Budget Message
SILVER FALLS LIBRARY DISTRICT
BUDGET MESSAGE
Fiscal Year 2023-2024
OVERVIEW:
The Silver Falls Library District has only one fund – the General Fund – as defined by Oregon budget law. Most budget requirements are allocated to one Organizational Unit – Library Services – with the remaining unallocated requirements consisting of the Operating Contingency, the Unappropriated Ending Fund Balance, and unappropriated monies Reserved for Future Expenditures.
The District's beginning and ending fund balances are unrestricted, with the only restricted funds activity being the management of Oregon Ready-to-Read grant monies from the State Library of Oregon, which are received and expended within the same fiscal year.
The proposed 2023-2024 budget utilizes anticipated annual revenues consistent with prior years - and as projected by the data from Marion County Assessor’s Office - and it continues the District's plan to use the monies designated as Reserved for Future Expenditures. The District has been using the Reserved for Future Expenditures monies gradually over the past several years to address inevitable building maintenance issues, to replace aging equipment and furnishings, and to maintain the expanded service hours that were initiated in September 2012.
RESOURCES:
The services of the Silver Falls Library District are primarily funded by its permanent property tax levy of $0.5748 per thousand dollars of assessed valuation on the properties within its boundaries. There are several factors which affect the District's income from this levy.
The Current Year Property Tax amount levied on properties within the Silver Falls Library District for 2022-2023 increased approximately 4.1% percent from the prior 2021-2022 fiscal year. The proposed budget assumes an average and typical increase for the coming fiscal year, of 4.18%. This estimate forecasts a tax revenue for the District of $1,045,388.76 based on the tax rate of $0.5748 on property assessed at $1,818,700,000 within District boundaries. While the revenue can be collected at a rate as high as 99%, the rate of return has been calculated conservatively at 94% for the current year tax resource amount of $982,666.00.
Income from Prior Year Property Taxes is close to the forecasted amount in the current fiscal year, with 91.4% of anticipated revenue received as of this budget proposal. Prior years’ tax revenue was flat for the current fiscal year as there were no large legal settlements. A similar amount is anticipated for the coming year, the proposed budget for Prior Year Property Taxes remains the same at $19,500.
State Timber Lands income is variable and unpredictable. As such, State Timber Lands forecasting must necessarily remain conservative as these funds have been historically uneven since Oregon’s Timber production scaled down significantly in the 1980s. For the proposed budget, the projection is now at a nominal amount of $500. Following a meeting during the current fiscal year with the Marion County Assessor’s office, that department advised that timber revenue should not be relied upon but, when distributed, could be used as windfall money to fund wish list projects or to cover unanticipated shortfalls from other revenue streams. The State Timber Lands payments for the current fiscal year are at 19% of projected budget compared to being at 33% of budget last year, and 96% of budget the year prior.
Foreclosure proceeds for the Tax Title Land Fund (i.e., foreclosure proceeds) are typically small. No income was budgeted for that revenue line in the current fiscal year, and none will be budgeted for the coming fiscal year. The last time the District received revenue for this line item was in 2021-2022 for $1,076. Like the State Timber Lands income, funds from this stream will be used for wish list projects, unanticipated shortfalls from other line items, or as carryover for the following budget year.
CCRLS (Chemeketa Cooperative Regional Library Service) imposes taxes on properties within Polk, Yamhill, and Marion Counties at a rate of approximately $0.08 per thousand dollars of assessed valuation. The purpose of CCRLS is to enhance cooperation between member libraries as they provide service to residents of the three counties to develop shared resources. The taxes levied by CCRLS fund CCRLS's staffing and operational expenses, provide courier service between the libraries, and a shared automated circulation system and online catalog, purchase shared electronic resources, and provide reimbursement funds to member libraries to support their direct services to residents of the area.
