Paid Lunch Equity CREATED BY ROSEMARY WILLHITE DJ
Paid Lunch Equity CREATED BY: ROSEMARY WILLHITE & DJ SANDHU CALIFORNIA DEPARTMENT OF EDUCATION Tom Torlakson, State Superintendent of Public Instruction
Overview Paid Lunch Equity (PLE) TOM TORLAKSON State Superintendent of Public Instruction • Definition/Intent • Requirements/Timeline • Implementation Options • Calculations • References
Definition & Intent TOM TORLAKSON State Superintendent of Public Instruction • 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 TOM TORLAKSON State Superintendent of Public Instruction • 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 TOM TORLAKSON State Superintendent of Public Instruction • Effective July 1, 2011 • Interim Rule – Published – USDA accepted public comments until September 15, 2011 • USDA mandates that LEAs annually calculate their lunch WAP
TOM TORLAKSON State Superintendent of Public Instruction Mandatory Annual Calculation
Three Step Process TOM TORLAKSON State Superintendent of Public Instruction 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 TOM TORLAKSON State Superintendent of Public Instruction • 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 Monthly # of Paid Lunches Site Name Paid Lunch Price Monthly Revenue 1 Site #1 2, 000 $ 1. 50 $ 3, 000 2 Site #2 2, 000 $ 1. 75 $ 3, 500 3 Site #3 1, 300 $ 2. 25 4 5 6 TOTAL (Average Paid Lunch Price = $1. 83) 5, 300 Current Average Weighted Price Calculation: $9, 425 ÷ 5, 300 =$1. 78 $ 2, 925 (Total Monthly Revenue) divided by (Total Monthly # of Paid Lunches) $1. 78 $9, 425 ($1. 50 + $1. 75 + $2. 25) / 3 = $1. 83
Step 2: Comparison TOM TORLAKSON State Superintendent of Public Instruction 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 TOM TORLAKSON State Superintendent of Public Instruction 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 TOM TORLAKSON State Superintendent of Public Instruction Option 1 Increase paid lunch prices Option 2 Provide a non-federal funding contribution to cover the difference
TOM TORLAKSON State Superintendent of Public Instruction OPTION 1
Option 1 Increase Current WAP TOM TORLAKSON State Superintendent of Public Instruction New WAP Price = $1. 84 Ø Rounded down to the nearest five cents ($0. 05) Ø 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 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 $1. 80
TOM TORLAKSON State Superintendent of Public Instruction 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 2, 000 $1. 50 2, 000 1, 300 $1. 75 $2. 25 5, 300 Weighted Average Price $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 2, 000 1, 300 Paid Lunch Price Weighted Average Price (Increased) $1. 55 $1. 75 $2. 25 MEETS PLE REQUIREMENT 5, 300 $1. 80
TOM TORLAKSON State Superintendent of Public Instruction 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
TOM TORLAKSON State Superintendent of Public Instruction OPTION 2
TOM TORLAKSON State Superintendent of Public Instruction Option 2 Provide Non-Federal Source Contribution • In order to calculate the required “Annual Non-Federal Source Contribution” the following data is required: Ø Annual Number of paid lunches Ø Current Weighted Average Price Ø New Weighted Average Price
Non-Federal Source Contribution Calculator Enter the total paid lunch count (include all prices) for SY 2010 -11 Annual # of Paid Lunches 50, 000 New Weighted Average Price minus Current Weighted Average Price Annual Non-Federal Source Contribution $0. 02 $1, 000. 00 Note: Formula uses “rounded down” price in the PLE tool New Weighted Average Price: $1. 80 Current Weighted Average Price: - $1. 78 $0. 02 50, 000 X $0. 02 = $1, 000. 00
Allowable Non-Federal Funding Source TOM TORLAKSON State Superintendent of Public Instruction • Funds that support paid lunches, including but not limited to: Ø Per-Lunch reimbursements specifically for paid lunches Ø Funds provided by organizations for paid lunches (private grants or donations)
Unallowable Non-Federal Support TOM TORLAKSON State Superintendent of Public Instruction • 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
TOM TORLAKSON State Superintendent of Public Instruction Non-Federal Support Exception 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 TOM TORLAKSON State Superintendent of Public Instruction • 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 TOM TORLAKSON State Superintendent of Public Instruction 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 TOM TORLAKSON State Superintendent of Public Instruction What action will be taken against an LEA that does not comply? At this time, we are only looking for a good faith effort
FAQ TOM TORLAKSON State Superintendent of Public Instruction Must 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 TOM TORLAKSON State Superintendent of Public Instruction 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 TOM TORLAKSON State Superintendent of Public Instruction 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.
References TOM TORLAKSON State Superintendent of Public Instruction Interim Rule: http: //www. fns. usda. gov/cnd/Governance/Legislation/SFA revenue_interimrule. pdf Paid Lunch Equity Q&A: http: //www. fns. usda. gov/cnd/Governance/Policy. Memos/2011/SP 39 -2011_os. pdf Paid Lunch Equity Tool: http: //www. fns. usda. gov/cnd/Governance/Legislation/CN R_2010. htm
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