need to call us to order. Everyone,
welcome to the August Finance [snorts]
Committee meeting of the Sonoma County
Library Commission. And I see all of the
present commissioners received the color
memo. And we are colorcoordinated today.
So, you could tell who the commissioners
are. And um let's see if there's any
public comment.
We saw there were no comments received
via email. And there are
I believe no members of the public. Let
me double check.
Okay.
>> There are no members of the public.
» There are no members of the public.
Commissioner Angbart is watching via
Zoom.
>> Right. Thank you. Well, let us let me
» Right. Thank you. Well, let us let me
call everybody to order here.
Commissioner Goldberg
>> here. Commissioner Polls.
» here. Commissioner Polls.
Did we hear from Commissioner Polls? No,
we did not hear from her. And
Commissioner Taylor
>> here.
» here.
>> And very
» And very
hearty greeting to Commissioner Taylor
and Commissioner Goldberg for attending
the first Finance Committee meeting. We
welcome you and are glad you're with us.
Um, announcements. I have the same
announcement that I had at the last
meeting which is my status as a
commissioner has not been confirmed. I'm
still hanging out here a little bit
hoping I can continue but as of now I am
acting under the direction of the city
to continue coming to meetings. Uh
public appearances we don't seem to have
anyone. Okay. Uh let's move into
discussion item uh 4.1 finance committee
roles and responsibilities. I wanted to
take just a little bit of time since we
have our actually majority of our
members today are brand new and talk
about what we really are supposed to be
doing in this committee because it isn't
always clear I think to to people what
we do. Um
to back up just a little bit, um this
this new library commission started 12
years ago in August of 2014. And at that
point in time, prior to that, the
commissioners were appointed by the
Sonoma County uh supervisors. They each
could name a commissioner and then the
city of Santa Rosa could name somebody
and city of Paloon can name somebody and
that was the library commission.
Starting in August of 2014,
all of this all the jurisdictions got a
representative. That was one of the
major changes that happened when this
JPA was redone. So, um I walked into the
first meeting and commissioner uh Tim
May from Pedaluma walked up to me and
said, "Would you be on the finance
committee?" And I said, "Sure." And then
I'm still I've been doing it all this
time. It was very informal. We didn't
have any roles or responsibilities. We
were totally winging it. And um so just
over time this committee has uh you know
clarified its roles. We have great
leadership now that we didn't have then.
We had a brand new CFO, a brand new CEO.
Both of them were new to the system.
They have come and gone. And we have,
you know, such a strong management team.
Now it's a a different day. So you're
you're walking into a a good well-run
um you know financial department of this
of the commission at this point in time.
So, just to talk a little bit about what
we do do,
we do um we review the reports that the
CFO prepares for us. And one of the
important things I know there's been
comments by commissioners. We don't know
how to read them. We don't understand
them. They're complicated and all that.
And I think all of us want to make a
concerted effort to make sure everybody
can understand at least some basic part
of things so you can always, you know,
tell where we are. And we think all the
commissioners should be able to do that.
and hopefully that will come up at the
retreat and go over some of the basic um
basic reports that we do. Um we can have
no more than five commissioners as a
five as 11 member body. The five was a
as a majority and um I believe uh a
fifth person has been named but we're
holding back for now until the Hillsburg
commissioner gets seated. So, at the
next meeting, I will or will not be
there, and the new person will
presumably be there, and I believe it's
Commissioner Riley, is it not? Um, so
anyway, what we do besides review the
reports, um, the the chair of the of the
commission may say, you know, I really
want you to look at something, you know,
some financial issue that's going on or
something. It's poorly understood by the
commission, whatever. So the the chair
of the commission and this happens very
very rarely can ask us specifically to
look at something that I can't even
remember the last time that happened but
that can happen based on our role and
responsibility. the full commission
could say, you know, we don't understand
such and such. Let's take it back to
finance committee and let them hash it
over and then report to us. Or any of us
can bring up something that we're
concerned about that we think would be a
helpful topic to to look into. So, we
can also put something on the agenda and
we'll have the opportunity to do that at
the end of the meeting.
Um we don't necessarily do anything with
all the stuff that we do but if the
commission chair or um or the the
commission or the or us ourselves we can
make recommendations you know if if on
upon request and so we you know we can
do that. Um we also look at the
preliminary audit when the auditors go
through everything and we kind of go
through line by line and you know make
all the comments and
you know edits and so forth that we
think are are appropriate. So, we do
meet once a month and we have
traditionally met the entire time I've
been on this always on Monday
afternoons. Recently, we changed the
time to Monday at 2 to accommodate
another uh uh meeting that Erica has.
And um so you know we were going to talk
about changing this but we thought well
let's wait till whatever month it is
soon that everybody's here and then
we'll work around what what works best
for you for everyone [clears throat]
and in this day and age we can
participate by teleconference. To me
it's always great to be here in this
room if at all possible but Kim I know
you have you know more commuting issues.
So uh to the extent possible we'll we'll
meet here continue to meet here. Um so
um the chair is supposed to be elected
uh in August. I saw it briefly on this
agenda and then it disappeared and
probably because of this issue of our
our committee structure itself isn't
quite set. So that would probably be in
September I'm assuming. Um so the the
chair and I was elected I think two
years ago and then reelected. Um, my my
position is to work with MNA and with
Lisa on the the the agendas. Lisa's
great about carrying over things that
she knows we need to talk about and then
Mirina has her stuff and then I have my
stuff and then we we work it out.
Usually the agendas aren't too terribly
long. Um, and then I'm responsible for
leading the meeting. The vice chair
leads the meeting when um I'm pointing
this way. Lisa Tina is not actually the
vice chair, but whoever's sitting here.
Um, in my absence, the the vice chair
would would lead the meeting.
Um, the minutes come to the chair after
Lisa writes them up for edits. We do
action minutes, which used to be
frustrating to me because it didn't have
like all the stuff in them and I like
detail. So, we've kind of come to a
compromise and if there's some kind of
meaty issue that needs a little detail,
I added quite a bit to our minutes the
last time because we were talking about
the bond measure. I thought it would be
helpful to add to the minutes some of
the detail that we had talked about, but
we don't do she said this and he said
that and they approved that and stuff
like that. So we try to keep them uh
reasonably streamlined but at least
informational enough that that helps um
certainly the other commissioners to
read it and know what it is. So anyway
then the then the minutes go out to all
the commissioners and then you can all
make you know comments and um and then
it says here that I am to the chair is
to prepare and deliver a monthly report.
Usually that's the minutes but it could
be something special if there was a
special topic. So anyway, uh way back
when early days when I was finance
committee chair, we had a problematic
committee member and we've constantly
interrupted and wouldn't you know play
by the organizational structure. So
anyway, we I added this got added which
is uh finance committee members are
appointed by the chair, committee
members may resign at their discretion.
Committee members may also be removed by
the chair in consultation with the chair
of the finance committee. the chair of
the commission can remove people who
aren't, you know, functioning or maybe
attending or or whatever reason, but
that's only happened once in 12 days
that I know about. Okay, great. Well,
any questions about the role and
responsibilities? Anything that you
would you're not clear about either one
of you.
>> Just to thank you and I appreciate the
» Just to thank you and I appreciate the
overview. It's very helpful.
>> You may hear it again next time if I'm
» You may hear it again next time if I'm
still here and there's another new
person. I just think it's important to
know what we're doing, you know, what
we're supposed to be doing. So great.
Well, thank you for your attention to
that. Um, moving on to the update on the
bond sale and would our CFO take the
reigns on this one? I believe
» so.
Um, finally the culmination of the
search for
um, finally the culmination for the
search and the financing of a new
central operations center um, took one
of the largest milestones which was the
sale of the the revenue bond that
happened on Thursday the 13th. it was
with very successful uh results. Um we
wanted to give you an update today on uh
more details on what happened. Um
and first
why don't give you the this Oh, maybe
Bobby are you sharing your screen? Okay,
>> I am. Yeah. Uh could folks see the the
» I am. Yeah. Uh could folks see the the
title slide?
