School District's Cafe Lost $250,000 Last Year, Audit Shows

Café@1144, the café at of the Toms River Regional Schools that became more known for its connection to former Schools Superintendent , lost roughly $250,000 during the 2010-2011 school year, the school board was told Tuesday night.

Business Administrator William Doering gave the school board a preview of the audit report on the café, which is part of the school district audit expected to be completed by December.

Doering said the loss was due to a combination of factors, including lower sales and catering revenues due to the state of the economy, as well as the loss of tenants from the building. But the loss is being addressed by several changes that will be in place by Nov. 1, Doering said.

“We cannot and will not continue with the current operating model,” he said.

Chief among the changes are staffing cuts that Doering said after the meeting will save more than $100,000 in salary and $40,000 in benefits.

A staffer who retired in June 2011 has not been replaced, Doering said; a chef’s position was downgraded to cook, and benefits removed from the position, and the manager’s duties will be split between the café and another area of responsibility.

The cafe was created under Ritacco as a potential moneymaker for the district, with the then-superintendent urging the district headquarters to include a catering service and on-site cafe for staff to order lunch from, according to published reports at the time.

In the 27-count indictment against Ritacco for such charges as tax evasion and bribery, the cafe and its manager were mentioned as part of an investigation that unfolded last fall, leading to the Oct. 21 arrest of Ritacco. He has plead not guilty to all charges.

Despite a quarter-millon-dollar loss, Doering said with changes in place beginning next month, a $5,000 profit is possible for the cafe in 2011-2012.

The café will be providing all the food for the day care and preschool children in the center at the building, and because it will become the district’s 19^th school cafeteria, the district will be eligible for reimbursement for children who participate in the federal free lunch program, Doering said.

Food for the day care and preschool students has previously been prepared at y school and trucked in, Doering and others said. That is expected to bring in $60,000 in revenue. The district also is changing the menu and will avail itself of food available through free programs that will reduce the costs, he said.

Manager Donna Mansfield will have her duties split between the café and another area of responsibility, Doering said.  A $16,000 stipend Mansfield received as manager of concession stands was removed from the 2011-2012 budget, at the July school board meeting this year.

With staffing changes, the cafe will go from four to 2 1/2 staffers, Doering said.

Not everyone believes the changes will be enough to produce a profit. Board member Alexander Pavliv questioned whether continuing to run the café was a wise decision.

“What about putting it (the operation of the café) out to bid?” Pavliv asked. “Wouldn’t it be easier to rent it out?”

Doering replied that the operational changes are just the first changes and that the district should allow this program to be tried before deciding to scrap it altogether.

“This is just a step in a larger process,” he said.

Toms River resident Dennis Galante echoed Pavliv’s comments, saying, “There’s got to be other solutions.”

“I have eaten there and there’s never anybody in the place,” he said.

The hours of operation are for breakfast and lunch, 6 a.m. to 2 p.m. The cafe is closed Saturdays and Sundays.

Galante also asked when the board would consider a similar audit will be conducted of other facilities in the district, including the Bennett Sports Complex, known as the Bubble on Hooper Avenue,  and the Pine Belt Arena.

“They should be separated. If that can’t be done (providing separate accounds) it needs to be dissolved,” Galante said.

Doering said after the meeting that those items have been dealt with separately in the overall audit.

"People are asking for information they already have," he said.

Doering said the loss at the cafe is due in part to a bad economy. That includes fewer tenants at 1144 Hooper Avenue, the building that serves as the school district headquarters but also includes other tenants who rent suites.

The administration building lost Smith Barney as a tenant, as well as former district engineer . There are new tenants who've expressed interest, Doering said, but declined to name them.

He also noted that the café lost money in part because of fewer events at the Pine Belt Arena, a situation he hoped would change significantly this year.

“If things go even better than we think they will, the profit could be even higher,” Doering said.