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									Salem Public Schools
School Food Service
Local Solutions for a Strong Local Economy




Proposal for Salem Public Schools
     School Lunch Program
              May 27, 2008

              Authored by:
              Members of AFSCME, AFL-CIO, Local 294
              Parents of Salem Public School Students
              Salem Taxpayers
 PROPOSAL FOR SALEM PUBLIC SCHOOLS -- SCHOOL LUNCH PROGRAM                                            Executive Summary




                                                                                                                                      Page | ii

      Executive Summary            ............................................................................................. 1



      I.           Financial Proposal ................................................................................. 3

      2.           Menu Proposal ...................................................................................... 7

      3.           Staffing Proposal ................................................................................. 17

      4.           Management ....................................................................................... 18

                                   Increasing Free and Reduced Participation

                                   Communication

      5.           Supporting Materials .......................................................................... 20

                                   Marketing Communications Materials

                                   Policy Guidelines (subject to School Committee approval)

                                   Resource Materials


      Conclusion        In Support of an In-house School Lunch Program                                                               21

Appendices

      A.     January 2008 Lunch Count data
      B.     SHS Student Comments
      C.     Staffing Costs
      D.     Report of Site Visit to Cambridge Public Schools Food Service Department
      E.     Financial Backup Materials
    PROPOSAL FOR SALEM PUBLIC SCHOOLS -- SCHOOL LUNCH PROGRAM                 Executive Summary


INTRODUCTION

        Local 294 of the American Federation of State, County, and Municipal Workers
(“AFSCME” or the “Union”) would like to thank each of your for extending to us an opportunity
to be heard regarding Alternatives to Privatizing School Food Service here in Salem,            Page | 1
Massachusetts. Our team, consisting of food service employees, local parents, and taxpayers,
has worked for almost two years doing surveys, researching, interviewing, writing, and speaking
publicly on this subject.

The intention of this proposal is to demonstrate that the Salem Public Schools, without the
need to privatize the program, can achieve a sustainable, nutritious, financially balanced school
lunch program.

After 18+ months of evaluating the existing meals program, it is clear that the current
methodology cannot continue. The main issue and focus continues to be the excessive loss of
revenue from year to year. The loss of revenue is due to several issues, mainly:
     Very low lunch counts at the high school.
     Decreased participation in the Free & Reduced Lunch program
     Staffing numbers that do not correlate with cafeteria usage.
     Expenditures on food that do not correspond with meals purchased.

The good news is that Salem has already made the investment in the kitchens at most of our
public schools. We also have a knowledgeable staff that is very talented in the area of food
preparation.

You will see that according to our conservative numbers, we project an $81,000 profit at the
end of the next school year. This will be accomplished by utilizing the staff in a way that makes
more sense from day to day, and providing an attractive and nutritious meal choice to the
students, at a price point that is sustainable. Additionally, we propose expanding the snack
program to include every school, and taking advantage of several free programs offered by the
Department of Elementary and Secondary Education.

PROGRAM GOALS
We focus on four major goals:

              Creating and maintaining a financially self-sustainable program
              Providing tasty, healthy and expanded food choices
              Building positive, lifelong habits regarding healthy physical and nutritional
               choices through role modeling and direct training
              Stimulating the local economy and increasing “green” solutions
 PROPOSAL FOR SALEM PUBLIC SCHOOLS -- SCHOOL LUNCH PROGRAM             Executive Summary

PROPOSAL STRUCTURE

The Proposal document you are currently reading consists of six major sections.

       Section 1:    Financial Proposal – presents a full discussion of the underlying
                     assumptions along with our “worst case” scenario Pro Forma Income         Page | 2
                     Statement.
                     Bottom Line: $81,000 in revenue SC 2008-2009

       Section 2:    Menu Proposal – completely revised breakfast and lunch menus that
                     emphasize healthy, tasty, freshly-produced basic meal pattern
                     components.

       Section 3:    Staffing Proposal – outlines changes in staffing for SC2008-09.

       Section 4:    Management – presents the need to increase participation in the Free
                     and Reduced program as well as better communication between Food
                     Services and families.

