1. WASBO Fall Conference 2014 “Year Of Success” Track October 2, 2014 Bruce Anderson – School Finance Consultant, DPI Bob Avery – Director of Business Services, BDUSD

2. REVENUE LIMITS…. ….will determine approximately 85-95% of your general fund’s revenue budget! 2 Go to dpi.wi.gov/sfs/revlimworksheet to load your district’s worksheet anddpi.wi.gov/sfs/revlimworksheet work along with us as we go through the presentation and worksheet.

3. The Revenue Limit controls the following revenues: General Fund (Fund 10) o Property Tax Levy o General Aid: Equalization Aid (for most districts) Chapter 220 (Integration) Programs, and Special Adjustment Aids. o Computer Aid Non-Referendum Debt (Fund 38) Levy Capital Projects (Fund 41) Levy 3

4. The Revenue Limit does not control the following revenues: School Fees Categorical Aids (Library, Transportation, Sparsity, SAGE, High Poverty Aid, High Cost Transportation, etc.) State and Federal Grants Gate Receipts Donations Tax Levies for Referendum Approved Debt (Fund 39) and Community Service (Fund 80) Funds 4

5. Four Step Process: Step 1: Build the Base Revenue Per Member. (Worksheet lines 1-3) Step 2: Calculate New Revenue Per Member (Worksheet lines 4-7) Step 3: Determine Allowable Exemptions. (Worksheet lines 8-11) 5

6. Step 4: Determine Levy & Computer Aid Amounts. Controlled Amounts  Levies for Funds 10, 38, 41  DOR Computer Aid (Worksheet lines 14, 17 & 18) Non-Controlled Amounts  Levies for Funds 39 & 80  Prior-Year Chargeback (Fund 10, Src 212) (Worksheet line 15c) 6

7.  A point to remember…  $150.00 per Member in 2014-15  $150.00 per Member each year “thereafter”  Subject to Legislative action – may be eliminated in the next biennium  No longer included on the Revenue Limit worksheet as it will NOT be affected if the district chooses to under-levy. 7

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10. 10  Green cells are formula cells and will auto calculate the amount for that cell based on the values entered in other cells.  Yellow cells pull data on file with DPI and loaded on the “Data” tab of the worksheet. Line 12A State General Aid reflects the July 1 aid estimate. This WILL be updated on Oct. 15.  Pink cells require district entry. Note: some of the pink cells will become yellow cells as additional data become available, such as property values and 2014 enrollment data.

11. 2013-14 2014-15 11 * NOTE: Next Year levy for non-recurring exemptions = Line 10 – under-levy amount. * *

12. ITEM13-14 RL Line +October 15 Certified General AidLine 12A +High Poverty AidLine 12B +State Aid for Exempt ComputersLine 17 +Fund 10 Tax LevyLine 18 +Fund 38 Tax LevyLine 14B +Fund 41 Tax LevyLine 14C -Revenue Limit PenaltyFrom DPI -Levy for Non-Recurring Exemptions Non-Recurring ReferendaLine 10A Declining EnrollmentLine 10B Energy EfficiencyLine 10C Refunded/Rescinded TaxesLine 10D Prior Year Open EnrollmentLine 10E Hold HarmlessLine 7B Prior-Year Data (2013-14) 2014-15 Base 12

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14. Previous three year average membership = September (Third Friday) counts + 40% of Summer School FTE For 2014-15, use years 2011, 2012, and 2013 14

15. 2013-14 Line 1 ÷ Base Membership Previous 3-Year Average Line 2 (Fall 2011, 2012, 2013) = Base Revenue Per Member Line 3 $15,557,250 1,699 $9,156.71 15

16. Line 4A: Each year, under current law, each district’s per pupil revenue limit may change.  Historically was an inflationary increase.  Recently has been fixed dollar amounts.  For 2014-15, line 4A = $75.00.  Future years = $0. May change with legislative action in the next biennium. 16

17. Line 4B: Under current law, if after adding line 4A to line 3, a district has a per pupil base revenue per member of under $9,100 (called a “low revenue ceiling”) the per pupil revenue limit is adjusted up to the ceiling. Line 4B will automatically pre-fill if your district meets this criteria. 17 ScenarioLine 3Line 4A3 + 4ALine 4BLine 5 Low Revenue$8,956.71$75.00$9,031.71$68.29$9,100.00 Above Ceiling$9,156.71$75.00$9,231.71$0.00$9,231.71

