BUDGET AUDIT COMMITTEEWEDNESDAY, MARCH 18, 2020

11:00 AMCENTRAL LIBRARY

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The Committee welcomes and encourages participation at Committee meetings. Comments will be limited tothree minutes so that everyone may be heard. Public testimony will be permitted on each agenda item as it iscalled. Matters under the jurisdiction of the Committee, and not on the posted agenda, may be addressedduring the general public comment period. When several persons address the Committee on a single matter,the Committee may limit testimony to 15 minutes or as the Chair may determine.

This agenda provides a brief description of each item to be discussed. The Committee may take action differentfrom that recommended by staff. Categorization of an item as other than an "action item" does not precludethe Committee from taking action with respect to that item.

Meetings are accessible to persons with disabilities. Requests for interpreting services, assistive listeningdevices or other special assistance should be made to the Clerk of the Board by calling 916.264.2808 (TDD916.264.2855) at least 48 hours prior to the meeting.

Sacramento Public Library Authority Board

Sue Frost Chair

Board of SupervisorsCounty of Sacramento

Eric GuerraVice Chair

City CouncilCity of Sacramento

Angelique AshbyCity Council

City of Sacramento

Larry CarrCity Council

City of Sacramento

Shawn FarmerCity CouncilCity of Galt

Garrett GatewoodCity Council

City of Rancho Cordova

Rick Jennings, IICity Council

City of Sacramento

Patrick KennedyBoard of Supervisors

County of Sacramento

Stephanie NguyenCity Council

City of Elk Grove

Don NottoliBoard of Supervisors

County of Sacramento

Susan PetersBoard of Supervisors

County of Sacramento

Phil SernaBoard of Supervisors

County of Sacramento

Jeffrey SloweyCity Council

City of Citrus Heights

Darren SuenCity Council

City of Elk Grove

Allen WarrenCity Council

City of Sacramento

Jennifer V. GoreAuthority Counsel

Rivkah K. SassLibrary Director

Secretary of the Board

Johnny EaFinance Manager

Treasurer

Roxana PuernerClerk of the Board

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BUDGET AUDIT COMMITTEEWEDNESDAY, MARCH 18, 2020, 11:00 AM

CENTRAL LIBRARY

1. Mid-Year Budget Update Fiscal Year 2019-20

1.1 Mid-Year Budget Update Fiscal Year 2019-20Review and recommend1.1 FY 19-20 Mid-Year Budget - Staff Report.pdf1.1 FY 19-20 Mid-Year Budget - RES.docx1.1 FY 19-20 Mid-Year Budget-Exh A Board Actions.pdf

2. Annual Supplemental Funding Allocation for Fiscal Year 2019-20

2.1 Annual Supplemental Funding Allocation for Fiscal Year 2019-20Review and Recommend2.1 Annual Supplemental Funding Allocation For Fiscal Year 2019-20 - staff report.pdf2.1 Annual Supplemental Funding Allocation For Fiscal Year 2019-20 - RES.docx2.1 Exhibit A - Supplemental Funding Factor Calculation for FY 2019-20.pdf2.1 Annual Supplemental Funding Allocation For Fiscal Year 2019-20 - Attachment B - FBReserve Analysis.pdf

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March 18, 2020 Agenda Item 1.1: Mid-Year Budget Update Fiscal Year 2019-20

TO: Sacramento Public Library Authority Board

FROM: Johnny Ea, Finance Manager

RE: Mid-Year Budget Update Fiscal Year 2019-20

SUGGESTED ACTION(S):Review and recommend

ATTACHMENT(S): 1.1 FY 19-20 Mid-Year Budget - Staff Report.pdf

1.1 FY 19-20 Mid-Year Budget - RES.docx

1.1 FY 19-20 Mid-Year Budget-Exh A Board Actions.pdf

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Sacramento Public Library Authority

March 26, 2020 Agenda Item 8.1: Mid-Year Budget Update FY 2019-20 TO: Sacramento Public Library Authority Board Members FROM: Rivkah K. Sass, Library Director Johnny Ea, Finance Manager RE: Mid-Year Budget Update Fiscal Year 2019-20