       Section 5:    Supporting Materials – Marketing Communication Materials, Policy
                     Guidelines and Resource Materials

Conclusion    In Support of an In-house School Lunch Program

ADDITIONAL MATERIALS

         In addition to the materials presented in this document, our group has developed a
range of requisite materials needed to assure a smooth implementation of this proposal as of
July 1, 2008. These materials include:

      Business Plan
      5-Year Milestone Chart
      Alternative Financial Pro Formas exploring a range of present and future financial
       scenarios – with more positive outcomes
      Program marketing materials & web site upgrades
      Program policy & procedures
      Lists of Grant opportunities
      Lists of Free Resources
      Human Resource materials including job descriptions, Pay for performance options
      Large local network of Parent / Teachers / Taxpayers who are anxious to volunteer
       services and time
      Plan to fully access the capabilities of the upgraded cafeteria POS terminals &
       networking of the department computer system
 PROPOSAL FOR SALEM PUBLIC SCHOOLS -- SCHOOL LUNCH PROGRAM                  Financial Proposal

        This section is devoted to a discussion of the Financial ProForma Analysis we have
recently completed. On the next page, please find our Projected Income Statement for School
Calendar 2008-2009. This document was generated utilizing numbers from School Calendar
2006-2007 originally provided by Mr. Danizio, School Business Manager. These were the last
full year of data available.
                                                                                                  Page | 3
        Although meal counts in School Calendar (“SC”) 2006-2007 were higher than the partial
year figures for 2007-2008, District level enrollment, in particular Free & Reduced enrollment,
has been almost constant. Average enrollment for the entire District in SC 2006-2007 was
4,412, in SC 2007-2008 was 4,404, and the estimate for next year is 4,399. The slight
enrollment dip is expected to reverse starting in 2010 based on statistical data found on the
State Department of Elementary and Secondary Education web site.

        Since we believe enrollment will essentially be constant, we initially thought that the
variables that would drive program success would be price of meals and quality of food.

       However, based on our interviews and surveys, the decline in participation rates over
the past two years is not due to meal price increases. In fact, breakfast prices have not
increased for almost four years now and there has still been a decline in participation. People
who don’t choose to participate all say the same things, “I would not eat that food and I
wouldn’t serve it to my kids or any one else’s kids,” or “I will not buy the food because what
you get is not worth $2.25 or $2.50.”

       The quality and variety of the food are just plain bad. The cooks, the helpers, the
students, the teachers, the parents, the potential fundraising clients, and even comments heard
at school committee meetings, all focus on:

      the lack of sensible ingredient purchases,
      excessive deletion of advertised menu choices,
      the lack of usefulness of the ingredients provided to the cooks,
      the lack of expanded food and snack choices, and
      serious degradation of the quality of ingredients.

   Therefore, our financial proposal focuses primarily on increasing participation rates in a
number of areas. However, we have also looked very carefully at managing costs, specifically
many of the component costs of meals, supplies, benefits, and salaries.

   We believe our estimates are quite conservative. In many cases, our estimates are less than
than those assumptions made by the Recommended Bidder, yet we are showing an $80,000+
profit.
 PROPOSAL FOR SALEM PUBLIC SCHOOLS -- SCHOOL LUNCH PROGRAM                        Financial Proposal

                                      PRO FORMA ASSUMPTIONS

Revenue Assumptions

                    Assumption                                          Based On
    Federal Receipts show an increase of 7.85%       5% increase Elementary School Breakfast &     Page | 4
     based on Meal Count assumptions                  Lunch; 20% increase Collins Middle School and
    State Receipts show a decrease of (9.76%)        Salem High School Breakfast & Lunch.
     based on Meal Count assumptions*
    Local Receipts show an increase of 26.18%        An increase in choice and quality of food
     based on Meal Count assumptions*                 should attract students, teachers and staff to
                                                      purchase meals in school cafeterias.
    A la carte SHS Breakfast – an estimate           Introduction of coffee and prepackaged “grab
     average $250 gross sales a day                   & go” options, as well as fresh fruit.
    Snacks at SHS - estimate average of $500         This assumption maintains the current level of
     gross sales a day, current (SC2007-2008) sales   snack sales. However, it would be fairly easy
     support this figure                              to increase sales in this area given an increase
                                                      in available labor and sales on multiple floors.
    Snacks at Elementary Schools – estimate          That’s an average 60 students per day per
     average of $150 a week gross sales per 7         school at and average cost of .50¢ per snack.
     schools.
    Increase Milk cost to .50 (increase of .10¢),    Milk prices are expected to shoot up 30-40%
     Increase Breakfast at Elementary & Collins to    during upcoming school year. There has been
     $1.00 (increase of .20¢) and SHS Breakfast to    no recent increase in breakfast price for 4
     $1.25 (increase of .45¢). The Breakfast          years. The quality of the breakfasts will be
     increases are included in the Federal, State &   vastly improved as well.
     Local Receipts.