>> Yes. So, Bobby from KN&N Municipal
» Yes. So, Bobby from KN&N Municipal
Advisors is uh here to um give us an
overview, but we wanted to start off by
letting you know that uh we there there
were uh very good um for our for our
purposes, good conditions in the market.
There were some um economic indicators
that came in and uh did not shake
anything up. So, it was uh good for us
that week. Uh but prior to um the sale,
we were required to uh um request a
credit rating since this is the first
time that the library issued a bond. Of
course, we don't have any credit
history. And so um we presented um
director Tibiot and I presented to a
committee from standard and por's global
ratings team and um and had submitted
many documents to them. Uh they also uh
sent us many questions in advance that
we prepared for and KN&N helped us
prepare a presentation of our financial
condition profile of the uh Sonoma
County and specifically the library
which uh all was uh wellreceived and as
a result standard and pores rated the
library
an AA plus.
>> Is that the highest you can get? Is
» Is that the highest you can get? Is
there any AAA or double plus or anything
>> there? The AAA is the highest. Um, and
» there? The AAA is the highest. Um, and
then there's probably a couple of others
in between the AA plus and the AAA.
>> Uh, double A plus is just below AAA. So,
» Uh, double A plus is just below AAA. So,
it's AAA and then double A+. So, this is
a very very strong rating.
So I I I wanted to make sure uh the
finance committee knew that uh the one
of the major results of it of this was
because of uh very strong uh fiscal
management of the organization. They
cited uh the policies, the financial
policies of the fund balance, uh
proactive payment of the OPE liability,
the pension liability,
and um conservative budgeting. So, all
of those items um uh influenced that
double A+ rating. and wanted to thank uh
KN&N for uh their assistance in uh
preparing all of this. And the the
rating is very important because it it
is an an indicator to potential
investors of how um
creditw worthy we are um to pay back you
know any investment. Um and so therefore
um uh wanted to to highlight that kudos
to the the commission, the finance
committee that's had led many of these
policies that contributed to this um
this uh stable outlook for us.
>> Um I'm going to add to that a little
» Um I'm going to add to that a little
bit. Um, and one of the reasons why we
received this high rating wasn't just
because of our financial stability, but
all of those policies that the finance
committee um, helped guide us through,
including our allocation of revenue
sources, our fund balance policy, um,
our debt policy we passed. So, all of
those things actually helped contribute
to our double A+ rating. So having that
secure policy base um was really helpful
and it will also be helpful in years to
come. You know we always have the
opportunity to um refinance um in 10
years and maintaining a solid credit
rating will improve our ability to get
um better interest rates in 10 years.
So, it's a good thing as long as we can
kind of maintain this fiscal stability
and uh fiscal um responsibility, it will
it just bodess well for us.
» So, transitioning to the next slide,
which is the summary of competitive sale
pricing results, I will uh ask Bobby to
um step in and go over these next few
slides.
>> Great. Uh thank you, Mina. And uh good
» Great. Uh thank you, Mina. And uh good
afternoon uh members of the finance
committee. Uh Bobby Chung from KN&N
public finance. Um yeah, as uh uh uh
just mentioned uh the double A+ credit
rating really was a strength in the uh
marketing of this uh transaction. Um
your bond sold via a competitive sale.
So um the entire universe of uh broker
dealer firms were invited uh uh to
participate uh in this transaction and
last Thursday uh uh we received nine
bids from the market um with uh the
winning bid being submitted by UBS
Financial Services uh at a true interest
cost of uh just about 4.04%.
And the true interest cost is a is a
blended borrowing rate uh for each one
of the uh the 30 years of uh uh bond
maturities that that were uh uh that
were priced. Um and uh as uh as
mentioned previously uh really the the
the CPI and PPI figures that were
released uh in advance of that uh sale
date um contributed to a really strong
tone in the market. basically uh fears
of inflation were removed uh and it was
um uh a really good uh strong day. And
so as you could see uh you know the UBS
bid uh uh came in uh significantly lower
uh than many of the other bids uh that
were received uh on on on the day of
sale.
Uh
the next slide uh is the final sources
and uses. Um uh total sources equals
total uses. Here uh the transaction bar
amount uh after factoring in um the
actual coupons and yields received from
UBS uh was finalized at $12.025
million. Uh as a function of the sale,
uh uh the library will be receiving
about $400,000
uh in bond premium uh from the investors
who purchased uh uh these bonds um
totaling uh sources of 12.447.
Uh in terms of the uses, 12.18 million
will go towards the uh the acquisition.
Uh this of course uh uh um uh is in
addition to the $600,000 that the
library uh is um you know has already
committed uh in cash. Uh about $220 went
towards paying cost of issuance and that
covered our fee uh bond and disclosure
council, the credit rating, the trustee,
the financial printer uh etc.
uh the underwriter discount uh 45,000 uh
that uh that's the amount that went to
UBS uh for uh for winning the bid uh and
underwriting the bonds. And this
rounding amount is just because uh bonds
are issued in $5,000 increments.
Uh the transaction will close next
Thursday on August 27th. Um this is uh
uh the transaction has a final maturity
of October 1, 206 and the final true
interest cost was right around 4.04%.
Uh this resulted in uh average annual
payments of uh about $712,000
uh per fiscal year and total payments of
about uh 21.69
million when factoring in both principal
uh and interest.
Uh so the next slide shows the the
detailed uh breakout of principal and
interest. Um we we structured this to
generate level payments on a fiscal year
basis for the entire term uh except for
the current fiscal year which just has
an interest payment uh uh due in the
spring of uh 2027. Um but yeah, no uh
you know this this result came in um you
know stronger than than we were
anticipating. Uh I think the last time I
I spoke before your your fuller
commission you know we were estimating
you know 750,000 per year uh you know
the borrowing rate uh as of that time um
we were estimating you know like 440 450
range and then the credit rating came in
stronger than anticipated uh and the
bond market conditions itself were were
stronger uh um uh than we were
anticipating. So I think this is a
really good result.
Um the next slide is uh just a couple of
next steps through the bond closing. Uh
so um you know as we uh as we all know
uh the steps leading up to uh uh up to
uh the pricing um uh have occurred
already. Uh so we have locked in those
interest rates. Uh and over the course
of this week uh and through early next
week, we'll be obtaining signatures
necessary for closing. Uh and then next
Thursday the 27th um uh the transaction
will officially close where UBS will
send money uh to our trustee uh and then
the trustee will send uh uh a transfer
to uh your account uh on on the day of
closing. Uh so let me pause there see if
there are any questions uh before we
move on uh uh to the uh to the last
slide.
>> Any questions from commissioners?
» Any questions from commissioners?
I have something I'd like to add.
>> Yes.
» Yes.
>> Um, so I know that when we were
» Um, so I know that when we were
contemplating this purchase, one of the
things that we looked at was a
comparison of our lease costs versus uh
our debt service. And I can say with
this new interest rate, uh, we will
surpass our lease costs in year four.
So, we will um we will basically be
paying a little bit more for the next
four years, but we will be flat payments
essentially um after um after that. And
so, it really is prudent that we made
this decision.
>> That's really great news. And I happen
» That's really great news. And I happen
to bring this from one of our early
discussions and it we're trying to see
which was a better deal. And there was
it did show that crossover at year six.
What I had noticed and the reason I
brought this was, you know, we're
talking about 764,762,000.
Bobby mentioned a slightly lower number,
but I mean, you know, it's 50,000 a year
or something like that for 30 years, you
know, at least. So, it's saves us a lot
of money and that is due to the high
rating, right? We take it all back to
being a great
greatly wellorganized functioning fiscal
organization. So anyway, uh I like
Bobby. I love the fact that you were
kind of surprised.
>> Yeah, I am too. [laughter]
» Yeah, I am too. [laughter]
>> You dealt with any similar kind of
» You dealt with any similar kind of
public institution like us that
surprised you in such a way?
>> Yeah. Yeah. You know, of course,
» Yeah. Yeah. You know, of course,
sometimes it goes the other way, right?
Um uh there were uh um this was a very
good uh result in the credit rating uh
and a very good tone in the bond market.