For the proposed budget year, the anticipated CCRLS Reimbursement has increased by over $44,000 to $115,603. In our current fiscal year, the revenue in this line item was negatively impacted by the reduction in lending during fiscal year 2020-2021. This was due to facility closures from COVID-19. Robust materials lending by the District in 2022 has raised this line item back to an amount greater than pre-COVID numbers. The District's CCRLS Reimbursement income is determined by a formula which factors in (1) the amount of income CCRLS receives from its levy on taxpayers within the Silver Falls Library District and (2) the District's circulation of library materials to CCRLS residents who live outside the boundaries of the Silver Falls Library District. The amount included in the proposed budget reflects the amount approved in the CCRLS 2023-2024 budget, but the actual amount received within a fiscal year may vary depending on the timing of the quarterly payments near the beginning or end of a particular fiscal year.
The State Aid Grant line is an estimate of the amount to be received in Ready-to-Read Grant funds, based on receipts so far in the current biennium. It is mirrored by a corresponding line in Requirements. Ready-to-Read Grant expenditures are limited to the amount actually received and must be expended in their entirety. Their proposed usage must be approved by both the State Library and the Library Service District. The Ready-to-Read funding is based on demographic data of the number of 0-14 year olds inside a library’s service area.
The amounts in the remaining lines – Interest; Donations; and Fines and Fees – are based on the general pattern of receipts in previous years. Interest income is primarily from county-distributed tax funds deposited in the Local Government Investment Pool. This line item declined sharply during the pandemic and now has risen to record highs. In the fiscal year 2021-22 interest rates were as low as 0.45%. As of this writing, interest rates from the Pool are at 3.75%. Interest rates are challenging to predict, but because the amount received is more than triple the amount budgeted for in the current fiscal year, the amount is adjusted from $6,000 to $12,000 for this budget, a 100% increase.
The current year’s allocation of $8,000 to the Fines and Fees line has thus far been accurate based on monthly income. The amount for this line item remains the same for the coming fiscal year.
The District's Beginning Fund Balance includes the prior year's Unappropriated Ending Fund Balance, which allows the District to meet its financial obligations during the first four and a half months of the fiscal year before any of the current year's tax payments are received in mid-November.
Also included in the Beginning Fund Balance are those funds Reserved for Future Expenditures. These reserves were created in 2011, a result of a $395,000 bequest from the estate of Inez Green, and they have been augmented occasionally by unexpected State Timber Lands revenue. These bequest monies are unrestricted.
This budget proposal assumes that the District will levy its full permanent rate of $0.5748 per thousand dollars of assessed valuation.
REQUIREMENTS:
Overview
Requirements for FY 2023-2024 are greater than FY 2022-2023, a 5.8% overall increase. In the budget before you, there is an increase of 2.7% increase for Personnel costs. The Materials budget is 1% greater, and the Operations/Services budget is increased by 29.3%.
Personnel Services
The total Personnel Services category is increased by 2.7% for this budget, and FTE has been slightly reduced from 12.1 to 11.1.
In the proposed budget for 2023-2024, there is an increase of 3.1% for salary expenditures and a cost-of-living adjustment. This is because the step and wage structure is being recalculated to allow for smaller but more consistent step increases from starting wage up to 19 years of service. The salary line also includes some funds for internships which receive matching or supplemental funds from Special Districts Association and from Willamette Workforce programs.
Workers Compensation costs for the District have remained stable. Beginning this coming budget year, the organization SAIF (State Accident Insurance Fund) is partnering with the Special Districts Association of Oregon (SDAO) to provide worker’s compensation. No increase in rates is expected.
The Social Security line includes the District's assessments for both Social Security and Medicare and is based on the relevant percentages of the Salaries line.
The amount budgeted for Group Health reflects the "not-to-exceed" rate increases announced by the District’s insurance providers for 2023, as well as current levels of staff participation. The rate change for Regence Blue Cross Blue Shield health insurance holders is 5%, with no rate increase for the affiliated Delta Dental insurance. Vision insurance with VSP has increased 9%. Kaiser dental has a 1% rate increase, and Kaiser medical insurance has increased 16.7%. Benefit eligible staff have a choice for which insurance providers they utilize under the District’s contract with Citycounty Insurance Services (CIS).
