Open Enrollment & Financial Implications

1. Open Enrollment & Financial Implications Jennifer Danfield and Erin Fath Department of Public Instruction WASBO Accounting Conference March 19, 2014

2. Program Overview

3. Inter-District Public School Open Enrollment • Allows parents to apply for their children to attend school in a school district other than the one in which they reside. • Nonresident District – district they want their child to attend • Resident District – district that they live in

4. Who Can Open Enroll? • Any pupil in 5-year-old kindergarten to grade 12. • Prekindergarten, early childhood education, and 4-year-old kindergarten: • Only if child’s resident district offers the same type of program, and • Only if child is eligible for the program in the resident school district.

5. Two Ways to Apply for Open Enrollment • Regular Application Period • Alternative Application Procedure

6. Regular Application vs. Alternative Application • “Regular” application: • Submitted in the February – April application period, • For the following school year. • “Alternative” application: • Submitted from July 1 until the end of the school term, • For the current school year.

7. Regular Application vs. Alternative Application • The alternative procedure is a means by which parents can apply for open enrollment outside the regular application period. • It is not an exception to the nonresident district’s space criteria, which would result in arbitrarily approving applications for some pupils and denying them for others.

8. Regular Application Period • The regular application period is from the 1st Monday in February until the last weekday in April. • February 3 – April 30, 2014 for the 2014-15 school year.

9. Designation of Spaces • At the January board meeting, each board must determine the number of regular education and special education open enrollment spaces within the district. • If the board does not intend to deny pupils due to space, it may make that determination.

10. Designation of Spaces • For special education, the board must establish criteria and determine the number of spaces for each program or service that has a class size or caseload limit. • However, the board must still meet the IEP in its entirety.

11. Records and Estimates • The resident school district must send special education records and expulsion records to the nonresident district by the 1st Friday following the 1st Monday in May (May 9, 2014). • The nonresident district must send an estimate of special education costs by the 3rd Friday following the 1st Monday in May (May 23, 2014). • Only if the district has received an IEP.

12. Records and Estimates • If the nonresident district does not send a cost estimate by the deadline, it may not charge additional costs.

13. Nonresident Approval or Denial Regular Application Period • Applications can only be denied for reasons specified in statute and board policy. • Nonresident districts must notify parents of approval or denial on or before the 1st Friday following the 1st Monday in June (June 6, 2014). • Approvals must include notice of school assignment.

14. Resident Approval or Denial Regular Application Period • Resident district is only required to send notice of denial on or before the 2nd Friday following the 1st Monday in June (June 13, 2014). • If resident district does not send notification, it is assumed that the application is approved.

15. Appeal of Regular Application Denial • Parents may appeal either nonresident or resident district denials to DPI within 30 days after the notice of denial was mailed. • The Department must affirm the school board’s decision unless the Department finds that the decision was arbitrary or unreasonable.

16. Alternative Application Procedure • Allows parents to apply for open enrollment at any time if one of seven criteria are met: • Pupil is victim of a violent crime • Pupil is or has been homeless. • Pupil has moved into the state (within last 30 days). • Pupil’s residence has changed as a result of military orders. • Pupil has been repeatedly bullied or harassed. • Pupil’s residence has changes as a result of a court order or custody agreement. • Pupil, nonresident, and resident district agree the transfer is in the best interests of the pupil.

17. Alternative Application Procedure • Parent submits application to nonresident district: • Must indicate one or more criteria. • Must provide explanation and, if appropriate, supporting documents.

18. Alternative Application Procedure • Nonresident district requests special education and expulsion records from resident district: • Prepares special education cost estimate.

19. Nonresident Approval or Denial Alternative Application • Nonresident district must approve or deny the application within 20 days. • If approved, pupil may attend immediately and must attend within 15 days (nonresident district may extend). • May deny for same reasons it may deny during the regular application period: • Regular & special education space/program/referral, expulsion, habitual truancy

20. Nonresident Approval or Denial Alternative Application • If application is based on “best interests of the pupil”, may deny if application is not in the pupil’s best interests. • No specific right to appeal.

21. “Best Interests” of the Pupil • Initial Assumption • Parent is best judge of the pupil’s best interests. • A nonresident or resident school district may only deny if the district has sufficient reason to overcome the parent’s judgment. • A resident school district must have sufficient reason and evidence to sustain a denial alleging that a transfer is not in the pupil’s best interests.

22. Resident Approval or Denial Alternative Application • May only deny for: • Undue financial burden • Criteria do not apply, i.e. did not move into state within last 30 days, no custody change, etc… • Transfer is not in the pupil’s best interests

23. Resident District Denial Alternative Application • Parent may appeal within 30 days. • If denied due to “undue financial burden”, • DPI must affirm unless it finds the decision was arbitrary or unreasonable.

24. Resident District Denial Alternative Application • If denied due to “transfer not in pupil’s best interest”, • Parent must explain why transfer is in pupil’s best interests. • District must explain why transfer is not in pupil’s best interests. • If DPI determines the district’s denial is not in the pupil’s best interests, must allow the transfer.

25. Open Enrollment Funding

26. Pupil Count for Open Enrolled Pupils Question: How do we count Open Enrolled Pupils? Answer: Follow the money ... Who is paying for the pupil?

