Category 2 Further Explanation for FY2020 and FY2021

Hello Everyone, 

Below is a detailed list of the new FCC Category 2 Order explanation that I hope helps with your planning for FY2020 and what is to come for FY2021. I know there is a lot here, but these are important details for planning purposes and the effective use of each budget dollars. Try to take advantage of the additional funding for FY2020. 

Please contact me if there are ANY questions with this information. 

Happy Filing! 

This Order is a Win for All!

• Made the C2 Budget Program permanent in FY2021 forward
• Created 5-year standardized budget cycle schedule starting in FY2021
• FY2021 – FY2025
• FY2026 – FY2030
• FY2031 – FY2035 (and so on…)


• Created specific guidelines to govern FY2020 for “transition year”

FY2020 C2 “Transition Year”

• Extends the initial 5-year test period by 1 year for all applicants
• Even if you began using your C2 funding in FY2015
• Any unused funds remaining from the first 5 years can be used plus
• 20% prorated additional funds made available for FY2020 –this year only
• The budgets will be zeroed out and reset in FY2021
• Funds from first cycle cannot be carried forward into FY2021
• Schools still use per student multiplier for each building at the prorated amount
• $195.63/student PRE-discount
• Libraries still use square foot multiplier for each building
• $6.52/sq. ft for libraries w/IMLS locale codes 11, 12, 21
• $2.99/sq. ft for all other libraries
• Minimum floor amount per school/library = $11,998.43
• Numbers reflects inflation adjustment + 20% prorated amount
• Remember – You must then deduct the PRE-discount amount of approved funding through FY2019 to arrive at available FY2020 C2 PRE-discount funds
• Calculate budgets by school/library building
• Cannot commingle building budgets
• Equipment/service must be installed in the building whose budget “pays” for the purchase
• NIFs not eligible for their own C2 budgets but may house shared network equipment
• Shared equipment must be allocated reasonably among budgets of buildings using the equipment
• Part-time students may be counted in addition to full time students to claim maximum daily enrollment of school
• Eligible services are same as FY2019 but additional clarifications may be forthcoming regarding licenses/support and maintenance
• Maintenance and MIBS are permanently eligible

FY2021 C2 Budget Calculation Overview

• All budgets will be zeroed out and reset for the next 5-year period FY2021 – FY2025
• The new multipliers will be LOWER than FY2020 and set to a per student = $167.00
• Library per square = $4.50 for all libraries
• Incorporates 2.1% inflation adjustment, but eliminates 20% prorated additive from FY 2020
• Minimum building amount increased to $25,000
• Same multipliers in effect for all 5 years
• Based on historical inflation rates and will be adjusted at beginning at each new 5-year budget cycle
• Steady C2 enrollments at the option of the applicant
• Validated first year of applying for C2 funding or in any year the numbers change
• May update numbers to take advantage of increases in enrollment or square footage
• BUT, Enrollment and NSLP numbers still must be updated annually to compute discount percentage
• Overall result is improved predictability and manageability of C2 budgets
• Budgets will be administered and managed by applicants at the district-wide or library system-wide level
• No longer required to “match” equipment costs to each individual school’s or library’s budgets
• No longer required to allocate costs of shared equipment among buildings using equipment
• No longer required to report equipment transfers to USAC using Form 500
• Still must maintain 10-year asset register
• Must document in your records any transfers including the associated reason within 3 years of the date of purchase
• Each building has an increased budget floor of $25,000
• Schools with 149 or fewer students benefit
• Libraries with 5,555 square feet or less benefit
• All District and Library Systems (large and small) receive benefit of minimum budgets

C2 Budget Calculations Applicant w/11+ Buildings

• Districts – 2 options
• Calculate total number of enrolled students x $167
• Calculate # schools x $25,000
• Use larger of the 2 numbers for your budget
• Library Systems – 2 options
• Calculate total square footage x $4.50 or
• Calculate # libraries x $25,000
• Use larger of the 2 numbers for your budget

 

C2 Budget Calculations Applicant w/10 or Less Buildings

• Districts – 3 options
• Calculate total number of enrolled students x $167
• Calculate # schools x $25,000
• Hybrid - Calculate by school and use higher amount
• Use larger of the 2 numbers for each building in your budget
• Library Systems – 3 options
• Calculate total square footage x $4.50 or
• Calculate # libraries x $25,000
• Hybrid - Calculate by library and use higher amount
• Use larger of the 2 numbers for each building in your budget

Rules That Remain the Same

• No changes to eligible services but some clarifications may be forthcoming
• Non-instructional facilities (NIFs) continue to be ineligible for C2 funding
• Must deduct proportional cost of NIFs’ use of any shared equipment
• I don’t think there will be any Form 471 changes for FY2020, but form will be updated for FY2021
• No changes to discount matrix
• No changes to expanded funding year to purchase and install equipment
• FY2020 = April 1, 2020 – September 30, 2021
• But BEARs/SPIs must wait to be submitted until July 1, 2020