GVPL 2022 Budget and 2022-2026 Five Year Financial Plan

BUDGET AT A GLANCE

Note 1 – Operating budget consists of operating expenses only Note 2 – Net of Amortization Note 3 – Total budget funded is equal to Expenses (Operating budget) less amortization (non-funded expense) + capital budget Note 4 – Municipal Contribution Total divided by Population Note 5 – Municipal Contribution Increase divided by Population Note 6 – As per BC Stats, 2020 Sub-Provincial Population Estimates

Note to Budget – Municipal Contribution As with previous annual budgets the municipal contribution increase is being offset by the approved use of accumulated reserves and contingency. The use of contingency to offset municipal contributions was approved as part of the five-year plan included in the Fiscal 2021 Budget and Five Year Plan. The use of contingency specifically is set to be eliminated in year four of the five-year plan, when the impacts of the COVID-19 pandemic are expected to be minimized.

2021 Budget and Five-Year Financial Plan

Revenues and Expenses (Operating Budget)

Capital Expenses and Transfers

2022 MUNICIPAL CONTRIBUTIONS

¹ The Rent Adjustment is calculated in accordance with Section 8.12 (a), (b) and (c) of the Library Operating Agreement and relates to portions of buildings used to benefit all member municipalities: the Collection and Technical Services section of the Juan de Fuca Branch building and the Administrative portion of the Central Branch building. Municipalities which did not contribute to the initial acquisition of such building or who did not subsequently purchase a portion of such building pays reasonable rent to those Municipalities that did.

² Building Maintenance Costs for jointly owned buildings are additional municipal budget amounts that are over-and-above the requisition for the library operating budget. The two branches that are jointly owned are the Central Branch and the Juan de Fuca Branch. In 2018 the City of Victoria took over administration of building maintenance costs for thr Central Branch, GVPL will no longer be invoicing for these costs separately, as such those costs are not included in the budget. In 2021 West Shore Parks and Recreation took over administration for the JFMAM and maintenance costs for the Juan de Fuca branch, as such these costs are no longer included in the budget.

2022 MUNICIPAL PER CAPITA CONTRIBUTIONS

¹ Source of population figures - BC Stats website: https://www2.gov.bc.ca/gov/content/data/statistics/people-population community/population/population-estimates, 2020, accessed July 12 2021

General note: Percentage share of costs by municipality are determined based on 50% property assessment value and 50% population estimate. More detailed information on assessment values and population are available on request.

Notes to the 2022 Budget and Five-Year Financial Plan

Approximately 90% of the GVPL operating budget is funded by our ten municipal partners. Consequently, a key objective is to maintain municipal contribution increases within an acceptable range, typically based on rates of inflation and wage increases as negotiated through Greater Victoria Labour Relations Association. “Acceptable” increases are ultimately determined by Councils upon consideration of our budget requisition.

Because needs and opportunities change over time as we strive to best serve our communities, GVPL’s budget process allows reasonable flexibility for business areas to adapt and optimize their activities as events unfold, while still requiring system-wide financial planning and accountability.

For 2022, operational efficiencies through cost avoidance strategies will continue to be explored as the organization normalizes the ongoing impacts from the COVID-19 Pandemic. The use of reserves has been approved to augment some un-avoidable budget increases.

GVPL is committed to operating efficiently and effectively to deliver library service to 10 municipalities. The library system leverages more than 100 active community partnerships to expand programs and lifelong learning opportunities for Greater Victoria residents.

Components of the 2022 budget include the following:

1. Municipal Contributions – Operating

Increase $361.574

The Greater Victoria Public Library budget is allocated as illustrated below. The majority (75%) is attributed to salaries and benefits which are jointly negotiated through the GVLRA. Salaries and benefits are the key cost driver for GVPL.

2. Municipal Contributions – Start-up

Decrease $293,560

In 2022 there is a decrease to the start up contributions as the majority of the start up funds were expended in 2021. The remaining funds allocated in 2022 are for minor start up costs which are expected to stretch into 2022 as the new branch is opened in late fall of 2021. As with prior years these are funded by the individual municipalities providing the facilities.

