Budget Message
SILVER FALLS LIBRARY DISTRICT
BUDGET MESSAGE
Fiscal Year 2022-2023
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, which are received and expended within the same fiscal year.
The proposed 2022-2023 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 2021-2022 increased approximately 4.67% percent from the prior 2020-2021 fiscal year, which is, however, 2.59% less than the 7.26% increase that was initially projected by the Marion County Tax Office in the spring of 2021. The proposed budget assumes an average and typical increase for the coming fiscal year, of 4.15%. This estimate forecasts a tax revenue for the District of $1,004,405.52 based on the tax rate of $0.5748 on property assessed at $1,747,400,000 within District boundaries. While the revenue can be collected at a rate as high as 99%, the rate of return has been calculated at 95% for the current year tax resource amount of $954,185.00.
Income from Prior Year Property Taxes is close to the forecasted amount in the current fiscal year. Of the $21,000 projected for the current year, 103% percent of this amount has been received as of this writing. Prior years’ tax revenue was flat for the current fiscal year as there were no anticipated large legal settlements (such as the 3 year payoff with the telecommunications company Comcast) as there had been for several years. As a conservative measure, and with no known pending settlements, the proposed budget for prior years’ taxes is $19,500.
Both State Timber Lands and Tax Title Land Fund (i.e., foreclosure proceeds) income are highly variable and unpredictable. With so many unknowns, 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, and they are prone to volatile market forces. For the proposed budget the projection has been downgraded once again due to unknowns regarding the fiscal impacts of post-wildfire logging, and salvage logging. The State Timber Lands payments for the current fiscal year are at 33% of projected budget compared to being at 96% of budget last year, and 255% of budget the year prior.
Foreclosure proceeds for the Tax Title Land Fund are typically small. While no income was budgeted for that revenue line, $1,076 has been received so far this 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 decreased by around $10,500. This is because the formula based reimbursement was impacted by the library’s closure to public browsing during part of the pandemic. This is anticipated to be a one-time decrease as the library’s lending numbers has rebounded since being fully reopened. 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 2022-2023 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, primarily on funds deposited in the Local Government Investment Pool, has continued to decline as a result of the pandemic. At the time of last year’s budget message, it was .60%. After dropping to as low as .45% midyear, it has now been adjusted up to .65%. Due to the many factors which could impact banking interest rates in the coming months, and despite the news that the Federal Reserve might increase rates up to six times in the year, in an abundance of caution the projected revenue for the Interest Income line is lowered again this year to just $6,000, a 40% decrease from the prior year.
After multiple years of reducing the amount in Fines and Fees, it is increased for the proposed budget. Two things are driving this change: 1) During the pandemic, all overdue fines were waived, and due dates for materials themselves were waived for a time during the peak of the recommendation for citizens to stay home. Overdue fines for adult materials are resuming this May. And, since reopening, many patrons have paid up on fees for lost and damaged items, 2) Beginning this current fiscal year, the library began to take credit and debit payments after enrolling in the ProPay payment processing service that is compatible with the library’s software. Adding this convenience has created a noticeable rise in patrons paying their fees for lost and damaged items.
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 as a result of a bequest from the estate of Inez Green and have been augmented occasionally by unexpected State Timber Lands income and by Board decisions, primarily regarding salary expenditures for raises and increased service hours. 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 2022-2-23 are slightly less than FY 2021-2022, a 4.5% decrease. In the budget before you, there is an increase of 4.4% for Personnel costs. The Materials budget is 3.8% lower, and the Operations/Services budget is 12.5% less.
Personnel Services
In the proposed budget for 2022-2023, there is an increase of 5.4% for salary expenditures. This is due to the following: A slight increase in FTE, going from 11.9 to 12.1, an annual step and wage increase, plus a 1% cost of living adjustment, a salary increase for one position that will now have an upgraded job description preference for a Masters in Library Science, and, an allowance for staff attrition with permissible but sizable vacation balance payouts. With last year’s increase in Circulation staff wages, combined with a cost of living adjustment for the proposed budget, the District continues working towards its goal of having entry level jobs that are competitively attractive for the level of skilled labor that is required.
Workers Compensation costs for the District have remained stable.
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 provider for 2022, as well as current levels of staff participation. There was no rate change for Regence health insurance, a 4.4% increase for employees on Kaiser Health Plan, and 9% increase for those on the vision plan.
