Annual Food Service Director’s Training Meeting Food Service Funds in New Construction/Renovation...

Annual Food Service Director’s Training Meeting

Food Service Funds in New Construction/Renovation Projects

Presenter:Greg Dunbar

ManagerKDE District Facilities Branch

May 16, 2013


For new construction and renovation

it has been common practice to utilize Food Service Funds to purchase kitchen equipment in new construction and renovation projects and in some cases to renovate kitchen spaces

Recent review of the practices by KDE has caused a reevaluation of how this process is to be undertaken!

http://www.google.com/url?sa=i&rct=j&q=school+lunch+rooms&source=images&cd=&docid=Ra1QRFKs2a2f6M&tbnid=ykj-Xa2qGDqAhM:&ved=0CAUQjRw&url=http%3A%2F%2Fwww.sogoodblog.com%2F2011%2F02%2F10%2Ffoods-grants-schools-500-salad-bars%2F&ei=nfCHUb6EMYLc9ATko4HIAg&psig=AFQjCNFTKBi-NWhrTIKtfuPom1zypJId-A&ust=1367949844557374

http://www.google.com/url?sa=i&rct=j&q=school+lunch+rooms&source=images&cd=&docid=hMgeqMnedyMlnM&tbnid=Ch3Zl8lQRjtd4M:&ved=0CAUQjRw&url=http%3A%2F%2Fwww.boston.com%2Fnews%2Flocal%2Farticles%2F2009%2F02%2F05%2Flets_redo_lunch%2F%3Fpage%3Dfull&ei=uvCHUaOaF5Gu8ASe44CYCQ&psig=AFQjCNFTKBi-NWhrTIKtfuPom1zypJId-A&ust=1367949844557374


“The Healthy, Hunger-Free Kids Act of 2010 (the Act), Public Law 111-296 and Child Nutrition Reauthorization 2010: Indirect Cost Guidance”

http://www.fns.usda.gov/cnd/Governance/Policy-Memos/2011/SP41-2011 os.pdf

http://www.google.com/url?sa=i&rct=j&q=school+lunch+rooms&source=images&cd=&cad=rja&docid=k7TvrbZN6NMjhM&tbnid=5Cfs0kqoDBFPTM:&ved=0CAUQjRw&url=http%3A%2F%2Fwww.washingtonpost.com%2Fblogs%2Fworldviews%2Fwp%2F2013%2F01%2F28%2Fhow-japans-revolutionary-school-lunches-helped-slow-the-rise-of-child-obesity%2F&ei=8_CHUYSAEofa8wTBgoHwBQ&psig=AFQjCNH0mssVzGx_JM2AhNc-QG25B1sf6w&ust=1367949914136139


The use of these funds must be clearly noted on the BG-1 as a fund source under “Other” and noted as “Food Service Cash”.

“CASH” because you cannot commit these funds to an annual bond payments

These are Federal Funds and must be spent as such.


These funds cannot simply be lumped into the funding mix

These are subject to bidding requirements that do not necessarily apply to other parts of the project that utilize State of local funding



Project costs are broken down on the BG-1 as noted below.


The sources of the money that will be used for the Project varies also

Funding for School ConstructionRestricted Funds

Used for “Capital” construction or “major” renovation, come from multiple sources and include;

Student Population BasedCapital Outlay FundsProperty Assessment BasedBuilding Funds and Growth leviesFacilities Support Program of KY Qualified Needs BasedKY School Facilities Construction CommissionUrgent-Needs GrantsQZABs

Funding for School Construction Student Population Based Funding Capital Outlay Funds are included in the “SEEK” formula. These are

calculated at $100 multiplied by a district’s ADA. These monies can be used for direct construction costs. Since these funds are yearly-generated funds, they can be used to pay for direct debt on bonds that can be issued on the behalf of local school districts (80% of the total funds calculated can be used for debt service).

