4/14/2016
Long Term Facilities Maintenance
Revenue
Dale Sundstrom
Education Finance Specialist
School Finance Division
MASBO Annual Conference
Goldmine Session
May 4, 2016
“Leading for educational excellence and equity. Every day
for every one.”
LTFM Revenue
Agenda
1.
2.
3.
4.
5.
6.
7.
LTFM Overview
LTFM Plan Documentation
Revenue Calculations
Expenditure Plans
Fund Balances “old” and “new”
UFARS before - after July 1, 2016
Questions?
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Long Term Facilities Maintenance Revenue
Overview
Minnesota Statutes 123B.595 Long Term
Facilities Maintenance Revenue
Provides funding for the district ten year
facility plan after the plan is approved by
the school board And subsequently approved by the
Commissioner of Education
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Long Term Facilities Maintenance Revenue
Overview
Districts submit an expenditure and revenue
plan to MDE that shows how they will fund
ten years of expenditures that include:
• The health and safety program
• Facility modifications to remove barriers
to accessibility in public schools
• Deferred maintenance of school facilities
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Long Term Facilities Maintenance Revenue
Overview
• MDE provides the format for ten year plan
submission
• The MDE expenditure format is a summary
totaled by finance code and is a reflection of
the district’s detailed plan
• The revenue plan offers flexible funding
options and is used in conjunction with the
expenditure plan to determine the timing and
method of funding facility needs
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LTFM Ten Year Plan Documentation
located on the MDE website at:
School Support > School Finance > Facilities and Technology
School districts must submit:
Ten Year Expenditure Plan (live Excel spreadsheet)
Ten Year Revenue Projection (live Excel spreadsheet)
LTFM Revenue – Statement of Assurances
Minutes of school board adoption of the ten year plan
Intermediate districts and Co-operative districts submit:
The LTFM Cooperative Allocation Worksheet rather
than the ten year revenue spreadsheet (live Excel)
http://education.state.mn.us/MDE/SchSup/SchFin/FacTech/index.html
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Revenue Calculations
Excel spreadsheet
• The revenue spreadsheet has four main sections
–
–
–
–
Per pupil calculation
Additional revenue originating from old law or new law
Hold harmless calculation
Total revenue, aid and levy, Funds 01 and 07 amounts
• Several options are available to speed up or
slow down expenditures for facility projects
- Annually spend revenue
- Save for future projects
- New debt for “large” or “several” projects
- Combinations of above
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Revenue Calculations
Example: Per Pupil Calculation
PER PUPIL CALCULATION
6. Current year APU
2017
2018
637.20
647.80
7. District average building age (uncapped)
8. formula allowance
41.60
42.60
$193.00
$292.00
9. building age factor = (Lesser of (7) / 35 or 1)
10. initial revenue = (6) * (8) * (9)
1.00
1.00
$122,979.60
$189,157.60
Verify the accuracy of data
Understand formula implications as the data changes
Spreadsheet & Levy use projection systems - update as needed
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Revenue Calculations
Example: Additional Revenue
ADDITIONAL REVENUE
Debt service for existing Alt facilities H&S bonds (1B) gross before debt excess
Debt Excess related to Debt service for existing Alt
facilities H&S bonds (1B)
Debt service for portion of existing Alt facilities bonds
from line (22) attributable to eligible H&S Projects >
$100,000 per site (1A)
Debt Excess related to Debt service for portion of existing
Alt facilities bonds attributable to eligible H&S Projects >
$100,000 per site (1A)
Pay as you go levy for FY 2016 and earlier Alt Facilities
H&S projects financed over more than one year (1B)
Debt service for LTFM bonds for eligible new H&S
projects > $100,000 / site
Pay as you go revenue for eligible new H&S projects >
$100,000 / site
Total FY 17 revenue for eligible H&S projects >$100,000 /
site
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2017
2018
-
-
-
-
-
-
-
-
212,729.97
212,729.97
586,281.58
586,281.58
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Revenue Calculations
Example: Hold Harmless Calculation
HOLD HARMLESS CALCULATION