RECOMMENDED ACTIONS: Adopt Resolution 20-13, A Resolution Amending the Final Budget for the Sacramento Public Library Authority for Fiscal Year 2019-20. Background The Library presents its budget on a cycle that includes the preliminary budget in May, a finalized budget in September and a mid-year adjustment. The preliminary budget approved at the May 23, 2019 Authority Board meeting was $50,491,000. The Board approved the September final budget of $51,486,500. The change reflected using $498,000 of County fund balance and $382,000 of combined City of Sacramento fund balance to improve the collection and make security upgrades. The remaining $115,500 included Moore and Fratt Trusts fund balance in the amount of $103,500 to supplement the collection and $12,000 in Hurst fund balance to purchase Neil Gaiman books in advance of Sacramento Public Library hosting the 50th anniversary of the May Hill Arbuthnot Lectureship this spring. The changes to the mid-year budget are very minor, reflecting an increase in revenues of $453,524 and an increase in expenditures of $556,550 for a net increase in use of fund balance of $103,026. Revenue Update • County property tax payments received year to date indicate the original budgeted amount is slightly

low and is being increased $100,000 to $26,450,000. • The City of Sacramento’s General Fund contribution in the amount of $10,820,600 is unchanged from

the September adopted budget. Included in that amount is $506,000 from Measure U and $185,000 from the Summer Youth and Community Programming for the Valley Hi-North Laguna, Martin Luther King Jr., and Colonial Heights libraries.

• The City of Sacramento Parcel Tax revenues received year-to-date indicate the budgeted amounts

for Measure X of $5,995,000 and Measure B of $2,274,000 appear accurate at this time. • Interest income received through the first six months totaled $372,235. Therefore, interest income

is increased by $40,000 for a total budget of $590,000.

• Insurance approved $68,600 for the Amber Clark Teen Room at the North Natomas Library. • In December 2019 the Board approved the grants, gifts and donations received between July and

September 2019 totaling $105,954. In January 2020 the Board approved the grants, gifts and donations received between October and November 2019 totaling $138,970.

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Expenditure Update • Salary expenditures are reduced $500,000 due to vacancy savings year-to-date. • Expenditures for services and supplies are increased $415,700; $200,000 for a facilities masterplan,

$124,000 for the Galleria’s new projector and screens, and $91,700 for the Amber Clark Teen Room at the North Natomas Library.

• Expenditures for capital outlay are increased $100,000 for new public address systems in most

county libraries. • Previously appropriated Sylvan Oaks Library refresh of $300,000 in capital outlay is carried over

from fiscal year 2019 due to the timing of invoices. The refresh was completed in late June 2019.

• The Sacramento Public Library’s obligation of the Mountain Valley Library System unfunded CalPERS accrued liability for former staff is $134,756. This is covered through vacancy savings.

• In December 2019 the Board approved the grants, gifts and donations received between July and

September 2019 totaling $103,276. In January 2020 the Board approved the grants, gifts and donations received between October and November 2019 totaling $137,574.

Position Control Update Repurpose a vacant funded 1.0 FTE General Services Worker position to an Early Learning and Development position. The position will be a cross-functional manager who is an early learning subject matter expert as well as skilled in strategic major-gift fundraising and grant writing. The position meets both the Library’s need for philanthropic support as well as meeting the goals of the strategic plan to position Sacramento Public Library as the region’s early learning hub. The incumbent will work with youth services librarians to innovate, develop new service delivery models and further the work in creating exemplary early learning experiences through the library and its community partners.

• No net fiscal impact. FY 2020-21 Budget • Staff is in the process of updating revenue projections from all sources as an element of the FY 2020-

21 budget process. • Staff is currently waiting on projections from the County Assessor for FY 2020-21. • The City of Sacramento advised staff to expect a $500,000 increase in its general fund contribution

for FY 2020-21.

• City of Sacramento Parcel Tax revenues will increase by the Consumer Price Index San Francisco Area, not to exceed 3%.

• The Library’s CalPERS Employer Contribution Rate is expected to increase by approximately 1.4% to

18.50% in FY 2020-21. • The Library’s insurance broker has indicated that rates on property insurance in the coming year are

expected to rise between 15 and 20%. Staff is planning accordingly. 5

• Staff anticipates presenting a FY 2020-21 Proposed Budget at the May 28, 2020 Authority Board

meeting.

