15-910

15-910. School district budgets; excess utility
costs; desegregation costs; tuition costs for bond issues; costs
for registering warrants; report

(Caution: 1998 Prop. 105 may apply)

A. The governing board may budget for the district's excess utility costs which are
specifically exempt from the district's revenue control limit. If approved by the
qualified electors voting at a statewide general election, the exemption from the revenue
control limit under this subsection expires at the end of the 2008-2009 budget year. The
uniform system of financial records shall specify expenditure items allowable as excess
utility costs, which are limited to direct operational costs of heating, cooling, water
and electricity, telephone communications and sanitation fees. The department of
education and the auditor general shall include in the maintenance and operation section
of the budget format, as provided in section 15-903, a separate line for utility
expenditures and a special excess utility cost category. The special excess utility cost
category shall contain budgeted expenditures for excess utility costs, determined as
follows:

1. Determine the lesser of the total budgeted or total actual utility expenditures
for fiscal year 1984-1985.

2. Multiply the amount in paragraph 1 of this subsection by the total percentage
increase or decrease in the revenue control limit and the capital outlay revenue limit
for the budget year over the revenue control limit and the capital outlay revenue limit
for fiscal year 1984-1985 excluding monies available from a career ladder program or a
teacher compensation program provided for in section 15-952.

3. The sum of the amounts in paragraphs 1 and 2 of this subsection is the amount
budgeted in the utility expenditure line.

4. Additional expenditures for utilities are budgeted in the excess utility cost
category.

B. The governing board shall apply the same percentage increase or decrease allowed
in the revenue control limit and the capital outlay revenue limit as provided in section
15-905, subsection E or section 15-948 to the utility expenditure line of the budget.

C. The governing board may expend from the excess utility cost category only after
it has expended for utility purposes the full amount budgeted in the utility expenditure
line of the budget.

D. The governing board, after notice is given and a public meeting is held as
provided in section 15-905, subsection D, may revise at any time before May 15 the amount
budgeted in the excess utility cost category for the current year. Not later than May 18,
the budget as revised shall be submitted electronically to the superintendent of public
instruction.

E. If the revised excess utility cost category results in an expenditure of monies
in excess of school district revenues for the current year, the county school
superintendent shall include within the revenue estimate for the budget year monies
necessary to meet the liabilities incurred by the school district in the current year in
excess of revenues received for the current year.

F. If a school district receives a refund of utility expenditures or a rebate on
energy saving devices or services, the refund or rebate shall be applied against utility
expenditures for the current year as a reduction of the expenditures, except that the
reduction of expenditures shall not exceed the amount of actual utility expenditures.

G. The governing board may budget for expenses of complying with or continuing to
implement activities which were required or permitted by a court order of desegregation
or administrative agreement with the United States department of education office for
civil rights directed toward remediating alleged or proven racial discrimination which
are specifically exempt in whole or in part from the revenue control limit and the
capital outlay revenue limit. This exemption applies only to expenses incurred for
activities which are begun before the termination of the court order or administrative
agreement. If a district is levying a primary property tax on February 23, 2006 and using
those monies to administer an English language learner program to remedy alleged or
proven discrimination under title VI of the civil rights act of 1964 (42 United States
Code section 2000d), the district may spend those monies to remedy a violation of the
equal education act of 1974 (20 United States Code section 1703(f)). Nothing in this
subsection allows a school district to levy a primary property tax for violations of the
equal education act of 1974 (20 United States Code section 1703(f)) in the absence of an
alleged or proven discrimination under title VI of the civil rights act of 1964 (42
United States Code section 2000d).

H. If a governing board chooses to budget monies outside of the revenue control
limit as provided in subsection G of this section, the governing board may do one of the
following:

1. Use monies from the maintenance and operation fund equal to any excess
desegregation or compliance expenses beyond the revenue control limit before June 30 of
the current year.

2. Notify the county school superintendent to include the cost of the excess
expenses in the county school superintendent's estimate of the additional amount needed
for the school district from the primary property tax as provided in section 15-991.