Expenditure Assumptions

                     Assumption                                            Based On
    Salaries – 2% increase in salaries, add 4 – 15   Previously negotiated. Movement toward
     hour/week staff at SHS at a rate of $11/hr       gradual reduction of Full-Time staff through
                                                      attrition as well as changes in hourly rate for
                                                      new employees will gradually decrease benefit
                                                      costs to the program.
    Benefits – 6% increase, 21% Employee cost,       Costs to the program are increasing
     79% SPS cost, deduct benefits for 1 full-time    approximately 6% in Year One. Employees will
     kitchen staff member (Family Benefits) due to    be paying roughly 1% more each year for the
     retirement                                       next three years.

Expense Assumptions

                   Assumption                                          Based On
    Food – 10% increase from SC2006-2007               $25,000 more than Recommended Bidder’s
                                                        food costs
    Equipment – 10% increase                           To cover maintenance costs and any new
PROPOSAL FOR SALEM PUBLIC SCHOOLS -- SCHOOL LUNCH PROGRAM                    Financial Proposal

                                                      equipment purchases.
   Supplies – 10% increase in cost                   
   Deduct $6072 Carlton’s “green” supplies            Explore Shared cost or pilot for
   Deduct $3491.99 for outsourcing HACCP                alternatives
    inspections (can be done in-house)                 HAACP certified employee on staff
   Launch a pilot program using existing stock of     Breakfast trays are costing more than    Page | 5
    plastic reusable trays                               Lunch trays and are made out of
   Buy all the same trays for breakfast & lunch.        Styrofoam! Eliminate Styrofoam!
    Breakfast trays $24/500 = $7062.91 Lunch           Improved inventory controls could reveal
    trays $17.60/500 = $19,145.17 / Use only lunch       additional savings.
    trays $24,324.64 / Potential savings of
    $1,883.44
   Meals Tax – increase staff participation by 20%
                       PROPOSAL FOR SALEM PUBLIC SCHOOLS -- SCHOOL LUNCH PROGRAM              Financial Proposal


The following is an SC2008-09 forecast, based on the assumptions stated above:                                 Page | 6




                                                                                   Page | 6
 PROPOSAL FOR SALEM PUBLIC SCHOOLS -- SCHOOL LUNCH PROGRAM                     Menu Proposal


                         Menu Improvements at Salem High School

       According to data from January 2008 (see Appendix A), only 34.5 % of students at
Salem High School purchased lunch, either through the Free & Reduced lunch program or
by purchasing at full price. Of these students, only 62% of students eligible for free lunch     Page | 7
and 37% of students eligible for reduced lunch participated. For a school with a closed
campus, in which students are not able to leave the school grounds during lunch period,
these are very depressed numbers.

        Just by soliciting comments and suggestions from the high school population,
including students and staff, the reasons for the drop in lunch purchases are clear: the need
for better quality food, better food choices, and less time in line waiting for food and
waiting to purchase a meal. The students want to be heard, as illustrated by a student
meeting with school committee members where the majority of the meeting was about the
cafeteria. Appendix B lists the concerns and wish list compiled by the Salem High School
students.

       To this end, we are proposing that the high school cafeterias provide several meal
choices every day in all three cafeterias. A sample of the menus for the high school can be
found at the end of this section.

        The recent move at the high school to sell snacks again has netted the food program
an average of $500 a day. The sale of healthy “A list” snacks, is a real boost to revenue.
This enables the students who bring a lunch, or who may not be hungry for a full lunch to
get something that is smaller but still nutritious. These snacks can also be purchased for use
after school, before activities or athletic practices.

