paid lunch equity

CALIFORNIA DEPARTMENT OF EDUCATIONTom Torlakson, State Superintendent of Public Instruction

Paid Lunch Equity

CREATED BY:

ROSEMARY WILLHITE&

DJ SANDHU

TOM TORLAKSONState Superintendent of Public Instruction

OverviewPaid Lunch Equity (PLE)

• Definition/Intent

• Requirements/Timeline

• Implementation Options

• Calculations

• References


Definition & Intent

• What is Paid Lunch Equity (PLE)?

• Intent: To ensure that revenue from paid lunches is providing sufficient funds to the food service account

• This provision applies only to lunches


PLE Requirements

• USDA mandates that LEAs annually establish and report Weighted Average Price (WAP)

• All LEAs must calculate their lunch WAP

In SY 2011-12 if LESS THAN $2.46 – Further Action Required

If MORE THAN or EQUAL TO $2.46 – No Further Action Required


Timeline

• Effective July 1, 2011

• Interim Rule – Published– USDA accepted public comments until

September 15, 2011

• USDA mandates that LEAs annually calculate their lunch WAP


Mandatory Annual

Calculation


Three Step Process

1. Calculate current lunch WAP

2. Determine which Option to implement

3. Adjust current lunch WAP to include inflation rate


Step 1: Calculate Current Lunch WAP

• Use data from October in the previous SY

• Include all sites (elementary, middle, high school, etc.)

• List total count of paid lunches at each site

• List the paid lunch prices at each site

Paid Lunch Equity Tool for SY 2011-12 ONLY

Current Weighted Average Price Calculator

Enter current prices and number of lunches sold at each price using prior October data

Site NameMonthly # of

Paid LunchesPaid Lunch

PriceMonthly Revenue

Current Average

Weighted Price

1

2

3

4

5

6

TOTAL

2,000

2,000

1,300

Site #1

Site #2

Site #3

$ 1.50 $ 3,000

$ 1.75 $ 3,500

$ 2.25 $ 2,925

$1.785,300 $9,425(Average Paid Lunch

Price = $1.83)

($1.50 + $1.75 + $2.25) / 3 = $1.83

Calculation: $9,425 ÷ 5,300

=$1.78(Total Monthly

Revenue)

divided by

(Total Monthly # of Paid Lunches)


Step 2: Comparison

For the example given, the

WAP = $1.78

which is less than

$2.46

(NSLA Section 11, FREE Federal Reimbursement Rate)

FURTHER ACTION REQUIRED


Step 3: Include Inflation

Increase paid lunch price by inflation rate plus 2 percentage points (current inflation rate 1.14%)

1.14% + 2% = 3.14%

Calculation to adjust WAP with Inflation rate:

Current WAP x 3.14% = “New WAP”

$1.78 x 3.14% = $1.84


Implementation Options

Option 1

Increase paid lunch prices

Option 2

Provide a non-federal funding contribution to cover the difference


OPTION 1


Option 1 Increase Current WAP

New WAP Price = $1.84

Rounded down to the nearest five cents ($0.05)

Limited to a maximum required increase of 10 cents ($0.10) per SY

New Weighted Average Lunch Price Requirements(Price Includes 3.14% Inflation Rate)

Not rounded to the nearest $0.05 Rounded-down to the nearest $0.05

$1.84 $1.80

Result: For this example, the LEA must increase the WAP by a minimum of two cents ($0.02)

Calculation:

New WAP “Rounded-down” minus Current WAP

$1.80 - $1.78 = $0.02


Option 1 Increase average paid lunch

prices

Flexibility to determine how to distribute the average price increase among their school sites to reach the new average lunch price

For this example: Increase WAP to $1.80

Pricing Estimation Calculator

Below is a tool allowing users to manipulate prices to achieve the required new weighted average price

Monthly Number of Paid Lunches

Paid Lunch Price Weighted Average Price

2,000 $1.50

2,000 $1.75

1,300 $2.25

5,300 $1.78

Pricing Estimation Calculator

Below is a tool allowing users to manipulate prices to achieve the required new weighted average price

Monthly Number of Paid Lunches

Paid Lunch Price Weighted Average Price

2,000

2,000 $1.75

1,300 $2.25

5,300

(Increased) $1.55

$1.80

MEETS PLE REQUIREMENT


Option 1 Increase average paid lunch

prices

• May increase average paid meal prices more than the required amount

• A “credit” for future required increases will be given


OPTION 2


Option 2Provide Non-Federal Source

Contribution• In order to calculate the required

“Annual Non-Federal Source Contribution” the following data is required:

Annual Number of paid lunches

Current Weighted Average Price

New Weighted Average Price

New Weighted Average Price:

Current Weighted Average Price: $1.80

- $1.78

$0.02

Non-Federal Source Contribution CalculatorEnter the total paid lunch count (include all prices) for SY 2010-11

Annual # of Paid Lunches

New Weighted Average Price minus Current Weighted Average

Price

Annual Non-Federal Source Contribution

Note: Formula uses “rounded down” price in the PLE tool

50,000 $0.02 $1,000.00

50,000 X $0.02 = $1,000.00


Allowable Non-Federal Funding Source

• Funds that support paid lunches, including but not limited to:

Per-Lunch reimbursements specifically for paid lunches

Funds provided by organizations for paid lunches (private grants or donations)


Unallowable Non-Federal Support

• In-kind contributions

• A la carte sales

• Any payments, including additional per-meal reimbursements, provided for support of any CN Program

• Any payments, including additional per-meal reimbursements, provided to support free and reduced price meals; and

• Any in-kind contributions converted to direct cash expenditures after July 1, 2011


Non-Federal SupportException for SY 2011-12

ONLY

• Includes any non-federal cash contribution, except for in-kind contributions and revenues from foods and beverages sold in competition with reimbursable meals

• The limitations for non-federal contributions do not apply (State meal reimbursement)


Reporting Criteria

• State agencies must submit data to FNS at the end of November

• FNS is required to publish results

• Further guidance on reporting is under development

• FNS to provide an Excel report to State agencies to collect and directly transmit data


FAQ

If I have already set my paid lunch price for SY 2011-12, do I still need to determine whether I am in compliance with this new requirement?

Yes


FAQ

What action will be taken against an LEA that does not comply?

At this time, we are only looking for a good faith effort


FAQMust an LEA increase meal prices if they currently have a large fund balance or if their current operation is consistently in the black?

Yes, all LEAs must calculate their average paid lunch price and determine if any adjustments are required.


Provisions

If a school district has all their sites participating in Provisions, would they still be required to complete the PLE tool?

Yes, all LEAs are required to apply the calculator tool and document the result, even if they are not charging.


Provisions

If a school district has some of their sites participating in Provisions, would they be requried to list the schools with $0.00 pricing?

Yes. In a Provision situation, schools would still be counting the total number of meals for purposes of claiming in non-base years. Hence, they would apply the most frequently charged price of zero and report that as the total number of paid (no charge) meals.


ReferencesInterim Rule:http://www.fns.usda.gov/cnd/Governance/Legislation/SFArevenue_interimrule.pdf

Paid Lunch Equity Q&A:http://www.fns.usda.gov/cnd/Governance/Policy-Memos/2011/SP39-2011_os.pdf

Paid Lunch Equity Tool:http://www.fns.usda.gov/cnd/Governance/Legislation/CNR_2010.htm

paid lunch equity

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