20 TH ANNUAL SMALL SCHOOLS CONFERENCE

1. 20TH ANNUAL SMALL SCHOOLS CONFERENCE DPI School Finance Issues Jerry Landmark, Karen Kucharz March 10, 2005

2. Finance Issues - Agenda • What the Finance Team is up to. • Budgeting – From Estimates to Levy Certification

3. what we’re up to….A New, Improved Way to Report Your Levy • We’ve started to work on a project with Dept. of Revenue linking the PC-401, SD-401 and PI-1508 in an internet application. • It will allow you to input your levy information, and the program will automatically generate the other worksheets.

4. what we’re up to….A New, Improved Way to Report Your Levy • A district will input its total levy (one number) into the PC-401. Everything else is pre-populated by DOR, and the pro-rations will be automatically calculated.

5. what we’re up to….A New, Improved Way to Report Your Levy • The total levy will be transferred to the SD-401, where the district will break down its levy into fund, including funds 10, 38, 41, etc. • Edits will be built in, so if a district doesn’t have a Fund 41, it won’t be allowed to enter a number.

6. what we’re up to….A New, Improved Way to Report Your Levy • The info from the SD-401 and Pc-401 will automatically generate the tax levy certification form (PI-1508) that districts send to each municipality in the school district.

7. what we’re up to….A New, Improved Way to Report Your Levy • Benefits to districts: easier input via the internet, accurate levy information; less chance for error. • Benefits to DPI and DOR: accurate, up-to-date information. • We anticipate it will be available this fall.

8. ….what else we’re up to…. • Debt Tables – on-line input via the Reporting Portal, it then interacts with Budget and Annual Reports. • Equalization Aid Calculation – automatic calculation after completing annual and budget reports.

9. Budgeting Organize Your Budget Development Around a Calendar of Activities

10. Budgeting December: Update Enrollment Projections • Use Cast Forward Method • Contact Your County Office for Info • “Kindergarten Round-Up” in Spring • Be Aware of Changes in Housing Patterns

11. Budgeting Early January: • Develop a Preliminary Revenue Limit Estimate using Enrollment Projections and Prior-Year Levies/October 15 Aid • Determine Staffing Levels Based on Kid Count/Grade Levels/Required Class Sizes • Make Initial Staff Assignments • Estimate Salary Cost for Staff Based on Actual Salary Schedule or Schedule from Negotiation Proposal (Any Grant-Funded?)

12. Budgeting: Preliminary Revenue Limit – The Basics • The revenue limit is “a limit on the revenue a school district is entitled to receive from general state aid* and local levies.” *General state aid includes equalization aid, special adjustment aid and integration aid • It is not a spending limit.

13. Budgeting: Preliminary Revenue Limit – The Basics • The limit includes revenue from levies for Funds 10, 38 and 41. • Other sources of revenue are not included in the revenue limit - referendum debt service levy (Fund 39), categorical aid, grants, fees, community service levy (Fund 80), etc.

14. Budgeting: Preliminary Revenue Limit – The Basics • When you calculate your 2005-06 revenue limit, it’s important to have your 2004-05 worksheet available as well as the October 15, 2004 aid certification. • Membership is very important to the revenue limit calculation - have an accurate estimate of your Sept. 2005 FTE.

15. Budgeting: Preliminary Revenue Limit – The Basics • Step 1: Calculate the base (2004-05) revenue per member. (Worksheet lines 1 - 3) • Step 2: Calculate a new (2005-06) revenue per member amount prior to exemptions. (Worksheet lines 4 - 7) • Step 3: Determine exemptions and add to New Revenue Limit per Member. (Worksheet lines 8 - 11)

16. Budgeting: Preliminary Revenue Limit – The Basics • Step 4: Determine portions of the maximum limited revenue that are derived from: • General Aid • Funds 10, 38, and 41 • DOR Computer Aid (Worksheet lines 12 - 18)

17. Budgeting: Preliminary Revenue Limit – The Basics • What are the changes to the 2005-06 revenue limit? • Per member increase • Low spending districts may increase their per member spending to $8,100 in 05-06 if they want. (Governor’s Proposed Budget)

18. Budgeting: Preliminary Revenue Limit – The Basics The 04-05 Final Revenue Limit provides information for the 05-06 base computation.