So, uh, you really had those two things,
um, working for you. Um, so, yeah, it
it's just a testament to, you know, to
this committee's, uh, in particular, uh,
you know, prudent, um, financial
management. So, yeah.
>> So, there there's a little bit of a
» So, there there's a little bit of a
lucky day aspect to this, too, given the
political climate and national political
climate. Is that what you were kind of
pointing out in your report?
>> A little bit. Yes. Right. Um the the
» A little bit. Yes. Right. Um the the
double A plus credit ratings certainly
helped. Um but also uh we we did hit a
particularly stable
tone in the market. You know leading up
to to last Thursday there was about a
week and a half of stability. Um and uh
uh strength in the bond market. Um so
that uh uh that all uh came to to your
benefit.
>> Great. The the fates were with us. Um,
» Great. The the fates were with us. Um,
Bobby, my question would be, do you have
a continuing role?
>> We do. We do. Yeah. Um, and that's a
» We do. We do. Yeah. Um, and that's a
good transition actually. Uh, Mirina,
uh, why don't, uh, MNA walk through, uh,
this last slide and then and then I
could talk a little bit about, um, our
continuing role.
So um as you know the closing is on
August 27th
and then at that time the trustee
computer share will distribute the bron
proceeds to the library as Bobby has
mentioned. Um the library has then has
to turn that around and wire the funds
to um Old Republic title uh so that um
we complete our transaction with the
seller and that's we should be doing
that by early the first week of um
September.
Um the library will be establishing a
new um fund so that we can track these
proceeds and payments um separately from
all of our other funds. And our first
payment is due on April 2027. It will be
print um interest only at that time. But
then our second payment which is due in
October will include principal and
interest and it will be the first time
we see that 700,000 number.
And uh in terms of uh KN&N's role, uh
the library will be required to um
submit reports annually to the state and
um and uh we'll need to we will be
receiving assistance from KN&N in
compliance with these reporting
requirements.
Did you want to add anything to that,
Bobby?
>> Um yeah, ju just on that last point. Um
» Um yeah, ju just on that last point. Um
uh again since uh since these bonds once
they close um you know they're they're
publicly issued bonds. So the investors
who purchase your bonds initially uh you
know should they want to they they have
the flexibility to to trade them in the
secondary market. So uh it's important
that um uh uh the information uh remains
current for for bond holders. And so
there's a there's a continuing
disclosure requirement uh uh where where
the library will uh on an annual basis
uh basically present its uh uh its its
annual audit uh plus um I think two of
the tables in the preliminary um and
final official statement uh to the
market and and that will help uh you
know keep investors um uh uh up to date
on on your credit. Um
uh yeah, the state of California through
the treasur's office has a annual debt
uh transparency report uh that basically
um where where you report the spend down
of the your bond proceeds and also the
payown of your uh outstanding bonds. Um
that's an annual requirement. Um and uh
yeah, we we do not disappear uh at uh
you know at at at time of the bond
closing. Um, you know, we're here to to
assist with the compliance of of these
measures, uh, moving forward.
>> Thank you very much. Um, commissioners,
» Thank you very much. Um, commissioners,
do you have any questions at this point?
Um, I would like to ask kind of a simple
question, but to explain to the public,
I I was at a forens library meeting this
morning. What is like a simple language
that we can use to explain what we have
just done as a library?
you know it like
>> well uh I I'll start off and maybe Bobby
» well uh I I'll start off and maybe Bobby
can elaborate. Essentially
uh we we are promising that um
that the library because of its strong
property tax general fund revenues. we
are able to afford to pay back uh a loan
that we took from um you know a public
sale of bonds.
Is it something about when we have gone
out for you know that's something about
going out and issuing public bonds it
gets complicated when you try to explain
it because obviously KN&N and all the
people that involved in this I mean we
didn't do it but how do you how do you
kind of explain it to the public but you
know for the first time we are taking on
you know debt to buy a a headquarters an
operations building by by what me by
what method
>> um through a competitive bond sale. So,
» um through a competitive bond sale. So,
as opposed to, you know, I think when
most people think of bonds, they think
about those um those ballot measures,
you know, those bonds that are actually
pledges of additional taxes that people
will pay. So, this is not an additional
tax. Um they are not paying, you know,
taxpayers will not be paying any more
money to the library as a result of
this. This is an investor who has looked
at our finances, who has learned, who
has decided that they [clears throat]
can make money on this investment and
they are lending us money in order to
make money, if that makes sense. and
they are looking at our balance sheets
and our fiscal policies and our
financial stability and they're
basically they're taking a risk you know
um that uh that we will continue to be
fiscally stable and um and make
financial prudent financial decisions
but that risk is going to you know earn
them money
if that makes sense. Do we call it
public bond sales? Is that right?
>> Correct.
» Correct.
>> Yes, that that's that's right. Yes.
» Yes, that that's that's right. Yes.
>> And so I think it is important though
» And so I think it is important though
this point that we made earlier that
this is not that it saves us money that
in in within four years we'll be paying
less by paying the interest on this than
we would have been paying for a lease. I
think that's part of anyway I' I'd like
to boil it down at some point in time to
uh you know the elevator paragraph or uh
yes Eve
said to people
>> uh Eve can you please push your
» uh Eve can you please push your
>> this is what I have said that's short
» this is what I have said that's short
but it could be wrong so I want to put
it out there and find out if I got it
right or wrong. So, I have said um cuz
somebody asked me I've said we have
floated a a public bond instead of going
to a bank for a loan and they said is
that because with a public bond
you are paying a lower interest rate and
I said yes and they said are you paying
a lower interest rate because you're a
public institution so the investors
don't have so somebody doesn't have to
pay taxes on their dividends. And I
said, I don't know, but I think so. Is
that correct? Is that why we have a
lower interest rate? That that's a
that's an excellent question. Um, first
of all, yes. The investors that have
loaned you money do not have to pay uh
income tax on the interest that they
receive, federal income tax. A and if
they live in California, uh state income
tax as well. Um so then therefore
they're they are willing to to loan you
money at a uh preferential uh or lower
interest rate versus uh a private
company um uh you know uh selling bonds.
Um so that that's number one. Number
[clears throat] two, you could always go
to a bank uh and a bank would lend you
money at a tax exempt rate. Uh but
accessing the public bond market as we
did through a competitive sale um
results
generally in a lower interest rate than
going directly to a bank. So, not only
is your rate tax exempt,
but also it's a public bond sale and
lower than if you went to just a a a
like a commercial bank like a Beimo or
or or JP Morgan uh uh for a uh for a
direct loan.
» So, it's both.
>> Thanks.
» Thanks.
>> Yeah.
» Yeah.
>> Great.
» Great.
I think we're all feeling very
celebratory.
I certainly am. So, um, any other
questions? Anything else you'd like to
say to us, Bobby, before we wrap up the
>> No, congratulations. We were uh uh very
» No, congratulations. We were uh uh very
pleased with the result and we look
forward to the to the closing uh next
Thursday. Well, from everything I've
heard, you've been great to work with
and um really appreciate every all your
efforts and clarifying everything to us
and walking us through a brand new
thing. So, thanks very much.
>> Appreciate it. Thank you.
» Appreciate it. Thank you.
>> Bobby.
» Bobby.
>> All right. See you later.
» All right. See you later.
>> All right. Thank you.
» All right. Thank you.
>> Bye.
» He's very calming, doesn't he? It feels
like it's all under control with Bobby.
Jo's got it. It's really good. Mirina,
did you want to add anything or or Erica
to our this discussion
before we move forward?
>> This this is a major milestone for for
» This this is a major milestone for for
the library. I I believe that um you
know the the sales tax measures have
allowed us to and have propelled us to
this point and the library continues to
mature in meaning that um these policies
that are in place um
uh are an important factor in
establishing controls and expectations.
ations and transparency on how we manage
our affairs and um so the work of this
committee has been really instrumental
in that. Um having a full staff in um uh
in our in our accounting working with
the county uh partners uh have made a
very big difference. We've had clean
audits um and uh so I think all of that
is um is moving us in the right
direction. But my point is that the
library continues to with the more
uh revenues
um and the greater expenditures that we
have uh this the organization is uh
becoming more complex and um
and more mature and uh has been able to
utilize the tools that are set for us in
the joint powers. agreement
and uh and so this is this had never
been exercised before, but we are
utilizing it and and it was there for a
reason um to continue to provide very
good services for for um our residents.
