FUND 46 – LONG-TERM CAPITAL IMPROVEMENT TRUST FUND FUND 80 – EMEREGENCY RULES WASBO Fall Conference 2014 Presented by: Carey Bradley, Consultant Bob Soldner, Director School Financial Services Team Department of Public Instruction 1

Capital Projects Funds 4x Capital Project Funds are used to account for financial resources used for capital facilities. Fund 49 is used for projects financed with borrowed funds. Fund 41 is used for projects financed by a special tax levy. Fund 46 is used for projects financed with funds transferred from the General Fund. 2

Wisconsin Statute (2013 ACT 336) Long-term Capital Improvement Trust Fund A school board may establish a “trust” to fund capital improvement projects per their ten year long-term capital improvement plan. The “trust” is funded with a transfer from the general fund. The FY contribution from Fund 10 to the Fund 46 trust is recorded as the expenditure for shared cost and equalization aid purposes. 3

Funding the Trust: State Aid Impact Shared cost, the amount of expense eligible for equalization aid, is recognized in the fiscal year that the transfer is made. 4

Equalization Aid Review LEVEL Dist Val / Member Guar Val / Member Dist Share State Share Cost Ceiling Aid / Member PRIMARY$500,000$1,930, %74.09%$1,000$741 SECONDARY$500,000$1,049, %52.37%$8,261$4,326 TERTIARY$500,000$536, %6.81%$739$50 TOTAL AID PER MEMBER51.17%$10,000$5,117 5 How does the formula work? Example District: Shared Costs per Member = $10,000 Value per Member = $500,000 Cost Ceilings and Guarantee Values (For demonstration, not actual)

Fund 46 Transfer: Aid and Levy Impact Where is the district in the Equalization Aid formula? ◦ District/Local Factors  Shared Costs (Spending)  Equalized Property Value (Wealth)  Membership (Number of Students to Educate) ◦ State Factors  Cost Ceilings  Guaranteed Valuations  Total Amount Of Funding 6

Positive Primary Aid Positive Secondary Aid Positive Tertiary Aid Negative Tertiary Aid Negative Secondary Aid No Equalization Aid Equalization Aid 7

DPI Resources for Estimating Equalization Aid Longitudinal Data available to look at trends Simplified Aid Worksheet for estimating scenarios

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Potential Pros and Cons Allows districts to set aside funds for capital projects May level out expenses for shared cost (rather than a large project expenditure in Fund 10) Opportunity for end of fiscal year expenditure May not use funds for an initial five year period May only use funds for capital facility projects 12

Requirements for Fund 46 Board approved long-term capital improvement plan (minimum of 10 years) Funds may only be accessed five years after the establishment of the “trust” fund. Funds must be physically deposited and held in a segregated bank/investment (separate and distinct from other district accounts) until they are expended for capital improvement projects per the district’s plan. Funds invested as per sec , Wis. Stats. Timing Requirements 13

COMMUNITY PROGRAMS AND SERVICES (CPS) FUND 80 14

PI-80 Community Programs and Services The Department is required to define ineligible costs for Community Programs and Services by administrative rule. PI-80 emergency rules took effect on July 1,

PI-80 Community Programs and Services Statutory authority: (19) C OMMUNITY PROGRAMS AND SERVICES. Establish and maintain community education, training, recreational, cultural or athletic programs and services, outside the regular curricular and extracurricular programs for pupils, under such terms and conditions as the school board prescribes. The school board may establish and collect fees to cover all or part of the costs of such programs and services. The school board may not expend moneys on ineligible costs, as defined by the department by rule. Costs associated with such programs and services shall not be included in the school district's shared cost under s (6). 16

PI-80 Community Programs and Services (New Rule) Ineligible costs means school district costs that are not the actual, additional costs to operate community programs and services. First, costs are ineligible if they are not costs to operate community programs and services. Community programs and services do not include any program that is limited to only school district pupils or any program or service whose schedule presents a significant barrier for age-appropriate school district residents to participate in the program or service. Second, costs must not only be costs to operate community programs and services to be eligible but also must be actual, additional costs. Ineligible costs include costs that would be incurred by the school district if the community programs and services were not provided by the school district. 17

PI-80 Community Programs and Services (New Rule) PI Definitions. In this chapter: “Community programs and services” does not include: ◦ Any program or service that is limited to only school district pupils. ◦ Any program or service whose schedule presents a significant barrier for age-appropriate school district residents to participate in the program or service. “Ineligible costs” means school district costs that are not the actual, additional costs to operate community programs and services under s (19), Stats. “Ineligible costs” includes costs that would be incurred by the school district if the community programs and services were not provided by the school district. 18

PI-80 Community Programs and Services (New Rule) Provide you with some basic information about the impact of transitioning from DPI guidelines, to criteria, and now to administrative rules. It is important to understand that an emergency rule has the power of law until the process has been completed. The legislature will review the rule and have the ability to modify the rule in the spring of

PI-80 Community Programs and Services (New Rule) What does “actual” and “additional” costs mean to a school district? A cost, that if the ability to operate the Community Service Fund (Fund 80) ended; a school district, would not have to move those costs to the General Fund (Fund 10) to continue the regular curricular and extracurricular programs for its students. A few examples: ◦ Before school and after school childcare open to any district resident. ◦ Adult technology classes held at the local public library. ◦ Adult literacy classes held at a township hall within the school district. 20

PI-80 Community Programs and Services (New Rule) What does “actual” and “additional” costs mean to a school district? A more complex example: The summer baseball program for all interested resident students uses the school district’s ball diamond for games, after the high school season is over. ◦ District employees do the mowing, mark the field, and clean up after the game. The field does not have lights and the concession stand is not operating.  Each District employee logs their time related to this program and based on past records the total hours/game are determined and charged to Fund 80.  The related costs for mower fuel and field paint is based on past years records and are charged to Fund

PI-80 Community Programs and Services (New Rule) What does “actual” and “additional” costs mean to a school district? An example of an expense not meeting this standard: An adult ballroom dance class is held one night a week for 6 weeks in the middle school gym. It has the facility for a 3 hour period of time. The class instructor or a participant sweeps the floor before the class starts. The custodial staff do not clean the gym or restrooms in this part of the building until after everyone from the class has left the school. There can be no custodial time or related costs charged to Fund 80 for this class as there was no actual or additional cost incurred. 22

Community Service Fund 80 – Levy Limit Current law limits the Fund 80 levy authority. The levy limit is the same for FY 14 & FY 15. The levy limit expires after Act 46 amended the levy limitation: 2011 Fund 80 levy if more than the 2012 levy; and Less than $1,000,000. To exceed this levy limit, requires the district to hold a referendum. 23

Questions? Fund 46 – Long-Term Capital Improvement Trust Fund Carey Bradley, Consultant..…… Community Programs and Services (Fund 80) Bruce Anderson, Consultant …… Bob Soldner, Director …………