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TEA Correspondence

A Microsoft Word version of this letter is available for download and PRINTING.

Chapter 41 Districts
2007-2008 School Year

October 9, 2008

Subject: Near Final Cost of Recapture Report Available for Review

To the Administrator Addressed:

We are writing to request that you review your district's Summary of Finances and Near Final Cost of Recapture Report for the 2007–2008 school year. These reports are available on the Texas Education Agency's School Finance website at http://www.tea.state.tx.us/school.finance/funding/sofweb7.html. If you have questions regarding these reports or you would like an Option 3 recapture payment ledger faxed to you, please contact me at the phone number found at the end of this letter. Please note that a hard copy of this correspondence will not be mailed.  

The “near final” cost of buying weighted average daily attendance (WADA) was based on the following:

  • Chapter 42 WADA: Chapter 42 WADA is the WADA that was computed on the “near final” 2007–08 Summary of Finances that was recently made available on our website and reflects end-of-year attendance as reported through the Public Education Information Management System.
  • Chapter 41 WADA: Chapter 41 WADA is the same as Chapter 42 WADA unless your district charges tuition to educate nonresident students. If it does, the WADA of those transfer students was subtracted from the Chapter 42 WADA to get Chapter 41 WADA.
  • Maintenance and Operations (M&O) Tax Collections: The M&O tax collections were derived from the Tax Collection Survey that was submitted in the summer of 2008. The M&O tax collections amount also appears on the “near final” 2007–08 Summary of Finances.

Except for M&O tax collections, special education full-time equivalents for extended year service, and the New Instructional Facility Allotment allocation, all data items that are used to calculate recapture cost should now be final. As always, the “final” cost will be determined in April 2009, when all data become available.

Option 3 Districts

For districts that exercised Option 3, a section has been added to the Cost of Recapture Report that shows the total amount paid to the agency through August 2008, the “near final” amount owed, and the “near final” balance. Please verify the payments made to date.

If the “near final” balance shown is a negative number (amount in parentheses), your district owes that amount as the “near final” settle-up. Payment is due by October 22, 2008, and should be made electronically using the standard wiring instructions. If the “near final” balance shown is a positive number, your district is due a refund for that amount. The refund will be made in the near future.

Option 4 Districts

If your district exercised Option 4 only, a report that compares the number of WADA purchased to the “near final” number of WADA needed to equalize wealth has also been posted following the Cost of Recapture Report. If the difference shown is a positive number, your district bought more WADA than was necessary. If the difference is a negative number, your district did not purchase enough WADA to sufficiently reduce its wealth, and additional WADA must be purchased.

It is your district’s responsibility to “settle up” with its partner(s). Please make any necessary changes to the WADA purchased number on the comparison printout so that the number of WADA bought matches the number of WADA needed, and submit the changes to us by October 22, 2008. We will then make appropriate changes to the partner’s (or partners') WADA information.

Technology Consortium Districts

If your district exercised Option 3 in combination with the technology consortium form of Option 4, a report that compares the total gain for all partners to the 10 percent limit has also been posted following the Cost of Recapture Report. If the gain for all partners exceeds the limit, your district must reduce the number of WADA being bought from its partners so that the limit is not exceeded. If the gain is less than the limit, your district may purchase additional WADA from its partners, so long as the limit is not exceeded. Please make the changes to the limit comparison report and submit the changed report by October 22, 2008. Appropriate changes will then be made to the partner's (or partners') WADA information.

Please keep in mind that changes made to the number of WADA being purchased through Option 4 will change the amount over- or underpaid through Option 3. If your district does not change the number of WADA being bought through the consortium, you should follow the settle-up instructions in the preceding section for Option 3–only districts.

Option 3 and Option 4 Districts

If your district does not change the number of WADA being bought through Option 4, you should follow the instructions in the preceding section for Option 3–only districts. If your district chooses to buy additional WADA from its partner(s), the number of WADA purchased as shown on the comparison report should be changed accordingly and submitted by October 22, 2008. Because the Cost of Recapture Report assumes that any necessary WADA not purchased under Option 4 will be purchased under Option 3, a change to Option 4 purchases will result in a change to Option 3 cost of recapture.

If you have any questions concerning this “near final” settle-up, please contact me at 512-463-9214.

Sincerely,

Victoria Drewy
Program Director, Chapter 41 Administration

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