Budgets and the Law. Mandy Easter, Law Librarian Maryann Mori, CE District Consultant April 25, 2017

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1 Budgets and the Law Mandy Easter, Law Librarian Maryann Mori, CE District Consultant April 25, 2017

2 Standard 2 The library board or other authority as defined by ordinance (has power to hire & delegate and has legal authority over the library s budget).

3 The birth of a library!

4 Your Ordinance READ IT! 1. the selection process for board members 2. number of trustees 3. who can serve as a trustee 4. term of service 5. duties of trustees

5 The board s role: charge, control, and supervision of the public library, its appurtenances and fixtures, and rooms containing the same, directing and controlling all the affairs of such library.

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8 the library board still needs to report all income and expenditures to the city. (p. 25 Iowa Library Trustee s Handbook)

9 Code 392.5

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11 Iowa Constitution Article III, Section 31: No public money or property shall be appropriated for local or private purposes.

12 Iowa Code Non-felonious Misconduct in Office Subsection 5: It is ILLEGAL for a public employee to permit any person to use public property for any private purpose and for personal gain.

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14 No-No! Bad Trustee!

15 Iowa Codes and investments Chapter 12B = Security of Revenue (outlines the legal requirements for investing public money) Chapter 12C = Deposit of Public Funds (pertains to cities making financial investments) Chapter 384 = City Finance Section = Joint Investment of Funds Chapter 569 = Acquisition of Title by State or Municipal Corporations

16 Separate Accounts Iowa Code section : A city shall keep separate accounts corresponding to the programs and items in its adopted or amended budget A city shall keep accounts which show an accurate and detailed statement of all public funds collected, received, or expended for any city purpose, by any city officer, employee, or other person, and which show the receipt, use, and disposition of all city property. Public moneys may not be expended or encumbered except under an annual or continuing appropriation.

17 Funds remaining in the library account at the end of the [fiscal] year will revert (to the city s general fund) unless Permission to carry over the funds in the library account Designation of funds to a trust account Trust Accounts

18 Trust Accounts Title of account Purpose of Account Use of the interest of the account permanent accounts (if you can only spend the interest) special revenue funds (if you can spend it all).

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20 Iowa Code Section The city should perform all the financial tasks for each of its agencies. Reminder: The library IS a city agency!

21 Who does what? Library Director presents bills to library board Library Board approves library s bills for payment City Clerk pays the bills and provides monthly budget reports City Council appropriates the bottomline funding of library

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26 City Attorney Anytown, Iowa Mayor Anytown, Iowa

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28 Amendments Unanticipated cash balances/encumbrances on hand Unanticipated receipt of non-taxpayer funds (i.e. grants) Transfers between programs within the general fund

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31 LIBRARIAN --spending money without telling city --holding onto checks until next fiscal year

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35 Contracting

36 $ tax Each city and each county shall levy a tax of at least six and three-fourths cents per thousand dollars of assessed value on the taxable property for the purpose of providing financial support to the public library (of that jurisdiction). Iowa code (See Chapter 9 Iowa Library Trustee s Handbook, 2009) Funding Sources City/County

37 Old Outdated Inadequate minimum Incapable of keeping your doors open! Disappointing $ Tax Not what you think!

38 Fair and Equitable The Open Access program allows a local public library board to decide not to loan eligible items to residents of a jurisdiction that is contracting with a library(s) at a rate that the board deems to be inequitable. The library board must notify Iowa Library Services, in writing, of its intent and rationale for the decision. --FY17 Open Access Agreement, section 3-H

39 Scenario: Anytown Library contracts with a neighboring small town for $250 annually. Fair and Equitable? $250/200 = $1.25

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41 Contracting Considerations: 1. Determine the amount your own citizens are paying for library services. 2. Use your city s per capita amount for the contracting city as a starting point. (You need to know population!) 3. Review A-sized libraries per capita information from the State Library s STATISTICS page. 4. Choose samples of libraries with similar populations and average the per capita amount (see step #3). 5. Determine a fair and equitable amount based upon all of the above information and considerations.

42 Example: Your city = $41.50 per capita. Average of all A-sized libraries = $31.00 per capita Average of similar-sized A libraries = $12.75 per capita Possible contracting amounts = $ $31.00 per capita Small town of 200 would pay $2,550 - $6,200 annually* based upon these considerations. *Numbers will vary, so do the calculations yourself if considering a contract.

43 A DISTRICT CONSULTANT

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45 Iowa Code section 1(1) Okay Sell directly Sell by consignment Funds return to library (for city to account) Give to another government agency NOT okay Sell/give to private organization or individual Funds go to Friends group Give to Goodwill or private daycare, etc.

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48 Friends of the Library

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51 What is the difference between Friends groups and foundations? FRIENDS FOUNDATIONS Memberships Smaller monies fluid Volunteers for hand-on work Long-established Donors Larger monies longterm Employees in an office (not a requirement) Newer concept

52 501(c)(3) = tax exempt

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54 Public library buildings belong to their cities. The city is legally responsible.city councils have vested interests in working with library boards to ensure the soundness of library buildings in order to minimize risks and liabilities. --Mandy Easter, law librarian (2014)

55 Capital Expenses

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58 By-Laws

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61 Budgets & Funding Series May 31: Best Budget Practices with the State Auditor s Office June 29: Friending the Public Library with Mandy Easter and Maryann Mori Forthcoming! Budget Proposals & Reports Grantwriting

62 Mandy Easter Law Library Consultant Maryann Mori CE District Consultant