HomeMy WebLinkAboutAGENDA REPORT 2006 0503 CC REG ITEM 09EITEM-9. E.
City cceundi INpeting
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ACTION
MOORPARK CITY COUNCIL"
AGENDA REPORT
a cv
TO: The Honorable City Council A A--t
FROM: Mary K. Lindley, Director of Parks, RecreatioA, and �
Services Director
DATE: April 20, 2006 (Meeting of May 3, 2006)
SUBJECT: Consider Ventura County Library Revenue Proposal
BACKGROUND
At the City /County Managers' meeting on April 20, 2006, the City was informed that
County staff plans to propose a redistribution of County General Fund and return -to-
source property tax funds within the Ventura County Library Agency. County staff
intends on presenting the proposal to the Library Commission on May 4 and to the
Board of Supervisors subsequent to that meeting.
The County's proposal for redistributing funds reduces the operating revenue for the
Moorpark Library by approximately $62,000 in FY 2006/07. Attachment A to this
Agenda Report illustrates the existing distribution of library revenue and Attachment B is
the proposed distribution.
County Fundinq
Since the formation of the MOU between the County and the cities with County libraries,
the County has contributed approximately $600,000 per year to the Library Agency in
the form of Vehicle License Fees (VLF). These funds were distributed among all of the
County libraries based on a population and circulation formula. VLF revenue was
eliminated several years ago and the County continued the contribution from its general
fund. In FY 2005/06, the Moorpark Library received approximately $42,960 in County
general fund revenue. However, the Board of Supervisors will be asked to consider
restricting these funds to the libraries that operate with a funding deficit. This would
exclude the Camarillo and Moorpark libraries since they are currently the only two (other
that the County unincorporated areas) that are located in service areas that have an
annual surplus of return -to- source property tax.
City staff agrees that the County has the right to direct its funds to the libraries that do
not generate sufficient funds to maintain basic service levels, and supports that
component of the County's proposal.
000110
Honorable City Council
May 3, 2006
Page 2
Property Tax
Under the MOU, the property tax generated within a service area remains in that service
area (return -to- source). Additionally, the Budget Policies adopted by the Library
Commission state that in the event property tax is more than sufficient to operate a
library at the baseline level, any unbudgeted balance will be spent within the service
area from which it was generated. It is anticipated that the Moorpark service area will
generate $801,853 in property tax in FY 2006/07. In the same fiscal year, the operating
budget for the Moorpark Library is estimated to be $645,506, leaving an unbudgeted
balance of $156,346.
In addition to addressing property tax, the Budget Policies set a target contingency fund
of 2 Y2 percent of the proposed expenditures. The Policy goes on to state that the
contingency percentage will be adjusted downward if it requires any service area to
utilize local tax resources to fund such a level of expenditure. Historically, the Library
Agency has funded its contingency fund from the system -wide fund balance. The fund
balance was typically created from prior year's savings. The Library Commission has
never proposed using service area property tax to fund its contingency.
County staff is now proposing to fund the contingency fund from the service area
property tax revenues (off the top), which deviates from the current policy. If this
proposed policy change is implemented, approximately $21,744 from Moorpark service
area property tax revenue, which would otherwise be available for Moorpark Library
enhancements, will be diverted to the system -wide contingency fund.
DISCUSSION
As stated above, City staff concurs with the County's right to direct its general fund
dollars to the library service areas with funding deficits. Staff's concern is with what
appears to be a County's proposal to take action that goes against existing budget
policies, i.e.; change one of the budget policies by taking 2 '/2 percent of each service
area's local property tax for the system -wide contingency without appropriate notification
and input on the part of all MOU parties.
