2010 Budget. Pierce County Library System

Transcription

1 2010 Budget Pierce County Library System 2nd Reading December 9, 2009

2 PIERCE COUNTY LIBRARY SYSTEM BOARD OF TRUSTEES Eugene Matsusaka, Chair J.J. McCament, Vice Chair Steve Albers Allen P. Rose Budd Wagner BUDGET PREPARED BY Clifford Jo Director of Finance & IT Neel Parikh Executive Director Georgia Lomax Deputy Director WITH ASSISTANCE FROM Lorie Erickson Facilities Director Mary Getchell Communications Director Holly Gorski Human Resources Director Becky Hester Collection Services Director Lynne Hoffman Development Director Dale Hough Finance Manager Sharon Ufer Lavell Collection Services Manager Michele Leininger Information Services Director Judy Nelson Youth Services Director Kerry Nielan IT Manager Sally Porter Smith Community Outreach Services Director (vacant) Branch Experience Director Cindy Bonaro Managing Librarian Robin Clausen Managing Librarian David Durante Managing Librarian Alexa Eccles Managing Librarian Rose Jetter Managing Librarian Clare Murphy Managing Librarian Kathleen Wolf Managing Librarian Lynne Zeiher Managing Librarian Storm Reyes Executive Assistant to the Director 2010 Budget Page ii Pierce County Library System

3 GUIDE TO THE 2010 BUDGET Herein contained is the Pierce County Library's 2010 budget, which includes revenues and expenditures for the Library's operating and capital budgets. To obtain copies of this document, please contact: Storm Reyes Pierce County Library System th Street East Tacoma, WA (253) (253) (fax) The document is also available online at the Library's website: Budget Page iii Pierce County Library System

4 BOARD OF TRUSTEES MESSAGE REPLACED BEFORE FINAL PRINTING You and your neighbors made great use of Pierce County Library System s services throughout As Chair of the Library s Board of Trustees, I thank you for your patronage and support. In 2008, Pierce County Library System saw a record increase in people checking out books, movies, CDs, and other items a 12% increase over We know that many factors contribute to these increases; additional services from the 2006 re authorized levy, quality customer service, strong offering of materials, and improved marketing emphasis. In 2008, kids and adults clamored for Live Homework Help, an online tutoring service. On average, during the school year, nearly 1,200 students a month used the service, which is up 28% compared with last year, when the Library launched the service. The Library is happy to continue to provide you with needed library services. Thanks to voters passing a re authorized levy in 2006, we have been able to maintain and add services for you. At the same time, the Library continues to face budget challenges because costs to operate the Library exceed revenues. In 2009, we will continue to deliver the promises made in the 2006 re authorized levy. We are also looking toward the future and working with individuals and organizations in the communities we serve to develop a facilities master plan, which will be a 20 year building plan. The Library anticipates that the facilities master plan will form a basis for facility improvements, including potential future buildings, expansions or replacements of library branches, as well as delivering services directly to people through kiosks or other remote methods. Thank you for visiting, using, and supporting your Pierce County Library System. Al Rose, Chair, Board of Trustees 2010 Budget Page iv Pierce County Library System

5 TABLE OF CONTENTS GUIDE TO THE 2010 BUDGET... iii BOARD OF TRUSTEES MESSAGE... iv TABLE OF CONTENTS... v LIST OF TABLES... vii LIST OF FIGURES... viii LIBRARY DIRECTOR'S MESSAGE MISSION, VISION, VALUES Mission Vision Values SERVING GROWING & CHANGING COMMUNITIES Levy Goal 1: Expand Open Hours Levy Goal 2: Add book and other materials Levy Goal 3: Increase Services for Youth Levy Goal 4: Improve Customer Service and Technology BALANCED SCORECARD MISSION Vision LIBRARY SERVICES Service Area Services Key Data (2009) LIBRARY DEPARTMENTS Library Departments BUDGET SUMMARY Budget Method & Sequence Combined Funds Budget Operating Budget Summary REVENUES Revenue Assumptions Taxes Charges for Services Library Fines Miscellaneous EXPENDITURES Expenditure Assumptions Personnel Maintenance & Operations Materials Other Expenditures GENERAL FUND BALANCE Budget Page v Pierce County Library System

6 General Fund Balance Summary GFOA Statement on General Fund Balance DEBT SERVICE Debt Service CAPITAL IMPROVEMENT FUND Summary Financing Sources Capital Improvement Plan Capital Projects Facilities Projects Vehicle Projects Technology Projects Contingency Fund Balance CASH FLOW ANALYSIS/BUDGETING Cash Flow Analysis Interfund Loans Investments GLOSSARY BRANCH & BUILDING INFORMATION REFERENCES Budget Page vi Pierce County Library System

7 LIST OF TABLES Table 1 Overview Table 2 Library Use Statistics Table 3 Materials Statistics Table 4 Youth Services Statistics Table 5 Service and Technology Statistics Table 6 Combined Funds Budget (Expenditures) Table Operating Budget Summary Table General Fund Revenue Summary Table 9A General Fund Revenue (Final Budget) Table 9B General Fund Revenue (Actuals) Table Expenditure Summary Table Expenditures By BARS Category Table Personnel Detail Table PCLS Staffing Table Maintenance & Operations Detail Table Materials Detail Table General Fund Balance Summary Table 17 Capital Improvement Fund Detail Table 18 Cash Flow Analysis/Budget Worksheet Table 19 Branch & Building Data Budget Page vii Pierce County Library System

8 LIST OF FIGURES Figure 1 Balanced Scorecard Figure Balanced Scorecard Results Figure 3 Measures and Targets Figure 4 Map of Branch Locations in Pierce County Figure 5 Organizational Chart Figure 6 Budget Process & General Timeline Figure 7 Strategic & Fiscal Planning Process Figure 8 Source of Revenues Figure 9 Materials Budget History Figure 10 Materials Expenditures Per Capita History (Actuals through 2008) Figure Materials Expenditures Per Capita Comparison Figure 12 CIF Transfer History (Actuals Through 2008) Figure 13 General Fund Ending Fund Balance Figure 14 Ending Fund Balance as % of Year End Actual Revenues Figure 15 CIP Budget History (Excludes Carry Forwards) Figure 16 Capital Fund Ending Fund Balance Figure 17 Combined Funds Ending Fund Balances Figure 18 Annual Circulation History: Budget Page viii Pierce County Library System

9 LIBRARY DIRECTOR'S MESSAGE Parkland/Spanaway Library, Built 1990 REPLACED IN DECEMBER

10 LIBRARY DIRECTOR'S MESSAGE Pierce County Library System puts the people it serves and its taxpayers at the center of budget decisions. The Library is committed to operating the system in the best interest of the public and delivering to them the value that they deserve. Decisions in the 2010 budget reflect the long term interest of the taxpayer. The 2010 budget reflects the current economic downturn, which has greatly reduced property values and new construction revenue throughout the communities in the Library s service area. Ninety seven percent of the Library s revenue comes from property taxes. Long term revenue projections show continued decreases in property values and new construction revenues. Based on these projections, it is clear that the Library will face revenue shortfalls during the next several years. Thus, the Library needed to reduce the 2010 budget in a manner that would decrease expenditures during the next several years. Therefore, this budget reflects a $1.5 million reduction in staff and operating costs. At the same time, the Library is committed to delivering the promises from the voter approved 2006 re authorized levy. The levy allowed the Library to significantly improve service for the public, and to catch up after 20 years of falling behind current library services. The Library has always been recognized for its strong fiscal and operational management, which is a key reason that budget reductions, although significant, focus on efficient operations rather than reduced services for the public. For the past 18 months, the Library has been collaborating with the community to develop a Facilities Master Plan, designing services and facilities for the future. The Library has learned about community needs and successful services from other libraries. The plan results in recommendations for facilities throughout the system, but also clearly outlines a new direction for library services to help meet community needs today and tomorrow. Through many community discussions and a strategic vision workshop with key community leaders, the public has delivered a clear vision for the Library System and its services, and the Library must now begin to respond to that vision. In the 2006 levy re authorization, the Library promised to maintain the levy promises for five to six years, expecting to reserve the revenue from the first levy year and use that revenue to sustain the services in future years. In 2006, the Library projected that in order to sustain the services from the 2006 levy; it would need to ask the voters to renew the levy in However, in September 2010, after learning about the 4.93% decrease in district property values and the 38.1% drop in new construction revenue (and experiencing nearly a 90% drop in interest investment returns), the Library re evaluated the earlier long term projections for property values, new construction and the levy rate. The levy rate is projected to stay at around $0.48 until 2012 or Ultimately the Library will need to ask voters for a re authorized levy to align revenues with the escalating costs to operate the Library and maintain services. Due to the cost of conducting a levy lid lift, a lid lift should not be attempted until the levy rate is $0.46 or below; therefore, the earliest possible date for an election would be around Should cash reserves be used to balance the 2010 budget and future years, the Library would be forced to incur greater reductions and layoffs prior to a levy lidlift. Therefore, because of the need to sustain services for a much longer period, the Library decided not to use cash reserves to balance the 2010 budget. In spite of the need for reductions, the Library considered balancing the economic needs in our communities with maintaining as many jobs at the Library as possible. The Board of Trustees recognized that the public is experiencing the 2010 Budget Page 10 Pierce County Library System

11 same economic downturn that the Library is experiencing. Therefore, the Board made the difficult decision not to override the Implicit Price Deflator. According to Washington State law, a taxing district, such as the Library System, may only increase its revenue by 1% or the Implicit Price Deflator, whichever is lower. The Implicit Price Deflator for 2010 was 0.848%. In order to increase the budget, the Board needed to exceed the Implicit Price Deflator and increase the revenue by 1%. However, the Board decided it was important to demonstrate its commitment to the public. Members of the Board deliberated that not passing the override would be responsive to the taxpayer by not putting further financial pressure on already stressed individuals and businesses. It also expressed that it is not business as usual and the Library cannot expect to deliver service in the same way it did in the past, and should ensure efficient operations or cost saving techniques. The overall budget reduction strategy was to preserve the highest possible service levels and make reductions that have the least impact on customers. Priorities for the 2010 budget are: 1. Make decisions in the best interest of the communities and taxpayers. 2. Preserve promises from the re authorized levy. 3. Provide up to date and future oriented services, beginning to implement the vision articulated by the community from the Facilities Master Plan. 4. Develop and support technology as a key strategy for the future, needing continuous improvement and development. Steps in developing the 2010 Budget were: Mid Year Reductions: The Library reduced the 2009 mid year budget by over $500,000. In anticipation of layoffs, the Library instituted a partial hiring freeze to create vacant positions. Efficiencies, cost savings, and time saving operations: During the past year the Library implemented many improvements that have resulted in reduced costs. Assess system service priorities and goals: Continuous improvement and efficient and effective business practices are an integral part of operations. Flatten the organization and restructure in order to reduce the need to make deeper cuts in the future and to improve service delivery: With projected long term budget limitations, this step was necessary to ensure efficient and up to date operations, as well as clearly aligning staff to improve the customer experience and add overall efficiencies. Since 70% of the Library s budget is staffing costs, staffing reductions were needed to reduce operating costs during the next few years. In times of revenue reductions, it is incumbent upon the library, like any business, to first ensure efficient and cost effective operations. This budget reduces the number of staff, flattens the organization to reduce layers of management, and reorganizes the structure with a focus on direct service to the public. The Library needed to examine methods for offering up to date service, efficient use of self service options such as self checkout, and effective service models and staffing patterns needed to offer service. The needs and demands from communities have changed and new options are available, and the Library needs to respond. Changes in service delivery were developed in order to reduce expenditures in the future and at the same time accomplish the budget priorities: Changing Demands: The Library must to respond with services that connect people with books, materials, and information; prepare children to read and help students 2010 Budget Page 11 Pierce County Library System

12 with homework; help people get and find jobs; and teach people about computers and help them build computer skills. At the same time, there have been developments that provide new methods to deliver that service through the Internet, Express Checkout, downloading audio books and ebooks. Such improvements have freed up staff to help provide greater and more direct service to customers. Future Vision: The Facilities Master Plan challenges the Library to look at new service models and increasingly focus on staying up to date. Customer and Community Focus: The Library System has increased its emphasis on the customer and community engagement. The Library s organizational structure and service model changes are consistent with methods to deliver customer and community oriented service. A key element of this budget is designing for the future. With that in mind, the Library will continue to develop service improvements. In 2010, the following activities make significant strides to improve service to customers and commitment to taxpayers. Virtual Services: The Web Administrator position is being converted to a Virtual Services position. The Information Experience department will begin to develop methods for customers to interact with and use the Library through virtual services. A virtual library will offer the variety of services provided through physical locations. with both cities. Therefore, this budget includes transfers to the capital improvement fund in order to ensure that both libraries will open as promised. Moving the Milton/Edgewood Pierce County Library to the Surprise Lake Shopping Center: With the availability of leased space in the Surprise Lake Shopping Center, moving the library will provide an opportunity to serve the Milton/Edgewood community better in a more convenient and larger space. Expenses related to the move are included in the Capital Improvement Plan and the lease expenses are included in the 2010 budget. The Surprise Lake location is projected to open June This budget reflects today s economy and the Library s response to the operating budget shortfall. At the same time, it redirects how the Library will deliver service while responding to its changing communities. I am confident that Pierce County Library System will deliver on its promises to meet community needs. We thank taxpayers for their support. Respectfully submitted, Neel Parikh Executive Director Opening Fife and University Place Pierce County Libraries: The University Place Library will open in winter 2011 and Fife Library will open in June Costs involved with opening both libraries have been included, causing pressure on the capital improvement fund during the next few years. The Library must deliver on the contractual agreements 2010 Budget Page 12 Pierce County Library System

13 MISSION, VISION, VALUES

14 MISSION, VISION, VALUES MISSION To bring the world of information and imagination to all people of our community VISION We are the community s choice for the discovery and exchange of information and ideas We value VALUES Customer service excellence Freedom of expression and free flow of ideas The diversity of people we serve, their opinions, capabilities, needs and interests The power and worth of words and images Equitable access to all library resources and services Responsible stewardship of public funds Creative solutions by solving problems in innovative ways Our diverse, skilled, and knowledgeable employees working in a safe and stimulating environment 2010 Budget Page 14 Pierce County Library System

15 SERVING GROWING & CHANGING COMMUNITIES 55+ Event at University Place Library REPLACED IN DECEMBER

16 SERVING GROWING & CHANGING COMMUNITIES REPLACE IN DECEMBER F rom 1996 to 2006, the Pierce County Library District s population grew by 49%. In 2008, PCLS s communities totaled 522,000 residents and in 2009 the area s population will be 534,000. In September 2006, Pierce County voters said yes to a ballot proposal to re authorize the Pierce County Library System s mill levy in order to maintain and add services to meet the needs of its growing and changing communities. In 2007, this plan was put into action, expanding open hours, adding books and other materials, increasing services to youth and improving customer service and technology. In the 2008 plan of work, staff further developed service based on the Levy promises and shaped by the Library s strategic objectives for ongoing operation. As PCLS moves into 2009, the services resulting from the Levy plan provide the platform that we continue to build upon as we strive to reach the vision to be The community s choice for the discovery and exchange of information and ideas. In 2009, behind the scenes work will include examining processes for efficiencies. Notable 2009 service addition, expansion and enhancement highlights, and results from 2008 are provided below in each of the four levy promise categories: Table 1 Overview Measureable Service Area* Population 497, , ,000 Mill Rate Levy (per $1,000 Assessed Value) Operating Per Capita $35.89 $44.91 $48.48 Expenditures Total $17,821,553 $22,854,133 $25,305,276 * Because population data is reported in the middle of the calendar year, the Library uses the previous year s reported population for purposes of benchmarks and comparisons Budget Page 16 Pierce County Library System