       Likewise, data from January 2008 shows that only 7.34% of students purchase
breakfast. 18.5% of students eligible for free breakfast and 6% of students eligible for
reduced price breakfast participated in the school breakfast program. Our intent is to
increase these numbers by drawing students into the cafeteria with better food, (including
hot meals, yogurt parfaits, made from scratch muffins), the addition of coffee and tea, and
the addition of several “grab & go” items (muffins, granola bars, fresh fruit, etc.). In
addition, advertising in the main lobby with large breakfast menu signs will encourage
students to go to the cafeteria to check out the offerings. A sample menu for the high
school breakfast program is attached with this section.

       Although food quality and choice is extremely important, presentation is as
important. If the food is presented in a haphazard, cluttered, hard to see or obtain manner,
sales will not increase. The serving lines in the cafeterias will be reworked to maximize
throughput as well as increase presentation quality. We will also work with the art
department to create colorful, eye-catching signs for each “station”.
       PROPOSAL FOR SALEM PUBLIC SCHOOLS -- SCHOOL LUNCH PROGRAM                       Menu Proposal

                      Menu Improvements at Elementary and Middle Schools

      Like the high school, students at the elementary school want and deserve more
      nutritious meals, including more “from scratch” items. Again, offering choices will bring
      in more student participation. Sample menus for the elementary and middle schools
      can be found at the end of this section.                                                Page | 8


      Changes to the school breakfast program at these schools include more nutritious
      choices and a well advertised menu.

      In an effort to increase revenue at the elementary school level, snacks will be sold during
      the breakfast period for students to eat during snack time. These will be from the
      healthy “A-List” of approved snacks, and will serve as a way to make snack preparation
      easier for parents. Snacks will sell for .50 each.

                                       QUALITY SCHOOL MEALS

       Healthy school meals provide energy and nutrients children need for sound minds
and bodies. Studies confirm what parents and teachers have said for years – children who
are not properly nourished have difficulty learning. The variety of healthy food offered in
school meal programs allows children to enjoy many different foods and develop healthy
eating patterns. Our proposal intends to initiate, or expand upon existing, key components
used by School Food Services around the world to deliver quality school meals. Such
elements include:

       Schools offer lunch, breakfast, and after school snack programs, and students are encouraged
        to participate.
       The Child Nutrition Programs are administered by School Food Service staff that is properly
        qualified according to current professional standards.
       All School Food Service staff have appropriate pre-service training and regularly participate in
        professional development activities.
       School meals are planned with input from students and include local, cultural, and ethnic
        favorites of the students.
       Menus meet nutrition standards established by the U.S. Department of Agriculture, conform
        to good menu planning principles, and feature a variety of healthy choices that are tasty,
        attractive, of excellent quality, and are served at the proper temperature.
       School Food Service staff use food preparation techniques to provide school meals that are
        lower in saturated fat, sodium, and sugar. the offer healthy food choices that include lean
        meats, fruits, vegetables, whole grains, and low-fat or non-fat milk.
       School meals are marketed to appeal to all students, who are encouraged to choose and
        consumer the full meal.
   School meal participation rates are approximately the same for paying students as for
        students eligible for full and reduced price meals.
    PROPOSAL FOR SALEM PUBLIC SCHOOLS -- SCHOOL LUNCH PROGRAM            Menu Proposal

                               ATTACHMENTS TO THIS SECTION
Breakfast Menus
       Elementary Schools
       Collins Middle School
       Salem High School                                                                 Page | 9


Lunch Menus
      Elementary Schools
      Collins Middle School
      Salem High School
              Regular Menu – this is a 1 week sample of a 4 week set of rotating menus
              A la Carte
PROPOSAL FOR SALEM PUBLIC SCHOOLS -- SCHOOL LUNCH PROGRAM   Menu Proposal




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PROPOSAL FOR SALEM PUBLIC SCHOOLS -- SCHOOL LUNCH PROGRAM   Menu Proposal




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PROPOSAL FOR SALEM PUBLIC SCHOOLS -- SCHOOL LUNCH PROGRAM   Menu Proposal




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PROPOSAL FOR SALEM PUBLIC SCHOOLS -- SCHOOL LUNCH PROGRAM   Menu Proposal




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PROPOSAL FOR SALEM PUBLIC SCHOOLS -- SCHOOL LUNCH PROGRAM   Menu Proposal




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PROPOSAL FOR SALEM PUBLIC SCHOOLS -- SCHOOL LUNCH PROGRAM   Menu Proposal




