Milk money in question at Jefferson City Public Schools

Jefferson City Public Schools' Board of Education has to choose who the district will spend its milk money with in the coming year - stick with Central Dairy as its longstanding dairy provider, or save a substantial amount of money with Graves Menu Maker Foods.

The board hesitated on making a decision after discussing the district's dairy contract during Monday's meeting.

The board first added an open forum session to let people in the audience speak to issues on the agenda, and Central Dairy General Manager Chris Hackman used the opportunity to speak to the board about the district's history with the company.

"We have served the Jeff City school district pretty much my entire life, that I know of. I know that we've been your dairy provider for at least the last 40 years," Hackman said.

This year, though, one bid of three came to the district at a lower price than Central Dairy's.

Dana Doerhoff, JCPS director of school nutritional services, said one bidder would not be able to supply dairy items daily as the district requested, so that bid was disqualified. Central Dairy's bid met all requirements, as did Graves Menu Maker Foods'.

Menu Maker's bid came in at about $75,000 a year cheaper.

The bid is for a one-year contract, with an option to renew for three following years.

Central Dairy has been owned by Illinois-based Prairie Farms since 2007, but Central Dairy's building in Jefferson City has been in town since 1934. Hackman represents the third generation of his family to serve in leadership with the company.

Graves Menu Maker Foods was founded in 1968 and is headquartered in Jefferson City at its distribution warehouse. The company is a member of the UniPro Foodservice distributor cooperative, but Menu Maker itself is family-owned and led by owner Tracy Graves, who was born and raised in Jefferson City, according to her biography on the company's website. Children of Tracy and CEO and company founder Dick Graves are also the third generation to work with the family business - Dick merged his business with his father's northwestern Missouri meat company.

Doerhoff recommended the board contract for dairy with Menu Maker on the basis of price.

"I think we have a fiduciary responsibility to taxpayers to spend their money wisely, but I also know that sometimes price isn't the only thing that matters," board treasurer Lorelei Schwartz said.

Hackman acknowledged Menu Maker's price appears to be cheaper.

"Is the other bidder better or worse? I can't say that - just different. The services that we've provided for the last 40 years are kind of unique to dairy as opposed to other delivery services," Hackman told the board, mentioning a special route and dedicated driver.

Board members had a series of questions about Menu Maker's ability to provide milk and other dairy products - gallons of milk for baking, sour cream, cottage cheese and cream cheese - on time every day and in a non-expired condition from the point of processing to delivery, given dairy's limited shelf life.

Much of board members' unease seemed related to Doerhoff having said she believed the milk supplied by Menu Maker would come from a Dean's Farms plant in Texas.

"I have a lot of concern with this. They assure me they can meet those deadlines and they can provide the number of items that we're going to request," Doerhoff said.

Menu Maker General Manager Lance Gorney told the News Tribune the company's milk is picked up from St. Louis three times a week.

Dick Graves said the company's trucks are temperature-controlled and can transport milk and dairy at the correct temperatures.

Doerhoff said there wasn't any stipulation in the district's dairy service contract about expiration date requirements. "Anything that's expired or not good, they will switch out and leave new milk," she added.

Hackman had told the board that about 1.5 percent of Central Dairy's products are delivered stale in an average year.

Gorney said Menu Maker's warehouse management system keeps track of products' length of storage in warehouse and makes proper rotations of products accordingly.

He added Menu Maker supplies milk to other school districts in the state.

Gorney couldn't immediately specify how many school districts in the state Menu Maker supplies with milk, but he said it was about 50.

"Dairy is a growing part of our business," Dick Graves said, adding this is the first time the company has bid on the JCPS dairy contract.

Tracy Graves said competition is good for local taxpayers.

JCPS serves approximately 3,200 breakfasts, 7,000 lunches and 340 Y-Care meals every day, Doerhoff said. With those meals, JCPS offers the choices of flavored skim milk, unflavored skim milk and unflavored 1 percent milk. That translates into the district requesting 150,000 cartons of milk per month, she said.

JCPS financial records show the district paid Menu Maker almost $1.02 million between July 2017 and the end of May this year for Menu Maker's contract with the district for grocery supplies.

JCPS paid Central Dairy approximately $387,587 during the same time period.

JCPS Superintendent Larry Linthacum said things have happened with Menu Maker that cast doubt on whether the company can deliver on the dairy contract.

"They struggle with some items," Doerhoff responded to a question from board member Scott Hovis on how the company currently performs with its service to the district.

She added, though, a Menu Maker sales rep - Cal Graves - visits her office weekly and goes over any concerns the district has.

Gorney and Dick Graves said the number of product stock shortages Menu Maker experiences is comparable to other distributors' shortages, and Dick added substitutes are available if the company does run short of a particular product.

The dairy contract signed by Cal Graves, Menu Maker's vice president of Business Development, Program Sales - a contract any successful bidder would have to sign - contains terms and conditions that if not met mean the contract would immediately be terminated and awarded to another company.

Linthacum and board President Steve Bruce said they took comfort in Graves' signature already being on the contract.

"I would have some hesitation if we did not have (the conditional termination clause) in place," Bruce said.

The contract does not specify whether the district would have to open competitive bidding again or could immediately award the contract to another previously qualified bidder to avoid gaps in delivery service - Bruce recommended the board check federal guidelines.

Doerhoff said the USDA wants the district to go with the best available price for dairy service.

"I have some difficulty with not adhering to the lowest bid. I think it puts your bidding practices at risk," Bruce said.

The board was silent when it came time for a motion to approve the contract with Menu Maker. The board instead voted to table the matter until its July board meeting - at which point it would have to make a decision on which company to select because the contract starts in August.

"If you were looking at a vendor A and a vendor B, this would already be done," Linthacum said, adding the district's prior histories with Central Dairy and Menu Maker make the decision challenging.

He, too, recommended going with Menu Maker, though, based on district policy and federal requirements.

"I think it's pretty clear that the current relationship we have (for dairy product delivery service) has set the bar very high, so that's what we would expect to receive going forward, whether it's the same vendor or someone else," Bruce said.