17 LEVY GOAL 1: EXPAND OPEN HOURS Increasing open hours 20% each week expanded access to library staff, books, resources and buildings for communities. Table 2 Library Use Statistics Measureable Per Capita Branch Total 1,966,837 2,280,289 Door Count Per Customer Active Cardholders Unique Customers New 30,650 41,476 51,135 Total 197, , ,831 % of Population 39.8% 37.9% 41% Total 104, , ,778 REPLACED IN DECEMBER Kabuki dancers performing at the Lakewood Library during the 2008 Asian Heritage Day Celebration 2010 Budget Page 17 Pierce County Library System

18 LEVY GOAL 2: ADD BOOK AND OTHER MATERIALS Connecting customers with good reading and the information they need is always a priority for PCLS. In addition to buying more books and other materials, PCLS added new downloadable formats for ebooks and audio material, expanded the Books Plus browsing collection and began renting newly released best sellers to fulfill high initial demand quickly Highlights: Added downloadable ebooks in Adobe and PDF formats Added downloadable Audio books for the ipod Hosted the first Pierce County READS featuring Alexander McCall Smith Added new release movies to Books Plus To Go browsing kiosks in 4 branches Conducted a review of collection use and needs. including public and staff surveys, to inform purchasing and space allocation decisions to meet current needs and interests of community. Implemented rental program to supplement book purchases to fill holds in a timely manner. Table 3 Materials Statistics Measureable Materials Per Capita $5.93 $8.49 $7.85 Expenditures Total $2,945,334 $4,320,675 $4,096,582 Items Per Capita Checkout Total 5,606,253 5,869,805 6,603,498 Downloadable Checkout Total 5,354 14,774 29,943 CKO Per Customer Average Catalog Visits Total 200, ,445 Holds Wait Average # Weeks New in 2009: Develop and implement response to collection review. Implement Floating collections to reduce time materials are unavailable to the public, as well as improve work efficiency and reduce delivery impacts. Add movies to Books + To Go kiosks in all branches Budget Page 18 Pierce County Library System

19 LEVY GOAL 3: INCREASE SERVICES FOR YOUTH Staff, books, and resources will support children and students reading and support skills to help them succeed in school Highlights: Added additional full day of Explorer bookmobile service to children and teens (7 added sites) resulting in 45% increase in circulation. Increased number of story times offered by 41%. Participation increase 31%. Summer Reading Program participation increased 81%. Pilot project introduced Early Learning workstations. New in 2009: Table 4 Youth Services Statistics Measureable Live Homework Uses Total 3,707 11,262 Juvenile/Teen Items Checkout Total 1,084,998 2,121,503 2,504,464 Juvenile Programs Total 1,747 2,003 2,371 Add 17 Early Learning stations in branches and bookmobiles. Develop Reader s Advocacy program to introduce good reads to children and teens. REPLACED IN DECEMBER African drum enthusiast at the DuPont Library during a local event for PC READS 2010 Budget Page 19 Pierce County Library System

20 LEVY GOAL 4: IMPROVE CUSTOMER SERVICE AND TECHNOLOGY Library services are convenient, fast and reflect customer preferences for contemporary library service and delivery. Added Korean and Spanish Bookmobile Services with the More than Books van. Developed connections to support service to the 55+ community. Added 64 Internet Workstations for the Public Increased bandwidth through adding capacity of T 1 lines. Added capacity through DSL lines. Began upgrade to Office 2007 for public and staff Lowered IT maintenance costs significantly Developed and tested method to have 24 Hour Turnaround for returning materials to shelves. New in 2009: Table 5 Service and Technology Statistics Measureable Public PC Workstations Total Web Visits Total 728,399 1,673,954 PC Classes Total Questions Per Capita Answered Total 286, , ,875 Database Uses Total 52,448 89,418 Add a Russian language outreach run. Develop Reader s Advocacy service to connect customers with good reads. Implement Reserve a computer program to provide easy, convenient way to reserve a public computer workstation and increase time limit for computer users. Improve space allocation in branches based on recommendations of the Collection Analysis Team, Facilities Master Plan research and branch/department recommendations and goals. Complete upgrade to Office 2007 Branch Services provides access to information and entertainment through welcoming, community centered facilities. We are the place people choose to visit because we provide positive experiences and valuable resources. Mission & Vision, Branch Services 2010 Budget Page 20 Pierce County Library System

21 BALANCED SCORECARD REPLACED IN DECEMBER Using Live Homework Help to Learn the Quadratic Equation 2010 Budget Page 21 Pierce County Library System

22 BALANCED SCORECARD the Balanced Scorecard is a philosophy of management strategy the way in which you manage your library. By using the language of measurement to describe your strategy and to guide your day to day actions, your chances of successfully executing your mission are dramatically enhanced. David P. Norton, September 2004 The Pierce County Library System s vision is to be the community s choice for the discovery and exchange of information and ideas. In order to make wise choices and to focus limited resources in the areas most critical to success and excellent service, PCLS chose in 2005 to implement the balanced scorecard as its strategic management and measurement tool. This tool requires organizations to determine how they will know when they have achieved a goal or their actions and choices have made a difference. It allows the Library to measure, evaluate and visibly demonstrate how well it is doing. The balanced scorecard was developed at Harvard University and has been in use since the 1990s in the for profit sector as well as by government agencies, including the State of Washington. Many libraries now use this planning, reporting and decision making tool. The key to the balanced scorecard is to consider all areas of operation when making choices in what to do and how to allocate resources. The Library examines four perspectives: Customer (Serve the Customer) Internal Processes (Run the Business) Learning and Growth (Develop Employees) Financial (Manage Resources) Staff develop objectives and initiatives for service and action by regularly assessing strengths and weaknesses within these four areas, and applying the Library s operational strategies: Remove access barriers Serve target populations Meet changing marketplace needs Serve the customer well Because the scorecard also focuses on achieving goals, staff identify methods to measure success and set targets to judge progress towards that success. Progress is then documented and reported to staff, the Board of Trustees, and the public. On the following page, the timeline shows the Library s balanced scorecard activities. Like Yoda Speak Like Yoda speak, the point what is? To be some Star Wars Jedi wiz? My nouns to put before the verb? Confuse all that by me are heard? To criticize the style I will, They use it only space to fill. Their rhymes examples I must make, And from this you must warning take. I others to this light must wake, And to their inmost cores they ll shake And shivers down their backs they ll catch Like fingers down a board that scratch. Oh, what an art form we have lost! What happened to old Robert Frost? With snowy wood, and longish road Back then each word would bear a load. So when you write a poem or song, Just put the words where they belong! Cuz if you don t, you re wasting time, Just twisting sentences to rhyme! Nathaniel Shelden Covenant HS, 11th Grade 2009 Our Own Words 11th & 12th Grade Poetry Winner 1st Place 2010 Budget Page 22 Pierce County Library System

23 BALANCED SCORECARD TIMELINE (REVISE IN LATE DECEMBER) 2010 Added in late December Added in late December Added in late December 2009 All Departments use scorecards. Develop appropriate work group scorecards. Review System measurements to confirm they are the right information. Refine annual scorecard development process In addition to Department scorecards, one work group began using scorecard. Quarterly reports were issued. Refined of System scorecard Initial use of department/branch scorecards. Meetings and discussions began to reflect scorecard perspectives and objectives. Adjusted and refined measurements and targets. Produced semiannual reports Initial use of System scorecard in budgeting, decision making. Departments and Branches introduced to balanced scorecard, and developed scorecards for 2007 based on the System level scorecard. Baseline measurements began for System scorecard. Sporadic reports Management identified and selected the balanced scorecard as PCLS s strategic management tool. Updated PCLS mission, vision and values statements. Performed an initial strength, weakness, opportunity, and threat assessment for the System and by perspective. Executive Team identified service strategies and strategic objectives for each perspective. Executive Team developed initial initiatives and measurements Budget Page 23 Pierce County Library System

24 We value Freedom of expression and free flow of ideas Figure 1 Balanced Scorecard PIERCE COUNTY LIBRARY SYSTEM We value Customer service excellence MISSION To bring the world of information and imagination to all people of our community VISION We are the community s choice for the discovery and exchange of information and ideas We value The diversity of people we serve, their opinions, capabilities, needs, and interests We value The power and worth of words and images We value Responsible stewardship of public funds MANAGE RESOURCES Increase non-property tax revenue Operate cost effectively Invest in infrastructure Maintain sustainable operation SERVE THE CUSTOMER Become a customer-focused library Make all experience and resources easy and convenient Improve access to service and resources Deliver contemporary programs and services Improve public awareness and knowledge STRATEGIES Remove access barriers Extend service to target populations Meet changing marketplace needs Serve the customer well DEVELOP EMPLOYEES Create a learning culture Support knowledgeable employees with up-to-date skills Attract and retain a talented and diverse workforce Build a positive work environment RUN THE BUSINESS Improve ability to implement projects and change Improve communication Develop an internal customer focus Improve the delivery, use, and application of technology Modernize business processes We value Equitable access to all library resources and services We value Creative solutions by solving problems in innovative ways We value Our diverse, skilled, and knowledgeable employees working in a safe and stimulating environment 1/2/08

25 Figure Balanced Scorecard Results Quarter 3 (January September) PERSPECTIVE SERVE THE CUSTOMER Measure External Customer Satisfaction Survey Rating Baseline 2007 Intended Outcome Customers Are Satisfied 2007 Target 2009 Trend N/A Progress Notes Q1 Branches developed action plan Next Survey: Fall 2009 Intended Outcome Library Is Well Used Measure Baseline 2007 Facility Visits Per Capita Website Visits Per Capita Population with Active Library Card Checkout per capita 4.18 (2007) 1.43 (2007) 39% (2006) 11.1 (2006) % 11.5 Target (2,234,160) 1.47 (767,340) 38% (197,000) 11.8 (6,159,600) Trend YTD 2008 YTD (2,299,33 8) 3.20 (1,673,95 4) 41% (212,831) 12.7 (6,616,85 0) 4.18 (2,127,07 7) 1.43 (728,399) 37% (193,234) 11.5 (5,844,82 7 Progress Notes 2007 data begins in Q3 (Does not include catalog visits) Card database cleanup 07/08: 18, Population 522, Budget Page 25 Pierce County Library System

26 (Continued) PERSPECTIVE MANAGE FINANCIAL RESOURCES Measure Donations/ Grants Baseline 2006 Intended Outcome Funding Sources are Diverse 2007 Annual Target 2008 Trend YTD $143,591 $159,771 $240,000 $218,828 $159,771 Progress Notes Funds raised by Foundation for new University Place Library not included in total Intended Outcome Library Is Good Steward of Taxpayers Money Measure Baseline Cost Per Circ $3.21 $4.52 Cost Per Visit $5.30 $8.01 Percent of Cash Annual Target 2008 Cost $4.75 Cost $ % 29.48% 35.35% Trend YTD 2008 YTD 2007 $3.82 $4.52 $5.28 $ % (estimate) 29.48% Progress Notes 2007 data begins in Q3 Reported annually REPLACED IN DECEMBER Summer Reading 2008 at the Sumner Library 2010 Budget Page 26 Pierce County Library System

27 (Continued) PERSPECTIVE DEVELOP EMPLOYEES Intended Outcome Staff and Library Improve Continuously Measure Baseline 2007 Training Dollars Per Employee N/I = No Information Annual Target 2008 Trend YTD N/I TBD N/I $ N/I Progress Notes Intended Outcome Quality Staff Serve the Community Measure Baseline 2007 Staff Turnover Rate Annual Target 2008 Trend YTD 2008 YTD N/I 8% 5.2% N/I Progress Notes Q1 4 Employees Q2 8 Employees Q3 2 Employees Q4 5 Employees Complaint Cleaning makes me want to be buried alive. Every second of weekends I do it; it drives Me crazy, so bad that I need padded walls In my room so whenever my mom loudly calls With a ton of new jobs that I see no need for I can go mop our kitchen's nearly forest floor Or scrub out the tub filled with dinosaur bones After staking out work zones with bold traffic cones. The dishes in our sink, stacked five miles high, Like slices of onion, make me want to cry. The mountains of laundry, heaped far and heaped near, Have to be put on a truck to get here. It looks like today I'll be in high demand; Say, would you mind coming to give me a hand? Leah Cardon Home school, 9th Grade 2009 Our Own Words 9th & 10th Grade Poetry Winner 2nd place 2010 Budget Page 27 Pierce County Library System

28 Figure 3 Measures and Targets Intended Outcomes Objectives Measures Targets Became a customerfocused Library v Rating on external customer satisfaction survey +5% Customers are satisfied Make all experiences easy and convenient Percent of changes/new services implemented that included customer input 90% (± 5%) = success SERVE THE CUSTOMER The Library is well used Improve access to service and resources Deliver contemporary programs and services Improve public awareness and knowledge Facility visits per capita Website visits per capita Percent of population with an active card Checkouts per capita +5% per year +5% per year +2% per year +5% per year Work together well to accomplish objectives Improve ability to implement projects and change Improve communication Percent of departments/ locations successfully implementing a process improvement 100% RUN THE BUSINESS Effective operations produce positive results for customers Develop an internal Customer focus Improve the delivery, use and application of technology Modernize business process Percent of changes/new services implemented that included internal customer input Rating on internal customer satisfaction survey Meet or exceed benchmarks and service targets 90% (± 5%) = success To be determined 80% (± 5%) = success Percent of system up time 98% Continued on Next Page 2010 Budget Page 28 Pierce County Library System

29 Continued from Previous Page Intended Outcomes Objectives Measures Targets Funding sources are diverse Increase non property tax revenue Revenue from donations and grants % % over 2006 MANAGE FINANCIAL RESOURCES Library is a good steward of taxpayers money Operate cost effectively Invest in infrastructure Cost per circulation in relation to benchmark libraries Cost per visit PCLS benchmark average % increase % increase of total operating costs Maintain sustainable operation Percentage of cash in reserves Fund balance 20% DEVELOP EMPLOYEES Staff and Library improve continuously Quality staff serve the community Create learning culture Support knowledgeable employees with up to date skills Attract and retain a talented and diverse workforce Build a positive work environment Training dollars per employee Percentage of regular staff attending at least one learning opportunity Rating on internal climate survey Staff turnover rate per time period To be determined 100% To be determined PCLS 10% 2010 Budget Page 29 Pierce County Library System