Funding for School Construction Property Assessment Based Funding Local Building Funds Five cents of every one hundred dollars ($100) of a local

government’s property tax revenues is granted to the local school district to pay for capital construction projects. This money may be saved and used directly or, since it is a yearly-generated sum, it can be used to pay the debt on bonds that can be issued on the behalf of local school districts. This is sometimes called the “local nickel”. These funds can only be used on priority projects and can be selected by the LEA in any order desired, subject to the approval of the Division of Facilities Management.

Facilities Support Program of Kentucky (FSPK)

The Facilities Support Program of Kentucky (FSPK) funds are included in the “SEEK” formula. These funds are used to equalize funding for districts with low property assessments as a percentage of the Average Daily Attendance. These funds can only be used on priority projects and can be selected by the LEA in any order desired, subject to the approval of the Division of Facilities Management

Funding for School Construction Qualified Need Based Funding Kentucky “School Facilities Construction Commission Funds” (SFCC)The Kentucky School Facilities Construction Commission (SFCC) is a separate

state agency that provides funding to districts based on the unmet facility need as identified in the District Facilities Planning process. Funding for this program is requested from the General Assembly by the Commission every two (2) years. The unmet need is calculated during the District Facilities Planning process. The “unmet need” of all of the districts in the State is combined to create the State unmet need. A portion of the total is funded by the General Assembly and each district is allocated money based on their percentage share of the total fund. These funds can only be used on priority projects, based on their priority order; for example, priority 1 projects shall be completed prior to priority 2 projects. All projects within a numbered category (i.e., 1a through 1d) are considered equivalent and can be selected by the LEA in any order desired, subject to the approval of the Division of Facilities Management.


The sources of the money that will be used for the Project varies also


These are Federal Funds and must be spent as

such. SFA cannot charge normal maintenance costs directly to the nonprofit school food service account if such costs are included in the school district’s indirect cost pool


Renovation


Costs of normal repairs and alterations is allowable so long as they:

(1)keep property in an efficient operating condition;

(2) do not add to the permanent value of the property or appreciably prolong its intended life

(3) are not otherwise included in rental costs or other charges for space.


Renovation

These are Federal Funds and must be spent as such. FSFs have been allowed for renovations within the inside perimeter of a kitchen/cafeteria space

EXAMPLE; cutting away a wall to allow room for a walk‐in refrigerator would be an allowable expense because it is necessary to accommodate increased participation of students in the SMPs.

It would be unallowable if it was purely an aesthetic matter



such.

New Construction

Food service funds are to be used only for the operation or improvement of such food service.

Food service funds shall not be used to purchase land or buildings, or to construct buildings,



such.

New Construction

The costs of building a kitchen, just as the school building and its contents, should be shall be borne by the school district using funds other than Food Service



such.

New Construction

Food service equipment can be purchased with Food Service Cash

PROVIDED:



such.

New Construction

• Equipment must be bid separately from the bidding of the rest of the project;

• Labor for installation must use wage rates as outlined under provisions of the Davis-Bacon Act

• Bidding shall comply with other Federal guidelines as required.



such.

New Construction

• Bid Food Service Equipment as an “Alternate”

• Clearly outline in the contract documents the terms under which this equipment is to be bid



such.

New Construction

Cost contracts and cooperative purchase agreements can only be used if they were procured using the Federal Guidelines noted herein


Don’t get strong armed into committing Federal Money on items that are inappropriate for these funds.

Future Challenges for KY SchoolsOver 40% of the School Districts in the Commonwealth will experience a decline in enrollment in the next 25 years while at the same time some school districts will experience tremendous enrollment increases.

At the same time all of the School Districts in the Commonwealth will experience an increase in their over 65 population that will double the population in this age group.

SEEK Funds may diminish.

Building space inventories may increase, if inventories are not controlled.

Citizens with no children in school will make up the bulk of taxpayers.

Local funding may become more critical.

Establishing a revenue stream to provide an adequate/sustainable infrastructure to support a modern educational program with the latest technology is crucial.

How will we continue to maintain our building inventory with fewer resources?

Continue to work as professionals with

your district design consultants legislators the general public

To educate them on the funding and resources that are available and

appropriate to the situation.

“Focus on the Kids”

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Annual Food Service Director’s Training Meeting Food Service Funds in New Construction/Renovation...

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