Long-Term Facilities Maintenance Planning
Guidelines for Minnesota School Districts
By Jodie Zesbaugh
Senior Municipal Advisor
“You work for a school district; you must have the summer off!” Certainly, this is not the case for school district officials completing their 10-year Long-Term Facilities Maintenance (LTFM) plan.
The Minnesota Department of Education (MDE) requires four key pieces of information as part of your School Board’s approval of the annual LTFM program in order to qualify for LTFM revenue in the following year. They are:
- 10-year expenditure plan
- 10-year revenue plan
- Statement of Assurances
- Board Approval
10-Year Expenditure Plan
As you prepare the expenditure plan information, there are a number of things to consider:
- It must be submitted in Microsoft Excel format, not PDF.
- Additional narrative is required if your district is planning for any “over and above” projects which include:
- Asbestos removal, fire safety or indoor air quality over $100,000 per site/per site/per fiscal year;
- Remodeling costs associated with an approved voluntary prekindergarten (VPK) program; and/or
- Deferred maintenance projects exceed $2,000,000 per project/per site/per fiscal year.
- You must continue to update the MDE Health & Safety Data Submission System.
Also know that even though you’re submitting 10 years’ worth of projects, the MDE will examine the upcoming fiscal year most closely, and the remaining years will be modified in future submissions. The LTFM expenditure plans you submit this summer will include updates for FY 2023-2024 estimates but will focus primarily on FY 2025.
10-Year Revenue Plan
The revenue portion of the LTFM plan represents your district’s plan to fund proposed expenditures. Unless you’re going to issue bonds or include a levy for a qualifying health and safety project, this portion is pretty straightforward. That said, it’s important to remember the following:
- Ensure your pupil units are the most current, as this will affect your total revenue.
- If your average building age is 35 years or less, your revenue will be prorated.
- If you are in the midst of building additions or building closures, your average building age will be affected.
- The building age calculation generally lags so if you know you have an upcoming change, think about that timing. In doing so, you may be able to avoid a future adjustment.
Statement of Assurances
The Statement of Assurances is a downloadable document from the MDE website specific to LTFM and the fiscal year currently under review. This must be signed by your superintendent, and by doing so, that individual is making a commitment that your district will operate the LTFM program according to applicable state and federal laws.
School Board Approval
Your School Board may approve the district’s LTFM using one of the following three options:
- Formal resolution
- Adopted minutes signed by the School Board Clerk – or –
- Notarized extract of minutes
Approval can be achieved in a single meeting if your district chooses either the resolution or notarized extract options.
For larger projects, you may not have a significant balance saved up to complete them. In this case, it may be appropriate to issue bonds against your per pupil revenue or to pay for any “over and above” costs. If you plan to issue or have issued bonds, consider these tips:
- For projects financed by bond proceeds, you must include those project costs in the expenditure plan, but you do not include bond principal and interest payments.
- Your district’s submission materials must also include the description of projects financed with the bond issue, the bond schedule showing estimated principal and interest payments, annual debt services levies, and a separate breakdown for health and safety projects costing $100,000 or more if accessing revenue above the per pupil formula amount.
The School Building Bond Agricultural Credit is beneficial when planning to complete deferred maintenance projects. The $380 per pupil revenue (prorated down if your building age is under 35 years) has a levy and aid component. The aid is a function of the tax base per pupil, modified if you have agricultural property in your district and the average statewide tax capacity per pupil. If you qualify for aid, your levy will be reduced. If a portion of your levy is used to make bond payments, then it also qualifies for the School Building Bond Agricultural Credit. However, you should not overleverage your annual revenue by committing too much per pupil revenue to bond payments. Annual expenditures will still arise and prior to issuing bonds, it’s a helpful exercise to determine approximately how much of your per pupil revenue you’re spending each year.
Cooperatives, education districts and intermediate districts are also allowed to submit 10-year plans to the MDE Commissioner for approval of the buildings owned by the cooperative. The revenue for these expenditures comes from their member districts. As a member district, you may be asked to approve their 10-year plan and levy for the allocated costs. In these instances, the allocated amounts are not limited by pupil count or building age.
Have questions or need assistance with LTFM plan preparation? We’re here to help! Please contact Ehlers’ Minnesota School Finance team at firstname.lastname@example.org
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