1. Library Finance & the Principles of Planning New Director Orientation 2014 Michele Stricker Associate Director, Library Support Services Associate Director, Library Support Services New Jersey State Library http://lss.njstatelib.org/

2. Library Finance By the end of this session you will know: The Director’s role in the library’s planning process The Director’s role in the library’s planning process The financial responsibilities of the Director and Board of Trustees The financial responsibilities of the Director and Board of Trustees

3. Powers of the Municipal Library Board Municipal Library Law NJSA 40:54-12 The board shall hold in trust and manage all property of the library. It may rent rooms, or, when proper, construct buildings for the use of the library, purchase books, pamphlets, documents, papers and other reading matter, hire librarians, and other necessary personnel, and fix their compensation, make proper rules and regulations for the government of the library, and generally do all things necessary and proper for the establishment and maintenance of the free public library in the municipality. The board may also transfer to and receive from other libraries books, magazines, prints, maps, and other related library materials for the purpose of augmenting the interlibrary loan service

4. Powers of the County Library Commission County Library Law 40:33-8 The county library commission shall organize by the election of a chairman, and shall adopt rules and regulations for the establishment and maintenance of the county library. It shall employ a librarian, if any, as may be required, who shall hold appropriate certificates issued by the State Board of Examiners and such other employees as it shall deem necessary for the performance of its functions. It may purchase such supplies and equipment and incur such expenses as it may deem necessary to carry out the provisions of this article, but shall not incur expenses or make purchases in any fiscal year from public funds in excess of the appropriation for county library purposes for that year. In addition to its other powers, it may accept gifts, devises, legacies and bequests of property, real and personal, and hold and use the property and income of the same in any manner, which is lawful and consistent with the purpose for which the commission is created, and with the provisions of the conveyance, will or other instrument in or under which such gift, devise, legacy or bequest is made and may dispose of the same subject to the same conditions. It shall make an annual report to the financial officer of the county which shall include a statement setting forth in detail all county appropriations made to the library, other public revenues received by the library, all State aid received by the library, all expenditures made by the library and the balance of funds available. The report shall also include an analysis of the state and condition of the library and shall be sent to the county, governing body and to the State Library.

5. Board’s Financial Responsibilities Assure provision of adequate funding for library services through proper long range planning.

6. Board’s Financial Responsibilities Develop the budget in conformance with the Strategic Plan. Approve, monitor, & evaluate the budget against performance Develop the budget in conformance with the Strategic Plan. Approve, monitor, & evaluate the budget against performance Oversee management of investments, made according to the law (N.J.S.A. 40:54-19.3) Oversee management of investments, made according to the law (N.J.S.A. 40:54-19.3)

7. Investments Public funds must be deposited in banks or trusts in New Jersey organized under state laws, or with cash management Public funds must be deposited in banks or trusts in New Jersey organized under state laws, or with cash management NJSA 40A:5-15.1 provides list of securities which may be purchased by library boards, and NJSA 40:54-19.3 addresses investment of funds, regulation of bonds or securities NJSA 40A:5-15.1 provides list of securities which may be purchased by library boards, and NJSA 40:54-19.3 addresses investment of funds, regulation of bonds or securities Municipal libraries as a government agency may not use a mutual fund or anything that has stocks or bonds where the principal is at risk. Municipal libraries as a government agency may not use a mutual fund or anything that has stocks or bonds where the principal is at risk. Funds should be deposited every 48 hours Funds should be deposited every 48 hours

8. Board’s Financial Responsibilities Establish Financial Policies Board & governing body’s respective responsibilities for funding & expenditures Board & governing body’s respective responsibilities for funding & expenditures Financial procedures (budgeting, accounting, reporting auditing). Make them clear to the Board, other officials, public Financial procedures (budgeting, accounting, reporting auditing). Make them clear to the Board, other officials, public Fines, charges for lost or damaged items Fines, charges for lost or damaged items Insurance and bonding Insurance and bonding Solicitation or sales in the library Solicitation or sales in the library Gifts, donations, memorials Gifts, donations, memorials

9. Main Sources of Library Funds Local taxes & appropriations Local taxes & appropriations State aid State aid Fines, fees Fines, fees Gifts, Bequests Gifts, Bequests Grants Grants Federal funds (e-rate) Federal funds (e-rate)

10. Best Practice Library appropriation on one line in the municipal county budget Library appropriation on one line in the municipal county budget If the annual appropriation is retained in the custody of the municipal/county treasurer and disbursed after approval of the board/commission by resolution, any prior year unexpended funds from the mandatory library appropriation shall be retained in the library-controlled account dedicated for eligible purposes If the annual appropriation is retained in the custody of the municipal/county treasurer and disbursed after approval of the board/commission by resolution, any prior year unexpended funds from the mandatory library appropriation shall be retained in the library-controlled account dedicated for eligible purposes Be certain to receive your appropriation in no less than quarterly payments. Be certain to receive your appropriation in no less than quarterly payments. Note that the quarterly tax due date is the first day of February, May, August and November making the date due to the library the 20 th day of those months.