The District's overall billing for the Public Employee Retirement System (PERS) for FY 2022-2023 was 22.3% for Tiers 1 and 2, and 18.02% for the Oregon Public Service Retirement Plan (OPSRP). For the upcoming biennium, starting July of this year, the rates will increase to 23.93% for Tiers 1 and 2, and 19.55% for OPSRP.
Materials & Services
The total Materials and Services budget has been increased by 17.2% overall.
Within the Materials section, the lines for Books and Audio-Visual remain relatively flat. There is a slight decrease in Periodicals expenditures as some magazines and newspapers have ceased publication or delivery. The Microforms line item is taken to zero as the last of The Silverton Appeal newspapers have now been microfilmed. For library programming, the Adult Programs line remains flat while there is an 11% increase in Youth Programs as more are being scheduled since COVID-era restrictions have eased.
Building Maintenance is increased significantly this year, primarily to address the flat roof on the original part of the library. The anticipated flat roof replacement will cost between $30-$42K based on preliminary quotes. Over the past five years, the library has replaced aging HVAC systems as they fail. There are currently four out of eight HVAC units that are 25 years old, that will need to be replaced as they fail. As such, the Building Maintenance budget also reflects the anticipated replacement of another unit should one fail during the year. Repair and maintenance of plumbing and electrical systems are ongoing processes as the building systems age and experience the wear and tear of public use.
Line items that show slight decreases include, Minor Equipment and Furnishings, Dues and Subscriptions, Advertising and Publishing, Conference and Training, Travel, Contractual Services, Bookkeeping and Audit, and Miscellaneous. The Conference and Training, as well as Travel line items are decreased in anticipation of the state library conference being nearby in Salem.
Office Supplies, Equipment Maintenance, Telecommunications, Postage & Freight, and Gas/Electricity, and Insurance have all increased somewhat due to rising costs of those goods and services.
Election Expenses are up as this is a special election year and billing for the May elections arrives in July.
Contingency
The amount in the Contingency line of the budget is for the purpose of appropriations, so that these funds would be readily available for transfer, by Board resolution, to the appropriate budget line for expenditure in the event of unforeseen expenses, such as the failure of multiple HVAC units at once or other emergencies impacting library facilities or services. State law limits the amount that can be transferred from Contingency to 15% of the total appropriation in the operating fund, and these funds can only be transferred to an existing appropriation.
Other Requirements
The 2023-2024 proposed budget also includes two categories comprising unappropriated funds, which cannot be spent in the fiscal year without adoption of a supplemental budget or a declaration of emergency.
The first of these is Reserved for Future Expenditures. The funds in this line are primarily from bequest funds, as well as from receipt of State Timber Lands income, and from conservative fiscal management of available income. The existence of these funds has provided for added service hours, funded equipment purchases and cushioned the impact of PERS rate increases. The District intends to continue using the funds in this line over a number of years for purposes related to both infrastructure maintenance and service enhancements.
Finally, the standard Unappropriated Ending Fund Balance reserves funds for meeting the financial needs of the District during the first third of each fiscal year – before that year's tax revenues begin to be received – without the use of a tax anticipation loan, which would incur interest and processing costs for the taxpayers. Funds are also maintained in this line to ensure coverage of the deductible amounts on the District's flood and earthquake insurance coverage, should there be major damage to the Library building and/or contents.
SUMMARY:
The intent of this proposed budget is to support current and developing programs and services for library users of all ages; to refresh and revitalize the Library's materials collection, both physical and electronic; to plan for, implement, and support evolving technologies; and to provide for the maintenance, repair, and replacement, as needed of the Library's physical infrastructure elements.
The proposed budget calls for the District to levy property taxes at its permanent rate of $0.5748 per thousand dollars of assessed valuation.
BUDGET MESSAGE
Fiscal Year 2023-2024
OVERVIEW:
The Silver Falls Library District has only one fund – the General Fund – as defined by Oregon budget law. Most budget requirements are allocated to one Organizational Unit – Library Services – with the remaining unallocated requirements consisting of the Operating Contingency, the Unappropriated Ending Fund Balance, and unappropriated monies Reserved for Future Expenditures.
The District's beginning and ending fund balances are unrestricted, with the only restricted funds activity being the management of Oregon Ready-to-Read grant monies from the State Library of Oregon, which are received and expended within the same fiscal year.