ATTACHMENTS: Resolution 20-13, A Resolution Amending the Final Budget for the Sacramento Public Library Authority for Fiscal Year 2019-20.

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Sacramento Public Library Authority

RESOLUTION NO. 20-13

Adopted by the Governing Board of the Sacramento Public Library Authority on the date of:

March 26, 2020

SACRAMENTO PUBLIC LIBRARY AUTHORITY’S FISCAL YEAR 2019-20 MID-YEAR BUDGET

BE IT HEREBY RESOLVED BY THE GOVERNING BOARD OF THE SACRAMENTO PUBLIC LIBRARY AUTHORITY AS FOLLOWS:

1. The Sacramento Public Library Authority’s FY 2019-20 Proposed Mid-Year Budget totaling $51,754,380 in resources available and $55,258,306 in use of funds as presented in Exhibit A is approved.

2. The Library Director is authorized to take the necessary actions to implement budget changes as noted herein.

Sue Frost, ChairEric Guerra, Vice Chair

ATTEST:

Rivkah K. Sass, Secretary

By:Roxana Puerner, Assistant Secretary

ATTACHMENT(S):Exhibit A: Sacramento Public Library Authority FY 2019-20 Proposed Mid-Year Budget

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Exhibit A

101 111 115 201 202 204 205 300's 400's 500's 600's Total

Shared Sys Wide Books Hurst County City Parcel Tax B Parcel Tax X Donations IT

Replacement Moore &

Fratt Grants & Projects

REVENUESSeptember Adopted Budget - Revenue 316,000 30,000 27,044,000 11,445,600 2,275,000 6,184,000 250,000 50,000 47,594,600 Internal transfers in for Central Distribution 491,000 491,000 Prior Year CEN Distribution - Transfer In 3,215,256 3,215,256 Total Resources Available - Previously Adopted Budget 316,000 - 30,000 27,044,000 15,151,856 2,275,000 6,184,000 - 250,000 50,000 51,300,856

Previously AppropriatedDonations Jul - Sep 5,060 230 30,119 3,690 10,800 56,055 105,954 Donations Oct - Nov 3,088 125 15,661 2,757 800 2,211 114,328 138,970

RevenuesInsurance 68,600 68,600 Interest on Investments 30,000 10,000 40,000 County Property Tax 100,000 100,000 Mid-Year Revenue Adjustment 8,148 355 - 175,780 16,447 - 80,200 58,266 - - 114,328 453,524

Total Resources Available - Mid-Year Budget 324,148 355 30,000 27,219,780 15,168,303 2,275,000 6,264,200 58,266 250,000 - 164,328 51,754,380

EXPENSESSeptember Adopted Budget - Expense 18,660,000 47,000 18,051,000 8,251,000 1,226,000 4,132,000 475,000 103,500 50,000 50,995,500 Shared Cost Allocation (18,344,000) 10,823,000 3,852,000 917,000 2,752,000 - Internal transfers out for Central Distribution 366,500 31,000 93,500 491,000 Prior Year CEN Distribution - Transfer Out 2,453,748 84,612 676,896 3,215,256 Total Use of Funds - Previously Adopted Budget 316,000 - 47,000 31,694,248 12,103,000 2,258,612 7,654,396 - 475,000 103,500 50,000 54,701,756

Previously Appropriated - Donations Jul - Sep 2,382 230 30,119 3,690 10,800 56,055 103,276 Donations Oct - Nov 2,833 125 14,520 2,757 800 2,211 114,328 137,574 Building Refresh - Sylvan Oaks 300,000 300,000

Operating ExpensesSalaries & Benefits (200,000) (200,000) 18,496 (118,496) (500,000) Services & Supplies 80,000 244,000 91,700 415,700 Capital Outlay 100,000 100,000 Mid-Year Expense Adjustment (194,785) 355 - 324,639 268,943 (118,496) 103,300 58,266 - - 114,328 556,550

