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
- Home
- Introduction
- Challenges of being a library district
- Joys of being a library district
- Contact Us
- Getting Started - Helpful Hints
- Develop an Action Plan
- Work/Life Balance
- Celebrate Your Successes
- Getting Started Checklist
- Working with the city and county during the transition
- County Actions
- City Actions
- Memorandums of Agreement
- Independent or with County
- City/County Transitions Checklist
- Paperwork, paperwork, paperwork!
- Employer Identification Number
- Name Change
- Notify Department of Administration
- Create List of Contacts
- Paperwork Checklist
- Accounting and other money matters
- Funding during the transition phase
- Decide how to handle accounting
- Paperwork and other details
- Transfer of cash and other liquid assets
- Develop agreements with the Friends and Foundation
- Funding for the First Year
- Accounting Checklist
- Payroll and Personnel
- Initial Decisions
- Take a class
- Notify Revenue Departments - State and Federal
- Personnel
- A note about independent contractors
- Payroll
- Payroll and Personnel Checklist
- Property and other assets
- Transfer Assets
- Obtain Insurance
- Maintenance, Repair, and Utility Costs
- Depreciation of Assets
- Assets Checklist
- The Library Board and its Duties
- Create and adopt an action plan
- Support library staff
- Adopt bylaws for the board
- Hire legal counsel
- Purchase errors and omissions insurance
- Begin work on a long range plan
- Begin adopting policies
- Adopt resolutions and a budget
- Election of board members
- Board Checklist
- Public relations and library services
- Keep the public informed
- Design a new logo and look
- Plan for new services
- Public Relations Checklist
- Reporting Requirements
- IRS Reporting
- Department of Administration Reporting
- Auditing the Library's Accountings
- Depreciate Assets
- Montana Department of Revenue Reporting
- Montana Department of Labor and Industry Reporting
- Montana Public Employees Retirement Administration
- Create an annual report for the library
- Montana State Library Reporting
- Reporting Checklist
- Conclusion
- Appendices