3. Employ the provisions of both paragraphs 1 and 2 of this subsection, provided
that the total amount transferred and included in the amount needed from property taxes
does not exceed the total amount budgeted as prescribed in subsection J, paragraph 1 of
this section.

I. Through fiscal year 2003-2004, the maximum amount which a governing board may
budget outside of the capital outlay revenue limit as provided in subsection G of this
section is twelve per cent of the maintenance and operation desegregation budget as
provided in subsection J of this section or the amount that it budgeted pursuant to this
subsection for fiscal year 2001-2002, whichever is less. If a governing board chooses to
budget monies outside of the capital outlay revenue limit as provided in subsection G of
this section, the governing board may notify the county school superintendent to include
the cost of the excess expenses in the county school superintendent's estimate of the
additional amount needed for the school district from the primary property tax as
provided in section 15-991.

J. A governing board using subsections G, H and I of this section:

1. Shall prepare and employ a separate maintenance and operation desegregation
budget and capital outlay desegregation budget on a form prescribed by the superintendent
of public instruction in conjunction with the auditor general. The budget format shall be
designed to allow a school district to plan and provide in detail for expenditures to be
incurred solely as a result of compliance with or continuing to implement activities
which were required or permitted by a court order of desegregation or administrative
agreement with the United States department of education office for civil rights directed
toward remediating alleged or proven racial discrimination.

2. Shall prepare as a part of the annual financial report a detailed report of
expenditures incurred solely as a result of compliance with or continuing to implement
activities which were required or permitted by a court order of desegregation or
administrative agreement with the United States department of education office for civil
rights directed toward remediating alleged or proven racial discrimination, in a format
prescribed by the auditor general in conjunction with the Arizona department of education
as provided by section 15-904.

3. On or before July 15, 2006 and each year thereafter, shall collect and report
data regarding activities related to a court order of desegregation or an administrative
agreement with the United States department of education office for civil rights directed
toward remediating alleged or proven racial discrimination in a format prescribed by the
Arizona department of education. The department shall compile and submit copies of the
reports to the governor, the president of the senate, the speaker of the house of
representatives and the chairpersons of the education committees of the senate and the
house of representatives. A school district that becomes subject to a new court order of
desegregation or a party to an administrative agreement with the United States department
of education office for civil rights directed toward remediating alleged or proven racial
discrimination shall submit these reports on or before July 15 or within ninety days of
the date of the court order or administrative agreement, whichever occurs first. The
Arizona department of education, in consultation with the auditor general, shall develop
reporting requirements to ensure that school districts submit at least the following
information and documentation to the Arizona department of education beginning in fiscal
year 2006-2007:

(a) A district-wide budget summary and a budget summary on a school by school basis
for each school in the school district that lists the sources and uses of monies that are
designated for desegregation purposes.

(b) A detailed list of desegregation activities on a district-wide basis and on a
school by school basis for each school in the school district.

(c) The date that the school district was determined to be out of compliance with
title VI of the civil rights act of 1964 (42 United States Code section 2000d) and the
basis for that determination.

(d) The initial date that the school district began to levy property taxes to
provide funding for desegregation expenses and any dates that these property tax levies
were increased.

(e) If applicable, a current and accurate description of all magnet type programs
that are in operation pursuant to the court order during the current school year on a
district-wide basis and on a school by school basis. This information shall contain the
eligibility and attendance criteria of each magnet type program, the capacity of each
magnet type program, the ethnic composition goals of each magnet type program, the actual
attending ethnic composition of each magnet type program and the specific activities
offered in each magnet type program.

(f) The number of pupils who participate in desegregation activities on a
district-wide basis and on a school by school basis for each school in the school
district.

(g) A detailed summary of the academic achievement of pupils on a district-wide
basis and on a school by school basis for each school in the school district.

(h) The number of employees, including teachers and administrative personnel, on a
district-wide basis and on a school by school basis for each school in the school
district that is necessary to conduct desegregation activities.

(i) The number of employees, including teachers and administrative personnel, on a
district-wide basis and on a school by school basis for each school in the school
district and the number of employees at school district administrative offices that are
funded in whole or in part with desegregation monies received pursuant to this section.

