March 29, 2005

SUBJECT:  OPTIONS REGARDING FUTURE OF SENIOR LUNCH PROGRAM AND BUDGET MODIFICATION NO. 29 (RTC 05-093)

REPORT IN BRIEF

Over the past few years, the Senior Center’s lunch program has come to Council’s attention on several occasions. During this time, the lunch program has undergone a number of changes and is currently provided through contract with Bateman Senior Meals of Santa Clara. The existing short-term agreement with Bateman Senior Meals (a pilot program in accordance with an overall strategy shared with Council during last year’s budget reductions) expires April 30, 2005, but provides the possibility of entering into a 30-month agreement, which would require Council’s approval. This report offers for Council’s consideration, a number of possible options relative to provision of a senior lunch program and gives pros and cons for each.

Staff is recommending Council establish specific service levels that can be used to request proposals from the food service industry, provide a reduction in current participant lunch fees and approve Budget Modification No. 29 to provide funding for Bateman Senior Meals services until September 2005.

The Parks and Recreation Commission reviewed this report during a special public meeting held for this purpose on March 21, 2005, and recommended that Council accept staff’s recommendation Alternative No. 1. (Motion passed 3-1 with Pole dissenting and Arnett absent.)

BACKGROUND

20-Year History of Senior Center Lunch Program

The following is a brief history of the senior lunch program in the City of Sunnyvale and factors that influenced changes in the program:

1984-1994

• Prior to 1984, the City of Sunnyvale did not provide a senior lunch program. There was (and still is today) a County nutrition site, operating at the First United Methodist Church on Old San Francisco Road with financial support from several sources, including $22,555 through Outside Group Funding from the City of Sunnyvale for FY 04/05.
• In 1984, the City of Sunnyvale opened a Multi-Purpose Senior Center and entered into an agreement with the De Anza College food service training program for disabled students. The City’s role in this program was to plan the meals, purchase food, and provide a fully equipped kitchen and kitchen manager. DeAnza College provided supervision and instruction for students in food preparation, serving and clean-up. At that time, the total estimated subsidy was $50,000. (Please see Attachment A - RTC #84-139 Senior Center Nutrition Program.)
• The senior lunch program with DeAnza College ran successfully for several years. However, when DeAnza College discontinued their training program (approximately 1987), the City absorbed the entire operational cost in order to maintain the program.
• In the early 90’s, the Recreation Division transitioned to the Community Recreation Fund, an enterprise type fund. The City created a comprehensive food service program that included the senior lunch program, operation of the Sunken Gardens Golf Course Restaurant and a newly developed catering business. The business plan projected the generation of sufficient profit from the restaurant and catering to offset the subsidy needed for the senior lunch program.

