September 27, 2005

SUBJECT:  Options Regarding Long-Term Future of Senior Lunch Program (05-283)

REPORT IN BRIEF

On March 29, 2005, Council provided staff with several directions regarding the senior lunch program. Council directed a Request for Proposals process be initiated to determine the cost of providing a senior lunch program, serving 21,000 meals a year with a customer satisfaction rating of 85%. (See Attachment A, RFP F0404-59 To Provide Food Services At The Sunnyvale Senior Center.) Additionally, Council asked staff to explore contracting with culinary schools; look into hiring an onsite chef (City employee); consider returning to the catering business; consider finding another short-term service provider; cancel the existing contract with Bateman; and implement quality control measures.

This report offers, for Council’s consideration, several alternatives for a long-term solution regarding the future of a senior lunch program and gives pros and cons for each.

Due to financial considerations, staff is recommending Council consider an agreement with Culinary Magic Catering which includes utilizing the kitchen for outside catering opportunities on a shared use basis (Alternative No. 1).

The Parks and Recreation Commission reviewed this report during a specially scheduled meeting on September 20, 2005, and unanimously recommended that Council select Alternative No. 1 with Culinary Magic Catering.

Council is also being asked to extend the existing service agreement with Bateman Senior Meals by 30 days to provide continued service during the time it takes to develop, review and present a new agreement to Council.

BACKGROUND

At their March 29, 2005, meeting, Council reviewed a staff report regarding the senior lunch program and approved an alternative as listed below.

Request Proposals from Food Service Contractors to Provide a Service Level of 21,000 Meals Prepared Onsite and Approval of Budget Modification No. 29. Request proposals from food service contractors to provide a senior lunch program with meals prepared onsite to meet a service level of 21,000 meals and an 85% customer satisfaction rating with an initial participant fee of $4.50 per meal (with reservations) and an annual increase not to exceed $.50 per year. Allow six (6) months for staff to issue a Request for Proposals, evaluate the proposals and report back to Council. Continue the existing senior lunch program with The Compass Group/Bateman Senior Meals during this process, at a reduced fee of $3.00 for members ($3.50 without reservation). Approve Budget Modification No. 29 in the amount of $80,000 for Fiscal Year 2004/2005 and increase the Recreation Division budget for Fiscal Year 2005/2006 with an additional subsidy of $25,000 to fund the senior lunch program during the time it will take to complete the Request for Proposal process.

Council further directed staff to look into hiring an onsite chef, to explore culinary schools, to consider returning to the catering business, and return to Council with its findings. They also asked to waive the 30-day notice to the current contractor and to find a replacement expeditiously; to implement quality control measures immediately on the current contractor; and to define a term of one year.

On April 26, 2005, a letter was sent to over 100 area businesses, soliciting interest in both a short-term and a long-term agreement to provide the senior lunch program. The City received responses from five (5) businesses for the short-term agreement.

On May 17, 2005, an RFP seeking long-term interest in providing the Sunnyvale Senior Lunch Program was issued. (See Attachment A, RFP F0404-59 - To Provide Food Services At The Sunnyvale Senior Center.)

On May 20, 2005, a letter requesting detailed proposal information for providing the short-term senior lunch program was sent to the five (5) potential business contractors.

On June 29, 2005, proposals to provide a long-term senior lunch program were accepted from three (3) proposers: 1) The Compass Group/Bateman Senior Meals, 2) Events of Excellence, and 3) Culinary Magic Catering.

On July 12, 2005, staff reported to Council on the results of a search for a vendor to provide a short-term solution for the senior lunch program. Due to improvements in customer satisfaction and the outcome of the short-term request for proposals process, Council authorized staff to increase the single contractor payment limit for the existing contract with Bateman Senior Meals.

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 and the overall customer satisfaction rating of 85% is achieved.

