DCF 52.65(2)(b)(b) For proprietary residential care centers, profit allowed on an annual basis is the smaller amount determined under the following 2 methods of calculating profit: DCF 52.65(2)(b)1.1. The equity method is the sum of 7.5 percent of allowable operating costs plus 15 percent of average net equity for the year. In this subdivision, “average net equity” means the average cost of equipment, buildings, land, and fixed equipment minus the average accumulated depreciation and average long term liabilities for the year. DCF 52.65(2)(b)2.2. The expenses method is 10 percent of allowable operating costs for the year. DCF 52.65 NoteNote: Further explanation is available in the department’s Allowable Cost Policy Manual, which is available in the Partner Resources/Grants and Contract Administration section of the department’s website at http://dcf.wisconsin.gov. DCF 52.65 HistoryHistory: EmR1106: emerg. cr., eff. 9-16-11; CR 11-026: cr. Register December 2011 No. 672, eff. 1-1-12; CR 20-003: am. (1), (2) (a) Register July 2020 No. 775, eff. 8-1-20. DCF 52.66(1)(1) Cost and service information. Each year no later than July 1, a licensee shall submit the following information to the department: DCF 52.66(1)(a)(a) A cost and service report in which the licensee reports the residential care center’s costs, types of services provided, and number of children served in the previous year. The report shall be submitted on a department-prescribed form. DCF 52.66(2)(2) Maximum allowable rate. Each year no later than September 1, the department shall notify licensees of the per client rate that no residential care center may exceed for services provided in the following calendar year. DCF 52.66(3)(a)(a) Each year no later than October 1, a licensee shall submit to the department a proposed rate for the following calendar year for each residential care center program that the licensee operates. The licensee shall submit the proposed rate on a department-prescribed form. DCF 52.66(3)(b)(b) A licensee may request an exception to the department’s maximum rate under sub. (2) if the licensee provides a specialized service or specialized programming to a specific population of children. The exception request shall explain the benefits of the service or programming and why the licensee cannot provide the service or programming within the maximum rate. The exception request shall be made on the rate request form. DCF 52.66(4)(4) Review of a proposed rate. In reviewing a proposed rate submitted by a licensee under sub. (3), the department shall consider all of the following: DCF 52.66(4)(a)(a) Whether the proposed rate exceeds the maximum rate determined by the department under sub. (2). DCF 52.66(4)(d)(d) Whether the residential care center’s reported costs are within a range of similar costs reported by other residential care centers for similar items and services. DCF 52.66(4)(e)(e) The residential care center’s per client rate in previous years. DCF 52.66(4)(f)(f) Changes in the consumer price index for all urban consumers, U.S. city average, as determined by the U.S. department of labor, for the 12 months ending on June 30 of the year in which the proposed rate is submitted. DCF 52.66(4)(g)(g) Changes in the consumer price index for all urban consumers, U.S. city average, for the medical care group, as determined by the U.S. department of labor, for the 12 months ending on June 30 of the year in which the proposed rate is submitted. DCF 52.66(4)(h)(h) Changes in the allowable costs of residential care centers based on current actual cost data or documented projections of costs. DCF 52.66(4)(i)(i) Changes in program utilization that affect the per client rate. DCF 52.66(4)(j)(j) Changes in the department’s expectations relating to service delivery. DCF 52.66(4)(k)(k) Changes in service delivery proposed by a residential care center and agreed to by the department. DCF 52.66(4)(L)(L) The loss of any source of revenue that had been used to pay expenses, resulting in a lower per client rate for services.