1994-2004

• In 1994, the City followed the recommendation of an independent financial feasibility study of the Community Recreation Fund’s food services efforts in creating service models with self-sufficiency as a major goal. (Please see Attachment B - Feasibility Analysis by Block and Associates, 1994.)
• In 1995, the consulting firm, Saign & Associates, addressed food services at the Senior Center and reported: “The resident user is currently paying $2.00 for a meal that costs $8.00 and the Center is serving only 60 meals a day. In all, only 150 citizens are using this service in which the City is subsidizing almost $100,000 per year.”  (Please see Attachment C – Product Design Project by Saign & Associates, 1995.)
• Over the next ten (10) years, a variety of service models were utilized in attempts to meet the goal of self-sufficiency. During this time, the City came to realize that the Sunken Gardens Golf Course restaurant was essentially a support component to the golf course and not a profit center. Furthermore, catering alone could not fully support the senior lunch program annual subsidy, which during the 1990’s grew to over $100,000 per year. The various service models placed some labor costs in different accounts from one year to the next. This resulted in comparative data is that is very limited in illustrating an accurate unit cost or overall subsidy.
•  In FY 01/02, the City budget was adjusted to show a transition of the senior lunch program to a cost-recovery program over a three-year period by FY 04/05. This action was taken because none of the various service models over a ten-year period provided enough revenue to reach self-sufficiency goals for the senior lunch program.
• In January 2003, prior to opening the new Senior Center, a key food service employee moved out of the area, causing the City to re-examine the food service program. In an effort to reduce costs to the City, the decision was made to recruit a private operator.
•  In April 2003, prior to adoption of the FY 2003/04 budget, staff brought challenges related to the senior lunch program to Council’s attention. (Please see Attachment D - City Manager’s Letter of Transmittal for Recommended FY 03/04 Budget and Ten-Year Resource Allocation Plan.)
• On May 7, 2003, as the new Senior Center was preparing to open, an RFP was issued with the intent of locating a private food service operator who could continue offering a similar senior lunch program, at no cost to the City, in exchange for use of the Senior Center’s kitchen and exclusive catering rights. The City entered into a temporary agreement with Events of Excellence that called for the subsidized cost of the senior lunch program to transition to Events of Excellence, with all costs assumed by Events of Excellence starting in FY 04/05.
• By July 1, 2003, the Parks and Recreation Department transitioned from the practice of using “temporary” workers for ongoing labor to hiring City employees. As a result, the City assumed additional costs of increased pay and benefits for the reclassified full-time and part-time City positions. The actual subsidy for FY 02/03 was $128,394.
• On July 19, 2003, the new Senior Center opened. For the first six (6) weeks, the kitchen was not available for use until clearance from the Health Department was received. Cold lunches were prepared in the Community Center’s Ballroom kitchen and delivered to the Senior Center in order to continue providing the lunch program while the new kitchen was closed. Numerous complaints were received from the participants in response to the reduced quality; attendance dropped by 50% during that time.
• On November 20, 2003, City Council members and Parks and Recreation Commissioners received a memorandum from the Parks and Recreation Director which reaffirmed that staff was currently acting in accordance with the action plan previously shared with Council and that staff’s actions were intended to protect the general framework of the senior lunch program in the face of increasingly difficult financial times. (Please see Attachment E – Memorandum from Robert A. Walker, Director of Parks and Recreation, Subject: Senior Lunch Program—Rumor Control.)
• In December 2003, staff presented a Study Session on the senior lunch program to the Parks and Recreation Commission. The presentation outlined problems associated with the senior lunch program and difficulties with managing demand of a heavily subsidized program.
• On June 1, 2004, Events of Excellence gave a thirty-day notice indicating they would not enter into a long-term agreement to provide the senior lunch program. Despite efforts made over 10 months, Events of Excellence was unable to create enough revenue from use of the new kitchen facilities and exclusive catering rights, to offset the subsidized cost of the senior lunches. The actual annual subsidy for FY 03/04 was $147,041.
• In July 2004, the City entered into a temporary short-term agreement with Bateman Senior Meals, to be followed by a possible 30-month agreement. However, attendance in the program dwindled from an average of 85 per day to less than 25 per day. Participants express dissatisfaction with quality and quantity for the cost as compared with previous providers at the Senior Center and programs offered at local nutrition sites. Staff took various measures to address concerns raised by participants, including re-negotiating the contract with Bateman Senior Meals to add enhancements to the meals.
• During FY 04/05, participation in the lunch program declined significantly as a result of changes made to create a cost-recovery lunch program. Efforts to increase customer satisfaction and participation have taken an inordinate amount of staff time and resources, resulting in little or no improvement in customer satisfaction or participation. Currently, it is estimated these efforts will result in a year-end over expenditure for the senior lunch program of $80,000.
• City Manager and City Council have been informed of developments with the senior lunch program during FY 04/05 by Parks and Recreation Director,  through Friday Reports (Please see Attachment F – Memorandums from Amy Chan, City Manager, Subject: Friday Report, Updates on Senior Lunch Program, January 14, 2005, November 12, 2004, and July 23, 2004.)

Description of Current Program

The current budgeted service level is:  “To enhance physical and mental health and socialization of adults aged 50 or older and individuals with disabilities in order to reduce dependence on families and more expensive public assistance by providing nutritious meals in social setting five days a week, so that there are 21,000 meals served or participant hours, with the overall customer satisfaction rating of 85% is achieved.” This service level is currently budgeted for a subsidized cost of $3,957 to cover the cost of planning and promoting the monthly menu.

