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State Budget Imposes New Requirements for School District Community Service Funds
July 22, 2013

By D&K’s School and Higher Education Law Team

Wisconsin school districts are required to comply with new levy limits and reporting requirements for school district community service funds (Fund 80) under the 2013-15 State Budget.

State law authorizes school boards to establish community program service funds and provides that school districts can “[e]stablish and maintain community education, training, recreational, cultural or athletic programs and services, outside the regular curricular and extra-curricular programs for pupils, under such terms and conditions as the school board prescribes.” The statutes further provide that school boards may establish and collect fees to cover all or part of the costs of such programs and services.

State statutes have historically treated school district community service funds as exempt from general revenue limits, stating that the costs associated with such programs and services “shall not be included” in school districts’ shared costs under related revenue limit statutes. It is this less regulated aspect of these funds that came under legislative scrutiny as part of the State Budget, resulting in a series of new requirements concerning community service funds that include the following:

  1. A school district may not levy more for community service funds than was levied in the most recent year preceding 2013, in which community service funds were raised, unless a referendum approves exceeding this limit. If a school district chooses to hold a referendum, the Department of Public Instruction (“DPI”) will also require that school districts report the referendum date, the resolution, and the outcome of the referendum.

  2. School districts are required to include Fund 80 expenditure information in their budget summaries for levies that will be established in the fall of 2013 and 2014, for the 2013-14 and 2014-15 school years. For common and union school districts that hold an annual meeting, the budget summary for the accompanying budget hearing must identify Fund 80 expenditures and indicate how those expenditures meet the criteria for community service funds. Unified school districts must provide the same information as part of the written agenda for the school board meeting at which the annual levy is established. School districts also have to report this information to DPI within ten (10) days of the annual meeting or meeting at which the levy is established.

  3. School districts must post this information on the school district website no later than August 30, 2013.

  4. School boards can modify the amount that is levied at a later meeting, e.g., when the levy is finally certified. If the school board chooses to do so, however, the board still must comply with the levy limits for Fund 80 established by the State Budget and comply with the same reporting and publication requirements that covered the original report.

In sum, the State Budget provides for additional scrutiny of school districts’ Fund 80 activities by creating additional reporting requirements and opportunities for public and agency review of Fund 80 expenditures. The State Budget also aligns Fund 80 expenditures with other school finance statutes that also require a referendum if a school district wishes to exceed the revenue limits established by law.

The DPI has assembled a variety of information to assist school districts with Fund 80 issues and is currently working to modify its referendum reporting portal to accommodate this change in state law.

The DPI school finance team’s summary can be found at http://sfs.dpi.wi.gov/community-service-fund-limits-and-reporting-requirements-under-2013-wisconsin-act-20. However, the DPI has advised that it is not able to certify school district’s compliance with these requirements and encourages school districts to check with the school district’s legal counsel on their use of Fund 80, particularly if they plan to exceed the Fund 80 levy limit that has now been established by law.

If you have any questions regarding this article, please contact your Davis & Kuelthau attorney.

 

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