St. Louis County Library 2015 Budget Proposal. November 17, 2014

Transcription

1 St. Louis County Library 2015 Budget Proposal November 17, 2014

2 TABLE OF CONTENTS: PAGE NO. 1. INTRODUCTION a. Executive Summary 2 b. Governance and Budgeting Process 3 2. MAINTENANCE AND OPERATING FUND a. Revenue and Expense Highlights 4 b. Revenue Trend and 2015 Budgeted Revenue 7 c. Expense Trend and 2015 Budgeted Expense 8 d. Property Assessment Valuations for e. Property Tax Rate Certification 10 f. Fund Balance Overview 11 g. Library District Organizational Chart CAPITAL PROJECTS FUND a. Fund Description and Revenue and Expense Highlights 13 b Budgeted Revenue and Expense DEBT SERVICE FUND a. Fund Description and 2015 Budgeted Revenue and Expense 16 b Budgeted Revenue and Expense Debt Service schedule 17 c. Bond Debt Service Schedule 18

3 St. LouiS County Library DiStriCt 2015 MaintenanCe & operation budget executive SuMMary The St. Louis County Library experienced a remarkable year in The Library was named the 2014 Library of the Year, a 2014 Top Workplace and received the 2014 Star Library designation from Library Journal receiving four stars for significant achievement in circulation, visits, program attendance, and computer usage. In addition, construction began on two brand new library branches at Grant s View and Lewis and Clark and plans were finalized for the renovation of nine libraries in 2015, activity unprecedented in Library history. We have also cultivated new relationships in the community resulting in increased programs and services for our patrons and an increased awareness of the St. Louis County Library as a true community partner in the region. Much of 2014 was also devoted to the development of the Library s new Strategic Plan. With significant input from Library patrons, community leaders, community organizations and school districts, Library employees were able to develop a Strategic Plan that will be focused on: enriching Minds, enhancing Lives and expanding perspectives With the Strategic Plan as our guide, 2015 looks to be another remarkable year for the St. Louis County Library. The 2015 Library Budget addresses plans for the three areas of focus in the Strategic Plan. These are: increase Literacy: The St. Louis County Library serves the community s literacy needs from babies to adults: We are the best resource for supporting individual growth. Develop a strengthened sense of community and social connectedness: The St. Louis County Library understand the needs of our communities and look for ways to support and enrich the lives of our patrons by providing opportunities to gather and enjoy shared experiences. Create gathering Spaces: We build community through our shared public space. Our plans outlined in the 2015 Budget for collections, programs, services and facilities including construction on eleven library branches in 2015 support these goals. This is a very exciting time to be part of the St. Louis County Library. We look forward to great success in 2015 and continued support for our patrons through the values of customer service excellence, lifelong learning, advocating for youth, community engagement and integrity. Kristen L. Sorth Director 2

4 governance & budgeting process The St. Louis County Library District was established as a political subdivision of the State of Missouri with taxing authority by an election held in April of The first book was circulated in March of The five member Board is appointed by the County Executive with County Council consent. The Library operates on a calendar year. An annual report is sent to the County Executive by April 30. The St. Louis County Library District follows these procedures in preparing the budget document and following the legal approval process: St. Louis County Collector of Revenue s office will distribute property assessed valuations during the middle of September. The Manager of Finance obtains the assessed values for the Library District and calculates tax rates that determine the cash received for the upcoming calendar year. The proposed tax rates are presented to the public for comment at a tax hearing. The Library Board of Trustees approves the recommended tax rates at the September Board meeting. Tax rates are certified by the Missouri State Auditor s office no later than October 1st. The Budget Committee is responsible for approving the budget prior to its presentation to the Library Board of Trustees. The committee is comprised of key administrative personnel who actively share in putting forward the plan for the upcoming budget year. With the input of the committee, the Manager of Finance is responsible for preparation of the budget. Once the plan is agreed upon, the Budget Committee is responsible for formal approval. The proposal is submitted to the Library Board in November as an informational item and is submitted for formal approval at the December meeting. The budget document includes the statutory requirements as stated in the Revised Statutes, State of Missouri. The budget is prepared, and presented to the Library Board, on a cash basis for all funds presented. Some historical comparatives in the budget document are represented as audited and are from the Governmental Fund section of the Library District s Comprehensive Annual Financial Report. These financial statements are based on the modified accrual basis of accounting. The document includes proposed revenue and expenditures. By law, expenditures may not exceed the total of current revenues and assigned/unassigned fund balances. According to Missouri State Statutes, the Library District can revise the budget once during the year. Revisions to the budget are reviewed by the Budget Committee and must be approved by the Library Board of Trustees. Revisions to the budget are approved in September. The St. Louis County Library District operates on a fiscal year of January 1 through December 31. This is in accordance with Revised Statutes, State of Missouri governing the operation of County Libraries in Missouri. 3

