Budget Exercise
You are told that the financial support you receive will stay flat. However, you must give an across-the-board raise of 5% to all employees. In other words, your budget total (with the 5% raise) must not be different from the flat budget total.
A: impact of benefits on your calculation (NOTE: The total you need to cut from your budget is not just 5% of the salaries. Benefits are based on the salaries, so if salaries go up, so does the cost of benefits. So, in addition to calculating the 5% salary increase, you should calculate the benefits cost as well and calculate how you will adjust other lines. To do this, multiply the cost of the 5% by the amounts in the (1) Retirement, (2) Payroll taxes and (3) worker’s compensation lines.
Then, add that total to the 5% of salaries total, and that will give you the total amount to increase salaries and adjust down the remaining line-items.
Normally, the benefits cost can be calculated by a formula that will yield a 25%-30% of salaries. Do not use that figure.
In a few paragraphs, discuss how the group would adjust the budget line items to accommodate the 5% raise in a budget with the pending flat budget.
– Use the budget in table form (see document below)
B. Revenues: Revenues must not be changed. Line items in red must remain the same as the 2020-2021 budget, except you may increase the following lines by up to 10%: (1) Book sales, (2) Photocopying/printing and (3) Miscellaneous
C. Salaries and benefits: As mentioned above, you must increase the following line items by 5%: (1) Salaries, (2) Retirement, (3) Employee Payroll Taxes and (4) Workman’s Compensation.
NOTE: Health benefits usually increase each year, but it isn’t tied to a mandated increase/decrease in the annual budget. Health benefit costs are at the mercy of negotiations with the insurance company. We will assume no change for this exercise
D. Don’t forget, your total Revenues must equal your total expenditures
Memorial Library
2021-2022 Annual Budget
Serving a City of 24,000
Receipts and Revenues:
NOTE: Do not add any amounts into cells in Red
Line Item 2020-2021 Budget 2021-2022 budget Increase
Fines/Lost Paid $33,000
State Aid Revenue $19,000
Bank Interest $4,000
Book Sales $4,500
Photocopies/Printing $9,000
Miscellaneous (gifts, agency fees, meeting rooms, etc $9,050
Total Receipts $78,550
Local funding 2,960,407
Receipts 78,550
Total Revenue 3,038,957
Expenditures
Books and Materials
Current number of items Increase in items from previous year 2021-2022 budget
Books $27,000 418,347 1305
E-Books $28,500 90,447 1690
Compact Discs $2,700 2,331 117
Audio Books $12,500 11,385 570
DVD Collection $16,000 26,292 1314
Video Games $1,900 245 12
Periodicals/Newspapers $18,980 303 4
Online Reference Subscriptions $27,000 55 0
Programs $60,000 75 0
Online Catalog $50,500 1 0
Total Costs: Books, etc $245,080
Buildings, Grounds, Utilities
2020-2021 Budget 2021-2022 Budget Difference +/-
Equipment – New 27,000
Equipment Repair 28,500
Service Contracts 50,500
Building Repair/Maintenance 36,000
Grounds 13,000
Custodial Supplies 9,550
Fuel 12,000
Water 4,500
Electricity 57,000
Telephone 4,950
Data Communications 13,000
Insurance 32,200
Total Buildings, Grounds, Utilities 288,200
General Operations
2020-2021 Budget 2021-2022 Budget Difference +/-
Book Processing 3,400
Library & Office Supplies 23,000
Printing & Publicity 3,400
Postage 2,000
Newsletter 750
Regional Library System 20,300
Total General Operations 52,850
Administration
2020-2021 Budget 2021-2022 Budget Difference +/-
Payroll & Benefit Services 7,100
Legal/Accounting 17,100
Outside Services-Security 34,700
Secretary to the Board 1,800
Conferences/Continuing Ed 4,000
Professional Dues 3,500
Professional Fees 2,500
Collection Agency Fees 2,500
Total Administration 73,200
Salaries and Benefits
2020-2021 Budget 2020-2021 Budget Difference +/-
Salaries (Librarians/Staff) 1,429,705
Retirement 312,000
Employer Payroll Taxes 147,622
Health Insurance 463,500
Workers’ Compensation 16,500
Disability Insurance 5,300
Sick Leave Compensation 5,000
Total Salaries & Benefits 2,379,627
Grand Total Of Expenditures
2020-2021 Budget 2021-2022 Budget Difference +/-
A: Library Materials 245,080
B: Buildings, Grounds, Utilities 288,200
C: General Operations 52,850
D: Administration 73,200
E: Salaries & Benefits 2,879,627
Grand Total 3,038,957
Other Statistics of Possible Value for the Annual Report
Statistic Type Total amount Increase/decrease over previous year
# of Circulations 1,025,005 113,678
Customer visits 575,420 67,955
Program Attendance 6,683 210
Active users 120,260 2,305
Reference transactions 160,366 3,899
ILL transactions 259 32
Internet Computer use 55,780 12,025
Other useful stats:
Number of librarians: 22
Number of staff: 34
Total librarians/staff 56
Number of branches of the library 10