In reviewing the Library MOU, it is clear that the Library Commission is "empowered to
oversee the policy matters of the Library System and make recommendations to the
Board of Supervisors." The MOU goes on to state that the "Board of Supervisors may
override a recommendation of the Commission by a 4 /5ths vote." It also states that
"Staff to the Commission shall be the Library System Director with assistance from the
seven City Managers, or their respective alternates, and the County Chief
Administrative Officer... The seven City Managers and the County Chief Administrative
Officer shall assist with the oversight of the County Library administrative and
operational activities. They shall participate in the review of the annual budget and any
amendments as well as performance evaluations of the Library System Director. They
shall provide recommendations to the Commission as they deem necessary."
F:\Community Services\ADMINISTRATIVE \CC Reports \2006 \5 -3 -2006 (Library Revenue Proposal.doc
000111
Honorable City Council
May 3, 2006
Page 3
In your staff's opinion, County staff has failed to provide adequate time for the formal
consideration process to take place. The City Managers were only notified about the
April 20 meeting one day earlier and they were not told the subject matter or provided
with any background material so that they could be prepared to discuss and offer
alternatives. Now County staff has placed the matter before the Library Commission
with the intent of going forward to the Board of Supervisors shortly thereafter.
In City staff's opinion, the MOU parties and the Library Commission should be given
sufficient time to discuss any budget or policy changes prior to action on the part of the
Board of Supervisors. Library Commissioners should be given the opportunity to take
the County's proposal regarding the use of service area property tax to their respective
policy bodies for direction prior to the Commission discussion on May 4. The Library
Commission should then be given time to discuss the matter and to offer a formal
recommendation to the Board of Supervisors. City staff believes this process is being
circumvented and is requesting that more time be given to the consideration of budget
policy change, in this case, the use of return -to- source property tax funds to fund the
contingency. Again, staff believes the County's decision to allocate their general
revenue to deficit libraries is appropriate and the action does not need further
discussion.
On April 26, the City received the Library Commission's Agenda for its May 4 meeting.
The Agenda includes a staff report (Attachment D) submitted by County staff along with
a proposed FY 2006/07 budget. The proposed budget is the same as Attachment B.
The report does not discuss the County's proposal to the City Managers to use return -
to- source property tax off the top to fund the contingency fund, although it makes
mention of a balanced budget "without using the fund balance" (that is how the
contingency has been funded in previous years). The report's attached revenue budget
sheet reflects the County's contingency fund proposal, reducing the Moorpark Library
property tax revenue by $21,744. The County's staff report also states that "the service
areas have now been adjusted to incorporate the changes recommended by the
Commission and approved by the Board of Supervisors in 2005." The changes the
Board approved last year included approval of Option Four, which in addition to
redistributing the property tax within service areas, redraws the service area boundaries
to make them consistent with "areas of interest." The statement in the County's staff
report is troubling because it was understood that Option Four would not be
implemented. Our concern is heightened because this is the second consecutive year
that the County /Library staff attempted to change long- standing MOU policy with little
notice. City staff would like to see more discussion of these matters before requesting
that the Library Commission take action.
It is recommended that the City's position be that addition time be given to the matter of
the use of return to source property tax funds to fund the contingency. In the end it may
be that, everyone is in agreement with the County's proposal. However to reach a
conclusion, each MOU party needs to feel that they have been given a reasonable time
period to seek clarification and to consider that matter.
FACommunity Services\ADMINISTRATIVE \CC Reports \2006 \5 -3 -2006 (Library Revenue Proposal.doc
000112
Honorable City Council
May 3, 2006
Page 4
STAFF RECOMMENDATION
Direct the City's Library Commission representative, Councilmember Harper, to request
that no action be taken on the matter involving the funding of the library contingency
fund from return -to- source property tax until the MOU parties have sufficient time to
discuss it and to oppose the use of return -to- source property tax for the contingency
fund if the Library Commission elects to vote on a recommendation.
