We are putting the finishing touches on the PVLD "mid-year" budget, which will be presented to the Board of Trustees next week. PVLD operates on a July 1-June 30 fiscal year, and each January we take a look at our actual revenues and expenses for the first half of the year and then make adjustments to our budget to reflect any circumstances that were unforeseen when the budget was approved the previous spring. We also update our forecast for the next fiscal year to give us a more realistic sense of what our financial future looks like.
The good news is that despite some pluses and minuses in individual budget line items, we are forecasting that we will end the current fiscal year with a very slightly larger than anticipated surplus thanks to some great work by the staff to cut costs and to some unexpected grants and other income. This will allow us to fund all necessary capital maintenance projects this year and next.
The bad news is that as we look to 2009/2010 we have cut back our forecast of anticipated property tax revenue and are facing inflationary cost increases in a number of areas. The result is that we are currently facing a projected deficit of $124,000 in 09/10, will barely meet our minimum reserve policy, and will not have enough to fund necessary capital maintenance projects in 2010/2011. And even if the economy and housing markets improve in the next year or so, the current decline in the stock market almost certainly means higher pension costs in 2011/2012 and beyond.
On the (somewhat) brighter side, coming up with $124,000 in additional revenues and/or cost savings for next year won't be easy, but it's less than 2% of our total budget...and we are much better off than many other organizations.
Recently I attended a meeting of about 25 Library Directors from the greater Los Angeles area, most of whom reported that they are being asked by their jurisdictions (unlike PVLD and Buena Park most public libraries are part of city or county government) to cut their budgets by anywhere from 5% to 15%....targets that are almost impossible to achieve without significant cuts to staff and services.
That was followed by a conversation last Friday with State Librarian Susan Hildreth, who was at work despite the fact that like other State employees she and all of the other State Library staff were technically on furlough and not being paid.
At lunchtime today I heard our local School Superintendent, Walker Williams, talk about the huge budget cuts the School District is facing in the current fiscal year, which have already resulted in the issuing of layoff notices to many of the non-classroom staff including all of the library and technology aides in the elementary schools, with many more layoffs to come.
The grim news from the School District was followed by seeing this notice on the Buena Park Library District blog announcing reductions in employee pay and benefits this fiscal year.
My conclusion? Based on what we know today we certainly have a challenge ahead of us, but it's not an insurmountable one. This spring we're working on a new strategic plan, which will certainly include finding ways to raise revenues and making careful choices about how we spend our money...and knowing how creative our employees are I think we'll find a way to close the budget gap without significantly reducing services and without making employees bear the burden in their paychecks.
Of course if the State decides to "borrow" our property tax revenues as a way of solving their budget mess, or the impact of the stock market decline on our pension costs comes sooner than 2010/11, then the challenge will be much greater and all bets are off. In the meantime we'll be doing verything we can to negotiate these very tricky waters.
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