(A)
As used in this rule, "capital improvements and maintenance" means the
acquisition, replacement, enhancement, maintenance or repair of permanent
improvements as those terms are defined in this rule.
(1) "Permanent improvement" means a permanent
improvement as defined under division (E) of section
5705.01 of the Revised
Code.
(2) "Acquisition" means
addition of or assuming possession of an asset.
(3) "Replacement" means the substitution of
one asset for another of substantially similar value or quality.
(4) "Enhancement" means the modification of
an existing asset that increases its value, quality or life
expectancy.
(5) "Maintenance or
repair" means the act of keeping a permanent improvement in normal working
condition. "Maintenance or repair" includes preventative maintenance, periodic
repairs and replacement of parts, structural components and other activities
needed to maintain the asset but does not include routine janitorial and
utility costs. Any non-routine janitorial cost shall be substantiated through a
work order.
(B) In each
fiscal year, except as provided in division (D) of section
3315.18 of the Revised Code, the
school district shall set aside for capital improvements and maintenance, the
amount required by division (A) of section
3315.18 of the Revised Code
according to the schedule set forth in rule 117-6-03
of the Administrative Code unless the board of education elects, by
board resolution, to set aside funds for capital improvements and maintenance
in accordance with section
3315.19 of the Revised Code.
The required set aside may be reduced in any fiscal year by any
amount received during the same fiscal year from a permanent improvement levy
as authorized under section
5705.21 of the Revised
Code.
(C) If the board of
education elects to set aside funds in accordance with section
3315.19 of the Revised Code, the
amount of the set aside shall equal three per cent of all revenues received by
the district for operating expenses for the prior fiscal year.
For a city, local or exempted village school district, "all
revenues received by the district for operating expenses" means the school
district's general fund revenue in the prior fiscal year from property taxes as
provided for in Chapter 5705. of the Revised Code plus income taxes as provided
in Chapter 5748. of the Revised Code after adjusting for payments for students
participating in an open enrollment agreement pursuant to section
3313.98 of the Revised Code,
students attending a community school pursuant to Chapter 3314. of the Revised
Code, or students receiving an educational choice scholarship pursuant to
Chapter 3310. of the Revised Code plus any amount of this revenue that would
have been allocated to the general fund but was allocated to the debt service
fund for payment of tax or revenue anticipation notes.
For a joint vocational school district, "all revenues received
by the district for operating expenses" means the school district's general
fund revenue in the prior fiscal year from property taxes as provided for in
Chapter 5705. of the Revised Code plus income taxes as provided for in Chapter
5748. of the Revised Code plus funds provided to the district pursuant to
division (B) of section
3317.16 of the Revised Code plus
any amount of this revenue that would have been allocated to the general fund
but was allocated to the debt service fund or payment of tax or revenue
anticipation notes.
(D) The
amount set aside for capital improvements and maintenance shall be accounted
for within the school district's general fund using a generally accepted
accounting method. The school district shall appropriate from the amount set
aside for capital improvements and maintenance and maintain appropriate
accounting records for amounts expended. Any unexpended balance shall carry
forward to the subsequent fiscal year. Any unexpected
unexpended
balance carried forward to the subsequent fiscal year does not reduce the
amount of the set aside required by paragraph (B) of this rule. This
requirement to set aside an amount for capital improvements and maintenance
applies only to those school districts as defined in division (A) of section
3315.18 of the Revised
Code.
(E) As part of each school
district's annual financial report, the school district shall prepare a
supplemental schedule pursuant to reporting procedures prescribed by the
auditor of state to demonstrate compliance with this rule. The supplemental
schedule shall include the following:
(1) The
balance of the set aside carried forward from the previous fiscal
year;
(2) The current fiscal year
set aside amount;
(3) Qualifying
expenditures;
(4) The amount of
funding received from a permanent improvement levy as authorized under section
5705.21 of the Revised Code that
may reduce the amount of the set aside.
(5) The balance of the set aside carried
forward to the subsequent fiscal year.
(6)
If a district did
not set aside the funds described in paragraph (B) or (C) of this rule, a
statement indicating the statutory authority on which it
relied.
(F)
Restricted revenue including, but not limited to, funding received from e-tech
Ohio, state aid for bus purchases and specific state and federal grants may not
be used to meet the amount required to be set aside for capital improvements
and maintenance.
(G) Acceptable
costs for acquisitions, replacements and enhancements of permanent improvements
include, but are not limited to: acquisition price; direct materials, labor and
overhead incurred during a qualifying project; professional fees necessary to
complete a qualifying project; site preparation; demolition or removal of any
existing assets; freight and handling; and principal included as part of the
cost of a capital lease. Acquisitions, replacements and enhancements of
permanent improvements does not include debt service on a long-term debt whose
proceeds were used for capital improvements and maintenance.
