Wednesday, April 29, 2009

Budgeting for the new fiscal year

As the staff and I work through the process of creating a budget for the fiscal year beginning July 1, 2009.

The overall budget is estimated to receive a total increase of 4%, with the property tax portion held to a 1.05% increase on existing property in the district plus the amount received from new property in the district. That includes any newly-constructed property added to the tax rolls since the last tax year. The percentage increase is on the dollar amount collected. The tax rate for the district continues to decline.

Our mandated Illinois Municipal Retirement Fund contribution rate, the second largest single budget line outside of staff salaries, will increase nearly 10% next fiscal year, necessitating freezes or limited increases of 3% or less to all other budget lines. The Illinois Municipal Retirement Fund (IMRF) is the pension fund for library employees. IMRF contribution rates and formulas are entirely controlled by state law. Until the recent downturn, IMRF was one of the only state pension funds to be fully funded. This increase in contribution rate is required to meet the state laws governing IMRF.

These budget constraints for the upcoming fiscal year have led me to request that the Board of Trustees freeze my salary for the upcoming fiscal year and instead to use those funds to maximize staff salary increases. Initial budgeting for FY10 shows that staff salary increases will have to be capped at 3% or less for the total salaries budget. Two years ago, the Board of Trustees approved a compensation plan that alternated annually between benchmarking of the salary schedule and merit increases. The upcoming fiscal year was to be the first year for merit-based increases to staff salaries. Because our staff has done an incredible job in dealing with huge increases in their workload in recent years - and especially in the past year - I felt it imperative to move forward with salary increases for the staff.

The preliminary budget will be presented to the Board of Trutees in May and finalized in June.

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