The proposed 2023-2024 budget utilizes anticipated annual revenues consistent with prior years - and as projected by the data from Marion County Assessor’s Office - and it continues the District's plan to use the monies designated as Reserved for Future Expenditures. The District has been using the Reserved for Future Expenditures monies gradually over the past several years to address inevitable building maintenance issues, to replace aging equipment and furnishings, and to maintain the expanded service hours that were initiated in September 2012.
RESOURCES:
The services of the Silver Falls Library District are primarily funded by its permanent property tax levy of $0.5748 per thousand dollars of assessed valuation on the properties within its boundaries. There are several factors which affect the District's income from this levy.
- Oregon State legislation caps the potential increase in taxable assessed valuation on existing properties at 3% per year. Income increases can surpass that limit due to new construction in the District.
- Increases in property tax revenues for properties within the Urban Renewal District (URD) established by the City of Silverton in 2004 are used to fund those activities, rather than being distributed to other taxing entities, such as the Library District. The current impact of the URD is to the District is nominal. The URD commenced in 2004 and has currently expended around 60% of its $12.7 million dollar debt limitation.
- The maximum total amount allowed for all general government property tax levies on properties in the State of Oregon is $10.00 per thousand dollars of assessed valuation (Ballot Measure 5, passed 1990). The Library District levy is included in this limit. If the District's levy and the tax levies for other entities such as county or city government, fire or water districts, recreation districts, etc., total more than $10.00 per thousand of assessed valuation, the actual amount levied may be reduced on each levy in an established priority. This is known as compression. Currently the District is not under compression, although some properties may be affected at some point as new service districts are established or special operating levies are approved by voters. Conversely, negative effects of compression may be mitigated as new construction takes place within the District.
The Current Year Property Tax amount levied on properties within the Silver Falls Library District for 2022-2023 increased approximately 4.1% percent from the prior 2021-2022 fiscal year. The proposed budget assumes an average and typical increase for the coming fiscal year, of 4.18%. This estimate forecasts a tax revenue for the District of $1,045,388.76 based on the tax rate of $0.5748 on property assessed at $1,818,700,000 within District boundaries. While the revenue can be collected at a rate as high as 99%, the rate of return has been calculated conservatively at 94% for the current year tax resource amount of $982,666.00.
Income from Prior Year Property Taxes is close to the forecasted amount in the current fiscal year, with 91.4% of anticipated revenue received as of this budget proposal. Prior years’ tax revenue was flat for the current fiscal year as there were no large legal settlements. A similar amount is anticipated for the coming year, the proposed budget for Prior Year Property Taxes remains the same at $19,500.
State Timber Lands income is variable and unpredictable. As such, State Timber Lands forecasting must necessarily remain conservative as these funds have been historically uneven since Oregon’s Timber production scaled down significantly in the 1980s. For the proposed budget, the projection is now at a nominal amount of $500. Following a meeting during the current fiscal year with the Marion County Assessor’s office, that department advised that timber revenue should not be relied upon but, when distributed, could be used as windfall money to fund wish list projects or to cover unanticipated shortfalls from other revenue streams. The State Timber Lands payments for the current fiscal year are at 19% of projected budget compared to being at 33% of budget last year, and 96% of budget the year prior.
Foreclosure proceeds for the Tax Title Land Fund (i.e., foreclosure proceeds) are typically small. No income was budgeted for that revenue line in the current fiscal year, and none will be budgeted for the coming fiscal year. The last time the District received revenue for this line item was in 2021-2022 for $1,076. Like the State Timber Lands income, funds from this stream will be used for wish list projects, unanticipated shortfalls from other line items, or as carryover for the following budget year.
CCRLS (Chemeketa Cooperative Regional Library Service) imposes taxes on properties within Polk, Yamhill, and Marion Counties at a rate of approximately $0.08 per thousand dollars of assessed valuation. The purpose of CCRLS is to enhance cooperation between member libraries as they provide service to residents of the three counties to develop shared resources. The taxes levied by CCRLS fund CCRLS's staffing and operational expenses, provide courier service between the libraries, and a shared automated circulation system and online catalog, purchase shared electronic resources, and provide reimbursement funds to member libraries to support their direct services to residents of the area.