30 LIBRARY SERVICES REPLACED IN DECEMBER Author Alexander McCall Smith speaking at the Pierce County READS Author Event

31 LIBRARY SERVICES SERVICE AREA The Pierce County Library System (PCLS) provides library services in the unincorporated areas of Pierce County in Washington State, and 15 annexed cities and towns: Bonney Lake (annexed)* Orting (annexed)* Buckley (annexed)* Parkland/Spanaway* DuPont (annexed)* South Hill* Eatonville (annexed)* South Prairie (annexed) Edgewood (annexed) Steilacoom (annexed)* Fife (annexed)* Summit* Gig Harbor (annexed)* Sumner (annexed)* Graham* Tillicum* Key Center* University Place (annexed)* Lakewood (annexed)* Wilkeson (annexed) Milton (annexed)* * Denotes branch (Fife s built by 2011) City of Fife conducted an annexation election on November 3, The voters overwhelming approved annexation by a 70% vote. Interim services will begin at Fife on January 1, 2010 while a branch is being built, to open around June State Library. The South Hill Library was 11th highest circulating branch in the state. SERVICES The Library provides services through the seventeen branches, three bookmobiles, homebound and senior services, childcare services, and the website. The six largest branches are open 63 hours per week, seven days per week and provide a full range of services, including Reference and Youth Services librarians, meeting rooms, and extensive fiction and non fiction collections. Three of the next largest branches (Bonney Lake, Graham, and Summit) are each open 60 hours, seven days per week. These branches provide most of the services available as do the largest branches. Nine branches are open on Sundays, from 1 pm to 5 pm, a popular time for families. The total estimated population served in 2009 was 546,000. In December 2009, 247,137 people held Pierce County Library System library cards, a 16% increase over the previous year. The library collection included over 1.3 million items. In 2009, over 7.5 million items were circulated (2009: 6.6 million) and nearly 2.6 million patrons visited the branches and bookmobiles (2008: 2.3 million). In Washington State, six library systems serve 250,000+ population, including Pierce County Library. In 2008, PCLS ranked fourth in population served and fourth in total circulation. These six library systems operate a total of 149 branches and 19 bookmobiles. In 2008, Pierce County Library had four branches in the top 30 busiest branches (circulation) out of 345 total branches in Washington State, reported by the Washington Baby Explorer event at the South Hill Library The eight community branches (Buckley, DuPont, Eatonville, Key Center, Milton, Orting, Steilacoom, and Tillicum) provide smaller collections designed to meet the immediate needs of the local 2010 Budget Page 31 Pierce County Library System

32 communities and are open 31 to 54 hours per week, six days a week. The Community & Outreach Services Department serves {REVISE:} 26 nursing/retirement homes and 96 group homes and homebound patrons. Two bookmobiles currently serve isolated communities at 24 locations, and Explorer, the children's bookmobile, serves 26 locations having children in low income neighborhoods. The Youth Services department serves 65 childcare centers and 66 family childcare programs. All Pierce County Library System services are available to residents or property owners in the Library district. Any citizen can access the Pierce County Library System's holdings and databases electronically through the website. Users of smaller branches are able to access the collections and many of the services available at larger branches by means of the online public access catalog, the Internet, TDD, reference databases, fax machines, and toll free telephone access to the Reference Center. Please see the Map below for branches located throughout Pierce County. Also provided on the following page is a table of key data regarding the Pierce County Library System Budget Page 32 Pierce County Library System

33 KEY DATA (2009) Population of service area: , , , , ,000 Service Area Size (in square miles):... 1,600 1,600 1,600 1,600 1,600 Library Materials:... 1,282,796 1,324,660 1,311,331 1,282,810 1,300,000 Circulation:... 5,554,554 5,556,527 5,844,827 6,616,850 7,500,000 Library Visits:... 2,409,932 2,410,000 2,032,000 2,280,289 2,600,000 Open Hours/Week: No. of Registered Borrowers: , , , , ,137 Nursing Homes, Childcare Centers & Homebound Served: {UPDATE} * Programs Given for Children:... 1,839 1,747 2,733 {UPDATE} * Programs given for Adults: {UPDATE} * Program Participants:... 61,991 58,943 84,834 {UPDATE} * Summer Reading Program Attendance:... 23,962 24,915 36,831 {UPDATE} * Bookmobile Stops:... 1,522 1,480 1,424 {UPDATE} * Volunteer Hours/Year:... 4,184 4,797 3,953 {UPDATE} * Website Visits ('08 does not include catalog):... 1,515, , ,678 1,673,954 TBD Staff (Employees, including substitutes): TBD Staff (FTE equivalent): TBD *Not available until March 2010 In Washington State, PCLS ranked in 2008: 4th in total circulation (a chart of the annual circulation is available in the Glossary under Circulation) 4th in population served 4th in operating budget {REVISE:} Nationally, the 2009 HAPLR report for FY2007 placed PCLS in the upper XXth percentile at XX out of XX libraries in the largest category: 500,000+ population. Prior to 2008, the HAPLR report placed PCLS in the 250, ,000 population. PCLS score was XXX, national average was 505, and Washington s average was 668. This year s 2009 HAPLR report incorporates data from 2007 operations, the first year from the levy lid lift revenues Budget Page 33 Pierce County Library System

34 Figure 4 Map of Branch Locations in Pierce County The Youth Services Department fosters lifelong commitment to reading, to accessing information and to libraries. We provide materials and services to children, young adults, families, parents and caregivers. We advocate for these populations and work cooperatively with other youth serving agencies and organizations. We connect every young person with reading and the public library, fostering a literate and informed community. Mission & Vision, Youth Services 2010 Budget Page 34 Pierce County Library System

35 Figure 5 Organizational Chart ADDED IN LATE DECEMBER 2010 Budget Page 35 Pierce County Library System

36 LIBRARY DEPARTMENTS REPLACED IN DECEMBER Added in December

37 LIBRARY DEPARTMENTS LIBRARY DEPARTMENTS The Pierce County Library System (PCLS) has thirteen departments that provide public or administrative services: Branch Services Collection Services Communications Community Outreach Services Facilities Management Finance Department Fund Development Human Resources Information Services Information Technology Youth Services Provided below are their statements for the 2010 fiscal year. DEPARTMENT PAGES (1 2 PAGES PER DEPARTMENT) ADDED IN DECEMBER 2010 Budget Page 37 Pierce County Library System

38 BUDGET SUMMARY REPLACED IN DECEMBER Teens studying at the South Hill Library

39 BUDGET SUMMARY Pierce County Library s 2010 budget was developed with continuing services from the levy lid lift and balanced scorecard. Department Heads followed a process that required maintaining existing services, looking for efficiencies, and considering how their budgets incorporated the Library s balanced scorecard objectives and initiatives. The Library s levy lid lift election was held on September 19, 2006, at which time the voters passed Proposition 1 by 55.76% to 44.24%, effectively restoring revenues to 48 per $1,000 of assessed property values. For 2010, the Library s tax levy is a decrease of 0.848% plus new construction. BUDGET METHOD & SEQUENCE The 2010 budget was developed by applying the following method: 1. The Executive Team discussed service priorities and fiscal realities. 2. Managers were advised to plan and budget 2010 services with significant reductions. 3. Projected revenues were calculated. 4. The Finance Department updated PCLS tenyear cash flow driver (discussed in detail in the Cash Flow Analysis section). 5. Department Heads were given guidance on how to create their budgets in light of major budget reductions: Make decisions in the best interest of the communities and taxpayers. Preserve promises from a re authorized levy that voters passed in Provide up to date and future oriented services. Develop and support technology. 6. Department Heads developed and submitted capital improvement projects and operating budgets. 7. The Department Heads presented their budgets proposals to the budget review team (Executive Director, Deputy Director, and Director Finance & IT). 8. Second drafts of departmental budgets were calculated; adjustments were made. 9. Voluntary Retirement Incentive package is made available. 10. The Library received Pierce County s preliminary tax certification, which contained revenue calculations for The budget review team reviewed the compiled list of reductions and additions, and calculated a draft budget which was not balanced. 11. The 2010 draft budget was presented at the October 2009 Board of Trustees meeting. 12. The 2010 draft budget was presented at the November 2009 Board of Trustees meeting for public hearing and first reading. The Board elected not to override the Implicit Price Deflator, which meant the Library s levy was reduced by 0.848%, to % of the 2009 tax collection. 13. Layoff notices were sent out to affected staff; layoff process commenced. 14. The budget review team made deeper reductions to departmental budgets. 15. The 2010 final budget was presented at the December 2009 Board of Trustees meeting for second reading and final passage. 16. The 2010 budget book was published in January 2010, and made available to the public via the website. This method ensures that Library managers strategize and plan for service priorities for Budget Page 39 Pierce County Library System

40 COMBINED FUNDS BUDGET The Library utilizes three funds: General/Operating Fund, Capital Fund, and Debt Service Fund. For 2010, the combined funds budget is $32,037,418. The Capital Fund budget is larger than past years, due to several construction projects. Note that the Debt Service Fund, although available, remains unused because the Library carries no debt. Unlike the operating budget, the capital budget varies greatly from year to year, depending on capital improvements approved by the Board of Trustees. Each year, the Library plans the operating and capital budgets with an eye towards its mission, balanced scorecard, and fiscal responsibility. The Library s long history for receiving clean financial audits 12 spanning over 23 years is an indicator that the budgets reflect providing fiscally responsible value to the Library s customers and communities. The 2010 budget continues that excellence by creating a budget that promotes the Library s balanced scorecard and service priorities while staying within current fiscal realities. Table 6 Combined Funds Budget (Expenditures) COMBINED FUNDS BUDGET (EXPENDITURES) FINAL FINAL FINAL FINAL FINAL BUDGET Operating (excludes specified carryovers) $ 16,717,166 $ 17,692,650 $ 26,414,979 $ 27,674,594 $ 29,120,826 $ 28,639,318 Capital Improvement (includes carryovers) 958,187 1,304,934 2,230,601 1,571,500 1,474,600 3,398,100 Debt Service TOTAL $ 17,675,353 $ 18,997,584 $ 28,645,580 $ 29,246,094 $ 30,595,426 $ 32,037,418 Alias otherwise named To reach out to people in our community by increasing accessibility through the elimination of barriers. To provide the library experience for isolated communities. Mission & Vision, Community Outreach Services The fear i feel when i look in his eyes, is a feeling from my father i truly despise, the way he can throw so much away, he wants to live but hes here to stay, the memories i remember from when i was little, died and defeated, and now my love dwindles, how can i look up to someone who isn't himself, pitiful intakes changes itself, so many beautiful things, but so much hatred inside, while his daughter wastes tears in the corner where she cried, cocked and pulled to the temple of his head, but hes here for a reason because hes still not dead, on my bed there i lay, with a worried heart and nothing to say, while my mom cries because shes scared for him too, i shake and tremble while my heart turns blue, all i could hear was the two voices scream, while my legs criss crossed and the tears started to stream, what would happen if he died that night, its the same stupid battle i always have to fight, there is no end to this world we all hate, its a constant struggle till the end of the day. Alyssa Hernandez Cedarcrest Junior HS, 9th Grade 2009 Our Own Words 9th & 10th Grade Poetry Winner 3rd place 2010 Budget Page 40 Pierce County Library System

41 Figure 6 Budget Process & General Timeline July 2009 Balanced Scorecard Reviewed Start 2009 Budget Process; Budget Calendar Created August 09 Budget Instructions Delivered to Managers Managers Develop Budget Proposals CPI-U recorded and COLA estimated 8/12/09 Board Review & Feedback of Budget Process September 09 Executive Team Discusses Budget Directions October 09 Managers Present Budget Proposals to Budget Team Director s Approval for Draft Balanced Budget Elements Budget Team Develops Estimated Budget Preliminary Certification of Revenues Budget Team Develops Draft Balanced Budget Board Review & Feedback of Estimated Budget Implicit Price Deflator (IPD) Recorded 9/9/09 10/21/09 Board Review & Feedback of Draft Balanced Budget November 09 Finance Dept. Develops Budget Document 11/12/09 Public Hearing and Board 1st Reading of Budget December 09 Final or Revised Certification of Revenues (if any) Finance Dept. Revises Budget Document 12/9/09 January 2010 Budget Summary Pamphlet drafted Final Budget & Pamphlet Published (Printed & On Website) Public Hearing and Board 2nd Reading & Final Passage Board of Trustees message written 2010 Budget Page 41 Pierce County Library System

42 Figure 7 Strategic & Fiscal Planning Process Month Strategic Tasks Board Tasks (PKT / MTG) Fiscal & HR Tasks Departments submit BSC Published budget document (JANUARY 1) Fiscal year begins JANUARY accomplishments Previous fiscal year closed BSC accomplishment drafted FEBRUARY Annual BSC report created Finance Department finishes out previous fiscal year MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER Communications annual report produces Public Service department BSCs completed; submitted to all department heads Support department BSCs completed; submitted to all department heads ET creates system BSC Marketing plan created BSCs used for creating budget proposals Marketing plan approved System BSC completed and formatted Annual BSC report Review annual BSC report Previous fiscal year report Review previous fiscal year report Mid year budget, CIP, and cash flow Mid year budget, CIP, cash flow, budget & CIP resolutions (ACT) Approve mid year budgets CPI U information, next fiscal year budget calendar Board reviews budget calendar Estimated budget Board reviews estimated budget; discuss budget priorities Balanced budget, CIP, cash flow, Director s message Board reviews balanced budget, CIP, cash flow; provides feedback Second versions of balanced budget, CIP, cash flow, and budget document w/bsc (ACT) Board conducts first public hearing of budget; provides feedback; Board reviews and approves motion to certify property taxes to be levied for the following year Final versions of balanced budget, CIP, cash flow, and budget document (ACT) Board conducts second public hearing of budget; Board adopts resolutions to adopt fiscal year budget and CIP; Board approves motion to certify property taxes to be levied for the following year; final fiscal year transfer to CIP (ACT) Board may conduct special meeting(s) to approve budget changes First estimate of ending fiscal year performance Final corrections made to previous fiscal year Draft annual report created and distributed to Communications Department Final annual report sent to State Auditor Mid year budget process begins; budget papers sent out Preliminary assessment of property tax assessments announced by County; mill rate estimated Mid year budget papers received; budget created; decisions made June June CPI U from BLS available; Union informed Mid year budget entered into financial system Next fiscal year s budget calendar created Benefit information received from providers Fiscal year budget process begins; budget papers sent out with instructions Estimated budget created Every three years (2009, 2012, 2015): Labor Contract negotiations commence with intent to end 12/31 Department Heads submit budget proposals Department Heads present to budget panel Budget panel makes budget decisions Preliminary certificate of property tax levy received Balanced budget, CIP, cash flow created Budget decisions made; second draft of budget created; budget document draft begun; BSC incorporated into budget document Certificate of property tax levy received Budget document reviewed by budget team & amended Benefit package created and sent to staff Benefit enrollment month (NOVEMBER 15) Deadline to file tax levy resolution/budget certification to County Deadline to file IPD/tax increase resolution Third draft of budget created; budget document completed Department Heads notified to complete current year transactions by mid January (equip received by end of December) County may send revised levy certificate; Library recommends Board to act on it (or not) if material; if so, schedule a special Board meeting to approve revised budget and certificate; revised certificates sent to County Budget entered into financial system; budget document in final draft form Benefit enrollments processed (DECEMBER 31) Fiscal year ends LEGEND BSC = Balanced Scorecard PKT = Board packet materials CIP = Capital Improvement Plan MTG = Board of Trustees meeting IPD = Implicit Price Deflator ACT = Action required CPI U = Consumer Price Index Urban ET = Executive Team 2010 Budget Page 42 Pierce County Library System

