001Thank you for joining us on our committee on education. We have one resolution to hear today. This is Senate Concurrent Resolution 134, Senate Resolution 113, which urges the Department of Education to provide a detailed report to the legislature on the true cost of producing school meals to ensure transparency and avoid unnecessary price increases. To testify, please. Good afternoon, Chair Kani, Vice Chair K, members of the committee. Minoa, deputy superintendent with the Department of Education. The department stands on its written testimony which provides comments on this measure. The school food service branch currently has a system in place to identify the cost of preparing school meals and releases both quarterly and annual fiscal reports that are available to the public. Thank you for the opportunity. Thank you. And can I get a copy of your testimony,
002please? Anyone else here wishing to testify, Miss Baser? Aloha, Chair, Vice Chair, Senator Kuha, Nate Hicks, Hawaii Public Health Institute, uh, in support. Um, as you, as you've heard us testify before, we're advocating for free school meals for all of our students and we recognize that increasing costs and the production of meals might get passed on to families, um, further hindering their ability to eat during the school day. And so making sure costs are kept low can help make sure our students are fed since uh food insecurity is such a issue within our state. So mahalo for considering this. Thank you. Thank you Nate. Anyone else here wishing to testify? Angela Angela Melody Young cares providing comments. So, while I can't deny that transparency in the school system um relating to school meals is a
003very necessary goal. And yet I think the logistical concerns of this um resolution is that for example could it be an administrative burden because you would have to employ teams to get this done and instead yet I think what would be a more feasible strategy to approach this by is to do training at schools where if you have passionate teams that can learn to teach Excel spreadsheets and um so each school in the complex can then do Excel spreadsheets and then calculate the operational costs and then um you know learn about how to gather information and receipts and accounting processes for materials and supplies. I think it would be much more achievable with this plan at the school systems um and very you know non-traditional unconventional way but I think in this generation it works
004um yeah and of course the overall goal of health and nutrition is very important in the schools. Thank you. Anyone else here wishing to testify on this measure recess? members questions question do so if I heard your testimony correct it sounded as though we don't read this resolution you're saying yeah we have the information available to the public right now so but is it break down the cost I believe Can you give us an example what process how it's working now? I think we have it like um what it comes up to like 1466 for breakfast and lunch total costs. Is it broken down like how much for labor, how much for um food for preparation, how much for you have it broken down because that's what this reso is asking for, right? Mhm. Ingredients,
005cost of ingredients, operational cost, beverage cost, material and supply cost, logistical and distribution cost. Is that already? I don't think there's a detail because we have the labor cost all in one and then the food cost is all in one. But that's what this reszo is saying. So if you don't have that then that So that's not provided. I I don't think so. No, but you can provide that. I would have to go back and see if we can break it down that far. Thank you members for the question. So I guess for DOE when you saw that you're over budget in school, you know, meals what did you did someone go in and really understand what is the cost driver? Is it a material thing? Is it labor costs? Do we do we know
006right now what what why the cost driver is so high? I think it was the cost of food and then our budget was flat. So I think we started off um without sufficient funds to cover the the cost of the food. But so nobody was projecting though what on what the costs were going to be or was that a surprise or was that anticipated and we just didn't give you extra money? What what was the case? I think we knew the cost was going to go up because of inflation and everything, but I wasn't I'm not sure if we could project that that deficit. I think we figured it out after um probably in the last few months we were going to be in a hole. So, has anyone gone in though to do a
007full accounting of where the cost drivers are though? like you know have you one of your staffers just like took time to look at all the expenses and see where what where things are are at at the moment or is it just you're just looking at high level numbers of what they're reporting? Yeah, we're looking at a high the only cost we're really focusing on is the cost of the food because the operational costs I don't think we have it broken down the way that the reszo wants it broken down because I would I would imagine if you know what the cost drivers are then you can start figuring out okay is this can we get a better deal or can we cut or move around stuff because so has has there been strategic a
008strategic look at food service and and where we're spending the dollars I don't understand you want to you you want us to reduce the cost of the purchase. I'm just saying that you should be looking at it and maybe there's a different way that you can do things. But if you but you don't won't know that unless you do the analysis. So I'm assuming there is no analysis of of how the money is spent at this point. You're just saying, okay, the money spent, it is what it is. We're not going to change the way we do business. Is that is that my assessment of how things are at the moment? I don't think we're saying that. I think we we recognize that the food cost is going to go up. But but but the
009question is is did you do the analysis though? Did you start digging down and getting you know looking at line by line where where things are going to to see if there are patterns of okay this is this is going up higher than we projected or quicker than we projected. Um and maybe that's that's something that then you can make operational decisions based on that or are you just assuming okay this is the full number which it sounds like right so you haven't done that analysis then not to my knowledge okay thank you chair the questions hey I want to just follow up um I know the whole intent at some point as it was brought up testimony about doing full free school lunch across the board and it This apparently will help us to
