The Sioux City Community School District board voted unanimously June 23 to maintain the district's current Community Eligibility Provision (CEP) groupings for the 2025–26 school year while staff monitor falling direct‑certification percentages that determine classroom reimbursement rates.

Patty Blankenship, who presented the item, explained CEP provides free meals to all students at participating schools when a building meets minimum direct‑certification thresholds. "CEP stands for Community Eligibility Provision and what it means is that there's free meals to all the students enrolled in that building regardless of family income," Blankenship said.

Blankenship said the district's CEP groups were originally locked in at higher reimbursement rates — Group 1 is currently locked at a 94.75% federal reimbursement rate and Group 2 at 82.86% — but that direct‑certification percentages have declined since the lock‑in dates. She noted the USDA multiplier and the widely‑used 62.5% direct‑certification “magic number” that yields a 100% meal reimbursement when multiplied by the federal multiplier. The district's analysis showed that, without the locked‑in group rates, several buildings’ current direct‑certification numbers would produce much lower reimbursement percentages.

Blankenship told the board the School Nutrition Fund carried about $6 million as a balance and staff estimate a revenue shortfall related to CEP of roughly $909,000 for FY25 and slightly more than $1 million in the FY26 adopted budget if changes were made now. She also noted the general fund normally charges the nutrition fund an indirect cost rate of about $450,000 and that reducing that charge would shift pressure to the general fund.

Board members asked whether the decline in direct certification was due to families not completing forms or broader statewide trends. Blankenship said the decline is being seen across Iowa and that it is not yet clear whether fewer families are applying for benefits or if program eligibility/distribution processes have changed. "That is what they're seeing statewide," she said.

After discussion, the board voted 5–0 to maintain current CEP groupings for 2025–26 and tasked staff to reevaluate the groups using the April 1, 2026 measurement date. Blankenship said if direct‑certification rates do not rebound staff will likely need to return to the board next year to move some buildings back to paid status.