11. Fundraising Boards undertake the education of elected officials to assure that the library has the funding needed to provide excellent library service Boards undertake the education of elected officials to assure that the library has the funding needed to provide excellent library service A Foundation is often formed to fundraise in the form of a capital campaign A Foundation is often formed to fundraise in the form of a capital campaign FOL groups raise funds for expenses outside of the library’s operating budget FOL groups raise funds for expenses outside of the library’s operating budget

12. Annual Audit The library must have an annual audit that shall include verification of all cash & bank balances (NJSA 40A:5-4) The library must have an annual audit that shall include verification of all cash & bank balances (NJSA 40A:5-4) Best practice to have your own auditor, but if done by municipal auditor, make sure you get copies Best practice to have your own auditor, but if done by municipal auditor, make sure you get copies If any recommendations are made, correct them promptly. Director needs to follow up on recommendations If any recommendations are made, correct them promptly. Director needs to follow up on recommendations Send copy of audit to the Director of the Division of Local Government Services, Department of Community Affairs Send copy of audit to the Director of the Division of Local Government Services, Department of Community Affairs

13. File Annual Reports Each library receiving state aid shall annually make and transmit a report to the State Librarian…through the annual submission of the survey, application and certification (NJSA 18A:74-11 & NJSA 40:54-15) Each library receiving state aid shall annually make and transmit a report to the State Librarian…through the annual submission of the survey, application and certification (NJSA 18A:74-11 & NJSA 40:54-15) The Board of Trustees shall make an annual report to the Chief Financial Officer of the municipality which shall include all public revenues received by the library, all expenditures made by the library, the balance of funds available, an analysis of the state & condition of the library, and identification of excess funds (NJSA 40:54-15) The Board of Trustees shall make an annual report to the Chief Financial Officer of the municipality which shall include all public revenues received by the library, all expenditures made by the library, the balance of funds available, an analysis of the state & condition of the library, and identification of excess funds (NJSA 40:54-15)

14. File Annual Reports Identification & Return of Excess Funds Trustees are required to identify any “excess funds” for return to the municipality & then to taxpayers: NJSA 40:54-15 (a), October 2010 Trustees are required to identify any “excess funds” for return to the municipality & then to taxpayers: NJSA 40:54-15 (a), October 2010 Unrestricted funds above 20% of the last audited operating expenditures become “excess funds” Unrestricted funds above 20% of the last audited operating expenditures become “excess funds” The transfer requires the State Librarian’s approval: NJSA 40:54-15 (c) The transfer requires the State Librarian’s approval: NJSA 40:54-15 (c) The application requirements include an updated Strategic Plan. All libraries should have a Strategic Plan as a best practice The application requirements include an updated Strategic Plan. All libraries should have a Strategic Plan as a best practice The law and application are on the NJSL website at http://lss.njstatelib.org/library_law The law and application are on the NJSL website at http://lss.njstatelib.org/library_law http://lss.njstatelib.org/library_law Contact: Michele Stricker, mstricker@njstatelib.org. Contact: Michele Stricker, mstricker@njstatelib.org.

15. The Strategic Plan http://lss.njstatelib.org/trustees/strategic_planning The New Jersey State Library supports strategic planning as a management tool to determine a library’s mission, vision, values, goals and objectives, roles and responsibilities, and to determine benchmarks and timelines that will shape the library’s future. All libraries should have an updated strategic plan of three to five years, initiated by the Board of Trustees.