And uh I'd like to say that working with
uh director Tibbo is uh pretty amazing.
she d, you know, she's jumps right in.
Um, and uh and and and we work really
well together and really appreciate um
her her her uh inquisitiveness and and
uh also vision for um for this
organization. So, thank you.
>> Well, I I couldn't have done it without
» Well, I I couldn't have done it without
Mirat.
>> Absolutely not. and uh you know and also
» Absolutely not. and uh you know and also
having these adviserss you know really
walk us through the process. It was
enormously helpful. Um we could not have
done it um by ourselves. It was just an
enormous task. And of course the um
accounting staff was also incredibly
helpful and having them uh to support
her. And you know we probably and poor
Lisa you know um our last couple
commission meeting packets have been you
know down to the wire and I don't really
like to operate that way. Um, but it has
really been because this purchase and
the bond sale has eaten up a lot of
time. Um, but you know, I'm very I'm
hopeful that after this we can go back
to our our regularly scheduled
commission packets.
So, thank you, Lisa.
>> Thanks.
» Thanks.
>> You're welcome.
» You're welcome.
>> Well, I'm going to allow myself a couple
» Well, I'm going to allow myself a couple
of minutes here because
um I I I realize I'm really the last of
the old guard. there's no commissioner
has been on as long and and the
management hasn't been on as long and so
forth and just to give everybody just a
dose of perspective when again you know
I love your word mirror about this
organization maturing is a perfect word
and evolving and adding and you know
building um because 12 years ago when
the new JPA started we were operating on
a shoestring we had only the property
tax I believe it was 15 million it was
something like the budget was about that
and you know 12 years later we're at 50.
Um it was open the library is open 40 uh
40 hours a week 5 days a week closed
Sunday and Monday there was just the it
was keeping the lights on the friends
were buying most of the books. I mean it
was a very very desperate situation and
right before the new JPA kicked in at
that time again I like to point out that
Jamie Anderson and David Dodd were
co-inter directors. I mean everything
was just so patched together and um so
those brand new CFOs brand new CEO um
the brand new commission I mean
everything was just you know new and
green and and shaky and you know just
trying to to build an organization from
whatever there was a fund balance policy
but it wasn't very complete and we
started working on that right away um
the OPED I'm very proud of because I was
part of that And we had we went out and
got I got Darren Jenkins who was our
city manager at the time to be on a
subcommittee and there were two other
pension experts who joined us and
created this you know policy just out of
whole cloth once we once we got the t
first tax measure passed when we got
measure Y passed and so then there was
money. Um the the Kalpers thing is just
brand new right off just we just voted
on that as a commission and that was the
other thing and I know Andy was really
very essential in that something that
there's two big unfunded liabilities and
we taken care of both of them. I mean
it's really astonishing. Andy is
somebody who's pointed out not long ago
that we don't often reflect on our
successes enough. And part of it I think
is uh losing the perspective and if
anything I can bring perspective because
you've lived through this whole thing
and uh the the difference in having
committed
permanent feeling management is just
makes all the difference in the world.
You two are a tremendous team. you've
just we feel solid and of course Dara
adds her expertise you know as a as a
assistant director and um it's just it
feels so good to be you know so secure
in in what we're doing and not fly by
night like it did for a long long time.
So I applaud everybody who uh has added
to the maturity and the development and
so forth and it's you know it takes a
village and all that takes everybody and
their own talents and skills. So um
anyway much much much to be proud of for
as a system and as all of us who are
currently participating as well. So
anyway thank you. I I had to indulge in
a little
reflection. So on that um so we did the
update on the bond sale. Let's move on
to 4.3 the 26year end on audited
financials and back to our CFO for that.
I want to bring up the the detail. I'd
rather show this
the summary.
I don't know if you can make it bigger.
Probably
make it a little bigger. If the yellow
comes off, that's fine.
Let's see.
Okay,
little one.
Um, okay. So, good afternoon. This is
our annual unawudited year-end uh report
that shows um financials through June
30th, 2026. We're in August. The month
of July is a dual period, what we call a
dual period. We're working in the new
fiscal year as of July 1, but uh we work
with the county's timeline and their
financial system. So we are um we work
with their timeline in terms of closing
the year end. So there are transactions
that are happening uh for last fiscal
year although it was closed on June
30th. There are transactions that have
late invoices that that are that come in
after you know July third I mean June
30th. um any um journals that we have to
make, you know, moving funds from, you
know, uh our friends donations into, you
know, property tax or sales tax as
reimbursements, closing up and wrapping
up our grants. All of those LA uh year
end um activities are taking place in
July and they we're given about three
weeks or so uh to close up and then the
system is closed for June 30th and um
and then we get we we get our financials
that you're seeing in front of you. So,
and staff is working very quickly and
busily um in the month of July because
we're working in two fiscal years.
Um
so, having said that, uh I wanted to um
say that we're in a uh steady uh
financial position. Uh so as we're going
into strongly into this new fiscal year
2627
and um the f the the the
first look at this are the budget versus
actuals. The budget that you see in
green in the green column is the
adjusted budget. This is our sum summary
page
and uh and then you have all the
recordings for every month of the fiscal
year
and uh we have as everyone know knows uh
we do have financials for every month um
and now we're looking at June and the
reason why we have estimated in June
is that we may still encounter some
budget adjustments
uh in particular uh around um revenues
in terms of our sales tax and in our
expenditures around capital.
So um
the reason why revenues are estimated
under sales tax is that sale we receive
our sales tax receipts two months after.
So as you can see here the July month is
is uh July and August are blank because
we don't receive um the July
receipts until September. So we record
them in September. So therefore if we
follow that logic uh the June the May
receipts are received in July and the
June receipts are received in August
that we're still waiting for. Um but we
do an estimate. We average the uh April
and May receipts and and we plug in uh a
figure. We do up them um update them to
the true receipts through budget
adjustments in August and um eventually
we do have an opportunity to ref do
those updates also in the system.
Um
so the actual revenues total were 49.07
million
uh which is 1.09 09 million greater than
the approved budget.
Um,
and under a, and I'll get into more
detail, but this is just the high level.
Under actual operating re operating
expenditures,
operating expenditures are all of their
expenditures, salaries, and services and
supplies.
Um, and it excludes capital.
>> Were you in the yellow? We're doing the
» Were you in the yellow? We're doing the
yellow or you still doing the green
>> the green the yellow is last year the
» the green the yellow is last year the
prior year.
>> Oh
» Oh
she is
okay.
» Thank you.
Okay. So
in terms of uh Yes. So actuals are um
what I'm looking at are
the unodudited actual actuals yearto
date plus incumbrances
and um can you scoot that over a little
bit?
» Okay. So we don't encumber revenues. So
you see blanks there. And so again our
total revenues is 49.07
million which is 1 million greater than
the budget which and the budget is in
the green.
Um then I have total expenditures which
does include our capital that is the
total expenditures are 50.71 million
which are approximately also 1.58
million less than the approved budget.
So we're spending less than we budgeted.
What we call a savings.
Oh, we have more revenues than we
budgeted and also we are spending less
than we budgeted. Yes.
Um then you could also now this is this
what I just explained was from the left
to the right. My next uh item is from
the top to the bottom. You can see that
our revenues were 49 million
with the total
cap with capital expenditures of 50.7
million
our revenues
our expenditures are greater than our
revenues but that has was planned for
and the reason is that what is bringing
us up above our revenue are there a
capital expenditures and as we know we
use our fund balance for for that and
right here what we're showing is our
operating revenue that comes in
annually.
Okay,
>> that was so that was planned for.
» that was so that was planned for.
>> And when you say fund balance
as opposed to unassigned fund balance,
are you saying that those capital
expenditures were already
put aside?
Nothing to do with the unassigned.
>> Correct.