18. Line 4C: If your district participates in a CCDEB, please call the DPI School Finance Team for further instructions for Line 4C. Line 4 = Line 4A + Line 4B + Line 4C NOTE: Line 4C may be negative. 18

19. Line 5 is the sum of Lines 3 and 4 (auto-calculates). Note: if Line 4C is a >0, the resulting Line 5 will be less than $9,100.00. 19

20. Current three year average membership = September (Third Friday) counts + 40% of Summer School FTE For 2014-15, use years 2012, 2013, and 2014 20

21. Line 7 Revenue Limit = Line 7A + Line 7B Line 7A = Line 5 x Line 6 If Line 7A is less than Line 1 (below) the difference will automatically calculate in Line 7B. This is a non-recurring exemption. Line 7B = Line 1 – Line 7A, but not < 0. 21

22. Calculate a New Revenue Limit 22

23. Exemptions to the Revenue Limit allow districts to levy additional amounts up and above the amount generated by the computation up to this point.  Line 8 identifies Recurring Exemptions.  Line 10 identifies Non-Recurring Exemptions.  (Line 7B is also non-recurring and is treated the same way as Line 10.) It’s important to understand the distinction between the two. 23

24. Recurring Exemptions – Permanently in Your Base Base Non-Recurring Exemptions – One Year Only Recurring This Year Next Year Base Non-Recurring Base This Year Next Year 24

25. Recurring Exemptions (Lines 8A-E) are base-building – that is, if the district taxes for any of this additional authority, the levy amount is included in the subsequent years’ base. Any unused recurring authority is eligible for 100% carryover into the next year. 25

26. Line 9 = Line 7 + Line 8 26

27. Non-Recurring Exemptions (Lines 10A-E) are not base-building – that is, if a district taxes for any of these exemptions, the amount is not included in the succeeding year’s base. In addition, any unused non-recurring authority is not eligible for carryover in the next year. Districts have one, and only one, opportunity to use non- recurring exemptions. 27

28.  Line 10B, Declining Enrollment Exemption, will auto-fill based on the 2014 membership numbers entered on the left side of the worksheet.  Line 10E, is a change per 2013 Wisconsin Act 20, “Prior Year Open Enrollment (uncounted pupils)” has been moved from Recurring to Non-Recurring Exemption. 28

29. The decline in the three-year average of 1 FTE is multiplied by the new per pupil limit on Line 5 to determine the exemption amount. 29 Left side of worksheet Right side

30. Line 11 = Line 9 + Line 10 30

31. Line 11 is the final “Revenue Limit With All Exemptions” for your district. This is the total revenue your district can receive from the combination of Property Tax for Funds 10, 38, and 41 + State General Aid +  Equalization, Special Adjustment, and Integration Aids High Poverty Aid + State Computer Aid 31

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33. Line 11 represents the total amount of resource your district will get from property tax, state general aids, and exempt computer aid. This will equal about 70-90% of total revenues for most districts and 85-95% of general fund revenues. For budgeting purposes, it’s very important to compare this year’s Line 11 with the previous year’s Line 11. Major decreases in Line 11 from year to year can have serious implications for your budget. Remember that results for 2011-12 will skew analysis trending due to the 5.5% reduction in Line 4A. 33

34. Total Revenue Limit with Exemptions Year 1 Year 2 Year 3 Total Revenue Limit with Exemptions Decreasing resources indicates the need for the district to evaluate current programs for efficiency, identifying cost-saving measures. The earlier in the budget you know this, the better. 34

35. Controlled Amounts – Lines 12-14, 17, 18 State General (12A) Poverty Aid (12B) Fund 10, General Fund Levy (18) Fund 38, Non-Referendum Debt Service Levy (14B) Fund 41, Capital Projects Levy (14C) Computer Aid (17) Non-Controlled Amounts – Lines 15 & 20 Fund 39, Referendum Debt Levy (15A) Fund 80, Community Service Levy (15B)* Fund 10, Src 212, Property Tax Chargebacks (15C) * Note: Fund 80 has new restrictions for 2014-15. 35