Total Use of Funds - Mid-Year Budget 121,215 355 47,000 32,018,887 12,371,943 2,140,116 7,757,696 58,266 475,000 103,500 164,328 55,258,306 Difference between Resources Available & Use of Funds 202,933 - (17,000) (4,799,107) 2,796,360 134,884 (1,493,496) - (225,000) (103,500) - (3,503,926) Shared Cost Allocation (202,933) - - 119,730 42,616 10,147 30,440 - Net Inc/(Dec) to Fund Balance at Mid-Year - - (17,000) (4,679,377) 2,838,976 145,031 (1,463,056) - (225,000) (103,500) - (3,503,926)

Actual Fund Balance at 6/30/19 (Audited) 1,237,306 445,464 1,817,945 26,212,380 3,349,266 224,549 5,633,071 409,563 2,101,139 395,800 50,374 41,876,857 Projected Fund Balance at 6/30/20 (Mid-Year) 1,237,306 445,464 1,800,945 21,533,003 6,188,242 369,580 4,170,015 409,563 1,876,139 292,300 50,374 38,372,931 Economic Uncertainty at 6/30/20 (Sept Final) - - - 10,234,175 2,057,510 369,580 1,186,175 - - - - 13,847,440 Unreserved Fund Balance 6/30/20 (Mid-Year) 1,237,306 445,464 1,800,945 11,298,828 4,130,732 (0) 2,983,840 409,563 1,876,139 292,300 50,374 24,525,491

Proposed Mid-Year Budget ChangesFiscal Year 2019-20

Sacramento Public Library Authority

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March 18, 2020 Agenda Item 2.1: Annual Supplemental Funding Allocation for Fiscal Year2019-20

TO: Sacramento Public Library Authority Board

FROM: Johnny Ea, Finance Manager

RE: Annual Supplemental Funding Allocation for Fiscal Year 2019-20

SUGGESTED ACTION(S):Review and Recommend

ATTACHMENT(S): 2.1 Annual Supplemental Funding Allocation For Fiscal Year 2019-20 - staff report.pdf

2.1 Annual Supplemental Funding Allocation For Fiscal Year 2019-20 - RES.docx

2.1 Exhibit A - Supplemental Funding Factor Calculation for FY 2019-20.pdf

2.1 Annual Supplemental Funding Allocation For Fiscal Year 2019-20 - Attachment B - FB Reserve Analysis.pdf

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Sacramento Public Library Authority

March 26, 2020 Agenda Item 8.2: Finance Advisory Committee Recommendations

TO: Sacramento Public Library Authority Board FROM: Finance Advisory Committee

Rivkah K. Sass, Library Director Johnny Ea, Finance Manager RE: Annual Supplemental Funding Allocation For Fiscal Year 2019-20 RECOMMENDED ACTION: Adopt Resolution 20-14, a Resolution adopting the Annual Supplemental Funding Allocation for Fiscal Year 2019-20. BACKGROUND At the May 23, 2019 Authority Board meeting, Authority Board adopted the Fund Balance Reserve Policy as recommended by the Finance Advisory Committee (FAC) to address cash flow needs during dry revenue period (due to timing of cash receipts) and economic uncertainties (due to unforeseen circumstances). The following minimum reserves based on the budgeted operating expenditures were adopted in the Policy. County Fund Cash Flow/Economic Uncertainty Reserve: Minimum 35%

City of Sacramento Funds Economic Uncertainty Reserve: Minimum 17%

(City contributions paid monthly)

Restricted Reserves No Minimum The FAC also recommended that the annual supplemental funding allocation (applies to County Fund only) be calculated after the completion of each fiscal year’s annual audit, using actual audited fund balance. In addition, the FAC shall meet and consider the Authority’s Five-Year Forecast and the following fiscal year budget needs for equipment/system-wide improvements prior to recommending the allocation of supplemental funds. The FAC met on February 5, 2020 to review and dicuss the following items to determine supplemental funding allocation:

• Authority’s Audited Financial Statements-FY 2019 • Current County Supplemental Fund balances as of June 30, 2019 • Five-Year Forecast • County FY 2020-21 equipment/system-wide improvement needs • County Fund Balance Analysis