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 PROPOSAL FOR SALEM PUBLIC SCHOOLS -- SCHOOL LUNCH PROGRAM   Menu Proposal




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 .
 PROPOSAL FOR SALEM PUBLIC SCHOOLS -- SCHOOL LUNCH PROGRAM                   Staffing Proposal

                                      Staffing Proposal

Changes in staffing for SC2008-2009 are as follows:
           Loss of 1 full time cook, with benefits (family plan) due to retirement.
           Addition of 4 part time staff at the high school, at a starting rate of $11/hour,
                                                                                              Page | 17
              in accordance with the new contract.
           Addition of $80/month (10 months) stipend to a HACCP certified employee.
              This will negate the need for an expenditure of $6,000 to a private company
              to perform HACCP inspections.

The additional part time staff at the high school is made possible by the retirement of a full
time cook. The plan is to use these extra workers at the high school to improve the service
and payment throughput.

By using in-house certified HACCP inspectors, we will see a total savings of $3,491.99. The
HACCP inspector will use one day per month to perform the school kitchen inspections.

All other staffing levels remain the same. For details on staffing, and the savings incurred by
using in-house HACCP inspection, see Appendix C.
 PROPOSAL FOR SALEM PUBLIC SCHOOLS -- SCHOOL LUNCH PROGRAM                      Management

               Increasing Participation in the Free & Reduced Meals Program

        It is critical to the financial status of the meals program that all students who are
eligible for Free and Reduced meals have completed the application properly. As stated
above, changes to the application form, to make the presentation easier to understand,
must be made. In addition, the Food Services Department can request help from the state Page | 18
to provide a knowledgeable person to come into the schools and meet with parents who
may have questions or concerns about their eligibility or problems in completing the form.
Also, schools can take advantage of events in the beginning of the year which draw a large
number of parents, to provide help in filling in the application. Examples would be the first
day of school, when many parents in the elementary schools bring their children in to meet
the teacher for the first time, or on a Back to School Night when many parents come into
the school to learn about their child’s classes. The School Outreach Counselor may also be a
great resource in helping families to sign up for the program, especially when their financial
situation changes during the school year.

       Proper use of the Free and Reduced meals program will cut down on the number of
students who run up a large debt in their meals account, due to the family’s inability to pay.

                              Improvements in Communication

        Communication between the Food Services Department and parents and students
in the district is critical to a well run, well used program. Communication of menus,
payment methods, and help with Free and Reduced lunch applications are the main areas
we will focus on.

        Many parents have commented that they are not aware of the lunch and breakfast
menu at their child’s school. Most schools rely on the students bringing a paper copy of the
menu home with them to share with their parents or guardians. As many parents know,
this method does not always result in the parent receiving the menu. All school lunch and
breakfast menus will be posted on the district website, in an easy to access manner. We are
very lucky to have a newly designed district website, with a section already set aside for the
Food Services department.

        Most parents in the district are unaware that they can prepay for their child’s lunch
and breakfast. All students are given a meals account which is accessed through their
student ID number. Complete instructions on how to prepay for school meals must be
included on the district website, as well as communicated via the menu. In addition, the
policy on non payment of the student’s meal account must be communicated directly to the
parents both on paper and on the website.

        The Free and Reduced meals application form needs to be redesigned to make it
easier for parents and guardians to understand. In addition, the form needs to make it clear
    PROPOSAL FOR SALEM PUBLIC SCHOOLS -- SCHOOL LUNCH PROGRAM                    Conclusion

that ALL parents must complete and return the form, even if their child is not participating
in the program. The application, in English and in Spanish must be found on the district
website, with a contact person for questions about completing the form. It is imperative to
the Salem School Lunch Program and to the health of the students that all who are eligible
for free or reduced meals take advantage of this program.
                                                                                           Page | 19
 PROPOSAL FOR SALEM PUBLIC SCHOOLS -- SCHOOL LUNCH PROGRAM                 Sample Materials

The following materials are attached within this section:

Marketing Communications Materials
      A. Meals Application Form
      B. School Lunch Program Brochure

Policy Guidelines
        A. School Nutrition Guidelines
        B. Meal Charge Policy

Resource Materials
      A. USDA-Directory of Chefs for Nutrition Partnerships
      B. USDA-Resource Library
      C. Project Bread – Simple Ways to Increase Breakfast Participation
  PROPOSAL FOR SALEM PUBLIC SCHOOLS -- SCHOOL LUNCH PROGRAM                                         Conclusion

Why Support an In-House School Food Service?