For 2022 the following has been identified for branch start-up funds:

• Esquimalt Branch relocation - $61,720

The majority of these contributions are for capital expenditures, with a small percentage of start-up funding going towards non-capital costs, such as moving and some supplies below the asset threshold.

3. Provincial Grants

No Change

Provincial funding for public libraries in British Columbia has remained frozen since 2009. We are not projecting any change to the previous year’s amount granted to GVPL of $642,339.

4. Federal Grants

No Change

Federal grants are cyclical in nature and are dependent on specific programs planned during the operating budget year.

5. Fines, Fees and Printing

Decrease $30,000

Due the uncertainty over the long term effects of the COVID-19 Pandemic, the revenue income derived from Fines and Fees was reduced. Fines and Fees are currently under review as part of a larger organizational initiative.

6. Contracts for Service

No Change

This is an annual payment of $28,450 from the Capital Regional District for service delivery relating to the Juan de Fuca Electoral District. (Willis Point, Durrance, Malahat)

7. Investment Income

Increase $11,000

Investment revenue is conservatively estimated to reflect projected continuation of modest earnings in the Municipal Finance Authority bond fund and slight increases in returns for secured GIC’s.

8. Donations and Other Grants

Increase $7,500

Donations and grants are cyclical in nature and are dependent on specific programs planned during the operating budget year. New funding opportunities will continue to be explored in 2022, in tandem with new donor engagement strategies.

9. Salaries and Benefits

Increase $867,202

• Labour is budgeted at full schedule hours (which may differ from operating hours) meaning the budget is fully loaded to support full service, there is no anticipated changes as a result of adjustment to open hours or Sunday Services when restored.
• Contractually negotiated increases account for $291,000
  • Net labour increase is ~ $575,000, which consists of labour and direct benefits costs as follows:
    • Labour $446,000
    • Benefits $129,000

This budget includes employee benefit costs and payroll withholding costs such as EI and CPP. A detailed benefit review occurs prior to the annual budget cycle and budget development. As a result of this years analysis we have determined that the rate of benefits and withholding costs will reduce slightly to 23% from the prior year figure of 23.70% of total salaries and wages.

10. Library Materials (Expensed and Capital)

Increase $459,542

The library materials budget is split between Expenses for periodicals and eResources and Capital Expenses for books, audio visual and electronic materials which are capitalized as assets and amortized over 7 years.

Demand for digital resources has grown substantially as a result of the service changes related to the COVID-19 Pandemic, as a result additional funds are being allocated to meet the ongoing and expected continued demand.

In addition new funds are being added to the physical collection budget to meet demand and offset higher costs for print materials. These new funds will allow for new materials and collections over and above the existing budget which has been held stable for some time.

For Fiscal 2022 funds are available within the Library Materials Reserve and donated funds to offset this increase. Collections budgets will be reviewed during the upcoming fiscal year to determine a long range plan for collections expenditures when collections demands are expected to normalize post pandemic.

11. Amortization

Increase $300,000

This is the estimated amortization expense for tangible capital assets, in accordance with the Board’s Tangible Capital Asset policy. Since this is an unfunded expense, it is added back to the budgeted annual surplus, and does vary year over year pending capital asset purchases and disposals.

12. Supplies and Services

Decrease $351,528

Supplies and services include such items as telephone, networks, printer paper and other supplies and shuttle fuel. These items have all increased slightly, but through effective negotiation of service contracts, in particular network access contracts for in branch internet services, a substantial reduction for the costs associated with the provision of high speed internet was found.

13. Building Occupancy

Increase $68,552

Building occupancy includes maintenance contracts, security, garbage and utilities. Security costs have increased due to higher contract costs (including minimum wage increases, contract renewal and additional service requirements). Contracted cleaning costs are also included in this budget line. The cleaning contract renewal has been deferred as a cost saving measure, thus allowing for minimal increases in this area.

14. Other Expenses

Increase $21,239

Other expenses include such items as insurance and employee recruitment costs, marketing costs, and business travel expenses.

15. Other Capital Expenditures (Hardware, Furniture and Equipment, Building Improvement)

No Change

16. Transfer to/(from) Reserves

Change in Net Transfer From Reserves $726,313

Change to Reserve transfers are as follows:

• Transfer from Library Materials Reserve - $431,723
• Transfer from Contingency Reserve - $294,590