43 2010 OPERATING BUDGET SUMMARY The summarized version of the 2010 PCLS operating budget is presented in Table 7 as a balanced budget, where expenditures match revenues. A detailed discussion of revenues and expenditures follows in the next two sections. Table Operating Budget Summary GENERAL FUND % CHANGE FINAL BUDGET SUMMARY FINAL (12/08) BUDGET 2009 TO 2010 CARRY FORWARD Carry forward $ 493,089 $ % REVENUES Taxes 27,560,98 27,789, % Intergovernmental 5,000 5,000 Charges for Services 68,000 65, % Fines 600, , % Miscellaneous 393, , % TOTAL REVENUES 28,627,737 28,639, % TOTAL AVAILABLE FUNDS 29,120,312 28,639, % EXPENDITURES Personnel 20,275,222 18,387, % Maintenance & Operations 3,316,862 3,063, % Materials 4,589,910 4,612, % Subtotal 28,181,994 26,063, % VOLUNTARY RETIREMENT INCENTIVE PAYOUTS 336,300 One time only ELECTION COSTS 80,000 80,000 CONTINGENCY 286, , % TRANSFERS TO CIF 572,555 1,872, % Subtotal 938,832 2,575, % TOTAL EXPENDITURES 29,120,826 28,639, % REVENUES LESS EXPENDITURES $ 0 $ % To raise, manage and allocate funds to support the services and programs of the Pierce County Library System beyond the scope of tax based funding. The Foundation provides significant and sustainable funding for key Library programs. Mission & Vision, Fund Development 2010 Budget Page 43 Pierce County Library System

44 REVENUES REPLACED IN DECEMBER Reading at the Summit Library

45 REVENUES Table General Fund Revenue Summary GENERAL FUND % CHANGE 2009 REVENUE SUMMARY FINAL (12/08) BUDGET FINAL TO 2010 Taxes $ 27,560,982 $ 27,789, % Intergovernmental 5,000 5,000 Charges for Services 68,000 65, % Fines 600, , % Miscellaneous* 393, , % TOTAL REVENUES $ 28,627,737 $ 28,639, % * Includes Foundation donations. REVENUE ASSUMPTIONS estimates. New construction will likely fall for 2011, as the permits issued continue to be low. P roperty tax revenues are based on preliminary information provided by the Pierce County Office of the Assessor Treasurer. Final estimates are not available until mid December of each year. As a result, the property tax revenue estimates are based on the best information available in the September or October timeframe when the budget is being prepared. All other revenues are estimated on an analysis of funds collected in the previous year and projections of future revenue trends. With the exception of passing a levy lid lift in 2006, since fiscal year 2002, property tax collections are limited to 1% over the previous year. Alone, property tax collections would present significant budget challenges for the Library. However, the Library collects revenues from new construction and other sources allowed by state law. New construction continued decreased significantly, from $859,000 in 2008 to $661,000 for 2009, and now $409,000 in This drop was expected and had been factored into the budgeting With exception to the Foundation, budgets for donations, gifts, or grants vary greatly from year to year and cannot be predicted accurately. These are reflected in year end actuals and in any mid year budget adjustments. The Government Finance Officers Association (GFOA) Best Practices recommends analyzing revenue trends and forecasts. Although it doesn t specify how many prior years to report, for discussing 2010 revenues the starting point is set generally at or after 2002 (some begin 2001), when state law was changed to provide only 1% increase in property taxes over the previous year. At the end of this chapter are two tables: one showing proposed revenues for 2010 along with budgeted revenues from 2005 through 2009, the other showing the same proposed revenues compared to actual revenues from 2003 through 2008 and projected 2009 revenues. Kids at the Kid s Corner Clubhouse with a book bin 2010 Budget Page 45 Pierce County Library System

46 For 2010, total new revenues are budgeted to increase by $11,581 over 2009, a 0.04% increase. This represents a mill rate of per $1,000 of assessed property value, an increase from 2009 s per $1,000. Revenues other than taxes decreased based on experience and trends. The Library budgets revenues from the Pierce County Library Foundation. Due to the cyclical nature of revenue receipts versus the regularity of expenditures, there will be temporary shortfalls in available cash (generally in April and October). To fund these shortfalls, the Ending Fund Balance and, if necessary, an inter fund loan from the Capital Improvement Fund will be used to finance these shortfalls. A small amount of money will be set aside in contingency to assist in paying the bills during shortfalls. More information on contingency is discussed in the Cash Flow Analysis section. TAXES $ 27,789,318 Local property taxes constitute over 96% of the 2010 revenues. The breakdown of these taxes is provided as follows: Property Taxes Current... $ 26,659,921 Property Taxes Delinquent... 1,066,397 Sale of Tax Title Property... 3,000 Private Harvest Tax... 50,000 Leasehold Excise Tax 10,000 TOTAL TAXES... $ 27,789,318 The total allowable levy (Property Taxes Current) is calculated by Pierce County Office of the Assessor Treasurer using statutory rates and limitations. A history of the tax base is provided in the following table: For Property Year Tax Base %Change $ 59,022,805, % ,085,405, % ,077,557, % ,990,993, % ,385,528, % ,306,548, % ,318,475, % ,377,319, % ,255,137, % ,025,182,627 This base includes the growth in assessed valuation (AV) of existing property in Pierce County and all new construction. For 2010, the estimated tax base to levy is just over $59 billion, which represents a 4.93% decrease from 2009 s assessed valuation. On November 3, 2009, during general elections, Fife residents overwhelmingly approved a measure to annex to the library system. These revenues will be received in Revenue Increases: State law allows the Library to increase its revenues by up to 1% over the previous year, so long as it does not exceed the 50 per $1,000 calculation, also set in state law. Voters restored the levy rate for 2007 to 48 cents. In November 2009 the Implicit Price Deflator (IPD, another limiter) was recorded at 0.848%. To collect 1% more than the previous year, the Board would need to override the IPD if less than 1%. In November 2009, the Board voted not to override the IPD, which means 2010 property taxes will be set at % of 2009 s collection. New Construction: New construction varies year to year, depending on property improvements generated by construction (such as new homes, apartments, etc.). For every $1,000 of new construction, the Library may levy at its current levy rate (44.33 for 2009). State law does not apply the 1% limit for revenues received from new construction. New construction has a significant effect on PCLS revenues, as the values can contribute between 2% and 4% of revenue growth. Below is a breakdown that shows new construction values for the past six years: 2010 Budget Page 46 Pierce County Library System

47 For New PCLS % of Year Construction Revenue Budget $ 759,965,065 $ 408, % ,494,356, , % ,789,938, , % 2007*... 1,769,575, ,401 *0.00% ,519,842, , % ,092,187, , % ,593, , % ,026,298, , % ,103, , % * New construction was not a factor for 2007 due to the levy lid lift being calculated at 48 per $1000 of the districts property value. Calculation of Mill Rate ( Millage ): The district s property value is used to calculate the levy rate of assessment (mill rate) of individual properties and the amount the Library will receive for regular property taxes. The statutory limit for taxes is $ per $1000 of assessed valuation. Recent mill rates were as follows (a graph is provided below that includes projected mill rates): For Calculated Year Mill Rate (projected) (projected) * * Voter approved. Revenue Calculation from Taxes: For budget purposes the Library applies a 96% collection rate on current property taxes and 4% of the forecasted collection of current taxes as delinquent taxes to be collected. The delinquency collection rate is based on previous years experience. For 2010, this ratio remains the same, reflecting that property owners paying taxes on time. The Library forecasts current tax revenue collections of $26,659,921 and delinquent tax collections of $1,066,397. Private Harvest Tax: Another source of revenue is the private harvest tax. Once a major source of revenues, this had been steadily declining between 1998 and 2003, with a resurgence since 2004, as seen in the following table, and then a drop to less than half in In 2010 the Library is projected to receive approximately the same as 2009 at $50,000. Year Private Harvest Revenue $ 50,000 (estimate) ,000 (projected) , , , , , , , , , , ,654 Other tax collections, but not discussed here, include sale of title property and leasehold excise taxes, totaling $13,000. CHARGES FOR SERVICES $ 65,000 Library charges for services include revenue from photocopying, Internet printers, meeting room fees, non resident fees, and fees for interlibrary loans Budget Page 47 Pierce County Library System

48 Photocopy Fees... $ 25,000 All branches provide photocopiers for public use. The fee of 10 per copy will remain in place for Printer Fees... $ 40,000 All branches offer Internet access and the availability of laser printers for patrons to print to. A 10 per page is charged. Library Use Fees... $ 0 Because of reciprocal borrowing agreements with two major library systems, Tacoma Public Library and Puyallup Public Library, the Library no longer budgets for non resident cards. LIBRARY FINES $ 555,000 Library fines are received from library customers paying for overdue books and other materials. All materials returned after the due dates are considered late and subject to fines. The daily fine for any item, whether videotape, DVD or book is Investment Income... $ 25,000 On a weekly basis, the Library invests any substantial amounts of excess cash available after calculating the immediate expenditure needs. This line item was decreased due to significantly low interest rates continuing in Foundation Donations... $ 130,000 Foundation Donations are budgeted based on funding commitments approved by the Foundation Board in the summer of Book Sale Revenue... $ 40,000 The Library sends surplus books to online retailers that sell materials on Amazon.com. A portion of the sales is forwarded to the Library. Revenues from online sales continue to grow, and is budgeted accordingly. Other Miscellaneous Income... $ 30,000 This includes refunds, pay telephone revenue, lost/damaged materials revenue, revenue from lost key cards, insurance settlements, jury duty fees received, etc. This category was budgeted the same for MISCELLANEOUS $ 225,000 Miscellaneous revenues include interest earned on investments, and revenues not included in any other account. Miscellaneous revenues from junk sales of assets, Friends and Foundation donations, and collection agency revenues will not be budgeted, but will be recorded in actuals or in mid year budget adjustments. 1 A study conducted in 2008 recommended, and implemented, fines for videos and DVDs be the same as books and other print materials. The Fines Feasibility Team concluded that customer service could be improved as a result. A fiscal study determined that there may be no net loss to the library, as revenues from fines had been increasing due to epay. We will monitor this in 2009 and make adjustments as needed Budget Page 48 Pierce County Library System

49 Table 9A General Fund Revenue (Final Budget) GENERAL FUND % CHANGE REVENUES BUDGET FINAL FINAL FINAL FINAL FINAL BUDGET 2009 TO 2010 TAX REVENUES Property Taxes Refunded $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 0% Property Taxes Current 15,302,063 16,310,240 24,418,249 25,542,879 26,440,367 26,659, % Property Taxes Delinquent 765, , ,730 1,021,715 1,057,615 1,066, % Sale of Tax Title Property 3,000 3,000 3,000 3,000 3,000 3,000 0% Private Harvest Tax 50,000 50,000 50,000 50,000 50,000 50,000 0% Leasehold Excise Tax 10,000 10,000 10,000 10,000 10,000 10,000 0% Subtotal $ 16,130,166 $ 17,025,650 25,457,979 26,627,594 27,560,982 28,639, % 895,484 (5.55%) 8,432,329 (49.53%) 1,169,615 (4.59%) 933,388 (3.51%) 11,581 (0.83%) OTHER REVENUES Indirect Federal Grants $ 5,000 $ 5,000 $ 5,000 0% Copier Fees $ 30,000 $ 25,000 $ 25,000 25,000 25,000 25,000 0% Printer Fees 20,000 25,000 25,000 25,000 40,000 40,000 0% Meeting Room Fees 4,000 4,000 4,000 4, % Library Use Fees 3,000 3,000 3,000 3,000 3, % Library Fines 450, , , , , , % Investment Income 30, , , , ,000 25, % Foundation Donations 70, , , , % Book Sale Revenue 10,000 15,000 15,000 20,000 40,000 40,000 0% Payment for Lost Materials 30,000 25,000 25,000 25,000 25,000 25,000 0% Fee for Lost Library Cards 10,000 10,000 10,000 5,000 5,000 5,000 0% Subtotal $ 587,000 $ 667,000 $ 887,000 $ 1,047,000 $ 1,066,755 $ 850, % TOTAL REVENUES $ 16,717,166 $ 17,692,650 $ 26,414,979 $ 27,674,594 $ 28,627,737 $ 28,639, % The Human Resources Department responds to the changing needs of internal and external customers while advancing the strategic goals and interest of the Library system. The Human Resources Department is a trusted resource and strategic partner for employees and management. Mission & Vision, Human Resources 2010 Budget Page 49 Pierce County Library System

50 Table 9B General Fund Revenue (Actuals) {UPDATED PRIOR TO PRINT} GENERAL FUND * REVENUES ACTUALS ACTUALS ACTUALS ACTUALS ACTUALS ACTUALS PROJECTED TAX REVENUES Property Taxes Refunded $ 0 $ 0 $ 0 $ 0 $ 0 $ Property Taxes Current 14,955,753 15,639,246 16,494,499 24,616,165 25,604, Property Taxes Delinquent 564, , , , , Sale of Tax Title Property 3,335 4, ,379 5, Private Harvest Tax 134, , , ,198 66, Leasehold Excise Tax 13,858 15,885 14,109 20,921 21,904 Subtotal $ 15,671,526 $ 16,317,194 $ 17,151,219 $ 25,265,515 $ 26,351, ,668 (4.12%) 834,025 (5.11%) 8,114,296 (47.31%) 1,085,545 (4.30%) OTHER REVENUES Indirect Federal Grants $ 50,294 $ 1,218 $ 37,292 $ 23,582 $ WA State Library LSTA 55+ Grant 386 9, Reforestation Taxes 9,193 4,706 14,202 12, FEMA Administration Fees Contract Fees Cities 810 3, Governmental Service Fees 54,511 47, Record Services Copier Fees 26,927 25,849 23,207 23,455 24, Graphics Services Charge 16,683 11,276 10,139 13,838 9, Printer Fees 24,007 28,781 29,741 32,333 43, Meeting Room Fees 5,490 5,981 5,288 6,109 4, Library Use Fees 3,114 2,721 2,848 1,765 1, Interlibrary Loan Fees Library Fines 467, , , , , Investment Income 51, , , , , Interest State Forest Fund Other Interest Earnings Key Peninsula Lease ,634 1, Foundation Donations 80,519 95, ,493 60, , Foundation Reimbursement 70 1, Friends' Donations 18,345 15,267 17,295 15,043 16, Friend s Reimbursement 19,752 14, ,161 31, Donations Other 9,185 6,582 16, Donations Building Fund Tuition Assist. Donations 7,791 4, Sale of Scrap and Salvage 314 8, ,698 3, Book Sale Revenue 24,989 20,369 9,567 14,472 37, Miscellaneous Revenue 14,630 3,081 2,232 18,607 6, Payment for Lost Materials 27,713 29,819 33,937 28,657 25, Fee for Lost Library Cards 6,693 7,356 7,003 5,902 7, COBRA 2% Administration Fee Unclaimed Property (1,468) 274 (0) Collection Agency Revenue 7,380 6,781 8,443 10,208 10, Jury Duty Reimbursement Prior Year s Refunds ,429 3,030 3, Sale of Fixed Assets 197,623 61,732 33,180 88, ,447 Subtotal $ 1,064,223 $ 1,037,872 $ 1,165,101 $ 1,353,135 $ 1,196,061 TOTAL REVENUES $ 16,735,749 $ 17,355,067 $ 18,316,320 $ 26,618,650 $ 27,654,568 $ XX,XXX,XXX * Projected 2009 numbers are entered just prior to final printing; they are not the final numbers as reported in April of the following fiscal year Budget Page 50 Pierce County Library System