        Salem’s School Lunch Program is positioned to take advantage of the many cross
over opportunities for educating students how to eat properly as well as generating
revenue to make the function self-sustaining. A host of studies now exist that strongly
support the long-believed notion that a properly-fed (note we are not saying “well fed”)
child behaves better, learns better, and performs better. Statistical studies strongly suggest
that children who eat the right kinds of foods and engage in physical activity every day
dramatically increase their MCAS scores. (See Appendix D: Cambridge Public Schools Site
Visit) Further, it is clear that lifelong healthy eating is easier to sustain when fostered in
childhood – making school meals the logical front line in the national healthcare war on
obesity.

        Private companies realize school meals programs, and the horizontal marketing
opportunities for their various subsidiary companies, can be real money-makers for their
shareholders. Districts, desperate to offset rising benefit costs tend not to look too deeply
under the covers as to what the costs and benefits are when handing over their food service
function to an outside company. Although the privatized bottom line may look good up
front, invariably pricing to the clients increases while quality of products and services
decrease very quickly, usually within the second contractual year. Below are just a few of
the many compelling reasons to take adequate time to really consider the longer term
consequences of privatization.

      Common Practices in Privatization                     Why is this a Lost Opportunity in Salem?
Often, only about 25% of the revenue generated          If an outside company can generate $200,000 in
goes back into the district food service, while 75%     revenue from school meals programs, approximately
of the revenue generated goes right into the            only $50,000 will come back into the school district,
pockets of large, often foreign, investors.             leaving $150,000 that could be used for a huge
                                                        number of other educational purposes.
Companies entice districts into purchasing their        When a district has well trained personnel and state-
services with guarantees of performance, but often      of-the-art facilities, a little management discipline
miss the revenue targets projected in their initial     and creativity can generate excellent revenue results.
proposals. They tend to decrease quality of food        Local people running a local function, perhaps
and increase prices to full-paying parents within 2 –   incentivized with a performance bonus option, has
3 years of the initial contract.                        been a proven, successful alternative to empty
                                                        privatization guarantees.
Companies use this opportunity to horizontally          Cooking and preparing fresh foods in the school
market their affiliated-company products to young,      cafeteria conditions students to eat properly from a
unsuspecting students – conditioning them to            vast array of fresh fruits and vegetables, as well as
purchase affiliate products over time.                  low- or no-processed meats and snacks.
Companies promote cafeteria improvement plans           Student-run improvement programs have been
that amount to window dressings, like the addition      shown to increase participation in school meals. It is
of cute signs or bistro lighting, for which taxpayers   often true that students respond very positively to
have to eventually pay. These “improvements” can        fellow student efforts at designing, cooking or
cost $100,000 or more depending on the extent of        demonstrating meal preparation at school.
the changes recommended, add to the debt being
serviced, and do little to increase participation.
    PROPOSAL FOR SALEM PUBLIC SCHOOLS -- SCHOOL LUNCH PROGRAM                        Conclusion


        Private company solutions do have a place in some school districts. In truth, many
school districts around the country benefit tremendously from privatization. However,
those that do benefit are often the poorest, with decrepit facilities and few resources to
attract or train talented staff. Private companies can also offer decent management and
disciplined accounting policy. However, these components are in place more to satisfy thePage | 22
shareholders in the private company than the customers in the school district – taxpayers,
parents, students, teachers

        Also, let’s not forget that a private company is not a democracy, but a school
district is subject to democratic process. It is easy to like the efficiency of a well run
company, but it is hard to maintain democracy in a well run company. They have
Chairpersons and a small group of Directors for a reason. Efficiency.

       In short, everyone involved agrees that Salem’s School Food Service department is in
immediate need of remodeling. However, the basic elements of a truly great department
are currently in place. Salem has new kitchen facilities, new systems technology, and well-
trained, motivated employees at all our schools. Lack of any of these critical ingredients
might be a good reason to privatize. HAVING these critical ingredients is a good reason to
support our proposed restructuring of the department in such as way as to meet the
primary program goals of Salem’s constituents.

								
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