5 M A I N T E N A N C E A N D O P E R AT I N G F U N D

6 revenue HigHLigHtS District tax revenue in 2015 is budgeted to be the same as received in 2014, just under $48 million. Tax revenue is projected to generate over 96% of the Library District s total revenue. Tax rates, certified by the Missouri State Auditor on September 26, 2014, remain unchanged from prior year. The District receives some income from patron payments for fines, lost and damaged materials, miscellaneous fees such as rental of meeting rooms, and payments for various types of photocopies. Total revenue from these categories has typically been around $1.35 million annually in prior years. Due to several branch closures in 2015, this revenue is projected to be approximately $1.1 million. expense HigHLigHtS The salary budget for 2015 increases approximately 6.3% and includes merit increases to employees at an average of 3%. In addition, salary expense includes a 27th pay period per the 2015 calendar accounting for most of the rest of the increase (there are only 26 pay periods in a normal calendar year). Aligning with the recently approved Strategic Plan, the Library District is proposing to add two new positions for 2015, an Adult Program Coordinator and a Preschool Outreach Assistant. The Library District s Pension plan is 89.1% funded as of the Actuarial Report issued by our Library District Actuary, Milliman, in January of The Library District is committed to work toward being fully funded at 100% with annual contributions that are in excess of the recommended contribution from the actuaries. In 2014, Milliman recommended the District contribute $1,571,000, but the District went beyond this recommendation and contributed $1,625,000. In 2015, the Library District will budget a contribution of $1,875,000. In 2015, the Other Personnel Expense category is budgeted to increase by 14.9%. Most of the increase is in conjunction with the Library District s full implementation of a wellness program to promote a healthy lifestyle for its employees. Employees that do not participate in the wellness program will be required to pay more for their health insurance. In addition, the Library Board of Trustees approved an upgrade to the Library District s Ceridian HR/payroll system at the October, 2014 meeting. This upgrade will be implemented in 2015 and is included in this budget. Funding for Library Collections continues to be a high priority in 2015, comprising 15% of the total budget. A high priority is placed on acquiring Bestsellers, DVDs and other popular materials in sufficient quantities to satisfy patron demand. The Library District is also committed to supporting early literacy efforts by purchasing high quality children s materials for outreach programs as well as the general collection. The purchase of print materials will decrease slightly in 2015 as several branches will be closed for remodeling. There will be a corresponding increase in the purchase of electronic resources that continue to gain in popularity. The programming budget is projected to be down approximately 20% in The Library District s renovation phase in 2015 includes several branch closures. Branches will continue to conduct outreach outside of the branch; however, there will be a reduction in the total number of programs available. Additionally, the Library District is restructuring the Summer Reading Club into an online format that will encourage increased reading and computer literacy. Toy prizes offered in the past will be replaced with virtual badges resulting in cost savings. 4

7 expense HigHLigHtS (continued) However, the students completing the program will still receive a book and be entered into a raffle for other prizes. The new software for the online program was approved by the Library Board of Trustees at the September, 2014 meeting and will be part of the Technology budget in Other programs of interest for 2015 include the new your Library which is a series of science, technology, and art programs. In addition, the Library District has planned an increased budget for Black History Month celebrations. The public relations budget includes the addition of an marketing vendor to promote Library activities through the distribution of an electronically delivered monthly newsletter. Utilities are projected to be down 12.8% due to branch closures and significant savings in our data communications costs. Custodial Supplies and Services are expected to be up 28.5% largely due to signing a new contract with 4M Building Solutions for evening custodial services at branch locations. With branch closures and the use of custodians from those closed branches, the Library District could realize costs savings not included in the budget. Building Repair is projected to be down 35.1% due to the focus on the Phase 1 construction plan with the renovation of nine existing facilities (Rock Road, Jamestown Bluffs, Indian Trails, Weber Road, Oak Bend, Natural Bridge, Prairie Commons, Cliff Cave, Samuel C. Sachs) and the construction of two new branches (Grants View, replacing Tesson Ferry and Lewis and Clark). The Mid-County Branch will need masonry work to stabilize a wall that lines the outside steps. The Library has included the project to upgrade the panels for the security and fire alarms. This project was approved by the Library Board in July of 2014 and was included in the 2014 budget. Most of the work should be completed by the end of 2014; however, payment will not be initiated until Also, the Library plans to install a walkway connecting the Samuel C. Sachs branch with the new Reading Garden at the same location. Building Operations is also expected to show savings, down 23.6%, due to branch closures during renovations. This is largely due to a reduction in security guard expense; however, the Library does plan on adding additional hours at the Florissant Valley Branch beginning in The Automotive budget includes the purchase of two vehicles. The Library District will be replacing a checkout vehicle for various projects at Library branches and the other is the purchase of a vehicle for the Library Director. The Equipment budget includes the placement of additional security cameras at locations that are not being renovated. 5