After reviewing the County’s Fund Balance Analysis (attachment B) and related documents, the FAC recommends that $2,400,000 be allocated as supplemental funds, using the three supplemental funding factors of property tax percentage, circulation percentage and service area percentage. 10

Each party’s proportionate share of the $2,400,000 annual supplemental funding is allocated as shown on Exhibit A. The supplemental funding allocation will be restricted within the Fund Accounting System of the Library for each respective County Agency and may be used for enhanced services per section 11.c.v of the Joint Exercise of Powers Agreements. SUMMARY Library staff would like to thank the FAC for their time and continued contributions toward putting together a prudent Fund Balance Reserve Policy to ensure current and long-term fiscal sustainability for the Library. The FAC has carefully reviewed and discussed the supplemental funding allocation for FY 2019-20 and recommends that the Board approve the attached Resolution 20-14. ATTACHMENT

A. Resolution 20-14, a Resolution adopting supplemental funding allocation in the amount of $2,400,000 for Fiscal Year 2019-20.

B. County Fund Balance Analysis

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Sacramento Public Library Authority

RESOLUTION NO. 20-14

Adopted by the Governing Board of the Sacramento Public Library Authority on the date of:

March 26, 2020

ADOPTING THE ANNUAL SUPPLEMENTAL FUNDING ALLOCATION FOR FISCAL YEAR 2019-20SACRAMENTO PUBLIC LIBRARY AUTHORITY

NOW THEREFORE BE IT RESOLVED BY THE GOVERNING BOARD OF THE SACRAMENTO PUBLIC LIBRARY AUTHORITY AS FOLLOWS:

1. The Sacramento Public Library Authority’s annual supplemental funding allocation in the amount of $2,400,000 for Fiscal Year 2019-20 as presented in Exhibits A is approved.

Sue Frost, ChairEric Guerra, Vice Chair

ATTEST:

Rivkah K. Sass, Secretary

By:Roxanna Puerner, Assistant Secretary

ATTACHMENT(S):Exhibit A: Annual Supplemental Funding Allocation FY 2019-20

Attachment A

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Exhibit A

CirculationService Area Population

Annual Supplemental Funding Factor

FY 2019-20 Amount

Supplemental Fund Balance @

6/30/19

Estimated Supplemental

Fund Balance @ 6/30/20

Agency Amount Percentage Percentage Percentage 2,400,000 Isleton 16,218 0.07% 0.90% 0.26% 0.41% 9,801 1,960 11,761 Galt 588,921 2.37% 2.80% 3.37% 2.85% 68,281 16,028 84,309 Citrus Heights 1,940,861 7.79% 3.88% 8.03% 6.57% 157,636 - 157,636 Elk Grove 3,749,101 15.06% 21.18% 19.38% 18.54% 444,932 91,326 536,258 Rancho Cordova 2,440,581 9.80% 9.12% 9.92% 9.61% 230,731 54,693 285,424 Unincorporated County 16,164,604 64.92% 62.12% 59.04% 62.03% 1,488,619 221,269 1,709,888 Total 24,900,286 100.00% 100.00% 100.00% 100.00% 2,400,000 385,276 2,785,276

Footnotes:1. Property Tax Percentage is FY 2018-19 from the County of Sacramento Department of Finance Auditor-Controller Division2. Circulation Percentage is from Sacramento Public Library Sierra System for FY 2018-193. Service Area Population Percentage/Data is from 2016 SACOG Information Center; Service Area Map from County of Sacramento Municipal Services Agency GIS Division

Property Tax

Supplemental Funding Factor Calculation for FY 2019-20

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County Fund Balance Analysis Attachment B2/5/2020

CommentsFund balance @ 6/30/19 26,200,000.00$ Audited fund balance

Less Cash Flow/EUR (11,100,000.00) 35% Reserve of FY 20 Operating BudgetRestricted Reserve (1,300,000.00) Donations, deferred mainteance, encumbrances, etc. 5 Year Forecast Needs (7,400,000.00) To cover structural deficits over 5 yearsEquipment & System-Wide (4,000,000.00) Security, AMHS, IT, Signs, building refresh, furniture, fixtures, etc

Available FB 2,400,000.00 Available for Supplemental Funding Allocation

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