JACKSON — Members of the Board of Education listened intently to a presentation from the school district’s director of food services, Joseph Immordino, about free lunch programs and changes to state regulations.
Immordino said the New Jersey Department of Agriculture will expand the eligibility criteria for free and reduced-price meals, meaning they’ve increased the percentage along the poverty line. Last year it was 180% above the poverty line; this year it will be 200%.
Some families were not eligible for free and reduced meals because they earned a few thousand dollars more than allowed. As the numbers increase, this family would then qualify for the program.
There will also be an increase in the reimbursement rate based on the cost of living, which will help families in the districts to benefit from a reduced price lunch, and breakfast is free.
Giuseppe Palmeri, a member of the board of directors, expressed concern about the costs that the district must pay to accommodate these families.
“If we keep going into the red, we’re going to go deeper and deeper into the hole, what’s the plan?” Palmeri asked Immordino.
The 2018-19 school year would be the first year the school district incurred indirect costs for the program. The figure of $359,000 was the most important figure. “If you take the $359,000 figure out and add it to the $168,000, that gives us a positive figure of $250,000,” Immordino said.
He added that due to COVID-19 “we have effectively lost the last three months of revenue” since March 2020.
“This indirect cost is getting higher and higher, what does that mean exactly? Palmeri asked the catering manager.
He responded that this increase relates to payment to the district for various services such as child care to clean kitchens, facility staff, plumbers or other technicians, garbage, etc. “Everything that catering services basically use as a service and give back to the district,” Immordino replied.
“If your overhead costs continue to rise and the cost benefits continue to rise, you’ll likely be in the red every year,” Palmeri said.
Immordino disagreed. “No, right now we’re sitting on a profit of $1.3 million which is basically the amount of money we have in our funds.”
Palmeri said, “This is from grants for the past two years due to COVID.”
Immordino said “$1.3 million came from last year.”
“Because we were getting money from the government,” Palmeri replied.
“Now will it stop or do you think your profits will increase even without the government subsidies?” Palmeri asked.
Immordino said, “The state and USDA only allow us to have what is considered three months of operating expenses. So what happens is that by law the money belongs to the food district program. Also, by law, food services are not allowed to take money from the general fund, so we are self-sufficient.
“As for three months operating expenses, about $700,000 or $800,000 and we’re double that, so we’ll get a slap (from the state) for doing such a good job,” Immordino added. .
“What we need to do is cover our costs or our fund balance and the way to do that is to knowingly go into this next school year knowing that we will suffer a loss and my estimate – which is hard to assess because of so many unknowns – it’s that we lose the $300,000 next year on paper. It’s a waste of paper,” he explained. “We will still have enough money in the fund to support whatever we need to do.
“There is a method to madness, part of which we have to comply with an acquitted law that tells us we can only have X amount of money in our coffers. The funds we have are specifically for food service,” Immordino added.
He said: “Our intention is to show a paper loss next year to reduce our fund balance. Jackson isn’t the only school district with such a high fund balance (and the USDA) doesn’t yet know how to fix it.
Immordino noted that any remedial action required had already been discussed with the state “and they are okay with that.”
He acknowledged that this was a short-term plan. “A year from now we may have to raise prices – as to what we have no idea.”