The current senior lunch program is intended to provide opportunities for socialization and consists of meals served Monday through Friday in the “Orchard Café” of the Sunnyvale Senior Center. Meals are prepared off-site and delivered to the Senior Center. The meal includes: soup or salad, bread and butter, beverage (coffee, tea or milk), hot entrée, and dessert. Participants may make reservations for an alternate meal choice of chef’s salad, tuna salad, or hamburger. The City is required to provide a guaranteed lunch count to Bateman Services 24 hours in advance. Participants are encouraged, but not required, to make reservations in advance by phone or in person to guarantee their space. Extra meals are ordered daily to accommodate drop-in customers on a first-come, first-serve basis. A supply of frozen meals is on hand in order to accommodate additional customers if needed. The cost for any extra meals that are not sold is absorbed as a loss by the City.

The fee charged for the lunch meal is $4.50 for members of the Senior Center with advance reservations; $5.00 without advance reservations, and $7.00 for non-members or visitors. The fee charged seniors does not cover the actual cost estimated at $14.44 per person to provide the meal for 25 participants. This includes labor, food, equipment, supplies and some supervisory costs. (Please see Attachment G – Senior Lunch Program Cost Analysis-Current Program.)

The current service is falling far short of the Service Delivery Plan outcomes for  participation level of 21,000 meals and customer satisfaction of 85% for FY 2004/05. Staff estimates year-end results to be 5,900 meals and a customer satisfaction rating of 48%, based on surveys and ongoing feedback from participants since July 1, 2004.  Furthermore, staff efforts to deal with the changes in service providers and decline in customer participation and satisfaction is resulting in over-expenditure of resources. Staff estimates over-expenditures to reach $80,000 by the end of FY 2004/05.   

Staff and Volunteer Involvement

Volunteers are a vital part of the senior lunch program. Significant efforts have been extended to secure volunteers who greet customers, collect fees, set the tables, serve coffee, tea and the meal at the table, and assist with clean up. Paid City staff set up and clean the dining room, and directly supervise daily operations, including managing a team of volunteers. Staff and volunteers handle the daily reservations and cash handling for the lunch program. One paid staff person from Bateman Senior Meals is responsible for setting up the steam table, ensuring proper food temperature, “plating” the food, washing dishes and cleaning the kitchen after each meal. Safe food handling practices are maintained and supervised by City Staff. The use of volunteers helps to offset the operating costs of the program. On a daily basis, 8-10 volunteers work with the senior lunch program.

Budget Crisis and Reduction in Subsidy for Lunch Program

Since the onset, this program has been heavily subsidized by the City. The subsidy grew over 20 years to exceed $140,000 annually. Seniors became accustomed to a gourmet quality meal prepared fresh, on-site, at less than one- third of the actual cost to provide the meal. In response to the ongoing budget crisis, a good faith effort was made to change the lunch program to become self-supporting. However, attendance in the lunch program has fallen from an average of 85 per day to an average of less than 25 per day. Although the fee charged for the meal remained the same, participation fell due to lower quality meals prepared off-site, smaller portions, a perception that meals were more “institutional” in nature, and there are less expensive and higher quality alternatives for lunch in Sunnyvale. Between July and December 2003, 7,405 meals were served at the Senior Center. By contrast, in the same six-month period in 2004, only 2,773 meals were served.

Staff has worked with the current food service provider to improve the quality of meals and to offer additional menu items to increase attendance in the lunch program.  Staff solicited feedback from seniors by using numerous surveys to help identify areas of dissatisfaction and how best to address concerns. In response to suggestions from seniors, staff has provided:   enhancements to meals, discount coupons, entertainment, gift drawings, decorations, etc. As cited in the Friday Report dated January 12, 2005, Council was informed of difficulties with the program and that the current temporary agreement with Bateman Senior Meals is due to expire on March 30, 2005. As a result of efforts to meet the current outcome measures, staff has over-spent budgeted resources by $48,278.59 through Period 8 (ending February 12, 2005). It is estimated this over-expenditure will reach $80,000 by the end of FY 04/05. Despite efforts to improve the senior lunch program, customer satisfaction ratings and attendance have continued to fall.

