1. 20 TH 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. What the Finance Team is up to. Budgeting – From Estimates to Levy Certification 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. 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. It will allow you to input your levy information, and the program will automatically generate the other worksheets.

4. 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. 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. what we’re up to…. A New, Improved Way to Report Your Levy

5. 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. 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. Edits will be built in, so if a district doesn’t have a Fund 41, it won’t be allowed to enter a number. what we’re up to…. A New, Improved Way to Report Your Levy

6. 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. 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. what we’re up to…. A New, Improved Way to Report Your Levy

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

8. ….what else we’re up to…. Debt Tables – on-line input via the Reporting Portal, it then interacts with Budget and Annual Reports. 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. 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 Use Cast Forward Method Contact Your County Office for Info Contact Your County Office for Info “Kindergarten Round-Up” in Spring “Kindergarten Round-Up” in Spring Be Aware of Changes in Housing Patterns Be Aware of Changes in Housing Patterns

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

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

13. The limit includes revenue from levies for Funds 10, 38 and 41. 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. 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. Budgeting: Preliminary Revenue Limit – The Basics

14. 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. 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. Membership is very important to the revenue limit calculation - have an accurate estimate of your Sept. 2005 FTE. Budgeting: Preliminary Revenue Limit – The Basics

15. Step 1: Calculate the base (2004-05) revenue per member. 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 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) Step 3: Determine exemptions and add to New Revenue Limit per Member. (Worksheet lines 8 - 11) Budgeting: Preliminary Revenue Limit – The Basics

16. Step 4: Determine portions of the maximum limited revenue that are derived from: 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) Budgeting: Preliminary Revenue Limit – The Basics

17. What are the changes to the 2005-06 revenue limit? 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) Budgeting: Preliminary Revenue Limit – The Basics

18. The 04-05 Final Revenue Limit provides information for the 05-06 base computation.

19. Budgeting: Preliminary Revenue Limit – The Basics 2004-05 Revenue Limit2005-06 Revenue Limit

20. 2005-2006 Revenue Limit Go to Revenue Cap Worksheets 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. A bird’s eye view of your 2005-06 budget: Budgeting

25. Mid January: Determine Class-Level Budget Amounts 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 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.) Estimate all Revenues Outside of Revenue Limit (Athletic Admissions, Earning on Investments, Gifts, Fees, Fines, Categorical Aid, Entitlement Grant Revenues, etc.) Budgeting

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

27. April: By April 1, All Budgets Due in Budget Office (submitted via paper or software) By April 1, All Budgets Due in Budget Office (submitted via paper or software) Start Final Compilation/Formulation of Budget 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. 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. Budgeting

28. Mid-April: DPI Provides Early 05-06 General Aid Estimates DPI Provides Early 05-06 General Aid EstimatesMay: Finalize 05-06 Budget. Approve for Presentation at Annual Meeting. 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 Budgeting

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

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. 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. 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 15 th Aid Certification. After October 15, remember to update your revenue limit with the October 15 th Aid Certification.

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

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