36. State Aids: Line 12 = Line 12A + Line 12B  State General Aid (Line 12A) Currently shows the July 1 Aid Estimate Amount Will change with October 15 Certified Aid Amount  Aid to High Poverty Districts (Line 12B)  Allowable Limited Revenue (Line 13) Line 11-Line12 36

37. 37 State General Aids (line 12) * Computer Aid is based on the total levy, but, at this point in the computation, we don’t have total levy yet. Calls for a strategy on how to get the limited portion right… Revenue Limit (Line 11) Allowable Limited Levy, including Computer Aid (Line 13) Controlled Levies: F-10 Levy F-38 Levy F-41 Levy Computer Aid * Controlled Levies Fund 10 Levy Fund 38 Levy Fund 41 Levy Non- Controlled Levies (39+80 +10 chargebacks ) Total Tax Levy + Comp Aid (Line 16) Computer Aid Total Tax Levy- Line 19

38. STRATEGY: First, enter the amounts you intend to levy for Funds 38 (line 14B) and 41 (line 14C). Then, enter into line 14A the difference between line 13 and the sum of lines 14B & C. By doing this, you have levied to your maximum. Note that districts may choose to levy less than the maximum, in which case, a lower amount would be entered in Line 14A. 14A <= 13 – (14B + 14C) Remember: Line 14 cannot exceed Line 13! If it does, you must reduce something in Line 14 (or, remain in a penalty situation). 38

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41. Enter non-controlled levies (levies outside the revenue limit) on line 15: Referendum Approved Debt Service (Fund 39) Community Service (Fund 80) Prior Year Chargeback (Fund 10, Source 212) Other (Milwaukee & Kenosha only) Line 15 = 15A + 15B + 15C + 15D 41

42. Line 16 = Line 14 + line 15 42

43. Computer Aid is based on property values and total levy. You must enter property values in Line 17 A and B on left side for the calculation to work properly. Be sure to update these amounts once the Department of Revenue releases the 2014 certified Property Values, expected on October 1. 43

44. Once you have entered the property values and all of the levy amounts on Lines 14 & 15, the spreadsheet automatically calculates Computer Aid on Line 17. 44

45. Once all your numbers are entered, the spreadsheet will auto-calculate Line 18. THIS (Line 18) will be the amount of your Fund 10 (Source 211) Property Tax Levy for 2011-2012. Line 18 = Line 14A – Line 17 45

46. Line 19 is your total school tax levy – the amount certified to DPI and the DOR on the PI-401 and to municipalities on the PI-1508. Line 19 = Line 14B + 14C + 15 + 18 The worksheet also calculates your tax rate (Line 19 / Property Value “B” (TIF-Out Equalized property Valuation). The “Mil Rate” = levy rate X 1,000. Line 20 is the total levy for debt service, Fund 38 + Non Fund 38. Line 20 = Line 14B + Line 15A 46

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48. We have walked through the revenue limit worksheet. However, we have not accounted for actual:  2014 enrollment data (Summer or September)  Due to DPI from District on Wed., Oct 8  October property values  scheduled to be released by DOR on 10/1  October 15 Certified State Aid. Please Note: 48

49. We encourage you to register for one of the “Getting It Right” workshops hosted by WASDA and presented by DPI. Information is available at http://wasda.org/ http://wasda.org/  Wednesday, October 22 in Stevens Point  Thursday, October 23 in Madison The DPI SFS Team will go through the revenue limit worksheet line by line with updated data. At the end of the day, you will have a completed worksheet with your 2014-15 revenue cap and levy information. 49

50. dpi.wi.gov/sfs Resources on the DPI Website Longitudinal Data (green scanbar) > Revenue Limits > Section on Multi-Year Revenue Limit Data SFS Homepage SFS Team is in the process of updating 50

51. Visit the DPI SFS web site: dpi.wi.gov/sfs Or call (all area code 608)  Bruce Anderson, Consultant608-267-9707  Carey Bradley, Consultant608-267-3752  Dan Bush, Consultant608-267-9212  Karen Kucharz, Consultant608-266-3464  Gene Fornecker, Auditor608-267-7882  Michele Gundrum, Auditor608-267-9218  Brian Kahl, Auditor608-266-3862  Bob Soldner, Director608-266-6968 51