Common complaints from seniors about the current program include poor quality food, small portions, not wanting to make advance reservations, and meals that are “institutional” in nature. When compared with local County nutrition sites that ask for a suggested contribution of $2.00; the Senior Center lunch has a perceived high cost of $4.50 per meal with reservation, $5 without, and $7 for non-residents. Compared to the pre-made meals now delivered to the Senior Center, several neighboring nutrition sites provide meals prepared on-site which allows for increased quantity and quality of the food. There are currently a number of other organizations providing lunches and meals to Sunnyvale seniors. (Please see Attachment H - List of Food Services for Older Adults, Programs Available in Sunnyvale and Neighboring Communities, January 2005.)

EXISTING POLICY

Recreation Sub-Element of the General Plan

Goal A: Manage a comprehensive parks and recreation program which remains responsive to public need, and delivers quality customer service. The Recreation Sub-Element does not specifically address or call for the provision of a senior lunch program; however, policies which support this current service are as follows:

Goal B: Develop partnerships with the private and public sector that enables the City to leverage resources and addresses issues on a coordinated and effective level.

Goal C: Develop and enhance the operation of the Community Recreation Fund maintaining sound financial strategies and practices that will enable the City to provide an array of recreation programs, facilities, and services to a maximum number of citizens while minimizing the impact upon the General Fund.

Goal D: Provide opportunities for high quality leisure involvement which promotes the physical and mental well being of the community and ensures equal opportunity for participation.

Policy D.2: Implement program offerings to meet the needs of identified subgroups within the population.

Action Statement D.2.c. Provide balanced programming to fully address the needs, concerns, and interest of older adults.

Council’s adopted budget specifically includes a Service Delivery Plan within Program 642 (SDP 64202) for “Nutrition for Older Adults and Individuals with Disabilities.”  The Outcome Statement:  “Enhance physical and mental health and socialization of older adults aged 50 or older and individuals with disabilities in order to reduce dependence on families and more expensive public assistance by providing nutritious meals in a social setting five days a week, so that:”

There are 21,000 meals served or 21,000 participant hours.

The overall customer satisfaction rating of 85% is achieved.

DISCUSSION

Sunnyvale’s Senior Center lunch program provides a variety of benefits to the participants with the primary emphasis placed on socialization. Food is an integral part of numerous recreation programs and is an especially successful element in programming for older adults. Some seniors express that the lunch program serves as a focal point for the Sunnyvale Senior Center.

Importance of a Senior Lunch Program

The provision of food, especially lunch, is a widely practiced service at senior center facilities. There are several benefits for providing such a service, including:

1.  Many older adults do not or cannot adequately prepare meals due to physical and mental aspects of aging. Seniors may face increased difficulties with shopping, purchasing and storing appropriate amounts of food items; dangers involved in preparing meals if physically or mentally impaired; and a lack of motivation.

2.  Older adults may not eat meals that provide for a nutritionally balanced diet required for healthy aging.

3.  Individuals living on a low, fixed income may develop poor eating habits.

4.  Older people are more likely to live alone, deal with bereavement, and to experience acute or chronic confusion. These situations commonly lead to poor nutrition, unhealthy eating habits, and reduced socialization.

5.  Most people desire to eat in the company of others and do not enjoy eating alone. This is a significant fact that cannot be overemphasized when developing and providing services for older people.

County Nutrition Sites

A County funded nutrition site is located at 535 Old San Francisco Road at the First United Methodist Church in Sunnyvale. This site is in the 24^th year of providing hot lunches to seniors of the community. The Sunnyvale Senior Nutrition Site is the largest of the 26 senior nutrition sites in Santa Clara County and serves an average of more than 216 meals, per day, five (5) days a week. The Nutrition Site program is contracted through the County of Santa Clara, with funding from Federal and State agencies through the Council on Aging of Santa Clara County. The City of Sunnyvale also financially supports the local Sunnyvale Senior Nutrition site with Outside Group Funding of $22,555 for FY 04/05. The Senior Nutrition Sites target low income seniors age 60 and older. (Please see Attachment I - Sunnyvale Senior Nutrition Program Brochure.)

Other well-established food programs in Sunnyvale, such as “Our Daily Bread” provide the important community service of feeding anyone that cannot afford  a meal, including seniors and the homeless.