» Correct.
>> Okay,
» Okay,
>> I'm going to interject just a quick
» I'm going to interject just a quick
point. One of the reports I wanted to
start off our training with was the fund
balance reports, but they're not
finalized yet, but it really helps you.
You can see the property tax and the
sales tax and you can see the money put
aside for all the stuff and it just it
really will help and we'll have that
next in September
so you can look at that. But it'll help
you. Yeah, responsible being on a
committee that I better really
understand things when I haven't really,
you know, I sort of semi okay, you know,
maybe find
this stuff now.
>> I'm available at any time uh you have
» I'm available at any time uh you have
any questions um if you'd like to sit
down and go over these reports.
Okay. So in terms of um
revenue details um I already mentioned
the high level just to drill down into
property tax. Property tax receipts were
a total of 30.28
million
right there.
um which is approximately 267 less than
the approved adjusted budget. Uh what
we're seeing and experiencing is that
properties are still staying on the
market longer and um and also affecting
the number of sales. People are still
it's just the market has slowed down a
little bit.
Um
the under sales tax the estimated
receipts are 15.61
million. Uh it's $34,000
greater than the approved but again
that's estimated. We will true these up
or update to actuals. um
the later this month when we receive uh
those those August figures.
Other revenue
receipts is a combination of revenues
such as interest earned on our cash
balances,
other um other jurisdictional or
intergovernmental sources which includes
grants and donations.
Um and that is a total of 1 3.17
million which is 1.32 million greater
than the approved budget
and primarily the reason is um the two
reasons um is the
we did receive um we we've done a lot of
work are we completed the work with at
HNG
Um, we should be are we um Sarah would
know. Yeah.
>> Yeah. I haven't had an update on that uh
» Yeah. I haven't had an update on that uh
in at least two weeks, but the last I
heard the HVAC was still being finished.
>> Okay.
» Okay.
So um the li since the library owns the
HNG building behind central library the
library applied directly to the state
for the building forward grant. It's a
capital grant. Um and in other cases
where we re where we worked with the
cities they applied the city applied
directly for that grant because they're
the owners. They own those buildings.
But in this case, the library owns the
H&G building and um and and it's a
reimbursement. So as the library spends
the funds, we can then draw down the the
funding from on a reimbursement basis
from this from the state. And so this
year we received $900,000
um from those grant funds.
Um,
and also,
uh, interest earned on our pulled cash
was $200,000 greater than anticipated as
well. The markets are doing well. Um,
and therefore, we're we're experiencing
that. Also, we receive PEG funds from
the city of Santa Rosa. Those are
funds that um are received because of uh
the city's relationship with um
contracts and agreements and they're
called right use of rights with Comcast
for example. Um and so you can use these
funds for
education
and um yeah educational reasons and the
city has provided some of those funds to
the library and the library uses them at
um the libraries that are located within
Santa City of Santa Rosa. They include
um studios, recording studios, cameras.
There's uh definitely one at Central and
I just saw the one at at Rinkan Valley.
Uh amazing resource. [snorts]
Um so some of those funds came in in
August, so we'll need to update our
revenues, but um uh that is recorded in
other revenue. Um
and so what's all what else is in other
revenue is a combination of donations
um you know our photo copies
um we do have a heavy use of photo
copies um here at the library and people
are using them because they get $5 a day
plus they they spend more and I if you
we've um the commission approved a rate
increase And even at that rate, it's
still
a better rate than in, you know, FedEx
or some Staples.
Um, and we also do community room
rentals and, uh, patrons pay the library
for any damaged or lost materials.
Any questions on revenue?
about the whole report just the revenue
piece.
>> I had one about the that same uh row
» I had one about the that same uh row
with the interest income for September
and February. It shows it as negative.
How does that happen?
>> Oh, it's a zero. It's it's zero. It's
» Oh, it's a zero. It's it's zero. It's
blank. Um interest is posted quarterly.
So,
the quarter ends at the end of
September, so it's posted in October.
>> Thank you. so on and so forth. Yeah.
Okay. I'll move into the expenditures
which is the latter half of this page.
And again we have the budgeted uh
expenditures here in the green. We have
our unodudited yeartoate those. So this
column here are actuals. what actually
was spent and money out the door. We
also have this column of encumbrances
which is new this year. It is a way for
further budget control and planning for
the library.
Um, Katherine was uh instrumental in
working with the county to uh
give us the the the authority to use the
encumbrance module in our financial
system.
Um so I will tell you for example here
um I would say
so we know that in
let's see we start with other contract
services we've spent 79
791,000 approximately actuals plus we
have encumbered or set aside
$38,000
for a to if when you add those two up
you have 830,000.
What does this encumbrance rep
represent?
are we may have contract. We when we
receive a contract and let's say the
contract is $100,000, but we know we're
only going to we plan on spending that
amount, but
out of all the contracts that we have,
we did not spend the full um the full
amount on those contracts, but we know
that we're on the hook for them. And the
encumbrance allows us to roll that those
funds over to the next fiscal year
because we know we're going to pay from
in those contracts.
>> What's an example of that? When there's
» What's an example of that? When there's
a contract, you don't use it all,
but then you have to use it.
>> So I can give an example. So for
» So I can give an example. So for
example, we have this FFN contract with
uh Jason Architecture for the new
Rosland library. So we opened that
contract in pre in the previous fiscal
year but um you know one payment was
made in 2526 but most of it is going to
be made in 2627. So we encumber the
total amount which is about $44,000
in the previous fiscal year but we only
spent say 12,000 that means we carry
over the balance into the next fiscal
year.
Um okay. So and then we have other the
other um large item here and I think I
have that uh explained. Um so for
example
uh oh
yeah
those are those are also like a
professional development um funds. the
in the labor memorandum of understanding
employees receive a certain amount of
funds for their professional
development. Um and if they don't use
them in that fis that fiscal year they
roll over. So they do accumulate
um and we budget for them and um so if
they're not used in this fiscal year uh
we h we end up with a savings. So that's
what's happening there. Um the
so yeah I'm going down here but I wanted
to also point out um under salaries and
benefits we spent a total of 32.331
million and that was um we did have a
savings of $240,000
there over here. Um
this in so the commission the all the
negotiations
did were were completed late in the
fiscal year and so the
commission adopted the newou in August
but it was retroactive to January. So
all of those costs were paid out in this
fiscal year. So they were recorded in
this fiscal year. Um and um but as you
can see, I think a $240,000 is a modest
savings. Um but it it it um we did in
the midyear re request an increase in
those costs um to reflect um those C
cola uh increases.
Okay.
Any questions so far?
I'd like to just take you back for a
quick thing. You're you're talking about
the county. Um again, the old under the
old arrangement the county we were
connect the library is connected to the
county. So when when Merida talks about
what the work the county does for us
now, they are like hired to do. Do we
call it fiscal or fiscal agent?
>> No, they're
» No, they're
they they're just they just provide
accounting services.
>> Accounting service. So we're paying them
» Accounting service. So we're paying them
as though we would pay, you know,
>> a consultant,
» a consultant,
>> somebody else,
» somebody else,
>> but but they're, you know, not working.
» but but they're, you know, not working.
We're not, you know, part of that. you
know, still we're separated from the
county and I don't know.
>> Yeah. So the county
» Yeah. So the county
uh in the auditor controllers treasurer
tax collector's office headed by uh Eric
Roger, they have a team that provides
accounting services to special districts
because at some point in their his in
the history of the county there there
are spe there are districts that are
much smaller than we are uh much more
focus narrow in their focus and uh you
know it with um the expertise within the
the audit auditor controllers's office
you have expertise but you have
economies of scale. So, this one team
that we work with, they serve several
special districts and um and so we they
they have an agreement with the library
and and the auditor controller office.
>> And uh we if we were to hire that that
» And uh we if we were to hire that that
team, it would be probably triple or
quadruple the cost for us. Um and they
are they have a lot of institutional
knowledge of um
the county policies and procedures. They
help us prepare for our audit
um and throughout the year with our
financials. So it is a uh quite a bit of
a a great investment um that is very
much a factor in
um the results of our audits and the
results of this AAA plus um
uh rating that we received.