For the proposed budget year, the anticipated CCRLS Reimbursement has increased by over $44,000 to $115,603. In our current fiscal year, the revenue in this line item was negatively impacted by the reduction in lending during fiscal year 2020-2021. This was due to facility closures from COVID-19. Robust materials lending by the District in 2022 has raised this line item back to an amount greater than pre-COVID numbers. The District's CCRLS Reimbursement income is determined by a formula which factors in (1) the amount of income CCRLS receives from its levy on taxpayers within the Silver Falls Library District and (2) the District's circulation of library materials to CCRLS residents who live outside the boundaries of the Silver Falls Library District. The amount included in the proposed budget reflects the amount approved in the CCRLS 2023-2024 budget, but the actual amount received within a fiscal year may vary depending on the timing of the quarterly payments near the beginning or end of a particular fiscal year.
The State Aid Grant line is an estimate of the amount to be received in Ready-to-Read Grant funds, based on receipts so far in the current biennium. It is mirrored by a corresponding line in Requirements. Ready-to-Read Grant expenditures are limited to the amount actually received and must be expended in their entirety. Their proposed usage must be approved by both the State Library and the Library Service District. The Ready-to-Read funding is based on demographic data of the number of 0-14 year olds inside a library’s service area.
The amounts in the remaining lines – Interest; Donations; and Fines and Fees – are based on the general pattern of receipts in previous years. Interest income is primarily from county-distributed tax funds deposited in the Local Government Investment Pool. This line item declined sharply during the pandemic and now has risen to record highs. In the fiscal year 2021-22 interest rates were as low as 0.45%. As of this writing, interest rates from the Pool are at 3.75%. Interest rates are challenging to predict, but because the amount received is more than triple the amount budgeted for in the current fiscal year, the amount is adjusted from $6,000 to $12,000 for this budget, a 100% increase.
The current year’s allocation of $8,000 to the Fines and Fees line has thus far been accurate based on monthly income. The amount for this line item remains the same for the coming fiscal year.
The District's Beginning Fund Balance includes the prior year's Unappropriated Ending Fund Balance, which allows the District to meet its financial obligations during the first four and a half months of the fiscal year before any of the current year's tax payments are received in mid-November.
Also included in the Beginning Fund Balance are those funds Reserved for Future Expenditures. These reserves were created in 2011, a result of a $395,000 bequest from the estate of Inez Green, and they have been augmented occasionally by unexpected State Timber Lands revenue. These bequest monies are unrestricted.
This budget proposal assumes that the District will levy its full permanent rate of $0.5748 per thousand dollars of assessed valuation.
REQUIREMENTS:
Overview
Requirements for FY 2023-2024 are greater than FY 2022-2023, a 5.8% overall increase. In the budget before you, there is an increase of 2.7% increase for Personnel costs. The Materials budget is 1% greater, and the Operations/Services budget is increased by 29.3%.
Personnel Services
The total Personnel Services category is increased by 2.7% for this budget, and FTE has been slightly reduced from 12.1 to 11.1.
In the proposed budget for 2023-2024, there is an increase of 3.1% for salary expenditures and a cost-of-living adjustment. This is because the step and wage structure is being recalculated to allow for smaller but more consistent step increases from starting wage up to 19 years of service. The salary line also includes some funds for internships which receive matching or supplemental funds from Special Districts Association and from Willamette Workforce programs.
Workers Compensation costs for the District have remained stable. Beginning this coming budget year, the organization SAIF (State Accident Insurance Fund) is partnering with the Special Districts Association of Oregon (SDAO) to provide worker’s compensation. No increase in rates is expected.
The Social Security line includes the District's assessments for both Social Security and Medicare and is based on the relevant percentages of the Salaries line.