City staff has consulted with the County of Santa Clara, Director of Nutritional Services, and the Budget Analyst for the County nutrition sites on the potential of the Sunnyvale Senior Center becoming a designated nutrition site. Santa Clara County staff has indicated that due to uncertainties with the State and County budgets, their funding for senior lunch programs is tentative and they are not accepting any new applications. They also mentioned that the current budget philosophy dictates that cities are now expected to provide a portion of the funding, such as in Milpitas, San Jose and Campbell. The County has also shared their opinion that Sunnyvale is already well served with a nutrition site located approximately one mile from the Senior Center and they consider other areas within the County as being in greater need than Sunnyvale.

Senior Center Kitchen

The size of the Senior Center kitchen is not a determining factor in the future of the senior lunch program. However, Council may occasionally hear questions from seniors regarding the kitchen’s size (i.e. Do we really need a kitchen this large? Why aren’t we using the kitchen?) The size of the kitchen was largely dictated by County health standards and is currently utilized on a daily basis for the lunch program. The kitchen is also used for special events and catering for rental use. Once the future of the senior lunch program is determined, staff will be better able to determine the availability of the kitchen for other uses, such as the instructional cooking classes scheduled to begin this spring. Regardless of the senior lunch program, the kitchen is needed and used on a regular basis for other programs.

Customer Satisfaction and Participation

It is reasonable to correlate customer satisfaction (price, quality, quantity, service and ambiance) directly with and represented by the number of meals served. For a number of years prior to July 2004, the customer satisfaction exceeded 95%. While this was appreciated, it exceeded the planned service level and inadvertently created a higher level of expectation that today’s participants often use as a reference base. Whether evaluating a service, describing a service level or asking for proposals from restaurateurs to meet a desired customer satisfaction rating, the perception of value and satisfaction is highly subjective and strongly influenced by previous experience and existing alternatives.

One of the most significant factors influencing attendance is whether or not meals are prepared fresh on-site, or prepared off-site and delivered to the lunch site. Meals prepared fresh on-site are higher in quality, but have much greater labor costs associated with the increased level of service. As participation dwindled, staff made significant efforts to improve the ambiance and amenities of the program. These efforts included enhancements to the meals served, musical entertainment, raffle prize drawings, decorations, birthday recognitions, (etc.). These efforts may have helped reduce the rate of decline in participation and customer satisfaction; however, it is apparent that cost and quality are more significant factors.

The statistical trend of total annual meals served indicates customer satisfaction with the senior lunch program declined as steps were initiated to make the program financially self-sufficient.

FY 04/05 = 5,900  (Projected)

FY 03/04 = 15,815

FY 02/03 = 20,484 

FY 01/02 = 17,771 

FY 00/01 = 15,383 

FY 99/00 = 12,572 

FY 98/99 = 15,137 

FY 97/98 = 17,272 

FY 96/97 = 11,432 

FY 95/96 = 12,773

FY 94/95 = 15,977

FY 93/94 = 17,251

The ten-year period from FY 93/94 to FY 03/04 depicts an average of 64 participants per day in the senior lunch program, with the highest average of 85 participants per day in FY 02/03.

Additional Funding Sources for the Senior Lunch Program

Despite the fact that the City has traditionally been reluctant to seek or rely on outside funding for ongoing programs and services to the public, the prospect of funding the senior lunch program from other government and/or private donations has been raised by a number of people. In comparison, two local and several surrounding community senior lunch programs leverage multiple sources to fund their services. There is, however, an important difference between these highly subsidized nutrition services and the City of Sunnyvale’s program. Most other programs receive significant funding as designated “county nutrition sites” through Santa Clara County. City staff has been informed by the County that, even if additional funding were available, it is highly unlikely any money would be made available to the City of Sunnyvale for an additional senior lunch program. The rational behind this is that, the City of Sunnyvale is already well served by a highly successful county nutrition site located in close proximity to the Sunnyvale Senior Center.

This reasoning, along with the ready availability of other local senior lunch options (such as Our Daily Bread, Meals on Wheels, Sunnyvale Presbyterian Church, and senior meals at local restaurants) as well as several other senior lunch programs in the surrounding communities make it very unlikely that the Sunnyvale Senior Center would be eligible for any supplemental government or private funding.

