ADE Director's Communication Memo Form


Memo Number : COM-06-096

Date Created : 05/30/2006

Attention:

Superintendents
Co-op Directors
other: District Business/Financial Officers

Type of Memo: Informational
Response Required: No
   
Section:   APSCN - Bill Goff, Director
Subject:
9% Maintenance Expenditure Requirement

Regulatory Authority:
Ark. Code Ann. sections 6-21-801, 6-21-803, & 6-20-2305 (as amended by Act 19 of the 1st Extraordinary Session of 2006)

Contact Person:
Kathleen Crain

Phone Number:
501-682-4887

E-mail:
kcrain@arkedu.k12.ar.us

Act 19 of the 1st Extraordinary Session of 2006 made revisions to Ark. Code Ann. section 6-21-801(d)(1), concerning the annual expenditure requirement for utilities and facilities maintenance. School districts must now dedicate nine percent (9%) of foundation funding exclusively to payment of utilities and costs of custodial, maintenance, repair, and renovation activities, which include related personnel costs, for public school facilities. Previously the nine percent (9%) pertained only to 'academic facilities.'

The following definitions are included in Ark. Code Ann. section 6-21-803 (as amended by Act 19):

Public School Facility - Any public school building or space, including related areas such as the physical plant and grounds, that is used for any pupose, including, without limitation:
(A) An extracurricular activity;
(B) An organized physical activity course as defined in Ark. Code Ann. section 6-16-137;
(C) Prekindergarten education;
(D) District administration; or
(E) Delivery of instruction to public school students that is an
integral part of an adequate education as described in Ark.Code Ann. section 6-20-2302

Custodial Activities - Routine and renovation cleaning activities related to the daily operations and upkeep of a public school facility, including related supervisory and management activities.

Maintenance, Repair and Renovation - Any activity or improvement to a public school facility that:
(A) Maintains, conserves, or protects the state of condition or
efficiency of the public school facility; or
(B) Brings the state of condition or efficiency of the public
school facility up to the facility's original condition of
completeness or efficiency.

The expenditure requirement, as shown on the attached spreadsheet, is based on nine percent (9%) of foundation funding. Act 19 of the 1st Extraordinary Session of 2006 also made changes to Ark. Code Ann. section 6-20-2305(a), concerning foundation funding. For 2005-2006, foundation funding is equal to $5,486 plus $42 ($5,528) to pay for the increased cost school districts incurred due to the Arkansas Teacher Retirement System employer's rate increase from 13% to 14%. Therefore, a school district's maintenance and utilities expenditure requirement for 2005-2006 will be equal to $5,528 times 9% times the 2004-2005 3QTR ADM.

For 2006-2007, Foundation Funding will increase to $5,662 ($5,620 + $42).

School districts should code expenditures eligible to meet the 9% requirement as follows: Fund = 2, Function = 2600 through 2699, Objects 61000 through 65199 and 65300 through 69999. This will include all Operating Fund expenditures charged to Operating and Maintenance of Plant Services, except for 'Insurance Other than Employee Benefits.'

If any amount of the dedicated nine percent (9%) is unspent at the end of the school district's fiscal year, the funds shall carry over, and the school district must transfer the remaining amount into a public school facilities escrow account. Source of Funds code 391 shall be used for this escrow account. The funds in escrow may be used in any fiscal year for payment of utilities, and costs of custodial, maintenance, repair, and renovation activities, which include related personnel costs, for public school facilities.

If a school district wants to use funds from its public school facilities escrow account for new construction, the school district shall apply to the Division of Public School Academic Facilities and Transportation for approval.


Attachments:

Back to the Customer List

Copyright 1997 Arkansas Department of Education. All rights reserved.
Department of Education Home Page