8 expense HigHLigHtS (continued) Technology costs are projected to decrease 20.1% in The decrease is largely due to increased spending in 2014 for the replacement of all staff computers that required an upgrade from Windows XP to Windows 7. The 2015 budget includes the cost to implement a managed print program which is expected to result in a reduction in printing costs. The Library District plans to purchase Salesgenie, a software that is used as a search and marketing tool which will enable us to identify and promote Library services to non card holders, new residents, and the parents of young children. Also, bid procurement software is included to help organize and standardize the Library District s Request for Proposal and Invitation for Bid process. Debt Service expense is for principal and interest payments on the Library District s Certificates of Participation issued in The principal payment will increase from $1,640,000 to $3,570,000 in In addition, interest payments will decrease from a total of $2,827,125 in 2014 to $1,899,066 in The interest payment is lower due to an increase in interest payments in 2014 caused by the scheduled delay in our first principal payment. The schedule of principal and interest payments is shown on page 18. 6

9 St. LouiS County Library revenue breakdown MaintenanCe and operation revised audit audit budget budget item 12/31/12 12/31/13 9/16/14 12/17/14 District Taxes $35,699,986 $45,562,688 $48,503,738 47,617,562 District Taxes - Prior Years 334,692 (126,561) (285,000) 15,000 Financial Institution Tax 153, ,779 39, ,000 Athletes & Entertainers Tax - 2,788-25,000 State Aid 429, , , ,787 State Grant - 19,532 20,000 30,000 Other Grants - 42,253 35,750 35,000 Federal Grants 6, E-rate discounts 299, , , ,991 Fines and Fees 1,114,700 1,095,576 1,161, ,288 Sale of Surplus Materials 105, , , ,407 Interest Earned 87,376 51,975 45,000 37,731 Copy Income 213, , , ,718 Miscellaneous 657, , ,140 57,804 total revenue 39,102,479 48,217,576 50,577,391 49,595,288 7

10 St. LouiS County Library expenditure breakdown MaintenanCe and operation revised audit audit budget budget item 12/31/12 12/31/13 9/16/14 12/17/14 Salaries $17,014,293 $17,661,672 $18,733,434 $19,910,130 FICA 1,337,421 1,380,081 1,377,786 1,556,972 Pension 1,429,575 1,595,002 1,650,344 1,900,342 Group Life Insurance 72,673 77,592 79,932 87,213 Medical and Dental Insurance 3,073,109 3,155,629 3,369,336 3,409,051 Workers' Compensation 144, , , ,870 Unemployment Compensation 18,846 1,443 24,000 20,000 Other Personnel Expense 278, , , ,135 Subtotal 23,369,505 24,296,666 25,713,909 27,418,712 Library Collections 6,204,434 6,365,163 7,449,925 7,250,000 Collection Maintenance & Supplies 400, , , ,396 Equipment and Office Supplies 192, , , ,506 Printing and Programs 781, , , ,357 Postage 97,442 85, ,640 96,916 Travel and Meetings 85,019 58,328 99,994 85,970 Professional Services 248, , , ,000 Miscellaneous 378,358 59,700 15,000 20,000 Utilities 1,376,426 1,413,353 1,522,496 1,330,487 Custodial Supplies & Services 241, , , ,661 Insurance 264, , , ,113 Building Repair 999,802 1,066, , ,000 Building Operation 781, ,790 1,030, ,075 Mobile Services and Operation 113, , , ,021 Subtotal $12,166,809 $12,216,116 $13,440,643 $12,519,503 Automotive - 23, ,000 70,000 Equipment 82, , ,000 55,000 Furniture 122, , ,992 75,000 Technology 549, ,519 1,009, ,113 Capital Projects 249,596 12, Debt Service - - 4,467,125 5,469,066 Subtotal $1,004,191 $890,379 $6,018,221 $6,475,179 total Cash expenditures $36,540,506 $37,403,160 $45,172,773 $46,413,394 8