It is also important to realize the funding necessary for the Sunnyvale Senior Center to “compete” with the other Sunnyvale-based senior lunch programs would need to be significant enough to attract participants away from the other sites. A nutritionally balanced lunch sold on a cost-recovery basis, such as now offered through the Bateman Senior Meals, is not sufficient to draw senior customers away from other senior lunch programs or other options available to Sunnyvale seniors (eating at home, using local restaurants, etc).

Additional funding sources, whether public or private, are uncertain and may have limitations or funding constraints that conflict with the goals and objectives of the City. For example, County nutrition site funding is based on serving ages 60 and older and targeted toward those who are living on a low, fixed income; whereas, the Senior Center serves ages 50 and older without targeting the low income group. Funding sources may be reduced, eliminated or periodically discontinued by sources beyond the City’s control. Particularly at this time of severe budget deficits at the Federal, State and local levels, additional funding sources are even more difficult to secure and many are being diverted for other community needs. Also, private sector donations are often difficult to obtain or secure for ongoing programs.

Possible Options with Pro and Con Points

The following options were developed with assistance of suggestions, comments and general input from participants in the lunch program, members of the Senior Advisory Committee, Ad Hoc Lunch Program Committee members, “suggestion box” comments, several participant surveys from the past year and significant staff research. Options are listed from the most highly subsidized level to cost neutral:

Option #1  Request Proposals from Food Service Contractors to Provide Meals Prepared On-Site.

• Establish a senior lunch program of meals prepared on-site at a service level of 21,000 meals, an 85% customer satisfaction rating and with an initial participant fee starting at $4.50 per meal (with reservations) and a annual increase not to exceed $.50 per year.
• Direct staff to seek proposals for a service provider (RFP) to meet approved service levels through preparation of meals on-site.
• Continue the existing senior lunch program during the RFP process by extending the temporary agreement with Bateman Senior Meals through approval of a budget modification in the amount of $80,000 for FY 04/05 and authorize an increase in the FY 05/06 Recreation Division budget to provide an additional subsidy of $25,000 for July through September 2005, to cover the estimated six (6) months it will take to issue the RFP, evaluate proposals from competitive bids, and report back to Council.
• Reduce the current fee for participants from $4.50 with reservations ($5.00 without reservations) to $3.00 with reservations ($3.50 without) per person while undergoing the RFP process.

Staff estimates that this Option would not fully recover costs to provide lunches, thus requiring a subsidy.  Actual amounts of subsidy necessary to provide this service level at this cost could vary greatly but would be specified in proposals received during the process outlined above. This Option assumes a minimum of 8-10 volunteers would also be available daily to support the program five (5) days a week. The full cost of daily operations including: food costs, menu planning, purchasing supplies, serving, and clean-up, would be the responsibility of the food service contractor.

Pros:  This Option gives City Council time to evaluate the long-range fiscal impact of funding for an ongoing senior lunch program. By soliciting responses from potential food service providers, it may be possible to find a food service contractor that could meet the criteria for service and customer satisfaction levels at a cost less than the amount anticipated by staff. Reducing the current  fee for Sunnyvale Senior Center lunches provided by Bateman Senior Meals would bring that price closer to the fee charged by other area programs and could be expected to increase attendance.

Cons:  The length of time required to complete the Request for Proposals (RFP) and Report to Council processes delays a decision on the future of this program for up to six (6) months and necessitates continuation of a subsidy that is not currently budgeted. Reducing the fee for participants from $5.00 to $3.00, would likely increase attendance and participants would become accustomed to a lower price for their meal, likely setting an expectation of continued lower lunch fees and an increased demand for a heavily subsidized lunch program.  Actual revenues and costs would be determined through proposals however, a continued subsidy is likely.

Option #2 – Request Proposals from Food Service Contractors to Provide a Deli Café Style Service.

• Establish a senior lunch deli café style service level of 13,000 meals at an 85% customer satisfaction rating with an initial average cost per meal of $3.00.
• Direct staff to seek proposals for a food service provider (RFP) to meet approved service levels through a deli café style service.
• Continue the existing senior lunch program during the RFP process by extending the temporary agreement with Bateman Senior Meals through approval of a budget modification in the amount of $80,000 for FY 04/05 and authorize an increase in the FY 05/06 Recreation Division budget to provide an additional subsidy of $25,000 for July through September 2005, to cover the estimated six (6) months it will take to issue the RFP, evaluate proposals from competitive bids, and report back to Council.
• Reduce the current fee for participants from $4.50 with reservations ($5.00 without reservations) to $3.00 with reservations ($3.50 without) per person while undergoing the RFP process.

