programs are destroyed in the process. Paragraphs (d-1) and (d-2) would be alright if adequate funds are provided, however, past experience indicates that this is very seldom the case. For this reason we believe, even though supplemental appropriations are not desirable, they provide a better solution to the problem, if continued growth of the program is a goal of the U.S. Department of Agriculture. In reviewing the proposed changes for Non-Food Assistance, we find them most unrealistic. We know that each year the income guidelines for free lunches will be broadened. This of course, will mean increases in the number of lunches served in existing schools, and we need the flexibility of meeting these increased needs when they occur, and not six months later. Further, we have established the Astro-Pack program as an expedient way to provide food service. Yet, it is a temporary program and we want to move to convert these schools to hot lunch programs as facilities and funds permit. Again, it seems that the Department is moving to correct abuses to the program by curtailing the flexibility of all State Directors, rather than dealing with specific abuses. We believe that this is a dangerous practice, and should be avoided. The changes proposed in Part 245 Determining Eligibility for Free and Reduced Price Lunches, does not affect us. However, it would seem that, in this area, more would be gained if the U.S. Department of Agriculture were to specifically spell out and define in concrete terms what is meant by "reasonable basis". In fact, much of the trouble in this area could have been avoided if this would have been done two years ago. In summary, we would strongly urge that the U.S. Department of Agriculture withdraw the proposed changes, at this time. We believe that changes that will not be effective until after the programs have started will be extremely detrimental to the program. If the goal of the U.S. Department of Agriculture is to stabilize the funding of the program and increase its growth, then the change of regulations at this time is in direct conflict with the stated goals. Sincerely, HOWARD W. BRIGGS, Director. Hon. GEORGE MCGOVERN, DETROIT PUBLIC SCHOOLS, Chairman, Select Committee on Nutrition and Human Needs, U.S. Senate, Senate Office Building, Washington, D.C. DEAR SENATOR MCGOVERN: Thank you for sending me a copy of your letter to Secretary Hardin, dated August 24, 1971. We are in complete agreement with your request, and in our response to Mr. Rorex, we have urged the withdrawal of the proposed changes. However, in trying to determine the present action that we should take, I realized that over-reaction to the proposed change could be as destructive to the program as the changes themselves. This will be true even if the Department withdraws the changes in the regulations. In effect, we have a "heads we win— tails you lose" proposition for the Department of Agriculture. We, therefore, are attempting to react to the possible changes in a reasonable manner. I am recommending that we proceed in adopting income guidelines based on the rates of reimbursement that we were to receive before any proposed changes were made. This action is based on the assumption that reimbursement rates cannot be decreased until we receive sixty days notice. If this assumption is correct, and the Department doesn't come up with loop-holes, then we should have ample time to react to any changes. Under the circumstances, I believe it is the only correct course of action we can take. Hopefully, I will be able to convince others that it is the correct course of action. However, let there be no mistake, if our reimbursement rates are decreased, we will scale back our program in direct proportion. When a school district is in debt, and is considering possible further cut-backs in its educational programs, we will have no choice in the matter. The enclosed material represents my personal responses to the proposed changes in regulations, and an information questionnaire for the ASFSA as to the effect of the changes. I am sure that you will be furnished with a complete summary by ASFSA. Sincerely, HOWARD W. BRIGGS. Chairman, Major Cities Directors Section. Question 1. How much did it cost to produce a Type A lunch during the 1970-71 school year? Do not include the value of USDA donated commodities. Answer. 64¢.1 Question 2. How many free or reduced price lunches did your State or School System serve during 1970-71 school year? ($2,549,459.20) Answer. 5,800,657. Question 3. How many free or reduced price lunches do you expect to serve this year (1971–72) ? Answer. 7,000,000. Question 4. What would have been the loss per meal during last year (1970– 71) if you had received only 35¢ federal reimbursement for free or reduced price lunches? (44¢ ave. —35¢=$.09) Answer. $.09 per lunch or $522,059.13/yr. Question 5. How much money will your State or School System lose in 1971-72 if you receive only 35¢ federal reimbursement for free or reduced price lunches? (55¢ 2—35¢=20¢×7,000,000) Answer. 20¢ per lunch or $1,400,000.00/yr.3 Senator GEORGE MCGOVERN, LIVONIA PUBLIC SCHOOLS, Chairman, Select_Committee on Nutrition and Human Needs, Senate Office, Washington, D.C. DEAR SENATOR MCGOVERN: This letter concerns the proposed changes in regulations cited in Notice of Proposed Rule Making published in the Federal Register August 13, 1971. In S. 210.4-paragraph (f) it states each Type A shall be reimbursed 5¢ from Section 4 apportionment and 30¢ maximum for free and reduced price meals from Section 32 special assistance funds. We in Michigan feel that because of high production costs, the minimum reimbursement should be 6¢ for Type A and 40¢ for free and reduced price meals. With this more realistic funding we would be able to serve the needy of the school district. Sincerely, GERALDINE TOBIN, Director of Food Service. 1 Weighted average cost: Elem. $.47×1.0= $.47; Jr. High .57X.5=.285; High .67X.5= .335.1090.545-$.55¢; Value of commodities +.09 $.64. 