11 Total tax revenue is projected to provide just under $48 million in cash fiscal year Tax revenues are 96.3% of the Library District s total revenue. The District s tax revenue projections are based on tax rates the Library Board approves each September. The Library sets a rate for each subclass of real estate (residential, agricultural, and commercial). Rates are also set for personal property. Tax rates are then certified by the Missouri State Auditor. The rates that were certified on October 1st of this year will provide the budgeted cash for Below are the rates for the past three years: residential agricultural Commercial personal property The above tax rates are levied against assessed property valuations issued through the Collector of Revenue s Office and adjusted by the Board of Equalization each September. As assessed valuations grow, largely through new construction, the Library revenue will grow. Total assessed valuations dropped 2.6% from 2012 to 2013 and rose.8% from 2013 to Property Valuations Budgeted Tax Revenue ,000,000,000 10,000,000,000 18,000,000,000 16,000,000,000 14,000,000,000 12,000,000, % 14.0% 28.1% 0.03% 57.6% 18,000,000,000 Residential Agricultural Commercial Personal Property The assumed collection rate is 97.5%. St. Louis County receives 1% for collecting taxes and.5% for the costs of general reassessment which is conducted in odd years will be a reassessment year. Tax Increment Financing (TIF) project assessments are a reduction of the property assessed valuations and are included in the values in the chart shown. The Library does not budget any property tax revenue from these projects and does not actually receive revenue until the projects are closed and a surplus determined. The other sources of income account for 3.7% of the total budgeted revenue in This revenue mainly consists of fines and fees, photocopy income, sale of surplus materials, state aid to Library s issued from the State of Missouri, and e-rate rebates on technology expenses. 9

12 10

13 St. LouiS County Library CaSH FunD balances assigned for Capital unassigned restricted improvements total 2014 Beginning Balance $7,264,092 $38,465 $2,727,124 $10,029,681 add: 2014 Projected Surplus/(Deficit) 5,404,618 total: 2014 Projected Ending Balance 7,797,445 33,465 7,603,389 15,434,299 add: 2015 Projected Surplus/(Deficit) 3,181,894 total: 2015 Projected Ending Balance 7,976,377-10,681,147 18,616,193 FunD balance In 2011, the Library Board of Trustees established a fund balance and reserve policy that was revised in 2013 and again in This policy defines classifications for fund balance and outlines steps to be taken if the fund balance falls above or below the recommended levels. While a small portion of the fund balance is restricted, the remaining balance is either unassigned or assigned for capital improvements. The minimum amount of unassigned fund balance must be between 15% and 20% with a target of 17.5% of the following year s budgeted operational expenses. This range is in line with the Government Finance Officers Association (GFOA) recommended levels. The policy also addresses a fund balance in excess of the 20%. All of the fund balance above 20% will be assigned for Capital Improvements. At the end of 2015, the projected amount of fund balance above 20% to be assigned to Capital Improvements is $10,681,

14 Library DiStriCt organizational CHart 12

15 C A P I TA L P R O J E C T S F U N D

16 CapitaL projects FunD 2015 budget CaSH basis On April 30, 2013, the St. Louis County Library received $58 million from the issuance of Certificates of Participation. The funds received are the first phase of a multi-year construction plan which will build several new Library facilities and renovate several existing Library facilities. These funds are held in separate bank accounts by the Library District s Trustee, BOK Financial and are accounted for separately from the Maintenance and Operating Fund in a Capital Projects Fund. In 2014, construction began on two new facilities, the Grant s View Branch, replacing Tesson Ferry, and the Lewis and Clark Branch. These facilities are projected to open in the fall of The Phase 1 construction also includes nine branch renovations in 2015 with four of those renovations scheduled to be completed in The renovations at Jamestown Bluffs, Indian Trails, and Weber Road will be completed in 2015 and will require branches to be closed approximately six months. The renovation at Rock Road is expected to require the branch to be closed nine months, but this branch renovation is also scheduled to be completed in The Oak Bend, Natural Bridge, Prairie Commons, Cliff Cave, and Samuel C. Sachs Branches will begin renovations in the latter half of 2015 with completion in the spring of In total, the Library District plans to spend just over $41 million dollars in 2015 with the completion of the Library District s Phase 1 construction plan scheduled to be completed in