This Option is based on using contracted food services to offer a variety of items to accommodate different tastes and budgets. Menu items may include sandwiches, soups, salads, bakery items and beverages. Revenue assumptions are based on $3.00 spent by each person. Recommendations made by Senior Advisory Committee members included creating a café atmosphere offering a chance for seniors to “drop-in” for a meal or a snack. Furthermore, one of the conclusions from the October 29, 2004, study conducted by Helen DeWolf states: “Rethink the lunch program as to menu, time of meal, offering more variations, and possibly the deli approach (soups, salads, and sandwiches).” (Please see Attachment J – Sunnyvale Senior Center Lunch Program Study Conclusions by Helen DeWolf.)

Staff estimates that this Option would not fully recover costs to provide lunches, thus requiring a subsidy.  Actual amounts of subsidy necessary to provide this service level at this cost could vary greatly but would be specified in proposals received during the process outlined above. This Option assumes a minimum of 8-10 volunteers would be needed daily to support the program five (5) days a week. The full cost of daily operations including: food costs, menu planning, purchasing supplies, serving, and clean-up, would be the responsibility of the food service contractor.

Pros:  This Option allows for flexibility and opportunities for socialization on a drop-in basis, and eliminates the need for advance reservations. It would also allow for individuals to purchase food a la carte, and consider special diets, as well as cost factors.

Cons:  This program could be expensive because it requires additional staff and  more volunteers help to cover possible extended hours, and creates greater product waste due to the nature of a drop-in, no advance reservation model. The “drop-in” model does not provide the same number of lunches nor the same level of socialization as does a group setting for the lunch meal. The City does not have experience with this service model and, therefore, it is more difficult to accurately project costs, revenues and participation estimates.  Actual revenues and costs would be determined through proposals however, a continued subsidy is likely.

Option #3 Request Proposals from Food Service Contractors to Provide a Service Level of 12,000 Meals Prepared off site.

• Establish a senior lunch program at a service level of 12,000 meals and a 75% customer satisfaction  rating with an initial participant fee starting at $3.00 per meal (with reservations) and an annual increase not to exceed $.50 per year.
• Direct staff to seek proposals (RFP) for a food service provider to meet approved service levels.
• Continue the existing senior lunch program during the RFP process by extending the temporary agreement with Bateman Senior Meals through approval of a budget modification in the amount of $80,000 for FY 04/05 and authorize an increase in the FY 05/06 Recreation Division budget to provide an additional subsidy of $25,000 for July through September 2005, to cover the estimated six (6) months it will take to issue the RFP, evaluate proposals from competitive bids, and report back to Council.
• Reduce the fee for participants from $4.50 with reservations ($5.00 without reservations) to $3.00 with reservations ($3.50 without) per person while undergoing the RFP process.

This Option would provide meals Monday through Friday, five (5) days a week based on the current quality of meals prepared off-site and delivered to the Senior Center. The fee for lunch would be reduced in an effort to attract more participants.

Staff estimates that this Option would not fully recover costs to provide lunches, thus requiring a subsidy.  Actual amounts of subsidy necessary to provide this service level at this cost could vary greatly but would be specified in proposals received during the process outlined above. This Option assumes a minimum of 8-10 volunteers to support the program on a daily basis.

Pros: The quality of the meals currently served is compared with local nutrition sites. Reducing the Sunnyvale Senior Center lunch fee will bring that price closer to the fee charged by other area programs, make it more affordable and could be expected to increase daily attendance.

Cons: The customer satisfaction level could be anticipated at 75% or less due to inconsistency in food quality, meals that are “institutional” in nature, and not particularly flavorful. Actual revenues and costs would be determined through proposals however, a continued subsidy is likely.

Option #4. Provide Lunches Served Once per Month on a Cost-Recovery Basis.

