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Home My WebLink AboutLIB Special Library Parcel Tax Report FY2018-19____________________________________________________________________________________ FOR CITY CLERK ONLY Council Meeting: 12/16/2019 Disposition: Accepted report Agenda Item No: 4.c Meeting Date: December 16, 2019 SAN RAFAEL CITY COUNCIL AGENDA REPORT Department: Library Prepared by: Henry Bankhead Assistant Library and Recreation Director City Manager Approval: ______________ TOPIC: SPECIAL LIBRARY PARCEL TAX REPORT FY2018-19 SUBJECT: SPECIAL LIBRARY PARCEL TAX COMMITTEE’S ANNUAL MEASURE D REPORT FOR FISCAL YEAR 2018-2019 RECOMMENDATION: Staff recommends that the City Council accept the 2019 Special Library Parcel Tax Committee’s annual report on the expenditures of the Special Library Parcel Tax funds. BACKGROUND: The Special Library Parcel Tax Committee (hereafter, the “Measure D Committee”) was created on May 15, 2017 after the passage of the Special Library Services Parcel Tax (Measure D) on the June 7, 2016 ballot. This Committee succeeded the Measure C Committee which was appointed after the passage of the Special Library Services Parcel Tax adopted by Measure C on June 8, 2010. The stated purpose of Measure D is to “maintain library hours, equipment, materials, and services for children, teens, and adults”. The Measure D Committee’s sole purpose is to ensure the monies have been expended in accordance with the authorized purposes of Measure D. This is the second report, (following the first report presented December 17th, 2018) on Measure D expenditures as it is the second year of the tax levied by Measure D. The Measure D Committee consists of five members, appointed July 17, 2017 and is tasked with reviewing current and upcoming years’ spending. The committee members are: • Phyllis Brinckerhoff - Jul 17, 2017 to Jul 31, 2021 • Pamela Cook - Jul 17, 2018 to Jul 31, 2022 • Gregg Kellogg - Jul 17, 2018 to Jul 31, 2022 • Peter Lee - Jul 17, 2017 to Jul 31, 2021 • Gil Pruitt - Sep 30, 2018 to Jul 31, 2022 ANALYSIS: The Committee’s 2019 report states Measure D funds were expended appropriately for Fiscal Year 2018- 2019. The final audited fund balance was $203,137. This fund balance is a result of three primary factors SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 2 over the life of the tax: vacant staff positions funded by the Parcel Tax, and the accumulation of small amounts being underspent in various line items over the life of the tax. This fund balance is expected to be used in the current year for other qualifying expenses. There is also a capital set-aside fund balance of $353,335 earmarked for new and improved library facilities as directed by City Council. This balance was reduced from $541,195 by $187,860 to fund the New Library Facility Planning Project with Noll & Tam architects that concluded in July 2019. During the past year, the Committee and Staff have engaged in discussions about the appropriate percentage of the City’s general fund allocated annually for Library Services in addition to funds received through Measure D. Committee members felt this general fund percentage for Library Services was a fixed 4.41 percent annually regardless of changes in Measure D funds received 1. However, Staff felt this percentage could fluctuate annually based on other components contributing to the general fund and instead of the percentage, the focus should be on level of services. After extensive discussion, the committee and staff have agreed the 4.41 percent general fund allocation is a target rather than a fixed requirement. Rather, the goal of the general fund allocation should be sufficient funding in addition to Measure D to maintain service levels and focus on building efficiencies with regards to work flows. By building efficiencies, the City in turn could reduce expenditures while maintaining or even increasing services levels. For example, Library services were increased in the 2018- 2019 fiscal year by the addition of a Mall location offering 33 more hours per week of library services without increasing the library budget. COMMUNITY OUTREACH: To date the Library has received input on expenditures from the Measure D Committee through their annual report. The committee typically meets 5 times per year. This report was discussed initially at the October 1, 2019 and at the November 19, 2019 meeting and then finalized and voted on at the December 9, 2019 meeting, all of which were open to the public. FISCAL IMPACT: There is no fiscal impact from the acceptance of this report. RECOMMENDED ACTION: Accept the Measure D Committee’s Annual Report for Fiscal Year 2018- 2019. ATTACHMENTS: 1. 2019 Special Library Parcel Tax Committee’s annual report 1 4.41 percent reflects the proportion of the City’s General Fund allocated to Library Services at the time Measure C was passed in 2010. City of San Rafael Special Library Parcel Tax Committee Report FY 2018-2019 The Committee’s sole function shall be to review the expenditures of the revenues from the Special Library Services Parcel Tax, adopted by Measure D on June 7, 2016 to ensure the monies have been expended in accordance with the authorized purposes of Measure D. Measure D replaced Measure C which expired on June 30, 2017. This is the second year of the nine year span for Measure D. The Committee met six times to review library budget and actual expenditures. The Committee agrees that the actual expenditures for the fiscal year are in line with the budgets and stated purpose of Measure D funds as stated on the ballot: “maintain library hours, equipment, materials, and services for children, teens, and adults.” Total expenditures budgeted for Measure D funds for FY 2018-2019 were $1,243,205, which represents 27% of the total library budget of $4,605,761. The amount actually spent was $1,144,663. In previous reports of Measures C and D, the committee listed as a task: “to ensure that the Library maintains its share of the general fund.” This was listed because the text of Measure D states that the parcel tax would “provide a critical, consistent, locally– controlled source, augmenting current general fund allocations…” When Measure D passed, the committee used the same method the City Attorney indicated upon passage of Measure C: the proportion of the Library of the General Fund Budget. In both cases, it was 4.4%. However, during the term of Measure C, the percentage was not and could not be maintained each year due to mandated expenses for specific departments. These were noted in the Measure C Committee’s reports as acceptable variances. The City questioned the validity of 4.4% as a continuing proportionality for Measure D. During the year, members of the Committee met with the Mayor, City Manager, Community Services Director, and Finance Director. At the July 2, 2019 Library Parcel Tax Committee Meeting, all parties agreed to the following (from the minutes of the meeting): “General agreement that the proportionality would remain at 4.4% but that it is a shared goal that is non-binding. It is the goal of the committee to be in alignment with the ongoing proportionality that has been established.” The proportion of the Library General Fund compared to the total General Fund Budget was 4.13% for Fiscal Year 2018-2019 which is less than the shared goal. This is largely due to staffing which was 89.3% of budget while non-personnel expenditures were over budget. The Library's budgeted percentage of the General Fund was 4.46%. With the recent establishment of the Library and Recreation department, which merges the previously independent Library and Community Services departments, the Committee will closely monitor the Measure D revenue and expenditures. The Finance Department has assured the Committee that Measure D funds will continue to be used only for the specific Library services for which it is authorized. The Committee, therefore, expects that there will be a way to identify and break out the Library’s share of the General Fund. The unaudited parcel tax fund balance for FY 2018 -2019 is reported as $203,137. This includes the remaining balance of $126,376 from Measure C. The remaining balance of the Capital Set Aside (which was created from Measure C funds) as of June 30, 2019 was $353,335. Measure D funds are restricted from being used for facility improvement or replacement. The Committee will be monitoring the ongoing planning for the new and improved Library facilities to ensure that Measure D funds are used appropriately. The Measure D Committee respectfully submits this report: Phyllis Brinckerhoff, Pamela Cook, Gregg Kellogg, Peter Lee, and Gil Pruitt. Measure D Committ~: ~m ~~r/9~ Phyllis Brinckerhoff f~a .~ I ' --------·--- Gr p \__ h()-pJ Gif Pruitt 12/9/2019