'Smart Snacks' regulations cost district nearly $200,000

Buried at the bottom of the Fairbanks North Star Borough School District’s Fiscal 2016 budget reductions is an innocuous-sounding cut to the Nutrition Services Department.

The $100,000 cut was far from the most contentious. It was crafted in the earliest weeks of the budget process and stayed there over the course of several major changes.

Unlike many other departments being cut, Nutrition Services received little discussion in work sessions or public comment, but as departments try to cope with their new smaller budgets, Nutrition Services may have the hardest adjustment of all.

Even as Nutrition Services tries to figure out how to deal with a $100,000 cut, the department already is dealing with a loss of $192,000 in revenue.

Nutrition Services, unlike most school district departments, is considered an “enterprise” fund. That is, its funds are kept separate from other departments. At the end of the year, Nutrition Services is expected to have balanced its revenues and expenditures.

That means, if the department’s revenues drop, its administrators need to figure out how to either find a new way to generate more revenue or else reduce spending correspondingly. So, in effect, the Nutrition Services Department will be dealing with a $292,000 budget cut this year.

The department’s drop in revenue can be traced primarily back to one thing — a federal regulation that went into effect at the start of the school year. A provision of the Healthy Hunger Free Kids Act dealing specifically with snacks in schools took effect this August. The provision puts nutritional requirements and portion limits on all snacks sold on school property.

The problem for the Nutrition Services Department, according to Director Amy Rouse, is that instead of eating healthier snacks, many students simply avoid purchasing snacks at all. That unwillingness to eat healthful snacks has manifested in Fairbanks to the tune of a $192,000 drop in revenue.

In Fairbanks, school snack sales have been declining for the past decade, former Chief Financial Officer Mike Fisher told board members in October. During the 2013-14 school year, the district made $344,000 on  a la carte sales. During the 2014-15 school year, snack revenues fell by more than half.