So we are we are separate but we we it's
a it's a it's a it's a contractual uh
arrangement
>> for which we pay them. Yeah.
» for which we pay them. Yeah.
>> Yes we do.
» Yes we do.
>> Um and separately we pay the county for
» Um and separately we pay the county for
using their system. So for every invoice
they charge us for every invoice
transaction that we enter we get
charged.
Um okay so where am I?
Okay.
>> Oh yeah, I asked for questions.
» Oh yeah, I asked for questions.
Capital. Okay.
>> Um,
» Um,
and capital
the total inc uh expenditures including
incumbrances is 5.19
million. So we've spent 3.15 million. We
have encumbered two two million and we
uh for a total of
5.19
million. Uh we do exceed the that the
budget by 279,000
and this reflects this and it's driven
by these encumbrances.
uh we encumbered we did make a payment.
So here's another uh building forward
grant with the city of Ronert Park. City
of Roner Park applied directly to the
state for the grant. Um and in and we
have an agreement the library has an
agreement with them that whatever
the there there's a match that's owed
and the library and the city split it
5050 you know 50% the library
contributes to the match city
contributes the other 50 and we were
invoiced 21 our total was 419
19,000
and they invoiced us for 29,000.
And so we still owe another 210,000.
When they uh finish the work, they will
invoice us, but that is encumbered
because we know we owe it. Um and then
also
the architecture work for the for the
new Rosland library as director to bolt
mentioned um that work has not been
completed. So we also have about 44,000
that is still pending of work. And so
those are that's what's contributing um
the
budget versus actuals when it comes to
our capital.
The encumbrances though are reflecting a
lot of the work at Ricon Valley. Um the
work started last fiscal year. We were
original plan was to finish within June
30th but as you know uh with the grand
opening today the work completed in this
new fiscal year.
Okay.
Um all right so that is the summary you
do have through pages um I don't have
what these pages are uh
in the packet they're attachments five
through um 19
are greater detail
uh by account. So you can see how much
we spent on office supplies, how much
we've spent on janitorial,
so on and so forth. You have two sets,
one for property tax and one for sales
tax because they are in two separate
funds. And that's what I mean by funds.
And when I said that for the um bond
proceeds, we're going we're creating
even a another fund where we'll track
those. So it government
accounting is fund accounting and we
have to a lot of cases we need to
separate the different um sources of
revenues in a separate fund.
That's why you see the two set sets of
detailed spreadsheets.
Um
so we in this case we uh also report on
a monthly basis the cash balance as you
can see the cash balance as of June 30th
uh under property tax is 21.8 8 million
and sales tax is 12.3 million. And um so
as you can see here,
every organization has a cycle, a
revenue cycle. And for property tax,
the it it peaks at in December 23
million and then in April 25 million and
that co that coincides with the property
tax bills.
And then for sales tax is pretty evenly
distributed because we do receive a
monthly receipt except for July and
August.
Uh we do have what we call restricted
funds which are donations and bequests.
When when a
when someone leaves the library a
bequest, they may restrict it to a
specific branch.
Um, and donations with uh friends and
friends of the library or the
foundation, they do the same. Um, so
that's why we call it restricted.
Um, okay. So, next is our fund balance.
And as Chair McKenzie mentioned is that
um we do not have that statement in this
uh packet because we are still working
through budget adjustments, closing our
uh projects. So that um all of those
figures uh have a an effect on the fund
balance on reducing if we used so if
anything that was assigned and we reduce
we used it we make those adjustments so
that we can then have a final unassigned
uh figure.
Um if you're interested, you can go back
to prior months um that you've received
and look at that fund balance statement
and maybe you know you'll have some
questions for our next meeting.
Um okay.
Wow. Yeah.
The next um
report that you see is uh voucher
payments over $50,000. At some point um
the commission wanted to receive a
report of any any bill any any payment
that was over $50,000. So this is this
history.
Any questions so far? Okay. Not a
surprise. We've seen all
the uh the next um report is other
contract services. that is a an account
that you see on your detailed sheets and
um
and and because it includes a variety of
of of vendors, uh the commission had in
some time in its history requested to
see a list of vendors that are
recorded in this account. And so there
you are. Any
questions on this?
>> Well, things like this list of vendors,
» Well, things like this list of vendors,
is there a reason for us to have to know
this or is it more or less a team that
wind up being nothing we need to really
know?
>> There's a couple of reports in here. I
» There's a couple of reports in here. I
was going to go through these one by one
but to answer that specific question uh
in the in prior times when there were so
many so much turnover and changes in CFO
and this and that and the other thing
there were some people who had concerns
about certain stuff and one of them as
you mentioned was this voucher we want
to see these bigger payments so that's
what that report is on this this could
be a recommendation out of our committee
if we wanted to I don't know if we
should talk to the management see if
they want keep the bonus. But that
that's where that came from. And
certainly this other contract services,
it was a big concern about I think legal
services or something at the time. And
it's kind of well, we want to see what
what else you're contracting with. So
these were came out of some uh feelings
that prior commissioners had about what
was going on. I don't think we have
those same kind of concerns now. I mean,
you bring up a good point. So whether um
we want to continue to ask these be
prepared, you know, is something that we
should discuss when we're at full
strength and have to look at stuff. I
was going to kind of go through all of
these because from a commissioner
standpoint, there's certain things that
we should that we focus on that'll make
your life a little easier. I don't want
you to think that, you know, be
discouraged by this because, you know,
it's a lot of stuff and, you know, we
look at things differently on the
quarter and we look at things different
at the end of the year, but on a monthly
basis, we're looking at a more
streamlined
uh, you know, outlook. And I really
appreciate Merida's efforts to, you
know, walk us through this kind of
detail, but you're hitting deep detail
today that you won't necessarily have,
you know, every month to to look up.
>> Yeah. And I can um answer part of the
» Yeah. And I can um answer part of the
question. So, you know, there are
certain, you know, we have certain line
items in each of our department budgets
and I think we we can't provide um a
level of detail because some of the um
some of the items are kind of very broad
in general and so other contract
services that appears in all of the
departments and I think there was a like
commissioner McKenzie said that there
was a concern that things were being
kind of hidden in that uh and so this is
what was the result of that. So, just to
see and if you ever have any questions
about, you know, what these are for, you
know, we can certainly answer them. Um,
but it does comprise a variety of
different, it's mostly professional
services. So, you know, we hire a
strategic planner that goes in other
contract services. We hire an executive
coach that goes in other contract
services. our translation with Barbie.
Um some of our um our other uh you know
HR our fingerprinting goes in other
contract services. So it's kind of a
catchall place where these professional
services that we contract out for uh
exist.
» I I would like to add that it's not
unusual. It is a common practice in or
in uh reporting out in in transparency
and communication
uh with uh the governing board. So it's
not unusual this have this level of
detail.
>> Well, that's good to know. It's always
» Well, that's good to know. It's always
better to have it. You know, you don't
have to look at it, but you have it. And
you I appreciate your point of is it
extra work, but it is like set up. No,
>> right. I mean those are no it's it's a
» right. I mean those are no it's it's a
good practice I would say
okay
um
if you do you have any qu did um chair
McKenzie did you want to go over any
other specifics because I'm towards the
end that I was going to wrap up but if
you had any other questions on other
reports go over that I don't have any
more questions questions. Do any of you
any either excuse me
have any questions about um I would say
it's the first four pages of our
after that
Step out.
» We can just take a pause.
Unless Eve or Kimberly, you have a
question just about, you know, the forms
in general.
No, I you know I was looking in the
wrong place and I got a little lost on
this page, but I'm just going to look at
it and think about it after the meeting.
If I still have a question, I'll call
you
>> and it it takes time to
» and it it takes time to
>> it takes time to to get to know all
» it takes time to to get to know all
these
>> also.
» also.
I was following for a little while.
» I'm sorry. I sw something went down
wrong. And
>> anyway, where are we?
» We're wrapping it up.
>> Wrapping it up.
» Wrapping it up.