• Establish a service level of 1,200 meals, an 85% customer satisfaction rating and participant fees similar to those previously charged for special event days that have included lunch meals.   
• Discontinue the existing senior lunch program with Bateman Senior Meals effective April 30, 2005.
• Approve a budget modification in the amount of $55,000 for costs incurred to provide meals through Bateman Senior Meals in Fiscal Year 04/05 through April 30, 2005 and implement monthly meal services effective May 2005.
• Increase the Recreation Division budget beginning in FY 05/06 to provide an operating budget of $20,000 in expense and revenue of $20,000, resulting in no additional annual subsidy.

This Option would include lunch served to approximately 100 participants once per month, possibly in conjunction with holidays or a special event to enhance the socialization opportunities.  On dates when these special social meals are not served  a room with tables and chairs for “brown bag” lunches or club potlucks could be provided.  As staff is very familiar with providing this type of socialization activity and are able to control expenses and costs, this option would not require a subsidy.

Pros:  This Option provides savings to the City by altering service levels and related costs. A space designated for eating brown bag lunches on a drop-in basis may provide opportunities for socialization and promotion of existing clubs and activities with “brown bag” lunch meetings.

Cons:  Seniors would not have the opportunity to get a nutritionally balanced meal on a daily basis at the Sunnyvale Senior Center. Participants would not have an identical opportunity for socialization as with a daily congregate meal. Participant cost for special social meals tends to be higher to cover actual costs of the meal and entertainment or other activities related to the holiday/special date.

Option #5.  Replace the Current Senior Lunch Service Model with Other Socialization Options

• Provide seniors with information and referral services to enable them to select from alternative, available senior lunch programs within the community.
• Provide enhancements of existing activities for socialization.
• Promote existing senior clubs and organizations that enjoy a “brown bag” lunch or potluck meal with their meetings, including: Bayview Seniors, Sunnyvale Senior Citizens’ Club, Grandmothers’ Club, and AARP.
• Provide a room with tables and chairs for “brown bag” lunches in conjunction with classes, lectures or entertainment provided on a volunteer basis and as space is available.

This Option would not provide weekday senior meals at the Sunnyvale Senior Center.  Although the senior lunch program has been a long standing program in Sunnyvale, attempts to provide acceptable quality at an acceptable cost and eliminate subsidies have failed. Rather than continue to duplicate the more popular senior lunch services available in the community, such as the County’s senior nutrition site, the City’s facility would be used to facilitate “brown bag” lunch activities and other senior activities.

Pros: Replacing the existing senior lunch service model with other socialization activities provides cost savings and utilization of other available resources currently available in Sunnyvale and funded by the community including the City. This Option would impact a small portion of members as over the years less than 2% of the total Senior Center membership regularly participate in the senior lunch program.

Cons: The group of seniors that regularly participate in the current program would miss the prepared nutritional meals, convenience of the service and the socialization opportunities.

FISCAL IMPACT

The fiscal impacts vary from cost neutral to subsidized, depending on the Option Council chooses to pursue. It is not possible to provide precise costs and impacts of Options 1, 2 and 3 until proposals are received for a selected Option. The following chart contains the estimated fiscal impact for each of the options detailed in this report:

COMPARISON OF OPTIONS

FISCAL ANALYSIS

Option	Level of Service & Customer Satisfaction Rating	Estimated  Cost per serving	Estimated Initial Participant fee per meal	Estimated Daily Attendance Average	Projected Annual Ongoing Subsidy
Option #1 Food Prepared On-Site	247 week days/year, 21,000 meals 85% Cust. Satisfaction	$12.00-$15.00	$4.50	85	To be determined through Request for Proposals
Option #2 Deli Café Style Service	247 week days/year, 13,000 meals 85% Cust. Satisfaction	$13.40	$3.00	53	To be determined through Request for Proposals
Option #3 Off Site Vendor	247 week days/year, 12,000 meals 75% Cust. Satisfaction	$11.70	$3.00	48	To be determined through Request for Proposals
Option #4 Monthly Meals	12 days per year 1,200 meals 85% Cust. Satisfaction	$7.00-$14.00	$7.00-14.00	100 per event	Cost Neutral
Option #5 Replace with other socialization options	No daily meal  program	N/A	N/A	Anticipate increased attendance in existing clubs & classes with “brown bag” socialization options	No fiscal impact

   

Alternative Numbers 1, 2 and 3 would require approval of Budget Modification No. 29 as follows.