It's been longer than usual since my last post, mostly because we have been busy dealing with the fallout from the California budget - which includes the State "borrowing" 8% or more of PVLD's property tax revenue. Since property taxes make up about 87% of our revenue, that's a big hit, and there is no expectation that we will be repaid before June of 2013. That's why my thoughts and energies have been focused on the budgeting rather than blogging.
PVLD has already felt the effect of the economic downturn and lower assessed property values which meant we've already had to overcome an $800,000 budget shortfall (12% of our total budget) for the current fiscal year by trimming library open hours, reducing our purchases of books and other materials for the library collection, eliminating our security guard service, and making cuts in every other budget category. We've also increased fees for meeting room rentals, overdue items, and movie rentals; added new fees; and expanded our Passport Service in order to bring in more revenue...so finding another $450,000 or more is no easy task.
The good news is that we started really tightening our belt in early 2009 when it became apparent that the State would likely borrow local property tax revenues to solve their own budget problem. As a result, we ended the 2008/2009 fiscal year with a surplus, and are starting this fiscal year with more money "in the bank" than we had anticipated. This came as a surprise, as we thought the budget variances we were seeing during the spring were due to the timing of invoices but they turned out to be real. Great work by the staff!
The staff has also scoured the budget for further cost savings and have managed to squeeze another $220,000 or so out of the budget through rebidding service contracts, energy management to reduce utilities costs, lower Workers Compensation and general liability insurance premiums, some organizational changes resulting in lower personnel costs, and plain old reduced spending in a number of areas. Again great work by all concerned!
The net result is that we will have a budget deficit this year, but we have sufficient money in our reserves to cover it...albeit with some cash flow challenges. We are also projecting a budget deficit for next fiscal year, but that assumes we reverse some of the budget cuts from this year. If we can hold the line on all of those cuts and possibly find some additional revenue sources (we're working hard on that!) we should come close to a balanced budget as long as property values don't drop more than expected.
It's going to be a tough few years though, with revenues projected to grow at no more than 1-2%/year, the spectre of inflation, and a labor contract that seemed very conservative a year ago but has "salaries and related" expenses rising at a significantly greater rate than our revenues.
We'll be paying close attention to every expenditure, thinking "outside the box" about how to generate more revenue, being very cautious about adding new programs given our limited staff and financial resources, and supporting the Friends of the Library in their efforts to expand their fundraising.
Given what I've seen our staff achieve as we've navigated through the rough budget waters of the past few months, though, I think we'll actually come out the other side of this crisis in good shape, and maybe even stronger than we were....and I don't think that is just wishful thinking!
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