City considers surplus tax uses and a library reserve

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June 21, 2005
Honorable Mayor and Members of
the Hermosa Beach City Council
Regular Meeting of
June 28, 2005
LIBRARY PROPERTY TAX CONSIDERATION
FOR THE USE OF SURPLUS FUNDS
Recommendation:
That the City Council review the proposed alternatives for the use of surplus property tax funds
collected for the operation of the library and select an alternative and direct the City Manager to
inform the Library system.
Background:
The property tax that is collected for the support of the library was $3017 more than the cost of
providing the service for the fiscal year 2003-04. The total property tax collections for library
purposes were $601,382 while the cost of providing the service was $598,310, which results in
the surplus of $3071. A copy of the letter from the Los Angeles County Public Library is
attached. It includes a listing of the property tax support and cost of service for all of the branch
libraries in the system. Hermosa Beach is one of 4 cities that are in the surplus position. The two
with the largest surpluses are Malibu and Manhattan Beach. Manhattan Beach has reached
agreement with the Library system to use its surplus to buy the land and building where the
existing library is located and has also purchased books and furniture. Malibu has reached an
agreement where its surplus funds will be held in a trust or a reserve account until they decide
how they intend to use the funds. They are now completing a needs study that will provide some
assistance to them in programming the use of the funds. This reserve fund could be used for any
number of library related purposes and must be approved b/ the City Council before it is used for
any purpose.
I asked the Hermosa Beach Friends of Library for a recommendation on the use of the surplus
and they have concluded that the system should make a refund to the city of the surplus for this
year. The branch library and the County Librarian would suggest that the funds be used to
purchase new books. Since the funds are set aside for Library purposes a third alternative might
be to allow the funds to accumulate and be used to cover lean times like we experienced 10 years
ago with the funding cutbacks that the library faced. It is likely that the surplus will grow in the
coming years and if these funds where held in a reserve type account that could be used to fill a
gap in funding should there be a need. They could also be used to improve the building should
the funds be saved up over a period of years. This approach is really similar to both the results
that have been negotiated with Malibu and Manhattan Beach. If this approach is taken, it could
be set up this year and when and if there is a surplus in the next and future years the City Council
and the community can decide how the funds would be spent for library purposes.
Respectfully submitted,
Stephen Burrel
City Manager
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