(j) The amount of monies that is not derived through a primary or secondary
property tax levy and that is budgeted and spent on desegregation activities on a
district-wide basis and on a school by school basis for each school in the school
district.

(k) Verification that the desegregation funding will supplement and not supplant
funding for other academic and extracurricular activities.

(l) Verification that the desegregation funding is educationally justifiable.

(m) Any documentation that supports the proposition that the requested
desegregation funding is intended to result in equal education opportunities for all
pupils in the school district.

(n) Verification that the desegregation funding will be used to promote systemic
and organizational changes within the school district.

(o) Verification that the desegregation funding will be used in accordance with the
academic standards adopted by the state board of education pursuant to sections 15-701
and 15-701.01.

(p) Verification that the desegregation funding will be used to accomplish specific
actions to remediate proven discrimination pursuant to title VI of the civil rights act
of 1964 (42 United States Code section 2000d) as specified in the court order or
administrative agreement.

(q) An evaluation by the school district of the effectiveness of the school
district's desegregation measures.

(r) An estimate of when the school district will be in compliance with the court
order or administrative agreement and a detailed account of the steps that the school
district will take to achieve compliance.

(s) Any other information that the department of education deems necessary to carry
out the purposes of this paragraph.

K. If a school district governing board budgets for expenses of complying with a
court order of desegregation or an administrative agreement with the United States
department of education office for civil rights directed toward remediating alleged or
proven racial discrimination, the governing board shall ensure that the desegregation
expenses will:

1. Be educationally justifiable.

2. Result in equal education opportunities for all pupils in the school district.

3. Be used to promote systemic and organizational changes within the school
district.

4. Be used in accordance with the academic standards adopted by the state board of
education pursuant to sections 15-701 and 15-701.01.

5. Be used to accomplish specific actions to remediate proven discrimination
pursuant to title VI of the civil rights act of 1964 (42 United States Code section
2000d) as specified in the court order or administrative agreement.

6. Be used in accordance with a plan submitted to the department of education that
includes an estimate of the amount of monies that will be required to bring the school
district into compliance with the court order or administrative agreement and an estimate
of when the school district will be in compliance with the court order or administrative
agreement.

7. Beginning in fiscal year 2009-2010 and continuing each fiscal year thereafter,
not exceed the amount budgeted by the school district for desegregation expenses in
fiscal year 2008-2009.

L. The governing board may budget for the bond issues portion of the cost of
tuition charged the district as provided in section 15-824 for the pupils attending
school in another school district, except that if the district is a common school
district not within a high school district, the district may only include that part of
tuition which is excluded from the revenue control limit and district support level as
provided in section 15-951. The bond issues portion of the cost of tuition charged is
specifically exempt from the revenue control limit of the school district of residence,
and the primary property tax rate set to fund this amount shall not be included in the
computation of additional state aid for education as provided in section 15-972, except
as provided in section 15-972, subsection E. The department of education and the auditor
general shall include in the maintenance and operation section of the budget format, as
provided in section 15-903, a separate category for the bond issues portion of the cost
of tuition.

M. The governing board may budget for interest expenses it incurred for registering
warrants drawn against a fund of the school district or net interest expense on tax
anticipation notes as prescribed in section 35-465.05, subsection C for the fiscal year
preceding the current year if the county treasurer pooled all school district monies for
investment as provided in section 15-996 for the fiscal year preceding the current year
and, in those school districts that receive state aid, the school districts applied for
an apportionment of state aid before the date set for the apportionment as provided in
section 15-973 for the fiscal year preceding the current year. The governing board may
budget an amount for interest expenses for registering warrants or issuing tax
anticipation notes equal to or less than the amount of the warrant interest expense or
net interest expense on tax anticipation notes as prescribed in section 35-465.05,
subsection C for the fiscal year preceding the current year as provided in this
subsection which is specifically exempt from the revenue control limit. For the purposes
of this subsection, "state aid" means state aid as determined in sections 15-971 and
15-972.