This week, Lisa Havlin, Fiscal Officer for GCPL has written a guest blog post that addresses some of the questions and comments we’ve seen in our social media channels pertaining to “surplus” funds in library accounts.
Running the accounts for an organization is similar to keeping a responsible budget for a household. Having enough money to pay the monthly bills (mortgage, utilities, groceries…) is critical, but nearly every homeowner has been in the unfortunate position of experiencing an unexpected calamity that costs significant repair dollars. Ever have a frozen or burst pipe on a sub-zero day and need a plumber asap? Ever have a leaky roof? A furnace that won’t fire? Issues come up in every house and in every organization that need immediate attention. And, when they do, having the funds to pay for them is not a matter of indulgence. It’s a matter of sound fiscal planning.
We’ve received some questions about the “surplus” funds the Library has. As Fiscal Officer, I don’t feel the library has any surplus funds. I’ll explain why. Every year the library files reports that shows the funds available at the end of the year. In 2016, the funds available in our general fund were $1,857,775. The general fund is used to pay the day-to-day expenses of the library. While $1.8 million seems like a lot of money, the library receives limited funds in the first 3 months of the year. The balance that is available at the end of the year must carry us over until the end of March.
Think about it this way. At the end of the month you may have $2,000 left in your checking account. You know you don’t get paid again until the tenth of the month and your mortgage is due on the fifth of the month.
Is the $2,000 you have left surplus? Of course not. You need that money to pay your mortgage, to buy food and put gas in your car or whatever else may come up until the tenth, when you receive your next paycheck. You budget carefully and know how much money needs to stay in your account to pay future bills and how much can be spent today. As Fiscal Officer, I try to budget the same way.
Besides the general fund, the Geauga County Public Library also uses a building and repair fund. The money in this fund is set aside for major repairs and building improvements. The balance at the end of 2016 in the building and repair fund was $1,410,084.
You can compare this fund to how you probably save for your own home expenses. If your house was built 20 years ago, you realize that you may need to replace your roof in the coming years. Instead of having this large expense taken out of your budget in one year, it makes sense to begin setting money aside to cover that expense in the future. Having money set aside to replace a roof, install a new hot water heater or put in new carpeting in your home makes you a responsible home owner. No one wants to be caught with unexpected expenses with no way to pay for them.
The money in library’s building and repair fund is there to ensure we can handle some of the facilities issues that come up as they occur. Our situation now, however, is that we are facing building issues of a magnitude that our fund will not be able to handle. For this reason, we are seeking a half-mill bond issue this November.