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CAL Annual Conference Library Finance 101 November 21, 2009

Library Finance. 1 min: Introduction Andrew Romero 5 min: District Revenue/Issues- Chris Brogan 5 min: Municipal Library Revenue/Issues- Steve Wasiecko 9 min: TABOR Mike Varnet 5 min: Basic Financial Reports Chris Brogan 15 min: Annual Fiscal Cycle - Andrew Romero 4

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CAL Annual Conference Library Finance 101 November 21, 2009

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    1. CAL Annual Conference Library Finance 101 November 21, 2009

    2. Library Finance 1  min:   Introduction – Andrew Romero 5 min: District Revenue/Issues - Chris Brogan 5 min: Municipal Library Revenue/Issues - Steve  Wasiecko 9 min: TABOR – Mike Varnet 5 min: Basic Financial Reports – Chris Brogan 15 min: Annual Fiscal Cycle - Andrew Romero 4   min: Q&A

    3. Property tax – dedicated mill levy Specific Ownership (SO) tax Abatements & refunds – certify mill -Revenue calculations -5 ˝% limit Library Finance

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    9. Background Key Issues (not all inclusive) Tax limit Property tax revenue limitation Fiscal year spending limitation Multi-year financial obligations Emergency reserves Library Finance

    10. TABOR Definitions "District" means the state or any local government, excluding enterprises. "Emergency" excludes economic conditions, revenue shortfalls, or district salary or fringe benefit increases. "Enterprise" means a government-owned business authorized to issue its own revenue bonds and receiving under 10% of annual revenue in grants from all Colorado state and local governments combined. "Fiscal year spending" means all district expenditures and reserve increases except, as to both, those for refunds made in the current or next fiscal year or those from gifts, federal Funds, collections for another government, pension contributions by employees and pension fund earnings, reserve transfers or expenditures, damage awards, or property sales. "Inflation" means the percentage change in the United States Bureau of Labor Statistics Consumer Price Index for Denver-Boulder, all items, all urban consumers, or its successor index. "Local growth" for a non-school district means a net percentage change in actual value of all real property in a district from construction of taxable real property improvements, minus destruction of similar improvements, and additions to, minus deletions from, taxable real property. Library Finance

    11. TABOR Limitation Factors Inflation Consumer Price Index – Denver/Boulder/Greeley Growth Actual valuation information provided by County Assessor Library Finance

    12. Tax Limit Advance voter approval for: Any new tax Tax rate increase Mill levy increase Tax policy change causing a net tax revenue increase Library Finance

    13. Property Tax Revenue Limitation Current year limit – prior year base adjusted for growth and inflation Property tax revenue excluded from limit Refund and abatements Voter-approved adjustments Library Finance

    14. Property Tax Revenue Limitation Example 2009 property tax revenue $5,000,000 Inflation 1% Growth 2.5% Total TABOR factors 3.5% 2010 property tax revenue limit $5,175,000 Library Finance

    15. Fiscal Year Spending Limit Really a revenue limit Current Year Limit = prior year FYS adjusted for inflation and growth All governmental expenditures plus reserve increases with the exception of: Gifts/donations Federal funds Collections for another government Pension contributions by employees and pension earnings Reserve transfers or expenditures Damage awards Property sales Library Finance

    16. Multi-Year Financial Obligations Prohibited by TABOR except for: Voter approved Setting cash aside irrevocably to cover debt service Non-appropriation clause Check with Legal Counsel Library Finance

    17. Emergency Reserves 3% of Fiscal Year Spending Can’t be used for: Economic conditions Revenue shortfalls Salary or fringe benefit increases Library Finance

    18. Monthly reports – internal Reports for board (balance sheet, cash flow, statement of revenue & expense) Reports for departments Annual reports – external General Purpose Financial Statements Comprehensive Annual Financial Report GFOA award program Library Finance

    19. Annual Audit report (statutory requirement) GASB 34 compliance 1. Fund statements; Government-wide statements 2. Capital assets – including capitalized books 3. Depreciation Submit report to Division of Local Government and State Auditor; bond holders; D&B; attorney; bond insurers; etc….. Mount on web site Library Finance

    21. The Process of Budget Development Step 1: what the Library hopes to accomplish next year Step 2: determine total financial resources necessary for what the library wants to accomplish in the coming year Step 3: securing the funding needed to carry out the planned service program Library Finance

    22. Typical budget calendar February-March: Review annual report and previous year’s data Spring: Review long-range plan and library service goals in light of trends. Mid-year: 1. Review expenditures and revenues. 2. Begin budget process, establish budget calendar and guidelines. 3. Review budget guidelines and obtain direction from board or Finance committee. Library Finance

    23. Typical budget calendar (cont.) Late summer: Prepare draft budget. Late summer / Early fall: Draft budget to governing body for approval. Fall: Adjustments make if necessary, and approval needed before December 15th to meet deadline for mill levy certification. Library Finance

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    25. Budget Preparation The budget preparation process has two significant categories. These categories can be approached separately or together when preparing the budget. Operating budget: 1 Personnel 2 Ongoing expenses 3 Fixed costs 4 Ongoing funding sources (property tax, utility fees, charges for services) Capital Budget: 1 Long-term 2 Large projects 3 Equipment 4 Related funding/debt (mineral taxes, capital grant) Library Finance

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    29. COMMON ACRONYMS CAFR – Comprehensive Annual Financial Report CGFM – Certified Government Financial Manager CGFO – Certified Government Finance Officer CGFOA – Colorado Government Finance Officers Association CPA – Certified Public Accountant FASB – Financial Accounting Standards Board (private sector) GAO - Governmental Accountability Office GAAP – Generally Accepted Accounting Principles GAAS - Generally Accepted Auditing Standards GAGAS – Generally Accepted Government Auditing Standards GAS – Government Auditing Standards (the Yellow Book) GASB – Government Accounting Standards Board (issues statements for implementation) GFOA – Government Finance Officers Association (professional association – makes recommendation to GASB) Library Finance

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