COMPARISON OF FOOD SERVICE PROVIDERS - REQUEST FOR PROPOSAL ALTERNATIVES
Criteria	Alternative #1 Culinary Magic Catering	Alternative #2 Compass– Group/Bateman Onsite prep	Alternative #3 Compass Group/Bateman Partial onsite	Alternative #4 Compass Group/ Eurest Dining Services	Alternative #5 Events of Excellence
Staffing Levels proposed	Owner would be onsite w/ crew of 7-9 staff most days	12 work hours per day for full onsite preparation	4 work hours per day with partial onsite preparation	24 work hours per day for full onsite preparation. Staff of 3 including Executive Chef	PT Chef, Asst. Chef, Food Prep Personnel & PT Marketing
Ability to Provide Cooking Onsite	Full onsite w/ use of kitchen for catering	Full onsite preparation	Partial onsite food preparation	Full onsite preparation	Full onsite preparation
Minimum meals (lower is better)  & Ability to flex number of meals served	Minimum of 25 meals/day. Very flexible W/ drop-in customers.	Minimum of 60 meals/day. Can be flexible with daily attendance	Minimum of 25 meals/day. Some flexibility with drop-in customers	No daily minimum. Flexible with drop-in customers	Minimum of 85 required. Limited flexibility.
Menu Selections	Variety and willing to change	7 daily entrée alternatives that offer a higher degree of freshness and flexibility	Some flexibility, similar to current service	High end menu with focus on ‘comfort foods’ that are preferred by seniors	“Signature” dishes high in food quality and nutritional value
Tableware	Willing to provide own china dishes & linens.	Investment by Compass Group bright white narrow rim china, stainless steel flatware and kitchenware.	Investment by Compass Group bright white narrow rim china, stainless steel flatware and kitchenware.	Investment by Compass Group bright white narrow rim china, stainless steel flatware and kitchenware.	Use of City tableware & flatware; City responsible for broken or lost items.
Experience with Similar Scope w/ Senior lunches	Experience with M-F school lunch programs & corporate catering	Specializes in meals for seniors	Currently providing program at senior center.	Associated with Compass Group; specializes in corporate dining	Previous work with City of Sunnyvale Senior Lunch Program in 2003-04.
Quality of food / presentation   (If known)	Sample tasting done 9/16/05 with very good ratings from seniors.	Anticipated Better Quality, with full onsite meal preparation.	Good Quality, level of service currently offered at senior center.	Unknown, daily hot gourmet entrees; expect high quality as specialty is in gourmet quality corporate dining.	High Quality, previous City experience with catering & lunch program
Additional Use of Sr. Center Kitchen	Proposed shared use of kitchen for catering	None proposed	None proposed	None proposed	None proposed unless catering for Sr. Center
Additional Cost to City to Provide Program	Lowest cost to City   Range of + $2,669 to an additional subsidy of <$23,789>     See Attachment B for details	Med.  cost to City   Range of additional subsidy <$56,163> to <$74,628>         See Attachment B for details	Low cost to City     Range of additional subsidy <$28,132> to <$35,524>           See Attachment B for details	Highest cost to City   No Range (set fee) additional subsidy <$190,554>       See Attachment B for details	High cost to City   No Range due to min. higher than City service level Additional subsidy of <$167,409> See Attachment B for details

The pros and cons of each Request for Proposal (RFP) option are:

RFP Option/Alternative #1 – Culinary Magic Catering based on $2.50 per meal, a $60.00 daily staff fee and onsite preparation.

Pros:

• Reference checks indicate good quality food and very good customer satisfaction. A sample tasting, by seniors, of this proposer’s food was held on September 16, 2005. Of the 12 seniors attending, 10 rated the food as “Excellent," 1 as “Very Good” and 1 as “Good."
• Due to the size and equipment included with the Senior Center kitchen, the proposer is able to make use of it for his business and can therefore reduce the overall cost to the City and provides the best financial arrangement with minimal subsidy anticipated.
• The minimum number of 25 meals is same as Alternative #3, and lower than Alternatives #2, #4, and #5.
• There is the opportunity, based on the proposer’s success in utilizing the Senior Center’s kitchen, to recapture more of the direct costs (staff time, utilities, etc.) and indirect costs (equipment replacement, facility maintenance & management), incurred by the City for this program and facility.
• None or low subsidy anticipated.

Cons:

• The City has no prior experience dealing with this company.
• The company owner has been working in the food service industry for over ten years.  However, with the downturn of the economy in Silicon Valley, Culinary Magic Catering has had limited business since 2003.
• Additional use of the Senior Center kitchen will increase, by up to $10,000 the indirect costs for utilities. The Community Recreation Fund would need to be reduced by a like amount in other areas to compensate for this additional subsidy.
• The minimum number of daily meals (25) may incur additional costs to the City if they are not sold each day.

 RFP Option/Alternative #2 - Compass Group Option based on $7.00 per meal and onsite preparation.

Pros:

• Provides full onsite preparation of food and would be a higher level of service than the current program (which is partial on-site preparation) with an expected higher level of customer satisfaction.
• Seniors and staff have tasted food prepared by this proposer over an extended period of time and at different quality levels. The proposed level of quality has been considered very good.
• Company has extensive experience working with seniors and over one year of direct experience working with the Sunnyvale senior lunch program.
• References checks indicate that changes in personnel and purchasing over the past six months has significantly improved the service level, resulting in a very good level of satisfaction. It is also apparent that the level of service and customer satisfaction is tied closely to the current personnel and their availability (service declines when regular staff is off).

Cons:

• The cost per meal is higher than the fee participants pay, so there is an additional subsidy involved and the Community Recreation Fund would need to be reduced in other areas to compensate.
• The minimum number of daily meals (60) could increase the cost to the City if they are not sold.

RFP Option/Alternative #3 - Compass Group Option based on $4.62 plus a $60.00 daily labor fee with partial onsite food preparation (similar to current program at Senior Center).

Pros:

• Partial onsite preparation of food has shown a good level of customer satisfaction.
• The minimum number of 25 is same as Alternative #1, and lower than in Alternatives #2, #4, and #5.
• Total subsidy paid by the City is second lowest of all proposals.
• Seniors and staff have tasted food prepared by this proposer and rate it as very good (see notes on satisfaction and references in Alternative #2).
• Company has extensive experience working with seniors and over one year of direct experience with the Sunnyvale senior lunch program.