010see what the cost is. But have you folks estimated as to uh if the federal government does not continue to supplement um school lunches, what the entire cost would be to the state for across the board school lunches, free school lunches. We're looking at it right now. I think we're focusing on um making the reduced lunches free and then probably next fiscal year making the Alice families free. And that's been the focus right now during the session. But I think what else happening in in Washington, I think we're beginning to look at what that number might be. I don't think we have it right now. And if you add in the Alice families and you add in the reduced lunches, what what's left? What student what portion of the student body that is actually paying
011for the school lunch would be percentage? the Alice people are currently playing whatever the the um sorry um we're trying to figure out if it's 250 or 300% of the poverty level that's Alice cut off and so everybody above that would be paying yeah but what that what percentage of students would be paying that we we don't have that number right now because we don't have the data that we can sort the families by their poverty level are you working on getting us those numbers at some point yeah we're trying to work with the um system that we use to sort the free and reduce applications to see if we can call those numbers out from the application forms that people are filing. And at some point, if we do do that, the funding has
012to come from somewhere. And where where are we anticipating that money comes from? We probably have to come back in next session with once we do the analysis to tell you what that number might be. So, general fund monies would have to go that has to get cut from someplace. Yeah. And then if the if you like you're saying if the um the federal government reduces the reimbursement or eliminates it's going to put us in a whole different you know problem right. So we're we're looking at all the numbers right now in fact because I know you know talk about universal free school lunches but the cost I mean if we don't print money like the federal government so somebody's program going to get caught. Agree. Okay. Thank you. So Dean, when was the last
013time that the um cost of lunches was raised? Breakfast or lunches was increased? We tried to go to the board um earlier this year uh with a staggered increase because I think the statute says we have to pay a minimum of 50% of the cost of the meal. So we staggered it over a fiveyear period to get us to that 50% number. Um, but the governor's office intervened and said that that they didn't want to do the increase in the food meals and he was going to send a governor's message down to cover the cost at least for this year. So, we never increased the the price of the school meals, but the board never approved it. Is he sending it down this year? I believe so. Well, my understanding was that um at the
014board of ed meeting that the DOE asked for an increase up to $450, $4.50. Is that correct? Yeah, we did it over, like I said, a 5year period. It was staggered over five years to get to that 50% number. And what was the response from the board of education? I think we had I don't think they took action because I think the governor's office had intervened at that point. The bunch is at 250, right? The Yeah. 250 or 275. 250. Yeah. For up to grade 275. So, so is the intention of the board not to take any action because I would assume that at some point you got to raise it something. You can't just keep it the same forever. Well, I I think this year is taking care from the governor's message. Um if
015if the law stays the same, then the board will have to take action again. But if you don't start now, like even if it's a quarter increase, you got to start something, right? But the board thinks they can just kick the can down the road and not not good because over time you want it to be you want it to be very incremental over time. Correct. So if you take no action now you're just kind of saying I think there's legislation to try and reduce that 50% down to something another percentage like 25% or something. So that's a bill that I think was moving this session. No, we we passed that bill, but but still I would think the board should be a little bit more proactive of or or at least what are you
016guys proposing something? Well, if the bill takes effect, then you know there's no chance of of getting a governor's message next year. We're going to have to go back to the board, make sure we're hitting that whatever that percentage is because maybe over five year instead of five years, it's over 10 years and you just, you know, quarter every year or something. Well, I think if it goes down to 25%, I think that's kind of where we are right now, what we're charging right now. Okay. Then you're just going to depend on coming back then and increasing your Well, if the percentage gets reduced from 50 to 25, we're charging the 25% right now. In fact, we might be above it a little bit. But it's not going to probably stay that for long. I
017would assume costs are going to increase. So, shouldn't be I would hope that you're going to be more proactive than reactive. When was the uh last time the school lunches were uh increased? I think it was like before the pandemic. I think it's the exact year. I I don't recall off hand and do you know the percent of students receiving free or reduced lunch? free and red the the the problem with getting the the numbers is the we have different numbers for breakfast. There's two different breakfast and then the three um so we don't know the number but I can give you the percentage of 104 104,000 meals we serve a day about 45% is free and about 8% is reduced 104,000 million per day. Correct. How many students in our schools? About 155,000. And
018currently, does the federal reimbursement um cover all of the free and reduced ones? They cover. Yeah. Mo the majority of it. It's not 100% that they cover. You don't know the percentage? Uh, not our fan, but I can get that. Yes, please. Okay. And what asurances do you have or do you have any assurance that this reimbursement from the feds will continue? Um, I don't want to speculate, but uh we're hoping that it stays in place. So far, they haven't uh done anything to USDA except some of the grants. But the meal reimbursement hasn't been brought up for for any changes as far as we know. But is it addressed every year at the federal level or you know do you have to go back every so many years to request the reimbursement or it's
019automatically given? It's usually automatic. Um, right now USD is looking at they they send a team down to analyze our cost and our process to see if we can increase the reimbursement amount from the federal government. And when will that It's ongoing right now. I'm not sure when their final report is going to come out because I think Alaska has a higher reimbursement than we do and we're trying to get out up close to what Alaska gets. Thank you members. Further questions? Okay. There's no further questions. Members, let's call for the vote. Recommendation would be to pass as as is. Yeah. Okay. Recommendation to pass STR 134 and SR 113 uh un amended. Uh the chair votes I votes I. Vice Chair votes I Senator Hashimoto. Hi, Senator Kuha. Hi, Senator Dort. Hi. Five eyes
020is recommended adopt. Thank you. Recommendations to adopt. Thank you. Earings.