51 Figure 8 Source of Revenues Taxes 97.0% Other 3.0% Charges for Services 0.2% Fines 1.9% Miscellaneous 0.8% The above pie chart shows the breakdown of 2009 revenues by category. The Library s majority of revenues from property taxes is between 95% and 97%. For 2010, the proportion is 97%. It Started as a Thought Mar 09 It started as a thought that blossomed into ideas, That went communicated amongst a people, Who formed ideals that then broke into branches, From which formed factions. And those factions argued and started to fight, Trying to decide who was more right, And war broke out, led by those who wanted it; Fought by those who don t give a shit. And when the dust settled, The land covered with broken pieces of metal, It was apparent whose idea of ideal had won, At the point of a gun. We fight like animals, Yet argue we re the pinnacle of evolution, And these wars are said to be social revolution. This cycle has been eternal since the dawn of man And there are those who try to change this plan But the easiest way to make change is to use force War to make peace? Why can t man just discourse? We fight like dogs with no one around to police us Not making progress, we ve only ever made Congress Tyler Coghill Harrison Prep, 12th Grade 2009 Our Own Words 11th & 12th Grade Poetry Winner 3rd place Deputy Director Georgia Lomax Speaking at the author event 2010 Budget Page 51 Pierce County Library System

52 EXPENDITURES REPLACED IN DECEMBER Sumner Library, Renovated 1995

53 EXPENDITURES Table Expenditure Summary GENERAL FUND % CHANGE 2009 EXPENDITURE SUMMARY FINAL (12/08) BUDGET FINAL TO 2010 Personnel $ 20,275,222 $ 18,387, % Maintenance & Operations 3,316,862 3,063, % Materials 4,589,910 4,612, % Subtotal 28,181,994 26,063, % VOLUNTARY RETIREMENT INCENTIVE PAYOUTS 336,300 One time only ELECTION SET ASIDE 80,000 80,000 CONTINGENCY 286, , % TRANSFERS TO CIF 572,555 1,872, % Subtotal 938,832 2,575, % TOTAL EXPENDITURES $ 29,120,826 $ 28,639, % EXPENDITURE ASSUMPTIONS F or the 2010 budget process, Department Heads were given budget worksheets for developing their budgets and were expected to recommend efficiencies and reductions while maintaining service priorities and levy promises. Department Heads had leeway to fund personnel and purchases based on what they believed necessary to sustain successful departments. After developing their proposed budgets, Department Heads met with the Executive Director, Deputy Director, and Director of Finance & IT to present their budgets. Current funding is a limiting factor for serving our growing district. Cost of medical benefits usually rise faster than inflation, at times by more than 10%. For the past 5 years, retirement rates had doubled; however, in 2009 and 2010, DRS has dropped the library s contribution for 2 years. In 2012, the rates will begin to escalate again, this time heading upwards of 12%. Buildings are showing their age and continue to need considerable resources for upkeep. The CPI U, used for calculating the Cost of Living Adjustment (COLA), was recorded at 0.4%. However, the 2010 COLA is pending of Labor Negotiations. For Materials, the Library s goal remains at 16% of revenues, continued for However, to save costs, the processing fees have been incorporated into the 16% materials budget. PCLS budget is made up of three major areas of expenditures that usually account for over 95%: Personnel 67.2% 67.9% 62.8% 69.3% 69.6% 64.2% Maint. & Ops 13.8% 13.2% 11.0% 11.4% 11.4% 10.7% Materials *16.0% 16.0% 16.0% 16.1% 15.8% 16.1% TOTAL 97.0% 97.1% 89.8% 96.8% 96.8% 91.0% * Excludes the $400,000 carry forward from Because significant funds are moved to the Capital Fund and set aside for future operations, 2007 had a one time large Capital transfer that caused the total percentage to be less than 90% is similar in that significant amounts are transferred to the Capital fund to pay for Fife and University Place Budget Page 53 Pierce County Library System

54 Table Expenditures By BARS Category GENERAL FUND % CHANGE 2009 EXPENDITURES FINAL (12/08) BUDGET FINAL TO 2010 PERSONNEL 5.11.xx Salaries & Wages $ 15,059,993 $ 13,595, % 5.12.xx Overtime Wages 20,000 19, % 5.2x.xx Employee Benefits 5,195,229 4,773, % Subtotal 20,275,222 18,387, % MAINTENANCE & OPERATIONS 5.31.xx Supplies 342, , % 5.32.xx Fuel 55,000 60, % 5.35.xx Small Tools and Minor Equipment 384, , % 5.41.xx Professional Services 756, , % 5.42.xx Communications 278, , % 5.43.xx Travel 100,930 59, % 5.44.xx Advertising 36,730 32, % 5.45.xx Operating Rentals/Leases 134, , % 5.46.xx Insurance 160, , % 5.47.xx Utilities 315, , % 5.48.xx Repair and Maintenance 571, , % Registrations & Tuition Assistance 85,612 54, % x Miscellaneous 81,550 73, % 5.51.xx Intergovernmental 14,000 7, % 5.82.xx Interest Expense 0 0 0% Subtotal 3,316,862 3,063, % MATERIALS 5.34.xx Materials 4,589,910 4,612, % OTHERS 5.2x.xx VOLUNTARY RETIREMENT INCENTIVE PAYOUTS 336,300 One time only ELECTION SET ASIDE 80,000 80,000 0% CONTINGENCY 286, , % TRANSFERS TO CIF 572,555 1,872, % Subtotal 938,832 2,575, % TOTAL EXPENDITURES $ 29,120,826 $ 28,639, % The Communications Department directs the Library s strategic communications and image, increasing and enhancing public awareness by consulting with customers, conducting market research and producing a variety of media. The Communications Department consistently and effectively positions the Pierce County Library System as a highly valued resource. Mission & Vision, Communications 2010 Budget Page 54 Pierce County Library System

55 PERSONNEL $ 18,387,792 Personnel costs account for nearly 70% of the expenditures and pay for staffing the Library to meet its mission and goals. The total change for 2010 from 2009 is 9.31%. Please see Table 12 for a detailed listing of personnel costs. Department Heads used the mid year budget of the current fiscal year to construct personnel costs for the following fiscal year. Salaries and Wages... $ 12,920,865 Staffing includes all full and part time personnel located in all locations. For 2010, Salaries and Wages include $12,000 for Tuition Assistance. THE MAJORITY OF THIS SECTION IS PENDING LABOR NEGOTIATIONS. July 2010 June 2011: 5.310% July 2009 June 2010: 8.310% July 2008 June 2009: 8.310% July 2007 June 2008: 5.940% July 2006 June 2007: 3.065% July 2005 June 2006: 2.195% However, the State Actuary s Office estimates that rates will skyrocket to nearly 12% in Budgeting for benefits when retirement contributions had doubled was a major factor in prior fiscal years. The following chart depicts the Library s total budgeted benefit costs since 1995 and projected through (UPDATE CHART) The Seattle Bremerton Tacoma June to June CPI U reported in July 2009 was at 0.4%. The expiring labor agreement has a ceiling clause of 2%. However, due to bargaining a new contract, the COLA is not set at time of this document s printing. Please see Table 13 on the next page for staffing of departments. 6,000 5,000 4,000 3,000 2,000 Benefits Budgeted Costs (In Thousands) Overtime... $ 19,350 Overtime costs are established by Department Heads to plan for costs associated with working beyond the 40 hour week. Library management has continued to keep overtime costs low and reduced it for Benefits... $ 4,773,199 Benefits include medical and dental costs, and retirement, and unemployment. The expiring labor contract has the Library paying up to 10% more in individual health care benefits over the previous year for eligible employees. However, due to bargaining a new contract, the benefits are not final at time of this document s printing. The 2009 Legislature passed retirement rates for Rates have had a major impact to the Library s budget, as shown in the following table. Note that rates have decreased due to reduced contribution levels enacted by the Legislature during the 2009 legislative session. 1, On the following page are two charts, one for personnel detail expenses, and the other showing staffing numbers. Toddler at the Parkland Library, ready to read a foot of books Budget Page 55 Pierce County Library System

56 Table Personnel Detail GENERAL FUND % CHANGE 2009 PERSONNEL FINAL (12/08) BUDGET FINAL TO Salaries & Wages... $ 14,202,808 $ 12,920, % Additional Hours...654, , % Shift Differential...190, , % Tuition Assistance Program...12,000 12,000 0% Overtime Wages...20,000 19, % Industrial Insurance...116, , % Medical Insurance... 2,474,651 2,184, % FICA... 1,101, , % Retirement... 1,196, , % Dental Insurance...252, , % Other Benefit... 3, Life and Disability Insurance...22,719 22, % Unemployment Compensation...30, , % Uniforms...1,300 1,300 0% TOTAL PERSONNEL $ 19,168,513 $ 18,387, % Table PCLS Staffing (UPDATE PRIOR TO PRINTING) TOTAL TOTAL # OF FTEs DEPARTMENT FTE STAFFING WITH MLS/MLIS* Branch Services X.XX... X.XX Collection Services Department X.XX... X.XX Communications Department X.XX... Community & Outreach Services Department X.XX... X.XX Deputy Director s Office X.XX... X.XX Executive Director s Office X.XX... X.XX Facilities Management Department X.XX... Finance Department X.XX... Fund Development Department X.XX... Human Resources Department X.XX... Information Services Department X.XX... X.XX Information Technology Department X.XX... Youth Services Department X.XX... X.XX TOTAL FTE COUNT XXX.XX XX.XX Change from previous year 0.76 ( 0.26%) X.XX (X.XX%) X.XX ( X.XX%) *MLS or MLIS: Masters of Library Science or Library Information Science graduate degree, a requirement to hold the title Librarian Budget Page 56 Pierce County Library System

57 MAINTENANCE & OPERATIONS $ 3,063,756 Supplies... $ 323,810 The Supplies category includes office and operating supplies, custodial supplies, maintenance supplies, materials processing supplies, audiovisual and book processing supplies, supplies for the Summer Reading Program, and audio/visual replacement parts. The amount budgeted is 5.32% ($9,990) less than budgeted in The budget continued to increase due to increased paper costs and toner usage. Fuel... $ 60,000 Fuel consists of charges for gasoline, diesel, and propane. There was a 9.09% ($10,000) increase due to fuel rate increases of gasoline. Smalls Tools & Minor Equipment... $ 392,700 Minor equipment includes furniture, computers, printers, scanners, and software. This category {increased} by 2.17% ($52,350), due to needing replacing furnishings in terrible condition. Professional Services... $ 404,480 This category includes services provided by a private business or governmental agency. In addition to the services of attorneys, accountants, and consultants, this classification includes software consultants, interpreters, trainers, maintenance related services, etc. There was a decrease of 46.52% ($259,300). Communications... $ 258,800 Communications include all Library mailings (postage, Federal Express, UPS, courier services); voice communication service (monthly service and long distance, TDD, and cellular); costs associated with the leased data lines connecting all Library computers together and to the Internet; leased telephone lines used in support of Internet access; and costs associated with alarm monitoring. Communications by 7.17% ($10,425). Travel... $ 59,766 This includes reimbursement to employees and Board of Trustees for use of personal automobiles on Library business, and travel expenses associated with attendance at training and continuing education events, conferences, and seminars. The budget is 40.78% ($13,264) less due to a 65.1% reduction of reimbursable travel. Oncorhynchus Kisuch The salmon picture on the wall, Mother loves it, but the profiles of the three grey and puce colored fish lie flat against that yellow wall, each staring at me with one protruding eye. Why would anyone want that there? Perhaps I could set them free. Take them to the river and dump them in. Then they wouldn t be trapped in that silver framing from 84 and I wouldn t have to look at them anymore. So orderly. Unwild. Trapped under a quarter inch thick piece of glass an inch from the border one on top of the other, with three inches in between. And they all swim to the left. With their mouths open. Rachel Webber Emerald Ridge HS, 12th Grade 2009 Our Own Words 11th & 12th Grade Poetry Winner 2nd place Advertising... $ 32,650 This includes newspaper advertising for library activities, employees and Board of Trustees vacancies, requests for bids, and placing ads in phone books, and other marketing. The amount budgeted is 11.11% ($2,500) less than in Operating Rentals/Leases... $ 237,800 This includes leases of copy machines, and the DuPont lease and tentative Surprise Lake lease. For 2010, this amount budgeted increased by 76.41% ($85,900) Budget Page 57 Pierce County Library System

58 Insurance... $ 144,000 This includes all insurance for the Library s real and personal property, vehicles, fidelity, errors and omissions, employment practices, umbrella plan, commercial crime, and underground storage tanks. Due to switching insurance carriers (from Philadelphia Insurance to the Canfield public entity pool) the Library s good track record, Insurance for 2010 decreased from 2009 by 10%. Utilities... $ 359,000 Utilities include electricity, natural gas, water, sewer, and refuse collection for all Library facilities. In 2003, the Facilities Management Department implemented significant energy conservation projects throughout the system which continue to result in dramatic year to year offsets of significant rate increases. The amount budgeted is 13.97% ($44,000) more than in Repair & Maintenance... $ 656,100 This category includes commercial repair of the Library s office equipment; fees for the maintenance and/or service contracts for the Polaris ILS and related hardware; telecommunications system, personal computer and peripheral maintenance, elevator service, heating, ventilation and air conditioning preventive maintenance; and unscheduled commercial repairs, septic tank cleaning, and pest control. The budget {decreased} by 14.76% ($79,400) from Training... $ 54,500 Training includes costs related to attendance at classes, seminars, and conferences. The training budget is 36.34% ($54,500) less than Intergovernmental... $ 7,000 This category includes costs associated with fees paid to other governmental agencies. The amount budgeted for 2010 is 50% less than 2009, and will pay for concluding the financial audit. Capital Improvement Fund. When interfund loans are made, the Library is required to pay interest to the Capital Improvement Fund. The interest anticipated for 2010 continues to be low, if any, due to having enough in the ending fund balance to fund the majority of the shortfall. Miscellaneous... $ 73,150 This category includes memberships in ALA, WLA, and PNLA, and dues for local Chambers of Commerce and other groups; sales tax payable on photocopies/printers and graphics sales, use tax on out of state purchases, and sewer assessments/surface water management fees. It also includes fees for driving records requests, bad debt expenses/bank fees, and charges associated with the collection of fines, and other charges at the branches. This category decreased by 10.30% ($10,300) from My Cat I taught my cat to clean up my room, To use a bucket, brush and broom, To dust my books and picture frames, And pick up all my toys and games. She puts my pants and shirts away, And makes my bed, and I should say, It seems to me it's only fair. She puts away my underwear. In fact, I think she's got it made. I'm not too happy with our trade. She may pick up my stinky shoes and socks. But I clean out her litter box. Diana Choi Curtis Junior HS, 9th Grade 2009 Our Own Words 9th & 10th Grade Poetry Winner 1st place Interest Expense... $ 0 To cover cash shortfalls, when cash on hand is less than expenditure needs due to cyclical nature of revenue collection, the Library borrows from the 2010 Budget Page 58 Pierce County Library System

59 Table Maintenance & Operations Detail GENERAL FUND % CHANGE 2009 MAINTENANCE & OPERATIONS FINAL (12/08) BUDGET FINAL TO Office/Operating Supplies... $ 196,900 $ 194, % Custodial Supplies...35,000 40, % Maintenance Supplies...45,000 40, % A/V Processing Supplies...37,000 25, % Book Processing Supplies...26,600 24, % Graphics Supplies Sum. Reading % A/V Replacement Parts...1, % Fuel...55,000 60, % Minor Equipment...66,200 58, % Furnishings...54,670 75, % PC Hardware...206, , % Printers...30,000 30,000 0% Software...27,500 33, % Professional Services...507, , % Legal Services...25,000 20, % Collection Agency... 33,600 new Graphics Sum. Reading % Resource Sharing Services...18,800 19, % Bibliographics Services...52,000 45, % Printing and Binding...5, % Vendor Processing Services...68, % Inter Library Loan Lost Item Charges...1,200 1,200 0% AV Processing Services...79, % Postage...66,300 46, % Data Lines...212, ,500 0% Travel...61,130 21, % Mileage Reimbursements...39,800 38, % Advertising...36,730 32, % Rentals/Leases...134, , % Insurance...160, , % Electricity...230, , % Natural Gas...20,000 20,000 0% Water...20,000 28, % Sewer...20,000 20, % Refuse...25,000 26, % General Repairs/Maintenance...204, , % Contracted Maintenance...362, , % Maint. Telecomm Equipment...5,000 2, % Registrations...85,612 54, % Dues and Memberships...32,300 19, % Taxes and Assessments...32,000 32,000 0% Licenses and Fees...14,600 18, % Miscellaneous...2,650 2,650 0% Intergovernmental...14,000 7, % Interest on Interfund Debt % Total Maintenance & Operations $ 3,316,862 $ 3,063, % 2010 Budget Page 59 Pierce County Library System

