Of Michigan’s 539 public school districts, 43 percent — 232 districts — contract out for food services.
School food service has unique regulations, such as federal guidelines about nutritional content, and subsidies to pay for the meals of children from poorer families. One regulation says that food service revenue cannot be transferred to other parts of the school budget. In other words, districts can’t pay teachers with cafeteria profits. Districts that operate their food services at a loss, however, would need to transfer money from their general fund to food services, giving them a financial incentive to explore privatization.
Food service was the most frequently contracted service in 2003, and its use grew steadily from 2009 to 2015 before leveling off.[*]
Graphic 2: Food Service Contracting, 2003, 2005-2018
Four districts entered into a food service contract between our 2017 survey and our 2018 survey, and five districts brought services back in house.
Center Line Public Schools recently contracted with a leasing company for 30 food service employees, and it reported saving money. Corunna Public Schools recently decided to contract out food service management, replacing the former lunch supervisor. Olivet Community Schools contracted out food services for staffing reasons. Swartz Creek Community Schools also contracted out the service.
Beaver Island Community School used to get meals from a local restaurant; it now has its own food service. Camden-Frontier Schools decided to bring food service back in-house to retain its food service director; it also reported that insourcing will cost between $4,000 and $5,000 per year. Hale Area Schools also switched to in-house service, but reported no savings from doing so. Hopkins Area Schools was dissatisfied with a third-party service and decided to hire a food service director in-house. It reported that there may be a significant cost savings, though that will be unclear until after an audit. Iron Mountain Public Schools took over its food service program, which had been operated by Bishop Baraga Catholic School, after the Catholic school ran into financial difficulties with it.
[*] The initial survey, conducted in 2001, only asked whether the district contracted out food, custodial or transportation services. Starting in 2003, the survey asked whether the district contracted out each service.