Attachment: A — FY 2006/07 Budget Under Current Budget Policies
B — FY 2006/07 Budget as Proposed by County
C — Adopted Budget Policies
D — County Library Commission Staff Report
FACommunity Services\ADMINISTRATIVE \CC Reports12006\5 -3 -2006 (Library Revenue Proposal.doc
000113
ATTACHMENT.,el
GENERAL FUND CONTRIBUTION DISTRIBUTED
BY
CIRC /POP
0
VENTURA COUNTY LIBRARY
A
(B
(C)
(5)
(D)
2006/2007 BUDGET WORKSHEET
-
-
ADJ
(E)
ADJ
(T
(E)
C
USING AREAS OF INTEREST
REVENUES
SURPLUS or
(DEFICITS)
COUNTY
GENERAL
SURPLUS or
ION
SURPLUS or
PUB. LIB. FUND
ADJ
SURPLUS or
ADJUSTED
4/17/2006
PROP ERTY
FUND
(DEFICITS)
(DEFICITS)
REVENUES
(DEFICITS)
APPROP.
ADJUSTED
REVENUES
TAX
CONTRIBUTION
OTHER UNINC
AREA
FY06 -07
FY06 -07
OTHER
REVENUES
(B)-(A)
DIST. BY CIRC /POP
(C )+(5)
SURPLUS REVENUES
(D) +(5)
(E )+(7)
(A) +(E)
FY06 -07
PROJ. EXPENDITURES
IN
$600,000
$238,652
$183,700
1 CAMARILLO
2 FILLMORE
$1,845,134
5
$2,122,82
$277,448
$132,900
$410,348
f
3 MOORPARK
$267,361 $136,793
$645,506 $801,853
$130,568
$16,980
$113,588
$410,348
$113,588)
$410,348
$2,255,482
$2,255,482
4 OJAI/MEINERS OAKS /OAK VIEW
5
$850,752
$728,626
$156,347
$122,126
$40,920
$197,267
$197,267
$90,378
$23,209
$244,152
$244,152
PORT HUENEME
6 SIMI VALLEY
$661,984
$571,185
$gp 799
$49,380
$37,620
$72,746
$53,179
$8,638
$64,108
$51,009
$197,267
$13,099
$842,773
$837,653
$842,773
$837,653
7 VENTURA
8 El
$1,855,567 $1,771,324
$2,661,661 $2,448,081
$84,243
$213,580
$141,660
$57,417
$53,179
$57,417
$42,313
$10,866
$651,118
$651,118
RIO
8 OAK PARK
$122,774
$108,671
$14,103
$151,920
$6,420
$61,660
$7,683
$61,660
$0
$0
$57,417
$0
$1,912,984
$2,661,661
$1,912,984
$2,661,661
8 PIRU
8 OTHER
$363,798
$60,258
$333,521
$41,684
$30,277
$18,574
$17,520
$12,757
$7,683
$12,757
$p
$0
$0
$122,774
$122,774
UNINCORPORATED
$307,821
$546,473
$238,652
$4,680
$13,894
$13,894
$p
$0
$363,798
$363,798
CONTINGENCY 2.5%
$241,065
$0
$$13,652
($$13,652
$p
$0
$0
$60,258
$60,258
CAPITAL REPAIR/REPLACEMENT
$241065
$0
($241,065
$134,020
($107,045
0
$107,045
$307,820
$307,820
RESERVE 4%
$134,020
$134,020
TOTAL:
$385,705
$70,269,386
$0
59,610,794
$385,705
{ ;658,592)
$0
5600,000
$385,705
$0
$385,705
0
$385,705
$0
( ;58,592)
sp
(558,592)
$183,700
5125,108
;10,394,494
$0
;10,394.494
RECOMMENDED SCENARIO:
VENTURA COUNTY LIBRARY
2006/2007 BUDGET WORKSHEET
USING AREAS OF INTEREST
4/18/2006 -
CAMARILLO
VIEW
VENTURA
OTHER UNINCORPORATED
CONTINGENCY @ 2.5%
CAPITAL REPAIR/REPLACEMENT
RESERVE 0 4%
TOTAL:
FY06 -07
$1,845,134 $2,066,751
$221,617
$267,361
$133,563
$133,798
$645,506
ATTAC H,, r r NT2
$134,603
GENERAL FUND
CONTRIBUTION
DISTRIBUTED
TO
$559,590
$102,394'
$1,855,567
:jai
$130,142'
$2,661,661
OFFSET DEFICIT SERVICE AREAS
$272,931
$122,774
$105,706
ItI7 ,068
$363,798
$324,457
$39,341
$60,258
$40,744
$19,514
Tq
$530,996
$223,176
(5)
(D)
$0
$385,705
$0
($385,705)
$1,855,567
$1,855,567
-
$0
_ (6
(E)
(7
$0
(F)
$2,661,661
$39,341
$0
--
$0
$0
ADJ
$122,774
ADJ
$0
$0
$0
$363,798
REVENUES
SURPLUS or
(DEFICITS)
REDISTRIBUTION
OF
SURPLUS or
PUB. LIB. FUND
SURPLUS or
COUNTY
$60,258
ADJ.