60 MATERIALS $ 4,612,291 Printed materials and non printed materials or media are provided to Library customers. Materials include books, DVDs, talking books, and other formats. Funds are allocated by the Collection Services Department into the appropriate categories, after establishing the overall Materials budget. The Materials budget is set at 16.10% (includes processing fees moved from Maintenance & Operations) of new revenues for Below depicts the historical funding of the Materials: 20% 19% 18% 17% 16% 15% 14% 13% 12% 11% 10% Figure 9 Materials Budget History 12.6% 13.0% 12.1% 14.1% 16.3%16.3% 16.0% 15.3% 15.5% 18.4% 16.0%15.9% 16.1% 15.8% 16.1% *Projected *2010 The 2005 Materials budget was much higher, by $400,000, due to carrying forward 2004 unexpended funds (the catalog system replacement project delayed purchasing of materials). Figure 10 shows PCLS Materials budget per capita, an important factor in considering how much is spent on providing books for the district the library serves. Figure 10 Materials Expenditures Per Capita History (Actuals through 2008) $10.00 $9.00 $8.00 $7.00 $6.00 $5.00 $4.00 $2.85 $3.06$3.30$3.53 $3.00 $2.00 $1.00 $0.00 $4.88 $4.76 $4.87 $4.62 $4.35 $6.15 $5.68 $8.55$8.60 $8.45 $8.14 *Projected *2010 While some library systems have a lower percentage to revenues, PCLS records and analyzes this measure by considering the per capita spending for the service district. Below shows recent comparisons with other library systems budget performance by capita: Figure Materials Expenditures Per Capita Comparison King County Library Seattle Public Tacoma Public Library Pierce County Library Sno Isle Regional North Central Regional Timberland Regional Spokane County Fort Vancouver Regional Yakima Valley Regional Kitsap Regional Spokane Public Mid Columbia Library $0 $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 $11 Source: Washington State Library Collection Services provides materials to our Library and the people of our communities, opening a world of information and imagination. Collection Services anticipates and provides customer driven acquisitions in an adaptive and enthusiastic environment. Mission & Vision, Collection Services In 2006, PCLS reported 7th out of 13 libraries in the chart above. For 2008 the Library reported 4th. The 2010 materials expenditure per capita is estimated to be $8.45 per capita. Details of the 2010 Materials budget are provided in Table 15 on the following page Budget Page 60 Pierce County Library System

61 Table Materials Detail {UPDATE IN DECEMBER} GENERAL FUND % CHANGE 2009 MATERIALS FINAL BUDGET FINAL TO Adult Materials... $ 1,237,910 $ X,XXX,XXX % Serials...40,000 % Periodicals...107,000 % Juvenile Books...697,000 % Professional Collection...32,000 % International Collection...165,000 % Audiovisual Materials Adult... 1,165,000 % Audiovisual Materials Juvenile...155,000 % Reference Materials...160,000 % Electronic Info Sources...746,000 % Reference Serials...55,000 % Gifts Materials...30,000 30,000 0% TOTAL MATERIALS $ 4,464,008 $ 4,612, % OTHER EXPENDITURES $ 2,575,479 Voluntary Retirement Incentive Payouts... $ 336,300 To offset the costs of reductions in force, the Library offered a one time program of voluntary retirement to eligible employees. By the end of the eligibility period (November 20, 2009), 19 employees have agreed to voluntarily retire. Their last day will be no later than December 31, Payouts will be made in the January paycheck, out of the 2010 fiscal year budget. Election Set Aside... $ 80,000 Continuing from 2007 and for 5 years, the Library set aside $60,000 to $80,000 annually towards the next levy lid lift, presumably several years from now. The goal is to achieve $300,000 to conduct a potential levy lid lift election within the next five to six years. Costs for the election include ballot preparations, postage, professional services, office supplies, etc. Contingency... $ 286,393 The Library uses contingency as a floating variable to calculate cash solvency to pay April s bills two fiscal years ahead. For 2010, this means that enough contingency money is being set aside to plan for paying April 2012 s bills. Contingency is set at about 1% of revenues, and may fluctuate year to year. A more in depth discussion of this is available in the Cash Flow Analysis section. Transfers to Capital Imp. Fund... $ 1,872,786 Some funding for the Capital Improvement Plan comes from the General Fund. For 2010, the CIF transfer is set at 2% of revenues to pay for anticipated capital improvement projects. For 2010, significant projects need funding, including University Place and Fife. The Library has opted to pay for these capital commitments without seeking bonds or lines of credit. This saves at least $300,000 in interest and fees. Teens at the South Hill Library 2010 Budget Page 61 Pierce County Library System

62 Transfer to CIF Year Budget Actual $ 1,872, , *$ 1,169, , ,503, ,128, ,382, , , , ,915, , , , , , , , , , , , , ,836 * Projected for The projected amount in 2009 included savings from the mid year budget process. The chart below shows the Capital transfers from 1998 through Thousands $2,500 $2,000 $1,500 $1,000 $500 $0 Figure 12 CIF Transfer History (Actuals Through 2008) $827 $699 $ $427 $ $ $ $1, $ $1,503 $1, $1,150 $1,873 *Projected 2009 proj 2010 budget Forget The things I want most slip away, Along with the errors from yesterday. The shameful events flood me with regret, Those I can t seem to forget. Haunting words come back with a sting, And I lose control of what s happening. My mind is playing a game I only seem to lose, The battle s outcome wasn t mine to choose. It seems like I ve done it all before, And each time it hurts more and more. I can t leave it all behind, The bad wants to stay to tease and remind. All the happy memories are fading with the sun, And once again the battle is done. Next time I know I ll do better, For I ll cling to what I d die to remember. If it s a fight so be it. This time I won t quit. While some of the good fades away, I know who I am and that will stay. Emily Tomczak Lighthouse Christian School, 7th Grade 2009 Our Own Words 7th & 8th Grade Poetry Winner 2nd place 2010 Budget Page 62 Pierce County Library System

63 GENERAL FUND BALANCE Eatonville Library, Built 1995 REPLACED IN DECEMBER

64 GENERAL FUND BALANCE Table General Fund Balance Summary GENERAL FUND BALANCE SUMMARY ACTUALS PROJECTED BUDGET Beginning Fund Balance, January 1 $ 9,920,417 $ 10,895,897 $ 11,264,025 INFLOWS Use of Fund Balance Total of Revenues 27,654,588 28,493,675 28,639,318 Total of Inflows 27,654,588 28,493,675 28,639,318 OUTFLOWS Total of Expenditures 25,175,617 26,975,672 26,400,139 Budgeted Transfer to Capital Fund 553, ,874 1,872,786 Mid year Savings Transfer to Capital Fund 950, ,000 0 Year end Savings Transfer to Capital Fund Total of Outflows 26,679,109 28,125,546 28,639,318 Net of Total of Inflows and Outflows 975, ,129 0 Ending Fund Balance, December 31 (estimated) $ 10,895,896 $ 11,264,025 $ 11,264,025 Ratio of Fund Balance to Next Year s Revenues 38.2% 39.3% 37.2% GENERAL FUND BALANCE SUMMARY The Library may budget funds out of the General Fund balance for special purposes. This includes charging expenditures to the General Fund balance, and identifying special funds that carry forward from one fiscal year into the next. This complies with Board Policy 3.15, Fiscal Management Policy, which states that fiscal year carryovers of funds within the General Fund are limited in nature, and are used for special purposes that are related to grants, gifts/donations, and collection materials. By default, all sources of unexpended revenues are released into the General Fund at year end, unless the Board takes action to identify and approve carry forward funds. GFOA STATEMENT ON GENERAL FUND BALANCE The General Fund Balance is a key tool for managing the Library s cash flow. Should the General Fund Balance get too low, not enough funds are available to pay for the first four to five months of each year (until tax collections are received), requiring the Library to borrow from the Capital Fund or establish a bank line of credit. Recently, the Government Finance Officers Association (GFOA) released an updated policy statement on cash reserves (Fund Balance), approved by its Executive Board during 2009 s GFOA conference held in Seattle: Furthermore, a government s particular situation often may require a level of unrestricted fund 2010 Budget Page 64 Pierce County Library System

65 balance in the general fund significantly in excess of this recommended minimum level [2 month s worth]. In any case, such measures should be applied within the context of long term forecasting, thereby avoiding the risk of placing too much emphasis upon the level of unrestricted fund balance in the general fund at any one time. GFOA, October 2009 This has been consistent with the Library s practice since Initiative 747 was passed in The Library s fund balance is a critical resource for paying bills during normal intra year shortfalls, and has by policy used it in long term forecasting out at least 10 years. GFOA recommends a Fund Reserve policy (which was incorporated into the Board s recently amended Fiscal Management Policy) to include the following 5 factors: 1. Predictability of revenues and the volatility of expenditures higher levels may be needed if there are unpredictable fluctuations in revenues or expenditures are volatile. The Library has recently experienced major, unpredictable volatility of property tax revenues and interest rates. 2. Perceived exposure to significant one time outlays (e.g., disasters, state budget cuts, immediate capital needs). The Library s policy has a disaster provision should emergency circumstances warrant use. However, the Library has not budgeted cash reserves specifically for an emergency disaster. Instead, it will make timely assessments of whether cash is required, or whether other means may be available to maintain payments for operations until emergency circumstances are mitigated. 3. Potential drain upon general fund resources from other funds. I.e., deficits in other funds may require that a higher level of fund balance be maintained. The Library s only other major fund is the Capital Fund. It is used to plan and pay for major projects related to maintaining or improving the Library s capital assets. The Library s Fiscal Management policy approves funding for capital projects through operating budget transfers, unanticipated savings, and through other sources, for example UP Capital Campaign and investment interest. When the Capital Fund is depleted, the Library can t borrow from it to pay for operations (see Liquidity, below). For 2010, we project the capital fund to deplete below $100, Liquidity (i.e., disparity between when financial resources become available to make payments and the average maturity of related liabilities may require a higher level be maintained). The Library requires 4 to 5 months of fund reserves, at minimum, to pay its bills until the large property tax revenues are received in early May and November. 4 months equates to 33% and 5 months equates to 42%. For 2010, the ratio is 37.2%, which falls acceptably within the 33% to 42% range. 5. Commitments and assignments for a specific purpose may require higher than normal levels. The Library set aside commitments as follows: o o $360,000 to conduct the next levy lid lift, projected for 2015 or Maintain services to last through about three years prior to a levy lid lift. Given a levy lid lift is still out by 5 or 6 years, monies to maintain services would not begin being used until 2012 or The Library s Fiscal Management Policy, and specifically its directives on usage and planning of cash reserves, conforms to GFOA s most recent 2010 Budget Page 65 Pierce County Library System

66 statement on fund balance. The Library has been practicing to this most recent update since Figure 13 General Fund Ending Fund Balance $12,000 $10,000 $8,000 Figure 14 Ending Fund Balance as % of Year End Actual Revenues 45% 40% 35% 30% 25% 20% Thousands $6,000 15% 10% $4,000 $2,000 $0 *Projected *2009 *2010 Figure 13 shows the record of the ending fund balance, estimated at reaching nearly $11.3 million by year end From a cash flow perspective, this is adequate to pay bills in the first four months without having to borrow from any other funding sources. The General Fund s ending balance as a percentage of each year s revenues from 1995 through 2010 averaged 26.4%. In 2009, that percentage was 35.5%. The Library s goal is for the ending fund balance to pay for intra year cash shortfalls and sustaining operations until the next levy lid lift. Many factors affect fund balance planning, including use for sustainability, which necessitates a high amount of cash to operate for several years when revenues lag behind cost of operations. Figure 14 shows the percentage of the year end actual revenues to ending fund balance. 5% 0% *Projected *2009 *2010 Use of cash reserves (Fund Balance)... $ 0 When the Library developed the budget for moneys provided by the 2006 Levy Lid Lift, the challenge was to sustain operations for six years. Because revenues increase 2% to 4% per year, and cost of operations outpaces that at 4% to 6%, the Library built cash reserves to balance budgets in future years. In Figure 13, the large cash increase from 2006 to 2007 was due to the Library setting aside $3.77 million from the Levy Lid Lift, adding to the $6 million cash at 2006 end. In 2009 the Library budgeted cash to pay for operations; however, during the mid year budget process managers offered savings to preclude cash use. Further, with a levy lid lift at least 5 years away, cash will not be used until the Library is nearing a levy lid lift. We manage information and provide access to the Library and the community. Information Technology is a trusted technology leader, promoting and supporting change that meets the customer needs. Mission & Vision, Information Technology 2010 Budget Page 66 Pierce County Library System

67 DEBT SERVICE REPLACED IN DECEMBER South Hill Library, Built 1990

68 DEBT SERVICE DEBT SERVICE In 1986, the voters passed a $28.9 million bond levy to construct new library facilities, including the purchase of building sites and the acquisition of furniture and equipment. It also included funds to remodel/renovate existing library facilities throughout the Library and purchase books and non print materials. Bonds were issued in 1986 ($18 million), ($8 million), and 1992 ($2.9 million). In 1995, a portion of the 1986 and issues was refinanced; the value of this refunding was $6.93 million. With the payment of principal and interest in December 2002, the entire debt was retired. Thus the Library continues to carry no debt. The Library will continue to collect delinquent tax collections on previous years tax levies for debt service. Upon Board of Trustees approval, these funds may be deposited into the Capital Improvement Fund or the General Fund. The Library began a Facilities Master Planning project in late 2008 which will conclude in January This project determined the needs of services and facilities for the next 20 years (3030). Recommendations may ensue for bonds sometime in the near future, in which case the Debt Service Fund may become active. Lost Children I see the children laying there With no tears, They sigh. Their days counting down While I live on. With a sigh They close their eyes. With one last breath They say goodbye, Weeping families cry and cry While the children die. They are braver then I Dying of disease While I am fine. No tears running down their faces Only mine. Its not their time Nor is it mine, But they are lost While I am fine. Cheyenne Robertson Mann Middle School, 8th Grade 2009 Our Own Words 7th & 8th Grade Poetry Winner 1st place 2008 Reading into Spring Contest Winner 2010 Budget Page 68 Pierce County Library System