19. Budgeting: Preliminary Revenue Limit – The Basics 2004-05 Revenue Limit 2005-06 Revenue Limit

20. 2005-2006 Revenue Limit • Go to Revenue Cap Worksheets

21. 2005-2006 Revenue Limit So, what does this mean for my district, and how do I use this information for budgeting?

22. 2005-2006 Revenue Limit Fund 10 Line 18: Src 211 Line 15C: Src 212 Line 17: Src 691 Line 12: Src 621 Fund 38 Line 14B: Src 210 Fund 39 Line 15A: Src 210 Fund 41 Line 14C: Src 210 Fund 80 Line 15B: Src 210

23. Using This Data for Budgeting Fund 10 Line 18: Src 211 Line 15C: Src 212 Line 17: Src 691 Line 12: Src 621

24. Budgeting A bird’s eye view of your 2005-06 budget:

25. Budgeting Mid January: • Determine Class-Level Budget Amounts • Estimate District-Level Expenditures for Utilities, Fuel, Operating Supplies, Maintenance Requirements, Transportation, Insurance, Legal, Audit, Phone/Copier Leases, CESA Contracts, etc. • Estimate all Revenues Outside of Revenue Limit (Athletic Admissions, Earning on Investments, Gifts, Fees, Fines, Categorical Aid, Entitlement Grant Revenues, etc.)

26. Budgeting February: • Develop Complete Picture, Identifying Structural Deficit and Level of Cuts • Develop Strategy to Absorb Deficit (BOE Finance Committee Involved) • Distribute Budget Parameters to Departments for Individual Budget Development

27. Budgeting April: • By April 1, All Budgets Due in Budget Office (submitted via paper or software) • Start Final Compilation/Formulation of Budget • All current-year purchase orders should be submitted to business office by mid-April. This allows time to get materials for current-year programs and for clearing out purchase orders/encumbrances in preparation for year-end activities.

28. Budgeting Mid-April: • DPI Provides Early 05-06 General Aid Estimates May: • Finalize 05-06 Budget. Approve for Presentation at Annual Meeting. Before Checking Out for Summer, Staff Fills Out Requisition/Purchase Orders for Items Wanted at the Beginning of 05-06

29. Budgeting September: • 3rd Friday Count Taken October 15: • Update Revenue Limit Computation with 3rd Friday Count and Aid Certification November: • BOE Approves Levy. Tax Invoices Sent.

30. Budgeting – Final Steps The levies you ended up entering in your Budget Report…….. (which started with your revenue limit computation and could have been revised)

31. Budgeting – Final Steps must match the levies you certify to the Department of Revenue….

32. Budgeting – Final Steps and must match the grand total of the tax bills you send to municipalities.

33. Budgeting & Revenue Limit- Problem Areas - • Don’t forget to budget Open Enrollment Revenues and Expenditures. • Be careful to not overlevy by your computer aid. The Fund 10 levy is line 18 from your revenue limit computation. • After October 15, remember to update your revenue limit with the October 15th Aid Certification.

34. Questions? • Visit our web site: • www.dpi.state.wi.us/dpi/dfm/sfms

35. Or call: • Brad Adams, Consultant, 267-3752 • Karen Kucharz, Consultant, 267-9707 • Jerry Landmark, Assistant Dir., 264-3464 • Gene Fornecker, Auditor, 267-7882 • Natalie Rew, Auditor, 267-9212 • Kathryn Guralski, Auditor, 266-3862 • David Carlson, Director, 266-6968