Health rule will shrink soda funds, schools say
Posted on Monday, July 7, 2008
URL: http://www.nwanews.com/adg/News/230678/
SPRINGDALE — When the Har-Ber High School football team starts practice this fall, the Wildcats’ cleats will glide across the surface of freshly laid artificial turf.
More than two-thirds of the $ 484, 000 project was paid for with money from the Great Plains Coca-Cola Bottling Co., which pays the Springdale district $ 156, 000 a year for exclusive rights to sell Coca-Cola products at sporting events and in vending machines.
Last year, the Har-B er High football team drove across town to run drills at the Springdale High School field, home of the rival Bulldogs. To give the team a practice surface of its own without spending tax money, district leaders offered $ 334, 000 raised through the Coca-Cola contract.
That money topped off a $ 150, 000 fund for the project started by the Wildcats’ booster club.
Springdale uses the money from the vending contract for athletic facilities and school activities, assistant superintendent Allen Williams said.
School districts throughout the state have similar 10-year contracts with soft-drink ven- dors, many of which are set to expire this year.
The initiation of the state’s Healthy Schools Initiative, which requires schools to replace greasy potato chips with baked snack products and stock vending machines with bottled water and diet drinks, has some district leaders fearing that the money will dry up along with supplies of soda.
“We will get significantly less money, I am certain,” Williams said.
Williams soon will negotiate a new contract with Great Plains Coca-Cola or a Pepsi supplier, depending on which company offers the most competitive commission, he said. Child-nutrition laws, which restrict the times machines can be turned on, have made the contracts less lucrative.
In fact, in early discussions with them, vendors have offered “significantly less than half” of the current commission, Williams said.
Act 1220 of 2003, signed into law by then-Gov. Mike Huckabee, started a variety of initiatives aimed at combating childhood obesity, including increased physical education requirements and measuring students’ body mass index.
The law required school districts to remove vending machines from elementary schools, shut them off until a half-hour after lunch periods, and “reduce school dependence on profits from the sale of foods of minimal nutritional value.”
An annual review of the effectiveness of Act 1220, released in June by the University of Arkansas for Medical Sciences Fay W. Boozman College of Public Health, showed that 61 percent of 171 superintendents surveyed have policies prohibiting foods in vending machines that provide calories primarily through fats or sugars and contain few vitamins or minerals. That’s an increase from 18 percent in 2004. All vending contracts negotiated after Aug. 8, 2005, must be in full compliance with the policy, which also limits soda sales to 12-ounce containers, the size of an average can.
Mario Nunez, spokesman for Great Plains Coca-Cola Bottling Co., said the company will redraft several expired contracts this year with significantly lower payouts.
“The whole way we do business with schools has changed,” he said. “Volume, of course, is going to go down if they restrict the hours.”
The company has worked with schools to adapt to the rules, offering water and milkbased products and retooling drink machines to dispense smaller, 8-ounce cans.
“We comply with it, but on the other side of that, we do our best to meet the needs of what our customers want,” Nunez said. “A lot of the schools don’t necessarily agree with the policies.”
Nunez is sympathetic to districts, some of which will scramble to replace activities funds created through the contracts, but existing agreements were no longer financially beneficial as students purchased fewer products, he said.
“Contracts have to be reasonable,” Nunez said. “Schools are good contracts to have, but they’re not necessarily your biggest moneymakers.”
Fayetteville will form a child nutrition committee to evaluate its contract when it expires in the fall, Chief Financial Officer Lisa Morstad said. Its 10-year Pepsi contract raised $ 208, 000 a year, which was distributed on a per-pupil basis at each school to pay for activities and projects.
Morstad said that she can’t predict how much the contract will be reduced.
Many central Arkansas districts’ contracts expired shortly after the policy took effect, but others soon will feel the financial effects.
The North Little Rock School District will rework a five-year Coca-Cola contract next year, and it will likely see a drop in its guaranteed commission, Chief Financial Officer Greg Daniels said.
When Rogers School District renewed its 10-year contract in August 2007, changing to a year-to-year basis, its commission dropped from $ 110, 000 to $ 48, 000, district business manager David Cauldwell said. The district first used the “bonus money” to lay turf at its football stadium. When it replaces the surface in four or five years, the money for the project won’t likely come from a beverage contract, he said. The district soon will consider abandoning exclusive contracts in favor of allowing a larger variety of companies — restricted under former agreements — to pay for space on scoreboards and fences and generate money for projects, Cauldwell said. “Unless its lucrative enough, it’s not worth limiting those other sponsorships,” he said.
To contact this reporter: eblad@arkansasonline. com