Adopt resolutions and a budget

It may be necessary for the board to adopt certain resolutions. For example the board may need to adopt resolutions to create a library depreciation fund or a special fund for memorials and donations. The Department of Administration wants the board to adopt these resolutions as part of good accounting practice.

Board members will need to create a budget for the library. The director and past budgets for the library will be helpful when creating a budget. You will have two budgets - a transition budget and the first official budget for the district. The transition budget will probably be pretty minimal as it is the budget that carries you through the first year. If the city or county has loaned money to the new district the board and director will want to try and minimize costs in order to keep from having to pay back large amounts of money.

The director should work with the county clerk and recorder to find out when budget materials are due to the county. The board and director will then need to work on the first year official budget for the district. This is a good time to review what services were promised and to assign money to those services as appropriate. The board may also need to add additional funding for legal counsel, insurance, utilities, and maintenance. These are costs that may have been covered by a city or county but now need to be covered by the library district.

The Board and Director should also remember to add in reserve money. The library will receive its property tax revenues four times a year. This may vary, but seems to be the standard for most counties. You will receive a large check during those times, but very little money the rest of the year. Basically you won't receive any funding unless you receive a grant, etc. Because of this the board needs to budget some money to carry the library through those times when it isn't receiving property tax revenue. This is what reserves do. Reserves are basically cash balances that help you pay the bills even when you aren't receiving revenue. Please carefully maintain your reserve.

Montana Code Annotated (MCA) 7-6-4034 says that counties can have no more than 1/3 of the total amount appropriated in reserve. For example if your budget to run the library is $100,000 you can only have up to $33,000 in reserve. This means your total budget would be no more than $133,000. The board should not have too much money in reserves. Taxpayers expect libraries to be responsible stewards. They also expect boards to spend money on the library not hoard it.

The Board members will also need to adopt a resolution for the first official budget of the library district. This resolution will include the number of mills the board is asking the county to levy. It should be sent (along with the budget) to the county commissioners. Board members should use the city or county's process when creating and adopting budgets as a guide for their own process. See the sample budget resolution for more information.

ASPeN: The New Library Directory

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