The amount budgeted for Group Health reflects the "not-to-exceed" rate increases announced by the District’s insurance providers for 2023, as well as current levels of staff participation. The rate change for Regence Blue Cross Blue Shield health insurance holders is 5%, with no rate increase for the affiliated Delta Dental insurance. Vision insurance with VSP has increased 9%. Kaiser dental has a 1% rate increase, and Kaiser medical insurance has increased 16.7%. Benefit eligible staff have a choice for which insurance providers they utilize under the District’s contract with Citycounty Insurance Services (CIS).
The District's overall billing for the Public Employee Retirement System (PERS) for FY 2022-2023 was 22.3% for Tiers 1 and 2, and 18.02% for the Oregon Public Service Retirement Plan (OPSRP). For the upcoming biennium, starting July of this year, the rates will increase to 23.93% for Tiers 1 and 2, and 19.55% for OPSRP.
Materials & Services
The total Materials and Services budget has been increased by 17.2% overall.
Within the Materials section, the lines for Books and Audio-Visual remain relatively flat. There is a slight decrease in Periodicals expenditures as some magazines and newspapers have ceased publication or delivery. The Microforms line item is taken to zero as the last of The Silverton Appeal newspapers have now been microfilmed. For library programming, the Adult Programs line remains flat while there is an 11% increase in Youth Programs as more are being scheduled since COVID-era restrictions have eased.
Building Maintenance is increased significantly this year, primarily to address the flat roof on the original part of the library. The anticipated flat roof replacement will cost between $30-$42K based on preliminary quotes. Over the past five years, the library has replaced aging HVAC systems as they fail. There are currently four out of eight HVAC units that are 25 years old, that will need to be replaced as they fail. As such, the Building Maintenance budget also reflects the anticipated replacement of another unit should one fail during the year. Repair and maintenance of plumbing and electrical systems are ongoing processes as the building systems age and experience the wear and tear of public use.
Line items that show slight decreases include, Minor Equipment and Furnishings, Dues and Subscriptions, Advertising and Publishing, Conference and Training, Travel, Contractual Services, Bookkeeping and Audit, and Miscellaneous. The Conference and Training, as well as Travel line items are decreased in anticipation of the state library conference being nearby in Salem.
Office Supplies, Equipment Maintenance, Telecommunications, Postage & Freight, and Gas/Electricity, and Insurance have all increased somewhat due to rising costs of those goods and services.
Election Expenses are up as this is a special election year and billing for the May elections arrives in July.
Contingency
The amount in the Contingency line of the budget is for the purpose of appropriations, so that these funds would be readily available for transfer, by Board resolution, to the appropriate budget line for expenditure in the event of unforeseen expenses, such as the failure of multiple HVAC units at once or other emergencies impacting library facilities or services. State law limits the amount that can be transferred from Contingency to 15% of the total appropriation in the operating fund, and these funds can only be transferred to an existing appropriation.
Other Requirements
The 2023-2024 proposed budget also includes two categories comprising unappropriated funds, which cannot be spent in the fiscal year without adoption of a supplemental budget or a declaration of emergency.
The first of these is Reserved for Future Expenditures. The funds in this line are primarily from bequest funds, as well as from receipt of State Timber Lands income, and from conservative fiscal management of available income. The existence of these funds has provided for added service hours, funded equipment purchases and cushioned the impact of PERS rate increases. The District intends to continue using the funds in this line over a number of years for purposes related to both infrastructure maintenance and service enhancements.
Finally, the standard Unappropriated Ending Fund Balance reserves funds for meeting the financial needs of the District during the first third of each fiscal year – before that year's tax revenues begin to be received – without the use of a tax anticipation loan, which would incur interest and processing costs for the taxpayers. Funds are also maintained in this line to ensure coverage of the deductible amounts on the District's flood and earthquake insurance coverage, should there be major damage to the Library building and/or contents.
SUMMARY:
The intent of this proposed budget is to support current and developing programs and services for library users of all ages; to refresh and revitalize the Library's materials collection, both physical and electronic; to plan for, implement, and support evolving technologies; and to provide for the maintenance, repair, and replacement, as needed of the Library's physical infrastructure elements.
The proposed budget calls for the District to levy property taxes at its permanent rate of $0.5748 per thousand dollars of assessed valuation.