Old formula H&S revenue (estimated annual costs for all
eligible projects < $500,000)
Old formula alt facilities debt revenue (1A) - gross before
debt excess
2017
2018
31,826.11
32,144.37
-
-
Debt Excess allocated to line 22
-
-
Old formula alt facilities debt revenue (1A) - debt excess
-
-
Old formula alt facilities debt revenue (1B)
-
-
Old formula alt facilities pay as you go revenue (1A)
Old formula alt facilities pay as you go revenue (1B) >
$500,000
Old formula deferred maintenance revenue
-
-
Total old formula revenue =
-
-
40,780.80
41,459.20
72,606.91
73,603.57
Revenue: Initial plus Additional > Hold Harmless $335,709.57 ($122,979.60 + $212,729.97)
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Revenue Calculations
Example: Total and Debt with Per Pupil $$
Total LTFM Revenue for Individual District Projects
= (Greater of Initial + Additional or “old law”)
LTFM Revenue for District Share of Eligible
Cooperative / Intermediate Projects (Unequalized)
Maximum LTFM Revenue
District Requested Reduction from Maximum LTFM
Revenue (to levy less than the maximum). Also
enter this amount in the Levy Information System
Grand Total LTFM Revenue
335,709.57
775,439.18
-
-
335,709.57
775,439.18
49,569.35
74,639.18
286,140.22
700,800.00
A district can issue debt and make payments with the per pupil amount
Line Additional Debt service for LTFM bonds issued
50 for a portion of initial formula revenue on line 10
23,410.25
64,518.42
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Revenue is a three year phase in!
• Fiscal 17 is $193 X APU X < 1 or Ave Bld Age/35
• Fiscal 18 is $292 X APU X < 1 or Ave Bld Age/35
• Fiscal 19 is $380 X APU X < 1 or Ave Bld Age/35
Plus approved IAQ, fire, and asbestos projects
over $100,000
Or what would have been received under old laws
if greater - 123B.57, 123B.59 and 123B.591.
Hold harmless is true for any upcoming year!
MDE expects few districts to use “hold harmless”
provisions after the new formula is fully phased in.
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Charter Schools
Charter schools revenue per APU
Fiscal 17 is $34 per pupil
Fiscal 18 is $85 per pupil
Fiscal 19 is $132 per pupil
Revenue is state aid and charter schools can use for
any school purpose. A ten year plan is not required.
Intermediate Districts and Co-operatives
Intermediates and other cooperative units need board
approval from all member districts to add the
proportionate share of LTFM costs to their levy.
The bond payment or pay-as-you-go levy is “in
addition to” the school districts levy authority.
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Expenditure Plan
- Short Overview -
• District maintains 10 year project detail level plan
• Allocate among 16 finance codes for MDE (10 new)
• Summarize & complete live Excel spreadsheet!
Remember special treatment for:
• Unique projects by UFARS program codes
- 865 All LTFM except programs 866 & 867
- 866 H&S > $100,000 in finance 358, 363, 366
- 867 Single project > $2 million at a site
Only include project costs for available LTFM funding!
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Expenditure Plan - Example Approach
for Deferred Maintenance Projects
Restore currently owned facilities to new condition
District identifies facility maintenance needs:
roofs, parking lots, HVAC, boiler, all facility related
Identify year project work is planned/needed
Prioritize projects in years using available revenue
Identify projects with finance code to ease totaling
A benefit of planning is to identify all areas of
future work and provide funding at the right time!
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Ten Year Plan Submission
Expenditure and Revenue Spreadsheets
Statement of Assurances
Additional narrative if H&S > $100,000
Additional narrative if project > $2,000,000
Bond schedules – for each category of bonds
Minutes of board approval
All documentation sent to MDE is board approved first
E-mail only: live Excel spreadsheets for revenue
and expenditure, pdf for other documentation
To: [email protected] by July 31, 2016
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Long-Term Facilities Maintenance – FY 2017
Restricted/Reserved Fund Balances
As of June 30, 2016, Deferred Maintenance (Balance
Sheet Account 405), Health and Safety (Balance Sheet
Account 406) and Alternative Facilities (Balance Sheet
Account 409) will have fund balances and will be
reported on the FY 2016 audited financial statements.