The District's overall billing for the PERS retirement system for FY 2021-2022 was 22.3% for Tiers 1 and 2, and 18% for OPSRP. Last budget year, the PERS employers' rates increased, with the rate being 21.35% for the current biennium.
Materials & Services
Within the Materials section, the lines for Books and Electronic Media remain flat. There’s a small decrease in AV expenditures due to past years’ spending trends. Microforms and Periodicals are slightly higher to reflect increases in costs from the vendors.
Building Maintenance is slightly lower this year. Over the past four years, the library has replaced aging HVAC systems as they fail. There are now four out of eight HVAC units that are 24 years old, and will need replacement over the coming years. As such, the Building Maintenance budget 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. Because the building’s current fire and security alarm system is connected to emergency services via a landline, new communication technologies demand that the system be upgraded to computerized connectivity and there are increased fees for these services. Although the Minor Equipment and Furnishings line is lower in the proposed budget, two thousand dollars has been included for a lighting upgrade in the technical services area. The Minor Equipment and Furnishings line additionally includes expenditures for the replacement of desktop and laptop computers which are nearing obsolescence, as well as a new printer.
Other line items that show decreases include, Office Supplies, Conference and Training, Travel, Contract Services, Insurance, and Election Expenses. The Conference and Training, as well as Travel line items are decreased in anticipation of another year of largely online conferences or conferences that are nearby. Contract Services was higher last year because the District hired a consultant for a Strategic Planning process. The Insurance line item is decreased due to past years’ trends. Election expenses are lower as the May 2023 election for three Board candidates will not be billed until July.
One operating expenditures that increased is that of Bookkeeping & Audit. The District sent out Requests for Proposals for auditing services earlier this year and selected Isler CPA, LLC out of Eugene to conduct the audit for the fiscal year ending 2022. Although the firm’s proposal is on par with what the District has been paying for auditing services, additional funds were added in the event that there are any additional fees that may occur with a new contract.
The Miscellaneous line item has increased as the proposal of having a mural from the Silverton Mural Society is in play once again, with additional financial help from the Friends of the Silver Falls Library.
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 several 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 2022-2023 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 declared emergency situation.
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, which—as mentioned above – is both variable and intermittent, 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 2022-2023
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, which are received and expended within the same fiscal year.
The proposed 2022-2023 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 and it is expected to reach its debt limitations and sunset within the next five years.
- 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 2021-2022 increased approximately 4.67% percent from the prior 2020-2021 fiscal year, which is, however, 2.59% less than the 7.26% increase that was initially projected by the Marion County Tax Office in the spring of 2021. The proposed budget assumes an average and typical increase for the coming fiscal year, of 4.15%. This estimate forecasts a tax revenue for the District of $1,004,405.52 based on the tax rate of $0.5748 on property assessed at $1,747,400,000 within District boundaries. While the revenue can be collected at a rate as high as 99%, the rate of return has been calculated at 95% for the current year tax resource amount of $954,185.00.
Income from Prior Year Property Taxes is close to the forecasted amount in the current fiscal year. Of the $21,000 projected for the current year, 103% percent of this amount has been received as of this writing. Prior years’ tax revenue was flat for the current fiscal year as there were no anticipated large legal settlements (such as the 3 year payoff with the telecommunications company Comcast) as there had been for several years. As a conservative measure, and with no known pending settlements, the proposed budget for prior years’ taxes is $19,500.
Both State Timber Lands and Tax Title Land Fund (i.e., foreclosure proceeds) income are highly variable and unpredictable. With so many unknowns, 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, and they are prone to volatile market forces. For the proposed budget the projection has been downgraded once again due to unknowns regarding the fiscal impacts of post-wildfire logging, and salvage logging. The State Timber Lands payments for the current fiscal year are at 33% of projected budget compared to being at 96% of budget last year, and 255% of budget the year prior.
Foreclosure proceeds for the Tax Title Land Fund are typically small. While no income was budgeted for that revenue line, $1,076 has been received so far this 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 decreased by around $10,500. This is because the formula based reimbursement was impacted by the library’s closure to public browsing during part of the pandemic. This is anticipated to be a one-time decrease as the library’s lending numbers has rebounded since being fully reopened. 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 2022-2023 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, primarily on funds deposited in the Local Government Investment Pool, has continued to decline as a result of the pandemic. At the time of last year’s budget message, it was .60%. After dropping to as low as .45% midyear, it has now been adjusted up to .65%. Due to the many factors which could impact banking interest rates in the coming months, and despite the news that the Federal Reserve might increase rates up to six times in the year, in an abundance of caution the projected revenue for the Interest Income line is lowered again this year to just $6,000, a 40% decrease from the prior year.