17 St. LouiS County Library revenue and expense breakdown CapitaL projects FunD audit budget budget 12/31/ /31/ /1/2014 Interest Earned 12,503 59,396 60,000 total income 12,503 59,396 60,000 Professional Services Facilities Master Plan Administrator 178, , ,000 Construction Manager 288,224 2,335,000 Legal 118, ,238 54,000 Architects 177,286 1,750,628 2,687,061 Bond Issuance Expense 498,828 Other 191,956 42,000 1,934,000 Land Acquisition Land 265,639 2,750,485 Earnest Deposits Building Construction 2,951,759 13,259,078 Building Renovation 14,190,132 Furniture, Fixtures, and Equipment 3,753,021 Technology 1,771,007 Other Construction Expense 661,300 total operational Cash expenditures $1,164,768 $8,173,397 $41,028,599 ***Projected Cash Balance End of Year (Est.) 57,283,389 49,109,992 8,081,393 14

18 D E B T S E R V I C E F U N D

19 Debt ServiCe FunD 2015 budget (CaSH basis) With the issuance of the Certificates of Participation on April 30, 2013, the St. Louis County Library established a Debt Service Fund from which all principal and interest payments related to the debt will be paid. The debt service for the Certificates will be for 25 years, and require semi-annual interest payments in April and October, and an annual principal payment in April (the debt service schedule can be found on page 17). Payments will be made with transfers from the Library s Maintenance and Operating Fund. The Certificates were issued with favorable ratings from Standard and Poor s (AA) and Moody s (Aa2). 16

20 St. LouiS County Library revenue and expense breakdown Debt ServiCe FunD audit budget budget 12/31/ /31/ /1/2014 Transfer In from Operating Fund - 3,481,892 5,469,066 total income 3,481,892 5,469,066 Interest Payments 2,827,125 1,899,066 Principal Payments 1,640,000 3,570,000 total operational Cash expenditures $0 $4,467,125 $5,469,066 17

21 bond Debt ServiCe St. Louis County Library District, Missouri Certificates of participation, Series 2013 FinaL aa2 (Moody's) / aa (S&p) rated annual period ending principal Coupon interest Debt Service Debt Service 04/1/14 1,640, % 1,841, ,481, /1/14 985, , ,467, /1/15 3,570, % 985, ,555, /1/15 913, , ,469, /1/16 3,715, % 913, ,628, /1/16 839, , ,468, /1/17 2,850, % 839, ,689, /1/17 782, , ,472, /1/18 1,425, % 782, ,207, /1/18 761, , ,968, /1/19 1,475, % 761, ,236, /1/19 731, , ,967, /1/20 1,545, % 731, ,276, /1/20 693, , ,969, /1/21 1,600, % 693, ,293, /1/21 677, , ,970, /1/22 1,645, % 677, ,322, /1/22 644, , ,966, /1/23 1,720, % 644, ,364, /1/23 601, , ,965, /1/24 1,790, % 601, ,391, /1/24 574, , ,965, /1/25 1,855, % 574, ,429, /1/25 537, , ,966, /1/26 1,930, % 537, ,467, /1/26 498, , ,965, /1/27 2,010, % 498, ,508, /1/27 458, , ,966, /1/28 2,080, % 458, ,538, /1/28 427, , ,965, /1/29 2,145, % 427, ,572, /1/29 393, , ,965, /1/30 2,215, % 393, ,608, /1/30 357, , ,966, /1/31 2,290, % 357, ,647, /1/31 320, , ,968, /1/32 2,365, % 320, ,685, /1/32 282, , ,967, /1/33 2,445, % 282, ,727, /1/33 240, , ,967, /1/34 2,530, % 240, ,770, /1/34 197, , ,967, /1/35 2,620, % 197, ,817, /1/35 151, , ,968, /1/36 2,715, % 151, ,866, /1/36 103, , ,970, /1/37 2,810, % 103, ,913, /1/37 52, , ,966, /1/38 2,915, % 52, ,967, /1/38 2,967, ,900,000 26,290, ,190, ,190,