52. REVENUE LIMIT CARRYOVER DISCUSSION…. (optional) 52

53. 1.) If our a district added 9 FTE to their 2013 Fall count, how would Lines 6 & 7 change? 2.) How does a district enter an underlevy on the worksheet? The revenue limit uses a 3-year average, so the 9 extra kids would compute to an increase of 3 FTE on Line 6. The dollar increase to Line 7 would be 3 x the 14-15 Maximum Revenue/Memb on Line 5. The district revenue limit status is computed by subtracting Line 14 from Line 13. If the district wishes to underlevy, enter a number in Line 14 that is less than Line 13 by the amount of underlevy. 53

54. 3.) Your district has only recurring exemptions and wants to underlevy. How much of your underlevy will be carried over into the next year? 4.) Your district has only non-recurring exemptions and wants to underlevy. How much of your underlevy will be carried over into the next year? 100% Only the amount of underlevy that exceeds the amount of your non-recurring exemptions will be carried over. 54

55. 5.) Your district has BOTH recurring and non-recurring exemptions and wants to underlevy. How much of your underlevy will be carried over into the next year? This can be very tricky and depends on the amounts of each exemption, plus the amount of the underlevy. The Revenue Limit Worksheet includes an audit check to the right of the calculations that show the allowable carry- over under existing law. Call the SFS Team at DPI to discuss further to understand your circumstances. 55

56. 6.) Is there any relationship between Line 11 and Line 12 – i.e. does it have to be 2/3rds (66%)? There is and never has been an intentional relationship between these 2 lines. What a district gets for aid on Line 12 is dependent on the state appropriation for General Aid and how the district fares in the aid formula. This does NOT have anything to do with 2/3rds (66%.) 56

57. Recurring Exemptions Prior-Year Carryover Transfer of Service Transfer of Territory Federal Impact Aid Loss Recurring Referenda to Exceed (if year 1 of authority) Non-Recurring Exemptions Non-Recurring Referenda to Exceed Declining Enrollment Line 7 Hold Harmless Energy Exemption Other 57

58. Base $10,000,000 Inflationary Increase Transfer of Service Recurring Referendum Prior Year Aid plus Levies (no backouts) #1 - Recurring Exemptions, Levied to Max 2013-142014-15 Aid + Levy Base This district used all of its authority and has no carryover authority into 14-15, Line 8A. 58

59. Base $10,000,000$9,800,000 Inflationary Increase Transfer of Service Recurring Referendum Prior Year Aid plus Levies (no backouts) #2 - Recurring Exemptions, Underlevy 2013-14 Aid + Levy Base This district will have $200,000 of carryover authority in 2014-15 in Line 8A. Underlevied by $200,000 2014-15 59

60. Base Inflationary Increase Decl Enroll - $150,000 Prior Year Aid plus Levies Minus $150,000 (base backout) #3 - Non-Recurring Exemptions, Levied to Max 2013-14 Aid + Levy Base This district will have no carryover authority in 2014-15 in Line 8A. 2014-15 60

61. Base Inflationary Increase Low Revenue Increase Line 7 - $46,000 Prior Year Aid plus Levies Minus $36,000 (base backout of amount used) #4 - Line 7 Hold Harmless Non-Recurring, Recurring, Under-levy 2013-14 Aid + Levy Base This district will have no carryover authority in 2014-15 in Line 8A. Underlevied by $10,000 Transfer of Service 2014-15 61

62. Base Inflationary Increase Transfer of Service Line 7 - $46,000 Prior Year Aid plus Levies (no backout) #5 - Line 7 Hold Harmless Non-Recurring, Recurring, Under-levy 2013-14 Aid + Levy Base This district will have $10,000 in carryover authority in 2014-15 in Line 8A. Underlevied by $56,000 2014-15 62

63. Base Inflationary Increase Line 7 - $40,722 Rec Ref - $252,707 Prior Year Aid + Levies 2013-14 Aid + Levy Base Plus, this district will have $43,955 of carryover authority in 2014-15 in Line 8A. Decl Enroll - $168,030 Underlevied by $252,707 $43,955 2014-15 63 #5 - Line 7 Hold Harmless Non-Recurring, Recurring, Under-levy