69 CAPITAL IMPROVEMENT FUND REPLACED IN DECEMBER DuPont Library, Opened 2004

70 CAPITAL IMPROVEMENT FUND SUMMARY The Capital Improvement Fund (CIF) was established in 1998 as a mechanism to fund large projects or equipment purchases, which may cross fiscal years. In order to receive an allocation through the Capital Improvement Fund, a project must be approved and be included in the Capital Improvement Plan (CIP). The following criteria must be met for a project to be considered in the CIP: The value of the asset/project/service is equal to or greater than $5,000; and Has a useful life equal to or greater than three (3) years. A major repair or maintenance project can be included in the CIP if it meets the above two criteria and the project increases capacity and/or extends the original useful life of the asset. Additionally, ongoing maintenance as a part of a system wide project or smaller capital items, beneath the threshold needing to be purchased as a larger group, can be aggregated into largervalue capital improvement projects. Department Heads submitted estimates according to when the projects would occur, whether they were multiyear projects, and more detailed funding breakdowns. Prior to the 2009 budget, the Library allowed capital projects to carry forward funds from one fiscal year to the next. For 2010, the Library did not carry forward projects. Instead, Department Heads were allowed to resubmit projects for appropriate funding. The Capital Improvement Plan and its corresponding budget will be reviewed mid year in 2010 and revised as needs and funding dictate. FINANCING SOURCES Funding available for the Capital Improvement Plan comes from four sources: monies already in the Capital Improvement Fund, monies earmarked to be transferred from the General Fund as budgeted, monies transferred from the General Fund due to unanticipated revenues and savings, and other sources such as fund raising. At the end of 2009, it is estimated that the Capital Improvement Fund balance will be approximately $1.5 million. Adding monies to be received in 2010 from investment income and transfers from the General Fund the total available is expected to be approximately $3.7 million. A Library Foundation Capital Campaign for the University Place library is underway. Its original goal is to raise $750,000 for this library, spread over a five year period. As of October 2009, it is expected to provide the Library $300,000. The amount transferred to the library is currently set at $600,000 between 2010 and 2013 (a portion of the $750,000 is used for other costs). By default, the Capital Improvement budget uses its capital fund cash balance to pay for projects that exceed revenues. For 2010, use of cash balance is estimated at $1,436,357 to balance the Capital Improvement budget. Summary of New Revenue Sources Operating budget transfer (2%)... $ 582,943 UP Capital Campaign distributions ,000 University Place & Fife commitments... 1,300,000 Interest Earnings... 3,800 TOTAL $ 2,186,743 As per the Library s Fiscal Management policy, the Library may consider transferring additional revenues from the General Fund, such as unanticipated savings and revenues Budget Page 70 Pierce County Library System

71 2010 CAPITAL IMPROVEMENT PLAN $ 3,623,100 CIP budgets fluctuated as shown in the chart below. The average CIP budget for 2000 through 2010 is $1,362,859. Thousands $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 $ Figure 15 CIP Budget History (Excludes Carry Forwards) $945 $1, $ $977 $ $1, $2, $1,572 $1, $3,623 *Projected 2009 proj 2010 budget A concern may be raised given that the average budgeted transfer for 2000 through 2010 is $1,007,579, which is short the average CIP budget by about $355,280. CIP budgets are multiyear budgets, so not all funds are spent during the budgeted year. At times, CIP projects are cancelled as circumstances warrant. However, because the Capital Improvement Fund will take on a more prominent role to use to borrow funds during cash shortfalls, future CIF transfers and budgets are planned carefully. CAPITAL PROJECTS $ 2,392,200 Fife... $ 703,600 The Library has set aside monies to build a Fife Library. Opening day... $ 650,000 Communications... 53,600 TOTAL $ 703,600 Surprise Lake... $ 450,000 Pending results of negotiations and final goahead, the Library has set aside monies to build and move the Milton/Edgewood Library to the Surprise Lake shopping center. University Place... $ 1,163,600 Library has set aside monies to build out the University Place Library. Purchases funded by Foundation... $ 536,500 Purchases funded by PCLS ,100 Communications... 19,000 TOTAL $ 1,163,600 Bond costs set aside... $ 75,000 In order to implement the results of the Facilities Master Plan, the Library may need to ask the voters to issue capital facilities bonds. The Library will set aside $300,000 over three years to pay for an election ($150,000 was set aside in 2009). FACILITIES PROJECTS $ 500,100 The Library will continue to maintain buildings to high standards of safety and décor. The following projects are slated for 2010: Roofs (PEN, Other repairs)... $ 190,000 Roof replacement is needed for the Peninsula branch ($180,000). Because the Sumner library is jointly owned with the City of Sumner, the $300,000 project cost was going be shared equally in However, due to City of Sumner s budget shortfall, the Library will postpone its replacement and only perform repairs ($10,000). HVAC Systems (GHM)... $ 100,000 The environmental heating/cooling systems for Graham Library will be replaced in This will be done at the same time as when the carpet is replaced. Parking Lot Repairs... $ 30,000 Parking lots at all locations require upkeep for safety and code. The Facilities Department will 2010 Budget Page 71 Pierce County Library System

72 use these funds to patch, seal coat, strip, and paint parking lots as needed. Interior Painting (BLK, Touchups)... $ 29,500 Bonney Lake Library s interior will be repainted ($17,000). Monies are set aside for touchups at other locations ($12,500). Carpets (BLK, PAC, Misc)... $ 64,300 Carpet at Bonney Lake Library needs replacing ($50,000). This will be done at the same time as when the HVAC system is replaced. PAC needs repairs near the Circulation hallway ($4,300). $10,000 is set aside for miscellaneous repairs. Interior Lighting (LWD, PKS, SH, STL)... $ 25,000 Improve lighting to address dark and uninviting areas inside the listed libraries. Office Improvements (PAC)... $ 11,000 Staff areas need some work to make them more conducive to work needs. AWE Project... $ 5,000 Two more AWE computers will be installed. Includes computer equipment, furnishings, and electrical work as needed. Electrical Phase Protection... $ 17,000 Six libraries need replacements to their surge protection systems that guard computers, HVACs, and other important equipment from power spikes. The second half of the replacements for the remaining branches will occur in Smartboards PAC Boardroom... $ 3,300 Smartboards allow for the efficient and timesaving transcription of drawn materials on a special board. This system will be installed in the PAC Boardroom. Signage... $ 25,000 Signs will be redone at South Hill library parking lot and the Peninsula Library name change (to Gig Harbor/Peninsula). Also, some funds are set aside to purchase and install Open Neon signs. Signage (SH, PEN)... $ 19,000 Open Neon Signs... 6,000 TOTAL $ 25,000 VEHICLE PROJECTS $ 76,800 The Library maintains a fleet of three bookmobiles, three delivery vans, and several staff vehicles. Repairs, preventive maintenance, and replacements are needed every year to ensure vehicles are safe, efficient, and provide the services needed. #7 Staff Car Replacement... $ 35,000 The aging staff car #7 will be replaced in Bookmobile Repair (generator)... $ 35,000 It s expected that one of the bookmobile s generators will need repair/replacement in Snowplow Attachment... $ 6,800 The library will purchase an attachment to help clear out snow in parking lots. TECHNOLOGY PROJECTS $ 609,000 The Library works hard to keep its technology contemporary and usable. While many of its purchases are considered annual replacements, such as PCs, certain projects require capital funding. Website Enhancements... $ 31,000 In 2009, the Information Services Department assumed responsibility for the public Web site and for the Internet will see incremental improvements of both Web sites. Point of Sale System for libraries... $ 85,000 The Finance Department will evaluate, purchase, and replace the registers in the libraries with systems that can improve the workflow and accuracy of receipting in the branches. This saves considerable labor time for branch and finance staff Budget Page 72 Pierce County Library System

73 Electronic Document Management... $ 18,000 The Finance Department will finish implementing a project to improve its workflow and storage needs, by scanning papers such as invoices and statements electronically and making them available through computer access. The system may be purchased through the existing financial/hr system, EDEN. Phone System Replacement... $ 225,000 The Information Technology Department will be working on replacing the Library s phone system in This complex project will consider strategic questions, such as whether the public should dial a central number to access all locations, or continue using the decentralized approach. A consultant may be retained to analyze needs and make recommendations. Network Upgrades... $ 100,000 The Information Technology Department will replace aging network infrastructure to improve both the reliability and performance of the network. FUND BALANCE As with the General Fund, the Capital Fund s balance is also an important factor in cash flow. However, the Capital Fund balance is more susceptible to large fluctuations. Since 1995, the Library has improved the Capital Fund balance, which was used as a source to borrow when General Funds were low. It is projected that Capital Fund expenditures will erode the fund s balance, as the amount transferred will be less than the budgeted project expenditures. Below is a chart showing the history of the Capital Fund s ending fund balance. Thousands Figure 16 Capital Fund Ending Fund Balance $3,000 $2,500 $2,000 $1,500 $1,059 $1,457 $1,388 $1,663 $1,922 $1,493 $2,586 $2,091 $1,761 $1,597 $1,532 Express Check Replacement... $ 150,000 The ECKO systems installed from are beginning to need replacement. The IT department will purchase lower cost models to replace the existing systems. $1,000 $500 $0 $567 $249 $344$ $95 *Projected *2009 *2010 CONTINGENCY $ 45,000 The Library frequently needs to purchase capitalrelated items and services during the year. Prior to 2009, unless projects were emergencies, Library management had to wait until Board meetings to recommend and have approved small and large projects alike. To provide more timely improvements for the public and to make reporting more efficient, the Board approved a Capital Improvement contingency fund from which the Executive Director or Deputy Director may approve purchases without the need for specific Board approval. Management will review this need periodically and may make adjustments Budget Page 73 Pierce County Library System

74 2008 Pierce County READS Team, with author Alexander McCall Smith 2010 Budget Page 74 Pierce County Library System

75 Table 17 Capital Improvement Fund Detail CAPITAL IMPROVEMENT FUND BUDGET BUDGET ESTIMATED ESTIMATED ESTIMATED ESTIMATED Beginning Fund Balance, January $ 1,306,712 $ 95,355 $ 226,037 $ 55,919 $ 256,019 CIP REVENUES Budgeted transfer from General Fund , , , , ,451 UP Capital Campaign (Foundation) , , , , Interest Earnings , UP Transfer from General Fund , Fife Transfer from General Fund , Other Revenues TOTAL CIP FUNDING ,186,743 1,682, , , ,051 AVAILABLE FUNDS: $ 3,718,455 $ 1,778,337 $ 926,919 $ 743,519 $ 881,070 CIP EXPENDITURES Capital Projects Fife Opening Day , Communications , , Surprise Lake Opening Day , University Place Purchases funded by Foundation , Purchases funded by PCLS , Communications , , sq ft expansion , , , ,000 Facilities Master Plan Bond costs set aside , , Total Capital Projects ,392,200 1,052,00 120, , ,000 Facilities Projects Roofs SUM ,000 PEN , GHM , BUC, EAT , STL, KC , Repairs , HVAC Systems PKS STL GHM , BUC , LWD , SUM , Parking Lot Repairs , , , , ,000 Painting Touch ups , , BLK , Carpets BLK , PEN , PAC , , Carpet Extractor ,000 Miscellaneous , CONTINUED ON NEXT PAGE 2010 Budget Page 75 Pierce County Library System

76 CONTINUED FROM PREVIOUS PAGE CAPITAL IMPROVEMENT FUND BUDGET BUDGET ESTIMATED ESTIMATED ESTIMATED ESTIMATED Lighting LWD , PKS , SH , STL , System , , Office Improvements PAC , , SH , SMT , AWE project (PCs & facilities) , Electrical phase protection SH, SMT, PKS, MIL, OR, BLK , Other Facilities Projects Storage loft PAC , Alarm replacement PAC , Smartboard PAC Boardroom , Accoustics PEN , Replace water fountains LWD , Elevator work LWD , Signage , Open Neon signs , Dump trailer , Vertical lift , Total Facilities Projects , , , , ,000 Vehicles Projects #7 staff car replacement , Delivery van , ,000 #3 staff car replacement ,000 Bookmobile repairs (generator) , Bluebird bookmobile replacement ,000 Snowplow attachment , , Total Vehicle Projects , ,000 50, ,000 Technology Projects Website Improvements Website enhancements , Finance Department Point of sale system for branches , Elec. document mgmt system , Information Technology Phone system replacement , Network upgrades , System modernization , Total Technology Projects , , Contingency (by exec approval) , ,000 45, , ,000 TOTAL CIP EXPENDITURES: $ 3,623,100 $ 1,552,300 $ 871,000 $ 487,500 $ 560,000 Ending Balance, December $ 95,355 $ 226,037 $ 55,919 $ 256,019 $ 321,070 We provide a safe, comfortable and functional environment for our customers. We are the best resource to support our customer needs. Mission & Vision, Facilities Management 2010 Budget Page 76 Pierce County Library System

77 CASH FLOW ANALYSIS/BUDGETING REPLACED IN DECEMBER Kids checking out the computer on Explorer Bookmobile

78 CASH FLOW ANALYSIS/BUDGETING CASH FLOW ANALYSIS G iven that the Library operates significantly under its statutory limit of revenues, the budgeting strategy is designed to sustain 2006 levy lid lift promises in future years, now estimated to be around Cash flow is the principle tool with which Library management determines budgets and the mix of customer focused services levy lid lift service promises drive budgets for voterpromised operations, therefore the cost of that is incorporated into 2010 and future budgets. The Library uses a long range cash flow technique to analyze and budget. This helps determine how budgets will be established and balanced in future years. The general strategy is as follows: Be able to pay bills in April at least three fiscal years into the future. April and October are key months to plan for, as the Library needs to operate for at least four months with very low revenues until the property tax payments are received in May and November. Have enough money in the ending fund balance and in the Capital Improvement Fund to pay through each year s April and October obligations. year for critical cash flow. The Contingency set aside is one means of accomplishing that. Determine how much the budget needs to be affected in order to manage cash reserves during times of extended and significant fiscal strain. This strategy ensures that the Library budgets appropriately in advance so as to pay its bills and maintain services through to the next levy lid lift. Please see the next page for the cash flow analysis worksheet. Figure 17 is a chart showing the combined funds of the General Fund and Capital Fund that contribute to the cash flow of the Library. The record shows a steady increase in the combined funds ending fund balances from nearly $1.8 million in 1995 to an estimate of $11.3 million in These combined funds allow the Library to maintain services without borrowing money from a lending source, which could trigger further reductions due to paying fees and interest. $14,000 $12,000 $10,000 Figure 17 Combined Funds Ending Fund Balances When there are shortages in the General Fund balance, the Library requests the Board to approve borrowing from the Capital Improvement Fund. This will not likely be available beginning in Thousands $8,000 $6,000 $4,000 $2,000 Exclude any funds set aside for elections from the calculation of available cash to pay bills. This ensures that should an election need to be held, funds are available to conduct one. $ GENERAL FUND COMBINED FUNDS (GF & CF) CAPITAL FUND *2009 *Projected *2010 Manage budgeting and expenditures to build enough of an ending fund balance year to Further discussion about cash reserves is available in Chapter 10, General Fund Balance Budget Page 78 Pierce County Library System