16. Strategic Plan Format Mission & Vision Statement Mission & Vision Statement Letter from Board President Letter from Board President Acknowledgements Acknowledgements Planning Methodology Planning Methodology Executive Summary Executive Summary Profile of Municipality Profile of Municipality Community Needs Assessment Community Needs Assessment Library Profile, Analysis of Current Situation Library Profile, Analysis of Current Situation Strengths & Successes Strengths & Successes Future Challenges Future Challenges Goals & Action Steps Goals & Action Steps

17. The Capital Budget The Capital Budget Municipal capital improvement expenditures are in addition to the library’s statutory minimum Municipal capital improvement expenditures are in addition to the library’s statutory minimum Libraries may not bond or make debt payments Libraries may not bond or make debt payments

18. For Municipal & Joint Libraries only Capital Expense may be approved… If all conditions of NJSA 40:54-1 et seq. (municipal & joint library statue) & NJAC 15:21-2 et seq. (State Aid) are met; If all conditions of NJSA 40:54-1 et seq. (municipal & joint library statue) & NJAC 15:21-2 et seq. (State Aid) are met; There are sufficient funds remaining for the maintenance of the library for the balance of the year in which the funds are saved or the cost occurs; and There are sufficient funds remaining for the maintenance of the library for the balance of the year in which the funds are saved or the cost occurs; and Library Board of Trustees has a written plan of at least 3 years that reflects that the long-term capital expense will contribute to the provision of efficient & effective library services, and that the plan will be made available to the State Librarian upon request Library Board of Trustees has a written plan of at least 3 years that reflects that the long-term capital expense will contribute to the provision of efficient & effective library services, and that the plan will be made available to the State Librarian upon request

19. Capital Costs supported with 1/3 mill NJAC 5:21-12.3 Furnishings & equipment Furnishings & equipment Periodic major projects such as upgrade of computer hardware & software Periodic major projects such as upgrade of computer hardware & software Replacement of roof, HVAC systems Replacement of roof, HVAC systems Site acquisition, new buildings & additions, or renovations of library buildings Site acquisition, new buildings & additions, or renovations of library buildings Initial collections for new construction or building renovations Initial collections for new construction or building renovations Rent: if such rent is paid to a private entity or school district, & is comparable with the fair market value for rent in the municipality based on cost per square footage Rent: if such rent is paid to a private entity or school district, & is comparable with the fair market value for rent in the municipality based on cost per square footage

20. Capital Planning The Library facility consists of the physical structure and the building systems, such as mechanical, plumbing, electrical, telecommunications, security, & fire suppression systems. The Library facility consists of the physical structure and the building systems, such as mechanical, plumbing, electrical, telecommunications, security, & fire suppression systems. The facility also includes furnishings, equipment and information technology, as well as the site. The facility also includes furnishings, equipment and information technology, as well as the site. Collection materials may be included if associated with an addition or a new building. Collection materials may be included if associated with an addition or a new building.

21. Elements of a Capital Plan For Larger Projects Brief history of library Brief history of library Community analysis Community analysis Documentation that project is needed Documentation that project is needed Description of how project will be funded Description of how project will be funded Timeline Timeline Draft floor plans & concept drawings Draft floor plans & concept drawings Proposed expenditures Proposed expenditures

22. Financial Responsibilities Board & Director Knows the budget procedures of the local Knows the budget procedures of the local governing unit governing unit Stays within the budget Stays within the budget Works with the library director to formulate budget to carry out library’s goals & objectives Works with the library director to formulate budget to carry out library’s goals & objectives Investigates means of cooperation with other libraries for effective use of funds, cost efficiencies, & expansion of services Investigates means of cooperation with other libraries for effective use of funds, cost efficiencies, & expansion of services

23. Financial Responsibilities The BoardThe Director Reviews complete accurate & current recordsMaintains complete, accurate, & on finances, personnel, & inventorycurrent records on finances, personnel & inventory Presents, explains, & defends the budget to Works with Board to interpret the officials and general publicbudget & financial needs of the library to public officials & the general public Helps secure funds necessary for staff & Supplies facts & figures to Board to servicesaid in interpreting library’s financial needs

24. Financial Responsibilities The BoardThe Director Submits an annual report to the CFO of thePrepares annual report for the Board on finances, personnel, & inventory Provides adequate insurance coverage for Provides a report of budget status buildings, materials, personnel, & the general& expenditures at each board meeting public

25. Summary Know your role in promoting the library’s financial health Know your role in promoting the library’s financial health Guide your Board to the resources available Guide your Board to the resources available Spend time developing, implementing, & evaluating plans and the budget to make them work Spend time developing, implementing, & evaluating plans and the budget to make them work Keep up with laws & local traditions Keep up with laws & local traditions

26. Thank you! Michele Stricker Associate Director, Library Support Services New Jersey State Library mstricker@njstatelib.org