ADMINISTRATIVE

Information was provided to you in Regulatory Supts. Memo. 
1, dated March 3, 1999, that summarized the final 1998-2000 
budget adopted by the 1999 General Assembly.  In his review 
of the adopted budget, Governor Gilmore made no amendments 
or vetoes of budget items related to public education, 
enacting this section of the budget as adopted by the 
General Assembly.  At the reconvened session on April 7, 
1999, the General Assembly made no further changes to the 
1998-2000 budget related to public education.  Accordingly, 
the information in Regulatory Supts. Memo. 1, including 
attachments A - D, represents the final action on the 1998-
2000 budget related to the 1999 General Assembly Session.


The following sections provide additional information on 
several budget and legislative items enacted during the 
1999 General Assembly.


Certification to Receive Lottery Funds in Fiscal Year 1999

The 1999 General Assembly passed legislation that 
distributes lottery funds to school divisions in fiscal 
year 1999 and fiscal year 2000.  In order to receive these 
funds, local governing bodies must:


1. Match the state lottery funds with a local share based 
on the composite index of $198.80 per pupil in 
adjusted average daily membership (ADM) and also for 
any hold harmless funding they may be eligible to 
receive;

2. Appropriate the state lottery funds solely for 
educational purposes with no less than 50 percent 
appropriated for non-recurring expenses as described 
in Regulatory Supts. Memo. 1, dated March 3, 1999; 
and,

3. Maintain the same level of local support for public 
education operating expenditures as provided in fiscal 
year 1996.


Another requirement passed by the 1999 General Assembly is 
that unexpended lottery funds from fiscal year 1999 shall 
be carried over by the locality to be appropriated to the 
school division in fiscal year 2000.


In order to receive these funds for fiscal year 1999, 
school divisions must certify to the Department of 
Education that the conditions 1 through 3 indicated above 
have been met.  Attachment A is a certification form that 
must be signed by the division superintendent in order to 
receive these funds.  A certification will be required for 
receipt of state funds for each fiscal year. 


The certification form may be faxed to Mrs. June Eanes, 
Budget Director, at (804) 225-2300.  Upon receipt of this 
certification, it is anticipated that all state lottery 
funding will be transmitted to divisions on the last May 
1999 EDI payment.


Reduced VRS Employer Retirement Rate for Fiscal Year 2000

The Board of Trustees of the Virginia Retirement System 
(VRS) recently approved for fiscal year 2000 a 0.48 percent 
reduction in the employer contribution rate to be paid by 
local school divisions on professional VRS positions.  This 
reduction reflects the elimination of the three percent 
benefit adjustment (Harper Settlement) by the 1998 General 
Assembly.  The 1999 General Assembly authorized the VRS 
Board of Trustees to make this reduction.  The revised 
employer contribution rate for fiscal year 2000 will be 
9.04 percent of covered payroll.  School divisions will 
receive a memorandum from VRS confirming this reduced rate 
for fiscal year 2000.


Funding for Administrative and Student Information 
Management Software 

Funding was appropriated by the 1999 General Assembly to 
assist school divisions in updating administrative and 
student information management software.  Additional 
information from the Department of Education will be 
provided to you by May 1, 1999, regarding program 
eligibility and reimbursement requirements.


Opinion of Bond Counsel Required to Receive Literary Fund 
Proceeds

Please be aware that Section 22.1-157 of the Code of 
Virginia relating to Literary Fund loan requirements was 
amended (HB 2379/SB 779) as follows:  "The Board shall not 
disburse any proceeds of any approved loan prior to its 
receipt of an acceptable opinion of bond counsel obtained 
by the local governing body as to the validity of the loan 
and the status under federal income tax laws of the 
interest on such loan." 


If you have questions concerning any items related to the 
1998-2000 budget, please contact Mr. Daniel S. Timberlake, 
Assistant Superintendent for Finance, Mrs. June Eanes, 
Budget Director, or Mr. Kent Dickey, Assistant Budget 
Director, at (804) 225-2025.

PDS:je

Attachment:     A hard copy of this memo and its attach-
                ment will be sent to the superintendent's
                office.

 
                                                                                Attachment A


Certification for State Lottery Funding for Fiscal Year 1999


Division _______________________________________


        I hereby certify that:

1. state lottery funds will be matched with a local share 
based on the composite index of $198.80 per pupil in 
adjusted average daily membership (ADM) as well as any hold 
harmless funding to be received;

2. the division will maintain the same level of local support 
for operating expenditures in fiscal year 1999 as provided 
in fiscal year 1996; 

3. state lottery funds will be appropriated for public 
education purposes with no less than 50 percent 
appropriated for non-recurring expenses as described in 
Regulatory Supts. Memo. 1, dated March 3, 1999; and,

4. any unexpended lottery funds from fiscal year 1999 will be 
carried over by the locality to be appropriated to the 
school division in fiscal year 2000.







____________________________       _____________________
Superintendent's Signature                      Date


Please return this form to:     Mrs. June Eanes
                                Budget Director
                                Department of Education
                                P. O. Box 2120
                                Richmond, VA  23218-2120
                                FAX:  (804) 225-2300