 |
|
Funding & Budget Brief
- Kitsap Rural Library District (dba: KRL), a junior taxing district, receives 95% of its funding through property taxes, consistent with RCW 84.52.063, which limits the amount of taxes levied on behalf of the Library District to fifty cents per thousand dollars of valuation. State law, established in 2002, limits property tax increases on existing property to no more than 1% over the amount collected the previous year, plus new construction.
- KRL's current levy rate for taxes levied in 2006 (for assessed valuations in 2005) is 36 cents per $1,000 of valuation. The anticipated 2007 levy rate (for assessed valuations in 2006) is 30 cents per $1,000 of valuation.
- The City of Port Orchard contracts with KRL for its library services (the formula used, via Interlocal Agreement, is the city’s assessed valuation multiplied by KRL’s property tax rate). For 2007, this reflects a preliminary amount of $215,358.
- KRL’s yearly property tax revenue disbursements fluctuate considerably throughout the entire year, with April and October being the two months where over 60% of the year’s tax revenues are received by the District. This disbursement methodology requires that KRL either borrow money, or, that we have a reserve sufficient to address intermittent cash shortfalls, especially during the first and fourth quarters of each fiscal year.
- To ensure sufficient funds are available during temporary revenue shortfalls throughout each fiscal year, the District has established a Revenue Stabilization Reserve Fund (to be maintained at 17% of Operating Expenditures).
- In the late 90’s, KRL had built an excellent General Fund reserve, but with the specter of potential property tax initiatives that could limit KRL revenues, KRL maintained a very conservative budgeting philosophy.
- In 2002, a property tax limitation initiative was passed limiting property tax increases to 1% over the prior year’s revenue, plus new construction.
- From 2001-2005, KRL operating revenues increased an average of 2.38% per year, and operating expenditures increased an average of 4.64%.
- Since 2001, KRL budget forecasts have shown that in order to maintain services and keep pace with inflation, the District would have to request a levy lid-lift, every 3-4 years. In 2001, we anticipated the necessity of placing a levy lid-lift measure on the ballot in 2004 or 2005. The District has been able to “stretch” this timeline to 2007 (for additional revenues realized in fiscal year 2008), by tapping the unrestricted General Fund reserve.
- Starting in 2006, in order to maintain existing services, while also keeping pace with inflationary and cost increases, KRL has had to draw-down the unrestricted General Fund reserves by a total of approximately $2.1 million, in order to balance the 2006 and 2007 budgets.
- If the Library maintains existing services and keeps pace with inflation and growing demand, it is projected that the Library will have a $1.8 million deficit in 2008, unless a funding solution is identified and approved.
2006:
Library District’s Assessed Valuation: $22,729,481,614
Library District’s Property Tax Levy Rate: $0.36 per $1,000 of valuation
Library District’s Property Tax Revenue: $8,218,981 (includes new construction)
City of Port Orchard contract: $213,654
Total Property Tax Revenue: $8,432,635 |
|