27. Pupil Count for Open Enrolled Pupils • The resident district counts the open enrolled pupils (OE-out) for Revenue Limit and General Aid purposes, because the resident district pays for the OE pupils.

28. Pupil Count for Open Enrolled Pupils Within the PI-1563 Pupil Count Report: • Resident district must add its OE-out pupils to the headcount under Step 4, “Resident Additions” (because OE-out pupils are not capture in Step 1, the initial pupil headcount). • Nonresident district includes OE-in pupils in Step 1 (initial head count) and then must remove them from the headcount under Step 2, “Non-Resident Reductions”.

29. Payment for Open Enrolled Pupils • For regular education pupils: • DPI transfers state-set amount from the resident district to the nonresident district in the final state aid payment (3rd Monday in June, e.g., June 16th for 2013-14 year). • The payment is prorated for less than a full school year. • For special education pupils: • Nonresident district charges resident district basic amount plus any actual, additional costs to provide special education. • No average or prorated costs.

30. Amount of State Aid Adjustment • Used to be the prior year statewide average cost/member for: • Regular education • Co-curricular activities • Instructional support services • Pupil services

31. Amount of State Aid Adjustment • 2013 Act 20 changed the method for calculating the open enrollment transfer amount. • For the 2013-14 and 2014-15 school years, the open enrollment transfer amount is $150 more than the prior year and is as follows: • 2012-13: $6,335 (daily rate: $35.19) • 2013-14: $6,485 (daily rate: $36.03) • 2014-15: $6,635 (daily rate: $36.86)

32. Open Enrollment Funding • For each regular education student: • Transfers In - DPI increases district’s final state aid payment • Transfers Out - DPI decreases district’s final state aid payment

33. Open Enrollment Funding OE payments are outside the revenue limit • Net OE gain: • Revenue received is outside the limit … • Additional spending capacity • Net OE loss: • District cannot directly levy for that loss of revenue [the payment to other district(s)] BUT … • Those OE-out pupils were part of the district’s revenue limit membership, upon which the district’s revenue limit (spending authority) was based

34. Funding for Alternative Applications

35. Regular Education Payments Alternative Application • Payments for regular education pupils: • Are equal to the open enrollment transfer amount • Prorated at the daily rate (OE amt/180) • Are paid as an aid adjustment in the same way as current open enrollment is paid

36. Special Education Payments Alternative Applications • Payments for special education pupils are paid the same way as current open enrollment. • The nonresident district bills the resident district for the prorated OE amount plus any actual, additional special education costs.

37. Resident Membership Count Alternative Application • Alternative application pupils may transfer in the middle of the school year. • Therefore, the pupil may or may not have been counted by the resident district in the membership on the 3rd Friday in September.

38. Resident Membership Count Alternative Application • The following pupils may not have been counted in membership: • Pupils who moved from out of state. • Pupils who moved as a result of military orders. • Pupils who have been homeless. • Pupils who were enrolled in private schools or home-based private education programs. • Pupils who were residents of other school districts.

39. Resident Membership Count Alternative Application • Under Act 114, a resident district that was unable to count the pupil in membership may receive a revenue limit exemption in the amount of the aid transfer. • This revenue limit exemption may be taken in the following school year: • It is a non-recurring exemption – the district receives it for just that year, then it comes out of the district’s revenue base for the following year.

40. Resident Membership Count Alternative Application • The amount of the revenue limit exemption, if any, will be calculated by the Department’s open enrollment staff and provided to the school finance team.

41. Revenue Limit Exemption Alternative Application • In our open enrollment database (OPAL), under the Exceptions tab, there is a tab called “Counted by Resident District”. • If the pupil was not counted by the resident district on 3rd Friday, it must be indicated on this tab. • Default is “counted by resident district”.

43. Revenue Limit Exemption Alternative Application • Once this is done, the amount of the revenue limit exemption, if any, will appear in OPAL in the last column on the Exceptions tab or may be viewed on the pupil’s aid calculation page. • If the pupil is listed as SPED, the amount of the exemption will be $0. DPI will calculate this manually and notify the district of the amount.

45. Financial Implications

46. OE Payments Are Outside the Revenue Limit • Unlike general state aid: • Nonresident districts are not required to reduce the property tax levy by the amount of the OE payment. • Can spend it • Resident districts are not permitted to increase the property tax levy by the amount of the OE payment. • Must reduce other spending • The OE payment is more comparable to the revenue limit than to state aid: • It represents $ that is or is not available to spend.

47. OE Payments Are Like Marginal Cost • The OE payment calculation excludes many cost categories such as: • School administration and operations, maintenance, debt service, and transportation. • Thus, the OE payment is less than the total average cost per student. • A district that gains students does not receive its full cost per student. • A district that loses students does not lose its full cost per student.

48. Resident District Simulates Marginal Cost • Does not lose full amount of revenue per member. • Is able to retain a portion to offset fixed costs in the district. Nonresident District Does not receive full amount of revenue per member. Is only required to accept pupils for whom there is space.

49. Assistance

50. Open Enrollment Resources • Website: http://oe.dpi.wi.gov • Open Enrollment List Serv: • Receive information and announcements • Printed information is rarely used. • To sign up, send email to openenrollment@dpi.wi.gov.