As of July 1, 2016, Deferred Maintenance and
Alternative Facilities Restricted/Reserved Fund
Balances will “roll” into the new LTFM fund balance.
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Fully completed alternative facilities
projects with remaining EXCESS
FUNDS must not be transferred into
the LTFM fund balance.
By June 30, 2016 remaining funds from
completed projects are to be transferred
to the debt service fund if bonds were
issued OR create a levy adjustment if
there was a pay-as-you-go levy.
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Long-Term Facilities Maintenance – FY 2017
Restricted/Reserved Fund Balances
What happens to the Health and Safety
Restricted/Reserved Fund Balance?
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Long-Term Facilities Maintenance – FY 2017
406 – Restricted/Reserved for Health and Safety
The June 30, 2016 ending fund balance in Balance
Sheet Account 406 will continue to have levy
adjustments applied through June 30, 2019. A positive
or negative balance at June 30, 2019 must be
transferred to the General Fund 01 Unassigned Balance
Sheet Account 422.
As of July 1, 2016, no expenditures can be coded to the
“old” Health and Safety codes.
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Long-Term Facilities Maintenance – FY 2017
UFARS Accounting Treatment
Now that you have an approved tenyear plan, how should costs be coded?
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Long-Term Facilities Maintenance – FY 2017
As of July 1, 2015 (FY 2016) continue to use current
UFARS code dimensions for Deferred Maintenance,
Health and Safety, and Alternative Facilities through June
30, 2016.
Authority to spend LTFM revenue begins July 1, 2016
(FY 2017). Any expenditures prior to FY 2017 must take
place under the current laws and can only be for
expenditures eligible under current laws.
Remember, “new” LTFM UFARS codes will not be
available until July 1, 2016.
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New LTFM UFARS Codes - July 1, 2016
(No longer use old law expenditure codes)
• 16 finance codes – 347, 349, 352, 358, 363, 366,
367, 368, 369, 370, 379, 380, 381, 382, 383, 384
• 3 program codes – 865, 866 & 867
• 1 source code for LTFM Aid – 317
• 1 balance sheet restricted/reserve for LTFM – 467
LTFM project expenditures belong in Fund 06 if
bonds are issued or if a single project at a site
costs $2,000,000 or more (only bonded projects and
major capital projects belong in Fund 06)
All other LTFM project expenditures are in Fund 01
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123B.595 Long Term Facilities Maintenance Revenue
Restrictions - revenue may not be used for:
1) Construction of new facilities, remodeling of existing
facilities, purchase portable classrooms.
Note: Deferred capital and maintenance is more restrictive than remodeling
2) Finance lease purchase, installment purchase or
other deferred payments agreement.
3) Energy efficiency projects under 123B.65, post
secondary instruction or administration, or a purpose
unrelated to elementary and secondary education.
4) Violence prevention and facility security, ergonomics
or emergency communication devices.
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4/14/2016
Long-Term Facilities Maintenance – FY 2017
LTFM Questions:
Allowed uses of revenue, process and timelines, expenditure
projection spreadsheet, health and safety revenue application, health
and safety data base, health and safety FY 2016 closeout: contact
Dale Sundstrom at [email protected]
or (651)582-8605.
Revenue projection spreadsheet, FY 2016 health and safety levy
adjustments, LTFM aid entitlement and levy calculations, LTFM
required debt: contact Lonn Moe at [email protected] or (651)
582-8569.
UFARS account coding questions and FY 2016 Fund Balance closeout:
contact Deb Meier at [email protected] or (651)582-8656 or
Sarah Miller at [email protected] or (651)582-8370.
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