2 Rate of reimbursement agreed to prior to proposed change. Our Board could not absorb this loss so we would have to cut back the program. It will also be necessary to request permission for a price increase of at least 7¢ per lunch if the rate of reimbursement is cut to 5¢. PLYMOUTH COMMUNITY SCHOOL DISTRICT, Re/Request for consideration of increased Section 32 school food service funds. Senator McGOVERN, Senate Office Building, Washington, D.C. DEAR SENATOR MCGOVERN: $4,552,220 comes off the top of Section 32 funds available for the 1971-72 fiscal year for use by Puerto Rico, Virgin Islands, Guam and American Samoa. The remaining amount is available for distribution to other states as follows: (a) 5¢ times the number of lunches served above the base number (b) 30¢ times the number of free or reduced price lunches served above the base number The base number for (a) is determined by dividing the original Section 4 apportionment for the state by 5¢ The base number for (b) is determined by dividing the original Section 11 apportionment for the state by 30¢ It is our considered judgment the reimbursement rates listed above (5¢ and 30¢) are too low and should be 6¢ and 40¢ respectively. DEAR SENATOR MCGOVERN : I have been informed by USDA that you requested & copy of our state plan and that they supplied it. Because of this and your desire to have children fed I feel it is necessary to inform you of recent developments in Nebraska. In our state plan we proposed to start new programs in 31 schools. At that time we felt that was a conservative, but safe, estimate. Since submitting the plan we had been encouraged to the point that we thought that number might be increased to 45 or 50. Then on Friday, August 6, 1971, USDA dropped a real bomb shell on us at the State Directors Workshop in Minneapolis where they informed us of their proposed revision of program regulations. If these proposals are adopted, the number of new programs in Nebraska this year will probably drop to ten, or less. Their proposed regulations make it impossible for the state to use the money the Congress has appropriated. There is no question on the part of the state directors but that such is the intended purpose of the proposals. We have been in touch today with the administrators in most of the schools we have promised to assist with new programs this year. Grand Island has been approved to start eleven new programs-all of their elementary schools-but will cancel all of them. Columbus will do the same with all nine of their elementary schools which we had already approved. Blair will cancel out their three elementary schools. Others from whom we do not yet have applications, but where serious consideration was being given to starting programs includes eight elementary schools at Norfolk, eleven at North Platte, nine at Fremont, five at South Sioux City, and the K-12 school at Crawford. None of these will give further consideration to this. It is not only that we will not start these new programs under the proposed regulations, but we are likely to lose several existing programs and will feed fewer children from low income families than we did last year. We do not believe these are idle threats on the part of administrators and school boards. We believe, instead, they are serious, and will convert to a la carte programs to serve only those who can pay. The financial condition of most schools is critical. They can no longer chance operating a program that will add to their financial burdens. If the proposed regulations are permitted to become effective, our school administrators will lose all of the confidence they have ever had in the federal government. I would predict there will never be feeding programs in the elementary school at Grand Island, North Platte, Columbus, Fremont, Norfolk and South Sioux City if this happens. It is our sincere hope that you and other Senators and Congressmen can prevent the adoption of the proposed regulations and that we in the states and schools can get back to our job of feeding children. A copy of this letter will be sent to Congressman Perkins for his information. Sincerely yours, ALLEN A. ELLIOTT, Program Administrator, School Food Services. NEW MEXICO STATE OF NEW MEXICO, GERALD CASSIDY, DEPARTMENT OF EDUCATION, General Counsel, Select Committee on Nutrition and Human Needs, U.S. Senate Annex, Washington, D.C. DEAR MR. CASSIDY: Due to the proposed funding structure, the outlook for New Mexico school lunch programs grows dimmer and dimmer as the school year progresses. The New Mexico School Food Service Division, as well as the State Department of Education, is increasingly concerned and has expressed this concern to New Mexico congressional delegations and officials of the United States Department of Agriculture. Since many schools have already opened, this office has received indications from several districts that they will be forced to close their lunchrooms if the proposed funding structure is approved. Farmington, for example, is located in the northwest corner of the state and during 1970-71 served some 3350 Type A lunches each day of which about 320 were to Indian children. Prior to the beginning of school, the Farmington Board of Education voted 2 to 2 to discontinue the lunch program. Fortunately, the tie was broken by the chairman. This precarious position could very well be altered if the proposed regulations are approved. The Albuquerque Public School district, serving an average of 75,000 lunches per day, estimates it will have a loss of 2.19 cents per meal if the proposed funding is approved. An official of the Albuquerque system has publicly stated the program will be discontinued when school lunch funds decline to an accrued cash balance of one month or less. The superintendent of the Gallup school district, which serves more than 9,000 lunches per day of which some 5,400 are to Indian children, stated in a newspaper article recently that the district might be able to continue the lunch program until February 1, 1972. He reported last year's cost per lunch was 53.6 cents and estimated the cost per meal under the "freeze" would be 55 cents. After the "freeze" he said that cost could very well go to 57 cents. Since we have received this shocking evidence of district intentions under the proposed funding, we have mailed copies of the attached letter to 21 representative districts, about one-fourth of them, throughout the state. We will pass along to Louise Frolich a composite of the results we receive, and will be happy to supply any additional information you may require. Our telephone number is 505-827-2591. Sincerely yours, (Mrs.) GRETCHEN Y. PLAGGE, Director, School Food Services. |