SURPLUS or
$U
$0
ADJUSTED
$307,820
$307,820
PROPERTY
($316 ,879)
OTHER UNiNC
(DEFICITS)
REVENUES
(DEFICITS)
GENERAL
(DEFICITS)
ADJUSTED
APPROP. REVENUES
Tax
$154,593
AREA
-
FUND
FY06 -07 FY06 -07
OTHER
(B)-(A).
SURPLUS REVENUES
+ 5
(�) O
CONTRIBUTION
REVENUES
(D) +(6)
(E)*(7)
(AWF1
FY06 -07
$1,845,134 $2,066,751
$221,617
$267,361
$133,563
$133,798
$645,506
$780,109
$134,603
$850,752
1,713,656
$137,096
$661,984
$559,590
$102,394'
$1,855,567
$1,725,425
$130,142'
$2,661,661
$2,388,730
$272,931
$122,774
$105,706
ItI7 ,068
$363,798
$324,457
$39,341
$60,258
$40,744
$19,514
$307,821
$530,996
$223,176
$241,065
$241,065
$0
$385,705
$0
($385,705)
$10,269,38611 $9,610,794 /Sas"491
176 II $183,700 I _ $600,000
_
$01 ($658,592)0 $183,700 ($4748921
$600,000 $125109 510.394 -494 Sin'I eol
$Z21,617
$133,79 8
$35, 216
$221,617
$98,582
$0
$221,617
$2,066,751
$2,066,751
$134,603
$134,603
$98,582
$0
$267,361
$267,361
$8,638
$128,458
$33811
,
$94,647
$94,647
$134,603
$780,109
$780,109
$102,394
($130,142
$26,951
$34,254
$75,444
$75,444
$0
$0
$850,752
$661,984
$850,752
$661,984
$69.789
$203,142
$53,468
$95,888
$149,674
$95,888
$149,674
$0
$1,855,567
$1,855,567
$17,068
$0
-
$0
$0
$2,661,661
$2,661,661
$39,341
$0
$0
$0
$0
$122,774
$122,774
$19,514
$0
$0
$0
$363,798
$363,798
223,176
$0
$0)
$0
$60,258
$60,258
$0
$U
$0
($0
$307,820
$307,820
$68,826
($316 ,879)
$0
($316,879)
$0
$85,767
$0
($231,11241
$241,065
$241,065
$154,593
$154,593
$01 ($658,592)0 $183,700 ($4748921
$600,000 $125109 510.394 -494 Sin'I eol
' ACHMENE C
VENTURA COUNTY LIBRARY
Budget Policies
(Revised June 4, 2002)
1. The Memorandum of Understanding sets forth a baseline level of service for
hours at each library.
2. Property tax, including vehicle license fee revenue, is to be used to support
library expenditures within the service area where it was generated.
3. In the event that service area property tax, including vehicle license fee
revenue, is more than sufficient to operate a library at the baseline level, any
unbudgeted balance will be spent within the service area from which it was
generated, whether for library materials, equipment, or building needs.