So anyway, let me go back to the top
page here, the summary. So you're going
to see that once a year. This is the
year in sum. Next month you'll see that
month's information.
One of the things that I found helpful
in the last while is the percentages.
A way to kind of guide to for your own
benefit like where we are in our
expenditures
and if it's the first month that would
be is it 12%.
No, that's not
112
>> 112.
» It's what?
» But as we go along, it's kind of an easy
way you can check and monitor. And
again, we're in just so much better
shape. [clears throat] It's so much more
clear where we are. But that'll you'll
see that next month.
>> Yeah. So then a whole in the summary
» Yeah. So then a whole in the summary
cover page. salaries and benefits. You
look at total effective budget, we spent
93 993%
of the budget,
>> which is pretty darn good budgeting.
» which is pretty darn good budgeting.
>> So on and so.
» So on and so.
>> Yeah.
» Yeah.
And again, next month you're going to
see one month's worth.
Um, but it's also September, so it's a
quarter. So we are going to have all
these reports.
>> September quarterly. You'll see in
» September quarterly. You'll see in
October.
>> Oh, okay. I'll get October.
» Oh, okay. I'll get October.
The second page, the cash balance
summary. The most interesting thing on
this to me is that uh this has all these
details of these individual bequests.
This has all been cleaned up enormously
by our wonderful staff who this used to
be a kind of big mush mish mash and this
has all um been identified by the
individual donors and so forth. Um the
voucher thing again what I always look
at is just that top month the latest one
you've got the whole year but you know
the top one is what you want to look at
so you don't have to spend you know a
lot of time on that report the contract
services are is you know interesting
again to just to keep an eye on things
and then you get into these details it's
for us to have but we don't spend a lot
of time in the finance committee going
over any of that except if anybody has
any questions. So anyway, I don't want
you to feel, you know, bogged down in in
reporting when we come here. Um,
I think that's all I was going to say
about that.
This this final uh page here, I don't
know what this my pages aren't numbered,
so I'm not sure what to call this. The
allocation of actual expenditures.
>> Yeah. So this report I like to show have
» Yeah. So this report I like to show have
a policy
of
we we have a policy
allocation of major revenues where um
it provides guidance to staff on how to
I primarily use it for uh formulating
the budget And um and so we know how
what percentage uh what percentage of
the expenditures
are allocated to
property tax and to sales tax and um and
so at the end of the or on a quarterly
basis but
uh here and year end um if you look at
the actual expenditures okay and I do
say does not include the incumbrance but
just actuals what has been out the door.
Um
we know through the
the policy that expenditures
capital expenditures are allocated 10%
to property tax and 90% to sales tax. So
basically this chart is a summary of uh
how much was spent in property tax, how
much was spent in sales tax and then
gives you the the split and it should
match the budget on how the budget was
adopted. Um
so we have uh the first two charts uh
show the serviceoriented divisions. Uh
we the policy states that um capital is
10% to property tax, 90% to sales tax.
It uh it pro gives us a range on
salaries, services and other charges. So
when the budget was adopted, the
percentage to property tax was 62% and
38% to sales tax.
Under administration divisions, the
policy is a little is more strict. Um,
it states that the property tax pays 90%
of those expenditures and sales tax pays
10% of those expenditures.
But when we add them all up, the the uh
all the divisions together is the LA is
the third col um chart. And um and then
I give you it essentially all blended
together. The property tax has picked up
62% of expenditures and sales tax 38%.
» This was a real important, you know,
kind of bottom line thing like in terms
of our funding, right? It's really nice
to see that 6238 because sometimes we'd
say two 2/3 one whatever. I mean, this
is a real number and I'd like to add a
tiny bit of background here. Before
Measure Y was passed, it was all
property tax. When Measure Y was passed,
it was passed with an expenditure plan.
So, the public was told, "This is what
we're going to spend your money on." And
it wasn't to take away uh some book
budget to spend it for something else
and then supplement it with measure Y.
It was supposed to be an additional
amount. And so for several years we went
through this kind of a very hazy period
where it really wasn't clear the
allocation of the pro of the measure Y
money and again going through several
CFOs was very blurry whatever and then
America came along and understood that
we really had to have a policy a written
policy what percent well how the heck do
you figure that out but she came up with
this rather brilliant plan of looking
back and seeing what it had
traditionally been and now it's a set
formula. It isn't exactly to the penny,
but the 9010 is is exact. And so we're
never going to spend more of our um the
measure Y money is going to be spent on
buildings, for example. Um and the and
the 10% will come from property tax, but
90% is going to come from measure one so
this is incredibly valuable tool to have
that is in place. what it's been three
or four years or so since you came up
with this. And um how long has it been
five?
>> It'll be five in know uh let's see I
» It'll be five in know uh let's see I
started in November of 21 and then I
think it was adopted in January or
February. So yeah up we're coming up to
five years. Fantastic.
>> I started in June 2021. So I just had my
» I started in June 2021. So I just had my
fiveyear anniversary.
>> Oh bra.
» Oh bra.
>> I'm vested now.
» I'm vested now.
>> Wow. Cool. That's great. So the um the
» Wow. Cool. That's great. So the um the
measure Y oversight committee the
citizens oversight committee is meets
this Thursday and so I will be
presenting the same information and this
that's where this chart is particularly
of interest to that committee.
>> Yes. And it wasn't clear and I used to
» Yes. And it wasn't clear and I used to
talk about this because I was really
worried the grand jury would come in and
do an investigation. No one could
understand what I was saying or would
listen to what I was saying about this.
And so it was finally, you know,
Meredith who really got what I was
talking about and and Judy Glenn on the
Measure Y committee used to say the same
thing too. Well, wait a minute. This,
you know, whatever. So anyway, feel
secure that we have a formula and it
really works and it's justifiable and it
makes sense and the expenditure measure
Y money is very clear now. Another
piece that um that this committee we
that staff reports to and this committee
are updates on policies and procedures.
And um
we we normally like to report this like
in February or March, but uh here's a
summary that you know the budget and
financial services team has completed
the following more than this but these
are the highlights. Uh updated the
grants management process. Uh supported
the update to the gifts and donations
policy. Um, we've implemented the
incumbrance module in EFS, which is our
financial system to support greater
budget controls. We prepared an
additional analysis for the additional
discretionary payments to pay down the
pension unfunded acred liability. Um, we
will be making our first payment uh by
December of this fiscal year. Uh BAPS
has also had a key role in uh prep
preparing for the financing and the
purchase of the uh operations
uh center building
and um in September we we uh plan to
share with you an update on the
purchasing policy. Um it's been in good
it's been needed to make some updates on
that and uh we'd like you to provide you
some information also on bequest. Um so
that that concludes my report today and
unless you have any more questions.
» So when I was uh coughing did I miss
Katherine's appropriation transfer? No,
we haven't on there yet.
>> Okay.
» Okay.
>> Nothing to report.
» Nothing to report.
>> I know, but it's on the agenda, so you
» I know, but it's on the agenda, so you
can report that we have nothing to
report.
>> So, that's the next item on the agenda.
» So, that's the next item on the agenda.
Um,
>> I thought you had jumped to the
» I thought you had jumped to the
workflow. That's why I was asking.
>> No, we haven't.
» That is correct. We had no appropriation
transfers this past quarter. Um to give
you some background, we have an
appropriation transfer policy and it's
to allow um within the director's
delegation authority to move within
budget small items. Um so say
um when you look at the budget, I I made
a budget that I was going to spend
10,000 in other contracts, but maybe I
throughout the fiscal year I end up
using it somewhere else. allowed to move
that like I said as long as it's within
the director's delegation of authority
and then we report it quarterly all of
those sources.
>> Yeah, I can give you an example of that.
» Yeah, I can give you an example of that.
Like so we have our other contract
services and then we have another line
item that's very similar to that and I
forget outside consulting. And so my
contract for the strategic plan, for
some reason, all of the money was
encumbered in other contract services
and it was a little over. So I took some
of the money from outside consulting and
I put that into um outside or other
contract services just so that you know
I was still staying within my budget.