After multiple years of reducing the amount in Fines and Fees, it is increased for the proposed budget. Two things are driving this change: 1) During the pandemic, all overdue fines were waived, and due dates for materials themselves were waived for a time during the peak of the recommendation for citizens to stay home. Overdue fines for adult materials are resuming this May. And, since reopening, many patrons have paid up on fees for lost and damaged items, 2) Beginning this current fiscal year, the library began to take credit and debit payments after enrolling in the ProPay payment processing service that is compatible with the library’s software. Adding this convenience has created a noticeable rise in patrons paying their fees for lost and damaged items.
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 as a result of a bequest from the estate of Inez Green and have been augmented occasionally by unexpected State Timber Lands income and by Board decisions, primarily regarding salary expenditures for raises and increased service hours. 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 2022-2-23 are slightly less than FY 2021-2022, a 4.5% decrease. In the budget before you, there is an increase of 4.4% for Personnel costs. The Materials budget is 3.8% lower, and the Operations/Services budget is 12.5% less.
Personnel Services
In the proposed budget for 2022-2023, there is an increase of 5.4% for salary expenditures. This is due to the following: A slight increase in FTE, going from 11.9 to 12.1, an annual step and wage increase, plus a 1% cost of living adjustment, a salary increase for one position that will now have an upgraded job description preference for a Masters in Library Science, and, an allowance for staff attrition with permissible but sizable vacation balance payouts. With last year’s increase in Circulation staff wages, combined with a cost of living adjustment for the proposed budget, the District continues working towards its goal of having entry level jobs that are competitively attractive for the level of skilled labor that is required.
Workers Compensation costs for the District have remained stable.
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 provider for 2022, as well as current levels of staff participation. There was no rate change for Regence health insurance, a 4.4% increase for employees on Kaiser Health Plan, and 9% increase for those on the vision plan.
The District's overall billing for the PERS retirement system for FY 2021-2022 was 22.3% for Tiers 1 and 2, and 18% for OPSRP. Last budget year, the PERS employers' rates increased, with the rate being 21.35% for the current biennium.
Materials & Services
Within the Materials section, the lines for Books and Electronic Media remain flat. There’s a small decrease in AV expenditures due to past years’ spending trends. Microforms and Periodicals are slightly higher to reflect increases in costs from the vendors.
Building Maintenance is slightly lower this year. Over the past four years, the library has replaced aging HVAC systems as they fail. There are now four out of eight HVAC units that are 24 years old, and will need replacement over the coming years. As such, the Building Maintenance budget 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. Because the building’s current fire and security alarm system is connected to emergency services via a landline, new communication technologies demand that the system be upgraded to computerized connectivity and there are increased fees for these services. Although the Minor Equipment and Furnishings line is lower in the proposed budget, two thousand dollars has been included for a lighting upgrade in the technical services area. The Minor Equipment and Furnishings line additionally includes expenditures for the replacement of desktop and laptop computers which are nearing obsolescence, as well as a new printer.
Other line items that show decreases include, Office Supplies, Conference and Training, Travel, Contract Services, Insurance, and Election Expenses. The Conference and Training, as well as Travel line items are decreased in anticipation of another year of largely online conferences or conferences that are nearby. Contract Services was higher last year because the District hired a consultant for a Strategic Planning process. The Insurance line item is decreased due to past years’ trends. Election expenses are lower as the May 2023 election for three Board candidates will not be billed until July.
One operating expenditures that increased is that of Bookkeeping & Audit. The District sent out Requests for Proposals for auditing services earlier this year and selected Isler CPA, LLC out of Eugene to conduct the audit for the fiscal year ending 2022. Although the firm’s proposal is on par with what the District has been paying for auditing services, additional funds were added in the event that there are any additional fees that may occur with a new contract.
The Miscellaneous line item has increased as the proposal of having a mural from the Silverton Mural Society is in play once again, with additional financial help from the Friends of the Silver Falls Library.
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 several 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 2022-2023 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 declared emergency situation.
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, which—as mentioned above – is both variable and intermittent, 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.