4. Additional funds generated within service areas, such as parcel tax revenues,
general fund contributions, donations, etc. can be used for any library
purpose within the service area from which the funds originated. Additional or
enhanced funding is not to be used to backfill the deficit of any service area.
5. First priority for use of state Public Library Fund revenue will be to ensure the
baseline level of service at all libraries.
6. The cost to expand existing buildings, to undertake extensive major
renovation, or to construct new buildings shall be the responsibility of the
respective city for Service Areas #1 -7, and the county for Service Area #8,
except that an unbudgeted balance from the property tax, including vehicle
license fee revenue, as defined in Budget Policy #3, may be used for'building
funds, provided that any interest generated accrues back to the building fund
or is used for library operations, including enhancing the level of service.
Page 1 of 2
Attach me 6 6 116
7. Henceforth, any increase in maintenance costs due to expansion, renovation,
or new construction is the responsibility of the service area jurisdiction.
The service area jurisdiction is responsible for costs over and above those for
current space. For instance, if current space is 10,000 square feet, and
10,000 more square feet is added, the library district will continue to }gay for
the costs of the original square footage, and the service area jurisdiction will
be responsible for those costs attributable to the additional space. Even
though new construction may prove more energy efficient and thus, less
costly, the existing costs remain the base for which the library district is
responsible.
Additional staff required by additional space will be a responsibility of the
service area jurisdiction. The need will be determined either by consultants or
by library administration, in consultation with the service area. In some
cases, it may be possible to expand without requiring more staff, but this
requires careful space and operations planning.
If any service area jurisdiction is unsatisfied with the standard of care
provided, they should provide the service themselves, with the knowledge
that any savings on the part of the library district will be applied to services or
materials at that library.
8. A target contingency fund of 2 1h % of proposed expenditures is to be
included in each fiscal year budget. This contingency percentage will be
adjusted downward if, in the future, it requires any service area to utilize local
tax resources to fund such a level of expenditure.
9. A target capital repair or replacement reserve of 4% of proposed expenditures
is to be included in each fiscal year budget. This capital reserve percentage
will be adjusted downward if, in the future, it requires any service area to
utilize additional local tax resources to fund such a level of expenditure.
10. If actual revenues from any given service exceed estimates and, therefore,
require no Public Library Fund backfill, then those additional PLF revenues
should be reserved for the purchase of books and materials and distributed
proportionately to all the service areas on an equally weighted
population/circulation percentage basis.
Approved by the Library Services Commission: May 9, 2002
Approved by the Board of Supervisors: June 4, 2002
Page 2 of 2
000117
ATTACHMENT-P-
2006 / 2007 REQUESTED BUDGET
The agenda packet being mailed out contains just two spreadsheets: 1) General Fund
Contribution, and 2) Revenue Detail. These were provided to the city managers group
and discussed with them on April 20. Budgets for individual libraries and updated
property tax revenue will be available at the Commission meeting. A representative
from the County Chief Executive Office (CEO) will be on hand at that time to answer
questions.
As you will see on the budget spreadsheets, the service areas have now been adjusted
to incorporate the changes recommended by the Commission and approved by the
Board of Supervisors in 2005. Property tax revenue has been distributed according to
2004/05 data from the Auditor /Controller. When 2005/06 estimates are received from
the Auditor, the 2006/07 library budget will be modified to reflect a 10% increase over
2005/06. New spreadsheets with this updated information will be distributed at the
Commission meeting. It is anticipated that this adjustment will result in slightly higher
revenues.
For the first time, revenues and appropriations have been balanced without using the
fund balance. A County General Fund contribution of $600,000 is also shown for the
first time, being used to bring all service areas up to baseline levels and to help fund the
capital repair /replacement reserve. Thus, the return -to- source principle has been
achieved again, as no money is taken from one service area to help fund another.
Considering the many repair and maintenance needs of the system, it is recommended
that, starting in 2006/07, the capital repair /replacement reserve be spent down each
year instead of rolling over as has been done previously. A list of current needs can be
presented at the next Commission meeting.
Agenda Item 8
0 � 0117A