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Information Alert: Reimbursement Reduction

Nutrition Services Division Information Alert

To: School Nutrition Program Sponsors

Number: NSD-SNP-05-2009

Attention: Food Service Directors

Date: May 2009
Subject: Sponsor Update: Reduction in State Meal Reimbursement Rate for Fiscal Year 2008-09

This Information Alert (IA) updates the previous IA (NSD-SNP-03-2009) you received from the California Department of Education (CDE) in March 2009, and reiterates the information in the letter sent via ListServ on May 15, 2009, related to the reduction in State Meal reimbursement.

The State Meal reimbursement appropriation for Fiscal Year (FY) 2008-09 of $125.7 million is insufficient to support California’s meal reimbursement rates for eligible meals served through the School Nutrition Programs. Provision 6 of the 2008-09 Budget Act directs the CDE to reimburse claims at a prorated share of the appropriated funds in the event that the appropriation is insufficient. Since the insufficiency is substantial, we are notifying Proposition 98 Agencies that the State Meal reimbursement rate will be greatly reduced for the claim months of May 2009 and June 2009.

Assembly Bill (AB) 95 (Torlakson), sponsored by State Superintendent of Public Instruction Jack O’Connell, would provide an additional $19.5 million in school meal reimbursement for FY 2008-09. It does not appear that the bill will pass or be signed prior to the mandated decrease in State Meal reimbursement taking effect.

Proposition 98 Agencies (Public School Districts, Charter Schools, and County Offices of Education)
Non-Proposition 98 Agencies (Private Schools, Juvenile Halls, Camps, and County Children’s Homes)

The Fiscal and Administrative Services Division is currently evaluating whether or not a reduction in the State Meal reimbursement rate of $0.1566 for every free and reduced-price breakfast and lunch served in non-Proposition 98 agencies will occur.

Residential Child Care Institutions, Shelters, and CDE Special Schools

These agencies are not eligible to receive State Meal reimbursement and are not affected by this reduction in meal reimbursement.

We fully understand this decrease in State Meal reimbursement negatively impacts your program and we are sympathetic. But the reality is that this program will run out of money soon. Please be assured that the CDE is taking this funding shortfall very seriously and continues to advocate for additional funding. We encourage you to do the same.

If you have any questions regarding the reduction in State Meal reimbursement issues, please contact Shawneen Coriloni, Manager, Child Nutrition Fiscal Services, at 916-322-4311 or by e-mail at, or Phyllis Savage, Manager, Child Development and Child Nutrition Fiscal Services, at 916-322-8326 or by e-mail at

Questions:   Nutrition Services Division | 800-952-5609
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