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Library system’s 2011 budget has a $93,000 hole in it
Kitsap Regional Library’s Board of Trustees’ Tuesday night adopted a preliminary 2011 budget with the understanding that the final version will include additional spending cuts to bring proposed expenditures in line with projected revenues.
The final budget will be approved at the board’s meeting on Jan. 25.
The preliminary budget projects 2011 revenues of $10.3 million and expenditures of $10.4 million.
KRL Board policy requires the system to balance spending with revenues for the budget year, so the projected $93,095 deficit will have to be eliminated through additional budget cuts to be outlined in the final budget.
Chief Financial Officer Bob Goldstein noted in his budget memo that the system has been hit with three separate health insurance rate hikes since Sept. 1.
Goldstein had planned for a $61,000 increase in health insurance costs for 2011, but the actual increase was $331,000.
“Of the $363,472 increase over the 2010 budget, approximately $344,000 is attributable to major medical and pension cost rises alone,” Goldstein said.
“With the defeat of the district’s proposed levy increase,” he added, “the draft 2011 budget begins a process of re-scoping library services to keep future budgets levels sustainable with revenue.
“The budget assumes that KRL will need to reduce operating hours, freeze the collection budget and make other reductions,” Goldstein said, “while absorbing significant new mandated costs for employee healthcare and pensions, as well as higher than expected costs to operate critical software and computer maintenance programs.”
Initial plans for the 2011 budget did not foresee the need for significant cuts in programs or services, but that was before the system received the unexpected $270,000 additional bill for employee health coverage.
To put that amount in context, the library expects to collect $9.2 million from property taxes this year.
The projected property tax levy for 2011 will be $9.4 million, a $155,062 increase.
Every dollar of the new revenue coming to the library system for 2011 will have to be used to pay for the increased cost of employee health coverage — despite the fact that KRL employees will receive reduced medical benefits for 2011.
The budget does allow employees on the KRL salary schedule to receive an annual 2 percent step increase if they receive a satisfactory performance evaluation.
Of KRL’s 150 employees, 41 are already at the top of the pay scale and will not get increases in 2011.
The library district’s tax rate for 2011 will be about 34.6 cents, significantly below the 50 cents allowed by state law.
A typical Kitsap property owner with a $250,000 home will pay $86 in library taxes for the year.