79 INTERFUND LOANS In the General Fund, due to the cyclical nature of revenue receipts versus the regularity of expenditures, there may be temporary shortfalls in available cash (generally April and October). For the most part, the previous year s ending fund balance finances these shortfalls. However, when the balance proves insufficient, interfund loans from the Capital Improvement Fund to the General Fund may be made by authority of the Board of Trustees. These loans are interestbearing. INVESTMENTS When available cash exceeds current needs, the Library has Pierce County Treasurer invest the excess amounts which earns investment income for the Library. Generally, the rate of return is approximately the prime rate. As of December 2009, the rate of returns was approximately 0.005% due to historically low interest rates. I am Here Memories were lost in the fire of hate And the fire was lost in the pain The heart was blinded in the power of love But its bitter petals quietly scream distress and drown in the rain She still cries on the ground breathless in defeat Yet hides it all behind a smile of fake Forever now shallow words lost in lies Fight harder to catch her breath The sky may glisten once again Love may bloom to no end Gently whispering summer waits to captivate you But for now rest Emptiness may slowly fade and I will be here I will hush your tears I will break your shackles that bound you here She will awake heart stitched close Tears dried I will be here A friend that never sleeps Jasmin Ferrante Curtis Junior HS, 8th Grade 2009 Our Own Words 7th & 8th Grade Poetry Winner 3rd place Story Time at the University Place Library! The Finance Department s mission is to administer a fiscally responsible system to support the Library. The Finance Department is a valued partner, providing responsive, contemporary financial services with ethical standards. Mission & Vision, Finance 2010 Budget Page 79 Pierce County Library System

80 Table 18 Cash Flow Analysis/Budget Worksheet (UPDATED PRIOR TO PRINT) GENERAL FUND CASH FLOW ANALYSIS PROJECTED BUDGET PROJECTED PROJECTED PROJECTED PROJECTED Beginning Fund Balance $ 10,895,897 $ 11,264,483 $ XX,XXX,XXX $ XX,XXX,XXX $ XX,XXX,XXX $ XX,XXX,XXX (Excluding Carry Forwards) REVENUES Use of Fund Balance (Cash Reserves) Tax revenue (property/harvest/leasehold) 27,595,475 27,789,318 XX,XXX,XXX XX,XXX,XXX XX,XXX,XXX XX,XXX,XXX Intergovernmental (grants, city) 37,500 5, Charges for Services (graphics/photocopy) 71,700 65,000 65,000 65,000 65,000 65,000 Fines 520, , , , , ,000 Miscellaneous (interest/donations/salvage) 269, , , , , ,000 TOTAL 28,493,675 28,639,318 XX,XXX,XXX XX,XXX,XXX XX,XXX,XXX XX,XXX,XXX EXPENDITURES Personnel (COLA, steps, benefits) 19,269,207 18,742,092 XX,XXX,XXX XX,XXX,XXX XX,XXX,XXX XX,XXX,XXX Materials 4,588,988 4,612,291 X,XXX,XXX X,XXX,XXX X,XXX,XXX X,XXX,XXX Maintenance and Operations 3,117,477 3,063,756 X,XXX,XXX X,XXX,XXX X,XXX,XXX X,XXX,XXX Transfer to CIF From General Fund 569,874 1,872,786 X,XXX,XXX X,XXX,XXX X,XXX,XXX X,XXX,XXX Transfer to CIF Unanticipated revns/svngs 580,000 Total Transfers to CIF 1,149,874 1,872,786 X,XXX,XXX X,XXX,XXX X,XXX,XXX X,XXX,XXX Election Set Aside (add to ending fund balance) 80,000 80,000 80, Contingency (add to fund balance if unused) 284, ,393 XXX,XXX XXX,XXX XXX,XXX XXX,XXX TOTAL 28,490,483 28,639,318 XX,XXX,XXX XX,XXX,XXX XX,XXX,XXX XX,XXX,XXX Adjust these values to affect STEP 1 below Ending Fund Balance** $ 11,264,483 $ 11,264,026 $ XX,XXX,XXX $ XX,XXX,XXX $ XX,XXX,XXX $ XX,XXX,XXX (% of next year s revenues) 39.33% 37.18% XX.XX % XX.XX % XX.XX % XX.XX % ** Assumes Contingency was not spent and budget is balanced Revenues: 28,493,675 28,639,318 XX,XXX,XXX XX,XXX,XXX XX,XXX,XXX XX,XXX,XXX Expenditures: 28,490,483 28,639,318 XX,XXX,XXX XX,XXX,XXX XX,XXX,XXX XX,XXX,XXX Difference: 3,192*** *** $580,000 from unanticipated savings/revenues were transferred to the Capital Improvement Fund STEP 2: If negative (red): must cut the budget by this amount Ave. monthly expenditures (less transfers) 2,507,762 2,455,325 X,XXX,XXX X,XXX,XXX X,XXX,XXX X,XXX,XXX Ave. monthly expenditures (balanced budget) 2,508,028 2,455,325 X,XXX,XXX X,XXX,XXX X,XXX,XXX X,XXX,XXX Cash Required To Remain Solvent January April Every Year Available: Ending Fund balance from the previous year (balanced budget) $ 11,264,483 $ XX,XXX,XXX $ XX,XXX,XXX $ XX,XXX,XXX $ XX,XXX,XXX Amount in CIF Fund contributing to cash flow** 94,855 X,XXX,XXX X,XXX,XXX X,XXX,XXX X,XXX,XXX Revenues for first 3 months 1,750,000 1,750,000 1,800,000 1,800,000 1,800,000 Total Funds Available: 13,108,881 XX,XXX,XXX XX,XXX,XXX XX,XXX,XXX XX,XXX,XXX Less Need (Ave. Monthly Exp. (balanced budget) X 4 months): 9,821,298 XX,XXX,XXX XX,XXX,XXX XX,XXX,XXX XX,XXX,XXX Jan Apr Cash solvency (Available funds less need) $ 3,287,583 $ X,XXX,XXX $ X,XXX,XXX $ X,XXX,XXX ($ XXX,XXX) Assumptions: Personnel costs are pending Labor Negotiations Materials budget set at 16% of revenues Capital Fund transfer at 2% of revenues + commitments for UP & Fife improvements Contingency set at 1% of revenues STEP 1: Positive value means solvent until revenues received--don't have to borrow 2010 Budget Page 80 Pierce County Library System

81 GLOSSARY REPLACED IN DECEMBER Bookcart Drill Team Performing at the Daffodil Parade 2008

82 GLOSSARY ALA: American Library Association. The premier association for libraries in the United States, which include all forms of libraries (e.g., public, K 12, higher education, corporate). See also PLA, WLA. AWC: Association of Washington Cities. An organization that serves Washington cities, providing among many services such as conferences, training, research, and networking. BALANCED SCORECARD: A Harvard developed strategic decision making system for businesses, government, and non profit. The Balanced Scorecard is a method for setting an organization s measurable priorities based on a process of defining strategies, and then putting those into four perspectives: customer, operations, employee growth, and financial. BUDGET, FINAL (OR FINAL BUDGET, FB): A fiscal year s budget approved by the Board of Trustees upon second reading and final passage, which occurs during the December Board meeting. BUDGET, MID YEAR (OR MID YEAR ADJUSTMENT, MYA): A fiscal year s revised budget of revenues and expenditures approved by the Board of Trustees during the summer. CF or CIF: Capital Fund, or Capital Improvement Fund. See CAPITAL IMPROVEMENT FUND. CIPA: Children s Internet Protection Act. This Federal Act requires that institutions receiving reimbursements for telecommunications costs, through the federally administered E Rate program, implement an Internet filtering policy. CIRCULATION: A library statistical figure counting the number of items checked out during a specific period, usually the calendar year. Below is Pierce County Library s historical circulation statistics: 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 Figure 18 Annual Circulation History: CAPITAL IMPROVEMENT FUND: An accounting fund category for which the Library uses to pay for capital improvement projects. 1,000, CAPITAL IMPROVEMENT PROJECT: A project that improves a major aspect of the Library. CAPITAL IMPROVEMENT PLAN (CIP): The list of capital improvement projects approved by the Board of Trustees for current and future years. CASH FLOW ANALYSIS: A financial tool used by the Library for multi year financial planning purposes. The Library uses it primarily to determine how much cash is required to be set aside in the general and capital funds in order to pay bills during the first four months of the next three fiscal years. COLA: Cost of Living Adjustment. The adjustment applied by an organization to all of its salary and wage tables, usually by a percentage tied to a local or national inflationary index. Due to ongoing labor negotiations for a new contract, the COLA has not been set by time of print. The expiring labor agreement had 90% of the July to July Seattle Tacoma Bremerton CPI U, and has minimum and maximum caps. See also CPI U and IPD. In July 2009, the CPI U was recorded as 0.4%. CONTINGENCY: Monies set aside in the General Fund to manage longterm cash needs or respond to emergencies Budget Page 82 Pierce County Library System

83 CPI U: Consumer Price Index Urban Workers. The CPI U is an inflationary index used to establish the Cost of Living Adjustment to wages and salaries. CPI s are established at a national level and throughout the nation and states at regional levels. By time of print, the Library was still in labor negotiations for a new contract. The expiring contract uses the July to July Seattle Tacoma Bremerton version. See also COLA and IPD. DEBT SERVICE FUND: An accounting fund category for which the Library uses to pay off public debt, such as bonds. EDEN: A computerized integrated fund accounting system provided by Tyler Corporation. The EDEN system is used to manage the Library s finances and human resources records. EDEN succeeded Bi Tech in EXPRESS CHECKOUT: A means for providing patrons the ability to checkout materials by themselves. Express Checkout stations are used across the country in various retail stores, such as Fred Meyer and Home Depot. Express Checkout is being implemented along with merchandizing. See also MERCHANDISING. FTE: Full Time Equivalent. The equivalent of a full time position in the Library, defined as working 40 hours per week. GENERAL FUND: An accounting fund category for which the Library uses to receive revenues and pay for ongoing operations. HAPLR: Hennen s American Public Library Rating. An index that rates public libraries of similar size based on a number of indicators, such as expenditures per capita and cost per circulation. The summarized version of the {REVISE:} 2008 HAPLR ratings of 2006 fiscal year data is available at (HAPLR skipped 2007 due to late data): index.com/haplr08_correctedversionoctober8_2008.pdf ILS: Integrated Library System. A mission critical electronic data processing system that provides turnkey automation of a library s catalog and patron transaction system. PCLS uses the Polaris ILS. IPD: Implicit Price Deflator. The national index used in Washington State for purposes of establishing the lawful property tax levy rate for revenues. Under Initiative 747 passed in 2001 (the Washington State Legislature held a special session on November 29, 2007 to enact into law the court overturned language of Initiative 747), if the IPD is less than 1%, the Board of Trustees must take action to levy the full 1%. If the IPD is more than 1%, the Board does not need to take action and the Library receives the full 1% levy rate. During the November 2009 Board of Trustees meeting, the Board elected not to override the IPD. See also COLA and CPI U. Levy Lid Lift: An election by the voters to restore funding for the taxing districts, including Pierce County Library System. The Library put Proposition 1 on the ballot for the 2006 September election, which was subsequently passed by nearly 56% of the voters. Proposition 1 restored Library funding to 48 cents per $1000 of the district s assessed property value. MERCHANDISING: A new activity and term for which the Library devotes resources to display and promote the collection and branches. Merchandising is being implemented along with the Express Checkout. See also EXPRESS CHECKOUT. MILL RATE (MILLAGE): The effective levy rate for a taxing district. If the millage rate is , then the effective levy rate is 50 per $1,000 of assessed value. The millage rate is calculated every year by county s assessor/treasurer s office for the taxing district, upon release of the preliminary and final certifications of property tax revenues. MLS/MLIS: Masters of Library Science/Masters of Library and Information Sciences. The graduate degree required in the industry to be called Librarian. MLIS adds focus to information technology as part of the definition of being a librarian. OCLC: Online Computer Library Center. A nonprofit, membership, computer library service and research organization dedicated to the public purposes of furthering access to the world s information and reducing information costs. OCLC provides services to 2010 Budget Page 83 Pierce County Library System

84 locate, acquire, catalog, lend and preserve library materials. OPAC: Online Public Access Computer. A PC in the branches dedicated for patrons to use to access the Internet or other electronic resources, such as the online catalog or other electronic information sources. PCLS OPACs also offer patrons access to office automation applications such as word processing and spreadsheets. PAC: Processing and Administrative Center. The building facility of the Library s various departments, such as HR, Finance, and Collection Services. PCLS: Pierce County Library System. A junior taxing district that provides library services to residents in the Pierce County taxing district. PEBB: Public Employees Benefits Board. The state managed organization that administers benefits, such as medical and dental coverage, and life insurance. The Library participates in PEBB s medical insurance program. See also WCIF. PERS: Public Employees Retirement System. PERS is managed by the state s Department of Retirement, and is offered to all retirement eligible employees. There are three plans, PERS 1, PERS 2, and PERS 3, only of which PERS plans 2 and 3 are available to employees. WCIF: Washington Counties Insurance Fund. An insurance pool that provides medical and dental coverages, and life insurance. The Library participates in the WCIF dental/life insurance program. See also PEBB. WIFI: Wireless Fidelity, or Wireless. This contemporary technology provides a computer user to use a computer, most often a laptop, to access the Internet or other network resources without the need for a physical network cable. WiFi technology most often is referred to as IEEE standard a/b/g/n, which is the same technology used for cordless phones. The effective WiFi distance between a laptop and the source antenna is usually limited to around 100 feet. In library nomenclature, WiFi has come to mean providing computer owners the ability to bring in their laptops into branch premises and access the Internet via the library s network. WLA: Washington Library Association. The Washington State association for state libraries. See also ALA, PLA. WSL: Washington State Library. The State Library, currently reporting to the Washington State Secretary of the State. WSL provides some branch services, special library services to the state, training for library employees, administration of the K 20 network, and general resources to the library community. PLA: Public Libraries Association. The association for public libraries. PLA s parent organization is ALA. See also ALA, WLA. POLARIS: The new online catalog system developed and sold by GIS Information Systems Corporation. Polaris provides staff and patrons electronic access to the catalog, and manages all transactions from materials purchase, cataloguing, circulation, and final disposal. OPERATING FUND: See GENERAL FUND. Fund Development Department celebrating National Philanthropy Day 2010 Budget Page 84 Pierce County Library System

85 BRANCH & BUILDING INFORMATION Bonney Lake Library, Renovated REPLACED IN DECEMBER

86 BRANCH & BUILDING INFORMATION Table 19 Branch & Building Data Age of Floor Space Building Tax status Building owner Building (Square Feet) Bonney Lake Annexed city, 1993 City of Bonney Lake & PCLS ,480 renovated Buckley Annexed city PCLS ,100 DuPont Annexed city, 2001 Leased from DuPont ,610 Station Partners, LLC Eatonville Annexed town, 1982 PCLS ,000 Fife Annexed city, 2009 Lease to To be built by 2011 TBD be determined but likely 6,000 Graham Unincorporated Pierce County PCLS ,152 Key Center Unincorporated Pierce County PCLS ,066 Lakewood Annexed city, 1996 PCLS ,592 expanded 1974, renovated Milton/ Annexed city, 1999 Leased from WRP ,649 Edgewood Surprise Lake, LLC Orting Annexed town Town of Orting ,700 PAC Unincorporated Pierce County PCLS ,000 Parkland/ Unincorporated Pierce County PCLS ,576 Spanaway Peninsula Unincorporated Pierce County PCLS ,214 South Hill Unincorporated Pierce County PCLS ,100 Steilacoom Annexed town, 1981 PCLS ,039 Summit Unincorporated Pierce County PCLS ,424 Sumner Annexed city, 1982 City of Sumner & PCLS ,600 expanded and renovated, 1995 Tillicum Annexed city, 1996 HUD ,100 renovated after water damage, 2004 University Place Annexed city, 1995 Leased paid by University Place unknown 5,281 (Temporary facility until new building opens in 2011) TOTAL: 201,683 Sq Ft per Capita: Budget Page 86 Pierce County Library System

87 Visioning Workshop held November 2008 for Library Staff (Consultants Joan & George at left, Director Neel Parikh at right) REFERENCES