Um so just a little bit of background on
that is
that those level of tr of of
transactions as small as it might be
$5,000 and you know from training into
office supplies
um that authority lies with the
governing board.
Uh so when we we couldn't make those
those those uh transfers
um and
it happens quite a bit three four times
in a quarter and uh and we would have to
come to so I would put everything on
hold until mid year and then have these
small amounts uh transferred uh at the
midyear report um uh point but Um
uh in talking to the county, the best
practice is well if you have a policy
where the governing board then delegates
that authority to staff the director or
and the CFO in this case in this in this
policy then it sets a a process for um
the library to make these routine um uh
transactions and uh and then for
transparency purposes provide this
committee and the commission a report of
how monies were moved around in the
budget. That policy does give us
restrictions. There are restrictions. So
we cannot we won't be able to move funds
from you know uh the new fund where
we're tracking the proceeds into
property tax that we will have to still
get authority and and the commission
will have to approve that.
>> So for our gifts and donations so we
» So for our gifts and donations so we
cannot move money out of any of our um
restricted funds our our bequests um I
cannot do that only the commission can
do that. So that was one of the um
exemptions
» all about transparency.
>> Yeah.
» Yeah.
>> Okay.
» Okay.
>> Oh, and controls.
» Oh, and controls.
>> What?
» What?
>> Controls.
» Controls.
>> Those are key.
» Those are key.
>> Okay. So, uh any questions about the
» Okay. So, uh any questions about the
appropriations, transfers,
um and then we have a workflow that our
CFO put together for us a few years ago.
It was so kind of help people.
>> The only thing I noticed when I looked
» The only thing I noticed when I looked
at this one is that we used to have uh
when the finance committee would see it
and then when the commission would see
it. Did you did you take the commission
part off that for a reason?
I think so. I think I received feedback
to simplify the chart.
Um but normally the fi the normally what
happens is the month that you see here
right the finance committee sees it in
August the commission normally sees it
the following month unless this finance
committee says no we need more work
bring it back to the finance committee
but it will not advance any item will
not advance unless this committee has a
consensus to recommend it to the full
commission.
Well, if it's not a problem, we can, you
know, we'll leave this new version. I
did want to say that I was thrilled to
see in February the five-year forecast.
>> We've been talking about that for so
» We've been talking about that for so
long and and I noticed it was referenced
in that AMN report that we had the
five-year help forecast really helped
with that.
>> Yes. though um the commi the I did
» Yes. though um the commi the I did
provide a forecast to the commission
over um leading up to the decision of
the acquisition. That was the biggest
impetus for that. Yeah,
>> we did have a a forecast prior to that,
» we did have a a forecast prior to that,
but it had not been updated and it was
it was just a good timing to update that
force cast given the the the decision
before the commission.
>> Yeah.
» Yeah.
>> Um so I do have it here to program it to
» Um so I do have it here to program it to
to update it annually.
And the other thing I was really happy
to see was the the draft policy for
allocation appropriation of fiscal
surplus.
So I won't go into that today, but you
know, in the past we wondered about what
the policy was when we have, you know,
these funds, these they're one-time
funds and they're the unassigned fund
balance funds, right? And so what do we
do with that money? We've never had a
policy about it. it's been um somewhat
you know kind of reactive to the
circumstances and what we've needed for
and then there you know the fixing up of
the different libraries and so forth
there hasn't been a real clear policy
about so anyway I'm great that you're I
know you have mentioned that Erica in
the past why why we needed a policy so
I'm glad that's going to be before the
committee in November so
any questions I know it's can be kind of
overwhelming all the the information
today But u I really appreciate uh MNA's
efforts to give you the full picture
which she did very well and Erica's
comments on the
a lot of the specifics any um thing that
you would like to know more about or
is it time to digest?
Well, my two questions I guess are ones
that are going to be answered later in
the year. I just thought also it's
important to for me at least to get a
handle on the different kinds of funds
once this season fund balance I kind of
understand that when there's a big
surplus take from it when you need to
take from it as things come up and then
eventually there isn't the big surplus
and then what happens then how do we do
planning for that. And then my other
question I guess that's it's not a
question exactly just a concern is so it
seems like costs for most things keep
going up whether it's for
FFN stuff whether it's for um labor
costs
well what happens over time since that
seems to be a trend if our income either
stays flat or goes down.
What happens then? Is that part of the
surplus that goes in there? And I I
don't you know long-term planning kind
of or not longterm midterm. How does it
look? What happens?
>> Well, that would be part of the
» Well, that would be part of the
forecast.
>> Yes.
» Yes.
>> You'll also see the reserves on the fun.
» You'll also see the reserves on the fun.
See the fund balance activity report.
See those reserves. We have in fund
balance policy. We have policy about re
rainy day funds and what's the other one
anyway you know there's there's a lot of
builtin support to those kind of
questions about lesser lesser income but
um I'm really glad that we'll have this
policy to plan just what we're talking
about that's what we got that money
you know policy way so um again
starting off um asking very good
questions and you know there's a pretty
steep learning curve about all of it I
found and um but you're asking
>> yeah and you know when we do ourou
» yeah and you know when we do ourou
negotiations we do actually look at um
you know our projected revenue increases
and what we can what we think we can
afford in terms of cost of living
adjustments. So um you know we our
contract ends in 2027. It feels like we
just finished it. Um but we will be
doing that analysis again you know um
this time next year. Um we will be
looking at our revenues as well as you
know MNA is always talking to the county
about their projections as well and then
coming up with um you know colas that we
think we can reasonably afford and not
you know not promising more than um we
think we can deliver.
But then some of our building projects,
you know, we've we've reduced scope um
so that we have stayed within budget for
our building project. So there we have a
variety of different tools we can use to
make sure that we're kind of staying
within budget. Um and that is one of
them.
Okay.
>> Well,
we're on the the workflow. So,
as you can see, are they Oh, yes. So,
like in October, you'll see capital
project update one. So, on a quarterly
basis, I provide another control and
report back to the committee is what is
the status of the capital projects? uh
how much what what the budget is, how
much was has been spent, how much work
um and any reports on delays that have
happened um are reported here. So we do
make modifications, you know, definitely
we've received much very good feedback
from the the finance committee. I'm
like, "No, we don't support an increase
of that much or what are you what are we
getting for the for this amount of
money?" Um, all of those really good
questions and uh, you know, we we it's
an iterative process and staff has then
come back with something that's more
palatable to the committee and uh, and
then, you know, recommended to the the
full the full commission. So, it's a
it's a it's a good a really good role
and um iterative process with with the
finance committee that plays in in
making these decisions to stay within
budget and uh yeah,
>> you really enjoy being on the finance
» you really enjoy being on the finance
committee because it's a it's just a
deeper dive into stuff. I hate using
that term, but anyway, the, you know, we
go to our commission meetings once a
month and we learn, you know, kind of
basic stuff, but this you really kind of
get into a lot of the meat and potatoes
and just working together in a smaller
group is great and working closer with
the staff is great and I think you'll
really enjoy it. And um
so last call for any questions before we
talk about uh oh, items for future. What
would you like to talk about at a future
meeting?
If not,
>> I just said mine
» I just said mine
in the next.
>> Okay,
» Okay,
>> we'll just follow the process then, but
» we'll just follow the process then, but
you can always add items on and the end
of a meeting. Um, next meeting is uh
we'll stay with our current schedule
which is would be Monday uh September
21st, the third Monday at 2 o'clock and
then see where we are or who's here and
make decisions about more stuff.
>> Thank you. So do I. Anyway, um,
» Thank you. So do I. Anyway, um,
cheers. Thank you for being here and
everybody all the staff and the new
commissioners and
a great meeting.
>> I I forgot to mention um according to my
» I I forgot to mention um according to my
calendar Monday the 21st is Yam Kapoor
» Yam Kapoor.
>> Yeah. Do we want to reschedule the
» Yeah. Do we want to reschedule the
finance committee meeting? I'm fine with
that if if it's a
» just want to make sure that we're not uh
violating anybody's religious freedoms.
>> So, we're good with that.
» So, we're good with that.
Okay, we will proceed then and uh hope
to see you in September.
Goodbye.